SUBCHAPTER XVIII—HEALTH INSURANCE FOR AGED AND DISABLED
Executive Documents
Ex. Ord. No. 13890. Protecting and Improving Medicare for Our Nation's Seniors
Ex. Ord. No. 13890, Oct. 3, 2019, 84 F.R. 53573, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
America's seniors are overwhelmingly satisfied with their Medicare coverage. The vast majority of seniors believe that the program delivers high-quality health outcomes. Medicare empowers seniors to choose their own providers and the type of health insurance that works best for them, whether it is fee-for-service (FFS) Medicare, in which the Federal Government pays for covered services, or Medicare Advantage (MA), in which Medicare dollars are used to purchase qualified private health insurance. "Medicare for All" would take away the choices currently available within Medicare and centralize even more power in Washington, harming seniors and other Medicare beneficiaries. Throughout their lives, workers and their employers have contributed their own money to the Medicare Trust Fund. It would be a mistake to eliminate Americans' healthcare choices and to force them into a new system that is effectively a Government takeover of their healthcare.
"Medicare for All" would not only hurt America's seniors, it would also eliminate health choices for all Americans. Instead of picking the health insurance that best meets their needs, Americans would generally be subject to a single, Government-run system. Private insurance for traditional health services, upon which millions of Americans depend, would be prohibited. States would be hindered from offering the types of insurance that work best for their citizens. The Secretary of Health and Human Services (Secretary) would have the authority to control and approve health expenditures; such a system could create, among other problems, delays for patients in receiving needed care. To pay for this system, the Federal Government would compel Americans to pay more in taxes. No one—neither seniors nor any American—would have the same options to choose their health coverage as they do now.
Instead of ending the current Medicare program and eliminating health choices for all Americans, my Administration will continue to protect and improve Medicare by building on those aspects of the program that work well, including the market-based approaches in the current system. The MA component, for example, delivers efficient and value-based care through choice and private competition, and has improved aspects of the Medicare program that previously failed seniors. The Medicare program shall adopt and implement those market-based recommendations developed pursuant to Executive Order 13813 of October 12, 2017 (Promoting Healthcare Choice and Competition Across the United States) [former
(i) encourage innovative MA benefit structures and plan designs, including through changes in regulations and guidance that reduce barriers to obtaining Medicare Medical Savings Accounts and that promote innovations in supplemental benefits and telehealth services;
(ii) include a payment model that adjusts supplemental MA benefits to allow Medicare beneficiaries to share more directly in the savings from the program, including through cash or monetary rebates, thus creating more incentives to seek high-value care; and
(iii) ensure that, to the extent permitted by law, FFS Medicare is not advantaged or promoted over MA with respect to its administration.
(b) The Secretary, in consultation with the Chairman of the Council of Economic Advisers, shall submit to the President, through the Assistants to the President for Domestic and Economic Policy, a report within 180 days from the date of this order that identifies approaches to modify Medicare FFS payments to more closely reflect the prices paid for services in MA and the commercial insurance market, to encourage more robust price competition, and otherwise to inject market pricing into Medicare FFS reimbursement.
(a) the competitiveness of the health market in the States in which such plans operate, including whether those States maintain certificate-of-need laws or other anti-competitive restrictions on health access; and
(b) the enhanced access to health outcomes made possible through telehealth services or other innovative technologies.
(a) proposing a regulation that would eliminate burdensome regulatory billing requirements, conditions of participation, supervision requirements, benefit definitions, and all other licensure requirements of the Medicare program that are more stringent than applicable Federal or State laws require and that limit professionals from practicing at the top of their profession;
(b) proposing a regulation that would ensure appropriate reimbursement by Medicare for time spent with patients by both primary and specialist health providers practicing in all types of health professions; and
(c) conducting a comprehensive review of regulatory policies that create disparities in reimbursement between physicians and non-physician practitioners and proposing a regulation that would, to the extent allowed by law, ensure that items and services provided by clinicians, including physicians, physician assistants, and nurse practitioners, are appropriately reimbursed in accordance with the work performed rather than the clinician's occupation.
(a) streamlining the approval, coverage, and coding process so that innovative products are brought to market faster, and so that such products, including breakthrough medical devices and advances in telehealth services and similar technologies, are appropriately reimbursed and widely available, consistent with the principles of patient safety, market-based policies, and value for patients. This process shall include:
(i) adopting regulations and guidance that minimize and eliminate, as appropriate, the time and steps between approval by the Food and Drug Administration (FDA) and coverage decisions by the Centers for Medicare and Medicaid Services (CMS);
(ii) clarifying the application of coverage standards, including the evidence standards CMS uses in applying its reasonable-and-necessary standard, the standards for deciding appeals of coverage decisions, and the prioritization and timeline for each National Coverage Determination process in light of changes made to local coverage determination processes; and
(iii) identifying challenges to the use of parallel FDA and CMS review and proposing changes to address those challenges; and
(b) modifying the Value-Based Insurance Design payment model to remove any disincentives for MA plans to cover items and services that make use of new technologies that are not covered by FFS Medicare when those items and services can save money and improve the quality of care.
(b) Within 1 year of the date of this order, the Secretary shall use Medicare claims data to give health providers additional information regarding practice patterns for services that may pose undue risks to patients, and to inform health providers about practice patterns that are outliers or that are outside recommended standards of care.
(b) The Secretary shall study and, within 180 days of the date of this order, recommend approaches to transition toward true market-based pricing in the FFS Medicare program. The Secretary shall submit the results of this study to the President through the Assistants to the President for Domestic and Economic Policy. Approaches studied shall include:
(i) shared savings and competitive bidding in FFS Medicare;
(ii) use of MA-negotiated rates to set FFS Medicare rates; and
(iii) novel approaches to information development and sharing that may enable markets to lower cost and improve quality for FFS Medicare beneficiaries.
(b) Within 1 year of the date of this order, the Secretary shall identify and remove unnecessary barriers to private contracts that allow Medicare beneficiaries to obtain the care of their choice and facilitate the development of market-driven prices.
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Donald J. Trump.
§1395. Prohibition against any Federal interference
Nothing in this subchapter shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer or employee of any institution, agency, or person providing health services; or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.
(Aug. 14, 1935, ch. 531, title XVIII, §1801, as added
Statutory Notes and Related Subsidiaries
Short Title
For short title of title I of
Protecting and Improving Guaranteed Medicare Benefits
"(a)
"(b)
§1395a. Free choice by patient guaranteed
(a) Basic freedom of choice
Any individual entitled to insurance benefits under this subchapter may obtain health services from any institution, agency, or person qualified to participate under this subchapter if such institution, agency, or person undertakes to provide him such services.
(b) Use of private contracts by medicare beneficiaries
(1) In general
Subject to the provisions of this subsection, nothing in this subchapter shall prohibit a physician or practitioner from entering into a private contract with a medicare beneficiary for any item or service—
(A) for which no claim for payment is to be submitted under this subchapter, and
(B) for which the physician or practitioner receives—
(i) no reimbursement under this subchapter directly or on a capitated basis, and
(ii) receives no amount for such item or service from an organization which receives reimbursement for such item or service under this subchapter directly or on a capitated basis.
(2) Beneficiary protections
(A) In general
Paragraph (1) shall not apply to any contract unless—
(i) the contract is in writing and is signed by the medicare beneficiary before any item or service is provided pursuant to the contract;
(ii) the contract contains the items described in subparagraph (B); and
(iii) the contract is not entered into at a time when the medicare beneficiary is facing an emergency or urgent health care situation.
(B) Items required to be included in contract
Any contract to provide items and services to which paragraph (1) applies shall clearly indicate to the medicare beneficiary that by signing such contract the beneficiary—
(i) agrees not to submit a claim (or to request that the physician or practitioner submit a claim) under this subchapter for such items or services even if such items or services are otherwise covered by this subchapter;
(ii) agrees to be responsible, whether through insurance or otherwise, for payment of such items or services and understands that no reimbursement will be provided under this subchapter for such items or services;
(iii) acknowledges that no limits under this subchapter (including the limits under
(iv) acknowledges that Medigap plans under
(v) acknowledges that the medicare beneficiary has the right to have such items or services provided by other physicians or practitioners for whom payment would be made under this subchapter.
Such contract shall also clearly indicate whether the physician or practitioner is excluded from participation under the medicare program under
(3) Physician or practitioner requirements
(A) In general
Paragraph (1) shall not apply to any contract entered into by a physician or practitioner unless an affidavit described in subparagraph (B) is in effect during the period any item or service is to be provided pursuant to the contract.
(B) Affidavit
An affidavit is described in this subparagraph if—
(i) the affidavit identifies the physician or practitioner and is in writing and is signed by the physician or practitioner;
(ii) the affidavit provides that the physician or practitioner will not submit any claim under this subchapter for any item or service provided to any medicare beneficiary (and will not receive any reimbursement or amount described in paragraph (1)(B) for any such item or service) during the applicable 2-year period (as defined in subparagraph (D)); and
(iii) a copy of the affidavit is filed with the Secretary no later than 10 days after the first contract to which such affidavit applies is entered into.
(C) Enforcement
If a physician or practitioner signing an affidavit under subparagraph (B) knowingly and willfully submits a claim under this subchapter for any item or service provided during the applicable 2-year period (or receives any reimbursement or amount described in paragraph (1)(B) for any such item or service) with respect to such affidavit—
(i) this subsection shall not apply with respect to any items and services provided by the physician or practitioner pursuant to any contract on and after the date of such submission and before the end of such period; and
(ii) no payment shall be made under this subchapter for any item or service furnished by the physician or practitioner during the period described in clause (i) (and no reimbursement or payment of any amount described in paragraph (1)(B) shall be made for any such item or service).
(D) Applicable 2-year periods for effectiveness of affidavits
In this subsection, the term "applicable 2-year period" means, with respect to an affidavit of a physician or practitioner under subparagraph (B), the 2-year period beginning on the date the affidavit is signed and includes each subsequent 2-year period unless the physician or practitioner involved provides notice to the Secretary (in a form and manner specified by the Secretary), not later than 30 days before the end of the previous 2-year period, that the physician or practitioner does not want to extend the application of the affidavit for such subsequent 2-year period.
(4) Limitation on actual charge and claim submission requirement not applicable
(5) Posting of information on opt-out physicians and practitioners
(A) In general
Beginning not later than February 1, 2016, the Secretary shall make publicly available through an appropriate publicly accessible website of the Department of Health and Human Services information on the number and characteristics of opt-out physicians and practitioners and shall update such information on such website not less often than annually.
(B) Information to be included
The information to be made available under subparagraph (A) shall include at least the following with respect to opt-out physicians and practitioners:
(i) Their number.
(ii) Their physician or professional specialty or other designation.
(iii) Their geographic distribution.
(iv) The timing of their becoming opt-out physicians and practitioners, relative, to the extent feasible, to when they first enrolled in the program under this subchapter and with respect to applicable 2-year periods.
(v) The proportion of such physicians and practitioners who billed for emergency or urgent care services.
(6) Definitions
In this subsection:
(A) Medicare beneficiary
The term "medicare beneficiary" means an individual who is entitled to benefits under part A or enrolled under part B.
(B) Physician
The term "physician" has the meaning given such term by paragraphs (1), (2), (3), and (4) of
(C) Practitioner
The term "practitioner" has the meaning given such term by
(D) Opt-out physician or practitioner
The term "opt-out physician or practitioner" means a physician or practitioner who has in effect an affidavit under paragraph (3)(B).
(Aug. 14, 1935, ch. 531, title XVIII, §1802, as added
Editorial Notes
Amendments
2015—Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(C).
Subsec. (b)(3)(D).
Subsec. (b)(5).
Subsec. (b)(5)(D).
Subsec. (b)(6).
2003—Subsec. (b)(5)(B).
1997—
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Effective Date of 1997 Amendment
Updating the Welcome to Medicare Package
"(a)
"(b)
Report to Congress on Effect of Private Contracts
§1395b. Option to individuals to obtain other health insurance protection
Nothing contained in this subchapter shall be construed to preclude any State from providing, or any individual from purchasing or otherwise securing, protection against the cost of any health services.
(Aug. 14, 1935, ch. 531, title XVIII, §1803, as added
Statutory Notes and Related Subsidiaries
Impact of Increased Investments in Health Research on Future Medicare Costs
National Bipartisan Commission on the Future of Medicare
Exclusion From Wages and Compensation of Refunds Required From Employers To Compensate for Duplication of Medicare Benefits by Health Care Benefits Provided by Employers
"(a)
"(b)
"(c)
"(1)
"(2)
"(3)
"(d)
"(e)
United States Bipartisan Commission on Comprehensive Health Care
Maintenance of Effort Regarding Duplicative Benefits
Task Force on Long-Term Health Care Policies
§1395b–1. Incentives for economy while maintaining or improving quality in provision of health services
(a) Grants and contracts to develop and engage in experiments and demonstration projects
(1) The Secretary of Health and Human Services is authorized, either directly or through grants to public or private agencies, institutions, and organizations or contracts with public or private agencies, institutions, and organizations, to develop and engage in experiments and demonstration projects for the following purposes:
(A) to determine whether, and if so which, changes in methods of payment or reimbursement (other than those dealt with in section 222(a) of the Social Security Amendments of 1972) for health care and services under health programs established by this chapter, including a change to methods based on negotiated rates, would have the effect of increasing the efficiency and economy of health services under such programs through the creation of additional incentives to these ends without adversely affecting the quality of such services;
(B) to determine whether payments for services other than those for which payment may be made under such programs (and which are incidental to services for which payment may be made under such programs) would, in the judgment of the Secretary, result in more economical provision and more effective utilization of services for which payment may be made under such program, where such services are furnished by organizations and institutions which have the capability of providing—
(i) comprehensive health care services,
(ii) mental health care services (as defined by section 2691(c) 1 of this title),
(iii) ambulatory health care services (including surgical services provided on an outpatient basis), or
(iv) institutional services which may substitute, at lower cost, for hospital care;
(C) to determine whether the rates of payment or reimbursement for health care services, approved by a State for purposes of the administration of one or more of its laws, when utilized to determine the amount to be paid for services furnished in such State under the health programs established by this chapter, would have the effect of reducing the costs of such programs without adversely affecting the quality of such services;
(D) to determine whether payments under such programs based on a single combined rate of reimbursement or charge for the teaching activities and patient care which residents, interns, and supervising physicians render in connection with a graduate medical education program in a patient facility would result in more equitable and economical patient care arrangements without adversely affecting the quality of such care;
(E) to determine whether coverage of intermediate care facility services and homemaker services would provide suitable alternatives to posthospital benefits presently provided under this subchapter; such experiment and demonstration projects may include:
(i) counting each day of care in an intermediate care facility as one day of care in a skilled nursing facility, if such care was for a condition for which the individual was hospitalized,
(ii) covering the services of homemakers for a maximum of 21 days, if institutional services are not medically appropriate,
(iii) determining whether such coverage would reduce long-range costs by reducing the lengths of stay in hospitals and skilled nursing facilities, and
(iv) establishing alternative eligibility requirements and determining the probable cost of applying each alternative, if the project suggests that such extension of coverage would be desirable;
(F) to determine whether, and if so which type of, fixed price or performance incentive contract would have the effect of inducing to the greatest degree effective, efficient, and economical performance of agencies and organizations making payment under agreements or contracts with the Secretary for health care and services under health programs established by this chapter;
(G) to determine under what circumstances payment for services would be appropriate and the most appropriate, equitable, and noninflationary methods and amounts of reimbursement under health care programs established by this chapter for services, which are performed independently by an assistant to a physician, including a nurse practitioner (whether or not performed in the office of or at a place at which such physician is physically present), and—
(i) which such assistant is legally authorized to perform by the State or political subdivision wherein such services are performed, and
(ii) for which such physician assumes full legal and ethical responsibility as to the necessity, propriety, and quality thereof;
(H) to establish an experimental program to provide day-care services, which consist of such personal care, supervision, and services as the Secretary shall by regulation prescribe, for individuals eligible to enroll in the supplemental medical insurance program established under part B of this subchapter and subchapter XIX of this chapter, in day-care centers which meet such standards as the Secretary shall by regulation establish;
(I) to determine whether the services of clinical psychologists may be made more generally available to persons eligible for services under this subchapter and subchapter XIX of this chapter in a manner consistent with quality of care and equitable and efficient administration;
(J) to develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by this chapter; and
(K) to determine whether the use of competitive bidding in the awarding of contracts, or the use of other methods of reimbursement, under part B of subchapter XI would be efficient and effective methods of furthering the purposes of that part.
For purposes of this subsection, "health programs established by this chapter" means the program established by this subchapter and a program established by a plan of a State approved under subchapter XIX of this chapter.
(2) Grants, payments under contracts, and other expenditures made for experiments and demonstration projects under paragraph (1) shall be made in appropriate part from the Federal Hospital Insurance Trust Fund (established by
(b) Waiver of certain payment or reimbursement requirements; advice and recommendations of specialists preceding experiments and demonstration projects
In the case of any experiment or demonstration project under subsection (a), the Secretary may waive compliance with the requirements of this subchapter and subchapter XIX of this chapter insofar as such requirements relate to reimbursement or payment on the basis of reasonable cost, or (in the case of physicians) on the basis of reasonable charge, or to reimbursement or payment only for such services or items as may be specified in the experiment; and costs incurred in such experiment or demonstration project in excess of the costs which would otherwise be reimbursed or paid under such subchapters may be reimbursed or paid to the extent that such waiver applies to them (with such excess being borne by the Secretary). No experiment or demonstration project shall be engaged in or developed under subsection (a) until the Secretary obtains the advice and recommendations of specialists who are competent to evaluate the proposed experiment or demonstration project as to the soundness of its objectives, the possibilities of securing productive results, the adequacy of resources to conduct the proposed experiment or demonstration project, and its relationship to other similar experiments and projects already completed or in process.
(
Editorial Notes
References in Text
Section 222(a) of the Social Security Amendments of 1972, referred to in subsec. (a)(1)(A), is section 222(a) of
Codification
Section is comprised of subsecs. (a) and (b) of section 402 of
Section was enacted as a part of the Social Security Amendments of 1967, and not as a part of the Social Security Act which comprises this chapter.
Amendments
1984—Subsec. (a)(1).
1982—Subsec. (a)(1)(K).
1981—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b).
1977—Subsec. (a)(1)(J).
1972—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Change of Name
"Secretary of Health and Human Services" substituted in text for "Secretary of Health, Education, and Welfare" pursuant to section 509(b)
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1981 Amendment, Savings, and Transitional Provisions
For effective date, savings, and transitional provisions relating to amendment by
Community-Based Care Transitions Program
"(a)
"(b)
"(1)
"(A) A subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act (
"(B) An appropriate community-based organization that provides care transition services under this section across a continuum of care through arrangements with subsection (d) hospitals (as so defined) to furnish the services described in subsection (c)(2)(B)(i) and whose governing body includes sufficient representation of multiple health care stakeholders (including consumers).
"(2)
"(A) Cognitive impairment.
"(B) Depression.
"(C) A history of multiple readmissions.
"(D) Any other chronic disease or risk factor as determined by the Secretary.
"(3)
"(4)
"(5)
"(6)
"(c)
"(1)
"(A)
"(B)
"(2)
"(A)
"(i)
"(ii)
"(B)
"(i) Initiating care transition services for a high-risk Medicare beneficiary not later than 24 hours prior to the discharge of the beneficiary from the eligible entity.
"(ii) Arranging timely post-discharge follow-up services to the high-risk Medicare beneficiary to provide the beneficiary (and, as appropriate, the primary caregiver of the beneficiary) with information regarding responding to symptoms that may indicate additional health problems or a deteriorating condition.
"(iii) Providing the high-risk Medicare beneficiary (and, as appropriate, the primary caregiver of the beneficiary) with assistance to ensure productive and timely interactions between patients and post-acute and outpatient providers.
"(iv) Assessing and actively engaging with a high-risk Medicare beneficiary (and, as appropriate, the primary caregiver of the beneficiary) through the provision of self-management support and relevant information that is specific to the beneficiary's condition.
"(v) Conducting comprehensive medication review and management (including, if appropriate, counseling and self-management support).
"(C)
"(3)
"(A) participate in a program administered by the Administration on Aging to provide concurrent care transitions interventions with multiple hospitals and practitioners; or
"(B) provide services to medically underserved populations, small communities, and rural areas.
"(d)
"(e)
"(f)
Pilot Testing Pay-for-Performance Programs for Certain Medicare Providers
"(a)
"(b)
"(1) Psychiatric hospitals (as described in clause (i) of section 1886(d)(1)(B) of such Act (
"(2) Long-term care hospitals (as described in clause (iv) of such section).
"(3) Rehabilitation hospitals (as described in clause (ii) of such section).
"(4) PPS-exempt cancer hospitals (as described in clause (v) of such section).
"(5) Hospice programs (as defined in section 1861(dd)(2) of such Act (
"(c)
"(d)
"(e)
"(1) the Secretary determines that such expansion is expected to—
"(A) reduce spending under title XVIII of the Social Security Act [
"(B) improve the quality of care and reduce spending;
"(2) the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under such title XVIII; and
"(3) the Secretary determines that such expansion would not deny or limit the coverage or provision of benefits under such title XIII [XVIII] for Medicare beneficiaries."
Medicare Medical Home Demonstration Project
"(a)
"(1) care management fees are paid to persons performing services as personal physicians; and
"(2) incentive payments are paid to physicians participating in practices that provide services as a medical home under subsection (d).
For purposes of this subsection, the term 'high-need population' means individuals with multiple chronic illnesses that require regular medical monitoring, advising, or treatment.
"(b)
"(1)
"(2)
"(3)
"(A) The expansion of the project is expected to improve the quality of patient care without increasing spending under the Medicare program (not taking into account amounts available under subsection (g)).
"(B) The expansion of the project is expected to reduce spending under the Medicare program (not taking into account amounts available under subsection (g)) without reducing the quality of patient care.
"(c)
"(1)
"(A) meets the requirements described in paragraph (2); and
"(B) performs the services described in paragraph (3).
Nothing in this paragraph shall be construed as preventing such a physician from being a specialist or subspecialist for an individual requiring ongoing care for a specific chronic condition or multiple chronic conditions (such as severe asthma, complex diabetes, cardiovascular disease, rheumatologic disorder) or for an individual with a prolonged illness.
"(2)
"(A) The physician is a board certified physician who provides first contact and continuous care for individuals under the physician's care.
"(B) The physician has the staff and resources to manage the comprehensive and coordinated health care of each such individual.
"(3)
"(A) Advocates for and provides ongoing support, oversight, and guidance to implement a plan of care that provides an integrated, coherent, cross-discipline plan for ongoing medical care developed in partnership with patients and including all other physicians furnishing care to the patient involved and other appropriate medical personnel or agencies (such as home health agencies).
"(B) Uses evidence-based medicine and clinical decision support tools to guide decision-making at the point-of-care based on patient-specific factors.
"(C) Uses health information technology, that may include remote monitoring and patient registries, to monitor and track the health status of patients and to provide patients with enhanced and convenient access to health care services.
"(D) Encourages patients to engage in the management of their own health through education and support systems.
"(d)
"(1) is in charge of targeting beneficiaries for participation in the project; and
"(2) is responsible for—
"(A) providing safe and secure technology to promote patient access to personal health information;
"(B) developing a health assessment tool for the individuals targeted; and
"(C) providing training programs for personnel involved in the coordination of care.
"(e)
"(1)
"(2)
"(3)
"(f)
"(1)
"(2)
"(g)
"(h)
Post-Acute Care Payment Reform Demonstration Program
"(a)
"(1)
"(2)
"(3)
"(b)
"(c)
"(d)
Medicare Care Management Performance Demonstration
"(a)
"(1)
"(A) promoting continuity of care;
"(B) helping stabilize medical conditions;
"(C) preventing or minimizing acute exacerbations of chronic conditions; and
"(D) reducing adverse health outcomes, such as adverse drug interactions related to polypharmacy.
"(2)
"(A) two shall be in an urban area;
"(B) one shall be in a rural area; and
"(C) one shall be in a State with a medical school with a Department of Geriatrics that manages rural outreach sites and is capable of managing patients with multiple chronic conditions, one of which is dementia.
"(3)
"(4)
"(b)
"(1)
"(A) the use of health information technology to manage the clinical care of eligible beneficiaries consistent with paragraph (3); and
"(B) the electronic reporting of clinical quality and outcomes measures in accordance with requirements established by the Secretary under the demonstration program.
"(2)
"(3)
"(A) to assess each eligible beneficiary for conditions other than chronic conditions, such as impaired cognitive ability and co-morbidities, for the purposes of developing care management requirements;
"(B) to serve as the primary contact of eligible beneficiaries in accessing items and services for which payment may be made under the medicare program;
"(C) to establish and maintain health care information system for such beneficiaries;
"(D) to promote continuity of care across providers and settings;
"(E) to use evidence-based guidelines and meet such clinical quality and outcome measures as the Secretary shall require;
"(F) to promote self-care through the provision of patient education and support for patients or, where appropriate, family caregivers;
"(G) when appropriate, to refer such beneficiaries to community service organizations; and
"(H) to meet such other complex care management requirements as the Secretary may specify.
The guidelines and measures required under subparagraph (E) shall be designed to take into account beneficiaries with multiple chronic conditions.
"(c)
"(d)
"(1)
"(2)
"(e)
"(1)
"(2)
"(f)
"(g)
"(h)
"(1)
"(A) is entitled to benefits under part A and enrolled for benefits under part B of title XVIII of the Social Security Act [
"(B) has one or more chronic medical conditions specified by the Secretary (one of which may be cognitive impairment).
"(2)
Demonstration Project for Disease Management for Severely Chronically Ill Medicare Beneficiaries
Cancer Prevention and Treatment Demonstration for Ethnic and Racial Minorities
"(a)
"(1)
"(A) improve the quality of items and services provided to target individuals in order to facilitate reduced disparities in early detection and treatment of cancer;
"(B) improve clinical outcomes, satisfaction, quality of life, and appropriate use of medicare-covered services and referral patterns among those target individuals with cancer;
"(C) eliminate disparities in the rate of preventive cancer screening measures, such as pap smears and prostate cancer screenings, among target individuals; and
"(D) promote collaboration with community-based organizations to ensure cultural competency of health care professionals and linguistic access for persons with limited English proficiency.
"(2)
"(b)
"(1)
"(2)
"(A) Two projects for each of the four following major racial and ethnic minority groups:
"(i) American Indians, including Alaska Natives, Eskimos, and Aleuts.
"(ii) Asian Americans and Pacific Islanders.
"(iii) Blacks.
"(iv) Hispanics.
The two projects must target different ethnic subpopulations.
"(B) One project within the Pacific Islands.
"(C) At least one project each in a rural area and inner-city area.
"(3)
"(A) reduce expenditures under the medicare program under title XVIII of the Social Security Act [
"(B) do not increase expenditures under the medicare program and reduce racial and ethnic health disparities in the quality of health care services provided to target individuals and increase satisfaction of beneficiaries and health care providers;
the Secretary shall continue the existing demonstration projects and may expand the number of demonstration projects.
"(c)
"(1)
"(2)
"(A) A description of the demonstration projects.
"(B) An evaluation of—
"(i) the cost-effectiveness of the demonstration projects;
"(ii) the quality of the health care services provided to target individuals under the demonstration projects; and
"(iii) beneficiary and health care provider satisfaction under the demonstration projects.
"(C) Any other information regarding the demonstration projects that the Secretary determines to be appropriate.
"(d)
"(e)
"(1)
"(A)
"(B)
"(2)
Lifestyle Modification Program Demonstration
"(a)
"(1) The project shall include no fewer than 1,800 medicare beneficiaries who complete under the project the entire course of treatment under the Lifestyle Modification Program.
"(2) The project shall be conducted over a course of 4 years.
"(b)
"(1)
"(2)
"(A)
"(B)
Medicare Coordinated Care Demonstration Project
"(a)
"(1)
"(A) improve the quality of items and services provided to target individuals; and
"(B) reduce expenditures under the medicare program under title XVIII of the Social Security Act (
"(2)
"(b)
"(1)
"(2)
"(A) 5 projects in urban areas;
"(B) 3 projects in rural areas; and
"(C) 1 project within the District of Columbia which is operated by a nonprofit academic medical center that maintains a National Cancer Institute certified comprehensive cancer center.
"(3)
"(A)
"(i) reduce expenditures under the medicare program; or
"(ii) do not increase expenditures under the medicare program and increase the quality of health care services provided to target individuals and satisfaction of beneficiaries and health care providers;
the Secretary shall continue the existing demonstration projects and may expand the number of demonstration projects.
"(B)
"(c)
"(1)
"(2)
"(A) A description of the demonstration projects conducted under this section.
"(B) An evaluation of—
"(i) the cost-effectiveness of the demonstration projects;
"(ii) the quality of the health care services provided to target individuals under the demonstration projects; and
"(iii) beneficiary and health care provider satisfaction under the demonstration project.
"(C) Any other information regarding the demonstration projects conducted under this section that the Secretary determines to be appropriate.
"(d)
"(e)
"(1)
"(A)
"(i)
"(ii)
"(B)
"(2)
Informatics, Telemedicine, and Education Demonstration Project
"(a)
"(1)
"(2)
"(A)
"(B)
"(3)
"(4)
"(b)
"(1) Improving patient access to and compliance with appropriate care guidelines for individuals with diabetes mellitus through direct telecommunications link with information networks in order to improve patient quality-of-life and reduce overall health care costs.
"(2) Developing a curriculum to train health professionals (particularly primary care health professionals) in the use of medical informatics and telecommunications.
"(3) Demonstrating the application of advanced technologies, such as video-conferencing from a patient's home, remote monitoring of a patient's medical condition, interventional informatics, and applying individualized, automated care guidelines, to assist primary care providers in assisting patients with diabetes in a home setting.
"(4) Application of medical informatics to residents with limited English language skills.
"(5) Developing standards in the application of telemedicine and medical informatics.
"(6) Developing a model for the cost-effective delivery of primary and related care both in a managed care environment and in a fee-for-service environment.
"(c)
"(1) The consortium is located in an area with a high concentration of medical schools and tertiary care facilities in the United States and has appropriate arrangements (within or outside the consortium) with such schools and facilities, universities, and telecommunications providers, in order to conduct the project.
"(2) The consortium submits to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a description of the use to which the consortium would apply any amounts received under the project.
"(3) The consortium guarantees that it will be responsible for payment for all costs of the project that are not paid under this section and that the maximum amount of payment that may be made to the consortium under this section shall not exceed the amount specified in subsection (d)(3).
"(d)
"(1)
"(2)
"(A)
"(B)
"(i) The acquisition of telemedicine equipment for use in patients' homes or at sites providing health care to patients located in medically underserved areas.
"(ii) Curriculum development and training of health professionals in medical informatics and telemedicine.
"(iii) Payment of telecommunications costs (including salaries and maintenance of equipment), including costs of telecommunications between patients' homes and the eligible network and between the network and other entities under the arrangements described in subsection (c)(1).
"(iv) Payments to practitioners and providers under the medicare programs.
"(C)
"(i) The purchase or installation of transmission equipment (other than such equipment used by health professionals for activities related to the project).
"(ii) The establishment or operation of a telecommunications common carrier network.
"(iii) Construction (except for minor renovations related to the installation of reimbursable equipment) or the acquisition or building of real property.
"(3)
"(4)
"(e)
"(f)
"(1)
"(2)
"(3)
Clarification of Secretarial Waiver Authority for Rural Hospital Demonstrations
Volunteer Senior Aides Demonstration Projects for Basic Medical Assistance and Support to Families With Disabled or Ill Children
"(a)
"(b)
"(1)
"(2)
"(3)
"(c)
"(d)
"(1) $1,000,000 for each of the fiscal years 1990 and 1991; and
"(2) $2,000,000 for each of the fiscal years 1992, 1993, and 1994.
"(e)
Treatment of Certain Nursing Education Programs
"(a)
"(1) The Secretary of Health and Human Services shall provide for demonstration programs under this subsection in each of 5 hospitals for cost reporting periods beginning on or after July 1, 1989, and before July 1, 1994.
"(2) Under each demonstration project, subject to paragraph (4), the reasonable costs incurred by a hospital pursuant to a written agreement with an educational institution for the activities described in paragraph (3) conducted as part of an approved educational program that—
"(A) involves a substantial clinical component (as determined by the Secretary), and
"(B) leads to a master's or doctoral degree in nursing,
shall be allowable as reasonable costs under title XVIII of the Social Security Act [
"(3) The activities described in this paragraph are the activities for which the reasonable costs of conducting such activities are allowable under title XVIII of the Social Security Act if conducted under a hospital-operated approved educational program (other than an approved graduate medical education program), but only to the extent such activities are directly related to the operation of the educational program conducted pursuant to the written agreement between the hospital and the educational institution.
"(4) The amount paid under a demonstration program under this subsection to a hospital for a cost reporting period may not exceed $200,000.
"(5) The Secretary shall report to Congress, by not later than January 1, 1995, on the demonstration programs conducted under this subsection and on the supply and characteristics of nurses trained under such programs.
"(b)
Research on Long-Term Care Services for Medicare Beneficiaries
Adjustment of Contracts With Prepaid Health Plans
For requirement that Secretary of Health and Human Services modify contracts with health maintenance organizations under subsec. (a) of this section and section 222(a) of
Case Management Demonstration Projects
"(1)
"(2)
"(A) the project proposed to be conducted by Providence Hospital for case management of the elderly at risk for acute hospitalization as described in Project No. 18–P–99379/5–01;
"(B) the project proposed to be conducted by the Iowa Foundation for Medical Care to study patients with chronic congestive conditions to reduce repeated hospitalizations of such patients as described in Project No. P–99399/4–01; and
"(C) the project proposed to be conducted by Key Care Health Resources, Inc., to examine the effects of case management on 2,500 high cost medicare beneficiaries as described in Project No. 18–P–99396/5.
"(3)
"(4)
Demonstration Projects With Respect to Chronic Ventilator-Dependent Units in Hospitals
Research and Demonstration Projects on Rural and Inner-City Health Issues
"(a)
"(2) Not less than ten percent of the total amounts annually appropriated to, and expended by, the Health Care Financing Administration for the conduct of research and demonstration projects in fiscal years 1988, 1989, and 1990 shall be expended for research and demonstration projects relating exclusively or substantially to issues of providing health care in inner-city areas, including (but not limited to) the impact of the payment methodology under section 1886(d) of the Social Security Act on the financial viability of inner-city hospitals and the impact of medicare policies on access to (and the quality of) health care in inner-city areas.
"(b)
Alzheimer's Disease Demonstration Projects
Special Treatment of States Formerly Under Waiver
For treatment of hospitals in States which have had a waiver approved under this section, upon termination of waiver, see section 9202(j) of
Extension of Certain Medicare Municipal Health Services Demonstration Projects
"(a) The Secretary of Health and Human Services shall extend through December 31, 1997, approval of four municipal health services demonstration projects (located in Baltimore, Cincinnati, Milwaukee, and San Jose) authorized under section 402(a) of the Social Security Amendments of 1967 [
"(b) The Secretary shall work with each such demonstration project to develop a plan, to be submitted to the Committee on Ways and Means and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate by March 31, 1998, for the orderly transition of demonstration projects and the project participants to a non-demonstration project health care delivery system, such as through integration with a private or public health plan, including a medicaid managed care or Medicare+Choice plan.
"(c) A demonstration project under subsection (a) which does not develop and submit a transition plan under subsection (b) by March 31, 1998, or, if later, 6 months after the date of the enactment of the Balanced Budget Act of 1997 [Aug. 5, 1997], shall be discontinued as of December 31, 1998. The Secretary shall provide appropriate technical assistance to assist in the transition so that disruption of medical services to project participants may be minimized."
[References to Medicare+Choice deemed to refer to Medicare Advantage, see section 201(b) of
Demonstration Program for Reduction of Disability and Dependency Through Provision of Preventive Health Services Under Medicare
Payment for Costs of Hospital-Based Mobile Intensive Care Units
"(a)(1) In the case of a project described in subsection (b), the Secretary of Health and Human Services shall provide, except as provided in paragraph (2), that the amount of payments to hospitals covered under the project during the period described in paragraph (3) shall include payments for their operation of hospital-based mobile intensive care units (as defined by State statute) if the State provides satisfactory assurances that the total amount of payments to such hospitals under titles XVIII and XIX of the Social Security Act [
"(2) Paragraph (1) shall not apply if the State in which the project is located notifies the Secretary, within 30 days after the date of the enactment of this section [July 18, 1984], that the State does not want paragraph (1) to apply to that project.
"(3) The period referred to in paragraph (1) begins on the date of the enactment of this section and continues so long as the Secretary continues the Statewide waiver referred to in subsection (b), but in no case ends earlier than 90 days after the date final regulations to implement section 1886(c) of the Social Security Act [
"(b) The project referred to in subsection (a) is the statewide demonstration project established in the State of New Jersey under section 402 of the Social Security Amendments of 1967, as amended by section 222(b) of the Social Security Amendments of 1972 (
"(c) Payment for services described in this section shall be considered to be payments for services under part A of title XVIII of the Social Security Act [
Continuation of Secretary's Authority Regarding Experiments and Demonstration Projects
"(1) Except as provided in paragraph (2), the amendments made by this title [amending
"(2) The Secretary shall provide that, upon the request of a State which has a demonstration project, for payment of hospitals under title XVIII of the Social Security Act [
Alternative Care Demonstration Projects in Hospitals Short of Skilled Nursing Facilities
Continuation of Hospice Demonstration Projects; Report to Congress
"(1) Notwithstanding any provision of law which has the effect of restricting the time period of a hospice demonstration project in effect on July 15, 1982, pursuant to section 402(a) of the Social Security Amendments of 1967 [
"(2) Prior to September 30, 1983, the Secretary shall submit to Congress a report on the effectiveness of demonstration projects referred to in paragraph (1), including an evaluation of the cost-effectiveness of hospice care, the reasonableness of the 40-percent cap amount for hospice care as provided in section 1814(i) of the Social Security Act [
"(3)(A) Notwithstanding the provisions of paragraph (1), the Secretary of Health and Human Services, upon request of the hospice involved, shall permit continuation of a hospice demonstration project described in paragraph (1) until September 30, 1986, if the hospice involved in such demonstration project does not provide hospice care directly but acts as a channeling agency for the provision of hospice care.
"(B) During the period after the date on which a hospice demonstration project described in subparagraph (A) would otherwise have terminated under the provisions of paragraph (1), and prior to September 30, 1986, any such hospice demonstration project shall be subject to the same requirements as are imposed under the hospice program provided for under the amendments made by this section [amending
State Medicare Hospital Reimbursement Demonstration Project Limitation
Study of Need for Dual Participation of Skilled Nursing Facilities
Demonstration Projects for Physician-Directed Clinics in Urban Medically Underserved Areas; Report Submitted No Later Than January 1, 1981
Scope of Grants for Experiments and Demonstration Projects To Determine Methods for Prospective Payments to Hospitals, Skilled Nursing Facilities, and Other Providers of Services
"(1) the applicant for such grant is a State or an agency thereof,
"(2) such participant is an individual practice association which has been in existence for at least 3 years prior to the date of enactment of this section [Dec. 31, 1975] and which has in effect a contract with such State (or an agency thereof), entered into prior to the date on which the grant is approved by the Secretary, under which such association will, for a period which begins before and ends after the date such grant is so approved, provide health care services for individuals entitled to care and services under the State plan of such State which is approved under title XIX of the Social Security Act [
"(3) the purpose of the inclusion of the project of such association is to test the utility of a particular rate-setting methodology, designed to be employed in prepaid health plans, in an individual practice association operation, and
"(4) the applicant for such grant affirms that the use of moneys from such grant to make such payments to such individual practice association is necessary or useful in assuring that such association will be able to continue in operation and carry out the project described in clause (3)."
Experiments and Demonstration Projects To Determine Methods for Prospective Payments to Hospitals, Skilled Nursing Facilities, and Other Providers of Services for Care and Services Furnished; Scope; Waiver of Payment Requirements; Source and Manner of Payments for Grants, etc.; Reports to Congress
"(1) The Secretary of Health, Education, and Welfare [now Health and Human Services], directly or through contracts with, or grants to, public or private agencies or organizations, shall develop and carry out experiments and demonstration projects designed to determine the relative advantages and disadvantages of various alternative methods of making payment on a prospective basis to hospitals, skilled nursing facilities, and other providers of services for care and services provided by them under title XVIII of the Social Security Act [
"(2) The experiments and demonstration projects developed under paragraph (1) shall be of sufficient scope and shall be carried out on a wide enough scale to permit a thorough evaluation of the alternative methods of prospective payment under consideration while giving assurance that the results derived from the experiments and projects will obtain generally in the operation of the programs involved (without committing such programs to the adoption of any prospective payment system either locally or nationally).
"(3) In the case of any experiment or demonstration project under paragraph (1), the Secretary may waive compliance with the requirements of titles XVIII and XIX of the Social Security Act [
"(4) Grants, payments under contracts, and other expenditures made for experiments and demonstration projects under this subsection shall be made in appropriate part from the Federal Hospital Insurance Trust Fund (established by section 1817 of the Social Security Act [
"(5) The Secretary shall submit to the Congress no later than July 1, 1974, a full report on the experiments and demonstration projects carried out under this subsection and on the experience of other programs with respect to prospective reimbursement together with any related data and materials which he may consider appropriate. Such report shall include detailed recommendations with respect to the specific methods which could be used in the full implementation of a system of prospective payment to providers of services under the programs involved."
1 See References in Text note below.
§1395b–2. Notice of medicare benefits; medicare and medigap information
(a) Notice of medicare benefits
The Secretary shall prepare (in consultation with groups representing the elderly and with health insurers) and provide for distribution of a notice containing—
(1) a clear, simple explanation of the benefits available under this subchapter and the major categories of health care for which benefits are not available under this subchapter,
(2) the limitations on payment (including deductibles and coinsurance amounts) that are imposed under this subchapter, and
(3) a description of the limited benefits for long-term care services available under this subchapter and generally available under State plans approved under subchapter XIX.
Such notice shall be mailed annually to individuals entitled to benefits under part A or part B of this subchapter and when an individual applies for benefits under part A or enrolls under part B.
(b) Medicare and medigap information
The Secretary shall provide information via a toll-free telephone number on the programs under this subchapter. The Secretary shall provide, through the toll-free telephone number 1–800–MEDICARE, for a means by which individuals seeking information about, or assistance with, such programs who phone such toll-free number are transferred (without charge) to appropriate entities for the provision of such information or assistance. Such toll-free number shall be the toll-free number listed for general information and assistance in the annual notice under subsection (a) instead of the listing of numbers of individual contractors.
(c) Contents of notice
The notice provided under subsection (a) shall include—
(1) a statement which indicates that because errors do occur and because medicare fraud, waste, and abuse is a significant problem, beneficiaries should carefully check any explanation of benefits or itemized statement furnished pursuant to
(2) a statement of the beneficiary's right to request an itemized statement for medicare items and services (as provided in
(3) a description of the program to collect information on medicare fraud and abuse established under
(4) a toll-free telephone number maintained by the Inspector General in the Department of Health and Human Services for the receipt of complaints and information about waste, fraud, and abuse in the provision or billing of services under this subchapter.
(d) Medicare opioid safety education
The notice provided under subsection (a) shall include—
(1) references to educational resources regarding opioid use and pain management;
(2) a description of categories of alternative, non-opioid pain management treatments covered under this subchapter; and
(3) a suggestion for the beneficiary to talk to a physician regarding opioid use and pain management.
(Aug. 14, 1935, ch. 531, title XVIII, §1804, as added
Editorial Notes
Amendments
2018—Subsec. (d).
2003—Subsec. (b).
1997—Subsec. (c).
1994—
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Effective Date of 1997 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date
Monitoring Accuracy
"(A)
"(B)
State Regulatory Programs
For provisions relating to changes required to conform State regulatory programs to amendments by section 171 of
Demonstration Projects
Notice of Changes Under Repeal of Medicare Catastrophic Coverage
Benefits Counseling and Assistance Demonstration Project for Certain Medicare and Medicaid Beneficiaries
§1395b–3. Health insurance advisory service for medicare beneficiaries
(a) In general
The Secretary of Health and Human Services shall establish a health insurance advisory service program (in this section referred to as the "beneficiary assistance program") to assist medicare-eligible individuals with the receipt of services under the medicare and medicaid programs and other health insurance programs.
(b) Outreach elements
The beneficiary assistance program shall provide assistance—
(1) through operation using local Federal offices that provide information on the medicare program,
(2) using community outreach programs, and
(3) using a toll-free telephone information service.
(c) Assistance provided
The beneficiary assistance program shall provide for information, counseling, and assistance for medicare-eligible individuals with respect to at least the following:
(1) With respect to the medicare program—
(A) eligibility,
(B) benefits (both covered and not covered),
(C) the process of payment for services,
(D) rights and process for appeals of determinations,
(E) other medicare-related entities (such as peer review organizations, fiscal intermediaries, and carriers), and
(F) recent legislative and administrative changes in the medicare program.
(2) With respect to the medicaid program—
(A) eligibility, benefits, and the application process,
(B) linkages between the medicaid and medicare programs, and
(C) referral to appropriate State and local agencies involved in the medicaid program.
(3) With respect to medicare supplemental policies—
(A) the program under
(B) how to make informed decisions on whether to purchase such policies and on what criteria to use in evaluating different policies,
(C) appropriate Federal, State, and private agencies that provide information and assistance in obtaining benefits under such policies, and
(D) other issues deemed appropriate by the Secretary.
The beneficiary assistance program also shall provide such other services as the Secretary deems appropriate to increase beneficiary understanding of, and confidence in, the medicare program and to improve the relationship between beneficiaries and the program.
(d) Educational material
The Secretary, through the Administrator of the Centers for Medicare & Medicaid Services, shall develop appropriate educational materials and other appropriate techniques to assist employees in carrying out this section.
(e) Notice to beneficiaries
The Secretary shall take such steps as are necessary to assure that medicare-eligible beneficiaries and the general public are made aware of the beneficiary assistance program.
(f) Report
The Secretary shall include, in an annual report transmitted to the Congress, a report on the beneficiary assistance program and on other health insurance informational and counseling services made available to medicare-eligible individuals. The Secretary shall include in the report recommendations for such changes as may be desirable to improve the relationship between the medicare program and medicare-eligible individuals.
(
Editorial Notes
Codification
Section was enacted as part of the Omnibus Budget Reconciliation Act of 1990, and not as part of the Social Security Act which comprises this chapter.
Amendments
2003—Subsec. (d).
Statutory Notes and Related Subsidiaries
State Health Insurance Assistance Program Reporting Requirements
"(1) The amount of Federal funding provided to each such State for such program for the period involved and the amount of Federal funding provided by each such State for such program to each such entity for the period involved.
"(2) Information as the Secretary may specify, with respect to such programs carried out through such grants, consistent with the terms and conditions for receipt of such grants."
Medicare Enrollment Assistance
"(a)
"(1)
"(A)
"(B)
"(i) for fiscal year 2009, of $7,500,000;
"(ii) for the period of fiscal years 2010 through 2012, of $15,000,000;
"(iii) for fiscal year 2013, of $7,500,000;
"(iv) for fiscal year 2014, of $7,500,000;
"(v) for fiscal year 2015, of $7,500,000;
"(vi) for fiscal year 2016, of $13,000,000;
"(vii) for fiscal year 2017, of $13,000,000;
"(viii) for fiscal year 2018, of $13,000,000;
"(ix) for fiscal year 2019, of $13,000,000;
"(x) for fiscal year 2020, of $13,000,000;
"(xi) for fiscal year 2021, $15,000,000;
"(xii) for fiscal year 2022, $15,000,000;
"(xiii) for fiscal year 2023, $15,000,000; and
"(xiv) for the period beginning on October 1, 2023, and ending on December 31, 2024, $18,750,000.
Amounts appropriated under this subparagraph shall remain available until expended.
"(2)
"(3)
"(A)
"(B)
"(4)
"(b)
"(1)
"(A)
"(B)
"(i) for fiscal year 2009, of $7,500,000;
"(ii) for the period of fiscal years 2010 through 2012, of $15,000,000;
"(iii) for fiscal year 2013, of $7,500,000;
"(iv) for fiscal year 2014, of $7,500,000;
"(v) for fiscal year 2015, of $7,500,000;
"(vi) for fiscal year 2016, of $7,500,000;
"(vii) for fiscal year 2017, of $7,500,000;
"(viii) for fiscal year 2018, of $7,500,000;
"(ix) for fiscal year 2019, of $7,500,000;
"(x) for fiscal year 2020, of $7,500,000;
"(xi) for fiscal year 2021, $15,000,000;
"(xii) for fiscal year 2022, $15,000,000;
"(xiii) for fiscal year 2023, $15,000,000; and
"(xiv) for the period beginning on October 1, 2023, and ending on December 31, 2024, $18,750,000.
Amounts appropriated under this subparagraph shall remain available until expended.
"(2)
"(3)
"(A)
"(B)
"(c)
"(1)
"(A)
"(B)
"(i) for fiscal year 2009, of $5,000,000;
"(ii) for the period of fiscal years 2010 through 2012, of $10,000,000;
"(iii) for fiscal year 2013, of $5,000,000;
"(iv) for fiscal year 2014, of $5,000,000;
"(v) for fiscal year 2015, of $5,000,000;
"(vi) for fiscal year 2016, of $5,000,000;
"(vii) for fiscal year 2017, of $5,000,000;
"(viii) for fiscal year 2018, of $5,000,000;
"(ix) for fiscal year 2019, of $5,000,000;
"(x) for fiscal year 2020, of $5,000,000;
"(xi) for fiscal year 2021, $5,000,000;
"(xii) for fiscal year 2022, $5,000,000;
"(xiii) for fiscal year 2023, $5,000,000; and
"(xiv) for the period beginning on October 1, 2023, and ending on December 31, 2024, $6,250,000.
Amounts appropriated under this subparagraph shall remain available until expended.
"(2)
"(d)
"(1)
"(A) maintain and update web-based decision support tools, and integrated, person-centered systems, designed to inform older individuals (as defined in section 102 of the Older Americans Act of 1965 (
"(B) utilize cost-effective strategies to find older individuals with the greatest economic need (as defined in such section 102) and inform the individuals of the programs;
"(C) develop and maintain an information clearinghouse on best practices and the most cost-effective methods for finding older individuals with greatest economic need and informing the individuals of the programs; and
"(D) provide, in collaboration with related Federal agency partners administering the Federal programs, training and technical assistance on the most effective outreach, screening, and follow-up strategies for the Federal and State programs.
"(2)
"(i) for fiscal year 2009, of $5,000,000;
"(ii) for the period of fiscal years 2010 through 2012, of $5,000,000;
"(iii) for fiscal year 2013, of $5,000,000;
"(iv) for fiscal year 2014, of $5,000,000;
"(v) for fiscal year 2015, of $5,000,000;
"(vi) for fiscal year 2016, of $12,000,000;
"(vii) for fiscal year 2017, of $12,000,000;
"(viii) for fiscal year 2018, of $12,000,000;
"(ix) for fiscal year 2019, of $12,000,000;
"(x) for fiscal year 2020, of $12,000,000;
"(xi) for fiscal year 2021, $15,000,000;
"(xii) for fiscal year 2022, $15,000,000;
"(xiii) for fiscal year 2023, $15,000,000; and
"(xiv) for the period beginning on October 1, 2023, and ending on December 31, 2024, $18,750,000.
Amounts appropriated under this subparagraph shall remain available until expended.
"(e)
"(f)
"(g)
[
Beneficiary Outreach Demonstration Program
"(a)
"(b)
"(1)
"(2)
"(c)
"(d)
"(1)
"(A) utilization of, and satisfaction of those individuals referred to in subsection (a) with, the assistance provided under the program; and
"(B) the cost-effectiveness of providing beneficiary assistance through out-stationing medicare specialists at local offices of the Social Security Administration.
"(2)
Qualified Medicare Beneficiary Outreach
§1395b–4. Health insurance information, counseling, and assistance grants
(a) Grants
The Secretary of Health and Human Services (in this section referred to as the "Secretary") shall make grants to States, with approved State regulatory programs under
(b) Grant applications
(1) In submitting an application under this section, a State may consolidate and coordinate an application that consists of parts prepared by more than one agency or department of such State.
(2) As part of an application for a grant under this section, a State shall submit a plan for a State-wide health insurance information, counseling, and assistance program. Such program shall—
(A) establish or improve upon a health insurance information, counseling, and assistance program that provides counseling and assistance to eligible individuals in need of health insurance information, including—
(i) information that may assist individuals in obtaining benefits and filing claims under this subchapter and subchapter XIX of this chapter;
(ii) policy comparison information for medicare supplemental policies (as described in
(iii) information regarding long-term care insurance; and
(iv) information regarding other types of health insurance benefits that the Secretary determines to be appropriate;
(B) in conjunction with the health insurance information, counseling, and assistance program described in subparagraph (A), establish a system of referral to appropriate Federal or State departments or agencies for assistance with problems related to health insurance coverage (including legal problems), as determined by the Secretary;
(C) provide for a sufficient number of staff positions (including volunteer positions) necessary to provide the services of the health insurance information, counseling, and assistance program;
(D) provide assurances that staff members (including volunteer staff members) of the health insurance information, counseling, and assistance program have no conflict of interest in providing the counseling described in subparagraph (A);
(E) provide for the collection and dissemination of timely and accurate health care information to staff members;
(F) provide for training programs for staff members (including volunteer staff members);
(G) provide for the coordination of the exchange of health insurance information between the staff of departments and agencies of the State government and the staff of the health insurance information, counseling, and assistance program;
(H) make recommendations concerning consumer issues and complaints related to the provision of health care to agencies and departments of the State government and the Federal Government responsible for providing or regulating health insurance;
(I) establish an outreach program to provide the health insurance information and counseling described in subparagraph (A) and the referrals described in subparagraph (B) to eligible individuals; and
(J) demonstrate, to the satisfaction of the Secretary, an ability to provide the counseling and assistance required under this section.
(c) Special grants
(1) A State that is conducting a health insurance information, counseling, and assistance program that is substantially similar to a program described in subsection (b)(2) shall, as a requirement for eligibility for a grant under this section, demonstrate, to the satisfaction of the Secretary, that such State shall maintain the activities of such program at least at the level that such activities were conducted immediately preceding the date of the issuance of any grant during the period of time covered by such grant under this section.
(2) If the Secretary determines that the existing health insurance information, counseling, and assistance program is substantially similar to a program described in subsection (b)(2), the Secretary may waive some or all of the requirements described in such subsection and issue a grant to the State for the purpose of increasing the number of services offered by the health insurance information, counseling, and assistance program, experimenting with new methods of outreach in conducting such program, or expanding such program to geographic areas of the State not previously served by the program.
(d) Criteria for issuing grants
In issuing a grant under this section, the Secretary shall consider—
(1) the commitment of the State to carrying out the health insurance information, counseling, and assistance program described in subsection (b)(2), including the level of cooperation demonstrated—
(A) by the office of the chief insurance regulator of the State, or the equivalent State entity;
(B) other officials of the State responsible for overseeing insurance plans issued by nonprofit hospital and medical service associations; and
(C) departments and agencies of such State responsible for—
(i) administering funds under subchapter XIX of this chapter, and
(ii) administering funds appropriated under the Older Americans Act [
(2) the population of eligible individuals in such State as a percentage of the population of such State; and
(3) in order to ensure the needs of rural areas in such State, the relative costs and special problems associated with addressing the special problems of providing health care information, counseling, and assistance eligible 1 individuals residing in rural areas of such State.
(e) Annual State report
A State that receives a grant under this section shall, not later than 180 days after receiving such grant, and annually thereafter during the period of the grant, issue a report to the Secretary that includes information concerning—
(1) the number of individuals served by the health insurance information, counseling and assistance program of such State;
(2) an estimate of the amount of funds saved by the State, and by eligible individuals in the State, in the implementation of such program; and
(3) the problems that eligible individuals in such State encounter in procuring adequate and appropriate health care coverage.
(f) Report to Congress
Beginning with 1992, and annually thereafter, the Secretary shall issue a report to the Committee on Finance of the Senate, the Special Committee on Aging of the Senate, the Committee on Ways and Means of the House of Representatives, and the Committee on Energy and Commerce of the House of Representatives that—
(1) summarizes the allocation of funds authorized for grants under this section and the expenditure of such funds;
(2) outlines the problems that eligible individuals encounter in procuring adequate and appropriate health care coverage;
(3) makes recommendations that the Secretary determines to be appropriate to address the problems described in paragraph (3); 2 and
(4) in the case of the report issued 2 years after November 5, 1990, evaluates the effectiveness of counseling programs established under this program, and makes recommendations regarding continued authorization of funds for these purposes.
(g) Authorization of appropriations for grants
There are authorized to be appropriated, in equal parts from the Federal Hospital Insurance Trust Fund and from the Federal Supplementary Medical Insurance Trust Fund, $10,000,000 for each of fiscal years 1991, 1992, 1993, 1994, 1995, and 1996, to fund the grant programs described in this section.
(
Editorial Notes
References in Text
The Older Americans Act, referred to in subsec. (d)(1)(C)(ii), probably means the Older Americans Act of 1965, which is
Codification
Section was enacted as part of the Omnibus Budget Reconciliation Act of 1990, and not as part of the Social Security Act which comprises this chapter.
Amendments
1998—Subsec. (f).
1994—Subsec. (b)(2)(A)(ii).
Subsec. (b)(2)(D).
Subsec. (b)(2)(I).
Subsec. (c)(1).
Subsec. (d)(3).
Subsec. (e).
Subsec. (e)(1).
Subsec. (f).
Subsec. (f)(2) to (5).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Energy and Commerce of House of Representatives treated as referring to Committee on Commerce of House of Representatives by section 1(a) of
Effective Date of 1994 Amendment
Amendment by
Demonstration To Improve Care to Previously Uninsured
"(a)
"(b)
"(c)
"(d)
"(1) An analysis of the effectiveness of outreach activities targeting beneficiaries who were previously uninsured, such as revising outreach and enrollment materials (including the potential for use of video information), providing one-on-one counseling, working with community health workers, and amending the Medicare and You handbook.
"(2) The effect of such outreach on beneficiary access to care, utilization of services, efficiency and cost-effectiveness of health care delivery, patient satisfaction, and select health outcomes."
State Regulatory Programs
For provisions relating to changes required to conform State regulatory programs to amendments by section 171 of
1 So in original. Probably should be preceded by "to".
2 So in original. Probably should be paragraph "(2)".
§1395b–5. Beneficiary incentive programs
(a) Repealed. Pub. L. 105–33, title IV, §4311(b)(2), Aug. 5, 1997, 111 Stat. 386
(b) Program to collect information on fraud and abuse
(1) Establishment of program
Not later than 3 months after August 21, 1996, the Secretary shall establish a program under which the Secretary shall encourage individuals to report to the Secretary information on individuals and entities who are engaging in or who have engaged in acts or omissions which constitute grounds for the imposition of a sanction under
(2) Payment of portion of amounts collected
If an individual reports information to the Secretary under the program established under paragraph (1) which serves as the basis for the collection by the Secretary or the Attorney General of any amount of at least $100 (other than any amount paid as a penalty under
(c) Program to collect information on program efficiency
(1) Establishment of program
Not later than 3 months after August 21, 1996, the Secretary shall establish a program under which the Secretary shall encourage individuals to submit to the Secretary suggestions on methods to improve the efficiency of the Medicare program.
(2) Payment of portion of program savings
If an individual submits a suggestion to the Secretary under the program established under paragraph (1) which is adopted by the Secretary and which results in savings to the program, the Secretary may make a payment to the individual of such amount as the Secretary considers appropriate.
(
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (b)(2), is classified generally to Title 26, Internal Revenue Code.
Codification
Section was enacted as part of the Health Insurance Portability and Accountability Act of 1996, and not as part of the Social Security Act which comprises this chapter.
Amendments
1997—Subsec. (a).
§1395b–6. Medicare Payment Advisory Commission
(a) Establishment
There is hereby established as an agency of Congress the Medicare Payment Advisory Commission (in this section referred to as the "Commission").
(b) Duties
(1) Review of payment policies and annual reports
The Commission shall—
(A) review payment policies under this subchapter, including the topics described in paragraph (2);
(B) make recommendations to Congress concerning such payment policies;
(C) by not later than March 15,1 submit a report to Congress containing the results of such reviews and its recommendations concerning such policies; and
(D) by not later than June 15 of each year, submit a report to Congress containing an examination of issues affecting the medicare program, including the implications of changes in health care delivery in the United States and in the market for health care services on the medicare program and including a review of the estimate of the conversion factor submitted under
(2) Specific topics to be reviewed
(A) Medicare+Choice program
Specifically, the Commission shall review, with respect to the Medicare+Choice program under part C, the following:
(i) The methodology for making payment to plans under such program, including the making of differential payments and the distribution of differential updates among different payment areas.
(ii) The mechanisms used to adjust payments for risk and the need to adjust such mechanisms to take into account health status of beneficiaries.
(iii) The implications of risk selection both among Medicare+Choice organizations and between the Medicare+Choice option and the original medicare fee-for-service option.
(iv) The development and implementation of mechanisms to assure the quality of care for those enrolled with Medicare+Choice organizations.
(v) The impact of the Medicare+Choice program on access to care for medicare beneficiaries.
(vi) Other major issues in implementation and further development of the Medicare+Choice program.
(B) Original medicare fee-for-service system
Specifically, the Commission shall review payment policies under parts A and B, including—
(i) the factors affecting expenditures for the efficient provision of services in different sectors, including the process for updating hospital, skilled nursing facility, physician, and other fees,
(ii) payment methodologies, and
(iii) their relationship to access and quality of care for medicare beneficiaries.
(C) Interaction of medicare payment policies with health care delivery generally
Specifically, the Commission shall review the effect of payment policies under this subchapter on the delivery of health care services other than under this subchapter and assess the implications of changes in health care delivery in the United States and in the general market for health care services on the medicare program.
(3) Comments on certain secretarial reports
If the Secretary submits to Congress (or a committee of Congress) a report that is required by law and that relates to payment policies under this subchapter, the Secretary shall transmit a copy of the report to the Commission. The Commission shall review the report and, not later than 6 months after the date of submittal of the Secretary's report to Congress, shall submit to the appropriate committees of Congress written comments on such report. Such comments may include such recommendations as the Commission deems appropriate.
(4) Agenda and additional reviews
The Commission shall consult periodically with the chairmen and ranking minority members of the appropriate committees of Congress regarding the Commission's agenda and progress towards achieving the agenda. The Commission may conduct additional reviews, and submit additional reports to the appropriate committees of Congress, from time to time on such topics relating to the program under this subchapter as may be requested by such chairmen and members and as the Commission deems appropriate.
(5) Availability of reports
The Commission shall transmit to the Secretary a copy of each report submitted under this subsection and shall make such reports available to the public.
(6) Appropriate committees of Congress
For purposes of this section, the term "appropriate committees of Congress" means the Committees on Ways and Means and Commerce of the House of Representatives and the Committee on Finance of the Senate.
(7) Voting and reporting requirements
With respect to each recommendation contained in a report submitted under paragraph (1), each member of the Commission shall vote on the recommendation, and the Commission shall include, by member, the results of that vote in the report containing the recommendation.
(8) Examination of budget consequences
Before making any recommendations, the Commission shall examine the budget consequences of such recommendations, directly or through consultation with appropriate expert entities.
(9) Review and annual report on Medicaid and commercial trends
The Commission shall review and report on aggregate trends in spending, utilization, and financial performance under the Medicaid program under subchapter XIX and the private market for health care services with respect to providers for which, on an aggregate national basis, a significant portion of revenue or services is associated with the Medicaid program. Where appropriate, the Commission shall conduct such review in consultation with the Medicaid and CHIP Payment and Access Commission established under
(10) Coordinate and consult with the Federal Coordinated Health Care Office
The Commission shall coordinate and consult with the Federal Coordinated Health Care Office established under section 2081 2 of the Patient Protection and Affordable Care Act before making any recommendations regarding dual eligible individuals.
(11) Interaction of Medicaid and Medicare
The Commission shall consult with MACPAC in carrying out its duties under this section, as appropriate. Responsibility for analysis of and recommendations to change Medicare policy regarding Medicare beneficiaries, including Medicare beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with the Commission. Responsibility for analysis of and recommendations to change Medicaid policy regarding Medicaid beneficiaries, including Medicaid beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with MACPAC.
(c) Membership
(1) Number and appointment
The Commission shall be composed of 17 members appointed by the Comptroller General.
(2) Qualifications
(A) In general
The membership of the Commission shall include individuals with national recognition for their expertise in health finance and economics, actuarial science, health facility management, health plans and integrated delivery systems, reimbursement of health facilities, allopathic and osteopathic physicians, and other providers of health services, and other related fields, who provide a mix of different professionals, broad geographic representation, and a balance between urban and rural representatives.
(B) Inclusion
The membership of the Commission shall include (but not be limited to) physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit programs, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research and expertise in outcomes and effectiveness research and technology assessment. Such membership shall also include representatives of consumers and the elderly.
(C) Majority nonproviders
Individuals who are directly involved in the provision, or management of the delivery, of items and services covered under this subchapter shall not constitute a majority of the membership of the Commission.
(D) Ethical disclosure
The Comptroller General shall establish a system for public disclosure by members of the Commission of financial and other potential conflicts of interest relating to such members. Members of the Commission shall be treated as employees of Congress for purposes of applying subchapter I of
(3) Terms
(A) In general
The terms of members of the Commission shall be for 3 years except that the Comptroller General shall designate staggered terms for the members first appointed.
(B) Vacancies
Any member appointed to fill a vacancy occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member's term until a successor has taken office. A vacancy in the Commission shall be filled in the manner in which the original appointment was made.
(4) Compensation
While serving on the business of the Commission (including traveltime), a member of the Commission shall be entitled to compensation at the per diem equivalent of the rate provided for level IV of the Executive Schedule under
(5) Chairman; Vice Chairman
The Comptroller General shall designate a member of the Commission, at the time of appointment of the member as Chairman and a member as Vice Chairman for that term of appointment, except that in the case of vacancy of the Chairmanship or Vice Chairmanship, the Comptroller General may designate another member for the remainder of that member's term.
(6) Meetings
The Commission shall meet at the call of the Chairman.
(d) Director and staff; experts and consultants
Subject to such review as the Comptroller General deems necessary to assure the efficient administration of the Commission, the Commission may—
(1) employ and fix the compensation of an Executive Director (subject to the approval of the Comptroller General) and such other personnel as may be necessary to carry out its duties (without regard to the provisions of title 5 governing appointments in the competitive service);
(2) seek such assistance and support as may be required in the performance of its duties from appropriate Federal departments and agencies;
(3) enter into contracts or make other arrangements, as may be necessary for the conduct of the work of the Commission (without regard to
(4) make advance, progress, and other payments which relate to the work of the Commission;
(5) provide transportation and subsistence for persons serving without compensation; and
(6) prescribe such rules and regulations as it deems necessary with respect to the internal organization and operation of the Commission.
(e) Powers
(1) Obtaining official data
The Commission may secure directly from any department or agency of the United States information necessary to enable it to carry out this section. Upon request of the Chairman, the head of that department or agency shall furnish that information to the Commission on an agreed upon schedule.
(2) Data collection
In order to carry out its functions, the Commission shall—
(A) utilize existing information, both published and unpublished, where possible, collected and assessed either by its own staff or under other arrangements made in accordance with this section,
(B) carry out, or award grants or contracts for, original research and experimentation, where existing information is inadequate, and
(C) adopt procedures allowing any interested party to submit information for the Commission's use in making reports and recommendations.
(3) Access of GAO to information
The Comptroller General shall have unrestricted access to all deliberations, records, and nonproprietary data of the Commission, immediately upon request.
(4) Periodic audit
The Commission shall be subject to periodic audit by the Comptroller General.
(f) Authorization of appropriations
(1) Request for appropriations
The Commission shall submit requests for appropriations in the same manner as the Comptroller General submits requests for appropriations, but amounts appropriated for the Commission shall be separate from amounts appropriated for the Comptroller General.
(2) Authorization
There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section. Sixty percent of such appropriation shall be payable from the Federal Hospital Insurance Trust Fund, and 40 percent of such appropriation shall be payable from the Federal Supplementary Medical Insurance Trust Fund.
(Aug. 14, 1935, ch. 531, title XVIII, §1805, as added
Editorial Notes
References in Text
The Patient Protection and Affordable Care Act, referred to in subsec. (b)(10), is
Codification
In subsec. (d)(3), "
Amendments
2022—Subsec. (c)(2)(D).
2018—Subsec. (b)(4) to (9).
2010—Subsec. (b)(1)(C).
Subsec. (b)(1)(D).
Subsec. (b)(4).
Subsec. (b)(5) to (8).
Subsec. (b)(9).
Subsec. (b)(10), (11).
2007—Subsec. (a).
2003—Subsec. (b)(2)(B)(i).
Subsec. (b)(8).
Subsec. (c)(2)(B).
Subsec. (c)(2)(D).
2000—Subsec. (b)(1)(D).
Subsec. (b)(7).
1999—Subsec. (b)(1)(D).
1998—Subsec. (c)(1).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2003 Amendment
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Amendment by
Effective Date; Transition; Transfer of Functions
"(1)
"(2)
"(3)
MedPAC Review of Payments to Rural Emergency Hospitals
Appointment of Experts in Prescription Drugs
MedPAC Analysis of Impact of Volume on Per Unit Cost of Rural Hospitals With Psychiatric Units
"(1) in such study an analysis of the impact of volume on the per unit cost of rural hospitals with psychiatric units; and
"(2) in its report under subsection (b) of such section a recommendation on whether special treatment for such hospitals may be warranted."
MedPAC Study on Complexity of Medicare Program and Levels of Burdens Placed on Providers Through Federal Regulations
MedPAC Report
MedPAC Study of Rural Providers
Quality Improvement Standards
"(1)
"(A) each type of Medicare+Choice plan described in section 1851(a)(2) of the Social Security Act (
"(B) the original medicare fee-for-service program under parts A and B [sic] title XVIII of such Act (
"(2)
"(3)
Initial Terms of Additional Members
"(1)
"(A) One member shall be appointed for one year.
"(B) One member shall be appointed for two years.
"(2)
Information Included in Annual Recommendations
2 See References in Text note below.
§1395b–7. Explanation of medicare benefits
(a) In general
The Secretary shall furnish to each individual for whom payment has been made under this subchapter (or would be made without regard to any deductible) a statement which—
(1) lists the item or service for which payment has been made and the amount of such payment for each item or service; and
(2) includes a notice of the individual's right to request an itemized statement (as provided in subsection (b)).
(b) Request for itemized statement for medicare items and services
(1) In general
An individual may submit a written request to any physician, provider, supplier, or any other person (including an organization, agency, or other entity) for an itemized statement for any item or service provided to such individual by such person with respect to which payment has been made under this subchapter.
(2) 30-day period to furnish statement
(A) In general
Not later than 30 days after the date on which a request under paragraph (1) has been made, a person described in such paragraph shall furnish an itemized statement describing each item or service provided to the individual requesting the itemized statement.
(B) Penalty
Whoever knowingly fails to furnish an itemized statement in accordance with subparagraph (A) shall be subject to a civil money penalty of not more than $100 for each such failure. Such penalty shall be imposed and collected in the same manner as civil money penalties under subsection (a) of
(3) Review of itemized statement
(A) In general
Not later than 90 days after the receipt of an itemized statement furnished under paragraph (1), an individual may submit a written request for a review of the itemized statement to the Secretary.
(B) Specific allegations
A request for a review of the itemized statement shall identify—
(i) specific items or services that the individual believes were not provided as claimed, or
(ii) any other billing irregularity (including duplicate billing).
(4) Findings of Secretary
The Secretary shall, with respect to each written request submitted under paragraph (3), determine whether the itemized statement identifies specific items or services that were not provided as claimed or any other billing irregularity (including duplicate billing) that has resulted in unnecessary payments under this subchapter.
(5) Recovery of amounts
The Secretary shall take all appropriate measures to recover amounts unnecessarily paid under this subchapter with respect to a statement described in paragraph (4).
(c) Format of statements from Secretary
(1) Electronic option beginning in 2016
Subject to paragraph (2), for statements described in subsection (a) that are furnished for a period in 2016 or a subsequent year, in the case that an individual described in subsection (a) elects, in accordance with such form, manner, and time specified by the Secretary, to receive such statement in an electronic format, such statement shall be furnished to such individual for each period subsequent to such election in such a format and shall not be mailed to the individual.
(2) Limitation on revocation option
(A) In general
Subject to subparagraph (B), the Secretary may determine a maximum number of elections described in paragraph (1) by an individual that may be revoked by the individual.
(B) Minimum of one revocation option
In no case may the Secretary determine a maximum number under subparagraph (A) that is less than one.
(3) Notification
The Secretary shall ensure that, in the most cost effective manner and beginning January 1, 2017, a clear notification of the option to elect to receive statements described in subsection (a) in an electronic format is made available, such as through the notices distributed under
(Aug. 14, 1935, ch. 531, title XVIII, §1806, as added
Editorial Notes
Amendments
2015—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date
"(A)
"(B)
Encouraged Expansion of Electronic Statements
"(1) apply an option similar to the option described in subsection (c)(1) of section 1806 of the Social Security Act (
"(2) provide such Medicare Summary Notice and any such other statements and notifications on a more frequent basis than is otherwise required under such title."
Inclusion of Additional Information in Notices to Beneficiaries About Skilled Nursing Facility Benefits
"(a)
"(b)
§1395b–8. Chronic care improvement
(a) Implementation of chronic care improvement programs
(1) In general
The Secretary shall provide for the phased-in development, testing, evaluation, and implementation of chronic care improvement programs in accordance with this section. Each such program shall be designed to improve clinical quality and beneficiary satisfaction and achieve spending targets with respect to expenditures under this subchapter for targeted beneficiaries with one or more threshold conditions.
(2) Definitions
For purposes of this section:
(A) Chronic care improvement program
The term "chronic care improvement program" means a program described in paragraph (1) that is offered under an agreement under subsection (b) or (c).
(B) Chronic care improvement organization
The term "chronic care improvement organization" means an entity that has entered into an agreement under subsection (b) or (c) to provide, directly or through contracts with subcontractors, a chronic care improvement program under this section. Such an entity may be a disease management organization, health insurer, integrated delivery system, physician group practice, a consortium of such entities, or any other legal entity that the Secretary determines appropriate to carry out a chronic care improvement program under this section.
(C) Care management plan
The term "care management plan" means a plan established under subsection (d) for a participant in a chronic care improvement program.
(D) Threshold condition
The term "threshold condition" means a chronic condition, such as congestive heart failure, diabetes, chronic obstructive pulmonary disease (COPD), or other diseases or conditions, as selected by the Secretary as appropriate for the establishment of a chronic care improvement program.
(E) Targeted beneficiary
The term "targeted beneficiary" means, with respect to a chronic care improvement program, an individual who—
(i) is entitled to benefits under part A and enrolled under part B, but not enrolled in a plan under part C;
(ii) has one or more threshold conditions covered under such program; and
(iii) has been identified under subsection (d)(1) as a potential participant in such program.
(3) Construction
Nothing in this section shall be construed as—
(A) expanding the amount, duration, or scope of benefits under this subchapter;
(B) providing an entitlement to participate in a chronic care improvement program under this section;
(C) providing for any hearing or appeal rights under
(D) providing benefits under a chronic care improvement program for which a claim may be submitted to the Secretary by any provider of services or supplier (as defined in
(b) Developmental phase (Phase I)
(1) In general
In carrying out this section, the Secretary shall enter into agreements consistent with subsection (f) with chronic care improvement organizations for the development, testing, and evaluation of chronic care improvement programs using randomized controlled trials. The first such agreement shall be entered into not later than 12 months after December 8, 2003.
(2) Agreement period
The period of an agreement under this subsection shall be for 3 years.
(3) Minimum participation
(A) In general
The Secretary shall enter into agreements under this subsection in a manner so that chronic care improvement programs offered under this section are offered in geographic areas that, in the aggregate, consist of areas in which at least 10 percent of the aggregate number of medicare beneficiaries reside.
(B) Medicare beneficiary defined
In this paragraph, the term "medicare beneficiary" means an individual who is entitled to benefits under part A, enrolled under part B, or both, and who resides in the United States.
(4) Site selection
In selecting geographic areas in which agreements are entered into under this subsection, the Secretary shall ensure that each chronic care improvement program is conducted in a geographic area in which at least 10,000 targeted beneficiaries reside among other individuals entitled to benefits under part A, enrolled under part B, or both to serve as a control population.
(5) Independent evaluations of Phase I programs
The Secretary shall contract for an independent evaluation of the programs conducted under this subsection. Such evaluation shall be done by a contractor with knowledge of chronic care management programs and demonstrated experience in the evaluation of such programs. Each evaluation shall include an assessment of the following factors of the programs:
(A) Quality improvement measures, such as adherence to evidence-based guidelines and rehospitalization rates.
(B) Beneficiary and provider satisfaction.
(C) Health outcomes.
(D) Financial outcomes, including any cost savings to the program under this subchapter.
(c) Expanded implementation phase (Phase II)
(1) In general
With respect to chronic care improvement programs conducted under subsection (b), if the Secretary finds that the results of the independent evaluation conducted under subsection (b)(6) indicate that the conditions specified in paragraph (2) have been met by a program (or components of such program), the Secretary shall enter into agreements consistent with subsection (f) to expand the implementation of the program (or components) to additional geographic areas not covered under the program as conducted under subsection (b), which may include the implementation of the program on a national basis. Such expansion shall begin not earlier than 2 years after the program is implemented under subsection (b) and not later than 6 months after the date of completion of such program.
(2) Conditions for expansion of programs
The conditions specified in this paragraph are, with respect to a chronic care improvement program conducted under subsection (b) for a threshold condition, that the program is expected to—
(A) improve the clinical quality of care;
(B) improve beneficiary satisfaction; and
(C) achieve targets for savings to the program under this subchapter specified by the Secretary in the agreement within a range determined to be appropriate by the Secretary, subject to the application of budget neutrality with respect to the program and not taking into account any payments by the organization under the agreement under the program for risk under subsection (f)(3)(B).
(3) Independent evaluations of Phase II programs
The Secretary shall carry out evaluations of programs expanded under this subsection as the Secretary determines appropriate. Such evaluations shall be carried out in the similar manner as is provided under subsection (b)(5).
(d) Identification and enrollment of prospective program participants
(1) Identification of prospective program participants
The Secretary shall establish a method for identifying targeted beneficiaries who may benefit from participation in a chronic care improvement program.
(2) Initial contact by Secretary
The Secretary shall communicate with each targeted beneficiary concerning participation in a chronic care improvement program. Such communication may be made by the Secretary and shall include information on the following:
(A) A description of the advantages to the beneficiary in participating in a program.
(B) Notification that the organization offering a program may contact the beneficiary directly concerning such participation.
(C) Notification that participation in a program is voluntary.
(D) A description of the method for the beneficiary to participate or for declining to participate and the method for obtaining additional information concerning such participation.
(3) Voluntary participation
A targeted beneficiary may participate in a chronic care improvement program on a voluntary basis and may terminate participation at any time.
(e) Chronic care improvement programs
(1) In general
Each chronic care improvement program shall—
(A) have a process to screen each targeted beneficiary for conditions other than threshold conditions, such as impaired cognitive ability and co-morbidities, for the purposes of developing an individualized, goal-oriented care management plan under paragraph (2);
(B) provide each targeted beneficiary participating in the program with such plan; and
(C) carry out such plan and other chronic care improvement activities in accordance with paragraph (3).
(2) Elements of care management plans
A care management plan for a targeted beneficiary shall be developed with the beneficiary and shall, to the extent appropriate, include the following:
(A) A designated point of contact responsible for communications with the beneficiary and for facilitating communications with other health care providers under the plan.
(B) Self-care education for the beneficiary (through approaches such as disease management or medical nutrition therapy) and education for primary caregivers and family members.
(C) Education for physicians and other providers and collaboration to enhance communication of relevant clinical information.
(D) The use of monitoring technologies that enable patient guidance through the exchange of pertinent clinical information, such as vital signs, symptomatic information, and health self-assessment.
(E) The provision of information about hospice care, pain and palliative care, and end-of-life care.
(3) Conduct of programs
In carrying out paragraph (1)(C) with respect to a participant, the chronic care improvement organization shall—
(A) guide the participant in managing the participant's health (including all co-morbidities, relevant health care services, and pharmaceutical needs) and in performing activities as specified under the elements of the care management plan of the participant;
(B) use decision-support tools such as evidence-based practice guidelines or other criteria as determined by the Secretary; and
(C) develop a clinical information database to track and monitor each participant across settings and to evaluate outcomes.
(4) Additional responsibilities
(A) Outcomes report
Each chronic care improvement organization offering a chronic care improvement program shall monitor and report to the Secretary, in a manner specified by the Secretary, on health care quality, cost, and outcomes.
(B) Additional requirements
Each such organization and program shall comply with such additional requirements as the Secretary may specify.
(5) Accreditation
The Secretary may provide that chronic care improvement programs and chronic care improvement organizations that are accredited by qualified organizations (as defined by the Secretary) may be deemed to meet such requirements under this section as the Secretary may specify.
(f) Terms of agreements
(1) Terms and conditions
(A) In general
An agreement under this section with a chronic care improvement organization shall contain such terms and conditions as the Secretary may specify consistent with this section.
(B) Clinical, quality improvement, and financial requirements
The Secretary may not enter into an agreement with such an organization under this section for the operation of a chronic care improvement program unless—
(i) the program and organization meet the requirements of subsection (e) and such clinical, quality improvement, financial, and other requirements as the Secretary deems to be appropriate for the targeted beneficiaries to be served; and
(ii) the organization demonstrates to the satisfaction of the Secretary that the organization is able to assume financial risk for performance under the agreement (as applied under paragraph (3)(B)) with respect to payments made to the organization under such agreement through available reserves, reinsurance, withholds, or such other means as the Secretary determines appropriate.
(2) Manner of payment
Subject to paragraph (3)(B), the payment under an agreement under—
(A) subsection (b) shall be computed on a per-member per-month basis; or
(B) subsection (c) may be on a per-member per-month basis or such other basis as the Secretary and organization may agree.
(3) Application of performance standards
(A) Specification of performance standards
Each agreement under this section with a chronic care improvement organization shall specify performance standards for each of the factors specified in subsection (c)(2), including clinical quality and spending targets under this subchapter, against which the performance of the chronic care improvement organization under the agreement is measured.
(B) Adjustment of payment based on performance
(i) In general
Each such agreement shall provide for adjustments in payment rates to an organization under the agreement insofar as the Secretary determines that the organization failed to meet the performance standards specified in the agreement under subparagraph (A).
(ii) Financial risk for performance
In the case of an agreement under subsection (b) or (c), the agreement shall provide for a full recovery for any amount by which the fees paid to the organization under the agreement exceed the estimated savings to the programs under this subchapter attributable to implementation of such agreement.
(4) Budget neutral payment condition
Under this section, the Secretary shall ensure that the aggregate sum of medicare program benefit expenditures for beneficiaries participating in chronic care improvement programs and funds paid to chronic care improvement organizations under this section, shall not exceed the medicare program benefit expenditures that the Secretary estimates would have been made for such targeted beneficiaries in the absence of such programs.
(g) Funding
(1) Subject to paragraph (2), there are appropriated to the Secretary, in appropriate part from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund, such sums as may be necessary to provide for agreements with chronic care improvement programs under this section.
(2) In no case shall the funding under this section exceed $100,000,000 in aggregate increased expenditures under this subchapter (after taking into account any savings attributable to the operation of this section) over the 3-fiscal-year period beginning on October 1, 2003.
(Aug. 14, 1935, ch. 531, title XVIII, §1807, as added
Editorial Notes
References in Text
Parts A, B, and C, referred to in subsecs. (a)(2)(E)(i) and (b)(3)(B), (4), are classified to sections 1395c et seq., 1395j et seq., and 1395w–21 et seq., respectively, of this title.
Statutory Notes and Related Subsidiaries
Demonstration Project for Consumer-Directed Chronic Outpatient Services
"(a)
"(1)
"(2)
"(b)
"(1)
"(A)
"(B)
"(2)
"(c)
"(d)
"(e)
"(1)
"(2)
"(A) An analysis of the patient outcomes and costs of furnishing care to the individuals with chronic conditions participating in the projects as compared to such outcomes and costs to other individuals for the same health conditions.
"(B) Evaluation of patient satisfaction under the demonstration projects.
"(C) Such recommendations regarding the extension, expansion, or termination of the projects as the Secretary determines appropriate.
"(f)
"(g)
"(2) There are authorized to be appropriated from such Trust Fund such sums as may be necessary for the Secretary to enter into contracts with appropriate organizations for the deign [sic], implementation, and evaluation of the demonstration project.
"(3) In no case may expenditures under this section exceed the aggregate expenditures that would otherwise have been made for the provision of personal care services."
Reports
"(1) Not later than 2 years after the date of the implementation of such section, the Secretary shall submit to Congress an interim report on the scope of implementation of the programs under subsection (b) of such section, the design of the programs, and preliminary cost and quality findings with respect to those programs based on the following measures of the programs:
"(A) Quality improvement measures, such as adherence to evidence-based guidelines and rehospitalization rates.
"(B) Beneficiary and provider satisfaction.
"(C) Health outcomes.
"(D) Financial outcomes.
"(2) Not later than 3 years and 6 months after the date of the implementation of such section the Secretary shall submit to Congress an update to the report required under paragraph (1) on the results of such programs.
"(3) The Secretary shall submit to Congress 2 additional biennial reports on the chronic care improvement programs conducted under such section. The first such report shall be submitted not later than 2 years after the report is submitted under paragraph (2). Each such report shall include information on—
"(A) the scope of implementation (in terms of both regions and chronic conditions) of the chronic care improvement programs;
"(B) the design of the programs; and
"(C) the improvements in health outcomes and financial efficiencies that result from such implementation."
Chronically Ill Medicare Beneficiary Research, Data, Demonstration Strategy
"(a)
"(b)
"(1) integrate existing data sets including, the Medicare Current Beneficiary Survey (MCBS), Minimum Data Set (MDS), Outcome and Assessment Information Set (OASIS), data from Quality Improvement Organizations (QIO), and claims data;
"(2) identify any new data needs and a methodology to address new data needs;
"(3) plan for the collection of such data in a data warehouse; and
"(4) develop a research agenda using such data.
"(c)
"(d)
"(e)
§1395b–9. Provisions relating to administration
(a) Coordinated administration of medicare prescription drug and Medicare Advantage programs
(1) In general
There is within the Centers for Medicare & Medicaid Services a center to carry out the duties described in paragraph (3).
(2) Director
Such center shall be headed by a director who shall report directly to the Administrator of the Centers for Medicare & Medicaid Services.
(3) Duties
The duties described in this paragraph are the following:
(A) The administration of parts C and D.
(B) The provision of notice and information under
(C) Such other duties as the Secretary may specify.
(4) Deadline
The Secretary shall ensure that the center is carrying out the duties described in paragraph (3) by not later than January 1, 2008.
(b) Employment of management staff
(1) In general
The Secretary may employ, within the Centers for Medicare & Medicaid Services, such individuals as management staff as the Secretary determines to be appropriate. With respect to the administration of parts C and D, such individuals shall include individuals with private sector expertise in negotiations with health benefits plans.
(2) Eligibility
To be eligible for employment under paragraph (1) an individual shall be required to have demonstrated, by their education and experience (either in the public or private sector), superior expertise in at least one of the following areas:
(A) The review, negotiation, and administration of health care contracts.
(B) The design of health care benefit plans.
(C) Actuarial sciences.
(D) Compliance with health plan contracts.
(E) Consumer education and decision making.
(F) Any other area specified by the Secretary that requires specialized management or other expertise.
(3) Rates of payment
(A) Performance-related pay
Subject to subparagraph (B), the Secretary shall establish the rate of pay for an individual employed under paragraph (1). Such rate shall take into account expertise, experience, and performance.
(B) Limitation
In no case may the rate of compensation determined under subparagraph (A) exceed the highest rate of basic pay for the Senior Executive Service under
(c) Medicare Beneficiary Ombudsman
(1) In general
The Secretary shall appoint within the Department of Health and Human Services a Medicare Beneficiary Ombudsman who shall have expertise and experience in the fields of health care and education of (and assistance to) individuals entitled to benefits under this subchapter.
(2) Duties
The Medicare Beneficiary Ombudsman shall—
(A) receive complaints, grievances, and requests for information submitted by individuals entitled to benefits under part A or enrolled under part B, or both, with respect to any aspect of the medicare program;
(B) provide assistance with respect to complaints, grievances, and requests referred to in subparagraph (A), including—
(i) assistance in collecting relevant information for such individuals, to seek an appeal of a decision or determination made by a fiscal intermediary, carrier, MA organization, or the Secretary;
(ii) assistance to such individuals with any problems arising from disenrollment from an MA plan under part C; and
(iii) assistance to such individuals in presenting information under
(C) submit annual reports to Congress and the Secretary that describe the activities of the Office and that include such recommendations for improvement in the administration of this subchapter as the Ombudsman determines appropriate.
The Ombudsman shall not serve as an advocate for any increases in payments or new coverage of services, but may identify issues and problems in payment or coverage policies.
(3) Working with health insurance counseling programs
To the extent possible, the Ombudsman shall work with health insurance counseling programs (receiving funding under
(d) Pharmaceutical and technology ombudsman
(1) In general
Not later than 12 months after December 13, 2016, the Secretary shall provide for a pharmaceutical and technology ombudsman within the Centers for Medicare & Medicaid Services who shall receive and respond to complaints, grievances, and requests that—
(A) are from entities that manufacture pharmaceutical, biotechnology, medical device, or diagnostic products that are covered or for which coverage is being sought under this subchapter; and
(B) are with respect to coverage, coding, or payment under this subchapter for such products.
(2) Application
The second sentence of subsection (c)(2) shall apply to the ombudsman under subparagraph (A) in the same manner as such sentence applies to the Medicare Beneficiary Ombudsman under subsection (c).
(e) Funding for implementation of beneficiary enrollment simplification
For purposes of carrying out the provisions of and the amendments made by section 120 of division CC of the Consolidated Appropriations Act, 2021, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under
(Aug. 14, 1935, ch. 531, title XVIII, §1808, as added and amended
Editorial Notes
References in Text
Section 120 of division CC of the Consolidated Appropriations Act, 2021, referred to in subsec. (e), is section 120 of div. CC of
Amendments
2020—Subsec. (e).
2016—Subsec. (d).
2003—Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Deadline for Appointment
1 So in original. A closing parenthesis probably should precede the semicolon.
§1395b–10. Addressing health care disparities
(a) Evaluating data collection approaches
The Secretary shall evaluate approaches for the collection of data under this subchapter, to be performed in conjunction with existing quality reporting requirements and programs under this subchapter, that allow for the ongoing, accurate, and timely collection and evaluation of data on disparities in health care services and performance on the basis of race, ethnicity, and gender. In conducting such evaluation, the Secretary shall consider the following objectives:
(1) Protecting patient privacy.
(2) Minimizing the administrative burdens of data collection and reporting on providers and health plans participating under this subchapter.
(3) Improving Medicare program data on race, ethnicity, and gender.
(b) Reports to Congress
(1) Report on evaluation
Not later than 18 months after July 15, 2008, the Secretary shall submit to Congress a report on the evaluation conducted under subsection (a). Such report shall, taking into consideration the results of such evaluation—
(A) identify approaches (including defining methodologies) for identifying and collecting and evaluating data on health care disparities on the basis of race, ethnicity, and gender for the original Medicare fee-for-service program under parts A and B, the Medicare Advantage program under part C, and the Medicare prescription drug program under part D; and
(B) include recommendations on the most effective strategies and approaches to reporting HEDIS quality measures as required under
(2) Reports on data analyses
Not later than 4 years after July 15, 2008, and 4 years thereafter, the Secretary shall submit to Congress a report that includes recommendations for improving the identification of health care disparities for Medicare beneficiaries based on analyses of the data collected under subsection (c).
(c) Implementing effective approaches
Not later than 24 months after July 15, 2008, the Secretary shall implement the approaches identified in the report submitted under subsection (b)(1) for the ongoing, accurate, and timely collection and evaluation of data on health care disparities on the basis of race, ethnicity, and gender.
(Aug. 14, 1935, ch. 531, title XVIII, §1809, as added
Part A—Hospital Insurance Benefits for Aged and Disabled
§1395c. Description of program
The insurance program for which entitlement is established by
(Aug. 14, 1935, ch. 531, title XVIII, §1811, as added
Editorial Notes
Amendments
1989—
1988—
1986—
1982—
1980—
1978—
1972—
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by section 278(b)(3) of
Effective Date of 1980 Amendment
Amendment by
Amendment by
Amendment by
Effective Date of 1978 Amendment
Amendment by
Developing Guidance on Pain Management and Opioid Use Disorder Prevention for Hospitals Receiving Payment Under Part A of the Medicare Program
"(a)
"(b)
"(1) medical professional organizations;
"(2) providers and suppliers of services (as such terms are defined in section 1861 of the Social Security Act (
"(3) health care consumers or groups representing such consumers; and
"(4) other entities determined appropriate by the Secretary.
"(c)
"(1) Best practices regarding evidence-based screening and practitioner education initiatives relating to screening and treatment protocols for opioid use disorder, including—
"(A) methods to identify such individuals at-risk of opioid use disorder, including risk stratification;
"(B) ways to prevent, recognize, and treat opioid overdoses; and
"(C) resources available to such individuals, such as opioid treatment programs, peer support groups, and other recovery programs.
"(2) Best practices for such hospitals to educate practitioners furnishing items and services at such hospital with respect to pain management and substance use disorders, including education on—
"(A) the adverse effects of prolonged opioid use;
"(B) non-opioid, evidence-based, non-pharmacological pain management treatments;
"(C) monitoring programs for individuals who have been prescribed opioids; and
"(D) the prescribing of naloxone along with an initial opioid prescription.
"(3) Best practices for such hospitals to make such individuals aware of the risks associated with opioid use (which may include use of the notification template described in paragraph (4)).
"(4) A notification template developed by the Secretary, for use as appropriate, for such individuals who are prescribed an opioid that—
"(A) explains the risks and side effects associated with opioid use (including the risks of addiction and overdose) and the importance of adhering to the prescribed treatment regimen, avoiding medications that may have an adverse interaction with such opioid, and storing such opioid safely and securely;
"(B) highlights multimodal and evidence-based non-opioid alternatives for pain management;
"(C) encourages such individuals to talk to their health care providers about such alternatives;
"(D) provides for a method (through signature or otherwise) for such an individual, or person acting on such individual's behalf, to acknowledge receipt of such notification template;
"(E) is worded in an easily understandable manner and made available in multiple languages determined appropriate by the Secretary; and
"(F) includes any other information determined appropriate by the Secretary.
"(5) Best practices for such hospital to track opioid prescribing trends by practitioners furnishing items and services at such hospital, including—
"(A) ways for such hospital to establish target levels, taking into account the specialties of such practitioners and the geographic area in which such hospital is located, with respect to opioids prescribed by such practitioners;
"(B) guidance on checking the medical records of such individuals against information included in prescription drug monitoring programs;
"(C) strategies to reduce long-term opioid prescriptions; and
"(D) methods to identify such practitioners who may be over-prescribing opioids.
"(6) Other information the Secretary determines appropriate, including any such information from the Opioid Safety Initiative established by the Department of Veterans Affairs or the Opioid Overdose Prevention Toolkit published by the Substance Abuse and Mental Health Services Administration."
Advisory Council To Study Coverage of Disabled Under This Subchapter
Reimbursement of Charges Under Part A for Services to Patients Admitted Prior to 1968 to Certain Hospitals
"(a) Notwithstanding any provision of title XVIII of the Social Security Act [
"(1) the hospital did not have an agreement in effect under section 1866 of such Act [
"(2) the hospital (A) meets the requirements of paragraphs (5) and (7) of section 1861(e) of such Act [
"(3) the hospital did not meet the requirements that must be met to permit payment to the hospital under part A of title XVIII of such Act [
"(4) an application is filed (submitted in such form and manner and by such person, and containing and supported by such information, as the Secretary shall by regulations prescribe) for reimbursement before January 1, 1969.
"(b) Payments under this section may not be made for inpatient hospital services (as described in subsection (a)) furnished to an individual—
"(1) prior to July 1, 1966,
"(2) after December 31, 1967, unless furnished with respect to an admission to the hospital prior to January 1, 1968, and
"(3) for more than—
"(A) 90 days in any spell of illness, but only if (i) prior to January 1, 1969, the hospital furnishing such services entered into an agreement under section 1866 of the Social Security Act [
"(B) 20 days in any spell of illness, if the hospital did not meet the conditions of clauses (i) and (ii) of subparagraph (A).
"(c)(1) The amounts payable in accordance with subsection (a) with respect to inpatient hospital services shall, subject to paragraph (2) of this subsection, be paid from the Federal Hospital Insurance Trust Fund in amounts equal to 60 percent of the hospital's reasonable charges for routine services furnished in the accommodations occupied by the individual or in semi-private accommodations (as defined in section 1861(v)(4) of the Social Security Act [
"(2) Before applying paragraph (1), payments made under this section shall be reduced to the extent provided for under section 1813 of the Social Security Act [
"(d) For the purposes of this section—
"(1) the 90-day period, referred to in subsection (b)(3)(A), shall be reduced by the number of days of inpatient hospital services furnished to such individual during the spell of illness, referred to therein, and with respect to which he was entitled to have payment made under part A of title XVIII of the Social Security Act [
"(2) the 20-day period, referred to in subsection (b)(3)(B) shall be reduced by the number of days in excess of 70 days of inpatient hospital services furnished during the spell of illness, referred to therein, and with respect to which such individual was entitled to have payment made under such part A [
"(3) the term 'spell of illness' shall have the meaning assigned to it by subsection (a) of section 1861 of such Act [
§1395d. Scope of benefits
(a) Entitlement to payment for inpatient hospital services, post-hospital extended care services, home health services, and hospice care
The benefits provided to an individual by the insurance program under this part shall consist of entitlement to have payment made on his behalf or, in the case of payments referred to in
(1) inpatient hospital services or inpatient critical access hospital services for up to 150 days during any spell of illness minus 1 day for each day of such services in excess of 90 received during any preceding spell of illness (if such individual was entitled to have payment for such services made under this part unless he specifies in accordance with regulations of the Secretary that he does not desire to have such payment made);
(2)(A) post-hospital extended care services for up to 100 days during any spell of illness, and (B) to the extent provided in subsection (f), extended care services that are not post-hospital extended care services;
(3) in the case of individuals not enrolled in part B, home health services, and in the case of individuals so enrolled, post-institutional home health services furnished during a home health spell of illness for up to 100 visits during such spell of illness;
(4) in lieu of certain other benefits, hospice care with respect to the individual during up to two periods of 90 days each and an unlimited number of subsequent periods of 60 days each with respect to which the individual makes an election under subsection (d)(1); and
(5) for individuals who are terminally ill, have not made an election under subsection (d)(1), and have not previously received services under this paragraph, services that are furnished by a physician (as defined in
(A) consist of—
(i) an evaluation of the individual's need for pain and symptom management, including the individual's need for hospice care; and
(ii) counseling the individual with respect to hospice care and other care options; and
(B) may include advising the individual regarding advanced care planning.
(b) Services not covered
Payment under this part for services furnished an individual during a spell of illness may not (subject to subsection (c)) be made for—
(1) inpatient hospital services furnished to him during such spell after such services have been furnished to him for 150 days during such spell minus 1 day for each day of inpatient hospital services in excess of 90 received during any preceding spell of illness (if such individual was entitled to have payment for such services made under this part unless he specifies in accordance with regulations of the Secretary that he does not desire to have such payment made);
(2) post-hospital extended care services furnished to him during such spell after such services have been furnished to him for 100 days during such spell; or
(3) inpatient psychiatric hospital services furnished to him after such services have been furnished to him for a total of 190 days during his lifetime.
Payment under this part for post-institutional home health services furnished an individual during a home health spell of illness may not be made for such services beginning after such services have been furnished for a total of 100 visits during such spell.
(c) Inpatients of psychiatric hospitals
If an individual is an inpatient of a psychiatric hospital on the first day of the first month for which he is entitled to benefits under this part, the days on which he was an inpatient of such a hospital in the 150-day period immediately before such first day shall be included in determining the number of days limit under subsection (b)(1) insofar as such limit applies to (1) inpatient psychiatric hospital services, or (2) inpatient hospital services for an individual who is an inpatient primarily for the diagnosis or treatment of mental illness (but shall not be included in determining such number of days limit insofar as it applies to other inpatient hospital services or in determining the 190-day limit under subsection (b)(3)).
(d) Hospice care; election; waiver of rights; revocation; change of election
(1) Payment under this part may be made for hospice care provided with respect to an individual only during two periods of 90 days each and an unlimited number of subsequent periods of 60 days each during the individual's lifetime and only, with respect to each such period, if the individual makes an election under this paragraph to receive hospice care under this part provided by, or under arrangements made by, a particular hospice program instead of certain other benefits under this subchapter.
(2)(A) Except as provided in subparagraphs (B) and (C) and except in such exceptional and unusual circumstances as the Secretary may provide, if an individual makes such an election for a period with respect to a particular hospice program, the individual shall be deemed to have waived all rights to have payment made under this subchapter with respect to—
(i) hospice care provided by another hospice program (other than under arrangements made by the particular hospice program) during the period, and
(ii) services furnished during the period that are determined (in accordance with guidelines of the Secretary) to be—
(I) related to the treatment of the individual's condition with respect to which a diagnosis of terminal illness has been made or
(II) equivalent to (or duplicative of) hospice care;
except that clause (ii) shall not apply to physicians' services furnished by the individual's attending physician (if not an employee of the hospice program) or to services provided by (or under arrangements made by) the hospice program.
(B) After an individual makes such an election with respect to a 90-day period or a subsequent 60-day period, the individual may revoke the election during the period, in which case—
(i) the revocation shall act as a waiver of the right to have payment made under this part for any hospice care benefits for the remaining time in such period and (for purposes of subsection (a)(4) and subparagraph (A)) the individual shall be deemed to have been provided such benefits during such entire period, and
(ii) the individual may at any time after the revocation execute a new election for a subsequent period, if the individual otherwise is entitled to hospice care benefits with respect to such a period.
(C) An individual may, once in each such period, change the hospice program with respect to which the election is made and such change shall not be considered a revocation of an election under subparagraph (B).
(D) For purposes of this subchapter, an individual's election with respect to a hospice program shall no longer be considered to be in effect with respect to that hospice program after the date the individual's revocation or change of election with respect to that election takes effect.
(e) Services taken into account
For purposes of subsections (b) and (c), inpatient hospital services, inpatient psychiatric hospital services, and post-hospital extended care services shall be taken into account only if payment is or would be, except for this section or the failure to comply with the request and certification requirements of or under
(f) Coverage of extended care services without regard to three-day prior hospitalization requirement
(1) The Secretary shall provide for coverage, under clause (B) of subsection (a)(2), of extended care services which are not post-hospital extended care services at such time and for so long as the Secretary determines, and under such terms and conditions (described in paragraph (2)) as the Secretary finds appropriate, that the inclusion of such services will not result in any increase in the total of payments made under this subchapter and will not alter the acute care nature of the benefit described in subsection (a)(2).
(2) The Secretary may provide—
(A) for such limitations on the scope and extent of services described in subsection (a)(2)(B) and on the categories of individuals who may be eligible to receive such services, and
(B) notwithstanding
as may be necessary to carry out paragraph (1).
(g) "Spell of illness" defined
For definitions of "spell of illness", and for definitions of other terms used in this part, see
(Aug. 14, 1935, ch. 531, title XVIII, §1812, as added
Editorial Notes
Amendments
2003—Subsec. (a)(3).
Subsec. (a)(5).
1999—Subsec. (b).
1997—Subsec. (a)(1).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (b).
Subsec. (d)(1).
Subsec. (d)(2)(B).
1994—Subsec. (a)(1).
1990—Subsec. (a)(4).
Subsec. (d)(1).
Subsec. (d)(2)(B).
1989—Subsec. (a).
Subsec. (a)(1).
Subsecs. (b) to (d)(1), (2)(B), (e) to (g).
1988—Subsec. (a).
"(1) inpatient hospital services;
"(2) extended care services for up to 150 days during any calendar year;
"(3) home health services; and
"(4) in lieu of certain other benefits, hospice care with respect to the individual during up to two periods of 90 days each, a subsequent period of 30 days, and a subsequent extension period with respect to which the individual makes an election under subsection (d)(1) of this section."
Subsec. (b).
Subsec. (c).
Subsec. (d)(1).
Subsec. (d)(2)(B).
Subsec. (e).
Subsec. (f).
Subsec. (g).
1983—Subsec. (d)(2)(A).
1982—Subsec. (a)(2).
Subsec. (a)(4).
Subsec. (d).
Subsecs. (f), (g).
1981—Subsec. (a).
1980—Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (d).
Subsec. (e).
1968—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(4).
Subsec. (b)(1).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Effective Date of 1999 Amendment
Effective Date of 1997 Amendment
Amendment by section 4201(c)(1) of
Effective Date of 1994 Amendment
Effective Date of 1990 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
"(1)
"(A) to the inpatient hospital deductible for 1989 and succeeding years,
"(B) to care and services furnished on or after January 1, 1989,
"(C) to premiums for January 1989 and succeeding months, and
"(D) to blood or blood cells furnished on or after January 1, 1989.
"(2)
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by section 122(b) of
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Amendment by section 930(b)–(d) of
Effective Date of 1968 Amendment
Medicare Hospice Concurrent Care Demonstration Program
"(a)
"(1)
"(2)
"(3)
"(b)
"(1)
"(2)
"(c)
Protecting Home Health Benefits
Rural Hospice Demonstration Project
"(a)
"(b)
"(c)
"(1) the hospice program shall comply with otherwise applicable requirements, except that it shall not be required to offer services outside of the home or to meet the requirements of section 1861(dd)(2)(A)(iii) of the Social Security Act [
"(2) payments for hospice care shall be made at the rates otherwise applicable to such care under title XVIII of such Act [
The Secretary may require the program to comply with such additional quality assurance standards for its provision of services in its facility as the Secretary deems appropriate.
"(d)
OIG Report on Notices Relating to Use of Hospital Lifetime Reserve Days
"(1) the extent to which hospitals provide notice to medicare beneficiaries in accordance with applicable requirements before they use the 60 lifetime reserve days described in section 1812(a)(1) of the Social Security Act (
"(2) the appropriateness and feasibility of hospitals providing a notice to such beneficiaries before they completely exhaust such lifetime reserve days."
MedPAC Report on Access to, and Use of, Hospice Benefit
Transition
"(1)
"(2)
"(A) 1998 is 1/6,
"(B) 1999 is 1/3,
"(C) 2000 is ½,
"(D) 2001 is 2/3, and
"(E) 2002 is 5/6.
"(3)
"(A)
"(i) For 1998, 1/7.
"(ii) For 1999, 2/7.
"(iii) For 2000, 3/7.
"(iv) For 2001, 4/7.
"(v) For 2002, 5/7.
"(vi) For 2003, 6/7.
"(B)
Repeal of 1988 Expansion of Medicare Part A Benefits
For provisions repealing amendment by section 101 of
§1395e. Deductibles and coinsurance
(a) Inpatient hospital services; outpatient hospital diagnostic services; blood; post-hospital extended care services
(1) The amount payable for inpatient hospital services or inpatient critical access hospital services furnished an individual during any spell of illness shall be reduced by a deduction equal to the inpatient hospital deductible or, if less, the charges imposed with respect to such individual for such services, except that, if the customary charges for such services are greater than the charges so imposed, such customary charges shall be considered to be the charges so imposed. Such amount shall be further reduced by a coinsurance amount equal to—
(A) one-fourth of the inpatient hospital deductible for each day (before the 91st day) on which such individual is furnished such services during such spell of illness after such services have been furnished to him for 60 days during such spell; and
(B) one-half of the inpatient hospital deductible for each day (before the day following the last day for which such individual is entitled under
except that the reduction under this sentence for any day shall not exceed the charges imposed for that day with respect to such individual for such services (and for this purpose, if the customary charges for such services are greater than the charges so imposed, such customary charges shall be considered to be the charges so imposed).
(2)(A) The amount payable to any provider of services under this part for services furnished an individual shall be further reduced by a deduction equal to the expenses incurred for the first three pints of whole blood (or equivalent quantities of packed red blood cells, as defined under regulations) furnished to the individual during each calendar year, except that such deductible for such blood shall in accordance with regulations be appropriately reduced to the extent that there has been a replacement of such blood (or equivalent quantities of packed red blood cells, as so defined); and for such purposes blood (or equivalent quantities of packed red blood cells, as so defined) furnished such individual shall be deemed replaced when the institution or other person furnishing such blood (or such equivalent quantities of packed red blood cells, as so defined) is given one pint of blood for each pint of blood (or equivalent quantities of packed red blood cells, as so defined) furnished such individual with respect to which a deduction is made under this sentence.
(B) The deductible under subparagraph (A) for blood or blood cells furnished an individual in a year shall be reduced to the extent that a deductible has been imposed under
(3) The amount payable for post-hospital extended care services furnished an individual during any spell of illness shall be reduced by a coinsurance amount equal to one-eighth of the inpatient hospital deductible for each day (before the 101st day) on which he is furnished such services after such services have been furnished to him for 20 days during such spell.
(4)(A) The amount payable for hospice care shall be reduced—
(i) in the case of drugs and biologicals provided on an outpatient basis by (or under arrangements made by) the hospice program, by a coinsurance amount equal to an amount (not to exceed $5 per prescription) determined in accordance with a drug copayment schedule (established by the hospice program) which is related to, and approximates 5 percent of, the cost of the drug or biological to the program, and
(ii) in the case of respite care provided by (or under arrangements made by) the hospice program, by a coinsurance amount equal to 5 percent of the amount estimated by the hospice program (in accordance with regulations of the Secretary) to be equal to the amount of payment under
except that the total of the coinsurance required under clause (ii) for an individual may not exceed for a hospice coinsurance period the inpatient hospital deductible applicable for the year in which the period began. For purposes of this subparagraph, the term "hospice coinsurance period" means, for an individual, a period of consecutive days beginning with the first day for which an election under
(B) During the period of an election by an individual under
(b) Inpatient hospital deductible; application
(1) The inpatient hospital deductible for 1987 shall be $520. The inpatient hospital deductible for any succeeding year shall be an amount equal to the inpatient hospital deductible for the preceding calendar year, changed by the Secretary's best estimate of the payment-weighted average of the applicable percentage increases (as defined in
(2) The Secretary shall promulgate the inpatient hospital deductible and all coinsurance amounts under this section between September 1 and September 15 of the year preceding the year to which they will apply.
(3) The inpatient hospital deductible for a year shall apply to—
(A) the deduction under the first sentence of subsection (a)(1) for the year in which the first day of inpatient hospital services or inpatient critical access hospital services occurs in a spell of illness, and
(B) to the coinsurance amounts under subsection (a) for inpatient hospital services, inpatient critical access hospital services and post-hospital extended care services furnished in that year.
(Aug. 14, 1935, ch. 531, title XVIII, §1813, as added
Editorial Notes
Amendments
1997—
1994—Subsec. (a)(1).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B).
1989—Subsecs. (a)(1) to (3), (b)(3).
1988—Subsec. (a)(1) to (3).
Subsec. (b)(1).
Subsec. (b)(3).
1987—Subsec. (b)(1).
1986—Subsec. (b).
"(1) The inpatient hospital deductible which shall be applicable for the purposes of subsection (a) of this section shall be $40 in the case of any spell of illness beginning before 1969.
"(2) The Secretary shall, between July 1 and September 15 of 1968, and of each year thereafter, determine and promulgate the inpatient hospital deductible which shall be applicable for the purposes of subsection (a) of this section in the case of any inpatient hospital services or post-hospital extended care services furnished during the succeeding calendar year. Such inpatient hospital deductible shall be equal to $45 multiplied by the ratio of (A) the current average per diem rate for inpatient hospital services for the calendar year preceding the promulgation, to (B) the current average per diem rate for such services for 1966. Any amount determined under the preceding sentence which is not a multiple of $4 shall be rounded to the nearest multiple of $4 (or, if it is midway between two multiplies of $4, to the next higher multiple of $4). The current average per diem rate for any year shall be determined by the Secretary on the basis of the best information available to him (at the time the determination is made) as to the amounts paid under this part on account of inpatient hospital services furnished during such year, by hospitals which have agreements in effect under
Subsec. (b)(2).
1982—Subsec. (a)(4).
1981—Subsec. (b)(2).
1968—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(2) to (4).
Subsec. (b)(1), (2).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by section 102 of
Effective Date of 1986 Amendment
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1981 Amendment
Effective Date of 1968 Amendment
Amendment by section 129(c)(3), (4) of
Amendment by section 137(b) of
Repeal of 1988 Expansion of Medicare Part A Benefits
"(a)
"(1)
"(2)
"(b)
"(1)
"(A) no day before January 1, 1990, shall be counted in determining the beginning (or period) of a spell of illness;
"(B) with respect to the limitation (other than the limitation under section 1812(c) of such Act [
"(C) the limitation of coverage of extended care services to post-hospital extended care services shall not apply to an individual receiving such services from a skilled nursing facility during a continuous period beginning before (and including) January 1, 1990, until the end of the period of 30 consecutive days in which the individual is not provided inpatient hospital services or extended care services; and
"(D) the inpatient hospital deductible under section 1813(a)(1) of such Act [
"(i) in the case of an individual who is receiving inpatient hospital services during a continuous period beginning before (and including) January 1, 1990, with respect to the spell of illness beginning on such date, if such a deductible was imposed on the individual for a period of hospitalization during 1989;
"(ii) for a spell of illness beginning during January 1990, if such a deductible was imposed on the individual for a period of hospitalization that began in December 1989; and
"(iii) in the case of a spell of illness of an individual that began before January 1, 1990.
"(2)
[
Hold Harmless Provisions; Application of Subsection (a)(1) and (2)
"(1)(A) section 1813(a)(1) of such Act [subsec. (a)(1) of this section] (as amended by this subtitle [subtitle A (§§101–104) of title I of
"(B) if that individual begins a period of hospitalization (as defined in such section) during 1989 after the end of that spell of illness, the first period of hospitalization during 1989 that begins after that spell of illness shall be considered to be (for purposes of such section) the first period of hospitalization that begins during that year; and
"(2) the amount of any deductible under section 1813(a)(2) of such Act (as amended by this subtitle) shall be reduced during that spell of illness during 1989 to the extent the deductible under such section was applied during the spell of illness."
Promulgation of New Deductible
§1395f. Conditions of and limitations on payment for services
(a) Requirement of requests and certifications
Except as provided in subsections (d) and (g) and in
(1) written request, signed by such individual, except in cases in which the Secretary finds it impracticable for the individual to do so, is filed for such payment in such form, in such manner, and by such person or persons as the Secretary may by regulation prescribe, no later than the close of the period ending 1 calendar year after the date of service;
(2) a physician, or, in the case of services described in subparagraph (B), a physician, or a nurse practitioner, a clinical nurse specialist, or a physician assistant (as those terms are defined in
(A) in the case of inpatient psychiatric hospital services, such services are or were required to be given on an inpatient basis, by or under the supervision of a physician, for the psychiatric treatment of an individual; and (i) such treatment can or could reasonably be expected to improve the condition for which such treatment is or was necessary or (ii) inpatient diagnostic study is or was medically required and such services are or were necessary for such purposes;
(B) in the case of post-hospital extended care services, such services are or were required to be given because the individual needs or needed on a daily basis skilled nursing care (provided directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation services, which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis, for any of the conditions with respect to which he was receiving inpatient hospital services (or services which would constitute inpatient hospital services if the institution met the requirements of paragraphs (6) and (9) of
(C) in the case of home health services, such services are or were required because the individual is or was confined to his home (except when receiving items and services referred to in
(D) in the case of inpatient hospital services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, the individual, because of his underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services;
(3) with respect to inpatient hospital services (other than inpatient psychiatric hospital services) which are furnished over a period of time, a physician certifies that such services are required to be given on an inpatient basis for such individual's medical treatment, or that inpatient diagnostic study is medically required and such services are necessary for such purpose, except that (A) such certification shall be furnished only in such cases, with such frequency, and accompanied by such supporting material, appropriate to the cases involved, as may be provided by regulations, and (B) the first such certification required in accordance with clause (A) shall be furnished no later than the 20th day of such period;
(4) in the case of inpatient psychiatric hospital services, the services are those which the records of the hospital indicate were furnished to the individual during periods when he was receiving (A) intensive treatment services, (B) admission and related services necessary for a diagnostic study, or (C) equivalent services;
(5) with respect to inpatient hospital services furnished such individual after the 20th day of a continuous period of such services, there was not in effect, at the time of admission of such individual to the hospital, a decision under
(6) with respect to inpatient hospital services or post-hospital extended care services furnished such individual during a continuous period, a finding has not been made (by the physician members of the committee or group, as described in
(7) in the case of hospice care provided an individual—
(A)(i) in the first 90-day period—
(I) the individual's attending physician (as defined in
(II) the medical director (or physician member of the interdisciplinary group described in
each certify in writing at the beginning of the period, that the individual is terminally ill (as defined in
(ii) in a subsequent 90- or 60-day period, the medical director or physician described in clause (i)(II) recertifies at the beginning of the period that the individual is terminally ill based on such clinical judgment;
(B) a written plan for providing hospice care with respect to such individual has been established (before such care is provided by, or under arrangements made by, that hospice program) and is periodically reviewed by the individual's attending physician and by the medical director (and the interdisciplinary group described in
(C) such care is being or was provided pursuant to such plan of care;
(D) on and after January 1, 2011 (and, in the case of clause (ii), before October 6, 2014)—
(i)(I) subject to subclause (II), a hospice physician or nurse practitioner has a face-to-face encounter with the individual to determine continued eligibility of the individual for hospice care prior to the 180th-day recertification and each subsequent recertification under subparagraph (A)(ii) and attests that such visit took place (in accordance with procedures established by the Secretary); and
(II) during the emergency period described in
(ii) in the case of hospice care provided an individual for more than 180 days by a hospice program for which the number of such cases for such program comprises more than a percent (specified by the Secretary) of the total number of such cases for all programs under this subchapter, the hospice care provided to such individual is medically reviewed (in accordance with procedures established by the Secretary); and
(E) on and after October 6, 2014, in the case of hospice care provided an individual for more than 180 days by a hospice program for which the number of such cases for such program comprises more than a percent (specified by the Secretary) of the total number of all cases of individuals provided hospice care by the program under this subchapter, the hospice care provided to such individual is medically reviewed (in accordance with procedures established by the Secretary); and
(8) in the case of inpatient critical access hospital services, a physician certifies that the individual may reasonably be expected to be discharged or transferred to a hospital within 96 hours after admission to the critical access hospital.
To the extent provided by regulations, the certification and recertification requirements of paragraph (2) shall be deemed satisfied where, at a later date, a physician, nurse practitioner, clinical nurse specialist, or physician assistant (as the case may be) makes certification of the kind provided in subparagraph (A), (B), (C), or (D) of paragraph (2) (whichever would have applied), but only where such certification is accompanied by such medical and other evidence as may be required by such regulations. With respect to the certification required by paragraph (2) for home health services furnished to any individual by a home health agency (other than an agency which is a governmental entity) and with respect to the establishment and review of a plan for such services, the Secretary shall prescribe regulations which shall become effective no later than July 1, 1981 (or in the case of regulations to implement the amendments made by section 3708 of the CARES Act, the Secretary shall prescribe regulations, which shall become effective no later than 6 months after March 27, 2020), and which prohibit a physician, nurse practitioner, clinical nurse specialist, or physician assistant who has a significant ownership interest in, or a significant financial or contractual relationship with, such home health agency from performing such certification and from establishing or reviewing such plan, except that such prohibition shall not apply with respect to a home health agency which is a sole community home health agency (as determined by the Secretary). For purposes of the preceding sentence, service by a physician, nurse practitioner, clinical nurse specialist, or physician assistant as an uncompensated officer or director of a home health agency shall not constitute having a significant ownership interest in, or a significant financial or contractual relationship with, such agency. For purposes of documentation for physician certification and recertification made under paragraph (2) on or after January 1, 2019 or no later than 6 months after March 27, 2020, for purposes of documentation for certification and recertification made under paragraph (2) by a nurse practitioner, clinical nurse specialist, or physician assistant,,1 and made with respect to home health services furnished by a home health agency, in addition to using documentation in the medical record of the physician, nurse practitioner, clinical nurse specialist, or physician assistant who so certifies or the medical record of the acute or post-acute care facility (in the case that home health services were furnished to an individual who was directly admitted to the home health agency from such a facility), the Secretary may use documentation in the medical record of the home health agency as supporting material, as appropriate to the case involved. For purposes of paragraph (2)(C), an individual shall be considered to be "confined to his home" if the individual has a condition, due to an illness or injury, that restricts the ability of the individual to leave his or her home except with the assistance of another individual or the aid of a supportive device (such as crutches, a cane, a wheelchair, or a walker), or if the individual has a condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be considered "confined to his home", the condition of the individual should be such that there exists a normal inability to leave home and that leaving home requires a considerable and taxing effort by the individual. Any absence of an individual from the home attributable to the need to receive health care treatment, including regular absences for the purpose of participating in therapeutic, psychosocial, or medical treatment in an adult day-care program that is licensed or certified by a State, or accredited, to furnish adult day-care services in the State shall not disqualify an individual from being considered to be "confined to his home". Any other absence of an individual from the home shall not so disqualify an individual if the absence is of infrequent or of relatively short duration. For purposes of the preceding sentence, any absence for the purpose of attending a religious service shall be deemed to be an absence of infrequent or short duration. In applying paragraph (1), the Secretary may specify exceptions to the 1 calendar year period specified in such paragraph.
(b) Amount paid to provider of services
The amount paid to any provider of services (other than a hospice program providing hospice care, other than a critical access hospital providing inpatient critical access hospital services, and other than a home health agency with respect to durable medical equipment) with respect to services for which payment may be made under this part shall, subject to the provisions of
(1) except as provided in paragraph (3), the lesser of (A) the reasonable cost of such services, as determined under
(2) if such services are furnished by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this paragraph), free of charge or at nominal charges to the public, the amount determined on the basis of those items (specified in regulations prescribed by the Secretary) included in the determination of such reasonable cost which the Secretary finds will provide fair compensation to such provider for such services; or
(3) if some or all of the hospitals in a State have been reimbursed for services (for which payment may be made under this part) pursuant to a reimbursement system approved as a demonstration project under section 402 of the Social Security Amendments of 1967 or section 222 of the Social Security Amendments of 1972, if the rate of increase in such hospitals in their costs per hospital inpatient admission of individuals entitled to benefits under this part over the duration of such project was equal to or less than such rate of increase for admissions of such individuals with respect to all hospitals in the United States during such period, and if either the State has legislative authority to operate such system and the State elects to have reimbursement to such hospitals made in accordance with this paragraph or the system is operated through a voluntary agreement of hospitals and such hospitals elect to have reimbursement to those hospitals made in accordance with this paragraph, then, subject to section 1395ww(d)(3)(B)(ix)(III) 2 of this title, the Secretary may provide for continuation of reimbursement to such hospitals under such system until the Secretary determines that—
(A) a third-party payor reimburses such a hospital on a basis other than under such system, or
(B) the aggregate rate of increase from January 1, 1981, to the most recent date for which annual data are available in such hospitals in costs per hospital inpatient admission of individuals entitled to benefits under this part is greater than such rate of increase for admissions of such individuals with respect to all hospitals in the United States for such period.
In the case of any State which has had such a demonstration project reimbursement system in continuous operation since July 1, 1977, the Secretary shall provide under paragraph (3) for continuation of reimbursement to hospitals in the State under such system until the first day of the 37th month beginning after the date the Secretary determines and notifies the Governor of the State that either of the conditions described in subparagraph (A) or (B) of such paragraph has occurred. If, by the end of such 36-month period, the Secretary determines, based on evidence submitted by the Governor of the State, that neither of the conditions described in subparagraph (A) or (B) of paragraph (3) continues to apply, the Secretary shall continue without interruption payment to hospitals in the State under the State's system. If, by the end of such 36-month period, the Secretary determines, based on such evidence, that either of the conditions described in subparagraph (A) or (B) of such paragraph continues to apply, the Secretary shall (i) collect any net excess reimbursement to hospitals in the State during such 36-month period (basing such net excess reimbursement on the net difference, if any, in the rate of increase in costs per hospital inpatient admission under the State system compared to the rate of increase in such costs with respect to all hospitals in the United States over the 36-month period, as measured by including the cumulative savings under the State system based on the difference in the rate of increase in costs per hospital inpatient admission under the State system as compared to the rate of increase in such costs with respect to all hospitals in the United States between January 1, 1981, and the date of the Secretary's initial notice), and (ii) provide a reasonable period, not to exceed 2 years, for transition from the State system to the national payment system. For purposes of applying paragraph (3), there shall be taken into account incentive payments, and payment adjustments under subsection (b)(3)(B)(ix) or (n) of
(c) No payments to Federal providers of services
Subject to
(d) Payments for emergency hospital services
(1) Payments shall also be made to any hospital for inpatient hospital services furnished in a calendar year, by the hospital or under arrangements (as defined in
(2) Payment may be made on the basis of an itemized bill to an individual entitled to hospital insurance benefits under
(3) The amounts payable under the preceding paragraph with respect to services described therein shall, subject to the provisions of
(e) Payment for inpatient hospital services prior to notification of noneligibility
Notwithstanding that an individual is not entitled to have payment made under this part for inpatient hospital services furnished by any hospital, payment shall be made to such hospital (unless it elects not to receive such payment or, if payment has already been made by or on behalf of such individual, fails to refund such payment within the time specified by the Secretary) for such services which are furnished to the individual prior to notification to such hospital from the Secretary of his lack of entitlement, if such payments are precluded only by reason of
(f) Payment for certain inpatient hospital services furnished outside United States
(1) Payment shall be made for inpatient hospital services furnished to an individual entitled to hospital insurance benefits under
(A) such individual is a resident of the United States, and
(B) such hospital was closer to, or substantially more accessible from, the residence of such individual than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual's illness or injury.
(2) Payment may also be made for emergency inpatient hospital services furnished to an individual entitled to hospital insurance benefits under
(A) such individual was physically present—
(i) in a place within the United States; or
(ii) at a place within Canada while traveling without unreasonable delay by the most direct route (as determined by the Secretary) between Alaska and another State;
at the time the emergency which necessitated such inpatient hospital services occurred, and
(B) such hospital was closer to, or substantially more accessible from, such place than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual's illness or injury.
(3) Payment shall be made in the amount provided under subsection (b) to any hospital for the inpatient hospital services described in paragraph (1) or (2) furnished to an individual by the hospital or under arrangements (as defined in
(4) Payment for the inpatient hospital services described in paragraph (1) or (2) furnished to an individual entitled to hospital insurance benefits under
(g) Payments to physicians for services rendered in teaching hospitals
For purposes of services for which the reasonable cost thereof is determined under
(1) such hospital has an agreement with the Secretary under
(2) the Secretary has received written assurances that (A) such payment will be used by such fund solely for the improvement of care of hospital patients or for educational or charitable purposes and (B) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged, provision will be made for return of any moneys incorrectly collected).
(h) Payment for specified hospital services provided in Department of Veterans Affairs hospitals; amount of payment
(1) Payments shall also be made to any hospital operated by the Department of Veterans Affairs for inpatient hospital services furnished in a calendar year by the hospital, or under arrangements (as defined in
(2) Payment for services described in paragraph (1) shall be in an amount equal to the charge imposed by the Secretary of Veterans Affairs for such services, or (if less) the amount that would be payable for such services under subsection (b) and
(i) Payment for hospice care
(1)(A) Subject to the limitation under paragraph (2) and the provisions of
(B) Notwithstanding subparagraph (A), for hospice care furnished on or after April 1, 1986, the daily rate of payment per day for routine home care shall be $63.17 and the daily rate of payment for other services included in hospice care shall be the daily rate of payment recognized under subparagraph (A) as of July 1, 1985, increased by $10.
(C)(i) With respect to routine home care and other services included in hospice care furnished on or after January 1, 1990, and on or before September 30, 1990, the payment rates for such care and services shall be 120 percent of such rates in effect as of September 30, 1989.
(ii) With respect to routine home care and other services included in hospice care furnished during a subsequent fiscal year (before the first fiscal year in which the payment revisions described in paragraph (6)(D) are implemented), the payment rates for such care and services shall be the payment rates in effect under this subparagraph during the previous fiscal year increased by—
(I) for a fiscal year ending on or before September 30, 1993, the market basket percentage increase (as defined in
(II) for fiscal year 1994, the market basket percentage increase for the fiscal year minus 2.0 percentage points;
(III) for fiscal year 1995, the market basket percentage increase for the fiscal year minus 1.5 percentage points;
(IV) for fiscal year 1996, the market basket percentage increase for the fiscal year minus 1.5 percentage points;
(V) for fiscal year 1997, the market basket percentage increase for the fiscal year minus 0.5 percentage point;
(VI) for each of fiscal years 1998 through 2002, the market basket percentage increase for the fiscal year involved minus 1.0 percentage points, plus, in the case of fiscal year 2001, 5.0 percentage points; and
(VII) for a subsequent fiscal year (before the first fiscal year in which the payment revisions described in paragraph (6)(D) are implemented), subject to clauses (iv) and (vi), the market basket percentage increase for the fiscal year.
(iii) With respect to routine home care and other services included in hospice care furnished during fiscal years subsequent to the first fiscal year in which payment revisions described in paragraph (6)(D) are implemented, the payment rates for such care and services shall be the payment rates in effect under this clause during the preceding fiscal year increased by, subject to clauses (iv) and (vi), the market basket percentage increase (as defined in
(iv) Subject to clause (vi), after determining the market basket percentage increase under clause (ii)(VII) or (iii), as applicable, with respect to fiscal year 2013 and each subsequent fiscal year, the Secretary shall reduce such percentage—
(I) for 2013 and each subsequent fiscal year, by the productivity adjustment described in
(II) subject to clause (v), for each of fiscal years 2013 through 2019, by 0.3 percentage point.
The application of this clause may result in the market basket percentage increase under clause (ii)(VII) or (iii), as applicable, being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.
(v) Clause (iv)(II) shall be applied with respect to any of fiscal years 2014 through 2019 by substituting "0.0 percentage points" for "0.3 percentage point", if for such fiscal year—
(I) the excess (if any) of—
(aa) the total percentage of the non-elderly insured population for the preceding fiscal year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
(bb) the total percentage of the non-elderly insured population for such preceding fiscal year (as estimated by the Secretary); exceeds
(II) 5 percentage points.
(vi) For fiscal year 2018, the market basket percentage increase under clause (ii)(VII) or (iii), as applicable, after application of clause (iv), shall be 1 percent.
(2)(A) The amount of payment made under this part for hospice care provided by (or under arrangements made by) a hospice program for an accounting year may not exceed the "cap amount" for the year (computed under subparagraph (B)) multiplied by the number of medicare beneficiaries in the hospice program in that year (determined under subparagraph (C)).
(B)(i) Except as provided in clause (ii), for purposes of subparagraph (A), the "cap amount" for a year is $6,500, increased or decreased, for accounting years that end after October 1, 1984, by the same percentage as the percentage increase or decrease, respectively, in the medical care expenditure category of the Consumer Price Index for All Urban Consumers (United States city average), published by the Bureau of Labor Statistics, from March 1984 to the fifth month of the accounting year.
(ii) For purposes of subparagraph (A) for accounting years that end after September 30, 2016, and before October 1, 2033, the "cap amount" is the cap amount under this subparagraph for the preceding accounting year updated by the percentage update to payment rates for hospice care under paragraph (1)(C) for services furnished during the fiscal year beginning on the October 1 preceding the beginning of the accounting year (including the application of any productivity or other adjustment under clause (iv) of that paragraph).
(iii) For accounting years that end after September 30, 2033, the cap amount shall be computed under clause (i) as if clause (ii) had never applied.
(C) For purposes of subparagraph (A), the "number of medicare beneficiaries" in a hospice program in an accounting year is equal to the number of individuals who have made an election under subsection (d) with respect to the hospice program and have been provided hospice care by (or under arrangements made by) the hospice program under this part in the accounting year, such number reduced to reflect the proportion of hospice care that each such individual was provided in a previous or subsequent accounting year or under a plan of care established by another hospice program.
(D) A hospice program shall submit claims for payment for hospice care furnished in an individual's home under this subchapter only on the basis of the geographic location at which the service is furnished, as determined by the Secretary.
(3) Hospice programs providing hospice care for which payment is made under this subsection shall submit to the Secretary such data with respect to the costs for providing such care for each fiscal year, beginning with fiscal year 1999, as the Secretary determines necessary.
(4) The amount paid to a hospice program with respect to the services under
(5)
(A)
(i)
(ii)
(B)
(C)
(D)
(i)
(ii)
(iii)
(E)
(6)(A) The Secretary shall collect additional data and information as the Secretary determines appropriate to revise payments for hospice care under this subsection pursuant to subparagraph (D) and for other purposes as determined appropriate by the Secretary. The Secretary shall begin to collect such data by not later than January 1, 2011.
(B) The additional data and information to be collected under subparagraph (A) may include data and information on—
(i) charges and payments;
(ii) the number of days of hospice care which are attributable to individuals who are entitled to, or enrolled for, benefits under this part; and
(iii) with respect to each type of service included in hospice care—
(I) the number of days of hospice care attributable to the type of service;
(II) the cost of the type of service; and
(III) the amount of payment for the type of service;
(iv) charitable contributions and other revenue of the hospice program;
(v) the number of hospice visits;
(vi) the type of practitioner providing the visit; and
(vii) the length of the visit and other basic information with respect to the visit.
(C) The Secretary may collect the additional data and information under subparagraph (A) on cost reports, claims, or other mechanisms as the Secretary determines to be appropriate.
(D)(i) Notwithstanding the preceding paragraphs of this subsection, not earlier than October 1, 2013, the Secretary shall, by regulation, implement revisions to the methodology for determining the payment rates for routine home care and other services included in hospice care under this part, as the Secretary determines to be appropriate. Such revisions may be based on an analysis of data and information collected under subparagraph (A). Such revisions may include adjustments to per diem payments that reflect changes in resource intensity in providing such care and services during the course of the entire episode of hospice care.
(ii) Revisions in payment implemented pursuant to clause (i) shall result in the same estimated amount of aggregate expenditures under this subchapter for hospice care furnished in the fiscal year in which such revisions in payment are implemented as would have been made under this subchapter for such care in such fiscal year if such revisions had not been implemented.
(E) The Secretary shall consult with hospice programs and the Medicare Payment Advisory Commission regarding the additional data and information to be collected under subparagraph (A) and the payment revisions under subparagraph (D).
(7) In the case of hospice care provided by a hospice program under arrangements under
(j) Elimination of lesser-of-cost-or-charges provision
(1) The lesser-of-cost-or-charges provisions (described in paragraph (2)) will not apply in the case of services provided by a class of provider of services if the Secretary determines and certifies to Congress that the failure of such provisions to apply to the services provided by that class of providers will not result in any increase in the amount of payments made for those services under this subchapter. Such change will take effect with respect to services furnished, or cost reporting periods of providers, on or after such date as the Secretary shall provide in the certification. Such change for a class of provider shall be discontinued if the Secretary determines and notifies Congress that such change has resulted in an increase in the amount of payments made under this subchapter for services provided by that class of provider.
(2) The lesser-of-cost-or-charges provisions referred to in paragraph (1) are as follows:
(A) Clause (B) of paragraph (1) and paragraph (2) of subsection (b).
(B)
(C) So much of subparagraph (A) of
(D) Subclause (II) of clause (i) and clause (ii) of
(k) Payments to home health agencies for durable medical equipment
The amount paid to any home health agency with respect to durable medical equipment for which payment may be made under this part shall be the amount described in
(l) Payment for inpatient critical access hospital services
(1) Except as provided in the subsequent paragraphs of this subsection, the amount of payment under this part for inpatient critical access hospital services is equal to 101 percent of the reasonable costs of the critical access hospital in providing such services.
(2) In the case of a distinct part psychiatric or rehabilitation unit of a critical access hospital described in
(3)(A) The following rules shall apply in determining payment and reasonable costs under paragraph (1) for costs described in subparagraph (C) for a critical access hospital that would be a meaningful EHR user (as would be determined under paragraph (3) of
(i) The Secretary shall compute reasonable costs by expensing such costs in a single payment year and not depreciating such costs over a period of years (and shall include as costs with respect to cost reporting periods beginning during a payment year costs from previous cost reporting periods to the extent they have not been fully depreciated as of the period involved).
(ii) There shall be substituted for the Medicare share that would otherwise be applied under paragraph (1) a percent (not to exceed 100 percent) equal to the sum of—
(I) the Medicare share (as would be specified under paragraph (2)(D) of
(II) 20 percentage points.
(B) The payment under this paragraph with respect to a critical access hospital shall be paid through a prompt interim payment (subject to reconciliation) after submission and review of such information (as specified by the Secretary) necessary to make such payment, including information necessary to apply this paragraph. In no case may payment under this paragraph be made with respect to a cost reporting period beginning during a payment year after 2015 and in no case may a critical access hospital receive payment under this paragraph with respect to more than 4 consecutive payment years.
(C) The costs described in this subparagraph are costs for the purchase of certified EHR technology to which purchase depreciation (excluding interest) would apply if payment was made under paragraph (1) and not under this paragraph.
(D) For purposes of this paragraph, paragraph (4), and paragraph (5), the terms "certified EHR technology", "eligible hospital", "EHR reporting period", and "payment year" have the meanings given such terms in
(4)(A) Subject to subparagraph (C), for cost reporting periods beginning in fiscal year 2015 or a subsequent fiscal year, in the case of a critical access hospital that is not a meaningful EHR user (as would be determined under paragraph (3) of
(B) The percent described in this subparagraph is—
(i) for fiscal year 2015, 100.66 percent;
(ii) for fiscal year 2016, 100.33 percent; and
(iii) for fiscal year 2017 and each subsequent fiscal year, 100 percent.
(C) The provisions of subclause (II) of
(5) There shall be no administrative or judicial review under
(A) the methodology and standards for determining the amount of payment and reasonable cost under paragraph (3) and payment adjustments under paragraph (4), including selection of periods under
(B) the methodology and standards for determining a meaningful EHR user under
(C) the specification of EHR reporting periods under section 1395ww(n)(6)(B) 4 of this title as applied under paragraphs (3) and (4); and
(D) the identification of costs for purposes of paragraph (3)(C).
(Aug. 14, 1935, ch. 531, title XVIII, §1814, as added
Editorial Notes
References in Text
The amendments made by section 3708 of the CARES Act, referred to in subsec. (a), are the amendments made by section 3708 of
Section 402 of the Social Security Amendments of 1967, referred to in subsec. (b)(3), means section 402 of
Section 222 of the Social Security Amendments of 1972, referred to in subsec. (b)(3), means section 222 of
The Patient Protection and Affordable Care Act, referred to in subsec. (i)(1)(C)(v)(I)(aa), is
The matter following clause (v) of
Amendments
2024—Subsec. (i)(2)(B)(ii), (iii).
2022—Subsec. (a)(7)(D)(i)(II).
Subsec. (i)(2)(B)(ii), (iii).
2020—Subsec. (a).
Subsec. (a)(2).
Subsec. (a)(2)(C).
Subsec. (a)(7)(D)(i).
Subsec. (i)(2)(B)(ii), (iii).
Subsec. (i)(5)(A)(i).
2018—Subsec. (a).
Subsec. (a)(7)(A)(i)(I).
2015—Subsec. (i)(1)(C)(ii)(VII).
Subsec. (i)(1)(C)(iii).
Subsec. (i)(1)(C)(iv).
Subsec. (i)(1)(C)(vi).
Subsec. (i)(5)(A)(i).
2014—Subsec. (a)(7)(D).
Subsec. (a)(7)(E).
Subsec. (i)(2)(B).
2010—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(2)(C).
Subsec. (a)(7)(D).
Subsec. (i)(1)(C)(ii).
Subsec. (i)(1)(C)(ii)(VII).
Subsec. (i)(1)(C)(iii).
Subsec. (i)(1)(C)(iv).
Subsec. (i)(1)(C)(iv)(II).
Subsec. (i)(1)(C)(v).
Subsec. (i)(5).
Subsec. (i)(6).
Subsec. (i)(7).
2009—Subsec. (b).
Subsec. (b)(3).
Subsec. (l)(1).
Subsec. (l)(3) to (5).
2003—Subsec. (a).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(A)(i)(I).
Subsec. (a)(7)(A)(ii).
Subsec. (b).
Subsec. (i)(4).
Subsec. (i)(5).
Subsec. (l).
2000—Subsec. (a).
Subsec. (a)(7)(A)(ii).
Subsec. (i)(1)(C)(ii)(VI).
1997—Subsec. (a)(2)(C).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(A)(ii).
Subsec. (a)(7)(A)(iii).
Subsec. (a)(8).
Subsec. (b).
Subsec. (i)(1)(C)(ii)(V) to (VII).
Subsec. (i)(2)(D).
Subsec. (i)(3).
Subsec. (l).
"(1) The amount of payment under this part for inpatient rural primary care hospital services—
"(A) in the case of the first 12-month cost reporting period for which the facility operates as such a hospital, is the reasonable costs of the facility in providing inpatient rural primary care hospital services during such period, as such costs are determined on a per diem basis, and
"(B) in the case of a later reporting period, is the per diem payment amount established under this paragraph for the preceding 12-month cost reporting period, increased by the applicable percentage increase under
The payment amounts otherwise determined under this paragraph shall be reduced, to the extent necessary, to avoid duplication of any payment made under
"(2) The Secretary shall develop a prospective payment system for determining payment amounts for inpatient rural primary care hospital services under this part furnished on or after January 1, 1996."
1994—Subsec. (a)(5).
Subsec. (a)(8).
Subsec. (i)(1)(C)(i).
Subsec. (l)(2).
1993—Subsec. (i)(1)(C)(ii).
1991—Subsec. (h).
1990—Subsec. (a)(7)(A)(iii).
Subsec. (b)(3).
Subsec. (i)(1)(C)(i).
1989—Subsec. (a).
Subsec. (a)(2).
Subsec. (a)(2)(B), (6).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(A)(iii).
Subsec. (a)(8).
Subsec. (b).
Subsec. (d)(3).
Subsec. (i)(1)(A).
Subsec. (i)(1)(C).
Subsec. (l).
1988—Subsec. (a)(2)(B).
Subsec. (a)(6).
Subsec. (a)(7)(A)(iii).
Subsec. (d)(3).
1987—Subsec. (a).
Subsec. (b)(3)(B).
Subsec. (j)(2)(B).
Subsec. (k).
"(1) the lesser of—
"(A) the reasonable cost of such equipment, as determined under
"(B) the customary charges with respect to such equipment,
less the amount the home health agency may charge as described in
"(2) if such equipment is furnished by a public home health agency, or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this paragraph), free of charge or at nominal charge to the public, 80 percent of the amount which the Secretary finds will provide fair compensation to the home health agency."
1986—Subsec. (i)(1)(B).
Subsec. (i)(1)(C).
1984—Subsec. (a).
Subsec. (a)(2)(B) to (E).
Subsec. (a)(3).
Subsec. (a)(5) to (8).
Subsec. (b).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (i)(1).
Subsec. (j)(2)(B) to (D).
Subsec. (k).
Subsec. (k)(2).
1983—Subsec. (g).
Subsec. (h)(2).
Subsec. (i)(1).
Subsec. (i)(2)(A).
Subsec. (i)(2)(B).
Subsec. (j).
Subsec. (j)(2)(A).
1982—Subsec. (a)(8).
Subsec. (b).
Subsec. (i).
1981—Subsec. (a)(2)(D).
Subsec. (a)(2)(F).
1980—Subsec. (a).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
Subsec. (a)(2)(F).
Subsec. (b)(1).
Subsec. (b)(3).
Subsec. (c).
Subsecs. (h) to (j).
1978—Subsec. (b)(1).
1977—Subsec. (c).
Subsec. (j).
1976—Subsec. (c).
1973—Subsec. (a)(2)(E).
Subsec. (a), last sentence.
1972—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2)(C).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (b).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
1968—Subsec. (a).
Subsec. (a)(2)(A) to (E).
Subsec. (a)(2)(F).
Subsec. (a)(3) to (7).
Subsec. (d).
Subsec. (d)(1) to (3).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2018 Amendment
Effective Date of 2010 Amendment
"(1)
"(2)
Effective Date of 2003 Amendment
Amendment by section 512(b) of
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Amendment by sections 4441, 4443(b)(2), and 4448 of
Amendment by section 4603(c)(1) of
Effective Date of 1994 Amendment
Amendment by section 106(b)(1)(A) of
Effective Date of 1990 Amendment
Amendment by section 4006(b) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1987 Amendment
[
Effective Date of 1984 Amendment
Amendment by section 2354(b)(1) of
Amendment by section 2354(c)(1)(A) of
Effective Date of 1983 Amendment
Amendment by
Amendment by
Effective Date of 1982 Amendment
Amendment by section 122(c)(1), (2) of
Effective Date of 1981 Amendment
Amendment by section 2121(b) of
Effective Date of 1980 Amendment
Amendment by section 930(e), (f) of
Amendment by section 931(b) of
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1977 Amendment
Effective Date of 1973 Amendment
Effective Date of 1972 Amendment
Amendment by section 226(c)(1) of
Amendment by section 227(b) of
Amendment by section 234(g)(1) of
Amendment by section 281(e) of
Effective Date of 1968 Amendment
Amendment by section 129(c)(5), (6)(A) of
Amendment by section 143(c) of
Revision of Regulations Regarding Access to Home Health Services
Promulgation of Regulations
Section 122(h)(2) of
"(A) a description of the care included in 'hospice care' and the standards for qualification of a 'hospice program', under section 1861(dd) of the Social Security Act [
"(B) the standards for payment for hospice care under part A of title XVIII of such Act [
Program Instruction Authority
Application to Medicaid
Application of 2010 Amendment
Study and Report on Effect of 2000 Amendment
"(1)
"(2)
Study and Report on Physician Certification Requirement for Hospice Benefits
"(1)
"(2)
Temporary Increase in Payment for Hospice Care
"(a)
"(1) fiscal year 2001, by 0.5 percent, and
"(2) fiscal year 2002, by 0.75 percent.
"(b)
Study and Report to Congress Regarding Modification of Payment Rates for Hospice Care
Study of Methods To Compensate Hospices for High-Cost Care
Continuation of Bad Debt Recognition for Hospital Services
[
[
Providers of Services To Calculate and Report Lesser-of-Cost-or-Charges Determinations Separately With Respect to Payments Under Parts A and B of This Subchapter; Issuance of Regulations
Determination of Nominal Charges for Applying Nominality Test
Study and Report Relating to the Reimbursement Method and Benefit Structure for Hospice Care; Supervision of Report by Comptroller General
Waiver of Limitations To Allow Pre-Existing Hospices To Participate as a Hospice Program
Medicare Payment Basis for Services Provided by Agencies and Providers; Effective Date
2 So in original. Probably should be "1395ww(b)(3)(B)(ix)(III)".
3 See References in Text note below.
4 So in original. Probably should be "1395ww(n)(3)(B)".
§1395g. Payments to providers of services
(a) Determination of amount
The Secretary shall periodically determine the amount which should be paid under this part to each provider of services with respect to the services furnished by it, and the provider of services shall be paid, at such time or times as the Secretary believes appropriate (but not less often than monthly) and prior to audit or settlement by the Government Accountability Office, from the Federal Hospital Insurance Trust Fund, the amounts so determined, with necessary adjustments on account of previously made overpayments or underpayments; except that no such payments shall be made to any provider unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider under this part for the period with respect to which the amounts are being paid or any prior period.
(b) Conditions
No payment shall be made to a provider of services which is a hospital for or with respect to services furnished by it for any period with respect to which it is deemed, under
(c) Payments under assignment or power of attorney
No payment which may be made to a provider of services under this subchapter for any service furnished to an individual shall be made to any other person under an assignment or power of attorney; but nothing in this subsection shall be construed (1) to prevent the making of such a payment in accordance with an assignment from the provider if such assignment is made to a governmental agency or entity or is established by or pursuant to the order of a court of competent jurisdiction, or (2) to preclude an agent of the provider of services from receiving any such payment if (but only if) such agent does so pursuant to an agency agreement under which the compensation to be paid to the agent for his services for or in connection with the billing or collection of payments due such provider under this subchapter is unrelated (directly or indirectly) to the amount of such payments or the billings therefor, and is not dependent upon the actual collection of any such payment.
(d) Accrual of interest on balance of excess or deficit not paid
Whenever a final determination is made that the amount of payment made under this part to a provider of services was in excess of or less than the amount of payment that is due, and payment of such excess or deficit is not made (or effected by offset) within 30 days of the date of the determination, interest shall accrue on the balance of such excess or deficit not paid or offset (to the extent that the balance is owed by or owing to the provider) at a rate determined in accordance with the regulations of the Secretary of the Treasury applicable to charges for late payments (or, in the case of such a determination made with respect to a payment made on or after March 27, 2020, and during the emergency period described in
(e) Periodic interim payments
(1) The Secretary shall provide payment under this part for inpatient hospital services furnished by a subsection (d) hospital (as defined in
(A) Upon the request of a hospital which is paid through an agency or organization with an agreement with the Secretary under
(B) In the case of a hospital that—
(i) has a disproportionate share adjustment percentage (as established in clause (iv) of such section) of at least 5.1 percent (as computed for purposes of establishing the average standardized amounts for discharges occurring during fiscal year 1987), and
(ii) requests payment on such basis,
but only if the hospital was being paid for inpatient hospital services on such a periodic interim payment basis as of June 30, 1987, and continues to meet the requirements (in effect as of October 1, 1986) applicable to payment on such a basis.
(C) In the case of a hospital that—
(i) is located in a rural area,
(ii) has 100 or fewer beds, and
(iii) requests payment on such basis,
but only if the hospital was being paid for inpatient hospital services on such a periodic interim payment basis as of June 30, 1987, and continues to meet the requirements (in effect as of October 1, 1986) applicable to payment on such a basis.
(2) The Secretary shall provide (or continue to provide) for payment on a periodic interim payment basis (under the standards established under section 405.454(j) of title 42, Code of Federal Regulations, as in effect on October 1, 1986, in the cases described in subparagraphs (A) through (D)) with respect to—
(A) inpatient hospital services of a hospital that is not a subsection (d) hospital (as defined in
(B) a hospital which is receiving payment under a State hospital reimbursement system under
(C) extended care services;
(D) hospice care; and
(E) inpatient critical access hospital services;
if the provider of such services elects to receive, and qualifies for, such payments.
(3) Subject to subsection (f), in the case of a subsection (d) hospital or a subsection (d) Puerto Rico hospital (as defined for purposes of
(4) A hospital created by the merger or consolidation of 2 or more hospitals or hospital campuses shall be eligible to receive periodic interim payment on the basis described in paragraph (1)(B) if—
(A) at least one of the hospitals or campuses received periodic interim payment on such basis prior to the merger or consolidation; and
(B) the merging or consolidating hospitals or campuses would each meet the requirement of paragraph (1)(B)(i) if such hospitals or campuses were treated as independent hospitals for purposes of this subchapter.
(f) Expansion of accelerated payment program during COVID–19 public health emergency
(1) During the emergency period described in
(2) In expanding the program under subsection (e)(3), the following shall apply:
(A)(i) In addition to the hospitals described in subsection (e)(3), the following hospitals shall be eligible to participate in the program:
(I) Hospitals described in clause (iii) of
(II) Hospitals described in clause (v) of such section.
(III) Critical access hospitals (as defined in
(ii) Subject to appropriate safeguards against fraud, waste, and abuse, upon a request of a hospital described in clause (i), the Secretary shall (or, with respect to requests submitted to the Secretary after April 26, 2020, may) provide accelerated payments under the program to such hospital.
(B) Upon the request of the hospital, the Secretary may do any of the following:
(i) Make accelerated payments on a periodic or lump sum basis.
(ii) Increase the amount of payment that would otherwise be made to hospitals under the program up to 100 percent (or, in the case of critical access hospitals, up to 125 percent).
(iii) Extend the period that accelerated payments cover so that it covers up to a 6-month period.
(C) In the case of a payment made under the terms of the program under subsection (e)(3), including such program as expanded pursuant to this subsection, on or after March 27, 2020, and so made during the emergency period described in
(i) provide 1 year before payments for items and services furnished by the hospital are offset to recoup payments under such program;
(ii) provide that any such offset be an amount equal to—
(I) during the first 11 months in which any such offsets are made with respect to payment for items and services furnished by the hospital, 25 percent of the amount of such payment for such items and services; and
(II) during the succeeding 6 months, 50 percent of the amount of such payment for such items and services; and
(iii) allow 29 months from the date of the first payment under such program to such provider before requiring that the outstanding balance be paid in full.
(3) Nothing in this subsection shall preclude the Secretary from carrying out the provisions described in clauses (i), (ii), and (iii) of paragraph (2)(B) and clauses (i) and (ii) of paragraph (2)(C) under the program under subsection (e)(3) after the period for which this subsection applies.
(4) Notwithstanding any other provision of law, the Secretary may implement the provisions of this subsection by program instruction or otherwise.
(Aug. 14, 1935, ch. 531, title XVIII, §1815, as added
Editorial Notes
Amendments
2020—Subsec. (d).
Subsec. (e)(3).
Subsec. (f).
Subsec. (f)(2)(A)(ii).
Subsec. (f)(2)(C).
"(i) Provide up to 120 days before claims are offset to recoup the accelerated payment.
"(ii) Allow not less than 12 months from the date of the first accelerated payment before requiring that the outstanding balance be paid in full."
2011—Subsec. (b).
2004—Subsec. (a).
2003—Subsec. (e)(1)(B).
Subsec. (e)(2).
Subsec. (e)(2)(E).
1997—Subsec. (e)(2)(C) to (E).
1989—Subsec. (e)(4).
1986—Subsec. (e).
1982—Subsec. (b).
Subsec. (d).
1980—Subsec. (c).
1977—Subsec. (c).
1975—
Statutory Notes and Related Subsidiaries
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2003 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1989 Amendment
Effective Date of 1986 Amendment
Effective Date of 1982 Amendment
Amendment by section 148(b) of
Effective Date of 1977 Amendment
Effective Date of 1975 Amendment
Amendment by
Application to Other Part A Providers
"(i)
"(ii)
"(I) the programs under sections 413.64(g), 412.541(f), 412.632(e), 412.116(f), 413.350(d), or 418.307 of title 42, Code of Federal Regulations (or any successor regulations); and
"(II) any other comparable program under part A of title XVIII of the Social Security Act [
"(iii)
Publication of Data
"(1)
"(A)
"(i) The total amount of such payments made under each applicable payment program (as defined in paragraph (3)(A)), including a specification of the percentage of such payments so made from the Federal Hospital Insurance Trust Fund established under section 1817 of the Social Security Act (
"(ii) The amount of specified payments made under each such program by type of provider of services or supplier receiving such payments.
"(iii) The Centers for Medicare & Medicaid Services certification number or other appropriate number of, and the amount of such payments received by, each provider of services and supplier receiving such payments.
"(B)
"(2)
"(A) The total amount of all specified payments not recouped or repaid under each applicable payment program.
"(B) The amount of payments made under each such program and not recouped or repaid by type of provider of services or supplier.
"(C) The total amount of specified payments that have been recouped or repaid under each such program, including a specification of the percentage of such payments so recouped or repaid that have been deposited into the Federal Hospital Insurance Trust Fund and the percentage of such payments so recouped or repaid that have been deposited into the Federal Supplementary Insurance Trust Fund under each such program.
"(D) The dollar amount of interest that has been collected with respect to all specified payments under each such program.
"(3)
"(A)
"(i) the program under subsection (e)(3) of section 1815 of the Social Security Act (
"(ii) an applicable program (as defined in subsection (a)(1)(C)(ii) of this section [set out as a note above]); and
"(iii) the program described in section 421.214 of title 42, Code of Federal Regulations (or any successor regulation).
"(B)
"(C)
"(D)
"(E)
Development of Alternative Timing Methods of Periodic Interim Payments
Transition
"(A) as of June 30, 1987, is receiving payments under part A of title XVIII of such Act [
"(B) requests continuation of payment on such basis, and
"(C) is paid through an agency or organization with an agreement under section 1816 of such Act [
the Secretary of Health and Human Services shall continue payment on such a basis until not earlier than the end of the first period of three consecutive calendar months (beginning no earlier than April 1987) during all of which the agency or organization has met the requirements of section 1816(c)(2) of such Act (relating to prompt payment of claims)."
Delay in Periodic Interim Payments
"(1) with respect to the last 21 days for which such payments would otherwise be made during fiscal year 1983, such payments shall be deferred until fiscal year 1984; and
"(2) with respect to the last 21 days for which such payments would otherwise be made during fiscal year 1984, such payments shall be deferred until fiscal year 1985."
§1395h. Provisions relating to the administration of part A
(a) In general
The administration of this part shall be conducted through contracts with medicare administrative contractors under
(b) Repealed. Pub. L. 108–173, title IX, §911(b)(3), Dec. 8, 2003, 117 Stat. 2383
(c) Prompt payment of claims
(1) Repealed.
(2)(A) Each contract under
(i) which are clean claims, and
(ii) for which payment is not made on a periodic interim payment basis,
within the applicable number of calendar days after the date on which the claim is received.
(B) In this paragraph:
(i) The term "clean claim" means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this subchapter.
(ii) The term "applicable number of calendar days" means—
(I) with respect to claims received in the 12-month period beginning October 1, 1986, 30 calendar days,
(II) with respect to claims received in the 12-month period beginning October 1, 1987, 26 calendar days,
(III) with respect to claims received in the 12-month period beginning October 1, 1988, 25 calendar days,
(IV) with respect to claims received in the 12-month period beginning October 1, 1989, and claims received in any succeeding 12-month period ending on or before September 30, 1993, 24 calendar days, and
(V) with respect to claims received in the 12-month period beginning October 1, 1993, and claims received in any succeeding 12-month period, 30 calendar days.
(C) If payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in clause (ii) of subparagraph (B)) after a clean claim (as defined in clause (i) of such subparagraph) is received from a hospital, critical access hospital, skilled nursing facility, home health agency, hospice program, comprehensive outpatient rehabilitation facility, or rehabilitation agency that is not receiving payments on a periodic interim payment basis with respect to such services, interest shall be paid at the rate used for purposes of
(3)(A) Each contract under
(B) In this paragraph, the term "applicable number of calendar days" means—
(i) with respect to claims submitted electronically as prescribed by the Secretary, 13 days, and
(ii) with respect to claims submitted otherwise, 28 days.
(d) to (i). Repealed. Pub. L. 108–173, title IX, §911(b)(5), Dec. 8, 2003, 117 Stat. 2383
(j) Denial of claim; notification and reconsideration
A contract with a medicare administrative contractor under
(1) furnish the provider and the individual with respect to whom the claim is made with a written explanation of the denial and of the statutory or regulatory basis for the denial; and
(2) in the case of a request for reconsideration of a denial, promptly notify such individual and the provider of the disposition of such reconsideration.
(k) Annual reporting requirement on erroneous payment recovery
A contract with a medicare administrative contractor under
(l) Repealed. Pub. L. 108–173, title IX, §911(b)(7), Dec. 8, 2003, 117 Stat. 2383
(Aug. 14, 1935, ch. 531, title XVIII, §1816, as added
Editorial Notes
Amendments
2006—Subsec. (c)(3)(B)(ii).
2003—
Subsec. (a).
Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B)(ii)(III).
Subsec. (c)(2)(B)(ii)(IV).
Subsec. (c)(3)(A).
Subsecs. (d) to (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
1997—Subsec. (c)(2)(C).
1996—Subsec. (l).
1994—Subsec. (f)(1)(A).
Subsec. (f)(2)(A)(ii).
Subsec. (k).
1993—Subsec. (c)(2)(B)(ii)(IV), (V).
Subsec. (c)(3)(B).
"(i) with respect to claims received in the 3-month period beginning July 1, 1988, 10 days, and
"(ii) with respect to claims received in the 12-month period beginning October 1, 1988, 14 days."
1990—Subsec. (f).
1989—Subsec. (c)(1).
Subsec. (c)(2)(C).
Subsec. (k).
1988—Subsec. (j)(2).
Subsec. (k).
1987—Subsec. (c)(1).
Subsec. (c)(2)(C).
Subsec. (c)(3).
Subsec. (f).
Subsec. (j).
1986—Subsec. (a).
Subsec. (c).
1984—Subsec. (c).
Subsec. (e)(4).
Subsec. (f).
1982—Subsec. (e)(5).
1980—Subsec. (e)(2).
Subsec. (e)(4).
1977—Subsec. (a).
Subsec. (b).
Subsecs. (e), (f).
Subsec. (g).
Subsecs. (h), (i).
1972—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 2003 Amendment
Amendment by section 911(b) of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1994 Amendment
Effective Date of 1993 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by section 203(f) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
"(A) The amendment made by subsection (a) [amending this section] shall apply with respect to claims received on or after January 1, 1988.
"(B) The amendment made by subsection (b) [amending this section] shall apply with respect to reconsiderations requested on or after October 1, 1988."
"(A) The amendment made by paragraph (1) [amending this section] shall apply to claims received on or after the date of enactment of this Act [Dec. 22, 1987].
"(B) The Secretary of Health and Human Services shall provide for such timely amendments to agreements under section 1816 [
Effective Date of 1986 Amendment
"(1) Except as provided in paragraph (2), the amendments made by subsections (b) and (c) [amending this section and
"(2) Sections 1816(c)(2)(C)) [sic] and 1842(c)(2)(C) of the Social Security Act [
"(3) The Secretary of Health and Human Services shall provide for such timely amendments to agreements under section 1816 of the Social Security Act [
Amendment by section 9352(a)(2) of
Effective Date of 1984 Amendment
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1977 Amendment
"(c) The amendment made by paragraphs (2) and (3) of subsection (a) [amending this section] to the extent that they require application of standards, criteria, and procedures developed under section 1816(f) of the Social Security Act [
"(d) Except as provided in subsection (c), the amendment made by subsection (a)(2) [amending this section] shall apply to agreements entered into or renewed on or after the date of enactment of this Act [Oct. 25, 1977]."
Effective Date of 1972 Amendment
Amendment by
Advisory Committee on Medicare Home Health Claims
Amendments to Agreements and Contracts Necessary To Implement Section 4031(a) of Pub. L. 100–203
Prohibition of Policies Other Than as Provided by Section 4031 of Pub. L. 100–203 Intended To Slow Down Medicare Payments; Budget Considerations
Amendments to Agreements and Contracts Necessary To Implement Section 4032(a), (b) of Pub. L. 100–203
Replacement of Agency, Organization, or Carrier Processing Medicare Claims; Number of Agreements and Contracts Authorized for Fiscal Years 1985 Through 1993
[
[
Audit and Medical Claims Review
Developmental Date for Standards, Criteria, and Procedures Pursuant to Subsec. (f) of This Section
§1395i. Federal Hospital Insurance Trust Fund
(a) Creation; deposits; transfers from Treasury
There is hereby created on the books of the Treasury of the United States a trust fund to be known as the "Federal Hospital Insurance Trust Fund" (hereinafter in this section referred to as the "Trust Fund"). The Trust Fund shall consist of such gifts and bequests as may be made as provided in
(1) the taxes imposed by sections 3101(b) and 3111(b) of the Internal Revenue Code of 1986 with respect to wages reported to the Secretary of the Treasury or his delegate pursuant to subtitle F of such Code after December 31, 1965, as determined by the Secretary of the Treasury by applying the applicable rates of tax under such sections to such wages, which wages shall be certified by the Commissioner of Social Security on the basis of records of wages established and maintained by the Commissioner of Social Security in accordance with such reports; and
(2) the taxes imposed by section 1401(b) of the Internal Revenue Code of 1986 with respect to self-employment income reported to the Secretary of the Treasury or his delegate on tax returns under subtitle F of such Code, as determined by the Secretary of the Treasury by applying the applicable rate of tax under such section to such self-employment income, which self-employment income shall be certified by the Commissioner of Social Security on the basis of records of self-employment established and maintained by the Commissioner of Social Security in accordance with such returns.
The amounts appropriated by the preceding sentence shall be transferred from time to time from the general fund in the Treasury to the Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in the preceding sentence, paid to or deposited into the Treasury; and proper adjustments shall be made in amounts subsequently transferred to the extent prior estimates were in excess of or were less than the taxes specified in such sentence.
(b) Board of Trustees; composition; meetings; duties
With respect to the Trust Fund, there is hereby created a body to be known as the Board of Trustees of the Trust Fund (hereinafter in this section referred to as the "Board of Trustees") composed of the Commissioner of Social Security, the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, all ex officio, and of two members of the public (both of whom may not be from the same political party), who shall be nominated by the President for a term of four years and subject to confirmation by the Senate. A member of the Board of Trustees serving as a member of the public and nominated and confirmed to fill a vacancy occurring during a term shall be nominated and confirmed only for the remainder of such term. An individual nominated and confirmed as a member of the public may serve in such position after the expiration of such member's term until the earlier of the time at which the member's successor takes office or the time at which a report of the Board is first issued under paragraph (2) after the expiration of the member's term. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees (hereinafter in this section referred to as the "Managing Trustee"). The Administrator of the Centers for Medicare & Medicaid Services shall serve as the Secretary of the Board of Trustees. The Board of Trustees shall meet not less frequently than once each calendar year. It shall be the duty of the Board of Trustees to—
(1) Hold the Trust Fund;
(2) Report to the Congress not later than the first day of April of each year on the operation and status of the Trust Fund during the preceding fiscal year and on its expected operation and status during the current fiscal year and the next 2 fiscal years; Each report provided under paragraph (2) beginning with the report in 2005 shall include the information specified in section 801(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.1
(3) Report immediately to the Congress whenever the Board is of the opinion that the amount of the Trust Fund is unduly small; and
(4) Review the general policies followed in managing the Trust Fund, and recommend changes in such policies, including necessary changes in the provisions of law which govern the way in which the Trust Fund is to be managed.
The report provided for in paragraph (2) shall include a statement of the assets of, and the disbursements made from, the Trust Fund during the preceding fiscal year, an estimate of the expected income to, and disbursements to be made from, the Trust Fund during the current fiscal year and each of the next 2 fiscal years, and a statement of the actuarial status of the Trust Fund. Such report shall also include an actuarial opinion by the Chief Actuary of the Centers for Medicare & Medicaid Services certifying that the techniques and methodologies used are generally accepted within the actuarial profession and that the assumptions and cost estimates used are reasonable. Such report shall be printed as a House document of the session of the Congress to which the report is made. A person serving on the Board of Trustees shall not be considered to be a fiduciary and shall not be personally liable for actions taken in such capacity with respect to the Trust Fund.
(c) Investment of Trust Fund by Managing Trustee
It shall be the duty of the Managing Trustee to invest such portion of the Trust Fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under
(d) Authority of Managing Trustee to sell obligations
Any obligations acquired by the Trust Fund (except public-debt obligations issued exclusively to the Trust Fund) may be sold by the Managing Trustee at the market price, and such public-debt obligations may be redeemed at par plus accrued interest.
(e) Interest on and proceeds from sale or redemption of obligations
The interest on, and the proceeds from the sale or redemption of, any obligations held in the Trust Fund shall be credited to and form a part of the Trust Fund.
(f) Payment of estimated taxes
(1) The Managing Trustee is directed to pay from time to time from the Trust Fund into the Treasury the amount estimated by him as taxes imposed under section 3101(b) which are subject to refund under section 6413(c) of the Internal Revenue Code of 1986 with respect to wages paid after December 31, 1965. Such taxes shall be determined on the basis of the records of wages established and maintained by the Commissioner of Social Security in accordance with the wages reported to the Secretary of the Treasury or his delegate pursuant to subtitle F of the Internal Revenue Code of 1986, and the Commissioner of Social Security shall furnish the Managing Trustee such information as may be required by the Managing Trustee for such purpose. The payments by the Managing Trustee shall be covered into the Treasury as repayments to the account for refunding internal revenue collections.
(2) Repayments made under paragraph (1) shall not be available for expenditures but shall be carried to the surplus fund of the Treasury. If it subsequently appears that the estimates under such paragraph in any particular period were too high or too low, appropriate adjustments shall be made by the Managing Trustee in future payments.
(g) Transfers from other Funds
There shall be transferred periodically (but not less often than once each fiscal year) to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust Fund and from the Federal Disability Insurance Trust Fund amounts equivalent to the amounts not previously so transferred which the Secretary of Health and Human Services shall have certified as overpayments (other than amounts so certified to the Railroad Retirement Board) pursuant to
(h) Payments from Trust Fund amounts certified by Secretary
The Managing Trustee shall also pay from time to time from the Trust Fund such amounts as the Secretary of Health and Human Services certifies are necessary to make the payments provided for by this part, and the payments with respect to administrative expenses in accordance with
(i) Payment of travel expenses for travel within United States; reconsideration interviews and proceedings before administrative law judges
There are authorized to be made available for expenditure out of the Trust Fund such amounts as are required to pay travel expenses, either on an actual cost or commuted basis, to parties, their representatives, and all reasonably necessary witnesses for travel within the United States (as defined in
(j) Loans from other Funds; interest; repayment; report to Congress
(1) If at any time prior to January 1988 the Managing Trustee determines that borrowing authorized under this subsection is appropriate in order to best meet the need for financing the benefit payments from the Federal Hospital Insurance Trust Fund, the Managing Trustee may, subject to paragraph (5), borrow such amounts as he determines to be appropriate from either the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund for transfer to and deposit in the Federal Hospital Insurance Trust Fund.
(2) In any case where a loan has been made to the Federal Hospital Insurance Trust Fund under paragraph (1), there shall be transferred on the last day of each month after such loan is made, from such Trust Fund to the lending Trust Fund, the total interest accrued to such day with respect to the unrepaid balance of such loan at a rate equal to the rate which the lending Trust Fund would earn on the amount involved if the loan were an investment under subsection (c) (even if such an investment would earn interest at a rate different than the rate earned by investments redeemed by the lending fund in order to make the loan).
(3)(A) If in any month after a loan has been made to the Federal Hospital Insurance Trust Fund under paragraph (1), the Managing Trustee determines that the assets of such Trust Fund are sufficient to permit repayment of all or part of any loans made to such Fund under paragraph (1), he shall make such repayments as he determines to be appropriate.
(B)(i) If on the last day of any year after a loan has been made under paragraph (1) by the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund to the Federal Hospital Insurance Trust Fund, the Managing Trustee determines that the Hospital Insurance Trust Fund ratio exceeds 15 percent, he shall transfer from such Trust Fund to the lending trust fund an amount that—
(I) together with any amounts transferred to another lending trust fund under this paragraph for such year, will reduce the Hospital Insurance Trust Fund ratio to 15 percent; and
(II) does not exceed the outstanding balance of such loan.
(ii) Amounts required to be transferred under clause (i) shall be transferred on the last day of the first month of the year succeeding the year in which the determination described in clause (i) is made.
(iii) For purposes of this subparagraph, the term "Hospital Insurance Trust Fund ratio" means, with respect to any calendar year, the ratio of—
(I) the balance in the Federal Hospital Insurance Trust Fund, as of the last day of such calendar year; to
(II) the amount estimated by the Secretary to be the total amount to be paid from the Federal Hospital Insurance Trust Fund during the calendar year following such calendar year (other than payments of interest on, and repayments of, loans from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund under paragraph (1)), and reducing the amount of any transfer to the Railroad Retirement Account by the amount of any transfers into such Trust Fund from the Railroad Retirement Account.
(C)(i) The full amount of all loans made under paragraph (1) (whether made before or after January 1, 1983) shall be repaid at the earliest feasible date and in any event no later than December 31, 1989.
(ii) For the period after December 31, 1987 and before January 1, 1990, the Managing Trustee shall transfer each month from the Federal Hospital Insurance Trust Fund to any Trust Fund that is owed any amount by the Federal Hospital Insurance Trust Fund on a loan made under paragraph (1), an amount not less than an amount equal to (I) the amount owed to such Trust Fund by the Federal Hospital Insurance Trust Fund at the beginning of such month (plus the interest accrued on the outstanding balance of such loan during such month), divided by (II) the number of months elapsing after the preceding month and before January 1990. The Managing Trustee may, during this period, transfer larger amounts than prescribed by the preceding sentence.
(4) The Board of Trustees shall make a timely report to the Congress of any amounts transferred (including interest payments) under this subsection.
(5)(A) No amounts may be loaned by the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund under paragraph (1) during any month if the OASDI trust fund ratio for such month is less than 10 percent.
(B) For purposes of this paragraph, the term "OASDI trust fund ratio" means, with respect to any month, the ratio of—
(i) the combined balance in the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, reduced by the outstanding amount of any loan (including interest thereon) theretofore made to either such Trust Fund from the Federal Hospital Insurance Trust Fund under
(ii) the amount obtained by multiplying by twelve the total amount which (as estimated by the Secretary) will be paid from the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund during the month for which such ratio is to be determined for all purposes authorized by
(k) Health Care Fraud and Abuse Control Account
(1) Establishment
There is hereby established in the Trust Fund an expenditure account to be known as the "Health Care Fraud and Abuse Control Account" (in this subsection referred to as the "Account").
(2) Appropriated amounts to Trust Fund
(A) In general
There are hereby appropriated to the Trust Fund—
(i) such gifts and bequests as may be made as provided in subparagraph (B);
(ii) such amounts as may be deposited in the Trust Fund as provided in sections 242(b) and 249(c) of the Health Insurance Portability and Accountability Act of 1996, and subchapter XI; and
(iii) such amounts as are transferred to the Trust Fund under subparagraph (C).
(B) Authorization to accept gifts
The Trust Fund is authorized to accept on behalf of the United States money gifts and bequests made unconditionally to the Trust Fund, for the benefit of the Account or any activity financed through the Account.
(C) Transfer of amounts
The Managing Trustee shall transfer to the Trust Fund, under rules similar to the rules in section 9601 of the Internal Revenue Code of 1986, an amount equal to the sum of the following:
(i) Criminal fines recovered in cases involving a Federal health care offense (as defined in
(ii) Civil monetary penalties and assessments imposed in health care cases, including amounts recovered under this subchapter and subchapters XI and XIX, and
(iii) Amounts resulting from the forfeiture of property by reason of a Federal health care offense.
(iv) Penalties and damages obtained and otherwise creditable to miscellaneous receipts of the general fund of the Treasury obtained under
(D) Application
Nothing in subparagraph (C)(iii) shall be construed to limit the availability of recoveries and forfeitures obtained under title I of the Employee Retirement Income Security Act of 1974 [
(3) Appropriated amounts to Account for fraud and abuse control program, etc.
(A) Departments of Health and Human Services and Justice
(i) In general
There are hereby appropriated to the Account from the Trust Fund such sums as the Secretary and the Attorney General certify are necessary to carry out the purposes described in subparagraph (C), to be available without further appropriation until expended, in an amount not to exceed—
(I) for fiscal year 1997, $104,000,000;
(II) for each of the fiscal years 1998 through 2003, the limit for the preceding fiscal year, increased by 15 percent;
(III) for each of fiscal years 2004, 2005, and 2006, the limit for fiscal year 2003; and
(IV) for each fiscal year after fiscal year 2006, the limit under this clause for the preceding fiscal year, increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over the previous year.
(ii) Medicare and medicaid activities
For each fiscal year, of the amount appropriated in clause (i), the following amounts shall be available only for the purposes of the activities of the Office of the Inspector General of the Department of Health and Human Services with respect to the programs under this subchapter and subchapter XIX—
(I) for fiscal year 1997, not less than $60,000,000 and not more than $70,000,000;
(II) for fiscal year 1998, not less than $80,000,000 and not more than $90,000,000;
(III) for fiscal year 1999, not less than $90,000,000 and not more than $100,000,000;
(IV) for fiscal year 2000, not less than $110,000,000 and not more than $120,000,000;
(V) for fiscal year 2001, not less than $120,000,000 and not more than $130,000,000;
(VI) for fiscal year 2002, not less than $140,000,000 and not more than $150,000,000;
(VII) for each of fiscal years 2003, 2004, 2005, and 2006, not less than $150,000,000 and not more than $160,000,000;
(VIII) for fiscal year 2007, not less than $160,000,000, increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over the previous year; and
(IX) for each fiscal year after fiscal year 2007, not less than the amount required under this clause for the preceding fiscal year, increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over the previous year.
(B) Federal Bureau of Investigation
There are hereby appropriated from the general fund of the United States Treasury and hereby appropriated to the Account for transfer to the Federal Bureau of Investigation to carry out the purposes described in subparagraph (C), to be available without further appropriation until expended—
(i) for fiscal year 1997, $47,000,000;
(ii) for fiscal year 1998, $56,000,000;
(iii) for fiscal year 1999, $66,000,000;
(iv) for fiscal year 2000, $76,000,000;
(v) for fiscal year 2001, $88,000,000;
(vi) for fiscal year 2002, $101,000,000;
(vii) for each of fiscal years 2003, 2004, 2005, and 2006, $114,000,000; and
(viii) for each fiscal year after fiscal year 2006, the amount to be appropriated under this subparagraph for the preceding fiscal year, increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over the previous year.
(C) Use of funds
The purposes described in this subparagraph are to cover the costs (including equipment, salaries and benefits, and travel and training) of the administration and operation of the health care fraud and abuse control program established under
(i) prosecuting health care matters (through criminal, civil, and administrative proceedings);
(ii) investigations;
(iii) financial and performance audits of health care programs and operations;
(iv) inspections and other evaluations; and
(v) provider and consumer education regarding compliance with the provisions of subchapter XI.
(4) Appropriated amounts to Account for Medicare Integrity Program
(A) In general
There are hereby appropriated to the Account from the Trust Fund for each fiscal year such amounts as are necessary for activities described in paragraph (3)(C) and to carry out the Medicare Integrity Program under
(B) Amounts specified
Subject to subparagraph (C), the amount appropriated under subparagraph (A) for a fiscal year is as follows:
(i) For fiscal year 1997, such amount shall be not less than $430,000,000 and not more than $440,000,000.
(ii) For fiscal year 1998, such amount shall be not less than $490,000,000 and not more than $500,000,000.
(iii) For fiscal year 1999, such amount shall be not less than $550,000,000 and not more than $560,000,000.
(iv) For fiscal year 2000, such amount shall be not less than $620,000,000 and not more than $630,000,000.
(v) For fiscal year 2001, such amount shall be not less than $670,000,000 and not more than $680,000,000.
(vi) For fiscal year 2002, such amount shall be not less than $690,000,000 and not more than $700,000,000.
(vii) For each fiscal year after fiscal year 2002, such amount shall be not less than $710,000,000 and not more than $720,000,000.
(C) Adjustments
The amount appropriated under subparagraph (A) for a fiscal year is increased as follows:
(i) For fiscal year 2006, $100,000,000.
(ii) For each fiscal year after 2010, by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) over the previous year.
(D) Expansion of the Medicare-Medicaid Data Match Program
The amount appropriated under subparagraph (A) for a fiscal year is further increased as follows for purposes of carrying out
(i) $12,000,000 for fiscal year 2006.
(ii) $24,000,000 for fiscal year 2007.
(iii) $36,000,000 for fiscal year 2008.
(iv) $48,000,000 for fiscal year 2009.
(v) $60,000,000 for fiscal year 2010 and each fiscal year thereafter.
(5) Annual report
Not later than January 1, the Secretary and the Attorney General shall submit jointly a report to Congress which identifies—
(A) the amounts appropriated to the Trust Fund for the previous fiscal year under paragraph (2)(A) and the source of such amounts; and
(B) the amounts appropriated from the Trust Fund for such year under paragraph (3) and the justification for the expenditure of such amounts.
(6) GAO report
Not later than June 1, 1998, and January 1 of 2000, 2002, and 2004, the Comptroller General of the United States shall submit a report to Congress which—
(A) identifies—
(i) the amounts appropriated to the Trust Fund for the previous two fiscal years under paragraph (2)(A) and the source of such amounts; and
(ii) the amounts appropriated from the Trust Fund for such fiscal years under paragraph (3) and the justification for the expenditure of such amounts;
(B) identifies any expenditures from the Trust Fund with respect to activities not involving the program under this subchapter;
(C) identifies any savings to the Trust Fund, and any other savings, resulting from expenditures from the Trust Fund; and
(D) analyzes such other aspects of the operation of the Trust Fund as the Comptroller General of the United States considers appropriate.
(7) Additional funding
In addition to the funds otherwise appropriated to the Account from the Trust Fund under paragraphs (3) and (4) and for purposes described in paragraphs (3)(C) and (4)(A), there are hereby appropriated an additional $10,000,000 to such Account from such Trust Fund for each of fiscal years 2011 through 2020. The funds appropriated under this paragraph shall be allocated in the same proportion as the total funding appropriated with respect to paragraphs (3)(A) and (4)(A) was allocated with respect to fiscal year 2010, and shall be available without further appropriation until expended.
(8) Additional funding
(A) In general
In addition to the funds otherwise appropriated to the Account from the Trust Fund under paragraphs (3)(C) and (4)(A) and for purposes described in paragraphs (3)(C) and (4)(A), there are hereby appropriated to such Account from such Trust Fund the following additional amounts:
(i) For fiscal year 2011, $95,000,000.
(ii) For fiscal year 2012, $55,000,000.
(iii) For each of fiscal years 2013 and 2014, $30,000,000.
(iv) For each of fiscal years 2015 and 2016, $20,000,000.
(B) Allocation
The funds appropriated under this paragraph shall be allocated in the same proportion as the total funding appropriated with respect to paragraphs (3)(A) and (4)(A) was allocated with respect to fiscal year 2010, and shall be available without further appropriation until expended.
(Aug. 14, 1935, ch. 531, title XVIII, §1817, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsecs. (a)(1), (2), (f)(1), and (k)(2)(C), is classified generally to Title 26, Internal Revenue Code. Subtitle F of such Code appears at
Section 801(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (b)(2), is section 801(a) of
Sections 242(b) and 249(b) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (k)(2)(A)(ii), are sections 242(b) and 249(b) of
The Employee Retirement Income Security Act of 1974, referred to in subsec. (k)(2)(D), is
Amendments
2010—Subsec. (k)(3)(A)(i)(III).
Subsec. (k)(3)(A)(i)(IV).
Subsec. (k)(3)(A)(i)(V).
Subsec. (k)(3)(A)(ii)(VIII).
Subsec. (k)(3)(A)(ii)(IX).
Subsec. (k)(3)(A)(ii)(X).
Subsec. (k)(3)(B)(vii).
Subsec. (k)(3)(B)(viii).
Subsec. (k)(3)(B)(ix).
Subsec. (k)(4)(A).
Subsec. (k)(4)(C)(ii).
Subsec. (k)(7).
Subsec. (k)(8).
2006—Subsec. (k)(3)(A)(i).
Subsec. (k)(3)(A)(ii)(VI) to (X).
Subsec. (k)(3)(B).
Subsec. (k)(4)(A).
Subsec. (k)(4)(B).
Subsec. (k)(4)(C).
Subsec. (k)(4)(D).
2003—Subsec. (b).
Subsec. (b)(2).
Subsec. (k)(3)(A)(i)(I).
Subsec. (k)(3)(A)(ii).
Subsec. (k)(6)(B).
1999—Subsec. (k)(2)(C)(i).
1997—Subsec. (k)(6).
1996—Subsec. (k).
1994—Subsec. (a).
Subsec. (b).
Subsec. (f)(1).
1990—Subsec. (i).
1989—Subsec. (b).
1988—Subsec. (b).
1986—Subsec. (a)(1), (2).
Subsec. (b).
Subsec. (f)(1).
1984—Subsec. (a).
Subsec. (a)(1), (2).
Subsec. (c).
Subsecs. (f)(1), (g), (h).
1983—Subsec. (a).
Subsec. (b).
Subsec. (j)(1).
Subsec. (j)(2).
Subsec. (j)(3)(A).
Subsec. (j)(5).
1981—Subsec. (j).
1980—Subsec. (i).
1978—Subsec. (b).
1972—Subsec. (a).
1968—Subsec. (b)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1999 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 2354(b)(2) of
Amendment by section 2663(j)(2)(F)(i) of
Effective Date of 1983 Amendment
Amendment by section 141(b) of
Amendment by sections 154(b) and 341(b) of
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by
Restoration of Medicare Trust Funds
"(a)
"(1)
"(2)
"(b)
"(1)
"(2)
"(A) issue to the Trust Fund obligations under
"(i) would have been issued to the Trust Fund if the clerical error involved had not occurred; or
"(ii) were issued to the Trust Fund and were redeemed by reason of the clerical error involved; and
"(B) redeem from the Trust Fund obligations that would have been redeemed from the Trust Fund if the clerical error involved had not occurred.
"(c)
"(d)
"(e)
"(1) the Secretary of the Treasury shall take the actions under subsection (b)(1); and
"(2) the appropriation under subsection (c) shall be made."
Inclusion in Annual Report of Medicare Trustees of Information on Status of Medicare Trust Funds
"(a)
"(1)
"(A) the information described in subsection (b); and
"(B) a determination as to whether there is projected to be excess general revenue medicare funding (as defined in subsection (c)) for the fiscal year in which the report is submitted or for any of the succeeding 6 fiscal years.
"(2)
"(3) 7-
"(b)
"(1)
"(A) Each fiscal year within the 7-fiscal-year reporting period.
"(B) Previous fiscal years and as of 10, 50, and 75 years after such year.
"(2)
"(A) The gross domestic product.
"(B) Private health costs.
"(C) National health expenditures.
"(D) Other appropriate measures.
"(3)
"(4)
"(c)
"(1)
"(A) general revenue medicare funding (as defined in paragraph (2)), expressed as a percentage of total medicare outlays (as defined in paragraph (4)) for the fiscal year; exceeds
"(B) 45 percent.
"(2)
"(A) the total medicare outlays (as defined in paragraph (4)) for the year; minus
"(B) the dedicated medicare financing sources (as defined in paragraph (3)) for the year.
"(3)
"(A)
"(B)
"(C)
"(D)
"(i)
"(ii)
"(iii)
Premiums under clauses (ii) and (iii) shall be determined without regard to any reduction in such premiums attributable to a beneficiary rebate under section 1854(b)(1)(C) of such title [
"(E)
"(4)
"(A) include payments made to plans under part C of title XVIII of the Social Security Act [
"(B) include administrative expenditures made in carrying out title XVIII of such Act [
"(C) offset outlays by the amount of fraud and abuse collections insofar as they are applied or deposited into a medicare trust fund.
"(5)
"(A) the Federal Hospital Insurance Trust Fund established under section 1817 of the Social Security Act (
"(B) the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of such Act (
"(d)
"(1)
"(2)
"(e)
Criminal Fines Deposited in Federal Hospital Insurance Trust Fund
Property Forfeited Deposited in Federal Hospital Insurance Trust Fund
"(1)
"(2)
"(A) the payment, at the discretion of the Attorney General, of any expenses necessary to seize, detain, inventory, safeguard, maintain, advertise, sell, or dispose of property under seizure, detention, or forfeited, or of any other necessary expenses incident to the seizure, detention, forfeiture, or disposal of such property, including payment for—
"(i) contract services;
"(ii) the employment of outside contractors to operate and manage properties or provide other specialized services necessary to dispose of such properties in an effort to maximize the return from such properties; and
"(iii) reimbursement of any Federal, State, or local agency for any expenditures made to perform the functions described in this subparagraph;
"(B) at the discretion of the Attorney General, the payment of awards for information or assistance leading to a civil or criminal forfeiture involving any Federal agency participating in the Health Care Fraud and Abuse Control Account;
"(C) the compromise and payment of valid liens and mortgages against property that has been forfeited, subject to the discretion of the Attorney General to determine the validity of any such lien or mortgage and the amount of payment to be made, and the employment of attorneys and other personnel skilled in State real estate law as necessary;
"(D) payment authorized in connection with remission or mitigation procedures relating to property forfeited; and
"(E) the payment of State and local property taxes on forfeited real property that accrued between the date of the violation giving rise to the forfeiture and the date of the forfeiture order.
"(3)
Due Date for 1983 Report on Operation and Status of Trust Fund
Notwithstanding subsec. (b)(2) of this section, the annual report of the Board of Trustees of the Trust Fund required for calendar year 1983 under this section may be filed at any time not later than forty-five days after Apr. 20, 1983, see section 154(d) of
1 So in original. See 2003 Amendment note below.
§1395i–1. Authorization of appropriations
There are authorized to be appropriated to the Federal Hospital Insurance Trust Fund (established by
(1) payments made or to be made during such fiscal year from such Trust Fund under this part with respect to individuals who are qualified railroad retirement beneficiaries (as defined in section 426(c) 1 of this title) and who are not, and upon filing application for monthly insurance benefits under
(2) the additional administrative expenses resulting or expected to result therefrom, and
(3) any loss of interest to such Trust Fund resulting from the payment of such amounts,
in order to place such Trust Fund in the same position at the end of such fiscal year in which it would have been if the individuals described in paragraph (1) had not been entitled to benefits under this part.
(
Editorial Notes
References in Text
The Railroad Retirement Act of 1937, referred to in par. (1), is act Aug. 29, 1935, ch. 812,
Codification
Section was enacted as part of the Social Security Amendments of 1965 and also as part of the Health Insurance for the Aged Act, and not as part of the Social Security Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Effective Date
"(1) The amendments made by the preceding provisions of this section [enacting this section and
"(2) The requirement referred to in paragraph (1) shall be deemed to have been met with respect to any calendar year if, as of the October 1 immediately preceding such calendar year, the Railroad Retirement Tax Act [
1 See References in Text note below.
§1395i–1a. Repealed. Pub. L. 101–234, title I, §102(a), Dec. 13, 1989, 103 Stat. 1980
Section, act Aug. 14, 1935, ch. 531, title XVIII, §1817A, as added July 1, 1988,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1990, see section 102(d)(1) of
Adjustments for Interest Lost Due to Delay of Transfers to Reserve Fund During 1989
§1395i–2. Hospital insurance benefits for uninsured elderly individuals not otherwise eligible
(a) Individuals eligible to enroll
Every individual who—
(1) has attained the age of 65,
(2) is enrolled under part B of this subchapter,
(3) is a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment under this section, and
(4) is not otherwise entitled to benefits under this part,
shall be eligible to enroll in the insurance program established by this part. Except as otherwise provided, any reference to an individual entitled to benefits under this part includes an individual entitled to benefits under this part pursuant to an enrollment under this section or
(b) Time, manner, and form of enrollment
An individual may enroll under this section only in such manner and form as may be prescribed in regulations, and only during an enrollment period prescribed in or under this section.
(c) Period of enrollment; scope of coverage
The provisions of
(1) individuals who meet the conditions of subsection (a)(1), (3), and (4) on or before the last day of the seventh month after October 1972 may enroll under this part and (if not already so enrolled) may also enroll under part B during an initial general enrollment period which shall begin on the first day of the second month which begins after October 30, 1972, and shall end on the last day of the tenth month after October 1972;
(2) in the case of an individual who first meets the conditions of eligibility under this section on or after the first day of the eighth month after October 1972, the initial enrollment period shall begin on the first day of the third month before the month in which he first becomes eligible and shall end 7 months later;
(3) in the case of an individual who enrolls pursuant to paragraph (1) of this subsection, entitlement to benefits shall begin on—
(A) the first day of the second month after the month in which he enrolls,
(B) July 1, 1973, or
(C) the first day of the first month in which he meets the requirements of subsection (a),
whichever is the latest;
(4) an individual's entitlement under this section shall terminate with the month before the first month in which he becomes eligible for hospital insurance benefits under
(5) termination of coverage for supplementary medical insurance shall result in simultaneous termination of hospital insurance benefits for uninsured individuals who are not otherwise entitled to benefits under this chapter;
(6) any percent increase effected under
(7) an individual who meets the conditions of subsection (a) may enroll under this part during a special enrollment period that includes any month during any part of which the individual is enrolled under
(8) in the case of an individual who enrolls during a special enrollment period under paragraph (7)—
(A) in any month of the special enrollment period in which the individual is at any time enrolled under
(B) in any other month of the special enrollment period, the coverage period shall begin on the first day of the month following the month in which the individual so enrolls; and
(9) in applying the provisions of
(d) Monthly premiums
(1) The Secretary shall, during September of each year (beginning with 1988), estimate the monthly actuarial rate for months in the succeeding year. Such actuarial rate shall be one-twelfth of the amount which the Secretary estimates (on an average, per capita basis) is equal to 100 percent of the benefits and administrative costs which will be payable from the Federal Hospital Insurance Trust Fund for services performed and related administrative costs incurred in the succeeding year with respect to individuals age 65 and over who will be entitled to benefits under this part during that year.
(2) The Secretary shall, during September of each year 1 determine and promulgate the dollar amount which shall be applicable for premiums for months occurring in the following year. Subject to paragraphs (4) and (5), the amount of an individual's monthly premium under this section shall be equal to the monthly actuarial rate determined under paragraph (1) for that following year. Any amount determined under the preceding sentence which is not a multiple of $1 shall be rounded to the nearest multiple of $1 (or, if it is a multiple of 50 cents but not a multiple of $1, to the next higher multiple of $1).
(3) Whenever the Secretary promulgates the dollar amount which shall be applicable as the monthly premium under this section, he shall, at the time such promulgation is announced, issue a public statement setting forth the actuarial assumptions and bases employed by him in arriving at the amount of an adequate actuarial rate for individuals 65 and older as provided in paragraph (1).
(4)(A) In the case of an individual described in subparagraph (B), the monthly premium for a month shall be reduced by the applicable reduction percent specified in the following table:
For a month in: | The applicable reduction percent is: |
---|---|
1994 | 25 percent |
1995 | 30 percent |
1996 | 35 percent |
1997 | 40 percent |
1998 or subsequent year | 45 percent. |
(B) An individual described in this subparagraph with respect to a month is an individual who establishes to the satisfaction of the Secretary that, as of the last day of the previous month, the individual—
(i) had at least 30 quarters of coverage under subchapter II;
(ii) was married (and had been married for the previous 1-year period) to an individual who had at least 30 quarters of coverage under such subchapter;
(iii) had been married to an individual for a period of at least 1 year (at the time of such individual's death) if at such time the individual had at least 30 quarters of coverage under such subchapter; or
(iv) is divorced from an individual and had been married to the individual for a period of at least 10 years (at the time of the divorce) if at such time the individual had at least 30 quarters of coverage under such subchapter.
(5)(A) The amount of the monthly premium shall be zero in the case of an individual who is a person described in subparagraph (B) for a month, if—
(i) the individual's premium under this section for the month is not (and will not be) paid for, in whole or in part, by a State (under subchapter XIX or otherwise), a political subdivision of a State, or an agency or instrumentality of one or more States or political subdivisions thereof; and
(ii) in each of 84 months before such month, the individual was enrolled in this part under this section and the payment of the individual's premium under this section for the month was not paid for, in whole or in part, by a State (under subchapter XIX or otherwise), a political subdivision of a State, or an agency or instrumentality of one or more States or political subdivisions thereof.
(B) A person described in this subparagraph for a month is a person who establishes to the satisfaction of the Secretary that, as of the last day of the previous month—
(i)(I) the person was receiving cash benefits under a qualified State or local government retirement system (as defined in subparagraph (C)) on the basis of the person's employment in one or more positions covered under any such system, and (II) the person would have at least 40 quarters of coverage under subchapter II if remuneration for medicare qualified government employment (as defined in paragraph (1) of
(ii)(I) the person was married (and had been married for the previous 1-year period) to an individual who is described in clause (i), or (II) the person met the requirement of clause (i)(II) and was married (and had been married for the previous 1-year period) to an individual described in clause (i)(I);
(iii) the person had been married to an individual for a period of at least 1 year (at the time of such individual's death) if (I) the individual was described in clause (i) at the time of the individual's death, or (II) the person met the requirement of clause (i)(II) and the individual was described in clause (i)(I) at the time of the individual's death; or
(iv) the person is divorced from an individual and had been married to the individual for a period of at least 10 years (at the time of the divorce) if (I) the individual was described in clause (i) at the time of the divorce, or (II) the person met the requirement of clause (i)(II) and the individual was described in clause (i)(I) at the time of the divorce.
(C) For purposes of subparagraph (B)(i)(I), the term "qualified State or local government retirement system" means a retirement system that—
(i) is established or maintained by a State or political subdivision thereof, or an agency or instrumentality of one or more States or political subdivisions thereof;
(ii) covers positions of some or all employees of such a State, subdivision, agency, or instrumentality; and
(iii) does not adjust cash retirement benefits based on eligibility for a reduction in premium under this paragraph.
(6)(A) In the case where a State, a political subdivision of a State, or an agency or instrumentality of a State or political subdivision thereof determines to pay, for the life of each individual, the monthly premiums due under paragraph (1) on behalf of each of the individuals in a qualified State or local government retiree group who meets the conditions of subsection (a), the amount of any increase otherwise applicable under
(B) For purposes of this paragraph, the term "qualified State or local government retiree group" means all of the individuals who retire prior to a specified date that is before January 1, 2002, from employment in one or more occupations or other broad classes of employees of—
(i) the State;
(ii) a political subdivision of the State; or
(iii) an agency or instrumentality of the State or political subdivision of the State.
(e) Contract or other arrangement for payment of monthly premiums
Payment of the monthly premiums on behalf of any individual who meets the conditions of subsection (a) may be made by any public or private agency or organization under a contract or other arrangement entered into between it and the Secretary if the Secretary determines that payment of such premiums under such contract or arrangement is administratively feasible.
(f) Deposit of amounts into Treasury
Amounts paid to the Secretary for coverage under this section shall be deposited in the Treasury to the credit of the Federal Hospital Insurance Trust Fund.
(g) Buy-in under this part for qualified medicare beneficiaries
(1) The Secretary shall, at the request of a State made after 1989, enter into a modification of an agreement entered into with the State pursuant to
(2)(A) Except as provided in subparagraph (B), the provisions of subsections (c), (d), (e), and (f) of
(B) For purposes of this subsection,
(Aug. 14, 1935, ch. 531, title XVIII, §1818, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (d)(6)(A), is classified generally to Title 26, Internal Revenue Code.
Amendments
2022—Subsec. (c).
2003—Subsec. (a).
Subsec. (d)(6)(A).
Subsec. (g)(2)(B).
2000—Subsec. (c)(6).
Subsec. (d)(6).
1997—Subsec. (d)(2).
Subsec. (d)(5).
1993—Subsec. (d)(2).
Subsec. (d)(4).
1990—Subsec. (c)(7) to (9).
Subsec. (g)(2)(B).
1989—
Subsec. (g).
1988—Subsec. (c)(4) to (7).
Subsec. (d).
"(1) The monthly premium of each individual for each month in his coverage period before July 1974 shall be $33.
"(2) The Secretary shall, during the next to last calendar quarter of each year determine and promulgate the dollar amount (whether or not such dollar amount was applicable for premiums for any prior month) which shall be applicable for premiums for months occurring in the following calendar year. Such amount shall be equal to $33, multiplied by the ratio of (A) the inpatient hospital deductible for that following calendar year, as promulgated under
Subsec. (d)(1).
1987—Subsec. (c)(4) to (7).
1986—Subsec. (c)(7).
1984—Subsec. (c).
Subsec. (c)(1).
Subsec. (d)(2).
1983—Subsec. (c).
Subsec. (d)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Effective Date of 1993 Amendment
Effective Date of 1990 Amendment
Effective Date of 1989 Amendment
Amendment by section 6012(a)(1) of
Effective Date of 1988 Amendment
Amendment by
Amendment by section 103 of
Except as specifically provided in section 411 of
Effective Date of 1986 Amendment
"(1) The amendment made by subsection (a)(3) [amending this section] shall apply to premiums paid for months beginning with July 1986.
"(2) In applying that amendment, months (before, during, or after April 1986) in which an individual was required to pay a premium increased under the section that was so amended shall be taken into account in determining the month in which the premium will no longer be subject to an increase under that section as so amended."
Effective Date of 1984 Amendment
Amendment by section 2315(e) of
Amendment by section 2354(b)(3), (4) of
Effective Date of 1983 Amendment; Transitional Rule
Amendment by
Special Enrollment Provisions for Merchant Seamen
"(a) Any individual who—
"(1) was entitled to medical, surgical, and dental treatment and hospitalization under section 322(a) of the Public Health Service Act [
"(2) as of September 30, 1981, was eligible under section 1818(a) or section 1836 of the Social Security Act [
may enroll (if not otherwise enrolled) in the respective program during the period beginning on the first day of the first month beginning at least 20 days after the date of the enactment of this Act [Sept. 3, 1982] and ending on December 31, 1982.
"(b)(1) The coverage period under the respective program of an individual who enrolls under subsection (a) shall begin—
"(A) on the first day of the month following the month in which the individual enrolls, or
"(B) on October 1, 1981, if the individual files a request for this subparagraph to apply and pays the monthly premiums for the months so covered.
"(2) The coverage period under the respective program of an individual described in subsection (a) who enrolled in the respective program before the enrollment period described in that subsection shall be retroactively extended to October 1, 1981, if the individual files a request before January 1, 1983, for such retroactive extension and pays the monthly premiums for the months so covered.
"(c)(1) For purposes of section 1839(d) of the Social Security Act [
"(2) Paragraph (1) shall not apply to an individual—
"(A) if the individual has enrolled in the insurance program before March 10, 1981, unless the enrollment was terminated solely because the individual lost eligibility to be so enrolled, or
"(B) unless the individual applies for the benefit of such paragraph before January 1, 1983.
"(d)(1) The Secretary of Health and Human Services, beginning as soon as possible but not later than 30 days after the date of the enactment of this Act [Sept. 3, 1982], shall provide for the dissemination of information—
"(A) to unions and other associations representing or assisting seamen,
"(B) to offices enrolling individuals under the respective programs, and
"(C) to such other entities and in such a manner as will effectively inform individuals eligible for benefits under this section,
concerning the special benefits provided under this section.
"(2) An individual may establish that the individual was entitled at a date to medical, surgical, and dental treatment and hospitalization under section 322(a) of the Public Health Service Act [
"(A) documentation relating to the status under which the individual was provided care in (or under arrangements with) a Public Health Service facility on that date,
"(B) the individual's seamen's papers covering that date, or
"(C) such other reasonable documentation as the Secretary may require."
1 So in original. Probably should be followed by a comma.
§1395i–2a. Hospital insurance benefits for disabled individuals who have exhausted other entitlement
(a) Eligibility
Every individual who—
(1) has not attained the age of 65;
(2)(A) has been entitled to benefits under this part under
(B)(i) continues to have the disabling physical or mental impairment on the basis of which the individual was found to be under a disability or to be a disabled qualified railroad retirement beneficiary, or (ii) is blind (within the meaning of
(C) whose entitlement under
(3) is not otherwise entitled to benefits under this part,
shall be eligible to enroll in the insurance program established by this part.
(b) Enrollment
(1) An individual may enroll under this section only in such manner and form as may be prescribed in regulations, and only during an enrollment period prescribed in or under this section.
(2) The individual's initial enrollment period shall begin with the month in which the individual receives notice that the individual's entitlement to benefits under
(3) There shall be a general enrollment period during the period beginning on January 1 and ending on March 31 of each year (beginning with 1990).
(c) Coverage period
(1) The period (in this subsection referred to as a "coverage period") during which an individual is entitled to benefits under the insurance program under this part shall begin on whichever of the following is the latest:
(A) In the case of an individual who enrolls under subsection (b)(2) before the month in which the individual first satisfies subsection (a), the first day of such month.
(B) In the case of an individual who enrolls under subsection (b)(2) in the month in which the individual first satisfies subsection (a), the first day of the month following the month in which the individual so enrolls.
(C) In the case of an individual who enrolls under subsection (b)(2) in the month following the month in which the individual first satisfies subsection (a), the first day of the second month following the month in which the individual so enrolls.
(D) In the case of an individual who enrolls under subsection (b)(2) more than one month following the month in which the individual first satisfies subsection (a), the first day of the third month following the month in which the individual so enrolls.
(E) In the case of an individual who enrolls under subsection (b)(3), the July 1 following the month in which the individual so enrolls.
(2) An individual's coverage period under this section shall continue until the individual's enrollment is terminated as follows:
(A) As of the month following the month in which the Secretary provides notice to the individual that the individual no longer meets the condition described in subsection (a)(2)(B).
(B) As of the month following the month in which the individual files notice that the individual no longer wishes to participate in the insurance program established by this part.
(C) As of the month before the first month in which the individual becomes eligible for hospital insurance benefits under
(D) As of a date, determined under regulations of the Secretary, for nonpayment of premiums.
The regulations under subparagraph (D) may provide a grace period of not longer than 90 days, which may be extended to not to exceed 180 days in any case where the Secretary determines that there was good cause for failure to pay the overdue premiums within such 90-day period. Termination of coverage under this section shall result in simultaneous termination of any coverage affected under any other part of this subchapter.
(3) The provisions of subsections (h), (i), and (m) of
(d) Payment of premiums
(1)(A) Premiums for enrollment under this section shall be paid to the Secretary at such times, and in such manner, as the Secretary shall by regulations prescribe, and shall be deposited in the Treasury to the credit of the Federal Hospital Insurance Trust Fund.
(B)(i) Subject to clause (ii), such premiums shall be payable for the period commencing with the first month of an individual's coverage period and ending with the month in which the individual dies or, if earlier, in which the individual's coverage period terminates.
(ii) Such premiums shall not be payable for any month in which the individual is eligible for benefits under this part pursuant to
(2) The provisions of subsections (d) through (f) of
(Aug. 14, 1935, ch. 531, title XVIII, §1818A, as added
Editorial Notes
Amendments
2020—Subsec. (c)(3).
1990—Subsec. (d)(1)(A).
Subsec. (d)(1)(C).
Statutory Notes and Related Subsidiaries
Effective Date
§1395i–3. Requirements for, and assuring quality of care in, skilled nursing facilities
(a) "Skilled nursing facility" defined
In this subchapter, the term "skilled nursing facility" means an institution (or a distinct part of an institution) which—
(1) is primarily engaged in providing to residents—
(A) skilled nursing care and related services for residents who require medical or nursing care, or
(B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons,
and is not primarily for the care and treatment of mental diseases;
(2) has in effect a transfer agreement (meeting the requirements of
(3) meets the requirements for a skilled nursing facility described in subsections (b), (c), and (d) of this section.
(b) Requirements relating to provision of services
(1) Quality of life
(A) In general
A skilled nursing facility must care for its residents in such a manner and in such an environment as will promote maintenance or enhancement of the quality of life of each resident.
(B) Quality assessment and assurance
A skilled nursing facility must maintain a quality assessment and assurance committee, consisting of the director of nursing services, a physician designated by the facility, and at least 3 other members of the facility's staff, which (i) meets at least quarterly to identify issues with respect to which quality assessment and assurance activities are necessary and (ii) develops and implements appropriate plans of action to correct identified quality deficiencies. A State or the Secretary may not require disclosure of the records of such committee except insofar as such disclosure is related to the compliance of such committee with the requirements of this subparagraph.
(2) Scope of services and activities under plan of care
A skilled nursing facility must provide services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident, in accordance with a written plan of care which—
(A) describes the medical, nursing, and psychosocial needs of the resident and how such needs will be met;
(B) is initially prepared, with the participation to the extent practicable of the resident or the resident's family or legal representative, by a team which includes the resident's attending physician and a registered professional nurse with responsibility for the resident; and
(C) is periodically reviewed and revised by such team after each assessment under paragraph (3).
(3) Residents' assessment
(A) Requirement
A skilled nursing facility must conduct a comprehensive, accurate, standardized, reproducible assessment of each resident's functional capacity, which assessment—
(i) describes the resident's capability to perform daily life functions and significant impairments in functional capacity;
(ii) is based on a uniform minimum data set specified by the Secretary under subsection (f)(6)(A);
(iii) uses an instrument which is specified by the State under subsection (e)(5); and
(iv) includes the identification of medical problems.
(B) Certification
(i) In general
Each such assessment must be conducted or coordinated (with the appropriate participation of health professionals) by a registered professional nurse who signs and certifies the completion of the assessment. Each individual who completes a portion of such an assessment shall sign and certify as to the accuracy of that portion of the assessment.
(ii) Penalty for falsification
(I) An individual who willfully and knowingly certifies under clause (i) a material and false statement in a resident assessment is subject to a civil money penalty of not more than $1,000 with respect to each assessment.
(II) An individual who willfully and knowingly causes another individual to certify under clause (i) a material and false statement in a resident assessment is subject to a civil money penalty of not more than $5,000 with respect to each assessment.
(III) The provisions of
(iii) Use of independent assessors
If a State determines, under a survey under subsection (g) or otherwise, that there has been a knowing and willful certification of false assessments under this paragraph, the State may require (for a period specified by the State) that resident assessments under this paragraph be conducted and certified by individuals who are independent of the facility and who are approved by the State.
(C) Frequency
(i) In general
Subject to the timeframes prescribed by the Secretary under
(I) promptly upon (but no later than 14 days after the date of) admission for each individual admitted on or after October 1, 1990, and by not later than January 1, 1991, for each resident of the facility on that date;
(II) promptly after a significant change in the resident's physical or mental condition; and
(III) in no case less often than once every 12 months.
(ii) Resident review
The skilled nursing facility must examine each resident no less frequently than once every 3 months and, as appropriate, revise the resident's assessment to assure the continuing accuracy of the assessment.
(D) Use
The results of such an assessment shall be used in developing, reviewing, and revising the resident's plan of care under paragraph (2).
(E) Coordination
Such assessments shall be coordinated with any State-required preadmission screening program to the maximum extent practicable in order to avoid duplicative testing and effort.
(4) Provision of services and activities
(A) In general
To the extent needed to fulfill all plans of care described in paragraph (2), a skilled nursing facility must provide, directly or under arrangements (or, with respect to dental services, under agreements) with others for the provision of—
(i) nursing services and specialized rehabilitative services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident;
(ii) medically-related social services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident;
(iii) pharmaceutical services (including procedures that assure the accurate acquiring, receiving, dispensing, and administering of all drugs and biologicals) to meet the needs of each resident;
(iv) dietary services that assure that the meals meet the daily nutritional and special dietary needs of each resident;
(v) an on-going program, directed by a qualified professional, of activities designed to meet the interests and the physical, mental, and psychosocial well-being of each resident;
(vi) routine and emergency dental services to meet the needs of each resident; and
(vii) treatment and services required by mentally ill and mentally retarded residents not otherwise provided or arranged for (or required to be provided or arranged for) by the State.
The services provided or arranged by the facility must meet professional standards of quality. Nothing in clause (vi) shall be construed as requiring a facility to provide or arrange for dental services described in that clause without additional charge.
(B) Qualified persons providing services
Services described in clauses (i), (ii), (iii), (iv), and (vi) of subparagraph (A) must be provided by qualified persons in accordance with each resident's written plan of care.
(C) Required nursing care
(i) In general
Except as provided in clause (ii), a skilled nursing facility must provide 24-hour licensed nursing service which is sufficient to meet nursing needs of its residents and must use the services of a registered professional nurse at least 8 consecutive hours a day, 7 days a week.
(ii) Exception
To the extent that clause (i) may be deemed to require that a skilled nursing facility engage the services of a registered professional nurse for more than 40 hours a week, the Secretary is authorized to waive such requirement if the Secretary finds that—
(I) the facility is located in a rural area and the supply of skilled nursing facility services in such area is not sufficient to meet the needs of individuals residing therein,
(II) the facility has one full-time registered professional nurse who is regularly on duty at such facility 40 hours a week,
(III) the facility either has only patients whose physicians have indicated (through physicians' orders or admission notes) that each such patient does not require the services of a registered nurse or a physician for a 48-hour period, or has made arrangements for a registered professional nurse or a physician to spend such time at such facility as may be indicated as necessary by the physician to provide necessary skilled nursing services on days when the regular full-time registered professional nurse is not on duty,
(IV) the Secretary provides notice of the waiver to the State long-term care ombudsman (established under section 307(a)(12) 1 of the Older Americans Act of 1965) and the protection and advocacy system in the State for the mentally ill and the mentally retarded, and
(V) the facility that is granted such a waiver notifies residents of the facility (or, where appropriate, the guardians or legal representatives of such residents) and members of their immediate families of the waiver.
A waiver under this subparagraph shall be subject to annual renewal.
(5) Required training of nurse aides
(A) In general
(i) Except as provided in clause (ii), a skilled nursing facility must not use on a full-time basis any individual as a nurse aide in the facility on or after October 1, 1990 for more than 4 months unless the individual—
(I) has completed a training and competency evaluation program, or a competency evaluation program, approved by the State under subsection (e)(1)(A), and
(II) is competent to provide nursing or nursing-related services.
(ii) A skilled nursing facility must not use on a temporary, per diem, leased, or on any basis other than as a permanent employee any individual as a nurse aide in the facility on or after January 1, 1991, unless the individual meets the requirements described in clause (i).
(B) Offering competency evaluation programs for current employees
A skilled nursing facility must provide, for individuals used as a nurse aide 2 by the facility as of January 1, 1990, for a competency evaluation program approved by the State under subsection (e)(1) and such preparation as may be necessary for the individual to complete such a program by October 1, 1990.
(C) Competency
The skilled nursing facility must not permit an individual, other than in a training and competency evaluation program approved by the State, to serve as a nurse aide or provide services of a type for which the individual has not demonstrated competency and must not use such an individual as a nurse aide unless the facility has inquired of any State registry established under subsection (e)(2)(A) that the facility believes will include information concerning the individual.
(D) Re-training required
For purposes of subparagraph (A), if, since an individual's most recent completion of a training and competency evaluation program, there has been a continuous period of 24 consecutive months during none of which the individual performed nursing or nursing-related services for monetary compensation, such individual shall complete a new training and competency evaluation program or a new competency evaluation program.
(E) Regular in-service education
The skilled nursing facility must provide such regular performance review and regular in-service education as assures that individuals used as nurse aides are competent to perform services as nurse aides, including training for individuals providing nursing and nursing-related services to residents with cognitive impairments.
(F) "Nurse aide" defined
In this paragraph, the term "nurse aide" means any individual providing nursing or nursing-related services to residents in a skilled nursing facility, but does not include an individual—
(i) who is a licensed health professional (as defined in subparagraph (G)) or a registered dietician, or
(ii) who volunteers to provide such services without monetary compensation.
Such term includes an individual who provides such services through an agency or under a contract with the facility.
(G) "Licensed health professional" defined
In this paragraph, the term "licensed health professional" means a physician, physician assistant, nurse practitioner, physical, speech, or occupational therapist, physical or occupational therapy assistant, registered professional nurse, licensed practical nurse, licensed or certified social worker, registered respiratory therapist, or certified respiratory therapy technician.
(6) Physician supervision and clinical records
A skilled nursing facility must—
(A) require that the medical care of every resident be provided under the supervision of a physician;
(B) provide for having a physician available to furnish necessary medical care in case of emergency; and
(C) maintain clinical records on all residents, which records include the plans of care (described in paragraph (2)) and the residents' assessments (described in paragraph (3)).
(7) Required social services
In the case of a skilled nursing facility with more than 120 beds, the facility must have at least one social worker (with at least a bachelor's degree in social work or similar professional qualifications) employed full-time to provide or assure the provision of social services.
(8) Information on nurse staffing
(A) In general
A skilled nursing facility shall post daily for each shift the current number of licensed and unlicensed nursing staff directly responsible for resident care in the facility. The information shall be displayed in a uniform manner (as specified by the Secretary) and in a clearly visible place.
(B) Publication of data
A skilled nursing facility shall, upon request, make available to the public the nursing staff data described in subparagraph (A).
(c) Requirements relating to residents' rights
(1) General rights
(A) Specified rights
A skilled nursing facility must protect and promote the rights of each resident, including each of the following rights:
(i) Free choice
The right to choose a personal attending physician, to be fully informed in advance about care and treatment, to be fully informed in advance of any changes in care or treatment that may affect the resident's well-being, and (except with respect to a resident adjudged incompetent) to participate in planning care and treatment or changes in care and treatment.
(ii) Free from restraints
The right to be free from physical or mental abuse, corporal punishment, involuntary seclusion, and any physical or chemical restraints imposed for purposes of discipline or convenience and not required to treat the resident's medical symptoms. Restraints may only be imposed—
(I) to ensure the physical safety of the resident or other residents, and
(II) only upon the written order of a physician that specifies the duration and circumstances under which the restraints are to be used (except in emergency circumstances specified by the Secretary until such an order could reasonably be obtained).
(iii) Privacy
The right to privacy with regard to accommodations, medical treatment, written and telephonic communications, visits, and meetings of family and of resident groups.
(iv) Confidentiality
The right to confidentiality of personal and clinical records and to access to current clinical records of the resident upon request by the resident or the resident's legal representative, within 24 hours (excluding hours occurring during a weekend or holiday) after making such a request.
(v) Accommodation of needs
The right—
(I) to reside and receive services with reasonable accommodation of individual needs and preferences, except where the health or safety of the individual or other residents would be endangered, and
(II) to receive notice before the room or roommate of the resident in the facility is changed.
(vi) Grievances
The right to voice grievances with respect to treatment or care that is (or fails to be) furnished, without discrimination or reprisal for voicing the grievances and the right to prompt efforts by the facility to resolve grievances the resident may have, including those with respect to the behavior of other residents.
(vii) Participation in resident and family groups
The right of the resident to organize and participate in resident groups in the facility and the right of the resident's family to meet in the facility with the families of other residents in the facility.
(viii) Participation in other activities
The right of the resident to participate in social, religious, and community activities that do not interfere with the rights of other residents in the facility.
(ix) Examination of survey results
The right to examine, upon reasonable request, the results of the most recent survey of the facility conducted by the Secretary or a State with respect to the facility and any plan of correction in effect with respect to the facility.
(x) Refusal of certain transfers
The right to refuse a transfer to another room within the facility, if a purpose of the transfer is to relocate the resident from a portion of the facility that is a skilled nursing facility (for purposes of this subchapter) to a portion of the facility that is not such a skilled nursing facility.
(xi) Other rights
Any other right established by the Secretary.
Clause (iii) shall not be construed as requiring the provision of a private room. A resident's exercise of a right to refuse transfer under clause (x) shall not affect the resident's eligibility or entitlement to benefits under this subchapter or to medical assistance under subchapter XIX of this chapter.
(B) Notice of rights and services
A skilled nursing facility must—
(i) inform each resident, orally and in writing at the time of admission to the facility, of the resident's legal rights during the stay at the facility;
(ii) make available to each resident, upon reasonable request, a written statement of such rights (which statement is updated upon changes in such rights) including the notice (if any) of the State developed under
(iii) inform each other resident, in writing before or at the time of admission and periodically during the resident's stay, of services available in the facility and of related charges for such services, including any charges for services not covered under this subchapter or by the facility's basic per diem charge.
The written description of legal rights under this subparagraph shall include a description of the protection of personal funds under paragraph (6) and a statement that a resident may file a complaint with a State survey and certification agency respecting resident abuse and neglect and misappropriation of resident property in the facility.
(C) Rights of incompetent residents
In the case of a resident adjudged incompetent under the laws of a State, the rights of the resident under this subchapter shall devolve upon, and, to the extent judged necessary by a court of competent jurisdiction, be exercised by, the person appointed under State law to act on the resident's behalf.
(D) Use of psychopharmacologic drugs
Psychopharmacologic drugs may be administered only on the orders of a physician and only as part of a plan (included in the written plan of care described in paragraph (2)) designed to eliminate or modify the symptoms for which the drugs are prescribed and only if, at least annually, an independent, external consultant reviews the appropriateness of the drug plan of each resident receiving such drugs. In determining whether such a consultant is qualified to conduct reviews under the preceding sentence, the Secretary shall take into account the needs of nursing facilities under this subchapter to have access to the services of such a consultant on a timely basis.
(E) Information respecting advance directives
A skilled nursing facility must comply with the requirement of
(2) Transfer and discharge rights
(A) In general
A skilled nursing facility must permit each resident to remain in the facility and must not transfer or discharge the resident from the facility unless—
(i) the transfer or discharge is necessary to meet the resident's welfare and the resident's welfare cannot be met in the facility;
(ii) the transfer or discharge is appropriate because the resident's health has improved sufficiently so the resident no longer needs the services provided by the facility;
(iii) the safety of individuals in the facility is endangered;
(iv) the health of individuals in the facility would otherwise be endangered;
(v) the resident has failed, after reasonable and appropriate notice, to pay (or to have paid under this subchapter or subchapter XIX on the resident's behalf) for a stay at the facility; or
(vi) the facility ceases to operate.
In each of the cases described in clauses (i) through (v), the basis for the transfer or discharge must be documented in the resident's clinical record. In the cases described in clauses (i) and (ii), the documentation must be made by the resident's physician, and in the cases described in clauses (iii) and (iv) the documentation must be made by a physician.
(B) Pre-transfer and pre-discharge notice
(i) In general
Before effecting a transfer or discharge of a resident, a skilled nursing facility must—
(I) notify the resident (and, if known, a family member of the resident or legal representative) of the transfer or discharge and the reasons therefor,
(II) record the reasons in the resident's clinical record (including any documentation required under subparagraph (A)), and
(III) include in the notice the items described in clause (iii).
(ii) Timing of notice
The notice under clause (i)(I) must be made at least 30 days in advance of the resident's transfer or discharge except—
(I) in a case described in clause (iii) or (iv) of subparagraph (A);
(II) in a case described in clause (ii) of subparagraph (A), where the resident's health improves sufficiently to allow a more immediate transfer or discharge;
(III) in a case described in clause (i) of subparagraph (A), where a more immediate transfer or discharge is necessitated by the resident's urgent medical needs; or
(IV) in a case where a resident has not resided in the facility for 30 days.
In the case of such exceptions, notice must be given as many days before the date of the transfer or discharge as is practicable.
(iii) Items included in notice
Each notice under clause (i) must include—
(I) for transfers or discharges effected on or after October 1, 1990, notice of the resident's right to appeal the transfer or discharge under the State process established under subsection (e)(3); and
(II) the name, mailing address, and telephone number of the State long-term care ombudsman (established under title III or VII of the Older Americans Act of 1965 [
(C) Orientation
A skilled nursing facility must provide sufficient preparation and orientation to residents to ensure safe and orderly transfer or discharge from the facility.
(3) Access and visitation rights
A skilled nursing facility must—
(A) permit immediate access to any resident by any representative of the Secretary, by any representative of the State, by an ombudsman described in paragraph (2)(B)(iii)(II), or by the resident's individual physician;
(B) permit immediate access to a resident, subject to the resident's right to deny or withdraw consent at any time, by immediate family or other relatives of the resident;
(C) permit immediate access to a resident, subject to reasonable restrictions and the resident's right to deny or withdraw consent at any time, by others who are visiting with the consent of the resident;
(D) permit reasonable access to a resident by any entity or individual that provides health, social, legal, or other services to the resident, subject to the resident's right to deny or withdraw consent at any time; and
(E) permit representatives of the State ombudsman (described in paragraph (2)(B)(iii)(II)), with the permission of the resident (or the resident's legal representative) and consistent with State law, to examine a resident's clinical records.
(4) Equal access to quality care
A skilled nursing facility must establish and maintain identical policies and practices regarding transfer, discharge, and covered services under this subchapter for all individuals regardless of source of payment.
(5) Admissions policy
(A) Admissions
With respect to admissions practices, a skilled nursing facility must—
(i)(I) not require individuals applying to reside or residing in the facility to waive their rights to benefits under this subchapter or under a State plan under subchapter XIX, (II) not require oral or written assurance that such individuals are not eligible for, or will not apply for, benefits under this subchapter or such a State plan, and (III) prominently display in the facility and provide to such individuals written information about how to apply for and use such benefits and how to receive refunds for previous payments covered by such benefits; and
(ii) not require a third party guarantee of payment to the facility as a condition of admission (or expedited admission) to, or continued stay in, the facility.
(B) Construction
(i) No preemption of stricter standards
Subparagraph (A) shall not be construed as preventing States or political subdivisions therein from prohibiting, under State or local law, the discrimination against individuals who are entitled to medical assistance under this subchapter with respect to admissions practices of skilled nursing facilities.
(ii) Contracts with legal representatives
Subparagraph (A)(ii) shall not be construed as preventing a facility from requiring an individual, who has legal access to a resident's income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident's income or resources for such care.
(6) Protection of resident funds
(A) In general
The skilled nursing facility—
(i) may not require residents to deposit their personal funds with the facility, and
(ii) upon the written authorization of the resident, must hold, safeguard, and account for such personal funds under a system established and maintained by the facility in accordance with this paragraph.
(B) Management of personal funds
Upon written authorization of a resident under subparagraph (A)(ii), the facility must manage and account for the personal funds of the resident deposited with the facility as follows:
(i) Deposit
The facility must deposit any amount of personal funds in excess of $100 with respect to a resident in an interest bearing account (or accounts) that is separate from any of the facility's operating accounts and credits 3 all interest earned on such separate account to such account. With respect to any other personal funds, the facility must maintain such funds in a non-interest bearing account or petty cash fund.
(ii) Accounting and records
The facility must assure a full and complete separate accounting of each such resident's personal funds, maintain a written record of all financial transactions involving the personal funds of a resident deposited with the facility, and afford the resident (or a legal representative of the resident) reasonable access to such record.
(iii) Conveyance upon death
Upon the death of a resident with such an account, the facility must convey promptly the resident's personal funds (and a final accounting of such funds) to the individual administering the resident's estate.
(C) Assurance of financial security
The facility must purchase a surety bond, or otherwise provide assurance satisfactory to the Secretary, to assure the security of all personal funds of residents deposited with the facility.
(D) Limitation on charges to personal funds
The facility may not impose a charge against the personal funds of a resident for any item or service for which payment is made under this subchapter or subchapter XIX.
(d) Requirements relating to administration and other matters
(1) Administration
(A) In general
A skilled nursing facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident (consistent with requirements established under subsection (f)(5)).
(B) Required notices
If a change occurs in—
(i) the persons with an ownership or control interest (as defined in
(ii) the persons who are officers, directors, agents, or managing employees (as defined in
(iii) the corporation, association, or other company responsible for the management of the facility, or
(iv) the individual who is the administrator or director of nursing of the facility,
the skilled nursing facility must provide notice to the State agency responsible for the licensing of the facility, at the time of the change, of the change and of the identity of each new person, company, or individual described in the respective clause.
(C) 4 Skilled nursing facility administrator
The administrator of a skilled nursing facility must meet standards established by the Secretary under subsection (f)(4).
(C) 4 Availability of survey, certification, and complaint investigation reports
A skilled nursing facility must—
(i) have reports with respect to any surveys, certifications, and complaint investigations made respecting the facility during the 3 preceding years available for any individual to review upon request; and
(ii) post notice of the availability of such reports in areas of the facility that are prominent and accessible to the public.
The facility shall not make available under clause (i) identifying information about complainants or residents.
(2) Licensing and Life Safety Code
(A) Licensing
A skilled nursing facility must be licensed under applicable State and local law.
(B) Life Safety Code
A skilled nursing facility must meet such provisions of such edition (as specified by the Secretary in regulation) of the Life Safety Code of the National Fire Protection Association as are applicable to nursing homes; except that—
(i) the Secretary may waive, for such periods as he deems appropriate, specific provisions of such Code which if rigidly applied would result in unreasonable hardship upon a facility, but only if such waiver would not adversely affect the health and safety of residents or personnel, and
(ii) the provisions of such Code shall not apply in any State if the Secretary finds that in such State there is in effect a fire and safety code, imposed by State law, which adequately protects residents of and personnel in skilled nursing facilities.
(3) Sanitary and infection control and physical environment
A skilled nursing facility must—
(A) establish and maintain an infection control program designed to provide a safe, sanitary, and comfortable environment in which residents reside and to help prevent the development and transmission of disease and infection, and
(B) be designed, constructed, equipped, and maintained in a manner to protect the health and safety of residents, personnel, and the general public.
(4) Miscellaneous
(A) Compliance with Federal, State, and local laws and professional standards
A skilled nursing facility must operate and provide services in compliance with all applicable Federal, State, and local laws and regulations (including the requirements of
(B) Other
A skilled nursing facility must meet such other requirements relating to the health, safety, and well-being of residents or relating to the physical facilities thereof as the Secretary may find necessary.
(e) State requirements relating to skilled nursing facility requirements
The requirements, referred to in
(1) Specification and review of nurse aide training and competency evaluation programs and of nurse aide competency evaluation programs
The State must—
(A) by not later than January 1, 1989, specify those training and competency evaluation programs, and those competency evaluation programs, that the State approves for purposes of subsection (b)(5) and that meet the requirements established under subsection (f)(2), and
(B) by not later than January 1, 1990, provide for the review and reapproval of such programs, at a frequency and using a methodology consistent with the requirements established under subsection (f)(2)(A)(iii).
The failure of the Secretary to establish requirements under subsection (f)(2) shall not relieve any State of its responsibility under this paragraph.
(2) Nurse aide registry
(A) In general
By not later than January 1, 1989, the State shall establish and maintain a registry of all individuals who have satisfactorily completed a nurse aide training and competency evaluation program, or a nurse aide competency evaluation program, approved under paragraph (1) in the State, or any individual described in subsection (f)(2)(B)(ii) or in subparagraph (B), (C), or (D) of section 6901(b)(4) of the Omnibus Budget Reconciliation Act of 1989.
(B) Information in registry
The registry under subparagraph (A) shall provide (in accordance with regulations of the Secretary) for the inclusion of specific documented findings by a State under subsection (g)(1)(C) of resident neglect or abuse or misappropriation of resident property involving an individual listed in the registry, as well as any brief statement of the individual disputing the findings, but shall not include any allegations of resident abuse or neglect or misappropriation of resident property that are not specifically documented by the State under such subsection. The State shall make available to the public information in the registry. In the case of inquiries to the registry concerning an individual listed in the registry, any information disclosed concerning such a finding shall also include disclosure of any such statement in the registry relating to the finding or a clear and accurate summary of such a statement.
(C) Prohibition against charges
A State may not impose any charges on a nurse aide relating to the registry established and maintained under subparagraph (A).
(3) State appeals process for transfers and discharges
The State, for transfers and discharges from skilled nursing facilities effected on or after October 1, 1989, must provide for a fair mechanism for hearing appeals on transfers and discharges of residents of such facilities. Such mechanism must meet the guidelines established by the Secretary under subsection (f)(3); but the failure of the Secretary to establish such guidelines shall not relieve any State of its responsibility to provide for such a fair mechanism.
(4) Skilled nursing facility administrator standards
By not later than January 1, 1990, the State must have implemented and enforced the skilled nursing facility administrator standards developed under subsection (f)(4) respecting the qualification of administrators of skilled nursing facilities.
(5) Specification of resident assessment instrument
Effective July 1, 1990, the State shall specify the instrument to be used by nursing facilities in the State in complying with the requirement of subsection (b)(3)(A)(iii). Such instrument shall be—
(A) one of the instruments designated under subsection (f)(6)(B), or
(B) an instrument which the Secretary has approved as being consistent with the minimum data set of core elements, common definitions, and utilization guidelines specified by the Secretary under subsection (f)(6)(A).
(f) Responsibilities of Secretary relating to skilled nursing facility requirements
(1) General responsibility
It is the duty and responsibility of the Secretary to assure that requirements which govern the provision of care in skilled nursing facilities under this subchapter, and the enforcement of such requirements, are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys.
(2) Requirements for nurse aide training and competency evaluation programs and for nurse aide competency evaluation programs
(A) In general
For purposes of subsections (b)(5) and (e)(1)(A), the Secretary shall establish, by not later than September 1, 1988—
(i) requirements for the approval of nurse aide training and competency evaluation programs, including requirements relating to (I) the areas to be covered in such a program (including at least basic nursing skills, personal care skills, recognition of mental health and social service needs, care of cognitively impaired residents, basic restorative services, and residents' rights) and content of the curriculum (including, in the case of initial training and, if the Secretary determines appropriate, in the case of ongoing training, dementia management training, and patient abuse prevention training,5 (II) minimum hours of initial and ongoing training and retraining (including not less than 75 hours in the case of initial training), (III) qualifications of instructors, and (IV) procedures for determination of competency;
(ii) requirements for the approval of nurse aide competency evaluation programs, including requirement relating to the areas to be covered in such a program, including at least basic nursing skills, personal care skills, recognition of mental health and social service needs, care of cognitively impaired residents, basic restorative services, residents' rights, and procedures for determination of competency;
(iii) requirements respecting the minimum frequency and methodology to be used by a State in reviewing such programs' compliance with the requirements for such programs; and
(iv) requirements, under both such programs, that—
(I) provide procedures for determining competency that permit a nurse aide, at the nurse aide's option, to establish competency through procedures or methods other than the passing of a written examination and to have the competency evaluation conducted at the nursing facility at which the aide is (or will be) employed (unless the facility is described in subparagraph (B)(iii)(I)),
(II) prohibit the imposition on a nurse aide who is employed by (or who has received an offer of employment from) a facility on the date on which the aide begins either such program of any charges (including any charges for textbooks and other required course materials and any charges for the competency evaluation) for either such program, and
(III) in the case of a nurse aide not described in subclause (II) who is employed by (or who has received an offer of employment from) a facility not later than 12 months after completing either such program, the State shall provide for the reimbursement of costs incurred in completing such program on a prorata 6 basis during the period in which the nurse aide is so employed.
(B) Approval of certain programs
Such requirements—
(i) may permit approval of programs offered by or in facilities (subject to clause (iii)), as well as outside facilities (including employee organizations), and of programs in effect on December 22, 1987;
(ii) shall permit a State to find that an individual who has completed (before July 1, 1989) a nurse aide training and competency evaluation program shall be deemed to have completed such a program approved under subsection (b)(5) if the State determines that, at the time the program was offered, the program met the requirements for approval under such paragraph; and
(iii) subject to subparagraphs (C) and (D), shall prohibit approval of such a program—
(I) offered by or in a skilled nursing facility which, within the previous 2 years—
(a) has operated under a waiver under subsection (b)(4)(C)(ii)(II);
(b) has been subject to an extended (or partial extended) survey under subsection (g)(2)(B)(i) or
(c) has been assessed a civil money penalty described in subsection (h)(2)(B)(ii) or
(II) offered by or in a skilled nursing facility unless the State makes the determination, upon an individual's completion of the program, that the individual is competent to provide nursing and nursing-related services in skilled nursing facilities.
A State may not delegate (through subcontract or otherwise) its responsibility under clause (iii)(II) to the skilled nursing facility.
(C) Waiver authorized
Clause (iii)(I) of subparagraph (B) shall not apply to a program offered in (but not by) a nursing facility (or skilled nursing facility for purposes of this subchapter) in a State if the State—
(i) determines that there is no other such program offered within a reasonable distance of the facility,
(ii) assures, through an oversight effort, that an adequate environment exists for operating the program in the facility, and
(iii) provides notice of such determination and assurances to the State long-term care ombudsman.
(D) Waiver of disapproval of nurse-aide training programs
Upon application of a nursing facility, the Secretary may waive the application of subparagraph (B)(iii)(I)(c) if the imposition of the civil monetary penalty was not related to the quality of care provided to residents of the facility. Nothing in this subparagraph shall be construed as eliminating any requirement upon a facility to pay a civil monetary penalty described in the preceding sentence.
(3) Federal guidelines for State appeals process for transfers and discharges
For purposes of subsections (c)(2)(B)(iii)(I) and (e)(3), by not later than October 1, 1988, the Secretary shall establish guidelines for minimum standards which State appeals processes under subsection (e)(3) must meet to provide a fair mechanism for hearing appeals on transfers and discharges of residents from skilled nursing facilities.
(4) Secretarial standards for qualification of administrators
For purposes of subsections (d)(1)(C) and (e)(4), the Secretary shall develop, by not later than March 1, 1989, standards to be applied in assuring the qualifications of administrators of skilled nursing facilities.
(5) Criteria for administration
The Secretary shall establish criteria for assessing a skilled nursing facility's compliance with the requirement of subsection (d)(1) with respect to—
(A) its governing body and management,
(B) agreements with hospitals regarding transfers of residents to and from the hospitals and to and from other skilled nursing facilities,
(C) disaster preparedness,
(D) direction of medical care by a physician,
(E) laboratory and radiological services,
(F) clinical records, and
(G) resident and advocate participation.
(6) Specification of resident assessment data set and instruments
The Secretary shall—
(A) not later than January 1, 1989, specify a minimum data set of core elements and common definitions for use by nursing facilities in conducting the assessments required under subsection (b)(3), and establish guidelines for utilization of the data set; and
(B) by not later than April 1, 1990, designate one or more instruments which are consistent with the specification made under subparagraph (A) and which a State may specify under subsection (e)(5)(A) for use by nursing facilities in complying with the requirements of subsection (b)(3)(A)(iii).
(7) List of items and services furnished in skilled nursing facilities not chargeable to the personal funds of a resident
(A) Regulations required
Pursuant to the requirement of section 21(b) of the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977, the Secretary shall issue regulations, on or before the first day of the seventh month to begin after December 22, 1987, that define those costs which may be charged to the personal funds of residents in skilled nursing facilities who are individuals receiving benefits under this part and those costs which are to be included in the reasonable cost (or other payment amount) under this subchapter for extended care services.
(B) Rule if failure to publish regulations
If the Secretary does not issue the regulations under subparagraph (A) on or before the date required in such subparagraph, in the case of a resident of a skilled nursing facility who is eligible to receive benefits under this part, the costs which may not be charged to the personal funds of such resident (and for which payment is considered to be made under this subchapter) shall include, at a minimum, the costs for routine personal hygiene items and services furnished by the facility.
(8) Special focus facility program
(A) In general
The Secretary shall conduct a special focus facility program for enforcement of requirements for skilled nursing facilities that the Secretary has identified as having substantially failed to meet applicable requirement 7 of this chapter.
(B) Periodic surveys
Under such program the Secretary shall conduct surveys of each facility in the program not less than once every 6 months.
(g) Survey and certification process
(1) State and Federal responsibility
(A) In general
Pursuant to an agreement under
(B) Educational program
Each State shall conduct periodic educational programs for the staff and residents (and their representatives) of skilled nursing facilities in order to present current regulations, procedures, and policies under this section.
(C) Investigation of allegations of resident neglect and abuse and misappropriation of resident property
The State shall provide, through the agency responsible for surveys and certification of nursing facilities under this subsection, for a process for the receipt and timely review and investigation of allegations of neglect and abuse and misappropriation of resident property by a nurse aide of a resident in a nursing facility or by another individual used by the facility in providing services to such a resident. The State shall, after providing the individual involved with a written notice of the allegations (including a statement of the availability of a hearing for the individual to rebut the allegations) and the opportunity for a hearing on the record, make a written finding as to the accuracy of the allegations. If the State finds that a nurse aide has neglected or abused a resident or misappropriated resident property in a facility, the State shall notify the nurse aide and the registry of such finding. If the State finds that any other individual used by the facility has neglected or abused a resident or misappropriated resident property in a facility, the State shall notify the appropriate licensure authority. A State shall not make a finding that an individual has neglected a resident if the individual demonstrates that such neglect was caused by factors beyond the control of the individual.
(D) Removal of name from nurse aide registry
(i) In general
In the case of a finding of neglect under subparagraph (C), the State shall establish a procedure to permit a nurse aide to petition the State to have his or her name removed from the registry upon a determination by the State that—
(I) the employment and personal history of the nurse aide does not reflect a pattern of abusive behavior or neglect; and
(II) the neglect involved in the original finding was a singular occurrence.
(ii) Timing of determination
In no case shall a determination on a petition submitted under clause (i) be made prior to the expiration of the 1-year period beginning on the date on which the name of the petitioner was added to the registry under subparagraph (C).
(E) Construction
The failure of the Secretary to issue regulations to carry out this subsection shall not relieve a State of its responsibility under this subsection.
(2) Surveys
(A) Standard survey
(i) In general
Each skilled nursing facility shall be subject to a standard survey, to be conducted without any prior notice to the facility. Any individual who notifies (or causes to be notified) a skilled nursing facility of the time or date on which such a survey is scheduled to be conducted is subject to a civil money penalty of not to exceed $2,000. The provisions of
(ii) Contents
Each standard survey shall include, for a case-mix stratified sample of residents—
(I) a survey of the quality of care furnished, as measured by indicators of medical, nursing, and rehabilitative care, dietary and nutrition services, activities and social participation, and sanitation, infection control, and the physical environment,
(II) written plans of care provided under subsection (b)(2) and an audit of the residents' assessments under subsection (b)(3) to determine the accuracy of such assessments and the adequacy of such plans of care, and
(III) a review of compliance with residents' rights under subsection (c).
(iii) Frequency
(I) In general
Each skilled nursing facility shall be subject to a standard survey not later than 15 months after the date of the previous standard survey conducted under this subparagraph. The Statewide average interval between standard surveys of skilled nursing facilities under this subsection shall not exceed 12 months.
(II) Special surveys
If not otherwise conducted under subclause (I), a standard survey (or an abbreviated standard survey) may be conducted within 2 months of any change of ownership, administration, management of a skilled nursing facility, or the director of nursing in order to determine whether the change has resulted in any decline in the quality of care furnished in the facility.
(B) Extended surveys
(i) In general
Each skilled nursing facility which is found, under a standard survey, to have provided substandard quality of care shall be subject to an extended survey. Any other facility may, at the Secretary's or State's discretion, be subject to such an extended survey (or a partial extended survey).
(ii) Timing
The extended survey shall be conducted immediately after the standard survey (or, if not practicable, not later than 2 weeks after the date of completion of the standard survey).
(iii) Contents
In such an extended survey, the survey team shall review and identify the policies and procedures which produced such substandard quality of care and shall determine whether the facility has complied with all the requirements described in subsections (b), (c), and (d). Such review shall include an expansion of the size of the sample of residents' assessments reviewed and a review of the staffing, of in-service training, and, if appropriate, of contracts with consultants.
(iv) Construction
Nothing in this paragraph shall be construed as requiring an extended or partial extended survey as a prerequisite to imposing a sanction against a facility under subsection (h) on the basis of findings in a standard survey.
(C) Survey protocol
Standard and extended surveys shall be conducted—
(i) based upon a protocol which the Secretary has developed, tested, and validated by not later than January 1, 1990, and
(ii) by individuals, of a survey team, who meet such minimum qualifications as the Secretary establishes by not later than such date.
The failure of the Secretary to develop, test, or validate such protocols or to establish such minimum qualifications shall not relieve any State of its responsibility (or the Secretary of the Secretary's responsibility) to conduct surveys under this subsection.
(D) Consistency of surveys
Each State and the Secretary shall implement programs to measure and reduce inconsistency in the application of survey results among surveyors.
(E) Survey teams
(i) In general
Surveys under this subsection shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse).
(ii) Prohibition of conflicts of interest
A State may not use as a member of a survey team under this subsection an individual who is serving (or has served within the previous 2 years) as a member of the staff of, or as a consultant to, the facility surveyed respecting compliance with the requirements of subsections (b), (c), and (d), or who has a personal or familial financial interest in the facility being surveyed.
(iii) Training
The Secretary shall provide for the comprehensive training of State and Federal surveyors in the conduct of standard and extended surveys under this subsection, including the auditing of resident assessments and plans of care. No individual shall serve as a member of a survey team unless the individual has successfully completed a training and testing program in survey and certification techniques that has been approved by the Secretary.
(3) Validation surveys
(A) In general
The Secretary shall conduct onsite surveys of a representative sample of skilled nursing facilities in each State, within 2 months of the date of surveys conducted under paragraph (2) by the State, in a sufficient number to allow inferences about the adequacies of each State's surveys conducted under paragraph (2). In conducting such surveys, the Secretary shall use the same survey protocols as the State is required to use under paragraph (2). If the State has determined that an individual skilled nursing facility meets the requirements of subsections (b), (c), and (d), but the Secretary determines that the facility does not meet such requirements, the Secretary's determination as to the facility's noncompliance with such requirements is binding and supersedes that of the State survey.
(B) Scope
With respect to each State, the Secretary shall conduct surveys under subparagraph (A) each year with respect to at least 5 percent of the number of skilled nursing facilities surveyed by the State in the year, but in no case less than 5 skilled nursing facilities in the State.
(C) Remedies for substandard performance
If the Secretary finds, on the basis of such surveys, that a State has failed to perform surveys as required under paragraph (2) or that a State's survey and certification performance otherwise is not adequate, the Secretary shall provide for an appropriate remedy, which may include the training of survey teams in the State.
(D) Special surveys of compliance
Where the Secretary has reason to question the compliance of a skilled nursing facility with any of the requirements of subsections (b), (c), and (d), the Secretary may conduct a survey of the facility and, on the basis of that survey, make independent and binding determinations concerning the extent to which the skilled nursing facility meets such requirements.
(4) Investigation of complaints and monitoring compliance
Each State shall maintain procedures and adequate staff to—
(A) investigate complaints of violations of requirements by skilled nursing facilities, and
(B) monitor, on-site, on a regular, as needed basis, a skilled nursing facility's compliance with the requirements of subsections (b), (c), and (d), if—
(i) the facility has been found not to be in compliance with such requirements and is in the process of correcting deficiencies to achieve such compliance;
(ii) the facility was previously found not to be in compliance with such requirements, has corrected deficiencies to achieve such compliance, and verification of continued compliance is indicated; or
(iii) the State has reason to question the compliance of the facility with such requirements.
A State may maintain and utilize a specialized team (including an attorney, an auditor, and appropriate health care professionals) for the purpose of identifying, surveying, gathering and preserving evidence, and carrying out appropriate enforcement actions against substandard skilled nursing facilities.
(5) Disclosure of results of inspections and activities
(A) Public information
Each State, and the Secretary, shall make available to the public—
(i) information respecting all surveys and certifications made respecting skilled nursing facilities, including statements of deficiencies, within 14 calendar days after such information is made available to those facilities, and approved plans of correction,
(ii) copies of cost reports of such facilities filed under this subchapter or subchapter XIX,
(iii) copies of statements of ownership under
(iv) information disclosed under
(B) Notice to ombudsman
Each State shall notify the State long-term care ombudsman (established under title III or VII of the Older Americans Act of 1965 [
(C) Notice to physicians and skilled nursing facility administrator licensing board
If a State finds that a skilled nursing facility has provided substandard quality of care, the State shall notify—
(i) the attending physician of each resident with respect to which such finding is made, and
(ii) the State board responsible for the licensing of the skilled nursing facility administrator at the facility.
(D) Access to fraud control units
Each State shall provide its State medicaid fraud and abuse control unit (established under
(E) Submission of survey and certification information to the Secretary
In order to improve the timeliness of information made available to the public under subparagraph (A) and provided on the Nursing Home Compare Medicare website under subsection (i), each State shall submit information respecting any survey or certification made respecting a skilled nursing facility (including any enforcement actions taken by the State) to the Secretary not later than the date on which the State sends such information to the facility. The Secretary shall use the information submitted under the preceding sentence to update the information provided on the Nursing Home Compare Medicare website as expeditiously as practicable but not less frequently than quarterly.
(h) Enforcement process
(1) In general
If a State finds, on the basis of a standard, extended, or partial extended survey under subsection (g)(2) or otherwise, that a skilled nursing facility no longer meets a requirement of subsection (b), (c), or (d), and further finds that the facility's deficiencies—
(A) immediately jeopardize the health or safety of its residents, the State shall recommend to the Secretary that the Secretary take such action as described in paragraph (2)(A)(i); or
(B) do not immediately jeopardize the health or safety of its residents, the State may recommend to the Secretary that the Secretary take such action as described in paragraph (2)(A)(ii).
If a State finds that a skilled nursing facility meets the requirements of subsections (b), (c), and (d), but, as of a previous period, did not meet such requirements, the State may recommend a civil money penalty under paragraph (2)(B)(ii) for the days in which it finds that the facility was not in compliance with such requirements.
(2) Secretarial authority
(A) In general
With respect to any skilled nursing facility in a State, if the Secretary finds, or pursuant to a recommendation of the State under paragraph (1) finds, that a skilled nursing facility no longer meets a requirement of subsection (b), (c), (d), or (e), and further finds that the facility's deficiencies—
(i) immediately jeopardize the health or safety of its residents, the Secretary shall take immediate action to remove the jeopardy and correct the deficiencies through the remedy specified in subparagraph (B)(iii), or terminate the facility's participation under this subchapter and may provide, in addition, for one or more of the other remedies described in subparagraph (B); or
(ii) do not immediately jeopardize the health or safety of its residents, the Secretary may impose any of the remedies described in subparagraph (B).
Nothing in this subparagraph shall be construed as restricting the remedies available to the Secretary to remedy a skilled nursing facility's deficiencies. If the Secretary finds, or pursuant to the recommendation of the State under paragraph (1) finds, that a skilled nursing facility meets such requirements but, as of a previous period, did not meet such requirements, the Secretary may provide for a civil money penalty under subparagraph (B)(ii) for the days on which he finds that the facility was not in compliance with such requirements.
(B) Specified remedies
The Secretary may take the following actions with respect to a finding that a facility has not met an applicable requirement:
(i) Denial of payment
The Secretary may deny any further payments under this subchapter with respect to all individuals entitled to benefits under this subchapter in the facility or with respect to such individuals admitted to the facility after the effective date of the finding.
(ii) Authority with respect to civil money penalties
(I) In general
Subject to subclause (II), the Secretary may impose a civil money penalty in an amount not to exceed $10,000 for each day of noncompliance. The provisions of
(II) Reduction of civil money penalties in certain circumstances
Subject to subclause (III), in the case where a facility self-reports and promptly corrects a deficiency for which a penalty was imposed under this clause not later than 10 calendar days after the date of such imposition, the Secretary may reduce the amount of the penalty imposed by not more than 50 percent.
(III) Prohibitions on reduction for certain deficiencies
(aa) Repeat deficiencies
The Secretary may not reduce the amount of a penalty under subclause (II) if the Secretary had reduced a penalty imposed on the facility in the preceding year under such subclause with respect to a repeat deficiency.
(bb) Certain other deficiencies
The Secretary may not reduce the amount of a penalty under subclause (II) if the penalty is imposed on the facility for a deficiency that is found to result in a pattern of harm or widespread harm, immediately jeopardizes the health or safety of a resident or residents of the facility, or results in the death of a resident of the facility.
(IV) Collection of civil money penalties
In the case of a civil money penalty imposed under this clause, the Secretary shall issue regulations that—
(aa) subject to item (cc), not later than 30 days after the imposition of the penalty, provide for the facility to have the opportunity to participate in an independent informal dispute resolution process which generates a written record prior to the collection of such penalty;
(bb) in the case where the penalty is imposed for each day of noncompliance, provide that a penalty may not be imposed for any day during the period beginning on the initial day of the imposition of the penalty and ending on the day on which the informal dispute resolution process under item (aa) is completed;
(cc) may provide for the collection of such civil money penalty and the placement of such amounts collected in an escrow account under the direction of the Secretary on the earlier of the date on which the informal dispute resolution process under item (aa) is completed or the date that is 90 days after the date of the imposition of the penalty;
(dd) may provide that such amounts collected are kept in such account pending the resolution of any subsequent appeals;
(ee) in the case where the facility successfully appeals the penalty, may provide for the return of such amounts collected (plus interest) to the facility; and
(ff) in the case where all such appeals are unsuccessful, may provide that some portion of such amounts collected may be used to support activities that benefit residents, including assistance to support and protect residents of a facility that closes (voluntarily or involuntarily) or is decertified (including offsetting costs of relocating residents to home and community-based settings or another facility), projects that support resident and family councils and other consumer involvement in assuring quality care in facilities, and facility improvement initiatives approved by the Secretary (including joint training of facility staff and surveyors, technical assistance for facilities implementing quality assurance programs, the appointment of temporary management firms, and other activities approved by the Secretary).
(iii) Appointment of temporary management
In consultation with the State, the Secretary may appoint temporary management to oversee the operation of the facility and to assure the health and safety of the facility's residents, where there is a need for temporary management while—
(I) there is an orderly closure of the facility, or
(II) improvements are made in order to bring the facility into compliance with all the requirements of subsections (b), (c), and (d).
The temporary management under this clause shall not be terminated under subclause (II) until the Secretary has determined that the facility has the management capability to ensure continued compliance with all the requirements of subsections (b), (c), and (d).
The Secretary shall specify criteria, as to when and how each of such remedies is to be applied, the amounts of any fines, and the severity of each of these remedies, to be used in the imposition of such remedies. Such criteria shall be designed so as to minimize the time between the identification of violations and final imposition of the remedies and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies. In addition, the Secretary may provide for other specified remedies, such as directed plans of correction.
(C) Continuation of payments pending remediation
The Secretary may continue payments, over a period of not longer than 6 months after the effective date of the findings, under this subchapter with respect to a skilled nursing facility not in compliance with a requirement of subsection (b), (c), or (d), if—
(i) the State survey agency finds that it is more appropriate to take alternative action to assure compliance of the facility with the requirements than to terminate the certification of the facility,
(ii) the State has submitted a plan and timetable for corrective action to the Secretary for approval and the Secretary approves the plan of corrective action, and
(iii) the facility agrees to repay to the Federal Government payments received under this subparagraph if the corrective action is not taken in accordance with the approved plan and timetable.
The Secretary shall establish guidelines for approval of corrective actions requested by States under this subparagraph.
(D) Assuring prompt compliance
If a skilled nursing facility has not complied with any of the requirements of subsections (b), (c), and (d), within 3 months after the date the facility is found to be out of compliance with such requirements, the Secretary shall impose the remedy described in subparagraph (B)(i) for all individuals who are admitted to the facility after such date.
(E) Repeated noncompliance
In the case of a skilled nursing facility which, on 3 consecutive standard surveys conducted under subsection (g)(2), has been found to have provided substandard quality of care, the Secretary shall (regardless of what other remedies are provided)—
(i) impose the remedy described in subparagraph (B)(i), and
(ii) monitor the facility under subsection (g)(4)(B),
until the facility has demonstrated, to the satisfaction of the Secretary, that it is in compliance with the requirements of subsections (b), (c), and (d), and that it will remain in compliance with such requirements.
(3) Effective period of denial of payment
A finding to deny payment under this subsection shall terminate when the Secretary finds that the facility is in substantial compliance with all the requirements of subsections (b), (c), and (d).
(4) Immediate termination of participation for facility where Secretary finds noncompliance and immediate jeopardy
If the Secretary finds that a skilled nursing facility has not met a requirement of subsection (b), (c), or (d), and finds that the failure immediately jeopardizes the health or safety of its residents, the Secretary shall take immediate action to remove the jeopardy and correct the deficiencies through the remedy specified in paragraph (2)(B)(iii), or the Secretary, subject to
(5) Construction
The remedies provided under this subsection are in addition to those otherwise available under State or Federal law and shall not be construed as limiting such other remedies, including any remedy available to an individual at common law. The remedies described in clauses (i), (ii)(IV), and (iii) of paragraph (2)(B) may be imposed during the pendency of any hearing.
(6) Sharing of information
Notwithstanding any other provision of law, all information concerning skilled nursing facilities required by this section to be filed with the Secretary or a State agency shall be made available by such facilities to Federal or State employees for purposes consistent with the effective administration of programs established under this subchapter and subchapter XIX, including investigations by State medicaid fraud control units.
(i) Nursing Home Compare website
(1) Inclusion of additional information
(A) In general
The Secretary shall ensure that the Department of Health and Human Services includes, as part of the information provided for comparison of nursing homes on the official Internet website of the Federal Government for Medicare beneficiaries (commonly referred to as the "Nursing Home Compare" Medicare website) (or a successor website), the following information in a manner that is prominent, updated on a timely basis, easily accessible, readily understandable to consumers of long-term care services, and searchable:
(i) Staffing data for each facility (including resident census data and data on the hours of care provided per resident per day) based on data submitted under
(I) concise explanations of how to interpret the data (such as a plain English explanation of data reflecting "nursing home staff hours per resident day");
(II) differences in types of staff (such as training associated with different categories of staff);
(III) the relationship between nurse staffing levels and quality of care; and
(IV) an explanation that appropriate staffing levels vary based on patient case mix.
(ii) Links to State Internet websites with information regarding State survey and certification programs, links to Form 2567 State inspection reports (or a successor form) on such websites, information to guide consumers in how to interpret and understand such reports, and the facility plan of correction or other response to such report. Any such links shall be posted on a timely basis.
(iii) The standardized complaint form developed under
(iv) Summary information on the number, type, severity, and outcome of substantiated complaints.
(v) The number of adjudicated instances of criminal violations by a facility or the employees of a facility—
(I) that were committed inside the facility;
(II) with respect to such instances of violations or crimes committed inside of the facility that were the violations or crimes of abuse, neglect, and exploitation, criminal sexual abuse, or other violations or crimes that resulted in serious bodily injury; and
(III) 8 the number of civil monetary penalties levied against the facility, employees, contractors, and other agents.
(B) Deadline for provision of information
(i) In general
Except as provided in clause (ii), the Secretary shall ensure that the information described in subparagraph (A) is included on such website (or a successor website) not later than 1 year after March 23, 2010.
(ii) Exception
The Secretary shall ensure that the information described in subparagraph (A)(i) is included on such website (or a successor website) not later than the date on which the requirements under
(2) Review and modification of website
(A) In general
The Secretary shall establish a process—
(i) to review the accuracy, clarity of presentation, timeliness, and comprehensiveness of information reported on such website as of the day before March 23, 2010; and
(ii) not later than 1 year after March 23, 2010, to modify or revamp such website in accordance with the review conducted under clause (i).
(B) Consultation
In conducting the review under subparagraph (A)(i), the Secretary shall consult with—
(i) State long-term care ombudsman programs;
(ii) consumer advocacy groups;
(iii) provider stakeholder groups; and
(iv) any other representatives of programs or groups the Secretary determines appropriate.
(3) Funding
The Secretary shall transfer to the Centers for Medicare & Medicaid Services Program Management Account, from the Federal Hospital Insurance Trust Fund under
(j) Construction
Where requirements or obligations under this section are identical to those provided under
(k) Funding for strike teams
In addition to amounts otherwise available, there is appropriated to the Secretary, out of any monies in the Treasury not otherwise appropriated, $250,000,000, to remain available until expended, for purposes of allocating such amount among the States (including the District of Columbia and each territory of the United States) for such a State to establish and implement a strike team that will be deployed to a skilled nursing facility in the State with diagnosed or suspected cases of COVID–19 among residents or staff for the purposes of assisting with clinical care, infection control, or staffing during the emergency period described in section 1320b–5(g)(1)(B) of this section and the 1-year period immediately following the end of such emergency period.
(Aug. 14, 1935, ch. 531, title XVIII, §1819, as added and amended
Amendment of Subsection (d)(1)
Editorial Notes
References in Text
The Older Americans Act of 1965, referred to in subsecs. (b)(4)(C)(ii)(IV), (c)(2)(B)(iii)(II), and (g)(5)(B), is
Subparagraphs (B), (C), and (D) of section 6901(b)(4) of the Omnibus Budget Reconciliation Act of 1989 [
Section 21(b) of the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977, referred to in subsec. (f)(7)(A), probably means section 21(b) of the Medicare-Medicaid Anti-Fraud and Abuse Amendments,
Amendments
2021—Subsec. (k).
2014—Subsec. (i)(3).
2010—Subsec. (b)(5)(F).
Subsec. (d)(1)(B).
Subsec. (d)(1)(C).
Subsec. (f)(2)(A)(i)(I).
Subsec. (f)(8).
Subsec. (g)(5)(E).
Subsec. (h)(2)(B)(ii).
Subsec. (h)(4).
Subsec. (h)(5).
Subsecs. (i), (j).
2003—Subsec. (b)(4)(C)(i).
Subsec. (d)(1)(A).
Subsec. (f)(2)(B)(iii).
Subsec. (f)(2)(D).
2000–Subsec. (b)(8).
1997—Subsec. (b)(3)(C)(i).
Subsec. (f)(2)(B)(iii).
Subsec. (f)(2)(C).
Subsec. (g)(1)(D), (E).
1994—Subsec. (b)(3)(C)(i)(I).
Subsec. (b)(5)(D).
Subsec. (b)(5)(G).
Subsec. (c)(1)(D).
Subsec. (c)(6)(B)(i).
Subsec. (e)(2)(B).
Subsec. (f)(2)(B)(i).
Subsec. (f)(2)(B)(iii)(I)(b).
Subsec. (f)(2)(B)(iii)(I)(c).
Subsec. (g)(1)(C).
Subsec. (g)(5)(B).
1992—Subsecs. (c)(2)(B)(iii)(II), (g)(5)(B).
1990—Subsec. (b)(1)(B).
Subsec. (b)(3)(C)(i)(I).
Subsec. (b)(4)(A)(vii).
Subsec. (b)(4)(C)(ii)(IV), (V).
Subsec. (b)(5)(A).
Subsec. (b)(5)(C).
Subsec. (b)(5)(D).
Subsec. (b)(5)(F)(i).
Subsec. (c)(1)(A).
Subsec. (c)(1)(A)(iv).
Subsec. (c)(1)(A)(x), (xi).
Subsec. (c)(1)(B)(ii).
Subsec. (c)(1)(E).
Subsec. (e)(1)(A).
Subsec. (e)(2)(A).
Subsec. (e)(2)(C).
Subsec. (f)(2)(A)(ii).
Subsec. (f)(2)(A)(iv).
Subsec. (f)(2)(B).
Subsec. (f)(2)(B)(iii)(I).
Subsec. (g)(1)(C).
Subsec. (g)(5)(A)(i).
Subsec. (g)(5)(B).
1989—Subsec. (b)(5)(A).
Subsec. (b)(5)(B).
Subsec. (c)(1)(A)(ii)(II).
Subsec. (c)(1)(A)(v)(I).
Subsec. (f)(2)(A)(i)(I).
Subsec. (f)(2)(A)(ii).
Subsec. (f)(2)(A)(iv).
Subsec. (h)(2)(C).
1988—Subsec. (b)(3)(A)(iii).
Subsec. (b)(3)(A)(iv).
Subsec. (b)(3)(B)(ii)(III).
Subsec. (b)(3)(C)(i)(I).
Subsec. (b)(4)(C)(i).
Subsec. (b)(5)(A).
Subsec. (b)(5)(A)(ii).
Subsec. (b)(5)(G).
Subsec. (c)(1)(D).
Subsec. (c)(2)(A)(v).
Subsec. (c)(6).
Subsec. (e)(1)(A).
Subsec. (e)(1)(B).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(3).
Subsec. (e)(5).
Subsec. (f)(2)(A)(i)(I).
Subsec. (f)(3).
Subsec. (f)(6)(A).
Subsec. (f)(6)(B).
Subsec. (f)(7)(A).
Subsec. (f)(7)(B).
Subsec. (g)(1)(C).
Subsec. (g)(1)(D).
Subsec. (g)(2)(A)(i).
Subsec. (g)(2)(B)(ii).
Subsec. (g)(2)(C)(i).
Subsec. (g)(3)(D).
Subsec. (g)(4).
Subsec. (h)(2)(B)(ii).
Subsec. (h)(5).
Subsec. (h)(6).
1987—Subsecs. (g) to (i).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 6113(b) of
Effective Date of 2003 Amendment
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Effective Date of 1994 Amendment
Effective Date of 1992 Amendment
Amendment by
Amendment by
Effective Date of 1990 Amendment
"(I) The amendments made by clause (i) [amending this section] shall take effect as if included in the enactment of the Omnibus Budget Reconciliation Act of 1987 [
"(aa) had its participation terminated under title XVIII of the Social Security Act [
"(bb) was subject to a denial of payment under either such title;
"(cc) was assessed a civil money penalty not less than $5,000 for deficiencies in skilled nursing facility standards;
"(dd) operated under a temporary management appointed to oversee the operation of the facility and to ensure the health and safety of the facility's residents; or
"(ee) pursuant to State action, was closed or had its residents transferred.
"(II) Notwithstanding subclause (I) and subject to section 1819(f)(2)(B)(iii)(I) of the Social Security Act [
Effective Date of 1989 Amendment
"(A)
"(B)
"(A)
"(B)
Effective Date of 1988 Amendment
Amendment by
Except as specifically provided in section 411 of
Effective Date
"(a)
"(b)
"(2) In applying the amendments made by section 4203 of this Act for services furnished by a skilled nursing facility before October 1, 1990, any reference to a requirement of subsection (b), (c), or (d), of section 1819 of the Social Security Act is deemed a reference to the provisions of section 1861(j) of such Act [
"(c)
Guidance to States on Form 2567 State Inspection Reports and Complaint Investigation Reports
"(1)
"(3)
"(A)
"(B)
"(C)
Development of Consumer Rights Information Page on Nursing Home Compare Website
"(1) The documentation on nursing facilities that is available to the public.
"(2) General information and tips on choosing a nursing facility that meets the needs of the individual.
"(3) General information on consumer rights with respect to nursing facilities.
"(4) The nursing facility survey process (on a national and State-specific basis).
"(5) On a State-specific basis, the services available through the State long-term care ombudsman for such State."
National Demonstration Projects on Culture Change and Use of Information Technology in Nursing Homes
"(a)
"(b)
"(1)
"(2)
"(c)
"(1)
"(2)
"(d)
"(1)
"(2)
"(3)
"(e)
"(f)
Review and Report on Current Standards of Practice for Pharmacy Services Provided to Patients in Nursing Facilities
"(1)
"(A)
"(B)
"(i) assess the current standards of practice, clinical services, and other service requirements generally used for pharmacy services in long-term care settings; and
"(ii) evaluate the impact of those standards with respect to patient safety, reduction of medication errors and quality of care.
"(2)
"(A)
"(B)
"(i) a description of the plans of the Secretary to implement the provisions of this Act [see Tables for classification] in a manner consistent with applicable State and Federal laws designed to protect the safety and quality of care of nursing facility patients; and
"(ii) recommendations regarding necessary actions and appropriate reimbursement to ensure the provision of prescription drugs to medicare beneficiaries residing in nursing facilities in a manner consistent with existing patient safety and quality of care standards under applicable State and Federal laws."
Study and Report Regarding State Licensure and Certification Standards and Respiratory Therapy Competency Examinations
Retroactive Review
Study and Report on Deeming for Nursing Facilities and Renal Dialysis Facilities
"(1)
"(A) a study concerning the effectiveness and appropriateness of the current mechanisms for surveying and certifying skilled nursing facilities for compliance with the conditions and requirements of sections 1819 and 1861(j) of the Social Security Act [
"(B) a study concerning the effectiveness and appropriateness of the current mechanisms for surveying and certifying renal dialysis facilities for compliance with the conditions and requirements of section 1881(b) of the Social Security Act [
"(2)
Maintaining Regulatory Standards for Certain Services
Nurse Aide Training and Competency Evaluation Programs; Publication of Proposed Regulations
Nurse Aide Training and Competency Evaluation; Satisfaction of Requirements; Waiver
"(B) A nurse aide shall be considered to satisfy the requirement of sections 1819(b)(5)(A) and 1919(b)(5)(A) of the Social Security Act [
"(C) A nurse aide shall be considered to satisfy the requirement of sections 1819(b)(5)(A) and 1919(b)(5)(A) of the Social Security Act (of having completed a training and competency evaluation program approved by a State under section 1819(e)(1)(A) or 1919(e)(1)(A) of such Act), if such aide was found competent (whether or not by the State), before July 1, 1989, after the completion of a course of nurse aide training of at least 100 hours duration.
"(D) With respect to the nurse aide competency evaluation requirements described in sections 1819(b)(5)(A) and 1919(b)(5)(A) of the Social Security Act, a State may waive such requirements with respect to an individual who can demonstrate to the satisfaction of the State that such individual has served as a nurse aide at one or more facilities of the same employer in the State for at least 24 consecutive months before the date of the enactment of this Act [Dec. 19, 1989]."
Evaluation and Report on Implementation of Resident Assessment Process
Annual Report on Statutory Compliance and Enforcement Actions
1 See References in Text note below.
2 So in original. Probably should be "as nurse aides".
3 So in original. Probably should be "credit".
4 So in original. Two subpars. (C) have been enacted. See Amendment of Subsection (d)(1) note below.
5 So in original. A closing parenthesis probably should appear before the comma.
6 So in original. Probably should be "pro rata".
7 So in original. Probably should be "requirements".
8 So in original. Probably should be cl. (vi).
§1395i–3a. Protecting residents of long-term care facilities
(1) National Training Institute for surveyors
(A) In general
The Secretary of Health and Human Services shall enter into a contract with an entity for the purpose of establishing and operating a National Training Institute for Federal and State surveyors. Such Institute shall provide and improve the training of surveyors with respect to investigating allegations of abuse, neglect, and misappropriation of property in programs and long-term care facilities that receive payments under title XVIII or XIX of the Social Security Act [
(B) Activities carried out by the Institute
The contract entered into under subparagraph (A) shall require the Institute established and operated under such contract to carry out the following activities:
(i) Assess the extent to which State agencies use specialized surveyors for the investigation of reported allegations of abuse, neglect, and misappropriation of property in such programs and long-term care facilities.
(ii) Evaluate how the competencies of surveyors may be improved to more effectively investigate reported allegations of such abuse, neglect, and misappropriation of property, and provide feedback to Federal and State agencies on the evaluations conducted.
(iii) Provide a national program of training, tools, and technical assistance to Federal and State surveyors on investigating reports of such abuse, neglect, and misappropriation of property.
(iv) Develop and disseminate information on best practices for the investigation of such abuse, neglect, and misappropriation of property.
(v) Assess the performance of State complaint intake systems, in order to ensure that the intake of complaints occurs 24 hours per day, 7 days a week (including holidays).
(vi) To the extent approved by the Secretary of Health and Human Services, provide a national 24 hours per day, 7 days a week (including holidays), back-up system to State complaint intake systems in order to ensure optimum national responsiveness to complaints of such abuse, neglect, and misappropriation of property.
(vii) Analyze and report annually on the following:
(I) The total number and sources of complaints of such abuse, neglect, and misappropriation of property.
(II) The extent to which such complaints are referred to law enforcement agencies.
(III) General results of Federal and State investigations of such complaints.
(viii) Conduct a national study of the cost to State agencies of conducting complaint investigations of skilled nursing facilities and nursing facilities under sections 1819 and 1919, respectively, of the Social Security Act (
(C) Authorization
There are authorized to be appropriated to carry out this paragraph, for the period of fiscal years 2011 through 2014, $12,000,000.
(2) Grants to State survey agencies
(A) In general
The Secretary of Health and Human Services shall make grants to State agencies that perform surveys of skilled nursing facilities or nursing facilities under sections 1819 or 1919, respectively, of the Social Security Act (
(B) Use of funds
A grant awarded under subparagraph (A) shall be used for the purpose of designing and implementing complaint investigations systems that—
(i) promptly prioritize complaints in order to ensure a rapid response to the most serious and urgent complaints;
(ii) respond to complaints with optimum effectiveness and timeliness; and
(iii) optimize the collaboration between local authorities, consumers, and providers, including—
(I) such State agency;
(II) the State Long-Term Care Ombudsman;
(III) local law enforcement agencies;
(IV) advocacy and consumer organizations;
(V) State aging units;
(VI) Area Agencies on Aging; and
(VII) other appropriate entities.
(C) Authorization
There are authorized to be appropriated to carry out this paragraph, for each of fiscal years 2011 through 2014, $5,000,000.
(
Editorial Notes
References in Text
The Social Security Act, referred to in par. (1)(A), is act Aug. 14, 1935, ch. 531,
Codification
Section was enacted as part of the Elder Justice Act of 2009 and also as part of the Patient Protection and Affordable Care Act, and not as part of the Social Security Act which comprises this chapter.
Statutory Notes and Related Subsidiaries
Definitions
§1395i–4. Medicare rural hospital flexibility program
(a) Establishment
Any State that submits an application in accordance with subsection (b) may establish a medicare rural hospital flexibility program described in subsection (c).
(b) Application
A State may establish a medicare rural hospital flexibility program described in subsection (c) if the State submits to the Secretary at such time and in such form as the Secretary may require an application containing—
(1) assurances that the State—
(A) has developed, or is in the process of developing, a State rural health care plan that—
(i) provides for the creation of 1 or more rural health networks (as defined in subsection (d)) in the State;
(ii) promotes regionalization of rural health services in the State; and
(iii) improves access to hospital and other health services for rural residents of the State; and
(B) has developed the rural health care plan described in subparagraph (A) in consultation with the hospital association of the State, rural hospitals located in the State, and the State Office of Rural Health (or, in the case of a State in the process of developing such plan, that assures the Secretary that the State will consult with its State hospital association, rural hospitals located in the State, and the State Office of Rural Health in developing such plan);
(2) assurances that the State has designated (consistent with the rural health care plan described in paragraph (1)(A)), or is in the process of so designating, rural nonprofit or public hospitals or facilities located in the State as critical access hospitals; and
(3) such other information and assurances as the Secretary may require.
(c) Medicare rural hospital flexibility program described
(1) In general
A State that has submitted an application in accordance with subsection (b), may establish a medicare rural hospital flexibility program that provides that—
(A) the State shall develop at least 1 rural health network (as defined in subsection (d)) in the State; and
(B) at least 1 facility in the State shall be designated as a critical access hospital in accordance with paragraph (2).
(2) State designation of facilities
(A) In general
A State may designate 1 or more facilities as a critical access hospital in accordance with subparagraphs (B), (C), and (D).
(B) Criteria for designation as critical access hospital
A State may designate a facility as a critical access hospital if the facility—
(i) is a hospital that is located in a county (or equivalent unit of local government) in a rural area (as defined in
(I) is located more than a 35-mile drive (or, in the case of mountainous terrain or in areas with only secondary roads available, a 15-mile drive) from a hospital, or another facility described in this subsection; or
(II) is certified before January 1, 2006, by the State as being a necessary provider of health care services to residents in the area;
(ii) makes available 24-hour emergency care services that a State determines are necessary for ensuring access to emergency care services in each area served by a critical access hospital;
(iii) provides not more than 25 acute care inpatient beds (meeting such standards as the Secretary may establish) for providing inpatient care for a period that does not exceed, as determined on an annual, average basis, 96 hours per patient;
(iv) meets such staffing requirements as would apply under
(I) the facility need not meet hospital standards relating to the number of hours during a day, or days during a week, in which the facility must be open and fully staffed, except insofar as the facility is required to make available emergency care services as determined under clause (ii) and must have nursing services available on a 24-hour basis, but need not otherwise staff the facility except when an inpatient is present;
(II) the facility may provide any services otherwise required to be provided by a full-time, on site dietitian, pharmacist, laboratory technician, medical technologist, and radiological technologist on a part-time, off site basis under arrangements as defined in
(III) the inpatient care described in clause (iii) may be provided by a physician assistant, nurse practitioner, or clinical nurse specialist subject to the oversight of a physician who need not be present in the facility; and
(v) meets the requirements of
(C) Recently closed facilities
A State may designate a facility as a critical access hospital if the facility—
(i) was a hospital that ceased operations on or after the date that is 10 years before November 29, 1999; and
(ii) as of the effective date of such designation, meets the criteria for designation under subparagraph (B).
(D) Downsized facilities
A State may designate a health clinic or a health center (as defined by the State) as a critical access hospital if such clinic or center—
(i) is licensed by the State as a health clinic or a health center;
(ii) was a hospital that was downsized to a health clinic or health center; and
(iii) as of the effective date of such designation, meets the criteria for designation under subparagraph (B).
(E) Authority to establish psychiatric and rehabilitation distinct part units
(i) In general
Subject to the succeeding provisions of this subparagraph, a critical access hospital may establish—
(I) a psychiatric unit of the hospital that is a distinct part of the hospital; and
(II) a rehabilitation unit of the hospital that is a distinct part of the hospital,
if the distinct part meets the requirements (including conditions of participation) that would otherwise apply to the distinct part if the distinct part were established by a subsection (d) hospital in accordance with the matter following clause (v) 1 of
(ii) Limitation on number of beds
The total number of beds that may be established under clause (i) for a distinct part unit may not exceed 10.
(iii) Exclusion of beds from bed count
In determining the number of beds of a critical access hospital for purposes of applying the bed limitations referred to in subparagraph (B)(iii) and subsection (f), the Secretary shall not take into account any bed established under clause (i).
(iv) Effect of failure to meet requirements
If a psychiatric or rehabilitation unit established under clause (i) does not meet the requirements described in such clause with respect to a cost reporting period, no payment may be made under this subchapter to the hospital for services furnished in such unit during such period. Payment to the hospital for services furnished in the unit may resume only after the hospital has demonstrated to the Secretary that the unit meets such requirements.
(d) "Rural health network" defined
(1) In general
In this section, the term "rural health network" means, with respect to a State, an organization consisting of—
(A) at least 1 facility that the State has designated or plans to designate as a critical access hospital; and
(B) at least 1 hospital that furnishes acute care services.
(2) Agreements
(A) In general
Each critical access hospital that is a member of a rural health network shall have an agreement with respect to each item described in subparagraph (B) with at least 1 hospital that is a member of the network.
(B) Items described
The items described in this subparagraph are the following:
(i) Patient referral and transfer.
(ii) The development and use of communications systems including (where feasible)—
(I) telemetry systems; and
(II) systems for electronic sharing of patient data.
(iii) The provision of emergency and non-emergency transportation among the facility and the hospital.
(C) Credentialing and quality assurance
Each critical access hospital that is a member of a rural health network shall have an agreement with respect to credentialing and quality assurance with at least—
(i) 1 hospital that is a member of the network;
(ii) 1 peer review organization or equivalent entity; or
(iii) 1 other appropriate and qualified entity identified in the State rural health care plan.
(e) Certification by Secretary
The Secretary shall certify a facility as a critical access hospital if the facility—
(1) is located in a State that has established a medicare rural hospital flexibility program in accordance with subsection (c);
(2) is designated as a critical access hospital by the State in which it is located; and
(3) meets such other criteria as the Secretary may require.
(f) Permitting maintenance of swing beds
Nothing in this section shall be construed to prohibit a State from designating or the Secretary from certifying a facility as a critical access hospital solely because, at the time the facility applies to the State for designation as a critical access hospital, there is in effect an agreement between the facility and the Secretary under
(g) Grants
(1) Medicare rural hospital flexibility program
The Secretary may award grants to States that have submitted applications in accordance with subsection (b) for—
(A) engaging in activities relating to planning and implementing a rural health care plan;
(B) engaging in activities relating to planning and implementing rural health networks;
(C) designating facilities as critical access hospitals; and
(D) providing support for critical access hospitals for quality improvement, quality reporting, performance improvements, and benchmarking.
(2) Rural emergency medical services
(A) In general
The Secretary may award grants to States that have submitted applications in accordance with subparagraph (B) for the establishment or expansion of a program for the provision of rural emergency medical services.
(B) Application
An application is in accordance with this subparagraph if the State submits to the Secretary at such time and in such form as the Secretary may require an application containing the assurances described in subparagraphs (A)(ii), (A)(iii), and (B) of subsection (b)(1) and paragraph (3) of that subsection.
(3) Upgrading data systems
(A) Grants to hospitals
The Secretary may award grants to hospitals that have submitted applications in accordance with subparagraph (C) to assist eligible small rural hospitals in meeting the costs of implementing data systems required to meet requirements established under the medicare program pursuant to amendments made by the Balanced Budget Act of 1997 and to assist such hospitals in participating in delivery system reforms under the provisions of and amendments made by the Patient Protection and Affordable Care Act, such as value-based purchasing programs, accountable care organizations under
(B) Eligible small rural hospital defined
For purposes of this paragraph, the term "eligible small rural hospital" means a non-Federal, short-term general acute care hospital that—
(i) is located in a rural area (as defined for purposes of
(ii) has less than 50 beds.
(C) Application
A hospital seeking a grant under this paragraph shall submit an application to the Secretary on or before such date and in such form and manner as the Secretary specifies.
(D) Amount of grant
A grant to a hospital under this paragraph may not exceed $50,000.
(E) Use of funds
A hospital receiving a grant under this paragraph may use the funds for the purchase of computer software and hardware, the education and training of hospital staff on computer information systems, to offset costs related to the implementation of prospective payment systems and to participate in delivery system reforms under the provisions of and amendments made by the Patient Protection and Affordable Care Act, such as value-based purchasing programs, accountable care organizations under
(F) Reports
(i) Information
A hospital receiving a grant under this section shall furnish the Secretary with such information as the Secretary may require to evaluate the project for which the grant is made and to ensure that the grant is expended for the purposes for which it is made.
(ii) Timing of submission
(I) Interim reports
The Secretary shall report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate at least annually on the grant program established under this section, including in such report information on the number of grants made, the nature of the projects involved, the geographic distribution of grant recipients, and such other matters as the Secretary deems appropriate.
(II) Final report
The Secretary shall submit a final report to such committees not later than 180 days after the completion of all of the projects for which a grant is made under this section.
(4) Additional requirements with respect to FLEX grants
With respect to grants awarded under paragraph (1) or (2) from funds appropriated for fiscal year 2005 and subsequent fiscal years—
(A) Consultation with the state hospital association and rural hospitals on the most appropriate ways to use grants
A State shall consult with the hospital association of such State and rural hospitals located in such State on the most appropriate ways to use the funds under such grant.
(B) Limitation on use of grant funds for administrative expenses
A State may not expend more than the lesser of—
(i) 15 percent of the amount of the grant for administrative expenses; or
(ii) the State's federally negotiated indirect rate for administering the grant.
(5) Use of funds for Federal administrative expenses
Of the total amount appropriated for grants under paragraphs (1) and (2) for a fiscal year (for each of fiscal years 2005 through 2008) and, of the total amount appropriated for grants under paragraphs (1), (2), and (6) for a fiscal year (beginning with fiscal year 2009), up to 5 percent of such amount shall be available to the Health Resources and Services Administration for purposes of administering such grants.
(6) Providing mental health services and other health services to veterans and other residents of rural areas
(A) Grants to States
The Secretary may award grants to States that have submitted applications in accordance with subparagraph (B) for increasing the delivery of mental health services or other health care services deemed necessary to meet the needs of veterans of Operation Iraqi Freedom and Operation Enduring Freedom living in rural areas (as defined for purposes of
(B) Application
(i) In general
An application is in accordance with this subparagraph if the State submits to the Secretary at such time and in such form as the Secretary may require an application containing the assurances described in subparagraphs (A)(ii) and (A)(iii) of subsection (b)(1).
(ii) Consideration of regional approaches, networks, or technology
The Secretary may, as appropriate in awarding grants to States under subparagraph (A), consider whether the application submitted by a State under this subparagraph includes 1 or more proposals that utilize regional approaches, networks, health information technology, telehealth, or telemedicine to deliver services described in subparagraph (A) to individuals described in that subparagraph. For purposes of this clause, a network may, as the Secretary determines appropriate, include Federally qualified health centers (as defined in
(iii) Coordination at local level
The Secretary shall require, as appropriate, a State to demonstrate consultation with the hospital association of such State, rural hospitals located in such State, providers of mental health services, or other appropriate stakeholders for the provision of services under a grant awarded under this paragraph.
(iv) Special consideration of certain applications
In awarding grants to States under subparagraph (A), the Secretary shall give special consideration to applications submitted by States in which veterans make up a high percentage (as determined by the Secretary) of the total population of the State. Such consideration shall be given without regard to the number of veterans of Operation Iraqi Freedom and Operation Enduring Freedom living in the areas in which mental health services and other health care services would be delivered under the application.
(C) Coordination with VA
The Secretary shall, as appropriate, consult with the Director of the Office of Rural Health of the Department of Veterans Affairs in awarding and administering grants to States under subparagraph (A).
(D) Use of funds
A State awarded a grant under this paragraph may, as appropriate, use the funds to reimburse providers of services described in subparagraph (A) to individuals described in that subparagraph.
(E) Limitation on use of grant funds for administrative expenses
A State awarded a grant under this paragraph may not expend more than 15 percent of the amount of the grant for administrative expenses.
(F) Independent evaluation and final report
The Secretary shall provide for an independent evaluation of the grants awarded under subparagraph (A). Not later than 1 year after the date on which the last grant is awarded to a State under such subparagraph, the Secretary shall submit a report to Congress on such evaluation. Such report shall include an assessment of the impact of such grants on increasing the delivery of mental health services and other health services to veterans of the United States Armed Forces living in rural areas (as so defined and including such areas that are rural census tracks), with particular emphasis on the impact of such grants on the delivery of such services to veterans of Operation Enduring Freedom and Operation Iraqi Freedom, and to other individuals living in such rural areas.
(7) Critical access hospitals transitioning to skilled nursing facilities and assisted living facilities
(A) Grants
The Secretary may award grants to eligible critical access hospitals that have submitted applications in accordance with subparagraph (B) for assisting such hospitals in the transition to skilled nursing facilities and assisted living facilities.
(B) Application
An applicable critical access hospital seeking a grant under this paragraph shall submit an application to the Secretary on or before such date and in such form and manner as the Secretary specifies.
(C) Additional requirements
The Secretary may not award a grant under this paragraph to an eligible critical access hospital unless—
(i) local organizations or the State in which the hospital is located provides matching funds; and
(ii) the hospital provides assurances that it will surrender critical access hospital status under this subchapter within 180 days of receiving the grant.
(D) Amount of grant
A grant to an eligible critical access hospital under this paragraph may not exceed $1,000,000.
(E) Funding
There are appropriated from the Federal Hospital Insurance Trust Fund under
(F) Eligible critical access hospital defined
For purposes of this paragraph, the term "eligible critical access hospital" means a critical access hospital that has an average daily acute census of less than 0.5 and an average daily swing bed census of greater than 10.0.
(h) Grandfathering provisions
(1) In general
Any medical assistance facility operating in Montana and any rural primary care hospital designated by the Secretary under this section prior to August 5, 1997, shall be deemed to have been certified by the Secretary under subsection (e) as a critical access hospital if such facility or hospital is otherwise eligible to be designated by the State as a critical access hospital under subsection (c).
(2) Continuation of medical assistance facility and rural primary care hospital terms
Notwithstanding any other provision of this subchapter, with respect to any medical assistance facility or rural primary care hospital described in paragraph (1), any reference in this subchapter to a "critical access hospital" shall be deemed to be a reference to a "medical assistance facility" or "rural primary care hospital".
(3) State authority to waive 35-mile rule
In the case of a facility that was designated as a critical access hospital before January 1, 2006, and was certified by the State as being a necessary provider of health care services to residents in the area under subsection (c)(2)(B)(i)(II), as in effect before such date, the authority under such subsection with respect to any redesignation of such facility shall continue to apply notwithstanding the amendment made by section 405(h)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
(i) Waiver of conflicting part A provisions
The Secretary is authorized to waive such provisions of this part and part E as are necessary to conduct the program established under this section.
(j) Authorization of appropriations
There are authorized to be appropriated from the Federal Hospital Insurance Trust Fund for making grants to all States under subsection (g), $25,000,000 in each of the fiscal years 1998 through 2002, for making grants to all States under paragraphs (1) and (2) of subsection (g), $35,000,000 in each of fiscal years 2005 through 2008, for making grants to all States under paragraphs (1) and (2) of subsection (g), $55,000,000 in each of fiscal years 2009 and 2010, for making grants to all States under paragraph (6) of subsection (g), $50,000,000 in each of fiscal years 2009 and 2010, to remain available until expended and for making grants to all States under subsection (g), such sums as may be necessary in each of fiscal years 2011 and 2012, to remain available until expended.
(Aug. 14, 1935, ch. 531, title XVIII, §1820, as added
Editorial Notes
References in Text
The matter following clause (v) of
The Balanced Budget Act of 1997, referred to in subsec. (g)(3)(A), is
The Patient Protection and Affordable Care Act, referred to in subsec. (g)(3)(A), (E), is
Section 405(h)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (h)(3), is section 405(h)(1) of
Amendments
2010—Subsec. (g)(3)(A).
Subsec. (g)(3)(E).
Subsec. (j).
2008—Subsec. (g)(1)(D).
Subsec. (g)(5).
Subsec. (g)(6).
Subsec. (g)(7).
Subsec. (j).
2003—Subsec. (c)(2)(B)(i)(II).
Subsec. (c)(2)(B)(iii).
Subsec. (c)(2)(E).
Subsec. (f).
Subsec. (g)(4), (5).
Subsec. (h).
Subsec. (h)(3).
Subsec. (i).
Subsec. (j).
1999—Subsec. (c)(2)(A).
Subsec. (c)(2)(B)(i).
Subsec. (c)(2)(B)(iii).
Subsec. (c)(2)(C), (D).
Subsec. (g)(3).
1997—
Subsec. (j).
1994—Subsec. (c)(1).
Subsec. (e)(1).
Subsec. (e)(1)(A).
Subsec. (e)(2) to (6).
Subsec. (f)(1)(F).
Subsec. (f)(1)(H).
Subsec. (f)(3).
Subsec. (f)(4).
Subsec. (i)(1)(A).
Subsec. (i)(1)(B).
Subsec. (i)(2)(A).
Subsec. (k).
Subsec. (l).
1990—Subsec. (d)(1).
Subsec. (f)(1)(A).
Subsec. (f)(1)(B).
Subsec. (g)(1)(A)(ii).
Subsec. (i)(2)(C).
Subsec. (j).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Effective Date of 2003 Amendment
Amendment by section 405(g)(1) of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(a)] of
Effective Date of 1997 Amendment
Amendment by section 4201(a) of
Effective Date of 1990 Amendment
Demonstration Project on Community Health Integration Models in Certain Rural Counties
"(a)
"(b)
"(1) explore ways to increase access to, and improve the adequacy of, payments for acute care, extended care, and other essential health care services provided under the Medicare and Medicaid programs in eligible counties; and
"(2) evaluate regulatory challenges facing such providers and the communities they serve.
"(c)
"(1) Health care providers in eligible counties selected to participate in the demonstration project under subsection (d)(3) shall (when determined appropriate by the Secretary), instead of the payment rates otherwise applicable under the Medicare program, be reimbursed at a rate that covers at least the reasonable costs of the provider in furnishing acute care, extended care, and other essential health care services to Medicare beneficiaries.
"(2) Methods to coordinate the survey and certification process under the Medicare program and the Medicaid program across all health service categories included in the demonstration project shall be tested with the goal of assuring quality and safety while reducing administrative burdens, as appropriate, related to completing such survey and certification process.
"(3) Health care providers in eligible counties selected to participate in the demonstration project under subsection (d)(3) and the Secretary shall work with the State to explore ways to revise reimbursement policies under the Medicaid program to improve access to the range of health care services available in such eligible counties.
"(4) The Secretary shall identify regulatory requirements that may be revised appropriately to improve access to care in eligible counties.
"(5) Other essential health care services necessary to ensure access to the range of health care services in eligible counties selected to participate in the demonstration project under subsection (d)(3) shall be identified. Ways to ensure adequate funding for such services shall also be explored.
"(d)
"(1)
"(A)
"(B)
"(i) is a Rural Hospital Flexibility Program grantee under section 1820(g) of the Social Security Act (
"(ii) is located in a State in which at least 65 percent of the counties in the State are counties that have 6 or less residents per square mile.
"(C)
"(2)
"(A)
"(B)
"(3)
"(4)
"(A) The county has 6 or less residents per square mile.
"(B) As of the date of the enactment of this Act [July 15, 2008], a facility designated as a critical access hospital which meets the following requirements was located in the county:
"(i) As of the date of the enactment of this Act, the critical access hospital furnished 1 or more of the following:
"(I) Home health services.
"(II) Hospice care.
"(ii) As of the date of the enactment of this Act, the critical access hospital has an average daily inpatient census of 5 or less.
"(C) As of the date of the enactment of this Act, skilled nursing facility services were available in the county in—
"(i) a critical access hospital using swing beds; or
"(ii) a local nursing home.
"(e)
"(1)
"(2) HRSA
"(A) award grants to the eligible entities selected to participate in the demonstration project; and
"(B) work with such entities to provide technical assistance related to the requirements under the project.
"(3) CMS
"(f)
"(1)
"(2)
"(A)
"(B)
"(3)
"(g)
"(1) CMS.—
"(A)
"(B)
"(C)
"(2) HRSA.—There are authorized to be appropriated to the Office of Rural Health Policy of the Health Resources and Services Administration $800,000 for each of fiscal years 2010, 2011, and 2012 for the purpose of carrying out the duties of such Office under the demonstration project under this section, to remain available for the duration of the demonstration project.
"(h)
"(1)
"(2)
"(i)
"(j)
"(1)
"(A) Home health services.
"(B) Covered skilled nursing facility services.
"(C) Hospice care.
"(2)
"(3)
"(4)
"(5)
"(6)
"(7)
"(8)
"(A) Ambulance services (as described in section 1861(s)(7) of the Social Security Act (
"(B) Physicians' services (as defined in section 1861(q) of the Social Security Act (
"(C) Public health services (as defined by the Secretary).
"(D) Other health care services determined appropriate by the Secretary.
"(9)
[
GAO Study on Certain Eligibility Requirements for Critical Access Hospitals
"(a)
"(1) the feasibility of having a distinct part unit as part of a critical access hospital for purposes of the medicare program under title XVIII of such Act [this subchapter]; and
"(2) the effect of seasonal variations in patient admissions on critical access hospital eligibility requirements with respect to limitations on average annual length of stay and number of beds.
"(b)
"(1) whether distinct part units should be permitted as part of a critical access hospital under the medicare program;
"(2) if so permitted, the payment methodologies that should apply with respect to services provided by such units;
"(3) whether, and to what extent, such units should be included in or excluded from the bed limits applicable to critical access hospitals under the medicare program; and
"(4) any adjustments to such eligibility requirements to account for seasonal variations in patient admissions."
Transition for MAF
"(A)
"(B)
"(i)
"(ii)
GAO Reports
1 See References in Text note below.
§1395i–5. Conditions for coverage of religious nonmedical health care institutional services
(a) In general
Subject to subsections (c) and (d), payment under this part may be made for inpatient hospital services or post-hospital extended care services furnished an individual in a religious nonmedical health care institution and for home health services furnished an individual by a religious nonmedical health care institution only if—
(1) the individual has an election in effect for such benefits under subsection (b); and
(2) the individual has a condition such that the individual would qualify for benefits under this part for inpatient hospital services, extended care services, or home health services, respectively, if the individual were an inpatient or resident in a hospital or skilled nursing facility, or receiving services from a home health agency, that was not such an institution.
(b) Election
(1) In general
An individual may make an election under this subsection in a form and manner specified by the Secretary consistent with this subsection. Unless otherwise provided, such an election shall take effect immediately upon its execution. Such an election, once made, shall continue in effect until revoked.
(2) Form
The election form under this subsection shall include the following:
(A) A written statement, signed by the individual (or such individual's legal representative), that—
(i) the individual is conscientiously opposed to acceptance of nonexcepted medical treatment; and
(ii) the individual's acceptance of nonexcepted medical treatment would be inconsistent with the individual's sincere religious beliefs.
(B) A statement that the receipt of nonexcepted medical services shall constitute a revocation of the election and may limit further receipt of services described in subsection (a).
(3) Revocation
An election under this subsection by an individual may be revoked by voluntarily notifying the Secretary in writing of such revocation and shall be deemed to be revoked if the individual receives nonexcepted medical treatment for which reimbursement is made under this subchapter.
(4) Limitation on subsequent elections
Once an individual's election under this subsection has been made and revoked twice—
(A) the next election may not become effective until the date that is 1 year after the date of most recent previous revocation, and
(B) any succeeding election may not become effective until the date that is 5 years after the date of the most recent previous revocation.
(5) Excepted medical treatment
For purposes of this subsection:
(A) Excepted medical treatment
The term "excepted medical treatment" means medical care or treatment (including medical and other health services)—
(i) received involuntarily,
(ii) required under Federal or State law or law of a political subdivision of a State, or
(iii) effective beginning on December 29, 2022, that is a COVID–19 vaccine and its administration described in
(B) Nonexcepted medical treatment
The term "nonexcepted medical treatment" means medical care or treatment (including medical and other health services) other than excepted medical treatment.
(c) Monitoring and safeguard against excessive expenditures
(1) Estimate of expenditures
Before the beginning of each fiscal year (beginning with fiscal year 2000), the Secretary shall estimate the level of expenditures under this part for services described in subsection (a) for that fiscal year.
(2) Adjustment in payments
(A) Proportional adjustment
If the Secretary determines that the level estimated under paragraph (1) for a fiscal year will exceed the trigger level (as defined in subparagraph (C)) for that fiscal year, the Secretary shall, subject to subparagraph (B), provide for such a proportional reduction in payment amounts under this part for services described in subsection (a) for the fiscal year involved as will assure that such level (taking into account any adjustment under subparagraph (B)) does not exceed the trigger level for that fiscal year.
(B) Alternative adjustments
The Secretary may, instead of making some or all of the reduction described in subparagraph (A), impose such other conditions or limitations with respect to the coverage of covered services (including limitations on new elections of coverage and new facilities) as may be appropriate to reduce the level of expenditures described in paragraph (1) to the trigger level.
(C) Trigger level
For purposes of this subsection—
(i) In general
Subject to adjustment under paragraph (3)(B), the "trigger level" for a year is the unadjusted trigger level described in clause (ii).
(ii) Unadjusted trigger level
The "unadjusted trigger level" for—
(I) fiscal year 1998, is $20,000,000, or
(II) a succeeding fiscal year is the amount specified under this clause for the previous fiscal year increased by the percentage increase in the consumer price index for all urban consumers (all items; United States city average) for the 12-month period ending with July preceding the beginning of the fiscal year.
(D) Prohibition of administrative and judicial review
There shall be no administrative or judicial review under
(E) Effect on billing
Notwithstanding any other provision of this subchapter, in the case of a reduction in payment provided under this subsection for services of a religious nonmedical health care institution provided to an individual, the amount that the institution is otherwise permitted to charge the individual for such services is increased by the amount of such reduction.
(3) Monitoring expenditure level
(A) In general
The Secretary shall monitor the expenditure level described in paragraph (2)(A) for each fiscal year (beginning with fiscal year 1999).
(B) Adjustment in trigger level
(i) In general
If the Secretary determines that such level for a fiscal year exceeded, or was less than, the trigger level for that fiscal year, then, subject to clause (ii), the trigger level for the succeeding fiscal year shall be reduced, or increased, respectively, by the amount of such excess or deficit.
(ii) Limitation on carryforward
In no case may the increase effected under clause (i) for a fiscal year exceed $50,000,000.
(d) Sunset
If the Secretary determines that the level of expenditures described in subsection (c)(1) for 3 consecutive fiscal years (with the first such year being not earlier than fiscal year 2002) exceeds the trigger level for such expenditures for such years (as determined under subsection (c)(2)), benefits shall be paid under this part for services described in subsection (a) and furnished on or after the first January 1 that occurs after such 3 consecutive years only with respect to an individual who has an election in effect under subsection (b) as of such January 1 and only during the duration of such election.
(e) Annual report
At the beginning of each fiscal year (beginning with fiscal year 1999), the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate an annual report on coverage and expenditures for services described in subsection (a) under this part and under State plans under subchapter XIX. Such report shall include—
(1) level of expenditures described in subsection (c)(1) for the previous fiscal year and estimated for the fiscal year involved;
(2) trends in such level; and
(3) facts and circumstances of any significant change in such level from the level in previous fiscal years.
(Aug. 14, 1935, ch. 531, title XVIII, §1821, as added
Editorial Notes
Amendments
2022—Subsec. (b)(5)(A)(iii).
2003—Subsec. (a).
Subsec. (a)(2).
Statutory Notes and Related Subsidiaries
Effective Date
Special Rules for COVID–19 Vaccines Relating to Revocation of Election
"(1) Beginning on such date of enactment, such individual may make an election under such section, which shall take effect immediately upon its execution, if such individual would be eligible to make such an election if they had not received such COVID–19 vaccine and its administration.
"(2) Such revoked election shall not be taken into account for purposes of determining the effective date for an election described in subparagraph (A) or (B) of such paragraph (4)."
§1395i–6. Hospice program survey and enforcement procedures
(a) Surveys
(1) Frequency
Any entity that is certified as a hospice program (as defined in
(2) Public transparency of survey and certification information
(A) Submission of information to the Secretary
(i) In general
Each State or local survey agency, and each national accreditation body with respect to which the Secretary has made a finding under
(ii) Required inclusion of specified form
With respect to a survey under this subsection carried out by a national accreditation body described in clause (i) on or after October 1, 2021, information described in such clause shall include Form CMS-2567 (or a successor form), along with such additional information determined appropriate by such body.
(B) Public disclosure of information
Beginning not later than October 1, 2022, the Secretary shall publish the information submitted under subparagraph (A) on the public website of the Centers for Medicare & Medicaid Services in a manner that is prominent, easily accessible, readily understandable, and searchable. The Secretary shall provide for the timely update of such information so published.
(3) Consistency of surveys
Each State and the Secretary shall implement programs to measure and reduce inconsistency in the application of survey results among surveyors.
(4) Survey teams
(A) In general
In the case of a survey conducted under this subsection on or after October 1, 2021, by more than 1 individual, such survey shall be conducted by a multidisciplinary team of professionals (including a registered professional nurse).
(B) Prohibition of conflicts of interest
Beginning October 1, 2021, a State may not use as a member of a survey team under this subsection an individual who is serving (or has served within the previous 2 years) as a member of the staff of, or as a consultant to, the program surveyed respecting compliance with the requirements of
(C) Training
The Secretary shall provide, not later than October 1, 2021, for the comprehensive training of State and Federal surveyors, and any surveyor employed by a national accreditation body described in paragraph (2)(A)(i), in the conduct of surveys under this subsection, including training with respect to the review of written plans for providing hospice care (as described in
(5) Funding
The Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under
(b) Special focus program
(1) In general
The Secretary shall conduct a special focus program for enforcement of requirements for hospice programs that the Secretary has identified as having substantially failed to meet applicable requirements of this chapter.
(2) Periodic surveys
Under such special focus program, the Secretary shall conduct surveys of each hospice program in the special focus program not less than once every 6 months.
(c) Enforcement
(1) Situations involving immediate jeopardy
If the Secretary determines on the basis of a standard survey or otherwise that a hospice program that is certified for participation under this subchapter is no longer in compliance with the requirements specified in
(2) Situations not involving immediate jeopardy
If the Secretary determines on the basis of a standard survey or otherwise that a hospice program that is certified for participation under this subchapter is no longer in compliance with the requirements specified in
(3) Penalty for previous noncompliance
If the Secretary determines that a hospice program that is certified for participation under this subchapter is in compliance with the requirements specified in
(4) Option to continue payments for noncompliant hospice programs
The Secretary may continue payments under this subchapter with respect to a hospice program not in compliance with the requirements specified in
(A) the State or local survey agency finds that it is more appropriate to take alternative action to assure compliance of the program with such requirements than to terminate the certification of the program;
(B) the program has submitted a plan and timetable for corrective action to the Secretary for approval and the Secretary approves the plan of corrective action; and
(C) the program agrees to repay to the Federal Government payments received under this subchapter during such period if the corrective action is not taken in accordance with the approved plan and timetable.
The Secretary shall establish guidelines for approval of corrective actions requested by hospice programs under this paragraph.
(5) Remedies
(A) Development
(i) In general
Not later than October 1, 2022, the Secretary shall develop and implement—
(I) a range of remedies to apply to hospice programs under the conditions described in paragraphs (1) through (4); and
(II) appropriate procedures for appealing determinations relating to the imposition of such remedies.
Remedies developed pursuant to the preceding sentence shall include the remedies specified in subparagraph (B).
(ii) Conditions of imposition of remedies
Not later than October 1, 2022, the Secretary shall develop and implement specific procedures with respect to the conditions under which each of the remedies developed under clause (i) is to be applied, including the amount of any fines and the severity of each of these remedies. Such procedures shall be designed so as to minimize the time between identification of deficiencies and imposition of these remedies and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies.
(B) Specified remedies
The remedies specified in this subparagraph are the following:
(i) Civil money penalties in an amount not to exceed $10,000 for each day of noncompliance by a hospice program with the requirements specified in
(ii) Suspension of all or part of the payments to which a hospice program would otherwise be entitled under this subchapter with respect to items and services furnished by a hospice program on or after the date on which the Secretary determines that remedies should be imposed pursuant to paragraphs (1) and (2).
(iii) The appointment of temporary management to oversee the operation of the hospice program and to protect and assure the health and safety of the individuals under the care of the program while improvements are made in order to bring the program into compliance with all such requirements.
(C) Procedures
(i) Civil money penalties
(I) In general
Subject to subclause (II), the provisions of
(II) Retention of amounts for hospice program improvements
The Secretary may provide that any portion of civil money penalties collected under this subsection may be used to support activities that benefit individuals receiving hospice care, including education and training programs to ensure hospice program compliance with the requirements of
(ii) Suspension of payment
A finding to suspend payment under subparagraph (B)(ii) shall terminate when the Secretary finds that the program is in substantial compliance with all requirements of
(iii) Temporary management
The temporary management under subparagraph (B)(iii) shall not be terminated until the Secretary has determined that the program has the management capability to ensure continued compliance with all the requirements referred to in such subparagraph.
(D) Relationship to other remedies
The remedies developed under subparagraph (A) are in addition to sanctions otherwise available under State or Federal law and shall not be construed as limiting other remedies, including any remedy available to an individual at common law.
(Aug. 14, 1935, ch. 531, title XVIII, §1822, as added
Editorial Notes
References in Text
Section 3(a)(2) of the Improving Medicare Post-Acute Care Transformation Act of 2014, referred to in subsec. (a)(5), means section 3(a)(2) of
Part B—Supplementary Medical Insurance Benefits for Aged and Disabled
§1395j. Establishment of supplementary medical insurance program for aged and disabled
There is hereby established a voluntary insurance program to provide medical insurance benefits in accordance with the provisions of this part for aged and disabled individuals who elect to enroll under such program, to be financed from premium payments by enrollees together with contributions from funds appropriated by the Federal Government.
(Aug. 14, 1935, ch. 531, title XVIII, §1831, as added
Editorial Notes
Amendments
1972—
Statutory Notes and Related Subsidiaries
Study Regarding Coverage Under Part B of Medicare for Nonreimbursable Services Provided by Optometrists for Prosthetic Lenses for Patients With Aphakia
Study To Determine Feasibility of Inclusion of Certain Additional Services Under Part B
§1395k. Scope of benefits; definitions
(a) Scope of benefits
The benefits provided to an individual by the insurance program established by this part shall consist of—
(1) entitlement to have payment made to him or on his behalf (subject to the provisions of this part) for medical and other health services, except those described in subparagraphs (B) and (D) of paragraph (2) and subparagraphs (E) and (F) of
(2) entitlement to have payment made on his behalf (subject to the provisions of this part) for—
(A) home health services (other than items described in subparagraph (G) or subparagraph (I));
(B) medical and other health services (other than items described in subparagraph (G) or subparagraph (I)) furnished by a provider of services or by others under arrangement with them made by a provider of services, excluding—
(i) physician services except where furnished by—
(I) a resident or intern of a hospital, or
(II) a physician to a patient in a hospital which has a teaching program approved as specified in paragraph (6) of
(ii) services for which payment may be made pursuant to
(iii) services described by
(iv) services of a nurse practitioner or clinical nurse specialist but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services; and 2
(C) outpatient physical therapy services (other than services to which the second sentence of
(D)(i) rural health clinic services and (ii) Federally qualified health center services;
(E) comprehensive outpatient rehabilitation facility services;
(F) facility services furnished in connection with surgical procedures specified by the Secretary—
(i) pursuant to
(ii) pursuant to
(I) a quality improvement organization (having a contract with the Secretary under part B of subchapter XI of this chapter) is willing, able, and has agreed to carry out a review (on a sample or other reasonable basis) of the physician's performing such procedures in the physician's office,
(II) the particular physician involved has agreed to make available to such organization such records as the Secretary determines to be necessary to carry out the review, and
(III) the physician is authorized to perform the procedure in a hospital located in the area in which the office is located,
and if the physician agrees to accept the standard overhead amount determined under
(G) covered items (described in
(H) outpatient critical access hospital services (as defined in
(I) prosthetic devices and orthotics and prosthetics (described in
(J) partial hospitalization services and intensive outpatient services provided by a community mental health center (as described in
(b) Definitions
For definitions of "spell of illness", "medical and other health services", and other terms used in this part, see
(Aug. 14, 1935, ch. 531, title XVIII, §1832, as added
Editorial Notes
Amendments
2022—Subsec. (a)(2)(J).
2011—Subsec. (a)(2)(F)(ii)(I).
2008—Subsec. (a)(2)(C).
2000—Subsecs. (b), (c).
1999—Subsecs. (b), (c).
1997—Subsec. (a)(1).
Subsec. (a)(2)(B)(iv).
Subsec. (a)(2)(H).
1990—Subsec. (a)(2)(A), (B).
Subsec. (a)(2)(B)(iii).
Subsec. (a)(2)(B)(iv).
Subsec. (a)(2)(D).
Subsec. (a)(2)(I).
Subsec. (a)(2)(J).
1989—Subsec. (a).
Subsec. (a)(2)(H).
Subsec. (b).
1988—Subsec. (a).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B)(iv).
Subsec. (a)(2)(F)(i).
Subsec. (a)(2)(F)(ii).
Subsec. (b).
1987—Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(2)(B)(iv).
Subsec. (a)(2)(F)(i).
Subsec. (a)(2)(F)(ii).
Subsec. (a)(2)(G).
1986—Subsec. (a)(2)(B)(iii).
Subsec. (a)(2)(C).
Subsec. (a)(2)(F).
1984—Subsec. (a)(2)(F)(ii).
Subsec. (a)(2)(F)(ii)(II).
1982—Subsec. (a)(2)(F)(ii)(I).
1980—Subsec. (a)(2)(A).
Subsec. (a)(2)(B)(i)(II).
Subsec. (a)(2)(E).
Subsec. (a)(2)(F).
1977—Subsec. (a)(1).
Subsec. (a)(2)(D).
1972—Subsec. (a)(2)(B).
Subsec. (a)(2)(C).
1968—Subsec. (a)(2)(B).
Subsec. (a)(2)(C).
Statutory Notes and Related Subsidiaries
Effective Date of 2022 Amendment
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2008 Amendment
Effective Date of 1997 Amendment
Amendment by section 4201(c)(1) of
Amendment by section 4432(b)(5)(B) of
Amendment by section 4603(c)(2)(B)(ii) of
Effective Date of 1990 Amendment
"(A) Subject to subparagraphs (B) and (C), the amendments made by this section [probably means this subsection, which amended this section and
"(B) In the case of a Federally qualified health care center that has elected, as of January 1, 1990, under part B of title XVIII of the Social Security Act [this part], to have the amount of payments for services under such part determined on a reasonable-charge basis, the amendment made by paragraph (3)(A) [amending this section] shall only apply on and after such date (not earlier than October 1, 1991) as the center may elect.
"(C) The amendment made by paragraph (6) [amending
Effective Date of 1989 Amendment
Amendment by section 101(a) of
Amendment by section 201(a) of
Effective Date of 1988 Amendment
Amendment by section 104(d)(3) of
Amendment by section 203(a) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4062(d)(2) of
Effective Date of 1986 Amendment
Effective Date of 1984 Amendment
Amendment by section 2354(b)(6) of
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by section 930(g) of
Amendment by section 948(a)(2) of
Effective Date of 1977 Amendment
Effective Date of 1972 Amendment
Amendment by section 227(e)(1) of
Amendment by section 251(a)(4) of
Effective Date of 1968 Amendment
Amendment by section 129(c)(6)(B) of
Construction of 2008 Amendment
Construction of 1986 Amendment
Report on Immunosuppressive Drug Benefit
Quality and Utilization of In-Home Care for Chronically Dependent Individuals
Study of Alternative Out-of-Home Services
Continuation of Cost Pass-Through for Certified Registered Nurse Anesthetists
"(1) Subject to paragraph (2), the amendments made by this section [amending this section and
"(A) as of January 1, 1988, the hospital employed or contracted with a certified registered nurse anesthetist (but not more than one full-time equivalent certified registered nurse anesthetist),
"(B) in 1987 the hospital had a volume of surgical procedures (including inpatient and outpatient procedures) requiring anesthesia services that did not exceed 500 (or such higher number as the Secretary determines to be appropriate), and
"(C) each certified registered nurse anesthetist employed by, or under contract with, the hospital has agreed not to bill under part B of title XVIII of such Act [
"(2) Paragraph (1) shall not apply in a year (after 1989) to a hospital unless the hospital establishes, before the beginning of the year, that the hospital has had a volume of surgical procedures (including inpatient and outpatient procedures) requiring anesthesia services in the previous year that did not exceed 500 (or such higher number as the Secretary determines to be appropriate)."
[
Payment for Services of Physicians Rendered in a Teaching Hospital for Accounting Periods Beginning After June 30, 1975, and Prior to October 1, 1978; Studies, Reports, etc.; Effective Dates
1 So in original. The semicolon probably should be a comma.
2 So in original. The word "and" probably should not appear.
§1395l. Payment of benefits
(a) Amounts
Except as provided in
(1) in the case of services described in
(2) in the case of services described in
(A) with respect to home health services (other than a covered osteoporosis drug) (as defined in
(B) with respect to other items and services (except those described in subparagraph (C), (D), or (E) of this paragraph and except as may be provided in
(i) furnished before January 1, 1999, the lesser of—
(I) the reasonable cost of such services, as determined under
(II) the customary charges with respect to such services,
less the amount a provider may charge as described in clause (ii) of
(ii) if such services are furnished before January 1, 1999, by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this clause), free of charge or at nominal charges to the public, 80 percent of the amount determined in accordance with
(iii) if such services are furnished on or after January 1, 1999, the amount determined under subsection (t), or
(iv) if (and for so long as) the conditions described in
(C) with respect to services described in the second sentence of
(D) with respect to clinical diagnostic laboratory tests for which payment is made under this part (i)(I) on the basis of a fee schedule determined under subsection (h)(1) (for tests furnished before January 1, 2017) or
(E) with respect to—
(i) outpatient hospital radiology services (including diagnostic and therapeutic radiology, nuclear medicine and CAT scan procedures, magnetic resonance imaging, and ultrasound and other imaging services, but excluding screening mammography and, for services furnished on or after January 1, 2005, diagnostic mammography), and
(ii) effective for procedures performed on or after October 1, 1989, diagnostic procedures (as defined by the Secretary) described in
the amount determined under subsection (n) or, for services or procedures performed on or after January 1, 1999, subsection (t);
(F) with respect to a covered osteoporosis drug (as defined in
(G) with respect to items and services described in
(i) the reasonable cost of such services, as determined under
(ii) the customary charges with respect to such services; and
(H) with respect to personalized prevention plan services (as defined in
or,4 if such services are furnished by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this provision), free of charge or at nominal charges to the public, the amount determined in accordance with
(3) in the case of services described in
(A) except as provided in subparagraph (B), the costs which are reasonable and related to the cost of furnishing such services or which are based on such other tests of reasonableness as the Secretary may prescribe in regulations, including those authorized under
(B) with respect to the services described in clause (ii) of
(i) the amount of payment that would have otherwise been provided (I) under subparagraph (A) (calculated as if "100 percent" were substituted for "80 percent" in such subparagraph) for such services if the individual had not been so enrolled, or (II) in the case of such services furnished on or after the implementation date of the prospective payment system under
(ii) the amount of the payments received under such written agreement for such services (not including any financial incentives provided for in such agreement such as risk pool payments, bonuses, or withholds),
less the amount the federally qualified health center may charge as described in
(4) in the case of facility services described in
(5) in the case of covered items (described in
(6) in the case of outpatient critical access hospital services, the amounts described in
(7) in the case of prosthetic devices and orthotics and prosthetics (as described in
(8) in the case of—
(A) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services furnished—
(i) by a rehabilitation agency, public health agency, clinic, comprehensive outpatient rehabilitation facility, or skilled nursing facility,
(ii) by a home health agency to an individual who is not homebound, or
(iii) by another entity under an arrangement with an entity described in clause (i) or (ii); and
(B) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services furnished—
(i) by a hospital to an outpatient or to a hospital inpatient who is entitled to benefits under part A but has exhausted benefits for inpatient hospital services during a spell of illness or is not so entitled to benefits under part A, or
(ii) by another entity under an arrangement with a hospital described in clause (i),
the amounts described in
(9) in the case of services described in
(10) with respect to rural emergency hospital services furnished on or after January 1, 2023, the amounts determined under
Paragraph (3)(A) shall not apply to Federally qualified health center services furnished on or after the implementation date of the prospective payment system under
(b) Deductible provision
Before applying subsection (a) with respect to expenses incurred by an individual during any calendar year, the total amount of the expenses incurred by such individual during such year (which would, except for this subsection, constitute incurred expenses from which benefits payable under subsection (a) are determinable) shall be reduced by a deductible of $75 for calendar years before 1991, $100 for 1991 through 2004, $110 for 2005, and for a subsequent year the amount of such deductible for the previous year increased by the annual percentage increase in the monthly actuarial rate under
(c) Mental disorders
(1) Notwithstanding any other provision of this part, with respect to expenses incurred in a calendar year in connection with the treatment of mental, psychoneurotic, and personality disorders of an individual who is not an inpatient of a hospital at the time such expenses are incurred, there shall be considered as incurred expenses for purposes of subsections (a) and (b)—
(A) for expenses incurred in years prior to 2010, only 62½ percent of such expenses;
(B) for expenses incurred in 2010 or 2011, only 68¾ percent of such expenses;
(C) for expenses incurred in 2012, only 75 percent of such expenses;
(D) for expenses incurred in 2013, only 81¼ percent of such expenses; and
(E) for expenses incurred in 2014 or any subsequent calendar year, 100 percent of such expenses.
(2) For purposes of subparagraphs (A) through (D) of paragraph (1), the term "treatment" does not include brief office visits (as defined by the Secretary) for the sole purpose of monitoring or changing drug prescriptions used in the treatment of such disorders or partial hospitalization services or intensive outpatient services that are not directly provided by a physician.
(d) Nonduplication of payments
No payment may be made under this part with respect to any services furnished an individual to the extent that such individual is entitled (or would be entitled except for
(e) Information for determination of amounts due
No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.
(f) Maximum rate of payment per visit for independent rural health clinics
(1) In establishing limits under subsection (a) on payment for rural health clinic services provided by rural health clinics (other than such clinics in hospitals with less than 50 beds), the Secretary shall establish such limit, for services provided prior to April 1, 2021—
(A) in 1988, after March 31, at $46 per visit, and
(B) in a subsequent year (before April 1, 2021), at the limit established under this paragraph for the previous year increased by the percentage increase in the MEI (as defined in
(2) In establishing limits under subsection (a) on payment for rural health clinic services furnished on or after April 1, 2021, by a rural health clinic (other than a rural health clinic described in paragraph (3)(B)), the Secretary shall establish such limit, for services provided—
(A) in 2021, after March 31, at $100 per visit;
(B) in 2022, at $113 per visit;
(C) in 2023, at $126 per visit;
(D) in 2024, at $139 per visit;
(E) in 2025, at $152 per visit;
(F) in 2026, at $165 per visit;
(G) in 2027, at $178 per visit;
(H) in 2028, at $190 per visit; and
(I) in a subsequent year, at the limit established under this paragraph for the previous year increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of such subsequent year.
(3)(A) In establishing limits under subsection (a) on payment for rural health clinic services furnished on or after April 1, 2021, by a rural health clinic described in subparagraph (B), the Secretary shall establish such limit, with respect to each such rural health clinic, for services provided—
(i) in 2021, after March 31, at an amount equal to the greater of—
(I) with respect to a rural health clinic that had a per visit payment amount established for services furnished in 2020—
(aa) the per visit payment amount applicable to such rural health clinic for rural health clinic services furnished in 2020, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of 2021; or
(bb) the limit described in paragraph (2)(A); and
(II) with respect to a rural health clinic that did not have a per visit payment amount established for services furnished in 2020—
(aa) the per visit payment amount applicable to such rural health clinic for rural health clinic services furnished in 2021; or
(bb) the limit described in paragraph (2)(A); and
(ii) in a subsequent year, at an amount equal to the greater of—
(I) the amount established under subclause (I) or (II) of clause (i), as applicable, or this subclause for the previous year with respect to such rural health clinic, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of such subsequent year; or
(II) the limit established under paragraph (2) for such subsequent year.
(B) A rural health clinic described in this subparagraph is a rural health clinic that—
(i) as of December 31, 2020, was in a hospital with less than 50 beds and after such date such hospital continues to have less than 50 beds (not taking into account any increase in the number of beds pursuant to a waiver under subsection (b)(1)(A) of
(ii)(I) as of December 31, 2020, was enrolled under
(II) submitted an application for enrollment under
(g) Physical therapy services
(1)(A) Subject to paragraphs (4) and (5), in the case of physical therapy services of the type described in
(B) With respect to services furnished during 2018 or a subsequent year, in the case of physical therapy services of the type described in
(2) The amount specified in this paragraph—
(A) for 1999, 2000, and 2001, is $1,500, and
(B) for a subsequent year is the amount specified in this paragraph for the preceding year increased by the percentage increase in the MEI (as defined in
except that if an increase under subparagraph (B) for a year is not a multiple of $10, it shall be rounded to the nearest multiple of $10.
(3)(A) Subject to paragraphs (4) and (5), in the case of occupational therapy services (of the type that are described in
(B) With respect to services furnished during 2018 or a subsequent year, in the case of occupational therapy services (of the type that are described in
(4) This subsection shall not apply to expenses incurred with respect to services furnished during 2000, 2001, 2002, 2004, and 2005.
(5)(A) With respect to expenses incurred during the period beginning on January 1, 2006, and ending on December 31, 2017, for services, the Secretary shall implement a process under which an individual enrolled under this part may, upon request of the individual or a person on behalf of the individual, obtain an exception from the uniform dollar limitation specified in paragraph (2), for services described in paragraphs (1) and (3) if the provision of such services is determined to be medically necessary and if the requirement of subparagraph (B) is met. Under such process, if the Secretary does not make a decision on such a request for an exception within 10 business days of the date of the Secretary's receipt of the request made in accordance with such requirement, the Secretary shall be deemed to have found the services to be medically necessary.
(B) In the case of outpatient therapy services for which an exception is requested under the first sentence of subparagraph (A), the claim for such services shall contain an appropriate modifier (such as the KX modifier used as of February 22, 2012) indicating that such services are medically necessary as justified by appropriate documentation in the medical record involved.
(C)(i) In applying this paragraph with respect to a request for an exception with respect to expenses that would be incurred for outpatient therapy services (including services described in subsection (a)(8)(B)) that would exceed the threshold described in clause (ii) for a year, the request for such an exception, for services furnished on or after October 1, 2012, shall be subject to a manual medical review process that, subject to subparagraph (E), is similar to the manual medical review process used for certain exceptions under this paragraph in 2006.
(ii) The threshold under this clause for a year is $3,700. Such threshold shall be applied separately—
(I) for physical therapy services and speech-language pathology services; and
(II) for occupational therapy services.
(E)(i) 6 In place of the manual medical review process under subparagraph (C)(i), the Secretary shall implement a process for medical review under this subparagraph under which the Secretary shall identify and conduct medical review for services described in subparagraph (C)(i) furnished by a provider of services or supplier (in this subparagraph referred to as a "therapy provider") using such factors as the Secretary determines to be appropriate.
(ii) Such factors may include the following:
(I) The therapy provider has had a high claims denial percentage for therapy services under this part or is less compliant with applicable requirements under this subchapter.
(II) The therapy provider has a pattern of billing for therapy services under this part that is aberrant compared to peers or otherwise has questionable billing practices for such services, such as billing medically unlikely units of services in a day.
(III) The therapy provider is newly enrolled under this subchapter or has not previously furnished therapy services under this part.
(IV) The services are furnished to treat a type of medical condition.
(V) The therapy provider is part of group 7 that includes another therapy provider identified using the factors determined under this subparagraph.
(iii) For purposes of carrying out this subparagraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(iv) The targeted review process under this subparagraph shall not apply to services for which expenses are incurred beyond the period for which the exceptions process under subparagraph (A) is implemented, except as such process is applied under paragraph (7)(B).
(6)(A) In applying paragraphs (1) and (3) to services furnished during the period beginning not later than October 1, 2012, and ending on December 31, 2017, the exclusion of services described in subsection (a)(8)(B) from the uniform dollar limitation specified in paragraph (2) shall not apply to such services furnished during 2012 through 2017.
(B)(i) With respect to outpatient therapy services furnished beginning on or after January 1, 2013, and before January 1, 2014, for which payment is made under
(ii) Nothing in clause (i) shall be construed as changing the method of payment for outpatient therapy services under
(7) For purposes of paragraphs (1)(B) and (3)(B), with respect to services described in such paragraphs, the requirements described in this paragraph are as follows:
(A) Inclusion of appropriate modifier
The claim for such services contains an appropriate modifier (such as the KX modifier described in paragraph (5)(B)) indicating that such services are medically necessary as justified by appropriate documentation in the medical record involved.
(B) Targeted medical review for certain services above threshold
(i) In general
In the case where expenses that would be incurred for such services would exceed the threshold described in clause (ii) for the year, such services shall be subject to the process for medical review implemented under paragraph (5)(E).
(ii) Threshold
The threshold under this clause for—
(I) a year before 2028, is $3,000;
(II) 2028, is the amount specified in subclause (I) increased by the percentage increase in the MEI (as defined in
(III) a subsequent year, is the amount specified in this clause for the preceding year increased by the percentage increase in the MEI (as defined in
except that if an increase under subclause (II) or (III) for a year is not a multiple of $10, it shall be rounded to the nearest multiple of $10.
(iii) Application
The threshold under clause (ii) shall be applied separately—
(I) for physical therapy services and speech-language pathology services; and
(II) for occupational therapy services.
(iv) Funding
For purposes of carrying out this subparagraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(8) With respect to services furnished on or after January 1, 2013, where payment may not be made as a result of application of paragraphs (1) and (3),
(h) Fee schedules for clinical diagnostic laboratory tests; percentage of prevailing charge level; nominal fee for samples; adjustments; recipients of payments; negotiated payment rate
(1)(A) Subject to
(B) In the case of clinical diagnostic laboratory tests performed by a physician or by a laboratory (other than tests performed by a qualified hospital laboratory (as defined in subparagraph (D)) for outpatients of such hospital), the fee schedules established under subparagraph (A) shall be established on a regional, statewide, or carrier service area basis (as the Secretary may determine to be appropriate) for tests furnished on or after July 1, 1984.
(C) In the case of clinical diagnostic laboratory tests performed by a qualified hospital laboratory (as defined in subparagraph (D)) for outpatients of such hospital, the fee schedules established under subparagraph (A) shall be established on a regional, statewide, or carrier service area basis (as the Secretary may determine to be appropriate) for tests furnished on or after July 1, 1984.
(D) In this subsection, the term "qualified hospital laboratory" means a hospital laboratory, in a sole community hospital (as defined in
(2)(A)(i) Except as provided in clause (v), subparagraph (B), and paragraph (4), the Secretary shall set the fee schedules at 60 percent (or, in the case of a test performed by a qualified hospital laboratory (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
(ii) Notwithstanding clause (i)—
(I) any change in the fee schedules which would have become effective under this subsection for tests furnished on or after January 1, 1988, shall not be effective for tests furnished during the 3-month period beginning on January 1, 1988,
(II) the Secretary shall not adjust the fee schedules under clause (i) to take into account any increase in the consumer price index for 1988,
(III) the annual adjustment in the fee schedules determined under clause (i) for each of the years 1991, 1992, and 1993 shall be 2 percent, and
(IV) the annual adjustment in the fee schedules determined under clause (i) for each of the years 1994 and 1995, 1998 through 2002, and 2004 through 2008 shall be 0 percent.
(iii) In establishing fee schedules under clause (i) with respect to automated tests and tests (other than cytopathology tests) which before July 1, 1984, the Secretary made subject to a limit based on lowest charge levels under the sixth sentence of
(iv) After determining the adjustment to the fee schedules under clause (i), the Secretary shall reduce such adjustment—
(I) for 2011 and each subsequent year, by the productivity adjustment described in
(II) for each of 2011 through 2015, by 1.75 percentage points.
Subclause (I) shall not apply in a year where the adjustment to the fee schedules determined under clause (i) is 0.0 or a percentage decrease for a year. The application of the productivity adjustment under subclause (I) shall not result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year. The application of subclause (II) may result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year, and may result in payment rates for a year being less than such payment rates for the preceding year.
(v) The Secretary shall reduce by 2 percent the fee schedules otherwise determined under clause (i) for 2013, and such reduced fee schedules shall serve as the base for 2014 and subsequent years.
(B) The Secretary may make further adjustments or exceptions to the fee schedules to assure adequate reimbursement of (i) emergency laboratory tests needed for the provision of bona fide emergency services, and (ii) certain low volume high-cost tests where highly sophisticated equipment or extremely skilled personnel are necessary to assure quality.
(3) In addition to the amounts provided under the fee schedules (for tests furnished before January 1, 2017) or under
(4)(A) In establishing any fee schedule under this subsection, the Secretary may provide for an adjustment to take into account, with respect to the portion of the expenses of clinical diagnostic laboratory tests attributable to wages, the relative difference between a region's or local area's wage rates and the wage rate presumed in the data on which the schedule is based.
(B) For purposes of subsections (a)(1)(D)(i) and (a)(2)(D)(i), the limitation amount for a clinical diagnostic laboratory test performed—
(i) on or after July 1, 1986, and before April 1, 1988, is equal to 115 percent of the median of all the fee schedules established for that test for that laboratory setting under paragraph (1),
(ii) after March 31, 1988, and before January 1, 1990, is equal to the median of all the fee schedules established for that test for that laboratory setting under paragraph (1),
(iii) after December 31, 1989, and before January 1, 1991, is equal to 93 percent of the median of all the fee schedules established for that test for that laboratory setting under paragraph (1),
(iv) after December 31, 1990, and before January 1, 1994, is equal to 88 percent of such median,
(v) after December 31, 1993, and before January 1, 1995, is equal to 84 percent of such median,
(vi) after December 31, 1994, and before January 1, 1996, is equal to 80 percent of such median,
(vii) after December 31, 1995, and before January 1, 1998, is equal to 76 percent of such median, and
(viii) after December 31, 1997, is equal to 74 percent of such median (or 100 percent of such median in the case of a clinical diagnostic laboratory test performed on or after January 1, 2001, that the Secretary determines is a new test for which no limitation amount has previously been established under this subparagraph).
(5)(A) In the case of a bill or request for payment for a clinical diagnostic laboratory test for which payment may otherwise be made under this part on an assignment-related basis or under a provider agreement under
(i) if a physician performed or supervised the performance of such test, payment may be made to another physician with whom he shares his practice,
(ii) in the case of a test performed at the request of a laboratory by another laboratory, payment may be made to the referring laboratory but only if—
(I) the referring laboratory is located in, or is part of, a rural hospital,
(II) the referring laboratory is wholly owned by the entity performing such test, the referring laboratory wholly owns the entity performing such test, or both the referring laboratory and the entity performing such test are wholly-owned by a third entity, or
(III) not more than 30 percent of the clinical diagnostic laboratory tests for which such referring laboratory (but not including a laboratory described in subclause (II)),8 receives requests for testing during the year in which the test is performed 8 are performed by another laboratory, and
(iii) in the case of a clinical diagnostic laboratory test provided under an arrangement (as defined in
(B) In the case of such a bill or request for payment for a clinical diagnostic laboratory test for which payment may otherwise be made under this part, and which is not described in subparagraph (A), payment may be made to the beneficiary only on the basis of the itemized bill of the person or entity which performed or supervised the performance of the test.
(C) Payment for a clinical diagnostic laboratory test, including a test performed in a physician's office but excluding a test performed by a rural health clinic may only be made on an assignment-related basis or to a provider of services with an agreement in effect under
(D) A person may not bill for a clinical diagnostic laboratory test, including a test performed in a physician's office but excluding a test performed by a rural health clinic, other than on an assignment-related basis. If a person knowingly and willfully and on a repeated basis bills for a clinical diagnostic laboratory test in violation of the previous sentence, the Secretary may apply sanctions against the person in the same manner as the Secretary may apply sanctions against a physician in accordance with paragraph (2) of
(6) For tests furnished before January 1, 2017, in the case of any diagnostic laboratory test payment for which is not made on the basis of a fee schedule under paragraph (1), the Secretary may establish a payment rate which is acceptable to the person or entity performing the test and which would be considered the full charge for such tests. Such negotiated rate shall be limited to an amount not in excess of the total payment that would have been made for the services in the absence of such rate.
(7) Notwithstanding paragraphs (1) and (4) and
(8)(A) The Secretary shall establish by regulation 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, 2005 (in this paragraph referred to as "new tests").
(B) Determinations under subparagraph (A) shall be made only after the Secretary—
(i) makes available to the public (through an Internet website and other appropriate mechanisms) a list that includes any such test for which establishment of a payment amount under this subsection 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 (and data on which recommendations are based) from the public on the appropriate basis under this subsection for establishing payment amounts for the tests on such list;
(iii) not less than 30 days after publication of such notice convenes a meeting, that includes representatives of officials of the Centers for Medicare & Medicaid Services involved in determining payment amounts, to receive such comments and recommendations (and data on which the recommendations are based);
(iv) taking into account the comments and recommendations (and accompanying data) received at such meeting, develops and makes available to the public (through an Internet website and other appropriate mechanisms) a list of proposed determinations with respect to the appropriate basis for establishing a payment amount under this subsection for each such code, together with an explanation of the reasons for each such determination, the data on which the determinations are based, and a request for public written comments on the proposed determination; and
(v) taking into account the comments received during the public comment period, develops and makes available to the public (through an Internet website and other appropriate mechanisms) a list of final determinations of the payment amounts for such tests under this subsection, together with the rationale for each such determination, the data on which the determinations are based, and responses to comments and suggestions received from the public.
(C) Under the procedures established pursuant to subparagraph (A), the Secretary shall—
(i) set forth the criteria for making determinations under subparagraph (A); and
(ii) make available to the public the data (other than proprietary data) considered in making such determinations.
(D) The Secretary may convene such further public meetings to receive public comments on payment amounts for new tests under this subsection as the Secretary deems appropriate.
(E) For purposes of this paragraph:
(i) The term "HCPCS" refers to the Health Care Procedure Coding System.
(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).
(9) Notwithstanding any other provision in this part, in the case of any diagnostic laboratory test for HbA1c that is labeled by the Food and Drug Administration for home use and is furnished on or after April 1, 2008, the payment rate for such test shall be the payment rate established under this part for a glycated hemoglobin test (identified as of October 1, 2007, by HCPCS code 83036 (and any succeeding codes)).
(i) Outpatient surgery
(1) The Secretary shall, in consultation with appropriate medical organizations—
(A) specify those surgical procedures which are appropriately (when considered in terms of the proper utilization of hospital inpatient facilities) performed on an inpatient basis in a hospital but which also can be performed safely on an ambulatory basis in an ambulatory surgical center (meeting the standards specified under
(B) specify those surgical procedures which are appropriately (when considered in terms of the proper utilization of hospital inpatient facilities) performed on an inpatient basis in a hospital but which also can be performed safely on an ambulatory basis in a physician's office.
The lists of procedures established under subparagraphs (A) and (B) shall be reviewed and updated not less often than every 2 years, in consultation with appropriate trade and professional organizations.
(2)(A) For services furnished prior to the implementation of the system described in subparagraph (D), subject to subparagraph (E), the amount of payment to be made for facility services furnished in connection with a surgical procedure specified pursuant to paragraph (1)(A) and furnished to an individual in an ambulatory surgical center described in such paragraph shall be equal to 80 percent of a standard overhead amount established by the Secretary (with respect to each such procedure) on the basis of the Secretary's estimate of a fair fee which—
(i) takes into account the costs incurred by such centers, or classes of centers, generally in providing services furnished in connection with the performance of such procedure, as determined in accordance with a survey (based upon a representative sample of procedures and facilities) of the actual audited costs incurred by such centers in providing such services,
(ii) takes such costs into account in such a manner as will assure that the performance of the procedure in such a center will result in substantially less amounts paid under this subchapter than would have been paid if the procedure had been performed on an inpatient basis in a hospital, and
(iii) in the case of insertion of an intraocular lens during or subsequent to cataract surgery includes payment which is reasonable and related to the cost of acquiring the class of lens involved.
Each amount so established shall be reviewed and updated not later than July 1, 1987, and annually thereafter to take account of varying conditions in different areas.
(B) The amount of payment to be made under this part for facility services furnished, in connection with a surgical procedure specified pursuant to paragraph (1)(B), in a physician's office shall be equal to 80 percent of a standard overhead amount established by the Secretary (with respect to each such procedure) on the basis of the Secretary's estimate of a fair fee which—
(i) takes into account additional costs, not usually included in the professional fee, incurred by physicians in securing, maintaining, and staffing the facilities and ancillary services appropriate for the performance of such procedure in the physician's office, and
(ii) takes such items into account in such a manner which will assure that the performance of such procedure in the physician's office will result in substantially less amounts paid under this subchapter than would have been paid if the services had been furnished on an inpatient basis in a hospital.
Each amount so established shall be reviewed and updated not later than July 1, 1987, and annually thereafter to take account of varying conditions in different areas.
(C)(i) Notwithstanding the second sentence of each of subparagraphs (A) and (B), except as otherwise specified in clauses (ii), (iii), and (iv), if the Secretary has not updated amounts established under such subparagraphs or under subparagraph (D), with respect to facility services furnished during a fiscal year (beginning with fiscal year 1986 or a calendar year (beginning with 2006)), such amounts shall be increased by the percentage increase in the Consumer Price Index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved.
(ii) In each of the fiscal years 1998 through 2002, the increase under this subparagraph shall be reduced (but not below zero) by 2.0 percentage points.
(iii) In fiscal year 2004, beginning with April 1, 2004, the increase under this subparagraph shall be the Consumer Price Index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with March 31, 2003, minus 3.0 percentage points.
(iv) In fiscal year 2005, the last quarter of calendar year 2005, and each of calendar years 2006 through 2009, the increase under this subparagraph shall be 0 percent.
(D)(i) Taking into account the recommendations in the report under section 626(d) of Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Secretary shall implement a revised payment system for payment of surgical services furnished in ambulatory surgical centers.
(ii) In the year the system described in clause (i) is implemented, such system shall be designed to result in the same aggregate amount of expenditures for such services as would be made if this subparagraph did not apply, as estimated by the Secretary and taking into account reduced expenditures that would apply if subparagraph (E) were to continue to apply, as estimated by the Secretary.
(iii) The Secretary shall implement the system described in clause (i) for periods in a manner so that it is first effective beginning on or after January 1, 2006, and not later than January 1, 2008.
(iv) The Secretary may implement such system in a manner so as to provide for a reduction in any annual update for failure to report on quality measures in accordance with paragraph (7).
(v) In implementing the system described in clause (i) for 2011 and each subsequent year, any annual update under such system for the year, after application of clause (iv), shall be reduced by the productivity adjustment described in
(vi) There shall be no administrative or judicial review under
(E) With respect to surgical procedures furnished on or after January 1, 2007, and before the effective date of the implementation of a revised payment system under subparagraph (D), if—
(i) the standard overhead amount under subparagraph (A) for a facility service for such procedure, without the application of any geographic adjustment, exceeds
(ii) the Medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department services under paragraph (3)(D) of subsection (t) for such service for such year, determined without regard to geographic adjustment under paragraph (2)(D) of such subsection,
the Secretary shall substitute under subparagraph (A) the amount described in clause (ii) for the standard overhead amount for such service referred to in clause (i).
(3)(A) The aggregate amount of the payments to be made under this part for outpatient hospital facility services or critical access hospital services furnished before January 1, 1999, in connection with surgical procedures specified under paragraph (1)(A) shall be equal to the lesser of—
(i) the amount determined with respect to such services under subsection (a)(2)(B); or
(ii) the blend amount (described in subparagraph (B)).
(B)(i) The blend amount for a cost reporting period is the sum of—
(I) the cost proportion (as defined in clause (ii)(I)) of the amount described in subparagraph (A)(i), and
(II) the ASC proportion (as defined in clause (ii)(II)) of the standard overhead amount payable with respect to the same surgical procedure as if it were provided in an ambulatory surgical center in the same area, as determined under paragraph (2)(A), less the amount a provider may charge as described in clause (ii) of
(ii) Subject to paragraph (4), in this paragraph:
(I) The term "cost proportion" means 75 percent for cost reporting periods beginning in fiscal year 1988, 50 percent for portions of cost reporting periods beginning on or after October 1, 1988, and ending on or before December 31, 1990, and 42 percent for portions of cost reporting periods beginning on or after January 1, 1991.
(II) The term "ASC proportion" means 25 percent for cost reporting periods beginning in fiscal year 1988, 50 percent for portions of cost reporting periods beginning on or after October 1, 1988, and ending on or before December 31, 1990, and 58 percent for portions of cost reporting periods beginning on or after January 1, 1991.
(4)(A) In the case of a hospital that—
(i) makes application to the Secretary and demonstrates that it specializes in eye services or eye and ear services (as determined by the Secretary),
(ii) receives more than 30 percent of its total revenues from outpatient services, and
(iii) on October 1, 1987—
(I) was an eye specialty hospital or an eye and ear specialty hospital, or
(II) was operated as an eye or eye and ear unit (as defined in subparagraph (B)) of a general acute care hospital which, on the date of the application described in clause (i), operates less than 20 percent of the beds that the hospital operated on October 1, 1987, and has sold or otherwise disposed of a substantial portion of the hospital's other acute care operations,
the cost proportion and ASC proportion in effect under subclauses (I) and (II) of paragraph (3)(B)(ii) for cost reporting periods beginning in fiscal year 1988 shall remain in effect for cost reporting periods beginning on or after October 1, 1988, and before January 1, 1995.
(B) For purposes of this 10 subparagraph (A)(iii)(II), the term "eye or eye and ear unit" means a physically separate or distinct unit containing separate surgical suites devoted solely to eye or eye and ear services.
(5)(A) The Secretary is authorized to provide by regulations that in the case of a surgical procedure, specified by the Secretary pursuant to paragraph (1)(A), performed in an ambulatory surgical center described in such paragraph, there shall be paid (in lieu of any amounts otherwise payable under this part) with respect to the facility services furnished by such center and with respect to all related services (including physicians' services, laboratory, X-ray, and diagnostic services) a single all-inclusive fee established pursuant to subparagraph (B), if all parties furnishing all such services agree to accept such fee (to be divided among the parties involved in such manner as they shall have previously agreed upon) as full payment for the services furnished.
(B) In implementing this paragraph, the Secretary shall establish with respect to each surgical procedure specified pursuant to paragraph (1)(A) the amount of the all-inclusive fee for such procedure, taking into account such factors as may be appropriate. The amount so established with respect to any surgical procedure shall be reviewed periodically and may be adjusted by the Secretary, when appropriate, to take account of varying conditions in different areas.
(6) Any person, including a facility having an agreement under
(7)(A) For purposes of paragraph (2)(D)(iv), the Secretary may provide, in the case of an ambulatory surgical center that does not submit, to the Secretary in accordance with this paragraph, data required to be submitted on measures selected under this paragraph with respect to a year, any annual increase provided under the system established under paragraph (2)(D) for such year shall be reduced by 2.0 percentage points. A reduction under this subparagraph shall apply only with respect to the year involved and the Secretary shall not take into account such reduction in computing any annual increase factor for a subsequent year.
(B) Except as the Secretary may otherwise provide, the provisions of subparagraphs (B), (C), (D), and (E) of paragraph (17) of subsection (t) shall apply with respect to services of ambulatory surgical centers under this paragraph in a similar manner to the manner in which they apply under such paragraph and, for purposes of this subparagraph, any reference to a hospital, outpatient setting, or outpatient hospital services is deemed a reference to an ambulatory surgical center, the setting of such a center, or services of such a center, respectively.
(8) The Secretary shall conduct a similar type of review as required under paragraph (22) of
(9) In the case of a part B rebatable drug (as defined in paragraph (2) of
(10)
(A)
(B)
(j) Accrual of interest on balance of excess or deficit not paid
Whenever a final determination is made that the amount of payment made under this part either to a provider of services or to another person pursuant to an assignment under
(k) Hepatitis B vaccine
With respect to services described in
(l) Fee schedule for services of certified registered nurse anesthetists
(1)(A) The Secretary shall establish a fee schedule for services of certified registered nurse anesthetists under
(B) In establishing the fee schedule under this paragraph the Secretary may utilize a system of time units, a system of base and time units, or any appropriate methodology.
(C) The provisions of this subsection shall not apply to certain services furnished in certain hospitals in rural areas under the provisions of section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as amended by section 6132 of the Omnibus Budget Reconciliation Act of 1989.
(2) Except as provided in paragraph (3), the fee schedule established under paragraph (1) shall be initially based on audited data from cost reporting periods ending in fiscal year 1985 and such other data as the Secretary determines necessary.
(3)(A) In establishing the initial fee schedule for those services, the Secretary shall adjust the fee schedule to the extent necessary to ensure that the estimated total amount which will be paid under this subchapter for those services plus applicable coinsurance in 1989 will equal the estimated total amount which would be paid under this subchapter for those services in 1989 if the services were included as inpatient hospital services and payment for such services was made under part A in the same manner as payment was made in fiscal year 1987, adjusted to take into account changes in prices and technology relating to the administration of anesthesia.
(B) The Secretary shall also reduce the prevailing charge of physicians for medical direction of a certified registered nurse anesthetist, or the fee schedule for services of certified registered nurse anesthetists, or both, to the extent necessary to ensure that the estimated total amount which will be paid under this subchapter plus applicable coinsurance for such medical direction and such services in 1989 and 1990 will not exceed the estimated total amount which would have been paid plus applicable coinsurance but for the enactment of the amendments made by section 9320 of the Omnibus Budget Reconciliation Act of 1986. A reduced prevailing charge under this subparagraph shall become the prevailing charge but for subsequent years for purposes of applying the economic index under the fourth sentence of
(4)(A) Except as provided in subparagraphs (C) and (D), in determining the amount paid under the fee schedule under this subsection for services furnished on or after January 1, 1991, by a certified registered nurse anesthetist who is not medically directed—
(i) the conversion factor shall be—
(I) for services furnished in 1991, $15.50,
(II) for services furnished in 1992, $15.75,
(III) for services furnished in 1993, $16.00,
(IV) for services furnished in 1994, $16.25,
(V) for services furnished in 1995, $16.50,
(VI) for services furnished in 1996, $16.75, and
(VII) for services furnished in calendar years after 1996, the previous year's conversion factor increased by the update determined under
(ii) the payment areas to be used shall be the fee schedule areas used under
(iii) the geographic adjustment factors to be applied to the conversion factor under clause (i) for services in a fee schedule area or locality is— 12
(I) in the case of services furnished in 1991, the geographic work index value and the geographic practice cost index value specified in
(II) in the case of services furnished after 1991, the geographic work index value, the geographic practice cost index value, and the geographic malpractice index value used for determining payments for physicians' services that are anesthesia services under
with 70 percent of the conversion factor treated as attributable to work and 30 percent as attributable to overhead for services furnished in 1991 (and the portions attributable to work, practice expenses, and malpractice expenses in 1992 and thereafter being the same as is applied under
(B)(i) Except as provided in clause (ii) and subparagraph (D), in determining the amount paid under the fee schedule under this subsection for services furnished on or after January 1, 1991, and before January 1, 1994, by a certified registered nurse anesthetist who is medically directed, the Secretary shall apply the same methodology specified in subparagraph (A).
(ii) The conversion factor used under clause (i) shall be—
(I) for services furnished in 1991, $10.50,
(II) for services furnished in 1992, $10.75, and
(III) for services furnished in 1993, $11.00.
(iii) In the case of services of a certified registered nurse anesthetist who is medically directed or medically supervised by a physician which are furnished on or after January 1, 1994, the fee schedule amount shall be one-half of the amount described in
(C) Notwithstanding subclauses (I) through (V) of subparagraph (A)(i)—
(i) in the case of a 1990 conversion factor that is greater than $16.50, the conversion factor for a calendar year after 1990 and before 1996 shall be the 1990 conversion factor reduced by the product of the last digit of the calendar year and one-fifth of the amount by which the 1990 conversion factor exceeds $16.50; and
(ii) in the case of a 1990 conversion factor that is greater than $15.49 but less than $16.51, the conversion factor for a calendar year after 1990 and before 1996 shall be the greater of—
(I) the 1990 conversion factor, or
(II) the conversion factor specified in subparagraph (A)(i) for the year involved.
(D) Notwithstanding subparagraph (C), in no case may the conversion factor used to determine payment for services in a fee schedule area or locality under this subsection, as adjusted by the adjustment factors specified in subparagraphs 13 (A)(iii), exceed the conversion factor used to determine the amount paid for physicians' services that are anesthesia services in the area or locality.
(5)(A) Payment for the services of a certified registered nurse anesthetist (for which payment may otherwise be made under this part) may be made on the basis of a claim or request for payment presented by the certified registered nurse anesthetist furnishing such services, or by a hospital, critical access hospital, physician, group practice, or ambulatory surgical center with which the certified registered nurse anesthetist furnishing such services has an employment or contractual relationship that provides for payment to be made under this part for such services to such hospital, critical access hospital, physician, group practice, or ambulatory surgical center.
(B) No hospital or critical access hospital that presents a claim or request for payment for services of a certified nurse anesthetist under this part may treat any uncollected coinsurance amount imposed under this part with respect to such services as a bad debt of such hospital or critical access hospital for purposes of this subchapter.
