article: SECTION 1. REFERENCES TO SOCIAL SECURITY ACT. Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act. SEC. 2. DURABLE MEDICAL EQUIPMENT. (a) Definition of Medical Equipment and Supplies.-- (1) In general.--Section 1861 (42 U.S.C. 1395x) is amended by adding at the end the following new subsection: ``medical equipment and supplies ``(oo) The term `medical equipment and supplies'' means-- ``(1) durable medical equipment (as defined in section 1861(n)); ``(2) prosthetic devices (as described in section 1861(s)(8)); ``(3) orthotics and prosthetics (as described in section 1861(s)(9)); ``(4) home dialysis supplies and equipment (as described in section 1861(s)(2)(F)); ``(5) surgical dressings and other devices (as described in section 1861(s)(5)); ``(6) immunosuppressive drugs (as described in section 1861(s)(2)(J)); and ``(7) such other items as the Secretary may determine.''. (2) Effective date.--The amendment made by paragraph (1) shall apply to items furnished on or after January 1, 1994. (b) Development and Application of National Standards for Suppliers of Medical Equipment and Supplies.--Section 1834 (42 U.S.C. 1395m) is amended by adding at the end the following new subsection: ``(i) Requirements for Issuance and Renewal of Supplier Numbers for Suppliers of Medical Equipment and Supplies.-- ``(1) Payment.--No payment may be made under this part after July 1, 1994, for items furnished by a supplier of medical equipment and supplies (as defined in section 1861(oo)) unless such supplier meets the national standards specified by the Secretary and possesses a valid supplier number. ``(2) Revised standards.-- ``(A) In general.--The Secretary shall, by no later than January 1, 1996, in consultation with representatives of suppliers of medical equipment and supplies, carriers, and consumers, revise the national standards for suppliers of medical equipment and supplies to include the requirements listed in subparagraph (B). ``(B) Standards described.--The requirements listed in this subparagraph are that suppliers of medical equipment and supplies shall-- ``(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) Applicability of revised standards.-- Beginning after December 31, 1995, each supplier of medical equipment and supplies applying for a supplier number or renewing such supplier's supplier number shall meet the revised standards described in this paragraph.''. (c) Certificates of Medical Necessity.-- (1) In general.--Section 1834 (42 U.S.C. 1395m), as amended by subsection (b), is amended-- (A) in subsection (a), by striking paragraph (16), and (B) by adding at the end the following new subsection: ``(j) Certificates of Medical Necessity.-- ``(1) Standardized certificates.--Not later than July 1, 1994, the Secretary shall, in consultation with carriers under this part, develop one or more standardized certificates of medical necessity (as defined in paragraph (3)) for medical equipment and supplies (as defined in section 1861(oo) other than paragraphs (4), (6), and (7)). If a certificate of medical necessity is required by the Secretary, such standardized certificates shall-- ``(A) be completed by each physician who prescribes such medical equipment and supplies for any beneficiary under this part, and ``(B) be transmitted to the supplier and then to the carrier processing the claim for payment for such medical equipment and supplies under this part. ``(2) Prohibition against distribution by suppliers of certificates of medical necessity.-- ``(A) In general.--Except as provided in subparagraph (B), a supplier of medical equipment and supplies described in paragraph (1) may not distribute to physicians or to individuals entitled to benefits under this part for commercial purposes any completed or partially completed certificates of medical necessity. ``(B) Exception for certain billing information.-- Subparagraph (A) shall not apply with respect to a certificate of medical necessity to the extent that such certificate contains only information completed by the supplier of medical equipment and supplies identifying such supplier and the beneficiary to whom such medical equipment and supplies are furnished, a description of such medical equipment and supplies, any product code identifying such medical equipment and supplies, and any other administrative information identified by the Secretary. In the event a supplier provides a certificate of medical necessity containing information permitted under this subparagraph, such certificate shall also contain the supplier's charge and the fee schedule amount for the medical equipment or supplies being furnished prior to distribution of such certificate to the physician. ``(C) Penalty.--Any supplier of medical equipment and supplies who knowingly and willfully distributes a certificate of medical necessity in violation of subparagraph (A) 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 section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under section 1128A(a). ``(3) Definition.