Medicare Fee-for-Service Modifications and Medicaid Provisions of H.R. 1 as Enacted

CRS Report for Congress
Medicare Fee-for-Service Modifications and
Medicaid Provisions of H.R. 1 as Enacted
Updated January 16, 2004
Sibyl Tilson, Jennifer Boulanger, Jean Hearne,
Steve Redhead, Evelyne Baumrucker, Julie Stone,
Bernadette Fernandez, and Karen Tritz
Specialists and Analysts in Social Legislation
Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Medicare Fee-for-Service Modifications and
Medicaid Provisions of H.R. 1 as Enacted
Summary
On November 22, the House of Representatives voted 220 to 215 to approve
the conference report on H.R. 1, the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003. The Senate, on November 24, voted 54 to 44 to approve
the conference report. Earlier, the conferees of the Medicare prescription drug and
modernization legislation announced an agreement on November 16 and the
legislative text was released November 20. The legislative language can be
downloaded from the House Committee on Ways and Means website at:
[http://waysandmeans.house.gov]. The bill was signed into law by the President on
December 8, 2003.
As well as establishing a prescription drug benefit for Medicare beneficiaries,
the legislation contains provisions that involving significant payment increases,
payment reductions, an expansion of covered benefits, new demonstration projects
and new beneficiary cost-sharing provisions for the traditional Medicare fee-for-
service (FFS) program. The bill includes a measure that would require congressional
consideration of legislation if general revenue funding for the entire Medicare
program exceeds 45%. Provisions affecting the State Childrens’ Health Insurance
Program (SCHIP) and Medicaid programs are included in the legislation as well.
Earlier this year, under Congress’ FY2004 budget resolution, $400 billion was
reserved for Medicare modernization, creation of a prescription drug benefit, and, in
the Senate, to promote geographic equity payment. The Congressional Budget Office
(CBO) has estimated that the legislation for H.R. 1 would increase direct (or
mandatory) spending by $394.3 billion from FY2004 through FY2013. Prescription
drug spending is estimated at $409.8 billion over the 10-year period and Medicare
Advantage spending at $14.2 billion. Overall, the fee-for-service provisions which
change traditional Medicare are estimated to save $21.5 billion over the 10-year
period and adjusting the Part B premium to beneficiaries’ income is estimated to save
$13.3 billion over the period. Some fee-for-service provisions will increase spending
over this 10-year period including the provisions affecting hospitals and physician.
Other fee-for-service provisions are projected to save money over the period
including those affecting durable medical equipment, clinical laboratories and home
health agencies. The CBO estimate is available on the CBO website at
[ ftp://ftp.cbo.gov/48x x / doc4808/ 11-20-MedicareLetter.pdf] .

Contents
Changes to Medicare’s Fee for Service Program..........................1
Selected Rural Provider Provisions............................2
Selected Acute Hospital Provisions............................3
Selected Physician Provisions................................4
Selected Provisions Affecting Other Providers and Practitioners.....5
Selected Fee-for Service Demonstration Projects.................6
Expansion of Covered Benefits...............................6
Beneficiary Payments...............................................7
Income-Relating the Part B Premium..........................7
Indexing the Part B Deductible...............................7
Medicaid and Miscellaneous Provisions................................8
Modifications to Fee-for-Service Medicare..............................9
Provisions Relating to Part A.....................................9
Hospital Services..........................................9
Allied Health and Graduate Medical Education Payments.........22
Skilled Nursing Facility (SNF) and Hospice Services.............25
Other Part A Provisions...................................29
Provisions Relating to Part B....................................34
Physician and Practitioner Services...........................34
Hospital Outpatient Department (HOPD), Ambulatory Surgery
Center (ASC), and Clinic Services.......................42
Covered Part B Outpatient Drugs (Not Provided by a HOPD)......48
Covered Drugs and Services at a Dialysis Facility...............57
Durable Medical Equipment (DME) and Related Outpatient Drugs..58
Ambulance Services.......................................62
Other Part B Services and Provisions.........................65
Provisions Relating to Parts A and B..............................69
Home Health Services.....................................69
Chronic Care Improvement.................................73
Medicare Secondary Payor (MSP)............................75
Other Medicare A and B Provisions..........................76
Medicare Demonstration Projects and Studies..................82
Beneficiary Issues: Cost-Sharing Amounts and Provision of Information.90
Other Health-Related Studies, Commissions or Committees...........94
Medicaid and State Children’s Health Insurance Program (SCHIP)
Provisions ...............................................99
Cost Containment and Miscellaneous Financial Provisions...........106

Medicare Fee-for-Service Modifications
and Medicaid Provisions of
H.R. 1 as Enacted
On November 22, 2003, the House of Representatives voted 220 to 215 to
approve the conference report on H.R. 1, the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. The Senate, on November 24th,
voted 54 to 44 to approve the conference report. The bill was signed by the President
in a ceremony on December 8th. The legislation adds a prescription drug benefit to
Medicare and replaces the existing Medicare+Choice program with a new
MedicareAdvantage program that establishes managed care payments based on a
system of bids and benchmarks. The bill also contains numerous provisions that
would generally increase fee-for-service payments within Medicare’s Part A and Part
B program (also known as traditional Medicare), especially for rural health care
providers; numerous regulatory and administrative practices will also be modified.
This report discusses the fee-for-service (FFS) provisions of the legislation, those
affecting Medicaid as well as the Medicare cost containment provisions¹. It
compares the provisions in the bill as enacted with those in the Medicare reform bills
that were originally passed by the Senate and the House.
The Medicare FFS provisions in the bill are found primarily in Titles GGIII
through VIII; some FFS provisions are included in Titles VIII through X as noted.
The cost containment provisions are in Title VIII and the Medicaid and other
provisions are in Title X. An overview of the entire legislation can be found in CRS
Report RL31966.
Changes to Medicare’s Fee for Service Program
The legislation contains extensive changes to Medicare’s FFS program,
including payment increases and, in certain instances, decreases; development of
competitive acquisition programs; implementation or refinement of other prospective
payment systems (notably, the development of an end-stage renal disease (ESRD)
basic payment system); expansion of covered preventive benefits; establishment of
demonstration programs; and required studies. The anticipated financial impact of
these changes on any individual provider, physician, or supplier will vary depending
on many factors, such as the unique characteristics of the individual or entity
participating in Medicare as well as the number and type of services provided to the

¹ Cost containment provisions require an analysis of general tax revenue financing of the
Medicare program as well as a Presidential and Congressional response when “excess
general revenue financing of Medicare” exceeds a threshold of 45%.

Medicare beneficiaries they serve. Selected highlights of the FFS payment
provisions and those establishing preventive care benefits and demonstration
programs will be briefly described.
Selected Rural Provider Provisions.
Generally, Medicare payments to certain rural providers are expected to
increase; many of the rural provisions will benefit urban providers as well. CBO
estimates that the rural provisions in Title IV of the bill will increase Medicare’s
direct spending by $9.3 billion from 2004 through 2008 and by $19.9 billion from

2004 though 2013. It should be noted that other provider payment provisions in H.R.

1 can impact rural providers, but their effect on Medicare payments to rural providers
has not been specifically identified.
^!Hospitals in rural areas and those in small urban areas will receive
a permanent 1.6% increase to Medicare’s base rate or per discharge
payment; the payment limit for rural and small urban hospitals that
qualify for disproportionate share hospital (DSH) adjustment will
increase from 5.25% to 12%; hospitals in low-wage areas (those
with wage index values below 1) will receive additional payments
through a decrease from 71% to 62% in the labor-related portion of
the base payment rate; and small rural hospitals with less than 50
beds will receive cost reimbursement for outpatient clinical
laboratory tests. In addition, rural hospitals with less than 100 beds
will be protected from payment declines associated with the hospital
outpatient prospective payment system (OPPS) for an additional 2
years; these OPPS hold harmless provisions will be extended to sole
community hospitals for services from 2004 through 2006. CBO
estimates that these provisions will increase direct Medicare
spending by $15.6 billion over the 10-year period.
^!Critical access hospitals (CAHs) will have their bed limit increased
from 15 to 25; there will be no restriction on the number of these
beds that can be used for acute care services at any one time. CAHs
will be able to establish distinct part rehabilitation and psychiatric
units of up to 10 beds that will not be included in the CAH bed
count. Cost reimbursement of CAH services will increase to 101%
of reasonable costs, starting January 1, 2004. Periodic interim
payments for CAHs will be authorized. State authority to waive the
35-mile requirement for new entities to qualify as a CAH will be
eliminated as of January 1, 2006. CBO estimates that these
provisions will increase direct Medicare spending by $900 million
over the 10-year period.
^!Physicians in newly established scarcity areas will receive a 5%
increase in Medicare payments. Physicians in certain low-cost areas
with geographic adjustment factors below 1 will receive payment
increases so as to increase this factor to 1, starting in 2004 through
2006. CBO estimates that these provisions will increase direct
Medicare spending by $1.7 billion over the 10-year period.
^!Practitioners in rural health clinics and federally qualified health
centers will be able to bill separately for services provided to

beneficiaries in skilled nursing facilities. CBO estimates that these
provisions will increase direct Medicare spending by $100 million
over the 10-year period.
^!Home health providers in rural areas will receive a 5% increase in
Medicare payments for one year beginning April 1, 2004. CBO
estimates that this one-year increase will increase direct Medicare
spending by $100 million over the 10-year period.
Selected Acute Hospital Provisions.
Generally, Medicare payments to hospitals will increase under the conference
report. Specifically,
^!Acute hospitals paid under the inpatient prospective payment system
(IPPS) will receive the full increase in the market basket (MB) index
as an update in 2004. From 2005 through 2007, hospitals that
submit data on specified quality indicators will receive the MB as an
update; those hospitals that do not submit such data will receive the
MB minus 0.4 percentage points for the year in question. CBO
expects that this provision will reduce direct spending 0.2 billion
from 2004 through 2008.
^!Teaching hospitals will receive an increase in their indirect medical
education adjustment from 2004 through 2006 that CBO projects
will increase spending by $400 million.
^!A one-time, geographic reclassification process to increase
hospitals’ wage index values for 3 years that is expected to increase
payments by $900 million from 2004 through 2008 is established.
^!Low volume hospitals with fewer than 800 discharges that are 25
road miles away from similar hospitals may qualify for up to a 25%
increase in Medicare payments for an expected cost of $100 million
from 2004-2013.
^!Changes in payment methods for covered prescription drugs
provided in outpatient hospital departments is expected to increase
payments by $700 million from FY2004 through FY2008.
^!A redistribution of unused resident positions will increase both
direct and indirect graduate medical education spending by an
anticipated $200 million from FY2004 thought FY2008 and by $600
million from FY2004 through FY2013.
^!Certain teaching hospitals with high per resident payments will not
receive a payment increase from FY2004 through FY2013; this
provision was scored by CBO as a reduction in Medicare spending
of $500 million from FY2004 through FY2008 and $1.3 billion from
FY2004 through FY2013.
^!For 18 months from the date of enactment, physicians will not be
able to refer Medicare patients to specialty hospitals in which they
have an investment interest. This provision will not apply to
hospitals that are in operation or under development before
November 18, 2003. Both MedPAC and HHS are to complete
required studies on specialty hospitals within 15 months of
enactment.

Selected Physician Provisions.
The impact of the legislation on Medicare’s spending for physician spending is
difficult to determine. Although physicians will receive a 1.5% update in 2004 and
2005 which is expected to increase spending by $2.8 billion from FY2004 through
FY2007; subsequently, from FY2008 through FY2012, the provision is expected to
result in a decline of $2.8 billion in Medicare spending. Over the 10 year period
from 2004 through 2013, CBO expects the update provisions to increase Medicare
spending by $200 million.
Medicare’s payments for some practice expenses, particularly the administration
of covered drugs, will increase starting in 2004. A transitional adjustment to the drug
administration payments of 32% in 2004 and 3% in 2005 is also established. These
payment increases are expected to be counterbalanced by a decrease in Medicare’s
payments for covered outpatient drugs provided in a doctor’s office.
Medicare’s payment for covered outpatient drugs furnished incident to a
physician’s service will change during 2004 as follows:
^!Many covered outpatient drugs furnished in 2004 will be reimbursed
at 85% of the average wholesale price (AWP). Certain of these
drugs may be paid as low as 80% of the AWP (in effect as of April

1, 2003).

^!Blood clotting factors and other blood products, drugs or biologicals
(drug products) that were not available for payment by April 1,
2003, covered vaccinations, drug products furnished in during 2004
in connection with renal dialysis services, drugs provided through
covered durable medical equipment will be paid at a higher rate
during 2004.
The decline in payments for covered outpatient drugs in 2004 can only be
implemented concurrently with the increased payments for the administration of the
drugs.
Starting in 2005, Medicare’s payment for many covered outpatient drugs will
be based on average sales price methodology, that uses different pricing and cost
data, depending on the prescription drug. Generally, multiple source drugs will be
paid 106% of the average sales price; single source drugs will be paid 106% of the
lower of the average sales price or the wholesale acquisition costs, unless the widely
available market price or the average manufacturer price for those drugs exceeds a
certain threshold. Starting in 2006, physicians will have the option of obtaining
covered Part B drugs from selected entities awarded contracts for competitively
biddable drug products under a newly established competitive acquisition program.

Selected Provisions Affecting Other Providers and Practitioners.
The follow provisions affecting other providers and practitioners are included
in the legislation:
Ambulatory Surgical Centers. Payments to ambulatory surgical centers
(ASCs) are expected to be lower by $800 million from FY2004 through FY2008 and
by $3.1 billion from FY2004 through FY2013 as a result of the legislation. ASCs
will receive an update of the consumer price index for all urban consumers (CPI-U)
minus 3.0 percentage points starting April 1, 2004 and will receive a O percent
update for services provided starting October 1, 2004 through December 31, 2009.
Therapy Caps. Application of the caps on outpatient therapy services
provided by non-hospital providers is suspended from the date of enactment and for
the remainder of 2003, in 2004 and 2005. CBO estimates that the therapy cap
moratorium will increase direct Medicare spending by $700 million over the 10-year
period.
Durable Medical Equipment (DME). Competitive bidding for DME will
be phased-in beginning in 2007 in 10 of the largest metropolitan statistical areas and
may be phased in first for the highest cost and highest volume items and services.
The update for most DME items and services and for prosthetics and orthotics is 0
in 2004, 2005, 2006, 2007, and 2008. For 2005, payment for certain items, oxygen
and oxygen equipment, standard wheelchairs, nebulizers, diabetic lancets and testing
strips, hospital beds and air mattresses will be reduced by an amount calculated using
2002 payment amounts and the median price paid by the Federal Employees Health
Benefit Program.² Beginning January 1, 2009, items and services included in the
competitive acquisition program will be paid as determined under that program and
the Secretary can use this information to adjust the payment amounts for DME, off-
the-shelf orthotics, and other items and services that are supplied in an area that is not
a competitive acquisition area. Class III items (devices that sustain or support life,
are implanted, or present potential unreasonable risk, e.g., implantable infusion
pumps and heart valve replacements, and are subject to premarket approval, the most
stringent regulatory control) receive the full increase in the consumer price index for
all urban consumers (CPI-U) in 2004, 2005, 2006 , 2008 and subsequent years. The
Secretary will determine the update in 2007. CBO scored the DME provisions of
the bill as reducing spending by $6.8 billion over the 10-year period.
Home Health. Home health agency payments are increased by the full market
basket percentage for the last quarter of 2003 (October, November, and December)
and for the first quarter of 2004 (January, February, and March). The update for the
remainder of 2004 and for 2005 and 2006 is the home health market basket
percentage increase minus 0.8 percentage points. CBO estimates that this provision