(6) If an adjustment under paragraph (3)(B) results in a reduction in the reasonable charge for a physicians' service and a nonparticipating physician furnishes the service to an individual entitled to benefits under this part after the effective date of the reduction, the physician's actual charge is subject to a limit under
(m) Incentive payments for physicians' services furnished in underserved areas
(1) In the case of physicians' services furnished in a year to an individual, who is covered under the insurance program established by this part and who incurs expenses for such services, in an area that is designated (under
(2) For each health professional shortage area identified in paragraph (1) that consists of an entire county, the Secretary shall provide for the additional payment under paragraph (1) without any requirement on the physician to identify the health professional shortage area involved. The Secretary may implement the previous sentence using the method specified in subsection (u)(4)(C).
(3) The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a list of the health professional shortage areas identified in paragraph (1) that consist of a partial county to facilitate the additional payment under paragraph (1) in such areas.
(4) There shall be no administrative or judicial review under
(A) the identification of a county or area;
(B) the assignment of a specialty of any physician under this paragraph;
(C) the assignment of a physician to a county under this subsection; or
(D) the assignment of a postal ZIP Code to a county or other area under this subsection.
(n) Payments to hospital outpatient departments for radiology; amount; definitions
(1)(A) 14 The aggregate amount of the payments to be made for all or part of a cost reporting period for services described in subsection (a)(2)(E)(i) furnished under this part on or after October 1, 1988, and before January 1, 1999, and for services described in subsection (a)(2)(E)(ii) furnished under this part on or after October 1, 1989, and before January 1, 1999, shall be equal to the lesser of—
(i) the amount determined with respect to such services under subsection (a)(2)(B), or
(ii) the blend amount for radiology services and diagnostic procedures determined in accordance with subparagraph (B).
(B)(i) The blend amount for radiology services and diagnostic procedures for a cost reporting period is the sum of—
(I) the cost proportion (as defined in clause (ii)) of the amount described in subparagraph (A)(i); and
(II) the charge proportion (as defined in clause (ii)(II)) of 62 percent (for services described in subsection (a)(2)(E)(i)), or (for procedures described in subsection (a)(2)(E)(ii)), 42 percent or such other percent established by the Secretary (or carriers acting pursuant to guidelines issued by the Secretary) based on prevailing charges established with actual charge data, of the prevailing charge or (for services described in subsection (a)(2)(E)(i) furnished on or after April 1, 1989 and for services described in subsection (a)(2)(E)(ii) furnished on or after January 1, 1992) the fee schedule amount established for participating physicians for the same services as if they were furnished in a physician's office in the same locality as determined under
(ii) In this subparagraph:
(I) The term "cost proportion" means 50 percent, except that such term means 65 percent in the case of outpatient radiology services for portions of cost reporting periods which occur in fiscal year 1989 and in the case of diagnostic procedures described in subsection (a)(2)(E)(ii) for portions of cost reporting periods which occur in fiscal year 1990, and such term means 42 percent in the case of outpatient radiology services for portions of cost reporting periods beginning on or after January 1, 1991.
(II) The term "charge proportion" means 100 percent minus the cost proportion.
(o) Limitation on benefit for payment for therapeutic shoes for individuals with severe diabetic foot disease
(1) In the case of shoes described in
(A) no payment may be made under this part, with respect to any individual for any year, for the furnishing of—
(i) more than one pair of custom molded shoes (including inserts provided with such shoes) and 2 additional pairs of inserts for such shoes, or
(ii) more than one pair of extra-depth shoes (not including inserts provided with such shoes) and 3 pairs of inserts for such shoes, and
(B) with respect to expenses incurred in any calendar year, no more than the amount of payment applicable under paragraph (2) shall be considered as incurred expenses for purposes of subsections (a) and (b).
Payment for shoes (or inserts) under this part shall be considered to include payment for any expenses for the fitting of such shoes (or inserts).
(2)(A) Except as provided by the Secretary under subparagraphs (B) and (C), the amount of payment under this paragraph for custom molded shoes, extra-depth shoes, and inserts shall be the amount determined for such items by the Secretary under
(B) The Secretary may establish payment amounts for shoes and inserts that are lower than the amount established under
(C) In accordance with procedures established by the Secretary, an individual entitled to benefits with respect to shoes described in
(3) In this subchapter, the term "shoes" includes, except for purposes of subparagraphs (A)(ii) and (B) of paragraph (2), inserts for extra-depth shoes.
(p) Repealed. Pub. L. 103–432, title I, §123(b)(2)(A)(ii), Oct. 31, 1994, 108 Stat. 4411
(q) Requests for payment to include information on referring physician
(1) Each request for payment, or bill submitted, for an item or service furnished by an entity for which payment may be made under this part and for which the entity knows or has reason to believe there has been a referral by a referring physician (within the meaning of
(2)(A) In the case of a request for payment for an item or service furnished by an entity under this part on an assignment-related basis and for which information is required to be provided under paragraph (1) but not included, payment may be denied under this part.
(B) In the case of a request for payment for an item or service furnished by an entity under this part not submitted on an assignment-related basis and for which information is required to be provided under paragraph (1) but not included—
(i) if the entity knowingly and willfully fails to provide such information promptly upon request of the Secretary or a carrier, the entity may be subject to a civil money penalty in an amount not to exceed $2,000, and
(ii) if the entity knowingly, willfully, and in repeated cases fails, after being notified by the Secretary of the obligations and requirements of this subsection to provide the information required under paragraph (1), the entity may be subject to exclusion from participation in the programs under this chapter for a period not to exceed 5 years, in accordance with the procedures of subsections (c), (f), and (g) of
The provisions of
(r) Cap on prevailing charge; billing on assignment-related basis
(1) With respect to services described in
(2) No hospital or critical access hospital that presents a claim or request for payment under this part for services described in
(s) Other prepaid organizations
The Secretary may not provide for payment under subsection (a)(1)(A) with respect to an organization unless the organization provides assurances satisfactory to the Secretary that the organization meets the requirement of
(t) Prospective payment system for hospital outpatient department services
(1) Amount of payment
(A) In general
With respect to covered OPD services (as defined in subparagraph (B)) furnished during a year beginning with 1999, the amount of payment under this part shall be determined under a prospective payment system established by the Secretary in accordance with this subsection.
(B) Definition of covered OPD services
For purposes of this subsection, the term "covered OPD services"—
(i) means hospital outpatient services designated by the Secretary;
(ii) subject to clause (iv), includes inpatient hospital services designated by the Secretary that are covered under this part and furnished to a hospital inpatient who (I) is entitled to benefits under part A but has exhausted benefits for inpatient hospital services during a spell of illness, or (II) is not so entitled;
(iii) includes implantable items described in paragraph (3), (6), or (8) of
(iv) does not include any therapy services described in subsection (a)(8) or ambulance services, for which payment is made under a fee schedule described in
(v) does not include applicable items and services (as defined in subparagraph (A) of paragraph (21)) that are furnished on or after January 1, 2017, by an off-campus outpatient department of a provider (as defined in subparagraph (B) of such paragraph).
(2) System requirements
Under the payment system—
(A) the Secretary shall develop a classification system for covered OPD services;
(B) the Secretary may establish groups of covered OPD services, within the classification system described in subparagraph (A), so that services classified within each group are comparable clinically and with respect to the use of resources and so that an implantable item is classified to the group that includes the service to which the item relates;
(C) the Secretary shall, using data on claims from 1996 and using data from the most recent available cost reports, establish relative payment weights for covered OPD services (and any groups of such services described in subparagraph (B)) based on median (or, at the election of the Secretary, mean) hospital costs and shall determine projections of the frequency of utilization of each such service (or group of services) in 1999;
(D) subject to paragraph (19), the Secretary shall determine a wage adjustment factor to adjust the portion of payment and coinsurance attributable to labor-related costs for relative differences in labor and labor-related costs across geographic regions in a budget neutral manner;
(E) the Secretary shall establish, in a budget neutral manner, outlier adjustments under paragraph (5) and transitional pass-through payments under paragraph (6) and temporary additional payments for non-opioid treatments for pain relief under paragraph (16)(G), and other adjustments as determined to be necessary to ensure equitable payments, such as adjustments for certain classes of hospitals;
(F) the Secretary shall develop a method for controlling unnecessary increases in the volume of covered OPD services;
(G) the Secretary shall create additional groups of covered OPD services that classify separately those procedures that utilize contrast agents from those that do not; and
(H) with respect to devices of brachytherapy consisting of a seed or seeds (or radioactive source), the Secretary shall create additional groups of covered OPD services that classify such devices separately from the other services (or group of services) paid for under this subsection in a manner reflecting the number, isotope, and radioactive intensity of such devices furnished, including separate groups for palladium-103 and iodine-125 devices and for stranded and non-stranded devices furnished on or after July 1, 2007.
For purposes of subparagraph (B), items and services within a group shall not be treated as "comparable with respect to the use of resources" if the highest median cost (or mean cost, if elected by the Secretary under subparagraph (C)) for an item or service within the group is more than 2 times greater than the lowest median cost (or mean cost, if so elected) for an item or service within the group; except that the Secretary may make exceptions in unusual cases, such as low volume items and services, but may not make such an exception in the case of a drug or biological that has been designated as an orphan drug under
(3) Calculation of base amounts
(A) Aggregate amounts that would be payable if deductibles were disregarded
The Secretary shall estimate the sum of—
(i) the total amounts that would be payable from the Trust Fund under this part for covered OPD services in 1999, determined without regard to this subsection, as though the deductible under subsection (b) did not apply, and
(ii) the total amounts of copayments estimated to be paid under this subsection by beneficiaries to hospitals for covered OPD services in 1999, as though the deductible under subsection (b) did not apply.
(B) Unadjusted copayment amount
(i) In general
For purposes of this subsection, subject to clause (ii), the "unadjusted copayment amount" applicable to a covered OPD service (or group of such services) is 20 percent of the national median of the charges for the service (or services within the group) furnished during 1996, updated to 1999 using the Secretary's estimate of charge growth during the period.
(ii) Adjusted to be 20 percent when fully phased in
If the pre-deductible payment percentage for a covered OPD service (or group of such services) furnished in a year would be equal to or exceed 80 percent, then the unadjusted copayment amount shall be 20 percent of amount determined under subparagraph (D).
(iii) Rules for new services
The Secretary shall establish rules for establishment of an unadjusted copayment amount for a covered OPD service not furnished during 1996, based upon its classification within a group of such services.
(C) Calculation of conversion factors
(i) For 1999
(I) In general
The Secretary shall establish a 1999 conversion factor for determining the medicare OPD fee schedule amounts for each covered OPD service (or group of such services) furnished in 1999. Such conversion factor shall be established on the basis of the weights and frequencies described in paragraph (2)(C) and in such a manner that the sum for all services and groups of the products (described in subclause (II) for each such service or group) equals the total projected amount described in subparagraph (A).
(II) Product described
The Secretary shall determine for each service or group the product of the medicare OPD fee schedule amounts (taking into account appropriate adjustments described in paragraphs (2)(D) and (2)(E)) and the estimated frequencies for such service or group.
(ii) Subsequent years
Subject to paragraph (8)(B), the Secretary shall establish a conversion factor for covered OPD services furnished in subsequent years in an amount equal to the conversion factor established under this subparagraph and applicable to such services furnished in the previous year increased by the OPD fee schedule increase factor specified under clause (iv) for the year involved.
(iii) Adjustment for service mix changes
Insofar as the Secretary determines that the adjustments for service mix under paragraph (2) for a previous year (or estimates that such adjustments for a future year) did (or are likely to) result in a change in aggregate payments under this subsection during the year that are a result of changes in the coding or classification of covered OPD services that do not reflect real changes in service mix, the Secretary may adjust the conversion factor computed under this subparagraph for subsequent years so as to eliminate the effect of such coding or classification changes.
(iv) OPD fee schedule increase factor
For purposes of this subparagraph, subject to paragraph (17) and subparagraph (F) of this paragraph, the "OPD fee schedule increase factor" for services furnished in a year is equal to the market basket percentage increase applicable under
(D) Calculation of medicare OPD fee schedule amounts
The Secretary shall compute a medicare OPD fee schedule amount for each covered OPD service (or group of such services) furnished in a year, in an amount equal to the product of—
(i) the conversion factor computed under subparagraph (C) for the year, and
(ii) the relative payment weight (determined under paragraph (2)(C)) for the service or group.
(E) Pre-deductible payment percentage
The pre-deductible payment percentage for a covered OPD service (or group of such services) furnished in a year is equal to the ratio of—
(i) the medicare OPD fee schedule amount established under subparagraph (D) for the year, minus the unadjusted copayment amount determined under subparagraph (B) for the service or group, to
(ii) the medicare OPD fee schedule amount determined under subparagraph (D) for the year for such service or group.
(F) Productivity and other adjustment
After determining the OPD fee schedule increase factor under subparagraph (C)(iv), the Secretary shall reduce such increase factor—
(i) for 2012 and subsequent years, by the productivity adjustment described in
(ii) for each of 2010 through 2019, by the adjustment described in subparagraph (G).
The application of this subparagraph may result in the increase factor under subparagraph (C)(iv) being less than 0.0 for a year, and may result in payment rates under the payment system under this subsection for a year being less than such payment rates for the preceding year.
(G) Other adjustment
For purposes of subparagraph (F)(ii), the adjustment described in this subparagraph is—
(i) for each of 2010 and 2011, 0.25 percentage point;
(ii) for each of 2012 and 2013, 0.1 percentage point;
(iii) for 2014, 0.3 percentage point;
(iv) for each of 2015 and 2016, 0.2 percentage point; and
(v) for each of 2017, 2018, and 2019, 0.75 percentage point.
(4) Medicare payment amount
The amount of payment made from the Trust Fund under this part for a covered OPD service (and such services classified within a group) furnished in a year is determined, subject to paragraph (7), as follows:
(A) Fee schedule adjustments
The medicare OPD fee schedule amount (computed under paragraph (3)(D)) for the service or group and year is adjusted for relative differences in the cost of labor and other factors determined by the Secretary, as computed under paragraphs (2)(D) and (2)(E).
(B) Subtract applicable deductible
Reduce the adjusted amount determined under subparagraph (A) by the amount of the deductible under subsection (b), to the extent applicable.
(C) Apply payment proportion to remainder
The amount of payment is the amount so determined under subparagraph (B) multiplied by the pre-deductible payment percentage (as determined under paragraph (3)(E)) for the service or group and year involved, plus the amount of any reduction in the copayment amount attributable to paragraph (8)(C).
(5) Outlier adjustment
(A) In general
Subject to subparagraph (D), the Secretary shall provide for an additional payment for each covered OPD service (or group of services) for which a hospital's charges, adjusted to cost, exceed—
(i) a fixed multiple of the sum of—
(I) the applicable medicare OPD fee schedule amount determined under paragraph (3)(D), as adjusted under paragraph (4)(A) (other than for adjustments under this paragraph or paragraph (6)); and
(II) any transitional pass-through payment under paragraph (6); and
(ii) at the option of the Secretary, such fixed dollar amount as the Secretary may establish.
(B) Amount of adjustment
The amount of the additional payment under subparagraph (A) shall be determined by the Secretary and shall approximate the marginal cost of care beyond the applicable cutoff point under such subparagraph.
(C) Limit on aggregate outlier adjustments
(i) In general
The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year.
(ii) Applicable percentage
For purposes of clause (i), the term "applicable percentage" means a percentage specified by the Secretary up to (but not to exceed)—
(I) for a year (or portion of a year) before 2004, 2.5 percent; and
(II) for 2004 and thereafter, 3.0 percent.
(D) Transitional authority
In applying subparagraph (A) for covered OPD services furnished before January 1, 2002, the Secretary may—
(i) apply such subparagraph to a bill for such services related to an outpatient encounter (rather than for a specific service or group of services) using OPD fee schedule amounts and transitional pass-through payments covered under the bill; and
(ii) use an appropriate cost-to-charge ratio for the hospital involved (as determined by the Secretary), rather than for specific departments within the hospital.
(E) Exclusion of separate drug and biological APCS from outlier payments
No additional payment shall be made under subparagraph (A) in the case of ambulatory payment classification groups established separately for drugs or biologicals.
(6) Transitional pass-through for additional costs of innovative medical devices, drugs, and biologicals
(A) In general
The Secretary shall provide for an additional payment under this paragraph for any of the following that are provided as part of a covered OPD service (or group of services):
(i) Current orphan drugs
A drug or biological that is used for a rare disease or condition with respect to which the drug or biological has been designated as an orphan drug under
(ii) Current cancer therapy drugs and biologicals and brachytherapy
A drug or biological that is used in cancer therapy, including (but not limited to) a chemotherapeutic agent, an antiemetic, a hematopoietic growth factor, a colony stimulating factor, a biological response modifier, a bisphosphonate, and a device of brachytherapy or temperature monitored cryoablation, if payment for such drug, biological, or device as an outpatient hospital service under this part was being made on such first date.
(iii) Current radiopharmaceutical drugs and biological products
A radiopharmaceutical drug or biological product used in diagnostic, monitoring, and therapeutic nuclear medicine procedures if payment for the drug or biological as an outpatient hospital service under this part was being made on such first date.
(iv) New medical devices, drugs, and biologicals
A medical device, drug, or biological not described in clause (i), (ii), or (iii) if—
(I) payment for the device, drug, or biological as an outpatient hospital service under this part was not being made as of December 31, 1996; and
(II) the cost of the drug or biological or the average cost of the category of devices is not insignificant in relation to the OPD fee schedule amount (as calculated under paragraph (3)(D)) payable for the service (or group of services) involved.
(B) Use of categories in determining eligibility of a device for pass-through payments
The following provisions apply for purposes of determining whether a medical device qualifies for additional payments under clause (ii) or (iv) of subparagraph (A):
(i) Establishment of initial categories
(I) In general
The Secretary shall initially establish under this clause categories of medical devices based on type of device by April 1, 2001. Such categories shall be established in a manner such that each medical device that meets the requirements of clause (ii) or (iv) of subparagraph (A) as of January 1, 2001, is included in such a category and no such device is included in more than one category. For purposes of the preceding sentence, whether a medical device meets such requirements as of such date shall be determined on the basis of the program memoranda issued before such date.
(II) Authorization of implementation other than through regulations
The categories may be established under this clause by program memorandum or otherwise, after consultation with groups representing hospitals, manufacturers of medical devices, and other affected parties.
(ii) Establishing criteria for additional categories
(I) In general
The Secretary shall establish criteria that will be used for creation of additional categories (other than those established under clause (i)) through rulemaking (which may include use of an interim final rule with comment period).
(II) Standard
Such categories shall be established under this clause in a manner such that no medical device is described by more than one category. Such criteria shall include a test of whether the average cost of devices that would be included in a category and are in use at the time the category is established is not insignificant, as described in subparagraph (A)(iv)(II).
(III) Deadline
Criteria shall first be established under this clause by July 1, 2001. The Secretary may establish in compelling circumstances categories under this clause before the date such criteria are established.
(IV) Adding categories
The Secretary shall promptly establish a new category of medical devices under this clause for any medical device that meets the requirements of subparagraph (A)(iv) and for which none of the categories in effect (or that were previously in effect) is appropriate.
(iii) Period for which category is in effect
Subject to subparagraph (K), a category of medical devices established under clause (i) or (ii) shall be in effect for a period of at least 2 years, but not more than 3 years, that begins—
(I) in the case of a category established under clause (i), on the first date on which payment was made under this paragraph for any device described by such category (including payments made during the period before April 1, 2001); and
(II) in the case of any other category, on the first date on which payment is made under this paragraph for any medical device that is described by such category.
(iv) Requirements treated as met
A medical device shall be treated as meeting the requirements of subparagraph (A)(iv), regardless of whether the device meets the requirement of subclause (I) of such subparagraph, if—
(I) the device is described by a category established and in effect under clause (i); or
(II) the device is described by a category established and in effect under clause (ii) and an application under
Nothing in this clause shall be construed as requiring an application or prior approval (other than that described in subclause (II)) in order for a covered device described by a category to qualify for payment under this paragraph.
(C) Limited period of payment
(i) Drugs and biologicals
Subject to subparagraph (G), the payment under this paragraph with respect to a drug or biological shall only apply during a period of at least 2 years, but not more than 3 years, that begins—
(I) on the first date this subsection is implemented in the case of a drug or biological described in clause (i), (ii), or (iii) of subparagraph (A) and in the case of a drug or biological described in subparagraph (A)(iv) and for which payment under this part is made as an outpatient hospital service before such first date; or
(II) in the case of a drug or biological described in subparagraph (A)(iv) not described in subclause (I), on the first date on which payment is made under this part for the drug or biological as an outpatient hospital service.
(ii) Medical devices
Payment shall be made under this paragraph with respect to a medical device only if such device—
(I) is described by a category of medical devices established and in effect under subparagraph (B); and
(II) is provided as part of a service (or group of services) paid for under this subsection and provided during the period for which such category is in effect under such subparagraph.
(D) Amount of additional payment
Subject to subparagraph (E)(iii), the amount of the payment under this paragraph with respect to a device, drug, or biological provided as part of a covered OPD service is—
(i) subject to subparagraph (H), in the case of a drug or biological, the amount by which the amount determined under
(ii) in the case of a medical device, the amount by which the hospital's charges for the device, adjusted to cost, exceeds the portion of the otherwise applicable medicare OPD fee schedule that the Secretary determines is associated with the device.
(E) Limit on aggregate annual adjustment
(i) In general
The total of the additional payments made under this paragraph for covered OPD services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii)) of the total program payments estimated to be made under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied to less than a full year, the previous sentence shall apply only to the portion of such year. This clause shall not apply for 2018 or 2020.
(ii) Applicable percentage
For purposes of clause (i), the term "applicable percentage" means—
(I) for a year (or portion of a year) before 2004, 2.5 percent; and
(II) for 2004 and thereafter, a percentage specified by the Secretary up to (but not to exceed) 2.0 percent.
(iii) Uniform prospective reduction if aggregate limit projected to be exceeded
If the Secretary estimates before the beginning of a year that the amount of the additional payments under this paragraph for the year (or portion thereof) as determined under clause (i) without regard to this clause will exceed the limit established under such clause, the Secretary shall reduce pro rata the amount of each of the additional payments under this paragraph for that year (or portion thereof) in order to ensure that the aggregate additional payments under this paragraph (as so estimated) do not exceed such limit.
(F) Limitation of application of functional equivalence standard
(i) In general
The Secretary may not publish regulations that apply a functional equivalence standard to a drug or biological under this paragraph.
(ii) Application
Clause (i) shall apply to the application of a functional equivalence standard to a drug or biological on or after December 8, 2003, unless—
(I) such application was being made to such drug or biological prior to December 8, 2003; and
(II) the Secretary applies such standard to such drug or biological only for the purpose of determining eligibility of such drug or biological for additional payments under this paragraph and not for the purpose of any other payments under this subchapter.
(iii) Rule of construction
Nothing in this subparagraph shall be construed to effect the Secretary's authority to deem a particular drug to be identical to another drug if the 2 products are pharmaceutically equivalent and bioequivalent, as determined by the Commissioner of Food and Drugs.
(G) Pass-through extension for certain drugs and biologicals
In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment for a covered OPD service (or group of services) furnished beginning January 1, 2018, such pass-through status shall be extended for a 2-year period beginning on October 1, 2018.
(H) Temporary payment rule for certain drugs and biologicals
In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment for a covered OPD service (or group of services) furnished beginning January 1, 2018, the payment amount for such drug or biological under this subsection that is furnished during the period beginning on October 1, 2018, and ending on March 31, 2019, shall be the greater of—
(i) the payment amount that would otherwise apply under subparagraph (D)(i) for such drug or biological during such period; or
(ii) the payment amount that applied under such subparagraph (D)(i) for such drug or biological on December 31, 2017.
(I) Special payment adjustment rules for last quarter of 2018
In the case of a drug or biological whose period of pass-through status under this paragraph ended on December 31, 2017, and for which payment under this subsection was packaged into a payment amount for a covered OPD service (or group of services) beginning January 1, 2018, the following rules shall apply with respect to payment amounts under this subsection for covered a OPD 15 service (or group of services) furnished during the period beginning on October 1, 2018, and ending on December 31, 2018:
(i) The Secretary shall remove the packaged costs of such drug or biological (as determined by the Secretary) from the payment amount under this subsection for the covered OPD service (or group of services) with which it is packaged.
(ii) The Secretary shall not make any adjustments to payment amounts under this subsection for a covered OPD service (or group of services) for which no costs were removed under clause (i).
(J) Additional pass-through extension and special payment adjustment rule for certain diagnostic radiopharmaceuticals
In the case of a drug or biological furnished in the context of a clinical study on diagnostic imaging tests approved under a coverage with evidence development determination whose period of pass-through status under this paragraph concluded on December 31, 2018, and for which payment under this subsection was packaged into a payment for a covered OPD service (or group of services) furnished beginning January 1, 2019, the Secretary shall—
(i) extend such pass-through status for such drug or biological for the 9-month period beginning on January 1, 2020;
(ii) remove, during such period, the packaged costs of such drug or biological (as determined by the Secretary) from the payment amount under this subsection for the covered OPD service (or group of services) with which it is packaged; and
(iii) not make any adjustments to payment amounts under this subsection for a covered OPD service (or group of services) for which no costs were removed under clause (ii).
(K) Pass-through extension for certain devices
(i) In general
In the case of a device whose period of pass-through status under this paragraph will end on December 31, 2022, such pass-through status shall be extended for a 1–year period beginning on January 1, 2023.
(ii) No adjustment for packaged costs
For purposes of the 1–year period described in clause (i), the Secretary shall not remove the packaged costs of such device (as determined by the Secretary) from the payment amount under this subsection for a covered OPD service (or group of services) with which it is packaged.
(iii) No application of aggregate limit or budget neutrality
Notwithstanding any other provision of this subsection, this subparagraph shall not be taken into account—
(I) in applying the limit on annual aggregate adjustments under subparagraph (E) for 2023; or
(II) in making any budget neutrality adjustments under this subsection for 2023.
(7) Transitional adjustment to limit decline in payment
(A) Before 2002
Subject to subparagraph (D), for covered OPD services furnished before January 1, 2002, for which the PPS amount (as defined in subparagraph (E)) is—
(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount (as defined in subparagraph (F)), the amount of payment under this subsection shall be increased by 80 percent of the amount of such difference;
(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.71 and the pre-BBA amount, exceeds (II) the product of 0.70 and the PPS amount;
(iii) at least 70 percent, but less than 80 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.63 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or
(iv) less than 70 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 21 percent of the pre-BBA amount.
(B) 2002
Subject to subparagraph (D), for covered OPD services furnished during 2002, for which the PPS amount is—
(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 70 percent of the amount of such difference;
(ii) at least 80 percent, but less than 90 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by the amount by which (I) the product of 0.61 and the pre-BBA amount, exceeds (II) the product of 0.60 and the PPS amount; or
(iii) less than 80 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 13 percent of the pre-BBA amount.
(C) 2003
Subject to subparagraph (D), for covered OPD services furnished during 2003, for which the PPS amount is—
(i) at least 90 percent, but less than 100 percent, of the pre-BBA amount, the amount of payment under this subsection shall be increased by 60 percent of the amount of such difference; or
(ii) less than 90 percent of the pre-BBA amount, the amount of payment under this subsection shall be increased by 6 percent of the pre-BBA amount.
(D) Hold harmless provisions
(i) Temporary treatment for certain rural hospitals
(I) In the case of a hospital located in a rural area and that has not more than 100 beds or a sole community hospital (as defined in
(II) In the case of a hospital located in a rural area and that has not more than 100 beds and that is not a sole community hospital (as defined in
(III) In the case of a sole community hospital (as defined in
(ii) Permanent treatment for cancer hospitals and children's hospitals
In the case of a hospital described in clause (iii) or (v) of
(E) PPS amount defined
In this paragraph, the term "PPS amount" means, with respect to covered OPD services, the amount payable under this subchapter for such services (determined without regard to this paragraph), including amounts payable as copayment under paragraph (8), coinsurance under
(F) Pre-BBA amount defined
(i) In general
In this paragraph, the "pre-BBA amount" means, with respect to covered OPD services furnished by a hospital in a year, an amount equal to the product of the reasonable cost of the hospital for such services for the portions of the hospital's cost reporting period (or periods) occurring in the year and the base OPD payment-to-cost ratio for the hospital (as defined in clause (ii)).
(ii) Base payment-to-cost ratio defined
For purposes of this subparagraph, the "base payment-to-cost ratio" for a hospital means the ratio of—
(I) the hospital's reimbursement under this part for covered OPD services furnished during the cost reporting period ending in 1996 (or in the case of a hospital that did not submit a cost report for such period, during the first subsequent cost reporting period ending before 2001 for which the hospital submitted a cost report), including any reimbursement for such services through cost-sharing described in subparagraph (E), to
(II) the reasonable cost of such services for such period.
The Secretary shall determine such ratios as if the amendments made by section 4521 of the Balanced Budget Act of 1997 were in effect in 1996.
(G) Interim payments
The Secretary shall make payments under this paragraph to hospitals on an interim basis, subject to retrospective adjustments based on settled cost reports.
(H) No effect on copayments
Nothing in this paragraph shall be construed to affect the unadjusted copayment amount described in paragraph (3)(B) or the copayment amount under paragraph (8).
(I) Application without regard to budget neutrality
The additional payments made under this paragraph—
(i) shall not be considered an adjustment under paragraph (2)(E); and
(ii) shall not be implemented in a budget neutral manner.
(8) Copayment amount
(A) In general
Except as provided in subparagraphs (B) and (C), the copayment amount under this subsection is the amount by which the amount described in paragraph (4)(B) exceeds the amount of payment determined under paragraph (4)(C).
(B) Election to offer reduced copayment amount
The Secretary shall establish a procedure under which a hospital, before the beginning of a year (beginning with 1999), may elect to reduce the copayment amount otherwise established under subparagraph (A) for some or all covered OPD services to an amount that is not less than 20 percent of the medicare OPD fee schedule amount (computed under paragraph (3)(D)) for the service involved. Under such procedures, such reduced copayment amount may not be further reduced or increased during the year involved and the hospital may disseminate information on the reduction of copayment amount effected under this subparagraph.
(C) Limitation on copayment amount
(i) To inpatient hospital deductible amount
In no case shall the copayment amount for a procedure performed in a year exceed the amount of the inpatient hospital deductible established under
(ii) To specified percentage
The Secretary shall reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed the following percentage:
(I) For procedures performed in 2001, on or after April 1, 2001, 57 percent.
(II) For procedures performed in 2002 or 2003, 55 percent.
(III) For procedures performed in 2004, 50 percent.
(IV) For procedures performed in 2005, 45 percent.
(V) For procedures performed in 2006 and thereafter, 40 percent.
(D) No impact on deductibles
Nothing in this paragraph shall be construed as affecting a hospital's authority to waive the charging of a deductible under subsection (b).
(E) Computation ignoring outlier and pass-through adjustments
The copayment amount shall be computed under subparagraph (A) as if the adjustments under paragraphs (5) and (6) (and any adjustment made under paragraph (2)(E) in relation to such adjustments) had not occurred.
(F) Part B rebatable drugs
In the case of a part B rebatable drug (as defined in paragraph (2) of
(9) Periodic review and adjustments components of prospective payment system
(A) Periodic review
The Secretary shall review not less often than annually and revise the groups, the relative payment weights, and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice, changes in technology, the addition of new services, new cost data, and other relevant information and factors. The Secretary shall consult with an expert outside advisory panel composed of an appropriate selection of representatives of providers to review (and advise the Secretary concerning) the clinical integrity of the groups and weights. Such panel may use data collected or developed by entities and organizations (other than the Department of Health and Human Services) in conducting such review.
(B) Budget neutrality adjustment
If the Secretary makes adjustments under subparagraph (A), then the adjustments for a year may not cause the estimated amount of expenditures under this part for the year to increase or decrease from the estimated amount of expenditures under this part that would have been made if the adjustments had not been made. In determining adjustments under the preceding sentence for 2004 and 2005, the Secretary shall not take into account under this subparagraph or paragraph (2)(E) any expenditures that would not have been made but for the application of paragraph (14).
(C) Update factor
If the Secretary determines under methodologies described in paragraph (2)(F) that the volume of services paid for under this subsection increased beyond amounts established through those methodologies, the Secretary may appropriately adjust the update to the conversion factor otherwise applicable in a subsequent year.
(10) Special rule for ambulance services
The Secretary shall pay for hospital outpatient services that are ambulance services on the basis described in
(11) Special rules for certain hospitals
In the case of hospitals described in clause (iii) or (v) of
(A) the system under this subsection shall not apply to covered OPD services furnished before January 1, 2000; and
(B) the Secretary may establish a separate conversion factor for such services in a manner that specifically takes into account the unique costs incurred by such hospitals by virtue of their patient population and service intensity.
(12) Limitation on review
There shall be no administrative or judicial review under
(A) the development of the classification system under paragraph (2), including the establishment of groups and relative payment weights for covered OPD services, of wage adjustment factors, other adjustments, and methods described in paragraph (2)(F);
(B) the calculation of base amounts under paragraph (3);
(C) periodic adjustments made under paragraph (6);
(D) the establishment of a separate conversion factor under paragraph (8)(B); and
(E) the determination of the fixed multiple, or a fixed dollar cutoff amount, the marginal cost of care, or applicable percentage under paragraph (5) or the determination of insignificance of cost, the duration of the additional payments, the determination and deletion of initial and new categories (consistent with subparagraphs (B) and (C) of paragraph (6)), the portion of the medicare OPD fee schedule amount associated with particular devices, drugs, or biologicals, and the application of any pro rata reduction under paragraph (6).
(13) Authorization of adjustment for rural hospitals
(A) Study
The Secretary shall conduct a study to determine if, under the system under this subsection, costs incurred by hospitals located in rural areas by ambulatory payment classification groups (APCs) exceed those costs incurred by hospitals located in urban areas.
(B) Authorization of adjustment
Insofar as the Secretary determines under subparagraph (A) that costs incurred by hospitals located in rural areas exceed those costs incurred by hospitals located in urban areas, the Secretary shall provide for an appropriate adjustment under paragraph (2)(E) to reflect those higher costs by January 1, 2006.
(14) Drug APC payment rates
(A) In general
The amount of payment under this subsection for a specified covered outpatient drug (defined in subparagraph (B)) that is furnished as part of a covered OPD service (or group of services)—
(i) in 2004, in the case of—
(I) a sole source drug shall in no case be less than 88 percent, or exceed 95 percent, of the reference average wholesale price for the drug;
(II) an innovator multiple source drug shall in no case exceed 68 percent of the reference average wholesale price for the drug; or
(III) a noninnovator multiple source drug shall in no case exceed 46 percent of the reference average wholesale price for the drug;
(ii) in 2005, in the case of—
(I) a sole source drug shall in no case be less than 83 percent, or exceed 95 percent, of the reference average wholesale price for the drug;
(II) an innovator multiple source drug shall in no case exceed 68 percent of the reference average wholesale price for the drug; or
(III) a noninnovator multiple source drug shall in no case exceed 46 percent of the reference average wholesale price for the drug; or
(iii) in a subsequent year, shall be equal, subject to subparagraph (E)—
(I) to the average acquisition cost for the drug for that year (which, at the option of the Secretary, may vary by hospital group (as defined by the Secretary based on volume of covered OPD services or other relevant characteristics)), as determined by the Secretary taking into account the hospital acquisition cost survey data under subparagraph (D); or
(II) if hospital acquisition cost data are not available, the average price for the drug in the year established under
(B) Specified covered outpatient drug defined
(i) In general
In this paragraph, the term "specified covered outpatient drug" means, subject to clause (ii), a covered outpatient drug (as defined in
(I) a radiopharmaceutical; or
(II) a drug or biological for which payment was made under paragraph (6) (relating to pass-through payments) on or before December 31, 2002.
(ii) Exception
Such term does not include—
(I) a drug or biological for which payment is first made on or after January 1, 2003, under paragraph (6);
(II) a drug or biological for which a temporary HCPCS code has not been assigned; or
(III) during 2004 and 2005, an orphan drug (as designated by the Secretary).
(C) Payment for designated orphan drugs during 2004 and 2005
The amount of payment under this subsection for an orphan drug designated by the Secretary under subparagraph (B)(ii)(III) that is furnished as part of a covered OPD service (or group of services) during 2004 and 2005 shall equal such amount as the Secretary may specify.
(D) Acquisition cost survey for hospital outpatient drugs
(i) Annual GAO surveys in 2004 and 2005
(I) In general
The Comptroller General of the United States shall conduct a survey in each of 2004 and 2005 to determine the hospital acquisition cost for each specified covered outpatient drug. Not later than April 1, 2005, the Comptroller General shall furnish data from such surveys to the Secretary for use in setting the payment rates under subparagraph (A) for 2006.
(II) Recommendations
Upon the completion of such surveys, the Comptroller General shall recommend to the Secretary the frequency and methodology of subsequent surveys to be conducted by the Secretary under clause (ii).
(ii) Subsequent secretarial surveys
The Secretary, taking into account such recommendations, shall conduct periodic subsequent surveys to determine the hospital acquisition cost for each specified covered outpatient drug for use in setting the payment rates under subparagraph (A).
(iii) Survey requirements
The surveys conducted under clauses (i) and (ii) shall have a large sample of hospitals that is sufficient to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug. With respect to the surveys conducted under clause (i), the Comptroller General shall report to Congress on the justification for the size of the sample used in order to assure the validity of such estimates.
(iv) Differentiation in cost
In conducting surveys under clause (i), the Comptroller General shall determine and report to Congress if there is (and the extent of any) variation in hospital acquisition costs for drugs among hospitals based on the volume of covered OPD services performed by such hospitals or other relevant characteristics of such hospitals (as defined by the Comptroller General).
(v) Comment on proposed rates
Not later than 30 days after the date the Secretary promulgated proposed rules setting forth the payment rates under subparagraph (A) for 2006, the Comptroller General shall evaluate such proposed rates and submit to Congress a report regarding the appropriateness of such rates based on the surveys the Comptroller General has conducted under clause (i).
(E) Adjustment in payment rates for overhead costs
(i) MedPAC report on drug APC design
The Medicare Payment Advisory Commission shall submit to the Secretary, not later than July 1, 2005, a report on adjustment of payment for ambulatory payment classifications for specified covered outpatient drugs to take into account overhead and related expenses, such as pharmacy services and handling costs. Such report shall include—
(I) a description and analysis of the data available with regard to such expenses;
(II) a recommendation as to whether such a payment adjustment should be made; and
(III) if such adjustment should be made, a recommendation regarding the methodology for making such an adjustment.
(ii) Adjustment authorized
The Secretary may adjust the weights for ambulatory payment classifications for specified covered outpatient drugs to take into account the recommendations contained in the report submitted under clause (i).
(F) Classes of drugs
For purposes of this paragraph:
(i) Sole source drugs
The term "sole source drug" means—
(I) a biological product (as defined under
(II) a single source drug (as defined in
(ii) Innovator multiple source drugs
The term "innovator multiple source drug" has the meaning given such term in
(iii) Noninnovator multiple source drugs
The term "noninnovator multiple source drug" has the meaning given such term in
(G) Reference average wholesale price
The term "reference average wholesale price" means, with respect to a specified covered outpatient drug, the average wholesale price for the drug as determined under
(H) Inapplicability of expenditures in determining conversion, weighting, and other adjustment factors
Additional expenditures resulting from this paragraph shall not be taken into account in establishing the conversion, weighting, and other adjustment factors for 2004 and 2005 under paragraph (9), but shall be taken into account for subsequent years.
(15) Payment for new drugs and biologicals until HCPCS code assigned
With respect to payment under this part for an outpatient drug or biological that is covered under this part and is furnished as part of covered OPD services for which a HCPCS code has not been assigned, the amount provided for payment for such drug or biological under this part shall be equal to 95 percent of the average wholesale price for the drug or biological.
(16) Miscellaneous provisions
(A) Application of reclassification of certain hospitals
If a hospital is being treated as being located in a rural area under
(B) Threshold for establishment of separate APCS for drugs
The Secretary shall reduce the threshold for the establishment of separate ambulatory payment classification groups (APCs) with respect to drugs or biologicals to $50 per administration for drugs and biologicals furnished in 2005 and 2006.
(C) Payment for devices of brachytherapy and therapeutic radiopharmaceuticals at charges adjusted to cost
Notwithstanding the preceding provisions of this subsection, for a device of brachytherapy consisting of a seed or seeds (or radioactive source) furnished on or after January 1, 2004, and before January 1, 2010, and for therapeutic radiopharmaceuticals furnished on or after January 1, 2008, and before January 1, 2010, the payment basis for the device or therapeutic radiopharmaceutical under this subsection shall be equal to the hospital's charges for each device or therapeutic radiopharmaceutical furnished, adjusted to cost. Charges for such devices or therapeutic radiopharmaceuticals shall not be included in determining any outlier payment under this subsection.
(D) Special payment rule
(i) In general
In the case of covered OPD services furnished on or after April 1, 2013, in a hospital described in clause (ii), if—
(I) the payment rate that would otherwise apply under this subsection for stereotactic radiosurgery, complete course of treatment of cranial lesion(s) consisting of 1 session that is multi-source Cobalt 60 based (identified as of January 1, 2013, by HCPCS code 77371 (and any succeeding code) and reimbursed as of such date under APC 0127 (and any succeeding classification group)); exceeds
(II) the payment rate that would otherwise apply under this subsection for linear accelerator based stereotactic radiosurgery, complete course of therapy in one session (identified as of January 1, 2013, by HCPCS code G0173 (and any succeeding code) and reimbursed as of such date under APC 0067 (and any succeeding classification group)),
the payment rate for the service described in subclause (I) shall be reduced to an amount equal to the payment rate for the service described in subclause (II).
(ii) Hospital described
A hospital described in this clause is a hospital that is not—
(I) located in a rural area (as defined in
(II) classified as a rural referral center under
(III) a sole community hospital (as defined in
(iii) Not budget neutral
In making any budget neutrality adjustments under this subsection for 2013 (with respect to covered OPD services furnished on or after April 1, 2013, and before January 1, 2014) or a subsequent year, the Secretary shall not take into account the reduced expenditures that result from the application of this subparagraph.
(E) Application of appropriate use criteria for certain imaging services
For provisions relating to the application of appropriate use criteria for certain imaging services, see
(F) Payment incentive for the transition from traditional X-ray imaging to digital radiography
Notwithstanding the previous provisions of this subsection:
(i) Limitation on payment for film X-ray imaging services
In the case of an imaging service that is an X-ray taken using film and that is furnished during 2017 or a subsequent year, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 20 percent.
(ii) Phased-in limitation on payment for computed radiography imaging services
In the case of an imaging service that is an X-ray taken using computed radiography technology (as defined in
(I) in the case of such a service furnished during 2018, 2019, 2020, 2021, or 2022, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 7 percent; and
(II) in the case of such a service furnished during 2023 or a subsequent year, the payment amount for such service (including the X-ray component of a packaged service) that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this subsection) for such year shall be reduced by 10 percent.
(iii) Application without regard to budget neutrality
The reductions made under this subparagraph—
(I) shall not be considered an adjustment under paragraph (2)(E); and
(II) shall not be implemented in a budget neutral manner.
(iv) Implementation
In order to implement this subparagraph, the Secretary shall adopt appropriate mechanisms which may include use of modifiers.
(G) Temporary additional payments for non-opioid treatments for pain relief
(i) In general
Notwithstanding any other provision of this subsection, with respect to a non-opioid treatment for pain relief (as defined in clause (iv)) furnished on or after January 1, 2025, and before January 1, 2028, the Secretary shall not package payment for such non-opioid treatment for pain relief into a payment for a covered OPD service (or group of services), and shall make an additional payment as specified in clause (ii) for such non-opioid treatment for pain relief.
(ii) Amount of payment
Subject to the limitation under clause (iii), the amount of the payment specified in this clause is, with respect to a non-opioid treatment for pain relief that is—
(I) a drug or biological product, the amount of payment for such drug or biological determined under
(II) a medical device, the amount of the hospital's charges for the device, adjusted to cost, that exceeds the portion of the otherwise applicable Medicare OPD fee schedule that the Secretary determines is associated with the device.
(iii) Limitation
The additional payment amount specified in clause (ii) shall not exceed the estimated average of 18 percent of the OPD fee schedule amount for the OPD service (or group of services) with which the non-opioid treatment for pain relief is furnished, as determined by the Secretary.
(iv) Definition of non-opioid treatment for pain relief
In this subparagraph, the term "non-opioid treatment for pain relief" means a drug, biological product, or medical device that—
(I) in the case of a drug or biological product, has a label indication approved by the Food and Drug Administration to reduce postoperative pain, or produce postsurgical or regional analgesia, without acting upon the body's opioid receptors;
(II) in case of a medical device, is used to deliver a therapy to reduce postoperative pain, or produce postsurgical or regional analgesia, and has—
(aa) an application under
(bb) demonstrated the ability to replace, reduce, or avoid intraoperative or postoperative opioid use or the quantity of opioids prescribed in a clinical trial or through data published in a peer-reviewed journal;
(III) does not receive transitional pass-through payment under paragraph (6); and
(IV) has payment that is packaged into a payment for a covered OPD service (or group of services).
(17) Quality reporting
(A) Reduction in update for failure to report
(i) In general
For purposes of paragraph (3)(C)(iv) for 2009 and each subsequent year, in the case of a subsection (d) hospital (as defined in
(ii) Non-cumulative application
A reduction under this subparagraph shall apply only with respect to the year involved and the Secretary shall not take into account such reduction in computing the OPD fee schedule increase factor for a subsequent year.
(B) Form and manner of submission
Each subsection (d) hospital shall submit data on measures selected under this paragraph to the Secretary in a form and manner, and at a time, specified by the Secretary for purposes of this paragraph.
(C) Development of outpatient measures
(i) In general
The Secretary shall develop measures that the Secretary determines to be appropriate for the measurement of the quality of care (including medication errors) furnished by hospitals in outpatient settings and that reflect consensus among affected parties and, to the extent feasible and practicable, shall include measures set forth by one or more national consensus building entities.
(ii) Construction
Nothing in this paragraph shall be construed as preventing the Secretary from selecting measures that are the same as (or a subset of) the measures for which data are required to be submitted under
(D) Replacement of measures
For purposes of this paragraph, the Secretary may replace any measures or indicators in appropriate cases, such as where all hospitals are effectively in compliance or the measures or indicators have been subsequently shown not to represent the best clinical practice.
(E) Availability of data
The Secretary shall establish procedures for making data submitted under this paragraph available to the public. Such procedures shall ensure that a hospital has the opportunity to review the data that are to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures of process, structure, outcome, patients' perspectives on care, efficiency, and costs of care that relate to services furnished in outpatient settings in hospitals on the Internet website of the Centers for Medicare & Medicaid Services.
(18) Authorization of adjustment for cancer hospitals
(A) Study
The Secretary shall conduct a study to determine if, under the system under this subsection, costs incurred by hospitals described in
(B) Authorization of adjustment
Insofar as the Secretary determines under subparagraph (A) that costs incurred by hospitals described in
(C) Target PCR adjustment
In applying section 419.43(i) of title 42 of the Code of Federal Regulations to implement the appropriate adjustment under this paragraph for services furnished on or after January 1, 2018, the Secretary shall use a target PCR that is 1.0 percentage points less than the target PCR that would otherwise apply. In addition to the percentage point reduction under the previous sentence, the Secretary may consider making an additional percentage point reduction to such target PCR that takes into account payment rates for applicable items and services described in paragraph (21)(C) other than for services furnished by hospitals described in
(19) Floor on area wage adjustment factor for hospital outpatient department services in frontier States
(A) In general
Subject to subparagraph (B), with respect to covered OPD services furnished on or after January 1, 2011, the area wage adjustment factor applicable under the payment system established under this subsection to any hospital outpatient department which is located in a frontier State (as defined in
(B) Limitation
This paragraph shall not apply to any hospital outpatient department located in a State that receives a non-labor related share adjustment under
(20) Not budget neutral application of reduced expenditures resulting from quality incentives for computed tomography
The Secretary shall not take into account the reduced expenditures that result from the application of
(21) Services furnished by an off-campus outpatient department of a provider
(A) Applicable items and services
For purposes of paragraph (1)(B)(v) and this paragraph, the term "applicable items and services" means items and services other than items and services furnished by a dedicated emergency department (as defined in section 489.24(b) of title 42 of the Code of Federal Regulations).
(B) Off-campus outpatient department of a provider
(i) In general
For purposes of paragraph (1)(B)(v) and this paragraph, subject to the subsequent provisions of this subparagraph, the term "off-campus outpatient department of a provider" means a department of a provider (as defined in section 413.65(a)(2) of title 42 of the Code of Federal Regulations, as in effect as of November 2, 2015) that is not located—
(I) on the campus (as defined in such section 413.65(a)(2)) of such provider; or
(II) within the distance (described in such definition of campus) from a remote location of a hospital facility (as defined in such section 413.65(a)(2)).
(ii) Exception
For purposes of paragraph (1)(B)(v) and this paragraph, the term "off-campus outpatient department of a provider" shall not include a department of a provider (as so defined) that was billing under this subsection with respect to covered OPD services furnished prior to November 2, 2015.
(iii) Deemed treatment for 2017
For purposes of applying clause (ii) with respect to applicable items and services furnished during 2017, a department of a provider (as so defined) not described in such clause is deemed to be billing under this subsection with respect to covered OPD services furnished prior to November 2, 2015, if the Secretary received from the provider prior to December 2, 2015, an attestation (pursuant to section 413.65(b)(3) of title 42 of the Code of Federal Regulations) that such department was a department of a provider (as so defined).
(iv) Alternative exception beginning with 2018
For purposes of paragraph (1)(B)(v) and this paragraph with respect to applicable items and services furnished during 2018 or a subsequent year, the term "off-campus outpatient department of a provider" also shall not include a department of a provider (as so defined) that is not described in clause (ii) if—
(I) the Secretary receives from the provider an attestation (pursuant to such section 413.65(b)(3)) not later than December 31, 2016 (or, if later, 60 days after December 13, 2016), that such department met the requirements of a department of a provider specified in section 413.65 of title 42 of the Code of Federal Regulations;
(II) the provider includes such department as part of the provider on its enrollment form in accordance with the enrollment process under
(III) the department met the mid-build requirement of clause (v) and the Secretary receives, not later than 60 days after December 13, 2016, from the chief executive officer or chief operating officer of the provider a written certification that the department met such requirement.
(v) Mid-build requirement described
The mid-build requirement of this clause is, with respect to a department of a provider, that before November 2, 2015, the provider had a binding written agreement with an outside unrelated party for the actual construction of such department.
(vi) Exclusion for certain cancer hospitals
For purposes of paragraph (1)(B)(v) and this paragraph with respect to applicable items and services furnished during 2017 or a subsequent year, the term "off-campus outpatient department of a provider" also shall not include a department of a provider (as so defined) that is not described in clause (ii) if the provider is a hospital described in
(I) in the case of a department that met the requirements of section 413.65 of title 42 of the Code of Federal Regulations after November 1, 2015, and before December 13, 2016, the Secretary receives from the provider an attestation that such department met such requirements not later than 60 days after such date; or
(II) in the case of a department that meets such requirements after such date, the Secretary receives from the provider an attestation that such department meets such requirements not later than 60 days after the date such requirements are first met with respect to such department.
(vii) Audit
Not later than December 31, 2018, the Secretary shall audit the compliance with requirements of clause (iv) with respect to each department of a provider to which such clause applies. Not later than 2 years after the date the Secretary receives an attestation under clause (vi) relating to compliance of a department of a provider with requirements referred to in such clause, the Secretary shall audit the compliance with such requirements with respect to the department. If the Secretary finds as a result of an audit under this clause that the applicable requirements were not met with respect to such department, the department shall not be excluded from the term "off-campus outpatient department of a provider" under such clause.
(viii) Implementation
For purposes of implementing clauses (iii) through (vii):
(I) Notwithstanding any other provision of law, the Secretary may implement such clauses by program instruction or otherwise.
(II) Subchapter I of
(III) For purposes of carrying out this subparagraph with respect to clauses (iii) and (iv) (and clause (vii) insofar as it relates to clause (iv)), $10,000,000 shall be available from the Federal Supplementary Medical Insurance Trust Fund under
(C) Availability of payment under other payment systems
Payments for applicable items and services furnished by an off-campus outpatient department of a provider that are described in paragraph (1)(B)(v) shall be made under the applicable payment system under this part (other than under this subsection) if the requirements for such payment are otherwise met.
(D) Information needed for implementation
Each hospital shall provide to the Secretary such information as the Secretary determines appropriate to implement this paragraph and paragraph (1)(B)(v) (which may include reporting of information on a hospital claim using a code or modifier and reporting information about off-campus outpatient departments of a provider on the enrollment form described in
(E) Limitations
There shall be no administrative or judicial review under
(i) The determination of the applicable items and services under subparagraph (A) and applicable payment systems under subparagraph (C).
(ii) The determination of whether a department of a provider meets the term described in subparagraph (B).
(iii) Any information that hospitals are required to report pursuant to subparagraph (D).
(iv) The determination of an audit under subparagraph (B)(vii).
(22) Review and revisions of payments for non-opioid alternative treatments
(A) In general
With respect to payments made under this subsection for covered OPD services (or groups of services), including covered OPD services assigned to a comprehensive ambulatory payment classification, the Secretary—
(i) shall, as soon as practicable, conduct a review (part of which may include a request for information) of payments for opioids and evidence-based non-opioid alternatives for pain management (including drugs and devices, nerve blocks, surgical injections, and neuromodulation) with a goal of ensuring that there are not financial incentives to use opioids instead of non-opioid alternatives;
(ii) may, as the Secretary determines appropriate, conduct subsequent reviews of such payments; and
(iii) shall consider the extent to which revisions under this subsection to such payments (such as the creation of additional groups of covered OPD services to classify separately those procedures that utilize opioids and non-opioid alternatives for pain management) would reduce payment incentives to use opioids instead of non-opioid alternatives for pain management.
(B) Priority
In conducting the review under clause (i) of subparagraph (A) and considering revisions under clause (iii) of such subparagraph, the Secretary shall focus on covered OPD services (or groups of services) assigned to a comprehensive ambulatory payment classification, ambulatory payment classifications that primarily include surgical services, and other services determined by the Secretary which generally involve treatment for pain management.
(C) Revisions
If the Secretary identifies revisions to payments pursuant to subparagraph (A)(iii), the Secretary shall, as determined appropriate, begin making such revisions for services furnished on or after January 1, 2020. Revisions under the previous sentence shall be treated as adjustments for purposes of application of paragraph (9)(B).
(D) Rules of construction
Nothing in this paragraph shall be construed to preclude the Secretary—
(i) from conducting a demonstration before making the revisions described in subparagraph (C); or
(ii) prior to implementation of this paragraph, from changing payments under this subsection for covered OPD services (or groups of services) which include opioids or non-opioid alternatives for pain management.
(u) Incentive payments for physician scarcity areas
(1) In general
In the case of physicians' services furnished on or after January 1, 2005, and before July 1, 2008—
(A) by a primary care physician in a primary care scarcity county (identified under paragraph (4)); or
(B) by a physician who is not a primary care physician in a specialist care scarcity county (as so identified),
in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid an amount equal to 5 percent of the payment amount for the service under this part.
(2) Determination of ratios of physicians to medicare beneficiaries in area
Based upon available data, the Secretary shall establish for each county or equivalent area in the United States, the following:
(A) Number of physicians practicing in the area
The number of physicians who furnish physicians' services in the active practice of medicine or osteopathy in that county or area, other than physicians whose practice is exclusively for the Federal Government, physicians who are retired, or physicians who only provide administrative services. Of such number, the number of such physicians who are—
(i) primary care physicians; or
(ii) physicians who are not primary care physicians.
(B) Number of medicare beneficiaries residing in the area
The number of individuals who are residing in the county and are entitled to benefits under part A or enrolled under this part, or both (in this subsection referred to as "individuals").
(C) Determination of ratios
(i) Primary care ratio
The ratio (in this paragraph referred to as the "primary care ratio") of the number of primary care physicians (determined under subparagraph (A)(i)), to the number of individuals determined under subparagraph (B).
(ii) Specialist care ratio
The ratio (in this paragraph referred to as the "specialist care ratio") of the number of other physicians (determined under subparagraph (A)(ii)), to the number of individuals determined under subparagraph (B).
(3) Ranking of counties
The Secretary shall rank each such county or area based separately on its primary care ratio and its specialist care ratio.
(4) Identification of counties
(A) In general
The Secretary shall identify—
(i) those counties and areas (in this paragraph referred to as "primary care scarcity counties") with the lowest primary care ratios that represent, if each such county or area were weighted by the number of individuals determined under paragraph (2)(B), an aggregate total of 20 percent of the total of the individuals determined under such paragraph; and
(ii) those counties and areas (in this subsection referred to as "specialist care scarcity counties") with the lowest specialist care ratios that represent, if each such county or area were weighted by the number of individuals determined under paragraph (2)(B), an aggregate total of 20 percent of the total of the individuals determined under such paragraph.
(B) Periodic revisions
The Secretary shall periodically revise the counties or areas identified in subparagraph (A) (but not less often than once every three years) unless the Secretary determines that there is no new data available on the number of physicians practicing in the county or area or the number of individuals residing in the county or area, as identified in paragraph (2).
(C) Identification of counties where service is furnished
For purposes of paying the additional amount specified in paragraph (1), if the Secretary uses the 5-digit postal ZIP Code where the service is furnished, the dominant county of the postal ZIP Code (as determined by the United States Postal Service, or otherwise) shall be used to determine whether the postal ZIP Code is in a scarcity county identified in subparagraph (A) or revised in subparagraph (B).
(D) Special rule
With respect to physicians' services furnished on or after January 1, 2008, and before July 1, 2008, for purposes of this subsection, the Secretary shall use the primary care scarcity counties and the specialty care scarcity counties (as identified under the preceding provisions of this paragraph) that the Secretary was using under this subsection with respect to physicians' services furnished on December 31, 2007.
(E) Judicial review
There shall be no administrative or judicial review under
(i) the identification of a county or area;
(ii) the assignment of a specialty of any physician under this paragraph;
(iii) the assignment of a physician to a county under paragraph (2); or
(iv) the assignment of a postal ZIP Code to a county or other area under this subsection.
(5) Rural census tracts
To the extent feasible, the Secretary shall treat a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)), as an equivalent area for purposes of qualifying as a primary care scarcity county or specialist care scarcity county under this subsection.
(6) Physician defined
For purposes of this paragraph, the term "physician" means a physician described in
(7) Publication of list of counties; posting on website
With respect to a year for which a county or area is identified or revised under paragraph (4), the Secretary shall identify such counties or areas as part of the proposed and final rule to implement the physician fee schedule under
(v) Increase of FQHC payment limits
In the case of services furnished by Federally qualified health centers (as defined in
(1) in 2010, at the limits otherwise established under this part for such year increased by $5; and
(2) in a subsequent year, at the limits established under this subsection for the previous year increased by the percentage increase in the MEI (as defined in
(w) Methods of payment
The Secretary may develop alternative methods of payment for items and services provided under clinical trials and comparative effectiveness studies sponsored or supported by an agency of the Department of Health and Human Services, as determined by the Secretary, to those that would otherwise apply under this section, to the extent such alternative methods are necessary to preserve the scientific validity of such trials or studies, such as in the case where masking the identity of interventions from patients and investigators is necessary to comply with the particular trial or study design.
(x) Incentive payments for primary care services
(1) In general
In the case of primary care services furnished on or after January 1, 2011, and before January 1, 2016, by a primary care practitioner, in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the payment amount for the service under this part.
(2) Definitions
In this subsection:
(A) Primary care practitioner
The term "primary care practitioner" means an individual—
(i) who—
(I) is a physician (as described in
(II) is a nurse practitioner, clinical nurse specialist, or physician assistant (as those terms are defined in
(ii) for whom primary care services accounted for at least 60 percent of the allowed charges under this part for such physician or practitioner in a prior period as determined appropriate by the Secretary.
(B) Primary care services
The term "primary care services" means services identified, as of January 1, 2009, by the following HCPCS codes (and as subsequently modified by the Secretary):
(i) 99201 through 99215.
(ii) 99304 through 99340.
(iii) 99341 through 99350.
(3) Coordination with other payments
The amount of the additional payment for a service under this subsection and subsection (m) shall be determined without regard to any additional payment for the service under subsection (m) and this subsection, respectively. The amount of the additional payment for a service under this subsection and subsection (z) shall be determined without regard to any additional payment for the service under subsection (z) and this subsection, respectively.
(4) Limitation on review
There shall be no administrative or judicial review under
(y) Incentive payments for major surgical procedures furnished in health professional shortage areas
(1) In general
In the case of major surgical procedures furnished on or after January 1, 2011, and before January 1, 2016, by a general surgeon in an area that is designated (under
(2) Definitions
In this subsection:
(A) General surgeon
In this subsection, the term "general surgeon" means a physician (as described in
(B) Major surgical procedures
The term "major surgical procedures" means physicians' services which are surgical procedures for which a 10-day or 90-day global period is used for payment under the fee schedule under
(3) Coordination with other payments
The amount of the additional payment for a service under this subsection and subsection (m) shall be determined without regard to any additional payment for the service under subsection (m) and this subsection, respectively. The amount of the additional payment for a service under this subsection and subsection (z) shall be determined without regard to any additional payment for the service under subsection (z) and this subsection, respectively.
(4) Application
The provisions of paragraph 17 (2) and (4) of subsection (m) shall apply to the determination of additional payments under this subsection in the same manner as such provisions apply to the determination of additional payments under subsection (m).
(z) Incentive payments for participation in eligible alternative payment models
(1) Payment incentive
(A) In general
In the case of covered professional services furnished by an eligible professional during a year that is in the period beginning with 2019 and ending with 2026 and for which the professional is a qualifying APM participant with respect to such year, in addition to the amount of payment that would otherwise be made for such covered professional services under this part for such year, there also shall be paid to such professional an amount equal to 5 percent (or, with respect to 2025, 3.5 percent, or, with respect to 2026, 1.88 percent) of the estimated aggregate payment amounts for such covered professional services under this part for the preceding year. For purposes of the previous sentence, the payment amount for the preceding year may be an estimation for the full preceding year based on a period of such preceding year that is less than the full year. The Secretary shall establish policies to implement this subparagraph in cases in which payment for covered professional services furnished by a qualifying APM participant in an alternative payment model—
(i) is made to an eligible alternative payment entity rather than directly to the qualifying APM participant; or
(ii) is made on a basis other than a fee-for-service basis (such as payment on a capitated basis).
(B) Form of payment
Payments under this subsection shall be made in a lump sum, on an annual basis, as soon as practicable.
(C) Treatment of payment incentive
Payments under this subsection shall not be taken into account for purposes of determining actual expenditures under an alternative payment model and for purposes of determining or rebasing any benchmarks used under the alternative payment model.
(D) Coordination
The amount of the additional payment under this subsection or subsection (m) shall be determined without regard to any additional payment under subsection (m) and this subsection, respectively. The amount of the additional payment under this subsection or subsection (x) shall be determined without regard to any additional payment under subsection (x) and this subsection, respectively. The amount of the additional payment under this subsection or subsection (y) shall be determined without regard to any additional payment under subsection (y) and this subsection, respectively.
(2) Qualifying APM participant
For purposes of this subsection, the term "qualifying APM participant" means the following:
(A) 2019 and 2020
With respect to 2019 and 2020, an eligible professional for whom the Secretary determines that at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity.
(B) 2021 through 2026
With respect to each of 2021 through 2026, an eligible professional described in either of the following clauses:
(i) Medicare payment threshold option
An eligible professional for whom the Secretary determines that at least 50 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity.
(ii) Combination all-payer and medicare payment threshold option
An eligible professional—
(I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 50 percent of the sum of—
(aa) payments described in clause (i); and
(bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs and other than payments made under subchapter XIX in a State in which no medical home or alternative payment model is available under the State program under that subchapter),
meet the requirement described in clause (iii)(I) with respect to payments described in item (aa) and meet the requirement described in clause (iii)(II) with respect to payments described in item (bb);
(II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity; and
(III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional.
(iii) Requirement
For purposes of clause (ii)(I)—
(I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made to an eligible alternative payment entity; and
(II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under arrangements in which—
(aa) quality measures comparable to measures under the performance category described in
(bb) certified EHR technology is used; and
(cc) the eligible professional participates in an entity that—
(AA) bears more than nominal financial risk if actual aggregate expenditures exceeds 18 expected aggregate expenditures; or
(BB) with respect to beneficiaries under subchapter XIX, is a medical home that meets criteria comparable to medical homes expanded under
(C) Beginning in 2027
With respect to 2027 and each subsequent year, an eligible professional described in either of the following clauses:
(i) Medicare payment threshold option
An eligible professional for whom the Secretary determines that at least 75 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity.
(ii) Combination all-payer and medicare payment threshold option
An eligible professional—
(I) for whom the Secretary determines, with respect to items and services furnished by such professional during the most recent period for which data are available (which may be less than a year), that at least 75 percent of the sum of—
(aa) payments described in clause (i); and
(bb) all other payments, regardless of payer (other than payments made by the Secretary of Defense or the Secretary of Veterans Affairs and other than payments made under subchapter XIX in a State in which no medical home or alternative payment model is available under the State program under that subchapter),
meet the requirement described in clause (iii)(I) with respect to payments described in item (aa) and meet the requirement described in clause (iii)(II) with respect to payments described in item (bb);
(II) for whom the Secretary determines at least 25 percent of payments under this part for covered professional services furnished by such professional during the most recent period for which data are available (which may be less than a year) were attributable to such services furnished under this part through an eligible alternative payment entity; and
(III) who provides to the Secretary such information as is necessary for the Secretary to make a determination under subclause (I), with respect to such professional.
(iii) Requirement
For purposes of clause (ii)(I)—
(I) the requirement described in this subclause, with respect to payments described in item (aa) of such clause, is that such payments are made to an eligible alternative payment entity; and
(II) the requirement described in this subclause, with respect to payments described in item (bb) of such clause, is that such payments are made under arrangements in which—
(aa) quality measures comparable to measures under the performance category described in
(bb) certified EHR technology is used; and
(cc) the eligible professional participates in an entity that—
(AA) bears more than nominal financial risk if actual aggregate expenditures exceeds 18 expected aggregate expenditures; or
(BB) with respect to beneficiaries under subchapter XIX, is a medical home that meets criteria comparable to medical homes expanded under
(D) Use of patient approach
The Secretary may base the determination of whether an eligible professional is a qualifying APM participant under this subsection and the determination of whether an eligible professional is a partial qualifying APM participant under
(3) Additional definitions
In this subsection:
(A) Covered professional services
The term "covered professional services" has the meaning given that term in
(B) Eligible professional
The term "eligible professional" has the meaning given that term in
(C) Alternative payment model (APM)
The term "alternative payment model" means, other than for purposes of subparagraphs (B)(ii)(I)(bb) and (C)(ii)(I)(bb) of paragraph (2), any of the following:
(i) A model under
(ii) The shared savings program under
(iii) A demonstration under
(iv) A demonstration required by Federal law.
(D) Eligible alternative payment entity
The term "eligible alternative payment entity" means, with respect to a year, an entity that—
(i) participates in an alternative payment model that—
(I) requires participants in such model to use certified EHR technology (as defined in subsection (o)(4)); and
(II) provides for payment for covered professional services based on quality measures comparable to measures under the performance category described in
(ii)(I) bears financial risk for monetary losses under such alternative payment model that are in excess of a nominal amount; or
(II) is a medical home expanded under
(4) Limitation
There shall be no administrative or judicial review under
(A) The determination that an eligible professional is a qualifying APM participant under paragraph (2) and the determination that an entity is an eligible alternative payment entity under paragraph (3)(D).
(B) The determination of the amount of the 5 percent (or, with respect to 2025, 3.5 percent, or, with respect to 2026, 1.88 percent) payment incentive under paragraph (1)(A), including any estimation as part of such determination.
(aa) Medical review of spinal subluxation services
(1) In general
The Secretary shall implement a process for the medical review (as described in paragraph (2)) of treatment by a chiropractor described in
(A) services furnished by a such a 1 chiropractor whose pattern of billing is aberrant compared to peers; and
(B) services furnished by such a chiropractor who, in a prior period, has a services denial percentage in the 85th percentile or greater, taking into consideration the extent that service denials are overturned on appeal.
(2) Medical review
(A) Prior authorization medical review
(i) In general
Subject to clause (ii), the Secretary shall use prior authorization medical review for services described in paragraph (1) that are furnished to an individual by a chiropractor described in
(ii) Ending application of prior authorization medical review
The Secretary shall end the application of prior authorization medical review under clause (i) to services described in paragraph (1) by such a chiropractor if the Secretary determines that the chiropractor has a low denial rate under such prior authorization medical review. The Secretary may subsequently reapply prior authorization medical review to such chiropractor if the Secretary determines it to be appropriate and the chiropractor has, in the time period subsequent to the determination by the Secretary of a low denial rate with respect to the chiropractor, furnished such services described in paragraph (1).
(iii) Early request for prior authorization review permitted
Nothing in this subsection shall be construed to prevent such a chiropractor from requesting prior authorization for services described in paragraph (1) that are to be furnished to an individual before the chiropractor furnishes the twelfth such service to such individual for an episode of treatment.
(B) Type of review
The Secretary may use pre-payment review or post-payment review of services described in
(C) Relationship to law enforcement activities
The Secretary may determine that medical review under this subsection does not apply in the case where potential fraud may be involved.
(3) No payment without prior authorization
With respect to a service described in paragraph (1) for which prior authorization medical review under this subsection applies, the following shall apply:
(A) Prior authorization determination
The Secretary shall make a determination, prior to the service being furnished, of whether the service would or would not meet the applicable requirements of
(B) Denial of payment
Subject to paragraph (5), no payment may be made under this part for the service unless the Secretary determines pursuant to subparagraph (A) that the service would meet the applicable requirements of such
(4) Submission of information
A chiropractor described in
(5) Timeliness
If the Secretary does not make a prior authorization determination under paragraph (3)(A) within 14 business days of the date of the receipt of medical documentation needed to make such determination, paragraph (3)(B) shall not apply.
(6) Application of limitation on beneficiary liability
Where payment may not be made as a result of the application of paragraph (2)(B),
(7) Review by contractors
The medical review described in paragraph (2) may be conducted by medicare administrative contractors pursuant to
(8) Multiple services
The Secretary shall, where practicable, apply the medical review under this subsection in a manner so as to allow an individual described in paragraph (1) to obtain, at a single time rather than on a service-by-service basis, an authorization in accordance with paragraph (3)(A) for multiple services.
(9) Construction
With respect to a service described in paragraph (1) that has been affirmed by medical review under this subsection, nothing in this subsection shall be construed to preclude the subsequent denial of a claim for such service that does not meet other applicable requirements under this chapter.
(10) Implementation
(A) Authority
The Secretary may implement the provisions of this subsection by interim final rule with comment period.
(B) Administration
(bb) Additional payments for certain rural health clinics with physicians or practitioners receiving data 2000 waivers
(1) In general
In the case of a rural health clinic with respect to which, beginning on or after January 1, 2019, rural health clinic services (as defined in
(2) Application
In order to receive a payment described in paragraph (1), a rural health clinic shall submit to the Secretary an application for such a payment at such time, in such manner, and containing such information as specified by the Secretary. A rural health clinic may apply for such a payment for each physician or practitioner described in paragraph (1) furnishing services described in such paragraph at such clinic.
(3) Requirements
For purposes of paragraph (1), the requirements described in this paragraph, with respect to a physician or practitioner, are the following:
(A) The physician or practitioner is employed by or working under contract with a rural health clinic described in paragraph (1) that submits an application under paragraph (2).
(B) The physician or practitioner first begins prescribing narcotic drugs in schedule III, IV, or V of
(4) Funding
For purposes of making payments under this subsection, there are appropriated, out of amounts in the Treasury not otherwise appropriated, $2,000,000, which shall remain available until expended.
(cc) Specified COVID–19 testing-related services
For purposes of subsection (a)(1)(DD):
(1) Description
(A) In general
A specified COVID–19 testing-related service described in this paragraph is a medical visit that—
(i) is in any of the categories of HCPCS evaluation and management service codes described in subparagraph (B);
(ii) is furnished during any portion of the emergency period (as defined in
(iii) results in an order for or administration of a clinical diagnostic laboratory test described in
(iv) relates to the furnishing or administration of such test or to the evaluation of such individual for purposes of determining the need of such individual for such test.
(B) Categories of HCPCS codes
For purposes of subparagraph (A), the categories of HCPCS evaluation and management services codes are the following:
(i) Office and other outpatient services.
(ii) Hospital observation services.
(iii) Emergency department services.
(iv) Nursing facility services.
(v) Domiciliary, rest home, or custodial care services.
(vi) Home services.
(vii) Online digital evaluation and management services.
(2) Specified outpatient payment provision
A specified outpatient payment provision described in this paragraph is any of the following:
(A) The hospital outpatient prospective payment system under subsection (t).
(B) The physician fee schedule under
(C) The prospective payment system developed under
(D)
(E) The payment basis determined in regulations pursuant to subsection (a)(3) for rural health clinic services.
(dd) Special coinsurance rule for certain colorectal cancer screening tests
(1) In general
In the case of a colorectal cancer screening test to which paragraph (1)(Y) of subsection (a) would not apply but for the third sentence of such subsection that is furnished during a year beginning on or after January 1, 2022, and before January 1, 2030, the amount paid shall be equal to the specified percent (as defined in paragraph (2)) for such year of the lesser of the actual charge for the service or the amount determined under the fee schedule that applies to such test under this part (or, in the case such test is a covered OPD service (as defined in subsection (t)(1)(B)), the amount determined under subsection (t)).
(2) Specified percent defined
For purposes of paragraph (1), the term "specified percent" means—
(A) for 2022, 80 percent;
(B) for 2023 through 2026, 85 percent; and
(C) for 2027 through 2029, 90 percent.
(Aug. 14, 1935, ch. 531, title XVIII, §1833, as added
Editorial Notes
References in Text
Section 626(d) of Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (i)(2)(D)(i), is section 626(d) of
Section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as amended by section 6132 of the Omnibus Budget Reconciliation Act of 1989, referred to in subsec. (l)(1)(C), is section 9320(k) of
The amendments made by section 9320 of the Omnibus Budget Reconciliation Act of 1986, referred to in subsec. (l)(3)(B), are amendments made by section 9320 of
Section 4521 of The Balanced Budget Act of 1997, referred to in subsec. (t)(7)(F), is section 4521 of
Codification
Amendments
2024—Subsec. (z)(1)(A).
Subsec. (z)(2)(B).
Subsec. (z)(2)(C).
Subsec. (z)(2)(D).
Subsec. (z)(4)(B).
2022—Subsec. (a).
Subsec. (a)(1)(G).
Subsec. (a)(1)(S).
.
Subsec. (a)(1)(EE).
Subsec. (a)(1)(FF).
Subsec. (a)(1)(GG).
Subsec. (a)(1)(HH).
Subsec. (b)(13).
Subsec. (c)(2).
Subsec. (i)(9).
Subsec. (i)(10).
Subsec. (t)(2)(E).
Subsec. (t)(6)(B)(iii).
Subsec. (t)(6)(K).
Subsec. (t)(8)(F).
Subsec. (t)(16)(G).
Subsec. (z)(1)(A).
Subsec. (z)(2)(B).
Subsec. (z)(2)(C).
Subsec. (z)(2)(D).
Subsec. (z)(4)(B).
Subsec. (bb)(3)(B).
2021—Subsec. (f)(3)(A)(i).
"(I) the per visit payment amount applicable to such rural health clinic for rural health clinic services furnished in 2020, increased by the percentage increase in the MEI applicable to primary care services furnished as of the first day of 2021; or
"(II) the limit described in paragraph (2)(A); and".
Subsec. (f)(3)(A)(ii)(I).
Subsec. (f)(3)(B).
"(B) A rural health clinic described in this subparagraph is a rural health clinic that, as of December 31, 2019, was—
"(i) in a hospital with less than 50 beds; and
"(ii) enrolled under
2020—Subsec. (a).
Subsec. (a)(1)(Y).
Subsec. (a)(1)(DD).
Subsec. (a)(10).
Subsec. (b)(11).
Subsec. (b)(12).
Subsec. (f).
Subsec. (f)(1).
Subsec. (f)(2).
Subsec. (j).
Subsec. (z)(2)(B).
Subsec. (z)(2)(C).
Subsec. (z)(2)(D).
Subsec. (cc).
Subsec. (dd).
2019—Subsec. (t)(6)(E)(i).
Subsec. (t)(6)(J).
2018—Subsec. (a)(1)(CC).
Subsec. (g)(1).
Subsec. (g)(3).
Subsec. (g)(5)(D).
Subsec. (g)(5)(E)(iv).
Subsec. (g)(7).
Subsec. (g)(8).
Subsec. (i)(8).
Subsec. (t)(6)(C)(i).
Subsec. (t)(6)(D)(i).
Subsec. (t)(6)(E)(i).
Subsec. (t)(6)(G) to (I).
Subsec. (t)(22).
Subsecs. (z), (aa).
Subsec. (bb).
2016—Subsec. (a)(1)(BB).
Subsec. (t)(18)(B).
Subsec. (t)(18)(C).
Subsec. (t)(21)(B)(i).
Subsec. (t)(21)(B)(iii) to (v).
Subsec. (t)(21)(B)(vi).
Subsec. (t)(21)(B)(vii).
Subsec. (t)(21)(B)(viii).
Subsec. (t)(21)(B)(viii)(III).
Subsec. (t)(21)(E)(iv).
2015—Subsec. (a)(1)(AA).
Subsec. (g)(5)(A).
Subsec. (g)(5)(C)(i).
Subsec. (g)(5)(E).
Subsec. (g)(6)(A).
Subsec. (t)(1)(B)(v).
Subsec. (t)(16)(F).
Subsec. (t)(21).
Subsec. (x)(3).
Subsec. (y)(3).
Subsec. (z).
2014—Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(D)(ii).
Subsec. (a)(2)(D)(i).
Subsec. (a)(2)(D)(ii).
Subsec. (b)(3)(B).
Subsec. (g)(5)(A).
Subsec. (g)(6)(A).
Subsec. (h)(2)(A)(i).
Subsec. (h)(3).
Subsec. (h)(6).
Subsec. (h)(7).
Subsec. (t)(16)(E).
Subsec. (t)(20).
2013—Subsec. (g)(5)(A).
Subsec. (g)(5)(D).
Subsec. (g)(6).
Subsec. (g)(6)(A).
Subsec. (t)(16)(D).
2012—Subsec. (g)(1), (3).
Subsec. (g)(5).
Subsec. (g)(6).
Subsec. (h)(2)(A)(i).
Subsec. (h)(2)(A)(iv).
Subsec. (h)(2)(A)(v).
Subsec. (t)(7)(D)(i)(II).
Subsec. (t)(7)(D)(i)(III).
2011—Subsec. (g)(5).
Subsec. (t)(7)(D)(i)(II).
Subsec. (t)(7)(D)(i)(III).
2010—Subsec. (a).
Subsec. (a)(1)(K).
Subsec. (a)(1)(N).
Subsec. (a)(1)(T).
Subsec. (a)(1)(W).
Subsec. (a)(1)(X).
Subsec. (a)(1)(Y).
Subsec. (a)(1)(Z).
Subsec. (a)(2)(F) to (H).
Subsec. (a)(3)(B)(i).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(10).
Subsec. (g)(5).
Subsec. (h)(2)(A)(i).
Subsec. (h)(2)(A)(iv).
Subsec. (i)(2)(D)(v), (vi).
Subsec. (t)(1)(B)(iv).
Subsec. (t)(2)(D).
Subsec. (t)(3)(C)(iv).
Subsec. (t)(3)(F).
Subsec. (t)(3)(G).
Subsec. (t)(3)(G)(i)(I).
Subsec. (t)(3)(G)(i)(II).
Subsec. (t)(3)(G)(i)(III).
Subsec. (t)(3)(G)(i)(IV), (V).
Subsec. (t)(3)(G)(ii).
"(I) the excess (if any) of—
"(aa) the total percentage of the non-elderly insured population for the preceding year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
"(bb) the total percentage of the non-elderly insured population for such preceding year (as estimated by the Secretary); exceeds
"(II) 5 percentage points."
Subsec. (t)(7)(D)(i)(II).
Subsec. (t)(7)(D)(i)(III).
Subsec. (t)(18), (19).
Subsecs. (x), (y).
2008—Subsec. (a)(1)(D)(iii).
Subsec. (a)(1)(W).
Subsec. (a)(8)(A), (B).
Subsec. (b)(9).
Subsec. (c).
Subsec. (g)(1).
Subsec. (g)(5).
Subsec. (h)(2)(A)(i).
Subsec. (t)(7)(D)(i)(II).
Subsec. (t)(7)(D)(i)(III).
Subsec. (t)(16)(C).
Subsec. (v).
Subsec. (w).
2007—Subsec. (g)(5).
Subsec. (h)(9).
Subsec. (t)(16)(C).
Subsec. (u)(1).
Subsec. (u)(4)(D), (E).
2006—Subsec. (b)(7).
Subsec. (b)(8).
Subsec. (g)(1), (3).
Subsec. (g)(5).
Subsec. (i)(2)(A).
Subsec. (i)(2)(D)(ii).
Subsec. (i)(2)(D)(iv), (v).
Subsec. (i)(2)(E).
Subsec. (i)(7).
Subsec. (t)(2)(H).
Subsec. (t)(3)(C)(iv).
Subsec. (t)(7)(D)(i).
Subsec. (t)(16)(C).
Subsec. (t)(17).
2003—Subsec. (a)(1)(D)(iii).
Subsec. (a)(1)(G).
Subsec. (a)(1)(S).
Subsec. (a)(1)(V).
Subsec. (a)(2)(E)(i).
Subsec. (a)(3).
Subsec. (b).
Subsec. (g)(4).
Subsec. (h)(2)(A)(ii)(IV).
Subsec. (h)(5)(D).
Subsec. (h)(8).
Subsec. (i)(2)(A).
Subsec. (i)(2)(A)(i).
Subsec. (i)(2)(C).
Subsec. (i)(2)(D).
Subsec. (m).
Subsec. (o)(1)(B).
Subsec. (o)(2).
Subsec. (t)(1)(B)(iv).
Subsec. (t)(2)(H).
Subsec. (t)(3)(C)(ii).
Subsec. (t)(5)(E).
Subsec. (t)(6)(D)(i).
Subsec. (t)(6)(F).
Subsec. (t)(7)(D)(i).
Subsec. (t)(9)(B).
Subsec. (t)(13).
Subsec. (t)(14), (15).
Subsec. (t)(16).
Subsec. (t)(16)(B).
Subsec. (t)(16)(C).
Subsec. (u).
2000—Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(R).
Subsec. (a)(1)(T).
Subsec. (a)(1)(U).
Subsec. (a)(2)(D)(i).
Subsec. (f).
Subsec. (g)(4).
Subsec. (h)(4)(B)(viii).
Subsec. (t)(2)(G).
Subsec. (t)(3)(C)(iii).
Subsec. (t)(3)(C)(iv).
Subsec. (t)(6)(A)(ii).
Subsec. (t)(6)(A)(iv)(II).
Subsec. (t)(6)(B).
"(i) on the first date this subsection is implemented in the case of a drug, biological, or device described in clause (i), (ii), or (iii) of subparagraph (A) and in the case of a device, drug, or biological described in subparagraph (A)(iv) and for which payment under this part is made as an outpatient hospital service before such first date; or
"(ii) in the case of a device, drug, or biological described in subparagraph (A)(iv) not described in clause (i), on the first date on which payment is made under this part for the device, drug, or biological as an outpatient hospital service."
Subsec. (t)(6)(C).
Subsec. (t)(6)(D).
Subsec. (t)(6)(E).
Subsec. (t)(7)(D)(ii).
Subsec. (t)(7)(F)(ii)(I).
Subsec. (t)(8)(C).
Subsec. (t)(11).
Subsec. (t)(12)(E).
1999—Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(O).
Subsec. (a)(2)(D)(i).
Subsec. (g)(1), (3).
Subsec. (g)(4).
Subsec. (h)(5)(A)(iii).
Subsec. (h)(7).
Subsec. (l)(4)(A)(i)(VII).
Subsec. (t)(1)(B)(ii).
Subsec. (t)(1)(B)(iii), (iv).
Subsec. (t)(2).
Subsec. (t)(2)(B).
Subsec. (t)(2)(C).
Subsec. (t)(2)(E).
Subsec. (t)(4).
Subsec. (t)(4)(C).
Subsec. (t)(5).
Subsec. (t)(6).
Subsec. (t)(7).
Subsec. (t)(7)(D).
Subsec. (t)(8).
Subsec. (t)(8)(A).
Subsec. (t)(8)(C) to (E).
Subsec. (t)(9).
Subsec. (t)(10).
Subsec. (t)(11).
Subsec. (t)(11)(E).
Subsec. (t)(12).
Subsec. (t)(13).
1997—Subsec. (a)(1)(A).
Subsec. (a)(1)(D).
Subsec. (a)(1)(O).
Subsec. (a)(1)(Q).
Subsec. (a)(1)(R).
Subsec. (a)(1)(S).
Subsec. (a)(2).
Subsec. (a)(2)(A).
"(i) the reasonable cost of such services, as determined under
"(ii) the customary charges with respect to such services,
or, if such services are furnished by a public provider of services, or by another provider which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low-income (and requests that payment be made under this provision), free of charge or at nominal charges to the public, the amount determined in accordance with
Subsec. (a)(2)(B).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
Subsec. (a)(2)(G).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(6).
Subsec. (a)(8), (9).
Subsec. (b)(5).
Subsec. (b)(6).
Subsec. (f).
Subsec. (f)(1).
Subsec. (g).
Subsec. (h)(1)(A).
Subsec. (h)(2)(A)(ii)(IV).
Subsec. (h)(4)(B)(vii).
Subsec. (h)(4)(B)(viii).
Subsec. (h)(5)(A)(iii).
Subsec. (i)(1)(A).
Subsec. (i)(2)(C).
Subsec. (i)(3)(A).
Subsec. (i)(3)(B)(i)(II).
Subsec. (l)(5).
Subsec. (n)(1)(A).
Subsec. (n)(1)(B)(i)(II).
Subsec. (r)(1).
Subsec. (r)(2).
"(2)(A) For purposes of subsection (a)(1)(O) of this section, the prevailing charge for services described in
"(B) In subparagraph (A), the term 'applicable percentage' means—
"(i) 75 percent in the case of services performed in a hospital, and
"(ii) 85 percent in the case of other services."
Subsec. (r)(3).
Subsec. (t).
1994—Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(G).
Subsec. (a)(2)(A).
Subsec. (a)(2)(D)(i).
Subsec. (a)(2)(F).
Subsec. (a)(3).
Subsec. (b)(2).
Subsec. (b)(4), (5).
Subsec. (h)(5)(D).
Subsec. (i)(1).
Subsec. (i)(2)(A).
Subsec. (i)(2)(A)(i).
Subsec. (i)(2)(B).
Subsec. (i)(2)(C).
Subsec. (i)(3)(B)(ii).
Subsec. (l)(5)(B), (C).
"(B)(i) Payment for the services of a certified registered nurse anesthetist under this part may be made only on an assignment-related basis, and any such assignment agreed to by a certified registered nurse anesthetist shall be binding upon any other person presenting a claim or request for payment for such services.
"(ii) Except for deductible and coinsurance amounts applicable under this section, any person who knowingly and willfully presents, or causes to be presented, to an individual enrolled under this part a bill or request for payment for services of a certified registered nurse anesthetist for which payment may be made under this part only on an assignment-related basis is subject to a civil money penalty of not to exceed $2,000 for each such bill or request. The provisions of
Subsec. (n)(1)(B)(i)(II).
Subsec. (p).
Subsec. (q)(1).
Subsec. (r).
Subsec. (r)(1).
Subsec. (r)(2)(A).
Subsec. (r)(3), (4).
"(3)(A) Payment under this part for services described in
"(B) Except for deductible and coinsurance amounts applicable under this section, any person who knowingly and willfully presents, or causes to be presented, to an individual enrolled under this part a bill or request for payment for services described in
Subsec. (s).
1993—Subsec. (a)(1).
Subsec. (g).
Subsec. (h)(2)(A)(ii)(IV).
Subsec. (h)(4)(B)(iv) to (vii).
Subsec. (i)(3)(B)(ii).
Subsec. (i)(4).
Subsec. (l)(4)(B)(i).
Subsec. (l)(4)(B)(ii).
"(IV) for services furnished in 1994, $11.25,
"(V) for services furnished in 1995, $11.50,
"(VI) for services furnished in 1996, $11.70, and
"(VII) for services furnished in calendar years after 1997, the previous year's conversion factor increased by the update determined under
Subsec. (l)(4)(B)(iii).
1990—Subsec. (a)(1)(H).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(L).
Subsec. (a)(1)(M).
Subsec. (a)(2).
Subsec. (a)(2)(E)(i).
Subsec. (a)(7).
Subsec. (b).
Subsec. (b)(5).
Subsec. (h)(2)(A)(ii).
Subsec. (h)(2)(A)(ii)(III).
Subsec. (h)(4)(B).
Subsec. (h)(5)(A)(ii)(II).
Subsec. (h)(5)(A)(ii)(III).
Subsec. (h)(5)(A)(iii).
Subsec. (h)(5)(C).
Subsec. (h)(5)(D).
Subsec. (i)(3)(B)(ii).
Subsec. (i)(3)(B)(ii)(I).
Subsec. (i)(3)(B)(ii)(II).
Subsec. (l)(1).
Subsec. (l)(2).
Subsec. (l)(4).
Subsec. (m).
Subsec. (n)(1)(B)(ii)(I).
Subsec. (r).
1989—Subsec. (a).
Subsec. (a)(1)(F).
Subsec. (a)(1)(H).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(M).
Subsec. (a)(1)(N).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(6).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (d)(1).
"(A) $1375.00, or
"(B) 62½ percent of such expenses."
Subsec. (g).
Subsec. (h)(1)(B), (C).
Subsec. (h)(1)(D).
Subsec. (h)(4)(B)(ii).
Subsec. (h)(4)(B)(iii).
Subsec. (h)(5)(A)(ii).
Subsec. (h)(5)(A)(iii).
Subsec. (i)(1)(A).
Subsec. (i)(3)(A).
Subsec. (l)(5)(A).
Subsec. (l)(5)(C).
Subsec. (m).
Subsec. (o)(1).
Subsec. (o)(1)(A).
Subsec. (o)(1)(B), (2)(A).
Subsec. (o)(2)(A)(i).
Subsec. (o)(2)(A)(ii)(II).
Subsec. (o)(2)(D).
Subsec. (p).
Subsec. (q).
1988—Subsec. (a).
Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(1)(H).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(L).
Subsec. (a)(1)(M).
Subsec. (a)(2).
Subsec. (a)(2)(B).
Subsec. (a)(2)(D)(i).
Subsec. (a)(2)(E)(i).
Subsec. (a)(2)(F).
Subsec. (a)(3).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3) to (5).
Subsec. (c).
Subsec. (d)(1).
Subsec. (d)(2).
Subsec. (f).
Subsec. (g).
Subsec. (h)(1)(D).
Subsec. (h)(2)(A)(i).
Subsec. (h)(2)(A)(ii).
Subsec. (h)(2)(A)(iii).
Subsec. (h)(2)(B).
Subsec. (h)(3).
Subsec. (h)(4)(B)(ii).
Subsec. (h)(5)(A).
Subsec. (h)(5)(C).
Subsec. (h)(5)(D).
Subsec. (i)(2)(A)(iii).
Subsec. (i)(4).
Subsec. (i)(6).
Subsec. (l)(2).
Subsec. (l)(3)(B).
Subsec. (l)(5)(B)(ii).
Subsec. (n)(1)(A).
Subsec. (n)(1)(B)(i)(II).
Subsec. (n)(1)(B)(ii).
"(I) The term 'cost proportion' means 65 percent for all or any part of cost reporting periods which occur in fiscal year 1989 and 50 percent for other cost reporting periods.
"(II) The term 'charge proportion' means 35 percent for all or any parts of cost reporting periods which occur in fiscal year 1989 and 50 percent for other cost reporting periods."
Subsec. (o).
Subsec. (p).
1987—Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(L).
Subsec. (a)(2).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(2)(D)(i).
Subsec. (a)(2)(E).
Subsec. (a)(5).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (b)(4)(A).
Subsec. (b)(5).
Subsec. (c).
Subsec. (c)(1).
Subsec. (f).
Subsec. (h)(1)(C).
Subsec. (h)(1)(D).
Subsec. (h)(2).
Subsec. (h)(2)(A)(i).
Subsec. (h)(2)(A)(ii).
Subsec. (h)(2)(A)(iii).
Subsec. (h)(2)(B).
Subsec. (h)(4)(B)(i).
Subsec. (h)(4)(B)(ii).
Subsec. (h)(5)(A).
Subsec. (h)(5)(A)(iii).
Subsec. (h)(5)(C).
Subsec. (h)(5)(D).
Subsec. (i)(2)(A)(iii).
Subsec. (i)(3)(B)(ii).
Subsec. (i)(4).
Subsec. (i)(6).
Subsec. (l)(2).
Subsec. (l)(5)(A).
Subsec. (l)(5)(B)(ii).
Subsec. (l)(6).
"(B) In subparagraph (A), the term 'limiting charge' means, with respect to a service, 125 percent of the prevailing charge for the service after the reduction referred to in subparagraph (A).
"(C) If a physician knowingly and willfully imposes charges in violation of subparagraph (A), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2) of this section.
"(D) This paragraph shall not apply to services furnished after the earlier of (i) December 31, 1990, or (ii) one-year after the date the Secretary reports to Congress, under
Subsec. (m).
Subsec. (n).
Subsec. (o).
Subsec. (p).
1986—Subsec. (a)(1)(D).
Subsec. (a)(1)(D)(i).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(1)(H).
Subsec. (a)(2)(A).
Subsec. (a)(2)(D).
Subsec. (a)(2)(D)(i).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (b)(3).
Subsec. (b)(5).
Subsec. (g).
Subsec. (h)(1)(B).
Subsec. (h)(1)(C).
Subsec. (h)(1)(D).
Subsec. (h)(2).
Subsec. (h)(3).
Subsec. (h)(4).
Subsec. (h)(5)(C).
Subsec. (i)(1).
Subsec. (i)(2).
Subsec. (i)(3) to (5).
Subsec. (l).
1984—Subsec. (a)(1).
Subsec. (a)(1)(B).
Subsec. (a)(1)(D).
Subsec. (a)(1)(F), (G).
Subsec. (a)(2).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(2)(B)(ii).
Subsec. (a)(2)(D).
Subsec. (a)(3).
Subsec. (a)(5).
Subsec. (b)(1).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (f).
Subsec. (h).
Subsec. (h)(5)(C).
Subsec. (i)(3).
Subsec. (k).
1982—Subsec. (a)(1)(B).
Subsec. (a)(1)(H).
Subsec. (a)(2)(B).
Subsec. (b)(1).
Subsec. (i)(1).
Subsec. (j).
1981—Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (b).
1980—Subsec. (a)(1)(B).
Subsec. (a)(1)(D).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(1)(H).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4), (5).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (g).
Subsec. (h).
Subsec. (i).
1978—Subsec. (a)(1)(E).
Subsec. (a)(2).
1977—Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (f)(1).
Subsec. (f)(2).
Subsec. (f)(3), (4).
1972—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b).
Subsec. (f).
Subsec. (g).
Subsec. (h).
1968—Subsec. (a)(1).
Subsec. (b).
Subsec. (d).
Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2022 Amendment
Amendment by section 4124(b)(3) of
Effective Date of 2021 Amendment
Effective Date of 2020 Amendment
Effective Date of 2016 Amendment
Effective Date of 2015 Amendment
Effective Date of 2012 Amendment
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 143(b)(2), (3), of
Effective Date of 2006 Amendment
Effective Date of 2003 Amendment
Amendment by section 237(a) of
"(1) in the case of screening mammography, to services furnished on or after the date of the enactment of this Act [Dec. 8, 2003]; and
"(2) in the case of diagnostic mammography, to services furnished on or after January 1, 2005."
Effective Date of 2000 Amendment
"(1) by subsection (a) [amending
"(2) by subsection (b)(1) [amending this section] shall apply as if included in the enactment of section 403(e)(1) of BBRA (
"(3) by subsection (b)(2) [amending provisions set out as a note under
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(g)(2), (k)(2)] of
Amendment by section 1000(a)(6) [title IV, §401(b)(1)] of
Effective Date of 1997 Amendment
Amendment by section 4201(c)(1) of
Amendment by section 4432(b)(5)(C) of
Amendment by section 4511(b) of
"(1) The amendments made by subsections (a)(1), (a)(2), and (b) [amending this section and
"(2) The amendments made by subsections (a)(3) and (c) [amending this section and
"(3) The amendments made by subsection (d)(1) [amending this section] apply to expenses incurred on or after January 1, 1999."
Amendment by section 4603(c)(2)(A) of
Effective Date of 1994 Amendment
"(1)
"(2)
Amendment by section 147(a), (e)(2), (3), (f)(6)(C), (D) of
Amendment by section 156(a)(2)(B) of
Effective Date of 1993 Amendment
Effective Date of 1990 Amendment
Amendment by section 4153(a)(2)(B), (C) of
Amendment by section 4155(b)(2), (3) of
Amendment by section 4161(a)(3)(B) of
Effective Date of 1989 Amendment
"(1) The amendments made by this section [amending this section and
"(2) In applying the amendments made by this section, the increase under subparagraph (C) of section 1833(o)(2) of the Social Security Act [
Amendment by section 6204(b) of
Amendment by section 201(a) of
Amendment by section 202(a) of
Effective Date of 1988 Amendment
Amendment by
Amendment by section 202(b)(1)–(3) of
Amendment by section 203(c)(1)(A)–(E) of
Amendment by section 204(d)(1) of
Amendment by section 205(c) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4045(c)(2)(A) of
Amendment by section 4049(a)(1) of
Amendment by section 4062(d)(3) of
For effective date of amendment by section 4072(b) of
Amendment by section 4073(b) of
Amendment by section 4077(b)(2), (3) of
Effective Date of 1986 Amendment
Amendment by section 9320(e)(1), (2) of
Amendment by section 9337(b) of
"(1) The amendments made by subsection (a)(1) [amending this section] shall apply to cost reporting periods beginning on or after October 1, 1987.
"(2) The amendments made by subsections (b)(1) and (c) [amending this section and
"(3) The Secretary of Health and Human Services shall first provide, under the amendment made by subsection (b)(2) [amending this section], for the review and update of procedure lists within 6 months after the date of the enactment of this Act [Oct. 21, 1986].
"(4) The amendments made by subsection (d) [amending
"(A) The amendments made by paragraphs (1) and (2) [amending this section] shall apply to clinical diagnostic laboratory tests performed on or after July 1, 1986.
"(B) The amendment made by paragraph (3) [amending this section] shall apply to clinical diagnostic laboratory tests performed on or after January 1, 1987."
Effective Date of 1984 Amendment
Amendment by
"(1) Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section and
"(2) The amendments made by subsection (g)(2) [amending
"(3) The amendments made by this section shall not apply to clinical diagnostic laboratory tests furnished to inpatients of a provider operating under a waiver granted pursuant to section 602(k) of the Social Security Amendments of 1983 [section 602(k) of
Amendment by section 2321(b), (d)(4)(A) of
Amendment by section 2354(b)(5), (7) of
Effective Date of 1982 Amendment
Amendment by section 117(a)(2) of
Amendment by section 148(d) of
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Amendment by section 930(h) of
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by section 211(c)(4) of
Amendment by section 226(c)(2) of
Amendment by section 233(b) of
Amendment by section 251(a)(2), (3) of
Effective Date of 1968 Amendment
Amendment by section 129(c)(7), (8) of
Amendment by section 135(c) of
Construction of 2008 Amendment
Construction Regarding Limiting Increases in Cost-Sharing
Implementation of 2022 Amendment
Provider Outreach and Reporting on Certain Behavioral Health Integration Services
"(a)
"(b)
"(1)
"(2)
Outreach and Reporting on Opioid Use Disorder Treatment Services Furnished by Opioid Treatment Programs
"(a)
"(1)
"(2)
"(b)
"(1)
"(2)
Centers for Medicare & Medicaid Services Provider Outreach and Reporting on Cognitive Assessment and Care Plan Services
"(a)
"(b)
"(1)
"(2)
Implementation of 2020 Amendment
Claims Modifier
Implementation of Provisions of Pub. L. 116–127
Implementation of 2019 Amendment
Implementation of 2018 Amendment
Improving Documentation of Services
"(1)
"(2)
"(3)
Medicare Patient IVIG Access Demonstration Project
"(a)
"(b)
"(1)
"(A) if the date of enactment of the Disaster Tax Relief and Airport and Airway Extension Act of 2017 is on or before September 30, 2017 [
"(B) if the date of enactment of such Act is after September 30, 2017, for the period beginning on the date of enactment of such Act and ending on December 31, 2020.
"(2)
"(c)
"(d)
"(e)
"(f)
"(1)
"(2)
"(A) The total number of beneficiaries enrolled in the demonstration project during the updated report period.
"(B) The total number of claims submitted for services during the updated report period, disaggregated by month.
"(C) An analysis of the impact of the demonstration on beneficiary access to the in-home administration of intravenous immune globin, including the impact on beneficiary health.
"(D) An analysis of the impact of in-home administration of intravenous immune globin on overall costs to Medicare, including the cost differential between in-home administration of intravenous immune globin and administration of intravenous immune globin in a healthcare facility.
"(E) To the extent practicable, a survey of providers and enrolled beneficiaries that participated in the demonstration project that identifies barriers to accessing services, including reimbursement for items and services.
"(F) Recommendations to Congress on the appropriateness of establishing a permanent bundled services payment for the in-home administration of intravenous immune globin for Medicare beneficiaries.
"(3)
"(A) A final evaluation of the impact of the demonstration project on access for Medicare beneficiaries to items and services needed for the in-home administration of intravenous immune globin.
"(B) An analysis of the appropriateness of implementing a new methodology for payment for intravenous immune globulins in all care settings under part B of title XVIII of the Social Security Act (
"(C) An update to the report entitled 'Analysis of Supply, Distribution, Demand, and Access Issues Associated with Immune Globulin Intravenous (IGIV)', issued in February 2007 by the Office of the Assistant Secretary for Planning and Evaluation of the Department of Health and Human Services.
"(g)
"(h)
"(1)
"(2)
"(3)
"(4)
[
Implementation of 2013 Amendment
Implementation of 2012 Amendment
Collection of Additional Data
"(1)
"(2)
Treatment of Certain Complex Diagnostic Laboratory Tests
"(a)
"(1)
"(2)
"(A) that is an analysis of gene protein expression, topographic genotyping, or a cancer chemotherapy sensitivity assay;
"(B) that is determined by the Secretary to be a laboratory test for which there is not an alternative test having equivalent performance characteristics;
"(C) which is billed using a Health Care Procedure Coding System (HCPCS) code other than a not otherwise classified code under such Coding System;
"(D) which is approved or cleared by the Food and Drug Administration or is covered under title XVIII of the Social Security Act [
"(E) is described in section 1861(s)(3) of the Social Security Act (
"(3)
"(b)
"(c)
"(1) be made from the Federal Supplemental [probably should be "Supplementary"] Medical Insurance Trust Fund under section 1841 of the Social Security Act (
"(2) may not exceed $100,000,000.
"(d)
"(1) an assessment of the impact of the demonstration project on access to care, quality of care, health outcomes, and expenditures under title XVIII of the Social Security Act [
"(2) such recommendations as the Secretary determines appropriate.
"(e)
Treatment of Certified Registered Nurse Anesthetists
"(1) is consistent with the adjustments made by the special rule for teaching anesthesiologists under section 1848(a)(6) of the Social Security Act [
"(2) maintains the existing payment differences between teaching anesthesiologists and teaching certified registered nurse anesthetists."
Implementation of 2006 Amendment
Implementation of Clinically Appropriate Code Edits In Order To Identify and Eliminate Improper Payments for Therapy Services
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
GAO Study of Medicare Payment for Inhalation Therapy
Treatment of Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Outpatients in Certain Rural Areas
"(a)
"(b)
"(c)
[
GAO Report on Payments for Brachytherapy Devices
Moratorium on Physical Therapy Services Caps in 2003
Prompt Submission of Overdue Reports on Payment and Utilization of Outpatient Therapy Services
GAO Study of Ambulatory Surgical Center Payments
"(1)
"(A)
"(B)
"(2)
"(A)
"(B)
"(i) The appropriateness of using the groups of covered services and relative weights established under the outpatient prospective payment system as the basis of payment for ambulatory surgical centers.
"(ii) If the relative weights under such hospital outpatient prospective payment system are appropriate for such purpose—
"(I) whether the payment rates for ambulatory surgical centers should be based on a uniform percentage of the payment rates or weights under such outpatient system; or
"(II) whether the payment rates for ambulatory surgical centers should vary, or the weights should be revised, based on specific procedures or types of services (such as ophthalmology and pain management services).
"(iii) Whether a geographic adjustment should be used for payment of services furnished in ambulatory surgical centers, and if so, the labor and nonlabor shares of such payment."
Demonstration Project for Coverage of Certain Prescription Drugs and Biologicals
"(a)
"(b)
"(c)
"(d)
"(1) coverage for more than 50,000 patients; and
"(2) more than $500,000,000 in funding.
"(e)
Payment for Pancreatic Islet Cell Investigational Transplants for Medicare Beneficiaries in Clinical Trials
"(a)
"(1)
"(2)
"(b)
"(c)
"(1) The term 'routine costs' means reasonable and necessary routine patient care costs (as defined in the Centers for Medicare & Medicaid Services Coverage Issues Manual, section 30–1), including immunosuppressive drugs and other followup care.
"(2) The term 'transplantation and appropriate related items and services' means items and services related to the acquisition and delivery of the pancreatic islet cell transplantation, notwithstanding any national noncoverage determination contained in the Centers for Medicare & Medicaid Services Coverage Issues Manual.
"(3) The term 'medicare beneficiary' means an individual who is entitled to benefits under part A of title XVIII of the Social Security Act [
"(d)
"(1) to permit payment for partial pancreatic tissue or islet cell transplantation under title XVIII of the Social Security Act [
"(2) as authorizing or requiring coverage or payment conveying—
"(A) benefits under part A of such title [
"(B) benefits under part B of such title [
GAO Study of Reduction in Medigap Premium Levels Resulting From Reductions in Coinsurance
MedPAC Study on Low-Volume, Isolated Rural Health Care Providers
"(a)
"(b)
"(1) whether low-volume, isolated rural health care providers are having, or may have, significantly decreased medicare margins or other financial difficulties resulting from any of the payment methodologies described in subsection (c);
"(2) whether the status as a low-volume, isolated rural health care provider should be designated under the medicare program and any criteria that should be used to qualify for such a status; and
"(3) any changes in the payment methodologies described in subsection (c) that are necessary to provide appropriate reimbursement under the medicare program to low-volume, isolated rural health care providers (as designated pursuant to paragraph (2)).
"(c)
"(1) The prospective payment system for hospital outpatient department services under section 1833(t) of the Social Security Act (
"(2) The fee schedule for ambulance services under section 1834(l) of such Act (
"(3) The prospective payment system for inpatient hospital services under section 1886 of such Act (
"(4) The prospective payment system for routine service costs of skilled nursing facilities under section 1888(e) of such Act (
"(5) The prospective payment system for home health services under section 1895 of such Act (
Special Rule for Payment for 2001
"(1) for services furnished on or after January 1, 2001, and before April 1, 2001, shall be the medicare OPD fee schedule amount for 2001 as determined under the provisions of law in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for services furnished on or after April 1, 2001, and before January 1, 2002, shall be the fee schedule amount (as determined taking into account the amendment made by subsection (a)), increased by a transitional percentage allowance equal to 0.32 percent (to account for the timing of implementation of the full market basket update)."
Transition Provisions Applicable to Subsection (t)(6)(B)
"(1)
"(2)
"(A) with respect to which an application was submitted (pursuant to such process) on or before such date; and
"(B) that meets the requirements of clause (ii) or (iv) of subparagraph (A) of such paragraph (as determined pursuant to such process),
shall be treated as a device with respect to which an initial category is required to be established under subparagraph (B)(i) of such paragraph (as amended by subsection (a)(2))."
Study on Standards for Supervision of Physical Therapist Assistants
Delay in Implementation of Prospective Payment System for Ambulatory Surgical Centers
MedPAC Study and Report on Medicare Reimbursement for Services Provided by Certain Providers
"(a)
"(1) certified nurse-midwife (as defined in subsection (gg)(2) of section 1861 of such Act (
"(2) physician assistant (as defined in subsection (aa)(5)(A) of such section);
"(3) nurse practitioner (as defined in such subsection); and
"(4) clinical nurse specialist (as defined in subsection (aa)(5)(B) of such section).
The study shall separately examine the appropriateness of such payment rates for orthopedic physician assistants, taking into consideration the requirements for accreditation, training, and education.
"(b)
MedPAC Study on Access to Outpatient Pain Management Services
"(a)
"(1) the specific barriers imposed under the medicare program on the provision of pain management procedures in hospital outpatient departments, ambulatory surgery centers, and physicians' offices; and
"(2) the consistency of medicare payment policies for pain management procedures in those different settings.
"(b)
Establishment of Coding and Payment Procedures for New Clinical Diagnostic Laboratory Tests and Other Items on a Fee Schedule
Report on Procedures Used for Advanced, Improved Technologies
Congressional Intention Regarding Base Amounts in Applying HOPD PPS
Study and Report to Congress Regarding Special Treatment of Rural and Cancer Hospitals in Prospective Payment System for Hospital Outpatient Department Services
"(a)
"(1)
"(2)
"(A) A medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv) of the Social Security Act (
"(B) A sole community hospital (as defined in section 1886(d)(5)(D)(iii) of such Act (
"(C) Rural health clinics (as defined in section 1861(aa)(2) of such Act (
"(D) Rural referral centers (as so classified under section 1886(d)(5)(C) of such Act (
"(E) Any other rural hospital with not more than 100 beds.
"(F) Any other rural hospital that the Secretary determines appropriate.
"(G) A hospital described in section 1886(d)(1)(B)(v) of such Act (
"(b)
"(c)
GAO Study on Resources Required To Provide Safe and Effective Outpatient Cancer Therapy
"(a)
"(1) determine the adequacy of practice expense relative value units associated with the utilization of those clinical resources;
"(2) determine the adequacy of work units in the practice expense formula; and
"(3) assess various standards to assure the provision of safe outpatient cancer therapy services.
"(b)
Focused Medical Reviews of Claims During Moratorium Period
Study and Report on Utilization
"(1)
"(A)
"(i) utilization patterns (including nationwide patterns, and patterns by region, types of settings, and diagnosis or condition) of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (
"(ii) such patterns for such services that were provided in 1998 and 1999.
"(B)
"(2)
Phase-in of PPS for Ambulatory Surgical Centers
"(1) in the first year of its implementation, only a proportion (specified by the Secretary and not to exceed one-fourth) of the payment for such services shall be made in accordance with such system and the remainder shall be made in accordance with current regulations; and
"(2) in each of the following 2 years a proportion (specified by the Secretary and not to exceed one-half and three-fourths, respectively) of the payment for such services shall be made under such system and the remainder shall be made in accordance with current regulations.
By not later than January 1, 2003, the Secretary shall incorporate data from a 1999 medicare cost survey or a subsequent cost survey for purposes of implementing or revising such system."
MedPAC Study on Postsurgical Recovery Care Center Services
"(1)
"(2)
Medicare Reimbursement for Telehealth Services
"(a)
"(b)
"(1) The payment shall [be] shared between the referring physician or practitioner and the consulting physician or practitioner. The amount of such payment shall not be greater than the current fee schedule of the consulting physician or practitioner for the health care services provided.
"(2) The payment shall not include any reimbursement for any telephone line charges or any facility fees, and a beneficiary may not be billed for any such charges or fees.
"(3) The payment shall be made subject to the coinsurance and deductible requirements under subsections (a)(1) and (b) of section 1833 of the Social Security Act (
"(4) The payment differential of section 1848(a)(3) of such Act (
"(c)
"(1) how telemedicine and telehealth systems are expanding access to health care services;
"(2) the clinical efficacy and cost-effectiveness of telemedicine and telehealth applications;
"(3) the quality of telemedicine and telehealth services delivered; and
"(4) the reasonable cost of telecommunications charges incurred in practicing telemedicine and telehealth in rural, frontier, and underserved areas.
"(d)
"(1)
"(2)
"(3)
Report on Coverage of Outpatient Occupational Therapy Services
"(A) the establishment of a mechanism for assuring appropriate utilization of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services that are covered under the medicare program under title XVIII of the Social Security Act (
"(B) the establishment of an alternative payment policy for such services based on classification of individuals by diagnostic category, functional status, prior use of services (in both inpatient and outpatient settings), and such other criteria as the Secretary determines appropriate, in place of the uniform dollar limitations specified in section 1833(g) of such Act [
The recommendations shall include how such a mechanism or policy might be implemented in a budget-neutral manner."
[
Study and Report on Clinical Laboratory Tests
Adjustments to Payment Amounts for New Technology Intraocular Lenses
"(1)
"(2)
"(3)
"(4)
Study of Medicare Coverage of Patient Care Costs Associated With Clinical Trials of New Cancer Therapies
Study of Annual Cap on Amount of Medicare Payment for Outpatient Physical Therapy and Occupational Therapy Services
Ambulatory Surgical Center Services; Inflation Update
Freeze in Allowance for Intraocular Lenses
[
Reduction in Payments Under Part B During Final Two Months of 1990
"(a)
"(b)
"(1)
"(2)
"(3)
Effect on State Law
Conscientious objections of health care provider under State law unaffected by enactment of subsecs. (a)(1)(Q) and (f) of this section, see section 4206(c) of
Development of Criteria Regarding Consultation With a Physician
[
Study of Reimbursement for Ambulance Services
PROPAC Study of Payments for Services in Hospital Outpatient Departments
Budget Neutrality
Adjustment of Contracts With Prepaid Health Plans
For requirement that Secretary of Health and Human Services modify contracts under subsection (a)(1)(A) of this section to take into account amendments made by
Study and Report to Congress Respecting Incentive Payments for Physicians' Services Furnished in Underserved Areas
Fee Schedules for Physician Pathology Services
Applying Copayment and Deductible to Certain Outpatient Physicians' Services
Other Physician Payment Studies
Study of Payment for Chemotherapy in Physicians' Offices
Clinical Diagnostic Laboratory Tests; Limitation on Changes in Fee Schedules
GAO Study of Fee Schedules
Amounts Paid for Independent Rural Health Clinic Services
Report on Establishment of National Fee Schedules for Payment of Clinical Diagnostic Laboratory Tests
State Standards for Directors of Clinical Laboratories
"(1)
"(2)
Transitional Provisions for Payment of Fees for Clinical Diagnostic Laboratory Tests
"(A) shall take effect on January 1, 1987,
"(B) shall apply for the 12-month period beginning on that date, and
"(C) shall take into account the percentage increase or decrease in the Consumer Price Index for all urban consumers (United States city average) occurring over an 18-month period, rather than over a 12-month period."
Extension of Medicare Physician Payment Provisions
Amount of payment under this part for physicians' services furnished between Oct. 1, 1985, and Mar. 14, 1986, to be determined on the same basis as the amount of such services furnished on Sept. 30, 1985, see section 5(b) of
Fee Schedules for Diagnostic Laboratory Tests and Feasibility of Direct Payments to Physicians; Report to Congress
"(1) The Comptroller General shall report to the Congress on—
"(A) the appropriateness of the fee schedules under section 1833(h) of the Social Security Act [
"(B) the potential impact of the adoption of a national fee schedule; and
"(C) the potential impact of applying a national fee schedule to clinical diagnostic laboratory tests provided by hospitals to their outpatients.
"(2) The Secretary of Health and Human Services shall report to the Congress with respect to the advisability and feasibility of a system of direct payment to any physician for all clinical diagnostic laboratory tests ordered by such physician.
"(3) The reports required by paragraphs (1) and (2) shall be submitted not later than January 1, 1987."
Pacemaker Reimbursement Review and Reform
"(1) The Secretary of Health and Human Services shall issue revisions to the current guidelines for the payment under part B of title XVIII of the Social Security Act [
"(2)(A) Except as provided in subparagraph (B), if the guidelines required by paragraph (1) have not been issued and put into effect by October 1, 1984, and until such guidelines have been issued and put into effect, payment may not be made under part B of title XVIII of the Social Security Act for transtelephonic monitoring procedures, with respect to a single-chamber cardiac pacemaker powered by lithium batteries, conducted more frequently than—
"(i) weekly during the first month after implantation,
"(ii) once every two months during the period representing 80 percent of the estimated life of the implanted device, and
"(iii) monthly thereafter.
"(B) Subparagraph (A) shall not apply in cases where the Secretary determines that special medical factors (including possible evidence of pacemaker or lead malfunction) justify more frequent transtelephonic monitoring procedures."
Payment for Preadmission Diagnostic Testing Performed in Physician's Office
Providers of Services To Calculate and Report Lesser-of-Cost-or-Charges Determinations Separately With Respect to Payments Under Parts A and B of This Subchapter; Issuance of Regulations
For provision directing the Secretary to issue regulations requiring providers of services to calculate and report the lesser-of-cost-or-charges determinations separately with respect to payments for services under parts A and B of this subchapter other than diagnostic tests under subsec. (h) of this section, see section 2308(a) of
Determination of Nominal Charges for Applying Nominality Test
For provision directing the Secretary to provide, in addition to other rules deemed appropriate, that charges representing 60 percent or less of costs be considered nominal for purposes of applying the nominality test under subsec. (a)(2)(B)(ii) of this section, see section 2308(b)(1) of
Study of Medicare Part B Payments; Compilation of Centralized Charge Data Base; Report to Congress
Monitoring Provision of Hepatitis B Vaccine; Review of Changes in Medical Technology
Report on Preadmission Diagnostic Testing Expenses
Study of Feasibility and Desirability of Imposing Copayment Requirement on Rural Health Clinic Visits; Report Not Later Than December 13, 1978
Prohibition Against Payments in Cases of Nonentitlement to Monthly Benefits Under Subchapter II or Suspension of Benefits of Aliens Outside the United States
2 So in original. The word "and" probably should not appear.
3 So in original. Probably should be followed by a comma.
4 See 2010 Amendment note for subsec. (a)(2)(F) to (H) below.
5 So in original. Probably should be followed by "to".
6 So in original. There is no subpar. (D).
7 So in original. Probably should be preceded by "a".
8 So in original. The comma after "subclause (II))" probably should follow "is performed".
9 So in original. Probably should be "such paragraph applies".
10 So in original. The word "this" probably should not appear.
11 So in original. The closing parenthesis preceding the comma probably should not appear.
12 So in original. Probably should be "are—".
13 So in original. Probably should be "subparagraph".
14 So in original. No par. (2) has been enacted.
15 So in original. Probably should be "a covered OPD".
16 So in original. Probably should be preceded by "under".
17 So in original. Probably should be "paragraphs".
18 So in original. Probably should be "exceed".
19 So in original. Probably should be preceded by "section".
§1395m. Special payment rules for particular items and services
(a) Payment for durable medical equipment
(1) General rule for payment
(A) In general
With respect to a covered item (as defined in paragraph (13)) for which payment is determined under this subsection, payment shall be made in the frequency specified in paragraphs (2) through (7) and in an amount equal to 80 percent of the payment basis described in subparagraph (B).
(B) Payment basis
Subject to subparagraph (F)(i), the payment basis described in this subparagraph is the lesser of—
(i) the actual charge for the item, or
(ii) the payment amount recognized under paragraphs (2) through (7) of this subsection for the item;
except that clause (i) shall not apply if the covered item is furnished by a public home health agency (or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low income) free of charge or at nominal charges to the public.
(C) Exclusive payment rule
Subject to subparagraph (F)(ii), this subsection shall constitute the exclusive provision of this subchapter for payment for covered items under this part or under part A to a home health agency.
(D) Reduction in fee schedules for certain items
With respect to a seat-lift chair or transcutaneous electrical nerve stimulator furnished on or after April 1, 1990, the Secretary shall reduce the payment amount applied under subparagraph (B)(ii) for such an item by 15 percent, and, in the case of a transcutaneous electrical nerve stimulator furnished on or after January 1, 1991, the Secretary shall further reduce such payment amount (as previously reduced) by 45 percent.
(E) Clinical conditions for coverage
(i) In general
The Secretary shall establish standards for clinical conditions for payment for covered items under this subsection.
(ii) Requirements
The standards established under clause (i) shall include the specification of types or classes of covered items that require, as a condition of payment under this subsection, a face-to-face examination of the individual by a physician (as defined in
(iii) Priority of establishment of standards
In establishing the standards under this subparagraph, the Secretary shall first establish standards for those covered items for which the Secretary determines there has been a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation to provide for payment of such covered items under this part.
(iv) Standards for power wheelchairs
Effective on December 8, 2003, in the case of a covered item consisting of a motorized or power wheelchair for an individual, payment may not be made for such covered item unless a physician (as defined in
(v) Limitation on payment for covered items
Payment may not be made for a covered item under this subsection unless the item meets any standards established under this subparagraph for clinical condition of coverage.
(F) Application of competitive acquisition; limitation of inherent reasonableness authority
In the case of covered items furnished on or after January 1, 2011, subject to subparagraphs (G) and (H), that are included in a competitive acquisition program in a competitive acquisition area under
(i) the payment basis under this subsection for such items and services furnished in such area shall be the payment basis determined under such competitive acquisition program;
(ii) the Secretary may (and, in the case of covered items furnished on or after January 1, 2016, subject to clause (iii), shall) use information on the payment determined under such competitive acquisition programs to adjust the payment amount otherwise recognized under subparagraph (B)(ii) for an area that is not a competitive acquisition area under
(iii) in the case of covered items furnished on or after January 1, 2016, the Secretary shall continue to make such adjustments described in clause (ii) as, under such competitive acquisition programs, additional covered items are phased in or information is updated as contracts under
(G) Use of information on competitive bid rates
The Secretary shall specify by regulation the methodology to be used in applying the provisions of subparagraph (F)(ii) and subsection (h)(1)(H)(ii). In promulgating such regulation, the Secretary shall consider the costs of items and services in areas in which such provisions would be applied compared to the payment rates for such items and services in competitive acquisition areas. In the case of items and services furnished on or after January 1, 2019, in making any adjustments under clause (ii) or (iii) of subparagraph (F), under subsection (h)(1)(H)(ii), or under
(i) solicit and take into account stakeholder input; and
(ii) take into account the highest amount bid by a winning supplier in a competitive acquisition area and a comparison of each of the following with respect to non-competitive acquisition areas and competitive acquisition areas:
(I) The average travel distance and cost associated with furnishing items and services in the area.
(II) The average volume of items and services furnished by suppliers in the area.
(III) The number of suppliers in the area.
(H) Diabetic supplies
(i) In general
On or after the date described in clause (ii), the payment amount under this part for diabetic supplies, including testing strips, that are non-mail order items (as defined by the Secretary) shall be equal to the single payment amounts established under the national mail order competition for diabetic supplies under
(ii) Date described
The date described in this clause is the date of the implementation of the single payment amounts under the national mail order competition for diabetic supplies under
(I) Treatment of vacuum erection systems
Effective for items and services furnished on and after July 1, 2015, vacuum erection systems described as prosthetic devices described in
(2) Payment for inexpensive and other routinely purchased durable medical equipment
(A) In general
Payment for an item of durable medical equipment (as defined in paragraph (13))—
(i) the purchase price of which does not exceed $150,
(ii) which the Secretary determines is acquired at least 75 percent of the time by purchase,
(iii) which is an accessory used in conjunction with a nebulizer, aspirator, or a ventilator excluded under paragraph (3)(A), or
(iv) in the case of devices furnished on or after October 1, 2015, which serves as a speech generating device or which is an accessory that is needed for the individual to effectively utilize such a device,
shall be made on a rental basis or in a lump-sum amount for the purchase of the item. The payment amount recognized for purchase or rental of such equipment is the amount specified in subparagraph (B) for purchase or rental, except that the total amount of payments with respect to an item may not exceed the payment amount specified in subparagraph (B) with respect to the purchase of the item.
(B) Payment amount
For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to the purchase or rental of an item furnished in a carrier service area—
(i) in 1989 and in 1990 is the average reasonable charge in the area for the purchase or rental, respectively, of the item for the 12-month period ending on June 30, 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987;
(ii) in 1991 is the sum of (I) 67 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(I) for 1991, and (II) 33 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1991;
(iii) in 1992 is the sum of (I) 33 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(II) for 1992, and (II) 67 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1992; and
(iv) in 1993 and each subsequent year is the national limited payment amount for the item or device computed under subparagraph (C)(ii) for that year (reduced by 10 percent, in the case of a blood glucose testing strip furnished after 1997 for an individual with diabetes).
(C) Computation of local payment amount and national limited payment amount
For purposes of subparagraph (B)—
(i) the local payment amount for an item or device for a year is equal to—
(I) for 1991, the amount specified in subparagraph (B)(i) for 1990 increased by the covered item update for 1991, and
(II) for 1992, 1993, and 1994, the amount determined under this clause for the preceding year increased by the covered item update for the year; and
(ii) the national limited payment amount for an item or device for a year is equal to—
(I) for 1991, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the weighted average of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the weighted average of all local payment amounts determined under such clause for such item,
(II) for 1992 and 1993, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year,
(III) for 1994, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the median of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the median of all local payment amounts determined under such clause for such item or device for that year, and
(IV) for each subsequent year, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year.
(3) Payment for items requiring frequent and substantial servicing
(A) In general
Payment for a covered item (such as IPPB machines and ventilators, excluding ventilators that are either continuous airway pressure devices or intermittent assist devices with continuous airway pressure devices) for which there must be frequent and substantial servicing in order to avoid risk to the patient's health shall be made on a monthly basis for the rental of the item and the amount recognized is the amount specified in subparagraph (B).
(B) Payment amount
For purposes of subparagraph (A), the amount specified in this subparagraph, with respect to an item or device furnished in a carrier service area—
(i) in 1989 and in 1990 is the average reasonable charge in the area for the rental of the item or device for the 12-month period ending with June 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987;
(ii) in 1991 is the sum of (I) 67 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(I) for 1991, and (II) 33 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1991;
(iii) in 1992 is the sum of (I) 33 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(II) for 1992, and (II) 67 percent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1992; and
(iv) in 1993 and each subsequent year is the national limited payment amount for the item or device computed under subparagraph (C)(ii) for that year.
(C) Computation of local payment amount and national limited payment amount
For purposes of subparagraph (B)—
(i) the local payment amount for an item or device for a year is equal to—
(I) for 1991, the amount specified in subparagraph (B)(i) for 1990 increased by the covered item update for 1991, and
(II) for 1992, 1993, and 1994, the amount determined under this clause for the preceding year increased by the covered item update for the year; and
(ii) the national limited payment amount for an item or device for a year is equal to—
(I) for 1991, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the weighted average of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the weighted average of all local payment amounts determined under such clause for such item,
(II) for 1992 and 1993, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year,
(III) for 1994, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the median of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the median of all local payment amounts determined under such clause for such item or device for that year, and
(IV) for each subsequent year, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year.
(4) Payment for certain customized items
Payment with respect to a covered item that is uniquely constructed or substantially modified to meet the specific needs of an individual patient, and for that reason cannot be grouped with similar items for purposes of payment under this subchapter, shall be made in a lump-sum amount (A) for the purchase of the item in a payment amount based upon the carrier's individual consideration for that item, and (B) for the reasonable and necessary maintenance and servicing for parts and labor not covered by the supplier's or manufacturer's warranty, when necessary during the period of medical need, and the amount recognized for such maintenance and servicing shall be paid on a lump-sum, as needed basis based upon the carrier's individual consideration for that item.
(5) Payment for oxygen and oxygen equipment
(A) In general
Payment for oxygen and oxygen equipment shall be made on a monthly basis in the monthly payment amount recognized under paragraph (9) for oxygen and oxygen equipment (other than portable oxygen equipment), subject to subparagraphs (B), (C), (E), and (F).
(B) Add-on for portable oxygen equipment
When portable oxygen equipment is used, but subject to subparagraph (D), the payment amount recognized under subparagraph (A) shall be increased by the monthly payment amount recognized under paragraph (9) for portable oxygen equipment.
(C) Volume adjustment
When the attending physician prescribes an oxygen flow rate—
(i) exceeding 4 liters per minute, the payment amount recognized under subparagraph (A), subject to subparagraph (D), shall be increased by 50 percent, or
(ii) of less than 1 liter per minute, the payment amount recognized under subparagraph (A) shall be decreased by 50 percent.
(D) Limit on adjustment
When portable oxygen equipment is used and the attending physician prescribes an oxygen flow rate exceeding 4 liters per minute, there shall only be an increase under either subparagraph (B) or (C), whichever increase is larger, and not under both such subparagraphs.
(E) Recertification for patients receiving home oxygen therapy
In the case of a patient receiving home oxygen therapy services who, at the time such services are initiated, has an initial arterial blood gas value at or above a partial pressure of 56 or an arterial oxygen saturation at or above 89 percent (or such other values, pressures, or criteria as the Secretary may specify) no payment may be made under this part for such services after the expiration of the 90-day period that begins on the date the patient first receives such services unless the patient's attending physician certifies that, on the basis of a follow-up test of the patient's arterial blood gas value or arterial oxygen saturation conducted during the final 30 days of such 90-day period, there is a medical need for the patient to continue to receive such services.
(F) Rental cap
(i) In general
Payment for oxygen equipment (including portable oxygen equipment) under this paragraph may not extend over a period of continuous use (as determined by the Secretary) of longer than 36 months.
(ii) Payments and rules after rental cap
After the 36th continuous month during which payment is made for the equipment under this paragraph—
(I) the supplier furnishing such equipment under this subsection shall continue to furnish the equipment during any period of medical need for the remainder of the reasonable useful lifetime of the equipment, as determined by the Secretary;
(II) payments for oxygen shall continue to be made in the amount recognized for oxygen under paragraph (9) for the period of medical need; and
(III) maintenance and servicing payments shall, if the Secretary determines such payments are reasonable and necessary, be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the equipment), and such payments shall be in an amount determined to be appropriate by the Secretary.
(6) Payment for other covered items (other than durable medical equipment)
Payment for other covered items (other than durable medical equipment and other covered items described in paragraph (3), (4), or (5)) shall be made in a lump-sum amount for the purchase of the item in the amount of the purchase price recognized under paragraph (8).
(7) Payment for other items of durable medical equipment
(A) Payment
In the case of an item of durable medical equipment not described in paragraphs (2) through (6), the following rules shall apply:
(i) Rental
(I) In general
Except as provided in clause (iii), payment for the item shall be made on a monthly basis for the rental of the item during the period of medical need (but payments under this clause may not extend over a period of continuous use (as determined by the Secretary) of longer than 13 months).
(II) Payment amount
Subject to subclause (III) and subparagraph (B), the amount recognized for the item, for each of the first 3 months of such period, is 10 percent of the purchase price recognized under paragraph (8) with respect to the item, and, for each of the remaining months of such period, is 7.5 percent of such purchase price.
(III) Special rule for power-driven wheelchairs
For purposes of payment for power-driven wheelchairs, subclause (II) shall be applied by substituting "15 percent" and "6 percent" for "10 percent" and "7.5 percent", respectively.
(ii) Ownership after rental
On the first day that begins after the 13th continuous month during which payment is made for the rental of an item under clause (i), the supplier of the item shall transfer title to the item to the individual.
(iii) Purchase agreement option for complex, rehabilitative power-driven wheelchairs
In the case of a complex, rehabilitative power-driven wheelchair, at the time the supplier furnishes the item, the supplier shall offer the individual the option to purchase the item, and payment for such item shall be made on a lump-sum basis if the individual exercises such option.
(iv) Maintenance and servicing
After the supplier transfers title to the item under clause (ii) or in the case of a power-driven wheelchair for which a purchase agreement has been entered into under clause (iii), maintenance and servicing payments shall, if the Secretary determines such payments are reasonable and necessary, be made (for parts and labor not covered by the supplier's or manufacturer's warranty, as determined by the Secretary to be appropriate for the particular type of durable medical equipment), and such payments shall be in an amount determined to be appropriate by the Secretary.
(B) Range for rental amounts
(i) For 1989
For items furnished during 1989, the payment amount recognized under subparagraph (A)(i) shall not be more than 115 percent, and shall not be less than 85 percent, of the prevailing charge established for rental of the item in January 1987, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987.
(ii) For 1990
For items furnished during 1990, clause (i) shall apply in the same manner as it applies to items furnished during 1989.
(C) Replacement of items
(i) Establishment of reasonable useful lifetime
In accordance with clause (iii), the Secretary shall determine and establish a reasonable useful lifetime for items of durable medical equipment for which payment may be made under this paragraph.
(ii) Payment for replacement items
If the reasonable lifetime of such an item, as so established, has been reached during a continuous period of medical need, or the carrier determines that the item is lost or irreparably damaged, the patient may elect to have payment for an item serving as a replacement for such item made—
(I) on a monthly basis for the rental of the replacement item in accordance with subparagraph (A); or
(II) in the case of an item for which a purchase agreement has been entered into under subparagraph (A)(iii), in a lump-sum amount for the purchase of the item.
(iii) Length of reasonable useful lifetime
The reasonable useful lifetime of an item of durable medical equipment under this subparagraph shall be equal to 5 years, except that, if the Secretary determines that, on the basis of prior experience in making payments for such an item under this subchapter, a reasonable useful lifetime of 5 years is not appropriate with respect to a particular item, the Secretary shall establish an alternative reasonable lifetime for such item.
(8) Purchase price recognized for miscellaneous devices and items
For purposes of paragraphs (6) and (7), the amount that is recognized under this paragraph as the purchase price for a covered item is the amount described in subparagraph (C) of this paragraph, determined as follows:
(A) Computation of local purchase price
Each carrier under
(i) The carrier shall compute a base local purchase price, for each item described—
(I) in paragraph (6) equal to the average reasonable charge in the locality for the purchase of the item for the 12-month period ending with June 1987, or
(II) in paragraph (7) equal to the average of the purchase prices on the claims submitted on an assignment-related basis for the unused item supplied during the 6-month period ending with December 1986.
(ii) The carrier shall compute a local purchase price, with respect to the furnishing of each particular item—
(I) in 1989 and 1990, equal to the base local purchase price computed under clause (i) increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987,
(II) in 1991, equal to the local purchase price computed under this clause for the previous year, increased by the covered item update for 1991, and decreased by the percentage by which the average of the reasonable charges for claims paid for all items described in paragraph (7) is lower than the average of the purchase prices submitted for such items during the final 9 months of 1988; 1 or
(III) in 1992, 1993, and 1994, equal to the local purchase price computed under this clause for the previous year increased by the covered item update for the year.
(B) Computation of national limited purchase price
With respect to the furnishing of a particular item in a year, the Secretary shall compute a national limited purchase price—
(i) for 1991, equal to the local purchase price computed under subparagraph (A)(ii) for the item for the year, except that such national limited purchase price may not exceed 100 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year, and may not be less than 85 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year;
(ii) for 1992 and 1993, the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year;
(iii) for 1994, the local purchase price computed under subparagraph (A)(ii) for the item for the year, except that such national limited purchase price may not exceed 100 percent of the median of all local purchase prices computed for the item under such subparagraph for the year and may not be less than 85 percent of the median of all local purchase prices computed under such subparagraph for the item for the year; and
(iv) for each subsequent year, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year.
(C) Purchase price recognized
For purposes of paragraphs (6) and (7), the amount that is recognized under this paragraph as the purchase price for each item furnished—
(i) in 1989 or 1990, is 100 percent of the local purchase price computed under subparagraph (A)(ii)(I);
(ii) in 1991, is the sum of (I) 67 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1991, and (II) 33 percent of the national limited purchase price computed under subparagraph (B) for 1991;
(iii) in 1992, is the sum of (I) 33 percent of the local purchase price computed under subparagraph (A)(ii)(III) for 1992, and (II) 67 percent of the national limited purchase price computed under subparagraph (B) for 1992; and
(iv) in 1993 or a subsequent year, is the national limited purchase price computed under subparagraph (B) for that year.
(9) Monthly payment amount recognized with respect to oxygen and oxygen equipment
For purposes of paragraph (5), the amount that is recognized under this paragraph for payment for oxygen and oxygen equipment is the monthly payment amount described in subparagraph (C) of this paragraph. Such amount shall be computed separately (i) for all items of oxygen and oxygen equipment (other than portable oxygen equipment) and (ii) for portable oxygen equipment (each such group referred to in this paragraph as an "item").
(A) Computation of local monthly payment rate
Each carrier under this section shall compute a base local payment rate for each item as follows:
(i) The carrier shall compute a base local average monthly payment rate per beneficiary as an amount equal to (I) the total reasonable charges for the item during the 12-month period ending with December 1986, divided by (II) the total number of months for all beneficiaries receiving the item in the area during the 12-month period for which the carrier made payment for the item under this subchapter.
(ii) The carrier shall compute a local average monthly payment rate for the item applicable—
(I) to 1989 and 1990, equal to 95 percent of the base local average monthly payment rate computed under clause (i) for the item increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 6-month period ending with December 1987, or
(II) to 1991, 1992, 1993, and 1994, equal to the local average monthly payment rate computed under this clause for the item for the previous year increased by the covered item increase for the year.
(B) Computation of national limited monthly payment rate
With respect to the furnishing of an item in a year, the Secretary shall compute a national limited monthly payment rate equal to—
(i) for 1991, the local monthly payment rate computed under subparagraph (A)(ii)(II) for the item for the year, except that such national limited monthly payment rate may not exceed 100 percent of the weighted average of all local monthly payment rates computed for the item under such subparagraph for the year, and may not be less than 85 percent of the weighted average of all local monthly payment rates computed for the item under such subparagraph for the year;
(ii) for 1992 and 1993, the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year;
(iii) for 1994, the local monthly payment rate computed under subparagraph (A)(ii) for the item for the year, except that such national limited monthly payment rate may not exceed 100 percent of the median of all local monthly payment rates computed for the item under such subparagraph for the year and may not be less than 85 percent of the median of all local monthly payment rates computed for the item under such subparagraph for the year;
(iv) for 1995, 1996, and 1997, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year;
(v) for 1998, 75 percent of the amount determined under this subparagraph for 1997; and
(vi) for 1999 and each subsequent year, 70 percent of the amount determined under this subparagraph for 1997.
(C) Monthly payment amount recognized
For purposes of paragraph (5), the amount that is recognized under this paragraph as the base monthly payment amount for each item furnished—
(i) in 1989 and in 1990, is 100 percent of the local average monthly payment rate computed under subparagraph (A)(ii) for the item;
(ii) in 1991, is the sum of (I) 67 percent of the local average monthly payment rate computed under subparagraph (A)(ii)(II) for the item for 1991, and (II) 33 percent of the national limited monthly payment rate computed under subparagraph (B)(i) for the item for 1991;
(iii) in 1992, is the sum of (I) 33 percent of the local average monthly payment rate computed under subparagraph (A)(ii)(II) for the item for 1992, and (II) 67 percent of the national limited monthly payment rate computed under subparagraph (B)(ii) for the item for 1992; and
(iv) in a subsequent year, is the national limited monthly payment rate computed under subparagraph (B) for the item for that year.
(D) Authority to create classes
(i) In general
Subject to clause (ii), the Secretary may establish separate classes for any item of oxygen and oxygen equipment and separate national limited monthly payment rates for each of such classes.
(ii) Budget neutrality
The Secretary may take actions under clause (i) only to the extent such actions do not result in expenditures for any year to be more or less than the expenditures which would have been made if such actions had not been taken. The requirement of the preceding sentence shall not apply beginning with the second calendar quarter beginning on or after December 27, 2020.
(10) Exceptions and adjustments
(A) Areas outside continental United States
Exceptions to the amounts recognized under the previous provisions of this subsection shall be made to take into account the unique circumstances of covered items furnished in Alaska, Hawaii, or Puerto Rico.
(B) Adjustment for inherent reasonableness
The Secretary is authorized to apply the provisions of paragraphs (8) and (9) of
(C) Transcutaneous electrical nerve stimulator (TENS)
In order to permit an attending physician time to determine whether the purchase of a transcutaneous electrical nerve stimulator is medically appropriate for a particular patient, the Secretary may determine an appropriate payment amount for the initial rental of such item for a period of not more than 2 months. If such item is subsequently purchased, the payment amount with respect to such purchase is the payment amount determined under paragraph (2).
(11) Improper billing and requirement of physician order
(A) Improper billing for certain rental items
Notwithstanding any other provision of this subchapter, a supplier of a covered item for which payment is made under this subsection and which is furnished on a rental basis shall continue to supply the item without charge (other than a charge provided under this subsection for the maintenance and servicing of the item) after rental payments may no longer be made under this subsection. If a supplier knowingly and willfully violates the previous sentence, the Secretary may apply sanctions against the supplier under
(B) Requirement of physician order
(i) In general
The Secretary is authorized to require, for specified covered items, that payment may be made under this subsection with respect to the item only if a physician enrolled under
(ii) Requirement for face to face encounter
The Secretary shall require that such an order be written pursuant to a physician, a physician assistant, a nurse practitioner, or a clinical nurse specialist (as those terms are defined in
(12) Regional carriers
The Secretary may designate, by regulation under
(13) "Covered item" defined
In this subsection, the term "covered item" means durable medical equipment (as defined in
(14) Covered item update
In this subsection, the term "covered item update" means, with respect to a year—
(A) for 1991 and 1992, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year reduced by 1 percentage point;
(B) for 1993, 1994, 1995, 1996, and 1997, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year;
(C) for each of the years 1998 through 2000, 0 percentage points;
(D) for 2001, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June 2000;
(E) for 2002, 0 percentage points;
(F) for 2003, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of 2002;
(G) for 2004 through 2006—
(i) subject to clause (ii), in the case of class III medical devices described in
(ii) in the case of covered items not described in clause (i), 0 percentage points;
(H) for 2007—
(i) subject to clause (ii), in the case of class III medical devices described in
(ii) in the case of covered items not described in clause (i), 0 percentage points;
(I) for 2008—
(i) subject to clause (ii), in the case of class III medical devices described in
(ii) in the case of covered items not described in clause (i), 0 percentage points;
(J) for 2009—
(i) in the case of items and services furnished in any geographic area, if such items or services were selected for competitive acquisition in any area under the competitive acquisition program under
(ii) in the case of other items and services, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2008;
(K) for 2010, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of the previous year; and
(L) for 2011 and each subsequent year—
(i) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by—
(ii) the productivity adjustment described in
The application of subparagraph (L)(ii) may result in the covered item update under this paragraph being less than 0.0 for a year, and may result in payment rates under this subsection for a year being less than such payment rates for the preceding year.
(15) Advance determinations of coverage for certain items
(A) Development of lists of items by Secretary
The Secretary may develop and periodically update a list of items for which payment may be made under this subsection that the Secretary determines, on the basis of prior payment experience, are frequently subject to unnecessary utilization throughout a carrier's entire service area or a portion of such area.
(B) Development of lists of suppliers by Secretary
The Secretary may develop and periodically update a list of suppliers of items for which payment may be made under this subsection with respect to whom—
(i) the Secretary has found that a substantial number of claims for payment under this part for items furnished by the supplier have been denied on the basis of the application of
(ii) the Secretary has identified a pattern of overutilization resulting from the business practice of the supplier.
(C) Determinations of coverage in advance
A carrier shall determine in advance of delivery of an item whether payment for the item may not be made because the item is not covered or because of the application of
(i) the item is included on the list developed by the Secretary under subparagraph (A);
(ii) the item is furnished by a supplier included on the list developed by the Secretary under subparagraph (B); or
(iii) the item is a customized item (other than inexpensive items specified by the Secretary) and the patient to whom the item is to be furnished or the supplier requests that such advance determination be made.
(16) Disclosure of information and surety bond
The Secretary shall not provide for the issuance (or renewal) of a provider number for a supplier of durable medical equipment, for purposes of payment under this part for durable medical equipment furnished by the supplier, unless the supplier provides the Secretary on a continuing basis—
(A) with—
(i) full and complete information as to the identity of each person with an ownership or control interest (as defined in
(ii) to the extent determined to be feasible under regulations of the Secretary, the name of any disclosing entity (as defined in
(B) with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000 that the Secretary determines is commensurate with the volume of the billing of the supplier.
The Secretary may waive the requirement of a bond under subparagraph (B) in the case of a supplier that provides a comparable surety bond under State law. The Secretary, at the Secretary's discretion, may impose the requirements of the first sentence with respect to some or all providers of items or services under part A or some or all suppliers or other persons (other than physicians or other practitioners, as defined in
(17) Prohibition against unsolicited telephone contacts by suppliers
(A) In general
A supplier of a covered item under this subsection may not contact an individual enrolled under this part by telephone regarding the furnishing of a covered item to the individual unless 1 of the following applies:
(i) The individual has given written permission to the supplier to make contact by telephone regarding the furnishing of a covered item.
(ii) The supplier has furnished a covered item to the individual and the supplier is contacting the individual only regarding the furnishing of such covered item.
(iii) If the contact is regarding the furnishing of a covered item other than a covered item already furnished to the individual, the supplier has furnished at least 1 covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.
(B) Prohibiting payment for items furnished subsequent to unsolicited contacts
If a supplier knowingly contacts an individual in violation of subparagraph (A), no payment may be made under this part for any item subsequently furnished to the individual by the supplier.
(C) Exclusion from program for suppliers engaging in pattern of unsolicited contacts
If a supplier knowingly contacts individuals in violation of subparagraph (A) to such an extent that the supplier's conduct establishes a pattern of contacts in violation of such subparagraph, the Secretary shall exclude the supplier from participation in the programs under this chapter, in accordance with the procedures set forth in subsections (c), (f), and (g) of
(18) Refund of amounts collected for certain disallowed items
(A) In general
If a nonparticipating supplier furnishes to an individual enrolled under this part a covered item for which no payment may be made under this part by reason of paragraph (17)(B), the supplier shall refund on a timely basis to the patient (and shall be liable to the patient for) any amounts collected from the patient for the item, unless—
(i) the supplier establishes that the supplier did not know and could not reasonably have been expected to know that payment may not be made for the item by reason of paragraph (17)(B), or
(ii) before the item was furnished, the patient was informed that payment under this part may not be made for that item and the patient has agreed to pay for that item.
(B) Sanctions
If a supplier knowingly and willfully fails to make refunds in violation of subparagraph (A), the Secretary may apply sanctions against the supplier in accordance with
(C) Notice
Each carrier with a contract in effect under this part with respect to suppliers of covered items shall send any notice of denial of payment for covered items by reason of paragraph (17)(B) and for which payment is not requested on an assignment-related basis to the supplier and the patient involved.
(D) Timely basis defined
A refund under subparagraph (A) is considered to be on a timely basis only if—
(i) in the case of a supplier who does not request reconsideration or seek appeal on a timely basis, the refund is made within 30 days after the date the supplier receives a denial notice under subparagraph (C), or
(ii) in the case in which such a reconsideration or appeal is taken, the refund is made within 15 days after the date the supplier receives notice of an adverse determination on reconsideration or appeal.
(19) Certain upgraded items
(A) Individual's right to choose upgraded item
Notwithstanding any other provision of this subchapter, the Secretary may issue regulations under which an individual may purchase or rent from a supplier an item of upgraded durable medical equipment for which payment would be made under this subsection if the item were a standard item.
(B) Payments to supplier
In the case of the purchase or rental of an upgraded item under subparagraph (A)—
(i) the supplier shall receive payment under this subsection with respect to such item as if such item were a standard item; and
(ii) the individual purchasing or renting the item shall pay the supplier an amount equal to the difference between the supplier's charge and the amount under clause (i).
In no event may the supplier's charge for an upgraded item exceed the applicable fee schedule amount (if any) for such item.
(C) Consumer protection safeguards
Any regulations under subparagraph (A) shall provide for consumer protection standards with respect to the furnishing of upgraded equipment under subparagraph (A). Such regulations shall provide for—
(i) determination of fair market prices with respect to an upgraded item;
(ii) full disclosure of the availability and price of standard items and proof of receipt of such disclosure information by the beneficiary before the furnishing of the upgraded item;
(iii) conditions of participation for suppliers in the billing arrangement;
(iv) sanctions of suppliers who are determined to engage in coercive or abusive practices, including exclusion; and
(v) such other safeguards as the Secretary determines are necessary.
(20) Identification of quality standards
(A) In general
Subject to subparagraph (C), the Secretary shall establish and implement quality standards for suppliers of items and services described in subparagraph (D) to be applied by recognized independent accreditation organizations (as designated under subparagraph (B)) and with which such suppliers shall be required to comply in order to—
(i) furnish any such item or service for which payment is made under this part; and
(ii) receive or retain a provider or supplier number used to submit claims for reimbursement for any such item or service for which payment may be made under this subchapter.
(B) Designation of independent accreditation organizations
Not later than the date that is 1 year after the date on which the Secretary implements the quality standards under subparagraph (A), notwithstanding
(C) Quality standards
The quality standards described in subparagraph (A) may not be less stringent than the quality standards that would otherwise apply if this paragraph did not apply and shall include consumer services standards.
(D) Items and services described
The items and services described in this subparagraph are the following items and services, as the Secretary determines appropriate:
(i) Covered items (as defined in paragraph (13)) for which payment may otherwise be made under this subsection.
(ii) Prosthetic devices and orthotics and prosthetics described in subsection (h)(4).
(iii) Items and services described in
(iv) Lymphedema compression treatment items (as defined in
(E) Implementation
The Secretary may establish by program instruction or otherwise the quality standards under this paragraph, including subparagraph (F), after consultation with representatives of relevant parties. Such standards shall be applied prospectively and shall be published on the Internet website of the Centers for Medicare & Medicaid Services.
(F) Application of accreditation requirement
In implementing quality standards under this paragraph—
(i) subject to clause (ii) and subparagraph (G), the Secretary shall require suppliers furnishing items and services described in subparagraph (D) on or after October 1, 2009, directly or as a subcontractor for another entity, to have submitted to the Secretary evidence of accreditation by an accreditation organization designated under subparagraph (B) as meeting applicable quality standards, except that the Secretary shall not require under this clause pharmacies to obtain such accreditation before January 1, 2010, except that the Secretary shall not require a pharmacy to have submitted to the Secretary such evidence of accreditation prior to January 1, 2011; and
(ii) in applying such standards and the accreditation requirement of clause (i) with respect to eligible professionals (as defined in
(I) such standards and accreditation requirement shall not apply to such professionals and persons unless the Secretary determines that the standards being applied are designed specifically to be applied to such professionals and persons; and
(II) the Secretary may exempt such professionals and persons from such standards and requirement if the Secretary determines that licensing, accreditation, or other mandatory quality requirements apply to such professionals and persons with respect to the furnishing of such items and services.
(G) Application of accreditation requirement to certain pharmacies
(i) In general
With respect to items and services furnished on or after January 1, 2011, in implementing quality standards under this paragraph—
(I) subject to subclause (II), in applying such standards and the accreditation requirement of subparagraph (F)(i) with respect to pharmacies described in clause (ii) furnishing such items and services, such standards and accreditation requirement shall not apply to such pharmacies; and
(II) the Secretary may apply to such pharmacies an alternative accreditation requirement established by the Secretary if the Secretary determines such alternative accreditation requirement is more appropriate for such pharmacies.
(ii) Pharmacies described
A pharmacy described in this clause is a pharmacy that meets each of the following criteria:
(I) The total billings by the pharmacy for such items and services under this subchapter are less than 5 percent of total pharmacy sales, as determined based on the average total pharmacy sales for the previous 3 calendar years, 3 fiscal years, or other yearly period specified by the Secretary.
(II) The pharmacy has been enrolled under
(III) The pharmacy submits to the Secretary an attestation, in a form and manner, and at a time, specified by the Secretary, that the pharmacy meets the criteria described in subclauses (I) and (II). Such attestation shall be subject to
(IV) The pharmacy agrees to submit materials as requested by the Secretary, or during the course of an audit conducted on a random sample of pharmacies selected annually, to verify that the pharmacy meets the criteria described in subclauses (I) and (II). Materials submitted under the preceding sentence shall include a certification by an accountant on behalf of the pharmacy or the submission of tax returns filed by the pharmacy during the relevant periods, as requested by the Secretary.
(21) Special payment rule for specified items and supplies
(A) In general
Notwithstanding the preceding provisions of this subsection, for specified items and supplies (described in subparagraph (B)) furnished during 2005, the payment amount otherwise determined under this subsection for such specified items and supplies shall be reduced by the percentage difference between—
(i) the amount of payment otherwise determined for the specified item or supply under this subsection for 2002, and
(ii) the amount of payment for the specified item or supply under
(B) Specified item or supply described
For purposes of subparagraph (A), a specified item or supply means oxygen and oxygen equipment, standard wheelchairs (including standard power wheelchairs), nebulizers, diabetic supplies consisting of lancets and testing strips, hospital beds, and air mattresses, but only if the HCPCS code for the item or supply is identified in a table referred to in subparagraph (A)(ii).
(C) Application of update to special payment amount
The covered item update under paragraph (14) for specified items and supplies for 2006 and each subsequent year shall be applied to the payment amount under subparagraph (A) unless payment is made for such items and supplies under
(22) Special payment rule for diabetic supplies
Notwithstanding the preceding provisions of this subsection, for purposes of determining the payment amount under this subsection for diabetic supplies furnished on or after the first day of the calendar quarter during 2013 that is at least 30 days after January 2, 2013, and before the date described in paragraph (1)(H)(ii), the Secretary shall recalculate and apply the covered item update under paragraph (14) as if subparagraph (J)(i) of such paragraph was amended by striking "but only if furnished through mail order".
(b) Fee schedules for radiologist services
(1) Development
The Secretary shall develop—
(A) a relative value scale to serve as the basis for the payment for radiologist services under this part, and
(B) using such scale and appropriate conversion factors and subject to subsection (c)(1)(A), fee schedules (on a regional, statewide, locality, or carrier service area basis) for payment for radiologist services under this part, to be implemented for such services furnished during 1989.
(2) Consultation
In carrying out paragraph (1), the Secretary shall regularly consult closely with the Physician Payment Review Commission, the American College of Radiology, and other organizations representing physicians or suppliers who furnish radiologist services and shall share with them the data and data analysis being used to make the determinations under paragraph (1), including data on variations in current medicare payments by geographic area, and by service and physician specialty.
(3) Considerations
In developing the relative value scale and fee schedules under paragraph (1), the Secretary—
(A) shall take into consideration variations in the cost of furnishing such services among geographic areas and among different sites where services are furnished, and
(B) may also take into consideration such other factors respecting the manner in which physicians in different specialties furnish such services as may be appropriate to assure that payment amounts are equitable and designed to promote effective and efficient provision of radiologist services by physicians in the different specialties.
(4) Savings
(A) Budget neutral fee schedules
The Secretary shall develop preliminary fee schedules for 1989, which are designed to result in the same amount of aggregate payments (net of any coinsurance and deductibles under
(B) Initial savings
The fee schedules established for payment purposes under this subsection for services furnished in 1989 shall be 97 percent of the amounts permitted under the preliminary fee schedules developed under subparagraph (A).
(C) 1990 fee schedules
For radiologist services (other than portable X-ray services) furnished under this part during 1990, after March 31 of such year, the conversion factors used under this subsection shall be 96 percent of the conversion factors that applied under this subsection as of December 31, 1989.
(D) 1991 fee schedules
For radiologist services (other than portable X-ray services) furnished under this part during 1991, the conversion factors used in a locality under this subsection shall, subject to clause (vii), be reduced to the adjusted conversion factor for the locality determined as follows:
(i) National weighted average conversion factor
The Secretary shall estimate the national weighted average of the conversion factors used under this subsection for services furnished during 1990 beginning on April 1, using the best available data.
(ii) Reduced national weighted average
The national weighted average estimated under clause (i) shall be reduced by 13 percent.
(iii) Computation of 1990 locality index relative to national average
The Secretary shall establish an index which reflects, for each locality, the ratio of the conversion factor used in the locality under this subsection to the national weighted average estimated under clause (i).
(iv) Adjusted conversion factor
The adjusted conversion factor for the professional or technical component of a service in a locality is the sum of ½ of the locally-adjusted amount determined under clause (v) and ½ of the GPCI-adjusted amount determined under clause (vi).
(v) Locally-adjusted amount
For purposes of clause (iv), the locally adjusted amount determined under this clause is the product of (I) the national weighted average conversion factor computed under clause (ii), and (II) the index value established under clause (iii) for the locality.
(vi) GPCI-adjusted amount
For purposes of clause (iv), the GPCI-adjusted amount determined under this clause is the sum of—
(I) the product of (a) the portion of the reduced national weighted average conversion factor computed under clause (ii) which is attributable to physician work and (b) the geographic work index value for the locality (specified in Addendum C to the Model Fee Schedule for Physician Services (published on September 4, 1990, 55 Federal Register pp. 36238–36243)); and
(II) the product of (a) the remaining portion of the reduced national weighted average conversion factor computed under clause (ii), and (b) the geographic practice cost index value specified in
In applying this clause with respect to the professional component of a service, 80 percent of the conversion factor shall be considered to be attributable to physician work and with respect to the technical component of the service, 0 percent shall be considered to be attributable to physician work.
(vii) Limits on conversion factor
The conversion factor to be applied to a locality to the professional or technical component of a service shall not be reduced under this subparagraph by more than 9.5 percent below the conversion factor applied in the locality under subparagraph (C) to such component, but in no case shall the conversion factor be less than 60 percent of the national weighted average of the conversion factors (computed under clause (i)).
(E) Rule for certain scanning services
In the case of the technical components of magnetic resonance imaging (MRI) services and computer assisted tomography (CAT) services furnished after December 31, 1990, the amount otherwise payable shall be reduced by 10 percent.
(F) Subsequent updating
For radiologist services furnished in subsequent years, the fee schedules shall be the schedules for the previous year updated by the percentage increase in the MEI (as defined in
(G) Nonparticipating physicians and suppliers
Each fee schedule so established shall provide that the payment rate recognized for nonparticipating physicians and suppliers is equal to the appropriate percent (as defined in
(5) Limiting charges of nonparticipating physicians and suppliers
(A) In general
In the case of radiologist services furnished after January 1, 1989, for which payment is made under a fee schedule under this subsection, if a nonparticipating physician or supplier furnishes the service to an individual entitled to benefits under this part, the physician or supplier may not charge the individual more than the limiting charge (as defined in subparagraph (B)).
(B) "Limiting charge" defined
In subparagraph (A), the term "limiting charge" means, with respect to a service furnished—
(i) in 1989, 125 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1),
(ii) in 1990, 120 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1), and
(iii) after 1990, 115 percent of the amount specified for the service in the appropriate fee schedule established under paragraph (1).
(C) Enforcement
If a physician or supplier knowingly and willfully bills in violation of subparagraph (A), the Secretary may apply sanctions against such physician or supplier in accordance with
(6) "Radiologist services" defined
For the purposes of this subsection and
(A) who is certified, or eligible to be certified, by the American Board of Radiology, or
(B) for whom radiology services account for at least 50 percent of the total amount of charges made under this part.
(c) Payment and standards for screening mammography
(1) In general
With respect to expenses incurred for screening mammography (as defined in
(A) for screening mammography conducted consistent with the frequency permitted under paragraph (2); and
(B) if the screening mammography is conducted by a facility that has a certificate (or provisional certificate) issued under
(2) Frequency covered
(A) In general
Subject to revision by the Secretary under subparagraph (B)—
(i) no payment may be made under this part for screening mammography performed on a woman under 35 years of age;
(ii) payment may be made under this part for only one screening mammography performed on a woman over 34 years of age, but under 40 years of age; and
(iii) in the case of a woman over 39 years of age, payment may not be made under this part for screening mammography performed within 11 months following the month in which a previous screening mammography was performed.
(B) Revision of frequency
(i) Review
The Secretary, in consultation with the Director of the National Cancer Institute, shall review periodically the appropriate frequency for performing screening mammography, based on age and such other factors as the Secretary believes to be pertinent.
(ii) Revision of frequency
The Secretary, taking into consideration the review made under clause (i), may revise from time to time the frequency with which screening mammography may be paid for under this subsection.
(d) Frequency limits and payment for colorectal cancer screening tests
(1) Screening fecal-occult blood tests
(A) Payment amount
The payment amount for colorectal cancer screening tests consisting of screening fecal-occult blood tests is equal to the payment amount established for diagnostic fecal-occult blood tests under
(B) Frequency limit
No payment may be made under this part for a colorectal cancer screening test consisting of a screening fecal-occult blood test—
(i) if the individual is under 50 years of age; or
(ii) if the test is performed within the 11 months after a previous screening fecal-occult blood test.
(2) Screening flexible sigmoidoscopies
(A) Fee schedule
With respect to colorectal cancer screening tests consisting of screening flexible sigmoidoscopies, payment under
(B) Payment limit
In the case of screening flexible sigmoidoscopy services, payment under this part shall not exceed such amount as the Secretary specifies, based upon the rates recognized for diagnostic flexible sigmoidoscopy services.
(C) Facility payment limit
(i) In general
Notwithstanding subsections (i)(2)(A) and (t) of
(I) in accordance with regulations, may be performed in an ambulatory surgical center and for which the Secretary permits ambulatory surgical center payments under this part, and
(II) are performed in an ambulatory surgical center or hospital outpatient department,
payment under this part shall be based on the lesser of the amount under the fee schedule that would apply to such services if they were performed in a hospital outpatient department in an area or the amount under the fee schedule that would apply to such services if they were performed in an ambulatory surgical center in the same area.
(ii) Limitation on coinsurance
Subject to
(I) in computing the amount of any applicable copayment, the computation of such coinsurance shall be based upon the fee schedule under which payment is made for the services, and
(II) the amount of such coinsurance is equal to 25 percent of the payment amount under the fee schedule described in subclause (I).
(D) Special rule for detected lesions
Subject to
(E) Frequency limit
No payment may be made under this part for a colorectal cancer screening test consisting of a screening flexible sigmoidoscopy—
(i) if the individual is under 50 years of age; or
(ii) if the procedure is performed within the 47 months after a previous screening flexible sigmoidoscopy or, in the case of an individual who is not at high risk for colorectal cancer, if the procedure is performed within the 119 months after a previous screening colonoscopy.
(3) Screening colonoscopy
(A) Fee schedule
With respect to colorectal cancer screening test consisting of a screening colonoscopy, payment under
(B) Payment limit
In the case of screening colonoscopy services, payment under this part shall not exceed such amount as the Secretary specifies, based upon the rates recognized for diagnostic colonoscopy services.
(C) Facility payment limit
(i) In general
Notwithstanding subsections (i)(2)(A) and (t) of
(ii) Limitation on coinsurance
Subject to
(I) in computing the amount of any applicable coinsurance, the computation of such coinsurance shall be based upon the fee schedule under which payment is made for the services, and
(II) the amount of such coinsurance is equal to 25 percent of the payment amount under the fee schedule described in subclause (I).
(D) Special rule for detected lesions
Subject to
(E) Frequency limit
No payment may be made under this part for a colorectal cancer screening test consisting of a screening colonoscopy for individuals at high risk for colorectal cancer if the procedure is performed within the 23 months after a previous screening colonoscopy or for other individuals if the procedure is performed within the 119 months after a previous screening colonoscopy or within 47 months after a previous screening flexible sigmoidoscopy.
(e) Accreditation requirement for advanced diagnostic imaging services
(1) In general
(A) In general
Beginning with January 1, 2012, with respect to the technical component of advanced diagnostic imaging services for which payment is made under the fee schedule established under
(B) Advanced diagnostic imaging services defined
In this subsection, the term "advanced diagnostic imaging services" includes—
(i) diagnostic magnetic resonance imaging, computed tomography, and nuclear medicine (including positron emission tomography); and
(ii) such other diagnostic imaging services, including services described in
(C) Supplier defined
In this subsection, the term "supplier" has the meaning given such term in
(2) Accreditation organizations
(A) Factors for designation of accreditation organizations
The Secretary shall consider the following factors in designating accreditation organizations under subparagraph (B)(i) 2 and in reviewing and modifying the list of accreditation organizations designated pursuant to subparagraph (C):
(i) The ability of the organization to conduct timely reviews of accreditation applications.
(ii) Whether the organization has established a process for the timely integration of new advanced diagnostic imaging services into the organization's accreditation program.
(iii) Whether the organization uses random site visits, site audits, or other strategies for ensuring accredited suppliers maintain adherence to the criteria described in paragraph (3).
(iv) The ability of the organization to take into account the capacities of suppliers located in a rural area (as defined in
(v) Whether the organization has established reasonable fees to be charged to suppliers applying for accreditation.
(vi) Such other factors as the Secretary determines appropriate.
(B) Designation
Not later than January 1, 2010, the Secretary shall designate organizations to accredit suppliers furnishing the technical component of advanced diagnostic imaging services. The list of accreditation organizations so designated may be modified pursuant to subparagraph (C).
(C) Review and modification of list of accreditation organizations
(i) In general
The Secretary shall review the list of accreditation organizations designated under subparagraph (B) taking into account the factors under subparagraph (A). Taking into account the results of such review, the Secretary may, by regulation, modify the list of accreditation organizations designated under subparagraph (B).
(ii) Special rule for accreditations done prior to removal from list of designated accreditation organizations
In the case where the Secretary removes an organization from the list of accreditation organizations designated under subparagraph (B), any supplier that is accredited by the organization during the period beginning on the date on which the organization is designated as an accreditation organization under subparagraph (B) and ending on the date on which the organization is removed from such list shall be considered to have been accredited by an organization designated by the Secretary under subparagraph (B) for the remaining period such accreditation is in effect.
(3) Criteria for accreditation
The Secretary shall establish procedures to ensure that the criteria used by an accreditation organization designated under paragraph (2)(B) to evaluate a supplier that furnishes the technical component of advanced diagnostic imaging services for the purpose of accreditation of such supplier is specific to each imaging modality. Such criteria shall include—
(A) standards for qualifications of medical personnel who are not physicians and who furnish the technical component of advanced diagnostic imaging services;
(B) standards for qualifications and responsibilities of medical directors and supervising physicians, including standards that recognize the considerations described in paragraph (4);
(C) procedures to ensure that equipment used in furnishing the technical component of advanced diagnostic imaging services meets performance specifications;
(D) standards that require the supplier have procedures in place to ensure the safety of persons who furnish the technical component of advanced diagnostic imaging services and individuals to whom such services are furnished;
(E) standards that require the establishment and maintenance of a quality assurance and quality control program by the supplier that is adequate and appropriate to ensure the reliability, clarity, and accuracy of the technical quality of diagnostic images produced by such supplier; and
(F) any other standards or procedures the Secretary determines appropriate.
(4) Recognition in standards for the evaluation of medical directors and supervising physicians
The standards described in paragraph (3)(B) shall recognize whether a medical director or supervising physician—
(A) in a particular specialty receives training in advanced diagnostic imaging services in a residency program;
(B) has attained, through experience, the necessary expertise to be a medical director or a supervising physician;
(C) has completed any continuing medical education courses relating to such services; or
(D) has met such other standards as the Secretary determines appropriate.
(5) Rule for accreditations made prior to designation
In the case of a supplier that is accredited before January 1, 2010, by an accreditation organization designated by the Secretary under paragraph (2)(B) as of January 1, 2010, such supplier shall be considered to have been accredited by an organization designated by the Secretary under such paragraph as of January 1, 2012, for the remaining period such accreditation is in effect.
(f) Reduction in payments for physician pathology services during 1991
(1) In general
For physician pathology services furnished under this part during 1991, the prevailing charges used in a locality under this part shall be 7 percent below the prevailing charges used in the locality under this part in 1990 after March 31.
(2) Limitation
The prevailing charge for the technical and professional components of an 3 physician pathology service furnished by a physician through an independent laboratory shall not be reduced pursuant to paragraph (1) to the extent that such reduction would reduce such prevailing charge below 115 percent of the prevailing charge for the professional component of such service when furnished by a hospital-based physician in the same locality. For purposes of the preceding sentence, an independent laboratory is a laboratory that is independent of a hospital and separate from the attending or consulting physicians' office.
(g) Payment for outpatient critical access hospital services
(1) In general
The amount of payment for outpatient critical access hospital services of a critical access hospital is equal to 101 percent of the reasonable costs of the hospital in providing such services, unless the hospital makes the election under paragraph (2).
(2) Election of cost-based hospital outpatient service payment plus fee schedule for professional services
A critical access hospital may elect to be paid for outpatient critical access hospital services amounts equal to the sum of the following, less the amount that such hospital may charge as described in
(A) Facility fee
With respect to facility services, not including any services for which payment may be made under subparagraph (B), 101 percent of the reasonable costs of the critical access hospital in providing such services.
(B) Fee schedule for professional services
With respect to professional services otherwise included within outpatient critical access hospital services, 115 percent of such amounts as would otherwise be paid under this part if such services were not included in outpatient critical access hospital services. Subsections (x) and (y) of
The Secretary may not require, as a condition for applying subparagraph (B) with respect to a critical access hospital, that each physician or other practitioner providing professional services in the hospital must assign billing rights with respect to such services, except that such subparagraph shall not apply to those physicians and practitioners who have not assigned such billing rights.
(3) Disregarding charges
The payment amounts under this subsection shall be determined without regard to the amount of the customary or other charge.
(4) Treatment of clinical diagnostic laboratory services
No coinsurance, deductible, copayment, or other cost-sharing otherwise applicable under this part shall apply with respect to clinical diagnostic laboratory services furnished as an outpatient critical access hospital service. Nothing in this subchapter shall be construed as providing for payment for clinical diagnostic laboratory services furnished as part of outpatient critical access hospital services, other than on the basis described in this subsection. For purposes of the preceding sentence and
(5) Coverage of costs for certain emergency room on-call providers
In determining the reasonable costs of outpatient critical access hospital services under paragraphs (1) and (2)(A), the Secretary shall recognize as allowable costs, amounts (as defined by the Secretary) for reasonable compensation and related costs for physicians, physician assistants, nurse practitioners, and clinical nurse specialists who are on-call (as defined by the Secretary) to provide emergency services but who are not present on the premises of the critical access hospital involved, and are not otherwise furnishing services covered under this subchapter and are not on-call at any other provider or facility.
(h) Payment for prosthetic devices and orthotics and prosthetics
(1) General rule for payment
(A) In general
Payment under this subsection for prosthetic devices and orthotics and prosthetics shall be made in a lump-sum amount for the purchase of the item in an amount equal to 80 percent of the payment basis described in subparagraph (B).
(B) Payment basis
Except as provided in subparagraphs (C), (E), and (H)(i), the payment basis described in this subparagraph is the lesser of—
(i) the actual charge for the item; or
(ii) the amount recognized under paragraph (2) as the purchase price for the item.
(C) Exception for certain public home health agencies
Subparagraph (B)(i) shall not apply to an item furnished by a public home health agency (or by another home health agency which demonstrates to the satisfaction of the Secretary that a significant portion of its patients are low income) free of charge or at nominal charges to the public.
(D) Exclusive payment rule
Subject to subparagraph (H)(ii), this subsection shall constitute the exclusive provision of this subchapter for payment for prosthetic devices, orthotics, and prosthetics under this part or under part A to a home health agency.
(E) Exception for certain items
Payment for ostomy supplies, tracheostomy supplies, and urologicals shall be made in accordance with subparagraphs (B) and (C) of subsection (a)(2).
(F) Special payment rules for certain prosthetics and custom-fabricated orthotics
(i) In general
No payment shall be made under this subsection for an item of custom-fabricated orthotics described in clause (ii) or for an item of prosthetics unless such item is—
(I) furnished by a qualified practitioner; and
(II) fabricated by a qualified practitioner or a qualified supplier at a facility that meets such criteria as the Secretary determines appropriate.
(ii) Description of custom-fabricated item
(I) In general
An item described in this clause is an item of custom-fabricated orthotics that requires education, training, and experience to custom-fabricate and that is included in a list established by the Secretary in subclause (II). Such an item does not include shoes and shoe inserts.
(II) List of items
The Secretary, in consultation with appropriate experts in orthotics (including national organizations representing manufacturers of orthotics), shall establish and update as appropriate a list of items to which this subparagraph applies. No item may be included in such list unless the item is individually fabricated for the patient over a positive model of the patient.
(iii) Qualified practitioner defined
In this subparagraph, the term "qualified practitioner" means a physician or other individual who—
(I) is a qualified physical therapist or a qualified occupational therapist;
(II) in the case of a State that provides for the licensing of orthotics and prosthetics, is licensed in orthotics or prosthetics by the State in which the item is supplied; or
(III) in the case of a State that does not provide for the licensing of orthotics and prosthetics, is specifically trained and educated to provide or manage the provision of prosthetics and custom-designed or -fabricated orthotics, and is certified by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/Prosthetist Certification, or is credentialed and approved by a program that the Secretary determines, in consultation with appropriate experts in orthotics and prosthetics, has training and education standards that are necessary to provide such prosthetics and orthotics.
(iv) Qualified supplier defined
In this subparagraph, the term "qualified supplier" means any entity that is accredited by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/Prosthetist Certification, or accredited and approved by a program that the Secretary determines has accreditation and approval standards that are essentially equivalent to those of such Board.
(G) Replacement of prosthetic devices and parts
(i) In general
Payment shall be made for the replacement of prosthetic devices which are artificial limbs, or for the replacement of any part of such devices, without regard to continuous use or useful lifetime restrictions if an ordering physician determines that the provision of a replacement device, or a replacement part of such a device, is necessary because of any of the following:
(I) A change in the physiological condition of the patient.
(II) An irreparable change in the condition of the device, or in a part of the device.
(III) The condition of the device, or the part of the device, requires repairs and the cost of such repairs would be more than 60 percent of the cost of a replacement device, or, as the case may be, of the part being replaced.
(ii) Confirmation may be required if device or part being replaced is less than 3 years old
If a physician determines that a replacement device, or a replacement part, is necessary pursuant to clause (i)—
(I) such determination shall be controlling; and
(II) such replacement device or part shall be deemed to be reasonable and necessary for purposes of
except that if the device, or part, being replaced is less than 3 years old (calculated from the date on which the beneficiary began to use the device or part), the Secretary may also require confirmation of necessity of the replacement device or replacement part, as the case may be.
(H) Application of competitive acquisition to orthotics; limitation of inherent reasonableness authority
In the case of orthotics described in paragraph (2)(C) of
(i) the payment basis under this subsection for such orthotics furnished in such area shall be the payment basis determined under such competitive acquisition program; and
(ii) subject to subsection (a)(1)(G), the Secretary may use information on the payment determined under such competitive acquisition programs to adjust the payment amount otherwise recognized under subparagraph (B)(ii) for an area that is not a competitive acquisition area under
(2) Purchase price recognized
For purposes of paragraph (1), the amount that is recognized under this paragraph as the purchase price for prosthetic devices, orthotics, and prosthetics is the amount described in subparagraph (C) of this paragraph, determined as follows:
(A) Computation of local purchase price
Each carrier under
(i) The carrier shall compute a base local purchase price for each item equal to the average reasonable charge in the locality for the purchase of the item for the 12-month period ending with June 1987.
(ii) The carrier shall compute a local purchase price, with respect to the furnishing of each particular item—
(I) in 1989 and 1990, equal to the base local purchase price computed under clause (i) increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 6-month period ending with December 1987, or
(II) in 1991, 1992 or 1993, equal to the local purchase price computed under this clause for the previous year increased by the applicable percentage increase for the year.
(B) Computation of regional purchase price
With respect to the furnishing of a particular item in each region (as defined by the Secretary), the Secretary shall compute a regional purchase price—
(i) for 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local purchase prices for the carriers in the region computed under subparagraph (A)(ii)(II) for the year, and
(ii) for each subsequent year, equal to the regional purchase price computed under this subparagraph for the previous year increased by the applicable percentage increase for the year.
(C) Purchase price recognized
For purposes of paragraph (1) and subject to subparagraph (D), the amount that is recognized under this paragraph as the purchase price for each item furnished—
(i) in 1989, 1990, or 1991, is 100 percent of the local purchase price computed under subparagraph (A)(ii);
(ii) in 1992, is the sum of (I) 75 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1992, and (II) 25 percent of the regional purchase price computed under subparagraph (B) for 1992;
(iii) in 1993, is the sum of (I) 50 percent of the local purchase price computed under subparagraph (A)(ii)(II) for 1993, and (II) 50 percent of the regional purchase price computed under subparagraph (B) for 1993; and
(iv) in 1994 or a subsequent year, is the regional purchase price computed under subparagraph (B) for that year.
(D) Range on amount recognized
The amount that is recognized under subparagraph (C) as the purchase price for an item furnished—
(i) in 1992, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year; and
(ii) in a subsequent year, may not exceed 120 percent, and may not be lower than 90 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year.
(3) Applicability of certain provisions relating to durable medical equipment
Paragraphs (12), (15), and (17) and subparagraphs (A) and (B) of paragraph (10) and paragraph (11) of subsection (a) shall apply to prosthetic devices, orthotics, and prosthetics in the same manner as such provisions apply to covered items under such subsection.
(4) Definitions
In this subsection—
(A) the term "applicable percentage increase" means—
(i) for 1991, 0 percent;
(ii) for 1992 and 1993, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year;
(iii) for 1994 and 1995, 0 percent;
(iv) for 1996 and 1997, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year;
(v) for each of the years 1998 through 2000, 1 percent;
(vi) for 2001, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June 2000;
(vii) for 2002, 1 percent;
(viii) for 2003, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year;
(ix) for 2004, 2005, and 2006, 0 percent;
(x) for for 4 each of 2007 through 2010, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and
(xi) for 2011 and each subsequent year—
(I) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by—
(II) the productivity adjustment described in
The application of subparagraph (A)(xi)(II) may result in the applicable percentage increase under subparagraph (A) being less than 0.0 for a year, and may result in payment rates under this subsection for a year being less than such payment rates for the preceding year.
(B) the term "prosthetic devices" has the meaning given such term in
(C) the term "orthotics and prosthetics" has the meaning given such term in
(5) Documentation created by orthotists and prosthetists
For purposes of determining the reasonableness and medical necessity of orthotics and prosthetics, documentation created by an orthotist or prosthetist shall be considered part of the individual's medical record to support documentation created by eligible professionals described in
(i) Payment for surgical dressings
(1) In general
Payment under this subsection for surgical dressings (described in
(A) the actual charge for the item; or
(B) a payment amount determined in accordance with the methodology described in subparagraphs (B) and (C) of subsection (a)(2) (except that in applying such methodology, the national limited payment amount referred to in such subparagraphs shall be initially computed based on local payment amounts using average reasonable charges for the 12-month period ending December 31, 1992, increased by the covered item updates described in such subsection for 1993 and 1994).
(2) Exceptions
Paragraph (1) shall not apply to surgical dressings that are—
(A) furnished as an incident to a physician's professional service; or
(B) furnished by a home health agency.
(j) Requirements for suppliers of medical equipment and supplies
(1) Issuance and renewal of supplier number
(A) Payment
Except as provided in subparagraph (C), no payment may be made under this part after October 31, 1994, for items furnished by a supplier of medical equipment and supplies unless such supplier obtains (and renews at such intervals as the Secretary may require) a supplier number.
(B) Standards for possessing a supplier number
A supplier may not obtain a supplier number unless—
(i) for medical equipment and supplies furnished on or after October 31, 1994, and before January 1, 1996, the supplier meets standards prescribed by the Secretary in regulations issued on June 18, 1992; and
(ii) for medical equipment and supplies furnished on or after January 1, 1996, the supplier meets revised standards prescribed by the Secretary (in consultation with representatives of suppliers of medical equipment and supplies, carriers, and consumers) that shall include requirements that the supplier—
(I) comply with all applicable State and Federal licensure and regulatory requirements;
(II) maintain a physical facility on an appropriate site;
(III) have proof of appropriate liability insurance; and
(IV) meet such other requirements as the Secretary may specify.
(C) Exception for items furnished as incident to a physician's service
Subparagraph (A) shall not apply with respect to medical equipment and supplies furnished incident to a physician's service.
(D) Prohibition against multiple supplier numbers
The Secretary may not issue more than one supplier number to any supplier of medical equipment and supplies unless the issuance of more than one number is appropriate to identify subsidiary or regional entities under the supplier's ownership or control.
(E) Prohibition against delegation of supplier determinations
The Secretary may not delegate (other than by contract under
(2) Certificates of medical necessity
(A) Limitation on information provided by suppliers on certificates of medical necessity
(i) In general
Effective 60 days after October 31, 1994, a supplier of medical equipment and supplies may distribute to physicians, or to individuals entitled to benefits under this part, a certificate of medical necessity for commercial purposes which contains no more than the following information completed by the supplier:
(I) An identification of the supplier and the beneficiary to whom such medical equipment and supplies are furnished.
(II) A description of such medical equipment and supplies.
(III) Any product code identifying such medical equipment and supplies.
(IV) Any other administrative information (other than information relating to the beneficiary's medical condition) identified by the Secretary.
(ii) Information on payment amount and charges
If a supplier distributes a certificate of medical necessity containing any of the information permitted to be supplied under clause (i), the supplier shall also list on the certificate of medical necessity the fee schedule amount and the supplier's charge for the medical equipment or supplies being furnished prior to distribution of such certificate to the physician.
(iii) Penalty
Any supplier of medical equipment and supplies who knowingly and willfully distributes a certificate of medical necessity in violation of clause (i) or fails to provide the information required under clause (ii) is subject to a civil money penalty in an amount not to exceed $1,000 for each such certificate of medical necessity so distributed. The provisions of
(B) "Certificate of medical necessity" defined
For purposes of this paragraph, the term "certificate of medical necessity" means a form or other document containing information required by the carrier to be submitted to show that an item is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.
(3) Coverage and review criteria
The Secretary shall annually review the coverage and utilization of items of medical equipment and supplies to determine whether such items should be made subject to coverage and utilization review criteria, and if appropriate, shall develop and apply such criteria to such items.
(4) Limitation on patient liability
If a supplier of medical equipment and supplies (as defined in paragraph (5))—
(A) furnishes an item or service to a beneficiary for which no payment may be made by reason of paragraph (1);
(B) furnishes an item or service to a beneficiary for which payment is denied in advance under subsection (a)(15); or
(C) furnishes an item or service to a beneficiary for which payment is denied under
any expenses incurred for items and services furnished to an individual by such a supplier not on an assigned basis shall be the responsibility of such supplier. The individual shall have no financial responsibility for such expenses and the supplier shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected from the individual for such items or services. The provisions of subsection (a)(18) shall apply to refunds required under the previous sentence in the same manner as such provisions apply to refunds under such subsection.
(5) "Medical equipment and supplies" defined
The term "medical equipment and supplies" means—
(A) durable medical equipment (as defined in
(B) prosthetic devices (as described in
(C) orthotics and prosthetics (as described in
(D) surgical dressings (as described in
(E) items and services related to the administration of intravenous immune globulin furnished on or after January 1, 2024, as described in
(F) lymphedema compression treatment items (as defined in
(G) 5 such other items as the Secretary may determine; and
(G) 5 for purposes of paragraphs (1) and (3)—
(i) home dialysis supplies and equipment (as described in
(ii) immunosuppressive drugs (as described in
(iii) therapeutic shoes for diabetics (as described in
(iv) oral drugs prescribed for use as an anticancer therapeutic agent (as described in
(v) self-administered erythropoetin (as described in
(k) Payment for outpatient therapy services and comprehensive outpatient rehabilitation services
(1) In general
With respect to services described in
(A) for services furnished during 1998, the amount determined under paragraph (2); or
(B) for services furnished during a subsequent year, 80 percent of the lesser of—
(i) the actual charge for the services, or
(ii) the applicable fee schedule amount (as defined in paragraph (3)) for the services.
(2) Payment in 1998 based upon adjusted reasonable costs
The amount under this paragraph for services is the lesser of—
(A) the charges imposed for the services, or
(B) the adjusted reasonable costs (as defined in paragraph (4)) for the services,
less 20 percent of the amount of the charges imposed for such services.
(3) Applicable fee schedule amount
In this subsection, the term "applicable fee schedule amount" means, with respect to services furnished in a year, the amount determined under the fee schedule established under
(4) Adjusted reasonable costs
In paragraph (2), the term "adjusted reasonable costs" means, with respect to any services, reasonable costs determined for such services, reduced by 10 percent. The 10-percent reduction shall not apply to services described in
(5) Uniform coding
For claims for services submitted on or after April 1, 1998, for which the amount of payment is determined under this subsection, the claim shall include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished.
(6) Restraint on billing
The provisions of subparagraphs (A) and (B) of
(7) Adjustment in discount for certain multiple therapy services
In the case of therapy services furnished on or after April 1, 2013, and for which payment is made under this subsection pursuant to the applicable fee schedule amount (as defined in paragraph (3)), instead of the 25 percent multiple procedure payment reduction specified in the final rule published by the Secretary in the Federal Register on November 29, 2010, the reduction percentage shall be 50 percent.
(l) Establishment of fee schedule for ambulance services
(1) In general
The Secretary shall establish a fee schedule for payment for ambulance services whether provided directly by a supplier or provider or under arrangement with a provider under this part through a negotiated rulemaking process described in title 5 and in accordance with the requirements of this subsection.
(2) Considerations
In establishing such fee schedule, the Secretary shall—
(A) establish mechanisms to control increases in expenditures for ambulance services under this part;
(B) establish definitions for ambulance services which link payments to the type of services provided;
(C) consider appropriate regional and operational differences;
(D) consider adjustments to payment rates to account for inflation and other relevant factors; and
(E) phase in the application of the payment rates under the fee schedule in an efficient and fair manner consistent with paragraph (11), except that such phase-in shall provide for full payment of any national mileage rate for ambulance services provided by suppliers that are paid by carriers in any of the 50 States where payment by a carrier for such services for all such suppliers in such State did not, prior to the implementation of the fee schedule, include a separate amount for all mileage within the county from which the beneficiary is transported.
(3) Savings
In establishing such fee schedule, the Secretary shall—
(A) ensure that the aggregate amount of payments made for ambulance services under this part during 2000 does not exceed the aggregate amount of payments which would have been made for such services under this part during such year if the amendments made by section 4531(a) of the Balanced Budget Act of 1997 continued in effect, except that in making such determination the Secretary shall assume an update in such payments for 2002 equal to percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year reduced in the case of 2002 by 1.0 percentage points;
(B) set the payment amounts provided under the fee schedule for services furnished in 2001 and each subsequent year at amounts equal to the payment amounts under the fee schedule for services furnished during the previous year, increased, subject to subparagraph (C) and the succeeding sentence of this paragraph, by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year reduced in the case of 2002 by 1.0 percentage points; and
(C) for 2011 and each subsequent year, after determining the percentage increase under subparagraph (B) for the year, reduce such percentage increase by the productivity adjustment described in
The application of subparagraph (C) may result in the percentage increase under subparagraph (B) being less than 0.0 for a year, and may result in payment rates under the fee schedule under this subsection for a year being less than such payment rates for the preceding year.
(4) Consultation
In establishing the fee schedule for ambulance services under this subsection, the Secretary shall consult with various national organizations representing individuals and entities who furnish and regulate ambulance services and share with such organizations relevant data in establishing such schedule.
(5) Limitation on review
There shall be no administrative or judicial review under
(6) Restraint on billing
The provisions of subparagraphs (A) and (B) of
(7) Coding system
The Secretary may require the claim for any services for which the amount of payment is determined under this subsection to include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished.
(8) Services furnished by critical access hospitals
Notwithstanding any other provision of this subsection, the Secretary shall pay 101 percent of the reasonable costs incurred in furnishing ambulance services if such services are furnished—
(A) by a critical access hospital (as defined in
(B) by an entity that is owned and operated by a critical access hospital,
but only if the critical access hospital or entity is the only provider or supplier of ambulance services that is located within a 35-mile drive of such critical access hospital.
(9) Transitional assistance for rural providers
In the case of ground ambulance services furnished on or after July 1, 2001, and before January 1, 2004, for which the transportation originates in a rural area (as defined in
(10) Phase-in providing floor using blend of fee schedule and regional fee schedules
In carrying out the phase-in under paragraph (2)(E) for each level of ground service furnished in a year, the portion of the payment amount that is based on the fee schedule shall be the greater of the amount determined under such fee schedule (without regard to this paragraph) or the following blended rate of the fee schedule under paragraph (1) and of a regional fee schedule for the region involved:
(A) For 2004 (for services furnished on or after July 1, 2004), the blended rate shall be based 20 percent on the fee schedule under paragraph (1) and 80 percent on the regional fee schedule.
(B) For 2005, the blended rate shall be based 40 percent on the fee schedule under paragraph (1) and 60 percent on the regional fee schedule.
(C) For 2006, the blended rate shall be based 60 percent on the fee schedule under paragraph (1) and 40 percent on the regional fee schedule.
(D) For 2007, 2008, and 2009, the blended rate shall be based 80 percent on the fee schedule under paragraph (1) and 20 percent on the regional fee schedule.
(E) For 2010 and each succeeding year, the blended rate shall be based 100 percent on the fee schedule under paragraph (1).
For purposes of this paragraph, the Secretary shall establish a regional fee schedule for each of the nine census divisions (referred to in
(11) Adjustment in payment for certain long trips
In the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2009, regardless of where the transportation originates, the fee schedule established under this subsection shall provide that, with respect to the payment rate for mileage for a trip above 50 miles the per mile rate otherwise established shall be increased by ¼ of the payment per mile otherwise applicable to miles in excess of 50 miles in such trip.
(12) Assistance for rural providers furnishing services in low population density areas
(A) In general
In the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2025, for which the transportation originates in a qualified rural area (identified under subparagraph (B)(iii)), the Secretary shall provide for a percent increase in the base rate of the fee schedule for a trip established under this subsection. In establishing such percent increase, the Secretary shall estimate the average cost per trip for such services (not taking into account mileage) in the lowest quartile as compared to the average cost per trip for such services (not taking into account mileage) in the highest quartile of all rural county populations.
(B) Identification of qualified rural areas
(i) Determination of population density in area
Based upon data from the United States decennial census for the year 2000, the Secretary shall determine, for each rural area, the population density for that area.
(ii) Ranking of areas
The Secretary shall rank each such area based on such population density.
(iii) Identification of qualified rural areas
The Secretary shall identify those areas (in subparagraph (A) referred to as "qualified rural areas") with the lowest population densities that represent, if each such area were weighted by the population of such area (as used in computing such population densities), an aggregate total of 25 percent of the total of the population of all such areas.
(iv) Rural area
For purposes of this paragraph, the term "rural area" has the meaning given such term in
(v) Judicial review
There shall be no administrative or judicial review under
(13) Temporary increase for ground ambulance services
(A) In general
After computing the rates with respect to ground ambulance services under the other applicable provisions of this subsection, in the case of such services furnished on or after July 1, 2004, and before January 1, 2007, and for such services furnished on or after July 1, 2008, and before January 1, 2025,,4 for which the transportation originates in—
(i) a rural area described in paragraph (9) or in a rural census tract described in such paragraph, the fee schedule established under this section shall provide that the rate for the service otherwise established, after the application of any increase under paragraphs (11) and (12), shall be increased by 2 percent (or 3 percent if such service is furnished on or after July 1, 2008, and before January 1, 2025); and
(ii) an area not described in clause (i), the fee schedule established under this subsection shall provide that the rate for the service otherwise established, after the application of any increase under paragraph (11), shall be increased by 1 percent (or 2 percent if such service is furnished on or after July 1, 2008, and before January 1, 2025).
(B) Application of increased payments after applicable period
The increased payments under subparagraph (A) shall not be taken into account in calculating payments for services furnished after the applicable period specified in such subparagraph.
(14) Providing appropriate coverage of rural air ambulance services
(A) In general
The regulations described in
(i) is reasonable and necessary based on the health condition of the individual being transported at or immediately prior to the time of the transport; and
(ii) complies with equipment and crew requirements established by the Secretary.
(B) Satisfaction of requirement of medically necessary
The requirement of subparagraph (A)(i) is deemed to be met for a rural air ambulance service if—
(i) subject to subparagraph (D), such service is requested by a physician or other qualified medical personnel (as specified by the Secretary) who certifies or reasonably determines that the individual's condition is such that the time needed to transport the individual by land or the instability of transportation by land poses a threat to the individual's survival or seriously endangers the individual's health; or
(ii) such service is furnished pursuant to a protocol that is established by a State or regional emergency medical service (EMS) agency and recognized or approved by the Secretary under which the use of an air ambulance is recommended, if such agency does not have an ownership interest in the entity furnishing such service.
(C) Rural air ambulance service defined
For purposes of this paragraph, the term "rural air ambulance service" means fixed wing and rotary wing air ambulance service in which the point of pick up of the individual occurs in a rural area (as defined in
(D) Limitation
(i) In general
Subparagraph (B)(i) shall not apply if there is a financial or employment relationship between the person requesting the rural air ambulance service and the entity furnishing the ambulance service, or an entity under common ownership with the entity furnishing the air ambulance service, or a financial relationship between an immediate family member of such requester and such an entity.
(ii) Exception
Where a hospital and the entity furnishing rural air ambulance services are under common ownership, clause (i) shall not apply to remuneration (through employment or other relationship) by the hospital of the requester or immediate family member if the remuneration is for provider-based physician services furnished in a hospital (as described in
(15) Payment adjustment for non-emergency ambulance transports for ESRD beneficiaries
The fee schedule amount otherwise applicable under the preceding provisions of this subsection shall be reduced by 10 percent for ambulance services furnished during the period beginning on October 1, 2013, and ending on September 30, 2018, and by 23 percent for such services furnished on or after October 1, 2018, consisting of non-emergency basic life support services involving transport of an individual with end-stage renal disease for renal dialysis services (as described in
(16) Prior authorization for repetitive scheduled non-emergent ambulance transports
(A) In general
Beginning January 1, 2017, if the expansion to all States of the model of prior authorization described in paragraph (2) of section 515(a) of the Medicare Access and CHIP Reauthorization Act of 2015 meets the requirements described in paragraphs (1) through (3) of
(B) Funding
The Secretary shall use funds made available under
(C) Clarification regarding budget neutrality
Nothing in this paragraph may be construed to limit or modify the application of
(17) Submission of cost and other information
(A) Development of data collection system
The Secretary shall develop a data collection system (which may include use of a cost survey) to collect cost, revenue, utilization, and other information determined appropriate by the Secretary with respect to providers of services (in this paragraph referred to as "providers") and suppliers of ground ambulance services. Such system shall be designed to collect information—
(i) needed to evaluate the extent to which reported costs relate to payment rates under this subsection;
(ii) on the utilization of capital equipment and ambulance capacity, including information consistent with the type of information described in
(iii) on different types of ground ambulance services furnished in different geographic locations, including rural areas and low population density areas described in paragraph (12).
(B) Specification of data collection system
(i) In general
The Secretary shall—
(I) not later than December 31, 2019, specify the data collection system under subparagraph (A); and
(II) identify the providers and suppliers of ground ambulance services that would be required to submit information under such data collection system, including the representative sample described in clause (ii).
(ii) Determination of representative sample
(I) In general
Not later than December 31, 2019, with respect to the data collection for the first year under such system, and for each subsequent year through 2024, the Secretary shall determine a representative sample to submit information under the data collection system.
(II) Requirements
The sample under subclause (I) shall be representative of the different types of providers and suppliers of ground ambulance services (such as those providers and suppliers that are part of an emergency service or part of a government organization) and the geographic locations in which ground ambulance services are furnished (such as urban, rural, and low population density areas).
(III) Limitation
The Secretary shall not include an individual provider or supplier of ground ambulance services in the sample under subclause (I) in 2 consecutive years, to the extent practicable.
(C) Reporting of cost information
For each year, a provider or supplier of ground ambulance services identified by the Secretary under subparagraph (B)(i)(II) as being required to submit information under the data collection system with respect to a period for the year shall submit to the Secretary information specified under the system. Such information shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(D) Payment reduction for failure to report
(i) In general
Beginning January 1, 2022, subject to clause (ii), a 10 percent reduction to payments under this subsection shall be made for the applicable period (as defined in clause (ii)) to a provider or supplier of ground ambulance services that—
(I) is required to submit information under the data collection system with respect to a period under subparagraph (C); and
(II) does not sufficiently submit such information, as determined by the Secretary.
(ii) Applicable period defined
For purposes of clause (i), the term "applicable period" means, with respect to a provider or supplier of ground ambulance services, a year specified by the Secretary not more than 2 years after the end of the period with respect to which the Secretary has made a determination under clause (i)(II) that the provider or supplier of ground ambulance services failed to sufficiently submit information under the data collection system.
(iii) Hardship exemption
The Secretary may exempt a provider or supplier from the payment reduction under clause (i) with respect to an applicable period in the event of significant hardship, such as a natural disaster, bankruptcy, or other similar situation that the Secretary determines interfered with the ability of the provider or supplier of ground ambulance services to submit such information in a timely manner for the specified period.
(iv) Informal review
The Secretary shall establish a process under which a provider or supplier of ground ambulance services may seek an informal review of a determination that the provider or supplier is subject to the payment reduction under clause (i).
(E) Ongoing data collection
(i) Revision of data collection system
The Secretary may, as the Secretary determines appropriate and, if available, taking into consideration the report (or reports) under subparagraph (F), revise the data collection system under subparagraph (A).
(ii) Subsequent data collection
In order to continue to evaluate the extent to which reported costs relate to payment rates under this subsection and for other purposes the Secretary deems appropriate, the Secretary shall require providers and suppliers of ground ambulance services to submit information for years after 2024 as the Secretary determines appropriate, but in no case less often than once every 3 years.
(F) Ground ambulance data collection system study
(i) In general
Not later than the second June 15th following the date on which the Secretary transmits data for the first representative sample of providers and suppliers of ground ambulance services to the Medicare Payment Advisory Commission, and as determined necessary by such Commission thereafter,,4 such Commission shall assess, and submit to Congress a report on, information submitted by providers and suppliers of ground ambulance services through the data collection system under subparagraph (A), the adequacy of payments for ground ambulance services under this subsection, and geographic variations in the cost of furnishing such services.
(ii) Contents
A report under clause (i) shall contain the following:
(I) An analysis of information submitted through the data collection system.
(II) An analysis of any burden on providers and suppliers of ground ambulance services associated with the data collection system.
(III) A recommendation as to whether information should continue to be submitted through such data collection system or if such system should be revised under subparagraph (E)(i).
(IV) Other information determined appropriate by the Commission.
(G) Public availability
The Secretary shall post information on the results of the data collection under this paragraph on the Internet website of the Centers for Medicare & Medicaid Services, as determined appropriate by the Secretary.
(H) Implementation
The Secretary shall implement this paragraph through notice and comment rulemaking.
(I) Administration
(J) Limitations on review
There shall be no administrative or judicial review under
(K) Funding for implementation
For purposes of carrying out subparagraph (A), the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(m) Payment for telehealth services
(1) In general
Subject to paragraphs (8) and (9), the Secretary shall pay for telehealth services that are furnished via a telecommunications system by a physician (as defined in
(2) Payment amount
(A) Distant site
Subject to paragraph (8), the Secretary shall pay to a physician or practitioner located at a distant site that furnishes a telehealth service to an eligible telehealth individual an amount equal to the amount that such physician or practitioner would have been paid under this subchapter had such service been furnished without the use of a telecommunications system.
(B) Facility fee for originating site
(i) In general
Subject to clauses (ii) and (iii) and paragraph (6)(C), with respect to a telehealth service, subject to
(I) for the period beginning on October 1, 2001, and ending on December 31, 2001, and for 2002, $20; and
(II) for a subsequent year, the facility fee specified in subclause (I) or this subclause for the preceding year increased by the percentage increase in the MEI (as defined in
(ii) No facility fee if originating site is the home
No facility fee shall be paid under this subparagraph to an originating site described in paragraph (4)(C)(ii)(X).
(iii) No facility fee for new sites
In the case that the emergency period described in
(C) Telepresenter not required
Nothing in this subsection shall be construed as requiring an eligible telehealth individual to be presented by a physician or practitioner at the originating site for the furnishing of a service via a telecommunications system, unless it is medically necessary (as determined by the physician or practitioner at the distant site).
(3) Limitation on beneficiary charges
(A) Physician and practitioner
The provisions of
(B) Originating site
The provisions of
(4) Definitions
For purposes of this subsection:
(A) Distant site
Subject to paragraph (8), the term "distant site" means the site at which the physician or practitioner is located at the time the service is provided via a telecommunications system.
(B) Eligible telehealth individual
The term "eligible telehealth individual" means an individual enrolled under this part who receives a telehealth service furnished at an originating site.
(C) Originating site
(i) In general
Except as provided in clause (iii) and paragraphs (5), (6), and (7), the term "originating site" means only those sites described in clause (ii) at which the eligible telehealth individual is located at the time the service is furnished via a telecommunications system and only if such site is located—
(I) in an area that is designated as a rural health professional shortage area under
(II) in a county that is not included in a Metropolitan Statistical Area; or
(III) from an entity that participates in a Federal telemedicine demonstration project that has been approved by (or receives funding from) the Secretary of Health and Human Services as of December 31, 2000.
(ii) Sites described
The sites referred to in clause (i) are the following sites:
(I) The office of a physician or practitioner.
(II) A critical access hospital (as defined in
(III) A rural health clinic (as defined in
(IV) A Federally qualified health center (as defined in
(V) A hospital (as defined in
(VI) A hospital-based or critical access hospital-based renal dialysis center (including satellites).
(VII) A skilled nursing facility (as defined in
(VIII) A community mental health center (as defined in
(IX) A renal dialysis facility, but only for purposes of
(X) The home of an individual, but only for purposes of
(XI) A rural emergency hospital (as defined in
(iii) Expanding access to telehealth services
In the case that the emergency period described in
(D) Physician
The term "physician" has the meaning given that term in
(E) Practitioner
The term "practitioner" has the meaning given that term in
(F) Telehealth service
(i) In general
Subject to paragraph (8), the term "telehealth service" means professional consultations, office visits, and office psychiatry services (identified as of July 1, 2000, by HCPCS codes 99241–99275, 99201–99215, 90804–90809, and 90862 (and as subsequently modified by the Secretary)), and any additional service specified by the Secretary.
(ii) Yearly update
The Secretary shall establish a process that provides, on an annual basis, for the addition or deletion of services (and HCPCS codes), as appropriate, to those specified in clause (i) for authorized payment under paragraph (1).
(5) Treatment of home dialysis monthly ESRD-related visit
The geographic requirements described in paragraph (4)(C)(i) shall not apply with respect to telehealth services furnished on or after January 1, 2019, for purposes of
(6) Treatment of stroke telehealth services
(A) Non-application of originating site requirements
The requirements described in paragraph (4)(C) shall not apply with respect to telehealth services furnished on or after January 1, 2019, for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke, as determined by the Secretary.
(B) Inclusion of certain sites
With respect to telehealth services described in subparagraph (A), the term "originating site" shall include any hospital (as defined in
(C) No originating site facility fee for new sites
No facility fee shall be paid under paragraph (2)(B) to an originating site with respect to a telehealth service described in subparagraph (A) if the originating site does not otherwise meet the requirements for an originating site under paragraph (4)(C).
(7) Treatment of substance use disorder services and mental health services furnished through telehealth
(A) In general
The geographic requirements described in paragraph (4)(C)(i) shall not apply with respect to telehealth services furnished on or after July 1, 2019, to an eligible telehealth individual with a substance use disorder diagnosis for purposes of treatment of such disorder or co-occurring mental health disorder, as determined by the Secretary, or, on or after the first day after the end of the emergency period described in
(B) Requirements for mental health services furnished through telehealth
(i) In general
Payment may not be made under this paragraph for telehealth services furnished on or after January 1, 2025 (or, if later, the first day after the end of the emergency period described in
(I) within the 6-month period prior to the first time such physician or practitioner furnishes such a telehealth service to the eligible telehealth individual; and
(II) during subsequent periods in which such physician or practitioner furnishes such telehealth services to the eligible telehealth individual, at such times as the Secretary determines appropriate.
(ii) Clarification
This subparagraph shall not apply if payment would otherwise be allowed—
(I) under this paragraph (with respect to telehealth services furnished to an eligible telehealth individual with a substance use disorder diagnosis for purposes of treatment of such disorder or co-occurring mental health disorder); or
(II) under this subsection without application of this paragraph.
(8) Enhancing telehealth services for Federally qualified health centers and rural health clinics
(A) In general
During the emergency period described in
(i) the Secretary shall pay for telehealth services that are furnished via a telecommunications system by a Federally qualified health center or a rural health clinic to an eligible telehealth individual enrolled under this part notwithstanding that the Federally qualified health center or rural clinic providing the telehealth service is not at the same location as the beneficiary;
(ii) the amount of payment to a Federally qualified health center or rural health clinic that serves as a distant site for such a telehealth service shall be determined under subparagraph (B); and
(iii) for purposes of this subsection—
(I) the term "distant site" includes a Federally qualified health center or rural health clinic that furnishes a telehealth service to an eligible telehealth individual; and
(II) the term "telehealth services" includes a rural health clinic service or Federally qualified health center service that is furnished using telehealth to the extent that payment codes corresponding to services identified by the Secretary under clause (i) or (ii) of paragraph (4)(F) are listed on the corresponding claim for such rural health clinic service or Federally qualified health center service.
(B) Special payment rule
(i) In general
The Secretary shall develop and implement payment methods that apply under this subsection to a Federally qualified health center or rural health clinic that serves as a distant site that furnishes a telehealth service to an eligible telehealth individual during the periods for which subparagraph (A) applies. Such payment methods shall be based on payment rates that are similar to the national average payment rates for comparable telehealth services under the physician fee schedule under
(ii) Exclusion from FQHC PPS calculation and RHC air calculation
Costs associated with telehealth services shall not be used to determine the amount of payment for Federally qualified health center services under the prospective payment system under subsection (o) or for rural health clinic services under the methodology for all-inclusive rates (established by the Secretary) under
(9) Treatment of telehealth services furnished using audio-only telecommunications technology
In the case that the emergency period described in
(n) Authority to modify or eliminate coverage of certain preventive services
Notwithstanding any other provision of this subchapter, effective beginning on January 1, 2010, if the Secretary determines appropriate, the Secretary may—
(1) modify—
(A) the coverage of any preventive service described in subparagraph (A) of
(B) the services included in the initial preventive physical examination described in subparagraph (B) of such section; and
(2) provide that no payment shall be made under this subchapter for a preventive service described in subparagraph (A) of such section that has not received a grade of A, B, C, or I by such Task Force.
(o) Development and implementation of prospective payment system
(1) Development
(A) In general
The Secretary shall develop a prospective payment system for payment for Federally qualified health center services furnished by Federally qualified health centers under this subchapter. Such system shall include a process for appropriately describing the services furnished by Federally qualified health centers and shall establish payment rates for specific payment codes based on such appropriate descriptions of services. Such system shall be established to take into account the type, intensity, and duration of services furnished by Federally qualified health centers. Such system may include adjustments, including geographic adjustments, determined appropriate by the Secretary.
(B) Collection of data and evaluation
By not later than January 1, 2011, the Secretary shall require Federally qualified health centers to submit to the Secretary such information as the Secretary may require in order to develop and implement the prospective payment system under this subsection, including the reporting of services using HCPCS codes.
(2) Implementation
(A) In general
Notwithstanding
(B) Payments
(i) Initial payments
The Secretary shall implement such prospective payment system so that the estimated aggregate amount of prospective payment rates (determined prior to the application of
(ii) Payments in subsequent years
Payment rates in years after the year of implementation of such system shall be the payment rates in the previous year increased—
(I) in the first year after implementation of such system, by the percentage increase in the MEI (as defined in
(II) in subsequent years, by the percentage increase in a market basket of Federally qualified health center goods and services as promulgated through regulations, or if such an index is not available, by the percentage increase in the MEI (as defined in
(C) Preparation for PPS implementation
Notwithstanding any other provision of law, the Secretary may establish and implement by program instruction or otherwise the payment codes to be used under the prospective payment system under this section.
(3) Additional payments for certain FQHCS with physicians or other practitioners receiving data 2000 waivers
(A) In general
In the case of a Federally qualified health center with respect to which, beginning on or after January 1, 2019, Federally qualified health center services (as defined in
(B) Application
In order to receive a payment described in subparagraph (A), a Federally qualified health center shall submit to the Secretary an application for such a payment at such time, in such manner, and containing such information as specified by the Secretary. A Federally qualified health center may apply for such a payment for each physician or practitioner described in subparagraph (A) furnishing services described in such subparagraph at such center.
(C) Requirements
For purposes of subparagraph (A), the requirements described in this subparagraph, with respect to a physician or practitioner, are the following:
(i) The physician or practitioner is employed by or working under contract with a Federally qualified health center described in subparagraph (A) that submits an application under subparagraph (B).
(ii) The physician or practitioner first begins prescribing narcotic drugs in schedule III, IV, or V of
(D) Funding
For purposes of making payments under this paragraph, there are appropriated, out of amounts in the Treasury not otherwise appropriated, $6,000,000, which shall remain available until expended.
(4) Payment for certain services furnished by federally qualified health centers
(A) Attending physician services for hospice patients
In the case of services described in
(B) Mental health visits furnished via telecommunications technology
In the case of mental health visits furnished via interactive, real-time, audio and video telecommunications technology or audio-only interactions, the in-person mental health visit requirements established under section 405.2463(b)(3) of title 42 of the Code of Federal Regulations (or a successor regulation) shall not apply prior to January 1, 2025 (or, if later, the first day after the end of the emergency period described in
(5) Special payment rule for intensive outpatient services
(A) In general
In the case of intensive outpatient services furnished by a Federally qualified health center, the payment amount for such services shall be equal to the amount that would have been paid under this subchapter for such services had such services been covered OPD services furnished by a hospital.
(B) Exclusion
Costs associated with intensive outpatient services shall not be used to determine the amount of payment for Federally qualified health center services under the prospective payment system under this subsection.
(p) Quality incentives to promote patient safety and public health in computed tomography
(1) Quality incentives
In the case of an applicable computed tomography service (as defined in paragraph (2)) for which payment is made under an applicable payment system (as defined in paragraph (3)) and that is furnished on or after January 1, 2016, using equipment that is not consistent with the CT equipment standard (described in paragraph (4)), the payment amount for such service shall be reduced by the applicable percentage (as defined in paragraph (5)).
(2) Applicable computed tomography services defined
In this subsection, the term "applicable computed tomography service" means a service billed using diagnostic radiological imaging codes for computed tomography (identified as of January 1, 2014, by HCPCS codes 70450–70498, 71250–71275, 72125–72133, 72191–72194, 73200–73206, 73700–73706, 74150–74178, 74261–74263, and 75571–75574 (and any succeeding codes).6
(3) Applicable payment system defined
In this subsection, the term "applicable payment system" means the following:
(A) The technical component and the technical component of the global fee under the fee schedule established under
(B) The prospective payment system for hospital outpatient department services under
(4) Consistency with CT equipment standard
In this subsection, the term "not consistent with the CT equipment standard" means, with respect to an applicable computed tomography service, that the service was furnished using equipment that does not meet each of the attributes of the National Electrical Manufacturers Association (NEMA) Standard XR–29–2013, entitled "Standard Attributes on CT Equipment Related to Dose Optimization and Management". Through rulemaking, the Secretary may apply successor standards.
(5) Applicable percentage defined
In this subsection, the term "applicable percentage" means—
(A) for 2016, 5 percent; and
(B) for 2017 and subsequent years, 15 percent.
(6) Implementation
(A) Information
The Secretary shall require that information be provided and attested to by a supplier and a hospital outpatient department that indicates whether an applicable computed tomography service was furnished that was not consistent with the CT equipment standard (described in paragraph (4)). Such information may be included on a claim and may be a modifier. Such information shall be verified, as appropriate, as part of the periodic accreditation of suppliers under subsection (e) and hospitals under
(B) Administration
(q) Recognizing appropriate use criteria for certain imaging services
(1) Program established
(A) In general
The Secretary shall establish a program to promote the use of appropriate use criteria (as defined in subparagraph (B)) for applicable imaging services (as defined in subparagraph (C)) furnished in an applicable setting (as defined in subparagraph (D)) by ordering professionals and furnishing professionals (as defined in subparagraphs (E) and (F), respectively).
(B) Appropriate use criteria defined
In this subsection, the term "appropriate use criteria" means criteria, only developed or endorsed by national professional medical specialty societies or other provider-led entities, to assist ordering professionals and furnishing professionals in making the most appropriate treatment decision for a specific clinical condition for an individual. To the extent feasible, such criteria shall be evidence-based.
(C) Applicable imaging service defined
In this subsection, the term "applicable imaging service" means an advanced diagnostic imaging service (as defined in subsection (e)(1)(B)) for which the Secretary determines—
(i) one or more applicable appropriate use criteria specified under paragraph (2) apply;
(ii) there are one or more qualified clinical decision support mechanisms listed under paragraph (3)(C); and
(iii) one or more of such mechanisms is available free of charge.
(D) Applicable setting defined
In this subsection, the term "applicable setting" means a physician's office, a hospital outpatient department (including an emergency department), an ambulatory surgical center, and any other provider-led outpatient setting determined appropriate by the Secretary.
(E) Ordering professional defined
In this subsection, the term "ordering professional" means a physician (as defined in
(F) Furnishing professional defined
In this subsection, the term "furnishing professional" means a physician (as defined in
(2) Establishment of applicable appropriate use criteria
(A) In general
Not later than November 15, 2015, the Secretary shall through rulemaking, and in consultation with physicians, practitioners, and other stakeholders, specify applicable appropriate use criteria for applicable imaging services only from among appropriate use criteria developed or endorsed by national professional medical specialty societies or other provider-led entities.
(B) Considerations
In specifying applicable appropriate use criteria under subparagraph (A), the Secretary shall take into account whether the criteria—
(i) have stakeholder consensus;
(ii) are scientifically valid and evidence based; and
(iii) are based on studies that are published and reviewable by stakeholders.
(C) Revisions
The Secretary shall review, on an annual basis, the specified applicable appropriate use criteria to determine if there is a need to update or revise (as appropriate) such specification of applicable appropriate use criteria and make such updates or revisions through rulemaking.
(D) Treatment of multiple applicable appropriate use criteria
In the case where the Secretary determines that more than one appropriate use criterion applies with respect to an applicable imaging service, the Secretary shall apply one or more applicable appropriate use criteria under this paragraph for the service.
(3) Mechanisms for consultation with applicable appropriate use criteria
(A) Identification of mechanisms to consult with applicable appropriate use criteria
(i) In general
The Secretary shall specify qualified clinical decision support mechanisms that could be used by ordering professionals to consult with applicable appropriate use criteria for applicable imaging services.
(ii) Consultation
The Secretary shall consult with physicians, practitioners, health care technology experts, and other stakeholders in specifying mechanisms under this paragraph.
(iii) Inclusion of certain mechanisms
Mechanisms specified under this paragraph may include any or all of the following that meet the requirements described in subparagraph (B)(ii):
(I) Use of clinical decision support modules in certified EHR technology (as defined in
(II) Use of private sector clinical decision support mechanisms that are independent from certified EHR technology, which may include use of clinical decision support mechanisms available from medical specialty organizations.
(III) Use of a clinical decision support mechanism established by the Secretary.
(B) Qualified clinical decision support mechanisms
(i) In general
For purposes of this subsection, a qualified clinical decision support mechanism is a mechanism that the Secretary determines meets the requirements described in clause (ii).
(ii) Requirements
The requirements described in this clause are the following:
(I) The mechanism makes available to the ordering professional applicable appropriate use criteria specified under paragraph (2) and the supporting documentation for the applicable imaging service ordered.
(II) In the case where there is more than one applicable appropriate use criterion specified under such paragraph for an applicable imaging service, the mechanism indicates the criteria that it uses for the service.
(III) The mechanism determines the extent to which an applicable imaging service ordered is consistent with the applicable appropriate use criteria so specified.
(IV) The mechanism generates and provides to the ordering professional a certification or documentation that documents that the qualified clinical decision support mechanism was consulted by the ordering professional.
(V) The mechanism is updated on a timely basis to reflect revisions to the specification of applicable appropriate use criteria under such paragraph.
(VI) The mechanism meets privacy and security standards under applicable provisions of law.
(VII) The mechanism performs such other functions as specified by the Secretary, which may include a requirement to provide aggregate feedback to the ordering professional.
(C) List of mechanisms for consultation with applicable appropriate use criteria
(i) Initial list
Not later than April 1, 2016, the Secretary shall publish a list of mechanisms specified under this paragraph.
(ii) Periodic updating of list
The Secretary shall identify on an annual basis the list of qualified clinical decision support mechanisms specified under this paragraph.
(4) Consultation with applicable appropriate use criteria
(A) Consultation by ordering professional
Beginning with January 1, 2017, subject to subparagraph (C), with respect to an applicable imaging service ordered by an ordering professional that would be furnished in an applicable setting and paid for under an applicable payment system (as defined in subparagraph (D)), an ordering professional shall—
(i) consult with a qualified decision support mechanism listed under paragraph (3)(C); and
(ii) provide to the furnishing professional the information described in clauses (i) through (iii) of subparagraph (B).
(B) Reporting by furnishing professional
Beginning with January 1, 2017, subject to subparagraph (C), with respect to an applicable imaging service furnished in an applicable setting and paid for under an applicable payment system (as defined in subparagraph (D)), payment for such service may only be made if the claim for the service includes the following:
(i) Information about which qualified clinical decision support mechanism was consulted by the ordering professional for the service.
(ii) Information regarding—
(I) whether the service ordered would adhere to the applicable appropriate use criteria specified under paragraph (2);
(II) whether the service ordered would not adhere to such criteria; or
(III) whether such criteria was not applicable to the service ordered.
(iii) The national provider identifier of the ordering professional (if different from the furnishing professional).
(C) Exceptions
The provisions of subparagraphs (A) and (B) and paragraph (6)(A) shall not apply to the following:
(i) Emergency services
An applicable imaging service ordered for an individual with an emergency medical condition (as defined in
(ii) Inpatient services
An applicable imaging service ordered for an inpatient and for which payment is made under part A.
(iii) Significant hardship
An applicable imaging service ordered by an ordering professional who the Secretary may, on a case-by-case basis, exempt from the application of such provisions if the Secretary determines, subject to annual renewal, that consultation with applicable appropriate use criteria would result in a significant hardship, such as in the case of a professional who practices in a rural area without sufficient Internet access.
(D) Applicable payment system defined
In this subsection, the term "applicable payment system" means the following:
(i) The physician fee schedule established under
(ii) The prospective payment system for hospital outpatient department services under
(iii) The ambulatory surgical center payment systems under
(5) Identification of outlier ordering professionals
(A) In general
With respect to applicable imaging services furnished beginning with 2017, the Secretary shall determine, on an annual basis, no more than five percent of the total number of ordering professionals who are outlier ordering professionals.
(B) Outlier ordering professionals
The determination of an outlier ordering professional shall—
(i) be based on low adherence to applicable appropriate use criteria specified under paragraph (2), which may be based on comparison to other ordering professionals; and
(ii) include data for ordering professionals for whom prior authorization under paragraph (6)(A) applies.
(C) Use of two years of data
The Secretary shall use two years of data to identify outlier ordering professionals under this paragraph.
(D) Process
The Secretary shall establish a process for determining when an outlier ordering professional is no longer an outlier ordering professional.
(E) Consultation with stakeholders
The Secretary shall consult with physicians, practitioners and other stakeholders in developing methods to identify outlier ordering professionals under this paragraph.
(6) Prior authorization for ordering professionals who are outliers
(A) In general
Beginning January 1, 2020, subject to paragraph (4)(C), with respect to services furnished during a year, the Secretary shall, for a period determined appropriate by the Secretary, apply prior authorization for applicable imaging services that are ordered by an outlier ordering professional identified under paragraph (5).
(B) Appropriate use criteria in prior authorization
In applying prior authorization under subparagraph (A), the Secretary shall utilize only the applicable appropriate use criteria specified under this subsection.
(C) Funding
For purposes of carrying out this paragraph, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(7) Construction
Nothing in this subsection shall be construed as granting the Secretary the authority to develop or initiate the development of clinical practice guidelines or appropriate use criteria.
(r) Payment for renal dialysis services for individuals with acute kidney injury
(1) Payment rate
In the case of renal dialysis services (as defined in subparagraph (B) of
(2) Individual with acute kidney injury defined
In this subsection, the term "individual with acute kidney injury" means an individual who has acute loss of renal function and does not receive renal dialysis services for which payment is made under
(s) Payment for applicable disposable devices
(1) Separate payment
The Secretary shall make a payment (separate from the payments otherwise made under
(2) Applicable disposable device
In this subsection, the term applicable disposable device means a disposable device that, as determined by the Secretary, is—
(A) a disposable negative pressure wound therapy device that is an integrated system comprised of a non-manual vacuum pump, a receptacle for collecting exudate, and dressings for the purposes of wound therapy; and
(B) a substitute for, and used in lieu of, a negative pressure wound therapy durable medical equipment item that is an integrated system of a negative pressure vacuum pump, a separate exudate collection canister, and dressings that would otherwise be covered for individuals for such wound therapy.
(3) Payment
(A) In general
The separate payment amount established under this paragraph for an applicable disposable device for a year shall be equal to—
(i) for a year before 2024, the amount of the payment that would be made under
(ii) for 2024, the supply price used to determine the relative value for the service under the fee schedule under
(iii) for 2025 and each subsequent year, the payment amount established under this paragraph for such device for the previous year, updated by the specified adjustment described in subparagraph (B) for such year.
(B) Specified adjustment
(i) In general
For purposes of subparagraph (A), the specified adjustment described in this subparagraph for a year is equal to—
(I) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending in June of the previous year; minus
(II) the productivity adjustment described in
(ii) Clarification on application of the productivity adjustment
The application of clause (i)(II) may result in a specified adjustment of less than 0.0 for a year, and may result in the separate payment amount under this subsection for an applicable device for a year being less than such separate payment amount for such device for the preceding year.
(C) Exclusion of nursing and therapy services from separate payment
With respect to applicable devices furnished on or after January 1, 2024, the separate payment amount determined under this paragraph shall not include payment for nursing or therapy services described in
(4) Implementation
As part of submitting claims for the separate payment established under this subsection, beginning with 2024, the Secretary shall accept and process claims submitted using the type of bill that is most commonly used by home health agencies to bill services under a home health plan of care.
(t) Site-of-service price transparency
(1) In general
In order to facilitate price transparency with respect to items and services for which payment may be made either to a hospital outpatient department or to an ambulatory surgical center under this subchapter, the Secretary shall, for 2018 and each year thereafter, make available to the public via a searchable Internet website, with respect to an appropriate number of such items and services—
(A) the estimated payment amount for the item or service under the outpatient department fee schedule under subsection (t) of
(B) the estimated amount of beneficiary liability applicable to the item or service.
(2) Calculation of estimated beneficiary liability
For purposes of paragraph (1)(B), the estimated amount of beneficiary liability, with respect to an item or service, is the amount for such item or service for which an individual who does not have coverage under a Medicare supplemental policy certified under
(3) Implementation
In carrying out this subsection, the Secretary—
(A) shall include in the notice described in
(B) may utilize mechanisms in existence on December 13, 2016, such as the portion of the Internet website of the Centers for Medicare & Medicaid Services on which information comparing physician performance is posted (commonly referred to as the Physician Compare Internet website), to make available such estimated amounts under such paragraph.
(4) Funding
For purposes of implementing this subsection, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(u) Payment and related requirements for home infusion therapy
(1) Payment
(A) Single payment
(i) In general
Subject to clause (iii) and subparagraphs (B) and (C), the Secretary shall implement a payment system under which a single payment is made under this subchapter to a qualified home infusion therapy supplier for items and services described in subparagraphs (A) and (B) of section 1395x(iii)(2)) 7 of this title furnished by a qualified home infusion therapy supplier (as defined in
(ii) Unit of single payment
A unit of single payment under the payment system implemented under this subparagraph is for each infusion drug administration calendar day in the individual's home. The Secretary shall, as appropriate, establish single payment amounts for types of infusion therapy, including to take into account variation in utilization of nursing services by therapy type.
(iii) Limitation
The single payment amount determined under this subparagraph after application of subparagraph (B) and paragraph (3) shall not exceed the amount determined under the fee schedule under
(B) Required adjustments
The Secretary shall adjust the single payment amount determined under subparagraph (A) for home infusion therapy services under
(i) a geographic wage index and other costs that may vary by region; and
(ii) patient acuity and complexity of drug administration.
(C) Discretionary adjustments
(i) In general
Subject to clause (ii), the Secretary may adjust the single payment amount determined under subparagraph (A) (after application of subparagraph (B)) to reflect outlier situations and other factors as the Secretary determines appropriate.
(ii) Requirement of budget neutrality
Any adjustment under this subparagraph shall be made in a budget neutral manner.
(2) Considerations
In developing the payment system under this subsection, the Secretary may consider the costs of furnishing infusion therapy in the home, consult with home infusion therapy suppliers, consider payment amounts for similar items and services under this part and part A, and consider payment amounts established by Medicare Advantage plans under part C and in the private insurance market for home infusion therapy (including average per treatment day payment amounts by type of home infusion therapy).
(3) Annual updates
(A) In general
Subject to subparagraph (B), the Secretary shall update the single payment amount under this subsection from year to year beginning in 2022 by increasing the single payment amount from the prior year by the percentage increase in the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with June of the preceding year.
(B) Adjustment
For each year, the Secretary shall reduce the percentage increase described in subparagraph (A) by the productivity adjustment described in
(4) Authority to apply prior authorization
The Secretary may, as determined appropriate by the Secretary, apply prior authorization for home infusion therapy services under
(5) Accreditation of qualified home infusion therapy suppliers
(A) Factors for designation of accreditation organizations
The Secretary shall consider the following factors in designating accreditation organizations under subparagraph (B) and in reviewing and modifying the list of accreditation organizations designated pursuant to subparagraph (C):
(i) The ability of the organization to conduct timely reviews of accreditation applications.
(ii) The ability of the organization to take into account the capacities of suppliers located in a rural area (as defined in
(iii) Whether the organization has established reasonable fees to be charged to suppliers applying for accreditation.
(iv) Such other factors as the Secretary determines appropriate.
(B) Designation
Not later than January 1, 2021, the Secretary shall designate organizations to accredit suppliers furnishing home infusion therapy. The list of accreditation organizations so designated may be modified pursuant to subparagraph (C).
(C) Review and modification of list of accreditation organizations
(i) In general
The Secretary shall review the list of accreditation organizations designated under subparagraph (B) taking into account the factors under subparagraph (A). Taking into account the results of such review, the Secretary may, by regulation, modify the list of accreditation organizations designated under subparagraph (B).
(ii) Special rule for accreditations done prior to removal from list of designated accreditation organizations
In the case where the Secretary removes an organization from the list of accreditation organizations designated under subparagraph (B), any supplier that is accredited by the organization during the period beginning on the date on which the organization is designated as an accreditation organization under subparagraph (B) and ending on the date on which the organization is removed from such list shall be considered to have been accredited by an organization designated by the Secretary under subparagraph (B) for the remaining period such accreditation is in effect.
(D) Rule for accreditations made prior to designation
In the case of a supplier that is accredited before January 1, 2021, by an accreditation organization designated by the Secretary under subparagraph (B) as of January 1, 2019, such supplier shall be considered to have been accredited by an organization designated by the Secretary under such paragraph as of January 1, 2023, for the remaining period such accreditation is in effect.
(6) Notification of infusion therapy options available prior to furnishing home infusion therapy
Prior to the furnishing of home infusion therapy to an individual, the physician who establishes the plan described in
(7) Home infusion therapy services temporary transitional payment
(A) Temporary transitional payment
(i) In general
The Secretary shall, in accordance with the payment methodology described in subparagraph (B) and subject to the provisions of this paragraph, provide a home infusion therapy services temporary transitional payment under this part to an eligible home infusion supplier (as defined in subparagraph (F)) for items and services described in subparagraphs (A) and (B) of section 1395x(iii)(2)) 7 of this title furnished during the period specified in clause (ii) by such supplier in coordination with the furnishing of transitional home infusion drugs (as defined in clause (iii)).
(ii) Period specified
For purposes of clause (i), the period specified in this clause is the period beginning on January 1, 2019, and ending on the day before the date of the implementation of the payment system under paragraph (1)(A).
(iii) Transitional home infusion drug defined
For purposes of this paragraph, the term "transitional home infusion drug" has the meaning given to the term "home infusion drug" under section 1395x(iii)(3)(C)) 7 of this title, except that clause (ii) of such section shall not apply if a drug described in such clause is identified in clauses (i), (ii), (iii) or (iv) of subparagraph (C) as of February 9, 2018.
(B) Payment methodology
For purposes of this paragraph, the Secretary shall establish a payment methodology, with respect to items and services described in subparagraph (A)(i). Under such payment methodology the Secretary shall—
(i) create the three payment categories described in clauses (i), (ii), and (iii) of subparagraph (C);
(ii) assign drugs to such categories, in accordance with such clauses;
(iii) assign appropriate Healthcare Common Procedure Coding System (HCPCS) codes to each payment category; and
(iv) establish a single payment amount for each such payment category, in accordance with subparagraph (D), for each infusion drug administration calendar day in the individual's home for drugs assigned to such category.
(C) Payment categories
(i) Payment category 1
The Secretary shall create a payment category 1 and assign to such category drugs which are covered under the Local Coverage Determination on External Infusion Pumps (LCD number L33794) and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J0133, J0285, J0287, J0288, J0289, J0895, J1170, J1250, J1265, J1325, J1455, J1457, J1570, J2175, J2260, J2270, J2274, J2278, J3010, or J3285.
(ii) Payment category 2
The Secretary shall create a payment category 2 and assign to such category drugs which are covered under such local coverage determination and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J1555 JB, J1559 JB, J1561 JB, J1562 JB, J1569 JB, or J1575 JB.
(iii) Payment category 3
The Secretary shall create a payment category 3 and assign to such category drugs which are covered under such local coverage determination and billed with the following HCPCS codes (as identified as of January 1, 2018, and as subsequently modified by the Secretary): J9000, J9039, J9040, J9065, J9100, J9190, J9200, J9360, or J9370.
(iv) Infusion drugs not otherwise included
With respect to drugs that are not included in payment category 1, 2, or 3 under clause (i), (ii), or (iii), respectively, the Secretary shall assign to the most appropriate of such categories, as determined by the Secretary, drugs which are—
(I) covered under such local coverage determination and billed under HCPCS codes J7799 or J7999 (as identified as of July 1, 2017, and as subsequently modified by the Secretary); or
(II) billed under any code that is implemented after February 9, 2018, and included in such local coverage determination or included in subregulatory guidance as a home infusion drug described in subparagraph (A)(i).
(D) Payment amounts
(i) In general
Under the payment methodology, the Secretary shall pay eligible home infusion suppliers, with respect to items and services described in subparagraph (A)(i) furnished during the period described in subparagraph (A)(ii) by such supplier to an individual, at amounts equal to the amounts determined under the physician fee schedule established under
(ii) Payment amount for category 1
For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 1 described in subparagraph (C)(i), are one unit of HCPCS code 96365 plus three units of HCPCS code 96366 (as identified as of January 1, 2018, and as subsequently modified by the Secretary).
(iii) Payment amount for category 2
For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 2 described in subparagraph (C)(i), are one unit of HCPCS code 96369 plus three units of HCPCS code 96370 (as identified as of January 1, 2018, and as subsequently modified by the Secretary).
(iv) Payment amount for category 3
For purposes of clause (i), the codes and units described in this clause, with respect to drugs included in payment category 3 described in subparagraph (C)(i), are one unit of HCPCS code 96413 plus three units of HCPCS code 96415 (as identified as of January 1, 2018, and as subsequently modified by the Secretary).
(E) Clarifications
(i) Infusion drug administration day
For purposes of this subsection, with respect to the furnishing of transitional home infusion drugs or home infusion drugs to an individual by an eligible home infusion supplier or a qualified home infusion therapy supplier, a reference to payment to such supplier for an infusion drug administration calendar day in the individual's home shall refer to payment only for the date on which professional services (as described in
(ii) Treatment of multiple drugs administered on same infusion drug administration day
In the case that an eligible home infusion supplier, with respect to an infusion drug administration calendar day in an individual's home, furnishes to such individual transitional home infusion drugs which are not all assigned to the same payment category under subparagraph (C), payment to such supplier for such infusion drug administration calendar day in the individual's home shall be a single payment equal to the amount of payment under this paragraph for the drug, among all such drugs so furnished to such individual during such calendar day, for which the highest payment would be made under this paragraph.
(F) Eligible home infusion suppliers
In this paragraph, the term "eligible home infusion supplier" means a supplier that is enrolled under this part as a pharmacy that provides external infusion pumps and external infusion pump supplies and that maintains all pharmacy licensure requirements in the State in which the applicable infusion drugs are administered.
(G) Implementation
Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise.
(v) Payment for outpatient physical therapy services and outpatient occupational therapy services furnished by a therapy assistant
(1) In general
In the case of an outpatient physical therapy service or outpatient occupational therapy service furnished on or after January 1, 2022, for which payment is made under
(2) Use of modifier
(A) Establishment
Not later than January 1, 2019, the Secretary shall establish a modifier to indicate (in a form and manner specified by the Secretary), in the case of an outpatient physical therapy service or outpatient occupational therapy service furnished in whole or in part by a therapy assistant (as so defined), that the service was furnished by a therapy assistant.
(B) Required use
Each request for payment, or bill submitted, for an outpatient physical therapy service or outpatient occupational therapy service furnished in whole or in part by a therapy assistant (as so defined) on or after January 1, 2020, shall include the modifier established under subparagraph (A) for each such service.
(3) Implementation
The Secretary shall implement this subsection through notice and comment rulemaking.
(w) Opioid use disorder treatment services
(1) In general
The Secretary shall pay to an opioid treatment program (as defined in paragraph (2) of
(2) Considerations
The Secretary may implement this subsection through one or more bundles based on the type of medication provided (such as buprenorphine, methadone, naltrexone, or a new innovative drug), the frequency of services, the scope of services furnished, characteristics of the individuals furnished such services, or other factors as the Secretary determine 8 appropriate. In developing such bundles, the Secretary may consider payment rates paid to opioid treatment programs for comparable services under State plans under subchapter XIX or under the TRICARE program under
(3) Annual updates
The Secretary shall provide an update each year to the bundled payment amounts under this subsection.
(x) Payment rules relating to rural emergency hospitals
(1) Payment for rural emergency hospital services
In the case of rural emergency hospital services (as defined in
(2) Additional facility payment
(A) In general
The Secretary shall make monthly payments to a rural emergency hospital in an amount that is equal to 1/12 of the annual additional facility payment specified in subparagraph (B).
(B) Annual additional facility payment amount
The annual additional facility payment amount specified in this subparagraph is—
(i) for 2023, a Medicare subsidy amount determined under subparagraph (C); and
(ii) for 2024 and each subsequent year, the amount determined under this subparagraph for the preceding year, increased by the hospital market basket percentage increase.
(C) Determination of medicare subsidy amount
For purposes of subparagraph (B)(i), the Medicare subsidy amount determined under this subparagraph is an amount equal to—
(i) the excess (if any) of—
(I) the total amount that the Secretary determines was paid under this subchapter to all critical access hospitals in 2019; over
(II) the estimated total amount that the Secretary determines would have been paid under this subchapter to such hospitals in 2019 if payment were made for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems for such services during such year; divided by
(ii) the total number of such hospitals in 2019.
(D) Reporting on use of the additional facility payment
A rural emergency hospital receiving the additional facility payment under this paragraph shall maintain detailed information as specified by the Secretary as to how the facility has used the additional facility payments. Such information shall be made available to the Secretary upon request.
(3) Payment for ambulance services
For provisions relating to payment for ambulance services furnished by an entity owned and operated by a rural emergency hospital, see subsection (l).
(4) Payment for post-hospital extended care services
For provisions relating to payment for post-hospital extended care services furnished by a rural emergency hospital that has a unit that is a distinct part licensed as a skilled nursing facility, see
(5) Source of payments
(A) In general
Except as provided in subparagraph (B), payments under this subsection shall be made from the Federal Supplementary Medical Insurance Trust Fund under
(B) Additional facility payment and post-hospital extended care services
Payments under paragraph (2) shall be made from the Federal Hospital Insurance Trust Fund under
(y) Payment for certain services furnished by rural health clinics
(1) Attending physician services for hospice patients
In the case of services described in
(2) Mental health visits furnished via telecommunications technology
In the case of mental health visits furnished via interactive, real-time, audio and video telecommunications technology or audio-only interactions, the in-person mental health visit requirements established under section 405.2463(b)(3) of title 42 of the Code of Federal Regulations (or a successor regulation) shall not apply prior to January 1, 2025 (or, if later, the first day after the end of the emergency period described in
(3) Special payment rule for intensive outpatient services
(A) In general
In the case of intensive outpatient services furnished by a rural health clinic, the payment amount for such services shall be equal to the amount that would have been paid under this subchapter for such services had such services been covered OPD services furnished by a hospital.
(B) Exclusion
Costs associated with intensive outpatient services shall not be used to determine the amount of payment for rural health clinic services under the methodology for all-inclusive rates (established by the Secretary) under
(z) Payment for lymphedema compression treatment items
(1) In general
The Secretary shall determine an appropriate payment basis for lymphedema compression treatment items (as defined in
(2) Frequency limitation
No payment may be made under this part for lymphedema compression treatment items furnished other than at such frequency as the Secretary may establish.
(3) Application of competitive acquisition
In the case of lymphedema compression treatment items that are included in a competitive acquisition program in a competitive acquisition area under
(A) the payment basis under this subsection for such items furnished in such area shall be the payment basis determined under such competitive acquisition program; and
(B) the Secretary may use information on the payment determined under such competitive acquisition programs to adjust the payment amount otherwise determined under this subsection for an area that is not a competitive acquisition area under
(Aug. 14, 1935, ch. 531, title XVIII, §1834, as added and amended
Editorial Notes
References in Text
Section 302(c)(1)(B) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (a)(14)(H)(i), is section 302(c)(1)(B) of
Section 4531(a) of the Balanced Budget Act of 1997, referred to in subsec. (l)(3)(A), is section 4531(a) of
Section 515(a) of the Medicare Access and CHIP Reauthorization Act of 2015, referred to in subsec. (l)(16)(A), is section 515(a) of
Codification
Amendment of subsec. (a)(4) by
Prior Provisions
A prior section 1395m, act Aug. 14, 1935, ch. 531, title XVIII, §1834, as added July 30, 1965,
Amendments
2022—Subsec. (a)(20)(D)(iv).
Subsec. (j)(5)(E).
Subsec. (j)(5)(F).
Subpar. (j)(5)(G).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (l)(17)(F)(i).
Subsec. (m)(1).
Subsec. (m)(2)(B)(i).
Subsec. (m)(2)(B)(iii).
Subsec. (m)(4)(C)(i).
Subsec. (m)(4)(C)(iii).
Subsec. (m)(4)(E).
Subsec. (m)(7)(A).
Subsec. (m)(7)(B)(i).
Subsec. (m)(8).
Subsec. (m)(8)(A).
Subsec. (m)(8)(B)(i).
Subsec. (m)(9).
Subsec. (o)(3)(C)(ii).
Subsec. (o)(4).
Subsec. (o)(4)(B).
Subsec. (o)(5).
Subsec. (s)(3).
Subsec. (s)(4).
Subsec. (y).
Subsec. (y)(2).
Subsec. (y)(3).
Subsec. (z).
2020—Subsec. (a)(9)(D).
Subsec. (a)(9)(D)(ii).
Subsec. (d)(2)(C)(ii), (3)(C)(ii).
Subsec. (d)(2)(D), (3)(D).
Subsec. (m)(1).
Subsec. (m)(2)(A).
Subsec. (m)(4)(A).
Subsec. (m)(4)(C)(ii)(XI).
Subsec. (m)(4)(F)(i).
Subsec. (m)(7).
Subsec. (m)(8).
Subsec. (o)(4).
Subsec. (x).
Subsec. (y).
2018—Subsec. (a)(2)(A)(iv).
Subsec. (h)(5).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (l)(15).
Subsec. (l)(17).
Subsec. (m)(2)(B).
Subsec. (m)(2)(B)(i).
Subsec. (m)(2)(B)(ii).
Subsec. (m)(4)(C)(i).
Subsec. (m)(4)(C)(ii)(IX).
Subsec. (m)(4)(C)(ii)(X).
Subsec. (m)(5).
Subsec. (m)(6).
Subsec. (m)(7).
Subsec. (o)(3).
Subsec. (u)(7).
Subsec. (v).
Subsec. (w).
2016—Subsec. (a)(1)(G).
Subsec. (h)(1)(H)(ii).
Subsec. (t).
Subsec. (u).
2015—Subsec. (a)(2)(A)(iv).
Subsec. (a)(11)(B)(ii).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (l)(16).
Subsec. (r).
Subsec. (s).
2014—Subsec. (a)(1)(I).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (p).
Subsec. (q).
2013—Subsec. (a)(1)(F).
Subsec. (a)(1)(H).
Subsec. (a)(22).
Subsec. (k)(7).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (l)(15).
2012—Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
2011—Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
2010—Subsec. (a)(1)(F)(ii).
Subsec. (a)(1)(F)(iii).
Subsec. (a)(7)(A)(i)(II).
Subsec. (a)(7)(A)(i)(III).
Subsec. (a)(7)(A)(iii).
Subsec. (a)(7)(C)(ii)(II).
Subsec. (a)(11)(B).
Subsec. (a)(11)(B)(ii).
Subsec. (a)(14).
Subsec. (a)(14)(K).
Subsec. (a)(14)(L), (M).
"(L) for 2014—
"(i) in the case of items and services described in subparagraph (J)(i) for which a payment adjustment has not been made under subsection (a)(1)(F)(ii) in any previous year, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2013, plus 2.0 percentage points; or
"(ii) in the case of other items and services, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June 2013; and
"(M) for a subsequent year, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of the previous year."
Subsec. (a)(16)(B).
Subsec. (a)(20)(F)(i).
Subsec. (a)(20)(G).
Subsec. (g)(2)(A).
Subsec. (g)(2)(B).
Subsec. (h)(4)(A).
Subsec. (h)(4)(A)(x).
Subsec. (h)(4)(A)(xi).
Subsec. (l)(3).
Subsec. (l)(3)(B).
Subsec. (l)(3)(C).
Subsec. (l)(8).
Subsec. (l)(12)(A).
Subsec. (l)(13)(A).
Subsec. (l)(13)(A)(i), (ii).
Subsec. (n).
Subsec. (o).
2009—Subsec. (a)(20)(F)(i).
2008—Subsec. (a)(1)(E)(ii).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(5)(F).
Subsec. (a)(14)(J) to (M).
Subsec. (a)(20)(B).
Subsec. (a)(20)(E).
Subsec. (a)(20)(F).
Subsec. (e).
Subsec. (g)(4).
Subsec. (h)(1)(H).
Subsec. (l)(13)(A).
Subsec. (l)(13)(B).
Subsec. (l)(14)(B)(i).
Subsec. (m)(4)(C)(ii)(VI) to (VIII).
2006—Subsec. (a)(5)(A).
Subsec. (a)(5)(F).
Subsec. (a)(7)(A).
Subsec. (d)(2)(C)(ii).
Subsec. (d)(3)(C)(ii).
2003—Subsec. (a)(1)(B).
Subsec. (a)(1)(C).
Subsec. (a)(1)(E).
Subsec. (a)(1)(F).
Subsec. (a)(10)(B).
Subsec. (a)(14)(F).
Subsec. (a)(14)(G) to (J).
Subsec. (a)(17), (19).
Subsec. (a)(20).
Subsec. (a)(21).
Subsec. (b)(4)(D)(iv).
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (g)(5).
Subsec. (h)(1)(B).
Subsec. (h)(1)(D).
Subsec. (h)(1)(H).
Subsec. (h)(4)(A)(viii).
Subsec. (h)(4)(A)(ix), (x).
Subsec. (h)(4)(C).
Subsec. (l)(2)(E).
Subsec. (l)(8), (9).
Subsec. (l)(10).
Subsec. (l)(11).
Subsec. (l)(12).
Subsec. (l)(13).
Subsec. (l)(14).
Subsec. (m)(4)(C)(ii)(III).
2000—Subsec. (a)(14)(C).
Subsec. (a)(14)(D) to (F).
Subsec. (c).
Subsec. (d)(2)(E)(ii).
Subsec. (d)(3).
Subsec. (d)(3)(A).
Subsec. (d)(3)(E).
Subsec. (g)(2)(B).
Subsec. (g)(4).
Subsec. (g)(5).
Subsec. (h)(1)(F).
Subsec. (h)(1)(G).
Subsec. (h)(4)(A)(v).
Subsec. (h)(4)(A)(vi) to (viii).
Subsec. (l)(2)(E).
Subsec. (l)(3)(A), (B).
Subsec. (l)(8).
Subsec. (m).
1999—Subsec. (a)(13).
Subsec. (g).
Subsec. (h)(4)(A)(i).
Subsec. (h)(4)(A)(v).
Subsec. (h)(4)(B).
1997—Subsec. (a)(2)(B)(iv).
Subsec. (a)(9)(B)(iv).
Subsec. (a)(9)(B)(v), (vi).
Subsec. (a)(9)(D).
Subsec. (a)(10)(B).
Subsec. (a)(14)(B).
Subsec. (a)(14)(C), (D).
Subsec. (a)(16).
Subsec. (a)(17).
Subsec. (c)(1)(C).
Subsec. (c)(2)(A)(iii).
"(I) is at a high risk of developing breast cancer (as determined pursuant to factors identified by the Secretary), payment may not be made under this part for a screening mammography performed within the 11 months following the month in which a previous screening mammography was performed, or
"(II) is not at a high risk of developing breast cancer, payment may not be made under this part for a screening mammography performed within the 23 months following the month in which a previous screening mammography was performed."
Subsec. (c)(2)(A)(iv), (v).
"(iv) In the case of a woman over 49 years of age, but under 65 years of age, payment may not be made under this part for screening mammography performed within 11 months following the month in which a previous screening mammography was performed.
"(v) In the case of a woman over 64 years of age, payment may not be made for screening mammography performed within 23 months following the month in which a previous screening mammography was performed."
Subsec. (d).
Subsec. (g).
Subsec. (h)(4)(A)(iv).
Subsec. (h)(4)(A)(v), (vi).
Subsec. (k).
Subsec. (l).
1994—Subsec. (a)(3)(D).
Subsec. (a)(5)(E).
Subsec. (a)(7).
Subsec. (a)(7)(A)(iii)(II).
Subsec. (a)(7)(C)(i).
Subsec. (a)(10)(B).
Subsec. (a)(14)(A).
Subsec. (a)(15).
"(A)
"(B)
Subsec. (a)(16).
"(A)
"(B)
Subsec. (a)(17), (18).
Subsec. (b)(4)(D).
Subsec. (b)(4)(D)(iv).
Subsec. (b)(4)(D)(vii).
Subsec. (b)(4)(E).
Subsec. (b)(4)(F), (G).
Subsec. (c)(1)(B).
Subsec. (c)(1)(C)(iii).
Subsec. (c)(3) to (5).
Subsec. (f).
Subsec. (g)(1).
Subsec. (g)(1)(B).
Subsec. (g)(2).
Subsec. (h)(3).
Subsec. (j).
Subsec. (j)(4), (5).
1993—Subsec. (a)(1)(D).
Subsec. (a)(2)(A)(iii).
Subsec. (a)(2)(C).
Subsec. (a)(3)(A).
Subsec. (a)(3)(C).
Subsec. (a)(8)(A)(ii)(III).
Subsec. (a)(8)(B)(ii) to (iv).
Subsec. (a)(9)(A)(ii)(II).
Subsec. (a)(9)(B)(ii) to (iv).
Subsec. (h)(1)(B).
Subsec. (h)(1)(E).
Subsec. (h)(4)(A).
Subsec. (i).
1990—Subsec. (a).
Subsec. (a)(1)(D).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(2)(C).
Subsec. (a)(3)(B).
Subsec. (a)(3)(C).
Subsec. (a)(3)(D).
Subsec. (a)(4).
Subsec. (a)(5)(A).
Subsec. (a)(5)(E).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(A)(ii), (iii).
Subsec. (a)(7)(A)(iv).
Subsec. (a)(7)(A)(v).
Subsec. (a)(7)(A)(vi).
Subsec. (a)(7)(C).
Subsec. (a)(8)(A)(ii).
Subsec. (a)(8)(B).
"(i) for 1991 and for 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local purchase prices for the carriers in the region computed under subparagraph (A)(ii)(II) for the year, and
"(ii) for each subsequent year, equal to the regional purchase price computed under this subparagraph for the previous year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year."
Subsec. (a)(8)(C).
Subsec. (a)(8)(C)(ii).
Subsec. (a)(8)(C)(iii).
Subsec. (a)(8)(C)(iv).
Subsec. (a)(8)(D).
"(i) in 1991, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year; and
"(ii) in a subsequent year, may not exceed 120 percent, and may not be lower than 90 percent, of the average of the purchase prices recognized under such subparagraph for all the carrier service areas in the United States in that year."
Subsec. (a)(9)(A)(ii)(II).
Subsec. (a)(9)(B).
"(i) for 1991 and 1992, equal to the average (weighted by relative volume of all claims among carriers) of the local monthly payment rates for the carriers in the region computed under subparagraph (A)(ii)(II) for the year, and
"(ii) for each subsequent year, equal to the regional monthly payment rates computed under this subparagraph for the previous year increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year."
Subsec. (a)(9)(C)(ii).
Subsec. (a)(9)(C)(iii).
Subsec. (a)(9)(C)(iv).
Subsec. (a)(9)(D).
"(i) in 1991, may not exceed 125 percent, and may not be lower than 85 percent, of the average of the base monthly payment amounts recognized under such subparagraph for all the carrier service areas in the United States in that year; and
"(ii) in a subsequent year, may not exceed 120 percent, and may not be lower than 90 percent, of the average of the base monthly payment amounts recognized under such subparagraph for all the carrier service areas in the United States in that year."
Subsec. (a)(12).
Subsec. (a)(13).
"(A) durable medical equipment (as defined in
"(B) prosthetic devices (described in
"(C) orthotics and prosthetics (described in
but does not include intraocular lenses or medical supplies (including catheters, catheter supplies, ostomy bags, and supplies related to ostomy care) furnished by a home health agency under
Subsec. (a)(14).
Subsec. (a)(15).
Subsec. (a)(16).
Subsec. (b)(1)(B).
Subsec. (b)(4)(D).
Subsec. (b)(4)(E).
Subsec. (b)(4)(F).
Subsec. (c).
Subsec. (f).
Subsec. (h).
1989—Subsec. (a)(1)(D).
Subsec. (a)(2)(A)(iii).
Subsec. (a)(2)(B)(i), (3)(B)(i).
Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(B)(i).
Subsec. (a)(7)(B)(ii).
Subsec. (a)(8)(A)(ii)(I).
Subsec. (a)(8)(A)(ii)(II).
Subsec. (a)(8)(D)(i).
Subsec. (a)(8)(D)(ii).
Subsec. (a)(9)(A)(ii)(I).
Subsec. (a)(9)(A)(ii)(II).
Subsec. (a)(9)(D)(i).
Subsec. (a)(9)(D)(ii).
Subsec. (a)(13).
Subsec. (b)(1)(B).
Subsec. (b)(4)(A).
Subsec. (b)(4)(C) to (E).
Subsecs. (c) to (e).
Subsec. (f).
Subsec. (g).
1988—
Subsec. (a)(1)(C).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B)(i).
Subsec. (a)(3)(A).
Subsec. (a)(3)(B)(i).
Subsec. (a)(4).
Subsec. (a)(7)(A)(ii).
Subsec. (a)(7)(A)(iii).
Subsec. (a)(7)(B)(i).
Subsec. (a)(8)(A)(i)(I).
Subsec. (a)(8)(B).
Subsec. (a)(9)(A)(ii)(I).
Subsec. (a)(9)(A)(ii)(II).
Subsec. (a)(9)(B).
Subsec. (a)(9)(C)(i).
Subsec. (a)(10)(B).
Subsec. (a)(11)(A).
Subsec. (a)(12).
Subsec. (a)(14).
Subsec. (b).
Subsec. (b)(1)(B).
Subsec. (b)(4)(C).
Subsec. (b)(4)(D), (5).
Subsec. (b)(5)(C).
Subsec. (b)(6).
Subsec. (b)(6)(B).
Subsec. (c).
Subsec. (d).
Subsec. (e).
1987—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2022 Amendment
Amendment by section 4124(c) of
Effective Date of 2020 Amendment
Amendment by section 125(a)(2)(B), (c) of
Effective Date of 2016 Amendment
Amendment by section 5012(b) of
Effective Date of 2015 Amendment
Amendment by
Effective Date of 2010 Amendment
"(1)
"(2)
Amendment by section 6405(a) of
Effective Date of 2008 Amendment
Amendment by section 125(b)(5) of
Effective Date of 2006 Amendment
"(A)
"(B)
Amendment by section 5113(b) of
Effective Date of 2003 Amendment
Amendment by section 405(a)(1) of
"(A)
"(B)
Amendment by section 627(b)(1) of
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title II, §201(a)] of
Amendment by section 1(a)(6) [title II, §205(a)] of
Amendment by section 1(a)(6) [title II, §223(b)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title II, §201(e)(2)] of
Amendment by section 1000(a)(6) [title III, §321(k)(3)] of
Effective Date of 1997 Amendment
Amendment by section 4101(a), (c) of
Amendment by section 4104(b)(1) of
"(1)
"(2)
Amendment by section 4201(c)(5) of
Amendment by section 4531(b)(2) of
Amendment by section 4541(a)(2) of
"(1)
"(2)
Effective Date of 1994 Amendment
Amendment by section 156(a)(2)(C) of
Effective Date of 1993 Amendment
Amendment by section 13544(b)(1) of
Effective Date of 1990 Amendment
"(1) Except as otherwise provided, the amendments made by this section [amending this section,
"(2) The amendment made by subsection (f) [amending this section] shall be effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1987 [
Amendment by section 4104(a) of
Amendment by section 4153(a)(1), (2)(D) of
Amendment by section 4163(b) of
Effective Date of 1989 Amendment
Amendment by section 6102(f)(1) of
Amendment by section 201(a) of
Effective Date of 1988 Amendment
Amendment by
Amendment by section 202(b)(4) of
Amendment by section 203(c)(1)(F) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
[
Effective Date
Subsection (a) of this section applicable to covered items (other than oxygen and oxygen equipment) furnished on or after Jan. 1, 1989, and to oxygen and oxygen equipment furnished on or after June 1, 1989, see section 4062(e) of
Regulations
Construction of 2010 Amendment
Construction of 2009 Amendment
Construction of 2008 Amendment
Transfer of Functions
Physician Payment Review Commission (PPRC) was terminated and its assets and staff transferred to the Medicare Payment Advisory Commission (MedPAC) by section 4022(c)(2), (3) of
Payment Rates for Durable Medical Equipment Under the Medicare Program
"(a)
"(b)
"(c)
Publication of Data
Implementation of 2022 Amendment
Implementation of 2020 Amendment
Encouraging Use of Telecommunications Systems for Home Health Services Furnished During Emergency Period
Revising Payment Rates for Durable Medical Equipment Under the Medicare Program Through Duration of Emergency Period
"(a)
"(b)
Implementation of 2018 Amendment
Implementation of 2015 Amendment
Implementation of 2010 Amendment
Demonstration Project To Assess the Appropriate Use of Imaging Services
"(1)
"(A)
"(B)
"(C)
"(2)
"(A)
"(i)
"(ii)
"(B)
"(i)
"(ii)
"(I) represent a wide range of geographic areas, demographic characteristics (such as urban, rural, and suburban), and practice settings (such as private and academic practices); and
"(II) have the capability to submit data to the Secretary (or an entity under a subcontract with the Secretary) in an electronic format in accordance with standards established by the Secretary.
"(C)
"(i) reimburse physicians for reasonable administrative costs incurred in participating in the demonstration project under this subsection; and
"(ii) provide reasonable incentives to physicians to encourage participation in the demonstration project under this subsection.
"(D)
"(i)
"(ii)
"(I) be developed or endorsed by a medical specialty society; and
"(II) be developed in adherence to appropriateness principles developed by a consensus organization, such as the AQA alliance.
"(E)
"(i) A model described in subparagraph (F).
"(ii) A model described in subparagraph (G).
"(iii) Any other model that the Secretary determines to be useful in evaluating the use of appropriateness criteria for advanced diagnostic imaging services.
"(F)
"(i) uses an electronic or paper intake form that—
"(I) contains a certification by the physician furnishing the imaging service that the data on the intake form was confirmed with the Medicare beneficiary before the service was furnished;
"(II) contains standardized data elements for diagnosis, service ordered, service furnished, and such other information determined by the Secretary, in consultation with medical specialty societies and other stakeholders, to be germane to evaluating the effectiveness of the use of appropriateness criteria selected under subparagraph (D); and
"(III) is accessible to physicians participating in the demonstration project under this subsection in a format that allows for the electronic submission of such form; and
"(ii) provides for feedback reports in accordance with paragraph (3)(B).
"(G)
"(i) uses a computerized order-entry system that requires the transmittal of relevant supporting information at the time of referral for advanced diagnostic imaging services and provides automated decision-support feedback to the referring physician regarding the appropriateness of furnishing such imaging services; and
"(ii) provides for feedback reports in accordance with paragraph (3)(B).
"(H)
"(i) as a model for collecting data regarding physician compliance with appropriateness criteria selected under subparagraph (D) under the demonstration project under this subsection; or
"(ii) under any model used for collecting such data under the demonstration project.
"(I)
"(i)
"(ii)
"(I) the satisfaction of Medicare beneficiaries who are furnished advanced diagnostic imaging services by a physician participating in the demonstration project;
"(II) the satisfaction of physicians participating in the demonstration project;
"(III) if applicable, timelines for the provision of feedback reports under paragraph (3)(B); and
"(IV) any other areas determined appropriate by the Secretary.
"(3)
"(A)
"(i) the appropriateness criteria selected under paragraph (2)(D); and
"(ii) to the extent feasible, the utilization of such services by physicians not participating in the demonstration project.
"(B)
"(i) a profile of the rate of compliance by the physician with appropriateness criteria selected under paragraph (2)(D), including a comparison of—
"(I) the rate of compliance by the physician with such criteria; and
"(II) the rate of compliance by the physician's peers (as defined by the Secretary) with such criteria; and
"(ii) to the extent feasible, a comparison of—
"(I) the rate of utilization of advanced diagnostic imaging services by the physician; and
"(II) the rate of utilization of such services by the physician's peers (as defined by the Secretary) who are not participating in the demonstration project.
"(4)
"(A)
"(B)
"(5)
"(A)
"(i) assess the timeliness and efficacy of the demonstration project;
"(ii) assess the performance of entities under a contract entered into under paragraph (2)(I)(i);
"(iii) analyze data—
"(I) on the rates of appropriate, uncertain, and inappropriate advanced diagnostic imaging services furnished by physicians participating in the demonstration project;
"(II) on patterns and trends in the appropriateness and inappropriateness of such services furnished by such physicians;
"(III) on patterns and trends in national and regional variations of care with respect to the furnishing of such services; and
"(IV) on the correlation between the appropriateness of the services furnished and image results; and
"(iv) address—
"(I) the thresholds used under the demonstration project to identify acceptable and outlier levels of performance with respect to the appropriateness of advanced diagnostic imaging services furnished;
"(II) whether prospective use of appropriateness criteria could have an effect on the volume of such services furnished;
"(III) whether expansion of the use of appropriateness criteria with respect to such services to a broader population of Medicare beneficiaries would be advisable;
"(IV) whether, under such an expansion, physicians who demonstrate consistent compliance with such appropriateness criteria should be exempted from certain requirements;
"(V) the use of incident-specific versus practice-specific outlier information in formulating future recommendations with respect to the use of appropriateness criteria for such services under the Medicare program; and
"(VI) the potential for using methods (including financial incentives), in addition to those used under the models under the demonstration project, to ensure compliance with such criteria.
"(B)
"(6)
Air Ambulance Payment Improvements
Evaluation of Certain Code
GAO Report on Class III Medical Devices
Use of Data
Implementation of 2003 Amendment
GAO Report on Costs and Access
Report on Demonstration Project Permitting Skilled Nursing Facilities To Be Originating Telehealth Sites; Authority To Implement
"(a)
"(b)
"(c)
Payment for New Technologies
"(1)
"(A)
"(i) In the case of a technology which directly takes a digital image (without involving film), in an amount equal to 150 percent of the amount of payment under section 1848 of such Act (
"(ii) In the case of a technology which allows conversion of a standard film mammogram into a digital image and subsequently analyzes such resulting image with software to identify possible problem areas, in an amount equal to the limit that would otherwise be applied under section 1834(c)(3) of such Act (
"(B)
"(C)
"(D)
"(2)
"(3)
"(A) A significant increase or decrease in the resources used in the test or in the manufacture of the equipment.
"(B) A significant improvement in the performance of the test or equipment.
"(C) A significant advance in medical technology that is expected to significantly improve the treatment of medicare beneficiaries.
"(4)
MedPAC Study and Report on Medicare Coverage of Cardiac and Pulmonary Rehabilitation Therapy Services
"(a)
"(1)
"(2)
"(A) qualifying diagnoses required for coverage of cardiac and pulmonary rehabilitation therapy services;
"(B) level of physician direct involvement and supervision in furnishing such services; and
"(C) level of reimbursement for such services.
"(b)
GAO Studies on Costs of Ambulance Services Furnished in Rural Areas
"(1)
"(2)
"(A) The cost of efficiently providing ambulance services for trips originating in rural areas, with special emphasis on collection of cost data from rural providers.
"(B) The means by which rural areas with low population densities can be identified for the purpose of designating areas in which the cost of providing ambulance services would be expected to be higher than similar services provided in more heavily populated areas because of low usage. Such study shall also include an analysis of the additional costs of providing ambulance services in areas designated under the previous sentence.
"(3)
Adjustment in Rural Rates
Study and Report on Additional Coverage for Telehealth Services
"(1)
"(A) settings and sites for the provision of telehealth services that are in addition to those permitted under section 1834(m) of the Social Security Act [
"(B) practitioners that may be reimbursed under such section for furnishing telehealth services that are in addition to the practitioners that may be reimbursed for such services under such section; and
"(C) geographic areas in which telehealth services may be reimbursed that are in addition to the geographic areas where such services may be reimbursed under such section.
"(2)
Special Rules for Payments for 2001
"(A) for services furnished on or after January 1, 2001, and before July 1, 2001, shall be the percentage increase for 2001 as determined under the provisions of law in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(B) for services furnished on or after July 1, 2001, and before January 1, 2002, shall be equal to 4.7 percent."
"(1) for items furnished on or after January 1, 2001, and before July 1, 2001, shall be the payment basis for 2001 as determined under the provisions of law in effect on the day before the date of the enactment of this Act [Dec. 21, 2000] (including the application of section 228(a)(1) of BBRA [
"(2) for items furnished on or after July 1, 2001, and before January 1, 2002, shall be the payment basis that is determined under such section 1834(a) if such section 228(a)(1) did not apply and taking into account the amendment made by subsection (a), increased by a transitional percentage allowance equal to 3.28 percent (to account for the timing of implementation of the CPI update)."
"(1) for items furnished on or after January 1, 2001, and before July 1, 2001, shall be the payment basis for 2001 as determined under the provisions of law in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for items furnished on or after July 1, 2001, and before January 1, 2002, shall be the payment basis that is determined under such section taking into account the amendments made by subsection (a), increased by a transitional percentage allowance equal to 2.6 percent (to account for the timing of implementation of the CPI update)."
Preemption of Rule
GAO Study and Report on Costs of Emergency and Medical Transportation Services
"(a)
"(b)
Treatment of Temporary Payment Increases After Calendar Year 2001
"(1) Section 401(c)(2) [set out as a note under
"(2) Section 422(e)(2) [set out as a note under
"(3) Section 423(a)(2)(B) [set out above] (relating to ambulance services).
"(4) Section 425(b)(2) [set out above] (relating to durable medical equipment).
"(5) Section 426(b)(2) [set out above] (relating to prosthetic devices and orthotics and prosthetics)."
Study of Delivery of Intravenous Immune Globulin (IVIG) Outside Hospitals and Physicians' Offices
Temporary Increase in Payment Rates for Durable Medical Equipment and Oxygen
"(a)
"(1) 2001 by 0.3 percent, and
"(2) 2002 by 0.6 percent.
"(b)
"(1) under subsection (a)(1) shall not apply after 2001 and shall not be taken into account in calculating the payment amounts applicable for covered items furnished after such year; and
"(2) under subsection (a)(2) shall not apply after 2002 and shall not be taken into account in calculating the payment amounts applicable for covered items furnished after such year."
Demonstration of Coverage of Ambulance Services Under Medicare Through Contracts With Units of Local Government
"(a)
"(1) the unit of local government furnishes (or arranges for the furnishing of) ambulance services for which payment may be made under part B of title XVIII of the Social Security Act [
"(2) any individual or entity furnishing ambulance services under the contract meets the requirements otherwise applicable to individuals and entities furnishing such services under such part; and
"(3) for each month during which the contract is in effect, the Secretary makes a capitated payment to the unit of local government in accordance with subsection (b).
The projects may extend over a period of not to exceed 3 years each. Not later than July 1, 2000, the Secretary shall publish a request for proposals for such projects.
"(b)
"(1)
"(A) the Secretary's estimate of the number of individuals covered under the contract for the month; and
"(B) 1/12 of the capitated payment rate for the year established under paragraph (2).
"(2)
"(A) in its first year, a rate established for the project by the Secretary, using the most current available data, in a manner that ensures that aggregate payments under the project will not exceed the aggregate payment that would have been made for ambulance services under part B of title XVIII of the Social Security Act [
"(B) in a subsequent year, the capitated payment rate established for the previous year increased by an appropriate inflation adjustment factor.
"(c)
"(1) covering individuals residing in additional units of local government (under arrangements entered into between such units and the unit of local government involved);
"(2) permitting the unit of local government to transport individuals to non-hospital providers if such providers are able to furnish quality services at a lower cost than hospital providers; or
"(3) implementing such other innovations as the unit of local government may propose to improve the quality of ambulance services and control the costs of such services.
"(d)
"(e)
"(1)
"(2)
[References to Medicare+Choice deemed to refer to Medicare Advantage, see section 201(b) of
[
Payment Freeze for Parenteral and Enteral Nutrients, Supplies, and Equipment
Service Standards for Providers of Oxygen and Oxygen Equipment
Access to Home Oxygen Equipment
"(1)
"(2)
Use of Covered Items by Disabled Beneficiaries
"(1)
"(2)
Criteria for Treatment of Items as Prosthetic Devices or Orthotics and Prosthetics
Adjustment Required for Certain Items
"(1)
"(2)
Limitation on Prevailing Charge for Physicians' Radiology Services Furnished During 1991; Exceptions
"(1)
"(2)
Limitation on Carrier Adjustments for Radiologist Services Furnished During 1991
"(1) a carrier may not make any adjustment, under section 1842(b)(3)(B) of such Act [
"(2) no payment adjustment may be made under section 1842(b)(8) of such Act, and
"(3) section 1842(b)(9) of such Act shall not apply."
Study of Payments for Prosthetic Devices, Orthotics, and Prosthetics
Special Rule for Nuclear Medicine Physicians
Special Rule for Interventional Radiologists; "Split Billing"
Rental Payments for Enteral and Parenteral Pumps
"(1)
"(2)
"(A) monthly rental payments shall not be made under part B of title XVIII of the Social Security Act for more than 15 months during such period, and
"(B) after monthly rental payments have been made for 15 months during such period, payment under such part shall be made for maintenance and servicing of the pump in such amounts as the Secretary of Health and Human Services determines to be reasonable and necessary to ensure the proper operation of the pump."
Treatment of Power-Driven Wheelchairs as Customized Items
Study of Payment for Portable X-Ray Services
GAO Study of Standards for Use of and Payment for Items of Durable Medical Equipment
Reports on Medicare Beneficiary Drug Expenses
Additional Studies by Secretary or Comptroller General
Development of Standard Medicare Claims Forms
Studies and Reports on Screening Mammography
Deadline for Establishment of Fee Schedules for Radiologist Services; Report to Congress
Study and Evaluation
"(1) The Secretary of Health and Human Services shall monitor the impact of the amendments made by this section [enacting this section, amending
"(2) Before January 1, 1991, the Secretary may not conduct any demonstration project respecting alternative methods of payment for covered items under title XVIII of the Social Security Act [
"(3) In this subsection, the term 'covered item' has the meaning given such term in section 1834(a)(13) of the Social Security Act [
"(4) The Secretary shall, upon written request and payment of a reasonable copying fee which the Secretary may establish, provide the data and information used in determining the payment amounts for covered items under section 1834(a) of the Social Security Act [
"(5) The Comptroller General shall conduct a study on the appropriateness of the level of payments allowed for covered items under the medicare program, and shall report to Congress on the results of such study (including recommendations on the transition to regional or national rates) by not later than January 1, 1991. Entities furnishing such items which fail to provide the Comptroller General with reasonable access to necessary records to carry out the study under this paragraph are subject to exclusion from the medicare program under section 1128(a) of the Social Security Act [
1 So in original. The semicolon probably should be a comma.
2 So in original. Subpar. (B) of par. (2) does not contain clauses.
3 So in original. Probably should be "a".
5 So in original. Two subpars. (G) have been enacted.
6 So in original. The period probably should be preceded by another closing parenthesis.
7 So in original. The second closing parenthesis probably should not appear.
8 So in original. Probably should be "determines".
§1395m–1. Improving policies for clinical diagnostic laboratory tests
(a) Reporting of private sector payment rates for establishment of medicare payment rates
(1) In general
(A) General reporting requirements
Subject to subparagraph (B), beginning January 1, 2016, and every 3 years thereafter (or, annually, in the case of reporting with respect to an advanced diagnostic laboratory test, as defined in subsection (d)(5)), an applicable laboratory (as defined in paragraph (2)) shall report to the Secretary, at a time specified by the Secretary (referred to in this subsection as the "reporting period"), applicable information (as defined in paragraph (3)) for a data collection period (as defined in paragraph (4)) for each clinical diagnostic laboratory test that the laboratory furnishes during such period for which payment is made under this part.
(B) Revised reporting period
In the case of reporting with respect to clinical diagnostic laboratory tests that are not advanced diagnostic laboratory tests, the Secretary shall revise the reporting period under subparagraph (A) such that—
(i) no reporting is required during the period beginning January 1, 2020, and ending December 31, 2024;
(ii) reporting is required during the period beginning January 1, 2025, and ending March 31, 2025; and
(iii) reporting is required every three years after the period described in clause (ii).
(2) Definition of applicable laboratory
In this section, the term "applicable laboratory" means a laboratory that, with respect to its revenues under this subchapter, a majority of such revenues are from this section,
(3) Applicable information defined
(A) In general
In this section, subject to subparagraph (B), the term "applicable information" means, with respect to a laboratory test for a data collection period, the following:
(i) The payment rate (as determined in accordance with paragraph (5)) that was paid by each private payor for the test during the period.
(ii) The volume of such tests for each such payor for the period.
(B) Exception for certain contractual arrangements
Such term shall not include information with respect to a laboratory test for which payment is made on a capitated basis or other similar payment basis during the data collection period.
(4) Data collection period defined
(A) In general
Subject to subparagraph (B), in this section, the term "data collection period" means a period of time, such as a previous 12 month period, specified by the Secretary.
(B) Exception
In the case of the reporting period described in paragraph (1)(B)(ii) with respect to clinical diagnostic laboratory tests that are not advanced diagnostic laboratory tests, the term "data collection period" means the period beginning January 1, 2019, and ending June 30, 2019.
(5) Treatment of discounts
The payment rate reported by a laboratory under this subsection shall reflect all discounts, rebates, coupons, and other price concessions, including those described in
(6) Ensuring complete reporting
In the case where an applicable laboratory has more than one payment rate for the same payor for the same test or more than one payment rate for different payors for the same test, the applicable laboratory shall report each such payment rate and the volume for the test at each such rate under this subsection. Beginning with January 1, 2019, the Secretary may establish rules to aggregate reporting with respect to the situations described in the preceding sentence.
(7) Certification
An officer of the laboratory shall certify the accuracy and completeness of the information reported under this subsection.
(8) Private payor defined
In this section, the term "private payor" means the following:
(A) A health insurance issuer and a group health plan (as such terms are defined in
(B) A Medicare Advantage plan under part C.
(C) A medicaid managed care organization (as defined in
(9) Civil money penalty
(A) In general
If the Secretary determines that an applicable laboratory has failed to report or made a misrepresentation or omission in reporting information under this subsection with respect to a clinical diagnostic laboratory test, the Secretary may apply a civil money penalty in an amount of up to $10,000 per day for each failure to report or each such misrepresentation or omission.
(B) Application
The provisions of
(10) Confidentiality of information
Notwithstanding any other provision of law, information disclosed by a laboratory under this subsection is confidential and shall not be disclosed by the Secretary or a Medicare contractor in a form that discloses the identity of a specific payor or laboratory, or prices charged or payments made to any such laboratory, except—
(A) as the Secretary determines to be necessary to carry out this section;
(B) to permit the Comptroller General to review the information provided;
(C) to permit the Director of the Congressional Budget Office to review the information provided; and
(D) to permit the Medicare Payment Advisory Commission to review the information provided.
(11) Protection from public disclosure
A payor shall not be identified on information reported under this subsection. The name of an applicable laboratory under this subsection shall be exempt from disclosure under
(12) Regulations
Not later than June 30, 2015, the Secretary shall establish through notice and comment rulemaking parameters for data collection under this subsection.
(b) Payment for clinical diagnostic laboratory tests
(1) Use of private payor rate information to determine medicare payment rates
(A) In general
Subject to paragraph (3) and subsections (c) and (d), in the case of a clinical diagnostic laboratory test furnished on or after January 1, 2017, the payment amount under this section shall be equal to the weighted median determined for the test under paragraph (2) for the most recent data collection period.
(B) Application of payment amounts to hospital laboratories
The payment amounts established under this section shall apply to a clinical diagnostic laboratory test furnished by a hospital laboratory if such test is paid for separately, and not as part of a bundled payment under
(2) Calculation of weighted median
For each laboratory test with respect to which information is reported under subsection (a) for a data collection period, the Secretary shall calculate a weighted median for the test for the period, by arraying the distribution of all payment rates reported for the period for each test weighted by volume for each payor and each laboratory.
(3) Phase-in of reductions from private payor rate implementation
(A) In general
Payment amounts determined under this subsection for a clinical diagnostic laboratory test for each of 2017 through 2027 shall not result in a reduction in payments for a clinical diagnostic laboratory test for the year of greater than the applicable percent (as defined in subparagraph (B)) of the amount of payment for the test for the preceding year.
(B) Applicable percent defined
In this paragraph, the term "applicable percent" means—
(i) for each of 2017 through 2020, 10 percent;
(ii) for each of 2021 through 2024, 0 percent; and
(iii) for each of 2025 through 2027, 15 percent.
(C) No application to new tests
This paragraph shall not apply to payment amounts determined under this section for either of the following.
(i) A new test under subsection (c).
(ii) A new advanced diagnostic test 1 (as defined in subsection (d)(5)) under subsection (d).
(4) Application of market rates
(A) In general
Subject to paragraph (3), once established for a year following a data collection period, the payment amounts under this subsection shall continue to apply until the year following the next data collection period.
(B) Other adjustments not applicable
The payment amounts under this section shall not be subject to any adjustment (including any geographic adjustment, budget neutrality adjustment, annual update, or other adjustment).
(5) Sample collection fee
In the case of a sample collected from an individual in a skilled nursing facility or by a laboratory on behalf of a home health agency, the nominal fee that would otherwise apply under
(c) Payment for new tests that are not advanced diagnostic laboratory tests
(1) Payment during initial period
In the case of a clinical diagnostic laboratory test that is assigned a new or substantially revised HCPCS code on or after April 1, 2014, and which is not an advanced diagnostic laboratory test (as defined in subsection (d)(5)), during an initial period until payment rates under subsection (b) are established for the test, payment for the test shall be determined—
(A) using cross-walking (as described in section 414.508(a) of title 42, Code of Federal Regulations, or any successor regulation) to the most appropriate existing test under the fee schedule under this section during that period; or
(B) if no existing test is comparable to the new test, according to the gapfilling process described in paragraph (2).
(2) Gapfilling process described
The gapfilling process described in this paragraph shall take into account the following sources of information to determine gapfill amounts, if available:
(A) Charges for the test and routine discounts to charges.
(B) Resources required to perform the test.
(C) Payment amounts determined by other payors.
(D) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.
(E) Other criteria the Secretary determines appropriate.
(3) Additional consideration
In determining the payment amount under crosswalking or gapfilling processes under this subsection, the Secretary shall consider recommendations from the panel established under subsection (f)(1).
(4) Explanation of payment rates
In the case of a clinical diagnostic laboratory test for which payment is made under this subsection, the Secretary shall make available to the public an explanation of the payment rate for the test, including an explanation of how the criteria described in paragraph (2) and paragraph (3) are applied.
(d) Payment for new advanced diagnostic laboratory tests
(1) Payment during initial period
(A) In general
In the case of an advanced diagnostic laboratory test for which payment has not been made under the fee schedule under
(B) Actual list charge
For purposes of subparagraph (A), the term "actual list charge", with respect to a laboratory test furnished during such period, means the publicly available rate on the first day at which the test is available for purchase by a private payor.
(2) Special rule for timing of initial reporting
With respect to an advanced diagnostic laboratory test described in paragraph (1)(A), an applicable laboratory shall initially be required to report under subsection (a) not later than the last day of the second quarter of the initial period under such paragraph.
(3) Application of market rates after initial period
Subject to paragraph (4), data reported under paragraph (2) shall be used to establish the payment amount for an advanced diagnostic laboratory test after the initial period under paragraph (1)(A) using the methodology described in subsection (b). Such payment amount shall continue to apply until the year following the next data collection period.
(4) Recoupment if actual list charge exceeds market rate
With respect to the initial period described in paragraph (1)(A), if, after such period, the Secretary determines that the payment amount for an advanced diagnostic laboratory test under paragraph (1)(A) that was applicable during the period was greater than 130 percent of the payment amount for the test established using the methodology described in subsection (b) that is applicable after such period, the Secretary shall recoup the difference between such payment amounts for tests furnished during such period.
(5) Advanced diagnostic laboratory test defined
In this subsection, the term "advanced diagnostic laboratory test" means a clinical diagnostic laboratory test covered under this part that is offered and furnished only by a single laboratory and not sold for use by a laboratory other than the original developing laboratory (or a successor owner) and meets one of the following criteria:
(A) The test is an analysis of multiple biomarkers of DNA, RNA, or proteins combined with a unique algorithm to yield a single patient-specific result.
(B) The test is cleared or approved by the Food and Drug Administration.
(C) The test meets other similar criteria established by the Secretary.
(e) Coding
(1) Temporary codes for certain new tests
(A) In general
The Secretary shall adopt temporary HCPCS codes to identify new advanced diagnostic laboratory tests (as defined in subsection (d)(5)) and new laboratory tests that are cleared or approved by the Food and Drug Administration.
(B) Duration
(i) In general
Subject to clause (ii), the temporary code shall be effective until a permanent HCPCS code is established (but not to exceed 2 years).
(ii) Exception
The Secretary may extend the temporary code or establish a permanent HCPCS code, as the Secretary determines appropriate.
(2) Existing tests
Not later than January 1, 2016, for each existing advanced diagnostic laboratory test (as so defined) and each existing clinical diagnostic laboratory test that is cleared or approved by the Food and Drug Administration for which payment is made under this part as of April 1, 2014, if such test has not already been assigned a unique HCPCS code, the Secretary shall—
(A) assign a unique HCPCS code for the test; and
(B) publicly report the payment rate for the test.
(3) Establishment of unique identifier for certain tests
For purposes of tracking and monitoring, if a laboratory or a manufacturer requests a unique identifier for an advanced diagnostic laboratory test (as so defined) or a laboratory test that is cleared or approved by the Food and Drug Administration, the Secretary shall utilize a means to uniquely track such test through a mechanism such as a HCPCS code or modifier.
(f) Input from clinicians and technical experts
(1) In general
The Secretary shall consult with an expert outside advisory panel, established by the Secretary not later than July 1, 2015, composed of an appropriate selection of individuals with expertise, which may include molecular pathologists, researchers, and individuals with expertise in laboratory science or health economics, in issues related to clinical diagnostic laboratory tests, which may include the development, validation, performance, and application of such tests, to provide—
(A) input on—
(i) the establishment of payment rates under this section for new clinical diagnostic laboratory tests, including whether to use crosswalking or gapfilling processes to determine payment for a specific new test; and
(ii) the factors used in determining coverage and payment processes for new clinical diagnostic laboratory tests; and
(B) recommendations to the Secretary under this section.
(2) Compliance with chapter 10 of title 5
The panel shall be subject to
(3) Continuation of annual meeting
The Secretary shall continue to convene the annual meeting described in
(g) Coverage
(1) Issuance of coverage policies
(A) In general
A medicare administrative contractor shall only issue a coverage policy with respect to a clinical diagnostic laboratory test in accordance with the process for making a local coverage determination (as defined in
(B) No effect on national coverage determination process
This paragraph shall not apply to the national coverage determination process (as defined in
(C) Effective date
This paragraph shall apply to coverage policies issued on or after January 1, 2015.
(2) Designation of one or more medicare administrative contractors for clinical diagnostic laboratory tests
The Secretary may designate one or more (not to exceed 4) medicare administrative contractors to either establish coverage policies or establish coverage policies and process claims for payment for clinical diagnostic laboratory tests, as determined appropriate by the Secretary.
(h) Implementation
(1) Implementation
There shall be no administrative or judicial review under
(2) Administration
(3) Funding
For purposes of implementing this section, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(i) Transitional rule
During the period beginning on April 1, 2014, and ending on December 31, 2016, with respect to advanced diagnostic laboratory tests under this part, the Secretary shall use the methodologies for pricing, coding, and coverage in effect on the day before April 1, 2014, which may include cross-walking or gapfilling methods.
(Aug. 14, 1935, ch. 531, title XVIII, §1834A, as added
Editorial Notes
Amendments
2023—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(ii).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(B)(iii).
2022—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(ii).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(B)(iii).
Subsec. (f)(2).
2021—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(ii).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(B)(iii).
2020—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(ii).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B).
2019—Subsec. (a)(1).
Subsec. (a)(4).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(ii).
Statutory Notes and Related Subsidiaries
Monitoring of Medicare Expenditures and Implementation of New Payment System for Laboratory Tests
"(A) publicly release an annual analysis of the top 25 laboratory tests by expenditures under title XVIII of the Social Security Act [
"(B) conduct analyses the Inspector General determines appropriate with respect to the implementation and effect of the new payment system for laboratory tests under section 1834A of the Social Security Act [
1 So in original. Probably should be preceded by "laboratory".
§1395n. Procedure for payment of claims of providers of services
(a) Conditions for payment for services described in section 1395k(a)(2) of this title
Except as provided in subsections (b), (c), and (e), payment for services described in
(1) written request, signed by such individual, except in cases in which the Secretary finds it impracticable for the individual to do so, is filed for such payment in such form, in such manner and by such person or persons as the Secretary may by regulation prescribe, no later than the close of the period ending 1 calendar year after the date of service; and
(2) a physician, or, in the case of services described in subparagraph (A), a physician, a nurse practitioner or clinical nurse specialist (as those terms are defined in
(A) in the case of home health services (i) such services are or were required because the individual is or was confined to his home (except when receiving items and services referred to in
(B) in the case of medical and other health services, except services described in subparagraphs (B), (C), and (D) of
(C) in the case of outpatient physical therapy services or outpatient occupational therapy services, (i) such services are or were required because the individual needed physical therapy services or occupational therapy services, respectively, (ii) a plan for furnishing such services has been established by a physician or by the qualified physical therapist or qualified occupational therapist, respectively, providing such services and is periodically reviewed by a physician, and (iii) such services are or were furnished while the individual is or was under the care of a physician;
(D) in the case of outpatient speech pathology services, (i) such services are or were required because the individual needed speech pathology services, (ii) a plan for furnishing such services has been established by a physician or by the speech pathologist providing such services and is periodically reviewed by a physician, and (iii) such services are or were furnished while the individual is or was under the care of a physician;
(E) in the case of comprehensive outpatient rehabilitation facility services, (i) such services are or were required because the individual needed skilled rehabilitation services, (ii) a plan for furnishing such services has been established and is periodically reviewed by a physician, and (iii) such services are or were furnished while the individual is or was under the care of a physician; and
(F) in the case of partial hospitalization services, (i) the individual would require inpatient psychiatric care in the absence of such services, (ii) an individualized, written plan for furnishing such services has been established by a physician and is reviewed periodically by a physician, and (iii) such services are or were furnished while the individual is or was under the care of a physician.
For purposes of this section, the term "provider of services" shall include a clinic, rehabilitation agency, or public health agency if, in the case of a clinic or rehabilitation agency, such clinic or agency meets the requirements of
To the extent provided by regulations, the certification and recertification requirements of paragraph (2) shall be deemed satisfied where, at a later date, a physician, nurse practitioner, clinical nurse specialist, or physician assistant (as the case may be) makes a certification of the kind provided in subparagraph (A) or (B) of paragraph (2) (whichever would have applied), but only where such certification is accompanied by such medical and other evidence as may be required by such regulations. With respect to the certification required by paragraph (2) for home health services furnished to any individual by a home health agency (other than an agency which is a governmental entity) and with respect to the establishment and review of a plan for such services, the Secretary shall prescribe regulations which shall become effective no later than July 1, 1981 (or in the case of regulations to implement the amendments made by section 3708 of the CARES Act the Secretary shall prescribe regulations which shall become effective no later than 6 months after March 27, 2020), and which prohibit a physician, nurse practitioner, clinical nurse specialist, or physician assistant who has a significant ownership interest in, or a significant financial or contractual relationship with, such home health agency from performing such certification and from establishing or reviewing such plan, except that such prohibition shall not apply with respect to a home health agency which is a sole community home health agency (as determined by the Secretary). For purposes of the preceding sentence, service by a physician, nurse practitioner, clinical nurse specialist, or physician assistant as an uncompensated officer or director of a home health agency shall not constitute having a significant ownership interest in, or a significant financial or contractual relationship with, such agency. For purposes of documentation for physician certification and recertification made under paragraph (2) on or after January 1, 2019 or no later than 6 months after March 27, 2020, for purposes of documentation for certification and recertification made under paragraph (2) by a nurse practitioner, clinical nurse specialist, or physician assistant,,1 and made with respect to home health services furnished by a home health agency, in addition to using documentation in the medical record of the physician, nurse practitioner, clinical nurse specialist, or physician assistant who so certifies or the medical record of the acute or post-acute care facility (in the case that home health services were furnished to an individual who was directly admitted to the home health agency from such a facility), the Secretary may use documentation in the medical record of the home health agency as supporting material, as appropriate to the case involved. For purposes of paragraph (2)(A), an individual shall be considered to be "confined to his home" if the individual has a condition, due to an illness or injury, that restricts the ability of the individual to leave his or her home except with the assistance of another individual or the aid of a supportive device (such as crutches, a cane, a wheelchair, or a walker), or if the individual has a condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be considered "confined to his home", the condition of the individual should be such that there exists a normal inability to leave home and that leaving home requires a considerable and taxing effort by the individual. Any absence of an individual from the home attributable to the need to receive health care treatment, including regular absences for the purpose of participating in therapeutic, psychosocial, or medical treatment in an adult day-care program that is licensed or certified by a State, or accredited, to furnish adult day-care services in the State shall not disqualify an individual from being considered to be "confined to his home". Any other absence of an individual from the home shall not so disqualify an individual if the absence is of infrequent or of relatively short duration. For purposes of the preceding sentence, any absence for the purpose of attending a religious service shall be deemed to be an absence of infrequent or short duration. In applying paragraph (1), the Secretary may specify exceptions to the 1 calendar year period specified in such paragraph.
(b) Conditions for payment for services described in section 1395x(s) of this title
(1) Payment may also be made to any hospital for services described in
(2) Payment may also be made on the basis of an itemized bill to an individual for services described in paragraph (1) of this subsection if (A) payment cannot be made under such paragraph (1) solely because the hospital does not elect, in accordance with
(c) Collection of charges from individuals for services specified in section 1395x(s) of this title
Notwithstanding the provisions of this section and
(d) Payment to Federal provider of services or other Federal agencies prohibited
Subject to
(e) Payment to fund designated by medical staff or faculty of medical school
For purposes of services (1) which are inpatient hospital services by reason of paragraph (7) of
(A) such hospital has an agreement with the Secretary under
(B) the Secretary has received written assurances that (i) such payment will be used by such fund solely for the improvement of care to patients in such hospital or for educational or charitable purposes and (ii) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged provision will be made for return of any moneys incorrectly collected).
(Aug. 14, 1935, ch. 531, title XVIII, §1835, as added
Editorial Notes
References in Text
The amendments made by section 3708 of the CARES Act, referred to in subsec. (a), are the amendments made by section 3708 of
Amendments
2020—Subsec. (a).
Subsec. (a)(2).
Subsec. (a)(2)(A)(ii), (iii).
Subsec. (a)(2)(A)(iv).
2018—Subsec. (a).
2010—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(2)(A)(iv).
2008—Subsec. (a).
2003—Subsec. (a).
2000—Subsec. (a).
1997—Subsec. (a)(2)(A).
Subsec. (c).
1990—Subsec. (c).
1989—Subsec. (a)(2)(G), (H).
Subsec. (c).
1988—Subsec. (a)(2)(G).
Subsec. (a)(2)(H).
1987—Subsec. (a).
Subsec. (a)(2)(C)(i).
Subsec. (a)(2)(F).
1986—Subsec. (a).
Subsec. (a)(2)(C).
1984—Subsec. (a).
Subsec. (a)(2)(B), (C).
Subsec. (a)(2)(C)(ii).
Subsec. (a)(2)(D).
Subsec. (e)(2).
1983—Subsec. (e).
1981—Subsec. (a)(2)(A).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
1980—Subsec. (a).
Subsec. (a)(2)(A).
Subsec. (a)(2)(D)(ii).
Subsec. (a)(2)(E).
1976—Subsec. (d).
1972—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2)(C).
Subsec. (a)(2)(D).
Subsec. (c).
Subsec. (e).
1968—Subsec. (a).
Subsec. (a)(2).
Subsec. (a)(2)(B).
Subsec. (a)(2)(C).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Secretary of Health and Human Services to prescribe regulations to apply the amendments made by
Effective Date of 2010 Amendment
Amendment by section 6404(a)(2)(B) of
Amendment by section 6405(b)(2) of
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by section 4201(c)(1) of
Amendment by section 4615(a) of
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by section 203(d)(1) of
Amendment by section 205(d) of
Effective Date of 1987 Amendment
Amendment by section 4024(b) of
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Amendment by section 2336(a) of
Amendment by section 2354(b)(1), (8), (9) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by section 2122(a)(1) of
Effective Date of 1980 Amendment
Amendment by section 930(e), (j) of
Amendment by section 933(b) of
Effective Date of 1972 Amendment
Amendment by section 204(b) of
Amendment by section 227(e)(2) of
Amendment by section 251(b)(2) of
Amendment by section 281(f) of
Effective Date of 1968 Amendment
Amendment by section 126(b) of
Amendment by section 129(c)(9)(A), (B) of
Amendment by section 133(e) of
Regulations
Secretary of Health and Human Services required to provide, not later than 90 days after July 18, 1984, for revision of regulations as may be required to reflect amendment to subsec. (a) by section 2336(b) of
MedPAC Study on Direct Access to Physical Therapy Services
"(a)
"(b)
"(c)
"(1) without regard to any requirement that—
"(A) an individual be under the care of (or referred by) a physician; or
"(B) services be provided under the supervision of a physician; and
"(2) by allowing a physician or a qualified physical therapist to satisfy any requirement for—
"(A) certification and recertification; and
"(B) establishment and periodic review of a plan of care."
Home Health Prospective Payment Demonstration Project
§1395o. Eligible individuals
(a) In general
Every individual who—
(1) is entitled to hospital insurance benefits under part A, or
(2) has attained age 65 and is a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment under this part,
is eligible to enroll in the insurance program established by this part.
(b) Individuals eligible for immunosuppressive drug coverage
(1) In general
Except as provided under paragraph (2), every individual whose entitlement to insurance benefits under part A ends (whether before, on, or after January 1, 2023) by reason of
(2) Exception if other coverage is available
(A) In general
An individual described in paragraph (1) shall not be eligible for enrollment in the program for purposes of coverage described in such paragraph with respect to any period in which the individual, as determined in accordance with subparagraph (B)—
(i) is enrolled in a group health plan or group or individual health insurance coverage, as such terms are defined in
(ii) is enrolled for coverage under the TRICARE for Life program under
(iii) is enrolled under a State plan (or waiver of such plan) under subchapter XIX and is eligible to receive benefits for immunosuppressive drugs described in this subsection under such plan (or such waiver);
(iv) is enrolled under a State child health plan (or waiver of such plan) under subchapter XXI and is eligible to receive benefits for such drugs under such plan (or such waiver); or
(v)(I) is enrolled in the patient enrollment system of the Department of Veterans Affairs established and operated under
(II) is not required to enroll under section 1705 of such title to receive immunosuppressive drugs described in this subsection; or
(III) is otherwise eligible under a provision of title 38, other than section 1710 of such title to receive immunosuppressive drugs described in this subsection.
(B) Eligibility determinations
(i) In general
The Secretary, in coordination with the Commissioner of Social Security, shall establish a process for determining whether an individual described in paragraph (1) who is to be enrolled or deemed to be enrolled in the medical insurance program described in such paragraph meets the requirements for such enrollment under this subsection, including the requirement that the individual not be enrolled in other coverage as described in subparagraph (A).
(ii) Attestation regarding other coverage
The process established under clause (i) shall include, at a minimum, a requirement that—
(I) the individual provide to the Commissioner an attestation that the individual is not enrolled and does not expect to enroll in such other coverage; and
(II) the individual notify the Commissioner within 60 days of enrollment in such other coverage.
(Aug. 14, 1935, ch. 531, title XVIII, §1836, as added
Editorial Notes
Amendments
2020—
1972—
Statutory Notes and Related Subsidiaries
Persons Convicted of Subversive Activities
§1395p. Enrollment periods
(a) Generally; regulations
An individual may enroll in the insurance program established by this part only in such manner and form as may be prescribed by regulations, and only during an enrollment period prescribed in or under this section.
(b) Repealed. Pub. L. 96–499, title IX, §945(a), Dec. 5, 1980, 94 Stat. 2642
(c) Initial general enrollment period; eligible individuals before March 1, 1966
In the case of individuals who first satisfy paragraph (1) or (2) of
(d) Eligible individuals on or after March 1, 1966
In the case of an individual who first satisfies paragraph (1) or (2) of
(e) General enrollment period
There shall be a general enrollment period during the period beginning on January 1 and ending on March 31 of each year.
(f) Individuals deemed enrolled in medical insurance program
Any individual—
(1) who is eligible under
(2) whose initial enrollment period under subsection (d) begins after March 31, 1973, and
(3) who is residing in the United States, exclusive of Puerto Rico,
shall be deemed to have enrolled in the medical insurance program established by this part.
(g) Commencement of enrollment period
All of the provisions of this section shall apply to individuals satisfying subsection (f), except that—
(1) in the case of an individual who satisfies subsection (f) by reason of entitlement to disability insurance benefits described in
(2)(A) in the case of an individual who is entitled to monthly benefits under
(B) in the case of an individual who is not entitled to benefits under
(3) in the case of an individual who would otherwise satisfy subsection (f) but does not establish his entitlement to hospital insurance benefits until after the last day of his initial enrollment period (as defined in subsection (d) of this section), his enrollment shall be deemed to have occurred on the first day of the earlier of the then current or immediately succeeding general enrollment period (as defined in subsection (e) of this section).
(h) Waiver of enrollment period requirements where individual's rights were prejudiced by administrative error or inaction
In any case where the Secretary finds that an individual's enrollment or nonenrollment in the insurance program established by this part or part A pursuant to
(i) Special enrollment periods
(1) In the case of an individual who—
(A) at the time the individual first satisfies paragraph (1) or (2) of
(B) has elected not to enroll (or to be deemed enrolled) under this section during the individual's initial enrollment period,
there shall be a special enrollment period described in paragraph (3). In the case of an individual not described in the previous sentence who has not attained the age of 65, at the time the individual first satisfies paragraph (1) of
(2) In the case of an individual who—
(A)(i) has enrolled (or has been deemed to have enrolled) in the medical insurance program established under this part during the individual's initial enrollment period, or (ii) is an individual described in paragraph (1)(A);
(B) has enrolled in such program during any subsequent special enrollment period under this subsection during which the individual was not enrolled in a group health plan described in
(C) has not terminated enrollment under this section at any time at which the individual is not enrolled in such a group health plan by reason of the individual's (or individual's spouse's) current employment status,
there shall be a special enrollment period described in paragraph (3). In the case of an individual not described in the previous sentence who has not attained the age of 65, has enrolled (or has been deemed to have enrolled) in the medical insurance program established under this part during the individual's initial enrollment period, or is an individual described in the second sentence of paragraph (1), has enrolled in such program during any subsequent special enrollment period under this subsection during which the individual was not enrolled in a large group health plan (as that term is defined in
(3)(A) The special enrollment period referred to in the first sentences of paragraphs (1) and (2) is the period including each month during any part of which the individual is enrolled in a group health plan described in
(B) The special enrollment period referred to in the second sentences of paragraphs (1) and (2) is the period including each month during any part of which the individual is enrolled in a large group health plan (as that term is defined in
(4)(A) In the case of an individual who is entitled to benefits under part A pursuant to
(i) who at the time the individual first satisfies paragraph (1) of
(I) is enrolled in a group health plan described in
(II) has elected not to enroll (or to be deemed enrolled) under this section during the individual's initial enrollment period; and
(ii) whose continuous enrollment under such group health plan is involuntarily terminated at a time when the enrollment under the plan is not by reason of the individual's current employment or by reason of the current employment of a member of the individual's family,
there shall be a special enrollment period described in subparagraph (B).
(B) The special enrollment period referred to in subparagraph (A) is the 6-month period beginning on the first day of the month which includes the date of the enrollment termination described in subparagraph (A)(ii).
(j) Special rules for individuals with ALS
In applying this section in the case of an individual who is entitled to benefits under part A pursuant to the operation of
(1) The initial enrollment period under subsection (d) shall begin on the first day of the first month in which the individual satisfies the requirement of
(2) In applying subsection (g)(1), the initial enrollment period shall begin on the first day of the first month of entitlement to disability insurance benefits referred to in such subsection.
(k) Special enrollment period for certain volunteers serving outside United States
(1) In the case of an individual who—
(A) at the time the individual first satisfies paragraph (1) or (2) of
(B) has terminated enrollment under this section during a month in which the individual is described in paragraph (3),
there shall be a special enrollment period described in paragraph (2).
(2) The special enrollment period described in this paragraph is the 6-month period beginning on the first day of the month which includes the date that the individual is no longer described in paragraph (3).
(3) For purposes of paragraph (1), an individual described in this paragraph is an individual who—
(A) is serving as a volunteer outside of the United States through a program—
(i) that covers at least a 12-month period; and
(ii) that is sponsored by an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; and
(B) demonstrates health insurance coverage while serving in the program.
(l) Special enrollment period for disabled TRICARE beneficiaries
(1) In the case of any individual who is a covered beneficiary (as defined in
(2) The special enrollment period described in this paragraph, with respect to an individual, is the 12-month period beginning on the day after the last day of the initial enrollment period of the individual or, if later, the 12-month period beginning with the month the individual is notified of enrollment under this section.
(3) In the case of an individual who enrolls during the special enrollment period provided under paragraph (1), the coverage period under this part shall begin on the first day of the month in which the individual enrolls, or, at the option of the individual, the first month after the end of the individual's initial enrollment period.
(4) An individual may only enroll during the special enrollment period provided under paragraph (1) one time during the individual's lifetime.
(5) The Secretary shall ensure that the materials relating to coverage under this part that are provided to an individual described in paragraph (1) prior to the individual's initial enrollment period contain information concerning the impact of not enrolling under this part, including the impact on health care benefits under the TRICARE program under
(6) The Secretary of Defense shall collaborate with the Secretary of Health and Human Services and the Commissioner of Social Security to provide for the accurate identification of individuals described in paragraph (1). The Secretary of Defense shall provide such individuals with notification with respect to this subsection. The Secretary of Defense shall collaborate with the Secretary of Health and Human Services and the Commissioner of Social Security to ensure appropriate follow up pursuant to any notification provided under the preceding sentence.
(m) Special enrollment periods for exceptional circumstances
Beginning January 1, 2023, the Secretary may establish special enrollment periods in the case of individuals who satisfy paragraph (1) or (2) of
(n) Enrollment for individuals only eligible for coverage of immunosuppressive drugs
(1) Any individual who is eligible for coverage of immunosuppressive drugs under
(2) An individual described in paragraph (1) whose entitlement for hospital insurance benefits under part A ends by reason of
(3) An individual described in paragraph (1) whose entitlement for hospital insurance benefits under part A ends by reason of
(4) The Secretary shall establish a process under which an individual described in paragraph (1) whose other coverage described in
(o) Special enrollment period for certain Postal Service annuitants and family members
(1) In the case of an individual who—
(A) as of January 1, 2024, is—
(i) a Postal Service annuitant who is entitled to benefits under part A of this subchapter, but excluding an individual who is eligible to enroll under such part under
(ii) a member of family (as defined in
(B) is not enrolled under this part, the individual may elect to be enrolled under this part during a special enrollment period during the 6-month period beginning on April 1, 2024.
(2) In this subsection, the term "Postal Service annuitant" means an annuitant enrolled in a health benefits plan under
(Aug. 14, 1935, ch. 531, title XVIII, §1837, as added
Editorial Notes
References in Text
Section 501 of the Internal Revenue Code of 1986, referred to in subsec. (k)(3)(A)(ii), is classified to
Amendments
2022—Subsec. (o).
2020—
Subsec. (j)(1).
Subsec. (m).
Subsec. (n).
2010—Subsec. (l).
2006—Subsec. (k).
2000—Subsec. (j).
1997—Subsec. (i)(1) to (3).
Subsec. (i)(4).
1994—Subsec. (i)(1).
Subsec. (i)(1)(A).
Subsec. (i)(2).
Subsec. (i)(2)(B), (C).
Subsec. (i)(3)(A).
Subsec. (i)(3)(B).
1989—Subsec. (i)(1).
Subsec. (i)(2).
Subsec. (i)(3).
1986—Subsec. (i)(1).
Subsec. (i)(1)(A).
Subsec. (i)(2).
Subsec. (i)(2)(A).
Subsec. (i)(2)(B).
Subsec. (i)(2)(C), (D).
Subsec. (i)(3).
1984—Subsec. (g)(1).
Subsec. (i).
1981—Subsec. (e).
Subsec. (g)(3).
1980—Subsec. (b).
Subsec. (e).
Subsec. (g)(1).
Subsec. (g)(3).
1972—Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsecs. (f), (g).
Subsec. (h).
1968—Subsec. (b)(1).
Subsec. (d).
Subsec. (e).
1966—Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
[
Effective Date of 2006 Amendment
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1997 Amendment
Effective Date of 1994 Amendment
Effective Date of 1989 Amendment
Amendment by section 6202(b)(4)(C) of
Effective Date of 1986 Amendment
Amendment by
Amendment by
"(i) The amendments made by paragraph (2) [amending this section] shall apply to enrollments in months beginning with the first effective month (as defined in clause (ii)), except that in the case of any individual who would have a special enrollment period under section 1837(i) of the Social Security Act [
"(ii) For purposes of clause (i), the term 'first effective month' means the first month that begins more than 90 days after the date of the enactment of this Act [Apr. 7, 1986]."
Effective Date of 1984 Amendment
"(A) The amendments made by subsections (b) and (c) [amending this section and
"(B) For purposes of subparagraph (A), the term 'first effective month' means the first month which begins more than 90 days after the date of the enactment of this Act [July 18, 1984]."
Amendment by section 2354(b)(10) of
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1972 Amendment
Effective Date of 1968 Amendment
Medicare Part B Special Enrollment Period
"(1)
"(2)
Extension Through March 31, 1968 of 1967 General Enrollment Period
Enrollment Before Oct. 1, 1966, of Eligible Individuals Failing for Good Cause To Enroll Before June 1, 1966; Commencement of Coverage Period
"(1) an individual was eligible to enroll under section 1837(c) of the Social Security Act [
"(2) it is shown to the satisfaction of the Secretary of Health, Education, and Welfare [now Health and Human Services] that there was good cause for such failure to enroll before June 1, 1966,
such individual may enroll pursuant to this subsection at any time before October 1, 1966. The determination of what constitutes good cause for purposes of the preceding sentence shall be made in accordance with regulations of the Secretary. In the case of any individual who enrolls pursuant to this subsection, the coverage period (within the meaning of section 1838 of the Social Security Act [
1 So in original. Probably should be "involuntarily".
§1395q. Coverage period
(a) Commencement
The period during which an individual is entitled to benefits under the insurance program established by this part (hereinafter referred to as his "coverage period") shall begin on whichever of the following is the latest:
(1) July 1, 1966, or (in the case of a disabled individual who has not attained age 65) July 1, 1973; or
(2)(A) in the case of an individual who enrolls pursuant to subsection (d) of
(B) in the case of an individual who first satisfies such paragraph in a month beginning before January 2023 and who enrolls pursuant to such subsection (d)—
(i) in such month in which he first satisfies such paragraph, the first day of the month following the month in which he so enrolls,
(ii) in the month following such month in which he first satisfies such paragraph, the first day of the second month following the month in which he so enrolls, or
(iii) more than one month following such month in which he satisfies such paragraph, the first day of the third month following the month in which he so enrolls,
(C) in the case of an individual who first satisfies such paragraph in a month beginning on or after January 1, 2023, and who enrolls pursuant to such subsection (d) in such month in which he first satisfies such paragraph or in any subsequent month of his initial enrollment period, the first day of the month following the month in which he so enrolls, or
(D) in the case of an individual who enrolls pursuant to subsection (e) of
(i) before January 1, 2023, the July 1 following the month in which he so enrolls; or
(ii) on or after January 1, 2023, the first day of the month following the month in which he so enrolls; or
(3) in the case of an individual who is deemed to have enrolled—
(A) on or before the last day of the third month of his initial enrollment period, the first day of the month in which he first meets the applicable requirements of
(B) on or after the first day of the fourth month of his initial enrollment period, and where such month begins—
(i) before January 1, 2023, as prescribed under subparagraphs (B)(i), (B)(ii), (B)(iii), and (D)(i) of paragraph (2), or
(ii) on or after January 1, 2023, as prescribed under subparagraphs (C) and (D)(ii) of paragraph (2).
(b) Continuation
An individual's coverage period shall continue until his enrollment has been terminated—
(1) by the filing of notice that the individual no longer wishes to participate in the insurance program established by this part, or
(2) for nonpayment of premiums.
The termination of a coverage period under paragraph (1) shall (except as otherwise provided in
Where an individual who is deemed to have enrolled for medical insurance pursuant to
(c) Termination
In the case of an individual satisfying paragraph (1) of
(d) Payment of expenses incurred during coverage period
No payments may be made under this part with respect to the expenses of an individual unless such expenses were incurred by such individual during a period which, with respect to him, is a coverage period.
(e) Commencement of coverage for special enrollment periods
Notwithstanding subsection (a), in the case of an individual who enrolls during a special enrollment period pursuant to
(1) in any month of the special enrollment period in which the individual is at any time enrolled in a plan (specified in subparagraph (A) or (B), as applicable, of
(2) in any other month of the special enrollment period, the coverage period shall begin on the first day of the month following the month in which the individual so enrolls.
(f) Commencement of coverage for certain volunteers serving outside United States
Notwithstanding subsection (a), in the case of an individual who enrolls during a special enrollment period pursuant to
(g) Special enrollment periods for exceptional circumstances
Notwithstanding subsection (a), in the case of an individual who enrolls during a special enrollment period pursuant to
(h) Coverage period for individuals only eligible for coverage of immunosuppressive drugs
In the case of an individual described in
(1) In the case of such an individual who is deemed to have enrolled in part B for coverage of immunosuppressive drugs under
(2) In the case of such an individual who enrolls (or reenrolls, if applicable) in part B for coverage of immunosuppressive drugs under paragraph (2) or (4) of
(3) The provisions of subsections (b) and (d) shall apply with respect to an individual described in paragraph (1) or (2).
(4) In addition to the reasons for termination under subsection (b), the coverage period of an individual described in paragraph (1) or (2) shall end when the individual becomes entitled to benefits under this subchapter under subsection (a) or (b) of
(5) The Secretary may conduct public education activities to raise awareness of the availability of more comprehensive, individual health insurance coverage (as defined in
(i) Coverage period for certain Postal Service annuitants and family members
Notwithstanding subsection (a), in the case of an individual who enrolls during the special enrollment period pursuant to
(Aug. 14, 1935, ch. 531, title XVIII, §1838, as added
Editorial Notes
Amendments
2022—Subsec. (i).
2020—Subsec. (a)(2).
Subsec. (a)(3).
"(A) in the case of an individual who is deemed to have enrolled on or before the last day of the third month of his initial enrollment period, the first day of the month in which he first meets the applicable requirements of
"(B) in the case of an individual who is deemed to have enrolled on or after the first day of the fourth month of his initial enrollment period, as prescribed under subparagraphs (B), (C), (D), and (E) of paragraph (2) of this subsection."
Subsec. (b).
Subsec. (c).
Subsec. (g).
Subsec. (h).
2006—Subsec. (f).
2003—Subsec. (a)(1).
1997—Subsec. (e).
1994—Subsec. (e).
"(1) in the first month of the special enrollment period, the coverage period shall begin on the first day of that month, or
"(2) in a month after the first month of the special enrollment period, the coverage period shall begin on the first day of the month following the month in which the individual so enrolls."
1986—Subsec. (b).
Subsec. (e).
"(1) subparagraph (A) of
"(A) before the month in which he attains the age of 70, the coverage period shall begin on the first day of the month in which he has attained the age of 70, or
"(B) in or after the month in which he attains the age of 70, the coverage period shall begin on the first day of the month following the month in which he so enrolls; or
"(2) subparagraph (B) of
"(A) in the first month of the special enrollment period, the coverage period shall begin on the first day of such month, or
"(B) in a month after the first month of the special enrollment period, the coverage period shall begin on the first day of the month following the month in which he so enrolls."
1984—Subsec. (e).
1981—Subsec. (a)(2)(E).
Subsec. (b).
1980—Subsec. (a)(2)(E).
Subsec. (b).
1972—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (b).
Subsecs. (c), (d).
1968—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1984 Amendment
For effective date of amendment by
Effective Date of 1981 Amendment
Amendment by section 2106(b)(2) of
Amendment by section 2151(a)(3) of
Effective Date of 1980 Amendment
Amendment by section 945(c)(1) of
Amendment by section 947(b) of
Effective Date of 1972 Amendment
Effective Date of 1968 Amendment
Amendment by
Coverage Period; Termination Dates
"(1) shall terminate at the close of December 31, 1967, if he filed his notice of termination before January 1, 1968, or
"(2) shall terminate at the close of March 31, 1968, if he filed his notice of termination after December 31, 1967, and before April 1, 1968.
An individual whose coverage period terminated pursuant to paragraph (1) at the close of December 31, 1967, may, notwithstanding section 1837(b)(2) of such Act [
Extension of 1967 General Enrollment Period Through March 31, 1968
Extension of the general enrollment period under
Coverage Period for Individuals Becoming Eligible in March 1966 Who Enroll in May 1966
Commencement of Coverage Period of Certain Enrollees
Commencement of coverage period upon enrollment before Oct. 1, 1966 of eligible individuals failing for good cause to enroll before June 1, 1966, see section 102(b) of
§1395r. Amount of premiums for individuals enrolled under this part
(a) Determination of monthly actuarial rates and premiums
(1) The Secretary shall, during September of 1983 and of each year thereafter, determine the monthly actuarial rate for enrollees age 65 and over which shall be applicable for the succeeding calendar year. Subject to paragraphs (5), (6), and (7), such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such calendar year with respect to those enrollees age 65 and older will equal one-half of the total of the benefits and administrative costs which he estimates will be payable from the Federal Supplementary Medical Insurance Trust Fund for services performed and related administrative costs incurred in such calendar year with respect to such enrollees. In calculating the monthly actuarial rate, the Secretary shall include an appropriate amount for a contingency margin. In applying this paragraph there shall not be taken into account additional payments under
(2) The monthly premium of each individual enrolled under this part for each month after December 1983 shall be the amount determined under paragraph (3), adjusted as required in accordance with subsections (b), (c), (f), and (i), and to reflect any credit provided under
(3) The Secretary, during September of each year, shall determine and promulgate a monthly premium rate for the succeeding calendar year that (except as provided in subsection (g)) is equal to 50 percent of the monthly actuarial rate for enrollees age 65 and over, determined according to paragraph (1), for that succeeding calendar year. Whenever the Secretary promulgates the dollar amount which shall be applicable as the monthly premium rate for any period, he shall, at the time such promulgation is announced, issue a public statement setting forth the actuarial assumptions and bases employed by him in arriving at the amount of an adequate actuarial rate for enrollees age 65 and older as provided in paragraph (1).
(4) The Secretary shall also, during September of 1983 and of each year thereafter, determine the monthly actuarial rate for disabled enrollees under age 65 which shall be applicable for the succeeding calendar year. Such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such calendar year with respect to disabled enrollees under age 65 will equal one-half of the total of the benefits and administrative costs which he estimates will be payable from the Federal Supplementary Medical Insurance Trust Fund for services performed and related administrative costs incurred in such calendar year with respect to such enrollees. In calculating the monthly actuarial rate under this paragraph, the Secretary shall include an appropriate amount for a contingency margin.
(5)(A) In applying this part (including subsection (i) and
(B) Subsection (f) shall continue to be applied to paragraph (6)(A) (during a repayment month, as described in paragraph (6)(B)) and without regard to the application of subparagraph (A).
(6)(A) With respect to a repayment month (as described in subparagraph (B)), the monthly premium otherwise established under paragraph (3) shall be increased by, subject to subparagraph (D), $3.
(B) For purposes of this paragraph, a repayment month is a month during a year, beginning with 2016, for which a balance due amount is computed under subparagraph (C) as greater than zero.
(C) For purposes of this paragraph, the balance due amount computed under this subparagraph, with respect to a month, is the amount estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services to be equal to—
(i) the amount transferred under subsections (d)(1) and (e)(1) of
(ii) the amount that is equal to the aggregate reduction, for all individuals enrolled under this part, in the income related monthly adjustment amount as a result of the application of paragraphs (5) and (7); minus
(iii) the amounts payable under this part as a result of the application of this paragraph for preceding months.
(D) If the balance due amount computed under subparagraph (C), without regard to this subparagraph, for December of a year would be less than zero, the Chief Actuary of the Centers for Medicare & Medicaid Services shall estimate, and the Secretary shall apply, a reduction to the dollar amount increase applied under subparagraph (A) for each month during such year in a manner such that the balance due amount for January of the subsequent year is equal to zero.
(7)(A) In applying this part (including subsection (i) and
(i) the monthly actuarial rate for enrollees age 65 and over for 2020; plus
(ii) 25 percent of the difference between such rate for 2020 and the preliminary monthly actuarial rate for enrollees age 65 and over for 2021 (as estimated under subparagraph (B)).
(B) For purposes of subparagraph (A)(ii), the Secretary shall estimate a preliminary monthly actuarial rate for enrollees age 65 and over for 2021 using the methodology described in paragraph (1) and as if subparagraph (A) of this paragraph did not apply. The Secretary shall make the estimate under the previous sentence as if the transfers described in
(b) Increase in monthly premium
In the case of an individual whose coverage period began pursuant to an enrollment after his initial enrollment period (determined pursuant to subsection (c) or (d) of
(c) Premiums rounded to nearest multiple of ten cents
If any monthly premium determined under the foregoing provisions of this section is not a multiple of 10 cents, such premium shall be rounded to the nearest multiple of 10 cents.
(d) "Continuous period of eligibility" defined
For purposes of subsection (b) (and
(e) State payment of part B late enrollment premium increases
(1) Upon the request of a State (or any appropriate State or local governmental entity specified by the Secretary), the Secretary may enter into an agreement with the State (or such entity) under which the State (or such entity) agrees to pay on a quarterly or other periodic basis to the Secretary (to be deposited in the Treasury to the credit of the Federal Supplementary Medical Insurance Trust Fund) an amount equal to the amount of the part B late enrollment premium increases with respect to the premiums for eligible individuals (as defined in paragraph (3)(A)(i)). The Secretary shall enter into an agreement with the United States Postal Service under which the United States Postal Service agrees to pay on a quarterly or other periodic basis to the Secretary (to be deposited in the Treasury to the credit of the Federal Supplementary Medical Insurance Trust Fund) an amount equal to the amount of the part B late enrollment premium increases with respect to the premiums for eligible individuals (as defined in paragraph (3)(A)(ii))..1
(2) No part B late enrollment premium increase shall apply to an eligible individual for premiums for months for which the amount of such an increase is payable under an agreement under paragraph (1).
(3) In this subsection:
(A) The term "eligible individual" means an individual who is enrolled under this part B 1 and who—
(i) in the case of an agreement entered into under the first sentence of paragraph (1), is within a class of individuals specified in such agreement; and
(ii) in the case of an agreement entered into under the second sentence of paragraph (1), is so enrolled under this part pursuant to the special enrollment period under
(B) The term "part B late enrollment premium increase" means any increase in a premium as a result of the application of subsection (b).
(f) Limitation on increase in monthly premium
For any calendar year after 1988, if an individual is entitled to monthly benefits under
(g) Exclusions from estimate of benefits and administrative costs
In estimating the benefits and administrative costs which will be payable from the Federal Supplementary Medical Insurance Trust Fund for a year for purposes of determining the monthly premium rate under subsection (a)(3), the Secretary shall exclude an estimate of any benefits and administrative costs attributable to—
(1) the application of
(2) the medicare prescription drug discount card and transitional assistance program under
(h) Potential application of comparative cost adjustment in CCA areas
(1) In general
Certain individuals who are residing in a CCA area under section 1395w–29 3 of this title who are not enrolled in an MA plan under part C may be subject to a premium adjustment under subsection (f) of such section for months in which the CCA program under such section is in effect in such area.
(2) No effect on late enrollment penalty or income-related adjustment in subsidies
Nothing in this subsection or section 1395w–29(f) 3 of this title shall be construed as affecting the amount of any premium adjustment under subsection (b) or (i). Subsection (f) shall be applied without regard to any premium adjustment referred to in paragraph (1).
(3) Implementation
In order to carry out a premium adjustment under this subsection and section 1395w–29(f) 3 of this title (insofar as it is effected through the manner of collection of premiums under
(A) at the beginning of each year, the name, social security account number, and the amount of the premium adjustment (if any) for each individual enrolled under this part for each month during the year; and
(B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year.
(i) Reduction in premium subsidy based on income
(1) In general
In the case of an individual whose modified adjusted gross income exceeds the threshold amount under paragraph (2), the monthly amount of the premium subsidy applicable to the premium under this section for a month after December 2006 shall be reduced (and the monthly premium shall be increased) by the monthly adjustment amount specified in paragraph (3).
(2) Threshold amount
For purposes of this subsection, subject to paragraph (6), the threshold amount is—
(A) except as provided in subparagraph (B), $80,000 (or, beginning with 2018, $85,000), and
(B) in the case of a joint return, twice the amount applicable under subparagraph (A) for the calendar year.
(3) Monthly adjustment amount
(A) In general
Subject to subparagraph (B), the monthly adjustment amount specified in this paragraph for an individual for a month in a year is equal to the product of the following:
(i) Sliding scale percentage
Subject to paragraph (6), the applicable percentage specified in the applicable table in subparagraph (C) for the individual minus 25 percentage points.
(ii) Unsubsidized part B premium amount
(I) 200 percent of the monthly actuarial rate for enrollees age 65 and over (as determined under subsection (a)(1) for the year); plus
(II) 4 times the amount of the increase in the monthly premium under subsection (a)(6) for a month in the year (or, with respect to an individual enrolled under
(B) 3-year phase in
The monthly adjustment amount specified in this paragraph for an individual for a month in a year before 2009 is equal to the following percentage of the monthly adjustment amount specified in subparagraph (A):
(i) For 2007, 33 percent.
(ii) For 2008, 67 percent.
(C) Applicable percentage
(i) In general
(I) Subject to paragraphs (5) and (6), for years before 2018:
If the modified adjusted gross income is: | The applicable percentage is: |
---|---|
More than $80,000 but not more than $100,000 | 35 percent |
More than $100,000 but not more than $150,000 | 50 percent |
More than $150,000 but not more than $200,000 | 65 percent |
More than $200,000 | 80 percent. |
(II) Subject to paragraph (5), for 2018:
If the modified adjusted gross income is: | The applicable percentage is: |
---|---|
More than $85,000 but not more than $107,000 | 35 percent |
More than $107,000 but not more than $133,500 | 50 percent |
More than $133,500 but not more than $160,000 | 65 percent |
More than $160,000 | 80 percent. |
(III) Subject to paragraph (5), for years beginning with 2019:
If the modified adjusted gross income is: | The applicable percentage is: |
---|---|
More than $85,000 but not more than $107,000 | 35 percent |
More than $107,000 but not more than $133,500 | 50 percent |
More than $133,500 but not more than $160,000 | 65 percent |
More than $160,000 but less than $500,000 | 80 percent |
At least $500,000 | 85 percent. |
(ii) Joint returns
In the case of a joint return, clause (i) shall be applied by substituting dollar amounts which are twice the dollar amounts otherwise applicable under clause (i) for the calendar year except, with respect to the dollar amounts applied in the last row of the table under subclause (III) of such clause (and the second dollar amount specified in the second to last row of such table), clause (i) shall be applied by substituting dollar amounts which are 150 percent of such dollar amounts for the calendar year.
(iii) Married individuals filing separate returns
In the case of an individual who—
(I) is married as of the close of the taxable year (within the meaning of section 7703 of the Internal Revenue Code of 1986) but does not file a joint return for such year, and
(II) does not live apart from such individual's spouse at all times during the taxable year,
clause (i) shall be applied by reducing each of the dollar amounts otherwise applicable under such clause for the calendar year by the threshold amount for such year applicable to an unmarried individual.
(4) Modified adjusted gross income
(A) In general
For purposes of this subsection, the term "modified adjusted gross income" means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)—
(i) determined without regard to sections 135, 911, 931, and 933 of such Code; and
(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code.
In the case of an individual filing a joint return, any reference in this subsection to the modified adjusted gross income of such individual shall be to such return's modified adjusted gross income.
(B) Taxable year to be used in determining modified adjusted gross income
(i) In general
In applying this subsection for an individual's premiums in a month in a year, subject to clause (ii) and subparagraph (C), the individual's modified adjusted gross income shall be such income determined for the individual's last taxable year beginning in the second calendar year preceding the year involved.
(ii) Temporary use of other data
If, as of October 15 before a calendar year, the Secretary of the Treasury does not have adequate data for an individual in appropriate electronic form for the taxable year referred to in clause (i), the individual's modified adjusted gross income shall be determined using the data in such form from the previous taxable year. Except as provided in regulations prescribed by the Commissioner of Social Security in consultation with the Secretary, the preceding sentence shall cease to apply when adequate data in appropriate electronic form are available for the individual for the taxable year referred to in clause (i), and proper adjustments shall be made to the extent that the premium adjustments determined under the preceding sentence were inconsistent with those determined using such taxable year.
(iii) Non-filers
In the case of individuals with respect to whom the Secretary of the Treasury does not have adequate data in appropriate electronic form for either taxable year referred to in clause (i) or clause (ii), the Commissioner of Social Security, in consultation with the Secretary, shall prescribe regulations which provide for the treatment of the premium adjustment with respect to such individual under this subsection, including regulations which provide for—
(I) the application of the highest applicable percentage under paragraph (3)(C) to such individual if the Commissioner has information which indicates that such individual's modified adjusted gross income might exceed the threshold amount for the taxable year referred to in clause (i), and
(II) proper adjustments in the case of the application of an applicable percentage under subclause (I) to such individual which is inconsistent with such individual's modified adjusted gross income for such taxable year.
(C) Use of more recent taxable year
(i) In general
The Commissioner of Social Security in consultation with the Secretary of the Treasury shall establish a procedures under which an individual's modified adjusted gross income shall, at the request of such individual, be determined under this subsection—
(I) for a more recent taxable year than the taxable year otherwise used under subparagraph (B), or
(II) by such methodology as the Commissioner, in consultation with such Secretary, determines to be appropriate, which may include a methodology for aggregating or disaggregating information from tax returns in the case of marriage or divorce.
(ii) Standard for granting requests
A request under clause (i)(I) to use a more recent taxable year may be granted only if—
(I) the individual furnishes to such Commissioner with respect to such year such documentation, such as a copy of a filed Federal income tax return or an equivalent document, as the Commissioner specifies for purposes of determining the premium adjustment (if any) under this subsection; and
(II) the individual's modified adjusted gross income for such year is significantly less than such income for the taxable year determined under subparagraph (B) by reason of the death of such individual's spouse, the marriage or divorce of such individual, or other major life changing events specified in regulations prescribed by the Commissioner in consultation with the Secretary.
(5) Inflation adjustment
(A) In general
Subject to subparagraph (C), in the case of any calendar year beginning after 2007 (other than 2018 and 2019), each dollar amount in paragraph (2) or (3) shall be increased by an amount equal to—
(i) such dollar amount, multiplied by
(ii) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2006 (or, in the case of a calendar year beginning with 2020, August 2018).
(B) Rounding
If any dollar amount after being increased under subparagraph (A) or (C) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000.
(C) Treatment of adjustments for certain higher income individuals
(i) In general
Subparagraph (A) shall not apply with respect to each dollar amount in paragraph (3) of $500,000.
(ii) Adjustment beginning 2028
In the case of any calendar year beginning after 2027, each dollar amount in paragraph (3) of $500,000 shall be increased by an amount equal to—
(I) such dollar amount, multiplied by
(II) the percentage (if any) by which the average of the Consumer Price Index for all urban consumers (United States city average) for the 12-month period ending with August of the preceding calendar year exceeds such average for the 12-month period ending with August 2026.
(6) Temporary adjustment to income thresholds
Notwithstanding any other provision of this subsection, during the period beginning on January 1, 2011, and ending on December 31, 2017—
(A) the threshold amount otherwise applicable under paragraph (2) shall be equal to such amount for 2010; and
(B) the dollar amounts otherwise applicable under paragraph (3)(C)(i) shall be equal to such dollar amounts for 2010.
(7) Joint return defined
For purposes of this subsection, the term "joint return" has the meaning given to such term by section 7701(a)(38) of the Internal Revenue Code of 1986.
(j) Determination of premium for individuals only eligible for coverage of immunosuppressive drugs
The Secretary shall, during September of each year (beginning with 2022), determine and promulgate a monthly premium rate for the succeeding calendar year for individuals enrolled only for the purpose of coverage of immunosuppressive drugs under
(Aug. 14, 1935, ch. 531, title XVIII, §1839, as added
Editorial Notes
References in Text
The Railroad Retirement Act of 1974, referred to in subsec. (f), is act Aug. 29, 1935, ch. 812, as amended generally by
The Internal Revenue Code of 1986, referred to in subsec. (i)(3)(C)(iii)(I), (4)(A), (7), is classified generally to Title 26, Internal Revenue Code.
Amendments
2022—Subsec. (e)(1).
Subsec. (e)(3)(A).
2020—Subsec. (a)(1).
Subsec. (a)(6)(C)(i).
Subsec. (a)(6)(C)(ii).
Subsec. (a)(7).
Subsec. (b).
Subsec. (d).
Subsec. (f).
Subsec. (i)(3)(A)(ii)(I).
Subsec. (i)(3)(A)(ii)(II).
Subsec. (j).
2018—Subsec. (i)(3)(C)(i)(II).
Subsec. (i)(3)(C)(i)(III).
Subsec. (i)(3)(C)(ii).
Subsec. (i)(5)(A).
Subsec. (i)(5)(B).
Subsec. (i)(5)(C).
2015—Subsec. (a)(1).
Subsec. (a)(5), (6).
Subsec. (i)(2)(A).
Subsec. (i)(3)(A)(i).
Subsec. (i)(3)(A)(ii).
Subsec. (i)(3)(C)(i).
Subsec. (i)(5)(A).
Subsec. (i)(5)(A)(ii).
Subsec. (i)(6).
2010—Subsec. (b).
Subsec. (i)(2).
Subsec. (i)(3)(A)(i).
Subsec. (i)(6), (7).
2009—Subsec. (a)(1).
2006—Subsec. (b).
Subsec. (i)(3)(B).
Subsec. (i)(3)(B)(i).
Subsec. (i)(3)(B)(ii).
Subsec. (i)(3)(B)(iii), (iv).
"(iii) For 2009, 60 percent.
"(iv) for 2010, 80 percent."
2003—Subsec. (a)(2).
Subsec. (a)(4).
Subsec. (b).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
2000—Subsec. (a)(2).
1998—Subsec. (a)(3).
Subsec. (g).
1997—Subsec. (a)(2).
Subsec. (a)(3).
"(A) the monthly actuarial rate for enrollees age 65 and over, determined according to paragraph (1) of this subsection, for that calendar year, or
"(B) the monthly premium rate most recently promulgated by the Secretary under this paragraph, increased by a percentage determined as follows: The Secretary shall ascertain the primary insurance amount computed under
Subsec. (b).
Subsec. (e).
"(1)(A) Notwithstanding the provisions of subsection (a) of this section, the monthly premium for each individual enrolled under this part for each month after after December 1995 and prior to January 1999 shall be an amount equal to 50 percent of the monthly actuarial rate for enrollees age 65 and over, as determined under subsection (a)(1) of this section and applicable to such month.
"(B) Notwithstanding the provisions of subsection (a) of this section, the monthly premium for each individual enrolled under this part for each month in—
"(i) 1991 shall be $29.90,
"(ii) 1992 shall be $31.80,
"(iii) 1993 shall be $36.60,
"(iv) 1994 shall be $41.10, and
"(v) 1995 shall be $46.10.
"(2) Any increases in premium amounts taking effect prior to January 1998 by reason of paragraph (1) shall be taken into account for purposes of determining increases thereafter under subsection (a)(3) of this section."
Subsec. (e)(1).
Subsec. (g).
1994—Subsec. (b).
Subsec. (g).
1993—Subsec. (e)(1)(A).
Subsec. (e)(2).
1990—Subsec. (e)(1).
1989—Subsec. (a).
Subsec. (b).
Subsec. (e).
Subsec. (e)(1).
Subsec. (g).
1988—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (b).
Subsec. (e)(1).
Subsec. (f).
Subsec. (g).
Subsec. (g)(1)(B)(iii)(I).
Subsec. (g)(1)(B)(iii)(II).
Subsec. (g)(7)(A)(ii).
1987—Subsec. (e).
Subsec. (f)(1).
Subsec. (f)(2).
1986—Subsec. (b).
Subsec. (e).
Subsec. (f)(1).
Subsec. (f)(2).
Subsec. (f)(2)(A).
1984—Subsec. (b).
Subsec. (e).
Subsec. (f).
Subsec. (f)(2)(A).
1983—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (e)(1).
Subsec. (e)(2).
Subsecs. (f), (g).
1982—Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (g).
1981—Subsec. (d).
1980—Subsec. (d).
1977—Subsec. (c)(3)(B).
1975—Subsec. (c)(3).
1972—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
1968—Subsec. (b)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by section 5115(a)(1) of
Effective Date of 2003 Amendment
Amendment by section 222(l)(2)(A) of
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Amendment by section 4581(a) of
Effective Date of 1994 Amendment
Effective Date of 1989 Amendment
Amendment by section 6202(b)(4)(C) of
Amendment by section 6202(c)(2) of
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 9001(c) of
Amendment by section 9319(c)(4) of
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment; Transitional Rule
"(1) the monthly premiums under part A and under part B of title XVIII of the Social Security Act [
"(2) the amount of the Government contributions under section 1844(a)(1) of such Act [
Amendment by
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1975 Amendment
Effective Date of 1968 Amendment
Amendment by
Construction Regarding No Authority To Initiate Application to Years After 2017
Conditional Application to 2017 if No Social Security COLA for 2017
"(1) the reference to '2016' in paragraph (5)(A) of section 1839(a) of the Social Security Act (
"(2) the reference to 'a month during a year, beginning with 2016' in paragraph (6)(B) of section 1839 of such Act (
"(3) the reference to '2016' in subsection (d)(1) of section 1844 of such Act (
Any increase in premiums effected under this subsection shall be in addition to the increase effected by the amendments made by subsection (a) [amending this section]."
No Change in Medicare's Defined Benefit Package
Determination of Premium Amounts by Secretary
"(1) the dollar amount applicable for premiums under part B of title XVIII of such Act [
"(2) the Secretary of Health, Education, and Welfare may determine and promulgate such dollar amount for months after March 1968 and before January 1970 at any time on or before December 31, 1967."
Persons Enrolling Before April 1, 1968, Who Did Not Enroll During Their Initial Enrollment Period
2 So in original. Probably should be followed by a period.
3 See References in Text note below.
§1395s. Payment of premiums
(a) Deductions from section 402 or 423 monthly benefits
(1) In the case of an individual who is entitled to monthly benefits under
(2) The Secretary of the Treasury shall, from time to time, transfer from the Federal Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance Trust Fund to the Federal Supplementary Medical Insurance Trust Fund the aggregate amount deducted under paragraph (1) for the period to which such transfer relates from benefits under
(b) Deductions from railroad retirement annuities or pensions
(1) In the case of an individual who is entitled to receive for a month an annuity under the Railroad Retirement Act of 1974 [
(2) The Secretary of the Treasury shall, from time to time, transfer from the Railroad Retirement Account to the Federal Supplementary Medical Insurance Trust Fund the aggregate amount deducted under paragraph (1) for the period to which such transfer relates. Such transfers shall be made on the basis of a certification by the Railroad Retirement Board and shall be appropriately adjusted to the extent that prior transfers were too great or too small.
(c) Portion of monthly premium in excess of deducted amount
If an individual to whom subsection (a) or (b) applies estimates that the amount which will be available for deduction under such subsection for any premium payment period will be less than the amount of the monthly premiums for such period, he may (under regulations) pay to the Secretary such portion of the monthly premiums for such period as he desires.
(d) Deductions from civil service retirement annuities
(1) In the case of an individual receiving an annuity under subchapter III of
(2) The Secretary of the Treasury shall, from time to time, but not less often than quarterly, transfer from the Civil Service Retirement and Disability Fund, or the account (if any) applicable in the case of such other law administered by the Director of the Office of Personnel Management, to the Federal Supplementary Medical Insurance Trust Fund the aggregate amount deducted under paragraph (1) for the period to which such transfer relates. Such transfer shall be made on the basis of a certification by the Director of the Office of Personnel Management and shall be appropriately adjusted to the extent that prior transfers were too great or too small.
(e) Manner and time of payment prescribed by Secretary
In the case of an individual who participates in the insurance program established by this part but with respect to whom none of the preceding provisions of this section applies, or with respect to whom subsection (c) applies, the premiums shall be paid to the Secretary at such times, and in such manner, as the Secretary shall by regulations prescribe.
(f) Deposit of amounts in Treasury
Amounts paid to the Secretary under subsection (c) or (e) shall be deposited in the Treasury to the credit of the Federal Supplementary Medical Insurance Trust Fund.
(g) Premium payability period
In the case of an individual who participates in the insurance program established by this part, premiums shall be payable for the period commencing with the first month of his coverage period and ending with the month in which he dies or, if earlier, in which his coverage under such program terminates.
(h) Exempted monthly benefits
In the case of an individual who is enrolled under the program established by this part as a member of a coverage group to which an agreement with a State entered into pursuant to
(i) Adjustments for individuals enrolled in Medicare+Choice plans
In the case of an individual enrolled in a Medicare+Choice plan, the Secretary shall provide for necessary adjustments of the monthly beneficiary premium to reflect 80 percent of any reduction elected under
(Aug. 14, 1935, ch. 531, title XVIII, §1840, as added
Editorial Notes
References in Text
The Railroad Retirement Act of 1974, referred to in subsec. (b)(1), is act Aug. 29, 1935, ch. 812, as amended generally by
Amendments
2003—Subsec. (i).
2000—Subsec. (i).
1994—Subsec. (a)(1).
Subsec. (a)(2).
1989—Subsec. (i).
1988—Subsec. (i).
1985—Subsec. (d)(1).
1984—Subsec. (a)(2).
Subsec. (d)(1).
Subsec. (d)(2).
1974—Subsec. (b)(1).
1972—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsecs. (h), (i).
1968—Subsec. (e).
1966—Subsec. (i).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2003 Amendment
Amendment by
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 2354(b)(11) of
Amendment by section 2663(j)(2)(F)(ii) of
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1972 Amendment
1 See References in Text note below.
§1395t. Federal Supplementary Medical Insurance Trust Fund
(a) Creation; deposits; fund transfers
There is hereby created on the books of the Treasury of the United States a trust fund to be known as the "Federal Supplementary Medical Insurance Trust Fund" (hereinafter in this section referred to as the "Trust Fund"). The Trust Fund shall consist of such gifts and bequests as may be made as provided in
(b) Board of Trustees; composition; meetings; duties
With respect to the Trust Fund, there is hereby created a body to be known as the Board of Trustees of the Trust Fund (hereinafter in this section referred to as the "Board of Trustees") composed of the Commissioner of Social Security, the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, all ex officio, and of two members of the public (both of whom may not be from the same political party), who shall be nominated by the President for a term of four years and subject to confirmation by the Senate. A member of the Board of Trustees serving as a member of the public and nominated and confirmed to fill a vacancy occurring during a term shall be nominated and confirmed only for the remainder of such term. An individual nominated and confirmed as a member of the public may serve in such position after the expiration of such member's term until the earlier of the time at which the member's successor takes office or the time at which a report of the Board is first issued under paragraph (2) after the expiration of the member's term. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees (hereinafter in this section referred to as the "Managing Trustee"). The Administrator of the Centers for Medicare & Medicaid Services shall serve as the Secretary of the Board of Trustees. The Board of Trustees shall meet not less frequently than once each calendar year. It shall be the duty of the Board of Trustees to—
(1) Hold the Trust Fund;
(2) Report to the Congress not later than the first day of April of each year on the operation and status of the Trust Fund during the preceding fiscal year and on its expected operation and status during the current fiscal year and the next 2 fiscal years; Each report provided under paragraph (2) beginning with the report in 2005 shall include the information specified in section 801(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.2
(3) Report immediately to the Congress whenever the Board is of the opinion that the amount of the Trust Fund is unduly small; and
(4) Review the general policies followed in managing the Trust Fund, and recommend changes in such policies, including necessary changes in the provisions of law which govern the way in which the Trust Fund is to be managed.
The report provided for in paragraph (2) shall include a statement of the assets of, and the disbursements made from, the Trust Fund during the preceding fiscal year, an estimate of the expected income to, and disbursements to be made from, the Trust Fund during the current fiscal year and each of the next 2 fiscal years, and a statement of the actuarial status of the Trust Fund. Such report shall also include an actuarial opinion by the Chief Actuary of the Centers for Medicare & Medicaid Services certifying that the techniques and methodologies used are generally accepted within the actuarial profession and that the assumptions and cost estimates used are reasonable. Such report shall be printed as a House document of the session of the Congress to which the report is made. A person serving on the Board of Trustees shall not be considered to be a fiduciary and shall not be personally liable for actions taken in such capacity with respect to the Trust Fund.
(c) Investment of Trust Fund by Managing Trustee
It shall be the duty of the Managing Trustee to invest such portion of the Trust Fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under
(d) Authority of Managing Trustee to sell obligations
Any obligations acquired by the Trust Fund (except public-debt obligations issued exclusively to the Trust Fund) may be sold by the Managing Trustee at the market price, and such public-debt obligations may be redeemed at par plus accrued interest.
(e) Interest on or proceeds from sale or redemption of obligations
The interest on, and the proceeds from the sale or redemption of, any obligations held in the Trust Fund shall be credited to and form a part of the Trust Fund.
(f) Transfers to other Funds
There shall be transferred periodically (but not less often than once each fiscal year) to the Trust Fund from the Federal Old-Age and Survivors Insurance Trust Fund and from the Federal Disability Insurance Trust Fund amounts equivalent to the amounts not previously so transferred which the Secretary of Health and Human Services shall have certified as overpayments (other than amounts so certified to the Railroad Retirement Board) pursuant to
(g) Payments from Trust Fund of amounts provided for by this part or with respect to administrative expenses
The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health and Human Services certifies are necessary to make the payments provided for by this part, and the payments with respect to administrative expenses in accordance with
(h) Payments from Trust Fund of costs incurred by Director of Office of Personnel Management
The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health and Human Services certifies are necessary to pay the costs incurred by the Director of the Office of Personnel Management in making deductions pursuant to
(i) Payments from Trust Fund of costs incurred by Railroad Retirement Board
The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health and Human Services certifies are necessary to pay the costs incurred by the Railroad Retirement Board for services performed pursuant to section 1395s(b)(1) and
(Aug. 14, 1935, ch. 531, title XVIII, §1841, as added
Editorial Notes
References in Text
Section 9008(c) of the Patient Protection and Affordable Care Act of 2009, referred to in subsec. (a), probably means section 9008(c) of
Section 801(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (b)(2), is section 801(a) of
Amendments
2010—Subsec. (a).
2003—Subsec. (a).
Subsec. (b).
Subsec. (b)(2).
Subsec. (g).
Subsec. (h).
Subsec. (i).
1994—Subsec. (b).
1989—Subsecs. (a), (b).
1988—Subsec. (a).
Subsec. (b).
1986—Subsec. (b).
1984—Subsec. (c).
Subsecs. (f), (g).
Subsec. (h).
Subsec. (i).
1983—Subsec. (b).
1978—Subsec. (b).
1972—Subsec. (a).
Subsec. (h).
Subsec. (i).
1968—Subsec. (b)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 2354(b)(2), (11), (12) of
Amendment by section 2663(j)(2)(F)(iii) of
Effective Date of 1983 Amendment
Amendment by sections 154(c) and 341(c) of
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by section 132(e) of
Amendment by section 263(d)(4), (e) of
Disposal of Funds in Federal Hospital Insurance Catastrophic Coverage Reserve Fund
Due Date for 1983 Report on Operation and Status of Trust Fund
Notwithstanding subsec. (b)(2) of this section, the annual report of the Board of Trustees of the Trust Fund required for calendar year 1983 under this section may be filed at any time not later than forty-five days after Apr. 20, 1983, see section 154(d) of
1 See References in Text note below.
2 So in original. See 2003 Amendment note below.
§§1395t–1, 1395t–2. Repealed. Pub. L. 101–234, title II, §202(a), Dec. 13, 1989, 103 Stat. 1981
Section 1395t–1, act Aug. 14, 1935, ch. 531, title XVIII, §1841A, as added July 1, 1988,
Section 1395t–2, act Aug. 14, 1935, ch. 531, title XVIII, §1841B, as added July 1, 1988,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1990, see section 202(b) of
§1395u. Provisions relating to the administration of part B
(a) In general
The administration of this part shall be conducted through contracts with medicare administrative contractors under
(b) Determination of reasonable charges
(1) Repealed.
(2)(A), (B) Repealed.
(C) In the case of residents of nursing facilities who receive services described in clause (i) or (ii) of
(3) The Secretary—
(A) shall take such action as may be necessary to assure that, where payment under this part for a service is on a cost basis, the cost is reasonable cost (as determined under
(B) shall take such action as may be necessary to assure that, where payment under this part for a service is on a charge basis, such charge will be reasonable and not higher than the charge applicable, for a comparable service and under comparable circumstances, to the policyholders and subscribers of the medicare administrative contractor, and such payment will (except as otherwise provided in
(i) on the basis of an itemized bill; or
(ii) on the basis of an assignment under the terms of which (I) the reasonable charge is the full charge for the service, (II) the physician or other person furnishing such service agrees not to charge (and to refund amounts already collected) for services for which payment under this subchapter is denied under
but (in the case of bills submitted, or requests for payment made, after March 1968) only if the bill is submitted, or a written request for payment is made in such other form as may be permitted under regulations, no later than the period ending 1 calendar year after the date of service;
(C) to (E) Repealed.
(F) shall take such action as may be necessary to assure that where payment under this part for a service rendered is on a charge basis, such payment shall be determined on the basis of the charge that is determined in accordance with this section on the basis of customary and prevailing charge levels in effect at the time the service was rendered or, in the case of services rendered more than 12 months before the year in which the bill is submitted or request for payment is made, on the basis of such levels in effect for the 12-month period preceding such year;
(G) shall, for a service that is furnished with respect to an individual enrolled under this part, that is not paid on an assignment-related basis, and that is subject to a limiting charge under
(i) determine, prior to making payment, whether the amount billed for such service exceeds the limiting charge applicable under
(ii) notify the physician, supplier, or other person periodically (but not less often than once every 30 days) of determinations that amounts billed exceeded such applicable limiting charges; and
(iii) provide for prompt response to inquiries of physicians, suppliers, and other persons concerning the accuracy of such limiting charges for their services;
(H) shall implement—
(i) programs to recruit and retain physicians as participating physicians in the area served by the medicare administrative contractor, including educational and outreach activities and the use of professional relations personnel to handle billing and other problems relating to payment of claims of participating physicians; and
(ii) programs to familiarize beneficiaries with the participating physician program and to assist such beneficiaries in locating participating physicians; 1
(I) Repealed.
(J), (K) Repealed.
(L) shall monitor and profile physicians' billing patterns within each area or locality and provide comparative data to physicians whose utilization patterns vary significantly from other physicians in the same payment area or locality.
In determining the reasonable charge for services for purposes of this paragraph, there shall be taken into consideration the customary charges for similar services generally made by the physician or other person furnishing such services, as well as the prevailing charges in the locality for similar services. No charge may be determined to be reasonable in the case of bills submitted or requests for payment made under this part after December 31, 1970, if it exceeds the higher of (i) the prevailing charge recognized by the carrier and found acceptable by the Secretary for similar services in the same locality in administering this part on December 31, 1970, or (ii) the prevailing charge level that, on the basis of statistical data and methodology acceptable to the Secretary, would cover 75 percent of the customary charges made for similar services in the same locality during the 12-month period ending on the June 30 last preceding the start of the calendar year in which the service is rendered. In the case of physicians' services the prevailing charge level determined for purposes of clause (ii) of the preceding sentence for any twelve-month period (beginning after June 30, 1973) specified in clause (ii) of such sentence may not exceed (in the aggregate) the level determined under such clause for the fiscal year ending June 30, 1973, or (with respect to physicians' services furnished in a year after 1987) the level determined under this sentence (or under any other provision of law affecting the prevailing charge level) for the previous year except to the extent that the Secretary finds, on the basis of appropriate economic index data, that such higher level is justified by year-to-year economic changes. With respect to power-operated wheelchairs for which payment may be made in accordance with
(4)(A)(i) In determining the prevailing charge levels under the third and fourth sentences of paragraph (3) for physicians' services furnished during the 15-month period beginning July 1, 1984, the Secretary shall not set any level higher than the same level as was set for the 12-month period beginning July 1, 1983.
(ii)(I) In determining the prevailing charge levels under the third and fourth sentences of paragraph (3) for physicians' services furnished during the 8-month period beginning May 1, 1986, by a physician who is not a participating physician (as defined in subsection (h)(1)) at the time of furnishing the services, the Secretary shall not set any level higher than the same level as was set for the 12-month period beginning July 1, 1983.
(II) In determining the prevailing charge levels under the fourth sentence of paragraph (3) for physicians' services furnished during the 8-month period beginning May 1, 1986, by a physician who is a participating physician (as defined in subsection (h)(1)) at the time of furnishing the services, the Secretary shall permit an additional one percentage point increase in the increase otherwise permitted under that sentence.
(iii) In determining the maximum allowable prevailing charges which may be recognized consistent with the index described in the fourth sentence of paragraph (3) for physicians' services furnished on or after January 1, 1987, by participating physicians, the Secretary shall treat the maximum allowable prevailing charges recognized as of December 31, 1986, under such sentence with respect to participating physicians as having been justified by economic changes.
(iv) The reasonable charge for physicians' services furnished on or after January 1, 1987, and before January 1, 1992, by a nonparticipating physician shall be no greater than the applicable percent of the prevailing charge levels established under the third and fourth sentences of paragraph (3) (or under any other applicable provision of law affecting the prevailing charge level). In the previous sentence, the term "applicable percent" means for services furnished (I) on or after January 1, 1987, and before April 1, 1988, 96 percent, (II) on or after April 1, 1988, and before January 1, 1989, 95.5 percent, and (III) on or after January 1, 1989, 95 percent.
(v) In determining the prevailing charge levels under the third and fourth sentences of paragraph (3) for physicians' services furnished during the 3-month period beginning January 1, 1988, the Secretary shall not set any level higher than the same level as was set for the 12-month period beginning January 1, 1987.
(vi) Before each year (beginning with 1989), the Secretary shall establish a prevailing charge floor for primary care services (as defined in subsection (i)(4)) equal to 60 percent of the estimated average prevailing charge levels based on the best available data (determined, under the third and fourth sentences of paragraph (3) and under paragraph (4), without regard to this clause and without regard to physician specialty) for such service for all localities in the United States (weighted by the relative frequency of the service in each locality) for the year.