--For purposes of this subsection, the term `certificate of medical necessity' means a form or other document containing information required by the Secretary to be submitted to show that a covered item is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.''. (2) Effective date.--The amendments made by paragraph (1) shall apply with respect to certificates of medical necessity on or after January 1, 1994. (d) Coverage and Review Criteria for Certain Medical Equipment and Supplies.--Section 1834 (42 U.S.C. 1395m), as amended by subsection (c), is amended by adding at the end the following new subsection: ``(k) Coverage and Review Criteria.-- ``(1) Development and establishment.--Not later than July 1, 1994, the Secretary, in consultation with representatives of suppliers of medical equipment and supplies (as defined in section 1861(oo) other than paragraphs (4), (6), and (7)), individuals enrolled under this part, and appropriate medical specialty societies, shall develop and establish uniform national coverage and utilization review criteria for 200 items of medical equipment and supplies (as so defined) selected in accordance with the standards described in paragraph (2). The Secretary shall publish the criteria as part of the instructions provided to fiscal intermediaries and carriers under this part and no further publication, including publication in the Federal Register, shall be required. ``(2) Standards for selecting items subject to criteria.-- The Secretary may select an item for coverage under the criteria developed and established under paragraph (1) if the Secretary finds that-- ``(A) the item is frequently purchased or rented by beneficiaries; ``(B) the item is frequently subject to a determination that such item is not medically necessary; or ``(C) the coverage or utilization criteria applied to the item (as of the date of the enactment of this subsection) is not consistent among carriers. ``(3) Annual review and expansion of items subject to criteria.--The Secretary shall annually review the coverage and utilization of items of medical equipment and supplies to determine whether items not included among the items selected under paragraph (1) should be made subject to uniform national coverage and utilization review criteria, and, if appropriate, shall develop and apply such criteria to such additional items. ``(4) Report on effect of uniform criteria on utilization of items.--Not later than January 1, 1995, the Secretary shall submit a report to the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate analyzing the impact of the uniform criteria established under paragraph (1) on the utilization of items of medical equipment and supplies by individuals enrolled under this part.''. (e) Prohibition Against Multiple Supplier Numbers.-- (1) In general.--Section 1834 (42 U.S.C. 1395m), as amended by subsection (d), is amended by adding at the end the following new subsection: ``(l) Prohibition Against Multiple Supplier Numbers for Suppliers of Medical Equipment and Supplies.--The Secretary may not issue more than one supplier number to any supplier of medical equipment and supplies (as defined in section 1861(oo)) unless the issuance of more than one number is appropriate to identify subsidiary or regional entities under the supplier's ownership or control.''. (2) Effective date.--The amendment made by paragraph (1) shall apply to items furnished on or after July 1, 1994. (f) Definition of Inducements as Kickbacks Clarified.-- (1) In general.--Section 1128B(b)(3)(B) (42 U.S.C. 1320a- 7b(b)(3)(B)) is amended by inserting before the semicolon ``(except that in the case of a contract supply arrangement between a skilled nursing facility and a supplier of medical supplies and equipment (as defined in section 1861(oo) other than paragraphs (4), (6), and (7)), such employment shall not be considered bona fide to the extent that it includes tasks of a clerical and cataloging nature in transmitting to suppliers assignment rights of individuals eligible for benefits under part B of title XVIII, or performance of warehousing or stock inventory functions)''. (2) Effective date.--The amendment made by paragraph (1) shall apply with respect to services furnished on or after January 1, 1994. (g) Limitation on Beneficiary Liability.-- (1) In general.--Section 1879 (42 U.S.C. 1395pp) is amended by adding at the end the following new subsection: ``(h) If a supplier of medical equipment and supplies (as defined in section 1861(oo))-- ``(1) furnishes an item or service to a beneficiary for which no payment may be made by reason of section 1834(i); ``(2) furnishes an item or service to a beneficiary for which payment is denied in advance under section 1834(a)(15); ``(3) is excluded from participation under this title; or ``(4) furnishes an item or service to a beneficiary for which payment is denied under section 1862(a)(1); any expenses incurred for items and services furnished to an individual by such a supplier on an unassigned 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, unless the supplier informs the individual in advance that payment under this part will not be made for the item or services and the individual agrees to pay for the item or service.''. (2) Effective date.