² Section 302 specifies that the reduction uses the “Median FEHP Price” in the table entitled
“Summary of Medicare Prices Compared to VA, Medicaid, Retail, and FEHB Prices for 16
Items” that was included in testimony of the Health and Human Services Inspector General
before the Senate Committee on Appropriations, June 12, 2002, or any subsequent report
by the Inspector General.

will reduce direct Medicare spending by $6.5 billion over the 10-year period. The
legislation suspends the requirement that home health agencies must collect the
Outcome and Assessment Information Set (OASIS) data on private pay (non-
Medicare, non-Medicaid) until the Secretary reports to Congress and publishes final
regulations regarding the collection and use of OASIS.
Selected Fee-for Service Demonstration Projects.
The legislation establishes numerous demonstration projects for the Medicare
program. Several demonstrations address aspects of disease management for
beneficiaries with chronic conditions.
Chronic Care Improvement under Fee-For-Service. The legislation
requires the Secretary to establish and implement chronic care improvement
programs under fee-for-service Medicare to improve clinical quality and beneficiary
satisfaction and achieve spending targets specified by the Secretary for Medicare for
beneficiaries with certain chronic health conditions. Participation by beneficiaries
is voluntary. The contractors are required to assume financial risk for performance
under the contract. CBO has estimated that this demonstration will increase direct
Medicare spending by $500 million over the 10-year period.
Chronically Ill Beneficiary Research, Demonstration. The legislation
requires the Secretary to develop a plan to improve quality of care and to reduce the
cost of care for chronically ill Medicare beneficiaries within 6 months after
enactment. The plan is required to use existing data and identify data gaps, develop
research initiatives, and propose intervention demonstration programs to provide
better health care for chronically ill Medicare beneficiaries. The Secretary is required
to implement the plan no later than 2 years after enactment.
Coverage of Certain Drugs and Biologicals Demonstration. The
Secretary is required to conduct a 2-year demonstration where payment is made for
certain drugs and biologicals that are currently provided as “incident to” a physician’s
services under Part B. The demonstration is required to provide for cost-sharing in
the same manner as applies under Part D of Medicare. The demonstration is required
to begin within 90 days of enactment and is limited to 50,000 Medicare beneficiaries
in sites selected by the Secretary.
Homebound Demonstration. The Secretary is required to conduct a 2-year
demonstration project where beneficiaries with chronic conditions would be deemed
to be homebound in order to receive home health services under Medicare.
Adult Day Care. The Secretary is required to establish a demonstration where
beneficiaries could receive adult day care services as a substitute for a portion of
home health services otherwise provided in a beneficiary’s home.
Expansion of Covered Benefits.
The legislation contains a number of provisions that expand coverage beginning
January 1, 2005, including the following:

Initial Physical Examination. Medicare coverage of an initial preventive
physical examination is authorized for those individuals whose Medicare coverage
begins on or after January 1, 2005. CBO estimates that this provision will increase
direct Medicare spending by $1.7 billion over the 10-year period.
Cardiovascular Screening Blood Tests. Medicare coverage of
cardiovascular screening blood tests is authorized. CBO estimates that this provision
will increase direct Medicare spending by $300 million over the 10-year period.
Diabetes Screening Tests. Diabetes screening tests furnished to an
individual at risk for diabetes for the purpose of early detection of diabetes are
included as a covered medical service. In this instance, diabetes screening tests
include fasting plasma glucose tests as well as other tests and modifications to those
tests deemed appropriate by the Secretary. CBO estimates that this provision will
increase direct Medicare spending less than $50 million over the 10-year period.
Screening and Diagnostic Mammography. Screening mammography
and diagnostic mammography will be excluded from OPPS and paid separately.
CBO estimates that this provision will increase direct Medicare spending by $200
million over the 10-year period.
Intravenous Immune Globulin. The bill includes intravenous immune
globulin for the treatment in the home of primary immune deficiency diseases as a
covered medical service under Medicare. CBO estimates that this provision will
increase direct Medicare spending by $100 million over the 10-year period.
Beneficiary Payments
The bill contains two provisions which change the beneficiary premiums and
deductibles.
Income-Relating the Part B Premium.
The legislation increases the monthly Part B premiums for higher income
enrollees beginning in 2007. Beneficiaries whose modified adjusted gross income
exceed $80,000 and couples filing joint returns whose modified adjusted gross
income exceeds $160,000 will be subject to higher premium amounts. The increase
will be calculated on a sliding scale basis and will be phased-in over a five-year
period. The highest category on the sliding scale is for beneficiaries whose modified
adjusted gross income is more than $200,000 ($400,000 for a couple filing jointly).
Those amounts are increased beginning in 2007 by the percentage change in the
consumer price index. CBO estimates that direct Medicare spending will be reduced
by $13.3 billion over the 10-year period 2004 through 2013.
Indexing the Part B Deductible.
The Medicare Part B deductible will remain $100 through 2004, increase to
$110 for 2005, and in subsequent years the deductible will be increased by the same

percentage as the Part B premium increase. Specifically, the annual percentage
increase in the monthly actuarial value of benefits payable from the Federal
Supplementary Medical Insurance Trust Fund will be used as the index.
Medicaid and Miscellaneous Provisions
Title X of the legislation makes some changes to Medicaid and other programs.
Omitted from the agreement were two provisions contained in S. 1, including a
provision to amend the Age Discrimination in Employment Act of 1967 to allow an
employee benefit plan to offer different benefits to their Medicare eligible employees
than to their non-Medicare eligible employees, and a provision to allow states to
cover certain lawfully residing aliens under the Medicaid program.
CBO estimates the Medicaid and other provisions included in the bill to increase
direct spending by $5.7 billion between FY2004 and FY2013. The following general
points can be made about the Medicaid and Miscellaneous provisions included in
Title X of the bill:
^!The legislation temporarily increases states’ disproportionate share
hospital (DSH) allotments to erase the decline in these Medicaid
amounts that occurred after a special rule for their calculation
expired.
^!The legislation includes several other Medicaid provisions, including
raising the floor on DSH allotments for “extremely low DSH states,”
providing DSH allotment adjustments impacting Hawaii and/or
Tennessee, increasing reporting requirements for DSH hospitals, and
exempting prices of drugs provided to certain safety net hospitals
from Medicaid’s best price drug program.
^!Miscellaneous provisions in Title X of the legislation include
funding federal reimbursement of emergency health services
furnished to undocumented aliens, and funding administrative start-
up costs for Medicare reform, various research projects, work groups
and infrastructure improvement programs for the health care system.
This report contains a detailed side-by-side comparison of the relevant
provisions of the legislation, S. 1, as passed the Senate, and H.R. 1, as passed the
House. Certain of the provisions can be found in one or more of the sections. For
example, the home health homebound demonstration (section 702) is listed in the
home health section and the demonstration projects section. Also included in this
side-by-side, are provision that were included in the House and/or Senate bill which
were dropped in conference.

CRS-9
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^h^ttp^d^on^t^h^{e bas}ⁱ^s^of^t^h^{e l}^a^rg^{e u}^r^ban^area^ouⁿ^t^{. T}^h^{e Secretar}^y^is^au^th^{orized to}^larg^{e u}^r^ban^areasⁱⁿ^P^u^{erto R}ⁱ^{co s}^t^artin^g^f^o^{r di}^s^c^h^a^rgesⁱⁿ^F^Y^{2004. H}^o^s^pⁱ^t^a^l^sⁱⁿ
^lay^im^p^l^em^en^tatioⁿ^o^f^th^{is p}^a^y^m^en^t^P^u^{erto R}ⁱ^{co w}^ill^r^e^ceiv^e^th^{e leg}ⁱ^s^l^ated
^{e u}ⁿ^{til Nov}^e^m^b^{er 1, 2003, if}^pay^m^en^tⁱⁿ^creas^e^s^t^artin^g^f^o^{r dis}^c^h^a^rg^es^on
^s^a^ry^.^A^p^ri^l^{1, 2004.}
^Un^{der Medicare’}^s^IP^P^S^{, tw}^o
^f^e^ren^t^s^t^an^{dardized am}^ouⁿ^t^s^{are u}^s^{ed f}^o^r
^sp^{itals i}ⁿ^P^u^er^to^Rico^{, o}ⁿ^{e f}^o^r^h^o^sp^itals
^{e u}^r^ban^areas^an^{d on}^{e f}^o^{r oth}^e^r
^sp^itals.
^creas^e^paym^ents^{to hos}^p^italsⁱⁿ^areas^S^ecti^oⁿ^403.^F^o^{r di}^s^c^ha^r^g^e^s^on^{or af}^t^e^r^S^e^c^tⁱ^oⁿ^402.^F^o^{r cos}^t^reportⁱⁿ^g^peri^ods^S^ecti^oⁿ^416.^Sam^e^p^r^o^v^isioⁿ^ex^cep^{t th}^at
^th^w^{age i}ⁿ^d^e^x^val^u^e^s^b^e^l^o^w^on^{e (b}^y^O^c^t^{ober 1, 2004, t}^h^{e S}^ecret^aryⁱ^s^requⁱ^r^ed^begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1, 2004, t}^h^{e S}^ecret^ary^t^h^{e ef}^f^ectⁱ^v^{e dat}^eⁱ^s^O^c^t^{ober 1, 2003.}

^{ering M}^e^dicare’s^I^{PPS labor-related}^to^decreas^{e th}^{e labor-}^r^{elated s}^h^{are to}^62%^w^o^u^l^{d be requ}^{ired to decreas}^{e the}^l^a^bor-
^r^{e w}^hⁱ^c^hⁱ^s^th^{e p}^r^op^orti^on^{of the}^of^th^{e s}^t^an^{dardized am}^o^unt^w^h^en^s^u^ch^related^s^h^{are to 62% of}^th^{e s}^t^an^dardized
^nda^{rdized a}^m^o^unt^m^u^lt^{iplied by}^t^h^e^ch^an^g^e^w^ill^r^e^su^{lt in}^hⁱ^g^h^e^r^to^tal^p^a^y^m^en^ts^am^o^uⁿ^t^oⁿ^ly^if^su^ch^ch^an^g^e^w^o^u^l^d^r^e^su^{lt in}
ⁿ^d^e^x⁾^.^IP^P^S^pay^m^en^ts^are^adj^u^s^t^ed,^to^th^{e h}^o^sp^{ital. T}^h^is^p^r^o^v^isioⁿ^{is to}^b^e^hⁱ^g^h^e^r^to^{tal p}^a^y^m^en^ts^to^th^{e h}^o^sp^{ital. T}^h^is