(vii) Beginning with 1987, the percentage increase in the MEI (as defined in subsection (i)(3)) for each year shall be the same for nonparticipating physicians as for participating physicians.
(B)(i) In determining the reasonable charge under paragraph (3) for physicians' services furnished during the 15-month period beginning July 1, 1984, the customary charges shall be the same customary charges as were recognized under this section for the 12-month period beginning July 1, 1983.
(ii) In determining the reasonable charge under paragraph (3) for physicians' services furnished during the 8-month period beginning May 1, 1986, by a physician who is not a participating physician (as defined in subsection (h)(1)) at the time of furnishing the services—
(I) if the physician was not a participating physician at any time during the 12-month period beginning on October 1, 1984, the customary charges shall be the same customary charges as were recognized under this section for the 12-month period beginning July 1, 1983, and
(II) if the physician was a participating physician at any time during the 12-month period beginning on October 1, 1984, the physician's customary charges shall be determined based upon the physician's actual charges billed during the 12-month period ending on March 31, 1985.
(iii) In determining the reasonable charge under paragraph (3) for physicians' services furnished during the 3-month period beginning January 1, 1988, the customary charges shall be the same customary charges as were recognized under this section for the 12-month period beginning January 1, 1987.
(iv) In determining the reasonable charge under paragraph (3) for physicians' services (other than primary care services, as defined in subsection (i)(4)) furnished during 1991, the customary charges shall be the same customary charges as were recognized under this section for the 9-month period beginning April 1, 1990. In a case in which subparagraph (F) applies (relating to new physicians) so as to limit the customary charges of a physician during 1990 to a percent of prevailing charges, the previous sentence shall not prevent such limit on customary charges under such subparagraph from increasing in 1991 to a higher percent of such prevailing charges.
(C) In determining the prevailing charge levels under the third and fourth sentences of paragraph (3) for physicians' services furnished during periods beginning after September 30, 1985, the Secretary shall treat the level as set under subparagraph (A)(i) as having fully provided for the economic changes which would have been taken into account but for the limitations contained in subparagraph (A)(i).
(D)(i) In determining the customary charges for physicians' services furnished during the 8-month period beginning May 1, 1986, or the 12-month period beginning January 1, 1987, by a physician who was not a participating physician (as defined in subsection (h)(1)) on September 30, 1985, the Secretary shall not recognize increases in actual charges for services furnished during the 15-month period beginning on July 1, 1984, above the level of the physician's actual charges billed in the 3-month period ending on June 30, 1984.
(ii) In determining the customary charges for physicians' services furnished during the 12-month period beginning January 1, 1987, by a physician who is not a participating physician (as defined in subsection (h)(1)) on April 30, 1986, the Secretary shall not recognize increases in actual charges for services furnished during the 7-month period beginning on October 1, 1985, above the level of the physician's actual charges billed during the 3-month period ending on June 30, 1984.
(iii) In determining the customary charges for physicians' services furnished during the 12-month period beginning January 1, 1987, or January 1, 1988, by a physician who is not a participating physician (as defined in subsection (h)(1)) on December 31, 1986, the Secretary shall not recognize increases in actual charges for services furnished during the 8-month period beginning on May 1, 1986, above the level of the physician's actual charges billed during the 3-month period ending on June 30, 1984.
(iv) In determining the customary charges for a physicians' service furnished on or after January 1, 1988, if a physician was a nonparticipating physician in a previous year (beginning with 1987), the Secretary shall not recognize any amount of such actual charges (for that service furnished during such previous year) that exceeds the maximum allowable actual charge for such service established under subsection (j)(1)(C).
(E)(i) For purposes of this part for physicians' services furnished in 1987, the percentage increase in the MEI is 3.2 percent.
(ii) For purposes of this part for physicians' services furnished in 1988, on or after April 1, the percentage increase in the MEI is—
(I) 3.6 percent for primary care services (as defined in subsection (i)(4)), and
(II) 1 percent for other physicians' services.
(iii) For purposes of this part for physicians' services furnished in 1989, the percentage increase in the MEI is—
(I) 3.0 percent for primary care services, and
(II) 1 percent for other physicians' services.
(iv) For purposes of this part for items and services furnished in 1990, after March 31, 1990, the percentage increase in the MEI is—
(I) 0 percent for radiology services, for anesthesia services, and for other services specified in the list referred to in paragraph (14)(C)(i),
(II) 2 percent for other services (other than primary care services), and
(III) such percentage increase in the MEI (as defined in subsection (i)(3)) as would be otherwise determined for primary care services (as defined in subsection (i)(4)).
(v) For purposes of this part for items and services furnished in 1991, the percentage increase in the MEI is—
(I) 0 percent for services (other than primary care services), and
(II) 2 percent for primary care services (as defined in subsection (i)(4)).
(5) Repealed.
(6) No payment under this part for a service provided to any individual shall (except as provided in
(7)(A) In the case of physicians' services furnished to a patient in a hospital with a teaching program approved as specified in
(i) unless—
(I) the physician renders sufficient personal and identifiable physicians' services to the patient to exercise full, personal control over the management of the portion of the case for which the payment is sought,
(II) the services are of the same character as the services the physician furnishes to patients not entitled to benefits under this subchapter, and
(III) at least 25 percent of the hospital's patients (during a representative past period, as determined by the Secretary) who were not entitled to benefits under this subchapter and who were furnished services described in subclauses (I) and (II) paid all or a substantial part of charges (other than nominal charges) imposed for such services; and
(ii) to the extent that the payment is based upon a reasonable charge for the services in excess of the customary charge as determined in accordance with subparagraph (B).
(B) The customary charge for such services in a hospital shall be determined in accordance with regulations issued by the Secretary and taking into account the following factors:
(i) In the case of a physician who is not a teaching physician (as defined by the Secretary), the Secretary shall take into account the amounts the physician charges for similar services in the physician's practice outside the teaching setting.
(ii) In the case of a teaching physician, if the hospital, its physicians, or other appropriate billing entity has established one or more schedules of charges which are collected for medical and surgical services, the Secretary shall base payment under this subchapter on the greatest of—
(I) the charges (other than nominal charges) which are most frequently collected in full or substantial part with respect to patients who were not entitled to benefits under this subchapter and who were furnished services described in subclauses (I) and (II) of subparagraph (A)(i),
(II) the mean of the charges (other than nominal charges) which were collected in full or substantial part with respect to such patients, or
(III) 85 percent of the prevailing charges paid for similar services in the same locality.
(iii) If all the teaching physicians in a hospital agree to have payment made for all of their physicians' services under this part furnished to patients in such hospital on an assignment-related basis, the customary charge for such services shall be equal to 90 percent of the prevailing charges paid for similar services in the same locality.
(C) In the case of physicians' services furnished to a patient in a hospital with a teaching program approved as specified in
(D)(i) In the case of physicians' services furnished to a patient in a hospital with a teaching program approved as specified in
(I) are required due to exceptional medical circumstances,
(II) are performed by team physicians needed to perform complex medical procedures, or
(III) constitute concurrent medical care relating to a medical condition which requires the presence of, and active care by, a physician of another specialty during surgery,
and under such other circumstances as the Secretary determines by regulation to be appropriate.
(ii) For purposes of this subparagraph, the term "assistant at surgery" means a physician who actively assists the physician in charge of a case in performing a surgical procedure.
(iii) The Secretary shall determine appropriate methods of reimbursement of assistants at surgery where such services are reimbursable under this part.
(8)(A)(i) The Secretary shall by regulation—
(I) describe the factors to be used in determining the cases (of particular items or services) in which the application of this subchapter to payment under this part (other than to physicians' services paid under
(II) provide in those cases for the factors to be considered in determining an amount that is realistic and equitable.
(ii) Notwithstanding the determination made in clause (i), the Secretary may not apply factors that would increase or decrease the payment under this part during any year for any particular item or service by more than 15 percent from such payment during the preceding year except as provided in subparagraph (B).
(B) The Secretary may make a determination under this subparagraph that would result in an increase or decrease under subparagraph (A) of more than 15 percent of the payment amount for a year, but only if—
(i) the Secretary's determination takes into account the factors described in subparagraph (C) and any additional factors the Secretary determines appropriate,
(ii) the Secretary's determination takes into account the potential impacts described in subparagraph (D), and
(iii) the Secretary complies with the procedural requirements of paragraph (9).
(C) The factors described in this subparagraph are as follows:
(i) The programs established under this subchapter and subchapter XIX are the sole or primary sources of payment for an item or service.
(ii) The payment amount does not reflect changing technology, increased facility with that technology, or reductions in acquisition or production costs.
(iii) The payment amount for an item or service under this part is substantially higher or lower than the payment made for the item or service by other purchasers.
(D) The potential impacts of a determination under subparagraph (B) on quality, access, and beneficiary liability, including the likely effects on assignment rates and participation rates.
(9)(A) The Secretary shall consult with representatives of suppliers or other individuals who furnish an item or service before making a determination under paragraph (8)(B) with regard to that item or service.
(B) The Secretary shall publish notice of a proposed determination under paragraph (8)(B) in the Federal Register—
(i) specifying the payment amount proposed to be established with respect to an item or service,
(ii) explaining the factors and data that the Secretary took into account in determining the payment amount so specified, and
(iii) explaining the potential impacts described in paragraph (8)(D).
(C) After publication of the notice required by subparagraph (B), the Secretary shall allow not less than 60 days for public comment on the proposed determination.
(D)(i) Taking into consideration the comments made by the public, the Secretary shall publish in the Federal Register a final determination under paragraph (8)(B) with respect to the payment amount to be established with respect to the item or service.
(ii) A final determination published pursuant to clause (i) shall explain the factors and data that the Secretary took into consideration in making the final determination.
(10)(A)(i) In determining the reasonable charge for procedures described in subparagraph (B) and performed during the 9-month period beginning on April 1, 1988, the prevailing charge for such procedure shall be the prevailing charge otherwise recognized for such procedure for 1987—
(I) subject to clause (iii), reduced by 2.0 percent, and
(II) further reduced by the applicable percentage specified in clause (ii).
(ii) For purposes of clause (i), the applicable percentage specified in this clause is—
(I) 15 percent, in the case of a prevailing charge otherwise recognized (without regard to this paragraph and determined without regard to physician specialty) that is at least 150 percent of the weighted national average (as determined by the Secretary) of such prevailing charges for such procedure for all localities in the United States for 1987;
(II) 0 percent, in the case of a prevailing charge that does not exceed 85 percent of such weighted national average; and
(III) in the case of any other prevailing charge, a percent determined on the basis of a straight-line sliding scale, equal to 3/13 of a percentage point for each percent by which the prevailing charge exceeds 85 percent of such weighted national average.
(iii) In no case shall the reduction under clause (i) for a procedure result in a prevailing charge in a locality for 1988 which is less than 85 percent of the Secretary's estimate of the weighted national average of such prevailing charges for such procedure for all localities in the United States for 1987 (based upon the best available data and determined without regard to physician specialty) after making the reduction described in clause (i)(I).
(B) The procedures described in this subparagraph are as follows: bronchoscopy, carpal tunnel repair, cataract surgery (including subsequent insertion of an intraocular lens), coronary artery bypass surgery, diagnostic and/or therapeutic dilation and curettage, knee arthroscopy, knee arthroplasty, pacemaker implantation surgery, total hip replacement, suprapubic prostatectomy, transurethral resection of the prostate, and upper gastrointestinal endoscopy.
(C) In the case of a reduction in the reasonable charge for a physicians' service under subparagraph (A), if a nonparticipating physician furnishes the service to an individual entitled to benefits under this part, after the effective date of such reduction, the physician's actual charge is subject to a limit under subsection (j)(1)(D).
(D) There shall be no administrative or judicial review under
(11)(A) In providing payment for cataract eyeglasses and cataract contact lenses, and professional services relating to them, under this part, each carrier shall—
(i) provide for separate determinations of the payment amount for the eyeglasses and lenses and of the payment amount for the professional services of a physician (as defined in
(ii) not recognize as reasonable for such eyeglasses and lenses more than such amount as the Secretary establishes in guidelines relating to the inherent reasonableness of charges for such eyeglasses and lenses.
(B)(i) In determining the reasonable charge under paragraph (3) for a cataract surgical procedure, subject to clause (ii), the prevailing charge for such procedure otherwise recognized for participating and nonparticipating physicians shall be reduced by 10 percent with respect to procedures performed in 1987.
(ii) In no case shall the reduction under clause (i) for a surgical procedure result in a prevailing charge in a locality for a year which is less than 75 percent of the weighted national average of such prevailing charges for such procedure for all the localities in the United States for 1986.
(C)(i) The prevailing charge level determined with respect to A-mode ophthalmic ultrasound procedures may not exceed 5 percent of the prevailing charge level established with respect to extracapsular cataract removal with lens insertion.
(ii) The reasonable charge for an intraocular lens inserted during or subsequent to cataract surgery in a physician's office may not exceed the actual acquisition cost for the lens (taking into account any discount) plus a handling fee (not to exceed 5 percent of such actual acquisition cost).
(D) In the case of a reduction in the reasonable charge for a physicians' service or item under subparagraph (B) or (C), if a nonparticipating physician furnishes the service or item to an individual entitled to benefits under this part after the effective date of such reduction, the physician's actual charge is subject to a limit under subsection (j)(1)(D).
(12) Repealed.
(13)(A) In determining payments under
(B) The Secretary shall require claims for physicians' services for medical direction of nurse anesthetists during the periods in which the provisions of subparagraph (A) apply to indicate the number of such anesthetists being medically directed concurrently at any time during the procedure, the name of each nurse anesthetist being directed, and the type of procedure for which the services are provided.
(14)(A)(i) In determining the reasonable charge for a physicians' service specified in subparagraph (C)(i) and furnished during the 9-month period beginning on April 1, 1990, the prevailing charge for such service shall be the prevailing charge otherwise recognized for such service for 1989 reduced by 15 percent or, if less, 1/3 of the percent (if any) by which the prevailing charge otherwise applied in the locality in 1989 exceeds the locally-adjusted reduced prevailing amount (as determined under subparagraph (B)(i)) for the service.
(ii) In determining the reasonable charge for a physicians' service specified in subparagraph (C)(i) and furnished during 1991, the prevailing charge for such service shall be the prevailing charge otherwise recognized for such service for the period during 1990 beginning on April 1, reduced by the same amount as the amount of the reduction effected under this paragraph (as amended by the Omnibus Budget Reconciliation Act of 1990) for such service during such period.
(B) For purposes of this paragraph:
(i) The "locally-adjusted reduced prevailing amount" for a locality for a physicians' service is equal to the product of—
(I) the reduced national weighted average prevailing charge for the service (specified under clause (ii)), and
(II) the adjustment factor (specified under clause (iii)) for the locality.
(ii) The "reduced national weighted average prevailing charge" for a physicians' service is equal to the national weighted average prevailing charge for the service (specified in subparagraph (C)(ii)) reduced by the percentage change (specified in subparagraph (C)(iii)) for the service.
(iii) The "adjustment factor", for a physicians' service for a locality, is the sum of—
(I) the practice expense component (percent), divided by 100, specified in appendix A (pages 187 through 194) of the Report of the Medicare and Medicaid Health Budget Reconciliation Amendments of 1989, prepared by the Subcommittee on Health and the Environment of the Committee on Energy and Commerce, House of Representatives, (Committee Print 101–M, 101st Congress, 1st Session) for the service, multiplied by the geographic practice cost index value (specified in subparagraph (C)(iv)) for the locality, and
(II) 1 minus the practice expense component (percent), divided by 100.
(C) For purposes of this paragraph:
(i) The physicians' services specified in this clause are the procedures specified (by code and description) in the Overvalued Procedures List for Finance Committee, Revised September 20, 1989, prepared by the Physician Payment Review Commission which specification is of physicians' services that have been identified as overvalued by at least 10 percent based on a comparison of payments for such services under a resource-based relative value scale and of the national average prevailing charges under this part.
(ii) The "national weighted average prevailing charge" specified in this clause, for a physicians' service specified in clause (i), is the national weighted average prevailing charge for the service in 1989 as determined by the Secretary using the best data available.
(iii) The "percentage change" specified in this clause, for a physicians' service specified in clause (i), is the percent difference (but expressed as a positive number) specified for the service in the list referred to in clause (i).
(iv) The geographic practice cost index value specified in this clause for a locality is the Geographic Overhead Costs Index specified for the locality in table 1 of the September 1989 Supplement to the Geographic Medicare Economic Index: Alternative Approaches (prepared by the Urban Institute and the Center for Health Economics Research).
(D) In the case of a reduction in the prevailing charge for a physicians' service under subparagraph (A), if a nonparticipating physician furnishes the service to an individual entitled to benefits under this part, after the effective date of such reduction, the physician's actual charge is subject to a limit under subsection (j)(1)(D).
(15)(A) In determining the reasonable charge for surgery, radiology, and diagnostic physicians' services which the Secretary shall designate (based on their high volume of expenditures under this part) and for which the prevailing charge (but for this paragraph) differs by physician specialty, the prevailing charge for such a service may not exceed the prevailing charge or fee schedule amount for that specialty of physicians that furnish the service most frequently nationally.
(B) In the case of a reduction in the prevailing charge for a physician's service under subparagraph (A), if a nonparticipating physician furnishes the service to an individual entitled to benefits under this part, after the effective date of the reduction, the physician's actual charge is subject to a limit under subsection (j)(1)(D).
(16)(A) In determining the reasonable charge for all physicians' services other than physicians' services specified in subparagraph (B) furnished during 1991, the prevailing charge for a locality shall be 6.5 percent below the prevailing charges used in the locality under this part in 1990 after March 31.
(B) For purposes of subparagraph (A), the physicians' services specified in this subparagraph are as follows:
(i) Radiology, anesthesia and physician pathology services, the technical components of diagnostic tests specified in paragraph (17) and physicians' services specified in paragraph (14)(C)(i).
(ii) Primary care services specified in subsection (i)(4), hospital inpatient medical services, consultations, other visits, preventive medicine visits, psychiatric services, emergency care facility services, and critical care services.
(iii) Partial mastectomy; tendon sheath injections and small joint arthrocentesis; femoral fracture and trochanteric fracture treatments; endotracheal intubation; thoracentesis; thoracostomy; aneurysm repair; cystourethroscopy; transurethral fulguration and resection; tympanoplasty with mastoidectomy; and ophthalmoscopy.
(17) With respect to payment under this part for the technical (as distinct from professional) component of diagnostic tests (other than clinical diagnostic laboratory tests, tests specified in paragraph (14)(C)(i), and radiology services, including portable x-ray services) which the Secretary shall designate (based on their high volume of expenditures under this part), the reasonable charge for such technical component (including the applicable portion of a global service) may not exceed the national median of such charges for all localities, as estimated by the Secretary using the best available data.
(18)(A) Payment for any service furnished by a practitioner described in subparagraph (C) and for which payment may be made under this part on a reasonable charge or fee schedule basis may only be made under this part on an assignment-related basis.
(B) A practitioner described in subparagraph (C) or other person may not bill (or collect any amount from) the individual or another person for any service described in subparagraph (A), except for deductible and coinsurance amounts applicable under this part. No person is liable for payment of any amounts billed for such a service in violation of the previous sentence. If a practitioner or other person knowingly and willfully bills (or collects an amount) for such a service in violation of such sentence, the Secretary may apply sanctions against the practitioner or other person in the same manner as the Secretary may apply sanctions against a physician in accordance with subsection (j)(2) in the same manner as such section applies with respect to a physician. Paragraph (4) of subsection (j) shall apply in this subparagraph in the same manner as such paragraph applies to such section.
(C) A practitioner described in this subparagraph is any of the following:
(i) A physician assistant, nurse practitioner, or clinical nurse specialist (as defined in
(ii) A certified registered nurse anesthetist (as defined in
(iii) A certified nurse-midwife (as defined in
(iv) A clinical social worker (as defined in
(v) A clinical psychologist (as defined by the Secretary for purposes of
(vi) A registered dietitian or nutrition professional.
(vii) A marriage and family therapist (as defined in
(viii) A mental health counselor (as defined in
(D) For purposes of this paragraph, a service furnished by a practitioner described in subparagraph (C) includes any services and supplies furnished as incident to the service as would otherwise be covered under this part if furnished by a physician or as incident to a physician's service.
(19) For purposes of
(c) Prompt payment of claims
(1) Repealed.
(2)(A) Each contract under
(i) which are clean claims, and
(ii) for which payment is not made on a periodic interim payment basis,
within the applicable number of calendar days after the date on which the claim is received.
(B) In this paragraph:
(i) The term "clean claim" means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part.
(ii) The term "applicable number of calendar days" means—
(I) with respect to claims received in the 12-month period beginning October 1, 1986, 30 calendar days,
(II) with respect to claims received in the 12-month period beginning October 1, 1987, 26 calendar days (or 19 calendar days with respect to claims submitted by participating physicians),
(III) with respect to claims received in the 12-month period beginning October 1, 1988, 25 calendar days (or 18 calendar days with respect to claims submitted by participating physicians),
(IV) with respect to claims received in the 12-month period beginning October 1, 1989, and claims received in any succeeding 12-month period ending on or before September 30, 1993, 24 calendar days (or 17 calendar days with respect to claims submitted by participating physicians), and
(V) with respect to claims received in the 12-month period beginning October 1, 1993, and claims received in any succeeding 12-month period, 30 calendar days.
(C) If payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in clause (ii) of subparagraph (B)) after a clean claim (as defined in clause (i) of such subparagraph) is received, interest shall be paid at the rate used for purposes of
(3)(A) Each contract under this section which provides for the disbursement of funds, as described in
(B) In this paragraph, the term "applicable number of calendar days" means—
(i) with respect to claims submitted electronically as prescribed by the Secretary, 13 days, and
(ii) with respect to claims submitted otherwise, 28 days.
(4) Neither a medicare administrative contractor nor the Secretary may impose a fee under this subchapter—
(A) for the filing of claims related to physicians' services,
(B) for an error in filing a claim relating to physicians' services or for such a claim which is denied,
(C) for any appeal under this subchapter with respect to physicians' services,
(D) for applying for (or obtaining) a unique identifier under subsection (r), or
(E) for responding to inquiries respecting physicians' services or for providing information with respect to medical review of such services.
(d) to (f). Repealed. Pub. L. 108–173, title IX, §911(c)(5), Dec. 8, 2003, 117 Stat. 2384
(g) Authority of Railroad Retirement Board to enter into contracts with medicare administrative contractors
The Railroad Retirement Board shall, in accordance with such regulations as the Secretary may prescribe, contract with a medicare administrative contractor or contractors to perform the functions set out in this section with respect to individuals entitled to benefits as qualified railroad retirement beneficiaries pursuant to
(h) Participating physician or supplier; agreement with Secretary; publication of directories; availability; inclusion of program in explanation of benefits; payment of claims on assignment-related basis
(1) Any physician or supplier may voluntarily enter into an agreement with the Secretary to become a participating physician or supplier. For purposes of this section, the term "participating physician or supplier" means a physician or supplier (excluding any provider of services) who, before the beginning of any year beginning with 1984, enters into an agreement with the Secretary which provides that such physician or supplier will accept payment under this part on an assignment-related basis for all items and services furnished to individuals enrolled under this part during such year. In the case of a newly licensed physician or a physician who begins a practice in a new area, or in the case of a new supplier who begins a new business, or in such similar cases as the Secretary may specify, such physician or supplier may enter into such an agreement after the beginning of a year, for items and services furnished during the remainder of the year.
(2) The Secretary shall maintain a toll-free telephone number or numbers at which individuals enrolled under this part may obtain the names, addresses, specialty, and telephone numbers of participating physicians and suppliers and may request a copy of an appropriate directory published under paragraph (4). The Secretary shall, without charge, mail a copy of such directory upon such a request.
(3)(A) In any case in which 2 medicare administrative contractor having a contract under
(B) The Secretary shall establish a procedure whereby an individual enrolled under this part may assign, in an appropriate manner on the form claiming a benefit under this part for an item or service furnished by a participating physician or supplier, the individual's rights of payment under a medicare supplemental policy (described in
(4) At the beginning of each year the Secretary shall publish directories (for appropriate local geographic areas) containing the name, address, and specialty of all participating physicians and suppliers (as defined in paragraph (1)) for that area for that year. Each directory shall be organized to make the most useful presentation of the information (as determined by the Secretary) for individuals enrolled under this part. Each participating physician directory for an area shall provide an alphabetical listing of all participating physicians practicing in the area and an alphabetical listing by locality and specialty of such physicians.
(5)(A) The Secretary shall promptly notify individuals enrolled under this part through an annual mailing of the participation program under this subsection and the publication and availability of the directories and shall make the appropriate area directory or directories available in each district and branch office of the Social Security Administration, in the offices of medicare administrative contractors, and to senior citizen organizations.
(B) The annual notice provided under subparagraph (A) shall include—
(i) a description of the participation program,
(ii) an explanation of the advantages to beneficiaries of obtaining covered services through a participating physician or supplier,
(iii) an explanation of the assistance offered by medicare administrative contractors in obtaining the names of participating physicians and suppliers, and
(iv) the toll-free telephone number under paragraph (2)(A) for inquiries concerning the program and for requests for free copies of appropriate directories.
(6) The Secretary shall provide that the directories shall be available for purchase by the public. The Secretary shall provide that each appropriate area directory is sent to each participating physician located in that area and that an appropriate number of copies of each such directory is sent to hospitals located in the area. Such copies shall be sent free of charge.
(7) The Secretary shall provide that each explanation of benefits provided under this part for services furnished in the United States, in conjunction with the payment of claims under
(A) a prominent reminder of the participating physician and supplier program established under this subsection (including the limitation on charges that may be imposed by such physicians and suppliers and a clear statement of any amounts charged for the particular items or services on the claim involved above the amount recognized under this part),
(B) the toll-free telephone number or numbers, maintained under paragraph (2), at which an individual enrolled under this part may obtain information on participating physicians and suppliers,
(C)(i) an offer of assistance to such an individual in obtaining the names of participating physicians of appropriate specialty and (ii) an offer to provide a free copy of the appropriate participating physician directory, and
(D) in the case of services for which the billed amount exceeds the limiting charge imposed under
(8) The Secretary may refuse to enter into an agreement with a physician or supplier under this subsection, or may terminate or refuse to renew such agreement, in the event that such physician or supplier has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the program or program beneficiaries.
(9) The Secretary may revoke enrollment, for a period of not more than one year for each act, for a physician or supplier under
(i) Definitions
For purposes of this subchapter:
(1) A claim is considered to be paid on an "assignment-related basis" if the claim is paid on the basis of an assignment described in subsection (b)(3)(B)(ii), in accordance with subsection (b)(6)(B), or under the procedure described in
(2) The term "participating physician" refers, with respect to the furnishing of services, to a physician who at the time of furnishing the services is a participating physician (under subsection (h)(1)); the term "nonparticipating physician" refers, with respect to the furnishing of services, to a physician who at the time of furnishing the services is not a participating physician; and the term "nonparticipating supplier or other person" means a supplier or other person (excluding a provider of services) that is not a participating physician or supplier (as defined in subsection (h)(1)).
(3) The term "percentage increase in the MEI" means, with respect to physicians' services furnished in a year, the percentage increase in the medicare economic index (referred to in the fourth sentence of subsection (b)(3)) applicable to such services furnished as of the first day of that year.
(4) The term "primary care services" means physicians' services which constitute office medical services, emergency department services, home medical services, skilled nursing, intermediate care, and long-term care medical services, or nursing home, boarding home, domiciliary, or custodial care medical services.
(j) Monitoring of charges of nonparticipating physicians; sanctions; restitution
(1)(A) In the case of a physician who is not a participating physician for items and services furnished during a portion of the 30-month period beginning July 1, 1984, the Secretary shall monitor the physician's actual charges to individuals enrolled under this part for physicians' services during that portion of that period. If such physician knowingly and willfully bills individuals enrolled under this part for actual charges in excess of such physician's actual charges for the calendar quarter beginning on April 1, 1984, the Secretary may apply sanctions against such physician in accordance with paragraph (2).
(B)(i) During any period (on or after January 1, 1987, and before the date specified in clause (ii)), during which a physician is a nonparticipating physician, the Secretary shall monitor the actual charges of each such physician for physicians' services furnished to individuals enrolled under this part. If such physician knowingly and willfully bills on a repeated basis for such a service an actual charge in excess of the maximum allowable actual charge determined under subparagraph (C) for that service, the Secretary may apply sanctions against such physician in accordance with paragraph (2).
(ii) Clause (i) shall not apply to services furnished after December 31, 1990.
(C)(i) For a particular physicians' service furnished by a nonparticipating physician to individuals enrolled under this part during a year, for purposes of subparagraph (B), the maximum allowable actual charge is determined as follows: If the physician's maximum allowable actual charge for that service in the previous year was—
(I) less than 115 percent of the applicable percent (as defined in subsection (b)(4)(A)(iv)) of the prevailing charge for the year and service involved, the maximum allowable actual charge for the year involved is the greater of the maximum allowable actual charge described in subclause (II) or the charge described in clause (ii), or
(II) equal to, or greater than, 115 percent of the applicable percent (as defined in subsection (b)(4)(A)(iv)) of the prevailing charge for the year and service involved, the maximum allowable actual charge is 101 percent of the physician's maximum allowable actual charge for the service for the previous year.
(ii) For purposes of clause (i)(I), the charge described in this clause for a particular physicians' service furnished in a year is the maximum allowable actual charge for the service of the physician for the previous year plus the product of (I) the applicable fraction (as defined in clause (iii)) and (II) the amount by which 115 percent of the prevailing charge for the year involved for such service furnished by nonparticipating physicians, exceeds the physician's maximum allowable actual charge for the service for the previous year.
(iii) In clause (ii), the "applicable fraction" is—
(I) for 1987, ¼,
(II) for 1988, 1/3,
(III) for 1989, ½, and
(IV) for any subsequent year, 1.
(iv) For purposes of determining the maximum allowable actual charge under clauses (i) and (ii) for 1987, in the case of a physicians' service for which the physician has actual charges for the calendar quarter beginning on April 1, 1984, the "maximum allowable actual charge" for 1986 is the physician's actual charge for such service furnished during such quarter.
(v) For purposes of determining the maximum allowable actual charge under clauses (i) and (ii) for a year after 1986, in the case of a physicians' service for which the physician has no actual charges for the calendar quarter beginning on April 1, 1984, and for which a maximum allowable actual charge has not been previously established under this clause, the "maximum allowable actual charge" for the previous year shall be the 50th percentile of the customary charges for the service (weighted by frequency of the service) performed by nonparticipating physicians in the locality during the 12-month period ending June 30 of that previous year.
(vi) For purposes of this subparagraph, a "physician's actual charge" for a physicians' service furnished in a year or other period is the weighted average (or, at the option of the Secretary for a service furnished in the calendar quarter beginning April 1, 1984, the median) of the physician's charges for such service furnished in the year or other period.
(vii) In the case of a nonparticipating physician who was a participating physician during a previous period, for the purpose of computing the physician's maximum allowable actual charge during the physician's period of nonparticipation, the physician shall be deemed to have had a maximum allowable actual charge during the period of participation, and such deemed maximum allowable actual charge shall be determined according to clauses (i) through (vi).
(viii) Notwithstanding any other provision of this subparagraph, the maximum allowable actual charge for a particular physician's service furnished by a nonparticipating physician to individuals enrolled under this part during the 3-month period beginning on January 1, 1988, shall be the amount determined under this subparagraph for 1987. The maximum allowable actual charge for any such service otherwise determined under this subparagraph for 1988 shall take effect on April 1, 1988.
(ix) If there is a reduction under subsection (b)(13) in the reasonable charge for medical direction furnished by a nonparticipating physician, the maximum allowable actual charge otherwise permitted under this subsection for such services shall be reduced in the same manner and in the same percentage as the reduction in such reasonable charge.
(D)(i) If an action described in clause (ii) results in a reduction in a reasonable charge for a physicians' service or item and a nonparticipating physician furnishes the service or item to an individual entitled to benefits under this part after the effective date of such action, the physician may not charge the individual more than 125 percent of the reduced payment allowance (as defined in clause (iii)) plus (for services or items furnished during the 12-month period (or 9-month period in the case of an action described in clause (ii)(II)) beginning on the effective date of the action) ½ of the amount by which the physician's maximum allowable actual charge for the service or item for the previous 12-month period exceeds such 125 percent level.
(ii) The first sentence of clause (i) shall apply to—
(I) an adjustment under subsection (b)(8)(B) (relating to inherent reasonableness),
(II) a reduction under subsection (b)(10)(A) or (b)(14)(A) (relating to certain overpriced procedures),
(III) a reduction under subsection (b)(11)(B) (relating to certain cataract procedures),
(IV) a prevailing charge limit established under subsection (b)(11)(C)(i) or (b)(15)(A),
(V) a reasonable charge limit established under subsection (b)(11)(C)(ii) of this section, and
(VI) an adjustment under
(iii) In clause (i), the term "reduced payment allowance" means, with respect to an action—
(I) under subsection (b)(8)(B), the inherently reasonable charge established under subsection (b)(8);
(II) under subsection (b)(10)(A), (b)(11)(B), (b)(11)(C)(i), (b)(14)(A), or (b)(15)(A) or under
(III) under subsection (b)(11)(C)(ii), the payment allowance established under such subsection.
(iv) If a physician knowingly and willfully bills in violation of clause (i) (whether or not such charge violates subparagraph (B)), the Secretary may apply sanctions against such physician in accordance with paragraph (2).
(v) Clause (i) shall not apply to items and services furnished after December 31, 1990.
(2) Subject to paragraph (3), the sanctions which the Secretary may apply under this paragraph are—
(A) excluding a physician from participation in the programs under this chapter for a period not to exceed 5 years, in accordance with the procedures of subsections (c), (f), and (g) of
(B) civil monetary penalties and assessments, in the same manner as such penalties and assessments are authorized under
or both. The provisions of
(3)(A) The Secretary may not exclude a physician pursuant to paragraph (2)(A) if such physician is a sole community physician or sole source of essential specialized services in a community.
(B) The Secretary shall take into account access of beneficiaries to physicians' services for which payment may be made under this part in determining whether to bar a physician from participation under paragraph (2)(A).
(4) The Secretary may, out of any civil monetary penalty or assessment collected from a physician pursuant to this subsection, make a payment to a beneficiary enrolled under this part in the nature of restitution for amounts paid by such beneficiary to such physician which was determined to be an excess charge under paragraph (1).
(k) Sanctions for billing for services of assistant at cataract operations
(1) If a physician knowingly and willfully presents or causes to be presented a claim or bills an individual enrolled under this part for charges for services as an assistant at surgery for which payment may not be made by reason of
(2) If a physician knowingly and willfully presents or causes to be presented a claim or bills an individual enrolled under this part for charges that includes a charge for an assistant at surgery for which payment may not be made by reason of
(l) Prohibition of unassigned billing of services determined to be medically unnecessary by carrier
(1)(A) Subject to subparagraph (C), if—
(i) a nonparticipating physician furnishes services to an individual enrolled for benefits under this part,
(ii) payment for such services is not accepted on an assignment-related basis,
(iii)(I) a medicare administrative contractor determines under this part or a quality improvement organization determines under part B of subchapter XI that payment may not be made by reason of
(iv) the physician has collected any amounts for such services,
the physician shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts so collected.
(B) A refund under subparagraph (A) is considered to be on a timely basis only if—
(i) in the case of a physician who does not request reconsideration or seek appeal on a timely basis, the refund is made within 30 days after the date the physician receives a denial notice under paragraph (2), or
(ii) in the case in which such a reconsideration or appeal is taken, the refund is made within 15 days after the date the physician receives notice of an adverse determination on reconsideration or appeal.
(C) Subparagraph (A) shall not apply to the furnishing of a service by a physician to an individual in the case described in subparagraph (A)(iii)(I) if—
(i) the physician establishes that the physician did not know and could not reasonably have been expected to know that payment may not be made for the service by reason of
(ii) before the service was provided, the individual was informed that payment under this part may not be made for the specific service and the individual has agreed to pay for that service.
(2) Each medicare administrative contractor with a contract in effect under this section with respect to physicians and each quality improvement organization with a contract under part B of subchapter XI shall send any notice of denial of payment for physicians' services based on
(3) If a physician knowingly and willfully fails to make refunds in violation of paragraph (1)(A), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2).
(m) Disclosure of information of unassigned claims for certain physicians' services
(1) In the case of a nonparticipating physician who—
(A) performs an elective surgical procedure for an individual enrolled for benefits under this part and for which the physician's actual charge is at least $500, and
(B) does not accept payment for such procedure on an assignment-related basis,
the physician must disclose to the individual, in writing and in a form approved by the Secretary, the physician's estimated actual charge for the procedure, the estimated approved charge under this part for the procedure, the excess of the physician's actual charge over the approved charge, and the coinsurance amount applicable to the procedure. The written estimate may not be used as the basis for, or evidence in, a civil suit.
(2) A physician who fails to make a disclosure required under paragraph (1) with respect to a procedure shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected for the procedure in excess of the charges recognized and approved under this part.
(3) If a physician knowingly and willfully fails to comply with paragraph (2), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2).
(4) The Secretary shall provide for such monitoring of requests for payment for physicians' services to which paragraph (1) applies as is necessary to assure compliance with paragraph (2).
(n) Elimination of markup for certain purchased services
(1) If a physician's bill or a request for payment for services billed by a physician includes a charge for a diagnostic test described in
(A) If the bill or request for payment indicates that the test was performed by a supplier, identifies the supplier, and indicates the amount the supplier charged the billing physician, payment for the test (less the applicable deductible and coinsurance amounts) shall be the actual acquisition costs (net of any discounts) or, if lower, the supplier's reasonable charge (or other applicable limit) for the test.
(B) If the bill or request for payment (i) does not indicate who performed the test, or (ii) indicates that the test was performed by a supplier but does not identify the supplier or include the amount charged by the supplier, no payment shall be made under this part.
(2) A physician may not bill an individual enrolled under this part—
(A) any amount other than the payment amount specified in paragraph (1)(A) and any applicable deductible and coinsurance for a diagnostic test for which payment is made pursuant to paragraph (1)(A), or
(B) any amount for a diagnostic test for which payment may not be made pursuant to paragraph (1)(B).
(3) If a physician knowingly and willfully in repeated cases bills one or more individuals in violation of paragraph (2), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2).
(o) Reimbursement for drugs and biologicals
(1) If a physician's, supplier's, or any other person's bill or request for payment for services includes a charge for a drug or biological for which payment may be made under this part and the drug or biological is not paid on a cost or prospective payment basis as otherwise provided in this part, the amount payable for the drug or biological is equal to the following:
(A) In the case of any of the following drugs or biologicals, 95 percent of the average wholesale price:
(i) A drug or biological furnished before January 1, 2004.
(ii) Blood clotting factors furnished during 2004.
(iii) A drug or biological furnished during 2004 that was not available for payment under this part as of April 1, 2003.
(iv) A vaccine described in subparagraph (A) or (B) of
(v) A drug or biological furnished during 2004 in connection with the furnishing of renal dialysis services if separately billed by renal dialysis facilities.
(B) In the case of a drug or biological furnished during 2004 that is not described in—
(i) clause (ii), (iii), (iv), or (v) of subparagraph (A),
(ii) subparagraph (D)(i), or
(iii) subparagraph (F),
the amount determined under paragraph (4).
(C) In the case of a drug or biological that is not described in subparagraph (A)(iv), (D)(i), or (F) furnished on or after January 1, 2005 (and including a drug or biological described in subparagraph (D)(i) furnished on or after January 1, 2017), the amount provided under
(D)(i) Except as provided in clause (ii), in the case of infusion drugs or biologicals furnished through an item of durable medical equipment covered under
(ii) In the case of such infusion drugs or biologicals furnished in a competitive acquisition area under
(E) In the case of a drug or biological, consisting of intravenous immune globulin, furnished—
(i) in 2004, the amount of payment provided under paragraph (4); and
(ii) in 2005 and subsequent years, the amount of payment provided under
(F) In the case of blood and blood products (other than blood clotting factors), the amount of payment shall be determined in the same manner as such amount of payment was determined on October 1, 2003.
(G) In the case of inhalation drugs or biologicals furnished through durable medical equipment covered under
(i) in 2004, the amount provided under paragraph (4) for the drug or biological; and
(ii) in 2005 and subsequent years, the amount provided under
(2) If payment for a drug or biological is made to a licensed pharmacy approved to dispense drugs or biologicals under this part, the Secretary may pay a dispensing fee (less the applicable deductible and coinsurance amounts) to the pharmacy. This paragraph shall not apply in the case of payment under paragraph (1)(C).
(3)(A) Payment for a charge for any drug or biological for which payment may be made under this part may be made only on an assignment-related basis.
(B) The provisions of subsection (b)(18)(B) shall apply to charges for such drugs or biologicals in the same manner as they apply to services furnished by a practitioner described in subsection (b)(18)(C).
(4)(A) Subject to the succeeding provisions of this paragraph, the amount of payment for a drug or biological under this paragraph furnished in 2004 is equal to 85 percent of the average wholesale price (determined as of April 1, 2003) for the drug or biological.
(B) The Secretary shall substitute for the percentage under subparagraph (A) for a drug or biological the percentage that would apply to the drug or biological under the column entitled "Average of GAO and OIG data (percent)" in the table entitled "Table 3.—Medicare Part B Drugs in the Most Recent GAO and OIG Studies" published on August 20, 2003, in the Federal Register (68 Fed. Reg. 50445).
(C)(i) The Secretary may substitute for the percentage under subparagraph (A) a percentage that is based on data and information submitted by the manufacturer of the drug or biological by October 15, 2003.
(ii) The Secretary may substitute for the percentage under subparagraph (A) with respect to drugs and biologicals furnished during 2004 on or after April 1, 2004, a percentage that is based on data and information submitted by the manufacturer of the drug or biological after October 15, 2003, and before January 1, 2004.
(D) In no case may the percentage substituted under subparagraph (B) or (C) be less than 80 percent.
(5)(A) Subject to subparagraph (B), in the case of clotting factors furnished on or after January 1, 2005, the Secretary shall, after reviewing the January 2003 report to Congress by the Comptroller General of the United States entitled "Payment for Blood Clotting Factor Exceeds Providers Acquisition Cost", provide for a separate payment, to the entity which furnishes to the patient blood clotting factors, for items and services related to the furnishing of such factors in an amount that the Secretary determines to be appropriate. Such payment amount may take into account any or all of the following:
(i) The mixing (if appropriate) and delivery of factors to an individual, including special inventory management and storage requirements.
(ii) Ancillary supplies and patient training necessary for the self-administration of such factors.
(B) In determining the separate payment amount under subparagraph (A) for blood clotting factors furnished in 2005, the Secretary shall ensure that the total amount of payments under this part (as estimated by the Secretary) for such factors under paragraph (1)(C) and such separate payments for such factors does not exceed the total amount of payments that would have been made for such factors under this part (as estimated by the Secretary) if the amendments made by section 303 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 had not been enacted.
(C) The separate payment amount under this subparagraph for blood clotting factors furnished in 2006 or a subsequent year shall be equal to the separate payment amount determined under this paragraph for the previous year increased by the percentage increase in the consumer price index for medical care for the 12-month period ending with June of the previous year.
(6) In the case of an immunosuppressive drug described in subparagraph (J) of
(7) There shall be no administrative or judicial review under
(8) In the case of intravenous immune globulin described in
(p) Requiring submission of diagnostic information
(1) Each request for payment, or bill submitted, for an item or service furnished by a physician or practitioner specified in subsection (b)(18)(C) for which payment may be made under this part shall include the appropriate diagnosis code (or codes) as established by the Secretary for such item or service.
(2) In the case of a request for payment for an item or service furnished by a physician or practitioner specified in subsection (b)(18)(C) on an assignment-related basis which does not include the code (or codes) required under paragraph (1), payment may be denied under this part.
(3) In the case of a request for payment for an item or service furnished by a physician not submitted on an assignment-related basis and which does not include the code (or codes) required under paragraph (1)—
(A) if the physician knowingly and willfully fails to provide the code (or codes) promptly upon request of the Secretary or a medicare administrative contractor, the physician may be subject to a civil money penalty in an amount not to exceed $2,000, and
(B) if the physician knowingly, willfully, and in repeated cases fails, after being notified by the Secretary of the obligations and requirements of this subsection, to include the code (or codes) required under paragraph (1), the physician may be subject to the sanction described in subsection (j)(2)(A).
The provisions of
(4) In the case of an item or service defined in paragraph (3), (6), (8), or (9) of sub
(q) Anesthesia services; counting actual time units
(1)(A) The Secretary, in consultation with groups representing physicians who furnish anesthesia services, shall establish by regulation a relative value guide for use in all localities in making payment for physician anesthesia services furnished under this part. Such guide shall be designed so as to result in expenditures under this subchapter for such services in an amount that would not exceed the amount of such expenditures which would otherwise occur.
(B) For physician anesthesia services furnished under this part during 1991, the prevailing charge conversion factor used in a locality under this subsection shall, subject to clause (iv), be reduced to the adjusted prevailing charge conversion factor for the locality determined as follows:
(i) The Secretary shall estimate the national weighted average of the prevailing charge conversion factors used under this subsection for services furnished during 1990 after March 31, using the best available data.
(ii) The national weighted average estimated under clause (i) shall be reduced by 7 percent.
(iii) The adjusted prevailing charge conversion factor for a locality is the sum of—
(I) the product of (a) the portion of the reduced national weighted average prevailing charge conversion factor computed under clause (ii) which is attributable to physician work and (b) the geographic work index value for the locality (specified in Addendum C to the Model Fee Schedule for Physician Services (published on September 4, 1990, 55 Federal Register pp. 36238–36243)); and
(II) the product of (a) the remaining portion of the reduced national weighted average prevailing charge conversion factor computed under clause (ii) and (b) the geographic practice cost index value specified in subsection (b)(14)(C)(iv) for the locality.
In applying this clause, 70 percent of the prevailing charge conversion factor shall be considered to be attributable to physician work.
(iv) The prevailing charge conversion factor to be applied to a locality under this subparagraph shall not be reduced by more than 15 percent below the prevailing charge conversion factor applied in the locality for the period during 1990 after March 31, but in no case shall the prevailing charge conversion factor be less than 60 percent of the national weighted average of the prevailing charge conversion factors (computed under clause (i)).
(2) For purposes of payment for anesthesia services (whether furnished by physicians or by certified registered nurse anesthetists) under this part, the time units shall be counted based on actual time rather than rounded to full time units.
(r) Establishment of physician identification system
The Secretary shall establish a system which provides for a unique identifier for each physician who furnishes services for which payment may be made under this subchapter. Under such system, the Secretary may impose appropriate fees on such physicians to cover the costs of investigation and recertification activities with respect to the issuance of the identifiers.
(s) Application of fee schedule
(1)(A) Subject to paragraph (3), the Secretary may implement a statewide or other areawide fee schedule to be used for payment of any item or service described in paragraph (2) which is paid on a reasonable charge basis.
(B) Any fee schedule established under this paragraph for such item or service shall be updated—
(i) for years before 2011—
(I) subject to subclause (II), by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the preceding year; and
(II) for items and services described in paragraph (2)(D) for 2009,
(ii) for 2011 and subsequent years—
(I) the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by—
(II) the productivity adjustment described in
The application of subparagraph (B)(ii)(II) may result in the update under this paragraph being less than 0.0 for a year, and may result in payment rates under any fee schedule established under this paragraph for a year being less than such payment rates for the preceding year.
(2) The items and services described in this paragraph are as follows:
(A) Medical supplies.
(B) Home dialysis supplies and equipment (as defined in
(C) Repealed.
(D) Parenteral and enteral nutrients, equipment, and supplies.
(E) Electromyogram devices.
(F) Salivation devices.
(G) Blood products.
(H) Transfusion medicine.
(3) In the case of items and services described in paragraph (2)(D) that are included in a competitive acquisition program in a competitive acquisition area under
(A) the payment basis under this subsection for such items and services furnished in such area shall be the payment basis determined under such competitive acquisition program; and
(B) subject to
(t) Facility provider number required on claims
(1) Each request for payment, or bill submitted, for an item or service furnished to an individual who is a resident of a skilled nursing facility for which payment may be made under this part shall include the facility's medicare provider number.
(2) Each request for payment, or bill submitted, for therapy services described in paragraph (1) or (3) of
(u) Reporting of anemia quality indicators for cancer anti-anemia drugs
Each request for payment, or bill submitted, for a drug furnished to an individual for the treatment of anemia in connection with the treatment of cancer shall include (in a form and manner specified by the Secretary) information on the hemoglobin or hematocrit levels for the individual.
(Aug. 14, 1935, ch. 531, title XVIII, §1842, as added
Editorial Notes
References in Text
The Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (b)(14)(A)(ii), is
Section 303 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (o)(5)(B), is section 303 of
Section 101 of the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012, referred to in subsec. (o)(8), is section 101 of
Amendments
2022—Subsec. (b)(18)(C)(vii), (viii).
Subsec. (o)(8).
2020—Subsec. (b)(6)(C).
2018—Subsec. (b)(6)(I).
2016—Subsec. (b)(6)(I).
Subsec. (b)(6)(J).
Subsec. (o)(1)(C).
Subsec. (o)(1)(D)(i).
Subsec. (o)(1)(D)(ii).
Subsec. (s)(3)(B).
2012—Subsec. (t).
2011—Subsec. (l)(1)(A)(iii)(I), (2).
2010—Subsec. (b)(3).
Subsec. (b)(3)(B).
Subsec. (h)(9).
Subsec. (s)(1).
"(A) for 2009
"(B) for 2014, if subparagraph (A) is applied to the items and services and there has not been a payment adjustment under paragraph (3)(B) for the items and services for any previous year, the percentage increase computed under
2008—Subsec. (b)(6)(D)(iii).
Subsec. (s)(1).
2007—Subsec. (b)(6)(D)(iii).
2006—Subsec. (b)(6)(H).
Subsec. (c)(3)(B)(ii).
Subsec. (u).
2003—
Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(2)(A), (B).
Subsec. (b)(2)(C).
Subsec. (b)(2)(D), (E).
Subsec. (b)(3).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B).
Subsec. (b)(3)(C) to (E).
Subsec. (b)(3)(F).
Subsec. (b)(3)(G).
Subsec. (b)(3)(H).
Subsec. (b)(3)(H)(i).
Subsec. (b)(3)(I).
Subsec. (b)(3)(L).
Subsec. (b)(5).
Subsec. (b)(6).
Subsec. (b)(6)(A)(ii).
Subsec. (b)(6)(D)(iv).
Subsec. (b)(7).
Subsec. (c)(1).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B)(ii)(III).
Subsec. (c)(2)(B)(ii)(IV).
Subsec. (c)(3)(A).
Subsec. (c)(4).
Subsec. (c)(5), (6).
Subsec. (d) to (f).
Subsec. (g).
Subsec. (h)(2).
Subsec. (h)(3)(A).
Subsec. (h)(3)(B).
Subsec. (h)(5)(A), (B)(iii).
Subsec. (i)(2).
Subsec. (l)(1)(A)(iii), (2).
Subsec. (o)(1).
Subsec. (o)(1)(G).
Subsec. (o)(2).
Subsec. (o)(4).
Subsec. (o)(5), (6).
Subsec. (o)(7).
Subsec. (p)(3)(A).
Subsec. (q)(1)(A).
Subsec. (s)(1).
Subsec. (s)(2)(C).
Subsec. (s)(3).
2000—Subsec. (b)(6)(C).
Subsec. (b)(6)(E).
Subsec. (b)(6)(G).
Subsec. (b)(18)(C)(vi).
Subsec. (o)(3).
Subsec. (t).
1999—Subsec. (b)(6)(F).
Subsec. (b)(8)(A)(i)(I).
Subsec. (s)(2)(E).
1997—Subsec. (b)(2)(E).
Subsec. (b)(6).
Subsec. (b)(6)(A)(ii).
Subsec. (b)(6)(C).
Subsec. (b)(6)(E).
Subsec. (b)(6)(F).
Subsec. (b)(8), (9).
Subsec. (b)(12).
"(12)(A) With respect to services described in clauses (i), (ii), or (iv) of
"(i) payment under this part may only be made on an assignment-related basis; and
"(ii) the prevailing charges determined under paragraph (3) shall not exceed—
"(I) in the case of services performed as an assistant at surgery, 65 percent of the amount that would otherwise be recognized if performed by a physician who is serving as an assistant at surgery, or
"(II) in other cases, the applicable percentage (as defined in subparagraph (B)) of the prevailing charge rate determined for such services (or, for services furnished on or after January 1, 1992, the fee schedule amount specified in
"(B) In subparagraph (A)(ii)(II), the term 'applicable percentage' means—
"(i) 75 percent in the case of services performed (other than as an assistant at surgery) in a hospital, and
"(ii) 85 percent in the case of other services."
Subsec. (b)(19).
Subsec. (h)(8).
Subsec. (o).
Subsec. (p)(1), (2).
Subsec. (p)(4).
Subsec. (s).
Subsec. (t).
1996—Subsec. (c)(6).
Subsec. (r).
1994—Subsec. (b)(2)(A).
Subsec. (b)(2)(D).
Subsec. (b)(3)(G).
Subsec. (b)(3)(H).
Subsec. (b)(3)(I).
Subsec. (b)(6)(D).
Subsec. (b)(12)(C).
Subsec. (b)(16)(B)(iii).
Subsec. (b)(17).
Subsec. (b)(18).
Subsec. (c)(1).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (h)(7)(C).
Subsec. (h)(7)(D).
Subsec. (q)(1).
Subsec. (q)(1)(B).
Subsec. (q)(1)(B)(iii).
1993—Subsec. (b)(4)(F).
Subsec. (b)(13)(A).
"(i) 10 percent, in the case of medical direction of 2 nurse anesthetists concurrently,
"(ii) 25 percent, in the case of medical direction of 3 nurse anesthetists concurrently, and
"(iii) 40 percent, in the case of medical direction of 4 nurse anesthetists concurrently."
Subsec. (b)(13)(B), (C).
Subsec. (c)(2)(B)(ii).
Subsec. (c)(3)(B).
"(i) with respect to claims received in the 3-month period beginning July 1, 1988, 10 days, and
"(ii) with respect to claims received in the 12-month period beginning October 1, 1988, 14 days."
Subsec. (i)(2).
1990—Subsec. (b)(2)(A).
Subsec. (b)(3)(G).
Subsec. (b)(4)(A)(vi).
Subsec. (b)(4)(B)(iv).
Subsec. (b)(4)(E)(iv)(I).
Subsec. (b)(4)(E)(v).
Subsec. (b)(4)(F).
Subsec. (b)(4)(F)(i).
Subsec. (b)(4)(F)(ii)(II).
Subsec. (b)(6)(C).
Subsec. (b)(6)(D).
Subsec. (b)(12)(A).
Subsec. (b)(12)(A)(ii)(II).
Subsec. (b)(12)(C).
Subsec. (b)(13)(A), (B).
Subsec. (b)(14)(A).
Subsec. (b)(14)(B)(iii)(I).
Subsec. (b)(14)(B)(iii)(II).
Subsec. (b)(14)(C)(i).
Subsec. (b)(14)(C)(iii).
Subsec. (b)(14)(C)(iv).
Subsec. (b)(16).
Subsec. (b)(18).
Subsec. (q)(1).
Subsec. (r).
1989—Subsec. (b)(2)(A).
Subsec. (b)(2)(C).
Subsec. (b)(3)(G).
Subsec. (b)(3)(I) to (K).
Subsec. (b)(3)(L).
Subsec. (b)(4)(A)(iv).
Subsec. (b)(4)(E)(iv).
Subsec. (b)(4)(F).
Subsec. (b)(6)(A)(ii).
Subsec. (b)(6)(C).
Subsec. (b)(12)(A).
Subsec. (b)(12)(A)(ii)(II).
Subsec. (b)(14).
Subsec. (b)(15).
Subsecs. (c)(1)(A), (2)(A), (3)(A), (4), (f)(3), (h)(1), (2), (4).
Subsec. (j)(1)(B)(ii).
Subsec. (j)(1)(C)(vii).
Subsec. (j)(1)(D)(ii)(II).
Subsec. (j)(1)(D)(ii)(IV).
Subsec. (j)(1)(D)(iii)(II).
Subsec. (j)(1)(D)(v).
Subsec. (j)(2).
Subsec. (o).
Subsec. (q).
1988—Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(3).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(I).
Subsec. (b)(3)(J).
Subsec. (b)(3)(K).
Subsec. (b)(4)(A)(iv).
Subsec. (b)(4)(A)(iv)(II).
Subsec. (b)(4)(A)(vi).
Subsec. (b)(4)(A)(vii).
Subsec. (b)(4)(E).
Subsec. (b)(4)(F).
Subsec. (b)(4)(F)(ii)(I).
Subsec. (b)(4)(F)(iii).
Subsec. (b)(4)(G).
Subsec. (b)(7)(B)(iii).
Subsec. (b)(10)(A)(i).
Subsec. (b)(10)(A)(iii).
Subsec. (b)(10)(B).
Subsec. (b)(10)(D).
Subsec. (b)(11)(B)(i).
Subsec. (b)(11)(C)(i).
Subsec. (b)(11)(C)(ii).
Subsec. (b)(12)(C).
Subsec. (b)(13), (14).
Subsec. (c)(1)(A).
Subsec. (c)(1)(A)(ii).
Subsec. (c)(2)(A), (3)(A).
Subsec. (c)(4).
Subsec. (f)(3).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(3)(B).
Subsec. (h)(4).
Subsec. (h)(5).
Subsec. (h)(7).
Subsec. (h)(8).
Subsec. (i).
Subsec. (i)(2), (3).
Subsec. (i)(3).
Subsec. (i)(4).
Subsec. (j)(1)(C)(i).
Subsec. (j)(1)(C)(viii).
Subsec. (j)(1)(C)(ix).
Subsec. (j)(1)(D)(ii)(IV).
Subsec. (j)(1)(D)(ii)(V).
Subsec. (j)(1)(D)(iii).
Subsec. (j)(1)(D)(iv).
Subsec. (j)(2).
Subsec. (l)(1)(C)(i).
Subsec. (n)(1).
Subsec. (n)(1)(A).
Subsec. (n)(2)(A).
Subsec. (n)(3).
Subsec. (o).
Subsec. (o)(1)(A)(i).
Subsec. (o)(1)(B)(ii).
Subsec. (p).
1987—Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(C).
Subsec. (b)(4)(A)(iv).
Subsec. (b)(4)(A)(v).
Subsec. (b)(4)(A)(vi).
Subsec. (b)(4)(A)(vii).
Subsec. (b)(4)(B)(iii).
Subsec. (b)(4)(E).
Subsec. (b)(4)(F).
Subsec. (b)(4)(G).
Subsec. (b)(7)(B)(iii).
Subsec. (b)(10).
Subsec. (b)(11)(B)(i).
Subsec. (b)(11)(C).
"(ii) In clause (i), the term 'limiting charge' means, with respect to a service, 125 percent of the prevailing charge for the service after the reduction referred to in clause (i).
"(iii) If a physician knowingly and willfully imposes charges in violation of clause (i), the Secretary may apply sanctions against such physician in accordance with subsection (j)(2) of this section.
"(iv) This subparagraph shall not apply to services furnished after the earlier of (I) December 31, 1990, or (II) one-year after the date the Secretary reports to Congress, under
Subsec. (b)(11)(D).
Subsec. (b)(12)(C).
Subsec. (b)(14).
Subsec. (c)(1).
Subsec. (c)(3).
Subsec. (h)(3).
Subsec. (h)(5).
Subsec. (h)(7).
Subsec. (h)(8).
Subsec. (i).
Subsec. (i)(2), (3).
Subsec. (i)(4).
Subsec. (j)(1)(B)(i).
Subsec. (j)(1)(C)(i).
Subsec. (j)(1)(C)(v).
Subsec. (j)(1)(C)(vi).
Subsec. (j)(1)(C)(vii).
Subsec. (j)(1)(C)(viii).
Subsec. (j)(1)(C)(ix).
Subsec. (j)(1)(D).
Subsec. (j)(1)(D)(ii)(IV).
Subsec. (j)(1)(D)(ii)(V), (VI).
Subsec. (j)(1)(D)(iii).
Subsec. (j)(2).
Subsec. (j)(3)(A).
Subsec. (k)(1), (2).
Subsec. (l)(1)(A)(iii).
Subsec. (l)(1)(C).
Subsec. (l)(1)(C)(i).
Subsec. (n).
1986—Subsec. (b)(3).
Subsec. (b)(3)(C).
Subsec. (b)(3)(F).
Subsec. (b)(3)(G).
Subsec. (b)(3)(H).
Subsec. (b)(4)(A)(i), (ii).
Subsec. (b)(4)(A)(iii).
Subsec. (b)(4)(A)(iv), (v).
Subsec. (b)(4)(B).
Subsec. (b)(4)(C).
Subsec. (b)(4)(D)(i) to (iii).
Subsec. (b)(4)(D)(iv).
Subsec. (b)(4)(E).
Subsec. (b)(6).
Subsec. (b)(7)(B)(ii)(III).
Subsec. (b)(7)(B)(iii).
Subsec. (b)(8).
Subsec. (b)(9).
Subsec. (b)(10).
Subsec. (b)(11).
Subsec. (b)(12).
Subsec. (c).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(4).
Subsec. (h)(5).
Subsec. (h)(6).
Subsec. (h)(7), (8).
Subsec. (i)(1).
Subsec. (i)(2).
Subsec. (i)(3).
Subsec. (i)(4).
Subsec. (j)(1).
Subsec. (j)(2).
Subsec. (k).
Subsec. (l).
Subsec. (m).
1984—Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(3)(B)(ii)(II).
Subsec. (b)(3)(F).
Subsec. (b)(4), (5).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (b)(7)(A).
Subsec. (b)(7)(A)(ii).
Subsec. (b)(7)(B)(i).
Subsec. (b)(7)(B)(ii).
Subsec. (b)(7)(B)(ii)(III).
Subsec. (b)(7)(B)(iii).
Subsec. (c).
Subsec. (h).
Subsecs. (i), (j).
1982—Subsec. (b)(3)(B)(ii)(II).
Subsec. (b)(3).
Subsec. (b)(6)(D).
1981—Subsec. (b)(3).
1980—Subsec. (b)(3).
Subsec. (b)(3)(F).
Subsec. (b)(6).
Subsec. (h).
1977—Subsec. (b)(3).
Subsec. (b)(5).
1976—Subsec. (b)(3).
1975—Subsec. (b)(3).
1974—Subsec. (g).
1972—Subsec. (a).
Subsec. (b)(3).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(C).
Subsec. (b)(5).
Subsec. (g).
1968—Subsec. (b)(3)(B).
Statutory Notes and Related Subsidiaries
Change of Name
Committee on Energy and Commerce of House of Representatives treated as referring to Committee on Commerce of House of Representatives by section 1(a) of
Effective Date of 2022 Amendment
Amendment by section 4121(a)(5) of
Effective Date of 2016 Amendment
Amendment by section 5012(c)(2) of
"(1)
"(2)
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2010 Amendment
Amendment by section 6404(a)(2)(A) of
Amendment by section 6406(a) of
Effective Date of 2008 Amendment
Amendment by section 154(a)(2)(B) of
Effective Date of 2007 Amendment
Effective Date of 2006 Amendment
Amendment by section 5202(a)(2) of
Effective Date of 2003 Amendment
Amendment by section 627(b)(2) of
Amendment by section 911(c) of
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title I, §105(d)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(4)] of
Effective Date of 1997 Amendment
Amendment by section 4201(c)(1) of
Amendment by section 4205(d)(3)(B) of
Amendment by section 4315(a) of
Amendment by section 4316(a) of
Amendment by section 4432(b)(2), (4) of
Amendment by section 4512(b)(2), (c) of
Amendment by section 4556(a) of
Amendment by section 4603(c)(2)(B)(i) of
Amendment by section 4611(d) of
Effective Date of 1994 Amendment
Amendment by section 123(b)(1), (2)(B) of
"(3)
"(4)
Amendment by section 126(a)(1), (c), (e), (g)(9) of
Amendment by section 151(b)(1)(B), (2)(B) of
Effective Date of 1993 Amendment
Amendment by section 13568(a), (b) of
Effective Date of 1990 Amendment
"(1) The amendments made by subsection (a) [amending this section and provisions set out below] apply to services furnished after 1990, except that—
"(A) the provisions concerning the third and fourth years of practice apply only to physicians' services furnished after 1990 and 1991, respectively, and
"(B) the provisions concerning the second, third, and fourth years of practice apply only to services of a health care practitioner furnished after 1991, 1992, and 1993, respectively.
"(2) The amendments made by subsection (b) [amending this section and
Amendment by section 4155(c) of
Effective Date of 1989 Amendment
"(A) Subject to subparagraph (B), the amendments made by paragraph (1) [amending this section] apply to services furnished in 1990 or 1991 which were subject to the first sentence of section 1842(b)(4)(F) of the Social Security Act [
"(B) The amendments made by paragraph (1) shall not apply to services furnished in 1990 before April 1, 1990. With respect to physicians' services furnished during 1990 on and after April 1, such amendments shall be applied as though any reference, in the matter inserted by such amendments, to the 'first calendar year during which the preceding sentence no longer applies' were deemed a reference to the remainder of 1990."
Amendment by section 6202(d)(2) of
Amendment by section 201(a) of
"(1) the repeal of section 421 of MCCA [
"(2) the amendments made by subsection (b) [amending this section and
Effective Date of 1988 Amendment
Amendment by
"(1) [Repealed. Prior to repeal by
"(2) [Repealed. Prior to repeal by
"(3) [Repealed. Prior to repeal by
"(4)
"(5) [Repealed. Prior to repeal by
[Amendment of section 202(m) of
"(2) The amendments made by subsection (b) [amending this section] shall apply to annual notices beginning with 1989.
"(3) The amendments made by subsection (c) [amending this section] shall first apply to explanations of benefits provided for items and services furnished on or after January 1, 1989."
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4031(a)(2) of
Amendment by section 4035(a)(2) of
"(1) The amendment made by subsection (a) [amending this section] shall apply to diagnostic tests performed on or after April 1, 1988.
"(2) The Secretary of Health and Human Services shall complete the review and make an appropriate adjustment of prevailing charge levels under subsection (b) [set out below] for items and services furnished no later than January 1, 1989."
Amendment by section 4063(a) of
Amendment by section 4096(a)(1) of
Amendment by
Effective Date of 1986 Amendment
Amendment by section 1895(b)(14)(A), (15) of
Amendment by section 9311(c) of
Amendment by section 9320(e)(3) of
Amendment by section 9338(b), (c) of
Amendment by section 9341(a)(2) of
Amendment by section 9307(c) of
Effective Date of 1984 Amendment
Amendment by
Amendment by section 2303(e) of
Amendment by section 2326(d)(2) of
Amendment by section 2354(b)(13), (14) of
Amendment by section 2663(j)(2)(F)(iv) of
Effective Date of 1982 Amendment
Amendment by section 128(d)(1) of
Effective Date of 1980 Amendment
Effective Date of 1977 Amendment
Amendment by
Amendment by
Effective Date of 1976 Amendment
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by section 211(c)(3) of
Amendment by section 227(e)(3) of
Amendment by section 263(d)(5) of
Amendment by section 281(d) of
Effective Date of 1968 Amendment
Transfer of Functions
Physician Payment Review Commission (PPRC) was terminated and its assets and staff transferred to the Medicare Payment Advisory Commission (MedPAC) by section 4022(c)(2), (3) of
Part B Advance Payments
"(A)
"(i) provide 1 year before payments for items and services furnished by such provider or supplier are offset to recoup payments under such program;
"(ii) provide that any such offset be an amount equal to—
"(I) during the first 11 months in which any such offsets are made with respect to payment for items and services furnished by such provider or supplier, 25 percent of the amount of such payment for such items and services; and
"(II) during the succeeding 6 months, 50 percent of the amount of such payment for such items and services; and
"(iii) allow 29 months from the date of the first payment under such program to such provider or supplier before requiring that the outstanding balance be paid in full.
"(B)
"(i) for the portion of 2020 occurring during such period of the emergency period and for each year, shall not exceed $10,000,000;
"(ii) for each year beginning and ending during such period of the emergency period, shall not exceed $10,000,000; and
"(iii) for the last year beginning during such period of the emergency period, the portion of such last year occurring during such period of the emergency period, shall not exceed $10,000,000."
Linkage of Revised Drug Payments and Increases for Drug Administration
Continuation of Payment Methodology for Radiopharmaceuticals
Implementation of 2003 Amendment
Application of 2003 Amendment to Physician Specialties
Issuance of Temporary National Codes
Revised Part B Payment for Drugs and Biologicals and Related Services
"(a)
"(1)
"(A)
"(i) identify the average prices at which such drugs and biologicals are acquired by physicians and other suppliers;
"(ii) quantify the difference between such average prices and the reimbursement amount under such section; and
"(iii) determine the extent to which (if any) payment under such part is adequate to compensate physicians, providers of services, or other suppliers of such drugs and biologicals for costs incurred in the administration, handling, or storage of such drugs or biologicals.
"(B)
"(2)
"(3)
"(A)
"(i) proposals to make adjustments under subsection (c) of section 1848 of the Social Security Act (
"(ii) proposals for new payments to providers of services or suppliers for such costs, if appropriate.
"(B)
"(C)
"(i) the method and amount of reimbursement for similar drugs and biologicals made by large group health plans;
"(ii) as a result of any revised payment methodology, the potential for patients to receive inpatient or outpatient hospital services in lieu of services in a physician's office; and
"(iii) the effect of any revised payment methodology on the delivery of drug therapies by hospital outpatient departments.
"(D)
"(b)
"(1)
"(2)
"(c)
Implementation of Inherent Reasonableness (IR) Authority
"(a)
"(1) the Comptroller General of the United States releases a report pursuant to the request for such a report made on March 1, 1999, regarding the impact of the Secretary's, fiscal intermediaries', and carriers' use of such authority; and
"(2) the Secretary has published a notice of final rulemaking in the Federal Register that relates to such authority and that responds to such report and to comments received in response to the Secretary's interim final regulation relating to such authority that was published in the Federal Register on January 7, 1998.
"(b)
"(1) reevaluate the appropriateness of the criteria included in such interim final regulation for identifying payments which are excessive or deficient; and
"(2) take appropriate steps to ensure the use of valid and reliable data when exercising such authority."
Initial Budget Neutrality
Improvements in Administration of Laboratory Tests Benefit
"(a)
"(1)
"(A) divide the United States into no more than 5 regions, and
"(B) designate a single carrier for each such region, for the purpose of payment of claims under part B of title XVIII of the Social Security Act [
"(2)
"(A) a carrier's timeliness, quality, and experience in claims processing, and
"(B) a carrier's capacity to conduct electronic data interchange with laboratories and data matches with other carriers.
"(3)
"(4)
"(5)
"(b)
"(1)
"(2)
"(A) Beneficiary information required to be submitted with each claim or order for laboratory tests.
"(B) The medical conditions for which a laboratory test is reasonable and necessary (within the meaning of section 1862(a)(1)(A) of the Social Security Act [
"(C) The appropriate use of procedure codes in billing for a laboratory test, including the unbundling of laboratory services.
"(D) The medical documentation that is required by a medicare contractor at the time a claim is submitted for a laboratory test in accordance with section 1833(e) of the Social Security Act [
"(E) Recordkeeping requirements in addition to any information required to be submitted with a claim, including physicians' obligations regarding such requirements.
"(F) Procedures for filing claims and for providing remittances by electronic media.
"(G) Limitation on frequency of coverage for the same tests performed on the same individual.
"(3)
"(4)
"(5)
"(6)
"(7)
"(c)
Wholesale Price Study and Report
Budget Neutrality Adjustment
"(1) The relative values established under section 1848(c) of such Act [
"(2) The amounts determined under section 1848(a)(2)(B)(ii)(I) of such Act.
"(3) The prevailing charges or fee schedule amounts to be applied under such part for services of a health care practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of such Act [
Procedure Codes
"(A) The codes for the procedures specified in clause (ii) are as follows: Hospital inpatient medical services (HCPCS codes 90200 through 90292), consultations (HCPCS codes 90600 through 90654), other visits (HCPCS code 90699), preventive medicine visits (HCPCS codes 90750 through 90764), psychiatric services (HCPCS codes 90801 through 90862), emergency care facility services (HCPCS codes 99062 through 99065), and critical care services (HCPCS codes 99160 through 99174).
"(B) The codes for the procedures specified in clause (iii) are as follows: Partial mastectomy (HCPCS code 19160); tendon sheath injections and small joint arthrocentesis (HCPCS codes 20550, 20600, 20605, and 20610); femoral fracture and trochanteric fracture treatments (HCPCS codes 27230, 27232, 27234, 27238, 27240, 27242, 27246, and 27248); endotracheal intubation (HCPCS code 31500); thoracentesis (HCPCS code 32000); thoracostomy (HCPCS codes 32020, 32035, and 32036); aneurysm repair (HCPCS codes 35111); cystourethroscopy (HCPCS code 52340); transurethral fulguration and resection (HCPCS codes 52606 and 52620); tympanoplasty with mastoidectomy (HCPCS code 69645); and ophthalmoscopy (HCPCS codes 92250 and 92260)."
Study of Release of Prepayment Medical Review Screen Parameters
Freeze in Charges for Parenteral and Enteral Nutrients, Supplies, and Equipment
Prohibition on Regulations Changing Coverage of Conventional Eyewear
"(A) Notwithstanding any other provision of law (except as provided in subparagraph (B)) the Secretary of Health and Human Services (referred to in this subsection as the 'Secretary') may not issue any regulation that changes the coverage of conventional eyewear furnished to individuals (enrolled under part B of title XVIII of the Social Security Act [
"(B) Paragraph (1) shall not apply to any regulation issued for the sole purpose of implementing the amendments made by paragraph (2)."
Directory of Unique Physician Identifier Numbers
Treatment of Certain Eye Examination Visits as Primary Care Services
Delay in Update Until April 1, 1990, and Reduction in Percentage Increase in Medicare Economic Index
"(1)
"(2)
"(3)
"(A) subject to the last sentence of this paragraph, each participation agreement in effect on December 31, 1989, under section 1842(h)(1) of the Social Security Act [
"(B) the effective period for such agreements under such section entered into for 1990 shall be the 9-month period beginning on April 1, 1990, and the Secretary of Health and Human Services shall provide an opportunity for physicians and suppliers to enroll as participating physicians and suppliers before April 1, 1990;
"(C) instead of publishing, under section 1842(h)(4) of the Social Security Act [
"(D) instead of providing to nonparticipating physicians under section 1842(b)(3)(G) of the Social Security Act [
An agreement with a participating physician or supplier described in subparagraph (A) in effect on December 31, 1989, under section 1842(h)(1) of the Social Security Act shall not remain in effect for the period described in subparagraph (A) if the participating physician or supplier requests on or before December 31, 1989, that the agreement be terminated."
State Demonstration Projects on Application of Limitation on Visits Per Month Per Resident on Aggregate Basis for a Team
Application of Different Performance Standards for Electronic System for Covered Outpatient Drugs
Delay in Application of Coordination of Benefits With Private Health Insurance
Extension of Physician Participation Agreements and Related Provisions
"(A) subject to the last sentence of this paragraph, each agreement with a participating physician in effect on December 31, 1987, under section 1842(h)(1) of the Social Security Act [
"(B) the effective period for agreements under such section entered into for 1988 shall be the nine-month period beginning on April 1, 1988, and the Secretary shall provide an opportunity for physicians to enroll as participating physicians prior to April 1, 1988;
"(C) instead of publishing, under section 1842(h)(4) of the Social Security Act [
"(D) instead of providing to nonparticipating physicians, under section 1842(b)(3)(G) of the Social Security Act [
An agreement with a participating physician in effect on December 31, 1987, under section 1842(h)(1) of the Social Security Act shall not remain in effect for the period described in subparagraph (A) if the participating physician requests on or before December 31, 1987, that the agreement be terminated."
Development of Uniform Relative Value Guide
[
Study of Prevailing Charges for Anesthesia Services
GAO Studies
"(1) The Comptroller General shall conduct a study—
"(A) to determine the average anesthesia times reported for medicare reimbursement purposes,
"(B) to verify those times from patient medical records,
"(C) to compare anesthesia times to average surgical times, and
"(D) to determine whether the current payments for physician supervision of nurse anesthetists are excessive.
The Comptroller General shall report to Congress, by not later than January 1, 1989, on such study and in the report include recommendations regarding the appropriateness of the anesthesia times recognized by medicare for reimbursement purposes and recommendations regarding adjustments of payments for physician supervision of nurse anesthetists.
"(2) The Comptroller General shall conduct a study on the impact of the amendment made by subsection (a) [amending this section], and shall report to Congress on the results of such study by April 1, 1990."
Adjustment in Medicare Prevailing Charges
"(1)
"(2)
Adjustment for Maximum Allowable Actual Charge
Physician Payment Studies; Definitions of Medical and Surgical Procedures
"(1)
"(2)
"(A) ancillary services commonly performed in conjunction with a major procedure would be included with the major procedure;
"(B) pre- and post-procedure services would be included in the procedure; and
"(C) similar procedures would be listed together if the procedures are similar in resource requirements."
Payments for Durable Medical Equipment, Prosthetic Devices, Orthotics, and Prosthetics; 1-Year Freeze on Charge Limitations
"(1)
"(2)
Special Rule With Respect to Payment for Intraocular Lenses
Study on Cost Effectiveness of Hearing Prior to Hearing by Administrative Law Judge on Carrier Determinations; Report to Congress
Capacity To Set Geographic Payment Limits
Utilization Screens for Physician Services Provided to Patients in Rehabilitation Hospitals
"(1) The Secretary of Health and Human Services shall establish (in consultation with appropriate physician groups, including those representing rehabilitative medicine) a separate utilization screen for physician visits to patients in rehabilitation hospitals and rehabilitative units (and patients in long-term care hospitals receiving rehabilitation services) to be used by carriers under section 1842 of the Social Security Act [
"(2) Not later than 12 months after the date of enactment of this Act [Dec. 22, 1987], the Secretary of Health and Human Services shall take appropriate steps to implement the utilization screen established under paragraph (1)."
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of
Amendments in Contracts and Regulations
The Secretary of Health and Human Services to provide for such timely amendments to contracts under this section, and regulations, to such extent as may be necessary to implement
Medicare Economic Index
"(1)
"(2)
"(4)
"(5)
"(6)
Development and Use of HCFA Common Procedure Coding System
"(1) Not later than July 1, 1989, the Secretary of Health and Human Services (in this subsection referred to as the 'Secretary'), after public notice and opportunity for public comment and after consulation [consultation] with appropriate medical and other experts, shall group the procedure codes contained in any HCFA Common Procedure Coding System for payment purposes to minimize inappropriate increases in the intensity or volume of services provided as a result of coding distinctions which do not reflect substantial differences in the services rendered.
"(2) Not later than January 1, 1990, each carrier with which the Secretary has entered into a contract under section 1842 of the Social Security Act [
Measuring Carrier Performance; Carrier Bonuses for Good Performance
"(B)
"(C)
Review of Procedures
Ratification of Regulations
"(1)
"(2)
Payment for Parenteral and Enteral Nutrition Supplies and Equipment
"(1) for enteral nutrition nutrients, supplies, and equipment and parenteral nutrition supplies and equipment furnished on or after January 1, 1987, and
"(2) for parenteral nutrition nutrients furnished on or after October 1, 1987."
Reporting of OPD Services Using HCPCS
Period for Entering Into Participation Agreements
Transitional Provisions for Medicare Part B Payments
Computation of Customary Charges for Certain Former Hospital-Compensated Physicians
"(1) In applying section 1842(b) of the Social Security Act [
"(A) be based upon the physician's actual charges billed during the 12-month period ending on March 31, 1985, and
"(B) in the case of a physician who was not a participating physician (as defined in section 1842(h)(1) of the Social Security Act [
"(2) In applying section 1842(b) of the Social Security Act [
"(3) In this subsection, the term 'hospital-compensated physician' means, with respect to services furnished to patients of a hospital, a physician who is compensated by the hospital for the furnishing of physicians' services for which payment may be made under this part."
Extension of Medicare Physician Payment Provisions
Period of 15 months referred to in subsec. (j)(1) of this section for monitoring the charges of nonparticipating physicians to be deemed to include the period Oct. 1, 1985, to Mar. 14, 1986, see section 5(b) of
Simplification of Procedures With Respect to Claims and Payments for Clinical Diagnostic Laboratory Tests
Study of Amounts Billed for Physician Services and Paid by Carriers Under Subsection (b)(7) of This Section; Report to Congress
Replacement of Agency, Organization, or Carrier Processing Medicare Claims; Number of Agreements and Contracts Authorized for Fiscal Years 1985 Through 1993
For provision authorizing two agreements under
Rules and Regulations
Report on Reimbursement of Clinical Laboratories
Prevailing Charge Levels for Fiscal Year Beginning July 1, 1975
Report by Health Insurance Benefits Advisory Council on Methods of Reimbursement of Physicians for Their Services
Executive Documents
Executive Order No. 13947
Ex. Ord. No. 13947, July 24, 2020, 85 F.R. 59171, which related to a payment model pursuant to which Medicare would pay, for certain high-cost prescription drugs and biological products covered by Medicare Part B, no more than the most-favored-nation price, was revoked by Ex. Ord. No. 13948, §5, Sept. 13, 2020, 85 F.R. 59650, set out below.
Ex. Ord. No. 13948. Lowering Drug Prices by Putting America First
Ex. Ord. No. 13948, Sept. 13, 2020, 85 F.R. 59649, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
In addition to being unfair, high drug prices in the United States also have serious economic and health consequences for patients in need of treatment. High prices cause Americans to divert too much of their scarce resources to pharmaceutical treatments and away from other productive uses. High prices are also a reason many patients skip doses of their medications, take less than the recommended doses, or abandon treatment altogether. The consequences of these behaviors can be severe. For example, patients may develop acute conditions that result in poor clinical outcomes or that require drastic and expensive medical interventions.
In most markets, the largest buyers pay the lowest prices, but this has not been true for prescription drugs. The Federal Government is the largest payer for prescription drugs in the world, but it pays more than many smaller buyers, including other developed nations. When the Federal Government purchases a drug covered by Medicare—the cost of which is shared by American seniors who take the drug and American taxpayers—it should insist on, at a minimum, the lowest price at which the manufacturer sells that drug to any other developed nation.
(b) The "most-favored-nation price" shall mean the lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organisation for Economic Co-operation and Development (OECD) that has a comparable per-capita gross domestic product.
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Donald J. Trump.
1 So in original. Probably should be followed by "and".
2 So in original. Probably should be followed by "a".
3 So in original. The period probably should not appear.
§1395v. Agreements with States
(a) Duty of Secretary; enrollment of eligible individuals
The Secretary shall, at the request of a State made before January 1, 1970, or during 1981 or after 1988, enter into an agreement with such State pursuant to which all eligible individuals in either of the coverage groups described in subsection (b) (as specified in the agreement) will be enrolled under the program established by this part.
(b) Coverage of groups to which applicable
An agreement entered into with any State pursuant to subsection (a) may be applicable to either of the following coverage groups:
(1) individuals receiving money payments under the plan of such State approved under subchapter I or subchapter XVI; or
(2) individuals receiving money payments under all of the plans of such State approved under subchapters I, X, XIV, and XVI, and part A of subchapter IV.
Except as provided in subsection (g), there shall be excluded from any coverage group any individual who is entitled to monthly insurance benefits under subchapter II or who is entitled to receive an annuity under the Railroad Retirement Act of 1974 [
(c) Eligible individuals
For purposes of this section, an individual shall be treated as an eligible individual only if he is an eligible individual (within the meaning of
(d) Monthly premiums; coverage periods
In the case of any individual enrolled pursuant to this section—
(1) the monthly premium to be paid by the State shall be determined under
(2) his coverage period shall begin on whichever of the following is the latest:
(A) July 1, 1966;
(B) the first day of the third month following the month in which the State agreement is entered into;
(C) the first day of the first month in which he is both an eligible individual and a member of a coverage group specified in the agreement under this section; or
(D) such date as may be specified in the agreement; and
(3) his coverage period attributable to the agreement with the State under this section shall end on the last day of whichever of the following first occurs:
(A) the month in which he is determined by the State agency to have become ineligible both for money payments of a kind specified in the agreement and (if there is in effect a modification entered into under subsection (h)) for medical assistance, or
(B) the month preceding the first month for which he becomes entitled to monthly benefits under subchapter II or to an annuity or pension under the Railroad Retirement Act of 1974 [
(e) Subsection (d)(3) terminations deemed resulting in section 1395p enrollment
Any individual whose coverage period attributable to the State agreement is terminated pursuant to subsection (d)(3) shall be deemed for purposes of this part (including the continuation of his coverage period under this part) to have enrolled under
(f) "Carrier" as including State agency; provisions facilitating deductions, coinsurance, etc., and leading to economy and efficiency of operation
With respect to eligible individuals receiving money payments under the plan of a State approved under subchapter I, X, XIV, or XVI, or part A of subchapter IV, or eligible to receive medical assistance under the plan of such State approved under subchapter XIX, if the agreement entered into under this section so provides, the term "carrier" as defined in section 1395u(f) 1 of this title also includes the State agency, specified in such agreement, which administers or supervises the administration of the plan of such State approved under subchapter I, XVI, or XIX. The agreement shall also contain such provisions as will facilitate the financial transactions of the State and the carrier with respect to deductions, coinsurance, and otherwise, and as will lead to economy and efficiency of operation, with respect to individuals receiving money payments under plans of the State approved under subchapters I, X, XIV, and XVI, and part A of subchapter IV, and individuals eligible to receive medical assistance under the plan of the State approved under subchapter XIX.
(g) Subsection (b) exclusions from coverage groups
(1) The Secretary shall, at the request of a State made before January 1, 1970, or during 1981 or after 1988, enter into a modification of an agreement entered into with such State pursuant to subsection (a) under which the second sentence of subsection (b) shall not apply with respect to such agreement.
(2) In the case of any individual who would (but for this subsection) be excluded from the applicable coverage group described in subsection (b) by the second sentence of such subsection—
(A) subsections (c) and (d)(2) shall be applied as if such subsections referred to the modification under this subsection (in lieu of the agreement under subsection (a)), and
(B) subsection (d)(3)(B) shall not apply so long as there is in effect a modification entered into by the State under this subsection.
(h) Modifications respecting subsection (b) coverage groups
(1) The Secretary shall, at the request of a State made before January 1, 1970, or during 1981 or after 1988, enter into a modification of an agreement entered into with such State pursuant to subsection (a) under which the coverage group described in subsection (b) and specified in such agreement is broadened to include (A) individuals who are eligible to receive medical assistance under the plan of such State approved under subchapter XIX, or (B) qualified medicare beneficiaries (as defined in
(2) For purposes of this section, an individual shall be treated as eligible to receive medical assistance under the plan of the State approved under subchapter XIX if, for the month in which the modification is entered into under this subsection or for any month thereafter, he has been determined to be eligible to receive medical assistance under such plan. In the case of any individual who would (but for this subsection) be excluded from the agreement, subsections (c) and (d)(2) shall be applied as if they referred to the modification under this subsection (in lieu of the agreement under subsection (a)), and subsection (d)(2)(C) shall be applied (except in the case of qualified medicare beneficiaries, as defined in
(3) In this subsection, the term "qualified medicare beneficiary" also includes an individual described in
(i) Enrollment of qualified medicare beneficiaries
For provisions relating to enrollment of qualified medicare beneficiaries under part A, see
(Aug. 14, 1935, ch. 531, title XVIII, §1843, as added
Editorial Notes
References in Text
The Railroad Retirement Act of 1974, referred to in subsec. (d)(3)(B), is act Aug. 29, 1935, ch. 812, as amended generally by
Amendments
1990—Subsec. (h)(3).
1989—Subsec. (i).
1988—Subsecs. (a), (g)(1).
Subsec. (h)(1).
Subsec. (h)(2).
1984—Subsec. (d)(3)(B).
1983—Subsec. (d)(1).
1980—Subsec. (a).
Subsec. (e).
Subsec. (g)(1).
Subsec. (g)(2)(C).
Subsec. (h)(1).
1974—Subsec. (b).
1973—Subsec. (b).
1968—
Subsec. (a).
Subsec. (b)(2).
Subsec. (c).
Subsec. (d)(2)(D).
Subsec. (d)(3)(A).
Subsec. (f).
Subsec. (g)(1).
Subsec. (h).
1966—Subsec. (b).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment; Transitional Rule
Amendment by
Effective Date of 1980 Amendment
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1973 Amendment
Amendment by
Termination Period for Certain Individuals Covered Pursuant to State Agreements
District of Columbia; Agreement of Commissioner With Secretary for Supplementary Medical Insurance
1 See References in Text note below.
§1395w. Appropriations to cover Government contributions and contingency reserve
(a) In general
There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Federal Supplementary Medical Insurance Trust Fund—
(1)(A) a Government contribution equal to the aggregate premiums payable for a month for enrollees age 65 and over under this part and deposited in the Trust Fund, multiplied by the ratio of—
(i) twice the dollar amount of the actuarially adequate rate per enrollee age 65 and over as determined under
(ii) the dollar amount of the premium per enrollee for such month, plus
(B) a Government contribution equal to the aggregate premiums payable for a month for enrollees under age 65 under this part and deposited in the Trust Fund, multiplied by the ratio of—
(i) twice the dollar amount of the actuarially adequate rate per enrollee under age 65 as determined under
(ii) the dollar amount of the premium per enrollee for such month; minus
(C) the aggregate amount of additional premium payments attributable to the application of
(2) such sums as the Secretary deems necessary to place the Trust Fund, at the end of any fiscal year occurring after June 30, 1967, in the same position in which it would have been at the end of such fiscal year if (A) a Government contribution representing the excess of the premiums deposited in the Trust Fund during the fiscal year ending June 30, 1967, over the Government contribution actually appropriated to the Trust Fund during such fiscal year had been appropriated to it on June 30, 1967, and (B) the Government contribution for premiums deposited in the Trust Fund after June 30, 1967, had been appropriated to it when such premiums were deposited; plus
(3) a Government contribution equal to the amount of payment incentives payable under
(4) a Government contribution equal to the estimated aggregate reduction in premiums payable under part B that results from establishing the premium at 15 percent of the actuarial rate (as would be determined in accordance with
In applying paragraph (1), the amounts transferred under subsection (d)(1) with respect to enrollees described in subparagraphs (A) and (B) of such subsection shall be treated as premiums payable and deposited in the Trust Fund under subparagraphs (A) and (B), respectively, of paragraph (1). In applying paragraph (1), the amounts transferred under subsection (e)(1) with respect to enrollees described in subparagraphs (A) and (B) of such subsection shall be treated as premiums payable and deposited in the Trust Fund under subparagraphs (A) and (B), respectively, of paragraph (1). The Government contribution under paragraph (4) shall be treated as premiums payable and deposited for purposes of subparagraphs (A) and (B) of paragraph (1).
(b) Contingency reserve
In order to assure prompt payment of benefits provided under this part and the administrative expenses thereunder during the early months of the program established by this part, and to provide a contingency reserve, there is also authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, to remain available through the calendar year 1969 for repayable advances (without interest) to the Trust Fund, an amount equal to $18 multiplied by the number of individuals (as estimated by the Secretary) who could be covered in July 1966 by the insurance program established by this part if they had theretofore enrolled under this part.
(c) Election under section 1395w–24
The Secretary shall determine the Government contribution under subparagraphs (A) and (B) of subsection (a)(1) without regard to any premium reduction resulting from an election under
(d) Transfer of certain General Fund amounts for 2016
(1) For 2016, there shall be transferred from the General Fund to the Trust Fund an amount, as estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services, equal to the reduction in aggregate premiums payable under this part for a month in such year (excluding any changes in amounts collected under
(A) enrollees age 65 and over; and
(B) enrollees under age 65.
Such amounts shall be transferred from time to time as appropriate.
(2) Premium increases affected under
(3) There shall be transferred from the Trust Fund to the General Fund of the Treasury amounts equivalent to the additional premiums payable as a result of the application of
(e) Transfer of certain General Fund amounts for 2021
(1) For 2021, there shall be transferred from the General Fund to the Trust Fund an amount, as estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services, equal to the reduction in aggregate premiums payable under this part for a month in such year (excluding any changes in amounts collected under
(A) enrollees age 65 and over; and
(B) enrollees under age 65.
Such amounts shall be transferred from time to time as appropriate.
(2) Premium increases affected under
(3) There shall be transferred from the Trust Fund to the General Fund of the Treasury amounts equivalent to the additional premiums payable as a result of the application of
(f) Transfer of certain General Fund amounts for COVID–19 public health emergency period
(1) There shall be transferred from the General Fund of the Treasury to the Trust Fund an amount, as estimated by the Chief Actuary of the Centers for Medicare & Medicaid Services, equal to amounts paid in advance for items and services under this part during the period beginning on the first day of the emergency period described in
(2) There shall be transferred from the Trust Fund to the General Fund of the Treasury amounts equivalent to the sum of—
(A) the amounts by which claims have offset (in whole or in part) the amount of such payments described in paragraph (1); and
(B) the amount of such payments that have been repaid (in whole or in part).
(3) Amounts described in paragraphs (1) and (2) shall be transferred from time to time as appropriate.
(Aug. 14, 1935, ch. 531, title XVIII, §1844, as added
Editorial Notes
References in Text
Amendments
2020—Subsec. (a).
Subsec. (a)(4).
Subsec. (e).
Subsec. (f).
2015—Subsec. (a).
Subsec. (d).
2009—Subsec. (a)(2), (3).
2003—Subsec. (a)(1)(B)(ii).
Subsec. (a)(1)(C).
Subsec. (c).
2000—Subsec. (c).
1997—Subsec. (a)(1)(A)(i), (B)(i).
1989—Subsec. (a).
1988—Subsec. (a).
1984—Subsec. (a)(1)(B)(ii).
1983—Subsec. (a)(1)(A)(i).
Subsec. (a)(1)(B)(i).
1982—Subsec. (a)(1)(A)(i), (B)(i).
1972—Subsec. (a)(1).
1968—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Amendment by section 222(l)(2)(C) of
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment; Transitional Rule
Amendment by
Effective Date of 1972 Amendment
Construction of 2015 Amendment; Conditional Application to 2017
For provisions relating to construction and application of amendment by
1 See References in Text note below.
§1395w–1. Repealed. Pub. L. 105–33, title IV, §4022(b)(2)(A), Aug. 5, 1997, 111 Stat. 354
Section, act Aug. 14, 1935, ch. 531, title XVIII, §1845, as added and amended Apr. 7, 1986,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Nov. 1, 1997, the date of termination of the Prospective Payment Assessment Commission and the Physician Payment Review Commission, see section 4022(c)(2) of
§1395w–2. Intermediate sanctions for providers or suppliers of clinical diagnostic laboratory tests
(a) If the Secretary determines that any provider or clinical laboratory approved for participation under this subchapter no longer substantially meets the conditions of participation or for coverage specified under this subchapter with respect to the provision of clinical diagnostic laboratory tests under this part, the Secretary may (for a period not to exceed one year) impose intermediate sanctions developed pursuant to subsection (b), in lieu of terminating immediately the provider agreement or cancelling immediately approval of the clinical laboratory.
(b)(1) The Secretary shall develop and implement—
(A) a range of intermediate sanctions to apply to providers or clinical laboratories under the conditions described in subsection (a), and
(B) appropriate procedures for appealing determinations relating to the imposition of such sanctions.
(2)(A) The intermediate sanctions developed under paragraph (1) shall include—
(i) directed plans of correction,
(ii) civil money penalties in an amount not to exceed $10,000 for each day of substantial noncompliance,
(iii) payment for the costs of onsite monitoring by an agency responsible for conducting surveys, and
(iv) suspension of all or part of the payments to which a provider or clinical laboratory would otherwise be entitled under this subchapter with respect to clinical diagnostic laboratory tests furnished on or after the date on which the Secretary determines that intermediate sanctions should be imposed pursuant to subsection (a).
The provisions of
(B) The sanctions specified in subparagraph (A) are in addition to sanctions otherwise available under State or Federal law.
(3) The Secretary shall develop and implement specific procedures with respect to when and how each of the intermediate sanctions developed under paragraph (1) is to be applied, the amounts of any penalties, and the severity of each of these penalties. Such procedures shall be designed so as to minimize the time between identification of violations and imposition of these sanctions and shall provide for the imposition of incrementally more severe penalties for repeated or uncorrected deficiencies.
(Aug. 14, 1935, ch. 531, title XVIII, §1846, as added
Editorial Notes
Amendments
1990—
1989—
1988—
Subsec. (a).
Subsec. (b)(1)(A).
Subsec. (b)(2)(A).
Subsec. (b)(2)(A)(ii).
Subsec. (b)(2)(A)(iii).
Subsec. (b)(2)(A)(iv).
Subsec. (b)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendments
Amendment by
Amendment by section 203(e)(4) of
Except as specifically provided in section 411 of
Effective Date
§1395w–3. Competitive acquisition of certain items and services
(a) Establishment of competitive acquisition programs
(1) Implementation of programs
(A) In general
The Secretary shall establish and implement programs under which competitive acquisition areas are established throughout the United States for contract award purposes for the furnishing under this part of competitively priced items and services (described in paragraph (2)) for which payment is made under this part. Such areas may differ for different items and services.
(B) Phased-in implementation
The programs—
(i) shall be phased in among competitive acquisition areas in a manner consistent with subparagraph (D) so that the competition under the programs occurs in—
(I) 10 of the largest metropolitan statistical areas in 2007;
(II) an additional 91 of the largest metropolitan statistical areas in 2011; and
(III) additional areas after 2011 (or, in the case of national mail order for items and services, after 2010); and
(ii) may be phased in first among the highest cost and highest volume items and services or those items and services that the Secretary determines have the largest savings potential.
(C) Waiver of certain provisions
In carrying out the programs, the Secretary may waive such provisions of the Federal Acquisition Regulation as are necessary for the efficient implementation of this section, other than provisions relating to confidentiality of information and such other provisions as the Secretary determines appropriate.
(D) Changes in competitive acquisition programs
(i) Round 1 of competitive acquisition program
Notwithstanding subparagraph (B)(i)(I) and in implementing the first round of the competitive acquisition programs under this section—
(I) the contracts awarded under this section before July 15, 2008, are terminated, no payment shall be made under this subchapter on or after July 15, 2008, based on such a contract, and, to the extent that any damages may be applicable as a result of the termination of such contracts, such damages shall be payable from the Federal Supplementary Medical Insurance Trust Fund under
(II) the Secretary shall conduct the competition for such round in a manner so that it occurs in 2009 with respect to the same items and services and the same areas, except as provided in subclauses (III) and (IV);
(III) the Secretary shall exclude Puerto Rico so that such round of competition covers 9, instead of 10, of the largest metropolitan statistical areas; and
(IV) there shall be excluded negative pressure wound therapy items and services.
Nothing in subclause (I) shall be construed to provide an independent cause of action or right to administrative or judicial review with regard to the termination provided under such subclause.
(ii) Round 2 of competitive acquisition program
In implementing the second round of the competitive acquisition programs under this section described in subparagraph (B)(i)(II)—
(I) the metropolitan statistical areas to be included shall be those metropolitan statistical areas selected by the Secretary for such round as of June 1, 2008;
(II) the Secretary shall include the next 21 largest metropolitan statistical areas by total population (after those selected under subclause (I)) for such round; and
(III) the Secretary may subdivide metropolitan statistical areas with populations (based upon the most recent data from the Census Bureau) of at least 8,000,000 into separate areas for competitive acquisition purposes.
(iii) Exclusion of certain areas in subsequent rounds of competitive acquisition programs
In implementing subsequent rounds of the competitive acquisition programs under this section, including under subparagraph (B)(i)(III), for competitions occurring before 2015, the Secretary shall exempt from the competitive acquisition program (other than national mail order) the following:
(I) Rural areas.
(II) Metropolitan statistical areas not selected under round 1 or round 2 with a population of less than 250,000.
(III) Areas with a low population density within a metropolitan statistical area that is otherwise selected, as determined for purposes of paragraph (3)(A).
(E) Verification by OIG
The Inspector General of the Department of Health and Human Services shall, through post-award audit, survey, or otherwise, assess the process used by the Centers for Medicare & Medicaid Services to conduct competitive bidding and subsequent pricing determinations under this section that are the basis for pivotal bid amounts and single payment amounts for items and services in competitive bidding areas under rounds 1 and 2 of the competitive acquisition programs under this section and may continue to verify such calculations for subsequent rounds of such programs.
(F) Supplier feedback on missing financial documentation
(i) In general
In the case of a bid where one or more covered documents in connection with such bid have been submitted not later than the covered document review date specified in clause (ii), the Secretary—
(I) shall provide, by not later than 45 days (in the case of the first round of the competitive acquisition programs as described in subparagraph (B)(i)(I)) or 90 days (in the case of a subsequent round of such programs) after the covered document review date, for notice to the bidder of all such documents that are missing as of the covered document review date; and
(II) may not reject the bid on the basis that any covered document is missing or has not been submitted on a timely basis, if all such missing documents identified in the notice provided to the bidder under subclause (I) are submitted to the Secretary not later than 10 business days after the date of such notice.
(ii) Covered document review date
The covered document review date specified in this clause with respect to a competitive acquisition program is the later of—
(I) the date that is 30 days before the final date specified by the Secretary for submission of bids under such program; or
(II) the date that is 30 days after the first date specified by the Secretary for submission of bids under such program.
(iii) Limitations of process
The process provided under this subparagraph—
(I) applies only to the timely submission of covered documents;
(II) does not apply to any determination as to the accuracy or completeness of covered documents submitted or whether such documents meet applicable requirements;
(III) shall not prevent the Secretary from rejecting a bid based on any basis not described in clause (i)(II); and
(IV) shall not be construed as permitting a bidder to change bidding amounts or to make other changes in a bid submission.
(iv) Covered document defined
In this subparagraph, the term "covered document" means a financial, tax, or other document required to be submitted by a bidder as part of an original bid submission under a competitive acquisition program in order to meet required financial standards. Such term does not include other documents, such as the bid itself or accreditation documentation.
(G) Requiring bid bonds for bidding entities
With respect to rounds of competitions beginning under this subsection for contracts beginning not earlier than January 1, 2017, and not later than January 1, 2019, an entity may not submit a bid for a competitive acquisition area unless, as of the deadline for bid submission, the entity has obtained (and provided the Secretary with proof of having obtained) a bid surety bond (in this paragraph referred to as a "bid bond") in a form specified by the Secretary consistent with subparagraph (H) and in an amount that is not less than $50,000 and not more than $100,000 for each competitive acquisition area in which the entity submits the bid.
(H) Treatment of bid bonds submitted
(i) For bidders that submit bids at or below the median and are offered but do not accept the contract
In the case of a bidding entity that is offered a contract for any product category for a competitive acquisition area, if—
(I) the entity's composite bid for such product category and area was at or below the median composite bid rate for all bidding entities included in the calculation of the single payment amounts for such product category and area; and
(II) the entity does not accept the contract offered for such product category and area,
the bid bond submitted by such entity for such area shall be forfeited by the entity and the Secretary shall collect on it.
(ii) Treatment of other bidders
In the case of a bidding entity for any product category for a competitive acquisition area, if the entity does not meet the bid forfeiture conditions in subclauses (I) and (II) of clause (i) for any product category for such area, the bid bond submitted by such entity for such area shall be returned within 90 days of the public announcement of the contract suppliers for such area.
(2) Items and services described
The items and services referred to in paragraph (1) are the following:
(A) Durable medical equipment and medical supplies
Covered items (as defined in
(B) Other equipment and supplies
Items and services described in
(C) Off-the-shelf orthotics
Orthotics described in
(D) Lymphedema compression treatment items
Lymphedema compression treatment items (as defined in
(3) Exception authority
In carrying out the programs under this section, the Secretary may exempt—
(A) rural areas and areas with low population density within urban areas that are not competitive, unless there is a significant national market through mail order for a particular item or service; and
(B) items and services for which the application of competitive acquisition is not likely to result in significant savings.
(4) Special rule for certain rented items of durable medical equipment and oxygen
In the case of a covered item for which payment is made on a rental basis under
(5) Physician authorization
(A) In general
With respect to items or services included within a particular HCPCS code, the Secretary may establish a process for certain items and services under which a physician may prescribe a particular brand or mode of delivery of an item or service within such code if the physician determines that use of the particular item or service would avoid an adverse medical outcome on the individual, as determined by the Secretary.
(B) No effect on payment amount
A prescription under subparagraph (A) shall not affect the amount of payment otherwise applicable for the item or service under the code involved.
(6) Application
For each competitive acquisition area in which the program is implemented under this subsection with respect to items and services, the payment basis determined under the competition conducted under subsection (b) shall be substituted for the payment basis otherwise applied under
(7) Exemption from competitive acquisition
The programs under this section shall not apply to the following:
(A) Certain off-the-shelf orthotics
Items and services described in paragraph (2)(C) if furnished—
(i) by a physician or other practitioner (as defined by the Secretary) to the physician's or practitioner's own patients as part of the physician's or practitioner's professional service; or
(ii) by a hospital to the hospital's own patients during an admission or on the date of discharge.
(B) Certain durable medical equipment
Those items and services described in paragraph (2)(A)—
(i) that are furnished by a hospital to the hospital's own patients during an admission or on the date of discharge; and
(ii) to which such programs would not apply, as specified by the Secretary, if furnished by a physician to the physician's own patients as part of the physician's professional service.
(b) Program requirements
(1) In general
The Secretary shall conduct a competition among entities supplying items and services described in subsection (a)(2) for each competitive acquisition area in which the program is implemented under subsection (a) with respect to such items and services.
(2) Conditions for awarding contract
(A) In general
The Secretary may not award a contract to any entity under the competition conducted in an 1 competitive acquisition area pursuant to paragraph (1) to furnish such items or services unless the Secretary finds all of the following:
(i) The entity meets applicable quality standards specified by the Secretary under
(ii) The entity meets applicable financial standards specified by the Secretary, taking into account the needs of small providers.
(iii) The total amounts to be paid to contractors in a competitive acquisition area are expected to be less than the total amounts that would otherwise be paid.
(iv) Access of individuals to a choice of multiple suppliers in the area is maintained.
(v) The entity meets applicable State licensure requirements.
(B) Timely implementation of program
Any delay in the implementation of quality standards under
(3) Contents of contract
(A) In general
A contract entered into with an entity under the competition conducted pursuant to paragraph (1) is subject to terms and conditions that the Secretary may specify.
(B) Term of contracts
The Secretary shall recompete contracts under this section not less often than once every 3 years.
(C) Disclosure of subcontractors
(i) Initial disclosure
Not later than 10 days after the date a supplier enters into a contract with the Secretary under this section, such supplier shall disclose to the Secretary, in a form and manner specified by the Secretary, the information on—
(I) each subcontracting relationship that such supplier has in furnishing items and services under the contract; and
(II) whether each such subcontractor meets the requirement of
(ii) Subsequent disclosure
Not later than 10 days after such a supplier subsequently enters into a subcontracting relationship described in clause (i)(II), such supplier shall disclose to the Secretary, in such form and manner, the information described in subclauses (I) and (II) of clause (i).
(4) Limit on number of contractors
(A) In general
The Secretary may limit the number of contractors in a competitive acquisition area to the number needed to meet projected demand for items and services covered under the contracts. In awarding contracts, the Secretary shall take into account the ability of bidding entities to furnish items or services in sufficient quantities to meet the anticipated needs of individuals for such items or services in the geographic area covered under the contract on a timely basis.
(B) Multiple winners
The Secretary shall award contracts to multiple entities submitting bids in each area for an item or service.
(5) Payment
(A) In general
Payment under this part for competitively priced items and services described in subsection (a)(2) shall be based on bids submitted and accepted under this section for such items and services. Based on such bids the Secretary shall determine a single payment amount for each item or service in each competitive acquisition area.
(B) Reduced beneficiary cost-sharing
(i) Application of coinsurance
Payment under this section for items and services shall be in an amount equal to 80 percent of the payment basis described in subparagraph (A).
(ii) Application of deductible
Before applying clause (i), the individual shall be required to meet the deductible described in
(C) Payment on assignment-related basis
Payment for any item or service furnished by the entity may only be made under this section on an assignment-related basis.
(D) Construction
Nothing in this section shall be construed as precluding the use of an advanced beneficiary notice with respect to a competitively priced item and service.
(6) Participating contractors
(A) In general
Except as provided in subsection (a)(4), payment shall not be made for items and services described in subsection (a)(2) furnished by a contractor and for which competition is conducted under this section unless—
(i) the contractor has submitted a bid for such items and services under this section; and
(ii) the Secretary has awarded a contract to the contractor for such items and services under this section.
(B) Bid defined
In this section, the term "bid" means an offer to furnish an item or service for a particular price and time period that includes, where appropriate, any services that are attendant to the furnishing of the item or service.
(C) Rules for mergers and acquisitions
In applying subparagraph (A) to a contractor, the contractor shall include a successor entity in the case of a merger or acquisition, if the successor entity assumes such contract along with any liabilities that may have occurred thereunder.
(D) Protection of small suppliers
In developing procedures relating to bids and the awarding of contracts under this section, the Secretary shall take appropriate steps to ensure that small suppliers of items and services have an opportunity to be considered for participation in the program under this section.
(7) Consideration in determining categories for bids
The Secretary may consider the clinical efficiency and value of specific items within codes, including whether some items have a greater therapeutic advantage to individuals.
(8) Authority to contract for education, monitoring, outreach, and complaint services
The Secretary may enter into contracts with appropriate entities to address complaints from individuals who receive items and services from an entity with a contract under this section and to conduct appropriate education of and outreach to such individuals and monitoring quality of services with respect to the program.
(9) Authority to contract for implementation
The Secretary may contract with appropriate entities to implement the competitive bidding program under this section.
(10) Special rule in case of competition for diabetic testing strips
(A) In general
With respect to the competitive acquisition program for diabetic testing strips conducted after the first round of the competitive acquisition programs, if an entity does not demonstrate to the Secretary that its bid covers types of diabetic testing strip products that, in the aggregate and taking into account volume for the different products, cover 50 percent (or such higher percentage as the Secretary may specify) of all such types of products, the Secretary shall reject such bid. With respect to bids to furnish such types of products on or after January 1, 2019, the volume for such types of products shall be determined by the Secretary through the use of multiple sources of data (from mail order and non-mail order Medicare markets), including market-based data measuring sales of diabetic testing strip products that are not exclusively sold by a single retailer from such markets.
(B) Study of types of testing strip products
Before 2011, the Inspector General of the Department of Health and Human Services shall conduct a study to determine the types of diabetic testing strip products by volume that could be used to make determinations pursuant to subparagraph (A) for the first competition under the competitive acquisition program described in such subparagraph and submit to the Secretary a report on the results of the study. The Inspector General shall also conduct such a study and submit such a report before the Secretary conducts a subsequent competitive acquistion 2 program described in subparagraph (A).
(C) Demonstration of ability to furnish types of diabetic testing strip products
With respect to bids to furnish diabetic testing strip products on or after January 1, 2019, an entity shall attest to the Secretary that the entity has the ability to obtain an inventory of the types and quantities of diabetic testing strip products that will allow the entity to furnish such products in a manner consistent with its bid and—
(i) demonstrate to the Secretary, through letters of intent with manufacturers, wholesalers, or other suppliers, or other evidence as the Secretary may specify, such ability; or
(ii) demonstrate to the Secretary that it made a good faith attempt to obtain such a letter of intent or such other evidence.
(D) Use of unlisted types in calculation of percentage
With respect to bids to furnish diabetic testing strip products on or after January 1, 2019, in determining under subparagraph (A) whether a bid submitted by an entity under such subparagraph covers 50 percent (or such higher percentage as the Secretary may specify) of all types of diabetic testing strip products, the Secretary may not attribute a percentage to types of diabetic testing strip products that the Secretary does not identify by brand, model, and market share volume.
(E) Adherence to demonstration
(i) In general
In the case of an entity that is furnishing diabetic testing strip products on or after January 1, 2019, under a contract entered into under the competition conducted pursuant to paragraph (1), the Secretary shall establish a process to monitor, on an ongoing basis, the extent to which such entity continues to cover the product types included in the entity's bid.
(ii) Termination
If the Secretary determines that an entity described in clause (i) fails to maintain in inventory, or otherwise maintain ready access to (through requirements, contracts, or otherwise) a type of product included in the entity's bid, the Secretary may terminate such contract unless the Secretary finds that the failure of the entity to maintain inventory of, or ready access to, the product is the result of the discontinuation of the product by the product manufacturer, a market-wide shortage of the product, or the introduction of a newer model or version of the product in the market involved.
(11) Additional special rules in case of competition for diabetic testing strips
(A) In general
With respect to an entity that is furnishing diabetic testing strip products to individuals under a contract entered into under the competitive acquisition program established under this section, the entity shall furnish to each individual a brand of such products that is compatible with the home blood glucose monitor selected by the individual.
(B) Prohibition on influencing and incentivizing
An entity described in subparagraph (A) may not attempt to influence or incentivize an individual to switch the brand of glucose monitor or diabetic testing strip product selected by the individual, including by—
(i) persuading, pressuring, or advising the individual to switch; or
(ii) furnishing information about alternative brands to the individual where the individual has not requested such information.
(C) Provision of information
(i) Standardized information
Not later than January 1, 2019, the Secretary shall develop and make available to entities described in subparagraph (A) standardized information that describes the rights of an individual with respect to such an entity. The information described in the preceding sentence shall include information regarding—
(I) the requirements established under subparagraphs (A) and (B);
(II) the right of the individual to purchase diabetic testing strip products from another mail order supplier of such products or a retail pharmacy if the entity is not able to furnish the brand of such product that is compatible with the home blood glucose monitor selected by the individual; and
(III) the right of the individual to return diabetic testing strip products furnished to the individual by the entity.
(ii) Requirement
With respect to diabetic testing strip products furnished on or after the date on which the Secretary develops the standardized information under clause (i), an entity described in subparagraph (A) may not communicate directly to an individual until the entity has verbally provided the individual with such standardized information.
(D) Order refills
With respect to diabetic testing strip products furnished on or after January 1, 2019, the Secretary shall require an entity furnishing diabetic testing strip products to an individual to contact and receive a request from the individual for such products not more than 14 days prior to dispensing a refill of such products to the individual.
(12) No administrative or judicial review
There shall be no administrative or judicial review under
(A) the establishment of payment amounts under paragraph (5);
(B) the awarding of contracts under this section;
(C) the designation of competitive acquisition areas under subsection (a)(1)(A) and the identification of areas under subsection (a)(1)(D)(iii);
(D) the phased-in implementation under subsection (a)(1)(B) and implementation of subsection (a)(1)(D);
(E) the selection of items and services for competitive acquisition under subsection (a)(2);
(F) the bidding structure and number of contractors selected under this section; or
(G) the implementation of the special rule described in paragraph (10).
(c) Program Advisory and Oversight Committee
(1) Establishment
The Secretary shall establish a Program Advisory and Oversight Committee (hereinafter in this section referred to as the "Committee").
(2) Membership; terms
The Committee shall consist of such members as the Secretary may appoint who shall serve for such term as the Secretary may specify.
(3) Duties
(A) Advice
The Committee shall provide advice to the Secretary with respect to the following functions:
(i) The implementation of the program under this section.
(ii) The establishment of financial standards for purposes of subsection (b)(2)(A)(ii).
(iii) The establishment of requirements for collection of data for the efficient management of the program.
(iv) The development of proposals for efficient interaction among manufacturers, providers of services, suppliers (as defined in
(v) The establishment of quality standards under
(B) Additional duties
The Committee shall perform such additional functions to assist the Secretary in carrying out this section as the Secretary may specify.
(4) Inapplicability of chapter 10 of title 5
The provisions of
(5) Termination
The Committee shall terminate on December 31, 2011.
(d) Report
Not later than July 1, 2011, the Secretary shall submit to Congress a report on the programs under this section. The report shall include information on savings, reductions in cost-sharing, access to and quality of items and services, and satisfaction of individuals.
(e) Repealed. Pub. L. 110–275, title I, §145(a)(1), July 15, 2008, 122 Stat. 2547
(f) Competitive acquisition ombudsman
The Secretary shall provide for a competitive acquisition ombudsman within the Centers for Medicare & Medicaid Services in order to respond to complaints and inquiries made by suppliers and individuals relating to the application of the competitive acquisition program under this section. The ombudsman may be within the office of the Medicare Beneficiary Ombudsman appointed under
(Aug. 14, 1935, ch. 531, title XVIII, §1847, as added
Editorial Notes
References in Text
The Federal Food, Drug, and Cosmetic Act, referred to in subsec. (a)(2)(A), is act June 25, 1938, ch. 675,
Prior Provisions
A prior section 1395w–3, act Aug. 14, 1935, ch. 531, title XVIII, §1847, as added July 1, 1988,
Amendments
2022—Subsec. (a)(2)(D).
Subsec. (c)(4).
2019—Subsec. (a)(2)(A).
2018—Subsec. (b)(10)(A).
Subsec. (b)(10)(C) to (E).
Subsec. (b)(11), (12).
2016—Subsec. (a)(2)(A).
2015—Subsec. (a)(1)(G), (H).
Subsec. (b)(2)(A)(v).
2010—Subsec. (a)(1)(B)(i)(II).
Subsec. (a)(1)(D)(ii)(II), (III).
2008—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(i)(II).
Subsec. (a)(1)(B)(i)(III).
Subsec. (a)(1)(D) to (F).
Subsec. (a)(2)(A).
Subsec. (a)(7).
Subsec. (b)(3)(C).
Subsec. (b)(10).
Subsec. (b)(11).
Subsec. (b)(11)(C).
Subsec. (b)(11)(D).
Subsec. (b)(11)(G).
Subsec. (c)(5).
Subsec. (d).
Subsec. (e).
Subsec. (f).
2003—
1999—Subsec. (b)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
Amendment by section 154 of
Effective Date of 1999 Amendment
Amendment by
Construction of 2015 Amendment
Non-Application of Medicare Fee Schedule Adjustments for Wheelchair Accessories and Seat and Back Cushions When Furnished in Connection With Complex Rehabilitative Manual Wheelchairs
"(1)
"(2)
Implementation of 2018 Amendment
"(1)
"(2)
GAO Report on Impact of Competitive Acquisition on Suppliers
"(A)
"(B)
"(C)
"(i) Beneficiary access to items and services under the program, including the impact on such access of awarding contracts to bidders that—
"(I) did not have a physical presence in an area where they received a contract; or
"(II) had no previous experience providing the product category they were contracted to provide.
"(ii) Beneficiary satisfaction with the program and cost savings to beneficiaries under the program.
"(iii) Costs to suppliers of participating in the program and recommendations about ways to reduce those costs without compromising quality standards or savings to the Medicare program.
"(iv) Impact of the program on small business suppliers.
"(v) Analysis of the impact on utilization of different items and services paid within the same Healthcare Common Procedure Coding System (HCPCS) code.
"(vi) Costs to the Centers for Medicare & Medicaid Services, including payments made to contractors, for administering the program compared with administration of a fee schedule, in comparison with the relative savings of the program.
"(vii) Impact on access, Medicare spending, and beneficiary spending of any difference in treatment for diabetic testing supplies depending on how such supplies are furnished.
"(viii) Such other topics as the Comptroller General determines to be appropriate."
Report on Activities of Suppliers
Study by GAO
1 So in original. Probably should be "a".
2 So in original. Probably should be "acquisition".
§1395w–3a. Use of average sales price payment methodology
(a) Application
(1) In general
Except as provided in paragraph (2), this section shall apply to payment for drugs and biologicals that are described in
(2) Election
This section shall not apply in the case of a physician who elects under subsection (a)(1)(A)(ii) of
(b) Payment amount
(1) In general
Subject to paragraph (7) and subsections (d)(3)(C) and (e), the amount of payment determined under this section for the billing and payment code for a drug or biological (based on a minimum dosage unit) is, subject to applicable deductible and coinsurance—
(A) in the case of a multiple source drug (as defined in subsection (c)(6)(C)), 106 percent of the amount determined under paragraph (3) for a multiple source drug furnished before April 1, 2008, or 106 percent of the amount determined under paragraph (6) for a multiple source drug furnished on or after April 1, 2008;
(B) in the case of a single source drug or biological (as defined in subsection (c)(6)(D)), 106 percent of the amount determined under paragraph (4) or in the case of such a drug or biological product that is a selected drug (as referred to in
(C) in the case of a biosimilar biological product (as defined in subsection (c)(6)(H)), the amount determined under paragraph (8).
(2) Specification of unit
(A) Specification by manufacturer
The manufacturer of a drug or biological shall specify the unit associated with each National Drug Code (including package size) as part of the submission of data under
(B) Unit defined
In this section, the term "unit" means, with respect to each National Drug Code (including package size) associated with a drug or biological, the lowest identifiable quantity (such as a capsule or tablet, milligram of molecules, or grams) of the drug or biological that is dispensed, exclusive of any diluent without reference to volume measures pertaining to liquids. For years after 2004, the Secretary may establish the unit for a manufacturer to report and methods for counting units as the Secretary determines appropriate to implement this section.
(3) Multiple source drug
For all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under
(A) computing the sum of the products (for each National Drug Code assigned to such drug products) of—
(i) the manufacturer's average sales price (as defined in subsection (c)); and
(ii) the total number of units specified under paragraph (2) sold; and
(B) dividing the sum determined under subparagraph (A) by the sum of the total number of units under subparagraph (A)(ii) for all National Drug Codes assigned to such drug products.
(4) Single source drug or biological
The amount specified in this paragraph for a single source drug or biological is the lesser of the following:
(A) Average sales price
The average sales price as determined using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before April 1, 2008, and using the methodology applied under paragraph (6) for single source drugs and biologicals furnished on or after April 1, 2008, for all National Drug Codes assigned to such drug or biological product.
(B) Wholesale acquisition cost (WAC)
The wholesale acquisition cost (as defined in subsection (c)(6)(B)) using the methodology applied under paragraph (3) for single source drugs and biologicals furnished before April 1, 2008, and using the methodology applied under paragraph (6) for single source drugs and biologicals furnished on or after April 1, 2008, for all National Drug Codes assigned to such drug or biological product.
(5) Basis for payment amount
The payment amount shall be determined under this subsection based on information reported under subsection (f) and without regard to any special packaging, labeling, or identifiers on the dosage form or product or package.
(6) Use of volume-weighted average sales prices in calculation of average sales price
(A) In general
For all drug products included within the same multiple source drug billing and payment code, the amount specified in this paragraph is the volume-weighted average of the average sales prices reported under
(i) computing the sum of the products (for each National Drug Code assigned to such drug products) of—
(I) the manufacturer's average sales price (as defined in subsection (c)), determined by the Secretary without dividing such price by the total number of billing units for the National Drug Code for the billing and payment code; and
(II) the total number of units specified under paragraph (2) sold; and
(ii) dividing the sum determined under clause (i) by the sum of the products (for each National Drug Code assigned to such drug products) of—
(I) the total number of units specified under paragraph (2) sold; and
(II) the total number of billing units for the National Drug Code for the billing and payment code.
(B) Billing unit defined
For purposes of this subsection, the term "billing unit" means the identifiable quantity associated with a billing and payment code, as established by the Secretary.
(7) Special rule
Beginning with April 1, 2008, the payment amount for—
(A) each single source drug or biological described in
(i) the payment amount that would be determined for such drug or biological applying such subsection; or
(ii) the payment amount that would have been determined for such drug or biological if such subsection were not applied; and
(B) a multiple source drug described in
(i) the payment amount that would be determined for such drug or biological taking into account the application of such subsection; or
(ii) the payment amount that would have been determined for such drug or biological if such subsection were not applied.
(8) Biosimilar biological product
(A) In general
Subject to subparagraph (B), the amount specified in this paragraph for a biosimilar biological product described in paragraph (1)(C) is the sum of—
(i) the average sales price as determined using the methodology described under paragraph (6) applied to a biosimilar biological product for all National Drug Codes assigned to such product in the same manner as such paragraph is applied to drugs described in such paragraph; and
(ii) 6 percent of the amount determined under paragraph (4) for the reference biological product (as defined in subsection (c)(6)(I)).
(B) Temporary payment increase
(i) In general
In the case of a qualifying biosimilar biological product that is furnished during the applicable 5-year period for such product, the amount specified in this paragraph for such product with respect to such period is the sum determined under subparagraph (A), except that clause (ii) of such subparagraph shall be applied by substituting "8 percent" for "6 percent".
(ii) Applicable 5-year period
For purposes of clause (i), the applicable 5-year period for a qualifying biosimilar biological product is—
(I) in the case of such a product for which payment was made under this paragraph as of September 30, 2022, the 5-year period beginning on October 1, 2022; and
(II) in the case of such a product for which payment is first made under this paragraph during a calendar quarter during the period beginning October 1, 2022, and ending December 31, 2027, the 5-year period beginning on the first day of such calendar quarter during which such payment is first made.
(iii) Qualifying biosimilar biological product defined
For purposes of this subparagraph, the term "qualifying biosimilar biological product" means a biosimilar biological product described in paragraph (1)(C) with respect to which—
(I) in the case of a product described in clause (ii)(I), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product; and
(II) in the case of a product described in clause (ii)(II), the average sales price under paragraph (8)(A)(i) for a calendar quarter during the 5-year period described in such clause is not more than the average sales price under paragraph (4)(A) for such quarter for the reference biological product.
(c) Manufacturer's average sales price
(1) In general
For purposes of this section, subject to paragraphs (2) and (3), the manufacturer's "average sales price" means, of a drug or biological for a National Drug Code for a calendar quarter for a manufacturer for a unit—
(A) the manufacturer's sales to all purchasers (excluding sales exempted in paragraph (2)) in the United States for such drug or biological in the calendar quarter; divided by
(B) the total number of such units of such drug or biological sold by the manufacturer in such quarter.
(2) Certain sales exempted from computation
In calculating the manufacturer's average sales price under this subsection, the following sales shall be excluded:
(A) Sales exempt from best price
Sales exempt from the inclusion in the determination of "best price" under
(B) Sales at nominal charge
Such other sales as the Secretary identifies as sales to an entity that are merely nominal in amount (as applied for purposes of
(3) Sale price net of discounts
In calculating the manufacturer's average sales price under this subsection, such price shall include volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates (other than rebates under subsection (i),
(4) Payment methodology in cases where average sales price during first quarter of sales is unavailable
(A) In general
Subject to subparagraph (B), in the case of a drug or biological during an initial period (not to exceed a full calendar quarter) in which data on the prices for sales for the drug or biological is not sufficiently available from the manufacturer to compute an average sales price for the drug or biological, the Secretary may determine the amount payable under this section—
(i) in the case of a drug or biological furnished prior to January 1, 2019, based on—
(I) the wholesale acquisition cost; or
(II) the methodologies in effect under this part on November 1, 2003, to determine payment amounts for drugs or biologicals; and
(ii) in the case of a drug or biological furnished on or after January 1, 2019—
(I) at an amount not to exceed 103 percent of the wholesale acquisition cost; or
(II) based on the methodologies in effect under this part on November 1, 2003, to determine payment amounts for drugs or biologicals.
(B) Limitation on payment amount for biosimilar biological products during initial period
In the case of a biosimilar biological product furnished on or after July 1, 2024, during the initial period described in subparagraph (A) with respect to the biosimilar biological product, the amount payable under this section for the biosimilar biological product is the lesser of the following:
(i) The amount determined under clause (ii) of such subparagraph for the biosimilar biological product.
(ii) The amount determined under subsection (b)(1)(B) for the reference biological product.
(5) Frequency of determinations
(A) In general on a quarterly basis
The manufacturer's average sales price, for a drug or biological of a manufacturer, shall be calculated by such manufacturer under this subsection on a quarterly basis. In making such calculation insofar as there is a lag in the reporting of the information on rebates and chargebacks under paragraph (3) so that adequate data are not available on a timely basis, the manufacturer shall apply a methodology based on a 12-month rolling average for the manufacturer to estimate costs attributable to rebates and chargebacks. For years after 2004, the Secretary may establish a uniform methodology under this subparagraph to estimate and apply such costs.
(B) Updates in payment amounts
The payment amounts under subsection (b) shall be updated by the Secretary on a quarterly basis and shall be applied based upon the manufacturer's average sales price calculated for the most recent calendar quarter for which data is available.
(C) Use of contractors; implementation
The Secretary may contract with appropriate entities to calculate the payment amount under subsection (b). Notwithstanding any other provision of law, the Secretary may implement, by program instruction or otherwise, any of the provisions of this section.
(6) Definitions and other rules
In this section:
(A) Manufacturer
The term "manufacturer" means, with respect to a drug or biological, the manufacturer (as defined in
(B) Wholesale acquisition cost
The term "wholesale acquisition cost" means, with respect to a drug or biological, the manufacturer's list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.
(C) Multiple source drug
(i) In general
The term "multiple source drug" means, for a calendar quarter, a drug for which there are 2 or more drug products which—
(I) are rated as therapeutically equivalent (under the Food and Drug Administration's most recent publication of "Approved Drug Products with Therapeutic Equivalence Evaluations"),
(II) except as provided in subparagraph (E), are pharmaceutically equivalent and bioequivalent, as determined under subparagraph (F) and as determined by the Food and Drug Administration, and
(III) are sold or marketed in the United States during the quarter.
(ii) Exception
With respect to single source drugs or biologicals that are within the same billing and payment code as of October 1, 2003, the Secretary shall treat such single source drugs or biologicals as if the single source drugs or biologicals were multiple source drugs.
(D) Single source drug or biological
The term "single source drug or biological" means—
(i) a biological; or
(ii) a drug which is not a multiple source drug and which is produced or distributed under a new drug application approved by the Food and Drug Administration, including a drug product marketed by any cross-licensed producers or distributors operating under the new drug application.
(E) Exception from pharmaceutical equivalence and bioequivalence requirement
Subparagraph (C)(ii) shall not apply if the Food and Drug Administration changes by regulation the requirement that, for purposes of the publication described in subparagraph (C)(i), in order for drug products to be rated as therapeutically equivalent, they must be pharmaceutically equivalent and bioequivalent, as defined in subparagraph (F).
(F) Determination of pharmaceutical equivalence and bioequivalence
For purposes of this paragraph—
(i) drug products are pharmaceutically equivalent if the products contain identical amounts of the same active drug ingredient in the same dosage form and meet compendial or other applicable standards of strength, quality, purity, and identity; and
(ii) drugs are bioequivalent if they do not present a known or potential bioequivalence problem, or, if they do present such a problem, they are shown to meet an appropriate standard of bioequivalence.
(G) Inclusion of vaccines
In applying provisions of
(H) Biosimilar biological product
The term "biosimilar biological product" means a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed under
(I) Reference biological product
The term "reference biological product" means the biological product licensed under such
(d) Monitoring of market prices
(1) In general
The Inspector General of the Department of Health and Human Services shall conduct studies, which may include surveys, to determine the widely available market prices of drugs and biologicals to which this section applies, as the Inspector General, in consultation with the Secretary, determines to be appropriate.
(2) Comparison of prices
Based upon such studies and other data for drugs and biologicals, the Inspector General shall compare the average sales price under this section for drugs and biologicals with—
(A) the widely available market price for such drugs and biologicals (if any); and
(B) the average manufacturer price (as determined under
(3) Limitation on average sales price
(A) In general
The Secretary may disregard the average sales price for a drug or biological that exceeds the widely available market price or the average manufacturer price for such drug or biological by the applicable threshold percentage (as defined in subparagraph (B)).
(B) Applicable threshold percentage defined
In this paragraph, the term "applicable threshold percentage" means—
(i) in 2005, in the case of an average sales price for a drug or biological that exceeds widely available market price or the average manufacturer price, 5 percent; and
(ii) in 2006 and subsequent years, the percentage applied under this subparagraph subject to such adjustment as the Secretary may specify for the widely available market price or the average manufacturer price, or both.
(C) Authority to adjust average sales price
If the Inspector General finds that the average sales price for a drug or biological exceeds such widely available market price or average manufacturer price for such drug or biological by the applicable threshold percentage, the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this subparagraph) and the Secretary shall, effective as of the next quarter, substitute for the amount of payment otherwise determined under this section for such drug or biological the lesser of—
(i) the widely available market price for the drug or biological (if any); or
(ii) 103 percent of the average manufacturer price (as determined under
(4) Civil money penalty
(A) Misrepresentation
If the Secretary determines that a manufacturer has made a misrepresentation in the reporting of the manufacturer's average sales price for a drug or biological, the Secretary may apply a civil money penalty in an amount of up to $10,000 for each such price misrepresentation and for each day in which such price misrepresentation was applied.
(B) Failure to provide timely information
If the Secretary determines that a manufacturer described in subsection (f)(2) has failed to report on information described in
(C) False information
Any manufacturer required to submit information under subsection (f)(2) that knowingly provides false information is subject to a civil money penalty in an amount not to exceed $100,000 for each item of false information. Such civil money penalties are in addition to other penalties as may be prescribed by law.
(D) Increasing oversight and enforcement
For calendar quarters beginning on or after January 1, 2022,
(i) each reference to "under this subparagraph and subsection (c)(4)(B)(ii)(III)" were a reference to "under this subparagraph, subsection (c)(4)(B)(ii)(III), and subparagraphs (A), (B), and (C) of
(ii) the reference to "activities related to the oversight and enforcement of this section and agreements under this section" were a reference to "activities related to the oversight and enforcement of this section and under subsection (f)(2) of
(E) Procedures
The provisions of
(5) Widely available market price
(A) In general
In this subsection, the term "widely available market price" means the price that a prudent physician or supplier would pay for the drug or biological. In determining such price, the Inspector General shall take into account the discounts, rebates, and other price concessions routinely made available to such prudent physicians or suppliers for such drugs or biologicals.
(B) Considerations
In determining the price under subparagraph (A), the Inspector General shall consider information from one or more of the following sources:
(i) Manufacturers.
(ii) Wholesalers.
(iii) Distributors.
(iv) Physician supply houses.
(v) Specialty pharmacies.
(vi) Group purchasing arrangements.
(vii) Surveys of physicians.
(viii) Surveys of suppliers.
(ix) Information on such market prices from insurers.
(x) Information on such market prices from private health plans.
(e) Authority to use alternative payment in response to public health emergency
In the case of a public health emergency under
(f) Quarterly report on average sales price
(1) In general
For requirements for reporting the manufacturer's average sales price (and, if required to make payment, the manufacturer's wholesale acquisition cost) for the drug or biological under this section, see
(2) Manufacturers without a rebate agreement under subchapter xix
(A) In general
If the manufacturer of a drug or biological described in subparagraph (C), (E), or (G) of
(B) Audit
Information reported under subparagraph (A) is subject to audit by the Inspector General of the Department of Health and Human Services.
(C) Verification
The Secretary may survey wholesalers and manufacturers that directly distribute drugs or biologicals described in subparagraph (A), when necessary, to verify manufacturer prices and manufacturer's average sales prices (including wholesale acquisition cost) if required to make payment reported under subparagraph (A). The Secretary may impose a civil monetary penalty in an amount not to exceed $100,000 on a wholesaler, manufacturer, or direct seller, if the wholesaler, manufacturer, or direct seller of such a drug or biological refuses a request for information about charges or prices by the Secretary in connection with a survey under this subparagraph or knowingly provides false information. The provisions of
(D) Confidentiality
Notwithstanding any other provision of law, information disclosed by manufacturers or wholesalers under this paragraph (other than the wholesale acquisition cost for purposes of carrying out this section) is confidential and shall not be disclosed by the Secretary in a form which discloses the identity of a specific manufacturer or wholesaler or prices charged for drugs or biologicals by such manufacturer or wholesaler, except—
(i) as the Secretary determines to be necessary to carry out this section (including the determination and implementation of the payment amount), or to carry out
(ii) to permit the Comptroller General of the United States to review the information provided;
(iii) to permit the Director of the Congressional Budget Office to review the information provided;
(iv) to permit the Medicare Payment Advisory Commission to review the information provided; and
(v) to permit the Medicaid and CHIP Payment and Access Commission to review the information provided.
(g) Payment adjustment for certain drugs for which there is a self-administered NDC
(1) OIG studies
The Inspector General of the Department of Health and Human Services shall conduct periodic studies to identify National Drug Codes for drug or biological products that are self-administered for which payment may not be made under this part because such products are not covered pursuant to
(2) Payment adjustment
If the Inspector General identifies a National Drug Code for a drug or biological product under paragraph (1), the Inspector General shall inform the Secretary (at such times as the Secretary may specify to carry out this paragraph) and the Secretary shall, to the extent the Secretary deems appropriate, apply as the amount of payment under this section for the applicable billing and payment code the lesser of—
(A) the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such product so identified under paragraph (1) were excluded from such determination; or
(B) the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.
(3) Application to certain identified products
In the case of a National Drug Code for a drug or biological product that is self-administered for which payment is not made under this part because such product is not covered pursuant to
(A) the amount of payment that would be determined under this section for such billing and payment code if such National Drug Code for such drug or biological products so identified were excluded from such determination; or
(B) the amount of payment otherwise determined under this section for such billing and payment code without application of this subsection.
(h) Refund for certain discarded single-dose container or single-use package drugs
(1) Secretarial provision of information
(A) In general
For each calendar quarter beginning on or after January 1, 2023, the Secretary shall, with respect to a refundable single-dose container or single-use package drug (as defined in paragraph (8)), report to each manufacturer (as defined in subsection (c)(6)(A)) of such refundable single-dose container or single-use package drug the following for the calendar quarter:
(i) Subject to subparagraph (C), information on the total number of units of the billing and payment code of such drug, if any, that were discarded during such quarter, as determined using a mechanism such as the JW modifier used as of November 15, 2021 (or any such successor modifier that includes such data as determined appropriate by the Secretary).
(ii) The refund amount that the manufacturer is liable for pursuant to paragraph (3).
(B) Determination of discarded amounts
For purposes of subparagraph (A)(i), with respect to a refundable single-dose container or single-use package drug furnished during a quarter, the amount of such drug that was discarded shall be determined based on the amount of such drug that was unused and discarded for each drug on the date of service.
(C) Exclusion of units of packaged drugs
The total number of units of the billing and payment code of a refundable single-dose container or single-use package drug of a manufacturer furnished during a calendar quarter for purposes of subparagraph (A)(i), and the determination of the estimated total allowed charges for the drug in the quarter for purposes of paragraph (3)(A)(ii), shall not include such units that are packaged into the payment amount for an item or service and are not separately payable.
(2) Manufacturer requirement
For each calendar quarter beginning on or after January 1, 2023, the manufacturer of a refundable single-dose container or single-use package drug shall, for such drug, provide to the Secretary a refund that is equal to the amount specified in paragraph (3) for such drug for such quarter.
(3) Refund amount
(A) In general
The amount of the refund specified in this paragraph is, with respect to a refundable single-dose container or single-use package drug of a manufacturer assigned to a billing and payment code for a calendar quarter beginning on or after January 1, 2023, an amount equal to the estimated amount (if any) by which—
(i) the product of—
(I) the total number of units of the billing and payment code for such drug that were discarded during such quarter (as determined under paragraph (1)); and
(II)(aa) in the case of a refundable single-dose container or single-use package drug that is a single source drug or biological, the amount of payment determined for such drug or biological under subsection (b)(1)(B) for such quarter; or
(bb) in the case of a refundable single-dose container or single-use package drug that is a biosimilar biological product, the amount of payment determined for such product under subsection (b)(1)(C) for such quarter; exceeds
(ii) an amount equal to the applicable percentage (as defined in subparagraph (B)) of the estimated total allowed charges for such drug under this part during the quarter.
(B) Applicable percentage defined
(i) In general
For purposes of subparagraph (A)(ii), the term "applicable percentage" means—
(I) subject to subclause (II), 10 percent; and
(II) if applicable, in the case of a refundable single-dose container or single-use package drug described in clause (ii), a percentage specified by the Secretary pursuant to such clause.
(ii) Treatment of drugs that have unique circumstances
In the case of a refundable single-dose container or single-use package drug that has unique circumstances involving similar loss of product as that described in paragraph (8)(B)(ii), the Secretary, through notice and comment rulemaking, may increase the applicable percentage otherwise applicable under clause (i)(I) as determined appropriate by the Secretary.
(4) Frequency
Amounts required to be refunded pursuant to paragraph (2) shall be paid in regular intervals (as determined appropriate by the Secretary).
(5) Refund deposits
Amounts paid as refunds pursuant to paragraph (2) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under
(6) Enforcement
(A) Audits
(i) Manufacturer audits
Each manufacturer of a refundable single-dose container or single-use package drug that is required to provide a refund under this subsection shall be subject to periodic audit with respect to such drug and such refunds by the Secretary.
(ii) Provider audits
The Secretary shall conduct periodic audits of claims submitted under this part with respect to refundable single-dose container or single-use package drugs in accordance with the authority under
(B) Civil money penalty
(i) In general
The Secretary shall impose a civil money penalty on a manufacturer of a refundable single-dose container or single-use package drug who has failed to comply with the requirement under paragraph (2) for such drug for a calendar quarter in an amount equal to the sum of—
(I) the amount that the manufacturer would have paid under such paragraph with respect to such drug for such quarter; and
(II) 25 percent of such amount.
(ii) Application
The provisions of
(7) Implementation
The Secretary shall implement this subsection through notice and comment rulemaking.
(8) Definition of refundable single-dose container or single-use package drug
(A) In general
Except as provided in subparagraph (B), in this subsection, the term "refundable single-dose container or single-use package drug" means a single source drug or biological (as defined in subsection (c)(6)(D)) or a biosimilar biological product (as defined in subsection (c)(6)(H)) for which payment is made under this part and that is furnished from a single-dose container or single-use package.
(B) Exclusions
The term "refundable single-dose container or single-use package drug" does not include—
(i) a drug or biological that is either a radiopharmaceutical or an imaging agent;
(ii) a drug or biological approved by the Food and Drug Administration for which dosage and administration instructions included in the labeling require filtration during the drug preparation process, prior to dilution and administration, and require that any unused portion of such drug after the filtration process be discarded after the completion of such filtration process; or
(iii) a drug or biological approved by the Food and Drug Administration on or after November 15, 2021, and with respect to which payment has been made under this part for fewer than 18 months.
(9) Report to Congress
Not later than 3 years after November 15, 2021, the Office of the Inspector General, after consultation with the Centers for Medicare & Medicaid Services and the Food and Drug Administration, shall submit to the Committee on Finance of the Senate and the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives, a report on any impact this section is reported to have on the licensure, market entry, market retention, or marketing of biosimilar biological products. Such report shall be updated periodically at the direction of the Committee on Finance of the Senate and the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives.
(i) Rebate by manufacturers for single source drugs and biologicals with prices increasing faster than inflation
(1) Requirements
(A) Secretarial provision of information
Not later than 6 months after the end of each calendar quarter beginning on or after January 1, 2023, the Secretary shall, for each part B rebatable drug, report to each manufacturer of such part B rebatable drug the following for such calendar quarter:
(i) Information on the total number of units of the billing and payment code described in subparagraph (A)(i) of paragraph (3) with respect to such drug and calendar quarter.
(ii) Information on the amount (if any) of the excess average sales price increase described in subparagraph (A)(ii) of such paragraph for such drug and calendar quarter.
(iii) The rebate amount specified under such paragraph for such part B rebatable drug and calendar quarter.
(B) Manufacturer requirement
For each calendar quarter beginning on or after January 1, 2023, the manufacturer of a part B rebatable drug shall, for such drug, not later than 30 days after the date of receipt from the Secretary of the information described in subparagraph (A) for such calendar quarter, provide to the Secretary a rebate that is equal to the amount specified in paragraph (3) for such drug for such calendar quarter.
(C) Transition rule for reporting
The Secretary may, for each part B rebatable drug, delay the timeframe for reporting the information described in subparagraph (A) for calendar quarters beginning in 2023 and 2024 until not later than September 30, 2025.
(2) Part B rebatable drug defined
(A) In general
In this subsection, the term "part B rebatable drug" means a single source drug or biological (as defined in subparagraph (D) of subsection (c)(6)), including a biosimilar biological product (as defined in subparagraph (H) of such subsection) but excluding a qualifying biosimilar biological product (as defined in subsection (b)(8)(B)(iii)), for which payment is made under this part, except such term shall not include such a drug or biological—
(i) if, as determined by the Secretary, the average total allowed charges for such drug or biological under this part for a year per individual that uses such a drug or biological are less than, subject to subparagraph (B), $100; or
(ii) that is a vaccine described in subparagraph (A) or (B) of
(B) Increase
The dollar amount applied under subparagraph (A)(i)—
(i) for 2024, shall be the dollar amount specified under such subparagraph for 2023, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year; and
(ii) for a subsequent year, shall be the dollar amount specified in this clause (or clause (i)) for the previous year (without application of subparagraph (C)), increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year.
(C) Rounding
Any dollar amount determined under subparagraph (B) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(3) Rebate amount
(A) In general
For purposes of paragraph (1), the amount specified in this paragraph for a part B rebatable drug assigned to a billing and payment code for a calendar quarter is, subject to subparagraphs (B) and (G) and paragraph (4), the estimated amount equal to the product of—
(i) the total number of units determined under subparagraph (B) for the billing and payment code of such drug; and
(ii) the amount (if any) by which—
(I) the amount equal to—
(aa) in the case of a part B rebatable drug described in paragraph (1)(B) of subsection (b), 106 percent of the amount determined under paragraph (4) of such section 2 for such drug during the calendar quarter; or
(bb) in the case of a part B rebatable drug described in paragraph (1)(C) of such subsection, the payment amount under such paragraph for such drug during the calendar quarter; exceeds
(II) the inflation-adjusted payment amount determined under subparagraph (C) for such part B rebatable drug during the calendar quarter.
(B) Total number of units
For purposes of subparagraph (A)(i), the total number of units for the billing and payment code with respect to a part B rebatable drug furnished during a calendar quarter described in subparagraph (A) is equal to—
(i) the number of units for the billing and payment code of such drug furnished during such calendar quarter, minus
(ii) the number of units for such billing and payment code of such drug furnished during such calendar quarter—
(I) with respect to which the manufacturer provides a discount under the program under
(II) that are packaged into the payment amount for an item or service and are not separately payable.
(C) Determination of inflation-adjusted payment amount
The inflation-adjusted payment amount determined under this subparagraph for a part B rebatable drug for a calendar quarter is—
(i) the payment amount for the billing and payment code for such drug in the payment amount benchmark quarter (as defined in subparagraph (D)); increased by
(ii) the percentage by which the rebate period CPI–U (as defined in subparagraph (F)) for the calendar quarter exceeds the benchmark period CPI–U (as defined in subparagraph (E)).
(D) Payment amount benchmark quarter
The term "payment amount benchmark quarter" means the calendar quarter beginning July 1, 2021.
(E) Benchmark period CPI–U
The term "benchmark period CPI–U" means the consumer price index for all urban consumers (United States city average) for January 2021.
(F) Rebate period CPI–U
The term "rebate period CPI–U" means, with respect to a calendar quarter described in subparagraph (C), the greater of the benchmark period CPI–U and the consumer price index for all urban consumers (United States city average) for the first month of the calendar quarter that is two calendar quarters prior to such described calendar quarter.
(G) Reduction or waiver for shortages and severe supply chain disruptions
The Secretary shall reduce or waive the amount under subparagraph (A) with respect to a part B rebatable drug and a calendar quarter—
(i) in the case of a part B rebatable drug that is described as currently in shortage on the shortage list in effect under
(ii) in the case of a biosimilar biological product, when the Secretary determines there is a severe supply chain disruption during the calendar quarter, such as that caused by a natural disaster or other unique or unexpected event.
(4) Special treatment of certain drugs and exemption
(A) Subsequently approved drugs
In the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after December 1, 2020, clause (i) of paragraph (3)(C) shall be applied as if the term "payment amount benchmark quarter" were defined under paragraph (3)(D) as the third full calendar quarter after the day on which the drug was first marketed and clause (ii) of paragraph (3)(C) shall be applied as if the term "benchmark period CPI–U" were defined under paragraph (3)(E) as if the reference to "January 2021" under such paragraph were a reference to "the first month of the first full calendar quarter after the day on which the drug was first marketed".
(B) Timeline for provision of rebates for subsequently approved drugs
In the case of a part B rebatable drug first approved or licensed by the Food and Drug Administration after December 1, 2020, paragraph (1)(B) shall be applied as if the reference to "January 1, 2023" under such paragraph were a reference to "the later of the 6th full calendar quarter after the day on which the drug was first marketed or January 1, 2023".
(C) Selected drugs
In the case of a part B rebatable drug that is a selected drug (as defined in
(5) Application to beneficiary coinsurance
In the case of a part B rebatable drug furnished on or after April 1, 2023, if the payment amount described in paragraph (3)(A)(ii)(I) (or, in the case of a part B rebatable drug that is a selected drug (as defined in
(A) in computing the amount of any coinsurance applicable under this part to an individual to whom such drug is furnished, the computation of such coinsurance shall be equal to 20 percent of the inflation-adjusted payment amount determined under paragraph (3)(C) for such part B rebatable drug; and
(B) the amount of such coinsurance for such calendar quarter, as computed under subparagraph (A), shall be applied as a percent, as determined by the Secretary, to the payment amount that would otherwise apply under subparagraphs (B) or (C) of subsection (b)(1).
(6) Rebate deposits
Amounts paid as rebates under paragraph (1)(B) shall be deposited into the Federal Supplementary Medical Insurance Trust Fund established under
(7) Civil money penalty
If a manufacturer of a part B rebatable drug has failed to comply with the requirements under paragraph (1)(B) for such drug for a calendar quarter, the manufacturer shall be subject to, in accordance with a process established by the Secretary pursuant to regulations, a civil money penalty in an amount equal to at least 125 percent of the amount specified in paragraph (3) for such drug for such calendar quarter. The provisions of
(8) Limitation on administrative or judicial review
There shall be no administrative or judicial review of any of the following:
(A) The determination of units under this subsection.
(B) The determination of whether a drug is a part B rebatable drug under this subsection.
(C) The calculation of the rebate amount under this subsection.
(D) The computation of coinsurance under paragraph (5) of this subsection.
(E) The computation of amounts paid under
(j) Judicial review
There shall be no administrative or judicial review under
(1) determinations of payment amounts under this section, including the assignment of National Drug Codes to billing and payment codes;
(2) the identification of units (and package size) under subsection (b)(2);
(3) the method to allocate rebates, chargebacks, and other price concessions to a quarter if specified by the Secretary;
(4) the manufacturer's average sales price when it is used for the determination of a payment amount under this section; and
(5) the disclosure of the average manufacturer price by reason of an adjustment under subsection (d)(3)(C) or (e).
(Aug. 14, 1935, ch. 531, title XVIII, §1847A, as added
Editorial Notes
References in Text
Subsection (g)(7), referred to in subsec. (i)(4)(C), does not define "applicable period" because subsec. (g) of this section does not have a par. (7). However, such term is defined in
Amendments
2022—Subsec. (b)(1)(B).
Subsec. (b)(8).
Subsec. (c)(3).
Subsec. (c)(4).
Subsecs. (i), (j).
2021—Subsecs. (h), (i).
2020—Subsec. (b)(2)(A).
Subsec. (b)(3).
Subsec. (b)(6)(A).
Subsec. (c)(6)(A).
Subsec. (d)(4)(A).
Subsec. (d)(4)(B).
Subsec. (d)(4)(C), (D).
Subsec. (d)(4)(E).
Subsec. (f).
Subsecs. (g), (h).
2019—Subsec. (c)(4).
"(A) the wholesale acquisition cost; or
"(B) the methodologies in effect under this part on November 1, 2003, to determine payment amounts for drugs or biologicals."
2010—Subsec. (b)(1)(C).
Subsec. (b)(8).
Subsec. (c)(6)(H), (I).
2007—Subsec. (b)(1).
Subsec. (b)(1)(A).
Subsec. (b)(4)(A), (B).
Subsec. (b)(6).
Subsec. (b)(7).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Report on Sales to Pharmacy Benefit Managers
"(A)
"(B)
Inspector General Report on Adequacy of Reimbursement Rate Under Average Sales Price Methodology
"(A)
"(B)
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
1 So in original. The comma probably should not appear.
2 So in original. Probably should be "subsection".
3 See References in Text note below.
§1395w–3b. Competitive acquisition of outpatient drugs and biologicals
(a) Implementation of competitive acquisition
(1) Implementation of program
(A) In general
The Secretary shall establish and implement a competitive acquisition program under which—
(i) competitive acquisition areas are established for contract award purposes for acquisition of and payment for categories of competitively biddable drugs and biologicals (as defined in paragraph (2)) under this part;
(ii) each physician is given the opportunity annually to elect to obtain drugs and biologicals under the program, rather than under
(iii) each physician who elects to obtain drugs and biologicals under the program makes an annual selection under paragraph (5) of the contractor through which drugs and biologicals within a category of drugs and biologicals will be acquired and delivered to the physician under this part.
This section shall not apply in the case of a physician who elects
(B) Implementation
For purposes of implementing the program, the Secretary shall establish categories of competitively biddable drugs and biologicals. The Secretary shall phase in the program with respect to those categories beginning in 2006 in such manner as the Secretary determines to be appropriate.
(C) Waiver of certain provisions
In order to promote competition, in carrying out the program the Secretary may waive such provisions of the Federal Acquisition Regulation as are necessary for the efficient implementation of this section, other than provisions relating to confidentiality of information and such other provisions as the Secretary determines appropriate.
(D) Exclusion authority
The Secretary may exclude competitively biddable drugs and biologicals (including a class of such drugs and biologicals) from the competitive bidding system under this section if the application of competitive bidding to such drugs or biologicals—
(i) is not likely to result in significant savings; or
(ii) is likely to have an adverse impact on access to such drugs or biologicals.
(2) Competitively biddable drugs and biologicals and program defined
For purposes of this section—
(A) Competitively biddable drugs and biologicals defined
The term "competitively biddable drugs and biologicals" means a drug or biological described in
(B) Program
The term "program" means the competitive acquisition program under this section.
(C) Competitive acquisition area; area
The terms "competitive acquisition area" and "area" mean an appropriate geographic region established by the Secretary under the program.
(D) Contractor
The term "contractor" means an entity that has entered into a contract with the Secretary under this section.
(3) Application of program payment methodology
(A) In general
With respect to competitively biddable drugs and biologicals which are supplied under the program in an area and which are prescribed by a physician who has elected this section to apply—
(i) the claim for such drugs and biologicals shall be submitted by the contractor that supplied the drugs and biologicals;
(ii) collection of amounts of any deductible and coinsurance applicable with respect to such drugs and biologicals shall be the responsibility of such contractor and shall not be collected unless the drug or biological is administered to the individual involved; and
(iii) the payment under this section (and related amounts of any applicable deductible and coinsurance) for such drugs and biologicals shall be made only to such contractor upon receipt of a claim for a drug or biological supplied by the contractor for administration to a beneficiary.
(B) Process for adjustments
The Secretary shall provide a process for adjustments to payments in the case in which payment is made for drugs and biologicals which were billed at the time of dispensing but which were not actually administered.
(C) Information for purposes of cost-sharing
The Secretary shall provide a process by which physicians submit information to contractors for purposes of the collection of any applicable deductible or coinsurance amounts under subparagraph (A)(ii).
(D) Post-payment review process
The Secretary shall establish (by program instruction or otherwise) a post-payment review process (which may include the use of statistical sampling) to assure that payment is made for a drug or biological under this section only if the drug or biological has been administered to a beneficiary. The Secretary shall recoup, offset, or collect any overpayments determined by the Secretary under such process.
(4) Contract required
Payment may not be made under this part for competitively biddable drugs and biologicals prescribed by a physician who has elected this section to apply within a category and a competitive acquisition area with respect to which the program applies unless—
(A) the drugs or biologicals are supplied by a contractor with a contract under this section for such category of drugs and biologicals and area; and
(B) the physician has elected such contractor under paragraph (5) for such category and area.
(5) Contractor selection process
(A) Annual selection
(i) In general
The Secretary shall provide a process for the selection of a contractor, on an annual basis and in such exigent circumstances as the Secretary may provide and with respect to each category of competitively biddable drugs and biologicals for an area by selecting physicians.
(ii) Timing of selection
The selection of a contractor under clause (i) shall be made at the time of the election described in
(B) Information on contractors
The Secretary shall make available to physicians on an ongoing basis, through a directory posted on the Internet website of the Centers for Medicare & Medicaid Services or otherwise and upon request, a list of the contractors under this section in the different competitive acquisition areas.
(C) Selecting physician defined
For purposes of this section, the term "selecting physician" means, with respect to a contractor and category and competitive acquisition area, a physician who has elected this section to apply and has selected to apply under this section such contractor for such category and area.
(b) Program requirements
(1) Contract for competitively biddable drugs and biologicals
The Secretary shall conduct a competition among entities for the acquisition of competitively biddable drugs and biologicals. Notwithstanding any other provision of this subchapter, in the case of a multiple source drug, the Secretary shall conduct such competition among entities for the acquisition of at least one competitively biddable drug and biological within each billing and payment code within each category for each competitive acquisition area.
(2) Conditions for awarding contract
(A) In general
The Secretary may not award a contract to any entity under the competition conducted in a competitive acquisition area pursuant to paragraph (1) with respect to the acquisition of competitively biddable drugs and biologicals within a category unless the Secretary finds that the entity meets all of the following with respect to the contract period involved:
(i) Capacity to supply competitively biddable drug or biological within category
(I) In general
The entity has sufficient arrangements to acquire and to deliver competitively biddable drugs and biologicals within such category in the area specified in the contract.
(II) Shipment methodology
The entity has arrangements in effect for the shipment at least 5 days each week of competitively biddable drugs and biologicals under the contract and for the timely delivery (including for emergency situations) of such drugs and biologicals in the area under the contract.
(ii) Quality, service, financial performance and solvency standards
The entity meets quality, service, financial performance, and solvency standards specified by the Secretary, including—
(I) the establishment of procedures for the prompt response and resolution of complaints of physicians and individuals and of inquiries regarding the shipment of competitively biddable drugs and biologicals; and
(II) a grievance and appeals process for the resolution of disputes.
(B) Additional considerations
The Secretary may refuse to award a contract under this section, and may terminate such a contract, with an entity based upon—
(i) the suspension or revocation, by the Federal Government or a State government, of the entity's license for the distribution of drugs or biologicals (including controlled substances); or
(ii) the exclusion of the entity under
(C) Application of Medicare Provider Ombudsman
For provision providing for a program-wide Medicare Provider Ombudsman to review complaints, see
(3) Awarding multiple contracts for a category and area
The Secretary may limit (but not below 2) the number of qualified entities that are awarded such contracts for any category and area. The Secretary shall select among qualified entities based on the following:
(A) The bid prices for competitively biddable drugs and biologicals within the category and area.
(B) Bid price for distribution of such drugs and biologicals.
(C) Ability to ensure product integrity.
(D) Customer service.
(E) Past experience in the distribution of drugs and biologicals, including controlled substances.
(F) Such other factors as the Secretary may specify.
(4) Terms of contracts
(A) In general
A contract entered into with an entity under the competition conducted pursuant to paragraph (1) is subject to terms and conditions that the Secretary may specify consistent with this section.
(B) Period of contracts
A contract under this section shall be for a term of 3 years, but may be terminated by the Secretary or the entity with appropriate, advance notice.
(C) Integrity of drug and biological distribution system
A contractor (as defined in subsection (a)(2)(D)) shall—
(i) acquire all drug and biological products it distributes directly from the manufacturer or from a distributor that has acquired the products directly from the manufacturer; and
(ii) comply with any product integrity safeguards as may be determined to be appropriate by the Secretary.
Nothing in this subparagraph shall be construed to relieve or exempt any contractor from the provisions of the Federal Food, Drug, and Cosmetic Act [
(D) Compliance with code of conduct and fraud and abuse rules
Under the contract—
(i) the contractor shall comply with a code of conduct, specified or recognized by the Secretary, that includes standards relating to conflicts of interest; and
(ii) the contractor shall comply with all applicable provisions relating to prevention of fraud and abuse, including compliance with applicable guidelines of the Department of Justice and the Inspector General of the Department of Health and Human Services.
(E) Direct delivery of drugs and biologicals to physicians
Under the contract the contractor shall only supply competitively biddable drugs and biologicals directly to the selecting physicians and not directly to individuals, except under circumstances and settings where an individual currently receives a drug or biological in the individual's home or other non-physician office setting as the Secretary may provide. The contractor shall not deliver drugs and biologicals to a selecting physician except upon receipt of a prescription for such drugs and biologicals, and such necessary data as may be required by the Secretary to carry out this section. This section does not—
(i) require a physician to submit a prescription for each individual treatment; or
(ii) change a physician's flexibility in terms of writing a prescription for drugs or biologicals for a single treatment or a course of treatment.
(5) Permitting access to drugs and biologicals
The Secretary shall establish rules under this section under which drugs and biologicals which are acquired through a contractor under this section may be used to resupply inventories of such drugs and biologicals which are administered consistent with safe drug practices and with adequate safeguards against fraud and abuse. The previous sentence shall apply if the physicians can demonstrate to the Secretary all of the following:
(A) The drugs or biologicals are required immediately.
(B) The physician could not have reasonably anticipated the immediate requirement for the drugs or biologicals.
(C) The contractor could not deliver to the physician the drugs or biologicals in a timely manner.
(D) The drugs or biologicals were administered in an emergency situation.
(6) Construction
Nothing in this section shall be construed as waiving applicable State requirements relating to licensing of pharmacies.
(c) Bidding process
(1) In general
In awarding a contract for a category of drugs and biologicals in an area under the program, the Secretary shall consider with respect to each entity seeking to be awarded a contract the bid price and the other factors referred to in subsection (b)(3).
(2) Bid defined
In this section, the term "bid" means an offer to furnish a competitively biddable drug or biological for a particular price and time period.
(3) Bidding on a national or regional basis
Nothing in this section shall be construed as precluding a bidder from bidding for contracts in all areas of the United States or as requiring a bidder to submit a bid for all areas of the United States.
(4) Uniformity of bids within area
The amount of the bid submitted under a contract offer for any competitively biddable drug or biological for an area shall be the same for that drug or biological for all portions of that area.
(5) Confidentiality of bids
The provisions of subparagraph (D) of
(A) in that subparagraph to a "manufacturer or wholesaler" is deemed a reference to a "bidder" under this section;
(B) in that section to "prices charged for drugs" is deemed a reference to a "bid" submitted under this section; and
(C) in clause (i) of that section to "this section", is deemed a reference to "part B of subchapter XVIII".
(6) Inclusion of costs
The bid price submitted in a contract offer for a competitively biddable drug or biological shall—
(A) include all costs related to the delivery of the drug or biological to the selecting physician (or other point of delivery); and
(B) include the costs of dispensing (including shipping) of such drug or biological and management fees, but shall not include any costs related to the administration of the drug or biological, or wastage, spillage, or spoilage.
(7) Price adjustments during contract period; disclosure of costs
Each contract awarded shall provide for—
(A) disclosure to the Secretary the contractor's reasonable, net acquisition costs for periods specified by the Secretary, not more often than quarterly, of the contract; and
(B) appropriate price adjustments over the period of the contract to reflect significant increases or decreases in a contractor's reasonable, net acquisition costs, as so disclosed.
(d) Computation of payment amounts
(1) In general
Payment under this section for competitively biddable drugs or biologicals shall be based on bids submitted and accepted under this section for such drugs or biologicals in an area. Based on such bids the Secretary shall determine a single payment amount for each competitively biddable drug or biological in the area.
(2) Special rules
The Secretary shall establish rules regarding the use under this section of the alternative payment amount provided under
(A) New drugs and biologicals
A competitively biddable drug or biological for which a payment and billing code has not been established.
(B) Other cases
Such other exceptional cases as the Secretary may specify in regulations.
(e) Cost-sharing
(1) Application of coinsurance
Payment under this section for competitively biddable drugs and biologicals shall be in an amount equal to 80 percent of the payment basis described in subsection (d)(1).
(2) Deductible
Before applying paragraph (1), the individual shall be required to meet the deductible described in
(3) Collection
Such coinsurance and deductible shall be collected by the contractor that supplies the drug or biological involved. Subject to subsection (a)(3)(B), such coinsurance and deductible may be collected in a manner similar to the manner in which the coinsurance and deductible are collected for durable medical equipment under this part.
(f) Special payment rules
(1) Use in exclusion cases
If the Secretary excludes a drug or biological (or class of drugs or biologicals) under subsection (a)(1)(D), the Secretary may provide for payment to be made under this part for such drugs and biologicals (or class) using the payment methodology under
(2) Application of requirement for assignment
For provision requiring assignment of claims for competitively biddable drugs and biologicals, see
(3) Protection for beneficiary in case of medical necessity denial
For protection of individuals against liability in the case of medical necessity determinations, see
(g) Judicial review
There shall be no administrative or judicial review under
(1) the establishment of payment amounts under subsection (d)(1);
(2) the awarding of contracts under this section;
(3) the establishment of competitive acquisition areas under subsection (a)(2)(C);
(4) the phased-in implementation under subsection (a)(1)(B);
(5) the selection of categories of competitively biddable drugs and biologicals for competitive acquisition under such subsection or the selection of a drug in the case of multiple source drugs; or
(6) the bidding structure and number of contractors selected under this section.
(Aug. 14, 1935, ch. 531, title XVIII, §1847B, as added
Editorial Notes
References in Text
The Federal Food, Drug, and Cosmetic Act, referred to in subsec. subsec. (b)(4)(C), is act June 25, 1938, ch. 675,
Amendments
2006—Subsec. (a)(3)(A)(iii).
"(I) shall be made only to such contractor; and
"(II) shall be conditioned upon the administration of such drugs and biologicals."
Subsec. (a)(3)(D).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
"(1) on or after April 1, 2007; and
"(2) on or after July 1, 2006, and before April 1, 2007, for claims that are unpaid as of April 1, 2007."
Construction of 2006 Amendment
"(1) requiring the conduct of any additional competition under subsection (b)(1) of section 1847B of the Social Security Act (
"(2) requiring any additional process for elections by physicians under subsection (a)(1)(A)(ii) of such section or additional selection by a selecting physician of a contractor under subsection (a)(5) of such section."
Report
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
1 See References in Text note below.
§1395w–4. Payment for physicians' services
(a) Payment based on fee schedule
(1) In general
Effective for all physicians' services (as defined in subsection (j)(3)) furnished under this part during a year (beginning with 1992) for which payment is otherwise made on the basis of a reasonable charge or on the basis of a fee schedule under
(A) the actual charge for the service, or
(B) subject to the succeeding provisions of this subsection, the amount determined under the fee schedule established under subsection (b) for services furnished during that year (in this subsection referred to as the "fee schedule amount").
(2) Transition to full fee schedule
(A) Limiting reductions and increases to 15 percent in 1992
(i) Limit on increase
In the case of a service in a fee schedule area (as defined in subsection (j)(2)) for which the adjusted historical payment basis (as defined in subparagraph (D)) is less than 85 percent of the fee schedule amount for services furnished in 1992, there shall be substituted for the fee schedule amount an amount equal to the adjusted historical payment basis plus 15 percent of the fee schedule amount otherwise established (without regard to this paragraph).
(ii) Limit in reduction
In the case of a service in a fee schedule area for which the adjusted historical payment basis exceeds 115 percent of the fee schedule amount for services furnished in 1992, there shall be substituted for the fee schedule amount an amount equal to the adjusted historical payment basis minus 15 percent of the fee schedule amount otherwise established (without regard to this paragraph).
(B) Special rule for 1993, 1994, and 1995
If a physicians' service in a fee schedule area is subject to the provisions of subparagraph (A) in 1992, for physicians' services furnished in the area—
(i) during 1993, there shall be substituted for the fee schedule amount an amount equal to the sum of—
(I) 75 percent of the fee schedule amount determined under subparagraph (A), adjusted by the update established under subsection (d)(3) for 1993, and
(II) 25 percent of the fee schedule amount determined under paragraph (1) for 1993 without regard to this paragraph;
(ii) during 1994, there shall be substituted for the fee schedule amount an amount equal to the sum of—
(I) 67 percent of the fee schedule amount determined under clause (i), adjusted by the update established under subsection (d)(3) for 1994 and as adjusted under subsection (c)(2)(F)(ii) and under section 13515(b) of the Omnibus Budget Reconciliation Act of 1993, and
(II) 33 percent of the fee schedule amount determined under paragraph (1) for 1994 without regard to this paragraph; and
(iii) during 1995, there shall be substituted for the fee schedule amount an amount equal to the sum of—
(I) 50 percent of the fee schedule amount determined under clause (ii) adjusted by the update established under subsection (d)(3) for 1995, and
(II) 50 percent of the fee schedule amount determined under paragraph (1) for 1995 without regard to this paragraph.
(C) Special rule for anesthesia and radiology services
With respect to physicians' services which are anesthesia services, the Secretary shall provide for a transition in the same manner as a transition is provided for other services under subparagraph (B). With respect to radiology services, "109 percent" and "9 percent" shall be substituted for "115 percent" and "15 percent", respectively, in subparagraph (A)(ii).
(D) "Adjusted historical payment basis" defined
(i) In general
In this paragraph, the term "adjusted historical payment basis" means, with respect to a physicians' service furnished in a fee schedule area, the weighted average prevailing charge applied in the area for the service in 1991 (as determined by the Secretary without regard to physician specialty and as adjusted to reflect payments for services with customary charges below the prevailing charge or other payment limitations imposed by law or regulation) adjusted by the update established under subsection (d)(3) for 1992.
(ii) Application to radiology services
In applying clause (i) in the case of physicians' services which are radiology services (including radiologist services, as defined in
(iii) Nuclear medicine services
In applying clause (i) in the case of physicians' services which are nuclear medicine services, there shall be substituted for the weighted average prevailing charge the amount provided under section 6105(b) of the Omnibus Budget Reconciliation Act of 1989.
(3) Incentives for participating physicians and suppliers
In applying paragraph (1)(B) in the case of a nonparticipating physician or a nonparticipating supplier or other person, the fee schedule amount shall be 95 percent of such amount otherwise applied under this subsection (without regard to this paragraph). In the case of physicians' services (including services which the Secretary excludes pursuant to subsection (j)(3)) of a nonparticipating physician, supplier, or other person for which payment is made under this part on a basis other than the fee schedule amount, the payment shall be based on 95 percent of the payment basis for such services furnished by a participating physician, supplier, or other person.
(4) Special rule for medical direction
(A) In general
With respect to physicians' services furnished on or after January 1, 1994, and consisting of medical direction of two, three, or four concurrent anesthesia cases, except as provided in paragraph (5), the fee schedule amount to be applied shall be equal to one-half of the amount described in subparagraph (B).
(B) Amount
The amount described in this subparagraph, for a physician's medical direction of the performance of anesthesia services, is the following percentage of the fee schedule amount otherwise applicable under this section if the anesthesia services were personally performed by the physician alone:
(i) For services furnished during 1994, 120 percent.
(ii) For services furnished during 1995, 115 percent.
(iii) For services furnished during 1996, 110 percent.
(iv) For services furnished during 1997, 105 percent.
(v) For services furnished after 1997, 100 percent.
(5) Incentives for electronic prescribing
(A) Adjustment
(i) In general
Subject to subparagraph (B) and subsection (m)(2)(B), with respect to covered professional services furnished by an eligible professional during 2012, 2013 or 2014, if the eligible professional is not a successful electronic prescriber for the reporting period for the year (as determined under subsection (m)(3)(B)), the fee schedule amount for such services furnished by such professional during the year (including the fee schedule amount for purposes of determining a payment based on such amount) shall be equal to the applicable percent of the fee schedule amount that would otherwise apply to such services under this subsection (determined after application of paragraph (3) but without regard to this paragraph).
(ii) Applicable percent
For purposes of clause (i), the term "applicable percent" means—
(I) for 2012, 99 percent;
(II) for 2013, 98.5 percent; and
(III) for 2014, 98 percent.
(B) Significant hardship exception
The Secretary may, on a case-by-case basis, exempt an eligible professional from the application of the payment adjustment under subparagraph (A) if the Secretary determines, subject to annual renewal, that compliance with the requirement for being a successful electronic prescriber would result in a significant hardship, such as in the case of an eligible professional who practices in a rural area without sufficient Internet access.
(C) Application
(i) Physician reporting system rules
Paragraphs (5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph in the same manner as they apply for purposes of such subsection.
(ii) Incentive payment validation rules
Clauses (ii) and (iii) of subsection (m)(5)(D) shall apply for purposes of this paragraph in a similar manner as they apply for purposes of such subsection.
(D) Definitions
For purposes of this paragraph:
(i) Eligible professional; covered professional services
The terms "eligible professional" and "covered professional services" have the meanings given such terms in subsection (k)(3).
(ii) Physician reporting system
The term "physician reporting system" means the system established under subsection (k).
(iii) Reporting period
The term "reporting period" means, with respect to a year, a period specified by the Secretary.
(6) Special rule for teaching anesthesiologists
With respect to physicians' services furnished on or after January 1, 2010, in the case of teaching anesthesiologists involved in the training of physician residents in a single anesthesia case or two concurrent anesthesia cases, the fee schedule amount to be applied shall be 100 percent of the fee schedule amount otherwise applicable under this section if the anesthesia services were personally performed by the teaching anesthesiologist alone and paragraph (4) shall not apply if—
(A) the teaching anesthesiologist is present during all critical or key portions of the anesthesia service or procedure involved; and
(B) the teaching anesthesiologist (or another anesthesiologist with whom the teaching anesthesiologist has entered into an arrangement) is immediately available to furnish anesthesia services during the entire procedure.
(7) Incentives for meaningful use of certified EHR technology
(A) Adjustment
(i) In general
Subject to subparagraphs (B) and (D), with respect to covered professional services furnished by an eligible professional during each of 2015 through 2018, if the eligible professional is not a meaningful EHR user (as determined under subsection (o)(2)) for an EHR reporting period for the year, the fee schedule amount for such services furnished by such professional during the year (including the fee schedule amount for purposes of determining a payment based on such amount) shall be equal to the applicable percent of the fee schedule amount that would otherwise apply to such services under this subsection (determined after application of paragraph (3) but without regard to this paragraph).
(ii) Applicable percent
Subject to clause (iii), for purposes of clause (i), the term "applicable percent" means—
(I) for 2015, 99 percent (or, in the case of an eligible professional who was subject to the application of the payment adjustment under subsection (a)(5) for 2014, 98 percent);
(II) for 2016, 98 percent; and
(III) for 2017 and 2018, 97 percent.
(iii) Authority to decrease applicable percentage for 2018
For 2018, if the Secretary finds that the proportion of eligible professionals who are meaningful EHR users (as determined under subsection (o)(2)) is less than 75 percent, the applicable percent shall be decreased by 1 percentage point from the applicable percent in the preceding year.
(B) Significant hardship exception
The Secretary may, on a case-by-case basis (and, with respect to the payment adjustment under subparagraph (A) for 2017, for categories of eligible professionals, as established by the Secretary and posted on the Internet website of the Centers for Medicare & Medicaid Services prior to December 15, 2015, an application for which must be submitted to the Secretary by not later than March 15, 2016), exempt an eligible professional from the application of the payment adjustment under subparagraph (A) if the Secretary determines, subject to annual renewal, that compliance with the requirement for being a meaningful EHR user would result in a significant hardship, such as in the case of an eligible professional who practices in a rural area without sufficient Internet access. The Secretary shall exempt an eligible professional from the application of the payment adjustment under subparagraph (A) with respect to a year, subject to annual renewal, if the Secretary determines that compliance with the requirement for being a meaningful EHR user is not possible because the certified EHR technology used by such professional has been decertified under a program kept or recognized pursuant to
(C) Application of physician reporting system rules
Paragraphs (5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph in the same manner as they apply for purposes of such subsection.
(D) Non-application to hospital-based and ambulatory surgical center-based eligible professionals
(i) Hospital-based
No payment adjustment may be made under subparagraph (A) in the case of hospital-based eligible professionals (as defined in subsection (o)(1)(C)(ii)).
(ii) Ambulatory surgical center-based
Subject to clause (iv), no payment adjustment may be made under subparagraph (A) for 2017 and 2018 in the case of an eligible professional with respect to whom substantially all of the covered professional services furnished by such professional are furnished in an ambulatory surgical center.
(iii) Determination
The determination of whether an eligible professional is an eligible professional described in clause (ii) may be made on the basis of—
(I) the site of service (as defined by the Secretary); or
(II) an attestation submitted by the eligible professional.
Determinations made under subclauses (I) and (II) shall be made without regard to any employment or billing arrangement between the eligible professional and any other supplier or provider of services.
(iv) Sunset
Clause (ii) shall no longer apply as of the first year that begins more than 3 years after the date on which the Secretary determines, through notice and comment rulemaking, that certified EHR technology applicable to the ambulatory surgical center setting is available.
(E) Definitions
For purposes of this paragraph:
(i) Covered professional services
The term "covered professional services" has the meaning given such term in subsection (k)(3).
(ii) EHR reporting period
The term "EHR reporting period" means, with respect to a year, a period (or periods) specified by the Secretary.
(iii) Eligible professional
The term "eligible professional" means a physician, as defined in
(8) Incentives for quality reporting
(A) Adjustment
(i) In general
With respect to covered professional services furnished by an eligible professional during each of 2015 through 2018, if the eligible professional does not satisfactorily submit data on quality measures for covered professional services for the quality reporting period for the year (as determined under subsection (m)(3)(A)), the fee schedule amount for such services furnished by such professional during the year (including the fee schedule amount for purposes of determining a payment based on such amount) shall be equal to the applicable percent of the fee schedule amount that would otherwise apply to such services under this subsection (determined after application of paragraphs (3), (5), and (7), but without regard to this paragraph).
(ii) Applicable percent
For purposes of clause (i), the term "applicable percent" means—
(I) for 2015, 98.5 percent; and
(II) for 2016, 2017, and 2018, 98 percent.
(B) Application
(i) Physician reporting system rules
Paragraphs (5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph in the same manner as they apply for purposes of such subsection.
(ii) Incentive payment validation rules
Clauses (ii) and (iii) of subsection (m)(5)(D) shall apply for purposes of this paragraph in a similar manner as they apply for purposes of such subsection.
(C) Definitions
For purposes of this paragraph:
(i) Eligible professional; covered professional services
The terms "eligible professional" and "covered professional services" have the meanings given such terms in subsection (k)(3).
(ii) Physician reporting system
The term "physician reporting system" means the system established under subsection (k).
(iii) Quality reporting period
The term "quality reporting period" means, with respect to a year, a period specified by the Secretary.
(9) Information reporting on services included in global surgical packages
With respect to services for which a physician is required to report information in accordance with subsection (c)(8)(B)(i), the Secretary may through rulemaking delay payment of 5 percent of the amount that would otherwise be payable under the physician fee schedule under this section for such services until the information so required is reported.
(b) Establishment of fee schedules
(1) In general
Before November 1 of the preceding year, for each year beginning with 1998, subject to subsection (p), the Secretary shall establish, by regulation, fee schedules that establish payment amounts for all physicians' services furnished in all fee schedule areas (as defined in subsection (j)(2)) for the year. Except as provided in paragraph (2), each such payment amount for a service shall be equal to the product of—
(A) the relative value for the service (as determined in subsection (c)(2)),
(B) the conversion factor (established under subsection (d)) for the year, and
(C) the geographic adjustment factor (established under subsection (e)(2)) for the service for the fee schedule area.
(2) Treatment of radiology services and anesthesia services
(A) Radiology services
With respect to radiology services (including radiologist services, as defined in
(B) Anesthesia services
In establishing the fee schedule for anesthesia services for which a relative value guide has been established under section 4048(b) of the Omnibus Budget Reconciliation Act of 1987, the Secretary shall use, to the extent practicable, such relative value guide, with appropriate adjustment of the conversion factor, in a manner to assure that the fee schedule amounts for anesthesia services are consistent with the fee schedule amounts for other services determined by the Secretary to be of comparable value. In applying the previous sentence, the Secretary shall adjust the conversion factor by geographic adjustment factors in the same manner as such adjustment is made under paragraph (1)(C).
(C) Consultation
The Secretary shall consult with the Physician Payment Review Commission and organizations representing physicians or suppliers who furnish radiology services and anesthesia services in applying subparagraphs (A) and (B).
(3) Treatment of interpretation of electrocardiograms
The Secretary—
(A) shall make separate payment under this section for the interpretation of electrocardiograms performed or ordered to be performed as part of or in conjunction with a visit to or a consultation with a physician, and
(B) shall adjust the relative values established for visits and consultations under subsection (c) so as not to include relative value units for interpretations of electrocardiograms in the relative value for visits and consultations.
(4) Special rule for imaging services
(A) In general
In the case of imaging services described in subparagraph (B) furnished on or after January 1, 2007, if—
(i) the technical component (including the technical component portion of a global fee) of the service established for a year under the fee schedule described in paragraph (1) without application of the geographic adjustment factor described in paragraph (1)(C), exceeds
(ii) the Medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department services under paragraph (3)(D) of
the Secretary shall substitute the amount described in clause (ii), adjusted by the geographic adjustment factor described in paragraph (1)(C), for the fee schedule amount for such technical component for such year.
(B) Imaging services described
For purposes of subparagraph (A), imaging services described in this subparagraph are imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including positron emission tomography), magnetic resonance imaging, computed tomography, and fluoroscopy, but excluding diagnostic and screening mammography, and for 2010, 2011, and the first 2 months of 2012, dual-energy x-ray absorptiometry services (as described in paragraph (6)).
(C) Adjustment in imaging utilization rate
With respect to fee schedules established for 2011, 2012, and 2013, in the methodology for determining practice expense relative value units for expensive diagnostic imaging equipment under the final rule published by the Secretary in the Federal Register on November 25, 2009 (42 CFR 410 et al.), the Secretary shall use a 75 percent assumption instead of the utilization rates otherwise established in such final rule. With respect to fee schedules established for 2014 and subsequent years, in such methodology, the Secretary shall use a 90 percent utilization rate.
(D) Adjustment in technical component discount on single-session imaging involving consecutive body parts
For services furnished on or after July 1, 2010, the Secretary shall increase the reduction in payments attributable to the multiple procedure payment reduction applicable to the technical component for imaging under the final rule published by the Secretary in the Federal Register on November 21, 2005 (part 405 of title 42, Code of Federal Regulations) from 25 percent to 50 percent.
(5) Treatment of intensive cardiac rehabilitation program
(A) In general
In the case of an intensive cardiac rehabilitation program described in
(B) Definition of session
Each of the services described in subparagraphs (A) through (E) of
(C) Multiple sessions per day
Payment may be made for up to 6 sessions per day of the series of 72 one-hour sessions of intensive cardiac rehabilitation services described in
(6) Treatment of bone mass scans
For dual-energy x-ray absorptiometry services (identified in 2006 by HCPCS codes 76075 and 76077 (and any succeeding codes)) furnished during 2010, 2011, and the first 2 months of 2012, instead of the payment amount that would otherwise be determined under this section for such years, the payment amount shall be equal to 70 percent of the product of—
(A) the relative value for the service (as determined in subsection (c)(2)) for 2006;
(B) the conversion factor (established under subsection (d)) for 2006; and
(C) the geographic adjustment factor (established under subsection (e)(2)) for the service for the fee schedule area for 2010, 2011, and the first 2 months of 2012, respectively.
(7) Adjustment in discount for certain multiple therapy services
In the case of therapy services furnished on or after January 1, 2011, and before April 1, 2013, and for which payment is made under fee schedules established under this section, instead of the 25 percent multiple procedure payment reduction specified in the final rule published by the Secretary in the Federal Register on November 29, 2010, the reduction percentage shall be 20 percent. In the case of such services furnished on or after April 1, 2013, and for which payment is made under such fee schedules, instead of the 25 percent multiple procedure payment reduction specified in such final rule, the reduction percentage shall be 50 percent.
(8) Encouraging care management for individuals with chronic care needs
(A) In general
In order to encourage the management of care for individuals with chronic care needs the Secretary shall, subject to subparagraph (B), make payment (as the Secretary determines to be appropriate) under this section for chronic care management services furnished on or after January 1, 2015, by a physician (as defined in
(B) Policies relating to payment
In carrying out this paragraph, with respect to chronic care management services, the Secretary shall—
(i) make payment to only one applicable provider for such services furnished to an individual during a period;
(ii) not make payment under subparagraph (A) if such payment would be duplicative of payment that is otherwise made under this subchapter for such services; and
(iii) not require that an annual wellness visit (as defined in
(9) Special rule to incentivize transition from traditional X-ray imaging to digital radiography
(A) Limitation on payment for film X-ray imaging services
In the case of an imaging service (including the imaging portion of a service) that is an X-ray taken using film and that is furnished during 2017 or a subsequent year, the payment amount for the technical component (including the technical component portion of a global service) of such service that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this section) for such year shall be reduced by 20 percent.
(B) Phased-in limitation on payment for computed radiography imaging services
In the case of an imaging service (including the imaging portion of a service) that is an X-ray taken using computed radiography technology—
(i) in the case of such a service furnished during 2018, 2019, 2020, 2021, or 2022, the payment amount for the technical component (including the technical component portion of a global service) of such service that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this section) for such year shall be reduced by 7 percent; and
(ii) in the case of such a service furnished during 2023 or a subsequent year, the payment amount for the technical component (including the technical component portion of a global service) of such service that would otherwise be determined under this section (without application of this paragraph and before application of any other adjustment under this section) for such year shall be reduced by 10 percent.
(C) Computed radiography technology defined
For purposes of this paragraph, the term "computed radiography technology" means cassette-based imaging which utilizes an imaging plate to create the image involved.
(D) Implementation
In order to implement this paragraph, the Secretary shall adopt appropriate mechanisms which may include use of modifiers.
(10) Reduction of discount in payment for professional component of multiple imaging services
In the case of the professional component of imaging services furnished on or after January 1, 2017, instead of the 25 percent reduction for multiple procedures specified in the final rule published by the Secretary in the Federal Register on November 28, 2011, as amended in the final rule published by the Secretary in the Federal Register on November 16, 2012, the reduction percentage shall be 5 percent.
(11) Special rule for certain radiation therapy services
The code definitions, the work relative value units under subsection (c)(2)(C)(i), and the direct inputs for the practice expense relative value units under subsection (c)(2)(C)(ii) for radiation treatment delivery and related imaging services (identified in 2016 by HCPCS G-codes G6001 through G6015) for the fee schedule established under this subsection for services furnished in 2017, 2018, and 2019 shall be the same as such definitions, units, and inputs for such services for the fee schedule established for services furnished in 2016.
(12) Payment for psychotherapy for crisis services furnished in an applicable site of service
(A) In general
The Secretary shall establish new HCPCS codes under the fee schedule established under this subsection for services described in subparagraph (B) that are furnished on or after January 1, 2024.
(B) Services described
The services described in this subparagraph are psychotherapy for crisis services that are a furnished in an applicable site of service.
(C) Amount of payment
For services described in subparagraph (B) that are furnished to an individual in a year (beginning with 2024), in lieu of the fee schedule amount that would otherwise be determined under this subsection for such year, the fee schedule amount for such services for such year shall be equal to 150 percent of the fee schedule amount for non-facility sites of service for such year determined for services identified, as of January 1, 2022, by HCPCS codes 90839 and 90840 (and any succeeding codes).
(D) Definitions
In this paragraph:
(i) Applicable site of service
The term "applicable site of service" means a site of service other than a site where the facility rate under the fee schedule under this subsection applies and other than an office setting.
(ii) Psychotherapy for crisis services
The code descriptions for services described in subparagraph (B) shall be the same as the code descriptions for services identified, as of January 1, 2022, by HCPCS codes 90839 and 90840 (and any succeeding codes), except that such new codes shall be limited to services furnished in an applicable site of service.
(c) Determination of relative values for physicians' services
(1) Division of physicians' services into components
In this section, with respect to a physicians' service:
(A) "Work component" defined
The term "work component" means the portion of the resources used in furnishing the service that reflects physician time and intensity in furnishing the service. Such portion shall—
(i) include activities before and after direct patient contact, and
(ii) be defined, with respect to surgical procedures, to reflect a global definition including pre-operative and post-operative physicians' services.
(B) "Practice expense component" defined
The term "practice expense component" means the portion of the resources used in furnishing the service that reflects the general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising practice expenses.
(C) "Malpractice component" defined
The term "malpractice component" means the portion of the resources used in furnishing the service that reflects malpractice expenses in furnishing the service.
(2) Determination of relative values
(A) In general
(i) Combination of units for components
The Secretary shall develop a methodology for combining the work, practice expense, and malpractice relative value units, determined under subparagraph (C), for each service in a manner to produce a single relative value for that service. Such relative values are subject to adjustment under subparagraph (F)(i) and section 13515(b) of the Omnibus Budget Reconciliation Act of 1993.
(ii) Extrapolation
The Secretary may use extrapolation and other techniques to determine the number of relative value units for physicians' services for which specific data are not available and shall take into account recommendations of the Physician Payment Review Commission and the results of consultations with organizations representing physicians who provide such services.
(B) Periodic review and adjustments in relative values
(i) Periodic review
The Secretary, not less often than every 5 years, shall review the relative values established under this paragraph for all physicians' services.
(ii) Adjustments
(I) In general
The Secretary shall, to the extent the Secretary determines to be necessary and subject to subclause (II) and paragraph (7), adjust the number of such units to take into account changes in medical practice, coding changes, new data on relative value components, or the addition of new procedures. The Secretary shall publish an explanation of the basis for such adjustments.
(II) Limitation on annual adjustments
Subject to clauses (iv) and (v), the adjustments under subclause (I) for a year may not cause the amount of expenditures under this part for the year to differ by more than $20,000,000 from the amount of expenditures under this part that would have been made if such adjustments had not been made.
(iii) Consultation
The Secretary, in making adjustments under clause (ii), shall consult with the Medicare Payment Advisory Commission and organizations representing physicians.
(iv) Exemption of certain additional expenditures from budget neutrality
The additional expenditures attributable to—
(I) subparagraph (H) shall not be taken into account in applying clause (ii)(II) for 2004;
(II) subparagraph (I) insofar as it relates to a physician fee schedule for 2005 or 2006 shall not be taken into account in applying clause (ii)(II) for drug administration services under the fee schedule for such year for a specialty described in subparagraph (I)(ii)(II);
(III) subparagraph (J) insofar as it relates to a physician fee schedule for 2005 or 2006 shall not be taken into account in applying clause (ii)(II) for drug administration services under the fee schedule for such year;
(IV) subsection (b)(6) shall not be taken into account in applying clause (ii)(II) for 2010, 2011, or the first 2 months of 2012;
(V) subsection (t) shall not be taken into account in applying clause (ii)(II) for 2021, 2022, 2023, or 2024; and
(VI) subsection (b)(12) shall not be taken into account in applying clause (ii)(II) for 2024.
(v) Exemption of certain reduced expenditures from budget-neutrality calculation
The following reduced expenditures, as estimated by the Secretary, shall not be taken into account in applying clause (ii)(II):
(I) Reduced payment for multiple imaging procedures
Effective for fee schedules established beginning with 2007, reduced expenditures attributable to the multiple procedure payment reduction for imaging under the final rule published by the Secretary in the Federal Register on November 21, 2005 (42 CFR 405, et al.) insofar as it relates to the physician fee schedules for 2006 and 2007.
(II) OPD payment cap for imaging services
Effective for fee schedules established beginning with 2007, reduced expenditures attributable to subsection (b)(4).
(III) Change in utilization rate for certain imaging services
Effective for fee schedules established beginning with 2011, reduced expenditures attributable to the changes in the utilization rate applicable to 2011 and 2014, as described in the first and second sentence, respectively, of subsection (b)(4)(C).
(IV), (V) Repealed. Pub. L. 111–152, title I, §1107(2), Mar. 30, 2010, 124 Stat. 1050
(VI) Additional reduced payment for multiple imaging procedures
Effective for fee schedules established beginning with 2010 (but not applied for services furnished prior to July 1, 2010), reduced expenditures attributable to the increase in the multiple procedure payment reduction from 25 to 50 percent (as described in subsection (b)(4)(D)).
(VII) Reduced expenditures for multiple therapy services
Effective for fee schedules established beginning with 2011, reduced expenditures attributable to the multiple procedure payment reduction for therapy services (as described in subsection (b)(7)).
(VIII) Reduced expenditures attributable to application of quality incentives for computed tomography
Effective for fee schedules established beginning with 2016, reduced expenditures attributable to the application of the quality incentives for computed tomography under
(IX) Reductions for misvalued services if target not met
Effective for fee schedules beginning with 2016, reduced expenditures attributable to the application of the target recapture amount described in subparagraph (O)(iii).
(X) Reduced expenditures attributable to incentives to transition to digital radiography
Effective for fee schedules established beginning with 2017, reduced expenditures attributable to subparagraph (A) of subsection (b)(9) and effective for fee schedules established beginning with 2018, reduced expenditures attributable to subparagraph (B) of such subsection.
(XI) Discount in payment for professional component of imaging services
Effective for fee schedules established beginning with 2017, reduced expenditures attributable to subsection (b)(10).
(vi) Alternative application of budget-neutrality adjustment
Notwithstanding subsection (d)(9)(A), effective for fee schedules established beginning with 2009, with respect to the 5-year review of work relative value units used in fee schedules for 2007 and 2008, in lieu of continuing to apply budget-neutrality adjustments required under clause (ii) for 2007 and 2008 to work relative value units, the Secretary shall apply such budget-neutrality adjustments to the conversion factor otherwise determined for years beginning with 2009.
(C) Computation of relative value units for components
For purposes of this section for each physicians' service—
(i) Work relative value units
The Secretary shall determine a number of work relative value units for the service or group of services based on the relative resources incorporating physician time and intensity required in furnishing the service or group of services.
(ii) Practice expense relative value units
The Secretary shall determine a number of practice expense relative value units for the service for years before 1999 equal to the product of—
(I) the base allowed charges (as defined in subparagraph (D)) for the service, and
(II) the practice expense percentage for the service (as determined under paragraph (3)(C)(ii)),
and for years beginning with 1999 based on the relative practice expense resources involved in furnishing the service or group of services. For 1999, such number of units shall be determined based 75 percent on such product and based 25 percent on the relative practice expense resources involved in furnishing the service. For 2000, such number of units shall be determined based 50 percent on such product and based 50 percent on such relative practice expense resources. For 2001, such number of units shall be determined based 25 percent on such product and based 75 percent on such relative practice expense resources. For a subsequent year, such number of units shall be determined based entirely on such relative practice expense resources.
(iii) Malpractice relative value units
The Secretary shall determine a number of malpractice relative value units for the service or group of services for years before 2000 equal to the product of—
(I) the base allowed charges (as defined in subparagraph (D)) for the service or group of services, and
(II) the malpractice percentage for the service or group of services (as determined under paragraph (3)(C)(iii)),
and for years beginning with 2000 based on the malpractice expense resources involved in furnishing the service or group of services.
(D) "Base allowed charges" defined
In this paragraph, the term "base allowed charges" means, with respect to a physician's service, the national average allowed charges for the service under this part for services furnished during 1991, as estimated by the Secretary using the most recent data available.
(E) Reduction in practice expense relative value units for certain services
(i) In general
Subject to clause (ii), the Secretary shall reduce the practice expense relative value units applied to services described in clause (iii) furnished in—
(I) 1994, by 25 percent of the number by which the number of practice expense relative value units (determined for 1994 without regard to this subparagraph) exceeds the number of work relative value units determined for 1994,
(II) 1995, by an additional 25 percent of such excess, and
(III) 1996, by an additional 25 percent of such excess.
(ii) Floor on reductions
The practice expense relative value units for a physician's service shall not be reduced under this subparagraph to a number less than 128 percent of the number of work relative value units.
(iii) Services covered
For purposes of clause (i), the services described in this clause are physicians' services that are not described in clause (iv) and for which—
(I) there are work relative value units, and
(II) the number of practice expense relative value units (determined for 1994) exceeds 128 percent of the number of work relative value units (determined for such year).
(iv) Excluded services
For purposes of clause (iii), the services described in this clause are services which the Secretary determines at least 75 percent of which are provided under this subchapter in an office setting.
(F) Budget neutrality adjustments
The Secretary—
(i) shall reduce the relative values for all services (other than anesthesia services) established under this paragraph (and, in the case of anesthesia services, the conversion factor established by the Secretary for such services) by such percentage as the Secretary determines to be necessary so that, beginning in 1996, the amendment made by section 13514(a) of the Omnibus Budget Reconciliation Act of 1993 would not result in expenditures under this section that exceed the amount of such expenditures that would have been made if such amendment had not been made, and
(ii) shall reduce the amounts determined under subsection (a)(2)(B)(ii)(I) by such percentage as the Secretary determines to be required to assure that, taking into account the reductions made under clause (i), the amendment made by section 13514(a) of the Omnibus Budget Reconciliation Act of 1993 would not result in expenditures under this section in 1994 that exceed the amount of such expenditures that would have been made if such amendment had not been made.
(G) Adjustments in relative value units for 1998
(i) In general
The Secretary shall—
(I) subject to clauses (iv) and (v), reduce the practice expense relative value units applied to any services described in clause (ii) furnished in 1998 to a number equal to 110 percent of the number of work relative value units, and
(II) increase the practice expense relative value units for office visit procedure codes during 1998 by a uniform percentage which the Secretary estimates will result in an aggregate increase in payments for such services equal to the aggregate decrease in payments by reason of subclause (I).
(ii) Services covered
For purposes of clause (i), the services described in this clause are physicians' services that are not described in clause (iii) and for which—
(I) there are work relative value units, and
(II) the number of practice expense relative value units (determined for 1998) exceeds 110 percent of the number of work relative value units (determined for such year).
(iii) Excluded services
For purposes of clause (ii), the services described in this clause are services which the Secretary determines at least 75 percent of which are provided under this subchapter in an office setting.
(iv) Limitation on aggregate reallocation
If the application of clause (i)(I) would result in an aggregate amount of reductions under such clause in excess of $390,000,000, such clause shall be applied by substituting for 110 percent such greater percentage as the Secretary estimates will result in the aggregate amount of such reductions equaling $390,000,000.
(v) No reduction for certain services
Practice expense relative value units for a procedure performed in an office or in a setting out of an office shall not be reduced under clause (i) if the in-office or out-of-office practice expense relative value, respectively, for the procedure would increase under the proposed rule on resource-based practice expenses issued by the Secretary on June 18, 1997 (62 Federal Register 33158 et seq.).
(H) Adjustments in practice expense relative value units for certain drug administration services beginning in 2004
(i) Use of survey data
In establishing the physician fee schedule under subsection (b) with respect to payments for services furnished on or after January 1, 2004, the Secretary shall, in determining practice expense relative value units under this subsection, utilize a survey submitted to the Secretary as of January 1, 2003, by a physician specialty organization pursuant to section 212 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 if the survey—
(I) covers practice expenses for oncology drug administration services; and
(II) meets criteria established by the Secretary for acceptance of such surveys.
(ii) Pricing of clinical oncology nurses in practice expense methodology
If the survey described in clause (i) includes data on wages, salaries, and compensation of clinical oncology nurses, the Secretary shall utilize such data in the methodology for determining practice expense relative value units under subsection (c).
(iii) Work relative value units for certain drug administration services
In establishing the relative value units under this paragraph for drug administration services described in clause (iv) furnished on or after January 1, 2004, the Secretary shall establish work relative value units equal to the work relative value units for a level 1 office medical visit for an established patient.
(iv) Drug administration services described
The drug administration services described in this clause are physicians' services—
(I) which are classified as of October 1, 2003, within any of the following groups of procedures: therapeutic or diagnostic infusions (excluding chemotherapy); chemotherapy administration services; and therapeutic, prophylactic, or diagnostic injections;
(II) for which there are no work relative value units assigned under this subsection as of such date; and
(III) for which national relative value units have been assigned under this subsection as of such date.
(I) Adjustments in practice expense relative value units for certain drug administration services beginning with 2005
(i) In general
In establishing the physician fee schedule under subsection (b) with respect to payments for services furnished on or after January 1, 2005 or 2006, the Secretary shall adjust the practice expense relative value units for such year consistent with clause (ii).
(ii) Use of supplemental survey data
(I) In general
Subject to subclause (II), if a specialty submits to the Secretary by not later than March 1, 2004, for 2005, or March 1, 2005, for 2006, data that includes expenses for the administration of drugs and biologicals for which the payment amount is determined pursuant to
(II) Limitation on specialty
Subclause (I) shall apply to a specialty only insofar as not less than 40 percent of payments for the specialty under this subchapter in 2002 are attributable to the administration of drugs and biologicals, as determined by the Secretary.
(III) Application
This clause shall not apply with respect to a survey to which subparagraph (H)(i) applies.
(J) Provisions for appropriate reporting and billing for physicians' services associated with the administration of covered outpatient drugs and biologicals
(i) Evaluation of codes
The Secretary shall promptly evaluate existing drug administration codes for physicians' services to ensure accurate reporting and billing for such services, taking into account levels of complexity of the administration and resource consumption.
(ii) Use of existing processes
In carrying out clause (i), the Secretary shall use existing processes for the consideration of coding changes and, to the extent coding changes are made, shall use such processes in establishing relative values for such services.
(iii) Implementation
In carrying out clause (i), the Secretary shall consult with representatives of physician specialties affected by the implementation of
(iv) Subsequent, budget neutral adjustments permitted
Nothing in subparagraph (H) or (I) or this subparagraph shall be construed as preventing the Secretary from providing for adjustments in practice expense relative value units under (and consistent with) subparagraph (B) for years after 2004, 2005, or 2006, respectively.
(K) Potentially misvalued codes
(i) In general
The Secretary shall—
(I) periodically identify services as being potentially misvalued using criteria specified in clause (ii); and
(II) review and make appropriate adjustments to the relative values established under this paragraph for services identified as being potentially misvalued under subclause (I).
(ii) Identification of potentially misvalued codes
For purposes of identifying potentially misvalued codes pursuant to clause (i)(I), the Secretary shall examine codes (and families of codes as appropriate) based on any or all of the following criteria:
(I) Codes that have experienced the fastest growth.
(II) Codes that have experienced substantial changes in practice expenses.
(III) Codes that describe new technologies or services within an appropriate time period (such as 3 years) after the relative values are initially established for such codes.
(IV) Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service.
(V) Codes with low relative values, particularly those that are often billed multiple times for a single treatment.
(VI) Codes that have not been subject to review since implementation of the fee schedule.
(VII) Codes that account for the majority of spending under the physician fee schedule.
(VIII) Codes for services that have experienced a substantial change in the hospital length of stay or procedure time.
(IX) Codes for which there may be a change in the typical site of service since the code was last valued.
(X) Codes for which there is a significant difference in payment for the same service between different sites of service.
(XI) Codes for which there may be anomalies in relative values within a family of codes.
(XII) Codes for services where there may be efficiencies when a service is furnished at the same time as other services.
(XIII) Codes with high intra-service work per unit of time.
(XIV) Codes with high practice expense relative value units.
(XV) Codes with high cost supplies.
(XVI) Codes as determined appropriate by the Secretary.
(iii) Review and adjustments
(I) The Secretary may use existing processes to receive recommendations on the review and appropriate adjustment of potentially misvalued services described in clause (i)(II).
(II) The Secretary may conduct surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the review and appropriate adjustment described in clause (i)(II).
(III) The Secretary may use analytic contractors to identify and analyze services identified under clause (i)(I), conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of services described in clause (i)(II).
(IV) The Secretary may coordinate the review and appropriate adjustment described in clause (i)(II) with the periodic review described in subparagraph (B).
(V) As part of the review and adjustment described in clause (i)(II), including with respect to codes with low relative values described in clause (ii), the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) which may include consolidation of individual services into bundled codes for payment under the fee schedule under subsection (b).
(VI) The provisions of subparagraph (B)(ii)(II) and paragraph (7) shall apply to adjustments to relative value units made pursuant to this subparagraph in the same manner as such provisions apply to adjustments under subparagraph (B)(ii)(I).
(iv) Treatment of certain radiation therapy services
Radiation treatment delivery and related imaging services identified under subsection (b)(11) shall not be considered as potentially misvalued services for purposes of this subparagraph and subparagraph (O) for 2017, 2018, and 2019.
(L) Validating relative value units
(i) In general
The Secretary shall establish a process to validate relative value units under the fee schedule under subsection (b).
(ii) Components and elements of work
The process described in clause (i) may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a service and may include validation of the pre-, post-, and intra-service components of work.
(iii) Scope of codes
The validation of work relative value units shall include a sampling of codes for services that is the same as the codes listed under subparagraph (K)(ii).
(iv) Methods
The Secretary may conduct the validation under this subparagraph using methods described in subclauses (I) through (V) of subparagraph (K)(iii) as the Secretary determines to be appropriate.
(v) Adjustments
The Secretary shall make appropriate adjustments to the work relative value units under the fee schedule under subsection (b). The provisions of subparagraph (B)(ii)(II) shall apply to adjustments to relative value units made pursuant to this subparagraph in the same manner as such provisions apply to adjustments under subparagraph (B)(ii)(II).
(M) Authority to collect and use information on physicians' services in the determination of relative values
(i) Collection of information
Notwithstanding any other provision of law, the Secretary may collect or obtain information on the resources directly or indirectly related to furnishing services for which payment is made under the fee schedule established under subsection (b). Such information may be collected or obtained from any eligible professional or any other source.
(ii) Use of information
Notwithstanding any other provision of law, subject to clause (v), the Secretary may (as the Secretary determines appropriate) use information collected or obtained pursuant to clause (i) in the determination of relative values for services under this section.
(iii) Types of information
The types of information described in clauses (i) and (ii) may, at the Secretary's discretion, include any or all of the following:
(I) Time involved in furnishing services.
(II) Amounts and types of practice expense inputs involved with furnishing services.
(III) Prices (net of any discounts) for practice expense inputs, which may include paid invoice prices or other documentation or records.
(IV) Overhead and accounting information for practices of physicians and other suppliers.
(V) Any other element that would improve the valuation of services under this section.
(iv) Information collection mechanisms
Information may be collected or obtained pursuant to this subparagraph from any or all of the following:
(I) Surveys of physicians, other suppliers, providers of services, manufacturers, and vendors.
(II) Surgical logs, billing systems, or other practice or facility records.
(III) Electronic health records.
(IV) Any other mechanism determined appropriate by the Secretary.
(v) Transparency of use of information
(I) In general
Subject to subclauses (II) and (III), if the Secretary uses information collected or obtained under this subparagraph in the determination of relative values under this subsection, the Secretary shall disclose the information source and discuss the use of such information in such determination of relative values through notice and comment rulemaking.
(II) Thresholds for use
The Secretary may establish thresholds in order to use such information, including the exclusion of information collected or obtained from eligible professionals who use very high resources (as determined by the Secretary) in furnishing a service.
(III) Disclosure of information
The Secretary shall make aggregate information available under this subparagraph but shall not disclose information in a form or manner that identifies an eligible professional or a group practice, or information collected or obtained pursuant to a nondisclosure agreement.
(vi) Incentive to participate
The Secretary may provide for such payments under this part to an eligible professional that submits such solicited information under this subparagraph as the Secretary determines appropriate in order to compensate such eligible professional for such submission. Such payments shall be provided in a form and manner specified by the Secretary.
(vii) Administration
(viii) Definition of eligible professional
In this subparagraph, the term "eligible professional" has the meaning given such term in subsection (k)(3)(B).
(ix) Funding
For purposes of carrying out this subparagraph, in addition to funds otherwise appropriated, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(N) Authority for alternative approaches to establishing practice expense relative values
The Secretary may establish or adjust practice expense relative values under this subsection using cost, charge, or other data from suppliers or providers of services, including information collected or obtained under subparagraph (M).
(O) Target for relative value adjustments for misvalued services
With respect to fee schedules established for each of 2016 through 2018, the following shall apply:
(i) Determination of net reduction in expenditures
For each year, the Secretary shall determine the estimated net reduction in expenditures under the fee schedule under this section with respect to the year as a result of adjustments to the relative values established under this paragraph for misvalued codes.
(ii) Budget neutral redistribution of funds if target met and counting overages towards the target for the succeeding year
If the estimated net reduction in expenditures determined under clause (i) for the year is equal to or greater than the target for the year—
(I) reduced expenditures attributable to such adjustments shall be redistributed for the year in a budget neutral manner in accordance with subparagraph (B)(ii)(II); and
(II) the amount by which such reduced expenditures exceeds the target for the year shall be treated as a reduction in expenditures described in clause (i) for the succeeding year, for purposes of determining whether the target has or has not been met under this subparagraph with respect to that year.
(iii) Exemption from budget neutrality if target not met
If the estimated net reduction in expenditures determined under clause (i) for the year is less than the target for the year, reduced expenditures in an amount equal to the target recapture amount shall not be taken into account in applying subparagraph (B)(ii)(II) with respect to fee schedules beginning with 2016.
(iv) Target recapture amount
For purposes of clause (iii), the target recapture amount is, with respect to a year, an amount equal to the difference between—
(I) the target for the year; and
(II) the estimated net reduction in expenditures determined under clause (i) for the year.
(v) Target
For purposes of this subparagraph, with respect to a year, the target is calculated as 0.5 percent (or, for 2016, 1.0 percent) of the estimated amount of expenditures under the fee schedule under this section for the year.
(3) Component percentages
For purposes of paragraph (2), the Secretary shall determine a work percentage, a practice expense percentage, and a malpractice percentage for each physician's service as follows:
(A) Division of services by specialty
For each physician's service or class of physicians' services, the Secretary shall determine the average percentage of each such service or class of services that is performed, nationwide, under this part by physicians in each of the different physician specialties (as identified by the Secretary).
(B) Division of specialty by component
The Secretary shall determine the average percentage division of resources, among the work component, the practice expense component, and the malpractice component, used by physicians in each of such specialties in furnishing physicians' services. Such percentages shall be based on national data that describe the elements of physician practice costs and revenues, by physician specialty. The Secretary may use extrapolation and other techniques to determine practice costs and revenues for specialties for which adequate data are not available.
(C) Determination of component percentages
(i) Work percentage
The work percentage for a service (or class of services) is equal to the sum (for all physician specialties) of—
(I) the average percentage division for the work component for each physician specialty (determined under subparagraph (B)), multiplied by
(II) the proportion (determined under subparagraph (A)) of such service (or services) performed by physicians in that specialty.
(ii) Practice expense percentage
For years before 2002, the practice expense percentage for a service (or class of services) is equal to the sum (for all physician specialties) of—
(I) the average percentage division for the practice expense component for each physician specialty (determined under subparagraph (B)), multiplied by
(II) the proportion (determined under subparagraph (A)) of such service (or services) performed by physicians in that specialty.
(iii) Malpractice percentage
For years before 1999, the malpractice percentage for a service (or class of services) is equal to the sum (for all physician specialties) of—
(I) the average percentage division for the malpractice component for each physician specialty (determined under subparagraph (B)), multiplied by
(II) the proportion (determined under subparagraph (A)) of such service (or services) performed by physicians in that specialty.
(D) Periodic recomputation
The Secretary may, from time to time, provide for the recomputation of work percentages, practice expense percentages, and malpractice percentages determined under this paragraph.
(4) Ancillary policies
The Secretary may establish ancillary policies (with respect to the use of modifiers, local codes, and other matters) as may be necessary to implement this section.
(5) Coding
The Secretary shall establish a uniform procedure coding system for the coding of all physicians' services. The Secretary shall provide for an appropriate coding structure for visits and consultations. The Secretary may incorporate the use of time in the coding for visits and consultations. The Secretary, in establishing such coding system, shall consult with the Physician Payment Review Commission and other organizations representing physicians.
(6) No variation for specialists
The Secretary may not vary the conversion factor or the number of relative value units for a physicians' service based on whether the physician furnishing the service is a specialist or based on the type of specialty of the physician.
(7) Phase-in of significant relative value unit (RVU) reductions
Effective for fee schedules established beginning with 2016, for services that are not new or revised codes, if the total relative value units for a service for a year would otherwise be decreased by an estimated amount equal to or greater than 20 percent as compared to the total relative value units for the previous year, the applicable adjustments in work, practice expense, and malpractice relative value units shall be phased-in over a 2-year period.
(8) Global surgical packages
(A) Prohibition of implementation of rule regarding global surgical packages
(i) In general
The Secretary shall not implement the policy established in the final rule published on November 13, 2014 (79 Fed. Reg. 67548 et seq.), that requires the transition of all 10-day and 90-day global surgery packages to 0-day global periods.
(ii) Construction
Nothing in clause (i) shall be construed to prevent the Secretary from revaluing misvalued codes for specific surgical services or assigning values to new or revised codes for surgical services.
(B) Collection of data on services included in global surgical packages
(i) In general
Subject to clause (ii), the Secretary shall through rulemaking develop and implement a process to gather, from a representative sample of physicians, beginning not later than January 1, 2017, information needed to value surgical services. Such information shall include the number and level of medical visits furnished during the global period and other items and services related to the surgery and furnished during the global period, as appropriate. Such information shall be reported on claims at the end of the global period or in another manner specified by the Secretary. For purposes of carrying out this paragraph (other than clause (iii)), the Secretary shall transfer from the Federal Supplemental Medical Insurance Trust Fund under
(ii) Reassessment and potential sunset
Every 4 years, the Secretary shall reassess the value of the information collected pursuant to clause (i). Based on such a reassessment and by regulation, the Secretary may discontinue the requirement for collection of information under such clause if the Secretary determines that the Secretary has adequate information from other sources, such as qualified clinical data registries, surgical logs, billing systems or other practice or facility records, and electronic health records, in order to accurately value global surgical services under this section.
(iii) Inspector general audit
The Inspector General of the Department of Health and Human Services shall audit a sample of the information reported under clause (i) to verify the accuracy of the information so reported.
(C) Improving accuracy of pricing for surgical services
For years beginning with 2019, the Secretary shall use the information reported under subparagraph (B)(i) as appropriate and other available data for the purpose of improving the accuracy of valuation of surgical services under the physician fee schedule under this section.
(d) Conversion factors
(1) Establishment
(A) In general
The conversion factor for each year shall be the conversion factor established under this subsection for the previous year (or, in the case of 1992, specified in subparagraph (B)) adjusted by the update (established under paragraph (3)) for the year involved (for years before 2001) and, for years beginning with 2001 and ending with 2025, multiplied by the update (established under paragraph (4) or a subsequent paragraph) for the year involved. There shall be two separate conversion factors for each year beginning with 2026, one for items and services furnished by a qualifying APM participant (as defined in
(B) Special provision for 1992
For purposes of subparagraph (A), the conversion factor specified in this subparagraph is a conversion factor (determined by the Secretary) which, if this section were to apply during 1991 using such conversion factor, would result in the same aggregate amount of payments under this part for physicians' services as the estimated aggregate amount of the payments under this part for such services in 1991.
(C) Special rules for 1998
Except as provided in subparagraph (D), the single conversion factor for 1998 under this subsection shall be the conversion factor for primary care services for 1997, increased by the Secretary's estimate of the weighted average of the three separate updates that would otherwise occur were it not for the enactment of
(D) Special rules for anesthesia services
The separate conversion factor for anesthesia services for a year shall be equal to 46 percent of the single conversion factor (or, beginning with 2026, applicable conversion factor) established for other physicians' services, except as adjusted for changes in work, practice expense, or malpractice relative value units.
(E) Publication and dissemination of information
The Secretary shall—
(i) cause to have published in the Federal Register not later than November 1 of each year (beginning with 2000) the conversion factor which will apply to physicians' services for the succeeding year, the update determined under paragraph (4) for such succeeding year, and the allowed expenditures under such paragraph for such succeeding year; and
(ii) make available to the Medicare Payment Advisory Commission and the public by March 1 of each year (beginning with 2000) an estimate of the sustainable growth rate and of the conversion factor which will apply to physicians' services for the succeeding year and data used in making such estimate.
(2) Repealed. Pub. L. 105–33, title IV, §4502(b), Aug. 5, 1997, 111 Stat. 433
(3) Update for 1999 and 2000
(A) In general
Unless otherwise provided by law, subject to subparagraph (D) and the budget-neutrality factor determined by the Secretary under subsection (c)(2)(B)(ii), the update to the single conversion factor established in paragraph (1)(C) for 1999 and 2000 is equal to the product of—
(i) 1 plus the Secretary's estimate of the percentage increase in the MEI (as defined in
(ii) 1 plus the Secretary's estimate of the update adjustment factor for the year (divided by 100),
minus 1 and multiplied by 100.
(B) Update adjustment factor
For purposes of subparagraph (A)(ii), the "update adjustment factor" for a year is equal (as estimated by the Secretary) to—
(i) the difference between (I) the sum of the allowed expenditures for physicians' services (as determined under subparagraph (C)) for the period beginning April 1, 1997, and ending on March 31 of the year involved, and (II) the amount of actual expenditures for physicians' services furnished during the period beginning April 1, 1997, and ending on March 31 of the preceding year; divided by
(ii) the actual expenditures for physicians' services for the 12-month period ending on March 31 of the preceding year, increased by the sustainable growth rate under subsection (f) for the fiscal year which begins during such 12-month period.
(C) Determination of allowed expenditures
For purposes of this paragraph and paragraph (4), the allowed expenditures for physicians' services for the 12-month period ending with March 31 of—
(i) 1997 is equal to the actual expenditures for physicians' services furnished during such 12-month period, as estimated by the Secretary; or
(ii) a subsequent year is equal to the allowed expenditures for physicians' services for the previous year, increased by the sustainable growth rate under subsection (f) for the fiscal year which begins during such 12-month period.
(D) Restriction on variation from medicare economic index
Notwithstanding the amount of the update adjustment factor determined under subparagraph (B) for a year, the update in the conversion factor under this paragraph for the year may not be—
(i) greater than 100 times the following amount: (1.03 + (MEI percentage/100)) −1; or
(ii) less than 100 times the following amount: (0.93 + (MEI percentage/100)) −1,
where "MEI percentage" means the Secretary's estimate of the percentage increase in the MEI (as defined in
(4) Update for years beginning with 2001 and ending with 2014
(A) In general
Unless otherwise provided by law, subject to the budget-neutrality factor determined by the Secretary under subsection (c)(2)(B)(ii) and subject to adjustment under subparagraph (F), the update to the single conversion factor established in paragraph (1)(C) for a year beginning with 2001 and ending with 2014 is equal to the product of—
(i) 1 plus the Secretary's estimate of the percentage increase in the MEI (as defined in
(ii) 1 plus the Secretary's estimate of the update adjustment factor under subparagraph (B) for the year.
(B) Update adjustment factor
For purposes of subparagraph (A)(ii), subject to subparagraph (D) and the succeeding paragraphs of this subsection, the "update adjustment factor" for a year is equal (as estimated by the Secretary) to the sum of the following:
(i) Prior year adjustment component
An amount determined by—
(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services for the prior year (as determined under subparagraph (C)) and the amount of the actual expenditures for such services for that year;
(II) dividing that difference by the amount of the actual expenditures for such services for that year; and
(III) multiplying that quotient by 0.75.
(ii) Cumulative adjustment component
An amount determined by—
(I) computing the difference (which may be positive or negative) between the amount of the allowed expenditures for physicians' services (as determined under subparagraph (C)) from April 1, 1996, through the end of the prior year and the amount of the actual expenditures for such services during that period;
(II) dividing that difference by actual expenditures for such services for the prior year as increased by the sustainable growth rate under subsection (f) for the year for which the update adjustment factor is to be determined; and
(III) multiplying that quotient by 0.33.
(C) Determination of allowed expenditures
For purposes of this paragraph:
(i) Period up to April 1, 1999
The allowed expenditures for physicians' services for a period before April 1, 1999, shall be the amount of the allowed expenditures for such period as determined under paragraph (3)(C).
(ii) Transition to calendar year allowed expenditures
Subject to subparagraph (E), the allowed expenditures for—
(I) the 9-month period beginning April 1, 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such period; and
(II) the year of 1999, shall be the Secretary's estimate of the amount of the allowed expenditures that would be permitted under paragraph (3)(C) for such year.
(iii) Years beginning with 2000
The allowed expenditures for a year (beginning with 2000) is equal to the allowed expenditures for physicians' services for the previous year, increased by the sustainable growth rate under subsection (f) for the year involved.
(D) Restriction on update adjustment factor
The update adjustment factor determined under subparagraph (B) for a year may not be less than −0.07 or greater than 0.03.
(E) Recalculation of allowed expenditures for updates beginning with 2001
For purposes of determining the update adjustment factor for a year beginning with 2001, the Secretary shall recompute the allowed expenditures for previous periods beginning on or after April 1, 1999, consistent with subsection (f)(3).
(F) Transitional adjustment designed to provide for budget neutrality
Under this subparagraph the Secretary shall provide for an adjustment to the update under subparagraph (A)—
(i) for each of 2001, 2002, 2003, and 2004, of −0.2 percent; and
(ii) for 2005 of +0.8 percent.
(5) Update for 2004 and 2005
The update to the single conversion factor established in paragraph (1)(C) for each of 2004 and 2005 shall be not less than 1.5 percent.
(6) Update for 2006
The update to the single conversion factor established in paragraph (1)(C) for 2006 shall be 0 percent.
(7) Conversion factor for 2007
(A) In general
The conversion factor that would otherwise be applicable under this subsection for 2007 shall be the amount of such conversion factor divided by the product of—
(i) 1 plus the Secretary's estimate of the percentage increase in the MEI (as defined in
(ii) 1 plus the Secretary's estimate of the update adjustment factor under paragraph (4)(B) for 2007.
(B) No effect on computation of conversion factor for 2008
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2008 as if subparagraph (A) had never applied.
(8) Update for 2008
(A) In general
Subject to paragraph (7)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2008, the update to the single conversion factor shall be 0.5 percent.
(B) No effect on computation of conversion factor for 2009
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2009 and subsequent years as if subparagraph (A) had never applied.
(9) Update for 2009
(A) In general
Subject to paragraphs (7)(B) and (8)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2009, the update to the single conversion factor shall be 1.1 percent.
(B) No effect on computation of conversion factor for 2010 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2010 and subsequent years as if subparagraph (A) had never applied.
(10) Update for January through May of 2010
(A) In general
Subject to paragraphs (7)(B), (8)(B), and (9)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2010 for the period beginning on January 1, 2010, and ending on May 31, 2010, the update to the single conversion factor shall be 0 percent for 2010.
(B) No effect on computation of conversion factor for remaining portion of 2010 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for the period beginning on June 1, 2010, and ending on December 31, 2010, and for 2011 and subsequent years as if subparagraph (A) had never applied.
(11) Update for June through December of 2010
(A) In general
Subject to paragraphs (7)(B), (8)(B), (9)(B), and (10)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2010 for the period beginning on June 1, 2010, and ending on December 31, 2010, the update to the single conversion factor shall be 2.2 percent.
(B) No effect on computation of conversion factor for 2011 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2011 and subsequent years as if subparagraph (A) had never applied.
(12) Update for 2011
(A) In general
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), and (11)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2011, the update to the single conversion factor shall be 0 percent.
(B) No effect on computation of conversion factor for 2012 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2012 and subsequent years as if subparagraph (A) had never applied.
(13) Update for 2012
(A) In general
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), and (12)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2012, the update to the single conversion factor shall be zero percent.
(B) No effect on computation of conversion factor for 2013 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2013 and subsequent years as if subparagraph (A) had never applied.
(14) Update for 2013
(A) In general
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), and (13)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2013, the update to the single conversion factor for such year shall be zero percent.
(B) No effect on computation of conversion factor for 2014 and subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2014 and subsequent years as if subparagraph (A) had never applied.
(15) Update for 2014
(A) In general
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B), and (14)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2014, the update to the single conversion factor shall be 0.5 percent.
(B) No effect on computation of conversion factor for subsequent years
The conversion factor under this subsection shall be computed under paragraph (1)(A) for 2015 and subsequent years as if subparagraph (A) had never applied.
(16) Update for January through June of 2015
Subject to paragraphs (7)(B), (8)(B), (9)(B), (10)(B), (11)(B), (12)(B), (13)(B), (14)(B), and (15)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2015 for the period beginning on January 1, 2015, and ending on June 30, 2015, the update to the single conversion factor shall be 0.0 percent.
(17) Update for July through December of 2015
The update to the single conversion factor established in paragraph (1)(C) for the period beginning on July 1, 2015, and ending on December 31, 2015, shall be 0.5 percent.
(18) Update for 2016 through 2019
The update to the single conversion factor established in paragraph (1)(C)—
(A) for 2016 and each subsequent year through 2018 shall be 0.5 percent; and
(B) for 2019 shall be 0.25 percent.
(19) Update for 2020 through 2025
The update to the single conversion factor established in paragraph (1)(C) for 2020 and each subsequent year through 2025 shall be 0.0 percent.
(20) Update for 2026 and subsequent years
For 2026 and each subsequent year, the update to the qualifying APM conversion factor established under paragraph (1)(A) is 0.75 percent, and the update to the nonqualifying APM conversion factor established under such paragraph is 0.25 percent.
(e) Geographic adjustment factors
(1) Establishment of geographic indices
(A) In general
Subject to subparagraphs (B), (C), (E), (G), (H), and (I), the Secretary shall establish—
(i) an index which reflects the relative costs of the mix of goods and services comprising practice expenses (other than malpractice expenses) in the different fee schedule areas compared to the national average of such costs,
(ii) an index which reflects the relative costs of malpractice expenses in the different fee schedule areas compared to the national average of such costs, and
(iii) an index which reflects ¼ of the difference between the relative value of physicians' work effort in each of the different fee schedule areas and the national average of such work effort.
(B) Class-specific geographic cost-of-practice indices
The Secretary may establish more than one index under subparagraph (A)(i) in the case of classes of physicians' services, if, because of differences in the mix of goods and services comprising practice expenses for the different classes of services, the application of a single index under such clause to different classes of such services would be substantially inequitable.
(C) Periodic review and adjustments in geographic adjustment factors
The Secretary, not less often than every 3 years, shall, in consultation with appropriate representatives of physicians, review the indices established under subparagraph (A) and the geographic index values applied under this subsection for all fee schedule areas. Based on such review, the Secretary may revise such index and adjust such index values, except that, if more than 1 year has elasped 2 since the date of the last previous adjustment, the adjustment to be applied in the first year of the next adjustment shall be ½ of the adjustment that otherwise would be made.
(D) Use of recent data
In establishing indices and index values under this paragraph, the Secretary shall use the most recent data available relating to practice expenses, malpractice expenses, and physician work effort in different fee schedule areas.
(E) Floor at 1.0 on work geographic index
After calculating the work geographic index in subparagraph (A)(iii), for purposes of payment for services furnished on or after January 1, 2004, and before January 1, 2025, the Secretary shall increase the work geographic index to 1.00 for any locality for which such work geographic index is less than 1.00.
(G) 3 Floor for practice expense, malpractice, and work geographic indices for services furnished in Alaska
For purposes of payment for services furnished in Alaska on or after January 1, 2004, and before January 1, 2006, after calculating the practice expense, malpractice, and work geographic indices in clauses (i), (ii), and (iii) of subparagraph (A) and in subparagraph (B), the Secretary shall increase any such index to 1.67 if such index would otherwise be less than 1.67. For purposes of payment for services furnished in the State described in the preceding sentence on or after January 1, 2009, after calculating the work geographic index in subparagraph (A)(iii), the Secretary shall increase the work geographic index to 1.5 if such index would otherwise be less than 1.5 1
(H) Practice expense geographic adjustment for 2010 and subsequent years
(i) For 2010
Subject to clause (iii), for services furnished during 2010, the employee wage and rent portions of the practice expense geographic index described in subparagraph (A)(i) shall reflect ½ of the difference between the relative costs of employee wages and rents in each of the different fee schedule areas and the national average of such employee wages and rents.
(ii) For 2011
Subject to clause (iii), for services furnished during 2011, the employee wage and rent portions of the practice expense geographic index described in subparagraph (A)(i) shall reflect ½ of the difference between the relative costs of employee wages and rents in each of the different fee schedule areas and the national average of such employee wages and rents.
(iii) Hold harmless
The practice expense portion of the geographic adjustment factor applied in a fee schedule area for services furnished in 2010 or 2011 shall not, as a result of the application of clause (i) or (ii), be reduced below the practice expense portion of the geographic adjustment factor under subparagraph (A)(i) (as calculated prior to the application of such clause (i) or (ii), respectively) for such area for such year.
(iv) Analysis
The Secretary shall analyze current methods of establishing practice expense geographic adjustments under subparagraph (A)(i) and evaluate data that fairly and reliably establishes distinctions in the costs of operating a medical practice in the different fee schedule areas. Such analysis shall include an evaluation of the following:
(I) The feasibility of using actual data or reliable survey data developed by medical organizations on the costs of operating a medical practice, including office rents and non-physician staff wages, in different fee schedule areas.
(II) The office expense portion of the practice expense geographic adjustment described in subparagraph (A)(i), including the extent to which types of office expenses are determined in local markets instead of national markets.
(III) The weights assigned to each of the categories within the practice expense geographic adjustment described in subparagraph (A)(i).
(v) Revision for 2012 and subsequent years
As a result of the analysis described in clause (iv), the Secretary shall, not later than January 1, 2012, make appropriate adjustments to the practice expense geographic adjustment described in subparagraph (A)(i) to ensure accurate geographic adjustments across fee schedule areas, including—
(I) basing the office rents component and its weight on office expenses that vary among fee schedule areas; and
(II) considering a representative range of professional and non-professional personnel employed in a medical office based on the use of the American Community Survey data or other reliable data for wage adjustments.
Such adjustments shall be made without regard to adjustments made pursuant to clauses (i) and (ii) and shall be made in a budget neutral manner.
(I) Floor for practice expense index for services furnished in frontier States
(i) In general
Subject to clause (ii), for purposes of payment for services furnished in a frontier State (as defined in
(ii) Limitation
This subparagraph shall not apply to services furnished in a State that receives a non-labor related share adjustment under
(2) Computation of geographic adjustment factor
For purposes of subsection (b)(1)(C), for all physicians' services for each fee schedule area the Secretary shall establish a geographic adjustment factor equal to the sum of the geographic cost-of-practice adjustment factor (specified in paragraph (3)), the geographic malpractice adjustment factor (specified in paragraph (4)), and the geographic physician work adjustment factor (specified in paragraph (5)) for the service and the area.
(3) Geographic cost-of-practice adjustment factor
For purposes of paragraph (2), the "geographic cost-of-practice adjustment factor", for a service for a fee schedule area, is the product of—
(A) the proportion of the total relative value for the service that reflects the relative value units for the practice expense component, and
(B) the geographic cost-of-practice index value for the area for the service, based on the index established under paragraph (1)(A)(i) or (1)(B) (as the case may be).
(4) Geographic malpractice adjustment factor
For purposes of paragraph (2), the "geographic malpractice adjustment factor", for a service for a fee schedule area, is the product of—
(A) the proportion of the total relative value for the service that reflects the relative value units for the malpractice component, and
(B) the geographic malpractice index value for the area, based on the index established under paragraph (1)(A)(ii).
(5) Geographic physician work adjustment factor
For purposes of paragraph (2), the "geographic physician work adjustment factor", for a service for a fee schedule area, is the product of—
(A) the proportion of the total relative value for the service that reflects the relative value units for the work component, and
(B) the geographic physician work index value for the area, based on the index established under paragraph (1)(A)(iii).
(6) Use of MSAs as fee schedule areas in California
(A) In general
Subject to the succeeding provisions of this paragraph and notwithstanding the previous provisions of this subsection, for services furnished on or after January 1, 2017, the fee schedule areas used for payment under this section applicable to California shall be the following:
(i) Each Metropolitan Statistical Area (each in this paragraph referred to as an "MSA"), as defined by the Director of the Office of Management and Budget as of December 31 of the previous year, shall be a fee schedule area.
(ii) All areas not included in an MSA shall be treated as a single rest-of-State fee schedule area.
(B) Transition for MSAs previously in rest-of-state payment locality or in locality 3
(i) In general
For services furnished in California during a year beginning with 2017 and ending with 2021 in an MSA in a transition area (as defined in subparagraph (D)), subject to subparagraph (C), the geographic index values to be applied under this subsection for such year shall be equal to the sum of the following:
(I) Current law component
The old weighting factor (described in clause (ii)) for such year multiplied by the geographic index values under this subsection for the fee schedule area that included such MSA that would have applied in such area (as estimated by the Secretary) if this paragraph did not apply.
(II) MSA-based component
The MSA-based weighting factor (described in clause (iii)) for such year multiplied by the geographic index values computed for the fee schedule area under subparagraph (A) for the year (determined without regard to this subparagraph).
(ii) Old weighting factor
The old weighting factor described in this clause—
(I) for 2017, is 5/6; and
(II) for each succeeding year, is the old weighting factor described in this clause for the previous year minus 1/6.
(iii) MSA-based weighting factor
The MSA-based weighting factor described in this clause for a year is 1 minus the old weighting factor under clause (ii) for that year.
(C) Hold harmless
For services furnished in a transition area in California during a year beginning with 2017, the geographic index values to be applied under this subsection for such year shall not be less than the corresponding geographic index values that would have applied in such transition area (as estimated by the Secretary) if this paragraph did not apply.
(D) Transition area defined
In this paragraph, the term "transition area" means each of the following fee schedule areas for 2013:
(i) The rest-of-State payment locality.
(ii) Payment locality 3.
(E) References to fee schedule areas
Effective for services furnished on or after January 1, 2017, for California, any reference in this section to a fee schedule area shall be deemed a reference to a fee schedule area established in accordance with this paragraph.
(f) Sustainable growth rate
(1) Publication
The Secretary shall cause to have published in the Federal Register not later than—
(A) November 1, 2000, the sustainable growth rate for 2000 and 2001; and
(B) November 1 of each succeeding year through 2014 the sustainable growth rate for such succeeding year and each of the preceding 2 years.
(2) Specification of growth rate
The sustainable growth rate for all physicians' services for a fiscal year (beginning with fiscal year 1998 and ending with fiscal year 2000) and a year beginning with 2000 and ending with 2014 shall be equal to the product of—
(A) 1 plus the Secretary's estimate of the weighted average percentage increase (divided by 100) in the fees for all physicians' services in the applicable period involved,
(B) 1 plus the Secretary's estimate of the percentage change (divided by 100) in the average number of individuals enrolled under this part (other than Medicare+Choice plan enrollees) from the previous applicable period to the applicable period involved,
(C) 1 plus the Secretary's estimate of the annual average percentage growth in real gross domestic product per capita (divided by 100) during the 10-year period ending with the applicable period involved, and
(D) 1 plus the Secretary's estimate of the percentage change (divided by 100) in expenditures for all physicians' services in the applicable period (compared with the previous applicable period) which will result from changes in law and regulations, determined without taking into account estimated changes in expenditures resulting from the update adjustment factor determined under subsection (d)(3)(B) or (d)(4)(B), as the case may be,
minus 1 and multiplied by 100.
(3) Data to be used
For purposes of determining the update adjustment factor under subsection (d)(4)(B) for a year beginning with 2001, the sustainable growth rates taken into consideration in the determination under paragraph (2) shall be determined as follows:
(A) For 2001
For purposes of such calculations for 2001, the sustainable growth rates for fiscal year 2000 and the years 2000 and 2001 shall be determined on the basis of the best data available to the Secretary as of September 1, 2000.
(B) For 2002
For purposes of such calculations for 2002, the sustainable growth rates for fiscal year 2000 and for years 2000, 2001, and 2002 shall be determined on the basis of the best data available to the Secretary as of September 1, 2001.
(C) For 2003 and succeeding years
For purposes of such calculations for a year after 2002—
(i) the sustainable growth rates for that year and the preceding 2 years shall be determined on the basis of the best data available to the Secretary as of September 1 of the year preceding the year for which the calculation is made; and
(ii) the sustainable growth rate for any year before a year described in clause (i) shall be the rate as most recently determined for that year under this subsection.
Nothing in this paragraph shall be construed as affecting the sustainable growth rates established for fiscal year 1998 or fiscal year 1999.
(4) Definitions
In this subsection:
(A) Services included in physicians' services
The term "physicians' services" includes other items and services (such as clinical diagnostic laboratory tests and radiology services), specified by the Secretary, that are commonly performed or furnished by a physician or in a physician's office, but does not include services furnished to a Medicare+Choice plan enrollee.
(B) Medicare+Choice plan enrollee
The term "Medicare+Choice plan enrollee" means, with respect to a fiscal year, an individual enrolled under this part who has elected to receive benefits under this subchapter for the fiscal year through a Medicare+Choice plan offered under part C, and also includes an individual who is receiving benefits under this part through enrollment with an eligible organization with a risk-sharing contract under
(C) Applicable period
The term "applicable period" means—
(i) a fiscal year, in the case of fiscal year 1998, fiscal year 1999, and fiscal year 2000; or
(ii) a calendar year with respect to a year beginning with 2000;
as the case may be.
(g) Limitation on beneficiary liability
(1) Limitation on actual charges
(A) In general
In the case of a nonparticipating physician or nonparticipating supplier or other person (as defined in
(i) Application of limiting charge
No person may bill or collect an actual charge for the service in excess of the limiting charge described in paragraph (2) for such service.
(ii) No liability for excess charges
No person is liable for payment of any amounts billed for the service in excess of such limiting charge.
(iii) Correction of excess charges
If such a physician, supplier, or other person bills, but does not collect, an actual charge for a service in violation of clause (i), the physician, supplier, or other person shall reduce on a timely basis the actual charge billed for the service to an amount not to exceed the limiting charge for the service.
(iv) Refund of excess collections
If such a physician, supplier, or other person collects an actual charge for a service in violation of clause (i), the physician, supplier, or other person shall provide on a timely basis a refund to the individual charged in the amount by which the amount collected exceeded the limiting charge for the service. The amount of such a refund shall be reduced to the extent the individual has an outstanding balance owed by the individual to the physician.
(B) Sanctions
If a physician, supplier, or other person—
(i) knowingly and willfully bills or collects for services in violation of subparagraph (A)(i) on a repeated basis, or
(ii) fails to comply with clause (iii) or (iv) of subparagraph (A) on a timely basis,
the Secretary may apply sanctions against the physician, supplier, or other person in accordance with paragraph (2) of
(C) Timely basis
For purposes of this paragraph, a correction of a bill for an excess charge or refund of an amount with respect to a violation of subparagraph (A)(i) in the case of a service is considered to be provided "on a timely basis", if the reduction or refund is made not later than 30 days after the date the physician, supplier, or other person is notified by the carrier under this part of such violation and of the requirements of subparagraph (A).
(2) "Limiting charge" defined
(A) For 1991
For physicians' services of a physician furnished during 1991, other than radiologist services subject to
(i) the maximum allowable actual charge (as determined under
(ii) the recognized payment amount for the service of the physician (as a nonparticipating physician) as of such date.
In the case of evaluation and management services (as specified in
(B) For 1992
For physicians' services furnished during 1992, other than radiologist services subject to
(i) the limiting charge (as determined under subparagraph (A) as of December 31, 1991) for the service, exceeds
(ii) the recognized payment amount for the service for nonparticipating physicians as of such date.
(C) After 1992
For physicians' services furnished in a year after 1992, the "limiting charge" shall be 115 percent of the recognized payment amount under this part for nonparticipating physicians or for nonparticipating suppliers or other persons.
(D) Recognized payment amount
In this section, the term "recognized payment amount" means, for services furnished on or after January 1, 1992, the fee schedule amount determined under subsection (a) (or, if payment under this part is made on a basis other than the fee schedule under this section, 95 percent of the other payment basis), and, for services furnished during 1991, the applicable percentage (as defined in
(3) Limitation on charges for medicare beneficiaries eligible for medicaid benefits
(A) In general
Payment for physicians' services furnished on or after April 1, 1990, to an individual who is enrolled under this part and eligible for any medical assistance (including as a qualified medicare beneficiary, as defined in
(B) Penalty
A person may not bill for physicians' services subject to subparagraph (A) other than on an assignment-related basis. No person is liable for payment of any amounts billed for such a service in violation of the previous sentence. If a person knowingly and willfully bills for physicians' services in violation of the first sentence, the Secretary may apply sanctions against the person in accordance with
(4) Physician submission of claims
(A) In general
For services furnished on or after September 1, 1990, within 1 year after the date of providing a service for which payment is made under this part on a reasonable charge or fee schedule basis, a physician, supplier, or other person (or an employer or facility in the cases described in
(i) shall complete and submit a claim for such service on a standard claim form specified by the Secretary to the carrier on behalf of a beneficiary, and
(ii) may not impose any charge relating to completing and submitting such a form.
(B) Penalty
(i) With respect to an assigned claim wherever a physician, provider, supplier or other person (or an employer or facility in the cases described in
(ii) If a physician, supplier, or other person (or an employer or facility in the cases described in
(5) Electronic billing; direct deposit
The Secretary shall encourage and develop a system providing for expedited payment for claims submitted electronically. The Secretary shall also encourage and provide incentives allowing for direct deposit as payments for services furnished by participating physicians. The Secretary shall provide physicians with such technical information as necessary to enable such physicians to submit claims electronically. The Secretary shall submit a plan to Congress on this paragraph by May 1, 1990.
(6) Monitoring of charges
(A) In general
The Secretary shall monitor—
(i) the actual charges of nonparticipating physicians for physicians' services furnished on or after January 1, 1991, to individuals enrolled under this part, and
(ii) changes (by specialty, type of service, and geographic area) in (I) the proportion of expenditures for physicians' services provided under this part by participating physicians, (II) the proportion of expenditures for such services for which payment is made under this part on an assignment-related basis, and (III) the amounts charged above the recognized payment amounts under this part.
(B) Report
The Secretary shall, by not later than April 15 of each year (beginning in 1992), report to the Congress information on the extent to which actual charges exceed limiting charges, the number and types of services involved, and the average amount of excess charges and information regarding the changes described in subparagraph (A)(ii).
(C) Plan
If the Secretary finds that there has been a significant decrease in the proportions described in subclauses (I) and (II) of subparagraph (A)(ii) or an increase in the amounts described in subclause (III) of that subparagraph, the Secretary shall develop a plan to address such a problem and transmit to Congress recommendations regarding the plan. The Medicare Payment Advisory Commission shall review the Secretary's plan and recommendations and transmit to Congress its comments regarding such plan and recommendations.
(7) Monitoring of utilization and access
(A) In general
The Secretary shall monitor—
(i) changes in the utilization of and access to services furnished under this part within geographic, population, and service related categories,
(ii) possible sources of inappropriate utilization of services furnished under this part which contribute to the overall level of expenditures under this part, and
(iii) factors underlying these changes and their interrelationships.
(B) Report
The Secretary shall by not later than April 15,5 of each year (beginning with 1991) report to the Congress on the changes described in subparagraph (A)(i) and shall include in the report an examination of the factors (including factors relating to different services and specific categories and groups of services and geographic and demographic variations in utilization) which may contribute to such changes.
(C) Recommendations
The Secretary shall include in each annual report under subparagraph (B) recommendations—
(i) addressing any identified patterns of inappropriate utilization,
(ii) on utilization review,
(iii) on physician education or patient education,
(iv) addressing any problems of beneficiary access to care made evident by the monitoring process, and
(v) on such other matters as the Secretary deems appropriate.
The Medicare Payment Advisory Commission shall comment on the Secretary's recommendations and in developing its comments, the Commission shall convene and consult a panel of physician experts to evaluate the implications of medical utilization patterns for the quality of and access to patient care.
(h) Sending information to physicians
Before the beginning of each year (beginning with 1992), the Secretary shall send to each physician or nonparticipating supplier or other person furnishing physicians' services (as defined in subsection (j)(3)) furnishing physicians' services under this part, for services commonly performed by the physician, supplier, or other person, information on fee schedule amounts that apply for the year in the fee schedule area for participating and non-participating physicians, and the maximum amount that may be charged consistent with subsection (g)(2). Such information shall be transmitted in conjunction with notices to physicians, suppliers, and other persons under
(i) Miscellaneous provisions
(1) Restriction on administrative and judicial review
There shall be no administrative or judicial review under
(A) the determination of the adjusted historical payment basis (as defined in subsection (a)(2)(D)(i)),
(B) the determination of relative values and relative value units under subsection (c), including adjustments under subsections (c)(2)(F), (c)(2)(H), and (c)(2)(I) and section 13515(b) of the Omnibus Budget Reconciliation Act of 1993,
(C) the determination of conversion factors under subsection (d), including without limitation a prospective redetermination of the sustainable growth rates for any or all previous fiscal years,
(D) the establishment of geographic adjustment factors under subsection (e),
(E) the establishment of the system for the coding of physicians' services under this section, and
(F) the collection and use of information in the determination of relative values under subsection (c)(2)(M).
(2) Assistants-at-surgery
(A) In general
Subject to subparagraph (B), in the case of a surgical service furnished by a physician, if payment is made separately under this part for the services of a physician serving as an assistant-at-surgery, the fee schedule amount shall not exceed 16 percent of the fee schedule amount otherwise determined under this section for the global surgical service involved.
(B) Denial of payment in certain cases
If the Secretary determines, based on the most recent data available, that for a surgical procedure (or class of surgical procedures) the national average percentage of such procedure performed under this part which involve the use of a physician as an assistant at surgery is less than 5 percent, no payment may be made under this part for services of an assistant at surgery involved in the procedure.
(3) No comparability adjustment
For physicians' services for which payment under this part is determined under this section—
(A) a carrier may not make any adjustment in the payment amount under
(B) no payment adjustment may be made under
(C)
(j) Definitions
In this section:
(1) Category
For services furnished before January 1, 1998, the term "category" means, with respect to physicians' services, surgical services, and all physicians' services other than surgical services (as defined by the Secretary and including anesthesia services), primary care services (as defined in
(2) Fee schedule area
Except as provided in subsection (e)(6)(D), the term "fee schedule area" means a locality used under
(3) Physicians' services
The term "physicians' services" includes items and services described in paragraphs (1), (2)(A), (2)(D), (2)(G), (2)(P) (with respect to services described in subparagraphs (A) and (C) of
(4) Practice expenses
The term "practice expenses" includes all expenses for furnishing physicians' services, excluding malpractice expenses, physician compensation, and other physician fringe benefits.
(k) Quality reporting system
(1) In general
The Secretary shall implement a system for the reporting by eligible professionals of data on quality measures specified under paragraph (2). Such data shall be submitted in a form and manner specified by the Secretary (by program instruction or otherwise), which may include submission of such data on claims under this part.
(2) Use of consensus-based quality measures
(A) For 2007
(i) In general
For purposes of applying this subsection for the reporting of data on quality measures for covered professional services furnished during the period beginning July 1, 2007, and ending December 31, 2007, the quality measures specified under this paragraph are the measures identified as 2007 physician quality measures under the Physician Voluntary Reporting Program as published on the public website of the Centers for Medicare & Medicaid Services as of December 20, 2006, except as may be changed by the Secretary based on the results of a consensus-based process in January of 2007, if such change is published on such website by not later than April 1, 2007.
(ii) Subsequent refinements in application permitted
The Secretary may, from time to time (but not later than July 1, 2007), publish on such website (without notice or opportunity for public comment) modifications or refinements (such as code additions, corrections, or revisions) for the application of quality measures previously published under clause (i), but may not, under this clause, change the quality measures under the reporting system.
(iii) Implementation
Notwithstanding any other provision of law, the Secretary may implement by program instruction or otherwise this subsection for 2007.
(B) For 2008 and 2009
(i) In general
For purposes of reporting data on quality measures for covered professional services furnished during 2008 and 2009, the quality measures specified under this paragraph for covered professional services shall be measures that have been adopted or endorsed by a consensus organization (such as the National Quality Forum or AQA), that include measures that have been submitted by a physician specialty, and that the Secretary identifies as having used a consensus-based process for developing such measures. Such measures shall include structural measures, such as the use of electronic health records and electronic prescribing technology.
(ii) Proposed set of measures
Not later than August 15 of each of 2007 and 2008, the Secretary shall publish in the Federal Register a proposed set of quality measures that the Secretary determines are described in clause (i) and would be appropriate for eligible professionals to use to submit data to the Secretary in 2008 or 2009, as applicable. The Secretary shall provide for a period of public comment on such set of measures.
(iii) Final set of measures
Not later than November 15 of each of 2007 and 2008, the Secretary shall publish in the Federal Register a final set of quality measures that the Secretary determines are described in clause (i) and would be appropriate for eligible professionals to use to submit data to the Secretary in 2008 or 2009, as applicable.
(C) For 2010 and subsequent years
(i) In general
Subject to clause (ii), for purposes of reporting data on quality measures for covered professional services furnished during 2010 and each subsequent year, subject to subsection (m)(3)(C), the quality measures (including electronic prescribing quality measures) specified under this paragraph shall be such measures selected by the Secretary from measures that have been endorsed by the entity with a contract with the Secretary under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(D) Opportunity to provide input on measures for 2009 and subsequent years
For each quality measure (including an electronic prescribing quality measure) adopted by the Secretary under subparagraph (B) (with respect to 2009) or subparagraph (C), the Secretary shall ensure that eligible professionals have the opportunity to provide input during the development, endorsement, or selection of measures applicable to services they furnish.
(3) Covered professional services and eligible professionals defined
For purposes of this subsection:
(A) Covered professional services
The term "covered professional services" means services for which payment is made under, or is based on, the fee schedule established under this section and which are furnished by an eligible professional.
(B) Eligible professional
The term "eligible professional" means any of the following:
(i) A physician.
(ii) A practitioner described in
(iii) A physical or occupational therapist or a qualified speech-language pathologist.
(iv) Beginning with 2009, a qualified audiologist (as defined in
(4) Use of registry-based reporting
As part of the publication of proposed and final quality measures for 2008 under clauses (ii) and (iii) of paragraph (2)(B), the Secretary shall address a mechanism whereby an eligible professional may provide data on quality measures through an appropriate medical registry (such as the Society of Thoracic Surgeons National Database) or through a Maintenance of Certification program operated by a specialty body of the American Board of Medical Specialties that meets the criteria for such a registry, as identified by the Secretary.
(5) Identification units
For purposes of applying this subsection, the Secretary may identify eligible professionals through billing units, which may include the use of the Provider Identification Number, the unique physician identification number (described in
(6) Education and outreach
The Secretary shall provide for education and outreach to eligible professionals on the operation of this subsection.
(7) Limitations on review
There shall be no administrative or judicial review under
(8) Implementation
The Secretary shall carry out this subsection acting through the Administrator of the Centers for Medicare & Medicaid Services.
(9) Continued application for purposes of MIPS and for certain professionals volunteering to report
The Secretary shall, in accordance with subsection (q)(1)(F), carry out the provisions of this subsection—
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not MIPS eligible professionals (as defined in subsection (q)(1)(C)) for the year involved.
(l) Physician Assistance and Quality Initiative Fund
(1) Establishment
The Secretary shall establish under this subsection a Physician Assistance and Quality Initiative Fund (in this subsection referred to as the "Fund") which shall be available to the Secretary for physician payment and quality improvement initiatives, which may include application of an adjustment to the update of the conversion factor under subsection (d).
(2) Funding
(A) Amount available
(i) In general
Subject to clause (ii), there shall be available to the Fund the following amounts:
(I) For expenditures during 2008, an amount equal to $150,500,000.
(II) For expenditures during 2009, an amount equal to $24,500,000.
(ii) Limitations on expenditures
(I) 2008
The amount available for expenditures during 2008 shall be reduced as provided by subparagraph (A) of section 225(c)(1) and section 524 of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2008 (division G of the Consolidated Appropriations Act, 2008).
(II) 2009
The amount available for expenditures during 2009 shall be reduced as provided by subparagraph (B) of such section 225(c)(1).
(B) Timely obligation of all available funds for services
The Secretary shall provide for expenditures from the Fund in a manner designed to provide (to the maximum extent feasible) for the obligation of the entire amount available for expenditures, after application of subparagraph (A)(ii), during—
(i) 2008 for payment with respect to physicians' services furnished during 2008; and
(ii) 2009 for payment with respect to physicians' services furnished during 2009.
(C) Payment from Trust Fund
The amount specified in subparagraph (A) shall be available to the Fund, as expenditures are made from the Fund, from the Federal Supplementary Medical Insurance Trust Fund under
(D) Funding limitation
Amounts in the Fund shall be available in advance of appropriations in accordance with subparagraph (B) but only if the total amount obligated from the Fund does not exceed the amount available to the Fund under subparagraph (A). The Secretary may obligate funds from the Fund only if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services and the appropriate budget officer certify) that there are available in the Fund sufficient amounts to cover all such obligations incurred consistent with the previous sentence.
(E) Construction
In the case that expenditures from the Fund are applied to, or otherwise affect, a conversion factor under subsection (d) for a year, the conversion factor under such subsection shall be computed for a subsequent year as if such application or effect had never occurred.
(m) Incentive payments for quality reporting
(1) Incentive payments
(A) In general
For 2007 through 2014, with respect to covered professional services furnished during a reporting period by an eligible professional, if—
(i) there are any quality measures that have been established under the physician reporting system that are applicable to any such services furnished by such professional for such reporting period; and
(ii) the eligible professional satisfactorily submits (as determined under this subsection) to the Secretary data on such quality measures in accordance with such reporting system for such reporting period,
in addition to the amount otherwise paid under this part, there also shall be paid to the eligible professional (or to an employer or facility in the cases described in clause (A) of
(B) Applicable quality percent
For purposes of subparagraph (A), the term "applicable quality percent" means—
(i) for 2007 and 2008, 1.5 percent;
(ii) for 2009 and 2010, 2.0 percent;
(iii) for 2011, 1.0 percent; and
(iv) for 2012, 2013, and 2014, 0.5 percent.
(2) Incentive payments for electronic prescribing
(A) In general
Subject to subparagraph (D), for 2009 through 2013, with respect to covered professional services furnished during a reporting period by an eligible professional, if the eligible professional is a successful electronic prescriber for such reporting period, in addition to the amount otherwise paid under this part, there also shall be paid to the eligible professional (or to an employer or facility in the cases described in clause (A) of
(B) Limitation with respect to electronic prescribing quality measures
The provisions of this paragraph and subsection (a)(5) shall not apply to an eligible professional (or, in the case of a group practice under paragraph (3)(C), to the group practice) if, for the reporting period (or, for purposes of subsection (a)(5), for the reporting period for a year)—
(i) the allowed charges under this part for all covered professional services furnished by the eligible professional (or group, as applicable) for the codes to which the electronic prescribing quality measure applies (as identified by the Secretary and published on the Internet website of the Centers for Medicare & Medicaid Services as of January 1, 2008, and as subsequently modified by the Secretary) are less than 10 percent of the total of the allowed charges under this part for all such covered professional services furnished by the eligible professional (or the group, as applicable); or
(ii) if determined appropriate by the Secretary, the eligible professional does not submit (including both electronically and nonelectronically) a sufficient number (as determined by the Secretary) of prescriptions under part D.
If the Secretary makes the determination to apply clause (ii) for a period, then clause (i) shall not apply for such period.
(C) Applicable electronic prescribing percent
For purposes of subparagraph (A), the term "applicable electronic prescribing percent" means—
(i) for 2009 and 2010, 2.0 percent;
(ii) for 2011 and 2012, 1.0 percent; and
(iii) for 2013, 0.5 percent.
(D) Limitation with respect to EHR incentive payments
The provisions of this paragraph shall not apply to an eligible professional (or, in the case of a group practice under paragraph (3)(C), to the group practice) if, for the EHR reporting period the eligible professional (or group practice) receives an incentive payment under subsection (o)(1)(A) with respect to a certified EHR technology (as defined in subsection (o)(4)) that has the capability of electronic prescribing.
(3) Satisfactory reporting and successful electronic prescriber described
(A) In general
For purposes of paragraph (1), an eligible professional shall be treated as satisfactorily submitting data on quality measures for covered professional services for a reporting period (or, for purposes of subsection (a)(8), for the quality reporting period for the year) if quality measures have been reported as follows:
(i) Three or fewer quality measures applicable
If there are no more than 3 quality measures that are provided under the physician reporting system and that are applicable to such services of such professional furnished during the period, each such quality measure has been reported under such system in at least 80 percent of the cases in which such measure is reportable under the system.
(ii) Four or more quality measures applicable
If there are 4 or more quality measures that are provided under the physician reporting system and that are applicable to such services of such professional furnished during the period, at least 3 such quality measures have been reported under such system in at least 80 percent of the cases in which the respective measure is reportable under the system.
For years after 2008, quality measures for purposes of this subparagraph shall not include electronic prescribing quality measures.
(B) Successful electronic prescriber
(i) In general
For purposes of paragraph (2) and subsection (a)(5), an eligible professional shall be treated as a successful electronic prescriber for a reporting period (or, for purposes of subsection (a)(5), for the reporting period for a year) if the eligible professional meets the requirement described in clause (ii), or, if the Secretary determines appropriate, the requirement described in clause (iii). If the Secretary makes the determination under the preceding sentence to apply the requirement described in clause (iii) for a period, then the requirement described in clause (ii) shall not apply for such period.
(ii) Requirement for submitting data on electronic prescribing quality measures
The requirement described in this clause is that, with respect to covered professional services furnished by an eligible professional during a reporting period (or, for purposes of subsection (a)(5), for the reporting period for a year), if there are any electronic prescribing quality measures that have been established under the physician reporting system and are applicable to any such services furnished by such professional for the period, such professional reported each such measure under such system in at least 50 percent of the cases in which such measure is reportable by such professional under such system.
(iii) Requirement for electronically prescribing under part D
The requirement described in this clause is that the eligible professional electronically submitted a sufficient number (as determined by the Secretary) of prescriptions under part D during the reporting period (or, for purposes of subsection (a)(5), for the reporting period for a year).
(iv) Use of part D data
Notwithstanding
(v) Standards for electronic prescribing
To the extent practicable, in determining whether eligible professionals meet the requirements under clauses (ii) and (iii) for purposes of clause (i), the Secretary shall ensure that eligible professionals utilize electronic prescribing systems in compliance with standards established for such systems pursuant to the Part D Electronic Prescribing Program under
(C) Satisfactory reporting measures for group practices
(i) In general
By January 1, 2010, the Secretary shall establish and have in place a process under which eligible professionals in a group practice (as defined by the Secretary) shall be treated as satisfactorily submitting data on quality measures under subparagraph (A) and as meeting the requirement described in subparagraph (B)(ii) for covered professional services for a reporting period (or, for purposes of subsection (a)(5), for a reporting period for a year), or, for purposes of subsection (a)(8), for a quality reporting period for the year if, in lieu of reporting measures under subsection (k)(2)(C), the group practice reports measures determined appropriate by the Secretary, such as measures that target high-cost chronic conditions and preventive care, in a form and manner, and at a time, specified by the Secretary.
(ii) Statistical sampling model
The process under clause (i) shall provide and, for 2016 and subsequent years, may provide for the use of a statistical sampling model to submit data on measures, such as the model used under the Physician Group Practice demonstration project under
(iii) No double payments
Payments to a group practice under this subsection by reason of the process under clause (i) shall be in lieu of the payments that would otherwise be made under this subsection to eligible professionals in the group practice for satisfactorily submitting data on quality measures.
(D) Satisfactory reporting measures through participation in a qualified clinical data registry
For 2014 and subsequent years, the Secretary shall treat an eligible professional as satisfactorily submitting data on quality measures under subparagraph (A) and, for 2016 and subsequent years, subparagraph (A) or (C) if, in lieu of reporting measures under subsection (k)(2)(C), the eligible professional is satisfactorily participating, as determined by the Secretary, in a qualified clinical data registry (as described in subparagraph (E)) for the year.
(E) Qualified clinical data registry
(i) In general
The Secretary shall establish requirements for an entity to be considered a qualified clinical data registry. Such requirements shall include a requirement that the entity provide the Secretary with such information, at such times, and in such manner, as the Secretary determines necessary to carry out this subsection.
(ii) Considerations
In establishing the requirements under clause (i), the Secretary shall consider whether an entity—
(I) has in place mechanisms for the transparency of data elements and specifications, risk models, and measures;
(II) requires the submission of data from participants with respect to multiple payers;
(III) provides timely performance reports to participants at the individual participant level; and
(IV) supports quality improvement initiatives for participants.
(iii) Measures
With respect to measures used by a qualified clinical data registry—
(I)
(II) measures endorsed by the entity with a contract with the Secretary under
(iv) Consultation
In carrying out this subparagraph, the Secretary shall consult with interested parties.
(v) Determination
The Secretary shall establish a process to determine whether or not an entity meets the requirements established under clause (i). Such process may involve one or both of the following:
(I) A determination by the Secretary.
(II) A designation by the Secretary of one or more independent organizations to make such determination.
(F) Authority to revise satisfactorily reporting data
For years after 2009, the Secretary, in consultation with stakeholders and experts, may revise the criteria under this subsection for satisfactorily submitting data on quality measures under subparagraph (A) and the criteria for submitting data on electronic prescribing quality measures under subparagraph (B)(ii).
(4) Form of payment
The payment under this subsection shall be in the form of a single consolidated payment.
(5) Application
(A) Physician reporting system rules
Paragraphs (5), (6), and (8) of subsection (k) shall apply for purposes of this subsection in the same manner as they apply for purposes of such subsection.
(B) Coordination with other bonus payments
The provisions of this subsection shall not be taken into account in applying subsections (m) and (u) of
(C) Implementation
Notwithstanding any other provision of law, for 2007, 2008, and 2009, the Secretary may implement by program instruction or otherwise this subsection.
(D) Validation
(i) In general
Subject to the succeeding provisions of this subparagraph, for purposes of determining whether a measure is applicable to the covered professional services of an eligible professional under this subsection for 2007 and 2008, the Secretary shall presume that if an eligible professional submits data for a measure, such measure is applicable to such professional.
(ii) Method
The Secretary may establish procedures to validate (by sampling or other means as the Secretary determines to be appropriate) whether measures applicable to covered professional services of an eligible professional have been reported.
(iii) Denial of payment authority
If the Secretary determines that an eligible professional (or, in the case of a group practice under paragraph (3)(C), the group practice) has not reported measures applicable to covered professional services of such professional, the Secretary shall not pay the incentive payment under this subsection. If such payments for such period have already been made, the Secretary shall recoup such payments from the eligible professional (or the group practice).
(E) Limitations on review
Except as provided in subparagraph (I), there shall be no administrative or judicial review under
(i) the determination of measures applicable to services furnished by eligible professionals under this subsection;
(ii) the determination of satisfactory reporting under this subsection;
(iii) the determination of a successful electronic prescriber under paragraph (3), the limitation under paragraph (2)(B), and the exception under subsection (a)(5)(B); and
(iv) the determination of any incentive payment under this subsection and the payment adjustment under paragraphs (5)(A) and (8)(A) of subsection (a).
(F) Extension
For 2008 through reporting periods occurring in 2015, the Secretary shall establish and, for reporting periods occurring in 2016 and subsequent years, the Secretary may establish alternative criteria for satisfactorily reporting under this subsection and alternative reporting periods under paragraph (6)(C) for reporting groups of measures under subsection (k)(2)(B) and for reporting using the method specified in subsection (k)(4).
(G) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names of the following:
(i) The eligible professionals (or, in the case of reporting under paragraph (3)(C), the group practices) who satisfactorily submitted data on quality measures under this subsection.
(ii) The eligible professionals (or, in the case of reporting under paragraph (3)(C), the group practices) who are successful electronic prescribers.
(H) Feedback
The Secretary shall provide timely feedback to eligible professionals on the performance of the eligible professional with respect to satisfactorily submitting data on quality measures under this subsection.
(I) Informal appeals process
The Secretary shall, by not later than January 1, 2011, establish and have in place an informal process for eligible professionals to seek a review of the determination that an eligible professional did not satisfactorily submit data on quality measures under this subsection.
(6) Definitions
For purposes of this subsection:
(A) Eligible professional; covered professional services
The terms "eligible professional" and "covered professional services" have the meanings given such terms in subsection (k)(3).
(B) Physician reporting system
The term "physician reporting system" means the system established under subsection (k).
(C) Reporting period
(i) In general
Subject to clauses (ii) and (iii), the term "reporting period" means—
(I) for 2007, the period beginning on July 1, 2007, and ending on December 31, 2007; and
(II) for 2008 and subsequent years, the entire year.
(ii) Authority to revise reporting period
For years after 2009, the Secretary may revise the reporting period under clause (i) if the Secretary determines such revision is appropriate, produces valid results on measures reported, and is consistent with the goals of maximizing scientific validity and reducing administrative burden. If the Secretary revises such period pursuant to the preceding sentence, the term "reporting period" shall mean such revised period.
(iii) Reference
Any reference in this subsection to a reporting period with respect to the application of subsection (a)(5) (a)(8) 7 shall be deemed a reference to the reporting period under subsection (a)(5)(D)(iii) or the quality reporting period under subsection (a)(8)(D)(iii),8 respectively.
(7) Integration of physician quality reporting and EHR reporting
Not later than January 1, 2012, the Secretary shall develop a plan to integrate reporting on quality measures under this subsection with reporting requirements under subsection (o) relating to the meaningful use of electronic health records. Such integration shall consist of the following:
(A) The selection of measures, the reporting of which would both demonstrate—
(i) meaningful use of an electronic health record for purposes of subsection (o); and
(ii) quality of care furnished to an individual.
(B) Such other activities as specified by the Secretary.
(8) Additional incentive payment
(A) In general
For 2011 through 2014, if an eligible professional meets the requirements described in subparagraph (B), the applicable quality percent for such year, as described in clauses (iii) and (iv) of paragraph (1)(B), shall be increased by 0.5 percentage points.
(B) Requirements described
In order to qualify for the additional incentive payment described in subparagraph (A), an eligible professional shall meet the following requirements:
(i) The eligible professional shall—
(I) satisfactorily submit data on quality measures for purposes of paragraph (1) for a year; and
(II) have such data submitted on their behalf through a Maintenance of Certification Program (as defined in subparagraph (C)(i)) that meets—
(aa) the criteria for a registry (as described in subsection (k)(4)); or
(bb) an alternative form and manner determined appropriate by the Secretary.
(ii) The eligible professional, more frequently than is required to qualify for or maintain board certification status—
(I) participates in such a Maintenance of Certification program for a year; and
(II) successfully completes a qualified Maintenance of Certification Program practice assessment (as defined in subparagraph (C)(ii)) for such year.
(iii) A Maintenance of Certification program submits to the Secretary, on behalf of the eligible professional, information—
(I) in a form and manner specified by the Secretary, that the eligible professional has successfully met the requirements of clause (ii) (which may be in the form of a structural measure);
(II) if requested by the Secretary, on the survey of patient experience with care (as described in subparagraph (C)(ii)(II)); and
(III) as the Secretary may require, on the methods, measures, and data used under the Maintenance of Certification Program and the qualified Maintenance of Certification Program practice assessment.
(C) Definitions
For purposes of this paragraph:
(i) The term "Maintenance of Certification Program" means a continuous assessment program, such as qualified American Board of Medical Specialties Maintenance of Certification program or an equivalent program (as determined by the Secretary), that advances quality and the lifelong learning and self-assessment of board certified specialty physicians by focusing on the competencies of patient care, medical knowledge, practice-based learning, interpersonal and communication skills and professionalism. Such a program shall include the following:
(I) The program requires the physician to maintain a valid, unrestricted medical license in the United States.
(II) The program requires a physician to participate in educational and self-assessment programs that require an assessment of what was learned.
(III) The program requires a physician to demonstrate, through a formalized, secure examination, that the physician has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty.
(IV) The program requires successful completion of a qualified Maintenance of Certification Program practice assessment as described in clause (ii).
(ii) The term "qualified Maintenance of Certification Program practice assessment" means an assessment of a physician's practice that—
(I) includes an initial assessment of an eligible professional's practice that is designed to demonstrate the physician's use of evidence-based medicine;
(II) includes a survey of patient experience with care; and
(III) requires a physician to implement a quality improvement intervention to address a practice weakness identified in the initial assessment under subclause (I) and then to remeasure to assess performance improvement after such intervention.
(9) Continued application for purposes of MIPS and for certain professionals volunteering to report
The Secretary shall, in accordance with subsection (q)(1)(F), carry out the processes under this subsection—
(A) for purposes of subsection (q); and
(B) for eligible professionals who are not MIPS eligible professionals (as defined in subsection (q)(1)(C)) for the year involved.
(n) Physician Feedback Program
(1) Establishment
(A) In general
(i) Establishment
The Secretary shall establish a Physician Feedback Program (in this subsection referred to as the "Program").
(ii) Reports on resources
The Secretary shall use claims data under this subchapter (and may use other data) to provide confidential reports to physicians (and, as determined appropriate by the Secretary, to groups of physicians) that measure the resources involved in furnishing care to individuals under this subchapter.
(iii) Inclusion of certain information
If determined appropriate by the Secretary, the Secretary may include information on the quality of care furnished to individuals under this subchapter by the physician (or group of physicians) in such reports.
(B) Resource use
The resources described in subparagraph (A)(ii) may be measured—
(i) on an episode basis;
(ii) on a per capita basis; or
(iii) on both an episode and a per capita basis.
(2) Implementation
The Secretary shall implement the Program by not later than January 1, 2009.
(3) Data for reports
To the extent practicable, reports under the Program shall be based on the most recent data available.
(4) Authority to focus initial application
The Secretary may focus the initial application of the Program as appropriate, such as focusing the Program on—
(A) physician specialties that account for a certain percentage of all spending for physicians' services under this subchapter;
(B) physicians who treat conditions that have a high cost or a high volume, or both, under this subchapter;
(C) physicians who use a high amount of resources compared to other physicians;
(D) physicians practicing in certain geographic areas; or
(E) physicians who treat a minimum number of individuals under this subchapter.
(5) Authority to exclude certain information if insufficient information
The Secretary may exclude certain information regarding a service from a report under the Program with respect to a physician (or group of physicians) if the Secretary determines that there is insufficient information relating to that service to provide a valid report on that service.
(6) Adjustment of data
To the extent practicable, the Secretary shall make appropriate adjustments to the data used in preparing reports under the Program, such as adjustments to take into account variations in health status and other patient characteristics. For adjustments for reports on utilization under paragraph (9), see subparagraph (D) of such paragraph.
(7) Education and outreach
The Secretary shall provide for education and outreach activities to physicians on the operation of, and methodologies employed under, the Program.
(8) Disclosure exemption
Reports under the Program shall be exempt from disclosure under
(9) Reports on utilization
(A) Development of episode grouper
(i) In general
The Secretary shall develop an episode grouper that combines separate but clinically related items and services into an episode of care for an individual, as appropriate.
(ii) Timeline for development
The episode grouper described in subparagraph (A) 9 shall be developed by not later than January 1, 2012.
(iii) Public availability
The Secretary shall make the details of the episode grouper described in subparagraph (A) 9 available to the public.
(iv) Endorsement
The Secretary shall seek endorsement of the episode grouper described in subparagraph (A) 9 by the entity with a contract under
(B) Reports on utilization
Effective beginning with 2012, the Secretary shall provide reports to physicians that compare, as determined appropriate by the Secretary, patterns of resource use of the individual physician to such patterns of other physicians.
(C) Analysis of data
The Secretary shall, for purposes of preparing reports under this paragraph, establish methodologies as appropriate, such as to—
(i) attribute episodes of care, in whole or in part, to physicians;
(ii) identify appropriate physicians for purposes of comparison under subparagraph (B); and
(iii) aggregate episodes of care attributed to a physician under clause (i) into a composite measure per individual.
(D) Data adjustment
In preparing reports under this paragraph, the Secretary shall make appropriate adjustments, including adjustments—
(i) to account for differences in socioeconomic and demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less healthy individuals may require more intensive interventions); and
(ii) to eliminate the effect of geographic adjustments in payment rates (as described in subsection (e)).
(E) Public availability of methodology
The Secretary shall make available to the public—
(i) the methodologies established under subparagraph (C);
(ii) information regarding any adjustments made to data under subparagraph (D); and
(iii) aggregate reports with respect to physicians.
(F) Definition of physician
In this paragraph:
(i) In general
The term "physician" has the meaning given that term in
(ii) Treatment of groups
Such term includes, as the Secretary determines appropriate, a group of physicians.
(G) Limitations on review
There shall be no administrative or judicial review under
(10) Coordination with other value-based purchasing reforms
The Secretary shall coordinate the Program with the value-based payment modifier established under subsection (p) and, as the Secretary determines appropriate, other similar provisions of this subchapter.
(11) Reports ending with 2017
Reports under the Program shall not be provided after December 31, 2017. See subsection (q)(12) for reports under the eligible professionals Merit-based Incentive Payment System.
(o) Incentives for adoption and meaningful use of certified EHR technology
(1) Incentive payments
(A) In general
(i) In general
Subject to the succeeding subparagraphs of this paragraph, with respect to covered professional services furnished by an eligible professional during a payment year (as defined in subparagraph (E)), if the eligible professional is a meaningful EHR user (as determined under paragraph (2)) for the EHR reporting period with respect to such year, in addition to the amount otherwise paid under this part, there also shall be paid to the eligible professional (or to an employer or facility in the cases described in clause (A) of
(ii) No incentive payments with respect to years after 2016
No incentive payments may be made under this subsection with respect to a year after 2016.
(B) Limitations on amounts of incentive payments
(i) In general
In no case shall the amount of the incentive payment provided under this paragraph for an eligible professional for a payment year exceed the applicable amount specified under this subparagraph with respect to such eligible professional and such year.
(ii) Amount
Subject to clauses (iii) through (v), the applicable amount specified in this subparagraph for an eligible professional is as follows:
(I) For the first payment year for such professional, $15,000 (or, if the first payment year for such eligible professional is 2011 or 2012, $18,000).
(II) For the second payment year for such professional, $12,000.
(III) For the third payment year for such professional, $8,000.
(IV) For the fourth payment year for such professional, $4,000.
(V) For the fifth payment year for such professional, $2,000.
(VI) For any succeeding payment year for such professional, $0.
(iii) Phase down for eligible professionals first adopting EHR after 2013
If the first payment year for an eligible professional is after 2013, then the amount specified in this subparagraph for a payment year for such professional is the same as the amount specified in clause (ii) for such payment year for an eligible professional whose first payment year is 2013.
(iv) Increase for certain eligible professionals
In the case of an eligible professional who predominantly furnishes services under this part in an area that is designated by the Secretary (under
(v) No incentive payment if first adopting after 2014
If the first payment year for an eligible professional is after 2014 then the applicable amount specified in this subparagraph for such professional for such year and any subsequent year shall be $0.
(C) Non-application to hospital-based eligible professionals
(i) In general
No incentive payment may be made under this paragraph in the case of a hospital-based eligible professional.
(ii) Hospital-based eligible professional
For purposes of clause (i), the term "hospital-based eligible professional" means, with respect to covered professional services furnished by an eligible professional during the EHR reporting period for a payment year, an eligible professional, such as a pathologist, anesthesiologist, or emergency physician, who furnishes substantially all of such services in a hospital inpatient or emergency room setting and through the use of the facilities and equipment, including qualified electronic health records, of the hospital. The determination of whether an eligible professional is a hospital-based eligible professional shall be made on the basis of the site of service (as defined by the Secretary) and without regard to any employment or billing arrangement between the eligible professional and any other provider.
(D) Payment
(i) Form of payment
The payment under this paragraph may be in the form of a single consolidated payment or in the form of such periodic installments as the Secretary may specify.
(ii) Coordination of application of limitation for professionals in different practices
In the case of an eligible professional furnishing covered professional services in more than one practice (as specified by the Secretary), the Secretary shall establish rules to coordinate the incentive payments, including the application of the limitation on amounts of such incentive payments under this paragraph, among such practices.
(iii) Coordination with Medicaid
The Secretary shall seek, to the maximum extent practicable, to avoid duplicative requirements from Federal and State governments to demonstrate meaningful use of certified EHR technology under this subchapter and subchapter XIX. The Secretary may also adjust the reporting periods under such subchapter and such subsections in order to carry out this clause.
(E) Payment year defined
(i) In general
For purposes of this subsection, the term "payment year" means a year beginning with 2011.
(ii) First, second, etc. payment year
The term "first payment year" means, with respect to covered professional services furnished by an eligible professional, the first year for which an incentive payment is made for such services under this subsection. The terms "second payment year", "third payment year", "fourth payment year", and "fifth payment year" mean, with respect to covered professional services furnished by such eligible professional, each successive year immediately following the first payment year for such professional.
(2) Meaningful EHR user
(A) In general
An eligible professional shall be treated as a meaningful EHR user for an EHR reporting period for a payment year (or, for purposes of subsection (a)(7), for an EHR reporting period under such subsection for a year, or pursuant to subparagraph (D) for purposes of subsection (q), for a performance period under such subsection for a year) if each of the following requirements is met:
(i) Meaningful use of certified EHR technology
The eligible professional demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (C)(i), that during such period the professional is using certified EHR technology in a meaningful manner, which shall include the use of electronic prescribing as determined to be appropriate by the Secretary.
(ii) Information exchange
The eligible professional demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (C)(i), that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination, and the professional demonstrates (through a process specified by the Secretary, such as the use of an attestation) that the professional has not knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability of the certified EHR technology.
(iii) Reporting on measures using EHR
Subject to subparagraph (B)(ii) and subsection (q)(5)(B)(ii)(II) and using such certified EHR technology, the eligible professional submits information for such period, in a form and manner specified by the Secretary, on such clinical quality measures and such other measures as selected by the Secretary under subparagraph (B)(i).
The Secretary may provide for the use of alternative means for meeting the requirements of clauses (i), (ii), and (iii) in the case of an eligible professional furnishing covered professional services in a group practice (as defined by the Secretary). The Secretary shall seek to improve the use of electronic health records and health care quality over time.
(B) Reporting on measures
(i) Selection
The Secretary shall select measures for purposes of subparagraph (A)(iii) but only consistent with the following:
(I) The Secretary shall provide preference to clinical quality measures that have been endorsed by the entity with a contract with the Secretary under
(II) Prior to any measure being selected under this subparagraph, the Secretary shall publish in the Federal Register such measure and provide for a period of public comment on such measure.
(ii) Limitation
The Secretary may not require the electronic reporting of information on clinical quality measures under subparagraph (A)(iii) unless the Secretary has the capacity to accept the information electronically, which may be on a pilot basis.
(iii) Coordination of reporting of information
In selecting such measures, and in establishing the form and manner for reporting measures under subparagraph (A)(iii), the Secretary shall seek to avoid redundant or duplicative reporting otherwise required, including reporting under subsection (k)(2)(C).
(C) Demonstration of meaningful use of certified EHR technology and information exchange
(i) In general
A professional may satisfy the demonstration requirement of clauses (i) and (ii) of subparagraph (A) through means specified by the Secretary, which may include—
(I) an attestation;
(II) the submission of claims with appropriate coding (such as a code indicating that a patient encounter was documented using certified EHR technology);
(III) a survey response;
(IV) reporting under subparagraph (A)(iii); and
(V) other means specified by the Secretary.
(ii) Use of part D data
Notwithstanding
(D) Continued application for purposes of MIPS
With respect to 2019 and each subsequent payment year, the Secretary shall, for purposes of subsection (q) and in accordance with paragraph (1)(F) of such subsection, determine whether an eligible professional who is a MIPS eligible professional (as defined in subsection (q)(1)(C)) for such year is a meaningful EHR user under this paragraph for the performance period under subsection (q) for such year. The provisions of subparagraphs (B) and (D) of subsection (a)(7),5 shall apply to assessments of MIPS eligible professionals under subsection (q) with respect to the performance category described in subsection (q)(2)(A)(iv) in an appropriate manner which may be similar to the manner in which such provisions apply with respect to payment adjustments made under subsection (a)(7)(A).
(3) Application
(A) Physician reporting system rules
Paragraphs (5), (6), and (8) of subsection (k) shall apply for purposes of this subsection in the same manner as they apply for purposes of such subsection.
(B) Coordination with other payments
The provisions of this subsection shall not be taken into account in applying the provisions of subsection (m) of this section and of
(C) Limitations on review
There shall be no administrative or judicial review under
(i) the methodology and standards for determining payment amounts under this subsection and payment adjustments under subsection (a)(7)(A), including the limitation under paragraph (1)(B) and coordination under clauses (ii) and (iii) of paragraph (1)(D);
(ii) the methodology and standards for determining a meaningful EHR user under paragraph (2), including selection of measures under paragraph (2)(B), specification of the means of demonstrating meaningful EHR use under paragraph (2)(C), and the hardship exception under subsection (a)(7)(B);
(iii) the methodology and standards for determining a hospital-based eligible professional under paragraph (1)(C); and
(iv) the specification of reporting periods under paragraph (5) and the selection of the form of payment under paragraph (1)(D)(i).
(D) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, business addresses, and business phone numbers of the eligible professionals who are meaningful EHR users and, as determined appropriate by the Secretary, of group practices receiving incentive payments under paragraph (1).
(4) Certified EHR technology defined
For purposes of this section, the term "certified EHR technology" means a qualified electronic health record (as defined in
(5) Definitions
For purposes of this subsection:
(A) Covered professional services
The term "covered professional services" has the meaning given such term in subsection (k)(3).
(B) EHR reporting period
The term "EHR reporting period" means, with respect to a payment year, any period (or periods) as specified by the Secretary.
(C) Eligible professional
The term "eligible professional" means a physician, as defined in
(p) Establishment of value-based payment modifier
(1) In general
The Secretary shall establish a payment modifier that provides for differential payment to a physician or a group of physicians under the fee schedule established under subsection (b) based upon the quality of care furnished compared to cost (as determined under paragraphs (2) and (3), respectively) during a performance period. Such payment modifier shall be separate from the geographic adjustment factors established under subsection (e).
(2) Quality
(A) In general
For purposes of paragraph (1), quality of care shall be evaluated, to the extent practicable, based on a composite of measures of the quality of care furnished (as established by the Secretary under subparagraph (B)).
(B) Measures
(i) The Secretary shall establish appropriate measures of the quality of care furnished by a physician or group of physicians to individuals enrolled under this part, such as measures that reflect health outcomes. Such measures shall be risk adjusted as determined appropriate by the Secretary.
(ii) The Secretary shall seek endorsement of the measures established under this subparagraph by the entity with a contract under
(C) Continued application for purposes of MIPS
The Secretary shall, in accordance with subsection (q)(1)(F), carry out subparagraph (B) for purposes of subsection (q).
(3) Costs
For purposes of paragraph (1), costs shall be evaluated, to the extent practicable, based on a composite of appropriate measures of costs established by the Secretary (such as the composite measure under the methodology established under subsection (n)(9)(C)(iii)) that eliminate the effect of geographic adjustments in payment rates (as described in subsection (e)), and take into account risk factors (such as socioeconomic and demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less healthy individuals may require more intensive interventions) 10 and other factors determined appropriate by the Secretary. With respect to 2019 and each subsequent year, the Secretary shall, in accordance with subsection (q)(1)(F), carry out this paragraph for purposes of subsection (q).
(4) Implementation
(A) Publication of measures, dates of implementation, performance period
Not later than January 1, 2012, the Secretary shall publish the following:
(i) The measures of quality of care and costs established under paragraphs (2) and (3), respectively.
(ii) The dates for implementation of the payment modifier (as determined under subparagraph (B)).
(iii) The initial performance period (as specified under subparagraph (B)(ii)).
(B) Deadlines for implementation
(i) Initial implementation
Subject to the preceding provisions of this subparagraph, the Secretary shall begin implementing the payment modifier established under this subsection through the rulemaking process during 2013 for the physician fee schedule established under subsection (b).
(ii) Initial performance period
(I) In general
The Secretary shall specify an initial performance period for application of the payment modifier established under this subsection with respect to 2015.
(II) Provision of information during initial performance period
During the initial performance period, the Secretary shall, to the extent practicable, provide information to physicians and groups of physicians about the quality of care furnished by the physician or group of physicians to individuals enrolled under this part compared to cost (as determined under paragraphs (2) and (3), respectively) with respect to the performance period.
(iii) Application
The Secretary shall apply the payment modifier established under this subsection for items and services furnished on or after January 1, 2015, with respect to specific physicians and groups of physicians the Secretary determines appropriate, and for services furnished on or after January 1, 2017, with respect to all physicians and groups of physicians. Such payment modifier shall not be applied for items and services furnished on or after January 1, 2019.
(C) Budget neutrality
The payment modifier established under this subsection shall be implemented in a budget neutral manner.
(5) Systems-based care
The Secretary shall, as appropriate, apply the payment modifier established under this subsection in a manner that promotes systems-based care.
(6) Consideration of special circumstances of certain providers
In applying the payment modifier under this subsection, the Secretary shall, as appropriate, take into account the special circumstances of physicians or groups of physicians in rural areas and other underserved communities.
(7) Application
For purposes of the initial application of the payment modifier established under this subsection during the period beginning on January 1, 2015, and ending on December 31, 2016, the term "physician" has the meaning given such term in
(8) Definitions
For purposes of this subsection:
(A) Costs
The term "costs" means expenditures per individual as determined appropriate by the Secretary. In making the determination under the preceding sentence, the Secretary may take into account the amount of growth in expenditures per individual for a physician compared to the amount of such growth for other physicians.
(B) Performance period
The term "performance period" means a period specified by the Secretary.
(9) Coordination with other value-based purchasing reforms
The Secretary shall coordinate the value-based payment modifier established under this subsection with the Physician Feedback Program under subsection (n) and, as the Secretary determines appropriate, other similar provisions of this subchapter.
(10) Limitations on review
There shall be no administrative or judicial review under
(A) the establishment of the value-based payment modifier under this subsection;
(B) the evaluation of quality of care under paragraph (2), including the establishment of appropriate measures of the quality of care under paragraph (2)(B);
(C) the evaluation of costs under paragraph (3), including the establishment of appropriate measures of costs under such paragraph;
(D) the dates for implementation of the value-based payment modifier;
(E) the specification of the initial performance period and any other performance period under paragraphs (4)(B)(ii) and (8)(B), respectively;
(F) the application of the value-based payment modifier under paragraph (7); and
(G) the determination of costs under paragraph (8)(A).
(q) Merit-based Incentive Payment System
(1) Establishment
(A) In general
Subject to the succeeding provisions of this subsection, the Secretary shall establish an eligible professional Merit-based Incentive Payment System (in this subsection referred to as the "MIPS") under which the Secretary shall—
(i) develop a methodology for assessing the total performance of each MIPS eligible professional according to performance standards under paragraph (3) for a performance period (as established under paragraph (4)) for a year;
(ii) using such methodology, provide for a composite performance score in accordance with paragraph (5) for each such professional for each performance period; and
(iii) use such composite performance score of the MIPS eligible professional for a performance period for a year to determine and apply a MIPS adjustment factor (and, as applicable, an additional MIPS adjustment factor) under paragraph (6) to the professional for the year.
Notwithstanding subparagraph (C)(ii), under the MIPS, the Secretary shall permit any eligible professional (as defined in subsection (k)(3)(B)) to report on applicable measures and activities described in paragraph (2)(B).
(B) Program implementation
The MIPS shall apply to payments for covered professional services (as defined in subsection (k)(3)(A)) furnished on or after January 1, 2019.
(C) MIPS eligible professional defined
(i) In general
For purposes of this subsection, subject to clauses (ii) and (iv), the term "MIPS eligible professional" means—
(I) for the first and second years for which the MIPS applies to payments (and for the performance period for such first and second year), a physician (as defined in
(II) for the third year for which the MIPS applies to payments (and for the performance period for such third year) and for each succeeding year (and for the performance period for each such year), the professionals described in subclause (I), such other eligible professionals (as defined in subsection (k)(3)(B)) as specified by the Secretary, and a group that includes such professionals.
(ii) Exclusions
For purposes of clause (i), the term "MIPS eligible professional" does not include, with respect to a year, an eligible professional (as defined in subsection (k)(3)(B)) who—
(I) is a qualifying APM participant (as defined in
(II) subject to clause (vii), is a partial qualifying APM participant (as defined in clause (iii)) for the most recent period for which data are available and who, for the performance period with respect to such year, does not report on applicable measures and activities described in paragraph (2)(B) that are required to be reported by such a professional under the MIPS; or
(III) for the performance period with respect to such year, does not exceed the low-volume threshold measurement selected under clause (iv).
(iii) Partial qualifying APM participant
For purposes of this subparagraph, the term "partial qualifying APM participant" means, with respect to a year, an eligible professional for whom the Secretary determines the minimum payment percentage (or percentages), as applicable, described in paragraph (2) of
(I) with respect to 2019 and 2020, the reference in subparagraph (A) of such paragraph to 25 percent was instead a reference to 20 percent;
(II) with respect to each of 2021 through 2026—
(aa) the reference in subparagraph (B)(i) of such paragraph to 50 percent was instead a reference to 40 percent; and
(bb) the references in subparagraph (B)(ii) of such paragraph to 50 percent and 25 percent of such paragraph 7 were instead references to 40 percent and 20 percent, respectively; and
(III) with respect to 2027 and subsequent years—
(aa) the reference in subparagraph (C)(i) of such paragraph to 75 percent was instead a reference to 50 percent; and
(bb) the references in subparagraph (C)(ii) of such paragraph to 75 percent and 25 percent of such paragraph 7 were instead references to 50 percent and 20 percent, respectively.
(iv) Selection of low-volume threshold measurement
The Secretary shall select a low-volume threshold to apply for purposes of clause (ii)(III), which may include one or more or a combination of the following:
(I) The minimum number (as determined by the Secretary) of—
(aa) for performance periods beginning before January 1, 2018, individuals enrolled under this part who are treated by the eligible professional for the performance period involved; and
(bb) for performance periods beginning on or after January 1, 2018, individuals enrolled under this part who are furnished covered professional services (as defined in subsection (k)(3)(A)) by the eligible professional for the performance period involved.
(II) The minimum number (as determined by the Secretary) of covered professional services (as defined in subsection (k)(3)(A)) furnished to individuals enrolled under this part by such professional for such performance period.
(III) The minimum amount (as determined by the Secretary) of—
(aa) for performance periods beginning before January 1, 2018, allowed charges billed by such professional under this part for such performance period; and
(bb) for performance periods beginning on or after January 1, 2018, allowed charges for covered professional services (as defined in subsection (k)(3)(A)) billed by such professional for such performance period.
(v) Treatment of new Medicare enrolled eligible professionals
In the case of a professional who first becomes a Medicare enrolled eligible professional during the performance period for a year (and had not previously submitted claims under this subchapter such as a person, an entity, or a part of a physician group or under a different billing number or tax identifier), such professional shall not be treated under this subsection as a MIPS eligible professional until the subsequent year and performance period for such subsequent year.
(vi) Clarification
In the case of items and services furnished during a year by an individual who is not a MIPS eligible professional (including pursuant to clauses (ii) and (v)) with respect to a year, in no case shall a MIPS adjustment factor (or additional MIPS adjustment factor) under paragraph (6) apply to such individual for such year.
(vii) Partial qualifying APM participant clarifications
(I) Treatment as MIPS eligible professional
In the case of an eligible professional who is a partial qualifying APM participant, with respect to a year, and who, for the performance period for such year, reports on applicable measures and activities described in paragraph (2)(B) that are required to be reported by such a professional under the MIPS, such eligible professional is considered to be a MIPS eligible professional with respect to such year.
(II) Not eligible for qualifying APM participant payments
In no case shall an eligible professional who is a partial qualifying APM participant, with respect to a year, be considered a qualifying APM participant (as defined in paragraph (2) of
(D) Application to group practices
(i) In general
Under the MIPS:
(I) Quality performance category
The Secretary shall establish and apply a process that includes features of the provisions of subsection (m)(3)(C) for MIPS eligible professionals in a group practice with respect to assessing performance of such group with respect to the performance category described in clause (i) of paragraph (2)(A).
(II) Other performance categories
The Secretary may establish and apply a process that includes features of the provisions of subsection (m)(3)(C) for MIPS eligible professionals in a group practice with respect to assessing the performance of such group with respect to the performance categories described in clauses (ii) through (iv) of such paragraph.
(ii) Ensuring comprehensiveness of group practice assessment
The process established under clause (i) shall to the extent practicable reflect the range of items and services furnished by the MIPS eligible professionals in the group practice involved.
(E) Use of registries
Under the MIPS, the Secretary shall encourage the use of qualified clinical data registries pursuant to subsection (m)(3)(E) in carrying out this subsection.
(F) Application of certain provisions
In applying a provision of subsection (k), (m), (o), or (p) for purposes of this subsection, the Secretary shall—
(i) adjust the application of such provision to ensure the provision is consistent with the provisions of this subsection; and
(ii) not apply such provision to the extent that the provision is duplicative with a provision of this subsection.
(G) Accounting for risk factors
(i) Risk factors
Taking into account the relevant studies conducted and recommendations made in reports under section 2(d) of the Improving Medicare Post-Acute Care Transformation Act of 2014, and, as appropriate, other information, including information collected before completion of such studies and recommendations, the Secretary, on an ongoing basis, shall, as the Secretary determines appropriate and based on an individual's health status and other risk factors—
(I) assess appropriate adjustments to quality measures, resource use measures, and other measures used under the MIPS; and
(II) assess and implement appropriate adjustments to payment adjustments, composite performance scores, scores for performance categories, or scores for measures or activities under the MIPS.
(2) Measures and activities under performance categories
(A) Performance categories
Under the MIPS, the Secretary shall use the following performance categories (each of which is referred to in this subsection as a performance category) in determining the composite performance score under paragraph (5):
(i) Quality.
(ii) Resource use.
(iii) Clinical practice improvement activities.
(iv) Meaningful use of certified EHR technology.
(B) Measures and activities specified for each category
For purposes of paragraph (3)(A) and subject to subparagraph (C), measures and activities specified for a performance period (as established under paragraph (4)) for a year are as follows:
(i) Quality
For the performance category described in subparagraph (A)(i), the quality measures included in the final measures list published under subparagraph (D)(i) for such year and the list of quality measures described in subparagraph (D)(vi) used by qualified clinical data registries under subsection (m)(3)(E).
(ii) Resource use
For the performance category described in subparagraph (A)(ii), the measurement of resource use for such period under subsection (p)(3), using the methodology under subsection (r) as appropriate, and, as feasible and applicable, accounting for the cost of drugs under part D.
(iii) Clinical practice improvement activities
For the performance category described in subparagraph (A)(iii), clinical practice improvement activities (as defined in subparagraph (C)(v)(III)) under subcategories specified by the Secretary for such period, which shall include at least the following:
(I) The subcategory of expanded practice access, such as same day appointments for urgent needs and after hours access to clinician advice.
(II) The subcategory of population management, such as monitoring health conditions of individuals to provide timely health care interventions or participation in a qualified clinical data registry.
(III) The subcategory of care coordination, such as timely communication of test results, timely exchange of clinical information to patients and other providers, and use of remote monitoring or telehealth.
(IV) The subcategory of beneficiary engagement, such as the establishment of care plans for individuals with complex care needs, beneficiary self-management assessment and training, and using shared decision-making mechanisms. This subcategory shall include as an activity, for performance periods beginning on or after January 1, 2022, use of a real-time benefit tool as described in
(V) The subcategory of patient safety and practice assessment, such as through use of clinical or surgical checklists and practice assessments related to maintaining certification.
(VI) The subcategory of participation in an alternative payment model (as defined in
In establishing activities under this clause, the Secretary shall give consideration to the circumstances of small practices (consisting of 15 or fewer professionals) and practices located in rural areas and in health professional shortage areas (as designated under
(iv) Meaningful EHR use
For the performance category described in subparagraph (A)(iv), the requirements established for such period under subsection (o)(2) for determining whether an eligible professional is a meaningful EHR user.
(C) Additional provisions
(i) Emphasizing outcome measures under the quality performance category
In applying subparagraph (B)(i), the Secretary shall, as feasible, emphasize the application of outcome measures.
(ii) Application of additional system measures
The Secretary may use measures used for a payment system other than for physicians, such as measures for inpatient hospitals, for purposes of the performance categories described in clauses (i) and (ii) of subparagraph (A). For purposes of the previous sentence, the Secretary may not use measures for hospital outpatient departments, except in the case of items and services furnished by emergency physicians, radiologists, and anesthesiologists.
(iii) Global and population-based measures
The Secretary may use global measures, such as global outcome measures, and population-based measures for purposes of the performance category described in subparagraph (A)(i).
(iv) Application of measures and activities to non-patient-facing professionals
In carrying out this paragraph, with respect to measures and activities specified in subparagraph (B) for performance categories described in subparagraph (A), the Secretary—
(I) shall give consideration to the circumstances of professional types (or subcategories of those types determined by practice characteristics) who typically furnish services that do not involve face-to-face interaction with a patient; and
(II) may, to the extent feasible and appropriate, take into account such circumstances and apply under this subsection with respect to MIPS eligible professionals of such professional types or subcategories, alternative measures or activities that fulfill the goals of the applicable performance category.
In carrying out the previous sentence, the Secretary shall consult with professionals of such professional types or subcategories.
(v) Clinical practice improvement activities
(I) Request for information
In initially applying subparagraph (B)(iii), the Secretary shall use a request for information to solicit recommendations from stakeholders to identify activities described in such subparagraph and specifying criteria for such activities.
(II) Contract authority for clinical practice improvement activities performance category
In applying subparagraph (B)(iii), the Secretary may contract with entities to assist the Secretary in—
(aa) identifying activities described in subparagraph (B)(iii);
(bb) specifying criteria for such activities; and
(cc) determining whether a MIPS eligible professional meets such criteria.
(III) Clinical practice improvement activities defined
For purposes of this subsection, the term "clinical practice improvement activity" means an activity that relevant eligible professional organizations and other relevant stakeholders identify as improving clinical practice or care delivery and that the Secretary determines, when effectively executed, is likely to result in improved outcomes.
(D) Annual list of quality measures available for MIPS assessment
(i) In general
Under the MIPS, the Secretary, through notice and comment rulemaking and subject to the succeeding clauses of this subparagraph, shall, with respect to the performance period for a year, establish an annual final list of quality measures from which MIPS eligible professionals may choose for purposes of assessment under this subsection for such performance period. Pursuant to the previous sentence, the Secretary shall—
(I) not later than November 1 of the year prior to the first day of the first performance period under the MIPS, establish and publish in the Federal Register a final list of quality measures; and
(II) not later than November 1 of the year prior to the first day of each subsequent performance period, update the final list of quality measures from the previous year (and publish such updated final list in the Federal Register), by—
(aa) removing from such list, as appropriate, quality measures, which may include the removal of measures that are no longer meaningful (such as measures that are topped out);
(bb) adding to such list, as appropriate, new quality measures; and
(cc) determining whether or not quality measures on such list that have undergone substantive changes should be included in the updated list.
(ii) Call for quality measures
(I) In general
Eligible professional organizations and other relevant stakeholders shall be requested to identify and submit quality measures to be considered for selection under this subparagraph in the annual list of quality measures published under clause (i) and to identify and submit updates to the measures on such list. For purposes of the previous sentence, measures may be submitted regardless of whether such measures were previously published in a proposed rule or endorsed by an entity with a contract under
(II) Eligible professional organization defined
In this subparagraph, the term "eligible professional organization" means a professional organization as defined by nationally recognized specialty boards of certification or equivalent certification boards.
(iii) Requirements
In selecting quality measures for inclusion in the annual final list under clause (i), the Secretary shall—
(I) provide that, to the extent practicable, all quality domains (as defined in subsection (s)(1)(B)) are addressed by such measures; and
(II) ensure that such selection is consistent with the process for selection of measures under subsections (k), (m), and (p)(2).
(iv) Peer review
Before including a new measure in the final list of measures published under clause (i) for a year, the Secretary shall submit for publication in applicable specialty-appropriate, peer-reviewed journals such measure and the method for developing and selecting such measure, including clinical and other data supporting such measure.
(v) Measures for inclusion
The final list of quality measures published under clause (i) shall include, as applicable, measures under subsections (k), (m), and (p)(2), including quality measures from among—
(I) measures endorsed by a consensus-based entity;
(II) measures developed under subsection (s); and
(III) measures submitted under clause (ii)(I).
Any measure selected for inclusion in such list that is not endorsed by a consensus-based entity shall have a focus that is evidence-based.
(vi) Exception for qualified clinical data registry measures
Measures used by a qualified clinical data registry under subsection (m)(3)(E) shall not be subject to the requirements under clauses (i), (iv), and (v). The Secretary shall publish the list of measures used by such qualified clinical data registries on the Internet website of the Centers for Medicare & Medicaid Services.
(vii) Exception for existing quality measures
Any quality measure specified by the Secretary under subsection (k) or (m), including under subsection (m)(3)(E), and any measure of quality of care established under subsection (p)(2) for the reporting period or performance period under the respective subsection beginning before the first performance period under the MIPS—
(I) shall not be subject to the requirements under clause (i) (except under items (aa) and (cc) of subclause (II) of such clause) or to the requirement under clause (iv); and
(II) shall be included in the final list of quality measures published under clause (i) unless removed under clause (i)(II)(aa).
(viii) Consultation with relevant eligible professional organizations and other relevant stakeholders
Relevant eligible professional organizations and other relevant stakeholders, including State and national medical societies, shall be consulted in carrying out this subparagraph.
(ix) Optional application
The process under
(3) Performance standards
(A) Establishment
Under the MIPS, the Secretary shall establish performance standards with respect to measures and activities specified under paragraph (2)(B) for a performance period (as established under paragraph (4)) for a year.
(B) Considerations in establishing standards
In establishing such performance standards with respect to measures and activities specified under paragraph (2)(B), the Secretary shall consider the following:
(i) Historical performance standards.
(ii) Improvement.
(iii) The opportunity for continued improvement.
(4) Performance period
The Secretary shall establish a performance period (or periods) for a year (beginning with 2019). Such performance period (or periods) shall begin and end prior to the beginning of such year and be as close as possible to such year. In this subsection, such performance period (or periods) for a year shall be referred to as the performance period for the year.
(5) Composite performance score
(A) In general
Subject to the succeeding provisions of this paragraph and taking into account, as available and applicable, paragraph (1)(G), the Secretary shall develop a methodology for assessing the total performance of each MIPS eligible professional according to performance standards under paragraph (3) with respect to applicable measures and activities specified in paragraph (2)(B) with respect to each performance category applicable to such professional for a performance period (as established under paragraph (4)) for a year. Using such methodology, the Secretary shall provide for a composite assessment (using a scoring scale of 0 to 100) for each such professional for the performance period for such year. In this subsection such a composite assessment for such a professional with respect to a performance period shall be referred to as the "composite performance score" for such professional for such performance period.
(B) Incentive to report; encouraging use of certified EHR technology for reporting quality measures
(i) Incentive to report
Under the methodology established under subparagraph (A), the Secretary shall provide that in the case of a MIPS eligible professional who fails to report on an applicable measure or activity that is required to be reported by the professional, the professional shall be treated as achieving the lowest potential score applicable to such measure or activity.
(ii) Encouraging use of certified EHR technology and qualified clinical data registries for reporting quality measures
Under the methodology established under subparagraph (A), the Secretary shall—
(I) encourage MIPS eligible professionals to report on applicable measures with respect to the performance category described in paragraph (2)(A)(i) through the use of certified EHR technology and qualified clinical data registries; and
(II) with respect to a performance period, with respect to a year, for which a MIPS eligible professional reports such measures through the use of such EHR technology, treat such professional as satisfying the clinical quality measures reporting requirement described in subsection (o)(2)(A)(iii) for such year.
(C) Clinical practice improvement activities performance score
(i) Rule for certification
A MIPS eligible professional who is in a practice that is certified as a patient-centered medical home or comparable specialty practice, as determined by the Secretary, with respect to a performance period shall be given the highest potential score for the performance category described in paragraph (2)(A)(iii) for such period.
(ii) APM participation
Participation by a MIPS eligible professional in an alternative payment model (as defined in
(iii) Subcategories
A MIPS eligible professional shall not be required to perform activities in each subcategory under paragraph (2)(B)(iii) or participate in an alternative payment model in order to achieve the highest potential score for the performance category described in paragraph (2)(A)(iii).
(D) Achievement and improvement
(i) Taking into account improvement
Beginning with the second year to which the MIPS applies, in addition to the achievement of a MIPS eligible professional, if data sufficient to measure improvement is available, the methodology developed under subparagraph (A)—
(I) in the case of the performance score for the performance category described in clauses (i) and (ii) of paragraph (2)(A), subject to clause (iii), shall take into account the improvement of the professional; and
(II) in the case of performance scores for other performance categories, may take into account the improvement of the professional.
(ii) Assigning higher weight for achievement
Subject to clause (i), under the methodology developed under subparagraph (A), the Secretary may assign a higher scoring weight under subparagraph (F) with respect to the achievement of a MIPS eligible professional than with respect to any improvement of such professional applied under clause (i) with respect to a measure, activity, or category described in paragraph (2).
(iii) Transition years
For each of the second, third, fourth, and fifth years for which the MIPS applies to payments, the performance score for the performance category described in paragraph (2)(A)(ii) shall not take into account the improvement of the professional involved.
(E) Weights for the performance categories
(i) In general
Under the methodology developed under subparagraph (A), subject to subparagraph (F)(i) and clause (ii), the composite performance score shall be determined as follows:
(I) Quality
(aa) In general
Subject to item (bb), thirty percent of such score shall be based on performance with respect to the category described in clause (i) of paragraph (2)(A). In applying the previous sentence, the Secretary shall, as feasible, encourage the application of outcome measures within such category.
(bb) First 5 years
For each of the first through fifth years for which the MIPS applies to payments, the percentage applicable under item (aa) shall be increased in a manner such that the total percentage points of the increase under this item for the respective year equals the total number of percentage points by which the percentage applied under subclause (II)(bb) for the respective year is less than 30 percent.
(II) Resource use
(aa) In general
Subject to item (bb), thirty percent of such score shall be based on performance with respect to the category described in clause (ii) of paragraph (2)(A).
(bb) First 5 years
For the first year for which the MIPS applies to payments, not more than 10 percent of such score shall be based on performance with respect to the category described in clause (ii) of paragraph (2)(A). For each of the second, third, fourth, and fifth years for which the MIPS applies to payments, not less than 10 percent and not more than 30 percent of such score shall be based on performance with respect to the category described in clause (ii) of paragraph (2)(A). Nothing in the previous sentence shall be construed, with respect to a performance period for a year described in the previous sentence, as preventing the Secretary from basing 30 percent of such score for such year with respect to the category described in such clause (ii), if the Secretary determines, based on information posted under subsection (r)(2)(I) that sufficient resource use measures are ready for adoption for use under the performance category under paragraph (2)(A)(ii) for such performance period.
(III) Clinical practice improvement activities
Fifteen percent of such score shall be based on performance with respect to the category described in clause (iii) of paragraph (2)(A).
(IV) Meaningful use of certified EHR technology
Twenty-five percent of such score shall be based on performance with respect to the category described in clause (iv) of paragraph (2)(A).
(ii) Authority to adjust percentages in case of high EHR meaningful use adoption
In any year in which the Secretary estimates that the proportion of eligible professionals (as defined in subsection (o)(5)) who are meaningful EHR users (as determined under subsection (o)(2)) is 75 percent or greater, the Secretary may reduce the percent applicable under clause (i)(IV), but not below 15 percent. If the Secretary makes such reduction for a year, subject to subclauses (I)(bb) and (II)(bb) of clause (i), the percentages applicable under one or more of subclauses (I), (II), and (III) of clause (i) for such year shall be increased in a manner such that the total percentage points of the increase under this clause for such year equals the total number of percentage points reduced under the preceding sentence for such year.
(F) Certain flexibility for weighting performance categories, measures, and activities
Under the methodology under subparagraph (A), if there are not sufficient measures and activities (described in paragraph (2)(B)) applicable and available to each type of eligible professional involved, the Secretary shall assign different scoring weights (including a weight of 0)—
(i) which may vary from the scoring weights specified in subparagraph (E), for each performance category based on the extent to which the category is applicable to the type of eligible professional involved; and
(ii) for each measure and activity specified under paragraph (2)(B) with respect to each such category based on the extent to which the measure or activity is applicable and available to the type of eligible professional involved.
(G) Resource use
Analysis of the performance category described in paragraph (2)(A)(ii) shall include results from the methodology described in subsection (r)(5), as appropriate.
(H) Inclusion of quality measure data from other payers
In applying subsections (k), (m), and (p) with respect to measures described in paragraph (2)(B)(i), analysis of the performance category described in paragraph (2)(A)(i) may include data submitted by MIPS eligible professionals with respect to items and services furnished to individuals who are not individuals entitled to benefits under part A or enrolled under part B.
(I) Use of voluntary virtual groups for certain assessment purposes
(i) In general
In the case of MIPS eligible professionals electing to be a virtual group under clause (ii) with respect to a performance period for a year, for purposes of applying the methodology under subparagraph (A) with respect to the performance categories described in clauses (i) and (ii) of paragraph (2)(A)—
(I) the assessment of performance provided under such methodology with respect to such performance categories that is to be applied to each such professional in such group for such performance period shall be with respect to the combined performance of all such professionals in such group for such period; and
(II) with respect to the composite performance score provided under this paragraph for such performance period for each such MIPS eligible professional in such virtual group, the components of the composite performance score that assess performance with respect to such performance categories shall be based on the assessment of the combined performance under subclause (I) for such performance categories and performance period.
(ii) Election of practices to be a virtual group
The Secretary shall, in accordance with the requirements under clause (iii), establish and have in place a process to allow an individual MIPS eligible professional or a group practice consisting of not more than 10 MIPS eligible professionals to elect, with respect to a performance period for a year to be a virtual group under this subparagraph with at least one other such individual MIPS eligible professional or group practice. Such a virtual group may be based on appropriate classifications of providers, such as by geographic areas or by provider specialties defined by nationally recognized specialty boards of certification or equivalent certification boards.
(iii) Requirements
The requirements for the process under clause (ii) shall—
(I) provide that an election under such clause, with respect to a performance period, shall be made before the beginning of such performance period and may not be changed during such performance period;
(II) provide that an individual MIPS eligible professional and a group practice described in clause (ii) may elect to be in no more than one virtual group for a performance period and that, in the case of such a group practice that elects to be in such virtual group for such performance period, such election applies to all MIPS eligible professionals in such group practice;
(III) provide that a virtual group be a combination of tax identification numbers;
(IV) provide for formal written agreements among MIPS eligible professionals electing to be a virtual group under this subparagraph; and
(V) include such other requirements as the Secretary determines appropriate.
(6) MIPS payments
(A) MIPS adjustment factor
Taking into account paragraph (1)(G), the Secretary shall specify a MIPS adjustment factor for each MIPS eligible professional for a year. Such MIPS adjustment factor for a MIPS eligible professional for a year shall be in the form of a percent and shall be determined—
(i) by comparing the composite performance score of the eligible professional for such year to the performance threshold established under subparagraph (D)(i) for such year;
(ii) in a manner such that the adjustment factors specified under this subparagraph for a year result in differential payments under this paragraph reflecting that—
(I) MIPS eligible professionals with composite performance scores for such year at or above such performance threshold for such year receive zero or positive payment adjustment factors for such year in accordance with clause (iii), with such professionals having higher composite performance scores receiving higher adjustment factors; and
(II) MIPS eligible professionals with composite performance scores for such year below such performance threshold for such year receive negative payment adjustment factors for such year in accordance with clause (iv), with such professionals having lower composite performance scores receiving lower adjustment factors;
(iii) in a manner such that MIPS eligible professionals with composite scores described in clause (ii)(I) for such year, subject to clauses (i) and (ii) of subparagraph (F), receive a zero or positive adjustment factor on a linear sliding scale such that an adjustment factor of 0 percent is assigned for a score at the performance threshold and an adjustment factor of the applicable percent specified in subparagraph (B) is assigned for a score of 100; and
(iv) in a manner such that—
(I) subject to subclause (II), MIPS eligible professionals with composite performance scores described in clause (ii)(II) for such year receive a negative payment adjustment factor on a linear sliding scale such that an adjustment factor of 0 percent is assigned for a score at the performance threshold and an adjustment factor of the negative of the applicable percent specified in subparagraph (B) is assigned for a score of 0; and
(II) MIPS eligible professionals with composite performance scores that are equal to or greater than 0, but not greater than ¼ of the performance threshold specified under subparagraph (D)(i) for such year, receive a negative payment adjustment factor that is equal to the negative of the applicable percent specified in subparagraph (B) for such year.
(B) Applicable percent defined
For purposes of this paragraph, the term "applicable percent" means—
(i) for 2019, 4 percent;
(ii) for 2020, 5 percent;
(iii) for 2021, 7 percent; and
(iv) for 2022 and subsequent years, 9 percent.
(C) Additional MIPS adjustment factors for exceptional performance
For 2019 and each subsequent year through 2024, in the case of a MIPS eligible professional with a composite performance score for a year at or above the additional performance threshold under subparagraph (D)(ii) for such year, in addition to the MIPS adjustment factor under subparagraph (A) for the eligible professional for such year, subject to subparagraph (F)(iv), the Secretary shall specify an additional positive MIPS adjustment factor for such professional and year. Such additional MIPS adjustment factors shall be in the form of a percent and determined by the Secretary in a manner such that professionals having higher composite performance scores above the additional performance threshold receive higher additional MIPS adjustment factors.
(D) Establishment of performance thresholds
(i) Performance threshold
For each year of the MIPS, the Secretary shall compute a performance threshold with respect to which the composite performance score of MIPS eligible professionals shall be compared for purposes of determining adjustment factors under subparagraph (A) that are positive, negative, and zero. Subject to clauses (iii) and (iv), such performance threshold for a year shall be the mean or median (as selected by the Secretary) of the composite performance scores for all MIPS eligible professionals with respect to a prior period specified by the Secretary. The Secretary may reassess the selection of the mean or median under the previous sentence every 3 years.
(ii) Additional performance threshold for exceptional performance
In addition to the performance threshold under clause (i), for each year of the MIPS (beginning with 2019 and ending with 2024), the Secretary shall compute an additional performance threshold for purposes of determining the additional MIPS adjustment factors under subparagraph (C). For each such year, subject to clause (iii), the Secretary shall apply either of the following methods for computing such additional performance threshold for such a year:
(I) The threshold shall be the score that is equal to the 25th percentile of the range of possible composite performance scores above the performance threshold determined under clause (i).
(II) The threshold shall be the score that is equal to the 25th percentile of the actual composite performance scores for MIPS eligible professionals with composite performance scores at or above the performance threshold with respect to the prior period described in clause (i).
(iii) Special rule for initial 5 years
With respect to each of the first five years to which the MIPS applies, the Secretary shall, prior to the performance period for such years, establish a performance threshold for purposes of determining MIPS adjustment factors under subparagraph (A) and a threshold for purposes of determining additional MIPS adjustment factors under subparagraph (C). Each such performance threshold shall—
(I) be based on a period prior to such performance periods; and
(II) take into account—
(aa) data available with respect to performance on measures and activities that may be used under the performance categories under subparagraph (2)(B); and
(bb) other factors determined appropriate by the Secretary.
(iv) Additional special rule for third, fourth and fifth years of MIPS
For purposes of determining MIPS adjustment factors under subparagraph (A), in addition to the requirements specified in clause (iii), the Secretary shall increase the performance threshold with respect to each of the third, fourth, and fifth years to which the MIPS applies to ensure a gradual and incremental transition to the performance threshold described in clause (i) (as estimated by the Secretary) with respect to the sixth year to which the MIPS applies.
(E) Application of MIPS adjustment factors
In the case of covered professional services (as defined in subsection (k)(3)(A)) furnished by a MIPS eligible professional during a year (beginning with 2019), the amount otherwise paid under this part with respect to such covered professional services and MIPS eligible professional for such year, shall be multiplied by—
(i) 1, plus
(ii) the sum of—
(I) the MIPS adjustment factor determined under subparagraph (A) divided by 100, and
(II) as applicable, the additional MIPS adjustment factor determined under subparagraph (C) divided by 100.
(F) Aggregate application of MIPS adjustment factors
(i) Application of scaling factor
(I) In general
With respect to positive MIPS adjustment factors under subparagraph (A)(ii)(I) for eligible professionals whose composite performance score is above the performance threshold under subparagraph (D)(i) for such year, subject to subclause (II), the Secretary shall increase or decrease such adjustment factors by a scaling factor in order to ensure that the budget neutrality requirement of clause (ii) is met.
(II) Scaling factor limit
In no case may the scaling factor applied under this clause exceed 3.0.
(ii) Budget neutrality requirement
(I) In general
Subject to clause (iii), the Secretary shall ensure that the estimated amount described in subclause (II) for a year is equal to the estimated amount described in subclause (III) for such year.
(II) Aggregate increases
The amount described in this subclause is the estimated increase in the aggregate allowed charges resulting from the application of positive MIPS adjustment factors under subparagraph (A) (after application of the scaling factor described in clause (i)) to MIPS eligible professionals whose composite performance score for a year is above the performance threshold under subparagraph (D)(i) for such year.
(III) Aggregate decreases
The amount described in this subclause is the estimated decrease in the aggregate allowed charges resulting from the application of negative MIPS adjustment factors under subparagraph (A) to MIPS eligible professionals whose composite performance score for a year is below the performance threshold under subparagraph (D)(i) for such year.
(iii) Exceptions
(I) In the case that all MIPS eligible professionals receive composite performance scores for a year that are below the performance threshold under subparagraph (D)(i) for such year, the negative MIPS adjustment factors under subparagraph (A) shall apply with respect to such MIPS eligible professionals and the budget neutrality requirement of clause (ii) and the additional adjustment factors under clause (iv) shall not apply for such year.
(II) In the case that, with respect to a year, the application of clause (i) results in a scaling factor equal to the maximum scaling factor specified in clause (i)(II), such scaling factor shall apply and the budget neutrality requirement of clause (ii) shall not apply for such year.
(iv) Additional incentive payment adjustments
(I) In general
Subject to subclause (II), in specifying the MIPS additional adjustment factors under subparagraph (C) for each applicable MIPS eligible professional for a year, the Secretary shall ensure that the estimated aggregate increase in payments under this part resulting from the application of such additional adjustment factors for MIPS eligible professionals in a year shall be equal (as estimated by the Secretary) to $500,000,000 for each year beginning with 2019 and ending with 2024.
(II) Limitation on additional incentive payment adjustments
The MIPS additional adjustment factor under subparagraph (C) for a year for an applicable MIPS eligible professional whose composite performance score is above the additional performance threshold under subparagraph (D)(ii) for such year shall not exceed 10 percent. The application of the previous sentence may result in an aggregate amount of additional incentive payments that are less than the amount specified in subclause (I).
(7) Announcement of result of adjustments
Under the MIPS, the Secretary shall, not later than 30 days prior to January 1 of the year involved, make available to MIPS eligible professionals the MIPS adjustment factor (and, as applicable, the additional MIPS adjustment factor) under paragraph (6) applicable to the eligible professional for covered professional services (as defined in subsection (k)(3)(A)) furnished by the professional for such year. The Secretary may include such information in the confidential feedback under paragraph (12).
(8) No effect in subsequent years
The MIPS adjustment factors and additional MIPS adjustment factors under paragraph (6) shall apply only with respect to the year involved, and the Secretary shall not take into account such adjustment factors in making payments to a MIPS eligible professional under this part in a subsequent year.
(9) Public reporting
(A) In general
The Secretary shall, in an easily understandable format, make available on the Physician Compare Internet website of the Centers for Medicare & Medicaid Services the following:
(i) Information regarding the performance of MIPS eligible professionals under the MIPS, which—
(I) shall include the composite score for each such MIPS eligible professional and the performance of each such MIPS eligible professional with respect to each performance category; and
(II) may include the performance of each such MIPS eligible professional with respect to each measure or activity specified in paragraph (2)(B).
(ii) The names of eligible professionals in eligible alternative payment models 11 (as defined in
(B) Disclosure
The information made available under this paragraph shall indicate, where appropriate, that publicized information may not be representative of the eligible professional's entire patient population, the variety of services furnished by the eligible professional, or the health conditions of individuals treated.
(C) Opportunity to review and submit corrections
The Secretary shall provide for an opportunity for a professional described in subparagraph (A) to review, and submit corrections for, the information to be made public with respect to the professional under such subparagraph prior to such information being made public.
(D) Aggregate information
The Secretary shall periodically post on the Physician Compare Internet website aggregate information on the MIPS, including the range of composite scores for all MIPS eligible professionals and the range of the performance of all MIPS eligible professionals with respect to each performance category.
(10) Consultation
The Secretary shall consult with stakeholders in carrying out the MIPS, including for the identification of measures and activities under paragraph (2)(B) and the methodologies developed under paragraphs (5)(A) and (6) and regarding the use of qualified clinical data registries. Such consultation shall include the use of a request for information or other mechanisms determined appropriate.
(11) Technical assistance to small practices and practices in health professional shortage areas
(A) In general
The Secretary shall enter into contracts or agreements with appropriate entities (such as quality improvement organizations, regional extension centers (as described in
(i) the performance categories described in clauses (i) through (iv) of paragraph (2)(A); or
(ii) how to transition to the implementation of and participation in an alternative payment model as described in
(B) Funding for technical assistance
For purposes of implementing subparagraph (A), the Secretary shall provide for the transfer from the Federal Supplementary Medical Insurance Trust Fund established under
(12) Feedback and information to improve performance
(A) Performance feedback
(i) In general
Beginning July 1, 2017, the Secretary—
(I) shall make available timely (such as quarterly) confidential feedback to MIPS eligible professionals on the performance of such professionals with respect to the performance categories under clauses (i) and (ii) of paragraph (2)(A); and
(II) may make available confidential feedback to such professionals on the performance of such professionals with respect to the performance categories under clauses (iii) and (iv) of such paragraph.
(ii) Mechanisms
The Secretary may use one or more mechanisms to make feedback available under clause (i), which may include use of a web-based portal or other mechanisms determined appropriate by the Secretary. With respect to the performance category described in paragraph (2)(A)(i), feedback under this subparagraph shall, to the extent an eligible professional chooses to participate in a data registry for purposes of this subsection (including registries under subsections (k) and (m)), be provided based on performance on quality measures reported through the use of such registries. With respect to any other performance category described in paragraph (2)(A), the Secretary shall encourage provision of feedback through qualified clinical data registries as 12 described in subsection (m)(3)(E)).
(iii) Use of data
For purposes of clause (i), the Secretary may use data, with respect to a MIPS eligible professional, from periods prior to the current performance period and may use rolling periods in order to make illustrative calculations about the performance of such professional.
(iv) Disclosure exemption
Feedback made available under this subparagraph shall be exempt from disclosure under
(v) Receipt of information
The Secretary may use the mechanisms established under clause (ii) to receive information from professionals, such as information with respect to this subsection.
(B) Additional information
(i) In general
Beginning July 1, 2018, the Secretary shall make available to MIPS eligible professionals information, with respect to individuals who are patients of such MIPS eligible professionals, about items and services for which payment is made under this subchapter that are furnished to such individuals by other suppliers and providers of services, which may include information described in clause (ii). Such information may be made available under the previous sentence to such MIPS eligible professionals by mechanisms determined appropriate by the Secretary, which may include use of a web-based portal. Such information may be made available in accordance with the same or similar terms as data are made available to accountable care organizations participating in the shared savings program under
(ii) Type of information
For purposes of clause (i), the information described in this clause,5 is the following:
(I) With respect to selected items and services (as determined appropriate by the Secretary) for which payment is made under this subchapter and that are furnished to individuals, who are patients of a MIPS eligible professional, by another supplier or provider of services during the most recent period for which data are available (such as the most recent three-month period), such as the name of such providers furnishing such items and services to such patients during such period, the types of such items and services so furnished, and the dates such items and services were so furnished.
(II) Historical data, such as averages and other measures of the distribution if appropriate, of the total, and components of, allowed charges (and other figures as determined appropriate by the Secretary).
(13) Review
(A) Targeted review
The Secretary shall establish a process under which a MIPS eligible professional may seek an informal review of the calculation of the MIPS adjustment factor (or factors) applicable to such eligible professional under this subsection for a year. The results of a review conducted pursuant to the previous sentence shall not be taken into account for purposes of paragraph (6) with respect to a year (other than with respect to the calculation of such eligible professional's MIPS adjustment factor for such year or additional MIPS adjustment factor for such year) after the factors determined in subparagraph (A) and subparagraph (C) of such paragraph have been determined for such year.
(B) Limitation
Except as provided for in subparagraph (A), there shall be no administrative or judicial review under
(i) The methodology used to determine the amount of the MIPS adjustment factor under paragraph (6)(A) and the amount of the additional MIPS adjustment factor under paragraph (6)(C) and the determination of such amounts.
(ii) The establishment of the performance standards under paragraph (3) and the performance period under paragraph (4).
(iii) The identification of measures and activities specified under paragraph (2)(B) and information made public or posted on the Physician Compare Internet website of the Centers for Medicare & Medicaid Services under paragraph (9).
(iv) The methodology developed under paragraph (5) that is used to calculate performance scores and the calculation of such scores, including the weighting of measures and activities under such methodology.
(r) Collaborating with the physician, practitioner, and other stakeholder communities to improve resource use measurement
(1) In general
In order to involve the physician, practitioner, and other stakeholder communities in enhancing the infrastructure for resource use measurement, including for purposes of the Merit-based Incentive Payment System under subsection (q) and alternative payment models under
(2) Development of care episode and patient condition groups and classification codes
(A) In general
In order to classify similar patients into care episode groups and patient condition groups, the Secretary shall undertake the steps described in the succeeding provisions of this paragraph.
(B) Public availability of existing efforts to design an episode grouper
Not later than 180 days after April 16, 2015, the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a list of the episode groups developed pursuant to subsection (n)(9)(A) and related descriptive information.
(C) Stakeholder input
The Secretary shall accept, through the date that is 120 days after the day the Secretary posts the list pursuant to subparagraph (B), suggestions from physician specialty societies, applicable practitioner organizations, and other stakeholders for episode groups in addition to those posted pursuant to such subparagraph, and specific clinical criteria and patient characteristics to classify patients into—
(i) care episode groups; and
(ii) patient condition groups.
(D) Development of proposed classification codes
(i) In general
Taking into account the information described in subparagraph (B) and the information received under subparagraph (C), the Secretary shall—
(I) establish care episode groups and patient condition groups, which account for a target of an estimated ½ of expenditures under parts A and B (with such target increasing over time as appropriate); and
(II) assign codes to such groups.
(ii) Care episode groups
In establishing the care episode groups under clause (i), the Secretary shall take into account—
(I) the patient's clinical problems at the time items and services are furnished during an episode of care, such as the clinical conditions or diagnoses, whether or not inpatient hospitalization occurs, and the principal procedures or services furnished; and
(II) other factors determined appropriate by the Secretary.
(iii) Patient condition groups
In establishing the patient condition groups under clause (i), the Secretary shall take into account—
(I) the patient's clinical history at the time of a medical visit, such as the patient's combination of chronic conditions, current health status, and recent significant history (such as hospitalization and major surgery during a previous period, such as 3 months); and
(II) other factors determined appropriate by the Secretary, such as eligibility status under this subchapter (including eligibility under
(E) Draft care episode and patient condition groups and classification codes
Not later than 270 days after the end of the comment period described in subparagraph (C), the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a draft list of the care episode and patient condition codes established under subparagraph (D) (and the criteria and characteristics assigned to such code).
(F) Solicitation of input
The Secretary shall seek, through the date that is 120 days after the Secretary posts the list pursuant to subparagraph (E), comments from physician specialty societies, applicable practitioner organizations, and other stakeholders, including representatives of individuals entitled to benefits under part A or enrolled under this part, regarding the care episode and patient condition groups (and codes) posted under subparagraph (E). In seeking such comments, the Secretary shall use one or more mechanisms (other than notice and comment rulemaking) that may include use of open door forums, town hall meetings, or other appropriate mechanisms.
(G) Operational list of care episode and patient condition groups and codes
Not later than 270 days after the end of the comment period described in subparagraph (F), taking into account the comments received under such subparagraph, the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services an operational list of care episode and patient condition codes (and the criteria and characteristics assigned to such code).
(H) Subsequent revisions
Not later than November 1 of each year (beginning with 2018), the Secretary shall, through rulemaking, make revisions to the operational lists of care episode and patient condition codes as the Secretary determines may be appropriate. Such revisions may be based on experience, new information developed pursuant to subsection (n)(9)(A), and input from the physician specialty societies, applicable practitioner organizations, and other stakeholders, including representatives of individuals entitled to benefits under part A or enrolled under this part.
(I) Information
The Secretary shall, not later than December 31st of each year (beginning with 2018), post on the Internet website of the Centers for Medicare & Medicaid Services information on resource use measures in use under subsection (q), resource use measures under development and the time-frame for such development, potential future resource use measure topics, a description of stakeholder engagement, and the percent of expenditures under part A and this part that are covered by resource use measures.
(3) Attribution of patients to physicians or practitioners
(A) In general
In order to facilitate the attribution of patients and episodes (in whole or in part) to one or more physicians or applicable practitioners furnishing items and services, the Secretary shall undertake the steps described in the succeeding provisions of this paragraph.
(B) Development of patient relationship categories and codes
The Secretary shall develop patient relationship categories and codes that define and distinguish the relationship and responsibility of a physician or applicable practitioner with a patient at the time of furnishing an item or service. Such patient relationship categories shall include different relationships of the physician or applicable practitioner to the patient (and the codes may reflect combinations of such categories), such as a physician or applicable practitioner who—
(i) considers themself to have the primary responsibility for the general and ongoing care for the patient over extended periods of time;
(ii) considers themself to be the lead physician or practitioner and who furnishes items and services and coordinates care furnished by other physicians or practitioners for the patient during an acute episode;
(iii) furnishes items and services to the patient on a continuing basis during an acute episode of care, but in a supportive rather than a lead role;
(iv) furnishes items and services to the patient on an occasional basis, usually at the request of another physician or practitioner; or
(v) furnishes items and services only as ordered by another physician or practitioner.
(C) Draft list of patient relationship categories and codes
Not later than one year after April 16, 2015, the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a draft list of the patient relationship categories and codes developed under subparagraph (B).
(D) Stakeholder input
The Secretary shall seek, through the date that is 120 days after the Secretary posts the list pursuant to subparagraph (C), comments from physician specialty societies, applicable practitioner organizations, and other stakeholders, including representatives of individuals entitled to benefits under part A or enrolled under this part, regarding the patient relationship categories and codes posted under subparagraph (C). In seeking such comments, the Secretary shall use one or more mechanisms (other than notice and comment rulemaking) that may include open door forums, town hall meetings, web-based forums, or other appropriate mechanisms.
(E) Operational list of patient relationship categories and codes
Not later than 240 days after the end of the comment period described in subparagraph (D), taking into account the comments received under such subparagraph, the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services an operational list of patient relationship categories and codes.
(F) Subsequent revisions
Not later than November 1 of each year (beginning with 2018), the Secretary shall, through rulemaking, make revisions to the operational list of patient relationship categories and codes as the Secretary determines appropriate. Such revisions may be based on experience, new information developed pursuant to subsection (n)(9)(A), and input from the physician specialty societies, applicable practitioner organizations, and other stakeholders, including representatives of individuals entitled to benefits under part A or enrolled under this part.
(4) Reporting of information for resource use measurement
Claims submitted for items and services furnished by a physician or applicable practitioner on or after January 1, 2018, shall, as determined appropriate by the Secretary, include—
(A) applicable codes established under paragraphs (2) and (3); and
(B) the national provider identifier of the ordering physician or applicable practitioner (if different from the billing physician or applicable practitioner).
(5) Methodology for resource use analysis
(A) In general
In order to evaluate the resources used to treat patients (with respect to care episode and patient condition groups), the Secretary shall, as the Secretary determines appropriate—
(i) use the patient relationship codes reported on claims pursuant to paragraph (4) to attribute patients (in whole or in part) to one or more physicians and applicable practitioners;
(ii) use the care episode and patient condition codes reported on claims pursuant to paragraph (4) as a basis to compare similar patients and care episodes and patient condition groups; and
(iii) conduct an analysis of resource use (with respect to care episodes and patient condition groups of such patients).
(B) Analysis of patients of physicians and practitioners
In conducting the analysis described in subparagraph (A)(iii) with respect to patients attributed to physicians and applicable practitioners, the Secretary shall, as feasible—
(i) use the claims data experience of such patients by patient condition codes during a common period, such as 12 months; and
(ii) use the claims data experience of such patients by care episode codes—
(I) in the case of episodes without a hospitalization, during periods of time (such as the number of days) determined appropriate by the Secretary; and
(II) in the case of episodes with a hospitalization, during periods of time (such as the number of days) before, during, and after the hospitalization.
(C) Measurement of resource use
In measuring such resource use, the Secretary—
(i) shall use per patient total allowed charges for all services under part A and this part (and, if the Secretary determines appropriate, part D) for the analysis of patient resource use, by care episode codes and by patient condition codes; and
(ii) may, as determined appropriate, use other measures of allowed charges (such as subtotals for categories of items and services) and measures of utilization of items and services (such as frequency of specific items and services and the ratio of specific items and services among attributed patients or episodes).
(D) Stakeholder input
The Secretary shall seek comments from the physician specialty societies, applicable practitioner organizations, and other stakeholders, including representatives of individuals entitled to benefits under part A or enrolled under this part, regarding the resource use methodology established pursuant to this paragraph. In seeking comments the Secretary shall use one or more mechanisms (other than notice and comment rulemaking) that may include open door forums, town hall meetings, web-based forums, or other appropriate mechanisms.
(6) Implementation
To the extent that the Secretary contracts with an entity to carry out any part of the provisions of this subsection, the Secretary may not contract with an entity or an entity with a subcontract if the entity or subcontracting entity currently makes recommendations to the Secretary on relative values for services under the fee schedule for physicians' services under this section.
(7) Limitation
There shall be no administrative or judicial review under
(A) care episode and patient condition groups and codes established under paragraph (2);
(B) patient relationship categories and codes established under paragraph (3); and
(C) measurement of, and analyses of resource use with respect to, care episode and patient condition codes and patient relationship codes pursuant to paragraph (5).
(8) Administration
(9) Definitions
In this subsection:
(A) Physician
The term "physician" has the meaning given such term in
(B) Applicable practitioner
The term "applicable practitioner" means—
(i) a physician assistant, nurse practitioner, and clinical nurse specialist (as such terms are defined in
(ii) beginning January 1, 2019, such other eligible professionals (as defined in subsection (k)(3)(B)) as specified by the Secretary.
(10) Clarification
The provisions of
(s) Priorities and funding for measure development
(1) Plan identifying measure development priorities and timelines
(A) Draft measure development plan
Not later than January 1, 2016, the Secretary shall develop, and post on the Internet website of the Centers for Medicare & Medicaid Services, a draft plan for the development of quality measures for application under the applicable provisions (as defined in paragraph (5)). Under such plan the Secretary shall—
(i) address how measures used by private payers and integrated delivery systems could be incorporated under subchapter XVIII;
(ii) describe how coordination, to the extent possible, will occur across organizations developing such measures; and
(iii) take into account how clinical best practices and clinical practice guidelines should be used in the development of quality measures.
(B) Quality domains
For purposes of this subsection, the term "quality domains" means at least the following domains:
(i) Clinical care.
(ii) Safety.
(iii) Care coordination.
(iv) Patient and caregiver experience.
(v) Population health and prevention.
(C) Consideration
In developing the draft plan under this paragraph, the Secretary shall consider—
(i) gap analyses conducted by the entity with a contract under
(ii) whether measures are applicable across health care settings;
(iii) clinical practice improvement activities submitted under subsection (q)(2)(C)(iv) for identifying possible areas for future measure development and identifying existing gaps with respect to such measures; and
(iv) the quality domains applied under this subsection.
(D) Priorities
In developing the draft plan under this paragraph, the Secretary shall give priority to the following types of measures:
(i) Outcome measures, including patient reported outcome and functional status measures.
(ii) Patient experience measures.
(iii) Care coordination measures.
(iv) Measures of appropriate use of services, including measures of over use.
(E) Stakeholder input
The Secretary shall accept through March 1, 2016, comments on the draft plan posted under paragraph (1)(A) from the public, including health care providers, payers, consumers, and other stakeholders.
(F) Final measure development plan
Not later than May 1, 2016, taking into account the comments received under this subparagraph, the Secretary shall finalize the plan and post on the Internet website of the Centers for Medicare & Medicaid Services an operational plan for the development of quality measures for use under the applicable provisions. Such plan shall be updated as appropriate.
(2) Contracts and other arrangements for quality measure development
(A) In general
The Secretary shall enter into contracts or other arrangements with entities for the purpose of developing, improving, updating, or expanding in accordance with the plan under paragraph (1) quality measures for application under the applicable provisions. Such entities shall include organizations with quality measure development expertise.
(B) Prioritization
(i) In general
In entering into contracts or other arrangements under subparagraph (A), the Secretary shall give priority to the development of the types of measures described in paragraph (1)(D).
(ii) Consideration
In selecting measures for development under this subsection, the Secretary shall consider—
(I) whether such measures would be electronically specified; and
(II) clinical practice guidelines to the extent that such guidelines exist.
(3) Annual report by the Secretary
(A) In general
Not later than May 1, 2017, and annually thereafter, the Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services a report on the progress made in developing quality measures for application under the applicable provisions.
(B) Requirements
Each report submitted pursuant to subparagraph (A) shall include the following:
(i) A description of the Secretary's efforts to implement this paragraph.
(ii) With respect to the measures developed during the previous year—
(I) a description of the total number of quality measures developed and the types of such measures, such as an outcome or patient experience measure;
(II) the name of each measure developed;
(III) the name of the developer and steward of each measure;
(IV) with respect to each type of measure, an estimate of the total amount expended under this subchapter to develop all measures of such type; and
(V) whether the measure would be electronically specified.
(iii) With respect to measures in development at the time of the report—
(I) the information described in clause (ii), if available; and
(II) a timeline for completion of the development of such measures.
(iv) A description of any updates to the plan under paragraph (1) (including newly identified gaps and the status of previously identified gaps) and the inventory of measures applicable under the applicable provisions.
(v) Other information the Secretary determines to be appropriate.
(4) Stakeholder input
With respect to paragraph (1), the Secretary shall seek stakeholder input with respect to—
(A) the identification of gaps where no quality measures exist, particularly with respect to the types of measures described in paragraph (1)(D);
(B) prioritizing quality measure development to address such gaps; and
(C) other areas related to quality measure development determined appropriate by the Secretary.
(5) Definition of applicable provisions
In this subsection, the term "applicable provisions" means the following provisions:
(A) Subsection (q)(2)(B)(i).
(B) section 13 1395l(z)(3)(D) of this title.
(6) Funding
For purposes of carrying out this subsection, the Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(7) Administration
(t) Supporting physicians and other professionals in adjusting to Medicare payment changes during 2021 through 2024
(1) In general
In order to support physicians and other professionals in adjusting to changes in payment for physicians' services during 2021, 2022, 2023, and 2024, the Secretary shall increase fee schedules under subsection (b) that establish payment amounts for—
(A) such services furnished on or after January 1, 2021, and before January 1, 2022, by 3.75 percent;
(B) such services furnished on or after January 1, 2022, and before January 1, 2023, by 3.0 percent;
(C) such services furnished on or after January 1, 2023, and before January 1, 2024, by 2.5 percent;
(D) such services furnished on or after January, 1, 2024, and before March 9, 2024, by 1.25 percent; and
(E) such services furnished on or after March 9, 2024, and before January 1, 2025, by 2.93 percent.
(2) Implementation
(A) Administration
Notwithstanding any other provision of law, the Secretary may implement this subsection by program instruction or otherwise.
(B) Limitation
There shall be no administrative or judicial review under
(C) Application only for 2021 through 2024
The increase in fee schedules that establish payment amounts under this subsection for services furnished in 2021, 2022, 2023, or 2024 shall not be taken into account in determining such fee schedules that establish payment amounts for services furnished in years after 2021, 2022, 2023, or 2024, respectively.
(3) Funding
For purposes of increasing the fee schedules that establish payment amounts pursuant to this subsection—
(A) there shall be transferred from the General Fund of the Treasury to the Federal Supplementary Medical Insurance Trust Fund under
(B) in the event the Secretary determines additional amounts are necessary, such amounts shall be available from the Federal Supplementary Medical Insurance Trust Fund.
(Aug. 14, 1935, ch. 531, title XVIII, §1848, as added
Editorial Notes
References in Text
Section 13515(b) of the Omnibus Budget Reconciliation Act of 1993, referred to in subsecs. (a)(2)(B)(ii)(I), (c)(2)(A)(i), and (i)(1)(B), is section 13515(b) of
Section 6105(b) of the Omnibus Budget Reconciliation Act of 1989, referred to in subsec. (a)(2)(D)(ii), (iii), is section 6105(b) of
Section 4048(b) of the Omnibus Budget Reconciliation Act of 1987, referred to in subsec. (b)(2)(B), is section 4048(b) of
Section 13514(a) of the Omnibus Budget Reconciliation Act of 1993, referred to in subsec. (c)(2)(F), is section 13514(a) of
Section 212 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (c)(2)(H)(i), (I)(ii)(I), is section 1000(a)(6) [title II, §212] of
The Balanced Budget Act of 1997, referred to in subsec. (d)(1)(C), is
Section 225(c)(1) and section 524 of the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2008, referred to in subsec. (l)(2)(A)(ii)(I), (II), are sections 225(c)(1) of title II and 524 of title V of div. G of
Section 2(d) of the Improving Medicare Post-Acute Care Transformation Act of 2014, referred to in subsec. (q)(1)(G)(i), is section 2(d) of
Codification
The text of section 101(c) of
Amendments
2024—Subsec. (e)(1)(E).
Subsec. (q)(1)(C)(iii)(II).
Subsec. (q)(1)(C)(iii)(III).
Subsec. (t)(1)(D).
Subsec. (t)(1)(E).
2023—Subsec. (e)(1)(E).
2022—Subsec. (b)(12).
Subsec. (c)(2)(B)(iv)(V).
Subsec. (c)(2)(B)(iv)(VI).
Subsec. (q)(1)(C)(iii)(II).
Subsec. (q)(1)(C)(iii)(III).
Subsec. (t).
Subsec. (t)(1).
Subsec. (t)(1)(C), (D).
Subsec. (t)(2)(C).
2021—Subsec. (c)(2)(B)(iv)(V).
Subsec. (t).
Subsec. (t)(1).
Subsec. (t)(2)(C).
2020—Subsec. (c)(2)(B)(iv)(V).
Subsec. (e)(1)(E).
Subsec. (q)(1)(C)(iii)(II).
Subsec. (q)(1)(C)(iii)(III).
Subsec. (q)(2)(B)(iii)(IV).
Subsec. (t).
2019—Subsec. (e)(1)(E).
2018—Subsec. (b)(11).
Subsec. (c)(2)(K)(iv).
Subsec. (d)(18).
Subsec. (e)(1)(E).
Subsec. (o)(2)(A).
Subsec. (q)(1)(B).
Subsec. (q)(1)(C)(iv)(I).
Subsec. (q)(1)(C)(iv)(II).
Subsec. (q)(1)(C)(iv)(III).
Subsec. (q)(5)(D)(i)(I).
Subsec. (q)(5)(D)(iii).
Subsec. (q)(5)(E)(i)(I)(bb).
Subsec. (q)(5)(E)(i)(II)(bb).
Subsec. (q)(6)(D)(i).
Subsec. (q)(6)(D)(ii).
Subsec. (q)(6)(D)(iii).
Subsec. (q)(6)(D)(iv).
Subsec. (q)(6)(E).
Subsec. (q)(7).
Subsec. (r)(2)(I).
Subsec. (s)(5)(B).
2016—Subsec. (a)(7)(B).
Subsec. (a)(7)(D).
Subsec. (o)(2)(D).
2015—Subsec. (a)(7)(A)(i).
Subsec. (a)(7)(A)(ii)(III).
Subsec. (a)(7)(A)(iii).
Subsec. (a)(7)(B).
Subsec. (a)(8)(A)(i).
Subsec. (a)(8)(A)(ii)(II).
Subsec. (a)(9).
Subsec. (b)(8).
Subsec. (b)(9).
Subsec. (b)(10).
Subsec. (b)(11).
Subsec. (c)(2)(B)(v)(X).
Subsec. (c)(2)(B)(v)(XI).
Subsec. (c)(2)(K)(iv).
Subsec. (c)(8).
Subsec. (d)(1)(A).
Subsec. (d)(1)(D).
Subsec. (d)(4).
Subsec. (d)(4)(A).
Subsec. (d)(16) to (20).
Subsec. (e)(1)(E).
Subsec. (f)(1)(B).
Subsec. (f)(2).
Subsec. (k)(9).
Subsec. (m)(3)(C)(ii).
Subsec. (m)(3)(D).
Subsec. (m)(5)(F).
Subsec. (m)(7) to (9).
Subsec. (n)(11).
Subsec. (o)(2)(A).
Subsec. (o)(2)(A)(ii).
Subsec. (o)(2)(A)(iii).
Subsec. (o)(2)(D).
Subsec. (p)(2)(C).
Subsec. (p)(3).
Subsec. (p)(4)(B)(iii).
"(I) beginning on January 1, 2015, with respect to specific physicians and groups of physicians the Secretary determines appropriate; and
"(II) beginning not later than January 1, 2017, with respect to all physicians and groups of physicians."
Subsec. (q).
Subsec. (r).
Subsec. (s).
2014—Subsec. (c)(2)(B)(ii)(I).
Subsec. (c)(2)(B)(v)(VIII).
Subsec. (c)(2)(B)(v)(IX).
Subsec. (c)(2)(C)(i).
Subsec. (c)(2)(C)(ii).
Subsec. (c)(2)(C)(iii).
Subsec. (c)(2)(K)(ii).
Subsec. (c)(2)(K)(iii)(VI).
Subsec. (c)(2)(M).
Subsec. (c)(2)(N).
Subsec. (c)(2)(O).
Subsec. (c)(2)(O)(iii).
Subsec. (c)(2)(O)(v).
Subsec. (c)(7).
Subsec. (d)(15).
Subsec. (d)(15)(A).
Subsec. (d)(15)(B).
Subsec. (d)(16).
Subsec. (e)(1)(E).
Subsec. (e)(6).
Subsec. (i)(1)(F).
Subsec. (j)(2).
2013—Subsec. (b)(4)(C).
Subsec. (b)(7).
Subsec. (c)(2)(B)(v)(III).
Subsec. (d)(14).
Subsec. (d)(15).
Subsec. (e)(1)(E).
Subsec. (m)(3)(D) to (F).
2012—Subsec. (d)(13).
Subsec. (d)(13)(A).
Subsec. (d)(13)(B).
Subsec. (e)(1)(E).
2011—Subsec. (b)(4)(B), (6).
Subsec. (c)(2)(B)(iv)(IV).
Subsec. (d)(13).
Subsec. (e)(1)(E).
2010—Subsec. (a)(8).
Subsec. (b)(1).
Subsec. (b)(4)(B).
Subsec. (b)(4)(C).
"(i) in the case of services furnished on or after January 1, 2010, and before January 1, 2013, a 65 percent (rather than 50 percent) presumed rate of utilization of imaging equipment;
"(ii) in the case of services furnished on or after January 1, 2013, and before January 1, 2014, a 70 percent (rather than 50 percent) presumed rate of utilization of imaging equipment; and
"(iii) in the case of services furnished on or after January 1, 2014, a 75 percent (rather than 50 percent) presumed rate of utilization of imaging equipment."
Subsec. (b)(4)(D).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (c)(2)(B)(iv)(IV).
Subsec. (c)(2)(B)(v)(III) to (V).
"(III)
"(IV)
"(V)
Subsec. (c)(2)(B)(v)(VI).
Subsec. (c)(2)(B)(v)(VII).
Subsec. (c)(2)(B)(vii).
Subsec. (c)(2)(K), (L).
Subsec. (d)(10).
"(A)
"(B)
Subsec. (d)(10)(A).
Subsec. (d)(10)(B).
Subsec. (d)(11).
Subsec. (d)(11)(A).
Subsec. (d)(11)(B).
Subsec. (d)(12).
Subsec. (e)(1)(A).
Subsec. (e)(1)(E).
Subsec. (e)(1)(H).
Subsec. (e)(1)(H)(i).
Subsec. (e)(1)(I).
Subsec. (j)(3).
Subsec. (k)(4).
Subsec. (m)(1)(A).
Subsec. (m)(1)(B)(iii), (iv).
Subsec. (m)(3)(A).
Subsec. (m)(3)(C)(i).
Subsec. (m)(5)(E).
Subsec. (m)(5)(E)(iv).
Subsec. (m)(5)(H), (I).
Subsec. (m)(6)(C)(i)(II).
Subsec. (m)(6)(C)(iii).
Subsec. (m)(7).
Subsec. (n)(1)(A).
Subsec. (n)(1)(B).
Subsec. (n)(4).
Subsec. (n)(6).
Subsec. (n)(9), (10).
Subsec. (o)(1)(C)(ii).
Subsec. (p).
2009—Subsec. (a)(5)(A)(i).
Subsec. (a)(5)(A)(ii)(III).
Subsec. (a)(7).
Subsec. (d)(10).
Subsec. (m)(2)(A).
Subsec. (m)(2)(D).
Subsec. (o).
2008—Subsec. (a)(4)(A).
Subsec. (a)(5).
Subsec. (a)(6).
Subsec. (b)(5).
Subsec. (c)(2)(B)(vi).
Subsec. (d)(8).
Subsec. (d)(8)(A).
Subsec. (d)(8)(B).
Subsec. (d)(9).
Subsec. (e)(1)(A).
Subsec. (e)(1)(E).
Subsec. (e)(1)(G).
Subsec. (j)(3).
Subsec. (k)(2)(C), (D).
Subsec. (k)(3)(B)(iv).
Subsec. (l)(2)(A)(i)(III).
Subsec. (l)(2)(A)(i)(IV).
Subsec. (l)(2)(A)(ii)(III).
Subsec. (l)(2)(A)(ii)(IV).