--The amendment made by paragraph (1) shall apply to items or services furnished on or after July 1, 1994. (h) Treatment of Nebulizers and Aspirators as Miscellaneous Items of Durable Medical Equipment.-- (1) In general.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A)) is amended by striking ``ventilators, aspirators, IPPB machines, and nebulizers'' and inserting ``ventilators and IPPB machines''. (2) Payment for supplies relating to nebulizers and aspirators.--Section 1834(a)(7)(A) (42 U.S.C. 1395m(a)(7)(A)) is amended by striking ``and'' at the end of clause (v), by striking the period at the end of clause (vi) and inserting ``; and'', and by inserting after clause (vi) the following new clause: ``(vii) In the case of supplies to be used in conjunction with a nebulizer or aspirator for which payment is made under this paragraph, payment shall be in accordance with paragraph (2) of this subsection.''. (3) Effective date.--The amendments made by this subsection shall apply to items furnished on or after January 1, 1994. (i) Payment for Ostomy Supplies, Tracheostomy Supplies, Urologicals, Surgical Dressings, and Other Medical Supplies.-- (1) In general.--Section 1834(h)(1) (42 U.S.C. 1395m(h)(1)) is amended by adding at the end the following new subparagraph: ``(E) Exception for certain items.--Payment for ostomy supplies, tracheostomy supplies, urologicals, surgical dressings, and other medical supplies shall be made in accordance with subparagraphs (B) and (C) of section 1834(a)(2) (except that in the case of surgical dressings, the national limited payment amount shall be computed based on local payment amounts using average reasonable charges for the six-month period ending June 30, 1993, increased by the covered item update for 1994).''. (2) Effective dates.-- (A) In general.--Except as provided in subparagraph (B), the amendment made by paragraph (1) shall apply with respect to items furnished on or after January 1, 1994. (B) Surgical dressings and other medical supplies.--The amendment made by paragraph (1) with respect to surgical dressings and other medical supplies shall apply to items supplied on or after July 1, 1994. (j) Freeze in Reasonable Charges for Parenteral and Enteral Nutrients, Supplies, and Equipment During 1994.--In determining the amount of payment under part B of title XVIII of the Social Security Act during 1994, the charges determined to be reasonable with respect to parenteral and enteral nutrients, supplies, and equipment may not exceed the charges determined to be reasonable with respect to such nutrients, supplies, and equipment during 1993. (k) Studies.-- (1) Supplies and services in nursing facilities.--The Comptroller General of the United States shall conduct a study and report to the Congress no later than January 1, 1995, on the types, volume, and utilization of services and supplies furnished under contract or under arrangement with suppliers to individuals eligible for benefits under title XVIII of the Social Security Act residing in skilled nursing facilities and nursing facilities. (2) Descriptions relating to certain codes.--The Comptroller General of the United States shall conduct a study beginning no earlier than July 1, 1994, and report to the Congress no later than January 1, 1995, on-- (A) whether changes made by the Department of Health and Human Services to the descriptions relating to the codes for medical equipment and supplies (as defined in section 1861(oo) of the Social Security Act other than paragraphs (4), (6), and (7))-- (i) accurately reflect the items being furnished under such codes, and (ii) are sufficiently explicit to distinguish between items of varying quality and price, and (B) recommendations for additional changes that would improve the descriptions relating to the codes for such items. S 516 IS----2
summary: Amends title XVIII (Medicare) of the Social Security Act (SSA) to revise procedures under Medicare part B (Supplementary Medical Insurance) with regard to durable medical equipment, including requirements for: (1) national standards and supplier numbers for suppliers of medical equipment and supplies; (2) standardized certificates of medical necessity and uniform national coverage and utilization review criteria for certain medical equipment and supplies; (3) limited Medicare beneficiary liability for items and services for which payment is prohibited by reason of a supplier's failure to meet such national standards or lack of a valid supplier number; (4) the treatment of nebulizers and aspirators as miscellaneous items of durable medical equipment; and (5) payment of ostomy supplies, tracheostomy supplies, urologicals, surgical dressings, and other medical supplies. Amends SSA title XI to modify anti-kickback provisions. Provides for a freeze under Medicare part B in reasonable charges for parenteral and enteral nutrients, supplies, and equipment during 1994. Requires the Comptroller General to study and report to the Congress on: (1) services and supplies furnished to Medicare-eligible nursing facility residents; and (2) changes made to descriptions relating to codes for medical equipment and supplies.