CRS-10
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^{er in}^creas^{ed or decreas}^{ed as}^ap^p^lied^w^ith^o^u^{t r}^e^g^a^r^d^t^o^cer^tain^b^u^d^g^et-^provⁱ^sⁱ^oⁿ^w^o^u^l^{d be appl}ⁱ^e^d^wⁱ^t^h^ou^t^reg^a^rd
^p^r^o^p^r^{iate, b}^y^th^{e h}^o^sp^{ital w}^a^g^eⁱⁿ^d^e^x^o^fⁿ^e^u^t^r^a^lity^r^e^q^u^ir^em^en^ts.^Fo^r^dⁱ^sch^a^r^g^{es o}ⁿ^to^cer^tain^b^u^d^g^{et n}^e^u^t^r^a^lity^r^e^q^u^ir^e^m^en^ts.
^h^{ere th}^{e h}^o^s^p^it^a^lⁱ^s^{located or}^{or af}^t^e^{r O}^c^t^ober¹^,²^{004, t}^h^{e S}^ecret^aryⁱ^s
^{ere it h}^a^s^been^reas^sⁱ^gⁿ^e^{d. P}^r^es^en^tly^,^als^o^requ^ired^{to decreas}^{e th}^{e labor-}^r^elated
ⁱ^m^at^el^y^71%^of^t^h^{e s}^t^an^dardi^zed^s^h^{are to 62% of}^th^{e s}^t^an^dardized^am^ouⁿ^t
^ouⁿ^t^is^adj^u^s^t^{ed by}^th^{e area w}^a^g^eⁱⁿ^dex^.^f^o^r^h^o^sp^{itals in}^P^u^er^to^Rⁱ^co^w^h^en^su^ch
^ch^an^g^e^r^e^su^{lts i}ⁿ^hⁱ^g^h^e^r^to^{tal p}^a^y^m^en^{ts to}
^th^{e h}^o^sp^ital.
^creas^e^M^e^dica^r^e^I^{PPS paym}^ents^for^S^ecti^oⁿ^406.^T^h^{e Secretary}^is^r^e^qu^{ired to}^Secti^oⁿ^403.^T^h^{e Secretary}^w^o^u^l^{d be}^N^o^provⁱ^sⁱ^oⁿ^.
^-^vol^u^m^{e h}^o^s^pⁱ^t^al^s^{. Medicare pay}^s^prov^ide^f^o^{r a g}^r^adu^a^{ted adj}^u^s^t^m^eⁿ^t^of^u^p^to^requⁱ^r^{ed t}^o^dev^e^l^{op a g}^r^adu^a^t^e^{d adj}^u^s^t^m^eⁿ^t
^t^acu^te^h^o^s^p^{ital s}^e^rv^ices^f^o^{r each}^25%^of^Medi^care’^sⁱⁿ^patⁱ^eⁿ^t^pay^m^en^t^rat^e^s^of^u^p^t^o²⁵^%^of^Medi^care’^sⁱⁿ^patⁱ^eⁿ^t
^a^r^g^{e f}^r^o^m^th^{e h}^o^sp^ital^w^ith^o^u^{t r}^e^g^a^r^d^{to accou}ⁿ^t^f^o^r^t^h^{e em}^pirically^es^tablis^h^e^d^pay^m^en^{t rates}^{to accou}ⁿ^t^f^o^{r th}^{e h}ⁱ^g^h^e^r
^{e n}^u^m^{ber o}^f^b^eⁿ^e^fⁱ^ciaries^dis^c^h^a^rg^ed^hⁱ^g^h^e^{r u}ⁿ^{it cos}^t^s^as^s^o^{ciated w}ⁱ^t^h^low^-^uⁿ^{it co}^{sts in}^lo^w^-^v^o^lu^m^e^h^o^sp^itals.^Cer^t^ain
ⁱ^{ki/CRS-RL32005}^m^aⁿ^y^gⁱ^v^eⁿ^h^o^sp^{ital. Un}^d^e^r^cer^tain^m^s^t^an^ces^{, h}^o^w^e^v^e^{r, s}^o^{le com}^m^uⁿ^ity^v^o^lu^m^e^h^o^sp^{itals star}^tin^g^f^o^r^dⁱ^s^c^h^a^r^g^es^occ^u^rriⁿ^gⁱⁿ^F^Y^{2005. A}^l^o^w^-^v^o^l^u^m^e^h^o^s^pⁱ^t^a^l^s^wⁱ^t^h^f^e^w^e^{r t}^h^an^2,000^t^o^t^a^l^dis^c^h^a^rg^es^du^ri^ng^th^{e th}^{ree m}^o^s^t^recen^t
^g/w^s^p^itals^(SC^H^s⁾^an^{d Medicare depen}^d^en^t^h^o^sp^{ital is a sh}^o^r^t-^ter^m^g^eⁿ^e^r^a^{l h}^o^s^pⁱ^t^a^l^cos^t^reportⁱⁿ^g^peri^ods^w^o^u^l^{d be el}ⁱ^gⁱ^b^l^e^f^o^r
^s^.or^sp^{itals w}^ith^m^o^r^e^th^an^{a 5}^%^d^eclin^{e in}^th^{at is lo}^cated^m^o^r^e^th^an²⁵^r^o^a^d^m^iles^u^p^{to a 25% in}^creas^{e in}^th^{eir Medicare}
^le^ak^a^l^di^s^c^h^a^rg^es^f^r^om^on^{e per}ⁱ^{od t}^o^t^h^e^f^r^om^an^o^t^h^e^{r s}^u^ch^h^o^s^p^{ital an}^{d th}^{at h}^a^s^p^a^y^m^en^{t am}^o^uⁿ^t^star^tin^g^w^ith^co^{st r}^e^p^o^r^ts
^xt^m^a^y^a^p^p^l^y^fo^r^aⁿ^a^d^j^u^st^m^e^nt^t^o^t^h^eⁱ^r^l^e^s^s^t^h^an^{800 di}^s^c^h^a^rg^es^du^riⁿ^g^t^h^{e f}ⁱ^s^cal^t^h^at^b^e^gⁱⁿ^du^riⁿ^g^F^Y^{2005. El}ⁱ^gⁱ^b^l^e
^://wiki^y^m^en^{t r}^a^{tes to}^p^a^r^tially^acc^o^uⁿ^t^f^o^r^y^ear^{. C}^e^r^t^aⁱⁿ^b^u^d^g^etⁿ^e^u^t^r^a^lity^h^o^sp^{itals w}^o^u^l^d^b^e^lo^cated^{at least 1}⁵^m^iles
^h^ttp^h^e^{r cos}^t^s^a^s^s^o^{ciated w}^ith^{a drop in}^r^e^q^u^ir^em^en^{ts w}^o^u^l^dⁿ^o^{t ap}^p^l^y^t^o^th^is^f^r^o^m^a^sim^ilar^h^o^sp^{ital o}^r^th^o^s^e^d^e^ter^mⁱⁿ^ed
^t^v^o^lu^m^e^du^e^t^o^circu^m^s^t^an^ces^p^r^o^v^isioⁿ^.^T^h^{e d}^e^ter^mⁱⁿ^atioⁿ^o^f^th^e^by^th^{e Se}^c^r^e^t^ary^{to be s}^o^{located du}^{e to}
^oⁿ^d^th^{eir con}^t^rol.^percen^tag^e^pay^m^en^{t in}^creas^e^isⁿ^o^{t s}^u^bj^ect^f^actors^s^u^ch^as^w^eath^e^{r con}^d^itions^{, trav}^el
^{to adm}ⁱⁿⁱ^s^t^rativ^{e or j}^u^{dicial rev}ⁱ^ew^.^c^oⁿ^d^itioⁿ^s^{, o}^r^tr^av^{el tim}^{e to}^th^{e n}^e^a^r^e^s^t
^alterⁿ^ativ^{e so}^u^r^{ce o}^f^ap^p^r^o^p^r^{iate in}^p^a^tien^t
^care.^Ce^r^t^aⁱ^{n b}^u^d^g^e^t^ne^ut^r^a^lⁱ^t^y
^requⁱ^r^em^en^t^s^w^o^u^l^{d n}^o^t^appl^y^.
^cre^a^s^e^dⁱ^s^p^r^o^{portionate s}^h^{are hos}^p^ital^S^ecti^oⁿ^402.^Startin^g^f^o^{r dis}^c^h^a^rg^es^af^t^e^r^S^ecti^oⁿ^404.^St^a^r^tⁱ^{ng fo}^r^dⁱ^sc^ha^r^g^e^s^a^f^t^e^r^S^ecti^oⁿ^401.^Startin^g^f^o^{r dis}^c^h^a^rg^es^af^ter
^H^{) p}^aym^en^ts^{for s}^m^al^l^u^r^b^aⁿ^an^d^A^p^ri^l^{1, 2004, a h}^o^s^pⁱ^t^a^l^t^h^atⁱ^sⁿ^o^t^a^l^a^rg^e^O^c^t^{ober 1, 2004, a h}^o^s^pⁱ^t^a^l^t^h^at^qu^alⁱ^fⁱ^e^s^O^c^t^{ober 1, 2003, a h}^o^s^pⁱ^t^a^l^t^h^atⁱ^sⁿ^o^t^a
^pⁱ^t^a^l^s^{. Medicare m}^a^k^e^s^u^r^b^aⁿ^h^o^sp^{ital th}^{at q}^u^alif^{ies f}^o^r^{a DSH}^f^o^{r a D}^S^H^adj^u^s^t^m^eⁿ^t^w^h^en^its^DSH^l^a^r^g^e^u^r^b^aⁿ^h^o^sp^{ital th}^{at q}^u^alif^{ies f}^o^r^a
^d^itioⁿ^a^l^p^a^y^m^en^{ts to}^cer^tain^acu^te^ad^j^u^stm^eⁿ^t^w^{ill receiv}^e^{its D}^S^{H p}^a^y^m^en^ts^patien^t^percen^tag^e^ex^ceeds^th^{e 15}^{% DSH}^{DSH adj}^u^s^t^m^eⁿ^t^w^o^u^l^{d receiv}^e^its^DSH
^sp^{itals th}^{at ser}^v^{e a lar}^g^{e n}^u^m^b^e^r^o^f^lo^w^-^usi^{ng t}^h^e^c^u^r^r^eⁿ^t^D^S^H^a^d^j^u^st^m^e^nt^fo^r^m^ul^a^th^res^h^{old w}^o^u^l^{d receiv}^e^th^e^{DSH pay}^m^en^ts^pay^m^en^t^s^u^sⁱ^{ng t}^h^e^c^u^r^r^eⁿ^t^D^S^H
^e^{Medicare an}^{d Medicaid patien}^t^s^.^f^o^r^lar^g^{e u}^r^b^aⁿ^h^o^sp^{itals, su}^b^j^ect^to^{a lim}^it.^usⁱⁿ^g^th^{e cu}^rren^t^f^o^rm^u^l^{a th}^{at es}^tablis^h^e^s^adj^u^s^t^m^eⁿ^t^f^o^rm^u^l^{a f}^o^{r l}^a^rg^{e u}^r^ban
^t^h^o^{ugh a}^SCH^o^r^r^u^r^a^l^r^e^fe^r^r^a^l^c^eⁿ^t^e^r^T^h^{e DSH adj}^u^s^t^m^eⁿ^t^f^o^r^aⁿ^y^of^th^es^e^th^{e DSH adj}^u^s^t^m^e^nt^{for a larg}^{e u}^r^ban^h^o^sp^{itals, su}^b^j^{ect to}^{a l}ⁱ^m^{it. T}^h^{e DSH}
^R^C^{) can}^qu^ali^f^y^f^o^{r a h}ⁱ^g^h^e^{r DSH}^h^o^sp^{itals, ex}^cep^{t f}^o^r^r^u^r^a^{l r}^e^f^e^r^r^a^{l cen}^te^r^s^,^h^o^sp^ital.^adj^u^s^t^m^eⁿ^t^{for an}^y^of^th^es^{e h}^o^s^p^itals^,
^j^u^st^m^e^nt^,^ge^ne^r^a^l^l^y^,^t^h^e^D^S^H^a^d^j^u^st^m^e^nt^w^{ill b}^e^cap^p^e^d^{at 1}²^%^{. A}^Pⁱ^ck^{le h}^o^sp^ital^ex^cept^f^o^{r R}^R^C^s^{, w}^o^u^l^{d be capped at}^10%^.

CRS-11
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^{all u}^r^b^aⁿ^o^r^r^u^r^a^{l h}^o^sp^ita^{l can}^receivⁱⁿ^g^{a DSH adj}^u^s^t^m^eⁿ^t^uⁿ^d^{er th}^e
^e^is^lim^ite^d^{to a m}^a^xⁱ^m^u^m^of^a^alterⁿ^ativ^{e f}^o^r^m^u^l^{a w}^{ill n}^o^{t b}^e^af^f^ected^b^y
^creas^{e to its}^IP^P^S^pay^m^en^t.^L^a^rg^e^th^{is p}^r^o^v^isioⁿ^.⁽^F^o^r^a^d^e^scrⁱ^p^tioⁿ^o^f^Pⁱ^ck^le
^e^d^s^aⁿ^d^m^o^r^e⁾^u^r^b^aⁿ^h^o^s^pⁱ^t^a^l^s^aⁿ^d^h^o^sp^{itals, see p}^a^g^e¹²^co^lu^mⁿ¹^.⁾
^{e ru}^r^a^l^h^o^s^pⁱ^t^a^l^s^{(500 beds}^an^{d m}^o^re)
^{ible f}^o^{r a h}ⁱ^g^h^e^{r adj}^u^s^t^m^eⁿ^t^th^at
^{be s}ⁱ^gⁿⁱ^fⁱ^can^tly^g^r^eater;^th^e^am^ouⁿ^t^of
^adj^u^s^t^m^eⁿ^t^receiv^e^{d by}^th^es^e
^g^er^h^o^sp^{itals w}^{ill d}^e^p^eⁿ^d^u^p^oⁿ^{its DSH}
^tien^t^p^e^r^cen^tag^e⁽^t^h^e^p^e^r^cen^tag^e^o^f^lo^w^-
^m^e^{Medicare or Medicaid patien}^t^s
^rv^ed).
^e^{dPAC report on}^M^e^dicare^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^404A^.^M^e^dPA^C^w^o^u^l^d^be^N^o^provⁱ^sⁱ^oⁿ^.
ⁱ^{ki/CRS-RL32005}^d^j^u^stm^e^nts^{. No}^p^r^o^v^isioⁿⁱⁿ^rren^{t law}^.^r^e^q^u^ir^ed^to^c^oⁿ^d^u^{ct a stu}^d^y^to^d^e^ter^mⁱⁿ^e^{(1) w}^h^e^t^h^e^{r DS}^{H pay}^m^en^t^s^s^h^ou^l^d^be
^g/w^m^a^d^eⁱⁿ^th^{e s}^a^m^e^m^aⁿⁿ^e^{r as}^Medicare’s
^s^.or^g^r^adu^a^{te m}^e^dical^edu^cation^pay^m^en^ts^{; (2)}
^le^ak^th^{e ex}^ten^t^th^{at h}^o^s^p^itals^receivⁱⁿ^g
^{Medicaid DS}^H^pay^m^en^ts^als^o^receiv^e
^://wiki^Medicare^{DSH pay}^m^en^ts^{; an}^{d (3)}^w^h^eth^e^r
^h^ttp^uⁿ^c^om^pen^s^{ated care cos}^t^s^s^h^ou^{ld be added}
^to^th^{e Medicare DSH f}^o^rm^u^l^{a. T}^h^{e report,}
ⁱⁿ^c^l^udⁱ^{ng r}^e^c^o^m^m^e^nd^a^tⁱ^o^ns,^w^o^ul^d^b^e^d^u^e
^{to C}^oⁿ^g^r^es^s^w^ithⁱⁿ^{1 y}^{ear f}^r^om^en^actm^eⁿ^t^.
^cl^u^d^e^w^{age d}^a^{ta of}^h^o^s^pⁱ^t^al^s^th^at^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^o^{n 405(e)}^{. T}^h^{e Secretary}^w^o^u^l^d^b^e^N^o^provⁱ^sⁱ^oⁿ^.

^{l a}^c^c^e^{ss ho}^spit^a^l^s^requ^{ired to ex}^clu^d^{e w}^a^g^e^d^a^{ta f}^r^om
^A^H^s⁾^from^I^PPS^w^{age i}ⁿ^d^e^x^.^C^e^rtain^ho^spⁱ^t^a^l^s^t^h^a^t^ha^ve^c^o^nve^r^t^e^d^t^o^CA^H^s
^alif^ied^sm^{all h}^o^sp^{itals ar}^{e co}ⁿ^v^e^r^tin^g^to^f^r^o^m^th^{e I}^P^P^S^w^a^g^eⁱⁿ^d^e^x^calcu^latioⁿ
^H^s^.^A^f^t^e^r^c^oⁿ^v^e^r^sⁱ^oⁿ^,^t^h^e^s^e^f^a^cⁱ^l^ities^s^t^artⁱⁿ^g^f^o^{r cos}^t^reportⁱⁿ^g^peri^ods
^paid^on^{a reas}^on^{able cos}^t^basⁱ^s^an^d^are^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2004.}
^{t paid u}ⁿ^d^{er IP}^P^S^{. Medicare’}^s^IP^P^S
^m^en^ts^{to acu}^te^h^o^s^p^itals^{are adj}^u^s^t^{ed by}
^a^g^eⁱⁿ^dex^of^the^{area w}^h^{ere th}^e
^s^p^it^{al is}^{located or h}^a^s^been^reas^sⁱ^gⁿ^e^d.
^t^h^o^{ugh t}^h^e^ho^spⁱ^t^a^l^w^a^geⁱⁿ^d^e^{x i}^s