Subsec. (l)(2)(B).
"(iii) 2013 for payment with respect to physicians' services furnished during 2013; and
"(iv) 2014 for payment with respect to physicians' services furnished during 2014."
Subsec. (l)(2)(B)(iv).
Subsec. (m).
Subsec. (m)(1).
Subsec. (m)(2).
Subsec. (m)(3).
Subsec. (m)(3)(A).
Subsec. (m)(3)(B).
Subsec. (m)(3)(C), (D).
Subsec. (m)(5)(A).
Subsec. (m)(5)(B).
Subsec. (m)(5)(C).
Subsec. (m)(5)(D)(i).
Subsec. (m)(5)(D)(ii).
Subsec. (m)(5)(D)(iii).
Subsec. (m)(5)(E).
Subsec. (m)(5)(E)(ii).
Subsec. (m)(5)(E)(iii).
Subsec. (m)(5)(E)(iv).
Subsec. (m)(5)(F).
Subsec. (m)(5)(G).
Subsec. (m)(6)(A).
Subsec. (m)(6)(B).
Subsec. (m)(6)(C).
"(i) for 2007, the period beginning on July 1, 2007, and ending on December 31, 2007; and
"(ii) for 2008, all of 2008."
Subsec. (m)(6)(D).
Subsec. (n).
2007—Subsec. (d)(4)(B).
Subsec. (d)(8).
Subsec. (e)(1)(E).
Subsec. (k)(2)(B).
Subsec. (l)(2)(A).
Subsec. (l)(2)(B).
2006—Subsec. (b)(4).
Subsec. (c)(2)(B)(ii)(II).
Subsec. (c)(2)(B)(iv).
Subsec. (c)(2)(B)(v).
Subsec. (c)(2)(B)(v)(II).
Subsec. (d)(4)(B).
Subsec. (d)(6).
Subsec. (d)(7).
Subsec. (e)(1)(E).
Subsec. (j)(3).
Subsec. (k).
Subsec. (l).
2003—Subsec. (c)(2)(B)(ii)(II).
Subsec. (c)(2)(B)(iv).
Subsec. (c)(2)(H) to (J).
Subsec. (d)(4)(B).
Subsec. (d)(5).
Subsec. (e)(1)(A).
Subsec. (e)(1)(E).
Subsec. (e)(1)(G).
Subsec. (f)(2)(C).
Subsec. (i)(1)(B).
Subsec. (i)(1)(C).
Subsec. (i)(3)(A).
Subsec. (j)(3).
2000—Subsec. (j)(3).
1999—Subsec. (d)(1)(A).
Subsec. (d)(1)(E).
"(i) 1991, the conversion factor which will apply to physicians' services for 1992, and the update determined under paragraph (3) for 1992; and
"(ii) each succeeding year, the conversion factor which will apply to physicians' services for the following year and the update determined under paragraph (3) for such year."
Subsec. (d)(3).
Subsec. (d)(3)(A).
Subsec. (d)(3)(C).
Subsec. (d)(4).
Subsec. (f)(1).
Subsec. (f)(2).
Subsec. (f)(2)(A).
Subsec. (f)(2)(B), (C).
Subsec. (f)(2)(D).
Subsec. (f)(3).
Subsec. (f)(3)(C).
Subsec. (f)(4).
Subsec. (j)(3).
1997—Subsec. (b)(1).
Subsec. (c)(2)(B)(iii).
Subsec. (c)(2)(C)(ii).
Subsec. (c)(2)(C)(iii).
Subsec. (c)(2)(G).
Subsec. (c)(3)(C)(ii).
Subsec. (c)(3)(C)(iii).
Subsec. (d)(1)(A).
Subsec. (d)(1)(C).
Subsec. (d)(1)(D).
Subsec. (d)(1)(E).
Subsec. (d)(2).
Subsec. (d)(2)(F).
Subsec. (d)(3).
Subsec. (f).
Subsec. (f)(1)(B).
Subsec. (f)(2).
Subsec. (f)(3).
Subsec. (f)(4), (5).
Subsec. (g)(3)(A).
Subsec. (g)(6)(C), (7)(C).
Subsec. (j)(1).
Subsec. (j)(3).
1994—Subsec. (a)(2)(D)(iii).
Subsec. (c)(2)(C)(ii).
Subsec. (c)(3)(C)(ii).
Subsec. (c)(4).
Subsec. (e)(1)(C).
Subsec. (e)(1)(D).
Subsec. (f)(2)(A)(i).
Subsec. (f)(2)(C).
Subsec. (g)(1).
Subsec. (g)(3)(B).
Subsec. (g)(6)(B).
Subsec. (i)(3).
1993—Subsec. (a)(2)(B)(ii)(I).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (b)(3).
Subsec. (c)(2)(A)(i).
Subsec. (c)(2)(E).
Subsec. (c)(2)(F).
Subsec. (d)(3)(A)(i).
Subsec. (d)(3)(A)(iv) to (vi).
Subsec. (d)(3)(B)(ii).
Subsec. (f)(2)(B).
Subsec. (g)(1).
Subsec. (g)(2)(C).
Subsec. (g)(2)(D).
Subsec. (h).
Subsec. (i)(1)(B).
Subsec. (j)(1).
Subsec. (j)(3).
1990—Subsec. (a)(1).
Subsec. (a)(2)(C).
Subsec. (a)(2)(D)(ii).
Subsec. (a)(2)(D)(iii).
Subsec. (a)(4).
Subsec. (b)(3).
Subsec. (c)(1)(B).
Subsec. (c)(3).
Subsec. (c)(3)(C)(ii)(II), (iii)(II).
Subsec. (c)(4).
Subsec. (c)(5), (6).
Subsec. (d)(1)(A).
Subsec. (d)(1)(C)(i).
Subsec. (d)(1)(C)(ii).
Subsec. (d)(2)(A).
Subsec. (d)(2)(A)(ii).
Subsec. (d)(2)(E)(i).
Subsec. (d)(2)(E)(ii)(I).
Subsec. (d)(3)(A)(i).
Subsec. (d)(3)(A)(iii).
Subsec. (d)(3)(B)(i).
Subsec. (d)(3)(B)(ii).
Subsec. (e)(1)(A).
Subsec. (e)(1)(C).
Subsec. (f)(1)(C).
Subsec. (f)(1)(D)(i).
Subsec. (f)(2)(A).
Subsec. (f)(2)(A)(i).
Subsec. (f)(2)(A)(ii).
Subsec. (f)(2)(A)(iii).
Subsec. (f)(2)(A)(iv).
Subsec. (f)(2)(C).
Subsec. (f)(4)(A).
Subsec. (f)(4)(B).
Subsec. (g)(2)(A).
Subsec. (g)(2)(B).
Subsec. (i)(1)(A).
Subsec. (i)(2).
Subsec. (i)(3).
Subsec. (j)(1).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2015 Amendment
Effective Date of 2010 Amendment
Amendment by section 4103(c)(2) of
Effective Date of 2008 Amendment
Effective Date of 2007 Amendment
"(i)
"(ii)
Effective Date of 2006 Amendment
Amendment by section 5112(c) of
Effective Date of 2003 Amendment
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(5)] of
Effective Date of 1997 Amendment
Amendment by section 4022(b)(2)(B), (C) of
Amendment by section 4102(d) of
Amendment by section 4103(d) of
Amendment by section 4104(d) of
Amendment by section 4105(a)(2) of
Amendment by section 4106(b) of
Amendment by section 4714(b)(2) of
Effective Date of 1994 Amendment
Amendment by section 123(a) of
Amendment by section 126(b)(6), (g)(2)(B), (5)–(7), (10)(A) of
Effective Date of 1993 Amendment
"(1) to volume performance standard rates of increase established under section 1848(f) of the Social Security Act [
"(2) to adjustment in updates in the conversion factors for physicians' services under section 1848(d)(3)(B) of such Act for physicians' services to be furnished in calendar years before 1996."
Amendment by section 13515(a)(1) of
Effective Date of 1990 Amendment
Amendment by section 4102(b), (g)(2) of
Amendment by section 4104(b)(2) of
Amendment by section 4106(b)(1) of
Transfer of Functions
Physician Payment Review Commission (PPRC) was terminated and its assets and staff transferred to the Medicare Payment Advisory Commission (MedPAC) by section 4022(c)(2), (3) of
Termination of Reporting Requirements
For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which item 8 on page 94 identifies a reporting provision which, as subsequently amended, is contained in subsec. (g)(6)(B) of this section and in which item 9 on page 94 identifies a reporting provision which is contained in subsec. (g)(7)(B) of this section), see section 3003 of
Improving Mobile Crisis Care in Medicare
"(b)
"(c)
"(d)
"(1) psychotherapy for crisis services billed under the Medicare physician fee schedule under section 1848 of the Social Security Act (
"(2) behavioral health integration services.
"(e)
"(1)
"(2)
"(3)
"(4)
Moratorium on Payment Under the Medicare Physician Fee Schedule of the Add On Code for Inherently Complex Evaluation and Management Visits
"(a)
"(b)
Implementation
Education and Outreach Campaign
"(A)
"(B)
"(i) be directed by the Office of Rural Health Policy of the Department of Health and Human Services and the Office of Minority Health of the Centers for Medicare & Medicaid Services; and
"(ii) focus on encouraging participation by underserved rural populations and racial and ethnic minority populations."
Recommendations for Achieving Widespread Electronic Health Record (EHR) Interoperability
"(A)
"(B)
"(i)
"(ii)
"(C)
"(D)
"(i) to adjust payments for not being meaningful EHR users under the Medicare EHR incentive programs; and
"(ii) for criteria for decertifying certified EHR technology products."
[As used in section 106(b)(1) of
Disclosure of Data Used To Establish Multiple Procedure Payment Reduction Policy
Centers for Medicare & Medicaid Services To Study Reform of Physician Reimbursements
"(1)
"(2)
"(3)
Implementation of 2010 Amendment
"(A)
"(B) Notwithstanding any other provision of law, the Secretary may implement subparagraphs (K) and (L) of [section] 1848(c)(2) of the Social Security Act [
"(C) [Repealed section 4505(d) of
"(D) Except for provisions related to confidentiality of information, the provisions of the Federal Acquisition Regulation shall not apply to this section or the amendment made by this section."
Authority To Incorporate Maintenance of Certification Programs Into Measures of Quality of Care
No Change in Billing
No Effect on Incentive Payments for 2007 or 2008
Adjustment for Medicare Mental Health Services
"(a)
"(1)
"(2)
"(b)
"(1) insight oriented, behavior modifying, or supportive psychotherapy; or
"(2) interactive psychotherapy.
"(c)
Transfer of Funds to Part B Trust Fund
Transitional Bonus Incentive Payments for Quality Reporting in 2007 and 2008
Treatment of Other Services Currently in the Nonphysician Work Pool
Payment for Multiple Chemotherapy Agents Furnished on a Single Day Through the Push Technique
"(A)
"(B)
"(C)
Transitional Adjustment
"(A)
"(B)
"(i) during 2004, is 32 percent; and
"(ii) during 2005, is 3 percent."
MedPAC Review and Reports; Secretarial Response
"(A)
"(i) for items and services furnished by oncologists; and
"(ii) for drug administration services furnished by other specialists.
"(B)
"(i) the quality of care furnished to individuals enrolled under part B and the satisfaction of such individuals with that care;
"(ii) the adequacy of reimbursement as applied in, and the availability in, different geographic areas and to different physician practice sizes; and
"(iii) the impact on physician practices.
"(C)
"(i) not later than January 1, 2006, a report on the review conducted under subparagraph (A)(i); and
"(ii) not later than January 1, 2007, a report on the review conducted under subparagraph (A)(ii).
Each such report may include such recommendations regarding further adjustments in such payments as the Commission deems appropriate.
"(D)
Multiple Chemotherapy Agents, Other Services Currently on the Non-Physician Work Pool, and Transitional Adjustment
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
GAO Study of Geographic Differences in Payments for Physicians' Services
"(1)
"(A) an assessment of the validity of the geographic adjustment factors used for each component of the fee schedule;
"(B) an evaluation of the measures used for such adjustment, including the frequency of revisions;
"(C) an evaluation of the methods used to determine professional liability insurance costs used in computing the malpractice component, including a review of increases in professional liability insurance premiums and variation in such increases by State and physician specialty and methods used to update the geographic cost of practice index and relative weights for the malpractice component; and
"(D) an evaluation of the effect of the adjustment to the physician work geographic index under section 1848(e)(1)(E) of the Social Security Act [
"(i) differences in recruitment costs and retention rates for physicians, including specialists, between large urban areas and other areas; and
"(ii) the mobility of physicians, including specialists, over the last decade.
"(2)
Amendments Not Treated as Change in Law and Regulation in Sustainable Growth Rate Determination
Collaborative Demonstration-Based Review of Physician Practice Expense Geographic Adjustment Data
"(a)
"(b)
"(c)
"(1)
"(2)
MedPAC Report on Payment for Physicians' Services
"(a)
"(1) The effect of such refinements on payment for physicians' services.
"(2) The interaction of the practice expense component with other components of and adjustments to payment for physicians' services under such section.
"(3) The appropriateness of the amount of compensation by reason of such refinements.
"(4) The effect of such refinements on access to care by medicare beneficiaries to physicians' services.
"(5) The effect of such refinements on physician participation under the medicare program.
"(b)
"(1) An analysis of recent and historic growth in the components that the Secretary [of Health and Human Services] includes under the sustainable growth rate (under section 1848(f) of the Social Security Act (
"(2) An examination of the relative growth of volume in physicians' services between medicare beneficiaries and other populations.
"(3) An analysis of the degree to which new technology, including coverage determinations of the Centers for Medicare & Medicaid Services, has affected the volume of physicians' services.
"(4) An examination of the impact on volume of demographic changes.
"(5) An examination of shifts in the site of service or services that influence the number and intensity of services furnished in physicians' offices and the extent to which changes in reimbursement rates to other providers have effected these changes.
"(6) An evaluation of the extent to which the Centers for Medicare & Medicaid Services takes into account the impact of law and regulations on the sustainable growth rate."
MedPAC Study of Payment for Cardio-Thoracic Surgeons
"(a)
"(b)
Report on Physician Compensation
Treatment of Certain Physician Pathology Services Under Medicare
"(a)
"(b)
"(1)
"(2)
"(A) is entitled to benefits under part A, or enrolled under part B, or both, of such title [
"(B) is not enrolled in any of the following:
"(i) A Medicare+Choice plan under part C of such title [
"(ii) A plan offered by an eligible organization under section 1876 of such Act (
"(iii) A program of all-inclusive care for the elderly (PACE) under section 1894 of such Act (
"(iv) A social health maintenance organization (SHMO) demonstration project established under section 4018(b) of the Omnibus Budget Reconciliation Act of 1987 (
"(c)
"(d)
"(1)
"(2)
One-Time Publication of Information on Transition
"(i) the allowed expenditures under subclauses (I) and (II) of subsection (d)(4)(C)(ii) of section 1848 of the Social Security Act (
"(ii) the estimated actual expenditures described in subsection (d) of such section for 1999; and
"(iii) the sustainable growth rate under subsection (f) of such section for 2000."
Use of Data Collected by Organizations and Entities in Determining Practice Expense Relative Values
"(a)
"(b)
Consultation With Organizations in Establishing Payment Amounts for Services Provided by Physicians
Development of Resource-Based Practice Expense Relative Value Units
Application of Certain Budget Neutrality Provisions
Development of Resource-Based Methodology for Practice Expenses
"(1)
"(2)
Application of Subsection (c)(2)(B)(ii)(II), (iii)
Report on Review Process
Relative Value for Pediatric Services
Budget Neutrality Adjustment
For provisions requiring reduction of relative values established under subsec. (c) of this section and amounts determined under subsec. (a)(2)(B)(ii)(I) of this section for 1994 (to be applied for that year and subsequent years) in order to assure that the amendments to this section and
Ancillary Policies; Adjustment for Independent Laboratories Furnishing Physician Pathology Services
Computation of Conversion Factor for 1992
Publication of Performance Standard Rates
Study of Regional Variations in Impact of Medicare Physician Payment Reform
"(a)
"(1) factors that may explain geographic variations in Medicare reasonable charges for physicians' services that are not attributable to variations in physician practice costs (including the supply of physicians in an area and area variations in the mix of services furnished);
"(2) the extent to which the geographic practice cost indices applied under the fee schedule established under section 1848 of the Social Security Act [
"(3) the impact of the transition to a national, resource-based fee schedule for physicians' services under Medicare on access to physicians' services in areas that experience a disproportionately large reduction in payments for physicians' services under the fee schedule by reason of such variations; and
"(4) appropriate adjustments or modifications in the transition to, or manner of determining payments under, the fee schedule established under section 1848 of the Social Security Act, to compensate for such variations and ensure continued access to physicians' services for Medicare beneficiaries in such areas.
"(b)
Statewide Fee Schedule Areas for Physicians' Services
"(1) the adjusted historical payment basis (as defined in section 1848(a)(2)(D) of such Act (
"(2) the fee schedule amount (as referred to in section 1848(a) (
for physicians' services (as defined in section 1848(j)(3) of such Act (
Studies
Distribution of Model Fee Schedule
1 So in original. Probably should be followed by a period.
2 So in original. Probably should be "elapsed".
3 So in original. No subpar. (F) has been enacted.
4 So in original. Probably should be "than".
5 So in original. The comma probably should not appear.
6 So in original. Probably should be followed by a comma.
8 So in original. Probably should be "(a)(8)(C)(iii),".
9 So in original. Probably means cl. (i) of this subpar.
10 So in original. Probably should be followed by a second closing parenthesis.
12 So in original. Probably should be preceded by an opening parenthesis.
13 So in original. Probably should be "Section".
§1395w–5. Public reporting of performance information
(a) In general
(1) Development
Not later than January 1, 2011, the Secretary shall develop a Physician Compare Internet website with information on physicians enrolled in the Medicare program under section 1866(j) of the Social Security Act (
(2) Plan
Not later than January 1, 2013, and with respect to reporting periods that begin no earlier than January 1, 2012, the Secretary shall also implement a plan for making publicly available through Physician Compare, consistent with subsection (c), information on physician performance that provides comparable information for the public on quality and patient experience measures with respect to physicians enrolled in the Medicare program under such section 1866(j). To the extent scientifically sound measures that are developed consistent with the requirements of this section are available, such information, to the extent practicable, shall include—
(A) measures collected under the Physician Quality Reporting Initiative;
(B) an assessment of patient health outcomes and the functional status of patients;
(C) an assessment of the continuity and coordination of care and care transitions, including episodes of care and risk-adjusted resource use;
(D) an assessment of efficiency;
(E) an assessment of patient experience and patient, caregiver, and family engagement;
(F) an assessment of the safety, effectiveness, and timeliness of care; and
(G) other information as determined appropriate by the Secretary.
(b) Other required considerations
In developing and implementing the plan described in subsection (a)(2), the Secretary shall, to the extent practicable, include—
(1) processes to assure that data made public, either by the Centers for Medicare & Medicaid Services or by other entities, is statistically valid and reliable, including risk adjustment mechanisms used by the Secretary;
(2) processes by which a physician or other eligible professional whose performance on measures is being publicly reported has a reasonable opportunity, as determined by the Secretary, to review his or her individual results before they are made public;
(3) processes by the Secretary to assure that the implementation of the plan and the data made available on Physician Compare provide a robust and accurate portrayal of a physician's performance;
(4) data that reflects the care provided to all patients seen by physicians, under both the Medicare program and, to the extent practicable, other payers, to the extent such information would provide a more accurate portrayal of physician performance;
(5) processes to ensure appropriate attribution of care when multiple physicians and other providers are involved in the care of a patient;
(6) processes to ensure timely statistical performance feedback is provided to physicians concerning the data reported under any program subject to public reporting under this section; and
(7) implementation of computer and data systems of the Centers for Medicare & Medicaid Services that support valid, reliable, and accurate public reporting activities authorized under this section.
(c) Ensuring patient privacy
The Secretary shall ensure that information on physician performance and patient experience is not disclosed under this section in a manner that violates sections 1 552 or 552a of title 5 with regard to the privacy of individually identifiable health information.
(d) Feedback from multi-stakeholder groups
The Secretary shall take into consideration input provided by multi-stakeholder groups, consistent with sections 1890(b)(7) and 1890A of the Social Security Act [
(e) Consideration of transition to value-based purchasing
In developing the plan under this 2 subsection (a)(2), the Secretary shall, as the Secretary determines appropriate, consider the plan to transition to a value-based purchasing program for physicians and other practitioners developed under section 131 of the Medicare Improvements for Patients and Providers Act of 2008 (
(f) Report to Congress
Not later than January 1, 2015, the Secretary shall submit to Congress a report on the Physician Compare Internet website developed under subsection (a)(1). Such report shall include information on the efforts of and plans made by the Secretary to collect and publish data on physician quality and efficiency and on patient experience of care in support of value-based purchasing and consumer choice, together with recommendations for such legislation and administrative action as the Secretary determines appropriate.
(g) Expansion
At any time before the date on which the report is submitted under subsection (f), the Secretary may expand (including expansion to other providers of services and suppliers under title XVIII of the Social Security Act [
(h) Financial incentives to encourage consumers to choose high quality providers
The Secretary may establish a demonstration program, not later than January 1, 2019, to provide financial incentives to Medicare beneficiaries who are furnished services by high quality physicians, as determined by the Secretary based on factors in subparagraphs (A) through (G) of subsection (a)(2). In no case may Medicare beneficiaries be required to pay increased premiums or cost sharing or be subject to a reduction in benefits under title XVIII of the Social Security Act as a result of such demonstration program. The Secretary shall ensure that any such demonstration program does not disadvantage those beneficiaries without reasonable access to high performing physicians or create financial inequities under such title.
(i) Definitions
In this section:
(1) Eligible professional
The term "eligible professional" has the meaning given that term for purposes of the Physician Quality Reporting Initiative under section 1848 of the Social Security Act (
(2) Physician
The term "physician" has the meaning given that term in section 1861(r) of such Act (
(3) Physician Compare
The term "Physician Compare" means the Internet website developed under subsection (a)(1).
(4) Secretary
The term "Secretary" means the Secretary of Health and Human Services.
(
Editorial Notes
References in Text
Section 3014 of this Act, referred to in subsec. (d), is section 3014 of
Section 131 of the Medicare Improvements for Patients and Providers Act of 2008, referred to in subsec. (e), is section 131 of
The Social Security Act, referred to in subsecs. (g) and (h), is act Aug. 14, 1935, ch. 531,
Codification
Section was enacted as part of the Patient Protection and Affordable Care Act, and not as part of the Social Security Act which comprises this chapter.
1 So in original. Probably should be "section".
2 So in original. The word "this" probably should not appear.
§1395w–6. Empowering beneficiary choices through continued access to information on physicians' services
(a) In general
On an annual basis (beginning with 2015), the Secretary shall make publicly available, in an easily understandable format, information with respect to physicians and, as appropriate, other eligible professionals on items and services furnished to Medicare beneficiaries under title XVIII of the Social Security Act (
(b) Type and manner of information
The information made available under this section shall be similar to the type of information in the Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File released by the Secretary with respect to 2012 and shall be made available in a manner similar to the manner in which the information in such file is made available.
(c) Requirements
The information made available under this section shall include, at a minimum, the following:
(1) Information on the number of services furnished by the physician or other eligible professional under part B of title XVIII of the Social Security Act (
(2) Information on submitted charges and payments for services under such part.
(3) A unique identifier for the physician or other eligible professional that is available to the public, such as a national provider identifier.
(d) Searchability
The information made available under this section shall be searchable by at least the following:
(1) The specialty or type of the physician or other eligible professional.
(2) Characteristics of the services furnished, such as volume or groupings of services.
(3) The location of the physician or other eligible professional.
(e) Integration on physician compare
Beginning with 2016, the Secretary shall integrate the information made available under this section on Physician Compare.
(f) Definitions
In this section:
(1) Eligible professional; physician; Secretary
The terms "eligible professional", "physician", and "Secretary" have the meaning given such terms in
(2) Physician compare
The term "Physician Compare" means the Physician Compare Internet website of the Centers for Medicare & Medicaid Services (or a successor website).
(
Editorial Notes
References in Text
The Social Security Act, referred to in subsecs. (a) and (c)(1), is act Aug. 14, 1935, ch. 531,
Codification
Section was enacted as part of the Medicare Access and CHIP Reauthorization Act of 2015, and not as part of the Social Security Act which comprises this chapter.
Part C—Medicare+Choice Program
Editorial Notes
Prior Provisions
A prior part C of this subchapter, consisting of section 1395x et seq., was redesignated part E of this subchapter.
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
§1395w–21. Eligibility, election, and enrollment
(a) Choice of medicare benefits through Medicare+Choice plans
(1) In general
Subject to the provisions of this section, each Medicare+Choice eligible individual (as defined in paragraph (3)) is entitled to elect to receive benefits (other than qualified prescription drug benefits) under this subchapter—
(A) through the original medicare fee-for-service program under parts A and B, or
(B) through enrollment in a Medicare+Choice plan under this part,
and may elect qualified prescription drug coverage in accordance with
(2) Types of Medicare+Choice plans that may be available
A Medicare+Choice plan may be any of the following types of plans of health insurance:
(A) Coordinated care plans (including regional plans)
(i) In general
Coordinated care plans which provide health care services, including but not limited to health maintenance organization plans (with or without point of service options), plans offered by provider-sponsored organizations (as defined in
(ii) Specialized MA plans for special needs individuals
Specialized MA plans for special needs individuals (as defined in
(B) Combination of MSA plan and contributions to Medicare+Choice MSA
An MSA plan, as defined in
(C) Private fee-for-service plans
A Medicare+Choice private fee-for-service plan, as defined in
(3) Medicare+Choice eligible individual
In this subchapter, the term "Medicare+Choice eligible individual" means an individual who is entitled to benefits under part A and enrolled under part B.
(b) Special rules
(1) Residence requirement
(A) In general
Except as the Secretary may otherwise provide and except as provided in subparagraph (C), an individual is eligible to elect a Medicare+Choice plan offered by a Medicare+Choice organization only if the plan serves the geographic area in which the individual resides.
(B) Continuation of enrollment permitted
Pursuant to rules specified by the Secretary, the Secretary shall provide that an MA local plan may offer to all individuals residing in a geographic area the option to continue enrollment in the plan, notwithstanding that the individual no longer resides in the service area of the plan, so long as the plan provides that individuals exercising this option have, as part of the benefits under the original medicare fee-for-service program option, reasonable access within that geographic area to the full range of basic benefits, subject to reasonable cost sharing liability in obtaining such benefits.
(C) Continuation of enrollment permitted where service changed
Notwithstanding subparagraph (A) and in addition to subparagraph (B), if a Medicare+Choice organization eliminates from its service area a Medicare+Choice payment area that was previously within its service area, the organization may elect to offer individuals residing in all or portions of the affected area who would otherwise be ineligible to continue enrollment the option to continue enrollment in an MA local plan it offers so long as—
(i) the enrollee agrees to receive the full range of basic benefits (excluding emergency and urgently needed care) exclusively at facilities designated by the organization within the plan service area; and
(ii) there is no other Medicare+Choice plan offered in the area in which the enrollee resides at the time of the organization's election.
(2) Special rule for certain individuals covered under FEHBP or eligible for veterans or military health benefits
(A) FEHBP
An individual who is enrolled in a health benefit plan under
(B) VA and DOD
The Secretary may apply rules similar to the rules described in subparagraph (A) in the case of individuals who are eligible for health care benefits under
(3) Limitation on eligibility of qualified medicare beneficiaries and other medicaid beneficiaries to enroll in an MSA plan
An individual who is a qualified medicare beneficiary (as defined in
(4) Coverage under MSA plans
(A) In general
Under rules established by the Secretary, an individual is not eligible to enroll (or continue enrollment) in an MSA plan for a year unless the individual provides assurances satisfactory to the Secretary that the individual will reside in the United States for at least 183 days during the year.
(B) Evaluation
The Secretary shall regularly evaluate the impact of permitting enrollment in MSA plans under this part on selection (including adverse selection), use of preventive care, access to care, and the financial status of the Trust Funds under this subchapter.
(C) Reports
The Secretary shall submit to Congress periodic reports on the numbers of individuals enrolled in such plans and on the evaluation being conducted under subparagraph (B).
(c) Process for exercising choice
(1) In general
The Secretary shall establish a process through which elections described in subsection (a) are made and changed, including the form and manner in which such elections are made and changed. Subject to paragraph (4), such elections shall be made or changed only during coverage election periods specified under subsection (e) and shall become effective as provided in subsection (f).
(2) Coordination through Medicare+Choice organizations
(A) Enrollment
Such process shall permit an individual who wishes to elect a Medicare+Choice plan offered by a Medicare+Choice organization to make such election through the filing of an appropriate election form with the organization.
(B) Disenrollment
Such process shall permit an individual, who has elected a Medicare+Choice plan offered by a Medicare+Choice organization and who wishes to terminate such election, to terminate such election through the filing of an appropriate election form with the organization.
(3) Default
(A) Initial election
(i) In general
Subject to clause (ii), an individual who fails to make an election during an initial election period under subsection (e)(1) is deemed to have chosen the original medicare fee-for-service program option.
(ii) Seamless continuation of coverage
The Secretary may establish procedures under which an individual who is enrolled in a health plan (other than Medicare+Choice plan) offered by a Medicare+Choice organization at the time of the initial election period and who fails to elect to receive coverage other than through the organization is deemed to have elected the Medicare+Choice plan offered by the organization (or, if the organization offers more than one such plan, such plan or plans as the Secretary identifies under such procedures).
(B) Continuing periods
An individual who has made (or is deemed to have made) an election under this section is considered to have continued to make such election until such time as—
(i) the individual changes the election under this section, or
(ii) the Medicare+Choice plan with respect to which such election is in effect is discontinued or, subject to subsection (b)(1)(B), no longer serves the area in which the individual resides.
(4) Deemed enrollment relating to converted reasonable cost reimbursement contracts
(A) In general
On the first day of the annual, coordinated election period under subsection (e)(3) for plan years beginning on or after January 1, 2017, an MA eligible individual described in clause (i) or (ii) of subparagraph (B) is deemed, unless the individual elects otherwise, to have elected to receive benefits under this subchapter through an applicable MA plan (and shall be enrolled in such plan) beginning with such plan year, if—
(i) the individual is enrolled in a reasonable cost reimbursement contract under
(ii) such reasonable cost reimbursement contract was extended or renewed for the last reasonable cost reimbursement contract year of the contract (as described in subclause (I) of
(iii) the eligible organization that is offering such reasonable cost reimbursement contract provided the notice described in subclause (III) of such section that the contract was to be converted;
(iv) the applicable MA plan—
(I) is the plan that was converted from the reasonable cost reimbursement contract described in clause (iii);
(II) is offered by the same entity (or an organization affiliated with such entity that has a common ownership interest of control) that entered into such contract; and
(III) is offered in the service area where the individual resides;
(v) in the case of reasonable cost reimbursement contracts that provide coverage under parts A and B (and, to the extent the Secretary determines it to be feasible, contracts that provide only part B coverage), the difference between the estimated individual costs (as determined applicable by the Secretary) for the applicable MA plan and such costs for the predecessor cost plan does not exceed a threshold established by the Secretary; and
(vi) the applicable MA plan—
(I) provides coverage for enrollees transitioning from the converted reasonable cost reimbursement contract to such plan to maintain current providers of services and suppliers and course of treatment at the time of enrollment for a period of at least 90 days after enrollment; and
(II) during such period, pays such providers of services and suppliers for items and services furnished to the enrollee an amount that is not less than the amount of payment applicable for such items and services under the original Medicare fee-for-service program under parts A and B.
(B) MA eligible individuals described
(i) Without prescription drug coverage
An MA eligible individual described in this clause, with respect to a plan year, is an MA eligible individual who is enrolled in a reasonable cost reimbursement contract under
(ii) With prescription drug coverage
An MA eligible individual described in this clause, with respect to a plan year, is an MA eligible individual who is enrolled in a reasonable cost reimbursement contract under
(I) through such contract; or
(II) through a prescription drug plan, if the sponsor of such plan is the same entity (or an organization affiliated with such entity) that entered into such contract.
(C) Applicable MA plan defined
In this paragraph, the term "applicable MA plan" means, in the case of an individual described in—
(i) subparagraph (B)(i), an MA plan that is not an MA–PD plan; and
(ii) subparagraph (B)(ii), an MA–PD plan.
(D) Identification and notification of deemed individuals
Not later than 45 days before the first day of the annual, coordinated election period under subsection (e)(3) for plan years beginning on or after January 1, 2017, the Secretary shall identify and notify the individuals who will be subject to deemed elections under subparagraph (A) on the first day of such period.
(d) Providing information to promote informed choice
(1) In general
The Secretary shall provide for activities under this subsection to broadly disseminate information to medicare beneficiaries (and prospective medicare beneficiaries) on the coverage options provided under this section in order to promote an active, informed selection among such options.
(2) Provision of notice
(A) Open season notification
At least 15 days before the beginning of each annual, coordinated election period (as defined in subsection (e)(3)(B)), the Secretary shall mail to each Medicare+Choice eligible individual residing in an area the following:
(i) General information
The general information described in paragraph (3).
(ii) List of plans and comparison of plan options
A list identifying the Medicare+Choice plans that are (or will be) available to residents of the area and information described in paragraph (4) concerning such plans. Such information shall be presented in a comparative form.
(iii) Additional information
Any other information that the Secretary determines will assist the individual in making the election under this section.
The mailing of such information shall be coordinated, to the extent practicable, with the mailing of any annual notice under
(B) Notifications required
(i) Notification to newly eligible Medicare Advantage eligible individuals
To the extent practicable, the Secretary shall, not later than 30 days before the beginning of the initial Medicare+Choice enrollment period for an individual described in subsection (e)(1), mail to the individual the information described in subparagraph (A).
(ii) Notification related to certain deemed elections
The Secretary shall require a Medicare Advantage organization that is offering a Medicare Advantage plan that has been converted from a reasonable cost reimbursement contract pursuant to
(I) a notification that such individual will, on such day, be deemed to have made an election with respect to such plan to receive benefits under this subchapter through an MA plan or MA–PD plan (and shall be enrolled in such plan) for the next plan year under subsection (c)(4)(A), but that the individual may make a different election during the annual, coordinated election period for such year;
(II) the information described in subparagraph (A);
(III) a description of the differences between such MA plan or MA–PD plan and the reasonable cost reimbursement contract in which the individual was most recently enrolled with respect to benefits covered under such plans, including cost-sharing, premiums, drug coverage, and provider networks;
(IV) information about the special period for elections under subsection (e)(2)(F); and
(V) other information the Secretary may specify.
(C) Form
The information disseminated under this paragraph shall be written and formatted using language that is easily understandable by medicare beneficiaries.
(D) Periodic updating
The information described in subparagraph (A) shall be updated on at least an annual basis to reflect changes in the availability of Medicare+Choice plans and the benefits and Medicare+Choice monthly basic and supplemental beneficiary premiums for such plans.
(3) General information
General information under this paragraph, with respect to coverage under this part during a year, shall include the following:
(A) Benefits under original medicare fee-for-service program option
A general description of the benefits covered under the original medicare fee-for-service program under parts A and B, including—
(i) covered items and services,
(ii) beneficiary cost sharing, such as deductibles, coinsurance, and copayment amounts, and
(iii) any beneficiary liability for balance billing.
(B) Election procedures
Information and instructions on how to exercise election options under this section.
(C) Rights
A general description of procedural rights (including grievance and appeals procedures) of beneficiaries under the original medicare fee-for-service program and the Medicare+Choice program and the right to be protected against discrimination based on health status-related factors under
(D) Information on medigap and medicare select
A general description of the benefits, enrollment rights, and other requirements applicable to medicare supplemental policies under
(E) Potential for contract termination
The fact that a Medicare+Choice organization may terminate its contract, refuse to renew its contract, or reduce the service area included in its contract, under this part, and the effect of such a termination, nonrenewal, or service area reduction may have on individuals enrolled with the Medicare+Choice plan under this part.
(F) Catastrophic coverage and single deductible
In the case of an MA regional plan, a description of the catastrophic coverage and single deductible applicable under the plan.
(4) Information comparing plan options
Information under this paragraph, with respect to a Medicare+Choice plan for a year, shall include the following:
(A) Benefits
The benefits covered under the plan, including the following:
(i) Covered items and services beyond those provided under the original medicare fee-for-service program.
(ii) Any beneficiary cost sharing, including information on the single deductible (if applicable) under
(iii) Any maximum limitations on out-of-pocket expenses.
(iv) In the case of an MSA plan, differences in cost sharing, premiums, and balance billing under such a plan compared to under other Medicare+Choice plans.
(v) In the case of a Medicare+Choice private fee-for-service plan, differences in cost sharing, premiums, and balance billing under such a plan compared to under other Medicare+Choice plans.
(vi) The extent to which an enrollee may obtain benefits through out-of-network health care providers.
(vii) The extent to which an enrollee may select among in-network providers and the types of providers participating in the plan's network.
(viii) The organization's coverage of emergency and urgently needed care.
(B) Premiums
(i) In general
The monthly amount of the premium charged to an individual.
(ii) Reductions
The reduction in part B premiums, if any.
(C) Service area
The service area of the plan.
(D) Quality and performance
To the extent available, plan quality and performance indicators for the benefits under the plan (and how they compare to such indicators under the original medicare fee-for-service program under parts A and B in the area involved), including—
(i) disenrollment rates for medicare enrollees electing to receive benefits through the plan for the previous 2 years (excluding disenrollment due to death or moving outside the plan's service area),
(ii) information on medicare enrollee satisfaction,
(iii) information on health outcomes, and
(iv) the recent record regarding compliance of the plan with requirements of this part (as determined by the Secretary).
(E) Supplemental benefits
Supplemental health care benefits, including any reductions in cost-sharing under
(5) Maintaining a toll-free number and Internet site
The Secretary shall maintain a toll-free number for inquiries regarding Medicare+Choice options and the operation of this part in all areas in which Medicare+Choice plans are offered and an Internet site through which individuals may electronically obtain information on such options and Medicare+Choice plans.
(6) Use of non-Federal entities
The Secretary may enter into contracts with non-Federal entities to carry out activities under this subsection.
(7) Provision of information
A Medicare+Choice organization shall provide the Secretary with such information on the organization and each Medicare+Choice plan it offers as may be required for the preparation of the information referred to in paragraph (2)(A).
(e) Coverage election periods
(1) Initial choice upon eligibility to make election if Medicare+Choice plans available to individual
If, at the time an individual first becomes entitled to benefits under part A and enrolled under part B, there is one or more Medicare+Choice plans offered in the area in which the individual resides, the individual shall make the election under this section during a period specified by the Secretary such that if the individual elects a Medicare+Choice plan during the period, coverage under the plan becomes effective as of the first date on which the individual may receive such coverage. If any portion of an individual's initial enrollment period under part B occurs after the end of the annual, coordinated election period described in paragraph (3)(B)(iii), the initial enrollment period under this part shall further extend through the end of the individual's initial enrollment period under part B.
(2) Open enrollment and disenrollment opportunities
Subject to paragraph (5)—
(A) Continuous open enrollment and disenrollment through 2005
At any time during the period beginning January 1, 1998, and ending on December 31, 2005, a Medicare+Choice eligible individual may change the election under subsection (a)(1).
(B) Continuous open enrollment and disenrollment for first 6 months during 2006
(i) In general
Subject to clause (ii), subparagraph (C)(iii),1 and subparagraph (D), at any time during the first 6 months of 2006, or, if the individual first becomes a Medicare+Choice eligible individual during 2006, during the first 6 months during 2006 in which the individual is a Medicare+Choice eligible individual, a Medicare+Choice eligible individual may change the election under subsection (a)(1).
(ii) Limitation of one change
An individual may exercise the right under clause (i) only once. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under the first sentence of paragraph (4).
(C) Annual 45-day period from 2011 through 2018 for disenrollment from MA plans to elect to receive benefits under the original Medicare fee-for-service program
Subject to subparagraph (D), at any time during the first 45 days of a year (beginning with 2011 and ending with 2018), an individual who is enrolled in a Medicare Advantage plan may change the election under subsection (a)(1), but only with respect to coverage under the original medicare fee-for-service program under parts A and B, and may elect qualified prescription drug coverage in accordance with
(D) Continuous open enrollment for institutionalized individuals
At any time after 2005 in the case of a Medicare+Choice eligible individual who is institutionalized (as defined by the Secretary), the individual may elect under subsection (a)(1)—
(i) to enroll in a Medicare+Choice plan; or
(ii) to change the Medicare+Choice plan in which the individual is enrolled.
(E) Limited continuous open enrollment of original fee-for-service enrollees in medicare advantage non-prescription drug plans
(i) In general
On any date during the period beginning on January 1, 2007, and ending on July 31, 2007, on which a Medicare Advantage eligible individual is an unenrolled fee-for-service individual (as defined in clause (ii)), the individual may elect under subsection (a)(1) to enroll in a Medicare Advantage plan that is not an MA–PD plan.
(ii) Unenrolled fee-for-service individual defined
In this subparagraph, the term "unenrolled fee-for-service individual" means, with respect to a date, a Medicare Advantage eligible individual who—
(I) is receiving benefits under this subchapter through enrollment in the original medicare fee-for-service program under parts A and B;
(II) is not enrolled in an MA plan on such date; and
(III) as of such date is not otherwise eligible to elect to enroll in an MA plan.
(iii) Limitation of one change during the applicable period
An individual may exercise the right under clause (i) only once during the period described in such clause.
(iv) No effect on coverage under a prescription drug plan
Nothing in this subparagraph shall be construed as permitting an individual exercising the right under clause (i)—
(I) who is enrolled in a prescription drug plan under part D, to disenroll from such plan or to enroll in a different prescription drug plan; or
(II) who is not enrolled in a prescription drug plan, to enroll in such a plan.
(F) Special period for certain deemed elections
(i) In general
At any time during the period beginning after the last day of the annual, coordinated election period under paragraph (3) in which an individual is deemed to have elected to enroll in an MA plan or MA–PD plan under subsection (c)(4) and ending on the last day of February of the first plan year for which the individual is enrolled in such plan, such individual may change the election under subsection (a)(1) (including changing the MA plan or MA–PD plan in which the individual is enrolled).
(ii) Limitation of one change
An individual may exercise the right under clause (i) only once during the applicable period described in such clause. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under paragraph (4).
(G) Continuous open enrollment and disenrollment for first 3 months in 2016 and subsequent years
(i) In general
Subject to clause (ii) and subparagraph (D)—
(I) in the case of an MA eligible individual who is enrolled in an MA plan, at any time during the first 3 months of a year (beginning with 2019); or
(II) in the case of an individual who first becomes an MA eligible individual during a year (beginning with 2019) and enrolls in an MA plan, during the first 3 months during such year in which the individual is an MA eligible individual;
such MA eligible individual may change the election under subsection (a)(1).
(ii) Limitation of one change during open enrollment period each year
An individual may change the election pursuant to clause (i) only once during the applicable 3-month period described in such clause in each year. The limitation under this clause shall not apply to changes in elections effected during an annual, coordinated election period under paragraph (3) or during a special enrollment period under paragraph (4).
(iii) Limited application to part D
Clauses (i) and (ii) of this subparagraph shall only apply with respect to changes in enrollment in a prescription drug plan under part D in the case of an individual who, previous to such change in enrollment, is enrolled in a Medicare Advantage plan.
(iv) Limitations on marketing
Pursuant to subsection (j), no unsolicited marketing or marketing materials may be sent to an individual described in clause (i) during the continuous open enrollment and disenrollment period established for the individual under such clause, notwithstanding marketing guidelines established by the Centers for Medicare & Medicaid Services.
(3) Annual, coordinated election period
(A) In general
Subject to paragraph (5), each individual who is eligible to make an election under this section may change such election during an annual, coordinated election period.
(B) Annual, coordinated election period
For purposes of this section, the term "annual, coordinated election period" means—
(i) with respect to a year before 2002, the month of November before such year;
(ii) with respect to 2002, 2003, 2004, and 2005, the period beginning on November 15 and ending on December 31 of the year before such year;
(iii) with respect to 2006, the period beginning on November 15, 2005, and ending on May 15, 2006;
(iv) with respect to 2007, 2008, 2009, and 2010, the period beginning on November 15 and ending on December 31 of the year before such year; and
(v) with respect to 2012 and succeeding years, the period beginning on October 15 and ending on December 7 of the year before such year.
(C) Medicare+Choice health information fairs
During the fall season of each year (beginning with 1999) and during the period described in subparagraph (B)(iii), in conjunction with the annual coordinated election period defined in subparagraph (B), the Secretary shall provide for a nationally coordinated educational and publicity campaign to inform Medicare+Choice eligible individuals about Medicare+Choice plans and the election process provided under this section.
(D) Special information campaigns
During November 1998 the Secretary shall provide for an educational and publicity campaign to inform Medicare+Choice eligible individuals about the availability of Medicare+Choice plans, and eligible organizations with risk-sharing contracts under
(4) Special election periods
Effective as of January 1, 2006, an individual may discontinue an election of a Medicare+Choice plan offered by a Medicare+Choice organization other than during an annual, coordinated election period and make a new election under this section if—
(A)(i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or
(ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;
(B) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances (specified by the Secretary, but not including termination of the individual's enrollment on the basis described in clause (i) or (ii) of subsection (g)(3)(B));
(C) the individual demonstrates (in accordance with guidelines established by the Secretary) that—
(i) the organization offering the plan substantially violated a material provision of the organization's contract under this part in relation to the individual (including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards); or
(ii) the organization (or an agent or other entity acting on the organization's behalf) materially misrepresented the plan's provisions in marketing the plan to the individual; or
(D) the individual meets such other exceptional conditions as the Secretary may provide.
Effective as of January 1, 2006, an individual who, upon first becoming eligible for benefits under part A at age 65, enrolls in a Medicare+Choice plan under this part, the individual may discontinue the election of such plan, and elect coverage under the original fee-for-service plan, at any time during the 12-month period beginning on the effective date of such enrollment.
(5) Special rules for MSA plans
Notwithstanding the preceding provisions of this subsection, an individual—
(A) may elect an MSA plan only during—
(i) an initial open enrollment period described in paragraph (1), or
(ii) an annual, coordinated election period described in paragraph (3)(B);
(B) subject to subparagraph (C), may not discontinue an election of an MSA plan except during the periods described in clause (ii) or (iii) of subparagraph (A) and under the first sentence of paragraph (4); and
(C) who elects an MSA plan during an annual, coordinated election period, and who never previously had elected such a plan, may revoke such election, in a manner determined by the Secretary, by not later than December 15 following the date of the election.
(6) Open enrollment periods
Subject to paragraph (5), a Medicare+Choice organization—
(A) shall accept elections or changes to elections during the initial enrollment periods described in paragraph (1), during the period described in paragraph (2)(F), during the month of November 1998 and during the annual, coordinated election period under paragraph (3) for each subsequent year, and during special election periods described in the first sentence of paragraph (4); and
(B) may accept other changes to elections at such other times as the organization provides.
(f) Effectiveness of elections and changes of elections
(1) During initial coverage election period
An election of coverage made during the initial coverage election period under subsection (e)(1) shall take effect upon the date the individual becomes entitled to benefits under part A and enrolled under part B, except as the Secretary may provide (consistent with
(2) During continuous open enrollment periods
An election or change of coverage made under subsection (e)(2) shall take effect with the first day of the first calendar month following the date on which the election or change is made.
(3) Annual, coordinated election period
An election or change of coverage made during an annual, coordinated election period (as defined in subsection (e)(3)(B), other than the period described in clause (iii) of such subsection) in a year shall take effect as of the first day of the following year.
(4) Other periods
An election or change of coverage made during any other period under subsection (e)(4) shall take effect in such manner as the Secretary provides in a manner consistent (to the extent practicable) with protecting continuity of health benefit coverage.
(g) Guaranteed issue and renewal
(1) In general
Except as provided in this subsection, a Medicare+Choice organization shall provide that at any time during which elections are accepted under this section with respect to a Medicare+Choice plan offered by the organization, the organization will accept without restrictions individuals who are eligible to make such election.
(2) Priority
If the Secretary determines that a Medicare+Choice organization, in relation to a Medicare+Choice plan it offers, has a capacity limit and the number of Medicare+Choice eligible individuals who elect the plan under this section exceeds the capacity limit, the organization may limit the election of individuals of the plan under this section but only if priority in election is provided—
(A) first to such individuals as have elected the plan at the time of the determination, and
(B) then to other such individuals in such a manner that does not discriminate, on a basis described in
The preceding sentence shall not apply if it would result in the enrollment of enrollees substantially nonrepresentative, as determined in accordance with regulations of the Secretary, of the medicare population in the service area of the plan.
(3) Limitation on termination of election
(A) In general
Subject to subparagraph (B), a Medicare+Choice organization may not for any reason terminate the election of any individual under this section for a Medicare+Choice plan it offers.
(B) Basis for termination of election
A Medicare+Choice organization may terminate an individual's election under this section with respect to a Medicare+Choice plan it offers if—
(i) any Medicare+Choice monthly basic and supplemental beneficiary premiums required with respect to such plan are not paid on a timely basis (consistent with standards under
(ii) the individual has engaged in disruptive behavior (as specified in such standards), or
(iii) the plan is terminated with respect to all individuals under this part in the area in which the individual resides.
(C) Consequence of termination
(i) Terminations for cause
Any individual whose election is terminated under clause (i) or (ii) of subparagraph (B) is deemed to have elected the original medicare fee-for-service program option described in subsection (a)(1)(A).
(ii) Termination based on plan termination or service area reduction
Any individual whose election is terminated under subparagraph (B)(iii) shall have a special election period under subsection (e)(4)(A) in which to change coverage to coverage under another Medicare+Choice plan. Such an individual who fails to make an election during such period is deemed to have chosen to change coverage to the original medicare fee-for-service program option described in subsection (a)(1)(A).
(D) Organization obligation with respect to election forms
Pursuant to a contract under
(h) Approval of marketing material and application forms
(1) Submission
No marketing material or application form may be distributed by a Medicare+Choice organization to (or for the use of) Medicare+Choice eligible individuals unless—
(A) at least 45 days (or 10 days in the case described in paragraph (5)) before the date of distribution the organization has submitted the material or form to the Secretary for review, and
(B) the Secretary has not disapproved the distribution of such material or form.
(2) Review
The standards established under
(3) Deemed approval (1-stop shopping)
In the case of material or form that is submitted under paragraph (1)(A) to the Secretary or a regional office of the Department of Health and Human Services and the Secretary or the office has not disapproved the distribution of marketing material or form under paragraph (1)(B) with respect to a Medicare+Choice plan in an area, the Secretary is deemed not to have disapproved such distribution in all other areas covered by the plan and organization except with regard to that portion of such material or form that is specific only to an area involved.
(4) Prohibition of certain marketing practices
Each Medicare+Choice organization shall conform to fair marketing standards, in relation to Medicare+Choice plans offered under this part, included in the standards established under
(A) shall not permit a Medicare+Choice organization to provide for, subject to subsection (j)(2)(C), cash, gifts, prizes, or other monetary rebates as an inducement for enrollment or otherwise;
(B) may include a prohibition against a Medicare+Choice organization (or agent of such an organization) completing any portion of any election form used to carry out elections under this section on behalf of any individual;
(C) shall not permit a Medicare Advantage organization (or the agents, brokers, and other third parties representing such organization) to conduct the prohibited activities described in subsection (j)(1); and
(D) shall only permit a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization) to conduct the activities described in subsection (j)(2) in accordance with the limitations established under such subsection.
(5) Special treatment of marketing material following model marketing language
In the case of marketing material of an organization that uses, without modification, proposed model language specified by the Secretary, the period specified in paragraph (1)(A) shall be reduced from 45 days to 10 days.
(6) Required inclusion of plan type in plan name
For plan years beginning on or after January 1, 2010, a Medicare Advantage organization must ensure that the name of each Medicare Advantage plan offered by the Medicare Advantage organization includes the plan type of the plan (using standard terminology developed by the Secretary).
(7) Strengthening the ability of States to act in collaboration with the Secretary to address fraudulent or inappropriate marketing practices
(A) Appointment of agents and brokers
Each Medicare Advantage organization shall—
(i) only use agents and brokers who have been licensed under State law to sell Medicare Advantage plans offered by the Medicare Advantage organization;
(ii) in the case where a State has a State appointment law, abide by such law; and
(iii) report to the applicable State the termination of any such agent or broker, including the reasons for such termination (as required under applicable State law).
(B) Compliance with State information requests
Each Medicare Advantage organization shall comply in a timely manner with any request by a State for information regarding the performance of a licensed agent, broker, or other third party representing the Medicare Advantage organization as part of an investigation by the State into the conduct of the agent, broker, or other third party.
(i) Effect of election of Medicare+Choice plan option
(1) Payments to organizations
Subject to
(2) Only organization entitled to payment
Subject to
(3) FFS payment for expenses for kidney acquisitions
Paragraphs (1) and (2) shall not apply with respect to expenses for organ acquisitions for kidney transplants described in
(j) Prohibited activities described and limitations on the conduct of certain other activities
(1) Prohibited activities described
The following prohibited activities are described in this paragraph:
(A) Unsolicited means of direct contact
Any unsolicited means of direct contact of prospective enrollees, including soliciting door-to-door or any outbound telemarketing without the prospective enrollee initiating contact.
(B) Cross-selling
The sale of other non-health related products (such as annuities and life insurance) during any sales or marketing activity or presentation conducted with respect to a Medicare Advantage plan.
(C) Meals
The provision of meals of any sort, regardless of value, to prospective enrollees at promotional and sales activities.
(D) Sales and marketing in health care settings and at educational events
Sales and marketing activities for the enrollment of individuals in Medicare Advantage plans that are conducted—
(i) in health care settings in areas where health care is delivered to individuals (such as physician offices and pharmacies), except in the case where such activities are conducted in common areas in health care settings; and
(ii) at educational events.
(2) Limitations
The Secretary shall establish limitations with respect to at least the following:
(A) Scope of marketing appointments
The scope of any appointment with respect to the marketing of a Medicare Advantage plan. Such limitation shall require advance agreement with a prospective enrollee on the scope of the marketing appointment and documentation of such agreement by the Medicare Advantage organization. In the case where the marketing appointment is in person, such documentation shall be in writing.
(B) Co-branding
The use of the name or logo of a co-branded network provider on Medicare Advantage plan membership and marketing materials.
(C) Limitation of gifts to nominal dollar value
The offering of gifts and other promotional items other than those that are of nominal value (as determined by the Secretary) to prospective enrollees at promotional activities.
(D) Compensation
The use of compensation other than as provided under guidelines established by the Secretary. Such guidelines shall ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the Medicare Advantage plan that is intended to best meet their health care needs.
(E) Required training, annual retraining, and testing of agents, brokers, and other third parties
The use by a Medicare Advantage organization of any individual as an agent, broker, or other third party representing the organization that has not completed an initial training and testing program and does not complete an annual retraining and testing program.
(Aug. 14, 1935, ch. 531, title XVIII, §1851, as added
Editorial Notes
References in Text
Subsec. (e)(2)(C), referred to in subsec. (e)(2)(B)(i), was amended generally by section 3204(a)(1) of
Amendments
2016—Subsec. (a)(3).
Subsec. (e)(2)(C).
Subsec. (e)(2)(G).
Subsec. (i)(3).
2015—Subsec. (a)(3)(B).
Subsec. (c)(1).
Subsec. (c)(4).
Subsec. (d)(2)(B).
Subsec. (e)(2)(F).
Subsec. (e)(6)(A).
2010—Subsec. (b)(1)(C).
Subsec. (e)(2)(C).
Subsec. (e)(3)(B)(iv).
Subsec. (e)(3)(B)(v).
2009—Subsec. (i)(1).
2008—Subsec. (h)(4)(A).
Subsec. (h)(4)(C).
Subsec. (h)(4)(D).
Subsec. (h)(6).
Subsec. (h)(7).
Subsec. (j).
Subsec. (j)(2).
2007—Subsec. (e)(2)(E)(i).
Subsec. (e)(2)(E)(iii).
2006—Subsec. (e)(2)(E).
2003—Subsec. (a)(1).
Subsec. (a)(1)(B).
Subsec. (a)(2)(A).
Subsec. (a)(2)(A)(ii).
Subsec. (a)(3)(B)(ii).
Subsec. (b)(1)(B).
Subsec. (b)(1)(C).
Subsec. (b)(4).
Subsec. (b)(4)(A).
"(i) on or after January 1, 2003, unless the enrollment is the continuation of such an enrollment in effect as of such date; or
"(ii) as of any date if the number of such individuals so enrolled as of such date has reached 390,000."
Subsec. (b)(4)(C).
Subsec. (d)(3)(F).
Subsec. (d)(4)(A)(ii).
Subsec. (d)(4)(B)(i).
Subsec. (d)(4)(E).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(2)(B)(i).
Subsec. (e)(2)(C)(i).
Subsec. (e)(2)(C)(iii).
Subsec. (e)(3)(B).
Subsec. (e)(3)(C).
Subsec. (e)(3)(D).
Subsec. (e)(4).
Subsec. (e)(5)(A)(i).
Subsec. (e)(5)(A)(ii).
Subsec. (e)(5)(A)(iii).
Subsec. (f)(1).
Subsec. (f)(3).
Subsec. (i)(1).
Subsec. (i)(2).
2002—Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(B)(i), (C)(i).
Subsec. (e)(2)(D).
Subsec. (e)(3)(B).
Subsec. (e)(4).
Subsec. (e)(6)(A).
2000—Subsec. (a)(3)(B).
Subsec. (d)(4)(B).
Subsec. (f)(2).
Subsec. (h)(1)(A).
Subsec. (h)(5).
1999—Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
Subsec. (e)(2)(B)(i).
Subsec. (e)(2)(C)(i).
Subsec. (e)(2)(D).
Subsec. (e)(3)(C).
Subsec. (e)(4)(A).
Subsec. (f)(2).
Subsec. (i)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Effective Date of 2003 Amendment
Amendment by section 237(b)(2)(A) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(2)(C)] of
"(1)
"(2)
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(A)] of
"(1) The amendments made by subsection (a) [amending this section and
"(2) The amendments made by subsection (c) [amending this section] apply to elections made on or after the date of the enactment of this Act [Nov. 29, 1999] with respect to eliminations of Medicare+Choice payment areas from a service area that occur before, on, or after the date of the enactment of this Act."
Regulations
Construction
No Cuts in Guaranteed Benefits
Implementation of Medicare Advantage Program
"(a)
"(b)
"(c)
Report on Impact of Increased Financial Assistance to Medicare Advantage Plans
MedPAC Study and Report on Clarification of Authority Regarding Disapproval of Unreasonable Beneficiary Cost-Sharing
Moratorium on New Local Preferred Provider Organization Plans
Specialized MA Plans
"(1)
"(2)
MedPAC Study on Consumer Coalitions
Report on Accounting for VA and DOD Expenditures for Medicare Beneficiaries
Report on Medicare MSA (Medical Savings Account) Plans
GAO Audit and Reports on Provision of Medicare+Choice Health Information to Beneficiaries
"(1)
"(3) [(2)]
Enrollment Transition Rule
Secretarial Submission of Legislative Proposal
Report on Integration and Transition
Medicare Enrollment Demonstration Project
"(a)
"(1)
"(2)
"(A) the design of the project;
"(B) the selection criteria for the third-party contractor; and
"(C) the establishment of performance standards, as described in paragraph (3).
"(3)
"(A)
"(B)
"(b)
"(c)
"(d)
"(e)
1 See References in Text note below.
§1395w–22. Benefits and beneficiary protections
(a) Basic benefits
(1) Requirement
(A) In general
Except as provided in
(B) Benefits under the original medicare fee-for-service program option defined
(i) In general
For purposes of this part, the term "benefits under the original medicare fee-for-service program option" means, subject to subsection (m), those items and services (other than hospice care or coverage for organ acquisitions for kidney transplants, including as covered under
(ii) Special rule for regional plans
In the case of an MA regional plan in determining an actuarially equivalent level of cost-sharing with respect to benefits under the original medicare fee-for-service program option, there shall only be taken into account, with respect to the application of
(iii) Limitation on variation of cost sharing for certain benefits
Subject to clause (v), cost-sharing for services described in clause (iv) shall not exceed the cost-sharing required for those services under parts A and B.
(iv) Services described
The following services are described in this clause:
(I) Chemotherapy administration services.
(II) Renal dialysis services (as defined in
(III) Skilled nursing care.
(IV) Clinical diagnostic laboratory test administered during any portion of the emergency period defined in paragraph (1)(B) of
(V) Specified COVID–19 testing-related services (as described in
(VI) A COVID–19 vaccine and its administration described in
(VII) A drug or biological product that is a selected drug (as referred to in
(VIII) Such other services that the Secretary determines appropriate (including services that the Secretary determines require a high level of predictability and transparency for beneficiaries).
(v) Exception
In the case of services described in clause (iv), other than subclauses (IV), (V), and (VI) of such clause, for which there is no cost-sharing required under parts A and B, cost-sharing may be required for those services in accordance with clause (i).
(vi) Prohibition of application of certain requirements for COVID–19 testing
In the case of a product or service described in subclause (IV) or (V), respectively, of clause (iv) that is administered or furnished during any portion of the emergency period described in such subclause beginning on or after March 18, 2020, an MA plan may not impose any prior authorization or other utilization management requirements with respect to the coverage of such a product or service under such plan.
(2) Satisfaction of requirement
(A) In general
A Medicare+Choice plan (other than an MSA plan) offered by a Medicare+Choice organization satisfies paragraph (1)(A), with respect to benefits for items and services furnished other than through a provider or other person that has a contract with the organization offering the plan, if the plan provides payment in an amount so that—
(i) the sum of such payment amount and any cost sharing provided for under the plan, is equal to at least
(ii) the total dollar amount of payment for such items and services as would otherwise be authorized under parts A and B (including any balance billing permitted under such parts).
(B) Reference to related provisions
For provision relating to—
(i) limitations on balance billing against Medicare+Choice organizations for non-contract providers, see subsection (k) and
(ii) limiting actuarial value of enrollee liability for covered benefits, see
(C) Election of uniform coverage determination
In the case of a Medicare+Choice organization that offers a Medicare+Choice plan in an area in which more than one local coverage determination is applied with respect to different parts of the area, the organization may elect to have the local coverage determination for the part of the area that is most beneficial to Medicare+Choice enrollees (as identified by the Secretary) apply with respect to all Medicare+Choice enrollees enrolled in the plan.
(3) Supplemental benefits
(A) Benefits included subject to Secretary's approval
Subject to subparagraph (D), each Medicare+Choice organization may provide to individuals enrolled under this part, other than under an MSA plan (without affording those individuals an option to decline the coverage), supplemental health care benefits that the Secretary may approve. The Secretary shall approve any such supplemental benefits unless the Secretary determines that including such supplemental benefits would substantially discourage enrollment by Medicare+Choice eligible individuals with the organization.
(B) At enrollees' option
(i) In general
Subject to clause (ii), a Medicare+Choice organization may provide to individuals enrolled under this part supplemental health care benefits that the individuals may elect, at their option, to have covered.
(ii) Special rule for MSA plans
A Medicare+Choice organization may not provide, under an MSA plan, supplemental health care benefits that cover the deductible described in
(C) Application to Medicare+Choice private fee-for-service plans
Nothing in this paragraph shall be construed as preventing a Medicare+Choice private fee-for-service plan from offering supplemental benefits that include payment for some or all of the balance billing amounts permitted consistent with subsection (k) and coverage of additional services that the plan finds to be medically necessary. Such benefits may include reductions in cost-sharing below the actuarial value specified in
(D) Expanding supplemental benefits to meet the needs of chronically ill enrollees
(i) In general
For plan year 2020 and subsequent plan years, in addition to any supplemental health care benefits otherwise provided under this paragraph, an MA plan, including a specialized MA plan for special needs individuals (as defined in
(ii) Supplemental benefits described
(I) In general
Supplemental benefits described in this clause are supplemental benefits that, with respect to a chronically ill enrollee, have a reasonable expectation of improving or maintaining the health or overall function of the chronically ill enrollee and may not be limited to being primarily health related benefits.
(II) Authority to waive uniformity requirements
The Secretary may, only with respect to supplemental benefits provided to a chronically ill enrollee under this subparagraph, waive the uniformity requirements under this part, as determined appropriate by the Secretary.
(iii) Chronically ill enrollee defined
In this subparagraph, the term "chronically ill enrollee" means an enrollee in an MA plan that the Secretary determines—
(I) has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall health or function of the enrollee;
(II) has a high risk of hospitalization or other adverse health outcomes; and
(III) requires intensive care coordination.
(4) Organization as secondary payer
Notwithstanding any other provision of law, a Medicare+Choice organization may (in the case of the provision of items and services to an individual under a Medicare+Choice plan under circumstances in which payment under this subchapter is made secondary pursuant to
(A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
(B) such individual to the extent that the individual has been paid under such law, plan, or policy for such services.
(5) National coverage determinations and legislative changes in benefits
If there is a national coverage determination or legislative change in benefits required to be provided under this part made in the period beginning on the date of an announcement under
(A) such determination or legislative change in benefits shall not apply to contracts under this part until the first contract year that begins after the end of such period, and
(B) if such coverage determination or legislative change provides for coverage of additional benefits or coverage under additional circumstances,
The projection under the previous sentence shall be based on an analysis by the Chief Actuary of the Centers for Medicare & Medicaid Services of the actuarial costs associated with the coverage determination or legislative change in benefits.
(6) Special benefit rules for regional plans
In the case of an MA plan that is an MA regional plan, benefits under the plan shall include the benefits described in paragraphs (1) and (2) of
(7) Limitation on cost-sharing for dual eligibles and qualified medicare beneficiaries
In the case of an individual who is a full-benefit dual eligible individual (as defined in
(b) Antidiscrimination
(1) Beneficiaries
A Medicare Advantage organization may not deny, limit, or condition the coverage or provision of benefits under this part, for individuals permitted to be enrolled with the organization under this part, based on any health status-related factor described in section 2702(a)(1) of the Public Health Service Act.1 The Secretary shall not approve a plan of an organization if the Secretary determines that the design of the plan and its benefits are likely to substantially discourage enrollment by certain MA eligible individuals with the organization.
(2) Providers
A Medicare+Choice organization shall not discriminate with respect to participation, reimbursement, or indemnification as to any provider who is acting within the scope of the provider's license or certification under applicable State law, solely on the basis of such license or certification. This paragraph shall not be construed to prohibit a plan from including providers only to the extent necessary to meet the needs of the plan's enrollees or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan.
(c) Disclosure requirements
(1) Detailed description of plan provisions
A Medicare+Choice organization shall disclose, in clear, accurate, and standardized form to each enrollee with a Medicare+Choice plan offered by the organization under this part at the time of enrollment and at least annually thereafter, the following information regarding such plan:
(A) Service area
The plan's service area.
(B) Benefits
Benefits offered under the plan, including information described in
(C) Access
The number, mix, and distribution of plan providers, out-of-network coverage (if any) provided by the plan, and any point-of-service option (including the supplemental premium for such option).
(D) Out-of-area coverage
Out-of-area coverage provided by the plan.
(E) Emergency coverage
Coverage of emergency services, including—
(i) the appropriate use of emergency services, including use of the 911 telephone system or its local equivalent in emergency situations and an explanation of what constitutes an emergency situation;
(ii) the process and procedures of the plan for obtaining emergency services; and
(iii) the locations of (I) emergency departments, and (II) other settings, in which plan physicians and hospitals provide emergency services and post-stabilization care.
(F) Supplemental benefits
Supplemental benefits available from the organization offering the plan, including—
(i) whether the supplemental benefits are optional,
(ii) the supplemental benefits covered, and
(iii) the Medicare+Choice monthly supplemental beneficiary premium for the supplemental benefits.
(G) Prior authorization rules
Rules regarding prior authorization or other review requirements that could result in nonpayment.
(H) Plan grievance and appeals procedures
All plan appeal or grievance rights and procedures.
(I) Quality improvement program
A description of the organization's quality improvement program under subsection (e).
(2) Disclosure upon request
Upon request of a Medicare+Choice eligible individual, a Medicare+Choice organization must provide the following information to such individual:
(A) The general coverage information and general comparative plan information made available under clauses (i) and (ii) of
(B) Information on procedures used by the organization to control utilization of services and expenditures.
(C) Information on the number of grievances, redeterminations, and appeals and on the disposition in the aggregate of such matters.
(D) An overall summary description as to the method of compensation of participating physicians.
(d) Access to services
(1) In general
A Medicare+Choice organization offering a Medicare+Choice plan may select the providers from whom the benefits under the plan are provided so long as—
(A) the organization makes such benefits available and accessible to each individual electing the plan within the plan service area with reasonable promptness and in a manner which assures continuity in the provision of benefits;
(B) when medically necessary the organization makes such benefits available and accessible 24 hours a day and 7 days a week;
(C) the plan provides for reimbursement with respect to services which are covered under subparagraphs (A) and (B) and which are provided to such an individual other than through the organization, if—
(i) the services were not emergency services (as defined in paragraph (3)), but (I) the services were medically necessary and immediately required because of an unforeseen illness, injury, or condition, and (II) it was not reasonable given the circumstances to obtain the services through the organization,
(ii) the services were renal dialysis services and were provided other than through the organization because the individual was temporarily out of the plan's service area, or
(iii) the services are maintenance care or post-stabilization care covered under the guidelines established under paragraph (2);
(D) the organization provides access to appropriate providers, including credentialed specialists, for medically necessary treatment and services; and
(E) coverage is provided for emergency services (as defined in paragraph (3)) without regard to prior authorization or the emergency care provider's contractual relationship with the organization.
(2) Guidelines respecting coordination of post-stabilization care
A Medicare+Choice plan shall comply with such guidelines as the Secretary may prescribe relating to promoting efficient and timely coordination of appropriate maintenance and post-stabilization care of an enrollee after the enrollee has been determined to be stable under
(3) "Emergency services" defined
In this subsection—
(A) In general
The term "emergency services" means, with respect to an individual enrolled with an organization, covered inpatient and outpatient services that—
(i) are furnished by a provider that is qualified to furnish such services under this subchapter, and
(ii) are needed to evaluate or stabilize an emergency medical condition (as defined in subparagraph (B)).
(B) Emergency medical condition based on prudent layperson
The term "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in—
(i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
(ii) serious impairment to bodily functions, or
(iii) serious dysfunction of any bodily organ or part.
(4) Assuring access to services in Medicare+Choice private fee-for-service plans
In addition to any other requirements under this part, in the case of a Medicare+Choice private fee-for-service plan, the organization offering the plan must demonstrate to the Secretary that the organization has sufficient number and range of health care professionals and providers willing to provide services under the terms of the plan. Subject to paragraphs (5) and (6), the Secretary shall find that an organization has met such requirement with respect to any category of health care professional or provider if, with respect to that category of provider—
(A) the plan has established payment rates for covered services furnished by that category of provider that are not less than the payment rates provided for under part A, part B, or both, for such services, or
(B) the plan has contracts or agreements (other than deemed contracts or agreements under subsection (j)(6)) with a sufficient number and range of providers within such category to meet the access standards in subparagraphs (A) through (E) of paragraph (1),
or a combination of both. The previous sentence shall not be construed as restricting the persons from whom enrollees under such a plan may obtain covered benefits, except that, if a plan entirely meets such requirement with respect to a category of health care professional or provider on the basis of subparagraph (B), it may provide for a higher beneficiary copayment in the case of health care professionals and providers of that category who do not have contracts or agreements (other than deemed contracts or agreements under subsection (j)(6)) to provide covered services under the terms of the plan.
(5) Requirement of certain nonemployer Medicare Advantage private fee-for-service plans to use contracts with providers
(A) In general
For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan not described in paragraph (1) or (2) of
(B) Network area defined
For purposes of subparagraph (A), the term "network area" means, for a plan year, an area which the Secretary identifies (in the Secretary's announcement of the proposed payment rates for the previous plan year under
(C) Network-based plan defined
(i) In general
For purposes of subparagraph (B), the term "network-based plan" means—
(I) except as provided in clause (ii), a Medicare Advantage plan that is a coordinated care plan described in
(II) a network-based MSA plan; and
(III) a reasonable cost reimbursement plan under
(ii) Exclusion of non-network regional PPOS
The term "network-based plan" shall not include an MA regional plan that, with respect to the area, meets access adequacy standards under this part substantially through the authority of section 422.112(a)(1)(ii) of title 42, Code of Federal Regulations, rather than through written contracts.
(6) Requirement of all employer Medicare Advantage private fee-for-service plans to use contracts with providers
For plan year 2011 and subsequent plan years, in the case of a Medicare Advantage private fee-for-service plan that is described in paragraph (1) or (2) of
(e) Quality improvement program
(1) In general
Each MA organization shall have an ongoing quality improvement program for the purpose of improving the quality of care provided to enrollees in each MA plan offered by such organization.
(2) Chronic care improvement programs
As part of the quality improvement program under paragraph (1), each MA organization shall have a chronic care improvement program. Each chronic care improvement program shall have a method for monitoring and identifying enrollees with multiple or sufficiently severe chronic conditions that meet criteria established by the organization for participation under the program.
(3) Data
(A) Collection, analysis, and reporting
(i) In general
Except as provided in clauses (ii) and (iii) with respect to plans described in such clauses and subject to subparagraph (B), as part of the quality improvement program under paragraph (1), each MA organization shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality. With respect to MA private fee-for-service plans and MSA plans, the requirements under the preceding sentence may not exceed the requirements under this subparagraph with respect to MA local plans that are preferred provider organization plans, except that, for plan year 2010, the limitation under clause (iii) shall not apply and such requirements shall apply only with respect to administrative claims data.
(ii) Special requirements for specialized MA plans for special needs individuals
In addition to the data required to be collected, analyzed, and reported under clause (i) and notwithstanding the limitations under subparagraph (B), as part of the quality improvement program under paragraph (1), each MA organization offering a specialized Medicare Advantage plan for special needs individuals shall provide for the collection, analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality with respect to the requirements described in paragraphs (2) through (5) of subsection (f). Such data may be based on claims data and shall be at the plan level.
(iii) Application to local preferred provider organizations and MA regional plans
Clause (i) shall apply to MA organizations with respect to MA local plans that are preferred provider organization plans and to MA regional plans only insofar as services are furnished by providers or services, physicians, and other health care practitioners and suppliers that have contracts with such organization to furnish services under such plans.
(iv) Definition of preferred provider organization plan
In this subparagraph, the term "preferred provider organization plan" means an MA plan that—
(I) has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(II) provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
(III) is offered by an organization that is not licensed or organized under State law as a health maintenance organization.
(B) Limitations
(i) Types of data
The Secretary shall not collect under subparagraph (A) data on quality, outcomes, and beneficiary satisfaction to facilitate consumer choice and program administration other than the types of data that were collected by the Secretary as of November 1, 2003.
(ii) Changes in types of data
Subject to subclause (iii), the Secretary may only change the types of data that are required to be submitted under subparagraph (A) after submitting to Congress a report on the reasons for such changes that was prepared in consultation with MA organizations and private accrediting bodies.
(iii) Construction
Nothing in the 2 subsection shall be construed as restricting the ability of the Secretary to carry out the duties under
(4) Treatment of accreditation
(A) In general
The Secretary shall provide that a Medicare+Choice organization is deemed to meet all the requirements described in any specific clause of subparagraph (B) if the organization is accredited (and periodically reaccredited) by a private accrediting organization under a process that the Secretary has determined assures that the accrediting organization applies and enforces standards that meet or exceed the standards established under
(B) Requirements described
The provisions described in this subparagraph are the following:
(i) Paragraphs (1) through (3) of this subsection (relating to quality improvement programs).
(ii) Subsection (b) (relating to antidiscrimination).
(iii) Subsection (d) (relating to access to services).
(iv) Subsection (h) (relating to confidentiality and accuracy of enrollee records).
(v) Subsection (i) (relating to information on advance directives).
(vi) Subsection (j) (relating to provider participation rules).
(vii) The requirements described in
(C) Timely action on applications
The Secretary shall determine, within 210 days after the date the Secretary receives an application by a private accrediting organization and using the criteria specified in
(D) Construction
Nothing in this paragraph shall be construed as limiting the authority of the Secretary under
(f) Grievance mechanism
Each Medicare+Choice organization must provide meaningful procedures for hearing and resolving grievances between the organization (including any entity or individual through which the organization provides health care services) and enrollees with Medicare+Choice plans of the organization under this part.
(g) Coverage determinations, reconsiderations, and appeals
(1) Determinations by organization
(A) In general
A Medicare+Choice organization shall have a procedure for making determinations regarding whether an individual enrolled with the plan of the organization under this part is entitled to receive a health service under this section and the amount (if any) that the individual is required to pay with respect to such service. Subject to paragraph (3), such procedures shall provide for such determination to be made on a timely basis.
(B) Explanation of determination
Such a determination that denies coverage, in whole or in part, shall be in writing and shall include a statement in understandable language of the reasons for the denial and a description of the reconsideration and appeals processes.
(2) Reconsiderations
(A) In general
The organization shall provide for reconsideration of a determination described in paragraph (1)(B) upon request by the enrollee involved. The reconsideration shall be within a time period specified by the Secretary, but shall be made, subject to paragraph (3), not later than 60 days after the date of the receipt of the request for reconsideration.
(B) Physician decision on certain reconsiderations
A reconsideration relating to a determination to deny coverage based on a lack of medical necessity shall be made only by a physician with appropriate expertise in the field of medicine which necessitates treatment who is other than a physician involved in the initial determination.
(3) Expedited determinations and reconsiderations
(A) Receipt of requests
(i) Enrollee requests
An enrollee in a Medicare+Choice plan may request, either in writing or orally, an expedited determination under paragraph (1) or an expedited reconsideration under paragraph (2) by the Medicare+Choice organization.
(ii) Physician requests
A physician, regardless whether the physician is affiliated with the organization or not, may request, either in writing or orally, such an expedited determination or reconsideration.
(B) Organization procedures
(i) In general
The Medicare+Choice organization shall maintain procedures for expediting organization determinations and reconsiderations when, upon request of an enrollee, the organization determines that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(ii) Expedition required for physician requests
In the case of a request for an expedited determination or reconsideration made under subparagraph (A)(ii), the organization shall expedite the determination or reconsideration if the request indicates that the application of the normal time frame for making a determination (or a reconsideration involving a determination) could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function.
(iii) Timely response
In cases described in clauses (i) and (ii), the organization shall notify the enrollee (and the physician involved, as appropriate) of the determination or reconsideration under time limitations established by the Secretary, but not later than 72 hours of the time of receipt of the request for the determination or reconsideration (or receipt of the information necessary to make the determination or reconsideration), or such longer period as the Secretary may permit in specified cases.
(4) Independent review of certain coverage denials
The Secretary shall contract with an independent, outside entity to review and resolve in a timely manner reconsiderations that affirm denial of coverage, in whole or in part. The provisions of
(5) Appeals
An enrollee with a Medicare+Choice plan of a Medicare+Choice organization under this part who is dissatisfied by reason of the enrollee's failure to receive any health service to which the enrollee believes the enrollee is entitled and at no greater charge than the enrollee believes the enrollee is required to pay is entitled, if the amount in controversy is $100 or more, to a hearing before the Secretary to the same extent as is provided in
(h) Confidentiality and accuracy of enrollee records
Insofar as a Medicare+Choice organization maintains medical records or other health information regarding enrollees under this part, the Medicare+Choice organization shall establish procedures—
(1) to safeguard the privacy of any individually identifiable enrollee information;
(2) to maintain such records and information in a manner that is accurate and timely; and
(3) to assure timely access of enrollees to such records and information.
(i) Information on advance directives
Each Medicare+Choice organization shall meet the requirement of
(j) Rules regarding provider participation
(1) Procedures
Insofar as a Medicare+Choice organization offers benefits under a Medicare+Choice plan through agreements with physicians, the organization shall establish reasonable procedures relating to the participation (under an agreement between a physician and the organization) of physicians under such a plan. Such procedures shall include—
(A) providing notice of the rules regarding participation,
(B) providing written notice of participation decisions that are adverse to physicians, and
(C) providing a process within the organization for appealing such adverse decisions, including the presentation of information and views of the physician regarding such decision.
(2) Consultation in medical policies
A Medicare+Choice organization shall consult with physicians who have entered into participation agreements with the organization regarding the organization's medical policy, quality, and medical management procedures.
(3) Prohibiting interference with provider advice to enrollees
(A) In general
Subject to subparagraphs (B) and (C), a Medicare+Choice organization (in relation to an individual enrolled under a Medicare+Choice plan offered by the organization under this part) shall not prohibit or otherwise restrict a covered health care professional (as defined in subparagraph (D)) from advising such an individual who is a patient of the professional about the health status of the individual or medical care or treatment for the individual's condition or disease, regardless of whether benefits for such care or treatment are provided under the plan, if the professional is acting within the lawful scope of practice.
(B) Conscience protection
Subparagraph (A) shall not be construed as requiring a Medicare+Choice plan to provide, reimburse for, or provide coverage of a counseling or referral service if the Medicare+Choice organization offering the plan—
(i) objects to the provision of such service on moral or religious grounds; and
(ii) in the manner and through the written instrumentalities such Medicare+Choice organization deems appropriate, makes available information on its policies regarding such service to prospective enrollees before or during enrollment and to enrollees within 90 days after the date that the organization or plan adopts a change in policy regarding such a counseling or referral service.
(C) Construction
Nothing in subparagraph (B) shall be construed to affect disclosure requirements under State law or under the Employee Retirement Income Security Act of 1974 [
(D) "Health care professional" defined
For purposes of this paragraph, the term "health care professional" means a physician (as defined in
(4) Limitations on physician incentive plans
(A) In general
No Medicare+Choice organization may operate any physician incentive plan (as defined in subparagraph (B)) unless the organization provides assurances satisfactory to the Secretary that the following requirements are met:
(i) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the organization.
(ii) If the plan places a physician or physician group at substantial financial risk (as determined by the Secretary) for services not provided by the physician or physician group, the organization provides stop-loss protection for the physician or group that is adequate and appropriate, based on standards developed by the Secretary that take into account the number of physicians placed at such substantial financial risk in the group or under the plan and the number of individuals enrolled with the organization who receive services from the physician or group.
(B) "Physician incentive plan" defined
In this paragraph, the term "physician incentive plan" means any compensation arrangement between a Medicare+Choice organization and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the organization under this part.
(5) Limitation on provider indemnification
A Medicare+Choice organization may not provide (directly or indirectly) for a health care professional, provider of services, or other entity providing health care services (or group of such professionals, providers, or entities) to indemnify the organization against any liability resulting from a civil action brought for any damage caused to an enrollee with a Medicare+Choice plan of the organization under this part by the organization's denial of medically necessary care.
(6) Special rules for Medicare+Choice private fee-for-service plans
For purposes of applying this part (including subsection (k)(1)) and
(A) the provider, professional, or other entity furnishes services that are covered under the plan to such an enrollee; and
(B) before providing such services, the provider, professional, or other entity—
(i) has been informed of the individual's enrollment under the plan, and
(ii) either—
(I) has been informed of the terms and conditions of payment for such services under the plan, or
(II) is given a reasonable opportunity to obtain information concerning such terms and conditions,
in a manner reasonably designed to effect informed agreement by a provider.
The previous sentence shall only apply in the absence of an explicit agreement between such a provider, professional, or other entity and the Medicare+Choice organization.
(7) Promotion of e-prescribing by MA plans
(A) In general
An MA–PD plan may provide for a separate payment or otherwise provide for a differential payment for a participating physician that prescribes covered part D drugs in accordance with an electronic prescription drug program that meets standards established under
(B) Considerations
Such payment may take into consideration the costs of the physician in implementing such a program and may also be increased for those participating physicians who significantly increase—
(i) formulary compliance;
(ii) lower cost, therapeutically equivalent alternatives;
(iii) reductions in adverse drug interactions; and
(iv) efficiencies in filing prescriptions through reduced administrative costs.
(C) Structure
Additional or increased payments under this subsection may be structured in the same manner as medication therapy management fees are structured under section 1395w–104(c)(2)(E) 1 of this title.
(k) Treatment of services furnished by certain providers
(1) In general
Except as provided in paragraph (2), a physician or other entity (other than a provider of services) that does not have a contract establishing payment amounts for services furnished to an individual enrolled under this part with a Medicare+Choice organization described in
(2) Application to Medicare+Choice private fee-for-service plans
(A) Balance billing limits under Medicare+Choice private fee-for-service plans in case of contract providers
(i) In general
In the case of an individual enrolled in a Medicare+Choice private fee-for-service plan under this part, a physician, provider of services, or other entity that has a contract (including through the operation of subsection (j)(6)) establishing a payment rate for services furnished to the enrollee shall accept as payment in full for covered services under this subchapter that are furnished to such an individual an amount not to exceed (including any deductibles, coinsurance, copayments, or balance billing otherwise permitted under the plan) an amount equal to 115 percent of such payment rate.
(ii) Procedures to enforce limits
The Medicare+Choice organization that offers such a plan shall establish procedures, similar to the procedures described in
(iii) Assuring enforcement
If the Medicare+Choice organization fails to establish and enforce procedures required under clause (ii), the organization is subject to intermediate sanctions under
(B) Enrollee liability for noncontract providers
For provision—
(i) establishing minimum payment rate in the case of noncontract providers under a Medicare+Choice private fee-for-service plan, see subsection (a)(2); or
(ii) limiting enrollee liability in the case of covered services furnished by such providers, see paragraph (1) and
(C) Information on beneficiary liability
(i) In general
Each Medicare+Choice organization that offers a Medicare+Choice private fee-for-service plan shall provide that enrollees under the plan who are furnished services for which payment is sought under the plan are provided an appropriate explanation of benefits (consistent with that provided under parts A and B and, if applicable, under medicare supplemental policies) that includes a clear statement of the amount of the enrollee's liability (including any liability for balance billing consistent with this subsection) with respect to payments for such services.
(ii) Advance notice before receipt of inpatient hospital services and certain other services
In addition, such organization shall, in its terms and conditions of payments to hospitals for inpatient hospital services and for other services identified by the Secretary for which the amount of the balance billing under subparagraph (A) could be substantial, require the hospital to provide to the enrollee, before furnishing such services and if the hospital imposes balance billing under subparagraph (A)—
(I) notice of the fact that balance billing is permitted under such subparagraph for such services, and
(II) a good faith estimate of the likely amount of such balance billing (if any), with respect to such services, based upon the presenting condition of the enrollee.
(l) Return to home skilled nursing facilities for covered post-hospital extended care services
(1) Ensuring return to home SNF
(A) In general
In providing coverage of post-hospital extended care services, a Medicare+Choice plan shall provide for such coverage through a home skilled nursing facility if the following conditions are met:
(i) Enrollee election
The enrollee elects to receive such coverage through such facility.
(ii) SNF agreement
The facility has a contract with the Medicare+Choice organization for the provision of such services, or the facility agrees to accept substantially similar payment under the same terms and conditions that apply to similarly situated skilled nursing facilities that are under contract with the Medicare+Choice organization for the provision of such services and through which the enrollee would otherwise receive such services.
(B) Manner of payment to home SNF
The organization shall provide payment to the home skilled nursing facility consistent with the contract or the agreement described in subparagraph (A)(ii), as the case may be.
(2) No less favorable coverage
The coverage provided under paragraph (1) (including scope of services, cost-sharing, and other criteria of coverage) shall be no less favorable to the enrollee than the coverage that would be provided to the enrollee with respect to a skilled nursing facility the post-hospital extended care services of which are otherwise covered under the Medicare+Choice plan.
(3) Rule of construction
Nothing in this subsection shall be construed to do the following:
(A) To require coverage through a skilled nursing facility that is not otherwise qualified to provide benefits under part A for medicare beneficiaries not enrolled in a Medicare+Choice plan.
(B) To prevent a skilled nursing facility from refusing to accept, or imposing conditions upon the acceptance of, an enrollee for the receipt of post-hospital extended care services.
(4) Definitions
In this subsection:
(A) Home skilled nursing facility
The term "home skilled nursing facility" means, with respect to an enrollee who is entitled to receive post-hospital extended care services under a Medicare+Choice plan, any of the following skilled nursing facilities:
(i) SNF residence at time of admission
The skilled nursing facility in which the enrollee resided at the time of admission to the hospital preceding the receipt of such post-hospital extended care services.
(ii) SNF in continuing care retirement community
A skilled nursing facility that is providing such services through a continuing care retirement community (as defined in subparagraph (B)) which provided residence to the enrollee at the time of such admission.
(iii) SNF residence of spouse at time of discharge
The skilled nursing facility in which the spouse of the enrollee is residing at the time of discharge from such hospital.
(B) Continuing care retirement community
The term "continuing care retirement community" means, with respect to an enrollee in a Medicare+Choice plan, an arrangement under which housing and health-related services are provided (or arranged) through an organization for the enrollee under an agreement that is effective for the life of the enrollee or for a specified period.
(m) Provision of additional telehealth benefits
(1) MA plan option
For plan year 2020 and subsequent plan years, subject to the requirements of paragraph (3), an MA plan may provide additional telehealth benefits (as defined in paragraph (2)) to individuals enrolled under this part.
(2) Additional telehealth benefits defined
(A) In general
For purposes of this subsection and
(i) Definition
The term "additional telehealth benefits" means services—
(I) for which benefits are available under part B, including services for which payment is not made under
(II) that are identified for such year as clinically appropriate to furnish using electronic information and telecommunications technology when a physician (as defined in
(ii) Exclusion of capital and infrastructure costs and investments
The term "additional telehealth benefits" does not include capital and infrastructure costs and investments relating to such benefits.
(B) Public comment
Not later than November 30, 2018, the Secretary shall solicit comments on—
(i) what types of items and services (including those provided through supplemental health care benefits, such as remote patient monitoring, secure messaging, store and forward technologies, and other non-face-to-face communication) should be considered to be additional telehealth benefits; and
(ii) the requirements for the provision or furnishing of such benefits (such as training and coordination requirements).
(3) Requirements for additional telehealth benefits
The Secretary shall specify requirements for the provision or furnishing of additional telehealth benefits, including with respect to the following:
(A) Physician or practitioner qualifications (other than licensure) and other requirements such as specific training.
(B) Factors necessary for the coordination of such benefits with other items and services including those furnished in-person.
(C) Such other areas as determined by the Secretary.
(4) Enrollee choice
If an MA plan provides a service as an additional telehealth benefit (as defined in paragraph (2))—
(A) the MA plan shall also provide access to such benefit through an in-person visit (and not only as an additional telehealth benefit); and
(B) an individual enrollee shall have discretion as to whether to receive such service through the in-person visit or as an additional telehealth benefit.
(5) Treatment under MA
For purposes of this subsection and
(6) Construction
Nothing in this subsection shall be construed as affecting the requirement under subsection (a)(1) that MA plans provide enrollees with items and services (other than hospice care) for which benefits are available under parts A and B, including benefits available under
(n) Provision of information relating to the safe disposal of certain prescription drugs
(1) In general
In the case of an individual enrolled under an MA or MA–PD plan who is furnished an in-home health risk assessment on or after January 1, 2021, such plan shall ensure that such assessment includes information on the safe disposal of prescription drugs that are controlled substances that meets the criteria established under paragraph (2). Such information shall include information on drug takeback programs that meet such requirements determined appropriate by the Secretary and information on in-home disposal.
(2) Criteria
The Secretary shall, through rulemaking, establish criteria the Secretary determines appropriate with respect to information provided to an individual to ensure that such information sufficiently educates such individual on the safe disposal of prescription drugs that are controlled substances.
(Aug. 14, 1935, ch. 531, title XVIII, §1852, as added
Editorial Notes
References in Text
Section 2702 of the Public Health Service Act, referred to in subsec. (b)(1), is section 2702 of act July 1, 1944, which was classified to
The Employee Retirement Income Security Act of 1974, referred to in subsec. (j)(3)(C), is
Amendments
2022—Subsec. (a)(1)(B)(iv)(VII), (VIII).
2020—Subsec. (a)(1)(B)(iv)(IV), (V).
Subsec. (a)(1)(B)(iv)(VI).
Subsec. (a)(1)(B)(iv)(VII).
Subsec. (a)(1)(B)(v).
Subsec. (a)(1)(B)(vi).
2018—Subsec. (a)(1)(B)(i).
Subsec. (a)(3)(A).
Subsec. (a)(3)(D).
Subsec. (m).
Subsec. (n).
2016—Subsec. (a)(1)(B)(i).
Subsec. (b)(1).
2010—Subsec. (a)(1)(B)(i).
Subsec. (a)(1)(B)(iii) to (v).
2008—Subsec. (a)(7).
Subsec. (d)(4).
Subsec. (d)(4)(B).
Subsec. (d)(5).
Subsec. (d)(6).
Subsec. (e)(1).
Subsec. (e)(3)(A)(i).
Subsec. (e)(3)(A)(ii).
Subsec. (e)(3)(A)(iii).
Subsec. (e)(4)(C).
2003—Subsec. (a)(1).
"(A) those items and services (other than hospice care) for which benefits are available under parts A and B of this subchapter to individuals residing in the area served by the plan, and
"(B) additional benefits required under
Subsec. (a)(2)(C).
Subsec. (a)(3)(C).
Subsec. (a)(5).
Subsec. (a)(6).
Subsec. (b)(1)(A).
Subsec. (c)(1)(I).
Subsec. (d)(4).
Subsec. (d)(4)(B).
Subsec. (e).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(3).
Subsec. (e)(4)(B)(i).
Subsec. (e)(4)(B)(vii).
Subsec. (e)(5).
Subsec. (g)(5).
Subsec. (j)(4)(A).
Subsec. (j)(4)(A)(ii).
Subsec. (j)(4)(A)(iii).
Subsec. (j)(7).
Subsec. (k)(1).
2000—Subsec. (a)(2)(C).
Subsec. (a)(5).
Subsec. (a)(5)(A).
Subsec. (a)(5)(B).
Subsec. (e)(2)(A), (B).
Subsec. (e)(5).
Subsec. (g)(4).
Subsec. (l).
1999—Subsec. (a)(3)(A).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(D).
Subsec. (e)(4).
Subsec. (g)(1)(B).
Subsec. (g)(3)(B)(ii).
Subsec. (h)(2).
Subsec. (k)(2)(C)(ii).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2020 Amendment
Amendment by section 3713(c) of
Effective Date of 2016 Amendment
Amendment by section 17006(a)(2)(A) of
Amendment by section 17006(c)(1) of
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 125(b)(6) of
Effective and Termination Dates of 2003 Amendment
Amendment by sections 221(d)(3) and 222(a)(2), (3), (h), (l)(1) of
Amendment by section 948(b)(2) of
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title V, §521(b)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(B)] of
Implementation of 2020 Amendment
MedPAC Study
"(1)
"(A) on the scope of additional benefits provided under the Medicare+Choice program;
"(B) on the administrative and other costs incurred by Medicare+Choice organizations; and
"(C) on the contractual relationships between such organizations and skilled nursing facilities.
"(2)
Transitional Pass-Through of Additional Costs Under Medicare+Choice Program for 2000
1 See References in Text note below.
2 So in original. Probably should be "this".
§1395w–23. Payments to Medicare+Choice organizations
(a) Payments to organizations
(1) Monthly payments
(A) In general
Under a contract under
(i) Payment before 2006
For years before 2006, the payment amount shall be equal to 1/12 of the annual MA capitation rate (as calculated under subsection (c)(1)) with respect to that individual for that area, adjusted under subparagraph (C) and reduced by the amount of any reduction elected under
(ii) Payment for original fee-for-service benefits beginning with 2006
For years beginning with 2006, the amount specified in subparagraph (B).
(B) Payment amount for original fee-for-service benefits beginning with 2006
(i) Payment of bid for plans with bids below benchmark
In the case of a plan for which there are average per capita monthly savings described in
(ii) Payment of benchmark for plans with bids at or above benchmark
In the case of a plan for which there are no average per capita monthly savings described in
(iii) Payment of benchmark for MSA plans
Notwithstanding clauses (i) and (ii), in the case of an MSA plan, the amount specified in this subparagraph is equal to the MA area-specific non-drug monthly benchmark amount, adjusted under subparagraph (C).
(iv) Authority to apply frailty adjustment under PACE payment rules for certain specialized MA plans for special needs individuals
(I) In general
Notwithstanding the preceding provisions of this paragraph, for plan year 2011 and subsequent plan years, in the case of a plan described in subclause (II), the Secretary may apply the payment rules under
(II) Plan described
A plan described in this subclause is a specialized MA plan for special needs individuals described in
(C) Demographic adjustment, including adjustment for health status
(i) In general
Subject to subparagraph (I), the Secretary shall adjust the payment amount under subparagraph (A)(i) and the amount specified under subparagraph (B)(i), (B)(ii), and (B)(iii) for such risk factors as age, disability status, gender, institutional status, and such other factors as the Secretary determines to be appropriate, including adjustment for health status under paragraph (3), so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such adjustment factors if such changes will improve the determination of actuarial equivalence.
(ii) Application of coding adjustment
For 2006 and each subsequent year:
(I) In applying the adjustment under clause (i) for health status to payment amounts, the Secretary shall ensure that such adjustment reflects changes in treatment and coding practices in the fee-for-service sector and reflects differences in coding patterns between Medicare Advantage plans and providers under part 1 A and B to the extent that the Secretary has identified such differences.
(II) In order to ensure payment accuracy, the Secretary shall annually conduct an analysis of the differences described in subclause (I). The Secretary shall complete such analysis by a date necessary to ensure that the results of such analysis are incorporated on a timely basis into the risk scores for 2008 and subsequent years. In conducting such analysis, the Secretary shall use data submitted with respect to 2004 and subsequent years, as available and updated as appropriate.
(III) In calculating each year's adjustment, the adjustment factor shall be for 2014, not less than the adjustment factor applied for 2010, plus 1.5 percentage points; for each of years 2015 through 2018, not less than the adjustment factor applied for the previous year, plus 0.25 percentage point; and for 2019 and each subsequent year, not less than 5.9 percent.
(IV) Such adjustment shall be applied to risk scores until the Secretary implements risk adjustment using Medicare Advantage diagnostic, cost, and use data.
(iii) Improvements to risk adjustment for special needs individuals with chronic health conditions
(I) In general
For 2011 and subsequent years, for purposes of the adjustment under clause (i) with respect to individuals described in subclause (II), the Secretary shall use a risk score that reflects the known underlying risk profile and chronic health status of similar individuals. Such risk score shall be used instead of the default risk score for new enrollees in Medicare Advantage plans that are not specialized MA plans for special needs individuals (as defined in
(II) Individuals described
An individual described in this subclause is a special needs individual described in subsection (b)(6)(B)(iii) 2 who enrolls in a specialized MA plan for special needs individuals on or after January 1, 2011.
(III) Evaluation
For 2011 and periodically thereafter, the Secretary shall evaluate and revise the risk adjustment system under this subparagraph in order to, as accurately as possible, account for higher medical and care coordination costs associated with frailty, individuals with multiple, comorbid chronic conditions, and individuals with a diagnosis of mental illness, and also to account for costs that may be associated with higher concentrations of beneficiaries with those conditions.
(IV) Publication of evaluation and revisions
The Secretary shall publish, as part of an announcement under subsection (b), a description of any evaluation conducted under subclause (III) during the preceding year and any revisions made under such subclause as a result of such evaluation.
(D) Separate payment for Federal drug subsidies
In the case of an enrollee in an MA–PD plan, the MA organization offering such plan also receives—
(i) subsidies under
(ii) reimbursement for premium and cost-sharing reductions for low-income individuals under
(E) Payment of rebate for plans with bids below benchmark
In the case of a plan for which there are average per capita monthly savings described in
(F) Adjustment for intra-area variations
(i) Intra-regional variations
In the case of payment with respect to an MA regional plan for an MA region, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such region.
(ii) Intra-service area variations
In the case of payment with respect to an MA local plan for a service area that covers more than one MA local area, the Secretary shall also adjust the amounts specified under subparagraphs (B)(i) and (B)(ii) in a manner to take into account variations in MA local payment rates under this part among the different MA local areas included in such service area.
(G) Adjustment relating to risk adjustment
The Secretary shall adjust payments with respect to MA plans as necessary to ensure that—
(i) the sum of—
(I) the monthly payment made under subparagraph (A)(ii); and
(II) the MA monthly basic beneficiary premium under
(ii) the unadjusted MA statutory non-drug monthly bid amount, adjusted in the manner described in subparagraph (C) and, for an MA regional plan, subparagraph (F).
(H) Special rule for end-stage renal disease
The Secretary shall establish separate rates of payment to a Medicare+Choice organization with respect to classes of individuals determined to have end-stage renal disease and enrolled in a Medicare+Choice plan of the organization. Such rates of payment shall be actuarially equivalent to rates that would have been paid with respect to other enrollees in the MA payment area (or such other area as specified by the Secretary) under the provisions of this section as in effect before December 8, 2003. In accordance with regulations, the Secretary shall provide for the application of the seventh sentence of
(I) Improvements to risk adjustment for 2019 and subsequent years
(i) In general
In order to determine the appropriate adjustment for health status under subparagraph (C)(i), the following shall apply:
(I) Taking into account total number of diseases or conditions
The Secretary shall take into account the total number of diseases or conditions of an individual enrolled in an MA plan. The Secretary shall make an additional adjustment under such subparagraph as the number of diseases or conditions of an individual increases.
(II) Using at least 2 years of diagnostic data
The Secretary may use at least 2 years of diagnosis data.
(III) Providing separate adjustments for dual eligible individuals
With respect to individuals who are dually eligible for benefits under this subchapter and subchapter XIX, the Secretary shall make separate adjustments for each of the following:
(aa) Full-benefit dual eligible individuals (as defined in
(bb) Such individuals not described in item (aa).
(IV) Evaluation of mental health and substance use disorders
The Secretary shall evaluate the impact of including additional diagnosis codes related to mental health and substance use disorders in the risk adjustment model.
(V) Evaluation of chronic kidney disease
The Secretary shall evaluate the impact of including the severity of chronic kidney disease in the risk adjustment model.
(VI) Evaluation of payment rates for end-stage renal disease
The Secretary shall evaluate whether other factors (in addition to those described in subparagraph (H)) should be taken into consideration when computing payment rates under such subparagraph.
(ii) Phased-in implementation
The Secretary shall phase-in any changes to risk adjustment payment amounts under subparagraph (C)(i) under this subparagraph over a 3-year period, beginning with 2019, with such changes being fully implemented for 2022 and subsequent years.
(iii) Opportunity for review and public comment
The Secretary shall provide an opportunity for review of the proposed changes to such risk adjustment payment amounts under this subparagraph and a public comment period of not less than 60 days before implementing such changes.
(2) Adjustment to reflect number of enrollees
(A) In general
The amount of payment under this subsection may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled with an organization under this part and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment.
(B) Special rule for certain enrollees
(i) In general
Subject to clause (ii), the Secretary may make retroactive adjustments under subparagraph (A) to take into account individuals enrolled during the period beginning on the date on which the individual enrolls with a Medicare+Choice organization under a plan operated, sponsored, or contributed to by the individual's employer or former employer (or the employer or former employer of the individual's spouse) and ending on the date on which the individual is enrolled in the organization under this part, except that for purposes of making such retroactive adjustments under this subparagraph, such period may not exceed 90 days.
(ii) Exception
No adjustment may be made under clause (i) with respect to any individual who does not certify that the organization provided the individual with the disclosure statement described in
(3) Establishment of risk adjustment factors
(A) Report
The Secretary shall develop, and submit to Congress by not later than March 1, 1999, a report on the method of risk adjustment of payment rates under this section, to be implemented under subparagraph (C), that accounts for variations in per capita costs based on health status. Such report shall include an evaluation of such method by an outside, independent actuary of the actuarial soundness of the proposal.
(B) Data collection
In order to carry out this paragraph, the Secretary shall require Medicare+Choice organizations (and eligible organizations with risk-sharing contracts under
(C) Initial implementation
(i) In general
The Secretary shall first provide for implementation of a risk adjustment methodology that accounts for variations in per capita costs based on health status and other demographic factors for payments by no later than January 1, 2000.
(ii) Phase-in
Except as provided in clause (iv), such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation rates for health status applies to—
(I) 10 percent of 1/12 of the annual Medicare+Choice capitation rate in 2000 and each succeeding year through 2003;
(II) 30 percent of such capitation rate in 2004;
(III) 50 percent of such capitation rate in 2005;
(IV) 75 percent of such capitation rate in 2006; and
(V) 100 percent of such capitation rate in 2007 and succeeding years.
(iii) Data for risk adjustment methodology
Such risk adjustment methodology for 2004 and each succeeding year, shall be based on data from inpatient hospital and ambulatory settings.
(iv) Full implementation of risk adjustment for congestive heart failure enrollees for 2001
(I) Exemption from phase-in
Subject to subclause (II), the Secretary shall fully implement the risk adjustment methodology described in clause (i) with respect to each individual who has had a qualifying congestive heart failure inpatient diagnosis (as determined by the Secretary under such risk adjustment methodology) during the period beginning on July 1, 1999, and ending on June 30, 2000, and who is enrolled in a coordinated care plan that is the only coordinated care plan offered on January 1, 2001, in the service area of the individual.
(II) Period of application
Subclause (I) shall only apply during the 1-year period beginning on January 1, 2001.
(D) Uniform application to all types of plans
Subject to
(4) Payment rule for federally qualified health center services
If an individual who is enrolled with an MA plan under this part receives a service from a federally qualified health center that has a written agreement with the MA organization that offers such plan for providing such a service (including any agreement required under
(A) the Secretary shall pay the amount determined under
(B) the Secretary shall not reduce the amount of the monthly payments under this subsection as a result of the application of subparagraph (A).
(b) Annual announcement of payment rates
(1) Annual announcements
(A) For 2005
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the second Monday in May of 2004, with respect to each MA payment area, the following:
(i) MA capitation rates
The annual MA capitation rate for each MA payment area for 2005.
(ii) Adjustment factors
The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in 2005.
(B) For 2006 and subsequent years
For a year after 2005—
(i) Initial announcement
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), not later than the first Monday in April before the calendar year concerned, with respect to each MA payment area, the following:
(I) MA capitation rates; MA local area benchmark
The annual MA capitation rate for each MA payment area for the year.
(II) Adjustment factors
The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in such year.
(ii) Regional benchmark announcement
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each MA region and each MA regional plan for which a bid was submitted under
(iii) Benchmark announcement for CCA local areas
The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each CCA area (as defined in section 1395w–29(b)(1)(A) 2 of this title), the CCA non-drug monthly benchmark amount under section 1395w–29(e)(1) 2 of this title for that area for the year involved.
(2) Advance notice of methodological changes
At least 45 days (or, in 2017 and each subsequent year, at least 60 days) before making the announcement under paragraph (1) for a year, the Secretary shall provide for notice to Medicare+Choice organizations of proposed changes to be made in the methodology from the methodology and assumptions used in the previous announcement and shall provide such organizations an opportunity (in 2017 and each subsequent year, of no less than 30 days) to comment on such proposed changes.
(3) Explanation of assumptions
In each announcement made under paragraph (1), the Secretary shall include an explanation of the assumptions and changes in methodology used in such announcement.
(4) Continued computation and publication of county-specific per capita fee-for-service expenditure information
The Secretary, through the Chief Actuary of the Centers for Medicare & Medicaid Services, shall provide for the computation and publication, on an annual basis beginning with 2001 at the time of publication of the annual Medicare+Choice capitation rates under paragraph (1), of the following information for the original medicare fee-for-service program under parts A and B (exclusive of individuals eligible for coverage under
(A) Total expenditures per capita per month, computed separately for part A and for part B.
(B) The expenditures described in subparagraph (A) reduced by the best estimate of the expenditures (such as graduate medical education and disproportionate share hospital payments) not related to the payment of claims.
(C) The average risk factor for the covered population based on diagnoses reported for medicare inpatient services, using the same methodology as is expected to be applied in making payments under subsection (a).
(D) Such average risk factor based on diagnoses for inpatient and other sites of service, using the same methodology as is expected to be applied in making payments under subsection (a).
(c) Calculation of annual Medicare+Choice capitation rates
(1) In general
For purposes of this part, subject to paragraphs (6)(C) and (7), each annual Medicare+Choice capitation rate, for a Medicare+Choice payment area that is an MA local area for a contract year consisting of a calendar year, is equal to the largest of the amounts specified in the following subparagraph (A), (B), (C), or (D):
(A) Blended capitation rate
For a year before 2005, the sum of—
(i) the area-specific percentage (as specified under paragraph (2) for the year) of the annual area-specific Medicare+Choice capitation rate for the Medicare+Choice payment area, as determined under paragraph (3) for the year, and
(ii) the national percentage (as specified under paragraph (2) for the year) of the input-price-adjusted annual national Medicare+Choice capitation rate, as determined under paragraph (4) for the year,
multiplied (for a year other than 2004) by the budget neutrality adjustment factor determined under paragraph (5).
(B) Minimum amount
12 multiplied by the following amount:
(i) For 1998, $367 (but not to exceed, in the case of an area outside the 50 States and the District of Columbia, 150 percent of the annual per capita rate of payment for 1997 determined under
(ii) For 1999 and 2000, the minimum amount determined under clause (i) or this clause, respectively, for the preceding year, increased by the national per capita Medicare+Choice growth percentage described in paragraph (6)(A) applicable to 1999 or 2000, respectively.
(iii)(I) Subject to subclause (II), for 2001, for any area in a Metropolitan Statistical Area with a population of more than 250,000, $525, and for any other area $475.
(II) In the case of an area outside the 50 States and the District of Columbia, the amount specified in this clause shall not exceed 120 percent of the amount determined under clause (ii) for such area for 2000.
(iv) For 2002, 2003, and 2004, the minimum amount specified in this clause (or clause (iii)) for the preceding year increased by the national per capita Medicare+Choice growth percentage, described in paragraph (6)(A) for that succeeding year.
(C) Minimum percentage increase
(i) For 1998, 102 percent of the annual per capita rate of payment for 1997 determined under
(ii) For 1999 and 2000, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
(iii) For 2001, 103 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for 2000.
(iv) For 2002 and 2003, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.
(v) For 2004 and each succeeding year, the greater of—
(I) 102 percent of the annual MA capitation rate under this paragraph for the area for the previous year; or
(II) the annual MA capitation rate under this paragraph for the area for the previous year increased by the national per capita MA growth percentage, described in paragraph (6) for that succeeding year, but not taking into account any adjustment under paragraph (6)(C) for a year before 2004.
(D) 100 percent of fee-for-service costs
(i) In general
For each year specified in clause (ii), the adjusted average per capita cost for the year involved, determined under
(ii) Periodic rebasing
The provisions of clause (i) shall apply for 2004 and for subsequent years as the Secretary shall specify (but not less than once every 3 years).
(iii) Inclusion of costs of VA and DOD military facility services to medicare-eligible beneficiaries
In determining the adjusted average per capita cost under clause (i) for a year, such cost shall be adjusted to include the Secretary's estimate, on a per capita basis, of the amount of additional payments that would have been made in the area involved under this subchapter if individuals entitled to benefits under this subchapter had not received services from facilities of the Department of Defense or the Department of Veterans Affairs.
(2) Area-specific and national percentages
For purposes of paragraph (1)(A)—
(A) for 1998, the "area-specific percentage" is 90 percent and the "national percentage" is 10 percent,
(B) for 1999, the "area-specific percentage" is 82 percent and the "national percentage" is 18 percent,
(C) for 2000, the "area-specific percentage" is 74 percent and the "national percentage" is 26 percent,
(D) for 2001, the "area-specific percentage" is 66 percent and the "national percentage" is 34 percent,
(E) for 2002, the "area-specific percentage" is 58 percent and the "national percentage" is 42 percent, and
(F) for a year after 2002, the "area-specific percentage" is 50 percent and the "national percentage" is 50 percent.
(3) Annual area-specific Medicare+Choice capitation rate
(A) In general
For purposes of paragraph (1)(A), subject to subparagraphs (B) and (E), the annual area-specific Medicare+Choice capitation rate for a Medicare+Choice payment area—
(i) for 1998 is, subject to subparagraph (D), the annual per capita rate of payment for 1997 determined under
(ii) for a subsequent year is the annual area-specific Medicare+Choice capitation rate for the previous year determined under this paragraph for the area, increased by the national per capita Medicare+Choice growth percentage for such subsequent year.
(B) Removal of medical education from calculation of adjusted average per capita cost
(i) In general
In determining the area-specific Medicare+Choice capitation rate under subparagraph (A) for a year (beginning with 1998), the annual per capita rate of payment for 1997 determined under
(ii) Applicable percent
For purposes of clause (i), the applicable percent for—
(I) 1998 is 20 percent,
(II) 1999 is 40 percent,
(III) 2000 is 60 percent,
(IV) 2001 is 80 percent, and
(V) a succeeding year is 100 percent.
(C) Payment adjustment
(i) In general
Subject to clause (ii), the payment adjustments described in this subparagraph are payment adjustments which the Secretary estimates were payable during 1997—
(I) for the indirect costs of medical education under
(II) for direct graduate medical education costs under
(ii) Treatment of payments covered under State hospital reimbursement system
To the extent that the Secretary estimates that an annual per capita rate of payment for 1997 described in clause (i) reflects payments to hospitals reimbursed under
(D) Treatment of areas with highly variable payment rates
In the case of a Medicare+Choice payment area for which the annual per capita rate of payment determined under
(E) Inclusion of costs of DOD and VA military facility services to Medicare-eligible beneficiaries
In determining the area-specific MA capitation rate under subparagraph (A) for a year (beginning with 2004), the annual per capita rate of payment for 1997 determined under
(4) Input-price-adjusted annual national Medicare+Choice capitation rate
(A) In general
For purposes of paragraph (1)(A), the input-price-adjusted annual national Medicare+Choice capitation rate for a Medicare+Choice payment area for a year is equal to the sum, for all the types of medicare services (as classified by the Secretary), of the product (for each such type of service) of—
(i) the national standardized annual Medicare+Choice capitation rate (determined under subparagraph (B)) for the year,
(ii) the proportion of such rate for the year which is attributable to such type of services, and
(iii) an index that reflects (for that year and that type of services) the relative input price of such services in the area compared to the national average input price of such services.
In applying clause (iii), the Secretary may, subject to subparagraph (C), apply those indices under this subchapter that are used in applying (or updating) national payment rates for specific areas and localities.
(B) National standardized annual Medicare+Choice capitation rate
In subparagraph (A)(i), the "national standardized annual Medicare+Choice capitation rate" for a year is equal to—
(i) the sum (for all Medicare+Choice payment areas) of the product of—
(I) the annual area-specific Medicare+Choice capitation rate for that year for the area under paragraph (3), and
(II) the average number of medicare beneficiaries residing in that area in the year, multiplied by the average of the risk factor weights used to adjust payments under subsection (a)(1)(A) for such beneficiaries in such area; divided by
(ii) the sum of the products described in clause (i)(II) for all areas for that year.
(C) Special rules for 1998
In applying this paragraph for 1998—
(i) medicare services shall be divided into 2 types of services: part A services and part B services;
(ii) the proportions described in subparagraph (A)(ii)—
(I) for part A services shall be the ratio (expressed as a percentage) of the national average annual per capita rate of payment for part A for 1997 to the total national average annual per capita rate of payment for parts A and B for 1997, and
(II) for part B services shall be 100 percent minus the ratio described in subclause (I);
(iii) for part A services, 70 percent of payments attributable to such services shall be adjusted by the index used under
(iv) for part B services—
(I) 66 percent of payments attributable to such services shall be adjusted by the index of the geographic area factors under
(II) of the remaining 34 percent of the amount of such payments, 40 percent shall be adjusted by the index described in clause (iii); and
(v) the index values shall be computed based only on the beneficiary population who are 65 years of age or older and who are not determined to have end stage renal disease.
The Secretary may continue to apply the rules described in this subparagraph (or similar rules) for 1999.
(5) Payment adjustment budget neutrality factor
For purposes of paragraph (1)(A), for each year (other than 2004), the Secretary shall determine a budget neutrality adjustment factor so that the aggregate of the payments under this part (other than those attributable to subsections (a)(3)(C)(iv), (a)(4), and (i)) shall equal the aggregate payments that would have been made under this part if payment were based entirely on area-specific capitation rates.
(6) "National per capita Medicare+Choice growth percentage" defined
(A) In general
In this part, the "national per capita Medicare+Choice growth percentage" for a year is the percentage determined by the Secretary, by March 1st before the beginning of the year involved, to reflect the Secretary's estimate of the projected per capita rate of growth in expenditures under this subchapter for an individual entitled to benefits under part A and enrolled under part B, excluding expenditures attributable to subsections (a)(7) and (o) of
(B) Adjustment
The number of percentage points specified in this subparagraph is—
(i) for 1998, 0.8 percentage points,
(ii) for 1999, 0.5 percentage points,
(iii) for 2000, 0.5 percentage points,
(iv) for 2001, 0.5 percentage points,
(v) for 2002, 0.3 percentage points, and
(vi) for a year after 2002, 0 percentage points.
(C) Adjustment for over or under projection of national per capita Medicare+Choice growth percentage
Beginning with rates calculated for 1999, before computing rates for a year as described in paragraph (1), the Secretary shall adjust all area-specific and national Medicare+Choice capitation rates (and beginning in 2000, the minimum amount) for the previous year for the differences between the projections of the national per capita Medicare+Choice growth percentage for that year and previous years and the current estimate of such percentage for such years, except that for purposes of paragraph (1)(C)(v)(II), no such adjustment shall be made for a year before 2004.
(7) Adjustment for national coverage determinations and legislative changes in benefits
If the Secretary makes a determination with respect to coverage under this subchapter or there is a change in benefits required to be provided under this part that the Secretary projects will result in a significant increase in the costs to Medicare+Choice of providing benefits under contracts under this part (for periods after any period described in
(d) MA payment area; MA local area; MA region defined
(1) MA payment area
In this part, except as provided in this subsection, the term "MA payment area" means—
(A) with respect to an MA local plan, an MA local area (as defined in paragraph (2)); and
(B) with respect to an MA regional plan, an MA region (as established under
(2) MA local area
The term "MA local area" means a county or equivalent area specified by the Secretary.
(3) Rule for ESRD beneficiaries
In the case of individuals who are determined to have end stage renal disease, the Medicare+Choice payment area shall be a State or such other payment area as the Secretary specifies.
(4) Geographic adjustment
(A) In general
Upon written request of the chief executive officer of a State for a contract year (beginning after 1998) made by not later than February 1 of the previous year, the Secretary shall make a geographic adjustment to a Medicare+Choice payment area in the State otherwise determined under paragraph (1) for MA local plans—
(i) to a single statewide Medicare+Choice payment area,
(ii) to the metropolitan based system described in subparagraph (C), or
(iii) to consolidating into a single Medicare+Choice payment area noncontiguous counties (or equivalent areas described in paragraph (1)(A)) within a State.
Such adjustment shall be effective for payments for months beginning with January of the year following the year in which the request is received.
(B) Budget neutrality adjustment
In the case of a State requesting an adjustment under this paragraph, the Secretary shall initially (and annually thereafter) adjust the payment rates otherwise established under this section with respect to MA local plans for Medicare+Choice payment areas in the State in a manner so that the aggregate of the payments under this section for such plans in the State shall not exceed the aggregate payments that would have been made under this section for such plans for Medicare+Choice payment areas in the State in the absence of the adjustment under this paragraph.
(C) Metropolitan based system
The metropolitan based system described in this subparagraph is one in which—
(i) all the portions of each metropolitan statistical area in the State or in the case of a consolidated metropolitan statistical area, all of the portions of each primary metropolitan statistical area within the consolidated area within the State, are treated as a single Medicare+Choice payment area, and
(ii) all areas in the State that do not fall within a metropolitan statistical area are treated as a single Medicare+Choice payment area.
(D) Areas
In subparagraph (C), the terms "metropolitan statistical area", "consolidated metropolitan statistical area", and "primary metropolitan statistical area" mean any area designated as such by the Secretary of Commerce.
(e) Special rules for individuals electing MSA plans
(1) In general
If the amount of the Medicare+Choice monthly MSA premium (as defined in
(2) Establishment and designation of Medicare+Choice medical savings account as requirement for payment of contribution
In the case of an individual who has elected coverage under an MSA plan, no payment shall be made under paragraph (1) on behalf of an individual for a month unless the individual—
(A) has established before the beginning of the month (or by such other deadline as the Secretary may specify) a Medicare+Choice MSA (as defined in section 138(b)(2) of the Internal Revenue Code of 1986), and
(B) if the individual has established more than one such Medicare+Choice MSA, has designated one of such accounts as the individual's Medicare+Choice MSA for purposes of this part.
Under rules under this section, such an individual may change the designation of such account under subparagraph (B) for purposes of this part.
(3) Lump-sum deposit of medical savings account contribution
In the case of an individual electing an MSA plan effective beginning with a month in a year, the amount of the contribution to the Medicare+Choice MSA on behalf of the individual for that month and all successive months in the year shall be deposited during that first month. In the case of a termination of such an election as of a month before the end of a year, the Secretary shall provide for a procedure for the recovery of deposits attributable to the remaining months in the year.
(f) Payments from Trust Funds
The payment to a Medicare+Choice organization under this section for individuals enrolled under this part with the organization and for payments under subsection (l) and subsection (m) and payments to a Medicare+Choice MSA under subsection (e)(1) shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such proportion as the Secretary determines reflects the relative weight that benefits under part A and under part B represents of the actuarial value of the total benefits under this subchapter. Payments to MA organizations for statutory drug benefits provided under this subchapter are made from the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund. Monthly payments otherwise payable under this section for October 2000 shall be paid on the first business day of such month. Monthly payments otherwise payable under this section for October 2001 shall be paid on the last business day of September 2001. Monthly payments otherwise payable under this section for October 2006 shall be paid on the first business day of October 2006.
(g) Special rule for certain inpatient hospital stays
In the case of an individual who is receiving inpatient hospital services from a subsection (d) hospital (as defined in
(1) election under this part of a Medicare+Choice plan offered by a Medicare+Choice organization—
(A) payment for such services until the date of the individual's discharge shall be made under this subchapter through the Medicare+Choice plan or the original medicare fee-for-service program option described in
(B) the elected organization shall not be financially responsible for payment for such services until the date after the date of the individual's discharge, and
(C) the organization shall nonetheless be paid the full amount otherwise payable to the organization under this part; or
(2) termination of election with respect to a Medicare+Choice organization under this part—
(A) the organization shall be financially responsible for payment for such services after such date and until the date of the individual's discharge,
(B) payment for such services during the stay shall not be made under
(C) the terminated organization shall not receive any payment with respect to the individual under this part during the period the individual is not enrolled.
(h) Special rule for hospice care
(1) Information
A contract under this part shall require the Medicare+Choice organization to inform each individual enrolled under this part with a Medicare+Choice plan offered by the organization about the availability of hospice care if—
(A) a hospice program participating under this subchapter is located within the organization's service area; or
(B) it is common practice to refer patients to hospice programs outside such service area.
(2) Payment
If an individual who is enrolled with a Medicare+Choice organization under this part makes an election under
(A) payment for the hospice care furnished to the individual shall be made to the hospice program elected by the individual by the Secretary;
(B) payment for other services for which the individual is eligible notwithstanding the individual's election of hospice care under
(C) the Secretary shall continue to make monthly payments to the Medicare+Choice organization in an amount equal to the value of the additional benefits required under
(i) New entry bonus
(1) In general
Subject to paragraphs (2) and (3), in the case of Medicare+Choice payment area in which a Medicare+Choice plan has not been offered since 1997 (or in which all organizations that offered a plan since such date have filed notice with the Secretary, as of October 13, 1999, that they will not be offering such a plan as of January 1, 2000, or filed notice with the Secretary as of October 3, 2000, that they will not be offering such a plan as of January 1, 2001), the amount of the monthly payment otherwise made under this section shall be increased—
(A) only for the first 12 months in which any Medicare+Choice plan is offered in the area, by 5 percent of the total monthly payment otherwise computed for such payment area; and
(B) only for the subsequent 12 months, by 3 percent of the total monthly payment otherwise computed for such payment area.
(2) Period of application
Paragraph (1) shall only apply to payment for Medicare+Choice plans which are first offered in a Medicare+Choice payment area during the 2-year period beginning on January 1, 2000.
(3) Limitation to organization offering first plan in an area
Paragraph (1) shall only apply to payment to the first Medicare+Choice organization that offers a Medicare+Choice plan in each Medicare+Choice payment area, except that if more than one such organization first offers such a plan in an area on the same date, paragraph (1) shall apply to payment for such organizations.
(4) Construction
Nothing in paragraph (1) shall be construed as affecting the calculation of the annual Medicare+Choice capitation rate under subsection (c) for any payment area or as applying to payment for any period not described in such paragraph and paragraph (2).
(5) Offered defined
In this subsection, the term "offered" means, with respect to a Medicare+Choice plan as of a date, that a Medicare+Choice eligible individual may enroll with the plan on that date, regardless of when the enrollment takes effect or when the individual obtains benefits under the plan.
(j) Computation of benchmark amounts
For purposes of this part, subject to subsection (o), the term "MA area-specific non-drug monthly benchmark amount" means for a month in a year—
(1) with respect to—
(A) a service area that is entirely within an MA local area, subject to section 1395w–29(d)(2)(A) 2 of this title, an amount equal to 1/12 of the annual MA capitation rate under subsection (c)(1) for the area for the year (or, for 2007, 2008, 2009, and 2010, 1/12 of the applicable amount determined under subsection (k)(1) for the area for the year; for 2011, 1/12 of the applicable amount determined under subsection (k)(1) for the area for 2010; and, beginning with 2012, 1/12 of the blended benchmark amount determined under subsection (n)(1) for the area for the year), adjusted as appropriate (for years before 2007) for the purpose of risk adjustment; or
(B) a service area that includes more than one MA local area, an amount equal to the average of the amounts described in subparagraph (A) for each such local MA area, weighted by the projected number of enrollees in the plan residing in the respective local MA areas (as used by the plan for purposes of the bid and disclosed to the Secretary under
(2) with respect to an MA region for a month in a year, the MA region-specific non-drug monthly benchmark amount, as defined in
(k) Determination of applicable amount for purposes of calculating the benchmark amounts
(1) Applicable amount defined
For purposes of subsection (j), subject to paragraphs (2), (4), and (5), the term "applicable amount" means for an area—
(A) for 2007—
(i) if such year is not specified under subsection (c)(1)(D)(ii), an amount equal to the amount specified in subsection (c)(1)(C) for the area for 2006—
(I) first adjusted by the rescaling factor for 2006 for the area (as made available by the Secretary in the announcement of the rates on April 4, 2005, under subsection (b)(1), but excluding any national adjustment factors for coding intensity and risk adjustment budget neutrality that were included in such factor); and
(II) then increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2007, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004;
(ii) if such year is specified under subsection (c)(1)(D)(ii), an amount equal to the greater of—
(I) the amount determined under clause (i) for the area for the year; or
(II) the amount specified in subsection (c)(1)(D) for the area for the year; and
(B) for a subsequent year—
(i) if such year is not specified under subsection (c)(1)(D)(ii), an amount equal to the amount determined under this paragraph for the area for the previous year (determined without regard to paragraphs (2), (4), and (5)), increased by the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding year, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
(ii) if such year is specified under subsection (c)(1)(D)(ii), an amount equal to the greater of—
(I) the amount determined under clause (i) for the area for the year; or
(II) the amount specified in subsection (c)(1)(D) for the area for the year.
(2) Phase-out of budget neutrality factor
(A) In general
Except as provided in subparagraph (D), in the case of 2007 through 2010, the applicable amount determined under paragraph (1) shall be multiplied by a factor equal to 1 plus the product of—
(i) the percent determined under subparagraph (B) for the year; and
(ii) the applicable phase-out factor for the year under subparagraph (C).
(B) Percent determined
(i) In general
For purposes of subparagraph (A)(i), subject to clause (iv), the percent determined under this subparagraph for a year is a percent equal to a fraction the numerator of which is described in clause (ii) and the denominator of which is described in clause (iii).
(ii) Numerator based on difference between demographic rate and risk rate
(I) In general
The numerator described in this clause is an amount equal to the amount by which the demographic rate described in subclause (II) exceeds the risk rate described in subclause (III).
(II) Demographic rate
The demographic rate described in this subclause is the Secretary's estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all MA plans were equal to 1/12 of the annual MA capitation rate under subsection (c)(1) for the area and year, adjusted pursuant to subsection (a)(1)(C).
(III) Risk rate
The risk rate described in this subclause is the Secretary's estimate of the total payments that would have been made under this part in the year if all the monthly payment amounts for all MA plans were equal to the amount described in subsection (j)(1)(A) (determined as if this paragraph had not applied) under subsection (j) for the area and year, adjusted pursuant to subsection (a)(1)(C).
(iii) Denominator based on risk rate
The denominator described in this clause is equal to the total amount estimated for the year under clause (ii)(III).
(iv) Requirements
In estimating the amounts under the previous clauses, the Secretary shall—
(I) use a complete set of the most recent and representative Medicare Advantage risk scores under subsection (a)(3) that are available from the risk adjustment model announced for the year;
(II) adjust the risk scores to reflect changes in treatment and coding practices in the fee-for-service sector;
(III) adjust the risk scores for differences in coding patterns between Medicare Advantage plans and providers under the original Medicare fee-for-service program under parts A and B to the extent that the Secretary has identified such differences, as required in subsection (a)(1)(C);
(IV) as necessary, adjust the risk scores for late data submitted by Medicare Advantage organizations;
(V) as necessary, adjust the risk scores for lagged cohorts; and
(VI) as necessary, adjust the risk scores for changes in enrollment in Medicare Advantage plans during the year.
(v) Authority
In computing such amounts the Secretary may take into account the estimated health risk of enrollees in preferred provider organization plans (including MA regional plans) for the year.
(C) Applicable phase-out factor
For purposes of subparagraph (A)(ii), the term "applicable phase-out factor" means—
(i) for 2007, 0.55;
(ii) for 2008, 0.40;
(iii) for 2009, 0.25; and
(iv) for 2010, 0.05.
(D) Termination of application
Subparagraph (A) shall not apply in a year if the amount estimated under subparagraph (B)(ii)(III) for the year is equal to or greater than the amount estimated under subparagraph (B)(ii)(II) for the year.
(3) No revision in percent
(A) In general
The Secretary may not make any adjustment to the percent determined under paragraph (2)(B) for any year.
(B) Rule of construction
Nothing in this subsection shall be construed to limit the authority of the Secretary to make adjustments to the applicable amounts determined under paragraph (1) as appropriate for purposes of updating data or for purposes of adopting an improved risk adjustment methodology.
(4) Phase-out of the indirect costs of medical education from capitation rates
(A) In general
After determining the applicable amount for an area for a year under paragraph (1) (beginning with 2010), the Secretary shall adjust such applicable amount to exclude from such applicable amount the phase-in percentage (as defined in subparagraph (B)(i)) for the year of the Secretary's estimate of the standardized costs for payments under
(B) Percentages defined
For purposes of this paragraph:
(i) Phase-in percentage
The term "phase-in percentage" means, for an area for a year, the ratio (expressed as a percentage, but in no case greater than 100 percent) of—
(I) the maximum cumulative adjustment percentage for the year (as defined in clause (ii)); to
(II) the standardized IME cost percentage (as defined in clause (iii)) for the area and year.
(ii) Maximum cumulative adjustment percentage
The term "maximum cumulative adjustment percentage" means, for—
(I) 2010, 0.60 percent; and
(II) a subsequent year, the maximum cumulative adjustment percentage for the previous year increased by 0.60 percentage points.
(iii) Standardized IME cost percentage
The term "standardized IME cost percentage" means, for an area for a year, the per capita costs for payments under
(C) Fee-for-service amount
The fee-for-service amount specified in this subparagraph for an area for a year is the amount specified under subsection (c)(1)(D) for the area and the year.
(5) Exclusion of costs for kidney acquisitions from capitation rates
After determining the applicable amount for an area for a year under paragraph (1) (beginning with 2021), the Secretary shall adjust such applicable amount to exclude from such applicable amount the Secretary's estimate of the standardized costs for payments for organ acquisitions for kidney transplants covered under this subchapter (including expenses covered under
(l) Application of eligible professional incentives for certain MA organizations for adoption and meaningful use of certified EHR technology
(1) In general
Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of
(2) Eligible professional described
With respect to a qualifying MA organization, an eligible professional described in this paragraph is an eligible professional (as defined for purposes of
(A)(i) is employed by the organization; or
(ii)(I) is employed by, or is a partner of, an entity that through contract with the organization furnishes at least 80 percent of the entity's Medicare patient care services to enrollees of such organization; and
(II) furnishes at least 80 percent of the professional services of the eligible professional covered under this subchapter to enrollees of the organization; and
(B) furnishes, on average, at least 20 hours per week of patient care services.
(3) Eligible professional incentive payments
(A) In general
In applying
(B) Avoiding duplication of payments
(i) In general
In the case of an eligible professional described in paragraph (2)—
(I) that is eligible for the maximum incentive payment under
(II) that is eligible for less than such maximum incentive payment for the same payment period, the payment incentive shall be made only under this subsection and not under
(ii) Methods
In the case of an eligible professional described in paragraph (2) who is eligible for an incentive payment under
(I) to ensure that duplicate payments are not made with respect to an eligible professional both under this subsection and under
(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
(C) Fixed schedule for application of limitation on incentive payments for all eligible professionals
In applying
(4) Payment adjustment
(A) In general
In applying
(B) Specified percent
The percent specified under this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of—
(i) the number of percentage points by which the applicable percent (under
(ii) the Medicare physician expenditure proportion specified in subparagraph (C) for the year.
(C) Medicare physician expenditure proportion
The Medicare physician expenditure proportion under this subparagraph for a year is the Secretary's estimate of the proportion, of the expenditures under parts A and B that are not attributable to this part, that are attributable to expenditures for physicians' services.
(D) Application of payment adjustment
In the case that a qualifying MA organization attests that not all eligible professionals of the organization are meaningful EHR users with respect to a year, the Secretary shall apply the payment adjustment under this paragraph based on the proportion of all such eligible professionals of the organization that are not meaningful EHR users for such year.
(5) Qualifying MA organization defined
In this subsection and subsection (m), the term "qualifying MA organization" means a Medicare Advantage organization that is organized as a health maintenance organization (as defined in
(6) Meaningful EHR user attestation
For purposes of this subsection and subsection (m), a qualifying MA organization shall submit an attestation, in a form and manner specified by the Secretary which may include the submission of such attestation as part of submission of the initial bid under section 1395w–24(a)(1)(A)(iv) 4 of this title, identifying—
(A) whether each eligible professional described in paragraph (2), with respect to such organization is a meaningful EHR user (as defined in
(B) whether each eligible hospital described in subsection (m)(1),5 with respect to such organization, is a meaningful EHR user (as defined in
(7) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, business addresses, and business phone numbers of—
(A) each qualifying MA organization receiving an incentive payment under this subsection for eligible professionals of the organization; and
(B) the eligible professionals of such organization for which such incentive payment is based.
(8) Limitation on review
There shall be no administrative or judicial review under
(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under paragraph (3)(B) and the specification of rules for the fixed schedule for application of limitation on incentive payments for all eligible professionals under paragraph (3)(C);
(B) the methodology and standards for determining eligible professionals under paragraph (2); and
(C) the methodology and standards for determining a meaningful EHR user under
(m) Application of eligible hospital incentives for certain MA organizations for adoption and meaningful use of certified EHR technology
(1) Application
Subject to paragraphs (3) and (4), in the case of a qualifying MA organization, the provisions of
(2) Eligible hospital described
With respect to a qualifying MA organization, an eligible hospital described in this paragraph is an eligible hospital (as defined in
(3) Eligible hospital incentive payments
(A) In general
In applying
(i) shall, insofar as data to determine the discharge related amount under
(ii) shall, insofar as data to determine the medicare share described in
(B) Avoiding duplication of payments
(i) In general
In the case of a hospital that for a payment year is an eligible hospital described in paragraph (2) and for which at least one-third of their discharges (or bed-days) of Medicare patients for the year are covered under part A, payment for the payment year shall be made only under
(ii) Methods
In the case of a hospital that is an eligible hospital described in paragraph (2) and also is eligible for an incentive payment under
(I) to ensure that duplicate payments are not made with respect to an eligible hospital both under this subsection and under
(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments.
(4) Payment adjustment
(A) Subject to paragraph (3), in the case of a qualifying MA organization (as defined in subsection (l)(5)), if, according to the attestation of the organization submitted under subsection (l)(6) for an applicable period, one or more eligible hospitals (as defined in
(B)
(i) the number of the percentage point reduction effected under
(ii) the Medicare hospital expenditure proportion specified in subparagraph (C) for the year.
(C)
(D)
(5) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format—
(A) a list of the names, business addresses, and business phone numbers of each qualifying MA organization receiving an incentive payment under this subsection for eligible hospitals described in paragraph (2); and
(B) a list of the names of the eligible hospitals for which such incentive payment is based.
(6) Limitations on review
There shall be no administrative or judicial review under
(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under paragraph (3)(B);
(B) the methodology and standards for determining eligible hospitals under paragraph (2); and
(C) the methodology and standards for determining a meaningful EHR user under
(n) Determination of blended benchmark amount
(1) In general
For purposes of subsection (j), subject to paragraphs (3), (4), and (5), the term "blended benchmark amount" means for an area—
(A) for 2012 the sum of—
(i) ½ of the applicable amount for the area and year; and
(ii) ½ of the amount specified in paragraph (2)(A) for the area and year; and
(B) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(2) Specified amount
(A) In general
The amount specified in this subparagraph for an area and year is the product of—
(i) the base payment amount specified in subparagraph (E) for the area and year adjusted to take into account the phase-out in the indirect costs of medical education from capitation rates described in subsection (k)(4) and, for 2021 and subsequent years, the exclusion of payments for organ acquisitions for kidney transplants from the capitation rate as described in subsection (k)(5); and
(ii) the applicable percentage for the area for the year specified under subparagraph (B).
(B) Applicable percentage
Subject to subparagraph (D), the applicable percentage specified in this subparagraph for an area for a year in the case of an area that is ranked—
(i) in the highest quartile under subparagraph (C) for the previous year is 95 percent;
(ii) in the second highest quartile under such subparagraph for the previous year is 100 percent;
(iii) in the third highest quartile under such subparagraph for the previous year is 107.5 percent; or
(iv) in the lowest quartile under such subparagraph for the previous year is 115 percent.
(C) Periodic ranking
For purposes of this paragraph in the case of an area located—
(i) in 1 of the 50 States or the District of Columbia, the Secretary shall rank such area in each year specified under subsection (c)(1)(D)(ii) based upon the level of the amount specified in subparagraph (A)(i) for such areas; or
(ii) in a territory, the Secretary shall rank such areas in each such year based upon the level of the amount specified in subparagraph (A)(i) for such area relative to quartile rankings computed under clause (i).
(D) 1-year transition for changes in applicable percentage
If, for a year after 2012, there is a change in the quartile in which an area is ranked compared to the previous year, the applicable percentage for the area in the year shall be the average of—
(i) the applicable percentage for the area for the previous year; and
(ii) the applicable percentage that would otherwise apply for the area for the year.
(E) Base payment amount
Subject to subparagraphs (F) and (G), the base payment amount specified in this subparagraph—
(i) for 2012 is the amount specified in subsection (c)(1)(D) for the area for the year; or
(ii) for a subsequent year that—
(I) is not specified under subsection (c)(1)(D)(ii), is the base amount specified in this subparagraph for the area for the previous year, increased by the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding year, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
(II) is specified under subsection (c)(1)(D)(ii), is the amount specified in subsection (c)(1)(D) for the area for the year.
(F) Application of indirect medical education phase-out
The base payment amount specified in subparagraph (E) for a year shall be adjusted in the same manner under paragraph (4) of subsection (k) as the applicable amount is adjusted under such subsection.
(G) Application of kidney acquisitions adjustment
The base payment amount specified in subparagraph (E) for a year (beginning with 2021) shall be adjusted in the same manner under paragraph (5) of subsection (k) as the applicable amount is adjusted under such subsection.
(3) Alternative phase-ins
(A) 4-year phase-in for certain areas
If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in subparagraph (C)) for the area is at least $30 but less than $50, the blended benchmark amount for the area is—
(i) for 2012 the sum of—
(I) ¾ of the applicable amount for the area and year; and
(II) ¼ of the amount specified in paragraph (2)(A) for the area and year;
(ii) for 2013 the sum of—
(I) ½ of the applicable amount for the area and year; and
(II) ½ of the amount specified in paragraph (2)(A) for the area and year;
(iii) for 2014 the sum of—
(I) ¼ of the applicable amount for the area and year; and
(II) ¾ of the amount specified in paragraph (2)(A) for the area and year; and
(iv) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(B) 6-year phase-in for certain areas
If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 benchmark amount (as defined in subparagraph (C)) for the area is at least $50, the blended benchmark amount for the area is—
(i) for 2012 the sum of—
(I) 5/6 of the applicable amount for the area and year; and
(II) 1/6 of the amount specified in paragraph (2)(A) for the area and year;
(ii) for 2013 the sum of—
(I) 2/3 of the applicable amount for the area and year; and
(II) 1/3 of the amount specified in paragraph (2)(A) for the area and year;
(iii) for 2014 the sum of—
(I) ½ of the applicable amount for the area and year; and
(II) ½ of the amount specified in paragraph (2)(A) for the area and year;
(iv) for 2015 the sum of—
(I) 1/3 of the applicable amount for the area and year; and
(II) 2/3 of the amount specified in paragraph (2)(A) for the area and year; and
(v) for 2016 the sum of—
(I) 1/6 of the applicable amount for the area and year; and
(II) 5/6 of the amount specified in paragraph (2)(A) for the area and year; and
(vi) for a subsequent year the amount specified in paragraph (2)(A) for the area and year.
(C) Projected 2010 benchmark amount
The projected 2010 benchmark amount described in this subparagraph for an area is equal to the sum of—
(i) ½ of the applicable amount (as defined in subsection (k)) for the area for 2010; and
(ii) ½ of the amount specified in paragraph (2)(A) for the area for 2010 but determined as if there were substituted for the applicable percentage specified in clause (ii) of such paragraph the sum of—
(I) the applicable percent that would be specified under subparagraph (B) of paragraph (2) (determined without regard to subparagraph (D) of such paragraph) for the area for 2010 if any reference in such paragraph to "the previous year" were deemed a reference to 2010; and
(II) the applicable percentage increase that would apply to a qualifying plan in the area under subsection (o) as if any reference in such subsection to 2012 were deemed a reference to 2010 and as if the determination of a qualifying county under paragraph (3)(B) of such subsection were made for 2010.
(4) Cap on benchmark amount
In no case shall the blended benchmark amount for an area for a year (determined taking into account subsection (o)) be greater than the applicable amount that would (but for the application of this subsection) be determined under subsection (k)(1) for the area for the year.
(5) Non-application to PACE plans
This subsection shall not apply to payments to a PACE program under
(o) Applicable percentage quality increases
(1) In general
Subject to the succeeding paragraphs, in the case of a qualifying plan with respect to a year beginning with 2012, the applicable percentage under subsection (n)(2)(B) shall be increased on a plan or contract level, as determined by the Secretary—
(A) for 2012, by 1.5 percentage points;
(B) for 2013, by 3.0 percentage points; and
(C) for 2014 or a subsequent year, by 5.0 percentage points.
(2) Increase for qualifying plans in qualifying counties
The increase applied under paragraph (1) for a qualifying plan located in a qualifying county for a year shall be doubled.
(3) Qualifying plans and qualifying county defined; application of increases to low enrollment and new plans
For purposes of this subsection:
(A) Qualifying plan
(i) In general
The term "qualifying plan" means, for a year and subject to paragraph (4), a plan that had a quality rating under paragraph (4) of 4 stars or higher based on the most recent data available for such year.
(ii) Application of increases to low enrollment plans
(I) 2012
For 2012, the term "qualifying plan" includes an MA plan that the Secretary determines is not able to have a quality rating under paragraph (4) because of low enrollment.
(II) 2013 and subsequent years
For 2013 and subsequent years, for purposes of determining whether an MA plan with low enrollment (as defined by the Secretary) is included as a qualifying plan, the Secretary shall establish a method to apply to MA plans with low enrollment (as defined by the Secretary) the computation of quality rating and the rating system under paragraph (4).
(iii) Application of increases to new plans
(I) In general
A new MA plan that meets criteria specified by the Secretary shall be treated as a qualifying plan, except that in applying paragraph (1), the applicable percentage under subsection (n)(2)(B) shall be increased—
(aa) for 2012, by 1.5 percentage points;
(bb) for 2013, by 2.5 percentage points; and
(cc) for 2014 or a subsequent year, by 3.5 percentage points.
(II) New MA plan defined
The term "new MA plan" means, with respect to a year, a plan offered by an organization or sponsor that has not had a contract as a Medicare Advantage organization in the preceding 3-year period.
(B) Qualifying county
The term "qualifying county" means, for a year, a county—
(i) that has an MA capitation rate that, in 2004, was based on the amount specified in subsection (c)(1)(B) for a Metropolitan Statistical Area with a population of more than 250,000;
(ii) for which, as of December 2009, of the Medicare Advantage eligible individuals residing in the county at least 25 percent of such individuals were enrolled in Medicare Advantage plans; and
(iii) that has per capita fee-for-service spending that is lower than the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year.
(4) Quality determinations for application of increase
(A) Quality determination
The quality rating for a plan shall be determined according to a 5-star rating system (based on the data collected under
(B) Plans that failed to report
An MA plan which does not report data that enables the Secretary to rate the plan for purposes of this paragraph shall be counted as having a rating of fewer than 3.5 stars.
(C) Special rule for first 3 plan years for plans that were converted from a reasonable cost reimbursement contract
For purposes of applying paragraph (1) and
(i) such plan shall not be treated as a new MA plan (as defined in paragraph (3)(A)(iii)(II)); and
(ii) in determining the star rating of the plan under subparagraph (A), to the extent that Medicare Advantage data for such plan is not available for a measure used to determine such star rating, the Secretary shall use data from the period in which such plan was a reasonable cost reimbursement contract.
(D) Special rule to prevent the artificial inflation of star ratings after the consolidation of Medicare Advantage plans offered by a single organization
(i) In general
If—
(I) a Medicare Advantage organization has entered into more than one contract with the Secretary with respect to the offering of Medicare Advantage plans; and
(II) on or after January 1, 2019, the Secretary approves a request from the organization to consolidate the plans under one or more contract 8 (in this subparagraph referred to as a "closed contract") with the plans offered under a separate contract (in this subparagraph referred to as the "continuing contract");
with respect to the continuing contract, the Secretary shall adjust the quality rating under the 5-star rating system and any quality increase under this subsection and rebate amounts under
(ii) Application
An adjustment under clause (i) shall apply for any year for which the quality rating of the continuing contract is based primarily on a measurement period that is prior to the first year in which a closed contract is no longer offered.
(5) Exception for PACE plans
This subsection shall not apply to payments to a PACE program under
(6) Quality measurement at the plan level for SNPs
(A) In general
Subject to subparagraph (B), the Secretary may require reporting of data under
(B) Considerations
Prior to applying quality measurement at the plan level under this paragraph, the Secretary shall—
(i) take into consideration the minimum number of enrollees in a specialized MA plan for special needs individuals in order to determine if a statistically significant or valid measurement of quality at the plan level is possible under this paragraph;
(ii) take into consideration the impact of such application on plans that serve a disproportionate number of individuals dually eligible for benefits under this subchapter and under subchapter XIX;
(iii) if quality measures are reported at the plan level, ensure that MA plans are not required to provide duplicative information; and
(iv) ensure that such reporting does not interfere with the collection of encounter data submitted by MA organizations or the administration of any changes to the program under this part as a result of the collection of such data.
(C) Application
If the Secretary applies quality measurement at the plan level under this paragraph—
(i) such quality measurement may include Medicare Health Outcomes Survey (HOS), Healthcare Effectiveness Data and Information Set (HEDIS), Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures and quality measures under part D; and
(ii) the Secretary shall consider applying administrative actions, such as remedies described in
(7) Determination of feasibility of quality measurement at the plan level for all MA plans
(A) Determination of feasibility
The Secretary shall determine the feasibility of requiring reporting of data under
(B) Consideration of change
After making a determination under subparagraph (A), the Secretary shall consider requiring such reporting and applying such quality measures at the plan level as described in such subparagraph 3
(Aug. 14, 1935, ch. 531, title XVIII, §1853, as added
Editorial Notes
References in Text
Subsection (b)(6)(B)(iii), referred to in subsec. (a)(1)(C)(iii)(II), probably means
Section 2355 of the Deficit Reduction Act of 1984, as amended by section 13567(b) of the Omnibus Budget Reconciliation Act of 1993, referred to in subsec. (a)(1)(H), is section 2355 of
The Internal Revenue Code of 1986, referred to in subsec. (e)(2)(A), is classified generally to Title 26, Internal Revenue Code.
The matter following clause (v) of
Amendments
2018—Subsec. (o)(4)(D).
Subsec. (o)(6), (7).
2016—Subsec. (a)(1)(C)(i).
Subsec. (a)(1)(I).
Subsec. (k)(1).
Subsec. (k)(1)(B)(i).
Subsec. (k)(5).
Subsec. (n)(2)(A)(i).
Subsec. (n)(2)(E).
Subsec. (n)(2)(G).
2015—Subsec. (b)(2).
Subsec. (m)(2), (4)(A).
Subsec. (o)(4)(C).
2013—Subsec. (a)(1)(C)(ii)(III).
2010—Subsec. (a)(1)(B)(i), (ii).
Subsec. (a)(1)(B)(iv).
Subsec. (a)(1)(C)(ii).
Subsec. (a)(1)(C)(ii)(II).
Subsec. (a)(1)(C)(ii)(III), (IV).
Subsec. (a)(1)(C)(iii).
"(I)
"(II)
See Effective Date of 2010 Amendment note below.
Subsec. (b)(1)(B)(i).
Subsec. (b)(4).
Subsec. (c)(1).
Subsec. (c)(6).
Subsec. (d).
Subsec. (d)(1)(A).
"(i) for years before 2012, an MA local area (as defined in paragraph (2)); and
"(ii) for 2012 and succeeding years, a service area that is an entire urban or rural area, as applicable (as described in paragraph (5)); and"
for "with respect to an MA local plan, an MA local area (as defined in paragraph (2)); and", was repealed by
Subsec. (d)(5).
"(A)
"(i)
"(ii)
"(B)
"(C)
"(D)
"(i) agreements with another MA organization or MA plan that preclude the offering of benefits throughout an entire service area; or
"(ii) limitations in their structural capacity to support adequate networks throughout an entire service area as a result of the delivery system model of the MA local plan."
See Effective Date of 2010 Amendment note below.
Subsec. (d)(6).
Subsec. (j).
Subsec. (j)(1)(A).
"(I) for years before 2007, 1/12 of the annual MA capitation rate under subsection (c)(1) for the area for the year, adjusted as appropriate for the purpose of risk adjustment;
"(II) for 2007 through 2011, 1/12 of the applicable amount determined under subsection (k)(1) for the area for the year;
"(III) for 2012, the sum of—
"(aa) 2/3 of the quotient of—
"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and
"(BB) 12; and
"(bb) 1/3 of the MA competitive benchmark amount (determined under paragraph (2)) for the area for the month;
"(IV) for 2013, the sum of—
"(aa) 1/3 of the quotient of—
"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and
"(BB) 12; and
"(bb) 2/3 of the MA competitive benchmark amount (as so determined) for the area for the month;
"(V) for 2014, the MA competitive benchmark amount for the area for a month in 2013 (as so determined), increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2014, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and
"(VI) for 2015 and each subsequent year, the MA competitive benchmark amount (as so determined) for the area for the month; or".
See Effective Date of 2010 Amendment note below.
Subsec. (j)(2), (3).
"(2)
"(A)
"(B)
"(i)
"(ii)
"(3)
See Effective Date of 2010 Amendment note below.
Subsec. (k)(2).
Subsec. (n).
"(1)
"(A)
"(i) 0.5 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and
"(ii) the total number of programs described in clauses (i) through (ix) of subparagraph (C) that the Secretary determines the plan is conducting for the year under such subparagraph.
"(B)
"(C)
"(i) Care management programs that—
"(I) target individuals with 1 or more chronic conditions;
"(II) identify gaps in care; and
"(III) facilitate improved care by using additional resources like nurses, nurse practitioners, and physician assistants.
"(ii) Programs that focus on patient education and self-management of health conditions, including interventions that—
"(I) help manage chronic conditions;
"(II) reduce declines in health status; and
"(III) foster patient and provider collaboration.
"(iii) Transitional care interventions that focus on care provided around a hospital inpatient episode, including programs that target post-discharge patient care in order to reduce unnecessary health complications and readmissions.
"(iv) Patient safety programs, including provisions for hospital-based patient safety programs in contracts that the Medicare Advantage organization offering the MA plan has with hospitals.
"(v) Financial policies that promote systematic coordination of care by primary care physicians across the full spectrum of specialties and sites of care, such as medical homes, capitation arrangements, or pay-for-performance programs.
"(vi) Programs that address, identify, and ameliorate health care disparities among principal at-risk subpopulations.
"(vii) Medication therapy management programs that are more extensive than is required under
"(viii) Health information technology programs, including clinical decision support and other tools to facilitate data collection and ensure patient-centered, appropriate care.
"(ix) Such other care management and coordination programs as the Secretary determines appropriate.
"(D)
"(E)
"(F)
"(2)
"(A)
"(i) in the case of a plan that achieves a 3 star rating (or comparable rating) on such system 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and
"(ii) in the case of a plan that achieves a 4 or 5 star rating (or comparable rating[)] on such system, 4 percent of such national monthly per capita cost for the year.
"(B)
"(C)
"(i) a rating system that uses up to 5 stars to rate clinical quality and enrollee satisfaction and performance at the Medicare Advantage contract or MA plan level; or
"(ii) such other system established by the Secretary that provides for the determination of a comparable quality performance rating to the rating system described in clause (i).
"(D)
"(i)
"(ii)
"(3)
"(A)
"(B)
"(4)
"(5)
See Effective Date of 2010 Amendment note below.
Subsec. (n)(2)(B).
Subsec. (n)(6).
Subsec. (o).
"(1)
"(2)
"(A)
"(B)
"(i) for 2012, the monthly per capita dollar amount of such rebates provided to enrollees under the MA local plan with respect to 2011; and
"(ii) for a subsequent year, 95 percent of the amount determined under this subparagraph for the preceding year.
"(3)
"(A)
"(i) for 2012 and 2013, the sum of—
"(I) the bid amount under
"(II) the applicable amount (as defined in paragraph (2)(B)) for the MA local plan for the year.
"(ii) for 2014 and subsequent years, the sum of—
"(I) the MA competitive benchmark amount under subsection (j)(1)(A)(i) for the area for the month, adjusted, only to the extent the Secretary determines necessary, to account for induced utilization as a result of rebates provided to grandfathered enrollees (except that such adjustment shall not exceed 0.5 percent of such MA competitive benchmark amount); and
"(II) the applicable amount (as so defined) for the MA local plan for the year.
"(B)
"(C)
"(D)
"(E)
"(F)
"(4)
See Effective Date of 2010 Amendment note below.
Subsec. (p).
"(1)
"(2)
"(A) enrolls in an MA local plan in an applicable area; and
"(B) experiences a significant reduction in extra benefits described in clause (ii) of
"(3)
"(A) The 2 largest metropolitan statistical areas, if the Secretary determines that the total amount of such extra benefits for each enrollee for the month in those areas is greater than $100.
"(B) A county where—
"(i) the MA area-specific non-drug monthly benchmark amount for a month in 2011 is equal to the legacy urban floor amount (as described in subsection (c)(1)(B)(iii)), as determined by the Secretary for the area for 2011;
"(ii) the percentage of Medicare Advantage eligible beneficiaries in the county who are enrolled in an MA plan for 2009 is greater than 30 percent (as determined by the Secretary); and
"(iii) average bids submitted by an MA organization under
"(C) If the Secretary determines appropriate, a county contiguous to an area or county described in subparagraph (A) or (B), respectively.
"(4)
"(5)
See Effective Date of 2010 Amendment note below.
Subsec. (p)(3)(A).
2009—Subsec. (a)(1)(A).
Subsec. (c)(1)(D)(i).
Subsec. (c)(6)(A).
Subsec. (f).
Subsec. (l).
Subsec. (m).
2008—Subsec. (k)(1).
Subsec. (k)(4).
2006—Subsec. (a)(1)(C).
Subsec. (j)(1)(A).
Subsec. (j)(1)(B).
Subsec. (k).
2003—Subsec. (a)(1)(A).
Subsec. (a)(1)(B) to (G).
Subsec. (a)(1)(H).
Subsec. (a)(3)(C)(ii).
Subsec. (a)(3)(C)(iii), (iv).
Subsec. (a)(4).
Subsec. (b)(1).
Subsec. (b)(1)(B)(iii).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (c)(1).
Subsec. (c)(1)(A).
Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(C)(iv).
Subsec. (c)(1)(C)(v).
Subsec. (c)(1)(D).
Subsec. (c)(3)(A).
Subsec. (c)(3)(E).
Subsec. (c)(5).
Subsec. (c)(6)(C).
Subsec. (c)(7).
Subsec. (d).
Subsec. (d)(1).
Subsec. (d)(2), (3).
Subsec. (d)(4).
Subsec. (d)(4)(A).
Subsec. (d)(4)(A)(iii).
Subsec. (d)(4)(B).
Subsec. (f).
Subsec. (g).
Subsec. (g)(2)(B).
Subsec. (j).
Subsec. (j)(1)(A).
2002—Subsec. (b)(1).
2000—Subsec. (a)(1)(A).
Subsec. (a)(1)(B).
Subsec. (a)(3)(C)(ii).
Subsec. (a)(3)(C)(ii)(I).
Subsec. (a)(3)(C)(ii)(II) to (V).
Subsec. (a)(3)(C)(iii).
Subsec. (c)(1)(B)(ii), (iii).
Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(C)(ii), (iii).
Subsec. (c)(1)(C)(iv).
Subsec. (c)(5).
Subsec. (c)(7).
Subsec. (i)(1).
1999—Subsec. (a)(1)(A).
Subsec. (a)(3)(C).
Subsec. (b)(4).
Subsec. (c)(5).
Subsec. (c)(6)(B)(v).
Subsec. (i).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2015 Amendment
Amendment by
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date of 2003 Amendment
Amendment by sections 221(d)(1), (4) and 222(d)–(f), (i) of
Amendment by section 237(b)(1), (2)(B) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(2)(A)] of
Amendment by section 1(a)(6) [title VI, §611(a)] of
Reports on Risk Adjustment Models
MedPAC Study of AAPCC
Implementation of 2003 Amendment
"(1)
"(2)
"(3)
"(A)
"(B)
"(C)
"(4)
"(5)
Special Rule for January and February of 2001
"(1)
"(2)
Transition to Revised Medicare+Choice Payment Rates
"(a)
"(b)
"(c)
"(1) a Medicare+Choice organization provided notice to the Secretary of Health and Human Services as of July 3, 2000, that it was renewing its contract under part C of title XVIII of the Social Security Act [this part] for all or part of the service area or areas served under its current contract, and
"(2) any part of the service area or areas addressed in such notice includes a payment area for which the Medicare+Choice capitation rate under section 1853(c) of such Act (
such organization shall revise its submission of the information described in section 1854(a)(1) of the Social Security Act (
"(d)
"(e)
Publication
Report on Inclusion of Certain Costs of the Department of Veterans Affairs and Military Facility Services in Calculating Medicare+Choice Payment Rates
"(1) the actual or estimated cost of such services to medicare-eligible beneficiaries;
"(2) the change in Medicare+Choice capitation payment rates if such costs are included in the calculation of payment rates;
"(3) one or more proposals for the implementation of payment adjustments to Medicare+Choice plans in counties where the payment rate has been affected due to the failure to calculate the cost of such services to medicare-eligible beneficiaries; and
"(4) a system to ensure that when a Medicare+Choice enrollee receives covered services through a facility of the Department of Veterans Affairs or the Department of Defense there is an appropriate payment recovery to the medicare program under title XVIII of the Social Security Act [this subchapter]."
MedPAC Study and Report
"(1)
"(2)
"(A) The ability of the average risk adjustment factor applied to a Medicare+Choice plan to explain variations in plans' average per capita medicare costs, as reported by Medicare+Choice plans in the plans' adjusted community rate filings.
"(B) The year-to-year stability of the risk factors applied to each Medicare+Choice plan and the potential for substantial changes in payment for small Medicare+Choice plans.
"(C) For medicare beneficiaries newly enrolled in Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from medicare fee-for-service data for those individuals from the period prior to their enrollment in a Medicare+Choice plan and the average risk factor calculated for such individuals during their initial year of enrollment in a Medicare+Choice plan.
"(D) For medicare beneficiaries disenrolling from or switching among Medicare+Choice plans in a given year, the correspondence between the average risk factor calculated from data pertaining to the period prior to their disenrollment from a Medicare+Choice plan and the average risk factor calculated from data pertaining to the period after disenrollment.
"(E) An evaluation of the exclusion of 'discretionary' hospitalizations from consideration in the risk adjustment methodology.
"(F) Suggestions for changes or improvements in the risk adjustment methodology.
"(3)
Study and Report Regarding Reporting of Encounter Data
"(1)
"(A) Limiting the number and types of sites of services (that are in addition to inpatient sites) for which encounter data must be reported.
"(B) Establishing alternative risk adjustment methods that would require submission of less data.
"(C) The potential for Medicare+Choice organizations to misreport, overreport, or underreport prevalence of diagnoses in outpatient sites of care, the potential for increases in payments to Medicare+Choice organizations from changes in Medicare+Choice plan coding practices (commonly known as 'coding creep') and proposed methods for detecting and adjusting for such variations in diagnosis coding as part of the risk adjustment methodology using encounter data from multiple sites of care.
"(D) The impact of such requirements on the willingness of insurers to offer Medicare+Choice MSA plans and options for modifying encounter data reporting requirements to accommodate such plans.
"(E) Differences in the ability of Medicare+Choice organizations to report encounter data, and the potential for adverse competitive impacts on group and staff model health maintenance organizations or other integrated providers of care based on data reporting capabilities.
"(2)
Special Rule for 2001
Development of Special Payment Rules Under Medicare+Choice Program for Frail Elderly Enrolled in Specialized Programs
"(1)
"(A) accounts for the prevalence, mix, and severity of chronic conditions among such frail elderly Medicare+Choice beneficiaries;
"(B) includes medical diagnostic factors from all provider settings (including hospital and nursing facility settings); and
"(C) includes functional indicators of health status and such other factors as may be necessary to achieve appropriate payments for plans serving such beneficiaries.
"(2)
Publication of New Capitation Rates
Medicare+Choice Competitive Pricing Demonstration Project
"SEC. 4011. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRATION PROJECT.
"(a)
"(1)
"(2)
"(A)
"(B)
"(C)
"(D)
"(3)
"(b)
"(1)
"(2)
"(A)
"(B)
"(3)
"(c)
"(1)
"(A) in accordance with the recommendations of the Competitive Pricing Advisory Committee—
"(i) establish the benefit design among plans offered in such area,
"(ii) structure the method for selecting plans offered in such area; and
"(iii) establish beneficiary premiums for plans offered in such area in a manner such that a beneficiary who enrolls in an offered plan the per capita bid for which is less than the standard per capita government contribution (as established by the competitive pricing methodology established for such area) may, at the plan's election, be offered a rebate of some or all of the medicare part B premium that such individual must otherwise pay in order to participate in a Medicare+Choice plan under the Medicare+Choice program; and
"(B) in consultation with such Committee—
"(i) establish methods for setting the price to be paid to plans, including, if the Secretaries determines appropriate, the rewarding and penalizing of Medicare+Choice plans in the area on the basis of the attainment of, or failure to attain, applicable quality standards, and
"(ii) provide for the collection of plan information (including information concerning quality and access to care), the dissemination of information, and the methods of evaluating the results of the project.
"(2)
"(d)
"(1)
"(2)
"(e)
"(f)
"(g)
"(h)
"SEC. 4012. ADVISORY COMMITTEES.
"(a)
"(1)
"(2)
"(3)
"(4)
"(5)
"(b)
"(c)
1 So in original. Probably should be "parts".
2 See References in Text note below.
4 So in original.
5 So in original. Probably should be "(m)(2),".
6 So in original. Probably should be "1395w–4(o)(2)(C)".
7 So in original. Probably should be "1395w–4(o)(2)(B)".
8 So in original. Probably should be "contracts".
§1395w–24. Premiums and bid amounts
(a) Submission of proposed premiums, bid amounts, and related information
(1) In general
(A) Initial submission
Not later than the second Monday in September of 2002, 2003, and 2004 (or the first Monday in June of each subsequent year), each MA organization shall submit to the Secretary, in a form and manner specified by the Secretary and for each MA plan for the service area (or segment of such an area if permitted under subsection (h)) in which it intends to be offered in the following year the following:
(i) The information described in paragraph (2), (3), (4), or (6)(A) for the type of plan and year involved.
(ii) The plan type for each plan.
(iii) The enrollment capacity (if any) in relation to the plan and area.
(B) Beneficiary rebate information
In the case of a plan required to provide a monthly rebate under subsection (b)(1)(C) for a year, the MA organization offering the plan shall submit to the Secretary, in such form and manner and at such time as the Secretary specifies, information on—
(i) the manner in which such rebate will be provided under clause (ii) of such subsection; and
(ii) the MA monthly prescription drug beneficiary premium (if any) and the MA monthly supplemental beneficiary premium (if any).
(C) Paperwork reduction for offering of MA regional plans nationally or in multi-region areas
The Secretary shall establish requirements for information submission under this subsection in a manner that promotes the offering of MA regional plans in more than one region (including all regions) through the filing of consolidated information.
(2) Information required for coordinated care plans before 2006
For a Medicare+Choice plan described in
(A) Basic (and additional) benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the Medicare+Choice monthly basic beneficiary premium (as defined in subsection (b)(2)(A));
(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(1)(A); and
(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
(B) Supplemental benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the Medicare+Choice monthly supplemental beneficiary premium (as defined in subsection (b)(2)(B)); and
(iii) a description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(2).
(3) Requirements for MSA plans
For an MSA plan for any year, the information described in this paragraph is as follows:
(A) Basic (and additional) benefits
For benefits described in
(B) Supplemental benefits
For benefits described in
(4) Requirements for private fee-for-service plans before 2006
For a Medicare+Choice plan described in
(A) Basic (and additional) benefits
For benefits described in
(i) the adjusted community rate (as defined in subsection (f)(3));
(ii) the amount of the Medicare+Choice monthly basic beneficiary premium;
(iii) a description of the deductibles, coinsurance, and copayments applicable under the plan, and the actuarial value of such deductibles, coinsurance, and copayments, as described in subsection (e)(4)(A); and
(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant to such subsection and the value determined for such proposed benefits under such subsection.
(B) Supplemental benefits
For benefits described in
(5) Review
(A) In general
Subject to subparagraph (B), the Secretary shall review the adjusted community rates, the amounts of the basic and supplemental premiums, and values filed under paragraphs (2) and (4) of this subsection and shall approve or disapprove such rates, amounts, and values so submitted. The Chief Actuary of the Centers for Medicare & Medicaid Services shall review the actuarial assumptions and data used by the Medicare+Choice organization with respect to such rates, amounts, and values so submitted to determine the appropriateness of such assumptions and data.
(B) Exception
The Secretary shall not review, approve, or disapprove the amounts submitted under paragraph (3) or, in the case of an MA private fee-for-service plan, subparagraphs (A)(ii) and (B) of paragraph (4).
(C) Rejection of bids
(i) In general
Nothing in this section shall be construed as requiring the Secretary to accept any or every bid submitted by an MA organization under this subsection.
(ii) Authority to deny bids that propose significant increases in cost sharing or decreases in benefits
The Secretary may deny a bid submitted by an MA organization for an MA plan if it proposes significant increases in cost sharing or decreases in benefits offered under the plan.
(6) Submission of bid amounts by MA organizations beginning in 2006
(A) Information to be submitted
For an MA plan (other than an MSA plan) for a plan year beginning on or after January 1, 2006, the information described in this subparagraph is as follows:
(i) The monthly aggregate bid amount for the provision of all items and services under the plan, which amount shall be based on average revenue requirements (as used for purposes of
(ii) The proportions of such bid amount that are attributable to—
(I) the provision of benefits under the original medicare fee-for-service program option (as defined in
(II) the provision of basic prescription drug coverage; and
(III) the provision of supplemental health care benefits.
(iii) The actuarial basis for determining the amount under clause (i) and the proportions described in clause (ii) and such additional information as the Secretary may require to verify such actuarial bases and the projected number of enrollees in each MA local area.
(iv) A description of deductibles, coinsurance, and copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(4)(A).
(v) With respect to qualified prescription drug coverage, the information required under
In the case of a specialized MA plan for special needs individuals, the information described in this subparagraph is such information as the Secretary shall specify.
(B) Acceptance and negotiation of bid amounts
(i) Authority
Subject to clauses (iii) and (iv), the Secretary has the authority to negotiate regarding monthly bid amounts submitted under subparagraph (A) (and the proportions described in subparagraph (A)(ii)), including supplemental benefits provided under subsection (b)(1)(C)(ii)(I) and in exercising such authority the Secretary shall have authority similar to the authority of the Director of the Office of Personnel Management with respect to health benefits plans under
(ii) Application of FEHBP standard
Subject to clause (iv), the Secretary may only accept such a bid amount or proportion if the Secretary determines that such amount and proportions are supported by the actuarial bases provided under subparagraph (A) and reasonably and equitably reflects the revenue requirements (as used for purposes of
(iii) Noninterference
In order to promote competition under this part and part D and in carrying out such parts, the Secretary may not require any MA organization to contract with a particular hospital, physician, or other entity or individual to furnish items and services under this subchapter or require a particular price structure for payment under such a contract to the extent consistent with the Secretary's authority under this part.
(iv) Exception
In the case of a plan described in
(b) Monthly premium charged
(1) In general
(A) Rule for other than MSA plans
Subject to the rebate under subparagraph (C), the monthly amount (if any) of the premium charged to an individual enrolled in a Medicare+Choice plan (other than an MSA plan) offered by a Medicare+Choice organization shall be equal to the sum of the Medicare+Choice monthly basic beneficiary premium, the Medicare+Choice monthly supplementary beneficiary premium (if any), and, if the plan provides qualified prescription drug coverage, the MA monthly prescription drug beneficiary premium.
(B) MSA plans
The monthly amount of the premium charged to an individual enrolled in an MSA plan offered by a Medicare+Choice organization shall be equal to the Medicare+Choice monthly supplemental beneficiary premium (if any).
(C) Beneficiary rebate rule
(i) Requirement
The MA plan shall provide to the enrollee a monthly rebate equal to 75 percent (or the applicable rebate percentage specified in clause (iii) in the case of plan years beginning on or after January 1, 2012) of the average per capita savings (if any) described in paragraph (3)(C) or (4)(C), as applicable to the plan and year involved.
(ii) Form of rebate for plan years before 2012
For plan years before 2012, a rebate required under this subparagraph shall be provided through the application of the amount of the rebate toward one or more of the following:
(I) Provision of supplemental health care benefits and payment for premium for supplemental benefits
The provision of supplemental health care benefits described in
(II) Payment for premium for prescription drug coverage
Crediting toward the MA monthly prescription drug beneficiary premium.
(III) Payment toward part B premium
Crediting toward the premium imposed under part B (determined without regard to the application of subsections (b), (h), and (i) of
(iii) Applicable rebate percentage
The applicable rebate percentage specified in this clause for a plan for a year, based on the system under section 1395w–23(o)(4)(A), is the sum of—
(I) the product of the old phase-in proportion for the year under clause (iv) and 75 percent; and
(II) the product of the new phase-in proportion for the year under clause (iv) and the final applicable rebate percentage under clause (v).
(iv) Old and new phase-in proportions
For purposes of clause (iv)—
(I) for 2012, the old phase-in proportion is 2/3 and the new phase-in proportion is 1/3;
(II) for 2013, the old phase-in proportion is 1/3 and the new phase-in proportion is 2/3; and
(III) for 2014 and any subsequent year, the old phase-in proportion is 0 and the new phase-in proportion is 1.
(v) Final applicable rebate percentage
Subject to clause (vi), the final applicable rebate percentage under this clause is—
(I) in the case of a plan with a quality rating under such system of at least 4.5 stars, 70 percent;
(II) in the case of a plan with a quality rating under such system of at least 3.5 stars and less than 4.5 stars, 65 percent; and
(III) in the case of a plan with a quality rating under such system of less than 3.5 stars, 50 percent.
(vi) Treatment of low enrollment and new plans
For purposes of clause (v)—
(I) for 2012, in the case of a plan described in subclause (I) of subsection (o)(3)(A)(ii),1 the plan shall be treated as having a rating of 4.5 stars; and
(II) for 2012 or a subsequent year, in the case of a new MA plan (as defined under subclause (III) of subsection (o)(3)(A)(iii) 2) that is treated as a qualifying plan pursuant to subclause (I) of such subsection, the plan shall be treated as having a rating of 3.5 stars.
(vii) Disclosure relating to rebates
The plan shall disclose to the Secretary information on the form and amount of the rebate provided under this subparagraph or the actuarial value in the case of supplemental health care benefits.
(viii) Application of part B premium reduction
Insofar as an MA organization elects to provide a rebate under this subparagraph under a plan as a credit toward the part B premium under clause (ii)(III), the Secretary shall apply such credit to reduce the premium under
(2) Premium and bid terminology defined
For purposes of this part:
(A) MA monthly basic beneficiary premium
The term "MA monthly basic beneficiary premium" means, with respect to an MA plan—
(i) described in
(ii) described in
(B) MA monthly prescription drug beneficiary premium
The term "MA monthly prescription drug beneficiary premium" means, with respect to an MA plan, the base beneficiary premium (as determined under paragraph (2) or (8) (as applicable) of
(C) MA monthly supplemental beneficiary premium
(i) In general
The term "MA monthly supplemental beneficiary premium" means, with respect to an MA plan, the portion of the aggregate monthly bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(III) of such subsection to the provision of supplemental health care benefits, less the amount of rebate credited toward such portion under subsection (b)(1)(C)(ii)(I).
(ii) Application of MA monthly supplementary beneficiary premium
For plan years beginning on or after January 1, 2012, any MA monthly supplementary beneficiary premium charged to an individual enrolled in an MA plan shall be used for the purposes, and in the priority order, described in subclauses (I) through (III) of paragraph (1)(C)(iii).3
(D) Medicare+Choice monthly MSA premium
The term "Medicare+Choice monthly MSA premium" means, with respect to a Medicare+Choice plan, the amount of such premium filed under subsection (a)(3)(A) for the plan.
(E) Unadjusted MA statutory non-drug monthly bid amount
The term "unadjusted MA statutory non-drug monthly bid amount" means the portion of the bid amount submitted under clause (i) of subsection (a)(6)(A) for the year that is attributable under clause (ii)(I) of such subsection to the provision of benefits under the original medicare fee-for-service program option (as defined in
(3) Computation of average per capita monthly savings for local plans
For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA local plan and year is computed as follows:
(A) Determination of statewide average risk adjustment for local plans
(i) In general
Subject to clause (iii), the Secretary shall determine, at the same time rates are promulgated under
(ii) Treatment of States for first year in which local plan offered
In the case of a State in which no MA local plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable States or applied on a national basis.
(iii) Authority to determine risk adjustment for areas other than States
The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than States or on a plan-specific basis.
(B) Determination of risk adjusted benchmark and risk-adjusted bid for local plans
For each MA plan offered in a local area in a State, the Secretary shall—
(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in
(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.
(C) Determination of average per capita monthly savings
The average per capita monthly savings described in this subparagraph for an MA local plan is equal to the amount (if any) by which—
(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds
(ii) the risk-adjusted bid computed under subparagraph (B)(ii).
(4) Computation of average per capita monthly savings for regional plans
For purposes of paragraph (1)(C)(i), the average per capita monthly savings referred to in such paragraph for an MA regional plan and year is computed as follows:
(A) Determination of regionwide average risk adjustment for regional plans
(i) In general
The Secretary shall determine, at the same time rates are promulgated under
(ii) Treatment of regions for first year in which regional plan offered
In the case of an MA region in which no MA regional plan was offered in the previous year, the Secretary shall estimate such average. In making such estimate, the Secretary may use average risk adjustment factors applied to comparable regions or applied on a national basis.
(iii) Authority to determine risk adjustment for areas other than regions
The Secretary may provide for the determination and application of risk adjustment factors under this subparagraph on the basis of areas other than MA regions or on a plan-specific basis.
(B) Determination of risk-adjusted benchmark and risk-adjusted bid for regional plans
For each MA regional plan offered in a region, the Secretary shall—
(i) adjust the applicable MA area-specific non-drug monthly benchmark amount (as defined in
(ii) adjust the unadjusted MA statutory non-drug monthly bid amount by such applicable average risk adjustment factor.
(C) Determination of average per capita monthly savings
The average per capita monthly savings described in this subparagraph for an MA regional plan is equal to the amount (if any) by which—
(i) the risk-adjusted benchmark amount computed under subparagraph (B)(i); exceeds
(ii) the risk-adjusted bid computed under subparagraph (B)(ii).
(c) Uniform premium and bid amounts
Except as permitted under
(d) Terms and conditions of imposing premiums
(1) In general
Each Medicare+Choice organization shall permit the payment of Medicare+Choice monthly basic, prescription drug, and supplemental beneficiary premiums on a monthly basis, may terminate election of individuals for a Medicare+Choice plan for failure to make premium payments only in accordance with
(2) Beneficiary's option of payment through withholding from social security payment or use of electronic funds transfer mechanism
In accordance with regulations, an MA organization shall permit each enrollee, at the enrollee's option, to make payment of premiums (if any) under this part to the organization through—
(A) withholding from benefit payments in the manner provided under
(B) an electronic funds transfer mechanism (such as automatic charges of an account at a financial institution or a credit or debit card account); or
(C) such other means as the Secretary may specify, including payment by an employer or under employment-based retiree health coverage (as defined in
All premium payments that are withheld under subparagraph (A) shall be credited to the appropriate Trust Fund (or Account thereof), as specified by the Secretary, under this subchapter and shall be paid to the MA organization involved. No charge may be imposed under an MA plan with respect to the election of the payment option described in subparagraph (A). The Secretary shall consult with the Commissioner of Social Security and the Secretary of the Treasury regarding methods for allocating premiums withheld under subparagraph (A) among the appropriate Trust Funds and Account.
(3) Information necessary for collection
In order to carry out paragraph (2)(A) with respect to an enrollee who has elected such paragraph to apply, the Secretary shall transmit to the Commissioner of Social Security—
(A) by the beginning of each year, the name, social security account number, consolidated monthly beneficiary premium described in paragraph (4) owed by such enrollee for each month during the year, and other information determined appropriate by the Secretary, in consultation with the Commissioner of Social Security; and
(B) periodically throughout the year, information to update the information previously transmitted under this paragraph for the year.
(4) Consolidated monthly beneficiary premium
In the case of an enrollee in an MA plan, the Secretary shall provide a mechanism for the consolidation of—
(A) the MA monthly basic beneficiary premium (if any);
(B) the MA monthly supplemental beneficiary premium (if any); and
(C) the MA monthly prescription drug beneficiary premium (if any).
(e) Limitation on enrollee liability
(1) For basic and additional benefits before 2006
For periods before 2006, in no event may—
(A) the Medicare+Choice monthly basic beneficiary premium (multiplied by 12) and the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with a Medicare+Choice plan described in
(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.
(2) For supplemental benefits before 2006
For periods before 2006, if the Medicare+Choice organization provides to its members enrolled under this part in a Medicare+Choice plan described in
(3) Determination on other basis
If the Secretary determines that adequate data are not available to determine the actuarial value under paragraph (1)(A), (2), or (4), the Secretary may determine such amount with respect to all individuals in same geographic area, the State, or in the United States, eligible to enroll in the Medicare+Choice plan involved under this part or on the basis of other appropriate data.
(4) Special rule for private fee-for-service plans and for basic benefits beginning in 2006
With respect to a Medicare+Choice private fee-for-service plan (other than a plan that is an MSA plan) and for periods beginning with 2006, with respect to an MA plan described in
(A) the actuarial value of the deductibles, coinsurance, and copayments applicable on average to individuals enrolled under this part with such a plan of an organization with respect to benefits under the original medicare fee-for-service program option, exceed
(B) the actuarial value of the deductibles, coinsurance, and copayments that would be applicable with respect to such benefits on average to individuals entitled to benefits under part A and enrolled under part B if they were not members of a Medicare+Choice organization for the year.
(f) Requirement for additional benefits before 2006
(1) Requirement
(A) In general
For years before 2006, each Medicare+Choice organization (in relation to a Medicare+Choice plan, other than an MSA plan, it offers) shall provide that if there is an excess amount (as defined in subparagraph (B)) for the plan for a contract year, subject to the succeeding provisions of this subsection, the organization shall provide to individuals such additional benefits (as the organization may specify) in a value which the Secretary determines is at least equal to the adjusted excess amount (as defined in subparagraph (C)).
(B) Excess amount
For purposes of this paragraph, the "excess amount", for an organization for a plan, is the amount (if any) by which—
(i) the average of the capitation payments made to the organization under
(ii) the actuarial value of the required benefits described in
(C) Adjusted excess amount
For purposes of this paragraph, the "adjusted excess amount", for an organization for a plan, is the excess amount reduced to reflect any amount withheld and reserved for the organization for the year under paragraph (2).
(D) Uniform application
This paragraph shall be applied uniformly for all enrollees for a plan.
(E) Premium reductions
(i) In general
Subject to clause (ii), as part of providing any additional benefits required under subparagraph (A), a Medicare+Choice organization may elect a reduction in its payments under
(ii) Amount of reduction
The amount of the reduction under clause (i) with respect to any enrollee in a Medicare+Choice plan—
(I) may not exceed 125 percent of the premium described under
(II) shall apply uniformly to each enrollee of the Medicare+Choice plan to which such reduction applies.
(F) Construction
Nothing in this subsection shall be construed as preventing a Medicare+Choice organization from providing supplemental benefits (described in
(2) Stabilization fund
A Medicare+Choice organization may provide that a part of the value of an excess amount described in paragraph (1) be withheld and reserved in the Federal Hospital Insurance Trust Fund and in the Federal Supplementary Medical Insurance Trust Fund (in such proportions as the Secretary determines to be appropriate) by the Secretary for subsequent annual contract periods, to the extent required to stabilize and prevent undue fluctuations in the additional benefits offered in those subsequent periods by the organization in accordance with such paragraph. Any of such value of the amount reserved which is not provided as additional benefits described in paragraph (1)(A) to individuals electing the Medicare+Choice plan of the organization in accordance with such paragraph prior to the end of such periods, shall revert for the use of such trust funds.
(3) Adjusted community rate
For purposes of this subsection, subject to paragraph (4), the term "adjusted community rate" for a service or services means, at the election of a Medicare+Choice organization, either—
(A) the rate of payment for that service or services which the Secretary annually determines would apply to an individual electing a Medicare+Choice plan under this part if the rate of payment were determined under a "community rating system" (as defined in
(B) such portion of the weighted aggregate premium, which the Secretary annually estimates would apply to such an individual, as the Secretary annually estimates is attributable to that service or services,
but adjusted for differences between the utilization characteristics of the individuals electing coverage under this part and the utilization characteristics of the other enrollees with the plan (or, if the Secretary finds that adequate data are not available to adjust for those differences, the differences between the utilization characteristics of individuals selecting other Medicare+Choice coverage, or Medicare+Choice eligible individuals in the area, in the State, or in the United States, eligible to elect Medicare+Choice coverage under this part and the utilization characteristics of the rest of the population in the area, in the State, or in the United States, respectively).
(4) Determination based on insufficient data
For purposes of this subsection, if the Secretary finds that there is insufficient enrollment experience to determine an average of the capitation payments to be made under this part at the beginning of a contract period or to determine (in the case of a newly operated provider-sponsored organization or other new organization) the adjusted community rate for the organization, the Secretary may determine such an average based on the enrollment experience of other contracts entered into under this part and may determine such a rate using data in the general commercial marketplace.
(g) Prohibition of State imposition of premium taxes
No State may impose a premium tax or similar tax with respect to payments to Medicare+Choice organizations under
(h) Permitting use of segments of service areas
The Secretary shall permit a Medicare+Choice organization to elect to apply the provisions of this section uniformly to separate segments of a service area (rather than uniformly to an entire service area) as long as such segments are composed of one or more Medicare+Choice payment areas.
(Aug. 14, 1935, ch. 531, title XVIII, §1854, as added
Editorial Notes
References in Text
Cl. (iii) of par. (1)(C), referred to in subsec. (b)(2)(C)(ii), was struck out and a new cl. (iii) was added by
Amendments
2022—Subsec. (b)(2)(B).
2018—Subsec. (a)(6)(A)(ii)(I).
2010—Subsec. (a)(5)(C).
Subsec. (a)(6)(A).
Subsec. (a)(6)(B)(i).
Subsec. (a)(6)(B)(v).
"(I)
"(aa) actuarial guidelines for the submission of bid information under this paragraph; and
"(bb) bidding rules that are appropriate to ensure accurate bids and fair competition among MA plans.
"(II)
"(III)
See Effective Date of 2010 Amendment note below.
Subsec. (b)(1)(C)(i).
Subsec. (b)(1)(C)(ii).
Subsec. (b)(1)(C)(iii).
"(I) First, to use the most significant share to meaningfully reduce cost-sharing otherwise applicable for benefits under the original medicare fee-for-service program under parts A and B and for qualified prescription drug coverage under part D, including the reduction of any deductibles, copayments, and maximum limitations on out-of-pocket expenses otherwise applicable. Any reduction of maximum limitations on out-of-pocket expenses under the preceding sentence shall apply to all benefits under the original medicare fee-for-service program option. The Secretary may provide guidance on meaningfully reducing cost-sharing under this subclause, except that such guidance may not require a particular amount of cost-sharing or reduction in cost-sharing.
"(II) Second, to use the next most significant share to meaningfully provide coverage of preventive and wellness health care benefits (as defined by the Secretary) which are not benefits under the original medicare fee-for-service program, such as smoking cessation, a free flu shot, and an annual physical examination.
"(III) Third, to use the remaining share to meaningfully provide coverage of other health care benefits which are not benefits under the original medicare fee-for-service program, such as eye examinations and dental coverage, and are not benefits described in subclause (II)."
Subsec. (b)(1)(C)(iv).
Subsec. (b)(1)(C)(v).
Subsec. (b)(1)(C)(vi) to (viii).
Subsec. (b)(2)(C).
Subsec. (b)(3)(B)(i).
Subsec. (b)(4)(B)(i).
Subsec. (h).
2003—
Subsec. (a).
Subsec. (a)(1).
"(A) the information described in paragraph (2), (3), or (4) for the type of plan involved; and
"(B) the enrollment capacity (if any) in relation to the plan and area."
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(5)(A).
Subsec. (a)(5)(B).
Subsec. (a)(6).
Subsec. (b)(1)(A).
Subsec. (b)(1)(C).
Subsec. (b)(2).
Subsec. (b)(3), (4).
Subsec. (c).
Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (e)(4)(A).
Subsec. (e)(4)(B).
Subsec. (f).
Subsec. (f)(1)(A).
Subsec. (g).
2002—Subsec. (a)(1).
2000—Subsec. (a)(5)(A).
Subsec. (f)(1)(E), (F).
1999—Subsec. (a)(1).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(3)(A), (B).
Subsec. (a)(4).
Subsec. (a)(4)(A).
Subsec. (a)(4)(B).
Subsec. (h).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date of 2003 Amendment
Amendment by section 222(a)(1), (b), (c), (g) of
Effective Date of 2002 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title VI, §606(a)(1)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(k)(6)(C)] of
1 So in original. Probably means subclause (I) of section 1395w–23(o)(3)(A)(ii) of this title.
2 So in original. Probably means subclause (II) of section 1395w–23(o)(3)(A)(iii) of this title.
3 See References in Text note below.
§1395w–25. Organizational and financial requirements for Medicare+Choice organizations; provider-sponsored organizations
(a) Organized and licensed under State law
(1) In general
Subject to paragraphs (2) and (3), a Medicare+Choice organization shall be organized and licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers a Medicare+Choice plan.
(2) Special exception for provider-sponsored organizations
(A) In general
In the case of a provider-sponsored organization that seeks to offer a Medicare+Choice plan in a State, the Secretary shall waive the requirement of paragraph (1) that the organization be licensed in that State if—
(i) the organization files an application for such waiver with the Secretary by not later than November 1, 2002, and
(ii) the Secretary determines, based on the application and other evidence presented to the Secretary, that any of the grounds for approval of the application described in subparagraph (B), (C), or (D) has been met.
(B) Failure to act on licensure application on a timely basis
The ground for approval of such a waiver application described in this subparagraph is that the State has failed to complete action on a licensing application of the organization within 90 days of the date of the State's receipt of a substantially complete application. No period before August 5, 1997, shall be included in determining such 90-day period.
(C) Denial of application based on discriminatory treatment
The ground for approval of such a waiver application described in this subparagraph is that the State has denied such a licensing application and—
(i) the standards or review process imposed by the State as a condition of approval of the license imposes any material requirements, procedures, or standards (other than solvency requirements) to such organizations that are not generally applicable to other entities engaged in a substantially similar business, or
(ii) the State requires the organization, as a condition of licensure, to offer any product or plan other than a Medicare+Choice plan.
(D) Denial of application based on application of solvency requirements
With respect to waiver applications filed on or after the date of publication of solvency standards under
(i) such requirements are not the same as the solvency standards established under
(ii) the State has imposed as a condition of approval of the license documentation or information requirements relating to solvency or other material requirements, procedures, or standards relating to solvency that are different from the requirements, procedures, and standards applied by the Secretary under subsection (d)(2).
For purposes of this paragraph, the term "solvency requirements" means requirements relating to solvency and other matters covered under the standards established under
(E) Treatment of waiver
In the case of a waiver granted under this paragraph for a provider-sponsored organization with respect to a State—
(i) Limitation to State
The waiver shall be effective only with respect to that State and does not apply to any other State.
(ii) Limitation to 36-month period
The waiver shall be effective only for a 36-month period and may not be renewed.
(iii) Conditioned on compliance with consumer protection and quality standards
The continuation of the waiver is conditioned upon the organization's compliance with the requirements described in subparagraph (G).
(iv) Preemption of State law
Any provisions of law of that State which relate to the licensing of the organization and which prohibit the organization from providing coverage pursuant to a contract under this part shall be superseded.
(F) Prompt action on application
The Secretary shall grant or deny such a waiver application within 60 days after the date the Secretary determines that a substantially complete waiver application has been filed. Nothing in this section shall be construed as preventing an organization which has had such a waiver application denied from submitting a subsequent waiver application.
(G) Application and enforcement of State consumer protection and quality standards
(i) In general
A waiver granted under this paragraph to an organization with respect to licensing under State law is conditioned upon the organization's compliance with all consumer protection and quality standards insofar as such standards—
(I) would apply in the State to the organization if it were licensed under State law;
(II) are generally applicable to other Medicare+Choice organizations and plans in the State; and
(III) are consistent with the standards established under this part.
Such standards shall not include any standard preempted under
(ii) Incorporation into contract
In the case of such a waiver granted to an organization with respect to a State, the Secretary shall incorporate the requirement that the organization (and Medicare+Choice plans it offers) comply with standards under clause (i) as part of the contract between the Secretary and the organization under
(iii) Enforcement
In the case of such a waiver granted to an organization with respect to a State, the Secretary may enter into an agreement with the State under which the State agrees to provide for monitoring and enforcement activities with respect to compliance of such an organization and its Medicare+Choice plans with such standards. Such monitoring and enforcement shall be conducted by the State in the same manner as the State enforces such standards with respect to other Medicare+Choice organizations and plans, without discrimination based on the type of organization to which the standards apply. Such an agreement shall specify or establish mechanisms by which compliance activities are undertaken, while not lengthening the time required to review and process applications for waivers under this paragraph.
(H) Report
By not later than December 31, 2001, the Secretary shall submit to the Committee on Ways and Means and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate a report regarding whether the waiver process under this paragraph should be continued after December 31, 2002. In making such recommendation, the Secretary shall consider, among other factors, the impact of such process on beneficiaries and on the long-term solvency of the program under this subchapter.
(3) Licensure does not substitute for or constitute certification
The fact that an organization is licensed in accordance with paragraph (1) does not deem the organization to meet other requirements imposed under this part.
(b) Assumption of full financial risk
The Medicare+Choice organization shall assume full financial risk on a prospective basis for the provision of the health care services for which benefits are required to be provided under
(1) may obtain insurance or make other arrangements for the cost of providing to any enrolled member such services the aggregate value of which exceeds such aggregate level as the Secretary specifies from time to time,
(2) may obtain insurance or make other arrangements for the cost of such services provided to its enrolled members other than through the organization because medical necessity required their provision before they could be secured through the organization,
(3) may obtain insurance or make other arrangements for not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its income for such fiscal year, and
(4) may make arrangements with physicians or other health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians or other health professionals or through the institutions.
(c) Certification of provision against risk of insolvency for unlicensed PSOs
(1) In general
Each Medicare+Choice organization that is a provider-sponsored organization, that is not licensed by a State under subsection (a), and for which a waiver application has been approved under subsection (a)(2), shall meet standards established under
(2) Certification process for solvency standards for PSOs
The Secretary shall establish a process for the receipt and approval of applications of a provider-sponsored organization described in paragraph (1) for certification (and periodic recertification) of the organization as meeting such solvency standards. Under such process, the Secretary shall act upon such a certification application not later than 60 days after the date the application has been received.
(d) "Provider-sponsored organization" defined
(1) In general
In this part, the term "provider-sponsored organization" means a public or private entity—
(A) that is established or organized, and operated, by a health care provider, or group of affiliated health care providers,
(B) that provides a substantial proportion (as defined by the Secretary in accordance with paragraph (2)) of the health care items and services under the contract under this part directly through the provider or affiliated group of providers, and
(C) with respect to which the affiliated providers share, directly or indirectly, substantial financial risk with respect to the provision of such items and services and have at least a majority financial interest in the entity.
(2) Substantial proportion
In defining what is a "substantial proportion" for purposes of paragraph (1)(B), the Secretary—
(A) shall take into account the need for such an organization to assume responsibility for providing—
(i) significantly more than the majority of the items and services under the contract under this section through its own affiliated providers; and
(ii) most of the remainder of the items and services under the contract through providers with which the organization has an agreement to provide such items and services,
in order to assure financial stability and to address the practical considerations involved in integrating the delivery of a wide range of service providers;
(B) shall take into account the need for such an organization to provide a limited proportion of the items and services under the contract through providers that are neither affiliated with nor have an agreement with the organization; and
(C) may allow for variation in the definition of substantial proportion among such organizations based on relevant differences among the organizations, such as their location in an urban or rural area.
(3) Affiliation
For purposes of this subsection, a provider is "affiliated" with another provider if, through contract, ownership, or otherwise—
(A) one provider, directly or indirectly, controls, is controlled by, or is under common control with the other,
(B) both providers are part of a controlled group of corporations under section 1563 of the Internal Revenue Code of 1986,
(C) each provider is a participant in a lawful combination under which each provider shares substantial financial risk in connection with the organization's operations, or
(D) both providers are part of an affiliated service group under section 414 of such Code.
(4) Control
For purposes of paragraph (3), control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less than 51 percent of the voting rights or governance rights of another.
(5) "Health care provider" defined
In this subsection, the term "health care provider" means—
(A) any individual who is engaged in the delivery of health care services in a State and who is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, and
(B) any entity that is engaged in the delivery of health care services in a State and that, if it is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, is so licensed.
(6) Regulations
The Secretary shall issue regulations to carry out this subsection.
(Aug. 14, 1935, ch. 531, title XVIII, §1855, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (d)(3)(B), (D), is classified generally to Title 26, Internal Revenue Code.
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Committee on Commerce of House of Representatives changed to Committee on Energy and Commerce of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred to Committee on Financial Services of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.
§1395w–26. Establishment of standards
(a) Establishment of solvency standards for provider-sponsored organizations
(1) Establishment
(A) In general
The Secretary shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter III of
(B) Factors to consider for solvency standards
In establishing solvency standards under subparagraph (A) for provider-sponsored organizations, the Secretary shall consult with interested parties and shall take into account—
(i) the delivery system assets of such an organization and ability of such an organization to provide services directly to enrollees through affiliated providers,
(ii) alternative means of protecting against insolvency, including reinsurance, unrestricted surplus, letters of credit, guarantees, organizational insurance coverage, partnerships with other licensed entities, and valuation attributable to the ability of such an organization to meet its service obligations through direct delivery of care, and
(iii) any standards developed by the National Association of Insurance Commissioners specifically for risk-based health care delivery organizations.
(C) Enrollee protection against insolvency
Such standards shall include provisions to prevent enrollees from being held liable to any person or entity for the Medicare+Choice organization's debts in the event of the organization's insolvency.
(2) Publication of notice
In carrying out the rulemaking process under this subsection, the Secretary, after consultation with the National Association of Insurance Commissioners, the American Academy of Actuaries, organizations representative of medicare beneficiaries, and other interested parties, shall publish the notice provided for under
(3) Target date for publication of rule
As part of the notice under paragraph (2), and for purposes of this subsection, the "target date for publication" (referred to in section 564(a)(5) of such title) shall be April 1, 1998.
(4) Abbreviated period for submission of comments
In applying section 564(c) of such title under this subsection, "15 days" shall be substituted for "30 days".
(5) Appointment of negotiated rulemaking committee and facilitator
The Secretary shall provide for—
(A) the appointment of a negotiated rulemaking committee under section 565(a) of such title by not later than 30 days after the end of the comment period provided for under section 564(c) of such title (as shortened under paragraph (4)), and
(B) the nomination of a facilitator under section 566(c) of such title by not later than 10 days after the date of appointment of the committee.
(6) Preliminary committee report
The negotiated rulemaking committee appointed under paragraph (5) shall report to the Secretary, by not later than January 1, 1998, regarding the committee's progress on achieving a consensus with regard to the rulemaking proceeding and whether such consensus is likely to occur before 1 month before the target date for publication of the rule. If the committee reports that the committee has failed to make significant progress towards such consensus or is unlikely to reach such consensus by the target date, the Secretary may terminate such process and provide for the publication of a rule under this subsection through such other methods as the Secretary may provide.
(7) Final committee report
If the committee is not terminated under paragraph (6), the rulemaking committee shall submit a report containing a proposed rule by not later than 1 month before the target date of publication.
(8) Interim, final effect
The Secretary shall publish a rule under this subsection in the Federal Register by not later than the target date of publication. Such rule shall be effective and final immediately on an interim basis, but is subject to change and revision after public notice and opportunity for a period (of not less than 60 days) for public comment. In connection with such rule, the Secretary shall specify the process for the timely review and approval of applications of entities to be certified as provider-sponsored organizations pursuant to such rules and consistent with this subsection.
(9) Publication of rule after public comment
The Secretary shall provide for consideration of such comments and republication of such rule by not later than 1 year after the target date of publication.
(b) Establishment of other standards
(1) In general
The Secretary shall establish by regulation other standards (not described in subsection (a)) for Medicare+Choice organizations and plans consistent with, and to carry out, this part. The Secretary shall publish such regulations by June 1, 1998. In order to carry out this requirement in a timely manner, the Secretary may promulgate regulations that take effect on an interim basis, after notice and pending opportunity for public comment.
(2) Use of current standards
Consistent with the requirements of this part, standards established under this subsection shall be based on standards established under
(3) Relation to State laws
The standards established under this part shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to MA plans which are offered by MA organizations under this part.
(4) Prohibition of midyear implementation of significant new regulatory requirements
The Secretary may not implement, other than at the beginning of a calendar year, regulations under this section that impose new, significant regulatory requirements on a Medicare+Choice organization or plan.
(Aug. 14, 1935, ch. 531, title XVIII, §1856, as added
Editorial Notes
Amendments
2003—Subsec. (b)(3).
2000—Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(iv).
Subsec. (b)(4).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2000 Amendment
§1395w–27. Contracts with Medicare+Choice organizations
(a) In general
The Secretary shall not permit the election under
(b) Minimum enrollment requirements
(1) In general
Subject to paragraph (2), the Secretary may not enter into a contract under this section with a Medicare+Choice organization unless the organization has—
(A) at least 5,000 individuals (or 1,500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization, or
(B) at least 1,500 individuals (or 500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization if the organization primarily serves individuals residing outside of urbanized areas.
(2) Application to MSA plans
In applying paragraph (1) in the case of a Medicare+Choice organization that is offering an MSA plan, paragraph (1) shall be applied by substituting covered lives for individuals.
(3) Allowing transition
The Secretary may waive the requirement of paragraph (1) during the first 3 contract years with respect to an organization.
(c) Contract period and effectiveness
(1) Period
Each contract under this section shall be for a term of at least 1 year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term.
(2) Termination authority
In accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization—
(A) has failed substantially to carry out the contract;
(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or
(C) no longer substantially meets the applicable conditions of this part.
(3) Effective date of contracts
The effective date of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract under this section which provides for coverage under an MSA plan be effective before January 1999 with respect to such coverage.
(4) Previous terminations
(A) In general
The Secretary may not enter into a contract with a Medicare+Choice organization if a previous contract with that organization under this section was terminated at the request of the organization within the preceding 2-year period, except as provided in subparagraph (B) and except in such other circumstances which warrant special consideration, as determined by the Secretary.
(B) Earlier re-entry permitted where change in payment policy
Subparagraph (A) shall not apply with respect to the offering by a Medicare+Choice organization of a Medicare+Choice plan in a Medicare+Choice payment area if during the 6-month period beginning on the date the organization notified the Secretary of the intention to terminate the most recent previous contract, there was a legislative change enacted (or a regulatory change adopted) that has the effect of increasing payment amounts under
(5) Contracting authority
The authority vested in the Secretary by this part may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this subchapter.
(d) Protections against fraud and beneficiary protections
(1) Periodic auditing
The Secretary shall provide for the annual auditing of the financial records (including data relating to medicare utilization and costs, including allowable costs under
(2) Inspection and audit
Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary—
(A) shall have the right to timely inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the facilities of the organization when there is reasonable evidence of some need for such inspection, and
(B) shall have the right to timely audit and inspect any books and records of the Medicare+Choice organization that pertain (i) to the ability of the organization to bear the risk of potential financial losses, or (ii) to services performed or determinations of amounts payable under the contract.
(3) Enrollee notice at time of termination
Each contract under this section shall require the organization to provide (and pay for) written notice in advance of the contract's termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled with the organization under this part.
(4) Disclosure
(A) In general
Each Medicare+Choice organization shall, in accordance with regulations of the Secretary, report to the Secretary financial information which shall include the following:
(i) Such information as the Secretary may require demonstrating that the organization has a fiscally sound operation.
(ii) A copy of the report, if any, filed with the Secretary containing the information required to be reported under
(iii) A description of transactions, as specified by the Secretary, between the organization and a party in interest. Such transactions shall include—
(I) any sale or exchange, or leasing of any property between the organization and a party in interest;
(II) any furnishing for consideration of goods, services (including management services), or facilities between the organization and a party in interest, but not including salaries paid to employees for services provided in the normal course of their employment and health services provided to members by hospitals and other providers and by staff, medical group (or groups), individual practice association (or associations), or any combination thereof; and
(III) any lending of money or other extension of credit between an organization and a party in interest.
The Secretary may require that information reported respecting an organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity.
(B) "Party in interest" defined
For the purposes of this paragraph, the term "party in interest" means—
(i) any director, officer, partner, or employee responsible for management or administration of a Medicare+Choice organization, any person who is directly or indirectly the beneficial owner of more than 5 percent of the equity of the organization, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 percent of the organization, and, in the case of a Medicare+Choice organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law;
(ii) any entity in which a person described in clause (i)—
(I) is an officer or director;
(II) is a partner (if such entity is organized as a partnership);
(III) has directly or indirectly a beneficial interest of more than 5 percent of the equity; or
(IV) has a mortgage, deed of trust, note, or other interest valuing more than 5 percent of the assets of such entity;
(iii) any person directly or indirectly controlling, controlled by, or under common control with an organization; and
(iv) any spouse, child, or parent of an individual described in clause (i).
(C) Access to information
Each Medicare+Choice organization shall make the information reported pursuant to subparagraph (A) available to its enrollees upon reasonable request.
(5) Loan information
The contract shall require the organization to notify the Secretary of loans and other special financial arrangements which are made between the organization and subcontractors, affiliates, and related parties.
(6) Review to ensure compliance with care management requirements for specialized Medicare Advantage plans for special needs individuals
In conjunction with the periodic audit of a specialized Medicare Advantage plan for special needs individuals under paragraph (1), the Secretary shall conduct a review to ensure that such organization offering the plan meets the requirements described in
(e) Additional contract terms
(1) In general
The contract shall contain such other terms and conditions not inconsistent with this part (including requiring the organization to provide the Secretary with such information) as the Secretary may find necessary and appropriate.
(2) Cost-sharing in enrollment-related costs
(A) In general
A Medicare+Choice organization and a PDP sponsor under part D shall pay the fee established by the Secretary under subparagraph (B).
(B) Authorization
The Secretary is authorized to charge a fee to each Medicare+Choice organization with a contract under this part and each PDP sponsor with a contract under part D that is equal to the organization's or sponsor's pro rata share (as determined by the Secretary) of the aggregate amount of fees which the Secretary is directed to collect in a fiscal year. Any amounts collected shall be available without further appropriation to the Secretary for the purpose of carrying out
(C) Authorization of appropriations
There are authorized to be appropriated for the purposes described in subparagraph (B) for each fiscal year beginning with fiscal year 2001 and ending with fiscal year 2005 an amount equal to $100,000,000, and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000, reduced by the amount of fees authorized to be collected under this paragraph and
(D) Limitation
In any fiscal year the fees collected by the Secretary under subparagraph (B) shall not exceed the lesser of—
(i) the estimated costs to be incurred by the Secretary in the fiscal year in carrying out the activities described in
(ii)(I) $200,000,000 in fiscal year 1998;
(II) $150,000,000 in fiscal year 1999;
(III) $100,000,000 in fiscal year 2000;
(IV) the Medicare+Choice portion (as defined in subparagraph (E)) of $100,000,000 in fiscal year 2001 and each succeeding fiscal year before fiscal year 2006; and
(V) the applicable portion (as defined in subparagraph (F)) of $200,000,000 in fiscal year 2006 and each succeeding fiscal year.
(E) Medicare+Choice portion defined
In this paragraph, the term "Medicare+Choice portion" means, for a fiscal year, the ratio, as estimated by the Secretary, of—
(i) the average number of individuals enrolled in Medicare+Choice plans during the fiscal year, to
(ii) the average number of individuals entitled to benefits under part A, and enrolled under part B, during the fiscal year.
(F) Applicable portion defined
In this paragraph, the term "applicable portion" means, for a fiscal year—
(i) with respect to MA organizations, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made under this part (including payments under part D that are made to such organizations); or
(ii) with respect to PDP sponsors, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made to such sponsors under part D.
(3) Agreements with federally qualified health centers
(A) Payment levels and amounts
A contract under this section with an MA organization shall require the organization to provide, in any written agreement described in
(B) Cost-sharing
Under the written agreement referred to in subparagraph (A), a federally qualified health center must accept the payment amount referred to in such subparagraph plus the Federal payment provided for in
(4) Requirement for minimum medical loss ratio
If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio of at least .85—
(A) the MA plan shall remit to the Secretary an amount equal to the product of—
(i) the total revenue of the MA plan under this part for the contract year; and
(ii) the difference between .85 and the medical loss ratio;
(B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and
(C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.
(5) Communicating plan corrective actions against opioids over-prescribers
(A) In general
Beginning with plan years beginning on or after January 1, 2021, a contract under this section with an MA organization shall require the organization to submit to the Secretary, through the process established under subparagraph (B), information on the investigations, credible evidence of suspicious activities of a provider of services (including a prescriber) or supplier related to fraud, and other actions taken by such plans related to inappropriate prescribing of opioids.
(B) Process
Not later than January 1, 2021, the Secretary shall, in consultation with stakeholders, establish a process under which MA plans and prescription drug plans shall submit to the Secretary information described in subparagraph (A).
(C) Regulations
For purposes of this paragraph, including as applied under
(i) specify a definition for the term "inappropriate prescribing" and a method for determining if a provider of services prescribes inappropriate prescribing; and
(ii) establish the process described in subparagraph (B) and the types of information that shall be submitted through such process.
(f) Prompt payment by Medicare+Choice organization
(1) Requirement
A contract under this part shall require a Medicare+Choice organization to provide prompt payment (consistent with the provisions of
(2) Secretary's option to bypass noncomplying organization
In the case of a Medicare+Choice eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with paragraph (1), the Secretary may provide for direct payment of the amounts owed to providers and suppliers (or, in the case of a Medicare+Choice private fee-for-service plan, amounts owed to the enrollees) for covered services and supplies furnished to individuals enrolled under this part under the contract. If the Secretary provides for the direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this part to reflect the amount of the Secretary's payments (and the Secretary's costs in making the payments).
(3) Incorporation of certain prescription drug plan contract requirements
The following provisions shall apply to contracts with a Medicare Advantage organization offering an MA–PD plan in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D:
(A) Prompt payment
(B) Submission of claims by pharmacies located in or contracting with long-term care facilities
(C) Regular update of prescription drug pricing standard
(D) Suspension of payments pending investigation of credible allegations of fraud by pharmacies
(E) Provision of information related to maximum fair prices
(g) Intermediate sanctions
(1) In general
If the Secretary determines that a Medicare+Choice organization with a contract under this section—
(A) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual;
(B) imposes premiums on individuals enrolled under this part in excess of the amount of the Medicare+Choice monthly basic and supplemental beneficiary premiums permitted under
(C) acts to expel or to refuse to re-enroll an individual in violation of the provisions of this part;
(D) engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services;
(E) misrepresents or falsifies information that is furnished—
(i) to the Secretary under this part, or
(ii) to an individual or to any other entity under this part;
(F) fails to comply with the applicable requirements of
(G) employs or contracts with any individual or entity that is excluded from participation under this subchapter under
(H) except as provided under subparagraph (C) or (D) of
(I) transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission;
(J) fails to comply with marketing restrictions described in subsections (h) and (j) of
(K) employs or contracts with any individual or entity who engages in the conduct described in subparagraphs (A) through (J) of this paragraph;
the Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2). The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph.
(2) Remedies
The remedies described in this paragraph are—
(A) civil money penalties of not more than $25,000 for each determination under paragraph (1) or, with respect to a determination under subparagraph (D) or (E)(i) of such paragraph, of not more than $100,000 for each such determination, except with respect to a determination under subparagraph (E),1 an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved, plus, with respect to a determination under paragraph (1)(B), double the excess amount charged in violation of such paragraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under paragraph (1)(D), $15,000 for each individual not enrolled as a result of the practice involved,
(B) suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur, or
(C) suspension of payment to the organization under this part for individuals enrolled after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur.
(3) Other intermediate sanctions
In the case of a Medicare+Choice organization for which the Secretary makes a determination under subsection (c)(2) the basis of which is not described in paragraph (1), the Secretary may apply the following intermediate sanctions:
(A) Civil money penalties of not more than $25,000 for each determination under subsection (c)(2) if the deficiency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organization's contract.
(B) Civil money penalties of not more than $10,000 for each week beginning after the initiation of civil money penalty procedures by the Secretary during which the deficiency that is the basis of a determination under subsection (c)(2) exists.
(C) Suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under subsection (c)(2) and until the Secretary is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.
(D) Civil monetary penalties of not more than $100,000, or such higher amount as the Secretary may establish by regulation, where the finding under subsection (c)(2)(A) is based on the organization's termination of its contract under this section other than at a time and in a manner provided for under subsection (a).
(4) Civil money penalties
The provisions of section 1320a–7a (other than subsections (a) and (b)) of this title shall apply to a civil money penalty under paragraph (2) or (3) in the same manner as they apply to a civil money penalty or proceeding under
(h) Procedures for termination
(1) In general
The Secretary may terminate a contract with a Medicare+Choice organization under this section in accordance with formal investigation and compliance procedures established by the Secretary under which—
(A) the Secretary provides the organization with the reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the basis of the Secretary's determination under subsection (c)(2); and
(B) the Secretary provides the organization with reasonable notice and opportunity for hearing (including the right to appeal an initial decision) before terminating the contract.
(2) Exception for imminent and serious risk to health
Paragraph (1) shall not apply if the Secretary determines that a delay in termination, resulting from compliance with the procedures specified in such paragraph prior to termination, would pose an imminent and serious risk to the health of individuals enrolled under this part with the organization.
(3) Delay in contract termination authority for plans failing to achieve minimum quality rating
During the period beginning on December 13, 2016, and through the end of plan year 2018, the Secretary may not terminate a contract under this section with respect to the offering of an MA plan by a Medicare Advantage organization solely because the MA plan has failed to achieve a minimum quality rating under the 5-star rating system under
(i) Medicare+Choice program compatibility with employer or union group health plans
(1) Contracts with MA organizations
To facilitate the offering of Medicare+Choice plans under contracts between Medicare+Choice organizations and employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such Medicare+Choice plans.
(2) Employer sponsored MA plans
To facilitate the offering of MA plans by employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such MA plans. Notwithstanding
(Aug. 14, 1935, ch. 531, title XVIII, §1857, as added
Editorial Notes
Amendments
2022—Subsec. (f)(3)(E).
2018—Subsec. (e)(5).
Subsec. (f)(3)(D).
2016—Subsec. (h)(3).
2010—Subsec. (d)(2)(A).
Subsec. (d)(2)(B).
Subsec. (e)(4).
Subsec. (g)(1).
Subsec. (g)(1)(H) to (K).
Subsec. (g)(2)(A).
2008—Subsec. (d)(6).
Subsec. (f)(3).
Subsec. (f)(3)(B).
Subsec. (f)(3)(C).
2003—Subsec. (d)(1).
Subsec. (d)(4)(A)(ii).
Subsec. (e)(2)(A).
Subsec. (e)(2)(B).
Subsec. (e)(2)(C).
Subsec. (e)(2)(D)(i).
Subsec. (e)(2)(D)(ii)(III).
Subsec. (e)(2)(D)(ii)(IV).
Subsec. (e)(2)(D)(ii)(V).
Subsec. (e)(2)(F).
Subsec. (e)(3).
Subsec. (i).
2000—Subsec. (g)(3)(D).
Subsec. (i).
1999—Subsec. (c)(4).
Subsec. (e)(2)(B).
Subsec. (e)(2)(C).
Subsec. (e)(2)(D)(ii)(II).
Subsec. (e)(2)(D)(ii)(III).
Subsec. (e)(2)(D)(ii)(IV).
Subsec. (e)(2)(E).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2018 Amendment
Effective Date of 2010 Amendment
Amendment by section 6408(b)(1) of
Effective Date of 2008 Amendment
Effective Date of 2003 Amendment
Amendment by section 222(j), (k), (l)(3)(C) of
Amendment by section 237(c) of
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Construction Relating to Additional Exceptions
Delay in Authority To Terminate Contracts for Medicare Advantage Plans Failing To Achieve Minimum Quality Ratings
"(1) to continue to study and request input on the effects of socioeconomic status and dual-eligible populations on the Medicare Advantage STARS rating system before reforming such system with the input of stakeholders; and
"(2) pending the results of such studies and input, to provide for a temporary delay in authority of the Centers for Medicare & Medicaid Services (CMS) to terminate Medicare Advantage plan contracts solely on the basis of performance of plans under the STARS rating system."
Technical Correction to MA Private Fee-for-Service Plans
Study of Multi-Year Contracts
Immediate Effective Date for Certain Requirements for Demonstrations
1 So in original. Probably means subpar. (E) of par. (1).
§1395w–27a. Special rules for MA regional plans
(a) Regional service area; establishment of MA regions
(1) Coverage of entire MA region
The service area for an MA regional plan shall consist of an entire MA region established under paragraph (2) and the provisions of
(2) Establishment of MA regions
(A) MA region
For purposes of this subchapter, the term "MA region" means such a region within the 50 States and the District of Columbia as established by the Secretary under this paragraph.
(B) Establishment
(i) Initial establishment
Not later than January 1, 2005, the Secretary shall first establish and publish MA regions.
(ii) Periodic review and revision of service areas
The Secretary may periodically review MA regions under this paragraph and, based on such review, may revise such regions if the Secretary determines such revision to be appropriate.
(C) Requirements for MA regions
The Secretary shall establish, and may revise, MA regions under this paragraph in a manner consistent with the following:
(i) Number of regions
There shall be no fewer than 10 regions, and no more than 50 regions.
(ii) Maximizing availability of plans
The regions shall maximize the availability of MA regional plans to all MA eligible individuals without regard to health status, especially those residing in rural areas.
(D) Market survey and analysis
Before establishing MA regions, the Secretary shall conduct a market survey and analysis, including an examination of current insurance markets, to determine how the regions should be established.
(3) National plan
Nothing in this subsection shall be construed as preventing an MA regional plan from being offered in more than one MA region (including all regions).
(b) Application of single deductible and catastrophic limit on out-of-pocket expenses
An MA regional plan shall include the following:
(1) Single deductible
Any deductible for benefits under the original medicare fee-for-service program option shall be a single deductible (instead of a separate inpatient hospital deductible and a part B deductible) and may be applied differentially for in-network services and may be waived for preventive or other items and services.
(2) Catastrophic limit
(A) In-network
A catastrophic limit on out-of-pocket expenditures for in-network benefits under the original medicare fee-for-service program option.
(B) Total
A catastrophic limit on out-of-pocket expenditures for all benefits under the original medicare fee-for-service program option.
(c) Portion of total payments to an organization subject to risk for 2006 and 2007
(1) Application of risk corridors
(A) In general
This subsection shall only apply to MA regional plans offered during 2006 or 2007.
(B) Notification of allowable costs under the plan
In the case of an MA organization that offers an MA regional plan in an MA region in 2006 or 2007, the organization shall notify the Secretary, before such date in the succeeding year as the Secretary specifies, of—
(i) its total amount of costs that the organization incurred in providing benefits covered under the original medicare fee-for-service program option for all enrollees under the plan in the region in the year and the portion of such costs that is attributable to administrative expenses described in subparagraph (C); and
(ii) its total amount of costs that the organization incurred in providing rebatable integrated benefits (as defined in subparagraph (D)) and with respect to such benefits the portion of such costs that is attributable to administrative expenses described in subparagraph (C) and not described in clause (i) of this subparagraph.
(C) Allowable costs defined
For purposes of this subsection, the term "allowable costs" means, with respect to an MA regional plan for a year, the total amount of costs described in subparagraph (B) for the plan and year, reduced by the portion of such costs attributable to administrative expenses incurred in providing the benefits described in such subparagraph.
(D) Rebatable integrated benefits
For purposes of this subsection, the term "rebatable integrated benefits" means such non-drug supplemental benefits under subclause (I) of
(2) Adjustment of payment
(A) No adjustment if allowable costs within 3 percent of target amount
If the allowable costs for the plan for the year are at least 97 percent, but do not exceed 103 percent, of the target amount for the plan and year, there shall be no payment adjustment under this subsection for the plan and year.
(B) Increase in payment if allowable costs above 103 percent of target amount
(i) Costs between 103 and 108 percent of target amount
If the allowable costs for the plan for the year are greater than 103 percent, but not greater than 108 percent, of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under
(ii) Costs above 108 percent of target amount
If the allowable costs for the plan for the year are greater than 108 percent of the target amount for the plan and year, the Secretary shall increase the total of the monthly payments made to the organization offering the plan for the year under
(I) 2.5 percent of such target amount; and
(II) 80 percent of the difference between such allowable costs and 108 percent of such target amount.
(C) Reduction in payment if allowable costs below 97 percent of target amount
(i) Costs between 92 and 97 percent of target amount
If the allowable costs for the plan for the year are less than 97 percent, but greater than or equal to 92 percent, of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under
(ii) Costs below 92 percent of target amount
If the allowable costs for the plan for the year are less than 92 percent of the target amount for the plan and year, the Secretary shall reduce the total of the monthly payments made to the organization offering the plan for the year under
(I) 2.5 percent of such target amount; and
(II) 80 percent of the difference between 92 percent of such target amount and such allowable costs.
(D) Target amount described
For purposes of this paragraph, the term "target amount" means, with respect to an MA regional plan offered by an organization in a year, an amount equal to—
(i) the sum of—
(I) the total monthly payments made to the organization for enrollees in the plan for the year that are attributable to benefits under the original medicare fee-for-service program option (as defined in
(II) the total of the MA monthly basic beneficiary premium collectable for such enrollees for the year; and
(III) the total amount of the rebates under
(ii) the amount of administrative expenses assumed in the bid insofar as the bid is attributable to benefits described in clause (i)(I) or (i)(III).
(3) Disclosure of information
(A) In general
Each contract under this part shall provide—
(i) that an MA organization offering an MA regional plan shall provide the Secretary with such information as the Secretary determines is necessary to carry out this subsection; and
(ii) that, pursuant to
(B) Restriction on use of information
Information disclosed or obtained pursuant to the provisions of this subsection may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this subsection.
(d) Organizational and financial requirements
(1) In general
In the case of an MA organization that is offering an MA regional plan in an MA region and—
(A) meets the requirements of
(B) with respect to each other State in such region in which it does not meet requirements, it demonstrates to the satisfaction of the Secretary that it has filed the necessary application to meet such requirements,
the Secretary may waive such requirement with respect to each State described in subparagraph (B) for such period of time as the Secretary determines appropriate for the timely processing of such an application by the State (and, if such application is denied, through the end of such plan year as the Secretary determines appropriate to provide for a transition).
(2) Selection of appropriate State
In applying paragraph (1) in the case of an MA organization that meets the requirements of
(e) Repealed. Pub. L. 111–148, title X, §10327(c)(1), Mar. 23, 2010, 124 Stat. 964
(f) Computation of applicable MA region-specific non-drug monthly benchmark amounts
(1) Computation for regions
For purposes of
(2) 2 components
For purposes of paragraph (1), the 2 components described in this paragraph for an MA region and a year are the following:
(A) Statutory component
The product of the following:
(i) Statutory region-specific non-drug amount
The statutory region-specific non-drug amount (as defined in paragraph (3)) for the region and year.
(ii) Statutory national market share
The statutory national market share percentage, determined under paragraph (4) for the year.
(B) Plan-bid component
The product of the following:
(i) Weighted average of MA plan bids in region
The weighted average of the plan bids for the region and year (as determined under paragraph (5)(A)).
(ii) Non-statutory market share
1 minus the statutory national market share percentage, determined under paragraph (4) for the year.
(3) Statutory region-specific non-drug amount
For purposes of paragraph (2)(A)(i), the term "statutory region-specific non-drug amount" means, for an MA region and year, an amount equal the sum (for each MA local area within the region) of the product of—
(A) MA area-specific non-drug monthly benchmark amount under
(B) the number of MA eligible individuals residing in the local area, divided by the total number of MA eligible individuals residing in the region.
(4) Computation of statutory market share percentage
(A) In general
The Secretary shall determine for each year a statutory national market share percentage that is equal to the proportion of MA eligible individuals nationally who were not enrolled in an MA plan during the reference month.
(B) Reference month defined
For purposes of this part, the term "reference month" means, with respect to a year, the most recent month during the previous year for which the Secretary determines that data are available to compute the percentage specified in subparagraph (A) and other relevant percentages under this part.
(5) Determination of weighted average MA bids for a region
(A) In general
For purposes of paragraph (2)(B)(i), the weighted average of plan bids for an MA region and a year is the sum, for MA regional plans described in subparagraph (D) in the region and year, of the products (for each such plan) of the following:
(i) Monthly MA statutory non-drug bid amount
The unadjusted MA statutory non-drug monthly bid amount for the plan.
(ii) Plan's share of MA enrollment in region
The factor described in subparagraph (B) for the plan.
(B) Plan's share of MA enrollment in region
(i) In general
Subject to the succeeding provisions of this subparagraph, the factor described in this subparagraph for a plan is equal to the number of individuals described in subparagraph (C) for such plan, divided by the total number of such individuals for all MA regional plans described in subparagraph (D) for that region and year.
(ii) Single plan rule
In the case of an MA region in which only a single MA regional plan is being offered, the factor described in this subparagraph shall be equal to 1.
(iii) Equal division among multiple plans in year in which plans are first available
In the case of an MA region in the first year in which any MA regional plan is offered, if more than one MA regional plan is offered in such year, the factor described in this subparagraph for a plan shall (as specified by the Secretary) be equal to—
(I) 1 divided by the number of such plans offered in such year; or
(II) a factor for such plan that is based upon the organization's estimate of projected enrollment, as reviewed and adjusted by the Secretary to ensure reasonableness and as is certified by the Chief Actuary of the Centers for Medicare & Medicaid Services.
(C) Counting of individuals
For purposes of subparagraph (B)(i), the Secretary shall count for each MA regional plan described in subparagraph (D) for an MA region and year, the number of individuals who reside in the region and who were enrolled under such plan under this part during the reference month.
(D) Plans covered
For an MA region and year, an MA regional plan described in this subparagraph is an MA regional plan that is offered in the region and year and was offered in the region in the reference month.
(g) Election of uniform coverage determination
Instead of applying
(h) Assuring network adequacy
(1) In general
For purposes of enabling MA organizations that offer MA regional plans to meet applicable provider access requirements under
(A) the organization provides assurances satisfactory to the Secretary that the organization will make payment to the hospital for inpatient hospital services of an amount that is not less than the amount that would be payable to the hospital under
(B) with respect to specific inpatient hospital services provided to an enrollee, the hospital demonstrates to the satisfaction of the Secretary that the hospital's costs of such services exceed the payment amount described in subparagraph (A).
(2) Payment amounts
The payment amount under this subsection for inpatient hospital services provided by a subsection (d) hospital to an enrollee in an MA regional plan shall be, subject to the limitation of funds under paragraph (3), the amount (if any) by which—
(A) the amount of payment that would have been paid for such services under this subchapter if the enrollees were covered under the original medicare fee-for-service program option and the hospital were a critical access hospital; exceeds
(B) the amount of payment made for such services under paragraph (1)(A).
(3) Available amounts
There shall be available for payments under this subsection—
(A) in 2006, $25,000,000; and
(B) in each succeeding year the amount specified in this paragraph for the preceding year increased by the market basket percentage increase (as defined in
Payments under this subsection shall be made from the Federal Hospital Insurance Trust Fund.
(4) Essential hospital
In this subsection, the term "essential hospital" means, with respect to an MA regional plan offered by an MA organization, a subsection (d) hospital (as defined in
(Aug. 14, 1935, ch. 531, title XVIII, §1858, as added
Editorial Notes
Amendments
2010—Subsec. (e).
Subsec. (f)(1).
Subsec. (f)(3)(A).
Subsec. (i).
2009—Subsec. (e)(7).
2008—Subsec. (e)(2)(A)(i).
2007—Subsec. (e)(2)(A)(i).
"(I) during 2012, $1,600,000,000; and
"(II) during 2013, $1,790,000,000."
to reflect the probable intent of Congress.
"(I) during 2012, $1,600,000,000; and
"(II) during 2013, $1,790,000,000."
for "the Fund during the period beginning on January 1, 2012, and ending on December 31, 2013, a total of $3,500,000,000."
2006—Subsec. (e)(2)(A)(i).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Repeal of sections 3201 and 3203 of
Effective Date
Section applicable with respect to plan years beginning on or after Jan. 1, 2006, see section 223(a) of
Elimination of MA Regional Plan Stabilization Fund; Transition
§1395w–28. Definitions; miscellaneous provisions
(a) Definitions relating to Medicare+Choice organizations
In this part—
(1) Medicare+Choice organization
The term "Medicare+Choice organization" means a public or private entity that is certified under
(2) Provider-sponsored organization
The term "provider-sponsored organization" is defined in
(b) Definitions relating to Medicare+Choice plans
(1) Medicare+Choice plan
The term "Medicare+Choice plan" means health benefits coverage offered under a policy, contract, or plan by a Medicare+Choice organization pursuant to and in accordance with a contract under
(2) Medicare+Choice private fee-for-service plan
The term "Medicare+Choice private fee-for-service plan" means a Medicare+Choice plan that—
(A) reimburses hospitals, physicians, and other providers at a rate determined by the plan on a fee-for-service basis without placing the provider at financial risk;
(B) does not vary such rates for such a provider based on utilization relating to such provider; and
(C) does not restrict the selection of providers among those who are lawfully authorized to provide the covered services and agree to accept the terms and conditions of payment established by the plan.
Nothing in subparagraph (B) shall be construed to preclude a plan from varying rates for such a provider based on the specialty of the provider, the location of the provider, or other factors related to such provider that are not related to utilization, or to preclude a plan from increasing rates for such a provider based on increased utilization of specified preventive or screening services.
(3) MSA plan
(A) In general
The term "MSA plan" means a Medicare+Choice plan that—
(i) provides reimbursement for at least the items and services described in
(ii) counts as such expenses (for purposes of such deductible) at least all amounts that would have been payable under parts A and B, and that would have been payable by the enrollee as deductibles, coinsurance, or copayments, if the enrollee had elected to receive benefits through the provisions of such parts; and
(iii) provides, after such deductible is met for a year and for all subsequent expenses for items and services referred to in clause (i) in the year, for a level of reimbursement that is not less than—
(I) 100 percent of such expenses, or
(II) 100 percent of the amounts that would have been paid (without regard to any deductibles or coinsurance) under parts A and B with respect to such expenses,
whichever is less.
(B) Deductible
The amount of annual deductible under an MSA plan—
(i) for contract year 1999 shall be not more than $6,000; and
(ii) for a subsequent contract year shall be not more than the maximum amount of such deductible for the previous contract year under this subparagraph increased by the national per capita Medicare+Choice growth percentage under
If the amount of the deductible under clause (ii) is not a multiple of $50, the amount shall be rounded to the nearest multiple of $50.
(4) MA regional plan
The term "MA regional plan" means an MA plan described in
(A) that has a network of providers that have agreed to a contractually specified reimbursement for covered benefits with the organization offering the plan;
(B) that provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and
(C) the service area of which is one or more entire MA regions.
(5) MA local plan
The term "MA local plan" means an MA plan that is not an MA regional plan.
(6) Specialized MA plans for special needs individuals
(A) In general
The term "specialized MA plan for special needs individuals" means an MA plan that exclusively serves special needs individuals (as defined in subparagraph (B)) and that, as of January 1, 2010, meets the applicable requirements of paragraph (2), (3), or (4) of subsection (f), as the case may be.
(B) Special needs individual
The term "special needs individual" means an MA eligible individual who—
(i) is institutionalized (as defined by the Secretary);
(ii) is entitled to medical assistance under a State plan under subchapter XIX; or
(iii) meets such requirements as the Secretary may determine would benefit from enrollment in such a specialized MA plan described in subparagraph (A) for individuals with severe or disabling chronic conditions who—
(I) before January 1, 2022, have one or more comorbid and medically complex chronic conditions that are substantially disabling or life threatening, have a high risk of hospitalization or other significant adverse health outcomes, and require specialized delivery systems across domains of care; and
(II) on or after January 1, 2022, have one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits 1 overall health or function, have a high risk of hospitalization or other adverse health outcomes, and require intensive care coordination and that is listed under subsection (f)(9)(A).
The Secretary may apply rules similar to the rules of
(c) Other references to other terms
(1) Medicare+Choice eligible individual
The term "Medicare+Choice eligible individual" is defined in
(2) Medicare+Choice payment area
The term "Medicare+Choice payment area" is defined in
(3) National per capita Medicare+Choice growth percentage
The "national per capita Medicare+Choice growth percentage" is defined in
(4) Medicare+Choice monthly basic beneficiary premium; Medicare+Choice monthly supplemental beneficiary premium
The terms "Medicare+Choice monthly basic beneficiary premium" and "Medicare+Choice monthly supplemental beneficiary premium" are defined in
(5) MA local area
The term "MA local area" is defined in
(d) Coordinated acute and long-term care benefits under Medicare+Choice plan
Nothing in this part shall be construed as preventing a State from coordinating benefits under a medicaid plan under subchapter XIX with those provided under a Medicare+Choice plan in a manner that assures continuity of a full-range of acute care and long-term care services to poor elderly or disabled individuals eligible for benefits under this subchapter and under such plan.
(e) Restriction on enrollment for certain Medicare+Choice plans
(1) In general
In the case of a Medicare+Choice religious fraternal benefit society plan described in paragraph (2), notwithstanding any other provision of this part to the contrary and in accordance with regulations of the Secretary, the society offering the plan may restrict the enrollment of individuals under this part to individuals who are members of the church, convention, or group described in paragraph (3)(B) with which the society is affiliated.
(2) Medicare+Choice religious fraternal benefit society plan described
For purposes of this subsection, a Medicare+Choice religious fraternal benefit society plan described in this paragraph is a Medicare+Choice plan described in
(A) is offered by a religious fraternal benefit society described in paragraph (3) only to members of the church, convention, or group described in paragraph (3)(B); and
(B) permits all such members to enroll under the plan without regard to health status-related factors.
Nothing in this subsection shall be construed as waiving any plan requirements relating to financial solvency.
(3) "Religious fraternal benefit society" defined
For purposes of paragraph (2)(A), a "religious fraternal benefit society" described in this section is an organization that—
(A) is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of such Act;
(B) is affiliated with, carries out the tenets of, and shares a religious bond with, a church or convention or association of churches or an affiliated group of churches;
(C) offers, in addition to a Medicare+Choice religious fraternal benefit society plan, health coverage to individuals not entitled to benefits under this subchapter who are members of such church, convention, or group; and
(D) does not impose any limitation on membership in the society based on any health status-related factor.
(4) Payment adjustment
Under regulations of the Secretary, in the case of individuals enrolled under this part under a Medicare+Choice religious fraternal benefit society plan described in paragraph (2), the Secretary shall provide for such adjustment to the payment amounts otherwise established under
(f) Requirements regarding enrollment in specialized MA plans for special needs individuals
(1) Requirements for enrollment
In the case of a specialized MA plan for special needs individuals (as defined in subsection (b)(6)), notwithstanding any other provision of this part and in accordance with regulations of the Secretary, the plan may restrict the enrollment of individuals under the plan to individuals who are within one or more classes of special needs individuals.
(2) Additional requirements for institutional SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(i), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individuals described in subsection (b)(6)(B)(i). In the case of an individual who is living in the community but requires an institutional level of care, such individual shall not be considered a special needs individual described in subsection (b)(6)(B)(i) unless the determination that the individual requires an institutional level of care was made—
(i) using a State assessment tool of the State in which the individual resides; and
(ii) by an entity other than the organization offering the plan.
(B) The plan meets the requirements described in paragraph (5).
(C) If applicable, the plan meets the requirement described in paragraph (7).
(3) Additional requirements for dual SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individuals 2 described in subsection (b)(6)(B)(ii).
(B) The plan meets the requirements described in paragraph (5).
(C) The plan provides each prospective enrollee, prior to enrollment, with a comprehensive written statement (using standardized content and format established by the Secretary) that describes—
(i) the benefits and cost-sharing protections that the individual is entitled to under the State Medicaid program under subchapter XIX; and
(ii) which of such benefits and cost-sharing protections are covered under the plan.
Such statement shall be included with any description of benefits offered by the plan.
(D) The plan has a contract with the State Medicaid agency to provide benefits, or arrange for benefits to be provided, for which such individual is entitled to receive as medical assistance under subchapter XIX. Such benefits may include long-term care services consistent with State policy.
(E) If applicable, the plan meets the requirement described in paragraph (7).
(F) The plan meets the requirements applicable under paragraph (8).
(4) Additional requirements for severe or disabling chronic condition SNPS
In the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(iii), the applicable requirements described in this paragraph are as follows:
(A) Each individual that enrolls in the plan on or after January 1, 2010, is a special needs individual described in subsection (b)(6)(B)(iii).
(B) The plan meets the requirements described in paragraph (5).
(C) If applicable, the plan meets the requirement described in paragraph (7).
(5) Care management requirements for all SNPs
(A) In general
Subject to subparagraph (B), the requirements described in this paragraph are that the organization offering a specialized MA plan for special needs individuals—
(i) have in place an evidenced-based model of care with appropriate networks of providers and specialists; and
(ii) with respect to each individual enrolled in the plan—
(I) conduct an initial assessment and an annual reassessment of the individual's physical, psychosocial, and functional needs;
(II) develop a plan, in consultation with the individual as feasible, that identifies goals and objectives, including measurable outcomes as well as specific services and benefits to be provided; and
(III) use an interdisciplinary team in the management of care.
(B) Improvements to care management requirements for severe or disabling chronic condition SNPs
For 2020 and subsequent years, in the case of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(iii), the requirements described in this paragraph include the following:
(i) The interdisciplinary team under subparagraph (A)(ii)(III) includes a team of providers with demonstrated expertise, including training in an applicable specialty, in treating individuals similar to the targeted population of the plan.
(ii) Requirements developed by the Secretary to provide face-to-face encounters with individuals enrolled in the plan not less frequently than on an annual basis.
(iii) As part of the model of care under clause (i) of subparagraph (A), the results of the initial assessment and annual reassessment under clause (ii)(I) of such subparagraph of each individual enrolled in the plan are addressed in the individual's individualized care plan under clause (ii)(II) of such subparagraph.
(iv) As part of the annual evaluation and approval of such model of care, the Secretary shall take into account whether the plan fulfilled the previous year's goals (as required under the model of care).
(v) The Secretary shall establish a minimum benchmark for each element of the model of care of a plan. The Secretary shall only approve a plan's model of care under this paragraph if each element of the model of care meets the minimum benchmark applicable under the preceding sentence.
(6) Transition and exception regarding restriction on enrollment
(A) In general
Subject to subparagraph (C), the Secretary shall establish procedures for the transition of applicable individuals to—
(i) a Medicare Advantage plan that is not a specialized MA plan for special needs individuals (as defined in subsection (b)(6)); or
(ii) the original medicare fee-for-service program under parts A and B.
(B) Applicable individuals
For purposes of clause (i), the term "applicable individual" means an individual who—
(i) is enrolled under a specialized MA plan for special needs individuals (as defined in subsection (b)(6)); and
(ii) is not within the 1 or more of the classes of special needs individuals to which enrollment under the plan is restricted to.
(C) Exception
The Secretary shall provide for an exception to the transition described in subparagraph (A) for a limited period of time for individuals enrolled under a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) who are no longer eligible for medical assistance under subchapter XIX.
(D) Timeline for initial transition
The Secretary shall ensure that applicable individuals enrolled in a specialized MA plan for special needs individuals (as defined in subsection (b)(6)) prior to January 1, 2010, are transitioned to a plan or the program described in subparagraph (A) by not later than January 1, 2013.
(7) Authority to require special needs plans be NCQA approved
For 2012 and subsequent years, the Secretary shall require that a Medicare Advantage organization offering a specialized MA plan for special needs individuals be approved by the National Committee for Quality Assurance (based on standards established by the Secretary).
(8) Increased integration of dual SNPs
(A) Designated contact
The Secretary, acting through the Federal Coordinated Health Care Office established under
(i) a uniform process for disseminating to State Medicaid agencies information under this subchapter impacting contracts between such agencies and such plans under this subsection; and
(ii) basic resources for States interested in exploring such plans as a platform for integration, such as a model contract or other tools to achieve those goals.
(B) Unified grievances and appeals process
(i) In general
Not later than April 1, 2020, the Secretary shall establish procedures, to the extent feasible as determined by the Secretary, unifying grievances and appeals procedures under
(ii) Procedures
The procedures established under clause (i) shall be included in the plan contract under paragraph (3)(D) and shall—
(I) adopt the provisions for the enrollee that are most protective for the enrollee and, to the extent feasible as determined by the Secretary, are compatible with unified timeframes and consolidated access to external review under an integrated process;
(II) take into account differences in State plans under subchapter XIX to the extent necessary;
(III) be easily navigable by an enrollee; and
(IV) include the elements described in clause (iii), as applicable.
(iii) Elements described
Both unified appeals and unified grievance procedures shall include, as applicable, the following elements described in this clause:
(I) Single written notification of all applicable grievances and appeal rights under this subchapter and subchapter XIX. For purposes of this subparagraph, the Secretary may waive the requirements under
(II) Single pathways for resolution of any grievance or appeal related to a particular item or service provided by specialized MA plans for special needs individuals described in subsection (b)(6)(B)(ii) under this subchapter and subchapter XIX.
(III) Notices written in plain language and available in a language and format that is accessible to the enrollee, including in non-English languages that are prevalent in the service area of the specialized MA plan.
(IV) Unified timeframes for grievances and appeals processes, such as an individual's filing of a grievance or appeal, a plan's acknowledgment and resolution of a grievance or appeal, and notification of decisions with respect to a grievance or appeal.
(V) Requirements for how the plan must process, track, and resolve grievances and appeals, to ensure beneficiaries are notified on a timely basis of decisions that are made throughout the grievance or appeals process and are able to easily determine the status of a grievance or appeal.
(iv) Continuation of benefits pending appeal
The unified procedures under clause (i) shall, with respect to all benefits under parts A and B and subchapter XIX subject to appeal under such procedures, incorporate provisions under current law and implementing regulations that provide continuation of benefits pending appeal under this subchapter and subchapter XIX.
(C) Requirement for unified grievances and appeals
For 2021 and subsequent years, the contract of a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) with a State Medicaid agency under paragraph (3)(D) shall require the use of unified grievances and appeals procedures as described in subparagraph (B).
(D) Requirements for integration
(i) In general
For 2021 and subsequent years, a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) shall meet one or more of the following requirements, to the extent permitted under State law, for integration of benefits under this subchapter and subchapter XIX:
(I) The specialized MA plan must meet the requirements of contracting with the State Medicaid agency described in paragraph (3)(D) in addition to coordinating long-term services and supports or behavioral health services, or both, by meeting an additional minimum set of requirements determined by the Secretary through the Federal Coordinated Health Care Office established under
(II) The specialized MA plan must meet the requirements of a fully integrated plan described in
(III) In the case of a specialized MA plan that is offered by a parent organization that is also the parent organization of a Medicaid managed care organization providing long term services and supports or behavioral services under a contract under
(ii) Suspension of enrollment for failure to meet requirements during initial period
During the period of plan years 2021 through 2025, if the Secretary determines that a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) has failed to comply with clause (i), the Secretary may provide for the application against the Medicare Advantage organization offering the plan of the remedy described in
(E) Study and report to Congress
(i) In general
Not later than March 15, 2022, and, subject to clause (iii), biennially thereafter through 2032, the Medicare Payment Advisory Commission established under
(I) A comparison group of such plans that are described in subparagraph (D)(i)(I).
(II) A comparison group of such plans that are described in subparagraph (D)(i)(II).
(III) A comparison group of such plans operating within the Financial Alignment Initiative demonstration for the period for which such plan is so operating and the demonstration is in effect, and, in the case that an integration option that is not with respect to specialized MA plans for special needs individuals is established after the conclusion of the demonstration involved.
(IV) A comparison group of such plans that are described in subparagraph (D)(i)(III).
(V) A comparison group of MA plans, as feasible, not described in a previous subclause of this clause, with respect to the performance of such plans for enrollees who are special needs individuals described in subsection (b)(6)(B)(ii).
(ii) Additional reports
Beginning with 2033 and every five years thereafter, the Medicare Payment Advisory Commission, in consultation with the Medicaid and CHIP Payment and Access Commission, shall conduct a study described in clause (i).
(9) List of conditions for clarification of the definition of a severe or disabling chronic conditions specialized needs individual
(A) In general
Not later than December 31, 2020, and every 5 years thereafter, subject to subparagraphs (B) and (C), the Secretary shall convene a panel of clinical advisors to establish and update a list of conditions that meet each of the following criteria:
(i) Conditions that meet the definition of a severe or disabling chronic condition under subsection (b)(6)(B)(iii) on or after January 1, 2022.
(ii) Conditions that require prescription drugs, providers, and models of care that are unique to the specific population of enrollees in a specialized MA plan for special needs individuals described in such subsection on or after such date and—
(I) as a result of access to, and enrollment in, such a specialized MA plan for special needs individuals, individuals with such condition would have a reasonable expectation of slowing or halting the progression of the disease, improving health outcomes and decreasing overall costs for individuals diagnosed with such condition compared to available options of care other than through such a specialized MA plan for special needs individuals; or
(II) have a low prevalence in the general population of beneficiaries under this subchapter or a disproportionally high per-beneficiary cost under this subchapter.
(B) Inclusion of certain conditions
The conditions listed under subparagraph (A) shall include HIV/AIDS, end stage renal disease, and chronic and disabling mental illness.
(C) Requirement
In establishing and updating the list under subparagraph (A), the panel shall take into account the availability of varied benefits, cost-sharing, and supplemental benefits under the model described in paragraph (2) of
(g) Special rules for senior housing facility plans
(1) In general
In the case of a Medicare Advantage senior housing facility plan described in paragraph (2), notwithstanding any other provision of this part to the contrary and in accordance with regulations of the Secretary, the service area of such plan may be limited to a senior housing facility in a geographic area.
(2) Medicare Advantage senior housing facility plan described
For purposes of this subsection, a Medicare Advantage senior housing facility plan is a Medicare Advantage plan that—
(A) restricts enrollment of individuals under this part to individuals who reside in a continuing care retirement community (as defined in
(B) provides primary care services onsite and has a ratio of accessible physicians to beneficiaries that the Secretary determines is adequate;
(C) provides transportation services for beneficiaries to specialty providers outside of the facility; and
(D) has participated (as of December 31, 2009) in a demonstration project established by the Secretary under which such a plan was offered for not less than 1 year.
(h) National testing of Medicare Advantage Value-Based Insurance Design model
(1) In general
In implementing the Medicare Advantage Value-Based Insurance Design model that is being tested under
(2) Termination and modification provision not applicable until January 1, 2022
The provisions of
(3) Funding
The Secretary shall allocate funds made available under
(i) Program integrity transparency measures
(1) Program integrity portal
(A) In general
Not later than 2 years after October 24, 2018, the Secretary shall, after consultation with stakeholders, establish a secure internet website portal (or other successor technology) that would allow a secure path for communication between the Secretary, MA plans under this part, prescription drug plans under part D, and an eligible entity with a contract under
(i) the referral by such plans of substantiated or suspicious activities, as defined by the Secretary, of a provider of services (including a prescriber) or supplier related to fraud, waste, and abuse for initiating or assisting investigations conducted by the eligible entity; and
(ii) data sharing among such MA plans, prescription drug plans, and the Secretary.
(B) Required uses of portal
The Secretary shall disseminate the following information to MA plans under this part and prescription drug plans under part D through the secure internet website portal (or other successor technology) established under subparagraph (A):
(i) Providers of services and suppliers that have been referred pursuant to subparagraph (A)(i) during the previous 12-month period.
(ii) Providers of services and suppliers who are the subject of an active exclusion under
(iii) Providers of services and suppliers who are the subject of an active revocation of participation under this subchapter, including for not satisfying conditions of participation.
(iv) In the case of such a plan that makes a referral under subparagraph (A)(i) through the portal (or other successor technology) with respect to activities of substantiated or suspicious activities of fraud, waste, or abuse of a provider of services (including a prescriber) or supplier, if such provider (including a prescriber) or supplier has been the subject of an administrative action under this subchapter or subchapter XI with respect to similar activities, a notification to such plan of such action so taken.
(C) Rulemaking
For purposes of this paragraph, the Secretary shall, through rulemaking, specify what constitutes substantiated or suspicious activities of fraud, waste, and abuse, using guidance such as what is provided in the Medicare Program Integrity Manual 4.8. In carrying out this subsection, a fraud hotline tip (as defined by the Secretary) without further evidence shall not be treated as sufficient evidence for substantiated fraud, waste, or abuse.
(D) HIPAA compliant information only
For purposes of this subsection, communications may only occur if the communications are permitted under the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996.
(2) Quarterly reports
Beginning not later than 2 years after October 24, 2018, the Secretary shall make available to MA plans under this part and prescription drug plans under part D in a timely manner (but no less frequently than quarterly) and using information submitted to an entity described in paragraph (1) through the portal (or other successor technology) described in such paragraph or pursuant to
(A) include administrative actions, pertinent information related to opioid overprescribing, and other data determined appropriate by the Secretary in consultation with stakeholders; and
(B) be anonymized information submitted by plans without identifying the source of such information.
(3) Clarification
Nothing in this subsection shall preclude or otherwise affect referrals to the Inspector General of the Department of Health and Human Services or other law enforcement entities.
(Aug. 14, 1935, ch. 531, title XVIII, §1859, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (e)(3)(A), is classified generally to Title 26, Internal Revenue Code.
Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (i)(1)(D), is section 264(c) of
Amendments
2018—Subsec. (b)(6)(B)(iii).
Subsec. (f)(1).
Subsec. (f)(3)(F).
Subsec. (f)(5).
Subsec. (f)(8).
Subsec. (f)(9).
Subsec. (h).
Subsec. (i).
2016—Subsec. (b)(6).
2015—Subsec. (f)(1).
2014—Subsec. (f)(1).
2013—Subsec. (f)(1).
Subsec. (f)(1).
2010—Subsec. (f)(1).
Subsec. (f)(2)(C).
Subsec. (f)(3)(E).
Subsec. (f)(4)(C).
Subsec. (f)(5).
Subsec. (f)(6), (7).
Subsec. (g).
2008—Subsec. (b)(2).
Subsec. (b)(6)(A).
Subsec. (b)(6)(B)(iii).
Subsec. (f).
Subsec. (f)(5).
2007—Subsec. (f).
2003—Subsec. (b)(4), (5).
Subsec. (b)(6).
Subsec. (c)(5).
Subsec. (f).
1999—Subsec. (e)(2).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2016 Amendment
Amendment by
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 164(c)(1), (d)(1), (e)(1) of
Effective Date of 2003 Amendment
Amendment by section 221(b)(1), (d)(2) of
Amendment by section 231(b), (c) of
Regulations
Authorization To Operate; Resources for State Medicaid Agencies; Contracting Requirements
"(2)
"(A) shall permit such plan to be offered under part C of title XVIII of such Act [
"(B) shall not permit an expansion of the service area of the plan under such part C.
"(3)
"(4)
Panel of Clinical Advisors to Determine Conditions
No Effect on Medicaid Benefits for Duals
Authority To Designate Other Plans as Specialized MA Plans
Secretary of Health and Human Services authorized, in promulgating regulations to carry out subsection (b)(6) of this section, to provide, notwithstanding subsection (b)(6)(A) of this section, for the offering of specialized MA plans for special needs individuals by MA plans that disproportionately serve special needs individuals, see section 231(d) of
1 So in original. Probably should be "that are life threatening or significantly limit".
2 So in original. Probably should be "individual".
§1395w–29. Repealed. Pub. L. 111–152, title I, §1102(f), Mar. 30, 2010, 124 Stat. 1046
Section, act Aug. 14, 1935, ch. 531, title XVIII, §1860C–1, as added
Part D—Voluntary Prescription Drug Benefit Program
Editorial Notes
Prior Provisions
A prior part D of this subchapter, consisting of section 1395x et seq., was redesignated part E of this subchapter.
subpart 1—part d eligible individuals and prescription drug benefits
§1395w–101. Eligibility, enrollment, and information
(a) Provision of qualified prescription drug coverage through enrollment in plans
(1) In general
Subject to the succeeding provisions of this part, each part D eligible individual (as defined in paragraph (3)(A)) is entitled to obtain qualified prescription drug coverage (described in
(A) Fee-for-service enrollees may receive coverage through a prescription drug plan
A part D eligible individual who is not enrolled in an MA plan may obtain qualified prescription drug coverage through enrollment in a prescription drug plan (as defined in
(B) Medicare Advantage enrollees
(i) Enrollees in a plan providing qualified prescription drug coverage receive coverage through the plan
A part D eligible individual who is enrolled in an MA–PD plan obtains such coverage through such plan.
(ii) Limitation on enrollment of MA plan enrollees in prescription drug plans
Except as provided in clauses (iii) and (iv), a part D eligible individual who is enrolled in an MA plan may not enroll in a prescription drug plan under this part.
(iii) Private fee-for-service enrollees in MA plans not providing qualified prescription drug coverage permitted to enroll in a prescription drug plan
A part D eligible individual who is enrolled in an MA private fee-for-service plan (as defined in
(iv) Enrollees in MSA plans permitted to enroll in a prescription drug plan
A part D eligible individual who is enrolled in an MSA plan (as defined in
(2) Coverage first effective January 1, 2006
Coverage under prescription drug plans and MA–PD plans shall first be effective on January 1, 2006.
(3) Definitions
For purposes of this part:
(A) Part D eligible individual
The term "part D eligible individual" means an individual who is entitled to benefits under part A or enrolled under part B (but not including an individual enrolled solely for coverage of immunosuppressive drugs under
(B) MA plan
The term "MA plan" has the meaning given such term in
(C) MA–PD plan
The term "MA–PD plan" means an MA plan that provides qualified prescription drug coverage.
(b) Enrollment process for prescription drug plans
(1) Establishment of process
(A) In general
The Secretary shall establish a process for the enrollment, disenrollment, termination, and change of enrollment of part D eligible individuals in prescription drug plans consistent with this subsection.
(B) Application of MA rules
In establishing such process, the Secretary shall use rules similar to (and coordinated with) the rules for enrollment, disenrollment, termination, and change of enrollment with an MA–PD plan under the following provisions of
(i) Residence requirements
(ii) Exercise of choice
(iii) Coverage election periods
Subject to paragraphs (2) and (3) of this subsection,
(iv) Coverage periods
(v) Guaranteed issue and renewal
(vi) Marketing material and application forms
In applying clauses (ii), (iv), and (v) of this subparagraph, any reference to
(C) Special rule
The process established under subparagraph (A) shall include, except as provided in subparagraph (D), in the case of a part D eligible individual who is a full-benefit dual eligible individual (as defined in
(D) Special rule for plans that waive de minimis premiums
The process established under subparagraph (A) may include, in the case of a part D eligible individual who is a subsidy eligible individual (as defined in
(2) Initial enrollment period
(A) Program initiation
In the case of an individual who is a part D eligible individual as of November 15, 2005, there shall be an initial enrollment period that shall be the same as the annual, coordinated open election period described in
(B) Continuing periods
In the case of an individual who becomes a part D eligible individual after November 15, 2005, there shall be an initial enrollment period which is the period under
(3) Additional special enrollment periods
The Secretary shall establish special enrollment periods, including the following:
(A) Involuntary loss of creditable prescription drug coverage
(i) In general
In the case of a part D eligible individual who involuntarily loses creditable prescription drug coverage (as defined in
(ii) Notice
In establishing special enrollment periods under clause (i), the Secretary shall take into account when the part D eligible individuals are provided notice of the loss of creditable prescription drug coverage.
(iii) Failure to pay premium
For purposes of clause (i), a loss of coverage shall be treated as voluntary if the coverage is terminated because of failure to pay a required beneficiary premium.
(iv) Reduction in coverage
For purposes of clause (i), a reduction in coverage so that the coverage no longer meets the requirements under
(B) Errors in enrollment
In the case described in
(C) Exceptional circumstances
In the case of part D eligible individuals who meet such exceptional conditions (in addition to those conditions applied under paragraph (1)(B)(iii)) as the Secretary may provide.
(D) Medicaid coverage
In the case of an individual (as determined by the Secretary, subject to such limits as the Secretary may establish for individuals identified pursuant to
(E) Discontinuance of MA–PD election during first year of eligibility
In the case of a part D eligible individual who discontinues enrollment in an MA–PD plan under the second sentence of
(4) Information to facilitate enrollment
(A) In general
Notwithstanding any other provision of law but subject to subparagraph (B), the Secretary may provide to each PDP sponsor and MA organization such identifying information about part D eligible individuals as the Secretary determines to be necessary to facilitate efficient marketing of prescription drug plans and MA–PD plans to such individuals and enrollment of such individuals in such plans.
(B) Limitation
(i) Provision of information
The Secretary may provide the information under subparagraph (A) only to the extent necessary to carry out such subparagraph.
(ii) Use of information
Such information provided by the Secretary to a PDP sponsor or an MA organization may be used by such sponsor or organization only to facilitate marketing of, and enrollment of part D eligible individuals in, prescription drug plans and MA–PD plans.
(5) Reference to enrollment procedures for MA–PD plans
For rules applicable to enrollment, disenrollment, termination, and change of enrollment of part D eligible individuals in MA–PD plans, see
(6) Reference to penalties for late enrollment
(A) enroll in a prescription drug plan or an MA–PD plan after the initial enrollment period described in paragraph (2); and
(B) fail to maintain continuous creditable prescription drug coverage during the period of non-enrollment.
(c) Providing information to beneficiaries
(1) Activities
The Secretary shall conduct activities that are designed to broadly disseminate information to part D eligible individuals (and prospective part D eligible individuals) regarding the coverage provided under this part. Such activities shall ensure that such information is first made available at least 30 days prior to the initial enrollment period described in subsection (b)(2)(A).
(2) Requirements
The activities described in paragraph (1) shall—
(A) be similar to the activities performed by the Secretary under
(B) be coordinated with the activities performed by the Secretary under such section and under
(3) Comparative information
(A) In general
Subject to subparagraph (B), the comparative information referred to in paragraph (2)(A) shall include a comparison of the following with respect to qualified prescription drug coverage:
(i) Benefits
The benefits provided under the plan.
(ii) Monthly beneficiary premium
The monthly beneficiary premium under the plan.
(iii) Quality and performance
The quality and performance under the plan.
(iv) Beneficiary cost-sharing
The cost-sharing required of part D eligible individuals under the plan.
(v) Consumer satisfaction surveys
The results of consumer satisfaction surveys regarding the plan conducted pursuant to
(B) Exception for unavailability of information
The Secretary is not required to provide comparative information under clauses (iii) and (v) of subparagraph (A) with respect to a plan—
(i) for the first plan year in which it is offered; and
(ii) for the next plan year if it is impracticable or the information is otherwise unavailable.
(4) Information on late enrollment penalty
The information disseminated under paragraph (1) shall include information concerning the methodology for determining the late enrollment penalty under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–1, as added
Editorial Notes
Amendments
2020—Subsec. (a)(3)(A).
2016—Subsec. (b)(3)(D).
2015—Subsec. (b)(1)(B)(ii).
Subsec. (b)(1)(B)(iii).
2010—Subsec. (b)(1)(C).
Subsec. (b)(1)(D).
2006—Subsec. (b)(1)(B)(iii).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Effective Date of 2010 Amendment
Regulations
"(2)
"(A)
"(B)
"(i) the anticipated impact of drug management programs for at-risk beneficiaries under paragraph (5) of section 1860D–4(c) of the Social Security Act (
"(ii) the use of an expedited appeals process under which such an enrollee may appeal an identification of such enrollee as an at-risk beneficiary for prescription drug abuse under such paragraph (similar to the processes established under the Medicare Advantage program under part C of title XVIII of the Social Security Act [
"(iii) the types of enrollees that should be treated as exempted individuals, as described in subparagraph (C)(ii) of such paragraph;
"(iv) the manner in which terms and definitions in such paragraph should be applied, such as the use of clinical appropriateness in determining whether an enrollee is an at-risk beneficiary for prescription drug abuse as defined in subparagraph (C) of such paragraph;
"(v) the information to be included in the notices described in subparagraph (B) of such paragraph and the standardization of such notices;
"(vi) with respect to a PDP sponsor (or Medicare Advantage organization) that establishes a drug management program for at-risk beneficiaries under such paragraph, the responsibilities of such PDP sponsor (or organization) with respect to the implementation of such program;
"(vii) notices for plan enrollees at the point of sale that would explain why an at-risk beneficiary has been prohibited from receiving a prescription at a location outside of the designated pharmacy;
"(viii) evidence-based prescribing guidelines for opiates; and
"(ix) the sharing of claims data under parts A and B of title XVIII of the Social Security Act [
"(3)
Office of the Inspector General Studies and Reports
"(a)
"(1)
"(2)
"(b)
"(1)
"(A)
"(i) A comparison, with respect to the 200 most frequently dispensed covered part D drugs under such program and covered outpatient drugs under such title (as determined by the Inspector General based on volume and expenditures), of—
"(I) the prices paid for covered part D drugs by PDP sponsors of prescription drug plans and Medicare Advantage organizations offering MA–PD plans; and
"(II) the prices paid for covered outpatient drugs by a State plan under title XIX.
"(ii) An assessment of—
"(I) the financial impact of any discrepancies in such prices on the Federal Government; and
"(II) the financial impact of any such discrepancies on enrollees under part D or individuals eligible for medical assistance under a State plan under title XIX.
"(B)
"(C)
"(2)
"(A)
"(B)
"(3)
"(A)
"(B)
"(C) MA–PD
"(D)
"(E) PDP
"(F)
Submission of Legislative Proposal
Study on Transitioning Part B Prescription Drug Coverage
Report on Progress in Implementation of Prescription Drug Benefit
State Pharmaceutical Assistance Transition Commission
"(a)
"(1)
"(2)
"(A)
"(B)
"(b)
"(1) A representative of each Governor of each State that the Secretary [of Health and Human Services] identifies as operating on a statewide basis a State pharmaceutical assistance program that provides for eligibility and benefits that are comparable or more generous than the low-income assistance eligibility and benefits offered under section 1860D–14 of the Social Security Act [
"(2) Representatives from other States that the Secretary identifies have in operation other State pharmaceutical assistance programs, as appointed by the Secretary.
"(3) Representatives of organizations that have an inherent interest in program participants or the program itself, as appointed by the Secretary but not to exceed the number of representatives under paragraphs (1) and (2).
"(4) Representatives of Medicare Advantage organizations, pharmaceutical benefit managers, and other private health insurance plans, as appointed by the Secretary.
"(5) The Secretary (or the Secretary's designee) and such other members as the Secretary may specify.
The Secretary shall designate a member to serve as Chair of the Commission and the Commission shall meet at the call of the Chair.
"(c)
"(1) Protection of the interests of program participants in a manner that is the least disruptive to such participants and that includes a single point of contact for enrollment and processing of benefits.
"(2) Protection of the financial and flexibility interests of States so that States are not financially worse off as a result of the enactment of this title [see Tables for classification].
"(3) Principles of medicare modernization under this Act [see Tables for classification].
"(d)
"(e)
"(f)
Conflict of Interest Study
"(a)
"(1) An assessment of the differences in costs incurred by such enrollees and plans for prescription drugs dispensed by mail-order pharmacies owned by pharmaceutical benefit managers compared to mail-order pharmacies not owned by pharmaceutical benefit managers, and community pharmacies.
"(2) Whether such plans are acting in a manner that maximizes competition and results in lower prescription drug prices for enrollees.
"(b)
"(c)
1 So in original. The closing parenthesis probably should not appear.
2 So in original. Probably should be "of this subsection,".
§1395w–102. Prescription drug benefits
(a) Requirements
(1) In general
For purposes of this part and part C, the term "qualified prescription drug coverage" means either of the following:
(A) Standard prescription drug coverage with access to negotiated prices
Standard prescription drug coverage (as defined in subsection (b)) and access to negotiated prices under subsection (d).
(B) Alternative prescription drug coverage with at least actuarially equivalent benefits and access to negotiated prices
Coverage of covered part D drugs which meets the alternative prescription drug coverage requirements of subsection (c) and access to negotiated prices under subsection (d), but only if the benefit design of such coverage is approved by the Secretary, as provided under subsection (c).
(2) Permitting supplemental prescription drug coverage
(A) In general
Subject to subparagraph (B), qualified prescription drug coverage may include supplemental prescription drug coverage consisting of either or both of the following:
(i) Certain reductions in cost-sharing
(I) In general
A reduction in the annual deductible, a reduction in the coinsurance percentage or, for a year preceding 2025, an increase in the initial coverage limit with respect to covered part D drugs, or any combination thereof, insofar as such a reduction or increase increases the actuarial value of benefits above the actuarial value of basic prescription drug coverage.
(II) Construction
Nothing in this paragraph shall be construed as affecting the application of subsection (c)(3).
(ii) Optional drugs
Coverage of any product that would be a covered part D drug but for the application of subsection (e)(2)(A).
(B) Requirement
A PDP sponsor may not offer a prescription drug plan that provides supplemental prescription drug coverage pursuant to subparagraph (A) in an area unless the sponsor also offers a prescription drug plan in the area that only provides basic prescription drug coverage.
(3) Basic prescription drug coverage
For purposes of this part and part C, the term "basic prescription drug coverage" means either of the following:
(A) Coverage that meets the requirements of paragraph (1)(A).
(B) Coverage that meets the requirements of paragraph (1)(B) but does not have any supplemental prescription drug coverage described in paragraph (2)(A).
(4) Application of secondary payor provisions
The provisions of
(5) Construction
Nothing in this subsection shall be construed as changing the computation of incurred costs under subsection (b)(4).
(b) Standard prescription drug coverage
For purposes of this part and part C, the term "standard prescription drug coverage" means coverage of covered part D drugs that meets the following requirements:
(1) Deductible
(A) In general
Subject to paragraphs (8) and (9), the coverage has an annual deductible—
(i) for 2006, that is equal to $250; or
(ii) for a subsequent year, that is equal to the amount specified under this paragraph for the previous year increased by the percentage specified in paragraph (6) for the year involved.
(B) Rounding
Any amount determined under subparagraph (A)(ii) that is not a multiple of $5 shall be rounded to the nearest multiple of $5.
(2) Benefit structure
(A) 25 percent coinsurance
Subject to subparagraphs (C), (D), and (E) and paragraphs (8) and (9), the coverage has coinsurance (for costs above the annual deductible specified in paragraph (1) and up to the initial coverage limit under paragraph (3) for a year preceding 2025 and for costs above the annual deductible specified in paragraph (1) and up to the annual out-of-pocket threshold specified in paragraph (4)(B) for 2025 and each subsequent year) that is—
(i) equal to 25 percent; or
(ii) actuarially equivalent (using processes and methods established under
(B) Use of tiers
Nothing in this part shall be construed as preventing a PDP sponsor or an MA organization from applying tiered copayments under a plan, so long as such tiered copayments are consistent with subparagraphs (A)(ii), (C), and (D).
(C) Coverage for generic drugs in coverage gap
(i) In general
Except as provided in paragraphs (4), (8), and (9), for a year preceding 2025, the coverage for an applicable beneficiary (as defined in
(I) equal to the generic-gap coinsurance percentage (specified in clause (ii)) for the year; or
(II) actuarially equivalent (using processes and methods established under
(ii) Generic-gap coinsurance percentage
The generic-gap coinsurance percentage specified in this clause for—
(I) 2011 is 93 percent;
(II) 2012 and each succeeding year before 2020 is the generic-gap coinsurance percentage under this clause for the previous year decreased by 7 percentage points; and
(III) 2020 through 2024 is 25 percent.
(D) Coverage for applicable drugs in coverage gap
(i) In general
Except as provided in paragraphs (4), (8), and (9), for a year preceding 2025, the coverage for an applicable beneficiary (as defined in
(I) equal to the difference between—
(aa) the applicable gap percentage (specified in clause (ii) for the year); and
(bb) the discount percentage specified in
(II) actuarially equivalent (using processes and methods established under
(ii) Applicable gap percentage
The applicable gap percentage specified in this clause for—
(I) 2013 and 2014 is 97.5 percent;
(II) 2015 and 2016 is 95 percent;
(III) 2017 is 90 percent;
(IV) 2018 is 85 percent; and
(V) each of years 2019 through 2024 is 75 percent.
(E) Maximum monthly cap on cost-sharing payments
(i) In general
For plan years beginning on or after January 1, 2025, each PDP sponsor offering a prescription drug plan and each MA organization offering an MA–PD plan shall provide to any enrollee of such plan, including an enrollee who is a subsidy eligible individual (as defined in paragraph (3) of
(ii) Determination of maximum monthly cap
For each month in the plan year for which an enrollee in a prescription drug plan or an MA–PD plan has made an election pursuant to clause (i), the PDP sponsor or MA organization shall determine a maximum monthly cap (as defined in clause (iv)) for such enrollee.
(iii) Beneficiary monthly payments
With respect to an enrollee who has made an election pursuant to clause (i), for each month described in clause (ii), the PDP sponsor or MA organization shall bill such enrollee an amount (not to exceed the maximum monthly cap) for the out-of-pocket costs of such enrollee in such month.
(iv) Maximum monthly cap defined
In this subparagraph, the term "maximum monthly cap" means, with respect to an enrollee—
(I) for the first month for which the enrollee has made an election pursuant to clause (i), an amount determined by calculating—
(aa) the annual out-of-pocket threshold specified in paragraph (4)(B) minus the incurred costs of the enrollee as described in paragraph (4)(C); divided by
(bb) the number of months remaining in the plan year; and
(II) for a subsequent month, an amount determined by calculating—
(aa) the sum of any remaining out-of-pocket costs owed by the enrollee from a previous month that have not yet been billed to the enrollee and any additional out-of-pocket costs incurred by the enrollee; divided by
(bb) the number of months remaining in the plan year.
(v) Additional requirements
The following requirements shall apply with respect to the option to make an election pursuant to clause (i) under this subparagraph:
(I) Secretarial responsibilities
The Secretary shall provide information to part D eligible individuals on the option to make such election through educational materials, including through the notices provided under
(II) Timing of election
An enrollee in a prescription drug plan or an MA–PD plan may make such an election—
(aa) prior to the beginning of the plan year; or
(bb) in any month during the plan year.
(III) PDP sponsor and MA organization responsibilities
Each PDP sponsor offering a prescription drug plan or MA organization offering an MA–PD plan—
(aa) may not limit the option for an enrollee to make such an election to certain covered part D drugs;
(bb) shall, prior to the plan year, notify prospective enrollees of the option to make such an election in promotional materials;
(cc) shall include information on such option in enrollee educational materials;
(dd) shall have in place a mechanism to notify a pharmacy during the plan year when an enrollee incurs out-of-pocket costs with respect to covered part D drugs that make it likely the enrollee may benefit from making such an election;
(ee) shall provide that a pharmacy, after receiving a notification described in item (dd) with respect to an enrollee, informs the enrollee of such notification;
(ff) shall ensure that such an election by an enrollee has no effect on the amount paid to pharmacies (or the timing of such payments) with respect to covered part D drugs dispensed to the enrollee; and
(gg) shall have in place a financial reconciliation process to correct inaccuracies in payments made by an enrollee under this subparagraph with respect to covered part D drugs during the plan year.
(IV) Failure to pay amount billed
If an enrollee fails to pay the amount billed for a month as required under this subparagraph—
(aa) the election of the enrollee pursuant to clause (i) shall be terminated and the enrollee shall pay the cost-sharing otherwise applicable for any covered part D drugs subsequently dispensed to the enrollee up to the annual out-of-pocket threshold specified in paragraph (4)(B); and
(bb) the PDP sponsor or MA organization may preclude the enrollee from making an election pursuant to clause (i) in a subsequent plan year.
(V) Clarification regarding past due amounts
Nothing in this subparagraph shall be construed as prohibiting a PDP sponsor or an MA organization from billing an enrollee for an amount owed under this subparagraph.
(VI) Treatment of unsettled balances
Any unsettled balances with respect to amounts owed under this subparagraph shall be treated as plan losses and the Secretary shall not be liable for any such balances outside of those assumed as losses estimated in plan bids.
(3) Initial coverage limit
(A) In general
Except as provided in paragraphs (2)(C), (2)(D), (4), (8), and (9), for a year preceding 2025, the coverage has an initial coverage limit on the maximum costs that may be recognized for payment purposes (including the annual deductible)—
(i) for 2006, that is equal to $2,250; or
(ii) for each of years 2007 through 2024, that is equal to the amount specified in this paragraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved.
(B) Rounding
Any amount determined under subparagraph (A)(ii) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(4) Protection against high out-of-pocket expenditures
(A) In general
(i) In general
Subject to paragraphs (8) and (9), the coverage provides benefits, after the part D eligible individual has incurred costs (as described in subparagraph (C)) for covered part D drugs in a year equal to the annual out-of-pocket threshold specified in subparagraph (B), with cost-sharing that is equal to—
(I) for a year preceding 2024, the greater of—
(aa) a copayment of $2 for a generic drug or a preferred drug that is a multiple source drug (as defined in
(bb) coinsurance that is equal to 5 percent; and
(II) for 2024 and each succeeding year, $0.
(ii) Adjustment of amount
For a year after 2006, the dollar amounts specified in clause (i)(I)(aa) shall be equal to the dollar amounts specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved. Any amount established under this clause that is not a multiple of a 5 cents shall be rounded to the nearest multiple of 5 cents. The Secretary shall continue to calculate the dollar amounts specified in clause (i)(I)(aa), including with the adjustment under this clause, after 2023 for purposes of
(B) Annual out-of-pocket threshold
(i) In general
For purposes of this part, the "annual out-of-pocket threshold" specified in this subparagraph—
(I) for 2006, is equal to $3,600;
(II) for each of years 2007 through 2013, is equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved;
(III) for 2014 and 2015, is equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved, minus 0.25 percentage point;
(IV) for each of years 2016 through 2019, is equal to the amount specified in this subparagraph for the previous year, increased by the lesser of—
(aa) the annual percentage increase described in paragraph (7) for the year involved, plus 2 percentage points; or
(bb) the annual percentage increase described in paragraph (6) for the year;
(V) for 2020, is equal to the amount that would have been applied under this subparagraph for 2020 if the amendments made by section 1101(d)(1) of the Health Care and Education Reconciliation Act of 2010 had not been enacted;
(VI) for each of years 2021 through 2024, is equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved;
(VII) for 2025, is equal to $2,000; or
(VIII) for a subsequent year, is equal to the amount specified in this subparagraph for the previous year, increased by the annual percentage increase described in paragraph (6) for the year involved.
(ii) Rounding
Any amount determined under clause (i) that is not a multiple of $50 shall be rounded to the nearest multiple of $50.
(C) Application
Except as provided in subparagraph (E) or subparagraph (F), in applying subparagraph (A)—
(i) incurred costs shall only include costs incurred with respect to covered part D drugs for the annual deductible described in paragraph (1), for cost-sharing described in paragraph (2), and, for a year preceding 2025, for amounts for which benefits are not provided because of the application of the initial coverage limit described in paragraph (3), but does not include any costs incurred for covered part D drugs which are not included (or treated as being included) in the plan's formulary;
(ii) subject to clause (iii), such costs shall be treated as incurred only if they are paid by the part D eligible individual (or by another person, such as a family member, on behalf of the individual) and the part D eligible individual (or other person) is not reimbursed through insurance or otherwise, a group health plan, or other third-party payment arrangement (other than under such section or such a Program) for such costs; and
(iii) such costs shall be treated as incurred and shall not be considered to be reimbursed under clause (ii) if such costs—
(I) are borne or paid—— 1
(aa) under
(bb) under a State Pharmaceutical Assistance Program;
(cc) by the Indian Health Service, an Indian tribe or tribal organization, or an urban Indian organization (as defined in
(dd) 2 under an AIDS Drug Assistance Program under part B of title XXVI of the Public Health Service Act [
(dd) 2 under
(II) for 2025 and subsequent years, are reimbursed through insurance, a group health plan, or certain other third party payment arrangements, but not including the coverage provided by a prescription drug plan or an MA–PD plan that is basic prescription drug coverage (as defined in subsection (a)(3)) or any payments by a manufacturer under the manufacturer discount program under
(D) Information regarding third-party reimbursement
(i) Procedures for exchanging information
In order to accurately apply the requirements of subparagraph (C)(ii), the Secretary is authorized to establish procedures, in coordination with the Secretary of the Treasury and the Secretary of Labor—
(I) for determining whether costs for part D eligible individuals are being reimbursed through insurance or otherwise, a group health plan, or other third-party payment arrangement; and
(II) for alerting the PDP sponsors and MA organizations that offer the prescription drug plans and MA–PD plans in which such individuals are enrolled about such reimbursement arrangements.
(ii) Authority to request information from enrollees
A PDP sponsor or an MA organization may periodically ask part D eligible individuals enrolled in a prescription drug plan or an MA–PD plan offered by the sponsor or organization whether such individuals have or expect to receive such third-party reimbursement. A material misrepresentation of the information described in the preceding sentence by an individual (as defined in standards set by the Secretary and determined through a process established by the Secretary) shall constitute grounds for termination of enrollment in any plan under
(E) Inclusion of costs of applicable drugs under medicare coverage gap discount program
For each of years 2011 through 2024, in applying subparagraph (A), incurred costs shall include the negotiated price (as defined in paragraph (6) of
(F) Inclusion of costs paid under maximum monthly cap option
In applying subparagraph (A), with respect to an enrollee who has made an election pursuant to clause (i) of paragraph (2)(E), costs shall be treated as incurred if such costs are paid by a PDP sponsor or an MA organization under the option provided under such paragraph.
(5) Construction
Nothing in this part shall be construed as preventing a PDP sponsor or an MA organization offering an MA–PD plan from reducing to zero the cost-sharing otherwise applicable to preferred or generic drugs.
(6) Annual percentage increase
The annual percentage increase specified in this paragraph for a year is equal to the annual percentage increase in average per capita aggregate expenditures for covered part D drugs in the United States for part D eligible individuals, as determined by the Secretary for the 12-month period ending in July of the previous year using such methods as the Secretary shall specify.
(7) Additional annual percentage increase
The annual percentage increase specified in this paragraph for a year is equal to the annual percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending in July of the previous year.
(8) Treatment of cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices consistent with treatment of vaccines under part B
(A) In general
For plan years beginning on or after January 1, 2023, with respect to an adult vaccine recommended by the Advisory Committee on Immunization Practices (as defined in subparagraph (B))—
(i) the deductible under paragraph (1) shall not apply; and
(ii) there shall be no coinsurance or other cost-sharing under this part with respect to such vaccine.
(B) Adult vaccines recommended by the Advisory Committee on Immunization Practices
For purposes of this paragraph, the term "adult vaccine recommended by the Advisory Committee on Immunization Practices" means a covered part D drug that is a vaccine licensed under section 351 of the Public Health Service Act [
(9) Treatment of cost-sharing for covered insulin products
(A) No application of deductible
For plan year 2023 and subsequent plan years, the deductible under paragraph (1) shall not apply with respect to any covered insulin product.
(B) Application of cost-sharing
(i) Plan years 2023 and 2024
For plan years 2023 and 2024, the coverage provides benefits for any covered insulin product, regardless of whether an individual has reached the initial coverage limit under paragraph (3) or the out-of-pocket threshold under paragraph (4), with cost-sharing for a month's supply that does not exceed the applicable copayment amount.
(ii) Plan year 2025 and subsequent plan years
For a plan year beginning on or after January 1, 2025, the coverage provides benefits for any covered insulin product, prior to an individual reaching the out-of-pocket threshold under paragraph (4), with cost-sharing for a month's supply that does not exceed the applicable copayment amount.
(C) Covered insulin product
In this paragraph, the term "covered insulin product" means an insulin product that is a covered part D drug covered under the prescription drug plan or MA–PD plan that is approved under
(D) Applicable copayment amount
In this paragraph, the term "applicable copayment amount" means, with respect to a covered insulin product under a prescription drug plan or an MA–PD plan dispensed—
(i) during plan years 2023, 2024, and 2025, $35; and
(ii) during plan year 2026 and each subsequent plan year, the lesser of—
(I) $35;
(II) an amount equal to 25 percent of the maximum fair price established for the covered insulin product in accordance with part E of subchapter XI; or
(III) an amount equal to 25 percent of the negotiated price of the covered insulin product under the prescription drug plan or MA–PD plan.
(E) Special rule for first 3 months of 2023
With respect to a month's supply of a covered insulin product dispensed during the period beginning on January 1, 2023, and ending on March 31, 2023, a PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan shall reimburse an enrollee within 30 days for any cost-sharing paid by such enrollee that exceeds the cost-sharing applied by the prescription drug plan or MA–PD plan under subparagraph (B)(i) at the point-of-sale for such month's supply.
(c) Alternative prescription drug coverage requirements
A prescription drug plan or an MA–PD plan may provide a different prescription drug benefit design from standard prescription drug coverage so long as the Secretary determines (consistent with
(1) Assuring at least actuarially equivalent coverage
(A) Assuring equivalent value of total coverage
The actuarial value of the total coverage is at least equal to the actuarial value of standard prescription drug coverage.
(B) Assuring equivalent unsubsidized value of coverage
The unsubsidized value of the coverage is at least equal to the unsubsidized value of standard prescription drug coverage. For purposes of this subparagraph, the unsubsidized value of coverage is the amount by which the actuarial value of the coverage exceeds the actuarial value of the subsidy payments under
(C) Assuring standard payment for costs
The coverage is designed, based upon an actuarially representative pattern of utilization, to provide for the payment, with respect to costs incurred that are equal to the initial coverage limit under subsection (b)(3) for the year for a year preceding 2025 or the annual out-of-pocket threshold specified in subsection (b)(4)(B) for the year for 2025 and each subsequent year, of an amount equal to at least the product of—
(i) the amount by which the initial coverage limit described in subsection (b)(3) for the year for a year preceding 2025 or the annual out-of-pocket threshold specified in subsection (b)(4)(B) for the year for 2025 and each subsequent year exceeds the deductible described in subsection (b)(1) for the year; and
(ii) 100 percent minus the coinsurance percentage specified in subsection (b)(2)(A)(i).
(2) Maximum required deductible
The deductible under the coverage shall not exceed the deductible amount specified under subsection (b)(1) for the year.
(3) Same protection against high out-of-pocket expenditures
The coverage provides the coverage required under subsection (b)(4).
(4) Same maximum monthly cap on cost-sharing
The maximum monthly cap on cost-sharing payments shall apply to coverage with respect to an enrollee who has made an election pursuant to clause (i) of subsection (b)(2)(E) under the option provided under such subsection.
(5) Treatment of cost-sharing for adult vaccines recommended by the Advisory Committee on Immunization Practices
The coverage is in accordance with subsection (b)(8).
(6) Treatment of cost-sharing for covered insulin products
The coverage is provided in accordance with subsection (b)(9).
(d) Access to negotiated prices
(1) Access
(A) In general
Under qualified prescription drug coverage offered by a PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan, the sponsor or organization shall provide enrollees with access to negotiated prices used for payment for covered part D drugs, regardless of the fact that no benefits may be payable under the coverage with respect to such drugs because of the application of a deductible or other cost-sharing or, for a year preceding 2025, an initial coverage limit (described in subsection (b)(3)).
(B) Negotiated prices
For purposes of this part, negotiated prices, subject to subparagraph (D), shall take into account negotiated price concessions, such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations, for covered part D drugs, and include any dispensing fees for such drugs.
(C) Medicaid-related provisions
The prices negotiated by a prescription drug plan, by an MA–PD plan with respect to covered part D drugs, or by a qualified retiree prescription drug plan (as defined in
(D) Application of maximum fair price for selected drugs
In applying this section, in the case of a covered part D drug that is a selected drug (as referred to in
(2) Disclosure
A PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan shall disclose to the Secretary (in a manner specified by the Secretary) the aggregate negotiated price concessions described in paragraph (1)(B) made available to the sponsor or organization by a manufacturer which are passed through in the form of lower subsidies, lower monthly beneficiary prescription drug premiums, and lower prices through pharmacies and other dispensers. The provisions of
(3) Audits
To protect against fraud and abuse and to ensure proper disclosures and accounting under this part and in accordance with
(e) Covered part D drug defined
(1) In general
Except as provided in this subsection, for purposes of this part, the term "covered part D drug" means—
(A) a drug that may be dispensed only upon a prescription and that is described in subparagraph (A)(i), (A)(ii), or (A)(iii) of
(B) a biological product described in clauses (i) through (iii) of subparagraph (B) of such section or insulin described in subparagraph (C) of such section and medical supplies associated with the injection of insulin (as defined in regulations of the Secretary); or
(C) for the period beginning on December 29, 2022, and ending on December 31, 2024, an oral antiviral drug that may be dispensed only upon a prescription and is authorized under
and such term includes a vaccine licensed under
(2) Exclusions
(A) In general
Such term does not include drugs or classes of drugs, or their medical uses, which may be excluded from coverage or otherwise restricted under
(B) Medicare covered drugs
A drug prescribed for a part D eligible individual that would otherwise be a covered part D drug under this part shall not be so considered if payment for such drug as so prescribed and dispensed or administered with respect to that individual is available (or would be available but for the application of a deductible) under part A or B for that individual.
(3) Application of general exclusion provisions
A prescription drug plan or an MA–PD plan may exclude from qualified prescription drug coverage any covered part D drug—
(A) for which payment would not be made if
(B) which is not prescribed in accordance with the plan or this part.
Such exclusions are determinations subject to reconsideration and appeal pursuant to subsections (g) and (h), respectively, of
(4) Medically accepted indication defined
(A) In general
For purposes of paragraph (1), the term "medically accepted indication" has the meaning given that term—
(i) in the case of a covered part D drug used in an anticancer chemotherapeutic regimen, in
(I) "prescription drug plan or MA–PD plan" shall be substituted for "carrier" each place it appears; and
(II) subject to subparagraph (B), the compendia described in
(ii) in the case of any other covered part D drug, in
(B) Conflict of interest
On and after January 1, 2010, subparagraph (A)(i)(II) shall not apply unless the compendia described in
(C) Update
For purposes of applying subparagraph (A)(ii), the Secretary shall revise the list of compendia described in
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–2, as added
Editorial Notes
References in Text
Section 1101(d)(1) of the Health Care and Education Reconciliation Act of 2010, referred to in subsec. (b)(4)(B)(i)(V), is section 1101(d)(1) of
The Public Health Service Act, referred to in subsec. (b)(4)(C)(iii)(I)(dd), is act July 1, 1944, ch. 373,
Section 7002(e)(4) of the Biologics Price Competition and Innovation Act of 2009, referred to in (b)(9)(C), is section 7002(e)(4) of
Amendments
2022—Subsec. (a)(2)(A)(i)(I).
Subsec. (b)(1)(A).
Subsec. (b)(2)(A).
Subsec. (b)(2)(C)(i).
Subsec. (b)(2)(C)(ii)(III).
Subsec. (b)(2)(D)(i).
Subsec. (b)(2)(D)(i)(I)(bb).
Subsec. (b)(2)(D)(ii)(V).
Subsec. (b)(2)(E).
Subsec. (b)(3)(A).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(4)(A)(i).
Subsec. (b)(4)(A)(ii).
Subsec. (b)(4)(B)(i)(V).
Subsec. (b)(4)(B)(i)(VI).
Subsec. (b)(4)(B)(i)(VII), (VIII).
Subsec. (b)(4)(B)(ii).
Subsec. (b)(4)(C).
Subsec. (b)(4)(C)(i).
Subsec. (b)(4)(C)(iii).
Subsec. (b)(4)(C)(iii)(I)(dd).
Subsec. (b)(4)(E).
Subsec. (b)(4)(F).
Subsec. (b)(8).
Subsec. (b)(9).
Subsec. (c)(1)(C).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (c)(6).
Subsec. (d)(1)(A).
Subsec. (d)(1)(B).
Subsec. (d)(1)(D).
Subsec. (e)(1)(C).
2018—Subsec. (b)(2)(D)(i)(I).
Subsec. (b)(2)(D)(ii)(V), (VI).
2010—Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
Subsec. (b)(2)(C), (D).
Subsec. (b)(3)(A).
Subsec. (b)(4)(B)(i)(II) to (VI).
Subsec. (b)(4)(C).
Subsec. (b)(4)(E).
Subsec. (b)(7).
"(A)
"(B)
"(i) except as otherwise provided in this subparagraph, there shall be no change in the premiums, bids, or any other parameters under this part or part C;
"(ii) costs that would be treated as incurred costs for purposes of applying paragraph (4) but for the application of subparagraph (A) shall continue to be treated as incurred costs;
"(iii) the Secretary shall establish procedures, which may include a reconciliation process, to fully reimburse PDP sponsors with respect to prescription drug plans and MA organizations with respect to MA–PD plans for the reduction in beneficiary cost sharing associated with the application of subparagraph (A);
"(iv) the Secretary shall develop an estimate of the additional increased costs attributable to the application of this paragraph for increased drug utilization and financing and administrative costs and shall use such estimate to adjust payments to PDP sponsors with respect to prescription drug plans under this part and MA organizations with respect to MA–PD plans under part C; and
"(v) the Secretary shall establish procedures for retroactive reimbursement of part D eligible individuals who are covered under such a plan for costs which are incurred before the date of initial implementation of subparagraph (A) and which would be reimbursed under such a plan if such implementation occurred as of January 1, 2010.
"(C)
See Construction of 2010 Amendment note below.
2008—Subsec. (e)(1).
Subsec. (e)(2)(A).
Subsec. (e)(4).
2006—Subsec. (e)(1).
2005—Subsec. (e)(2)(A).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Effective Date of 2005 Amendment
Construction of 2022 Amendment
Construction of 2010 Amendment
Construction
Implementation of Pub. L. 117–169 for Certain Years
Payment for Administration of Part D Vaccines in 2007
2 So in original. There are two items (dd).
3 So in original. Probably should be "meet".
§1395w–103. Access to a choice of qualified prescription drug coverage
(a) Assuring access to a choice of coverage
(1) Choice of at least two plans in each area
The Secretary shall ensure that each part D eligible individual has available, consistent with paragraph (2), a choice of enrollment in at least 2 qualifying plans (as defined in paragraph (3)) in the area in which the individual resides, at least one of which is a prescription drug plan. In any such case in which such plans are not available, the part D eligible individual shall be given the opportunity to enroll in a fallback prescription drug plan.
(2) Requirement for different plan sponsors
The requirement in paragraph (1) is not satisfied with respect to an area if only one entity offers all the qualifying plans in the area.
(3) Qualifying plan defined
For purposes of this section, the term "qualifying plan" means—
(A) a prescription drug plan; or
(B) an MA–PD plan described in
(i) basic prescription drug coverage; or
(ii) qualified prescription drug coverage that provides supplemental prescription drug coverage so long as there is no MA monthly supplemental beneficiary premium applied under the plan, due to the application of a credit against such premium of a rebate under
(b) Flexibility in risk assumed and application of fallback plan
In order to ensure access pursuant to subsection (a) in an area—
(1) the Secretary may approve limited risk plans under
(2) only if such access is still not provided in the area after applying paragraph (1), the Secretary shall provide for the offering of a fallback prescription drug plan for that area under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–3, as added
§1395w–104. Beneficiary protections for qualified prescription drug coverage
(a) Dissemination of information
(1) General information
(A) Application of MA information
A PDP sponsor shall disclose, in a clear, accurate, and standardized form to each enrollee with a prescription drug plan offered by the sponsor under this part at the time of enrollment and at least annually thereafter, the information described in
(B) Drug specific information
The information described in this subparagraph is information concerning the following:
(i) Access to specific covered part D drugs, including access through pharmacy networks.
(ii) How any formulary (including any tiered formulary structure) used by the sponsor functions, including a description of how a part D eligible individual may obtain information on the formulary consistent with paragraph (3).
(iii) Beneficiary cost-sharing requirements and how a part D eligible individual may obtain information on such requirements, including tiered or other copayment level applicable to each drug (or class of drugs), consistent with paragraph (3).
(iv) The medication therapy management program required under subsection (c).
(v) The drug management program for at-risk beneficiaries under subsection (c)(5).
(vi) For plan year 2021 and each subsequent plan year, subject to subparagraph (C), with respect to the treatment of pain—
(I) the risks associated with prolonged opioid use; and
(II) coverage of nonpharmacological therapies, devices, and nonopioid medications—
(aa) in the case of an MA–PD plan under part C, under such plan; and
(bb) in the case of a prescription drug plan, under such plan and under parts A and B.
(C) Targeted provision of information
A PDP sponsor of a prescription drug plan may, in lieu of disclosing the information described in subparagraph (B)(vi) to each enrollee under the plan, disclose such information through mail or electronic communications to a subset of enrollees under the plan, such as enrollees who have been prescribed an opioid in the previous 2-year period.
(2) Disclosure upon request of general coverage, utilization, and grievance information
Upon request of a part D eligible individual who is eligible to enroll in a prescription drug plan, the PDP sponsor offering such plan shall provide information similar (as determined by the Secretary) to the information described in subparagraphs (A), (B), and (C) of
(3) Provision of specific information
(A) Response to beneficiary questions
Each PDP sponsor offering a prescription drug plan shall have a mechanism for providing specific information on a timely basis to enrollees upon request. Such mechanism shall include access to information through the use of a toll-free telephone number and, upon request, the provision of such information in writing.
(B) Availability of information on changes in formulary through the Internet
A PDP sponsor offering a prescription drug plan shall make available on a timely basis through an Internet website information on specific changes in the formulary under the plan (including changes to tiered or preferred status of covered part D drugs).
(4) Claims information
A PDP sponsor offering a prescription drug plan must furnish to each enrollee in a form easily understandable to such enrollees—
(A) an explanation of benefits (in accordance with
(B) when prescription drug benefits are provided under this part, a notice of the benefits in relation to—
(i) for a year preceding 2025, the initial coverage limit for the current year; and
(ii) the annual out-of-pocket threshold for the current year.
Notices under subparagraph (B) need not be provided more often than as specified by the Secretary and notices under subparagraph (B)(ii) shall take into account the application of
(b) Access to covered part D drugs
(1) Assuring pharmacy access
(A) Participation of any willing pharmacy
A prescription drug plan shall permit the participation of any pharmacy that meets the terms and conditions under the plan.
(B) Discounts allowed for network pharmacies
For covered part D drugs dispensed through in-network pharmacies, a prescription drug plan may, notwithstanding subparagraph (A), reduce coinsurance or copayments for part D eligible individuals enrolled in the plan below the level otherwise required. In no case shall such a reduction result in an increase in payments made by the Secretary under
(C) Convenient access for network pharmacies
(i) In general
The PDP sponsor of the prescription drug plan shall secure the participation in its network of a sufficient number of pharmacies that dispense (other than by mail order) drugs directly to patients to ensure convenient access (consistent with rules established by the Secretary).
(ii) Application of TRICARE standards
The Secretary shall establish rules for convenient access to in-network pharmacies under this subparagraph that are no less favorable to enrollees than the rules for convenient access to pharmacies included in the statement of work of solicitation (#MDA906–03–R–0002) of the Department of Defense under the TRICARE Retail Pharmacy (TRRx) as of March 13, 2003.
(iii) Adequate emergency access
Such rules shall include adequate emergency access for enrollees.
(iv) Convenient access in long-term care facilities
Such rules may include standards with respect to access for enrollees who are residing in long-term care facilities and for pharmacies operated by the Indian Health Service, Indian tribes and tribal organizations, and urban Indian organizations (as defined in
(D) Level playing field
Such a sponsor shall permit enrollees to receive benefits (which may include a 90-day supply of drugs or biologicals) through a pharmacy (other than a mail order pharmacy), with any differential in charge paid by such enrollees.
(E) Not required to accept insurance risk
The terms and conditions under subparagraph (A) may not require participating pharmacies to accept insurance risk as a condition of participation.
(2) Use of standardized technology
(A) In general
The PDP sponsor of a prescription drug plan shall issue (and reissue, as appropriate) such a card (or other technology) that may be used by an enrollee to assure access to negotiated prices under
(B) Standards
(i) In general
The Secretary shall provide for the development, adoption, or recognition of standards relating to a standardized format for the card or other technology required under subparagraph (A). Such standards shall be compatible with part C of subchapter XI and may be based on standards developed by an appropriate standard setting organization.
(ii) Consultation
In developing the standards under clause (i), the Secretary shall consult with the National Council for Prescription Drug Programs and other standard setting organizations determined appropriate by the Secretary.
(iii) Implementation
The Secretary shall develop, adopt, or recognize the standards under clause (i) by such date as the Secretary determines shall be sufficient to ensure that PDP sponsors utilize such standards beginning January 1, 2006.
(3) Requirements on development and application of formularies
If a PDP sponsor of a prescription drug plan uses a formulary (including the use of tiered cost-sharing), the following requirements must be met:
(A) Development and revision by a pharmacy and therapeutic (P&T) committee
(i) In general
The formulary must be developed and reviewed by a pharmacy and therapeutic committee. A majority of the members of such committee shall consist of individuals who are practicing physicians or practicing pharmacists (or both).
(ii) Inclusion of independent experts
Such committee shall include at least one practicing physician and at least one practicing pharmacist, each of whom—
(I) is independent and free of conflict with respect to the sponsor and plan; and
(II) has expertise in the care of elderly or disabled persons.
(B) Formulary development
In developing and reviewing the formulary, the committee shall—
(i) base clinical decisions on the strength of scientific evidence and standards of practice, including assessing peer-reviewed medical literature, such as randomized clinical trials, pharmacoeconomic studies, outcomes research data, and on such other information as the committee determines to be appropriate; and
(ii) take into account whether including in the formulary (or in a tier in such formulary) particular covered part D drugs has therapeutic advantages in terms of safety and efficacy.
(C) Inclusion of drugs in all therapeutic categories and classes
(i) In general
Subject to subparagraph (G), the formulary must include drugs within each therapeutic category and class of covered part D drugs, although not necessarily all drugs within such categories and classes.
(ii) Model guidelines
The Secretary shall request the United States Pharmacopeia to develop, in consultation with pharmaceutical benefit managers and other interested parties, a list of categories and classes that may be used by prescription drug plans under this paragraph and to revise such classification from time to time to reflect changes in therapeutic uses of covered part D drugs and the additions of new covered part D drugs.
(iii) Limitation on changes in therapeutic classification
The PDP sponsor of a prescription drug plan may not change the therapeutic categories and classes in a formulary other than at the beginning of each plan year except as the Secretary may permit to take into account new therapeutic uses and newly approved covered part D drugs.
(D) Provider and patient education
The PDP sponsor shall establish policies and procedures to educate and inform health care providers and enrollees concerning the formulary.
(E) Notice before removing drug from formulary or changing preferred or tier status of drug
Any removal of a covered part D drug from a formulary and any change in the preferred or tiered cost-sharing status of such a drug shall take effect only after appropriate notice is made available (such as under subsection (a)(3)) to the Secretary, affected enrollees, physicians, pharmacies, and pharmacists.
(F) Periodic evaluation of protocols
In connection with the formulary, the sponsor of a prescription drug plan shall provide for the periodic evaluation and analysis of treatment protocols and procedures.
(G) Required inclusion of drugs in certain categories and classes
(i) Formulary requirements
(I) In general
Subject to subclause (II), a PDP sponsor offering a prescription drug plan shall be required to include all covered part D drugs in the categories and classes identified by the Secretary under clause (ii)(I).
(II) Exceptions
The Secretary may establish exceptions that permit a PDP sponsor offering a prescription drug plan to exclude from its formulary a particular covered part D drug in a category or class that is otherwise required to be included in the formulary under subclause (I) (or to otherwise limit access to such a drug, including through prior authorization or utilization management).
(ii) Identification of drugs in certain categories and classes
(I) In general
Subject to clause (iv), the Secretary shall identify, as appropriate, categories and classes of drugs for which the Secretary determines are of clinical concern.
(II) Criteria
The Secretary shall use criteria established by the Secretary in making any determination under subclause (I).
(iii) Implementation
The Secretary shall establish the criteria under clause (ii)(II) and any exceptions under clause (i)(II) through the promulgation of a regulation which includes a public notice and comment period.
(iv) Requirement for certain categories and classes until criteria established
Until such time as the Secretary establishes the criteria under clause (ii)(II) the following categories and classes of drugs shall be identified under clause (ii)(I):
(I) Anticonvulsants.
(II) Antidepressants.
(III) Antineoplastics.
(IV) Antipsychotics.
(V) Antiretrovirals.
(VI) Immunosuppressants for the treatment of transplant rejection.
(H) Use of single, uniform exceptions and appeals process
Notwithstanding any other provision of this part, each PDP sponsor of a prescription drug plan shall—
(i) use a single, uniform exceptions and appeals process (including, to the extent the Secretary determines feasible, a single, uniform model form for use under such process) with respect to the determination of prescription drug coverage for an enrollee under the plan; and
(ii) provide instant access to such process by enrollees through a toll-free telephone number and an Internet website.
(I) Required inclusion of selected drugs
(i) In general
For 2026 and each subsequent year, the PDP sponsor offering a prescription drug plan shall include each covered part D drug that is a selected drug under
(ii) Clarification
Nothing in clause (i) shall be construed as prohibiting a PDP sponsor from removing such a selected drug from a formulary if such removal would be permitted under section 423.120(b)(5)(iv) of title 42, Code of Federal Regulations (or any successor regulation).
(4) Ensuring access during COVID–19 public health emergency period
(A) In general
During the emergency period described in
(B) Safety edit exception
A prescription drug plan or MA–PD plan may not permit a part D eligible individual to obtain a single fill or refill inconsistent with an applicable safety edit.
(c) Cost and utilization management; quality assurance; medication therapy management program
(1) In general
The PDP sponsor shall have in place, directly or through appropriate arrangements, with respect to covered part D drugs, the following:
(A) A cost-effective drug utilization management program, including incentives to reduce costs when medically appropriate, such as through the use of multiple source drugs (as defined in
(B) Quality assurance measures and systems to reduce medication errors and adverse drug interactions and improve medication use.
(C) A medication therapy management program described in paragraph (2).
(D) A program to control fraud, abuse, and waste.
(E) A utilization management tool to prevent drug abuse (as described in paragraph (6)(A)).1
(F) With respect to plan years beginning on or after January 1, 2022, a drug management program for at-risk beneficiaries described in paragraph (5).
Nothing in this section shall be construed as impairing a PDP sponsor from utilizing cost management tools (including differential payments) under all methods of operation.
(2) Medication therapy management program
(A) Description
(i) In general
A medication therapy management program described in this paragraph is a program of drug therapy management that may be furnished by a pharmacist and that is designed to assure, with respect to targeted beneficiaries described in clause (ii), that covered part D drugs under the prescription drug plan are appropriately used to optimize therapeutic outcomes through improved medication use, and to reduce the risk of adverse events, including adverse drug interactions. Such a program may distinguish between services in ambulatory and institutional settings.
(ii) Targeted beneficiaries described
Targeted beneficiaries described in this clause are the following:
(I) Part D eligible individuals who—
(aa) have multiple chronic diseases (such as diabetes, asthma, hypertension, hyperlipidemia, and congestive heart failure);
(bb) are taking multiple covered part D drugs; and
(cc) are identified as likely to incur annual costs for covered part D drugs that exceed a level specified by the Secretary.
(II) Beginning January 1, 2021, at-risk beneficiaries for prescription drug abuse (as defined in paragraph (5)(C)).
(B) Elements
Such program—
(i) may include elements that promote—
(I) enhanced enrollee understanding to promote the appropriate use of medications by enrollees and to reduce the risk of potential adverse events associated with medications, through beneficiary education, counseling, and other appropriate means;
(II) increased enrollee adherence with prescription medication regimens through medication refill reminders, special packaging, and other compliance programs and other appropriate means; and
(III) detection of adverse drug events and patterns of overuse and underuse of prescription drugs; and
(ii) with respect to plan years beginning on or after January 1, 2021, shall provide for—
(I) the provision of information to the enrollee on the safe disposal of prescription drugs that are controlled substances that meets the criteria established under
(II) cost-effective means by which an enrollee may so safely dispose of such drugs.
(C) Required interventions
For plan years beginning on or after the date that is 2 years after March 23, 2010, prescription drug plan sponsors shall offer medication therapy management services to targeted beneficiaries described in subparagraph (A)(ii) that include, at a minimum, the following to increase adherence to prescription medications or other goals deemed necessary by the Secretary:
(i) An annual comprehensive medication review furnished person-to-person or using telehealth technologies (as defined by the Secretary) by a licensed pharmacist or other qualified provider. The comprehensive medication review—
(I) shall include a review of the individual's medications and may result in the creation of a recommended medication action plan or other actions in consultation with the individual and with input from the prescriber to the extent necessary and practicable; and
(II) shall include providing the individual with a written or printed summary of the results of the review.
The Secretary, in consultation with relevant stakeholders, shall develop a standardized format for the action plan under subclause (I) and the summary under subclause (II).
(ii) Follow-up interventions as warranted based on the findings of the annual medication review or the targeted medication enrollment and which may be provided person-to-person or using telehealth technologies (as defined by the Secretary).
(D) Assessment
The prescription drug plan sponsor shall have in place a process to assess, at least on a quarterly basis, the medication use of individuals who are at risk but not enrolled in the medication therapy management program, including individuals who have experienced a transition in care, if the prescription drug plan sponsor has access to that information.
(E) 2 Automatic enrollment with ability to opt-out
The prescription drug plan sponsor shall have in place a process to—
(i) subject to clause (ii), automatically enroll targeted beneficiaries described in subparagraph (A)(ii), including beneficiaries identified under subparagraph (D), in the medication therapy management program required under this subsection; and
(ii) permit such beneficiaries to opt-out of enrollment in such program.
(E) 2 Development of program in cooperation with licensed pharmacists
Such program shall be developed in cooperation with licensed and practicing pharmacists and physicians.
(F) Coordination with care management plans
The Secretary shall establish guidelines for the coordination of any medication therapy management program under this paragraph with respect to a targeted beneficiary with any care management plan established with respect to such beneficiary under a chronic care improvement program under
(G) Considerations in pharmacy fees
The PDP sponsor of a prescription drug plan shall take into account, in establishing fees for pharmacists and others providing services under such plan, the resources used, and time required to, implement the medication therapy management program under this paragraph. Each such sponsor shall disclose to the Secretary upon request the amount of any such management or dispensing fees. The provisions of
(3) Reducing wasteful dispensing of outpatient prescription drugs in long-term care facilities
The Secretary shall require PDP sponsors of prescription drug plans to utilize specific, uniform dispensing techniques, as determined by the Secretary, in consultation with relevant stakeholders (including representatives of nursing facilities, residents of nursing facilities, pharmacists, the pharmacy industry (including retail and long-term care pharmacy), prescription drug plans, MA–PD plans, and any other stakeholders the Secretary determines appropriate), such as weekly, daily, or automated dose dispensing, when dispensing covered part D drugs to enrollees who reside in a long-term care facility in order to reduce waste associated with 30-day fills.
(4) Requiring valid prescriber National Provider Identifiers on pharmacy claims
(A) In general
For plan year 2016 and subsequent plan years, the Secretary shall require a claim for a covered part D drug for a part D eligible individual enrolled in a prescription drug plan under this part or an MA–PD plan under part C to include a prescriber National Provider Identifier that is determined to be valid under the procedures established under subparagraph (B)(i).
(B) Procedures
(i) Validity of prescriber National Provider Identifiers
The Secretary, in consultation with appropriate stakeholders, shall establish procedures for determining the validity of prescriber National Provider Identifiers under subparagraph (A).
(ii) Informing beneficiaries of reason for denial
The Secretary shall establish procedures to ensure that, in the case that a claim for a covered part D drug of an individual described in subparagraph (A) is denied because the claim does not meet the requirements of this paragraph, the individual is properly informed at the point of service of the reason for the denial.
(C) Report
Not later than January 1, 2018, the Inspector General of the Department of Health and Human Services shall submit to Congress a report on the effectiveness of the procedures established under subparagraph (B)(i).
(D) Notification and additional requirements with respect to outlier prescribers of opioids
(i) Notification
Not later than January 1, 2021, the Secretary shall, in the case of a prescriber identified by the Secretary under clause (ii) to be an outlier prescriber of opioids, provide, subject to clause (iv), an annual notification to such prescriber that such prescriber has been so identified and that includes resources on proper prescribing methods and other information as specified in accordance with clause (iii).
(ii) Identification of outlier prescribers of opioids
(I) In general
The Secretary shall, subject to subclause (III), using the valid prescriber National Provider Identifiers included pursuant to subparagraph (A) on claims for covered part D drugs for part D eligible individuals enrolled in prescription drug plans under this part or MA–PD plans under part C and based on the thresholds established under subclause (II), identify prescribers that are outlier opioids prescribers for a period of time specified by the Secretary.
(II) Establishment of thresholds
For purposes of subclause (I) and subject to subclause (III), the Secretary shall, after consultation with stakeholders, establish thresholds, based on prescriber specialty and geographic area, for identifying whether a prescriber in a specialty and geographic area is an outlier prescriber of opioids as compared to other prescribers of opioids within such specialty and area.
(III) Exclusions
The following shall not be included in the analysis for identifying outlier prescribers of opioids under this clause:
(aa) Claims for covered part D drugs for part D eligible individuals who are receiving hospice care under this subchapter.
(bb) Claims for covered part D drugs for part D eligible individuals who are receiving oncology services under this subchapter.
(cc) Prescribers who are the subject of an investigation by the Centers for Medicare & Medicaid Services or the Inspector General of the Department of Health and Human Services.
(iii) Contents of notification
The Secretary shall include the following information in the notifications provided under clause (i):
(I) Information on how such prescriber compares to other prescribers within the same specialty and geographic area.
(II) Information on opioid prescribing guidelines, based on input from stakeholders, that may include the Centers for Disease Control and Prevention guidelines for prescribing opioids for chronic pain and guidelines developed by physician organizations.
(III) Other information determined appropriate by the Secretary.
(iv) Modifications and expansions
(I) Frequency
Beginning 5 years after October 24, 2018, the Secretary may change the frequency of the notifications described in clause (i) based on stakeholder input and changes in opioid prescribing utilization and trends.
(II) Expansion to other prescriptions
The Secretary may expand notifications under this subparagraph to include identifications and notifications with respect to concurrent prescriptions of covered Part D drugs used in combination with opioids that are considered to have adverse side effects when so used in such combination, as determined by the Secretary.
(v) Additional requirements for persistent outlier prescribers
In the case of a prescriber who the Secretary determines is persistently identified under clause (ii) as an outlier prescriber of opioids, the following shall apply:
(I) Such prescriber may be required to enroll in the program under this subchapter under
(II) Not less frequently than annually (and in a form and manner determined appropriate by the Secretary), the Secretary, consistent with clause(iv)(I), shall communicate information on such prescribers to sponsors of a prescription drug plan and Medicare Advantage organizations offering an MA–PD plan.
(vi) Public availability of information
The Secretary shall make aggregate information under this subparagraph available on the internet website of the Centers for Medicare & Medicaid Services. Such information shall be in a form and manner determined appropriate by the Secretary and shall not identify any specific prescriber. In carrying out this clause, the Secretary shall consult with interested stakeholders.
(vii) Opioids defined
For purposes of this subparagraph, the term "opioids" has such meaning as specified by the Secretary.
(viii) Other activities
Nothing in this subparagraph shall preclude the Secretary from conducting activities that provide prescribers with information as to how they compare to other prescribers that are in addition to the activities under this subparagraph, including activities that were being conducted as October 24, 2018.
(5) Drug management program for at-risk beneficiaries
(A) Authority to establish
A PDP sponsor may (and for plan years beginning on or after January 1, 2022, a PDP sponsor shall) establish a drug management program for at-risk beneficiaries under which, subject to subparagraph (B), the PDP sponsor may, in the case of an at-risk beneficiary for prescription drug abuse who is an enrollee in a prescription drug plan of such PDP sponsor, limit such beneficiary's access to coverage for frequently abused drugs under such plan to frequently abused drugs that are prescribed for such beneficiary by one or more prescribers selected under subparagraph (D), and dispensed for such beneficiary by one or more pharmacies selected under such subparagraph.
(B) Requirement for notices
(i) In general
A PDP sponsor may not limit the access of an at-risk beneficiary for prescription drug abuse to coverage for frequently abused drugs under a prescription drug plan until such sponsor—
(I) provides to the beneficiary an initial notice described in clause (ii) and a second notice described in clause (iii); and
(II) verifies with the providers of the beneficiary that the beneficiary is an at-risk beneficiary for prescription drug abuse.
(ii) Initial notice
An initial notice described in this clause is a notice that provides to the beneficiary—
(I) notice that the PDP sponsor has identified the beneficiary as potentially being an at-risk beneficiary for prescription drug abuse;
(II) information describing all State and Federal public health resources that are designed to address prescription drug abuse to which the beneficiary has access, including mental health services and other counseling services;
(III) notice of, and information about, the right of the beneficiary to appeal such identification under subsection (h), including notice that if on reconsideration a PDP sponsor affirms its denial, in whole or in part, the case shall be automatically forwarded to the independent, outside entity contracted with the Secretary for review and resolution;
(IV) a request for the beneficiary to submit to the PDP sponsor preferences for which prescribers and pharmacies the beneficiary would prefer the PDP sponsor to select under subparagraph (D) in the case that the beneficiary is identified as an at-risk beneficiary for prescription drug abuse as described in clause (iii)(I);
(V) an explanation of the meaning and consequences of the identification of the beneficiary as potentially being an at-risk beneficiary for prescription drug abuse, including an explanation of the drug management program established by the PDP sponsor pursuant to subparagraph (A);
(VI) clear instructions that explain how the beneficiary can contact the PDP sponsor in order to submit to the PDP sponsor the preferences described in subclause (IV) and any other communications relating to the drug management program for at-risk beneficiaries established by the PDP sponsor; and
(VII) contact information for other organizations that can provide the beneficiary with assistance regarding such drug management program (similar to the information provided by the Secretary in other standardized notices provided to part D eligible individuals enrolled in prescription drug plans under this part).
(iii) Second notice
A second notice described in this clause is a notice that provides to the beneficiary notice—
(I) that the PDP sponsor has identified the beneficiary as an at-risk beneficiary for prescription drug abuse;
(II) that such beneficiary is subject to the requirements of the drug management program for at-risk beneficiaries established by such PDP sponsor for such plan;
(III) of the prescriber (or prescribers) and pharmacy (or pharmacies) selected for such individual under subparagraph (D);
(IV) of, and information about, the beneficiary's right to appeal such identification under subsection (h), including notice that if on reconsideration a PDP sponsor affirms its denial, in whole or in part, the case shall be automatically forwarded to the independent, outside entity contracted with the Secretary for review and resolution;
(V) that the beneficiary can, in the case that the beneficiary has not previously submitted to the PDP sponsor preferences for which prescribers and pharmacies the beneficiary would prefer the PDP sponsor select under subparagraph (D), submit such preferences to the PDP sponsor; and
(VI) that includes clear instructions that explain how the beneficiary can contact the PDP sponsor.
(iv) Timing of notices
(I) In general
Subject to subclause (II), a second notice described in clause (iii) shall be provided to the beneficiary on a date that is not less than 30 days after an initial notice described in clause (ii) is provided to the beneficiary.
(II) Exception
In the case that the PDP sponsor, in conjunction with the Secretary, determines that concerns identified through rulemaking by the Secretary regarding the health or safety of the beneficiary or regarding significant drug diversion activities require the PDP sponsor to provide a second notice described in clause (iii) to the beneficiary on a date that is earlier than the date described in subclause (I), the PDP sponsor may provide such second notice on such earlier date.
(C) At-risk beneficiary for prescription drug abuse
(i) In general
Except as provided in clause (v), for purposes of this paragraph, the term "at-risk beneficiary for prescription drug abuse" means a part D eligible individual who is not an exempted individual described in clause (ii) and—
(I) who is identified as such an at-risk beneficiary through the use of clinical guidelines that indicate misuse or abuse of prescription drugs described in subparagraph (G) and that are developed by the Secretary in consultation with PDP sponsors and other stakeholders, including individuals entitled to benefits under part A or enrolled under part B, advocacy groups representing such individuals, physicians, pharmacists, and other clinicians, retail pharmacies, plan sponsors, entities delegated by plan sponsors, and biopharmaceutical manufacturers; or
(II) with respect to whom the PDP sponsor of a prescription drug plan, upon enrolling such individual in such plan, received notice from the Secretary that such individual was identified under this paragraph to be an at-risk beneficiary for prescription drug abuse under the prescription drug plan in which such individual was most recently previously enrolled and such identification has not been terminated under subparagraph (F).
(ii) Exempted individual described
An exempted individual described in this clause is an individual who—
(I) receives hospice care under this subchapter;
(II) is a resident of a long-term care facility, of a facility described in
(III) the Secretary elects to treat as an exempted individual for purposes of clause (i).
(iii) Program size
The Secretary shall establish policies, including the guidelines developed under clause (i)(I) and the exemptions under clause (ii)(III), to ensure that the population of enrollees in a drug management program for at-risk beneficiaries operated by a prescription drug plan can be effectively managed by such plans.
(iv) Clinical contact
With respect to each at-risk beneficiary for prescription drug abuse enrolled in a prescription drug plan offered by a PDP sponsor, the PDP sponsor shall contact the beneficiary's providers who have prescribed frequently abused drugs regarding whether prescribed medications are appropriate for such beneficiary's medical conditions.
(v) Treatment of enrollees with a history of opioid-related overdose
(I) In general
For plan years beginning not later than January 1, 2021, a part D eligible individual who is not an exempted individual described in clause (ii) and who is identified under this clause as a part D eligible individual with a history of opioid-related overdose (as defined by the Secretary) shall be included as a potentially at-risk beneficiary for prescription drug abuse under the drug management program under this paragraph.
(II) Identification and notice
For purposes of this clause, the Secretary shall—
(aa) identify part D eligible individuals with a history of opioid-related overdose (as so defined); and
(bb) notify the PDP sponsor of the prescription drug plan in which such an individual is enrolled of such identification.
(D) Selection of prescribers and pharmacies
(i) In general
With respect to each at-risk beneficiary for prescription drug abuse enrolled in a prescription drug plan offered by such sponsor, a PDP sponsor shall, based on the preferences submitted to the PDP sponsor by the beneficiary pursuant to clauses (ii)(IV) and (iii)(V) of subparagraph (B) (except as otherwise provided in this subparagraph) select—
(I) one, or, if the PDP sponsor reasonably determines it necessary to provide the beneficiary with reasonable access under clause (ii), more than one, individual who is authorized to prescribe frequently abused drugs (referred to in this paragraph as a "prescriber") who may write prescriptions for such drugs for such beneficiary; and
(II) one, or, if the PDP sponsor reasonably determines it necessary to provide the beneficiary with reasonable access under clause (ii), more than one, pharmacy that may dispense such drugs to such beneficiary.
For purposes of subclause (II), in the case of a pharmacy that has multiple locations that share real-time electronic data, all such locations of the pharmacy shall collectively be treated as one pharmacy.
(ii) Reasonable access
In making the selections under this subparagraph—
(I) a PDP sponsor shall ensure that the beneficiary continues to have reasonable access to frequently abused drugs (as defined in subparagraph (G)), taking into account geographic location, beneficiary preference, impact on costsharing, and reasonable travel time; and
(II) a PDP sponsor shall ensure such access (including access to prescribers and pharmacies with respect to frequently abused drugs) in the case of individuals with multiple residences, in the case of natural disasters and similar situations, and in the case of the provision of emergency services.
(iii) Beneficiary preferences
If an at-risk beneficiary for prescription drug abuse submits preferences for which in-network prescribers and pharmacies the beneficiary would prefer the PDP sponsor select in response to a notice under subparagraph (B), the PDP sponsor shall—
(I) review such preferences;
(II) select or change the selection of prescribers and pharmacies for the beneficiary based on such preferences; and
(III) inform the beneficiary of such selection or change of selection.
(iv) Exception regarding beneficiary preferences
In the case that the PDP sponsor determines that a change to the selection of prescriber or pharmacy under clause (iii)(II) by the PDP sponsor is contributing or would contribute to prescription drug abuse or drug diversion by the beneficiary, the PDP sponsor may change the selection of prescriber or pharmacy for the beneficiary without regard to the preferences of the beneficiary described in clause (iii). If the PDP sponsor changes the selection pursuant to the preceding sentence, the PDP sponsor shall provide the beneficiary with—
(I) at least 30 days written notice of the change of selection; and
(II) a rationale for the change.
(v) Confirmation
Before selecting a prescriber or pharmacy under this subparagraph, a PDP sponsor must notify the prescriber and pharmacy that the beneficiary involved has been identified for inclusion in the drug management program for at-risk beneficiaries and that the prescriber and pharmacy has been selected as the beneficiary's designated prescriber and pharmacy.
(E) Terminations and appeals
The identification of an individual as an at-risk beneficiary for prescription drug abuse under this paragraph, a coverage determination made under a drug management program for at-risk beneficiaries, the selection of prescriber or pharmacy under subparagraph (D), and information to be shared under subparagraph (I), with respect to such individual, shall be subject to reconsideration and appeal under subsection (h) and if on reconsideration a PDP sponsor affirms its denial, in whole or in part, the case shall be automatically forwarded to the independent, outside entity contracted with the Secretary for review and resolution.
(F) Termination of identification
(i) In general
The Secretary shall develop standards for the termination of identification of an individual as an at-risk beneficiary for prescription drug abuse under this paragraph. Under such standards such identification shall terminate as of the earlier of—
(I) the date the individual demonstrates that the individual is no longer likely, in the absence of the restrictions under this paragraph, to be an at-risk beneficiary for prescription drug abuse described in subparagraph (C)(i); and
(II) the end of such maximum period of identification as the Secretary may specify.
(ii) Rule of construction
Nothing in clause (i) shall be construed as preventing a plan from identifying an individual as an at-risk beneficiary for prescription drug abuse under subparagraph (C)(i) after such termination on the basis of additional information on drug use occurring after the date of notice of such termination.
(G) Frequently abused drug
For purposes of this subsection, the term "frequently abused drug" means a drug that is a controlled substance that the Secretary determines to be frequently abused or diverted.
(H) Data disclosure
(i) Data on decision to impose limitation
In the case of an at-risk beneficiary for prescription drug abuse (or an individual who is a potentially at-risk beneficiary for prescription drug abuse) whose access to coverage for frequently abused drugs under a prescription drug plan has been limited by a PDP sponsor under this paragraph, the Secretary shall establish rules and procedures to require the PDP sponsor to disclose data, including any necessary individually identifiable health information, in a form and manner specified by the Secretary, about the decision to impose such limitations and the limitations imposed by the sponsor under this part.
(ii) Data to reduce fraud, abuse, and waste
The Secretary shall establish rules and procedures to require PDP sponsors operating a drug management program for at-risk beneficiaries under this paragraph to provide the Secretary with such data as the Secretary determines appropriate for purposes of identifying patterns of prescription drug utilization for plan enrollees that are outside normal patterns and that may indicate fraudulent, medically unnecessary, or unsafe use.
(I) Sharing of information for subsequent plan enrollments
The Secretary shall establish procedures under which PDP sponsors who offer prescription drug plans shall share information with respect to individuals who are at-risk beneficiaries for prescription drug abuse (or individuals who are potentially at-risk beneficiaries for prescription drug abuse) and enrolled in a prescription drug plan and who subsequently disenroll from such plan and enroll in another prescription drug plan offered by another PDP sponsor.
(J) Privacy issues
Prior to the implementation of the rules and procedures under this paragraph, the Secretary shall clarify privacy requirements, including requirements under the regulations promulgated pursuant to section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (
(K) Education
The Secretary shall provide education to enrollees in prescription drug plans of PDP sponsors and providers regarding the drug management program for at-risk beneficiaries described in this paragraph, including education—
(i) provided by Medicare administrative contractors through the improper payment outreach and education program described in
(ii) through current education efforts (such as State health insurance assistance programs described in subsection (a)(1)(A) of section 119 of the Medicare Improvements for Patients and Providers Act of 2008 (
(L) Application under MA–PD plans
Pursuant to
(M) CMS compliance review
The Secretary shall ensure that existing plan sponsor compliance reviews and audit processes include the drug management programs for at-risk beneficiaries under this paragraph, including appeals processes under such programs.
(6) 3 Utilization management tool to prevent drug abuse
(A) In general
A tool described in this paragraph is any of the following:
(i) A utilization tool designed to prevent the abuse of frequently abused drugs by individuals and to prevent the diversion of such drugs at pharmacies.
(ii) Retrospective utilization review to identify—
(I) individuals that receive frequently abused drugs at a frequency or in amounts that are not clinically appropriate; and
(II) providers of services or suppliers that may facilitate the abuse or diversion of frequently abused drugs by beneficiaries.
(iii) Consultation with the contractor described in subparagraph (B) to verify if an individual enrolling in a prescription drug plan offered by a PDP sponsor has been previously identified by another PDP sponsor as an individual described in clause (ii)(I).
(B) Reporting
A PDP sponsor offering a prescription drug plan (and an MA organization offering an MA–PD plan) in a State shall submit to the Secretary and the Medicare drug integrity contractor with which the Secretary has entered into a contract under
(i) any provider of services or supplier described in subparagraph (A)(ii)(II) that is identified by such plan sponsor (or organization) during the 30-day period before such report is submitted; and
(ii) the name and prescription records of individuals described in paragraph (5)(C).
(C) CMS compliance review
The Secretary shall ensure that plan sponsor compliance reviews and program audits biennially include a certification that utilization management tools under this paragraph are in compliance with the requirements for such tools.
(6) 3 Providing prescription drug plans with parts A and B claims data to promote the appropriate use of medications and improve health outcomes
(A) Process
Subject to subparagraph (B), the Secretary shall establish a process under which a PDP sponsor of a prescription drug plan may submit a request for the Secretary to provide the sponsor, on a periodic basis and in an electronic format, beginning in plan year 2020, data described in subparagraph (D) with respect to enrollees in such plan. Such data shall be provided without regard to whether such enrollees are described in clause (ii) of paragraph (2)(A).
(B) Purposes
A PDP sponsor may use the data provided to the sponsor pursuant to subparagraph (A) for any of the following purposes:
(i) To optimize therapeutic outcomes through improved medication use, as such phrase is used in clause (i) of paragraph (2)(A).
(ii) To improving care coordination so as to prevent adverse health outcomes, such as preventable emergency department visits and hospital readmissions.
(iii) For any other purpose determined appropriate by the Secretary.
(C) Limitations on data use
A PDP sponsor shall not use data provided to the sponsor pursuant to subparagraph (A) for any of the following purposes:
(i) To inform coverage determinations under this part.
(ii) To conduct retroactive reviews of medically accepted indications determinations.
(iii) To facilitate enrollment changes to a different prescription drug plan or an MA–PD plan offered by the same parent organization.
(iv) To inform marketing of benefits.
(v) For any other purpose that the Secretary determines is necessary to include in order to protect the identity of individuals entitled to, or enrolled for, benefits under this subchapter and to protect the security of personal health information.
(D) Data described
The data described in this clause are standardized extracts (as determined by the Secretary) of claims data under parts A and B for items and services furnished under such parts for time periods specified by the Secretary. Such data shall include data as current as practicable.
(d) Consumer satisfaction surveys
In order to provide for comparative information under
(e) Electronic prescription program
(1) Application of standards
As of such date as the Secretary may specify, but not later than 1 year after the date of promulgation of final standards under paragraph (4)(D), prescriptions and other information described in paragraph (2)(A) for covered part D drugs prescribed for part D eligible individuals that are transmitted electronically shall be transmitted only in accordance with such standards under an electronic prescription drug program that meets the requirements of paragraph (2).
(2) Program requirements
Consistent with uniform standards established under paragraph (3)—
(A) Provision of information to prescribing health care professional and dispensing pharmacies and pharmacists
An electronic prescription drug program shall provide for the electronic transmittal to the prescribing health care professional and to the dispensing pharmacy and pharmacist of the prescription and information on eligibility and benefits (including the drugs included in the applicable formulary, any tiered formulary structure, and any requirements for prior authorization) and of the following information with respect to the prescribing and dispensing of a covered part D drug:
(i) Information on the drug being prescribed or dispensed and other drugs listed on the medication history, including information on drug-drug interactions, warnings or cautions, and, when indicated, dosage adjustments.
(ii) Information on the availability of lower cost, therapeutically appropriate alternatives (if any) for the drug prescribed.
(B) Application to medical history information
Effective on and after such date as the Secretary specifies and after the establishment of appropriate standards to carry out this subparagraph, the program shall provide for the electronic transmittal in a manner similar to the manner under subparagraph (A) of information that relates to the medical history concerning the individual and related to a covered part D drug being prescribed or dispensed, upon request of the professional or pharmacist involved.
(C) Limitations
Information shall only be disclosed under subparagraph (A) or (B) if the disclosure of such information is permitted under the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996.
(D) Timing
To the extent feasible, the information exchanged under this paragraph shall be on an interactive, real-time basis.
(E) Electronic prior authorization
(i) In general
Not later than January 1, 2021, the program shall provide for the secure electronic transmission of—
(I) a prior authorization request from the prescribing health care professional for coverage of a covered part D drug for a part D eligible individual enrolled in a part D plan (as defined in
(II) a response, in accordance with this subparagraph, from such PDP sponsor or Medicare Advantage organization, respectively, to such professional.
(ii) Electronic transmission
(I) Exclusions
For purposes of this subparagraph, a facsimile, a proprietary payer portal that does not meet standards specified by the Secretary, or an electronic form shall not be treated as an electronic transmission described in clause (i).
(II) Standards
In order to be treated, for purposes of this subparagraph, as an electronic transmission described in clause (i), such transmission shall comply with technical standards adopted by the Secretary in consultation with the National Council for Prescription Drug Programs, other standard setting organizations determined appropriate by the Secretary, and stakeholders including PDP sponsors, Medicare Advantage organizations, health care professionals, and health information technology software vendors.
(III) Application
Notwithstanding any other provision of law, for purposes of this subparagraph, the Secretary may require the use of such standards adopted under subclause (II) in lieu of any other applicable standards for an electronic transmission described in clause (i) for a covered part D drug for a part D eligible individual.
(3) Standards
(A) In general
The Secretary shall provide consistent with this subsection for the promulgation of uniform standards relating to the requirements for electronic prescription drug programs under paragraph (2).
(B) Objectives
Such standards shall be consistent with the objectives of improving—
(i) patient safety;
(ii) the quality of care provided to patients; and
(iii) efficiencies, including cost savings, in the delivery of care.
(C) Design criteria
Such standards shall—
(i) be designed so that, to the extent practicable, the standards do not impose an undue administrative burden on prescribing health care professionals and dispensing pharmacies and pharmacists;
(ii) be compatible with standards established under part C of subchapter XI, standards established under subsection (b)(2)(B)(i), and with general health information technology standards; and
(iii) be designed so that they permit electronic exchange of drug labeling and drug listing information maintained by the Food and Drug Administration and the National Library of Medicine.
(D) Permitting use of appropriate messaging
Such standards shall allow for the messaging of information only if it relates to the appropriate prescribing of drugs, including quality assurance measures and systems referred to in subsection (c)(1)(B).
(E) Permitting patient designation of dispensing pharmacy
(i) In general
Consistent with clause (ii), such standards shall permit a part D eligible individual to designate a particular pharmacy to dispense a prescribed drug.
(ii) No change in benefits
Clause (i) shall not be construed as affecting—
(I) the access required to be provided to pharmacies by a prescription drug plan; or
(II) the application of any differences in benefits or payments under such a plan based on the pharmacy dispensing a covered part D drug.
(4) Development, promulgation, and modification of standards
(A) Initial standards
Not later than September 1, 2005, the Secretary shall develop, adopt, recognize, or modify initial uniform standards relating to the requirements for electronic prescription drug programs described in paragraph (2) taking into consideration the recommendations (if any) from the National Committee on Vital and Health Statistics (as established under
(B) Role of NCVHS
The National Committee on Vital and Health Statistics shall develop recommendations for uniform standards relating to such requirements in consultation with the following:
(i) Standard setting organizations (as defined in
(ii) Practicing physicians.
(iii) Hospitals.
(iv) Pharmacies.
(v) Practicing pharmacists.
(vi) Pharmacy benefit managers.
(vii) State boards of pharmacy.
(viii) State boards of medicine.
(ix) Experts on electronic prescribing.
(x) Other appropriate Federal agencies.
(C) Pilot project to test initial standards
(i) In general
During the 1-year period that begins on January 1, 2006, the Secretary shall conduct a pilot project to test the initial standards developed under subparagraph (A) prior to the promulgation of the final uniform standards under subparagraph (D) in order to provide for the efficient implementation of the requirements described in paragraph (2).
(ii) Exception
Pilot testing of standards is not required under clause (i) where there already is adequate industry experience with such standards, as determined by the Secretary after consultation with effected standard setting organizations and industry users.
(iii) Voluntary participation of physicians and pharmacies
In order to conduct the pilot project under clause (i), the Secretary shall enter into agreements with physicians, physician groups, pharmacies, hospitals, PDP sponsors, MA organizations, and other appropriate entities under which health care professionals electronically transmit prescriptions to dispensing pharmacies and pharmacists in accordance with such standards.
(iv) Evaluation and report
(I) Evaluation
The Secretary shall conduct an evaluation of the pilot project conducted under clause (i).
(II) Report to Congress
Not later than April 1, 2007, the Secretary shall submit to Congress a report on the evaluation conducted under subclause (I).
(D) Final standards
Based upon the evaluation of the pilot project under subparagraph (C)(iv)(I) and not later than April 1, 2008, the Secretary shall promulgate uniform standards relating to the requirements described in paragraph (2).
(5) Relation to State laws
The standards promulgated under this subsection shall supersede any State law or regulation that—
(A) is contrary to the standards or restricts the ability to carry out this part; and
(B) pertains to the electronic transmission of medication history and of information on eligibility, benefits, and prescriptions with respect to covered part D drugs under this part.
(6) Establishment of safe harbor
The Secretary, in consultation with the Attorney General, shall promulgate regulations that provide for a safe harbor from sanctions under paragraphs (1) and (2) of
(A) in the case of a hospital, by the hospital to members of its medical staff;
(B) in the case of a group practice (as defined in
(C) in the case of a PDP sponsor or MA organization, by the sponsor or organization to pharmacists and pharmacies participating in the network of such sponsor or organization, and to prescribing health care professionals.
(7) Requirement of e-prescribing for controlled substances
(A) In general
Subject to subparagraph (B), a prescription for a covered part D drug under a prescription drug plan (or under an MA–PD plan) for a schedule II, III, IV, or V controlled substance shall be transmitted by a health care practitioner electronically in accordance with an electronic prescription drug program that meets the requirements of paragraph (2).
(B) Exception for certain circumstances
The Secretary shall, through rulemaking, specify circumstances and processes by which the Secretary may waive the requirement under subparagraph (A), with respect to a covered part D drug, including in the case of—
(i) a prescription issued when the practitioner and dispensing pharmacy are the same entity;
(ii) a prescription issued that cannot be transmitted electronically under the most recently implemented version of the National Council for Prescription Drug Programs SCRIPT Standard;
(iii) a prescription issued by a practitioner who received a waiver or a renewal thereof for a period of time as determined by the Secretary, not to exceed one year, from the requirement to use electronic prescribing due to demonstrated economic hardship, technological limitations that are not reasonably within the control of the practitioner, or other exceptional circumstance demonstrated by the practitioner;
(iv) a prescription issued by a practitioner under circumstances in which, notwithstanding the practitioner's ability to submit a prescription electronically as required by this subsection, such practitioner reasonably determines that it would be impractical for the individual involved to obtain substances prescribed by electronic prescription in a timely manner, and such delay would adversely impact the individual's medical condition involved;
(v) a prescription issued by a practitioner prescribing a drug under a research protocol;
(vi) a prescription issued by a practitioner for a drug for which the Food and Drug Administration requires a prescription to contain elements that are not able to be included in electronic prescribing, such as a drug with risk evaluation and mitigation strategies that include elements to assure safe use;
(vii) a prescription issued by a practitioner—
(I) for an individual who receives hospice care under this subchapter; and
(II) that is not covered under the hospice benefit under this subchapter; and
(viii) a prescription issued by a practitioner for an individual who is—
(I) a resident of a nursing facility (as defined in
(II) dually eligible for benefits under this subchapter and subchapter XIX.
(C) Dispensing
(i) Nothing in this paragraph shall be construed as requiring a sponsor of a prescription drug plan under this part, MA organization offering an MA–PD plan under part C, or a pharmacist to verify that a practitioner, with respect to a prescription for a covered part D drug, has a waiver (or is otherwise exempt) under subparagraph (B) from the requirement under subparagraph (A).
(ii) Nothing in this paragraph shall be construed as affecting the ability of the plan to cover or the pharmacists' ability to continue to dispense covered part D drugs from otherwise valid written, oral, or fax prescriptions that are consistent with laws and regulations.
(iii) Nothing in this paragraph shall be construed as affecting the ability of an individual who is being prescribed a covered part D drug to designate a particular pharmacy to dispense the covered part D drug to the extent consistent with the requirements under subsection (b)(1) and under this paragraph.
(D) Enforcement
The Secretary shall, through rulemaking, have authority to enforce and specify appropriate penalties for non-compliance with the requirement under subparagraph (A).
(f) Grievance mechanism
Each PDP sponsor shall provide meaningful procedures for hearing and resolving grievances between the sponsor (including any entity or individual through which the sponsor provides covered benefits) and enrollees with prescription drug plans of the sponsor under this part in accordance with
(g) Coverage determinations and reconsiderations
(1) Application of coverage determination and reconsideration provisions
A PDP sponsor shall meet the requirements of paragraphs (1) through (3) of
(2) Request for a determination for the treatment of tiered formulary drug
In the case of a prescription drug plan offered by a PDP sponsor that provides for tiered cost-sharing for drugs included within a formulary and provides lower cost-sharing for preferred drugs included within the formulary, a part D eligible individual who is enrolled in the plan may request an exception to the tiered cost-sharing structure. Under such an exception, a nonpreferred drug could be covered under the terms applicable for preferred drugs if the prescribing physician determines that the preferred drug for treatment of the same condition either would not be as effective for the individual or would have adverse effects for the individual or both. A PDP sponsor shall have an exceptions process under this paragraph consistent with guidelines established by the Secretary for making a determination with respect to such a request. Denial of such an exception shall be treated as a coverage denial for purposes of applying subsection (h).
(h) Appeals
(1) In general
Subject to paragraph (2), a PDP sponsor shall meet the requirements of paragraphs (4) and (5) of
(2) Limitation in cases on nonformulary determinations
A part D eligible individual who is enrolled in a prescription drug plan offered by a PDP sponsor may appeal under paragraph (1) a determination not to provide for coverage of a covered part D drug that is not on the formulary under the plan only if the prescribing physician determines that all covered part D drugs on any tier of the formulary for treatment of the same condition would not be as effective for the individual as the nonformulary drug, would have adverse effects for the individual, or both.
(3) Treatment of nonformulary determinations
If a PDP sponsor determines that a plan provides coverage for a covered part D drug that is not on the formulary of the plan, the drug shall be treated as being included on the formulary for purposes of
(i) Privacy, confidentiality, and accuracy of enrollee records
The provisions of
(j) Treatment of accreditation
Subparagraph (A) of
(1) Subsection (b) of this section (relating to access to covered part D drugs).
(2) Subsection (c) of this section (including quality assurance and medication therapy management).
(3) Subsection (i) of this section (relating to confidentiality and accuracy of enrollee records).
(k) Public disclosure of pharmaceutical prices for equivalent drugs
(1) In general
A PDP sponsor offering a prescription drug plan shall provide that each pharmacy that dispenses a covered part D drug shall inform an enrollee of any differential between the price of the drug to the enrollee and the price of the lowest priced generic covered part D drug under the plan that is therapeutically equivalent and bioequivalent and available at such pharmacy.
(2) Timing of notice
(A) In general
Subject to subparagraph (B), the information under paragraph (1) shall be provided at the time of purchase of the drug involved, or, in the case of dispensing by mail order, at the time of delivery of such drug.
(B) Waiver
The Secretary may waive subparagraph (A) in such circumstances as the Secretary may specify.
(l) Requirements with respect to sales and marketing activities
The following provisions shall apply to a PDP sponsor (and the agents, brokers, and other third parties representing such sponsor) in the same manner as such provisions apply to a Medicare Advantage organization (and the agents, brokers, and other third parties representing such organization):
(1) The prohibition under
(2) The requirement under
(3) The inclusion of the plan type in the plan name under
(4) The requirements regarding the appointment of agents and brokers and compliance with State information requests under subparagraphs (A) and (B), respectively, of
(m) Prohibition on limiting certain information on drug prices
A PDP sponsor and a Medicare Advantage organization shall ensure that each prescription drug plan or MA–PD plan offered by the sponsor or organization does not restrict a pharmacy that dispenses a prescription drug or biological from informing, nor penalize such pharmacy for informing, an enrollee in such plan of any differential between the negotiated price of, or copayment or coinsurance for, the drug or biological to the enrollee under the plan and a lower price the individual would pay for the drug or biological if the enrollee obtained the drug without using any health insurance coverage.
(n) Program integrity transparency measures
For program integrity transparency measures applied with respect to prescription drug plan and MA plans, see
(o) Real-time benefit information
(1) In general
After the Secretary has adopted a standard under paragraph (3) for electronic real-time benefit tools, and at a time determined appropriate by the Secretary, a PDP sponsor of a prescription drug plan shall implement one or more of such tools that meet the requirements described in paragraph (2).
(2) Requirements
For purposes of paragraph (1), the requirements described in this paragraph, with respect to an electronic real-time benefit tool, are that the tool is capable of—
(A) integrating with electronic prescribing and electronic health record systems of prescribing health care professionals for the transmission of formulary and benefit information in real time to such professionals; and
(B) with respect to a covered part D drug, transmitting such information specific to an individual enrolled in a prescription drug plan, including the following:
(i) A list of any clinically-appropriate alternatives to such drug included in the formulary of such plan.
(ii) Cost-sharing information and the negotiated price for such drug and such alternatives at multiple pharmacy options, including the individual's preferred pharmacy and, as applicable, other retail pharmacies and a mail order pharmacy.
(iii) The formulary status of such drug and such alternatives and any prior authorization or other utilization management requirements applicable to such drug and such alternatives included in the formulary of such plan.
(3) Standards
In order to be treated (for purposes of this subsection) as an electronic real-time benefit tool described in paragraph (1), such tool shall comply with technical standards adopted by the Secretary in consultation with the National Coordinator for Health Information Technology through notice and comment rulemaking. Such technical standards adopted by the Secretary shall be developed by a standards development organization, such as the National Council for Prescription Drug Programs, that consults with stakeholders such as PDP sponsors, Medicare Advantage organizations, beneficiary advocates, health care professionals, and health information technology software vendors.
(4) Rules of construction
Nothing in this subsection shall be construed—
(A) to prohibit the application of paragraph (b)(7) of section 423.160 of title 42, Code of Federal Regulations, as is to be added to such section pursuant to the final rule published in the Federal Register on May 23, 2019, and titled "Modernizing Part D and Medicare Advantage To Lower Drug Prices and Reduce Out-of-Pocket Expenses" (84 Fed. Reg. 23832 through 23884); or
(B) to allow a PDP sponsor to use a real-time benefit tool to steer an individual, without the consent of the individual, to a particular pharmacy or pharmacy type over their preferred pharmacy or pharmacy type nor prohibit the designation of an individual's preferred pharmacy under such tool.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–4, as added
Editorial Notes
References in Text
Section 6052 of the SUPPORT for Patients and Communities Act, referred to in subsec. (c)(4)(D)(v)(I), is section 6052 of title VI of
Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsecs. (c)(5)(J) and (e)(2)(C), is section 264(c) of
Section 119 of the Medicare Improvements for Patients and Providers Act of 2008, referred to in subsec. (c)(5)(K)(ii), is section 119 of
Amendments
2022—Subsec. (a)(4)(B)(i).
Subsec. (b)(3)(I).
2020—Subsec. (b)(4).
Subsecs. (m), (n).
Subsec. (o).
2018—Subsec. (a)(1)(A).
Subsec. (a)(1)(B)(vi).
Subsec. (a)(1)(C).
Subsec. (c)(1)(F).
Subsec. (c)(2)(A)(ii).
Subsec. (c)(2)(B).
Subsec. (c)(4)(D).
Subsec. (c)(5)(A).
Subsec. (c)(5)(B)(ii)(III), (iii)(IV).
Subsec. (c)(5)(C)(i).
Subsec. (c)(5)(C)(v).
Subsec. (c)(5)(E).
Subsec. (c)(6).
Subsec. (e)(2)(E).
Subsec. (e)(7).
Subsec. (m).
2016—Subsec. (a)(1)(B)(v).
Subsec. (c)(1)(E).
Subsec. (c)(5).
Subsec. (c)(6).
2015—Subsec. (c)(4).
2010—Subsec. (b)(3)(G).
Subsec. (b)(3)(H).
Subsec. (c)(2)(C) to (G).
Subsec. (c)(3).
2008—Subsec. (b)(3)(C)(i).
Subsec. (b)(3)(G).
Subsec. (l).
Subsec. (l)(2).
Subsec. (l)(3).
Subsec. (l)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Effective Date of 2016 Amendment
Amendment by
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by section 103(a)(2) of
Amendment by section 103(b)(2) of
Amendment by section 103(d)(2) of
Rule of Construction
Implementation of 2020 Amendment
Update of Biometric Component of Multifactor Authentication
Grants To Provide Technical Assistance to Outlier Prescribers of Opioids
"(a)
"(b)
"(1) to educate and provide outreach to outlier prescribers of opioids about best practices for prescribing opioids;
"(2) to educate and provide outreach to outlier prescribers of opioids about non-opioid pain management therapies; and
"(3) to reduce the amount of opioid prescriptions prescribed by outlier prescribers of opioids.
"(c)
"(d)
"(e)
"(1)
"(A) an organization—
"(i) that has demonstrated experience providing technical assistance to health care professionals on a State or regional basis; and
"(ii) that has at least—
"(I) one individual who is a representative of consumers on its governing body; and
"(II) one individual who is a representative of health care providers on its governing body; or
"(B) an entity that is a quality improvement entity with a contract under part B of title XI of the Social Security Act (
"(2)
"(3)
"(f)
Grants to Physicians To Implement Electronic Prescription Drug Programs
"(a)
"(b)
"(1)
"(2)
"(A) give special consideration to physicians who serve a disproportionate number of medicare patients; and
"(B) give preference to physicians who serve a rural or underserved area.
"(3)
"(c)
"(1)
"(2)
"(A) For purchasing, leasing, and installing computer software and hardware, including handheld computer technologies.
"(B) Making upgrades and other improvements to existing computer software and hardware to enable e-prescribing.
"(C) Providing education and training to eligible physician staff on the use of technology to implement the electronic transmission of prescription and patient information.
"(3)
"(A) evaluate the project for which the grant is made; and
"(B) ensure that funding provided under the grant is expended only for the purposes for which it is made.
"(4)
"(5)
"(d)
1 So in original. Probably means first par. (6).
2 So in original. Two subpars. (E) have been enacted.
3 So in original. Two pars. (6) have been enacted.
4 So in original. Probably should be followed by a period.
subpart 2—prescription drug plans; pdp sponsors; financing
§1395w–111. PDP regions; submission of bids; plan approval
(a) Establishment of PDP regions; service areas
(1) Coverage of entire PDP region
The service area for a prescription drug plan shall consist of an entire PDP region established under paragraph (2).
(2) Establishment of PDP regions
(A) In general
The Secretary shall establish, and may revise, PDP regions in a manner that is consistent with the requirements for the establishment and revision of MA regions under subparagraphs (B) and (C) of
(B) Relation to MA regions
To the extent practicable, PDP regions shall be the same as MA regions under
(C) Authority for territories
The Secretary shall establish, and may revise, PDP regions for areas in States that are not within the 50 States or the District of Columbia.
(3) National plan
Nothing in this subsection shall be construed as preventing a prescription drug plan from being offered in more than one PDP region (including all PDP regions).
(b) Submission of bids, premiums, and related information
(1) In general
A PDP sponsor shall submit to the Secretary information described in paragraph (2) with respect to each prescription drug plan it offers. Such information shall be submitted at the same time and in a similar manner to the manner in which information described in paragraph (6) of
(2) Information described
The information described in this paragraph is information on the following:
(A) Coverage provided
The prescription drug coverage provided under the plan, including the deductible and other cost-sharing.
(B) Actuarial value
The actuarial value of the qualified prescription drug coverage in the region for a part D eligible individual with a national average risk profile for the factors described in
(C) Bid
Information on the bid, including an actuarial certification of—
(i) the basis for the actuarial value described in subparagraph (B) assumed in such bid;
(ii) the portion of such bid attributable to basic prescription drug coverage and, if applicable, the portion of such bid attributable to supplemental benefits;
(iii) assumptions regarding the reinsurance subsidy payments provided under
(iv) administrative expenses assumed in the bid.
(D) Service area
The service area for the plan.
(E) Level of risk assumed
(i) In general
Whether the PDP sponsor requires a modification of risk level under clause (ii) and, if so, the extent of such modification. Any such modification shall apply with respect to all prescription drug plans offered by a PDP sponsor in a PDP region. This subparagraph shall not apply to an MA–PD plan.
(ii) Risk levels described
A modification of risk level under this clause may consist of one or more of the following:
(I) Increase in Federal percentage assumed in initial risk corridor
An equal percentage point increase in the percents applied under subparagraphs (B)(i), (B)(ii)(I), (C)(i), and (C)(ii)(I) of
(II) Increase in Federal percentage assumed in second risk corridor
An equal percentage point increase in the percents applied under subparagraphs (B)(ii)(II) and (C)(ii)(II) of
(III) Decrease in size of risk corridors
A decrease in the threshold risk percentages specified in
(F) Additional information
Such other information as the Secretary may require to carry out this part.
(3) Paperwork reduction for offering of prescription drug plans nationally or in multi-region areas
The Secretary shall establish requirements for information submission under this subsection in a manner that promotes the offering of such plans in more than one PDP region (including all regions) through the filing of consolidated information.