CRS-12
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^annually^,^{the w}^a^{ge ind}^e^x^f^o^r
^y^gⁱ^v^eⁿ^fi^s^cal^y^{ear i}^s^bas^e^{d on}^dat^a
^b^m^itted^as^p^a^r^t^o^f^{a h}^o^sp^ital’^{s co}^{st r}^e^p^o^r^t
^{4 y}^ears^prevⁱ^o^u^s^l^y^{. A}^s^of^F^Y^2004,
^g^e^d^a^{ta f}^r^o^m^h^o^sp^{itals th}^{at h}^a^v^e
ⁿ^v^e^{rted to C}^A^Hs^w^e^{re ex}^clu^d^{ed f}^r^om
^P^P^S^w^a^g^eⁱⁿ^d^e^x^calcu^latioⁿ^.
^creas^e^{DSH for}^“^P^ick^l^{e” hos}^p^itals^.^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^420A^.^Ho^sp^{itals th}^a^t^q^u^a^lⁱ^f^y^f^o^r^N^o^provⁱ^sⁱ^oⁿ^.
^{st DSH h}^o^spⁱ^t^a^{ls receiv}^e^ad^d^itioⁿ^a^l^t^h^{e D}^S^H^adj^u^s^t^m^eⁿ^t^{under t}^h^{e Pi}^ck^l^e
^p^a^y^m^en^ts^becau^s^e^th^ey^s^e^rv^{e a}^a^m^en^dm^en^{t w}^o^u^l^{d receiv}^e^{a DSH}
^p^roportⁱ^oⁿ^a^t^e^s^h^{are of}^{poor Medi}^care^o^p^e^r^a^tin^g^an^d^cap^{ital ad}^j^u^stm^eⁿ^t^o^f⁴⁰^%
^d^Medi^cai^{d pat}ⁱ^eⁿ^t^s^.^A^f^e^w^u^r^ban^f^o^{r di}^s^c^h^a^rg^es^begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1, 2003.}
^s^p^itals^receiv^e^{DSH pay}^m^en^ts^uⁿ^d^e^r^an
ⁱ^{ki/CRS-RL32005}ⁿ^ativ^{e P}ⁱ^ck^{le f}^o^r^m^u^l^{a. I}^f^a^h^o^sp^ital
^g/w^e^s^a^t^l^eas^{t 30% of}^its^patien^t^care
^s^.or^nue^fr^o^mⁱⁿ^dⁱ^ge^nt^c^a^r^e^fund^s,ⁱ^t^wⁱ^l^l
^le^ak^creas^{e in}^its^Medicare
^e^r^a^tⁱⁿ^g^p^a^y^m^en^{ts. T}^h^{e P}ⁱ^ck^{le h}^o^sp^itals
^://wiki^e^{a capital DSH adj}^u^s^t^m^e^nt^of
^h^ttp^{, t}^h^{e am}^ouⁿ^t^t^h^at^ot^h^e^r^no^n-^Pi^ck^l^e^sp^{itals w}^ith^{a 3}⁵^%^o^p^e^r^a^tin^g^DSH
^u^s^t^m^eⁿ^t^w^o^u^l^{d receiv}^e^.
^creas^e^pa^y^m^ents^{for hos}^p^italsⁱⁿ^S^ecti^oⁿ^504.^Ho^sp^{itals in}^P^u^er^to^Rico^w^ill^S^ecti^oⁿ^409.^Ho^sp^{itals in}^P^u^er^to^Rico^S^ecti^oⁿ^503.^F^r^om^F^Y²⁰⁰⁴^t^h^ou^g^h
^{. Un}^{der Medicare’}^s^IP^P^S^,^receiv^e^{Medicare pay}^m^en^ts^bas^e^{d on}^a^w^o^u^l^d^receiv^e^{Medicare pay}^m^en^ts^bas^e^d^F^Y^{2007, h}^o^s^pⁱ^t^a^l^sⁱⁿ^Pu^ert^o^Rⁱ^{co w}^o^u^l^d
^{parate s}^t^an^{dardized am}^ouⁿ^t^s^are^u^s^ed^to⁵⁰^/⁵⁰^sp^{lit b}^e^tw^een^f^e^d^e^r^a^{l an}^d^lo^cal^oⁿ^a⁵⁰^/⁵⁰^sp^{lit b}^e^tw^eenⁿ^a^tioⁿ^a^{l an}^d^lo^cal^receiv^e^anⁱⁿ^creasⁱⁿ^g^am^ouⁿ^t^of^th^e
^y^sh^o^r^t-^t^e^r^m^g^eⁿ^e^r^a^{l h}^o^sp^{itals in}^P^u^er^to^am^o^uⁿ^t^s^bef^o^{re A}^p^ri^l^{1, 2004. S}^t^artⁱⁿ^g^am^ouⁿ^t^s^b^e^f^o^{re O}^c^t^{ober 1, 2004. T}^h^es^e^p^a^y^m^en^{t r}^a^{te b}^a^sed^oⁿⁿ^a^tioⁿ^a^{l r}^a^{tes a}^s
^{co. T}^h^{e Bal}^aⁿ^{ced Bu}^dg^et^A^c^t^o^f¹⁹⁹⁷^A^p^ri^l^{1, 2004}^t^h^ro^{ugh Se}^p^t^e^m^b^e^r³⁰^,^2004,^h^o^s^p^itals^w^o^u^l^{d receiv}^e^Medicare^f^o^l^l^o^w^s^:^du^riⁿ^g^F^Y^{2004, pay}^m^en^t^w^o^u^l^d
^B^A^{97) p}^r^o^v^ides^f^o^{r an}^adj^u^s^t^m^eⁿ^t^of^p^a^y^m^en^{t w}^{ill b}^e^b^a^sed^oⁿ⁶²^.⁵^%ⁿ^a^ti^oⁿ^a^l^pay^m^en^t^s^bas^e^{d on}^100%^of^t^h^{e f}^e^deral^{be 59%}ⁿ^a^tⁱ^oⁿ^a^l^an^{d 41%}^l^o^cal^;^d^u^rⁱ^ng
^u^{erto R}ⁱ^{co rates}^f^r^om^blen^ded^am^o^uⁿ^t^an^d³⁷^.⁵^%^lo^{cal a}^m^o^uⁿ^{t; th}^{is w}^ill^r^a^t^e^fo^r^dⁱ^sc^ha^r^g^e^s^b^e^giⁿⁿⁱ^{ng O}^c^t^o^b^e^r¹^,^{2005, pay}^m^en^t^w^o^u^l^{d be 67%}ⁿ^a^tⁱ^oⁿ^a^l
^o^unt^{s b}^a^se^d^oⁿ²⁵^{% o}^f^t^h^e^na^tⁱ^o^na^l^ch^an^g^e^to⁷⁵^%ⁿ^a^tioⁿ^a^{l an}^d²⁵^%^lo^cal²⁰⁰⁴^an^d^bef^o^{re O}^c^t^{ober 1, 2009. T}^h^e^rat^e^an^{d 33%}^l^o^cal^an^{d 75%}ⁿ^a^tⁱ^oⁿ^a^l^an^{d 25%}
^ouⁿ^t^s^an^{d 75%}^of^t^h^{e l}^o^ca^l^a^m^ouⁿ^t^s^t^o^af^t^e^r^O^c^t^{ober 1, 2004 an}^{d i}ⁿ^s^u^bs^equ^eⁿ^t^f^o^r^h^o^sp^{itals in}^P^u^er^to^Rico^w^o^u^l^d^r^e^v^e^r^t^to^l^o^cal^du^riⁿ^g^F^Y^{2006 an}^{d s}^u^bs^equ^eⁿ^t^l^y^.

^ded^a^m^ouⁿ^t^s^bas^e^{d on}^{a 50/}^{50 s}^p^lⁱ^t^y^ears^.^{a 50/50 s}^p^{lit af}^{ter October 1, 2009.}
^eenⁿ^a^tion^a^{l an}^{d local am}^ouⁿ^t^s^.

CRS-13
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^q^uⁱ^{re G}^A^{O rep}^{ort on}^ap^p^r^op^rⁱ^a^t^eⁿ^e^s^s^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^413.^Usin^g^th^{e m}^o^{st cu}^r^r^en^{t d}^a^ta,^N^o^provⁱ^sⁱ^oⁿ^.
^I^PPS^p^aym^en^ts^.^N^o^provⁱ^sⁱ^oⁿⁱⁿ^th^{e Co}^m^p^tr^o^ller^Gen^e^r^a^{l (}^G^A^O⁾^w^o^u^l^d^b^e
^rren^{t law}^.^r^e^q^u^ir^ed^to^r^e^p^o^r^{t to}^Coⁿ^g^r^e^{ss w}^ithⁱⁿ¹⁸
^m^oⁿ^t^h^s^o^f^en^ac^tm^en^{t o}ⁿ^{: (}¹⁾^th^e
^appropri^a^t^e^l^e^v^e^l^an^{d di}^st^rⁱ^bu^tⁱ^oⁿ^of^IPPS
^Medⁱ^car^{e p}^a^y^m^en^{ts to}^sh^o^r^t-^ter^m^g^eⁿ^e^r^a^l
^h^o^s^pⁱ^t^als^;^an^{d (2) th}^{e n}^{eed f}^o^{r g}^e^og^raph^ic
^a^d^ju^s^t^m^eⁿ^t^s^t^o^r^e^f^l^{ect leg}ⁱ^tim^at^e
^dⁱ^f^f^e^r^eⁿ^{ces in}^h^o^sp^{ital co}^sts.
^u^l^{ate w}^{age indices}^{for hos}^p^itals^.^S^e^c^tⁱ^oⁿ^508.^T^h^{e Secr}^etar^y^w^{ill estab}^lish^S^ecti^oⁿ^419.^T^h^e^Secretary^w^o^u^l^{d be able}^N^o^provⁱ^sⁱ^oⁿ^.
^P^S^h^o^sp^{itals m}^a^y^ap^p^l^y^to^th^{e Med}ⁱ^car^e^{a w}^a^g^eⁱⁿ^dex^appeal^s^proces^s^by^Jan^u^a^ry^1,^t^o^w^aⁱ^v^e^es^tablis^h^e^d^reclas^sⁱ^fi^c^a^tⁱ^oⁿ
^raph^{ic C}^l^a^s^sⁱ^fⁱ^cation^R^e^vⁱ^ew^B^o^ard^2004.^A^h^o^s^pⁱ^t^a^l^s^eekⁱⁿ^g^t^o^be^recl^as^sⁱ^fⁱ^ed^cr^iterⁱ^aⁱⁿ^calcu^latin^g^th^{e w}^a^g^eⁱⁿ^d^e^xⁱⁿ^a
ⁱ^{ki/CRS-RL32005}^R^B^{) f}^o^{r a}^ch^an^g^eⁱⁿ^clas^sⁱ^fⁱ^cation^to^f^e^ren^t^{area. If}^reclas^sⁱ^fⁱ^cation^is^m^u^{st su}^b^m^it^aⁿ^ap^p^{eal to}^th^{e MGCRB}ⁿ^o^l^a^t^e^r^t^h^aⁿ^F^e^b^r^u^a^r^y¹⁵^,^2004.^s^t^{ate w}^h^en^m^a^kⁱⁿ^g^pay^m^en^ts^f^o^{r h}^o^s^p^ital^di^s^c^h^a^rg^esⁱⁿ^F^Y^2004.
^g/w^aⁿ^ted^,^th^{e n}^e^w^w^a^g^eⁱⁿ^d^e^x^w^{ill b}^e^u^s^ed^Reclassifⁱ^catioⁿ^s^w^{ill b}^e^e^f^f^ectiv^{e f}^o^r^{a 3}^-
^s^.or^latin^g^M^e^dicare’^s^pay^m^en^{t f}^o^r^y^{ear peri}^{od s}^t^artⁱⁿ^g^A^p^rⁱ^l¹^,^{2004. T}^h^ere
^le^ak^a^tien^t^an^d^o^u^tp^atien^t^ser^v^{ices. T}^h^e^w^ill^b^eⁿ^o^f^u^r^t^h^e^r^ad^mⁱⁿⁱ^str^a^tiv^e^o^r^j^u^dⁱ^cial
^sⁱ^fⁱ^catio^{n s}^t^an^dards^{are es}^tablis^h^e^d^r^e^vⁱ^ew^o^f^th^{ese d}^ecisioⁿ^{s. T}^h^{e ad}^d^itioⁿ^a^l
^://wiki^r^e^gul^a^tⁱ^o^n.^sp^en^dⁱⁿ^g^asso^ciated^w^ith^th^{is p}^r^o^v^isioⁿ
^h^ttp^canⁿ^o^{t ex}^{ceed $900 m}^illion^.
^p^{ital m}^a^rk^{et bas}^k^{et m}^o^re^S^ecti^oⁿ^404.^T^h^{e Secretary}^is^requ^ired^to^N^o^provⁱ^sⁱ^oⁿ^S^ecti^oⁿ^404.^T^h^{e Secret}^a^r^y^w^o^u^l^d^be
^ly^{. IP}^P^S^s^t^an^{dardized am}^ouⁿ^t^s^revⁱ^s^e^th^{e m}^a^rk^et^bas^k^et^w^e^ig^h^t^s^{to ref}^l^ect^requ^{ired to rev}ⁱ^s^e^th^{e m}^a^rk^{et bas}^k^et^c^o^s^t
ⁱⁿ^c^r^e^a^s^e^d^a^nnua^l^l^y^usi^{ng a}ⁿ^up^d^a^t^e^th^{e m}^o^s^t^cu^r^r^eⁿ^tly^av^ailab^l^{e d}^a^{ta an}^d^to^w^e^ig^h^t^{s to}^r^e^f^l^{ect th}^{e m}^o^st^c^u^r^r^eⁿ^tly
^r^w^h^ich^{is d}^e^ter^mⁱⁿ^edⁱⁿ^p^a^r^t^b^y^th^e^estab^lish^a^s^c^h^e^d^u^{le f}^o^r^r^e^vⁱ^sin^g^th^{e co}^st^av^ailab^l^{e d}^a^{ta an}^d^to^estab^lis^h^{a sch}^e^d^u^le
^o^j^e^c^tedⁱⁿ^cr^{ease in}^th^{e h}^o^sp^{ital m}^a^r^k^et^categ^ory^w^e^ig^h^t^s^m^o^{re of}^ten^th^an^on^ce^fo^r^r^e^vi^si^{ng t}^h^e^w^eⁱ^ght^{s m}^o^r^e^o^f^t^eⁿ^t^h^aⁿ
^sk^{et (}^M^B⁾^,^anⁱⁿ^p^u^{t p}^r^{ice in}^d^e^x^w^h^ich^ev^ery⁵^y^ears^.^T^h^{e Secretary}^is^requ^ired^to^on^{ce ev}^ery⁵^y^e^a^r^s^.^T^h^{e Secretary}^w^o^u^l^d
^u^r^es^th^{e av}^erag^{e ch}^an^g^eⁱⁿ^th^{e price}^p^u^b^lish^th^{e r}^easoⁿ^{s f}^o^r^aⁿ^d^th^{e o}^p^tioⁿ^s^b^e^r^e^q^u^ir^ed^to^su^b^m^{it a}^r^e^p^o^r^t^to^Coⁿ^g^r^ess
^g^oods^an^{d s}^e^rvⁱ^ces^h^o^s^pⁱ^t^a^l^s^pu^rch^a^s^e^d^con^s^{idered in}^es^tablis^hⁱⁿ^g^s^u^ch^{a s}^c^h^e^du^le^by^O^c^t^{ober 1, 2004 on}^t^h^{e reas}^on^s^f^o^{r an}^d
^r^d^e^r^t^o^f^u^rⁿ^ishⁱⁿ^p^a^tien^t^car^{e. Cen}^t^er^sⁱⁿ^th^{e f}ⁱⁿ^a^{l r}^u^{le estab}^lishⁱⁿ^g^FY2⁰⁰⁶^th^{e o}^p^tioⁿ^s^coⁿ^s^id^er^edⁱⁿ^estab^lishⁱⁿ^g^su^ch
^{r Medicare an}^{d Medicaid Serv}^icesⁱⁿ^p^a^tien^t^h^o^sp^{ital p}^a^y^m^en^ts.^{a s}^c^h^e^du^le.

^{MS) rev}ⁱ^s^e^s^th^{e categ}^ory^w^e^ig^h^t^s^,
^alu^a^tes^th^{e price prox}^ies^f^o^r^s^u^ch
^ories^,^and^r^e^bas^e^s^th^{e MB}^ev^ery⁵
^.

CRS-14
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^spit^a^l^upda^t^e^f^a^ct^o^r^.^Each^S^ecti^oⁿ^501.^A^c^u^t^{e h}^o^sp^{itals w}^{ill r}^ecei^v^e^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^501.^A^c^ut^e^ho^spⁱ^t^a^l^s^w^o^ul^d
ⁱ^care’^s^operatin^g^pay^m^en^ts^to^th^{e MB}^{as th}^{e o}^p^e^r^a^tin^g^u^p^d^a^{te f}^o^r^receiv^e^an^operatin^g^u^{pdate of}^th^{e MB}
^s^p^itals^{are in}^creas^{ed o}^r^u^{pdated by}^a^F^Y^{2004. F}^r^om^F^Y^{2005 t}^h^ro^{ugh FY}^2007,^mⁱⁿ^u^s^{0.4 percen}^t^a^g^e^poiⁿ^t^s^f^o^{r F}^Y²⁰⁰⁴
^r^th^{at is d}^e^ter^mⁱⁿ^edⁱⁿ^p^a^r^t^b^y^t^h^e^h^o^sp^{itals th}^{at su}^b^m^{it r}^e^q^u^ir^ed^q^u^ali^t^y^d^a^ta^t^h^r^o^{ugh FY}^{2006. T}^h^{e operat}ⁱⁿ^g^u^pdat^e
^o^j^e^c^t^e^d^a^nnua^l^c^h^a^ngeⁱⁿ^t^h^e^ho^spⁱ^t^a^l^w^{ill receiv}^e^t^h^{e MB}^{as an}^u^p^d^a^te;^w^o^u^l^{d be t}^h^{e MB i}ⁿ^creas^{e i}ⁿ^F^Y^{2007 an}^d
^{. Co}ⁿ^g^r^{ess estab}^lish^e^{s th}^{e u}^p^d^a^{te f}^o^r^h^o^sp^{itals th}^{at d}^oⁿ^o^{t su}^b^m^it^su^ch^d^a^ta^w^ill^sub^s^e^q^ue^nt^l^y^.
^s^IP^P^S^f^o^{r operatin}^g^cos^t^s^,^of^ten^r^eceiv^e^t^h^e^M^B^mⁱⁿ^u^s⁰^.⁴^p^e^r^c^eⁿ^t^a^g^e
^v^e^ral^y^earsⁱⁿ^adv^aⁿ^{ce. C}^u^rren^tly^,^acu^te^poiⁿ^t^s^.^T^h^{e redu}^ctⁱ^oⁿ^w^o^u^l^d^appl^y^t^o^t^h^e
^o^sp^{itals w}^{ill receiv}^e^th^e^M^B^{as an}^y^earⁱⁿ^qu^es^tⁱ^oⁿ^on^l^y^an^{d w}^o^u^l^{d n}^o^t^be
^e^f^o^{r F}^Y^{2004 an}^{d s}^u^bs^equ^eⁿ^t^l^y^.^ta^kenⁱⁿ^{to accou}ⁿ^tⁱⁿ^s^u^bs^equ^eⁿ^t^y^ears^.
^T^h^e^o^p^er^atin^g^u^p^d^a^{te w}^{ill b}^e^th^{e MB}ⁱⁿ
^F^Y^{2008 an}^{d i}ⁿ^s^u^bs^equ^eⁿ^t^y^ears^.
^creas^e^pas^s^-^t^h^r^o^u^g^{h paym}^ents^{for new}^S^ecti^oⁿ^503.^T^h^{e Secretary}^is^requ^{ired to}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^502.^N^e^w^di^agⁿ^o^sⁱ^s^an^d^procedu^r^e
ⁱ^{ki/CRS-RL32005}^p^a^ti^en^{t tech}ⁿ^o^l^ogy.^T^h^{e Me}^dicare,^e^dⁱ^c^aⁱ^d^{, an}^{d SCH}^I^P^B^e^ne^fi^t^s^{add n}^e^w^di^agⁿ^o^sⁱ^s^an^d^procedu^r^{e codes}ⁱⁿ^A^p^{ril 1 of}^each^y^{ear bu}^{t is}ⁿ^o^t^requ^{ired to}^codes^w^o^u^l^{d be ad}^d^e^dⁱⁿ^A^p^{ril 1 of}^each^y^{ear th}^{at w}^o^u^l^{d af}^f^{ect Medica}^r^e^’^s^IP^P^S
^g/w^prov^em^en^t^an^{d Prot}^ectⁱ^oⁿ^A^c^t^o^f²⁰⁰⁰^ch^an^g^e^Medicare’^s^pay^m^en^{t or DR}^G^st^ar^tin^g^th^{e f}^o^llo^wⁱⁿ^g^Octo^b^e^r^.^T^h^e
^s^.or^IP^A⁾^es^tab^lⁱ^s^h^e^{d th}^{at Medicare’}^s^IP^P^S^classifⁱ^catioⁿ^as^{a r}^e^su^{lt o}^f^th^ese^ad^d^itioⁿ^s^Secretary^w^o^u^l^{d n}^o^{t be able to den}^yⁿ^e^w
^le^ak^ou^{ld recog}ⁿⁱ^{ze th}^e^cos^t^s^ofⁿ^e^w^m^e^dical^uⁿ^{til th}^{e f}ⁱ^{scal y}^ear^th^{at b}^e^gⁱⁿ^s^af^ter^th^at^techⁿ^o^log^y^s^t^atu^s^becau^s^e^an^item^h^a^s^been
^rvⁱ^ces^an^{d t}^e^c^hno^l^o^gi^e^s^begⁱⁿⁿⁱⁿ^g^d^a^{te. W}^h^en^estab^lishⁱⁿ^g^w^h^eth^e^r^DRG^u^s^{ed pri}^o^{r t}^o^t^h^{e 2-}^t^o^-³^y^{ear peri}^{od bef}^o^re
^://wiki^h^e^a^ddition^a^{l h}^o^s^p^ital^pay^m^eⁿ^ts^{are in}^adequ^a^{te, th}^{e Secretary}^is^{it w}^a^{s issu}^ed^{a b}^illin^g^c^o^d^e^.^W^h^en
^h^ttp^m^ent^s^c^aⁿ^{be m}^a^{de by}^t^h^{e m}^ean^s^of^r^e^q^u^ir^ed^to^ap^p^l^y^{a th}^r^e^sh^o^l^d^th^{at is th}^e^es^tablis^hⁱⁿ^g^w^h^eth^e^{r DR}^{G pay}^m^en^ts^are
^w^t^e^c^hno^l^o^gy^gr^o^u^p^s^,^aⁿ^a^d^d^-^oⁿ^l^e^s^s^e^{r of}^75%^of^t^h^{e s}^t^an^dardⁱ^{zed am}^ouⁿ^tⁱⁿ^adequ^a^{te, th}^{e Secretary}^w^o^u^l^{d be}
^m^en^{t, a pay}^m^en^{t adj}^u^s^t^m^eⁿ^t^{, or}^oth^e^r⁽ⁱⁿ^c^reas^{ed to ref}^l^ect^th^{e dif}^f^e^ren^{ce betw}^een^r^e^q^u^ir^e^d^to^ap^p^l^y^{a th}^r^e^sh^o^l^d^th^{at is th}^e
^an^is^m^,^b^u^{t can}ⁿ^o^{t be a s}^e^{parate f}^e^e^cos^t^s^an^{d ch}^arg^e^s⁾^{or 75%}^of^on^e^s^t^an^dard^l^e^s^s^e^r^of^75%^of^t^h^{e s}^t^an^dardi^{zed am}^ouⁿ^t
^h^e^du^l^e^an^{d m}^u^s^t^{be bu}^dg^etⁿ^e^u^t^ral^.^C^M^S^d^e^vⁱ^atioⁿ^f^o^r^th^{e DRG in}^v^o^lv^ed^{. T}^h^e^(adj^u^s^{ted to ref}^l^{ect th}^{e dif}^f^e^ren^{ce betw}^een
^lish^e^d^th^{at a tech}ⁿ^o^lo^g^y^th^at^p^r^o^v^id^ed^S^e^cr^etar^y^{is r}^e^q^u^ir^ed^to^{: (}¹⁾^m^aⁱⁿ^taiⁿ^a^cos^t^s^an^{d ch}^arg^e^s⁾^or^75%^of^on^{e s}^t^an^dard
^su^b^s^tan^{tial im}^p^r^o^v^em^en^{t to}^ex^istin^g^cu^r^r^eⁿ^t^p^u^b^{lic list o}^f^p^eⁿ^dⁱⁿ^g^ap^p^licatioⁿ^s^d^e^vi^a^tⁱ^o^{n fo}^r^D^R^Gⁱ^nvo^l^v^e^d^.^T^h^e
^eⁿ^t^{s w}^o^u^l^d^q^u^alif^y^f^o^r^ad^d^itioⁿ^a^l^f^o^{r th}^is^additiona^l^pay^m^en^{t; (2) accept}^S^ecr^e^t^a^r^y^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o^provⁱ^d^e
^m^ent^s^.^T^h^{e add-}^on^pay^m^en^t^f^o^{r an}^pu^{blic com}^m^eⁿ^t^{, recom}^m^eⁿ^d^ations^{, an}^d^ad^d^itioⁿ^a^{l r}^e^g^u^l^ato^r^y^g^uⁱ^d^aⁿ^ce^oⁿ^th^{e n}^e^w
^ib^{le n}^e^w^techⁿ^o^lo^g^y^w^o^u^l^d^o^ccu^r^w^h^en^d^a^t^a^r^e^ga^r^dⁱ^{ng w}^h^e^t^he^r^a^se^r^vⁱ^c^e^o^r^techⁿ^o^log^y^crⁱ^t^{eria. T}^h^{e Secretary}^w^o^u^l^d
^t^an^{dard di}^a^gⁿ^o^sⁱ^s^rel^a^t^e^{d g}^r^ou^p^techⁿ^o^lo^g^y^r^e^p^r^e^s^eⁿ^t^s^a^su^b^s^tan^tial^b^e^r^e^q^u^ir^ed^to^d^eem^th^{at a tec}^hⁿ^o^lo^g^y
^RG)^p^a^y^m^en^{t w}^a^{s in}^ad^eq^u^a^{te. T}^h^isⁱ^m^prov^em^en^t^;^an^{d (3) prov}ⁱ^d^{e f}^o^{r a}^pu^blⁱ^c^p^r^o^v^id^{es a su}^b^s^tan^{tial im}^p^r^o^v^em^en^{t o}ⁿ^an
^h^ol^{d w}^a^s^es^t^a^b^lⁱ^s^h^e^{d as}^on^{e s}^t^an^dard^m^eetin^g^w^ith^th^e^clin^ical^s^t^af^f^{at C}^M^{S an}^d^ex^istin^g^tr^eatm^eⁿ^t^if^{it is d}^e^sigⁿ^a^ted^uⁿ^d^er
ⁱ^ation^abov^{e th}^{e m}^ean^s^t^an^dardized^orgaⁿⁱ^z^a^tⁱ^oⁿ^s^repres^en^tⁱⁿ^g^ph^y^sⁱ^cⁱ^aⁿ^s^,^s^ectⁱ^oⁿ⁵⁰⁶^of^t^h^{e F}^D^A^A^c^t^,^approv^ed
^G^;^t^h^{e add-}^on^pay^m^en^t^f^o^r^ne^w^ben^e^fⁱ^ciaries^,^m^aⁿ^u^f^actu^r^ers^{or othe}^r^uⁿ^d^er^c^e^r^t^ain^sectioⁿ^s^o^f^T^{itle 2}¹^,
ⁿ^o^lo^g^y^w^o^u^l^d^b^e^th^e^lesser^o^f^{: (}^a⁾⁵⁰^%ⁱⁿ^ter^e^sted^p^a^r^ties.^T^h^ese^actioⁿ^s^w^{ill o}^ccu^r^desⁱ^gⁿ^a^t^e^{d f}^o^{r pri}^o^ri^t^y^revⁱ^ew^{, i}^s^an

CRS-15
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^th^{e co}^{sts o}^f^th^{e n}^e^w^techⁿ^o^lo^g^y^{; o}^r⁽^b⁾^pri^o^{r t}^o^t^h^{e pu}^blⁱ^catⁱ^oⁿ^of^{a propos}^ed^ex^em^{pt m}^e^{dical dev}ⁱ^c^e^uⁿ^d^{er s}^ection
^of^t^h^{e am}^ouⁿ^t^by^w^hⁱ^c^h^t^h^{e cos}^t^s^r^e^gul^a^tⁱ^o^n.^B^e^fo^r^e^e^s^t^a^b^lⁱ^s^hi^{ng a}ⁿ^a^d^d^-^oⁿ^520(m⁾^of^s^u^ch^A^c^{t, or}^receiv^e^s^ex^pedited
^{ceeded th}^{e s}^t^an^{dard DR}^{G pay}^m^en^t.^pay^m^en^{t as}^th^{e appropriate}^reim^bu^rs^em^en^t^revⁱ^ew^uⁿ^d^{er s}^ectⁱ^oⁿ^{515(d)(5). O}^t^h^e^r
^w^e^ve^r^,ⁱ^f^t^h^e^ne^w^t^e^c^hno^l^o^gy^p^a^y^m^eⁿ^t^s^m^ech^an^is^m^,^th^{e Secre}^t^ary^is^{directed to}^r^e^q^u^ir^em^en^{ts r}^e^q^u^irⁱⁿ^g^th^{e p}^r^o^{cess f}^o^r
^tim^{ated to ex}^{ceed th}^{e bu}^dg^{eted targ}^et^iden^tif^y^on^e^or^m^o^re^DR^Gs^an^{d as}^sⁱ^gⁿ^th^e^pu^blⁱ^cⁱⁿ^p^u^t^w^o^u^l^{d be i}^m^pos^{ed. A}
^ouⁿ^t^of^1%^of^t^h^e^t^o^t^a^l^operatⁱⁿ^g^techⁿ^o^l^o^gy^{to th}^{at DR}^{G. W}^h^en^s^u^ch^pref^er^eⁿ^c^e^f^o^u^s^{e of}^{a DR}^{G adj}^u^s^t^m^eⁿ^t
ⁱ^eⁿ^t^pay^m^eⁿ^t^s^{, t}^h^{e add-}^on^pay^m^en^t^s^as^sⁱ^gⁿ^m^en^{t to a DR}^{G occur}^s^{, n}^o^add-^on^w^o^u^l^d^{be es}^t^a^blⁱ^s^h^e^{d. A}^dd-^on^pay^m^en^t^s
^{ced pros}^pectiv^ely^.^C^M^S^h^a^s^pay^m^en^t^w^o^u^l^{d be m}^a^de;^t^h^e^bu^dg^et^-^w^o^u^l^{d be in}^creas^{ed to th}^{e percen}^tag^e^th^at
^ed^t^o^redu^{ce t}^h^{e t}^h^res^h^ol^{d t}^o^75%^ofⁿ^e^u^t^r^a^lity^r^e^q^u^ir^em^en^{t w}^ith^r^e^sp^{ect to}^Medⁱ^car^{e r}^e^im^b^u^r^s^{es in}^p^a^tien^t^o^u^tlier
^e^st^aⁿ^d^a^r^d^d^e^vi^a^tⁱ^o^{n b}^e^y^o^nd^t^h^e^a^nnua^l^D^R^G^r^e^c^l^a^ssi^fi^c^a^tⁱ^o^{ns a}ⁿ^d^c^a^s^e^s^.^Fundⁱ^{ng fo}^r^t^hⁱ^s^ne^w^t^e^c^hno^l^o^gy
^om^{etric m}^ean^s^t^an^{dardized ch}^arg^e^f^o^r^all^recalcu^latioⁿ^w^{ill ap}^p^l^y^.^Fuⁿ^dⁱⁿ^g^f^o^{r n}^e^w^w^o^ul^d^no^l^o^nge^r^b^e^b^u^d^g^e^t^ne^ut^r^a^l^.
ⁱⁿ^th^{e DRG to}^w^h^ich^th^eⁿ^e^w^ser^v^ice^techⁿ^o^lo^g^y^{is n}^o^loⁿ^g^e^r^r^e^q^u^ir^ed^to^b^e
^ssigne^d^.^b^u^d^g^{et n}^e^u^t^r^a^{l. T}^h^{e p}^r^o^v^isioⁿ^s^w^ill^a^p^p^l^y
^t^o^ne^w^t^e^c^hno^l^o^gy^d^e^t^e^r^mⁱⁿ^a^tⁱ^oⁿ^s
ⁱ^{ki/CRS-RL32005}^begⁱⁿⁿⁱ^{ng i}ⁿ^F^Y^{2005. A}^pplⁱ^catⁱ^oⁿ^s^t^h^at
^g/w^w^e^{re den}ⁱ^{ed in}^{FY2005 w}^{ill b}^e
^s^.or^recon^s^{idered u}ⁿ^d^er^th^{ese p}^r^o^v^isioⁿ^s^{; if}
^le^ak^g^r^an^ted^,^th^{e m}^a^xⁱ^m^u^m^tim^{e p}^e^rⁱ^o^d
^o^t^h^e^r^w^{ise p}^e^r^m^itted^f^o^r^su^ch^classifⁱ^catioⁿ
^://wiki^as^{a n}^e^w^techⁿ^o^log^y^is^ex^ten^d^ed^b^y¹²
^h^ttp^m^o^nt^hs.
^creas^e^hos^p^itals^’^w^age^index^values^to^S^ecti^oⁿ^505.^T^h^{e Secretary}^is^requ^{ired to}^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^504.^T^h^{e Secretary}^w^o^u^l^d^b^e
^m^u^{ting patterns}^from^higher^es^tablis^h^an^application^proces^s^an^{d 3-}^y^ear^r^e^q^u^ir^ed^to^estab^lish^an^ap^p^licatioⁿ^p^r^o^cess
ⁿ^d^e^x^areas^.^Uⁿ^lⁱ^k^{e ot}^h^e^{r prov}ⁱ^d^ers^,^pay^m^en^{t adj}^u^s^t^m^eⁿ^t^{to recog}ⁿⁱ^{ze th}^{e ou}^t-^an^{d pay}^m^en^{t adj}^u^s^t^m^eⁿ^t^{to recog}ⁿⁱ^{ze th}^e
^P^S^h^o^sp^{itals m}^a^y^ap^p^l^y^to^th^{e Med}ⁱ^car^e^mⁱ^g^r^atioⁿ^o^f^h^o^sp^{ital em}^p^l^o^y^{ees w}^h^o^co^m^m^u^tin^g^p^a^tterⁿ^{s o}^f^h^o^sp^{ital em}^p^l^o^y^ees.
^raph^{ic C}^l^as^sⁱ^fⁱ^cation^R^e^vⁱ^ew^B^o^ard^resⁱ^{de in}^{a cou}ⁿ^t^y^an^{d w}^o^rkⁱⁿ^{a di}^f^f^e^ren^t^A^h^o^sp^ital^t^h^{at q}^u^alif^ied^f^o^r^su^ch^a
^GC^R^B^{) f}^o^{r reas}^sⁱ^gⁿ^m^en^{t to an}^oth^e^r^a^r^e^a^wⁱ^t^h^a^hi^ghe^r^w^a^geⁱⁿ^d^e^x.^A^ho^spⁱ^t^a^l^pay^m^en^{t adj}^u^s^t^m^eⁿ^t^w^oul^{d h}^a^v^e^av^erag^e
^h^{e MGC}^R^B^w^a^s^{created to}^th^{at receiv}^e^s^s^u^ch^{a pay}^m^en^{t adj}^u^s^t^m^eⁿ^t^h^o^u^r^ly^w^a^g^e^s^th^{at exceed th}^{e av}^erag^e
^ter^mⁱⁿ^e^w^h^eth^e^r^{a h}^o^sp^{ital sh}^o^u^ld^b^e^w^{ill b}^e^lo^catedⁱⁿ^a^q^u^a^lif^yⁱⁿ^g^co^uⁿ^t^y^th^at^w^a^g^e^s^of^th^{e area in}^w^h^ich^it^is^{located an}^d
^e^sigⁿ^a^ted^to^an^ar^ea^w^ith^w^h^ich^{it h}^a^s^m^eets^c^e^r^tain^cr^iterⁱ^{a in}^clu^dⁱⁿ^g⁽¹⁾^a^h^a^v^e^{at leas}^t¹⁰^%^of^its^em^ploy^ees^livⁱⁿ^g
^{e prox}ⁱ^mⁱ^t^y^f^o^{r pu}^rpos^es^of^u^sⁱⁿ^g^t^h^e^t^h^res^h^ol^{d of}ⁿ^o^l^e^s^s^t^h^aⁿ^10%^f^o^rⁱⁿ^oⁿ^e^o^r^m^o^r^e^a^r^e^a^s^t^h^a^t^ha^ve^hi^ghe^r^w^a^ge
^r^a^r^e^a^’^{s w}^a^geⁱⁿ^d^e^x.^A^ho^spⁱ^t^a^l^c^aⁿ^mⁱⁿⁱ^mu^m^o^u^t^-^mⁱ^gr^a^tⁱ^o^{n t}^o^a^hi^ghe^r^w^a^geⁱⁿ^dex^v^a^l^u^es^.^T^h^{e proces}^s^w^o^u^l^{d be bas}^e^d
^b^lⁱ^s^h^p^r^o^x^im^ity^to^th^{e n}^e^w^ar^{ea b}^yⁱⁿ^dex^{area or areas}^{, an}^d⁽²⁾^{a requ}^irem^en^t^on^th^{e MGC}^R^B^reclas^sⁱ^fⁱ^cation^proces^s
^m^en^tⁱⁿ^g^t^h^at^at^l^eas^t^50%^ofⁱ^t^s^th^{at th}^{e av}^erag^{e h}^o^u^r^ly^w^a^g^e^o^f^th^e^an^d^sch^e^d^u^{le w}^ith^r^e^sp^{ect to}^d^a^ta
^ploy^ees^resⁱ^{de th}^{ere. Oth}^e^{r cos}^t^criteria^h^o^sp^{itals in}^th^{e q}^u^alif^yⁱⁿ^g^co^uⁿ^t^y^eq^u^a^{ls o}^r^su^b^m^itted^.^Su^ch^an^ad^j^u^stm^eⁿ^t^w^o^u^l^d^b^e
^s^t^b^e^m^e^{t b}^e^f^o^r^e^{a h}^o^sp^{ital w}^{ill b}^e^ex^ceeds^th^e^av^erag^{e h}^o^u^r^ly^w^a^g^e^of^all^th^e^ef^f^ectiv^{e f}^o^{r 3 y}^ears^uⁿ^l^es^s^a^hos^pital