(c) Actuarial valuation
(1) Processes
For purposes of this part, the Secretary shall establish processes and methods for determining the actuarial valuation of prescription drug coverage, including—
(A) an actuarial valuation of standard prescription drug coverage under
(B) actuarial valuations relating to alternative prescription drug coverage under
(C) an actuarial valuation of the reinsurance subsidy payments under
(D) the use of generally accepted actuarial principles and methodologies; and
(E) applying the same methodology for determinations of actuarial valuations under subparagraphs (A) and (B).
(2) Accounting for drug utilization
Such processes and methods for determining actuarial valuation shall take into account the effect that providing alternative prescription drug coverage (rather than standard prescription drug coverage) has on drug utilization.
(3) Responsibilities
(A) Plan responsibilities
PDP sponsors and MA organizations are responsible for the preparation and submission of actuarial valuations required under this part for prescription drug plans and MA–PD plans they offer.
(B) Use of outside actuaries
Under the processes and methods established under paragraph (1), PDP sponsors offering prescription drug plans and MA organizations offering MA–PD plans may use actuarial opinions certified by independent, qualified actuaries to establish actuarial values.
(d) Review of information and negotiation
(1) Review of information
The Secretary shall review the information filed under subsection (b) for the purpose of conducting negotiations under paragraph (2).
(2) Negotiation regarding terms and conditions
Subject to subsection (i), in exercising the authority under paragraph (1), the Secretary—
(A) has the authority to negotiate the terms and conditions of the proposed bid submitted and other terms and conditions of a proposed plan; and
(B) has authority similar to the authority of the Director of the Office of Personnel Management with respect to health benefits plans under
(3) Rejection of bids
Paragraph (5)(C) of
(e) Approval of proposed plans
(1) In general
After review and negotiation under subsection (d), the Secretary shall approve or disapprove the prescription drug plan.
(2) Requirements for approval
The Secretary may approve a prescription drug plan only if the following requirements are met:
(A) Compliance with requirements
The plan and the PDP sponsor offering the plan comply with the requirements under this part, including the provision of qualified prescription drug coverage.
(B) Actuarial determinations
The Secretary determines that the plan and PDP sponsor meet the requirements under this part relating to actuarial determinations, including such requirements under
(C) Application of FEHBP standard
(i) In general
The Secretary determines that the portion of the bid submitted under subsection (b) that is attributable to basic prescription drug coverage is supported by the actuarial bases provided under such subsection and reasonably and equitably reflects the revenue requirements (as used for purposes of
(ii) Supplemental coverage
The Secretary determines that the portion of the bid submitted under subsection (b) that is attributable to supplemental prescription drug coverage pursuant to
(D) Plan design
(i) In general
The Secretary does not find that the design of the plan and its benefits (including any formulary and tiered formulary structure) are likely to substantially discourage enrollment by certain part D eligible individuals under the plan.
(ii) Use of categories and classes in formularies
The Secretary may not find that the design of categories and classes within a formulary violates clause (i) if such categories and classes are consistent with guidelines (if any) for such categories and classes established by the United States Pharmacopeia.
(f) Application of limited risk plans
(1) Conditions for approval of limited risk plans
The Secretary may only approve a limited risk plan (as defined in paragraph (4)(A)) for a PDP region if the access requirements under
(2) Rules
The following rules shall apply with respect to the approval of a limited risk plan in a PDP region:
(A) Limited exercise of authority
Only the minimum number of such plans may be approved in order to meet the access requirements under
(B) Maximizing assumption of risk
The Secretary shall provide priority in approval for those plans bearing the highest level of risk (as computed by the Secretary), but the Secretary may take into account the level of the bids submitted by such plans.
(C) No full underwriting for limited risk plans
In no case may the Secretary approve a limited risk plan under which the modification of risk level provides for no (or a de minimis) level of financial risk.
(3) Acceptance of all full risk contracts
There shall be no limit on the number of full risk plans that are approved under subsection (e).
(4) Risk-plans defined
For purposes of this subsection:
(A) Limited risk plan
The term "limited risk plan" means a prescription drug plan that provides basic prescription drug coverage and for which the PDP sponsor includes a modification of risk level described in subparagraph (E) of subsection (b)(2) in its bid submitted for the plan under such subsection. Such term does not include a fallback prescription drug plan.
(B) Full risk plan
The term "full risk plan" means a prescription drug plan that is not a limited risk plan or a fallback prescription drug plan.
(g) Guaranteeing access to coverage
(1) Solicitation of bids
(A) In general
Separate from the bidding process under subsection (b), the Secretary shall provide for a process for the solicitation of bids from eligible fallback entities (as defined in paragraph (2)) for the offering in all fallback service areas (as defined in paragraph (3)) in one or more PDP regions of a fallback prescription drug plan (as defined in paragraph (4)) during the contract period specified in paragraph (5).
(B) Acceptance of bids
(i) In general
Except as provided in this subparagraph, the provisions of subsection (e) shall apply with respect to the approval or disapproval of fallback prescription drug plans. The Secretary shall enter into contracts under this subsection with eligible fallback entities for the offering of fallback prescription drug plans so approved in fallback service areas.
(ii) Limitation of 1 plan for all fallback service areas in a PDP region
With respect to all fallback service areas in any PDP region for a contract period, the Secretary shall approve the offering of only 1 fallback prescription drug plan.
(iii) Competitive procedures
Competitive procedures (as defined in
(iv) Timing
The Secretary shall approve a fallback prescription drug plan for a PDP region in a manner so that, if there are any fallback service areas in the region for a year, the fallback prescription drug plan is offered at the same time as prescription drug plans would otherwise be offered.
(V) 2 No national fallback plan
The Secretary shall not enter into a contract with a single fallback entity for the offering of fallback plans throughout the United States.
(2) Eligible fallback entity
For purposes of this section, the term "eligible fallback entity" means, with respect to all fallback service areas in a PDP region for a contract period, an entity that—
(A) meets the requirements to be a PDP sponsor (or would meet such requirements but for the fact that the entity is not a risk-bearing entity); and
(B) does not submit a bid under subsection (b) for any prescription drug plan for any PDP region for the first year of such contract period.
For purposes of subparagraph (B), an entity shall be treated as submitting a bid with respect to a prescription drug plan if the entity is acting as a subcontractor of a PDP sponsor that is offering such a plan. The previous sentence shall not apply to entities that are subcontractors of an MA organization except insofar as such organization is acting as a PDP sponsor with respect to a prescription drug plan.
(3) Fallback service area
For purposes of this subsection, the term "fallback service area" means, for a PDP region with respect to a year, any area within such region for which the Secretary determines before the beginning of the year that the access requirements of the first sentence of
(4) Fallback prescription drug plan
For purposes of this part, the term "fallback prescription drug plan" means a prescription drug plan that—
(A) only offers the standard prescription drug coverage and access to negotiated prices described in
(B) meets such other requirements as the Secretary may specify.
(5) Payments under the contract
(A) In general
A contract entered into under this subsection shall provide for—
(i) payment for the actual costs (taking into account negotiated price concessions described in
(ii) payment of management fees that are tied to performance measures established by the Secretary for the management, administration, and delivery of the benefits under the contract.
(B) Performance measures
The performance measures established by the Secretary pursuant to subparagraph (A)(ii) shall include at least measures for each of the following:
(i) Costs
The entity contains costs to the Medicare Prescription Drug Account and to part D eligible individuals enrolled in a fallback prescription drug plan offered by the entity through mechanisms such as generic substitution and price discounts.
(ii) Quality programs
The entity provides such enrollees with quality programs that avoid adverse drug reactions and overutilization and reduce medical errors.
(iii) Customer service
The entity provides timely and accurate delivery of services and pharmacy and beneficiary support services.
(iv) Benefit administration and claims adjudication
The entity provides efficient and effective benefit administration and claims adjudication.
(6) Monthly beneficiary premium
Except as provided in
(7) General contract terms and conditions
(A) In general
Except as may be appropriate to carry out this section, the terms and conditions of contracts with eligible fallback entities offering fallback prescription drug plans under this subsection shall be the same as the terms and conditions of contracts under this part for prescription drug plans.
(B) Period of contract
(i) In general
Subject to clause (ii), a contract approved for a fallback prescription drug plan for fallback service areas for a PDP region under this section shall be for a period of 3 years (except as may be renewed after a subsequent bidding process).
(ii) Limitation
A fallback prescription drug plan may be offered under a contract in an area for a year only if that area is a fallback service area for that year.
(C) Entity not permitted to market or brand fallback prescription drug plans
An eligible fallback entity with a contract under this subsection may not engage in any marketing or branding of a fallback prescription drug plan.
(h) Annual report on use of limited risk plans and fallback plans
The Secretary shall submit to Congress an annual report that describes instances in which limited risk plans and fallback prescription drug plans were offered under subsections (f) and (g). The Secretary shall include in such report such recommendations as may be appropriate to limit the need for the provision of such plans and to maximize the assumption of financial risk under section subsection 3 (f).
(i) Noninterference
In order to promote competition under this part and in carrying out this part, the Secretary—
(1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors;
(2) may not require a particular formulary, except as provided under section 1395w–104(b)(3)(l) 4 of this title; and
(3) may not institute a price structure for the reimbursement of covered part D drugs, except as provided under part E of subchapter XI.
(j) Coordination of benefits
A PDP sponsor offering a prescription drug plan shall permit State Pharmaceutical Assistance Programs and Rx plans under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–11, as added
Editorial Notes
References in Text
Codification
In subsec. (g)(1)(B)(iii), "
Amendments
2022—Subsec. (g)(6).
Subsec. (i)(1).
Subsec. (i)(2).
Subsec. (i)(3).
2010—Subsec. (d)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
Study Regarding Regional Variations in Prescription Drug Spending
"(1)
"(A) price variations (described in section 1860D–15(c)(2) of such Act [
"(B) differences in per capita utilization that is not taken into account in the health status risk adjustment provided under section 1860D–15(c)(1) of such Act [
"(2)
"(A) information regarding the extent of geographic variation described in paragraph (1)(B);
"(B) an analysis of the impact on direct subsidies under section 1860D–15(a)(1) of the Social Security Act [
"(C) recommendations regarding the appropriateness of applying an additional geographic adjustment factor under section 1860D–15(c)(2) [
1 See References in Text note below.
2 So in original. Probably should be "(v)".
4 So in original. Probably should be "(b)(3)(I)".
§1395w–112. Requirements for and contracts with prescription drug plan (PDP) sponsors
(a) General requirements
Each PDP sponsor of a prescription drug plan shall meet the following requirements:
(1) Licensure
Subject to subsection (c), the sponsor is organized and licensed under State law as a risk-bearing entity eligible to offer health insurance or health benefits coverage in each State in which it offers a prescription drug plan.
(2) Assumption of financial risk for unsubsidized coverage
(A) In general
Subject to subparagraph (B), to the extent that the entity is at risk the entity assumes financial risk on a prospective basis for benefits that it offers under a prescription drug plan and that is not covered under
(B) Reinsurance permitted
The plan sponsor may obtain insurance or make other arrangements for the cost of coverage provided to any enrollee to the extent that the sponsor is at risk for providing such coverage.
(3) Solvency for unlicensed sponsors
In the case of a PDP sponsor that is not described in paragraph (1) and for which a waiver has been approved under subsection (c), such sponsor shall meet solvency standards established by the Secretary under subsection (d).
(b) Contract requirements
(1) In general
The Secretary shall not permit the enrollment under
(2) Limitation on entities offering fallback prescription drug plans
The Secretary shall not enter into a contract with a PDP sponsor for the offering of a prescription drug plan (other than a fallback prescription drug plan) in a PDP region for a year if the sponsor—
(A) submitted a bid under
(B) offers a fallback prescription drug plan in any PDP region during the year; or
(C) offered a fallback prescription drug plan in that PDP region during the previous year.
For purposes of this paragraph, an entity shall be treated as submitting a bid with respect to a prescription drug plan or offering a fallback prescription drug plan if the entity is acting as a subcontractor of a PDP sponsor that is offering such a plan. The previous sentence shall not apply to entities that are subcontractors of an MA organization except insofar as such organization is acting as a PDP sponsor with respect to a prescription drug plan.
(3) Incorporation of certain medicare advantage contract requirements
Except as otherwise provided, the following provisions of
(A) Minimum enrollment
Paragraphs (1) and (3) of
(i) the Secretary may increase the minimum number of enrollees required under such paragraph (1) as the Secretary determines appropriate; and
(ii) the requirement of such paragraph (1) shall be waived during the first contract year with respect to an organization in a region.
(B) Contract period and effectiveness
(C) Protections against fraud and beneficiary protections
(D) Additional contract terms
(i) may be used for the purposes of carrying out this part, improving public health through research on the utilization, safety, effectiveness, quality, and efficiency of health care services (as the Secretary determines appropriate), or carrying out part E of subchapter XI; and
(ii) shall be made available to Congressional 1 support agencies (in accordance with their obligations to support Congress as set out in their authorizing statutes) for the purposes of conducting Congressional 1 oversight, monitoring, making recommendations, and analysis of the program under this subchapter.
(E) Intermediate sanctions
(F) Procedures for termination
(4) Prompt payment of clean claims
(A) Prompt payment
(i) In general
Each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that payment shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted by pharmacies (other than pharmacies that dispense drugs by mail order only or are located in, or contract with, a long-term care facility) under this part within the applicable number of calendar days after the date on which the claim is received.
(ii) Clean claim defined
In this paragraph, the term "clean claim" means a claim that has no defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part.
(iii) Date of receipt of claim
In this paragraph, a claim is considered to have been received—
(I) with respect to claims submitted electronically, on the date on which the claim is transferred; and
(II) with respect to claims submitted otherwise, on the 5th day after the postmark date of the claim or the date specified in the time stamp of the transmission.
(B) Applicable number of calendar days defined
In this paragraph, the term "applicable number of calendar days" means—
(i) with respect to claims submitted electronically, 14 days; and
(ii) with respect to claims submitted otherwise, 30 days.
(C) Interest payment
(i) In general
Subject to clause (ii), if payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in subparagraph (B)) after a clean claim is received, the PDP sponsor shall pay interest to the pharmacy that submitted the claim at a rate equal to the weighted average of interest on 3-month marketable Treasury securities determined for such period, increased by 0.1 percentage point for the period beginning on the day after the required payment date and ending on the date on which payment is made (as determined under subparagraph (D)(iv)). Interest amounts paid under this subparagraph shall not be counted against the administrative costs of a prescription drug plan or treated as allowable risk corridor costs under
(ii) Authority not to charge interest
The Secretary may provide that a PDP sponsor is not charged interest under clause (i) in the case where there are exigent circumstances, including natural disasters and other unique and unexpected events, that prevent the timely processing of claims.
(D) Procedures involving claims
(i) Claim deemed to be clean
A claim is deemed to be a clean claim if the PDP sponsor involved does not provide notice to the claimant of any deficiency in the claim—
(I) with respect to claims submitted electronically, within 10 days after the date on which the claim is received; and
(II) with respect to claims submitted otherwise, within 15 days after the date on which the claim is received.
(ii) Claim determined to not be a clean claim
(I) In general
If a PDP sponsor determines that a submitted claim is not a clean claim, the PDP sponsor shall, not later than the end of the period described in clause (i), notify the claimant of such determination. Such notification shall specify all defects or improprieties in the claim and shall list all additional information or documents necessary for the proper processing and payment of the claim.
(II) Determination after submission of additional information
A claim is deemed to be a clean claim under this paragraph if the PDP sponsor involved does not provide notice to the claimant of any defect or impropriety in the claim within 10 days of the date on which additional information is received under subclause (I).
(iii) Obligation to pay
A claim submitted to a PDP sponsor that is not paid or contested by the sponsor within the applicable number of days (as defined in subparagraph (B)) after the date on which the claim is received shall be deemed to be a clean claim and shall be paid by the PDP sponsor in accordance with subparagraph (A).
(iv) Date of payment of claim
Payment of a clean claim under such subparagraph is considered to have been made on the date on which—
(I) with respect to claims paid electronically, the payment is transferred; and
(II) with respect to claims paid otherwise, the payment is submitted to the United States Postal Service or common carrier for delivery.
(E) Electronic transfer of funds
A PDP sponsor shall pay all clean claims submitted electronically by electronic transfer of funds if the pharmacy so requests or has so requested previously. In the case where such payment is made electronically, remittance may be made by the PDP sponsor electronically as well.
(F) Protecting the rights of claimants
(i) In general
Nothing in this paragraph shall be construed to prohibit or limit a claim or action not covered by the subject matter of this section that any individual or organization has against a provider or a PDP sponsor.
(ii) Anti-retaliation
Consistent with applicable Federal or State law, a PDP sponsor shall not retaliate against an individual or provider for exercising a right of action under this subparagraph.
(G) Rule of construction
A determination under this paragraph that a claim submitted by a pharmacy is a clean claim shall not be construed as a positive determination regarding eligibility for payment under this subchapter, nor is it an indication of government approval of, or acquiescence regarding, the claim submitted. The determination shall not relieve any party of civil or criminal liability with respect to the claim, nor does it offer a defense to any administrative, civil, or criminal action with respect to the claim.
(5) Submission of claims by pharmacies located in or contracting with long-term care facilities
Each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall provide that a pharmacy located in, or having a contract with, a long-term care facility shall have not less than 30 days (but not more than 90 days) to submit claims to the sponsor for reimbursement under the plan.
(6) Regular update of prescription drug pricing standard
If the PDP sponsor of a prescription drug plan uses a standard for reimbursement of pharmacies based on the cost of a drug, each contract entered into with such sponsor under this part with respect to the plan shall provide that the sponsor shall update such standard not less frequently than once every 7 days, beginning with an initial update on January 1 of each year, to accurately reflect the market price of acquiring the drug.
(7) Suspension of payments pending investigation of credible allegations of fraud by pharmacies
(A) In general
(B) Rule of construction
Nothing in this paragraph shall be construed as limiting the authority of a PDP sponsor to conduct postpayment review.
(8) Provision of information related to maximum fair prices
Each contract entered into with a PDP sponsor under this part with respect to a prescription drug plan offered by such sponsor shall require the sponsor to provide information to the Secretary as requested by the Secretary for purposes of carrying out
(c) Waiver of certain requirements to expand choice
(1) Authorizing waiver
(A) In general
In the case of an entity that seeks to offer a prescription drug plan in a State, the Secretary shall waive the requirement of subsection (a)(1) that the entity be licensed in that State if the Secretary determines, based on the application and other evidence presented to the Secretary, that any of the grounds for approval of the application described in paragraph (2) have been met.
(B) Application of regional plan waiver rule
In addition to the waiver available under subparagraph (A), the provisions of
(2) Grounds for approval
(A) In general
The grounds for approval under this paragraph are—
(i) subject to subparagraph (B), the grounds for approval described in subparagraphs (B), (C), and (D) of
(ii) the application by a State of any grounds other than those required under Federal law.
(B) Special rules
In applying subparagraph (A)(i)—
(i) the ground of approval described in
(ii) for plan years beginning before January 1, 2008, if the State does have such a licensing process in effect, such ground for approval described in such section is deemed to have been met upon submission of an application described in such section.
(3) Application of waiver procedures
With respect to an application for a waiver (or a waiver granted) under paragraph (1)(A) of this subsection, the provisions of subparagraphs (E), (F), and (G) of
(4) References to certain provisions
In applying provisions of
(A) any reference to a waiver application under
(B) any reference to solvency standards shall be treated as a reference to solvency standards established under subsection (d) of this section.
(d) Solvency standards for non-licensed entities
(1) Establishment and publication
The Secretary, in consultation with the National Association of Insurance Commissioners, shall establish and publish, by not later than January 1, 2005, financial solvency and capital adequacy standards for entities described in paragraph (2).
(2) Compliance with standards
A PDP sponsor that is not licensed by a State under subsection (a)(1) and for which a waiver application has been approved under subsection (c) shall meet solvency and capital adequacy standards established under paragraph (1). The Secretary shall establish certification procedures for such sponsors with respect to such solvency standards in the manner described in
(e) Licensure does not substitute for or constitute certification
The fact that a PDP sponsor is licensed in accordance with subsection (a)(1) or has a waiver application approved under subsection (c) does not deem the sponsor to meet other requirements imposed under this part for a sponsor.
(f) Periodic review and revision of standards
(1) In general
Subject to paragraph (2), the Secretary may periodically review the standards established under this section and, based on such review, may revise such standards if the Secretary determines such revision to be appropriate.
(2) Prohibition of midyear implementation of significant new regulatory requirements
The Secretary may not implement, other than at the beginning of a calendar year, regulations under this section that impose new, significant regulatory requirements on a PDP sponsor or a prescription drug plan.
(g) Prohibition of State imposition of premium taxes; relation to State laws
The provisions of
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–12, as added
Editorial Notes
Amendments
2022—Subsec. (b)(3)(D)(i).
Subsec. (b)(8).
2018—Subsec. (b)(7).
2008—Subsec. (b)(3)(D).
Subsec. (b)(4).
Subsec. (b)(5).
Subsec. (b)(6).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Amendment by section 2008(a) of
Effective Date of 2008 Amendment
Amendment by section 171(a) of
Amendment by section 172(a)(1) of
Amendment by section 173(a) of
1 So in original. Probably should not be capitalized.
§1395w–113. Premiums; late enrollment penalty
(a) Monthly beneficiary premium
(1) Computation
(A) In general
The monthly beneficiary premium for a prescription drug plan is the base beneficiary premium computed under paragraph (2) or (8) (as applicable) as adjusted under this paragraph.
(B) Adjustment to reflect difference between bid and national average bid
(i) Above average bid
If for a month the amount of the standardized bid amount (as defined in paragraph (5)) exceeds the amount of the adjusted national average monthly bid amount (as defined in clause (iii)), the base beneficiary premium for the month shall be increased by the amount of such excess.
(ii) Below average bid
If for a month the amount of the adjusted national average monthly bid amount for the month exceeds the standardized bid amount, the base beneficiary premium for the month shall be decreased by the amount of such excess.
(iii) Adjusted national average monthly bid amount defined
For purposes of this subparagraph, the term "adjusted national average monthly bid amount" means the national average monthly bid amount computed under paragraph (4), as adjusted under
(C) Increase for supplemental prescription drug benefits
The base beneficiary premium shall be increased by the portion of the PDP approved bid that is attributable to supplemental prescription drug benefits.
(D) Increase for late enrollment penalty
The base beneficiary premium shall be increased by the amount of any late enrollment penalty under subsection (b).
(E) Decrease for low-income assistance
The monthly beneficiary premium is subject to decrease in the case of a subsidy eligible individual under
(F) Increase based on income
The monthly beneficiary premium shall be increased pursuant to paragraph (7).
(G) Uniform premium
Except as provided in subparagraphs (D), (E), and (F), the monthly beneficiary premium for a prescription drug plan in a PDP region is the same for all part D eligible individuals enrolled in the plan.
(2) Base beneficiary premium
Subject to paragraph (8), the base beneficiary premium under this paragraph for a prescription drug plan for a month is equal to the product 1 —
(A) the beneficiary premium percentage (as specified in paragraph (3)); and
(B) the national average monthly bid amount (computed under paragraph (4)) for the month.
(3) Beneficiary premium percentage
For purposes of this subsection, the beneficiary premium percentage for any year is the percentage equal to a fraction—
(A) the numerator of which is 25.5 percent (or, for 2030 and each subsequent year, the percent specified under paragraph (9)); and
(B) the denominator of which is 100 percent minus a percentage equal to—
(i) the total reinsurance payments which the Secretary estimates are payable under
(ii) the sum of—
(I) the amount estimated under clause (i) for the year; and
(II) the total payments which the Secretary estimates will be paid to prescription drug plans and MA–PD plans that are attributable to the standardized bid amount during the year, taking into account amounts paid by the Secretary and enrollees.
(4) Computation of national average monthly bid amount
(A) In general
For each year (beginning with 2006) the Secretary shall compute a national average monthly bid amount equal to the average of the standardized bid amounts (as defined in paragraph (5)) for each prescription drug plan and for each MA–PD plan described in
(B) Weighted average
(i) In general
The monthly national average monthly bid amount computed under subparagraph (A) for a year shall be a weighted average, with the weight for each plan being equal to the average number of part D eligible individuals enrolled in such plan in the reference month (as defined in
(ii) Special rule for 2006
For purposes of applying this paragraph for 2006, the Secretary shall establish procedures for determining the weighted average under clause (i) for 2005.
(5) Standardized bid amount defined
For purposes of this subsection, the term "standardized bid amount" means the following:
(A) Prescription drug plans
(i) Basic coverage
In the case of a prescription drug plan that provides basic prescription drug coverage, the PDP approved bid (as defined in paragraph (6)).
(ii) Supplemental coverage
In the case of a prescription drug plan that provides supplemental prescription drug coverage, the portion of the PDP approved bid that is attributable to basic prescription drug coverage.
(B) MA–PD plans
In the case of an MA–PD plan, the portion of the accepted bid amount that is attributable to basic prescription drug coverage.
(6) PDP approved bid defined
For purposes of this part, the term "PDP approved bid" means, with respect to a prescription drug plan, the bid amount approved for the plan under this part.
(7) Increase in base beneficiary premium based on income
(A) In general
In the case of an individual whose modified adjusted gross income exceeds the threshold amount applicable under paragraph (2) of
(B) Monthly adjustment amount
The monthly adjustment amount specified in this subparagraph for an individual for a month in a year is equal to the product of—
(i) the quotient obtained by dividing—
(I) the applicable percentage determined under paragraph (3)(C) of
(II) 25.5 percent (or, for 2030 and each subsequent year, the percent specified under paragraph (9)); and
(ii) the base beneficiary premium (as computed under paragraph (2) or (8) (as applicable)).
(C) Modified adjusted gross income
For purposes of this paragraph, the term "modified adjusted gross income" has the meaning given such term in subparagraph (A) of
(D) Determination by Commissioner of Social Security
The Commissioner of Social Security shall make any determination necessary to carry out the income-related increase in the base beneficiary premium under this paragraph.
(E) Procedures to assure correct income-related increase in base beneficiary premium
(i) Disclosure of base beneficiary premium
Not later than September 15 of each year beginning with 2010, the Secretary shall disclose to the Commissioner of Social Security the amount of the base beneficiary premium (as computed under paragraph (2) or (8) (as applicable)) for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year.
(ii) Additional disclosure
Not later than October 15 of each year beginning with 2010, the Secretary shall disclose to the Commissioner of Social Security the following information for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year:
(I) The modified adjusted gross income threshold applicable under paragraph (2) of
(II) The applicable percentage determined under paragraph (3)(C) of
(III) The monthly adjustment amount specified in subparagraph (B).
(IV) Any other information the Commissioner of Social Security determines necessary to carry out the income-related increase in the base beneficiary premium under this paragraph.
(F) Rule of construction
The formula used to determine the monthly adjustment amount specified under subparagraph (B) shall only be used for the purpose of determining such monthly adjustment amount under such subparagraph.
(8) Premium stabilization
(A) In general
The base beneficiary premium under this paragraph for a prescription drug plan for a month in 2024 through 2029 shall be computed as follows:
(i) 2024
The base beneficiary premium for a month in 2024 shall be equal to the lesser of—
(I) the base beneficiary premium computed under paragraph (2) for a month in 2023 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2024 that would have applied if this paragraph had not been enacted.
(ii) 2025
The base beneficiary premium for a month in 2025 shall be equal to the lesser of—
(I) the base beneficiary premium computed under clause (i) for a month in 2024 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2025 that would have applied if this paragraph had not been enacted.
(iii) 2026
The base beneficiary premium for a month in 2026 shall be equal to the lesser of—
(I) the base beneficiary premium computed under clause (ii) for a month in 2025 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2026 that would have applied if this paragraph had not been enacted.
(iv) 2027
The base beneficiary premium for a month in 2027 shall be equal to the lesser of—
(I) the base beneficiary premium computed under clause (iii) for a month in 2026 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2027 that would have applied if this paragraph had not been enacted.
(v) 2028
The base beneficiary premium for a month in 2028 shall be equal to the lesser of—
(I) the base beneficiary premium computed under clause (iv) for a month in 2027 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2028 that would have applied if this paragraph had not been enacted.
(vi) 2029
The base beneficiary premium for a month in 2029 shall be equal to the lesser of—
(I) the base beneficiary premium computed under clause (v) for a month in 2028 increased by 6 percent; or
(II) the base beneficiary premium computed under paragraph (2) for a month in 2029 that would have applied if this paragraph had not been enacted.
(B) Clarification regarding 2030 and subsequent years
The base beneficiary premium for a month in 2030 or a subsequent year shall be computed under paragraph (2) without regard to this paragraph.
(9) Percent specified
(A) In general
Subject to subparagraph (B), for purposes of paragraph (3)(A), the percent specified under this paragraph for 2030 and each subsequent year is the percent that the Secretary determines is necessary to ensure that the base beneficiary premium computed under paragraph (2) for a month in 2030 is equal to the lesser of—
(i) the base beneficiary premium computed under paragraph (8)(A)(vi) for a month in 2029 increased by 6 percent; or
(ii) the base beneficiary premium computed under paragraph (2) for a month in 2030 that would have applied if this paragraph had not been enacted.
(B) Floor
The percent specified under subparagraph (A) may not be less than 20 percent.
(b) Late enrollment penalty
(1) In general
Subject to the succeeding provisions of this subsection, in the case of a part D eligible individual described in paragraph (2) with respect to a continuous period of eligibility, there shall be an increase in the monthly beneficiary premium established under subsection (a) in an amount determined under paragraph (3).
(2) Individuals subject to penalty
A part D eligible individual described in this paragraph is, with respect to a continuous period of eligibility, an individual for whom there is a continuous period of 63 days or longer (all of which in such continuous period of eligibility) beginning on the day after the last date of the individual's initial enrollment period under
(3) Amount of penalty
(A) In general
The amount determined under this paragraph for a part D eligible individual for a continuous period of eligibility is the greater of—
(i) an amount that the Secretary determines is actuarially sound for each uncovered month (as defined in subparagraph (B)) in the same continuous period of eligibility; or
(ii) 1 percent of the base beneficiary premium (computed under paragraph (2) or (8) of subsection (a) (as applicable)) for each such uncovered month in such period.
(B) Uncovered month defined
For purposes of this subsection, the term "uncovered month" means, with respect to a part D eligible individual, any month beginning after the end of the initial enrollment period under
(4) Creditable prescription drug coverage defined
For purposes of this part, the term "creditable prescription drug coverage" means any of the following coverage, but only if the coverage meets the requirement of paragraph (5):
(A) Coverage under prescription drug plan or MA–PD plan
Coverage under a prescription drug plan or under an MA–PD plan.
(B) Medicaid
Coverage under a medicaid plan under subchapter XIX or under a waiver under
(C) Group health plan
Coverage under a group health plan, including a health benefits plan under
(D) State pharmaceutical assistance program
Coverage under a State pharmaceutical assistance program described in
(E) Veterans' coverage of prescription drugs
Coverage for veterans, and survivors and dependents of veterans, under
(F) Prescription drug coverage under medigap policies
Coverage under a medicare supplemental policy under
(G) Military coverage (including TRICARE)
Coverage under
(H) Other coverage
Such other coverage as the Secretary determines appropriate.
(5) Actuarial equivalence requirement
Coverage meets the requirement of this paragraph only if the coverage is determined (in a manner specified by the Secretary) to provide coverage of the cost of prescription drugs the actuarial value of which (as defined by the Secretary) to the individual equals or exceeds the actuarial value of standard prescription drug coverage (as determined under
(6) Procedures to document creditable prescription drug coverage
(A) In general
The Secretary shall establish procedures (including the form, manner, and time) for the documentation of creditable prescription drug coverage, including procedures to assist in determining whether coverage meets the requirement of paragraph (5).
(B) Disclosure by entities offering creditable prescription drug coverage
(i) In general
Each entity that offers prescription drug coverage of the type described in subparagraphs (B) through (H) of paragraph (4) shall provide for disclosure, in a form, manner, and time consistent with standards established by the Secretary, to the Secretary and part D eligible individuals of whether the coverage meets the requirement of paragraph (5) or whether such coverage is changed so it no longer meets such requirement.
(ii) Disclosure of non-creditable coverage
In the case of such coverage that does not meet such requirement, the disclosure to part D eligible individuals under this subparagraph shall include information regarding the fact that because such coverage does not meet such requirement there are limitations on the periods in a year in which the individuals may enroll under a prescription drug plan or an MA–PD plan and that any such enrollment is subject to a late enrollment penalty under this subsection.
(C) Waiver of requirement
In the case of a part D eligible individual who was enrolled in prescription drug coverage of the type described in subparagraphs (B) through (H) of paragraph (4) which is not creditable prescription drug coverage because it does not meet the requirement of paragraph (5), the individual may apply to the Secretary to have such coverage treated as creditable prescription drug coverage if the individual establishes that the individual was not adequately informed that such coverage did not meet such requirement.
(7) Continuous period of eligibility
(A) In general
Subject to subparagraph (B), for purposes of this subsection, the term "continuous period of eligibility" means, with respect to a part D eligible individual, the period that begins with the first day on which the individual is eligible to enroll in a prescription drug plan under this part and ends with the individual's death.
(B) Separate period
Any period during all of which a part D eligible individual is entitled to hospital insurance benefits under part A and—
(i) which terminated in or before the month preceding the month in which the individual attained age 65; or
(ii) for which the basis for eligibility for such entitlement changed between
shall be a separate continuous period of eligibility with respect to the individual (and each such period which terminates shall be deemed not to have existed for purposes of subsequently applying this paragraph).
(8) Waiver of penalty for subsidy-eligible individuals
In no case shall a part D eligible individual who is determined to be a subsidy eligible individual (as defined in
(c) Collection of monthly beneficiary premiums
(1) In general
Subject to paragraphs (2), (3), and (4), the provisions of
(2) Crediting of late enrollment penalty
(A) Portion attributable to increased actuarial costs
With respect to late enrollment penalties imposed under subsection (b), the Secretary shall specify the portion of such a penalty that the Secretary estimates is attributable to increased actuarial costs assumed by the PDP sponsor or MA organization (and not taken into account through risk adjustment provided under
(B) Collection through withholding
In the case of a late enrollment penalty that is collected from a part D eligible individual in the manner described in
(C) Collection by plan
In the case of a late enrollment penalty that is collected from a part D eligible individual in a manner other than the manner described in
(3) Fallback plans
In applying this subsection in the case of a fallback prescription drug plan, paragraph (2) shall not apply and the monthly beneficiary premium shall be collected in the manner specified in
(4) Collection of monthly adjustment amount
(A) In general
Notwithstanding any provision of this subsection or
(B) Agreements
In the case where the monthly benefit payments of an individual that are withheld under subparagraph (A) are insufficient to pay the amount described in such subparagraph, the Commissioner of Social Security shall enter into agreements with the Secretary, the Director of the Office of Personnel Management, and the Railroad Retirement Board as necessary in order to allow other agencies to collect the amount described in subparagraph (A) that was not withheld under such subparagraph.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–13, as added
Editorial Notes
Amendments
2022—Subsec. (a)(1)(A).
Subsec. (a)(2).
Subsec. (a)(3)(A).
Subsec. (a)(7)(B)(i).
Subsec. (a)(7)(B)(ii).
Subsec. (a)(7)(E)(i).
Subsec. (a)(8).
Subsec. (a)(9).
Subsec. (b)(3)(A)(ii).
2010—Subsec. (a)(1)(F), (G).
Subsec. (a)(7).
Subsec. (c)(1).
Subsec. (c)(4).
2008—Subsec. (b)(8).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment
1 So in original. The word "of" probably should appear after "product".
2 So in original. Probably should be "section 426(b)".
§1395w–114. Premium and cost-sharing subsidies for low-income individuals
(a) Income-related subsidies for certain individuals
(1) Individuals with certain low incomes
In the case of a subsidy eligible individual (as defined in paragraph (3)) who is determined to have income that is below 135 percent (or, with respect to a plan year beginning on or after January 1, 2024, 150 percent) of the poverty line applicable to a family of the size involved and who meets the resources requirement described in paragraph (3)(D) (or, with respect to a plan year beginning on or after January 1, 2024, paragraph (3)(E)) or who is covered under this paragraph under paragraph (3)(B)(i), the individual is entitled under this section to the following:
(A) Full premium subsidy
An income-related premium subsidy equal to 100 percent of the amount described in subsection (b)(1), but not to exceed the premium amount specified in subsection (b)(2)(B).
(B) Elimination of deductible
A reduction in the annual deductible applicable under
(C) Continuation of coverage above the initial coverage limit
For a year preceding 2025, the continuation of coverage from the initial coverage limit (under paragraph (3) of
(D) Reduction in cost-sharing below out-of-pocket threshold
(i) Institutionalized individuals
In the case of an individual who is a full-benefit dual eligible individual and who is an institutionalized individual or couple (as defined in
(ii) Lowest income dual eligible individuals
Subject to paragraph (6), in the case of an individual not described in clause (i) who is a full-benefit dual eligible individual and whose income does not exceed 100 percent of the poverty line applicable to a family of the size involved, the substitution for the beneficiary coinsurance described in
(iii) Other individuals
Subject to paragraph (6), in the case of an individual not described in clause (i) or (ii), the substitution for the beneficiary coinsurance described in
(E) Elimination of cost-sharing above annual out-of-pocket threshold
For a year preceding 2024, the elimination of any cost-sharing imposed under
(2) Other low-income individuals
With respect to a plan year beginning before January 1, 2024, in the case of a subsidy eligible individual who is not described in paragraph (1), the individual is entitled under this section to the following:
(A) Sliding scale premium subsidy
An income-related premium subsidy determined on a linear sliding scale ranging from 100 percent of the amount described in paragraph (1)(A) for individuals with incomes at or below 135 percent of such level to 0 percent of such amount for individuals with incomes at 150 percent of such level.
(B) Reduction of deductible
Subject to paragraphs (8) and (9) of
(C) Continuation of coverage above the initial coverage limit
The continuation of coverage from the initial coverage limit (under paragraph (3) of
(D) Reduction in cost-sharing below out-of-pocket threshold
Subject to paragraph (6), the substitution for the beneficiary coinsurance described in
(E) Reduction of cost-sharing above annual out-of-pocket threshold
Subject to paragraph (6) of this subsection and subsection (c), the substitution for the cost-sharing imposed under
(3) Determination of eligibility
(A) Subsidy eligible individual defined
For purposes of this part, subject to subparagraph (F), the term "subsidy eligible individual" means a part D eligible individual who—
(i) is enrolled in a prescription drug plan or MA–PD plan;
(ii) has income below 150 percent of the poverty line applicable to a family of the size involved; and
(iii) meets the resources requirement described in subparagraph (D) or (E).
(B) Determinations
(i) In general
The determination of whether a part D eligible individual residing in a State is a subsidy eligible individual and whether the individual is described in paragraph (1) shall be determined under the State plan under subchapter XIX for the State under
(ii) Effective period
Determinations under this subparagraph shall be effective beginning with the month in which the individual applies for a determination that the individual is a subsidy eligible individual and shall remain in effect for a period specified by the Secretary, but not to exceed 1 year.
(iii) Redeterminations and appeals through medicaid
Redeterminations and appeals, with respect to eligibility determinations under clause (i) made under a State plan under subchapter XIX, shall be made in accordance with the frequency of, and manner in which, redeterminations and appeals of eligibility are made under such plan for purposes of medical assistance under such subchapter.
(iv) Redeterminations and appeals through Commissioner
With respect to eligibility determinations under clause (i) made by the Commissioner of Social Security—
(I) redeterminations shall be made at such time or times as may be provided by the Commissioner;
(II) the Commissioner shall establish procedures for appeals of such determinations that are similar to the procedures described in the third sentence of
(III) judicial review of the final decision of the Commissioner made after a hearing shall be available to the same extent, and with the same limitations, as provided in subsections (g) and (h) of
(v) Treatment of medicaid beneficiaries
Subject to subparagraph (F), the Secretary—
(I) shall provide that part D eligible individuals who are full-benefit dual eligible individuals (as defined in
(II) may provide that part D eligible individuals not described in subclause (I) who are determined for purposes of the State plan under subchapter XIX to be eligible for medical assistance under clause (i), (iii), or (iv) of
Insofar as the Secretary determines that the eligibility requirements under the State plan for medical assistance referred to in subclause (II) are substantially the same as the requirements for being treated as a subsidy eligible individual described in paragraph (1), the Secretary shall provide for the treatment described in such subclause.
(vi) Special rule for widows and widowers
Notwithstanding the preceding provisions of this subparagraph, in the case of an individual whose spouse dies during the effective period for a determination or redetermination that has been made under this subparagraph, such effective period shall be extended through the date that is 1 year after the date on which the determination or redetermination would (but for the application of this clause) otherwise cease to be effective.
(C) Income determinations
For purposes of applying this section—
(i) in the case of a part D eligible individual who is not treated as a subsidy eligible individual under subparagraph (B)(v), income shall be determined in the manner described in
(ii) the term "poverty line" has the meaning given such term in
Nothing in clause (i) shall be construed to affect the application of
(D) Resource standard applied to full low-income subsidy to be based on three times SSI resource standard
The resources requirement of this subparagraph is that an individual's resources (as determined under
(i) for 2006 three times the maximum amount of resources that an individual may have and obtain benefits under that program; and
(ii) for a subsequent year the resource limitation established under this clause for the previous year increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such previous year.
Any resource limitation established under clause (ii) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(E) Alternative resource standard
(i) In general
The resources requirement of this subparagraph is that an individual's resources (as determined under
(I) for 2006, $10,000 (or $20,000 in the case of the combined value of the individual's assets or resources and the assets or resources of the individual's spouse); and
(II) for a subsequent year the dollar amounts specified in this subclause (or subclause (I)) for the previous year increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such previous year.
Any dollar amount established under subclause (II) that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(ii) Use of simplified application form and process
The Secretary, jointly with the Commissioner of Social Security, shall—
(I) develop a model, simplified application form and process consistent with clause (iii) for the determination and verification of a part D eligible individual's assets or resources under this subparagraph; and
(II) provide such form to States.
(iii) Documentation and safeguards
Under such process—
(I) the application form shall consist of an attestation under penalty of perjury regarding the level of assets or resources (or combined assets and resources in the case of a married part D eligible individual) and valuations of general classes of assets or resources;
(II) such form shall be accompanied by copies of recent statements (if any) from financial institutions in support of the application; and
(III) matters attested to in the application shall be subject to appropriate methods of verification.
(iv) Methodology flexibility
The Secretary may permit a State in making eligibility determinations for premium and cost-sharing subsidies under this section to use the same asset or resource methodologies that are used with respect to eligibility for medical assistance for medicare cost-sharing described in
(F) Treatment of territorial residents
In the case of a part D eligible individual who is not a resident of the 50 States or the District of Columbia, the individual is not eligible to be a subsidy eligible individual under this section but may be eligible for financial assistance with prescription drug expenses under
(G) Life insurance policy exclusion
In determining the resources of an individual (and the eligible spouse of the individual, if any) under
(4) Indexing dollar amounts
(A) Copayment for lowest income dual eligible individuals
The dollar amounts applied under paragraph (1)(D)(ii)—
(i) for 2007 shall be the dollar amounts specified in such paragraph increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such previous year; or
(ii) for a subsequent year shall be the dollar amounts specified in this clause (or clause (i)) for the previous year increased by the annual percentage increase in the consumer price index (all items; U.S. city average) as of September of such previous year.
Any amount established under clause (i) or (ii), that is based on an increase of $1 or $3, that is not a multiple of 5 cents or 10 cents, respectively, shall be rounded to the nearest multiple of 5 cents or 10 cents, respectively.
(B) Reduced deductible
The dollar amount applied under paragraph (2)(B)—
(i) for 2007 shall be the dollar amount specified in such paragraph increased by the annual percentage increase described in
(ii) for a subsequent year shall be the dollar amount specified in this clause (or clause (i)) for the previous year increased by the annual percentage increase described in
Any amount established under clause (i) or (ii) that is not a multiple of $1 shall be rounded to the nearest multiple of $1.
(5) Waiver of de minimis premiums
The Secretary shall, under procedures established by the Secretary, permit a prescription drug plan or an MA–PD plan to waive the monthly beneficiary premium for a subsidy eligible individual if the amount of such premium is de minimis. If such premium is waived under the plan, the Secretary shall not reassign subsidy eligible individuals enrolled in the plan to other plans based on the fact that the monthly beneficiary premium under the plan was greater than the low-income benchmark premium amount.
(6) No application of cost-sharing or deductible for adult vaccines recommended by the Advisory Committee on Immunization Practices
For plan years beginning on or after January 1, 2023, with respect to an adult vaccine recommended by the Advisory Committee on Immunization Practices (as defined in
(A) the deductible under
(B) there shall be no cost-sharing under this section with respect to such vaccine.
(b) Premium subsidy amount
(1) In general
The premium subsidy amount described in this subsection for a subsidy eligible individual residing in a PDP region and enrolled in a prescription drug plan or MA–PD plan is the low-income benchmark premium amount (as defined in paragraph (2)) for the PDP region in which the individual resides or, if greater, the amount specified in paragraph (3).
(2) Low-income benchmark premium amount defined
(A) In general
For purposes of this subsection, the term "low-income benchmark premium amount" means, with respect to a PDP region in which—
(i) all prescription drug plans are offered by the same PDP sponsor, the weighted average of the amounts described in subparagraph (B)(i) for such plans; or
(ii) there are prescription drug plans offered by more than one PDP sponsor, the weighted average of amounts described in subparagraph (B) for prescription drug plans and MA–PD plans described in
(B) Premium amounts described
The premium amounts described in this subparagraph are, in the case of—
(i) a prescription drug plan that is a basic prescription drug plan, the monthly beneficiary premium for such plan;
(ii) a prescription drug plan that provides alternative prescription drug coverage the actuarial value of which is greater than that of standard prescription drug coverage, the portion of the monthly beneficiary premium that is attributable to basic prescription drug coverage; and
(iii) an MA–PD plan, the portion of the MA monthly prescription drug beneficiary premium that is attributable to basic prescription drug benefits (described in section 1395w–22(a)(6)(B)(ii) 1 of this title) and determined before the application of the monthly rebate computed under
The premium amounts described in this subparagraph do not include any amounts attributable to late enrollment penalties under
(3) Access to 0 premium plan
In no case shall the premium subsidy amount under this subsection for a PDP region be less than the lowest monthly beneficiary premium for a prescription drug plan that offers basic prescription drug coverage in the region.
(c) Administration of subsidy program
(1) In general
The Secretary shall provide a process whereby, in the case of a part D eligible individual who is determined to be a subsidy eligible individual and who is enrolled in a prescription drug plan or is enrolled in an MA–PD plan—
(A) the Secretary provides for a notification of the PDP sponsor or the MA organization offering the plan involved that the individual is eligible for a subsidy and the amount of the subsidy under subsection (a);
(B) the sponsor or organization involved reduces the premiums or cost-sharing otherwise imposed by the amount of the applicable subsidy and submits to the Secretary information on the amount of such reduction;
(C) the Secretary periodically and on a timely basis reimburses the sponsor or organization for the amount of such reductions; and
(D) the Secretary ensures the confidentiality of individually identifiable information.
In applying subparagraph (C), the Secretary shall compute reductions based upon imposition under subsections (a)(1)(D) and (a)(2)(E) of unreduced copayment amounts applied under such subsections.
(2) Use of capitated form of payment
The reimbursement under this section with respect to cost-sharing subsidies may be computed on a capitated basis, taking into account the actuarial value of the subsidies and with appropriate adjustments to reflect differences in the risks actually involved.
(d) Facilitation of reassignments
Beginning not later than January 1, 2011, the Secretary shall, in the case of a subsidy eligible individual who is enrolled in one prescription drug plan and is subsequently reassigned by the Secretary to a new prescription drug plan, provide the individual, within 30 days of such reassignment, with—
(1) information on formulary differences between the individual's former plan and the plan to which the individual is reassigned with respect to the individual's drug regimens; and
(2) a description of the individual's right to request a coverage determination, exception, or reconsideration under
(e) Limited income newly eligible transition program
(1) In general
Beginning not later than January 1, 2024, the Secretary shall carry out a program to provide transitional coverage for covered part D drugs for LI NET eligible individuals in accordance with this subsection.
(2) LI NET eligible individual defined
For purposes of this subsection, the term "LI NET eligible individual" means a part D eligible individual who—
(A) meets the requirements of clauses (ii) and (iii) of subsection (a)(3)(A); and
(B) has not yet enrolled in a prescription drug plan or an MA–PD plan, or, who has so enrolled, but with respect to whom coverage under such plan has not yet taken effect.
(3) Transitional coverage
For purposes of this subsection, the term "transitional coverage" means with respect to an LI NET eligible individual—
(A) immediate access to covered part D drugs at the point of sale during the period that begins on the first day of the month such individual is determined to meet the requirements of clauses (ii) and (iii) of subsection (a)(3)(A) and ends on the date that coverage under a prescription drug plan or MA–PD plan takes effect with respect to such individual; and
(B) in the case of an LI NET eligible individual who is a full-benefit dual eligible individual (as defined in
(i) the date that such individual was first eligible for a low-income subsidy under this part; or
(ii) the date that is 36 months prior to the date such individual enrolls in a prescription drug plan or MA–PD plan,
and ends on the date that coverage under such plan takes effect.
(4) Program administration
(A) Point of contact
The Secretary shall, as determined appropriate by the Secretary, administer the program under this subsection through a contract with a single program administrator.
(B) Benefit design
The Secretary shall ensure that the transitional coverage provided to LI NET eligible individuals under this subsection—
(i) provides access to all covered part D drugs under an open formulary;
(ii) permits all pharmacies determined by the Secretary to be in good standing to process claims under the program;
(iii) is consistent with such requirements as the Secretary considers necessary to improve patient safety and ensure appropriate dispensing of medication; and
(iv) meets such other requirements as the Secretary may establish.
(5) Relationship to other provisions of this subchapter; waiver authority
(A) In general
The following provisions shall not apply with respect to the program under this subsection:
(i) Paragraphs (1) and (3)(B) of
(ii) Subparagraphs (A) and (B) of
(iii) Paragraphs (1)(C) and (2) of
(B) Waiver authority
The Secretary may waive such other requirements of subchapter XI and this subchapter as may be necessary to carry out the purposes of the program established under this subsection.
(6) Contracting authority
The authority vested in the Secretary by this subsection may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this subchapter.
(f) Relation to medicaid program
For special provisions under the medicaid program relating to medicare prescription drug benefits, see
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–14, as added
Editorial Notes
Amendments
2022—Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(1)(C).
Subsec. (a)(1)(D)(ii).
Subsec. (a)(1)(D)(iii).
Subsec. (a)(1)(E).
Subsec. (a)(2).
Subsec. (a)(2)(B).
Subsec. (a)(2)(D).
Subsec. (a)(2)(E).
Subsec. (a)(6).
2020—Subsecs. (e), (f).
2010—Subsec. (a)(1)(D)(i).
Subsec. (a)(3)(B)(vi).
Subsec. (a)(5).
Subsec. (b)(2)(B)(iii).
Subsecs. (d), (e).
2008—Subsec. (a)(1)(A).
"(i) 100 percent of the amount described in subsection (b)(1) of this section, but not to exceed the premium amount specified in subsection (b)(2)(B) of this section; plus
"(ii) 80 percent of any late enrollment penalties imposed under
Subsec. (a)(3)(B)(iv)(III).
Subsec. (a)(3)(C)(i).
Subsec. (a)(3)(D), (E)(i).
Subsec. (a)(3)(G).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 3303(a) of
Effective Date of 2008 Amendment
Amendment by section 114(a)(2) of
Construction of 2022 Amendment
Nothing in amendment by section 11401(b) of
GAO Study Regarding Impact of Assets Test for Subsidy Eligible Individuals
"(1)
"(2)
1 So in original.
§1395w–114a. Medicare coverage gap discount program
(a) Establishment
Subject to subsection (h), the Secretary shall establish a Medicare coverage gap discount program (in this section referred to as the "program") by not later than January 1, 2011. Under the program, the Secretary shall enter into agreements described in subsection (b) with manufacturers and provide for the performance of the duties described in subsection (c)(1). The Secretary shall establish a model agreement for use under the program by not later than 180 days after March 23, 2010, in consultation with manufacturers, and allow for comment on such model agreement.
(b) Terms of agreement
(1) In general
(A) Agreement
An agreement under this section shall require the manufacturer to provide applicable beneficiaries access to discounted prices for applicable drugs of the manufacturer.
(B) Provision of discounted prices at the point-of-sale
Except as provided in subsection (c)(1)(A)(iii), such discounted prices shall be provided to the applicable beneficiary at the pharmacy or by the mail order service at the point-of-sale of an applicable drug.
(C) Timing of agreement
(i) Special rule for 2011
In order for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on January 1, 2011, and ending on December 31, 2011, the manufacturer shall enter into such agreement not later than not later than 1 30 days after the date of the establishment of a model agreement under subsection (a).
(ii) 2012 and subsequent years
In order for an agreement with a manufacturer to be in effect under this section with respect to plan year 2012 or a subsequent plan year, the manufacturer shall enter into such agreement (or such agreement shall be renewed under paragraph (4)(A)) not later than January 30 of the preceding year.
(2) Provision of appropriate data
Each manufacturer with an agreement in effect under this section shall collect and have available appropriate data, as determined by the Secretary, to ensure that it can demonstrate to the Secretary compliance with the requirements under the program.
(3) Compliance with requirements for administration of program
Each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the Secretary or a third party with a contract under subsection (d)(3), as applicable, for purposes of administering the program, including any determination under clause (i) of subsection (c)(1)(A) or procedures established under such subsection (c)(1)(A).
(4) Length of agreement
(A) In general
An agreement under this section shall be effective for an initial period of not less than 18 months and shall be automatically renewed for a period of not less than 1 year unless terminated under subparagraph (B).
(B) Termination
(i) By the Secretary
The Secretary may provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown. Such termination shall not be effective earlier than 30 days after the date of notice to the manufacturer of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the Secretary determines appropriate.
(ii) By a manufacturer
A manufacturer may terminate an agreement under this section for any reason. Any such termination shall be effective, with respect to a plan year—
(I) if the termination occurs before January 30 of a plan year, as of the day after the end of the plan year; and
(II) if the termination occurs on or after January 30 of a plan year, as of the day after the end of the succeeding plan year.
(iii) Effectiveness of termination
Any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination.
(iv) Notice to third party
The Secretary shall provide notice of such termination to a third party with a contract under subsection (d)(3) within not less than 30 days before the effective date of such termination.
(c) Duties described and special rule for supplemental benefits
(1) Duties described
The duties described in this subsection are the following:
(A) Administration of program
Administering the program, including—
(i) the determination of the amount of the discounted price of an applicable drug of a manufacturer;
(ii) except as provided in clause (iii), the establishment of procedures under which discounted prices are provided to applicable beneficiaries at pharmacies or by mail order service at the point-of-sale of an applicable drug;
(iii) in the case where, during the period beginning on January 1, 2011, and ending on December 31, 2011, it is not practicable to provide such discounted prices at the point-of-sale (as described in clause (ii)), the establishment of procedures to provide such discounted prices as soon as practicable after the point-of-sale;
(iv) the establishment of procedures to ensure that, not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service, the pharmacy or mail order service is reimbursed for an amount equal to the difference between—
(I) the negotiated price of the applicable drug; and
(II) the discounted price of the applicable drug;
(v) the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as the Secretary may specify;
(vi) the establishment of procedures to implement the special rule for supplemental benefits under paragraph (2); and
(vii) providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers, applicable beneficiaries, and the third party with a contract under subsection (d)(3).
(B) Monitoring compliance
(i) In general
The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section.
(ii) Notification
If a third party with a contract under subsection (d)(3) determines that the manufacturer is not in compliance with such agreement, the third party shall notify the Secretary of such noncompliance for appropriate enforcement under subsection (e).
(C) Collection of data from prescription drug plans and MA–PD plans
The Secretary may collect appropriate data from prescription drug plans and MA–PD plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section.
(2) Special rule for supplemental benefits
For plan year 2011 and each subsequent plan year, in the case where an applicable beneficiary has supplemental benefits with respect to applicable drugs under the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in, the applicable beneficiary shall not be provided a discounted price for an applicable drug under this section until after such supplemental benefits have been applied with respect to the applicable drug.
(d) Administration
(1) In general
Subject to paragraph (2), the Secretary shall provide for the implementation of this section, including the performance of the duties described in subsection (c)(1).
(2) Limitation
(A) In general
Subject to subparagraph (B), in providing for such implementation, the Secretary shall not receive or distribute any funds of a manufacturer under the program.
(B) Exception
The limitation under subparagraph (A) shall not apply to the Secretary with respect to drugs dispensed during the period beginning on January 1, 2011, and ending on December 31, 2011, but only if the Secretary determines that the exception to such limitation under this subparagraph is necessary in order for the Secretary to begin implementation of this section and provide applicable beneficiaries timely access to discounted prices during such period.
(3) Contract with third parties
The Secretary shall enter into a contract with 1 or more third parties to administer the requirements established by the Secretary in order to carry out this section. At a minimum, the contract with a third party under the preceding sentence shall require that the third party—
(A) receive and transmit information between the Secretary, manufacturers, and other individuals or entities the Secretary determines appropriate;
(B) receive, distribute, or facilitate the distribution of funds of manufacturers to appropriate individuals or entities in order to meet the obligations of manufacturers under agreements under this section;
(C) provide adequate and timely information to manufacturers, consistent with the agreement with the manufacturer under this section, as necessary for the manufacturer to fulfill its obligations under this section; and
(D) permit manufacturers to conduct periodic audits, directly or through contracts, of the data and information used by the third party to determine discounts for applicable drugs of the manufacturer under the program.
(4) Performance requirements
The Secretary shall establish performance requirements for a third party with a contract under paragraph (3) and safeguards to protect the independence and integrity of the activities carried out by the third party under the program under this section.
(5) Implementation
The Secretary may implement the program under this section by program instruction or otherwise.
(6) Administration
(e) Enforcement
(1) Audits
Each manufacturer with an agreement in effect under this section shall be subject to periodic audit by the Secretary.
(2) Civil money penalty
(A) In general
The Secretary shall impose a civil money penalty on a manufacturer that fails to provide applicable beneficiaries discounts for applicable drugs of the manufacturer in accordance with such agreement for each such failure in an amount the Secretary determines is commensurate with the sum of—
(i) the amount that the manufacturer would have paid with respect to such discounts under the agreement, which will then be used to pay the discounts which the manufacturer had failed to provide; and
(ii) 25 percent of such amount.
(B) Application
The provisions of
(f) Clarification regarding availability of other covered part D drugs
Nothing in this section shall prevent an applicable beneficiary from purchasing a covered part D drug that is not an applicable drug (including a generic drug or a drug that is not on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in).
(g) Definitions
In this section:
(1) Applicable beneficiary
The term "applicable beneficiary" means an individual who, on the date of dispensing a covered part D drug—
(A) is enrolled in a prescription drug plan or an MA–PD plan;
(B) is not enrolled in a qualified retiree prescription drug plan;
(C) is not entitled to an income-related subsidy under
(D) who—
(i) has reached or exceeded the initial coverage limit under
(ii) has not incurred costs for covered part D drugs in the year equal to the annual out-of-pocket threshold specified in
(2) Applicable drug
The term "applicable drug" means, with respect to an applicable beneficiary, a covered part D drug—
(A) approved under a new drug application under
(B)(i) if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan uses a formulary, which is on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in;
(ii) if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan does not use a formulary, for which benefits are available under the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in; or
(iii) is provided through an exception or appeal.
(3) Applicable number of calendar days
The term "applicable number of calendar days" means—
(A) with respect to claims for reimbursement submitted electronically, 14 days; and
(B) with respect to claims for reimbursement submitted otherwise, 30 days.
(4) Discounted price
(A) In general
The term "discounted price" means 50 percent (or, with respect to a plan year after plan year 2018, 30 percent) of the negotiated price of the applicable drug of a manufacturer.
(B) Clarification
Nothing in this section shall be construed as affecting the responsibility of an applicable beneficiary for payment of a dispensing fee for an applicable drug.
(C) Special case for certain claims
In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the initial coverage limit under
(5) Manufacturer
The term "manufacturer" means any entity which is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law.
(6) Negotiated price
The term "negotiated price" has the meaning given such term in section 423.100 of title 42, Code of Federal Regulations (as in effect on March 23, 2010), except that such negotiated price shall not include any dispensing fee for the applicable drug.
(7) Qualified retiree prescription drug plan
The term "qualified retiree prescription drug plan" has the meaning given such term in
(h) Sunset of program
(1) In general
The program shall not apply with respect to applicable drugs dispensed on or after January 1, 2025, and, subject to paragraph (2), agreements under this section shall be terminated as of such date.
(2) Continued application for applicable drugs dispensed prior to sunset
The provisions of this section (including all responsibilities and duties) shall continue to apply on and after January 1, 2025, with respect to applicable drugs dispensed prior to such date.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–14A, as added
Editorial Notes
Amendments
2022—Subsec. (a).
Subsec. (h).
2018—Subsec. (g)(2)(A).
Subsec. (g)(4)(A).
2010—Subsec. (a).
Subsec. (b)(1)(C)(i).
Subsec. (c)(1)(A)(iii).
Subsec. (c)(2).
Subsec. (d)(2)(B).
Subsec. (g)(1).
Subsec. (g)(1)(C) to (E).
1 So in original. Second "not later than" probably should not appear.
§1395w–114b. Manufacturer rebate for certain drugs with prices increasing faster than inflation
(a) Requirements
(1) Secretarial provision of information
Not later than 9 months after the end of each applicable period (as defined in subsection (g)(7)), subject to paragraph (3), the Secretary shall, for each part D rebatable drug, report to each manufacturer of such part D rebatable drug the following for such period:
(A) The amount (if any) of the excess annual manufacturer price increase described in subsection (b)(1)(A)(ii) for each dosage form and strength with respect to such drug and period.
(B) The rebate amount specified under subsection (b) for each dosage form and strength with respect to such drug and period.
(2) Manufacturer requirements
For each applicable period, the manufacturer of a part D rebatable drug, for each dosage form and strength with respect to such drug, not later than 30 days after the date of receipt from the Secretary of the information described in paragraph (1) for such period, shall provide to the Secretary a rebate that is equal to the amount specified in subsection (b) for such dosage form and strength with respect to such drug for such period.
(3) Transition rule for reporting
The Secretary may, for each rebatable covered part D drug, delay the timeframe for reporting the information and rebate amount described in subparagraphs (A) and (B) of such paragraph for the applicable periods beginning October 1, 2022, and October 1, 2023, until not later than December 31, 2025.
(b) Rebate amount
(1) In general
(A) Calculation
For purposes of this section, the amount specified in this subsection for a dosage form and strength with respect to a part D rebatable drug and applicable period is, subject to subparagraph (C), paragraph (5)(B), and paragraph (6), the estimated amount equal to the product of—
(i) subject to subparagraph (B) of this paragraph, the total number of units of such dosage form and strength for each rebatable covered part D drug dispensed under this part during the applicable period; and
(ii) the amount (if any) by which—
(I) the annual manufacturer price (as determined in paragraph (2)) paid for such dosage form and strength with respect to such part D rebatable drug for the period; exceeds
(II) the inflation-adjusted payment amount determined under paragraph (3) for such dosage form and strength with respect to such part D rebatable drug for the period.
(B) Excluded units
For purposes of subparagraph (A)(i), beginning with plan year 2026, the Secretary shall exclude from the total number of units for a dosage form and strength with respect to a part D rebatable drug, with respect to an applicable period, units of each dosage form and strength of such part D rebatable drug for which the manufacturer provides a discount under the program under
(C) Reduction or waiver for shortages and severe supply chain disruptions
The Secretary shall reduce or waive the amount under subparagraph (A) with respect to a part D rebatable drug and an applicable period—
(i) in the case of a part D rebatable drug that is described as currently in shortage on the shortage list in effect under
(ii) in the case of a generic part D rebatable drug (described in subsection (g)(1)(C)(ii)) or a biosimilar (defined as a biological product licensed under
(iii) in the case of a generic Part 1 D rebatable drug (as so described), if the Secretary determines that without such reduction or waiver, the drug is likely to be described as in shortage on such shortage list during a subsequent applicable period.
(2) Determination of annual manufacturer price
The annual manufacturer price determined under this paragraph for a dosage form and strength, with respect to a part D rebatable drug and an applicable period, is the sum of the products of—
(A) the average manufacturer price (as defined in subsection (g)(6)) of such dosage form and strength, as calculated for a unit of such drug, with respect to each of the calendar quarters of such period; and
(B) the ratio of—
(i) the total number of units of such dosage form and strength reported under
(ii) the total number of units of such dosage form and strength reported under
(3) Determination of inflation-adjusted payment amount
The inflation-adjusted payment amount determined under this paragraph for a dosage form and strength with respect to a part D rebatable drug for an applicable period, subject to paragraph (5), is—
(A) the benchmark period manufacturer price determined under paragraph (4) for such dosage form and strength with respect to such drug and period; increased by
(B) the percentage by which the applicable period CPI–U (as defined in subsection (g)(5)) for the period exceeds the benchmark period CPI–U (as defined in subsection (g)(4)).
(4) Determination of benchmark period manufacturer price
The benchmark period manufacturer price determined under this paragraph for a dosage form and strength, with respect to a part D rebatable drug and an applicable period, is the sum of the products of—
(A) the average manufacturer price (as defined in subsection (g)(6)) of such dosage form and strength, as calculated for a unit of such drug, with respect to each of the calendar quarters of the payment amount benchmark period (as defined in subsection (g)(3)); and
(B) the ratio of—
(i) the total number of units reported under
(ii) the total number of units reported under
(5) Special treatment of certain drugs and exemption
(A) Subsequently approved drugs
In the case of a part D rebatable drug first approved or licensed by the Food and Drug Administration after October 1, 2021, subparagraphs (A) and (B) of paragraph (4) shall be applied as if the term "payment amount benchmark period" were defined under subsection (g)(3) as the first calendar year beginning after the day on which the drug was first marketed and subparagraph (B) of paragraph (3) shall be applied as if the term "benchmark period CPI–U" were defined under subsection (g)(4) as if the reference to "January 2021" under such subsection were a reference to "January of the first year beginning after the date on which the drug was first marketed".
(B) Treatment of new formulations
(i) In general
In the case of a part D rebatable drug that is a line extension of a part D rebatable drug that is an oral solid dosage form, the Secretary shall establish a formula for determining the rebate amount under paragraph (1) and the inflation adjusted payment amount under paragraph (3) with respect to such part D rebatable drug and an applicable period, consistent with the formula applied under subsection (c)(2)(C) of
(ii) Line extension defined
In this subparagraph, the term "line extension" means, with respect to a part D rebatable drug, a new formulation of the drug, such as an extended release formulation, but does not include an abuse-deterrent formulation of the drug (as determined by the Secretary), regardless of whether such abuse-deterrent formulation is an extended release formulation.
(C) Selected drugs
In the case of a part D rebatable drug that is a selected drug (as defined in
(6) Reconciliation in case of revised information
The Secretary shall provide for a method and process under which, in the case where a PDP sponsor of a prescription drug plan or an MA organization offering an MA–PD plan submits revisions to the number of units of a rebatable covered part D drug dispensed, the Secretary determines, pursuant to such revisions, adjustments, if any, to the calculation of the amount specified in this subsection for a dosage form and strength with respect to such part D rebatable drug and an applicable period and reconciles any overpayments or underpayments in amounts paid as rebates under this subsection. Any identified underpayment shall be rectified by the manufacturer not later than 30 days after the date of receipt from the Secretary of information on such underpayment.
(c) Rebate deposits
Amounts paid as rebates under subsection (b) shall be deposited into the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund established under
(d) Information
For purposes of carrying out this section, the Secretary shall use information submitted by—
(1) manufacturers under
(2) States under
(3) PDP sponsors of prescription drug plans and MA organization offering MA–PD plans under this part.
(e) Civil money penalty
If a manufacturer of a part D rebatable drug has failed to comply with the requirement under subsection (a)(2) with respect to such drug for an applicable period, the manufacturer shall be subject to a civil money penalty in an amount equal to 125 percent of the amount specified in subsection (b) for such drug for such period. The provisions of
(f) Limitation on administrative or judicial review
There shall be no administrative or judicial review of any of the following:
(1) The determination of units under this section.
(2) The determination of whether a drug is a part D rebatable drug under this section.
(3) The calculation of the rebate amount under this section.
(g) Definitions
In this section:
(1) Part D rebatable drug
(A) In general
Except as provided in subparagraph (B), the term "part D rebatable drug" means, with respect to an applicable period, a drug or biological described in subparagraph (C) that is a covered part D drug (as such term is defined under
(B) Exclusion
(i) In general
Such term shall, with respect to an applicable period, not include a drug or biological if the average annual total cost under this part for such period per individual who uses such a drug or biological, as determined by the Secretary, is less than, subject to clause (ii), $100, as determined by the Secretary using the most recent data available or, if data is not available, as estimated by the Secretary.
(ii) Increase
The dollar amount applied under clause (i)—
(I) for the applicable period beginning October 1, 2023, shall be the dollar amount specified under such clause for the applicable period beginning October 1, 2022, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period beginning with October of 2023; and
(II) for a subsequent applicable period, shall be the dollar amount specified in this clause for the previous applicable period, increased by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period beginning with October of the previous period.
Any dollar amount specified under this clause that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(C) Drug or biological described
A drug or biological described in this subparagraph is a drug or biological that, as of the first day of the applicable period involved, is—
(i) a drug approved under a new drug application under
(ii) a drug approved under an abbreviated new drug application under
(I) the reference listed drug approved under
(II) there is no other drug approved under
(III) the manufacturer is not a "first applicant" during the "180-day exclusivity period", as those terms are defined in
(IV) the manufacturer is not a "first approved applicant" for a competitive generic therapy, as that term is defined in
(iii) a biological licensed under
(2) Unit
The term "unit" means, with respect to a part D rebatable drug, the lowest dispensable amount (such as a capsule or tablet, milligram of molecules, or grams) of the part D rebatable drug, as reported under
(3) Payment amount benchmark period
The term "payment amount benchmark period" means the period beginning January 1, 2021, and ending in the month immediately prior to October 1, 2021.
(4) Benchmark period CPI–U
The term "benchmark period CPI–U" means the consumer price index for all urban consumers (United States city average) for January 2021.
(5) Applicable period CPI–U
The term "applicable period CPI–U" means, with respect to an applicable period, the consumer price index for all urban consumers (United States city average) for the first month of such applicable period.
(6) Average manufacturer price
The term "average manufacturer price" has the meaning, with respect to a part D rebatable drug of a manufacturer, given such term in
(7) Applicable period
The term "applicable period" means a 12-month period beginning with October 1 of a year (beginning with October 1, 2022).
(h) Implementation for 2022, 2023, and 2024
The Secretary shall implement this section for 2022, 2023, and 2024 by program instruction or other forms of program guidance.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–14B, as added
1 So in original. Probably should not be capitalized.
§1395w–114c. Manufacturer discount program
(a) Establishment
The Secretary shall establish a manufacturer discount program (in this section referred to as the "program"). Under the program, the Secretary shall enter into agreements described in subsection (b) with manufacturers and provide for the performance of the duties described in subsection (c).
(b) Terms of agreement
(1) In general
(A) Agreement
An agreement under this section shall require the manufacturer to provide, in accordance with this section, discounted prices for applicable drugs of the manufacturer that are dispensed to applicable beneficiaries on or after January 1, 2025.
(B) Clarification
Nothing in this section shall be construed as affecting—
(i) the application of a coinsurance of 25 percent of the negotiated price, as applied under paragraph (2)(A) of
(ii) the application of the copayment amount described in paragraph (4)(A) of such section, with respect to costs described in such paragraph.
(C) Timing of agreement
(i) Special rule for 2025
In order for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on January 1, 2025, and ending on December 31, 2025, the manufacturer shall enter into such agreement not later than March 1, 2024.
(ii) 2026 and subsequent years
In order for an agreement with a manufacturer to be in effect under this section with respect to plan year 2026 or a subsequent plan year, the manufacturer shall enter into such agreement not later than a calendar quarter or semi-annual deadline established by the Secretary.
(2) Provision of appropriate data
Each manufacturer with an agreement in effect under this section shall collect and have available appropriate data, as determined by the Secretary, to ensure that it can demonstrate to the Secretary compliance with the requirements under the program.
(3) Compliance with requirements for administration of program
Each manufacturer with an agreement in effect under this section shall comply with requirements imposed by the Secretary, as applicable, for purposes of administering the program, including any determination under subparagraph (A) of subsection (c)(1) or procedures established under such subsection (c)(1).
(4) Length of agreement
(A) In general
An agreement under this section shall be effective for an initial period of not less than 12 months and shall be automatically renewed for a period of not less than 1 year unless terminated under subparagraph (B).
(B) Termination
(i) By the Secretary
The Secretary shall provide for termination of an agreement under this section for a knowing and willful violation of the requirements of the agreement or other good cause shown. Such termination shall not be effective earlier than 30 days after the date of notice to the manufacturer of such termination. The Secretary shall provide, upon request, a manufacturer with a hearing concerning such a termination, and such hearing shall take place prior to the effective date of the termination with sufficient time for such effective date to be repealed if the Secretary determines appropriate.
(ii) By a manufacturer
A manufacturer may terminate an agreement under this section for any reason. Any such termination shall be effective, with respect to a plan year—
(I) if the termination occurs before January 31 of a plan year, as of the day after the end of the plan year; and
(II) if the termination occurs on or after January 31 of a plan year, as of the day after the end of the succeeding plan year.
(iii) Effectiveness of termination
Any termination under this subparagraph shall not affect discounts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination.
(5) Effective date of agreement
An agreement under this section shall take effect at the start of a calendar quarter or another date specified by the Secretary.
(c) Duties described
The duties described in this subsection are the following:
(1) Administration of program
Administering the program, including—
(A) the determination of the amount of the discounted price of an applicable drug of a manufacturer;
(B) the establishment of procedures to ensure that, not later than the applicable number of calendar days after the dispensing of an applicable drug by a pharmacy or mail order service, the pharmacy or mail order service is reimbursed for an amount equal to the difference between—
(i) the negotiated price of the applicable drug; and
(ii) the discounted price of the applicable drug;
(C) the establishment of procedures to ensure that the discounted price for an applicable drug under this section is applied before any coverage or financial assistance under other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of applicable beneficiaries as specified by the Secretary; and
(D) providing a reasonable dispute resolution mechanism to resolve disagreements between manufacturers, prescription drug plans and MA–PD plans, and the Secretary.
(2) Monitoring compliance
The Secretary shall monitor compliance by a manufacturer with the terms of an agreement under this section.
(3) Collection of data from prescription drug plans and MA–PD plans
The Secretary may collect appropriate data from prescription drug plans and MA–PD plans in a timeframe that allows for discounted prices to be provided for applicable drugs under this section.
(d) Administration
(1) In general
Subject to paragraph (2), the Secretary shall provide for the implementation of this section, including the performance of the duties described in subsection (c).
(2) Limitation
In providing for the implementation of this section, the Secretary shall not receive or distribute any funds of a manufacturer under the program.
(e) Civil money penalty
(1) In general
A manufacturer that fails to provide discounted prices for applicable drugs of the manufacturer dispensed to applicable beneficiaries in accordance with an agreement in effect under this section shall be subject to a civil money penalty for each such failure in an amount the Secretary determines is equal to the sum of—
(A) the amount that the manufacturer would have paid with respect to such discounts under the agreement, which will then be used to pay the discounts which the manufacturer had failed to provide; and
(B) 25 percent of such amount.
(2) Application
The provisions of
(f) Clarification regarding availability of other covered part D drugs
Nothing in this section shall prevent an applicable beneficiary from purchasing a covered part D drug that is not an applicable drug (including a generic drug or a drug that is not on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in).
(g) Definitions
In this section:
(1) Applicable beneficiary
The term "applicable beneficiary" means an individual who, on the date of dispensing a covered part D drug—
(A) is enrolled in a prescription drug plan or an MA–PD plan;
(B) is not enrolled in a qualified retiree prescription drug plan; and
(C) has incurred costs, as determined in accordance with
(2) Applicable drug
The term "applicable drug", with respect to an applicable beneficiary—
(A) means a covered part D drug—
(i) approved under a new drug application under
(ii)(I) if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan uses a formulary, which is on the formulary of the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in;
(II) if the PDP sponsor of the prescription drug plan or the MA organization offering the MA–PD plan does not use a formulary, for which benefits are available under the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in; or
(III) is provided through an exception or appeal; and
(B) does not include a selected drug (as referred to under
(3) Applicable number of calendar days
The term "applicable number of calendar days" means—
(A) with respect to claims for reimbursement submitted electronically, 14 days; and
(B) with respect to claims for reimbursement submitted otherwise, 30 days.
(4) Discounted price
(A) In general
The term "discounted price" means, subject to subparagraphs (B) and (C), with respect to an applicable drug of a manufacturer dispensed during a year to an applicable beneficiary—
(i) who has not incurred costs, as determined in accordance with
(ii) who has incurred such costs, as so determined, in the year that are equal to or exceed such threshold for the year, 80 percent of the negotiated price of such drug.
(B) Phase-in for certain drugs dispensed to LIS beneficiaries
(i) In general
In the case of an applicable drug of a specified manufacturer (as defined in clause (ii)) that is marketed as of August 16, 2022, and dispensed for an applicable beneficiary who is a subsidy eligible individual (as defined in
(ii) Specified manufacturer
(I) In general
In this subparagraph, subject to subclause (II), the term "specified manufacturer" means a manufacturer of an applicable drug for which, in 2021—
(aa) the manufacturer had a coverage gap discount agreement under
(bb) the total expenditures for all of the specified drugs of the manufacturer covered by such agreement or agreements for such year and covered under this part during such year represented less than 1.0 percent of the total expenditures under this part for all covered Part 1 D drugs during such year; and
(cc) the total expenditures for all of the specified drugs of the manufacturer that are single source drugs and biological products for which payment may be made under part B during such year represented less than 1.0 percent of the total expenditures under part B for all drugs or biological products for which payment may be made under such part during such year.
(II) Specified drugs
(aa) In general
For purposes of this clause, the term "specified drug" means, with respect to a specified manufacturer, for 2021, an applicable drug that is produced, prepared, propagated, compounded, converted, or processed by the manufacturer.
(bb) Aggregation rule
All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as one manufacturer for purposes of this subparagraph. For purposes of making a determination pursuant to the previous sentence, an agreement under this section shall require that a manufacturer provide and attest to such information as specified by the Secretary as necessary.
(III) Limitation
The term "specified manufacturer" shall not include a manufacturer described in subclause (I) if such manufacturer is acquired after 2021 by another manufacturer that is not a specified manufacturer, effective at the beginning of the plan year immediately following such acquisition or, in the case of an acquisition before 2025, effective January 1, 2025.
(iii) Specified LIS percent
In this subparagraph, the "specified LIS percent" means, with respect to a year—
(I) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has not incurred costs, as determined in accordance with
(aa) for 2025, 99 percent;
(bb) for 2026, 98 percent;
(cc) for 2027, 95 percent;
(dd) for 2028, 92 percent; and
(ee) for 2029 and each subsequent year, 90 percent; and
(II) for an applicable drug dispensed for an applicable beneficiary described in clause (i) who has incurred costs, as determined in accordance with
(aa) for 2025, 99 percent;
(bb) for 2026, 98 percent;
(cc) for 2027, 95 percent;
(dd) for 2028, 92 percent;
(ee) for 2029, 90 percent;
(ff) for 2030, 85 percent; and
(gg) for 2031 and each subsequent year, 80 percent.
(C) Phase-in for specified small manufacturers
(i) In general
In the case of an applicable drug of a specified small manufacturer (as defined in clause (ii)) that is marketed as of August 16, 2022, and dispensed for an applicable beneficiary, the term "discounted price" means the specified small manufacturer percent (as defined in clause (iii)) of the negotiated price of the applicable drug of the manufacturer.
(ii) Specified small manufacturer
(I) In general
In this subparagraph, subject to subclause (III), the term "specified small manufacturer" means a manufacturer of an applicable drug for which, in 2021—
(aa) the manufacturer is a specified manufacturer (as defined in subparagraph (B)(ii)); and
(bb) the total expenditures under part D for any one of the specified small manufacturer drugs of the manufacturer that are covered by the agreement or agreements under
(II) Specified small manufacturer drugs
(aa) In general
For purposes of this clause, the term "specified small manufacturer drugs" means, with respect to a specified small manufacturer, for 2021, an applicable drug that is produced, prepared, propagated, compounded, converted, or processed by the manufacturer.
(bb) Aggregation rule
All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as one manufacturer for purposes of this subparagraph. For purposes of making a determination pursuant to the previous sentence, an agreement under this section shall require that a manufacturer provide and attest to such information as specified by the Secretary as necessary.
(III) Limitation
The term "specified small manufacturer" shall not include a manufacturer described in subclause (I) if such manufacturer is acquired after 2021 by another manufacturer that is not a specified small manufacturer, effective at the beginning of the plan year immediately following such acquisition or, in the case of an acquisition before 2025, effective January 1, 2025.
(iii) Specified small manufacturer percent
In this subparagraph, the term "specified small manufacturer percent" means, with respect to a year—
(I) for an applicable drug dispensed for an applicable beneficiary who has not incurred costs, as determined in accordance with
(aa) for 2025, 99 percent;
(bb) for 2026, 98 percent;
(cc) for 2027, 95 percent;
(dd) for 2028, 92 percent; and
(ee) for 2029 and each subsequent year, 90 percent; and
(II) for an applicable drug dispensed for an applicable beneficiary who has incurred costs, as determined in accordance with
(aa) for 2025, 99 percent;
(bb) for 2026, 98 percent;
(cc) for 2027, 95 percent;
(dd) for 2028, 92 percent;
(ee) for 2029, 90 percent;
(ff) for 2030, 85 percent; and
(gg) for 2031 and each subsequent year, 80 percent.
(D) Total expenditures
For purposes of this paragraph, the term "total expenditures" includes, in the case of expenditures with respect to part D, the total gross covered prescription drug costs as defined in
(E) Special case for certain claims
(i) Claims spanning deductible
In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall above the annual deductible specified in
(ii) Claims spanning out-of-pocket threshold
In the case where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall entirely below or entirely above the annual out-of-pocket threshold specified in
(I) in accordance with subparagraph (A)(i) on the portion of the negotiated price of the applicable drug that falls below such threshold; and
(II) in accordance with subparagraph (A)(ii) on the portion of such price of such drug that falls at or above such threshold.
(5) Manufacturer
The term "manufacturer" means any entity which is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drug products, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis. Such term does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law.
(6) Negotiated price
The term "negotiated price" has the meaning given such term for purposes of
(7) Qualified retiree prescription drug plan
The term "qualified retiree prescription drug plan" has the meaning given such term in
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–14C, as added
Editorial Notes
References in Text
Section 52 of the Internal Revenue Code of 1986, referred to in subsec. (g)(4)(B)(ii)(II)(bb), (C)(ii)(II)(bb), is classified to
1 So in original. Probably should not be capitalized.
§1395w–114d. Selected drug subsidy program
With respect to covered part D drugs that would be applicable drugs (as defined in
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–14D, as added
§1395w–115. Subsidies for part D eligible individuals for qualified prescription drug coverage
(a) Subsidy payment
In order to reduce premium levels applicable to qualified prescription drug coverage for part D eligible individuals consistent with an overall subsidy level of 74.5 percent (or, for each of 2024 through 2029, the percent applicable as a result of the application of
(1) Direct subsidy
A direct subsidy for each part D eligible individual enrolled in a prescription drug plan or MA–PD plan for a month equal to—
(A) the amount of the plan's standardized bid amount (as defined in
(B) the base beneficiary premium (as computed under paragraph (2) or (8) of
(2) Subsidy through reinsurance
The reinsurance payment amount (as defined in subsection (b)).
This section constitutes budget authority in advance of appropriations Acts and represents the obligation of the Secretary to provide for the payment of amounts provided under this section.
(b) Reinsurance payment amount
(1) In general
The reinsurance payment amount under this subsection for a part D eligible individual enrolled in a prescription drug plan or MA–PD plan for a coverage year is an amount equal to—
(A) for a year preceding 2025, 80 percent of the allowable reinsurance costs (as specified in paragraph (2)) attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in
(B) for 2025 and each subsequent year, the sum of—
(i) with respect to applicable drugs (as defined in
(ii) with respect to covered part D drugs that are not applicable drugs (as so defined), an amount equal to 40 percent of such allowable reinsurance costs attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket threshold specified in
(2) Allowable reinsurance costs
(A) In general
Subject to subparagraph (B), for purposes of this section, the term "allowable reinsurance costs" means, with respect to gross covered prescription drug costs under a prescription drug plan offered by a PDP sponsor or an MA–PD plan offered by an MA organization, the part of such costs that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization or by (or on behalf of) an enrollee under the plan, but in no case more than the part of such costs that would have been paid under the plan if the prescription drug coverage under the plan were basic prescription drug coverage, or, in the case of a plan providing supplemental prescription drug coverage, if such coverage were standard prescription drug coverage.
(B) Inclusion of manufacturer discounts on applicable drugs
For purposes of applying subparagraph (A), the term "allowable reinsurance costs" shall include the portion of the negotiated price (as defined in
(3) Gross covered prescription drug costs
Subject to paragraph (2)(B), for purposes of this section, the term "gross covered prescription drug costs" means, with respect to a part D eligible individual enrolled in a prescription drug plan or MA–PD plan during a coverage year, the costs incurred under the plan, not including administrative costs, but including costs directly related to the dispensing of covered part D drugs during the year and costs relating to the deductible. Such costs shall be determined whether they are paid by the individual or under the plan (or, with respect to 2025 and subsequent years, in the case of an applicable drug, as defined in
(4) Coverage year defined
For purposes of this section, the term "coverage year" means a calendar year in which covered part D drugs are dispensed if the claim for such drugs (and payment on such claim) is made not later than such period after the end of such year as the Secretary specifies.
(c) Adjustments relating to bids
(1) Health status risk adjustment
(A) Establishment of risk adjustors
The Secretary shall establish an appropriate methodology for adjusting the standardized bid amount under subsection (a)(1)(A) to take into account variation in costs for basic prescription drug coverage among prescription drug plans and MA–PD plans based on the differences in actuarial risk of different enrollees being served. Any such risk adjustment shall be designed in a manner so as not to result in a change in the aggregate amounts payable to such plans under subsection (a)(1) and through that portion of the monthly beneficiary prescription drug premiums described in subsection (a)(1)(B) and MA monthly prescription drug beneficiary premiums.
(B) Considerations
In establishing the methodology under subparagraph (A), the Secretary may take into account the similar methodologies used under
(C) Data collection
In order to carry out this paragraph, the Secretary shall require—
(i) PDP sponsors to submit data regarding drug claims that can be linked at the individual level to part A and part B data and such other information as the Secretary determines necessary; and
(ii) MA organizations that offer MA–PD plans to submit data regarding drug claims that can be linked at the individual level to other data that such organizations are required to submit to the Secretary and such other information as the Secretary determines necessary.
(D) Publication
At the time of publication of risk adjustment factors under
(2) Geographic adjustment
(A) In general
Subject to subparagraph (B), for purposes of
(B) De minimis rule
If the Secretary determines that the price variations described in subparagraph (A) among PDP regions are de minimis, the Secretary shall not provide for adjustment under this paragraph.
(C) Budget neutral adjustment
Any adjustment under this paragraph shall be applied in a manner so as to not result in a change in the aggregate payments made under this part that would have been made if the Secretary had not applied such adjustment.
(d) Payment methods
(1) In general
Payments under this section shall be based on such a method as the Secretary determines. The Secretary may establish a payment method by which interim payments of amounts under this section are made during a year based on the Secretary's best estimate of amounts that will be payable after obtaining all of the information.
(2) Requirement for provision of information
(A) Requirement
Payments under this section to a PDP sponsor or MA organization are conditioned upon the furnishing to the Secretary, in a form and manner specified by the Secretary, of such information as may be required to carry out this section.
(B) Restriction on use of information
Information disclosed or obtained pursuant to subparagraph (A) may be used by officers, employees, and contractors of the Department of Health and Human Services only for the purposes of, and to the extent necessary in, carrying out this section.
(3) Source of payments
Payments under this section shall be made from the Medicare Prescription Drug Account.
(4) Application of enrollee adjustment
The provisions of
(e) Portion of total payments to a sponsor or organization subject to risk (application of risk corridors)
(1) Computation of adjusted allowable risk corridor costs
(A) In general
For purposes of this subsection, the term "adjusted allowable risk corridor costs" means, for a plan for a coverage year (as defined in subsection (b)(4))—
(i) the allowable risk corridor costs (as defined in subparagraph (B)) for the plan for the year, reduced by
(ii) the sum of (I) the total reinsurance payments made under subsection (b) to the sponsor of the plan for the year, and (II) the total subsidy payments made under
(B) Allowable risk corridor costs
For purposes of this subsection, the term "allowable risk corridor costs" means, with respect to a prescription drug plan offered by a PDP sponsor or an MA–PD plan offered by an MA organization, the part of costs (not including administrative costs, but including costs directly related to the dispensing of covered part D drugs during the year) incurred by the sponsor or organization under the plan that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization under the plan, but in no case more than the part of such costs that would have been paid under the plan if the prescription drug coverage under the plan were basic prescription drug coverage, or, in the case of a plan providing supplemental prescription drug coverage, if such coverage were basic prescription drug coverage taking into account the adjustment under
(2) Adjustment of payment
(A) No adjustment if adjusted allowable risk corridor costs within risk corridor
If the adjusted allowable risk corridor costs (as defined in paragraph (1)) for the plan for the year are at least equal to the first threshold lower limit of the risk corridor (specified in paragraph (3)(A)(i)), but not greater than the first threshold upper limit of the risk corridor (specified in paragraph (3)(A)(iii)) for the plan for the year, then no payment adjustment shall be made under this subsection.
(B) Increase in payment if adjusted allowable risk corridor costs above upper limit of risk corridor
(i) Costs between first and second threshold upper limits
If the adjusted allowable risk corridor costs for the plan for the year are greater than the first threshold upper limit, but not greater than the second threshold upper limit, of the risk corridor for the plan for the year, the Secretary shall increase the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount equal to 50 percent (or, for 2006 and 2007, 75 percent or 90 percent if the conditions described in clause (iii) are met for the year) of the difference between such adjusted allowable risk corridor costs and the first threshold upper limit of the risk corridor.
(ii) Costs above second threshold upper limits
If the adjusted allowable risk corridor costs for the plan for the year are greater than the second threshold upper limit of the risk corridor for the plan for the year, the Secretary shall increase the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount equal to the sum of—
(I) 50 percent (or, for 2006 and 2007, 75 percent or 90 percent if the conditions described in clause (iii) are met for the year) of the difference between the second threshold upper limit and the first threshold upper limit; and
(II) 80 percent of the difference between such adjusted allowable risk corridor costs and the second threshold upper limit of the risk corridor.
(iii) Conditions for application of higher percentage for 2006 and 2007
The conditions described in this clause are met for 2006 or 2007 if the Secretary determines with respect to such year that—
(I) at least 60 percent of prescription drug plans and MA–PD plans to which this subsection applies have adjusted allowable risk corridor costs for the plan for the year that are more than the first threshold upper limit of the risk corridor for the plan for the year; and
(II) such plans represent at least 60 percent of part D eligible individuals enrolled in any prescription drug plan or MA–PD plan.
(C) Reduction in payment if adjusted allowable risk corridor costs below lower limit of risk corridor
(i) Costs between first and second threshold lower limits
If the adjusted allowable risk corridor costs for the plan for the year are less than the first threshold lower limit, but not less than the second threshold lower limit, of the risk corridor for the plan for the year, the Secretary shall reduce the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount (or otherwise recover from the sponsor or organization an amount) equal to 50 percent (or, for 2006 and 2007, 75 percent) of the difference between the first threshold lower limit of the risk corridor and such adjusted allowable risk corridor costs.
(ii) Costs below second threshold lower limit
If the adjusted allowable risk corridor costs for the plan for the year are less the second threshold lower limit of the risk corridor for the plan for the year, the Secretary shall reduce the total of the payments made to the sponsor or organization offering the plan for the year under this section by an amount (or otherwise recover from the sponsor or organization an amount) equal to the sum of—
(I) 50 percent (or, for 2006 and 2007, 75 percent) of the difference between the first threshold lower limit and the second threshold lower limit; and
(II) 80 percent of the difference between the second threshold upper limit of the risk corridor and such adjusted allowable risk corridor costs.
(3) Establishment of risk corridors
(A) In general
For each plan year the Secretary shall establish a risk corridor for each prescription drug plan and each MA–PD plan. The risk corridor for a plan for a year shall be equal to a range as follows:
(i) First threshold lower limit
The first threshold lower limit of such corridor shall be equal to—
(I) the target amount described in subparagraph (B) for the plan; minus
(II) an amount equal to the first threshold risk percentage for the plan (as determined under subparagraph (C)(i)) of such target amount.
(ii) Second threshold lower limit
The second threshold lower limit of such corridor shall be equal to—
(I) the target amount described in subparagraph (B) for the plan; minus
(II) an amount equal to the second threshold risk percentage for the plan (as determined under subparagraph (C)(ii)) of such target amount.
(iii) First threshold upper limit
The first threshold upper limit of such corridor shall be equal to the sum of—
(I) such target amount; and
(II) the amount described in clause (i)(II).
(iv) Second threshold upper limit
The second threshold upper limit of such corridor shall be equal to the sum of—
(I) such target amount; and
(II) the amount described in clause (ii)(II).
(B) Target amount described
The target amount described in this paragraph is, with respect to a prescription drug plan or an MA–PD plan in a year, the total amount of payments paid to the PDP sponsor or MA–PD organization for the plan for the year, taking into account amounts paid by the Secretary and enrollees, based upon the standardized bid amount (as defined in
(C) First and second threshold risk percentage defined
(i) First threshold risk percentage
Subject to clause (iii), for purposes of this section, the first threshold risk percentage is—
(I) for 2006 and 2007, and 1 2.5 percent;
(II) for 2008 through 2011, 5 percent; and
(III) for 2012 and subsequent years, a percentage established by the Secretary, but in no case less than 5 percent.
(ii) Second threshold risk percentage
Subject to clause (iii), for purposes of this section, the second threshold risk percentage is—
(I) for 2006 and 2007, 5 percent;
(II) for 2008 through 2011, 10 percent; and
(III) for 2012 and subsequent years, a percentage established by the Secretary that is greater than the percent established for the year under clause (i)(III), but in no case less than 10 percent.
(iii) Reduction of risk percentage to ensure 2 plans in an area
Pursuant to
(4) Plans at risk for entire amount of supplemental prescription drug coverage
A PDP sponsor and MA organization that offers a plan that provides supplemental prescription drug benefits shall be at full financial risk for the provision of such supplemental benefits.
(5) No effect on monthly premium
No adjustment in payments made by reason of this subsection shall affect the monthly beneficiary premium or the MA monthly prescription drug beneficiary premium.
(f) Disclosure of information
(1) In general
Each contract under this part and under part C shall provide that—
(A) the PDP sponsor offering a prescription drug plan or an MA organization offering an MA–PD plan shall provide the Secretary with such information as the Secretary determines is necessary to carry out this section; and
(B) the Secretary shall have the right in accordance with
(2) Restriction on use of information
Information disclosed or obtained pursuant to the provisions of this section may be used—
(A) by officers, employees, and contractors of the Department of Health and Human Services for the purposes of, and to the extent necessary in—
(i) carrying out this section or part E of subchapter XI; and
(ii) conducting oversight, evaluation, and enforcement under this subchapter;
(B) by the Attorney General and the Comptroller General of the United States for the purposes of, and to the extent necessary in, carrying out health oversight activities;
(C) by the Executive Director of the Medicare Payment Advisory Commission for purposes of monitoring, making recommendations for, and analysis of the program under this subchapter and by the Executive Director of the Medicaid and CHIP Payment and Access Commission for purposes of monitoring, making recommendations for, and analysis of the Medicaid program established under subchapter XIX and the Children's Health Insurance Program under subchapter XXI; and
(D) by the Director of the Congressional Budget Office for the purposes of analysis of programs authorized under this chapter, as applicable, and the fulfilment of such Director's duties under the Congressional Budget and Impoundment Control Act of 1974.
(3) Additional restrictions on disclosure of information
(A) In general
The Executive Directors described in paragraph (2)(C) shall not disclose any of the following information disclosed to such Executive Directors or obtained by such Executive Directors pursuant to such paragraph, with respect to a prescription drug plan offered by a PDP sponsor or an MA–PD plan offered by an MA organization:
(i) The specific amounts or the identity of the source of any rebates, discounts, price concessions, or other forms of direct or indirect remuneration under such prescription drug plan or such MA–PD plan.
(ii) Information submitted with the bid submitted under
(iii) In the case of such information from prescription drug event records, information in a form that would not be permitted under section 423.505(m) of title 42, Code of Federal Regulations, or any successor regulation, if released by the Centers for Medicare & Medicaid Services.
(B) Clarification
The restrictions on disclosures described in subparagraph (A) shall also apply to disclosures to individual Commissioners of the Medicare Payment Advisory Commission or of the Medicaid and CHIP Payment and Access Commission.
(g) Payment for fallback prescription drug plans
In lieu of the amounts otherwise payable under this section to a PDP sponsor offering a fallback prescription drug plan (as defined in
(h) Temporary retrospective subsidy for reduction in cost-sharing and deductible for adult vaccines recommended by the Advisory Committee on Immunization Practices and Insulin During 2023
(1) In general
In addition to amounts otherwise payable under this section to a PDP sponsor of a prescription drug plan or an MA organization offering an MA–PD plan, for plan year 2023, the Secretary shall provide the PDP sponsor or MA organization offering the plan subsidies in an amount equal to the aggregate reduction in cost-sharing and deductible by reason of the application of paragraph (8) or (9) of
(2) Timing
The Secretary shall provide a subsidy under paragraph (1), as applicable, not later than 18 months following the end of the applicable plan year.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–15, as added
Editorial Notes
References in Text
This chapter, referred to in subsec. (f)(2)(D), is act Aug. 14, 1935, ch. 531,
The Congressional Budget and Impoundment Control Act of 1974, referred to in subsec. (f)(2)(D), is
Amendments
2022—Subsec. (a).
Subsec. (a)(1)(B).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (f)(2)(A)(i).
Subsec. (f)(2)(D).
Subsec. (h).
Subsec. (h)(1).
2020—Subsec. (f)(2)(C).
Subsec. (f)(3).
2010—Subsec. (f)(2).
Statutory Notes and Related Subsidiaries
Construction of 2022 Amendment
Nothing in amendment by section 11401(c)(1) of
1 So in original. The word "and" probably should not appear.
2 See References in Text note below.
§1395w–116. Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund
(a) Establishment and operation of Account
(1) Establishment
There is created within the Federal Supplementary Medical Insurance Trust Fund established by
(2) Funding
The Account shall consist of such gifts and bequests as may be made as provided in
(3) Separate from rest of Trust Fund
Funds provided under this part to the Account shall be kept separate from all other funds within the Federal Supplementary Medical Insurance Trust Fund, but shall be invested, and such investments redeemed, in the same manner as all other funds and investments within such Trust Fund.
(b) Payments from Account
(1) In general
The Managing Trustee shall pay from time to time from the Account such amounts as the Secretary certifies are necessary to make payments to operate the program under this part, including—
(A) payments under
(B) payments under
(C) payments to sponsors of qualified retiree prescription drug plans under
(D) payments with respect to administrative expenses under this part in accordance with
(E) payments under
(2) Transfers to Medicaid account for increased administrative costs
The Managing Trustee shall transfer from time to time from the Account to the Grants to States for Medicaid account amounts the Secretary certifies are attributable to increases in payment resulting from the application of
(3) Payments of premiums withheld
The Managing Trustee shall make payment to the PDP sponsor or MA organization involved of the premiums (and the portion of late enrollment penalties) that are collected in the manner described in
(4) Treatment in relation to part B premium
Amounts payable from the Account shall not be taken into account in computing actuarial rates or premium amounts under
(c) Deposits into Account
(1) Low-income transfer
Amounts paid under
(2) Amounts withheld
Pursuant to
(3) Appropriations to cover Government contributions
There are authorized to be appropriated from time to time, out of any moneys in the Treasury not otherwise appropriated, to the Account, an amount equivalent to the amount of payments made from the Account under subsection (b) plus such amounts as the Managing Trustee certifies is necessary to maintain an appropriate contingency margin, reduced by the amounts deposited under paragraph (1) or subsection (a)(2).
(4) Initial funding and reserve
In order to assure prompt payment of benefits provided under this part and the administrative expenses thereunder during the early months of the program established by this part and to provide an initial contingency reserve, there are authorized to be appropriated to the Account, out of any moneys in the Treasury not otherwise appropriated, such amount as the Secretary certifies are required, but not to exceed 10 percent of the estimated total expenditures from such Account in 2006.
(5) Transfer of any remaining balance from Transitional Assistance Account
Any balance in the Transitional Assistance Account that is transferred under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–16, as added
Editorial Notes
Amendments
2022—Subsec. (b)(1)(E).
subpart 3—application to medicare advantage program and treatment of employer-sponsored programs and other prescription drug plans
§1395w–131. Application to Medicare Advantage program and related managed care programs
(a) Special rules relating to offering of qualified prescription drug coverage
(1) In general
An MA organization on and after January 1, 2006—
(A) may not offer an MA plan described in
(B) may not offer prescription drug coverage (other than that required under parts A and B) to an enrollee—
(i) under an MSA plan; or
(ii) under another MA plan unless such drug coverage under such other plan provides qualified prescription drug coverage and unless the requirements of this section with respect to such coverage are met.
(2) Qualifying coverage
For purposes of paragraph (1)(A), the term "required coverage" means with respect to an MA–PD plan—
(A) basic prescription drug coverage; or
(B) qualified prescription drug coverage that provides supplemental prescription drug coverage, so long as there is no MA monthly supplemental beneficiary premium applied under the plan (due to the application of a credit against such premium of a rebate under
(b) Application of default enrollment rules
(1) Seamless continuation
In applying
(2) MA continuation
In applying
(A) for purposes of the election as of January 1, 2006, the MA plan provided as of December 31, 2005, any prescription drug coverage; or
(B) for periods after January 1, 2006, such MA plan is an MA–PD plan.
(3) Discontinuance of MA–PD election during first year of eligibility
In applying the second sentence of
(4) Rules regarding enrollees in MA plans not providing qualified prescription drug coverage
In the case of an individual who is enrolled in an MA plan (other than an MSA plan) that does not provide qualified prescription drug coverage, if the organization offering such coverage discontinues the offering with respect to the individual of all MA plans that do not provide such coverage—
(i) the individual is deemed to have elected the original medicare fee-for-service program option, unless the individual affirmatively elects to enroll in an MA–PD plan; and
(ii) in the case of such a deemed election, the disenrollment shall be treated as an involuntary termination of the MA plan described in subparagraph (B)(ii) of
The information disclosed under
(c) Application of part D rules for prescription drug coverage
With respect to the offering of qualified prescription drug coverage by an MA organization under this part on and after January 1, 2006—
(1) In general
Except as otherwise provided, the provisions of this part shall apply under part C with respect to prescription drug coverage provided under MA–PD plans in lieu of the other provisions of part C that would apply to such coverage under such plans.
(2) Waiver
The Secretary shall waive the provisions referred to in paragraph (1) to the extent the Secretary determines that such provisions duplicate, or are in conflict with, provisions otherwise applicable to the organization or plan under part C or as may be necessary in order to improve coordination of this part with the benefits under this part.
(3) Treatment of MA owned and operated pharmacies
The Secretary may waive the requirement of
(d) Special rules for private fee-for-service plans that offer prescription drug coverage
With respect to an MA plan described in
(1) Requirements regarding negotiated prices
Subsections (a)(1) and (d)(1) of
(2) Modification of pharmacy access standard and disclosure requirement
If the plan provides coverage for drugs purchased from all pharmacies, without charging additional cost-sharing, and without regard to whether they are participating pharmacies in a network or have entered into contracts or agreements with pharmacies to provide drugs to enrollees covered by the plan, subsections (b)(1)(C) and (k) of
(3) Drug utilization management program and medication therapy management program not required
The requirements of subparagraphs (A) and (C) of
(4) Application of reinsurance
The Secretary shall determine the amount of reinsurance payments under
(A) bases such amount on the Secretary's estimate of the amount of such payments that would be payable if the plan were an MA–PD plan described in
(B) takes into account the average reinsurance payments made under
(5) Exemption from risk corridor provisions
The provisions of
(6) Exemption from negotiations
Subsections (d) and (e)(2)(C) of
(7) Treatment of incurred costs without regard to formulary
The exclusion of costs incurred for covered part D drugs which are not included (or treated as being included) in a plan's formulary under
(e) Application to reasonable cost reimbursement contractors
(1) In general
Subject to paragraphs (2) and (3) and rules established by the Secretary, in the case of an organization that is providing benefits under a reasonable cost reimbursement contract under
(2) Limitation on enrollment
In applying paragraph (1), the organization may not enroll part D eligible individuals who are not enrolled under the reasonable cost reimbursement contract involved.
(3) Bids not included in determining national average monthly bid amount
The bid of an organization offering prescription drug coverage under this subsection shall not be taken into account in computing the national average monthly bid amount and low-income benchmark premium amount under this part.
(f) Application to PACE
(1) In general
Subject to paragraphs (2) and (3) and rules established by the Secretary, in the case of a PACE program under
(2) Limitation on enrollment
In applying paragraph (1), the organization may not enroll part D eligible individuals who are not enrolled under the PACE program involved.
(3) Bids not included in determining standardized bid amount
The bid of an organization offering prescription drug coverage under this subsection is not be taken into account in computing any average benchmark bid amount and low-income benchmark premium amount under this part.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–21, as added
Editorial Notes
Amendments
2022—Subsec. (d)(7).
§1395w–132. Special rules for employer-sponsored programs
(a) Subsidy payment
(1) In general
The Secretary shall provide in accordance with this subsection for payment to the sponsor of a qualified retiree prescription drug plan (as defined in paragraph (2)) of a special subsidy payment equal to the amount specified in paragraph (3) for each qualified covered retiree under the plan (as defined in paragraph (4)). This subsection constitutes budget authority in advance of appropriations Acts and represents the obligation of the Secretary to provide for the payment of amounts provided under this section.
(2) Qualified retiree prescription drug plan defined
For purposes of this subsection, the term "qualified retiree prescription drug plan" means employment-based retiree health coverage (as defined in subsection (c)(1)) if, with respect to a part D eligible individual who is a participant or beneficiary under such coverage, the following requirements are met:
(A) Attestation of actuarial equivalence to standard coverage
The sponsor of the plan provides the Secretary, annually or at such other time as the Secretary may require, with an attestation that the actuarial value of prescription drug coverage under the plan (as determined using the processes and methods described in
(i) for years prior to 2025, any discount or coverage provided during the gap in prescription drug coverage that occurs between the initial coverage limit under
(ii) for 2025 and each subsequent year, any discount provided pursuant to
(B) Audits
The sponsor of the plan, or an administrator of the plan designated by the sponsor, shall maintain (and afford the Secretary access to) such records as the Secretary may require for purposes of audits and other oversight activities necessary to ensure the adequacy of prescription drug coverage and the accuracy of payments made under this section. The provisions of
(C) Provision of disclosure regarding prescription drug coverage
The sponsor of the plan shall provide for disclosure of information regarding prescription drug coverage in accordance with
(3) Employer and union special subsidy amounts
(A) In general
For purposes of this subsection, the special subsidy payment amount under this paragraph for a qualifying covered retiree for a coverage year enrolled with the sponsor of a qualified retiree prescription drug plan is, for the portion of the retiree's gross covered retiree plan-related prescription drug costs (as defined in subparagraph (C)(ii)) for such year that exceeds the cost threshold amount specified in subparagraph (B) and does not exceed the cost limit under such subparagraph, an amount equal to 28 percent of the allowable retiree costs (as defined in subparagraph (C)(i)) attributable to such gross covered prescription drug costs.
(B) Cost threshold and cost limit applicable
(i) In general
Subject to clause (ii)—
(I) the cost threshold under this subparagraph is equal to $250 for plan years that end in 2006; and
(II) the cost limit under this subparagraph is equal to $5,000 for plan years that end in 2006.
(ii) Indexing
The cost threshold and cost limit amounts specified in subclauses (I) and (II) of clause (i) for a plan year that ends after 2006 shall be adjusted in the same manner as the annual deductible and the annual out-of-pocket threshold, respectively, are annually adjusted under paragraphs (1) and (4)(B) of
(C) Definitions
For purposes of this paragraph:
(i) Allowable retiree costs
The term "allowable retiree costs" means, with respect to gross covered prescription drug costs under a qualified retiree prescription drug plan by a plan sponsor, the part of such costs that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or by or on behalf of a qualifying covered retiree under the plan.
(ii) Gross covered retiree plan-related prescription drug costs
For purposes of this section, the term "gross covered retiree plan-related prescription drug costs" means, with respect to a qualifying covered retiree enrolled in a qualified retiree prescription drug plan during a coverage year, the costs incurred under the plan, not including administrative costs, but including costs directly related to the dispensing of covered part D drugs during the year. Such costs shall be determined whether they are paid by the retiree or under the plan.
(iii) Coverage year
The term "coverage year" has the meaning given such term in
(4) Qualifying covered retiree defined
For purposes of this subsection, the term "qualifying covered retiree" means a part D eligible individual who is not enrolled in a prescription drug plan or an MA–PD plan but is covered under a qualified retiree prescription drug plan.
(5) Payment methods, including provision of necessary information
The provisions of
(6) Construction
Nothing in this subsection shall be construed as—
(A) precluding a part D eligible individual who is covered under employment-based retiree health coverage from enrolling in a prescription drug plan or in an MA–PD plan;
(B) precluding such employment-based retiree health coverage or an employer or other person from paying all or any portion of any premium required for coverage under a prescription drug plan or MA–PD plan on behalf of such an individual;
(C) preventing such employment-based retiree health coverage from providing coverage—
(i) that is better than standard prescription drug coverage to retirees who are covered under a qualified retiree prescription drug plan; or
(ii) that is supplemental to the benefits provided under a prescription drug plan or an MA–PD plan, including benefits to retirees who are not covered under a qualified retiree prescription drug plan but who are enrolled in such a prescription drug plan or MA–PD plan; or
(D) preventing employers to provide for flexibility in benefit design and pharmacy access provisions, without regard to the requirements for basic prescription drug coverage, so long as the actuarial equivalence requirement of paragraph (2)(A) is met.
(b) Application of MA waiver authority
The provisions of
(1) a prescription drug plan; or
(2) contracts between such a Program plan and the PDP sponsor of such a prescription drug plan..1
(c) Definitions
For purposes of this section:
(1) Employment-based retiree health coverage
The term "employment-based retiree health coverage" means health insurance or other coverage of health care costs (whether provided by voluntary insurance coverage or pursuant to statutory or contractual obligation) for part D eligible individuals (or for such individuals and their spouses and dependents) under a group health plan based on their status as retired participants in such plan.
(2) Sponsor
The term "sponsor" means a plan sponsor, as defined in
(3) Group health plan
The term "group health plan" includes such a plan as defined in
(A) Federal and State governmental plans
Such a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing, including a health benefits plan offered under
(B) Collectively bargained plans
Such a plan established or maintained under or pursuant to one or more collective bargaining agreements.
(C) Church plans
Such a plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of the Internal Revenue Code of 1986.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–22, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (c)(3)(C), is classified generally to Title 26, Internal Revenue Code.
Amendments
2022—Subsec. (a)(2)(A).
Subsec. (b).
2010—Subsec. (a)(2)(A).
Statutory Notes and Related Subsidiaries
Study on Employment-Based Retiree Health Coverage
"(a)
"(b)
"(1) Trends in employment-based retiree health coverage prior to the date of the enactment of this Act [Dec. 8, 2003].
"(2) The opinions of sponsors of employment-based retiree health coverage concerning which of the options available under this Act [see Tables for classification] they are most likely to utilize for the provision of health coverage to their medicare-eligible retirees, including an assessment of the administrative burdens associated with the available options.
"(3) The likelihood of sponsors of employment-based retiree health coverage to maintain or adjust their levels of retiree health benefits beyond coordination with medicare, including for prescription drug coverage, provided to medicare-eligible retirees after the date of the enactment of this Act.
"(4) The factors that sponsors of employment-based retiree health coverage expect to consider in making decisions about any changes they may make in the health coverage provided to medicare-eligible retirees.
"(5) Whether the prescription drug plan options available, or the health plan options available under the Medicare Advantage program, are likely to cause employers and other entities that did not provide health coverage to retirees prior to the date of the enactment of this Act to provide supplemental coverage or contributions toward premium expenses for medicare-eligible retirees who may enroll in such options in the future.
"(c)
"(1) Changes in the trends in employment-based retiree health coverage since the completion of the initial study by the Comptroller General.
"(2) Factors contributing to any changes in coverage levels.
"(3) The number and characteristics of sponsors of employment-based retiree health coverage who receive the special subsidy payments under section 1860D–22 of the Social Security Act [
"(4) The extent to which sponsors of employment-based retiree health coverage provide supplemental health coverage or contribute to the premiums for medicare-eligible retirees who enroll in a prescription drug plan or an MA–PD plan.
"(5) Other coverage options, including tax-preferred retirement or health savings accounts, consumer-directed health plans, or other vehicles that sponsors of employment-based retiree health coverage believe would assist retirees with their future health care needs and their willingness to sponsor such alternative plan designs.
"(6) The extent to which employers or other entities that did not provide employment-based retiree health coverage prior to the date of the enactment of this Act [Dec. 8, 2003] provided some form of coverage or financial assistance for retiree health care needs after the date of the enactment of this Act.
"(7) Recommendations by employers, benefits experts, academics, and others on ways that the voluntary provision of employment-based retiree health coverage may be improved and expanded.
"(d)
"(1) the initial study under subsection (b) not later than 1 year after the date of the enactment of this Act [Dec. 8, 2003]; and
"(2) the final study under subsection (c) not later than January 1, 2007.
"(e)
§1395w–133. State Pharmaceutical Assistance Programs
(a) Requirements for benefit coordination
(1) In general
Before July 1, 2005, the Secretary shall establish consistent with this section requirements for prescription drug plans to ensure the effective coordination between a part D plan (as defined in paragraph (5)) and a State Pharmaceutical Assistance Program (as defined in subsection (b)) with respect to—
(A) payment of premiums and coverage; and
(B) payment for supplemental prescription drug benefits,
for part D eligible individuals enrolled under both types of plans.
(2) Coordination elements
The requirements under paragraph (1) shall include requirements relating to coordination of each of the following:
(A) Enrollment file sharing.
(B) The processing of claims, including electronic processing.
(C) Claims payment.
(D) Claims reconciliation reports.
(E) Application of the protection against high out-of-pocket expenditures under
(F) Other administrative processes specified by the Secretary.
Such requirements shall be consistent with applicable law to safeguard the privacy of any individually identifiable beneficiary information.
(3) Use of lump sum per capita method
Such requirements shall include a method for the application by a part D plan of specified funding amounts from a State Pharmaceutical Assistance Program for enrolled individuals for supplemental prescription drug benefits.
(4) Consultation
In establishing requirements under this subsection, the Secretary shall consult with State Pharmaceutical Assistance Programs, MA organizations, States, pharmaceutical benefit managers, employers, representatives of part D eligible individuals, the data processing experts, pharmacists, pharmaceutical manufacturers, and other experts.
(5) Part D plan defined
For purposes of this section and
(b) State Pharmaceutical Assistance Program
For purposes of this part, the term "State Pharmaceutical Assistance Program" means a State program—
(1) which provides financial assistance for the purchase or provision of supplemental prescription drug coverage or benefits on behalf of part D eligible individuals;
(2) which, in determining eligibility and the amount of assistance to part D eligible individuals under the Program, provides assistance to such individuals in all part D plans and does not discriminate based upon the part D plan in which the individual is enrolled; and
(3) which satisfies the requirements of subsections (a) and (c).
(c) Relation to other provisions
(1) Medicare as primary payor
The requirements of this section shall not change or affect the primary payor status of a part D plan.
(2) Use of a single card
A card that is issued under
(3) Other provisions
The provisions of
(4) Special treatment under out-of-pocket rule
In applying
(5) Construction
Nothing in this section shall be construed as requiring a State Pharmaceutical Assistance Program to coordinate or provide financial assistance with respect to any part D plan.
(d) Facilitation of transition and coordination with State Pharmaceutical Assistance Programs
(1) Transitional grant program
The Secretary shall provide payments to State Pharmaceutical Assistance Programs with an application approved under this subsection.
(2) Use of funds
Payments under this section may be used by a Program for any of the following:
(A) Educating part D eligible individuals enrolled in the Program about the prescription drug coverage available through part D plans under this part.
(B) Providing technical assistance, phone support, and counseling for such enrollees to facilitate selection and enrollment in such plans.
(C) Other activities designed to promote the effective coordination of enrollment, coverage, and payment between such Program and such plans.
(3) Allocation of funds
Of the amount appropriated to carry out this subsection for a fiscal year, the Secretary shall allocate payments among Programs that have applications approved under paragraph (4) for such fiscal year in proportion to the number of enrollees enrolled in each such Program as of October 1, 2003.
(4) Application
No payments may be made under this subsection except pursuant to an application that is submitted and approved in a time, manner, and form specified by the Secretary.
(5) Funding
Out of any funds in the Treasury not otherwise appropriated, there are appropriated for each of fiscal years 2005 and 2006, $62,500,000 to carry out this subsection.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–23, as added
§1395w–134. Coordination requirements for plans providing prescription drug coverage
(a) Application of benefit coordination requirements to additional plans
(1) In general
The Secretary shall apply the coordination requirements established under
(2) Application to treatment of certain out-of-pocket expenditures
To the extent specified by the Secretary, the requirements referred to in paragraph (1) shall apply to procedures established under
(3) User fees
(A) In general
The Secretary may impose user fees for the transmittal of information necessary for benefit coordination under
(B) Application
A user fee may not be imposed under subparagraph (A) with respect to a State Pharmaceutical Assistance Program.
(b) Rx Plan
An Rx plan described in this subsection is any of the following:
(1) Medicaid programs
A State plan under subchapter XIX, including such a plan operating under a waiver under
(2) Group health plans
An employer group health plan.
(3) FEHBP
The Federal employees health benefits plan under
(4) Military coverage (including TRICARE)
Coverage under
(5) Other prescription drug coverage
Such other health benefit plans or programs that provide coverage or financial assistance for the purchase or provision of prescription drug coverage on behalf of part D eligible individuals as the Secretary may specify.
(c) Relation to other provisions
(1) Use of cost management tools
The requirements of this section shall not impair or prevent a PDP sponsor or MA organization from applying cost management tools (including differential payments) under all methods of operation.
(2) No affect 1 on treatment of certain out-of-pocket expenditures
The requirements of this section shall not affect the application of the procedures established under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–24, as added
1 So in original. Probably should be "effect".
subpart 4—medicare prescription drug discount card and transitional assistance program
§1395w–141. Medicare prescription drug discount card and transitional assistance program
(a) Establishment of program
(1) In general
The Secretary shall establish a program under this section—
(A) to endorse prescription drug discount card programs that meet the requirements of this section in order to provide access to prescription drug discounts through prescription drug card sponsors for discount card eligible individuals throughout the United States; and
(B) to provide for transitional assistance for transitional assistance eligible individuals enrolled in such endorsed programs.
(2) Period of operation
(A) Implementation deadline
The Secretary shall implement the program under this section so that discount cards and transitional assistance are first available by not later than 6 months after December 8, 2003.
(B) Expediting implementation
The Secretary shall promulgate regulations to carry out the program under this section which may be effective and final immediately on an interim basis as of the date of publication of the interim final regulation. If the Secretary provides for an interim final regulation, the Secretary shall provide for a period of public comments on such regulation after the date of publication. The Secretary may change or revise such regulation after completion of the period of public comment.
(C) Termination and transition
(i) In general
Subject to clause (ii)—
(I) the program under this section shall not apply to covered discount card drugs dispensed after December 31, 2005; and
(II) transitional assistance shall be available after such date to the extent the assistance relates to drugs dispensed on or before such date.
(ii) Transition
In the case of an individual who is enrolled in an endorsed discount card program as of December 31, 2005, during the individual's transition period (if any) under clause (iii), in accordance with transition rules specified by the Secretary—
(I) such endorsed program may continue to apply to covered discount card drugs dispensed to the individual under the program during such transition period;
(II) no annual enrollment fee shall be applicable during the transition period;
(III) during such period the individual may not change the endorsed program plan in which the individual is enrolled; and
(IV) the balance of any transitional assistance remaining on January 1, 2006, shall remain available for drugs dispensed during the individual's transition period.
(iii) Transition period
The transition period under this clause for an individual is the period beginning on January 1, 2006, and ending in the case of an individual who—
(I) is enrolled in a prescription drug plan or an MA–PD plan before the last date of the initial enrollment period under
(II) is not so enrolled, on the last day of such initial period.
(3) Voluntary nature of program
Nothing in this section shall be construed as requiring a discount card eligible individual to enroll in an endorsed discount card program under this section.
(4) Glossary and definitions of terms
For purposes of this section:
(A) Covered discount card drug
The term "covered discount card drug" has the meaning given the term "covered part D drug" in
(B) Discount card eligible individual
The term "discount card eligible individual" is defined in subsection (b)(1)(A).
(C) Endorsed discount card program; endorsed program
The terms "endorsed discount card program" and "endorsed program" mean a prescription drug discount card program that is endorsed (and for which the sponsor has a contract with the Secretary) under this section.
(D) Negotiated price
Negotiated prices are described in subsection (e)(1)(A)(ii).
(E) Prescription drug card sponsor; sponsor
The terms "prescription drug card sponsor" and "sponsor" are defined in subsection (h)(1)(A).
(F) State
The term "State" has the meaning given such term for purposes of subchapter XIX.
(G) Transitional assistance eligible individual
The term "transitional assistance eligible individual" is defined in subsection (b)(2).
(b) Eligibility for discount card and for transitional assistance
For purposes of this section:
(1) Discount card eligible individual
(A) In general
The term "discount card eligible individual" means an individual who—
(i) is entitled to benefits, or enrolled, under part A or enrolled under part B; and
(ii) subject to paragraph (4), is not an individual described in subparagraph (B).
(B) Individual described
An individual described in this subparagraph is an individual described in subparagraph (A)(i) who is enrolled under subchapter XIX (or under a waiver under
(2) Transitional assistance eligible individual
(A) In general
Subject to subparagraph (B), the term "transitional assistance eligible individual" means a discount card eligible individual who resides in one of the 50 States or the District of Columbia and whose income (as determined under subsection (f)(1)(B)) is not more than 135 percent of the poverty line (as defined in
(B) Exclusion of individuals with certain prescription drug coverage
Such term does not include an individual who has coverage of, or assistance for, covered discount card drugs under any of the following:
(i) A group health plan or health insurance coverage (as such terms are defined in
(ii)
(iii) A plan under
(3) Special transitional assistance eligible individual
The term "special transitional assistance eligible individual" means a transitional assistance eligible individual whose income (as determined under subsection (f)(1)(B)) is not more than 100 percent of the poverty line (as defined in
(4) Treatment of medicaid medically needy
For purposes of this section, the Secretary shall provide for appropriate rules for the treatment of medically needy individuals described in
(c) Enrollment and enrollment fees
(1) Enrollment process
The Secretary shall establish a process through which a discount card eligible individual is enrolled and disenrolled in an endorsed discount card program under this section consistent with the following:
(A) Continuous open enrollment
Subject to the succeeding provisions of this paragraph and subsection (h)(9), a discount card eligible individual who is not enrolled in an endorsed discount card program and is residing in a State may enroll in any such endorsed program—
(i) that serves residents of the State; and
(ii) at any time beginning on the initial enrollment date, specified by the Secretary, and before January 1, 2006.
(B) Use of standard enrollment form
An enrollment in an endorsed program shall only be effected through completion of a standard enrollment form specified by the Secretary. Each sponsor of an endorsed program shall transmit to the Secretary (in a form and manner specified by the Secretary) information on individuals who complete such enrollment forms and, to the extent provided under subsection (f), information regarding certification as a transitional assistance eligible individual.
(C) Enrollment only in one program
(i) In general
Subject to clauses (ii) and (iii), a discount card eligible individual may be enrolled in only one endorsed discount card program under this section.
(ii) Change in endorsed program permitted for 2005
The Secretary shall establish a process, similar to (and coordinated with) the process for annual, coordinated elections under
(iii) Additional exceptions
The Secretary shall permit an individual to change the endorsed discount card program in which the individual is enrolled in the case of an individual who changes residence to be outside the service area of such program and in such other exceptional cases as the Secretary may provide (taking into account the circumstances for special election periods under
(D) Disenrollment
(i) Voluntary
An individual may voluntarily disenroll from an endorsed discount card program at any time. In the case of such a voluntary disenrollment, the individual may not enroll in another endorsed program, except under such exceptional circumstances as the Secretary may recognize under subparagraph (C)(iii) or during the annual coordinated enrollment period provided under subparagraph (C)(ii).
(ii) Involuntary
An individual who is enrolled in an endorsed discount card program and not a transitional assistance eligible individual may be disenrolled by the sponsor of the program if the individual fails to pay any annual enrollment fee required under the program.
(E) Application to certain enrollees
In the case of a discount card eligible individual who is enrolled in a plan described in
(2) Enrollment fees
(A) In general
Subject to the succeeding provisions of this paragraph, a prescription drug card sponsor may charge an annual enrollment fee for each discount card eligible individual enrolled in an endorsed discount card program offered by such sponsor. The annual enrollment fee for either 2004 or 2005 shall not be prorated for portions of a year. There shall be no annual enrollment fee for a year after 2005.
(B) Amount
No annual enrollment fee charged under subparagraph (A) may exceed $30.
(C) Uniform enrollment fee
A prescription drug card sponsor shall ensure that the annual enrollment fee (if any) for an endorsed discount card program is the same for all discount card eligible individuals enrolled in the program and residing in the State.
(D) Collection
The annual enrollment fee (if any) charged for enrollment in an endorsed program shall be collected by the sponsor of the program.
(E) Payment of fee for transitional assistance eligible individuals
Under subsection (g)(1)(A), the annual enrollment fee (if any) otherwise charged under this paragraph with respect to a transitional assistance eligible individual shall be paid by the Secretary on behalf of such individual.
(F) Optional payment of fee by State
(i) In general
The Secretary shall establish an arrangement under which a State may provide for payment of some or all of the enrollment fee for some or all enrollees who are not transitional assistance eligible individuals in the State, as specified by the State under the arrangement. Insofar as such a payment arrangement is made with respect to an enrollee, the amount of the enrollment fee shall be paid directly by the State to the sponsor.
(ii) No Federal matching available under medicaid or SCHIP
Expenditures made by a State for enrollment fees described in clause (i) shall not be treated as State expenditures for purposes of Federal matching payments under subchapter XIX or XXI.
(G) Rules in case of changes in program enrollment during a year
The Secretary shall provide special rules in the case of payment of an annual enrollment fee for a discount card eligible individual who changes the endorsed program in which the individual is enrolled during a year.
(3) Issuance of discount card
Each prescription drug card sponsor of an endorsed discount card program shall issue, in a standard format specified by the Secretary, to each discount card eligible individual enrolled in such program a card that establishes proof of enrollment and that can be used in a coordinated manner to identify the sponsor, program, and individual for purposes of the program under this section.
(4) Period of access
In the case of a discount card eligible individual who enrolls in an endorsed program, access to negotiated prices and transitional assistance, if any, under such endorsed program shall take effect on such date as the Secretary shall specify.
(d) Provision of information on enrollment and program features
(1) Secretarial responsibilities
(A) In general
The Secretary shall provide for activities under this subsection to broadly disseminate information to discount card eligible individuals (and prospective eligible individuals) regarding—
(i) enrollment in endorsed discount card programs; and
(ii) the features of the program under this section, including the availability of transitional assistance.
(B) Promotion of informed choice
In order to promote informed choice among endorsed prescription drug discount card programs, the Secretary shall provide for the dissemination of information which—
(i) compares the annual enrollment fee and other features of such programs, which may include comparative prices for covered discount card drugs; and
(ii) includes educational materials on the variability of discounts on prices of covered discount card drugs under an endorsed program.
The dissemination of information under clause (i) shall, to the extent practicable, be coordinated with the dissemination of educational information on other medicare options.
(C) Special rule for initial enrollment date under the program
To the extent practicable, the Secretary shall ensure, through the activities described in subparagraphs (A) and (B), that discount card eligible individuals are provided with such information at least 30 days prior to the initial enrollment date specified under subsection (c)(1)(A)(ii).
(D) Use of medicare toll-free number
The Secretary shall provide through the toll-free telephone number 1–800–MEDICARE for the receipt and response to inquiries and complaints concerning the program under this section and endorsed programs.
(2) Prescription drug card sponsor responsibilities
(A) In general
Each prescription drug card sponsor that offers an endorsed discount card program shall make available to discount card eligible individuals (through the Internet and otherwise) information that the Secretary identifies as being necessary to promote informed choice among endorsed discount card programs by such individuals, including information on enrollment fees and negotiated prices for covered discount card drugs charged to such individuals.
(B) Response to enrollee questions
Each sponsor offering an endorsed discount card program shall have a mechanism (including a toll-free telephone number) for providing upon request specific information (such as negotiated prices and the amount of transitional assistance remaining available through the program) to discount card eligible individuals enrolled in the program. The sponsor shall inform transitional assistance eligible individuals enrolled in the program of the availability of such toll-free telephone number to provide information on the amount of available transitional assistance.
(C) Information on balance of transitional assistance available at point-of-sale
Each sponsor offering an endorsed discount card program shall have a mechanism so that information on the amount of transitional assistance remaining under subsection (g)(1)(B) is available (electronically or by telephone) at the point-of-sale of covered discount card drugs.
(3) Public disclosure of pharmaceutical prices for equivalent drugs
(A) In general
A prescription drug card sponsor offering an endorsed discount card program shall provide that each pharmacy that dispenses a covered discount card drug shall inform a discount card eligible individual enrolled in the program of any differential between the price of the drug to the enrollee and the price of the lowest priced generic covered discount card drug under the program that is therapeutically equivalent and bioequivalent and available at such pharmacy.
(B) Timing of notice
(i) In general
Subject to clause (ii), the information under subparagraph (A) shall be provided at the time of purchase of the drug involved, or, in the case of dispensing by mail order, at the time of delivery of such drug.
(ii) Waiver
The Secretary may waive clause (i) in such circumstances as the Secretary may specify.
(e) Discount card features
(1) Savings to enrollees through negotiated prices
(A) Access to negotiated prices
(i) In general
Each prescription drug card sponsor that offers an endorsed discount card program shall provide each discount card eligible individual enrolled in the program with access to negotiated prices.
(ii) Negotiated prices
For purposes of this section, negotiated prices shall take into account negotiated price concessions, such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations, for covered discount card drugs, and include any dispensing fees for such drugs.
(B) Ensuring pharmacy access
Each prescription drug card sponsor offering an endorsed discount card program shall secure the participation in its network of a sufficient number of pharmacies that dispense (other than solely by mail order) drugs directly to enrollees to ensure convenient access to covered discount card drugs at negotiated prices (consistent with rules established by the Secretary). The Secretary shall establish convenient access rules under this clause that are no less favorable to enrollees than the standards for convenient access to pharmacies included in the statement of work of solicitation (#MDA906–03–R–0002) of the Department of Defense under the TRICARE Retail Pharmacy (TRRx) as of March 13, 2003.
(C) Prohibition on charges for required services
(i) In general
Subject to clause (ii), a prescription drug card sponsor (and any pharmacy contracting with such sponsor for the provision of covered discount card drugs to individuals enrolled in such sponsor's endorsed discount card program) may not charge an enrollee any amount for any items and services required to be provided by the sponsor under this section.
(ii) Construction
Nothing in clause (i) shall be construed to prevent—
(I) the sponsor from charging the annual enrollment fee (except in the case of a transitional assistance eligible individual); and
(II) the pharmacy dispensing the covered discount card drug, from imposing a charge (consistent with the negotiated price) for the covered discount card drug dispensed, reduced by the amount of any transitional assistance made available.
(D) Inapplicability of medicaid best price rules
The prices negotiated from drug manufacturers for covered discount card drugs under an endorsed discount card program under this section shall (notwithstanding any other provision of law) not be taken into account for the purposes of establishing the best price under
(2) Reduction of medication errors and adverse drug interactions
Each endorsed discount card program shall implement a system to reduce the likelihood of medication errors and adverse drug interactions and to improve medication use.
(f) Eligibility procedures for endorsed programs and transitional assistance
(1) Determinations
(A) Procedures
The determination of whether an individual is a discount card eligible individual or a transitional assistance eligible individual or a special transitional assistance eligible individual (as defined in subsection (b)) shall be determined under procedures specified by the Secretary consistent with this subsection.
(B) Income and family size determinations
For purposes of this section, the Secretary shall define the terms "income" and "family size" and shall specify the methods and period for which they are determined. If under such methods income or family size is determined based on the income or family size for prior periods of time, the Secretary shall permit (whether through a process of reconsideration or otherwise) an individual whose income or family size has changed to elect to have eligibility for transitional assistance determined based on income or family size for a more recent period.
(2) Use of self-certification for transitional assistance
(A) In general
Under the procedures specified under paragraph (1)(A) an individual who wishes to be treated as a transitional assistance eligible individual or a special transitional assistance eligible individual under this section (or another qualified person on such individual's behalf) shall certify on the enrollment form under subsection (c)(1)(B) (or similar form specified by the Secretary), through a simplified means specified by the Secretary and under penalty of perjury or similar sanction for false statements, as to the amount of the individual's income, family size, and individual's prescription drug coverage (if any) insofar as they relate to eligibility to be a transitional assistance eligible individual or a special transitional assistance eligible individual. Such certification shall be deemed as consent to verification of respective eligibility under paragraph (3). A certification under this paragraph may be provided before, on, or after the time of enrollment under an endorsed program.
(B) Treatment of self-certification
The Secretary shall treat a certification under subparagraph (A) that is verified under paragraph (3) as a determination that the individual involved is a transitional assistance eligible individual or special transitional assistance eligible individual (as the case may be) for the entire period of the enrollment of the individual in any endorsed program.
(3) Verification
(A) In general
The Secretary shall establish methods (which may include the use of sampling and the use of information described in subparagraph (B)) to verify eligibility for individuals who seek to enroll in an endorsed program and for individuals who provide a certification under paragraph (2).
(B) Information described
The information described in this subparagraph is as follows:
(i) Medicaid-related information
Information on eligibility under subchapter XIX and provided to the Secretary under arrangements between the Secretary and States in order to verify the eligibility of individuals who seek to enroll in an endorsed program and of individuals who provide certification under paragraph (2).
(ii) Social security information
Financial information made available to the Secretary under arrangements between the Secretary and the Commissioner of Social Security in order to verify the eligibility of individuals who provide such certification.
(iii) Information from Secretary of the Treasury
Financial information made available to the Secretary under section 6103(l)(19) of the Internal Revenue Code of 1986 in order to verify the eligibility of individuals who provide such certification.
(C) Verification in cases of medicaid enrollees
(i) In general
Nothing in this section shall be construed as preventing the Secretary from finding that a discount card eligible individual meets the income requirements under subsection (b)(2)(A) if the individual is within a category of discount card eligible individuals who are enrolled under subchapter XIX (such as qualified medicare beneficiaries (QMBs), specified low-income medicare beneficiaries (SLMBs), and certain qualified individuals (QI–1s)).
(ii) Availability of information for verification purposes
As a condition of provision of Federal financial participation to a State that is one of the 50 States or the District of Columbia under subchapter XIX, for purposes of carrying out this section, the State shall provide the information it submits to the Secretary relating to such subchapter in a manner specified by the Secretary that permits the Secretary to identify individuals who are described in subsection (b)(1)(B) or are transitional assistance eligible individuals or special transitional assistance eligible individuals.
(4) Reconsideration
(A) In general
The Secretary shall establish a process under which a discount card eligible individual, who is determined through the certification and verification methods under paragraphs (2) and (3) not to be a transitional assistance eligible individual or a special transitional assistance eligible individual, may request a reconsideration of the determination.
(B) Contract authority
The Secretary may enter into a contract to perform the reconsiderations requested under subparagraph (A).
(C) Communication of results
Under the process under subparagraph (A) the results of such reconsideration shall be communicated to the individual and the prescription drug card sponsor involved.
(g) Transitional assistance
(1) Provision of transitional assistance
An individual who is a transitional assistance eligible individual (as determined under this section) and who is enrolled with an endorsed program is entitled—
(A) to have payment made of any annual enrollment fee charged under subsection (c)(2) for enrollment under the program; and
(B) to have payment made, up to the amount specified in paragraph (2), under such endorsed program of 90 percent (or 95 percent in the case of a special transitional assistance eligible individual) of the costs incurred for covered discount card drugs obtained through the program taking into account the negotiated price (if any) for the drug under the program.
(2) Limitation on dollar amount
(A) In general
Subject to subparagraph (B), the amount specified in this paragraph for a transitional assistance eligible individual—
(i) for costs incurred during 2004, is $600; or
(ii) for costs incurred during 2005, is—
(I) $600, plus
(II) except as provided in subparagraph (E), the amount by which the amount available under this paragraph for 2004 for that individual exceeds the amount of payment made under paragraph (1)(B) for that individual for costs incurred during 2004.
(B) Proration
(i) In general
In the case of an individual not described in clause (ii) with respect to a year, the Secretary may prorate the amount specified in subparagraph (A) for the balance of the year involved in a manner specified by the Secretary.
(ii) Individual described
An individual described in this clause is a transitional assistance eligible individual who—
(I) with respect to 2004, enrolls in an endorsed program, and provides a certification under subsection (f)(2), before the initial implementation date of the program under this section; and
(II) with respect to 2005, is enrolled in an endorsed program, and has provided such a certification, before February 1, 2005.
(C) Accounting for available balances in cases of changes in program enrollment
In the case of a transitional assistance eligible individual who changes the endorsed discount card program in which the individual is enrolled under this section, the Secretary shall provide a process under which the Secretary provides to the sponsor of the endorsed program in which the individual enrolls information concerning the balance of amounts available on behalf of the individual under this paragraph.
(D) Limitation on use of funds
Pursuant to subsection (a)(2)(C), no assistance shall be provided under paragraph (1)(B) with respect to covered discount card drugs dispensed after December 31, 2005.
(E) No rollover permitted in case of voluntary disenrollment
Except in such exceptional cases as the Secretary may provide, in the case of a transitional assistance eligible individual who voluntarily disenrolls from an endorsed plan, the provisions of subclause (II) of subparagraph (A)(ii) shall not apply.
(3) Payment
The Secretary shall provide a method for the reimbursement of prescription drug card sponsors for assistance provided under this subsection.
(4) Coverage of coinsurance
(A) Waiver permitted by pharmacy
Nothing in this section shall be construed as precluding a pharmacy from reducing or waiving the application of coinsurance imposed under paragraph (1)(B) in accordance with
(B) Optional payment of coinsurance by State
(i) In general
The Secretary shall establish an arrangement under which a State may provide for payment of some or all of the coinsurance under paragraph (1)(B) for some or all enrollees in the State, as specified by the State under the arrangement. Insofar as such a payment arrangement is made with respect to an enrollee, the amount of the coinsurance shall be paid directly by the State to the pharmacy involved.
(ii) No Federal matching available under medicaid or SCHIP
Expenditures made by a State for coinsurance described in clause (i) shall not be treated as State expenditures for purposes of Federal matching payments under subchapter XIX or XXI.
(iii) Not treated as medicare cost-sharing
Coinsurance described in paragraph (1)(B) shall not be treated as coinsurance under this subchapter for purposes of
(C) Treatment of coinsurance
The amount of any coinsurance imposed under paragraph (1)(B), whether paid or waived under this paragraph, shall not be taken into account in applying the limitation in dollar amount under paragraph (2).
(5) Ensuring access to transitional assistance for qualified residents of long-term care facilities and American Indians
(A) Residents of long-term care facilities
The Secretary shall establish procedures and may waive requirements of this section as necessary to negotiate arrangements with sponsors to provide arrangements with pharmacies that support long-term care facilities in order to ensure access to transitional assistance for transitional assistance eligible individuals who reside in long-term care facilities.
(B) American Indians
The Secretary shall establish procedures and may waive requirements of this section to ensure that, for purposes of providing transitional assistance, pharmacies operated by the Indian Health Service, Indian tribes and tribal organizations, and urban Indian organizations (as defined in
(6) No impact on benefits under other programs
The availability of negotiated prices or transitional assistance under this section shall not be treated as benefits or otherwise taken into account in determining an individual's eligibility for, or the amount of benefits under, any other Federal program.
(7) Disregard for purposes of part C
Nonuniformity of benefits resulting from the implementation of this section (including the provision or nonprovision of transitional assistance and the payment or waiver of any enrollment fee under this section) shall not be taken into account in applying
(h) Qualification of prescription drug card sponsors and endorsement of discount card programs; beneficiary protections
(1) Prescription drug card sponsor and qualifications
(A) Prescription drug card sponsor and sponsor defined
For purposes of this section, the terms "prescription drug card sponsor" and "sponsor" mean any nongovernmental entity that the Secretary determines to be appropriate to offer an endorsed discount card program under this section, which may include—
(i) a pharmaceutical benefit management company;
(ii) a wholesale or retail pharmacy delivery system;
(iii) an insurer (including an insurer that offers medicare supplemental policies under
(iv) an organization offering a plan under part C; or
(v) any combination of the entities described in clauses (i) through (iv).
(B) Administrative qualifications
Each endorsed discount card program shall be operated directly, or through arrangements with an affiliated organization (or organizations), by one or more entities that have demonstrated experience and expertise in operating such a program or a similar program and that meets such business stability and integrity requirements as the Secretary may specify.
(C) Accounting for transitional assistance
The sponsor of an endorsed discount card program shall have arrangements satisfactory to the Secretary to account for the assistance provided under subsection (g) on behalf of transitional assistance eligible individuals.
(2) Applications for program endorsement
(A) Submission
Each prescription drug card sponsor that seeks endorsement of a prescription drug discount card program under this section shall submit to the Secretary, at such time and in such manner as the Secretary may specify, an application containing such information as the Secretary may require.
(B) Approval; compliance with applicable requirements
The Secretary shall review the application submitted under subparagraph (A) and shall determine whether to endorse the prescription drug discount card program. The Secretary may not endorse such a program unless—
(i) the program and prescription drug card sponsor offering the program comply with the applicable requirements under this section; and
(ii) the sponsor has entered into a contract with the Secretary to carry out such requirements.
(C) Termination of endorsement and contracts
An endorsement of an endorsed program and a contract under subparagraph (B) shall be for the duration of the program under this section (including any transition applicable under subsection (a)(2)(C)(ii)), except that the Secretary may, with notice and for cause (as defined by the Secretary), terminate such endorsement and contract.
(D) Ensuring choice of programs
(i) In general
The Secretary shall ensure that there is available to each discount card eligible individual a choice of at least 2 endorsed programs (each offered by a different sponsor).
(ii) Limitation on number
The Secretary may limit (but not below 2) the number of sponsors in a State that are awarded contracts under this paragraph.
(3) Service area encompassing entire States
Except as provided in paragraph (9), if a prescription drug card sponsor that offers an endorsed program enrolls in the program individuals residing in any part of a State, the sponsor must permit any discount card eligible individual residing in any portion of the State to enroll in the program.
(4) Savings to medicare beneficiaries
Each prescription drug card sponsor that offers an endorsed discount card program shall pass on to discount card eligible individuals enrolled in the program negotiated prices on covered discount card drugs, including discounts negotiated with pharmacies and manufacturers, to the extent disclosed under subsection (i)(1).
(5) Grievance mechanism
Each prescription drug card sponsor shall provide meaningful procedures for hearing and resolving grievances between the sponsor (including any entity or individual through which the sponsor carries out the endorsed discount card program) and enrollees in endorsed discount card programs of the sponsor under this section in a manner similar to that required under
(6) Confidentiality of enrollee records
(A) In general
For purposes of the program under this section, the operations of an endorsed program are covered functions and a prescription drug card sponsor is a covered entity for purposes of applying part C of subchapter XI and all regulatory provisions promulgated thereunder, including regulations (relating to privacy) adopted pursuant to the authority of the Secretary under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (
(B) Waiver authority
In order to promote participation of sponsors in the program under this section, the Secretary may waive such relevant portions of regulations relating to privacy referred to in subparagraph (A), for such appropriate, limited period of time, as the Secretary specifies.
(7) Limitation on provision and marketing of products and services
The sponsor of an endorsed discount card program—
(A) may provide under the program—
(i) a product or service only if the product or service is directly related to a covered discount card drug; or
(ii) a discount price for nonprescription drugs; and
(B) may, to the extent otherwise permitted under paragraph (6) (relating to application of HIPAA requirements), market a product or service under the program only if the product or service is directly related to—
(i) a covered discount card drug; or
(ii) a drug described in subparagraph (A)(ii) and the marketing consists of information on the discounted price made available for the drug involved.
(8) Additional protections
Each endorsed discount card program shall meet such additional requirements as the Secretary identifies to protect and promote the interest of discount card eligible individuals, including requirements that ensure that discount card eligible individuals enrolled in endorsed discount card programs are not charged more than the lower of the price based on negotiated prices or the usual and customary price.
(9) Special rules for certain organizations
(A) In general
In the case of an organization that is offering a plan under part C or enrollment under a reasonable cost reimbursement contract under
(B) Special rules
The special rules under this subparagraph are as follows:
(i) Limitation on enrollment
The sponsor limits enrollment under this section under the endorsed discount card program to discount card eligible individuals who are enrolled in the part C plan involved or under the reasonable cost reimbursement contract involved and is not required nor permitted to enroll other individuals under such program.
(ii) Pharmacy access
Pharmacy access requirements under subsection (e)(1)(B) are deemed to be met if the access is made available through a pharmacy network (and not only through mail order) and the network used by the sponsor is approved by the Secretary.
(iii) Sponsor requirements
The Secretary may waive the application of such requirements for a sponsor as the Secretary determines to be duplicative or to conflict with a requirement of the organization under part C or
(i) Disclosure and oversight
(1) Disclosure
Each prescription drug card sponsor offering an endorsed discount card program shall disclose to the Secretary (in a manner specified by the Secretary) information relating to program performance, use of prescription drugs by discount card eligible individuals enrolled in the program, the extent to which negotiated price concessions described in subsection (e)(1)(A)(ii) made available to the entity by a manufacturer are passed through to enrollees through pharmacies or otherwise, and such other information as the Secretary may specify. The provisions of
(2) Oversight; audit and inspection authority
The Secretary shall provide appropriate oversight to ensure compliance of endorsed discount card programs and their sponsors with the requirements of this section. The Secretary shall have the right to audit and inspect any books and records of a prescription discount card sponsor (and of any affiliated organization referred to in subsection (h)(1)(B)) that pertain to the endorsed discount card program under this section, including amounts payable to the sponsor under this section.
(3) Sanctions for abusive practices
The Secretary may implement intermediate sanctions or may revoke the endorsement of a program offered by a sponsor under this section if the Secretary determines that the sponsor or the program no longer meets the applicable requirements of this section or that the sponsor has engaged in false or misleading marketing practices. The Secretary may impose a civil money penalty in an amount not to exceed $10,000 for conduct that a party knows or should know is a violation of this section. The provisions of
(j) Treatment of territories
(1) In general
The Secretary may waive any provision of this section (including subsection (h)(2)(D)) in the case of a resident of a State (other than the 50 States and the District of Columbia) insofar as the Secretary determines it is necessary to secure access to negotiated prices for discount card eligible individuals (or, at the option of the Secretary, individuals described in subsection (b)(1)(A)(i)).
(2) Transitional assistance
(A) In general
In the case of a State, other than the 50 States and the District of Columbia, if the State establishes a plan described in subparagraph (B) (for providing transitional assistance with respect to the provision of prescription drugs to some or all individuals residing in the State who are described in subparagraph (B)(i)), the Secretary shall pay to the State for the entire period of the operation of this section an amount equal to the amount allotted to the State under subparagraph (C).
(B) Plan
The plan described in this subparagraph is a plan that—
(i) provides transitional assistance with respect to the provision of covered discount card drugs to some or all individuals who are entitled to benefits under part A or enrolled under part B, who reside in the State, and who have income below 135 percent of the poverty line; and
(ii) assures that amounts received by the State under this paragraph are used only for such assistance.
(C) Allotment limit
The amount described in this subparagraph for a State is equal to $35,000,000 multiplied by the ratio (as estimated by the Secretary) of—
(i) the number of individuals who are entitled to benefits under part A or enrolled under part B and who reside in the State (as determined by the Secretary as of July 1, 2003), to
(ii) the sum of such numbers for all States to which this paragraph applies.
(D) Continued availability of funds
Amounts made available to a State under this paragraph which are not used under this paragraph shall be added to the amount available to that State for purposes of carrying out
(k) Funding
(1) Establishment of Transitional Assistance Account
(A) In general
There is created within the Federal Supplementary Medical Insurance Trust Fund established by
(B) Funds
The Account shall consist of such gifts and bequests as may be made as provided in
(C) Separate from rest of Trust Fund
Funds provided under this subsection to the Account shall be kept separate from all other funds within the Federal Supplementary Medical Insurance Trust Fund, but shall be invested, and such investments redeemed, in the same manner as all other funds and investments within such Trust Fund.
(2) Payments from account
(A) In general
The Managing Trustee shall pay from time to time from the Account such amounts as the Secretary certifies are necessary to make payments for transitional assistance provided under subsections (g) and (j)(2).
(B) Treatment in relation to part B premium
Amounts payable from the Account shall not be taken into account in computing actuarial rates or premium amounts under
(3) Appropriations to cover benefits
There are appropriated to the Account in a fiscal year, out of any moneys in the Treasury not otherwise appropriated, an amount equal to the payments made from the Account in the year.
(4) For administrative expenses
There are authorized to be appropriated to the Secretary such sums as may be necessary to carry out the Secretary's responsibilities under this section.
(5) Transfer of any remaining balance to Medicare Prescription Drug Account
Any balance remaining in the Account after the Secretary determines that funds in the Account are no longer necessary to carry out the program under this section shall be transferred and deposited into the Medicare Prescription Drug Account under
(6) Construction
Nothing in this section shall be construed as authorizing the Secretary to provide for payment (other than payment of an enrollment fee on behalf of a transitional assistance eligible individual under subsection (g)(1)(A)) to a sponsor for administrative expenses incurred by the sponsor in carrying out this section (including in administering the transitional assistance provisions of subsections (f) and (g)).
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–31, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (f)(3)(B)(iii), is classified generally to Title 26, Internal Revenue Code.
Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (h)(6)(A), is section 264(c) of
Statutory Notes and Related Subsidiaries
Rules for Implementation
"(1) In promulgating regulations pursuant to subsection (a)(2)(B) of such section 1860D–31 [
"(A) section 1871(a)(3) of the Social Security Act (
"(B)
"(C)
"(2) Section 1857(c)(5) of the Social Security Act (
"(3) The administration of such program shall be made without regard to
"(4)(A) There shall be no judicial review of a determination not to endorse, or enter into a contract, with a prescription drug card sponsor under section 1860D–31 of the Social Security Act.
"(B) In the case of any order issued to enjoin any provision of section 1860D–31 of the Social Security Act (or of [sic] any provision of this section [amending
1 See References in Text note below.
subpart 5—definitions and miscellaneous provisions
§1395w–151. Definitions; treatment of references to provisions in part C
(a) Definitions
For purposes of this part:
(1) Basic prescription drug coverage
The term "basic prescription drug coverage" is defined in
(2) Covered part D drug
The term "covered part D drug" is defined in
(3) Creditable prescription drug coverage
The term "creditable prescription drug coverage" has the meaning given such term in
(4) Part D eligible individual
The term "part D eligible individual" has the meaning given such term in
(5) Fallback prescription drug plan
The term "fallback prescription drug plan" has the meaning given such term in
(6) Initial coverage limit
The term "initial coverage limit" means such limit as established under
(7) Insurance risk
The term "insurance risk" means, with respect to a participating pharmacy, risk of the type commonly assumed only by insurers licensed by a State and does not include payment variations designed to reflect performance-based measures of activities within the control of the pharmacy, such as formulary compliance and generic drug substitution.
(8) MA plan
The term "MA plan" has the meaning given such term in
(9) MA–PD plan
The term "MA–PD plan" has the meaning given such term in
(10) Medicare Prescription Drug Account
The term "Medicare Prescription Drug Account" means the Account created under
(11) PDP approved bid
The term "PDP approved bid" has the meaning given such term in
(12) PDP region
The term "PDP region" means such a region as provided under
(13) PDP sponsor
The term "PDP sponsor" means a nongovernmental entity that is certified under this part as meeting the requirements and standards of this part for such a sponsor.
(14) Prescription drug plan
The term "prescription drug plan" means prescription drug coverage that is offered—
(A) under a policy, contract, or plan that has been approved under
(B) by a PDP sponsor pursuant to, and in accordance with, a contract between the Secretary and the sponsor under
(15) Qualified prescription drug coverage
The term "qualified prescription drug coverage" is defined in
(16) Standard prescription drug coverage
The term "standard prescription drug coverage" is defined in
(17) State Pharmaceutical Assistance Program
The term "State Pharmaceutical Assistance Program" has the meaning given such term in
(18) Subsidy eligible individual
The term "subsidy eligible individual" has the meaning given such term in
(b) Application of part C provisions under this part
For purposes of applying provisions of part C under this part with respect to a prescription drug plan and a PDP sponsor, unless otherwise provided in this part such provisions shall be applied as if—
(1) any reference to an MA plan included a reference to a prescription drug plan;
(2) any reference to an MA organization or a provider-sponsored organization included a reference to a PDP sponsor;
(3) any reference to a contract under
(4) any reference to part C included a reference to this part; and
(5) any reference to an election period under
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–41, as added
Editorial Notes
References in Text
Amendments
2022—Subsec. (a)(6).
1 See References in Text note below.
§1395w–152. Miscellaneous provisions
(a) Access to coverage in territories
The Secretary may waive such requirements of this part, including
(b) Application of demonstration authority
The provisions of section 402 of the Social Security Amendments of 1967 (
(c) Coverage gap rebate for 2010
(1) In general
In the case of an individual described in subparagraphs (A) through (D) of
(2) Limitation
The Secretary shall provide only 1 payment under this subsection with respect to any individual.
(d) Treatment of certain complaints for purposes of quality or performance assessment
In conducting a quality or performance assessment of a PDP sponsor, the Secretary shall develop or utilize existing screening methods for reviewing and considering complaints that are received from enrollees in a prescription drug plan offered by such PDP sponsor and that are complaints regarding the lack of access by the individual to prescription drugs due to a drug management program for at-risk beneficiaries.
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–42, as added
Editorial Notes
References in Text
Section 402 of the Social Security Amendments of 1967, referred to in subsec. (b), is section 402 of
Amendments
2016—Subsec. (d).
2010—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Amendment by
§1395w–153. Condition for coverage of drugs under this part
(a) In general
In order for coverage to be available under this part for covered part D drugs (as defined in
(1) participate in—
(A) for 2011 through 2024, the Medicare coverage gap discount program under
(B) for 2025 and each subsequent year, the manufacturer discount program under
(2) have entered into and have in effect—
(A) for 2011 through 2024, an agreement described in subsection (b) of
(B) for 2025 and each subsequent year, an agreement described in subsection (b) of
(3) have entered into and have in effect, under terms and conditions specified by the Secretary, a contract with a third party that the Secretary has entered into a contract with under subsection (d)(3) of
(b) Effective date
Paragraphs (1)(A), (2)(A), and (3) of subsection (a) shall apply to covered part D drugs dispensed under this part on or after January 1, 2011, and before January 1, 2025, and paragraphs (1)(B) and (2)(B) of such subsection shall apply to covered part D drugs dispensed under this part on or after January 1, 2025.
(c) Authorizing coverage for drugs not covered under agreements
(1) In general
Subject to paragraph (2), subsection (a) shall not apply to the dispensing of a covered part D drug if—
(A) the Secretary has made a determination that the availability of the drug is essential to the health of beneficiaries under this part; or
(B) the Secretary determines that in the period beginning on January 1, 2011, and 1 December 31, 2011, there were extenuating circumstances.
(2) Exception
Paragraph (1)(A) shall not apply to a covered part D drug of a manufacturer for any period described in section 5000D(c)(1) of the Internal Revenue Code of 1986 with respect to the manufacturer.
(d) Definition of manufacturer
In this section, the term "manufacturer" has the meaning given such term in
(Aug. 14, 1935, ch. 531, title XVIII, §1860D–43, as added
Editorial Notes
References in Text
Section 5000D(c)(1) of the Internal Revenue Code of 1986, referred to in subsec. (c)(2), is classified to
Amendments
2022—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (b).
Subsec. (c).
2010—Subsec. (b).
Subsec. (c)(2).
1 So in original. Probably should be followed by "ending on".
§1395w–154. Improved Medicare prescription drug plan and MA–PD plan complaint system
(a) In general
The Secretary shall develop and maintain a complaint system, that is widely known and easy to use, to collect and maintain information on MA–PD plan and prescription drug plan complaints that are received (including by telephone, letter, e-mail, or any other means) by the Secretary (including by a regional office of the Department of Health and Human Services, the Medicare Beneficiary Ombudsman, a subcontractor, a carrier, a fiscal intermediary, and a Medicare administrative contractor under
(b) Model electronic complaint form
The Secretary shall develop a model electronic complaint form to be used for reporting plan complaints under the system. Such form shall be prominently displayed on the front page of the Medicare.gov Internet website and on the Internet website of the Medicare Beneficiary Ombudsman.
(c) Annual reports by the Secretary
The Secretary shall submit to Congress annual reports on the system. Such reports shall include an analysis of the number and types of complaints reported in the system, geographic variations in such complaints, the timeliness of agency or plan responses to such complaints, and the resolution of such complaints.
(d) Definitions
In this section:
(1) MA–PD plan
The term "MA–PD plan" has the meaning given such term in
(2) Prescription drug plan
The term "prescription drug plan" has the meaning given such term in
(3) Secretary
The term "Secretary" means the Secretary of Health and Human Services.
(4) System
The term "system" means the plan complaint system developed and maintained under subsection (a).
(
Editorial Notes
Codification
Section was enacted as part of the Patient Protection and Affordable Care Act, and not as part of the Social Security Act which comprises this chapter.
Part E—Miscellaneous Provisions
Editorial Notes
Codification
§1395x. Definitions
For purposes of this subchapter—
(a) Spell of illness
The term "spell of illness" with respect to any individual means a period of consecutive days—
(1) beginning with the first day (not included in a previous spell of illness) (A) on which such individual is furnished inpatient hospital services, inpatient critical access hospital services or extended care services, and (B) which occurs in a month for which he is entitled to benefits under part A, and
(2) ending with the close of the first period of 60 consecutive days thereafter on each of which he is neither an inpatient of a hospital or critical access hospital nor an inpatient of a facility described in
(b) Inpatient hospital services
The term "inpatient hospital services" means the following items and services furnished to an inpatient of a hospital and (except as provided in paragraph (3)) by the hospital—
(1) bed and board;
(2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients; and
(3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrangements;
excluding, however—
(4) medical or surgical services provided by a physician, resident, or intern, services described by subsection (s)(2)(K), certified nurse-midwife services, qualified psychologist services, and services of a certified registered nurse anesthetist; and
(5) the services of a private-duty nurse or other private-duty attendant.
Paragraph (4) shall not apply to services provided in a hospital by—
(6) an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or, in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association, or in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of podiatry, approved by the Council on Podiatric Medical Education of the American Podiatric Medical Association; or
(7) a physician where the hospital has a teaching program approved as specified in paragraph (6), if (A) the hospital elects to receive any payment due under this subchapter for reasonable costs of such services, and (B) all physicians in such hospital agree not to bill charges for professional services rendered in such hospital to individuals covered under the insurance program established by this subchapter.
(c) Inpatient psychiatric hospital services
The term "inpatient psychiatric hospital services" means inpatient hospital services furnished to an inpatient of a psychiatric hospital.
(d) Supplier
The term "supplier" means, unless the context otherwise requires, a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services under this subchapter.
(e) Hospital
The term "hospital" (except for purposes of
(1) is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons;
(2) maintains clinical records on all patients;
(3) has bylaws in effect with respect to its staff of physicians;
(4) has a requirement that every patient with respect to whom payment may be made under this subchapter must be under the care of a physician, except that a patient receiving qualified psychologist services (as defined in subsection (ii)) may be under the care of a clinical psychologist with respect to such services to the extent permitted under State law;
(5) provides 24-hour nursing service rendered or supervised by a registered professional nurse, and has a licensed practical nurse or registered professional nurse on duty at all times; except that until January 1, 1979, the Secretary is authorized to waive the requirement of this paragraph for any one-year period with respect to any institution, insofar as such requirement relates to the provision of twenty-four-hour nursing service rendered or supervised by a registered professional nurse (except that in any event a registered professional nurse must be present on the premises to render or supervise the nursing service provided, during at least the regular daytime shift), where immediately preceding such one-year period he finds that—
(A) such institution is located in a rural area and the supply of hospital services in such area is not sufficient to meet the needs of individuals residing therein,
(B) the failure of such institution to qualify as a hospital would seriously reduce the availability of such services to such individuals, and
(C) such institution has made and continues to make a good faith effort to comply with this paragraph, but such compliance is impeded by the lack of qualified nursing personnel in such area;
(6)(A) has in effect a hospital utilization review plan which meets the requirements of subsection (k) and (B) has in place a discharge planning process that meets the requirements of subsection (ee);
(7) in the case of an institution in any State in which State or applicable local law provides for the licensing of hospitals, (A) is licensed pursuant to such law or (B) is approved, by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing;
(8) has in effect an overall plan and budget that meets the requirements of subsection (z); and
(9) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution.
For purposes of subsection (a)(2), such term includes any institution which meets the requirements of paragraph (1) of this subsection. For purposes of
(A) with respect to the requirements for nursing services applicable after December 31, 1978, such requirements shall provide for temporary waiver of the requirements, for such period as the Secretary deems appropriate, where (i) the facility's failure to fully comply with the requirements is attributable to a temporary shortage of qualified nursing personnel in the area in which the facility is located, (ii) a registered professional nurse is present on the premises to render or supervise the nursing service provided during at least the regular daytime shift, and (iii) the Secretary determines that the employment of such nursing personnel as are available to the facility during such temporary period will not adversely affect the health and safety of patients;
(B) with respect to the health and safety requirements promulgated under paragraph (9), such requirements shall be applied by the Secretary to a facility herein defined in such manner as to assure that personnel requirements take into account the availability of technical personnel and the educational opportunities for technical personnel in the area in which such facility is located, and the scope of services rendered by such facility; and the Secretary, by regulations, shall provide for the continued participation of such a facility where such personnel requirements are not fully met, for such period as the Secretary determines that (i) the facility is making good faith efforts to fully comply with the personnel requirements, (ii) the employment by the facility of such personnel as are available to the facility will not adversely affect the health and safety of patients, and (iii) if the Secretary has determined that because of the facility's waiver under this subparagraph the facility should limit its scope of services in order not to adversely affect the health and safety of the facility's patients, the facility is so limiting the scope of services it provides; and
(C) with respect to the fire and safety requirements promulgated under paragraph (9), the Secretary (i) may waive, for such period as he deems appropriate, specific provisions of such requirements which if rigidly applied would result in unreasonable hardship for such a facility and which, if not applied, would not jeopardize the health and safety of patients, and (ii) may accept a facility's compliance with all applicable State codes relating to fire and safety in lieu of compliance with the fire and safety requirements promulgated under paragraph (9), if he determines that such State has in effect fire and safety codes, imposed by State law, which adequately protect patients.
The term "hospital" does not include, unless the context otherwise requires, a critical access hospital (as defined in subsection (mm)(1)) or a rural emergency hospital (as defined in subsection (kkk)(2)).
(f) Psychiatric hospital
The term "psychiatric hospital" means an institution which—
(1) is primarily engaged in providing, by or under the supervision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons;
(2) satisfies the requirements of paragraphs (3) through (9) of subsection (e);
(3) maintains clinical records on all patients and maintains such records as the Secretary finds to be necessary to determine the degree and intensity of the treatment provided to individuals entitled to hospital insurance benefits under part A; and
(4) meets such staffing requirements as the Secretary finds necessary for the institution to carry out an active program of treatment for individuals who are furnished services in the institution.
In the case of an institution which satisfies paragraphs (1) and (2) of the preceding sentence and which contains a distinct part which also satisfies paragraphs (3) and (4) of such sentence, such distinct part shall be considered to be a "psychiatric hospital".
(g) Outpatient occupational therapy services
The term "outpatient occupational therapy services" has the meaning given the term "outpatient physical therapy services" in subsection (p), except that "occupational" shall be substituted for "physical" each place it appears therein.
(h) Extended care services
The term "extended care services" means the following items and services furnished to an inpatient of a skilled nursing facility and (except as provided in paragraphs (3), (6), and (7)) by such skilled nursing facility—
(1) nursing care provided by or under the supervision of a registered professional nurse;
(2) bed and board in connection with the furnishing of such nursing care;
(3) physical or occupational therapy or speech-language pathology services furnished by the skilled nursing facility or by others under arrangements with them made by the facility;
(4) medical social services;
(5) such drugs, biologicals, supplies, appliances, and equipment, furnished for use in the skilled nursing facility, as are ordinarily furnished by such facility for the care and treatment of inpatients;
(6) medical services provided by an intern or resident-in-training of a hospital with which the facility has in effect a transfer agreement (meeting the requirements of subsection (l)), under a teaching program of such hospital approved as provided in the last sentence of subsection (b), and other diagnostic or therapeutic services provided by a hospital with which the facility has such an agreement in effect; and
(7) such other services necessary to the health of the patients as are generally provided by skilled nursing facilities, or by others under arrangements with them made by the facility;
excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital.
(i) Post-hospital extended care services
The term "post-hospital extended care services" means extended care services furnished an individual after transfer from a hospital in which he was an inpatient for not less than 3 consecutive days before his discharge from the hospital in connection with such transfer. For purposes of the preceding sentence, items and services shall be deemed to have been furnished to an individual after transfer from a hospital, and he shall be deemed to have been an inpatient in the hospital immediately before transfer therefrom, if he is admitted to the skilled nursing facility (A) within 30 days after discharge from such hospital, or (B) within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 30 days after discharge from a hospital; and an individual shall be deemed not to have been discharged from a skilled nursing facility if, within 30 days after discharge therefrom, he is admitted to such facility or any other skilled nursing facility.
(j) Skilled nursing facility
The term "skilled nursing facility" has the meaning given such term in
(k) Utilization review
A utilization review plan of a hospital or skilled nursing facility shall be considered sufficient if it is applicable to services furnished by the institution to individuals entitled to insurance benefits under this subchapter and if it provides—
(1) for the review, on a sample or other basis, of admissions to the institution, the duration of stays therein, and the professional services (including drugs and biologicals) furnished, (A) with respect to the medical necessity of the services, and (B) for the purpose of promoting the most efficient use of available health facilities and services;
(2) for such review to be made by either (A) a staff committee of the institution composed of two or more physicians (of which at least two must be physicians described in subsection (r)(1) of this section), with or without participation of other professional personnel, or (B) a group outside the institution which is similarly composed and (i) which is established by the local medical society and some or all of the hospitals and skilled nursing facilities in the locality, or (ii) if (and for as long as) there has not been established such a group which serves such institution, which is established in such other manner as may be approved by the Secretary;
(3) for such review, in each case of inpatient hospital services or extended care services furnished to such an individual during a continuous period of extended duration, as of such days of such period (which may differ for different classes of cases) as may be specified in regulations, with such review to be made as promptly as possible, after each day so specified, and in no event later than one week following such day; and
(4) for prompt notification to the institution, the individual, and his attending physician of any finding (made after opportunity for consultation to such attending physician) by the physician members of such committee or group that any further stay in the institution is not medically necessary.
The review committee must be composed as provided in clause (B) of paragraph (2) rather than as provided in clause (A) of such paragraph in the case of any hospital or skilled nursing facility where, because of the small size of the institution, or (in the case of a skilled nursing facility) because of lack of an organized medical staff, or for such other reason or reasons as may be included in regulations, it is impracticable for the institution to have a properly functioning staff committee for the purposes of this subsection. If the Secretary determines that the utilization review procedures established pursuant to subchapter XIX are superior in their effectiveness to the procedures required under this section, he may, to the extent that he deems it appropriate, require for purposes of this subchapter that the procedures established pursuant to subchapter XIX be utilized instead of the procedures required by this section.
(l) Agreements for transfer between skilled nursing facilities and hospitals
A hospital and a skilled nursing facility shall be considered to have a transfer agreement in effect if, by reason of a written agreement between them or (in case the two institutions are under common control) by reason of a written undertaking by the person or body which controls them, there is reasonable assurance that—
(1) transfer of patients will be effected between the hospital and the skilled nursing facility whenever such transfer is medically appropriate as determined by the attending physician; and
(2) there will be interchange of medical and other information necessary or useful in the care and treatment of individuals transferred between the institutions, or in determining whether such individuals can be adequately cared for otherwise than in either of such institutions.
Any skilled nursing facility which does not have such an agreement in effect, but which is found by a State agency (of the State in which such facility is situated) with which an agreement under
(m) Home health services
The term "home health services" means the following items and services furnished to an individual, who is under the care of a physician, a nurse practitioner or a clinical nurse specialist (as those terms are defined in subsection (aa)(5)), or a physician assistant (as defined in subsection (aa)(5)), by a home health agency or by others under arrangements with them made by such agency, under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician, a nurse practitioner, a clinical nurse specialist, or a physician assistant, which items and services are, except as provided in paragraph (7), provided on a visiting basis in a place of residence used as such individual's home—
(1) part-time or intermittent nursing care provided by or under the supervision of a registered professional nurse;
(2) physical or occupational therapy or speech-language pathology services;
(3) medical social services under the direction of a physician, a nurse practitioner, a clinical nurse specialist, or a physician assistant;
(4) to the extent permitted in regulations, part-time or intermittent services of a home health aide who has successfully completed a training program approved by the Secretary;
(5) medical supplies (including catheters, catheter supplies, ostomy bags, and supplies related to ostomy care, and a covered osteoporosis drug (as defined in subsection (kk)), but excluding other drugs and biologicals) and durable medical equipment and applicable disposable devices (as defined in
(6) in the case of a home health agency which is affiliated or under common control with a hospital, medical services provided by an intern or resident-in-training of such hospital, under a teaching program of such hospital approved as provided in the last sentence of subsection (b); and
(7) any of the foregoing items and services which are provided on an outpatient basis, under arrangements made by the home health agency, at a hospital or skilled nursing facility, or at a rehabilitation center which meets such standards as may be prescribed in regulations, and—
(A) the furnishing of which involves the use of equipment of such a nature that the items and services cannot readily be made available to the individual in such place of residence, or
(B) which are furnished at such facility while he is there to receive any such item or service described in clause (A),
but not including transportation of the individual in connection with any such item or service;
excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital and home infusion therapy (as defined in subsection (iii)(i)). For purposes of paragraphs (1) and (4), the term "part-time or intermittent services" means skilled nursing and home health aide services furnished any number of days per week as long as they are furnished (combined) less than 8 hours each day and 28 or fewer hours each week (or, subject to review on a case-by-case basis as to the need for care, less than 8 hours each day and 35 or fewer hours per week). For purposes of
(n) Durable medical equipment
The term "durable medical equipment" includes iron lungs, oxygen tents, hospital beds, and wheelchairs (which may include a power-operated vehicle that may be appropriately used as a wheelchair, but only where the use of such a vehicle is determined to be necessary on the basis of the individual's medical and physical condition and the vehicle meets such safety requirements as the Secretary may prescribe) used in the patient's home (including an institution used as his home other than an institution that meets the requirements of subsection (e)(1) of this section or
(o) Home health agency
The term "home health agency" means a public agency or private organization, or a subdivision of such an agency or organization, which—
(1) is primarily engaged in providing skilled nursing services and other therapeutic services;
(2) has policies, established by a group of professional personnel (associated with the agency or organization), including one or more physicians, nurse practitioners or clinical nurse specialists (as those terms are defined in subsection (aa)(5)), certified nurse-midwives (as defined in subsection (gg)), or physician assistants (as defined in subsection (aa)(5)) and one or more registered professional nurses, to govern the services (referred to in paragraph (1)) which it provides, and provides for supervision of such services by a physician, nurse practitioner, clinical nurse specialist, certified nurse-midwife, physician assistant, or registered professional nurse;
(3) maintains clinical records on all patients;
(4) in the case of an agency or organization in any State in which State or applicable local law provides for the licensing of agencies or organizations of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing agencies or organizations of this nature, as meeting the standards established for such licensing;
(5) has in effect an overall plan and budget that meets the requirements of subsection (z);
(6) meets the conditions of participation specified in
(7) provides the Secretary with a surety bond—
(A) in a form specified by the Secretary and in an amount that is not less than the minimum of $50,000; and
(B) that the Secretary determines is commensurate with the volume of payments to the home health agency; and
(8) meets such additional requirements (including conditions relating to bonding or establishing of escrow accounts as the Secretary finds necessary for the financial security of the program) as the Secretary finds necessary for the effective and efficient operation of the program;
except that for purposes of part A such term shall not include any agency or organization which is primarily for the care and treatment of mental diseases. The Secretary may waive the requirement of a surety bond under paragraph (7) in the case of an agency or organization that provides a comparable surety bond under State law.
(p) Outpatient physical therapy services
The term "outpatient physical therapy services" means physical therapy services furnished by a provider of services, a clinic, rehabilitation agency, or a public health agency, or by others under an arrangement with, and under the supervision of, such provider, clinic, rehabilitation agency, or public health agency to an individual as an outpatient—
(1) who is under the care of a physician (as defined in paragraph (1), (3), or (4) of subsection (r)), and
(2) with respect to whom a plan prescribing the type, amount, and duration of physical therapy services that are to be furnished such individual has been established by a physician (as so defined) or by a qualified physical therapist and is periodically reviewed by a physician (as so defined);
excluding, however—
(3) any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital; and
(4) any such service—
(A) if furnished by a clinic or rehabilitation agency, or by others under arrangements with such clinic or agency, unless such clinic or rehabilitation agency—
(i) provides an adequate program of physical therapy services for outpatients and has the facilities and personnel required for such program or required for the supervision of such a program, in accordance with such requirements as the Secretary may specify,
(ii) has policies, established by a group of professional personnel, including one or more physicians (associated with the clinic or rehabilitation agency) and one or more qualified physical therapists, to govern the services (referred to in clause (i)) it provides,
(iii) maintains clinical records on all patients,
(iv) if such clinic or agency is situated in a State in which State or applicable local law provides for the licensing of institutions of this nature, (I) is licensed pursuant to such law, or (II) is approved by the agency of such State or locality responsible for licensing institutions of this nature, as meeting the standards established for such licensing; and
(v) meets such other conditions relating to the health and safety of individuals who are furnished services by such clinic or agency on an outpatient basis, as the Secretary may find necessary, and provides the Secretary on a continuing basis with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000, or
(B) if furnished by a public health agency, unless such agency meets such other conditions relating to health and safety of individuals who are furnished services by such agency on an outpatient basis, as the Secretary may find necessary.
The term "outpatient physical therapy services" also includes physical therapy services furnished an individual by a physical therapist (in his office or in such individual's home) who meets licensing and other standards prescribed by the Secretary in regulations, otherwise than under an arrangement with and under the supervision of a provider of services, clinic, rehabilitation agency, or public health agency, if the furnishing of such services meets such conditions relating to health and safety as the Secretary may find necessary. In addition, such term includes physical therapy services which meet the requirements of the first sentence of this subsection except that they are furnished to an individual as an inpatient of a hospital or extended care facility. Nothing in this subsection shall be construed as requiring, with respect to outpatients who are not entitled to benefits under this subchapter, a physical therapist to provide outpatient physical therapy services only to outpatients who are under the care of a physician or pursuant to a plan of care established by a physician. The Secretary may waive the requirement of a surety bond under paragraph (4)(A)(v) in the case of a clinic or agency that provides a comparable surety bond under State law.
(q) Physicians' services
The term "physicians' services" means professional services performed by physicians, including surgery, consultation, and home, office, and institutional calls (but not including services described in subsection (b)(6)).
(r) Physician
The term "physician", when used in connection with the performance of any function or action, means (1) a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he performs such function or action (including a physician within the meaning of
(s) Medical and other health services
The term "medical and other health services" means any of the following items or services:
(1) physicians' services;
(2)(A) services and supplies (including drugs and biologicals which are not usually self-administered by the patient) furnished as an incident to a physician's professional service, of kinds which are commonly furnished in physicians' offices and are commonly either rendered without charge or included in the physicians' bills (or would have been so included but for the application of
(B) hospital services (including drugs and biologicals which are not usually self-administered by the patient) incident to physicians' services rendered to outpatients and partial hospitalization services or intensive outpatient services incident to such services;
(C) diagnostic services which are—
(i) furnished to an individual as an outpatient by a hospital or by others under arrangements with them made by a hospital, and
(ii) ordinarily furnished by such hospital (or by others under such arrangements) to its outpatients for the purpose of diagnostic study;
(D) outpatient physical therapy services, outpatient speech-language pathology services, and outpatient occupational therapy services;
(E) rural health clinic services and Federally qualified health center services;
(F) home dialysis supplies and equipment, self-care home dialysis support services, and institutional dialysis services and supplies, and, for items and services furnished on or after January 1, 2011, renal dialysis services (as defined in
(G) antigens (subject to quantity limitations prescribed in regulations by the Secretary) prepared by a physician, as defined in subsection (r)(1), for a particular patient, including antigens so prepared which are forwarded to another qualified person (including a rural health clinic) for administration to such patient, from time to time, by or under the supervision of another such physician;
(H)(i) services furnished pursuant to a contract under
(ii) services furnished pursuant to a risk-sharing contract under
(I) blood clotting factors, for hemophilia patients competent to use such factors to control bleeding without medical or other supervision, and items related to the administration of such factors, subject to utilization controls deemed necessary by the Secretary for the efficient use of such factors;
(J) prescription drugs used in immunosuppressive therapy furnished, to an individual who receives an organ transplant for which payment is made under this subchapter;
(K)(i) services which would be physicians' services and services described in subsections (ww)(1) and (hhh) if furnished by a physician (as defined in subsection (r)(1)) and which are performed by a physician assistant (as defined in subsection (aa)(5)) under the supervision of a physician (as so defined) and which the physician assistant is legally authorized to perform by the State in which the services are performed, and such services and supplies furnished as incident to such services as would be covered under subparagraph (A) if furnished incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services,2
(ii) services which would be physicians' services and services described in subsections (ww)(1) and (hhh) if furnished by a physician (as defined in subsection (r)(1)) and which are performed by a nurse practitioner or clinical nurse specialist (as defined in subsection (aa)(5)) working in collaboration (as defined in subsection (aa)(6)) with a physician (as defined in subsection (r)(1)) which the nurse practitioner or clinical nurse specialist is legally authorized to perform by the State in which the services are performed, and such services and supplies furnished as an incident to such services as would be covered under subparagraph (A) if furnished incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services;
(L) certified nurse-midwife services;
(M) qualified psychologist services;
(N) clinical social worker services (as defined in subsection (hh)(2));
(O) erythropoietin for dialysis patients competent to use such drug without medical or other supervision with respect to the administration of such drug, subject to methods and standards established by the Secretary by regulation for the safe and effective use of such drug, and items related to the administration of such drug;
(P) prostate cancer screening tests (as defined in subsection (oo));
(Q) an oral drug (which is approved by the Federal Food and Drug Administration) prescribed for use as an anticancer chemotherapeutic agent for a given indication, and containing an active ingredient (or ingredients), which is the same indication and active ingredient (or ingredients) as a drug which the carrier determines would be covered pursuant to subparagraph (A) or (B) if the drug could not be self-administered;
(R) colorectal cancer screening tests (as defined in subsection (pp)); and 3
(S) diabetes outpatient self-management training services (as defined in subsection (qq));
(T) an oral drug (which is approved by the Federal Food and Drug Administration) prescribed for use as an acute anti-emetic used as part of an anticancer chemotherapeutic regimen if the drug is administered by a physician (or as prescribed by a physician)—
(i) for use immediately before, at, or within 48 hours after the time of the administration of the anticancer chemotherapeutic agent; and
(ii) as a full replacement for the anti-emetic therapy which would otherwise be administered intravenously;
(U) screening for glaucoma (as defined in subsection (uu)) for individuals determined to be at high risk for glaucoma, individuals with a family history of glaucoma and individuals with diabetes;
(V) medical nutrition therapy services (as defined in subsection (vv)(1)) in the case of a beneficiary with diabetes or a renal disease who—
(i) has not received diabetes outpatient self-management training services within a time period determined by the Secretary;
(ii) is not receiving maintenance dialysis for which payment is made under
(iii) meets such other criteria determined by the Secretary after consideration of protocols established by dietitian or nutrition professional organizations;
(W) an initial preventive physical examination (as defined in subsection (ww));
(X) cardiovascular screening blood tests (as defined in subsection (xx)(1));
(Y) diabetes screening tests (as defined in subsection (yy));
(Z) intravenous immune globulin, and items and services furnished on or after January 1, 2024, related to the administration of intravenous immune globulin, for the treatment of primary immune deficiency diseases in the home (as defined in subsection (zz));
(AA) ultrasound screening for abdominal aortic aneurysm (as defined in subsection (bbb)) for an individual—
(i) who receives a referral for such an ultrasound screening as a result of an initial preventive physical examination (as defined in subsection (ww)(1));
(ii) who has not been previously furnished such an ultrasound screening under this subchapter; and
(iii) who—
(I) has a family history of abdominal aortic aneurysm; or
(II) manifests risk factors included in a beneficiary category recommended for screening by the United States Preventive Services Task Force regarding abdominal aortic aneurysms;
(BB) additional preventive services (described in subsection (ddd)(1));
(CC) items and services furnished under a cardiac rehabilitation program (as defined in subsection (eee)(1)) or under a pulmonary rehabilitation program (as defined in subsection (fff)(1));
(DD) items and services furnished under an intensive cardiac rehabilitation program (as defined in subsection (eee)(4));
(EE) kidney disease education services (as defined in subsection (ggg));
(FF) personalized prevention plan services (as defined in subsection (hhh));
(GG) home infusion therapy (as defined in subsection (iii)(1));
(HH) opioid use disorder treatment services (as defined in subsection (jjj));
(II) marriage and family therapist services (as defined in subsection (lll)(1)) and mental health counselor services (as defined in subsection (lll)(3)); and
(JJ) lymphedema compression treatment items (as defined in subsection (mmm));
(3) diagnostic X-ray tests (including tests under the supervision of a physician, furnished in a place of residence used as the patient's home, if the performance of such tests meets such conditions relating to health and safety as the Secretary may find necessary and including diagnostic mammography if conducted by a facility that has a certificate (or provisional certificate) issued under section 354 of the Public Health Service Act [
(4) X-ray, radium, and radioactive isotope therapy, including materials and services of technicians;
(5) surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations;
(6) durable medical equipment;
(7) ambulance service where the use of other methods of transportation is contraindicated by the individual's condition, but, subject to
(8) prosthetic devices (other than dental) which replace all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replacement of such devices, and including one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens;
(9) leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the patient's physical condition;
(10)(A) pneumococcal vaccine and its administration and, subject to section 4071(b) of the Omnibus Budget Reconciliation Act of 1987, influenza vaccine and its administration, and COVID–19 vaccine and its administration; and
(B) hepatitis B vaccine and its administration, furnished to an individual who is at high or intermediate risk of contracting hepatitis B (as determined by the Secretary under regulations);
(11) services of a certified registered nurse anesthetist (as defined in subsection (bb));
(12) subject to section 4072(e) of the Omnibus Budget Reconciliation Act of 1987, extra-depth shoes with inserts or custom molded shoes with inserts for an individual with diabetes, if—
(A) the physician who is managing the individual's diabetic condition (i) documents that the individual has peripheral neuropathy with evidence of callus formation, a history of pre-ulcerative calluses, a history of previous ulceration, foot deformity, or previous amputation, or poor circulation, and (ii) certifies that the individual needs such shoes under a comprehensive plan of care related to the individual's diabetic condition;
(B) the particular type of shoes are prescribed by a podiatrist or other qualified physician (as established by the Secretary); and
(C) the shoes are fitted and furnished by a podiatrist or other qualified individual (such as a pedorthist or orthotist, as established by the Secretary) who is not the physician described in subparagraph (A) (unless the Secretary finds that the physician is the only such qualified individual in the area);
(13) screening mammography (as defined in subsection (jj));
(14) screening pap smear and screening pelvic exam; and
(15) bone mass measurement (as defined in subsection (rr)).
No diagnostic tests performed in any laboratory, including a laboratory that is part of a rural health clinic, or a hospital (which, for purposes of this sentence, means an institution considered a hospital for purposes of
(16) if situated in any State in which State or applicable local law provides for licensing of establishments of this nature, (A) is licensed pursuant to such law, or (B) is approved, by the agency of such State or locality responsible for licensing establishments of this nature, as meeting the standards established for such licensing; and
(17)(A) meets the certification requirements under section 353 of the Public Health Service Act [
(B) meets such other conditions relating to the health and safety of individuals with respect to whom such tests are performed as the Secretary may find necessary.
There shall be excluded from the diagnostic services specified in paragraph (2)(C) any item or service (except services referred to in paragraph (1)) which would not be included under subsection (b) if it were furnished to an inpatient of a hospital. None of the items and services referred to in the preceding paragraphs (other than paragraphs (1) and (2)(A)) of this subsection which are furnished to a patient of an institution which meets the definition of a hospital for purposes of
(t) Drugs and biologicals
(1) The term "drugs" and the term "biologicals", except for purposes of subsection (m)(5) of this section and paragraph (2), include only such drugs (including contrast agents) and biologicals, respectively, as are included (or approved for inclusion) in the United States Pharmacopoeia, the National Formulary, or the United States Homeopathic Pharmacopoeia, or in New Drugs or Accepted Dental Remedies (except for any drugs and biologicals unfavorably evaluated therein), or as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of the hospital furnishing such drugs and biologicals for use in such hospital.
(2)(A) For purposes of paragraph (1), the term "drugs" also includes any drugs or biologicals used in an anticancer chemotherapeutic regimen for a medically accepted indication (as described in subparagraph (B)).
(B) In subparagraph (A), the term "medically accepted indication", with respect to the use of a drug, includes any use which has been approved by the Food and Drug Administration for the drug, and includes another use of the drug if—
(i) the drug has been approved by the Food and Drug Administration; and
(ii)(I) such use is supported by one or more citations which are included (or approved for inclusion) in one or more of the following compendia: the American Hospital Formulary Service-Drug Information, the American Medical Association Drug Evaluations, the United States Pharmacopoeia-Drug Information (or its successor publications), and other authoritative compendia as identified by the Secretary, unless the Secretary has determined that the use is not medically appropriate or the use is identified as not indicated in one or more such compendia, or
(II) the carrier involved determines, based upon guidance provided by the Secretary to carriers for determining accepted uses of drugs, that such use is medically accepted based on supportive clinical evidence in peer reviewed medical literature appearing in publications which have been identified for purposes of this subclause by the Secretary.
The Secretary may revise the list of compendia in clause (ii)(I) as is appropriate for identifying medically accepted indications for drugs. On and after January 1, 2010, no compendia may be included on the list of compendia under this subparagraph unless the compendia has 4 a publicly transparent process for evaluating therapies and for identifying potential conflicts of interests.
(u) Provider of services
The term "provider of services" means a hospital, critical access hospital, rural emergency hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, home health agency, hospice program, or, for purposes of section 1395f(g) and
(v) Reasonable costs
(1)(A) The reasonable cost of any services shall be the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services, and shall be determined in accordance with regulations establishing the method or methods to be used, and the items to be included, in determining such costs for various types or classes of institutions, agencies, and services; except that in any case to which paragraph (2) or (3) applies, the amount of the payment determined under such paragraph with respect to the services involved shall be considered the reasonable cost of such services. In prescribing the regulations referred to in the preceding sentence, the Secretary shall consider, among other things, the principles generally applied by national organizations or established prepayment organizations (which have developed such principles) in computing the amount of payment, to be made by persons other than the recipients of services, to providers of services on account of services furnished to such recipients by such providers. Such regulations may provide for determination of the costs of services on a per diem, per unit, per capita, or other basis, may provide for using different methods in different circumstances, may provide for the use of estimates of costs of particular items or services, may provide for the establishment of limits on the direct or indirect overall incurred costs or incurred costs of specific items or services or groups of items or services to be recognized as reasonable based on estimates of the costs necessary in the efficient delivery of needed health services to individuals covered by the insurance programs established under this subchapter, and may provide for the use of charges or a percentage of charges where this method reasonably reflects the costs. Such regulations shall (i) take into account both direct and indirect costs of providers of services (excluding therefrom any such costs, including standby costs, which are determined in accordance with regulations to be unnecessary in the efficient delivery of services covered by the insurance programs established under this subchapter) in order that, under the methods of determining costs, the necessary costs of efficiently delivering covered services to individuals covered by the insurance programs established by this subchapter will not be borne by individuals not so covered, and the costs with respect to individuals not so covered will not be borne by such insurance programs, and (ii) provide for the making of suitable retroactive corrective adjustments where, for a provider of services for any fiscal period, the aggregate reimbursement produced by the methods of determining costs proves to be either inadequate or excessive.
(B) In the case of extended care services, the regulations under subparagraph (A) shall not include provision for specific recognition of a return on equity capital.
(C) Where a hospital has an arrangement with a medical school under which the faculty of such school provides services at such hospital, an amount not in excess of the reasonable cost of such services to the medical school shall be included in determining the reasonable cost to the hospital of furnishing services—
(i) for which payment may be made under part A, but only if—
(I) payment for such services as furnished under such arrangement would be made under part A to the hospital had such services been furnished by the hospital, and
(II) such hospital pays to the medical school at least the reasonable cost of such services to the medical school, or
(ii) for which payment may be made under part B, but only if such hospital pays to the medical school at least the reasonable cost of such services to the medical school.
(D) Where (i) physicians furnish services which are either inpatient hospital services (including services in conjunction with the teaching programs of such hospital) by reason of paragraph (7) of subsection (b) or for which entitlement exists by reason of clause (II) of
(E) Such regulations may, in the case of skilled nursing facilities in any State, provide for the use of rates, developed by the State in which such facilities are located, for the payment of the cost of skilled nursing facility services furnished under the State's plan approved under subchapter XIX (and such rates may be increased by the Secretary on a class or size of institution or on a geographical basis by a percentage factor not in excess of 10 percent to take into account determinable items or services or other requirements under this subchapter not otherwise included in the computation of such State rates), if the Secretary finds that such rates are reasonably related to (but not necessarily limited to) analyses undertaken by such State of costs of care in comparable facilities in such State. Notwithstanding the previous sentence, such regulations with respect to skilled nursing facilities shall take into account (in a manner consistent with subparagraph (A) and based on patient-days of services furnished) the costs (including the costs of services required to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident eligible for benefits under this subchapter) of such facilities complying with the requirements of subsections (b), (c), and (d) of
(F) Such regulations shall require each provider of services (other than a fund) to make reports to the Secretary of information described in
(G)(i) In any case in which a hospital provides inpatient services to an individual that would constitute post-hospital extended care services if provided by a skilled nursing facility and a quality improvement organization (or, in the absence of such a qualified organization, the Secretary or such agent as the Secretary may designate) determines that inpatient hospital services for the individual are not medically necessary but post-hospital extended care services for the individual are medically necessary and such extended care services are not otherwise available to the individual (as determined in accordance with criteria established by the Secretary) at the time of such determination, payment for such services provided to the individual shall continue to be made under this subchapter at the payment rate described in clause (ii) during the period in which—
(I) such post-hospital extended care services for the individual are medically necessary and not otherwise available to the individual (as so determined),
(II) inpatient hospital services for the individual are not medically necessary, and
(III) the individual is entitled to have payment made for post-hospital extended care services under this subchapter,
except that if the Secretary determines that there is not an excess of hospital beds in such hospital and (subject to clause (iv)) there is not an excess of hospital beds in the area of such hospital, such payment shall be made (during such period) on the basis of the amount otherwise payable under part A with respect to inpatient hospital services.
(ii)(I) Except as provided in subclause (II), the payment rate referred to in clause (i) is a rate equal to the estimated adjusted State-wide average rate per patient-day paid for services provided in skilled nursing facilities under the State plan approved under subchapter XIX for the State in which such hospital is located, or, if the State in which the hospital is located does not have a State plan approved under subchapter XIX, the estimated adjusted State-wide average allowable costs per patient-day for extended care services under this subchapter in that State.
(II) If a hospital has a unit which is a skilled nursing facility, the payment rate referred to in clause (i) for the hospital is a rate equal to the lesser of the rate described in subclause (I) or the allowable costs in effect under this subchapter for extended care services provided to patients of such unit.
(iii) Any day on which an individual receives inpatient services for which payment is made under this subparagraph shall, for purposes of this chapter (other than this subparagraph), be deemed to be a day on which the individual received inpatient hospital services.
(iv) In determining under clause (i), in the case of a public hospital, whether or not there is an excess of hospital beds in the area of such hospital, such determination shall be made on the basis of only the public hospitals (including the hospital) which are in the area of the hospital and which are under common ownership with that hospital.
(H) In determining such reasonable cost with respect to home health agencies, the Secretary may not include—
(i) any costs incurred in connection with bonding or establishing an escrow account by any such agency as a result of the surety bond requirement described in subsection (o)(7) and the financial security requirement described in subsection (o)(8);
(ii) in the case of home health agencies to which the surety bond requirement described in subsection (o)(7) and the financial security requirement described in subsection (o)(8) apply, any costs attributed to interest charged such an agency in connection with amounts borrowed by the agency to repay overpayments made under this subchapter to the agency, except that such costs may be included in reasonable cost if the Secretary determines that the agency was acting in good faith in borrowing the amounts;
(iii) in the case of contracts entered into by a home health agency after December 5, 1980, for the purpose of having services furnished for or on behalf of such agency, any cost incurred by such agency pursuant to any such contract which is entered into for a period exceeding five years; and
(iv) in the case of contracts entered into by a home health agency before December 5, 1980, for the purpose of having services furnished for or on behalf of such agency, any cost incurred by such agency pursuant to any such contract, which determines the amount payable by the home health agency on the basis of a percentage of the agency's reimbursement or claim for reimbursement for services furnished by the agency, to the extent that such cost exceeds the reasonable value of the services furnished on behalf of such agency.
(I) In determining such reasonable cost, the Secretary may not include any costs incurred by a provider with respect to any services furnished in connection with matters for which payment may be made under this subchapter and furnished pursuant to a contract between the provider and any of its subcontractors which is entered into after December 5, 1980, and the value or cost of which is $10,000 or more over a twelve-month period unless the contract contains a clause to the effect that—
(i) until the expiration of four years after the furnishing of such services pursuant to such contract, the subcontractor shall make available, upon written request by the Secretary, or upon request by the Comptroller General, or any of their duly authorized representatives, the contract, and books, documents and records of such subcontractor that are necessary to certify the nature and extent of such costs, and
(ii) if the subcontractor carries out any of the duties of the contract through a subcontract, with a value or cost of $10,000 or more over a twelve-month period, with a related organization, such subcontract shall contain a clause to the effect that until the expiration of four years after the furnishing of such services pursuant to such subcontract, the related organization shall make available, upon written request by the Secretary, or upon request by the Comptroller General, or any of their duly authorized representatives, the subcontract, and books, documents and records of such organization that are necessary to verify the nature and extent of such costs.
The Secretary shall prescribe in regulation 5 criteria and procedures which the Secretary shall use in obtaining access to books, documents, and records under clauses required in contracts and subcontracts under this subparagraph.
(J) Such regulations may not provide for any inpatient routine salary cost differential as a reimbursable cost for hospitals and skilled nursing facilities.
(K)(i) The Secretary shall issue regulations that provide, to the extent feasible, for the establishment of limitations on the amount of any costs or charges that shall be considered reasonable with respect to services provided on an outpatient basis by hospitals (other than bona fide emergency services as defined in clause (ii)) or clinics (other than rural health clinics), which are reimbursed on a cost basis or on the basis of cost related charges, and by physicians utilizing such outpatient facilities. Such limitations shall be reasonably related to the charges in the same area for similar services provided in physicians' offices. Such regulations shall provide for exceptions to such limitations in cases where similar services are not generally available in physicians' offices in the area to individuals entitled to benefits under this subchapter.
(ii) For purposes of clause (i), the term "bona fide emergency services" means services provided in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in—
(I) placing the patient's health in serious jeopardy;
(II) serious impairment to bodily functions; or
(III) serious dysfunction of any bodily organ or part.
(L)(i) The Secretary, in determining the amount of the payments that may be made under this subchapter with respect to services furnished by home health agencies, may not recognize as reasonable (in the efficient delivery of such services) costs for the provision of such services by an agency to the extent these costs exceed (on the aggregate for the agency) for cost reporting periods beginning on or after—
(I) July 1, 1985, and before July 1, 1986, 120 percent of the mean of the labor-related and nonlabor per visit costs for freestanding home health agencies,
(II) July 1, 1986, and before July 1, 1987, 115 percent of such mean,
(III) July 1, 1987, and before October 1, 1997, 112 percent of such mean,
(IV) October 1, 1997, and before October 1, 1998, 105 percent of the median of the labor-related and nonlabor per visit costs for freestanding home health agencies, or
(V) October 1, 1998, 106 percent of such median.
(ii) Effective for cost reporting periods beginning on or after July 1, 1986, such limitations shall be applied on an aggregate basis for the agency, rather than on a discipline specific basis. The Secretary may provide for such exemptions and exceptions to such limitation as he deems appropriate.
(iii) Not later than July 1, 1991, and annually thereafter (but not for cost reporting periods beginning on or after July 1, 1994, and before July 1, 1996, or on or after July 1, 1997, and before October 1, 1997), the Secretary shall establish limits under this subparagraph for cost reporting periods beginning on or after such date by utilizing the area wage index applicable under
(iv) In establishing limits under this subparagraph for cost reporting periods beginning after September 30, 1997, the Secretary shall not take into account any changes in the home health market basket, as determined by the Secretary, with respect to cost reporting periods which began on or after July 1, 1994, and before July 1, 1996.
(v) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, subject to clause (viii)(I), the Secretary shall provide for an interim system of limits. Payment shall not exceed the costs determined under the preceding provisions of this subparagraph or, if lower, the product of—
(I) an agency-specific per beneficiary annual limitation calculated based 75 percent on 98 percent of the reasonable costs (including nonroutine medical supplies) for the agency's 12-month cost reporting period ending during fiscal year 1994, and based 25 percent on 98 percent of the standardized regional average of such costs for the agency's census division, as applied to such agency, for cost reporting periods ending during fiscal year 1994, such costs updated by the home health market basket index; and
(II) the agency's unduplicated census count of patients (entitled to benefits under this subchapter) for the cost reporting period subject to the limitation.
(vi) For services furnished by home health agencies for cost reporting periods beginning on or after October 1, 1997, the following rules apply:
(I) For new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994 subject to clauses (viii)(II) and (viii)(III), the per beneficiary limitation shall be equal to the median of these limits (or the Secretary's best estimates thereof) applied to other home health agencies as determined by the Secretary. A home health agency that has altered its corporate structure or name shall not be considered a new provider for this purpose.
(II) For beneficiaries who use services furnished by more than one home health agency, the per beneficiary limitations shall be prorated among the agencies.
(vii)(I) Not later than January 1, 1998, the Secretary shall establish per visit limits applicable for fiscal year 1998, and not later than April 1, 1998, the Secretary shall establish per beneficiary limits under clause (v)(I) for fiscal year 1998.
(II) Not later than August 1 of each year (beginning in 1998) the Secretary shall establish the limits applicable under this subparagraph for services furnished during the fiscal year beginning October 1 of the year.
(viii)(I) In the case of a provider with a 12-month cost reporting period ending in fiscal year 1994, if the limit imposed under clause (v) (determined without regard to this subclause) for a cost reporting period beginning during or after fiscal year 1999 is less than the median described in clause (vi)(I) (but determined as if any reference in clause (v) to "98 percent" were a reference to "100 percent"), the limit otherwise imposed under clause (v) for such provider and period shall be increased by 1/3 of such difference.
(II) Subject to subclause (IV), for new providers and those providers without a 12-month cost reporting period ending in fiscal year 1994, but for which the first cost reporting period begins before fiscal year 1999, for cost reporting periods beginning during or after fiscal year 1999, the per beneficiary limitation described in clause (vi)(I) shall be equal to the median described in such clause (determined as if any reference in clause (v) to "98 percent" were a reference to "100 percent").
(III) Subject to subclause (IV), in the case of a new provider for which the first cost reporting period begins during or after fiscal year 1999, the limitation applied under clause (vi)(I) (but only with respect to such provider) shall be equal to 75 percent of the median described in clause (vi)(I).
(IV) In the case of a new provider or a provider without a 12-month cost reporting period ending in fiscal year 1994, subclause (II) shall apply, instead of subclause (III), to a home health agency which filed an application for home health agency provider status under this subchapter before September 15, 1998, or which was approved as a branch of its parent agency before such date and becomes a subunit of the parent agency or a separate agency on or after such date.
(V) Each of the amounts specified in subclauses (I) through (III) are such amounts as adjusted under clause (iii) to reflect variations in wages among different areas.
(ix) Notwithstanding the per beneficiary limit under clause (viii), if the limit imposed under clause (v) (determined without regard to this clause) for a cost reporting period beginning during or after fiscal year 2000 is less than the median described in clause (vi)(I) (but determined as if any reference in clause (v) to "98 percent" were a reference to "100 percent"), the limit otherwise imposed under clause (v) for such provider and period shall be increased by 2 percent.
(x) Notwithstanding any other provision of this subparagraph, in updating any limit under this subparagraph by a home health market basket index for cost reporting periods beginning during each of fiscal years 2000, 2002, and 2003, the update otherwise provided shall be reduced by 1.1 percentage points. With respect to cost reporting periods beginning during fiscal year 2001, the update to any limit under this subparagraph shall be the home health market basket index.
(M) Such regulations shall provide that costs respecting care provided by a provider of services, pursuant to an assurance under title VI or XVI of the Public Health Service Act [
(N) In determining such reasonable costs, costs incurred for activities directly related to influencing employees respecting unionization may not be included.
(O)(i) In establishing an appropriate allowance for depreciation and for interest on capital indebtedness with respect to an asset of a provider of services which has undergone a change of ownership, such regulations shall provide, except as provided in clause (iii), that the valuation of the asset after such change of ownership shall be the historical cost of the asset, as recognized under this subchapter, less depreciation allowed, to the owner of record as of August 5, 1997 (or, in the case of an asset not in existence as of August 5, 1997, the first owner of record of the asset after August 5, 1997).
(ii) Such regulations shall not recognize, as reasonable in the provision of health care services, costs (including legal fees, accounting and administrative costs, travel costs, and the costs of feasibility studies) attributable to the negotiation or settlement of the sale or purchase of any capital asset (by acquisition or merger) for which any payment has previously been made under this subchapter.
(iii) In the case of the transfer of a hospital from ownership by a State to ownership by a nonprofit corporation without monetary consideration, the basis for capital allowances to the new owner shall be the book value of the hospital to the State at the time of the transfer.
(P) If such regulations provide for the payment for a return on equity capital (other than with respect to costs of inpatient hospital services), the rate of return to be recognized, for determining the reasonable cost of services furnished in a cost reporting period, shall be equal to the average of the rates of interest, for each of the months any part of which is included in the period, on obligations issued for purchase by the Federal Hospital Insurance Trust Fund.
(Q) Except as otherwise explicitly authorized, the Secretary is not authorized to limit the rate of increase on allowable costs of approved medical educational activities.
(R) In determining such reasonable cost, costs incurred by a provider of services representing a beneficiary in an unsuccessful appeal of a determination described in
(S)(i) Such regulations shall not include provision for specific recognition of any return on equity capital with respect to hospital outpatient departments.
(ii)(I) Such regulations shall provide that, in determining the amount of the payments that may be made under this subchapter with respect to all the capital-related costs of outpatient hospital services, the Secretary shall reduce the amounts of such payments otherwise established under this subchapter by 15 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1990, by 15 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1991, and by 10 percent for payments attributable to portions of cost reporting periods occurring during fiscal years 1992 through 1999 and until the first date that the prospective payment system under
(II) The Secretary shall reduce the reasonable cost of outpatient hospital services (other than the capital-related costs of such services) otherwise determined pursuant to
(III) Subclauses (I) and (II) shall not apply to payments with respect to the costs of hospital outpatient services provided by any hospital that is a sole community hospital (as defined in
(IV) In applying subclauses (I) and (II) to services for which payment is made on the basis of a blend amount under
(T) In determining such reasonable costs for hospitals, no reduction in copayments under
(i) for cost reporting periods beginning during fiscal year 1998, by 25 percent of such amount otherwise allowable,
(ii) for cost reporting periods beginning during fiscal year 1999, by 40 percent of such amount otherwise allowable,
(iii) for cost reporting periods beginning during fiscal year 2000, by 45 percent of such amount otherwise allowable,
(iv) for cost reporting periods beginning during fiscal years 2001 through 2012, by 30 percent of such amount otherwise allowable, and
(v) for cost reporting periods beginning during fiscal year 2013 or a subsequent fiscal year, by 35 percent of such amount otherwise allowable.
(U) In determining the reasonable cost of ambulance services (as described in subsection (s)(7)) provided during fiscal year 1998, during fiscal year 1999, and during so much of fiscal year 2000 as precedes January 1, 2000, the Secretary shall not recognize the costs per trip in excess of costs recognized as reasonable for ambulance services provided on a per trip basis during the previous fiscal year (after application of this subparagraph), increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending with the midpoint of the fiscal year involved reduced by 1.0 percentage point. For ambulance services provided after June 30, 1998, the Secretary may provide that claims for such services must include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished.
(V) In determining such reasonable costs for skilled nursing facilities and (beginning with respect to cost reporting periods beginning during fiscal year 2013) for covered skilled nursing services described in
(i) are not described in
(I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, 30 percent of such amount otherwise allowable; and
(II) for cost reporting periods beginning during fiscal year 2013 or a subsequent fiscal year, by 7 35 percent of such amount otherwise allowable.
(ii) are described in such section—
(I) for cost reporting periods beginning on or after October 1, 2005, but before fiscal year 2013, shall not be reduced;
(II) for cost reporting periods beginning during fiscal year 2013, shall be reduced by 12 percent of such amount otherwise allowable;
(III) for cost reporting periods beginning during fiscal year 2014, shall be reduced by 24 percent of such amount otherwise allowable; and
(IV) for cost reporting periods beginning during a subsequent fiscal year, shall be reduced by 35 percent of such amount otherwise allowable.
(W)(i) In determining such reasonable costs for providers described in clause (ii), the amount of bad debts otherwise treated as allowable costs which are attributable to deductibles and coinsurance amounts under this subchapter shall be reduced—
(I) for cost reporting periods beginning during fiscal year 2013, by 12 percent of such amount otherwise allowable;
(II) for cost reporting periods beginning during fiscal year 2014, by 24 percent of such amount otherwise allowable; and
(III) for cost reporting periods beginning during a subsequent fiscal year, by 35 percent of such amount otherwise allowable.
(ii) A provider described in this clause is a provider of services not described in subparagraph (T) or (V), a supplier, or any other type of entity that receives payment for bad debts under the authority under subparagraph (A).
(2)(A) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) or post-hospital extended care services is in accommodations more expensive than semi-private accommodations, the amount taken into account for purposes of payment under this subchapter with respect to such services may not exceed the amount that would be taken into account with respect to such services if furnished in such semi-private accommodations unless the more expensive accommodations were required for medical reasons.
(B) Where a provider of services which has an agreement in effect under this subchapter furnishes to an individual items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under part A or part B, as the case may be, the Secretary shall take into account for purposes of payment to such provider of services only the items or services with respect to which such payment may be made.
(3) If the bed and board furnished as part of inpatient hospital services (including inpatient tuberculosis hospital services and inpatient psychiatric hospital services) or post-hospital extended care services is in accommodations other than, but not more expensive than, semi-private accommodations and the use of such other accommodations rather than semi-private accommodations was neither at the request of the patient nor for a reason which the Secretary determines is consistent with the purposes of this subchapter, the amount of the payment with respect to such bed and board under part A shall be the amount otherwise payable under this subchapter for such bed and board furnished in semi-private accommodations minus the difference between the charge customarily made by the hospital or skilled nursing facility for bed and board in semi-private accommodations and the charge customarily made by it for bed and board in the accommodations furnished.
(4) If a provider of services furnishes items or services to an individual which are in excess of or more expensive than the items or services determined to be necessary in the efficient delivery of needed health services and charges are imposed for such more expensive items or services under the authority granted in section 1395cc(a)(2)(B)(ii) 8 of this title, the amount of payment with respect to such items or services otherwise due such provider in any fiscal period shall be reduced to the extent that such payment plus such charges exceed the cost actually incurred for such items or services in the fiscal period in which such charges are imposed.
(5)(A) Where physical therapy services, occupational therapy services, speech therapy services, or other therapy services or services of other health-related personnel (other than physicians) are furnished under an arrangement with a provider of services or other organization, specified in the first sentence of subsection (p) (including through the operation of subsection (g)) the amount included in any payment to such provider or other organization under this subchapter as the reasonable cost of such services (as furnished under such arrangements) shall not exceed an amount equal to the salary which would reasonably have been paid for such services (together with any additional costs that would have been incurred by the provider or other organization) to the person performing them if they had been performed in an employment relationship with such provider or other organization (rather than under such arrangement) plus the cost of such other expenses (including a reasonable allowance for traveltime and other reasonable types of expense related to any differences in acceptable methods of organization for the provision of such therapy) incurred by such person, as the Secretary may in regulations determine to be appropriate.
(B) Notwithstanding the provisions of subparagraph (A), if a provider of services or other organization specified in the first sentence of subsection (p) requires the services of a therapist on a limited part-time basis, or only to perform intermittent services, the Secretary may make payment on the basis of a reasonable rate per unit of service, even though such rate is greater per unit of time than salary related amounts, where he finds that such greater payment is, in the aggregate, less than the amount that would have been paid if such organization had employed a therapist on a full- or part-time salary basis.
(6) For purposes of this subsection, the term, "semi-private accommodations" means two-bed, three-bed, or four-bed accommodations.
(7)(A) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State or areawide planning agency, see
(B) For further limitations on reasonable cost and determination of payment amounts for operating costs of inpatient hospital services and waivers for certain States, see
(C) For provisions restricting payment for provider-based physicians' services and for payments under certain percentage arrangements, see
(D) For further limitations on reasonable cost and determination of payment amounts for routine service costs of skilled nursing facilities, see subsections (a) through (c) of
(8)
(i) entertainment, including tickets to sporting and other entertainment events;
(ii) gifts or donations;
(iii) personal use of motor vehicles;
(iv) costs for fines and penalties resulting from violations of Federal, State, or local laws; and
(v) education expenses for spouses or other dependents of providers of services, their employees or contractors.
(w) Arrangements for certain services; payments pursuant to arrangements for utilization review activities
(1) The term "arrangements" is limited to arrangements under which receipt of payment by the hospital, critical access hospital, skilled nursing facility, home health agency, or hospice program (whether in its own right or as agent), with respect to services for which an individual is entitled to have payment made under this subchapter, discharges the liability of such individual or any other person to pay for the services.
(2) Utilization review activities conducted, in accordance with the requirements of the program established under part B of subchapter XI of this chapter with respect to services furnished by a hospital or critical access hospital to patients insured under part A of this subchapter or entitled to have payment made for such services under part B of this subchapter or under a State plan approved under subchapter XIX, by a quality improvement organization designated for the area in which such hospital or critical access hospital is located shall be deemed to have been conducted pursuant to arrangements between such hospital or critical access hospital and such organization under which such hospital or critical access hospital is obligated to pay to such organization, as a condition of receiving payment for hospital or critical access hospital services so furnished under this part or under such a State plan, such amount as is reasonably incurred and requested (as determined under regulations of the Secretary) by such organization in conducting such review activities with respect to services furnished by such hospital or critical access hospital to such patients.
(x) State and United States
The terms "State" and "United States" have the meaning given to them by subsections (h) and (i), respectively, of
(y) Extended care in religious nonmedical health care institutions
(1) The term "skilled nursing facility" also includes a religious nonmedical health care institution (as defined in subsection (ss)(1)), but only (except for purposes of subsection (a)(2)) with respect to items and services ordinarily furnished by such an institution to inpatients, and payment may be made with respect to services provided by or in such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations consistent with
(2) Notwithstanding any other provision of this subchapter, payment under part A may not be made for services furnished an individual in a skilled nursing facility to which paragraph (1) applies unless such individual elects, in accordance with regulations, for a spell of illness to have such services treated as post-hospital extended care services for purposes of such part; and payment under part A may not be made for post-hospital extended care services—
(A) furnished an individual during such spell of illness in a skilled nursing facility to which paragraph (1) applies after—
(i) such services have been furnished to him in such a facility for 30 days during such spell, or
(ii) such services have been furnished to him during such spell in a skilled nursing facility to which such paragraph does not apply; or
(B) furnished an individual during such spell of illness in a skilled nursing facility to which paragraph (1) does not apply after such services have been furnished to him during such spell in a skilled nursing facility to which such paragraph applies.
(3) The amount payable under part A for post-hospital extended care services furnished an individual during any spell of illness in a skilled nursing facility to which paragraph (1) applies shall be reduced by a coinsurance amount equal to one-eighth of the inpatient hospital deductible for each day before the 31st day on which he is furnished such services in such a facility during such spell (and the reduction under this paragraph shall be in lieu of any reduction under
(4) For purposes of subsection (i), the determination of whether services furnished by or in an institution described in paragraph (1) constitute post-hospital extended care services shall be made in accordance with and subject to such conditions, limitations, and requirements as may be provided in regulations.
(z) Institutional planning
An overall plan and budget of a hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, or home health agency shall be considered sufficient if it—
(1) provides for an annual operating budget which includes all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items (except that nothing in this paragraph shall require that there be prepared, in connection with any budget, an item-by-item identification of the components of each type of anticipated expenditure or income);
(2)(A) provides for a capital expenditures plan for at least a 3-year period (including the year to which the operating budget described in paragraph (1) is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objectives of, each anticipated expenditure in excess of $600,000 (or such lesser amount as may be established by the State under
(B) provides that such plan is submitted to the agency designated under
(3) provides for review and updating at least annually; and
(4) is prepared, under the direction of the governing body of the institution or agency, by a committee consisting of representatives of the governing body, the administrative staff, and the medical staff (if any) of the institution or agency.
(aa) Rural health clinic services and Federally qualified health center services
(1) The term "rural health clinic services" means—
(A) physicians' services and such services and supplies as are covered under subsection (s)(2)(A) if furnished as an incident to a physician's professional service and items and services described in subsection (s)(10),
(B) such services furnished by a physician assistant or a nurse practitioner (as defined in paragraph (5)), by a clinical psychologist (as defined by the Secretary), by a clinical social worker (as defined in subsection (hh)(1)), by a marriage and family therapist (as defined in subsection (lll)(2)), or by a mental health counselor (as defined in subsection (lll)(4)), and such services and supplies furnished as an incident to his service as would otherwise be covered if furnished by a physician or as an incident to a physician's service,
(C) in the case of a rural health clinic located in an area in which there exists a shortage of home health agencies, part-time or intermittent nursing care and related medical supplies (other than drugs and biologicals) furnished by a registered professional nurse or licensed practical nurse to a homebound individual under a written plan of treatment (i) established and periodically reviewed by a physician described in paragraph (2)(B), or (ii) established by a nurse practitioner or physician assistant and periodically reviewed and approved by a physician described in paragraph (2)(B), and
(D) intensive outpatient services (as defined in
when furnished to an individual as an outpatient of a rural health clinic.
(2) The term "rural health clinic" means a facility which—
(A) is primarily engaged in furnishing to outpatients services described in subparagraphs (A) and (B) of paragraph (1);
(B) in the case of a facility which is not a physician-directed clinic, has an arrangement (consistent with the provisions of State and local law relative to the practice, performance, and delivery of health services) with one or more physicians (as defined in subsection (r)(1)) under which provision is made for the periodic review by such physicians of covered services furnished by physician assistants and nurse practitioners, the supervision and guidance by such physicians of physician assistants and nurse practitioners, the preparation by such physicians of such medical orders for care and treatment of clinic patients as may be necessary, and the availability of such physicians for such referral of and consultation for patients as is necessary and for advice and assistance in the management of medical emergencies; and, in the case of a physician-directed clinic, has one or more of its staff physicians perform the activities accomplished through such an arrangement;
(C) maintains clinical records on all patients;
(D) has arrangements with one or more hospitals, having agreements in effect under
(E) has written policies, which are developed with the advice of (and with provision for review of such policies from time to time by) a group of professional personnel, including one or more physicians and one or more physician assistants or nurse practitioners, to govern those services described in paragraph (1) which it furnishes;
(F) has a physician, physician assistant, or nurse practitioner responsible for the execution of policies described in subparagraph (E) and relating to the provision of the clinic's services;
(G) directly provides routine diagnostic services, including clinical laboratory services, as prescribed in regulations by the Secretary, and has prompt access to additional diagnostic services from facilities meeting requirements under this subchapter;
(H) in compliance with State and Federal law, has available for administering to patients of the clinic at least such drugs and biologicals as are determined by the Secretary to be necessary for the treatment of emergency cases (as defined in regulations) and has appropriate procedures or arrangements for storing, administering, and dispensing any drugs and biologicals;
(I) has a quality assessment and performance improvement program, and appropriate procedures for review of utilization of clinic services, as the Secretary may specify;
(J) has a nurse practitioner, a physician assistant, or a certified nurse-midwife (as defined in subsection (gg)) available to furnish patient care services not less than 50 percent of the time the clinic operates; and
(K) meets such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are furnished services by the clinic.
For the purposes of this subchapter, such term includes only a facility which (i) is located in an area that is not an urbanized area (as defined by the Bureau of the Census) and in which there are insufficient numbers of needed health care practitioners (as determined by the Secretary), and that, within the previous 4-year period, has been designated by the chief executive officer of the State and certified by the Secretary as an area with a shortage of personal health services or designated by the Secretary either (I) as an area with a shortage of personal health services under section 330(b)(3) or 1302(7) of the Public Health Service Act [
(3) The term "Federally qualified health center services" means—
(A) services of the type described in subparagraphs (A) through (D) of paragraph (1) and preventive services (as defined in subsection (ddd)(3)); and
(B) preventive primary health services that a center is required to provide under section 330 of the Public Health Service Act [
when furnished to an individual as an outpatient of a Federally qualified health center by the center or by a health care professional under contract with the center and, for this purpose, any reference to a rural health clinic or a physician described in paragraph (2)(B) is deemed a reference to a Federally qualified health center or a physician at the center, respectively.
(4) The term "Federally qualified health center" means an entity which—
(A)(i) is receiving a grant under section 330 of the Public Health Service Act [
(ii)(I) is receiving funding from such a grant under a contract with the recipient of such a grant, and (II) meets the requirements to receive a grant under section 330 of such Act [
(B) based on the recommendation of the Health Resources and Services Administration within the Public Health Service, is determined by the Secretary to meet the requirements for receiving such a grant;
(C) was treated by the Secretary, for purposes of part B, as a comprehensive Federally funded health center as of January 1, 1990; or
(D) is an outpatient health program or facility operated by a tribe or tribal organization under the Indian Self-Determination Act [
(5)(A) The term "physician assistant" and the term "nurse practitioner" mean, for purposes of this subchapter, a physician assistant or nurse practitioner who performs such services as such individual is legally authorized to perform (in the State in which the individual performs such services) in accordance with State law (or the State regulatory mechanism provided by State law), and who meets such training, education, and experience requirements (or any combination thereof) as the Secretary may prescribe in regulations.
(B) The term "clinical nurse specialist" means, for purposes of this subchapter, an individual who—
(i) is a registered nurse and is licensed to practice nursing in the State in which the clinical nurse specialist services are performed; and
(ii) holds a master's degree in a defined clinical area of nursing from an accredited educational institution.
(6) The term "collaboration" means a process in which a nurse practitioner works with a physician to deliver health care services within the scope of the practitioner's professional expertise, with medical direction and appropriate supervision as provided for in jointly developed guidelines or other mechanisms as defined by the law of the State in which the services are performed.
(7)(A) The Secretary shall waive for a 1-year period the requirements of paragraph (2) that a rural health clinic employ a physician assistant, nurse practitioner or certified nurse midwife or that such clinic require such providers to furnish services at least 50 percent of the time that the clinic operates for any facility that requests such waiver if the facility demonstrates that the facility has been unable, despite reasonable efforts, to hire a physician assistant, nurse practitioner, or certified nurse-midwife in the previous 90-day period.
(B) The Secretary may not grant such a waiver under subparagraph (A) to a facility if the request for the waiver is made less than 6 months after the date of the expiration of any previous such waiver for the facility, or if the facility has not yet been determined to meet the requirements (including subparagraph (J) of the first sentence of paragraph (2)) of a rural health clinic.
(C) A waiver which is requested under this paragraph shall be deemed granted unless such request is denied by the Secretary within 60 days after the date such request is received.
(bb) Services of a certified registered nurse anesthetist
(1) The term "services of a certified registered nurse anesthetist" means anesthesia services and related care furnished by a certified registered nurse anesthetist (as defined in paragraph (2)) which the nurse anesthetist is legally authorized to perform as such by the State in which the services are furnished.
(2) The term "certified registered nurse anesthetist" means a certified registered nurse anesthetist licensed by the State who meets such education, training, and other requirements relating to anesthesia services and related care as the Secretary may prescribe. In prescribing such requirements the Secretary may use the same requirements as those established by a national organization for the certification of nurse anesthetists. Such term also includes, as prescribed by the Secretary, an anesthesiologist assistant.
(cc) Comprehensive outpatient rehabilitation facility services
(1) The term "comprehensive outpatient rehabilitation facility services" means the following items and services furnished by a physician or other qualified professional personnel (as defined in regulations by the Secretary) to an individual who is an outpatient of a comprehensive outpatient rehabilitation facility under a plan (for furnishing such items and services to such individual) established and periodically reviewed by a physician—
(A) physicians' services;
(B) physical therapy, occupational therapy, speech-language pathology services, and respiratory therapy;
(C) prosthetic and orthotic devices, including testing, fitting, or training in the use of prosthetic and orthotic devices;
(D) social and psychological services;
(E) nursing care provided by or under the supervision of a registered professional nurse;
(F) drugs and biologicals which cannot, as determined in accordance with regulations, be self-administered;
(G) supplies and durable medical equipment; and
(H) such other items and services as are medically necessary for the rehabilitation of the patient and are ordinarily furnished by comprehensive outpatient rehabilitation facilities,
excluding, however, any item or service if it would not be included under subsection (b) if furnished to an inpatient of a hospital. In the case of physical therapy, occupational therapy, and speech pathology services, there shall be no requirement that the item or service be furnished at any single fixed location if the item or service is furnished pursuant to such plan and payments are not otherwise made for the item or service under this subchapter.
(2) The term "comprehensive outpatient rehabilitation facility" means a facility which—
(A) is primarily engaged in providing (by or under the supervision of physicians) diagnostic, therapeutic, and restorative services to outpatients for the rehabilitation of injured, disabled, or sick persons;
(B) provides at least the following comprehensive outpatient rehabilitation services: (i) physicians' services (rendered by physicians, as defined in subsection (r)(1), who are available at the facility on a full- or part-time basis); (ii) physical therapy; and (iii) social or psychological services;
(C) maintains clinical records on all patients;
(D) has policies established by a group of professional personnel (associated with the facility), including one or more physicians defined in subsection (r)(1) to govern the comprehensive outpatient rehabilitation services it furnishes, and provides for the carrying out of such policies by a full- or part-time physician referred to in subparagraph (B)(i);
(E) has a requirement that every patient must be under the care of a physician;
(F) in the case of a facility in any State in which State or applicable local law provides for the licensing of facilities of this nature (i) is licensed pursuant to such law, or (ii) is approved by the agency of such State or locality, responsible for licensing facilities of this nature, as meeting the standards established for such licensing;
(G) has in effect a utilization review plan in accordance with regulations prescribed by the Secretary;
(H) has in effect an overall plan and budget that meets the requirements of subsection (z);
(I) provides the Secretary on a continuing basis with a surety bond in a form specified by the Secretary and in an amount that is not less than $50,000; and
(J) meets such other conditions of participation as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by such facility, including conditions concerning qualifications of personnel in these facilities.
The Secretary may waive the requirement of a surety bond under subparagraph (I) in the case of a facility that provides a comparable surety bond under State law.
(dd) Hospice care; hospice program; definitions; certification; waiver by Secretary
(1) The term "hospice care" means the following items and services provided to a terminally ill individual by, or by others under arrangements made by, a hospice program under a written plan (for providing such care to such individual) established and periodically reviewed by the individual's attending physician and by the medical director (and by the interdisciplinary group described in paragraph (2)(B)) of the program—
(A) nursing care provided by or under the supervision of a registered professional nurse,
(B) physical or occupational therapy, or speech-language pathology services,
(C) medical social services under the direction of a physician,
(D)(i) services of a home health aide who has successfully completed a training program approved by the Secretary and (ii) homemaker services,
(E) medical supplies (including drugs and biologicals) and the use of medical appliances, while under such a plan,
(F) physicians' services,
(G) short-term inpatient care (including both respite care and procedures necessary for pain control and acute and chronic symptom management) in an inpatient facility meeting such conditions as the Secretary determines to be appropriate to provide such care, but such respite care may be provided only on an intermittent, nonroutine, and occasional basis and may not be provided consecutively over longer than five days,
(H) counseling (including dietary counseling) with respect to care of the terminally ill individual and adjustment to his death, and
(I) any other item or service which is specified in the plan and for which payment may otherwise be made under this subchapter.
The care and services described in subparagraphs (A) and (D) may be provided on a 24-hour, continuous basis only during periods of crisis (meeting criteria established by the Secretary) and only as necessary to maintain the terminally ill individual at home.
(2) The term "hospice program" means a public agency or private organization (or a subdivision thereof) which—
(A)(i) is primarily engaged in providing the care and services described in paragraph (1) and makes such services available (as needed) on a 24-hour basis and which also provides bereavement counseling for the immediate family of terminally ill individuals and services described in
(ii) provides for such care and services in individuals' homes, on an outpatient basis, and on a short-term inpatient basis, directly or under arrangements made by the agency or organization, except that—
(I) the agency or organization must routinely provide directly substantially all of each of the services described in subparagraphs (A), (C), and (H) of paragraph (1), except as otherwise provided in paragraph (5), and
(II) in the case of other services described in paragraph (1) which are not provided directly by the agency or organization, the agency or organization must maintain professional management responsibility for all such services furnished to an individual, regardless of the location or facility in which such services are furnished; and
(iii) provides assurances satisfactory to the Secretary that the aggregate number of days of inpatient care described in paragraph (1)(G) provided in any 12-month period to individuals who have an election in effect under
(B) has an interdisciplinary group of personnel which—
(i) includes at least—
(I) one physician (as defined in subsection (r)(1)),
(II) one registered professional nurse, and
(III) one social worker, marriage and family therapist, or mental health counselor,
employed by or, in the case of a physician described in subclause (I), under contract with the agency or organization, and also includes at least one pastoral or other counselor,
(ii) provides (or supervises the provision of) the care and services described in paragraph (1), and
(iii) establishes the policies governing the provision of such care and services;
(C) maintains central clinical records on all patients;
(D) does not discontinue the hospice care it provides with respect to a patient because of the inability of the patient to pay for such care;
(E)(i) utilizes volunteers in its provision of care and services in accordance with standards set by the Secretary, which standards shall ensure a continuing level of effort to utilize such volunteers, and (ii) maintains records on the use of these volunteers and the cost savings and expansion of care and services achieved through the use of these volunteers;
(F) in the case of an agency or organization in any State in which State or applicable local law provides for the licensing of agencies or organizations of this nature, is licensed pursuant to such law; and
(G) meets such other requirements as the Secretary may find necessary in the interest of the health and safety of the individuals who are provided care and services by such agency or organization.
(3)(A) An individual is considered to be "terminally ill" if the individual has a medical prognosis that the individual's life expectancy is 6 months or less.
(B) The term "attending physician" means, with respect to an individual, the physician (as defined in subsection (r)(1)), the nurse practitioner (as defined in subsection (aa)(5)), or the physician assistant (as defined in such subsection), who may be employed by a hospice program, whom the individual identifies as having the most significant role in the determination and delivery of medical care to the individual at the time the individual makes an election to receive hospice care.
(4)(A) An entity which is certified as a provider of services other than a hospice program shall be considered, for purposes of certification as a hospice program, to have met any requirements under paragraph (2) which are also the same requirements for certification as such other type of provider. The Secretary shall coordinate surveys for determining certification under this subchapter so as to provide, to the extent feasible, for simultaneous surveys of an entity which seeks to be certified as a hospice program and as a provider of services of another type.
(B) Any entity which is certified as a hospice program and as a provider of another type shall have separate provider agreements under
(5)(A) The Secretary may waive the requirements of paragraph (2)(A)(ii)(I) for an agency or organization with respect to all or part of the nursing care described in paragraph (1)(A) if such agency or organization—
(i) is located in an area which is not an urbanized area (as defined by the Bureau of the Census);
(ii) was in operation on or before January 1, 1983; and
(iii) has demonstrated a good faith effort (as determined by the Secretary) to hire a sufficient number of nurses to provide such nursing care directly.
(B) Any waiver, which is in such form and containing such information as the Secretary may require and which is requested by an agency or organization under subparagraph (A) or (C), shall be deemed to be granted unless such request is denied by the Secretary within 60 days after the date such request is received by the Secretary. The granting of a waiver under subparagraph (A) or (C) shall not preclude the granting of any subsequent waiver request should such a waiver again become necessary.
(C) The Secretary may waive the requirements of paragraph (2)(A)(i) and (2)(A)(ii) for an agency or organization with respect to the services described in paragraph (1)(B) and, with respect to dietary counseling, paragraph (1)(H), if such agency or organization—
(i) is located in an area which is not an urbanized area (as defined by the Bureau of Census), and
(ii) demonstrates to the satisfaction of the Secretary that the agency or organization has been unable, despite diligent efforts, to recruit appropriate personnel.
(D) In extraordinary, exigent, or other non-routine circumstances, such as unanticipated periods of high patient loads, staffing shortages due to illness or other events, or temporary travel of a patient outside a hospice program's service area, a hospice program may enter into arrangements with another hospice program for the provision by that other program of services described in paragraph (2)(A)(ii)(I). The provisions of paragraph (2)(A)(ii)(II) shall apply with respect to the services provided under such arrangements.
(E) A hospice program may provide services described in paragraph (1)(A) other than directly by the program if the services are highly specialized services of a registered professional nurse and are provided non-routinely and so infrequently so that the provision of such services directly would be impracticable and prohibitively expensive.
(ee) Discharge planning process
(1) A discharge planning process of a hospital shall be considered sufficient if it is applicable to services furnished by the hospital to individuals entitled to benefits under this subchapter and if it meets the guidelines and standards established by the Secretary under paragraph (2).
(2) The Secretary shall develop guidelines and standards for the discharge planning process in order to ensure a timely and smooth transition to the most appropriate type of and setting for post-hospital or rehabilitative care. The guidelines and standards shall include the following:
(A) The hospital must identify, at an early stage of hospitalization, those patients who are likely to suffer adverse health consequences upon discharge in the absence of adequate discharge planning.
(B) Hospitals must provide a discharge planning evaluation for patients identified under subparagraph (A) and for other patients upon the request of the patient, patient's representative, or patient's physician.
(C) Any discharge planning evaluation must be made on a timely basis to ensure that appropriate arrangements for post-hospital care will be made before discharge and to avoid unnecessary delays in discharge.
(D) A discharge planning evaluation must include an evaluation of a patient's likely need for appropriate post-hospital services, including hospice care and post-hospital extended care services, and the availability of those services, including the availability of home health services through individuals and entities that participate in the program under this subchapter and that serve the area in which the patient resides and that request to be listed by the hospital as available and, in the case of individuals who are likely to need post-hospital extended care services, the availability of such services through facilities that participate in the program under this subchapter and that serve the area in which the patient resides.
(E) The discharge planning evaluation must be included in the patient's medical record for use in establishing an appropriate discharge plan and the results of the evaluation must be discussed with the patient (or the patient's representative).
(F) Upon the request of a patient's physician, the hospital must arrange for the development and initial implementation of a discharge plan for the patient.
(G) Any discharge planning evaluation or discharge plan required under this paragraph must be developed by, or under the supervision of, a registered professional nurse, social worker, or other appropriately qualified personnel.
(H) Consistent with
(i) not specify or otherwise limit the qualified provider which may provide post-hospital home health services, and
(ii) identify (in a form and manner specified by the Secretary) any entity to whom the individual is referred in which the hospital has a disclosable financial interest (as specified by the Secretary consistent with
(3) With respect to a discharge plan for an individual who is enrolled with a Medicare+Choice organization under a Medicare+Choice plan and is furnished inpatient hospital services by a hospital under a contract with the organization—
(A) the discharge planning evaluation under paragraph (2)(D) is not required to include information on the availability of home health services through individuals and entities which do not have a contract with the organization; and
(B) notwithstanding subparagraph (H)(i) 9, the plan may specify or limit the provider (or providers) of post-hospital home health services or other post-hospital services under the plan.
(ff) Partial hospitalization services; intensive outpatient services
(1) The term "partial hospitalization services" means the items and services described in paragraph (2) prescribed by a physician for an individual determined (not less frequently than monthly) by a physician to have a need for such services for a minimum of 20 hours per week and provided under a program described in paragraph (3) under the supervision of a physician pursuant to an individualized, written plan of treatment established and periodically reviewed by a physician (in consultation with appropriate staff participating in such program), which plan sets forth the physician's diagnosis, the type, amount, frequency, and duration of the items and services provided under the plan, and the goals for treatment under the plan.
(2) The items and services described in this paragraph are—
(A) individual and group therapy with physicians or psychologists (or other mental health professionals to the extent authorized under State law),
(B) occupational therapy requiring the skills of a qualified occupational therapist,
(C) services of social workers, trained psychiatric nurses, and other staff trained to work with psychiatric patients,
(D) drugs and biologicals furnished for therapeutic purposes (which cannot, as determined in accordance with regulations, be self-administered),
(E) individualized activity therapies that are not primarily recreational or diversionary,
(F) family counseling (the primary purpose of which is treatment of the individual's condition),
(G) patient training and education (to the extent that training and educational activities are closely and clearly related to individual's care and treatment),
(H) diagnostic services, and
(I) such other items and services as the Secretary may provide (but in no event to include meals and transportation);
that are reasonable and necessary for the diagnosis or active treatment of the individual's condition, reasonably expected to improve or maintain the individual's condition and functional level and to prevent relapse or hospitalization, and furnished pursuant to such guidelines relating to frequency and duration of services as the Secretary shall by regulation establish (taking into account accepted norms of medical practice and the reasonable expectation of patient improvement).
(3)(A) A program described in this paragraph is a program which is furnished by a hospital to its outpatients or by a community mental health center (as defined in subparagraph (B)), and which is a distinct and organized intensive ambulatory treatment service offering less than 24-hour-daily care other than in an individual's home or in an inpatient or residential setting.
(B) For purposes of subparagraph (A), the term "community mental health center" means an entity that—
(i)(I) provides the mental health services described in section 1913(c)(1) of the Public Health Service Act [
(II) in the case of an entity operating in a State that by law precludes the entity from providing itself the service described in subparagraph (E) of such section, provides for such service by contract with an approved organization or entity (as determined by the Secretary);
(ii) meets applicable licensing or certification requirements for community mental health centers in the State in which it is located;
(iii) provides at least 40 percent of its services to individuals who are not eligible for benefits under this subchapter; and
(iv) meets such additional conditions as the Secretary shall specify to ensure (I) the health and safety of individuals being furnished such services, (II) the effective and efficient furnishing of such services, and (III) the compliance of such entity with the criteria described in section 1931(c)(1) of the Public Health Service Act [
(4) The term "intensive outpatient services" has the meaning given the term "partial hospitalization services" in paragraph (1), except that—
(A)
(B) the reference in such paragraph to an individual "determined (not less frequently than monthly) by a physician to have a need for such services for a minimum of 20 hours per week" shall be treated as a reference to an individual "determined (not less frequently than once every other month) by a physician to have a need for such services for a minimum of 9 hours per week"; and
(C) the reference to "a community mental health center (as defined in subparagraph (B))" in paragraph (3) shall be treated as a reference to "a community mental health center (as defined in subparagraph (B)), a Federally qualified health center, or a rural health clinic".
(gg) Certified nurse-midwife services
(1) The term "certified nurse-midwife services" means such services furnished by a certified nurse-midwife (as defined in paragraph (2)) and such services and supplies furnished as an incident to the nurse-midwife's service which the certified nurse-midwife is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician or as an incident to a physicians' service.
(2) The term "certified nurse-midwife" means a registered nurse who has successfully completed a program of study and clinical experience meeting guidelines prescribed by the Secretary, or has been certified by an organization recognized by the Secretary.
(hh) Clinical social worker; clinical social worker services
(1) The term "clinical social worker" means an individual who—
(A) possesses a master's or doctor's degree in social work;
(B) after obtaining such degree has performed at least 2 years of supervised clinical social work; and
(C)(i) is licensed or certified as a clinical social worker by the State in which the services are performed, or
(ii) in the case of an individual in a State which does not provide for licensure or certification—
(I) has completed at least 2 years or 3,000 hours of post-master's degree supervised clinical social work practice under the supervision of a master's level social worker in an appropriate setting (as determined by the Secretary), and
(II) meets such other criteria as the Secretary establishes.
(2) The term "clinical social worker services" means services performed by a clinical social worker (as defined in paragraph (1)) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital and other than services furnished to an inpatient of a skilled nursing facility which the facility is required to provide as a requirement for participation) which the clinical social worker is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are performed as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service.
(ii) Qualified psychologist services
The term "qualified psychologist services" means such services and such services and supplies furnished as an incident to his service furnished by a clinical psychologist (as defined by the Secretary) which the psychologist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician or as an incident to a physician's service.
(jj) Screening mammography
The term "screening mammography" means a radiologic procedure provided to a woman for the purpose of early detection of breast cancer and includes a physician's interpretation of the results of the procedure.
(kk) Covered osteoporosis drug
The term "covered osteoporosis drug" means an injectable drug approved for the treatment of post-menopausal osteoporosis provided to an individual by a home health agency if, in accordance with regulations promulgated by the Secretary—
(1) the individual's attending physician, nurse practitioner or clinical nurse specialist (as those terms are defined in subsection (aa)(5)), certified nurse-midwife (as defined in subsection (gg)), or physician assistant (as defined in subsection (aa)(5)) certifies that the individual has suffered a bone fracture related to post-menopausal osteoporosis and that the individual is unable to learn the skills needed to self-administer such drug or is otherwise physically or mentally incapable of self-administering such drug; and
(2) the individual is confined to the individual's home (except when receiving items and services referred to in subsection (m)(7)).
(ll) Speech-language pathology services; audiology services
(1) The term "speech-language pathology services" means such speech, language, and related function assessment and rehabilitation services furnished by a qualified speech-language pathologist as the speech-language pathologist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) as would otherwise be covered if furnished by a physician.
(2) The term "outpatient speech-language pathology services" has the meaning given the term "outpatient physical therapy services" in subsection (p), except that in applying such subsection—
(A) "speech-language pathology" shall be substituted for "physical therapy" each place it appears; and
(B) "speech-language pathologist" shall be substituted for "physical therapist" each place it appears.
(3) The term "audiology services" means such hearing and balance assessment services furnished by a qualified audiologist as the audiologist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law), as would otherwise be covered if furnished by a physician.
(4) In this subsection:
(A) The term "qualified speech-language pathologist" means an individual with a master's or doctoral degree in speech-language pathology who—
(i) is licensed as a speech-language pathologist by the State in which the individual furnishes such services, or
(ii) in the case of an individual who furnishes services in a State which does not license speech-language pathologists, has successfully completed 350 clock hours of supervised clinical practicum (or is in the process of accumulating such supervised clinical experience), performed not less than 9 months of supervised full-time speech-language pathology services after obtaining a master's or doctoral degree in speech-language pathology or a related field, and successfully completed a national examination in speech-language pathology approved by the Secretary.
(B) The term "qualified audiologist" means an individual with a master's or doctoral degree in audiology who—
(i) is licensed as an audiologist by the State in which the individual furnishes such services, or
(ii) in the case of an individual who furnishes services in a State which does not license audiologists, has successfully completed 350 clock hours of supervised clinical practicum (or is in the process of accumulating such supervised clinical experience), performed not less than 9 months of supervised full-time audiology services after obtaining a master's or doctoral degree in audiology or a related field, and successfully completed a national examination in audiology approved by the Secretary.
(mm) Critical access hospital; critical access hospital services
(1) The term "critical access hospital" means a facility certified by the Secretary as a critical access hospital under
(2) The term "inpatient critical access hospital services" means items and services, furnished to an inpatient of a critical access hospital by such facility, that would be inpatient hospital services if furnished to an inpatient of a hospital by a hospital.
(3) The term "outpatient critical access hospital services" means medical and other health services furnished by a critical access hospital on an outpatient basis.
(nn) Screening pap smear; screening pelvic exam
(1) The term "screening pap smear" means a diagnostic laboratory test consisting of a routine exfoliative cytology test (Papanicolaou test) provided to a woman for the purpose of early detection of cervical or vaginal cancer and includes a physician's interpretation of the results of the test, if the individual involved has not had such a test during the preceding 2 years, or during the preceding year in the case of a woman described in paragraph (3).
(2) The term "screening pelvic exam" means a pelvic examination provided to a woman if the woman involved has not had such an examination during the preceding 2 years, or during the preceding year in the case of a woman described in paragraph (3), and includes a clinical breast examination.
(3) A woman described in this paragraph is a woman who—
(A) is of childbearing age and has had a test described in this subsection during any of the preceding 3 years that indicated the presence of cervical or vaginal cancer or other abnormality; or
(B) is at high risk of developing cervical or vaginal cancer (as determined pursuant to factors identified by the Secretary).
(oo) Prostate cancer screening tests
(1) The term "prostate cancer screening test" means a test that consists of any (or all) of the procedures described in paragraph (2) provided for the purpose of early detection of prostate cancer to a man over 50 years of age who has not had such a test during the preceding year.
(2) The procedures described in this paragraph are as follows:
(A) A digital rectal examination.
(B) A prostate-specific antigen blood test.
(C) For years beginning after 2002, such other procedures as the Secretary finds appropriate for the purpose of early detection of prostate cancer, taking into account changes in technology and standards of medical practice, availability, effectiveness, costs, and such other factors as the Secretary considers appropriate.
(pp) Colorectal cancer screening tests
(1) The term "colorectal cancer screening test" means any of the following procedures furnished to an individual for the purpose of early detection of colorectal cancer:
(A) Screening fecal-occult blood test.
(B) Screening flexible sigmoidoscopy.
(C) Screening colonoscopy.
(D) Such other tests or procedures, and modifications to tests and procedures under this subsection, with such frequency and payment limits, as the Secretary determines appropriate, in consultation with appropriate organizations.
(2) An "individual at high risk for colorectal cancer" is an individual who, because of family history, prior experience of cancer or precursor neoplastic polyps, a history of chronic digestive disease condition (including inflammatory bowel disease, Crohn's Disease, or ulcerative colitis), the presence of any appropriate recognized gene markers for colorectal cancer, or other predisposing factors, faces a high risk for colorectal cancer.
(qq) Diabetes outpatient self-management training services
(1) The term "diabetes outpatient self-management training services" means educational and training services furnished (at such times as the Secretary determines appropriate) to an individual with diabetes by a certified provider (as described in paragraph (2)(A)) in an outpatient setting by an individual or entity who meets the quality standards described in paragraph (2)(B), but only if the physician who is managing the individual's diabetic condition certifies that such services are needed under a comprehensive plan of care related to the individual's diabetic condition to ensure therapy compliance or to provide the individual with necessary skills and knowledge (including skills related to the self-administration of injectable drugs) to participate in the management of the individual's condition.
(2) In paragraph (1)—
(A) a "certified provider" is a physician, or other individual or entity designated by the Secretary, that, in addition to providing diabetes outpatient self-management training services, provides other items or services for which payment may be made under this subchapter; and
(B) a physician, or such other individual or entity, meets the quality standards described in this paragraph if the physician, or individual or entity, meets quality standards established by the Secretary, except that the physician or other individual or entity shall be deemed to have met such standards if the physician or other individual or entity meets applicable standards originally established by the National Diabetes Advisory Board and subsequently revised by organizations who participated in the establishment of standards by such Board, or is recognized by an organization that represents individuals (including individuals under this subchapter) with diabetes as meeting standards for furnishing the services.
(rr) Bone mass measurement
(1) The term "bone mass measurement" means a radiologic or radioisotopic procedure or other procedure approved by the Food and Drug Administration performed on a qualified individual (as defined in paragraph (2)) for the purpose of identifying bone mass or detecting bone loss or determining bone quality, and includes a physician's interpretation of the results of the procedure.
(2) For purposes of this subsection, the term "qualified individual" means an individual who is (in accordance with regulations prescribed by the Secretary)—
(A) an estrogen-deficient woman at clinical risk for osteoporosis;
(B) an individual with vertebral abnormalities;
(C) an individual receiving long-term glucocorticoid steroid therapy;
(D) an individual with primary hyperparathyroidism; or
(E) an individual being monitored to assess the response to or efficacy of an approved osteoporosis drug therapy.
(3) The Secretary shall establish such standards regarding the frequency with which a qualified individual shall be eligible to be provided benefits for bone mass measurement under this subchapter.
(ss) Religious nonmedical health care institution
(1) The term "religious nonmedical health care institution" means an institution that—
(A) is described in subsection (c)(3) of section 501 of the Internal Revenue Code of 1986 and is exempt from taxes under subsection (a) of such section;
(B) is lawfully operated under all applicable Federal, State, and local laws and regulations;
(C) provides only nonmedical nursing items and services exclusively to patients who choose to rely solely upon a religious method of healing and for whom the acceptance of medical health services would be inconsistent with their religious beliefs;
(D) provides such nonmedical items and services exclusively through nonmedical nursing personnel who are experienced in caring for the physical needs of such patients;
(E) provides such nonmedical items and services to inpatients on a 24-hour basis;
(F) on the basis of its religious beliefs, does not provide through its personnel or otherwise medical items and services (including any medical screening, examination, diagnosis, prognosis, treatment, or the administration of drugs) for its patients;
(G)(i) is not owned by, under common ownership with, or has an ownership interest in, a provider of medical treatment or services;
(ii) is not affiliated with—
(I) a provider of medical treatment or services, or
(II) an individual who has an ownership interest in a provider of medical treatment or services;
(H) has in effect a utilization review plan which—
(i) provides for the review of admissions to the institution, of the duration of stays therein, of cases of continuous extended duration, and of the items and services furnished by the institution,
(ii) requires that such reviews be made by an appropriate committee of the institution that includes the individuals responsible for overall administration and for supervision of nursing personnel at the institution,
(iii) provides that records be maintained of the meetings, decisions, and actions of such committee, and
(iv) meets such other requirements as the Secretary finds necessary to establish an effective utilization review plan;
(I) provides the Secretary with such information as the Secretary may require to implement
(J) meets such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the institution.
(2) To the extent that the Secretary finds that the accreditation of an institution by a State, regional, or national agency or association provides reasonable assurances that any or all of the requirements of paragraph (1) are met or exceeded, the Secretary may treat such institution as meeting the condition or conditions with respect to which the Secretary made such finding.
(3)(A)(i) In administering this subsection and
(ii) Clause (i) shall not be construed as preventing the Secretary from requiring under
(B)(i) In administering this subsection and
(ii) Clause (i) shall not be construed as preventing the Secretary from reviewing items and services billed by the institution to the extent the Secretary determines such review to be necessary to determine whether such items and services were not covered under part A, are excessive, or are fraudulent.
(4)(A) For purposes of paragraph (1)(G)(i), an ownership interest of less than 5 percent shall not be taken into account.
(B) For purposes of paragraph (1)(G)(ii), none of the following shall be considered to create an affiliation:
(i) An individual serving as an uncompensated director, trustee, officer, or other member of the governing body of a religious nonmedical health care institution.
(ii) An individual who is a director, trustee, officer, employee, or staff member of a religious nonmedical health care institution having a family relationship with an individual who is affiliated with (or has an ownership interest in) a provider of medical treatment or services.
(iii) An individual or entity furnishing goods or services as a vendor to both providers of medical treatment or services and religious nonmedical health care institutions.
(tt) Post-institutional home health services; home health spell of illness
(1) The term "post-institutional home health services" means home health services furnished to an individual—
(A) after discharge from a hospital or critical access hospital in which the individual was an inpatient for not less than 3 consecutive days before such discharge if such home health services were initiated within 14 days after the date of such discharge; or
(B) after discharge from a skilled nursing facility in which the individual was provided post-hospital extended care services if such home health services were initiated within 14 days after the date of such discharge.
(2) The term "home health spell of illness" with respect to any individual means a period of consecutive days—
(A) beginning with the first day (not included in a previous home health spell of illness) (i) on which such individual is furnished post-institutional home health services, and (ii) which occurs in a month for which the individual is entitled to benefits under part A, and
(B) ending with the close of the first period of 60 consecutive days thereafter on each of which the individual is neither an inpatient of a hospital or critical access hospital nor an inpatient of a facility described in
(uu) Screening for glaucoma
The term "screening for glaucoma" means a dilated eye examination with an intraocular pressure measurement, and a direct ophthalmoscopy or a slit-lamp biomicroscopic examination for the early detection of glaucoma which is furnished by or under the direct supervision of an optometrist or ophthalmologist who is legally authorized to furnish such services under State law (or the State regulatory mechanism provided by State law) of the State in which the services are furnished, as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service, if the individual involved has not had such an examination in the preceding year.
(vv) Medical nutrition therapy services; registered dietitian or nutrition professional
(1) The term "medical nutrition therapy services" means nutritional diagnostic, therapy, and counseling services for the purpose of disease management which are furnished by a registered dietitian or nutrition professional (as defined in paragraph (2)) pursuant to a referral by a physician (as defined in subsection (r)(1)).
(2) Subject to paragraph (3), the term "registered dietitian or nutrition professional" means an individual who—
(A) holds a baccalaureate or higher degree granted by a regionally accredited college or university in the United States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics, as accredited by an appropriate national accreditation organization recognized by the Secretary for this purpose;
(B) has completed at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and
(C)(i) is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed; or
(ii) in the case of an individual in a State that does not provide for such licensure or certification, meets such other criteria as the Secretary establishes.
(3) Subparagraphs (A) and (B) of paragraph (2) shall not apply in the case of an individual who, as of December 21, 2000, is licensed or certified as a dietitian or nutrition professional by the State in which medical nutrition therapy services are performed.
(ww) Initial preventive physical examination
(1) The term "initial preventive physical examination" means physicians' services consisting of a physical examination (including measurement of height, weight body mass index,,10 and blood pressure) with the goal of health promotion and disease detection and includes education, counseling, and referral with respect to screening and other preventive services described in paragraph (2), end-of-life planning (as defined in paragraph (3)) upon the agreement with the individual, and the furnishing of a review of any current opioid prescriptions (as defined in paragraph (4)), but does not include clinical laboratory tests.
(2) The screening and other preventive services described in this paragraph include the following:
(A) Pneumococcal, influenza, and hepatitis B vaccine and administration under subsection (s)(10).
(B) Screening mammography as defined in subsection (jj).
(C) Screening pap smear and screening pelvic exam as defined in subsection (nn).
(D) Prostate cancer screening tests as defined in subsection (oo).
(E) Colorectal cancer screening tests as defined in subsection (pp).
(F) Diabetes outpatient self-management training services as defined in subsection (qq)(1).
(G) Bone mass measurement as defined in subsection (rr).
(H) Screening for glaucoma as defined in subsection (uu).
(I) Medical nutrition therapy services as defined in subsection (vv).
(J) Cardiovascular screening blood tests as defined in subsection (xx)(1).
(K) Diabetes screening tests as defined in subsection (yy).
(L) Ultrasound screening for abdominal aortic aneurysm as defined in subsection (bbb).
(M) An electrocardiogram.
(N) Screening for potential substance use disorders.
(O) Additional preventive services (as defined in subsection (ddd)(1)).
(3) For purposes of paragraph (1), the term "end-of-life planning" means verbal or written information regarding—
(A) an individual's ability to prepare an advance directive in the case that an injury or illness causes the individual to be unable to make health care decisions; and
(B) whether or not the physician is willing to follow the individual's wishes as expressed in an advance directive.
(4) For purposes of paragraph (1), the term "a review of any current opioid prescriptions" means, with respect to an individual determined to have a current prescription for opioids—
(A) a review of the potential risk factors to the individual for opioid use disorder;
(B) an evaluation of the individual's severity of pain and current treatment plan;
(C) the provision of information on non-opioid treatment options; and
(D) a referral to a specialist, as appropriate.
(xx) Cardiovascular screening blood test
(1) The term "cardiovascular screening blood test" means a blood test for the early detection of cardiovascular disease (or abnormalities associated with an elevated risk of cardiovascular disease) that tests for the following:
(A) Cholesterol levels and other lipid or triglyceride levels.
(B) Such other indications associated with the presence of, or an elevated risk for, cardiovascular disease as the Secretary may approve for all individuals (or for some individuals determined by the Secretary to be at risk for cardiovascular disease), including indications measured by noninvasive testing.
The Secretary may not approve an indication under subparagraph (B) for any individual unless a blood test for such is recommended by the United States Preventive Services Task Force.
(2) The Secretary shall establish standards, in consultation with appropriate organizations, regarding the frequency for each type of cardiovascular screening blood tests, except that such frequency may not be more often than once every 2 years.
(yy) Diabetes screening tests
(1) The term "diabetes screening tests" means testing furnished to an individual at risk for diabetes (as defined in paragraph (2)) for the purpose of early detection of diabetes, including—
(A) a fasting plasma glucose test; and
(B) such other tests, and modifications to tests, as the Secretary determines appropriate, in consultation with appropriate organizations.
(2) For purposes of paragraph (1), the term "individual at risk for diabetes" means an individual who has any of the following risk factors for diabetes:
(A) Hypertension.
(B) Dyslipidemia.
(C) Obesity, defined as a body mass index greater than or equal to 30 kg/m2.
(D) Previous identification of an elevated impaired fasting glucose.
(E) Previous identification of impaired glucose tolerance.
(F) A risk factor consisting of at least 2 of the following characteristics:
(i) Overweight, defined as a body mass index greater than 25, but less than 30, kg/m2.
(ii) A family history of diabetes.
(iii) A history of gestational diabetes mellitus or delivery of a baby weighing greater than 9 pounds.
(iv) 65 years of age or older.
(3) The Secretary shall establish standards, in consultation with appropriate organizations, regarding the frequency of diabetes screening tests, except that such frequency may not be more often than twice within the 12-month period following the date of the most recent diabetes screening test of that individual.
(zz) Intravenous immune globulin
The term "intravenous immune globulin" means an approved pooled plasma derivative for the treatment in the patient's home of a patient with a diagnosed primary immune deficiency disease, but not including items or services furnished before January 1, 2024, related to the administration of the derivative, if a physician determines administration of the derivative in the patient's home is medically appropriate.
(aaa) Extended care in religious nonmedical health care institutions
(1) The term "home health agency" also includes a religious nonmedical health care institution (as defined in subsection (ss)(1)), but only with respect to items and services ordinarily furnished by such an institution to individuals in their homes, and that are comparable to items and services furnished to individuals by a home health agency that is not religious nonmedical health care institution.
(2)(A) Subject to subparagraphs (B), payment may be made with respect to services provided by such an institution only to such extent and under such conditions, limitations, and requirements (in addition to or in lieu of the conditions, limitations, and requirements otherwise applicable) as may be provided in regulations consistent with
(B) Notwithstanding any other provision of this subchapter, payment may not be made under subparagraph (A)—
(i) in a year insofar as such payments exceed $700,000; and
(ii) after December 31, 2006.
(bbb) Ultrasound screening for abdominal aortic aneurysm
The term "ultrasound screening for abdominal aortic aneurysm" means—
(1) a procedure using sound waves (or such other procedures using alternative technologies, of commensurate accuracy and cost, that the Secretary may specify) provided for the early detection of abdominal aortic aneurysm; and
(2) includes a physician's interpretation of the results of the procedure.
(ccc) Long-term care hospital
The term "long-term care hospital" means a hospital which—
(1) is primarily engaged in providing inpatient services, by or under the supervision of a physician, to Medicare beneficiaries whose medically complex conditions require a long hospital stay and programs of care provided by a long-term care hospital;
(2) has an average inpatient length of stay (as determined by the Secretary) of greater than 25 days, or meets the requirements of clause (II) 8 of
(3) satisfies the requirements of subsection (e); and
(4) meets the following facility criteria:
(A) the institution has a patient review process, documented in the patient medical record, that screens patients prior to admission for appropriateness of admission to a long-term care hospital, validates within 48 hours of admission that patients meet admission criteria for long-term care hospitals, regularly evaluates patients throughout their stay for continuation of care in a long-term care hospital, and assesses the available discharge options when patients no longer meet such continued stay criteria;
(B) the institution has active physician involvement with patients during their treatment through an organized medical staff, physician-directed treatment with physician on-site availability on a daily basis to review patient progress, and consulting physicians on call and capable of being at the patient's side within a moderate period of time, as determined by the Secretary; and
(C) the institution has interdisciplinary team treatment for patients, requiring interdisciplinary teams of health care professionals, including physicians, to prepare and carry out an individualized treatment plan for each patient.
(ddd) Additional preventive services; preventive services
(1) The term "additional preventive services" means services not described in subparagraph (A) or (C) of paragraph (3) that identify medical conditions or risk factors and that the Secretary determines are—
(A) reasonable and necessary for the prevention or early detection of an illness or disability;
(B) recommended with a grade of A or B by the United States Preventive Services Task Force; and
(C) appropriate for individuals entitled to benefits under part A or enrolled under part B.
(2) In making determinations under paragraph (1) regarding the coverage of a new service, the Secretary shall use the process for making national coverage determinations (as defined in
(3) The term "preventive services" means the following:
(A) The screening and preventive services described in subsection (ww)(2) (other than the service described in subparagraph (M) of such subsection).
(B) An initial preventive physical examination (as defined in subsection (ww)).
(C) Personalized prevention plan services (as defined in subsection (hhh)(1)).
(eee) Cardiac rehabilitation program; intensive cardiac rehabilitation program
(1) The term "cardiac rehabilitation program" means a program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)).
(2) A program described in this paragraph is a program under which—
(A) items and services under the program are delivered—
(i) in a physician's office;
(ii) in a hospital on an outpatient basis; or
(iii) in other settings determined appropriate by the Secretary;
(B) a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)) is immediately available and accessible for medical consultation and medical emergencies at all times items and services are being furnished under the program, except that, in the case of items and services furnished under such a program in a hospital, such availability shall be presumed; and
(C) individualized treatment is furnished under a written plan established, reviewed, and signed by a physician every 30 days that describes—
(i) the individual's diagnosis;
(ii) the type, amount, frequency, and duration of the items and services furnished under the plan; and
(iii) the goals set for the individual under the plan.
(3) The items and services described in this paragraph are—
(A) physician-prescribed exercise;
(B) cardiac risk factor modification, including education, counseling, and behavioral intervention (to the extent such education, counseling, and behavioral intervention is closely related to the individual's care and treatment and is tailored to the individual's needs);
(C) psychosocial assessment;
(D) outcomes assessment; and
(E) such other items and services as the Secretary may determine, but only if such items and services are—
(i) reasonable and necessary for the diagnosis or active treatment of the individual's condition;
(ii) reasonably expected to improve or maintain the individual's condition and functional level; and
(iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual.
(4)(A) The term "intensive cardiac rehabilitation program" means a program (as described in paragraph (2)) that furnishes the items and services described in paragraph (3) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)) and has shown, in peer-reviewed published research, that it accomplished—
(i) one or more of the following:
(I) positively affected the progression of coronary heart disease; or
(II) reduced the need for coronary bypass surgery; or
(III) reduced the need for percutaneous coronary interventions; and
(ii) a statistically significant reduction in 5 or more of the following measures from their level before receipt of cardiac rehabilitation services to their level after receipt of such services:
(I) low density lipoprotein;
(II) triglycerides;
(III) body mass index;
(IV) systolic blood pressure;
(V) diastolic blood pressure; or
(VI) the need for cholesterol, blood pressure, and diabetes medications.
(B) To be eligible for an intensive cardiac rehabilitation program, an individual must have—
(i) had an acute myocardial infarction within the preceding 12 months;
(ii) had coronary bypass surgery;
(iii) stable angina pectoris;
(iv) had heart valve repair or replacement;
(v) had percutaneous transluminal coronary angioplasty (PTCA) or coronary stenting;
(vi) had a heart or heart-lung transplant;
(vii) stable, chronic heart failure (defined as patients with left ventricular ejection fraction of 35 percent or less and New York Heart Association (NYHA) class II to IV symptoms despite being on optimal heart failure therapy for at least 6 weeks); or
(viii) any additional condition for which the Secretary has determined that a cardiac rehabilitation program shall be covered, unless the Secretary determines, using the same process used to determine that the condition is covered for a cardiac rehabilitation program, that such coverage is not supported by the clinical evidence.
(C) An intensive cardiac rehabilitation program may be provided in a series of 72 one-hour sessions (as defined in
(5) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with cardiac pathophysiology who is licensed to practice medicine in the State in which a cardiac rehabilitation program (or the intensive cardiac rehabilitation program, as the case may be) is offered—
(A) is responsible for such program; and
(B) in consultation with appropriate staff, is involved substantially in directing the progress of individual 1 in the program.
(fff) Pulmonary rehabilitation program
(1) The term "pulmonary rehabilitation program" means a program (as described in subsection (eee)(2) with respect to a program under this subsection) that furnishes the items and services described in paragraph (2) under the supervision of a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as those terms are defined in subsection (aa)(5)).
(2) The items and services described in this paragraph are—
(A) physician-prescribed exercise;
(B) education or training (to the extent the education or training is closely and clearly related to the individual's care and treatment and is tailored to such individual's needs);
(C) psychosocial assessment;
(D) outcomes assessment; and
(E) such other items and services as the Secretary may determine, but only if such items and services are—
(i) reasonable and necessary for the diagnosis or active treatment of the individual's condition;
(ii) reasonably expected to improve or maintain the individual's condition and functional level; and
(iii) furnished under such guidelines relating to the frequency and duration of such items and services as the Secretary shall establish, taking into account accepted norms of medical practice and the reasonable expectation of improvement of the individual.
(3) The Secretary shall establish standards to ensure that a physician with expertise in the management of individuals with respiratory pathophysiology who is licensed to practice medicine in the State in which a pulmonary rehabilitation program is offered—
(A) is responsible for such program; and
(B) in consultation with appropriate staff, is involved substantially in directing the progress of individual 1 in the program.
(ggg) Kidney disease education services
(1) The term "kidney disease education services" means educational services that are—
(A) furnished to an individual with stage IV chronic kidney disease who, according to accepted clinical guidelines identified by the Secretary, will require dialysis or a kidney transplant;
(B) furnished, upon the referral of the physician managing the individual's kidney condition, by a qualified person (as defined in paragraph (2)); and
(C) designed—
(i) to provide comprehensive information (consistent with the standards set under paragraph (3)) regarding—
(I) the management of comorbidities, including for purposes of delaying the need for dialysis;
(II) the prevention of uremic complications; and
(III) each option for renal replacement therapy (including hemodialysis and peritoneal dialysis at home and in-center as well as vascular access options and transplantation);
(ii) to ensure that the individual has the opportunity to actively participate in the choice of therapy; and
(iii) to be tailored to meet the needs of the individual involved.
(2)(A) The term "qualified person" means—
(i) a physician (as defined in subsection (r)(1)) or a physician assistant, nurse practitioner, or clinical nurse specialist (as defined in subsection (aa)(5)), who furnishes services for which payment may be made under the fee schedule established under
(ii) a provider of services located in a rural area (as defined in
(B) Such term does not include a provider of services (other than a provider of services described in subparagraph (A)(ii)) or a renal dialysis facility.
(3) The Secretary shall set standards for the content of such information to be provided under paragraph (1)(C)(i) after consulting with physicians, other health professionals, health educators, professional organizations, accrediting organizations, kidney patient organizations, dialysis facilities, transplant centers, network organizations described in
(4) No individual shall be furnished more than 6 sessions of kidney disease education services under this subchapter.
(hhh) Annual wellness visit
(1) The term "personalized prevention plan services" means the creation of a plan for an individual—
(A) that includes a health risk assessment (that meets the guidelines established by the Secretary under paragraph (4)(A)) of the individual that is completed prior to or as part of the same visit with a health professional described in paragraph (3); and
(B) that—
(i) takes into account the results of the health risk assessment; and
(ii) may contain the elements described in paragraph (2).
(2) Subject to paragraph (4)(H), the elements described in this paragraph are the following:
(A) The establishment of, or an update to, the individual's medical and family history.
(B) A list of current providers and suppliers that are regularly involved in providing medical care to the individual (including a list of all prescribed medications).
(C) A measurement of height, weight, body mass index (or waist circumference, if appropriate), blood pressure, and other routine measurements.
(D) Detection of any cognitive impairment.
(E) The establishment of, or an update to, the following:
(i) A screening schedule for the next 5 to 10 years, as appropriate, based on recommendations of the United States Preventive Services Task Force and the Advisory Committee on Immunization Practices, and the individual's health status, screening history, and age-appropriate preventive services covered under this subchapter.
(ii) A list of risk factors and conditions for which primary, secondary, or tertiary prevention interventions are recommended or are underway, including any mental health conditions or any such risk factors or conditions that have been identified through an initial preventive physical examination (as described under subsection (ww)(1)), and a list of treatment options and their associated risks and benefits.
(F) The furnishing of personalized health advice and a referral, as appropriate, to health education or preventive counseling services or programs aimed at reducing identified risk factors and improving self-management, or community-based lifestyle interventions to reduce health risks and promote self-management and wellness, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition.
(G) Screening for potential substance use disorders and referral for treatment as appropriate.
(H) The furnishing of a review of any current opioid prescriptions (as defined in subsection (ww)(4)).
(I) Any other element determined appropriate by the Secretary.
(3) A health professional described in this paragraph is—
(A) a physician;
(B) a practitioner described in clause (i) of
(C) a medical professional (including a health educator, registered dietitian, or nutrition professional) or a team of medical professionals, as determined appropriate by the Secretary, under the supervision of a physician.
(4)(A) For purposes of paragraph (1)(A), the Secretary, not later than 1 year after March 23, 2010, shall establish publicly available guidelines for health risk assessments. Such guidelines shall be developed in consultation with relevant groups and entities and shall provide that a health risk assessment—
(i) identify chronic diseases, injury risks, modifiable risk factors, and urgent health needs of the individual; and
(ii) may be furnished—
(I) through an interactive telephonic or web-based program that meets the standards established under subparagraph (B);
(II) during an encounter with a health care professional;
(III) through community-based prevention programs; or
(IV) through any other means the Secretary determines appropriate to maximize accessibility and ease of use by beneficiaries, while ensuring the privacy of such beneficiaries.
(B) Not later than 1 year after March 23, 2010, the Secretary shall establish standards for interactive telephonic or web-based programs used to furnish health risk assessments under subparagraph (A)(ii)(I). The Secretary may utilize any health risk assessment developed under
(C)(i) Not later than 18 months after March 23, 2010, the Secretary shall develop and make available to the public a health risk assessment model. Such model shall meet the guidelines under subparagraph (A) and may be used to meet the requirement under paragraph (1)(A).
(ii) Any health risk assessment that meets the guidelines under subparagraph (A) and is approved by the Secretary may be used to meet the requirement under paragraph (1)(A).
(D) The Secretary may coordinate with community-based entities (including State Health Insurance Programs, Area Agencies on Aging, Aging and Disability Resource Centers, and the Administration on Aging) to—
(i) ensure that health risk assessments are accessible to beneficiaries; and
(ii) provide appropriate support for the completion of health risk assessments by beneficiaries.
(E) The Secretary shall establish procedures to make beneficiaries and providers aware of the requirement that a beneficiary complete a health risk assessment prior to or at the same time as receiving personalized prevention plan services.
(F) To the extent practicable, the Secretary shall encourage the use of, integration with, and coordination of health information technology (including use of technology that is compatible with electronic medical records and personal health records) and may experiment with the use of personalized technology to aid in the development of self-management skills and management of and adherence to provider recommendations in order to improve the health status of beneficiaries.
(G) A beneficiary shall be eligible to receive only an initial preventive physical examination (as defined under subsection (ww)(1)) during the 12-month period after the date that the beneficiary's coverage begins under part B and shall be eligible to receive personalized prevention plan services under this subsection each year thereafter provided that the beneficiary has not received either an initial preventive physical examination or personalized prevention plan services within the preceding 12-month period.
(H) The Secretary shall issue guidance that—
(i) identifies elements under paragraph (2) that are required to be provided to a beneficiary as part of their first visit for personalized prevention plan services; and
(ii) establishes a yearly schedule for appropriate provision of such elements thereafter.
(iii) Home infusion therapy
(1) The term "home infusion therapy" means the items and services described in paragraph (2) furnished by a qualified home infusion therapy supplier (as defined in paragraph (3)(D)) which are furnished in the individual's home (as defined in paragraph (3)(B)) to an individual—
(A) who is under the care of an applicable provider (as defined in paragraph (3)(A)); and
(B) with respect to whom a plan prescribing the type, amount, and duration of infusion therapy services that are to be furnished such individual has been established by a physician (as defined in subsection (r)(1)) and is periodically reviewed by a physician (as so defined) in coordination with the furnishing of home infusion drugs (as defined in paragraph (3)(C)) under part B.
(2) The items and services described in this paragraph are the following:
(A) Professional services, including nursing services, furnished in accordance with the plan.
(B) Training and education (not otherwise paid for as durable medical equipment (as defined in subsection (n)), remote monitoring, and monitoring services for the provision of home infusion therapy and home infusion drugs furnished by a qualified home infusion therapy supplier.
(3) For purposes of this subsection:
(A) The term "applicable provider" means—
(i) a physician;
(ii) a nurse practitioner; and
(iii) a physician assistant.
(B) The term "home" means a place of residence used as the home of an individual (as defined for purposes of subsection (n)).
(C) The term "home infusion drug" means a parenteral drug or biological administered intravenously, or subcutaneously for an administration period of 15 minutes or more, in the home of an individual through a pump that is an item of durable medical equipment (as defined in subsection (n)). Such term does not include the following:
(i) Insulin pump systems.
(ii) A self-administered drug or biological on a self-administered drug exclusion list.
Clause (ii) shall not apply to a self-administered drug or biological on a self-administered drug exclusion list if such drug or biological was included as a transitional home infusion drug under subparagraph (A)(iii) of
(D)(i) The term "qualified home infusion therapy supplier" means a pharmacy, physician, or other provider of services or supplier licensed by the State in which the pharmacy, physician, or provider or services or supplier furnishes items or services and that—
(I) furnishes infusion therapy to individuals with acute or chronic conditions requiring administration of home infusion drugs;
(II) ensures the safe and effective provision and administration of home infusion therapy on a 7-day-a-week, 24-hour-a-day basis;
(III) is accredited by an organization designated by the Secretary pursuant to
(IV) meets such other requirements as the Secretary determines appropriate, taking into account the standards of care for home infusion therapy established by Medicare Advantage plans under part C and in the private sector.
(ii) A qualified home infusion therapy supplier may subcontract with a pharmacy, physician, provider of services, or supplier to meet the requirements of this subparagraph.
(jjj) Opioid use disorder treatment services; opioid treatment program
(1) Opioid use disorder treatment services
The term "opioid use disorder treatment services" means items and services that are furnished by an opioid treatment program for the treatment of opioid use disorder, including—
(A) opioid agonist and antagonist treatment medications (including oral, injected, or implanted versions) that are approved by the Food and Drug Administration under
(B) dispensing and administration of such medications, if applicable;
(C) substance use counseling by a professional to the extent authorized under State law to furnish such services;
(D) individual and group therapy with a physician or psychologist (or other mental health professional to the extent authorized under State law);
(E) toxicology testing, and
(F) other items and services that the Secretary determines are appropriate (but in no event to include meals or transportation).
(2) Opioid treatment program
The term "opioid treatment program" means an entity that is an opioid treatment program (as defined in section 8.2 of title 42 of the Code of Federal Regulations, or any successor regulation) that—
(A) is enrolled under
(B) has in effect a certification by the Substance Abuse and Mental Health Services Administration for such a program;
(C) is accredited by an accrediting body approved by the Substance Abuse and Mental Health Services Administration; and
(D) meets such additional conditions as the Secretary may find necessary to ensure—
(i) the health and safety of individuals being furnished services under such program; and
(ii) the effective and efficient furnishing of such services.
(kkk) Rural emergency hospital services; rural emergency hospital
(1) Rural emergency hospital services
(A) In general
The term "rural emergency hospital services" means the following services furnished by a rural emergency hospital (as defined in paragraph (2)) that do not exceed an annual per patient average of 24 hours in such rural emergency hospital:
(i) Emergency department services and observation care.
(ii) At the election of the rural emergency hospital, with respect to services furnished on an outpatient basis, other medical and health services as specified by the Secretary through rulemaking.
(B) Staffed emergency department
For purposes of subparagraph (A)(i), an emergency department of a rural emergency hospital shall be considered a staffed emergency department if it meets the following requirements:
(i) The emergency department is staffed 24 hours a day, 7 days a week.
(ii) A physician (as defined in subsection (r)(1)), nurse practitioner, clinical nurse specialist, or physician assistant (as those terms are defined in subsection (aa)(5)) is available to furnish rural emergency hospital services in the facility 24 hours a day.
(iii) Applicable staffing and staffing responsibilities under section 485.631 of title 42, Code of Federal Regulations (or any successor regulation).
(2) Rural emergency hospital
The term "rural emergency hospital" means a facility described in paragraph (3) that—
(A) is enrolled under
(B) does not provide any acute care inpatient services, other than those described in paragraph (6)(A);
(C) has in effect a transfer agreement with a level I or level II trauma center; 2
(D) meets—
(i) licensure requirements as described in paragraph (5);
(ii) the requirements of a staffed emergency department as described in paragraph (1)(B);
(iii) such staff training and certification requirements as the Secretary may require;
(iv) conditions of participation applicable to—
(I) critical access hospitals, with respect to emergency services under section 485.618 of title 42, Code of Federal Regulations (or any successor regulation); and
(II) hospital emergency departments under this subchapter, as determined applicable by the Secretary;
(v) such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished rural emergency hospital services; and
(vi) in the case where the rural emergency hospital includes a distinct part unit of the facility that is licensed as a skilled nursing facility, such distinct part meets the requirements applicable to skilled nursing facilities under this subchapter.
(3) Facility described
A facility described in this paragraph is a facility that as of December 27, 2020—
(A) was a critical access hospital; or
(B) was a subsection (d) hospital (as defined in
(4) Additional information
(A) Information
For purposes of paragraph (2)(A), a facility that submits an application for enrollment under
(i) An action plan for initiating rural emergency hospital services (as defined in paragraph (1)), including a detailed transition plan that lists the specific services that the facility will—
(I) retain;
(II) modify 11
(III) add; and
(IV) discontinue.
(ii) A description of services that the facility intends to furnish on an outpatient basis pursuant to paragraph (1)(A)(ii).
(iii) Information regarding how the facility intends to use the additional facility payment provided under
(iv) Such other information as the Secretary determines appropriate.
(B) Effect of enrollment
Such enrollment shall remain effective with respect to a facility until such time as—
(i) the facility elects to convert back to its prior designation as a critical access hospital or a subsection (d) hospital (as defined in
(ii) the Secretary determines the facility does not meet the requirements applicable to a rural emergency hospital under this subsection.
(5) Licensure
A facility may not operate as a rural emergency hospital in a State unless the facility—
(A) is located in a State that provides for the licensing of such hospitals under State or applicable local law; and
(B)(i) is licensed pursuant to such law; or
(ii) is approved by the agency of such State or locality responsible for licensing hospitals, as meeting the standards established for such licensing.
(6) Discretionary authority
A rural emergency hospital may—
(A) include a unit of the facility that is a distinct part licensed as a skilled nursing facility to furnish post-hospital extended care services; and
(B) be considered a hospital with less than 50 beds for purposes of the exception to the payment limit for rural health clinics under
(7) Quality measurement
(A) In general
The Secretary shall establish quality measurement reporting requirements for rural emergency hospitals, which may include the use of a small number of claims-based outcomes measures or surveys of patients with respect to their experience in the rural emergency hospital, in accordance with the succeeding provisions of this paragraph.
(B) Quality reporting by rural emergency hospitals
(i) In general
With respect to each year beginning with 2023, (or each year beginning on or after the date that is one year after one or more measures are first specified under subparagraph (C)), a rural emergency hospital shall submit data to the Secretary in accordance with clause (ii).
(ii) Submission of quality data
With respect to each such year, a rural emergency hospital shall submit to the Secretary data on quality measures specified under subparagraph (C). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(C) Quality measures
(i) In general
Subject to clause (ii), any measure specified by the Secretary under this subparagraph must have been endorsed by the entity with a contract under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(iii) Consideration of low case volume when specifying performance measures
The Secretary shall, in the selection of measures specified under this subparagraph, take into consideration ways to account for rural emergency hospitals that lack sufficient case volume to ensure that the performance rates for such measures are reliable.
(D) Public availability of data submitted
The Secretary shall establish procedures for making data submitted under subparagraph (B) available to the public regarding the performance of individual rural emergency hospitals. Such procedures shall ensure that a rural emergency hospital has the opportunity to review, and submit corrections for, the data that is to be made public with respect to the rural emergency hospital prior to such data being made public. Such information shall be posted on the Internet website of the Centers for Medicare & Medicaid Services in an easily understandable format as determined appropriate by the Secretary.
(8) Clarification regarding application of provisions relating to off-campus outpatient department of a provider
Nothing in this subsection,
(9) Implementation
There shall be no administrative or judicial review under
(A) The determination of whether a rural emergency hospital meets the requirements of this subsection.
(B) The establishment of requirements under this subsection by the Secretary, including requirements described in paragraphs (2)(D), (4), and (7).
(C) The determination of payment amounts under
(lll) Marriage and family therapist services; marriage and family therapist; mental health counselor services; mental health counselor
(1) Marriage and family therapist services
The term "marriage and family therapist services" means services furnished by a marriage and family therapist (as defined in paragraph (2)) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital), which the marriage and family therapist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are furnished, as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service.
(2) Marriage and family therapist
The term "marriage and family therapist" means an individual who—
(A) possesses a master's or doctor's degree which qualifies for licensure or certification as a marriage and family therapist pursuant to State law of the State in which such individual furnishes the services described in paragraph (1);
(B) is licensed or certified as a marriage and family therapist by the State in which such individual furnishes such services;
(C) after obtaining such degree has performed at least 2 years of clinical supervised experience in marriage and family therapy; and
(D) meets such other requirements as specified by the Secretary.
(3) Mental health counselor services
The term "mental health counselor services" means services furnished by a mental health counselor (as defined in paragraph (4)) for the diagnosis and treatment of mental illnesses (other than services furnished to an inpatient of a hospital), which the mental health counselor is legally authorized to perform under State law (or the State regulatory mechanism provided by the State law) of the State in which such services are furnished, as would otherwise be covered if furnished by a physician or as incident to a physician's professional service.
(4) Mental health counselor
The term "mental health counselor" means an individual who—
(A) possesses a master's or doctor's degree which qualifies for licensure or certification as a mental health counselor, clinical professional counselor, or professional counselor under the State law of the State in which such individual furnishes the services described in paragraph (3);
(B) is licensed or certified as a mental health counselor, clinical professional counselor, or professional counselor by the State in which the services are furnished;
(C) after obtaining such a degree has performed at least 2 years of clinical supervised experience in mental health counseling; and
(D) meets such other requirements as specified by the Secretary.
(mmm) Lymphedema compression treatment items
The term "lymphedema compression treatment items" means standard and custom fitted gradient compression garments and other items determined by the Secretary that are—
(1) furnished on or after January 1, 2024, to an individual with a diagnosis of lymphedema for the treatment of such condition;
(2) primarily and customarily used to serve a medical purpose and for the treatment of lymphedema, as determined by the Secretary; and
(3) prescribed by a physician (or a physician assistant, nurse practitioner, or a clinical nurse specialist (as those terms are defined in
(Aug. 14, 1935, ch. 531, title XVIII, §1861, as added
Editorial Notes
References in Text
Section 4071(b) of the Omnibus Budget Reconciliation Act of 1987, referred to in subsec. (s)(10)(A), is section 4071(b) of
Section 4072(e) of the Omnibus Budget Reconciliation Act of 1987, referred to in subsec. (s)(12), is section 4072(e) of
The Public Health Service Act, referred to in subsec. (v)(1)(M), is act July 1, 1944, ch. 373,
Section 329 of the Public Health Service Act, referred to in subsec. (aa)(2), was section 329 of act July 1, 1944, which was classified to
The Indian Self-Determination Act, referred to in subsec. (aa)(4)(D), is title I of
The Indian Health Care Improvement Act, referred to in subsec. (aa)(4)(D), is
The Internal Revenue Code of 1986, referred to in subsec. (ss)(1)(A), is classified generally to Title 26, Internal Revenue Code.
Clause (II) of
Amendments
2022—Subsec. (s)(2)(B).
Subsec. (s)(2)(Z).
Subsec. (s)(2)(II).
Subsec. (s)(2)(JJ).
Subsec. (aa)(1)(B).
Subsec. (aa)(1)(D).
Subsec. (aa)(3)(A).
Subsec. (dd)(2)(B)(i)(III).
Subsec. (ff).
Subsec. (ff)(1).
Subsec. (ff)(4).
Subsec. (zz).
Subsec. (lll).
Subsec. (mmm).
2020—Subsec. (e).
Subsec. (m).
Subsec. (m)(3).
Subsec. (o)(2).
Subsec. (s)(10)(A).
Subsec. (u).
Subsec. (dd)(4)(C).
Subsec. (kk)(1).
Subsec. (iii)(3)(C).
Subsec. (kkk).
2018—Subsec. (s)(2)(HH).
Subsec. (dd)(3)(B).
Subsec. (ww)(1).
Subsec. (ww)(2)(N), (O).
Subsec. (ww)(4).
Subsec. (eee)(1).
Subsec. (eee)(2)(A)(iii).
Subsec. (eee)(2)(B).
Subsec. (eee)(4)(A).
Subsec. (eee)(4)(B)(vii), (viii).
Subsec. (fff)(1).
Subsec. (hhh)(2)(G) to (I).
Subsec. (jjj).
2016—Subsec. (m).
Subsec. (s)(2)(GG).
Subsec. (iii).
2015—Subsec. (m)(5).
Subsec. (n).
Subsec. (o)(7).
"(7) provides the Secretary with a surety bond—
"(A) effective for a period of 4 years (as specified by the Secretary) or in the case of a change in the ownership or control of the agency (as determined by the Secretary) during or after such 4-year period, an additional period of time that the Secretary determines appropriate, such additional period not to exceed 4 years from the date of such change in ownership or control;
"(B) in a form specified by the Secretary; and
"(C) for a year in the period described in subparagraph (A) in an amount that is equal to the lesser of $50,000 or 10 percent of the aggregate amount of payments to the agency under this subchapter and subchapter XIX of this chapter for that year, as estimated by the Secretary that the Secretary determines is commensurate with the volume of the billing of the home health agency; and".
Subsec. (s)(2)(F).
2014—Subsec. (dd)(4)(C).
2012—Subsec. (v)(1)(T)(iv), (v).
Subsec. (v)(1)(V).
Subsec. (v)(1)(V)(i).
Subsec. (v)(1)(V)(ii).
Subsec. (v)(1)(W).
2011—Subsecs. (v)(1)(G)(i), (w)(2).
2010—Subsec. (o)(7)(C).
Subsec. (s)(2)(K).
Subsec. (s)(2)(FF).
Subsec. (aa)(3)(A).
Subsec. (ff)(3)(A).
Subsec. (ff)(3)(B)(iii), (iv).
Subsec. (ddd).
Subsec. (ddd)(1).
Subsec. (ddd)(3).
Subsec. (hhh).
Subsec. (hhh)(4)(G).
"(G)(i) A beneficiary shall only be eligible to receive an initial preventive physical examination (as defined under subsection (ww)(1)) at any time during the 12-month period after the date that the beneficiary's coverage begins under part B of this subchapter and shall be eligible to receive personalized prevention plan services under this subsection provided that the beneficiary has not received such services within the preceding 12-month period.
"(ii) The Secretary shall establish procedures to make beneficiaries aware of the option to select an initial preventive physical examination or personalized prevention plan services during the period of 12 months after the date that a beneficiary's coverage begins under part B of this subchapter, which shall include information regarding any relevant differences between such services."
2008—Subsec. (e).
Subsec. (p).
Subsec. (s)(2)(D).
Subsec. (s)(2)(F).
Subsec. (s)(2)(BB).
Subsec. (s)(2)(CC), (DD).
Subsec. (s)(2)(EE).
Subsec. (t)(2)(B).
Subsec. (aa)(2).
Subsec. (ll)(2) to (4).
Subsec. (ww)(1).
Subsec. (ww)(2)(M), (N).
Subsec. (ww)(3).
Subsec. (ddd).
Subsecs. (eee), (fff).
Subsec. (ggg).
2007—Subsec. (ccc).
2006—Subsec. (s)(2)(AA).
Subsec. (t)(2)(B)(ii)(I).
Subsec. (v)(1)(T).
Subsec. (v)(1)(V).
Subsec. (aa)(3).
Subsec. (aa)(4)(A)(i), (ii)(II).
Subsec. (ww)(2)(L).
Subsec. (bbb).
2003—Subsec. (d).
Subsec. (s)(2)(A).
Subsec. (s)(2)(K)(i).
Subsec. (s)(2)(K)(ii).
Subsec. (s)(2)(W).
Subsec. (s)(2)(X).
Subsec. (s)(2)(Y).
Subsec. (s)(2)(Z).
Subsec. (s)(7).
Subsec. (v)(1)(S)(ii)(III).
Subsec. (v)(1)(U).
Subsec. (v)(8).
Subsec. (aa)(1)(B).
Subsec. (dd)(2)(A)(i).
Subsec. (dd)(3)(B).
Subsec. (dd)(5)(D), (E).
Subsec. (ee)(2)(D).
Subsec. (mm).
Subsec. (tt)(1)(A), (2)(B).
Subsec. (ww).
Subsec. (xx).
Subsec. (yy).
Subsec. (zz).
Subsec. (aaa).
2000—Subsec. (s)(2)(A), (B).
Subsec. (s)(2)(J).
Subsec. (s)(2)(U).
Subsec. (s)(2)(V).
Subsec. (t)(1).
Subsec. (v)(1)(L)(x).
Subsec. (v)(1)(T)(ii).
Subsec. (v)(1)(T)(iii).
Subsec. (v)(1)(T)(iv).
Subsec. (ff)(3)(B).
"(i) providing the services described in section 1916(c)(4) of the Public Health Service Act; and
"(ii) meeting applicable licensing or certification requirements for community mental health centers in the State in which it is located."
Subsec. (nn)(1), (2).
Subsec. (pp)(1)(C).
Subsec. (pp)(2).
Subsec. (uu).
Subsec. (vv).
1999—Subsec. (o)(7).
Subsec. (p)(1).
Subsec. (r)(4).
Subsec. (s)(2)(J)(v).
Subsec. (s)(2)(T)(ii).
Subsec. (v)(1)(L)(ix), (x).
Subsec. (v)(1)(S)(ii)(I), (II).
Subsec. (aa)(2)(I).
Subsec. (ee)(3).
Subsec. (ss)(1)(G)(i).
1998—Subsec. (v)(1)(L)(i)(III) to (V).
Subsec. (v)(1)(L)(v).
Subsec. (v)(1)(L)(vi)(I).
Subsec. (v)(1)(L)(viii).
Subsec. (v)(1)(L)(ix).
1997—Subsec. (a).
Subsec. (b)(4).
Subsec. (e).
Subsec. (h).
Subsec. (h)(7).
Subsec. (m).
Subsec. (n).
Subsec. (o).
Subsec. (o)(7), (8).
Subsec. (p).
Subsec. (p)(4)(A)(v).
Subsec. (r)(5).
Subsec. (s)(2)(K)(i).
Subsec. (s)(2)(K)(ii).
Subsec. (s)(2)(K)(iii), (iv).
"(iii) services which would be physicians' services if furnished by a physician (as defined in subsection (r)(1) of this section) and which are performed by a nurse practitioner or clinical nurse specialist (as defined in subsection (aa)(5) of this section) working in collaboration (as defined in subsection (aa)(6) of this section) with a physician (as defined in subsection (r)(1) of this section) in a rural area (as defined in
"(iv) such services and supplies furnished as an incident to services described in clause (i) or (ii) as would be covered under subparagraph (A) if furnished as an incident to a physician's professional service;".
Subsec. (s)(2)(N) to (P).
Subsec. (s)(2)(R).
Subsec. (s)(2)(S).
Subsec. (s)(2)(T).
Subsec. (s)(12)(C).
Subsec. (s)(14).
Subsec. (s)(15) to (17).
Subsec. (u).
Subsec. (v)(1)(H)(i).
Subsec. (v)(1)(H)(ii).
Subsec. (v)(1)(L)(i).
Subsec. (v)(1)(L)(i)(I).
Subsec. (v)(1)(L)(i)(II).
Subsec. (v)(1)(L)(i)(III).
Subsec. (v)(1)(L)(i)(IV).
Subsec. (v)(1)(L)(iii).
Subsec. (v)(1)(L)(iv).
Subsec. (v)(1)(L)(v) to (vii).
Subsec. (v)(1)(O)(i).
Subsec. (v)(1)(O)(ii) to (iv).
Subsec. (v)(1)(S)(ii)(I), (II).
Subsec. (v)(1)(S)(ii)(III).
Subsec. (v)(1)(T).
Subsec. (v)(1)(U).
Subsec. (v)(7)(D).
Subsec. (v)(8).
Subsec. (w).
Subsec. (y).
Subsec. (y)(1).
Subsec. (aa)(2).
Subsec. (aa)(2)(I).
Subsec. (aa)(5).
Subsec. (aa)(7)(B).
Subsec. (cc)(2).
Subsec. (cc)(2)(I), (J).
Subsec. (dd)(1)(I).
Subsec. (dd)(2)(A)(ii)(I).
Subsec. (dd)(2)(B)(i).
Subsec. (dd)(5)(B).
Subsec. (dd)(5)(C).
Subsec. (ee)(2)(D).
Subsec. (ee)(2)(H).
Subsec. (mm).
"(1) The term 'rural primary care hospital' means a facility designated by the Secretary as a rural primary care hospital under
"(2) The term 'inpatient rural primary care hospital services' means items and services, furnished to an inpatient of a rural primary care hospital by such a hospital, that would be inpatient hospital services if furnished to an inpatient of a hospital by a hospital.
"(3) The term 'outpatient rural primary care hospital services' means medical and other health services furnished by a rural primary care hospital."
Subsec. (nn).
Subsec. (oo).
Subsec. (pp).
Subsec. (qq).
Subsec. (rr).
Subsec. (ss).
Subsec. (tt).
1996—Subsec. (aa)(4)(A)(i).
Subsec. (aa)(4)(A)(ii)(II).
1994—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (e)(4).
Subsec. (h)(3).
Subsec. (m)(2).
Subsec. (m)(5).
Subsec. (p).
Subsec. (s)(2)(K)(iii).
Subsec. (s)(2)(N).
Subsec. (s)(2)(O), (P).
Subsec. (s)(3).
Subsec. (v)(1)(L)(iii).
Subsec. (aa)(2).
Subsec. (aa)(5).
Subsec. (cc)(1)(B).
Subsec. (dd)(1)(B).
Subsec. (ee)(2)(D).
Subsec. (jj).
Subsec. (kk).
Subsec. (ll).
1993—Subsec. (s)(2)(J).
Subsec. (s)(2)(P).
Subsec. (s)(2)(Q).
Subsec. (t).
Subsec. (v)(1)(B).
Subsec. (v)(1)(L)(ii).
Subsec. (v)(1)(L)(iii).
Subsec. (v)(1)(S)(ii)(I).
Subsec. (v)(1)(S)(ii)(II).
Subsec. (aa)(4)(D).
Subsec. (gg)(2).
1990—Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (n).
Subsec. (s)(2)(E).
Subsec. (s)(2)(H)(i).
Subsec. (s)(2)(K)(i).
Subsec. (s)(2)(K)(ii).
Subsec. (s)(2)(K)(iii).
Subsec. (s)(2)(K)(iv).
Subsec. (s)(2)(O).
Subsec. (s)(2)(P).
Subsec. (s)(8).
Subsec. (s)(13).
Subsec. (v)(1)(E).
Subsec. (v)(1)(L)(iii).
"(I) utilize a wage index that is based on verified wage data obtained from home health agencies, and
"(II) base such limits on the most recent verified wage data available, which data may be for cost reporting periods beginning no earlier than July 1, 1985.
In the case of a home health agency that refuses to provide data, or deliberately provides false data, respecting wages for purposes of this clause upon the request of the Secretary, the Secretary may withhold up to 5 percent of the amount of the payments otherwise payable to the agency under this subchapter until such date as the Secretary determines that such data has been satisfactorily provided."
Subsec. (v)(1)(S)(ii)(I).
Subsec. (v)(1)(S)(ii)(II).
Subsec. (v)(1)(S)(ii)(III).
Subsec. (v)(1)(S)(ii)(IV).
Subsec. (aa).
Subsec. (aa)(1)(B).
Subsec. (aa)(2).
Subsec. (aa)(3).
Subsec. (aa)(4) to (6).
Subsec. (aa)(7).
Subsec. (ff)(3).
Subsec. (jj).
1989—Subsec. (a).
Subsec. (e).
Subsec. (i).
Subsec. (m).
Subsec. (m)(5).
Subsec. (s).
Subsec. (s)(2)(H)(ii).
Subsec. (s)(2)(J).
Subsec. (s)(2)(K).
Subsec. (s)(2)(N).
Subsec. (s)(12).
Subsec. (s)(13).
Subsec. (s)(14).
Subsec. (s)(15).
Subsec. (s)(16).
Subsec. (t).
Subsec. (u).
Subsec. (v)(1)(G)(i).
Subsec. (v)(1)(S).
Subsec. (v)(2)(A), (3).
Subsec. (w)(1).
Subsec. (w)(2).
Subsec. (y).
Subsec. (aa)(1)(B).
Subsec. (aa)(2).
Subsec. (aa)(2)(J), (K).
Subsec. (aa)(4).
Subsec. (hh).
Subsec. (ii).
Subsecs. (jj) to (ll).
Subsec. (mm).
Subsec. (mm)(3).
Subsec. (nn).
1988—Subsec. (a).
Subsec. (a)(2).
Subsec. (e).
Subsec. (i).
Subsec. (m).
Subsec. (n).
Subsec. (p).
Subsec. (s).
Subsec. (s)(2)(H)(ii).
Subsec. (s)(2)(J).
Subsec. (s)(2)(K)(i).
Subsec. (s)(2)(K)(i)(I).
Subsec. (s)(2)(M).
Subsec. (s)(10)(A).
Subsec. (s)(12).
Subsec. (s)(13).
Subsec. (s)(14).
Subsec. (s)(15).
Subsec. (s)(16).
Subsec. (t).
Subsec. (u).
Subsec. (v)(1)(G)(i).
Subsec. (v)(1)(L)(iii).
Subsec. (v)(2)(A), (3).
Subsec. (y).
Subsec. (y)(1).
Subsec. (y)(2).
Subsec. (y)(3).
Subsec. (y)(4).
Subsec. (bb)(2).
Subsec. (ff).
Subsec. (ff)(3).
Subsec. (gg).
Subsec. (hh).
Subsec. (ii).
Subsec. (jj).
Subsec. (kk).
Subsec. (ll).
1987—Subsec. (a)(2).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (b)(6).
Subsec. (e)(4).
Subsec. (g).
Subsec. (j).
Subsec. (n).
Subsec. (o)(6).
Subsec. (r)(3).
Subsec. (s).
Subsec. (s)(2)(B).
Subsec. (s)(2)(H)(ii).
Subsec. (s)(2)(J).
Subsec. (s)(2)(K)(i).
Subsec. (s)(2)(L).
Subsec. (s)(2)(M).
Subsec. (s)(10)(A).
Subsec. (s)(12).
Subsec. (s)(13), (14).
Subsec. (s)(15).
Subsec. (s)(16).
Subsec. (v)(1)(E).
Subsec. (v)(1)(L)(iii).
Subsec. (v)(1)(S).
Subsec. (v)(5)(A).
Subsec. (aa)(1)(B).
Subsec. (bb).
Subsec. (bb)(2).
Subsec. (cc)(1).
Subsec. (ee).
Subsec. (ff).
Subsec. (gg).
Subsec. (hh).
Subsec. (ii).
1986—Subsec. (b)(4).
Subsec. (e)(6).
Subsec. (g).
Subsec. (n).
Subsec. (r)(4).
Subsec. (s)(2)(D).
Subsec. (s)(2)(J).
Subsec. (s)(2)(K).
Subsec. (s)(11) to (15).
Subsec. (v)(1)(B).
Subsec. (v)(1)(G)(i).
Subsec. (v)(1)(L).
"(I) July 1, 1985, and before July 1, 1986, 120 percent,
"(II) July 1, 1986, and before July 1, 1987, 115 percent, or
"(III) July 1, 1987, 112 percent,
of the mean of the labor-related and nonlabor per visit costs for free standing home health agencies.
"(ii) Effective for cost reporting periods beginning on or after July 1, 1986, such limitations shall be applied on an aggregate basis for the agency, rather than on a discipline specific basis, with appropriate adjustment for administrative and general costs of hospital-based agencies."
Subsec. (v)(1)(O)(i).
Subsec. (v)(1)(O)(iv).
Subsec. (v)(1)(P).
Subsec. (v)(1)(Q).
Subsec. (v)(1)(R).
Subsec. (v)(5)(A).
Subsec. (bb).
Subsec. (ee).
1984—Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (j).
Subsec. (j)(2).
Subsec. (j)(13).
Subsec. (m)(5).
Subsec. (n).
Subsec. (p)(1).
Subsec. (p)(2).
Subsec. (r)(3).
Subsec. (s)(2)(H).
Subsec. (s)(2)(I).
Subsec. (s)(6).
Subsec. (s)(10).
Subsec. (u).
Subsec. (v)(1)(B).
Subsec. (v)(1)(C).
Subsec. (v)(1)(C)(i).
Subsec. (v)(1)(D).
Subsec. (v)(1)(E).
Subsec. (v)(1)(I)(i), (ii).
Subsec. (v)(1)(K).
Subsec. (v)(1)(O).
Subsec. (v)(3).
Subsec. (v)(7)(D).
Subsec. (z)(2).
Subsec. (aa)(2)(I).
Subsec. (cc)(1)(F).
Subsec. (cc)(1)(G).
Subsec. (cc)(2)(F).
Subsec. (dd)(2)(A)(ii)(I).
Subsec. (dd)(5).
1983—Subsec. (v)(1)(G)(i).
Subsec. (v)(2)(A).
Subsec. (v)(2)(B).
Subsec. (v)(3).
Subsec. (v)(7)(C).
Subsec. (z)(2).
1982—Subsec. (e)(C).
Subsec. (s)(2)(H).
Subsec. (u).
Subsec. (v)(1)(E).
Subsec. (v)(1)(G)(i).
Subsec. (v)(1)(H)(iii).
Subsec. (v)(1)(I).
Subsec. (v)(1)(J).
Subsec. (v)(1)(L).
Subsec. (v)(1)(M).
Subsec. (v)(1)(N).
Subsec. (v)(7).
Subsec. (v)(7)(C).
Subsec. (w)(1).
Subsec. (w)(2).
Subsec. (cc)(1).
Subsec. (dd).
1981—Subsec. (u).
Subsec. (v)(1)(G)(i).
Subsec. (v)(1)(G)(iv).
Subsec. (v)(1)(J).
Subsec. (v)(1)(K).
Subsec. (v)(1)(L).
Subsec. (w)(2).
Subsec. (bb).
1980—Subsec. (b)(7).
Subsec. (e).
Subsec. (i).
Subsec. (j)(13).
Subsec. (k)(2)(A).
Subsec. (m)(4).
Subsec. (n).
Subsec. (o).
Subsec. (o)(7).
Subsec. (r)(2).
Subsec. (r)(3).
Subsec. (r)(4).
Subsec. (s)(2)(G).
Subsec. (s)(10) to (14).
Subsec. (u).
Subsec. (v)(1)(G).
Subsec. (v)(1)(H).
Subsec. (v)(1)(I).
Subsec. (z).
Subsec. (aa)(1)(A).
Subsec. (bb).
Subsec. (cc).
1978—Subsec. (s)(2)(F).
1977—Subsec. (j)(11).
Subsec. (j)(13).
Subsec. (j)(14).
Subsec. (s).
Subsec. (s)(6).
Subsec. (v)(1)(F).
Subsec. (w)(2).
Subsec. (aa).
1975—Subsec. (e)(5).
Subsec. (j)(13).
Subsec. (w).
1972—Subsec. (a)(2).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (e).
Subsec. (e)(8).
Subsec. (e)(9).
Subsecs. (f)(2), (g)(2).
Subsec. (h).
Subsec. (i).
Subsec. (j).
Subsec. (j)(10).
Subsec. (j)(11) to (13).
Subsec. (j)(15).
Subsec. (k).
Subsec. (l).
Subsec. (m)(7).
Subsec. (n).
Subsec. (o)(5), (6).
Subsec. (p).
Subsec. (q).
Subsec. (r).
Subsec. (s)(8).
Subsec. (u).
Subsec. (v)(1).
Subsec. (v)(3).
Subsec. (v)(4).
Subsec. (v)(5).
Subsec. (v)(6).
Subsec. (v)(7).
Subsecs. (w), (y).
Subsec. (z).
1971—Subsec. (e)(5).
1968—Subsec. (e).
Subsec. (p).
Subsec. (r)(3).
Subsec. (s).
Subsec. (s)(2)(A) to (C).
Subsec. (s)(2)(D).
Subsec. (s)(3).
Subsec. (s)(6).
Subsec. (s)(12), (13).
Subsec. (y)(3).
1966—Subsec. (v)(1).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2022 Amendment
Amendment by section 4121(a)(1), (2), (b) of
Amendment by section of 4124(a), (b)(1)(B), (2), (4)(A) of
Effective Date of 2020 Amendment
Amendment by section 125(a)(1), (d)(1) of
Secretary of Health and Human Services to prescribe regulations to apply the amendments made by section 3708 of
Amendment by section 3713(a) of
Effective Date of 2018 Amendment
Amendment by section 51006(a)(1) of
Effective Date of 2016 Amendment
Amendment by
Effective Date of 2015 Amendment
Amendment by
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2010 Amendment
Amendment by section 4103(a), (b) of
Amendment by section 4104(a) of
Effective Date of 2008 Amendment
Amendment by section 101(a)(1), (b)(1) of
Amendment by section 125(b)(2) of
Amendment by section 143(a), (b)(5), (6) of
Amendment by section 144(a)(1) of
Amendment by section 152(b)(1)(A), (B) of
Effective Date of 2006 Amendment
Amendment by section 5112(a), (b) of
Amendment by section 5114(a)(1), (b) of
Amendment by section 6001(f)(1) of
Effective Date of 2003 Amendment
Amendment by section 415(b) of
Amendment by section 512(c) of
Amendment by section 611(a), (b), (d)(2) of
Amendment by section 642(a) of
Amendment by section 946(a) of
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title I, §103(a)] of
Amendment by section 1(a)(6) [title I, §105(a), (b)] of
Amendment by section 1(a)(6) [title IV, §430(b)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title II, §201(k)] of
Amendment by section 1000(a)(6) [title III, §321(k)(7)–(9)] of
Effective Date of 1997 Amendment
Amendment by section 4102(a), (c) of
Amendment by section 4103(a) of
Amendment by section 4104(a)(1) of
Amendment by section 4105(a)(1), (b)(1) of
Amendment by section 4201(c)(1), (2) of
"(A)
"(B)
"(C)
"(i)
"(ii)
Amendment by section 4312(d), (e) of
Amendment by section 4432(b)(5)(D), (E) of
Amendment by sections 4445 and 4446 of
Amendment by section 4454(a)(1) of
Amendment by section 4511(a)(1)–(2)(B), (d) of
Amendment by section 4512(a) of
Amendment by section 4611(b) of
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by section 145(b) of
Amendment by section 147(e)(1), (4), (5), (f)(3), (4)(A), (6)(A), (B), (E) of
Effective Date of 1993 Amendment
Effective Date of 1990 Amendment
Amendment by section 4008(h)(2)(A)(i) of
Amendment by section 4152(a)(2) of
Amendment by section 4155(a), (d) of
Amendment by section 4157(a) of
Amendment by section 4161(a)(1), (2), (5) of
Amendment by section 4162(a) of
Amendment by section 4163(a) of
Effective Date of 1989 Amendment
Amendment by section 6112(e)(1) of
Amendment by section 6113(a)–(b)(2) of
Amendment by section 6114(a), (d) of
Amendment by section 6131(a)(2) of
Amendment by section 101(a) of
Amendment by section 201(a) of
Effective Date of 1988 Amendment
Amendment by
Amendment by section 104(d)(4) of
Amendment by section 202(a) of
Amendment by section 203(b), (e)(1) of
Amendment by section 204(a) of
Amendment by section 205(b) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
"(A) The amendments made by subsection (b) [amending this section and
"(B) The Secretary of Health and Human Services shall implement the amendments made by subsection (b) so as to ensure that there is no additional cost to the medicare program by reason of such amendments."
"(1) The provisions of subsection (e) of section 4072 of this subpart [section 4072(e) of
"(2) In conducting the demonstration project pursuant to paragraph (1), in order to determine the cost effectiveness of including influenza vaccine in the medicare program, the Secretary of Health and Human Services is required to conduct a demonstration of the provision of influenza vaccine as a service for medicare beneficiaries and to expend $25,000,000 each year of the demonstration project for this purpose. In conducting this demonstration, the Secretary is authorized to purchase in bulk influenza vaccine and to distribute it in a manner to make it widely available to medicare beneficiaries, to develop projects to provide vaccine in the same manner as other covered medicare services in large scale demonstration projects, including statewide projects, and to engage in other appropriate use of moneys to provide influenza vaccine to medicare beneficiaries and evaluate the cost effectiveness of its use. In determining cost effectiveness, the Secretary shall consider the direct cost of the vaccine, the utilization of vaccine which might otherwise not have occurred, the costs of illnesses and nursing home days avoided, and other relevant factors, except that extended life for beneficiaries shall not be considered to reduce the cost effectiveness of the vaccine."
"(1) The amendments made by this section [amending this section and
"(2)(A) The Secretary of Health and Human Services (in this paragraph referred to as the 'Secretary'), shall establish a demonstration project to begin on October 1, 1988, to test the cost-effectiveness of furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section to a sample group of medicare beneficiaries.
"(B)(i) The demonstration project under subparagraph (A) shall be conducted for an initial period of 24 months. Not later than October 1, 1990, the Secretary shall report to the Congress on the results of such project. If the Secretary finds, on the basis of existing data, that furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section is cost-effective, the Secretary shall include such finding in such report, such project shall be discontinued, and the amendments made by this section shall become effective on November 1, 1990.
"(ii) If the Secretary determines that such finding cannot be made on the basis of existing data, such project shall continue for an additional 24 months. Not later than April 1, 1993, the Secretary shall submit a final report to the Congress on the results of such project. The amendments made by this section shall become effective on the first day of the first month to begin after such report is submitted to the Congress unless the report contains a finding by the Secretary that furnishing therapeutic shoes under the medicare program to the extent provided under the amendments made by this section is not cost-effective (in which case the amendments made by this section shall not become effective)."
[Amendments by section 4072 of
Amendment by section 4073(a), (c) of
Amendment by section 4077(b)(1), (4) of
Amendment by section 4084(c)(1) of
Amendments by section 4201(a)(1), (b)(1), (d)(1), (2), (5) of
Effective Date of 1986 Amendment
Amendment by section 9320(b), (c), (f) of
Amendment by section 9337(d) of
Amendment by section 9219(b)(1)(B) of
Effective Date of 1984 Amendment
Amendment by
"(1) Clause (i) of section 1861(v)(1)(O) of the Social Security Act [
"(2) Clause (iii) of section 1861(v)(1)(O) of such Act [
Amendment by section 2319(a) of
Amendment by section 2321(e) of
Amendment by section 2323(a) of
Amendment by section 2335(b) of
Amendment by section 2341(a), (c) of
Amendment by section 2342(a) of
Amendment by section 2354(b)(18)–(29) of
Effective Date of 1983 Amendment
Amendment by section 602(d) of
Amendment by
Effective Date of 1982 Amendment
Amendment by section 101(a)(2) of
Amendment by section 109(b)(2) of
Amendment by section 122(d) of
"(1) Any amendment to the Omnibus Budget Reconciliaton [Reconciliation] Act of 1981 [
"(2) Except as otherwise provided in this section, any amendment to the Social Security Act [
"(3) The amendments made by subsection (d) [amending this section and
Amendment by section 148(b) of
Effective Date of 1981 Amendment
Amendment by section 2121(c), (d) of
"(1) Subject to paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to cost reporting periods ending after September 30, 1981.
"(2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 30, 1981."
"(1) Subject to paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to cost reporting periods ending after September 30, 1981.
"(2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 30, 1981."
"(1) Subject to paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to cost reporting periods ending after September 30, 1981.
"(2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 30, 1981."
For effective date, savings, and transitional provisions relating to amendment by section 2193(c)(9) of
Effective Date of 1980 Amendment
Amendment by
"(1) the amendments made by this section [amending this section,
"(2) The Secretary of Health and Human Services shall take administrative action to assure that improvements, in accordance with the amendment made by subsection (n)(1) [amending this section], will be made not later than June 30, 1981."
Amendment by section 931(c), (d) of
Amendment by section 933(c)–(e) of
Amendment by section 936(a) of
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Amendment by section 3(a)(2) of
Amendment by section 19(b)(1) of
Effective Date of 1975 Amendment
Effective Date of 1972 Amendment
Amendment by section 211(b), (c)(2) of
"(1) The amendments made by subsection (a) [amending this section and
"(2) The amendments made by subsection (b) [amending this section and
"(3) The amendments made by subsection (c) [amending this section] shall be effective with respect to accounting periods beginning after the month in which there are promulgated, by the Secretary of Health, Education, and Welfare, final regulations implementing the provisions of section 1861(v)(5) of the Social Security Act [
Amendment by section 256(b) of
Amendment by section 283(a) of
Effective Date of 1968 Amendment
Amendment by section 129(a), (b), (c)(9)(C), (10), (11) of
Amendment by section 132(a) of
Amendment by section 133(a), (b) of
Amendment by section 143(a) of
Effective Date of 1966 Amendment
Amendment by
Construction of 2018 Amendment
Construction of 2008 Amendment
For construction of amendment by section 153(b)(3)(B) of
Implementation
Conforming References to Previous Part D
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
Frontier Extended Stay Clinic Demonstration Project
"(a)
"(b)
"(1) is located in a community where the closest short-term acute care hospital or critical access hospital is at least 75 miles away from the community or is inaccessible by public road; and
"(2) is designed to address the needs of—
"(A) seriously or critically ill or injured patients who, due to adverse weather conditions or other reasons, cannot be transferred quickly to acute care referral centers; or
"(B) patients who need monitoring and observation for a limited period of time.
"(c)
"(d)
"(1)
"(2)
"(e)
"(f)
"(g)
MedPAC Study of Coverage of Surgical First Assisting Services of Certified Registered Nurse First Assistants
"(a)
"(b)
"(c)
"(1)
"(2)
"(A) is a registered nurse and is licensed to practice nursing in the State in which the surgical first assisting services are performed;
"(B) has completed a minimum of 2,000 hours of first assisting a physician with surgery and related preoperative, intraoperative, and postoperative care; and
"(C) is certified as a registered nurse first assistant by an organization recognized by the Secretary."
Studies Relating to Vision Impairments
"(a)
"(1)
"(2)
"(3)
"(b)
Demonstration of Coverage of Chiropractic Services Under Medicare
"(a)
"(1)
"(A) care for neuromusculoskeletal conditions typical among eligible beneficiaries; and
"(B) diagnostic and other services that a chiropractor is legally authorized to perform by the State or jurisdiction in which such treatment is provided.
"(2)
"(3)
"(4)
"(b)
"(1)
"(2)
"(3)
"(4)
"(c)
"(1)
"(A)
"(B)
"(i) two shall be in rural areas; and
"(ii) two shall be in urban areas.
"(C)
"(2)
"(A)
"(B)
"(d)
"(1)
"(A) to determine whether eligible beneficiaries who use chiropractic services use a lesser overall amount of items and services for which payment is made under the medicare program than eligible beneficiaries who do not use such services;
"(B) to determine the cost of providing payment for chiropractic services under the medicare program;
"(C) to determine the satisfaction of eligible beneficiaries participating in the demonstration projects and the quality of care received by such beneficiaries; and
"(D) to evaluate such other matters as the Secretary determines is appropriate.
"(2)
"(e)
"(f)
"(1)
"(A)
"(B)
"(2)
Demonstration Project To Clarify the Definition of Homebound
"(a)
"(b)
"(1) the beneficiary has been certified by one physician as an individual who has a permanent and severe, disabling condition that is not expected to improve;
"(2) the beneficiary is dependent upon assistance from another individual with at least 3 out of the 5 activities of daily living for the rest of the beneficiary's life;
"(3) the beneficiary requires skilled nursing services for the rest of the beneficiary's life and the skilled nursing is more than medication management;
"(4) an attendant is required to visit the beneficiary on a daily basis to monitor and treat the beneficiary's medical condition or to assist the beneficiary with activities of daily living;
"(5) the beneficiary requires technological assistance or the assistance of another person to leave the home; and
"(6) the beneficiary does not regularly work in a paid position full-time or part-time outside the home.
"(c)
"(d)
"(e)
"(f)
"(1) An examination of whether the provision of home health services to medicare beneficiaries under the project has had any of the following effects:
"(A) Has adversely affected the provision of home health services under the medicare program.
"(B) Has directly caused an increase of expenditures under the medicare program for the provision of such services that is directly attributable to such clarification.
"(2) The specific data evidencing the amount of any increase in expenditures that is directly attributable to the demonstration project (expressed both in absolute dollar terms and as a percentage) above expenditures that would otherwise have been incurred for home health services under the medicare program.
"(3) Specific recommendations to exempt permanently and severely disabled homebound beneficiaries from restrictions on the length, frequency, and purpose of their absences from the home to qualify for home health services without incurring additional costs to the medicare program.
"(g)
"(h)
"(i)
"(j)
"(1)
"(2)
"(3)
Information on Medicare-Certified Skilled Nursing Facilities in Hospital Discharge Plans
Implementation of Amendments by Pub. L. 105–277
"(1)
"(2)
"(A)
"(B)
Study on Expansion of Medical Nutrition Therapy Services Benefit
Study on Medicare Coverage of Routine Thyroid Screening
"(a)
"(b)
GAO Study on Coverage of Surgical First Assisting Services of Certified Registered Nurse First Assistants
"(a)
"(1) Any impact on the quality of care furnished to medicare beneficiaries by reason of such coverage.
"(2) Appropriate education and training requirements for certified registered nurse first assistants who furnish such first assisting services.
"(3) Appropriate rates of payment under the program to such certified registered nurse first assistants for furnishing such services, taking into account the costs of compensation, overhead, and supervision attributable to certified registered nurse first assistants.
"(b)
MedPAC Study and Report on Medicare Coverage of Services Provided by Certain Nonphysician Providers
"(a)
"(1)
"(A) surgical technologist;
"(B) marriage counselor;
"(C) marriage and family therapist;
"(D) pastoral care counselor; and
"(E) licensed professional counselor of mental health.
"(2)
"(b)
Development of Patient Assessment Instruments
"(a)
"(1)
"(2)
"(A) elements that are common to the items and services described in subsection (b) may be readily comparable and are statistically compatible;
"(B) only elements necessary to meet program objectives are collected; and
"(C) the standard instruments supersede any other assessment instrument used before that date.
"(3)
"(b)
"(1) Inpatient and outpatient hospital services.
"(2) Inpatient and outpatient rehabilitation services.
"(3) Covered skilled nursing facility services.
"(4) Home health services.
"(5) Physical or occupational therapy or speech-language pathology services.
"(6) Items and services furnished to such individuals determined to have end stage renal disease.
"(7) Partial hospitalization services and other mental health services.
"(8) Any other service for which payment is made under such title as the Secretary determines to be appropriate."
Conforming References to Previous Part C
Deadline for Publication of Determination on Coverage of Screening Barium Enema
Establishment of Outcome Measures for Beneficiaries With Diabetes
"(1)
"(2)
Vaccines Outreach Expansion
"(a)
"(b)
Study on Preventive and Enhanced Benefits
Utilization Guidelines
Authorizing Payment for Paramedic Intercept Service Providers in Rural Communities
"(1) The ALS intercept services are provided under a contract with one or more volunteer ambulance services and are medically necessary based on the health condition of the individual being transported.
"(2) The volunteer ambulance service involved—
"(A) is certified as qualified to provide ambulance service for purposes of such section,
"(B) provides only basic life support services at the time of the intercept, and
"(C) is prohibited by State law from billing for any services.
"(3) The entity supplying the ALS intercept services—
"(A) is certified as qualified to provide such services under the medicare program under title XVIII of the Social Security Act [
"(B) bills all recipients who receive ALS intercept services from the entity, regardless of whether or not such recipients are medicare beneficiaries.
For purposes of this subsection, an area shall be treated as a rural area if it is designated as a rural area by any law or regulation of the State or if it is located in a rural census tract of a metropolitan statistical area (as determined under the most recent Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725))."
[
No Exceptions Permitted Based on Amendment to Subsection (v)(1)(L)
Study on Definition of Homebound
"(a)
"(b)
Revisions of Coverage for Immunosuppressive Drug Therapy
Freeze in Per Visit Cost Limits for Home Health Services
Study and Report on Effects of Coverage of Osteoporosis Drugs
Productivity Screening Guidelines Application to Staff in Rural Health Clinics
Development of Prospective Payment System for Home Health Services
Application of Budget-Neutral Basis
Transition Provisions for Determining Reasonable Costs for Home Health Agency Services
Permitting Dentist To Serve as Hospital Medical Director
Recognition of Costs of Certain Hospital-Based Nursing Schools
[
Dissemination of Rural Health Clinic Information
Treatment of Certain Facilities as Rural Health Clinics
Continued Use of Home Health Wage Index in Effect Prior to July 1, 1989, Until After July 1, 1991
Payment for Medical Escort or Medical Attendant on Commercial Airliner Allowed
"(a)
"(b)
Skilled Nursing Facility; Access and Visitation Rights
Moratorium on Prior Authorization for Home Health and Post-Hospital Extended Care Services
Delay in Publishing Regulations With Respect To Deeming Status of Entities
"(1) on any date prior to 6 months after the date on which the Secretary has published a proposed rule with respect to the deeming of the entity, and
"(2) until the Secretary publishes a final rule with respect to the deeming of the entity."
Development of Uniform Needs Assessment Instrument
Prior and Concurrent Authorization Demonstration Project
Considerations in Establishing Limits on Payment for Home Health Services
"(1) base such limitations on the most recent data available, which data may be for cost reporting periods beginning no earlier than October 1, 1983; and
"(2) take into account the changes in costs of home health agencies for billing and verification procedures that result from the Secretary's changing the requirements for such procedures, to the extent the changes in costs are not reflected in such data.
Paragraph (2) shall apply to changes in requirements effected before, on, or after July 1, 1986."
Comptroller General Study and Report on Cost Limits for Home Health Services
Reduction in Payment To Avoid Duplicate Payment for Services of Physician Assistants
Study and Report on Payments for Physician Assistants
Cost Limits for Routine Services for Urban and Rural Hospital-Based Skilled Nursing Facilities; Cost Reporting Periods Beginning On or After October 1, 1982, and Prior to July 1, 1984
Study and Report Relating to Requirements That Core Services Be Furnished Directly by Hospices
Report on Effect of 1982 Amendment on Hospital-Based Skilled Nursing Facilities
Elimination of Private Room Subsidy
"(a) The Secretary of Health and Human Services shall, pursuant to section 1861(v)(2) of the Social Security Act [
"(b) The Secretary of Health and Human Services shall first issue such final regulations (whether on an interim or other basis) as may be necessary to implement subsection (a) by October 1, 1982. If such regulations are promulgated on an interim final basis, the Secretary shall take such steps as may be necessary to provide opportunity for public comment, and appropriate revision based thereon, so as to provide that such regulations are not on an interim basis later than January 31, 1983."
Regulations Regarding Access to Books and Records
Compliance With the Life Safety Code or State Fire and Safety Code
Private, Nonprofit Health Care Clinics Qualifying, as of July 1, 1977, as Rural Health Clinics
"(1) on July 1, 1977, was operating and located in an area which on that date (A) was not an urbanized area (as defined by the Bureau of the Census) and (B) had a supply of physicians insufficient to meet the needs of the area (as determined by the Secretary), and
"(2) meets the definition of a rural health clinic under section 1861(aa)(2) [
shall be considered, for the purposes of title XVIII or XIX, respectively, of the Social Security Act [
Promulgation of Regulations Defining Costs Chargeable to Personal Funds of Patients in Skilled Nursing Facilities; Date of Issuance
[
Home Health Services; Grants for Establishment, Operation, Staffing, Etc., of Public and Nonprofit Private Agencies and Entities; Procedures; Payments; Authorization of Appropriations
Payment for Service of Physicians Rendered in a Teaching Hospital for Accounting Periods Beginning After June 30, 1975, and Prior to October 1, 1978; Studies, Reports, etc.; Effective Dates
Physical Therapy Services Requirements; Effective Date Postponement
Payment for Durable Medical Equipment
"(a) The Secretary is authorized to conduct reimbursement experiments designed to eliminate unreasonable expenses resulting from prolonged rentals of durable medical equipment described in section 1861(s)(6) of the Social Security Act [
"(b) Such experiment may be conducted in one or more geographic areas, as the Secretary deems appropriate, and may, pursuant to agreements with suppliers, provide for reimbursement for such equipment on a lump-sum basis whenever it is determined (in accordance with guidelines established by the Secretary) that a lump-sum payment would be more economical than the anticipated period of rental payments. Such experiments may also provide for incentives to beneficiaries (including waiver of the 20 percent coinsurance amount applicable under section 1833 of the Social Security Act [
"(c) The Secretary is authorized, at such time as he deems appropriate, to implement on a nationwide basis any such reimbursement procedures which he finds to be workable, desirable and economical and which are consistent with the purposes of this section."
Executive Documents
Respecting the Rights of Hospital Patients to Receive Visitors and to Designate Surrogate Decision Makers for Medical Emergencies
Memorandum of President of the United States, Apr. 15, 2010, 75 F.R. 20511, provided:
Memorandum for the Secretary of Health and Human Services
There are few moments in our lives that call for greater compassion and companionship than when a loved one is admitted to the hospital. In these hours of need and moments of pain and anxiety, all of us would hope to have a hand to hold, a shoulder on which to lean—a loved one to be there for us, as we would be there for them.
Yet every day, all across America, patients are denied the kindnesses and caring of a loved one at their sides—whether in a sudden medical emergency or a prolonged hospital stay. Often, a widow or widower with no children is denied the support and comfort of a good friend. Members of religious orders are sometimes unable to choose someone other than an immediate family member to visit them and make medical decisions on their behalf. Also uniquely affected are gay and lesbian Americans who are often barred from the bedsides of the partners with whom they may have spent decades of their lives—unable to be there for the person they love, and unable to act as a legal surrogate if their partner is incapacitated.
For all of these Americans, the failure to have their wishes respected concerning who may visit them or make medical decisions on their behalf has real consequences. It means that doctors and nurses do not always have the best information about patients' medications and medical histories and that friends and certain family members are unable to serve as intermediaries to help communicate patients' needs. It means that a stressful and at times terrifying experience for patients is senselessly compounded by indignity and unfairness. And it means that all too often, people are made to suffer or even to pass away alone, denied the comfort of companionship in their final moments while a loved one is left worrying and pacing down the hall.
Many States have taken steps to try to put an end to these problems. North Carolina recently amended its Patients' Bill of Rights to give each patient "the right to designate visitors who shall receive the same visitation privileges as the patient's immediate family members, regardless of whether the visitors are legally related to the patient"—a right that applies in every hospital in the State. Delaware, Nebraska, and Minnesota have adopted similar laws.
My Administration can expand on these important steps to ensure that patients can receive compassionate care and equal treatment during their hospital stays. By this memorandum, I request that you take the following steps:
1. Initiate appropriate rulemaking, pursuant to your authority under
2. Ensure that all hospitals participating in Medicare or Medicaid are in full compliance with regulations, codified at 42 CFR 482.13 and 42 CFR 489.102(a), promulgated to guarantee that all patients' advance directives, such as durable powers of attorney and health care proxies, are respected, and that patients' representatives otherwise have the right to make informed decisions regarding patients' care. Additionally, I request that you issue new guidelines, pursuant to your authority under
3. Provide additional recommendations to me, within 180 days of the date of this memorandum, on actions the Department of Health and Human Services can take to address hospital visitation, medical decisionmaking, or other health care issues that affect LGBT patients and their families.
This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
You are hereby authorized and directed to publish this memorandum in the Federal Register.
Barack Obama.
2 So in original. Probably should be followed by "and".
3 So in original. The word "and" probably should not appear.
4 So in original. Probably should be "have".
5 So in original. Probably should be "regulations".
6 So in original. Probably should be "subclauses."
7 So in original. The word "by" probably should not appear.
8 See References in Text note below.
9 So in original. Probably should be "paragraph (2)(H)(i)".
10 So in original. Probably should be "weight, body mass index,".
11 So in original. Probably should be followed by a semicolon.
§1395y. Exclusions from coverage and medicare as secondary payer
(a) Items or services specifically excluded
Notwithstanding any other provision of this subchapter, no payment may be made under part A or part B for any expenses incurred for items or services—
(1)(A) which, except for items and services described in a succeeding subparagraph or additional preventive services (as described in
(B) in the case of items and services described in
(C) in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness,
(D) in the case of clinical care items and services provided with the concurrence of the Secretary and with respect to research and experimentation conducted by, or under contract with, the Medicare Payment Advisory Commission or the Secretary, which are not reasonable and necessary to carry out the purposes of
(E) in the case of research conducted pursuant to
(F) in the case of screening mammography, which is performed more frequently than is covered under
(G) in the case of prostate cancer screening tests (as defined in
(H) in the case of colorectal cancer screening tests, which are performed more frequently than is covered under
(I) the frequency and duration of home health services which are in excess of normative guidelines that the Secretary shall establish by regulation,
(J) in the case of a drug or biological specified in
(K) in the case of an initial preventive physical examination, which is performed more than 1 year after the date the individual's first coverage period begins under part B,
(L) in the case of cardiovascular screening blood tests (as defined in
(M) in the case of a diabetes screening test (as defined in
(N) in the case of ultrasound screening for abdominal aortic aneurysm which is performed more frequently than is provided for under
(O) in the case of kidney disease education services (as defined in paragraph (1) of
(P) in the case of personalized prevention plan services (as defined in
(2) for which the individual furnished such items or services has no legal obligation to pay, and which no other person (by reason of such individual's membership in a prepayment plan or otherwise) has a legal obligation to provide or pay for, except in the case of Federally qualified health center services;
(3) which are paid for directly or indirectly by a governmental entity (other than under this chapter and other than under a health benefits or insurance plan established for employees of such an entity), except in the case of rural health clinic services, as defined in
(4) which are not provided within the United States (except for inpatient hospital services furnished outside the United States under the conditions described in
(5) which are required as a result of war, or of an act of war, occurring after the effective date of such individual's current coverage under such part;
(6) which constitute personal comfort items (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C));
(7) where such expenses are for routine physical checkups, eyeglasses (other than eyewear described in
(8) where such expenses are for orthopedic shoes or other supportive devices for the feet, other than shoes furnished pursuant to
(9) where such expenses are for custodial care (except, in the case of hospice care, as is otherwise permitted under paragraph (1)(C));
(10) where such expenses are for cosmetic surgery or are incurred in connection therewith, except as required for the prompt repair of accidental injury or for improvement of the functioning of a malformed body member;
(11) where such expenses constitute charges imposed by immediate relatives of such individual or members of his household;
(12) where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth, except that payment may be made under part A in the case of inpatient hospital services in connection with the provision of such dental services if the individual, because of his underlying medical condition and clinical status or because of the severity of the dental procedure, requires hospitalization in connection with the provision of such services;
(13) where such expenses are for—
(A) the treatment of flat foot conditions and the prescription of supportive devices therefor,
(B) the treatment of subluxations of the foot, or
(C) routine foot care (including the cutting or removal of corns or calluses, the trimming of nails, and other routine hygienic care);
(14) which are other than physicians' services (as defined in regulations promulgated specifically for purposes of this paragraph), services described by
(15)(A) which are for services of an assistant at surgery in a cataract operation (including subsequent insertion of an intraocular lens) unless, before the surgery is performed, the appropriate quality improvement organization (under part B of subchapter XI) or a carrier under
(B) which are for services of an assistant at surgery to which
(16) in the case in which funds may not be used for such items and services under the Assisted Suicide Funding Restriction Act of 1997 [
(17) where the expenses are for an item or service furnished in a competitive acquisition area (as established by the Secretary under
(18) which are covered skilled nursing facility services described in
(19) which are for items or services which are furnished pursuant to a private contract described in
(20) in the case of outpatient physical therapy services, outpatient speech-language pathology services, or outpatient occupational therapy services furnished as an incident to a physician's professional services (as described in
(21) where such expenses are for home health services (including medical supplies described in
(22) subject to subsection (h), for which a claim is submitted other than in an electronic form specified by the Secretary;
(23) which are the technical component of advanced diagnostic imaging services described in
(24) where such expenses are for renal dialysis services (as defined in subparagraph (B) of
(25) not later than January 1, 2014, for which the payment is other than by electronic funds transfer (EFT) or an electronic remittance in a form as specified in ASC X12 835 Health Care Payment and Remittance Advice or subsequent standard.
Paragraph (7) shall not apply to Federally qualified health center services described in
(b) Medicare as secondary payer
(1) Requirements of group health plans
(A) Working aged under group health plans
(i) In general
A group health plan—
(I) may not take into account that an individual (or the individual's spouse) who is covered under the plan by virtue of the individual's current employment status with an employer is entitled to benefits under this subchapter under
(II) shall provide that any individual age 65 or older (and the spouse age 65 or older of any individual) who has current employment status with an employer shall be entitled to the same benefits under the plan under the same conditions as any such individual (or spouse) under age 65.
(ii) Exclusion of group health plan of a small employer
Clause (i) shall not apply to a group health plan unless the plan is a plan of, or contributed to by, an employer that has 20 or more employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year.
(iii) Exception for small employers in multiemployer or multiple employer group health plans
Clause (i) also shall not apply with respect to individuals enrolled in a multiemployer or multiple employer group health plan if the coverage of the individuals under the plan is by virtue of current employment status with an employer that does not have 20 or more individuals in current employment status for each working day in each of 20 or more calendar weeks in the current calendar year and the preceding calendar year; except that the exception provided in this clause shall only apply if the plan elects treatment under this clause.
(iv) Exception for individuals with end stage renal disease
Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under
(v) "Group health plan" defined
In this subparagraph, and subparagraph (C), the term "group health plan" has the meaning given such term in section 5000(b)(1) of the Internal Revenue Code of 1986, without regard to section 5000(d) of such Code.
(B) Disabled individuals in large group health plans
(i) In general
A large group health plan (as defined in clause (iii)) may not take into account that an individual (or a member of the individual's family) who is covered under the plan by virtue of the individual's current employment status with an employer is entitled to benefits under this subchapter under
(ii) Exception for individuals with end stage renal disease
Subparagraph (C) shall apply instead of clause (i) to an item or service furnished in a month to an individual if for the month the individual is, or (without regard to entitlement under
(iii) "Large group health plan" defined
In this subparagraph, the term "large group health plan" has the meaning given such term in section 5000(b)(2) of the Internal Revenue Code of 1986, without regard to section 5000(d) of such Code.
(C) Individuals with end stage renal disease
A group health plan (as defined in subparagraph (A)(v))—
(i) may not take into account that an individual is entitled to or eligible for benefits under this subchapter under
(ii) may not differentiate in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner;
except that clause (ii) shall not prohibit a plan from paying benefits secondary to this subchapter when an individual is entitled to or eligible for benefits under this subchapter under
(D) Treatment of certain members of religious orders
In this subsection, an individual shall not be considered to be employed, or an employee, with respect to the performance of services as a member of a religious order which are considered employment only by virtue of an election made by the religious order under section 3121(r) of the Internal Revenue Code of 1986.
(E) General provisions
For purposes of this subsection:
(i) Aggregation rules
(I) All employers treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 shall be treated as a single employer.
(II) All employees of the members of an affiliated service group (as defined in section 414(m) of such Code) shall be treated as employed by a single employer.
(III) Leased employees (as defined in section 414(n)(2) of such Code) shall be treated as employees of the person for whom they perform services to the extent they are so treated under section 414(n) of such Code.
In applying sections of the Internal Revenue Code of 1986 under this clause, the Secretary shall rely upon regulations and decisions of the Secretary of the Treasury respecting such sections.
(ii) "Current employment status" defined
An individual has "current employment status" with an employer if the individual is an employee, is the employer, or is associated with the employer in a business relationship.
(iii) Treatment of self-employed persons as employers
The term "employer" includes a self-employed person.
(iv) Application to certain Postal Service annuitants or family members
Nothing in this paragraph shall prohibit a group health plan from determining an individual's eligibility to enroll in a health benefits plan offered under the Postal Service Health Benefits Program under
(F) Limitation on beneficiary liability
An individual who is entitled to benefits under this subchapter and is furnished an item or service for which such benefits are incorrectly paid is not liable for repayment of such benefits under this paragraph unless payment of such benefits was made to the individual.
(2) Medicare secondary payer
(A) In general
Payment under this subchapter may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that—
(i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1), or
(ii) payment has been made 3 or can reasonably be expected to be made 3 under a workmen's compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.
In this subsection, the term "primary plan" means a group health plan or large group health plan, to the extent that clause (i) applies, and a workmen's compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance, to the extent that clause (ii) applies. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part.
(B) Conditional payment
(i) Authority to make conditional payment
The Secretary may make payment under this subchapter with respect to an item or service if a primary plan described in subparagraph (A)(ii) 4 has not made or cannot reasonably be expected to make payment with respect to such item or service promptly (as determined in accordance with regulations). Any such payment by the Secretary shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection.
(ii) Repayment required
Subject to paragraph (9), a primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means. If reimbursement is not made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice of, or information related to, a primary plan's responsibility for such payment or other information is received, the Secretary may charge interest (beginning with the date on which the notice or other information is received) on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments).
(iii) Action by United States
In order to recover payment made under this subchapter for an item or service, the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan. The United States may, in accordance with paragraph (3)(A) collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan's payment to any entity. The United States may not recover from a third-party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan. An action may not be brought by the United States under this clause with respect to payment owed unless the complaint is filed not later than 3 years after the date of the receipt of notice of a settlement, judgment, award, or other payment made pursuant to paragraph (8) relating to such payment owed.
(iv) Subrogation rights
The United States shall be subrogated (to the extent of payment made under this subchapter for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.
(v) Waiver of rights
The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this subchapter.
(vi) Claims-filing period
Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished.
(vii) Use of website to determine final conditional reimbursement amount
(I) Notice to Secretary of expected date of a settlement, judgment, etc.
In the case of a payment made by the Secretary pursuant to clause (i) for items and services provided to the claimant, the claimant or applicable plan (as defined in paragraph (8)(F)) may at any time beginning 120 days before the reasonably expected date of a settlement, judgment, award, or other payment, notify the Secretary that a payment is reasonably expected and the expected date of such payment.
(II) Secretarial providing access to claims information through a website
The Secretary shall maintain and make available to individuals to whom items and services are furnished under this subchapter (and to authorized family or other representatives recognized under regulations and to an applicable plan which has obtained the consent of the individual) access to information on the claims for such items and services (including payment amounts for such claims), including those claims that relate to a potential settlement, judgment, award, or other payment. Such access shall be provided to an individual, representative, or plan through a website that requires a password to gain access to the information. The Secretary shall update the information on claims and payments on such website in as timely a manner as possible but not later than 15 days after the date that payment is made. Information related to claims and payments subject to the notice under subclause (I) shall be maintained and made available consistent with the following:
(aa) The information shall be as complete as possible and shall include provider or supplier name, diagnosis codes (if any), dates of service, and conditional payment amounts.
(bb) The information accurately identifies those claims and payments that are related to a potential settlement, judgment, award, or other payment to which the provisions of this subsection apply.
(cc) The website provides a method for the receipt of secure electronic communications with the individual, representative, or plan involved.
(dd) The website provides that information is transmitted from the website in a form that includes an official time and date that the information is transmitted.
(ee) The website shall permit the individual, representative, or plan to download a statement of reimbursement amounts (in this clause referred to as a "statement of reimbursement amount") on payments for claims under this subchapter relating to a potential settlement, judgment, award, or other payment.
(III) Use of timely web download as basis for final conditional amount
If an individual (or other claimant or applicable plan with the consent of the individual) obtains a statement of reimbursement amount from the website during the protected period as defined in subclause (V) and the related settlement, judgment, award or other payment is made during such period, then the last statement of reimbursement amount that is downloaded during such period and within 3 business days before the date of the settlement, judgment, award, or other payment shall constitute the final conditional amount subject to recovery under clause (ii) related to such settlement, judgment, award, or other payment.
(IV) Resolution of discrepancies
If the individual (or authorized representative) believes there is a discrepancy with the statement of reimbursement amount, the Secretary shall provide a timely process to resolve the discrepancy. Under such process the individual (or representative) must provide documentation explaining the discrepancy and a proposal to resolve such discrepancy. Within 11 business days after the date of receipt of such documentation, the Secretary shall determine whether there is a reasonable basis to include or remove claims on the statement of reimbursement. If the Secretary does not make such determination within the 11 business-day period, then the proposal to resolve the discrepancy shall be accepted. If the Secretary determines within such period that there is not a reasonable basis to include or remove claims on the statement of reimbursement, the proposal shall be rejected. If the Secretary determines within such period that there is a reasonable basis to conclude there is a discrepancy, the Secretary must respond in a timely manner by agreeing to the proposal to resolve the discrepancy or by providing documentation showing with good cause why the Secretary is not agreeing to such proposal and establishing an alternate discrepancy resolution. In no case shall the process under this subclause be treated as an appeals process or as establishing a right of appeal for a statement of reimbursement amount and there shall be no administrative or judicial review of the Secretary's determinations under this subclause.
(V) Protected period
In subclause (III), the term "protected period" means, with respect to a settlement, judgment, award or other payment relating to an injury or incident, the portion (if any) of the period beginning on the date of notice under subclause (I) with respect to such settlement, judgment, award, or other payment that is after the end of a Secretarial response period beginning on the date of such notice to the Secretary. Such Secretarial response period shall be a period of 65 days, except that such period may be extended by the Secretary for a period of an additional 30 days if the Secretary determines that additional time is required to address claims for which payment has been made. Such Secretarial response period shall be extended and shall not include any days for any part of which the Secretary determines (in accordance with regulations) that there was a failure in the claims and payment posting system and the failure was justified due to exceptional circumstances (as defined in such regulations). Such regulations shall define exceptional circumstances in a manner so that not more than 1 percent of the repayment obligations under this subclause would qualify as exceptional circumstances.
(VI) Effective date
The Secretary shall promulgate final regulations to carry out this clause not later than 9 months after January 10, 2013.
(VII) Website including successor technology
In this clause, the term "website" includes any successor technology.
(viii) Right of appeal for secondary payer determinations relating to liability insurance (including self-insurance), no fault insurance, and workers' compensation laws and plans
The Secretary shall promulgate regulations establishing a right of appeal and appeals process, with respect to any determination under this subsection for a payment made under this subchapter for an item or service for which the Secretary is seeking to recover conditional payments from an applicable plan (as defined in paragraph (8)(F)) that is a primary plan under subsection (A)(ii),5 under which the applicable plan involved, or an attorney, agent, or third party administrator on behalf of such plan, may appeal such determination. The individual furnished such an item or service shall be notified of the plan's intent to appeal such determination6
(C) Treatment of questionnaires
The Secretary may not fail to make payment under subparagraph (A) solely on the ground that an individual failed to complete a questionnaire concerning the existence of a primary plan.
(3) Enforcement
(A) Private cause of action
There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).
(B) Reference to excise tax with respect to nonconforming group health plans
For provision imposing an excise tax with respect to nonconforming group health plans, see section 5000 of the Internal Revenue Code of 1986.
(C) Prohibition of financial incentives not to enroll in a group health plan or a large group health plan
It is unlawful for an employer or other entity to offer any financial or other incentive for an individual entitled to benefits under this subchapter not to enroll (or to terminate enrollment) under a group health plan or a large group health plan which would (in the case of such enrollment) be a primary plan (as defined in paragraph (2)(A)). Any entity that violates the previous sentence is subject to a civil money penalty of not to exceed $5,000 for each such violation. The provisions of
(4) Coordination of benefits
Where payment for an item or service by a primary plan is less than the amount of the charge for such item or service and is not payment in full, payment may be made under this subchapter (without regard to deductibles and coinsurance under this subchapter) for the remainder of such charge, but—
(A) payment under this subchapter may not exceed an amount which would be payable under this subchapter for such item or service if paragraph (2)(A) did not apply; and
(B) payment under this subchapter, when combined with the amount payable under the primary plan, may not exceed—
(i) in the case of an item or service payment for which is determined under this subchapter on the basis of reasonable cost (or other cost-related basis) or under
(ii) in the case of an item or service for which payment is authorized under this subchapter on another basis—
(I) the amount which would be payable under the primary plan (without regard to deductibles and coinsurance under such plan), or
(II) the reasonable charge or other amount which would be payable under this subchapter (without regard to deductibles and coinsurance under this subchapter),
whichever is greater.
(5) Identification of secondary payer situations
(A) Requesting matching information
(i) Commissioner of Social Security
The Commissioner of Social Security shall, not less often than annually, transmit to the Secretary of the Treasury a list of the names and TINs of medicare beneficiaries (as defined in section 6103(l)(12) of the Internal Revenue Code of 1986) and request that the Secretary disclose to the Commissioner the information described in subparagraph (A) of such section.
(ii) Administrator
The Administrator of the Centers for Medicare & Medicaid Services shall request, not less often than annually, the Commissioner of the Social Security Administration to disclose to the Administrator the information described in subparagraph (B) of section 6103(l)(12) of the Internal Revenue Code of 1986.
(B) Disclosure to fiscal intermediaries and carriers
In addition to any other information provided under this subchapter to fiscal intermediaries and carriers, the Administrator shall disclose to such intermediaries and carriers (or to such a single intermediary or carrier as the Secretary may designate) the information received under subparagraph (A) for purposes of carrying out this subsection.
(C) Contacting employers
(i) In general
With respect to each individual (in this subparagraph referred to as an "employee") who was furnished a written statement under section 6051 of the Internal Revenue Code of 1986 by a qualified employer (as defined in section 6103(l)(12)(E)(iii) of such Code), as disclosed under subparagraph (B), the appropriate fiscal intermediary or carrier shall contact the employer in order to determine during what period the employee or employee's spouse may be (or have been) covered under a group health plan of the employer and the nature of the coverage that is or was provided under the plan (including the name, address, and identifying number of the plan).
(ii) Employer response
Within 30 days of the date of receipt of the inquiry, the employer shall notify the intermediary or carrier making the inquiry as to the determinations described in clause (i). An employer (other than a Federal or other governmental entity) who willfully or repeatedly fails to provide timely and accurate notice in accordance with the previous sentence shall be subject to a civil money penalty of not to exceed $1,000 for each individual with respect to which such an inquiry is made. The provisions of
(D) Obtaining information from beneficiaries
Before an individual applies for benefits under part A or enrolls under part B, the Administrator shall mail the individual a questionnaire to obtain information on whether the individual is covered under a primary plan and the nature of the coverage provided under the plan, including the name, address, and identifying number of the plan.
(E) End date
The provisions of this paragraph shall not apply to information required to be provided on or after July 1, 2016.
(6) Screening requirements for providers and suppliers
(A) In general
Notwithstanding any other provision of this subchapter, no payment may be made for any item or service furnished under part B unless the entity furnishing such item or service completes (to the best of its knowledge and on the basis of information obtained from the individual to whom the item or service is furnished) the portion of the claim form relating to the availability of other health benefit plans.
(B) Penalties
An entity that knowingly, willfully, and repeatedly fails to complete a claim form in accordance with subparagraph (A) or provides inaccurate information relating to the availability of other health benefit plans on a claim form under such subparagraph shall be subject to a civil money penalty of not to exceed $2,000 for each such incident. The provisions of
(7) Required submission of information by group health plans
(A) Requirement
On and after the first day of the first calendar quarter beginning after the date that is 1 year after December 29, 2007, an entity serving as an insurer or third party administrator for a group health plan, as defined in paragraph (1)(A)(v), and, in the case of a group health plan that is self-insured and self-administered, a plan administrator or fiduciary, shall—
(i) secure from the plan sponsor and plan participants such information as the Secretary shall specify for the purpose of identifying situations where the group health plan is or has been—
(I) a primary plan to the program under this subchapter; or
(II) for calendar quarters beginning on or after January 1, 2020, a primary payer with respect to benefits relating to prescription drug coverage under part D; and
(ii) submit such information to the Secretary in a form and manner (including frequency) specified by the Secretary.
(B) Enforcement
(i) In general
An entity, a plan administrator, or a fiduciary described in subparagraph (A) that fails to comply with the requirements under such subparagraph shall be subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information under such subparagraph should have been submitted. The provisions of subsections (e) and (k) of
(ii) Deposit of amounts collected
Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund under
(C) Sharing of information
Notwithstanding any other provision of law, under terms and conditions established by the Secretary, the Secretary—
(i) shall share information on entitlement under part A and enrollment under part B under this subchapter with entities, plan administrators, and fiduciaries described in subparagraph (A);
(ii) may share the entitlement and enrollment information described in clause (i) with entities and persons not described in such clause; and
(iii) may share information collected under this paragraph as necessary for purposes of the proper coordination of benefits.
(D) Implementation
Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise.
(8) Required submission of information by or on behalf of liability insurance (including self-insurance), no fault insurance, and workers' compensation laws and plans
(A) Requirement
On and after the first day of the first calendar quarter beginning after the date that is 18 months after December 29, 2007, an applicable plan shall—
(i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this subchapter on any basis; and
(ii) if the claimant is determined to be so entitled, submit the information described in subparagraph (B) with respect to the claimant to the Secretary in a form and manner (including frequency) specified by the Secretary.
(B) Required information
The information described in this subparagraph is—
(i) the identity of the claimant for which the determination under subparagraph (A) was made; and
(ii) such other information as the Secretary shall specify in order to enable the Secretary to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim.
Not later than 18 months after January 10, 2013, the Secretary shall modify the reporting requirements under this paragraph so that an applicable plan in complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers, except that the deadline for such modification shall be extended by one or more periods (specified by the Secretary) of up to 1 year each if the Secretary notifies the committees of jurisdiction of the House of Representatives and of the Senate that the prior deadline for such modification, without such extension, threatens patient privacy or the integrity of the secondary payer program under this subsection. Any such deadline extension notice shall include information on the progress being made in implementing such modification and the anticipated implementation date for such modification.
(C) Timing
Information shall be submitted under subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).
(D) Claimant
For purposes of subparagraph (A), the term "claimant" includes—
(i) an individual filing a claim directly against the applicable plan; and
(ii) an individual filing a claim against an individual or entity insured or covered by the applicable plan.
(E) Enforcement
(i) In general
An applicable plan that fails to comply with the requirements under subparagraph (A) with respect to any claimant may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant. The provisions of subsections (e) and (k) of
(ii) Deposit of amounts collected
Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund.
(F) Applicable plan
In this paragraph, the term "applicable plan" means the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan, or arrangement:
(i) Liability insurance (including self-insurance).
(ii) No fault insurance.
(iii) Workers' compensation laws or plans.
(G) Sharing of information
(i) In general
The Secretary may share information collected under this paragraph as necessary for purposes of the proper coordination of benefits.
(ii) Specified information
In responding to any query made on or after the date that is 1 year after December 11, 2020, from an applicable plan related to a determination described in subparagraph (A)(i), the Secretary, notwithstanding any other provision of law, shall provide to such applicable plan—
(I) whether a claimant subject to the query is, or during the preceding 3-year period has been, entitled to benefits under the program under this subchapter on any basis; and
(II) to the extent applicable, the plan name and address of any Medicare Advantage plan under part C and any prescription drug plan under part D in which the claimant is enrolled or has been enrolled during such period.