CRS-16
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^sⁱ^fi^e^d^{. If}^reclas^sⁱ^fⁱ^cation^is^g^r^an^ted,^h^o^s^p^italsⁱⁿ^th^{e area w}^h^e^r^{e th}^{e cou}ⁿ^t^y^is^w^ith^d^r^aw^{s o}^r^{elects to}^ter^mⁱⁿ^at^eⁱ^t^s
^a^g^eⁱⁿ^d^e^x^f^o^r^th^{e n}^e^w^ar^{ea w}^{ill b}^e^{located. T}^h^{e Secretary}^m^a^y^requ^ire^acu^te^pay^m^en^t^.^It^w^o^u^l^{d al}^s^o^{be ex}^em^pt^f^r^om
^{ed to calcu}^{late Medica}^r^e^’s^pay^m^en^{t f}^o^r^h^o^sp^{itals an}^d^o^t^h^e^r^h^o^sp^{itals as w}^e^{ll as}^cer^tain^b^u^d^g^{et n}^e^u^t^r^a^lity^r^e^q^u^ir^em^en^ts.
ⁱ^eⁿ^t^an^{d ou}^t^p^atⁱ^eⁿ^t^s^e^rvⁱ^ces^provi^ded^{critical acces}^s^h^o^s^pⁱ^t^als^{to s}^u^bm^{it data}
^th^{e h}^o^sp^ital.^reg^a^rdin^g^th^{e location}^of^th^{eir em}^plo^y^ees^’
^resⁱ^denc^e^{or th}^{e Secretary}^m^a^y^u^s^{e data}
^f^r^om^oth^e^{r s}^o^u^r^ces^{. A}^h^o^s^p^ital^th^at^receiv^e^s
^a^c^o^m^m^u^tⁱ^{ng w}^a^ge^a^d^j^u^st^m^eⁿ^tⁱ^s^no^t
^elig^ib^{le f}^o^r^r^eclassifⁱ^catioⁿⁱⁿ^to^an^o^t^h^e^r
^{area by}^th^{e MC}^GR^B^.^T^hⁱ^s^adj^u^s^t^m^eⁿ^t^is
^ex^em^p^t^f^r^o^m^cer^tain^b^u^d^g^{et n}^e^u^t^r^a^lity
^requⁱ^r^em^en^t^s^{. T}^h^{e t}^h^res^h^ol^ds^an^{d ot}^h^e^r
^q^u^alif^yⁱⁿ^g^cr^iterⁱ^{a f}^o^r^th^{e co}^m^m^u^tin^g^w^a^g^e
^adj^u^s^t^m^eⁿ^t^{are n}^o^{t s}^u^b^j^{ect to j}^u^dicial
ⁱ^{ki/CRS-RL32005}^revⁱ^ew^{. T}^h^{e prov}ⁱ^sⁱ^oⁿ^s^appl^y^t^o^di^s^c^h^a^rg^es
^g/w^on^{or af}^t^e^{r O}^c^t^{ober 1, 2004.}
^s^.or^r^m^it^ho^spit^a^l^{s w}ⁱ^t^h^mⁱ^ssing^c^o^st^S^ecti^oⁿ^407.^A^h^o^sp^{ital w}^{ill n}^o^{t b}^e^ab^le^to^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^414.^Be^giⁿⁿⁱⁿ^g^Jan^u^a^ry^1,^2004,
^le^ak^r^t^s^t^o^{be SCH}^s^{. SCHs ar}^e^h^o^s^p^itals^{be den}ⁱ^{ed treatm}^eⁿ^t^as^{a SC}^{H or receiv}^e^{a h}^o^s^pⁱ^t^a^l^w^o^u^l^{d n}^o^t^{be abl}^e^t^o^{be den}ⁱ^ed
^c^a^u^s^{e of}^f^actors^s^u^ch^as^is^olated^pay^m^en^{t as}^a^S^C^{H becau}^s^e^{data are}^treatm^eⁿ^t^as^{a SC}^{H or rec}^eⁱ^ve^pay^m^en^{t as}
^://wiki^c^a^tⁱ^oⁿ^,^w^e^a^t^h^e^r^c^oⁿ^d^itioⁿ^s^,^t^r^a^v^e^l^uⁿ^a^v^aⁱ^l^a^bl^{e f}^o^{r an}^y^cos^t^reportⁱⁿ^g^peri^od^a^SC^H^becau^s^e^{data are u}ⁿ^a^v^a^{ilable f}^o^{r an}^y
^h^ttpⁿ^d^itioⁿ^s^{, o}^r^ab^sen^{ce o}^f^o^t^h^e^r^h^o^spⁱ^t^a^ls,^du^{e to ch}^an^g^e^sⁱⁿ^o^w^ners^hⁱ^{p, ch}^an^g^e^sⁱⁿ^cos^t^reportⁱⁿ^g^p^e^rⁱ^{od du}^{e t}^o^ch^an^g^e^sⁱⁿ
^h^e^s^o^{le s}^o^u^r^{ce of}ⁱⁿ^patien^t^s^e^rv^ices^fⁱ^s^{cal in}^term^e^dⁱ^a^rⁱ^es^{, or oth}^e^r^o^w^ne^r^s^hi^p^,^c^h^a^nge^{s i}ⁿ^fi^s^c^a^l
^on^ably^av^ai^{lable in}^{a g}^e^og^raph^{ic area,}^ex^traordin^ar^y^circu^m^s^t^an^ces^{, s}^o^lon^g^asⁱⁿ^ter^m^ed^iarⁱ^{es, o}^r^o^t^h^e^r^ex^tr^ao^r^dⁱⁿ^ar^y
^o^{re th}^an³⁵^r^o^a^d^m^iles^data^f^r^om^{at leas}^{t on}^{e applicable bas}^e^cos^t^circu^m^s^t^an^ces^{, s}^o^lon^g^as^data^f^r^om^{at leas}^t
^an^oth^e^{r h}^o^s^p^{ital. A}ⁿ^SC^{H receiv}^e^s^reportⁱⁿ^g^peri^{od i}^s^av^ai^l^a^bl^{e. T}^h^{e prov}ⁱ^sⁱ^oⁿ^on^e^applⁱ^cabl^e^bas^e^cos^t^reportⁱⁿ^g^peri^odⁱ^s
ⁱ^g^h^er^o^f^th^{e f}^o^llo^wⁱⁿ^g^p^a^y^m^en^{t r}^a^tes:^applⁱ^e^s^t^o^cos^t^reportⁱⁿ^g^peri^ods^begⁱⁿⁿⁱⁿ^g^av^ailable.
^r^r^en^{t I}^P^P^S^b^a^{se p}^a^y^m^en^{t r}^a^{te, o}^r^its^on^{or af}^t^e^{r Jan}^u^a^ry^{1, 2004.}
^sp^ita^l-sp^e^cⁱ^fic^p^e^r^dⁱ^sc^ha^r^g^e^c^o^{sts fr}^o^m
^h^{er F}^Y^1982,^{1987 o}^r^{1996 u}^pdat^e^{d t}^o
^rren^t^y^{ear. T}^h^{e F}^Y^{1996 ba}^se^y^ear
^tioⁿ^wⁱ^l^l^b^e^f^u^lly^im^p^l^em^en^ted
ⁱⁿⁿⁱⁿ^gⁱⁿ^F^Y^2004.
^o^vⁱ^{de ho}^spit^a^l^{s w}ⁱ^t^h^da^t^a^oⁿ^pa^tⁱ^eⁿ^t^S^ecti^oⁿ^951.^T^h^e^Secretary^is^requ^{ired to}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^951.^T^h^{e Secretary}^w^o^u^l^d^arran^g^e
^{for D}^S^{H a}^d^ju^s^t^m^eⁿ^t^{. A}^h^o^sp^ital’^s^p^r^o^v^id^{e in}^f^o^r^m^atioⁿ^th^a^t^h^o^sp^{itals n}^eed^to^to^f^u^rⁿ^ishⁿ^ecessar^y^p^a^tⁱ^eⁿ^t^d^a^y
^m^en^ts^uⁿ^d^{er IP}^P^S^{are calcul}^a^ted^calcu^la^t^e^th^{e n}^u^m^{ber of}^{Medicaid patien}^tⁱⁿ^f^o^r^m^atioⁿ^f^o^r^th^{e Med}ⁱ^c^a^r^e^DSH
ⁱⁿ^g^a^f^o^r^m^u^l^{a th}^{at in}^clu^d^{es d}^a^{ta o}ⁿ^th^e^day^s^u^s^{ed in}^th^{e Medicare DSH pay}^m^en^t^co^m^p^u^t^atioⁿ^f^o^r^th^e^c^u^r^r^en^{t co}^{st r}^e^p^o^r^tin^g