(H) Implementation
Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise.
(I) Regulations
Not later than 60 days after January 10, 2013, the Secretary shall publish a notice in the Federal Register soliciting proposals, which will be accepted during a 60-day period, for the specification of practices for which sanctions will and will not be imposed under subparagraph (E), including not imposing sanctions for good faith efforts to identify a beneficiary pursuant to this paragraph under an applicable entity responsible for reporting information. After considering the proposals so submitted, the Secretary, in consultation with the Attorney General, shall publish in the Federal Register, including a 60-day period for comment, proposed specified practices for which such sanctions will and will not be imposed. After considering any public comments received during such period, the Secretary shall issue final rules specifying such practices.
(9) Exception
(A) In general
Clause (ii) of paragraph (2)(B) and any reporting required by paragraph (8) shall not apply with respect to any settlement, judgment, award, or other payment by an applicable plan arising from liability insurance (including self-insurance) and from alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) constituting a total payment obligation to a claimant of not more than the single threshold amount calculated by the Secretary under subparagraph (B) for the year involved.
(B) Annual computation of threshold
(i) In general
Not later than November 15 before each year, the Secretary shall calculate and publish a single threshold amount for settlements, judgments, awards, or other payments for obligations arising from liability insurance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) subject to this section for that year. The annual single threshold amount for a year shall be set such that the estimated average amount to be credited to the Medicare trust funds of collections of conditional payments from such settlements, judgments, awards, or other payments arising from liability insurance (including self-insurance) and for such alleged incidents subject to this section shall equal the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and for such alleged incidents subject to this section for the year. At the time of calculating, but before publishing, the single threshold amount for 2014, the Secretary shall inform, and seek review of, the Comptroller General of the United States with regard to such amount.
(ii) Publication
The Secretary shall include, as part of such publication for a year—
(I) the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and for such alleged incidents; and
(II) a summary of the methodology and data used by the Secretary in computing such threshold amount and such cost of collection.
(C) Exclusion of ongoing expenses
For purposes of this paragraph and with respect to a settlement, judgment, award, or other payment not otherwise addressed in clause (ii) of paragraph (2)(B) that includes ongoing responsibility for medical payments (excluding settlements, judgments, awards, or other payments made by a workers' compensation law or plan or no fault insurance), the amount utilized for calculation of the threshold described in subparagraph (A) shall include only the cumulative value of the medical payments made under this subchapter.
(D) Report to Congress
Not later than November 15 before each year, the Secretary shall submit to the Congress a report on the single threshold amount for settlements, judgments, awards, or other payments for conditional payment obligations arising from liability insurance (including self-insurance) and alleged incidents described in subparagraph (A) for that year and on the establishment and application of similar thresholds for such payments for conditional payment obligations arising from worker compensation cases and from no fault insurance cases subject to this section for the year. For each such report, the Secretary shall—
(i) calculate the threshold amount by using the methodology applicable to certain liability claims described in subparagraph (B); and
(ii) include a summary of the methodology and data used in calculating each threshold amount and the amount of estimated savings under this subchapter achieved by the Secretary implementing each such threshold.
(c) Drug products
No payment may be made under part B for any expenses incurred for—
(1) a drug product—
(A) which is described in section 107(c)(3) of the Drug Amendments of 1962,
(B) which may be dispensed only upon prescription,
(C) for which the Secretary has issued a notice of an opportunity for a hearing under subsection (e) of
(D) for which the Secretary has not determined there is a compelling justification for its medical need; and
(2) any other drug product—
(A) which is identical, related, or similar (as determined in accordance with section 310.6 of title 21 of the Code of Federal Regulations) to a drug product described in paragraph (1), and
(B) for which the Secretary has not determined there is a compelling justification for its medical need,
until such time as the Secretary withdraws such proposed order.
(d) Items or services provided for emergency medical conditions
For purposes of subsection (a)(1)(A), in the case of any item or service that is required to be provided pursuant to
(e) Item or service by excluded individual or entity or at direction of excluded physician; limitation of liability of beneficiaries with respect to services furnished by excluded individuals and entities
(1) No payment may be made under this subchapter with respect to any item or service (other than an emergency item or service, not including items or services furnished in an emergency room of a hospital) furnished—
(A) by an individual or entity during the period when such individual or entity is excluded pursuant to
(B) at the medical direction or on the prescription of a physician during the period when he is excluded pursuant to
(2) Where an individual eligible for benefits under this subchapter submits a claim for payment for items or services furnished by an individual or entity excluded from participation in the programs under this subchapter, pursuant to section 1320a–7, 1320a–7a, 1320c–5, 1320c–9 (as in effect on September 2, 1982), 1395u(j)(2), 1395y(d) (as in effect on August 18, 1987), or 1395cc of this title, and such beneficiary did not know or have reason to know that such individual or entity was so excluded, then, to the extent permitted by this subchapter, and notwithstanding such exclusion, payment shall be made for such items or services. In each such case the Secretary shall notify the beneficiary of the exclusion of the individual or entity furnishing the items or services. Payment shall not be made for items or services furnished by an excluded individual or entity to a beneficiary after a reasonable time (as determined by the Secretary in regulations) after the Secretary has notified the beneficiary of the exclusion of that individual or entity.
(f) Utilization guidelines for provision of home health services
The Secretary shall establish utilization guidelines for the determination of whether or not payment may be made, consistent with paragraph (1)(A) of subsection (a), under part A or part B for expenses incurred with respect to the provision of home health services, and shall provide for the implementation of such guidelines through a process of selective postpayment coverage review by intermediaries or otherwise.
(g) Contracts with quality improvement organizations
(1) The Secretary shall, in making the determinations under paragraphs (1) and (9) of subsection (a), and for the purposes of promoting the effective, efficient, and economical delivery of health care services, and of promoting the quality of services of the type for which payment may be made under this subchapter, enter into contracts with quality improvement organizations pursuant to part B of subchapter XI of this chapter.
(2) In addition to any funds otherwise available, there are appropriated to the Secretary, out of any monies in the Treasury not otherwise obligated, $200,000,000, to remain available until expended, for purposes of requiring multiple organizations described in paragraph (1) to provide to skilled nursing facilities (as defined in
(h) Waiver of electronic form requirement
(1) The Secretary—
(A) shall waive the application of subsection (a)(22) in cases in which—
(i) there is no method available for the submission of claims in an electronic form; or
(ii) the entity submitting the claim is a small provider of services or supplier; and
(B) may waive the application of such subsection in such unusual cases as the Secretary finds appropriate.
(2) For purposes of this subsection, the term "small provider of services or supplier" means—
(A) a provider of services with fewer than 25 full-time equivalent employees; or
(B) a physician, practitioner, facility, or supplier (other than provider of services) with fewer than 10 full-time equivalent employees.
(i) Awards and contracts for original research and experimentation of new and existing medical procedures; conditions
In order to supplement the activities of the Medicare Payment Advisory Commission under
(1) such procedure is not of sufficient commercial value to justify research and experimentation by a commercial organization;
(2) research and experimentation with respect to such procedure is not of a type that may appropriately be carried out by an institute, division, or bureau of the National Institutes of Health; and
(3) such procedure has the potential to be more cost-effective in the treatment of a condition than procedures currently in use with respect to such condition.
(j) Nonvoting members and experts
(1) Any advisory committee appointed to advise the Secretary on matters relating to the interpretation, application, or implementation of subsection (a)(1) shall assure the full participation of a nonvoting member in the deliberations of the advisory committee, and shall provide such nonvoting member access to all information and data made available to voting members of the advisory committee, other than information that—
(A) is exempt from disclosure pursuant to subsection (a) of
(B) the Secretary determines would present a conflict of interest relating to such nonvoting member.
(2) If an advisory committee described in paragraph (1) organizes into panels of experts according to types of items or services considered by the advisory committee, any such panel of experts may report any recommendation with respect to such items or services directly to the Secretary without the prior approval of the advisory committee or an executive committee thereof.
(k) Dental benefits under group health plans
(1) Subject to paragraph (2), a group health plan (as defined in subsection (a)(1)(A)(v)) 7 providing supplemental or secondary coverage to individuals also entitled to services under this subchapter shall not require a medicare claims determination under this subchapter for dental benefits specifically excluded under subsection (a)(12) as a condition of making a claims determination for such benefits under the group health plan.
(2) A group health plan may require a claims determination under this subchapter in cases involving or appearing to involve inpatient dental hospital services or dental services expressly covered under this subchapter pursuant to actions taken by the Secretary.
(l) National and local coverage determination process
(1) Factors and evidence used in making national coverage determinations
The Secretary shall make available to the public the factors considered in making national coverage determinations of whether an item or service is reasonable and necessary. The Secretary shall develop guidance documents to carry out this paragraph in a manner similar to the development of guidance documents under
(2) Timeframe for decisions on requests for national coverage determinations
In the case of a request for a national coverage determination that—
(A) does not require a technology assessment from an outside entity or deliberation from the Medicare Coverage Advisory Committee, the decision on the request shall be made not later than 6 months after the date of the request; or
(B) requires such an assessment or deliberation and in which a clinical trial is not requested, the decision on the request shall be made not later than 9 months after the date of the request.
(3) Process for public comment in national coverage determinations
(A) Period for proposed decision
Not later than the end of the 6-month period (or 9-month period for requests described in paragraph (2)(B)) that begins on the date a request for a national coverage determination is made, the Secretary shall make a draft of proposed decision on the request available to the public through the Internet website of the Centers for Medicare & Medicaid Services or other appropriate means.
(B) 30-day period for public comment
Beginning on the date the Secretary makes a draft of the proposed decision available under subparagraph (A), the Secretary shall provide a 30-day period for public comment on such draft.
(C) 60-day period for final decision
Not later than 60 days after the conclusion of the 30-day period referred to under subparagraph (B), the Secretary shall—
(i) make a final decision on the request;
(ii) include in such final decision summaries of the public comments received and responses to such comments;
(iii) make available to the public the clinical evidence and other data used in making such a decision when the decision differs from the recommendations of the Medicare Coverage Advisory Committee; and
(iv) in the case of a final decision under clause (i) to grant the request for the national coverage determination, the Secretary shall assign a temporary or permanent code (whether existing or unclassified) and implement the coding change.
(4) Consultation with outside experts in certain national coverage determinations
With respect to a request for a national coverage determination for which there is not a review by the Medicare Coverage Advisory Committee, the Secretary shall consult with appropriate outside clinical experts.
(5) Local coverage determination process
(A) Plan to promote consistency of coverage determinations
The Secretary shall develop a plan to evaluate new local coverage determinations to determine which determinations should be adopted nationally and to what extent greater consistency can be achieved among local coverage determinations.
(B) Consultation
The Secretary shall require the fiscal intermediaries or carriers providing services within the same area to consult on all new local coverage determinations within the area.
(C) Dissemination of information
The Secretary should serve as a center to disseminate information on local coverage determinations among fiscal intermediaries and carriers to reduce duplication of effort.
(D) Local coverage determinations
The Secretary shall require each Medicare administrative contractor that develops a local coverage determination to make available on the Internet website of such contractor and on the Medicare Internet website, at least 45 days before the effective date of such determination, the following information:
(i) Such determination in its entirety.
(ii) Where and when the proposed determination was first made public.
(iii) Hyperlinks to the proposed determination and a response to comments submitted to the contractor with respect to such proposed determination.
(iv) A summary of evidence that was considered by the contractor during the development of such determination and a list of the sources of such evidence.
(v) An explanation of the rationale that supports such determination.
(6) National and local coverage determination defined
For purposes of this subsection—
(A) National coverage determination
The term "national coverage determination" means a determination by the Secretary with respect to whether or not a particular item or service is covered nationally under this subchapter.
(B) Local coverage determination
The term "local coverage determination" has the meaning given that in
(m) Coverage of routine costs associated with certain clinical trials of category A devices
(1) In general
In the case of an individual entitled to benefits under part A, or enrolled under part B, or both who participates in a category A clinical trial, the Secretary shall not exclude under subsection (a)(1) payment for coverage of routine costs of care (as defined by the Secretary) furnished to such individual in the trial.
(2) Category A clinical trial
For purposes of paragraph (1), a "category A clinical trial" means a trial of a medical device if—
(A) the trial is of an experimental/investigational (category A) medical device (as defined in regulations under section 405.201(b) of title 42, Code of Federal Regulations (as in effect as of September 1, 2003));
(B) the trial meets criteria established by the Secretary to ensure that the trial conforms to appropriate scientific and ethical standards; and
(C) in the case of a trial initiated before January 1, 2010, the device involved in the trial has been determined by the Secretary to be intended for use in the diagnosis, monitoring, or treatment of an immediately life-threatening disease or condition.
(n) Requirement of a surety bond for certain providers of services and suppliers
(1) In general
The Secretary may require a provider of services or supplier described in paragraph (2) to provide the Secretary on a continuing basis with a surety bond in a form specified by the Secretary in an amount (not less than $50,000) that the Secretary determines is commensurate with the volume of the billing of the provider of services or supplier. The Secretary may waive the requirement of a bond under the preceding sentence in the case of a provider of services or supplier that provides a comparable surety bond under State law.
(2) Provider of services or supplier described
A provider of services or supplier described in this paragraph is a provider of services or supplier the Secretary determines appropriate based on the level of risk involved with respect to the provider of services or supplier, and consistent with the surety bond requirements under
(o) Suspension of payments pending investigation of credible allegations of fraud
(1) In general
The Secretary may suspend payments to a provider of services or supplier under this subchapter pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments.
(2) Consultation
The Secretary shall consult with the Inspector General of the Department of Health and Human Services in determining whether there is a credible allegation of fraud against a provider of services or supplier.
(3) Promulgation of regulations
The Secretary shall promulgate regulations to carry out this subsection, section 1395w–112(b)(7) of this section (including as applied pursuant to
(4) Credible allegation of fraud
In carrying out this subsection,
(Aug. 14, 1935, ch. 531, title XVIII, §1862, as added
Editorial Notes
References in Text
The Assisted Suicide Funding Restriction Act of 1997, referred to in subsec. (a)(16), is
The Internal Revenue Code of 1986, referred to in subsec. (b), is classified generally to Title 26, Internal Revenue Code.
Section 107(c)(3) of the Drug Amendments of 1962, referred to in subsec. (c)(1)(A), is section 107(c)(3) of
Codification
Amendments by section 301(a) to (c) of
Amendments
2022—Subsec. (b)(1)(E)(iv).
2021—Subsec. (g).
2020—Subsec. (b)(8)(G).
2018—Subsec. (b)(7)(A)(i).
Subsec. (o)(3).
Subsec. (o)(4).
2016—Subsec. (l)(5)(D).
2015—Subsec. (b)(5)(E).
2014—Subsec. (b)(9)(B)(i).
2013—Subsec. (b)(2)(B)(ii).
Subsec. (b)(2)(B)(iii).
Subsec. (b)(2)(B)(vii), (viii).
Subsec. (b)(8)(B).
Subsec. (b)(8)(E)(i).
Subsec. (b)(8)(I).
Subsec. (b)(9).
2011—Subsecs. (a)(15)(A), (g).
2010—Subsec. (a)(1)(P).
Subsec. (a)(7).
Subsec. (a)(25).
Subsec. (n).
Subsec. (o).
2008—Subsec. (a)(1)(A).
Subsec. (a)(1)(K).
Subsec. (a)(1)(O).
Subsec. (a)(20).
Subsec. (a)(23).
Subsec. (a)(24).
2007—Subsec. (b)(7), (8).
2006—Subsec. (a)(1)(N).
2003—Subsec. (a).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(L).
Subsec. (a)(1)(M).
Subsec. (a)(7).
Subsec. (b)(1)(A).
Subsec. (b)(2)(A).
Subsec. (b)(2)(A)(ii).
Subsec. (b)(2)(B)(i).
Subsec. (b)(2)(B)(ii).
Subsec. (b)(2)(B)(iii).
Subsec. (b)(2)(B)(iv) to (vi).
Subsec. (b)(3)(A).
Subsec. (b)(5)(A)(ii).
Subsec. (d).
Subsec. (j).
Subsec. (j)(1).
Subsec. (k).
Subsec. (l).
Subsec. (m).
2001—Subsec. (a)(22).
Subsec. (h).
2000—Subsec. (a).
Subsec. (a)(1)(F).
Subsec. (a)(3).
Subsec. (a)(18).
1999—Subsec. (a)(7).
Subsec. (a)(21).
1997—Subsec. (a)(1)(D).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I).
Subsec. (a)(7).
Subsec. (a)(14).
Subsec. (a)(16).
Subsec. (a)(17).
Subsec. (a)(18).
Subsec. (a)(19).
Subsec. (a)(20).
Subsec. (a)(21).
Subsec. (b)(1)(B)(i).
Subsec. (b)(1)(B)(iii), (iv).
Subsec. (b)(1)(C).
Subsec. (b)(1)(F).
Subsec. (b)(2)(B)(ii).
Subsec. (b)(2)(B)(v).
Subsec. (b)(5)(C)(iii).
Subsec. (i).
1996—Subsec. (b)(5)(B).
"(i) subparagraph (A), and
"(ii)
for purposes of carrying out this subsection".
Subsec. (b)(5)(C)(i).
Subsec. (h).
1994—Subsec. (a)(1)(F).
Subsec. (a)(14).
Subsec. (a)(15).
Subsec. (a)(16).
Subsec. (b)(1)(A)(i)(II).
Subsec. (b)(1)(A)(ii).
Subsec. (b)(1)(A)(v).
Subsec. (b)(1)(C).
Subsec. (b)(2)(B)(i).
Subsec. (b)(2)(C).
Subsec. (b)(3)(C).
Subsec. (b)(5)(C)(i).
Subsec. (b)(5)(D).
Subsec. (b)(6).
1993—Subsec. (b)(1)(A)(i).
"(I) may not take into account, for any item or service furnished to an individual 65 years of age or older at the time the individual is covered under the plan by reason of the current employment of the individual (or the individual's spouse), that the individual is entitled to benefits under this subchapter under
"(II) shall provide that any employee age 65 or older, and any employee's spouse age 65 or older, shall be entitled to the same benefits under the plan under the same conditions as any employee, and the spouse of such employee, under age 65."
Subsec. (b)(1)(A)(ii).
Subsec. (b)(1)(A)(iii).
Subsec. (b)(1)(A)(iv).
Subsec. (b)(1)(A)(v).
Subsec. (b)(1)(B).
Subsec. (b)(1)(B)(i).
Subsec. (b)(1)(B)(ii).
Subsec. (b)(1)(B)(iii).
Subsec. (b)(1)(B)(iv).
Subsec. (b)(1)(C).
Subsec. (b)(1)(E).
Subsec. (b)(5)(B).
Subsec. (b)(5)(C)(i).
Subsec. (b)(5)(C)(iii).
1990—Subsec. (a).
Subsec. (a)(1)(A).
Subsec. (a)(1)(F).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(7).
Subsec. (a)(14).
Subsec. (a)(15).
Subsec. (b)(1)(B)(iii).
Subsec. (b)(1)(C).
Subsec. (b)(1)(C)(i).
"(I) the month in which a regular course of renal dialysis is initiated, or
"(II) in the case of an individual who receives a kidney transplant, the first month in which he would be eligible for benefits under part A of this subchapter (if he had filed an application for such benefits) under the provisions of
Subsec. (b)(3)(C).
Subsec. (b)(5)(C)(iii).
1989—
Subsec. (a)(1)(A).
Subsec. (a)(1)(E).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G), (6), (7).
Subsec. (a)(14).
Subsec. (b).
Subsec. (b)(1)(D).
Subsec. (b)(5).
Subsec. (c).
Subsec. (e)(1).
1988—Subsec. (a)(1)(A).
Subsec. (a)(1)(F).
Subsec. (a)(1)(G).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(15).
Subsec. (c).
Subsec. (e)(1).
Subsec. (e)(2).
1987—Subsec. (a)(1)(A).
Subsec. (a)(8).
Subsec. (a)(14).
Subsec. (b)(2)(A)(ii).
Subsec. (b)(4)(B)(i).
Subsec. (d).
Subsec. (e) [formerly §1395aaa].
Subsec. (h)(1)(B).
Subsec. (h)(1)(D).
Subsec. (h)(2)(C).
Subsec. (h)(4).
Subsec. (h)(4)(B).
1986—Subsec. (a)(1)(E).
Subsec. (a)(14).
Subsec. (a)(15).
Subsec. (a)(16).
Subsec. (b)(2)(A).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(iii).
Subsec. (b)(3)(A)(iv).
Subsec. (b)(4).
Subsec. (b)(5).
1984—Subsec. (a)(12).
Subsec. (b)(1).
Subsec. (b)(2)(B).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(3)(A)(iii).
Subsec. (h).
Subsec. (i).
1983—Subsec. (a)(1)(A).
Subsec. (a)(1)(D).
Subsec. (a)(14).
Subsec. (b)(3)(A)(i).
1982—Subsec. (a)(1).
Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(9).
Subsec. (b)(1).
Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
Subsec. (b)(3).
Subsec. (d)(1)(C).
Subsec. (f).
Subsec. (g).
1981—Subsec. (b).
Subsec. (c).
Subsec. (f).
1980—Subsec. (a)(1).
Subsec. (a)(7).
Subsec. (a)(12).
Subsec. (a)(13)(C).
Subsec. (b).
Subsec. (d)(4).
Subsec. (e).
1977—Subsec. (a)(3).
Subsec. (d)(1)(B).
Subsec. (d)(1)(C).
Subsec. (d)(4).
Subsec. (e).
1975—Subsec. (c).
1974—Subsec. (c).
1973—Subsec. (a)(12).
1972—Subsec. (a)(4).
Subsec. (a)(12).
Subsec. (c).
Subsec. (d).
1968—Subsec. (a)(7).
Subsec. (a)(13).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Amendment by section 2008(c), (d) of
Effective Date of 2016 Amendment
Effective Date of 2015 Amendment
Effective Date of 2013 Amendment
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2010 Amendment
Amendment by section 4103(d) of
Effective Date of 2008 Amendment
Amendment by section 101(a)(3), (b)(3), (4) of
Amendment by section 143(b)(7) of
Amendment by section 152(b)(1)(D) of
Effective Date of 2006 Amendment
Amendment by
Effective Date of 2003 Amendment
"(1) in the case of subsection (a), as if included in the enactment of title III [sic] of the Medicare and Medicaid Budget Reconciliation Amendments of 1984 (
"(2) in the case of subsections (b) and (c), as if included in the enactment of section 953 of the Omnibus Reconciliation Act of 1980 (
Amendment by section 611(d)(1) of
Amendment by section 612(c) of
Amendment by section 613(c) of
Amendment by section 948(a) of
Effective Date of 2001 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title I, §102(c)] of
Amendment by section 1(a)(6) [title III, §313(a)] of
Amendment by section 1(a)(6) [title IV, §432(b)(1)] of
Amendment by section 1(a)(6) [title V, §522(b)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §305(b)] of
Amendment by section 1000(a)(6) [title III, §321(k)(10)] of
Effective Date of 1997 Amendment
Amendment by
Amendment by section 4022(b)(1)(B) of
Amendment by section 4102(c) of
Amendment by section 4103(c) of
Amendment by section 4104(c)(3) of
Amendment by section 4201(c)(1) of
Amendment by section 4432(b)(1) of
Amendment by section 4507(a)(2)(B) of
Amendment by section 4511(a)(2)(C) of
Amendment by section 4541(b) of
Amendment by section 4603(c)(2)(C) of
Effective Date of 1994 Amendment
Amendment by section 145(c)(1) of
Amendment by section 147(e)(6) of
Amendment by section 156(a)(2)(D) of
Effective Date of 1993 Amendment
Amendment by section 13561(d)(1) of
Effective Date of 1990 Amendment
Amendment by section 4153(b)(2)(B) of
Amendment by section 4157(c)(1) of
Amendment by section 4161(a)(3)(C) of
Amendment by section 4163(d)(2)(A)(i)–(iii), (B) of
Effective Date of 1989 Amendment
Amendment by section 6115(b) of
Amendment by section 6202(b)(1) of
Amendment by
Effective Date of 1988 Amendment
Amendment by
Amendment by section 202(d) of
Amendment by section 204(d)(2) of
Amendment by section 205(e)(1) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
For effective date of amendment by section 4072(c) of
Amendment by
Effective Date of 1986 Amendment
"(1) Except as provided in paragraph (2), the amendments made by this section [enacting
"(2) The amendments made by subsection (c) [amending
Amendment by section 9320(h)(1) of
Amendment by section 9343(c)(1) of
Amendment by section 9307(a) of
Effective Date of 1984 Amendment
Amendment by section 2304(c) of
Amendment by section 2354(b)(30), (31) of
Effective Date of 1983 Amendment
Amendment by section 601(f) of
Amendment by
Effective Date of 1982 Amendment
Amendment by section 116(b) of
Amendment by section 122(f), (g)(1) of
Amendment by section 128(a)(2)–(4) of
Amendment by sections 142 and 148(a) of
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Amendment by
Amendment by section 936(c) of
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1973 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by section 211(c)(1) of
Amendment by section 256(c) of
Effective Date of 1968 Amendment
Amendment by section 127(b) of
Construction of 2008 Amendment
For construction of amendment by section 153(b)(2) of
Construction of 2007 Amendment
Construction of 2003 Amendment
Application of 2003 Amendment to Physician Specialties
Amendment by section 303 of
Notwithstanding section 303(j) of
Treatment of Hospitals for Certain Services Under Medicare Secondary Payor (MSP) Provisions
"(a)
"(b)
Annual Publication of List of National Coverage Determinations
Notification to Physicians of Excessive Home Health Visits
Distribution of Questionnaire by Contractor
Retroactive Exemption for Certain Situations Involving Religious Orders
GAO Study of Extension of Secondary Payer Period
Deadline for First Transmittal and Request of Matching Information
"(i) transmit to the Secretary of the Treasury information under paragraph (5)(A)(i) of section 1862(b) of the Social Security Act [
"(ii) request from the Secretary disclosure of information described in section 6013(l)(12)(A) of the Internal Revenue Code of 1986 [
by not later than 14 days after the date of the enactment of this Act [Dec. 19, 1989]."
Designation of Pediatric Hospitals as Meeting Certification as Heart Transplant Facility
"(1) the hospital's pediatric heart transplant program is operated jointly by the hospital and another facility that meets such criteria,
"(2) the unified program shares the same transplant surgeons and quality assurance program (including oversight committee, patient protocol, and patient selection criteria), and
"(3) the hospital demonstrates to the satisfaction of the Secretary that it is able to provide the specialized facilities, services, and personnel that are required by pediatric heart transplant patients."
Approval of Surgical Assistants for Procedures Performed April 1, 1986, to December 15, 1986
Extending Waiver of Liability Provisions to Hospice Programs
"(1)
"(2)
[
Study of Impact on Disabled Beneficiaries and Family of Amendments Relating to Large Group Health Plans and Medicare as Secondary Payer
Reinstatement of Waiver of Liability Presumption
Home Health Waiver of Liability
[
Recommendations and Guidelines for Elimination of Assistants at Surgery; Report to Congress
Pacemaker Reimbursement Review and Reform; Promulgation of Regulations; Effective Date of Pacemaker Registration
Payment for Debridement of Mycotic Toenails
Interim Waiver in Certain Cases of Billing Rule for Items and Services Other Than Physicians' Services
"(1) The Secretary of Health and Human Services may, for any cost reporting period beginning prior to October 1, 1986, waive the requirements of sections 1862(a)(14) and 1866(a)(1)(H) of the Social Security Act [
"(2) In the case of a hospital which is receiving payments pursuant to a waiver under paragraph (1), payment of the adjustment for indirect costs of approved educational activities shall be made as if the hospital were receiving under part A of title XVIII of the Social Security Act all the payments which are made under part B of such title solely by reason of such waiver.
"(3) Any waiver granted under paragraph (1) shall provide that, with respect to those items and services billed under part B of title XVIII of the Social Security Act solely by reason of such waiver—
"(A) payment under such part shall be equal to 100 percent of the reasonable charge or other applicable payment base for the items and services; and
"(B) the entity furnishing the items and services must agree to accept the amount paid pursuant to subparagraph (A) as the full charge for the items and services."
[
["(1) Section 602(k)(2) of the Social Security Amendments of 1983 (as added by subsection (a)) [set out above] shall apply to cost reporting periods beginning on or after January 1, 1986.
["(2) Section 602(k)(3) of the Social Security Amendments of 1983 (as added by subsection (a)) [set out above] shall apply to items and services furnished after the end of the 10-day period beginning on the date of the enactment of this Act [Apr. 7, 1986]."]
Prohibition of Payment for Ineffective Drugs
Establishment and Implementation of Guidelines
Report to Congressional Committees on Implementation of Certification Requirements Relating to Modification of Health Benefits Plan or Program; Failure To Submit Report
1 See References in Text note below.
2 So in original. The comma probably should not appear.
3 So in original. Probably should be "made,".
4 So in original. Probably should be"subparagraph (A)".
5 So in original. Probably should be "subparagraph (A),".
6 So in original. Probably should be followed by a period.
7 So in original. Probably should be "(b)(1)(A)(v))".
§1395z. Consultation with State agencies and other organizations to develop conditions of participation for providers of services
In carrying out his functions, relating to determination of conditions of participation by providers of services, under subsections (e)(9), (f)(4), (j)(15),1 (o)(6), (cc)(2)(I), and 2 (dd)(2), and (mm)(1) of
(Aug. 14, 1935, ch. 531, title XVIII, §1863, as added
Editorial Notes
References in Text
Subsection (j) of
Amendments
1994—
1990—
1989—
1988—
1984—
1982—
1980—
1972—
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by section 203(e)(2) of
Amendment by section 204(c)(1) of
Effective Date of 1984 Amendment
Amendment by section 2335(c) of
Amendment by section 2349(b)(1) of
Amendment by section 2354(b)(32) of
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by section 933(f) of
Effective Date of 1972 Amendment
Amendment by
Termination of Advisory Councils
Advisory councils in existence on Jan. 5, 1973, to terminate not later than the expiration of the 2-year period following Jan. 5, 1973, unless, in the case of a council established by the President or an officer of the Federal Government, such council is renewed by appropriate action prior to the expiration of such 2-year period, or in the case of a council established by the Congress, its duration is otherwise provided by law. See
1 See References in Text note below.
2 So in original. The word "and" probably should not appear.
§1395aa. Agreements with States
(a) Use of State agencies to determine compliance by providers of services with conditions of participation
The Secretary shall make an agreement with any State which is able and willing to do so under which the services of the State health agency or other appropriate State agency (or the appropriate local agencies) will be utilized by him for the purpose of determining whether an institution therein is a hospital or skilled nursing facility, or whether an agency therein is a home health agency, or whether an agency is a hospice program or whether a facility therein is a rural health clinic as defined in
(b) Payment in advance or by way of reimbursement to State for performance of functions of subsection (a)
The Secretary shall pay any such State, in advance or by way of reimbursement, as may be provided in the agreement with it (and may make adjustments in such payments on account of overpayments or underpayments previously made), for the reasonable cost of performing the functions specified in subsection (a), and for the Federal Hospital Insurance Trust Fund's fair share of the costs attributable to the planning and other efforts directed toward coordination of activities in carrying out its agreement and other activities related to the provision of services similar to those for which payment may be made under part A, or related to the facilities and personnel required for the provision of such services, or related to improving the quality of such services.
(c) Use of State or local agencies to survey hospitals
The Secretary is authorized to enter into an agreement with any State under which the appropriate State or local agency which performs the certification function described in subsection (a) will survey, on a selective sample basis (or where the Secretary finds that a survey is appropriate because of substantial allegations of the existence of a significant deficiency or deficiencies which would, if found to be present, adversely affect health and safety of patients), provider entities that, pursuant to
(d) Fulfillment of requirements by States
The Secretary may not enter an agreement under this section with a State with respect to determining whether an institution therein is a skilled nursing facility unless the State meets the requirements specified in
(e) Prohibition of user fees for survey and certification
Notwithstanding any other provision of law, the Secretary may not impose, or require a State to impose, any fee on any facility or entity subject to a determination under subsection (a), or any renal dialysis facility subject to the requirements of
(Aug. 14, 1935, ch. 531, title XVIII, §1864, as added
Editorial Notes
Amendments
2020—Subsec. (a).
2008—Subsec. (c).
1997—Subsec. (a).
1996—Subsec. (c).
1994—Subsec. (a).
Subsec. (e).
1990—Subsec. (a).
Subsec. (e).
1989—Subsec. (a).
1988—Subsec. (a).
1987—Subsec. (a).
Subsec. (d).
1986—Subsec. (a).
1984—Subsec. (c).
1982—Subsec. (a).
1980—Subsec. (a).
1977—Subsec. (a).
1972—Subsec. (a).
Subsec. (c).
1968—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Amendment by section 125(d)(2) of
Effective Date of 2008 Amendment; Transition Rule
Amendment by
Effective Date of 1997 Amendment
Amendment by section 4106(c) of
Amendment by section 4201(c)(1) of
Effective Date of 1994 Amendment
Amendment by section 145(c)(3) of
Effective Date of 1990 Amendment
Amendment by section 4163(c)(2) of
Effective Date of 1989 Amendments
Amendment by section 6115(c) of
Amendment by
Effective Date of 1988 Amendments
Amendment by
Amendment by section 203(e)(3) of
Amendment by section 204(c)(2), (d)(3) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
For effective date of amendment by section 4072(d) of
Amendments by sections 4201(a)(2), (d)(4) and 4202(a)(1), (c) of
Amendment by section 4203(a)(1) of
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendments
Amendment by
For effective date of amendment by section 933(g) of
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1972 Amendment
Effective Date of 1968 Amendment
Amendment by section 133(f) of
Use of State or Local Agencies in Evaluating Laboratories
Nurse Aid Training and Competency Evaluation, Failure by State To Meet Guidelines
§1395bb. Effect of accreditation
(a) Accreditation by American Osteopathic Association or other national accreditation body
(1) If the Secretary finds that accreditation of a provider entity (as defined in paragraph (4)) by the American Osteopathic Association or any other national accreditation body demonstrates that all of the applicable conditions or requirements of this subchapter (other than the requirements of
(A) in the case of a provider entity not described in paragraph (3)(B), the Secretary shall treat such entity as meeting those conditions or requirements with respect to which the Secretary made such finding; or
(B) in the case of a provider entity described in paragraph (3)(B), the Secretary may treat such entity as meeting those conditions or requirements with respect to which the Secretary made such finding.
(2) In making such a finding, the Secretary shall consider, among other factors with respect to a national accreditation body, its requirements for accreditation, its survey procedures, its ability to provide adequate resources for conducting required surveys and supplying information for use in enforcement activities, its monitoring procedures for provider entities found out of compliance with the conditions or requirements, and its ability to provide the Secretary with necessary data for validation.
(3)(A) Except as provided in subparagraph (B), not later than 60 days after the date of receipt of a written request for a finding under paragraph (1) (with any documentation necessary to make a determination on the request), the Secretary shall publish a notice identifying the national accreditation body making the request, describing the nature of the request, and providing a period of at least 30 days for the public to comment on the request. The Secretary shall approve or deny a request for such a finding, and shall publish notice of such approval or denial, not later than 210 days after the date of receipt of the request (with such documentation). Such an approval shall be effective with respect to accreditation determinations made on or after such effective date (which may not be later than the date of publication of the approval) as the Secretary specifies in the publication notice.
(B) The 210-day and 60-day deadlines specified in subparagraph (A) shall not apply in the case of any request for a finding with respect to accreditation of a provider entity to which the conditions and requirements of
(4) For purposes of this section, the term "provider entity" means a provider of services, supplier, facility (including a renal dialysis facility), clinic, agency, or laboratory.
(b) Disclosure of accreditation survey
The Secretary may not disclose any accreditation survey (other than a survey with respect to a home health agency or, beginning on December 27, 2020, a hospice program) made and released to the Secretary by the American Osteopathic Association or any other national accreditation body, of an entity accredited by such body, except that the Secretary may disclose such a survey and information related to such a survey to the extent such survey and information relate to an enforcement action taken by the Secretary.
(c) Deficiencies
Notwithstanding any other provision of this subchapter, if the Secretary finds that a provider entity has significant deficiencies (as defined in regulations pertaining to health and safety), the entity shall, after the date of notice of such finding to the entity and for such period as may be prescribed in regulations, be deemed not to meet the conditions or requirements the entity has been treated as meeting pursuant to subsection (a)(1).
(d) State or local accreditation
For provisions relating to validation surveys of entities that are treated as meeting applicable conditions or requirements of this subchapter pursuant to subsection (a)(1), see
(e) Accreditation for dialysis facilities
With respect to an accreditation body that has received approval from the Secretary under subsection (a)(3)(A) for accreditation of provider entities that are required to meet the conditions and requirements under
(1) Validation surveys referred to in subsection (d).
(2) Accreditation program reviews (as defined in section 488.8(c) of title 42 of the Code of Federal Regulations, or a successor regulation).
(3) Performance reviews (as defined in section 488.8(a) of title 42 of the Code of Federal Regulations, or a successor regulation).
(Aug. 14, 1935, ch. 531, title XVIII, §1865, as added
Editorial Notes
Amendments
2020—Subsec. (b).
2018—Subsec. (a)(1).
Subsec. (a)(4).
Subsec. (e).
2008—Subsec. (a).
Subsec. (a)(1).
Subsec. (b).
Subsecs. (c), (d).
Subsec. (e).
2003—Subsec. (b)(3)(B).
1996—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
1994—Subsec. (a).
1990—Subsec. (a).
1989—Subsec. (a).
Subsec. (a)(2).
Subsec. (b).
1988—Subsec. (a).
1987—Subsec. (a).
1986—Subsec. (a).
1984—Subsec. (a).
1982—Subsec. (a).
Subsec. (b).
1972—
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment; Transition Rule
"(1) Subject to paragraph (2), the amendments made by this section [amending this section and
"(2) For purposes of title XVIII of the Social Security Act (
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1989 Amendment
"(1) Except as provided in paragraph (2), the amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [Dec. 19, 1989].
"(2) The amendments made by subsection (a) [amending this section] shall take effect 6 months after the date of the enactment of this Act."
Amendment by section 6115(c) of
Amendment by
Effective Date of 1988 Amendment
Amendment by
Amendment by section 204(c)(3), (d)(3) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4025(b) of
For effective date of amendment by section 4072(d) of
Effective Date of 1986 Amendment
Amendment by section 9305(c)(3) of
Amendment by section 9320(h)(3) of
Effective Date of 1984 Amendment
Effective Date of 1982 Amendment
Amendment by section 122(g)(4) of
Amendment by section 128(d)(3) of
Effective Date of 1972 Amendment
Amendment by section 234(h) of
Timing for Acceptance of Requests From Accreditation Organizations
Authority To Recognize the Joint Commission as a National Accreditation Body
§1395cc. Agreements with providers of services; enrollment processes
(a) Filing of agreements; eligibility for payment; charges with respect to items and services
(1) Any provider of services (except a fund designated for purposes of section 1395f(g) and
(A)(i) not to charge, except as provided in paragraph (2), any individual or any other person for items or services for which such individual is entitled to have payment made under this subchapter (or for which he would be so entitled if such provider of services had complied with the procedural and other requirements under or pursuant to this subchapter or for which such provider is paid pursuant to the provisions of
(B) not to charge any individual or any other person for items or services for which such individual is not entitled to have payment made under this subchapter because payment for expenses incurred for such items or services may not be made by reason of the provisions of paragraph (1) or (9) of
(C) to make adequate provision for return (or other disposition, in accordance with regulations) of any moneys incorrectly collected from such individual or other person,
(D) to promptly notify the Secretary of its employment of an individual who, at any time during the year preceding such employment, was employed in a managerial, accounting, auditing, or similar capacity (as determined by the Secretary by regulation) by an agency or organization which serves as a fiscal intermediary or carrier (for purposes of part A or part B, or both, of this subchapter) with respect to the provider,
(E) to release data with respect to patients of such provider upon request to an organization having a contract with the Secretary under part B of subchapter XI as may be necessary (i) to allow such organization to carry out its functions under such contract, or (ii) to allow such organization to carry out similar review functions under any contract the organization may have with a private or public agency paying for health care in the same area with respect to patients who authorize release of such data for such purposes,
(F)(i) in the case of hospitals which provide inpatient hospital services for which payment may be made under subsection (b), (c), or (d) of
(ii) in the case of hospitals, critical access hospitals, rural emergency hospitals, skilled nursing facilities, and home health agencies, to maintain an agreement with a quality improvement organization (which has a contract with the Secretary under part B of subchapter XI for the area in which the hospital, facility, or agency is located) to perform the functions described in paragraph (3)(A),
(G) in the case of hospitals which provide inpatient hospital services for which payment may be made under subsection (b) or (d) of
(H)(i) in the case of hospitals which provide services for which payment may be made under this subchapter and in the case of critical access hospitals which provide critical access hospital services, to have all items and services (other than physicians' services as defined in regulations for purposes of
(ii) in the case of skilled nursing facilities which provide covered skilled nursing facility services—
(I) that are furnished to an individual who is a resident of the skilled nursing facility during a period in which the resident is provided covered post-hospital extended care services (or, for services described in
(II) for which the individual is entitled to have payment made under this subchapter,
to have items and services (other than services described in
(I) in the case of a hospital, critical access hospital, or rural emergency hospital—
(i) to adopt and enforce a policy to ensure compliance with the requirements of
(ii) to maintain medical and other records related to individuals transferred to or from the hospital, critical access hospital, or rural emergency hospital for a period of five years from the date of the transfer, and
(iii) to maintain a list of physicians who are on call for duty after the initial examination to provide treatment necessary to stabilize an individual with an emergency medical condition,
(J) in the case of hospitals which provide inpatient hospital services for which payment may be made under this subchapter, to be a participating provider of medical care under any health plan contracted for under
(K) not to charge any individual or any other person for items or services for which payment under this subchapter is denied under
(L) in the case of hospitals which provide inpatient hospital services for which payment may be made under this subchapter, to be a participating provider of medical care under
(M) in the case of hospitals, to provide to each individual who is entitled to benefits under part A (or to a person acting on the individual's behalf), at or about the time of the individual's admission as an inpatient to the hospital, a written statement (containing such language as the Secretary prescribes consistent with this paragraph) which explains—
(i) the individual's rights to benefits for inpatient hospital services and for post-hospital services under this subchapter,
(ii) the circumstances under which such an individual will and will not be liable for charges for continued stay in the hospital,
(iii) the individual's right to appeal denials of benefits for continued inpatient hospital services, including the practical steps to initiate such an appeal, and
(iv) the individual's liability for payment for services if such a denial of benefits is upheld on appeal,
and which provides such additional information as the Secretary may specify,
(N) in the case of hospitals, critical access hospitals, and rural emergency hospitals—
(i) to make available to its patients the directory or directories of participating physicians (published under
(ii) if hospital personnel (including staff of any emergency or outpatient department) refer a patient to a nonparticipating physician for further medical care on an outpatient basis, the personnel must inform the patient that the physician is a nonparticipating physician and, whenever practicable, must identify at least one qualified participating physician who is listed in such a directory and from whom the patient may receive the necessary services,
(iii) to post conspicuously in any emergency department a sign (in a form specified by the Secretary) specifying rights of individuals under
(iv) to post conspicuously (in a form specified by the Secretary) information indicating whether or not the hospital, critical access hospital, or rural emergency hospital participates in the medicaid program under a State plan approved under subchapter XIX,
(O) to accept as payment in full for services that are covered under this subchapter and are furnished to any individual enrolled with a Medicare+Choice organization under part C, with a PACE provider under
(P) in the case of home health agencies which provide home health services to individuals entitled to benefits under this subchapter who require catheters, catheter supplies, ostomy bags, and supplies related to ostomy care (described in
(Q) in the case of hospitals, skilled nursing facilities, home health agencies, and hospice programs, to comply with the requirement of subsection (f) (relating to maintaining written policies and procedures respecting advance directives),
(R) to contract only with a health care clearinghouse (as defined in
(S) in the case of a hospital that has a financial interest (as specified by the Secretary in regulations) in an entity to which individuals are referred as described in
(i) the nature of such financial interest,
(ii) the number of individuals who were discharged from the hospital and who were identified as requiring home health services, and
(iii) the percentage of such individuals who received such services from such provider (or another such provider),
(T) in the case of hospitals and critical access hospitals, to furnish to the Secretary such data as the Secretary determines appropriate pursuant to subparagraph (E) of
(U) in the case of hospitals which furnish inpatient hospital services for which payment may be made under this subchapter, to be a participating provider of medical care both—
(i) under the contract health services program funded by the Indian Health Service and operated by the Indian Health Service, an Indian tribe, or tribal organization (as those terms are defined in
(ii) under any program funded by the Indian Health Service and operated by an urban Indian organization with respect to the purchase of items and services for an eligible urban Indian (as those terms are defined in such section 1603),
in accordance with regulations promulgated by the Secretary regarding admission practices, payment methodology, and rates of payment (including the acceptance of no more than such payment rate as payment in full for such items and services,2
(V) in the case of hospitals that are not otherwise subject to the Occupational Safety and Health Act of 1970 [
(W) in the case of a hospital described in
(X) maintain and, upon request of the Secretary, provide access to documentation relating to written orders or requests for payment for durable medical equipment, certifications for home health services, or referrals for other items or services written or ordered by the provider under this subchapter, as specified by the Secretary, and
(Y) beginning 12 months after August 6, 2015, in the case of a hospital or critical access hospital, with respect to each individual who receives observation services as an outpatient at such hospital or critical access hospital for more than 24 hours, to provide to such individual not later than 36 hours after the time such individual begins receiving such services (or, if sooner, upon release)—
(i) such oral explanation of the written notification described in clause (ii), and such documentation of the provision of such explanation, as the Secretary determines to be appropriate;
(ii) a written notification (as specified by the Secretary pursuant to rulemaking and containing such language as the Secretary prescribes consistent with this paragraph) which—
(I) explains the status of the individual as an outpatient receiving observation services and not as an inpatient of the hospital or critical access hospital and the reasons for such status of such individual;
(II) explains the implications of such status on services furnished by the hospital or critical access hospital (including services furnished on an inpatient basis), such as implications for cost-sharing requirements under this title and for subsequent eligibility for coverage under this title for services furnished by a skilled nursing facility;
(III) includes such additional information as the Secretary determines appropriate;
(IV) either—
(aa) is signed by such individual or a person acting on such individual's behalf to acknowledge receipt of such notification; or
(bb) if such individual or person refuses to provide the signature described in item (aa), is signed by the staff member of the hospital or critical access hospital who presented the written notification and includes the name and title of such staff member, a certification that the notification was presented, and the date and time the notification was presented; and
(V) is written and formatted using plain language and is made available in appropriate languages as determined by the Secretary.
In the case of a hospital which has an agreement in effect with an organization described in subparagraph (F), which organization's contract with the Secretary under part B of subchapter XI is terminated on or after October 1, 1984, the hospital shall not be determined to be out of compliance with the requirement of such subparagraph during the six month period beginning on the date of the termination of that contract.
(2)(A) A provider of services may charge such individual or other person (i) the amount of any deduction or coinsurance amount imposed pursuant to section 1395e(a)(1), (a)(3), or (a)(4), section 1395l(b), or
(B) Where a provider of services has furnished, at the request of such individual, items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this subchapter, such provider of services may also charge such individual or other person for such more expensive items or services to the extent that the amount customarily charged by it for the items or services furnished at such request exceeds the amount customarily charged by it for the items or services with respect to which payment may be made under this subchapter.
(C) A provider of services may in accordance with its customary practice also appropriately charge any such individual for any whole blood (or equivalent quantities of packed red blood cells, as defined under regulations) furnished him with respect to which a deductible is imposed under
(D) Where a provider of services customarily furnishes items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this subchapter, such provider, notwithstanding the preceding provisions of this paragraph, may not, under the authority of subparagraph (B)(ii) of this paragraph, charge any individual or other person any amount for such items or services in excess of the amount of the payment which may otherwise be made for such items or services under this subchapter if the admitting physician has a direct or indirect financial interest in such provider.
(3)(A) Under the agreement required under paragraph (1)(F)(ii), the quality improvement organization must perform functions (other than those covered under an agreement under paragraph (1)(F)(i)) under the third sentence of
(B) For purposes of payment under this subchapter, the cost of such an agreement to the hospital, critical access hospital, rural emergency hospital, facility, or agency shall be considered a cost incurred by such hospital, critical access hospital, rural emergency hospital, facility, or agency in providing covered services under this subchapter and shall be paid directly by the Secretary to the quality improvement organization on behalf of such hospital, critical access hospital, rural emergency hospital, facility, or agency in accordance with a schedule established by the Secretary.
(C) Such payments—
(i) shall be transferred in appropriate proportions from the Federal Hospital Insurance Trust Fund and from the Federal Supplementary Medical Insurance Trust Fund, without regard to amounts appropriated in advance in appropriation Acts, in the same manner as transfers are made for payment for services provided directly to beneficiaries, and
(ii) shall not be less in the aggregate for a fiscal year—
(I) in the case of hospitals, than the amount specified in paragraph (1)(F)(i)(III), and
(II) in the case of facilities, critical access hospitals, rural emergency hospitals, and agencies, than the amounts the Secretary determines to be sufficient to cover the costs of such organizations' conducting the activities described in subparagraph (A) with respect to such facilities, critical access hospitals, rural emergency hospitals, or agencies under part B of subchapter XI.
(b) Termination or nonrenewal of agreements
(1) A provider of services may terminate an agreement with the Secretary under this section at such time and upon such notice to the Secretary and the public as may be provided in regulations, except that notice of more than six months shall not be required.
(2) The Secretary may refuse to enter into an agreement under this section or, upon such reasonable notice to the provider and the public as may be specified in regulations, may refuse to renew or may terminate such an agreement after the Secretary—
(A) has determined that the provider fails to comply substantially with the provisions of the agreement, with the provisions of this subchapter and regulations thereunder, or with a corrective action required under
(B) has determined that the provider fails substantially to meet the applicable provisions of
(C) has excluded the provider from participation in a program under this subchapter pursuant to
(D) has ascertained that the provider has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the program or program beneficiaries.
(3) A termination of an agreement or a refusal to renew an agreement under this subsection shall become effective on the same date and in the same manner as an exclusion from participation under the programs under this subchapter becomes effective under
(4)(A) A hospital that fails to comply with the requirement of subsection (a)(1)(V) (relating to the Bloodborne Pathogens standard) is subject to a civil money penalty in an amount described in subparagraph (B), but is not subject to termination of an agreement under this section.
(B) The amount referred to in subparagraph (A) is an amount that is similar to the amount of civil penalties that may be imposed under section 17 of the Occupational Safety and Health Act of 1970 [
(C) A civil money penalty under this paragraph shall be imposed and collected in the same manner as civil money penalties under subsection (a) of
(c) Refiling after termination or nonrenewal; agreements with skilled nursing facilities
(1) Where the Secretary has terminated or has refused to renew an agreement under this subchapter with a provider of services, such provider may not file another agreement under this subchapter unless the Secretary finds that the reason for the termination or nonrenewal has been removed and that there is reasonable assurance that it will not recur.
(2) Where the Secretary has terminated or has refused to renew an agreement under this subchapter with a provider of services, the Secretary shall promptly notify each State agency which administers or supervises the administration of a State plan approved under subchapter XIX of such termination or nonrenewal.
(d) Decision to withhold payment for failure to review long-stay cases
If the Secretary finds that there is a substantial failure to make timely review in accordance with
(e) "Provider of services" defined
For purposes of this section, the term "provider of services" shall include—
(1) a clinic, rehabilitation agency, or public health agency if, in the case of a clinic or rehabilitation agency, such clinic or agency meets the requirements of
(2) a community mental health center (as defined in
(3) opioid treatment programs (as defined in paragraph (2) of
(f) Maintenance of written policies and procedures
(1) For purposes of subsection (a)(1)(Q) and sections 1395i–3(c)(2)(E),5 1395l(s), 1395w–25(i), 1395mm(c)(8), and 1395bbb(a)(6) of this title, the requirement of this subsection is that a provider of services, Medicare+Choice organization, or prepaid or eligible organization (as the case may be) maintain written policies and procedures with respect to all adult individuals receiving medical care by or through the provider or organization—
(A) to provide written information to each such individual concerning—
(i) an individual's rights under State law (whether statutory or as recognized by the courts of the State) to make decisions concerning such medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate advance directives (as defined in paragraph (3)), and
(ii) the written policies of the provider or organization respecting the implementation of such rights;
(B) to document in a prominent part of the individual's current medical record whether or not the individual has executed an advance directive;
(C) not to condition the provision of care or otherwise discriminate against an individual based on whether or not the individual has executed an advance directive;
(D) to ensure compliance with requirements of State law (whether statutory or as recognized by the courts of the State) respecting advance directives at facilities of the provider or organization; and
(E) to provide (individually or with others) for education for staff and the community on issues concerning advance directives.
Subparagraph (C) shall not be construed as requiring the provision of care which conflicts with an advance directive.
(2) The written information described in paragraph (1)(A) shall be provided to an adult individual—
(A) in the case of a hospital, at the time of the individual's admission as an inpatient,
(B) in the case of a skilled nursing facility, at the time of the individual's admission as a resident,
(C) in the case of a home health agency, in advance of the individual coming under the care of the agency,
(D) in the case of a hospice program, at the time of initial receipt of hospice care by the individual from the program, and
(E) in the case of an eligible organization (as defined in
(3) In this subsection, the term "advance directive" means a written instruction, such as a living will or durable power of attorney for health care, recognized under State law (whether statutory or as recognized by the courts of the State) and relating to the provision of such care when the individual is incapacitated.
(4) For construction relating to this subsection, see
(g) Penalties for improper billing
Except as permitted under subsection (a)(2), any person who knowingly and willfully presents, or causes to be presented, a bill or request for payment inconsistent with an arrangement under subsection (a)(1)(H) or in violation of the requirement for such an arrangement, is subject to a civil money penalty of not to exceed $2,000. The provisions of
(h) Dissatisfaction with determination of Secretary; appeal by institutions or agencies; single notice and hearing
(1)(A) Except as provided in paragraph (2), an institution or agency dissatisfied with a determination by the Secretary that it is not a provider of services or with a determination described in subsection (b)(2) shall be entitled to a hearing thereon by the Secretary (after reasonable notice) to the same extent as is provided in
(B) An institution or agency described in subparagraph (A) that has filed for a hearing under subparagraph (A) shall have expedited access to judicial review under this subparagraph in the same manner as providers of services, suppliers, and individuals entitled to benefits under part A or enrolled under part B, or both, may obtain expedited access to judicial review under the process established under
(C)(i) The Secretary shall develop and implement a process to expedite proceedings under this subsection in which—
(I) the remedy of termination of participation has been imposed;
(II) a remedy described in clause (i) or (iii) of
(III) a determination has been made as to a finding of substandard quality of care that results in the loss of approval of a skilled nursing facility's nurse aide training program.
(ii) Under such process under clause (i), priority shall be provided in cases of termination described in clause (i)(I).
(iii) Nothing in this subparagraph shall be construed to affect the application of any remedy imposed under
(2) An institution or agency is not entitled to separate notice and opportunity for a hearing under both
(i) Intermediate sanctions for psychiatric hospitals
(1) If the Secretary determines that a psychiatric hospital which has an agreement in effect under this section no longer meets the requirements for a psychiatric hospital under this subchapter and further finds that the hospital's deficiencies—
(A) immediately jeopardize the health and safety of its patients, the Secretary shall terminate such agreement; or
(B) do not immediately jeopardize the health and safety of its patients, the Secretary may terminate such agreement, or provide that no payment will be made under this subchapter with respect to any individual admitted to such hospital after the effective date of the finding, or both.
(2) If a psychiatric hospital, found to have deficiencies described in paragraph (1)(B), has not complied with the requirements of this subchapter—
(A) within 3 months after the date the hospital is found to be out of compliance with such requirements, the Secretary shall provide that no payment will be made under this subchapter with respect to any individual admitted to such hospital after the end of such 3-month period, or
(B) within 6 months after the date the hospital is found to be out of compliance with such requirements, no payment may be made under this subchapter with respect to any individual in the hospital until the Secretary finds that the hospital is in compliance with the requirements of this subchapter.
(j) Enrollment process for providers of services and suppliers
(1) Enrollment process
(A) In general
The Secretary shall establish by regulation a process for the enrollment of providers of services and suppliers under this subchapter. Such process shall include screening of providers and suppliers in accordance with paragraph (2), a provisional period of enhanced oversight in accordance with paragraph (3), disclosure requirements in accordance with paragraph (5), the imposition of temporary enrollment moratoria in accordance with paragraph (7), and the establishment of compliance programs in accordance with paragraph (9).
(B) Deadlines
The Secretary shall establish by regulation procedures under which there are deadlines for actions on applications for enrollment (and, if applicable, renewal of enrollment). The Secretary shall monitor the performance of medicare administrative contractors in meeting the deadlines established under this subparagraph.
(C) Consultation before changing provider enrollment forms
The Secretary shall consult with providers of services and suppliers before making changes in the provider enrollment forms required of such providers and suppliers to be eligible to submit claims for which payment may be made under this subchapter.
(2) Provider screening
(A) Procedures
Not later than 180 days after March 23, 2010, the Secretary, in consultation with the Inspector General of the Department of Health and Human Services, shall establish procedures under which screening is conducted with respect to providers of medical or other items or services and suppliers under the program under this subchapter, the Medicaid program under subchapter XIX, and the CHIP program under subchapter XXI.
(B) Level of screening
The Secretary shall determine the level of screening conducted under this paragraph according to the risk of fraud, waste, and abuse, as determined by the Secretary, with respect to the category of provider of medical or other items or services or supplier. Such screening—
(i) shall include a licensure check, which may include such checks across States; and
(ii) may, as the Secretary determines appropriate based on the risk of fraud, waste, and abuse described in the preceding sentence, include—
(I) a criminal background check;
(II) fingerprinting;
(III) unscheduled and unannounced site visits, including preenrollment site visits;
(IV) database checks (including such checks across States); and
(V) such other screening as the Secretary determines appropriate.
(C) Application fees
(i) Institutional providers
Except as provided in clause (ii), the Secretary shall impose a fee on each institutional provider of medical or other items or services or supplier (such as a hospital or skilled nursing facility) with respect to which screening is conducted under this paragraph in an amount equal to—
(I) for 2010, $500; and
(II) for 2011 and each subsequent year, the amount determined under this clause for the preceding year, adjusted by the percentage change in the consumer price index for all urban consumers (all items; United States city average) for the 12-month period ending with June of the previous year.
(ii) Hardship exception; waiver for certain Medicaid providers
The Secretary may, on a case-by-case basis, exempt a provider of medical or other items or services or supplier from the imposition of an application fee under this subparagraph if the Secretary determines that the imposition of the application fee would result in a hardship. The Secretary may waive the application fee under this subparagraph for providers enrolled in a State Medicaid program for whom the State demonstrates that imposition of the fee would impede beneficiary access to care.
(iii) Use of funds
Amounts collected as a result of the imposition of a fee under this subparagraph shall be used by the Secretary for program integrity efforts, including to cover the costs of conducting screening under this paragraph and to carry out this subsection and
(D) Application and enforcement
(i) New providers of services and suppliers
The screening under this paragraph shall apply, in the case of a provider of medical or other items or services or supplier who is not enrolled in the program under this subchapter, subchapter XIX, or subchapter XXI as of March 23, 2010, on or after the date that is 1 year after such date.
(ii) Current providers of services and suppliers
The screening under this paragraph shall apply, in the case of a provider of medical or other items or services or supplier who is enrolled in the program under this subchapter, subchapter XIX, or subchapter XXI as of such date, on or after the date that is 2 years after such date.
(iii) Revalidation of enrollment
Effective beginning on the date that is 180 days after such date, the screening under this paragraph shall apply with respect to the revalidation of enrollment of a provider of medical or other items or services or supplier in the program under this subchapter, subchapter XIX, or subchapter XXI.
(iv) Limitation on enrollment and revalidation of enrollment
In no case may a provider of medical or other items or services or supplier who has not been screened under this paragraph be initially enrolled or reenrolled in the program under this subchapter, subchapter XIX, or subchapter XXI on or after the date that is 3 years after such date.
(E) Use of information from the Department of Treasury concerning tax debts
In reviewing the application of a provider of services or supplier to enroll or reenroll under the program under this subchapter, the Secretary shall take into account the information supplied by the Secretary of the Treasury pursuant to section 6103(l)(22) of the Internal Revenue Code of 1986, in determining whether to deny such application or to apply enhanced oversight to such provider of services or supplier pursuant to paragraph (3) if the Secretary determines such provider of services or supplier owes such a debt.
(F) Expedited rulemaking
The Secretary may promulgate an interim final rule to carry out this paragraph.
(3) Provisional period of enhanced oversight for new providers of services and suppliers
(A) In general
The Secretary shall establish procedures to provide for a provisional period of not less than 30 days and not more than 1 year during which new providers of medical or other items or services and suppliers, as the Secretary determines appropriate, including categories of providers or suppliers, would be subject to enhanced oversight, such as prepayment review and payment caps, under the program under this subchapter, the Medicaid program under subchapter XIX.6 and the CHIP program under subchapter XXI.
(B) Implementation
The Secretary may establish by program instruction or otherwise the procedures under this paragraph.
(4) 90-day period of enhanced oversight for initial claims of DME suppliers
For periods beginning after January 1, 2011, if the Secretary determines that there is a significant risk of fraudulent activity among suppliers of durable medical equipment, in the case of a supplier of durable medical equipment who is within a category or geographic area under this subchapter identified pursuant to such determination and who is initially enrolling under such subchapter, the Secretary shall, notwithstanding
(5) Increased disclosure requirements
(A) Disclosure
A provider of medical or other items or services or supplier who submits an application for enrollment or revalidation of enrollment in the program under this subchapter, subchapter XIX, or subchapter XXI on or after the date that is 1 year after March 23, 2010, shall disclose (in a form and manner and at such time as determined by the Secretary) any current or previous affiliation (directly or indirectly) with a provider of medical or other items or services or supplier that has uncollected debt, has been or is subject to a payment suspension under a Federal health care program (as defined in
(B) Authority to deny enrollment
If the Secretary determines that such previous affiliation poses an undue risk of fraud, waste, or abuse, the Secretary may deny such application. Such a denial shall be subject to appeal in accordance with paragraph (7).
(6) Authority to adjust payments of providers of services and suppliers with the same tax identification number for medicare obligations
(A) In general
Notwithstanding any other provision of this subchapter, in the case of an applicable provider of services or supplier, the Secretary may make any necessary adjustments to payments to the applicable provider of services or supplier under the program under this subchapter in order to satisfy any amount described in subparagraph (B)(ii) due from such obligated provider of services or supplier.
(B) Definitions
In this paragraph:
(i) In general
The term "applicable provider of services or supplier" means a provider of services or supplier that has the same taxpayer identification number assigned under section 6109 of the Internal Revenue Code of 1986 as is assigned to the obligated provider of services or supplier under such section, regardless of whether the applicable provider of services or supplier is assigned a different billing number or national provider identification number under the program under this subchapter than is assigned to the obligated provider of services or supplier.
(ii) Obligated provider of services or supplier
The term "obligated provider of services or supplier" means a provider of services or supplier that owes an amount that is more than the amount required to be paid under the program under this subchapter (as determined by the Secretary).
(7) Temporary moratorium on enrollment of new providers; nonpayment
(A) In general
The Secretary may impose a temporary moratorium on the enrollment of new providers of services and suppliers, including categories of providers of services and suppliers, in the program under this subchapter, under the Medicaid program under subchapter XIX, or under the CHIP program under subchapter XXI if the Secretary determines such moratorium is necessary to prevent or combat fraud, waste, or abuse under either such program.
(B) Limitation on review
There shall be no judicial review under
(C) Nonpayment
(i) In general
No payment may be made under this subchapter or under a program described in subparagraph (A) with respect to an item or service described in clause (ii) furnished on or after October 1, 2017.
(ii) Item or service described
An item or service described in this clause is an item or service furnished—
(I) within a geographic area with respect to which a temporary moratorium imposed under subparagraph (A) is in effect; and
(II) by a provider of services or supplier that meets the requirements of clause (iii).
(iii) Requirements
For purposes of clause (ii), the requirements of this clause are that a provider of services or supplier—
(I) enrolls under this subchapter on or after the effective date of such temporary moratorium; and
(II) is within a category of providers of services and suppliers (as described in subparagraph (A)) subject to such temporary moratorium.
(iv) Prohibition on charges for specified items or services
In no case shall a provider of services or supplier described in clause (ii)(II) charge an individual or other person for an item or service described in clause (ii) furnished on or after October 1, 2017, to an individual entitled to benefits under part A or enrolled under part B or an individual under a program specified in subparagraph (A).
(8) Hearing rights in cases of denial or non-renewal
A provider of services or supplier whose application to enroll (or, if applicable, to renew enrollment) under this subchapter is denied may have a hearing and judicial review of such denial under the procedures that apply under subsection (h)(1)(A) to a provider of services that is dissatisfied with a determination by the Secretary.
(9) Compliance programs
(A) In general
On or after the date of implementation determined by the Secretary under subparagraph (C), a provider of medical or other items or services or supplier within a particular industry sector or category shall, as a condition of enrollment in the program under this subchapter, subchapter XIX, or subchapter XXI, establish a compliance program that contains the core elements established under subparagraph (B) with respect to that provider or supplier and industry or category.
(B) Establishment of core elements
The Secretary, in consultation with the Inspector General of the Department of Health and Human Services, shall establish core elements for a compliance program under subparagraph (A) for providers or suppliers within a particular industry or category.
(C) Timeline for implementation
The Secretary shall determine the timeline for the establishment of the core elements under subparagraph (B) and the date of the implementation of subparagraph (A) for providers or suppliers within a particular industry or category. The Secretary shall, in determining such date of implementation, consider the extent to which the adoption of compliance programs by a provider of medical or other items or services or supplier is widespread in a particular industry sector or with respect to a particular provider or supplier category.
(k) Quality reporting by cancer hospitals
(1) In general
For purposes of fiscal year 2014 and each subsequent fiscal year, a hospital described in
(2) Submission of quality data
For fiscal year 2014 and each subsequent fiscal year, each hospital described in such section shall submit to the Secretary data on quality measures specified under paragraph (3). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(3) Quality measures
(A) In general
Subject to subparagraph (B), any measure specified by the Secretary under this paragraph must have been endorsed by the entity with a contract under
(B) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(C) Time frame
Not later than October 1, 2012, the Secretary shall publish the measures selected under this paragraph that will be applicable with respect to fiscal year 2014.
(4) Public availability of data submitted
The Secretary shall establish procedures for making data submitted under paragraph (4) available to the public. Such procedures shall ensure that a hospital described in
(Aug. 14, 1935, ch. 531, title XVIII, §1866, as added
Editorial Notes
References in Text
Section 222(a) of the Social Security Amendments of 1972, referred to in subsec. (a)(1)(O), is section 222(a) of
The Occupational Safety and Health Act of 1970, referred to in subsecs. (a)(1)(V) and (b)(4)(B), is
The Internal Revenue Code of 1986, referred to in subsec. (j)(2)(E), (6)(B)(i), is classified generally to Title 26, Internal Revenue Code.
Amendments
2022—Subsec. (e)(2).
2020—Subsec. (a)(1)(F)(ii).
Subsec. (a)(1)(I).
Subsec. (a)(1)(I)(ii).
Subsec. (a)(1)(N).
Subsec. (a)(1)(N)(i).
Subsec. (a)(1)(N)(iv).
Subsec. (a)(3)(A).
Subsec. (a)(3)(B).
Subsec. (a)(3)(C)(ii)(II).
2018—Subsec. (a)(1)(L).
Subsec. (e)(3).
2016—Subsec. (j)(1)(A).
Subsec. (j)(7).
Subsec. (j)(7)(C).
Subsec. (j)(8), (9).
2015—Subsec. (a)(1)(W), (X).
Subsec. (a)(1)(Y).
2011—Subsec. (a)(1)(F).
Subsec. (a)(3).
2010—Subsec. (a)(1)(U).
Subsec. (a)(1)(V).
Subsec. (a)(1)(W).
Subsec. (j)(1)(A).
Subsec. (j)(2).
Subsec. (j)(2)(C).
"(I) for 2010, $200; and
"(II) for 2011 and each subsequent year, the amount determined under this clause for the preceding year, adjusted by the percentage change in the consumer price index for all urban consumers (all items; United States city average) for the 12-month period ending with June of the previous year."
Subsec. (j)(2)(E), (F).
Subsec. (j)(3).
Subsec. (j)(4), (5).
Subsec. (j)(6).
Subsec. (j)(6)(A).
Subsec. (j)(6)(B)(ii).
Subsec. (j)(7).
Subsec. (j)(8).
Subsec. (k).
2008—Subsec. (e)(1).
2003—
Subsec. (a)(1)(O).
Subsec. (a)(1)(T).
Subsec. (a)(1)(U).
Subsec. (a)(1)(V).
Subsec. (b)(2)(D).
Subsec. (b)(4).
Subsec. (h)(1).
Subsec. (j).
2000—Subsec. (a)(1)(H)(ii)(I).
1999—Subsec. (a)(1)(I)(iii).
Subsec. (a)(1)(N)(iv).
Subsec. (a)(1)(O).
Subsec. (a)(1)(Q).
Subsec. (a)(1)(R).
1997—Subsec. (a)(1)(A).
Subsec. (a)(1)(F)(ii).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I), (N).
Subsec. (a)(1)(O).
Subsec. (a)(1)(S).
Subsec. (a)(2)(A).
Subsec. (a)(3).
Subsec. (b)(2)(D).
Subsec. (f)(1).
Subsec. (f)(1)(B).
Subsec. (f)(2)(E).
Subsec. (f)(4).
1996—Subsec. (a)(1)(R).
1994—Subsec. (a)(1)(H).
Subsec. (a)(2)(A).
Subsec. (d).
Subsec. (f)(1).
Subsec. (h)(1).
1991—Subsec. (a)(1)(J).
Subsec. (a)(1)(L).
1990—Subsec. (a)(1)(F)(i).
Subsec. (a)(1)(F)(ii).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I)(i).
Subsec. (a)(1)(P).
Subsec. (a)(1)(Q).
Subsec. (e).
Subsec. (f).
1989—Subsec. (a)(1)(F)(i)(III).
Subsec. (a)(1)(F)(ii).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I).
Subsec. (a)(1)(N).
Subsec. (a)(1)(N)(iii), (iv).
Subsec. (a)(1)(P).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B).
Subsec. (a)(3)(A), (B).
Subsec. (a)(3)(C)(ii)(II).
Subsec. (d).
Subsec. (i).
1988—Subsec. (a)(1)(M).
Subsec. (a)(1)(N).
Subsec. (a)(1)(O).
Subsec. (a)(2)(A).
Subsec. (a)(3)(C)(ii).
Subsec. (d).
Subsec. (f).
Subsec. (g).
1987—Subsec. (a)(1)(F)(i)(III).
Subsec. (a)(1)(O).
Subsec. (a)(2)(A).
Subsec. (a)(3).
Subsec. (a)(3)(C)(ii).
Subsec. (a)(4).
Subsec. (b).
Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(3).
Subsec. (g).
Subsec. (h).
1986—Subsec. (a)(1)(F).
Subsec. (a)(1)(H).
Subsec. (a)(1)(I).
Subsec. (a)(1)(J).
Subsec. (a)(1)(K).
Subsec. (a)(1)(L).
Subsec. (a)(1)(M).
Subsec. (a)(1)(N).
Subsec. (a)(2)(A).
Subsec. (a)(4).
Subsec. (e).
Subsec. (g).
1984—Subsec. (a)(1)(E).
Subsec. (a)(1)(F).
Subsec. (a)(2)(A).
Subsec. (b)(3).
Subsec. (b)(4).
Subsec. (d).
1983—Subsec. (a)(1).
Subsec. (a)(1)(F).
Subsec. (a)(1)(F) to (H).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B)(ii).
1982—Subsec. (a)(1)(B).
Subsec. (a)(1)(E).
Subsec. (a)(2)(A).
Subsec. (b).
Subsec. (b)(4)(A).
1981—Subsec. (a)(1).
1980—Subsec. (a)(2)(A).
Subsec. (c)(3).
Subsec. (f).
1978—Subsec. (a)(2)(A).
1977—Subsec. (a)(1)(D).
Subsec. (a)(3).
Subsec. (b)(2)(C).
Subsec. (b)(2)(F).
Subsec. (b)(2)(G).
Subsec. (c)(2).
1972—Subsec. (a)(1).
Subsec. (a)(2)(B).
Subsec. (a)(2)(C).
Subsec. (a)(2)(D).
Subsec. (b).
Subsec. (c).
Subsec. (d).
1968—Subsec. (a)(2)(A).
Subsec. (a)(2)(C).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2022 Amendment
Amendment by
Effective Date of 2020 Amendment
Amendment by section 125(b)(1), (2)(A) of
Effective Date of 2018 Amendment
Amendment by
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2010 Amendment
Amendment by section 6406(b) of
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2003 Amendment
Amendment by section 505(b) of
Amendment by section 932(b), (c)(1) of
"(1)
"(2)
"(3)
Effective Date of 2000 Amendment
Amendment by
Effective Date of 1999 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Amendment by section 4201(c)(1) of
Amendment by section 4302(a) of
Amendment by section 4321(b) of
Amendment by section 4432(b)(5)(F) of
Amendment by section 4511(a)(2)(D) of
Amendment by section 4541(a)(3) of
Amendments by section 4714(b)(1) of
Effective Date of 1994 Amendment
Amendment by section 147(e)(7) of
Amendment by section 156(a)(2)(E) of
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4157(c)(2) of
Amendment by section 4162(b)(2) of
Amendment by section 4206(a) of
Effective Date of 1989 Amendment
Amendment by section 6112(e)(3) of
Amendment by section 101(a) of
Amendment by section 201(a) of
Effective Date of 1988 Amendment
Amendment by section 608(d)(3)(F), (19)(A) of
Amendment by section 104(d)(5) of
Amendment by section 202(h)(1) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4012(a) of
Amendment by section 4062(d)(4) of
Amendment by section 4212(e)(4) of
Amendment by
Effective Date of 1986 Amendment
Amendment by
Amendment by section 9320(h)(2) of
Amendment by section 9337(c)(2) of
Amendment by section 9343(c)(2), (3) of
Amendment by section 9121(a) of
Amendment by section 9403(b) of
Effective Date of 1984 Amendment
Amendment by section 2303(f) of
Amendment by section 2315(d) of
Amendment by section 2321(c) of
Amendment by section 2323(b)(3) of
Amendment by section 2335(d) of
Amendment by section 2347(a) of
Amendment by section 2354(b)(33), (34) of
Effective Date of 1983 Amendment
Amendment by section 602(f)(2) of
Subsec. (a)(1)(F) to (H) of this section, as added by section 602(f)(1)(C) of
Amendment by section 309(a)(5) of
Amendment by section 309(b)(11) of
Effective Date of 1982 Amendment
Amendment by section 122(g)(5), (6) of
Amendment by section 128(a)(5) of
Amendment by section 128(d)(4) of
Amendment by section 144 of
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1977 Amendment
"(1) The amendments made by this section [amending this section and
"(2) In the case of a State plan for medical assistance under title XIX of the Social Security Act [
Amendment by section 3(b) of
Amendment by section 8(b) of
Amendment by section 13(b)(3) of
Effective Date of 1972 Amendment
Amendment by section 223(e), (g) of
Amendment by section 227(d)(2) of
Amendment by section 281(c) of
Effective Date of 1968 Amendment
Amendment by section 129(c)(12) of
Amendment by section 133(c) of
Amendment by section 135(b) of
Regulations
Rule of Construction
Nothing in section 102 of div. BB of
Disclosure of Medicare Terminated Providers and Suppliers to States
Office of the Inspector General Report on Compliance With and Enforcement of National Standards on Culturally and Linguistically Appropriate Services (CLAS) in Medicare
"(a)
"(1) the extent to which Medicare providers and plans are complying with the Office for Civil Rights' Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons and the Office of Minority Health's Culturally and Linguistically Appropriate Services Standards in health care; and
"(2) a description of the costs associated with or savings related to the provision of language services.
Such report shall include recommendations on improving compliance with CLAS Standards and recommendations on improving enforcement of CLAS Standards.
"(b)
GAO Study and Report on the Propagation of Concierge Care
"(a)
"(1)
"(A) is used by medicare beneficiaries (as defined in section 1802(b)(5)(A) of the Social Security Act (
"(B) has impacted upon the access of medicare beneficiaries (as so defined) to items and services for which reimbursement is provided under the medicare program under title XVIII of the Social Security Act (
"(2)
"(A) charges a membership fee or another incidental fee to an individual desiring to receive the health care item or service from such physician, practitioner, or other individual; or
"(B) requires the individual desiring to receive the health care item or service from such physician, practitioner, or other individual to purchase an item or service.
"(b)
Effect on State Law
Reports to Congress on Number of Hospitals Terminating or Not Renewing Provider Agreements
"(1) The Secretary of Health and Human Services shall periodically submit to the Congress a report on the number of hospitals that have terminated or failed to renew an agreement under section 1866 of the Social Security Act [
"(2) Not later than October 1, 1987, the Administrator of Veterans' Affairs shall submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a report regarding implementation of this section [amending this section]. Thereafter, the Administrator shall notify such committees if any hospital terminates or fails to renew an agreement described in paragraph (1) for the reasons described in that paragraph."
[For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which item 7 on page 96 identifies a report on "Hospitals that have terminated or failed to renew an agreement under section 1866 of Social Security Act as a result of the additional conditions imposed" authorized by
[For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which item 7 on page 96 identifies a report on "Hospitals that have terminated or failed to renew an agreement under section 1866 of Social Security Act as a result of the additional conditions imposed" authorized by
Delay in Implementation of Requirement That Hospitals Maintain Agreements With Utilization and Quality Control Peer Review Organization
Interim Waiver in Certain Cases of Billing Rule for Items and Services Other Than Physicians' Services
For authority to waive the requirements of subsec. (a)(1)(H) of this section for any cost period prior to Oct. 1, 1986, where immediate compliance would threaten the stability of patient care, see section 602(k) of
Private Sector Review Initiative
"(a) The Secretary of Health and Human Services shall undertake an initiative to improve medical review by intermediaries and carriers under title XVIII of the Social Security Act [
"(b) Where such review activity results in the denial of payment to providers of services under title XVIII of the Social Security Act [
Agreements Filed and Accepted Prior to Oct. 30, 1972, Deemed To Be for Specified Term Ending Dec. 31, 1973
1 See References in Text note below.
2 So in original. The comma probably should be preceded by a closing parenthesis.
3 So in original. Probably should be preceded by "section".
4 So in original. Probably should be subsection "(a)(1)(V)".
5 So in original. Probably should refer to section 1395i–3(c)(1)(E).
6 So in original. Probably should be a comma.
§1395cc–1. Demonstration of application of physician volume increases to group practices
(a) Demonstration program authorized
(1) In general
The Secretary shall conduct demonstration projects to test and, if proven effective, expand the use of incentives to health care groups participating in the program under this subchapter that—
(A) encourage coordination of the care furnished to individuals under the programs under parts A and B by institutional and other providers, practitioners, and suppliers of health care items and services;
(B) encourage investment in administrative structures and processes to ensure efficient service delivery; and
(C) reward physicians for improving health outcomes.
Such projects shall focus on the efficiencies of furnishing health care in a group-practice setting as compared to the efficiencies of furnishing health care in other health care delivery systems.
(2) Administration by contract
Except as otherwise specifically provided, the Secretary may administer the program under this section in accordance with
(3) Definitions
For purposes of this section, terms have the following meanings:
(A) Physician
Except as the Secretary may otherwise provide, the term "physician" means any individual who furnishes services which may be paid for as physicians' services under this subchapter.
(B) Health care group
The term "health care group" means a group of physicians (as defined in subparagraph (A)) organized at least in part for the purpose of providing physicians' services under this subchapter. As the Secretary finds appropriate, a health care group may include a hospital and any other individual or entity furnishing items or services for which payment may be made under this subchapter that is affiliated with the health care group under an arrangement structured so that such individual or entity participates in a demonstration under this section and will share in any bonus earned under subsection (d).
(b) Eligibility criteria
(1) In general
The Secretary is authorized to establish criteria for health care groups eligible to participate in a demonstration under this section, including criteria relating to numbers of health care professionals in, and of patients served by, the group, scope of services provided, and quality of care.
(2) Payment method
A health care group participating in the demonstration under this section shall agree with respect to services furnished to beneficiaries within the scope of the demonstration (as determined under subsection (c))—
(A) to be paid on a fee-for-service basis; and
(B) that payment with respect to all such services furnished by members of the health care group to such beneficiaries shall (where determined appropriate by the Secretary) be made to a single entity.
(3) Data reporting
A health care group participating in a demonstration under this section shall report to the Secretary such data, at such times and in such format as the Secretary requires, for purposes of monitoring and evaluation of the demonstration under this section.
(c) Patients within scope of demonstration
(1) In general
The Secretary shall specify, in accordance with this subsection, the criteria for identifying those patients of a health care group who shall be considered within the scope of the demonstration under this section for purposes of application of subsection (d) and for assessment of the effectiveness of the group in achieving the objectives of this section.
(2) Other criteria
The Secretary may establish additional criteria for inclusion of beneficiaries within a demonstration under this section, which may include frequency of contact with physicians in the group or other factors or criteria that the Secretary finds to be appropriate.
(3) Notice requirements
In the case of each beneficiary determined to be within the scope of a demonstration under this section with respect to a specific health care group, the Secretary shall ensure that such beneficiary is notified of the incentives, and of any waivers of coverage or payment rules, applicable to such group under such demonstration.
(d) Incentives
(1) Performance target
The Secretary shall establish for each health care group participating in a demonstration under this section—
(A) a base expenditure amount, equal to the average total payments under parts A and B for patients served by the health care group on a fee-for-service basis in a base period determined by the Secretary; and
(B) an annual per capita expenditure target for patients determined to be within the scope of the demonstration, reflecting the base expenditure amount adjusted for risk and expected growth rates.
(2) Incentive bonus
The Secretary shall pay to each participating health care group (subject to paragraph (4)) a bonus for each year under the demonstration equal to a portion of the medicare savings realized for such year relative to the performance target.
(3) Additional bonus for process and outcome improvements
At such time as the Secretary has established appropriate criteria based on evidence the Secretary determines to be sufficient, the Secretary shall also pay to a participating health care group (subject to paragraph (4)) an additional bonus for a year, equal to such portion as the Secretary may designate of the saving to the program under this subchapter resulting from process improvements made by and patient outcome improvements attributable to activities of the group.
(4) Limitation
The Secretary shall limit bonus payments under this section as necessary to ensure that the aggregate expenditures under this subchapter (inclusive of bonus payments) with respect to patients within the scope of the demonstration do not exceed the amount which the Secretary estimates would be expended if the demonstration projects under this section were not implemented.
(Aug. 14, 1935, ch. 531, title XVIII, §1866A, as added
Statutory Notes and Related Subsidiaries
GAO Report
§1395cc–2. Provisions for administration of demonstration program
(a) General administrative authority
(1) Beneficiary eligibility
Except as otherwise provided by the Secretary, an individual shall only be eligible to receive benefits under the program under
(A) is enrolled under the program under part B and entitled to benefits under part A; and
(B) is not enrolled in a Medicare+Choice plan under part C, an eligible organization under a contract under
(2) Secretary's discretion as to scope of program
The Secretary may limit the implementation of the demonstration program to—
(A) a geographic area (or areas) that the Secretary designates for purposes of the program, based upon such criteria as the Secretary finds appropriate;
(B) a subgroup (or subgroups) of beneficiaries or individuals and entities furnishing items or services (otherwise eligible to participate in the program), selected on the basis of the number of such participants that the Secretary finds consistent with the effective and efficient implementation of the program;
(C) an element (or elements) of the program that the Secretary determines to be suitable for implementation; or
(D) any combination of any of the limits described in subparagraphs (A) through (C).
(3) Voluntary receipt of items and services
Items and services shall be furnished to an individual under the demonstration program only at the individual's election.
(4) Agreements
The Secretary is authorized to enter into agreements with individuals and entities to furnish health care items and services to beneficiaries under the demonstration program.
(5) Program standards and criteria
The Secretary shall establish performance standards for the demonstration program including, as applicable, standards for quality of health care items and services, cost-effectiveness, beneficiary satisfaction, and such other factors as the Secretary finds appropriate. The eligibility of individuals or entities for the initial award, continuation, and renewal of agreements to provide health care items and services under the program shall be conditioned, at a minimum, on performance that meets or exceeds such standards.
(6) Administrative review of decisions affecting individuals and entities furnishing services
An individual or entity furnishing services under the demonstration program shall be entitled to a review by the program administrator (or, if the Secretary has not contracted with a program administrator, by the Secretary) of a decision not to enter into, or to terminate, or not to renew, an agreement with the entity to provide health care items or services under the program.
(7) Secretary's review of marketing materials
An agreement with an individual or entity furnishing services under the demonstration program shall require the individual or entity to guarantee that it will not distribute materials that market items or services under the program without the Secretary's prior review and approval.
(8) Payment in full
(A) In general
Except as provided in subparagraph (B), an individual or entity receiving payment from the Secretary under a contract or agreement under the demonstration program shall agree to accept such payment as payment in full, and such payment shall be in lieu of any payments to which the individual or entity would otherwise be entitled under this subchapter.
(B) Collection of deductibles and coinsurance
Such individual or entity may collect any applicable deductible or coinsurance amount from a beneficiary.
(b) Contracts for program administration
(1) In general
The Secretary may administer the demonstration program through a contract with a program administrator in accordance with the provisions of this subsection.
(2) Scope of program administrator contracts
The Secretary may enter into such contracts for a limited geographic area, or on a regional or national basis.
(3) Eligible contractors
The Secretary may contract for the administration of the program with—
(A) an entity that, under a contract under
(B) any other entity with substantial experience in managing the type of program concerned.
(4) Contract award, duration, and renewal
(A) In general
A contract under this subsection shall be for an initial term of up to three years, renewable for additional terms of up to three years.
(B) Noncompetitive award and renewal for entities administering part A or part B payments
The Secretary may enter or renew a contract under this subsection with an entity described in paragraph (3)(A) without regard to the requirements of
(5) Applicability of Federal Acquisition Regulation
The Federal Acquisition Regulation shall apply to program administration contracts under this subsection.
(6) Performance standards
The Secretary shall establish performance standards for the program administrator including, as applicable, standards for the quality and cost-effectiveness of the program administered, and such other factors as the Secretary finds appropriate. The eligibility of entities for the initial award, continuation, and renewal of program administration contracts shall be conditioned, at a minimum, on performance that meets or exceeds such standards.
(7) Functions of program administrator
A program administrator shall perform any or all of the following functions, as specified by the Secretary:
(A) Agreements with entities furnishing health care items and services
Determine the qualifications of entities seeking to enter or renew agreements to provide services under the demonstration program, and as appropriate enter or renew (or refuse to enter or renew) such agreements on behalf of the Secretary.
(B) Establishment of payment rates
Negotiate or otherwise establish, subject to the Secretary's approval, payment rates for covered health care items and services.
(C) Payment of claims or fees
Administer payments for health care items or services furnished under the program.
(D) Payment of bonuses
Using such guidelines as the Secretary shall establish, and subject to the approval of the Secretary, make bonus payments as described in subsection (c)(2)(B) to entities furnishing items or services for which payment may be made under the program.
(E) Oversight
Monitor the compliance of individuals and entities with agreements under the program with the conditions of participation.
(F) Administrative review
Conduct reviews of adverse determinations specified in subsection (a)(6).
(G) Review of marketing materials
Conduct a review of marketing materials proposed by an entity furnishing services under the program.
(H) Additional functions
Perform such other functions as the Secretary may specify.
(8) Limitation of liability
The provisions of
(9) Information sharing
Notwithstanding
(c) Rules applicable to both program agreements and program administration contracts
(1) Records, reports, and audits
The Secretary is authorized to require entities with agreements to provide health care items or services under the demonstration program, and entities with program administration contracts under subsection (b), to maintain adequate records, to afford the Secretary access to such records (including for audit purposes), and to furnish such reports and other materials (including audited financial statements and performance data) as the Secretary may require for purposes of implementation, oversight, and evaluation of the program and of individuals' and entities' effectiveness in performance of such agreements or contracts.
(2) Bonuses
Notwithstanding any other provision of law, but subject to subparagraph (B)(ii), the Secretary may make bonus payments under the demonstration program from the Federal Health Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in amounts that do not exceed the amounts authorized under the program in accordance with the following:
(A) Payments to program administrators
The Secretary may make bonus payments under the program to program administrators.
(B) Payments to entities furnishing services
(i) In general
Subject to clause (ii), the Secretary may make bonus payments to individuals or entities furnishing items or services for which payment may be made under the demonstration program, or may authorize the program administrator to make such bonus payments in accordance with such guidelines as the Secretary shall establish and subject to the Secretary's approval.
(ii) Limitations
The Secretary may condition such payments on the achievement of such standards related to efficiency, improvement in processes or outcomes of care, or such other factors as the Secretary determines to be appropriate.
(3) Antidiscrimination limitation
The Secretary shall not enter into an agreement with an entity to provide health care items or services under the demonstration program, or with an entity to administer the program, unless such entity guarantees that it will not deny, limit, or condition the coverage or provision of benefits under the program, for individuals eligible to be enrolled under such program, based on any health status-related factor described in section 2702(a)(1) 1 of the Public Health Service Act.
(d) Limitations on judicial review
The following actions and determinations with respect to the demonstration program shall not be subject to review by a judicial or administrative tribunal:
(1) Limiting the implementation of the program under subsection (a)(2).
(2) Establishment of program participation standards under subsection (a)(5) or the denial or termination of, or refusal to renew, an agreement with an entity to provide health care items and services under the program.
(3) Establishment of program administration contract performance standards under subsection (b)(6), the refusal to renew a program administration contract, or the noncompetitive award or renewal of a program administration contract under subsection (b)(4)(B).
(4) Establishment of payment rates, through negotiation or otherwise, under a program agreement or a program administration contract.
(5) A determination with respect to the program (where specifically authorized by the program authority or by subsection (c)(2))—
(A) as to whether cost savings have been achieved, and the amount of savings; or
(B) as to whether, to whom, and in what amounts bonuses will be paid.
(e) Application limited to parts A and B
None of the provisions of this section or of the demonstration program shall apply to the programs under part C.
(f) Reports to Congress
Not later than two years after December 21, 2000, and biennially thereafter for six years, the Secretary shall report to Congress on the use of authorities under the demonstration program. Each report shall address the impact of the use of those authorities on expenditures, access, and quality under the programs under this subchapter.
(Aug. 14, 1935, ch. 531, title XVIII, §1866B, as added
Editorial Notes
References in Text
Section 2702 of the Public Health Service Act, referred to in subsec. (c)(3), is section 2702 of act July 1, 1944, which was classified to
Codification
In subsec. (b)(4)(B), "
Amendments
2003—Subsec. (b)(7)(D).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
1 See References in Text note below.
§1395cc–3. Health care quality demonstration program
(a) Definitions
In this section:
(1) Beneficiary
The term "beneficiary" means an individual who is entitled to benefits under part A and enrolled under part B, including any individual who is enrolled in a Medicare Advantage plan under part C.
(2) Health care group
(A) In general
The term "health care group" means—
(i) a group of physicians that is organized at least in part for the purpose of providing physician's services under this subchapter;
(ii) an integrated health care delivery system that delivers care through coordinated hospitals, clinics, home health agencies, ambulatory surgery centers, skilled nursing facilities, rehabilitation facilities and clinics, and employed, independent, or contracted physicians; or
(iii) an organization representing regional coalitions of groups or systems described in clause (i) or (ii).
(B) Inclusion
As the Secretary determines appropriate, a health care group may include a hospital or any other individual or entity furnishing items or services for which payment may be made under this subchapter that is affiliated with the health care group under an arrangement structured so that such hospital, individual, or entity participates in a demonstration project under this section.
(3) Physician
Except as otherwise provided for by the Secretary, the term "physician" means any individual who furnishes services that may be paid for as physicians' services under this subchapter.
(b) Demonstration projects
The Secretary shall establish a demonstration program under which the Secretary shall approve demonstration projects that examine health delivery factors that encourage the delivery of improved quality in patient care, including—
(1) the provision of incentives to improve the safety of care provided to beneficiaries;
(2) the appropriate use of best practice guidelines by providers and services by beneficiaries;
(3) reduced scientific uncertainty in the delivery of care through the examination of variations in the utilization and allocation of services, and outcomes measurement and research;
(4) encourage shared decision making between providers and patients;
(5) the provision of incentives for improving the quality and safety of care and achieving the efficient allocation of resources;
(6) the appropriate use of culturally and ethnically sensitive health care delivery; and
(7) the financial effects on the health care marketplace of altering the incentives for care delivery and changing the allocation of resources.
(c) Administration by contract
(1) In general
Except as otherwise provided in this section, the Secretary may administer the demonstration program established under this section in a manner that is similar to the manner in which the demonstration program established under
(2) Alternative payment systems
A health care group that receives assistance under this section may, with respect to the demonstration project to be carried out with such assistance, include proposals for the use of alternative payment systems for items and services provided to beneficiaries by the group that are designed to—
(A) encourage the delivery of high quality care while accomplishing the objectives described in subsection (b); and
(B) streamline documentation and reporting requirements otherwise required under this subchapter.
(3) Benefits
A health care group that receives assistance under this section may, with respect to the demonstration project to be carried out with such assistance, include modifications to the package of benefits available under the original medicare fee-for-service program under parts A and B or the package of benefits available through a Medicare Advantage plan under part C. The criteria employed under the demonstration program under this section to evaluate outcomes and determine best practice guidelines and incentives shall not be used as a basis for the denial of medicare benefits under the demonstration program to patients against their wishes (or if the patient is incompetent, against the wishes of the patient's surrogate) on the basis of the patient's age or expected length of life or of the patient's present or predicted disability, degree of medical dependency, or quality of life.
(d) Eligibility criteria
To be eligible to receive assistance under this section, an entity shall—
(1) be a health care group;
(2) meet quality standards established by the Secretary, including—
(A) the implementation of continuous quality improvement mechanisms that are aimed at integrating community-based support services, primary care, and referral care;
(B) the implementation of activities to increase the delivery of effective care to beneficiaries;
(C) encouraging patient participation in preference-based decisions;
(D) the implementation of activities to encourage the coordination and integration of medical service delivery; and
(E) the implementation of activities to measure and document the financial impact on the health care marketplace of altering the incentives of health care delivery and changing the allocation of resources; and
(3) meet such other requirements as the Secretary may establish.
(e) Waiver authority
The Secretary may waive such requirements of this subchapter and subchapter XI as may be necessary to carry out the purposes of the demonstration program established under this section.
(f) Budget neutrality
With respect to the period of the demonstration program under subsection (b), the aggregate expenditures under this subchapter for such period shall not exceed the aggregate expenditures that would have been expended under this subchapter if the program established under this section had not been implemented.
(g) Notice requirements
In the case of an individual that receives health care items or services under a demonstration program carried out under this section, the Secretary shall ensure that such individual is notified of any waivers of coverage or payment rules that are applicable to such individual under this subchapter as a result of the participation of the individual in such program.
(h) Participation and support by Federal agencies
In carrying out the demonstration program under this section, the Secretary may direct—
(1) the Director of the National Institutes of Health to expand the efforts of the Institutes to evaluate current medical technologies and improve the foundation for evidence-based practice;
(2) the Administrator of the Agency for Healthcare Research and Quality to, where possible and appropriate, use the program under this section as a laboratory for the study of quality improvement strategies and to evaluate, monitor, and disseminate information relevant to such program; and
(3) the Administrator of the Centers for Medicare & Medicaid Services and the Administrator of the Center for Medicare Choices to support linkages of relevant medicare data to registry information from participating health care groups for the beneficiary populations served by the participating groups, for analysis supporting the purposes of the demonstration program, consistent with the applicable provisions of the Health Insurance Portability and Accountability Act of 1996.
(Aug. 14, 1935, ch. 531, title XVIII, §1866C, as added
Editorial Notes
References in Text
The Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (h)(3), is
Amendments
2010—Subsec. (b).
Subsec. (f).
§1395cc–4. National pilot program on payment bundling
(a) Implementation
(1) In general
The Secretary shall establish a pilot program for integrated care during an episode of care provided to an applicable beneficiary around a hospitalization in order to improve the coordination, quality, and efficiency of health care services under this subchapter.
(2) Definitions
In this section:
(A) Applicable beneficiary
The term "applicable beneficiary" means an individual who—
(i) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B of such subchapter, but not enrolled under part C or a PACE program under
(ii) is admitted to a hospital for an applicable condition.
(B) Applicable condition
The term "applicable condition" means 1 or more of 10 conditions selected by the Secretary. In selecting conditions under the preceding sentence, the Secretary shall take into consideration the following factors:
(i) Whether the conditions selected include a mix of chronic and acute conditions.
(ii) Whether the conditions selected include a mix of surgical and medical conditions.
(iii) Whether a condition is one for which there is evidence of an opportunity for providers of services and suppliers to improve the quality of care furnished while reducing total expenditures under this subchapter.
(iv) Whether a condition has significant variation in—
(I) the number of readmissions; and
(II) the amount of expenditures for post-acute care spending under this subchapter.
(v) Whether a condition is high-volume and has high post-acute care expenditures under this subchapter.
(vi) Which conditions the Secretary determines are most amenable to bundling across the spectrum of care given practice patterns under this subchapter.
(C) Applicable services
The term "applicable services" means the following:
(i) Acute care inpatient services.
(ii) Physicians' services delivered in and outside of an acute care hospital setting.
(iii) Outpatient hospital services, including emergency department services.
(iv) Post-acute care services, including home health services, skilled nursing services, inpatient rehabilitation services, and inpatient hospital services furnished by a long-term care hospital.
(v) Other services the Secretary determines appropriate.
(D) Episode of care
(i) In general
Subject to clause (ii), the term "episode of care" means, with respect to an applicable condition and an applicable beneficiary, the period that includes—
(I) the 3 days prior to the admission of the applicable beneficiary to a hospital for the applicable condition;
(II) the length of stay of the applicable beneficiary in such hospital; and
(III) the 30 days following the discharge of the applicable beneficiary from such hospital.
(ii) Establishment of period by the Secretary
The Secretary, as appropriate, may establish a period (other than the period described in clause (i)) for an episode of care under the pilot program.
(E) Physicians' services
The term "physicians' services" has the meaning given such term in
(F) Pilot program
The term "pilot program" means the pilot program under this section.
(G) Provider of services
The term "provider of services" has the meaning given such term in
(H) Readmission
The term "readmission" has the meaning given such term in
(I) Supplier
The term "supplier" has the meaning given such term in
(3) Deadline for implementation
The Secretary shall establish the pilot program not later than January 1, 2013.
(b) Developmental phase
(1) Determination of patient assessment instrument
The Secretary shall determine which patient assessment instrument (such as the Continuity Assessment Record and Evaluation (CARE) tool) shall be used under the pilot program to evaluate the applicable condition of an applicable beneficiary for purposes of determining the most clinically appropriate site for the provision of post-acute care to the applicable beneficiary.
(2) Development of quality measures for an episode of care and for post-acute care
(A) In general
The Secretary, in consultation with the Agency for Healthcare Research and Quality and the entity with a contract under
(i) for episodes of care; and
(ii) for post-acute care.
(B) Site-neutral post-acute care quality measures
Any quality measures developed under subparagraph (A)(ii) shall be site-neutral.
(C) Coordination with quality measure development and endorsement procedures
The Secretary shall ensure that the development of quality measures under subparagraph (A) is done in a manner that is consistent with the measures developed and endorsed under section 1 1395aaa and 1395aaa–1 of this title that are applicable to all post-acute care settings.
(c) Details
(1) Duration
(A) In general
Subject to subparagraph (B), the pilot program shall be conducted for a period of 5 years.
(B) Expansion
The Secretary may, at any point after January 1, 2016, expand the duration and scope of the pilot program, to the extent determined appropriate by the Secretary, if—
(i) the Secretary determines that such expansion is expected to—
(I) reduce spending under this subchapter without reducing the quality of care; or
(II) improve the quality of care and reduce spending;
(ii) the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under this subchapter; and
(iii) the Secretary determines that such expansion would not deny or limit the coverage or provision of benefits under this subchapter for individuals.
(2) Participating providers of services and suppliers
(A) In general
An entity comprised of providers of services and suppliers, including a hospital, a physician group, a skilled nursing facility, and a home health agency, who are otherwise participating under this subchapter, may submit an application to the Secretary to provide applicable services to applicable individuals under this section.
(B) Requirements
The Secretary shall develop requirements for entities to participate in the pilot program under this section. Such requirements shall ensure that applicable beneficiaries have an adequate choice of providers of services and suppliers under the pilot program.
(3) Payment methodology
(A) In general
(i) Establishment of payment methods
The Secretary shall develop payment methods for the pilot program for entities participating in the pilot program. Such payment methods may include bundled payments and bids from entities for episodes of care. The Secretary shall make payments to the entity for services covered under this section.
(ii) No additional program expenditures
Payments under this section for applicable items and services under this subchapter (including payment for services described in subparagraph (B)) for applicable beneficiaries for a year shall be established in a manner that does not result in spending more for such entity for such beneficiaries than would otherwise be expended for such entity for such beneficiaries for such year if the pilot program were not implemented, as estimated by the Secretary.
(B) Inclusion of certain services
A payment methodology tested under the pilot program shall include payment for the furnishing of applicable services and other appropriate services, such as care coordination, medication reconciliation, discharge planning, transitional care services, and other patient-centered activities as determined appropriate by the Secretary.
(C) Bundled payments
(i) In general
A bundled payment under the pilot program shall—
(I) be comprehensive, covering the costs of applicable services and other appropriate services furnished to an individual during an episode of care (as determined by the Secretary); and
(II) be made to the entity which is participating in the pilot program.
(ii) Requirement for provision of applicable services and other appropriate services
Applicable services and other appropriate services for which payment is made under this subparagraph shall be furnished or directed by the entity which is participating in the pilot program.
(D) Payment for post-acute care services after the episode of care
The Secretary shall establish procedures, in the case where an applicable beneficiary requires continued post-acute care services after the last day of the episode of care, under which payment for such services shall be made.
(4) Quality measures
(A) In general
The Secretary shall establish quality measures (including quality measures of process, outcome, and structure) related to care provided by entities participating in the pilot program. Quality measures established under the preceding sentence shall include measures of the following:
(i) Functional status improvement.
(ii) Reducing rates of avoidable hospital readmissions.
(iii) Rates of discharge to the community.
(iv) Rates of admission to an emergency room after a hospitalization.
(v) Incidence of health care acquired infections.
(vi) Efficiency measures.
(vii) Measures of patient-centeredness of care.
(viii) Measures of patient perception of care.
(ix) Other measures, including measures of patient outcomes, determined appropriate by the Secretary.
(B) Reporting on quality measures
(i) In general
A entity shall submit data to the Secretary on quality measures established under subparagraph (A) during each year of the pilot program (in a form and manner, subject to clause (iii), specified by the Secretary).
(ii) Submission of data through electronic health record
To the extent practicable, the Secretary shall specify that data on measures be submitted under clause (i) through the use of an qualified electronic health record (as defined in
(d) Waiver
The Secretary may waive such provisions of this subchapter and subchapter XI as may be necessary to carry out the pilot program.
(e) Independent evaluation and reports on pilot program
(1) Independent evaluation
The Secretary shall conduct an independent evaluation of the pilot program, including the extent to which the pilot program has—
(A) improved quality measures established under subsection (c)(4)(A);
(B) improved health outcomes;
(C) improved applicable beneficiary access to care; and
(D) reduced spending under this subchapter.
(2) Reports
(A) Interim report
Not later than 2 years after the implementation of the pilot program, the Secretary shall submit to Congress a report on the initial results of the independent evaluation conducted under paragraph (1).
(B) Final report
Not later than 3 years after the implementation of the pilot program, the Secretary shall submit to Congress a report on the final results of the independent evaluation conducted under paragraph (1).
(f) Consultation
The Secretary shall consult with representatives of small rural hospitals, including critical access hospitals (as defined in
(g) Application of pilot program to continuing care hospitals
(1) In general
In conducting the pilot program, the Secretary shall apply the provisions of the program so as to separately pilot test the continuing care hospital model.
(2) Special rules
In pilot testing the continuing care hospital model under paragraph (1), the following rules shall apply:
(A) Such model shall be tested without the limitation to the conditions selected under subsection (a)(2)(B).
(B) Notwithstanding subsection (a)(2)(D), an episode of care shall be defined as the full period that a patient stays in the continuing care hospital plus the first 30 days following discharge from such hospital.
(3) Continuing care hospital defined
In this subsection, the term "continuing care hospital" means an entity that has demonstrated the ability to meet patient care and patient safety standards and that provides under common management the medical and rehabilitation services provided in inpatient rehabilitation hospitals and units (as defined in
(h) Administration
(Aug. 14, 1935, ch. 531, title XVIII, §1866D, as added and amended
Editorial Notes
References in Text
Parts A, B, and C, referred to in subsec. (a)(2)(A)(i), are classified to sections 1395c et seq., 1395j et seq., and 1395w–21 et seq., respectively, of this title.
Codification
Another section 1866D of act Aug. 14, 1935, was renumbered section 1866E and is classified to
Amendments
2010—
Subsec. (a)(2)(B).
Subsec. (c)(1)(B).
Subsec. (g).
1 So in original. Probably should be "sections".
2 See References in Text note below.
§1395cc–5. Independence at home medical practice demonstration program
(a) Establishment
(1) In general
The Secretary shall conduct a demonstration program (in this section referred to as the "demonstration program") to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams designed to reduce expenditures and improve health outcomes in the provision of items and services under this subchapter to applicable beneficiaries (as defined in subsection (d)).
(2) Requirement
The demonstration program shall test whether a model described in paragraph (1), which is accountable for providing comprehensive, coordinated, continuous, and accessible care to high-need populations at home and coordinating health care across all treatment settings, results in—
(A) reducing preventable hospitalizations;
(B) preventing hospital readmissions;
(C) reducing emergency room visits;
(D) improving health outcomes commensurate with the beneficiaries' stage of chronic illness;
(E) improving the efficiency of care, such as by reducing duplicative diagnostic and laboratory tests;
(F) reducing the cost of health care services covered under this subchapter; and
(G) achieving beneficiary and family caregiver satisfaction.
(b) Independence at home medical practice
(1) Independence at home medical practice defined
In this section:
(A) In general
The term "independence at home medical practice" means a legal entity that—
(i) is comprised of an individual physician or nurse practitioner or group of physicians and nurse practitioners that provides care as part of a team that includes physicians, nurses, physician assistants, pharmacists, and other health and social services staff as appropriate who have experience providing home-based primary care to applicable beneficiaries, make in-home visits, and are available 24 hours per day, 7 days per week to carry out plans of care that are tailored to the individual beneficiary's chronic conditions and designed to achieve the results in subsection (a);
(ii) is organized at least in part for the purpose of providing physicians' services;
(iii) has documented experience in providing home-based primary care services to high-cost chronically ill beneficiaries, as determined appropriate by the Secretary;
(iv) furnishes services to at least 200 applicable beneficiaries (as defined in subsection (d)) during each year of the demonstration program;
(v) has entered into an agreement with the Secretary;
(vi) uses electronic health information systems, remote monitoring, and mobile diagnostic technology; and
(vii) meets such other criteria as the Secretary determines to be appropriate to participate in the demonstration program.
The entity shall report on quality measures (in such form, manner, and frequency as specified by the Secretary, which may be for the group, for providers of services and suppliers, or both) and report to the Secretary (in a form, manner, and frequency as specified by the Secretary) such data as the Secretary determines appropriate to monitor and evaluate the demonstration program.
(B) Physician
The term "physician" includes, except as the Secretary may otherwise provide, any individual who furnishes services for which payment may be made as physicians' services and has the medical training or experience to fulfill the physician's role described in subparagraph (A)(i).
(2) Participation of nurse practitioners and physician assistants
Nothing in this section shall be construed to prevent a nurse practitioner or physician assistant from participating in, or leading, a home-based primary care team as part of an independence at home medical practice if—
(A) all the requirements of this section are met;
(B) the nurse practitioner or physician assistant, as the case may be, is acting consistent with State law; and
(C) the nurse practitioner or physician assistant has the medical training or experience to fulfill the nurse practitioner or physician assistant role described in paragraph (1)(A)(i).
(3) Inclusion of providers and practitioners
Nothing in this subsection shall be construed as preventing an independence at home medical practice from including a provider of services or a participating practitioner described in
(4) Quality and performance standards
The Secretary shall develop quality performance standards for independence at home medical practices participating in the demonstration program.
(c) Payment methodology
(1) Establishment of target spending level
The Secretary shall establish an estimated annual spending target, for the amount the Secretary estimates would have been spent in the absence of the demonstration, for items and services covered under parts A and B furnished to applicable beneficiaries for each qualifying independence at home medical practice under this section. Such spending targets shall be determined on a per capita basis. Such spending targets shall include a risk corridor that takes into account normal variation in expenditures for items and services covered under parts A and B furnished to such beneficiaries with the size of the corridor being related to the number of applicable beneficiaries furnished services by each independence at home medical practice. The spending targets may also be adjusted for other factors as the Secretary determines appropriate.
(2) Incentive payments
Subject to performance on quality measures, a qualifying independence at home medical practice is eligible to receive an incentive payment under this section if actual expenditures for a year for the applicable beneficiaries it enrolls are less than the estimated spending target established under paragraph (1) for such year. An incentive payment for such year shall be equal to a portion (as determined by the Secretary) of the amount by which actual expenditures (including incentive payments under this paragraph) for applicable beneficiaries under parts A and B for such year are estimated to be less than 5 percent less than the estimated spending target for such year, as determined under paragraph (1).
(d) Applicable beneficiaries
(1) Definition
In this section, the term "applicable beneficiary" means, with respect to a qualifying independence at home medical practice, an individual who the practice has determined—
(A) is entitled to benefits under part A and enrolled for benefits under part B;
(B) is not enrolled in a Medicare Advantage plan under part C or a PACE program under
(C) has 2 or more chronic illnesses, such as congestive heart failure, diabetes, other dementias designated by the Secretary, chronic obstructive pulmonary disease, ischemic heart disease, stroke, Alzheimer's Disease and neurodegenerative diseases, and other diseases and conditions designated by the Secretary which result in high costs under this subchapter;
(D) within the past 12 months has had a nonelective hospital admission;
(E) within the past 12 months has received acute or subacute rehabilitation services;
(F) has 2 or more functional dependencies requiring the assistance of another person (such as bathing, dressing, toileting, walking, or feeding); and
(G) meets such other criteria as the Secretary determines appropriate.
(2) Patient election to participate
The Secretary shall determine an appropriate method of ensuring that applicable beneficiaries have agreed to enroll in an independence at home medical practice under the demonstration program. Enrollment in the demonstration program shall be voluntary.
(3) Beneficiary access to services
Nothing in this section shall be construed as encouraging physicians or nurse practitioners to limit applicable beneficiary access to services covered under this subchapter and applicable beneficiaries shall not be required to relinquish access to any benefit under this subchapter as a condition of receiving services from an independence at home medical practice.
(e) Implementation
(1) Starting date
The demonstration program shall begin no later than January 1, 2012. Agreements with an independence at home medical practice under the demonstration program may cover not more than a 10-year period.
(2) No physician duplication in demonstration participation
The Secretary shall not pay an independence at home medical practice under this section that participates in
(3) No beneficiary duplication in demonstration participation
The Secretary shall ensure that no applicable beneficiary enrolled in an independence at home medical practice under this section is participating in the programs under
(4) Preference
In approving an independence at home medical practice, the Secretary shall give preference to practices that are—
(A) located in high-cost areas of the country;
(B) have experience in furnishing health care services to applicable beneficiaries in the home; and
(C) use electronic medical records, health information technology, and individualized plans of care.
(5) Limitation on number of practices
In selecting qualified independence at home medical practices to participate under the demonstration program, the Secretary shall limit the number of such practices so that the number of applicable beneficiaries that may participate in the demonstration program does not exceed 20,000. An applicable beneficiary that participates in the demonstration program by reason of the increase from 10,000 to 15,000 in the preceding sentence pursuant to the amendment made by section 50301(a)(1)(B)(i) of the Advancing Chronic Care, Extenders, and Social Services Act shall be considered in the spending target estimates under paragraph (1) of subsection (c) and the incentive payment calculations under paragraph (2) of such subsection for the sixth through tenth years of such program. An applicable beneficiary that participates in the demonstration program by reason of the increase from 15,000 to 20,000 in the first sentence of this paragraph pursuant to the amendment made by section 105 of division CC of the Consolidated Appropriations Act, 2021 shall be considered in the spending target estimates under paragraph (1) of subsection (c) and the incentive payment calculations under paragraph (2) of such subsection for the eighth through tenth years of such program.
(6) Waiver
The Secretary may waive such provisions of this subchapter and subchapter XI as the Secretary determines necessary in order to implement the demonstration program.
(7) Administration
(f) Evaluation and monitoring
(1) In general
The Secretary shall evaluate each independence at home medical practice under the demonstration program to assess whether the practice achieved the results described in subsection (a).
(2) Monitoring applicable beneficiaries
The Secretary may monitor data on expenditures and quality of services under this subchapter after an applicable beneficiary discontinues receiving services under this subchapter through a qualifying independence at home medical practice.
(g) Reports to Congress
The Secretary shall conduct an independent evaluation of the demonstration program and submit to Congress a final report, including best practices under the demonstration program, including, to the extent practicable, with respect to the use of electronic health information systems, as described in subsection (b)(1)(A)(vi). Such report shall include an analysis of the demonstration program on coordination of care, expenditures under this subchapter, applicable beneficiary access to services, and the quality of health care services provided to applicable beneficiaries.
(h) Funding
For purposes of administering and carrying out the demonstration program, other than for payments for items and services furnished under this subchapter and incentive payments under subsection (c), in addition to funds otherwise appropriated, there shall be transferred to the Secretary for the Center for Medicare & Medicaid Services Program Management Account from the Federal Hospital Insurance Trust Fund under
(i) Termination
(1) Mandatory termination
The Secretary shall terminate an agreement with an independence at home medical practice if—
(A) the Secretary estimates or determines that such practice did not achieve savings for the third of 3 consecutive years under the demonstration program; or
(B) such practice fails to meet quality standards during any year of the demonstration program.
(2) Permissive termination
The Secretary may terminate an agreement with an independence at home medical practice for such other reasons determined appropriate by the Secretary.
(Aug. 14, 1935, ch. 531, title XVIII, §1866E, formerly §1866D, as added and renumbered §1866E,
Editorial Notes
References in Text
Parts A, B, and C, referred to in subsecs. (c) and (d)(1)(A), (B), are classified to sections 1395c et seq., 1395j et seq., and 1395w–21 et seq., respectively, of this title.
Section 50301(a)(1)(B)(i) of the Advancing Chronic Care, Extenders, and Social Services Act, referred to in subsec. (e)(5), probably means section 50301(a)(1)(B)(i) of the Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act, div. E of
Section 105 of division CC of the Consolidated Appropriations Act, 2021, referred to in subsec. (e)(5), is section 105 of div. CC of
Amendments
2020—Subsec. (e)(1).
Subsec. (e)(5).
Subsec. (h).
2018—Subsec. (e)(1).
Subsec. (e)(5).
Subsec. (g).
Subsec. (i)(1)(A).
2015—Subsec. (e)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2018 Amendment
§1395cc–6. Opioid use disorder treatment demonstration program
(a) Implementation of 4-year demonstration program
(1) In general
Not later than January 1, 2021, the Secretary shall implement a 4-year demonstration program under this subchapter (in this section referred to as the "Program") to increase access of applicable beneficiaries to opioid use disorder treatment services, improve physical and mental health outcomes for such beneficiaries, and to the extent possible, reduce expenditures under this subchapter. Under the Program, the Secretary shall make payments under subsection (e) to participants (as defined in subsection (c)(1)(A)) for furnishing opioid use disorder treatment services delivered through opioid use disorder care teams, or arranging for such services to be furnished, to applicable beneficiaries participating in the Program.
(2) Opioid use disorder treatment services
For purposes of this section, the term "opioid use disorder treatment services"—
(A) means, with respect to an applicable beneficiary, services that are furnished for the treatment of opioid use disorders and that utilize drugs approved under
(B) includes—
(i) medication-assisted treatment;
(ii) treatment planning;
(iii) psychiatric, psychological, or counseling services (or any combination of such services), as appropriate;
(iv) social support services, as appropriate; and
(v) care management and care coordination services, including coordination with other providers of services and suppliers not on an opioid use disorder care team.
(b) Program design
(1) In general
The Secretary shall design the Program in such a manner to allow for the evaluation of the extent to which the Program accomplishes the following purposes:
(A) Reduces hospitalizations and emergency department visits.
(B) Increases use of medication-assisted treatment for opioid use disorders.
(C) Improves health outcomes of individuals with opioid use disorders, including by reducing the incidence of infectious diseases (such as hepatitis C and HIV).
(D) Does not increase the total spending on items and services under this subchapter.
(E) Reduces deaths from opioid overdose.
(F) Reduces the utilization of inpatient residential treatment.
(2) Consultation
In designing the Program, including the criteria under subsection (e)(2)(A), the Secretary shall, not later than 3 months after October 24, 2018, consult with specialists in the field of addiction, clinicians in the primary care community, and beneficiary groups.
(c) Participants; opioid use disorder care teams
(1) Participants
(A) Definition
In this section, the term "participant" means an entity or individual—
(i) that is otherwise enrolled under this subchapter and that is—
(I) a physician (as defined in
(II) a group practice comprised of at least one physician described in subclause (I);
(III) a hospital outpatient department;
(IV) a federally qualified health center (as defined in
(V) a rural health clinic (as defined in
(VI) a community mental health center (as defined in
(VII) a clinic certified as a certified community behavioral health clinic pursuant to section 223 of the Protecting Access to Medicare Act of 2014; or
(VIII) any other individual or entity specified by the Secretary;
(ii) that applied for and was selected to participate in the Program pursuant to an application and selection process established by the Secretary; and
(iii) that establishes an opioid use disorder care team (as defined in paragraph (2)) through employing or contracting with health care practitioners described in paragraph (2)(A), and uses such team to furnish or arrange for opioid use disorder treatment services in the outpatient setting under the Program.
(B) Preference
In selecting participants for the Program, the Secretary shall give preference to individuals and entities that are located in areas with a prevalence of opioid use disorders that is higher than the national average prevalence.
(2) Opioid use disorder care teams
(A) In general
For purposes of this section, the term "opioid use disorder care team" means a team of health care practitioners established by a participant described in paragraph (1)(A) that—
(i) shall include—
(I) at least one physician (as defined in
(II) at least one eligible practitioner (as defined in paragraph (3)), who may be a physician who meets the criterion in subclause (I); and
(ii) may include other practitioners licensed under State law to furnish psychiatric, psychological, counseling, and social services to applicable beneficiaries.
(B) Requirements for receipt of payment under program
In order to receive payments under subsection (e), each participant in the Program shall—
(i) furnish opioid use disorder treatment services through opioid use disorder care teams to applicable beneficiaries who agree to receive the services;
(ii) meet minimum criteria, as established by the Secretary; and
(iii) submit to the Secretary, in such form, manner, and frequency as specified by the Secretary, with respect to each applicable beneficiary for whom opioid use disorder treatment services are furnished by the opioid use disorder care team, data and such other information as the Secretary determines appropriate to—
(I) monitor and evaluate the Program;
(II) determine if minimum criteria are met under clause (ii); and
(III) determine the incentive payment under subsection (e).
(3) Eligible practitioner defined
For purposes of this section, the term "eligible practitioner" means a physician or other health care practitioner, such as a nurse practitioner, that—
(A) is enrolled under
(B) is authorized to prescribe or dispense narcotic drugs to individuals for maintenance treatment or detoxification treatment.
(d) Participation of applicable beneficiaries
(1) Applicable beneficiary defined
In this section, the term "applicable beneficiary" means an individual who—
(A) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B;
(B) is not enrolled in a Medicare Advantage plan under part C;
(C) has a current diagnosis for an opioid use disorder; and
(D) meets such other criteria as the Secretary determines appropriate.
Such term shall include an individual who is dually eligible for benefits under this subchapter and subchapter XIX if such individual satisfies the criteria described in subparagraphs (A) through (D).
(2) Voluntary beneficiary participation; limitation on number of beneficiaries
An applicable beneficiary may participate in the Program on a voluntary basis and may terminate participation in the Program at any time. Not more than 20,000 applicable beneficiaries may participate in the Program at any time.
(3) Services
In order to participate in the Program, an applicable beneficiary shall agree to receive opioid use disorder treatment services from a participant. Participation under the Program shall not affect coverage of or payment for any other item or service under this subchapter for the applicable beneficiary.
(4) Beneficiary access to services
Nothing in this section shall be construed as encouraging providers to limit applicable beneficiary access to services covered under this subchapter, and applicable beneficiaries shall not be required to relinquish access to any benefit under this subchapter as a condition of receiving services from a participant in the Program.
(e) Payments
(1) Per applicable beneficiary per month care management fee
(A) In general
The Secretary shall establish a schedule of per applicable beneficiary per month care management fees. Such a per applicable beneficiary per month care management fee shall be paid to a participant in addition to any other amount otherwise payable under this subchapter to the health care practitioners in the participant's opioid use disorder care team or, if applicable, to the participant. A participant may use such per applicable beneficiary per month care management fee to deliver additional services to applicable beneficiaries, including services not otherwise eligible for payment under this subchapter.
(B) Payment amounts
In carrying out subparagraph (A), the Secretary may—
(i) consider payments otherwise payable under this subchapter for opioid use disorder treatment services and the needs of applicable beneficiaries;
(ii) pay a higher per applicable beneficiary per month care management fee for an applicable beneficiary who receives more intensive treatment services from a participant and for whom those services are appropriate based on clinical guidelines for opioid use disorder care;
(iii) pay a higher per applicable beneficiary per month care management fee for the month in which the applicable beneficiary begins treatment with a participant than in subsequent months, to reflect the greater time and costs required for the planning and initiation of treatment, as compared to maintenance of treatment; and
(iv) take into account whether a participant's opioid use disorder care team refers applicable beneficiaries to other suppliers or providers for any opioid use disorder treatment services.
(C) No duplicate payment
The Secretary shall make payments under this paragraph to only one participant for services furnished to an applicable beneficiary during a calendar month.
(2) Incentive payments
(A) In general
Under the Program, the Secretary shall establish a performance-based incentive payment, which shall be paid (using a methodology established and at a time determined appropriate by the Secretary) to participants based on the performance of participants with respect to criteria, as determined appropriate by the Secretary, in accordance with subparagraph (B).
(B) Criteria
(i) In general
Criteria described in subparagraph (A) may include consideration of the following:
(I) Patient engagement and retention in treatment.
(II) Evidence-based medication-assisted treatment.
(III) Other criteria established by the Secretary.
(ii) Required consultation and consideration
In determining criteria described in subparagraph (A), the Secretary shall—
(I) consult with stakeholders, including clinicians in the primary care community and in the field of addiction medicine; and
(II) consider existing clinical guidelines for the treatment of opioid use disorders.
(C) No duplicate payment
The Secretary shall ensure that no duplicate payments under this paragraph are made with respect to an applicable beneficiary.
(f) Multipayer strategy
In carrying out the Program, the Secretary shall encourage other payers to provide similar payments and to use similar criteria as applied under the Program under subsection (e)(2)(C). The Secretary may enter into a memorandum of understanding with other payers to align the methodology for payment provided by such a payer related to opioid use disorder treatment services with such methodology for payment under the Program.
(g) Evaluation
(1) In general
The Secretary shall conduct an intermediate and final evaluation of the program. Each such evaluation shall determine the extent to which each of the purposes described in subsection (b) have been accomplished under the Program.
(2) Reports
The Secretary shall submit to Congress—
(A) a report with respect to the intermediate evaluation under paragraph (1) not later than 3 years after the date of the implementation of the Program; and
(B) a report with respect to the final evaluation under paragraph (1) not later than 6 years after such date.
(h) Funding
(1) Administrative funding
For the purposes of implementing, administering, and carrying out the Program (other than for purposes described in paragraph (2)), $5,000,000 shall be available from the Federal Supplementary Medical Insurance Trust Fund under
(2) Care management fees and incentives
For the purposes of making payments under subsection (e), $10,000,000 shall be available from the Federal Supplementary Medical Insurance Trust Fund under
(3) Availability
Amounts transferred under this subsection for a fiscal year shall be available until expended.
(i) Waivers
The Secretary may waive any provision of this subchapter as may be necessary to carry out the Program under this section.
(Aug. 14, 1935, ch. 531, title XVIII, §1866F, as added
Editorial Notes
References in Text
Section 223 of the Protecting Access to Medicare Act of 2014, referred to in subsec. (c)(1)(A)(i)(VII), is section 223 of
Amendments
2022—Subsec. (c)(3)(C).
§1395cc–7. Extension of Acute Hospital Care at Home initiative
(a) In general
(1) Extension
With respect to inpatient hospital admissions occurring during the period beginning on the first day after the end of the emergency period described in
(2) Acute Hospital Care at Home waivers and flexibilities
For the purposes of paragraph (1), the waivers and flexibilities described in this paragraph are the following waivers and flexibilities that were made available to individual hospitals under the Acute Hospital Care at Home initiative of the Secretary during the emergency period described in
(A) Subject to paragraph (3)(D), waiver of the requirements to provide 24-hour nursing services on premises and for the immediate availability of a registered nurse under section 482.23(b) of title 42, Code of Federal Regulations (or any successor regulation), and the waivers of the physical environment and Life Safety Code requirements under section 482.41 of title 42, Code of Federal Regulations (or any successor regulation).
(B) Flexibility to allow a hospital to furnish inpatient services, including routine services, outside the hospital under arrangements, as described in Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Organ Acquisition; Rural Emergency Hospitals: Payment Policies, Conditions of Participation, Provider Enrollment, Physician Self-Referral; New Service Category for Hospital Outpatient Department Prior Authorization Process; Overall Hospital Quality Star Rating; COVID–19 (87 Fed. Reg. 71748 et seq.).
(C) Waiver of the telehealth requirements under clause (i) 1 of
(D) Other waivers and flexibilities that, as of December 29, 2022, were in place for such initiative during such emergency period.
(3) Specified criteria
For purposes of paragraph (1), the specified criteria for granting such waivers and flexibilities to individual hospitals are:
(A) The hospital shall indicate to the Secretary the criteria it would use to ensure that hospital services be furnished only to an individual who requires an inpatient level of care, and shall require that a physician document in the medical record of each such individual that the individual meets such criteria.
(B) The hospital and any other entities providing services under arrangements with the hospital shall ensure that the standard of care to treat an individual at home is the same as the standard of care to treat such individual as an inpatient of the hospital.
(C) The hospital shall ensure that an individual is only eligible for services under paragraph (1) if the individual is a hospital inpatient or is a patient of the hospital's emergency department for whom the hospital determines that an inpatient level of care is required (as described in subparagraph (A)).
(D) The hospital shall meet all patient safety standards determined appropriate by the Secretary, in addition to those that otherwise apply to the hospital, except those for which the waivers and flexibilities under this subsection apply.
(E) The hospital shall provide to the Secretary, at a time, form and manner determined by the Secretary, any data and information the Secretary determines necessary to do the following:
(i) Monitor the quality of care furnished, and to the extent practicable, ensure the safety of individuals and analyze costs of such care.
(ii) Undertake the study described in subsection (b).
(F) The hospital meets such other requirements and conditions as the Secretary determines appropriate.
(4) Termination
The Secretary may terminate a hospital from participation in such initiative (and the waivers and flexibilities applicable to such hospital) if the Secretary determines that the hospital no longer meets the criteria described in paragraph (3).
(b) Study and report
(1) In general
The Secretary shall conduct a study to—
(A) analyze, to the extent practicable, the criteria established by hospitals under the Acute Hospital Care at Home initiative of the Secretary to determine which individuals may be furnished services under such initiative; and
(B) analyze and compare, to the extent practicable—
(i) quality of care furnished to individuals with similar conditions and characteristics in the inpatient setting and through the Acute Hospital Care at Home initiative, including health outcomes, hospital readmission rates, hospital mortality rates, length of stay, infection rates, and patient experience of care;
(ii) clinical conditions treated and diagnosis-related groups of discharges from the inpatient setting and under the Acute Hospital Care at Home initiative;
(iii) costs incurred by furnishing care in the inpatient setting and through the Acute Hospital Care at Home initiative;
(iv) the quantity, mix and intensity of such services (such as in-person visits and virtual contacts with patients) furnished in the Acute Hospital Care at Home initiative and furnished in the inpatient setting; and
(v) socioeconomic information on beneficiaries treated under the initiative, including racial and ethnic data, income, and whether such beneficiaries are dually eligible for benefits under this subchapter and subchapter XIX.
(2) Report
Not later than September 30, 2024, the Secretary of Health and Human Services shall post on a website of the Centers for Medicare & Medicaid Services a report on the study conducted under paragraph (1).
(3) Funding
In addition to amounts otherwise available, there is appropriated to the Centers for Medicare & Medicaid Services Program Management Account for fiscal year 2023, out of any amounts in the Treasury not otherwise appropriated, $5,000,000, to remain available until expended, for purposes of carrying out this subsection.
(c) Implementation
Notwithstanding any other provision of law, the Secretary may implement this section by program instruction or otherwise.
(d) Publicly available information
The Secretary shall, as feasible, make the information collected under subsections (a)(3)(E) and (b)(1) available on the Medicare.gov internet website (or a successor website).
(Aug. 14, 1935, ch. 531, title XVIII, §1866G, as added
Editorial Notes
References in Text
Section 4113(a) of the Health Extenders, Improving Access to Medicare, Medicaid, and CHIP, and Strengthening Public Health Act of 2022, referred to in subsec. (a)(2)(C), is section 4113(a) of div. FF of
1 So in original. Probably should be "clause (iii)". See References in Text note below.
§1395dd. Examination and treatment for emergency medical conditions and women in labor
(a) Medical screening requirement
In the case of a hospital that has a hospital emergency department, if any individual (whether or not eligible for benefits under this subchapter) comes to the emergency department and a request is made on the individual's behalf for examination or treatment for a medical condition, the hospital must provide for an appropriate medical screening examination within the capability of the hospital's emergency department, including ancillary services routinely available to the emergency department, to determine whether or not an emergency medical condition (within the meaning of subsection (e)(1)) exists.
(b) Necessary stabilizing treatment for emergency medical conditions and labor
(1) In general
If any individual (whether or not eligible for benefits under this subchapter) comes to a hospital and the hospital determines that the individual has an emergency medical condition, the hospital must provide either—
(A) within the staff and facilities available at the hospital, for such further medical examination and such treatment as may be required to stabilize the medical condition, or
(B) for transfer of the individual to another medical facility in accordance with subsection (c).
(2) Refusal to consent to treatment
A hospital is deemed to meet the requirement of paragraph (1)(A) with respect to an individual if the hospital offers the individual the further medical examination and treatment described in that paragraph and informs the individual (or a person acting on the individual's behalf) of the risks and benefits to the individual of such examination and treatment, but the individual (or a person acting on the individual's behalf) refuses to consent to the examination and treatment. The hospital shall take all reasonable steps to secure the individual's (or person's) written informed consent to refuse such examination and treatment.
(3) Refusal to consent to transfer
A hospital is deemed to meet the requirement of paragraph (1) with respect to an individual if the hospital offers to transfer the individual to another medical facility in accordance with subsection (c) and informs the individual (or a person acting on the individual's behalf) of the risks and benefits to the individual of such transfer, but the individual (or a person acting on the individual's behalf) refuses to consent to the transfer. The hospital shall take all reasonable steps to secure the individual's (or person's) written informed consent to refuse such transfer.
(c) Restricting transfers until individual stabilized
(1) Rule
If an individual at a hospital has an emergency medical condition which has not been stabilized (within the meaning of subsection (e)(3)(B)), the hospital may not transfer the individual unless—
(A)(i) the individual (or a legally responsible person acting on the individual's behalf) after being informed of the hospital's obligations under this section and of the risk of transfer, in writing requests transfer to another medical facility,
(ii) a physician (within the meaning of
(iii) if a physician is not physically present in the emergency department at the time an individual is transferred, a qualified medical person (as defined by the Secretary in regulations) has signed a certification described in clause (ii) after a physician (as defined in
(B) the transfer is an appropriate transfer (within the meaning of paragraph (2)) to that facility.
A certification described in clause (ii) or (iii) of subparagraph (A) shall include a summary of the risks and benefits upon which the certification is based.
(2) Appropriate transfer
An appropriate transfer to a medical facility is a transfer—
(A) in which the transferring hospital provides the medical treatment within its capacity which minimizes the risks to the individual's health and, in the case of a woman in labor, the health of the unborn child;
(B) in which the receiving facility—
(i) has available space and qualified personnel for the treatment of the individual, and
(ii) has agreed to accept transfer of the individual and to provide appropriate medical treatment;
(C) in which the transferring hospital sends to the receiving facility all medical records (or copies thereof), related to the emergency condition for which the individual has presented, available at the time of the transfer, including records related to the individual's emergency medical condition, observations of signs or symptoms, preliminary diagnosis, treatment provided, results of any tests and the informed written consent or certification (or copy thereof) provided under paragraph (1)(A), and the name and address of any on-call physician (described in subsection (d)(1)(C)) who has refused or failed to appear within a reasonable time to provide necessary stabilizing treatment;
(D) in which the transfer is effected through qualified personnel and transportation equipment, as required including the use of necessary and medically appropriate life support measures during the transfer; and
(E) which meets such other requirements as the Secretary may find necessary in the interest of the health and safety of individuals transferred.
(d) Enforcement
(1) Civil money penalties
(A) A participating hospital that negligently violates a requirement of this section is subject to a civil money penalty of not more than $50,000 (or not more than $25,000 in the case of a hospital with less than 100 beds) for each such violation. The provisions of
(B) Subject to subparagraph (C), any physician who is responsible for the examination, treatment, or transfer of an individual in a participating hospital, including a physician on-call for the care of such an individual, and who negligently violates a requirement of this section, including a physician who—
(i) signs a certification under subsection (c)(1)(A) that the medical benefits reasonably to be expected from a transfer to another facility outweigh the risks associated with the transfer, if the physician knew or should have known that the benefits did not outweigh the risks, or
(ii) misrepresents an individual's condition or other information, including a hospital's obligations under this section,
is subject to a civil money penalty of not more than $50,000 for each such violation and, if the violation is gross and flagrant or is repeated, to exclusion from participation in this subchapter and State health care programs. The provisions of
(C) If, after an initial examination, a physician determines that the individual requires the services of a physician listed by the hospital on its list of on-call physicians (required to be maintained under
(2) Civil enforcement
(A) Personal harm
Any individual who suffers personal harm as a direct result of a participating hospital's violation of a requirement of this section may, in a civil action against the participating hospital, obtain those damages available for personal injury under the law of the State in which the hospital is located, and such equitable relief as is appropriate.
(B) Financial loss to other medical facility
Any medical facility that suffers a financial loss as a direct result of a participating hospital's violation of a requirement of this section may, in a civil action against the participating hospital, obtain those damages available for financial loss, under the law of the State in which the hospital is located, and such equitable relief as is appropriate.
(C) Limitations on actions
No action may be brought under this paragraph more than two years after the date of the violation with respect to which the action is brought.
(3) Consultation with quality improvement organizations
In considering allegations of violations of the requirements of this section in imposing sanctions under paragraph (1) or in terminating a hospital's participation under this subchapter, the Secretary shall request the appropriate quality improvement organization (with a contract under part B of subchapter XI) to assess whether the individual involved had an emergency medical condition which had not been stabilized, and provide a report on its findings. Except in the case in which a delay would jeopardize the health or safety of individuals, the Secretary shall request such a review before effecting a sanction under paragraph (1) and shall provide a period of at least 60 days for such review. Except in the case in which a delay would jeopardize the health or safety of individuals, the Secretary shall also request such a review before making a compliance determination as part of the process of terminating a hospital's participation under this subchapter for violations related to the appropriateness of a medical screening examination, stabilizing treatment, or an appropriate transfer as required by this section, and shall provide a period of 5 days for such review. The Secretary shall provide a copy of the organization's report to the hospital or physician consistent with confidentiality requirements imposed on the organization under such part B.
(4) Notice upon closing an investigation
The Secretary shall establish a procedure to notify hospitals and physicians when an investigation under this section is closed.
(e) Definitions
In this section:
(1) The term "emergency medical condition" means—
(A) a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in—
(i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,
(ii) serious impairment to bodily functions, or
(iii) serious dysfunction of any bodily organ or part; or
(B) with respect to a pregnant woman who is having contractions—
(i) that there is inadequate time to effect a safe transfer to another hospital before delivery, or
(ii) that transfer may pose a threat to the health or safety of the woman or the unborn child.
(2) The term "participating hospital" means a hospital that has entered into a provider agreement under
(3)(A) The term "to stabilize" means, with respect to an emergency medical condition described in paragraph (1)(A), to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility, or, with respect to an emergency medical condition described in paragraph (1)(B), to deliver (including the placenta).
(B) The term "stabilized" means, with respect to an emergency medical condition described in paragraph (1)(A), that no material deterioration of the condition is likely, within reasonable medical probability, to result from or occur during the transfer of the individual from a facility, or, with respect to an emergency medical condition described in paragraph (1)(B), that the woman has delivered (including the placenta).
(4) The term "transfer" means the movement (including the discharge) of an individual outside a hospital's facilities at the direction of any person employed by (or affiliated or associated, directly or indirectly, with) the hospital, but does not include such a movement of an individual who (A) has been declared dead, or (B) leaves the facility without the permission of any such person.
(5) The term "hospital" includes a critical access hospital (as defined in
(f) Preemption
The provisions of this section do not preempt any State or local law requirement, except to the extent that the requirement directly conflicts with a requirement of this section.
(g) Nondiscrimination
A participating hospital that has specialized capabilities or facilities (such as burn units, shock-trauma units, neonatal intensive care units, or (with respect to rural areas) regional referral centers as identified by the Secretary in regulation) shall not refuse to accept an appropriate transfer of an individual who requires such specialized capabilities or facilities if the hospital has the capacity to treat the individual.
(h) No delay in examination or treatment
A participating hospital may not delay provision of an appropriate medical screening examination required under subsection (a) or further medical examination and treatment required under subsection (b) in order to inquire about the individual's method of payment or insurance status.
(i) Whistleblower protections
A participating hospital may not penalize or take adverse action against a qualified medical person described in subsection (c)(1)(A)(iii) or a physician because the person or physician refuses to authorize the transfer of an individual with an emergency medical condition that has not been stabilized or against any hospital employee because the employee reports a violation of a requirement of this section.
(Aug. 14, 1935, ch. 531, title XVIII, §1867, as added
Editorial Notes
Prior Provisions
A prior section 1395dd, act Aug. 14, 1935, ch. 531, title XVIII, §1867, as added July 30, 1965,
Amendments
2020—Subsec. (e)(5).
2011—Subsec. (d)(3).
2003—Subsec. (d)(1)(B).
Subsec. (d)(3).
Subsec. (d)(4).
Subsec. (e)(1)(B).
Subsec. (e)(2).
1997—Subsec. (e)(5).
1994—Subsec. (d)(3).
1990—Subsec. (c)(2)(C).
Subsec. (d)(1).
"(A) termination of its provider agreement under this subchapter in accordance with
"(B) at the option of the Secretary, suspension of such agreement for such period of time as the Secretary determines to be appropriate, upon reasonable notice to the hospital and to the public."
Subsec. (d)(1)(B).
Subsec. (d)(2).
Subsec. (d)(2)(A).
Subsec. (d)(3).
Subsec. (i).
1989—
Subsec. (a).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(1)(A).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(1)(A)(i).
Subsec. (c)(1)(A)(ii).
Subsec. (c)(1)(A)(iii).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B).
Subsec. (c)(2)(C).
Subsec. (c)(2)(D).
Subsec. (c)(2)(E).
Subsec. (d)(2)(B).
Subsec. (d)(2)(C).
"(i) is employed by, or under contract with, the participating hospital, and
"(ii) acting as such an employee or under such a contract, has professional responsibility for the provision of examinations or treatments for the individual, or transfers of the individual, with respect to which the violation occurred."
Subsec. (e)(1).
"(A) placing the patient's health in serious jeopardy,
"(B) serious impairment to bodily functions, or
"(C) serious dysfunction of any bodily organ or part."
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(4).
Subsec. (e)(4)(A).
Subsec. (e)(4)(B).
Subsec. (e)(5).
Subsec. (e)(6).
Subsecs. (g) to (i).
1988—Subsec. (d)(1).
Subsec. (d)(2).
1987—Subsec. (d)(1).
Subsec. (d)(2).
1986—Subsec. (b)(2), (3).
Subsec. (e)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Amendment by
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2003 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4008(b)(1)–(3)(A) of
Amendment by section 4207(a)(1)(A) of
Effective Date of 1989 Amendment
Effective Date of 1988 Amendment
Amendment by
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Effective Date of 1986 Amendment
Amendment by
Effective Date
Short Title
This section is popularly known as the Emergency Medical Treatment and Labor Act (EMTALA).
Emergency Medical Treatment and Labor Act (EMTALA) Technical Advisory Group
"(a)
"(b)
"(1) 4 shall be representatives of hospitals, including at least one public hospital, that have experience with the application of EMTALA and at least 2 of which have not been cited for EMTALA violations;
"(2) 7 shall be practicing physicians drawn from the fields of emergency medicine, cardiology or cardiothoracic surgery, orthopedic surgery, neurosurgery, pediatrics or a pediatric subspecialty, obstetrics-gynecology, and psychiatry, with not more than one physician from any particular field;
"(3) 2 shall represent patients;
"(4) 2 shall be staff involved in EMTALA investigations from different regional offices of the Centers for Medicare & Medicaid Services; and
"(5) 1 shall be from a State survey office involved in EMTALA investigations and 1 shall be from a peer review organization, both of whom shall be from areas other than the regions represented under paragraph (4).
In selecting members described in paragraphs (1) through (3), the Secretary shall consider qualified individuals nominated by organizations representing providers and patients.
"(c)
"(1) shall review EMTALA regulations;
"(2) may provide advice and recommendations to the Secretary with respect to those regulations and their application to hospitals and physicians;
"(3) shall solicit comments and recommendations from hospitals, physicians, and the public regarding the implementation of such regulations; and
"(4) may disseminate information on the application of such regulations to hospitals, physicians, and the public.
"(d)
"(1)
"(2)
"(e)
"(f)
Federal Reimbursement of Emergency Health Services Furnished to Undocumented Aliens
"(a)
"(1)
"(2)
"(b)
"(1)
"(A)
"(B)
"(i) the total amount available for allotments under this paragraph for the fiscal year; and
"(ii) the percentage of undocumented aliens residing in the State as compared to the total number of such aliens residing in all States, as determined by the Statistics Division of the Immigration and Naturalization Service, as of January 2003, based on the 2000 decennial census.
"(2)
"(A)
"(B)
"(i) the total amount available for allotments under this paragraph for the fiscal year; and
"(ii) the percentage of undocumented alien apprehensions in the State in that fiscal year as compared to the total of such apprehensions for all such States for the preceding fiscal year.
"(C)
"(c)
"(1)
"(2)
"(A)
"(i) the amount that the provider demonstrates was incurred for the provision of such services; or
"(ii) amounts determined under a methodology established by the Secretary for purposes of this subsection.
"(B)
"(3)
"(A) may establish different methodologies for types of eligible providers;
"(B) may base payments for hospital services on estimated hospital charges, adjusted to estimated cost, through the application of hospital-specific cost-to-charge ratios;
"(C) shall provide for the election by a hospital to receive either payments to the hospital for—
"(i) hospital and physician services; or
"(ii) hospital services and for a portion of the on-call payments made by the hospital to physicians; and
"(D) shall make quarterly payments under this section to eligible providers.
If a hospital makes the election under subparagraph (C)(i), the hospital shall pass on payments for services of a physician to the physician and may not charge any administrative or other fee with respect to such payments.
"(4)
"(5)
"(A) Undocumented aliens.
"(B) Aliens who have been paroled into the United States at a United States port of entry for the purpose of receiving eligible services.
"(C) Mexican citizens permitted to enter the United States for not more than 72 hours under the authority of a biometric machine readable border crossing identification card (also referred to as a 'laser visa') issued in accordance with the requirements of regulations prescribed under section 101(a)(6) of the Immigration and Nationality Act (
"(d)
"(1)
"(A)
"(B)
"(2)
"(e)
"(1)
"(2)
"(3)
"(4)
"(5)
"(6)
Inspector General Study of Prohibition on Hospital Employment of Physicians
Executive Documents
Ex. Ord. No. 13952. Protecting Vulnerable Newborn and Infant Children
Ex. Ord. No. 13952, Sept. 25, 2020, 85 F.R. 62187, provided:
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Despite these laws, some hospitals refuse the required medical screening examination and stabilizing treatment or otherwise do not provide potentially lifesaving medical treatment to extremely premature or disabled infants, even when parents plead for such treatment. Hospitals might refuse to provide treatment to extremely premature infants—born alive before 24 weeks of gestation—because they believe these infants may not survive, may have to live with long-term disabilities, or may have a quality-of-life deemed to be inadequate. Active treatment of extremely premature infants has, however, been shown to improve their survival rates. And the denial of such treatment, or discouragement of parents from seeking such treatment for their children, devalues the lives of these children and may violate Federal law.
(b) The Secretary shall, as appropriate and consistent with applicable law, ensure that Federal funding disbursed by the Department of Health and Human Services is expended in full compliance with EMTALA and section 504 of the Rehab Act, as interpreted consistent with the Born-Alive Infants Protection Act, as reflected in the policy set forth in section 2 of this order.
(i) The Secretary shall, as appropriate and to the fullest extent permitted by law, investigate complaints of violations of applicable Federal laws with respect to infants born alive, including infants who have an emergency medical condition in need of stabilizing treatment or infants with disabilities whose parents seek medical treatment for their infants. The Secretary shall also clarify, in an easily understandable format, the process by which parents and hospital staff may submit such complaints for investigation under applicable Federal laws.
(ii) The Secretary shall take all appropriate enforcement action against individuals and organizations found through investigation to have violated applicable Federal laws, up to and including terminating Federal funding for non-compliant programs and activities.
(c) The Secretary shall, as appropriate and consistent with applicable law, prioritize the allocation of Department of Health and Human Services discretionary grant funding and National Institutes of Health research dollars for programs and activities conducting research to develop treatments that may improve survival—especially survival without impairment—of infants born alive, including premature infants or infants with disabilities, who have an emergency medical condition in need of stabilizing treatment.
(d) The Secretary shall, as appropriate and consistent with applicable law, prioritize the allocation of Department of Health and Human Services discretionary grant funding to programs and activities, including hospitals, that provide training to medical personnel regarding the provision of life-saving medical treatment to all infants born alive, including premature infants or infants with disabilities, who have an emergency medical condition in need of stabilizing treatment.
(e) The Secretary shall, as necessary and consistent with applicable law, issue such regulations or guidance as may be necessary to implement this order.
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Donald J. Trump.
1 So in original. Probably should be followed by a comma.
§1395ee. Practicing Physicians Advisory Council; Council for Technology and Innovation
(a) Repealed. Pub. L. 111–148, title III, §3134(b)(2), Mar. 23, 2010, 124 Stat. 435
(b) Council for Technology and Innovation
(1) Establishment
The Secretary shall establish a Council for Technology and Innovation within the Centers for Medicare & Medicaid Services (in this section referred to as "CMS").
(2) Composition
The Council shall be composed of senior CMS staff and clinicians and shall be chaired by the Executive Coordinator for Technology and Innovation (appointed or designated under paragraph (4)).
(3) Duties
The Council shall coordinate the activities of coverage, coding, and payment processes under this subchapter with respect to new technologies and procedures, including new drug therapies, and shall coordinate the exchange of information on new technologies between CMS and other entities that make similar decisions.
(4) Executive Coordinator for Technology and Innovation
The Secretary shall appoint (or designate) a noncareer appointee (as defined in
(c) Physician-focused payment models
(1) Technical Advisory Committee
(A) Establishment
There is established an ad hoc committee to be known as the "Physician-Focused Payment Model Technical Advisory Committee" (referred to in this subsection as the "Committee").
(B) Membership
(i) Number and appointment
The Committee shall be composed of 11 members appointed by the Comptroller General of the United States.
(ii) Qualifications
The membership of the Committee shall include individuals with national recognition for their expertise in physician-focused payment models and related delivery of care. No more than 5 members of the Committee shall be providers of services or suppliers, or representatives of providers of services or suppliers.
(iii) Prohibition on Federal employment
A member of the Committee shall not be an employee of the Federal Government.
(iv) Ethics disclosure
The Comptroller General shall establish a system for public disclosure by members of the Committee of financial and other potential conflicts of interest relating to such members. Members of the Committee shall be treated as employees of Congress for purposes of applying subchapter I of
(v) Date of initial appointments
The initial appointments of members of the Committee shall be made by not later than 180 days after April 16, 2015.
(C) Term; vacancies
(i) Term
The terms of members of the Committee shall be for 3 years except that the Comptroller General shall designate staggered terms for the members first appointed.
(ii) Vacancies
Any member appointed to fill a vacancy occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member's term until a successor has taken office. A vacancy in the Committee shall be filled in the manner in which the original appointment was made.
(D) Duties
The Committee shall meet, as needed, to provide comments and recommendations to the Secretary, as described in paragraph (2)(C), on physician-focused payment models.
(E) Compensation of members
(i) In general
Except as provided in clause (ii), a member of the Committee shall serve without compensation.
(ii) Travel expenses
A member of the Committee shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for an employee of an agency under subchapter I of
(F) Operational and technical support
(i) In general
The Assistant Secretary for Planning and Evaluation shall provide technical and operational support for the Committee, which may be by use of a contractor. The Office of the Actuary of the Centers for Medicare & Medicaid Services shall provide to the Committee actuarial assistance as needed.
(ii) Funding
The Secretary shall provide for the transfer, from the Federal Supplementary Medical Insurance Trust Fund under
(G) Application
(2) Criteria and process for submission and review of physician-focused payment models
(A) Criteria for assessing physician-focused payment models
(i) Rulemaking
Not later than November 1, 2016, the Secretary shall, through notice and comment rulemaking, following a request for information, establish criteria for physician-focused payment models, including models for specialist physicians, that could be used by the Committee for making comments and recommendations pursuant to paragraph (1)(D).
(ii) MedPAC submission of comments
During the comment period for the proposed rule described in clause (i), the Medicare Payment Advisory Commission may submit comments to the Secretary on the proposed criteria under such clause.
(iii) Updating
The Secretary may update the criteria established under this subparagraph through rulemaking.
(B) Stakeholder submission of physician-focused payment models
On an ongoing basis, individuals and stakeholder entities may submit to the Committee proposals for physician-focused payment models that such individuals and entities believe meet the criteria described in subparagraph (A).
(C) Committee review of models submitted
The Committee, on a periodic basis—
(i) shall review models submitted under subparagraph (B);
(ii) may provide individuals and stakeholder entities who submitted such models with—
(I) initial feedback on such models regarding the extent to which such models meet the criteria described in subparagraph (A); and
(II) an explanation of the basis for the feedback provided under subclause (I); and
(iii) shall prepare comments and recommendations regarding whether such models meet the criteria described in subparagraph (A) and submit such comments and recommendations to the Secretary.
(D) Secretary review and response
The Secretary shall review the comments and recommendations submitted by the Committee under subparagraph (C) and post a detailed response to such comments and recommendations on the Internet website of the Centers for Medicare & Medicaid Services.
(3) Rule of construction
Nothing in this subsection shall be construed to impact the development or testing of models under this subchapter or subchapters XI, XIX, or XXI.
(Aug. 14, 1935, ch. 531, title XVIII, §1868, as added
Editorial Notes
Prior Provisions
A prior section 1395ee, act Aug. 14, 1935, ch. 531, title XVIII, §1868, as added July 30, 1965,
Amendments
2022—Subsec. (c)(1)(B)(iv).
Subsec. (c)(1)(G).
2018—Subsec. (c)(2)(C).
2015—Subsec. (c).
2010—Subsec. (a).
2003—
Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Termination of Advisory Councils
Advisory councils established after Jan. 5, 1973, to terminate not later than the expiration of the 2-year period beginning on the date of their establishment, unless, in the case of a council established by the President or an officer of the Federal Government, such council is renewed by appropriate action prior to the expiration of such 2-year period, or in the case of a council established by Congress, its duration is otherwise provided by law. See
§1395ff. Determinations; appeals
(a) Initial determinations
(1) Promulgations of regulations
The Secretary shall promulgate regulations and make initial determinations with respect to benefits under part A or part B in accordance with those regulations for the following:
(A) The initial determination of whether an individual is entitled to benefits under such parts.
(B) The initial determination of the amount of benefits available to the individual under such parts.
(C) Any other initial determination with respect to a claim for benefits under such parts, including an initial determination by the Secretary that payment may not be made, or may no longer be made, for an item or service under such parts, an initial determination made by a quality improvement organization under
(2) Deadlines for making initial determinations
(A) In general
Subject to subparagraph (B), in promulgating regulations under paragraph (1), initial determinations shall be concluded by not later than the 45-day period beginning on the date the fiscal intermediary or the carrier, as the case may be, receives a claim for benefits from an individual as described in paragraph (1). Notice of such determination shall be mailed to the individual filing the claim before the conclusion of such 45-day period.
(B) Clean claims
Subparagraph (A) shall not apply with respect to any claim that is subject to the requirements of
(3) Redeterminations
(A) In general
In promulgating regulations under paragraph (1) with respect to initial determinations, such regulations shall provide for a fiscal intermediary or a carrier to make a redetermination with respect to a claim for benefits that is denied in whole or in part.
(B) Limitations
(i) Appeal rights
No initial determination may be reconsidered or appealed under subsection (b) unless the fiscal intermediary or carrier has made a redetermination of that initial determination under this paragraph.
(ii) Decisionmaker
No redetermination may be made by any individual involved in the initial determination.
(C) Deadlines
(i) Filing for redetermination
A redetermination under subparagraph (A) shall be available only if notice is filed with the Secretary to request the redetermination by not later than the end of the 120-day period beginning on the date the individual receives notice of the initial determination under paragraph (2).
(ii) Concluding redeterminations
Redeterminations shall be concluded by not later than the 60-day period beginning on the date the fiscal intermediary or the carrier, as the case may be, receives a request for a redetermination. Notice of such determination shall be mailed to the individual filing the claim before the conclusion of such 60-day period.
(D) Construction
For purposes of the succeeding provisions of this section a redetermination under this paragraph shall be considered to be part of the initial determination.
(4) Requirements of notice of determinations
With respect to an initial determination insofar as it results in a denial of a claim for benefits—
(A) the written notice on the determination shall include—
(i) the reasons for the determination, including whether a local medical review policy or a local coverage determination was used;
(ii) the procedures for obtaining additional information concerning the determination, including the information described in subparagraph (B); and
(iii) notification of the right to seek a redetermination or otherwise appeal the determination and instructions on how to initiate such a redetermination under this section;
(B) such written notice shall be provided in printed form and written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both; and
(C) the individual provided such written notice may obtain, upon request, information on the specific provision of the policy, manual, or regulation used in making the redetermination.
(5) Requirements of notice of redeterminations
With respect to a redetermination insofar as it results in a denial of a claim for benefits—
(A) the written notice on the redetermination shall include—
(i) the specific reasons for the redetermination;
(ii) as appropriate, a summary of the clinical or scientific evidence used in making the redetermination;
(iii) a description of the procedures for obtaining additional information concerning the redetermination; and
(iv) notification of the right to appeal the redetermination and instructions on how to initiate such an appeal under this section;
(B) such written notice shall be provided in printed form and written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both; and
(C) the individual provided such written notice may obtain, upon request, information on the specific provision of the policy, manual, or regulation used in making the redetermination.
(b) Appeal rights
(1) In general
(A) Reconsideration of initial determination
Subject to subparagraph (D), any individual dissatisfied with any initial determination under subsection (a)(1) shall be entitled to reconsideration of the determination, and, subject to subparagraphs (D) and (E), a hearing thereon by the Secretary to the same extent as is provided in
(B) Representation by provider or supplier
(i) In general
(ii) Mandatory waiver of right to payment from beneficiary
Any person that furnishes services or items to an individual may not represent an individual under this section with respect to the issue described in
(iii) Prohibition on payment for representation
If a person furnishes services or items to an individual and represents the individual under this section, the person may not impose any financial liability on such individual in connection with such representation.
(iv) Requirements for representatives of a beneficiary
The provisions of
(C) Succession of rights in cases of assignment
The right of an individual to an appeal under this section with respect to an item or service may be assigned to the provider of services or supplier of the item or service upon the written consent of such individual using a standard form established by the Secretary for such an assignment.
(D) Time limits for filing appeals
(i) Reconsiderations
Reconsideration under subparagraph (A) shall be available only if the individual described in subparagraph (A) files notice with the Secretary to request reconsideration by not later than the end of the 180-day period beginning on the date the individual receives notice of the redetermination under subsection (a)(3), or within such additional time as the Secretary may allow.
(ii) Hearings conducted by the Secretary
The Secretary shall establish in regulations time limits for the filing of a request for a hearing by the Secretary in accordance with provisions in
(E) Amounts in controversy
(i) In general
A hearing (by the Secretary) shall not be available to an individual under this section if the amount in controversy is less than $100, and judicial review shall not be available to the individual if the amount in controversy is less than $1,000.
(ii) Aggregation of claims
In determining the amount in controversy, the Secretary, under regulations, shall allow two or more appeals to be aggregated if the appeals involve—
(I) the delivery of similar or related services to the same individual by one or more providers of services or suppliers, or
(II) common issues of law and fact arising from services furnished to two or more individuals by one or more providers of services or suppliers.
(iii) Adjustment of dollar amounts
For requests for hearings or judicial review made in a year after 2004, the dollar amounts specified in clause (i) shall be equal to such dollar amounts increased by the percentage increase in the medical care component of the consumer price index for all urban consumers (U.S. city average) for July 2003 to the July preceding the year involved. Any amount determined under the previous sentence that is not a multiple of $10 shall be rounded to the nearest multiple of $10.
(F) Expedited proceedings
(i) Expedited determination
In the case of an individual who has received notice from a provider of services that such provider plans—
(I) to terminate services provided to an individual and a physician certifies that failure to continue the provision of such services is likely to place the individual's health at significant risk, or
(II) to discharge the individual from the provider of services,
the individual may request, in writing or orally, an expedited determination or an expedited reconsideration of an initial determination made under subsection (a)(1), as the case may be, and the Secretary shall provide such expedited determination or expedited reconsideration.
(ii) Reference to expedited access to judicial review
For the provision relating to expedited access to judicial review, see paragraph (2).
(G) Reopening and revision of determinations
The Secretary may reopen or revise any initial determination or reconsidered determination described in this subsection under guidelines established by the Secretary in regulations.
(2) Expedited access to judicial review
(A) In general
The Secretary shall establish a process under which a provider of services or supplier that furnishes an item or service or an individual entitled to benefits under part A or enrolled under part B, or both, who has filed an appeal under paragraph (1) (other than an appeal filed under paragraph (1)(F)(i)) may obtain access to judicial review when a review entity (described in subparagraph (D)), on its own motion or at the request of the appellant, determines that the Departmental Appeals Board does not have the authority to decide the question of law or regulation relevant to the matters in controversy and that there is no material issue of fact in dispute. The appellant may make such request only once with respect to a question of law or regulation for a specific matter in dispute in a case of an appeal.
(B) Prompt determinations
If, after or coincident with appropriately filing a request for an administrative hearing, the appellant requests a determination by the appropriate review entity that the Departmental Appeals Board does not have the authority to decide the question of law or regulations relevant to the matters in controversy and that there is no material issue of fact in dispute, and if such request is accompanied by the documents and materials as the appropriate review entity shall require for purposes of making such determination, such review entity shall make a determination on the request in writing within 60 days after the date such review entity receives the request and such accompanying documents and materials. Such a determination by such review entity shall be considered a final decision and not subject to review by the Secretary.
(C) Access to judicial review
(i) In general
If the appropriate review entity—
(I) determines that there are no material issues of fact in dispute and that the only issues to be adjudicated are ones of law or regulation that the Departmental Appeals Board does not have authority to decide; or
(II) fails to make such determination within the period provided under subparagraph (B),
then the appellant may bring a civil action as described in this subparagraph.
(ii) Deadline for filing
Such action shall be filed, in the case described in—
(I) clause (i)(I), within 60 days of the date of the determination described in such clause; or
(II) clause (i)(II), within 60 days of the end of the period provided under subparagraph (B) for the determination.
(iii) Venue
Such action shall be brought in the district court of the United States for the judicial district in which the appellant is located (or, in the case of an action brought jointly by more than one applicant, the judicial district in which the greatest number of applicants are located) or in the District Court for the District of Columbia.
(iv) Interest on any amounts in controversy
Where a provider of services or supplier is granted judicial review pursuant to this paragraph, the amount in controversy (if any) shall be subject to annual interest beginning on the first day of the first month beginning after the 60-day period as determined pursuant to clause (ii) and equal to the rate of interest on obligations issued for purchase by the Federal Supplementary Medical Insurance Trust Fund for the month in which the civil action authorized under this paragraph is commenced, to be awarded by the reviewing court in favor of the prevailing party. No interest awarded pursuant to the preceding sentence shall be deemed income or cost for the purposes of determining reimbursement due providers of services or suppliers under this subchapter.
(D) Review entity defined
For purposes of this subsection, the term "review entity" means an entity of up to three reviewers who are administrative law judges or members of the Departmental Appeals Board selected for purposes of making determinations under this paragraph.
(3) Requiring full and early presentation of evidence by providers
A provider of services or supplier may not introduce evidence in any appeal under this section that was not presented at the reconsideration conducted by the qualified independent contractor under subsection (c), unless there is good cause which precluded the introduction of such evidence at or before that reconsideration.
(c) Conduct of reconsiderations by independent contractors
(1) In general
The Secretary shall enter into contracts with qualified independent contractors to conduct reconsiderations of initial determinations made under subparagraphs (B) and (C) of subsection (a)(1). Contracts shall be for an initial term of three years and shall be renewable on a triennial basis thereafter.
(2) Qualified independent contractor
For purposes of this subsection, the term "qualified independent contractor" means an entity or organization that is independent of any organization under contract with the Secretary that makes initial determinations under subsection (a)(1), and that meets the requirements established by the Secretary consistent with paragraph (3).
(3) Requirements
Any qualified independent contractor entering into a contract with the Secretary under this subsection shall meet all of the following requirements:
(A) In general
The qualified independent contractor shall perform such duties and functions and assume such responsibilities as may be required by the Secretary to carry out the provisions of this subsection, and shall have sufficient medical, legal, and other expertise (including knowledge of the program under this subchapter) and sufficient staffing to make reconsiderations under this subsection.
(B) Reconsiderations
(i) In general
The qualified independent contractor shall review initial determinations. Where an initial determination is made with respect to whether an item or service is reasonable and necessary for the diagnosis or treatment of illness or injury (under
(ii) Effect of national and local coverage determinations
(I) National coverage determinations
If the Secretary has made a national coverage determination pursuant to the requirements established under the third sentence of
(II) Local coverage determinations
If the Secretary has made a local coverage determination, such determination shall not be binding on the qualified independent contractor in making a decision with respect to a reconsideration under this section. Notwithstanding the previous sentence, the qualified independent contractor shall consider the local coverage determination in making such decision.
(III) Absence of national or local coverage determination
In the absence of such a national coverage determination or local coverage determination, the qualified independent contractor shall make a decision with respect to the reconsideration based on applicable information, including clinical experience and medical, technical, and scientific evidence.
(C) Deadlines for decisions
(i) Reconsiderations
Except as provided in clauses (iii) and (iv), the qualified independent contractor shall conduct and conclude a reconsideration under subparagraph (B), and mail the notice of the decision with respect to the reconsideration by not later than the end of the 60-day period beginning on the date a request for reconsideration has been timely filed.
(ii) Consequences of failure to meet deadline
In the case of a failure by the qualified independent contractor to mail the notice of the decision by the end of the period described in clause (i) or to provide notice by the end of the period described in clause (iii), as the case may be, the party requesting the reconsideration or appeal may request a hearing before the Secretary, notwithstanding any requirements for a reconsidered determination for purposes of the party's right to such hearing.
(iii) Expedited reconsiderations
The qualified independent contractor shall perform an expedited reconsideration under subsection (b)(1)(F) as follows:
(I) Deadline for decision
Notwithstanding
(II) Consultation with beneficiary
In such reconsideration, the qualified independent contractor shall solicit the views of the individual involved.
(III) Special rule for hospital discharges
A reconsideration of a discharge from a hospital shall be conducted under this clause in accordance with the provisions of paragraphs (2), (3), and (4) of
(iv) Extension
An individual requesting a reconsideration under this subparagraph may be granted such additional time as the individual specifies (not to exceed 14 days) for the qualified independent contractor to conclude the reconsideration. The individual may request such additional time orally or in writing.
(D) Qualifications for reviewers
The requirements of subsection (g) shall be met (relating to qualifications of reviewing professionals).
(E) Explanation of decision
Any decision with respect to a reconsideration of a qualified independent contractor shall be in writing, be written in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both, and shall include (to the extent appropriate) and shall include 1 a detailed explanation of the decision as well as a discussion of the pertinent facts and applicable regulations applied in making such decision, and 2 a notification of the right to appeal such determination and instructions on how to initiate such appeal under this section 3 and 3 in the case of a determination of whether an item or service is reasonable and necessary for the diagnosis or treatment of illness or injury (under
(F) Notice requirements
Whenever a qualified independent contractor makes a decision with respect to a reconsideration under this subsection, the qualified independent contractor shall promptly notify the entity responsible for the payment of claims under part A or part B of such decision.
(G) Dissemination of decisions on reconsiderations
Each qualified independent contractor shall make available all decisions with respect to reconsiderations of such qualified independent contractors to fiscal intermediaries (under
(H) Ensuring consistency in decisions
Each qualified independent contractor shall monitor its decisions with respect to reconsiderations to ensure the consistency of such decisions with respect to requests for reconsideration of similar or related matters.
(I) Data collection
(i) In general
Consistent with the requirements of clause (ii), a qualified independent contractor shall collect such information relevant to its functions, and keep and maintain such records in such form and manner as the Secretary may require to carry out the purposes of this section and shall permit access to and use of any such information and records as the Secretary may require for such purposes.
(ii) Type of data collected
Each qualified independent contractor shall keep accurate records of each decision made, consistent with standards established by the Secretary for such purpose. Such records shall be maintained in an electronic database in a manner that provides for identification of the following:
(I) Specific claims that give rise to appeals.
(II) Situations suggesting the need for increased education for providers of services, physicians, or suppliers.
(III) Situations suggesting the need for changes in national or local coverage determination.
(IV) Situations suggesting the need for changes in local coverage determinations.
(iii) Annual reporting
Each qualified independent contractor shall submit annually to the Secretary (or otherwise as the Secretary may request) records maintained under this paragraph for the previous year.
(J) Hearings by the Secretary
The qualified independent contractor shall (i) submit such information as is required for an appeal of a decision of the contractor, and (ii) participate in such hearings as required by the Secretary.
(K) Independence requirements
(i) In general
Subject to clause (ii), a qualified independent contractor shall not conduct any activities in a case unless the entity—
(I) is not a related party (as defined in subsection (g)(5));
(II) does not have a material familial, financial, or professional relationship with such a party in relation to such case; and
(III) does not otherwise have a conflict of interest with such a party.
(ii) Exception for reasonable compensation
Nothing in clause (i) shall be construed to prohibit receipt by a qualified independent contractor of compensation from the Secretary for the conduct of activities under this section if the compensation is provided consistent with clause (iii).
(iii) Limitations on entity compensation
Compensation provided by the Secretary to a qualified independent contractor in connection with reviews under this section shall not be contingent on any decision rendered by the contractor or by any reviewing professional.
(4) Number of qualified independent contractors
The Secretary shall enter into contracts with a sufficient number of qualified independent contractors (but not fewer than 4 such contractors) to conduct reconsiderations consistent with the timeframes applicable under this subsection.
(5) Limitation on qualified independent contractor liability
No qualified independent contractor having a contract with the Secretary under this subsection and no person who is employed by, or who has a fiduciary relationship with, any such qualified independent contractor or who furnishes professional services to such qualified independent contractor, shall be held by reason of the performance of any duty, function, or activity required or authorized pursuant to this subsection or to a valid contract entered into under this subsection, to have violated any criminal law, or to be civilly liable under any law of the United States or of any State (or political subdivision thereof) provided due care was exercised in the performance of such duty, function, or activity.
(d) Deadlines for hearings by the Secretary; notice
(1) Hearing by administrative law judge
(A) In general
Except as provided in subparagraph (B), an administrative law judge shall conduct and conclude a hearing on a decision of a qualified independent contractor under subsection (c) and render a decision on such hearing by not later than the end of the 90-day period beginning on the date a request for hearing has been timely filed.
(B) Waiver of deadline by party seeking hearing
The 90-day period under subparagraph (A) shall not apply in the case of a motion or stipulation by the party requesting the hearing to waive such period.
(2) Departmental Appeals Board review
(A) In general
The Departmental Appeals Board of the Department of Health and Human Services shall conduct and conclude a review of the decision on a hearing described in paragraph (1) and make a decision or remand the case to the administrative law judge for reconsideration by not later than the end of the 90-day period beginning on the date a request for review has been timely filed.
(B) DAB hearing procedure
In reviewing a decision on a hearing under this paragraph, the Departmental Appeals Board shall review the case de novo.
(3) Consequences of failure to meet deadlines
(A) Hearing by administrative law judge
In the case of a failure by an administrative law judge to render a decision by the end of the period described in paragraph (1), the party requesting the hearing may request a review by the Departmental Appeals Board of the Department of Health and Human Services, notwithstanding any requirements for a hearing for purposes of the party's right to such a review.
(B) Departmental Appeals Board review
In the case of a failure by the Departmental Appeals Board to render a decision by the end of the period described in paragraph (2), the party requesting the hearing may seek judicial review, notwithstanding any requirements for a hearing for purposes of the party's right to such judicial review.
(4) Notice
Notice of the decision of an administrative law judge shall be in writing in a manner calculated to be understood by the individual entitled to benefits under part A or enrolled under part B, or both, and shall include—
(A) the specific reasons for the determination (including, to the extent appropriate, a summary of the clinical or scientific evidence used in making the determination);
(B) the procedures for obtaining additional information concerning the decision; and
(C) notification of the right to appeal the decision and instructions on how to initiate such an appeal under this section.
(e) Administrative provisions
(1) Limitation on review of certain regulations
A regulation or instruction that relates to a method for determining the amount of payment under part B and that was initially issued before January 1, 1981, shall not be subject to judicial review.
(2) Outreach
The Secretary shall perform such outreach activities as are necessary to inform individuals entitled to benefits under this subchapter and providers of services and suppliers with respect to their rights of, and the process for, appeals made under this section. The Secretary shall use the toll-free telephone number maintained by the Secretary under
(3) Continuing education requirement for qualified independent contractors and administrative law judges
The Secretary shall provide to each qualified independent contractor, and, in consultation with the Commissioner of Social Security, to administrative law judges that decide appeals of reconsiderations of initial determinations or other decisions or determinations under this section, such continuing education with respect to coverage of items and services under this subchapter or policies of the Secretary with respect to part B of subchapter XI as is necessary for such qualified independent contractors and administrative law judges to make informed decisions with respect to appeals.
(4) Reports
(A) Annual report to Congress
The Secretary shall submit to Congress an annual report describing the number of appeals for the previous year, identifying issues that require administrative or legislative actions, and including any recommendations of the Secretary with respect to such actions. The Secretary shall include in such report an analysis of determinations by qualified independent contractors with respect to inconsistent decisions and an analysis of the causes of any such inconsistencies.
(B) Survey
Not less frequently than every 5 years, the Secretary shall conduct a survey of a valid sample of individuals entitled to benefits under this subchapter who have filed appeals of determinations under this section, providers of services, and suppliers to determine the satisfaction of such individuals or entities with the process for appeals of determinations provided for under this section and education and training provided by the Secretary with respect to that process. The Secretary shall submit to Congress a report describing the results of the survey, and shall include any recommendations for administrative or legislative actions that the Secretary determines appropriate.
(f) Review of coverage determinations
(1) National coverage determinations
(A) In general
Review of any national coverage determination shall be subject to the following limitations:
(i) Such a determination shall not be reviewed by any administrative law judge.
(ii) Such a determination shall not be held unlawful or set aside on the ground that a requirement of
(iii) Upon the filing of a complaint by an aggrieved party, such a determination shall be reviewed by the Departmental Appeals Board of the Department of Health and Human Services. In conducting such a review, the Departmental Appeals Board—
(I) shall review the record and shall permit discovery and the taking of evidence to evaluate the reasonableness of the determination, if the Board determines that the record is incomplete or lacks adequate information to support the validity of the determination;
(II) may, as appropriate, consult with appropriate scientific and clinical experts; and
(III) shall defer only to the reasonable findings of fact, reasonable interpretations of law, and reasonable applications of fact to law by the Secretary.
(iv) The Secretary shall implement a decision of the Departmental Appeals Board within 30 days of receipt of such decision.
(v) A decision of the Departmental Appeals Board constitutes a final agency action and is subject to judicial review.
(B) Definition of national coverage determination
For purposes of this section, the term "national coverage determination" means a determination by the Secretary with respect to whether or not a particular item or service is covered nationally under this subchapter, but does not include a determination of what code, if any, is assigned to a particular item or service covered under this subchapter or a determination with respect to the amount of payment made for a particular item or service so covered.
(2) Local coverage determination
(A) In general
Review of any local coverage determination shall be subject to the following limitations:
(i) Upon the filing of a complaint by an aggrieved party, such a determination shall be reviewed by an administrative law judge. The administrative law judge—
(I) shall review the record and shall permit discovery and the taking of evidence to evaluate the reasonableness of the determination, if the administrative law judge determines that the record is incomplete or lacks adequate information to support the validity of the determination;
(II) may, as appropriate, consult with appropriate scientific and clinical experts; and
(III) shall defer only to the reasonable findings of fact, reasonable interpretations of law, and reasonable applications of fact to law by the Secretary.
(ii) Upon the filing of a complaint by an aggrieved party, a decision of an administrative law judge under clause (i) shall be reviewed by the Departmental Appeals Board of the Department of Health and Human Services.
(iii) The Secretary shall implement a decision of the administrative law judge or the Departmental Appeals Board within 30 days of receipt of such decision.
(iv) A decision of the Departmental Appeals Board constitutes a final agency action and is subject to judicial review.
(B) Definition of local coverage determination
For purposes of this section, the term "local coverage determination" means a determination by a fiscal intermediary or a carrier under part A or part B, as applicable, respecting whether or not a particular item or service is covered on an intermediary- or carrier-wide basis under such parts, in accordance with
(C) Local coverage determinations for clinical diagnostic laboratory tests
For provisions relating to local coverage determinations for clinical diagnostic laboratory tests, see
(3) No material issues of fact in dispute
In the case of a determination that may otherwise be subject to review under paragraph (1)(A)(iii) or paragraph (2)(A)(i), where the moving party alleges that—
(A) there are no material issues of fact in dispute, and
(B) the only issue of law is the constitutionality of a provision of this subchapter, or that a regulation, determination, or ruling by the Secretary is invalid,
the moving party may seek review by a court of competent jurisdiction without filing a complaint under such paragraph and without otherwise exhausting other administrative remedies.
(4) Pending national coverage determinations
(A) In general
In the event the Secretary has not issued a national coverage or noncoverage determination with respect to a particular type or class of items or services, an aggrieved person (as described in paragraph (5)) may submit to the Secretary a request to make such a determination with respect to such items or services. By not later than the end of the 90-day period beginning on the date the Secretary receives such a request (notwithstanding the receipt by the Secretary of new evidence (if any) during such 90-day period), the Secretary shall take one of the following actions:
(i) Issue a national coverage determination, with or without limitations.
(ii) Issue a national noncoverage determination.
(iii) Issue a determination that no national coverage or noncoverage determination is appropriate as of the end of such 90-day period with respect to national coverage of such items or services.
(iv) Issue a notice that states that the Secretary has not completed a review of the request for a national coverage determination and that includes an identification of the remaining steps in the Secretary's review process and a deadline by which the Secretary will complete the review and take an action described in clause (i), (ii), or (iii).
(B) Deemed action by the Secretary
In the case of an action described in subparagraph (A)(iv), if the Secretary fails to take an action referred to in such clause by the deadline specified by the Secretary under such clause, then the Secretary is deemed to have taken an action described in subparagraph (A)(iii) as of the deadline.
(C) Explanation of determination
When issuing a determination under subparagraph (A), the Secretary shall include an explanation of the basis for the determination. An action taken under subparagraph (A) (other than clause (iv)) is deemed to be a national coverage determination for purposes of review under paragraph (1)(A).
(5) Standing
An action under this subsection seeking review of a national coverage determination or local coverage determination may be initiated only by individuals entitled to benefits under part A, or enrolled under part B, or both, who are in need of the items or services that are the subject of the coverage determination.
(6) Publication on the Internet of decisions of hearings of the Secretary
Each decision of a hearing by the Secretary with respect to a national coverage determination shall be made public, and the Secretary shall publish each decision on the Medicare 4 Internet site of the Department of Health and Human Services. The Secretary shall remove from such decision any information that would identify any individual, provider of services, or supplier.
(7) Annual report on national coverage determinations
(A) In general
Not later than December 1 of each year, beginning in 2001, the Secretary shall submit to Congress a report that sets forth a detailed compilation of the actual time periods that were necessary to complete and fully implement national coverage determinations that were made in the previous fiscal year for items, services, or medical devices not previously covered as a benefit under this subchapter, including, with respect to each new item, service, or medical device, a statement of the time taken by the Secretary to make and implement the necessary coverage, coding, and payment determinations, including the time taken to complete each significant step in the process of making and implementing such determinations.
(B) Publication of reports on the Internet
The Secretary shall publish each report submitted under clause (i) on the medicare Internet site of the Department of Health and Human Services.
(8) Construction
Nothing in this subsection shall be construed as permitting administrative or judicial review pursuant to this section insofar as such review is explicitly prohibited or restricted under another provision of law.
(g) Qualifications of reviewers
(1) In general
In reviewing determinations under this section, a qualified independent contractor shall assure that—
(A) each individual conducting a review shall meet the qualifications of paragraph (2);
(B) compensation provided by the contractor to each such reviewer is consistent with paragraph (3); and
(C) in the case of a review by a panel described in subsection (c)(3)(B) composed of physicians or other health care professionals (each in this subsection referred to as a "reviewing professional"), a reviewing professional meets the qualifications described in paragraph (4) and, where a claim is regarding the furnishing of treatment by a physician (allopathic or osteopathic) or the provision of items or services by a physician (allopathic or osteopathic), a reviewing professional shall be a physician (allopathic or osteopathic).
(2) Independence
(A) In general
Subject to subparagraph (B), each individual conducting a review in a case shall—
(i) not be a related party (as defined in paragraph (5));
(ii) not have a material familial, financial, or professional relationship with such a party in the case under review; and
(iii) not otherwise have a conflict of interest with such a party.
(B) Exception
Nothing in subparagraph (A) shall be construed to—
(i) prohibit an individual, solely on the basis of a participation agreement with a fiscal intermediary, carrier, or other contractor, from serving as a reviewing professional if—
(I) the individual is not involved in the provision of items or services in the case under review;
(II) the fact of such an agreement is disclosed to the Secretary and the individual entitled to benefits under part A or enrolled under part B, or both, or such individual's authorized representative, and neither party objects; and
(III) the individual is not an employee of the intermediary, carrier, or contractor and does not provide services exclusively or primarily to or on behalf of such intermediary, carrier, or contractor;
(ii) prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as a reviewer merely on the basis of having such staff privileges if the existence of such privileges is disclosed to the Secretary and such individual (or authorized representative), and neither party objects; or
(iii) prohibit receipt of compensation by a reviewing professional from a contractor if the compensation is provided consistent with paragraph (3).
For purposes of this paragraph, the term "participation agreement" means an agreement relating to the provision of health care services by the individual and does not include the provision of services as a reviewer under this subsection.
(3) Limitations on reviewer compensation
Compensation provided by a qualified independent contractor to a reviewer in connection with a review under this section shall not be contingent on the decision rendered by the reviewer.
(4) Licensure and expertise
Each reviewing professional shall be—
(A) a physician (allopathic or osteopathic) who is appropriately credentialed or licensed in one or more States to deliver health care services and has medical expertise in the field of practice that is appropriate for the items or services at issue; or
(B) a health care professional who is legally authorized in one or more States (in accordance with State law or the State regulatory mechanism provided by State law) to furnish the health care items or services at issue and has medical expertise in the field of practice that is appropriate for such items or services.
(5) Related party defined
For purposes of this section, the term "related party" means, with respect to a case under this subchapter involving a specific individual entitled to benefits under part A or enrolled under part B, or both, any of the following:
(A) The Secretary, the medicare administrative contractor involved, or any fiduciary, officer, director, or employee of the Department of Health and Human Services, or of such contractor.
(B) The individual (or authorized representative).
(C) The health care professional that provides the items or services involved in the case.
(D) The institution at which the items or services (or treatment) involved in the case are provided.
(E) The manufacturer of any drug or other item that is included in the items or services involved in the case.
(F) Any other party determined under any regulations to have a substantial interest in the case involved.
(h) Prior determination process for certain items and services
(1) Establishment of process
(A) In general
With respect to a medicare administrative contractor that has a contract under
(B) Eligible requester
For purposes of this subsection, each of the following shall be an eligible requester:
(i) A participating physician, but only with respect to physicians' services to be furnished to an individual who is entitled to benefits under this subchapter and who has consented to the physician making the request under this subsection for those physicians' services.
(ii) An individual entitled to benefits under this subchapter, but only with respect to a physicians' service for which the individual receives, from a physician, an advance beneficiary notice under
(2) Secretarial flexibility
The Secretary shall establish by regulation reasonable limits on the physicians' services for which a prior determination of coverage may be requested under this subsection. In establishing such limits, the Secretary may consider the dollar amount involved with respect to the physicians' service, administrative costs and burdens, and other relevant factors.
(3) Request for prior determination
(A) In general
Subject to paragraph (2), under the process established under this subsection an eligible requester may submit to the contractor a request for a determination, before the furnishing of a physicians' service, as to whether the physicians' service is covered under this subchapter consistent with the applicable requirements of
(B) Accompanying documentation
The Secretary may require that the request be accompanied by a description of the physicians' service, supporting documentation relating to the medical necessity for the physicians' service, and any other appropriate documentation. In the case of a request submitted by an eligible requester who is described in paragraph (1)(B)(ii), the Secretary may require that the request also be accompanied by a copy of the advance beneficiary notice involved.
(4) Response to request
(A) In general
Under such process, the contractor shall provide the eligible requester with written notice of a determination as to whether—
(i) the physicians' service is so covered;
(ii) the physicians' service is not so covered; or
(iii) the contractor lacks sufficient information to make a coverage determination with respect to the physicians' service.
(B) Contents of notice for certain determinations
(i) Noncoverage
If the contractor makes the determination described in subparagraph (A)(ii), the contractor shall include in the notice a brief explanation of the basis for the determination, including on what national or local coverage or noncoverage determination (if any) the determination is based, and a description of any applicable rights under subsection (a).
(ii) Insufficient information
If the contractor makes the determination described in subparagraph (A)(iii), the contractor shall include in the notice a description of the additional information required to make the coverage determination.
(C) Deadline to respond
Such notice shall be provided within the same time period as the time period applicable to the contractor providing notice of initial determinations on a claim for benefits under subsection (a)(2)(A).
(D) Informing beneficiary in case of physician request
In the case of a request by a participating physician under paragraph (1)(B)(i), the process shall provide that the individual to whom the physicians' service is proposed to be furnished shall be informed of any determination described in subparagraph (A)(ii) (relating to a determination of non-coverage) and the right (referred to in paragraph (6)(B)) to obtain the physicians' service and have a claim submitted for the physicians' service.
(5) Binding nature of positive determination
If the contractor makes the determination described in paragraph (4)(A)(i), such determination shall be binding on the contractor in the absence of fraud or evidence of misrepresentation of facts presented to the contractor.
(6) Limitation on further review
(A) In general
Contractor determinations described in paragraph (4)(A)(ii) or (4)(A)(iii) (relating to pre-service claims) are not subject to further administrative appeal or judicial review under this section or otherwise.
(B) Decision not to seek prior determination or negative determination does not impact right to obtain services, seek reimbursement, or appeal rights
Nothing in this subsection shall be construed as affecting the right of an individual who—
(i) decides not to seek a prior determination under this subsection with respect to physicians' services; or
(ii) seeks such a determination and has received a determination described in paragraph (4)(A)(ii),
from receiving (and submitting a claim for) such physicians' services and from obtaining administrative or judicial review respecting such claim under the other applicable provisions of this section. Failure to seek a prior determination under this subsection with respect to physicians' service shall not be taken into account in such administrative or judicial review.
(C) No prior determination after receipt of services
Once an individual is provided physicians' services, there shall be no prior determination under this subsection with respect to such physicians' services.
(i) Mediation process for local coverage determinations
(1) Establishment of process
The Secretary shall establish a mediation process under this subsection through the use of a physician trained in mediation and employed by the Centers for Medicare & Medicaid Services.
(2) Responsibility of mediator
Under the process established in paragraph (1), such a mediator shall mediate in disputes between groups representing providers of services, suppliers (as defined in
(Aug. 14, 1935, ch. 531, title XVIII, §1869, as added
Editorial Notes
Amendments
2014—Subsec. (f)(2)(C).
2011—Subsec. (a)(1)(C).
Subsec. (c)(3)(G).
2003—Subsec. (a)(3)(C)(ii).
Subsec. (a)(4), (5).
Subsec. (b)(1)(A).
Subsec. (b)(1)(E)(iii).
Subsec. (b)(1)(F)(ii).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (c)(3)(A).
Subsec. (c)(3)(B)(i).
Subsec. (c)(3)(C)(i).
Subsec. (c)(3)(D).
Subsec. (c)(3)(E).
Subsec. (c)(3)(I)(ii)(III).
Subsec. (c)(3)(I)(ii)(IV).
Subsec. (c)(3)(J)(i).
Subsec. (c)(3)(K).
Subsec. (c)(4).
Subsec. (d).
Subsec. (d)(4).
Subsec. (f)(2)(A)(i).
Subsec. (f)(4)(A)(iv).
Subsec. (f)(4)(B).
Subsec. (f)(4)(C).
Subsec. (g).
Subsec. (h).
Subsec. (i).
2000—
Subsec. (f).
1997—Subsec. (b)(2)(B).
1994—Subsec. (b)(1).
1987—Subsec. (a).
Subsec. (b)(2).
Subsec. (b)(3)(B).
Subsec. (b)(5).
Subsec. (c).
1986—Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(1)(C).
Subsec. (b)(1)(D).
Subsec. (b)(2).
Subsec. (b)(3), (4).
1984—Subsec. (b)(1)(B).
1972—Subsec. (b).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2003 Amendment
Amendment by section 932(a) of
"(1)
"(2)
"(3)
"(4)
Amendment by section 948(b)(1), (c) of
Effective Date of 2000 Amendment
Amendment by section §1(a)(6) [title V, §521(a)] of
Amendment by section 1(a)(6) [title V, §522(a)] of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1987 Amendment
"(1) The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [Dec. 22, 1987].
"(2) The amendment made by subsection (b) [amending this section] shall apply to requests for hearings filed after the end of the 60-day period beginning on the date of the enactment of this Act."
Amendment by
Effective Date of 1986 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1972 Amendment
"(1) The provisions of subparagraphs (A) and (B) of section 1869(b)(1) of the Social Security Act [
"(2) The provisions of paragraph (2) and subparagraph (C) of paragraph (1) of section 1869(b) of the Social Security Act [
"(A) in or after the month in which this Act is enacted [Oct. 1972], or
"(B) before the month in which this Act is enacted [Oct. 1972], but only if a civil action with respect to a final decision of the Secretary of Health, Education, and Welfare on such claim has not been commenced under such section 1869(b) [
Transfer of Responsibility for Medicare Appeals
"(a)
"(1)
"(2)
"(A)
"(B)
"(C)
"(D)
"(E)
"(F)
"(G)
"(i) filing appeals with administrative law judges electronically; and
"(ii) conducting hearings using tele- or video-conference technologies.
"(H)
"(I)
"(J)
"(K)
"(L)
"(M)
"(3)
"(4) GAO
"(b)
"(1)
"(2)
"(3)
"(4)
"(5)
"(6)
"(c)
"(1) increase the number of administrative law judges (and their staffs) under subsection (b)(4);
"(2) improve education and training opportunities for administrative law judges (and their staffs); and
"(3) increase the staff of the Departmental Appeals Board."
Transition
Process for Correction of Minor Errors and Omissions Without Pursuing Appeals Process
"(a)
"(b)
Study of Aggregation Rule for Claims for Similar Physicians' Services
Medicare Hearings and Appeals
"(a)
"(b)
"(1) The Secretary of Health and Human Services and the Comptroller General of the United States shall each conduct a study on holding hearings under section 1869(b)(1) of the Social Security Act [
"(2) The studies under paragraph (1) shall focus on whether telephone hearings allow for a full and fair evidentiary hearing, in general, or with respect to any particular category of claims and shall examine the possible improvements to the hearing process (such as cost-effectiveness, convenience to the claimant, and reduction in time under the process) resulting from the use of such hearings as compared to the adoption of other changes to the process (such as expansions in staff and resources)."
2 So in original. The word "and" probably should not appear.
3 So in original. A comma probably should appear.
4 So in original. Probably should not be capitalized.
§1395gg. Overpayment on behalf of individuals and settlement of claims for benefits on behalf of deceased individuals
(a) Payments to providers of services or other person regarded as payment to individuals
Any payment under this subchapter to any provider of services or other person with respect to any items or services furnished any individual shall be regarded as a payment to such individual.
(b) Incorrect payments on behalf of individuals; payment adjustment
Where—
(1) more than the correct amount is paid under this subchapter to a provider of services or other person for items or services furnished an individual and the Secretary determines (A) that, within such period as he may specify, the excess over the correct amount cannot be recouped from such provider of services or other person, or (B) that such provider of services or other person was without fault with respect to the payment of such excess over the correct amount, or
(2) any payment has been made under
proper adjustments shall be made, under regulations prescribed (after consultation with the Railroad Retirement Board) by the Secretary, by decreasing subsequent payments—
(3) to which such individual is entitled under subchapter II of this chapter or under the Railroad Retirement Act of 1974 [
(4) if such individual dies before such adjustment has been completed, to which any other individual is entitled under subchapter II of this chapter or under the Railroad Retirement Act of 1974 [
As soon as practicable after any adjustment under paragraph (3) or (4) is determined to be necessary, the Secretary, for purposes of this section,
(c) Exception to subsection (b) payment adjustment
There shall be no adjustment as provided in subsection (b) (nor shall there be recovery) in any case where the incorrect payment has been made (including payments under
(d) Liability of certifying or disbursing officer for failure to recoup
No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any provider of services or other person where the adjustment or recovery of such amount is waived under subsection (c) or where adjustment under subsection (b) is not completed prior to the death of all persons against whose benefits such adjustment is authorized.
(e) Settlement of claims for benefits under this subchapter on behalf of deceased individuals
If an individual, who received services for which payment may be made to such individual under this subchapter, dies, and payment for such services was made (other than under this subchapter), and the individual died before any payment due him under this subchapter with respect to such services was completed, payment of the amount due (including the amount of any unnegotiated checks) shall be made—
(1) if the payment for such services was made (before or after such individual's death) by a person other than the deceased individual, to the person or persons determined by the Secretary under regulations to have paid for such services, or if the payment for such services was made by the deceased individual before his death, to the legal representative of the estate of such deceased individual, if any;
(2) if there is no person who meets the requirements of paragraph (1), to the person, if any, who is determined by the Secretary to be the surviving spouse of the deceased individual and who was either living in the same household with the deceased at the time of his death or was, for the month in which the deceased individual died, entitled to a monthly benefit on the basis of the same wages and self-employment income as was the deceased individual;
(3) if there is no person who meets the requirements of paragraph (1) or (2), or if the person who meets such requirements dies before the payment due him under this subchapter is completed, to the child or children, if any, of the deceased individual who were, for the month in which the deceased individual died, entitled to monthly benefits on the basis of the same wages and self-employment income as was the deceased individual (and, in case there is more than one such child, in equal parts to each such child);
(4) if there is no person who meets the requirements of paragraph (1), (2), or (3), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the parent or parents, if any, of the deceased individual who were, for the month in which the deceased individual died, entitled to monthly benefits on the basis of the same wages and self-employment income as was the deceased individual (and, in case there is more than one such parent, in equal parts to each such parent);
(5) if there is no person who meets the requirements of paragraph (1), (2), (3), or (4), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the person, if any, determined by the Secretary to be the surviving spouse of the deceased individual;
(6) if there is no person who meets the requirements of paragraph (1), (2), (3), (4), or (5), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the person or persons, if any, determined by the Secretary to be the child or children of the deceased individual (and, in case there is more than one such child, in equal parts to each such child);
(7) if there is no person who meets the requirements of paragraph (1), (2), (3), (4), (5), or (6), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the parent or parents, if any, of the deceased individual (and, in case there is more than one such parent, in equal parts to each such parent); or
(8) if there is no person who meets the requirements of paragraph (1), (2), (3), (4), (5), (6), or (7), or if each person who meets such requirements dies before the payment due him under this subchapter is completed, to the legal representatives of the estate of the deceased individual, if any.
(f) Settlement of claims for section 1395k benefits on behalf of deceased individuals
If an individual who received medical and other health services for which payment may be made under
(1) if the person or persons who furnished the services agree to the terms of assignment specified in
(2) if the person or persons who furnished the services do not agree to the terms of assignment specified in
but only in such amount and subject to such conditions as would be applicable if the individual who received the services had not died.
(g) Refund of premiums for deceased individuals
If an individual, who is enrolled under
(h) Appeals by providers of services or suppliers
Notwithstanding subsection (f) or any other provision of law, the Secretary shall permit a provider of services or supplier to appeal any determination of the Secretary under this subchapter relating to services rendered under this subchapter to an individual who subsequently dies if there is no other party available to appeal such determination.
(Aug. 14, 1935, ch. 531, title XVIII, §1870, as added
Editorial Notes
References in Text
The Railroad Retirement Act of 1974, referred to in subsec. (b), is act Aug. 29, 1935, ch. 812, as amended generally by
Amendments
2013—Subsecs. (b), (c).
2003—Subsec. (h).
1988—
Subsec. (f)(1), (2).
1987—
Subsec. (f)(1), (2).
1982—Subsec. (c).
1980—Subsec. (f).
1974—Subsec. (b).
1972—Subsec. (b).
Subsec. (c).
Subsec. (g).
1968—
Subsecs. (e), (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2013 Amendment
Effective Date of 2003 Amendment
Effective Date of 1988 Amendment
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4096(a)(2) of
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendment
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1972 Amendment
Waiver of Liability Limiting Recoupment in Certain Cases
§1395hh. Regulations
(a) Authority to prescribe regulations; ineffectiveness of substantive rules not promulgated by regulation
(1) The Secretary shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs under this subchapter. When used in this subchapter, the term "regulations" means, unless the context otherwise requires, regulations prescribed by the Secretary.
(2) No rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals, entities, or organizations to furnish or receive services or benefits under this subchapter shall take effect unless it is promulgated by the Secretary by regulation under paragraph (1).
(3)(A) The Secretary, in consultation with the Director of the Office of Management and Budget, shall establish and publish a regular timeline for the publication of final regulations based on the previous publication of a proposed regulation or an interim final regulation.
(B) Such timeline may vary among different regulations based on differences in the complexity of the regulation, the number and scope of comments received, and other relevant factors, but shall not be longer than 3 years except under exceptional circumstances. If the Secretary intends to vary such timeline with respect to the publication of a final regulation, the Secretary shall cause to have published in the Federal Register notice of the different timeline by not later than the timeline previously established with respect to such regulation. Such notice shall include a brief explanation of the justification for such variation.
(C) In the case of interim final regulations, upon the expiration of the regular timeline established under this paragraph for the publication of a final regulation after opportunity for public comment, the interim final regulation shall not continue in effect unless the Secretary publishes (at the end of the regular timeline and, if applicable, at the end of each succeeding 1-year period) a notice of continuation of the regulation that includes an explanation of why the regular timeline (and any subsequent 1-year extension) was not complied with. If such a notice is published, the regular timeline (or such timeline as previously extended under this paragraph) for publication of the final regulation shall be treated as having been extended for 1 additional year.
(D) The Secretary shall annually submit to Congress a report that describes the instances in which the Secretary failed to publish a final regulation within the applicable regular timeline under this paragraph and that provides an explanation for such failures.
(4) If the Secretary publishes a final regulation that includes a provision that is not a logical outgrowth of a previously published notice of proposed rulemaking or interim final rule, such provision shall be treated as a proposed regulation and shall not take effect until there is the further opportunity for public comment and a publication of the provision again as a final regulation.
(b) Notice of proposed regulations; public comment
(1) Except as provided in paragraph (2), before issuing in final form any regulation under subsection (a), the Secretary shall provide for notice of the proposed regulation in the Federal Register and a period of not less than 60 days for public comment thereon.
(2) Paragraph (1) shall not apply where—
(A) a statute specifically permits a regulation to be issued in interim final form or otherwise with a shorter period for public comment,
(B) a statute establishes a specific deadline for the implementation of a provision and the deadline is less than 150 days after the date of the enactment of the statute in which the deadline is contained, or
(C) subsection (b) of
(c) Publication of certain rules; public inspection; changes in data collection and retrieval
(1) The Secretary shall publish in the Federal Register, not less frequently than every 3 months, a list of all manual instructions, interpretative rules, statements of policy, and guidelines of general applicability which—
(A) are promulgated to carry out this subchapter, but
(B) are not published pursuant to subsection (a)(1) and have not been previously published in a list under this subsection.
(2) Effective June 1, 1988, each fiscal intermediary and carrier administering claims for extended care, post-hospital extended care, home health care, and durable medical equipment benefits under this subchapter shall make available to the public all interpretative materials, guidelines, and clarifications of policies which relate to payments for such benefits.
(3) The Secretary shall to the extent feasible make such changes in automated data collection and retrieval by the Secretary and fiscal intermediaries with agreements under
(e) 1 Retroactivity of substantive changes; reliance upon written guidance
(1)(A) A substantive change in regulations, manual instructions, interpretative rules, statements of policy, or guidelines of general applicability under this subchapter shall not be applied (by extrapolation or otherwise) retroactively to items and services furnished before the effective date of the change, unless the Secretary determines that—
(i) such retroactive application is necessary to comply with statutory requirements; or
(ii) failure to apply the change retroactively would be contrary to the public interest.
(B)(i) Except as provided in clause (ii), a substantive change referred to in subparagraph (A) shall not become effective before the end of the 30-day period that begins on the date that the Secretary has issued or published, as the case may be, the substantive change.
(ii) The Secretary may provide for such a substantive change to take effect on a date that precedes the end of the 30-day period under clause (i) if the Secretary finds that waiver of such 30-day period is necessary to comply with statutory requirements or that the application of such 30-day period is contrary to the public interest. If the Secretary provides for an earlier effective date pursuant to this clause, the Secretary shall include in the issuance or publication of the substantive change a finding described in the first sentence, and a brief statement of the reasons for such finding.
(C) No action shall be taken against a provider of services or supplier with respect to noncompliance with such a substantive change for items and services furnished before the effective date of such a change.
(2)(A) If—
(i) a provider of services or supplier follows the written guidance (which may be transmitted electronically) provided by the Secretary or by a medicare contractor (as defined in
(ii) the Secretary determines that the provider of services or supplier has accurately presented the circumstances relating to such items, services, and claim to the contractor in writing; and
(iii) the guidance was in error;
the provider of services or supplier shall not be subject to any penalty or interest under this subchapter or the provisions of subchapter XI insofar as they relate to this subchapter (including interest under a repayment plan under
(B) Subparagraph (A) shall not be construed as preventing the recoupment or repayment (without any additional penalty) relating to an overpayment insofar as the overpayment was solely the result of a clerical or technical operational error.
(f) Report on areas of inconsistency or conflict
(1) Not later than 2 years after December 8, 2003, and every 3 years thereafter, the Secretary shall submit to Congress a report with respect to the administration of this subchapter and areas of inconsistency or conflict among the various provisions under law and regulation.
(2) In preparing a report under paragraph (1), the Secretary shall collect—
(A) information from individuals entitled to benefits under part A or enrolled under part B, or both, providers of services, and suppliers and from the Medicare Beneficiary Ombudsman with respect to such areas of inconsistency and conflict; and
(B) information from medicare contractors that tracks the nature of written and telephone inquiries.
(3) A report under paragraph (1) shall include a description of efforts by the Secretary to reduce such inconsistency or conflicts, and recommendations for legislation or administrative action that the Secretary determines appropriate to further reduce such inconsistency or conflicts.
(Aug. 14, 1935, ch. 531, title XVIII, §1871, as added
Editorial Notes
Amendments
2003—Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (e).
Subsec. (e)(1)(B), (C).
Subsec. (e)(2).
Subsec. (f).
1987—Subsec. (a).
Subsec. (c).
1986—
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Regulations
Section 4039(g) of title IV of
Requiring the Posting and Periodic Update of Opioid Prescribing Guidance for Medicare Beneficiaries
"(a)
"(b)
"(1)
"(2)
"(A) Medical professional organizations.
"(B) Providers and suppliers of services (as such terms are defined in section 1861 of the Social Security Act (
"(C) Health care consumers or groups representing such consumers.
"(D) Other entities determined appropriate by the Secretary."
GAO Study on Advisory Opinion Authority
"(1)
"(2)
1 So in original. No subsec. (d) has been enacted.
§1395ii. Application of certain provisions of subchapter II
The provisions of
(Aug. 14, 1935, ch. 531, title XVIII, §1872, as added
Editorial Notes
Amendments
1994—
1984—
1972—
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by
§1395jj. Designation of organization or publication by name
Designation in this subchapter, by name, of any nongovernmental organization or publication shall not be affected by change of name of such organization or publication, and shall apply to any successor organization or publication which the Secretary finds serves the purpose for which such designation is made.
(Aug. 14, 1935, ch. 531, title XVIII, §1873, as added
§1395kk. Administration of insurance programs
(a) Functions of Secretary; performance directly or by contract
Except as otherwise provided in this subchapter and in the Railroad Retirement Act of 1974 [
(b) Contracts to secure special data, actuarial information, etc.
The Secretary may contract with any person, agency, or institution to secure on a reimbursable basis such special data, actuarial information, and other information as may be necessary in the carrying out of his functions under this subchapter.
(c) Oaths and affirmations
In the course of any hearing, investigation, or other proceeding that he is authorized to conduct under this subchapter, the Secretary may administer oaths and affirmations.
(d) Inclusion of Medicare provider and supplier payments in Federal Payment Levy Program
(1) In general
The Centers for Medicare & Medicaid Services shall take all necessary steps to participate in the Federal Payment Levy Program under section 6331(h) of the Internal Revenue Code of 1986 as soon as possible and shall ensure that—
(A) at least 50 percent of all payments under parts A and B are processed through such program beginning within 1 year after July 15, 2008; 1
(B) at least 75 percent of all payments under parts A and B are processed through such program beginning within 2 years after July 15, 2008; and
(C) all payments under parts A and B are processed through such program beginning not later than September 30, 2011.
(2) Assistance
The Financial Management Service and the Internal Revenue Service shall provide assistance to the Centers for Medicare & Medicaid Services to ensure that all payments described in paragraph (1) are included in the Federal Payment Levy Program by the deadlines specified in that subsection.
(e) Availability of data
(1) In general
Subject to paragraph (4), the Secretary shall make available to qualified entities (as defined in paragraph (2)) data described in paragraph (3) for the evaluation of the performance of providers of services and suppliers.
(2) Qualified entities
For purposes of this subsection, the term "qualified entity" means a public or private entity that—
(A) is qualified (as determined by the Secretary) to use claims data to evaluate the performance of providers of services and suppliers on measures of quality, efficiency, effectiveness, and resource use; and
(B) agrees to meet the requirements described in paragraph (4) and meets such other requirements as the Secretary may specify, such as ensuring security of data.
(3) Data described
The data described in this paragraph are standardized extracts (as determined by the Secretary) of claims data under parts A, B, and D for items and services furnished under such parts for one or more specified geographic areas and time periods requested by a qualified entity. Beginning July 1, 2016, if the Secretary determines appropriate, the data described in this paragraph may also include standardized extracts (as determined by the Secretary) of claims data under subchapters XIX and XXI for assistance provided under such subchapters for one or more specified geographic areas and time periods requested by a qualified entity. The Secretary shall take such actions as the Secretary deems necessary to protect the identity of individuals entitled to or enrolled for benefits under such parts or under subchapters 2 XIX or XXI.
(4) Requirements
(A) Fee
Data described in paragraph (3) shall be made available to a qualified entity under this subsection at a fee equal to the cost of making such data available. Any fee collected pursuant to the preceding sentence shall be deposited, for periods prior to July 1, 2016, into the Federal Supplementary Medical Insurance Trust Fund under
(B) Specification of uses and methodologies
A qualified entity requesting data under this subsection shall—
(i) submit to the Secretary a description of the methodologies that such qualified entity will use to evaluate the performance of providers of services and suppliers using such data;
(ii)(I) except as provided in subclause (II), if available, use standard measures, such as measures endorsed by the entity with a contract under
(II) use alternative measures if the Secretary, in consultation with appropriate stakeholders, determines that use of such alternative measures would be more valid, reliable, responsive to consumer preferences, cost-effective, or relevant to dimensions of quality and resource use not addressed by such standard measures;
(iii) include data made available under this subsection with claims data from sources other than claims data under this subchapter in the evaluation of performance of providers of services and suppliers;
(iv) only include information on the evaluation of performance of providers and suppliers in reports described in subparagraph (C);
(v) make available to providers of services and suppliers, upon their request, data made available under this subsection; and
(vi) prior to their release, submit to the Secretary the format of reports under subparagraph (C).
(C) Reports
Any report by a qualified entity evaluating the performance of providers of services and suppliers using data made available under this subsection shall—
(i) include an understandable description of the measures, which shall include quality measures and the rationale for use of other measures described in subparagraph (B)(ii)(II), risk adjustment methods, physician attribution methods, other applicable methods, data specifications and limitations, and the sponsors, so that consumers, providers of services and suppliers, health plans, researchers, and other stakeholders can assess such reports;
(ii) be made available confidentially, to any provider of services or supplier to be identified in such report, prior to the public release of such report, and provide an opportunity to appeal and correct errors;
(iii) only include information on a provider of services or supplier in an aggregate form as determined appropriate by the Secretary; and
(iv) except as described in clause (ii), be made available to the public.
(D) Approval and limitation of uses
The Secretary shall not make data described in paragraph (3) available to a qualified entity unless the qualified entity agrees to release the information on the evaluation of performance of providers of services and suppliers. Such entity shall only use such data, and information derived from such evaluation, for the reports under subparagraph (C). Data released to a qualified entity under this subsection shall not be subject to discovery or admission as evidence in judicial or administrative proceedings without consent of the applicable provider of services or supplier.
(f) Requirement for the Secretary to establish policies and claims edits relating to incarcerated individuals, individuals not lawfully present, and deceased individuals
The Secretary shall establish and maintain procedures, including procedures for using claims processing edits, updating eligibility information to improve provider accessibility, and conducting recoupment activities such as through recovery audit contractors, in order to ensure that payment is not made under this subchapter for items and services furnished to an individual who is one of the following:
(1) An individual who is incarcerated.
(2) An individual who is not lawfully present in the United States and who is not eligible for coverage under this subchapter.
(3) A deceased individual.
(g) Requirement for enrollment data reporting
(1) In general
Each year (beginning with 2016), the Secretary shall submit to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate a report on Medicare enrollment data (and, in the case of part A, on data on individuals receiving benefits under such part) as of a date in such year specified by the Secretary. Such data shall be presented—
(A) by Congressional district and State; and
(B) in a manner that provides for such data based on—
(i) fee-for-service enrollment (as defined in paragraph (2));
(ii) enrollment under part C (including separate for aggregate enrollment in MA–PD plans and aggregate enrollment in MA plans that are not MA–PD plans); and
(iii) enrollment under part D.
(2) Fee-for-service enrollment defined
For purpose of paragraph (1)(B)(i), the term "fee-for-service enrollment" means aggregate enrollment (including receipt of benefits other than through enrollment) under—
(A) part A only;
(B) part B only; and
(C) both part A and part B.
(Aug. 14, 1935, ch. 531, title XVIII, §1874, as added and amended
Editorial Notes
References in Text
The Railroad Retirement Act of 1974, referred to in subsec. (a), is act Aug. 29, 1935, ch. 812, as amended generally by
The Internal Revenue Code of 1986, referred to in subsec. (d)(1), is classified generally to Title 26, Internal Revenue Code.
July 15, 2008, referred to in subsec. (d)(1)(A) and (B), was in the original "the date of the enactment of this section" and "such date", which were translated as meaning the date of enactment of
Amendments
2016—Subsec. (g).
2015—Subsec. (e).
Subsec. (e)(3).
Subsec. (e)(4)(A).
Subsec. (f).
2010—Subsec. (e).
2008—Subsec. (d).
1974—Subsec. (a).
1972—Subsec. (c).
1965—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Report
1 See References in Text note below.
2 So in original. Probably should be "subchapter".
§1395kk–1. Contracts with medicare administrative contractors
(a) Authority
(1) Authority to enter into contracts
The Secretary may enter into contracts with any eligible entity to serve as a medicare administrative contractor with respect to the performance of any or all of the functions described in paragraph (4) or parts of those functions (or, to the extent provided in a contract, to secure performance thereof by other entities).
(2) Eligibility of entities
An entity is eligible to enter into a contract with respect to the performance of a particular function described in paragraph (4) only if—
(A) the entity has demonstrated capability to carry out such function;
(B) the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement;
(C) the entity has sufficient assets to financially support the performance of such function; and
(D) the entity meets such other requirements as the Secretary may impose.
(3) Medicare administrative contractor defined
For purposes of this subchapter and subchapter XI—
(A) In general
The term "medicare administrative contractor" means an agency, organization, or other person with a contract under this section.
(B) Appropriate medicare administrative contractor
With respect to the performance of a particular function in relation to an individual entitled to benefits under part A or enrolled under part B, or both, a specific provider of services or supplier (or class of such providers of services or suppliers), the "appropriate" medicare administrative contractor is the medicare administrative contractor that has a contract under this section with respect to the performance of that function in relation to that individual, provider of services or supplier or class of provider of services or supplier.
(4) Functions described
The functions referred to in paragraphs (1) and (2) are payment functions (including the function of developing local coverage determinations, as defined in
(A) Determination of payment amounts
Determining (subject to the provisions of
(B) Making payments
Making payments described in subparagraph (A) (including receipt, disbursement, and accounting for funds in making such payments).
(C) Beneficiary education and assistance
Providing education and outreach to individuals entitled to benefits under part A or enrolled under part B, or both, and providing assistance to those individuals with specific issues, concerns, or problems.
(D) Provider consultative services
Providing consultative services to institutions, agencies, and other persons to enable them to establish and maintain fiscal records necessary for purposes of this subchapter and otherwise to qualify as providers of services or suppliers.
(E) Communication with providers
Communicating to providers of services and suppliers any information or instructions furnished to the medicare administrative contractor by the Secretary, and facilitating communication between such providers and suppliers and the Secretary.
(F) Provider education and technical assistance
Performing the functions relating to provider education, training, and technical assistance.
(G) Improper payment outreach and education program
Having in place an improper payment outreach and education program described in subsection (h).
(H) Additional functions
Performing such other functions, including (subject to paragraph (5)) functions under the Medicare Integrity Program under
(5) Relationship to MIP contracts
(A) Nonduplication of duties
In entering into contracts under this section, the Secretary shall assure that functions of medicare administrative contractors in carrying out activities under parts A and B do not duplicate activities carried out under a contract entered into under the Medicare Integrity Program under
(B) Construction
An entity shall not be treated as a medicare administrative contractor merely by reason of having entered into a contract with the Secretary under
(6) Application of Federal Acquisition Regulation
Except to the extent inconsistent with a specific requirement of this section, the Federal Acquisition Regulation applies to contracts under this section.
(b) Contracting requirements
(1) Use of competitive procedures
(A) In general
Except as provided in laws with general applicability to Federal acquisition and procurement or in subparagraph (B), the Secretary shall use competitive procedures when entering into contracts with medicare administrative contractors under this section, taking into account performance quality as well as price and other factors.
(B) Renewal of contracts
The Secretary may renew a contract with a medicare administrative contractor under this section from term to term without regard to
(C) Transfer of functions
The Secretary may transfer functions among medicare administrative contractors consistent with the provisions of this paragraph. The Secretary shall ensure that performance quality is considered in such transfers. The Secretary shall provide public notice (whether in the Federal Register or otherwise) of any such transfer (including a description of the functions so transferred, a description of the providers of services and suppliers affected by such transfer, and contact information for the contractors involved).
(D) Incentives for quality
(i) In general
Subject to clauses (ii) and (iii), the Secretary shall provide incentives for medicare administrative contractors to provide quality service and to promote efficiency.
(ii) Improper payment rate reduction incentives
The Secretary shall provide incentives for medicare administrative contractors to reduce the improper payment error rates in their jurisdictions.
(iii) Incentives
The incentives provided for under clause (ii)—
(I) may include a sliding scale of award fee payments and additional incentives to medicare administrative contractors that either reduce the improper payment rates in their jurisdictions to certain thresholds, as determined by the Secretary, or accomplish tasks, as determined by the Secretary, that further improve payment accuracy; and
(II) may include substantial reductions in award fee payments under cost-plus-award-fee contracts, for medicare administrative contractors that reach an upper end improper payment rate threshold or other threshold as determined by the Secretary, or fail to accomplish tasks, as determined by the Secretary, that further improve payment accuracy.
(2) Compliance with requirements
No contract under this section shall be entered into with any medicare administrative contractor unless the Secretary finds that such medicare administrative contractor will perform its obligations under the contract efficiently and effectively and will meet such requirements as to financial responsibility, legal authority, quality of services provided, and other matters as the Secretary finds pertinent.
(3) Performance requirements
(A) Development of specific performance requirements
(i) In general
The Secretary shall develop contract performance requirements to carry out the specific requirements applicable under this subchapter to a function described in subsection (a)(4) and shall develop standards for measuring the extent to which a contractor has met such requirements. Such requirements shall include specific performance duties expected of a medical director of a medicare administrative contractor, including requirements relating to professional relations and the availability of such director to conduct medical determination activities within the jurisdiction of such a contractor.
(ii) Consultation
In developing such performance requirements and standards for measurement, the Secretary shall consult with providers of services, organizations representative of beneficiaries under this subchapter, and organizations and agencies performing functions necessary to carry out the purposes of this section with respect to such performance requirements.
(iii) Publication of standards
The Secretary shall make such performance requirements and measurement standards available to the public.
(iv) Contractor performance transparency
To the extent possible without compromising the process for entering into and renewing contracts with medicare administrative contractors under this section, the Secretary shall make available to the public the performance of each medicare administrative contractor with respect to such performance requirements and measurement standards.
(B) Considerations
The Secretary shall include, as one of the standards developed under subparagraph (A), provider and beneficiary satisfaction levels.
(C) Inclusion in contracts
All contractor performance requirements shall be set forth in the contract between the Secretary and the appropriate medicare administrative contractor. Such performance requirements—
(i) shall reflect the performance requirements published under subparagraph (A), but may include additional performance requirements;
(ii) shall be used for evaluating contractor performance under the contract; and
(iii) shall be consistent with the written statement of work provided under the contract.
(4) Information requirements
The Secretary shall not enter into a contract with a medicare administrative contractor under this section unless the contractor agrees—
(A) to furnish to the Secretary such timely information and reports as the Secretary may find necessary in performing his functions under this subchapter; and
(B) to maintain such records and afford such access thereto as the Secretary finds necessary to assure the correctness and verification of the information and reports under subparagraph (A) and otherwise to carry out the purposes of this subchapter.
(5) Surety bond
A contract with a medicare administrative contractor under this section may require the medicare administrative contractor, and any of its officers or employees certifying payments or disbursing funds pursuant to the contract, or otherwise participating in carrying out the contract, to give surety bond to the United States in such amount as the Secretary may deem appropriate.
(c) Terms and conditions
(1) In general
A contract with any medicare administrative contractor under this section may contain such terms and conditions as the Secretary finds necessary or appropriate and may provide for advances of funds to the medicare administrative contractor for the making of payments by it under subsection (a)(4)(B).
(2) Prohibition on mandates for certain data collection
The Secretary may not require, as a condition of entering into, or renewing, a contract under this section, that the medicare administrative contractor match data obtained other than in its activities under this subchapter with data used in the administration of this subchapter for purposes of identifying situations in which the provisions of
(d) Limitation on liability of medicare administrative contractors and certain officers
(1) Certifying officer
No individual designated pursuant to a contract under this section as a certifying officer shall, in the absence of the reckless disregard of the individual's obligations or the intent by that individual to defraud the United States, be liable with respect to any payments certified by the individual under this section.
(2) Disbursing officer
No disbursing officer shall, in the absence of the reckless disregard of the officer's obligations or the intent by that officer to defraud the United States, be liable with respect to any payment by such officer under this section if it was based upon an authorization (which meets the applicable requirements for such internal controls established by the Comptroller General of the United States) of a certifying officer designated as provided in paragraph (1) of this subsection.
(3) Liability of medicare administrative contractor
(A) In general
No medicare administrative contractor shall be liable to the United States for a payment by a certifying or disbursing officer unless, in connection with such payment, the medicare administrative contractor acted with reckless disregard of its obligations under its medicare administrative contract or with intent to defraud the United States.
(B) Relationship to False Claims Act
Nothing in this subsection shall be construed to limit liability for conduct that would constitute a violation of
(4) Indemnification by Secretary
(A) In general
Subject to subparagraphs (B) and (D), in the case of a medicare administrative contractor (or a person who is a director, officer, or employee of such a contractor or who is engaged by the contractor to participate directly in the claims administration process) who is made a party to any judicial or administrative proceeding arising from or relating directly to the claims administration process under this subchapter, the Secretary may, to the extent the Secretary determines to be appropriate and as specified in the contract with the contractor, indemnify the contractor and such persons.
(B) Conditions
The Secretary may not provide indemnification under subparagraph (A) insofar as the liability for such costs arises directly from conduct that is determined by the judicial proceeding or by the Secretary to be criminal in nature, fraudulent, or grossly negligent. If indemnification is provided by the Secretary with respect to a contractor before a determination that such costs arose directly from such conduct, the contractor shall reimburse the Secretary for costs of indemnification.
(C) Scope of indemnification
Indemnification by the Secretary under subparagraph (A) may include payment of judgments, settlements (subject to subparagraph (D)), awards, and costs (including reasonable legal expenses).
(D) Written approval for settlements or compromises
A contractor or other person described in subparagraph (A) may not propose to negotiate a settlement or compromise of a proceeding described in such subparagraph without the prior written approval of the Secretary to negotiate such settlement or compromise. Any indemnification under subparagraph (A) with respect to amounts paid under a settlement or compromise of a proceeding described in such subparagraph are conditioned upon prior written approval by the Secretary of the final settlement or compromise.
(E) Construction
Nothing in this paragraph shall be construed—
(i) to change any common law immunity that may be available to a medicare administrative contractor or person described in subparagraph (A); or
(ii) to permit the payment of costs not otherwise allowable, reasonable, or allocable under the Federal Acquisition Regulation.
(e) Requirements for information security
(1) Development of information security program
A medicare administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall implement a contractor-wide information security program to provide information security for the operation and assets of the contractor with respect to such functions under this subchapter. An information security program under this paragraph shall meet the requirements for information security programs imposed on Federal agencies under paragraphs (1) through (8) of section 3544(b) 1 of title 44 (other than the requirements under paragraphs (2)(D)(i), (5)(A), and (5)(B) of such section).
(2) Independent audits
(A) Performance of annual evaluations
Each year a medicare administrative contractor that performs the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) shall undergo an evaluation of the information security of the contractor with respect to such functions under this subchapter. The evaluation shall—
(i) be performed by an entity that meets such requirements for independence as the Inspector General of the Department of Health and Human Services may establish; and
(ii) test the effectiveness of information security control techniques of an appropriate subset of the contractor's information systems (as defined in
(B) Deadline for initial evaluation
(i) New contractors
In the case of a medicare administrative contractor covered by this subsection that has not previously performed the functions referred to in subparagraphs (A) and (B) of subsection (a)(4) (relating to determining and making payments) as a fiscal intermediary or carrier under
(ii) Other contractors
In the case of a medicare administrative contractor covered by this subsection that is not described in clause (i), the first independent evaluation conducted pursuant to subparagraph (A) shall be completed within 1 year after the date the contractor commences functions referred to in clause (i) under this section.
(C) Reports on evaluations
(i) To the Department of Health and Human Services
The results of independent evaluations under subparagraph (A) shall be submitted promptly to the Inspector General of the Department of Health and Human Services and to the Secretary.
(ii) To Congress
The Inspector General of the Department of Health and Human Services shall submit to Congress annual reports on the results of such evaluations, including assessments of the scope and sufficiency of such evaluations.
(iii) Agency reporting
The Secretary shall address the results of such evaluations in reports required under section 3544(c) 1 of title 44.
(f) Incentives to improve contractor performance in provider education and outreach
The Secretary shall use specific claims payment error rates or similar methodology of medicare administrative contractors in the processing or reviewing of medicare claims in order to give such contractors an incentive to implement effective education and outreach programs for providers of services and suppliers.
(g) Communications with beneficiaries, providers of services and suppliers
(1) Communication strategy
The Secretary shall develop a strategy for communications with individuals entitled to benefits under part A or enrolled under part B, or both, and with providers of services and suppliers under this subchapter.
(2) Response to written inquiries
Each medicare administrative contractor shall, for those providers of services and suppliers which submit claims to the contractor for claims processing and for those individuals entitled to benefits under part A or enrolled under part B, or both, with respect to whom claims are submitted for claims processing, provide general written responses (which may be through electronic transmission) in a clear, concise, and accurate manner to inquiries of providers of services, suppliers, and individuals entitled to benefits under part A or enrolled under part B, or both, concerning the programs under this subchapter within 45 business days of the date of receipt of such inquiries.
(3) Response to toll-free lines
The Secretary shall ensure that each medicare administrative contractor shall provide, for those providers of services and suppliers which submit claims to the contractor for claims processing and for those individuals entitled to benefits under part A or enrolled under part B, or both, with respect to whom claims are submitted for claims processing, a toll-free telephone number at which such individuals, providers of services, and suppliers may obtain information regarding billing, coding, claims, coverage, and other appropriate information under this subchapter.
(4) Monitoring of contractor responses
(A) In general
Each medicare administrative contractor shall, consistent with standards developed by the Secretary under subparagraph (B)—
(i) maintain a system for identifying who provides the information referred to in paragraphs (2) and (3); and
(ii) monitor the accuracy, consistency, and timeliness of the information so provided.
(B) Development of standards
(i) In general
The Secretary shall establish and make public standards to monitor the accuracy, consistency, and timeliness of the information provided in response to written and telephone inquiries under this subsection. Such standards shall be consistent with the performance requirements established under subsection (b)(3).
(ii) Evaluation
In conducting evaluations of individual medicare administrative contractors, the Secretary shall take into account the results of the monitoring conducted under subparagraph (A) taking into account as performance requirements the standards established under clause (i). The Secretary shall, in consultation with organizations representing providers of services, suppliers, and individuals entitled to benefits under part A or enrolled under part B, or both, establish standards relating to the accuracy, consistency, and timeliness of the information so provided.
(C) Direct monitoring
Nothing in this paragraph shall be construed as preventing the Secretary from directly monitoring the accuracy, consistency, and timeliness of the information so provided.
(5) Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out this subsection.
(h) Improper payment outreach and education program
(1) In general
In order to reduce improper payments under this subchapter, each medicare administrative contractor shall establish and have in place an improper payment outreach and education program under which the contractor, through outreach, education, training, and technical assistance or other activities, shall provide providers of services and suppliers located in the region covered by the contract under this section with the information described in paragraph (2). The activities described in the preceding sentence shall be conducted on a regular basis.
(2) Information to be provided through activities
The information to be provided under such payment outreach and education program shall include information the Secretary determines to be appropriate, which may include the following information:
(A) A list of the providers' or suppliers' most frequent and expensive payment errors over the last quarter.
(B) Specific instructions regarding how to correct or avoid such errors in the future.
(C) A notice of new topics that have been approved by the Secretary for audits conducted by recovery audit contractors under
(D) Specific instructions to prevent future issues related to such new audits.
(E) Other information determined appropriate by the Secretary.
(3) Priority
A medicare administrative contractor shall give priority to activities under such program that will reduce improper payments that are one or more of the following:
(A) Are for items and services that have the highest rate of improper payment.
(B) Are for items and service 2 that have the greatest total dollar amount of improper payments.
(C) Are due to clear misapplication or misinterpretation of Medicare policies.
(D) Are clearly due to common and inadvertent clerical or administrative errors.
(E) Are due to other types of errors that the Secretary determines could be prevented through activities under the program.
(4) Information on improper payments from recovery audit contractors
(A) In general
In order to assist medicare administrative contractors in carrying out improper payment outreach and education programs, the Secretary shall provide each contractor with a complete list of the types of improper payments identified by recovery audit contractors under
(B) Information
The information described in subparagraph (A) shall include information such as the following:
(i) Providers of services and suppliers that have the highest rate of improper payments.
(ii) Providers of services and suppliers that have the greatest total dollar amounts of improper payments.
(iii) Items and services furnished in the region that have the highest rates of improper payments.
(iv) Items and services furnished in the region that are responsible for the greatest total dollar amount of improper payments.
(v) Other information the Secretary determines would assist the contractor in carrying out the program.
(5) Communications
Communications with providers of services and suppliers under an improper payment outreach and education program are subject to the standards and requirements of subsection (g).
(Aug. 14, 1935, ch. 531, title XVIII, §1874A, as added and amended
Editorial Notes
References in Text
The text of
Codification
In subsec. (b)(1)(B), "
Amendments
2015—Subsec. (a)(4)(G), (H).
Subsec. (b)(1)(B).
Subsec. (b)(1)(D).
Subsec. (b)(3)(A)(iv).
Subsec. (h).
2010—Subsec. (h).
2003—Subsec. (b)(3)(A)(i).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
"(1)
"(2)
Effective Date of 2003 Amendment
"(1)
"(2)
"(3)
Effective Date; Transition Rule
"(1)
"(A)
"(B)
"(C)
"(2)
"(A)
"(B)
"(3)
Construction
"(1) to compromise or affect existing legal remedies for addressing fraud or abuse, whether it be criminal prosecution, civil enforcement, or administrative remedies, including under
"(2) to prevent or impede the Department of Health and Human Services in any way from its ongoing efforts to eliminate waste, fraud, and abuse in the medicare program.
Furthermore, the consolidation of medicare administrative contracting set forth in this division [
Consideration of Incorporation of Current Law Standards
References
Secretarial Submission of Legislative Proposal
Reports on Implementation
"(1)
"(2)
"(A) The number of contracts that have been competitively bid as of such date.
"(B) The distribution of functions among contracts and contractors.
"(C) A timeline for complete transition to full competition.
"(D) A detailed description of how the Secretary has modified oversight and management of medicare contractors to adapt to full competition."
Application to Fiscal Intermediaries and Carriers
"(1)
"(2)
Policy Development Regarding Evaluation and Management (E & M) Documentation Guidelines
"(a)
"(1) has developed the guidelines in collaboration with practicing physicians (including both generalists and specialists) and provided for an assessment of the proposed guidelines by the physician community;
"(2) has established a plan that contains specific goals, including a schedule, for improving the use of such guidelines;
"(3) has conducted appropriate and representative pilot projects under subsection (b) to test such guidelines;
"(4) finds, based on reports submitted under subsection (b)(5) with respect to pilot projects conducted for such or related guidelines, that the objectives described in subsection (c) will be met in the implementation of such guidelines; and
"(5) has established, and is implementing, a program to educate physicians on the use of such guidelines and that includes appropriate outreach.
The Secretary shall make changes to the manner in which existing evaluation and management documentation guidelines are implemented to reduce paperwork burdens on physicians.
"(b)
"(1)
"(2)
"(A) be voluntary;
"(B) be of sufficient length as determined by the Secretary (but in no case to exceed 1 year) to allow for preparatory physician and medicare contractor education, analysis, and use and assessment of potential evaluation and management guidelines; and
"(C) be conducted, in development and throughout the planning and operational stages of the project, in consultation with practicing physicians (including both generalists and specialists).
"(3)
"(A) at least one shall focus on a peer review method by physicians (not employed by a medicare contractor) which evaluates medical record information for claims submitted by physicians identified as statistical outliers relative to codes used for billing purposes for such services;
"(B) at least one shall focus on an alternative method to detailed guidelines based on physician documentation of face to face encounter time with a patient;
"(C) at least one shall be conducted for services furnished in a rural area and at least one for services furnished outside such an area; and
"(D) at least one shall be conducted in a setting where physicians bill under physicians' services in teaching settings and at least one shall be conducted in a setting other than a teaching setting.
"(4)
"(A) different types of physician practices, including those with fewer than 10 full-time-equivalent employees (including physicians); and
"(B) the costs of physician compliance, including education, implementation, auditing, and monitoring.
"(5)
"(c)
"(1) identify clinically relevant documentation needed to code accurately and assess coding levels accurately;
"(2) decrease the level of non-clinically pertinent and burdensome documentation time and content in the physician's medical record;
"(3) increase accuracy by reviewers; and
"(4) educate both physicians and reviewers.
"(d)
"(1)
"(2)
"(A) the development of a simpler, alternative system of requirements for documentation accompanying claims for evaluation and management physician services for which payment is made under title XVIII of the Social Security Act [
"(B) consideration of systems other than current coding and documentation requirements for payment for such physician services.
"(3)
"(4)
"(5)
"(A) Not later than October 1, 2005, the Secretary shall submit to Congress a report on the results of the study conducted under paragraph (1).
"(B) The Medicare Payment Advisory Commission shall conduct an analysis of the results of the study included in the report under subparagraph (A) and shall submit a report on such analysis to Congress.
"(e)
"(f)
"(1) the term 'rural area' has the meaning given that term in section 1886(d)(2)(D) of the Social Security Act (
"(2) the term 'teaching settings' are those settings described in section 415.150 of title 42, Code of Federal Regulations."
1 See References in Text note below.
2 So in original. Probably should be "services".
§1395kk–2. Expanding availability of Medicare data
(a) Expanding uses of Medicare data by qualified entities
(1) Additional analyses
(A) In general
Subject to subparagraph (B), to the extent consistent with applicable information, privacy, security, and disclosure laws (including paragraph (3)), notwithstanding paragraph (4)(B) of section 1874(e) of the Social Security Act (
(B) Limitations with respect to analyses
(i) Employers
Any analyses provided or sold under subparagraph (A) to an employer described in paragraph (9)(A)(iii) may only be used by such employer for purposes of providing health insurance to employees and retirees of the employer.
(ii) Health insurance issuers
A qualified entity may not provide or sell an analysis to a health insurance issuer described in paragraph (9)(A)(iv) unless the issuer is providing the qualified entity with data under section 1874(e)(4)(B)(iii) of the Social Security Act (
(2) Access to certain data
(A) Access
To the extent consistent with applicable information, privacy, security, and disclosure laws (including paragraph (3)), notwithstanding paragraph (4)(B) of section 1874(e) of the Social Security Act (
(i) provide or sell the combined data described in paragraph (4)(B)(iii) of such section to authorized users described in clauses (i), (ii), and (v) of paragraph (9)(A) for non-public use, including for the purposes described in subparagraph (B); or
(ii) subject to subparagraph (C), provide Medicare claims data to authorized users described in clauses (i), (ii), and (v),1 of paragraph (9)(A) for non-public use, including for the purposes described in subparagraph (B).
(B) Purposes described
The purposes described in this subparagraph are assisting providers of services and suppliers in developing and participating in quality and patient care improvement activities, including developing new models of care.
(C) Medicare claims data must be provided at no cost
A qualified entity may not charge a fee for providing the data under subparagraph (A)(ii).
(3) Protection of information
(A) In general
Except as provided in subparagraph (B), an analysis or data that is provided or sold under paragraph (1) or (2) shall not contain information that individually identifies a patient.
(B) Information on patients of the provider of services or supplier
To the extent consistent with applicable information, privacy, security, and disclosure laws, an analysis or data that is provided or sold to a provider of services or supplier under paragraph (1) or (2) may contain information that individually identifies a patient of such provider or supplier, including with respect to items and services furnished to the patient by other providers of services or suppliers.
(C) Prohibition on using analyses or data for marketing purposes
An authorized user shall not use an analysis or data provided or sold under paragraph (1) or (2) for marketing purposes.
(4) Data use agreement
A qualified entity and an authorized user described in clauses (i), (ii), and (v) of paragraph (9)(A) shall enter into an agreement regarding the use of any data that the qualified entity is providing or selling to the authorized user under paragraph (2). Such agreement shall describe the requirements for privacy and security of the data and, as determined appropriate by the Secretary, any prohibitions on using such data to link to other individually identifiable sources of information. If the authorized user is not a covered entity under the rules promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996, the agreement shall identify the relevant regulations, as determined by the Secretary, that the user shall comply with as if it were acting in the capacity of such a covered entity.
(5) No redisclosure of analyses or data
(A) In general
Except as provided in subparagraph (B), an authorized user that is provided or sold an analysis or data under paragraph (1) or (2) shall not redisclose or make public such analysis or data or any analysis using such data.
(B) Permitted redisclosure
A provider of services or supplier that is provided or sold an analysis or data under paragraph (1) or (2) may, as determined by the Secretary, redisclose such analysis or data for the purposes of performance improvement and care coordination activities but shall not make public such analysis or data or any analysis using such data.
(6) Opportunity for providers of services and suppliers to review
Prior to a qualified entity providing or selling an analysis to an authorized user under paragraph (1), to the extent that such analysis would individually identify a provider of services or supplier who is not being provided or sold such analysis, such qualified entity shall provide such provider or supplier with the opportunity to appeal and correct errors in the manner described in section 1874(e)(4)(C)(ii) of the Social Security Act (
(7) Assessment for a breach
(A) In general
In the case of a breach of a data use agreement under this section or section 1874(e) of the Social Security Act (
(i) an agreement between the Secretary and a qualified entity; and
(ii) an agreement between a qualified entity and an authorized user.
(B) Assessment
The assessment under subparagraph (A) shall be an amount up to $100 for each individual entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act [
(i) in the case of an agreement described in subparagraph (A)(i), for whom the Secretary provided data on to the qualified entity under paragraph (2); and
(ii) in the case of an agreement described in subparagraph (A)(ii), for whom the qualified entity provided data on to the authorized user under paragraph (2).
(C) Deposit of amounts collected
Any amounts collected pursuant to this paragraph shall be deposited in Federal 2 Supplementary Medical Insurance Trust Fund under section 1841 of the Social Security Act (
(8) Annual reports
Any qualified entity that provides or sells an analysis or data under paragraph (1) or (2) shall annually submit to the Secretary a report that includes—
(A) a summary of the analyses provided or sold, including the number of such analyses, the number of purchasers of such analyses, and the total amount of fees received for such analyses;
(B) a description of the topics and purposes of such analyses;
(C) information on the entities who received the data under paragraph (2), the uses of the data, and the total amount of fees received for providing, selling, or sharing the data; and
(D) other information determined appropriate by the Secretary.
(9) Definitions
In this subsection and subsection (b):
(A) Authorized user
The term "authorized user" means the following:
(i) A provider of services.
(ii) A supplier.
(iii) An employer (as defined in
(iv) A health insurance issuer (as defined in
(v) A medical society or hospital association.
(vi) Any entity not described in clauses (i) through (v) that is approved by the Secretary (other than an employer or health insurance issuer not described in clauses (iii) and (iv), respectively, as determined by the Secretary).
(B) Provider of services
The term "provider of services" has the meaning given such term in section 1861(u) of the Social Security Act (
(C) Qualified entity
The term "qualified entity" has the meaning given such term in section 1874(e)(2) of the Social Security Act (
(D) Secretary
The term "Secretary" means the Secretary of Health and Human Services.
(E) Supplier
The term "supplier" has the meaning given such term in section 1861(d) of the Social Security Act (
(b) Access to Medicare data by qualified clinical data registries to facilitate quality improvement
(1) Access
(A) In general
To the extent consistent with applicable information, privacy, security, and disclosure laws, beginning July 1, 2016, the Secretary shall, at the request of a qualified clinical data registry under section 1848(m)(3)(E) of the Social Security Act (
(B) Data described
The data described in this subparagraph is—
(i) claims data under the Medicare program under title XVIII of the Social Security Act [
(ii) if the Secretary determines appropriate, claims data under the Medicaid program under title XIX of such Act [
(2) Fee
Data described in paragraph (1)(B) shall be provided to a qualified clinical data registry under paragraph (1) at a fee equal to the cost of providing such data. Any fee collected pursuant to the preceding sentence shall be deposited in the Centers for Medicare & Medicaid Services Program Management Account.
(
Editorial Notes
References in Text
The Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (a)(4), is
The Social Security Act, referred to in subsecs. (a)(7)(B) and (b)(1)(B), is act Aug. 14, 1935, ch. 531,
Codification
Section is comprised of section 105 of
Section was enacted as part of the Medicare Access and CHIP Reauthorization Act of 2015, and not as part of the Social Security Act which comprises this chapter.
1 So in original. The comma probably should not appear.
2 So in original. Probably should be preceded by "the".
3 So in original. Probably should be "1395kk(e)(2))."
§1395ll. Studies and recommendations
(a) Health care of the aged and disabled
The Secretary shall carry on studies and develop recommendations to be submitted from time to time to the Congress relating to health care of the aged and the disabled, including studies and recommendations concerning (1) the adequacy of existing personnel and facilities for health care for purposes of the programs under parts A and B of this subchapter; (2) methods for encouraging the further development of efficient and economical forms of health care which are a constructive alternative to inpatient hospital care; and (3) the effects of the deductibles and coinsurance provisions upon beneficiaries, persons who provide health services, and the financing of the program.
(b) Operation and administration of insurance programs
The Secretary shall make a continuing study of the operation and administration of this subchapter (including a validation of the accreditation process of national accreditation bodies under
(Aug. 14, 1935, ch. 531, title XVIII, §1875, as added
Editorial Notes
References in Text
Section 226 of the Social Security Amendments of 1972, referred to in subsec. (b), is section 226 of
Section 402 of the Social Security Amendments of 1967, referred to in subsec. (b), is section 402 of
Section 222(a) of the Social Security Amendments of 1972, referred to in subsec. (b), is section 222(a) of
Amendments
2008—Subsec. (b).
2003—Subsec. (b).
1989—Subsec. (c).
Subsec. (c)(7).
1988—Subsec. (c)(3).
"(A) from the Federal Hospital Insurance Trust Fund $4,000,000 for fiscal year 1987 and $5,000,000 for each of fiscal years 1988 and 1989, and
"(B) from the Federal Supplementary Medical Insurance Trust Fund $2,000,000 for fiscal year 1987 and $2,500,000 for each of fiscal years 1988 and 1989."
1987—Subsec. (c)(3)(B).
1986—Subsec. (c).
1984—Subsec. (b).
1972—Subsec. (a).
Subsec. (b).
1968—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2008 Amendment; Transition Rule
Amendment by
Effective Date of 1989 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1972 Amendment
Amendment by section 226(d) of
Institute of Medicine Evaluation and Report on Health Care Performance Measures
"(a)
"(1)
"(2)
"(A) catalogue, review, and evaluate the validity of leading health care performance measures;
"(B) catalogue and evaluate the success and utility of alternative performance incentive programs in public or private sector settings; and
"(C) identify and prioritize options to implement policies that align performance with payment under the medicare program that indicate—
"(i) the performance measurement set to be used and how that measurement set will be updated;
"(ii) the payment policy that will reward performance; and
"(iii) the key implementation issues (such as data and information technology requirements) that must be addressed.
"(3)
"(4)
"(b)
"(c)
GAO Study on Access to Physicians' Services
"(a)
"(1) an assessment of the use by beneficiaries of such services through an analysis of claims submitted by physicians for such services under part B of the medicare program [
"(2) an examination of changes in the use by beneficiaries of physicians' services over time; and
"(3) an examination of the extent to which physicians are not accepting new medicare beneficiaries as patients.
"(b)
"(1) data from claims submitted by physicians under part B of the medicare program [
"(2) access by medicare beneficiaries to physicians' services may have improved, remained constant, or deteriorated over time."
Study on Enrollment Procedures for Groups That Retain Independent Contractor Physicians
"(a)
"(1) review the issuance of individual medicare provider numbers and the possible medicare program integrity vulnerabilities of the current process;
"(2) review direct and indirect costs associated with the current process incurred by the medicare program and groups that retain independent contractor physicians;
"(3) assess the effect on program integrity by the enrollment of groups that retain independent contractor hospital-based physicians; and
"(4) develop suggested procedures for the enrollment of these groups.
"(b)
GAO Studies and Reports on Medicare Payments
"(a) GAO
"(1)
"(A) coding and billing;
"(B) documentation requirements; and
"(C) the calculation of overpayments.
"(2)
"(b) GAO
"(1)
"(2)
"(A) a reduction in paperwork, an ease of administration, or an appropriate change in oversight and review may be accomplished; or
"(B) additional payments or education are needed to assist physicians and other health care providers in understanding and complying with any legal or regulatory requirements."
Study and Report Regarding Utilization of Physicians' Services by Medicare Beneficiaries
"(1)
"(2)
"(A) The various methods for accurately estimating the economic impact on expenditures for physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (
"(i) improvements in medical capabilities;
"(ii) advancements in scientific technology;
"(iii) demographic changes in the types of medicare beneficiaries that receive benefits under such program; and
"(iv) geographic changes in locations where medicare beneficiaries receive benefits under such program.
"(B) The rate of usage of physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (
"(C) Other factors that may be reliable predictors of beneficiary utilization of physicians' services under the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (
"(3)
"(4)
"(A) an analysis and evaluation of the report submitted under paragraph (3); and
"(B) such recommendations as it determines are appropriate."
Study of Adult Day Care Services
Study To Develop a Strategy for Quality Review and Assurance
Special Treatment of States Formerly Under Waiver
For treatment of hospitals in States which have had a waiver approved under this section, upon termination of waiver, see section 9202(j) of
Drug Detoxification Medicare Coverage and Facility Incentives
Legislative Recommendations Regarding Reimbursement for Optometrists' Services
Demonstration Projects, Studies, and Reports: Nutritional Therapy, Second Opinion Cost-Sharing, Services of Registered Dietitians, Services of Clinical Social Workers, Orthopedic Shoes, Respiratory Therapy Services, and Foot Conditions; Grants, Payments, and Expenditures
Demonstration Project Relating to the Terminally Ill
Report to Congress With Respect to Urban or Rural Comprehensive Mental Health Centers and Centers for Treatment of Alcoholism and Drug Abuse; Submission No Later Than June 13, 1978
Study and Review by Comptroller General of Administrative Structure for Processing Medicare Claims; Report to Congress
Report by Secretary of Health, Education, and Welfare on Delivery of Home Health and Other In-Home Services; Contents; Consultation Requirements; Submission to Congress
1 So in original. Probably should be followed by a comma.
§1395mm. Payments to health maintenance organizations and competitive medical plans
(a) Rates and adjustments
(1)(A) The Secretary shall annually determine, and shall announce (in a manner intended to provide notice to interested parties) not later than September 7 before the calendar year concerned—
(i) a per capita rate of payment for each class of individuals who are enrolled under this section with an eligible organization which has entered into a risk-sharing contract and who are entitled to benefits under part A and enrolled under part B, and
(ii) a per capita rate of payment for each class of individuals who are so enrolled with such an organization and who are enrolled under part B only.
For purposes of this section, the term "risk-sharing contract" means a contract entered into under subsection (g) and the term "reasonable cost reimbursement contract" means a contract entered into under subsection (h).
(B) The Secretary shall define appropriate classes of members, based on age, disability status, and such other factors as the Secretary determines to be appropriate, so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such classes, if such changes will improve the determination of actuarial equivalence.
(C) The annual per capita rate of payment for each such class shall be equal to 95 percent of the adjusted average per capita cost (as defined in paragraph (4)) for that class.
(D) In the case of an eligible organization with a risk-sharing contract, the Secretary shall make monthly payments in advance and in accordance with the rate determined under subparagraph (C) and except as provided in subsection (g)(2), to the organization for each individual enrolled with the organization under this section.
(E)(i) The amount of payment under this paragraph may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled in the plan under this section and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment.
(ii)(I) Subject to subclause (II), the Secretary may make retroactive adjustments under clause (i) to take into account individuals enrolled during the period beginning on the date on which the individual enrolls with an eligible organization (which has a risk-sharing contract under this section) under a health benefit plan operated, sponsored, or contributed to by the individual's employer or former employer (or the employer or former employer of the individual's spouse) and ending on the date on which the individual is enrolled in the plan under this section, except that for purposes of making such retroactive adjustments under this clause, such period may not exceed 90 days.
(II) No adjustment may be made under subclause (I) with respect to any individual who does not certify that the organization provided the individual with the explanation described in subsection (c)(3)(E) at the time the individual enrolled with the organization.
(F)(i) At least 45 days before making the announcement under subparagraph (A) for a year (beginning with the announcement for 1991), the Secretary shall provide for notice to eligible organizations of proposed changes to be made in the methodology or benefit coverage assumptions from the methodology and assumptions used in the previous announcement and shall provide such organizations an opportunity to comment on such proposed changes.
(ii) In each announcement made under subparagraph (A) for a year (beginning with the announcement for 1991), the Secretary shall include an explanation of the assumptions (including any benefit coverage assumptions) and changes in methodology used in the announcement in sufficient detail so that eligible organizations can compute per capita rates of payment for classes of individuals located in each county (or equivalent area) which is in whole or in part within the service area of such an organization.
(2) With respect to any eligible organization which has entered into a reasonable cost reimbursement contract, payments shall be made to such plan in accordance with subsection (h)(2) rather than paragraph (1).
(3) Subject to subsections (c)(2)(B)(ii) and (c)(7), payments under a contract to an eligible organization under paragraph (1) or (2) shall be instead of the amounts which (in the absence of the contract) would be otherwise payable, pursuant to
(4) For purposes of this section, the term "adjusted average per capita cost" means the average per capita amount that the Secretary estimates in advance (on the basis of actual experience, or retrospective actuarial equivalent based upon an adequate sample and other information and data, in a geographic area served by an eligible organization or in a similar area, with appropriate adjustments to assure actuarial equivalence) would be payable in any contract year for services covered under parts A and B, or part B only, and types of expenses otherwise reimbursable under parts A and B, or part B only (including administrative costs incurred by organizations described in
(5) The payment to an eligible organization under this section for individuals enrolled under this section with the organization and entitled to benefits under part A and enrolled under part B shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. The portion of that payment to the organization for a month to be paid by each trust fund shall be determined as follows:
(A) In regard to expenditures by eligible organizations having risk-sharing contracts, the allocation shall be determined each year by the Secretary based on the relative weight that benefits from each fund contribute to the adjusted average per capita cost.
(B) In regard to expenditures by eligible organizations operating under a reasonable cost reimbursement contract, the initial allocation shall be based on the plan's most recent budget, such allocation to be adjusted, as needed, after cost settlement to reflect the distribution of actual expenditures.
The remainder of that payment shall be paid by the former trust fund.
(6) Subject to subsections (c)(2)(B)(ii) and (c)(7), if an individual is enrolled under this section with an eligible organization having a risk-sharing contract, only the eligible organization shall be entitled to receive payments from the Secretary under this subchapter for services furnished to the individual.
(b) Definitions; requirements
For purposes of this section, the term "eligible organization" means a public or private entity (which may be a health maintenance organization or a competitive medical plan), organized under the laws of any State, which—
(1) is a qualified health maintenance organization (as defined in section 300e–9(d) 1 of this title), or
(2) meets the following requirements:
(A) The entity provides to enrolled members at least the following health care services:
(i) Physicians' services performed by physicians (as defined in
(ii) Inpatient hospital services.
(iii) Laboratory, X-ray, emergency, and preventive services.
(iv) Out-of-area coverage.
(B) The entity is compensated (except for deductibles, coinsurance, and copayments) for the provision of health care services to enrolled members by a payment which is paid on a periodic basis without regard to the date the health care services are provided and which is fixed without regard to the frequency, extent, or kind of health care service actually provided to a member.
(C) The entity provides physicians' services primarily (i) directly through physicians who are either employees or partners of such organization, or (ii) through contracts with individual physicians or one or more groups of physicians (organized on a group practice or individual practice basis).
(D) The entity assumes full financial risk on a prospective basis for the provision of the health care services listed in subparagraph (A), except that such entity may—
(i) obtain insurance or make other arrangements for the cost of providing to any enrolled member health care services listed in subparagraph (A) the aggregate value of which exceeds $5,000 in any year,
(ii) obtain insurance or make other arrangements for the cost of health care service listed in subparagraph (A) provided to its enrolled members other than through the entity because medical necessity required their provision before they could be secured through the entity,
(iii) obtain insurance or make other arrangements for not more than 90 percent of the amount by which its costs for any of its fiscal years exceed 115 percent of its income for such fiscal year, and
(iv) make arrangements with physicians or other health professionals, health care institutions, or any combination of such individuals or institutions to assume all or part of the financial risk on a prospective basis for the provision of basic health services by the physicians or other health professionals or through the institutions.
(E) The entity has made adequate provision against the risk of insolvency, which provision is satisfactory to the Secretary.
Paragraph (2)(A)(ii) shall not apply to an entity which had contracted with a single State agency administering a State plan approved under subchapter XIX for the provision of services (other than inpatient hospital services) to individuals eligible for such services under such State plan on a prepaid risk basis prior to 1970.
(c) Enrollment in plan; duties of organization to enrollees
(1) The Secretary may not enter into a contract under this section with an eligible organization unless it meets the requirements of this subsection and subsection (e) with respect to members enrolled under this section.
(2)(A) The organization must provide to members enrolled under this section, through providers and other persons that meet the applicable requirements of this subchapter and part A of subchapter XI—
(i) only those services covered under parts A and B of this subchapter, for those members entitled to benefits under part A and enrolled under part B, or
(ii) only those services covered under part B, for those members enrolled only under such part,
which are available to individuals residing in the geographic area served by the organization, except that (I) the organization may provide such members with such additional health care services as the members may elect, at their option, to have covered, and (II) in the case of an organization with a risk-sharing contract, the organization may provide such members with such additional health care services as the Secretary may approve. The Secretary shall approve any such additional health care services which the organization proposes to offer to such members, unless the Secretary determines that including such additional services will substantially discourage enrollment by covered individuals with the organization.
(B) If there is a national coverage determination made in the period beginning on the date of an announcement under subsection (a)(1)(A) and ending on the date of the next announcement under such subsection that the Secretary projects will result in a significant change in the costs to the organization of providing the benefits that are the subject of such national coverage determination and that was not incorporated in the determination of the per capita rate of payment included in the announcement made at the beginning of such period—
(i) such determination shall not apply to risk-sharing contracts under this section until the first contract year that begins after the end of such period; and
(ii) if such coverage determination provides for coverage of additional benefits or under additional circumstances, subsection (a)(3) shall not apply to payment for such additional benefits or benefits provided under such additional circumstances until the first contract year that begins after the end of such period,
unless otherwise required by law.
(3)(A)(i) Each eligible organization must have an open enrollment period, for the enrollment of individuals under this section, of at least 30 days duration every year and including the period or periods specified under clause (ii), and must provide that at any time during which enrollments are accepted, the organization will accept up to the limits of its capacity (as determined by the Secretary) and without restrictions, except as may be authorized in regulations, individuals who are eligible to enroll under subsection (d) in the order in which they apply for enrollment, unless to do so would result in failure to meet the requirements of subsection (f) or would result in the enrollment of enrollees substantially nonrepresentative, as determined in accordance with regulations of the Secretary, of the population in the geographic area served by the organization.
(ii)(I) If a risk-sharing contract under this section is not renewed or is otherwise terminated, eligible organizations with risk-sharing contracts under this section and serving a part of the same service area as under the terminated contract are required to have an open enrollment period for individuals who were enrolled under the terminated contract as of the date of notice of such termination. If a risk-sharing contract under this section is renewed in a manner that discontinues coverage for individuals residing in part of the service area, eligible organizations with risk-sharing contracts under this section and enrolling individuals residing in that part of the service area are required to have an open enrollment period for individuals residing in the part of the service area who were enrolled under the contract as of the date of notice of such discontinued coverage.
(II) The open enrollment periods required under subclause (I) shall be for 30 days and shall begin 30 days after the date that the Secretary provides notice of such requirement.
(III) Enrollment under this clause shall be effective 30 days after the end of the open enrollment period, or, if the Secretary determines that such date is not feasible, such other date as the Secretary specifies.
(B) An individual may enroll under this section with an eligible organization in such manner as may be prescribed in regulations and may terminate his enrollment with the eligible organization as of the beginning of the first calendar month following the date on which the request is made for such termination (or, in the case of financial insolvency of the organization, as may be prescribed by regulations) or, in the case of such an organization with a reasonable cost reimbursement contract, as may be prescribed by regulations. In the case of an individual's termination of enrollment, the organization shall provide the individual with a copy of the written request for termination of enrollment and a written explanation of the period (ending on the effective date of the termination) during which the individual continues to be enrolled with the organization and may not receive benefits under this subchapter other than through the organization.
(C) The Secretary may prescribe the procedures and conditions under which an eligible organization that has entered into a contract with the Secretary under this subsection may inform individuals eligible to enroll under this section with the organization about the organization, or may enroll such individuals with the organization. No brochures, application forms, or other promotional or informational material may be distributed by an organization to (or for the use of) individuals eligible to enroll with the organization under this section unless (i) at least 45 days before its distribution, the organization has submitted the material to the Secretary for review and (ii) the Secretary has not disapproved the distribution of the material. The Secretary shall review all such material submitted and shall disapprove such material if the Secretary determines, in the Secretary's discretion, that the material is materially inaccurate or misleading or otherwise makes a material misrepresentation.
(D) The organization must provide assurances to the Secretary that it will not expel or refuse to re-enroll any such individual because of the individual's health status or requirements for health care services, and that it will notify each such individual of such fact at the time of the individual's enrollment.
(E) Each eligible organization shall provide each enrollee, at the time of enrollment and not less frequently than annually thereafter, an explanation of the enrollee's rights under this section, including an explanation of—
(i) the enrollee's rights to benefits from the organization,
(ii) the restrictions on payments under this subchapter for services furnished other than by or through the organization,
(iii) out-of-area coverage provided by the organization,
(iv) the organization's coverage of emergency services and urgently needed care, and
(v) appeal rights of enrollees.
(F) Each eligible organization that provides items and services pursuant to a contract under this section shall provide assurances to the Secretary that in the event the organization ceases to provide such items and services, the organization shall provide or arrange for supplemental coverage of benefits under this subchapter related to a pre-existing condition with respect to any exclusion period, to all individuals enrolled with the entity who receive benefits under this subchapter, for the lesser of six months or the duration of such period.
(G)(i) Each eligible organization having a risk-sharing contract under this section shall notify individuals eligible to enroll with the organization under this section and individuals enrolled with the organization under this section that—
(I) the organization is authorized by law to terminate or refuse to renew the contract, and
(II) termination or nonrenewal of the contract may result in termination of the enrollments of individuals enrolled with the organization under this section.
(ii) The notice required by clause (i) shall be included in—
(I) any marketing materials described in subparagraph (C) that are distributed by an eligible organization to individuals eligible to enroll under this section with the organization, and
(II) any explanation provided to enrollees by the organization pursuant to subparagraph (E).
(4) The organization must—
(A) make the services described in paragraph (2) (and such other health care services as such individuals have contracted for) (i) available and accessible to each such individual, within the area served by the organization, with reasonable promptness and in a manner which assures continuity, and (ii) when medically necessary, available and accessible twenty-four hours a day and seven days a week, and
(B) provide for reimbursement with respect to services which are described in subparagraph (A) and which are provided to such an individual other than through the organization, if (i) the services were medically necessary and immediately required because of an unforeseen illness, injury, or condition and (ii) it was not reasonable given the circumstances to obtain the services through the organization.
(5)(A) The organization must provide meaningful procedures for hearing and resolving grievances between the organization (including any entity or individual through which the organization provides health care services) and members enrolled with the organization under this section.
(B) A member enrolled with an eligible organization under this section who is dissatisfied by reason of his failure to receive any health service to which he believes he is entitled and at no greater charge than he believes he is required to pay is entitled, if the amount in controversy is $100 or more, to a hearing before the Secretary to the same extent as is provided in
(6) The organization must have arrangements, established in accordance with regulations of the Secretary, for an ongoing quality assurance program for health care services it provides to such individuals, which program (A) stresses health outcomes and (B) provides review by physicians and other health care professionals of the process followed in the provision of such health care services.
(7) A risk-sharing contract under this section shall provide that in the case of an individual who is receiving inpatient hospital services from a subsection (d) hospital (as defined in
(A) enrollment with an eligible organization under this section—
(i) payment for such services until the date of the individual's discharge shall be made under this subchapter as if the individual were not enrolled with the organization,
(ii) the organization shall not be financially responsible for payment for such services until the date after the date of the individual's discharge, and
(iii) the organization shall nonetheless be paid the full amount otherwise payable to the organization under this section; or
(B) termination of enrollment with an eligible organization under this section—
(i) the organization shall be financially responsible for payment for such services after such date and until the date of the individual's discharge,
(ii) payment for such services during the stay shall not be made under
(iii) the organization shall not receive any payment with respect to the individual under this section during the period the individual is not enrolled.
(8) A contract under this section shall provide that the eligible organization shall meet the requirement of
(d) Right to enroll with contracting organization in geographic area
Subject to the provisions of subsection (c)(3), every individual entitled to benefits under part A and enrolled under part B or enrolled under part B only (other than an individual medically determined to have end-stage renal disease) shall be eligible to enroll under this section with any eligible organization with which the Secretary has entered into a contract under this section and which serves the geographic area in which the individual resides.
(e) Limitation on charges; election of coverage; "adjusted community rate" defined; workmen's compensation and insurance benefits
(1) In no case may—
(A) the portion of an eligible organization's premium rate and the actuarial value of its deductibles, coinsurance, and copayments charged (with respect to services covered under parts A and B) to individuals who are enrolled under this section with the organization and who are entitled to benefits under part A and enrolled under part B, or
(B) the portion of its premium rate and the actuarial value of its deductibles, coinsurance, and copayments charged (with respect to services covered under part B) to individuals who are enrolled under this section with the organization and enrolled under part B only
exceed the actuarial value of the coinsurance and deductibles that would be applicable on the average to individuals enrolled under this section with the organization (or, if the Secretary finds that adequate data are not available to determine that actuarial value, the actuarial value of the coinsurance and deductibles applicable on the average to individuals in the area, in the State, or in the United States, eligible to enroll under this section with the organization, or other appropriate data) and entitled to benefits under part A and enrolled under part B, or enrolled under part B only, respectively, if they were not members of an eligible organization.
(2) If the eligible organization provides to its members enrolled under this section services in addition to services covered under parts A and B of this subchapter, election of coverage for such additional services (unless such services have been approved by the Secretary under subsection (c)(2)) shall be optional for such members and such organization shall furnish such members with information on the portion of its premium rate or other charges applicable to such additional services. In no case may the sum of—
(A) the portion of such organization's premium rate charged, with respect to such additional services, to members enrolled under this section, and
(B) the actuarial value of its deductibles, coinsurance, and copayments charged, with respect to such services to such members
exceed the adjusted community rate for such services.
(3) For purposes of this section, the term "adjusted community rate" for a service or services means, at the election of an eligible organization, either—
(A) the rate of payment for that service or services which the Secretary annually determines would apply to a member enrolled under this section with an eligible organization if the rate of payment were determined under a "community rating system" (as defined in
(B) such portion of the weighted aggregate premium, which the Secretary annually estimates would apply to a member enrolled under this section with the eligible organization, as the Secretary annually estimates is attributable to that service or services,
but adjusted for differences between the utilization characteristics of the members enrolled with the eligible organization under this section and the utilization characteristics of the other members of the organization (or, if the Secretary finds that adequate data are not available to adjust for those differences, the differences between the utilization characteristics of members in other eligible organizations, or individuals in the area, in the State, or in the United States, eligible to enroll under this section with an eligible organization and the utilization characteristics of the rest of the population in the area, in the State, or in the United States, respectively).
(4) Notwithstanding any other provision of law, the eligible organization may (in the case of the provision of services to a member enrolled under this section for an illness or injury for which the member is entitled to benefits under a workmen's compensation law or plan of the United States or a State, under an automobile or liability insurance policy or plan, including a self-insured plan, or under no fault insurance) charge or authorize the provider of such services to charge, in accordance with the charges allowed under such law or policy—
(A) the insurance carrier, employer, or other entity which under such law, plan, or policy is to pay for the provision of such services, or
(B) such member to the extent that the member has been paid under such law, plan, or policy for such services.
(f) Membership requirements
(1) For contract periods beginning before January 1, 1999, each eligible organization with which the Secretary enters into a contract under this section shall have, for the duration of such contract, an enrolled membership at least one-half of which consists of individuals who are not entitled to benefits under this subchapter.
(2) Subject to paragraph (4), the Secretary may modify or waive the requirement imposed by paragraph (1) only—
(A) to the extent that more than 50 percent of the population of the area served by the organization consists of individuals who are entitled to benefits under this subchapter or under a State plan approved under subchapter XIX, or
(B) in the case of an eligible organization that is owned and operated by a governmental entity, only with respect to a period of three years beginning on the date the organization first enters into a contract under this section, and only if the organization has taken and is making reasonable efforts to enroll individuals who are not entitled to benefits under this subchapter or under a State plan approved under subchapter XIX.
(3) If the Secretary determines that an eligible organization has failed to comply with the requirements of this subsection, the Secretary may provide for the suspension of enrollment of individuals under this section or of payment to the organization under this section for individuals newly enrolled with the organization, after the date the Secretary notifies the organization of such noncompliance.
(4) Effective for contract periods beginning after December 31, 1996, the Secretary may waive or modify the requirement imposed by paragraph (1) to the extent the Secretary finds that it is in the public interest.
(g) Risk-sharing contract
(1) The Secretary may enter a risk-sharing contract with any eligible organization, as defined in subsection (b), which has at least 5,000 members, except that the Secretary may enter into such a contract with an eligible organization that has fewer members if the organization primarily serves members residing outside of urbanized areas.
(2) Each risk-sharing contract shall provide that—
(A) if the adjusted community rate, as defined in subsection (e)(3), for services under parts A and B (as reduced for the actuarial value of the coinsurance and deductibles under those parts) for members enrolled under this section with the organization and entitled to benefits under part A and enrolled in part B, or
(B) if the adjusted community rate for services under part B (as reduced for the actuarial value of the coinsurance and deductibles under that part) for members enrolled under this section with the organization and entitled to benefits under part B only
is less than the average of the per capita rates of payment to be made under subsection (a)(1) at the beginning of an annual contract period for members enrolled under this section with the organization and entitled to benefits under part A and enrolled in part B, or enrolled in part B only, respectively, the eligible organization shall provide to members enrolled under a risk-sharing contract under this section with the organization and entitled to benefits under part A and enrolled in part B, or enrolled in part B only, respectively, the additional benefits described in paragraph (3) which are selected by the eligible organization and which the Secretary finds are at least equal in value to the difference between that average per capita payment and the adjusted community rate (as so reduced); except that this paragraph shall not apply with respect to any organization which elects to receive a lesser payment to the extent that there is no longer a difference between the average per capita payment and adjusted community rate (as so reduced) and except that an organization (with the approval of the Secretary) may provide that a part of the value of such additional benefits be withheld and reserved by the Secretary as provided in paragraph (5). If the Secretary finds that there is insufficient enrollment experience to determine an average of the per capita rates of payment to be made under subsection (a)(1) at the beginning of a contract period, the Secretary may determine such an average based on the enrollment experience of other contracts entered into under this section.
(3) The additional benefits referred to in paragraph (2) are—
(A) the reduction of the premium rate or other charges made with respect to services furnished by the organization to members enrolled under this section, or
(B) the provision of additional health benefits,
or both.
(4) Repealed.
(5) An organization having a risk-sharing contract under this section may (with the approval of the Secretary) provide that a part of the value of additional benefits otherwise required to be provided by reason of paragraph (2) be withheld and reserved in the Federal Hospital Insurance Trust Fund and in the Federal Supplementary Medical Insurance Trust Fund (in such proportions as the Secretary determines to be appropriate) by the Secretary for subsequent annual contract periods, to the extent required to stabilize and prevent undue fluctuations in the additional benefits offered in those subsequent periods by the organization in accordance with paragraph (3). Any of such value of additional benefits which is not provided to members of the organization in accordance with paragraph (3) prior to the end of such period, shall revert for the use of such trust funds.
(6)(A) A risk-sharing contract under this section shall require the eligible organization to provide prompt payment (consistent with the provisions of
(B) In the case of an eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with subparagraph (A), the Secretary may provide for direct payment of the amounts owed to providers and suppliers for such covered services furnished to individuals enrolled under this section under the contract. If the Secretary provides for such direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this section to reflect the amount of the Secretary's payments (and costs incurred by the Secretary in making such payments).
(h) Reasonable cost reimbursement contract; requirements
(1) If—
(A) the Secretary is not satisfied that an eligible organization has the capacity to bear the risk of potential losses under a risk-sharing contract under this section, or
(B) the eligible organization so elects or has an insufficient number of members to be eligible to enter into a risk-sharing contract under subsection (g)(1),
the Secretary may, if he is otherwise satisfied that the eligible organization is able to perform its contractual obligations effectively and efficiently, enter into a contract with such organization pursuant to which such organization is reimbursed on the basis of its reasonable cost (as defined in
(2) A reasonable cost reimbursement contract under this subsection may, at the option of such organization, provide that the Secretary—
(A) will reimburse hospitals and skilled nursing facilities either for the reasonable cost (as determined under
(B) will deduct the amount of such reimbursement from payment which would otherwise be made to such organization.
If such an eligible organization pays a hospital or skilled nursing facility directly, the amount paid shall not exceed the reasonable cost of the services (as determined under
(3) Payments made to an organization with a reasonable cost reimbursement contract shall be subject to appropriate retroactive corrective adjustment at the end of each contract year so as to assure that such organization is paid for the reasonable cost actually incurred (excluding any part of incurred cost found to be unnecessary in the efficient delivery of health services) or the amounts otherwise determined under
(4) Any reasonable cost reimbursement contract with an eligible organization under this subsection shall provide that the Secretary shall require, at such time following the expiration of each accounting period of the eligible organization (and in such form and in such detail) as he may prescribe—
(A) that the organization report to him in an independently certified financial statement its per capita incurred cost based on the types of components of expenses otherwise reimbursable under this subchapter for providing services described in subsection (a)(1), including therein, in accordance with accounting procedures prescribed by the Secretary, its methods of allocating costs between individuals enrolled under this section and other individuals enrolled with such organization;
(B) that failure to report such information as may be required may be deemed to constitute evidence of likely overpayment on the basis of which appropriate collection action may be taken;
(C) that in any case in which an eligible organization is related to another organization by common ownership or control, a consolidated financial statement shall be filed and that the allowable costs for such organization may not include costs for the types of expense otherwise reimbursable under this subchapter, in excess of those which would be determined to be reasonable in accordance with regulations (providing for limiting reimbursement to costs rather than charges to the eligible organization by related organizations and owners) issued by the Secretary; and
(D) that in any case in which compensation is paid by an eligible organization substantially in excess of what is normally paid for similar services by similar practitioners (regardless of method of compensation), such compensation may as appropriate be considered to constitute a distribution of profits.
(5)(A) After August 5, 1997, the Secretary may not enter into a reasonable cost reimbursement contract under this subsection (if the contract is not in effect as of August 5, 1997), except for a contract with an eligible organization which, immediately previous to entering into such contract, had an agreement in effect under
(B) Subject to subparagraph (C), the Secretary shall approve an application for a modification to a reasonable cost contract under this section in order to expand the service area of such contract if—
(i) such application is submitted to the Secretary on or before September 1, 2003; and
(ii) the Secretary determines that the organization with the contract continues to meet the requirements applicable to such organizations and contracts under this section.
(C)(i) Subject to clause (ii), a reasonable cost reimbursement contract under this subsection may be extended or renewed indefinitely.
(ii) Subject to clause (iv), for any period beginning on or after January 1, 2016, a reasonable cost reimbursement contract under this subsection may not be extended or renewed for a service area insofar as such area during the entire previous year was within the service area of—
(I) 2 or more MA regional plans described in clause (iii), provided that all such plans are not offered by the same Medicare Advantage organization; or
(II) 2 or more MA local plans described in clause (iii), provided that all such plans are not offered by the same Medicare Advantage organization.
(iii) A plan described in this clause for a year for a service area is a plan described in
(I) With respect to any portion of the cost plan service area involved that is within a Metropolitan Statistical Area with a population of more than 250,000 and counties contiguous to such Metropolitan Statistical Area that are not in another Metropolitan Statistical Area with a population of more than 250,000, 5,000 individuals. If the service area includes a portion in more than 1 Metropolitan Statistical Area with a population of more than 250,000, the minimum enrollment determination under the preceding sentence shall be made with respect to each such Metropolitan Statistical Area (and such applicable contiguous counties to such Metropolitan Statistical Area).
(II) With respect to any other portion of such cost plan service area, 1,500 individuals.
(iv) In the case of an eligible organization that is offering a reasonable cost reimbursement contract that may no longer be extended or renewed because of the application of clause (ii), or where such contract has been extended or renewed but the eligible organization has informed the Secretary in writing not later than a date determined appropriate by the Secretary that such organization voluntarily plans not to seek renewal of the reasonable cost reimbursement contract, the following shall apply:
(I) Notwithstanding such clause, such contract may be extended or renewed for the two years subsequent to 2016. The final year in which such contract is extended or renewed is referred to in this subsection as the "last reasonable cost reimbursement contract year for the contract".
(II) The organization may not enroll a new enrollee under such contract during the last reasonable cost reimbursement contract year for the contract (but may continue to enroll new enrollees through the end of the year immediately preceding such year) unless such enrollee is any of the following:
(aa) An individual who chooses enrollment in the reasonable cost contract during the annual election period with respect to such last year.
(bb) An individual whose spouse, at the time of the individual's enrollment 2 is an enrollee under the reasonable cost reimbursement contract.
(cc) An individual who is covered under an employer group health plan that offers coverage through the reasonable cost reimbursement contract.
(dd) An individual who becomes entitled to benefits under part A, or enrolled under part B, and was enrolled in a plan offered by the eligible organization immediately prior to the individual's enrollment under the reasonable cost reimbursement contract.
(III) Not later than a date determined appropriate by the Secretary prior to the beginning of the last reasonable cost reimbursement contract year for the contract, the organization shall provide notice to the Secretary as to whether the organization will apply to have the contract converted over, in whole or in part, and offered as a Medicare Advantage plan under part C for the year following the last reasonable cost reimbursement contract year for the contract.
(IV) If the organization provides the notice described in subclause (III) that the contract will be converted, in whole or in part, the organization shall, not later than a date determined appropriate by the Secretary, provide the Secretary with such information as the Secretary determines appropriate in order to carry out
(V) In the case that the organization enrolls a new enrollee under such contract during the last reasonable cost reimbursement contract year for the contract, the organization shall provide the individual with a notification that such year is the last year for such contract.
(v) If an eligible organization that is offering a reasonable cost reimbursement contract that is extended or renewed pursuant to clause (iv) provides the notice described in clause (iv)(III) that the contract will be converted, in whole or in part, the following shall apply:
(I) The deemed enrollment under
(II) The special rule for quality increase under
(III) During the last reasonable cost reimbursement contract year for the contract and the year immediately preceding such year, the eligible organization, or the corporate parent organization of the eligible organization, shall be permitted to offer an MA plan in the area that such contract is being offered and enroll Medicare Advantage eligible individuals in such MA plan and such cost plan.
(i) Duration, termination, effective date, and terms of contract; powers and duties of Secretary
(1) Each contract under this section shall be for a term of at least one year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term; except that in accordance with procedures established under paragraph (9), the Secretary may at any time terminate any such contract or may impose the intermediate sanctions described in paragraph (6)(B) or (6)(C) (whichever is applicable) on the eligible organization if the Secretary determines that the organization—
(A) has failed substantially to carry out the contract;
(B) is carrying out the contract in a manner substantially inconsistent with the efficient and effective administration of this section; or
(C) no longer substantially meets the applicable conditions of subsections (b), (c), (e), and (f).
(2) The effective date of any contract executed pursuant to this section shall be specified in the contract.
(3) Each contract under this section—
(A) shall provide that the Secretary, or any person or organization designated by him—
(i) shall have the right to inspect or otherwise evaluate (I) the quality, appropriateness, and timeliness of services performed under the contract and (II) the facilities of the organization when there is reasonable evidence of some need for such inspection, and
(ii) shall have the right to audit and inspect any books and records of the eligible organization that pertain (I) to the ability of the organization to bear the risk of potential financial losses, or (II) to services performed or determinations of amounts payable under the contract;
(B) shall require the organization with a risk-sharing contract to provide (and pay for) written notice in advance of the contract's termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled under this section with the organization; and
(C)(i) shall require the organization to comply with subsections (a) and (c) of
(ii) shall require the organization to provide and supply information (described in
(iii) shall require the organization to notify the Secretary of loans and other special financial arrangements which are made between the organization and subcontractors, affiliates, and related parties; and
(D) shall contain such other terms and conditions not inconsistent with this section (including requiring the organization to provide the Secretary with such information) as the Secretary may find necessary and appropriate.
(4) The Secretary may not enter into a risk-sharing contract with an eligible organization if a previous risk-sharing contract with that organization under this section was terminated at the request of the organization within the preceding five-year period, except in circumstances which warrant special consideration, as determined by the Secretary.
(5) The authority vested in the Secretary by this section may be performed without regard to such provisions of law or regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this subchapter.
(6)(A) If the Secretary determines that an eligible organization with a contract under this section—
(i) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual;
(ii) imposes premiums on individuals enrolled under this section in excess of the premiums permitted;
(iii) acts to expel or to refuse to re-enroll an individual in violation of the provisions of this section;
(iv) engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this section) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services;
(v) misrepresents or falsifies information that is furnished—
(I) to the Secretary under this section, or
(II) to an individual or to any other entity under this section;
(vi) fails to comply with the requirements of subsection (g)(6)(A) or paragraph (8); or
(vii) in the case of a risk-sharing contract, employs or contracts with any individual or entity that is excluded from participation under this subchapter under
the Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in subparagraph (B).
(B) The remedies described in this subparagraph are—
(i) civil money penalties of not more than $25,000 for each determination under subparagraph (A) or, with respect to a determination under clause (iv) or (v)(I) of such subparagraph, of not more than $100,000 for each such determination, plus, with respect to a determination under subparagraph (A)(ii), double the excess amount charged in violation of such subparagraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under subparagraph (A)(iv), $15,000 for each individual not enrolled as a result of the practice involved,
(ii) suspension of enrollment of individuals under this section after the date the Secretary notifies the organization of a determination under subparagraph (A) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur, or
(iii) suspension of payment to the organization under this section for individuals enrolled after the date the Secretary notifies the organization of a determination under subparagraph (A) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur.
(C) In the case of an eligible organization for which the Secretary makes a determination under paragraph (1), the basis of which is not described in subparagraph (A), the Secretary may apply the following intermediate sanctions:
(i) Civil money penalties of not more than $25,000 for each determination under paragraph (1) if the deficiency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organization's contract.
(ii) Civil money penalties of not more than $10,000 for each week beginning after the initiation of procedures by the Secretary under paragraph (9) during which the deficiency that is the basis of a determination under paragraph (1) exists.
(iii) Suspension of enrollment of individuals under this section after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.
(D) The provisions of
(7)(A) Each risk-sharing contract with an eligible organization under this section shall provide that the organization will maintain a written agreement with a quality improvement organization (which has a contract with the Secretary under part B of subchapter XI for the area in which the eligible organization is located) or with an entity selected by the Secretary under section 1320c–3(a)(4)(C) 1 of this title under which the review organization will perform functions under
(B) For purposes of payment under this subchapter, the cost of such agreement to the eligible organization shall be considered a cost incurred by a provider of services in providing covered services under this subchapter and shall be paid directly by the Secretary to the review organization on behalf of such eligible organization in accordance with a schedule established by the Secretary.
(C) Such payments—
(i) shall be transferred in appropriate proportions from the Federal Hospital Insurance Trust Fund and from the Supplementary Medical Insurance Trust Fund, without regard to amounts appropriated in advance in appropriation Acts, in the same manner as transfers are made for payment for services provided directly to beneficiaries, and
(ii) shall not be less in the aggregate for such organizations for a fiscal year than the amounts the Secretary determines to be sufficient to cover the costs of such organizations' conducting activities described in subparagraph (A) with respect to such eligible organizations under part B of subchapter XI.
(8)(A) Each contract with an eligible organization under this section shall provide that the organization may not operate any physician incentive plan (as defined in subparagraph (B)) unless the following requirements are met:
(i) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the organization.
(ii) If the plan places a physician or physician group at substantial financial risk (as determined by the Secretary) for services not provided by the physician or physician group, the organization—
(I) provides stop-loss protection for the physician or group that is adequate and appropriate, based on standards developed by the Secretary that take into account the number of physicians placed at such substantial financial risk in the group or under the plan and the number of individuals enrolled with the organization who receive services from the physician or the physician group, and
(II) conducts periodic surveys of both individuals enrolled and individuals previously enrolled with the organization to determine the degree of access of such individuals to services provided by the organization and satisfaction with the quality of such services.
(iii) The organization provides the Secretary with descriptive information regarding the plan, sufficient to permit the Secretary to determine whether the plan is in compliance with the requirements of this subparagraph.
(B) In this paragraph, the term "physician incentive plan" means any compensation arrangement between an eligible organization and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the organization.
(9) The Secretary may terminate a contract with an eligible organization under this section or may impose the intermediate sanctions described in paragraph (6) on the organization in accordance with formal investigation and compliance procedures established by the Secretary under which—
(A) the Secretary first provides the organization with the reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the basis of the Secretary's determination under paragraph (1) and the organization fails to develop or implement such a plan;
(B) in deciding whether to impose sanctions, the Secretary considers aggravating factors such as whether an organization has a history of deficiencies or has not taken action to correct deficiencies the Secretary has brought to the organization's attention;
(C) there are no unreasonable or unnecessary delays between the finding of a deficiency and the imposition of sanctions; and
(D) the Secretary provides the organization with reasonable notice and opportunity for hearing (including the right to appeal an initial decision) before imposing any sanction or terminating the contract.
(j) Payment in full and limitation on actual charges; physicians, providers of services, or renal dialysis facilities not under contract with organization
(1)(A) In the case of physicians' services or renal dialysis services described in paragraph (2) which are furnished by a participating physician or provider of services or renal dialysis facility to an individual enrolled with an eligible organization under this section and enrolled under part B, the applicable participation agreement is deemed to provide that the physician or provider of services or renal dialysis facility will accept as payment in full from the eligible organization the amount that would be payable to the physician or provider of services or renal dialysis facility under part B and from the individual under such part, if the individual were not enrolled with an eligible organization under this section.
(B) In the case of physicians' services described in paragraph (2) which are furnished by a nonparticipating physician, the limitations on actual charges for such services otherwise applicable under part B (to services furnished by individuals not enrolled with an eligible organization under this section) shall apply in the same manner as such limitations apply to services furnished to individuals not enrolled with such an organization.
(2) The physicians' services or renal dialysis services described in this paragraph are physicians' services or renal dialysis services which are furnished to an enrollee of an eligible organization under this section by a physician, provider of services, or renal dialysis facility who is not under a contract with the organization.
(k) Risk-sharing contracts
(1) Except as provided in paragraph (2)—
(A) on or after the date standards for Medicare+Choice organizations and plans are first established under
(B) for any contract year beginning on or after January 1, 1999, the Secretary shall not renew any such contract.
(2) An individual who is enrolled in part B only and is enrolled in an eligible organization with a risk-sharing contract under this section on December 31, 1998, may continue enrollment in such organization in accordance with regulations described in
(3) Notwithstanding subsection (a), the Secretary shall provide that payment amounts under risk-sharing contracts under this section for months in a year (beginning with January 1998) shall be computed—
(A) with respect to individuals entitled to benefits under both parts A and B, by substituting payment rates under
(B) with respect to individuals only entitled to benefits under part B, by substituting an appropriate proportion of such rates (reflecting the relative proportion of payments under this subchapter attributable to such part) for the payment rates otherwise established under subsection (a).
(4) The following requirements shall apply to eligible organizations with risk-sharing contracts under this section in the same manner as they apply to Medicare+Choice organizations under part C:
(A) Data collection requirements under
(B) Restrictions on imposition of premium taxes under
(C) The requirement to accept enrollment of new enrollees during November 1998 under
(D) Payments under
(Aug. 14, 1935, ch. 531, title XVIII, §1876, as added and amended
Editorial Notes
References in Text
Amendments
2015—Subsec. (h)(5)(C)(ii).
Subsec. (h)(5)(C)(iii)(I).
Subsec. (h)(5)(C)(iii)(II).
Subsec. (h)(5)(C)(iv), (v).
2014—Subsec. (h)(5)(C)(ii).
2013—Subsec. (h)(5)(C)(ii).
2011—Subsec. (i)(7)(A).
2010—Subsec. (h)(5)(C)(ii).
2008—Subsec. (h)(5)(C)(ii).
Subsec. (h)(5)(C)(ii)(I), (II).
Subsec. (h)(5)(C)(iii)(I).
2007—Subsec. (h)(5)(C)(ii).
2003—Subsec. (c)(2)(B).
Subsec. (c)(5)(B).
Subsec. (h)(5)(C).
Subsec. (j)(2).
2000—Subsec. (h)(5)(B), (C).
1999—Subsec. (h)(5)(B).
1997—Subsec. (f)(1).
Subsec. (f)(2).
Subsec. (f)(4).
Subsec. (h)(5).
Subsec. (k).
1996—Subsec. (i)(1).
"(A) has failed substantially to carry out the contract,
"(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this section, or
"(C) no longer substantially meets the applicable conditions of subsections (b), (c), (e), and (f) of this section."
Subsec. (i)(6)(B).
Subsec. (i)(6)(C).
Subsec. (i)(6)(D).
Subsec. (i)(7)(A).
Subsec. (i)(9).
1994—Subsec. (a)(1)(E)(ii)(I).
Subsec. (a)(3).
Subsec. (c)(5)(B).
1990—Subsec. (a)(1)(E).
Subsec. (a)(6).
Subsec. (c)(2).
Subsec. (c)(8).
Subsec. (i)(6)(A)(vi).
Subsec. (i)(8).
Subsec. (j)(1)(A).
Subsec. (j)(2).
"(A) are emergency services or out-of-area coverage (described in clauses (iii) and (iv) of subsection (b)(2)(A) of this section), and
"(B) are furnished to an enrollee of an eligible organization under this section by a person who is not under a contract with the organization."
1989—Subsec. (a)(1)(F).
Subsec. (a)(5).
Subsec. (c)(3)(A)(i).
Subsec. (c)(3)(A)(ii).
Subsecs. (e)(1), (g)(3)(A).
Subsec. (g)(5).
Subsec. (i)(6)(A)(vii).
Subsec. (j).
1988—Subsec. (a)(5).
"(A) the product of (i) the number of such individuals for the month who have attained age 65, and (ii) the monthly actuarial rate for supplementary medical insurance for the month as determined under
"(B) the product of (i) the number of such individuals for the month who have not attained age 65, and (ii) the monthly actuarial rate for supplementary medical insurance for the month as determined under
Subsec. (c)(3)(F).
Subsec. (e)(1).
Subsec. (f)(3).
"(A) An eligible organization described in subparagraph (B) may elect, for purposes of enrollment and residency requirements under this section and for determining the compliance of a subdivision, subsidiary, or affiliate described in subparagraph (B)(iii) with the requirement of paragraph (1) for the period before October 1, 1992, to have members described in subparagraph (B)(iii) who receive services through the subdivision, subsidiary, or affiliate considered to be members of the parent organization.
"(B) An eligible organization described in this subparagraph is an eligible organization which—
"(i) is described in
"(ii) has members who have a collectively bargained contractual right to obtain health benefits from the organization;
"(iii) elects to provide benefits under a risk-sharing contract to individuals residing in a service area, who have a collectively bargained contractual right to obtain benefits from the organization, through a subdivision, subsidiary, or affiliate which itself is an eligible organization serving the area and which is owned or controlled by the parent eligible organization; and
"(iv) has assumed any risk of insolvency and quality assurance with respect to individuals receiving benefits through such a subdivision, subsidiary, or affiliate."
Subsec. (f)(3)(A).
Subsec. (f)(4).
Subsec. (g)(3)(A).
Subsec. (g)(5).
Subsec. (i)(6)(A).
Subsec. (i)(6)(B).
Subsec. (i)(6)(B)(i).
Subsec. (i)(7)(A).
Subsec. (i)(7)(B).
1987—Subsec. (c)(3)(F).
Subsec. (c)(3)(G).
Subsec. (f)(3), (4).
Subsec. (g)(4).
"(A) will reimburse hospitals and skilled nursing facilities either for payment amounts determined in accordance with
"(B) will deduct the amount of such reimbursement for payment which would otherwise be made to such organization."
Subsec. (g)(5).
Subsec. (i)(6).
"(6)(A) Any eligible organization with a risk-sharing contract under this section that fails substantially to provide medically necessary items and services that are required (under law or such contract) to be provided to individuals covered under such contract, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals, is subject to a civil money penalty of not more than $10,000 for each such failure.
"(B) The provisions of
Subsec. (i)(7)(A).
Subsec. (i)(7)(B).
1986—Subsec. (a)(1)(A).
Subsec. (a)(3).
Subsec. (a)(6).
Subsec. (c)(3)(B).
Subsec. (c)(3)(C).
Subsec. (c)(7).
Subsec. (c)(3)(E).
Subsec. (f)(2).
"(A) special circumstances warrant such modification or waiver, and
"(B) the eligible organization has taken and is making reasonable efforts to enroll individuals who are not entitled to benefits under this subchapter or under a State plan approved under subchapter XIX of this chapter."
Subsec. (f)(3).
Subsec. (g)(6).
Subsec. (i)(1)(C).
Subsec. (i)(3)(C).
Subsec. (i)(6).
Subsec. (i)(7).
1984—Subsec. (b)(2)(D).
Subsec. (c)(3)(A).
Subsec. (c)(4)(A)(i).
Subsec. (g)(2).
Subsec. (g)(4)(A).
Subsec. (g)(5).
1983—Subsec. (a)(5)(A)(ii).
Subsec. (a)(5)(B)(ii).
Subsec. (g)(1).
Subsec. (g)(4).
1982—
1978—Subsec. (b)(2)(B).
1976—Subsec. (b).
Subsec. (h).
Subsec. (i)(6)(B).
Subsec. (k).
1973—Subsec. (a)(3)(A)(ii).
Subsec. (g)(2).
1972—Subsec. (i).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2011 Amendment
Amendment by
Effective Date of 1996 Amendment
Amendment by section 231(g) of
Effective Date of 1994 Amendment
Amendment by
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4206(b)(1) of
Effective Date of 1989 Amendments
Amendment by section 201(a) of
Amendment by section 202(a) of
Effective Date of 1988 Amendments
Amendment by
Amendment by section 202(f) of
Amendment by section 211(c)(3) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Effective Date of 1986 Amendments
"(A)
"(B)
"(C)
"(i) as of the date of the enactment of this Act, has been granted, under paragraph (2) of section 1876(f) of the Social Security Act [
"(ii) does not meet the requirement for such modification or waiver under the amendment made by paragraph (1) of this subsection,
the organization shall make, and continue to make, reasonable efforts to meet scheduled enrollment goals, consistent with a schedule of compliance approved by the Secretary of Health and Human Services. If the Secretary determines that the organization has complied, or made significant progress towards compliance, with such schedule of compliance, the Secretary may extend such waiver. If the Secretary determines that the organization has not complied with such schedule, the Secretary may provide for a sanction described in section 1876(f)(3) of the Social Security Act [
"(D)
"(i) before January 1, 1996, section 1876(f) of the Social Security Act [
"(ii) beginning on January 1, 1990, the Secretary of Health and Human Services shall conduct an annual review of the organization to determine the organization's compliance with the quality assurance requirements of section 1876(c)(6) of such Act [
"(iii) after January 1, 1990, if the organization receives an unfavorable review under clause (ii), the Secretary, after notice to the organization of the unfavorable review and an opportunity to correct any deficiencies identified during the review, may provide for the sanction described in section 1876(f)(3) of such Act [
"(1)
"(2)
"(3)
"(B) Such amendment also shall not apply so as to require the submission of material which is distributed before July 1, 1986.
"(C) Such amendment shall also not apply to material which the Secretary determines has been prepared before the date of the enactment of this Act [Apr. 7, 1986] and for which a commitment for distribution has been made, if the application of such amendment would constitute a hardship for the organization involved.
"(4)
"(5)
Effective Date of 1984 Amendment
Amendment by section 2354(b)(37), (38) of
Effective Date of 1983 Amendments; Transitional Rule
Amendment by section 602(g) of
Amendment by section 606(a)(3)(H) of
Amendment by section 309(b)(12) of
Effective Date of 1982 Amendment
"(1) Subject to paragraph (2), the amendment made by subsection (a) [amending this section] shall apply with respect to services furnished on or after the initial effective date (as defined in paragraph (4)), except that such amendment shall not apply—
"(A) with respect to services furnished by an eligible organization to any individual who is enrolled with that organization under an existing cost contract (as defined in paragraph (3)(A)) and entitled to benefits under part A [
"(i) the individual requests at any time that the amendment apply, or
"(ii) the Secretary determines at any time that the amendment should apply to all members of the organization because of administrative costs or other administrative burdens involved and so informs in advance each affected member of the eligible organization;
"(B) with respect to services furnished by an eligible organization during the five-year period beginning on the initial effective date, if—
"(i) the organization has an existing risk-sharing contract (as defined in paragraph (3)(B)) on the initial effective date, or
"(ii) on the date of the enactment of this Act [Sept. 3, 1982] the organization was furnishing services pursuant to an existing demonstration project (as defined in paragraph (3)(C)), such demonstration project is concluded before the initial effective date, and before such initial effective date the organization enters into an existing risk-sharing contract,
unless the organization requests that the amendment apply earlier; or
"(C) with respect to services furnished by an eligible organization during the period of an existing demonstration project if on the initial effective date the organization was furnishing services pursuant to the project and if the project concludes after such date.
"(2)(A) In the case of an eligible organization which has in effect an existing cost contract (as defined in paragraph (3)(A)) on the initial effective date, the organization may receive payment under a new risk-sharing contract with respect to a current, nonrisk medicare enrollee (as defined in subparagraph (C)) only to the extent that the organization enrolls, for each such enrollee, two new medicare enrollees (as defined in subparagraph (D)). The selection of those current nonrisk medicare enrollees with respect to whom payment may be so received under a new risk-sharing contract shall be made in a nonbiased manner.
"(B) Subparagraph (A) shall not be construed to prevent an eligible organization from providing for enrollment, on a basis described in subsection (a)(6) of section 1876 of the Social Security Act [
"(i) payment to the organization with respect to such enrollees shall only be made in accordance with the terms of a reasonable cost reimbursement contract, and
"(ii) no payment may be made under section 1876 of such Act [
Individuals enrolled with the organization under this subparagraph shall be considered to be individuals enrolled with the organization for the purpose of meeting the requirement of section 1876(g)(2) of the Social Security Act [
"(C) For purposes of this paragraph, the term 'current, nonrisk medicare enrollee' means, with respect to an organization, an individual who on the initial effective date—
"(i) is enrolled with that organization under an existing cost contract, and
"(ii) is entitled to benefits under part A [
"(D) For purposes of this paragraph, the term 'new medicare enrollee' means, with respect to an organization, an individual who—
"(i) is enrolled with the organization after the date the organization first enters into a new risk-sharing contract,
"(ii) at the time of such enrollment is entitled to benefits under part A, or enrolled in part B, of title XVIII of the Social Security Act, and
"(iii) was not enrolled with the organization at the time the individual became entitled to benefits under part A, or to enroll in part B, of such title.
"(E) The preceding provisions of this paragraph shall not to [sic] apply to payments made for current, nonrisk medicare enrollees for months beginning with April 1987.
"(3) For purposes of this subsection:
"(A) The term 'existing cost contract' means a contract which is entered into under section 1876 of the Social Security Act [
"(B) The term 'existing risk-sharing contract' means a contract entered into under section 1876(i)(2)(A) of the Social Security Act [
"(C) The term 'existing demonstration project' means a demonstration project under section 402(a) of the Social Security Amendments of 1967 [
"(D) The term 'new risk-sharing contract' means a contract entered into under section 1876(g) of the Social Security Act [
"(E) The term 'reasonable cost reimbursement contract' means a contract entered into under section 1876(h) of such Act [
"(4) As used in this section, the term 'initial effective date' means—
"(A) the first day of the thirteenth month which begins after the date of the enactment of this Act [Sept. 3, 1982], or
"(B) the first day of the first month [Feb. 1, 1985] after the month in which the Secretary of Health and Human Services notifies the Committee on Finance of the Senate and the Committees on Ways and Means and on Energy and Commerce of the House of Representatives that he is reasonably certain that the methodology to make appropriate adjustments (referred to in section 1876(a)(4) of the Social Security Act [
whichever is later."
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Effective Date of 1973 Amendment
Effective Date
Report on Impact
Transition Rule for PSO Enrollment
Requirements With Respect to Actuarial Equivalence of AAPCC
"(1)(A) Not later than October 1, 1995, the Secretary of Health and Human Services (in this subsection referred to as the 'Secretary') shall submit a proposal to the Congress that provides for revisions to the payment method to be applied in years beginning with 1997 for organizations with a risk-sharing contract under section 1876(g) of the Social Security Act [
"(B) In proposing the revisions required under subparagraph (A), the Secretary shall consider—
"(i) the difference in costs associated with medicare beneficiaries with differing health status and demographic characteristics; and
"(ii) the effects of using alternative geographic classifications on the determinations of costs associated with beneficiaries residing in different areas.
"(2) Not later than 3 months after the date of submittal of the proposal under paragraph (1), the Comptroller General shall review the proposal and shall report to Congress on the appropriateness of the proposed modifications."
[Amendment by section 122(g) of
Study of Chiropractic Services
Effect on State Law
Conscientious objections of health care provider under State law unaffected by enactment of subsec. (c)(8) of this section, see section 4206(c) of
Notice of Methodology Used in Making Announcements Under Subsection (a)(1)(A)
Adjustment of Contracts With Prepaid Health Plans
"(1) with eligible organizations under section 1876 of the Social Security Act [
"(2) with health maintenance organizations under section 1876(i)(2)(A) of such Act [
Adjustment of Contracts With Prepaid Health Plans
"(1) modify contracts under section 1876 of the Social Security Act [
"(2) require such organizations and organizations paid under section 1833(a)(1)(A) of such Act [
The Secretary shall also provide for appropriate modifications of contracts with health maintenance organizations under section 1876(i)(2)(A) of the Social Security Act [
Provision of Medicare DRG Rates for Certain Payments and Data on Inpatient Cost Pass-Through Items
Medicare Payment Demonstration Projects
"(a)
"(1) The Secretary of Health and Human Services (in this subsection referred to as the 'Secretary') may provide for capitation demonstration projects (in this subsection referred to as 'projects') with an entity which is an eligible organization with a contract with the Secretary under section 1876 of the Social Security Act [
"(2) The Secretary may not conduct more than 3 projects and may not expend, from funds under title XVIII of the Social Security Act [
"(3) The per capita rate of payment under a project—
"(A) may be based on the adjusted average per capita cost (as defined in section 1876(a)(4) of the Social Security Act [
"(B) the rate of payment may not exceed the lesser of—
"(i) 95 percent of the adjusted average per capita cost described in subparagraph (A), or
"(ii)(I) in the 4th year or 5th year of a project, 115 percent of the adjusted average per capita cost (as defined in section 1876(a)(4) of such Act [
"(II) in any subsequent year of a project, 95 percent of the adjusted average per capita cost (as defined in section 1876(a)(4) [
"(4) If the payment amounts made to a project are greater than the costs of the project (as determined by the Secretary or, if applicable, on the basis of adjusted community rates described in section 1876(e)(3) of the Social Security Act [
"(A) may retain the surplus, but not to exceed 5 percent of the average adjusted per capita cost determined in accordance with paragraph (3)(A), and
"(B) with respect to any additional surplus not retained by the project, shall apply such surplus to additional benefits for individuals served by the project or return such surplus to the Secretary.
"(5) Enrollment under the project shall be voluntary. Individuals enrolled with the project may terminate such enrollment as of the beginning of the first calendar month following the date on which the request is made for such termination. Upon such termination, such individuals shall retain the same rights to other health benefits that such individuals would have had if they had never enrolled with the project without any exclusion or waiting period for pre-existing conditions.
"(6) The requirements of—
"(A) subsection (c)(3)(C) (relating to dissemination of information),
"(B) subsection (c)(3)(E) (annual statement of rights),
"(C) subsection (c)(5) (grievance procedures),
"(D) subsection (c)(6) (on-going quality),
"(E) subsection (g)(6) (relating to prompt payment of claims),
"(F) subsection (i)(3)(A) and (B) (relating to access to information and termination notices),
"(G) subsection (i)(6) (relating to providing necessary services), and
"(H) subsection (i)(7) (relating to agreements with peer review [now "quality improvement"] organizations),
of section 1876 of the Social Security Act [
"(7) The benefits provided under a project must be at least actuarially equivalent to the combination of the benefits available under title XVIII of the Social Security Act [
"(8) A project shall comply with all applicable State laws.
"(9) The Secretary may not authorize a project unless the entity offering the project demonstrates to the satisfaction of the Secretary that it has the necessary financial reserves to pay for any liability for benefits under the project (including those liabilities for health benefits under medicare and any supplemental benefits).
"(10) The Comptroller General shall monitor projects under this subsection and shall report periodically (not less often than once every year) to the Committee on Finance of the Senate and the Committee on Energy and Commerce and Committee on Ways and Means of the House of Representatives on the status of such projects and the effect on such projects of the requirements of this section and shall submit a final report to each such committee on the results of such projects.
"(b)
"(1) The Secretary of Health and Human Services (in this subsection referred to as the 'Secretary') is specifically authorized to conduct demonstration projects under this subsection for the purpose of testing alternative payment methodologies pertaining to capitation payments under title XVIII of the Social Security Act [
"(A) computing adjustments to the average per capita cost under section 1876 of such Act [
"(B) accounting for geographic variations in cost in the adjusted average per capita costs applicable to an eligible organization under such section which differs from payments currently provided on a county-by-county basis.
"(2) No project may be conducted under this subsection—
"(A) with an entity which is not an eligible organization (as defined in section 1876(b) of the Social Security Act [
"(B) unless the project meets all the requirements of subsections (c) and (i)(3) of section 1876 of such Act [
"(3) There are authorized to be appropriated to carry out projects under this subsection $5,000,000 in each of fiscal years 1989 and 1990.
"(c)
[For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which the requirement to report not less than once every year to certain committees of Congress under section 4015(a)(10) of
GAO Study and Reports on Medicare Capitation
Demonstration Projects To Provide Payment on a Prepaid, Capitated Basis for Community Nursing and Ambulatory Care Furnished to Medicare Beneficiaries
"(a)
"(b)
"(1)
"(2)
"(A)
"(i) the period beginning with October 1, 2000, and ending with December 31, 2000, shall be determined by actuarially adjusting the actual capitation rate paid for such services in 1999 for inflation, utilization, and other changes to the CNO service package, and by reducing such adjusted capitation rate by 10 percent in the case of the demonstration sites located in Arizona, Minnesota, and Illinois, and 15 percent for the demonstration site located in New York; and
"(ii) 2001 shall be determined by actuarially adjusting the capitation rate determined under clause (i) for inflation, utilization, and other changes to the CNO service package.
"(B)
"(i) the case management fee per enrollee per month for—
"(I) the period described in subparagraph (A)(i) shall be determined by actuarially adjusting the case management fee for 1999 for inflation; and
"(II) 2001 shall be determined by actuarially adjusting the amount determined under subclause (I) for inflation; and
"(ii) such case management fee shall be paid only for enrollees who are classified as moderately frail or frail pursuant to criteria established by the Secretary.
"(C)
"(i) protocols for periodic telephonic contact with enrollees based on—
"(I) the results of such standardized written health assessment; and
"(II) the application of appropriate care planning approaches;
"(ii) disease management programs for targeted diseases (such as congestive heart failure, arthritis, diabetes, and hypertension) that are highly prevalent in the enrolled populations;
"(iii) systems and protocols to track enrollees through hospitalizations, including pre-admission planning, concurrent management during inpatient hospital stays, and post-discharge assessment, planning, and follow-up; and
"(iv) standardized patient educational materials for specified diseases and health conditions.
"(D)
"(i) enrollee satisfaction surveys; and
"(ii) reporting on specified quality indicators for the enrolled population.
"(c)
"(1)
"(A) evaluates such demonstration projects for the period beginning July 1, 1997, and ending December 31, 1999, on a site-specific basis with respect to the impact on per beneficiary spending, specific health utilization measures, and enrollee satisfaction; and
"(B) includes a similar evaluation of such projects for the portion of the extension period that occurs after September 30, 2000.
"(2)
"(3)
"(A) data for all individuals who—
"(i) were enrolled in such demonstration projects as of the first day of the period under evaluation; and
"(ii) were enrolled for a minimum of 6 months thereafter; with
"(B) data for a matched sample of individuals who are enrolled under part B of title XVIII of the Social Security Act [
[
"(a)
"(b)
"(1) The term 'community nursing and ambulatory care' means the following services:
"(A) Part-time or intermittent nursing care furnished by or under the supervision of registered professional nurses.
"(B) Physical, occupational, or speech therapy.
"(C) Social and related services supportive of a plan of ambulatory care.
"(D) Part-time or intermittent services of a home health aide.
"(E) Medical supplies (other than drugs and biologicals) and durable medical equipment while under a plan of care.
"(F) Medical and other health services described in paragraphs (2)(H)(ii) and (5) through (9) of section 1861(s) of the Social Security Act [
"(G) Rural health clinic services described in section 1861(aa)(1)(C) of such Act [
"(H) Certain other related services listed in section 1915(c)(4)(B) of such Act [
"(2) The term 'eligible organization' means a public or private entity, organized under the laws of any State, which meets the following requirements:
"(A) The entity (or a division or part of such entity) is primarily engaged in the direct provision of community nursing and ambulatory care.
"(B) The entity provides directly, or through arrangements with other qualified personnel, the services described in paragraph (1).
"(C) The entity provides that all nursing care (including services of home health aids) is furnished by or under the supervision of a registered nurse.
"(D) The entity provides that all services are furnished by qualified staff and are coordinated by a registered professional nurse.
"(E) The entity has policies governing the furnishing of community nursing and ambulatory care that are developed by registered professional nurses in cooperation with (as appropriate) other professionals.
"(F) The entity maintains clinical records on all patients.
"(G) The entity has protocols and procedures to assure, when appropriate, timely referral to or consultation with other health care providers or professionals.
"(H) The entity complies with applicable State and local laws governing the provision of community nursing and ambulatory care to patients.
"(I) The requirements of subparagraphs (B), (D), and (E) of section 1876(b)(2) of the Social Security Act [
"(c)
"(1) The Secretary may not enter into an agreement with an eligible organization to conduct a demonstration project under this section unless the organization meets the requirements of this subsection and subsection (e) with respect to members enrolled with the organization under this section.
"(2) The organization shall have an open enrollment period for the enrollment of individuals under this section. The duration of such period of enrollment and any other requirement pertaining to enrollment or termination of enrollment shall be specified in the agreement with the organization.
"(3) The organization must provide to members enrolled with the organization under this section, through providers and other persons that meet the applicable requirements of titles XVIII and XIX of the Social Security Act [
"(4) The organization must make community nursing and ambulatory care (and such other health care services as such individuals have contracted for) available and accessible to each individual enrolled with the organization under this section, within the area served by the organization, with reasonable promptness and in a manner which assures continuity.
"(5) Section 1876(c)(5) of the Social Security Act [
"(6) The organization must have arrangements, established in accordance with regulations of the Secretary, for an ongoing quality assurance program for health care services it provides to such individuals under the demonstration project conducted under this section, which program (A) stresses health outcomes and (B) provides review by health care professionals of the process followed in the provision of such health care services.
"(7) Under a demonstration project under this section—
"(A) the Secretary could require the organization to provide financial or other assurances (including financial risk-sharing) that minimize the inappropriate substitution of other services under title XVIII of such Act [
"(B) if the Secretary determines that the organization has failed to perform in accordance with the requirements of the project (including meeting financial responsibility requirements under the project, any pattern of disproportionate or inappropriate institutionalization) the Secretary shall, after notice, terminate the project.
"(d)
"(1) The Secretary shall determine for each 12-month period in which a demonstration project is conducted under this section, and shall announce (in a manner intended to provide notice to interested parties) not later than three months before the beginning of such period, with respect to each eligible organization conducting a demonstration project under this section, a per capita rate of payment for each class of individuals who are enrolled with such organization who are entitled to benefits under part A and enrolled under part B of title XVIII of the Social Security Act [
"(2)(A) Except as provided in paragraph (3), the per capita rate of payment under paragraph (1) shall be determined in accordance with this paragraph.
"(B) The Secretary shall define appropriate classes of members, based on age, disability status, and such other factors as the Secretary determines to be appropriate, so as to ensure actuarial equivalence. The Secretary may add to, modify, or substitute for such classes, if such changes will improve the determination of actuarial equivalence.
"(C) The per capita rate of payment under paragraph (1) for each such class shall be equal to 95 percent of the adjusted average per capita cost (as defined in subparagraph (D)) for that class.
"(D) For purposes of subparagraph (C), the term 'adjusted average per capita cost' means the average per capita amount that the Secretary estimates in advance (on the basis of actual experience, or retrospective actuarial equivalent based upon an adequate sample and other information and data, in a geographic area served by an eligible organization or in a similar area, with appropriate adjustments to assure actuarial equivalence) would be payable in any contract year for those services covered under parts A and B of title XVIII of the Social Security Act [
"(3) The Secretary shall, in consultation with providers, health policy experts, and consumer groups develop capitation-based reimbursement rates for such classes of individuals entitled to benefits under part A and enrolled under part B of the Social Security Act [probably means parts A and B of title XVIII of that Act,
"(4)(A) In the case of an eligible organization conducting a demonstration project under this section, the Secretary shall make monthly payments in advance and in accordance with the rate determined under paragraph (2) or (3), except as provided in subsection (e)(3)(B), to the organization for each individual enrolled with the organization.
"(B) The amount of payment under paragraph (2) or (3) may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled in the plan under this section and the number of such individuals estimated to be so enrolled in determining the amount of the advance payment.
"(5) The payment to an eligible organization under this section for individuals enrolled under this section with the organization and entitled to benefits under part A and enrolled under part B of the Social Security Act shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund established under such Act [
"(6) During any period in which an individual is enrolled with an eligible organization conducting a demonstration project under this section, only the eligible organization (and no other individual or person) shall be entitled to receive payments from the Secretary under this title [probably means title XVIII of the Social Security Act,
"(e)
"(1) In no case may the portion of an eligible organization's premium rate and the actuarial value of its deductibles, coinsurance, and copayments charged (with respect to community nursing and ambulatory care) to individuals who are enrolled under this section with the organization, exceed the actuarial value of the coinsurance and deductibles that would be applicable on the average to individuals enrolled under this section with the organization (or, if the Secretary finds that adequate data are not available to determine that actuarial value, the actuarial value of the coinsurance and deductibles applicable on the average to individuals in the area, in the State, or in the United States, eligible to enroll under this section with the organization, or other appropriate data) and entitled to benefits under part A and enrolled under part B of the Social Security Act [probably means parts A and B of title XVIII of that Act,
"(2) If the eligible organization provides to its members enrolled under this section services in addition to community nursing and ambulatory care, election of coverage for such additional services shall be optional for such members and such organization shall furnish such members with information on the portion of its premium rate or other charges applicable to such additional services. In no case may the sum of—
"(A) the portion of such organization's premium rate charged, with respect to such additional services, to members enrolled under this section, and
"(B) the actuarial value of its deductibles, coinsurance, and copayments charged, with respect to such services to such members
exceed the adjusted community rate for such services (as defined in section 1876(e)(3) of the Social Security Act [
"(3)(A) Subject to subparagraphs (B) and (C), each agreement to conduct a demonstration project under this section shall provide that if—
"(i) the adjusted community rate, referred to in paragraph (2), for community nursing and ambulatory care covered under parts A and B of title XVIII of the Social Security Act [
is less than
"(ii) the average of the per capita rates of payment to be made under subsection (d)(1) at the beginning of the 12-month period (as determined on such basis as the Secretary determines appropriate) described in such subsection for members enrolled under this section with the organization,
the eligible organization shall provide to such members the additional benefits described in section 1876(g)(3) of the Social Security Act [
"(B) Subparagraph (A) shall not apply with respect to any organization which elects to receive a lesser payment to the extent that there is no longer a difference between the average per capita payment and adjusted community rate (as so reduced).
"(C) An organization conducting a demonstration project under this section may provide (with the approval of the Secretary) that a part of the value of such additional benefits under subparagraph (A) be withheld and reserved by the Secretary as provided in section 1876(g)(5) of the Social Security Act [
"(4) The provisions of paragraphs (3), (5), and (6) of section 1876(g) of the Social Security Act [
"(5) Section 1876(e)(4) of the Social Security Act [
"(f)
"(g)
Study of AAPCC and ACR
Allowing Medicare Beneficiaries To Disenroll at Local Social Security Offices
Use of Reserve Funds
Phase-in of Enrollment Period by Secretary
Stabilization Fund; Establishment Limitation; Uses; Report to Congress
Study of Additional Benefits Selected by Eligible Organizations
Study Evaluating the Extent of, and Reasons for, Termination by Medicare Beneficiaries of Membership in Organizations With Contracts Under This Section
Reimbursement for Services
"(1) Notwithstanding the provisions of section 1814 and section 1833 of the Social Security Act [
"(2) With respect to individuals who are members of organizations which have entered into a risk-sharing contract with the Secretary pursuant to subsection (i)(2)(A) [of this section] prior to July 1, 1973, and who, although eligible to have payment made pursuant to section 1876 of such Act [
"(3) If the Secretary determines that the per capita cost of any such organization in any contract year for providing services to individuals described in paragraph (2), when combined with the cost of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such year for providing out-of-plan services to such individuals, is less than or greater than the adjusted average per capita cost (as defined in section 1876(a)(3) of such Act [
1 See References in Text note below.
2 So in original. Probably should be followed by a comma.
§1395nn. Limitation on certain physician referrals
(a) Prohibition of certain referrals
(1) In general
Except as provided in subsection (b), if a physician (or an immediate family member of such physician) has a financial relationship with an entity specified in paragraph (2), then—
(A) the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under this subchapter, and
(B) the entity may not present or cause to be presented a claim under this subchapter or bill to any individual, third party payor, or other entity for designated health services furnished pursuant to a referral prohibited under subparagraph (A).
(2) Financial relationship specified
For purposes of this section, a financial relationship of a physician (or an immediate family member of such physician) with an entity specified in this paragraph is—
(A) except as provided in subsections (c) and (d), an ownership or investment interest in the entity, or
(B) except as provided in subsection (e), a compensation arrangement (as defined in subsection (h)(1)) between the physician (or an immediate family member of such physician) and the entity.
An ownership or investment interest described in subparagraph (A) may be through equity, debt, or other means and includes an interest in an entity that holds an ownership or investment interest in any entity providing the designated health service.
(b) General exceptions to both ownership and compensation arrangement prohibitions
Subsection (a)(1) shall not apply in the following cases:
(1) Physicians' services
In the case of physicians' services (as defined in
(2) In-office ancillary services
In the case of services (other than durable medical equipment (excluding infusion pumps) and parenteral and enteral nutrients, equipment, and supplies)—
(A) that are furnished—
(i) personally by the referring physician, personally by a physician who is a member of the same group practice as the referring physician, or personally by individuals who are directly supervised by the physician or by another physician in the group practice, and
(ii)(I) in a building in which the referring physician (or another physician who is a member of the same group practice) furnishes physicians' services unrelated to the furnishing of designated health services, or
(II) in the case of a referring physician who is a member of a group practice, in another building which is used by the group practice—
(aa) for the provision of some or all of the group's clinical laboratory services, or
(bb) for the centralized provision of the group's designated health services (other than clinical laboratory services),
unless the Secretary determines other terms and conditions under which the provision of such services does not present a risk of program or patient abuse, and
(B) that are billed by the physician performing or supervising the services, by a group practice of which such physician is a member under a billing number assigned to the group practice, or by an entity that is wholly owned by such physician or such group practice,
if the ownership or investment interest in such services meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse. Such requirements shall, with respect to magnetic resonance imaging, computed tomography, positron emission tomography, and any other designated health services specified under subsection (h)(6)(D) that the Secretary determines appropriate, include a requirement that the referring physician inform the individual in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than a person described in subparagraph (A)(i) and provide such individual with a written list of suppliers (as defined in
(3) Prepaid plans
In the case of services furnished by an organization—
(A) with a contract under
(B) described in
(C) receiving payments on a prepaid basis, under a demonstration project under
(D) that is a qualified health maintenance organization (within the meaning of section 300e–9(d) 1 of this title) to an individual enrolled with the organization, or
(E) that is a Medicare+Choice organization under part C that is offering a coordinated care plan described in
(4) Other permissible exceptions
In the case of any other financial relationship which the Secretary determines, and specifies in regulations, does not pose a risk of program or patient abuse.
(5) Electronic prescribing
An exception established by regulation under
(c) General exception related only to ownership or investment prohibition for ownership in publicly traded securities and mutual funds
Ownership of the following shall not be considered to be an ownership or investment interest described in subsection (a)(2)(A):
(1) Ownership of investment securities (including shares or bonds, debentures, notes, or other debt instruments) which may be purchased on terms generally available to the public and which are—
(A)(i) securities listed on the New York Stock Exchange, the American Stock Exchange, or any regional exchange in which quotations are published on a daily basis, or foreign securities listed on a recognized foreign, national, or regional exchange in which quotations are published on a daily basis, or
(ii) traded under an automated interdealer quotation system operated by the National Association of Securities Dealers, and
(B) in a corporation that had, at the end of the corporation's most recent fiscal year, or on average during the previous 3 fiscal years, stockholder equity exceeding $75,000,000.
(2) Ownership of shares in a regulated investment company as defined in section 851(a) of the Internal Revenue Code of 1986, if such company had, at the end of the company's most recent fiscal year, or on average during the previous 3 fiscal years, total assets exceeding $75,000,000.
(d) Additional exceptions related only to ownership or investment prohibition
The following, if not otherwise excepted under subsection (b), shall not be considered to be an ownership or investment interest described in subsection (a)(2)(A):
(1) Hospitals in Puerto Rico
In the case of designated health services provided by a hospital located in Puerto Rico.
(2) Rural providers
In the case of designated health services furnished in a rural area (as defined in
(A) substantially all of the designated health services furnished by the entity are furnished to individuals residing in such a rural area;
(B) effective for the 18-month period beginning on December 8, 2003, the entity is not a specialty hospital (as defined in subsection (h)(7)); and
(C) in the case where the entity is a hospital, the hospital meets the requirements of paragraph (3)(D).
(3) Hospital ownership
In the case of designated health services provided by a hospital (other than a hospital described in paragraph (1)) if—
(A) the referring physician is authorized to perform services at the hospital;
(B) effective for the 18-month period beginning on December 8, 2003, the hospital is not a specialty hospital (as defined in subsection (h)(7));
(C) the ownership or investment interest is in the hospital itself (and not merely in a subdivision of the hospital); and
(D) the hospital meets the requirements described in subsection (i)(1) not later than 18 months after March 23, 2010.
(e) Exceptions relating to other compensation arrangements
The following shall not be considered to be a compensation arrangement described in subsection (a)(2)(B):
(1) Rental of office space; rental of equipment
(A) Office space
Payments made by a lessee to a lessor for the use of premises if—
(i) the lease is set out in writing, signed by the parties, and specifies the premises covered by the lease,
(ii) the space rented or leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease or rental and is used exclusively by the lessee when being used by the lessee, except that the lessee may make payments for the use of space consisting of common areas if such payments do not exceed the lessee's pro rata share of expenses for such space based upon the ratio of the space used exclusively by the lessee to the total amount of space (other than common areas) occupied by all persons using such common areas,
(iii) the lease provides for a term of rental or lease for at least 1 year,
(iv) the rental charges over the term of the lease are set in advance, are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties,
(v) the lease would be commercially reasonable even if no referrals were made between the parties, and
(vi) the lease meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(B) Equipment
Payments made by a lessee of equipment to the lessor of the equipment for the use of the equipment if—
(i) the lease is set out in writing, signed by the parties, and specifies the equipment covered by the lease,
(ii) the equipment rented or leased does not exceed that which is reasonable and necessary for the legitimate business purposes of the lease or rental and is used exclusively by the lessee when being used by the lessee,
(iii) the lease provides for a term of rental or lease of at least 1 year,
(iv) the rental charges over the term of the lease are set in advance, are consistent with fair market value, and are not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties,
(v) the lease would be commercially reasonable even if no referrals were made between the parties, and
(vi) the lease meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(C) Holdover lease arrangements
In the case of a holdover lease arrangement for the lease of office space or equipment, which immediately follows a lease arrangement described in subparagraph (A) for the use of such office space or subparagraph (B) for the use of such equipment and that expired after a term of at least 1 year, payments made by the lessee to the lessor pursuant to such holdover lease arrangement, if—
(i) the lease arrangement met the conditions of subparagraph (A) for the lease of office space or subparagraph (B) for the use of equipment when the arrangement expired;
(ii) the holdover lease arrangement is on the same terms and conditions as the immediately preceding arrangement; and
(iii) the holdover arrangement continues to satisfy the conditions of subparagraph (A) for the lease of office space or subparagraph (B) for the use of equipment.
(2) Bona fide employment relationships
Any amount paid by an employer to a physician (or an immediate family member of such physician) who has a bona fide employment relationship with the employer for the provision of services if—
(A) the employment is for identifiable services,
(B) the amount of the remuneration under the employment—
(i) is consistent with the fair market value of the services, and
(ii) is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician,
(C) the remuneration is provided pursuant to an agreement which would be commercially reasonable even if no referrals were made to the employer, and
(D) the employment meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
Subparagraph (B)(ii) shall not prohibit the payment of remuneration in the form of a productivity bonus based on services performed personally by the physician (or an immediate family member of such physician).
(3) Personal service arrangements
(A) In general
Remuneration from an entity under an arrangement (including remuneration for specific physicians' services furnished to a nonprofit blood center) if—
(i) the arrangement is set out in writing, signed by the parties, and specifies the services covered by the arrangement,
(ii) the arrangement covers all of the services to be provided by the physician (or an immediate family member of such physician) to the entity,
(iii) the aggregate services contracted for do not exceed those that are reasonable and necessary for the legitimate business purposes of the arrangement,
(iv) the term of the arrangement is for at least 1 year,
(v) the compensation to be paid over the term of the arrangement is set in advance, does not exceed fair market value, and except in the case of a physician incentive plan described in subparagraph (B), is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties,
(vi) the services to be performed under the arrangement do not involve the counseling or promotion or a business arrangement or other activity that violates any State or Federal law, and
(vii) the arrangement meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(B) Physician incentive plan exception
(i) In general
In the case of a physician incentive plan (as defined in clause (ii)) between a physician and an entity, the compensation may be determined in a manner (through a withhold, capitation, bonus, or otherwise) that takes into account directly or indirectly the volume or value of any referrals or other business generated between the parties, if the plan meets the following requirements:
(I) No specific payment is made directly or indirectly under the plan to a physician or a physician group as an inducement to reduce or limit medically necessary services provided with respect to a specific individual enrolled with the entity.
(II) In the case of a plan that places a physician or a physician group at substantial financial risk as determined by the Secretary pursuant to
(III) Upon request by the Secretary, the entity provides the Secretary with access to descriptive information regarding the plan, in order to permit the Secretary to determine whether the plan is in compliance with the requirements of this clause.
(ii) "Physician incentive plan" defined
For purposes of this subparagraph, the term "physician incentive plan" means any compensation arrangement between an entity and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to individuals enrolled with the entity.
(C) Holdover personal service arrangement
In the case of a holdover personal service arrangement, which immediately follows an arrangement described in subparagraph (A) that expired after a term of at least 1 year, remuneration from an entity pursuant to such holdover personal service arrangement, if—
(i) the personal service arrangement met the conditions of subparagraph (A) when the arrangement expired;
(ii) the holdover personal service arrangement is on the same terms and conditions as the immediately preceding arrangement; and
(iii) the holdover arrangement continues to satisfy the conditions of subparagraph (A).
(4) Remuneration unrelated to the provision of designated health services
In the case of remuneration which is provided by a hospital to a physician if such remuneration does not relate to the provision of designated health services.
(5) Physician recruitment
In the case of remuneration which is provided by a hospital to a physician to induce the physician to relocate to the geographic area served by the hospital in order to be a member of the medical staff of the hospital, if—
(A) the physician is not required to refer patients to the hospital,
(B) the amount of the remuneration under the arrangement is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician, and
(C) the arrangement meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(6) Isolated transactions
In the case of an isolated financial transaction, such as a one-time sale of property or practice, if—
(A) the requirements described in subparagraphs (B) and (C) of paragraph (2) are met with respect to the entity in the same manner as they apply to an employer, and
(B) the transaction meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(7) Certain group practice arrangements with a hospital
(A) 2 In general
An arrangement between a hospital and a group under which designated health services are provided by the group but are billed by the hospital if—
(i) with respect to services provided to an inpatient of the hospital, the arrangement is pursuant to the provision of inpatient hospital services under
(ii) the arrangement began before December 19, 1989, and has continued in effect without interruption since such date,
(iii) with respect to the designated health services covered under the arrangement, substantially all of such services furnished to patients of the hospital are furnished by the group under the arrangement,
(iv) the arrangement is pursuant to an agreement that is set out in writing and that specifies the services to be provided by the parties and the compensation for services provided under the agreement,
(v) the compensation paid over the term of the agreement is consistent with fair market value and the compensation per unit of services is fixed in advance and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties,
(vi) the compensation is provided pursuant to an agreement which would be commercially reasonable even if no referrals were made to the entity, and
(vii) the arrangement between the parties meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(8) Payments by a physician for items and services
Payments made by a physician—
(A) to a laboratory in exchange for the provision of clinical laboratory services, or
(B) to an entity as compensation for other items or services if the items or services are furnished at a price that is consistent with fair market value.
(9) Physician wellness programs
A bona fide mental health or behavioral health improvement or maintenance program offered to a physician by an entity, if—
(A) such program—
(i) consists of counseling, mental health services, a suicide prevention program, or a substance use disorder prevention and treatment program;
(ii) is made available to a physician for the primary purpose of preventing suicide, improving mental health and resiliency, or providing training in appropriate strategies to promote the mental health and resiliency of such physician;
(iii) is set out in a written policy, approved in advance of the operation of the program by the governing body of the entity providing such program (and which shall be updated accordingly in advance to substantial changes to the operation of such program), that includes—
(I) a description of the content and duration of the program;
(II) a description of the evidence-based support for the design of the program;
(III) the estimated cost of the program;
(IV) the personnel (including the qualifications of such personnel) conducting the program; and
(V) the method by which such entity will evaluate the use and success of the program;
(iv) is offered by an entity described in subparagraph (B) with a formal medical staff to all physicians who practice in the geographic area served by such entity, including physicians who hold bona fide appointments to the medical staff of such entity or otherwise have clinical privileges at such entity;
(v) is offered to all such physicians on the same terms and conditions and without regard to the volume or value of referrals or other business generated by a physician for such entity;
(vi) is evidence-based and conducted by a qualified health professional; and
(vii) meets such other requirements the Secretary may impose by regulation as needed to protect against program or patient abuse;
(B) such entity is—
(i) a hospital;
(ii) an ambulatory surgical center;
(iii) a community health center;
(iv) a rural emergency hospital;
(v) a rural health clinic;
(vi) a skilled nursing facility; or
(vii) a similar entity, as determined by the Secretary; and
(C) neither the provision of such program, nor the value of such program, are contingent upon the number or value of referrals made by a physician to such entity or the amount or value of other business generated by such physician for the entity.
(f) Reporting requirements
Each entity providing covered items or services for which payment may be made under this subchapter shall provide the Secretary with the information concerning the entity's ownership, investment, and compensation arrangements, including—
(1) the covered items and services provided by the entity, and
(2) the names and unique physician identification numbers of all physicians with an ownership or investment interest (as described in subsection (a)(2)(A)), or with a compensation arrangement (as described in subsection (a)(2)(B)), in the entity, or whose immediate relatives have such an ownership or investment interest or who have such a compensation relationship with the entity.
Such information shall be provided in such form, manner, and at such times as the Secretary shall specify. The requirement of this subsection shall not apply to designated health services provided outside the United States or to entities which the Secretary determines provides 3 services for which payment may be made under this subchapter very infrequently.
(g) Sanctions
(1) Denial of payment
No payment may be made under this subchapter for a designated health service which is provided in violation of subsection (a)(1).
(2) Requiring refunds for certain claims
If a person collects any amounts that were billed in violation of subsection (a)(1), the person shall be liable to the individual for, and shall refund on a timely basis to the individual, any amounts so collected.
(3) Civil money penalty and exclusion for improper claims
Any person that presents or causes to be presented a bill or a claim for a service that such person knows or should know is for a service for which payment may not be made under paragraph (1) or for which a refund has not been made under paragraph (2) shall be subject to a civil money penalty of not more than $15,000 for each such service. The provisions of
(4) Civil money penalty and exclusion for circumvention schemes
Any physician or other entity that enters into an arrangement or scheme (such as a cross-referral arrangement) which the physician or entity knows or should know has a principal purpose of assuring referrals by the physician to a particular entity which, if the physician directly made referrals to such entity, would be in violation of this section, shall be subject to a civil money penalty of not more than $100,000 for each such arrangement or scheme. The provisions of
(5) Failure to report information
Any person who is required, but fails, to meet a reporting requirement of subsection (f) is subject to a civil money penalty of not more than $10,000 for each day for which reporting is required to have been made. The provisions of
(6) Advisory opinions
(A) In general
The Secretary shall issue written advisory opinions concerning whether a referral relating to designated health services (other than clinical laboratory services) is prohibited under this section. Each advisory opinion issued by the Secretary shall be binding as to the Secretary and the party or parties requesting the opinion.
(B) Application of certain rules
The Secretary shall, to the extent practicable, apply the rules under subsections (b)(3) and (b)(4) and take into account the regulations promulgated under subsection (b)(5) of
(C) Regulations
In order to implement this paragraph in a timely manner, the Secretary may promulgate regulations that take effect on an interim basis, after notice and pending opportunity for public comment.
(D) Applicability
This paragraph shall apply to requests for advisory opinions made after the date which is 90 days after August 5, 1997, and before the close of the period described in
(h) Definitions and special rules
For purposes of this section:
(1) Compensation arrangement; remuneration
(A) The term "compensation arrangement" means any arrangement involving any remuneration between a physician (or an immediate family member of such physician) and an entity other than an arrangement involving only remuneration described in subparagraph (C).
(B) The term "remuneration" includes any remuneration, directly or indirectly, overtly or covertly, in cash or in kind.
(C) Remuneration described in this subparagraph is any remuneration consisting of any of the following:
(i) The forgiveness of amounts owed for inaccurate tests or procedures, mistakenly performed tests or procedures, or the correction of minor billing errors.
(ii) The provision of items, devices, or supplies that are used solely to—
(I) collect, transport, process, or store specimens for the entity providing the item, device, or supply, or
(II) order or communicate the results of tests or procedures for such entity.
(iii) A payment made by an insurer or a self-insured plan to a physician to satisfy a claim, submitted on a fee for service basis, for the furnishing of health services by that physician to an individual who is covered by a policy with the insurer or by the self-insured plan, if—
(I) the health services are not furnished, and the payment is not made, pursuant to a contract or other arrangement between the insurer or the plan and the physician,
(II) the payment is made to the physician on behalf of the covered individual and would otherwise be made directly to such individual,
(III) the amount of the payment is set in advance, does not exceed fair market value, and is not determined in a manner that takes into account directly or indirectly the volume or value of any referrals, and
(IV) the payment meets such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.
(D)
(E)
(i) not later than 90 consecutive calendar days immediately following the date on which the compensation arrangement became noncompliant, the parties obtain the required signatures; and
(ii) the compensation arrangement otherwise complies with all criteria of the applicable exception.
(2) Employee
An individual is considered to be "employed by" or an "employee" of an entity if the individual would be considered to be an employee of the entity under the usual common law rules applicable in determining the employer-employee relationship (as applied for purposes of section 3121(d)(2) of the Internal Revenue Code of 1986).
(3) Fair market value
The term "fair market value" means the value in arms length transactions, consistent with the general market value, and, with respect to rentals or leases, the value of rental property for general commercial purposes (not taking into account its intended use) and, in the case of a lease of space, not adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor where the lessor is a potential source of patient referrals to the lessee.
(4) Group practice
(A) Definition of group practice
The term "group practice" means a group of 2 or more physicians legally organized as a partnership, professional corporation, foundation, not-for-profit corporation, faculty practice plan, or similar association—
(i) in which each physician who is a member of the group provides substantially the full range of services which the physician routinely provides, including medical care, consultation, diagnosis, or treatment, through the joint use of shared office space, facilities, equipment and personnel,
(ii) for which substantially all of the services of the physicians who are members of the group are provided through the group and are billed under a billing number assigned to the group and amounts so received are treated as receipts of the group,
(iii) in which the overhead expenses of and the income from the practice are distributed in accordance with methods previously determined,
(iv) except as provided in subparagraph (B)(i), in which no physician who is a member of the group directly or indirectly receives compensation based on the volume or value of referrals by the physician,
(v) in which members of the group personally conduct no less than 75 percent of the physician-patient encounters of the group practice, and
(vi) which meets such other standards as the Secretary may impose by regulation.
(B) Special rules
(i) Profits and productivity bonuses
A physician in a group practice may be paid a share of overall profits of the group, or a productivity bonus based on services personally performed or services incident to such personally performed services, so long as the share or bonus is not determined in any manner which is directly related to the volume or value of referrals by such physician.
(ii) Faculty practice plans
In the case of a faculty practice plan associated with a hospital, institution of higher education, or medical school with an approved medical residency training program in which physician members may provide a variety of different specialty services and provide professional services both within and outside the group, as well as perform other tasks such as research, subparagraph (A) shall be applied only with respect to the services provided within the faculty practice plan.
(5) Referral; referring physician
(A) Physicians' services
Except as provided in subparagraph (C), in the case of an item or service for which payment may be made under part B, the request by a physician for the item or service, including the request by a physician for a consultation with another physician (and any test or procedure ordered by, or to be performed by (or under the supervision of) that other physician), constitutes a "referral" by a "referring physician".
(B) Other items
Except as provided in subparagraph (C), the request or establishment of a plan of care by a physician which includes the provision of the designated health service constitutes a "referral" by a "referring physician".
(C) Clarification respecting certain services integral to a consultation by certain specialists
A request by a pathologist for clinical diagnostic laboratory tests and pathological examination services, a request by a radiologist for diagnostic radiology services, and a request by a radiation oncologist for radiation therapy, if such services are furnished by (or under the supervision of) such pathologist, radiologist, or radiation oncologist pursuant to a consultation requested by another physician does not constitute a "referral" by a "referring physician".
(6) Designated health services
The term "designated health services" means any of the following items or services:
(A) Clinical laboratory services.
(B) Physical therapy services.
(C) Occupational therapy services.
(D) Radiology services, including magnetic resonance imaging, computerized axial tomography scans, and ultrasound services.
(E) Radiation therapy services and supplies.
(F) Durable medical equipment and supplies.
(G) Parenteral and enteral nutrients, equipment, and supplies.
(H) Prosthetics, orthotics, and prosthetic devices and supplies.
(I) Home health services.
(J) Outpatient prescription drugs.
(K) Inpatient and outpatient hospital services.
(L) Outpatient speech-language pathology services.
(7) Specialty hospital
(A) In general
For purposes of this section, except as provided in subparagraph (B), the term "specialty hospital" means a subsection (d) hospital (as defined in
(i) Patients with a cardiac condition.
(ii) Patients with an orthopedic condition.
(iii) Patients receiving a surgical procedure.
(iv) Any other specialized category of services that the Secretary designates as inconsistent with the purpose of permitting physician ownership and investment interests in a hospital under this section.
(B) Exception
For purposes of this section, the term "specialty hospital" does not include any hospital—
(i) determined by the Secretary—
(I) to be in operation before November 18, 2003; or
(II) under development as of such date;
(ii) for which the number of physician investors at any time on or after such date is no greater than the number of such investors as of such date;
(iii) for which the type of categories described in subparagraph (A) at any time on or after such date is no different than the type of such categories as of such date;
(iv) for which any increase in the number of beds occurs only in the facilities on the main campus of the hospital and does not exceed 50 percent of the number of beds in the hospital as of November 18, 2003, or 5 beds, whichever is greater; and
(v) that meets such other requirements as the Secretary may specify.
(i) Requirements for hospitals to qualify for rural provider and hospital exception to ownership or investment prohibition
(1) Requirements described
For purposes of subsection (d)(3)(D), the requirements described in this paragraph for a hospital are as follows:
(A) Provider agreement
The hospital had—
(i) physician ownership or investment on December 31, 2010; and
(ii) a provider agreement under
(B) Limitation on expansion of facility capacity
Except as provided in paragraph (3), the number of operating rooms, procedure rooms, and beds for which the hospital is licensed at any time on or after March 23, 2010, is no greater than the number of operating rooms, procedure rooms, and beds for which the hospital is licensed as of such date.
(C) Preventing conflicts of interest
(i) The hospital submits to the Secretary an annual report containing a detailed description of—
(I) the identity of each physician owner or investor and any other owners or investors of the hospital; and
(II) the nature and extent of all ownership and investment interests in the hospital.
(ii) The hospital has procedures in place to require that any referring physician owner or investor discloses to the patient being referred, by a time that permits the patient to make a meaningful decision regarding the receipt of care, as determined by the Secretary—
(I) the ownership or investment interest, as applicable, of such referring physician in the hospital; and
(II) if applicable, any such ownership or investment interest of the treating physician.
(iii) The hospital does not condition any physician ownership or investment interests either directly or indirectly on the physician owner or investor making or influencing referrals to the hospital or otherwise generating business for the hospital.
(iv) The hospital discloses the fact that the hospital is partially owned or invested in by physicians—
(I) on any public website for the hospital; and
(II) in any public advertising for the hospital.
(D) Ensuring bona fide investment
(i) The percentage of the total value of the ownership or investment interests held in the hospital, or in an entity whose assets include the hospital, by physician owners or investors in the aggregate does not exceed such percentage as of March 23, 2010.
(ii) Any ownership or investment interests that the hospital offers to a physician owner or investor are not offered on more favorable terms than the terms offered to a person who is not a physician owner or investor.
(iii) The hospital (or any owner or investor in the hospital) does not directly or indirectly provide loans or financing for any investment in the hospital by a physician owner or investor.
(iv) The hospital (or any owner or investor in the hospital) does not directly or indirectly guarantee a loan, make a payment toward a loan, or otherwise subsidize a loan, for any individual physician owner or investor or group of physician owners or investors that is related to acquiring any ownership or investment interest in the hospital.
(v) Ownership or investment returns are distributed to each owner or investor in the hospital in an amount that is directly proportional to the ownership or investment interest of such owner or investor in the hospital.
(vi) Physician owners and investors do not receive, directly or indirectly, any guaranteed receipt of or right to purchase other business interests related to the hospital, including the purchase or lease of any property under the control of other owners or investors in the hospital or located near the premises of the hospital.
(vii) The hospital does not offer a physician owner or investor the opportunity to purchase or lease any property under the control of the hospital or any other owner or investor in the hospital on more favorable terms than the terms offered to an individual who is not a physician owner or investor.
(E) Patient safety
(i) Insofar as the hospital admits a patient and does not have any physician available on the premises to provide services during all hours in which the hospital is providing services to such patient, before admitting the patient—
(I) the hospital discloses such fact to a patient; and
(II) following such disclosure, the hospital receives from the patient a signed acknowledgment that the patient understands such fact.
(ii) The hospital has the capacity to—
(I) provide assessment and initial treatment for patients; and
(II) refer and transfer patients to hospitals with the capability to treat the needs of the patient involved.
(F) Limitation on application to certain converted facilities
The hospital was not converted from an ambulatory surgical center to a hospital on or after March 23, 2010.
(2) Publication of information reported
The Secretary shall publish, and update on an annual basis, the information submitted by hospitals under paragraph (1)(C)(i) on the public Internet website of the Centers for Medicare & Medicaid Services.
(3) Exception to prohibition on expansion of facility capacity
(A) Process
(i) Establishment
The Secretary shall establish and implement a process under which a hospital that is an applicable hospital (as defined in subparagraph (E)) or is a high Medicaid facility described in subparagraph (F) may apply for an exception from the requirement under paragraph (1)(B).
(ii) Opportunity for community input
The process under clause (i) shall provide individuals and entities in the community in which the applicable hospital applying for an exception is located with the opportunity to provide input with respect to the application.
(iii) Timing for implementation
The Secretary shall implement the process under clause (i) on February 1, 2012.
(iv) Regulations
Not later than January 1, 2012, the Secretary shall promulgate regulations to carry out the process under clause (i).
(B) Frequency
The process described in subparagraph (A) shall permit an applicable hospital to apply for an exception up to once every 2 years.
(C) Permitted increase
(i) In general
Subject to clause (ii) and subparagraph (D), an applicable hospital granted an exception under the process described in subparagraph (A) may increase the number of operating rooms, procedure rooms, and beds for which the applicable hospital is licensed above the baseline number of operating rooms, procedure rooms, and beds of the applicable hospital (or, if the applicable hospital has been granted a previous exception under this paragraph, above the number of operating rooms, procedure rooms, and beds for which the hospital is licensed after the application of the most recent increase under such an exception).
(ii) 100 percent increase limitation
The Secretary shall not permit an increase in the number of operating rooms, procedure rooms, and beds for which an applicable hospital is licensed under clause (i) to the extent such increase would result in the number of operating rooms, procedure rooms, and beds for which the applicable hospital is licensed exceeding 200 percent of the baseline number of operating rooms, procedure rooms, and beds of the applicable hospital.
(iii) Baseline number of operating rooms, procedure rooms, and beds
In this paragraph, the term "baseline number of operating rooms, procedure rooms, and beds" means the number of operating rooms, procedure rooms, and beds for which the applicable hospital is licensed as of March 23, 2010 (or, in the case of a hospital that did not have a provider agreement in effect as of such date but does have such an agreement in effect on December 31, 2010, the effective date of such provider agreement).
(D) Increase limited to facilities on the main campus of the hospital
Any increase in the number of operating rooms, procedure rooms, and beds for which an applicable hospital is licensed pursuant to this paragraph may only occur in facilities on the main campus of the applicable hospital.
(E) Applicable hospital
In this paragraph, the term "applicable hospital" means a hospital—
(i) that is located in a county in which the percentage increase in the population during the most recent 5-year period (as of the date of the application under subparagraph (A)) is at least 150 percent of the percentage increase in the population growth of the State in which the hospital is located during that period, as estimated by Bureau of the Census;
(ii) whose annual percent of total inpatient admissions that represent inpatient admissions under the program under subchapter XIX is equal to or greater than the average percent with respect to such admissions for all hospitals located in the county in which the hospital is located;
(iii) that does not discriminate against beneficiaries of Federal health care programs and does not permit physicians practicing at the hospital to discriminate against such beneficiaries;
(iv) that is located in a State in which the average bed capacity in the State is less than the national average bed capacity; and
(v) that has an average bed occupancy rate that is greater than the average bed occupancy rate in the State in which the hospital is located.
(F) High Medicaid facility described
A high Medicaid facility described in this subparagraph is a hospital that—
(i) is not the sole hospital in a county;
(ii) with respect to each of the 3 most recent years for which data are available, has an annual percent of total inpatient admissions that represent inpatient admissions under subchapter XIX that is estimated to be greater than such percent with respect to such admissions for any other hospital located in the county in which the hospital is located; and
(iii) meets the conditions described in subparagraph (E)(iii).
(G) Procedure rooms
In this subsection, the term "procedure rooms" includes rooms in which catheterizations, angiographies, angiograms, and endoscopies are performed, except such term shall not include emergency rooms or departments (exclusive of rooms in which catheterizations, angiographies, angiograms, and endoscopies are performed).
(H) Publication of final decisions
Not later than 60 days after receiving a complete application under this paragraph, the Secretary shall publish in the Federal Register the final decision with respect to such application.
(I) Limitation on review
There shall be no administrative or judicial review under
(4) Collection of ownership and investment information
For purposes of subparagraphs (A)(i) and (D)(i) of paragraph (1), the Secretary shall collect physician ownership and investment information for each hospital.
(5) Physician owner or investor defined
For purposes of this subsection, the term "physician owner or investor" means a physician (or an immediate family member of such physician) with a direct or an indirect ownership or investment interest in the hospital.
(6) Clarification
Nothing in this subsection shall be construed as preventing the Secretary from revoking a hospital's provider agreement if not in compliance with regulations implementing
(Aug. 14, 1935, ch. 531, title XVIII, §1877, as added
Editorial Notes
References in Text
Section 222(a) of the Social Security Amendments of 1972, referred to in subsec. (b)(3)(C), is section 222(a) of
The Internal Revenue Code, referred to in subsecs. (c)(2) and (h)(2), is classified generally to Title 26, Internal Revenue Code.
Prior Provisions
A prior section 1395nn, act Aug. 14, 1935, ch. 531, title XVIII, §1877, as added and amended Oct. 30, 1972,
Amendments
2022—Subsec. (e)(9).
2018—Subsec. (e)(1)(C).
Subsec. (e)(3)(C).
Subsec. (h)(1)(D).
Subsec. (h)(1)(E).
2010—Subsec. (b)(2).
Subsec. (d)(2)(C).
Subsec. (d)(3)(D).
Subsec. (i).
Subsec. (i)(1)(A)(i).
Subsec. (i)(3)(A)(i).
Subsec. (i)(3)(A)(iii).
Subsec. (i)(3)(A)(iv).
Subsec. (i)(3)(C)(iii).
Subsec. (i)(3)(F) to (I).
2008—Subsec. (h)(6)(L).
2003—Subsec. (b)(5).
Subsec. (d)(2).
Subsec. (d)(3)(B), (C).
Subsec. (h)(7).
1999—Subsec. (b)(3)(C).
Subsec. (b)(3)(D).
Subsec. (b)(3)(E).
1997—Subsec. (g)(6).
1994—Subsec. (f).
Subsec. (f)(2).
Subsec. (h)(6).
1993—Subsecs. (a) to (e).
Subsec. (f).
Subsec. (g)(1).
Subsec. (h).
1990—Subsec. (b)(4), (5).
Subsec. (f).
Subsec. (f)(2).
Subsec. (g)(5).
Subsec. (h)(6).
Subsec. (h)(7).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
Amendment by
Effective Date of 1999 Amendment
Effective Date of 1994 Amendment
Effective Date of 1993 Amendment
"(1)
"(A) made on or after January 1, 1992, in the case of clinical laboratory services, and
"(B) made after December 31, 1994, in the case of other designated health services.
"(2)
"(A) the second sentence of subsection (a)(2), and subsections (b)(2)(B) and (d)(2), of section 1877 of the Social Security Act [
"(B) section 1877(b)(4) of the Social Security Act [
"(C) the requirements of section 1877(c)(2) of the Social Security Act [
"(D) section 1877(e)(3) of the Social Security Act [
"(E) the requirements of clauses (iv) and (v) of section 1877(h)(4)(A), and of clause (i) of section 1877(h)(4)(B), of the Social Security Act [
"(F) section 1877(h)(4)(B) of the Social Security Act [
[
Effective Date of 1990 Amendment
Effective Date
"(1) Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending
"(2) The reporting requirement of section 1877(f) of the Social Security Act [
Deadline for Certain Regulations
Enforcement
"(1)
"(2)
Medicare Self-Referral Disclosure Protocol
"(a)
"(1)
"(A) a specific person, official, or office to whom such disclosures shall be made; and
"(B) instruction on the implication of the SRDP on corporate integrity agreements and corporate compliance agreements.
"(2)
"(3)
"(b)
"(1) The nature and extent of the improper or illegal practice.
"(2) The timeliness of such self-disclosure.
"(3) The cooperation in providing additional information related to the disclosure.
"(4) Such other factors as the Secretary considers appropriate.
"(c)
"(1) the number of health care providers of services and suppliers making disclosures pursuant to the SRDP;
"(2) the amounts collected pursuant to the SRDP;
"(3) the types of violations reported under the SRDP; and
"(4) such other information as may be necessary to evaluate the impact of this section."
Application of Exception for Hospitals Under Development
"(1) whether architectural plans have been completed, funding has been received, zoning requirements have been met, and necessary approvals from appropriate State agencies have been received; and
"(2) any other evidence the Secretary determines would indicate whether a hospital is under development as of such date."
Studies
"(1)
"(A) any differences in the costs of health care services furnished to patients by physician-owned specialty hospitals and the costs of such services furnished by local full-service community hospitals within specific diagnosis-related groups;
"(B) the extent to which specialty hospitals, relative to local full-service community hospitals, treat patients in certain diagnosis-related groups within a category, such as cardiology, and an analysis of the selection;
"(C) the financial impact of physician-owned specialty hospitals on local full-service community hospitals;
"(D) how the current diagnosis-related group system should be updated to better reflect the cost of delivering care in a hospital setting; and
"(E) the proportions of payments received, by type of payer, between the specialty hospitals and local full-service community hospitals.
"(2) HHS
"(A) to determine the percentage of patients admitted to physician-owned specialty hospitals who are referred by physicians with an ownership interest;
"(B) to determine the referral patterns of physician owners, including the percentage of patients they referred to physician-owned specialty hospitals and the percentage of patients they referred to local full-service community hospitals for the same condition;
"(C) to compare the quality of care furnished in physician-owned specialty hospitals and in local full-service community hospitals for similar conditions and patient satisfaction with such care; and
"(D) to assess the differences in uncompensated care, as defined by the Secretary, between the specialty hospital and local full-service community hospitals, and the relative value of any tax exemption available to such hospitals.
"(3)
GAO Study of Ownership by Referring Physicians
Statistical Summary of Comparative Utilization
1 See References in Text note below.
2 So in original. No subpar. (B) has been enacted.
3 So in original. Probably should be "provide".
§1395oo. Provider Reimbursement Review Board
(a) Establishment
Any provider of services which has filed a required cost report within the time specified in regulations may obtain a hearing with respect to such cost report by a Provider Reimbursement Review Board (hereinafter referred to as the "Board") which shall be established by the Secretary in accordance with subsection (h) and (except as provided in subsection (g)(2)) any hospital which receives payments in amounts computed under subsection (b) or (d) of
(1) such provider—
(A)(i) is dissatisfied with a final determination of the organization serving as its fiscal intermediary pursuant to
(ii) is dissatisfied with a final determination of the Secretary as to the amount of the payment under subsection (b) or (d) of
(B) has not received such final determination from such intermediary on a timely basis after filing such report, where such report complied with the rules and regulations of the Secretary relating to such report, or
(C) has not received such final determination on a timely basis after filing a supplementary cost report, where such cost report did not so comply and such supplementary cost report did so comply,
(2) the amount in controversy is $10,000 or more, and
(3) such provider files a request for a hearing within 180 days after notice of the intermediary's final determination under paragraph (1)(A)(i), or with respect to appeals under paragraph (1)(A)(ii), 180 days after notice of the Secretary's final determination, or with respect to appeals pursuant to paragraph (1) (B) or (C), within 180 days after notice of such determination would have been received if such determination had been made on a timely basis.
(b) Appeals by groups
The provisions of subsection (a) shall apply to any group of providers of services if each provider of services in such group would, upon the filing of an appeal (but without regard to the $10,000 limitation), be entitled to such a hearing, but only if the matters in controversy involve a common question of fact or interpretation of law or regulations and the amount in controversy is, in the aggregate, $50,000 or more.
(c) Right to counsel; rules of evidence
At such hearing, the provider of services shall have the right to be represented by counsel, to introduce evidence, and to examine and cross-examine witnesses. Evidence may be received at any such hearing even though inadmissible under rules of evidence applicable to court procedure.
(d) Decisions of Board
A decision by the Board shall be based upon the record made at such hearing, which shall include the evidence considered by the intermediary and such other evidence as may be obtained or received by the Board, and shall be supported by substantial evidence when the record is viewed as a whole. The Board shall have the power to affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a cost report and to make any other revisions on matters covered by such cost report (including revisions adverse to the provider of services) even though such matters were not considered by the intermediary in making such final determination.
(e) Rules and regulations
The Board shall have full power and authority to make rules and establish procedures, not inconsistent with the provisions of this subchapter or regulations of the Secretary, which are necessary or appropriate to carry out the provisions of this section. In the course of any hearing the Board may administer oaths and affirmations. The provisions of subsections (d) and (e) of
(f) Finality of decision; judicial review; determinations of Board authority; jurisdiction; venue; interest on amount in controversy
(1) A decision of the Board shall be final unless the Secretary, on his own motion, and within 60 days after the provider of services is notified of the Board's decision, reverses, affirms, or modifies the Board's decision. Providers shall have the right to obtain judicial review of any final decision of the Board, or of any reversal, affirmance, or modification by the Secretary, by a civil action commenced within 60 days of the date on which notice of any final decision by the Board or of any reversal, affirmance, or modification by the Secretary is received. Providers shall also have the right to obtain judicial review of any action of the fiscal intermediary which involves a question of law or regulations relevant to the matters in controversy whenever the Board determines (on its own motion or at the request of a provider of services as described in the following sentence) that it is without authority to decide the question, by a civil action commenced within sixty days of the date on which notification of such determination is received. If a provider of services may obtain a hearing under subsection (a) and has filed a request for such a hearing, such provider may file a request for a determination by the Board of its authority to decide the question of law or regulations relevant to the matters in controversy (accompanied by such documents and materials as the Board shall require for purposes of rendering such determination). The Board shall render such determination in writing within thirty days after the Board receives the request and such accompanying documents and materials, and the determination shall be considered a final decision and not subject to review by the Secretary. If the Board fails to render such determination within such period, the provider may bring a civil action (within sixty days of the end of such period) with respect to the matter in controversy contained in such request for a hearing. Such action shall be brought in the district court of the United States for the judicial district in which the provider is located (or, in an action brought jointly by several providers, the judicial district in which the greatest number of such providers are located) or in the District Court for the District of Columbia and shall be tried pursuant to the applicable provisions under
(2) Where a provider seeks judicial review pursuant to paragraph (1), the amount in controversy shall be subject to annual interest beginning on the first day of the first month beginning after the 180-day period as determined pursuant to subsection (a)(3) and equal to the rate of interest on obligations issued for purchase by the Federal Hospital Insurance Trust Fund for the month in which the civil action authorized under paragraph (1) is commenced, to be awarded by the reviewing court in favor of the prevailing party.
(3) No interest awarded pursuant to paragraph (2) shall be deemed income or cost for the purposes of determining reimbursement due providers under this chapter.
(g) Certain findings not reviewable
(1) The finding of a fiscal intermediary that no payment may be made under this subchapter for any expenses incurred for items or services furnished to an individual because such items or services are listed in
(2) The determinations and other decisions described in
(h) Composition and compensation
The Board shall be composed of five members appointed by the Secretary without regard to the provisions of title 5 governing appointments in the competitive services. Two of such members shall be representative of providers of services. All of the members of the Board shall be persons knowledgeable in the field of payment of providers of services, and at least one of them shall be a certified public accountant. Members of the Board shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding the rate specified (at the time the service involved is rendered by such members) for grade GS–18 in
(i) Technical and clerical assistance
The Board is authorized to engage such technical assistance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Board such secretarial, clerical, and other assistance as the Board may require to carry out its functions.
(j) "Provider of services" defined
In this section, the term "provider of services" includes a rural health clinic and a Federally qualified health center.
(Aug. 14, 1935, ch. 531, title XVIII, §1878, as added
Editorial Notes
Amendments
1993—Subsec. (f)(2).
1990—Subsec. (j).
1984—Subsec. (c).
Subsec. (e).
Subsec. (f)(1).
1983—Subsec. (a).
Subsec. (a)(1)(A).
Subsec. (a)(3).
Subsec. (f)(1).
Subsec. (g).
Subsec. (h).
1980—Subsec. (f)(1).
1974—Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4161(a)(6) of
Amendment by section 4161(b)(4) of
Effective Date of 1984 Amendment
Amendment by section 2354(b)(39), (40) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1974 Amendment
Effective Date
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Review of Provider Reimbursement Review Board Decisions
"(1) the amendments made by section 602(h)(2)(A) of that Act [amending this section] shall be effective with respect to any appeal or action brought on or after April 20, 1983; and
"(2) the amendments made by section 602(h)(2)(B) of that Act [amending this section] shall be effective with respect to any appeal or action brought on or after the date of the enactment of this Act [July 18, 1984]."
§1395pp. Limitation on liability where claims are disallowed
(a) Conditions prerequisite to payment for items and services notwithstanding determination of disallowance
Where—
(1) a determination is made that, by reason of section 1395y(a)(1) or (9) of this title or by reason of a coverage denial described in subsection (g), payment may not be made under part A or part B of this subchapter for any expenses incurred for items or services furnished an individual by a provider of services or by another person pursuant to an assignment under
(2) both such individual and such provider of services or such other person, as the case may be, did not know, and could not reasonably have been expected to know, that payment would not be made for such items or services under such part A or part B,
then to the extent permitted by this subchapter, payment shall, notwithstanding such determination, be made for such items or services (and for such period of time as the Secretary finds will carry out the objectives of this subchapter), as though section 1395y(a)(1) and
(b) Knowledge of person or provider that payment could not be made; indemnification of individual
In any case in which the provisions of paragraphs (1) and (2) of subsection (a) are met, except that such provider or such other person, as the case may be, knew, or could be expected to know, that payment for such services or items could not be made under such part A or part B, then the Secretary shall, upon proper application filed within such time as may be prescribed in regulations, indemnify the individual (referred to in such paragraphs) for any payments received from such individual by such provider or such other person, as the case may be, for such items or services. Any payments made by the Secretary as indemnification shall be deemed to have been made to such provider or such other person, as the case may be, and shall be treated as overpayments, recoverable from such provider or such other person, as the case may be, under applicable provisions of law. In each such case the Secretary shall notify such individual of the conditions under which indemnification is made and in the case of comparable situations arising thereafter with respect to such individual, he shall, by reason of such notice (or similar notices provided before the enactment of this section), be deemed to have knowledge that payment cannot be made for such items or services. No item or service for which an individual is indemnified under this subsection shall be taken into account in applying any limitation on the amount of items and services for which payment may be made to or on behalf of the individual under this subchapter.
(c) Knowledge of both provider and individual to whom items or services were furnished that payment could not be made
No payments shall be made under this subchapter in any cases in which the provisions of paragraph (1) of subsection (a) are met, but both the individual to whom the items or services were furnished and the provider of service or other person, as the case may be, who furnished the items or services knew, or could reasonably have been expected to know, that payment could not be made for items or services under part A or part B by reason of section 1395y(a)(1) or (a)(9) of this title or by reason of a coverage denial described in subsection (g).
(d) Exercise of rights
In any case arising under subsection (b) (but without regard to whether payments have been made by the individual to the provider or other person) or subsection (c), the provider or other person shall have the same rights that an individual has under
(e) Payment where beneficiary not at fault
Where payment for inpatient hospital services or extended care services may not be made under part A of this subchapter on behalf of an individual entitled to benefits under such part solely because of an unintentional, inadvertent, or erroneous action with respect to the transfer of such individual from a hospital or skilled nursing facility that meets the requirements of section 1395x(e) or (j) of this title by such a provider of services acting in good faith in accordance with the advice of a utilization review committee, quality improvement organization, or fiscal intermediary, or on the basis of a clearly erroneous administrative decision by a provider of services, the Secretary shall take such action with respect to the payment of such benefits as he determines may be necessary to correct the effects of such unintentional, inadvertent, or erroneous action.
(f) Presumption with respect to coverage denial; rebuttal; requirements; "fiscal intermediary" defined
(1) A home health agency which meets the applicable requirements of paragraphs (3) and (4) shall be presumed to meet the requirement of subsection (a)(2).
(2) The presumption of paragraph (1) with respect to specific services may be rebutted by actual or imputed knowledge of the facts described in subsection (a)(2), including any of the following:
(A) Notice by the fiscal intermediary of the fact that payment may not be made under this subchapter with respect to the services.
(B) It is clear and obvious that the provider should have known at the time the services were furnished that they were excluded from coverage.
(3) The requirements of this paragraph are as follows:
(A) The agency complies with requirements of the Secretary under this subchapter respecting timely submittal of bills for payment and medical documentation.
(B) The agency program has reasonable procedures to notify promptly each patient (and the patient's physician) where it is determined that a patient is being or will be furnished items or services which are excluded from coverage under this subchapter.
(4)(A) The requirement of this paragraph is that, on the basis of bills submitted by a home health agency during the previous quarter, the rate of denial of bills for the agency by reason of a coverage denial described in subsection (g) does not exceed 2.5 percent, computed based on visits for home health services billed.
(B) For purposes of determining the rate of denial of bills for a home health agency under subparagraph (A), a bill shall not be considered to be denied until the expiration of the 60-day period that begins on the date such bill is denied by the fiscal intermediary, or, with respect to such a denial for which the agency requests reconsideration, until the fiscal intermediary issues a decision denying payment for such bill.
(5) In this subsection, the term "fiscal intermediary" means, with respect to a home health agency, an agency or organization with an agreement under
(6) The Secretary shall monitor the proportion of denied bills submitted by home health agencies for which reconsideration is requested, and shall notify Congress if the proportion of denials reversed upon reconsideration increases significantly.
(g) Coverage denial defined
The coverage denial described in this subsection is—
(1) with respect to the provision of home health services to an individual, a failure to meet the requirements of
(A) is or was not confined to his home, or
(B) does or did not need skilled nursing care on an intermittent basis; and
(2) with respect to the provision of hospice care to an individual, a determination that the individual is not terminally ill.
(h) Supplier responsibility for items furnished on assignment basis
If a supplier of medical equipment and supplies (as defined in
(1) furnishes an item or service to a beneficiary for which no payment may be made by reason of
(2) furnishes an item or service to a beneficiary for which payment is denied in advance under
(3) furnishes an item or service to a beneficiary for which no payment may be made by reason of
any expenses incurred for items and services furnished to an individual by such a supplier on an assignment-related basis shall be the responsibility of such supplier. The individual shall have no financial responsibility for such expenses and the supplier shall refund on a timely basis to the individual (and shall be liable to the individual for) any amounts collected from the individual for such items or services. The provisions of
(i) Hospice program eligibility recertification
The provisions of this section shall apply with respect to a denial of a payment under this subchapter by reason of
(Aug. 14, 1935, ch. 531, title XVIII, §1879, as added
Editorial Notes
Amendments
2014—Subsec. (i).
2011—Subsec. (a).
Subsec. (e).
1997—Subsec. (g).
1994—Subsec. (h).
1989—Subsec. (f)(1).
Subsec. (f)(4).
Subsec. (f)(6).
1987—Subsec. (b).
1986—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsecs. (f), (g).
1982—Subsec. (a).
Subsec. (e).
1980—Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2011 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1989 Amendment
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 9341(a)(3) of
Effective Date of 1982 Amendment
Amendment by
Effective Date of 1980 Amendment
Effective Date
Provisions Relating to Advance Beneficiary Notices; Report on Prior Determination Process
"(1)
"(2)
"(3) GAO
"(4) GAO
"(A) information concerning—
"(i) the number and types of procedures for which a prior determination has been sought;
"(ii) determinations made under the process;
"(iii) the percentage of beneficiaries prevailing;
"(iv) in those cases in which the beneficiaries do not prevail, the reasons why such beneficiaries did not prevail; and
"(v) changes in receipt of services resulting from the application of such process;
"(B) an evaluation of whether the process was useful for physicians (and other suppliers) and beneficiaries, whether it was timely, and whether the amount of information required was burdensome to physicians and beneficiaries; and
"(C) recommendations for improvements or continuation of such process.
"(5)
Reports to Congress on Denials of Bills for Payment
§1395qq. Indian Health Service facilities
(a) Eligibility for payments; conditions and requirements
A hospital or skilled nursing facility of the Indian Health Service, whether operated by such Service or by an Indian tribe or tribal organization (as those terms are defined in
(b) Eligibility based on submission of plan to achieve compliance with conditions and requirements; twelve-month period
Notwithstanding subsection (a), a hospital or skilled nursing facility of the Indian Health Service which does not meet all of the conditions and requirements of this subchapter which are applicable generally to hospitals or skilled nursing facilities (as the case may be), but which submits to the Secretary within six months after September 30, 1976, an acceptable plan for achieving compliance with such conditions and requirements, shall be deemed to meet such conditions and requirements (and to be eligible for payments under this subchapter), without regard to the extent of its actual compliance with such conditions and requirements, during the first 12 months after the month in which such plan is submitted.
(c) Payments into special fund for improvements to achieve compliance with conditions and requirements; certification of compliance by Secretary
Notwithstanding any other provision of this subchapter, payments to which any hospital or skilled nursing facility of the Indian Health Service is entitled by reason of this section shall be placed in a special fund to be held by the Secretary and used by him (to such extent or in such amounts as are provided in appropriation Acts) exclusively for the purpose of making any improvements in the hospitals and skilled nursing facilities of such Service which may be necessary to achieve compliance with the applicable conditions and requirements of this subchapter. The preceding sentence shall cease to apply when the Secretary determines and certifies that substantially all of the hospitals and skilled nursing facilities of such Service in the United States are in compliance with such conditions and requirements.
(d) Report by Secretary; status of facilities in complying with conditions and requirements
The annual report of the Secretary which is required by
(e) Services provided by Indian Health Service, Indian tribe, or tribal organization
(1)(A) Notwithstanding
(B) Payment shall not be made for services under subparagraph (A) to the extent that payment is otherwise made for such services under this subchapter.
(2) The services described in this paragraph are the following:
(A) Services for which payment is made under
(B) Services furnished by a practitioner described in
(C) Services furnished by a physical therapist or occupational therapist as described in
(3) Subsection (c) shall not apply to payments made under this subsection.
(f) Cross reference
For provisions relating to the authority of certain Indian tribes, tribal organizations, and Alaska Native health organizations to elect to directly bill for, and receive payment for, health care services provided by a hospital or clinic of such tribes or organizations and for which payment may be made under this subchapter, see
(Aug. 14, 1935, ch. 531, title XVIII, §1880, as added
Editorial Notes
References in Text
Codification
Amendments
2010—Subsec. (e)(1)(A).
2003—Subsec. (e)(1)(A).
2000—Subsec. (e).
Subsec. (f).
1992—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title IV, §432(a)] of
Amendment by
Medicare Payments Not Considered in Determining Appropriations for Indian Health Care
Preference in Services for Indians With Medicare Coverage Not Authorized
1 See References in Text note below.
§1395rr. End stage renal disease program
(a) Type, duration, and scope of benefits
The benefits provided by parts A and B of this subchapter shall include benefits for individuals who have been determined to have end stage renal disease as provided in
(b) Payments with respect to services; dialysis; regulations; physicians' services; target reimbursement rates; home dialysis supplies and equipment; self-care home dialysis support services; self-care dialysis units; hepatitis B vaccine
(1) Payments under this subchapter with respect to services, in addition to services for which payment would otherwise be made under this subchapter, furnished to individuals who have been determined to have end stage renal disease shall include (A) payments on behalf of such individuals to providers of services and renal dialysis facilities which meet such requirements as the Secretary shall by regulation prescribe for institutional dialysis services and supplies (including self-dialysis services in a self-care dialysis unit maintained by the provider or facility), transplantation services, self-care home dialysis support services which are furnished by the provider or facility, and routine professional services performed by a physician during a maintenance dialysis episode if payments for his other professional services furnished to an individual who has end stage renal disease are made on the basis specified in paragraph (3)(A)(i) of this subsection, (B) payments to or on behalf of such individuals for home dialysis supplies and equipment, and (C) payments to a supplier of home dialysis supplies and equipment that is not a provider of services, a renal dialysis facility, or a physician for self-administered erythropoietin as described in section 1395x(s)(2)(P) 1 of this title if the Secretary finds that the patient receiving such drug from such a supplier can safely and effectively administer the drug (in accordance with the applicable methods and standards established by the Secretary pursuant to such section). The requirements prescribed by the Secretary under subparagraph (A) shall include requirements for a minimum utilization rate for transplantations. Beginning 180 days after February 9, 2018, an initial survey of a provider of services or a renal dialysis facility to determine if the conditions and requirements under this paragraph are met shall be initiated not later than 90 days after such date on which both the provider enrollment form (without regard to whether such form is submitted prior to or after such date of enactment) has been determined by the Secretary to be complete and the provider's enrollment status indicates approval is pending the results of such survey.
(2)(A) With respect to payments for dialysis services furnished by providers of services and renal dialysis facilities to individuals determined to have end stage renal disease for which payments may be made under part B of this subchapter, such payments (unless otherwise provided in this section) shall be equal to 80 percent of the amounts determined in accordance with subparagraph (B); and with respect to payments for services for which payments may be made under part A of this subchapter, the amounts of such payments (which amounts shall not exceed, in respect to costs in procuring organs attributable to payments made to an organ procurement agency or histocompatibility laboratory, the costs incurred by that agency or laboratory) shall be determined in accordance with
(B) The Secretary shall prescribe in regulations any methods and procedures to (i) determine the costs incurred by providers of services and renal dialysis facilities in furnishing covered services to individuals determined to have end stage renal disease, and (ii) determine, on a cost-related basis or other economical and equitable basis (including any basis authorized under
(C) Such regulations, in the case of services furnished by proprietary providers and facilities (other than hospital outpatient departments) may include, if the Secretary finds it feasible and appropriate, provision for recognition of a reasonable rate of return on equity capital, providing such rate of return does not exceed the rate of return stipulated in
(D) For purposes of
(3)(A) With respect to payments for physicians' services furnished to individuals determined to have end stage renal disease, the Secretary shall pay 80 percent of the amounts calculated for such services—
(i) on a reasonable charge basis (but may, in such case, make payment on the basis of the prevailing charges of other physicians for comparable services or, for services furnished on or after January 1, 1992, on the basis described in
(ii) subject to subparagraph (B), on a comprehensive monthly fee or other basis (which effectively encourages the efficient delivery of dialysis services and provides incentives for the increased use of home dialysis) for an aggregate of services provided over a period of time (as defined in regulations).
(B)(i) For purposes of subparagraph (A)(ii), subject to clauses (ii) and (iii), an individual determined to have end stage renal disease receiving home dialysis may choose to receive monthly end stage renal disease-related clinical assessments furnished on or after January 1, 2019, via telehealth.
(ii) Except as provided in clause (iii), clause (i) shall apply to an individual only if the individual receives a face-to-face clinical assessment, without the use of telehealth—
(I) in the case of the initial 3 months of home dialysis of such individual, at least monthly; and
(II) after such initial 3 months, at least once every 3 consecutive months.
(iii) The Secretary may waive the provisions of clause (ii) during the emergency period described in
(4)(A) Pursuant to agreements with approved providers of services and renal dialysis facilities, the Secretary may make payments to such providers and facilities for the cost of home dialysis supplies and equipment and self-care home dialysis support services furnished to patients whose self-care home dialysis is under the direct supervision of such provider or facility, on the basis of a target reimbursement rate (as defined in paragraph (6)) or on the basis of a method established under paragraph (7).
(B) The Secretary shall make payments to a supplier of home dialysis supplies and equipment furnished to a patient whose self-care home dialysis is not under the direct supervision of an approved provider of services or renal dialysis facility only in accordance with a written agreement under which—
(i) the patient certifies that the supplier is the sole provider of such supplies and equipment to the patient,
(ii) the supplier agrees to receive payment for the cost of such supplies and equipment only on an assignment-related basis, and
(iii) the supplier certifies that it has entered into a written agreement with an approved provider of services or renal dialysis facility under which such provider or facility agrees to furnish to such patient all self-care home dialysis support services and all other necessary dialysis services and supplies, including institutional dialysis services and supplies and emergency services.
(5) An agreement under paragraph (4) shall require, in accordance with regulations prescribed by the Secretary, that the provider or facility will—
(A) assume full responsibility for directly obtaining or arranging for the provision of—
(i) such medically necessary dialysis equipment as is prescribed by the attending physician;
(ii) dialysis equipment maintenance and repair services;
(iii) the purchase and delivery of all necessary medical supplies; and
(iv) where necessary, the services of trained home dialysis aides;
(B) perform all such administrative functions and maintain such information and records as the Secretary may require to verify the transactions and arrangements described in subparagraph (A);
(C) submit such cost reports, data, and information as the Secretary may require with respect to the costs incurred for equipment, supplies, and services furnished to the facility's home dialysis patient population; and
(D) provide for full access for the Secretary to all such records, data, and information as he may require to perform his functions under this section.
(6) The Secretary shall establish, for each calendar year, commencing with January 1, 1979, a target reimbursement rate for home dialysis which shall be adjusted for regional variations in the cost of providing home dialysis. In establishing such a rate, the Secretary shall include—
(A) the Secretary's estimate of the cost of providing medically necessary home dialysis supplies and equipment;
(B) an allowance, in an amount determined by the Secretary, to cover the cost of providing personnel to aid in home dialysis; and
(C) an allowance, in an amount determined by the Secretary, to cover administrative costs and to provide an incentive for the efficient delivery of home dialysis;
but in no event (except as may be provided in regulations under paragraph (7)) shall such target rate exceed 75 percent of the national average payment, adjusted for regional variations, for maintenance dialysis services furnished in approved providers and facilities during the preceding fiscal year. Any such target rate so established shall be utilized, without renegotiation of the rate, throughout the calendar year for which it is established. During the last quarter of each calendar year, the Secretary shall establish a home dialysis target reimbursement rate for the next calendar year based on the most recent data available to the Secretary at the time. In establishing any rate under this paragraph, the Secretary may utilize a competitive-bid procedure, a prenegotiated rate procedure, or any other procedure (including methods established under paragraph (7)) which the Secretary determines is appropriate and feasible in order to carry out this paragraph in an effective and efficient manner.
(7) Subject to paragraph (12), the Secretary shall provide by regulation for a method (or methods) for determining prospectively the amounts of payments to be made for dialysis services furnished by providers of services and renal dialysis facilities to individuals in a facility and to such individuals at home. Such method (or methods) shall provide for the prospective determination of a rate (or rates) for each mode of care based on a single composite weighted formula (which takes into account the mix of patients who receive dialysis services at a facility or at home and the relative costs of providing such services in such settings) for hospital-based facilities and such a single composite weighted formula for other renal dialysis facilities, or based on such other method or combination of methods which differentiate between hospital-based facilities and other renal dialysis facilities and which the Secretary determines, after detailed analysis, will more effectively encourage the more efficient delivery of dialysis services and will provide greater incentives for increased use of home dialysis than through the single composite weighted formulas. The amount of a payment made under any method other than a method based on a single composite weighted formula may not exceed the amount (or, in the case of continuous cycling peritoneal dialysis, 130 percent of the amount) of the median payment that would have been made under the formula for hospital-based facilities. Subject to section 422(a)(2) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, the Secretary shall provide for such exceptions to such methods as may be warranted by unusual circumstances (including the special circumstances of sole facilities located in isolated, rural areas and of pediatric facilities). Each application for such an exception shall be deemed to be approved unless the Secretary disapproves it by not later than 60 working days after the date the application is filed. The Secretary may provide that such method will serve in lieu of any target reimbursement rate that would otherwise be established under paragraph (6). The Secretary shall reduce the amount of each composite rate payment under this paragraph for each treatment by 50 cents (subject to such adjustments as may be required to reflect modes of dialysis other than hemodialysis) and provide for payment of such amount to the organizations (designated under subsection (c)(1)(A)) for such organizations' necessary and proper administrative costs incurred in carrying out the responsibilities described in subsection (c)(2). The Secretary shall provide that amounts paid under the previous sentence shall be distributed to the organizations described in subsection (c)(1)(A) to ensure equitable treatment of all such network organizations. The Secretary in distributing any such payments to network organizations shall take into account—
(A) the geographic size of the network area;
(B) the number of providers of end stage renal disease services in the network area;
(C) the number of individuals who are entitled to end stage renal disease services in the network area; and
(D) the proportion of the aggregate administrative funds collected in the network area.
The Secretary shall increase the amount of each composite rate payment for dialysis services furnished during 2000 by 1.2 percent above such composite rate payment amounts for such services furnished on December 31, 1999, for such services furnished on or after January 1, 2001, and before January 1, 2005, by 2.4 percent above such composite rate payment amounts for such services furnished on December 31, 2000, and for such services furnished on or after January 1, 2005, by 1.6 percent above such composite rate payment amounts for such services furnished on December 31, 2004.
(8) For purposes of this subchapter, the term "home dialysis supplies and equipment" means medically necessary supplies and equipment (including supportive equipment) required by an individual suffering from end stage renal disease in connection with renal dialysis carried out in his home (as defined in regulations), including obtaining, installing, and maintaining such equipment.
(9) For purposes of this subchapter, the term "self-care home dialysis support services", to the extent permitted in regulation, means—
(A) periodic monitoring of the patient's home adaptation, including visits by qualified provider or facility personnel (as defined in regulations), so long as this is done in accordance with a plan prepared and periodically reviewed by a professional team (as defined in regulations) including the individual's physician;
(B) installation and maintenance of dialysis equipment;
(C) testing and appropriate treatment of the water; and
(D) such additional supportive services as the Secretary finds appropriate and desirable.
(10) For purposes of this subchapter, the term "self-care dialysis unit" means a renal dialysis facility or a distinct part of such facility or of a provider of services, which has been approved by the Secretary to make self-dialysis services, as defined by the Secretary in regulations, available to individuals who have been trained for self-dialysis. A self-care dialysis unit must, at a minimum, furnish the services, equipment and supplies needed for self-care dialysis, have patient-staff ratios which are appropriate to self-dialysis (allowing for such appropriate lesser degree of ongoing medical supervision and assistance of ancillary personnel than is required for full care maintenance dialysis), and meet such other requirements as the Secretary may prescribe with respect to the quality and cost-effectiveness of services.
(11)(A) Hepatitis B vaccine and its administration, when provided to a patient determined to have end stage renal disease, shall not be included as dialysis services for purposes of payment under any prospective payment amount or comprehensive fee established under this section. Payment for such vaccine and its administration shall be made separately in accordance with
(B) Erythropoietin, when provided to a patient determined to have end stage renal disease, shall not be included as a dialysis service for purposes of payment under any prospective payment amount or comprehensive fee established under this section, and subject to paragraphs (12) and (13) payment for such item shall be made separately—
(i) in the case of erythropoietin provided by a physician, in accordance with
(ii) in the case of erythropoietin provided by a provider of services, renal dialysis facility, or other supplier of home dialysis supplies and equipment—
(I) for erythropoietin provided during 1994, in an amount equal to $10 per thousand units (rounded to the nearest 100 units), and
(II) for erythropoietin provided during a subsequent year, in an amount determined to be appropriate by the Secretary, except that such amount may not exceed the amount determined under this clause for the previous year increased by the percentage increase (if any) in the implicit price deflator for gross national product (as published by the Department of Commerce) for the second quarter of the preceding year over the implicit price deflator for the second quarter of the second preceding year.
(C) The amount payable to a supplier of home dialysis supplies and equipment that is not a provider of services, a renal dialysis facility, or a physician for erythropoietin shall be determined in the same manner as the amount payable to a renal dialysis facility for such item.
(12)(A) Subject to paragraph (14), in lieu of payment under paragraph (7) beginning with services furnished on January 1, 2005, the Secretary shall establish a basic case-mix adjusted prospective payment system for dialysis services furnished by providers of services and renal dialysis facilities in a year to individuals in a facility and to such individuals at home. The case-mix under such system shall be for a limited number of patient characteristics. Under such system, the payment rate for dialysis services furnished on or after January 1, 2009, by providers of services shall be the same as the payment rate (computed without regard to this sentence) for such services furnished by renal dialysis facilities, and in applying the geographic index under subparagraph (D) to providers of services, the labor share shall be based on the labor share otherwise applied for renal dialysis facilities.
(B) The system described in subparagraph (A) shall include—
(i) the services comprising the composite rate established under paragraph (7); and
(ii) the difference between payment amounts under this subchapter for separately billed drugs and biologicals (including erythropoietin) and acquisition costs of such drugs and biologicals, as determined by the Inspector General reports to the Secretary as required by section 623(c) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003—
(I) beginning with 2005, for such drugs and biologicals for which a billing code exists prior to January 1, 2004; and
(II) beginning with 2007, for such drugs and biologicals for which a billing code does not exist prior to January 1, 2004,
adjusted to 2005, or 2007, respectively, as determined to be appropriate by the Secretary.
(C)(i) In applying subparagraph (B)(ii) for 2005, such payment amounts under this subchapter shall be determined using the methodology specified in paragraph (13)(A)(i).
(ii) For 2006, the Secretary shall provide for an adjustment to the payments under clause (i) to reflect the difference between the payment amounts using the methodology under paragraph (13)(A)(i) and the payment amount determined using the methodology applied by the Secretary under paragraph (13)(A)(iii) of such paragraph, as estimated by the Secretary.
(D) The Secretary shall adjust the payment rates under such system by a geographic index as the Secretary determines to be appropriate. If the Secretary applies a geographic index under this paragraph that differs from the index applied under paragraph (7) the Secretary shall phase-in the application of the index under this paragraph over a multiyear period.
(E)(i) Such system shall be designed to result in the same aggregate amount of expenditures for such services, as estimated by the Secretary, as would have been made for 2005 if this paragraph did not apply.
(ii) The adjustment made under subparagraph (B)(ii)(II) shall be done in a manner to result in the same aggregate amount of expenditures after such adjustment as would otherwise have been made for such services for 2006 or 2007, respectively, as estimated by the Secretary, if this paragraph did not apply.
(F) Beginning with 2006, the Secretary shall annually increase the basic case-mix adjusted payment amounts established under this paragraph, by an amount determined by—
(i) applying the estimated growth in expenditures for drugs and biologicals (including erythropoietin) that are separately billable to the component of the basic case-mix adjusted system described in subparagraph (B)(ii); and
(ii) converting the amount determined in clause (i) to an increase applicable to the basic case-mix adjusted payment amounts established under subparagraph (B).
Except as provided in subparagraph (G), nothing in this paragraph or paragraph (14) shall be construed as providing for an update to the composite rate component of the basic case-mix adjusted system under subparagraph (B) or under the system under paragraph (14).
(G) The Secretary shall increase the amount of the composite rate component of the basic case-mix adjusted system under subparagraph (B) for dialysis services—
(i) furnished on or after January 1, 2006, and before April 1, 2007, by 1.6 percent above the amount of such composite rate component for such services furnished on December 31, 2005;
(ii) furnished on or after April 1, 2007, and before January 1, 2009, by 1.6 percent above the amount of such composite rate component for such services furnished on March 31, 2007;
(iii) furnished on or after January 1, 2009, and before January 1, 2010, by 1.0 percent above the amount of such composite rate component for such services furnished on December 31, 2008; and
(iv) furnished on or after January 1, 2010, by 1.0 percent above the amount of such composite rate component for such services furnished on December 31, 2009.
(H) There shall be no administrative or judicial review under
(13)(A) Subject to paragraph (14), the payment amounts under this subchapter for separately billed drugs and biologicals furnished in a year, beginning with 2004, are as follows:
(i) For such drugs and biologicals (other than erythropoietin) furnished in 2004, the amount determined under
(ii) For such drugs and biologicals (including erythropoietin) furnished in 2005, the acquisition cost of the drug or biological, as determined by the Inspector General reports to the Secretary as required by section 623(c) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Insofar as the Inspector General has not determined the acquisition cost with respect to a drug or biological, the Secretary shall determine the payment amount for such drug or biological.
(iii) For such drugs and biologicals (including erythropoietin) furnished in 2006 and subsequent years, such acquisition cost or the amount determined under
(B) Drugs and biologicals (including erythropoietin) which were separately billed under this subsection on the day before December 8, 2003, shall continue to be separately billed on and after such date, subject to paragraph (14).
(14)(A)(i) Subject to subparagraph (E), for services furnished on or after January 1, 2011, the Secretary shall implement a payment system under which a single payment is made under this subchapter to a provider of services or a renal dialysis facility for renal dialysis services (as defined in subparagraph (B)) in lieu of any other payment (including a payment adjustment under paragraph (12)(B)(ii)) and for such services and items furnished pursuant to paragraph (4).
(ii) In implementing the system under this paragraph the Secretary shall ensure that the estimated total amount of payments under this subchapter for 2011 for renal dialysis services shall equal 98 percent of the estimated total amount of payments for renal dialysis services, including payments under paragraph (12)(B)(ii), that would have been made under this subchapter with respect to services furnished in 2011 if such system had not been implemented. In making the estimation under subclause (I), the Secretary shall use per patient utilization data from 2007, 2008, or 2009, whichever has the lowest per patient utilization.
(B) For purposes of this paragraph, the term "renal dialysis services" includes—
(i) items and services included in the composite rate for renal dialysis services as of December 31, 2010;
(ii) erythropoiesis stimulating agents and any oral form of such agents that are furnished to individuals for the treatment of end stage renal disease;
(iii) other drugs and biologicals that are furnished to individuals for the treatment of end stage renal disease and for which payment was (before the application of this paragraph) made separately under this subchapter, and any oral equivalent form of such drug or biological; and
(iv) diagnostic laboratory tests and other items and services not described in clause (i) that are furnished to individuals for the treatment of end stage renal disease.
Such term does not include vaccines.
(C) The system under this paragraph may provide for payment on the basis of services furnished during a week or month or such other appropriate unit of payment as the Secretary specifies.
(D) Such system—
(i) shall include a payment adjustment based on case mix that may take into account patient weight, body mass index, comorbidities, length of time on dialysis, age, race, ethnicity, and other appropriate factors;
(ii) shall include a payment adjustment for high cost outliers due to unusual variations in the type or amount of medically necessary care, including variations in the amount of erythropoiesis stimulating agents necessary for anemia management;
(iii) shall include a payment adjustment that reflects the extent to which costs incurred by low-volume facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services, and for payment for renal dialysis services furnished on or after January 1, 2011, and before January 1, 2014, such payment adjustment shall not be less than 10 percent; and
(iv) may include such other payment adjustments as the Secretary determines appropriate, such as a payment adjustment—
(I) for pediatric providers of services and renal dialysis facilities;
(II) by a geographic index, such as the index referred to in paragraph (12)(D), as the Secretary determines to be appropriate; and
(III) for providers of services or renal dialysis facilities located in rural areas.
The Secretary shall take into consideration the unique treatment needs of children and young adults in establishing such system.
(E)(i) The Secretary shall provide for a four-year phase-in (in equal increments) of the payment amount under the payment system under this paragraph, with such payment amount being fully implemented for renal dialysis services furnished on or after January 1, 2014.
(ii) A provider of services or renal dialysis facility may make a one-time election to be excluded from the phase-in under clause (i) and be paid entirely based on the payment amount under the payment system under this paragraph. Such an election shall be made prior to January 1, 2011, in a form and manner specified by the Secretary, and is final and may not be rescinded.
(iii) The Secretary shall make an adjustment to the payments under this paragraph for years during which the phase-in under clause (i) is applicable so that the estimated total amount of payments under this paragraph, including payments under this subparagraph, shall equal the estimated total amount of payments that would otherwise occur under this paragraph without such phase-in.
(F)(i)(I) Subject to subclauses (II) and (III) and clause (ii), beginning in 2012, the Secretary shall annually increase payment amounts established under this paragraph by an ESRD market basket percentage increase factor for a bundled payment system for renal dialysis services that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. In order to accomplish the purposes of subparagraph (I) with respect to 2016, 2017, and 2018, after determining the increase factor described in the preceding sentence for each of 2016, 2017, and 2018, the Secretary shall reduce such increase factor by 1.25 percentage points for each of 2016 and 2017 and by 1 percentage point for 2018.
(II) Subject to subclause (III), for 2012 and each subsequent year, after determining the increase factor described in subclause (I), the Secretary shall reduce such increase factor by the productivity adjustment described in
(III) Notwithstanding subclauses (I) and (II), in order to accomplish the purposes of subparagraph (I) with respect to 2015, the increase factor described in subclause (I) for 2015 shall be 0.0 percent pursuant to the regulation issued by the Secretary on December 2, 2013, entitled "Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies; Final Rule" (78 Fed. Reg. 72156).
(ii) For years during which a phase-in of the payment system pursuant to subparagraph (E) is applicable, the following rules shall apply to the portion of the payment under the system that is based on the payment of the composite rate that would otherwise apply if the system under this paragraph had not been enacted:
(I) The update under clause (i) shall not apply.
(II) Subject to clause (i)(II), the Secretary shall annually increase such composite rate by the ESRD market basket percentage increase factor described in clause (i)(I).
(G) There shall be no administrative or judicial review under
(H) Erythropoiesis stimulating agents and other drugs and biologicals shall be treated as prescribed and dispensed or administered and available only under part B if they are—
(i) furnished to an individual for the treatment of end stage renal disease; and
(ii) included in subparagraph (B) for purposes of payment under this paragraph.
(I) For services furnished on or after January 1, 2014, and before January 1, 2015, the Secretary shall, by comparing per patient utilization data from 2007 with such data from 2012, make reductions to the single payment that would otherwise apply under this paragraph for renal dialysis services to reflect the Secretary's estimate of the change in the utilization of drugs and biologicals described in clauses (ii), (iii), and (iv) of subparagraph (B) (other than oral-only ESRD-related drugs, as such term is used in the final rule promulgated by the Secretary in the Federal Register on August 12, 2010 (75 Fed. Reg. 49030)). In making reductions under the preceding sentence, the Secretary shall take into account the most recently available data on average sales prices and changes in prices for drugs and biological 2 reflected in the ESRD market basket percentage increase factor under subparagraph (F).
(c) Renal disease network areas; coordinating councils, executive committees, and medical review boards; national end stage renal disease medical information system; functions of network organizations
(1)(A)(i) For the purpose of assuring effective and efficient administration of the benefits provided under this section, the Secretary shall, in accordance with such criteria as he finds necessary to assure the performance of the responsibilities and functions specified in paragraph (2)—
(I) establish at least 17 end stage renal disease network areas, and
(II) for each such area, designate a network administrative organization which, in accordance with regulations of the Secretary, shall establish (aa) a network council of renal dialysis and transplant facilities located in the area and (bb) a medical review board, which has a membership including at least one patient representative and physicians, nurses, and social workers engaged in treatment relating to end stage renal disease.
The Secretary shall publish in the Federal Register a description of the geographic area that he determines, after consultation with appropriate professional and patient organizations, constitutes each network area and the criteria on the basis of which such determination is made.
(ii)(I) In order to determine whether the Secretary should enter into, continue, or terminate an agreement with a network administrative organization designated for an area established under clause (i), the Secretary shall develop and publish in the Federal Register standards, criteria, and procedures to evaluate an applicant organization's capabilities to perform (and, in the case of an organization with which such an agreement is in effect, actual performance of) the responsibilities described in paragraph (2). The Secretary shall evaluate each applicant based on quality and scope of services and may not accord more than 20 percent of the weight of the evaluation to the element of price.
(II) An agreement with a network administrative organization may be terminated by the Secretary only if he finds, after applying such standards and criteria, that the organization has failed to perform its prescribed responsibilities effectively and efficiently. If such an agreement is to be terminated, the Secretary shall select a successor to the agreement on the basis of competitive bidding and in a manner that provides an orderly transition.
(B) At least one patient representative shall serve as a member of each network council and each medical review board.
(C) The Secretary shall, in regulations, prescribe requirements with respect to membership in network organizations by individuals (and the relatives of such individuals) (i) who have an ownership or control interest in a facility or provider which furnishes services referred to in
(2) The network organizations of each network shall be responsible, in addition to such other duties and functions as may be prescribed by the Secretary, for—
(A) encouraging, consistent with sound medical practice, the use of those treatment settings most compatible with the successful rehabilitation of the patient and the participation of patients, providers of services, and renal disease facilities in vocational rehabilitation programs;
(B) developing criteria and standards relating to the quality and appropriateness of patient care and with respect to working with patients, facilities, and providers in encouraging participation in vocational rehabilitation programs; and network goals with respect to the placement of patients in self-care settings and undergoing or preparing for transplantation;
(C) evaluating the procedure by which facilities and providers in the network assess the appropriateness of patients for proposed treatment modalities;
(D) implementing a procedure for evaluating and resolving patient grievances;
(E) conducting on-site reviews of facilities and providers as necessary (as determined by a medical review board or the Secretary), utilizing standards of care established by the network organization to assure proper medical care;
(F) collecting, validating, and analyzing such data as are necessary to prepare the reports required by subparagraph (H) and to assure the maintenance of the registry established under paragraph (7);
(G) identifying facilities and providers that are not cooperating toward meeting network goals and assisting such facilities and providers in developing appropriate plans for correction and reporting to the Secretary on facilities and providers that are not providing appropriate medical care; and
(H) submitting an annual report to the Secretary on July 1 of each year which shall include a full statement of the network's goals, data on the network's performance in meeting its goals (including data on the comparative performance of facilities and providers with respect to the identification and placement of suitable candidates in self-care settings and transplantation and encouraging participation in vocational rehabilitation programs), identification of those facilities that have consistently failed to cooperate with network goals, and recommendations with respect to the need for additional or alternative services or facilities in the network in order to meet the network goals, including self-dialysis training, transplantation, and organ procurement facilities.
(3) Where the Secretary determines, on the basis of the data contained in the network's annual report and such other relevant data as may be available to him, that a facility or provider has consistently failed to cooperate with network plans and goals or to follow the recommendations of the medical review board, he may terminate or withhold certification of such facility or provider (for purposes of payment for services furnished to individuals with end stage renal disease) until he determines that such provider or facility is making reasonable and appropriate efforts to cooperate with the network's plans and goals. If the Secretary determines that the facility's or provider's failure to cooperate with network plans and goals does not jeopardize patient health or safety or justify termination of certification, he may instead, after reasonable notice to the provider or facility and to the public, impose such other sanctions as he determines to be appropriate, which sanctions may include denial of reimbursement with respect to some or all patients admitted to the facility after the date of notice to the facility or provider, and graduated reduction in reimbursement for all patients.
(4) The Secretary shall, in determining whether to certify additional facilities or expansion of existing facilities within a network, take into account the network's goals and performance as reflected in the network's annual report.
(5) The Secretary, after consultation with appropriate professional and planning organizations, shall provide such guidelines with respect to the planning and delivery of renal disease services as are necessary to assist network organizations in their development of their respective networks' goals to promote the optimum use of self-dialysis and transplantation by suitable candidates for such modalities.
(6) It is the intent of the Congress that the maximum practical number of patients who are medically, socially, and psychologically suitable candidates for home dialysis or transplantation should be so treated and that the maximum practical number of patients who are suitable candidates for vocational rehabilitation services be given access to such services and encouraged to return to gainful employment. The Secretary shall consult with appropriate professional and network organizations and consider available evidence relating to developments in research, treatment methods, and technology for home dialysis and transplantation.
(7) The Secretary shall establish a national end stage renal disease registry the purpose of which shall be to assemble and analyze the data reported by network organizations, transplant centers, and other sources on all end stage renal disease patients in a manner that will permit—
(A) the preparation of the annual report to the Congress required under subsection (g); 1
(B) an identification of the economic impact, cost-effectiveness, and medical efficacy of alternative modalities of treatment;
(C) an evaluation with respect to the most appropriate allocation of resources for the treatment and research into the cause of end stage renal disease;
(D) the determination of patient mortality and morbidity rates, and trends in such rates, and other indices of quality of care; and
(E) such other analyses relating to the treatment and management of end stage renal disease as will assist the Congress in evaluating the end stage renal disease program under this section.
The Secretary shall provide for such coordination of data collection activities, and such consolidation of existing end stage renal disease data systems, as is necessary to achieve the purpose of such registry, shall determine the appropriate location of the registry, and shall provide for the appointment of a professional advisory group to assist the Secretary in the formulation of policies and procedures relevant to the management of such registry.
(8) The provisions of
(d) Donors of kidney for transplant surgery
Notwithstanding any provision to the contrary in
(e) Reimbursement of providers, facilities, and nonprofit entities for costs of artificial kidney and automated dialysis peritoneal machines for home dialysis
(1) Notwithstanding any other provision of this subchapter, the Secretary may, pursuant to agreements with approved providers of services, renal dialysis facilities, and nonprofit entities which the Secretary finds can furnish equipment economically and efficiently, reimburse such providers, facilities, and nonprofit entities (without regard to the deductible and coinsurance provisions of this subchapter) for the reasonable cost of the purchase, installation, maintenance and reconditioning for subsequent use of artificial kidney and automated dialysis peritoneal machines (including supportive equipment) which are to be used exclusively by entitled individuals dialyzing at home.
(2) An agreement under this subsection shall require that the provider, facility, or other entity will—
(A) make the equipment available for use only by entitled individuals dialyzing at home;
(B) recondition the equipment, as needed, for reuse by such individuals throughout the useful life of the equipment, including modification of the equipment consistent with advances in research and technology;
(C) provide for full access for the Secretary to all records and information relating to the purchase, maintenance, and use of the equipment; and
(D) submit such reports, data, and information as the Secretary may require with respect to the cost, management, and use of the equipment.
(3) For purposes of this section, the term "supportive equipment" includes blood pumps, heparin pumps, bubble detectors, other alarm systems, and such other items as the Secretary may determine are medically necessary.
(f) Experiments, studies, and pilot projects
(1) The Secretary shall initiate and carry out, at selected locations in the United States, pilot projects under which financial assistance in the purchase of new or used durable medical equipment for renal dialysis is provided to individuals suffering from end stage renal disease at the time home dialysis is begun, with provision for a trial period to assure successful adaptation to home dialysis before the actual purchase of such equipment.
(2) The Secretary shall conduct experiments to evaluate methods for reducing the costs of the end stage renal disease program. Such experiments shall include (without being limited to) reimbursement for nurses and dialysis technicians to assist with home dialysis, and reimbursement to family members assisting with home dialysis.
(3) The Secretary shall conduct experiments to evaluate methods of dietary control for reducing the costs of the end stage renal disease program, including (without being limited to) the use of protein-controlled products to delay the necessity for, or reduce the frequency of, dialysis in the treatment of end stage renal disease.
(4) The Secretary shall conduct a comprehensive study of methods for increasing public participation in kidney donation and other organ donation programs.
(5) The Secretary shall conduct a full and complete study of the reimbursement of physicians for services furnished to patients with end stage renal disease under this subchapter, giving particular attention to the range of payments to physicians for such services, the average amounts of such payments, and the number of hours devoted to furnishing such services to patients at home, in renal disease facilities, in hospitals, and elsewhere.
(6) The Secretary shall conduct a study of the number of patients with end stage renal disease who are not eligible for benefits with respect to such disease under this subchapter (by reason of this section or otherwise), and of the economic impact of such noneligibility of such individuals. Such study shall include consideration of mechanisms whereby governmental and other health plans might be instituted or modified to permit the purchase of actuarially sound coverage for the costs of end stage renal disease.
(7)(A) The Secretary shall establish protocols on standards and conditions for the reuse of dialyzer filters for those facilities and providers which voluntarily elect to reuse such filters.
(B) With respect to dialysis services furnished on or after January 1, 1988 (or July 1, 1988, with respect to protocols that relate to the reuse of bloodlines), no dialysis facility may reuse dialysis supplies (other than dialyzer filters) unless the Secretary has established a protocol with respect to the reuse of such supplies and the facility follows the protocol so established.
(C) The Secretary shall incorporate protocols established under this paragraph, and the requirement of subparagraph (B), into the requirements for facilities prescribed under subsection (b)(1)(A) and failure to follow such a protocol or requirement subjects such a facility to denial of participation in the program established under this section and to denial of payment for dialysis treatment not furnished in compliance with such a protocol or in violation of such requirement.
(8) The Secretary shall submit to the Congress no later than October 1, 1979, a full report on the experiments conducted under paragraphs (1), (2), (3), and (7), and the studies under paragraphs (4), (5), (6), and (7). Such report shall include any recommendations for legislative changes which the Secretary finds necessary or desirable as a result of such experiments and studies.
(g) Conditional approval of dialysis facilities; restriction-of-payments notice to public and facility; notice and hearing; judicial review
(1) In any case where the Secretary—
(A) finds that a renal dialysis facility is not in substantial compliance with requirements for such facilities prescribed under subsection (b)(1)(A),
(B) finds that the facility's deficiencies do not immediately jeopardize the health and safety of patients, and
(C) has given the facility a reasonable opportunity to correct its deficiencies,
the Secretary may, in lieu of terminating approval of the facility, determine that payment under this subchapter shall be made to the facility only for services furnished to individuals who were patients of the facility before the effective date of the notice.
(2) The Secretary's decision to restrict payments under this subsection shall be made effective only after such notice to the public and to the facility as may be prescribed in regulations, and shall remain in effect until (A) the Secretary finds that the facility is in substantial compliance with the requirements under subsection (b)(1)(A), or (B) the Secretary terminates the agreement under this subchapter with the facility.
(3) A facility dissatisfied with a determination by the Secretary under paragraph (1) shall be entitled to a hearing thereon by the Secretary (after reasonable notice) to the same extent as is provided in
(h) Quality incentives in the end-stage renal disease program
(1) Quality incentives
(A) In general
With respect to renal dialysis services (as defined in subsection (b)(14)(B)) furnished on or after January 1, 2012, in the case of a provider of services or a renal dialysis facility that does not meet the requirement described in subparagraph (B) with respect to the year, payments otherwise made to such provider or facility under the system under subsection (b)(14) for such services shall be reduced by up to 2.0 percent, as determined appropriate by the Secretary.
(B) Requirement
The requirement described in this subparagraph is that the provider or facility meets (or exceeds) the total performance score under paragraph (3) with respect to performance standards established by the Secretary with respect to measures specified in paragraph (2).
(C) No effect in subsequent years
The reduction under subparagraph (A) shall apply only with respect to the year involved, and the Secretary shall not take into account such reduction in computing the single payment amount under the system under paragraph (14) in a subsequent year.
(2) Measures
(A) In general
The measures specified under this paragraph with respect to the year involved shall include—
(i) measures on anemia management that reflect the labeling approved by the Food and Drug Administration for such management and measures on dialysis adequacy;
(ii) to the extent feasible, such measure (or measures) of patient satisfaction as the Secretary shall specify;
(iii) for 2016 and subsequent years, measures described in subparagraph (E)(i); and
(iv) such other measures as the Secretary specifies, including, to the extent feasible, measures on—
(I) iron management;
(II) bone mineral metabolism; and
(III) vascular access, including for maximizing the placement of arterial venous fistula.
(B) Use of endorsed measures
(i) In general
Subject to clause (ii), any measure specified by the Secretary under subparagraph (A)(iv) must have been endorsed by the entity with a contract under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(C) Updating measures
The Secretary shall establish a process for updating the measures specified under subparagraph (A) in consultation with interested parties.
(D) Consideration
In specifying measures under subparagraph (A), the Secretary shall consider the availability of measures that address the unique treatment needs of children and young adults with kidney failure.
(E) Measures specific to the conditions treated with oral-only drugs
(i) In general
The measures described in this subparagraph are measures specified by the Secretary that are specific to the conditions treated with oral-only drugs. To the extent feasible, such measures shall be outcomes-based measures.
(ii) Consultation
In specifying the measures under clause (i), the Secretary shall consult with interested stakeholders.
(iii) Use of endorsed measures
(I) In general
Subject to subclause (I), any measures specified under clause (i) must have been endorsed by the entity with a contract under
(II) Exception
If the entity with a contract under
(3) Performance scores
(A) Total performance score
(i) In general
Subject to clause (ii), the Secretary shall develop a methodology for assessing the total performance of each provider of services and renal dialysis facility based on performance standards with respect to the measures selected under paragraph (2) for a performance period established under paragraph (4)(D) (in this subsection referred to as the "total performance score").
(ii) Application
For providers of services and renal dialysis facilities that do not meet (or exceed) the total performance score established by the Secretary, the Secretary shall ensure that the application of the methodology developed under clause (i) results in an appropriate distribution of reductions in payment under paragraph (1) among providers and facilities achieving different levels of total performance scores, with providers and facilities achieving the lowest total performance scores receiving the largest reduction in payment under paragraph (1)(A).
(iii) Weighting of measures
In calculating the total performance score, the Secretary shall weight the scores with respect to individual measures calculated under subparagraph (B) to reflect priorities for quality improvement, such as weighting scores to ensure that providers of services and renal dialysis facilities have strong incentives to meet or exceed anemia management and dialysis adequacy performance standards, as determined appropriate by the Secretary.
(B) Performance score with respect to individual measures
The Secretary shall also calculate separate performance scores for each measure, including for dialysis adequacy and anemia management.
(4) Performance standards
(A) Establishment
Subject to subparagraph (E), the Secretary shall establish performance standards with respect to measures selected under paragraph (2) for a performance period with respect to a year (as established under subparagraph (D)).
(B) Achievement and improvement
The performance standards established under subparagraph (A) shall include levels of achievement and improvement, as determined appropriate by the Secretary.
(C) Timing
The Secretary shall establish the performance standards under subparagraph (A) prior to the beginning of the performance period for the year involved.
(D) Performance period
The Secretary shall establish the performance period with respect to a year. Such performance period shall occur prior to the beginning of such year.
(E) Special rule
The Secretary shall initially use as the performance standard for the measures specified under paragraph (2)(A)(i) for a provider of services or a renal dialysis facility the lesser of—
(i) the performance of such provider or facility for such measures in the year selected by the Secretary under the second sentence of subsection (b)(14)(A)(ii); or
(ii) a performance standard based on the national performance rates for such measures in a period determined by the Secretary.
(5) Limitation on review
There shall be no administrative or judicial review under
(A) The determination of the amount of the payment reduction under paragraph (1).
(B) The establishment of the performance standards and the performance period under paragraph (4).
(C) The specification of measures under paragraph (2).
(D) The methodology developed under paragraph (3) that is used to calculate total performance scores and performance scores for individual measures.
(6) Public reporting
(A) In general
The Secretary shall establish procedures for making information regarding performance under this subsection available to the public, including—
(i) the total performance score achieved by the provider of services or renal dialysis facility under paragraph (3) and appropriate comparisons of providers of services and renal dialysis facilities to the national average with respect to such scores; and
(ii) the performance score achieved by the provider or facility with respect to individual measures.
(B) Opportunity to review
The procedures established under subparagraph (A) shall ensure that a provider of services and a renal dialysis facility has the opportunity to review the information that is to be made public with respect to the provider or facility prior to such data being made public.
(C) Certificates
(i) In general
The Secretary shall provide certificates to providers of services and renal dialysis facilities who furnish renal dialysis services under this section to display in patient areas. The certificate shall indicate the total performance score achieved by the provider or facility under paragraph (3).
(ii) Display
Each facility or provider receiving a certificate under clause (i) shall prominently display the certificate at the provider or facility.
(D) Web-based list
The Secretary shall establish a list of providers of services and renal dialysis facilities who furnish renal dialysis services under this section that indicates the total performance score and the performance score for individual measures achieved by the provider and facility under paragraph (3). Such information shall be posted on the Internet website of the Centers for Medicare & Medicaid Services in an easily understandable format.
(Aug. 14, 1935, ch. 531, title XVIII, §1881, as added
Editorial Notes
References in Text
Section 422(a)(2) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, referred to in subsec. (b)(7), is section 1(a)(6) [title IV, §422(a)(2)] of
Section 623(c) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (b)(12)(B)(ii), (13)(A)(ii), is section 623(c) of
Subsection (g), referred to in subsec. (c)(7)(A), was repealed, and subsec. (h) was redesignated (g), by
Amendments
2020—Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(B)(iii).
2018—Subsec. (b)(1).
Subsec. (b)(3).
2014—Subsec. (b)(14)(F)(i)(I).
Subsec. (b)(14)(F)(i)(II).
Subsec. (b)(14)(F)(i)(III).
Subsec. (b)(14)(I).
Subsec. (h)(2)(A)(iii), (iv).
Subsec. (h)(2)(B)(i).
Subsec. (h)(2)(E).
2013—Subsec. (b)(14)(I).
2010—Subsec. (b)(14)(F)(i).
Subsec. (b)(14)(F)(ii)(II).
2008—Subsec. (b)(12)(A).
Subsec. (b)(12)(F).
Subsec. (b)(12)(G).
Subsec. (b)(13)(A).
Subsec. (b)(13)(B).
Subsec. (b)(14).
Subsec. (h).
2006—Subsec. (b)(12)(F).
Subsec. (b)(12)(G).
Subsec. (b)(12)(H).
2003—Subsec. (b)(7).
Subsec. (b)(11)(B).
Subsec. (b)(12), (13).
2000—Subsec. (b)(7).
1999—Subsec. (b)(7).
1994—Subsec. (g)(3).
1993—Subsec. (b)(1)(C).
Subsec. (b)(11)(B)(ii)(I).
1990—Subsec. (b)(1).
Subsec. (b)(11).
1989—Subsec. (b)(3)(A).
Subsec. (b)(4).
Subsec. (b)(7).
Subsec. (c)(8).
1987—Subsec. (b)(1).
Subsec. (b)(2)(C).
Subsec. (c)(2)(F).
Subsec. (c)(6).
Subsec. (f)(7)(B).
Subsec. (g).
Subsec. (h).
1986—Subsec. (b)(7).
Subsec. (c)(1)(A).
Subsec. (c)(1)(B).
Subsec. (c)(2)(A).
Subsec. (c)(2)(B).
Subsec. (c)(2)(D) to (F).
Subsec. (c)(2)(G).
Subsec. (c)(2)(H).
Subsec. (c)(3).
Subsec. (c)(6).
Subsec. (c)(7).
Subsec. (f)(7).
1984—Subsecs. (a), (b)(1), (2)(A), (B), (3), (8).
Subsec. (b)(11).
Subsec. (c)(3).
1983—Subsec. (b)(2)(A).
1981—Subsec. (b)(2)(B).
Subsec. (b)(3)(B).
Subsec. (b)(4).
Subsec. (b)(6).
Subsec. (b)(7) to (10).
1980—Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4201(d)(2) of
Effective Date of 1989 Amendment
Effective Date of 1987 Amendment
Amendment by section 4065(b) of
Amendment by
Effective Date of 1986 Amendment
[
Effective Date of 1984 Amendment
Amendment by
Amendment by section 2323(c) of
Amendment by section 2354(b)(41) of
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1981 Amendment
Effective Date
Section effective with respect to services, supplies, and equipment furnished after the third calendar month beginning after June 13, 1978, except that provisions for the implementation of an incentive reimbursement system for dialysis services furnished in facilities and providers to become effective with respect to a facility's or provider's first accounting period beginning after the last day of the twelfth month following the month of June 1978, and except that provisions for reimbursement rates for home dialysis to become effective on Apr. 1, 1979, see section 6 of
Construction of 2008 Amendment
Drug Designations
"(1) determining when a product is no longer an oral-only drug; and
"(2) including new injectable and intravenous products into the bundled payment under such system."
Audits of Cost Reports of ESRD Providers as Recommended by MedPAC
"(1)
"(2)
Delay of Implementation of Oral-Only ESRD-Related Drugs in the ESRD Prospective Payment System; Monitoring
"(1)
"(2)
Analysis of Case Mix Payment Adjustments
"(1) conduct an analysis of the case mix payment adjustments being used under section 1881(b)(14)(D)(i) of the Social Security Act (
"(2) make appropriate revisions to such case mix payment adjustments."
Inspector General Studies on ESRD Drugs
"(1)
"(2)
"(A)
"(B)
"(3)
"(A) determine the difference between the amount of payment made to end stage renal disease facilities under title XVIII of the Social Security Act [
"(B) estimate the rates of growth of expenditures for such drugs and biologicals billed by such facilities.
"(4)
"(A)
"(B)
Demonstration of Bundled Case-Mix Adjusted Payment System for ESRD Services
Report on a Bundled Prospective Payment System for End Stage Renal Disease Services
"(1)
"(A)
"(B)
"(2)
"(A)
"(B)
"(C)
"(D)
"(E)
"(F)
"(G)
Prohibition on Exceptions
"(A)
"(B)
"(C)
"(D)
Development of ESRD Market Basket
"(1)
"(A) technology used in furnishing dialysis services;
"(B) the manner or method of furnishing dialysis services; and
"(C) the amounts by which the payments under such section for all services billed by a facility for a year exceed the aggregate allowable audited costs of such services for such facility for such year.
"(2)
Inclusion of Additional Services in Composite Rate
"(1)
"(2)
GAO Study on Access to Services
Special Rule for Payment for 2001
"(1) for services furnished on or after January 1, 2001, and before April 1, 2001, shall be the composite rate payment determined under the provisions of law in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for services furnished on or after April 1, 2001, and before January 1, 2002, shall be the composite rate payment (as determined taking into account the amendment made by subsection (a)(1)) increased by a transitional percentage allowance equal to 0.39 percent (to account for the timing of implementation of the CPI update)."
Study on Payment Level for Home Hemodialysis
Renal Dialysis-Related Services
"(a)
"(b)
PROPAC Study on ESRD Composite Rates
"(1)
"(A)
"(B)
"(i) hemodialysis and other modalities of treatment,
"(ii) the appropriate services to be included in such payments,
"(iii) the adjustment factors to be incorporated including facility characteristics, such as hospital versus free-standing facilities, urban versus rural, size and mix of services,
"(iv) adjustments for labor and nonlabor costs,
"(v) comparative profit margins for all types of renal dialysis providers of service and renal dialysis facilities,
"(vi) adjustments for patient complexity, such as age, diagnosis, case mix, and pediatric services, and
"(vii) efficient costs related to high quality of care and positive outcomes for all treatment modalities.
"(2)
"(3)
[Prospective Payment Assessment Commission (ProPAC) was terminated and its assets and staff transferred to the Medicare Payment Advisory Commission (MedPAC) by section 4022(c)(2), (3) of
Staff-Assisted Home Dialysis Demonstration Project
"(a)
"(1)
"(2)
"(b)
"(1)
"(A)
"(B)
"(i) technical assistance with the operation of a hemodialysis machine in the patient's home and with such patient's care during in-home hemodialysis; and
"(ii) administration of medications within the patient's home to maintain the patency of the extra corporeal circuit.
"(2)
"(A)
"(B)
"(I) the rate determined under clause (ii) with respect to a provider of services or a renal dialysis facility; and
"(II) the factor by which the labor portion of the composite rate determined under section 1881(b)(7) of the Social Security Act [
"(ii) The rate determined under this clause, with respect to a provider of services or renal dialysis facility, shall be equal to the difference between—
"(I) two-thirds of the labor portion of the composite rate applicable under section 1881(b)(7) of such Act to the provider or facility, and
"(II) the product of the national median hourly wage for a home hemodialysis staff assistant and the national median time expended in the provision of home hemodialysis staff assistant services (taking into account time expended in travel and predialysis patient care).
"(iii) For purposes of clause (ii)(II)—
"(I) the national median hourly wage for a home hemodialysis staff assistant and the national median average time expended for home hemodialysis staff assistant services shall be determined annually on the basis of the most recent data available, and
"(II) the national median hourly wage for a home hemodialysis staff assistant shall be the sum of 65 percent of the national median hourly wage for a licensed practical nurse and 35 percent of the national median hourly wage for a registered nurse.
"(C)
"(c)
"(1)
"(A) the individual is not a resident of a nursing facility;
"(B) the individual is an end stage renal disease patient entitled to benefits under title XVIII of the Social Security Act [
"(C) the individual's physician certifies that the individual is confined to a bed or wheelchair and cannot transfer themselves [sic] from a bed to a chair;
"(D) the individual has a serious medical condition (as specified by the Secretary) which would be exacerbated by travel to and from a dialysis facility;
"(E) the individual is eligible for ambulance transportation to receive routine maintenance dialysis treatments, and, based on the individual's medical condition, there is reasonable expectation that such transportation will be used by the individual for a period of at least 6 consecutive months, such that the cost of ambulance transportation can reasonably be expected to meet or exceed the cost of home hemodialysis staff assistance as provided under subsection (b)(2); and
"(F) no family member or other individual is available to provide such assistance to the individual.
"(2)
"(3)
"(d)
"(1) meets minimum qualifications as specified by the Secretary; and
"(2) meets any applicable qualifications as specified under the law of the State in which the home hemodialysis staff assistant is providing services.
"(e)
"(1)
"(2)
"(f)
"(1) For fiscal year 1991, $4,000,000.
"(2) For fiscal year 1992, $4,000,000.
"(3) For fiscal year 1993, $3,000,000.
"(4) For fiscal year 1994, $2,000,000.
"(5) For fiscal year 1995, $1,000,000."
Studies of End-Stage Renal Disease Program
"(1) The Secretary of Health and Human Services (in this subsection referred to as the 'Secretary') shall arrange for a study of the end-stage renal disease program within the medicare program.
"(2) Among other items, the study shall address—
"(A) access to treatment by both individuals eligible for medicare benefits and those not eligible for such benefits;
"(B) the quality of care provided to end-stage renal disease beneficiaries, as measured by clinical indicators, functional status of patients, and patient satisfaction;
"(C) the effect of reimbursement on quality of treatment;
"(D) major epidemiological and demographic changes in the end-stage renal disease population that may affect access to treatment, the quality of care, or the resource requirements of the program; and
"(E) the adequacy of existing data systems to monitor these matters on a continuing basis.
"(3) The Secretary shall submit to Congress, not later than 3 years after the date of the enactment of this Act [Dec. 22, 1987], a report on the study.
"(4) The Secretary shall request the National Academy of Sciences, acting through the Institute of Medicine, to submit an application to conduct the study described in this section. If the Academy submits an acceptable application, the Secretary shall enter into an appropriate arrangement with the Academy for the conduct of the study. If the Academy does not submit an acceptable application to conduct the study, the Secretary may request one or more appropriate nonprofit private entities to submit an application to conduct the study and may enter into an appropriate arrangement for the conduct of the study by the entity which submits the best acceptable application."
Rates for Dialysis Services
[
Study and Report on Medicare Payment Rate Reductions for Patients With End Stage Renal Disease
Deadline for Establishing New End Stage Renal Disease Network Areas; Transition
"(2)
"(3)
Report on Establishment of National End Stage Renal Disease Registry
Deadline for Establishment of Protocols on Reuse of Dialyzer Filters
[
Limitation on Merger of End Stage Renal Disease Networks
1 See References in Text note below.
2 So in original. Probably should be "biologicals".
§1395rr–1. Medicare coverage for individuals exposed to environmental health hazards
(a) Deeming of individuals as eligible for medicare benefits
(1) In general
For purposes of eligibility for benefits under this subchapter, an individual determined under subsection (c) to be an environmental exposure affected individual described in subsection (e)(2) shall be deemed to meet the conditions specified in
(2) Discretionary deeming
For purposes of eligibility for benefits under this subchapter, the Secretary may deem an individual determined under subsection (c) to be an environmental exposure affected individual described in subsection (e)(3) to meet the conditions specified in
(3) Effective date of coverage
An Individual 1 who is deemed eligible for benefits under this subchapter under paragraph (1) or (2) shall be—
(A) entitled to benefits under the program under Part 1 A as of the date of such deeming; and
(B) eligible to enroll in the program under Part 1 B beginning with the month in which such deeming occurs.
(b) Pilot program for care of certain individuals residing in emergency declaration areas
(1) Program; purpose
(A) Primary pilot program
The Secretary shall establish a pilot program in accordance with this subsection to provide innovative approaches to furnishing comprehensive, coordinated, and cost-effective care under this subchapter to individuals described in paragraph (2)(A).
(B) Optional pilot programs
The Secretary may establish a separate pilot program, in accordance with this subsection, with respect to each geographic area subject to an emergency declaration (other than the declaration of June 17, 2009), in order to furnish such comprehensive, coordinated and cost-effective care to individuals described in subparagraph (2)(B) who reside in each such area.
(2) Individual described
For purposes of paragraph (1), an individual described in this paragraph is an individual who enrolls in part B, submits to the Secretary an application to participate in the applicable pilot program under this subsection, and—
(A) is an environmental exposure affected individual described in subsection (e)(2) who resides in or around the geographic area subject to an emergency declaration made as of June 17, 2009; or
(B) is an environmental exposure affected individual described in subsection (e)(3) who—
(i) is deemed under subsection (a)(2); and
(ii) meets such other criteria or conditions for participation in a pilot program under paragraph (1)(B) as the Secretary specifies.
(3) Flexible benefits and services
A pilot program under this subsection may provide for the furnishing of benefits, items, or services not otherwise covered or authorized under this subchapter, if the Secretary determines that furnishing such benefits, items, or services will further the purposes of such pilot program (as described in paragraph (1)).
(4) Innovative reimbursement methodologies
For purposes of the pilot program under this subsection, the Secretary—
(A) shall develop and implement appropriate methodologies to reimburse providers for furnishing benefits, items, or services for which payment is not otherwise covered or authorized under this subchapter, if such benefits, items, or services are furnished pursuant to paragraph (3); and
(B) may develop and implement innovative approaches to reimbursing providers for any benefits, items, or services furnished under this subsection.
(5) Limitation
Consistent with
(6) Waiver authority
The Secretary may waive such provisions of this subchapter and subchapter XI as are necessary to carry out pilot programs under this subsection.
(7) Funding
For purposes of carrying out pilot programs under this subsection, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under
(8) Waiver of budget neutrality
The Secretary shall not require that pilot programs under this subsection be budget neutral with respect to expenditures under this subchapter.
(c) Determinations
(1) By the Commissioner of Social Security
For purposes of this section, the Commissioner of Social Security, in consultation with the Secretary, and using the cost allocation method prescribed in
(2) By the Secretary
The Secretary shall determine eligibility for pilot programs under subsection (b).
(d) Emergency declaration defined
For purposes of this section, the term "emergency declaration" means a declaration of a public health emergency under
(e) Environmental exposure affected individual defined
(1) In general
For purposes of this section, the term "environmental exposure affected individual" means—
(A) an individual described in paragraph (2); and
(B) an individual described in paragraph (3).
(2) Individual described
(A) In general
An individual described in this paragraph is any individual who—
(i) is diagnosed with 1 or more conditions described in subparagraph (B);
(ii) as demonstrated in such manner as the Secretary determines appropriate, has been present for an aggregate total of 6 months in the geographic area subject to an emergency declaration specified in subsection (b)(2)(A), during a period ending—
(I) not less than 10 years prior to such diagnosis; and
(II) prior to the implementation of all the remedial and removal actions specified in the Record of Decision for Operating Unit 4 and the Record of Decision for Operating Unit 7;
(iii) files an application for benefits under this subchapter (or has an application filed on behalf of the individual), including pursuant to this section; and
(iv) is determined under this section to meet the criteria in this subparagraph.
(B) Conditions described
For purposes of subparagraph (A), the following conditions are described in this subparagraph:
(i) Asbestosis, pleural thickening, or pleural plaques as established by—
(I) interpretation by a "B Reader" qualified physician of a plain chest x-ray or interpretation of a computed tomographic radiograph of the chest by a qualified physician, as determined by the Secretary; or
(II) such other diagnostic standards as the Secretary specifies,
except that this clause shall not apply to pleural thickening or pleural plaques unless there are symptoms or conditions requiring medical treatment as a result of these diagnoses.
(ii) Mesothelioma, or malignancies of the lung, colon, rectum, larynx, stomach, esophagus, pharynx, or ovary, as established by—
(I) pathologic examination of biopsy tissue;
(II) cytology from bronchioalveolar lavage; or
(III) such other diagnostic standards as the Secretary specifies.
(iii) Any other diagnosis which the Secretary, in consultation with the Commissioner of Social Security, determines is an asbestos-related medical condition, as established by such diagnostic standards as the Secretary specifies.
(3) Other individual described
An individual described in this paragraph is any individual who—
(A) is not an individual described in paragraph (2);
(B) is diagnosed with a medical condition caused by the exposure of the individual to a public health hazard to which an emergency declaration applies, based on such medical conditions, diagnostic standards, and other criteria as the Secretary specifies;
(C) as demonstrated in such manner as the Secretary determines appropriate, has been present for an aggregate total of 6 months in the geographic area subject to the emergency declaration involved, during a period determined appropriate by the Secretary;
(D) files an application for benefits under this subchapter (or has an application filed on behalf of the individual), including pursuant to this section; and
(E) is determined under this section to meet the criteria in this paragraph.
(Aug. 14, 1935, ch. 531, title XVIII, §1881A, as added
Editorial Notes
References in Text
Parts A and B, referred to in subsecs. (a)(3) and (b)(2), are classified to sections 1395c et seq. and 1395j et seq., respectively, of this title.
1 So in original. Probably should not be capitalized.
§1395ss. Certification of medicare supplemental health insurance policies
(a) Submission of policy by insurer
(1) The Secretary shall establish a procedure whereby medicare supplemental policies (as defined in subsection (g)(1)) may be certified by the Secretary as meeting minimum standards and requirements set forth in subsection (c). Such procedure shall provide an opportunity for any insurer to submit any such policy, and such additional data as the Secretary finds necessary, to the Secretary for his examination and for his certification thereof as meeting the standards and requirements set forth in subsection (c). Subject to subsections (k)(3), (m), and (n), such certification shall remain in effect if the insurer files a notarized statement with the Secretary no later than June 30 of each year stating that the policy continues to meet such standards and requirements and if the insurer submits such additional data as the Secretary finds necessary to independently verify the accuracy of such notarized statement. Where the Secretary determines such a policy meets (or continues to meet) such standards and requirements, he shall authorize the insurer to have printed on such policy (but only in accordance with such requirements and conditions as the Secretary may prescribe) an emblem which the Secretary shall cause to be designed for use as an indication that a policy has received the Secretary's certification. The Secretary shall provide each State commissioner or superintendent of insurance with a list of all the policies which have received his certification.
(2) No medicare supplemental policy may be issued in a State on or after the date specified in subsection (p)(1)(C) unless—
(A) the State's regulatory program under subsection (b)(1) provides for the application and enforcement of the standards and requirements set forth in such subsection (including the 1991 NAIC Model Regulation or 1991 Federal Regulation (as the case may be)) by the date specified in subsection (p)(1)(C); or
(B) if the State's program does not provide for the application and enforcement of such standards and requirements, the policy has been certified by the Secretary under paragraph (1) as meeting the standards and requirements set forth in subsection (c) (including such applicable standards) by such date.
Any person who issues a medicare supplemental policy, on and after the effective date specified in subsection (p)(1)(C), in violation of this paragraph is subject to a civil money penalty of not to exceed $25,000 for each such violation. The provisions of
(b) Standards and requirements; periodic review by Secretary
(1) Any medicare supplemental policy issued in any State which the Secretary determines has established under State law a regulatory program that—
(A) provides for the application and enforcement of standards with respect to such policies equal to or more stringent than the NAIC Model Standards (as defined in subsection (g)(2)(A)), except as otherwise provided by subparagraph (H);
(B) includes requirements equal to or more stringent than the requirements described in paragraphs (2) through (5) of subsection (c);
(C) provides that—
(i) information with respect to the actual ratio of benefits provided to premiums collected under such policies will be reported to the State on forms conforming to those developed by the National Association of Insurance Commissioners for such purpose, or
(ii) such ratios will be monitored under the program in an alternative manner approved by the Secretary, and that a copy of each such policy, the most recent premium for each such policy, and a listing of the ratio of benefits provided to premiums collected for the most recent 3-year period for each such policy issued or sold in the State is maintained and made available to interested persons;
(D) provides for application and enforcement of the standards and requirements described in subparagraphs (A), (B), and (C) to all medicare supplemental policies (as defined in subsection (g)(1)) issued in such State,
(E) provides the Secretary periodically (but at least annually) with a list containing the name and address of the issuer of each such policy and the name and number of each such policy (including an indication of policies that have been previously approved, newly approved, or withdrawn from approval since the previous list was provided),
(F) reports to the Secretary on the implementation and enforcement of standards and requirements of this paragraph at intervals established by the Secretary,
(G) provides for a process for approving or disapproving proposed premium increases with respect to such policies, and establishes a policy for the holding of public hearings prior to approval of a premium increase, and
(H) in the case of a policy that meets the standards under subparagraph (A) except that benefits under the policy are limited to items and services furnished by certain entities (or reduced benefits are provided when items or services are furnished by other entities), provides for the application of requirements equal to or more stringent than the requirements under subsection (t),
shall be deemed (subject to subsections (k)(3), (m), and (n), for so long as the Secretary finds that such State regulatory program continues to meet the standards and requirements of this paragraph) to meet the standards and requirements set forth in subsection (c). Each report required under subparagraph (F) shall include information on loss ratios of policies sold in the State, frequency and types of instances in which policies approved by the State fail to meet the standards and requirements of this paragraph, actions taken by the State to bring such policies into compliance, information regarding State programs implementing consumer protection provisions, and such further information as the Secretary in consultation with the National Association of Insurance Commissioners may specify.
(2) The Secretary periodically shall review State regulatory programs to determine if they continue to meet the standards and requirements specified in paragraph (1). If the Secretary finds that a State regulatory program no longer meets the standards and requirements, before making a final determination, the Secretary shall provide the State an opportunity to adopt such a plan of correction as would permit the State regulatory program to continue to meet such standards and requirements. If the Secretary makes a final determination that the State regulatory program, after such an opportunity, fails to meet such standards and requirements, the program shall no longer be considered to have in operation a program meeting such standards and requirements.
(3) Notwithstanding paragraph (1), a medicare supplemental policy offered in a State shall not be deemed to meet the standards and requirements set forth in subsection (c), with respect to an advertisement (whether through written, radio, or television medium) used (or, at a State's option, to be used) for the policy in the State, unless the entity issuing the policy provides a copy of each advertisement to the Commissioner of Insurance (or comparable officer identified by the Secretary) of that State for review or approval to the extent it may be required under State law.
(c) Requisite findings
The Secretary shall certify under this section any medicare supplemental policy, or continue certification of such a policy, only if he finds that such policy (or, with respect to paragraph (3) or the requirement described in subsection (s), the issuer of the policy)—
(1) meets or exceeds (either in a single policy or, in the case of nonprofit hospital and medical service associations, in one or more policies issued in conjunction with one another) the NAIC Model Standards (except as otherwise provided by subsection (t));
(2) meets the requirements of subsection (r);
(3)(A) accepts a notice under
(B) where such a notice is received—
(i) provides notice to such physician or supplier and the beneficiary of the payment determination under the policy, and
(ii) provides any payment covered by such policy directly to the participating physician or supplier involved;
(C) provides each enrollee at the time of enrollment a card listing the policy name and number and a single mailing address to which notices under
(D) agrees to pay any user fees established under
(E) provides to the Secretary at least annually, for transmittal to carriers, a single mailing address to which notices under
(4) may, during a period of not less than 30 days after the policy is issued, be returned for a full refund of any premiums paid (without regard to the manner in which the purchase of the policy was solicited); and
(5) meets the applicable requirements of subsections (o) through (t).
(d) Criminal penalties; civil penalties for certain violations
(1) Whoever knowingly and willfully makes or causes to be made or induces or seeks to induce the making of any false statement or representation of a material fact with respect to the compliance of any policy with the standards and requirements set forth in subsection (c) or in regulations promulgated pursuant to such subsection, or with respect to the use of the emblem designed by the Secretary under subsection (a), shall be fined under title 18 or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $5,000 for each such prohibited act.
(2) Whoever falsely assumes or pretends to be acting, or misrepresents in any way that he is acting, under the authority of or in association with, the program of health insurance established by this subchapter, or any Federal agency, for the purpose of selling or attempting to sell insurance, or in such pretended character demands, or obtains money, paper, documents, or anything of value, shall be fined under title 18 or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $5,000 for each such prohibited act.
(3)(A)(i) It is unlawful for a person to sell or issue to an individual entitled to benefits under part A or enrolled under part B of this subchapter (including an individual electing a Medicare+Choice plan under
(I) a health insurance policy with knowledge that the policy duplicates health benefits to which the individual is otherwise entitled under this subchapter or subchapter XIX,
(II) in the case of an individual not electing a Medicare+Choice plan, a medicare supplemental policy with knowledge that the individual is entitled to benefits under another medicare supplemental policy or in the case of an individual electing a Medicare+Choice plan, a medicare supplemental policy with knowledge that the policy duplicates health benefits to which the individual is otherwise entitled under the Medicare+Choice plan or under another medicare supplemental policy, or
(III) a health insurance policy (other than a medicare supplemental policy) with knowledge that the policy duplicates health benefits to which the individual is otherwise entitled, other than benefits to which the individual is entitled under a requirement of State or Federal law.
(ii) Whoever violates clause (i) shall be fined under title 18 or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a person other than the issuer of the policy) for each such prohibited act.
(iii) A seller (who is not the issuer of a health insurance policy) shall not be considered to violate clause (i)(II) with respect to the sale of a medicare supplemental policy if the policy is sold in compliance with subparagraph (B).
(iv) For purposes of this subparagraph, a health insurance policy (other than a Medicare supplemental policy) providing for benefits which are payable to or on behalf of an individual without regard to other health benefit coverage of such individual is not considered to "duplicate" any health benefits under this subchapter, under subchapter XIX, or under a health insurance policy, and subclauses (I) and (III) of clause (i) do not apply to such a policy.
(v) For purposes of this subparagraph, a health insurance policy (or a rider to an insurance contract which is not a health insurance policy) is not considered to "duplicate" health benefits under this subchapter or under another health insurance policy if it—
(I) provides health care benefits only for long-term care, nursing home care, home health care, or community-based care, or any combination thereof,
(II) coordinates against or excludes items and services available or paid for under this subchapter or under another health insurance policy, and
(III) for policies sold or issued on or after the end of the 90-day period beginning on August 21, 1996, discloses such coordination or exclusion in the policy's outline of coverage.
For purposes of this clause, the terms "coordinates" and "coordination" mean, with respect to a policy in relation to health benefits under this subchapter or under another health insurance policy, that the policy under its terms is secondary to, or excludes from payment, items and services to the extent available or paid for under this subchapter or under another health insurance policy.
(vi)(I) An individual entitled to benefits under part A or enrolled under part B of this subchapter who is applying for a health insurance policy (other than a policy described in subclause (III)) shall be furnished a disclosure statement described in clause (vii) for the type of policy being applied for. Such statement shall be furnished as a part of (or together with) the application for such policy.
(II) Whoever issues or sells a health insurance policy (other than a policy described in subclause (III)) to an individual described in subclause (I) and fails to furnish the appropriate disclosure statement as required under such subclause shall be fined under title 18, or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a person other than the issuer of the policy) for each such violation.
(III) A policy described in this subclause (to which subclauses (I) and (II) do not apply) is a Medicare supplemental policy, a policy described in clause (v), or a health insurance policy identified under 60 Federal Register 30880 (June 12, 1995) as a policy not required to have a disclosure statement.
(IV) Any reference in this section to the revised NAIC model regulation (referred to in subsection (m)(1)(A)) is deemed a reference to such regulation as revised by section 171(m)(2) of the Social Security Act Amendments of 1994 (
(vii) The disclosure statement described in this clause for a type of policy is the statement specified under subparagraph (D) of this paragraph (as in effect before August 21, 1996) for that type of policy, as revised as follows:
(I) In each statement, amend the second line to read as follows:
"THIS IS NOT MEDICARE SUPPLEMENT
INSURANCE".
(II) In each statement, strike the third line and insert the following: "Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.".
(III) In each statement not described in subclause (V), strike the boldface matter that begins "This insurance" and all that follows up to the next paragraph that begins "Medicare".
(IV) In each statement not described in subclause (V), insert before the boxed matter (that states "Before You Buy This Insurance") the following: "This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.".
(V) In a statement relating to policies providing both nursing home and non-institutional coverage, to policies providing nursing home benefits only, or policies providing home care benefits only, amend the sentence that begins "Federal law" to read as follows: "Federal law requires us to inform you that in certain situations this insurance may pay for some care also covered by Medicare.".
(viii)(I) Subject to subclause (II), nothing in this subparagraph shall restrict or preclude a State's ability to regulate health insurance policies, including any health insurance policy that is described in clause (iv), (v), or (vi)(III).
(II) A State may not declare or specify, in statute, regulation, or otherwise, that a health insurance policy (other than a Medicare supplemental policy) or rider to an insurance contract which is not a health insurance policy, that is described in clause (iv), (v), or (vi)(III) and that is sold, issued, or renewed to an individual entitled to benefits under part A or enrolled under part B "duplicates" health benefits under this subchapter or under a Medicare supplemental policy.
(B)(i) It is unlawful for a person to issue or sell a medicare supplemental policy to an individual entitled to benefits under part A or enrolled under part B, whether directly, through the mail, or otherwise, unless—
(I) the person obtains from the individual, as part of the application for the issuance or purchase and on a form described in clause (ii), a written statement signed by the individual stating, to the best of the individual's knowledge, what health insurance policies (including any Medicare+Choice plan) the individual has, from what source, and whether the individual is entitled to any medical assistance under subchapter XIX, whether as a qualified medicare beneficiary or otherwise, and
(II) the written statement is accompanied by a written acknowledgment, signed by the seller of the policy, of the request for and receipt of such statement.
(ii) The statement required by clause (i) shall be made on a form that—
(I) states in substance that a medicare-eligible individual does not need more than one medicare supplemental policy,
(II) states in substance that individuals may be eligible for benefits under the State medicaid program under subchapter XIX and that such individuals who are entitled to benefits under that program usually do not need a medicare supplemental policy and that benefits and premiums under any such policy shall be suspended upon request of the policyholder during the period (of not longer than 24 months) of entitlement to benefits under such subchapter and may be reinstituted upon loss of such entitlement, and
(III) states that counseling services may be available in the State to provide advice concerning the purchase of medicare supplemental policies and enrollment under the medicaid program and may provide the telephone number for such services.
(iii)(I) Except as provided in subclauses (II) and (III), if the statement required by clause (i) is not obtained or indicates that the individual has a medicare supplemental policy or indicates that the individual is entitled to any medical assistance under subchapter XIX, the sale of a medicare supplemental policy shall be considered to be a violation of subparagraph (A).
(II) Subclause (I) shall not apply in the case of an individual who has a medicare supplemental policy, if the individual indicates in writing, as part of the application for purchase, that the policy being purchased replaces such other policy and indicates an intent to terminate the policy being replaced when the new policy becomes effective and the issuer or seller certifies in writing that such policy will not, to the best of the issuer's or seller's knowledge, duplicate coverage (taking into account any such replacement).
(III) If the statement required by clause (i) is obtained and indicates that the individual is entitled to any medical assistance under subchapter XIX, the sale of the policy is not in violation of clause (i) (insofar as such clause relates to such medical assistance), if (aa) a State medicaid plan under such subchapter pays the premiums for the policy, (bb) in the case of a qualified medicare beneficiary described in
(iv) Whoever issues or sells a medicare supplemental policy in violation of this subparagraph shall be fined under title 18, or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a seller who is not the issuer of a policy) for each such violation.
(C) Subparagraph (A) shall not apply with respect to the sale or issuance of a group policy or plan of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations (or combination thereof), for employees or former employees (or combination thereof) or for members or former members (or combination thereof) of the labor organizations.
(4)(A) Whoever knowingly, directly or through his agent, mails or causes to be mailed any matter for a prohibited purpose (as determined under subparagraph (B)) shall be fined under title 18 or imprisoned not more than 5 years, or both, and, in addition to or in lieu of such a criminal penalty, is subject to a civil money penalty of not to exceed $5,000 for each such prohibited act.
(B) For purposes of subparagraph (A), a prohibited purpose means the advertising, solicitation, or offer for sale of a medicare supplemental policy, or the delivery of such a policy, in or into any State in which such policy has not been approved by the State commissioner or superintendent of insurance.
(C) Subparagraph (A) shall not apply in the case of a person who mails or causes to be mailed a medicare supplemental policy into a State if such person has ascertained that the party insured under such policy to whom (or on whose behalf) such policy is mailed is located in such State on a temporary basis.
(D) Subparagraph (A) shall not apply in the case of a person who mails or causes to be mailed a duplicate copy of a medicare supplemental policy previously issued to the party to whom (or on whose behalf) such duplicate copy is mailed.
(E) Subparagraph (A) shall not apply in the case of an issuer who mails or causes to be mailed a policy, certificate, or other matter solely to comply with the requirements of subsection (q).
(5) The provisions of
(e) Dissemination of information
(1) The Secretary shall provide to all individuals entitled to benefits under this subchapter (and, to the extent feasible, to individuals about to become so entitled) such information as will permit such individuals to evaluate the value of medicare supplemental policies to them and the relationship of any such policies to benefits provided under this subchapter.
(2) The Secretary shall—
(A) inform all individuals entitled to benefits under this subchapter (and, to the extent feasible, individuals about to become so entitled) of—
(i) the actions and practices that are subject to sanctions under subsection (d), and
(ii) the manner in which they may report any such action or practice to an appropriate official of the Department of Health and Human Services (or to an appropriate State official), and
(B) publish the toll-free telephone number for individuals to report suspected violations of the provisions of such subsection.
(3) The Secretary shall provide individuals entitled to benefits under this subchapter (and, to the extent feasible, individuals about to become so entitled) with a listing of the addresses and telephone numbers of State and Federal agencies and offices that provide information and assistance to individuals with respect to the selection of medicare supplemental policies.
(f) Study and evaluation of comparative effectiveness of various State approaches to regulating medicare supplemental policies; report to Congress no later than January 1, 1982; periodic evaluations
(1)(A) The Secretary shall, in consultation with Federal and State regulatory agencies, the National Association of Insurance Commissioners, private insurers, and organizations representing consumers and the aged, conduct a comprehensive study and evaluation of the comparative effectiveness of various State approaches to the regulation of medicare supplemental policies in (i) limiting marketing and agent abuse, (ii) assuring the dissemination of such information to individuals entitled to benefits under this subchapter (and to other consumers) as is necessary to permit informed choice, (iii) promoting policies which provide reasonable economic benefits for such individuals, (iv) reducing the purchase of unnecessary duplicative coverage, (v) improving price competition, and (vi) establishing effective approved State regulatory programs described in subsection (b).
(B) Such study shall also address the need for standards or certification of health insurance policies, other than medicare supplemental policies, sold to individuals eligible for benefits under this subchapter.
(C) The Secretary shall, no later than January 1, 1982, submit a report to the Congress on the results of such study and evaluation, accompanied by such recommendations as the Secretary finds warranted by such results with respect to the need for legislative or administrative changes to accomplish the objectives set forth in subparagraphs (A) and (B), including the need for a mandatory Federal regulatory program to assure the marketing of appropriate types of medicare supplemental policies, and such other means as he finds may be appropriate to enhance effective State regulation of such policies.
(2) The Secretary shall submit to the Congress no later than July 1, 1982, and periodically as may be appropriate thereafter (but not less often than once every 2 years), a report evaluating the effectiveness of the certification procedure and the criminal penalties established under this section, and shall include in such reports an analysis of—
(A) the impact of such procedure and penalties on the types, market share, value, and cost to individuals entitled to benefits under this subchapter of medicare supplemental policies which have been certified by the Secretary;
(B) the need for any change in the certification procedure to improve its administration or effectiveness; and
(C) whether the certification program and criminal penalties should be continued.
(3) The Secretary shall provide information via a toll-free telephone number on medicare supplemental policies (including the relationship of State programs under subchapter XIX to such policies).
(g) Definitions
(1) For purposes of this section, a medicare supplemental policy is a health insurance policy or other health benefit plan offered by a private entity to individuals who are entitled to have payment made under this subchapter, which provides reimbursement for expenses incurred for services and items for which payment may be made under this subchapter but which are not reimbursable by reason of the applicability of deductibles, coinsurance amounts, or other limitations imposed pursuant to this subchapter; but does not include a prescription drug plan under part D or a Medicare+Choice plan or any such policy or plan of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations (or combination thereof), for employees or former employees (or combination thereof) or for members or former members (or combination thereof) of the labor organizations and does not include a policy or plan of an eligible organization (as defined in
(2) For purposes of this section:
(A) The term "NAIC Model Standards" means the "NAIC Model Regulation to Implement the Individual Accident and Sickness Insurance Minimum Standards Act", adopted by the National Association of Insurance Commissioners on June 6, 1979, as it applies to medicare supplemental policies.
(B) The term "State with an approved regulatory program" means a State for which the Secretary has made a determination under subsection (b)(1).
(C) The State in which a policy is issued means—
(i) in the case of an individual policy, the State in which the policyholder resides; and
(ii) in the case of a group policy, the State in which the holder of the master policy resides.
(h) Rules and regulations
The Secretary shall prescribe such regulations as may be necessary for the effective, efficient, and equitable administration of the certification procedure established under this section. The Secretary shall first issue final regulations to implement the certification procedure established under subsection (a) not later than March 1, 1981.
(i) Commencement of certification program
(1) No medicare supplemental policy shall be certified and no such policy may be issued bearing the emblem authorized by the Secretary under subsection (a) until July 1, 1982. On and after such date policies certified by the Secretary may bear such emblem, including policies which were issued prior to such date and were subsequently certified, and insurers may notify holders of such certified policies issued prior to such date using such emblem in the notification.
(2)(A) The Secretary shall not implement the certification program established under subsection (a) with respect to policies issued in a State unless the Panel makes a finding that such State cannot be expected to have established, by July 1, 1982, an approved State regulatory program meeting the standards and requirements of subsection (b)(1). If the Panel makes such a finding, the Secretary shall implement such program under subsection (a) with respect to medicare supplemental policies issued in such State, until such time as the Panel determines that such State has a program that meets the standards and requirements of subsection (b)(1).
(B) Any finding by the Panel under subparagraph (A) shall be transmitted in writing, not later than January 1, 1982, to the Committee on Finance of the Senate and to the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives and shall not become effective until 60 days after the date of its transmittal to the Committees of the Congress under this subparagraph. In counting such days, days on which either House is not in session because of an adjournment sine die or an adjournment of more than three days to a day certain are excluded in the computation.
(j) State regulation of policies issued in other States
Nothing in this section shall be construed so as to affect the right of any State to regulate medicare supplemental policies which, under the provisions of this section, are considered to be issued in another State.
(k) Amended NAIC Model Regulation or Federal model standards applicable; effective date; medicare supplemental policy and State regulatory program meeting applicable standards
(1)(A) If, within the 90-day period beginning on July 1, 1988, the National Association of Insurance Commissioners (in this subsection referred to as the "Association") amends the NAIC Model Regulation adopted on June 6, 1979 (as it relates to medicare supplemental policies), with respect to matters such as minimum benefit standards, loss ratios, disclosure requirements, and replacement requirements and provisions otherwise necessary to reflect the changes in law made by the Medicare Catastrophic Coverage Act of 1988, except as provided in subsection (m), subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the Model Regulation as amended by the Association in accordance with this paragraph (in this subsection and subsection (l) referred to as the "amended NAIC Model Regulation").
(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the amended NAIC Model Regulation or 1 year after the date the Association first adopts such amended Regulation.
(2)(A) If the Association does not amend the NAIC Model Regulation within the 90-day period specified in paragraph (1)(A), the Secretary shall promulgate, not later than 60 days after the end of such period, Federal model standards (in this subsection and subsection (1) 1 referred to as "Federal model standards") for medicare supplemental policies to reflect the changes in law made by the Medicare Catastrophic Coverage Act of 1988, and subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to Federal model standards.
(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the Federal model standards or 1 year after the date the Secretary first promulgates such standards.
(3) Notwithstanding any other provision of this section (except as provided in subsections (l), (m), and (n))—
(A) no medicare supplemental policy may be certified by the Secretary pursuant to subsection (a),
(B) no certification made pursuant to subsection (a) shall remain in effect, and
(C) no State regulatory program shall be found to meet (or to continue to meet) the requirements of subsection (b)(1)(A),
unless such policy meets (or such program provides for the application of standards equal to or more stringent than) the standards set forth in the amended NAIC Model Regulation or the Federal model standards (as the case may be) by the date specified in paragraph (1)(B) or (2)(B) (as the case may be).
(l) Transitional compliance with NAIC Model Transition Regulation; "qualifying medicare supplemental policy" and "NAIC Model Transition Regulation" defined
(1) Until the date specified in paragraph (3), in the case of a qualifying medicare supplemental policy described in paragraph (2) issued—
(A) before January 1, 1989, the policy is deemed to remain in compliance with this section if the insurer issuing the policy complies with the NAIC Model Transition Regulation (including giving notices to subscribers and filing for premium adjustments with the State as described in section 5.B. of such Regulation) by January 1, 1989; or
(B) on or after January 1, 1989, the policy is deemed to be in compliance with this section if the insurer issuing the policy complies with the NAIC Model Transition Regulation before the date of the sale of the policy.
(2) In paragraph (1), the term "qualifying medicare supplemental policy" means a medicare supplemental policy—
(A) issued in a State which—
(i) has not adopted standards equal to or more stringent than the NAIC Model Transition Regulation by January 1, 1989, and
(ii) has not adopted standards equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards) by January 1, 1989; and
(B) which has been issued in compliance with this section (as in effect on June 1, 1988).
(3)(A) The date specified in this paragraph is the earlier of—
(i) the first date a State adopts, after January 1, 1989, standards equal to or more stringent than the NAIC Model Transition Regulation or equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards), as the case may be, or
(ii) the later of (I) the date specified in subsection (k)(1)(B) or (k)(2)(B) (as the case may be), or (II) the date specified in subparagraph (B).
(B) In the case of a State which the Secretary identifies as—
(i) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to meet standards described in subparagraph (A)(i), but
(ii) having a legislature which is not scheduled to meet in 1989 in a legislative session in which such legislation may be considered,
the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1989, and in which legislation described in clause (i) may be considered. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.
(4) In the case of a medicare supplemental policy in effect on January 1, 1989, and offered in a State which, as of such date—
(A) has adopted standards equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards), but
(B) does not have in effect standards equal to or more stringent than the NAIC Model Transition Regulation (or otherwise requiring notice substantially the same as the notice required in section 5.B. of such Regulation),
the policy shall not be deemed to meet the standards in subsection (c) unless each individual who is entitled to benefits under this subchapter and is a policyholder under such policy on January 1, 1989, is sent such a notice in any appropriate form by not later than January 31, 1989, that explains—
(A) the improved benefits under this subchapter contained in the Medicare Catastrophic Coverage Act of 1988, and
(B) how these improvements affect the benefits contained in the policies and the premium for the policy.
(5) In this subsection, the term "NAIC Model Transition Regulation" refers to the standards contained in the "Model Regulation to Implement Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions" (as adopted by the National Association of Insurance Commissioners in September 1987).
(m) Revision of amended NAIC Model Regulation and amended Federal model standards; effective dates; medicare supplemental policy and State regulatory program meeting applicable standards
(1)(A) If, within the 90-day period beginning on December 13, 1989, the National Association of Insurance Commissioners (in this subsection and subsection (n) referred to as the "Association") revises the amended NAIC Model Regulation (referred to in subsection (k)(1)(A) and adopted on September 20, 1988) to improve such regulation and otherwise to reflect the changes in law made by the Medicare Catastrophic Coverage Repeal Act of 1989, subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the amended NAIC Model Regulation (referred to in subsection (k)(1)(A)) as revised by the Association in accordance with this paragraph (in this subsection and subsection (n) referred to as the "revised NAIC Model Regulation").
(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the revised NAIC Model Regulation or 1 year after the date the Association first adopts such revised Regulation.
(2)(A) If the Association does not revise the amended NAIC Model Regulation, within the 90-day period specified in paragraph (1)(A), the Secretary shall promulgate, not later than 60 days after the end of such period, revised Federal model standards (in this subsection and subsection (n) referred to as "revised Federal model standards") for medicare supplemental policies to improve such standards and otherwise to reflect the changes in law made by the Medicare Catastrophic Coverage Repeal Act of 1989, subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the revised Federal model standards.
(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the revised Federal model standards or 1 year after the date the Secretary first promulgates such standards.
(3) Notwithstanding any other provision of this section (except as provided in subsection (n))—
(A) no medicare supplemental policy may be certified by the Secretary pursuant to subsection (a),
(B) no certification made pursuant to subsection (a) shall remain in effect, and
(C) no State regulatory program shall be found to meet (or to continue to meet) the requirements of subsection (b)(1)(A),
unless such policy meets (or such program provides for the application of standards equal to or more stringent than) the standards set forth in the revised NAIC Model Regulation or the revised Federal model standards (as the case may be) by the date specified in paragraph (1)(B) or (2)(B) (as the case may be).
(n) Transition compliance with revision of NAIC Model Regulation and Federal model standards
(1) Until the date specified in paragraph (4), in the case of a qualifying medicare supplemental policy described in paragraph (3) issued in a State—
(A) before the transition deadline, the policy is deemed to remain in compliance with the standards described in subsection (b)(1)(A) only if the insurer issuing the policy complies with the transition provision described in paragraph (2), or
(B) on or after the transition deadline, the policy is deemed to be in compliance with the standards described in subsection (b)(1)(A) only if the insurer issuing the policy complies with the revised NAIC Model Regulation or the revised Federal model standards (as the case may be) before the date of the sale of the policy.
In this paragraph, the term "transition deadline" means 1 year after the date the Association adopts the revised NAIC Model Regulation or 1 year after the date the Secretary promulgates revised Federal model standards (as the case may be).
(2) The transition provision described in this paragraph is—
(A) such transition provision as the Association provides, by not later than December 15, 1989, so as to provide for an appropriate transition (i) to restore benefit provisions which are no longer duplicative as a result of the changes in benefits under this subchapter made by the Medicare Catastrophic Coverage Repeal Act of 1989 and (ii) to eliminate the requirement of payment for the first 8 days of coinsurance for extended care services, or
(B) if the Association does not provide for a transition provision by the date described in subparagraph (A), such transition provision as the Secretary shall provide, by January 1, 1990, so as to provide for an appropriate transition described in subparagraph (A).
(3) In paragraph (1), the term "qualifying medicare supplemental policy" means a medicare supplemental policy which has been issued in compliance with this section as in effect on the date before December 13, 1989.
(4)(A) The date specified in this paragraph for a policy issued in a State is—
(i) the first date a State adopts, after December 13, 1989, standards equal to or more stringent than the revised NAIC Model Regulation (or revised Federal model standards), as the case may be, or
(ii) the date specified in subparagraph (B),
whichever is earlier.
(B) In the case of a State which the Secretary identifies, in consultation with the Association, as—
(i) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to meet standards described in subparagraph (A)(i), but
(ii) having a legislature which is not scheduled to meet in 1990 in a legislative session in which such legislation may be considered,
the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1990. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.
(5) In the case of a medicare supplemental policy in effect on January 1, 1990, the policy shall not be deemed to meet the standards in subsection (c) unless each individual who is entitled to benefits under this subchapter and is a policyholder or certificate holder under such policy on such date is sent a notice in an appropriate form by not later than January 31, 1990, that explains—
(A) the changes in benefits under this subchapter effected by the Medicare Catastrophic Coverage Repeal Act of 1989, and
(B) how these changes may affect the benefits contained in such policy and the premium for the policy.
(6)(A) Except as provided in subparagraph (B), in the case of an individual who had in effect, as of December 31, 1988, a medicare supplemental policy with an insurer (as a policyholder or, in the case of a group policy, as a certificate holder) and the individual terminated coverage under such policy before December 13, 1989, no medicare supplemental policy of the insurer shall be deemed to meet the standards in subsection (c) unless the insurer—
(i) provides written notice, no earlier than December 15, 1989, and no later than January 30, 1990, to the policyholder or certificate holder (at the most recent available address) of the offer described in clause (ii), and
(ii) offers the individual, during a period of at least 60 days beginning not later than February 1, 1990, reinstitution of coverage (with coverage effective as of January 1, 1990), under the terms which (I) do not provide for any waiting period with respect to treatment of pre-existing conditions, (II) provides for coverage which is substantially equivalent to coverage in effect before the date of such termination, and (III) provides for classification of premiums on which terms are at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage never terminated.
(B) An insurer is not required to make the offer under subparagraph (A)(ii) in the case of an individual who is a policyholder or certificate holder in another medicare supplemental policy as of December 13, 1989, if (as of January 1, 1990) the individual is not subject to a waiting period with respect to treatment of a pre-existing condition under such other policy.
(o) Requirements of group benefits; core group benefits; uniform outline of coverage
The requirements of this subsection are as follows:
(1) Each medicare supplemental policy shall provide for coverage of a group of benefits consistent with subsections (p), (v) 2 (w), and (y).
(2) If the medicare supplemental policy provides for coverage of a group of benefits other than the core group of basic benefits described in subsection (p)(2)(B), the issuer of the policy must make available to the individual a medicare supplemental policy with only such core group of basic benefits.
(3) The issuer of the policy has provided, before the sale of the policy, an outline of coverage that uses uniform language and format (including layout and print size) that facilitates comparison among medicare supplemental policies and comparison with medicare benefits.
(4) The issuer of the medicare supplemental policy complies with subsection (s)(2)(E) and subsection (x).
(5) In addition to the requirement under paragraph (2), the issuer of the policy must make available to the individual at least Medicare supplemental policies with benefit packages classified as "C" or "F".
(p) Standards for group benefits
(1)(A) If, within 9 months after November 5, 1990, the National Association of Insurance Commissioners (in this subsection referred to as the "Association") changes the revised NAIC Model Regulation (described in subsection (m)) to incorporate—
(i) limitations on the groups or packages of benefits that may be offered under a medicare supplemental policy consistent with paragraphs (2) and (3) of this subsection,
(ii) uniform language and definitions to be used with respect to such benefits,
(iii) uniform format to be used in the policy with respect to such benefits, and
(iv) other standards to meet the additional requirements imposed by the amendments made by the Omnibus Budget Reconciliation Act of 1990,
subsection (g)(2)(A) shall be applied in each State, effective for policies issued to policyholders on and after the date specified in subparagraph (C), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the revised NAIC Model Regulation as changed under this subparagraph (such changed regulation referred to in this section as the "1991 NAIC Model Regulation").
(B) If the Association does not make the changes in the revised NAIC Model Regulation within the 9-month period specified in subparagraph (A), the Secretary shall promulgate, not later than 9 months after the end of such period, a regulation and subsection (g)(2)(A) shall be applied in each State, effective for policies issued to policyholders on and after the date specified in subparagraph (C), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the revised NAIC Model Regulation as changed by the Secretary under this subparagraph (such changed regulation referred to in this section as the "1991 Federal Regulation").
(C)(i) Subject to clause (ii), the date specified in this subparagraph for a State is the date the State adopts the 1991 NAIC Model Regulation or 1991 Federal Regulation or 1 year after the date the Association or the Secretary first adopts such standards, whichever is earlier.
(ii) In the case of a State which the Secretary identifies, in consultation with the Association, as—
(I) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to meet the 1991 NAIC Model Regulation or 1991 Federal Regulation, but
(II) having a legislature which is not scheduled to meet in 1992 in a legislative session in which such legislation may be considered,
the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1992. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.
(D) In promulgating standards under this paragraph, the Association or Secretary shall consult with a working group composed of representatives of issuers of medicare supplemental policies, consumer groups, medicare beneficiaries, and other qualified individuals. Such representatives shall be selected in a manner so as to assure balanced representation among the interested groups.
(E) If benefits (including deductibles and coinsurance) under this subchapter are changed and the Secretary determines, in consultation with the Association, that changes in the 1991 NAIC Model Regulation or 1991 Federal Regulation are needed to reflect such changes, the preceding provisions of this paragraph shall apply to the modification of standards previously established in the same manner as they applied to the original establishment of such standards.
(2) The benefits under the 1991 NAIC Model Regulation or 1991 Federal Regulation shall provide—
(A) for such groups or packages of benefits as may be appropriate taking into account the considerations specified in paragraph (3) and the requirements of the succeeding subparagraphs;
(B) for identification of a core group of basic benefits common to all policies; and
(C) that, subject to paragraph (4)(B), the total number of different benefit packages (counting the core group of basic benefits described in subparagraph (B) and each other combination of benefits that may be offered as a separate benefit package) that may be established in all the States and by all issuers shall not exceed 10 plus the 2 plans described in paragraph (11)(A).
(3) The benefits under paragraph (2) shall, to the extent possible—
(A) provide for benefits that offer consumers the ability to purchase the benefits that are available in the market as of November 5, 1990; and
(B) balance the objectives of (i) simplifying the market to facilitate comparisons among policies, (ii) avoiding adverse selection, (iii) providing consumer choice, (iv) providing market stability, and (v) promoting competition.
(4)(A)(i) Except as provided in subparagraph (B) or paragraph (6), no State with a regulatory program approved under subsection (b)(1) may provide for or permit the grouping of benefits (or language or format with respect to such benefits) under a medicare supplemental policy unless such grouping meets the applicable 1991 NAIC Model Regulation or 1991 Federal Regulation.
(ii) Except as provided in subparagraph (B), the Secretary may not provide for or permit the grouping of benefits (or language or format with respect to such benefits) under a medicare supplemental policy seeking approval by the Secretary unless such grouping meets the applicable 1991 NAIC Model Regulation or 1991 Federal Regulation.
(B) With the approval of the State (in the case of a policy issued in a State with an approved regulatory program) or the Secretary (in the case of any other policy), the issuer of a medicare supplemental policy may offer new or innovative benefits in addition to the benefits provided in a policy that otherwise complies with the applicable 1991 NAIC Model Regulation or 1991 Federal Regulation. Any such new or innovative benefits may include benefits that are not otherwise available and are cost-effective and shall be offered in a manner which is consistent with the goal of simplification of medicare supplemental policies.
(5)(A) Except as provided in subparagraph (B), this subsection shall not be construed as preventing a State from restricting the groups of benefits that may be offered in medicare supplemental policies in the State.
(B) A State with a regulatory program approved under subsection (b)(1) may not restrict under subparagraph (A) the offering of a medicare supplemental policy consisting only of the core group of benefits described in paragraph (2)(B).
(6) The Secretary may waive the application of standards described in clauses (i) through (iii) of paragraph (1)(A) in those States that on November 5, 1990, had in place an alternative simplification program.
(7) This subsection shall not be construed as preventing an issuer of a medicare supplemental policy who otherwise meets the requirements of this section from providing, through an arrangement with a vendor, for discounts from that vendor to policyholders or certificateholders for the purchase of items or services not covered under its medicare supplemental policies.
(8) Any person who sells or issues a medicare supplemental policy, on and after the effective date specified in paragraph (1)(C) (but subject to paragraph (10)), in violation of the applicable 1991 NAIC Model Regulation or 1991 Federal Regulation insofar as such regulation relates to the requirements of subsection (o) or (q) or clause (i), (ii), or (iii) of paragraph (1)(A) is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a seller who is not an issuer of a policy) for each such violation. The provisions of
(9)(A) Anyone who sells a medicare supplemental policy to an individual shall make available for sale to the individual a medicare supplemental policy with only the core group of basic benefits (described in paragraph (2)(B)).
(B) Anyone who sells a medicare supplemental policy to an individual shall provide the individual, before the sale of the policy, an outline of coverage which describes the benefits under the policy. Such outline shall be on a standard form approved by the State regulatory program or the Secretary (as the case may be) consistent with the 1991 NAIC Model Regulation or 1991 Federal Regulation under this subsection.
(C) Whoever sells a medicare supplemental policy in violation of this paragraph is subject to a civil money penalty of not to exceed $25,000 (or $15,000 in the case of a seller who is not the issuer of the policy) for each such violation. The provisions of
(D) Subject to paragraph (10), this paragraph shall apply to sales of policies occurring on or after the effective date specified in paragraph (1)(C).
(10) No penalty may be imposed under paragraph (8) or (9) in the case of a seller who is not the issuer of a policy until the Secretary has published a list of the groups of benefit packages that may be sold or issued consistent with paragraph (1)(A)(i).
(11)(A) For purposes of paragraph (2), the benefit packages described in this subparagraph are as follows:
(i) The benefit package classified as "F" under the standards established by such paragraph, except that it has a high deductible feature.
(ii) The benefit package classified as "J" under the standards established by such paragraph, except that it has a high deductible feature.
(B) For purposes of subparagraph (A), a high deductible feature is one which—
(i) requires the beneficiary of the policy to pay annual out-of-pocket expenses (other than premiums) in the amount specified in subparagraph (C) before the policy begins payment of benefits, and
(ii) covers 100 percent of covered out-of-pocket expenses once such deductible has been satisfied in a year.
(C) The amount specified in this subparagraph—
(i) for 1998 and 1999 is $1,500, and
(ii) for a subsequent year, is the amount specified in this subparagraph for the previous year increased by the percentage increase in the Consumer Price Index for all urban consumers (all items; U.S. city average) for the 12-month period ending with August of the preceding year.
If any amount determined under clause (ii) is not a multiple of $10, it shall be rounded to the nearest multiple of $10.
(q) Guaranteed renewal of policies; termination; suspension
The requirements of this subsection are as follows:
(1) Each medicare supplemental policy shall be guaranteed renewable and—
(A) the issuer may not cancel or nonrenew the policy solely on the ground of health status of the individual; and
(B) the issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.
(2) If the medicare supplemental policy is terminated by the group policyholder and is not replaced as provided under paragraph (4), the issuer shall offer certificateholders an individual medicare supplemental policy which (at the option of the certificateholder)—
(A) provides for continuation of the benefits contained in the group policy, or
(B) provides for such benefits as otherwise meets 3 the requirements of this section.
(3) If an individual is a certificateholder in a group medicare supplemental policy and the individual terminates membership in the group, the issuer shall—
(A) offer the certificateholder the conversion opportunity described in paragraph (2), or
(B) at the option of the group policyholder, offer the certificateholder continuation of coverage under the group policy.
(4) If a group medicare supplemental policy is replaced by another group medicare supplemental policy purchased by the same policyholder, issuer 4 of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.
(5)(A) Each medicare supplemental policy shall provide that benefits and premiums under the policy shall be suspended at the request of the policyholder for the period (not to exceed 24 months) in which the policyholder has applied for and is determined to be entitled to medical assistance under subchapter XIX, but only if the policyholder notifies the issuer of such policy within 90 days after the date the individual becomes entitled to such assistance. If such suspension occurs and if the policyholder or certificate holder loses entitlement to such medical assistance, such policy shall be automatically reinstituted (effective as of the date of termination of such entitlement) under terms described in subsection (n)(6)(A)(ii) as of the termination of such entitlement if the policyholder provides notice of loss of such entitlement within 90 days after the date of such loss.
(B) Nothing in this section shall be construed as affecting the authority of a State, under subchapter XIX, to purchase a medicare supplemental policy for an individual otherwise entitled to assistance under such subchapter.
(C) Any person who issues a medicare supplemental policy and fails to comply with the requirements of this paragraph or paragraph (6) is subject to a civil money penalty of not to exceed $25,000 for each such violation. The provisions of
(6) Each medicare supplemental policy shall provide that benefits and premiums under the policy shall be suspended at the request of the policyholder if the policyholder is entitled to benefits under
(r) Required ratio of aggregate benefits to aggregate premiums
(1) A medicare supplemental policy may not be issued or renewed (or otherwise provide coverage after the date described in subsection (p)(1)(C)) in any State unless—
(A) the policy can be expected for periods after the effective date of these provisions (as estimated for the entire period for which rates are computed to provide coverage, on the basis of incurred claims experience and earned premiums for such periods and in accordance with a uniform methodology, including uniform reporting standards, developed by the National Association of Insurance Commissioners) to return to policyholders in the form of aggregate benefits provided under the policy, at least 75 percent of the aggregate amount of premiums collected in the case of group policies and at least 65 percent in the case of individual policies; and
(B) the issuer of the policy provides for the issuance of a proportional refund, or a credit against future premiums of a proportional amount, based on the premium paid and in accordance with paragraph (2), of the amount of premiums received necessary to assure that the ratio of aggregate benefits provided to the aggregate premiums collected (net of such refunds or credits) complies with the expectation required under subparagraph (A), treating policies of the same type as a single policy for each standard package.
For purposes of applying subparagraph (A) only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising (including both print and broadcast advertising) shall be deemed to be individual policies. For the purpose of calculating the refund or credit required under paragraph (1)(B) for a policy issued before the date specified in subsection (p)(1)(C), the refund or credit calculation shall be based on the aggregate benefits provided and premiums collected under all such policies issued by an insurer in a State (separated as to individual and group policies) and shall be based only on aggregate benefits provided and premiums collected under such policies after the date specified in section 171(m)(4) of the Social Security Act Amendments of 1994.
(2)(A) Paragraph (1)(B) shall be applied with respect to each type of policy by standard package. Paragraph (1)(B) shall not apply to a policy until 12 months following issue. The Comptroller General, in consultation with the National Association of Insurance Commissioners, shall submit to Congress a report containing recommendations on adjustments in the percentages under paragraph (1)(A) that may be appropriate. In the case of a policy issued before the date specified in subsection (p)(1)(C), paragraph (1)(B) shall not apply until 1 year after the date specified in section 171(m)(4) of the Social Security Act Amendments of 1994.
(B) A refund or credit required under paragraph (1)(B) shall be made to each policyholder insured under the applicable policy as of the last day of the year involved.
(C) Such a refund or credit shall include interest from the end of the calendar year involved until the date of the refund or credit at a rate as specified by the Secretary for this purpose from time to time which is not less than the average rate of interest for 13-week Treasury notes.
(D) For purposes of this paragraph and paragraph (1)(B), refunds or credits against premiums due shall be made, with respect to a calendar year, not later than the third quarter of the succeeding calendar year.
(3) The provisions of this subsection do not preempt a State from requiring a higher percentage than that specified in paragraph (1)(A).
(4) The Secretary shall submit in October of each year (beginning with 1993) a report to the Committees on Energy and Commerce and Ways and Means of the House of Representatives and the Committee on Finance of the Senate on loss ratios under medicare supplemental policies and the use of sanctions, such as a required rebate or credit or the disallowance of premium increases, for policies that fail to meet the requirements of this subsection (relating to loss ratios). Such report shall include a list of the policies that failed to comply with such loss ratio requirements or other requirements of this section.
(5) The Secretary may perform audits with respect to the compliance of medicare supplemental policies with the loss ratio requirements of this subsection and shall report the results of such audits to the State involved.
(6)(A) A person who fails to provide refunds or credits as required in paragraph (1)(B) is subject to a civil money penalty of not to exceed $25,000 for each policy issued for which such failure occurred. The provisions of
(B) Each issuer of a policy subject to the requirements of paragraph (1)(B) shall be liable to the policyholder or, in the case of a group policy, to the certificate holder for credits required under such paragraph.
(s) Coverage for pre-existing conditions
(1) If a medicare supplemental policy replaces another medicare supplemental policy, the issuer of the replacing policy shall waive any time periods applicable to preexisting conditions, waiting period, elimination periods and probationary periods in the new medicare supplemental policy for similar benefits to the extent such time was spent under the original policy.
(2)(A) The issuer of a medicare supplemental policy may not deny or condition the issuance or effectiveness of a medicare supplemental policy, or discriminate in the pricing of the policy, because of health status, claims experience, receipt of health care, or medical condition in the case of an individual for whom an application is submitted prior to or during the 6 month period beginning with the first month as of the first day on which the individual is 65 years of age or older and is enrolled for benefits under part B.
(B) Subject to subparagraphs (C) and (D), subparagraph (A) shall not be construed as preventing the exclusion of benefits under a policy, during its first 6 months, based on a pre-existing condition for which the policyholder received treatment or was otherwise diagnosed during the 6 months before the policy became effective.
(C) If a medicare supplemental policy or certificate replaces another such policy or certificate which has been in effect for 6 months or longer, the replacing policy may not provide any time period applicable to pre-existing conditions, waiting periods, elimination periods, and probationary periods in the new policy or certificate for similar benefits.
(D) In the case of a policy issued during the 6-month period described in subparagraph (A) to an individual who is 65 years of age or older as of the date of issuance and who as of the date of the application for enrollment has a continuous period of creditable coverage (as defined in section 2701(c) 5 of the Public Health Service Act) of—
(i) at least 6 months, the policy may not exclude benefits based on a pre-existing condition; or
(ii) less than 6 months, if the policy excludes benefits based on a preexisting condition, the policy shall reduce the period of any preexisting condition exclusion by the aggregate of the periods of creditable coverage (if any, as so defined) applicable to the individual as of the enrollment date.
The Secretary shall specify the manner of the reduction under clause (ii), based upon the rules used by the Secretary in carrying out section 2701(a)(3) of such Act.
(E) An issuer of a medicare supplemental policy shall not deny or condition the issuance or effectiveness of the policy (including the imposition of any exclusion of benefits under the policy based on a pre-existing condition) and shall not discriminate in the pricing of the policy (including the adjustment of premium rates) of an individual on the basis of the genetic information with respect to such individual.
(F)
(i) denying or conditioning the issuance or effectiveness of the policy or increasing the premium for an employer based on the manifestation of a disease or disorder of an individual who is covered under the policy; or
(ii) increasing the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy (in such case, the manifestation of a disease or disorder in one individual cannot also be used as genetic information about other group members and to further increase the premium for the employer).
(3)(A) The issuer of a medicare supplemental policy—
(i) may not deny or condition the issuance or effectiveness of a medicare supplemental policy described in subparagraph (C) that is offered and is available for issuance to new enrollees by such issuer;
(ii) may not discriminate in the pricing of such policy, because of health status, claims experience, receipt of health care, or medical condition; and
(iii) may not impose an exclusion of benefits based on a preexisting condition under such policy,
in the case of an individual described in subparagraph (B) who seeks to enroll under the policy during the period specified in subparagraph (E) and who submits evidence of the date of termination or disenrollment along with the application for such medicare supplemental policy.
(B) An individual described in this subparagraph is an individual described in any of the following clauses:
(i) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under this subchapter and the plan terminates or ceases to provide all such supplemental health benefits to the individual.
(ii) The individual is enrolled with a Medicare+Choice organization under a Medicare+Choice plan under part C, and there are circumstances permitting discontinuance of the individual's election of the plan under the first sentence of
(iii) The individual is enrolled with an eligible organization under a contract under
(iv) The individual is enrolled under a medicare supplemental policy under this section and such enrollment ceases because—
(I) of the bankruptcy or insolvency of the issuer or because of other involuntary termination of coverage or enrollment under such policy and there is no provision under applicable State law for the continuation or conversion of such coverage;
(II) the issuer of the policy substantially violated a material provision of the policy; or
(III) the issuer (or an agent or other entity acting on the issuer's behalf) materially misrepresented the policy's provisions in marketing the policy to the individual.
(v) The individual—
(I) was enrolled under a medicare supplemental policy under this section,
(II) subsequently terminates such enrollment and enrolls, for the first time, with any Medicare+Choice organization under a Medicare+Choice plan under part C, any eligible organization under a contract under
(III) the subsequent enrollment under subclause (II) is terminated by the enrollee during any period within the first 12 months of such enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under
(vi) The individual, upon first becoming eligible for benefits under part A at age 65, enrolls in a Medicare+Choice plan under part C or in a PACE program under
(C)(i) Subject to clauses (ii) and (iii), a medicare supplemental policy described in this subparagraph is a medicare supplemental policy which has a benefit package classified as "A", "B", "C", or "F" under the standards established under subsection (p)(2).
(ii)(I) Subject to subclause (II), only for purposes of an individual described in subparagraph (B)(v), a medicare supplemental policy described in this subparagraph is the same medicare supplemental policy referred to in such subparagraph in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in clause (i).
(II) If the medicare supplemental policy referred to in subparagraph (B)(v) was a medigap Rx policy (as defined in subsection (v)(6)(A)), a medicare supplemental policy described in this subparagraph is such policy in which the individual was most recently enrolled as modified under subsection (v)(2)(C)(i) or, at the election of the individual, a policy referred to in subsection (v)(3)(A)(i).
(iii) Only for purposes of an individual described in subparagraph (B)(vi) and subject to subsection (v)(1), a medicare supplemental policy described in this subparagraph shall include any medicare supplemental policy.
(iv) For purposes of applying this paragraph in the case of a State that provides for offering of benefit packages other than under the classification referred to in clause (i), the references to benefit packages in such clause are deemed references to comparable benefit packages offered in such State.
(D) At the time of an event described in subparagraph (B) because of which an individual ceases enrollment or loses coverage or benefits under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, the insurer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the rights of the individual under this paragraph, and obligations of issuers of medicare supplemental policies, under subparagraph (A).
(E) For purposes of subparagraph (A), the time period specified in this subparagraph is—
(i) in the case of an individual described in subparagraph (B)(i), the period beginning on the date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if no such notice is received, notice that a claim has been denied because of such a termination or cessation) and ending on the date that is 63 days after the applicable notice;
(ii) in the case of an individual described in clause (ii), (iii), (v), or (vi) of subparagraph (B) whose enrollment is terminated involuntarily, the period beginning on the date that the individual receives a notice of termination and ending on the date that is 63 days after the date the applicable coverage is terminated;
(iii) in the case of an individual described in subparagraph (B)(iv)(I), the period beginning on the earlier of (I) the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice, if any, and (II) the date that the applicable coverage is terminated, and ending on the date that is 63 days after the date the coverage is terminated;
(iv) in the case of an individual described in clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of subparagraph (B) who disenrolls voluntarily, the period beginning on the date that is 60 days before the effective date of the disenrollment and ending on the date that is 63 days after such effective date; and
(v) in the case of an individual described in subparagraph (B) but not described in the preceding provisions of this subparagraph, the period beginning on the effective date of the disenrollment and ending on the date that is 63 days after such effective date.
(F)(i) Subject to clause (ii), for purposes of this paragraph—
(I) in the case of an individual described in subparagraph (B)(v) (or deemed to be so described, pursuant to this subparagraph) whose enrollment with an organization or provider described in subclause (II) of such subparagraph is involuntarily terminated within the first 12 months of such enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, such subsequent enrollment shall be deemed to be an initial enrollment described in such subparagraph; and
(II) in the case of an individual described in clause (vi) of subparagraph (B) (or deemed to be so described, pursuant to this subparagraph) whose enrollment with a plan or in a program described in such clause is involuntarily terminated within the first 12 months of such enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, such subsequent enrollment shall be deemed to be an initial enrollment described in such clause.
(ii) For purposes of clauses (v) and (vi) of subparagraph (B), no enrollment of an individual with an organization or provider described in clause (v)(II), or with a plan or in a program described in clause (vi), may be deemed to be an initial enrollment under this clause after the 2-year period beginning on the date on which the individual first enrolled with such an organization, provider, plan, or program.
(4) Any issuer of a medicare supplemental policy that fails to meet the requirements of this subsection is subject to a civil money penalty of not to exceed $5,000 for each such failure. The provisions of
(t) Medicare select policies
(1) If a medicare supplemental policy meets the 1991 NAIC Model Regulation or 1991 Federal Regulation and otherwise complies with the requirements of this section except that benefits under the policy are restricted to items and services furnished by certain entities (or reduced benefits are provided when items or services are furnished by other entities), the policy shall nevertheless be treated as meeting those standards if—
(A) full benefits are provided for items and services furnished through a network of entities which have entered into contracts or agreements with the issuer of the policy;
(B) full benefits are provided for items and services furnished by other entities if the services are medically necessary and immediately required because of an unforeseen illness, injury, or condition and it is not reasonable given the circumstances to obtain the services through the network;
(C) the network offers sufficient access;
(D) the issuer of the policy has arrangements for an ongoing quality assurance program for items and services furnished through the network;
(E)(i) the issuer of the policy provides to each enrollee at the time of enrollment an explanation of (I) the restrictions on payment under the policy for services furnished other than by or through the network, (II) out of area coverage under the policy, (III) the policy's coverage of emergency services and urgently needed care, and (IV) the availability of a policy through the entity that meets the standards in the 1991 NAIC Model Regulation or 1991 Federal Regulation without reference to this subsection and the premium charged for such policy, and
(ii) each enrollee prior to enrollment acknowledges receipt of the explanation provided under clause (i); and
(F) the issuer of the policy makes available to individuals, in addition to the policy described in this subsection, any policy (otherwise offered by the issuer to individuals in the State) that meets the standards in the 1991 NAIC Model Regulation or 1991 Federal Regulation and other requirements of this section without reference to this subsection.
(2) If the Secretary determines that an issuer of a policy approved under paragraph (1)—
(A) fails substantially to provide medically necessary items and services to enrollees seeking such items and services through the issuer's network, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual,
(B) imposes premiums on enrollees in excess of the premiums approved by the State,
(C) acts to expel an enrollee for reasons other than nonpayment of premiums, or
(D) does not provide the explanation required under paragraph (1)(E)(i) or does not obtain the acknowledgment required under paragraph (1)(E)(ii),
the issuer is subject to a civil money penalty in an amount not to exceed $25,000 for each such violation. The provisions of
(3) The Secretary may enter into a contract with an entity whose policy has been certified under paragraph (1) or has been approved by a State under subsection (b)(1)(H) to determine whether items and services (furnished to individuals entitled to benefits under this subchapter and under that policy) are not allowable under
(u) Additional rules relating to individuals enrolled in MSA plans and in private fee-for-service plans
(1) It is unlawful for a person to sell or issue a policy described in paragraph (2) to an individual with knowledge that the individual has in effect under
(2)(A) A policy described in this subparagraph is a health insurance policy (other than a policy described in subparagraph (B)) that provides for coverage of expenses that are otherwise required to be counted toward meeting the annual deductible amount provided under the MSA plan.
(B) A policy described in this subparagraph is any of the following:
(i) A policy that provides coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.
(ii) A policy of insurance to which substantially all of the coverage relates to—
(I) liabilities incurred under workers' compensation laws,
(II) tort liabilities,
(III) liabilities relating to ownership or use of property, or
(IV) such other similar liabilities as the Secretary may specify by regulations.
(iii) A policy of insurance that provides coverage for a specified disease or illness.
(iv) A policy of insurance that pays a fixed amount per day (or other period) of hospitalization.
(v) Rules relating to medigap policies that provide prescription drug coverage
(1) Prohibition on sale, issuance, and renewal of new policies that provide prescription drug coverage
(A) In general
Notwithstanding any other provision of law, on or after January 1, 2006, a medigap Rx policy (as defined in paragraph (6)(A)) may not be sold, issued, or renewed under this section—
(i) to an individual who is a part D enrollee (as defined in paragraph (6)(B)); or
(ii) except as provided in subparagraph (B), to an individual who is not a part D enrollee.
(B) Continuation permitted for non-part D enrollees
Subparagraph (A)(ii) shall not apply to the renewal of a medigap Rx policy that was issued before January 1, 2006.
(C) Construction
Nothing in this subsection shall be construed as preventing the offering on and after January 1, 2006, of "H", "I", and "J" policies described in paragraph (2)(D)(i) if the benefit packages are modified in accordance with paragraph (2)(C).
(2) Elimination of duplicative coverage upon part D enrollment
(A) In general
In the case of an individual who is covered under a medigap Rx policy and enrolls under a part D plan—
(i) before the end of the initial part D enrollment period, the individual may—
(I) enroll in a medicare supplemental policy without prescription drug coverage under paragraph (3); or
(II) continue the policy in effect subject to the modification described in subparagraph (C)(i); or
(ii) after the end of such period, the individual may continue the policy in effect subject to such modification.
(B) Notice required to be provided to current policyholders with medigap Rx policy
No medicare supplemental policy of an issuer shall be deemed to meet the standards in subsection (c) unless the issuer provides written notice (in accordance with standards of the Secretary established in consultation with the National Association of Insurance Commissioners) during the 60-day period immediately preceding the initial part D enrollment period, to each individual who is a policyholder or certificate holder of a medigap Rx policy (at the most recent available address of that individual) of the following:
(i) If the individual enrolls in a plan under part D during the initial enrollment period under
(I) continuing enrollment in the individual's current plan, but the plan's coverage of prescription drugs will be modified under subparagraph (C)(i); or
(II) enrolling in another medicare supplemental policy pursuant to paragraph (3).
(ii) If the individual does not enroll in a plan under part D during such period, the individual may continue enrollment in the individual's current plan without change, but—
(I) the individual will not be guaranteed the option of enrollment in another medicare supplemental policy pursuant to paragraph (3); and
(II) if the current plan does not provide creditable prescription drug coverage (as defined in
(iii) Such other information as the Secretary may specify (in consultation with the National Association of Insurance Commissioners), including the potential impact of such election on premiums for medicare supplemental policies.
(C) Modification
(i) In general
The policy modification described in this subparagraph is the elimination of prescription coverage for expenses of prescription drugs incurred after the effective date of the individual's coverage under a part D plan and the appropriate adjustment of premiums to reflect such elimination of coverage.
(ii) Continuation of renewability and application of modification
No medicare supplemental policy of an issuer shall be deemed to meet the standards in subsection (c) unless the issuer—
(I) continues renewability of medigap Rx policies that it has issued, subject to subclause (II); and
(II) applies the policy modification described in clause (i) in the cases described in clauses (i)(II) and (ii) of subparagraph (A).
(D) References to Rx policies
(i) H, I, and J policies
Any reference to a benefit package classified as "H", "I", or "J" (including the benefit package classified as "J" with a high deductible feature, as described in subsection (p)(11)) under the standards established under subsection (p)(2) shall be construed as including a reference to such a package as modified under subparagraph (C) and such packages as modified shall not be counted as a separate benefit package under such subsection.
(ii) Application in waivered States
Except for the modification provided under subparagraph (C), the waivers previously in effect under subsection (p)(2) shall continue in effect.
(3) Availability of substitute policies with guaranteed issue
(A) In general
The issuer of a medicare supplemental policy—
(i) may not deny or condition the issuance or effectiveness of a medicare supplemental policy that has a benefit package classified as "A", "B", "C", or "F" (including the benefit package classified as "F" with a high deductible feature, as described in subsection (p)(11)), under the standards established under subsection (p)(2), or a benefit package described in subparagraph (A) or (B) of subsection (w)(2) and that is offered and is available for issuance to new enrollees by such issuer;
(ii) may not discriminate in the pricing of such policy, because of health status, claims experience, receipt of health care, or medical condition; and
(iii) may not impose an exclusion of benefits based on a pre-existing condition under such policy,
in the case of an individual described in subparagraph (B) who seeks to enroll under the policy not later than 63 days after the effective date of the individual's coverage under a part D plan.
(B) Individual covered
An individual described in this subparagraph with respect to the issuer of a medicare supplemental policy is an individual who—
(i) enrolls in a part D plan during the initial part D enrollment period;
(ii) at the time of such enrollment was enrolled in a medigap Rx policy issued by such issuer; and
(iii) terminates enrollment in such policy and submits evidence of such termination along with the application for the policy under subparagraph (A).
(C) Special rule for waivered States
For purposes of applying this paragraph in the case of a State that provides for offering of benefit packages other than under the classification referred to in subparagraph (A)(i), the references to benefit packages in such subparagraph are deemed references to comparable benefit packages offered in such State.
(4) Enforcement
(A) Penalties for duplication
The penalties described in subsection (d)(3)(A)(ii) shall apply with respect to a violation of paragraph (1)(A).
(B) Guaranteed issue
The provisions of paragraph (4) of subsection (s) shall apply with respect to the requirements of paragraph (3) in the same manner as they apply to the requirements of such subsection.
(5) Construction
Any provision in this section or in a medicare supplemental policy relating to guaranteed renewability of coverage shall be deemed to have been met with respect to a part D enrollee through the continuation of the policy subject to modification under paragraph (2)(C) or the offering of a substitute policy under paragraph (3). The previous sentence shall not be construed to affect the guaranteed renewability of such a modified or substitute policy.
(6) Definitions
For purposes of this subsection:
(A) Medigap Rx policy
The term "medigap Rx policy" means a medicare supplemental policy—
(i) which has a benefit package classified as "H", "I", or "J" (including the benefit package classified as "J" with a high deductible feature, as described in subsection (p)(11)) under the standards established under subsection (p)(2), without regard to this subsection; and
(ii) to which such standards do not apply (or to which such standards have been waived under subsection (p)(6)) but which provides benefits for prescription drugs.
Such term does not include a policy with a benefit package as classified under clause (i) which has been modified under paragraph (2)(C)(i).
(B) Part D enrollee
The term "part D enrollee" means an individual who is enrolled in a part D plan.
(C) Part D plan
The term "part D plan" means a prescription drug plan or an MA–PD plan (as defined for purposes of part D).
(D) Initial part D enrollment period
The term "initial part D enrollment period" means the initial enrollment period described in
(w) Development of new standards for medicare supplemental policies
(1) In general
The Secretary shall request the National Association of Insurance Commissioners to review and revise the standards for benefit packages under subsection (p)(1), taking into account the changes in benefits resulting from enactment of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and to otherwise update standards to reflect other changes in law included in such Act. Such revision shall incorporate the inclusion of the 2 benefit packages described in paragraph (2). Such revisions shall be made consistent with the rules applicable under subsection (p)(1)(E) with the reference to the "1991 NAIC Model Regulation" deemed a reference to the NAIC Model Regulation as published in the Federal Register on December 4, 1998, and as subsequently updated by the National Association of Insurance Commissioners to reflect previous changes in law (and subsection (v)) and the reference to "date of enactment of this subsection" deemed a reference to December 8, 2003. To the extent practicable, such revision shall provide for the implementation of revised standards for benefit packages as of January 1, 2006.
(2) New benefit packages
The benefit packages described in this paragraph are the following (notwithstanding any other provision of this section relating to a core benefit package):
(A) First new benefit package
A benefit package consisting of the following:
(i) Subject to clause (ii), coverage of 50 percent of the cost-sharing otherwise applicable under parts A and B, except there shall be no coverage of the part B deductible and coverage of 100 percent of any cost-sharing otherwise applicable for preventive benefits.
(ii) Coverage for all hospital inpatient coinsurance and 365 extra lifetime days of coverage of inpatient hospital services (as in the current core benefit package).
(iii) A limitation on annual out-of-pocket expenditures under parts A and B to $4,000 in 2006 (or, in a subsequent year, to such limitation for the previous year increased by an appropriate inflation adjustment specified by the Secretary).
(B) Second new benefit package
A benefit package consisting of the benefit package described in subparagraph (A), except as follows:
(i) Substitute "75 percent" for "50 percent" in clause (i) of such subparagraph.
(ii) Substitute "$2,000" for "$4,000" in clause (iii) of such subparagraph.
(x) Limitations on genetic testing and information
(1) Genetic testing
(A) Limitation on requesting or requiring genetic testing
An issuer of a medicare supplemental policy shall not request or require an individual or a family member of such individual to undergo a genetic test.
(B) Rule of construction
Subparagraph (A) shall not be construed to limit the authority of a health care professional who is providing health care services to an individual to request that such individual undergo a genetic test.
(C) Rule of construction regarding payment
(i) In general
Nothing in subparagraph (A) shall be construed to preclude an issuer of a medicare supplemental policy from obtaining and using the results of a genetic test in making a determination regarding payment (as such term is defined for the purposes of applying the regulations promulgated by the Secretary under part C of subchapter XI and section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time) consistent with subsection (s)(2)(E).
(ii) Limitation
For purposes of clause (i), an issuer of a medicare supplemental policy may request only the minimum amount of information necessary to accomplish the intended purpose.
(D) Research exception
Notwithstanding subparagraph (A), an issuer of a medicare supplemental policy may request, but not require, that an individual or a family member of such individual undergo a genetic test if each of the following conditions is met:
(i) The request is made pursuant to research that complies with part 46 of title 45, Code of Federal Regulations, or equivalent Federal regulations, and any applicable State or local law or regulations for the protection of human subjects in research.
(ii) The issuer clearly indicates to each individual, or in the case of a minor child, to the legal guardian of such child, to whom the request is made that—
(I) compliance with the request is voluntary; and
(II) non-compliance will have no effect on enrollment status or premium or contribution amounts.
(iii) No genetic information collected or acquired under this subparagraph shall be used for underwriting, determination of eligibility to enroll or maintain enrollment status, premium rating, or the creation, renewal, or replacement of a plan, contract, or coverage for health insurance or health benefits.
(iv) The issuer notifies the Secretary in writing that the issuer is conducting activities pursuant to the exception provided for under this subparagraph, including a description of the activities conducted.
(v) The issuer complies with such other conditions as the Secretary may by regulation require for activities conducted under this subparagraph.
(2) Prohibition on collection of genetic information
(A) In general
An issuer of a medicare supplemental policy shall not request, require, or purchase genetic information for underwriting purposes (as defined in paragraph (3)).
(B) Prohibition on collection of genetic information prior to enrollment
An issuer of a medicare supplemental policy shall not request, require, or purchase genetic information with respect to any individual prior to such individual's enrollment under the policy in connection with such enrollment.
(C) Incidental collection
If an issuer of a medicare supplemental policy obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of subparagraph (B) if such request, requirement, or purchase is not in violation of subparagraph (A).
(3) Definitions
In this subsection:
(A) Family member
The term "family member" means with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of such individual.
(B) Genetic information
(i) In general
The term "genetic information" means, with respect to any individual, information about—
(I) such individual's genetic tests,
(II) the genetic tests of family members of such individual, and
(III) subject to clause (iv), the manifestation of a disease or disorder in family members of such individual.
(ii) Inclusion of genetic services and participation in genetic research
Such term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by such individual or any family member of such individual.
(iii) Exclusions
The term "genetic information" shall not include information about the sex or age of any individual.
(C) Genetic test
(i) In general
The term "genetic test" means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detects genotypes, mutations, or chromosomal changes.
(ii) Exceptions
The term "genetic test" does not mean—
(I) an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or
(II) an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.
(D) Genetic services
The term "genetic services" means—
(i) a genetic test;
(ii) genetic counseling (including obtaining, interpreting, or assessing genetic information); or
(iii) genetic education.
(E) Underwriting purposes
The term "underwriting purposes" means, with respect to a medicare supplemental policy—
(i) rules for, or determination of, eligibility (including enrollment and continued eligibility) for benefits under the policy;
(ii) the computation of premium or contribution amounts under the policy;
(iii) the application of any pre-existing condition exclusion under the policy; and
(iv) other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.
(F) Issuer of a medicare supplemental policy
The term "issuer of a medicare supplemental policy" includes a third-party administrator or other person acting for or on behalf of such issuer.
(4) Genetic information of a fetus or embryo
Any reference in this section to genetic information concerning an individual or family member of an individual shall—
(A) with respect to such an individual or family member of an individual who is a pregnant woman, include genetic information of any fetus carried by such pregnant woman; and
(B) with respect to an individual or family member utilizing an assisted reproductive technology, include genetic information of any embryo legally held by the individual or family member.
(y) Development of new standards for certain medicare supplemental policies
(1) In general
The Secretary shall request the National Association of Insurance Commissioners to review and revise the standards for benefit packages described in paragraph (2) under subsection (p)(1), to otherwise update standards to include requirements for nominal cost sharing to encourage the use of appropriate physicians' services under part B. Such revisions shall be based on evidence published in peer-reviewed journals or current examples used by integrated delivery systems and made consistent with the rules applicable under subsection (p)(1)(E) with the reference to the "1991 NAIC Model Regulation" deemed a reference to the NAIC Model Regulation as published in the Federal Register on December 4, 1998, and as subsequently updated by the National Association of Insurance Commissioners to reflect previous changes in law and the reference to "date of enactment of this subsection" deemed a reference to March 23, 2010. To the extent practicable, such revision shall provide for the implementation of revised standards for benefit packages as of January 1, 2015.
(2) Benefit packages described
The benefit packages described in this paragraph are benefit packages classified as "C" and "F".
(z) Limitation on certain medigap policies for newly eligible Medicare beneficiaries
(1) In general
Notwithstanding any other provision of this section, on or after January 1, 2020, a medicare supplemental policy that provides coverage of the part B deductible, including any such policy (or rider to such a policy) issued under a waiver granted under subsection (p)(6), may not be sold or issued to a newly eligible Medicare beneficiary.
(2) Newly eligible Medicare beneficiary defined
In this subsection, the term "newly eligible Medicare beneficiary" means an individual who is neither of the following:
(A) An individual who has attained age 65 before January 1, 2020.
(B) An individual who was entitled to benefits under part A pursuant to
(3) Treatment of waivered States
In the case of a State described in subsection (p)(6), nothing in this section shall be construed as preventing the State from modifying its alternative simplification program under such subsection so as to eliminate the coverage of the part B deductible for any medical supplemental policy sold or issued under such program to a newly eligible Medicare beneficiary on or after January 1, 2020.
(4) Treatment of references to certain policies
In the case of a newly eligible Medicare beneficiary, except as the Secretary may otherwise provide, any reference in this section to a medicare supplemental policy which has a benefit package classified as "C" or "F" shall be deemed, as of January 1, 2020, to be a reference to a medicare supplemental policy which has a benefit package classified as "D" or "G", respectively.
(5) Enforcement
The penalties described in clause (ii) of subsection (d)(3)(A) shall apply with respect to a violation of paragraph (1) in the same manner as it applies to a violation of clause (i) of such subsection.
(Aug. 14, 1935, ch. 531, title XVIII, §1882, as added
Editorial Notes
References in Text
Section 171(m) of the Social Security Act Amendments of 1994, referred to in subsecs. (d)(3)(A)(vi)(IV) and (r)(1), (2)(A), is section 171(m) of
Section 603(c) of the Social Security Amendments of 1983, referred to in subsec. (g)(1), is section 603(c) of
Section 2355 of the Deficit Reduction Act of 1984, referred to in subsec. (g)(1), is section 2355 of
Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986, referred to in subsec. (g)(1), is section 9412(b) of
The Medicare Catastrophic Coverage Act of 1988, referred to in subsecs. (k)(1)(A), (2)(A) and (l)(4)(A), is
The Medicare Catastrophic Coverage Repeal Act of 1989, referred to in subsecs. (m)(1)(A), (2)(A) and (n)(2)(A), (5)(A), is
The Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (p)(1)(A)(iv), is
Section 2701 of the Public Health Service Act, referred to in subsec. (s)(2)(D), is section 2701 of act July 1, 1944, which was classified to
Paragraphs (2)(A), (B) and (3)(C)–(E) of
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsec. (w)(1), is
Section 264 of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (x)(1)(C)(i), is section 264 of
Amendments
2015—Subsec. (z).
2010—Subsec. (o)(1).
Subsec. (y).
2008—Subsec. (o)(4).
Subsec. (o)(5).
Subsec. (s)(2)(E), (F).
Subsec. (x).
Subsec. (x)(4).
2007—Subsec. (r)(5).
2003—Subsec. (d)(3)(A)(i)(II).
Subsec. (d)(3)(B)(iii)(II).
Subsec. (g)(1).
Subsec. (g)(2)(A).
Subsec. (o)(1).
Subsec. (p)(2)(B).
Subsec. (s)(3)(A)(iii).
Subsec. (s)(3)(C)(ii).
Subsec. (s)(3)(C)(iii).
Subsec. (v).
Subsec. (w).
2000—Subsec. (s)(3)(A).
Subsec. (s)(3)(E).
"(E)(i) An individual described in subparagraph (B)(ii) may elect to apply subparagraph (A) by substituting, for the date of termination of enrollment, the date on which the individual was notified by the Medicare+Choice organization of the impending termination or discontinuance of the Medicare+Choice plan it offers in the area in which the individual resides, but only if the individual disenrolls from the plan as a result of such notification.
"(ii) In the case of an individual making such an election, the issuer involved shall accept the application of the individual submitted before the date of termination of enrollment, but the coverage under subparagraph (A) shall only become effective upon termination of coverage under the Medicare+Choice plan involved."
Subsec. (s)(3)(F).
1999—Subsec. (g)(1).
Subsec. (q)(5)(C).
Subsec. (q)(6).
Subsec. (s)(2)(D).
Subsec. (s)(3)(A).
Subsec. (s)(3)(B)(ii).
Subsec. (s)(3)(B)(v)(II).
Subsec. (s)(3)(B)(vi).
Subsec. (s)(3)(E).
1998—Subsec. (l)(6).
1997—Subsec. (d)(3)(A)(i).
Subsec. (d)(3)(A)(i)(II).
Subsec. (d)(3)(A)(vi)(III).
Subsec. (d)(3)(B)(i)(I).
Subsec. (g)(1).
Subsec. (p)(2)(C).
Subsec. (p)(11).
Subsec. (s)(2)(B).
Subsec. (s)(2)(D).
Subsec. (s)(3).
Subsec. (s)(4).
Subsec. (u).
1996—Subsec. (d)(3)(A)(iii).
Subsec. (d)(3)(A)(iv) to (viii).
Subsec. (d)(3)(C).
Subsec. (d)(3)(D).
1994—Subsec. (a)(2).
Subsec. (a)(2)(A).
Subsec. (b)(1).
Subsecs. (b)(1)(B), (c)(5).
Subsec. (d)(3)(A).
Subsec. (d)(3)(B)(ii)(II).
Subsec. (d)(3)(B)(iii)(I).
Subsec. (d)(3)(B)(iii)(II).
Subsec. (d)(3)(B)(iii)(III).
Subsec. (d)(3)(C).
Subsec. (d)(3)(D).
Subsec. (d)(4)(D).
Subsec. (d)(4)(E).
Subsec. (f)(3).
Subsec. (g)(1).
Subsec. (g)(2)(B).
Subsec. (o).
Subsec. (p).
Subsec. (p)(1)(A).
Subsec. (p)(1)(B).
Subsec. (p)(1)(C)(i).
Subsec. (p)(1)(C)(ii)(I), (E).
Subsec. (p)(2).
Subsec. (p)(2)(C).
Subsec. (p)(4).
Subsec. (p)(4)(A)(i).
Subsec. (p)(6).
Subsec. (p)(7).
Subsec. (p)(8).
Subsec. (p)(9)(B).
Subsec. (p)(9)(D).
Subsec. (p)(10).
Subsec. (q)(2).
Subsec. (q)(4).
Subsec. (q)(5)(A), (B).
Subsec. (r)(1).
Subsec. (r)(1)(A).
Subsec. (r)(1)(B).
Subsec. (r)(2)(A).
Subsec. (r)(2)(C), (D).
Subsec. (r)(4).
Subsec. (r)(6)(A).
Subsec. (r)(6)(B).
Subsec. (s)(2)(A).
Subsec. (s)(2)(B).
Subsec. (t)(1).
Subsec. (t)(1)(A).
Subsec. (t)(1)(E)(i), (F).
Subsec. (t)(2).
1990—
Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(1)(A).
Subsec. (b)(1)(B).
Subsec. (b)(1)(C).
Subsec. (b)(1)(D).
Subsec. (b)(1)(F).
Subsec. (b)(1)(G).
Subsec. (b)(1)(H).
Subsec. (b)(2).
"(A) There is hereby established a panel (hereinafter in this section referred to as the 'Panel') to be known as the Supplemental Health Insurance Panel. The Panel shall consist of the Secretary, who shall serve as the Chairman, and four State commissioners or superintendents of insurance, who shall be appointed by the Secretary and serve at his pleasure. Such members shall first be appointed not later than December 31, 1980.
"(B) A majority of the members of the Panel shall constitute a quorum, but a lesser number may conduct hearings.
"(C) The Secretary shall provide such technical, secretarial, clerical, and other assistance as the Panel may require.
"(D) There are authorized to be appropriated such sums as may be necessary to carry out this paragraph.
"(E) Members of the Panel shall be allowed, while away from their homes or regular places of business in the performance of services for the Panel, travel expenses (including per diem in lieu of subsistence) in the same manner as persons employed intermittently in the Government service are allowed expenses under
Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(2).
Subsec. (c)(5).
Subsec. (d)(3)(A).
Subsec. (d)(3)(B).
Subsec. (d)(4)(B).
"(i) the policy has been certified by the Secretary pursuant to subsection (c) of this section or was issued in a State with an approved regulatory program (as defined in subsection (g)(2)(B) of this section);
"(ii) the policy has been approved by the commissioners or superintendents of insurance in States in which more than 30 percent of such policies are sold; or
"(iii) the State has in effect a law which the commissioner or superintendent of insurance of the State has determined gives him the authority to review, and to approve, or effectively bar from sale in the State, such policy;
except that such a policy shall not be deemed to be approved by a State commissioner or superintendent of insurance if the State notifies the Secretary that such policy has been submitted for approval to the State and has been specifically disapproved by such State after providing appropriate notice and opportunity for hearing pursuant to the procedures (if any) of the State."
Subsec. (g)(1).
Subsecs. (o), (p).
Subsec. (q).
Subsec. (q)(5).
Subsec. (r).
Subsec. (s).
Subsec. (t).
1989—Subsecs. (a), (b)(1).
Subsec. (k)(1)(A).
Subsec. (k)(3).
Subsecs. (m), (n).
1988—Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(1)(B).
Subsec. (b)(1)(C).
Subsec. (b)(1)(D), (E).
Subsec. (b)(2)(A).
Subsec. (b)(3).
Subsec. (c).
Subsec. (c)(3).
Subsec. (c)(3)(A).
Subsec. (c)(3)(B)(i).
Subsec. (c)(3)(B)(ii).
Subsec. (c)(4).
Subsec. (d).
Subsec. (d)(5).
Subsec. (e).
Subsecs. (k), (l).
1987—Subsec. (b)(1)(B).
Subsec. (b)(1)(D).
Subsec. (c).
Subsec. (c)(3).
Subsec. (d)(1).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Committee on Interstate and Foreign Commerce of House of Representatives changed to Committee on Energy and Commerce of House of Representatives immediately prior to noon on Jan. 3, 1981, by House Resolution No. 549, Ninety-sixth Congress, Mar. 25, 1980. Committee on Energy and Commerce of House of Representatives treated as referring to Committee on Commerce of House of Representatives by section 1(a) of
Effective Date of 2008 Amendment
Effective Date of 1999 Amendments
Amendment by section 1000(a)(6) [title III, §321(k)(13), (14)] of
Amendment by section 1000(a)(6) [title V, §501(a)(2)] of
Effective Date of 1997 Amendment
"(1)
"(2)
"(3)
"(1)
"(2)
Effective Date of 1996 Amendment
"(1) Except as provided in this subsection, the amendment made by subsection (a) [amending this section] shall be effective as if included in the enactment of section 4354 of the Omnibus Budget Reconciliation Act of 1990 [
"(2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security Act [
"(i) a health insurance policy described in section 1882(d)(3)(A)(iv) of such Act (as added by subsection (a)), after the date of the enactment of this Act [Aug. 21, 1996], or
"(ii) another health insurance policy after the end of the 30-day period beginning on the date of the enactment of this Act.
"(B) A seller or issuer of a health insurance policy may substitute, for the disclosure statement described in clause (vii) of such section, the statement specified under section 1882(d)(3)(D) of the Social Security Act (as in effect before the date of the enactment of this Act), without the revision specified in such clause."
Effective Date of 1994 Amendment
"(1) the amendments made by subsection (d)(1) [amending this section] shall take effect on the date of the enactment of this Act [Oct. 31, 1994], but no penalty shall be imposed under section 1882(d)(3)(A) of the Social Security Act [
"(2) the amendments made by subsection (d)(2)(A) [amending this section] and by subparagraphs (A), (B), and (E) of subsection (e)(1) [amending this section] shall be effective on the date specified in subsection (m)(4) [set out as a note below]; and
"(3) the amendment made by subsection (g)(2) [amending this section] shall take effect on January 1, 1995, and shall apply to individuals who attain 65 years of age or older on or after the effective date of section 1882(s)(2) of the Social Security Act [
Effective Date of 1990 Amendment
Amendment by section 4358(a), (b)(1), (2) of
Effective Date of 1989 Amendment
Effective Date of 1988 Amendment
"(1) Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section] shall take effect on the date of the enactment of this Act [July 1, 1988].
"(2) The amendments made by subsections (a) and (b) [amending this section] shall become effective on the date specified in subsection (k)(1)(B) or (k)(2)(B) of section 1882 of the Social Security Act [
"(3) The amendment made by subsection (e) [amending this section] shall apply to medicare supplemental policies as of January 1, 1989, with respect to advertising used on or after such date.
"(4) The Secretary of Health and Human Services shall provide for the reappointment of members to the Supplemental Health Insurance Panel (under section 1882(b)(2) of the Social Security Act [
Except as specifically provided in section 411 of
Amendment by section 428(b) of
Effective Date of 1987 Amendment
"(A) The amendments made by subsection (b) [amending this section] shall apply to medicare supplemental policies as of January 1, 1989 (or, if applicable, the date established under subparagraph (B)).
"(B) In the case of a State which the Secretary of Health and Human Services identifies as—
"(i) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to be changed to meet the requirements of section 1882(c)(3) of the Social Security Act [
"(ii) having a legislature which is not scheduled to meet in 1988 in a legislative session in which such legislation may be considered or which has not enacted such legislation before July 1, 1988,
the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1989, and in which legislation described in clause (i) may be considered."
Amendment by
Effective Date
Rule of Construction
"(1)
"(2)
Implementation of NAIC Recommendations
"(1)
"(2)
"(A)
"(B)
"(C)
Study of Medigap Policies
"(1)
"(2)
"(A) The level of coverage provided by each type of medicare supplemental policy.
"(B) The current enrollment levels in each type of medicare supplemental policy.
"(C) The availability of each type of medicare supplemental policy to medicare beneficiaries over age 65½.
"(D) The number and type of medicare supplemental policies offered in each State.
"(E) The average out-of-pocket costs (including premiums) per beneficiary under each type of medicare supplemental policy.
"(2)[(3)]
Conforming Benefits to Changes in Terminology for Hospital Outpatient Department Cost Sharing
Transition Provisions
"(1)
"(2) NAIC
"(3)
"(4)
"(A)
"(i) the date the State changes its statutes or regulations to conform its regulatory program to the changes made by this section, or
"(ii) July 1, 2009.
"(B)
"(i) requiring State legislation (other than legislation appropriating funds) to conform its regulatory program to the changes made in this section, but
"(ii) having a legislature which is not scheduled to meet in 2009 in a legislative session in which such legislation may be considered, the date specified in this paragraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after July 1, 2009. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature."
"(1)
"(2) NAIC
"(3)
"(4)
"(A)
"(i) the date the State changes its statutes or regulations to conform its regulatory program to the changes made by this section, or
"(ii) 1 year after the date the NAIC or the Secretary first makes the modifications under paragraph (2) or (3), respectively.
"(B)
"(i) requiring State legislation (other than legislation appropriating funds) to conform its regulatory program to the changes made in this section, but
"(ii) having a legislature which is not scheduled to meet in 1999 in a legislative session in which such legislation may be considered,
the date specified in this paragraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after July 1, 1999. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature."
"(1)
"(2)
"(A) includes a cause of action which arose, or which is based on or evidenced by any act or omission which occurred, during the transition period; and
"(B) relates to the application of section 1882(d)(3)(A) of the Social Security Act to any act or omission with respect to the sale, issuance, or renewal of any health insurance policy that is described in clause (iv) or (v) of such section (as amended by subsection (a)).
"(3)
"(4)
Applicability of Disclosure Requirement
State Regulatory Programs
"(1)
"(2) NAIC
"(3)
"(4)
"(A)
"(i) the date the State changes its statutes or regulations to conform its regulatory program to the changes made by this section, or
"(ii) 1 year after the date the NAIC or the Secretary first makes the modifications under paragraph (2) or (3), respectively.
"(B)
"(i) requiring State legislation (other than legislation appropriating funds) to conform its regulatory program to the changes made in this section, but
"(ii) having a legislature which is not scheduled to meet in 1996 in a legislative session in which such legislation may be considered,
the date specified in this paragraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1996. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature."
Evaluation of 1990 Amendments
1 So in original. Probably should be "subsection (l)".
2 So in original. Probably should be followed by a comma.
3 So in original. Probably should be "meet".
4 So in original. Probably should be preceded by "the".
5 See References in Text note below.
§1395ss–1. Clarification
Any health insurance policy that provides reimbursement for expenses incurred for items and services for which payment may be made under title XVIII of the Social Security Act [
(
Editorial Notes
References in Text
The Social Security Act, referred to in text, is act Aug. 14, 1935, ch. 531,
Codification
Section was enacted as part of the Medicare Improvements for Patients and Providers Act of 2008, and not as part of the Social Security Act which comprises this chapter.
§1395tt. Hospital providers of extended care services
(a) Hospital facility agreements; reasonable costs of services
(1) Any hospital which has an agreement under
(2)(A) Notwithstanding any other provision of this subchapter, payment to any hospital (other than a critical access hospital) for services furnished under an agreement entered into under this section shall be based upon the reasonable cost of the services as determined under subparagraph (B).
(B)(i) The reasonable cost of the services consists of the reasonable cost of routine services (determined under clause (ii)) and the reasonable cost of ancillary services (determined under clause (iii)).
(ii) The reasonable cost of routine services furnished during any calendar year by a hospital under an agreement under this section is equal to the product of—
(I) the number of patient-days during the year for which the services were furnished, and
(II) the average reasonable cost per patient-day, such average reasonable cost per patient-day being the average rate per patient-day paid for routine services during the most recent year for which cost reporting data are available with respect to such services (increased in a compounded manner by the applicable increase for payments for routine service costs of skilled nursing facilities under subsections (a) through (d) of
(iii) The reasonable cost of ancillary services shall be determined in the same manner as the reasonable cost of ancillary services provided for inpatient hospital services.
(3) Notwithstanding any other provision of this subchapter, a critical access hospital shall be paid for covered skilled nursing facility services furnished under an agreement entered into under this section on the basis of equal to 101 percent of the reasonable costs of such services (as determined under
(b) Eligible facilities
The Secretary may not enter into an agreement under this section with any hospital unless, except as provided under subsection (g), the hospital is located in a rural area and has less than 100 beds.
(c) Terms and conditions of facility agreements
An agreement with a hospital under this section shall, except as otherwise provided under regulations of the Secretary, be of the same duration and subject to termination on the same conditions as are agreements with skilled nursing facilities under
(d) Post-hospital extended care services
Any agreement with a hospital under this section shall provide that payment for services will be made only for services for which payment would be made as post-hospital extended care services if those services had been furnished by a skilled nursing facility under an agreement entered into under
(e) Reimbursement for routine hospital services
During a period for which a hospital has in effect an agreement under this section, in order to allocate routine costs between hospital and long-term care services for purposes of determining payment for inpatient hospital services, the total reimbursement due for routine services from all classes of long-term care patients (including this subchapter, subchapter XIX, and private pay patients) shall be subtracted from the hospital's total routine costs before calculations are made to determine this subchapter reimbursement for routine hospital services.
(f) Conditions applicable to skilled nursing facilities
A hospital which enters into an agreement with the Secretary under this section shall be required to meet those conditions applicable to skilled nursing facilities relating to discharge planning and the social services function (and staffing requirements to satisfy it) which are promulgated by the Secretary under
(g) Agreements on demonstration basis
The Secretary may enter into an agreement under this section on a demonstration basis with any hospital which does not meet the requirement of subsection (b)(1), if the hospital otherwise meets the requirements of this section.
(Aug. 14, 1935, ch. 531, title XVIII, §1883, as added
Editorial Notes
Amendments
2003—Subsec. (a)(3).
2000—Subsec. (a)(2)(A).
Subsec. (a)(3).
1999—Subsec. (a)(1).
Subsec. (b).
"(1) except as provided under subsection (g) of this section, the hospital is located in a rural area and has less than 100 beds, and
"(2) the hospital has been granted a certificate of need for the provision of long-term care services from the State health planning and development agency (designated under
Subsec. (c).
Subsec. (d).
1997—Subsec. (a)(2)(B)(ii)(II).
1990—Subsec. (a)(2)(B)(ii)(II).
1989—Subsecs. (d)(1), (f).
1988—Subsec. (d)(1).
Subsec. (d)(3).
Subsec. (f).
1987—Subsec. (b)(1).
Subsec. (d).
Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Amendment by
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1990 Amendment
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Amendment by section 104(d)(6) of
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Amendment by section 4201(d)(3) of
Effective Date
Hold Harmless for Amendment by Pub. L. 101–508
Swing Beds Certified Prior to May 1, 1987
Report of Hospital Admissions for Extended Care Services
Report on Hospital Providers of Extended Care, Skilled Nursing, and Intermediate Care Services
§1395uu. Payments to promote closing or conversion of underutilized hospital facilities
(a) Transitional allowances; procedures applicable
Any hospital may file an application with the Secretary (in such form and including such data and information as the Secretary may require) for establishment of a transitional allowance under this subchapter with respect to the closing or conversion of an underutilized hospital facility. The Secretary also may establish procedures, consistent with this section, by which a hospital, before undergoing an actual closure or conversion of a hospital facility, can have a determination made as to whether or not it will be eligible for a transitional allowance under this section with respect to such closure or conversion.
(b) Allowable costs as transitional allowances; findings and determinations
If the Secretary finds, after consideration of an application under subsection (a), that—
(1) the hospital's closure or conversion—
(A) is formally initiated after September 30, 1981,
(B) is expected to benefit the program under this subchapter by (i) eliminating excess bed capacity, (ii) discontinuing an underutilized service for which there are adequate alternative sources, or (iii) substituting for the underutilized service some other service which is needed in the area, and
(C) is consistent with the findings of an appropriate health planning agency and with any applicable State program for reduction in the number of hospital beds in the State, and
(2) in the case of a complete closure of a hospital—
(A) the hospital is a private nonprofit hospital or a local governmental hospital, and
(B) the closure is not for replacement of the hospital,
the Secretary may include as an allowable cost in the hospital's reasonable cost (for the purpose of making payments to the hospital under this subchapter) an amount (in this section referred to as a "transitional allowance"), as provided in subsection (c).
(c) Factors determinative of transitional allowance
(1) Each transitional allowance established shall be reasonably related to the prior or prospective use of the facility involved under this subchapter and shall recognize—
(A) in the case of a facility conversion or closure (other than a complete closure of a hospital)—
(i) in the case of a private nonprofit or local governmental hospital, that portion of the hospital's costs attributable to capital assets of the facility which have been taken into account in determining reasonable cost for purposes of determining the amount of payment to the hospital under this subchapter, and
(ii) in the case of any hospital, transitional operating cost increases related to the conversion or closure to the extent that such operating costs exceed amounts ordinarily reimbursable under this subchapter; and
(B) in the case of complete closure of a hospital, the outstanding portion of actual debt obligations previously recognized as reasonable for purposes of reimbursement under this subchapter, less any salvage value of the hospital.
(2) A transitional allowance shall be for a period (not to exceed 20 years) specified by the Secretary, except that, in the case of a complete closure described in paragraph (1)(B), the Secretary may provide for a lump-sum allowance where the Secretary determines that such a one-time allowance is more efficient and economical.
(3) A transitional allowance shall take effect on a date established by the Secretary, but not earlier than the date of completion of the closure or conversion concerned.
(4) A transitional allowance shall not be considered in applying the limits to costs recognized as reasonable pursuant to the third sentence of subparagraph (A) and subparagraph (L)(i) of
(d) Hearing to review determination
A hospital dissatisfied with a determination of the Secretary on its application under this section may obtain an informal or formal hearing, at the discretion of the Secretary, by filing (in such form and within such time period as the Secretary establishes) a request for such a hearing. The Secretary shall make a final determination on such application within 30 days after the last day of such hearing.
(Aug. 14, 1935, ch. 531, title XVIII, §1884, as added
Editorial Notes
Amendments
1982—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1982 Amendment
Amendment by
Effective Date
Payments To Promote Closure and Conversion of Underutilized Hospital Facilities
Establishment and Evaluation of Transitional Allowances; Report and Recommendations to Congress
§1395vv. Withholding payments from certain medicaid providers
(a) Adjustments by Secretary
The Secretary may adjust, in accordance with this section, payments under parts A and B to any institution which has in effect an agreement with the Secretary under
(1) has (or previously had) in effect an agreement with a State agency to furnish medical care and services under a State plan approved under subchapter XIX, and
(2) from which (or from whom) such State agency (A) has been unable to recover overpayments made under the State plan, or (B) has been unable to collect the information necessary to enable it to determine the amount (if any) of the overpayments made to such institution or person under the State plan.
(b) Implementing regulations; notice, opportunity to be heard, etc.
The Secretary shall by regulation provide procedures for implementation of this section, which procedures shall—
(1) assure that the authority under this section is exercised only on behalf of a State agency which demonstrates to the Secretary's satisfaction that it has provided adequate notice of a determination or of a need for information, and an opportunity to appeal such determination or to provide such information,
(2) determine the amount of the payment to which the institution or person would otherwise be entitled under this subchapter which shall be treated as a setoff against overpayments under subchapter XIX, and
(3) assure the restoration to the institution or person of amounts withheld under this section which are ultimately determined to be in excess of overpayments under subchapter XIX and to which the institution or person would otherwise be entitled under this subchapter.
(c) Payment to States of amounts recovered
Notwithstanding any other provision of this chapter, from the trust funds established under
(Aug. 14, 1935, ch. 531, title XVIII, §1885, as added
§1395ww. Payments to hospitals for inpatient hospital services
(a) Determination of costs for inpatient hospital services; limitations; exemptions; "operating costs of inpatient hospital services" defined
(1)(A)(i) The Secretary, in determining the amount of the payments that may be made under this subchapter with respect to operating costs of inpatient hospital services (as defined in paragraph (4)) shall not recognize as reasonable (in the efficient delivery of health services) costs for the provision of such services by a hospital for a cost reporting period to the extent such costs exceed the applicable percentage (as determined under clause (ii)) of the average of such costs for all hospitals in the same grouping as such hospital for comparable time periods.
(ii) For purposes of clause (i), the applicable percentage for hospital cost reporting periods beginning—
(I) on or after October 1, 1982, and before October 1, 1983, is 120 percent;
(II) on or after October 1, 1983, and before October 1, 1984, is 115 percent; and
(III) on or after October 1, 1984, is 110 percent.
(B)(i) For purposes of subparagraph (A) the Secretary shall establish case mix indexes for all short-term hospitals, and shall set limits for each hospital based upon the general mix of types of medical cases with respect to which such hospital provides services for which payment may be made under this subchapter.
(ii) The Secretary shall set such limits for a cost reporting period of a hospital—
(I) by updating available data for a previous period to the immediate preceding cost reporting period by the estimated average rate of change of hospital costs industry-wide, and
(II) by projecting for the cost reporting period by the applicable percentage increase (as defined in subsection (b)(3)(B)).
(C) The limitation established under subparagraph (A) for any hospital shall in no event be lower than the allowable operating costs of inpatient hospital services (as defined in paragraph (4)) recognized under this subchapter for such hospital for such hospital's last cost reporting period prior to the hospital's first cost reporting period for which this section is in effect.
(D) Subparagraph (A) shall not apply to cost reporting periods beginning on or after October 1, 1983.
(2) The Secretary shall provide for such exemptions from, and exceptions and adjustments to, the limitation established under paragraph (1)(A) as he deems appropriate, including those which he deems necessary to take into account—
(A) the special needs of sole community hospitals, of new hospitals, of risk based health maintenance organizations, and of hospitals which provide atypical services or essential community services, and to take into account extraordinary circumstances beyond the hospital's control, medical and paramedical education costs, significantly fluctuating population in the service area of the hospital, and unusual labor costs,
(B) the special needs of psychiatric hospitals and of public or other hospitals that serve a significantly disproportionate number of patients who have low income or are entitled to benefits under part A of this subchapter, and
(C) a decrease in the inpatient hospital services that a hospital provides and that are customarily provided directly by similar hospitals which results in a significant distortion in the operating costs of inpatient hospital services.
(3) The limitation established under paragraph (1)(A) shall not apply with respect to any hospital which—
(A) is located outside of a standard metropolitan statistical area, and
(B)(i) has less than 50 beds, and
(ii) was in operation and had less than 50 beds on September 3, 1982.
(4) For purposes of this section, the term "operating costs of inpatient hospital services" includes all routine operating costs, ancillary service operating costs, and special care unit operating costs with respect to inpatient hospital services as such costs are determined on an average per admission or per discharge basis (as determined by the Secretary), and includes the costs of all services for which payment may be made under this subchapter that are provided by the hospital (or by an entity wholly owned or operated by the hospital) to the patient during the 3 days (or, in the case of a hospital that is not a subsection (d) hospital, during the 1 day) immediately preceding the date of the patient's admission if such services are diagnostic services (including clinical diagnostic laboratory tests) or are other services related to the admission (as defined by the Secretary). Such term does not include costs of approved educational activities, a return on equity capital, other capital-related costs (as defined by the Secretary for periods before October 1, 1987), for cost reporting periods beginning on or after October 1, 2020, costs related to hematopoietic stem cell acquisition for the purpose of an allogeneic hematopoietic stem cell transplant (as described in subsection (d)(5)(M)), or costs with respect to administering blood clotting factors to individuals with hemophilia. In applying the first sentence of this paragraph, the term "other services related to the admission" includes all services that are not diagnostic services (other than ambulance and maintenance renal dialysis services) for which payment may be made under this subchapter that are provided by a hospital (or an entity wholly owned or operated by the hospital) to a patient—
(A) on the date of the patient's inpatient admission; or
(B) during the 3 days (or, in the case of a hospital that is not a subsection (d) hospital, during the 1 day) immediately preceding the date of such admission unless the hospital demonstrates (in a form and manner, and at a time, specified by the Secretary) that such services are not related (as determined by the Secretary) to such admission.
(b) Computation of payment; definitions; exemptions; adjustments
(1) Notwithstanding
(A) are less than or equal to the target amount (as defined in paragraph (3)) for that hospital for that period, the amount of the payment with respect to such operating costs payable under part A on a per discharge or per admission basis (as the case may be) shall be equal to the amount of such operating costs, plus—
(i) 15 percent of the amount by which the target amount exceeds the amount of the operating costs, or
(ii) 2 percent of the target amount,
whichever is less;
(B) are greater than the target amount but do not exceed 110 percent of the target amount, the amount of the payment with respect to those operating costs payable under part A on a per discharge basis shall equal the target amount; or
(C) are greater than 110 percent of the target amount, the amount of the payment with respect to such operating costs payable under part A on a per discharge or per admission basis (as the case may be) shall be equal to (i) the target amount, plus (ii) in the case of cost reporting periods beginning on or after October 1, 1991, an additional amount equal to 50 percent of the amount by which the operating costs exceed 110 percent of the target amount (except that such additional amount may not exceed 10 percent of the target amount) after any exceptions or adjustments are made to such target amount for the cost reporting period;
plus the amount, if any, provided under paragraph (2), except that in no case may the amount payable under this subchapter (other than on the basis of a DRG prospective payment rate determined under subsection (d)) with respect to operating costs of inpatient hospital services exceed the maximum amount payable with respect to such costs pursuant to subsection (a).
(2)(A) Except as provided in subparagraph (E), in addition to the payment computed under paragraph (1), in the case of an eligible hospital (described in subparagraph (B)) for a cost reporting period beginning on or after October 1, 1997, the amount of payment on a per discharge basis under paragraph (1) shall be increased by the lesser of—
(i) 50 percent of the amount by which the operating costs are less than the expected costs (as defined in subparagraph (D)) for the period; or
(ii) 1 percent of the target amount for the period.
(B) For purposes of this paragraph, an "eligible hospital" means with respect to a cost reporting period, a hospital—
(i) that has received payments under this subsection for at least 3 full cost reporting periods before that cost reporting period, and
(ii) whose operating costs for the period are less than the least of its target amount, its trended costs (as defined in subparagraph (C)), or its expected costs (as defined in subparagraph (D)) for the period.
(C) For purposes of subparagraph (B)(ii), the term "trended costs" means for a hospital cost reporting period ending in a fiscal year—
(i) in the case of a hospital for which its cost reporting period ending in fiscal year 1996 was its third or subsequent full cost reporting period for which it receives payments under this subsection, the lesser of the operating costs or target amount for that hospital for its cost reporting period ending in fiscal year 1996, or
(ii) in the case of any other hospital, the operating costs for that hospital for its third full cost reporting period for which it receives payments under this subsection,
increased (in a compounded manner) for each succeeding fiscal year (through the fiscal year involved) by the market basket percentage increase for the fiscal year.
(D) For purposes of this paragraph, the term "expected costs", with respect to the cost reporting period ending in a fiscal year, means the lesser of the operating costs of inpatient hospital services or target amount per discharge for the previous cost reporting period updated by the market basket percentage increase (as defined in paragraph (3)(B)(iii)) for the fiscal year.
(E)(i) In the case of an eligible hospital that is a hospital or unit that is within a class of hospital described in clause (ii) with a 12-month cost reporting period beginning before November 29, 1999, in determining the amount of the increase under subparagraph (A), the Secretary shall substitute for the percentage of the target amount applicable under subparagraph (A)(ii)—
(I) for a cost reporting period beginning on or after October 1, 2000, and before September 30, 2001, 1.5 percent; and
(II) for a cost reporting period beginning on or after October 1, 2001, and before September 30, 2002, 2 percent.
(ii) For purposes of clause (i), each of the following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection (d)(1)(B) and psychiatric units described in the matter following clause (v) of such subsection.
(II) Hospitals described in clause (iv) of such subsection.
(3)(A) Except as provided in subparagraph (C) and succeeding subparagraphs, and in paragraph (7)(A)(ii), for purposes of this subsection, the term "target amount" means, with respect to a hospital for a particular 12-month cost reporting period—
(i) in the case of the first such reporting period for which this subsection is in effect, the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this subchapter for such hospital for the preceding 12-month cost reporting period, and
(ii) in the case of a later reporting period, the target amount for the preceding 12-month cost reporting period,
increased by the applicable percentage increase under subparagraph (B) for that particular cost reporting period.
(B)(i) For purposes of subsection (d) and subsection (j) for discharges occurring during a fiscal year, the "applicable percentage increase" shall be—
(I) for fiscal year 1986, ½ percent,
(II) for fiscal year 1987, 1.15 percent,
(III) for fiscal year 1988, 3.0 percent for hospitals located in a rural area, 1.5 percent for hospitals located in a large urban area (as defined in subsection (d)(2)(D)), and 1.0 percent for hospitals located in other urban areas,
(IV) for fiscal year 1989, the market basket percentage increase minus 1.5 percentage points for hospitals located in a rural area, the market basket percentage increase minus 2.0 percentage points for hospitals located in a large urban area, and the market basket percentage increase minus 2.5 percentage points for hospitals located in other urban areas,
(V) for fiscal year 1990, the market basket percentage increase plus 4.22 percentage points for hospitals located in a rural area, the market basket percentage increase plus 0.12 percentage points for hospitals located in a large urban area, and the market basket percentage increase minus 0.53 percentage points for hospitals located in other urban areas,
(VI) for fiscal year 1991, the market basket percentage increase minus 2.0 percentage points for hospitals in a large urban or other urban area, and the market basket percentage increase minus 0.7 percentage point for hospitals located in a rural area,
(VII) for fiscal year 1992, the market basket percentage increase minus 1.6 percentage points for hospitals in a large urban or other urban area, and the market basket percentage increase minus 0.6 percentage point for hospitals located in a rural area,
(VIII) for fiscal year 1993, the market basket percentage increase minus 1.55 percentage point for hospitals in a large urban or other urban area, and the market basket percentage increase minus 0.55 1 for hospitals located in a rural area,
(IX) for fiscal year 1994, the market basket percentage increase minus 2.5 percentage points for hospitals located in a large urban or other urban area, and the market basket percentage increase minus 1.0 percentage point for hospitals located in a rural area,
(X) for fiscal year 1995, the market basket percentage increase minus 2.5 percentage points for hospitals located in a large urban or other urban area, and such percentage increase for hospitals located in a rural area as will provide for the average standardized amount determined under subsection (d)(3)(A) for hospitals located in a rural area being equal to such average standardized amount for hospitals located in an urban area (other than a large urban area),
(XI) for fiscal year 1996, the market basket percentage increase minus 2.0 percentage points for hospitals in all areas,
(XII) for fiscal year 1997, the market basket percentage increase minus 0.5 percentage point for hospitals in all areas,
(XIII) for fiscal year 1998, 0 percent,
(XIV) for fiscal year 1999, the market basket percentage increase minus 1.9 percentage points for hospitals in all areas,
(XV) for fiscal year 2000, the market basket percentage increase minus 1.8 percentage points for hospitals in all areas,
(XVI) for fiscal year 2001, the market basket percentage increase for hospitals in all areas,
(XVII) for fiscal year 2002, the market basket percentage increase minus 0.55 percentage points for hospitals in all areas,
(XVIII) for fiscal year 2003, the market basket percentage increase minus 0.55 percentage points for hospitals in all areas,
(XIX) for each of fiscal years 2004 through 2006, subject to clause (vii), the market basket percentage increase for hospitals in all areas; 2 and
(XX) for each subsequent fiscal year, subject to clauses (viii), (ix), (xi), and (xii), the market basket percentage increase for hospitals in all areas.
(ii) For purposes of subparagraphs (A) and (E), the "applicable percentage increase" for 12-month cost reporting periods beginning during—
(I) fiscal year 1986, is 0.5 percent,
(II) fiscal year 1987, is 1.15 percent,
(III) fiscal year 1988, is the market basket percentage increase minus 2.0 percentage points,
(IV) a subsequent fiscal year ending on or before September 30, 1993, is the market basket percentage increase,
(V) fiscal years 1994 through 1997, is the market basket percentage increase minus the applicable reduction (as defined in clause (v)(II)), or in the case of a hospital for a fiscal year for which the hospital's update adjustment percentage (as defined in clause (v)(I)) is at least 10 percent, the market basket percentage increase,
(VI) for fiscal year 1998, is 0 percent,
(VII) for fiscal years 1999 through 2002, is the applicable update factor specified under clause (vi) for the fiscal year, and
(VIII) subsequent fiscal years is the market basket percentage increase.
(iii) For purposes of this subparagraph, the term "market basket percentage increase" means, with respect to cost reporting periods and discharges occurring in a fiscal year, the percentage, estimated by the Secretary before the beginning of the period or fiscal year, by which the cost of the mix of goods and services (including personnel costs but excluding nonoperating costs) comprising routine, ancillary, and special care unit inpatient hospital services, based on an index of appropriately weighted indicators of changes in wages and prices which are representative of the mix of goods and services included in such inpatient hospital services, for the period or fiscal year will exceed the cost of such mix of goods and services for the preceding 12-month cost reporting period or fiscal year.
(iv) For purposes of subparagraphs (C) and (D), the "applicable percentage increase" is—
(I) for 12-month cost reporting periods beginning during fiscal years 1986 through 1993, the applicable percentage increase specified in clause (ii),
(II) for fiscal year 1994, the market basket percentage increase minus 2.3 percentage points (adjusted to exclude any portion of a cost reporting period beginning during fiscal year 1993 for which the applicable percentage increase is determined under subparagraph (I)),
(III) for fiscal year 1995, the market basket percentage increase minus 2.2 percentage points, and
(IV) for fiscal year 1996 and each subsequent fiscal year, the applicable percentage increase under clause (i).
(v) For purposes of clause (ii)(V)—
(I) a hospital's "update adjustment percentage" for a fiscal year is the percentage by which the hospital's allowable operating costs of inpatient hospital services recognized under this subchapter for the cost reporting period beginning in fiscal year 1990 exceeds the hospital's target amount (as determined under subparagraph (A)) for such cost reporting period, increased for each fiscal year (beginning with fiscal year 1994) by the sum of any of the hospital's applicable reductions under subclause (V) for previous fiscal years; and
(II) the "applicable reduction" with respect to a hospital for a fiscal year is the lesser of 1 percentage point or the percentage point difference between 10 percent and the hospital's update adjustment percentage for the fiscal year.
(vi) For purposes of clause (ii)(VII) for a fiscal year, if a hospital's allowable operating costs of inpatient hospital services recognized under this subchapter for the most recent cost reporting period for which information is available—
(I) is equal to, or exceeds, 110 percent of the hospital's target amount (as determined under subparagraph (A)) for such cost reporting period, the applicable update factor specified under this clause is the market basket percentage;
(II) exceeds 100 percent, but is less than 110 percent, of such target amount for the hospital, the applicable update factor specified under this clause is 0 percent or, if greater, the market basket percentage minus 0.25 percentage points for each percentage point by which such allowable operating costs (expressed as a percentage of such target amount) is less than 110 percent of such target amount;
(III) is equal to, or less than 100 percent, but exceeds 2/3 of such target amount for the hospital, the applicable update factor specified under this clause is 0 percent or, if greater, the market basket percentage minus 2.5 percentage points; or
(IV) does not exceed 2/3 of such target amount for the hospital, the applicable update factor specified under this clause is 0 percent.
(vii)(I) For purposes of clause (i)(XIX) for fiscal years 2005 and 2006, in a case of a subsection (d) hospital that does not submit data to the Secretary in accordance with subclause (II) with respect to such a fiscal year, the applicable percentage increase under such clause for such fiscal year shall be reduced by 0.4 percentage points. Such reduction shall apply only with respect to the fiscal year involved, and the Secretary shall not take into account such reduction in computing the applicable percentage increase under clause (i)(XIX) for a subsequent fiscal year.
(II) For fiscal years 2005 and 2006, each subsection (d) hospital shall submit to the Secretary quality data (for a set of 10 indicators established by the Secretary as of November 1, 2003) that relate to the quality of care furnished by the hospital in inpatient settings in a form and manner, and at a time, specified by the Secretary for purposes of this clause, but with respect to fiscal year 2005, the Secretary shall provide for a 30-day grace period for the submission of data by a hospital.
(viii)(I) For purposes of clause (i) for fiscal year 2007 and each subsequent fiscal year, in the case of a subsection (d) hospital that does not submit, to the Secretary in accordance with this clause, data required to be submitted on measures selected under this clause with respect to such a fiscal year, the applicable percentage increase under clause (i) for such fiscal year shall be reduced by 2.0 percentage points (or, beginning with fiscal year 2015, by one-quarter of such applicable percentage increase (determined without regard to clause (ix), (xi), or (xii))). Such reduction shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the applicable percentage increase under clause (i) for a subsequent fiscal year, and the Secretary and the Medicare Payment Advisory Commission shall carry out the requirements under section 5001(b) of the Deficit Reduction Act of 2005.
(II) Each subsection (d) hospital shall submit data on measures selected under this clause to the Secretary in a form and manner, and at a time, specified by the Secretary for purposes of this clause. The Secretary may require hospitals to submit data on measures that are not used for the determination of value-based incentive payments under subsection (o).
(III) The Secretary shall expand, beyond the measures specified under clause (vii)(II) and consistent with the succeeding subclauses, the set of measures that the Secretary determines to be appropriate for the measurement of the quality of care (including medication errors) furnished by hospitals in inpatient settings.
(IV) Effective for payments beginning with fiscal year 2007, in expanding the number of measures under subclause (III), the Secretary shall begin to adopt the baseline set of performance measures as set forth in the November 2005 report by the Institute of Medicine of the National Academy of Sciences under section 238(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
(V) Effective for payments for fiscal years 2008 through 2012, the Secretary shall add other measures that reflect consensus among affected parties and, to the extent feasible and practicable, shall include measures set forth by one or more national consensus building entities.
(VI) For purposes of this clause and clause (vii), the Secretary may replace any measures or indicators in appropriate cases, such as where all hospitals are effectively in compliance or the measures or indicators have been subsequently shown not to represent the best clinical practice.
(VII) The Secretary shall establish procedures for making information regarding measures submitted under this clause available to the public. Such procedures shall ensure that a hospital has the opportunity to review the data that are to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures of process, structure, outcome, patients' perspectives on care, efficiency, and costs of care that relate to services furnished in inpatient settings in hospitals on the Internet website of the Centers for Medicare & Medicaid Services.
(VIII) Effective for payments beginning with fiscal year 2013, with respect to quality measures for outcomes of care, the Secretary shall provide for such risk adjustment as the Secretary determines to be appropriate to maintain incentives for hospitals to treat patients with severe illnesses or conditions.
(IX)(aa) Subject to item (bb), effective for payments beginning with fiscal year 2013, each measure specified by the Secretary under this clause shall be endorsed by the entity with a contract under
(bb) In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(X) To the extent practicable, the Secretary shall, with input from consensus organizations and other stakeholders, take steps to ensure that the measures specified by the Secretary under this clause are coordinated and aligned with quality measures applicable to—
(aa) physicians under
(bb) other providers of services and suppliers under this subchapter.
(XI) The Secretary shall establish a process to validate measures specified under this clause as appropriate. Such process shall include the auditing of a number of randomly selected hospitals sufficient to ensure validity of the reporting program under this clause as a whole and shall provide a hospital with an opportunity to appeal the validation of measures reported by such hospital.
(XII)(aa) With respect to a Hospital Consumer Assessment of Healthcare Providers and Systems survey (or a successor survey) conducted on or after January 1, 2020, such survey may not include questions about communication by hospital staff with an individual about such individual's pain unless such questions take into account, as applicable, whether an individual experiencing pain was informed about risks associated with the use of opioids and about non-opioid alternatives for the treatment of pain.
(bb) The Secretary shall not include on the Hospital Compare internet website any measures based on the questions appearing on the Hospital Consumer Assessment of Healthcare Providers and Systems survey in 2018 or 2019 about communication by hospital staff with an individual about such individual's pain.
(ix)(I) For purposes of clause (i) for fiscal year 2015 and each subsequent fiscal year, in the case of an eligible hospital (as defined in subsection (n)(6)) that is not a meaningful EHR user (as defined in subsection (n)(3)) for an EHR reporting period for such fiscal year, three-quarters of the applicable percentage increase otherwise applicable under clause (i) (determined without regard to clause (viii), (xi), or (xii)) for such fiscal year shall be reduced by 331/3 percent for fiscal year 2015, 662/3 percent for fiscal year 2016, and 100 percent for fiscal year 2017 and each subsequent fiscal year. Such reduction shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the applicable percentage increase under clause (i) for a subsequent fiscal year.
(II) The Secretary may, on a case-by-case basis (and, with respect to the application of subclause (I) for fiscal year 2017, for categories of subsection (d) hospitals, as established by the Secretary and posted on the Internet website of the Centers for Medicare & Medicaid Services prior to December 15, 2015, an application for which must be submitted to the Secretary by not later than April 1, 2016), exempt an eligible hospital from the application of subclause (I) with respect to a fiscal year if the Secretary determines, subject to annual renewal, that requiring such hospital to be a meaningful EHR user during such fiscal year would result in a significant hardship, such as in the case of a hospital in a rural area without sufficient Internet access. The Secretary shall exempt an eligible hospital from the application of the payment adjustment under subclause (I) with respect to a fiscal year, subject to annual renewal, if the Secretary determines that compliance with the requirement for being a meaningful EHR user is not possible because the certified EHR technology used by such hospital is decertified under a program kept or recognized pursuant to
(III) For fiscal year 2015 and each subsequent fiscal year, a State in which hospitals are paid for services under
(IV) For purposes of this clause, the term "EHR reporting period" means, with respect to a fiscal year, any period (or periods) as specified by the Secretary.
(x)(I) The Secretary shall develop standard Internet website reports tailored to meet the needs of various stakeholders such as hospitals, patients, researchers, and policymakers. The Secretary shall seek input from such stakeholders in determining the type of information that is useful and the formats that best facilitate the use of the information.
(II) The Secretary shall modify the Hospital Compare Internet website to make the use and navigation of that website readily available to individuals accessing it.
(xi)(I) For 2012 and each subsequent fiscal year, after determining the applicable percentage increase described in clause (i) and after application of clauses (viii) and (ix), such percentage increase shall be reduced by the productivity adjustment described in subclause (II).
(II) The productivity adjustment described in this subclause, with respect to a percentage, factor, or update for a fiscal year, year, cost reporting period, or other annual period, is a productivity adjustment equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period).
(III) The application of subclause (I) may result in the applicable percentage increase described in clause (i) being less than 0.0 for a fiscal year, and may result in payment rates under this section for a fiscal year being less than such payment rates for the preceding fiscal year.
(xii) After determining the applicable percentage increase described in clause (i), and after application of clauses (viii), (ix), and (xi), the Secretary shall reduce such applicable percentage increase—
(I) for each of fiscal years 2010 and 2011, by 0.25 percentage point;
(II) for each of fiscal years 2012 and 2013, by 0.1 percentage point;
(III) for fiscal year 2014, by 0.3 percentage point;
(IV) for each of fiscal years 2015 and 2016, by 0.2 percentage point; and
(V) for each of fiscal years 2017, 2018, and 2019, by 0.75 percentage point.
The application of this clause may result in the applicable percentage increase described in clause (i) being less than 0.0 for a fiscal year, and may result in payment rates under this section for a fiscal year being less than such payment rates for the preceding fiscal year.
(C) In the case of a hospital that is a sole community hospital (as defined in subsection (d)(5)(D)(iii)), subject to subparagraphs (I) and (L), the term "target amount" means—
(i) with respect to the first 12-month cost reporting period in which this subparagraph is applied to the hospital—
(I) the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this subchapter for the hospital for the 12-month cost reporting period (in this subparagraph referred to as the "base cost reporting period") preceding the first cost reporting period for which this subsection was in effect with respect to such hospital, increased (in a compounded manner) by—
(II) the applicable percentage increases applied to such hospital under this paragraph for cost reporting periods after the base cost reporting period and up to and including such first 12-month cost reporting period,
(ii) with respect to a later cost reporting period beginning before fiscal year 1994, the target amount for the preceding 12-month cost reporting period, increased by the applicable percentage increase under subparagraph (B)(iv) for discharges occurring in the fiscal year in which that later cost reporting period begins,
(iii) with respect to discharges occurring in fiscal year 1994, the target amount for the cost reporting period beginning in fiscal year 1993 increased by the applicable percentage increase under subparagraph (B)(iv), or
(iv) with respect to discharges occurring in fiscal year 1995 and each subsequent fiscal year, the target amount for the preceding year increased by the applicable percentage increase under subparagraph (B)(iv).
There shall be substituted for the base cost reporting period described in clause (i) a hospital's cost reporting period (if any) beginning during fiscal year 1987 if such substitution results in an increase in the target amount for the hospital.
(D) For cost reporting periods ending on or before September 30, 1994, and for discharges occurring on or after October 1, 1997, and before January 1, 2025, in the case of a hospital that is a medicare-dependent, small rural hospital (as defined in subsection (d)(5)(G)), subject to subparagraph (K), the term "target amount" means—
(i) with respect to the first 12-month cost reporting period in which this subparagraph is applied to the hospital—
(I) the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this subchapter for the hospital for the 12-month cost reporting period (in this subparagraph referred to as the "base cost reporting period") preceding the first cost reporting period for which this subsection was in effect with respect to such hospital, increased (in a compounded manner) by—
(II) the applicable percentage increases applied to such hospital under this paragraph for cost reporting periods after the base cost reporting period and up to and including such first 12-month cost reporting period, or
(ii) with respect to a later cost reporting period beginning before fiscal year 1994, the target amount for the preceding 12-month cost reporting period, increased by the applicable percentage increase under subparagraph (B)(iv) for discharges occurring in the fiscal year in which that later cost reporting period begins,
(iii) with respect to discharges occurring in fiscal year 1994, the target amount for the cost reporting period beginning in fiscal year 1993 increased by the applicable percentage increase under subparagraph (B)(iv), and
(iv) with respect to discharges occurring during fiscal year 1998 through fiscal year 2024 and the portion of fiscal year 2025 beginning on October 1, 2024, and ending on December 31, 2024, the target amount for the preceding year increased by the applicable percentage increase under subparagraph (B)(iv).
There shall be substituted for the base cost reporting period described in clause (i) a hospital's cost reporting period (if any) beginning during fiscal year 1987 if such substitution results in an increase in the target amount for the hospital.
(E) In the case of a hospital described in clause (v) of subsection (d)(1)(B), the term "target amount" means—
(i) with respect to the first 12-month cost reporting period in which this subparagraph is applied to the hospital—
(I) the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this subchapter for the hospital for the 12-month cost reporting period (in this subparagraph referred to as the "base cost reporting period") preceding the first cost reporting period for which this subsection was in effect with respect to such hospital, increased (in a compounded manner) by—
(II) the sum of the applicable percentage increases applied to such hospital under this paragraph for cost reporting periods after the base cost reporting period and up to and including such first 12-month cost reporting period, or
(ii) with respect to a later cost reporting period, the target amount for the preceding 12-month cost reporting period, increased by the applicable percentage increase under subparagraph (B)(ii) for that later cost reporting period.
There shall be substituted for the base cost reporting period described in clause (i) a hospital's cost reporting period (if any) beginning during fiscal year 1987 if such substitution results in an increase in the target amount for the hospital.
(F)(i) In the case of a hospital (or unit described in the matter following clause (v) of subsection (d)(1)(B)) that received payment under this subsection for inpatient hospital services furnished during cost reporting periods beginning before October 1, 1990, that is within a class of hospital described in clause (iii), and that elects (in a form and manner determined by the Secretary) this subparagraph to apply to the hospital, the target amount for the hospital's 12-month cost reporting period beginning during fiscal year 1998 is equal to the average described in clause (ii).
(ii) The average described in this clause for a hospital or unit shall be determined by the Secretary as follows:
(I) The Secretary shall determine the allowable operating costs for inpatient hospital services for the hospital or unit for each of the 5 cost reporting periods for which the Secretary has the most recent settled cost reports as of August 5, 1997.
(II) The Secretary shall increase the amount determined under subclause (I) for each cost reporting period by the applicable percentage increase under subparagraph (B)(ii) for each subsequent cost reporting period up to the cost reporting period described in clause (i).
(III) The Secretary shall identify among such 5 cost reporting periods the cost reporting periods for which the amount determined under subclause (II) is the highest, and the lowest.
(IV) The Secretary shall compute the averages of the amounts determined under subclause (II) for the 3 cost reporting periods not identified under subclause (III).
(iii) For purposes of this subparagraph, each of the following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection (d)(1)(B) and psychiatric units described in the matter following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such subsection and rehabilitation units described in the matter following clause (v) of such subsection.
(III) Hospitals described in clause (iii) of such subsection.
(IV) Hospitals described in clause (iv) of such subsection.
(V) Hospitals described in clause (v) of such subsection.
(G)(i) In the case of a qualified long-term care hospital (as defined in clause (ii)) that elects (in a form and manner determined by the Secretary) this subparagraph to apply to the hospital, the target amount for the hospital's 12-month cost reporting period beginning during fiscal year 1998 is equal to the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this subchapter for the hospital for the 12-month cost reporting period beginning during fiscal year 1996, increased by the applicable percentage increase for the cost reporting period beginning during fiscal year 1997.
(ii) In clause (i), a "qualified long-term care hospital" means, with respect to a cost reporting period, a hospital described in clause (iv) of subsection (d)(1)(B) during each of the 2 cost reporting periods for which the Secretary has the most recent settled cost reports as of August 5, 1997, for each of which—
(I) the hospital's allowable operating costs of inpatient hospital services recognized under this subchapter exceeded 115 percent of the hospital's target amount, and
(II) the hospital would have a disproportionate patient percentage of at least 70 percent (as determined by the Secretary under subsection (d)(5)(F)(vi)) if the hospital were a subsection (d) hospital.
(H)(i) In the case of a hospital or unit that is within a class of hospital described in clause (iv), for a cost reporting period beginning during fiscal years 1998 through 2002, the target amount for such a hospital or unit may not exceed the amount as updated up to or for such cost reporting period under clause (ii).
(ii)(I) In the case of a hospital or unit that is within a class of hospital described in clause (iv), the Secretary shall estimate the 75th percentile of the target amounts for such hospitals within such class for cost reporting periods ending during fiscal year 1996, as adjusted under clause (iii).
(II) The Secretary shall update the amount determined under subclause (I), for each cost reporting period after the cost reporting period described in such subclause and up to the first cost reporting period beginning on or after October 1, 1997, by a factor equal to the market basket percentage increase.
(III) For cost reporting periods beginning during each of fiscal years 1999 through 2002, subject to subparagraph (J), the Secretary shall update such amount by a factor equal to the market basket percentage increase.
(iii) In applying clause (ii)(I) in the case of a hospital or unit, the Secretary shall provide for an appropriate adjustment to the labor-related portion of the amount determined under such subparagraph to take into account differences between average wage-related costs in the area of the hospital and the national average of such costs within the same class of hospital.
(iv) For purposes of this subparagraph, each of the following shall be treated as a separate class of hospital:
(I) Hospitals described in clause (i) of subsection (d)(1)(B) and psychiatric units described in the matter following clause (v) of such subsection.
(II) Hospitals described in clause (ii) of such subsection and rehabilitation units described in the matter following clause (v) of such subsection.
(III) Hospitals described in clause (iv) of such subsection.
(I)(i) Subject to subparagraph (L), for cost reporting periods beginning on or after October 1, 2000, in the case of a sole community hospital there shall be substituted for the amount otherwise determined under subsection (d)(5)(D)(i), if such substitution results in a greater amount of payment under this section for the hospital—
(I) with respect to discharges occurring in fiscal year 2001, 75 percent of the amount otherwise applicable to the hospital under subsection (d)(5)(D)(i) (referred to in this clause as the "subsection (d)(5)(D)(i) amount") and 25 percent of the rebased target amount (as defined in clause (ii));
(II) with respect to discharges occurring in fiscal year 2002, 50 percent of the subsection (d)(5)(D)(i) amount and 50 percent of the rebased target amount;
(III) with respect to discharges occurring in fiscal year 2003, 25 percent of the subsection (d)(5)(D)(i) amount and 75 percent of the rebased target amount; and
(IV) with respect to discharges occurring after fiscal year 2003, 100 percent of the rebased target amount.
(ii) For purposes of this subparagraph, the "rebased target amount" has the meaning given the term "target amount" in subparagraph (C) except that—
(I) there shall be substituted for the base cost reporting period the 12-month cost reporting period beginning during fiscal year 1996;
(II) any reference in subparagraph (C)(i) to the "first cost reporting period" described in such subparagraph is deemed a reference to the first cost reporting period beginning on or after October 1, 2000; and
(III) applicable increase percentage shall only be applied under subparagraph (C)(iv) for discharges occurring in fiscal years beginning with fiscal year 2002.
(iii) In no case shall a hospital be denied treatment as a sole community hospital or payment (on the basis of a target rate as such as a hospital) because data are unavailable for any cost reporting period due to changes in ownership, changes in fiscal intermediaries, or other extraordinary circumstances, so long as data for at least one applicable base cost reporting period is available.
(J) For cost reporting periods beginning during fiscal year 2001, for a hospital described in subsection (d)(1)(B)(iv)—
(i) the limiting or cap amount otherwise determined under subparagraph (H) shall be increased by 2 percent; and
(ii) the target amount otherwise determined under subparagraph (A) shall be increased by 25 percent (subject to the limiting or cap amount determined under subparagraph (H), as increased by clause (i)).
(K)(i) With respect to discharges occurring on or after October 1, 2006, in the case of a medicare-dependent, small rural hospital, for purposes of applying subparagraph (D)—
(I) there shall be substituted for the base cost reporting period described in subparagraph (D)(i) the 12-month cost reporting period beginning during fiscal year 2002; and
(II) any reference in such subparagraph to the "first cost reporting period" described in such subparagraph is deemed a reference to the first cost reporting period beginning on or after October 1, 2006.
(ii) This subparagraph shall only apply to a hospital if the substitution described in clause (i)(I) results in an increase in the target amount under subparagraph (D) for the hospital.
(L)(i) For cost reporting periods beginning on or after January 1, 2009, in the case of a sole community hospital there shall be substituted for the amount otherwise determined under subsection (d)(5)(D)(i) of this section, if such substitution results in a greater amount of payment under this section for the hospital, the subparagraph (L) rebased target amount.
(ii) For purposes of this subparagraph, the term "subparagraph (L) rebased target amount" has the meaning given the term "target amount" in subparagraph (C), except that—
(I) there shall be substituted for the base cost reporting period the 12-month cost reporting period beginning during fiscal year 2006;
(II) any reference in subparagraph (C)(i) to the "first cost reporting period" described in such subparagraph is deemed a reference to the first cost reporting period beginning on or after January 1, 2009; and
(III) the applicable percentage increase shall only be applied under subparagraph (C)(iv) for discharges occurring on or after January 1, 2009.
(4)(A)(i) The Secretary shall provide for an exception and adjustment to (and in the case of a hospital described in subsection (d)(1)(B)(iii), may provide an exemption from) the method under this subsection for determining the amount of payment to a hospital where events beyond the hospital's control or extraordinary circumstances, including changes in the case mix of such hospital, create a distortion in the increase in costs for a cost reporting period (including any distortion in the costs for the base period against which such increase is measured). The Secretary may provide for such other exemptions from, and exceptions and adjustments to, such method as the Secretary deems appropriate, including the assignment of a new base period which is more representative, as determined by the Secretary, of the reasonable and necessary cost of inpatient services and including those which he deems necessary to take into account a decrease in the inpatient hospital services that a hospital provides and that are customarily provided directly by similar hospitals which results in a significant distortion in the operating costs of inpatient hospital services. The Secretary shall announce a decision on any request for an exemption, exception, or adjustment under this paragraph not later than 180 days after receiving a completed application from the intermediary for such exemption, exception, or adjustment, and shall include in such decision a detailed explanation of the grounds on which such request was approved or denied.
(ii) The payment reductions under paragraph (3)(B)(ii)(V) shall not be considered by the Secretary in making adjustments pursuant to clause (i). In making such reductions, the Secretary shall treat the applicable update factor described in paragraph (3)(B)(vi) for a fiscal year as being equal to the market basket percentage for that year.
(B) In determining under subparagraph (A) whether to assign a new base period which is more representative of the reasonable and necessary cost to a hospital of providing inpatient services, the Secretary shall take into consideration—
(i) changes in applicable technologies and medical practices, or differences in the severity of illness among patients, that increase the hospital's costs;
(ii) whether increases in wages and wage-related costs for hospitals located in the geographic area in which the hospital is located exceed the average of the increases in such costs paid by hospitals in the United States; and
(iii) such other factors as the Secretary considers appropriate in determining increases in the hospital's costs of providing inpatient services.
(C) Paragraph (1) shall not apply to payment of hospitals which is otherwise determined under paragraph (3) of
(5) In the case of any hospital having any cost reporting period of other than a 12-month period, the Secretary shall determine the 12-month period which shall be used for purposes of this section.
(6) In the case of any hospital which becomes subject to the taxes under section 3111 of the Internal Revenue Code of 1986, with respect to any or all of its employees, for part or all of a cost reporting period, and was not subject to such taxes with respect to any or all of its employees for all or part of the 12-month base cost reporting period referred to in subsection (b)(3)(A)(i), the Secretary shall provide for an adjustment by increasing the base period amount described in such subsection for such hospital by an amount equal to the amount of such taxes which would have been paid or accrued by such hospital for such base period if such hospital had been subject to such taxes for all of such base period with respect to all its employees, minus the amount of any such taxes actually paid or accrued for such base period.
(7)(A) Notwithstanding paragraph (1), in the case of a hospital or unit that is within a class of hospital described in subparagraph (B) which first receives payments under this section on or after October 1, 1997—
(i) for each of the first 2 cost reporting periods for which the hospital has a settled cost report, the amount of the payment with respect to operating costs described in paragraph (1) under part A on a per discharge or per admission basis (as the case may be) is equal to the lesser of—
(I) the amount of operating costs for such respective period, or
(II) 110 percent of the national median (as estimated by the Secretary) of the target amount for hospitals in the same class as the hospital for cost reporting periods ending during fiscal year 1996, updated by the hospital market basket increase percentage to the fiscal year in which the hospital first received payments under this section, as adjusted under subparagraph (C); and
(ii) for purposes of computing the target amount for the subsequent cost reporting period, the target amount for the preceding cost reporting period is equal to the amount determined under clause (i) for such preceding period.
(B) For purposes of this paragraph, each of the following shall be treated as a separate class of hospital:
(i) Hospitals described in clause (i) of subsection (d)(1)(B) and psychiatric units described in the matter following clause (v) of such subsection.
(ii) Hospitals described in clause (ii) of such subsection and rehabilitation units described in the matter following clause (v) of such subsection.
(iii) Hospitals described in clause (iv) of such subsection.
(C) In applying subparagraph (A)(i)(II) in the case of a hospital or unit, the Secretary shall provide for an appropriate adjustment to the labor-related portion of the amount determined under such subparagraph to take into account differences between average wage-related costs in the area of the hospital and the national average of such costs within the same class of hospital.
(c) Payment in accordance with State hospital reimbursement control system; amount of payment; discontinuance of payments
(1) The Secretary may provide, in his discretion, that payment with respect to services provided by a hospital in a State may be made in accordance with a hospital reimbursement control system in a State, rather than in accordance with the other provisions of this subchapter, if the chief executive officer of the State requests such treatment and if—
(A) the Secretary determines that the system, if approved under this subsection, will apply (i) to substantially all non-Federal acute care hospitals (as defined by the Secretary) in the State and (ii) to the review of at least 75 percent of all revenues or expenses in the State for inpatient hospital services and of revenues or expenses for inpatient hospital services provided under the State's plan approved under subchapter XIX;
(B) the Secretary has been provided satisfactory assurances as to the equitable treatment under the system of all entities (including Federal and State programs) that pay hospitals for inpatient hospital services, of hospital employees, and of hospital patients;
(C) the Secretary has been provided satisfactory assurances that under the system, over 36-month periods (the first such period beginning with the first month in which this subsection applies to that system in the State), the amount of payments made under this subchapter under such system will not exceed the amount of payments which would otherwise have been made under this subchapter not using such system;
(D) the Secretary determines that the system will not preclude an eligible organization (as defined in
(E) the Secretary determines that the system requires hospitals to meet the requirement of
The Secretary cannot deny the application of a State under this subsection on the ground that the State's hospital reimbursement control system is based on a payment methodology other than on the basis of a diagnosis-related group or on the ground that the amount of payments made under this subchapter under such system must be less than the amount of payments which would otherwise have been made under this subchapter not using such system. If the Secretary determines that the conditions described in subparagraph (C) are based on maintaining payment amounts at no more than a specified percentage increase above the payment amounts in a base period, the State has the option of applying such test (for inpatient hospital services under part A) on an aggregate payment basis or on the basis of the amount of payment per inpatient discharge or admission. If the Secretary determines that the conditions described in subparagraph (C) are based on maintaining aggregate payment amounts below a national average percentage increase in total payments under part A for inpatient hospital services, the Secretary cannot deny the application of a State under this subsection on the ground that the State's rate of increase in such payments for such services must be less than such national average rate of increase.
(2) In determining under paragraph (1)(C) the amount of payment which would otherwise have been made under this subchapter for a State, the Secretary may provide for appropriate adjustment of such amount to take into account previous reductions effected in the amount of payments made under this subchapter in the State due to the operation of the hospital reimbursement control system in the State if the system has resulted in an aggregate rate of increase in operating costs of inpatient hospital services (as defined in subsection (a)(4)) under this subchapter for hospitals in the State which is less than the aggregate rate of increase in such costs under this subchapter for hospitals in the United States.
(3) The Secretary shall discontinue payments under a system described in paragraph (1) if the Secretary—
(A) determines that the system no longer meets the requirements of subparagraphs (A), (D), and (E) of paragraph (1) and, if applicable, the requirements of paragraph (5), or
(B) has reason to believe that the assurances described in subparagraph (B) or (C) of paragraph (1) (or, if applicable, in paragraph (5)) are not being (or will not be) met.
(4) The Secretary shall approve the request of a State under paragraph (1) with respect to a hospital reimbursement control system if—
(A) the requirements of subparagraphs (A), (B), (C), (D), and (E) of paragraph (1) have been met with respect to the system, and
(B) with respect to that system a waiver of certain requirements of this subchapter has been approved on or before (and which is in effect as of) April 20, 1983, pursuant to
With respect to a State system described in this paragraph, the Secretary shall judge the effectiveness of such system on the basis of its rate of increase or inflation in inpatient hospital payments for individuals under this subchapter, as compared to the national rate of increase or inflation for such payments, with the State retaining the option to have the test applied on the basis of the aggregate payments under the State system as compared to aggregate payments which would have been made under the national system since October 1, 1984, to the most recent date for which annual data are available.
(5) The Secretary shall approve the request of a State under paragraph (1) with respect to a hospital reimbursement control system if—
(A) the requirements of subparagraphs (A), (B), (C), (D), and (E) of paragraph (1) have been met with respect to the system;
(B) the Secretary determines that the system—
(i) is operated directly by the State or by an entity designated pursuant to State law,
(ii) provides for payment of hospitals covered under the system under a methodology (which sets forth exceptions and adjustments, as well as any method for changes in the methodology) by which rates or amounts to be paid for hospital services during a specified period are established under the system prior to the defined rate period, and
(iii) hospitals covered under the system will make such reports (in lieu of cost and other reports, identified by the Secretary, otherwise required under this subchapter) as the Secretary may require in order to properly monitor assurances provided under this subsection;
(C) the State has provided the Secretary with satisfactory assurances that operation of the system will not result in any change in hospital admission practices which result in—
(i) a significant reduction in the proportion of patients (receiving hospital services covered under the system) who have no third-party coverage and who are unable to pay for hospital services,
(ii) a significant reduction in the proportion of individuals admitted to hospitals for inpatient hospital services for which payment is (or is likely to be) less than the anticipated charges for or costs of such services,
(iii) the refusal to admit patients who would be expected to require unusually costly or prolonged treatment for reasons other than those related to the appropriateness of the care available at the hospital, or
(iv) the refusal to provide emergency services to any person who is in need of emergency services if the hospital provides such services;
(D) any change by the State in the system which has the effect of materially reducing payments to hospitals can only take effect upon 60 days notice to the Secretary and to the hospitals the payment to which is likely to be materially affected by the change; and
(E) the State has provided the Secretary with satisfactory assurances that in the development of the system the State has consulted with local governmental officials concerning the impact of the system on public hospitals.
The Secretary shall respond to requests of States under this paragraph within 60 days of the date the request is submitted to the Secretary.
(6) If the Secretary determines that the assurances described in paragraph (1)(C) have not been met with respect to any 36-month period, the Secretary may reduce payments under this subchapter to hospitals under the system in an amount equal to the amount by which the payment under this subchapter under such system for such period exceeded the amount of payments which would otherwise have been made under this subchapter not using such system.
(7) In the case of a State which made a request under paragraph (5) before December 31, 1984, for the approval of a State hospital reimbursement control system and which request was approved—
(A) in applying paragraphs (1)(C) and (6), a reference to a "36-month period" is deemed a reference to a "48-month period", and
(B) in order to allow the State the opportunity to provide the assurances described in paragraph (1)(C) for a 48-month period, the Secretary may not discontinue payments under the system, under the authority of paragraph (3)(A) because the Secretary has reason to believe that such assurances are not being (or will not be) met, before July 1, 1986.
(d) Inpatient hospital service payments on basis of prospective rates; Medicare Geographical Classification Review Board
(1)(A) Notwithstanding
(i) beginning on or after October 1, 1983, and before October 1, 1984, is equal to the sum of—
(I) the target percentage (as defined in subparagraph (C)) of the hospital's target amount for the cost reporting period (as defined in subsection (b)(3)(A) of this section, but determined without the application of subsection (a)), and
(II) the DRG percentage (as defined in subparagraph (C)) of the regional adjusted DRG prospective payment rate determined under paragraph (2) for such discharges;
(ii) beginning on or after October 1, 1984, and before October 1, 1987, is equal to the sum of—
(I) the target percentage (as defined in subparagraph (C)) of the hospital's target amount for the cost reporting period (as defined in subsection (b)(3)(A), but determined without the application of subsection (a)), and
(II) the DRG percentage (as defined in subparagraph (C)) of the applicable combined adjusted DRG prospective payment rate determined under subparagraph (D) for such discharges; or
(iii) beginning on or after April 1, 1988, is equal to—
(I) the national adjusted DRG prospective payment rate determined under paragraph (3) for such discharges, or
(II) for discharges occurring during a fiscal year ending on or before September 30, 1996, the sum of 85 percent of the national adjusted DRG prospective payment rate determined under paragraph (3) for such discharges and 15 percent of the regional adjusted DRG prospective payment rate determined under such paragraph, but only if the average standardized amount (described in clause (i)(I) or clause (ii)(I) of paragraph (3)(D)) for hospitals within the region of, and in the same large urban or other area (or, for discharges occurring during a fiscal year ending on or before September 30, 1994, the same large urban or other area) as, the hospital is greater than the average standardized amount (described in the respective clause) for hospitals within the United States in that type of area for discharges occurring during such fiscal year.
(B) As used in this section, the term "subsection (d) hospital" means a hospital located in one of the fifty States or the District of Columbia other than—
(i) a psychiatric hospital (as defined in
(ii) a rehabilitation hospital (as defined by the Secretary),
(iii) a hospital whose inpatients are predominantly individuals under 18 years of age,
(iv) a hospital which has an average inpatient length of stay (as determined by the Secretary) of greater than 25 days,
(v)(I) a hospital that the Secretary has classified, at any time on or before December 31, 1990,3 (or, in the case of a hospital that, as of December 19, 1989, is located in a State operating a demonstration project under
(II) a hospital that was recognized as a comprehensive cancer center or clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of April 20, 1983, that is located in a State which, as of December 19, 1989, was not operating a demonstration project under
(III) a hospital that was recognized as a clinical cancer research center by the National Cancer Institute of the National Institutes of Health as of February 18, 1998, that has never been reimbursed for inpatient hospital services pursuant to a reimbursement system under a demonstration project under
(vi) a hospital that first received payment under this subsection in 1986 which has an average inpatient length of stay (as determined by the Secretary) of greater than 20 days and that has 80 percent or more of its annual medicare inpatient discharges with a principal diagnosis that reflects a finding of neoplastic disease in the 12-month cost reporting period ending in fiscal year 1997;
and, in accordance with regulations of the Secretary, does not include a psychiatric or rehabilitation unit of the hospital which is a distinct part of the hospital (as defined by the Secretary). A hospital that was classified by the Secretary on or before September 30, 1995, as a hospital described in clause (iv) (as in effect as of such date) shall continue to be so classified (or, in the case of a hospital described in clause (iv)(II), as so in effect, shall be classified under clause (vi) on and after the effective date of such clause (vi) and for cost reporting periods beginning on or after January 1, 2015, shall not be subject to subsection (m) as of the date of such classification) notwithstanding that it is located in the same building as, or on the same campus as, another hospital.
(C) For purposes of this subsection, for cost reporting periods beginning—
(i) on or after October 1, 1983, and before October 1, 1984, the "target percentage" is 75 percent and the "DRG percentage" is 25 percent;
(ii) on or after October 1, 1984, and before October 1, 1985, the "target percentage" is 50 percent and the "DRG percentage" is 50 percent;
(iii) on or after October 1, 1985, and before October 1, 1986, the "target percentage" is 45 percent and the "DRG percentage" is 55 percent; and
(iv) on or after October 1, 1986, and before October 1, 1987, the "target percentage" is 25 percent and the "DRG percentage" is 75 percent.
(D) For purposes of subparagraph (A)(ii)(II), the "applicable combined adjusted DRG prospective payment rate" for discharges occurring—
(i) on or after October 1, 1984, and before October 1, 1986, is a combined rate consisting of 25 percent of the national adjusted DRG prospective payment rate, and 75 percent of the regional adjusted DRG prospective payment rate, determined under paragraph (3) for such discharges; and
(ii) on or after October 1, 1986, and before October 1, 1987, is a combined rate consisting of 50 percent of the national adjusted DRG prospective payment rate, and 50 percent of the regional adjusted DRG prospective payment rate, determined under paragraph (3) for such discharges.
(E) For purposes of subclauses (II) and (III) of subparagraph (B)(v) only, the term "principal finding of neoplastic disease" means the condition established after study to be chiefly responsible for occasioning the admission of a patient to a hospital, except that only discharges with ICD–9–CM principal diagnosis codes of 140 through 239, V58.0, V58.1, V66.1, V66.2, or 990 will be considered to reflect such a principal diagnosis.
(2) The Secretary shall determine a national adjusted DRG prospective payment rate, for each inpatient hospital discharge in fiscal year 1984 involving inpatient hospital services of a subsection (d) hospital in the United States, and shall determine a regional adjusted DRG prospective payment rate for such discharges in each region, for which payment may be made under part A of this subchapter. Each such rate shall be determined for hospitals located in urban or rural areas within the United States or within each such region, respectively, as follows:
(A)
(B)
(i) updating for fiscal year 1983 by the estimated average rate of change of hospital costs industry-wide between the cost reporting period used under such subparagraph and fiscal year 1983 and the most recent case-mix data available, and
(ii) projecting for fiscal year 1984 by the applicable percentage increase (as defined in subsection (b)(3)(B)) for fiscal year 1984.
(C)
(i) excluding an estimate of indirect medical education costs (taking into account, for discharges occurring after September 30, 1986, the amendments made by section 9104(a) of the Medicare and Medicaid Budget Reconciliation Amendments of 1985), except that the Secretary shall not take into account any reduction in the amount of additional payments under paragraph (5)(B)(ii) resulting from the amendment made by section 4621(a)(1) of the Balanced Budget Act of 1997 or any additional payments under such paragraph resulting from the application of section 111 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, of section 302 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, or the Medicare Prescription Drug, Improvement, and Modernization Act of 2003,
(ii) adjusting for variations among hospitals by area in the average hospital wage level,
(iii) adjusting for variations in case mix among hospitals, and
(iv) for discharges occurring on or after October 1, 1986, excluding an estimate of the additional payments to certain hospitals to be made under paragraph (5)(F), except that the Secretary shall not exclude additional payments under such paragraph made as a result of the enactment of section 6003(c) of the Omnibus Budget Reconciliation Act of 1989, the enactment of section 4002(b) of the Omnibus Budget Reconciliation Act of 1990, the enactment of section 303 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, or the enactment of section 402(a)(1) 4 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
(D)
(i) for all subsection (d) hospitals located in an urban area within the United States or that region, respectively, and
(ii) for all subsection (d) hospitals located in a rural area within the United States or that region, respectively.
For purposes of this subsection, the term "region" means one of the nine census divisions, comprising the fifty States and the District of Columbia, established by the Bureau of the Census for statistical and reporting purposes; the term "urban area" means an area within a Metropolitan Statistical Area (as defined by the Office of Management and Budget) or within such similar area as the Secretary has recognized under subsection (a) by regulation; the term "large urban area" means, with respect to a fiscal year, such an urban area which the Secretary determines (in the publications described in subsection (e)(5) before the fiscal year) has a population of more than 1,000,000 (as determined by the Secretary based on the most recent available population data published by the Bureau of the Census); and the term "rural area" means any area outside such an area or similar area. A hospital located in a Metropolitan Statistical Area shall be deemed to be located in the region in which the largest number of the hospitals in the same Metropolitan Statistical Area are located, or, at the option of the Secretary, the region in which the majority of the inpatient discharges (with respect to which payments are made under this subchapter) from hospitals in the same Metropolitan Statistical Area are made.
(E)
(F)
(G)
(i) for hospitals located in an urban area in the United States or that region (respectively), to the product of—
(I) the average standardized amount (computed under subparagraph (D), reduced under subparagraph (E), and adjusted under subparagraph (F)) for hospitals located in an urban area in the United States or that region, and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group; and
(ii) for hospitals located in a rural area in the United States or that region (respectively), to the product of—
(I) the average standardized amount (computed under subparagraph (D), reduced under subparagraph (E), and adjusted under subparagraph (F)) for hospitals located in a rural area in the United States or that region, and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group.
(H)
(3) The Secretary shall determine a national adjusted DRG prospective payment rate, for each inpatient hospital discharge in a fiscal year after fiscal year 1984 involving inpatient hospital services of a subsection (d) hospital in the United States, and shall determine, for fiscal years before fiscal year 1997, a regional adjusted DRG prospective payment rate for such discharges in each region for which payment may be made under part A of this subchapter. Each such rate shall be determined for hospitals located in large urban, other urban, or rural areas within the United States and within each such region, respectively, as follows:
(A)
(ii) For discharges occurring in a fiscal year beginning on or after October 1, 1987, and ending on or before September 30, 1994, the Secretary shall compute an average standardized amount for hospitals located in a large urban area, for hospitals located in a rural area, and for hospitals located in other urban areas, within the United States and within each region, equal to the respective average standardized amount computed for the previous fiscal year under this subparagraph increased by the applicable percentage increase under subsection (b)(3)(B)(i) with respect to hospitals located in the respective areas for the fiscal year involved.
(iii) For discharges occurring in the fiscal year beginning on October 1, 1994, the average standardized amount for hospitals located in a rural area shall be equal to the average standardized amount for hospitals located in an urban area. For discharges occurring on or after October 1, 1994, the Secretary shall adjust the ratio of the labor portion to non-labor portion of each average standardized amount to equal such ratio for the national average of all standardized amounts.
(iv)(I) Subject to subclause (II), for discharges occurring in a fiscal year beginning on or after October 1, 1995, the Secretary shall compute an average standardized amount for hospitals located in a large urban area and for hospitals located in other areas within the United States and within each region equal to the respective average standardized amount computed for the previous fiscal year under this subparagraph increased by the applicable percentage increase under subsection (b)(3)(B)(i) with respect to hospitals located in the respective areas for the fiscal year involved.
(II) For discharges occurring in a fiscal year (beginning with fiscal year 2004), the Secretary shall compute a standardized amount for hospitals located in any area within the United States and within each region equal to the standardized amount computed for the previous fiscal year under this subparagraph for hospitals located in a large urban area (or, beginning with fiscal year 2005, for all hospitals in the previous fiscal year) increased by the applicable percentage increase under subsection (b)(3)(B)(i) for the fiscal year involved.
(v) Average standardized amounts computed under this paragraph shall be adjusted to reflect the most recent case-mix data available.
(vi) Insofar as the Secretary determines that the adjustments under paragraph (4)(C)(i) for a previous fiscal year (or estimates that such adjustments for a future fiscal year) did (or are likely to) result in a change in aggregate payments under this subsection during the fiscal year that are a result of changes in the coding or classification of discharges that do not reflect real changes in case mix, the Secretary may adjust the average standardized amounts computed under this paragraph for subsequent fiscal years so as to eliminate the effect of such coding or classification changes.
(B)
(C)
(ii)
(D)
(i) for fiscal years before fiscal year 2004, for hospitals located in a large urban area in the United States or that region (respectively), to the product of—
(I) the average standardized amount (computed under subparagraph (A), reduced under subparagraph (B), and adjusted or reduced under subparagraph (C)) for the fiscal year for hospitals located in such a large urban area in the United States or that region, and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group;
(ii) for fiscal years before fiscal year 2004, for hospitals located in other areas in the United States or that region (respectively), to the product of—
(I) the average standardized amount (computed under subparagraph (A), reduced under subparagraph (B), and adjusted or reduced under subparagraph (C)) for the fiscal year for hospitals located in other areas in the United States or that region, and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group; and
(iii) for a fiscal year beginning after fiscal year 2003, for hospitals located in all areas, to the product of—
(I) the applicable standardized amount (computed under subparagraph (A)), reduced under subparagraph (B), and adjusted or reduced under subparagraph (C) for the fiscal year; and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group.
(E)
(i)
(ii)
(iii)
(I)
(II)
(III)
(IV)
(iv)
(I)
(II)
(III)
(IV)
(4)(A) The Secretary shall establish a classification of inpatient hospital discharges by diagnosis-related groups and a methodology for classifying specific hospital discharges within these groups.
(B) For each such diagnosis-related group the Secretary shall assign an appropriate weighting factor which reflects the relative hospital resources used with respect to discharges classified within that group compared to discharges classified within other groups.
(C)(i) The Secretary shall adjust the classifications and weighting factors established under subparagraphs (A) and (B), for discharges in fiscal year 1988 and at least annually thereafter, to reflect changes in treatment patterns, technology (including a new medical service or technology under paragraph (5)(K)), and other factors which may change the relative use of hospital resources.
(ii) For discharges in fiscal year 1990, the Secretary shall reduce the weighting factor for each diagnosis-related group by 1.22 percent.
(iii) Any such adjustment under clause (i) for discharges in a fiscal year (beginning with fiscal year 1991) or payments under paragraph (5)(M) (beginning with fiscal year 2021) shall be made in a manner that assures that the aggregate payments under this subsection for discharges in the fiscal year are not greater or less than those that would have been made for discharges in the year without such adjustment or payments under paragraph (5)(M).
(iv)(I) For discharges occurring during the emergency period described in
(II) Any adjustment under subclause (I) shall not be taken into account in applying budget neutrality under clause (iii) 5
(III) In the case of a State for which the Secretary has waived all or part of this section under the authority of
(D)(i) For discharges occurring on or after October 1, 2008, the diagnosis-related group to be assigned under this paragraph for a discharge described in clause (ii) shall be a diagnosis-related group that does not result in higher payment based on the presence of a secondary diagnosis code described in clause (iv).
(ii) A discharge described in this clause is a discharge which meets the following requirements:
(I) The discharge includes a condition identified by a diagnosis code selected under clause (iv) as a secondary diagnosis.
(II) But for clause (i), the discharge would have been classified to a diagnosis-related group that results in a higher payment based on the presence of a secondary diagnosis code selected under clause (iv).
(III) At the time of admission, no code selected under clause (iv) was present.
(iii) As part of the information required to be reported by a hospital with respect to a discharge of an individual in order for payment to be made under this subsection, for discharges occurring on or after October 1, 2007, the information shall include the secondary diagnosis of the individual at admission.
(iv) By not later than October 1, 2007, the Secretary shall select diagnosis codes associated with at least two conditions, each of which codes meets all of the following requirements (as determined by the Secretary):
(I) Cases described by such code have a high cost or high volume, or both, under this subchapter.
(II) The code results in the assignment of a case to a diagnosis-related group that has a higher payment when the code is present as a secondary diagnosis.
(III) The code describes such conditions that could reasonably have been prevented through the application of evidence-based guidelines.
The Secretary may from time to time revise (through addition or deletion of codes) the diagnosis codes selected under this clause so long as there are diagnosis codes associated with at least two conditions selected for discharges occurring during any fiscal year.
(v) In selecting and revising diagnosis codes under clause (iv), the Secretary shall consult with the Centers for Disease Control and Prevention and other appropriate entities.
(vi) Any change resulting from the application of this subparagraph shall not be taken into account in adjusting the weighting factors under subparagraph (C)(i) or in applying budget neutrality under subparagraph (C)(iii).
(5)(A)(i) For discharges occurring during fiscal years ending on or before September 30, 1997, the Secretary shall provide for an additional payment for a subsection (d) hospital for any discharge in a diagnosis-related group, the length of stay of which exceeds the mean length of stay for discharges within that group by a fixed number of days, or exceeds such mean length of stay by some fixed number of standard deviations, whichever is the fewer number of days.
(ii) For cases which are not included in clause (i), a subsection (d) hospital may request additional payments in any case where charges, adjusted to cost, exceed a fixed multiple of the applicable DRG prospective payment rate, or exceed such other fixed dollar amount, whichever is greater, or, for discharges in fiscal years beginning on or after October 1, 1994, exceed the sum of the applicable DRG prospective payment rate plus any amounts payable under subparagraphs (B) and (F) plus a fixed dollar amount determined by the Secretary.
(iii) The amount of such additional payment under clauses (i) and (ii) shall be determined by the Secretary and shall (except as payments under clause (i) are required to be reduced to take into account the requirements of clause (v)) approximate the marginal cost of care beyond the cutoff point applicable under clause (i) or (ii).
(iv) The total amount of the additional payments made under this subparagraph for discharges in a fiscal year may not be less than 5 percent nor more than 6 percent of the total payments projected or estimated to be made based on DRG prospective payment rates for discharges in that year.
(v) The Secretary shall provide that—
(I) the day outlier percentage for fiscal year 1995 shall be 75 percent of the day outlier percentage for fiscal year 1994;
(II) the day outlier percentage for fiscal year 1996 shall be 50 percent of the day outlier percentage for fiscal year 1994; and
(III) the day outlier percentage for fiscal year 1997 shall be 25 percent of the day outlier percentage for fiscal year 1994.
(vi) For purposes of this subparagraph, the term "day outlier percentage" means, for a fiscal year, the percentage of the total additional payments made by the Secretary under this subparagraph for discharges in that fiscal year which are additional payments under clause (i).
(B) The Secretary shall provide for an additional payment amount for subsection (d) hospitals with indirect costs of medical education, in an amount computed in the same manner as the adjustment for such costs under regulations (in effect as of January 1, 1983) under subsection (a)(2), except as follows:
(i) The amount of such additional payment shall be determined by multiplying (I) the sum of the amount determined under paragraph (1)(A)(ii)(II) (or, if applicable, the amount determined under paragraph (1)(A)(iii)) and, for cases qualifying for additional payment under subparagraph (A)(i), the amount paid to the hospital under subparagraph (A), by (II) the indirect teaching adjustment factor described in clause (ii).
(ii) For purposes of clause (i)(II), the indirect teaching adjustment factor is equal to c × (((1+r) to the nth power) −1), where "r" is the ratio of the hospital's full-time equivalent interns and residents to beds and "n" equals .405. Subject to clause (ix), for discharges occurring—
(I) on or after October 1, 1988, and before October 1, 1997, "c" is equal to 1.89;
(II) during fiscal year 1998, "c" is equal to 1.72;
(III) during fiscal year 1999, "c" is equal to 1.6;
(IV) during fiscal year 2000, "c" is equal to 1.47;
(V) during fiscal year 2001, "c" is equal to 1.54;
(VI) during fiscal year 2002, "c" is equal to 1.6;
(VII) on or after October 1, 2002, and before April 1, 2004, "c" is equal to 1.35;
(VIII) on or after April 1, 2004, and before October 1, 2004, "c" is equal to 1.47;
(IX) during fiscal year 2005, "c" is equal to 1.42;
(X) during fiscal year 2006, "c" is equal to 1.37;
(XI) during fiscal year 2007, "c" is equal to 1.32; and
(XII) on or after October 1, 2007, "c" is equal to 1.35.
(iii) In determining such adjustment the Secretary shall not distinguish between those interns and residents who are employees of a hospital and those interns and residents who furnish services to a hospital but are not employees of such hospital.
(iv)(I) Effective for discharges occurring on or after October 1, 1997, and before July 1, 2010, all the time spent by an intern or resident in patient care activities under an approved medical residency training program at an entity in a nonhospital setting shall be counted towards the determination of full-time equivalency if the hospital incurs all, or substantially all, of the costs for the training program in that setting.
(II) Effective for discharges occurring on or after July 1, 2010, all the time spent by an intern or resident in patient care activities in a nonprovider setting shall be counted towards the determination of full-time equivalency if a hospital incurs the costs of the stipends and fringe benefits of the intern or resident during the time the intern or resident spends in that setting. If more than one hospital incurs these costs, either directly or through a third party, such hospitals shall count a proportional share of the time, as determined by written agreement between the hospitals, that a resident spends training in that setting.
(v) In determining the adjustment with respect to a hospital for discharges occurring on or after October 1, 1997, the total number of full-time equivalent interns and residents in the fields of allopathic and osteopathic medicine in either a hospital or nonhospital setting may not exceed the number (or, 130 percent of such number in the case of a hospital located in a rural area) of such full-time equivalent interns and residents in the hospital with respect to the hospital's most recent cost reporting period ending on or before December 31, 1996. Rules similar to the rules of subsection (h)(4)(F)(ii) shall apply for purposes of this clause. The provisions of subsections (h)(4)(H)(vi), (h)(7), (h)(8), (h)(9), and (h)(10) shall apply with respect to the first sentence of this clause in the same manner as they apply with respect to subsection (h)(4)(F)(i).
(vi) For purposes of clause (ii)—
(I) "r" may not exceed the ratio of the number of interns and residents, subject to the limit under clause (v), with respect to the hospital for its most recent cost reporting period to the hospital's available beds (as defined by the Secretary) during that cost reporting period, and
(II) for the hospital's cost reporting periods beginning on or after October 1, 1997, subject to the limits described in clauses (iv) and (v), the total number of full-time equivalent residents for payment purposes shall equal the average of the actual full-time equivalent resident count for the cost reporting period and the preceding two cost reporting periods.
In the case of the first cost reporting period beginning on or after October 1, 1997, subclause (II) shall be applied by using the average for such period and the preceding cost reporting period.
(vii) If any cost reporting period beginning on or after October 1, 1997, is not equal to twelve months, the Secretary shall make appropriate modifications to ensure that the average full-time equivalent residency count pursuant to subclause (II) of clause (vi) is based on the equivalent of full twelve-month cost reporting periods.
(viii) Rules similar to the rules of paragraphs (2)(F)(iv) and (4)(H) of subsection (h) shall apply for purposes of clauses (v) and (vi).
(ix) For discharges occurring on or after July 1, 2005, insofar as an additional payment amount under this subparagraph is attributable to resident positions redistributed to a hospital under subsection (h)(7)(B), in computing the indirect teaching adjustment factor under clause (ii) the adjustment shall be computed in a manner as if "c" were equal to 0.66 with respect to such resident positions.
(x) For discharges occurring on or after July 1, 2011, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(8)(B), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.
(xi)(I) The provisions of subparagraph (K) of subsection (h)(4) shall apply under this subparagraph in the same manner as they apply under such subsection.
(II) In determining the hospital's number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in non-patient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital shall be counted toward the determination of full-time equivalency if the hospital—
(aa) is recognized as a subsection (d) hospital;
(bb) is recognized as a subsection (d) Puerto Rico hospital;
(cc) is reimbursed under a reimbursement system authorized under
(dd) is a provider-based hospital outpatient department.
(III) In determining the hospital's number of full-time equivalent residents for purposes of this subparagraph, all the time spent by an intern or resident in an approved medical residency training program in research activities that are not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall not be counted toward the determination of full-time equivalency.
(xii) For discharges occurring on or after July 1, 2023, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(9), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.
(xiii) For discharges occurring on or after July 1, 2026, insofar as an additional payment amount under this subparagraph is attributable to resident positions distributed to a hospital under subsection (h)(10), the indirect teaching adjustment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.
(C)(i) The Secretary shall provide for such exceptions and adjustments to the payment amounts established under this subsection (other than under paragraph (9)) as the Secretary deems appropriate to take into account the special needs of regional and national referral centers (including those hospitals of 275 or more beds located in rural areas). A hospital which is classified as a rural hospital may appeal to the Secretary to be classified as a rural referral center under this clause on the basis of criteria (established by the Secretary) which shall allow the hospital to demonstrate that it should be so reclassified by reason of certain of its operating characteristics being similar to those of a typical urban hospital located in the same census region and which shall not require a rural osteopathic hospital to have more than 3,000 discharges in a year in order to be classified as a rural referral center. Such characteristics may include wages, scope of services, service area, and the mix of medical specialties. The Secretary shall publish the criteria not later than August 17, 1984, for implementation by October 1, 1984. An appeal allowed under this clause must be submitted to the Secretary (in such form and manner as the Secretary may prescribe) during the quarter before the first quarter of the hospital's cost reporting period (or, in the case of a cost reporting period beginning during October 1984, during the first quarter of that period), and the Secretary must make a final determination with respect to such appeal within 60 days after the date the appeal was submitted. Any payment adjustments necessitated by a reclassification based upon the appeal shall be effective at the beginning of such cost reporting period.
(ii) The Secretary shall provide, under clause (i), for the classification of a rural hospital as a regional referral center if the hospital has a case mix index equal to or greater than the median case mix index for hospitals (other than hospitals with approved teaching programs) located in an urban area in the same region (as defined in paragraph (2)(D)), has at least 5,000 discharges a year or, if less, the median number of discharges in urban hospitals in the region in which the hospital is located (or, in the case of a rural osteopathic hospital, meets the criterion established by the Secretary under clause (i) with respect to the annual number of discharges for such hospitals), and meets any other criteria established by the Secretary under clause (i).
(D)(i) For any cost reporting period beginning on or after April 1, 1990, with respect to a subsection (d) hospital which is a sole community hospital, payment under paragraph (1)(A) shall be—
(I) an amount based on 100 percent of the hospital's target amount for the cost reporting period, as defined in subsection (b)(3)(C), or
(II) the amount determined under paragraph (1)(A)(iii),
whichever results in greater payment to the hospital.
(ii) In the case of a sole community hospital that experiences, in a cost reporting period compared to the previous cost reporting period, a decrease of more than 5 percent in its total number of inpatient cases due to circumstances beyond its control, the Secretary shall provide for such adjustment to the payment amounts under this subsection (other than under paragraph (9)) as may be necessary to fully compensate the hospital for the fixed costs it incurs in the period in providing inpatient hospital services, including the reasonable cost of maintaining necessary core staff and services.
(iii) For purposes of this subchapter, the term "sole community hospital" means any hospital—
(I) that the Secretary determines is located more than 35 road miles from another hospital,
(II) that, by reason of factors such as the time required for an individual to travel to the nearest alternative source of appropriate inpatient care (in accordance with standards promulgated by the Secretary), location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of inpatient hospital services reasonably available to individuals in a geographic area who are entitled to benefits under part A, or
(III) that is located in a rural area and designated by the Secretary as an essential access community hospital under
(iv) The Secretary shall promulgate a standard for determining whether a hospital meets the criteria for classification as a sole community hospital under clause (iii)(II) because of the time required for an individual to travel to the nearest alternative source of appropriate inpatient care.
(v) If the Secretary determines that, in the case of a hospital located in a rural area and designated by the Secretary as an essential access community hospital under
(E)(i) The Secretary shall estimate the amount of reimbursement made for services described in
(ii) The Secretary shall provide for an adjustment to the payment for subsection (d) hospitals in each fiscal year so as appropriately to reflect the net amount described in clause (i).
(F)(i) Subject to subsection (r), for discharges occurring on or after May 1, 1986, the Secretary shall provide, in accordance with this subparagraph, for an additional payment amount for each subsection (d) hospital which—
(I) serves a significantly disproportionate number of low-income patients (as defined in clause (v)), or
(II) is located in an urban area, has 100 or more beds, and can demonstrate that its net inpatient care revenues (excluding any of such revenues attributable to this subchapter or State plans approved under subchapter XIX), during the cost reporting period in which the discharges occur, for indigent care from State and local government sources exceed 30 percent of its total of such net inpatient care revenues during the period.
(ii) Subject to clause (ix), the amount of such payment for each discharge shall be determined by multiplying (I) the sum of the amount determined under paragraph (1)(A)(ii)(II) (or, if applicable, the amount determined under paragraph (1)(A)(iii)) and, for cases qualifying for additional payment under subparagraph (A)(i), the amount paid to the hospital under subparagraph (A) for that discharge, by (II) the disproportionate share adjustment percentage established under clause (iii) or (iv) for the cost reporting period in which the discharge occurs.
(iii) The disproportionate share adjustment percentage for a cost reporting period for a hospital described in clause (i)(II) is equal to 35 percent.
(iv) The disproportionate share adjustment percentage for a cost reporting period for a hospital that is not described in clause (i)(II) and that—
(I) is located in an urban area and has 100 or more beds or is described in the second sentence of clause (v), is equal to the percent determined in accordance with the applicable formula described in clause (vii);
(II) is located in an urban area and has less than 100 beds, is equal to 5 percent or, subject to clause (xiv) and for discharges occurring on or after April 1, 2001, is equal to the percent determined in accordance with clause (xiii);
(III) is located in a rural area and is not described in subclause (IV) or (V) or in the second sentence of clause (v), is equal to 4 percent or, subject to clause (xiv) and for discharges occurring on or after April 1, 2001, is equal to the percent determined in accordance with clause (xii);
(IV) is located in a rural area, is classified as a rural referral center under subparagraph (C), and is classified as a sole community hospital under subparagraph (D), is equal to 10 percent or, if greater, the percent determined in accordance with the applicable formula described in clause (viii) or, subject to clause (xiv) and for discharges occurring on or after April 1, 2001, the greater of the percentages determined under clause (x) or (xi);
(V) is located in a rural area, is classified as a rural referral center under subparagraph (C), and is not classified as a sole community hospital under subparagraph (D), is equal to the percent determined in accordance with the applicable formula described in clause (viii) or, subject to clause (xiv) and for discharges occurring on or after April 1, 2001, is equal to the percent determined in accordance with clause (xi); or
(VI) is located in a rural area, is classified as a sole community hospital under subparagraph (D), and is not classified as a rural referral center under subparagraph (C), is 10 percent or, subject to clause (xiv) and for discharges occurring on or after April 1, 2001, is equal to the percent determined in accordance with clause (x).
(v) In this subparagraph, a hospital "serves a significantly disproportionate number of low income patients" for a cost reporting period if the hospital has a disproportionate patient percentage (as defined in clause (vi)) for that period which equals, or exceeds—
(I) 15 percent, if the hospital is located in an urban area and has 100 or more beds,
(II) 30 percent (or 15 percent, for discharges occurring on or after April 1, 2001), if the hospital is located in a rural area and has more than 100 beds, or is located in a rural area and is classified as a sole community hospital under subparagraph (D),
(III) 40 percent (or 15 percent, for discharges occurring on or after April 1, 2001), if the hospital is located in an urban area and has less than 100 beds, or
(IV) 45 percent (or 15 percent, for discharges occurring on or after April 1, 2001), if the hospital is located in a rural area and is not described in subclause (II).
A hospital located in a rural area and with 500 or more beds also "serves a significantly disproportionate number of low income patients" for a cost reporting period if the hospital has a disproportionate patient percentage (as defined in clause (vi)) for that period which equals or exceeds a percentage specified by the Secretary.
(vi) In this subparagraph, the term "disproportionate patient percentage" means, with respect to a cost reporting period of a hospital, the sum of—
(I) the fraction (expressed as a percentage), the numerator of which is the number of such hospital's patient days for such period which were made up of patients who (for such days) were entitled to benefits under part A of this subchapter and were entitled to supplementary security income benefits (excluding any State supplementation) under subchapter XVI of this chapter, and the denominator of which is the number of such hospital's patient days for such fiscal year which were made up of patients who (for such days) were entitled to benefits under part A of this subchapter, and
(II) the fraction (expressed as a percentage), the numerator of which is the number of the hospital's patient days for such period which consist of patients who (for such days) were eligible for medical assistance under a State plan approved under subchapter XIX, but who were not entitled to benefits under part A of this subchapter, and the denominator of which is the total number of the hospital's patient days for such period.
In determining under subclause (II) the number of the hospital's patient days for such period which consist of patients who (for such days) were eligible for medical assistance under a State plan approved under subchapter XIX, the Secretary may, to the extent and for the period the Secretary determines appropriate, include patient days of patients not so eligible but who are regarded as such because they receive benefits under a demonstration project approved under subchapter XI.
(vii) The formula used to determine the disproportionate share adjustment percentage for a cost reporting period for a hospital described in clause (iv)(I) is—
(I) in the case of such a hospital with a disproportionate patient percentage (as defined in clause (vi)) greater than 20.2—
(a) for discharges occurring on or after April 1, 1990, and on or before December 31, 1990, (P−20.2)(.65) + 5.62,
(b) for discharges occurring on or after January 1, 1991, and on or before September 30, 1993, (P−20.2)(.7) + 5.62,
(c) for discharges occurring on or after October 1, 1993, and on or before September 30, 1994, (P−20.2)(.8) + 5.88, and
(d) for discharges occurring on or after October 1, 1994, (P−20.2)(.825) + 5.88; or
(II) in the case of any other such hospital—
(a) for discharges occurring on or after April 1, 1990, and on or before December 31, 1990, (P−15)(.6) + 2.5,
(b) for discharges occurring on or after January 1, 1991, and on or before September 30, 1993, (P−15)(.6) + 2.5,6
(c) for discharges occurring on or after October 1, 1993, (P−15)(.65) + 2.5,
where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(viii) Subject to clause (xiv), the formula used to determine the disproportionate share adjustment percentage for a cost reporting period for a hospital described in clause (iv)(IV) or (iv)(V) is the percentage determined in accordance with the following formula: (P−30)(.6) + 4.0, where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(ix) In the case of discharges occurring—
(I) during fiscal year 1998, the additional payment amount otherwise determined under clause (ii) shall be reduced by 1 percent;
(II) during fiscal year 1999, such additional payment amount shall be reduced by 2 percent;
(III) during fiscal years 2000 and 2001, such additional payment amount shall be reduced by 3 percent and 2 percent, respectively;
(IV) during fiscal year 2002, such additional payment amount shall be reduced by 3 percent; and
(V) during fiscal year 2003 and each subsequent fiscal year, such additional payment amount shall be reduced by 0 percent.
(x) Subject to clause (xiv), for purposes of clause (iv)(VI) (relating to sole community hospitals), in the case of a hospital for a cost reporting period with a disproportionate patient percentage (as defined in clause (vi)) that—
(I) is less than 19.3, the disproportionate share adjustment percentage is determined in accordance with the following formula: (P−15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than 30.0, such adjustment percentage is equal to 5.25 percent; or
(III) is equal to or exceeds 30, such adjustment percentage is equal to 10 percent,
where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(xi) Subject to clause (xiv), for purposes of clause (iv)(V) (relating to rural referral centers), in the case of a hospital for a cost reporting period with a disproportionate patient percentage (as defined in clause (vi)) that—
(I) is less than 19.3, the disproportionate share adjustment percentage is determined in accordance with the following formula: (P−15)(.65) + 2.5;
(II) is equal to or exceeds 19.3, but is less than 30.0, such adjustment percentage is equal to 5.25 percent; or
(III) is equal to or exceeds 30, such adjustment percentage is determined in accordance with the following formula: (P−30)(.6) + 5.25,
where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(xii) Subject to clause (xiv), for purposes of clause (iv)(III) (relating to small rural hospitals generally), in the case of a hospital for a cost reporting period with a disproportionate patient percentage (as defined in clause (vi)) that—
(I) is less than 19.3, the disproportionate share adjustment percentage is determined in accordance with the following formula: (P−15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment percentage is equal to 5.25 percent,
where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(xiii) Subject to clause (xiv), for purposes of clause (iv)(II) (relating to urban hospitals with less than 100 beds), in the case of a hospital for a cost reporting period with a disproportionate patient percentage (as defined in clause (vi)) that—
(I) is less than 19.3, the disproportionate share adjustment percentage is determined in accordance with the following formula: (P−15)(.65) + 2.5; or
(II) is equal to or exceeds 19.3, such adjustment percentage is equal to 5.25 percent,
where "P" is the hospital's disproportionate patient percentage (as defined in clause (vi)).
(xiv)(I) In the case of discharges occurring on or after April 1, 2004, subject to subclause (II), there shall be substituted for the disproportionate share adjustment percentage otherwise determined under clause (iv) (other than subclause (I)) or under clause (viii), (x), (xi), (xii), or (xiii), the disproportionate share adjustment percentage determined under clause (vii) (relating to large, urban hospitals).
(II) Under subclause (I), the disproportionate share adjustment percentage shall not exceed 12 percent for a hospital that is not classified as a rural referral center under subparagraph (C) or, in the case of discharges occurring on or after October 1, 2006, as a medicare-dependent, small rural hospital under subparagraph (G)(iv).
(G)(i) For any cost reporting period beginning on or after April 1, 1990, and before October 1, 1994, or discharges occurring on or after October 1, 1997, and before January 1, 2025, in the case of a subsection (d) hospital which is a medicare-dependent, small rural hospital, payment under paragraph (1)(A) shall be equal to the sum of the amount determined under clause (ii) and the amount determined under paragraph (1)(A)(iii).
(ii) The amount determined under this clause is—
(I) for discharges occurring during the 36-month period beginning with the first day of the cost reporting period that begins on or after April 1, 1990, the amount by which the hospital's target amount for the cost reporting period (as defined in subsection (b)(3)(D)) exceeds the amount determined under paragraph (1)(A)(iii); and
(II) for discharges occurring during any subsequent cost reporting period (or portion thereof) and before October 1, 1994, or discharges occurring on or after October 1, 1997, and before January 1, 2025, 50 percent (or 75 percent in the case of discharges occurring on or after October 1, 2006) of the amount by which the hospital's target amount for the cost reporting period or for discharges in the fiscal year (as defined in subsection (b)(3)(D)) exceeds the amount determined under paragraph (1)(A)(iii).
(iii) In the case of a medicare dependent, small rural hospital that experiences, in a cost reporting period compared to the previous cost reporting period, a decrease of more than 5 percent in its total number of inpatient cases due to circumstances beyond its control, the Secretary shall provide for such adjustment to the payment amounts under this subsection (other than under paragraph (9)) as may be necessary to fully compensate the hospital for the fixed costs it incurs in the period in providing inpatient hospital services, including the reasonable cost of maintaining necessary core staff and services.
(iv) The term "medicare-dependent, small rural hospital" means, with respect to any cost reporting period to which clause (i) applies, any hospital—
(I) that is located in—
(aa) a rural area; or
(bb) a State with no rural area (as defined in paragraph (2)(D)) and satisfies any of the criteria in subclause (I), (II), or (III) of paragraph (8)(E)(ii),
(II) that has not more than 100 beds,
(III) that is not classified as a sole community hospital under subparagraph (D), and
(IV) for which not less than 60 percent of its inpatient days or discharges during the cost reporting period beginning in fiscal year 1987, or two of the three most recently audited cost reporting periods for which the Secretary has a settled cost report, were attributable to inpatients entitled to benefits under part A.
Subclause (I)(bb) shall apply for purposes of payment under clause (ii) only for discharges of a hospital occurring on or after the effective date of a determination of medicare-dependent small rural hospital status made by the Secretary with respect to the hospital after February 9, 2018. For purposes of applying subclause (II) of paragraph (8)(E)(ii) under subclause (I)(bb), such subclause (II) shall be applied by inserting "as of January 1, 2018," after "such State" each place it appears.
(H) The Secretary may provide for such adjustments to the payment amounts under this subsection as the Secretary deems appropriate to take into account the unique circumstances of hospitals located in Alaska and Hawaii.
(I)(i) The Secretary shall provide by regulation for such other exceptions and adjustments to such payment amounts under this subsection as the Secretary deems appropriate.
(ii) In making adjustments under clause (i) for transfer cases (as defined by the Secretary) in a fiscal year, not taking in account the effect of subparagraph (J), the Secretary may make adjustments to each of the average standardized amounts determined under paragraph (3) to assure that the aggregate payments made under this subsection for such fiscal year are not greater or lesser than those that would have otherwise been made in such fiscal year.
(J)(i) The Secretary shall treat the term "transfer case" (as defined in subparagraph (I)(ii)) as including the case of a qualified discharge (as defined in clause (ii)), which is classified within a diagnosis-related group described in clause (iii), and which occurs on or after October 1, 1998. In the case of a qualified discharge for which a substantial portion of the costs of care are incurred in the early days of the inpatient stay (as defined by the Secretary), in no case may the payment amount otherwise provided under this subsection exceed an amount equal to the sum of—
(I) 50 percent of the amount of payment under this subsection for transfer cases (as established under subparagraph (I)(i)), and
(II) 50 percent of the amount of payment which would have been made under this subsection with respect to the qualified discharge if no transfer were involved.
(ii) For purposes of clause (i), subject to clause (iii), the term "qualified discharge" means a discharge classified with a diagnosis-related group (described in clause (iii)) of an individual from a subsection (d) hospital, if upon such discharge the individual—
(I) is admitted as an inpatient to a hospital or hospital unit that is not a subsection (d) hospital for the provision of inpatient hospital services;
(II) is admitted to a skilled nursing facility;
(III) is provided home health services from a home health agency, if such services relate to the condition or diagnosis for which such individual received inpatient hospital services from the subsection (d) hospital, and if such services are provided within an appropriate period (as determined by the Secretary);
(IV) for discharges occurring on or after October 1, 2018, is provided hospice care by a hospice program; or
(V) for discharges occurring on or after October 1, 2000, the individual receives post discharge services described in clause (iv)(I).
(iii) Subject to clause (iv), a diagnosis-related group described in this clause is—
(I) 1 of 10 diagnosis-related groups selected by the Secretary based upon a high volume of discharges classified within such groups and a disproportionate use of post discharge services described in clause (ii); and
(II) a diagnosis-related group specified by the Secretary under clause (iv)(II).
(iv) The Secretary shall include in the proposed rule published under subsection (e)(5)(A) for fiscal year 2001, a description of the effect of this subparagraph. The Secretary shall include in the proposed rule published for fiscal year 2019, a description of the effect of clause (ii)(IV). The Secretary may include in the proposed rule (and in the final rule published under paragraph (6)) for fiscal year 2001 or a subsequent fiscal year, a description of—
(I) post-discharge services not described in subclauses (I), (II), (III), and, in the case of proposed and final rules for fiscal year 2019 and subsequent fiscal years, (IV) of clause (ii), the receipt of which results in a qualified discharge; and
(II) diagnosis-related groups described in clause (iii)(I) in addition to the 10 selected under such clause.
(K)(i) Effective for discharges beginning on or after October 1, 2001, the Secretary shall establish a mechanism to recognize the costs of new medical services and technologies under the payment system established under this subsection. Such mechanism shall be established after notice and opportunity for public comment (in the publications required by subsection (e)(5) for a fiscal year or otherwise). Such mechanism shall be modified to meet the requirements of clause (viii).
(ii) The mechanism established pursuant to clause (i) shall—
(I) apply to a new medical service or technology if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate (applying a threshold specified by the Secretary that is the lesser of 75 percent of the standardized amount (increased to reflect the difference between cost and charges) or 75 percent of one standard deviation for the diagnosis-related group involved);
(II) provide for the collection of data with respect to the costs of a new medical service or technology described in subclause (I) for a period of not less than two years and not more than three years beginning on the date on which an inpatient hospital code is issued with respect to the service or technology;
(III) provide for additional payment to be made under this subsection with respect to discharges involving a new medical service or technology described in subclause (I) that occur during the period described in subclause (II) in an amount that adequately reflects the estimated average cost of such service or technology; and
(IV) provide that discharges involving such a service or technology that occur after the close of the period described in subclause (II) will be classified within a new or existing diagnosis-related group with a weighting factor under paragraph (4)(B) that is derived from cost data collected with respect to discharges occurring during such period.
(iii) For purposes of clause (ii)(II), the term "inpatient hospital code" means any code that is used with respect to inpatient hospital services for which payment may be made under this subsection and includes an alphanumeric code issued under the International Classification of Diseases, 9th Revision, Clinical Modification ("ICD–9–CM") and its subsequent revisions.
(iv) For purposes of clause (ii)(III), the term "additional payment" means, with respect to a discharge for a new medical service or technology described in clause (ii)(I), an amount that exceeds the prospective payment rate otherwise applicable under this subsection to discharges involving such service or technology that would be made but for this subparagraph.
(v) The requirement under clause (ii)(III) for an additional payment may be satisfied by means of a new-technology group (described in subparagraph (L)), an add-on payment, a payment adjustment, or any other similar mechanism for increasing the amount otherwise payable with respect to a discharge under this subsection. The Secretary may not establish a separate fee schedule for such additional payment for such services and technologies, by utilizing a methodology established under subsection (a) or (h) of
(vi) For purposes of this subparagraph and subparagraph (L), a medical service or technology will be considered a "new medical service or technology" if the service or technology meets criteria established by the Secretary after notice and an opportunity for public comment.
(vii) Under the mechanism under this subparagraph, the Secretary shall provide for the addition of new diagnosis and procedure codes in April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) under this subsection until the fiscal year that begins after such date.
(viii) The mechanism established pursuant to clause (i) shall be adjusted to provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of individuals entitled to benefits under part A as follows:
(I) The Secretary shall make public and periodically update a list of all the services and technologies for which an application for additional payment under this subparagraph is pending.
(II) The Secretary shall accept comments, recommendations, and data from the public regarding whether the service or technology represents a substantial improvement.
(III) The Secretary shall provide for a meeting at which organizations representing hospitals, physicians, such individuals, manufacturers, and any other interested party may present comments, recommendations, and data to the clinical staff of the Centers for Medicare & Medicaid Services before publication of a notice of proposed rulemaking regarding whether service or technology represents a substantial improvement.
(ix) Before establishing any add-on payment under this subparagraph with respect to a new technology, the Secretary shall seek to identify one or more diagnosis-related groups associated with such technology, based on similar clinical or anatomical characteristics and the cost of the technology. Within such groups the Secretary shall assign an eligible new technology into a diagnosis-related group where the average costs of care most closely approximate the costs of care of using the new technology. No add-on payment under this subparagraph shall be made with respect to such new technology and this clause shall not affect the application of paragraph (4)(C)(iii).
(L)(i) In establishing the mechanism under subparagraph (K), the Secretary may establish new-technology groups into which a new medical service or technology will be classified if, based on the estimated average costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate.
(ii) Such groups—
(I) shall not be based on the costs associated with a specific new medical service or technology; but
(II) shall, in combination with the applicable standardized amounts and the weighting factors assigned to such groups under paragraph (4)(B), reflect such cost cohorts as the Secretary determines are appropriate for all new medical services and technologies that are likely to be provided as inpatient hospital services in a fiscal year.
(iii) The methodology for classifying specific hospital discharges within a diagnosis-related group under paragraph (4)(A) or a new-technology group shall provide that a specific hospital discharge may not be classified within both a diagnosis-related group and a new-technology group.
(M)(i) For cost reporting periods beginning on or after October 1, 2020, in the case of a subsection (d) hospital that furnishes an allogeneic hematopoietic stem cell transplant to an individual during such a period, payment to such hospital for hematopoietic stem cell acquisition shall be made on a reasonable cost basis. The items included in such hematopoietic stem cell acquisition shall be specified by the Secretary through rulemaking.
(ii) For purposes of this subparagraph, the term "allogeneic hematopoietic stem cell transplant" means, with respect to an individual, the intravenous infusion of hematopoietic cells derived from bone marrow, peripheral blood stem cells, or cord blood, but not including embryonic stem cells, of a donor to an individual that are or may be used to restore hematopoietic function in such individual having an inherited or acquired deficiency or defect.
(6) The Secretary shall provide for publication in the Federal Register, on or before the August 1 before each fiscal year (beginning with fiscal year 1984), of a description of the methodology and data used in computing the adjusted DRG prospective payment rates under this subsection, including any adjustments required under subsection (e)(1)(B).
(7) There shall be no administrative or judicial review under
(A) the determination of the requirement, or the proportional amount, of any adjustment effected pursuant to subsection (e)(1) or the determination of the applicable percentage increase under paragraph (12)(A)(ii),
(B) the establishment of diagnosis-related groups, of the methodology for the classification of discharges within such groups, and of the appropriate weighting factors thereof under paragraph (4), including the selection and revision of codes under paragraph (4)(D), and
(C) the determination of whether services provided prior to a patient's inpatient admission are related to the admission (as described in subsection (a)(4)).
(8)(A) In the case of any hospital which is located in an area which is, at any time after April 20, 1983, reclassified from an urban to a rural area, payments to such hospital for the first two cost reporting periods for which such reclassification is effective shall be made as follows:
(i) For the first such cost reporting period, payment shall be equal to the amount payable to such hospital for such reporting period on the basis of the rural classification, plus an amount equal to two-thirds of the amount (if any) by which—
(I) the amount which would have been payable to such hospital for such reporting period on the basis of an urban classification, exceeds
(II) the amount payable to such hospital for such reporting period on the basis of the rural classification.
(ii) For the second such cost reporting period, payment shall be equal to the amount payable to such hospital for such reporting period on the basis of the rural classification, plus an amount equal to one-third of the amount (if any) by which—
(I) the amount which would have been payable to such hospital for such reporting period on the basis of an urban classification, exceeds
(II) the amount payable to such hospital for such reporting period on the basis of the rural classification.
(B)(i) For purposes of this subsection, the Secretary shall treat a hospital located in a rural county adjacent to one or more urban areas as being located in the urban metropolitan statistical area to which the greatest number of workers in the county commute, if the rural county would otherwise be considered part of an urban area, under the standards for designating Metropolitan Statistical Areas (and for designating New England County Metropolitan Areas) described in clause (ii), if the commuting rates used in determining outlying counties (or, for New England, similar recognized areas) were determined on the basis of the aggregate number of resident workers who commute to (and, if applicable under the standards, from) the central county or counties of all contiguous Metropolitan Statistical Areas (or New England County Metropolitan Areas).
(ii) The standards described in this clause for cost reporting periods beginning in a fiscal year—
(I) before fiscal year 2003, are the standards published in the Federal Register on January 3, 1980, or, at the election of the hospital with respect to fiscal years 2001 and 2002, standards so published on March 30, 1990; and
(II) after fiscal year 2002, are the standards published in the Federal Register by the Director of the Office of Management and Budget based on the most recent available decennial population data.
Subparagraphs (C) and (D) shall not apply with respect to the application of subclause (I).
(C)(i) If the application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10), by treating hospitals located in a rural county or counties as being located in an urban area, or by treating hospitals located in one urban area as being located in another urban area—
(I) reduces the wage index for that urban area (as applied under this subsection) by 1 percentage point or less, the Secretary, in calculating such wage index under this subsection, shall exclude those hospitals so treated, or
(II) reduces the wage index for that urban area by more than 1 percentage point (as applied under this subsection), the Secretary shall calculate and apply such wage index under this subsection separately to hospitals located in such urban area (excluding all the hospitals so treated) and to the hospitals so treated (as if such hospitals were located in such urban area).
(ii) If the application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10), by treating hospitals located in a rural county or counties as not being located in the rural area in a State, reduces the wage index for that rural area (as applied under this subsection), the Secretary shall calculate and apply such wage index under this subsection as if the hospitals so treated had not been excluded from calculation of the wage index for that rural area.
(iii) The application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10) may not result in the reduction of any county's wage index to a level below the wage index for rural areas in the State in which the county is located.
(iv) The application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or of the Secretary under paragraph (10) may not result in a reduction in an urban area's wage index if—
(I) the urban area has a wage index below the wage index for rural areas in the State in which it is located; or
(II) the urban area is located in a State that is composed of a single urban area.
(v) This subparagraph shall apply with respect to discharges occurring in a fiscal year only if the Secretary uses a method for making adjustments to the DRG prospective payment rate for area differences in hospital wage levels under paragraph (3)(E) for the fiscal year that is based on the use of Metropolitan Statistical Area classifications.
(D) The Secretary shall make a proportional adjustment in the standardized amounts determined under paragraph (3) to assure that the provisions of subparagraphs (B) and (C) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10) do not result in aggregate payments under this section that are greater or less than those that would otherwise be made.
(E)(i) For purposes of this subsection, not later than 60 days after the receipt of an application (in a form and manner determined by the Secretary) from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in paragraph (2)(D)) of the State in which the hospital is located.
(ii) For purposes of clause (i), a subsection (d) hospital described in this clause is a subsection (d) hospital that is located in an urban area (as defined in paragraph (2)(D)) and satisfies any of the following criteria:
(I) The hospital is located in a rural census tract of a metropolitan statistical area (as determined under the most recent modification of the Goldsmith Modification, originally published in the Federal Register on February 27, 1992 (57 Fed. Reg. 6725)).
(II) The hospital is located in an area designated by any law or regulation of such State as a rural area (or is designated by such State as a rural hospital).
(III) The hospital would qualify as a rural, regional, or national referral center under paragraph (5)(C) or as a sole community hospital under paragraph (5)(D) if the hospital were located in a rural area.
(IV) The hospital meets such other criteria as the Secretary may specify.
(9)(A) Notwithstanding
(i) the applicable Puerto Rico percentage (specified in subparagraph (E)) of the Puerto Rico adjusted DRG prospective payment rate (determined under subparagraph (B) or (C)) for such discharges,
(ii) the applicable Federal percentage (specified in subparagraph (E)) of—
(I) for discharges beginning in a fiscal year beginning on or after October 1, 1997, and before October 1, 2003, the discharge-weighted average of—
(aa) the national adjusted DRG prospective payment rate (determined under paragraph (3)(D)) for hospitals located in a large urban area,
(bb) such rate for hospitals located in other urban areas, and
(cc) such rate for hospitals located in a rural area,
for such discharges, adjusted in the manner provided in paragraph (3)(E) for different area wage levels; and
(II) for discharges in a fiscal year beginning on or after October 1, 2003, the national DRG prospective payment rate determined under paragraph (3)(D)(iii) for hospitals located in any area for such discharges, adjusted in the manner provided in paragraph (3)(E) for different area wage levels.
As used in this section, the term "subsection (d) Puerto Rico hospital" means a hospital that is located in Puerto Rico and that would be a subsection (d) hospital (as defined in paragraph (1)(B)) if it were located in one of the 50 States.
(B) The Secretary shall determine a Puerto Rico adjusted DRG prospective payment rate, for each inpatient hospital discharge in fiscal year 1988 involving inpatient hospital services of a subsection (d) Puerto Rico hospital for which payment may be made under part A of this subchapter. Such rate shall be determined for such hospitals located in urban or rural areas within Puerto Rico, as follows:
(i) The Secretary shall determine the target amount (as defined in subsection (b)(3)(A)) for the hospital for the cost reporting period beginning in fiscal year 1987 and increase such amount by prorating the applicable percentage increase (as defined in subsection (b)(3)(B)) to update the amount to the midpoint in fiscal year 1988.
(ii) The Secretary shall standardize the amount determined under clause (i) for each hospital by—
(I) excluding an estimate of indirect medical education costs,
(II) adjusting for variations among hospitals by area in the average hospital wage level,
(III) adjusting for variations in case mix among hospitals, and
(IV) excluding an estimate of the additional payments to certain subsection (d) Puerto Rico hospitals to be made under subparagraph (D)(iii) (relating to disproportionate share payments).
(iii) The Secretary shall compute a discharge weighted average of the standardized amounts determined under clause (ii) for all hospitals located in an urban area and for all hospitals located in a rural area (as such terms are defined in paragraph (2)(D)).
(iv) The Secretary shall reduce the average standardized amount by a proportion equal to the proportion (estimated by the Secretary) of the amount of payments under this paragraph which are additional payments described in subparagraph (D)(i) (relating to outlier payments).
(v) For each discharge classified within a diagnosis-related group for hospitals located in an urban or rural area, respectively, the Secretary shall establish a Puerto Rico DRG prospective payment rate equal to the product of—
(I) the average standardized amount (computed under clause (iii) and reduced under clause (iv)) for hospitals located in an urban or rural area, respectively, and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group.
(vi) The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs, of the Puerto Rico DRG prospective payment rate computed under clause (v) for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the Puerto Rican average hospital wage level.
(C) The Secretary shall determine a Puerto Rico adjusted DRG prospective payment rate, for each inpatient hospital discharge after fiscal year 1988 involving inpatient hospital services of a subsection (d) Puerto Rico hospital for which payment may be made under part A of this subchapter. Such rate shall be determined for hospitals located in urban or rural areas within Puerto Rico as follows:
(i)(I) For discharges in a fiscal year after fiscal year 1988 and before fiscal year 2004, the Secretary shall compute an average standardized amount for hospitals located in an urban area and for hospitals located in a rural area equal to the respective average standardized amount computed for the previous fiscal year under subparagraph (B)(iii) or under this clause, increased for fiscal year 1989 by the applicable percentage increase under subsection (b)(3)(B), and adjusted for subsequent fiscal years in accordance with the final determination of the Secretary under subsection (e)(4), and adjusted to reflect the most recent case-mix data available.
(II) For discharges occurring in a fiscal year (beginning with fiscal year 2004), the Secretary shall compute an average standardized amount for hospitals located in any area of Puerto Rico that is equal to the average standardized amount computed under subclause (I) for fiscal year 2003 for hospitals in a large urban area (or, beginning with fiscal year 2005, for all hospitals in the previous fiscal year) increased by the applicable percentage increase under subsection (b)(3)(B) for the fiscal year involved.
(ii) The Secretary shall reduce each of the average standardized amounts (or for fiscal year 2004 and thereafter, the average standardized amount) by a proportion equal to the proportion (estimated by the Secretary) of the amount of payments under this paragraph which are additional payments described in subparagraph (D)(i) (relating to outlier payments).
(iii) For each discharge classified within a diagnosis-related group for hospitals located in an urban or rural area, respectively, the Secretary shall establish a Puerto Rico DRG prospective payment rate equal to the product of—
(I) the average standardized amount (computed under clause (i) and reduced under clause (ii)), and
(II) the weighting factor (determined under paragraph (4)(B)) for that diagnosis-related group.
(iv)(I) The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs, of the Puerto Rico DRG prospective payment rate computed under clause (iii) for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the Puerto Rico average hospital wage level. The second and third sentences of paragraph (3)(E)(i) shall apply to subsection (d) Puerto Rico hospitals under this clause in the same manner as they apply to subsection (d) hospitals under such paragraph and, for purposes of this clause, any reference in such paragraph to a subsection (d) hospital is deemed a reference to a subsection (d) Puerto Rico hospital.
(II) For discharges occurring on or after October 1, 2004, the Secretary shall substitute "62 percent" for the proportion described in the first sentence of clause (i), unless the application of this subclause would result in lower payments to a hospital than would otherwise be made.
(D) The following provisions of paragraph (5) shall apply to subsection (d) Puerto Rico hospitals receiving payment under this paragraph in the same manner and to the extent as they apply to subsection (d) hospitals receiving payment under this subsection:
(i) Subparagraph (A) (relating to outlier payments).
(ii) Subparagraph (B) (relating to payments for indirect medical education costs), except that for this purpose the sum of the amount determined under subparagraph (A) of this paragraph and the amount paid to the hospital under clause (i) of this subparagraph shall be substituted for the sum referred to in paragraph (5)(B)(i)(I).
(iii) Subparagraph (F) (relating to disproportionate share payments), except that for this purpose the sum described in clause (ii) of this subparagraph shall be substituted for the sum referred to in paragraph (5)(F)(ii)(I).
(iv) Subparagraph (H) (relating to exceptions and adjustments).
(E) For purposes of subparagraph (A), for discharges occurring—
(i) on or after October 1, 1987, and before October 1, 1997, the applicable Puerto Rico percentage is 75 percent and the applicable Federal percentage is 25 percent;
(ii) on or after October 1, 1997, and before April 1, 2004, the applicable Puerto Rico percentage is 50 percent and the applicable Federal percentage is 50 percent;
(iii) on or after April 1, 2004, and before October 1, 2004, the applicable Puerto Rico percentage is 37.5 percent and the applicable Federal percentage is 62.5 percent;
(iv) on or after October 1, 2004, and before January 1, 2016, the applicable Puerto Rico percentage is 25 percent and the applicable Federal percentage is 75 percent; and
(v) on or after January 1, 2016, the applicable Puerto Rico percentage is 0 percent and the applicable Federal percentage is 100 percent.
(10)(A) There is hereby established the Medicare Geographic Classification Review Board (hereinafter in this paragraph referred to as the "Board").
(B)(i) The Board shall be composed of 5 members appointed by the Secretary without regard to the provisions of title 5, governing appointments in the competitive service. Two of such members shall be representative of subsection (d) hospitals located in a rural area under paragraph (2)(D). At least 1 member shall be knowledgeable in the field of analyzing costs with respect to the provision of inpatient hospital services.
(ii) The Secretary shall make initial appointments to the Board as provided in this paragraph within 180 days after December 19, 1989.
(C)(i) The Board shall consider the application of any subsection (d) hospital requesting that the Secretary change the hospital's geographic classification for purposes of determining for a fiscal year—
(I) the hospital's average standardized amount under paragraph (2)(D), or
(II) the factor used to adjust the DRG prospective payment rate for area differences in hospital wage levels that applies to such hospital under paragraph (3)(E).
(ii) A hospital requesting a change in geographic classification under clause (i) for a fiscal year shall submit its application to the Board not later than the first day of the 13-month period ending on September 30 of the preceding fiscal year.
(iii)(I) The Board shall render a decision on an application submitted under clause (i) not later than 180 days after the deadline referred to in clause (ii).
(II) Appeal of decisions of the Board shall be subject to the provisions of section 557b 7 of title 5. The Secretary shall issue a decision on such an appeal not later than 90 days after the date on which the appeal is filed. The decision of the Secretary shall be final and shall not be subject to judicial review.
(D)(i) The Secretary shall publish guidelines to be utilized by the Board in rendering decisions on applications submitted under this paragraph, and shall include in such guidelines the following:
(I) Guidelines for comparing wages, taking into account (to the extent the Secretary determines appropriate) occupational mix, in the area in which the hospital is classified and the area in which the hospital is applying to be classified.
(II) Guidelines for determining whether the county in which the hospital is located should be treated as being a part of a particular Metropolitan Statistical Area.
(III) Guidelines for considering information provided by an applicant with respect to the effects of the hospital's geographic classification on access to inpatient hospital services by medicare beneficiaries.
(IV) Guidelines for considering the appropriateness of the criteria used to define New England County Metropolitan Areas.
(ii) Notwithstanding clause (i), if the Secretary uses a method for making adjustments to the DRG prospective payment rate for area differences in hospital wage levels under paragraph (3)(E) that is not based on the use of Metropolitan Statistical Area classifications, the Secretary may revise the guidelines published under clause (i) to the extent such guidelines are used to determine the appropriateness of the geographic area in which the hospital is determined to be located for purposes of making such adjustments.
(iii) Under the guidelines published by the Secretary under clause (i), in the case of a hospital which has ever been classified by the Secretary as a rural referral center under paragraph (5)(C), the Board may not reject the application of the hospital under this paragraph on the basis of any comparison between the average hourly wage of the hospital and the average hourly wage of hospitals in the area in which it is located.
(iv) The Secretary shall publish the guidelines described in clause (i) by July 1, 1990.
(v) Any decision of the Board to reclassify a subsection (d) hospital for purposes of the adjustment factor described in subparagraph (C)(i)(II) for fiscal year 2001 or any fiscal year thereafter shall be effective for a period of 3 fiscal years, except that the Secretary shall establish procedures under which a subsection (d) hospital may elect to terminate such reclassification before the end of such period.
(vi) Such guidelines shall provide that, in making decisions on applications for reclassification for the purposes described in clause (v) for fiscal year 2003 and any succeeding fiscal year, the Board shall base any comparison of the average hourly wage for the hospital with the average hourly wage for hospitals in an area on—
(I) an average of the average hourly wage amount for the hospital from the most recently published hospital wage survey data of the Secretary (as of the date on which the hospital applies for reclassification) and such amount from each of the two immediately preceding surveys; and
(II) an average of the average hourly wage amount for hospitals in such area from the most recently published hospital wage survey data of the Secretary (as of the date on which the hospital applies for reclassification) and such amount from each of the two immediately preceding surveys.
(E)(i) The Board shall have full power and authority to make rules and establish procedures, not inconsistent with the provisions of this subchapter or regulations of the Secretary, which are necessary or appropriate to carry out the provisions of this paragraph. In the course of any hearing the Board may administer oaths and affirmations. The provisions of subsections (d) and (e) of
(ii) The Board is authorized to engage such technical assistance and to receive such information as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Board such secretarial, clerical, and other assistance as the Board may require to carry out its functions.
(F)(i) Each member of the Board who is not an officer or employee of the Federal Government shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for grade GS–18 of the General Schedule under
(ii) Members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of
(11)
(A)
(B)
(C)
(D)
(12)
(A)
(B)
(i) The Secretary shall determine the empirical relationship for subsection (d) hospitals between the standardized cost-per-case for such hospitals and the total number of discharges of such hospitals and the amount of the additional incremental costs (if any) that are associated with such number of discharges.
(ii) The applicable percentage increase shall be determined based upon such relationship in a manner that reflects, based upon the number of such discharges for a subsection (d) hospital, such additional incremental costs.
(iii) In no case shall the applicable percentage increase exceed 25 percent.
(C)
(i)
(I) with respect to each of fiscal years 2005 through 2010, less than 800 discharges during the fiscal year;
(II) with respect to each of fiscal years 2011 through 2018, less than 1,600 discharges of individuals entitled to, or enrolled for, benefits under part A during the fiscal year or portion of fiscal year;
(III) with respect to each of fiscal years 2019 through 2024 and the portion of fiscal year 2025 beginning on October 1, 2024, and ending on December 31, 2024, less than 3,800 discharges during the fiscal year; and
(IV) with respect to the portion of fiscal year 2025 beginning on January 1, 2025, and ending on September 30, 2025, and fiscal year 2026 and each subsequent fiscal year, less than 800 discharges during the fiscal year.
(ii)
(iii)
(I) a subsection (d) hospital of the Indian Health Service (whether operated by such Service or by an Indian tribe or tribal organization (as those terms are defined in
(II) a subsection (d) hospital other than a hospital of the Indian Health Service meets the mileage criterion under clause (i) with respect to fiscal year 2011 or a succeeding fiscal year, the Secretary shall apply the policy described in the regulation at part 8 412.101(e) of title 42, Code of Federal Regulations (as in effect on March 23, 2018).
(D)
(i) with respect to each of fiscal years 2011 through 2018, with 200 or fewer discharges of individuals entitled to, or enrolled for, benefits under part A in the fiscal year or the portion of fiscal year to 0 percent for low-volume hospitals with greater than 1,600 discharges of such individuals in the fiscal year or the portion of fiscal year or portion of fiscal year; 9 and
(ii) with respect to each of fiscal years 2019 through 2024 and the portion of fiscal year 2025 beginning on October 1, 2024, and ending on December 31, 2024, with 500 or fewer discharges in the fiscal year to 0 percent for low-volume hospitals with greater than 3,800 discharges in the fiscal year.
(13)(A) In order to recognize commuting patterns among geographic areas, the Secretary shall establish a process through application or otherwise for an increase of the wage index applied under paragraph (3)(E) for subsection (d) hospitals located in a qualifying county described in subparagraph (B) in the amount computed under subparagraph (D) based on out-migration of hospital employees who reside in that county to any higher wage index area.
(B) The Secretary shall establish criteria for a qualifying county under this subparagraph based on the out-migration referred to in subparagraph (A) and differences in the area wage indices. Under such criteria the Secretary shall, utilizing such data as the Secretary determines to be appropriate, establish—
(i) a threshold percentage, established by the Secretary, of the weighted average of the area wage index or indices for the higher wage index areas involved;
(ii) a threshold (of not less than 10 percent) for minimum out-migration to a higher wage index area or areas; and
(iii) a requirement that the average hourly wage of the hospitals in the qualifying county equals or exceeds the average hourly wage of all the hospitals in the area in which the qualifying county is located.
(C) For purposes of this paragraph, the term "higher wage index area" means, with respect to a county, an area with a wage index that exceeds that of the county.
(D) The increase in the wage index under subparagraph (A) for a qualifying county shall be equal to the percentage of the hospital employees residing in the qualifying county who are employed in any higher wage index area multiplied by the sum of the products, for each higher wage index area of—
(i) the difference between—
(I) the wage index for such higher wage index area, and
(II) the wage index of the qualifying county; and
(ii) the number of hospital employees residing in the qualifying county who are employed in such higher wage index area divided by the total number of hospital employees residing in the qualifying county who are employed in any higher wage index area.
(E) The process under this paragraph may be based upon the process used by the Medicare Geographic Classification Review Board under paragraph (10). As the Secretary determines to be appropriate to carry out such process, the Secretary may require hospitals (including subsection (d) hospitals and other hospitals) and critical access hospitals, as required under
(F) A wage index increase under this paragraph shall be effective for a period of 3 fiscal years, except that the Secretary shall establish procedures under which a subsection (d) hospital may elect to waive the application of such wage index increase.
(G) A hospital in a county that has a wage index increase under this paragraph for a period and that has not waived the application of such an increase under subparagraph (F) is not eligible for reclassification under paragraph (8) or (10) during that period.
(H) Any increase in a wage index under this paragraph for a county shall not be taken into account for purposes of—
(i) computing the wage index for portions of the wage index area (not including the county) in which the county is located; or
(ii) applying any budget neutrality adjustment with respect to such index under paragraph (8)(D).
(I) The thresholds described in subparagraph (B), data on hospital employees used under this paragraph, and any determination of the Secretary under the process described in subparagraph (E) shall be final and shall not be subject to judicial review.
(e) Proportional adjustments in applicable percentage increases
(1)(A) For cost reporting periods of hospitals beginning in fiscal year 1984 or fiscal year 1985, the Secretary shall provide for such proportional adjustment in the applicable percentage increase (otherwise applicable to the periods under subsection (b)(3)(B)) as may be necessary to assure that—
(i) the aggregate payment amounts otherwise provided under subsection (d)(1)(A)(i)(I) for that fiscal year for operating costs of inpatient hospital services of hospitals (excluding payments made under
are not greater or less than—
(ii) the target percentage (as defined in subsection (d)(1)(C)) of the payment amounts which would have been payable for such services for those same hospitals for that fiscal year under this section under the law as in effect before April 20, 1983 (excluding payments made under
except that the adjustment made under this subparagraph shall apply only to subsection (d) hospitals and shall not apply for purposes of making computations under subsection (d)(2)(B)(ii) or subsection (d)(3)(A).
(B) For discharges occurring in fiscal year 1984 or fiscal year 1985, the Secretary shall provide under subsections (d)(2)(F) and (d)(3)(C) for such equal proportional adjustment in each of the average standardized amounts otherwise computed for that fiscal year as may be necessary to assure that—
(i) the aggregate payment amounts otherwise provided under subsection (d)(1)(A)(i)(II) and (d)(5) for that fiscal year for operating costs of inpatient hospital services of hospitals (excluding payments made under
are not greater or less than—
(ii) the DRG percentage (as defined in subsection (d)(1)(C)) of the payment amounts which would have been payable for such services for those same hospitals for that fiscal year under this section under the law as in effect before April 20, 1983 (excluding payments made under
(C) For discharges occurring in fiscal year 1988, the Secretary shall provide for such equal proportional adjustment in each of the average standardized amounts otherwise computed under subsection (d)(3) for that fiscal year as may be necessary to assure that—
(i) the aggregate payment amounts otherwise provided under subsections (d)(1)(A)(iii), (d)(5), and (d)(9) for that fiscal year for operating costs of inpatient hospital services of subsection (d) hospitals and subsection (d) Puerto Rico hospitals,
are not greater or less than—
(ii) the payment amounts that would have been payable for such services for those same hospitals for that fiscal year but for the enactment of the amendments made by section 9304 of the Omnibus Budget Reconciliation Act of 1986.
(2) Repealed.
(3) Repealed.
(4)(A) Taking into consideration the recommendations of the Commission, the Secretary shall recommend for each fiscal year (beginning with fiscal year 1988) an appropriate change factor for inpatient hospital services for discharges in that fiscal year which will take into account amounts necessary for the efficient and effective delivery of medically appropriate and necessary care of high quality. The appropriate change factor may be different for all large urban subsection (d) hospitals, other urban subsection (d) hospitals, urban subsection (d) Puerto Rico hospitals, rural subsection (d) hospitals, and rural subsection (d) Puerto Rico hospitals, and all other hospitals and units not paid under subsection (d), and may vary among such other hospitals and units.
(B) In addition to the recommendation made under subparagraph (A), the Secretary shall, taking into consideration the recommendations of the Commission under paragraph (2)(B), recommend for each fiscal year (beginning with fiscal year 1992) other appropriate changes in each existing reimbursement policy under this subchapter under which payments to an institution are based upon prospectively determined rates.
(5) The Secretary shall cause to have published in the Federal Register, not later than—
(A) the April 1 before each fiscal year (beginning with fiscal year 1986), the Secretary's proposed recommendations under paragraph (4) for that fiscal year for public comment, and
(B) the August 1 before such fiscal year after such consideration of public comment on the proposal as is feasible in the time available, the Secretary's final recommendations under such paragraph for that year.
The Secretary shall include in the publication referred to in subparagraph (A) for a fiscal year the report of the Commission's recommendations submitted under paragraph (3) for that fiscal year. To the extent that the Secretary's recommendations under paragraph (4) differ from the Commission's recommendations for that fiscal year, the Secretary shall include in the publication referred to in subparagraph (A) an explanation of the Secretary's grounds for not following the Commission's recommendations.
(f) Reporting of costs of hospitals receiving payments on basis of prospective rates
(1)(A) The Secretary shall maintain a system for the reporting of costs of hospitals receiving payments computed under subsection (d).
(B)(i) Subject to clause (ii), the Secretary shall place into effect a standardized electronic cost reporting format for hospitals under this subchapter.
(ii) The Secretary may delay or waive the implementation of such format in particular instances where such implementation would result in financial hardship (in particular with respect to hospitals with a small percentage of inpatients entitled to benefits under this subchapter).
(2) If the Secretary determines, based upon information supplied by a quality improvement organization under part B of subchapter XI, that a hospital, in order to circumvent the payment method established under subsection (b) or (d) of this section, has taken an action that results in the admission of individuals entitled to benefits under part A unnecessarily, unnecessary multiple admissions of the same such individuals, or other inappropriate medical or other practices with respect to such individuals, the Secretary may—
(A) deny payment (in whole or in part) under part A with respect to inpatient hospital services provided with respect to such an unnecessary admission (or subsequent admission of the same individual), or
(B) require the hospital to take other corrective action necessary to prevent or correct the inappropriate practice.
(3) The provisions of subsections (c) through (g) of
(g) Prospective payment for capital-related costs; return on equity capital for hospitals
(1)(A) Notwithstanding
(B) Such system—
(i) shall provide for (I) a payment on a per discharge basis, and (II) an appropriate weighting of such payment amount as relates to the classification of the discharge;
(ii) may provide for an adjustment to take into account variations in the relative costs of capital and construction for the different types of facilities or areas in which they are located;
(iii) may provide for such exceptions (including appropriate exceptions to reflect capital obligations) as the Secretary determines to be appropriate, and
(iv) may provide for suitable adjustment to reflect hospital occupancy rate.
(C) In this paragraph, the term "capital-related costs" has the meaning given such term by the Secretary under subsection (a)(4) as of September 30, 1987, and does not include a return on equity capital.
(2)(A) The Secretary shall provide that the amount which is allowable, with respect to reasonable costs of inpatient hospital services for which payment may be made under this subchapter, for a return on equity capital for hospitals shall, for cost reporting periods beginning on or after April 20, 1983, be equal to amounts otherwise allowable under regulations in effect on March 1, 1983, except that the rate of return to be recognized shall be equal to the applicable percentage (described in subparagraph (B)) of the average of the rates of interest, for each of the months any part of which is included in the reporting period, on obligations issued for purchase by the Federal Hospital Insurance Trust Fund.
(B) In this paragraph, the "applicable percentage" is—
(i) 75 percent, for cost reporting periods beginning during fiscal year 1987,
(ii) 50 percent, for cost reporting periods beginning during fiscal year 1988,
(iii) 25 percent, for cost reporting periods beginning during fiscal year 1989, and
(iv) 0 percent, for cost reporting periods beginning on or after October 1, 1989.
(3)(A) Except as provided in subparagraph (B), in determining the amount of the payments that may be made under this subchapter with respect to all the capital-related costs of inpatient hospital services of a subsection (d) hospital and a subsection (d) Puerto Rico hospital, the Secretary shall reduce the amounts of such payments otherwise established under this subchapter by—
(i) 3.5 percent for payments attributable to portions of cost reporting periods occurring during fiscal year 1987,
(ii) 7 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1988 on or after October 1, 1987, and before January 1, 1988,
(iii) 12 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) in fiscal year 1988, occurring on or after January 1, 1988,
(iv) 15 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during fiscal year 1989, and
(v) 15 percent for payments attributable to portions of cost reporting periods or discharges (as the case may be) occurring during the period beginning January 1, 1990, and ending September 30, 1991.
(B) Subparagraph (A) shall not apply to payments with respect to the capital-related costs of any hospital that is a sole community hospital (as defined in subsection (d)(5)(D)(iii)) or a critical access hospital (as defined in
(4) In determining the amount of the payments that are attributable to portions of cost reporting periods occurring during fiscal years 1998 through 2002 and that may be made under this subchapter with respect to capital-related costs of inpatient hospital services of a hospital which is described in clause (i), (ii), or (iv) of subsection (d)(1)(B) or a unit described in the matter after clause (v) of such subsection, the Secretary shall reduce the amounts of such payments otherwise determined under this subchapter by 15 percent.
(h) Payments for direct graduate medical education costs
(1) Substitution of special payment rules
Notwithstanding
(2) Determination of hospital-specific approved FTE resident amounts
The Secretary shall determine, for each hospital with an approved medical residency training program, an approved FTE resident amount for each cost reporting period beginning on or after July 1, 1985, as follows:
(A) Determining allowable average cost per FTE resident in a hospital's base period
The Secretary shall determine, for the hospital's cost reporting period that began during fiscal year 1984, the average amount recognized as reasonable under this subchapter for direct graduate medical education costs of the hospital for each full-time-equivalent resident.
(B) Updating to the first cost reporting period
(i) In general
The Secretary shall update each average amount determined under subparagraph (A) by the percentage increase in the consumer price index during the 12-month cost reporting period described in such subparagraph.
(ii) Exception
The Secretary shall not perform an update under clause (i) in the case of a hospital if the hospital's reporting period, described in subparagraph (A), began on or after July 1, 1984, and before October 1, 1984.
(C) Amount for first cost reporting period
For the first cost reporting period of the hospital beginning on or after July 1, 1985, the approved FTE resident amount for the hospital is equal to the amount determined under subparagraph (B) increased by 1 percent.
(D) Amount for subsequent cost reporting periods
(i) In general
Except as provided in a subsequent clause, for each subsequent cost reporting period, the approved FTE resident amount for the hospital is equal to the approved FTE resident amount determined under this paragraph for the previous cost reporting period updated, through the midpoint of the period, by projecting the estimated percentage change in the consumer price index during the 12-month period ending at that midpoint, with appropriate adjustments to reflect previous under- or over-estimations under this subparagraph in the projected percentage change in the consumer price index.
(ii) Freeze in update for fiscal years 1994 and 1995
For cost reporting periods beginning during fiscal year 1994 or fiscal year 1995, the approved FTE resident amount for a hospital shall not be updated under clause (i) for a resident who is not a primary care resident (as defined in paragraph (5)(H)) or a resident enrolled in an approved medical residency training program in obstetrics and gynecology.
(iii) Floor for locality adjusted national average per resident amount
The approved FTE resident amount for a hospital for the cost reporting period beginning during fiscal year 2001 shall not be less than 70 percent, and for the cost reporting period beginning during fiscal year 2002 shall not be less than 85 percent, of the locality adjusted national average per resident amount computed under subparagraph (E) for the hospital and period.
(iv) Adjustment in rate of increase for hospitals with FTE approved amount above 140 percent of locality adjusted national average per resident amount
(I) Freeze for fiscal years 2001 and 2002 and 2004 through 2013
For a cost reporting period beginning during fiscal year 2001 or fiscal year 2002 or during the period beginning with fiscal year 2004 and ending with fiscal year 2013, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and period, subject to subclause (III), the approved FTE resident amount for the period involved shall be the same as the approved FTE resident amount for the hospital for such preceding cost reporting period.
(II) 2 percent decrease in update for fiscal years 2003, 2004, and 2005
For the cost reporting period beginning during fiscal year 2003, if the approved FTE resident amount for a hospital for the preceding cost reporting period exceeds 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for that hospital and preceding period, the approved FTE resident amount for the period involved shall be updated in the manner described in subparagraph (D)(i) except that, subject to subclause (III), the consumer price index applied for a 12-month period shall be reduced (but not below zero) by 2 percentage points.
(III) No adjustment below 140 percent
In no case shall subclause (I) or (II) reduce an approved FTE resident amount for a hospital for a cost reporting period below 140 percent of the locality adjusted national average per resident amount computed under subparagraph (E) for such hospital and period.
(E) Determination of locality adjusted national average per resident amount
The Secretary shall determine a locality adjusted national average per resident amount with respect to a cost reporting period of a hospital beginning during a fiscal year as follows:
(i) Determining hospital single per resident amount
The Secretary shall compute for each hospital operating an approved graduate medical education program a single per resident amount equal to the average (weighted by number of full-time equivalent residents, as determined under paragraph (4)) of the primary care per resident amount and the non-primary care per resident amount computed under paragraph (2) for cost reporting periods ending during fiscal year 1997.
(ii) Standardizing per resident amounts
The Secretary shall compute a standardized per resident amount for each such hospital by dividing the single per resident amount computed under clause (i) by an average of the 3 geographic index values (weighted by the national average weight for each of the work, practice expense, and malpractice components) as applied under
(iii) Computing of weighted average
The Secretary shall compute the average of the standardized per resident amounts computed under clause (ii) for such hospitals, with the amount for each hospital weighted by the average number of full-time equivalent residents at such hospital (as determined under paragraph (4)).
(iv) Computing national average per resident amount
The Secretary shall compute the national average per resident amount, for a hospital's cost reporting period that begins during fiscal year 2001, equal to the weighted average computed under clause (iii) increased by the estimated percentage increase in the consumer price index for all urban consumers during the period beginning with the month that represents the midpoint of the cost reporting periods described in clause (i) and ending with the midpoint of the hospital's cost reporting period that begins during fiscal year 2001.
(v) Adjusting for locality
The Secretary shall compute the product of—
(I) the national average per resident amount computed under clause (iv) for the hospital, and
(II) the geographic index value average (described and applied under clause (ii)) for the fee schedule area in which the hospital is located.
(vi) Computing locality adjusted amount
The locality adjusted national per resident amount for a hospital for—
(I) the cost reporting period beginning during fiscal year 2001 is the product computed under clause (v); or
(II) each subsequent cost reporting period is equal to the locality adjusted national per resident amount for the hospital for the previous cost reporting period (as determined under this clause) updated, through the midpoint of the period, by projecting the estimated percentage change in the consumer price index for all urban consumers during the 12-month period ending at that midpoint.
(F) Treatment of certain hospitals
(i) In the case of a hospital that did not have an approved medical residency training program or was not participating in the program under this subchapter for a cost reporting period beginning during fiscal year 1984, the Secretary shall, for the first such period for which it has such a residency training program and is participating under this subchapter, provide for such approved FTE resident amount as the Secretary determines to be appropriate, based on approved FTE resident amounts for comparable programs.
(ii) In applying this subparagraph in the case of a hospital that trains residents and has not entered into a GME affiliation agreement (as defined by the Secretary for purposes of paragraph (4)(H)(ii)), on or after December 27, 2020, the Secretary shall not establish an FTE resident amount until such time as the Secretary determines that the hospital has trained at least 1.0 full-time-equivalent resident in an approved medical residency training program in a cost reporting period.
(iii) In applying this subparagraph for cost reporting periods beginning on or after December 27, 2020, in the case of a hospital that, as of such date, has an approved FTE resident amount based on the training in an approved medical residency program or programs of—
(I) less than 1.0 full-time-equivalent resident in any cost reporting period beginning before October 1, 1997, as determined by the Secretary; or
(II) no more than 3.0 full-time-equivalent residents in any cost reporting period beginning on or after October 1, 1997, and before December 27, 2020, as determined by the Secretary,
in lieu of such FTE resident amount the Secretary shall, in accordance with the methodology described in section 413.77(e) of title 42 of the Code of Federal Regulations (or any successor regulation), establish a new FTE resident amount if the hospital trains at least 1.0 full-time-equivalent resident (in the case of a hospital described in subclause (I)) or more than 3.0 full-time-equivalent residents (in the case of a hospital described in subclause (II)) in a cost reporting period beginning on or after such date and before the date that is 5 years after such date.
(iv) For purposes of carrying out this subparagraph for cost reporting periods beginning on or after December 27, 2020, a hospital shall report full-time-equivalent residents on its cost report for a cost reporting period if the hospital trains at least 1.0 full-time-equivalent residents 9 in an approved medical residency training program or programs in such period.
(v) As appropriate, the Secretary may consider information from any cost reporting period necessary to establish a new FTE resident amount as described in clause (iii).
(3) Hospital payment amount per resident
(A) In general
The payment amount, for a hospital cost reporting period beginning on or after July 1, 1985, is equal to the product of—
(i) the aggregate approved amount (as defined in subparagraph (B)) for that period, and
(ii) the hospital's medicare patient load (as defined in subparagraph (C)) for that period.
(B) Aggregate approved amount
As used in subparagraph (A), the term "aggregate approved amount" means, for a hospital cost reporting period, the product of—
(i) the hospital's approved FTE resident amount (determined under paragraph (2)) for that period, and
(ii) the weighted average number of full-time-equivalent residents (as determined under paragraph (4)) in the hospital's approved medical residency training programs in that period.
The Secretary shall reduce the aggregate approved amount to the extent payment is made under subsection (k) for residents included in the hospital's count of full-time equivalent residents.
(C) Medicare patient load
As used in subparagraph (A), the term "medicare patient load" means, with respect to a hospital's cost reporting period, the fraction of the total number of inpatient-bed-days (as established by the Secretary) during the period which are attributable to patients with respect to whom payment may be made under part A.
(D) Payment for managed care enrollees
(i) In general
For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary shall provide for an additional payment amount under this subsection for services furnished to individuals who are enrolled under a risk-sharing contract with an eligible organization under
(I) the aggregate approved amount (as defined in subparagraph (B)) for that period; and
(II) the fraction of the total number of inpatient-bed days (as established by the Secretary) during the period which are attributable to such enrolled individuals.
(ii) Applicable percentage
For purposes of clause (i), the applicable percentage is—
(I) 20 percent in 1998,
(II) 40 percent in 1999,
(III) 60 percent in 2000,
(IV) 80 percent in 2001, and
(V) 100 percent in 2002 and subsequent years.
(iii) Proportional reduction for nursing and allied health education
The Secretary shall estimate a proportional adjustment in payments to all hospitals determined under clauses (i) and (ii) for portions of cost reporting periods beginning in a year (beginning with 2000) such that the proportional adjustment reduces payments in an amount for such year equal to the total additional payment amounts for nursing and allied health education determined under subsection (l) for portions of cost reporting periods occurring in that year. In applying the preceding sentence for each of 2010 through 2019, the Secretary shall not take into account any increase in the total amount of such additional payment amounts for such nursing and allied health education for portions of cost reporting periods occurring in the year pursuant to the application of paragraph (2)(B)(ii) of such subsection.
(iv) Special rule for hospitals under reimbursement system
The Secretary shall establish rules for the application of this subparagraph to a hospital reimbursed under a reimbursement system authorized under
(4) Determination of full-time-equivalent residents
(A) Rules
The Secretary shall establish rules consistent with this paragraph for the computation of the number of full-time-equivalent residents in an approved medical residency training program.
(B) Adjustment for part-year or part-time residents
Such rules shall take into account individuals who serve as residents for only a portion of a period with a hospital or simultaneously with more than one hospital.
(C) Weighting factors for certain residents
Subject to subparagraph (D), such rules shall provide, in calculating the number of full-time-equivalent residents in an approved residency program—
(i) before July 1, 1986, for each resident the weighting factor is 1.00,
(ii) on or after July 1, 1986, for a resident who is in the resident's initial residency period (as defined in paragraph (5)(F)), the weighting factor is 1.00,
(iii) on or after July 1, 1986, and before July 1, 1987, for a resident who is not in the resident's initial residency period (as defined in paragraph (5)(F)), the weighting factor is .75, and
(iv) on or after July 1, 1987, for a resident who is not in the resident's initial residency period (as defined in paragraph (5)(F)), the weighting factor is .50.
(D) Foreign medical graduates required to pass FMGEMS examination
(i) In general
Except as provided in clause (ii), such rules shall provide that, in the case of an individual who is a foreign medical graduate (as defined in paragraph (5)(D)), the individual shall not be counted as a resident on or after July 1, 1986, unless—
(I) the individual has passed the FMGEMS examination (as defined in paragraph (5)(E)), or
(II) the individual has previously received certification from, or has previously passed the examination of, the Educational Commission for Foreign Medical Graduates.
(ii) Transition for current FMGS
On or after July 1, 1986, but before July 1, 1987, in the case of a foreign medical graduate who—
(I) has served as a resident before July 1, 1986, and is serving as a resident after that date, but
(II) has not passed the FMGEMS examination or a previous examination of the Educational Commission for Foreign Medical Graduates before July 1, 1986,
the individual shall be counted as a resident at a rate equal to one-half of the rate at which the individual would otherwise be counted.
(E) Counting time spent in outpatient settings
Subject to subparagraphs (J) and (K), such rules shall provide that only time spent in activities relating to patient care shall be counted and that—
(i) effective for cost reporting periods beginning before July 1, 2010, all the time; 10 so spent by a resident under an approved medical residency training program shall be counted towards the determination of full-time equivalency, without regard to the setting in which the activities are performed, if the hospital incurs all, or substantially all, of the costs for the training program in that setting; and
(ii) effective for cost reporting periods beginning on or after July 1, 2010, all the time so spent by a resident shall be counted towards the determination of full-time equivalency, without regard to the setting in which the activities are performed, if a hospital incurs the costs of the stipends and fringe benefits of the resident during the time the resident spends in that setting. If more than one hospital incurs these costs, either directly or through a third party, such hospitals shall count a proportional share of the time, as determined by written agreement between the hospitals, that a resident spends training in that setting.
Any hospital claiming under this subparagraph for time spent in a nonprovider setting shall maintain and make available to the Secretary records regarding the amount of such time and such amount in comparison with amounts of such time in such base year as the Secretary shall specify.
(F) Limitation on number of residents in allopathic and osteopathic medicine
(i) In general
Such rules shall provide that for purposes of a cost reporting period beginning on or after October 1, 1997, subject to paragraphs (7), (8), (9), and (10), the total number of full-time equivalent residents before application of weighting factors (as determined under this paragraph) with respect to a hospital's approved medical residency training program in the fields of allopathic medicine and osteopathic medicine may not exceed the number (or, 130 percent of such number in the case of a hospital located in a rural area) of such full-time equivalent residents for the hospital's most recent cost reporting period ending on or before December 31, 1996.
(ii) Counting primary care residents on certain approved leaves of absence in base year FTE count
(I) In general
In determining the number of such full-time equivalent residents for a hospital's most recent cost reporting period ending on or before December 31, 1996, for purposes of clause (i), the Secretary shall count an individual to the extent that the individual would have been counted as a primary care resident for such period but for the fact that the individual, as determined by the Secretary, was on maternity or disability leave or a similar approved leave of absence.
(II) Limitation to 3 FTE residents for any hospital
The total number of individuals counted under subclause (I) for a hospital may not exceed 3 full-time equivalent residents.
(G) Counting interns and residents for FY 1998 and subsequent years
(i) In general
For cost reporting periods beginning during fiscal years beginning on or after October 1, 1997, subject to the limit described in subparagraph (F), the total number of full-time equivalent residents for determining a hospital's graduate medical education payment shall equal the average of the actual full-time equivalent resident counts for the cost reporting period and the preceding two cost reporting periods.
(ii) Adjustment for short periods
If any cost reporting period beginning on or after October 1, 1997, is not equal to twelve months, the Secretary shall make appropriate modifications to ensure that the average full-time equivalent resident counts pursuant to clause (i) are based on the equivalent of full twelve-month cost reporting periods.
(iii) Transition rule for 1998
In the case of a hospital's first cost reporting period beginning on or after October 1, 1997, clause (i) shall be applied by using the average for such period and the preceding cost reporting period.
(H) Special rules for application of subparagraphs (F) and (G)
(i) New facilities
(I) The Secretary shall, consistent with the principles of subparagraphs (F) and (G) and subject to paragraphs (7), (8), (9), and (10), prescribe rules for the application of such subparagraphs in the case of medical residency training programs established on or after January 1, 1995. In promulgating such rules for purposes of subparagraph (F), the Secretary shall give special consideration to facilities that meet the needs of underserved rural areas.
(II) In applying this clause in the case of a hospital that, on or after December 27, 2020, begins training residents in a new approved medical residency training program or programs (as defined by the Secretary), the Secretary shall not determine a limitation applicable to the hospital under subparagraph (F) until such time as the Secretary determines that the hospital has trained at least 1.0 full-time-equivalent resident in such new approved medical residency training program or programs in a cost reporting period.
(III) In applying this clause in the case of a hospital that, as of December 27, 2020, has a limitation under subparagraph (F), based on a cost reporting period beginning before October 1, 1997, of less than 1.0 full-time-equivalent resident, the Secretary shall adjust the limitation in the manner applicable to a new approved medical residency training program if the Secretary determines the hospital begins training at least 1.0 full-time-equivalent residents 9 in a program year beginning on or after such date and before the date that is 5 years after such date.
(IV) In applying this clause in the case of a hospital that, as of December 27, 2020, has a limitation under subparagraph (F), based on a cost reporting period beginning on or after October 1, 1997, and before such date, of no more than 3.0 full-time-equivalent residents, the Secretary shall adjust the limitation in the manner applicable to a new approved medical residency training program if the Secretary determines the hospital begins training more than 3.0 full-time-equivalent residents in a program year beginning on or after such date and before the date that is 5 years after such date.
(V) An adjustment to the limitation applicable to a hospital made pursuant to subclause (III) or (IV) shall be made in a manner consistent with the methodology, as appropriate, in section 413.79(e) of title 42, Code of Federal Regulations (or any successor regulation). As appropriate, the Secretary may consider information from any cost reporting periods necessary to make such an adjustment to the limitation.
(ii) Aggregation
The Secretary may prescribe rules which allow institutions which are members of the same affiliated group (as defined by the Secretary) to elect to apply the limitation of subparagraph (F) on an aggregate basis.
(iii) Data collection
The Secretary may require any entity that operates a medical residency training program and to which subparagraphs (F) and (G) apply to submit to the Secretary such additional information as the Secretary considers necessary to carry out such subparagraphs.
(iv) Training programs in rural areas
(I) Cost reporting periods beginning before October 1, 2022
For cost reporting periods beginning before October 1, 2022, in the case of a hospital that is not located in a rural area but establishes separately accredited approved medical residency training programs (or rural tracks) in a rural area or has an accredited training program with an integrated rural track, the Secretary shall adjust the limitation under subparagraph (F) in an appropriate manner insofar as it applies to such programs in such rural areas in order to encourage the training of physicians in rural areas.
(II) Cost reporting periods beginning on or after October 1, 2022
For cost reporting periods beginning on or after October 1, 2022, in the case of a hospital not located in a rural area that established or establishes a medical residency training program (or rural tracks) in a rural area or establishes an accredited program where greater than 50 percent of the program occurs in a rural area, the Secretary shall 11 consistent with the principles of subparagraphs (F) and (G) and subject to paragraphs (7) and (8), prescribe rules for the application of such subparagraphs with respect to such a program and, in accordance with such rules, adjust in an appropriate manner the limitation under subparagraph (F) for such hospital and each such hospital located in a rural area that participates in such a training.
(v) Special provider agreement
If an entity enters into a provider agreement pursuant to
(I) the limitation on the number of total full time equivalent residents under subparagraph (F) and clauses (v) and (vi)(I) of subsection (d)(5)(B) applicable to such provider shall be equal to the limitation applicable under such provisions to Provider No. 05–0578 for its cost reporting period ending on June 30, 2006; and
(II) the provisions of subparagraph (G) and subsection (d)(5)(B)(vi)(II) shall not be applicable to such provider for the first three cost reporting years in which such provider trains residents under any approved medical residency training program.
(vi) Redistribution of residency slots after a hospital closes
(I) In general
Subject to the succeeding provisions of this clause, the Secretary shall, by regulation, establish a process under which, in the case where a hospital (other than a hospital described in clause (v)) with an approved medical residency program closes on or after a date that is 2 years before March 23, 2010, the Secretary shall increase the otherwise applicable resident limit under this paragraph for other hospitals in accordance with this clause.
(II) Priority for hospitals in certain areas
Subject to the succeeding provisions of this clause, in determining for which hospitals the increase in the otherwise applicable resident limit is provided under such process, the Secretary shall distribute the increase to hospitals in the following priority order (with preference given within each category to hospitals that are members of the same affiliated group (as defined by the Secretary under clause (ii)) as the closed hospital):
(aa) First, to hospitals located in the same core-based statistical area as, or a core-based statistical area contiguous to, the hospital that closed.
(bb) Second, to hospitals located in the same State as the hospital that closed.
(cc) Third, to hospitals located in the same region of the country as the hospital that closed.
(dd) Fourth, only if the Secretary is not able to distribute the increase to hospitals described in item (cc), to qualifying hospitals in accordance with the provisions of paragraph (8).
(III) Requirement hospital likely to fill position within certain time period
The Secretary may only increase the otherwise applicable resident limit of a hospital under such process if the Secretary determines the hospital has demonstrated a likelihood of filling the positions made available under this clause within 3 years.
(IV) Limitation
The aggregate number of increases in the otherwise applicable resident limits for hospitals under this clause shall be equal to the number of resident positions in the approved medical residency programs that closed on or after the date described in subclause (I).
(V) Administration
(J) 12 Treatment of certain nonprovider and didactic activities
Such rules shall provide that all time spent by an intern or resident in an approved medical residency training program in a nonprovider setting that is primarily engaged in furnishing patient care (as defined in paragraph (5)(K)) in non-patient care activities, such as didactic conferences and seminars, but not including research not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall be counted toward the determination of full-time equivalency.
(K) Treatment of certain other activities
In determining the hospital's number of full-time equivalent residents for purposes of this subsection, all the time that is spent by an intern or resident in an approved medical residency training program on vacation, sick leave, or other approved leave, as such time is defined by the Secretary, and that does not prolong the total time the resident is participating in the approved program beyond the normal duration of the program shall be counted toward the determination of full-time equivalency.
(5) Definitions and special rules
As used in this subsection:
(A) Approved medical residency training program
The term "approved medical residency training program" means a residency or other postgraduate medical training program participation in which may be counted toward certification in a specialty or subspecialty and includes formal postgraduate training programs in geriatric medicine approved by the Secretary.
(B) Consumer price index
The term "consumer price index" refers to the Consumer Price Index for All Urban Consumers (United States city average), as published by the Secretary of Commerce.
(C) Direct graduate medical education costs
The term "direct graduate medical education costs" means direct costs of approved educational activities for approved medical residency training programs.
(D) Foreign medical graduate
The term "foreign medical graduate" means a resident who is not a graduate of—
(i) a school of medicine accredited by the Liaison Committee on Medical Education of the American Medical Association and the Association of American Medical Colleges (or approved by such Committee as meeting the standards necessary for such accreditation),
(ii) a school of osteopathy accredited by the American Osteopathic Association, or approved by such Association as meeting the standards necessary for such accreditation, or
(iii) a school of dentistry or podiatry which is accredited (or meets the standards for accreditation) by an organization recognized by the Secretary for such purpose.
(E) FMGEMS examination
The term "FMGEMS examination" means parts I and II of the Foreign Medical Graduate Examination in the Medical Sciences or any successor examination recognized by the Secretary for this purpose.
(F) Initial residency period
The term "initial residency period" means the period of board eligibility, except that—
(i) except as provided in clause (ii), in no case shall the initial period of residency exceed an aggregate period of formal training of more than five years for any individual, and
(ii) a period, of not more than two years, during which an individual is in a geriatric residency or fellowship program or a preventive medicine residency or fellowship program which meets such criteria as the Secretary may establish, shall be treated as part of the initial residency period, but shall not be counted against any limitation on the initial residency period.
Subject to subparagraph (G)(v), the initial residency period shall be determined, with respect to a resident, as of the time the resident enters the residency training program.
(G) Period of board eligibility
(i) General rule
Subject to clauses (ii), (iii), (iv), and (v), the term "period of board eligibility" means, for a resident, the minimum number of years of formal training necessary to satisfy the requirements for initial board eligibility in the particular specialty for which the resident is training.
(ii) Application of 1985–1986 directory
Except as provided in clause (iii), the period of board eligibility shall be such period specified in the 1985–1986 Directory of Residency Training Programs published by the Accreditation Council on Graduate Medical Education.
(iii) Changes in period of board eligibility
On or after July 1, 1989, if the Accreditation Council on Graduate Medical Education, in its Directory of Residency Training Programs—
(I) increases the minimum number of years of formal training necessary to satisfy the requirements for a specialty, above the period specified in its 1985–1986 Directory, the Secretary may increase the period of board eligibility for that specialty, but not to exceed the period of board eligibility specified in that later Directory, or
(II) decreases the minimum number of years of formal training necessary to satisfy the requirements for a specialty, below the period specified in its 1985–1986 Directory, the Secretary may decrease the period of board eligibility for that specialty, but not below the period of board eligibility specified in that later Directory.
(iv) Special rule for certain primary care combined residency programs
(I) In the case of a resident enrolled in a combined medical residency training program in which all of the individual programs (that are combined) are for training a primary care resident (as defined in subparagraph (H)), the period of board eligibility shall be the minimum number of years of formal training required to satisfy the requirements for initial board eligibility in the longest of the individual programs plus one additional year.
(II) A resident enrolled in a combined medical residency training program that includes an obstetrics and gynecology program shall qualify for the period of board eligibility under subclause (I) if the other programs such resident combines with such obstetrics and gynecology program are for training a primary care resident.
(v) Child neurology training programs
In the case of a resident enrolled in a child neurology residency training program, the period of board eligibility and the initial residency period shall be the period of board eligibility for pediatrics plus 2 years.
(H) Primary care resident
The term "primary care resident" means a resident enrolled in an approved medical residency training program in family medicine, general internal medicine, general pediatrics, preventive medicine, geriatric medicine, or osteopathic general practice.
(I) Resident
The term "resident" includes an intern or other participant in an approved medical residency training program.
(J) Adjustments for certain family practice residency programs
(i) In general
In the case of an approved medical residency training program (meeting the requirements of clause (ii)) of a hospital which received funds from the United States, a State, or a political subdivision of a State or an instrumentality of such a State or political subdivision (other than payments under this subchapter or a State plan under subchapter XIX) for the program during the cost reporting period that began during fiscal year 1984, the Secretary shall—
(I) provide for an average amount under paragraph (2)(A) that takes into account the Secretary's estimate of the amount that would have been recognized as reasonable under this subchapter if the hospital had not received such funds, and
(II) reduce the payment amount otherwise provided under this subsection in an amount equal to the proportion of such program funds received during the cost reporting period involved that is allocable to this subchapter.
(ii) Additional requirements
A hospital's approved medical residency program meets the requirements of this clause if—
(I) the program is limited to training for family and community medicine;
(II) the program is the only approved medical residency program of the hospital; and
(III) the average amount determined under paragraph (2)(A) for the hospital (as determined without regard to the increase in such amount described in clause (i)(I)) does not exceed $10,000.
(K) Nonprovider setting that is primarily engaged in furnishing patient care
The term "nonprovider setting that is primarily engaged in furnishing patient care" means a nonprovider setting in which the primary activity is the care and treatment of patients, as defined by the Secretary.
(6) Incentive payment under plans for voluntary reduction in number of residents
(A) In general
In the case of a voluntary residency reduction plan for which an application is approved under subparagraph (B), subject to subparagraph (F), each hospital which is part of the qualifying entity submitting the plan shall be paid an applicable hold harmless percentage (as specified in subparagraph (E)) of the sum of—
(i) the amount (if any) by which—
(I) the amount of payment which would have been made under this subsection if there had been a 5-percent reduction in the number of full-time equivalent residents in the approved medical education training programs of the hospital as of June 30, 1997, exceeds
(II) the amount of payment which is made under this subsection, taking into account the reduction in such number effected under the reduction plan; and
(ii) the amount of the reduction in payment under subsection (d)(5)(B) for the hospital that is attributable to the reduction in number of residents effected under the plan below 95 percent of the number of full-time equivalent residents in such programs of the hospital as of June 30, 1997.
The determination of the amounts under clauses (i) and (ii) for any year shall be made on the basis of the provisions of this subchapter in effect on the application deadline date for the first calendar year to which the reduction plan applies.
(B) Approval of plan applications
The Secretary may not approve the application of an qualifying entity unless—
(i) the application is submitted in a form and manner specified by the Secretary and by not later than November 1, 1999,13
(ii) the application provides for the operation of a plan for the reduction in the number of full-time equivalent residents in the approved medical residency training programs of the entity consistent with the requirements of subparagraph (D);
(iii) the entity elects in the application the period of residency training years (not greater than 5) over which the reduction will occur;
(iv) the entity will not reduce the proportion of its residents in primary care (to the total number of residents) below such proportion as in effect as of the applicable time described in subparagraph (D)(v); and
(v) the Secretary determines that the application and the entity and such plan meet such other requirements as the Secretary specifies in regulations.
(C) Qualifying entity
For purposes of this paragraph, any of the following may be a qualifying entity:
(i) Individual hospitals operating one or more approved medical residency training programs.
(ii) Two or more hospitals that operate such programs and apply for treatment under this paragraph as a single qualifying entity.
(iii) A qualifying consortium (as described in section 4628 of the Balanced Budget Act of 1997).
(D) Residency reduction requirements
(i) Individual hospital applicants
In the case of a qualifying entity described in subparagraph (C)(i), the number of full-time equivalent residents in all the approved medical residency training programs operated by or through the entity shall be reduced as follows:
(I) If the base number of residents exceeds 750 residents, by a number equal to at least 20 percent of such base number.
(II) Subject to subclause (IV), if the base number of residents exceeds 600 but is less than 750 residents, by 150 residents.
(III) Subject to subclause (IV), if the base number of residents does not exceed 600 residents, by a number equal to at least 25 percent of such base number.
(IV) In the case of a qualifying entity which is described in clause (v) and which elects treatment under this subclause, by a number equal to at least 20 percent of the base number.
(ii) Joint applicants
In the case of a qualifying entity described in subparagraph (C)(ii), the number of full-time equivalent residents in the aggregate for all the approved medical residency training programs operated by or through the entity shall be reduced as follows:
(I) Subject to subclause (II), by a number equal to at least 25 percent of the base number.
(II) In the case of such a qualifying entity which is described in clause (v) and which elects treatment under this subclause, by a number equal to at least 20 percent of the base number.
(iii) Consortia
In the case of a qualifying entity described in subparagraph (C)(iii), the number of full-time equivalent residents in the aggregate for all the approved medical residency training programs operated by or through the entity shall be reduced by a number equal to at least 20 percent of the base number.
(iv) Manner of reduction
The reductions specified under the preceding provisions of this subparagraph for a qualifying entity shall be below the base number of residents for that entity and shall be fully effective not later than the 5th residency training year in which the application under subparagraph (B) is effective.
(v) Entities providing assurance of increase in primary care residents
An entity is described in this clause if—
(I) the base number of residents for the entity is less than 750 or the entity is described in subparagraph (C)(ii); and
(II) the entity represents in its application under subparagraph (B) that it will increase the number of full-time equivalent residents in primary care by at least 20 percent (from such number included in the base number of residents) by not later than the 5th residency training year in which the application under subparagraph (B) is effective.
If a qualifying entity fails to comply with the representation described in subclause (II) by the end of such 5th residency training year, the entity shall be subject to repayment of all amounts paid under this paragraph, in accordance with procedures established to carry out subparagraph (F).
(vi) "Base number of residents" defined
For purposes of this paragraph, the term "base number of residents" means, with respect to a qualifying entity (or its participating hospitals) operating approved medical residency training programs, the number of full-time equivalent residents in such programs (before application of weighting factors) of the entity as of the most recent residency training year ending before June 30, 1997, or, if less, for any subsequent residency training year that ends before the date the entity makes application under this paragraph.
(E) Applicable hold harmless percentage
For purposes of subparagraph (A), the "applicable hold harmless percentage" for the—
(i) first and second residency training years in which the reduction plan is in effect, 100 percent,
(ii) third such year, 75 percent,
(iii) fourth such year, 50 percent, and
(iv) fifth such year, 25 percent.
(F) Penalty for noncompliance
(i) In general
No payment may be made under this paragraph to a hospital for a residency training year if the hospital has failed to reduce the number of full-time equivalent residents (in the manner required under subparagraph (D)) to the number agreed to by the Secretary and the qualifying entity in approving the application under this paragraph with respect to such year.
(ii) Increase in number of residents in subsequent years
If payments are made under this paragraph to a hospital, and if the hospital increases the number of full-time equivalent residents above the number of such residents permitted under the reduction plan as of the completion of the plan, then, as specified by the Secretary, the entity is liable for repayment to the Secretary of the total amounts paid under this paragraph to the entity.
(G) Treatment of rotating residents
In applying this paragraph, the Secretary shall establish rules regarding the counting of residents who are assigned to institutions the medical residency training programs in which are not covered under approved applications under this paragraph.
(7) Redistribution of unused resident positions
(A) Reduction in limit based on unused positions
(i) Programs subject to reduction
(I) In general
Except as provided in subclause (II), if a hospital's reference resident level (specified in clause (ii)) is less than the otherwise applicable resident limit (as defined in subparagraph (C)(ii)), effective for portions of cost reporting periods occurring on or after July 1, 2005, the otherwise applicable resident limit shall be reduced by 75 percent of the difference between such otherwise applicable resident limit and such reference resident level.
(II) Exception for small rural hospitals
This subparagraph shall not apply to a hospital located in a rural area (as defined in subsection (d)(2)(D)(ii)) with fewer than 250 acute care inpatient beds.
(ii) Reference resident level
(I) In general
Except as otherwise provided in subclauses (II) and (III), the reference resident level specified in this clause for a hospital is the resident level for the most recent cost reporting period of the hospital ending on or before September 30, 2002, for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.
(II) Use of most recent accounting period to recognize expansion of existing programs
If a hospital submits a timely request to increase its resident level due to an expansion of an existing residency training program that is not reflected on the most recent settled cost report, after audit and subject to the discretion of the Secretary, the reference resident level for such hospital is the resident level for the cost reporting period that includes July 1, 2003, as determined by the Secretary.
(III) Expansions under newly approved programs
Upon the timely request of a hospital, the Secretary shall adjust the reference resident level specified under subclause (I) or (II) to include the number of medical residents that were approved in an application for a medical residency training program that was approved by an appropriate accrediting organization (as determined by the Secretary) before January 1, 2002, but which was not in operation during the cost reporting period used under subclause (I) or (II), as the case may be, as determined by the Secretary.
(iii) Affiliation
The provisions of clause (i) shall be applied to hospitals which are members of the same affiliated group (as defined by the Secretary under paragraph (4)(H)(ii)) as of July 1, 2003.
(B) Redistribution
(i) In general
The Secretary is authorized to increase the otherwise applicable resident limit for each qualifying hospital that submits a timely application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after July 1, 2005. The aggregate number of increases in the otherwise applicable resident limits under this subparagraph may not exceed the Secretary's estimate of the aggregate reduction in such limits attributable to subparagraph (A).
(ii) Considerations in redistribution
In determining for which hospitals the increase in the otherwise applicable resident limit is provided under clause (i), the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions within the first 3 cost reporting periods beginning on or after July 1, 2005, made available under this subparagraph, as determined by the Secretary.
(iii) Priority for rural and small urban areas
In determining for which hospitals and residency training programs an increase in the otherwise applicable resident limit is provided under clause (i), the Secretary shall distribute the increase to programs of hospitals located in the following priority order:
(I) First, to hospitals located in rural areas (as defined in subsection (d)(2)(D)(ii)).
(II) Second, to hospitals located in urban areas that are not large urban areas (as defined for purposes of subsection (d)).
(III) Third, to other hospitals in a State if the residency training program involved is in a specialty for which there are not other residency training programs in the State.
Increases of residency limits within the same priority category under this clause shall be determined by the Secretary.
(iv) Limitation
In no case shall more than 25 full-time equivalent additional residency positions be made available under this subparagraph with respect to any hospital.
(v) Application of locality adjusted national average per resident amount
With respect to additional residency positions in a hospital attributable to the increase provided under this subparagraph, notwithstanding any other provision of this subsection, the approved FTE resident amount is deemed to be equal to the locality adjusted national average per resident amount computed under paragraph (4)(E) for that hospital.
(vi) Construction
Nothing in this subparagraph shall be construed as permitting the redistribution of reductions in residency positions attributable to voluntary reduction programs under paragraph (6), under a demonstration project approved as of October 31, 2003, under the authority of section 402 of
(C) Resident level and limit defined
In this paragraph:
(i) Resident level
The term "resident level" means, with respect to a hospital, the total number of full-time equivalent residents, before the application of weighting factors (as determined under paragraph (4)), in the fields of allopathic and osteopathic medicine for the hospital.
(ii) Otherwise applicable resident limit
The term "otherwise applicable resident limit" means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph.
(D) Adjustment based on settled cost report
In the case of a hospital with a dual accredited osteopathic and allopathic family practice program for which—
(i) the otherwise applicable resident limit was reduced under subparagraph (A)(i)(I); and
(ii) such reduction was based on a reference resident level that was determined using a cost report and where a revised or corrected notice of program reimbursement was issued for such cost report between September 1, 2006 and September 15, 2006, whether as a result of an appeal or otherwise, and the reference resident level under such settled cost report is higher than the level used for the reduction under subparagraph (A)(i)(I);
the Secretary shall apply subparagraph (A)(i)(I) using the higher resident reference level and make any necessary adjustments to such reduction. Any such necessary adjustments shall be effective for portions of cost reporting periods occurring on or after July 1, 2005.
(E) Judicial review
There shall be no administrative or judicial review under
(8) Distribution of additional residency positions
(A) Reductions in limit based on unused positions
(i) In general
Except as provided in clause (ii), if a hospital's reference resident level (as defined in subparagraph (H)(i)) is less than the otherwise applicable resident limit (as defined in subparagraph (H)(iii)), effective for portions of cost reporting periods occurring on or after July 1, 2011, the otherwise applicable resident limit shall be reduced by 65 percent of the difference between such otherwise applicable resident limit and such reference resident level.
(ii) Exceptions
This subparagraph shall not apply to—
(I) a hospital located in a rural area (as defined in subsection (d)(2)(D)(ii)) with fewer than 250 acute care inpatient beds;
(II) a hospital that was part of a qualifying entity which had a voluntary residency reduction plan approved under paragraph (6)(B) or under the authority of section 402 of
(III) a hospital described in paragraph (4)(H)(v).
(B) Distribution
(i) In general
The Secretary shall increase the otherwise applicable resident limit for each qualifying hospital that submits an application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after July 1, 2011. The aggregate number of increases in the otherwise applicable resident limit under this subparagraph shall be equal to the aggregate reduction in such limits attributable to subparagraph (A) (as estimated by the Secretary).
(ii) Requirements
Subject to clause (iii), a hospital that receives an increase in the otherwise applicable resident limit under this subparagraph shall ensure, during the 5-year period beginning on the date of such increase, that—
(I) the number of full-time equivalent primary care residents, as defined in paragraph (5)(H) (as determined by the Secretary), excluding any additional positions under subclause (II), is not less than the average number of full-time equivalent primary care residents (as so determined) during the 3 most recent cost reporting periods ending prior to March 23, 2010; and
(II) not less than 75 percent of the positions attributable to such increase are in a primary care or general surgery residency (as determined by the Secretary).
The Secretary may determine whether a hospital has met the requirements under this clause during such 5-year period in such manner and at such time as the Secretary determines appropriate, including at the end of such 5-year period.
(iii) Redistribution of positions if hospital no longer meets certain requirements
In the case where the Secretary determines that a hospital described in clause (ii) does not meet either of the requirements under subclause (I) or (II) of such clause, the Secretary shall—
(I) reduce the otherwise applicable resident limit of the hospital by the amount by which such limit was increased under this paragraph; and
(II) provide for the distribution of positions attributable to such reduction in accordance with the requirements of this paragraph.
(C) Considerations in redistribution
In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B), the Secretary shall take into account—
(i) the demonstration likelihood of the hospital filling the positions made available under this paragraph within the first 3 cost reporting periods beginning on or after July 1, 2011, as determined by the Secretary; and
(ii) whether the hospital has an accredited rural training track (as described in paragraph (4)(H)(iv)).
(D) Priority for certain areas
In determining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B), subject to subparagraph (E), the Secretary shall distribute the increase to hospitals based on the following factors:
(i) Whether the hospital is located in a State with a resident-to-population ratio in the lowest quartile (as determined by the Secretary).
(ii) Whether the hospital is located in a State, a territory of the United States, or the District of Columbia that is among the top 10 States, territories, or Districts in terms of the ratio of—
(I) the total population of the State, territory, or District living in an area designated (under such section 332(a)(1)(A) 4) as a health professional shortage area (as of March 23, 2010); to
(II) the total population of the State, territory, or District (as determined by the Secretary based on the most recent available population data published by the Bureau of the Census).
(iii) Whether the hospital is located in a rural area (as defined in subsection (d)(2)(D)(ii)).
(E) Reservation of positions for certain hospitals
(i) In general
Subject to clause (ii), the Secretary shall reserve the positions available for distribution under this paragraph as follows:
(I) 70 percent of such positions for distribution to hospitals described in clause (i) of subparagraph (D).
(II) 30 percent of such positions for distribution to hospitals described in clause (ii) and (iii) of such subparagraph.
(ii) Exception if positions not redistributed by July 1, 2011
In the case where the Secretary does not distribute positions to hospitals in accordance with clause (i) by July 1, 2011, the Secretary shall distribute such positions to other hospitals in accordance with the considerations described in subparagraph (C) and the priority described in subparagraph (D).
(F) Limitation
A hospital may not receive more than 75 full-time equivalent additional residency positions under this paragraph.
(G) Application of per resident amounts for primary care and nonprimary care
With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital.
(H) Definitions
In this paragraph:
(i) Reference resident level
The term "reference resident level" means, with respect to a hospital, the highest resident level for any of the 3 most recent cost reporting periods (ending before March 23, 2010) of the hospital for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.
(ii) Resident level
The term "resident level" has the meaning given such term in paragraph (7)(C)(i).
(iii) Otherwise applicable resident limit
The term "otherwise applicable resident limit" means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph but taking into account paragraph (7)(A).
(I) Affiliation
The provisions of this paragraph shall be applied to hospitals which are members of the same affiliated group (as defined by the Secretary under paragraph (4)(H)(ii)) and the reference resident level for each such hospital shall be the reference resident level with respect to the cost reporting period that results in the smallest difference between the reference resident level and the otherwise applicable resident limit.
(9) Distribution of additional residency positions
(A) Additional residency positions
(i) In general
For fiscal year 2023, and for each succeeding fiscal year until the aggregate number of full-time equivalent residency positions distributed under this paragraph is equal to the aggregate number of such positions made available (as specified in clause (ii)(I)), the Secretary shall, subject to the succeeding provisions of this paragraph, increase the otherwise applicable resident limit for each qualifying hospital (as defined in subparagraph (F)) that submits a timely application under this subparagraph by such number as the Secretary may approve effective beginning July 1 of the fiscal year of the increase.
(ii) Number available for distribution
(I) Total number available
The aggregate number of such positions made available under this paragraph shall be equal to 1,000.
(II) Annual limit
The aggregate number of such positions so made available shall not exceed 200 for a fiscal year.
(iii) Process for distributing positions
(I) Rounds of applications
The Secretary shall initiate a separate round of applications for an increase under clause (i) for each fiscal year for which such an increase is to be provided.
(II) Timing
The Secretary shall notify hospitals of the number of positions distributed to the hospital under this paragraph as a result of an increase in the otherwise applicable resident limit by January 31 of the fiscal year of the increase. Such increase shall be effective beginning July 1 of such fiscal year.
(B) Distribution
For purposes of providing an increase in the otherwise applicable resident limit under subparagraph (A), the following shall apply:
(i) Considerations in distribution
In determining for which qualifying hospitals such an increase is provided under subparagraph (A), the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions made available under this paragraph within the first 5 training years beginning after the date the increase would be effective, as determined by the Secretary.
(ii) Minimum distribution for certain categories of hospitals
With respect to the aggregate number of such positions available for distribution under this paragraph, the Secretary shall distribute not less than 10 percent of such aggregate number to each of the following categories of hospitals:
(I) Hospitals that are located in a rural area (as defined in subsection (d)(2)(D)) or are treated as being located in a rural area pursuant to subsection (d)(8)(E).
(II) Hospitals in which the reference resident level of the hospital (as specified in subparagraph (F)(iii)) is greater than the otherwise applicable resident limit.
(III) Hospitals in States with—
(aa) new medical schools that received "Candidate School" status from the Liaison Committee on Medical Education or that received "Pre-Accreditation" status from the American Osteopathic Association Commission on Osteopathic College Accreditation on or after January 1, 2000, and that have achieved or continue to progress toward "Full Accreditation" status (as such term is defined by the Liaison Committee on Medical Education) or toward "Accreditation" status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation); or
(bb) additional locations and branch campuses established on or after January 1, 2000, by medical schools with "Full Accreditation" status (as such term is defined by the Liaison Committee on Medical Education) or "Accreditation" status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation).
(IV) Hospitals that serve areas designated as health professional shortage areas under
(C) Limitations
(i) In general
A hospital may not receive more than 25 additional full-time equivalent residency positions under this paragraph.
(ii) Prohibition on distribution to hospitals without an increase agreement
No increase in the otherwise applicable resident limit of a hospital may be made under this paragraph unless such hospital agrees to increase the total number of full-time equivalent residency positions under the approved medical residency training program of such hospital by the number of such positions made available by such increase under this paragraph.
(D) Application of per resident amounts for primary care and nonprimary care
With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital.
(E) Permitting facilities to apply aggregation rules
The Secretary shall permit hospitals receiving additional residency positions attributable to the increase provided under this paragraph to, beginning in the fifth year after the effective date of such increase, apply such positions to the limitation amount under paragraph (4)(F) that may be aggregated pursuant to paragraph (4)(H) among members of the same affiliated group.
(F) Definitions
In this paragraph:
(i) Otherwise applicable resident limit
The term "otherwise applicable resident limit" means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph but taking into account paragraphs (7)(A), (7)(B), (8)(A), and (8)(B).
(ii) Qualifying hospital
The term "qualifying hospital" means a hospital described in any of subclauses (I) through (IV) of subparagraph (B)(ii).
(iii) Reference resident level
The term "reference resident level" means, with respect to a hospital, the resident level for the most recent cost reporting period of the hospital ending on or before December 27, 2020, for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.
(iv) Resident level
The term "resident level" has the meaning given such term in paragraph (7)(C)(i).
(10) Distribution of additional residency positions in psychiatry and psychiatry subspecialties
(A) Additional residency positions
(i) In general
For fiscal year 2026, the Secretary shall, subject to the succeeding provisions of this paragraph, increase the otherwise applicable resident limit for each qualifying hospital (as defined in subparagraph (F)) that submits a timely application under this subparagraph by such number as the Secretary may approve effective beginning July 1 of the fiscal year of the increase.
(ii) Number available for distribution
The aggregate number of such positions made available under this paragraph shall be equal to 200.
(iii) Distribution for psychiatry or psychiatry subspecialty residencies
At least 100 of the positions made available under this paragraph shall be distributed for a psychiatry or psychiatry subspecialty residency (as defined in subparagraph (F)).
(iv) Timing
The Secretary shall notify hospitals of the number of positions distributed to the hospital under this paragraph as a result of an increase in the otherwise applicable resident limit by January 31 of the fiscal year of the increase. Such increase shall be effective beginning July 1 of such fiscal year.
(B) Distribution
For purposes of providing an increase in the otherwise applicable resident limit under subparagraph (A), the following shall apply:
(i) Considerations in distribution
In determining for which qualifying hospitals such an increase is provided under subparagraph (A), the Secretary shall take into account the demonstrated likelihood of the hospital filling the positions made available under this paragraph within the first 5 training years beginning after the date the increase would be effective, as determined by the Secretary.
(ii) Minimum distribution for certain categories of hospitals
With respect to the aggregate number of such positions available for distribution under this paragraph, the Secretary shall distribute not less than 10 percent of such aggregate number to each of the following categories of hospitals:
(I) Hospitals that are located in a rural area (as defined in
(II) Hospitals in which the reference resident level of the hospital (as specified in subparagraph (F)(iii)) is greater than the otherwise applicable resident limit.
(III) Hospitals in States with—
(aa) new medical schools that received "Candidate School" status from the Liaison Committee on Medical Education or that received "Pre-Accreditation" status from the American Osteopathic Association Commission on Osteopathic College Accreditation on or after January 1, 2000, and that have achieved or continue to progress toward "Full Accreditation" status (as such term is defined by the Liaison Committee on Medical Education) or toward "Accreditation" status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation); or
(bb) additional locations and branch campuses established on or after January 1, 2000, by medical schools with "Full Accreditation" status (as such term is defined by the Liaison Committee on Medical Education) or "Accreditation" status (as such term is defined by the American Osteopathic Association Commission on Osteopathic College Accreditation).
(IV) Hospitals that serve areas designated as health professional shortage areas under
(iii) Pro rata application
The Secretary shall ensure that each qualifying hospital that submits a timely application under subparagraph (A) receives at least 1 (or a fraction of 1) of the positions made available under this paragraph before any qualifying hospital receives more than 1 of such positions.
(C) Requirements
(i) Limitation
A hospital may not receive more than 10 additional full-time equivalent residency positions under this paragraph.
(ii) Prohibition on distribution to hospitals without an increase agreement
No increase in the otherwise applicable resident limit of a hospital may be made under this paragraph unless such hospital agrees to increase the total number of full-time equivalent residency positions under the approved medical residency training program of such hospital by the number of such positions made available by such increase under this paragraph.
(iii) Requirement for hospitals to expand programs
If a hospital that receives an increase in the otherwise applicable resident limit under this paragraph would be eligible for an adjustment to the otherwise applicable resident limit for participation in a new medical residency training program under section 413.79(e)(3) of title 42, Code of Federal Regulations (or any successor regulation), the hospital shall ensure that any positions made available under this paragraph are used to expand an existing program of the hospital, and not for participation in a new medical residency training program.
(D) Application of per resident amounts for nonprimary care
With respect to additional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per resident amounts are deemed to be equal to the hospital per resident amounts for nonprimary care computed under paragraph (2)(D) for that hospital.
(E) Permitting facilities to apply aggregation rules
The Secretary shall permit hospitals receiving additional residency positions attributable to the increase provided under this paragraph to, beginning in the fifth year after the effective date of such increase, apply such positions to the limitation amount under paragraph (4)(F) that may be aggregated pursuant to paragraph (4)(H) among members of the same affiliated group.
(F) Definitions
In this paragraph:
(i) Otherwise applicable resident limit
The term "otherwise applicable resident limit" means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined without regard to this paragraph but taking into account paragraphs (7)(A), (7)(B), (8)(A), (8)(B), and (9)(A).
(ii) Psychiatry or psychiatry subspecialty residency
The term "psychiatry or psychiatry subspecialty residency" means a residency in psychiatry as accredited by the Accreditation Council for Graduate Medical Education for the purpose of preventing, diagnosing, and treating mental health disorders.
(iii) Qualifying hospital
The term "qualifying hospital" means a hospital described in any of subclauses (I) through (IV) of subparagraph (B)(ii).
(iv) Reference resident level
The term "reference resident level" means, with respect to a hospital, the resident level for the most recent cost reporting period of the hospital ending on or before December 29, 2022, for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary.
(v) Resident level
The term "resident level" has the meaning given such term in paragraph (7)(C)(i).
(i) Avoiding duplicative payments to hospitals participating in rural demonstration programs
The Secretary shall reduce any payment amounts otherwise determined under this section to the extent necessary to avoid duplication of any payment made under section 4005(e) of the Omnibus Budget Reconciliation Act of 1987.
(j) Prospective payment for inpatient rehabilitation services
(1) Payment during transition period
(A) In general
Notwithstanding
(i) the TEFRA percentage (as defined in subparagraph (C)) of the amount that would have been paid under part A with respect to such costs if this subsection did not apply, and
(ii) the prospective payment percentage (as defined in subparagraph (C)) of the product of (I) the per unit payment rate established under this subsection for the fiscal year in which the payment unit of service occurs, and (II) the number of such payment units occurring in the cost reporting period.
(B) Fully implemented system
Notwithstanding
(C) TEFRA and prospective payment percentages specified
For purposes of subparagraph (A), for a cost reporting period beginning—
(i) on or after October 1, 2000, and before October 1, 2001, the "TEFRA percentage" is 662/3 percent and the "prospective payment percentage" is 331/3 percent; and
(ii) on or after October 1, 2001, and before October 1, 2002, the "TEFRA percentage" is 331/3 percent and the "prospective payment percentage" is 662/3 percent.
(D) Payment unit
For purposes of this subsection, the term "payment unit" means a discharge.
(E) Construction relating to transfer authority
Nothing in this subsection shall be construed as preventing the Secretary from providing for an adjustment to payments to take into account the early transfer of a patient from a rehabilitation facility to another site of care.
(F) Election to apply full prospective payment system
A rehabilitation facility may elect, not later than 30 days before its first cost reporting period for which the payment methodology under this subsection applies to the facility, to have payment made to the facility under this subsection under the provisions of subparagraph (B) (rather than subparagraph (A)) for each cost reporting period to which such payment methodology applies.
(2) Patient case mix groups
(A) Establishment
The Secretary shall establish—
(i) classes of patient discharges of rehabilitation facilities by functional-related groups (each in this subsection referred to as a "case mix group"), based on impairment, age, comorbidities, and functional capability of the patient and such other factors as the Secretary deems appropriate to improve the explanatory power of functional independence measure-function related groups; and
(ii) a method of classifying specific patients in rehabilitation facilities within these groups.
(B) Weighting factors
For each case mix group the Secretary shall assign an appropriate weighting which reflects the relative facility resources used with respect to patients classified within that group compared to patients classified within other groups.
(C) Adjustments for case mix
(i) In general
The Secretary shall from time to time adjust the classifications and weighting factors established under this paragraph as appropriate to reflect changes in treatment patterns, technology, case mix, number of payment units for which payment is made under this subchapter, and other factors which may affect the relative use of resources. Such adjustments shall be made in a manner so that changes in aggregate payments under the classification system are a result of real changes and are not a result of changes in coding that are unrelated to real changes in case mix.
(ii) Adjustment
Insofar as the Secretary determines that such adjustments for a previous fiscal year (or estimates that such adjustments for a future fiscal year) did (or are likely to) result in a change in aggregate payments under the classification system during the fiscal year that are a result of changes in the coding or classification of patients that do not reflect real changes in case mix, the Secretary shall adjust the per payment unit payment rate for subsequent years so as to eliminate the effect of such coding or classification changes.
(D) Data collection
The Secretary is authorized to require rehabilitation facilities that provide inpatient hospital services to submit such data as the Secretary deems necessary to establish and administer the prospective payment system under this subsection.
(3) Payment rate
(A) In general
The Secretary shall determine a prospective payment rate for each payment unit for which such rehabilitation facility is entitled to receive payment under this subchapter. Subject to subparagraph (B), such rate for payment units occurring during a fiscal year shall be based on the average payment per payment unit under this subchapter for inpatient operating and capital costs of rehabilitation facilities using the most recent data available (as estimated by the Secretary as of the date of establishment of the system) adjusted—
(i) by updating such per-payment-unit amount to the fiscal year involved by the weighted average of the applicable percentage increases provided under subsection (b)(3)(B)(ii) (for cost reporting periods beginning during the fiscal year) covering the period from the midpoint of the period for such data through the midpoint of fiscal year 2000 and by an increase factor (described in subparagraph (C)) specified by the Secretary for subsequent fiscal years up to the fiscal year involved;
(ii) by reducing such rates by a factor equal to the proportion of payments under this subsection (as estimated by the Secretary) based on prospective payment amounts which are additional payments described in paragraph (4) (relating to outlier and related payments);
(iii) for variations among rehabilitation facilities by area under paragraph (6);
(iv) by the weighting factors established under paragraph (2)(B); and
(v) by such other factors as the Secretary determines are necessary to properly reflect variations in necessary costs of treatment among rehabilitation facilities.
(B) Budget neutral rates
The Secretary shall establish the prospective payment amounts under this subsection for payment units during fiscal years 2001 and 2002 at levels such that, in the Secretary's estimation, the amount of total payments under this subsection for such fiscal years (including any payment adjustments pursuant to paragraphs (4) and (6) but not taking into account any payment adjustment resulting from an election permitted under paragraph (1)(F)) shall be equal to 98 percent for fiscal year 2001 and 100 percent for fiscal year 2002 of the amount of payments that would have been made under this subchapter during the fiscal years for operating and capital costs of rehabilitation facilities had this subsection not been enacted. In establishing such payment amounts, the Secretary shall consider the effects of the prospective payment system established under this subsection on the total number of payment units from rehabilitation facilities and other factors described in subparagraph (A).
(C) Increase factor
(i) In general
For purposes of this subsection for payment units in each fiscal year (beginning with fiscal year 2001), the Secretary shall establish an increase factor subject to clauses (ii) and (iii). Such factor shall be based on an appropriate percentage increase in a market basket of goods and services comprising services for which payment is made under this subsection, which may be the market basket percentage increase described in subsection (b)(3)(B)(iii). The increase factor to be applied under this subparagraph for each of fiscal years 2008 and 2009 shall be 0 percent.
(ii) Productivity and other adjustment
Subject to clause (iii), after establishing the increase factor described in clause (i) for a fiscal year, the Secretary shall reduce such increase factor—
(I) for fiscal year 2012 and each subsequent fiscal year, by the productivity adjustment described in subsection (b)(3)(B)(xi)(II); and
(II) for each of fiscal years 2010 through 2019, by the other adjustment described in subparagraph (D).
The application of this clause may result in the increase factor under this subparagraph being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.
(iii) Special rule for fiscal year 2018
The increase factor to be applied under this subparagraph for fiscal year 2018, after the application of clause (ii), shall be 1 percent.
(D) Other adjustment
For purposes of subparagraph (C)(ii)(II), the other adjustment described in this subparagraph is—
(i) for each of fiscal years 2010 and 2011, 0.25 percentage point;
(ii) for each of fiscal years 2012 and 2013, 0.1 percentage point;
(iii) for fiscal year 2014, 0.3 percentage point;
(iv) for each of fiscal years 2015 and 2016, 0.2 percentage point; and
(v) for each of fiscal years 2017, 2018, and 2019, 0.75 percentage point.
(4) Outlier and special payments
(A) Outliers
(i) In general
The Secretary may provide for an additional payment to a rehabilitation facility for patients in a case mix group, based upon the patient being classified as an outlier based on an unusual length of stay, costs, or other factors specified by the Secretary.
(ii) Payment based on marginal cost of care
The amount of such additional payment under clause (i) shall be determined by the Secretary and shall approximate the marginal cost of care beyond the cutoff point applicable under clause (i).
(iii) Total payments
The total amount of the additional payments made under this subparagraph for payment units in a fiscal year may not exceed 5 percent of the total payments projected or estimated to be made based on prospective payment rates for payment units in that year.