CRS-17
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^m^b^e^r^o^f^to^{tal p}^a^tien^t^d^a^y^s^as^w^e^{ll as}^f^o^r^m^u^l^{a n}^o^{t later}^th^an¹^y^ear^a^f^t^e^r^y^ear.
^y^s^p^r^o^v^id^ed^to^th^o^s^{e e}^lig^ib^{le f}^o^r^en^actm^eⁿ^t^.
^{d to Medicare benef}ⁱ^ciaries
^o^r^e^ceiv^e^Su^pplem^en^{tal Secu}^rity
^com^e^.
ⁱ^t^ad^op^ti^on^{of n}^e^w^codⁱⁿ^g^s^t^aⁿ^d^a^rd^.^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^942(d⁾^.^T^h^e^new^co^dⁱ^ng
^{e Secretary}^is^requ^{ired to re}^l^y^on^th^e^stan^d^a^r^d^{s, I}ⁿ^terⁿ^atioⁿ^a^{l Classif}ⁱ^catioⁿ^o^f^th
^m^m^eⁿ^d^atioⁿ^s^f^r^o^m^t^h^e^N^a^tioⁿ^a^l^Dis^eas^es¹⁰^R^e^vⁱ^sⁱ^on^(ID^C^-^{10) cou}^l^{d be}
^m^m^{ittee o}ⁿ^{Vital an}^d^Health^Statistics^adopt^{ed w}ⁱ^t^hⁱⁿ^1-^y^ear^o^f^en^act^m^eⁿ^t
^C^V^H^S^{) bef}^o^{re adopt}ⁱⁿ^g^h^e^a^l^t^h^w^ith^ou^{t receiv}ⁱⁿ^g^{a recom}^m^eⁿ^d^ation^f^r^om
^o^rm^atⁱ^oⁿ^s^t^an^dards^an^{d codes}^.^NC^VHS.
^A^{O repor}^t^{on us}^{e of ex}^ternal^S^ecti^oⁿ^942(c).^GA^{O is r}^e^q^u^ir^ed^to^stu^d^y^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^942(c).^GA^{O w}^o^u^l^d^stu^d^y^w^h^ich
^{ta for I}^PPS^p^aym^en^ts^{. No}^p^r^o^v^isioⁿⁱⁿ^w^h^ich^ex^tern^{al data can}^{be c}^o^{llected in}^a^ex^tern^{al data can}^{be collected in}^a^s^horter
ⁱ^{ki/CRS-RL32005}^rren^{t law}^.^s^h^{orter tim}^{e f}^r^am^{e by}^C^M^S^t^o^u^s^{e in}^c^a^lcu^l^atin^g^I^P^P^S^p^a^y^m^en^{ts. GA}^{O m}^a^y^tim^{e f}^r^am^{e by}^C^M^{S to u}^s^{e in}^calcu^latin^g^IP^P^S^pay^m^en^ts^{. GA}^{O cou}^l^{d ev}^alu^a^te
^g/w^ev^alu^a^{te f}^easib^ility^an^d^ap^p^r^o^p^r^iaten^e^ss^o^f^f^easib^ility^an^d^ap^p^r^o^p^r^iaten^e^{ss o}^f^u^sⁱⁿ^g
^s^.or^u^sⁱⁿ^g^qu^arterly^s^a^m^p^les^{or s}^p^{ecial s}^u^rv^ey^s^qu^arterly^s^a^m^p^les^{or s}^p^eci^a^l^s^u^rv^ey^s^an^d
^le^ak^a^{nd w}^o^u^l^{d in}^clu^d^{e an}^an^aly^s^is^of^w^h^eth^e^r^w^o^u^l^{d in}^clu^d^{e an}^an^aly^s^is^of^w^h^eth^e^{r oth}^e^r
^://wiki^oth^e^{r ex}^ecu^tiv^{e ag}^en^cies^are^bes^t^s^u^{ited to}^co^{llect th}^{is in}^f^o^r^m^atioⁿ^.^T^h^e^r^e^p^o^r^t^is^d^u^e^e^x^e^c^u^tiv^{e ag}^en^cies^{are bes}^t^s^u^{ited t}^o^co^llect^th^isⁱⁿ^f^o^r^m^atioⁿ^.^T^h^{e r}^e^p^o^r^{t w}^o^u^l^d
^h^ttp^t^o^C^oⁿ^g^r^es^sⁿ^o^l^a^t^e^{r t}^h^an^O^c^t^{ober 1, 2004.}^b^e^d^u^e^to^Coⁿ^g^r^{ess n}^o^later^th^an^Octo^b^e^r¹^,
^2004.
^Cr^{itical A}^{ccess Ho}^sp^{ital Ser}^v^ices
^creas^e^paym^ents^{to CAHs}^.^Gen^e^r^a^lly^,^S^ecti^oⁿ^405(a).^Iⁿ^p^a^tien^t^,^o^u^tp^atien^t^,^an^d^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^405(a).^Iⁿ^p^a^tien^t^,^o^u^tp^atien^t^,^an^d
^s^h^o^s^p^{ital (C}^A^H^{) receiv}^e^s^co^v^e^r^e^d^sk^illedⁿ^u^r^sin^g^f^acility^ser^v^ices^co^v^e^r^e^d^sk^illedⁿ^u^r^sin^g^f^acility^ser^v^ices
^a^s^on^{able cos}^t^reim^bu^rs^em^en^{t f}^o^{r care}^p^r^o^v^id^ed^b^y^a^CA^{H in}^{its sw}ⁱⁿ^g^b^e^d^s^w^ill^provⁱ^d^{ed by}^{a C}^A^Hⁱⁿⁱ^t^s^s^wⁱⁿ^g^beds
^d^ered^to^{Medicare ben}^e^fⁱ^ciaries^.^C^A^Hs^{be rei}^m^bu^rs^{ed at}^101%^of^reas^on^abl^e^cos^t^s^w^o^u^l^{d be rei}^m^bu^rs^{ed at}^102%^o^f
^y^{elect eith}^{er a cos}^t^-^b^as^{ed h}^o^s^p^ital^o^f^s^e^rv^ices^f^u^rn^is^h^e^{d to Medicar}^e^reas^on^{able cos}^t^s^of^s^e^rv^ices^f^u^rn^is^h^e^{d to}
^tp^atien^t^ser^v^{ice r}^e^im^b^u^r^s^em^en^{t o}^r^an^all-^b^eⁿ^e^fⁱ^ciar^{ies. T}^h^{is p}^r^o^v^isioⁿ^ap^p^lies^to^M^e^{dicare ben}^e^fⁱ^ciaries^.^T^h^is^prov^is^ion
^s^iv^{e r}^a^t^e^w^h^ich^{is eq}^u^a^{l to}^a^cos^t^reportⁱⁿ^g^pe^rⁱ^ods^begⁱⁿⁿⁱⁿ^g^on^or^w^o^u^l^{d appl}^y^t^o^cos^t^reportⁱⁿ^g^peri^ods
ⁿ^ab^{le co}^st^r^e^im^b^u^r^s^em^en^{t f}^o^r^f^acility^af^t^e^{r Jan}^u^a^ry^{1, 2004.}^begⁱⁿⁿⁱⁿ^g^on^{or af}^t^e^{r O}^c^t^{ober 1, 2003.}

^r^vⁱ^ces^pl^u^s^115%^of^t^h^{e f}^{ee s}^c^h^e^dul^e
^m^en^t^f^o^{r prof}^es^sⁱ^on^al^s^e^rvⁱ^ces^.

CRS-18
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^inate^35-m^{ile requirem}^{ent for cos}^t^-^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^405(b⁾^.^T^h^e^r^e^q^uⁱ^r^em^en^{t th}^at^th^e^S^ecti^oⁿ^405(c⁾^.^T^h^{e 35-}^m^{ile requ}^irem^en^t
^{sed reim}^bursem^e^nt^o^f^CAH^CA^{H o}^r^th^{e r}^e^lated^en^tity^b^e^th^{e o}ⁿ^ly^w^o^ul^dⁿ^o^t^appl^y^t^o^{a prov}ⁱ^d^{er or s}^u^pplⁱ^e^r
^{bulance s}^ervices^{. A}^m^bu^lan^{ce s}^e^rv^ices^am^b^u^lan^{ce p}^r^o^v^id^er^w^ithⁱⁿ^{a 3}⁵^-^m^{ile d}^r^iv^e^of^am^b^u^l^aⁿ^{ce s}^e^rv^ices^w^h^{o is}^{a f}ⁱ^rs^t
ⁱ^d^e^d^by^{a C}^A^H^{or prov}ⁱ^d^{ed by}^anⁱⁿ^{order to receiv}^e^reas^on^able^c^o^s^t^respon^{der t}^o^em^erg^eⁿ^cⁱ^e^s^f^o^{r s}^e^rvⁱ^ces
^tity^th^at^{is o}^wⁿ^e^d^o^r^o^p^e^r^a^ted^b^y^a^CA^H^reim^bu^rs^em^en^{t f}^o^{r th}^e^am^bu^lan^ce^s^e^rv^ices^f^u^rⁿ^ish^e^d^af^ter^th^{e f}ⁱ^r^s^{t co}^st^r^e^p^o^r^tin^g
^{a reas}^on^{able cos}^t^basⁱ^s^an^{d n}^o^t^w^o^u^l^{d be dropped f}^o^{r s}^e^rvⁱ^ces^furⁿⁱ^s^h^e^d^peri^{od beg}ⁱⁿⁿⁱⁿ^g^af^t^e^{r t}^h^{e dat}^e^of
^bu^lan^ce^f^{ee s}^c^h^e^du^{le, if}^th^{e C}^A^{H or}^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005.}^en^actm^eⁿ^t^.
^tity^{is th}^{e o}ⁿ^ly^p^r^o^v^id^er^o^r^su^p^p^lⁱ^e^r^o^f
^bu^lan^{ce s}^e^rv^ices^th^{at is}^{located w}^ithⁱⁿ^a
^mⁱ^l^e^dri^v^{e of}^t^h^{e C}^A^H^.
^{pand paym}^{ent for em}^e^r^g^{ency room}^S^ecti^oⁿ^405(b⁾^.^T^h^{e p}^r^o^v^isioⁿ^ex^p^aⁿ^d^s^S^ecti^oⁿ^405(c).^R^e^im^bu^rs^em^en^{t f}^o^{r on}^-^call^S^ecti^oⁿ^405(b⁾^.^S^a^m^e^provⁱ^sⁱ^oⁿ^bu^t^w^o^u^l^d
^c^al^l^p^r^ovi^d^ers^{. B}^I^P^A^r^e^q^u^ir^ed^th^e^reim^bu^rs^em^en^t^of^on^-^{call em}^erg^eⁿ^c^y^room^em^erg^eⁿ^c^y^room^provⁱ^d^ers^w^o^u^l^{d be}^{be ef}^f^ectⁱ^v^{e Jan}^u^a^ry^{1, 2004.}
ⁱ^{ki/CRS-RL32005}^r^e^t^a^r^y^t^oⁱⁿ^clu^d^{e th}^{e cos}^t^s^of^p^en^s^a^tion^(an^d^{related cos}^t^s⁾^of^on^-^call^prov^iders^toⁱⁿ^c^l^u^d^{e n}^o^{t j}^u^s^t^em^erg^eⁿ^c^y^r^o^o^m^p^h^y^s^ician^s^b^u^{t also}^p^h^y^s^ic^ian^ex^pan^d^{ed to in}^clu^d^{e ph}^y^s^iciaⁿ^as^sⁱ^s^t^an^ts^,ⁿ^u^r^{se p}^r^a^c^titioⁿ^e^r^s^{, an}^d^clin^{ical n}^u^r^se
^g/w^erg^eⁿ^c^y^room^ph^y^s^ician^s^w^h^{o are n}^o^t^assistan^{ts, n}^u^r^se^p^r^actitioⁿ^e^r^s^{, an}^d^clin^ical^s^p^ecialis^ts^as^w^e^{ll as}^em^erg^e^nc^y^room
^s^.or^en^t^on^th^{e prem}^is^es^of^{a C}^A^H,^areⁿ^o^tⁿ^u^r^s^e^s^p^ecialis^ts^fo^r^th^{e cos}^t^s^as^s^o^ciated^ph^y^s^ician^s^f^o^{r cov}^e^{red Medicare s}^e^rv^ices
^le^ak^e^rw^is^{e f}^u^rn^is^hⁱⁿ^g^s^e^rv^ices^{, an}^{d are n}^o^t^w^ith^cov^e^{red Medicare s}^e^rv^ices^prov^ided^provⁱ^d^{ed beg}ⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005.}
^-^{call at an}^y^o^t^h^e^r^p^r^o^v^id^er^o^r^f^acility^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005.}
^://wiki^eⁿ^d^e^ter^mⁱⁿⁱⁿ^g^th^{e allo}^w^a^b^l^e^,
^h^ttp^on^{able cos}^t^o^f^ou^tpatien^t^C^A^H
^rv^ices^.
^creas^e^{critical acce}^s^s^hos^p^{ital (CAH)}^S^ecti^oⁿ^405(e).^A^CA^{H w}ⁱ^{ll b}^e^ab^{le to}^S^ectⁱ^oⁿ^405(a)^A^C^A^H^w^o^u^l^{d be abl}^e^t^o^S^e^c^tⁱ^oⁿ⁴⁰⁵^(f).^F^o^{r des}ⁱ^gⁿ^a^tⁱ^o^ns
^it^.^A^C^{AH is a lim}^ited^ser^v^ice^operat^e^u^p^t^o^{25 beds}^.^T^h^{e requ}ⁱ^r^em^en^t^operat^e^u^p^t^o^{25 s}^wⁱⁿ^g^beds^o^r^a^c^u^t^e^care^begⁱⁿⁿⁱⁿ^g^J^aⁿ^u^a^ry^{1, 2004, t}^h^{e S}^ecret^ary
^th^{at m}^u^{st p}^r^o^vⁱ^d^{e 2}⁴^-^h^o^u^r^t^h^a^t^on^l^y^{15 of}^t^h^{e 25 beds}^{be u}^s^{ed f}^o^r^beds^{, s}^u^bj^{ect to th}^{e 96-}^h^o^u^r^av^erag^e^len^g^t^h^w^o^u^l^{d s}^p^ecif^y^s^t^an^dards^f^o^{r es}^tablis^hⁱⁿ^g
^erg^eⁿ^c^y^s^e^rv^ices^an^{d operate a lim}^ited^acu^t^e^{care at}^an^y^tⁱ^m^{e i}^s^{dropped. T}^h^e^of^s^t^ay^f^o^{r acu}^te^{care patien}^t^s^.^T^h^e^se^a^s^oⁿ^{al v}^a^rⁱ^atioⁿ^sⁱⁿ^{a CA}^H’^{s p}^a^tien^t
^m^b^e^r^o^fⁱⁿ^p^a^tien^t^b^e^d^sⁱⁿ^w^h^ich^h^o^sp^ital^p^r^o^v^isioⁿ^ap^p^lies^to^CA^{H d}^e^sigⁿ^a^tioⁿ^s^requⁱ^r^em^en^t^t^h^at^on^l^y^{15 of}^t^h^{e 25 beds}^be^admⁱ^s^sⁱ^on^s^th^{at w}^o^u^l^{d j}^u^s^tif^y^{a f}ⁱ^v^e^-^b^ed
^s^can^a^v^erag^{e n}^o^m^o^{re th}^an^{96 h}^o^u^r^s^.^m^a^de^bef^o^re,^on^{, or af}^t^e^{r Jan}^u^a^ry^{1, 2004,}^u^s^{ed f}^o^r^a^c^u^{te care at an}^y^tim^{e w}^o^u^l^{d be}ⁱⁿ^cre^a^s^eⁱⁿ^t^h^{e n}^u^m^{ber of}^bedsⁱ^t^can
^A^{H is}^lⁱ^mⁱ^t^{ed to 15 acu}^te-^{care beds}^,^b^u^{t an}^y^electioⁿ^m^a^d^e^p^u^r^s^u^aⁿ^t^to^th^e^{dropped. T}^hⁱ^s^provⁱ^sⁱ^oⁿ^w^o^u^l^{d be}^m^aⁱⁿ^tain⁽^aⁿ^d^{still r}^e^tain^{its classif}ⁱ^cati^oⁿ
^t^can^h^a^v^e^an^ad^d^itioⁿ^a^{l 1}⁰^swⁱⁿ^g^b^e^d^s^r^e^g^u^l^atioⁿ^s^p^r^o^m^u^l^g^a^ted^to^im^p^l^em^en^{t th}^is^e^ffe^c^tⁱ^v^e^fo^r^d^e^si^gna^tⁱ^o^{ns m}^a^d^e^b^e^giⁿⁿⁱ^ng^as^a^C^A^H).^C^A^Hs^w^ith^s^wⁱⁿ^g^beds^w^o^u^l^d
^{e set u}^p^f^o^r^sk^illedⁿ^u^r^sin^g^f^acility^p^r^o^v^isioⁿ^w^{ill o}ⁿ^ly^ap^p^l^y^p^r^o^s^p^ectiv^ely^.^O^c^t^{ober 1, 2004.}^{be able}^{to u}^s^{e u}^p^{to 25 beds}^f^o^{r acu}^{te care}
^e^l^car^e.^W^h^{ile all 2}⁵^b^e^d^sⁱⁿ^a^CA^H^can^s^e^rv^ices^as^lon^g^asⁿ^o^m^o^{re th}^an^{10 beds}^at
^us^{ed as}^s^wⁱⁿ^g^beds^{, on}^l^y^{15 of}^t^h^{e 25}^aⁿ^y^tim^{e are u}^s^{ed f}^o^{r n}^oⁿ^-^acu^{te s}^e^rv^ices^.
^{be u}^s^{ed f}^o^{r acu}^{te care at an}^y^tim^e.^T^h^os^{e C}^A^H^s^wⁱ^t^h^s^wⁱⁿ^g^beds^t^h^at^m^a^de
^th^is^e^l^e^c^tioⁿ^w^o^u^l^dⁿ^o^{t b}^e^elig^ib^{le f}^o^r^th^e