(B) Adjustment
The Secretary may provide for such adjustments to the payment amounts under this subsection as the Secretary deems appropriate to take into account the unique circumstances of rehabilitation facilities located in Alaska and Hawaii.
(5) Publication
The Secretary shall provide for publication in the Federal Register, on or before August 1 before each fiscal year (beginning with fiscal year 2001), of the classification and weighting factors for case mix groups under paragraph (2) for such fiscal year and a description of the methodology and data used in computing the prospective payment rates under this subsection for that fiscal year.
(6) Area wage adjustment
The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of rehabilitation facilities' costs which are attributable to wages and wage-related costs, of the prospective payment rates computed under paragraph (3) for area differences in wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the rehabilitation facility compared to the national average wage level for such facilities. Not later than October 1, 2001 (and at least every 36 months thereafter), the Secretary shall update the factor under the preceding sentence on the basis of information available to the Secretary (and updated as appropriate) of the wages and wage-related costs incurred in furnishing rehabilitation services. Any adjustments or updates made under this paragraph for a fiscal year shall be made in a manner that assures that the aggregated payments under this subsection in the fiscal year are not greater or less than those that would have been made in the year without such adjustment.
(7) Quality reporting
(A) Reduction in update for failure to report
(i) In general
For purposes of fiscal year 2014 and each subsequent fiscal year, in the case of a rehabilitation facility that does not submit data to the Secretary in accordance with subparagraphs (C) and (F) with respect to such a fiscal year, after determining the increase factor described in paragraph (3)(C), and after application of subparagraphs (C)(iii) and (D) of paragraph (3), the Secretary shall reduce such increase factor for payments for discharges occurring during such fiscal year by 2 percentage points.
(ii) Special rule
The application of this subparagraph may result in the increase factor described in paragraph (3)(C) being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.
(B) Noncumulative application
Any reduction under subparagraph (A) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year.
(C) Submission of quality data
Subject to subparagraph (G), for fiscal year 2014 and each subsequent fiscal year, each rehabilitation facility shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(D) Quality measures
(i) In general
Subject to clause (ii), any measure specified by the Secretary under this subparagraph must have been endorsed by the entity with a contract under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(iii) Time frame
Not later than October 1, 2012, the Secretary shall publish the measures selected under this subparagraph that will be applicable with respect to fiscal year 2014.
(E) Public availability of data submitted
(i) In general
The Secretary shall establish procedures for making data submitted under subparagraph (C) and subparagraph (F)(i) available to the public. Such procedures shall ensure that a rehabilitation facility has the opportunity to review the data that is to be made public with respect to the facility prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient settings in rehabilitation facilities on the Internet website of the Centers for Medicare & Medicaid Services.
(ii) Public recognition of rehabilitation innovation centers
Beginning not later than 18 months after January 5, 2023, the Secretary shall make publicly available on such Internet website, in addition to the information required to be reported on such website under clause (i), a list of all rehabilitation innovation centers, and shall update such list on such website not less frequently than biennially.
(iii) Rehabilitation innovation centers defined
For purposes of clause (ii), the term "rehabilitation innovation centers" means a rehabilitation facility that, as of the applicable date (as defined in clause (v)), is a rehabilitation facility described in clause (iv).
(iv) Rehabilitation facility described
(I) In general
Subject to subclause (II), a rehabilitation facility described in this clause is a rehabilitation facility that—
(aa) is classified as a rehabilitation facility under the IRF Rate Setting File for the Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019 (83 Fed. Reg. 38514), or any successor regulations that contain such information;
(bb) holds at least one Federal rehabilitation research and training designation for research projects on traumatic brain injury or spinal cord injury from the National Institute on Disability, Independent Living, and Rehabilitation Research at the Department of Health and Human Services, based on such data submitted to the Secretary by a facility, in a form, manner, and time frame specified by the Secretary;
(cc) submits to the Secretary a description of the clinical research enterprise of the facility and a summary of research activities of the facility that are supported by Federal agencies;
(dd) has a minimum Medicare estimated average weight per discharge of 1.20 for the most recent fiscal year for which such information is available according to the IRF Rate Setting File described in item (aa), or any successor regulations that contain such information; and
(ee) has a minimum teaching status of 0.075 for the most recent fiscal year for which such information is available according to the IRF Rate Setting File described in item (aa), or any successor regulations that contain such information.
(II) Waiver
The Secretary may, as determined appropriate, waive any of the requirements under items (aa) through (ee) of subclause (I).
(v) Applicable date defined
For purposes of clauses (iii) and (iv), the term "applicable date" means—
(I) with respect to the initial publication of a list under clause (ii), January 5, 2023; and
(II) with respect to the publication of an updated list under clause (ii), a date specified by the Secretary that is not more than one year prior to the date of such publication.
(vi) Implementation
Notwithstanding any other provision of law the Secretary may implement clauses (ii) through (v) by program instruction or otherwise.
(vii) Nonapplication of Paperwork Reduction Act
(F) Submission of additional data
(i) In general
For the fiscal year beginning on the specified application date (as defined in subsection (a)(2)(E) of
(ii) Standardized patient assessment data
For fiscal year 2019 and each subsequent fiscal year, in addition to such data described in clause (i), each rehabilitation facility shall submit to the Secretary standardized patient assessment data required under subsection (b)(1) of
(iii) Submission
Such data shall be submitted in the form and manner, and at the time, specified by the Secretary for purposes of this subparagraph.
(G) Non-duplication
To the extent data submitted under subparagraph (F) duplicates other data required to be submitted under subparagraph (C), the submission of such data under subparagraph (F) shall be in lieu of the submission of such data under subparagraph (C). The previous sentence shall not apply insofar as the Secretary determines it is necessary to avoid a delay in the implementation of
(8) Limitation on review
There shall be no administrative or judicial review under
(A) case mix groups, of the methodology for the classification of patients within such groups, and of the appropriate weighting factors thereof under paragraph (2),
(B) the prospective payment rates under paragraph (3),
(C) outlier and special payments under paragraph (4), and
(D) area wage adjustments under paragraph (6).
(k) Payment to nonhospital providers
(1) In general
For cost reporting periods beginning on or after October 1, 1997, the Secretary may establish rules for payment to qualified nonhospital providers for their direct costs of medical education, if those costs are incurred in the operation of an approved medical residency training program described in subsection (h). Such rules shall specify the amounts, form, and manner in which such payments will be made and the portion of such payments that will be made from each of the trust funds under this subchapter.
(2) Qualified nonhospital providers
For purposes of this subsection, the term "qualified nonhospital providers" means—
(A) a Federally 15 qualified health center, as defined in
(B) a rural health clinic, as defined in
(C) Medicare+Choice organizations; and
(D) such other providers (other than hospitals) as the Secretary determines to be appropriate.
(l) Payment for nursing and allied health education for managed care enrollees
(1) In general
For portions of cost reporting periods occurring in a year (beginning with 2000), the Secretary shall provide for an additional payment amount for any hospital that receives payments for the costs of approved educational activities for nurse and allied health professional training under
(2) Payment amount
The additional payment amount under this subsection for each hospital for portions of cost reporting periods occurring in a year shall be an amount specified by the Secretary in a manner consistent with the following:
(A) Determination of managed care enrollee payment ratio for graduate medical education payments
The Secretary shall estimate the ratio of payments for all hospitals for portions of cost reporting periods occurring in the year under subsection (h)(3)(D) to total direct graduate medical education payments estimated for such portions of periods under subsection (h)(3).
(B) Application to fee-for-service nursing and allied health education payments
(i) In general
Subject to clause (ii), such ratio shall be applied to the Secretary's estimate of total payments for nursing and allied health education determined under
(ii) Exception to annual limitation for each of 2010 through 2019
For each of 2010 through 2019, the limitation under clause (i) on the total amount of additional payments for nursing and allied health education to be distributed to hospitals under this subsection for portions of cost reporting periods occurring in the year shall not apply to such payments made in such year to those hospitals that, as of December 29, 2022, are operating a school of nursing, a school of allied health, or a school of nursing and allied health.
(C) Application to hospital
The amount of payment under this subsection to a hospital for portions of cost reporting periods occurring in a year is equal to the total amount of payments determined under subparagraph (B) for the year multiplied by the ratio of—
(i) the product of (I) the Secretary's estimate of the ratio of the amount of payments made under
(ii) the sum of the products determined under clause (i) for such cost reporting periods.
(m) Prospective payment for long-term care hospitals
(1) Reference to establishment and implementation of system
For provisions related to the establishment and implementation of a prospective payment system for payments under this subchapter for inpatient hospital services furnished by a long-term care hospital described in subsection (d)(1)(B)(iv), see section 123 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 and section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000.
(2) Update for rate year 2008
In implementing the system described in paragraph (1) for discharges occurring during the rate year ending in 2008 for a hospital, the base rate for such discharges for the hospital shall be the same as the base rate for discharges for the hospital occurring during the rate year ending in 2007.
(3) Implementation for rate year 2010 and subsequent years
(A) In general
Subject to subparagraph (C), in implementing the system described in paragraph (1) for rate year 2010 and each subsequent rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, shall be reduced—
(i) for rate year 2012 and each subsequent rate year, by the productivity adjustment described in subsection (b)(3)(B)(xi)(II); and
(ii) for each of rate years 2010 through 2019, by the other adjustment described in paragraph (4).
(B) Special rule
The application of this paragraph may result in such annual update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year.
(C) Additional special rule
For fiscal year 2018, the annual update under subparagraph (A) for the fiscal year, after application of clauses (i) and (ii) of subparagraph (A), shall be 1 percent.
(4) Other adjustment
For purposes of paragraph (3)(A)(ii), the other adjustment described in this paragraph is—
(A) for rate year 2010, 0.25 percentage point;
(B) for rate year 2011, 0.50 percentage point;
(C) for each of the rate years beginning in 2012 and 2013, 0.1 percentage point;
(D) for rate year 2014, 0.3 percentage point;
(E) for each of rate years 2015 and 2016, 0.2 percentage point; and
(F) for each of rate years 2017, 2018, and 2019, 0.75 percentage point.
(5) Quality reporting
(A) Reduction in update for failure to report
(i) In general
Under the system described in paragraph (1), for rate year 2014 and each subsequent rate year, in the case of a long-term care hospital that does not submit data to the Secretary in accordance with subparagraphs (C) and (F) with respect to such a rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, and after application of paragraph (3), shall be reduced by 2 percentage points.
(ii) Special rule
The application of this subparagraph may result in such annual update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year.
(B) Noncumulative application
Any reduction under subparagraph (A) shall apply only with respect to the rate year involved and the Secretary shall not take into account such reduction in computing the payment amount under the system described in paragraph (1) for a subsequent rate year.
(C) Submission of quality data
Subject to subparagraph (G), for rate year 2014 and each subsequent rate year, each long-term care hospital shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(D) Quality measures
(i) In general
Subject to clause (ii), any measure specified by the Secretary under this subparagraph must have been endorsed by the entity with a contract under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(iii) Time frame
Not later than October 1, 2012, the Secretary shall publish the measures selected under this subparagraph that will be applicable with respect to rate year 2014.
(iv) Additional quality measures
Not later than October 1, 2015, the Secretary shall establish a functional status quality measure for change in mobility among inpatients requiring ventilator support.
(E) Public availability of data submitted
The Secretary shall establish procedures for making data submitted under subparagraph (C) and subparagraph (F)(i) available to the public. Such procedures shall ensure that a long-term care hospital has the opportunity to review the data that is to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient settings in long-term care hospitals on the Internet website of the Centers for Medicare & Medicaid Services.
(F) Submission of additional data
(i) In general
For the rate year beginning on the specified application date (as defined in subsection (a)(2)(E) of
(ii) Standardized patient assessment data
For rate year 2019 and each subsequent rate year, in addition to such data described in clause (i), each long-term care hospital (other than a hospital classified under subsection (d)(1)(B)(vi)) shall submit to the Secretary standardized patient assessment data required under subsection (b)(1) of
(iii) Submission
Such data shall be submitted in the form and manner, and at the time, specified by the Secretary for purposes of this subparagraph.
(G) Non-duplication
To the extent data submitted under subparagraph (F) duplicates other data required to be submitted under subparagraph (C), the submission of such data under subparagraph (F) shall be in lieu of the submission of such data under subparagraph (C). The previous sentence shall not apply insofar as the Secretary determines it is necessary to avoid a delay in the implementation of
(6) Application of site neutral IPPS payment rate in certain cases
(A) General application of site neutral IPPS payment amount for discharges failing to meet applicable criteria
(i) In general
For a discharge in cost reporting periods beginning on or after October 1, 2015, except as provided in clause (ii) and subparagraphs (C), (E), (F), and (G), payment under this subchapter to a long-term care hospital for inpatient hospital services shall be made at the applicable site neutral payment rate (as defined in subparagraph (B)).
(ii) Exception for certain discharges meeting criteria
Clause (i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) for a discharge if—
(I) the discharge meets the ICU criterion under clause (iii) or the ventilator criterion under clause (iv); and
(II) the discharge does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation.
(iii) Intensive care unit (ICU) criterion
(I) In general
The criterion specified in this clause (in this paragraph referred to as the "ICU criterion"), for a discharge from a long-term care hospital, is that the stay in the long-term care hospital ending with such discharge was immediately preceded by a discharge from a stay in a subsection (d) hospital that included at least 3 days in an intensive care unit (ICU), as determined by the Secretary.
(II) Determining ICU days
In determining intensive care unit days under subclause (I), the Secretary shall use data from revenue center codes 020x or 021x (or such successor codes as the Secretary may establish).
(iv) Ventilator criterion
The criterion specified in this clause (in this paragraph referred to as the "ventilator criterion"), for a discharge from a long-term care hospital, is that—
(I) the stay in the long-term care hospital ending with such discharge was immediately preceded by a discharge from a stay in a subsection (d) hospital; and
(II) the individual discharged was assigned to a Medicare-Severity-Long-Term-Care-Diagnosis-Related-Group (MS–LTC–DRG) based on the receipt of ventilator services of at least 96 hours.
(B) Applicable site neutral payment rate defined
(i) In general
In this paragraph, the term "applicable site neutral payment rate" means—
(I) for discharges in cost reporting periods beginning during fiscal years 2016 through 2019, the blended payment rate specified in clause (iii); and
(II) for discharges in cost reporting periods beginning during fiscal year 2020 or a subsequent fiscal year, the site neutral payment rate (as defined in clause (ii)).
(ii) Site neutral payment rate defined
Subject to clause (iv), in this paragraph, the term "site neutral payment rate" means the lower of—
(I) the IPPS comparable per diem amount determined under paragraph (d)(4) of section 412.529 of title 42, Code of Federal Regulations, including any applicable outlier payments under section 412.525 of such title; or
(II) 100 percent of the estimated cost for the services involved.
(iii) Blended payment rate
The blended payment rate specified in this clause, for a long-term care hospital for inpatient hospital services for a discharge, is comprised of—
(I) half of the site neutral payment rate (as defined in clause (ii)) for the discharge; and
(II) half of the payment rate that would otherwise be applicable to such discharge without regard to this paragraph, as determined by the Secretary.
(iv) Adjustment
For each of fiscal years 2018 through 2026, the amount that would otherwise apply under clause (ii)(I) for the year (determined without regard to this clause) shall be reduced by 4.6 percent.
(C) Limiting payment for all hospital discharges to site neutral payment rate for hospitals failing to meet applicable LTCH discharge thresholds
(i) Notice of LTCH discharge payment percentage
For cost reporting periods beginning during or after fiscal year 2016, the Secretary shall inform each long-term care hospital of its LTCH discharge payment percentage (as defined in clause (iv)) for such period.
(ii) Limitation
For cost reporting periods beginning during or after fiscal year 2020, if the Secretary determines for a long-term care hospital that its LTCH discharge payment percentage for the period is not at least 50 percent—
(I) the Secretary shall inform the hospital of such fact; and
(II) subject to clause (iii), for all discharges in the hospital in each succeeding cost reporting period, the payment amount under this subsection shall be the payment amount that would apply under subsection (d) for the discharge if the hospital were a subsection (d) hospital.
(iii) Process for reinstatement
The Secretary shall establish a process whereby a long-term care hospital may seek to and have the provisions of subclause (II) of clause (ii) discontinued with respect to that hospital.
(iv) LTCH discharge payment percentage
In this subparagraph, the term "LTCH discharge payment percentage" means, with respect to a long-term care hospital for a cost reporting period beginning during or after fiscal year 2020, the ratio (expressed as a percentage) of—
(I) the number of Medicare fee-for-service discharges for such hospital and period for which payment is not made at the site neutral payment rate, to
(II) the total number of Medicare fee-for-service discharges for such hospital and period.
(D) Inclusion of subsection (d) Puerto Rico hospitals
In this paragraph, any reference in this paragraph to a subsection (d) hospital shall be deemed to include a reference to a subsection (d) Puerto Rico hospital.
(E) Temporary exception for certain severe wound discharges from certain long-term care hospitals
(i) In general
In the case of a discharge occurring prior to January 1, 2017, subparagraph (A)(i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) if such discharge—
(I) is from a long-term care hospital that is—
(aa) identified by the last sentence of subsection (d)(1)(B); and
(bb) located in a rural area (as defined in subsection (d)(2)(D)) or treated as being so located pursuant to subsection (d)(8)(E); and
(II) the individual discharged has a severe wound.
(ii) Severe wound defined
In this subparagraph, the term "severe wound" means a stage 3 wound, stage 4 wound, unstageable wound, non-healing surgical wound, infected wound, fistula, osteomyelitis, or wound with morbid obesity, as identified in the claim from the long-term care hospital.
(F) Temporary exception for certain spinal cord specialty hospitals
For discharges in cost reporting periods beginning during fiscal years 2018 and 2019, subparagraph (A)(i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) if such discharge is from a long-term care hospital that meets each of the following requirements:
(i) Not-for-profit
The long-term care hospital was a not-for-profit long-term care hospital on June 1, 2014, as determined by cost report data.
(ii) Primarily providing treatment for catastrophic spinal cord or acquired brain injuries or other paralyzing neuromuscular conditions
Of the discharges in calendar year 2013 from the long-term care hospital for which payment was made under this section, at least 50 percent were classified under MS–LTCH–DRGs 28, 29, 52, 57, 551, 573, and 963.
(iii) Significant out-of-state admissions
(I) In general
The long-term care hospital discharged inpatients (including both individuals entitled to, or enrolled for, benefits under this subchapter and individuals not so entitled or enrolled) during fiscal year 2014 who had been admitted from at least 20 of the 50 States, determined by the States of residency of such inpatients and based on such data submitted by the hospital to the Secretary as the Secretary may require.
(II) Implementation
Notwithstanding any other provision of law, the Secretary may implement subclause (I) by program instruction or otherwise.
(III) Non-application of Paperwork Reduction Act
(G) Additional temporary exception for certain severe wound discharges from certain long-term care hospitals
(i) In general
For a discharge occurring in a cost reporting period beginning during fiscal year 2018, subparagraph (A)(i) shall not apply (and payment shall be made to a long-term care hospital without regard to this paragraph) if such discharge—
(I) is from a long-term care hospital identified by the last sentence of subsection (d)(1)(B);
(II) is classified under MS–LTCH–DRG 602, 603, 539, or 540; and
(III) is with respect to an individual treated by a long-term care hospital for a severe wound.
(ii) Severe wound defined
In this subparagraph, the term "severe wound" means a wound which is a stage 3 wound, stage 4 wound, unstageable wound, non-healing surgical wound, or fistula as identified in the claim from the long-term care hospital.
(iii) Wound defined
In this subparagraph, the term "wound" means an injury involving division of tissue or rupture of the integument or mucous membrane with exposure to the external environment.
(7) Treatment of high cost outlier payments
(A) Adjustment to the standard Federal payment rate for estimated high cost outlier payments
Under the system described in paragraph (1), for fiscal years beginning on or after October 1, 2017, the Secretary shall reduce the standard Federal payment rate as if the estimated aggregate amount of high cost outlier payments for standard Federal payment rate discharges for each such fiscal year would be equal to 8 percent of estimated aggregate payments for standard Federal payment rate discharges for each such fiscal year.
(B) Limitation on high cost outlier payment amounts
Notwithstanding subparagraph (A), the Secretary shall set the fixed loss amount for high cost outlier payments such that the estimated aggregate amount of high cost outlier payments made for standard Federal payment rate discharges for fiscal years beginning on or after October 1, 2017, shall be equal to 99.6875 percent of 8 percent of estimated aggregate payments for standard Federal payment rate discharges for each such fiscal year.
(C) Waiver of budget neutrality
Any reduction in payments resulting from the application of subparagraph (B) shall not be taken into account in applying any budget neutrality provision under such system.
(D) No effect on site neutral high cost outlier payment rate
This paragraph shall not apply with respect to the computation of the applicable site neutral payment rate under paragraph (6).
(n) Incentives for adoption and meaningful use of certified EHR technology
(1) In general
Subject to the succeeding provisions of this subsection, with respect to inpatient hospital services furnished by an eligible hospital during a payment year (as defined in paragraph (2)(G)), if the eligible hospital is a meaningful EHR user (as determined under paragraph (3)) for the EHR reporting period with respect to such year, in addition to the amount otherwise paid under this section, there also shall be paid to the eligible hospital, from the Federal Hospital Insurance Trust Fund established under
(2) Payment amount
(A) In general
Subject to the succeeding subparagraphs of this paragraph, the applicable amount specified in this subparagraph for an eligible hospital for a payment year is equal to the product of the following:
(i) Initial amount
The sum of—
(I) the base amount specified in subparagraph (B); plus
(II) the discharge related amount specified in subparagraph (C) for a 12-month period selected by the Secretary with respect to such payment year.
(ii) Medicare share
The Medicare share as specified in subparagraph (D) for the eligible hospital for a period selected by the Secretary with respect to such payment year.
(iii) Transition factor
The transition factor specified in subparagraph (E) for the eligible hospital for the payment year.
(B) Base amount
The base amount specified in this subparagraph is $2,000,000.
(C) Discharge related amount
The discharge related amount specified in this subparagraph for a 12-month period selected by the Secretary shall be determined as the sum of the amount, estimated based upon total discharges for the eligible hospital (regardless of any source of payment) for the period, for each discharge up to the 23,000th discharge as follows:
(i) For the first through 1,149th discharge, $0.
(ii) For the 1,150th through the 23,000th discharge, $200.
(iii) For any discharge greater than the 23,000th, $0.
(D) Medicare share
The Medicare share specified under this subparagraph for an eligible hospital for a period selected by the Secretary for a payment year is equal to the fraction—
(i) the numerator of which is the sum (for such period and with respect to the eligible hospital) of—
(I) the estimated number of inpatient-bed-days (as established by the Secretary) which are attributable to individuals with respect to whom payment may be made under part A; and
(II) the estimated number of inpatient-bed-days (as so established) which are attributable to individuals who are enrolled with a Medicare Advantage organization under part C; and
(ii) the denominator of which is the product of—
(I) the estimated total number of inpatient-bed-days with respect to the eligible hospital during such period; and
(II) the estimated total amount of the eligible hospital's charges during such period, not including any charges that are attributable to charity care (as such term is used for purposes of hospital cost reporting under this subchapter), divided by the estimated total amount of the hospital's charges during such period.
Insofar as the Secretary determines that data are not available on charity care necessary to calculate the portion of the formula specified in clause (ii)(II), the Secretary shall use data on uncompensated care and may adjust such data so as to be an appropriate proxy for charity care including a downward adjustment to eliminate bad debt data from uncompensated care data. In the absence of the data necessary, with respect to a hospital, for the Secretary to compute the amount described in clause (ii)(II), the amount under such clause shall be deemed to be 1. In the absence of data, with respect to a hospital, necessary to compute the amount described in clause (i)(II), the amount under such clause shall be deemed to be 0.
(E) Transition factor specified
(i) In general
Subject to clause (ii), the transition factor specified in this subparagraph for an eligible hospital for a payment year is as follows:
(I) For the first payment year for such hospital, 1.
(II) For the second payment year for such hospital, ¾.
(III) For the third payment year for such hospital, ½.
(IV) For the fourth payment year for such hospital, ¼.
(V) For any succeeding payment year for such hospital, 0.
(ii) Phase down for eligible hospitals first adopting EHR after 2013
If the first payment year for an eligible hospital is after 2013, then the transition factor specified in this subparagraph for a payment year for such hospital is the same as the amount specified in clause (i) for such payment year for an eligible hospital for which the first payment year is 2013. If the first payment year for an eligible hospital is after 2015 then the transition factor specified in this subparagraph for such hospital and for such year and any subsequent year shall be 0.
(F) Form of payment
The payment under this subsection for a payment year may be in the form of a single consolidated payment or in the form of such periodic installments as the Secretary may specify.
(G) Payment year defined
(i) In general
For purposes of this subsection, the term "payment year" means a fiscal year beginning with fiscal year 2011.
(ii) First, second, etc. payment year
The term "first payment year" means, with respect to inpatient hospital services furnished by an eligible hospital, the first fiscal year for which an incentive payment is made for such services under this subsection. The terms "second payment year", "third payment year", and "fourth payment year" mean, with respect to an eligible hospital, each successive year immediately following the first payment year for that hospital.
(3) Meaningful EHR user
(A) In general
For purposes of paragraph (1), an eligible hospital shall be treated as a meaningful EHR user for an EHR reporting period for a payment year (or, for purposes of subsection (b)(3)(B)(ix), for an EHR reporting period under such subsection for a fiscal year) if each of the following requirements are met:
(i) Meaningful use of certified EHR technology
The eligible hospital demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (C)(i), that during such period the hospital is using certified EHR technology in a meaningful manner.
(ii) Information exchange
The eligible hospital demonstrates to the satisfaction of the Secretary, in accordance with subparagraph (C)(i), that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination, and the hospital demonstrates (through a process specified by the Secretary, such as the use of an attestation) that the hospital has not knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability of the certified EHR technology.
(iii) Reporting on measures using EHR
Subject to subparagraph (B)(ii) and using such certified EHR technology, the eligible hospital submits information for such period, in a form and manner specified by the Secretary, on such clinical quality measures and such other measures as selected by the Secretary under subparagraph (B)(i).
The Secretary shall seek to improve the use of electronic health records and health care quality over time.
(B) Reporting on measures
(i) Selection
The Secretary shall select measures for purposes of subparagraph (A)(iii) but only consistent with the following:
(I) The Secretary shall provide preference to clinical quality measures that have been selected for purposes of applying subsection (b)(3)(B)(viii) or that have been endorsed by the entity with a contract with the Secretary under
(II) Prior to any measure (other than a clinical quality measure that has been selected for purposes of applying subsection (b)(3)(B)(viii)) being selected under this subparagraph, the Secretary shall publish in the Federal Register such measure and provide for a period of public comment on such measure.
(ii) Limitations
The Secretary may not require the electronic reporting of information on clinical quality measures under subparagraph (A)(iii) unless the Secretary has the capacity to accept the information electronically, which may be on a pilot basis.
(iii) Coordination of reporting of information
In selecting such measures, and in establishing the form and manner for reporting measures under subparagraph (A)(iii), the Secretary shall seek to avoid redundant or duplicative reporting with reporting otherwise required, including reporting under subsection (b)(3)(B)(viii).
(C) Demonstration of meaningful use of certified EHR technology and information exchange
(i) In general
An eligible hospital may satisfy the demonstration requirement of clauses (i) and (ii) of subparagraph (A) through means specified by the Secretary, which may include—
(I) an attestation;
(II) the submission of claims with appropriate coding (such as a code indicating that inpatient care was documented using certified EHR technology);
(III) a survey response;
(IV) reporting under subparagraph (A)(iii); and
(V) other means specified by the Secretary.
(ii) Use of part D data
Notwithstanding
(4) Application
(A) Limitations on review
There shall be no administrative or judicial review under
(i) the methodology and standards for determining payment amounts under this subsection and payment adjustments under subsection (b)(3)(B)(ix), including selection of periods under paragraph (2) for determining, and making estimates or using proxies of, discharges under paragraph (2)(C) and inpatient-bed-days, hospital charges, charity charges, and Medicare share under paragraph (2)(D);
(ii) the methodology and standards for determining a meaningful EHR user under paragraph (3), including selection of measures under paragraph (3)(B), specification of the means of demonstrating meaningful EHR use under paragraph (3)(C), and the hardship exception under subsection (b)(3)(B)(ix)(II); and
(iii) the specification of EHR reporting periods under paragraph (6)(B) 16 and the selection of the form of payment under paragraph (2)(F).
(B) Posting on website
The Secretary shall post on the Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names of the eligible hospitals that are meaningful EHR users under this subsection or subsection (b)(3)(B)(ix) (and a list of the names of critical access hospitals to which paragraph (3) or (4) of
(5) Certified EHR technology defined
The term "certified EHR technology" has the meaning given such term in
(6) Definitions
For purposes of this subsection:
(A) EHR reporting period
The term "EHR reporting period" means, with respect to a payment year, any period (or periods) as specified by the Secretary.
(B) Eligible hospital
The term "eligible hospital" means a hospital that is a subsection (d) hospital or a subsection (d) Puerto Rico hospital.
(o) Hospital value-based purchasing program
(1) Establishment
(A) In general
Subject to the succeeding provisions of this subsection, the Secretary shall establish a hospital value-based purchasing program (in this subsection referred to as the "Program") under which value-based incentive payments are made in a fiscal year to hospitals that meet the performance standards under paragraph (3) for the performance period for such fiscal year (as established under paragraph (4)).
(B) Program to begin in fiscal year 2013
The Program shall apply to payments for discharges occurring on or after October 1, 2012.
(C) Applicability of Program to hospitals
(i) In general
For purposes of this subsection, subject to clause (ii), the term "hospital" means a subsection (d) hospital (as defined in subsection (d)(1)(B)).
(ii) Exclusions
The term "hospital" shall not include, with respect to a fiscal year, a hospital—
(I) that is subject to the payment reduction under subsection (b)(3)(B)(viii)(I) for such fiscal year;
(II) for which, during the performance period for such fiscal year, the Secretary has cited deficiencies that pose immediate jeopardy to the health or safety of patients;
(III) for which there are not a minimum number (as determined by the Secretary) of measures that apply to the hospital for the performance period for such fiscal year; or
(IV) for which there are not a minimum number (as determined by the Secretary) of cases for the measures that apply to the hospital for the performance period for such fiscal year.
(iii) Independent analysis
For purposes of determining the minimum numbers under subclauses (III) and (IV) of clause (ii), the Secretary shall have conducted an independent analysis of what numbers are appropriate.
(iv) Exemption
In the case of a hospital that is paid under
(2) Measures
(A) In general
The Secretary shall select measures, other than measures of readmissions, for purposes of the Program. Such measures shall be selected from the measures specified under subsection (b)(3)(B)(viii).
(B) Requirements
(i) For fiscal year 2013
For value-based incentive payments made with respect to discharges occurring during fiscal year 2013, the Secretary shall ensure the following:
(I) Conditions or procedures
Measures are selected under subparagraph (A) that cover at least the following 5 specific conditions or procedures:
(aa) Acute myocardial infarction (AMI).
(bb) Heart failure.
(cc) Pneumonia.
(dd) Surgeries, as measured by the Surgical Care Improvement Project (formerly referred to as "Surgical Infection Prevention" for discharges occurring before July 2006).
(ee) Healthcare-associated infections, as measured by the prevention metrics and targets established in the HHS Action Plan to Prevent Healthcare-Associated Infections (or any successor plan) of the Department of Health and Human Services.
(II) HCAHPS
Measures selected under subparagraph (A) shall be related to the Hospital Consumer Assessment of Healthcare Providers and Systems survey (HCAHPS).
(ii) Inclusion of efficiency measures
For value-based incentive payments made with respect to discharges occurring during fiscal year 2014 or a subsequent fiscal year, the Secretary shall ensure that measures selected under subparagraph (A) include efficiency measures, including measures of "Medicare spending per beneficiary". Such measures shall be adjusted for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appropriate.
(iii) HCAHPS pain questions
The Secretary may not include under subparagraph (A) a measure that is based on the questions appearing on the Hospital Consumer Assessment of Healthcare Providers and Systems survey in 2018 or 2019 about communication by hospital staff with an individual about the individual's pain.
(C) Limitations
(i) Time requirement for prior reporting and notice
The Secretary may not select a measure under subparagraph (A) for use under the Program with respect to a performance period for a fiscal year (as established under paragraph (4)) unless such measure has been specified under subsection (b)(3)(B)(viii) and included on the Hospital Compare Internet website for at least 1 year prior to the beginning of such performance period.
(ii) Measure not applicable unless hospital furnishes services appropriate to the measure
A measure selected under subparagraph (A) shall not apply to a hospital if such hospital does not furnish services appropriate to such measure.
(D) Replacing measures
Subclause (VI) of subsection (b)(3)(B)(viii) shall apply to measures selected under subparagraph (A) in the same manner as such subclause applies to measures selected under such subsection.
(3) Performance standards
(A) Establishment
The Secretary shall establish performance standards with respect to measures selected under paragraph (2) for a performance period for a fiscal year (as established under paragraph (4)).
(B) Achievement and improvement
The performance standards established under subparagraph (A) shall include levels of achievement and improvement.
(C) Timing
The Secretary shall establish and announce the performance standards under subparagraph (A) not later than 60 days prior to the beginning of the performance period for the fiscal year involved.
(D) Considerations in establishing standards
In establishing performance standards with respect to measures under this paragraph, the Secretary shall take into account appropriate factors, such as—
(i) practical experience with the measures involved, including whether a significant proportion of hospitals failed to meet the performance standard during previous performance periods;
(ii) historical performance standards;
(iii) improvement rates; and
(iv) the opportunity for continued improvement.
(4) Performance period
For purposes of the Program, the Secretary shall establish the performance period for a fiscal year. Such performance period shall begin and end prior to the beginning of such fiscal year.
(5) Hospital performance score
(A) In general
Subject to subparagraph (B), the Secretary shall develop a methodology for assessing the total performance of each hospital based on performance standards with respect to the measures selected under paragraph (2) for a performance period (as established under paragraph (4)). Using such methodology, the Secretary shall provide for an assessment (in this subsection referred to as the "hospital performance score") for each hospital for each performance period.
(B) Application
(i) Appropriate distribution
The Secretary shall ensure that the application of the methodology developed under subparagraph (A) results in an appropriate distribution of value-based incentive payments under paragraph (6) among hospitals achieving different levels of hospital performance scores, with hospitals achieving the highest hospital performance scores receiving the largest value-based incentive payments.
(ii) Higher of achievement or improvement
The methodology developed under subparagraph (A) shall provide that the hospital performance score is determined using the higher of its achievement or improvement score for each measure.
(iii) Weights
The methodology developed under subparagraph (A) shall provide for the assignment of weights for categories of measures as the Secretary determines appropriate.
(iv) No minimum performance standard
The Secretary shall not set a minimum performance standard in determining the hospital performance score for any hospital.
(v) Reflection of measures applicable to the hospital
The hospital performance score for a hospital shall reflect the measures that apply to the hospital.
(6) Calculation of value-based incentive payments
(A) In general
In the case of a hospital that the Secretary determines meets (or exceeds) the performance standards under paragraph (3) for the performance period for a fiscal year (as established under paragraph (4)), the Secretary shall increase the base operating DRG payment amount (as defined in paragraph (7)(D)), as determined after application of paragraph (7)(B)(i), for a hospital for each discharge occurring in such fiscal year by the value-based incentive payment amount.
(B) Value-based incentive payment amount
The value-based incentive payment amount for each discharge of a hospital in a fiscal year shall be equal to the product of—
(i) the base operating DRG payment amount (as defined in paragraph (7)(D)) for the discharge for the hospital for such fiscal year; and
(ii) the value-based incentive payment percentage specified under subparagraph (C) for the hospital for such fiscal year.
(C) Value-based incentive payment percentage
(i) In general
The Secretary shall specify a value-based incentive payment percentage for a hospital for a fiscal year.
(ii) Requirements
In specifying the value-based incentive payment percentage for each hospital for a fiscal year under clause (i), the Secretary shall ensure that—
(I) such percentage is based on the hospital performance score of the hospital under paragraph (5); and
(II) the total amount of value-based incentive payments under this paragraph to all hospitals in such fiscal year is equal to the total amount available for value-based incentive payments for such fiscal year under paragraph (7)(A), as estimated by the Secretary.
(7) Funding for value-based incentive payments
(A) Amount
The total amount available for value-based incentive payments under paragraph (6) for all hospitals for a fiscal year shall be equal to the total amount of reduced payments for all hospitals under subparagraph (B) for such fiscal year, as estimated by the Secretary.
(B) Adjustment to payments
(i) In general
The Secretary shall reduce the base operating DRG payment amount (as defined in subparagraph (D)) for a hospital for each discharge in a fiscal year (beginning with fiscal year 2013) by an amount equal to the applicable percent (as defined in subparagraph (C)) of the base operating DRG payment amount for the discharge for the hospital for such fiscal year. The Secretary shall make such reductions for all hospitals in the fiscal year involved, regardless of whether or not the hospital has been determined by the Secretary to have earned a value-based incentive payment under paragraph (6) for such fiscal year.
(ii) No effect on other payments
Payments described in items (aa) and (bb) of subparagraph (D)(i)(II) for a hospital shall be determined as if this subsection had not been enacted.
(C) Applicable percent defined
For purposes of subparagraph (B), the term "applicable percent" means—
(i) with respect to fiscal year 2013, 1.0 percent;
(ii) with respect to fiscal year 2014, 1.25 percent;
(iii) with respect to fiscal year 2015, 1.5 percent;
(iv) with respect to fiscal year 2016, 1.75 percent; and
(v) with respect to fiscal year 2017 and succeeding fiscal years, 2 percent.
(D) Base operating DRG payment amount defined
(i) In general
Except as provided in clause (ii), in this subsection, the term "base operating DRG payment amount" means, with respect to a hospital for a fiscal year—
(I) the payment amount that would otherwise be made under subsection (d) (determined without regard to subsection (q)) for a discharge if this subsection did not apply; reduced by
(II) any portion of such payment amount that is attributable to—
(aa) payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of subsection (d); and
(bb) such other payments under subsection (d) determined appropriate by the Secretary.
(ii) Special rules for certain hospitals
(I) Sole community hospitals and medicare-dependent, small rural hospitals
In the case of a medicare-dependent, small rural hospital (with respect to discharges occurring during fiscal year 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the payment amount that would otherwise be made under subsection (d) shall be determined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5).
(II) Hospitals paid under section 1395f
In the case of a hospital that is paid under
(8) Announcement of net result of adjustments
Under the Program, the Secretary shall, not later than 60 days prior to the fiscal year involved, inform each hospital of the adjustments to payments to the hospital for discharges occurring in such fiscal year under paragraphs (6) and (7)(B)(i).
(9) No effect in subsequent fiscal years
The value-based incentive payment under paragraph (6) and the payment reduction under paragraph (7)(B)(i) shall each apply only with respect to the fiscal year involved, and the Secretary shall not take into account such value-based incentive payment or payment reduction in making payments to a hospital under this section in a subsequent fiscal year.
(10) Public reporting
(A) Hospital specific information
(i) In general
The Secretary shall make information available to the public regarding the performance of individual hospitals under the Program, including—
(I) the performance of the hospital with respect to each measure that applies to the hospital;
(II) the performance of the hospital with respect to each condition or procedure; and
(III) the hospital performance score assessing the total performance of the hospital.
(ii) Opportunity to review and submit corrections
The Secretary shall ensure that a hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under clause (i) prior to such information being made public.
(iii) Website
Such information shall be posted on the Hospital Compare Internet website in an easily understandable format.
(B) Aggregate information
The Secretary shall periodically post on the Hospital Compare Internet website aggregate information on the Program, including—
(i) the number of hospitals receiving value-based incentive payments under paragraph (6) and the range and total amount of such value-based incentive payments; and
(ii) the number of hospitals receiving less than the maximum value-based incentive payment available to the hospital for the fiscal year involved and the range and amount of such payments.
(11) Implementation
(A) Appeals
The Secretary shall establish a process by which hospitals may appeal the calculation of a hospital's performance assessment with respect to the performance standards established under paragraph (3)(A) and the hospital performance score under paragraph (5). The Secretary shall ensure that such process provides for resolution of such appeals in a timely manner.
(B) Limitation on review
Except as provided in subparagraph (A), there shall be no administrative or judicial review under
(i) The methodology used to determine the amount of the value-based incentive payment under paragraph (6) and the determination of such amount.
(ii) The determination of the amount of funding available for such value-based incentive payments under paragraph (7)(A) and the payment reduction under paragraph (7)(B)(i).
(iii) The establishment of the performance standards under paragraph (3) and the performance period under paragraph (4).
(iv) The measures specified under subsection (b)(3)(B)(viii) and the measures selected under paragraph (2).
(v) The methodology developed under paragraph (5) that is used to calculate hospital performance scores and the calculation of such scores.
(vi) The validation methodology specified in subsection (b)(3)(B)(viii)(XI).
(C) Consultation with small hospitals
The Secretary shall consult with small rural and urban hospitals on the application of the Program to such hospitals.
(12) Promulgation of regulations
The Secretary shall promulgate regulations to carry out the Program, including the selection of measures under paragraph (2), the methodology developed under paragraph (5) that is used to calculate hospital performance scores, and the methodology used to determine the amount of value-based incentive payments under paragraph (6).
(p) Adjustment to hospital payments for hospital acquired conditions
(1) In general
In order to provide an incentive for applicable hospitals to reduce hospital acquired conditions under this subchapter, with respect to discharges from an applicable hospital occurring during fiscal year 2015 or a subsequent fiscal year, the amount of payment under this section or
(2) Applicable hospitals
(A) In general
For purposes of this subsection, the term "applicable hospital" means a subsection (d) hospital that meets the criteria described in subparagraph (B).
(B) Criteria described
(i) In general
The criteria described in this subparagraph, with respect to a subsection (d) hospital, is that the subsection (d) hospital is in the top quartile of all subsection (d) hospitals, relative to the national average, of hospital acquired conditions during the applicable period, as determined by the Secretary.
(ii) Risk adjustment
In carrying out clause (i), the Secretary shall establish and apply an appropriate risk adjustment methodology.
(C) Exemption
In the case of a hospital that is paid under
(3) Hospital acquired conditions
For purposes of this subsection, the term "hospital acquired condition" means a condition identified for purposes of subsection (d)(4)(D)(iv) and any other condition determined appropriate by the Secretary that an individual acquires during a stay in an applicable hospital, as determined by the Secretary.
(4) Applicable period
In this subsection, the term "applicable period" means, with respect to a fiscal year, a period specified by the Secretary.
(5) Reporting to hospitals
Prior to fiscal year 2015 and each subsequent fiscal year, the Secretary shall provide confidential reports to applicable hospitals with respect to hospital acquired conditions of the applicable hospital during the applicable period.
(6) Reporting hospital specific information
(A) In general
The Secretary shall make information available to the public regarding hospital acquired conditions of each applicable hospital.
(B) Opportunity to review and submit corrections
The Secretary shall ensure that an applicable hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under subparagraph (A) prior to such information being made public.
(C) Website
Such information shall be posted on the Hospital Compare Internet website in an easily understandable format.
(7) Limitations on review
There shall be no administrative or judicial review under
(A) The criteria described in paragraph (2)(A).
(B) The specification of hospital acquired conditions under paragraph (3).
(C) The specification of the applicable period under paragraph (4).
(D) The provision of reports to applicable hospitals under paragraph (5) and the information made available to the public under paragraph (6).
(q) Hospital readmissions reduction program
(1) In general
With respect to payment for discharges from an applicable hospital (as defined in paragraph (5)(C)) occurring during a fiscal year beginning on or after October 1, 2012, in order to account for excess readmissions in the hospital, the Secretary shall make payments (in addition to the payments described in paragraph (2)(A)(ii)) for such a discharge to such hospital under subsection (d) (or
(A) the base operating DRG payment amount (as defined in paragraph (2)) for the discharge; and
(B) the adjustment factor (described in paragraph (3)(A)) for the hospital for the fiscal year.
(2) Base operating DRG payment amount defined
(A) In general
Except as provided in subparagraph (B), in this subsection, the term "base operating DRG payment amount" means, with respect to a hospital for a fiscal year—
(i) the payment amount that would otherwise be made under subsection (d) (determined without regard to subsection (o)) for a discharge if this subsection did not apply; reduced by
(ii) any portion of such payment amount that is attributable to payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of subsection (d).
(B) Special rules for certain hospitals
(i) Sole community hospitals and medicare-dependent, small rural hospitals
In the case of a medicare-dependent, small rural hospital (with respect to discharges occurring during fiscal years 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the payment amount that would otherwise be made under subsection (d) shall be determined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5).
(ii) Hospitals paid under section 1395f of this title
In the case of a hospital that is paid under
(3) Adjustment factor
(A) In general
For purposes of paragraph (1), subject to subparagraph (D), the adjustment factor under this paragraph for an applicable hospital for a fiscal year is equal to the greater of—
(i) the ratio described in subparagraph (B) for the hospital for the applicable period (as defined in paragraph (5)(D)) for such fiscal year; or
(ii) the floor adjustment factor specified in subparagraph (C).
(B) Ratio
The ratio described in this subparagraph for a hospital for an applicable period is equal to 1 minus the ratio of—
(i) the aggregate payments for excess readmissions (as defined in paragraph (4)(A)) with respect to an applicable hospital for the applicable period; and
(ii) the aggregate payments for all discharges (as defined in paragraph (4)(B)) with respect to such applicable hospital for such applicable period.
(C) Floor adjustment factor
For purposes of subparagraph (A), the floor adjustment factor specified in this subparagraph for—
(i) fiscal year 2013 is 0.99;
(ii) fiscal year 2014 is 0.98; or
(iii) fiscal year 2015 and subsequent fiscal years is 0.97.
(D) Transitional adjustment for dual eligibles
(i) In general
In determining a hospital's adjustment factor under this paragraph for purposes of making payments for discharges occurring during and after fiscal year 2019, and before the application of clause (i) of subparagraph (E), the Secretary shall assign hospitals to groups (as defined by the Secretary under clause (ii)) and apply the applicable provisions of this subsection using a methodology in a manner that allows for separate comparison of hospitals within each such group, as determined by the Secretary.
(ii) Defining groups
For purposes of this subparagraph, the Secretary shall define groups of hospitals, based on their overall proportion, of the inpatients who are entitled to, or enrolled for, benefits under part A, and who are full-benefit dual eligible individuals (as defined in
(iii) Minimizing reporting burden on hospitals
In carrying out this subparagraph, the Secretary shall not impose any additional reporting requirements on hospitals.
(iv) Budget neutral design methodology
The Secretary shall design the methodology to implement this subparagraph so that the estimated total amount of reductions in payments under this subsection equals the estimated total amount of reductions in payments that would otherwise occur under this subsection if this subparagraph did not apply.
(E) Changes in risk adjustment
(i) Consideration of recommendations in IMPACT reports
The Secretary may take into account the studies conducted and the recommendations made by the Secretary under section 2(d)(1) of the IMPACT Act of 2014 (
(ii) Consideration of exclusion of patient cases based on V or other appropriate codes
In promulgating regulations to carry out this subsection with respect to discharges occurring after fiscal year 2018, the Secretary may consider the use of V or other ICD-related codes for removal of a readmission. The Secretary may consider modifying measures under this subsection to incorporate V or other ICD-related codes at the same time as other changes are being made under this subparagraph.
(iii) Removal of certain readmissions
In promulgating regulations to carry out this subsection, with respect to discharges occurring after fiscal year 2018, the Secretary may consider removal as a readmission of an admission that is classified within one or more of the following: transplants, end-stage renal disease, burns, trauma, psychosis, or substance abuse. The Secretary may consider modifying measures under this subsection to remove readmissions at the same time as other changes are being made under this subparagraph.
(4) Aggregate payments, excess readmission ratio defined
For purposes of this subsection:
(A) Aggregate payments for excess readmissions
The term "aggregate payments for excess readmissions" means, for a hospital for an applicable period, the sum, for applicable conditions (as defined in paragraph (5)(A)), of the product, for each applicable condition, of—
(i) the base operating DRG payment amount for such hospital for such applicable period for such condition;
(ii) the number of admissions for such condition for such hospital for such applicable period; and
(iii) the excess readmissions ratio (as defined in subparagraph (C)) for such hospital for such applicable period minus 1.
(B) Aggregate payments for all discharges
The term "aggregate payments for all discharges" means, for a hospital for an applicable period, the sum of the base operating DRG payment amounts for all discharges for all conditions from such hospital for such applicable period.
(C) Excess readmission ratio
(i) In general
Subject to clause (ii), the term "excess readmissions ratio" means, with respect to an applicable condition for a hospital for an applicable period, the ratio (but not less than 1.0) of—
(I) the risk adjusted readmissions based on actual readmissions, as determined consistent with a readmission measure methodology that has been endorsed under paragraph (5)(A)(ii)(I), for an applicable hospital for such condition with respect to such applicable period; to
(II) the risk adjusted expected readmissions (as determined consistent with such a methodology) for such hospital for such condition with respect to such applicable period.
(ii) Exclusion of certain readmissions
For purposes of clause (i), with respect to a hospital, excess readmissions shall not include readmissions for an applicable condition for which there are fewer than a minimum number (as determined by the Secretary) of discharges for such applicable condition for the applicable period and such hospital.
(5) Definitions
For purposes of this subsection:
(A) Applicable condition
The term "applicable condition" means, subject to subparagraph (B), a condition or procedure selected by the Secretary among conditions and procedures for which—
(i) readmissions (as defined in subparagraph (E)) that represent conditions or procedures that are high volume or high expenditures under this subchapter (or other criteria specified by the Secretary); and
(ii) measures of such readmissions—
(I) have been endorsed by the entity with a contract under
(II) such endorsed measures have exclusions for readmissions that are unrelated to the prior discharge (such as a planned readmission or transfer to another applicable hospital).
(B) Expansion of applicable conditions
Beginning with fiscal year 2015, the Secretary shall, to the extent practicable, expand the applicable conditions beyond the 3 conditions for which measures have been endorsed as described in subparagraph (A)(ii)(I) as of March 23, 2010, to the additional 4 conditions that have been identified by the Medicare Payment Advisory Commission in its report to Congress in June 2007 and to other conditions and procedures as determined appropriate by the Secretary. In expanding such applicable conditions, the Secretary shall seek the endorsement described in subparagraph (A)(ii)(I) but may apply such measures without such an endorsement in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(C) Applicable hospital
The term "applicable hospital" means a subsection (d) hospital or a hospital that is paid under
(D) Applicable period
The term "applicable period" means, with respect to a fiscal year, such period as the Secretary shall specify.
(E) Readmission
The term "readmission" means, in the case of an individual who is discharged from an applicable hospital, the admission of the individual to the same or another applicable hospital within a time period specified by the Secretary from the date of such discharge. Insofar as the discharge relates to an applicable condition for which there is an endorsed measure described in subparagraph (A)(ii)(I), such time period (such as 30 days) shall be consistent with the time period specified for such measure.
(6) Reporting hospital specific information
(A) In general
The Secretary shall make information available to the public regarding readmission rates of each subsection (d) hospital under the program.
(B) Opportunity to review and submit corrections
The Secretary shall ensure that a subsection (d) hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under subparagraph (A) prior to such information being made public.
(C) Website
Such information shall be posted on the Hospital Compare Internet website in an easily understandable format.
(7) Limitations on review
There shall be no administrative or judicial review under
(A) The determination of base operating DRG payment amounts.
(B) The methodology for determining the adjustment factor under paragraph (3), including excess readmissions ratio under paragraph (4)(C), aggregate payments for excess readmissions under paragraph (4)(A), and aggregate payments for all discharges under paragraph (4)(B), and applicable periods and applicable conditions under paragraph (5).
(C) The measures of readmissions as described in paragraph (5)(A)(ii).
(8) Readmission rates for all patients
(A) Calculation of readmission
The Secretary shall calculate readmission rates for all patients (as defined in subparagraph (D)) for a specified hospital (as defined in subparagraph (D)(ii)) for an applicable condition (as defined in paragraph (5)(B)) and other conditions deemed appropriate by the Secretary for an applicable period (as defined in paragraph (5)(D)) in the same manner as used to calculate such readmission rates for hospitals with respect to this subchapter and posted on the CMS Hospital Compare website.
(B) Posting of hospital specific all patient readmission rates
The Secretary shall make information on all patient readmission rates calculated under subparagraph (A) available on the CMS Hospital Compare website in a form and manner determined appropriate by the Secretary. The Secretary may also make other information determined appropriate by the Secretary available on such website.
(C) Hospital submission of all patient data
(i) Except as provided for in clause (ii), each specified hospital (as defined in subparagraph (D)(ii)) shall submit to the Secretary, in a form, manner and time specified by the Secretary, data and information determined necessary by the Secretary for the Secretary to calculate the all patient readmission rates described in subparagraph (A).
(ii) Instead of a specified hospital submitting to the Secretary the data and information described in clause (i), such data and information may be submitted to the Secretary, on behalf of such a specified hospital, by a state or an entity determined appropriate by the Secretary.
(D) Definitions
For purposes of this paragraph:
(i) The term "all patients" means patients who are treated on an inpatient basis and discharged from a specified hospital (as defined in clause (ii)).
(ii) The term "specified hospital" means a subsection (d) hospital, hospitals described in clauses (i) through (v) of subsection (d)(1)(B) and, as determined feasible and appropriate by the Secretary, other hospitals not otherwise described in this subparagraph.
(r) Adjustments to medicare DSH payments
(1) Empirically justified DSH payments
For fiscal year 2014 and each subsequent fiscal year, instead of the amount of disproportionate share hospital payment that would otherwise be made under subsection (d)(5)(F) to a subsection (d) hospital for the fiscal year, the Secretary shall pay to the subsection (d) hospital 25 percent of such amount (which represents the empirically justified amount for such payment, as determined by the Medicare Payment Advisory Commission in its March 2007 Report to the Congress).
(2) Additional payment
In addition to the payment made to a subsection (d) hospital under paragraph (1), for fiscal year 2014 and each subsequent fiscal year, the Secretary shall pay to such subsection (d) hospitals an additional amount equal to the product of the following factors:
(A) Factor one
A factor equal to the difference between—
(i) the aggregate amount of payments that would be made to subsection (d) hospitals under subsection (d)(5)(F) if this subsection did not apply for such fiscal year (as estimated by the Secretary); and
(ii) the aggregate amount of payments that are made to subsection (d) hospitals under paragraph (1) for such fiscal year (as so estimated).
(B) Factor two
(i) Fiscal years 2014, 2015, 2016, and 2017
For each of fiscal years 2014, 2015, 2016, and 2017, a factor equal to 1 minus the percent change in the percent of individuals under the age of 65 who are uninsured, as determined by comparing the percent of such individuals—
(I) who are uninsured in 2013, the last year before coverage expansion under the Patient Protection and Affordable Care Act (as calculated by the Secretary based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Health Care and Education Reconciliation Act of 2010 that, if determined in the affirmative, would clear such Act for enrollment); and
(II) who are uninsured in the most recent period for which data is available (as so calculated),
minus 0.1 percentage points for fiscal year 2014 and minus 0.2 percentage points for each of fiscal years 2015, 2016, and 2017.
(ii) 2018 and subsequent years
For fiscal year 2018 and each subsequent fiscal year, a factor equal to 1 minus the percent change in the percent of individuals who are uninsured, as determined by comparing the percent of individuals—
(I) who are uninsured in 2013 (as estimated by the Secretary, based on data from the Census Bureau or other sources the Secretary determines appropriate, and certified by the Chief Actuary of the Centers for Medicare & Medicaid Services); and
(II) who are uninsured in the most recent period for which data is available (as so estimated and certified),
minus 0.2 percentage points for each of fiscal years 2018 and 2019.
(C) Factor three
A factor equal to the percent, for each subsection (d) hospital, that represents the quotient of—
(i) the amount of uncompensated care for such hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data (including, in the case where the Secretary determines that alternative data is available which is a better proxy for the costs of subsection (d) hospitals for treating the uninsured, the use of such alternative data)); and
(ii) the aggregate amount of uncompensated care for all subsection (d) hospitals that receive a payment under this subsection for such period (as so estimated, based on such data).
(3) Limitations on review
There shall be no administrative or judicial review under
(A) Any estimate of the Secretary for purposes of determining the factors described in paragraph (2).
(B) Any period selected by the Secretary for such purposes.
(s) Prospective payment for psychiatric hospitals
(1) Reference to establishment and implementation of system
For provisions related to the establishment and implementation of a prospective payment system for payments under this subchapter for inpatient hospital services furnished by psychiatric hospitals (as described in clause (i) of subsection (d)(1)(B)) and psychiatric units (as described in the matter following clause (v) of such subsection), see section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999.
(2) Implementation for rate year beginning in 2010 and subsequent rate years
(A) In general
In implementing the system described in paragraph (1) for the rate year beginning in 2010 and any subsequent rate year, any update to a base rate for days during the rate year for a psychiatric hospital or unit, respectively, shall be reduced—
(i) for the rate year beginning in 2012 and each subsequent rate year, by the productivity adjustment described in subsection (b)(3)(B)(xi)(II); and
(ii) for each of the rate years beginning in 2010 through 2019, by the other adjustment described in paragraph (3).
(B) Special rule
The application of this paragraph may result in such update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year.
(3) Other adjustment
For purposes of paragraph (2)(A)(ii), the other adjustment described in this paragraph is—
(A) for each of the rate years beginning in 2010 and 2011, 0.25 percentage point;
(B) for each of the rate years beginning in 2012 and 2013, 0.1 percentage point;
(C) for the rate year beginning in 2014, 0.3 percentage point;
(D) for each of the rate years beginning in 2015 and 2016, 0.2 percentage point; and
(E) for each of the rate years beginning in 2017, 2018, and 2019, 0.75 percentage point.
(4) Quality reporting
(A) Reduction in update for failure to report
(i) In general
Under the system described in paragraph (1), for rate year 2014 and each subsequent rate year, in the case of a psychiatric hospital or psychiatric unit that does not submit data to the Secretary in accordance with subparagraphs (C) and (E) with respect to such a rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, and after application of paragraph (2), shall be reduced by 2 percentage points.
(ii) Special rule
The application of this subparagraph may result in such annual update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year.
(B) Noncumulative application
Any reduction under subparagraph (A) shall apply only with respect to the rate year involved and the Secretary shall not take into account such reduction in computing the payment amount under the system described in paragraph (1) for a subsequent rate year.
(C) Submission of quality data
For rate year 2014 and each subsequent rate year, each psychiatric hospital and psychiatric unit shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph.
(D) Quality measures
(i) In general
Subject to clause (ii), any measure specified by the Secretary under this subparagraph must have been endorsed by the entity with a contract under
(ii) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(iii) Time frame
Not later than October 1, 2012, the Secretary shall publish the measures selected under this subparagraph that will be applicable with respect to rate year 2014.
(iv) Patients' perspective on care
Not later than for rate year 2031, the quality measures specified under this subparagraph shall include a quality measure of patients' perspective on care.
(E) Standardized patient assessment data
(i) In general
For rate year 2028 and each subsequent rate year, in addition to such data on the quality measures described in subparagraph (C), each psychiatric hospital and psychiatric unit shall submit to the Secretary, through the use of a standardized assessment instrument implemented under clause (iii), the standardized patient assessment data described in clause (ii). Such data shall be submitted with respect to admission and discharge of an individual (and may be submitted more frequently as the Secretary determines appropriate).
(ii) Standardized patient assessment data described
For purposes of clause (i), the standardized patient assessment data described in this clause, with respect to a psychiatric hospital or psychiatric unit, is data with respect to the following categories:
(I) Functional status, such as mobility and self-care at admission to a psychiatric hospital or unit and before discharge from a psychiatric hospital or unit.
(II) Cognitive function, such as ability to express ideas and to understand, and mental status, such as depression and dementia.
(III) Special services, treatments, and interventions for psychiatric conditions.
(IV) Medical conditions and co-morbidities, such as diabetes, congestive heart failure, and pressure ulcers.
(V) Impairments, such as incontinence and an impaired ability to hear, see, or swallow.
(VI) Other categories as determined appropriate by the Secretary.
(iii) Standardized assessment instrument
(I) In general
For purposes of clause (i), the Secretary shall implement a standardized assessment instrument that provides for the submission of standardized patient assessment data under this subchapter with respect to psychiatric hospitals and psychiatric units which enables comparison of such assessment data across all such hospitals and units to which such data are applicable.
(II) Funding
The Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under
(F) Public availability of data submitted
The Secretary shall establish procedures for making data submitted under subparagraphs (C) and (F) available to the public. Such procedures shall ensure that a psychiatric hospital and a psychiatric unit has the opportunity to review the data that is to be made public with respect to the hospital or unit prior to such data being made public. The Secretary shall report quality measures, including the quality measure of patients' perspective on care described in subparagraph (D)(iv), that relate to services furnished in inpatient settings in psychiatric hospitals and psychiatric units on the Internet website of the Centers for Medicare & Medicaid Services.
(5) Additional data and information
(A) In general
The Secretary shall collect data and information as the Secretary determines appropriate to revise payments under the system described in paragraph (1) for psychiatric hospitals and psychiatric units pursuant to subparagraph (D) and for other purposes as determined appropriate by the Secretary. The Secretary shall begin to collect such data by not later than October 1, 2023.
(B) Data and information
The data and information to be collected under subparagraph (A) may include—
(i) charges, including those related to ancillary services;
(ii) the required intensity of behavioral monitoring, such as cognitive deficit, suicide ideations, violent behavior, and need for physical restraint; and
(iii) interventions, such as detoxification services for substance abuse, dependence on respirator, total parenteral nutritional support, dependence on renal dialysis, and burn care.
(C) Method of collection
The Secretary may collect the additional data and information under subparagraph (A) on cost reports, on claims, or otherwise.
(D) Revisions to payment rates
(i) In general
Notwithstanding the preceding paragraphs of this subsection or section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, for rate year 2025 (and for any subsequent rate year, if determined appropriate by the Secretary), the Secretary shall, by regulation, implement revisions to the methodology for determining the payment rates under the system described in paragraph (1) for psychiatric hospitals and psychiatric units, as the Secretary determines to be appropriate. Such revisions may be based on a review of data and information collected under subparagraph (A).
(ii) Review
The Secretary may make revisions to the diagnosis-related group classifications, in accordance with subsection (d)(4)(C), to reflect nursing and staff resource use and costs involved in furnishing services at such hospitals and units, including considerations for patient complexity and prior admission to an inpatient psychiatric facility, which may be based on review of data and information collected under subparagraph (A), as the Secretary determines to be appropriate.
(iii) Budget neutrality
Revisions in payment implemented pursuant to clause (i) for a rate year shall result in the same estimated amount of aggregate expenditures under this subchapter for psychiatric hospitals and psychiatric units furnished in the rate year as would have been made under this subchapter for such care in such rate year if such revisions had not been implemented.
(6) Additional considerations for diagnosis-related group classifications
(A) In general
Notwithstanding the preceding paragraphs of this subsection (other than paragraph (5)) or section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, beginning not later than rate year 2031, in addition to any revisions pursuant to paragraph (5), the Secretary shall, by regulation, implement revisions to the methodology for determining the payment rates under the system described in paragraph (1) for psychiatric hospitals and psychiatric units, as the Secretary determines to be appropriate, to take into account the patient assessment data described in paragraph (4)(E)(ii).
(B) Budget neutrality
Revisions in payment implemented pursuant to subparagraph (A) for a rate year shall result in the same estimated amount of aggregate expenditures under this subchapter for psychiatric hospitals and psychiatric units furnished in the rate year as would have been made under this subchapter for such care in such rate year if such revisions had not been implemented.
(t) Relating similar inpatient and outpatient hospital services
(1) Development of HCPCS version of MS–DRG codes
Not later than January 1, 2018, the Secretary shall develop HCPCS versions for MS–DRGs that are similar to the ICD–10–PCS for such MS–DRGs such that, to the extent possible, the MS–DRG assignment shall be similar for a claim coded with the HCPCS version as an identical claim coded with a ICD–10–PCS code.
(2) Coverage of surgical MS–DRGs
In carrying out paragraph (1), the Secretary shall develop HCPCS versions of MS–DRG codes for not fewer than 10 surgical MS–DRGs.
(3) Publication and dissemination of the HCPCS versions of MS–DRGs
(A) In general
The Secretary shall develop a HCPCS MS–DRG definitions manual and software that is similar to the definitions manual and software for ICD–10–PCS codes for such MS–DRGs. The Secretary shall post the HCPCS MS–DRG definitions manual and software on the Internet website of the Centers for Medicare & Medicaid Services. The HCPCS MS–DRG definitions manual and software shall be in the public domain and available for use and redistribution without charge.
(B) Use of previous analysis done by MedPAC
In developing the HCPCS MS–DRG definitions manual and software under subparagraph (A), the Secretary shall consult with the Medicare Payment Advisory Commission and shall consider the analysis done by such Commission in translating outpatient surgical claims into inpatient surgical MS–DRGs in preparing
(4) Definition and reference
In this subsection:
(A) HCPCS
The term "HCPCS" means, with respect to hospital items and services, the code under the Healthcare Common Procedure Coding System (HCPCS) (or a successor code) for such items and services.
(B) ICD–10–PCS
The term "ICD–10–PCS" means the International Classification of Diseases, 10th Revision, Procedure Coding System, and includes any subsequent revision of such International Classification of Diseases, Procedure Coding System.
(Aug. 14, 1935, ch. 531, title XVIII, §1886, as added and amended
Editorial Notes
References in Text
Section 5001(b) of the Deficit Reduction Act of 2005, referred to in subsec. (b)(3)(B)(viii)(I), is section 5001(b) of
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, referred to in subsecs. (b)(3)(B)(viii)(IV) and (d)(2)(C)(i), is
The Internal Revenue Code of 1986, referred to in subsec. (b)(6), is classified generally to Title 26, Internal Revenue Code.
Section 222(a) of the Social Security Amendments of 1972, referred to in subsec. (c)(4)(B), is section 222(a) of
The effective date of such clause (vi), referred to in concluding provisions of subsec. (d)(1)(B), probably means the date of enactment of
Section 9104(a) of the Medicare and Medicaid Budget Reconciliation Amendments of 1985, referred to in subsec. (d)(2)(C)(i), is section 9104(a) of
Section 4621(a)(1) of the Balanced Budget Act of 1997, referred to in subsec. (d)(2)(C)(i), is section 4621(a)(1) of
Section 111 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (d)(2)(C)(i), is section 1000(a)(6) [title I, §111] of
Section 302 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, referred to in subsec. (d)(2)(C)(i), is section 1(a)(6) [title III, §302] of
Section 6003(c) of the Omnibus Budget Reconciliation Act of 1989, referred to in subsec. (d)(2)(C)(iv), is section 6003(c) of
Section 4002(b) of the Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (d)(2)(C)(iv), is section 4002(b) of
Section 303 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, referred to in subsec. (d)(2)(C)(iv), is section 1(a)(6) [title III, §303] of
Section 9104 of the Medicare and Medicaid Budget Reconciliation Amendments of 1985, referred to in subsec. (d)(3)(C)(ii), is section 9104 of
Section 4003(a)(1) of the Omnibus Budget Reconciliation Act of 1987, referred to in subsec. (d)(3)(C)(ii), is section 4003(a)(1) of
The Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (d)(3)(C)(ii), is
The Patient Protection and Affordable Care Act, referred to in subsecs. (d)(3)(E)(i) and (r)(2)(B)(i)(I), is
Section 9831(a) of the American Rescue Plan Act of 2021, referred to in subsec. (d)(3)(E)(i), is section 9831(a) of
Section 9304 of the Omnibus Budget Reconciliation Act of 1986, referred to in subsec. (e)(1)(C)(ii), is section 9304 of
Section 4628 of the Balanced Budget Act of 1997, referred to in subsec. (h)(6)(C)(iii), is section 4628 of
Section 402 of
Such section 332(a)(1)(A), referred to in subsec. (h)(8)(D)(ii)(I), probably means section 332(a)(1)(A) of the Public Health Service Act, which is classified to
Section 4005(e) of the Omnibus Budget Reconciliation Act of 1987, referred to in subsec. (i), is section 4005(e) of
Section 123 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (m)(1), is section 1000(a)(6) [title I, §123] of
Section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, referred to in subsec. (m)(1), is section 1(a)(6) [title III, §307(b)] of
The Health Care and Education Reconciliation Act of 2010, referred to in subsec. (r)(2)(B)(i)(I), is
Section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (s)(1), (5)(D)(i), (6)(A), is section 1000(a)(6) [title I, §124] of
Amendments
2024—Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(C)(i)(III).
Subsec. (d)(12)(C)(i)(IV).
Subsec. (d)(12)(D).
Subsec. (d)(12)(D)(ii).
2023—Subsec. (j)(7)(E).
2022—Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(B)(v).
Subsec. (d)(5)(B)(xii).
Subsec. (d)(5)(B)(xiii).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(C)(i)(III).
Subsec. (d)(12)(C)(i)(IV).
Subsec. (d)(12)(D).
Subsec. (d)(12)(D)(ii).
Subsec. (h)(3)(D)(iii).
Subsec. (h)(4)(F)(i).
Subsec. (h)(4)(H)(i)(I).
Subsec. (h)(7)(E).
Subsec. (h)(10).
Subsec. (l)(2)(B).
Subsec. (s)(4)(A)(i).
Subsec. (s)(4)(D)(iv).
Subsec. (s)(4)(E).
Subsec. (s)(4)(F).
Subsec. (s)(5).
Subsec. (s)(6).
2021—Subsec. (d)(3)(E)(i).
Subsec. (d)(3)(E)(iv).
2020—Subsec. (d)(4)(C)(iv).
Subsec. (d)(5)(B)(v).
Subsec. (d)(5)(B)(viii).
Subsec. (d)(5)(B)(x), (xi).
Subsec. (d)(5)(B)(xii).
Subsec. (h)(2)(F).
Subsec. (h)(4)(F)(i).
Subsec. (h)(4)(H)(i).
Subsec. (h)(4)(H)(iv).
Subsec. (h)(4)(H)(iv)(I).
Subsec. (h)(7)(E).
Subsec. (h)(9).
2019—Subsec. (a)(4).
Subsec. (d)(4)(C)(iii).
Subsec. (d)(5)(M).
2018—Subsec. (b)(3)(B)(viii)(XII).
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(5)(G)(iv).
Subsec. (d)(5)(G)(iv)(I).
Subsec. (d)(5)(J)(ii)(IV), (V).
Subsec. (d)(5)(J)(iv).
Subsec. (d)(5)(J)(iv)(I).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(C)(ii).
Subsec. (d)(12)(C)(iii).
Subsec. (d)(12)(D).
"(i) with respect to each of fiscal years 2011 through 2018, with 200 or fewer"
for "hospitals with 200 or fewer", and "fiscal year or portion of fiscal year; and" for "fiscal year.", and added cl. (ii).
Subsec. (m)(6)(B)(i)(I).
Subsec. (m)(6)(B)(i)(II).
Subsec. (m)(6)(B)(ii).
Subsec. (m)(6)(B)(iv).
Subsec. (n)(3)(A).
Subsec. (o)(2)(B)(iii).
2016—Subsec. (b)(3)(B)(ix)(II).
Subsec. (d)(1)(B).
Subsec. (d)(1)(B)(iv).
Subsec. (d)(1)(B)(vi).
Subsec. (m)(5)(F)(i), (ii).
Subsec. (m)(6)(A)(i).
Subsec. (m)(6)(E)(i)(I)(aa).
Subsec. (m)(6)(F).
Subsec. (m)(6)(G).
Subsec. (m)(7).
Subsec. (q)(3)(A).
Subsec. (q)(3)(D), (E).
Subsec. (t).
2015—Subsec. (b)(3)(B)(ix)(I).
Subsec. (b)(3)(B)(ix)(II).
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(9)(E)(iv).
Subsec. (d)(9)(E)(v).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(D).
Subsec. (j)(3)(C)(i).
Subsec. (j)(3)(C)(ii).
Subsec. (j)(3)(C)(iii).
Subsec. (j)(7)(A)(i).
Subsec. (m)(3)(A).
Subsec. (m)(3)(C).
Subsec. (m)(6)(A)(i).
Subsec. (m)(6)(E).
Subsec. (n)(3)(A)(ii).
Subsec. (n)(6)(B).
2014—Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(D).
Subsec. (j)(7)(A)(i).
Subsec. (j)(7)(C).
Subsec. (j)(7)(E).
Subsec. (j)(7)(F), (G).
Subsec. (m)(5)(A)(i).
Subsec. (m)(5)(C).
Subsec. (m)(5)(E).
Subsec. (m)(5)(F), (G).
Subsec. (m)(6)(C)(iv).
2013—Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(D).
Subsec. (m)(5)(D)(iv).
Subsec. (m)(6).
2011—Subsec. (f)(2).
2010—Subsec. (a)(4).
Subsec. (b)(3)(B)(i)(XX).
Subsec. (b)(3)(B)(viii)(I).
Subsec. (b)(3)(B)(viii)(II).
Subsec. (b)(3)(B)(viii)(V).
Subsec. (b)(3)(B)(viii)(VII).
Subsec. (b)(3)(B)(viii)(VIII) to (XI).
Subsec. (b)(3)(B)(ix)(I).
Subsec. (b)(3)(B)(x).
Subsec. (b)(3)(B)(xi), (xii).
Subsec. (b)(3)(B)(xii)(I).
Subsec. (b)(3)(B)(xii)(II).
Subsec. (b)(3)(B)(xii)(III).
Subsec. (b)(3)(B)(xii)(IV), (V).
Subsec. (b)(3)(B)(xiii).
"(I) the excess (if any) of—
"(aa) the total percentage of the non-elderly insured population for the preceding fiscal year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
"(bb) the total percentage of the non-elderly insured population for such preceding fiscal year (as estimated by the Secretary); exceeds
"(II) 5 percentage points."
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (d)(3)(E)(i).
Subsec. (d)(3)(E)(iii).
Subsec. (d)(5)(B)(iv).
Subsec. (d)(5)(B)(v).
Subsec. (d)(5)(B)(x).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(7)(C).
Subsec. (d)(12)(A).
Subsec. (d)(12)(B).
Subsec. (d)(12)(C)(i).
Subsec. (d)(12)(D).
Subsec. (h)(4)(E).
Subsec. (h)(4)(F)(i).
Subsec. (h)(4)(H)(i).
Subsec. (h)(4)(H)(vi).
Subsec. (h)(4)(J), (K).
Subsec. (h)(5)(K).
Subsec. (h)(7)(E).
Subsec. (h)(8).
Subsec. (h)(8)(I).
Subsec. (j)(3)(C).
Subsec. (j)(3)(D).
Subsec. (j)(3)(D)(i)(I).
Subsec. (j)(3)(D)(i)(II).
Subsec. (j)(3)(D)(i)(III).
Subsec. (j)(3)(D)(i)(IV), (V).
Subsec. (j)(3)(D)(ii).
"(I) the excess (if any) of—
"(aa) the total percentage of the non-elderly insured population for the preceding fiscal year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
"(bb) the total percentage of the non-elderly insured population for such preceding fiscal year (as estimated by the Secretary); exceeds
"(II) 5 percentage points."
Subsec. (j)(7), (8).
Subsec. (m)(3), (4).
Subsec. (m)(4)(A).
Subsec. (m)(4)(A)(i).
Subsec. (m)(4)(A)(ii), (iii).
Subsec. (m)(4)(A)(iv).
Subsec. (m)(4)(A)(v), (vi).
Subsec. (m)(4)(B).
"(i) the excess (if any) of—
"(I) the total percentage of the non-elderly insured population for the preceding rate year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
"(II) the total percentage of the non-elderly insured population for such preceding rate year (as estimated by the Secretary); exceeds
"(ii) 5 percentage points."
Subsec. (m)(4)(C) to (F).
Subsec. (m)(5).
Subsec. (o).
Subsec. (o)(2)(A).
Subsec. (p).
Subsec. (q).
Subsec. (q)(1).
Subsec. (r).
Subsec. (r)(1).
Subsec. (r)(2).
Subsec. (r)(2)(B)(i).
Subsec. (r)(2)(B)(i)(I).
Subsec. (r)(2)(B)(i)(II).
Subsec. (r)(2)(B)(ii).
Subsec. (s).
Subsec. (s)(3).
Subsec. (s)(3)(A)(i).
Subsec. (s)(3)(A)(ii).
Subsec. (s)(3)(A)(iii).
Subsec. (s)(3)(A)(iv), (v).
Subsec. (s)(3)(B).
"(i) the excess (if any) of—
"(I) the total percentage of the non-elderly insured population for the preceding rate year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over
"(II) the total percentage of the non-elderly insured population for such preceding rate year (as estimated by the Secretary); exceeds
"(ii) 5 percentage points."
Subsec. (s)(4).
2009—Subsec. (b)(3)(B)(viii)(I).
Subsec. (b)(3)(B)(ix).
Subsec. (n).
2008—Subsec. (b)(3)(C).
Subsec. (b)(3)(I)(i).
Subsec. (b)(3)(L).
2007—Subsec. (h)(4)(H)(v).
Subsec. (h)(7)(D), (E).
Subsec. (j)(3)(C).
Subsec. (m).
2006—Subsec. (b)(3)(B)(i)(XIX).
Subsec. (b)(3)(B)(i)(XX).
Subsec. (b)(3)(B)(vii)(I).
Subsec. (b)(3)(B)(vii)(II).
Subsec. (b)(3)(B)(viii).
Subsec. (b)(3)(B)(viii)(III).
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (b)(3)(K).
Subsec. (d)(4)(C)(iv).
Subsec. (d)(4)(D).
Subsec. (d)(5)(F)(vi).
Subsec. (d)(5)(F)(xiv)(II).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(7)(B).
Subsec. (e)(3).
2003—Subsec. (b)(3)(B)(i)(XIX), (XX).
Subsec. (b)(3)(B)(vii).
Subsec. (b)(3)(I)(i)(I).
Subsec. (b)(3)(I)(iii).
Subsec. (d)(2)(C)(i).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(3).
Subsec. (d)(3)(A)(iii).
Subsec. (d)(3)(A)(iv).
Subsec. (d)(3)(D).
Subsec. (d)(3)(D)(i).
Subsec. (d)(3)(D)(i)(II).
Subsec. (d)(3)(D)(ii).
Subsec. (d)(3)(D)(ii)(II).
Subsec. (d)(3)(D)(iii).
Subsec. (d)(3)(E).
Subsec. (d)(5)(B)(ii).
Subsec. (d)(5)(B)(ii)(VI).
Subsec. (d)(5)(B)(ii)(VII).
Subsec. (d)(5)(B)(ii)(VIII) to (XII).
Subsec. (d)(5)(B)(v).
Subsec. (d)(5)(B)(ix).
Subsec. (d)(5)(F)(iv)(II) to (VI).
Subsec. (d)(5)(F)(viii).
Subsec. (d)(5)(F)(x) to (xiii).
Subsec. (d)(5)(F)(xiv).
Subsec. (d)(5)(K)(i).
Subsec. (d)(5)(K)(ii)(I).
Subsec. (d)(5)(K)(ii)(III).
Subsec. (d)(5)(K)(vii).
Subsec. (d)(5)(K)(viii).
Subsec. (d)(5)(K)(ix).
Subsec. (d)(7)(A).
Subsec. (d)(9)(A).
"(I) the national adjusted DRG prospective payment rate (determined under paragraph (3)(D)) for hospitals located in a large urban area,
"(II) such rate for hospitals located in other urban areas, and
"(III) such rate for hospitals located in a rural area,
for such discharges, adjusted in the manner provided in paragraph (3)(E) for different area wage levels. As used in this section, the term 'subsection (d) Puerto Rico hospital' means a hospital that is located in Puerto Rico and that would be a subsection (d) hospital (as defined in paragraph (1)(B)) if it were located in one of the fifty States."
Subsec. (d)(9)(A)(i).
Subsec. (d)(9)(A)(ii).
Subsec. (d)(9)(C)(i).
Subsec. (d)(9)(C)(ii).
Subsec. (d)(9)(C)(iii)(I).
Subsec. (d)(9)(C)(iv).
Subsec. (d)(9)(E).
Subsec. (d)(12).
Subsec. (d)(13).
Subsec. (g)(3)(B).
Subsec. (h)(2)(D)(iv)(I).
Subsec. (h)(2)(D)(iv)(II).
Subsec. (h)(3)(D)(ii)(III).
Subsec. (h)(4)(F)(i).
Subsec. (h)(4)(H)(i).
Subsec. (h)(7).
2000—Subsec. (b)(3)(B)(i)(XVI).
Subsec. (b)(3)(B)(i)(XVII).
Subsec. (b)(3)(B)(i)(XVIII).
Subsec. (b)(3)(B)(i)(XIX).
Subsec. (b)(3)(H)(ii)(III).
Subsec. (b)(3)(I)(i).
Subsec. (b)(3)(I)(i)(I).
Subsec. (b)(3)(I)(i)(II), (III).
Subsec. (b)(3)(J).
Subsec. (d)(1)(B)(v)(III).
Subsec. (d)(1)(E).
Subsec. (d)(2)(C)(i).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(3)(A)(vi).
Subsec. (d)(3)(E).
Subsec. (d)(4)(C)(i).
Subsec. (d)(5)(B).
Subsec. (d)(5)(B)(ii)(V).
Subsec. (d)(5)(B)(ii)(VI).
Subsec. (d)(5)(B)(ii)(VII).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(iv)(II).
Subsec. (d)(5)(F)(iv)(III).
Subsec. (d)(5)(F)(iv)(IV).
Subsec. (d)(5)(F)(iv)(V).
Subsec. (d)(5)(F)(iv)(VI).
Subsec. (d)(5)(F)(v)(II).
Subsec. (d)(5)(F)(v)(III).
Subsec. (d)(5)(F)(v)(IV).
Subsec. (d)(5)(F)(ix)(III).
Subsec. (d)(5)(F)(ix)(IV).
Subsec. (d)(5)(F)(x).
Subsec. (d)(5)(F)(xi).
Subsec. (d)(5)(F)(xii).
Subsec. (d)(5)(F)(xiii).
Subsec. (d)(5)(G)(iv)(IV).
Subsec. (d)(5)(K), (L).
Subsec. (d)(10)(D)(v), (vi).
Subsec. (h)(2)(D)(iii).
Subsec. (j)(1)(A).
Subsec. (j)(1)(B).
Subsec. (j)(1)(F).
Subsec. (j)(3)(B).
Subsec. (l)(2)(C).
1999—Subsec. (b)(1).
Subsec. (b)(2)(A).
Subsec. (b)(2)(E).
Subsec. (b)(3)(B)(i)(XVI) to (XVIII).
Subsec. (b)(3)(B)(ii)(VI).
Subsec. (b)(3)(B)(ii)(VII).
Subsec. (b)(3)(C).
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (b)(3)(H)(i) to (iii).
Subsec. (b)(3)(I).
Subsec. (b)(4)(A)(i).
Subsec. (b)(7)(A)(i)(II).
Subsec. (d)(2)(C)(i).
Subsec. (d)(5)(B)(ii)(V), (VI).
Subsec. (d)(5)(B)(v).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(ix)(III).
Subsec. (d)(5)(F)(ix)(IV).
Subsec. (d)(5)(F)(ix)(V), (VI).
Subsec. (d)(5)(G)(i).
Subsec. (d)(5)(G)(ii)(II).
Subsec. (d)(8)(B).
Subsec. (d)(8)(E).
Subsec. (d)(9)(A)(ii).
Subsec. (g)(1)(A).
Subsec. (h)(2)(D)(i).
Subsec. (h)(2)(D)(ii).
Subsec. (h)(2)(D)(iii), (iv).
Subsec. (h)(2)(E), (F).
Subsec. (h)(3)(D)(i).
Subsec. (h)(3)(D)(iii), (iv).
Subsec. (h)(4)(F).
Subsec. (h)(4)(F)(i).
Subsec. (h)(4)(H)(iv).
Subsec. (h)(5)(F).
Subsec. (h)(5)(G)(i).
Subsec. (h)(5)(G)(v).
Subsec. (j)(1)(D).
Subsec. (j)(1)(E).
Subsec. (j)(2)(A)(i).
Subsec. (l).
1997—Subsec. (b)(1).
Subsec. (b)(1)(A).
"(i) 50 percent of the amount by which the target amount exceeds the amount of the operating costs, or
"(ii) 5 percent of the target amount,
whichever is less; or".
Subsec. (b)(1)(B).
Subsec. (b)(1)(C).
Subsec. (b)(2).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(i)(XIII) to (XVII).
Subsec. (b)(3)(B)(ii)(VI) to (VIII).
Subsec. (b)(3)(B)(vi).
Subsec. (b)(3)(D).
Subsec. (b)(3)(D)(iv).
Subsec. (b)(3)(F), (G).
Subsec. (b)(3)(H).
Subsec. (b)(4)(A)(i).
Subsec. (b)(4)(A)(ii).
Subsec. (b)(7).
Subsec. (d)(1)(B).
Subsec. (d)(1)(B)(iv).
Subsec. (d)(1)(B)(v).
Subsec. (d)(1)(E).
Subsec. (d)(2)(C)(i).
Subsec. (d)(5)(A)(ii).
Subsec. (d)(5)(B)(i)(I).
Subsec. (d)(5)(B)(ii).
Subsec. (d)(5)(B)(iv).
Subsec. (d)(5)(B)(v) to (viii).
Subsec. (d)(5)(D)(iii)(III).
Subsec. (d)(5)(D)(v).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(ii).
Subsec. (d)(5)(F)(ii)(I).
Subsec. (d)(5)(F)(ix).
Subsec. (d)(5)(G)(i), (ii)(II).
Subsec. (d)(5)(I)(ii).
Subsec. (d)(5)(J).
Subsec. (d)(6).
Subsec. (d)(9)(A).
Subsec. (d)(9)(A)(i).
Subsec. (d)(9)(A)(ii).
Subsec. (d)(10)(C)(ii).
Subsec. (d)(10)(D)(iii), (iv).
Subsec. (d)(11).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(5)(A).
Subsec. (e)(5)(B).
Subsec. (e)(6).
Subsec. (g)(1)(A).
Subsec. (g)(3)(B).
Subsec. (g)(4).
Subsec. (h)(3)(B).
Subsec. (h)(3)(D).
Subsec. (h)(4)(F) to (H).
Subsec. (h)(5)(G).
Subsec. (h)(6).
Subsec. (j).
Subsec. (k).
1994—Subsec. (a)(4).
Subsec. (b)(3)(B)(iv)(II).
Subsec. (b)(3)(D).
Subsec. (d)(3)(A)(iii).
Subsec. (d)(5)(B)(ii).
Subsec. (d)(5)(D)(iii)(III).
Subsec. (d)(5)(D)(v).
Subsec. (d)(5)(G)(ii)(I).
Subsec. (d)(5)(I).
Subsec. (d)(8)(C)(iv).
Subsec. (d)(8)(C)(v).
Subsec. (d)(10)(C)(i)(II).
Subsec. (d)(10)(D)(i)(I).
Subsec. (d)(10)(D)(ii), (iii).
Subsec. (e)(6)(B).
Subsec. (h)(5)(E).
1993—Subsec. (b)(3)(B)(i)(IX).
Subsec. (b)(3)(B)(i)(X).
Subsec. (b)(3)(B)(i)(XI).
Subsec. (b)(3)(B)(i)(XII), (XIII).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(B)(ii)(III) to (VI).
Subsec. (b)(3)(B)(iv).
Subsec. (b)(3)(B)(v).
Subsec. (b)(3)(C)(i)(II).
Subsec. (b)(3)(C)(ii).
Subsec. (b)(3)(C)(iii), (iv).
Subsec. (b)(3)(D)(ii).
Subsec. (b)(3)(D)(iii).
Subsec. (b)(4)(A).
Subsec. (d)(1)(A)(iii).
Subsec. (d)(5)(A)(i).
Subsec. (d)(5)(A)(ii).
Subsec. (d)(5)(A)(iii).
Subsec. (d)(5)(A)(v), (vi).
Subsec. (d)(5)(B)(iv).
Subsec. (d)(5)(G)(i).
"(I) an amount based on 100 percent of the hospital's target amount for the cost reporting period, as defined in subsection (b)(3)(D) of this section, or
"(II) the amount determined under paragraph (1)(A)(iii),
whichever results in the greater payment to the hospital." to reflect the probable intent of Congress.
Subsec. (d)(5)(G)(ii) to (iv).
Subsec. (d)(8)(C)(iv).
Subsec. (g)(1)(A).
Subsec. (h)(2)(D).
Subsec. (h)(5)(F).
Subsec. (h)(5)(F)(ii).
Subsec. (h)(5)(H), (I).
Subsec. (h)(5)(J).
1990—Subsec. (a)(4).
Subsec. (b)(1)(B)(ii).
Subsec. (b)(3)(B)(i)(V).
Subsec. (b)(3)(B)(i)(VI).
Subsec. (b)(3)(B)(i)(VII).
Subsec. (b)(3)(B)(i)(VIII).
Subsec. (b)(3)(B)(i)(IX).
Subsec. (b)(3)(B)(i)(X).
Subsec. (b)(3)(B)(i)(XI).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(C)(ii), (D)(ii).
Subsec. (b)(4)(A).
Subsec. (b)(4)(B), (C).
Subsec. (c)(4).
Subsec. (d)(1)(A)(iii).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(3)(A)(ii).
Subsec. (d)(3)(A)(iii) to (v).
Subsec. (d)(3)(B).
Subsec. (d)(3)(C)(ii).
"(I) on or after October 1, 1986, and before October 1, 1995, of an amount equal to the estimated reduction in the payment amounts under paragraph (5)(B) that would have resulted from the enactment of the amendments made by section 9104 of the Medicare and Medicaid Budget Reconciliation Amendments of 1985 and by section 4003(a)(1) of the Omnibus Budget Reconciliation Act of 1987 if the factor described in clause (ii)(II) of paragraph (5)(B) were applied for discharges occurring during such period instead of the factor described in clause (ii)(I) of that paragraph, and
"(II) on or after October 1, 1995, of an amount equal to the estimated reduction in the payment amounts under paragraph (5)(B) for those discharges that has resulted from the enactment of the amendments made by section 9104 of the Medicare and Medicaid Budget Reconciliation Amendments of 1985 and by section 4003(a)(1) of the Omnibus Budget Reconciliation Act of 1987."
Subsec. (d)(3)(D)(i).
Subsec. (d)(3)(D)(i)(I).
Subsec. (d)(3)(D)(ii).
Subsec. (d)(4)(D).
Subsec. (d)(5)(B)(ii).
"(I) on or after May 1, 1986, and before October 1, 1995, is equal to 1.89×((1+r).405−1), or
"(II) on or after October 1, 1995, is equal to 1.43×((1+r).5795−1),
where 'r' is the ratio of the hospital's full-time equivalent interns and residents to beds."
Subsec. (d)(5)(D)(iii).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(iii).
Subsec. (d)(5)(F)(vii)(I).
Subsec. (d)(5)(F)(vii)(II).
Subsec. (d)(8)(C)(i).
Subsec. (d)(8)(C)(i)(II).
Subsec. (d)(8)(C)(ii) to (iv).
"(I) reduces the wage index for the urban area within which the county or counties is reclassified by 1 percentage point or less (as applied under this subsection), the Secretary, in calculating such wage index under this subsection, shall exclude those counties so reclassified, or
"(II) reduces the wage index for the urban area within which the county or counties is reclassified by more than 1 percentage point (as applied under this subsection), the Secretary shall calculate and apply such wage index under this subsection separately to hospitals located in such urban area (excluding all the hospitals so reclassified) and to hospitals located in the counties so reclassified (as if each affected county were a separate area)."
Subsec. (d)(8)(D).
Subsec. (d)(10)(A).
Subsec. (d)(10)(B)(i).
Subsec. (d)(10)(B)(ii).
Subsec. (d)(10)(C)(iii)(II).
Subsec. (e)(2).
Subsec. (e)(2)(A).
Subsec. (e)(3)(A).
Subsec. (e)(4).
Subsec. (e)(5).
Subsec. (e)(6)(G).
Subsec. (g)(1)(A).
Subsec. (g)(3)(A)(v).
Subsec. (g)(3)(B).
1989—Subsec. (a)(4).
Subsec. (b)(3)(A).
Subsec. (b)(3)(B)(i)(V), (VI).
Subsec. (b)(3)(B)(ii).
Subsec. (b)(3)(C).
Subsec. (b)(3)(D).
Subsec. (b)(3)(E).
Subsec. (b)(4)(A).
Subsec. (c)(4).
Subsec. (d)(1)(B)(v).
Subsec. (d)(3)(E).
Subsec. (d)(4)(C).
Subsec. (d)(5)(C).
Subsec. (d)(5)(D).
Subsec. (d)(5)(D)(iii)(III).
Subsec. (d)(5)(D)(v).
Subsec. (d)(5)(E).
Subsec. (d)(5)(F)(iii).
Subsec. (d)(5)(F)(iv)(I).
Subsec. (d)(5)(F)(iv)(III).
Subsec. (d)(5)(F)(iv)(IV) to (VI).
Subsec. (d)(5)(F)(v)(II) to (IV).
Subsec. (d)(5)(F)(vii).
Subsec. (d)(5)(F)(viii).
Subsec. (d)(5)(G).
Subsec. (d)(5)(H).
Subsec. (d)(5)(I).
Subsec. (d)(8)(C).
"(i) If the application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10),, [sic] by treating hospitals located in a rural county or counties as being located in an urban area, reduces the wage index for that urban area (as applied under this subsection), the Secretary shall calculate and apply such wage index under this subsection separately to hospitals located in such urban area (excluding all the hospitals so treated) and to the hospitals so treated (as if each affected rural county were a separate urban area). If the application of subparagraph (B) or a decision of the Medicare Geographic Classification Review Board or the Secretary under paragraph (10),, [sic] by treating the hospitals located in a rural county or counties as not being located in the rural area in a State, reduces the wage index for that rural area (as applied under this subsection), the Secretary shall calculate and apply such wage index under this subsection as if the hospitals so treated had not been excluded from calculation of the wage index for that rural area.
"(ii) Clause (i) shall only apply to discharges occurring on or after October 1, 1989, and before October 1, 1991."
Subsec. (d)(8)(C)(i).
Subsec. (d)(8)(C)(iv).
Subsec. (d)(8)(D).
Subsec. (d)(9)(B)(ii)(IV).
Subsec. (d)(9)(D)(iii).
Subsec. (d)(9)(D)(iv).
Subsec. (d)(9)(D)(v).
Subsec. (d)(10).
Subsec. (g)(3)(A)(iv).
Subsec. (g)(3)(A)(v).
Subsec. (g)(3)(B).
Subsec. (i).
1988—Subsec. (b)(3)(B)(i)(III).
Subsec. (b)(3)(B)(i)(IV).
Subsec. (b)(3)(B)(i)(V).
Subsec. (d)(1)(A)(iii).
Subsec. (d)(2)(C)(i).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(2)(D).
Subsec. (d)(3)(A).
Subsec. (d)(3)(A)(i).
Subsec. (d)(3)(A)(ii).
Subsec. (d)(3)(C)(ii).
Subsec. (d)(3)(C)(ii)(I), (II).
Subsec. (d)(3)(C)(iii).
Subsec. (d)(5)(B)(ii)(I), (II).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(vi)(I).
Subsec. (d)(8).
Subsec. (d)(8)(B).
"(i) the rural county would otherwise be considered part of an urban area but for the fact that the rural county does not meet the standard relating to the rate of commutation between the rural county and the central county or counties of any adjacent urban area; and
"(ii) either (I) the number of residents of the rural county who commute for employment to the central county or counties of any adjacent urban area is equal to at least 15 percent of the number of residents of the rural county who are employed, or (II) the sum of the number of residents of the rural county who commute for employment to the central county or counties of any adjacent urban area and the number of residents of any adjacent urban area who commute for employment to the rural county is at least equal to 20 percent of the number of residents of the rural county who are employed."
Subsec. (d)(8)(C).
Subsec. (d)(8)(D).
Subsec. (d)(9)(C)(iv).
Subsec. (e)(6)(B).
Subsec. (f)(1)(A).
Subsec. (f)(1)(B).
Subsec. (g)(3)(A)(ii) to (iv).
Subsec. (g)(3)(A)(iv).
1987—Subsec. (a)(4).
Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(i)(II).
Subsec. (b)(3)(B)(i)(III) to (V).
Subsec. (b)(3)(B)(ii), (iii).
Subsec. (d)(1)(A)(iii).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(2)(D).
Subsec. (d)(3).
Subsec. (d)(3)(A)(i).
Subsec. (d)(3)(C)(ii).
Subsec. (d)(3)(C)(iii).
Subsec. (d)(3)(D).
Subsec. (d)(3)(D)(i).
Subsec. (d)(3)(E).
Subsec. (d)(5)(B)(ii).
Subsec. (d)(5)(C)(i)(I).
Subsec. (d)(5)(C)(i)(II).
Subsec. (d)(5)(C)(ii).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(i)(II).
Subsec. (d)(5)(F)(iii).
Subsec. (d)(5)(F)(iv)(I).
Subsec. (d)(5)(F)(vi)(I).
Subsec. (d)(8).
Subsec. (d)(9)(A)(ii).
Subsec. (d)(9)(B).
Subsec. (d)(9)(C)(iv).
Subsec. (e)(3)(B).
Subsec. (e)(4).
Subsec. (e)(5).
Subsec. (e)(6)(B).
Subsec. (e)(6)(D).
Subsec. (f)(1)(A).
Subsec. (f)(1)(B).
Subsec. (f)(3).
Subsec. (g)(1).
Subsec. (g)(3)(A)(ii) to (iv).
Subsec. (g)(3)(C).
"(i) notwithstanding any other provision of this subchapter, for the continuation of payment under the reasonable cost methodology described in
"(ii) in the design of such payment system that the aggregate payment amounts under this subchapter for such other capital-related costs for payments attributable to portions of cost reporting periods occurring during fiscal year 1988 and fiscal year 1989 shall approximate the aggregate payment amount under this subchapter that would have been made (taking into account the provisions of subparagraphs (A) and (B)) during that fiscal year but for the inclusion of such costs by the Secretary."
Subsec. (h)(4)(C).
1986—Subsec. (a)(4).
Subsec. (b)(3)(B).
Subsec. (b)(3)(B)(i)(II).
Subsec. (b)(6).
Subsec. (c)(7).
Subsec. (d)(1)(A).
Subsec. (d)(1)(C).
Subsec. (d)(1)(D).
Subsec. (d)(2)(C)(i).
Subsec. (d)(2)(C)(iv).
Subsec. (d)(3)(A).
Subsec. (d)(3)(B).
Subsec. (d)(3)(C).
Subsec. (d)(3)(C)(ii).
"(I) the sum of the additional payment amounts under paragraph (5)(B) (relating to indirect costs of medical education) if the indirect teaching adjustment factor were equal to 1.159r (as 'r' is defined in paragraph (5)(B)(ii)), and
"(II) that sum using the factor specified in paragraph (5)(B)(ii)(II)."
Subsec. (d)(3)(C)(iii).
Subsec. (d)(3)(D)(i)(I), (ii)(I).
Subsec. (d)(4)(C).
Subsec. (d)(5)(B).
Subsec. (d)(5)(B)(ii).
Subsec. (d)(5)(C)(i).
Subsec. (d)(5)(C)(i)(I).
Subsec. (d)(5)(C)(ii).
Subsec. (d)(5)(E).
Subsec. (d)(5)(F).
Subsec. (d)(5)(F)(i).
Subsec. (d)(5)(F)(iv)(I).
Subsec. (d)(5)(F)(iv)(III).
Subsec. (d)(5)(F)(v).
Subsec. (d)(5)(F)(vi)(I).
Subsec. (d)(9).
Subsec. (e)(1)(C).
Subsec. (e)(3).
Subsec. (e)(3)(A).
Subsec. (e)(4).
Subsec. (e)(5).
Subsec. (e)(5)(A).
Subsec. (e)(6)(A).
Subsec. (g)(1).
Subsec. (g)(2).
Subsec. (g)(2)(B).
Subsec. (g)(3).
Subsec. (g)(3)(A).
Subsec. (h).
Subsec. (h)(2)(C).
Subsec. (h)(4)(D).
Subsec. (h)(4)(E).
Subsec. (h)(5)(B).
1984—Subsec. (a)(2)(B).
Subsec. (a)(4).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(3)(B).
Subsec. (c)(4)(A).
Subsec. (d)(2)(D).
Subsec. (d)(3)(D)(i)(I).
Subsec. (d)(5)(B).
Subsec. (d)(5)(C)(i).
Subsec. (d)(5)(E).
Subsec. (d)(8).
Subsec. (e)(2).
Subsec. (e)(5).
Subsec. (e)(5)(A).
Subsec. (e)(6)(C).
Subsec. (e)(6)(C)(i).
Subsec. (e)(6)(C)(iii).
Subsec. (e)(6)(D).
Subsec. (e)(6)(J).
1983—Subsec. (a)(1)(D).
Subsec. (a)(4).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3)(B).
Subsec. (b)(6).
Subsec. (b)(6)(C).
Subsec. (c)(1).
Subsec. (c)(3)(A).
Subsec. (c)(3)(B).
Subsec. (c)(4) to (6).
Subsec. (d).
Subsecs. (e) to (g).
1982—Subsec. (d).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2022 Amendment
Effective Date of 2020 Amendment
Effective Date of 2015 Amendment
Amendment by section 106(b)(2)(B) of
Effective Date of 2014 Amendment
Effective Date of 2011 Amendment
Amendment by
Effective Date of 2010 Amendment
"(1)
"(2) GME.—Section 1886(h)(4)(J) of the Social Security Act [
"(3) IME.—Section 1886(d)(5)(B)(x)(III) of the Social Security Act [
Effective Date of 2007 Amendment
Effective Date of 2006 Amendment
Amendment by section 109(a)(2) of
Amendment by section 205(b)(1) of
Effective Date of 2003 Amendment
"(1)
"(2)
"(A) the Secretary shall automatically reconsider the application as an application for fiscal year 2005 under the amendments made by this section; and
"(B) the maximum time period otherwise permitted for such classification of the service or technology shall be extended by 12 months."
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(b), (e), (f), (h), (k)(15)–(17)] of
Amendment by section 1000(a)(6) [title IV, §401(a)] of
"(A) DGME.—The amendments made by paragraph (1) [amending this section] apply to cost reporting periods that begin on or after the date of the enactment of this Act [Nov. 29, 1999].
"(B) IME.—The amendment made by paragraph (2) [amending this section] applies to discharges occurring in cost reporting periods that begin on or after such date of enactment."
"(A) DGME.—The amendment made by paragraph (1) [amending this section] applies to cost reporting periods beginning on or after April 1, 2000.
"(B) IME.—The amendment made by paragraph (2) [amending this section] applies to discharges occurring on or after April 1, 2000."
"(A) payments to hospitals under section 1886(h) of the Social Security Act (
"(B) payments to hospitals under section 1886(d)(5)(B)(v) of such Act (
Effective Date of 1997 Amendment
Amendment by section 4022(b) of
Amendment by section 4201(c)(1), (4) of
Effective Date of 1994 Amendment
Effective Date of 1993 Amendment
Effective Date of 1990 Amendment
"(1) in the case of any services provided during the day immediately preceding the date of a patient's admission (without regard to whether the services are related to the admission), to services furnished on or after the date of the enactment of this Act [Nov. 5, 1990] and before October 1, 1991;
"(2) in the case of diagnostic services (including clinical diagnostic laboratory tests), to services furnished on or after January 1, 1991; and
"(3) in the case of any other services, to services furnished on or after October 1, 1991."
Effective Date of 1989 Amendment
"(A) in the case of a hospital classified by the Secretary of Health and Human Services as a hospital involved extensively in treatment for or research on cancer under section 1886(d)(5)(I) of the Social Security Act [
"(B) in the case of a hospital that is not described in subparagraph (A), such amendments shall apply with respect to portions of cost reporting periods or discharges occurring during and after fiscal year 1987 for purposes of section 1886(g) of the Social Security Act [
"(C) such amendments shall take effect 30 days after the date of the enactment of this Act for purposes of determining the eligibility of a hospital to receive periodic interim payments under section 1815(e)(2) of the Social Security Act [
[
Effective Date of 1988 Amendment
Amendment by section 1018(r)(1) of
Amendment by
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
"(1)
"(A) the amendments made by subsections (a) and (c) [amending this section] shall apply to payments made under section 1886(d)(1)(A)(iii) of the Social Security Act [
"(B) for discharges occurring on or after October 1, 1988, the applicable percentage increase (described in section 1886(b)(3)(B) of such Act [
"(2)
"(A) the amendment made by subsections (a) and (c) [amending this section] shall apply to payments under section 1886(d)(1)(A)(ii)(I) of the Social Security Act made on the basis of discharges occurring during a cost reporting period of a hospital, for the hospital's cost reporting period beginning on or after October 1, 1987;
"(B) notwithstanding subparagraph (A), for cost reporting period beginning during fiscal year 1988, the applicable percentage increase (as defined in section 1886(b)(3)(B) of such Act [
"(i) first 51 days of the cost reporting period shall be 0 percent,
"(ii) next 132 days of such period shall be 2.7 percent, and
"(iii) remainder of such period of the cost reporting period shall be the applicable percentage increase (as so defined, as amended by subsection (a)); and
"(C) for cost reporting periods beginning on or after October 1, 1988, the applicable percentage increase (as so defined) with respect to the previous cost reporting period shall be deemed to have been the applicable percentage increase (as so defined, as amended by subsection (a)).
"(3)
"(A) the amendments made by subsection (e) [amending this section] shall apply to cost reporting periods beginning on or after October 1, 1987;
"(B) notwithstanding subparagraph (A), for the hospital's cost reporting period beginning during fiscal year 1988, payment under title XVIII of the Social Security Act [
"(C) for cost reporting periods beginning on or after October 1, 1988, the applicable percentage increase (as so defined) with respect to the cost reporting period beginning during fiscal year 1988 shall be deemed to have been 2.7 percent.
"(4)
"(5)
"(6)
Amendment by
Effective Date of 1986 Amendment
Amendment by section 1895(b)(3), (9) of
"(i) Subject to clause (ii), the amendments made by subparagraph (A) [amending this section] shall apply to payments for discharges occurring on or after October 1, 1986.
"(ii) An appeal for classification of a rural hospital as a regional referral center, pursuant to the amendments made by subparagraph (A), which is filed before January 1, 1987, and which is approved shall be effective with respect to discharges occurring on or after October 1, 1986."
Amendment by section 9320(g) of
"(1)
"(A) the amendment made by subsection (b) [amending this section] shall apply to payments made under section 1886(d)(1)(A) of such Act [
"(B) for discharges occurring on or after October 1, 1986, the applicable percentage increase (described in section 1886(b)(3)(B) [
"(2)
"(A) the amendment made by subsection (b) [amending this section] shall apply to payments under section 1886(d)(1)(A) of the Social Security Act [
"(B) notwithstanding subparagraph (A), for the cost reporting period beginning during fiscal year 1986, the applicable percentage increase (as defined in section 1886(b)(3)(B) of such Act [
"(i) first 7 months of the cost reporting period shall be 0 percent, and
"(ii) for the remaining 5 months of the cost reporting period shall be ½ percent; and
"(C) for cost reporting periods beginning on or after October 1, 1986, the applicable percentage increase (as so defined) with respect to the previous cost reporting period shall be deemed to have been ½ percent.
"(3)
"(A) the amendment made by subsection (b) [amending this section] shall apply to cost reporting periods beginning on or after October 1, 1985;
"(B) notwithstanding subparagraph (A), for the hospital's cost reporting period beginning during fiscal year 1986, payment under title XVIII of the Social Security Act [
"(C) for cost reporting periods beginning on or after October 1, 1986, the applicable percentage increase (as so defined) with respect to the cost reporting period beginning during fiscal year 1986 shall be deemed to have been ½ percent.
"(4)
"(1)
"(2)
"(A) to cost reporting periods beginning on or after October 1, 1985, but
"(B) notwithstanding subparagraph (A), for a hospital's cost reporting period beginning during fiscal year 1986, for purposes of section 1886(d)(1)(A) of the Social Security Act [
"(i) during the first 7 months of the period the 'target percentage' is 50 percent and the 'DRG percentage' is 50 percent, and
"(ii) during the remaining 5 months of the period the 'target percentage' is 45 percent and the 'DRG percentage' is 55 percent.
"(3)
"(4)
"(A) Notwithstanding any other provision of this subsection, the amendments made by this section [amending this section] shall not apply to payments with respect to the operating costs of inpatient hospital services (as defined in section 1886(a)(4) of the Social Security Act [
"(B) Notwithstanding any other provision of law, for a cost reporting period beginning during fiscal year 1986 of a subsection (d) hospital to which the amendments made by this section [amending this section] do not apply, for purposes of section 1886(d)(1)(A) of of [sic] Social Security Act [
"(i) during the first 7 months of the period the 'target percentage' is 50 percent and the 'DRG percentage' is 50 percent, and
"(ii) during the remaining 5 months of the period the 'target percentage' is 25 percent and the 'DRG percentage' is 75 percent.
"(C) Notwithstanding any other provision of law, for purposes of section 1886(d)(1)(D) of such Act [
"(1) Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to discharges occurring on or after May 1, 1986.
"(2) The amendments made by this section shall not first be applied to discharges occurring as of a date unless, for discharges occurring on that date, the amendments made by section 9105 [amending this section] are also being applied."
Effective and Termination Dates of 1984 Amendment
Amendment by
"(1) Except as provided in paragraph (2), the amendments made by subsections (b) and (c) [amending this section] shall be effective with respect to cost reporting periods beginning on or after October 1, 1983, and the amendment made by subsection (a) [amending this section] shall be effective with respect to cost reporting periods beginning on or after October 1, 1984.
"(2) The amendment made by subsection (b) [amending this section] shall not apply so as to reduce any payment under section 1886(d) of the Social Security Act [
Amendment by section 2313(a), (b), (d) of
Amendment by section 2354(b)(42)–(44) of
Effective Date of 1983 Amendment
"(a)(1) Except as provided in section 602(l) [amending
"(2) Section 1866(a)(1)(F) of the Social Security Act [
"(b) The Secretary shall make an appropriate reduction in the payment amount under section 1886(d) of the Social Security Act [
"(c)(1) The Secretary shall cause to be published in the Federal Register a notice of the interim final DRG prospective payment rates established under subsection (d) of section 1886 of the Social Security Act [
"(2) A modification under paragraph (1) that reduces a prospective payment rate shall apply only to discharges occurring after 30 days after the date the notice of the modification is published in the Federal Register.
"(3) Rules to implement the amendments made by this title [amending this section and
Amendment by
Effective Date
Regulations
Construction of 2010 Amendment
Transfer of Functions
Prospective Payment Assessment Commission (ProPAC) was terminated and its assets and staff transferred to the Medicare Payment Advisory Commission (MedPAC) by section 4022(c)(2), (3) of
Implementation of Amendment by Pub. L. 118–42
Implementation of Amendment by Pub. L. 117–328
Implementation of Amendment by Pub. L. 117–229
Implementation of Amendment by Pub. L. 117–180
Implementation of Amendment by Pub. L. 116–136
Increasing Access to Post-Acute Care During Emergency Period
"(a)
"(b)
"(1)
"(2)
Application of Change in Medicare Classification for Certain Hospitals
"(1)
"(A) Payment for inpatient operating costs shall be made on a reasonable cost basis in the manner provided in section 412.526(c)(3) of title 42, Code of Federal Regulations (as in effect on January 1, 2015) and in any subsequent modifications.
"(B) Payment for capital costs shall be made in the manner provided by section 412.526(c)(4) of title 42, Code of Federal Regulations (as in effect on such date).
"(C) Claims for payment for Medicare beneficiaries who are discharged on or after January 1, 2017, shall be processed as claims which are paid on a reasonable cost basis as described in section 412.526(c) of title 42, Code of Federal Regulations (as in effect on such date).
"(2)
Implementation of Amendment by Pub. L. 114–113
Calculation of Length of Stay Excluding Cases Paid on a Site Neutral Basis
"(A)
"(B)
[
Review of Treatment of Certain LTCHs
"(1)
"(2)
Special Rule for Fiscal Year 2011 and Adjustment for Certain Hospitals in Fiscal Year 2011
"(2)
"(A)
"(B)
"(3)
"(A)
"(i) a reclassification of its wage index for purposes of such section was extended pursuant to the amendment made by paragraph (1); and
"(ii) the wage index applicable for such hospital for the period beginning on October 1, 2010, and ending on March 31, 2011, was lower than for the period beginning on April 1, 2011, and ending on September 30, 2011, by reason of the application of paragraph (2)(B);
"the Secretary shall pay such hospital an additional payment that reflects the difference between the wage index for such periods.
"(B)
Similar provisions were contained in
No Reopening of Previously Bundled Claims
"(1)
"(2)
Implementation of Amendment by Pub. L. 111–192
Payment for Qualifying Hospitals
"(a)
"(b)
"(c)
"(d)
Value-Based Purchasing Demonstration Programs
"(1)
"(A)
"(i)
"(ii)
"(iii)
"(B)
"(C)
"(D)
"(i) recommendations on the establishment of a permanent value-based purchasing program under the Medicare program for critical access hospitals with respect to inpatient critical access hospital services; and
"(ii) recommendations for such other legislation and administrative action as the Secretary determines appropriate.
"(2)
"(A)
"(i)
"(ii)
"(iii)
"(iv)
"(B)
"(C)
"(D)
"(i) recommendations on the establishment of a permanent value-based purchasing program under the Medicare program for applicable hospitals with respect to inpatient hospital services; and
"(ii) recommendations for such other legislation and administrative action as the Secretary determines appropriate."
Reforming the Medicare Hospital Wage Index System
"(b)
"(1)
"(2)
"(A) uses Bureau of Labor Statistics data, or other data or methodologies, to calculate relative wages for each geographic area involved;
"(B) minimizes wage index adjustments between and within metropolitan statistical areas and statewide rural areas;
"(C) includes methods to minimize the volatility of wage index adjustments that result from implementation of policy, while maintaining budget neutrality in applying such adjustments;
"(D) takes into account the effect that implementation of the system would have on health care providers and on each region of the country;
"(E) addresses issues related to occupational mix, such as staffing practices and ratios, and any evidence on the effect on quality of care or patient safety as a result of the implementation of the system; and
"(F) provides for a transition.
"(3)
"(c)
Application of Budget Neutrality on a National Basis in the Calculation of the Medicare Hospital Wage Index Floor
Effect on Temporary FTE Cap Adjustments
Graduate Nurse Education Demonstration
"(a)
"(1)
"(A)
"(B)
"(C)
"(2)
"(A)
"(B)
"(3)
"(4)
"(b)
"(1) the obligations of the eligible partners with respect to the provision of qualified training; and
"(2) the obligation of the eligible hospital to reimburse such eligible partners applicable (in a timely manner) for the costs of such qualified training attributable to partner.
"(c)
"(1) The growth in the number of advanced practice registered nurses with respect to a specific base year as a result of the demonstration.
"(2) The growth for each of the specialties described in subparagraphs (A) through (D) of subsection (e)(1).
"(3) The costs to the Medicare program under title XVIII of the Social Security Act as a result of the demonstration.
"(4) Other items the Secretary determines appropriate and relevant.
"(d)
"(1)
"(2)
"(3)
"(e)
"(1)
"(A) A clinical nurse specialist (as defined in subsection (aa)(5) of section 1861 of the Social Security Act (
"(B) A nurse practitioner (as defined in such subsection).
"(C) A certified registered nurse anesthetist (as defined in subsection (bb)(2) of such section).
"(D) A certified nurse-midwife (as defined in subsection (gg)(2) of such section).
"(2)
"(3)
"(4)
"(5)
"(A) 1 or more applicable schools of nursing; and
"(B) 2 or more applicable non-hospital community-based care settings.
"(6)
"(A) An applicable non-hospital community-based care setting.
"(B) An applicable school of nursing.
"(7)
"(A)
"(i) that provides an advanced practice registered nurse with the clinical skills necessary to provide primary care, preventive care, transitional care, chronic care management, and other services appropriate for individuals entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act [
"(ii) subject to subparagraph (B), at least half of which is provided in a non-hospital community-based care setting.
"(B)
"(8)
Payment for Long-Term Care Hospital Services
"(1)
"(A) through June 30, 2016, and for discharges occurring on or after October 1, 2016, and before October 1, 2017, section 412.536 of title 42, Code of Federal Regulations, or any similar provision, to freestanding long-term care hospitals or to a long-term care hospital, or satellite facility, that as of December 29, 2007, was co-located with an entity that is a provider-based, off-campus location of a subsection (d) hospital which did not provide services payable under section 1886(d) of the Social Security Act [
"(B) such section or section 412.534 of title 42, Code of Federal Regulations, or any similar provisions, to a long-term care hospital identified by the amendment made by section 4417(a) of the Balanced Budget Act of 1997 (
"(2)
"(A)
"(B)
"(i)
"(ii)
"(C)
"(3)
"(4)
[
Moratorium on the Establishment of Long-Term Care Hospitals, Long-Term Care Satellite Facilities and on the Increase of Long-Term Care Hospital Beds in Existing Long-Term Care Hospitals or Satellite Facilities
"(1)
"(A) subject to paragraph (2), on the establishment and classification of a long-term care hospital or satellite facility, other than an existing long-term care hospital or facility; and
"(B) subject to paragraph (3), on an increase of long-term care hospital beds in existing long-term care hospitals or satellite facilities.
"(2)
"(A) began its qualifying period for payment as a long-term care hospital under section 412.23(e) of title 42, Code of Federal Regulations, on or before the date of the enactment of this Act;
"(B) has a binding written agreement with an outside, unrelated party for the actual construction, renovation, lease, or demolition for a long-term care hospital, and has expended, before the date of the enactment of this Act, at least 10 percent of the estimated cost of the project (or, if less, $2,500,000); or
"(C) has obtained an approved certificate of need in a State where one is required on or before the date of the enactment of this Act.
"(3)
"(A)
"(i) is located in a State where there is only one other long-term care hospital; and
"(ii) requests an increase in beds following the closure or the decrease in the number of beds of another long-term care hospital in the State.
"(B)
"(4)
"(5)
"(6)
"(7)
"(A) began its qualifying period for payment as a long-term care hospital under section 412.23(e) of title 42, Code of Federal Regulations, on or before the date of enactment of this paragraph [Apr. 1, 2014];
"(B) has a binding written agreement as of the date of the enactment of this paragraph with an outside, unrelated party for the actual construction, renovation, lease, or demolition for a long-term care hospital, and has expended, before such date of enactment, at least 10 percent of the estimated cost of the project (or, if less, $2,500,000); or
"(C) has obtained an approved certificate of need in a State where one is required on or before such date of enactment."
[
[For effective date of amendment by
Expanded Review of Medical Necessity
"(1)
"(2)
"(A) provide for a statistically valid and representative sample of admissions of such individuals sufficient to provide results at a 95 percent confidence interval; and
"(B) guarantee that at least 75 percent of overpayments received by long-term care hospitals for medically unnecessary admissions and continued stays of individuals in long-term care hospitals will be identified and recovered and that related days of care will not be counted toward the length of stay requirement contained in section 1886(d)(1)(B)(iv) of the Social Security Act (
"(3)
"(4)
"(A)
"(B)
"(5)
Extending Certain Medicare Hospital Wage Index Reclassifications
"(2)
"(3)
Correction of Application of Wage Index During Tax Relief and Health Care Act Extension
"(1) a reclassification of its wage index for purposes of such section was extended for the period beginning on April 1, 2007, and ending on September 30, 2007, pursuant to subsection (a) of section 106 of division B of the Tax Relief and Health Care Act of 2006 [
"(2) the wage index applicable for such hospital during such period was lower than the wage index applicable for such hospital during the period beginning on October 1, 2006, and ending on March 31, 2007,
the Secretary [of Health and Human Services] shall apply the higher wage index that was applicable for such hospital during the period beginning on October 1, 2006, and ending on March 31, 2007, for the entire fiscal year 2007. If the Secretary determines that the application of the preceding sentence to a hospital will result in a hospital being owed additional reimbursement, the Secretary shall make such payments within 90 days after the settlement of the applicable cost report."
Correction of Mid-Year Reclassification Expiration
[
["(b)
["(1)
["(2)
["(c)
["(1)
[
["(b)
["(1)
["(2)
["(c)
Plan for Hospital Value Based Purchasing Program
"(1)
"(2)
"(A) The on-going development, selection, and modification process for measures of quality and efficiency in hospital inpatient settings.
"(B) The reporting, collection, and validation of quality data.
"(C) The structure of value based payment adjustments, including the determination of thresholds or improvements in quality that would substantiate a payment adjustment, the size of such payments, and the sources of funding for the value based payments.
"(D) The disclosure of information on hospital performance.
In developing such a plan, the Secretary shall consult with relevant affected parties and shall consider experience with such demonstrations that are relevant to the value based purchasing program under this subsection."
Extended Phase-In of the Inpatient Rehabilitation Facility Classification Criteria
"(a)
"(b)
"(c) IRF
[
Medicare Demonstration Projects To Permit Gainsharing Arrangements
"(a)
"(b)
"(1)
"(2)
"(A) is submitted to the Secretary prior to implementation of the project; and
"(B) includes a plan outlining how the project will achieve improvements in quality and efficiency.
"(3)
"(4)
"(5)
"(6)
"(c)
"(1)
"(A) remuneration for purposes of section 1128B of the Social Security Act (
"(B) a payment intended to induce a physician to reduce or limit services to a patient entitled to benefits under Medicare or a State plan approved under title XIX of such Act [
"(C) a financial relationship for purposes of section 1877 of such Act (
"(2)
"(d)
"(1)
"(2)
"(3)
"(e)
"(1)
"(2)
"(3)
"(4)
"(f)
"(1)
"(2)
"(g)
"(1)
"(2)
"(3)
"(4)
"(5)
More Frequent Update in Weights Used in Hospital Market Basket
"(a)
"(b)
Rural Community Hospital Demonstration Program
"(a)
"(1)
"(2)
"(3)
"(4)
"(5)
"(6)
"(b)
"(1)
"(A) for discharges occurring in the first cost reporting period beginning on or after the implementation of the demonstration program, the reasonable costs of providing such services; and
"(B) for discharges occurring in a subsequent cost reporting period under the demonstration program, the lesser of—
"(i) the reasonable costs of providing such services in the cost reporting period involved; or
"(ii) the target amount (as defined in paragraph (2)), applicable to the cost reporting period involved.
"(2)
"(A) in the case of the second such cost reporting period for which this subsection is in effect, the reasonable costs of providing such covered inpatient hospital services as determined under paragraph (1)(A), and
"(B) in the case of a later cost reporting period, the target amount for the preceding 12-month cost reporting period,
increased by the applicable percentage increase (under clause (i) of section 1886(b)(3)(B) of the Social Security Act (
"(c)
"(1)
"(2)
"(d)
"(e)
"(f)
"(1)
"(A)
"(i) is located in a rural area (as defined in section 1886(d)(2)(D) of such Act (
"(ii) subject to subparagraph (B), has fewer than 51 acute care inpatient beds, as reported in its most recent cost report;
"(iii) makes available 24-hour emergency care services; and
"(iv) is not eligible for designation, or has not been designated, as a critical access hospital under section 1820 of the Social Security Act (
"(B)
"(2)
"(g)
"(1)
"(2)
"(3)
"(4)
"(A) shall provide for the continued participation of such rural community hospital in the demonstration program during the 15-year extension period unless the rural community hospital makes an election, in such form and manner as the Secretary may specify, to discontinue such participation; and
"(B) in calculating the amount of payment under subsection (b) to the rural community hospital for covered inpatient hospital services furnished by the hospital during each 5-year period in such 15-year extension period, shall substitute, under paragraph (1)(A) of such subsection—
"(i) the reasonable costs of providing such services for discharges occurring in the first cost reporting period beginning on or after the first day of each applicable 5-year period in the 15-year extension period, for
"(ii) the reasonable costs of providing such services for discharges occurring in the first cost reporting period beginning on or after the implementation of the demonstration program.
"(5)
"(A)
"(B)
"(6)
"(A)
"(B)
"(i) shall give priority to rural community hospitals located in one of the 20 States with the lowest population densities (as determined by the Secretary using the 2015 Statistical Abstract of the United States); and
"(ii) may consider—
"(I) closures of hospitals located in rural areas in the State in which the rural community hospital is located during the 5-year period immediately preceding the date of the enactment of this paragraph; and
"(II) the population density of the State in which the rural community hospital is located."
Applicability of Chapter 35 of Title 44
Report on Extension of Applications Under Redistribution Program
MedPAC Study on Rural Hospital Payment Adjustments
"(a)
"(b)
"(1)
"(2)
GAO Study and Report on Appropriateness of Payments Under the Prospective Payment System for Inpatient Hospital Services
"(1)
"(A) the appropriate level and distribution of payments in relation to costs under the prospective payment system under section 1886 of the Social Security Act (
"(B) whether there is a need to adjust such payments under such system to reflect legitimate differences in costs across different geographic areas, kinds of hospitals, and types of cases.
"(2)
Not Budget Neutral
One-Time Appeals Process for Hospital Wage Index Classification
"(a)
"(1)
"(2)
"(A) Such an appeal may be filed as soon as possible after the date of the enactment of this Act [Dec. 8, 2003] but shall be filed by not later than February 15, 2004.
"(B) Such an appeal shall be heard by the Medicare Geographic Reclassification Review Board.
"(C) There shall be no further administrative or judicial review of a decision of such Board.
"(3)
"(4)
"(b)
"(c)
"(1) does not qualify for a change in wage index classification under paragraph (8) or (10) of section 1886(d) of the Social Security Act (
"(2) meets such other criteria, such as quality, as the Secretary may specify by instruction or otherwise.
The Secretary may modify the wage comparison guidelines promulgated under section 1886(d)(10)(D) of such Act (
"(d)
"(e)
"(f)
"(g)
Exception to Initial Residency Period for Geriatric Residency or Fellowship Programs
"(a)
"(b)
Treatment of Volunteer Supervision
"(a)
"(b)
"(1)
"(2)
Furnishing Hospitals With Information To Compute DSH Formula
Special Rules for Payment for Fiscal Year 2001
"(1) for discharges occurring on or after October 1, 2000, and before April 1, 2001, shall be determined in accordance with subclause (XVI) of such section as in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for discharges occurring on or after April 1, 2001, and before October 1, 2001, shall be equal to—
"(A) the market basket percentage increase plus 1.1 percentage points for hospitals (other than sole community hospitals) in all areas; and
"(B) the market basket percentage increase for sole community hospitals."
"(1) for discharges occurring on or after October 1, 2000, and before April 1, 2001, shall be adjusted as provided by clause (ix)(III) of such section as in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for discharges occurring on or after April 1, 2001, and before October 1, 2001, shall, instead of being reduced by 3 percent as provided by clause (ix)(III) of such section as in effect after the date of the enactment of this Act, be reduced by 1 percent."
"(a)
"(1) Section 301(b)(2)(A) [set out as a note above] (relating to acute care hospital payment update).
"(2) Section 302(b) [set out as a note above] (relating to IME percentage adjustment).
"(3) Section 303(b)(2) [set out as a note above] (relating to DSH payments)."
Consideration of Price of Blood and Blood Products in Market Basket Index
MedPAC Study and Report Regarding Certain Hospital Costs
"(1)
"(A) any increased costs incurred by subsection (d) hospitals (as defined in paragraph (1)(B) of section 1886(d) of the Social Security Act (
"(i) complying with new blood safety measure requirements; and
"(ii) providing such services using new technologies;
"(B) the extent to which the prospective payment system for such services under such section provides adequate and timely recognition of such increased costs;
"(C) the prospects for (and to the extent practicable, the magnitude of) cost increases that hospitals will incur in providing such services that are attributable to complying with new blood safety measure requirements and providing such services using new technologies during the 10 years after the date of the enactment of this Act [Dec. 21, 2000]; and
"(D) the feasibility and advisability of establishing mechanisms under such payment system to provide for more timely and accurate recognition of such cost increases in the future.
"(2)
"(A) hospitals;
"(B) organizations involved in the collection, processing, and delivery of blood; and
"(C) organizations involved in the development of new blood safety technologies.
"(3)
Process To Permit Statewide Wage Index Calculation and Application
"(1)
"(2)
Collection of Information on Occupational Mix
"(A) the collection of data under paragraph (1) [set out above]; and
"(B) the measurement under the third sentence of section 1886(d)(3)(E) [
Payment for Inpatient Services of Psychiatric Hospitals
Expediting Recognition of New Technologies Into Inpatient PPS Coding System
"(1)
"(2)
Consultation Prior to Rulemaking
Special Payments To Maintain 6.5 Percent IME Payment for Fiscal Year 2000
"(1)
"(2)
Data Collection
"(1)
"(2)
Per Discharge Prospective Payment System for Long-Term Care Hospitals
"(1)
"(2)
"(a)
"(1)
"(2)
"(b)
"(c)
Per Diem Prospective Payment System for Psychiatric Hospitals
"(a)
"(1)
"(2)
"(3)
"(b)
"(c)
Study on Impact of Implementation of Prospective Payment System
"(1)
"(2)
MedPAC Study on Medicare Payment for Nonphysician Health Professional Clinical Training in Hospitals
"(a)
"(b)
Not Counting Against Numerical Limitation Certain Interns and Residents Transferred from a VA Residency Program That Loses Accreditation
"(1)
"(2)
"(A) participated in graduate medical education at a facility of the Department of Veterans Affairs;
"(B) was subsequently transferred on or after January 1, 1997, and before July 31, 1998, to a hospital that was not a Department of Veterans Affairs facility; and
"(C) was transferred because the approved medical residency program in which the resident or intern participated would lose accreditation by the Accreditation Council on Graduate Medical Education if such program continued to train residents at the Department of Veterans Affairs facility.
"(3)
"(A)
"(B)
GAO Study on Geographic Reclassification
"(a)
"(1) the magnitude of the effect of geographic reclassification on rural hospitals that are not reclassified;
"(2) whether the current thresholds used in geographic reclassification reclassify hospitals to the appropriate labor markets;
"(3) the effect of eliminating geographic reclassification through use of the occupational mix data;
"(4) the group reclassification policy;
"(5) changes in the number of reclassifications and the compositions of the groups;
"(6) the effect of State-specific budget neutrality compared to national budget neutrality; and
"(7) whether there are sufficient controls over the intermediary evaluation of the wage data reported by hospitals.
"(b)
Continuing Treatment of Previously Designated Centers
"(1)
"(2)
Hospital Geographic Reclassification Permitted for Purposes of Disproportionate Share Payment Adjustments
"(a)
"(b)
"(c)
Temporary Relief for Certain Non-Teaching, Non-DSH Hospitals
"(1)
"(A) beginning in fiscal year 1998 the amount of payment made to the hospital under section 1886(d) of the Social Security Act [
"(B) beginning in fiscal year 1999 the amount of payment made to the hospital under section 1886(d) of the Social Security Act for discharges occurring during such fiscal year only shall be increased as though the applicable percentage increase (otherwise applicable to discharges occurring during fiscal year 1999 under section 1886(b)(3)(B)(i)(XIV) of the Social Security Act (
Subparagraph (A) shall not apply in computing the increase under subparagraph (B) and neither subparagraph shall affect payment for discharges for any hospital occurring during a fiscal year after fiscal year 1999. Payment increases under this subsection for discharges occurring during a fiscal year are subject to settlement after the close of the fiscal year.
"(2)
"(A) that is described in paragraph (3) for such period;
"(B) that is located in a State in which the amount of the aggregate payments under section 1886(d) of such Act [
"(C) with respect to which the payments under section 1886(d) of such Act (
"(3)
"(A) is not receiving any additional payment amount described in section 1886(d)(5)(F) of such Act (
"(B) is not receiving any additional payment under section 1886(d)(5)(B) of such Act (
"(C) does not qualify for payment under section 1886(d)(5)(G) of such Act (
Formula for Additional Payment Amounts; Report
"(b)
"(1)
"(2)
"(A) establish a single threshold for costs incurred by hospitals in serving low-income patients, and
"(B) consider the costs described in paragraph (3).
"(3) The costs described in this paragraph are as follows:
"(A) The costs incurred by the hospital during a period (as determined by the Secretary) of furnishing hospital services to individuals who are entitled to benefits under part A of title XVIII of the Social Security Act [
"(B) The costs incurred by the hospital during a period (as so determined) of furnishing hospital services to individuals who receive medical assistance under the State plan under title XIX of such Act [
"(c)
Geographic Reclassification for Certain Disproportionately Large Hospitals
"(a)
"(b)
"(1) the average hourly wage paid by the hospital is not less than 108 percent of the average hourly wage paid by all other hospitals located in the Metropolitan Statistical Area (or the New England County Metropolitan Area) in which the hospital is located;
"(2) not less than 40 percent of the adjusted uninflated wages paid by all hospitals located in such Area is attributable to wages paid by the hospital; and
"(3) the hospital submitted an application requesting reclassification for purposes of wage index under section 1886(d)(10)(C) of such Act (
Floor on Area Wage Index
"(a)
"(b)
"(c)
Report on Effect of Amendments by Pub. L. 105–33, §4415, on Psychiatric Hospitals
Treatment of Certain Cancer Hospitals; Payment
"(1)
"(2)
"(3)
"(1)
"(2)
"(A) the hospital's cost reporting period beginning during fiscal year 1990, or
"(B) pursuant to an election under 1886(b)(3)(G) of such Act (
"(3)
Report on Exceptions
Development of Proposal on Payments for Long-Term Care Hospitals
"(a)
"(1)
"(2)
"(A) may require such long-term care hospitals to submit such information to the Secretary as the Secretary may require to develop the proposal; and
"(B) shall consider several payment methodologies, including the feasibility of expanding the current diagnosis-related groups and prospective payment system established under section 1886(d) of the Social Security Act [
"(b)
Dissemination of Information on High Per Discharge Relative Values for In-Hospital Physicians' Services
"(a)
"(1)
"(A) the hospital-specific per discharge relative value under subsection (b); and
"(B) whether the hospital-specific relative value is projected to be excessive (as determined based on such value represented as a percentage of the median of hospital-specific per discharge relative values determined under subsection (b)).
"(2)
"(b)
"(1)
"(2)
"(A) the average per discharge relative value (as determined under section 1848(c)(2) of such Act [
"(B) the equivalent per discharge relative value (as determined under such section) for physicians' services furnished to inpatients of the hospital by interns and residents of the hospital during the second year preceding that calendar year, adjusted for variations in case-mix among hospitals, and in disproportionate share status and teaching status among hospitals (as determined by the Secretary under paragraph (3)).
The Secretary shall determine the equivalent relative value unit per discharge for interns and residents based on the best available data and may make such adjustment in the aggregate.
"(3)
"(c)
"(1)
"(2)
"(A) if (in accordance with requirements for hospitals established by the Joint Commission on Accreditation of Health Organizations)—
"(i) the individual is subject to bylaws, rules, and regulations established by the hospital to provide a framework for the self-governance of medical staff activities,
"(ii) subject to the bylaws, rules, and regulations, the individual has clinical privileges granted by the hospital's governing body, and
"(iii) under the clinical privileges, the individual may provide physicians' services independently within the scope of the individual's clinical privileges, or
"(B) if the physician provides at least one service to an individual entitled to benefits under this title in that hospital.
"(3)
"(4)
"(5)
"(6)
Incentive Payments Under Plans for Voluntary Reduction in Number of Residents; Relation to Demonstration Projects and Authority; Regulations
"(b)
"(1) Section 1886(h)(6) of the Social Security Act [
"(2) Effective May 27, 1997, the Secretary of Health and Human Services is not authorized to approve any demonstration project described in paragraph (3) for any residency training year beginning before July 1, 2006.
"(3) A demonstration project described in this paragraph is a project that primarily provides for additional payments under title XVIII of the Social Security Act [
"(c)
Demonstration Project on Use of Consortia
"(a)
"(b)
"(1) The consortium consists of a teaching hospital with one or more approved medical residency training programs and one or more of the following entities:
"(A) A school of allopathic medicine or osteopathic medicine.
"(B) Another teaching hospital, which may be a children's hospital.
"(C) A Federally qualified health center.
"(D) A medical group practice.
"(E) A managed care entity.
"(F) An entity furnishing outpatient services.
"(G) Such other entity as the Secretary determines to be appropriate.
"(2) The members of the consortium have agreed to participate in the programs of graduate medical education that are operated by the entities in the consortium.
"(3) With respect to the receipt by the consortium of payments made pursuant to this section, the members of the consortium have agreed on a method for allocating the payments among the members.
"(4) The consortium meets such additional requirements as the Secretary may establish.
"(c)
Recommendations on Long-Term Policies Regarding Teaching Hospitals and Graduate Medical Education
"(a)
"(1) Possible methodologies for making payments for graduate medical education and the selection of entities to receive such payments. Matters considered under this paragraph shall include—
"(A) issues regarding children's hospitals and approved medical residency training programs in pediatrics, and
"(B) whether and to what extent payments are being made (or should be made) for training in the nursing and other allied health professions.
"(2) Federal policies regarding international medical graduates.
"(3) The dependence of schools of medicine on service-generated income.
"(4) Whether and to what extent the needs of the United States regarding the supply of physicians, in the aggregate and in different specialties, will change during the 10-year period beginning on October 1, 1997, and whether and to what extent any such changes will have significant financial effects on teaching hospitals.
"(5) Methods for promoting an appropriate number, mix, and geographical distribution of health professionals.
"(b)
"(1) deans from allopathic and osteopathic schools of medicine;
"(2) chief executive officers (or equivalent administrative heads) from academic health centers, integrated health care systems, approved medical residency training programs, and teaching hospitals that sponsor approved medical residency training programs;
"(3) chairs of departments or divisions from allopathic and osteopathic schools of medicine, schools of dentistry, and approved medical residency training programs in oral surgery;
"(4) individuals with leadership experience from representative fields of non-physician health professionals;
"(5) individuals with substantial experience in the study of issues regarding the composition of the health care workforce of the United States; and
"(6) individuals with expertise in health care payment policies.
"(c)
Study of Hospital Overhead and Supervisory Physician Components of Direct Medical Education Costs
"(a)
"(1) variations among hospitals in the hospital overhead and supervisory physician components of their direct medical education costs taken into account under section 1886(h) of the Social Security Act [
"(2) the reasons for such variations.
"(b)
DRG Prospective Payment Rate Methodology; Transition Rule for Fiscal Year 1998
Hospital Payment Updates; Transition Rule for Fiscal Year 1998
Geographical Reclassification; Special Rule for Applications Received in Fiscal Year 1997
No Standardized Amount Adjustments for Fiscal Years 1992 or 1993
Extension of Regional Referral Center Classifications Through Fiscal Year 1994; Reclassification
"(1)
"(2)
"(A) notify such hospital of such failure to qualify,
"(B) provide an opportunity for such hospital to decline such reclassification, and
"(C) if the hospital—
"(i) declines such reclassification, administer the Social Security Act [
"(ii) fails to decline such reclassification, administer the Social Security Act without regard to paragraph (1).
"(3)
"(A)
"(B)
Hospitals Declining Urban Area Reclassifications; Retroactive Payments
"(2)
"(A) notify such hospital of such failure to qualify,
"(B) provide an opportunity for such hospital to decline such reclassification, and
"(C) if the hospital declines such reclassification, administer the Social Security Act [
"(3)
"(A)
"(B)
Adjustment in GME Base-Year Costs of Federal Insurance Contributions Act
"(1)
"(2)
"(3)
"(A) The 'base cost reporting period' for a hospital is the hospital's cost reporting period that began during fiscal year 1984.
"(B) The term 'FICA taxes' means, with respect to a hospital, the taxes under section 3111 of the Internal Revenue Code of 1986 [
Determination of Area Wage Index for Discharges Occurring January 1, 1991 to October 1, 1993
"(A) For purposes of section 1886(d)(3)(E) of the Social Security Act [
"(B) The Secretary shall apply the wage index described in subparagraph (A) without regard to a previous survey of wages and wage-related costs."
Study and Report on Relationship Between Non-Wage-Related Input Prices and Adjusted Average Standardized Amounts
Section 4002(e)(2) of
Deadline for Submission of Applications to Geographic Classification Review Board
Payments for Medical Education Costs
"(a)
"(1)
"(2)
"(3)
"(b)
"(1)
"(2)
"(A) the hospital claimed and was reimbursed for such costs during the most recent cost reporting period that ended on or before October 1, 1989;
"(B) the proportion of the hospital's total allowable costs that is attributable to the clinical training costs of the approved program, and allowable under (b)(1) during the cost reporting period does not exceed the proportion of total allowable costs that were attributable to the clinical training costs during the cost reporting period described in subparagraph (A);
"(C) the hospital receives a benefit for the support it furnishes to such program through the provision of clinical services by nursing or allied health students participating in such program; and
"(D) the costs incurred by the hospital for such program do not exceed the costs that would be incurred by the hospital if it operated the program itself.
"(3)
"(A)
"(B)
"(4)
"(5)
"(a)
"(1)
"(2)
"(3)
"(b)
"(1)
"(2)
"(A) the hospital claimed and was reimbursed for such costs during the most recent cost reporting period that ended on or before October 1, 1989;
"(B) the proportion of the hospital's total allowable costs that is attributable to the clinical training costs of the approved program, and allowable under (b)(1) during the cost reporting period does not exceed the proportion of total allowable costs that were attributable to clinical training costs during the cost reporting period described in subparagraph (A);
"(C) the hospital receives a benefit for the support it furnishes to such program through the provision of clinical services by nursing or allied health students participating in such program; and
"(D) the costs incurred by the hospital for such program do not exceed the costs that would be incurred by the hospital if it operated the program itself.
"(3)
"(A)
"(B)
"(4)
"(5)
Development of National Prospective Payment Rates for Current Non-PPS Hospitals
"(1)
"(A) take into consideration the need to provide for appropriate limits on increases in expenditures under the medicare program;
"(B) provide for adjustments to prospectively determined rates to account for changes in a hospital's case mix, severity of illness of patients, volume of cases, and the development of new technologies and standards of medical practice;
"(C) take into consideration the need to increase the payment otherwise made under such system in the case of services provided to patients whose length of stay or costs of treatment greatly exceed the length of stay or cost of treatment provided for under the applicable prospectively determined payment rate;
"(D) take into consideration the need to adjust payments under the system to take into account factors such as a disproportionate share of low-income patients, costs related to graduate medical education programs, differences in wages and wage-related costs among hospitals located in various geographic areas, and other factors the Secretary considers appropriate; and
"(E) provide for the appropriate allocation of operating and capital-related costs of hospitals not subject to the new prospective payment system and distinct units of such hospitals that would be paid under such system.
"(2)
"(B) By not later than June 1, 1992, the Prospective Payment Assessment Commission shall submit an analysis of and comments on the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives."
Guidance to Intermediaries and Hospitals
Freeze in Payments Under Part A of This Subchapter Through December 31, 1990
"(a)
"(1) The market basket percentage increase (described in section 1886(b)(3)(B)(iii) of the Social Security Act) shall be deemed to be 0 for discharges occurring during such period.
"(2) The percentage increase or decrease in the medical care expenditure category of the consumer price index applicable under section 1814(i)(2)(B) of such Act [
"(3) The area wage index applicable to a subsection (d) hospital under section 1886(d)(3)(E) of such Act shall be deemed to be the area wage index applicable to such hospital as of September 30, 1990.
"(4) The percentage change in the consumer price index applicable under section 1886(h)(2)(D) of such Act shall be deemed to be 0.
"(b)
Review of Hospital Regulations With Respect to Rural Hospitals
"(1)
"(2)
Prohibition on Cost Savings Policies Before Beginning of Fiscal Year
"(A) The Secretary may issue such a proposed regulation, instruction, or other policy with respect to the fiscal year before the May 15 preceding the beginning of the fiscal year.
"(B) The Secretary may issue such a final regulation, instruction, or other policy with respect to the fiscal year on or after October 15 of the fiscal year.
"(C) The Secretary may, at any time, issue such a proposed or final regulation, instruction, or other policy with respect to the fiscal year if required to implement specific provisions under statute."
Prohibition of Payment Cycle Changes
Extension of Area Wage Index
Adjustments Resulting From Extensions of Regional Floor on Standardized Amounts
Indexing of Future Applicable Percentage Increases
Continuation of Sole Community Hospital Designation for Current Sole Community Hospitals
Additional Payment Resulting From Corrections of Erroneously Determined Wage Index
"(A)
"(B)
"(i) the error resulted from the submission of erroneous data, except that a hospital is not eligible for such additional payment if it submitted such erroneous data;
"(ii) the error was made with respect to the survey of the 1984 wages and wage-related costs of hospitals in the United States conducted under section 1886(d)(3)(E) of the Social Security Act; and
"(iii) the correction of the error resulted in an adjustment to the area wage index of not less than 3 percentage points.
"(C)
Legislative Proposal Eliminating Separate Average Standardized Amounts
Determination and Recommendations of Payments for Costs of Administering Blood Clotting Factors to Individuals With Hemophilia
"(b)
"(c)
Publication of Instructions Relating to Exceptions and Adjustments in Target Amounts
Delay in Recoupment of Certain Nursing and Allied Education Costs
"(1) The Secretary of Health and Human Services (in this subsection referred to as the 'Secretary') shall not, before October 1, 1990, recoup from, or otherwise reduce or adjust payments under title XVIII of the Social Security Act [
"(2)(A) Before July 1, 1990, the Secretary shall issue regulations respecting payment of costs described in paragraph (1).
"(B) In issuing such regulations—
"(i) the Secretary shall allow a comment period of not less than 60 days,
"(ii) the Secretary shall consult with the Prospective Payment Assessment Commission, and
"(iii) any final rule shall not be effective prior to October 1, 1990, or 30 days after publication of the final rule in the Federal Register, whichever is later.
"(C) Such regulations shall specify—
"(i) the relationship required between an approved nursing or allied health education program and a hospital for the program's costs to be attributed to the hospital;
"(ii) the types of costs related to nursing or allied health education programs that are allowable by medicare;
"(iii) the distinction between costs of approved educational activities as recognized under section 1886(a)(3) of the Social Security Act [
"(iv) the treatment of other funding sources for the program."
Inner-City Hospital Triage Demonstration Project
"(a)
"(1) to train hospital personnel to operate and participate in the system; and
"(2) to provide services to patients who might otherwise be denied appropriate and prompt care.
"(b)
"(2) The amount of payment made under the demonstration project during a single year may not exceed $500,000."
Transition Adjustments to Target Amounts for Inpatient Hospital Services
Election of Personnel Policy for ProPAC Employees
Adjustments in Payments for Inpatient Hospital Services
"(1) PPS
"(2) PPS-
[Amendment of section 104(c) of
ProPAC Study
Clinic Hospital Wage Indices
Limitation on Amounts Paid in Fiscal Years 1988 and 1989
Study of Criteria for Classification of Hospitals as Rural Referral Centers; Report
Grant Program for Rural Health Care Transition
"(1) The Administrator of the Health Care Financing Administration, in consultation with the Assistant Secretary for Health (or a designee), shall establish a program of grants to assist eligible small rural hospitals and their communities in the planning and implementation of projects to modify the type and extent of services such hospitals provide in order to adjust for one or more of the following factors:
"(A) Changes in clinical practice patterns.
"(B) Changes in service populations.
"(C) Declining demand for acute-care inpatient hospital capacity.
"(D) Declining ability to provide appropriate staffing for inpatient hospitals.
"(E) Increasing demand for ambulatory and emergency services.
"(F) Increasing demand for appropriate integration of community health services.
"(G) The need for adequate access (including appropriate transportation) to emergency care and inpatient care in areas in which a significant number of underutilized hospital beds are being eliminated.
"(H) The Administrator shall submit a final report on the program to the Congress not later than 180 days after all projects receiving a grant under the program are completed.
Each demonstration project under this subsection shall demonstrate methods of strengthening the financial and managerial capability of the hospital involved to provide necessary services. Such methods may include programs of cooperation with other health care providers, of diversification in services furnished (including the provision of home health services), of physician recruitment, and of improved management systems. Grants under this paragraph may be used to provide instruction and consultation (and such other services as the Administrator determines appropriate) via telecommunications to physicians in such rural areas (within the meaning of section 1886(d)(2)(D) of the Social Security Act [
"(2) For purposes of this subsection, the term 'eligible small rural hospital' means any rural primary care hospital designated by the Secretary under section 1820(i)(2) of the Social Security Act [
"(A) is located in a rural area (as determined in accordance with subsection (d)),
"(B) has less than 100 beds, and
"(C) is not for profit.
"(3)(A) Any eligible small rural hospital that desires to modify the type or extent of health care services that it provides in order to adjust for one or more of the factors specified in paragraph (1) may submit an application to the Administrator and a copy of such application to the Governor of the State in which it is located. The application shall specify the nature of the project proposed by the hospital, the data and information on which the project is based, and a timetable (of not more than 24 months) for completion of the project. The application shall be submitted on or before a date specified by the Administrator and shall be in such form as the Administrator may require.
"(B) The Governor shall transmit to the Administrator, within a reasonable time after receiving a copy of an application pursuant to subparagraph (A), any comments with respect to the application that the Governor deems appropriate.
"(C) The Governor of a State may designate an appropriate State agency to receive and comment on applications submitted under subparagraph (A).
"(4) A hospital shall be considered to be located in a rural area for purposes of this subsection if it is treated as being located in a rural area for purposes of section 1886(d)(3)(D) of the Social Security Act [
"(5) In determining which hospitals making application under paragraph (3) will receive grants under this subsection, the Administrator shall take into account—
"(A) any comments received under paragraph (3)(B) with respect to a proposed project;
"(B) the effect that the project will have on—
"(i) reducing expenditures from the Federal Hospital Insurance Trust Fund,
"(ii) improving the access of medicare beneficiaries to health care of a reasonable quality;
"(C) the extent to which the proposal of the hospital, using appropriate data, demonstrates an understanding of—
"(i) the primary market or service area of the hospital, and
"(ii) the health care needs of the elderly and disabled that are not currently being met by providers in such market or area, and
"(D) the degree of coordination that may be expected between the proposed project and—
"(i) other local or regional health care providers, and
"(ii) community and government leaders,
as evidenced by the availability of support for the project (in cash or in kind) and other relevant factors.
"(6) A grant to a hospital under this subsection may not exceed $50,000 a year and may not exceed a term of 3 years.
"(7)(A) Except as provided in subparagraphs (B) and (C), a hospital receiving a grant under this subsection may use the grant for any of expenses incurred in planning and implementing the project with respect to which the grant is made.
"(B) A hospital receiving a grant under this subsection for a project may not use the grant to retire debt incurred with respect to any capital expenditure made prior to the date on which the project is initiated.
"(C) Not more than one-third of any grant made under this subsection may be expended for capital-related costs (as defined by the Secretary for purposes of section 1886(a)(4) of the Social Security Act [
"(D) A hospital may use a grant received under this subsection to develop a plan for converting itself to a rural primary care hospital (as described in section 1820 of the Social Security Act [
"(8)(A) A hospital receiving a grant under this section [amending this section and
"(B) The Administrator shall report to the Congress at least once every 12 months on the program of grants established under this subsection. The report shall assess the functioning and status of the program, shall evaluate the progress made toward achieving the purposes of the program, and shall include any recommendations the Secretary may deem appropriate with respect to the program. In preparing the report, the Secretary shall solicit and include the comments and recommendations of private and public entities with an interest in rural health care.
"(C) The Administrator shall submit a final report on the program to the Congress not later than 180 days after all projects receiving a grant under the program are completed.
"(9) For purposes of carrying out the program of grants under this subsection, there are authorized to be appropriated from the Federal Hospital Insurance Trust Fund $15,000,000 for fiscal year 1989, $25,000,000 for each of the fiscal years 1990, 1991, and 1992 and $30,000,000 for each of fiscal years 1993 through 1997."
[For termination, effective May 15, 2000, of provisions of law requiring submittal to Congress of any annual, semiannual, or other regular periodic report listed in House Document No. 103–7 (in which item 6 on page 100 identifies a reporting provision which, as subsequently amended, is contained in section 4005(e)(8)(B) of
[
[
[
Reporting Hospital Information
"(a)
"(b) [Amended subsec. (f) of this section and enacted provisions set out as an Effective Date of 1987 Amendment note above.]
"(c)
"(1) The Secretary of Health and Human Services shall provide for a demonstration project to develop, and determine the costs and benefits of establishing a uniform system for the reporting by medicare participating hospitals of balance sheet and information described in paragraph (2). In conducting the project, the Secretary shall require hospitals in at least 2 States, one of which maintains a uniform hospital reporting system, to report such information based on standard information established by the Secretary.
"(2) The information described in this paragraph is as follows:
"(A) Hospital discharges (classified by class of primary payer).
"(B) Patient days (classified by class of primary payer).
"(C) Licensed beds, staffed beds, and occupancy.
"(D) Inpatient charges and revenues (classified by class of primary payer).
"(E) Outpatient charges and revenues (classified by class of primary payer).
"(F) Inpatient and outpatient hospital expenses (by cost-center classified for operating and capital).
"(G) Reasonable costs.
"(H) Other income.
"(I) Bad debt and charity care.
"(J) Capital acquisitions.
"(K) Capital assets.
The Secretary shall develop a definition of 'outpatient visit' for purposes of reporting hospital information.
"(3) The Secretary shall develop the system under subsection (c) in a manner so as—
"(A) to facilitate the submittal of the information in the report in an electronic form, and
"(B) to be compatible with the needs of the medicare prospective payment system.
"(4) The Secretary shall prepare and submit, to the Prospective Payment Assessment Commission, the Comptroller General, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate, by not later than 45 days after the end of each calendar quarter, data collected under the system.
"(5) In paragraph (2):
"(A) The term 'bad debt and charity care' has such meaning as the Secretary establishes.
"(B) The term 'class' means, with respect to payers at least, the programs under this title XVIII of the Social Security Act [
"(6) The Secretary shall set aside at least a total of $3,000,000 for fiscal years 1988, 1989, and 1990 from existing research funds or from operations funds to develop the format, according to paragraph (1) and for data collection and analysis, but total funds shall not exceed $15,000,000.
"(7) The Comptroller General shall analyze the adequacy of the existing system for reporting of hospital information and the costs and benefits of data reporting under the demonstration system and will recommend improvements in hospital data collection and in analysis and display of data in support of policy making.
"(d)
Hospital Outlier Payments and Policy
"(1)
"(A)
"(B)
"(2)
"(A)
"(B)
"(3)
ProPAC Studies and Reports
"(1)
"(2)
"(3)
Special Rule for Urban Areas in New England
Rural Health Medical Education Demonstration Project
"(a)
"(b)
"(c)
"(A) two of such hospitals are located in rural counties of more than 2,700 square miles (one of which is east of the Mississippi River and one of which is west of such river); and
"(B) two of such hospitals are located in rural counties with (as determined by the Secretary) a severe shortage of physicians (one of which is east of the Mississippi River and one of which is west of such river).
"(2) The provisions of paragraph (1) shall not apply with respect to applications submitted as a result of amendments made by section 6216 of the Omnibus Budget Reconciliation Act of 1989 [
"(d)
"(1) with respect to subsection (d)(5)(B) of such section, any resident physician participating in the project under subsection (a) for any part of a year shall be treated as if he or she were working at the appropriate sponsoring hospital with an agreement under subsection (a) on September 1 of such year (and shall not be treated as if working at the small rural hospital); and
"(2) with respect to subsection (h) of such section, the payment amount permitted under such subsection for a sponsoring hospital with an agreement under subsection (a) shall be increased (for the duration of the project only) by an amount equal to the amount of any direct graduate medical education costs (as defined in paragraph (5) of such subsection (h)) incurred by such hospital in supervising the education and training activities under a project under subsection (a).
"(e)
"(f)
Prohibition on Policy by Secretary of Health and Human Services To Reduce Expenditures in Fiscal Years 1989, 1990, and 1991
Temporary Extension of Payment Policies for Inpatient Hospital Services
"(A)
"(B)
"(i)
"(I) during the extension period is the rate specified in subsection (d)(1)(D)(ii) of such section, or
"(II) after such period is the national adjusted prospective payment rate determined under subsection (d)(3) of such section.
"(ii)
"(C)
"(D)
"(E)
[Section 4002(f)(2) of
Freezing Certain Changes in Medicare Payment Regulations and Policies
"(1)
"(A) any final regulation that changes the policy with respect to payment under title XVIII of the Social Security Act [
"(B) any final regulation, instruction, or other policy change which is primarily intended to have the effect of slowing down claims processing, or delaying payment of claims, under such title; or
"(C) any final regulation that changes the policy under such title with respect to payment for a return on equity capital for outpatient hospital services.
The final regulation of the Health Care Financing Administration published on September 1, 1987 (52 Federal Register 32920) and relating to changes to the return on equity capital provisions for outpatient hospital services is void and of no effect.
"(2)
"(3)
Maintaining Current Outlier Policy in Fiscal Year 1987
"(A) the proportions under paragraph (3)(B) for hospitals located in urban and rural areas shall be established at such levels as produce the same total dollar reduction under such paragraph as if this section had not been enacted; and
"(B) the thresholds and standards used for making additional payments under paragraph (5) of such section shall be the same as those in effect as of October 1, 1986."
Extension of Regional Referral Center Classification
Budget-Neutral Implementation
Promulgation of New Rate
Miscellaneous Accounting Provision
"(1) had a cost reporting period beginning on September 28, 29, or 30 of 1985,
"(2) is located in a State in which inpatient hospital services were paid in fiscal year 1985 pursuant to a Statewide demonstration project under section 402 of the Social Security Amendments of 1967 [section 402 of
"(3) elects, by notice to the Secretary of Health and Human Services by not later than April 1, 1988, to have this subsection apply,
during the first 7 months of such cost reporting period the 'target percentage' shall be 75 percent and the 'DRG percentage' shall be 25 percent, and during the remaining 5 months of such period the 'target percentage' and the 'DRG percentage' shall each be 50 percent."
[Section 4008(e) of
Treatment of Capital-Related Regulations
"(1)
"(2)
"(3)
"(4)
Limitation on Authority To Issue Certain Final Regulations and Instructions Relating to Hospitals or Physicians
Study of Methodology for Area Wage Adjustment for Central Cities; Report to Congress
"(1) The Secretary of Health and Human Services, in consultation with the Prospective Payment Assessment Commission, shall collect information and shall develop one or more methodologies to permit the adjustment of the wage indices used for purposes of sections 1886(d)(2)(C)(ii), 1886(d)(2)(H), and 1886(d)(3)(E) of the Social Security Act [
"(2) The Secretary shall report to Congress on the information collected and the methodologies developed under paragraph (1) not later than May 1, 1987. The report shall include a recommendation as to the feasibility and desirability of implementing such methodologies."
Continuation of Medicare Reimbursement Waivers for Certain Hospitals Participating in Regional Hospital Reimbursement Demonstrations
"(a)
"(1) to substantially all non-Federal acute care hospitals (as defined by the Secretary) in the geographic area served by such system on January 1, 1985, and
"(2) to the review of at least 75 percent of—
"(A) all revenues or expenses in such geographic area for inpatient hospital services, and
"(B) revenues or expenses in such geographic area for inpatient hospital services provided under the State's plan approved under title XIX [
"(b)
"(c)
Information on Impact of PPS Payments on Hospitals
"(a)
"(b)
Special Rules for Implementation of Hospital Reimbursement
"(a)
"(b)
Appointment of Additional Members to Prospective Payment Assessment Commission
Studies by Secretary; GAO Study; Report on Uniformity of Approved FTE Resident Amounts; Study on Foreign Medical Graduates; Establishing Physician Identifier System; Paperwork Reduction
"(c)
"(A) the types and numbers of such programs, and number of students supported or trained under each program;
"(B) the fiscal and administrative relationships between the hospitals involved and the schools with which the programs and students are affiliated; and
"(C) the types and amounts of expenses of such programs for which reimbursement is made, and the financial and other contributions which accrue to the hospital as a consequence of having such programs.
The Secretary shall report the results of such study to the Committee on Finance of the Senate and the Committees on Ways and Means and Energy and Commerce of the House of Representatives prior to December 31, 1987.
"(2) The Secretary shall conduct a separate study of the advisability of continuing or terminating the exception under section 1886(h)(5)(F)(ii) of the Social Security Act [
"(d)
"(2) In carrying out such study, the Comptroller General may utilize a sample of hospital patients and any other data sources which he deems appropriate, and shall, to the extent feasible, control for differences in severity of illness levels, area wage levels, levels of physician reasonable charges for like services and procedures, and for other factors which could affect the comparability of patients and of payments between teaching and nonteaching settings and among teaching settings. The information obtained in the study shall be coordinated with the information obtained in conducting the study of teaching physicians' services under section 2307(c) of the Deficit Reduction Act of 1984 [section 2307(c) of
"(3) The Comptroller General shall report the results of the study to the committees described in subsection (c)(1) prior to December 31, 1987.
"(e)
"(f)
"(1) the types of services provided;
"(2) the cost of providing such services, relative to the cost of other physicians providing the services or other approaches to providing the services;
"(3) any deficiencies in the quality of the services provided, and methods of assuring the quality of such services; and
"(4) the impact on costs of and access to services if medicare payment for hospitals' costs of graduate medical education of foreign medical graduates were phased out.
"[(g) Repealed.
"(h)
Special Treatment of States Formerly Under Waiver
"(1) the Secretary of Health and Human Services shall permit the hospital to change the method by which it allocates administrative and general costs to the direct medical education cost centers to the method specified in the medicare cost report;
"(2) the Secretary may make appropriate adjustments in the regional adjusted DRG prospective payment rate (for the region in which the State is located), based on the assumption that all teaching hospitals in the State use the medicare cost report; and
"(3) the Secretary shall adjust the hospital-specific portion of payment under section 1886(d) of such Act [
The Secretary shall implement this subsection based on the best available data."
Moratorium on Laboratory Payment Demonstrations; Cooperation in Study; Report to Congress
"(a)
"(b)
Medicare Hospital and Physician Payment Provisions; Extension Period
"(a)
"(b)
"(c)
"(1)
"(2)
[Amendment of section 5 of
Definition of Hospital Serving Significantly Disproportionate Number of Low-Income Patients or Patients Entitled to Hospital Insurance Benefits for Aged and Disabled; Identification
"(1) develop and publish a definition of 'hospitals that serve a significantly disproportionate number of patients who have low income or are entitled to benefits under part A' of title XVIII of the Social Security Act [
"(2) identify those hospitals which meet such definition, and make such identity available to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate."
Prospective Payment Wage Index; Studies and Reports to Congress
"(a) The Secretary of Health and Human Services, in consultation with the Secretary of Labor, shall conduct a study to develop an appropriate index for purposes of adjusting payment amounts under section 1886(d) of the Social Security Act [
"(b) The Secretary shall adjust the payment amounts for hospitals for discharges occurring on or after May 1, 1986, to reflect the changes the Secretary has promulgated in final regulations (on September 3, 1985) relating to the hospital wage index under section 1886(d)(3)(E) of the Social Security Act [
"(c) The Secretary shall conduct a study and report to the Congress on proposed criteria under which, in the case of a hospital that demonstrates to the Secretary in a current fiscal year that the adjustment being made under paragraph (2)(H) or (3)(E) of section 1886(d) of the Social Security Act [
[
Different Treatment of Capital-Projects-Related Costs Before and After Implementation of System for Including Such Costs Under Prospectively Determined Payment Rate
New England Hospitals; Classification as Urban or Rural
Reports, Experiments, and Demonstration Projects Related to Inclusion in Prospective Payment Amounts of Inpatient Hospital Service Capital-Related Costs
Inapplicability of Coordination of Federal Information Policy to the Collection of Information
1 So in original. Probably should be followed by "percentage point".
2 So in original. The semicolon probably should be a comma.
3 So in original. The comma probably should not appear.
4 See References in Text note below.
5 So in original. Probably should be followed by a period.
6 So in original. Probably should be followed by "and".
7 So in original. Probably should be section "557(b)".
8 So in original. Probably should be "section".
10 So in original. The semicolon probably should not appear.
11 So in original. Probably should be followed by a comma.
12 So in original. No subpar. (I) has been enacted.
13 So in original. The comma probably should be a semicolon.
14 So in original. Probably should be followed by "paragraph (9),". See 2020 Amendment notes below.
15 So in original. Probably should not be capitalized.
16 So in original. Probably should be "(6)(A)".
§1395xx. Payment of provider-based physicians and payment under certain percentage arrangements
(a) Criteria; amount of payments
(1) The Secretary shall by regulation determine criteria for distinguishing those services (including inpatient and outpatient services) rendered in hospitals or skilled nursing facilities—
(A) which constitute professional medical services, which are personally rendered for an individual patient by a physician and which contribute to the diagnosis or treatment of an individual patient, and which may be reimbursed as physicians' services under part B, and
(B) which constitute professional services which are rendered for the general benefit to patients in a hospital or skilled nursing facility and which may be reimbursed only on a reasonable cost basis or on the bases described in
(2)(A) For purposes of cost reimbursement, the Secretary shall recognize as a reasonable cost of a hospital or skilled nursing facility only that portion of the costs attributable to services rendered by a physician in such hospital or facility which are services described in paragraph (1)(B), apportioned on the basis of the amount of time actually spent by such physician rendering such services.
(B) In determining the amount of the payments which may be made with respect to services described in paragraph (1)(B), after apportioning costs as required by subparagraph (A), the Secretary may not recognize as reasonable (in the efficient delivery of health services) such portion of the provider's costs for such services to the extent that such costs exceed the reasonable compensation equivalent for such services. The reasonable compensation equivalent for any service shall be established by the Secretary in regulations.
(C) The Secretary may, upon a showing by a hospital or facility that it is unable to recruit or maintain an adequate number of physicians for the hospital or facility on account of the reimbursement limits established under this subsection, grant exceptions to such reimbursement limits as may be necessary to allow such provider to provide a compensation level sufficient to provide adequate physician services in such hospital or facility.
(b) Prohibition of recognition of payments under certain percentage agreements
(1) Except as provided in paragraph (2), in the case of a provider of services which is paid under this subchapter on a reasonable cost basis, or other basis related to costs that are reasonable, and which has entered into a contract for the purpose of having services furnished for or on behalf of it, the Secretary may not include any cost incurred by the provider under the contract if the amount payable under the contract by the provider for that cost is determined on the basis of a percentage (or other proportion) of the provider's charges, revenues, or claim for reimbursement.
(2) Paragraph (1) shall not apply—
(A) to services furnished by a physician and described in subsection (a)(1)(B) and covered by regulations in effect under subsection (a), and
(B) under regulations established by the Secretary, where the amount involved under the percentage contract is reasonable and the contract—
(i) is a customary commercial business practice, or
(ii) provides incentives for the efficient and economical operation of the provider of services.
(Aug. 14, 1935, ch. 531, title XVIII, §1887, as added and amended
Editorial Notes
Amendments
1983—Subsec. (a)(1)(B).
1982—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1982 Amendment
"(1) The amendments made by this section [amending this section and
"(2) In the case of a contract with a provider of services entered into prior to the date of the enactment of this Act [Sept. 3, 1982], the amendment made by subsection (a) [amending this section] shall apply to payments under such contract (A) 30 days after the first date (after such date of enactment) the provider of services may unilaterally terminate the contract, or (B) one year after the date of the enactment of this Act, whichever is earlier."
Effective Date of Regulations
§1395yy. Payment to skilled nursing facilities for routine service costs
(a) Per diem limitations
The Secretary, in determining the amount of the payments which may be made under this subchapter with respect to routine service costs of extended care services shall not recognize as reasonable (in the efficient delivery of health services) per diem costs of such services to the extent that such per diem costs exceed the following per diem limits, except as otherwise provided in this section:
(1) With respect to freestanding skilled nursing facilities located in urban areas, the limit shall be equal to 112 percent of the mean per diem routine service costs for freestanding skilled nursing facilities located in urban areas.
(2) With respect to freestanding skilled nursing facilities located in rural areas, the limit shall be equal to 112 percent of the mean per diem routine service costs for freestanding skilled nursing facilities located in rural areas.
(3) With respect to hospital-based skilled nursing facilities located in urban areas, the limit shall be equal to the sum of the limit for freestanding skilled nursing facilities located in urban areas, plus 50 percent of the amount by which 112 percent of the mean per diem routine service costs for hospital-based skilled nursing facilities located in urban areas exceeds the limit for freestanding skilled nursing facilities located in urban areas.
(4) With respect to hospital-based skilled nursing facilities located in rural areas, the limit shall be equal to the sum of the limit for freestanding skilled nursing facilities located in rural areas, plus 50 percent of the amount by which 112 percent of the mean per diem routine service costs for hospital-based skilled nursing facilities located in rural areas exceeds the limit for freestanding skilled nursing facilities located in rural areas.
In applying this subsection the Secretary shall make appropriate adjustments to the labor related portion of the costs based upon an appropriate wage index, and shall, for cost reporting periods beginning on or after October 1, 1992, on or after October 1, 1995, and every 2 years thereafter, provide for an update to the per diem cost limits described in this subsection, except that the limits effective for cost reporting periods beginning on or after October 1, 1997, shall be based on the limits effective for cost reporting periods beginning on or after October 1, 1996.
(b) Excess overhead allocations for hospital-based facilities
With respect to a hospital-based skilled nursing facility, the Secretary may not recognize as reasonable the portion of the cost differences between hospital-based and freestanding skilled nursing facilities attributable to excess overhead allocations.
(c) Adjustments in limitations; publication of data
The Secretary may make adjustments in the limits set forth in subsection (a) with respect to any skilled nursing facility to the extent the Secretary deems appropriate, based upon case mix or circumstances beyond the control of the facility. The Secretary shall publish the data and criteria to be used for purposes of this subsection on an annual basis.
(d) Access to skilled nursing facilities
(1) Subject to subsection (e), any skilled nursing facility may choose to be paid under this subsection on the basis of a prospective payment for all routine service costs (including the costs of services required to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident eligible for benefits under this subchapter) and capital-related costs of extended care services provided in a cost reporting period if such facility had, in the preceding cost reporting period, fewer than 1,500 patient days with respect to which payments were made under this subchapter. Such prospective payment shall be in lieu of payments which would otherwise be made for routine service costs pursuant to
(2)(A) The amount of the payment under this section shall be determined on a per diem basis.
(B) Subject to the limitations of subparagraph (C), for skilled nursing facilities located—
(i) in an urban area, the amount shall be equal to 105 percent of the mean of the per diem reasonable routine service and capital-related costs of extended care services for skilled nursing facilities in urban areas within the same region, determined without regard to the limitations of subsection (a) and adjusted for different area wage levels, and
(ii) in a rural area the amount shall be equal to 105 percent of the mean of the per diem reasonable routine service and capital-related costs of extended care services for skilled nursing facilities in rural areas within the same region, determined without regard to the limitations of subsection (a) and adjusted for different area wage levels.
(C) The per diem amounts determined under subparagraph (B) shall not exceed the limit on routine service costs determined under subsection (a) with respect to the facility, adjusted to take into account average capital-related costs with respect to the type and location of the facility.
(3) For purposes of this subsection, urban and rural areas shall be determined in the same manner as for purposes of subsection (a), and the term "region" shall have the same meaning as under
(4) The Secretary shall establish the prospective payment amounts for cost reporting periods beginning in a fiscal year at least 90 days prior to the beginning of such fiscal year, on the basis of the most recent data available for a 12-month period. A skilled nursing facility must notify the Secretary of its intention to be paid pursuant to this subsection for a cost reporting period no later than 30 days before the beginning of that period.
(5) The Secretary shall provide for a simplified cost report to be filed by facilities being paid pursuant to this subsection, which shall require only the cost information necessary for determining prospective payment amounts pursuant to paragraph (2) and reasonable costs of ancillary services.
(6) In lieu of payment on a cost basis for ancillary services provided by a facility which is being paid pursuant to this subsection, the Secretary may pay for such ancillary services on a reasonable charge basis if the Secretary determines that such payment basis will provide an equitable level of reimbursement and will ease the reporting burden of the facility.
(7) In computing the rates of payment to be made under this subsection, there shall be taken into account the costs described in the last sentence of
(e) Prospective payment
(1) Payment provision
Notwithstanding any other provision of this subchapter, subject to paragraphs (7), (11), and (12), the amount of the payment for all costs (as defined in paragraph (2)(B)) of covered skilled nursing facility services (as defined in paragraph (2)(A)) for each day of such services furnished—
(A) in a cost reporting period during the transition period (as defined in paragraph (2)(E)), is equal to the sum of—
(i) the non-Federal percentage of the facility-specific per diem rate (computed under paragraph (3)), and
(ii) the Federal percentage of the adjusted Federal per diem rate (determined under paragraph (4)) applicable to the facility; and
(B) after the transition period is equal to the adjusted Federal per diem rate applicable to the facility.
(2) Definitions
For purposes of this subsection:
(A) Covered skilled nursing facility services
(i) In general
The term "covered skilled nursing facility services"—
(I) means post-hospital extended care services as defined in
(II) includes all items and services (other than items and services described in clauses (ii), (iii), and (iv)) for which payment may be made under part B and which are furnished to an individual who is a resident of a skilled nursing facility during the period in which the individual is provided covered post-hospital extended care services.
(ii) Services excluded
Services described in this clause are physicians' services, services described by clauses (i) and (ii) of
(iii) Exclusion of certain additional items and services
Items and services described in this clause are the following:
(I) Ambulance services furnished to an individual in conjunction with renal dialysis services described in
(II) Chemotherapy items (identified as of July 1, 1999, by HCPCS codes J9000–J9020; J9040–J9151; J9170–J9185; J9200–J9201; J9206–J9208; J9211; J9230–J9245; and J9265–J9600 (and as subsequently modified by the Secretary)) and any additional chemotherapy items identified by the Secretary.
(III) Chemotherapy administration services (identified as of July 1, 1999, by HCPCS codes 36260–36262; 36489; 36530–36535; 36640; 36823; and 96405–96542 (and as subsequently modified by the Secretary)) and any additional chemotherapy administration services identified by the Secretary.
(IV) Radioisotope services (identified as of July 1, 1999, by HCPCS codes 79030–79440 (and as subsequently modified by the Secretary)) and any additional radioisotope services identified by the Secretary.
(V) Customized prosthetic devices (commonly known as artificial limbs or components of artificial limbs) under the following HCPCS codes (as of July 1, 1999 (and as subsequently modified by the Secretary)), and any additional customized prosthetic devices identified by the Secretary, if delivered to an inpatient for use during the stay in the skilled nursing facility and intended to be used by the individual after discharge from the facility: L5050–L5340; L5500–L5611; L5613–L5986; L5988; L6050–L6370; L6400–L6880; L6920–L7274; and L7362–7366.
(VI) Blood clotting factors indicated for the treatment of patients with hemophilia and other bleeding disorders (identified as of July 1, 2020, by HCPCS codes J7170, J7175, J7177–J7183, J7185–J7190, J7192–J7195, J7198–J7203, J7205, J7207–J7211, and as subsequently modified by the Secretary) and items and services related to the furnishing of such factors under
(iv) Exclusion of certain rural health clinic and federally qualified health center services
Services described in this clause are—
(I) rural health clinic services (as defined in paragraph (1) of
(II) federally qualified health center services (as defined in paragraph (3) of such section);
that would be described in clause (ii) if such services were furnished by an individual not affiliated with a rural health clinic or a federally qualified health center.
(B) All costs
The term "all costs" means routine service costs, ancillary costs, and capital-related costs of covered skilled nursing facility services, but does not include costs associated with approved educational activities.
(C) Non-Federal percentage; Federal percentage
For—
(i) the first cost reporting period (as defined in subparagraph (D)) of a facility, the "non-Federal percentage" is 75 percent and the "Federal percentage" is 25 percent;
(ii) the next cost reporting period of such facility, the "non-Federal percentage" is 50 percent and the "Federal percentage" is 50 percent; and
(iii) the subsequent cost reporting period of such facility, the "non-Federal percentage" is 25 percent and the "Federal percentage" is 75 percent.
(D) First cost reporting period
The term "first cost reporting period" means, with respect to a skilled nursing facility, the first cost reporting period of the facility beginning on or after July 1, 1998.
(E) Transition period
(i) In general
The term "transition period" means, with respect to a skilled nursing facility, the 3 cost reporting periods of the facility beginning with the first cost reporting period.
(ii) Treatment of new skilled nursing facilities
In the case of a skilled nursing facility that first received payment for services under this subchapter on or after October 1, 1995, payment for such services shall be made under this subsection as if all services were furnished after the transition period.
(3) Determination of facility specific per diem rates
The Secretary shall determine a facility-specific per diem rate for each skilled nursing facility not described in paragraph (2)(E)(ii) for a cost reporting period as follows:
(A) Determining base payments
The Secretary shall determine, on a per diem basis, the total of—
(i) the allowable costs of extended care services for the facility for cost reporting periods beginning in fiscal year 1995, including costs associated with facilities described in subsection (d), with appropriate adjustments (as determined by the Secretary) to non-settled cost reports or, in the case of a facility participating in the Nursing Home Case-Mix and Quality Demonstration (RUGS–III), the RUGS–III rate received by the facility during the cost reporting period beginning in 1997, and
(ii) an estimate of the amounts that would be payable under part B (disregarding any applicable deductibles, coinsurance, and copayments) for covered skilled nursing facility services described in paragraph (2)(A)(i)(II) furnished during the applicable cost reporting period described in clause (i) to an individual who is a resident of the facility, regardless of whether or not the payment was made to the facility or to another entity.
In making appropriate adjustments under clause (i), the Secretary shall take into account exceptions and shall take into account exemptions but, with respect to exemptions, only to the extent that routine costs do not exceed 150 percent of the routine cost limits otherwise applicable but for the exemption.
(B) Update to first cost reporting period
The Secretary shall update the amount determined under subparagraph (A), for each cost reporting period after the applicable cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase minus 1.0 percentage point.
(C) Updating to applicable cost reporting period
The Secretary shall update the amount determined under subparagraph (B) for each cost reporting period beginning with the first cost reporting period and up to and including the cost reporting period involved by a factor equal to the facility-specific update factor.
(D) Facility-specific update factor
For purposes of this paragraph, the "facility-specific update factor" for cost reporting periods beginning during—
(i) during each of fiscal years 1998 and 1999, is equal to the skilled nursing facility market basket percentage increase for such fiscal year minus 1 percentage point, and
(ii) during each subsequent fiscal year is equal to the skilled nursing facility market basket percentage increase for such fiscal year.
(4) Federal per diem rate
(A) Determination of historical per diem for facilities
For each skilled nursing facility that received payments for post-hospital extended care services during a cost reporting period beginning in fiscal year 1995 and that was subject to (and not exempted from) the per diem limits referred to in paragraph (1) or (2) of subsection (a) (and facilities described in subsection (d)), the Secretary shall estimate, on a per diem basis for such cost reporting period, the total of—
(i) the allowable costs of extended care services (excluding exceptions payments) for the facility for cost reporting periods beginning in 1995 with appropriate adjustments (as determined by the Secretary) to non-settled cost reports, and
(ii) an estimate of the amounts that would be payable under part B (disregarding any applicable deductibles, coinsurance, and copayments) for covered skilled nursing facility services described in paragraph (2)(A)(i)(II) furnished during such period to an individual who is a resident of the facility, regardless of whether or not the payment was made to the facility or to another entity.
(B) Update to first fiscal year
The Secretary shall update the amount determined under subparagraph (A), for each cost reporting period after the cost reporting period described in subparagraph (A)(i) and up to the first cost reporting period by a factor equal to the skilled nursing facility market basket percentage increase reduced (on an annualized basis) by 1 percentage point.
(C) Computation of standardized per diem rate
The Secretary shall standardize the amount updated under subparagraph (B) for each facility by—
(i) adjusting for variations among facilities by area in the average facility wage level per diem, and
(ii) adjusting for variations in case mix per diem among facilities.
(D) Computation of weighted average per diem rates
(i) All facilities
The Secretary shall compute a weighted average per diem rate for all facilities by computing an average of the standardized amounts computed under subparagraph (C), weighted for each facility by the number of days of extended care services furnished during the cost reporting period referred to in subparagraph (A).
(ii) Freestanding facilities
The Secretary shall compute a weighted average per diem rate for freestanding facilities by computing an average of the standardized amounts computed under subparagraph (C) only for such facilities, weighted for each facility by the number of days of extended care services furnished during the cost reporting period referred to in subparagraph (A).
(iii) Separate computation
The Secretary may compute and apply such averages separately for facilities located in urban and rural areas (as defined in
(E) Updating
(i) Initial period
For the initial period beginning on July 1, 1998, and ending on September 30, 1999, the Secretary shall compute for skilled nursing facilities an unadjusted Federal per diem rate equal to the average of the weighted average per diem rates computed under clauses (i) and (ii) of subparagraph (D), increased by skilled nursing facility market basket percentage change for such period minus 1 percentage point.
(ii) Subsequent fiscal years
The Secretary shall compute an unadjusted Federal per diem rate equal to the Federal per diem rate computed under this subparagraph—
(I) for fiscal year 2000, the rate computed for the initial period described in clause (i), increased by the skilled nursing facility market basket percentage change for the initial period minus 1 percentage point;
(II) for fiscal year 2001, the rate computed for the previous fiscal year increased by the skilled nursing facility market basket percentage change for the fiscal year;
(III) for each of fiscal years 2002 and 2003, the rate computed for the previous fiscal year increased by the skilled nursing facility market basket percentage change for the fiscal year involved minus 0.5 percentage points; and
(IV) for each subsequent fiscal year, the rate computed for the previous fiscal year increased by the skilled nursing facility market basket percentage change for the fiscal year involved.
(F) Adjustment for case mix creep
Insofar as the Secretary determines that the adjustments under subparagraph (G)(i) for a previous fiscal year (or estimates that such adjustments for a future fiscal year) did (or are likely to) result in a change in aggregate payments under this subsection during the fiscal year that are a result of changes in the coding or classification of residents that do not reflect real changes in case mix, the Secretary may adjust unadjusted Federal per diem rates for subsequent fiscal years so as to eliminate the effect of such coding or classification changes.
(G) Determination of Federal rate
The Secretary shall compute for each skilled nursing facility for each fiscal year (beginning with the initial period described in subparagraph (E)(i)) an adjusted Federal per diem rate equal to the unadjusted Federal per diem rate determined under subparagraph (E), as adjusted under subparagraph (F), and as further adjusted as follows:
(i) Adjustment for case mix
The Secretary shall provide for an appropriate adjustment to account for case mix. Such adjustment shall be based on a resident classification system, established by the Secretary, that accounts for the relative resource utilization of different patient types. The case mix adjustment shall be based on resident assessment data and other data that the Secretary considers appropriate.
(ii) Adjustment for geographic variations in labor costs
The Secretary shall adjust the portion of such per diem rate attributable to wages and wage-related costs for the area in which the facility is located compared to the national average of such costs using an appropriate wage index as determined by the Secretary. Such adjustment shall be done in a manner that does not result in aggregate payments under this subsection that are greater or less than those that would otherwise be made if such adjustment had not been made.
(iii) Adjustment for exclusion of certain additional items and services
The Secretary shall provide for an appropriate proportional reduction in payments so that beginning with fiscal year 2001, the aggregate amount of such reductions is equal to the aggregate increase in payments attributable to the exclusion effected under clause (iii) of paragraph (2)(A).
(H) Publication of information on per diem rates
The Secretary shall provide for publication in the Federal Register, before May 1, 1998 (with respect to fiscal period described in subparagraph (E)(i)) and before the August 1 preceding each succeeding fiscal year (with respect to that succeeding fiscal year), of—
(i) the unadjusted Federal per diem rates to be applied to days of covered skilled nursing facility services furnished during the fiscal year,
(ii) the case mix classification system to be applied under subparagraph (G)(i) with respect to such services during the fiscal year, and
(iii) the factors to be applied in making the area wage adjustment under subparagraph (G)(ii) with respect to such services.
(5) Skilled nursing facility market basket index and percentage
For purposes of this subsection:
(A) Skilled nursing facility market basket index
The Secretary shall establish a skilled nursing facility market basket index that reflects changes over time in the prices of an appropriate mix of goods and services included in covered skilled nursing facility services.
(B) Skilled nursing facility market basket percentage
(i) In general
Subject to clauses (ii), (iii), and (iv), the term "skilled nursing facility market basket percentage" means, for a fiscal year or other annual period and as calculated by the Secretary, the percentage change in the skilled nursing facility market basket index (established under subparagraph (A)) from the midpoint of the prior fiscal year (or period) to the midpoint of the fiscal year (or other period) involved.
(ii) Adjustment
For fiscal year 2012 and each subsequent fiscal year, subject to clauses (iii) and (iv), after determining the percentage described in clause (i), the Secretary shall reduce such percentage by the productivity adjustment described in
(iii) Special rule for fiscal year 2018
For fiscal year 2018 (or other similar annual period specified in clause (i)), the skilled nursing facility market basket percentage, after application of clause (ii), is equal to 1 percent.
(iv) Special rule for fiscal year 2019
For fiscal year 2019 (or other similar annual period specified in clause (i)), the skilled nursing facility market basket percentage, after application of clause (ii), is equal to 2.4 percent.
(6) Reporting of assessment and quality data
(A) Reduction in update for failure to report
(i) In general
For fiscal years beginning with fiscal year 2018, in the case of a skilled nursing facility that does not submit data, as applicable, in accordance with subclauses (II) and (III) of subparagraph (B)(i) with respect to such a fiscal year, after determining the percentage described in paragraph (5)(B)(i), and after application of clauses (ii) and (iii) of paragraph (5)(B), the Secretary shall reduce such percentage for payment rates during such fiscal year by 2 percentage points.
(ii) Special rule
The application of this subparagraph may result in the percentage described in paragraph (5)(B)(i), after application of clauses (ii) and (iii) of paragraph (5)(B), being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.
(iii) Noncumulative application
Any reduction under clause (i) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year.
(B) Assessment and measure data
(i) In general
A skilled nursing facility, or a facility (other than a critical access hospital) described in paragraph (7)(B), shall submit to the Secretary, in a manner and within the timeframes prescribed by the Secretary—
(I) subject to clause (iii), the resident assessment data necessary to develop and implement the rates under this subsection;
(II) for fiscal years beginning on or after the specified application date (as defined in subsection (a)(2)(E) of
(III) for fiscal years beginning on or after October 1, 2018, standardized patient assessment data required under subsection (b)(1) of
(ii) Use of standard instrument
For purposes of meeting the requirement under clause (i), a skilled nursing facility, or a facility (other than a critical access hospital) described in paragraph (7)(B), may submit the resident assessment data required under
(iii) Non-duplication
To the extent data submitted under subclause (II) or (III) of clause (i) duplicates other data required to be submitted under clause (i)(I), the submission of such data under such a subclause shall be in lieu of the submission of such data under clause (i)(I). The previous sentence shall not apply insofar as the Secretary determines it is necessary to avoid a delay in the implementation of
(7) Treatment of medicare swing bed hospitals
(A) Transition
Subject to subparagraph (C), the Secretary shall determine an appropriate manner in which to apply this subsection to the facilities described in subparagraph (B) (other than critical access hospitals), taking into account the purposes of this subsection, and shall provide that at the end of the transition period (as defined in paragraph (2)(E)) such facilities shall be paid only under this subsection. Payment shall not be made under this subsection to such facilities for cost reporting periods beginning before such date (not earlier than July 1, 1999) as the Secretary specifies.
(B) Facilities described
The facilities described in this subparagraph are facilities that have in effect an agreement described in
(C) Exemption from PPS of swing-bed services furnished in critical access hospitals
The prospective payment system established under this subsection shall not apply to services furnished by a critical access hospital pursuant to an agreement under
(8) Limitation on review
There shall be no administrative or judicial review under
(A) the establishment of Federal per diem rates under paragraph (4), including the computation of the standardized per diem rates under paragraph (4)(C), adjustments and corrections for case mix under paragraphs (4)(F) and (4)(G)(i), adjustments for variations in labor-related costs under paragraph (4)(G)(ii), and adjustments under paragraph (4)(G)(iii);
(B) the establishment of facility specific rates before July 1, 1999 (except any determination of costs paid under part A of this subchapter); and
(C) the establishment of transitional amounts under paragraph (7).
(9) Payment for certain services
In the case of an item or service furnished to a resident of a skilled nursing facility or a part of a facility that includes a skilled nursing facility (as determined under regulations) for which payment would (but for this paragraph) be made under part B in an amount determined in accordance with
(10) Required coding
No payment may be made under part B for items and services (other than services described in paragraph (2)(A)(ii)) furnished to an individual who is a resident of a skilled nursing facility or of a part of a facility that includes a skilled nursing facility (as determined under regulations), unless the claim for such payment includes a code (or codes) under a uniform coding system specified by the Secretary that identifies the items or services furnished.
(11) Permitting facilities to waive 3-year transition
Notwithstanding paragraph (1)(A), a facility may elect to have the amount of the payment for all costs of covered skilled nursing facility services for each day of such services furnished in cost reporting periods beginning no earlier than 30 days before the date of such election determined pursuant to paragraph (1)(B).
(12) Adjustment for residents with AIDS
(A) In general
Subject to subparagraph (B), in the case of a resident of a skilled nursing facility who is afflicted with acquired immune deficiency syndrome (AIDS), the per diem amount of payment otherwise applicable (determined without regard to any increase under section 101 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, or under section 314(a) of Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000), shall be increased by 128 percent to reflect increased costs associated with such residents.
(B) Sunset
Subparagraph (A) shall not apply on and after such date as the Secretary certifies that there is an appropriate adjustment in the case mix under paragraph (4)(G)(i) to compensate for the increased costs associated with residents described in such subparagraph.
(f) Reporting of direct care expenditures
(1) In general
For cost reports submitted under this subchapter for cost reporting periods beginning on or after the date that is 2 years after March 23, 2010, skilled nursing facilities shall separately report expenditures for wages and benefits for direct care staff (breaking out (at a minimum) registered nurses, licensed professional nurses, certified nurse assistants, and other medical and therapy staff).
(2) Modification of form
The Secretary, in consultation with private sector accountants experienced with Medicare and Medicaid nursing facility home cost reports, shall redesign such reports to meet the requirement of paragraph (1) not later than 1 year after March 23, 2010.
(3) Categorization by functional accounts
Not later than 30 months after March 23, 2010, the Secretary, working in consultation with the Medicare Payment Advisory Commission, the Medicaid and CHIP Payment and Access Commission, the Inspector General of the Department of Health and Human Services, and other expert parties the Secretary determines appropriate, shall take the expenditures listed on cost reports, as modified under paragraph (1), submitted by skilled nursing facilities and categorize such expenditures, regardless of any source of payment for such expenditures, for each skilled nursing facility into the following functional accounts on an annual basis:
(A) Spending on direct care services (including nursing, therapy, and medical services).
(B) Spending on indirect care (including housekeeping and dietary services).
(C) Capital assets (including building and land costs).
(D) Administrative services costs.
(4) Availability of information submitted
The Secretary shall establish procedures to make information on expenditures submitted under this subsection readily available to interested parties upon request, subject to such requirements as the Secretary may specify under the procedures established under this paragraph.
(g) Skilled nursing facility readmission measure
(1) Readmission measure
Not later than October 1, 2015, the Secretary shall specify a skilled nursing facility all-cause all-condition hospital readmission measure (or any successor to such a measure).
(2) Resource use measure
Not later than October 1, 2016, the Secretary shall specify a measure to reflect an all-condition risk-adjusted potentially preventable hospital readmission rate for skilled nursing facilities.
(3) Measure adjustments
When specifying the measures under paragraphs (1) and (2), the Secretary shall devise a methodology to achieve a high level of reliability and validity, especially for skilled nursing facilities with a low volume of readmissions.
(4) Pre-rulemaking process (measure application partnership process)
The application of the provisions of
(5) Feedback reports to skilled nursing facilities
Beginning October 1, 2016, and every quarter thereafter, the Secretary shall provide confidential feedback reports to skilled nursing facilities on the performance of such facilities with respect to a measure specified under paragraph (1) or (2).
(6) Public reporting of skilled nursing facilities
(A) In general
Subject to subparagraphs (B) and (C), the Secretary shall establish procedures for making available to the public by posting on the Nursing Home Compare Medicare website (or a successor website) described in
(B) Opportunity to review
The procedures under subparagraph (A) shall ensure that a skilled nursing facility has the opportunity to review and submit corrections to the information that is to be made public with respect to the facility prior to such information being made public.
(C) Timing
Such procedures shall provide that the information described in subparagraph (A) is made publicly available beginning not later than October 1, 2017.
(7) Non-application of Paperwork Reduction Act
(h) Skilled nursing facility value-based purchasing program
(1) Establishment
(A) In general
Subject to the succeeding provisions of this subsection, the Secretary shall establish a skilled nursing facility value-based purchasing program (in this subsection referred to as the "SNF VBP Program") under which value-based incentive payments are made in a fiscal year to skilled nursing facilities.
(B) Program to begin in fiscal year 2019
The SNF VBP Program shall apply to payments for services furnished on or after October 1, 2018.
(C) Exclusions
With respect to payments for services furnished on or after October 1, 2022, this subsection shall not apply to a facility for which there are not a minimum number (as determined by the Secretary) of—
(i) cases for the measures that apply to the facility for the performance period for the applicable fiscal year; or
(ii) measures that apply to the facility for the performance period for the applicable fiscal year.
(2) Application of measures
(A) In general
The Secretary—
(i) shall apply the measure specified under subsection (g)(1) for purposes of the SNF VBP Program; and
(ii) may, with respect to payments for services furnished on or after October 1, 2023, apply additional measures determined appropriate by the Secretary, which may include measures of functional status, patient safety, care coordination, or patient experience.
Subject to the succeeding sentence, in the case that the Secretary applies additional measures under clause (ii), the Secretary shall consider and apply, as appropriate, quality measures specified under
(B) Replacement
For purposes of the SNF VBP Program, the Secretary shall apply the measure specified under (g)(2) 1 instead of the measure specified under (g)(1) 1 as soon as practicable.
(3) Performance standards
(A) Establishment
The Secretary shall establish performance standards with respect to the measures applied under paragraph (2) for a performance period for a fiscal year.
(B) Higher of achievement and improvement
The performance standards established under subparagraph (A) shall include levels of achievement and improvement. In calculating the SNF performance score under paragraph (4), the Secretary shall use the higher of either improvement or achievement.
(C) Timing
The Secretary shall establish and announce the performance standards established under subparagraph (A) not later than 60 days prior to the beginning of the performance period for the fiscal year involved.
(4) SNF performance score
(A) In general
The Secretary shall develop a methodology for assessing the total performance of each skilled nursing facility based on performance standards established under paragraph (3) with respect to the measures applied under paragraph (2). Using such methodology, the Secretary shall provide for an assessment (in this subsection referred to as the "SNF performance score") for each skilled nursing facility for each such performance period.
(B) Ranking of SNF performance scores
The Secretary shall, for the performance period for each fiscal year, rank the SNF performance scores determined under subparagraph (A) from low to high.
(5) Calculation of value-based incentive payments
(A) In general
With respect to a skilled nursing facility, based on the ranking under paragraph (4)(B) for a performance period for a fiscal year, the Secretary shall increase the adjusted Federal per diem rate determined under subsection (e)(4)(G) otherwise applicable to such skilled nursing facility (and after application of paragraph (6)) for services furnished by such facility during such fiscal year by the value-based incentive payment amount under subparagraph (B).
(B) Value-based incentive payment amount
The value-based incentive payment amount for services furnished by a skilled nursing facility in a fiscal year shall be equal to the product of—
(i) the adjusted Federal per diem rate determined under subsection (e)(4)(G) otherwise applicable to such skilled nursing facility for such services furnished by the skilled nursing facility during such fiscal year; and
(ii) the value-based incentive payment percentage specified under subparagraph (C) for the skilled nursing facility for such fiscal year.
(C) Value-based incentive payment percentage
(i) In general
The Secretary shall specify a value-based incentive payment percentage for a skilled nursing facility for a fiscal year which may include a zero percentage.
(ii) Requirements
In specifying the value-based incentive payment percentage for each skilled nursing facility for a fiscal year under clause (i), the Secretary shall ensure that—
(I) such percentage is based on the SNF performance score of the skilled nursing facility provided under paragraph (4) for the performance period for such fiscal year;
(II) the application of all such percentages in such fiscal year results in an appropriate distribution of value-based incentive payments under subparagraph (B) such that—
(aa) skilled nursing facilities with the highest rankings under paragraph (4)(B) receive the highest value-based incentive payment amounts under subparagraph (B);
(bb) skilled nursing facilities with the lowest rankings under paragraph (4)(B) receive the lowest value-based incentive payment amounts under subparagraph (B); and
(cc) in the case of skilled nursing facilities in the lowest 40 percent of the ranking under paragraph (4)(B), the payment rate under subparagraph (A) for services furnished by such facility during such fiscal year shall be less than the payment rate for such services for such fiscal year that would otherwise apply under subsection (e)(4)(G) without application of this subsection; and
(III) the total amount of value-based incentive payments under this paragraph for all skilled nursing facilities in such fiscal year shall be greater than or equal to 50 percent, but not greater than 70 percent, of the total amount of the reductions to payments for such fiscal year under paragraph (6), as estimated by the Secretary.
(6) Funding for value-based incentive payments
(A) In general
The Secretary shall reduce the adjusted Federal per diem rate determined under subsection (e)(4)(G) otherwise applicable to a skilled nursing facility for services furnished by such facility during a fiscal year (beginning with fiscal year 2019) by the applicable percent (as defined in subparagraph (B)). The Secretary shall make such reductions for all skilled nursing facilities in the fiscal year involved, regardless of whether or not the skilled nursing facility has been determined by the Secretary to have earned a value-based incentive payment under paragraph (5) for such fiscal year.
(B) Applicable percent
For purposes of subparagraph (A), the term "applicable percent" means, with respect to fiscal year 2019 and succeeding fiscal years, 2 percent.
(7) Announcement of net result of adjustments
Under the SNF VBP Program, the Secretary shall, not later than 60 days prior to the fiscal year involved, inform each skilled nursing facility of the adjustments to payments to the skilled nursing facility for services furnished by such facility during the fiscal year under paragraphs (5) and (6).
(8) No effect in subsequent fiscal years
The value-based incentive payment under paragraph (5) and the payment reduction under paragraph (6) shall each apply only with respect to the fiscal year involved, and the Secretary shall not take into account such value-based incentive payment or payment reduction in making payments to a skilled nursing facility under this section in a subsequent fiscal year.
(9) Public reporting
(A) SNF specific information
The Secretary shall make available to the public, by posting on the Nursing Home Compare Medicare website (or a successor website) described in
(i) the SNF performance score of the skilled nursing facility for such fiscal year; and
(ii) the ranking of the skilled nursing facility under paragraph (4)(B) for the performance period for such fiscal year.
(B) Aggregate information
The Secretary shall periodically post on the Nursing Home Compare Medicare website (or a successor website) described in
(i) the range of SNF performance scores provided under paragraph (4)(A); and
(ii) the number of skilled nursing facilities receiving value-based incentive payments under paragraph (5) and the range and total amount of such value-based incentive payments.
(10) Limitation on review
There shall be no administrative or judicial review under
(A) The methodology used to determine the value-based incentive payment percentage and the amount of the value-based incentive payment under paragraph (5).
(B) The determination of the amount of funding available for such value-based incentive payments under paragraph (5)(C)(ii)(III) and the payment reduction under paragraph (6).
(C) The establishment of the performance standards under paragraph (3) and the performance period.
(D) The methodology developed under paragraph (4) that is used to calculate SNF performance scores and the calculation of such scores.
(E) The ranking determinations under paragraph (4)(B).
(11) Funding for program management
The Secretary shall provide for the one time transfer from the Federal Hospital Insurance Trust Fund established under
(A) for purposes of subsection (g)(2), $2,000,000; and
(B) for purposes of implementing this subsection, $10,000,000.
Such funds shall remain available until expended.
(12) Validation
(A) In general
The Secretary shall apply to the measures applied under this subsection and the data submitted under subsection (e)(6) a process to validate such measures and data, as appropriate, which may be similar to the process specified in
(B) Funding
For purposes of carrying out this paragraph, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund established under
(Aug. 14, 1935, ch. 531, title XVIII, §1888, as added
Editorial Notes
References in Text
Section 101 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, referred to in subsec. (e)(12)(A), is section 1000(a)(6) [title I, §101] of
Section 314(a) of Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, referred to in subsec. (e)(12)(A), is section 1(a)(6) [title III, §314(a)] of
Amendments
2022—Subsec. (e)(2)(A)(ii).
2020—Subsec. (e)(2)(A)(iii)(VI).
Subsec. (h)(1)(C).
Subsec. (h)(2)(A).
Subsec. (h)(3)(A), (4)(A).
Subsec. (h)(12).
2018—Subsec. (e)(5)(B)(i).
Subsec. (e)(5)(B)(ii).
Subsec. (e)(5)(B)(iv).
2015—Subsec. (e)(5)(B)(i).
Subsec. (e)(5)(B)(ii).
Subsec. (e)(5)(B)(iii).
Subsec. (e)(6)(A)(i), (ii).
2014—Subsec. (e)(6).
Subsec. (g).
Subsec. (h).
2010—Subsec. (e)(5)(B).
Subsec. (f).
2008—Subsec. (e)(2)(A)(ii).
2003—Subsec. (e)(2)(A)(i)(II).
Subsec. (e)(2)(A)(iv).
Subsec. (e)(12).
2000—Subsec. (e)(4)(E)(ii)(II).
Subsec. (e)(4)(E)(ii)(III).
Subsec. (e)(4)(E)(ii)(IV).
Subsec. (e)(7).
Subsec. (e)(7)(A).
Subsec. (e)(7)(B).
Subsec. (e)(7)(C).
1999—Subsec. (e)(1).
Subsec. (e)(2)(A)(i)(II).
Subsec. (e)(2)(A)(iii).
Subsec. (e)(3)(A)(i).
Subsec. (e)(3)(A)(ii).
Subsec. (e)(3)(B).
"(i)
"(ii)
Subsec. (e)(4)(E)(i).
Subsec. (e)(4)(E)(ii).
Subsec. (e)(4)(G)(iii).
Subsec. (e)(8)(A).
Subsec. (e)(8)(B).
Subsec. (e)(9).
Subsec. (e)(11).
Subsec. (e)(12).
1997—Subsec. (a).
Subsec. (d)(1).
Subsec. (e).
Subsec. (e)(2)(A)(ii).
Subsec. (e)(9), (10).
1993—Subsec. (a).
Subsec. (b).
1990—Subsec. (a).
Subsec. (d)(1).
1987—Subsec. (d)(7).
1986—Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (d)(1).
Subsec. (d)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2022 Amendment
Amendment by
Effective Date of 2020 Amendment
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2003 Amendment
Effective Date of 2000 Amendment
Amendment by section 1(a)(6) [title II, §203(a)] of
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §321(g)(1), (k)(18)] of
Effective Date of 1997 Amendment
Amendment by section 4432(a), (b)(3), (5)(H) of
Amendment by section 4511(a)(2)(E) of
Effective Date of 1993 Amendment
Effective Date of 1990 Amendment
Amendment by section 4008(h)(2)(A)(ii) of
Effective Date of 1987 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by section 9219(b)(1)(C) of
"(1) The amendment made by subsection (a) [amending this section] shall apply to cost reporting periods beginning on or after October 1, 1986.
"(2) The amendment made by subsection (b) [amending this section] shall become effective on the date of the enactment of this Act [Apr. 7, 1986]."
Effective Date
Study on Portable Diagnostic Ultrasound Services for Beneficiaries in Skilled Nursing Facilities
Special Rule for Payment for Fiscal Year 2001
"(1) for the period beginning on October 1, 2000, and ending on March 31, 2001, shall be the rate determined in accordance with the law as in effect on the day before the date of the enactment of this Act [Dec. 21, 2000]; and
"(2) for the period beginning on April 1, 2001, and ending on September 30, 2001, shall be the rate that would have been determined under such section if 'plus 1 percentage point' had been substituted for 'minus 1 percentage point' under subclause (II) of such paragraph (as in effect on the day before the date of the enactment of this Act)."
GAO Report on Adequacy of SNF Payment Rates
HCFA Study of Classification Systems for SNF Residents
"(1)
"(2)
GAO Audit of Nursing Staff Ratios
"(1)
"(2)
Oversight
Establishment of Process for Geographic Reclassification
"(a)
"(b)
Report to Congress
Medical Review Process
Construction of Wage Index for Skilled Nursing Facilities
No Change in Limits on Per Diem Service Costs for Extended Care Services for Fiscal Years 1994 and 1995
No Change in Prospective Payments for Services Furnished During Fiscal Years 1994 and 1995
Prospective Payment System for Skilled Nursing Facility Services
"(1)
"(A) take into consideration the need to provide for appropriate limits on increases in expenditures under the medicare program without jeopardizing access to extended care services for individuals unable to care for themselves;
"(B) provide for adjustments to prospectively determined rates to account for changes in a facility's case mix, volume of cases, and the development of new technologies and standards of medical practice;
"(C) take into consideration the need to increase the payment otherwise made under such system in the case of services provided to patients whose length of stay or costs of treatment greatly exceed the length of stay or cost of treatment provided for under the applicable prospectively determined payment rate;
"(D) take into consideration the need to adjust payments under the system to take into account factors such as a disproportionate share of low-income patients, differences in wages and wage-related costs among facilities located in various geographic areas, and other factors the Secretary considers appropriate; and
"(E) take into consideration the appropriateness of classifying patients and payments upon functional disability, cognitive impairment, and other patient characteristics.
"(2)
"(B) By not later than September 1, 1991, the Secretary shall submit the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.
"(C) By not later than March 1, 1992, the Prospective Payment Assessment Commission shall submit an analysis of and comments on the proposal developed under paragraph (1) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives."
Use of More Recent Data Regarding Routine Service Costs of Skilled Nursing Facilities
1 So in original. Probably should be preceded by "subsection".
§1395zz. Provider education and technical assistance
(a) Coordination of education funding
The Secretary shall coordinate the educational activities provided through medicare contractors (as defined in subsection (g), including under
(b) Enhanced education and training
(1) Additional resources
There are authorized to be appropriated to the Secretary (in appropriate part from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund) such sums as may be necessary for fiscal years beginning with fiscal year 2005.
(2) Use
The funds made available under paragraph (1) shall be used to increase the conduct by medicare contractors of education and training of providers of services and suppliers regarding billing, coding, and other appropriate items and may also be used to improve the accuracy, consistency, and timeliness of contractor responses.
(c) Tailoring education and training activities for small providers or suppliers
(1) In general
Insofar as a medicare contractor conducts education and training activities, it shall tailor such activities to meet the special needs of small providers of services or suppliers (as defined in paragraph (2)). Such education and training activities for small providers of services and suppliers may include the provision of technical assistance (such as review of billing systems and internal controls to determine program compliance and to suggest more efficient and effective means of achieving such compliance).
(2) Small provider of services or supplier
In this subsection, the term "small provider of services or supplier" means—
(A) a provider of services with fewer than 25 full-time-equivalent employees; or
(B) a supplier with fewer than 10 full-time-equivalent employees.
(d) Internet websites; FAQs
The Secretary, and each medicare contractor insofar as it provides services (including claims processing) for providers of services or suppliers, shall maintain an Internet website which—
(1) provides answers in an easily accessible format to frequently asked questions, and
(2) includes other published materials of the contractor,
that relate to providers of services and suppliers under the programs under this subchapter (and subchapter XI insofar as it relates to such programs).
(e) Encouragement of participation in education program activities
A medicare contractor may not use a record of attendance at (or failure to attend) educational activities or other information gathered during an educational program conducted under this section or otherwise by the Secretary to select or track providers of services or suppliers for the purpose of conducting any type of audit or prepayment review.
(f) Construction
Nothing in this section or
(1) of the screens used for identifying claims that will be subject to medical review; or
(2) of information that would compromise pending law enforcement activities or reveal findings of law enforcement-related audits.
(g) Definitions
For purposes of this section, the term "medicare contractor" includes the following:
(1) A medicare administrative contractor with a contract under
(2) An eligible entity with a contract under
Such term does not include, with respect to activities of a specific provider of services or supplier an entity that has no authority under this subchapter or subchapter IX with respect to such activities and such provider of services or supplier.
(Aug. 14, 1935, ch. 531, title XVIII, §1889, as added and amended
Editorial Notes
Prior Provisions
A prior section 1395zz, act Aug. 14, 1935, ch. 531, title XVIII, §1889, as added Nov. 5, 1990,
Another prior section 1395zz, act Aug. 14, 1935, ch. 531, title XVIII, §1889, formerly §1833(f), as added Jan. 2, 1968,
Amendments
2003—Subsecs. (b), (c).
Subsec. (d).
Subsecs. (e) to (g).
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Effective Date
Small Provider Technical Assistance Demonstration Program
"(a)
"(1)
"(2)
"(A) evaluation and recommendations regarding billing and related systems; and
"(B) information and assistance regarding policies and procedures under the medicare program, including coding and reimbursement.
"(3)
"(A) a provider of services with fewer than 25 full-time-equivalent employees; or
"(B) a supplier with fewer than 10 full-time-equivalent employees.
"(b)
"(c)
"(d) GAO
"(e)
"(f)
§1395aaa. Contract with a consensus-based entity regarding performance measurement
(a) Contract
(1) In general
For purposes of activities conducted under this chapter, the Secretary shall identify and have in effect a contract with a consensus-based entity, such as the National Quality Forum, that meets the requirements described in subsection (c). Such contract shall provide that the entity will perform the duties described in subsection (b).
(2) Timing for first contract
As soon as practicable after July 15, 2008, the Secretary shall enter into the first contract under paragraph (1).
(3) Period of contract
A contract under paragraph (1) shall be for a period of 4 years (except as may be renewed after a subsequent bidding process).
(4) Competitive procedures
Competitive procedures (as defined in
(b) Duties
The duties described in this subsection are the following:
(1) Priority setting process
The entity shall synthesize evidence and convene key stakeholders to make recommendations, with respect to activities conducted under this chapter, on an integrated national strategy and priorities for health care performance measurement in all applicable settings. In making such recommendations, the entity shall—
(A) ensure that priority is given to measures—
(i) that address the health care provided to patients with prevalent, high-cost chronic diseases;
(ii) with the greatest potential for improving the quality, efficiency, and patient-centeredness of health care; and
(iii) that may be implemented rapidly due to existing evidence, standards of care, or other reasons; and
(B) take into account measures that—
(i) may assist consumers and patients in making informed health care decisions;
(ii) address health disparities across groups and areas; and
(iii) address the continuum of care a patient receives, including services furnished by multiple health care providers or practitioners and across multiple settings.
(2) Endorsement of measures
The entity shall provide for the endorsement of standardized health care performance measures. The endorsement process under the preceding sentence shall consider whether a measure—
(A) is evidence-based, reliable, valid, verifiable, relevant to enhanced health outcomes, actionable at the caregiver level, feasible to collect and report, and responsive to variations in patient characteristics, such as health status, language capabilities, race or ethnicity, and income level; and
(B) is consistent across types of health care providers, including hospitals and physicians.
(3) Maintenance of measures
The entity shall establish and implement a process to ensure that measures endorsed under paragraph (2) are updated (or retired if obsolete) as new evidence is developed.
(4) Removal of measures
The entity may provide input to the Secretary on quality and efficiency measures described in paragraph (7)(B) that could be considered for removal.
(5) Annual report to Congress and the Secretary; secretarial publication and comment
(A)1 Annual report
By not later than March 1 of each year (beginning with 2009), the entity shall submit to Congress and the Secretary a report containing the following:
(i) A description of—
(I) the implementation of quality measurement initiatives under this chapter and the coordination of such initiatives with quality initiatives implemented by other payers;
(II) the recommendations made under paragraph (1);
(III) the performance by the entity of the duties required under the contract entered into with the Secretary under subsection (a);
(IV) gaps in endorsed quality measures, which shall include measures that are within priority areas identified by the Secretary under the national strategy established under
(V) areas in which evidence is insufficient to support endorsement of quality measures in priority areas identified by the Secretary under the national strategy established under
(VI) the matters described in clauses (i) and (ii) of paragraph (7)(A).
(ii) An itemization of financial information for the fiscal year ending September 30 of the preceding year, including—
(I) annual revenues of the entity (including any government funding, private sector contributions, grants, membership revenues, and investment revenue);
(II) annual expenses of the entity (including grants paid, benefits paid, salaries or other compensation, fundraising expenses, and overhead costs); and
(III) a breakdown of the amount awarded per contracted task order and the specific projects funded in each task order assigned to the entity.
(iii) Any updates or modifications of internal policies and procedures of the entity as they relate to the duties of the entity under this section, including—
(I) specifically identifying any modifications to the disclosure of interests and conflicts of interests for committees, work groups, task forces, and advisory panels of the entity; and
(II) information on external stakeholder participation in the duties of the entity under this section (including complete rosters for all committees, work groups, task forces, and advisory panels funded through government contracts, descriptions of relevant interests and any conflicts of interest for members of all committees, work groups, task forces, and advisory panels, and the total percentage by health care sector of all convened committees, work groups, task forces, and advisory panels.2
(B) Secretarial review and publication of annual report
Not later than 6 months after receiving a report under subparagraph (A) for a year, the Secretary shall—
(i) review such report; and
(ii) publish such report in the Federal Register, together with any comments of the Secretary on such report.
(6) Review and endorsement of episode grouper under the physician feedback program
The entity shall provide for the review and, as appropriate, the endorsement of the episode grouper developed by the Secretary under
(7) Convening multi-stakeholder groups
(A) In general
The entity shall convene multi-stakeholder groups to provide input on—
(i) the selection of quality and efficiency measures described in subparagraph (B), from among—
(I) such measures that have been endorsed by the entity; and
(II) such measures that have not been considered for endorsement by such entity but are used or proposed to be used by the Secretary for the collection or reporting of quality and efficiency measures; and
(ii) national priorities (as identified under
(B) Quality and efficiency measures
(i) In general
Subject to clause (ii), the quality and efficiency measures described in this subparagraph are quality and efficiency measures—
(I) for use pursuant to sections 1395f(i)(5)(D), 1395l(i)(7), 1395l(t)(17), 1395w–4(k)(2)(C), 1395cc(k)(3), 1395rr(h)(2)(A)(iii),3 1395ww(b)(3)(B)(viii), 1395ww(j)(7)(D), 1395ww(m)(5)(D), 1395ww(o)(2), 1395ww(s)(4)(D), and 1395fff(b)(3)(B)(v) of this title;
(II) for use in reporting performance information to the public; and
(III) for use in health care programs other than for use under this chapter.
(ii) Exclusion
Data sets (such as the outcome and assessment information set for home health services and the minimum data set for skilled nursing facility services) that are used for purposes of classification systems used in establishing payment rates under this subchapter shall not be quality and efficiency measures described in this subparagraph.
(C) Requirement for transparency in process
(i) In general
In convening multi-stakeholder groups under subparagraph (A) with respect to the selection of quality and efficiency measures, the entity shall provide for an open and transparent process for the activities conducted pursuant to such convening.
(ii) Selection of organizations participating in multi-stakeholder groups
The process described in clause (i) shall ensure that the selection of representatives comprising such groups provides for public nominations for, and the opportunity for public comment on, such selection.
(D) Multi-stakeholder group defined
In this paragraph, the term "multi-stakeholder group" means, with respect to a quality and efficiency measure, a voluntary collaborative of organizations representing a broad group of stakeholders interested in or affected by the use of such quality and efficiency measure.
(8) Transmission of multi-stakeholder input
Not later than February 1 of each year (beginning with 2012), the entity shall transmit to the Secretary the input of multi-stakeholder groups provided under paragraph (7).
(9) Prioritization of measure endorsement
The Secretary—
(A) during the period beginning on December 27, 2020, and ending on December 31, 2023, shall prioritize the endorsement of measures relating to maternal morbidity and mortality by the entity with a contract under subsection (a) in connection with endorsement of measures described in paragraph (2); and
(B) on and after January 1, 2024, may prioritize the endorsement of such measures by such entity.
(c) Requirements described
The requirements described in this subsection are the following:
(1) Private nonprofit
The entity is a private nonprofit entity governed by a board.
(2) Board membership
The members of the board of the entity include—
(A) representatives of health plans and health care providers and practitioners or representatives of groups representing such health plans and health care providers and practitioners;
(B) health care consumers or representatives of groups representing health care consumers; and
(C) representatives of purchasers and employers or representatives of groups representing purchasers or employers.
(3) Entity membership
The membership of the entity includes persons who have experience with—
(A) urban health care issues;
(B) safety net health care issues;
(C) rural and frontier health care issues; and
(D) health care quality and safety issues.
(4) Open and transparent
With respect to matters related to the contract with the Secretary under subsection (a), the entity conducts its business in an open and transparent manner and provides the opportunity for public comment on its activities.
(5) Voluntary consensus standards setting organization
The entity operates as a voluntary consensus standards setting organization as defined for purposes of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (
(6) Experience
The entity has at least 4 years of experience in establishing national consensus standards.
(7) Membership fees
If the entity requires a membership fee for participation in the functions of the entity, such fees shall be reasonable and adjusted based on the capacity of the potential member to pay the fee. In no case shall membership fees pose a barrier to the participation of individuals or groups with low or nominal resources to participate in the functions of the entity.
(d) Funding
(1) For purposes of carrying out this section, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under
(2) For purposes of carrying out this section and
(e) Annual report by Secretary to Congress
(1) In general
By not later than March 1 of each year (beginning with 2019), the Secretary shall submit to Congress a report containing the following:
(A) A comprehensive plan that identifies the quality measurement needs of programs and initiatives of the Secretary and provides a strategy for using the entity with a contract under subsection (a) and any other entity the Secretary has contracted with or may contract with to perform work associated with
(B) The amount of funding provided under subsection (d) for purposes of carrying out this section and
(C) With respect to the activities described under this section or
(D) Subject to paragraph (2)(B), a description of the activities for which the funds described in paragraph (2) were used, including task orders and activities assigned to the entity with a contract under subsection (a), activities performed by the Secretary, and task orders and activities assigned to any other entity the Secretary has contracted with to perform work related to carrying out
(E) Subject to paragraph (2)(B), the amount of funding described in paragraph (2) that has been obligated or expended for each of the activities described in paragraph (4).
(F) Subject to paragraph (2)(B), estimates for, and descriptions of, obligations and expenditures that the Secretary anticipates will be needed in the succeeding two year period to carry out each of the quality measurement activities required under this section and
(2) Additional requirements for reports
(A) Addressing GAO report
Each of the annual reports submitted in 2021 and 2022 pursuant to paragraph (1) shall also include the following:
(i) A comprehensive analysis detailing the ways in which the Centers for Medicare & Medicaid Services has addressed each of the recommendations set forth in the report by the Government Accountability Office (GAO–19–628) issued on September 19, 2019, and titled "Health Care Quality: CMS Could More Effectively Ensure Its Quality Measurement Activities Promote Its Objectives".
(ii) A detailed description of—
(I) any additional steps that the Centers for Medicare & Medicaid Services expects to take to address the findings and recommendations set forth in such report; and
(II) the anticipated timing for such steps.
(B) Ensuring detailed information
(i) In general
In the case of an annual report submitted in 2021 or a subsequent year pursuant to paragraph (1), the information required under—
(I) paragraph (1)(D) shall also include detailed information on each of the activities described in clause (ii);
(II) paragraph (1)(E) shall also include detailed information on the specific amounts obligated or expended on each of the activities described in clause (ii); and
(III) paragraph (1)(F) shall also include detailed information on the specific quality measurement activities required and future funding needed for each of the activities described in clause (ii).
(ii) Activities described
The activities described in this clause are the following:
(I) Measure selection activities.
(II) Measure development activities.
(III) Public reporting activities.
(IV) Education and outreach activities.
(f) Additional reporting by the Secretary to Congress
(1) In general
By not later than September 30 of each year (beginning with 2021), the Secretary shall submit to Congress a report on the amount of unobligated balances for appropriations relating to quality measurement. Such report shall include detailed plans on how the Secretary expects to expend such unobligated balances in the upcoming fiscal years.
(2) Separate report
The annual report required under paragraph (1) shall be separate from the annual report required under subsection (e).
(Aug. 14, 1935, ch. 531, title XVIII, §1890, as added
Editorial Notes
References in Text
Clause (iii) of
Section 12(d) of the National Technology Transfer and Advancement Act of 1995, referred to in subsec. (c)(5), is section 12(d) of
Codification
In subsec. (a)(4), "
Prior Provisions
A prior section 1395aaa, act Aug. 14, 1935, ch. 531, title XVIII, §1890, as added Aug. 18, 1987,
Amendments
2024—Subsec. (d)(2).
2020—Subsec. (b)(4).
Subsec. (b)(9).
Subsec. (d)(2).
Subsec. (e).
Subsec. (e)(1)(A).
Subsec. (e)(1)(D).
Subsec. (e)(1)(E).
Subsec. (e)(1)(F).
Subsec. (f).
2019—Subsec. (d)(2).
2018—Subsec. (b)(5)(A).
Subsec. (d)(2).
Subsec. (e).
2015—Subsec. (d)(2).
2014—Subsec. (d).
2013—Subsec. (b)(4).
Subsec. (d).
2010—Subsec. (b)(5)(A)(iv) to (vi).
Subsec. (b)(6).
Subsec. (b)(7).
Subsec. (b)(7)(B).
Subsec. (b)(7)(B)(i)(I).
Subsec. (b)(8).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2018 Amendment
1 See 2018 Amendment note below.
2 So in original. Probably should be "panels)."
3 See References in Text note below.
§1395aaa–1. Quality and efficiency measurement
(a) Multi-stakeholder group input into selection of quality and efficiency measures
The Secretary shall establish a pre-rulemaking process under which the following steps occur with respect to the selection of quality and efficiency measures described in
(1) Input
Pursuant to
(2) Public availability of measures considered for selection
Not later than December 1 of each year (beginning with 2011), the Secretary shall make available to the public a list of quality and efficiency measures described in
(3) Transmission of multi-stakeholder input
Pursuant to
(4) Consideration of multi-stakeholder input
The Secretary shall take into consideration the input from multi-stakeholder groups described in paragraph (1) in selecting quality and efficiency measures described in
(5) Rationale for use of quality and efficiency measures
The Secretary shall publish in the Federal Register the rationale for the use of any quality and efficiency measure described in
(6) Assessment of impact
Not later than March 1, 2012, and at least once every three years thereafter, the Secretary shall—
(A) conduct an assessment of the quality and efficiency impact of the use of endorsed measures described in
(B) make such assessment available to the public.
(b) Process for dissemination of measures used by the Secretary
(1) In general
The Secretary shall establish a process for disseminating quality and efficiency measures used by the Secretary. Such process shall include the following:
(A) The incorporation of such measures, where applicable, in workforce programs, training curricula, and any other means of dissemination determined appropriate by the Secretary.
(B) The dissemination of such quality and efficiency measures through the national strategy developed under
(2) Existing methods
To the extent practicable, the Secretary shall utilize and expand existing dissemination methods in disseminating quality and efficiency measures under the process established under paragraph (1).
(c) Review of quality and efficiency measures used by the Secretary
(1) In general
The Secretary shall—
(A) periodically (but in no case less often than once every 3 years) review quality and efficiency measures described in
(B) with respect to each such measure, determine whether to—
(i) maintain the use of such measure; or
(ii) phase out such measure.
(2) Considerations
In conducting the review under paragraph (1), the Secretary shall take steps to—
(A) seek to avoid duplication of measures used; and
(B) take into consideration current innovative methodologies and strategies for quality and efficiency improvement practices in the delivery of health care services that represent best practices for such quality and efficiency improvement and measures endorsed by the entity with a contract under
(d) Rule of construction
Nothing in this section shall preclude a State from using the quality and efficiency measures identified under
(e) Development of quality and efficiency measures
The Administrator of the Center for Medicare & Medicaid Services shall through contracts develop quality and efficiency measures (as determined appropriate by the Administrator) for use under this chapter. In developing such measures, the Administrator shall consult with the Director of the Agency for Healthcare Research and Quality.
(f) Hospital acquired conditions
The Secretary shall, to the extent practicable, publicly report on measures for hospital-acquired conditions that are currently utilized by the Centers for Medicare & Medicaid Services for the adjustment of the amount of payment to hospitals based on rates of hospital-acquired infections.
(g) Technical expert panel review of opioid and opioid use disorder quality measures
(1) In general
Not later than 180 days after October 24, 2018, the Secretary shall establish a technical expert panel for purposes of reviewing quality measures relating to opioids and opioid use disorders, including care, prevention, diagnosis, health outcomes, and treatment furnished to individuals with opioid use disorders. The Secretary may use the entity with a contract under
(2) Review and assessment
Not later than 1 year after the date the technical expert panel described in paragraph (1) is established (and periodically thereafter as the Secretary determines appropriate), the technical expert panel shall—
(A) review quality measures that relate to opioids and opioid use disorders, including existing measures and those under development;
(B) identify gaps in areas of quality measurement that relate to opioids and opioid use disorders, and identify measure development priorities for such measure gaps; and
(C) make recommendations to the Secretary on quality measures with respect to opioids and opioid use disorders for purposes of improving care, prevention, diagnosis, health outcomes, and treatment, including recommendations for revisions of such measures, need for development of new measures, and recommendations for including such measures in the Merit-Based Incentive Payment System under
(3) Consideration of measures by Secretary
The Secretary shall consider—
(A) using opioid and opioid use disorder measures (including measures used under the Merit-Based Incentive Payment System under
(B) using opioid measures described in subparagraph (A), as applicable, in the quality reporting requirements for inpatient hospitals under
(4) Prioritization of measure development
The Secretary shall prioritize for measure development the gaps in quality measures identified under paragraph (2)(B).
(5) Prioritization of measure endorsement
The Secretary—
(A) during the period beginning on October 24, 2018, and ending on December 31, 2023, shall prioritize the endorsement of measures relating to opioids and opioid use disorders by the entity with a contract under subsection (a) of
(B) on and after January 1, 2024, may prioritize the endorsement of such measures by such entity.
(Aug. 14, 1935, ch. 531, title XVIII, §1890A, as added and amended
Editorial Notes
Amendments
2018—Subsec. (g).
2010—
Subsec. (e).
Subsec. (f).
§1395bbb. Conditions of participation for home health agencies; home health quality
(a) Conditions of participation; protection of individual rights; notification of State entities; use of home health aides; medical equipment; individual's plan of care; compliance with Federal, State, and local laws and regulations
The conditions of participation that a home health agency is required to meet under this subsection are as follows:
(1) The agency protects and promotes the rights of each individual under its care, including each of the following rights:
(A) The right to be fully informed in advance about the care and treatment to be provided by the agency, to be fully informed in advance of any changes in the care or treatment to be provided by the agency that may affect the individual's well-being, and (except with respect to an individual adjudged incompetent) to participate in planning care and treatment or changes in care or treatment.
(B) The right to voice grievances with respect to treatment or care that is (or fails to be) furnished without discrimination or reprisal for voicing grievances.
(C) The right to confidentiality of the clinical records described in
(D) The right to have one's property treated with respect.
(E) The right to be fully informed orally and in writing (in advance of coming under the care of the agency) of—
(i) all items and services furnished by (or under arrangements with) the agency for which payment may be made under this subchapter,
(ii) the coverage available for such items and services under this subchapter, subchapter XIX, and any other Federal program of which the agency is reasonably aware,
(iii) any charges for items and services not covered under this subchapter and any charges the individual may have to pay with respect to items and services furnished by (or under arrangements with) the agency, and
(iv) any changes in the charges or items and services described in clause (i), (ii), or (iii).
(F) The right to be fully informed in writing (in advance of coming under the care of the agency) of the individual's rights and obligations under this subchapter.
(G) The right to be informed of the availability of the State home health agency hot-line established under
(2) The agency notifies the State entity responsible for the licensing or certification of the agency of a change in—
(A) the persons with an ownership or control interest (as defined in
(B) the persons who are officers, directors, agents, or managing employees (as defined in
(C) the corporation, association, or other company responsible for the management of the agency.
Such notice shall be given at the time of the change and shall include the identity of each new person or company described in the previous sentence.
(3)(A) The agency must not use as a home health aide (on a full-time, temporary, per diem, or other basis), any individual to provide items or services described in
(i) has completed a training and competency evaluation program, or a competency evaluation program, that meets the minimum standards established by the Secretary under subparagraph (D), and
(ii) is competent to provide such items and services.
For purposes of clause (i), an individual is not considered to have completed a training and competency evaluation program, or a competency evaluation program if, since the individual's most recent completion of such a program, there has been a continuous period of 24 consecutive months during none of which the individual provided items and services described in
(B)(i) The agency must provide, with respect to individuals used as a home health aide by the agency as of July 1, 1989, for a competency evaluation program (as described in subparagraph (A)(i)) and such preparation as may be necessary for the individual to complete such a program by January 1, 1990.
(ii) The agency must provide such regular performance review and regular in-service education as assures that individuals used to provide items and services described in
(C) The agency must not permit an individual, other than in a training and competency evaluation program that meets the minimum standards established by the Secretary under subparagraph (D), to provide items or services of a type for which the individual has not demonstrated competency.
(D)(i) The Secretary shall establish minimum standards for the programs described in subparagraph (A) by not later than October 1, 1988.
(ii) Such standards shall include the content of the curriculum, minimum hours of training, qualification of instructors, and procedures for determination of competency.
(iii) Such standards may permit approval of programs offered by or in home health agencies, as well as outside agencies (including employee organizations), and of programs in effect on December 22, 1987; except that they may not provide for the approval of a program offered by or in a home health agency which, within the previous 2 years—
(I) has been determined to be out of compliance with subparagraph (A), (B), or (C);
(II) has been subject to an extended (or partial extended) survey under subsection (c)(2)(D);
(III) has been assessed a civil money penalty described in subsection (f)(2)(A)(i) of not less than $5,000; or
(IV) has been subject to the remedies described in subsection (e)(1) or in clauses (ii) or (iii) of subsection (f)(2)(A).
(iv) Such standards shall permit a determination that an individual who has completed (before July 1, 1989) a training and competency evaluation program or a competency evaluation program shall be deemed for purposes of subparagraph (A) to have completed a program that is approved by the Secretary under the standards established under this subparagraph if the Secretary determines that, at the time the program was offered, the program met such standards.
(E) In this paragraph, the term "home health aide" means any individual who provides the items and services described in
(i) who is a licensed health professional (as defined in subparagraph (F)), or
(ii) who volunteers to provide such services without monetary compensation.
(F) In this paragraph, the term "licensed health professional" means a physician, physician assistant, nurse practitioner, physical, speech, or occupational therapist, physical or occupational therapy assistant, registered professional nurse, licensed practical nurse, or licensed or certified social worker.
(4) The agency includes an individual's plan of care required under
(5) The agency operates and provides services in compliance with all applicable Federal, State, and local laws and regulations (including the requirements of
(6) The agency complies with the requirement of
(b) Duty of Secretary
It is the duty and responsibility of the Secretary to assure that the conditions of participation and requirements specified in or pursuant to
(c) Surveys of home health agencies
(1) Any agreement entered into or renewed by the Secretary pursuant to
(2)(A) Except as provided in subparagraph (B), each home health agency shall be subject to a standard survey not later than 36 months after the date of the previous standard survey conducted under this paragraph. The Secretary shall establish a frequency for surveys of home health agencies within this 36-month interval commensurate with the need to assure the delivery of quality home health services.
(B) If not otherwise conducted under subparagraph (A), a standard survey (or an abbreviated standard survey) of an agency—
(i) may be conducted within 2 months of any change of ownership, administration, or management of the agency to determine whether the change has resulted in any decline in the quality of care furnished by the agency, and
(ii) shall be conducted within 2 months of when a significant number of complaints have been reported with respect to the agency to the Secretary, the State, the entity responsible for the licensing of the agency, the State or local agency responsible for maintaining a toll-free hotline and investigative unit (under
(C) A standard survey conducted under this paragraph with respect to a home health agency—
(i) shall include (to the extent practicable), for a case-mix stratified sample of individuals furnished items or services by the agency—
(I) visits to the homes of such individuals, but only with the consent of such individuals, for the purpose of evaluating (in accordance with a standardized reproducible assessment instrument (or instruments) approved by the Secretary under subsection (d)) the extent to which the quality and scope of items and services furnished by the agency attained and maintained the highest practicable functional capacity of each such individual as reflected in such individual's written plan of care required under
(II) a survey of the quality of care and services furnished by the agency as measured by indicators of medical, nursing, and rehabilitative care;
(ii) shall be based upon a protocol that is developed, tested, and validated by the Secretary not later than January 1, 1989; and
(iii) shall be conducted by an individual—
(I) who meets minimum qualifications established by the Secretary not later than July 1, 1989,
(II) who is not serving (or has not served within the previous 2 years) as a member of the staff of, or as a consultant to, the home health agency surveyed respecting compliance with the conditions of participation specified in or pursuant to
(III) who has no personal or familial financial interest in the home health agency surveyed.
(D) Each home health agency that is found, under a standard survey, to have provided substandard care shall be subject to an extended survey to review and identify the policies and procedures which produced such substandard care and to determine whether the agency has complied with the conditions of participation specified in or pursuant to
(E) Nothing in this paragraph shall be construed as requiring an extended (or partial extended) survey as a prerequisite to imposing a sanction against an agency under subsection (e) on the basis of the findings of a standard survey.
(d) Assessment process; reports to Congress
(1) Not later than January 1, 1989, the Secretary shall designate an assessment instrument (or instruments) for use by an agency in complying with subsection (c)(2)(C)(i)(I).
(2)(A) Not later than January 1, 1992, the Secretary shall—
(i) evaluate the assessment process,
(ii) report to Congress on the results of such evaluation, and
(iii) based on such evaluation, make such modifications in the assessment process as the Secretary determines are appropriate.
(B) The Secretary shall periodically update the evaluation conducted under subparagraph (A), report the results of such update to Congress, and, based on such update, make such modifications in the assessment process as the Secretary determines are appropriate.
(3) The Secretary shall provide for the comprehensive training of State and Federal surveyors in matters relating to the performance of standard and extended surveys under this section, including the use of any assessment instrument (or instruments) designated under paragraph (1).
(e) Enforcement
(1) If the Secretary determines on the basis of a standard, extended, or partial extended survey or otherwise, that a home health agency that is certified for participation under this subchapter is no longer in compliance with the requirements specified in or pursuant to
(2) If the Secretary determines on the basis of a standard, extended, or partial extended survey or otherwise, that a home health agency that is certified for participation under this subchapter is no longer in compliance with the requirements specified in or pursuant to
(3) If the Secretary determines that a home health agency that is certified for participation under this subchapter is in compliance with the requirements specified in or pursuant to
(4) The Secretary may continue payments under this subchapter with respect to a home health agency not in compliance with the requirements specified in or pursuant to
(A) the State or local survey agency finds that it is more appropriate to take alternative action to assure compliance of the agency with the requirements than to terminate the certification of the agency,
(B) the agency has submitted a plan and timetable for corrective action to the Secretary for approval and the Secretary approves the plan of corrective action, and
(C) the agency agrees to repay to the Federal Government payments received under this subparagraph if the corrective action is not taken in accordance with the approved plan and timetable.
The Secretary shall establish guidelines for approval of corrective actions requested by home health agencies under this subparagraph.
(f) Intermediate sanctions
(1) The Secretary shall develop and implement, by not later than April 1, 1989—
(A) a range of intermediate sanctions to apply to home health agencies under the conditions described in subsection (e), and
(B) appropriate procedures for appealing determinations relating to the imposition of such sanctions.
(2)(A) The intermediate sanctions developed under paragraph (1) shall include—
(i) civil money penalties in an amount not to exceed $10,000 for each day of noncompliance,
(ii) suspension of all or part of the payments to which a home health agency would otherwise be entitled under this subchapter with respect to items and services furnished by a home health agency on or after the date on which the Secretary determines that intermediate sanctions should be imposed pursuant to subsection (e)(2), and
(iii) the appointment of temporary management to oversee the operation of the home health agency and to protect and assure the health and safety of the individuals under the care of the agency while improvements are made in order to bring the agency into compliance with all the requirements specified in or pursuant to
The provisions of
(B) The sanctions specified in subparagraph (A) are in addition to sanctions otherwise available under State or Federal law and shall not be construed as limiting other remedies, including any remedy available to an individual at common law.
(C) A finding to suspend payment under subparagraph (A)(ii) shall terminate when the Secretary finds that the home health agency is in substantial compliance with all the requirements specified in or pursuant to
(3) The Secretary shall develop and implement, by not later than April 1, 1989, specific procedures with respect to the conditions under which each of the intermediate sanctions developed under paragraph (1) is to be applied, including the amount of any fines and the severity of each of these sanctions. Such procedures shall be designed so as to minimize the time between identification of deficiencies and imposition of these sanctions and shall provide for the imposition of incrementally more severe fines for repeated or uncorrected deficiencies.
(g) Payment on basis of location of service
A home health agency shall submit claims for payment for home health services under this subchapter only on the basis of the geographic location at which the service is furnished, as determined by the Secretary.
(Aug. 14, 1935, ch. 531, title XVIII, §1891, as added and amended
Editorial Notes
Amendments
2003—Subsec. (d)(1).
1997—Subsec. (g).
1996—Subsec. (c)(2)(A).
1990—Subsec. (a)(3)(D)(iii).
Subsec. (a)(6).
1988—Subsec. (a)(3)(A).
Subsec. (a)(3)(F).
Subsec. (a)(4) to (6).
Subsec. (c)(1).
Subsec. (d)(2)(A).
Subsecs. (e), (f).
Subsec. (f)(2)(A).
Subsec. (f)(2)(A)(i).
1987—Subsecs. (c), (d).
Subsecs. (e), (f).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by section 4206(d)(2) of
"(i) had its participation terminated under title XVIII of the Social Security Act [
"(ii) was assessed a civil money penalty not less than $5,000 for deficiencies in applicable quality standards for home health agencies;
"(iii) was subject to suspension by the Secretary of all or part of the payments to which it would otherwise be entitled under such title;
"(iv) operated under a temporary management appointed to oversee the operation of the agency and to ensure the health and safety of the agency's patients; or
"(v) pursuant to State action, was closed or had its patients transferred."
Effective Date of 1988 Amendment
Amendment by
Except as specifically provided in section 411 of
Effective Date of 1987 Amendment
Effective Date
Section applicable to home health agencies as of the first day of the 18th calendar month that begins after Dec. 22, 1987, except as otherwise provided, see section 4021(c) of
Treatment of Branch Offices; GAO Study on Supervision of Home Health Care Provided in Isolated Rural Areas
"(a)
"(1)
"(2)
"(b)
"(1)
"(2)
§1395ccc. Offset of payments to individuals to collect past-due obligations arising from breach of scholarship and loan contract
(a) In general
(1)(A) Subject to subparagraph (B), the Secretary shall enter into an agreement under this section with any individual who, by reason of a breach of a contract entered into by such individual pursuant to the National Health Service Corps Scholarship Program, the Physician Shortage Area Scholarship Program, or the Health Education Assistance Loan Program, owes a past-due obligation to the United States (as defined in subsection (b)).
(B) The Secretary shall not enter into an agreement with an individual under this section to the extent—
(i)(I) the individual has entered into a contract with the Secretary pursuant to section 204(a)(1) of the Public Health Service Amendments of 1987, and
(II) the individual has fulfilled or (as determined by the Secretary) is fulfilling the terms of such contract; or
(ii) the liability of the individual under such section 204(a)(1) has otherwise been relieved under such section; or
(iii) the individual is performing such physician's 1 service obligation under a forbearance agreement entered into with the Secretary under subpart II of part D of title III of the Public Health Service Act [
(2) The agreement under this section shall provide that—
(A) deductions shall be made from the amounts otherwise payable to the individual under this subchapter, in accordance with a formula and schedule agreed to by the Secretary and the individual, until such past-due obligation (and accrued interest) have been repaid;
(B) payment under this subchapter for services provided by such individual shall be made only on an assignment-related basis;
(C) if the individual does not provide services, for which payment would otherwise be made under this subchapter, of a sufficient quantity to maintain the offset collection according to the agreed upon formula and schedule—
(i) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and
(ii) subject to paragraph (4), the Secretary shall immediately exclude the individual from the program under this subchapter, until such time as the entire past-due obligation has been repaid.
(3) If the individual refuses to enter into an agreement or breaches any provision of the agreement—
(A) the Secretary shall immediately inform the Attorney General, and the Attorney General shall immediately commence an action to recover the full amount of the past-due obligation, and
(B) subject to paragraph (4), the Secretary shall immediately exclude the individual from the program under this subchapter, until such time as the entire past-due obligation has been repaid.
(4) The Secretary shall not exclude an individual pursuant to paragraph (2)(C)(ii) or paragraph (3)(B) if such individual is a sole community practitioner or sole source of essential specialized services in a community if a State requests that the individual not be excluded.
(b) Past-due obligation
For purposes of this section, a past-due obligation is any amount—
(1) owed by an individual to the United States by reason of a breach of a scholarship contract under section 338E of the Public Health Service Act [
(2) owed by an individual to the United States by reason of a loan covered by Federal loan insurance under subpart I 2 of part C of title VII of the Public Health Service Act and payment for which has not been cancelled, waived, or suspended by the Secretary under such subpart.
(c) Collection under this section shall not be exclusive
This section shall not preclude the United States from applying other provisions of law otherwise applicable to the collection of obligations owed to the United States, including (but not limited to) the use of tax refund offsets pursuant to
(d) Collection from providers and health maintenance organizations
(1) In the case of an individual who owes a past-due obligation, and who is an employee of, or affiliated by a medical services agreement with, a provider having an agreement under
(2) Deductions shall be in accordance with a formula and schedule agreed to by the Secretary, the individual and the provider, organization, or plan. The deductions shall be made from the amounts otherwise payable to the individual under this subchapter as long as the individual continues to be employed or affiliated by a medical services agreement.
(3) Such deduction shall not be made until 6 months after the Secretary notifies the provider, organization, or plan of the amount to be deducted and the particular physicians 3 to whom the deductions are attributable.
(4) A deduction made under this subsection shall relieve the individual of the obligation (to the extent of the amount collected) to the United States, but the provider, organization, or plan shall have a right of action to collect from such individual the amount deducted pursuant to this subsection (including accumulated interest).
(5) No deduction shall be made under this subsection if, within the 6-month period after notice is given to the provider, organization, or plan, the individual pays the past-due obligation, or ceases to be employed by the provider, organization, or plan.
(6) The Secretary shall also apply the provisions of this subsection in the case of an individual who is a member of a group practice, if such group practice submits bills under this program as a group, rather than by individual physicians.3
(e) Transfer from trust funds
Amounts equal to the amounts deducted pursuant to this section shall be transferred from the Trust Fund from which the payment to the individual, provider, or other entity would otherwise have been made, to the general fund in the Treasury, and shall be credited as payment of the past-due obligation of the individual from whom (or with respect to whom) the deduction was made.
(Aug. 14, 1935, ch. 531, title XVIII, §1892, as added
Editorial Notes
References in Text
Section 204(a)(1) of the Public Health Service Amendments of 1987, referred to in subsec. (a)(1)(B), is section 204(a)(1) of
The Public Health Service Act, referred to in subsecs. (a)(1)(B)(iii) and (b), is act July 1, 1944, ch. 373,
Amendments
1988—
Subsec. (a)(1)(A).
Subsec. (a)(1)(B).
Subsec. (a)(2)(A) to (C).
Subsec. (a)(2)(C)(ii).
Subsec. (a)(3).
Subsec. (a)(3)(B).
Subsec. (a)(4).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (d)(1).
Subsec. (d)(2).
Subsec. (d)(4) to (6).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Amendment by
Except as specifically provided in section 411 of
Effective Date
1 So in original. Probably should be "individual's".
2 See References in Text note below.
3 So in original. Probably should be "individuals".
§1395ddd. Medicare Integrity Program
(a) Establishment of Program
There is hereby established the Medicare Integrity Program (in this section referred to as the "Program") under which the Secretary shall promote the integrity of the medicare program by entering into contracts in accordance with this section with eligible entities, or otherwise, to carry out the activities described in subsection (b).
(b) Activities described
The activities described in this subsection are as follows:
(1) Review of activities of providers of services or other individuals and entities furnishing items and services for which payment may be made under this subchapter (including skilled nursing facilities and home health agencies), including medical and utilization review and fraud review (employing similar standards, processes, and technologies used by private health plans, including equipment and software technologies which surpass the capability of the equipment and technologies used in the review of claims under this subchapter as of August 21, 1996).
(2) Audit of cost reports.
(3) Determinations as to whether payment should not be, or should not have been, made under this subchapter by reason of
(4) Education of providers of services, beneficiaries, and other persons with respect to payment integrity and benefit quality assurance issues.
(5) Developing (and periodically updating) a list of items of durable medical equipment in accordance with
(6) The Medicare-Medicaid Data Match Program in accordance with subsection (g).
(c) Eligibility of entities
An entity is eligible to enter into a contract under the Program to carry out any of the activities described in subsection (b) if—
(1) the entity has demonstrated capability to carry out such activities;
(2) in carrying out such activities, the entity agrees to cooperate with the Inspector General of the Department of Health and Human Services, the Attorney General, and other law enforcement agencies, as appropriate, in the investigation and deterrence of fraud and abuse in relation to this subchapter and in other cases arising out of such activities;
(3) the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement;
(4) the entity agrees to provide the Secretary and the Inspector General of the Department of Health and Human Services with such performance statistics (including the number and amount of overpayments recovered, the number of fraud referrals, and the return on investment of such activities by the entity) as the Secretary or the Inspector General may request; and
(5) the entity meets such other requirements as the Secretary may impose.
In the case of the activity described in subsection (b)(5), an entity shall be deemed to be eligible to enter into a contract under the Program to carry out the activity if the entity is a carrier with a contract in effect under
(d) Process for entering into contracts
The Secretary shall enter into contracts under the Program in accordance with such procedures as the Secretary shall by regulation establish, except that such procedures shall include the following:
(1) Procedures for identifying, evaluating, and resolving organizational conflicts of interest that are generally applicable to Federal acquisition and procurement.
(2) Competitive procedures to be used—
(A) when entering into new contracts under this section;
(B) when entering into contracts that may result in the elimination of responsibilities of an individual fiscal intermediary or carrier under section 202(b) of the Health Insurance Portability and Accountability Act of 1996; and
(C) at any other time considered appropriate by the Secretary,
except that the Secretary may continue to contract with entities that are carrying out the activities described in this section pursuant to agreements under
(3) Procedures under which a contract under this section may be renewed without regard to any provision of law requiring competition if the contractor has met or exceeded the performance requirements established in the current contract.
The Secretary may enter into such contracts without regard to final rules having been promulgated.
(e) Limitation on contractor liability
The Secretary shall by regulation provide for the limitation of a contractor's liability for actions taken to carry out a contract under the Program, and such regulation shall, to the extent the Secretary finds appropriate, employ the same or comparable standards and other substantive and procedural provisions as are contained in
(f) Recovery of overpayments
(1) Use of repayment plans
(A) In general
If the repayment, within 30 days by a provider of services or supplier, of an overpayment under this subchapter would constitute a hardship (as described in subparagraph (B)), subject to subparagraph (C), upon request of the provider of services or supplier the Secretary shall enter into a plan with the provider of services or supplier for the repayment (through offset or otherwise) of such overpayment over a period of at least 6 months but not longer than 3 years (or not longer than 5 years in the case of extreme hardship, as determined by the Secretary). Interest shall accrue on the balance through the period of repayment. Such plan shall meet terms and conditions determined to be appropriate by the Secretary.
(B) Hardship
(i) In general
For purposes of subparagraph (A), the repayment of an overpayment (or overpayments) within 30 days is deemed to constitute a hardship if—
(I) in the case of a provider of services that files cost reports, the aggregate amount of the overpayments exceeds 10 percent of the amount paid under this subchapter to the provider of services for the cost reporting period covered by the most recently submitted cost report; or
(II) in the case of another provider of services or supplier, the aggregate amount of the overpayments exceeds 10 percent of the amount paid under this subchapter to the provider of services or supplier for the previous calendar year.
(ii) Rule of application
The Secretary shall establish rules for the application of this subparagraph in the case of a provider of services or supplier that was not paid under this subchapter during the previous year or was paid under this subchapter only during a portion of that year.
(iii) Treatment of previous overpayments
If a provider of services or supplier has entered into a repayment plan under subparagraph (A) with respect to a specific overpayment amount, such payment amount under the repayment plan shall not be taken into account under clause (i) with respect to subsequent overpayment amounts.
(C) Exceptions
Subparagraph (A) shall not apply if—
(i) the Secretary has reason to suspect that the provider of services or supplier may file for bankruptcy or otherwise cease to do business or discontinue participation in the program under this subchapter; or
(ii) there is an indication of fraud or abuse committed against the program.
(D) Immediate collection if violation of repayment plan
If a provider of services or supplier fails to make a payment in accordance with a repayment plan under this paragraph, the Secretary may immediately seek to offset or otherwise recover the total balance outstanding (including applicable interest) under the repayment plan.
(E) Relation to no fault provision
Nothing in this paragraph shall be construed as affecting the application of
(2) Limitation on recoupment
(A) In general
In the case of a provider of services or supplier that is determined to have received an overpayment under this subchapter and that seeks a reconsideration by a qualified independent contractor on such determination under
(B) Collection with interest
Insofar as the determination on such appeal is against the provider of services or supplier, interest on the overpayment shall accrue on and after the date of the original notice of overpayment. Insofar as such determination against the provider of services or supplier is later reversed, the Secretary shall provide for repayment of the amount recouped plus interest at the same rate as would apply under the previous sentence for the period in which the amount was recouped.
(C) Medicare contractor defined
For purposes of this subsection, the term "medicare contractor" has the meaning given such term in
(3) Limitation on use of extrapolation
A medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise unless the Secretary determines that—
(A) there is a sustained or high level of payment error; or
(B) documented educational intervention has failed to correct the payment error.
There shall be no administrative or judicial review under
(4) Provision of supporting documentation
In the case of a provider of services or supplier with respect to which amounts were previously overpaid, a medicare contractor may request the periodic production of records or supporting documentation for a limited sample of submitted claims to ensure that the previous practice is not continuing.
(5) Consent settlement reforms
(A) In general
The Secretary may use a consent settlement (as defined in subparagraph (D)) to settle a projected overpayment.
(B) Opportunity to submit additional information before consent settlement offer
Before offering a provider of services or supplier a consent settlement, the Secretary shall—
(i) communicate to the provider of services or supplier—
(I) that, based on a review of the medical records requested by the Secretary, a preliminary evaluation of those records indicates that there would be an overpayment;
(II) the nature of the problems identified in such evaluation; and
(III) the steps that the provider of services or supplier should take to address the problems; and
(ii) provide for a 45-day period during which the provider of services or supplier may furnish additional information concerning the medical records for the claims that had been reviewed.
(C) Consent settlement offer
The Secretary shall review any additional information furnished by the provider of services or supplier under subparagraph (B)(ii). Taking into consideration such information, the Secretary shall determine if there still appears to be an overpayment. If so, the Secretary—
(i) shall provide notice of such determination to the provider of services or supplier, including an explanation of the reason for such determination; and
(ii) in order to resolve the overpayment, may offer the provider of services or supplier—
(I) the opportunity for a statistically valid random sample; or
(II) a consent settlement.
The opportunity provided under clause (ii)(I) does not waive any appeal rights with respect to the alleged overpayment involved.
(D) Consent settlement defined
For purposes of this paragraph, the term "consent settlement" means an agreement between the Secretary and a provider of services or supplier whereby both parties agree to settle a projected overpayment based on less than a statistically valid sample of claims and the provider of services or supplier agrees not to appeal the claims involved.
(6) Notice of over-utilization of codes
The Secretary shall establish, in consultation with organizations representing the classes of providers of services and suppliers, a process under which the Secretary provides for notice to classes of providers of services and suppliers served by the contractor in cases in which the contractor has identified that particular billing codes may be overutilized by that class of providers of services or suppliers under the programs under this subchapter (or provisions of subchapter XI insofar as they relate to such programs).
(7) Payment audits
(A) Written notice for post-payment audits
Subject to subparagraph (C), if a medicare contractor decides to conduct a post-payment audit of a provider of services or supplier under this subchapter, the contractor shall provide the provider of services or supplier with written notice (which may be in electronic form) of the intent to conduct such an audit.
(B) Explanation of findings for all audits
Subject to subparagraph (C), if a medicare contractor audits a provider of services or supplier under this subchapter, the contractor shall—
(i) give the provider of services or supplier a full review and explanation of the findings of the audit in a manner that is understandable to the provider of services or supplier and permits the development of an appropriate corrective action plan;
(ii) inform the provider of services or supplier of the appeal rights under this subchapter as well as consent settlement options (which are at the discretion of the Secretary);
(iii) give the provider of services or supplier an opportunity to provide additional information to the contractor; and
(iv) take into account information provided, on a timely basis, by the provider of services or supplier under clause (iii).
(C) Exception
Subparagraphs (A) and (B) shall not apply if the provision of notice or findings would compromise pending law enforcement activities, whether civil or criminal, or reveal findings of law enforcement-related audits.
(8) Standard methodology for probe sampling
The Secretary shall establish a standard methodology for medicare contractors to use in selecting a sample of claims for review in the case of an abnormal billing pattern.
(g) Medicare-Medicaid Data Match Program
(1) Expansion of Program
(A) In general
The Secretary shall enter into contracts with eligible entities or otherwise for the purpose of ensuring that, beginning with 2006, the Medicare-Medicaid Data Match Program (commonly referred to as the "Medi-Medi Program") is conducted with respect to the program established under this subchapter and State Medicaid programs under subchapter XIX for the purpose of—
(i) identifying program vulnerabilities in the program established under this subchapter and the Medicaid program established under subchapter XIX through the use of computer algorithms to review claims data to look for payment anomalies (including billing or billing patterns identified with respect to provider, service, time, or patient that appear to be suspect or otherwise implausible);
(ii) working with States, the Attorney General, and the Inspector General of the Department of Health and Human Services to coordinate appropriate actions to investigate and recover amounts with respect to suspect claims to protect the Federal and State share of expenditures under the Medicaid program under subchapter XIX, as well as the program established under this subchapter;
(iii) increasing the effectiveness and efficiency of both such programs through cost avoidance, savings, and recoupments of fraudulent, wasteful, or abusive expenditures; and
(iv) furthering the Secretary's design, development, installation, or enhancement of an automated data system architecture—
(I) to collect, integrate, and assess data for purposes of program integrity, program oversight, and administration, including the Medi-Medi Program; and
(II) that improves the coordination of requests for data from States.
(B) Reporting requirements
The Secretary shall make available in a timely manner any data and statistical information collected by the Medi-Medi Program to the Attorney General, the Director of the Federal Bureau of Investigation, the Inspector General of the Department of Health and Human Services, and the States (including a Medicaid fraud and abuse control unit described in
(2) Limited waiver authority
The Secretary shall waive only such requirements of this section and of subchapters XI and XIX as are necessary to carry out paragraph (1).
(3) Incentives for States
The Secretary shall study and, as appropriate, may specify incentives for States to work with the Secretary for the purposes described in paragraph (1)(A)(ii). The application of the previous sentence may include use of the waiver authority described in paragraph (2).
(h) Use of recovery audit contractors
(1) In general
Under the Program, the Secretary shall enter into contracts with recovery audit contractors in accordance with this subsection for the purpose of identifying underpayments and overpayments and recouping overpayments under this subchapter with respect to all services for which payment is made under this subchapter. Under the contracts—
(A) payment shall be made to such a contractor only from amounts recovered;
(B) from such amounts recovered, payment—
(i) shall be made on a contingent basis for collecting overpayments; and
(ii) may be made in such amounts as the Secretary may specify for identifying underpayments; and
(C) the Secretary shall retain a portion of the amounts recovered which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of activities conducted under the recovery audit program under this subsection.
(2) Disposition of remaining recoveries
The amounts recovered under such contracts that are not paid to the contractor under paragraph (1) or retained by the Secretary under paragraph (1)(C) or paragraph (10) shall be applied to reduce expenditures under this subchapter.
(3) Nationwide coverage
The Secretary shall enter into contracts under paragraph (1) in a manner so as to provide for activities in all States under such a contract by not later than January 1, 2010 (not later than December 31, 2010, in the case of contracts relating to payments made under part C or D).
(4) Audit and recovery periods
Each such contract shall provide that audit and recovery activities may be conducted during a fiscal year with respect to payments made under this subchapter—
(A) during such fiscal year; and
(B) retrospectively (for a period of not more than 4 fiscal years prior to such fiscal year).
(5) Waiver
The Secretary shall waive such provisions of this subchapter as may be necessary to provide for payment of recovery audit contractors under this subsection in accordance with paragraph (1).
(6) Qualifications of contractors
(A) In general
The Secretary may not enter into a contract under paragraph (1) with a recovery audit contractor unless the contractor has staff that has the appropriate clinical knowledge of, and experience with, the payment rules and regulations under this subchapter or the contractor has, or will contract with, another entity that has such knowledgeable and experienced staff.
(B) Ineligibility of certain contractors
The Secretary may not enter into a contract under paragraph (1) with a recovery audit contractor to the extent the contractor is a fiscal intermediary under
(C) Preference for entities with demonstrated proficiency
In awarding contracts to recovery audit contractors under paragraph (1), the Secretary shall give preference to those risk entities that the Secretary determines have demonstrated more than 3 years direct management experience and a proficiency for cost control or recovery audits with private insurers, health care providers, health plans, under the Medicaid program under subchapter XIX, or under this subchapter.
(7) Construction relating to conduct of investigation of fraud
A recovery of an overpayment to a individual or entity by a recovery audit contractor under this subsection shall not be construed to prohibit the Secretary or the Attorney General from investigating and prosecuting, if appropriate, allegations of fraud or abuse arising from such overpayment.
(8) Annual report
The Secretary shall annually submit to Congress a report on the use of recovery audit contractors under this subsection. Each such report shall include information on the performance of such contractors in identifying underpayments and overpayments and recouping overpayments, including an evaluation of the comparative performance of such contractors and savings to the program under this subchapter.
(9) Special rules relating to parts C and D
The Secretary shall enter into contracts under paragraph (1) to require recovery audit contractors to—
(A) ensure that each MA plan under part C has an anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan;
(B) ensure that each prescription drug plan under part D has an anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan;
(C) examine claims for reinsurance payments under
(D) review estimates submitted by prescription drug plans by private plans with respect to the enrollment of high cost beneficiaries (as defined by the Secretary) and to compare such estimates with the numbers of such beneficiaries actually enrolled by such plans.
(10) Use of certain recovered funds
(A) In general
After application of paragraph (1)(C), the Secretary shall retain a portion of the amounts recovered by recovery audit contractors for each year under this section which shall be available to the program management account of the Centers for Medicare & Medicaid Services for purposes of, subject to subparagraph (B), carrying out sections 1395l(z),1 1395m(l)(16), and 1395kk–1(a)(4)(G) of this title, carrying out section 514(b) of the Medicare Access and CHIP Reauthorization Act of 2015, and implementing strategies (such as claims processing edits) to help reduce the error rate of payments under this subchapter. The amounts retained under the preceding sentence shall not exceed an amount equal to 15 percent of the amounts recovered under this subsection, and shall remain available until expended.
(B) Limitation
Except for uses that support claims processing (including edits) or system functionality for detecting fraud, amounts retained under subparagraph (A) may not be used for technological-related infrastructure, capital investments, or information systems.
(C) No reduction in payments to recovery audit contractors
Nothing in subparagraph (A) shall reduce amounts available for payments to recovery audit contractors under this subsection.
(i) Evaluations and annual report
(1) Evaluations
The Secretary shall conduct evaluations of eligible entities which the Secretary contracts with under the Program not less frequently than every 3 years.
(2) Annual report
Not later than 180 days after the end of each fiscal year (beginning with fiscal year 2011), the Secretary shall submit a report to Congress which identifies—
(A) the use of funds, including funds transferred from the Federal Hospital Insurance Trust Fund under
(B) the effectiveness of the use of such funds.
(j) Expanding activities of Medicare drug integrity contractors (MEDICs)
(1) Access to information
Under contracts entered into under this section with Medicare drug integrity contractors (including any successor entity to a Medicare drug integrity contractor), the Secretary shall authorize such contractors to directly accept prescription and necessary medical records from entities such as pharmacies, prescription drug plans, MA–PD plans, and physicians with respect to an individual in order for such contractors to provide information relevant to the determination of whether such individual is an at-risk beneficiary for prescription drug abuse, as defined in
(2) Requirement for acknowledgment of referrals
If a PDP sponsor or MA organization refers information to a contractor described in paragraph (1) in order for such contractor to assist in the determination described in such paragraph, the contractor shall—
(A) acknowledge to the sponsor or organization receipt of the referral; and
(B) in the case that any PDP sponsor or MA organization contacts the contractor requesting to know the determination by the contractor of whether or not an individual has been determined to be an individual described in such paragraph, shall 2 inform such sponsor or organization of such determination on a date that is not later than 15 days after the date on which the sponsor or organization contacts the contractor.
(3) Making data available to other entities
(A) In general
For purposes of carrying out this subsection, subject to subparagraph (B), the Secretary shall authorize MEDICs to respond to requests for information from PDP sponsors and MA organizations, State prescription drug monitoring programs, and other entities delegated by such sponsors or organizations using available programs and systems in the effort to prevent fraud, waste, and abuse.
(B) HIPAA compliant information only
Information may only be disclosed by a MEDIC under subparagraph (A) if the disclosure of such information is permitted under the Federal regulations (concerning the privacy of individually identifiable health information) promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (
(Aug. 14, 1935, ch. 531, title XVIII, §1893, as added
Editorial Notes
References in Text
Section 202(b) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (d)(2)(B), is section 202(b) of
Section 514(b) of the Medicare Access and CHIP Reauthorization Act of 2015, referred to in subsec. (h)(10)(A), is section 514(b) of
Section 264(c) of the Health Insurance Portability and Accountability Act of 1996, referred to in subsec. (j)(3)(B), is section 264(c) of
Amendments
2016—Subsec. (j).
2015—Subsec. (g)(1)(A).
Subsec. (g)(1)(A)(i).
Subsec. (g)(1)(A)(ii).
Subsec. (g)(1)(A)(iv).
Subsec. (g)(3).
Subsec. (h)(2).
Subsec. (h)(10).
2010—Subsec. (a).
Subsec. (c)(4), (5).
Subsec. (h)(1).
Subsec. (h)(2).
Subsec. (h)(3).
Subsec. (h)(4).
Subsec. (h)(9).
Subsec. (i).
2006—Subsec. (b)(6).
Subsec. (g).
Subsec. (h).
2003—Subsec. (a).
Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Amendment by
Effective Date of 2003 Amendment
"(1)
"(2)
"(3)
"(4)
"(5)
"(6)
"(7)
"(8)
Improving the Sharing of Data Between the Federal Government and State Medicaid Programs
"(a)
"(b)
"(c)
"(1)
"(2)
Extension of Two-Midnight Rule
"(a)
"(b)
"(c)
Access to Coordination of Benefits Contractor Database
1 See References in Text note below.
2 So in original. The word "shall" probably should not appear.
§1395eee. Payments to, and coverage of benefits under, programs of all-inclusive care for elderly (PACE)
(a) Receipt of benefits through enrollment in PACE program; definitions for PACE program related terms
(1) Benefits through enrollment in a PACE program
In accordance with this section, in the case of an individual who is entitled to benefits under part A or enrolled under part B and who is a PACE program eligible individual (as defined in paragraph (5)) with respect to a PACE program offered by a PACE provider under a PACE program agreement—
(A) the individual may enroll in the program under this section; and
(B) so long as the individual is so enrolled and in accordance with regulations—
(i) the individual shall receive benefits under this subchapter solely through such program; and
(ii) the PACE provider is entitled to payment under and in accordance with this section and such agreement for provision of such benefits.
(2) "PACE program" defined
For purposes of this section, the term "PACE program" means a program of all-inclusive care for the elderly that meets the following requirements:
(A) Operation
The entity operating the program is a PACE provider (as defined in paragraph (3)).
(B) Comprehensive benefits
The program provides comprehensive health care services to PACE program eligible individuals in accordance with the PACE program agreement and regulations under this section.
(C) Transition
In the case of an individual who is enrolled under the program under this section and whose enrollment ceases for any reason (including that the individual no longer qualifies as a PACE program eligible individual, the termination of a PACE program agreement, or otherwise), the program provides assistance to the individual in obtaining necessary transitional care through appropriate referrals and making the individual's medical records available to new providers.
(3) "PACE provider" defined
(A) In general
For purposes of this section, the term "PACE provider" means an entity that—
(i) subject to subparagraph (B), is (or is a distinct part of) a public entity or a private, nonprofit entity organized for charitable purposes under section 501(c)(3) of the Internal Revenue Code of 1986; and
(ii) has entered into a PACE program agreement with respect to its operation of a PACE program.
(B) Treatment of private, for-profit providers
Clause (i) of subparagraph (A) shall not apply—
(i) to entities subject to a demonstration project waiver under subsection (h); and
(ii) after the date the report under section 4804(b) of the Balanced Budget Act of 1997 is submitted, unless the Secretary determines that any of the findings described in subparagraph (A), (B), (C), or (D) of paragraph (2) of such section are true.
(4) "PACE program agreement" defined
For purposes of this section, the term "PACE program agreement" means, with respect to a PACE provider, an agreement, consistent with this section,
(5) "PACE program eligible individual" defined
For purposes of this section, the term "PACE program eligible individual" means, with respect to a PACE program, an individual who—
(A) is 55 years of age or older;
(B) subject to subsection (c)(4), is determined under subsection (c) to require the level of care required under the State medicaid plan for coverage of nursing facility services;
(C) resides in the service area of the PACE program; and
(D) meets such other eligibility conditions as may be imposed under the PACE program agreement for the program under subsection (e)(2)(A)(ii).
(6) "PACE protocol" defined
For purposes of this section, the term "PACE protocol" means the Protocol for the Program of All-inclusive Care for the Elderly (PACE), as published by On Lok, Inc., as of April 14, 1995, or any successor protocol that may be agreed upon between the Secretary and On Lok, Inc.
(7) "PACE demonstration waiver program" defined
For purposes of this section, the term "PACE demonstration waiver program" means a demonstration program under either of the following sections (as in effect before the date of their repeal):
(A) Section 603(c) of the Social Security Amendments of 1983 (
(B) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (
(8) "State administering agency" defined
For purposes of this section, the term "State administering agency" means, with respect to the operation of a PACE program in a State, the agency of that State (which may be the single agency responsible for administration of the State plan under subchapter XIX in the State) responsible for administering PACE program agreements under this section and
(9) "Trial period" defined
(A) In general
For purposes of this section, the term "trial period" means, with respect to a PACE program operated by a PACE provider under a PACE program agreement, the first 3 contract years under such agreement with respect to such program.
(B) Treatment of entities previously operating PACE demonstration waiver programs
Each contract year (including a year occurring before the effective date of this section) during which an entity has operated a PACE demonstration waiver program shall be counted under subparagraph (A) as a contract year during which the entity operated a PACE program as a PACE provider under a PACE program agreement.
(10) "Regulations" defined
For purposes of this section, the term "regulations" refers to interim final or final regulations promulgated under subsection (f) to carry out this section and
(b) Scope of benefits; beneficiary safeguards
(1) In general
Under a PACE program agreement, a PACE provider shall—
(A) provide to PACE program eligible individuals enrolled with the provider, regardless of source of payment and directly or under contracts with other entities, at a minimum—
(i) all items and services covered under this subchapter (for individuals enrolled under this section) and all items and services covered under subchapter XIX, but without any limitation or condition as to amount, duration, or scope and without application of deductibles, copayments, coinsurance, or other cost-sharing that would otherwise apply under this subchapter or such subchapter, respectively; and
(ii) all additional items and services specified in regulations, based upon those required under the PACE protocol;
(B) provide such enrollees access to necessary covered items and services 24 hours per day, every day of the year;
(C) provide services to such enrollees through a comprehensive, multidisciplinary health and social services delivery system which integrates acute and long-term care services pursuant to regulations; and
(D) specify the covered items and services that will not be provided directly by the entity, and to arrange for delivery of those items and services through contracts meeting the requirements of regulations.
(2) Quality assurance; patient safeguards
The PACE program agreement shall require the PACE provider to have in effect at a minimum—
(A) a written plan of quality assurance and improvement, and procedures implementing such plan, in accordance with regulations; and
(B) written safeguards of the rights of enrolled participants (including a patient bill of rights and procedures for grievances and appeals) in accordance with regulations and with other requirements of this subchapter and Federal and State law that are designed for the protection of patients.
(3) Treatment of medicare services furnished by noncontract physicians and other entities
(A) Application of medicare advantage requirement with respect to medicare services furnished by noncontract physicians and other entities
(B) Reference to related provision for noncontract providers of services
For the provision relating to limitations on balance billing against PACE providers for services covered under this subchapter furnished by noncontract providers of services, see
(4) Reference to related provision for services covered under subchapter XIX but not under this subchapter
For provisions relating to limitations on payments to providers participating under the State plan under subchapter XIX that do not have a contract or other agreement with a PACE provider establishing payment amounts for services covered under such plan (but not under this subchapter) when such services are furnished to enrollees of that PACE provider, see
(c) Eligibility determinations
(1) In general
The determination of whether an individual is a PACE program eligible individual—
(A) shall be made under and in accordance with the PACE program agreement; and
(B) who is entitled to medical assistance under subchapter XIX, shall be made (or who is not so entitled, may be made) by the State administering agency.
(2) Condition
An individual is not a PACE program eligible individual (with respect to payment under this section) unless the individual's health status has been determined by the Secretary or the State administering agency, in accordance with regulations, to be comparable to the health status of individuals who have participated in the PACE demonstration waiver programs. Such determination shall be based upon information on health status and related indicators (such as medical diagnoses and measures of activities of daily living, instrumental activities of daily living, and cognitive impairment) that are part of a uniform minimum data set collected by PACE providers on potential PACE program eligible individuals.
(3) Annual eligibility recertifications
(A) In general
Subject to subparagraph (B), the determination described in subsection (a)(5)(B) for an individual shall be reevaluated at least annually.
(B) Exception
The requirement of annual reevaluation under subparagraph (A) may be waived during a period in accordance with regulations in those cases where the State administering agency determines that there is no reasonable expectation of improvement or significant change in an individual's condition during the period because of the severity of chronic condition, or degree of impairment of functional capacity of the individual involved.
(4) Continuation of eligibility
An individual who is a PACE program eligible individual may be deemed to continue to be such an individual notwithstanding a determination that the individual no longer meets the requirement of subsection (a)(5)(B) if, in accordance with regulations, in the absence of continued coverage under a PACE program the individual reasonably would be expected to meet such requirement within the succeeding 6-month period.
(5) Enrollment; disenrollment
(A) Voluntary disenrollment at any time
The enrollment and disenrollment of PACE program eligible individuals in a PACE program shall be pursuant to regulations and the PACE program agreement and shall permit enrollees to voluntarily disenroll without cause at any time.
(B) Limitations on disenrollment
(i) In general
Regulations promulgated by the Secretary under this section and
(I) for nonpayment of premiums (if applicable) on a timely basis; or
(II) for engaging in disruptive or threatening behavior, as defined in such regulations (developed in close consultation with State administering agencies).
(ii) No disenrollment for noncompliant behavior
Except as allowed under regulations promulgated to carry out clause (i)(II), a PACE program may not disenroll a PACE program eligible individual on the ground that the individual has engaged in noncompliant behavior if such behavior is related to a mental or physical condition of the individual. For purposes of the preceding sentence, the term "noncompliant behavior" includes repeated noncompliance with medical advice and repeated failure to appear for appointments.
(iii) Timely review of proposed nonvoluntary disenrollment
A proposed disenrollment, other than a voluntary disenrollment, shall be subject to timely review and final determination by the Secretary or by the State administering agency (as applicable), prior to the proposed disenrollment becoming effective.
(d) Payments to PACE providers on capitated basis
(1) In general
In the case of a PACE provider with a PACE program agreement under this section, except as provided in this subsection or by regulations, the Secretary shall make prospective monthly payments of a capitation amount for each PACE program eligible individual enrolled under the agreement under this section in the same manner and from the same sources as payments are made to a Medicare+Choice organization under
(2) Capitation amount
The capitation amount to be applied under this subsection for a provider for a contract year shall be an amount specified in the PACE program agreement for the year. Such amount shall be based upon payment rates established for purposes of payment under
(3) Capitation rates determined without regard to the phase-out of the indirect costs of medical education from the annual Medicare Advantage capitation rate
Capitation amounts under this subsection shall be determined without regard to the application of
(e) PACE program agreement
(1) Requirement
(A) In general
The Secretary, in close cooperation with the State administering agency, shall establish procedures for entering into, extending, and terminating PACE program agreements for the operation of PACE programs by entities that meet the requirements for a PACE provider under this section,
(B) Numerical limitation
(i) In general
The Secretary shall not permit the number of PACE providers with which agreements are in effect under this section or under section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 to exceed—
(I) 40 as of August 5, 1997; or
(II) as of each succeeding anniversary of August 5, 1997, the numerical limitation under this subparagraph for the preceding year plus 20.
Subclause (II) shall apply without regard to the actual number of agreements in effect as of a previous anniversary date.
(ii) Treatment of certain private, for-profit providers
The numerical limitation in clause (i) shall not apply to a PACE provider that—
(I) is operating under a demonstration project waiver under subsection (h); or
(II) was operating under such a waiver and subsequently qualifies for PACE provider status pursuant to subsection (a)(3)(B)(ii).
(2) Service area and eligibility
(A) In general
A PACE program agreement for a PACE program—
(i) shall designate the service area of the program;
(ii) may provide additional requirements for individuals to qualify as PACE program eligible individuals with respect to the program;
(iii) shall be effective for a contract year, but may be extended for additional contract years in the absence of a notice by a party to terminate and is subject to termination by the Secretary and the State administering agency at any time for cause (as provided under the agreement);
(iv) shall require a PACE provider to meet all applicable State and local laws and requirements; and
(v) shall contain such additional terms and conditions as the parties may agree to, so long as such terms and conditions are consistent with this section and regulations.
(B) Service area overlap
In designating a service area under a PACE program agreement under subparagraph (A)(i), the Secretary (in consultation with the State administering agency) may exclude from designation an area that is already covered under another PACE program agreement, in order to avoid unnecessary duplication of services and avoid impairing the financial and service viability of an existing program.
(3) Data collection; development of outcome measures
(A) Data collection
(i) In general
Under a PACE program agreement, the PACE provider shall—
(I) collect data;
(II) maintain, and afford the Secretary and the State administering agency access to, the records relating to the program, including pertinent financial, medical, and personnel records; and
(III) make available to the Secretary and the State administering agency reports that the Secretary finds (in consultation with State administering agencies) necessary to monitor the operation, cost, and effectiveness of the PACE program under this section and
(ii) Requirements during trial period
During the first 3 years of operation of a PACE program (either under this section or under a PACE demonstration waiver program), the PACE provider shall provide such additional data as the Secretary specifies in regulations in order to perform the oversight required under paragraph (4)(A).
(B) Development of outcome measures
Under a PACE program agreement, the PACE provider, the Secretary, and the State administering agency shall jointly cooperate in the development and implementation of health status and quality of life outcome measures with respect to PACE program eligible individuals.
(4) Oversight
(A) Annual, close oversight during trial period
During the trial period (as defined in subsection (a)(9)) with respect to a PACE program operated by a PACE provider, the Secretary (in cooperation with the State administering agency) shall conduct a comprehensive annual review of the operation of the PACE program by the provider in order to assure compliance with the requirements of this section and regulations. Such a review shall include—
(i) an on-site visit to the program site;
(ii) comprehensive assessment of a provider's fiscal soundness;
(iii) comprehensive assessment of the provider's capacity to provide all PACE services to all enrolled participants;
(iv) detailed analysis of the entity's substantial compliance with all significant requirements of this section and regulations; and
(v) any other elements the Secretary or State administering agency considers necessary or appropriate.
(B) Continuing oversight
After the trial period, the Secretary (in cooperation with the State administering agency) shall continue to conduct such review of the operation of PACE providers and PACE programs as may be appropriate, taking into account the performance level of a provider and compliance of a provider with all significant requirements of this section and regulations.
(C) Disclosure
The results of reviews under this paragraph shall be reported promptly to the PACE provider, along with any recommendations for changes to the provider's program, and shall be made available to the public upon request.
(5) Termination of PACE provider agreements
(A) In general
Under regulations—
(i) the Secretary or a State administering agency may terminate a PACE program agreement for cause; and
(ii) a PACE provider may terminate an agreement after appropriate notice to the Secretary, the State agency, and enrollees.
(B) Causes for termination
In accordance with regulations establishing procedures for termination of PACE program agreements, the Secretary or a State administering agency may terminate a PACE program agreement with a PACE provider for, among other reasons, the fact that—
(i) the Secretary or State administering agency determines that—
(I) there are significant deficiencies in the quality of care provided to enrolled participants; or
(II) the provider has failed to comply substantially with conditions for a program or provider under this section or
(ii) the entity has failed to develop and successfully initiate, within 30 days of the date of the receipt of written notice of such a determination, a plan to correct the deficiencies, or has failed to continue implementation of such a plan.
(C) Termination and transition procedures
An entity whose PACE provider agreement is terminated under this paragraph shall implement the transition procedures required under subsection (a)(2)(C).
(6) Secretary's oversight; enforcement authority
(A) In general
Under regulations, if the Secretary determines (after consultation with the State administering agency) that a PACE provider is failing substantially to comply with the requirements of this section and regulations, the Secretary (and the State administering agency) may take any or all of the following actions:
(i) Condition the continuation of the PACE program agreement upon timely execution of a corrective action plan.
(ii) Withhold some or all further payments under the PACE program agreement under this section or
(iii) Terminate such agreement.
(B) Application of intermediate sanctions
Under regulations, the Secretary may provide for the application against a PACE provider of remedies described in section 1395w–27(g)(2) (or, for periods before January 1, 1999,
(7) Procedures for termination or imposition of sanctions
Under regulations, the provisions of
(8) Timely consideration of applications for PACE program provider status
In considering an application for PACE provider program status, the application shall be deemed approved unless the Secretary, within 90 days after the date of the submission of the application to the Secretary, either denies such request in writing or informs the applicant in writing with respect to any additional information that is needed in order to make a final determination with respect to the application. After the date the Secretary receives such additional information, the application shall be deemed approved unless the Secretary, within 90 days of such date, denies such request.
(f) Regulations
(1) In general
The Secretary shall issue interim final or final regulations to carry out this section and
(2) Use of PACE protocol
(A) In general
In issuing such regulations, the Secretary shall, to the extent consistent with the provisions of this section, incorporate the requirements applied to PACE demonstration waiver programs under the PACE protocol.
(B) Flexibility
In order to provide for reasonable flexibility in adapting the PACE service delivery model to the needs of particular organizations (such as those in rural areas or those that may determine it appropriate to use nonstaff physicians according to State licensing law requirements) under this section and
(i) The focus on frail elderly qualifying individuals who require the level of care provided in a nursing facility.
(ii) The delivery of comprehensive, integrated acute and long-term care services.
(iii) The interdisciplinary team approach to care management and service delivery.
(iv) Capitated, integrated financing that allows the provider to pool payments received from public and private programs and individuals.
(v) The assumption by the provider of full financial risk.
(C) Continuation of modifications or waivers of operational requirements under demonstration status
If a PACE program operating under demonstration authority has contractual or other operating arrangements which are not otherwise recognized in regulation and which were in effect on July 1, 2000, the Secretary (in close consultation with, and with the concurrence of, the State administering agency) shall permit any such program to continue such arrangements so long as such arrangements are found by the Secretary and the State to be reasonably consistent with the objectives of the PACE program.
(3) Application of certain additional beneficiary and program protections
(A) In general
In issuing such regulations and subject to subparagraph (B), the Secretary may apply with respect to PACE programs, providers, and agreements such requirements of part C (or, for periods before January 1, 1999,
(B) Considerations
In issuing such regulations, the Secretary shall—
(i) take into account the differences between populations served and benefits provided under this section and under part C (or, for periods before January 1, 1999,
(ii) not include any requirement that conflicts with carrying out PACE programs under this section; and
(iii) not include any requirement restricting the proportion of enrollees who are eligible for benefits under this subchapter or subchapter XIX.
(4) Construction
Nothing in this subsection shall be construed as preventing the Secretary from including in regulations provisions to ensure the health and safety of individuals enrolled in a PACE program under this section that are in addition to those otherwise provided under paragraphs (2) and (3).
(g) Waivers of requirements
With respect to carrying out a PACE program under this section, the following requirements of this subchapter (and regulations relating to such requirements) are waived and shall not apply:
(1)
(2)
(3)
(4)
(5) Paragraphs (1) and (9) of
(h) Demonstration project for for-profit entities
(1) In general
In order to demonstrate the operation of a PACE program by a private, for-profit entity, the Secretary (in close consultation with State administering agencies) shall grant waivers from the requirement under subsection (a)(3) that a PACE provider may not be a for-profit, private entity.
(2) Similar terms and conditions
(A) In general
Except as provided under subparagraph (B), and paragraph (1), the terms and conditions for operation of a PACE program by a provider under this subsection shall be the same as those for PACE providers that are nonprofit, private organizations.
(B) Numerical limitation
The number of programs for which waivers are granted under this subsection shall not exceed 10. Programs with waivers granted under this subsection shall not be counted against the numerical limitation specified in subsection (e)(1)(B).
(i) Miscellaneous provisions
Nothing in this section or
(Aug. 14, 1935, ch. 531, title XVIII, §1894, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (a)(3)(A)(i), is classified generally to Title 26, Internal Revenue Code.
Section 4804(b) of the Balanced Budget Act of 1997, referred to in subsec. (a)(3)(B)(ii), is section 4804(b) of
Section 603(c) of the Social Security Amendments of 1983, referred to in subsec. (a)(7)(A), is section 603(c) of
Section 9220 of the Consolidated Omnibus Budget Reconciliation Act of 1985, referred to in subsec. (a)(7)(A), is section 9220 of
Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986, referred to in subsecs. (a)(7)(B) and (e)(1)(B)(i), is section 9412(b) of
For the effective date of this section, referred to in subsec. (a)(9)(B), see section 4803 of
Amendments
2010—Subsecs. (h) to (j).
"With respect to a PACE program under this section, the following provisions (and regulations relating to such provisions) shall not apply:
"(1)
"(2)
"(3)
"(4)
"(5)
See Effective Date of 2010 Amendment note below.
2008—Subsec. (d)(3).
2003—Subsec. (b)(3), (4).
2000—Subsec. (f)(2)(C).
Statutory Notes and Related Subsidiaries
Change of Name
References to Medicare+Choice deemed to refer to Medicare Advantage or MA, subject to an appropriate transition provided by the Secretary of Health and Human Services in the use of those terms, see section 201 of
Effective Date of 2010 Amendment
Repeal of section 3201 of
Effective Date of 2003 Amendment
Amendment by
Effective Date of 2000 Amendment
Rural PACE Provider Grant Program
"(a)
"(1) CMS.—The term 'CMS' means the Centers for Medicare & Medicaid Services.
"(2) PACE
"(3) PACE
"(4)
"(5)
"(6)
"(b)
"(1)
"(A)
"(B)
"(C)
"(D)
"(i) Feasibility analysis and planning.
"(ii) Interdisciplinary team development.
"(iii) Development of a provider network, including contract development.
"(iv) Development or adaptation of claims processing systems.
"(v) Preparation of special education and outreach efforts required for the PACE program.
"(vi) Development of expense reporting required for calculation of outlier payments or reconciliation processes.
"(vii) Development of any special quality of care or patient satisfaction data collection efforts.
"(viii) Establishment of a working capital fund to sustain fixed administrative, facility, or other fixed costs until the provider reaches sufficient enrollment size.
"(ix) Startup and development costs incurred prior to the approval of the rural PACE pilot site's PACE provider application by CMS.
"(x) Any other efforts determined by the rural PACE pilot site to be critical to its successful startup, as approved by the Secretary.
"(E)
"(i)
"(ii)
"(2)
"(A) outreach and education to State agencies and provider organizations interested in establishing PACE programs in rural areas; and
"(B) technical assistance necessary to support rural PACE pilot sites.
"(c)
"(1)
"(2)
"(3)
"(A)
"(i) If the services are provided under a contract between the pilot site and the provider, the payment rate specified under the contract.
"(ii) The payment rate established under the original Medicare fee-for-service program for such service.
"(iii) The amount actually paid for the services by the pilot site.
"(B)
"(3)[two pars. (3) have been enacted]
"(A)[no subpar. (B) has been enacted]
"(4)
"(A)
"(B)
"(C)
"(5)
"(6)
"(A) documentation of the costs incurred with respect to the participant;
"(B) a certification that the site has complied with the requirements under paragraph (4); and
"(C) such additional information as the Secretary may require.
"(7)
"(A)
"(B)
"(d)
"(e)
Flexibility in Exercising Waiver Authority
"(1) shall approve or deny a request for a modification or a waiver of provisions of the PACE protocol not later than 90 days after the date the Secretary receives the request; and
"(2) may exercise authority to modify or waive such provisions in a manner that responds promptly to the needs of PACE programs relating to areas of employment and the use of community-based primary care physicians."
Transition; Regulations
"(a)
"(b)
"(1)
"(A) in paragraph (1), by inserting before the period at the end the following: ', except that the Secretary shall grant waivers of such requirements to up to the applicable numerical limitation specified in sections 1894(e)(1)(B) and 1934(e)(1)(B) of the Social Security Act' [
"(B) in paragraph (2)—
"(i) in subparagraph (A), by striking ', including permitting the organization to assume progressively (over the initial 3-year period of the waiver) the full financial risk'; and
"(ii) in subparagraph (C), by adding at the end the following: 'In granting further extensions, an organization shall not be required to provide for reporting of information which is only required because of the demonstration nature of the project.'
"(2)
"(3)
"(c)
"(1)
"(A) first, to entities that are operating a PACE demonstration waiver program (as defined in sections 1894(a)(7) and 1934(a)(7) of such Act [
"(B) then to entities that have applied to operate such a program as of May 1, 1997.
"(2)
"(A) to any entities that have applied for such waivers under such section as of May 1, 1997; and
"(B) to any entity that, as of May 1, 1997, has formally contracted with a State to provide services for which payment is made on a capitated basis with an understanding that the entity was seeking to become a PACE provider.
"(3)
"(d)
"(1)
"(A) Section 603(c) of the Social Security Amendments of 1983 (
"(B) Section 9220 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (
"(C) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (
"(2)
"(A)
"(B)
PACE Programs; Study and Reports
"(a)
"(1)
"(2)
"(b)
"(1)
"(2)
"(A) The number of covered lives enrolled with entities operating under demonstration project waivers under sections 1894(h) and 1934(h) of the Social Security Act is fewer than 800 (or such lesser number as the Secretary may find statistically sufficient to make determinations respecting findings described in the succeeding subparagraphs).
"(B) The population enrolled with such entities is less frail than the population enrolled with other PACE providers.
"(C) Access to or quality of care for individuals enrolled with such entities is lower than such access or quality for individuals enrolled with other PACE providers.
"(D) The application of such section has resulted in an increase in expenditures under the medicare or medicaid programs above the expenditures that would have been made if such section did not apply."
§1395fff. Prospective payment for home health services
(a) In general
Notwithstanding
(b) System of prospective payment for home health services
(1) In general
The Secretary shall establish under this subsection a prospective payment system for payment for all costs of home health services. Under the system under this subsection all services covered and paid on a reasonable cost basis under the medicare home health benefit as of August 5, 1997, including medical supplies, shall be paid for on the basis of a prospective payment amount determined under this subsection and applicable to the services involved. In implementing the system, the Secretary may provide for a transition (of not longer than 4 years) during which a portion of such payment is based on agency-specific costs, but only if such transition does not result in aggregate payments under this subchapter that exceed the aggregate payments that would be made if such a transition did not occur.
(2) Unit of payment
(A) In general
In defining a prospective payment amount under the system under this subsection, the Secretary shall consider an appropriate unit of service and the number, type, and duration of visits provided within that unit, potential changes in the mix of services provided within that unit and their cost, and a general system design that provides for continued access to quality services.
(B) 30-day unit of service
For purposes of implementing the prospective payment system with respect to home health units of service furnished during a year beginning with 2020, the Secretary shall apply a 30-day unit of service as the unit of service applied under this paragraph.
(3) Payment basis
(A) Initial basis
(i) In general
Under such system the Secretary shall provide for computation of a standard prospective payment amount (or amounts) as follows:
(I) Such amount (or amounts) shall initially be based on the most current audited cost report data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for the 12-month period beginning on the date the Secretary implements the system shall be equal to the total amount that would have been made if the system had not been in effect and if
(II) For the 12-month period beginning after the period described in subclause (I), such amount (or amounts) shall be equal to the amount (or amounts) determined under subclause (I), updated under subparagraph (B).
(III) Subject to clause (iii), for periods beginning after the period described in subclause (II), such amount (or amounts) shall be equal to the amount (or amounts) that would have been determined under subclause (I) that would have been made for fiscal year 2001 if the system had not been in effect and if
Each such amount shall be standardized in a manner that eliminates the effect of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner consistent with the case mix and wage level adjustments provided under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences based upon whether or not the services or agency are in an urbanized area.
(ii) Reduction
The reduction described in this clause is a reduction by 15 percent in the cost limits and per beneficiary limits described in
(iii) Adjustment for 2014 and subsequent years
(I) In general
Subject to subclause (II), for 2014 and subsequent years, the amount (or amounts) that would otherwise be applicable under clause (i)(III) shall be adjusted by a percentage determined appropriate by the Secretary to reflect such factors as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other factors that the Secretary considers to be relevant. In conducting the analysis under the preceding sentence, the Secretary may consider differences between hospital-based and freestanding agencies, between for-profit and nonprofit agencies, and between the resource costs of urban and rural agencies. Such adjustment shall be made before the update under subparagraph (B) is applied for the year.
(II) Transition
The Secretary shall provide for a 4-year phase-in (in equal increments) of the adjustment under subclause (I), with such adjustment being fully implemented for 2017. During each year of such phase-in, the amount of any adjustment under subclause (I) for the year may not exceed 3.5 percent of the amount (or amounts) applicable under clause (i)(III) as of March 23, 2010.
(iv) Budget neutrality for 2020
With respect to payments for home health units of service furnished that end during the 12-month period beginning January 1, 2020, the Secretary shall calculate a standard prospective payment amount (or amounts) for 30-day units of service (as described in paragraph (2)(B)) for the prospective payment system under this subsection. Such standard prospective payment amount (or amounts) shall be calculated in a manner such that the estimated aggregate amount of expenditures under the system during such period with application of paragraph (2)(B) is equal to the estimated aggregate amount of expenditures that otherwise would have been made under the system during such period if paragraph (2)(B) had not been enacted. The previous sentence shall be applied before (and not affect the application of) paragraph (3)(B). In calculating such amount (or amounts), the Secretary shall make assumptions about behavior changes that could occur as a result of the implementation of paragraph (2)(B) and the case-mix adjustment factors established under paragraph (4)(B) and shall provide a description of such assumptions in the notice and comment rulemaking used to implement this clause.
(B) Annual update
(i) In general
The standard prospective payment amount (or amounts) shall be adjusted for fiscal year 2002 and for fiscal year 2003 and for each subsequent year (beginning with 2004) in a prospective manner specified by the Secretary by the home health applicable increase percentage (as defined in clause (ii)) applicable to the fiscal year or year involved.
(ii) Home health applicable increase percentage
For purposes of this subparagraph, the term "home health applicable increase percentage" means, with respect to—
(I) each of fiscal years 2002 and 2003, the home health market basket percentage increase (as defined in clause (iii)) minus 1.1 percentage points;
(II) for 1 the last calendar quarter of 2003 and the first calendar quarter of 2004, the home health market basket percentage increase;
(III) the last 3 calendar quarters of 2004, and all of 2005 2 the home health market basket percentage increase minus 0.8 percentage points;
(IV) 2006, 0 percent; and
(V) any subsequent year, subject to clauses (v) and (vi), the home health market basket percentage increase.
(iii) Home health market basket percentage increase
For purposes of this subsection, the term "home health market basket percentage increase" means, with respect to a fiscal year or year, a percentage (estimated by the Secretary before the beginning of the fiscal year or year) determined and applied with respect to the mix of goods and services included in home health services in the same manner as the market basket percentage increase under
(iv) Adjustment for case mix changes
Insofar as the Secretary determines that the adjustments under paragraph (4)(A)(i) for a previous fiscal year or year (or estimates that such adjustments for a future fiscal year or year) did (or are likely to) result in a change in aggregate payments under this subsection during the fiscal year or year that are a result of changes in the coding or classification of different units of services that do not reflect real changes in case mix, the Secretary may adjust the standard prospective payment amount (or amounts) under paragraph (3) for subsequent fiscal years or years so as to eliminate the effect of such coding or classification changes.
(v) Adjustment if quality data not submitted
(I) Adjustment
For purposes of clause (ii)(V), for 2007 and each subsequent year, in the case of a home health agency that does not submit data to the Secretary in accordance with subclauses (II) and (IV) with respect to such a year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points. Such reduction shall apply only with respect to the year involved, and the Secretary shall not take into account such reduction in computing the prospective payment amount under this section for a subsequent year, and the Medicare Payment Advisory Commission shall carry out the requirements under section 5201(d) of the Deficit Reduction Act of 2005.
(II) Submission of quality data
Subject to subclause (V), for 2007 and each subsequent year, each home health agency shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this clause.
(III) Public availability of data submitted
The Secretary shall establish procedures for making data submitted under subclause (II) and subclause (IV)(aa) available to the public. Such procedures shall ensure that a home health agency has the opportunity to review the data that is to be made public with respect to the agency prior to such data being made public.
(IV) Submission of additional data
(aa) In general
For the year beginning on the specified application date (as defined in subsection (a)(2)(E) of
(bb) Standardized patient assessment data
For 2019 and each subsequent year, in addition to such data described in item (aa), each home health agency shall submit to the Secretary standardized patient assessment data required under subsection (b)(1) of
(cc) Submission
Data shall be submitted under items (aa) and (bb) in the form and manner, and at the time, specified by the Secretary for purposes of this clause.
(V) Non-duplication
To the extent data submitted under subclause (IV) duplicates other data required to be submitted under subclause (II), the submission of such data under subclause (IV) shall be in lieu of the submission of such data under subclause (II). The previous sentence shall not apply insofar as the Secretary determines it is necessary to avoid a delay in the implementation of
(vi) Adjustments
After determining the home health market basket percentage increase under clause (iii), and after application of clause (v), the Secretary shall reduce such percentage—
(I) for 2015 and each subsequent year (except 2018 and 2020), by the productivity adjustment described in
(II) for each of 2011, 2012, and 2013, by 1 percentage point.
The application of this clause may result in the home health market basket percentage increase under clause (iii) being less than 0.0 for a year, and may result in payment rates under the system under this subsection for a year being less than such payment rates for the preceding year.
(C) Adjustment for outliers
The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to home health services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to 5 percent of the total payments estimated to be made based on the prospective payment system under this subsection for the period.
(D) Behavior assumptions and adjustments
(i) In general
The Secretary shall annually determine the impact of differences between assumed behavior changes (as described in paragraph (3)(A)(iv)) and actual behavior changes on estimated aggregate expenditures under this subsection with respect to years beginning with 2020 and ending with 2026.
(ii) Permanent adjustments
The Secretary shall, at a time and in a manner determined appropriate, through notice and comment rulemaking, provide for one or more permanent increases or decreases to the standard prospective payment amount (or amounts) for applicable years, on a prospective basis, to offset for such increases or decreases in estimated aggregate expenditures (as determined under clause (i)).
(iii) Temporary adjustments for retrospective behavior
The Secretary shall, at a time and in a manner determined appropriate, through notice and comment rulemaking, provide for one or more temporary increases or decreases to the payment amount for a unit of home health services (as determined under paragraph (4)) for applicable years, on a prospective basis, to offset for such increases or decreases in estimated aggregate expenditures (as determined under clause (i)). Such a temporary increase or decrease shall apply only with respect to the year for which such temporary increase or decrease is made, and the Secretary shall not take into account such a temporary increase or decrease in computing such amount under this subsection for a subsequent year.
(4) Payment computation
(A) In general
The payment amount for a unit of home health services shall be the applicable standard prospective payment amount adjusted as follows:
(i) Case mix adjustment
The amount shall be adjusted by an appropriate case mix adjustment factor (established under subparagraph (B)).
(ii) Area wage adjustment
The portion of such amount that the Secretary estimates to be attributable to wages and wage-related costs shall be adjusted for geographic differences in such costs by an area wage adjustment factor (established under subparagraph (C)) for the area in which the services are furnished or such other area as the Secretary may specify.
(B) Establishment of case mix adjustment factors
(i) In general
The Secretary shall establish appropriate case mix adjustment factors for home health services in a manner that explains a significant amount of the variation in cost among different units of services.
(ii) Treatment of therapy thresholds
For 2020 and subsequent years, the Secretary shall eliminate the use of therapy thresholds (established by the Secretary) in case mix adjustment factors established under clause (i) for calculating payments under the prospective payment system under this subsection.
(C) Establishment of area wage adjustment factors
The Secretary shall establish area wage adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of home health services in a geographic area compared to the national average applicable level. Such factors may be the factors used by the Secretary for purposes of
(5) Outliers
(A) In general
Subject to subparagraph (B), the Secretary may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph with respect to a fiscal year or year may not exceed 2.5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year.
(B) Program specific outlier cap
The estimated total amount of additional payments or payment adjustments made under subparagraph (A) with respect to a home health agency for a year (beginning with 2011) may not exceed an amount equal to 10 percent of the estimated total amount of payments made under this section (without regard to this paragraph) with respect to the home health agency for the year.
(6) Proration of prospective payment amounts
If a beneficiary elects to transfer to, or receive services from, another home health agency within the period covered by the prospective payment amount, the payment shall be prorated between the home health agencies involved.
(c) Requirements for payment information
With respect to home health services furnished on or after October 1, 1998, no claim for such a service may be paid under this subchapter unless—
(1) the claim has the unique identifier for the physician 2 the nurse practitioner or clinical nurse specialist (as those terms are defined in
(2) in the case of a service visit described in paragraph (1), (2), (3), or (4) of
(3) in the case of home health services furnished on or after January 1, 2019, the claim contains the code for the county (or equivalent area) in which the home health service was furnished.
(d) Limitation on review
There shall be no administrative or judicial review under
(1) the establishment of a transition period under subsection (b)(1);
(2) the definition and application of payment units under subsection (b)(2);
(3) the computation of initial standard prospective payment amounts under subsection (b)(3)(A) (including the reduction described in clause (ii) of such subsection);
(4) the establishment of the adjustment for outliers under subsection (b)(3)(C);
(5) the establishment of case mix and area wage adjustments under subsection (b)(4); and
(6) the establishment of any adjustments for outliers under subsection (b)(5).
(e) Construction related to home health services
(1) Telecommunications
Nothing in this section shall be construed as preventing a home health agency furnishing a home health unit of service for which payment is made under the prospective payment system established by this section for such units of service from furnishing services via a telecommunication system if such services—
(A) do not substitute for in-person home health services ordered as part of a plan of care certified by a physician 2 a nurse practitioner or clinical nurse specialist, or a physician assistant pursuant to
(B) are not considered a home health visit for purposes of eligibility or payment under this subchapter.
(2) Rule of construction regarding requirement for certification
Nothing in this section shall be construed as waiving the requirement for a certification under
(Aug. 14, 1935, ch. 531, title XVIII, §1895, as added
Editorial Notes
References in Text
Section 5201(d) of the Deficit Reduction Act of 2005, referred to in subsec. (b)(3)(B)(v)(I), is section 5201(d) of title V of
Amendments
2020—Subsec. (c)(1).
Subsec. (e)(1)(A).
Subsec. (e)(2).
2018—Subsec. (b)(2).
Subsec. (b)(3)(A)(iv).
Subsec. (b)(3)(B)(iii).
Subsec. (b)(3)(B)(vi)(I).
Subsec. (b)(3)(D).
Subsec. (b)(4)(B).
Subsec. (c)(3).
2015—Subsec. (b)(3)(B)(iii).
Subsec. (b)(3)(B)(vi)(I).
2014—Subsec. (b)(3)(B)(v)(I).
Subsec. (b)(3)(B)(v)(II).
Subsec. (b)(3)(B)(v)(III).
Subsec. (b)(3)(B)(v)(IV), (V).
2010—Subsec. (b)(3)(A)(i)(III).
Subsec. (b)(3)(A)(iii).
Subsec. (b)(3)(B)(ii)(V).
Subsec. (b)(3)(B)(vi).
Subsec. (b)(3)(B)(vi)(II).
Subsec. (b)(3)(C).
Subsec. (b)(5).
2006—Subsec. (b)(3)(B)(ii)(III).
Subsec. (b)(3)(B)(ii)(IV).
Subsec. (b)(3)(B)(ii)(V).
Subsec. (b)(3)(B)(v).
2003—Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(ii)(I).
Subsec. (b)(3)(B)(ii)(II).
Subsec. (b)(3)(B)(ii)(III).
Subsec. (b)(3)(B)(ii)(IV).
Subsec. (b)(3)(B)(iii).
Subsec. (b)(3)(B)(iv).
Subsec. (b)(5).
2000—Subsec. (b)(3)(A)(i)(II).
Subsec. (b)(3)(A)(i)(III).
Subsec. (b)(3)(B)(iv).
Subsec. (e).
1999—Subsec. (b)(1).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(i)(I).
Subsec. (b)(3)(A)(i)(II).
Subsec. (b)(3)(B)(ii)(I).
1998—Subsec. (a).
Subsec. (b)(3)(A)(i).
Subsec. (b)(3)(A)(ii).
Subsec. (b)(3)(B)(i).
Subsec. (b)(3)(B)(ii), (iii).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Secretary of Health and Human Services to prescribe regulations to apply the amendments made by
Effective Date of 2000 Amendment
Effective Date of 1999 Amendment
Amendment by section 1000(a)(6) [title III, §303(b)] of
Amendment by section 1000(a)(6) [title III, §321(k)(19)] of
Effective Date
Increasing Transparency for Home Health Payments Under the Medicare Program
"(a)
"(1) Electronic data files showing the Centers for Medicare & Medicaid Services simulation of 60-day episodes under the home health prospective payment system in effect prior to the Patient Driven Groupings Model using data from 30-day periods paid under such Model, if such data are used in determining payment adjustments under clauses (ii) or (iii) of such section 1895(b)(3)(D).
"(2) To the extent practicable, a description of actual behavior changes, as described in clause (i) of such section 1895(b)(3)(D), including behavior changes as a result of the implementation of sections 1895(b)(2)(B) and 1895(b)(4)(B) of the Social Security Act (
"(b)
"(1)
"(2)
"(c)
Study and Report on the Development of Home Health Payment Revisions in Order To Ensure Access to Care and Payment for Severity of Illness
"(1)
"(A) Methods to potentially revise the home health prospective payment system under section 1895 of the Social Security Act (
"(i) payment adjustments for services that may involve additional or fewer resources;
"(ii) changes to reflect resources involved with providing home health services to low-income Medicare beneficiaries or Medicare beneficiaries residing in medically underserved areas;
"(iii) ways outlier payments might be revised to reflect costs of treating Medicare beneficiaries with high levels of severity of illness; and
"(iv) other issues determined appropriate by the Secretary.
"(B) Operational issues involved with potential implementation of potential revisions to the home health payment system, including impacts for both home health agencies and administrative and systems issues for the Centers for Medicare & Medicaid Services, and any possible payment vulnerabilities associated with implementing potential revisions.
"(C) Whether additional research might be needed.
"(D) Other items determined appropriate by the Secretary.
"(2)
"(A) population density and relative patient access to care;
"(B) variations in service costs for providing care to individuals who are dually eligible under the Medicare and Medicaid programs;
"(C) the presence of severe or chronic diseases, which might be measured by multiple, discontinuous home health episodes;
"(D) poverty status, such as evidenced by the receipt of Supplemental Security Income under title XVI of the Social Security Act [
"(E) other factors determined appropriate by the Secretary.
"(3)
"(4)
"(5)
"(A)
"(B)
"(C)
"(i) shall not apply to payments for home health services under title XVIII [
"(ii) shall not be taken into account in calculating the payment amounts applicable for such services after such period.
"(D)
"(E)
"(F)
"(i) provide for an evaluation of the project; and
"(ii) submit to Congress, by a date specified by the Secretary, a report on the project.
"(G)
Temporary Increase for Home Health Services Furnished in a Rural Area
"(a)
"(b)
"(1)
"(A) is in the highest quartile of all counties (or equivalent areas) based on the number of Medicare home health episodes furnished per 100 individuals who are entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act [
"(i) in the case of episodes and visits ending during 2019, by 1.5 percent; and
"(ii) in the case of episodes and visits ending during 2020, by 0.5 percent;
"(B) has a population density of 6 individuals or fewer per square mile of land area and is not described in subparagraph (A)—
"(i) in the case of episodes and visits ending during 2019, by 4 percent;
"(ii) in the case of episodes and visits ending during 2020, by 3 percent;
"(iii) in the case of episodes and visits ending during 2021, by 2 percent;
"(iv) in the case of episodes and visits ending during 2022, by 1 percent; and
"(v) in the case of episodes and visits ending during 2023, by 1 percent; and
"(C) is not described in either subparagraph (A) or (B)—
"(i) in the case of episodes and visits ending during 2019, by 3 percent;
"(ii) in the case of episodes and visits ending during 2020, by 2 percent; and
"(iii) in the case of episodes and visits ending during 2021, by 1 percent.
"(2)
"(A)
"(B)
"(i) The Secretary shall use data from 2015.
"(ii) The Secretary shall exclude data from the territories (and the territories shall not be described in such paragraph).
"(iii) The Secretary may exclude data from counties (or equivalent areas) in rural areas with a low volume of home health episodes (and if data is so excluded with respect to a county (or equivalent area), such county (or equivalent area) shall not be described in such paragraph).
"(C)
"(3)
"(c)
"(d)
"(1) shall not apply to episodes and visits ending after such period; and
"(2) shall not be taken into account in calculating the payment amounts applicable for episodes and visits occurring after such period."
Demonstration Project for Medical Adult Day-Care Services
"(a)
"(b)
"(1)
"(2)
"(c)
"(d)
"(e)
"(f)
"(g)
"(h)
"(1) An analysis of the patient outcomes and costs of furnishing care to the medicare beneficiaries participating in the project as compared to such outcomes and costs to beneficiaries receiving only home health services for the same health conditions.
"(2) Such recommendations regarding the extension, expansion, or termination of the project as the Secretary determines appropriate.
"(i)
"(1)
"(2)
"(A) has been licensed or certified by a State to furnish medical adult day-care services in the State for a continuous 2-year period;
"(B) is engaged in providing skilled nursing services and other therapeutic services directly or under arrangement with a home health agency;
"(C) is licensed and certified by the State in which it operates or meets such standards established by the Secretary to assure quality of care and such other requirements as the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services in the facility; and
"(D) provides medical adult day-care services.
"(3)
"(A) home health service items and services described in paragraphs (1) through (7) of section 1861(m) [probably means section 1861(m) of the Social Security Act,
"(B) a program of supervised activities furnished in a group setting in the facility that—
"(i) meet such criteria as the Secretary determines appropriate; and
"(ii) is designed to promote physical and mental health of the individuals; and
"(C) such other services as the Secretary may specify.
"(4)
Temporary Suspension of Oasis Requirement for Collection of Data on Non-Medicare and Non-Medicaid Patients
"(a)
"(b)
"(1) begins on the date of the enactment of this Act [Dec. 8, 2003]; and
"(2) ends on the last day of the second month beginning after the date as of which the Secretary has published final regulations regarding the collection and use by the Centers for Medicare & Medicaid Services of non-medicare/medicaid OASIS information following the submission of the report required under subsection (c).
"(c)
"(1)
"(A) whether there are unique benefits from the analysis of such information that cannot be derived from other information available to, or collected by, such agencies; and
"(B) the value of collecting such information by small home health agencies compared to the administrative burden related to such collection.
In conducting the study the Secretary shall obtain recommendations from quality assessment experts in the use of such information and the necessity of small, as well as large, home health agencies collecting such information.
"(2)
"(d)
MedPAC Study on Medicare Margins of Home Health Agencies
"(a)
"(b)
Special Rule for Payment for Fiscal Year 2001 Based on Adjusted Prospective Payment Amounts
"(1)
"(A) with respect to episodes and visits ending on or after October 1, 2000, and before April 1, 2001, use the final standardized and budget neutral prospective payment amounts for 60-day episodes and standardized average per visit amounts for fiscal year 2001 as published by the Secretary in the Federal Register on July 3, 2000 (65 Fed. Reg. 41128–41214); and
"(B) with respect to episodes and visits ending on or after April 1, 2001, and before October 1, 2001, use such amounts increased by 2.2 percent.
"(2)
Temporary Two-Month Periodic Interim Payment
"(a)
"(b)
"(1) notifies the Secretary that such agency does not want to receive such payment;
"(2) is not receiving payments pursuant to section 405.371 of title 42, Code of Federal Regulations;
"(3) is excluded from the medicare program under title XI of the Social Security Act [
"(4) no longer has a provider agreement under section 1866 of such Act (
"(5) is no longer in business; or
"(6) is subject to a court order providing for the withholding of medicare payments under title XVIII of such Act [
Temporary Increase for Home Health Services Furnished in a Rural Area
"(a) 24
"(b)
Clarification of Application of Temporary Payment Increases for 2001
"(1)
"(2)
Adjustment To Reflect Administrative Costs Not Included in the Interim Payment System; GAO Report on Costs of Compliance With Oasis Data Collection Requirements
"(a)
"(1)
"(2)
"(A)
"(B)
"(3)
"(4)
"(A)
"(B)
"(C)
"(b)
"(1)
"(A)
"(B)
"(i) An assessment of the costs incurred by medicare home health agencies in complying with such data collection requirement.
"(ii) An analysis of the effect of such data collection requirement on the privacy interests of patients from whom data is collected.
"(C)
"(2)
"(A)
"(B)
Report to Congress on Need for Reductions
Study and Report to Congress Regarding Exemption of Rural Agencies and Populations From Inclusion in Home Health Prospective Payment System
"(a)
"(b)
Case Mix System Development
Case Mix System; Submission of Data
Prospective Payment System Contingency
Reports to Congress Regarding Home Health Cost Containment
"(a)
"(b)
1 So in original. The word "for" probably should not appear.
2 So in original. Probably should be followed by a comma.
§1395ggg. Omitted
Editorial Notes
Codification
Section, act Aug. 14, 1935, ch. 531, title XVIII, §1896, as added
§1395hhh. Health care infrastructure improvement program
(a) Establishment
The Secretary shall establish a loan program that provides loans to qualifying hospitals for payment of the capital costs of projects described in subsection (d).
(b) Application
No loan may be provided under this section to a qualifying hospital except pursuant to an application that is submitted and approved in a time, manner, and form specified by the Secretary. A loan under this section shall be on such terms and conditions and meet such requirements as the Secretary determines appropriate.
(c) Selection criteria
(1) In general
The Secretary shall establish criteria for selecting among qualifying hospitals that apply for a loan under this section. Such criteria shall consider the extent to which the project for which loan is sought is nationally or regionally significant, in terms of expanding or improving the health care infrastructure of the United States or the region or in terms of the medical benefit that the project will have.
(2) Qualifying hospital defined
For purposes of this section, the term "qualifying hospital" means a hospital or an entity described in paragraph (3) that—
(A) is engaged in research in the causes, prevention, and treatment of cancer; and
(B) is designated as a cancer center for the National Cancer Institute or is designated by the State legislature as the official cancer institute of the State and such designation by the State legislature occurred prior to December 8, 2003.
(3) Entity described
An entity described in this paragraph is an entity that—
(A) is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code;
(B) has at least 1 existing memorandum of understanding or affiliation agreement with a hospital located in the State in which the entity is located; and
(C) retains clinical outpatient treatment for cancer on site as well as lab research and education and outreach for cancer in the same facility.
(d) Projects
A project described in this subsection is a project of a qualifying hospital that is designed to improve the health care infrastructure of the hospital, including construction, renovation, or other capital improvements.
(e) State and local permits
The provision of a loan under this section with respect to a project shall not—
(1) relieve any recipient of the loan of any obligation to obtain any required State or local permit or approval with respect to the project;
(2) limit the right of any unit of State or local government to approve or regulate any rate of return on private equity invested in the project; or
(3) otherwise supersede any State or local law (including any regulation) applicable to the construction or operation of the project.
(f) Forgiveness of indebtedness
The Secretary may forgive a loan provided to a qualifying hospital under this section under terms and conditions that are analogous to the loan forgiveness provision for student loans under part D of title IV of the Higher Education Act of 1965 (
(A) an outreach program for cancer prevention, early diagnosis, and treatment that provides services to a substantial majority of the residents of a State or region, including residents of rural areas;
(B) an outreach program for cancer prevention, early diagnosis, and treatment that provides services to multiple Indian tribes; and
(C)(i) unique research resources (such as population databases); or
(ii) an affiliation with an entity that has unique research resources.
(g) Funding
(1) In general
There are appropriated, out of amounts in the Treasury not otherwise appropriated, to carry out this section, $200,000,000, to remain available during the period beginning on July 1, 2004, and ending on September 30, 2008.
(2) Administrative costs
From funds made available under paragraph (1), the Secretary may use, for the administration of this section, not more than $2,000,000 for each of fiscal years 2004 through 2008.
(3) Availability
Amounts appropriated under this section shall be available for obligation on July 1, 2004.
(h) Report to Congress
Not later than 4 years after December 8, 2003, the Secretary shall submit to Congress a report on the projects for which loans are provided under this section and a recommendation as to whether the Congress should authorize the Secretary to continue loans under this section beyond fiscal year 2008.
(i) Limitation on review
There shall be no administrative or judicial review of any determination made by the Secretary under this section.
(Aug. 14, 1935, ch. 531, title XVIII, §1897, as added
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (c)(3)(A), is classified generally to Title 26, Internal Revenue Code.
The Higher Education Act of 1965, referred to in subsec. (f), is
Amendments
2005—Subsec. (c)(2).
Subsec. (c)(2)(B).
Subsec. (c)(3).
Subsec. (i).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
§1395iii. Medicare Improvement Fund
(a) Establishment
The Secretary shall establish under this subchapter a Medicare Improvement Fund (in this section referred to as the "Fund") which shall be available to the Secretary to make improvements under the original Medicare fee-for-service program under parts A and B for individuals entitled to, or enrolled for, benefits under part 1 or enrolled under part B including adjustments to payments for items and services furnished by providers of services and suppliers under such original Medicare fee-for-service program.
(b) Funding
(1) In general
There shall be available to the Fund, for expenditures from the Fund for services furnished during and after fiscal year 2022, $0.
(2) Payment from Trust Funds
The amount specified under paragraph (1) shall be available to the Fund, as expenditures are made from the Fund, from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such proportion as the Secretary determines appropriate.
(3) Funding limitation
Amounts in the Fund shall be available in advance of appropriations but only if the total amount obligated from the Fund does not exceed the amount available to the Fund under paragraph (1). The Secretary may obligate funds from the Fund only if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services and the appropriate budget officer certify) that there are available in the Fund sufficient amounts to cover all such obligations incurred consistent with the previous sentence.
(4) No effect on payments in subsequent years
In the case that expenditures from the Fund are applied to, or otherwise affect, a payment rate for an item or service under this subchapter for a year, the payment rate for such item or service shall be computed for a subsequent year as if such application or effect had never occurred.
(Aug. 14, 1935, ch. 531, title XVIII, §1898, as added
Editorial Notes
Amendments
2024—Subsec. (b)(1).
2023—Subsec. (b)(1).
2022—Subsec. (b)(1).
2021—Subsec. (b)(1).
2020—Subsec. (b)(1).
2018—Subsec. (b)(1).
2017—Subsec. (b)(1).
2016—Subsec. (b)(1).
2015—Subsec. (b)(1).
2014—
Subsec. (a).
Subsec. (b)(1).
"(A) fiscal year 2014, $0; and
"(B) fiscal year 2015, $0."
Subsec. (b)(2).
2013—Subsec. (b)(1).
"(A) fiscal year 2014, $0;
"(B) fiscal year 2015, $275,000,000; and
"(C) fiscal year 2020 and each subsequent fiscal year, the Secretary's estimate, as of July 1 of the fiscal year, of the aggregate reduction in expenditures under this subchapter during the preceding fiscal year directly resulting from the reduction in payment amounts under
2010—Subsec. (b)(1)(A).
Subsec. (b)(1)(B).
2009—Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(1)(A).
Subsec. (b)(1)(B), (C).
Subsec. (b)(4).
2008—Subsec. (b)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2016 Amendment
Amendment by
§1395jjj. Shared savings program
(a) Establishment
(1) 1 In general
Not later than January 1, 2012, the Secretary shall establish a shared savings program (in this section referred to as the "program") that promotes accountability for a patient population and coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery. Under such program—
(A) groups of providers of services and suppliers meeting criteria specified by the Secretary may work together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (referred to in this section as an "ACO"); and
(B) ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings under subsection (d)(2).
(b) Eligible ACOs
(1) In general
Subject to the succeeding provisions of this subsection, as determined appropriate by the Secretary, the following groups of providers of services and suppliers which have established a mechanism for shared governance are eligible to participate as ACOs under the program under this section:
(A) ACO professionals in group practice arrangements.
(B) Networks of individual practices of ACO professionals.
(C) Partnerships or joint venture arrangements between hospitals and ACO professionals.
(D) Hospitals employing ACO professionals.
(E) Such other groups of providers of services and suppliers as the Secretary determines appropriate.
(2) Requirements
An ACO shall meet the following requirements:
(A) The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it.
(B) The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period (referred to in this section as the "agreement period").
(C) The ACO shall have a formal legal structure that would allow the organization to receive and distribute payments for shared savings under subsection (d)(2) to participating providers of services and suppliers.
(D) The ACO shall include primary care ACO professionals that are sufficient for the number of Medicare fee-for-service beneficiaries assigned to the ACO under subsection (c). At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it under subsection (c) in order to be eligible to participate in the ACO program.
(E) The ACO shall provide the Secretary with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2).
(F) The ACO shall have in place a leadership and management structure that includes clinical and administrative systems.
(G) The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.
(H) The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans.
(I) An ACO that seeks to operate an ACO Beneficiary Incentive Program pursuant to subsection (m) shall apply to the Secretary at such time, in such manner, and with such information as the Secretary may require.
(3) Quality and other reporting requirements
(A) In general
The Secretary shall determine appropriate measures to assess the quality of care furnished by the ACO, such as measures of—
(i) clinical processes and outcomes;
(ii) patient and, where practicable, caregiver experience of care; and
(iii) utilization (such as rates of hospital admissions for ambulatory care sensitive conditions).
(B) Reporting requirements
An ACO shall submit data in a form and manner specified by the Secretary on measures the Secretary determines necessary for the ACO to report in order to evaluate the quality of care furnished by the ACO. Such data may include care transitions across health care settings, including hospital discharge planning and post-hospital discharge follow-up by ACO professionals, as the Secretary determines appropriate.
(C) Quality performance standards
The Secretary shall establish quality performance standards to assess the quality of care furnished by ACOs. The Secretary shall seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new measures, or both for purposes of assessing such quality of care.
(D) Other reporting requirements
The Secretary may, as the Secretary determines appropriate, incorporate reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI) under
(4) No duplication in participation in shared savings programs
A provider of services or supplier that participates in any of the following shall not be eligible to participate in an ACO under this section:
(A) A model tested or expanded under
(B) The independence at home medical practice pilot program under
(c) Assignment of Medicare fee-for-service beneficiaries to ACOs
(1) In general
Subject to paragraph (2), the Secretary shall determine an appropriate method to assign Medicare fee-for-service beneficiaries to an ACO based on their utilization of—
(A) in the case of performance years beginning on or after April 1, 2012, primary care services provided under this subchapter by an ACO professional described in subsection (h)(1)(A); and
(B) in the case of performance years beginning on or after January 1, 2019, services provided under this subchapter by a Federally qualified health center or rural health clinic (as those terms are defined in
(2) Providing flexibility
(A) Choice of prospective assignment
For each agreement period (effective for agreements entered into or renewed on or after January 1, 2020), in the case where an ACO established under the program is in a Track that provides for the retrospective assignment of Medicare fee-for-service beneficiaries to the ACO, the Secretary shall permit the ACO to choose to have Medicare fee-for-service beneficiaries assigned prospectively, rather than retrospectively, to the ACO for an agreement period.
(B) Assignment based on voluntary identification by medicare fee-for-service beneficiaries
(i) In general
For performance year 2018 and each subsequent performance year, if a system is available for electronic designation, the Secretary shall permit a Medicare fee-for-service beneficiary to voluntarily identify an ACO professional as the primary care provider of the beneficiary for purposes of assigning such beneficiary to an ACO, as determined by the Secretary.
(ii) Notification process
The Secretary shall establish a process under which a Medicare fee-for-service beneficiary is—
(I) notified of their ability to make an identification described in clause (i); and
(II) informed of the process by which they may make and change such identification.
(iii) Superseding claims-based assignment
A voluntary identification by a Medicare fee-for-service beneficiary under this subparagraph shall supersede any claims-based assignment otherwise determined by the Secretary.
(d) Payments and treatment of savings
(1) Payments
(A) In general
Under the program, subject to paragraph (3), payments shall continue to be made to providers of services and suppliers participating in an ACO under the original Medicare fee-for-service program under parts A and B in the same manner as they would otherwise be made except that a participating ACO is eligible to receive payment for shared savings under paragraph (2) if—
(i) the ACO meets quality performance standards established by the Secretary under subsection (b)(3); and
(ii) the ACO meets the requirement under subparagraph (B)(i).
(B) Savings requirement and benchmark
(i) Determining savings
In each year of the agreement period, an ACO shall be eligible to receive payment for shared savings under paragraph (2) only if the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries for parts A and B services, adjusted for beneficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark under clause (ii). The Secretary shall determine the appropriate percent described in the preceding sentence to account for normal variation in expenditures under this subchapter, based upon the number of Medicare fee-for-service beneficiaries assigned to an ACO.
(ii) Establish and update benchmark
The Secretary shall estimate a benchmark for each agreement period for each ACO using the most recent available 3 years of per-beneficiary expenditures for parts A and B services for Medicare fee-for-service beneficiaries assigned to the ACO. Such benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for parts A and B services under the original Medicare fee-for-service program, as estimated by the Secretary. Such benchmark shall be reset at the start of each agreement period.
(2) Payments for shared savings
Subject to performance with respect to the quality performance standards established by the Secretary under subsection (b)(3), if an ACO meets the requirements under paragraph (1), a percent (as determined appropriate by the Secretary) of the difference between such estimated average per capita Medicare expenditures in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by the program under this subchapter. The Secretary shall establish limits on the total amount of shared savings that may be paid to an ACO under this paragraph.
(3) Monitoring avoidance of at-risk patients
If the Secretary determines that an ACO has taken steps to avoid patients at risk in order to reduce the likelihood of increasing costs to the ACO the Secretary may impose an appropriate sanction on the ACO, including termination from the program.
(4) Termination
The Secretary may terminate an agreement with an ACO if it does not meet the quality performance standards established by the Secretary under subsection (b)(3).
(e) Administration
(f) Waiver authority
The Secretary may waive such requirements of
(g) Limitations on review
There shall be no administrative or judicial review under
(1) the specification of criteria under subsection (a)(1)(B);
(2) the assessment of the quality of care furnished by an ACO and the establishment of performance standards under subsection (b)(3);
(3) the assignment of Medicare fee-for-service beneficiaries to an ACO under subsection (c);
(4) the determination of whether an ACO is eligible for shared savings under subsection (d)(2) and the amount of such shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries assigned to the ACO and the average benchmark for the ACO under subsection (d)(1)(B);
(5) the percent of shared savings specified by the Secretary under subsection (d)(2) and any limit on the total amount of shared savings established by the Secretary under such subsection; and
(6) the termination of an ACO under subsection (d)(4) or of an ACO Beneficiary Incentive Program under subsections (b)(2)(I) and (m).
(h) Definitions
In this section:
(1) ACO professional
The term "ACO professional" means—
(A) a physician (as defined in
(B) a practitioner described in
(2) Hospital
The term "hospital" means a subsection (d) hospital (as defined in
(3) Medicare fee-for-service beneficiary
The term "Medicare fee-for-service beneficiary" means an individual who is enrolled in the original Medicare fee-for-service program under parts A and B and is not enrolled in an MA plan under part C, an eligible organization under
(i) Option to use other payment models
(1) In general
If the Secretary determines appropriate, the Secretary may use any of the payment models described in paragraph (2) or (3) for making payments under the program rather than the payment model described in subsection (d).
(2) Partial capitation model
(A) In general
Subject to subparagraph (B), a model described in this paragraph is a partial capitation model in which an ACO is at financial risk for some, but not all, of the items and services covered under parts A and B, such as at risk for some or all physicians' services or all items and services under part B. The Secretary may limit a partial capitation model to ACOs that are highly integrated systems of care and to ACOs capable of bearing risk, as determined to be appropriate by the Secretary.
(B) No additional program expenditures
Payments to an ACO for items and services under this subchapter for beneficiaries for a year under the partial capitation model shall be established in a manner that does not result in spending more for such ACO for such beneficiaries than would otherwise be expended for such ACO for such beneficiaries for such year if the model were not implemented, as estimated by the Secretary.
(3) Other payment models
(A) In general
Subject to subparagraph (B), a model described in this paragraph is any payment model that the Secretary determines will improve the quality and efficiency of items and services furnished under this subchapter.
(B) No additional program expenditures
Subparagraph (B) of paragraph (2) shall apply to a payment model under subparagraph (A) in a similar manner as such subparagraph (B) applies to the payment model under paragraph (2).
(j) Involvement in private payer and other third party arrangements
The Secretary may give preference to ACOs who are participating in similar arrangements with other payers.
(k) Treatment of physician group practice demonstration
During the period beginning on March 23, 2010, and ending on the date the program is established, the Secretary may enter into an agreement with an ACO under the demonstration under
(l) Providing ACOs the ability to expand the use of telehealth services
(1) In general
In the case of telehealth services for which payment would otherwise be made under this subchapter furnished on or after January 1, 2020, for purposes of this subsection only, the following shall apply with respect to such services furnished by a physician or practitioner participating in an applicable ACO (as defined in paragraph (2)) to a Medicare fee-for-service beneficiary assigned to the applicable ACO:
(A) Inclusion of home as originating site
Subject to paragraph (3), the home of a beneficiary shall be treated as an originating site described in
(B) No application of geographic limitation
The geographic limitation under
(2) Definitions
In this subsection:
(A) Applicable ACO
The term "applicable ACO" means an ACO participating in a model tested or expanded under
(i) that operates under a two-sided model—
(I) described in section 425.600(a) of title 42, Code of Federal Regulations; or
(II) tested or expanded under
(ii) for which Medicare fee-for-service beneficiaries are assigned to the ACO using a prospective assignment method, as determined appropriate by the Secretary.
(B) Home
The term "home" means, with respect to a Medicare fee-for-service beneficiary, the place of residence used as the home of the beneficiary.
(3) Telehealth services received in the home
In the case of telehealth services described in paragraph (1) where the home of a Medicare fee-for-service beneficiary is the originating site, the following shall apply:
(A) No facility fee
There shall be no facility fee paid to the originating site under
(B) Exclusion of certain services
No payment may be made for such services that are inappropriate to furnish in the home setting such as services that are typically furnished in inpatient settings such as a hospital.
(m) Authority to provide incentive payments to beneficiaries with respect to qualifying primary care services
(1) Program
(A) In general
In order to encourage Medicare fee-for-service beneficiaries to obtain medically necessary primary care services, an ACO participating under this section under a payment model described in clause (i) or (ii) of paragraph (2)(B) may apply to establish an ACO Beneficiary Incentive Program to provide incentive payments to such beneficiaries who are furnished qualifying services in accordance with this subsection. The Secretary shall permit such an ACO to establish such a program at the Secretary's discretion and subject to such requirements, including program integrity requirements, as the Secretary determines necessary.
(B) Implementation
The Secretary shall implement this subsection on a date determined appropriate by the Secretary. Such date shall be no earlier than January 1, 2019, and no later than January 1, 2020.
(2) Conduct of program
(A) Duration
Subject to subparagraph (H), an ACO Beneficiary Incentive Program established under this subsection shall be conducted for such period (of not less than 1 year) as the Secretary may approve.
(B) Scope
An ACO Beneficiary Incentive Program established under this subsection shall provide incentive payments to all of the following Medicare fee-for-service beneficiaries who are furnished qualifying services by the ACO:
(i) With respect to the Track 2 and Track 3 payment models described in section 425.600(a) of title 42, Code of Federal Regulations (or in any successor regulation), Medicare fee-for-service beneficiaries who are preliminarily prospectively or prospectively assigned (or otherwise assigned, as determined by the Secretary) to the ACO.
(ii) With respect to any future payment models involving two-sided risk, Medicare fee-for-service beneficiaries who are assigned to the ACO, as determined by the Secretary.
(C) Qualifying service
For purposes of this subsection, a qualifying service is a primary care service, as defined in section 425.20 of title 42, Code of Federal Regulations (or in any successor regulation), with respect to which coinsurance applies under part B, furnished through an ACO by—
(i) an ACO professional described in subsection (h)(1)(A) who has a primary care specialty designation included in the definition of primary care physician under section 425.20 of title 42, Code of Federal Regulations (or any successor regulation);
(ii) an ACO professional described in subsection (h)(1)(B); or
(iii) a Federally qualified health center or rural health clinic (as such terms are defined in
(D) Incentive payments
An incentive payment made by an ACO pursuant to an ACO Beneficiary Incentive Program established under this subsection shall be—
(i) in an amount up to $20, with such maximum amount updated annually by the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year;
(ii) in the same amount for each Medicare fee-for-service beneficiary described in clause (i) or (ii) of subparagraph (B) without regard to enrollment of such a beneficiary in a medicare supplemental policy (described in
(iii) made for each qualifying service furnished to such a beneficiary described in clause (i) or (ii) of subparagraph (B) during a period specified by the Secretary; and
(iv) made no later than 30 days after a qualifying service is furnished to such a beneficiary described in clause (i) or (ii) of subparagraph (B).
(E) No separate payments from the Secretary
The Secretary shall not make any separate payment to an ACO for the costs, including incentive payments, of carrying out an ACO Beneficiary Incentive Program established under this subsection. Nothing in this subparagraph shall be construed as prohibiting an ACO from using shared savings received under this section to carry out an ACO Beneficiary Incentive Program.
(F) No application to shared savings calculation
Incentive payments made by an ACO under this subsection shall be disregarded for purposes of calculating benchmarks, estimated average per capita Medicare expenditures, and shared savings under this section.
(G) Reporting requirements
An ACO conducting an ACO Beneficiary Incentive Program under this subsection shall, at such times and in such format as the Secretary may require, report to the Secretary such information and retain such documentation as the Secretary may require, including the amount and frequency of incentive payments made and the number of Medicare fee-for-service beneficiaries receiving such payments.
(H) Termination
The Secretary may terminate an ACO Beneficiary Incentive Program established under this subsection at any time for reasons determined appropriate by the Secretary.
(3) Exclusion of incentive payments
Any payment made under an ACO Beneficiary Incentive Program established under this subsection shall not be considered income or resources or otherwise taken into account for purposes of—
(A) determining eligibility for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds; or
(B) any Federal or State laws relating to taxation.
(Aug. 14, 1935, ch. 531, title XVIII, §1899, as added and amended
Editorial Notes
Amendments
2018—Subsec. (b)(2)(I).
Subsec. (c).
Subsec. (e).
Subsec. (g)(6).
Subsec. (l).
Subsec. (m).
2016—Subsec. (c).
2010—Subsecs. (i) to (k).
Statutory Notes and Related Subsidiaries
Study and Report
"(1)
"(A)
"(B)
"(2)
1 So in original. No par. (2) has been enacted.
§1395kkk. Repealed. Pub. L. 115–123, div. E, title XI, §52001(a), Feb. 9, 2018, 132 Stat. 298
Section, Aug. 14, 1935, ch. 531, title XVIII, §1899A, as added and amended
Statutory Notes and Related Subsidiaries
Change of Name
Construction
§1395kkk–1. Repealed. Pub. L. 115–123, div. E, title XI, §52001(b)(2), Feb. 9, 2018, 132 Stat. 298
Section,
§1395lll. Standardized post-acute care (PAC) assessment data for quality, payment, and discharge planning
(a) Requirement for standardized assessment data
(1) In general
The Secretary shall—
(A) require under the applicable reporting provisions post-acute care providers (as defined in paragraph (2)(A)) to report—
(i) standardized patient assessment data in accordance with subsection (b);
(ii) data on quality measures under subsection (c)(1); and
(iii) data on resource use and other measures under subsection (d)(1);
(B) require data described in subparagraph (A) to be standardized and interoperable so as to allow for the exchange of such data among such post-acute care providers and other providers and the use by such providers of such data that has been so exchanged, including by using common standards and definitions, in order to provide access to longitudinal information for such providers to facilitate coordinated care and improved Medicare beneficiary outcomes; and
(C) in accordance with subsections (b)(1) and (c)(2), modify PAC assessment instruments (as defined in paragraph (2)(B)) applicable to post-acute care providers to—
(i) provide for the submission of standardized patient assessment data under this subchapter with respect to such providers; and
(ii) enable comparison of such assessment data across all such providers to whom such data are applicable.
(2) Definitions
For purposes of this section:
(A) Post-acute care (PAC) provider
The terms "post-acute care provider" and "PAC provider" mean—
(i) a home health agency;
(ii) a skilled nursing facility;
(iii) an inpatient rehabilitation facility; and
(iv) a long-term care hospital (other than a hospital classified under
(B) PAC assessment instrument
The term "PAC assessment instrument" means—
(i) in the case of home health agencies, the instrument used for purposes of reporting and assessment with respect to the Outcome and Assessment Information Set (OASIS), as described in sections 484.55 and 484.250 of title 42, the Code of Federal Regulations, or any successor regulation, or any other instrument used with respect to home health agencies for such purposes;
(ii) in the case of skilled nursing facilities, the resident's assessment under
(iii) in the case of inpatient rehabilitation facilities, any Medicare beneficiary assessment instrument established by the Secretary for purposes of
(iv) in the case of long-term care hospitals, the Medicare beneficiary assessment instrument used with respect to such hospitals for the collection of data elements necessary to calculate quality measures as described in the August 18, 2011, Federal Register (76 Fed. Reg. 51754–51755), including for purposes of
(C) Applicable reporting provision
The term "applicable reporting provision" means—
(i) for home health agencies,
(ii) for skilled nursing facilities,
(iii) for inpatient rehabilitation facilities,
(iv) for long-term care hospitals,
(D) PAC payment system
The term "PAC payment system" means—
(i) with respect to a home health agency, the prospective payment system under
(ii) with respect to a skilled nursing facility, the prospective payment system under
(iii) with respect to an inpatient rehabilitation facility, the prospective payment system under
(iv) with respect to a long-term care hospital, the prospective payment system under
(E) Specified application date
The term "specified application date" means the following:
(i) Quality measures
In the case of quality measures under subsection (c)(1)—
(I) with respect to the domain described in subsection (c)(1)(A) (relating to functional status, cognitive function, and changes in function and cognitive function)—
(aa) for PAC providers described in clauses (ii) and (iii) of paragraph (2)(A), October 1, 2016;
(bb) for PAC providers described in clause (iv) of such paragraph, October 1, 2018; and
(cc) for PAC providers described in clause (i) of such paragraph, January 1, 2019;
(II) with respect to the domain described in subsection (c)(1)(B) (relating to skin integrity and changes in skin integrity)—
(aa) for PAC providers described in clauses (ii), (iii), and (iv) of paragraph (2)(A), October 1, 2016; and
(bb) for PAC providers described in clause (i) of such paragraph, January 1, 2017;
(III) with respect to the domain described in subsection (c)(1)(C) (relating to medication reconciliation)—
(aa) for PAC providers described in clause (i) of such paragraph, January 1, 2017; and
(bb) for PAC providers described in clauses (ii), (iii), and (iv) of such paragraph, October 1, 2018;
(IV) with respect to the domain described in subsection (c)(1)(D) (relating to incidence of major falls)—
(aa) for PAC providers described in clauses (ii), (iii), and (iv) of paragraph (2)(A), October 1, 2016; and
(bb) for PAC providers described in clause (i) of such paragraph, January 1, 2019; and
(V) with respect to the domain described in subsection (c)(1)(E) (relating to accurately communicating the existence of and providing for the transfer of health information and care preferences)—
(aa) for PAC providers described in clauses (ii), (iii), and (iv) of paragraph (2)(A), October 1, 2018; and
(bb) for PAC providers described in clause (i) of such paragraph, January 1, 2019.
(ii) Resource use and other measures
In the case of resource use and other measures under subsection (d)(1)—
(I) for PAC providers described in clauses (ii), (iii), and (iv) of paragraph (2)(A), October 1, 2016; and
(II) for PAC providers described in clause (i) of such paragraph, January 1, 2017.
(F) Medicare beneficiary
The term "Medicare beneficiary" means an individual entitled to benefits under part A or, as appropriate, enrolled for benefits under part B.
(b) Standardized patient assessment data
(1) Requirement for reporting assessment data
(A) In general
Beginning not later than October 1, 2018, for PAC providers described in clauses (ii), (iii), and (iv) of subsection (a)(2)(A) and January 1, 2019, for PAC providers described in clause (i) of such subsection, the Secretary shall require PAC providers to submit to the Secretary, under the applicable reporting provisions and through the use of PAC assessment instruments, the standardized patient assessment data described in subparagraph (B). The Secretary shall require such data be submitted with respect to admission and discharge of an individual (and may be submitted more frequently as the Secretary deems appropriate).
(B) Standardized patient assessment data described
For purposes of subparagraph (A), the standardized patient assessment data described in this subparagraph is data required for at least the quality measures described in subsection (c)(1) and that is with respect to the following categories:
(i) Functional status, such as mobility and self care at admission to a PAC provider and before discharge from a PAC provider.
(ii) Cognitive function, such as ability to express ideas and to understand, and mental status, such as depression and dementia.
(iii) Special services, treatments, and interventions, such as need for ventilator use, dialysis, chemotherapy, central line placement, and total parenteral nutrition.
(iv) Medical conditions and co-morbidities, such as diabetes, congestive heart failure, and pressure ulcers.
(v) Impairments, such as incontinence and an impaired ability to hear, see, or swallow.
(vi) Other categories deemed necessary and appropriate by the Secretary.
(2) Alignment of claims data with standardized patient assessment data
To the extent practicable, not later than October 1, 2018, for PAC providers described in clauses (ii), (iii), and (iv) of subsection (a)(2)(A), and January 1, 2019, for PAC providers described in clause (i) of such subsection, the Secretary shall match claims data with assessment data pursuant to this section for purposes of assessing prior service use and concurrent service use, such as antecedent hospital or PAC provider use, and may use such matched data for such other uses as the Secretary determines appropriate.
(3) Replacement of certain existing data
In the case of patient assessment data being used with respect to a PAC assessment instrument that duplicates or overlaps with standardized patient assessment data within a category described in paragraph (1), the Secretary shall, as soon as practicable, revise or replace such existing data with the standardized data.
(4) Clarification
Standardized patient assessment data submitted pursuant to this subsection shall not be used to require individuals to be provided post-acute care by a specific type of PAC provider in order for such care to be eligible for payment under this subchapter.
(c) Quality measures
(1) Requirement for reporting quality measures
Not later than the specified application date, as applicable to measures and PAC providers, the Secretary shall specify quality measures on which PAC providers are required under the applicable reporting provisions to submit standardized patient assessment data described in subsection (b)(1) and other necessary data specified by the Secretary. Such measures shall be with respect to at least the following domains:
(A) Functional status, cognitive function, and changes in function and cognitive function.
(B) Skin integrity and changes in skin integrity.
(C) Medication reconciliation.
(D) Incidence of major falls.
(E) Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual, when the individual transitions—
(i) from a hospital or critical access hospital to another applicable setting, including a PAC provider or the home of the individual; or
(ii) from a PAC provider to another applicable setting, including a different PAC provider, a hospital, a critical access hospital, or the home of the individual.
(2) Reporting through PAC assessment instruments
(A) In general
To the extent possible, the Secretary shall require such reporting by a PAC provider of quality measures under paragraph (1) through the use of a PAC assessment instrument and shall modify such PAC assessment instrument as necessary to enable the use of such instrument with respect to such quality measures.
(B) Limitation
The Secretary may not make significant modifications to a PAC assessment instrument more than once per calendar year or fiscal year, as applicable, unless the Secretary publishes in the Federal Register a justification for such significant modification.
(3) Adjustments
(A) In general
The Secretary shall consider applying adjustments to the quality measures under this subsection taking into consideration the studies under section 2(d) of the IMPACT Act of 2014.
(B) Risk adjustment
Such quality measures shall be risk adjusted, as determined appropriate by the Secretary.
(d) Resource use and other measures
(1) Requirement for resource use and other measures
Not later than the specified application date, as applicable to measures and PAC providers, the Secretary shall specify resource use and other measures on which PAC providers are required under the applicable reporting provisions to submit any necessary data specified by the Secretary, which may include standardized assessment data in addition to claims data. Such measures shall be with respect to at least the following domains:
(A) Resource use measures, including total estimated Medicare spending per beneficiary.
(B) Discharge to community.
(C) Measures to reflect all-condition risk-adjusted potentially preventable hospital readmission rates.
(2) Aligning methodology adjustments for resource use measures
(A) Period of time
With respect to the period of time used for calculating measures under paragraph (1)(A), the Secretary shall, to the extent the Secretary determines appropriate, align resource use with the methodology used for purposes of
(B) Geographic and other adjustments
The Secretary shall standardize measures with respect to the domain described in paragraph (1)(A) for geographic payment rate differences and payment differentials (and other adjustments, as applicable) consistent with the methodology published in the Federal Register on August 18, 2011 (76 Fed. Reg. 51624 through 51626), or any subsequent modifications made to the methodology.
(C) Medicare spending per beneficiary
The Secretary shall adjust, as appropriate, measures with respect to the domain described in paragraph (1)(A) for the factors applied under
(3) Adjustments
(A) In general
The Secretary shall consider applying adjustments to the resource use and other measures specified under this subsection with respect to the domain described in paragraph (1)(A), taking into consideration the studies under section 2(d) of the IMPACT Act of 2014.
(B) Risk adjustment
Such resource use and other measures shall be risk adjusted, as determined appropriate by the Secretary.
(e) Measurement implementation phases; selection of quality measures and resource use and other measures
(1) Measurement implementation phases
In the case of quality measures specified under subsection (c)(1) and resource use and other measures specified under subsection (d)(1), the provisions of this section shall be implemented in accordance with the following phases:
(A) Initial implementation phase
The initial implementation phase, with respect to such a measure, shall, in accordance with subsections (c) and (d), as applicable, consist of—
(i) measure specification, including informing the public of the measure's numerator, denominator, exclusions, and any other aspects the Secretary determines necessary;
(ii) data collection, including, in the case of quality measures, requiring PAC providers to report data elements needed to calculate such a measure; and
(iii) data analysis, including, in the case of resource use and other measures, the use of claims data to calculate such a measure.
(B) Second implementation phase
The second implementation phase, with respect to such a measure, shall consist of the provision of feedback reports to PAC providers, in accordance with subsection (f).
(C) Third implementation phase
The third implementation phase, with respect to such a measure, shall consist of public reporting of PAC providers' performance on such measure in accordance with subsection (g).
(2) Consensus-based entity
(A) In general
Subject to subparagraph (B), each measure specified by the Secretary under this section shall be endorsed by the entity with a contract under
(B) Exception
In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under
(3) Treatment of application of pre-rulemaking process (measure applications partnership process)
(A) In general
Subject to subparagraph (B), the provisions of
(B) Exceptions
(i) Expedited procedures
For purposes of satisfying subparagraph (A), the Secretary may use expedited procedures, such as ad-hoc reviews, as necessary, in the case of a quality measure specified under subsection (c) or a resource use or other measure specified in subsection (d) required with respect to data submissions under the applicable reporting provisions during the 1-year period before the specified application date applicable to such a measure and provider involved.
(ii) Option to waive provisions
The Secretary may waive the application of the provisions of
(f) Feedback reports to PAC providers
(1) In general
Beginning one year after the specified application date, as applicable to PAC providers and quality measures and resource use and other measures under this section, the Secretary shall provide confidential feedback reports to such PAC providers on the performance of such providers with respect to such measures required under the applicable provisions.
(2) Frequency
To the extent feasible, the Secretary shall provide feedback reports described in paragraph (1) not less frequently than on a quarterly basis. Notwithstanding the previous sentence, with respect to measures described in such paragraph that are reported on an annual basis, the Secretary may provide such feedback reports on an annual basis.
(g) Public reporting of PAC provider performance
(1) In general
Subject to the succeeding paragraphs of this subsection, the Secretary shall provide for public reporting of PAC provider performance on quality measures under subsection (c)(1) and the resource use and other measures under subsection (d)(1), including by establishing procedures for making available to the public information regarding the performance of individual PAC providers with respect to such measures.
(2) Opportunity to review
The procedures under paragraph (1) shall ensure, including through a process consistent with the process applied under
(3) Timing
Such procedures shall provide that the data and information described in paragraph (1), with respect to a measure and PAC provider, is made publicly available beginning not later than two years after the specified application date applicable to such a measure and provider.
(4) Coordination with existing programs
Such procedures shall provide that data and information described in paragraph (1) with respect to quality measures and resource use and other measures under subsections (c)(1) and (d)(1) shall be made publicly available consistent with the following provisions:
(A) In the case of home health agencies,
(B) In the case of skilled nursing facilities,
(C) In the case of inpatient rehabilitation facilities,
(D) In the case of long-term care hospitals,
(h) Removing, suspending, or adding measures
(1) In general
The Secretary may remove, suspend, or add a quality measure or resource use or other measure described in subsection (c)(1) or (d)(1), so long as, subject to paragraph (2), the Secretary publishes in the Federal Register (with a notice and comment period) a justification for such removal, suspension, or addition.
(2) Exception
In the case of such a quality measure or resource use or other measure for which there is a reason to believe that the continued collection of such measure raises potential safety concerns or would cause other unintended consequences, the Secretary may promptly suspend or remove such measure and satisfy paragraph (1) by publishing in the Federal Register a justification for such suspension or removal in the next rulemaking cycle following such suspension or removal.
(i) Use of standardized assessment data, quality measures, and resource use and other measures to inform discharge planning and incorporate patient preference
(1) In general
Not later than January 1, 2016, and periodically thereafter (but not less frequently than once every 5 years), the Secretary shall promulgate regulations to modify conditions of participation and subsequent interpretive guidance applicable to PAC providers, hospitals, and critical access hospitals. Such regulations and interpretive guidance shall require such providers to take into account quality, resource use, and other measures under the applicable reporting provisions (which, as available, shall include measures specified under subsections (c) and (d), and other relevant measures) in the discharge planning process. Specifically, such regulations and interpretive guidance shall address the settings to which a patient may be discharged in order to assist subsection (d) hospitals, critical access hospitals, hospitals described in
(A) treatment preferences of patients; and
(B) goals of care of patients.
(2) Discharge planning
All requirements applied pursuant to paragraph (1) shall be used to help inform and mandate the discharge planning process.
(3) Clarification
Such regulations shall not require an individual to be provided post-acute care by a specific type of PAC provider in order for such care to be eligible for payment under this subchapter.
(j) Stakeholder input
Before the initial rulemaking process to implement this section, the Secretary shall allow for stakeholder input, such as through town halls, open door forums, and mail-box submissions.
(k) Funding
For purposes of carrying out this section, the Secretary shall provide for the transfer to the Centers for Medicare & Medicaid Services Program Management Account, from the Federal Hospital Insurance Trust Fund under
(l) Limitation
There shall be no administrative or judicial review under
(m) Non-application of Paperwork Reduction Act
(Aug. 14, 1935, ch. 531, title XVIII, §1899B, as added
Editorial Notes
References in Text
Section 2(d) of the IMPACT Act of 2014, referred to in subsecs. (c)(3)(A) and (d)(3)(A), is section 2(d) of
Amendments
2016—Subsec. (a)(2)(A)(iv).
Statutory Notes and Related Subsidiaries
Permitting Occupational Therapists To Conduct the Initial Assessment Visit and Complete the Comprehensive Assessment With Respect to Certain Rehabilitation Services for Home Health Agencies Under the Medicare Program
"(1) does not initially include skilled nursing care;
"(2) includes occupational therapy; and
"(3) includes physical therapy or speech language pathology."
Improving Payment Accuracy Under the PAC Payment Systems and Other Medicare Payment Systems
"(1)
"(A)
"(i)
"(ii)
"(B)
"(i)
"(ii)
"(C)
"(D)
"(i) obtain access to the necessary data (if such data is not already being collected) on such factors, including recommendations on how to address barriers to the Centers in accessing such data; and
"(ii) account for such factors—
"(I) in quality measures, resource use measures, and other measures under title XVIII of the Social Security Act (including such measures specified under subsections (c) and (d) of section 1899B of such Act [
"(II) in determining payment adjustments based on such measures in other applicable provisions of such title.
"(E)
"(2)
"(A)
"(i) assess appropriate adjustments to quality measures, resource use measures, and other measures under title XVIII of the Social Security Act (
"(ii) assess and implement appropriate adjustments to payments under such title based on measures described in clause (i).
"(B)
"(C)
"(D)
"(3)