CRS-19
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^fⁱ^v^e^-^b^{ed s}^eas^on^{al adj}^u^s^t^m^eⁿ^t^{. A}^C^A^H
^wⁱ^t^h^s^wⁱⁿ^g^beds^t^h^at^el^ect^s^t^o^operat^e^{15 of}
ⁱ^t^s^{25 beds}^as^acu^t^e^{care beds}^w^o^u^l^{d be}
^elig^ib^{le f}^o^r^th^{e f}ⁱ^v^e^-^b^ed^s^e^a^s^oⁿ^a^l
^adj^u^s^t^m^eⁿ^t^.
^{thorize periodic in}^terim^paym^ents^f^o^r^S^ecti^o^{n 405(c).}^Aⁿ^elig^ib^{le CA}^{H w}^{ill b}^e^S^ecti^oⁿ^405(d⁾^.^Star^tin^g^w^ith^p^a^y^m^en^ts^S^ecti^oⁿ^405(d⁾^.^S^a^m^e^provⁱ^sⁱ^oⁿ^bu^t^w^o^u^l^d
^{ible CAH}^s^{. Elig}^ib^le^h^o^sp^itals,^sk^illed^ab^{le to}^r^e^c^e^iv^{e p}^a^y^m^en^{ts m}^a^d^e^oⁿ^{a P}^I^P^m^a^{de beg}ⁱⁿⁿⁱⁿ^g^Jan^u^a^r^y^{1, 2005, an}^{be ef}^f^ectⁱ^v^{e Jan}^u^a^ry^{1, 2004. A}^l^s^o^{, t}^h^e
^r^sin^g^f^{acilities, an}^d^h^o^sp^{ices w}^h^ich^m^eet^b^a^{sis f}^o^r^{its in}^p^a^tien^t^ser^vⁱ^c^{es. T}^h^e^elig^ib^{le CA}^{H w}^o^u^l^d^b^e^ab^{le to}^r^eceⁱ^v^e^Secretary^w^o^u^l^{d be requ}^{ired to dev}^e^lop
^requ^ir^em^en^ts^receiv^e^Medicare^Secr^etar^y^{is r}^e^q^u^ir^ed^to^d^e^v^e^lo^p^alterⁿ^ativ^e^pay^m^en^t^s^m^a^de^on^{a PIP bas}ⁱ^s^f^o^{r i}ⁿ^patⁱ^eⁿ^t^alterⁿ^ativ^{e m}^e^th^o^d^s^b^a^s^e^d^oⁿ^th^e
^terim^pay^m^en^ts^(P^IP^{) ev}^ery²^m^e^th^o^d^s^f^o^r^th^{e tim}ⁱⁿ^g^o^f^P^I^P^p^a^y^m^en^{ts to}^s^e^rv^ices^.^ex^p^eⁿ^d^itu^r^e^{s o}^f^t^h^{e h}^o^sp^{ital f}^o^r^th^{ese P}^I^P
^s^;^th^es^{e pa}^y^m^en^ts^{are bas}^e^{d on}^th^{ese CA}^{Hs. T}^h^{is p}^r^o^v^isioⁿ^ap^p^{lies to}^pay^m^en^t^s^.
^tⁱ^m^a^t^e^d^a^nnua^l^c^o^st^{s w}ⁱ^t^h^o^u^t^r^e^g^a^r^d^t^o^pay^m^en^t^s^m^a^{de on}^{or af}^t^e^{r Ju}^l^y^{1, 2004.}
ⁱ^{ki/CRS-RL32005}^ubmⁱ^s^sⁱ^on^ofⁱⁿ^di^vⁱ^du^al^cl^ai^m^s^{. A}^t^d^o^f^th^{e y}^ear^{, a settlem}^eⁿ^t^{is m}^a^d^e^to
^g/wⁿ^t^f^o^{r an}^y^dif^f^e^ren^{ce betw}^een^th^e
^s^.or^tim^{ated P}^I^P^pay^m^eⁿ^t^an^{d th}^{e actu}^a^l
^le^ak^o^uⁿ^t^o^w^ed^{. A}^CA^{H is}ⁿ^o^t^elig^ib^{le f}^o^r
^{P pa}^y^m^eⁿ^t^s^.
^://wiki
^h^ttp^beds^{in dist}^inct^-^p^a^r^t^unit^s^f^r^o^m^S^ecti^oⁿ⁴⁰⁵^(g).^A^C^A^{H can}^es^tablis^h^a^S^ecti^oⁿ^405(g⁾^.^T^h^{e Secretary}^w^o^u^l^{d n}^o^t^N^o^provⁱ^sⁱ^oⁿ^.

^{bed co}^unt^B^e^d^sⁱⁿ^dⁱ^stin^ct-^p^ar^t^dⁱ^stin^{ct p}^a^r^t^p^s^y^c^hⁱ^atrⁱ^c^o^r^r^e^h^a^b^ilitatioⁿ^{be able to cou}ⁿ^t^an^y^bedsⁱⁿ^{a dis}^tin^ct-^p^art
^illedⁿ^u^r^sin^g^f^acility^uⁿ^{its d}^oⁿ^o^{t c}^o^uⁿ^t^uⁿ^{it th}^{at m}^eets^th^{e applicable requ}^irem^en^ts^p^s^y^c^hⁱ^atrⁱ^{c o}^r^r^e^h^a^b^ilitatioⁿ^uⁿ^{it o}^p^e^r^a^ted
^a^r^d^th^{e C}^A^H^b^e^d^lim^{it. B}^e^d^sⁱⁿ^fo^{r s}^u^ch^beds^{. If}^t^h^{e u}ⁿⁱ^t^s^{do n}^o^t^m^e^e^t^b^y^th^{e en}^tity^seekⁱⁿ^g^to^b^eco^m^e^a^CA^{H f}^o^r
^ct-^p^ar^{t p}^s^y^c^hⁱ^atrⁱ^{c o}^r^r^e^h^a^b^ilitatioⁿ^th^es^e^requ^irem^en^ts^du^rin^g^{a cos}^t^reportin^g^desi^gn^atⁱ^oⁿ^s^begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1, 2003.}
^{its o}^p^e^r^a^ted^b^y^an^en^tity^seekⁱⁿ^g^to^p^e^rⁱ^o^d^,^th^enⁿ^o^Medⁱ^car^e^p^a^y^m^en^{t w}^{ill b}^e^T^h^{e to}^{tal n}^u^m^b^e^r^o^f^b^e^d^sⁱⁿ^th^ese^dⁱ^stin^ct-
^m^e^{a CA}^{H co}^uⁿ^t^to^w^a^r^d^th^{e b}^e^d^lim^it.^m^a^d^e^to^th^{e CA}^{H f}^o^r^ser^v^{ices f}^u^rⁿ^ish^e^dⁱⁿ^{part u}ⁿ^its^w^o^{uld n}^o^{t be able to ex}^{ceed 25.}
^th^{e u}ⁿ^{it d}^u^rⁱⁿ^g^th^{e p}^e^rⁱ^o^dⁱⁿ^q^u^es^tⁱ^oⁿ^.^A^CA^{H w}^o^u^l^d^b^e^ab^{le to}^estab^lish^{a su}^ch^a
^P^a^y^m^en^{ts f}^o^r^ser^v^{ices p}^r^o^v^id^edⁱⁿ^th^ese^dⁱ^stin^ct-^p^ar^{t u}ⁿ^it.
^uⁿ^its^w^{ill eq}^u^a^{l p}^a^y^m^en^{ts th}^{at ar}^e^m^a^d^e^oⁿ
^{a pros}^pectⁱ^v^{e pay}^m^en^t^basⁱ^s^t^o^di^s^tⁱⁿ^ct^part
^uⁿ^{its o}^f^sh^o^r^{t ter}^m^g^eⁿ^e^r^a^{l h}^o^sp^{itals. T}^h^e
^bedsⁱⁿ^t^h^e^di^s^tⁱⁿ^ct^part^ps^y^c^hⁱ^at^ri^{c or}
^r^e^h^a^b^ilitatioⁿ^uⁿ^{its w}^{ill n}^o^{t co}^uⁿ^t^to^w^a^r^d
^th^{e CA}^{H b}^e^d^lim^{it. T}^h^{e to}^{tal n}^u^m^b^e^r^o^f
^b^e^d^sⁱⁿ^th^{ese d}ⁱ^stin^{ct p}^a^r^t^uⁿ^{its can}ⁿ^o^t

CRS-20
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^ex^ceed¹⁰^.^T^h^{e p}^r^o^v^isioⁿ^w^ill^ap^p^l^y^to^co^st
^reportⁱⁿ^g^peri^ods^s^t^artⁱⁿ^g^O^c^t^{ober 1, 2004}
^a^{blish CAH}^im^p^r^o^v^e^m^e^nt^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^415.^T^h^{e Secretar}^y^w^o^u^l^d^b^e^N^o^provⁱ^sⁱ^oⁿ^.
^o^nst^r^a^t^io^{n pro}^g^r^a^m^.^No^p^r^o^v^isioⁿⁱⁿ^r^e^q^u^ir^ed^to^estab^lish^{a b}^u^d^g^{et n}^e^u^t^r^a^l⁵^-
^rren^{t law}^.^y^ear^CA^{H d}^e^m^oⁿ^s^tr^atioⁿ^p^r^o^g^r^a^mⁱⁿ^f^o^u^r
^areasⁱⁿ^c^l^udⁱⁿ^g^Kan^s^as^an^{d Nebras}^k^a^to
^{test v}^a^rⁱ^o^u^{s m}^e^th^o^d^s^to^im^p^r^o^v^{e th}^{e CA}^H
^prog^ram^.^S^e^rvⁱ^ces^w^o^u^l^{d be pai}^d^ei^t^h^er^on
^th^{e b}^a^{sis o}^f^its^r^e^a^s^oⁿ^ab^{le co}^{sts (}^w^ith^o^u^t
^reg^a^{rd to cu}^s^t^om^ary^ch^arg^e^s⁾^or^usⁱⁿ^g^th^e
^r^e^lev^aⁿ^t^P^P^S^f^o^r^th^o^s^{e ser}^v^{ices. I}ⁿ^th^is
ⁱⁿ^s^t^an^ce,^reas^on^{able cos}^t^reim^bu^rs^em^en^t^of
ⁱ^{ki/CRS-RL32005}^cap^{ital w}^o^u^l^dⁱⁿ^clu^d^{e a r}^e^tu^rⁿ^oⁿ^eq^u^ity^pay^m^en^t^of^150%^of^t^h^{e av}^erag^{e rat}^e^of
^g/wⁱⁿ^ter^e^{st p}^a^id^b^y^th^e^Ho^sp^ital^Iⁿ^su^r^aⁿ^ce⁽^H^I⁾
^s^.or^T^r^ust^Fund^.
^le^ak
^o^dif^y^CAH^s’^billing^requirem^ent^s^f^o^r^S^ecti^oⁿ^405(d⁾^{. T}^h^{e req}^u^irem^en^{t th}^{at all}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^405(e).^Th^e^S^e^cretar^y^w^o^u^l^dⁿ^o^t
^://wikiⁱ^{cian s}^ervices^.^A^s^s^p^ecifⁱ^{ed by}^p^h^y^s^ician^s^o^r^p^r^actitioⁿ^e^r^s^p^r^o^v^idⁱⁿ^g^b^e^ab^{le to}^r^e^q^u^ir^{e th}^at^a^{ll p}^h^y^s^ician^s
^h^ttp^aⁿ^{ced Bu}^dg^et^R^e^fⁱⁿ^e^m^eⁿ^t^A^c^t^of¹⁹⁹⁹^ser^v^ice^sⁱⁿ^{a CA}^{H assig}ⁿ^th^eir^b^illin^g^p^r^o^v^idⁱⁿ^g^ser^v^{ices in}^{a CA}^{H assig}ⁿ^th^eir
^B^R^A⁾^{, C}^A^Hs^can^elect^t^o^{be paid f}^o^r^rⁱ^g^h^t^{s to}^th^e^en^tityⁱⁿ^o^r^d^e^r^f^o^r^th^{e CA}^{H to}^b^illin^g^rⁱ^g^h^t^{s to}^th^{e en}^tityⁱⁿ^o^r^d^e^r^f^o^r^th^e
^tp^atien^t^ser^vⁱ^c^e^s^u^sⁱⁿ^g^c^o^s^t^-^b^ased^{be abl}^e^t^o^{be pai}^d^115%^o^f^t^h^{e f}^e^e^C^A^H^t^o^{be abl}^e^t^o^{be pai}^d^oⁿ^t^h^e^basⁱ^s^of
^b^u^r^s^em^en^{t f}^o^r^{its f}^acility^f^{ee an}^d^at^s^c^h^e^du^l^e^canⁿ^o^t^{be i}^m^pos^{ed. H}^o^w^e^v^e^{r, a}^115%^of^t^h^{e f}^{ee s}^c^h^e^d^u^l^e^f^o^{r t}^h^e
^of^t^h^{e f}^{ee s}^c^h^e^d^u^l^e^f^o^{r prof}^es^sⁱ^on^al^CA^{H w}^{ill n}^o^{t receiv}^e^p^a^y^m^en^{t b}^a^s^e^d^oⁿ^prof^es^sⁱ^on^al^s^e^rvⁱ^ces^provⁱ^d^{ed by}^t^h^e
^vⁱ^c^e^s^o^t^h^e^r^w^{ise in}^clu^d^ed^w^ithⁱⁿ^its^115%^of^t^h^{e f}^{ee s}^c^h^e^du^l^e^fo^{r an}^y^ph^y^sⁱ^cⁱ^aⁿ^s^{. H}^o^w^e^ve^r^,^{a C}^A^H^w^o^u^l^{d n}^o^t
^tpatien^t^{critical acces}^s^ho^s^p^{ital s}^e^rv^icesⁱⁿ^dⁱ^vⁱ^d^u^{al w}^h^o^d^o^e^{s n}^o^{t assig}ⁿ^b^illin^g^receiv^e^s^u^ch^pay^m^en^{t f}^o^{r an}^y^ph^y^s^ician
^{r cos}^t^reportⁱⁿ^g^peri^ods^s^t^artⁱⁿ^g^O^c^t^ober^rⁱ^g^h^t^{s to}^th^{e CA}^H.^T^h^{is p}^r^o^v^isioⁿ^ap^p^lies^w^h^o^dⁱ^dⁿ^o^{t as}^sⁱ^gⁿ^b^illin^g^rⁱ^g^h^t^{s to}^th^e
^t^o^c^o^s^t^report^peri^ods^s^t^artⁱⁿ^g^on^{or af}^t^e^r^CA^H^.

^Ju^l^y^{1, 2004 ex}^cept^f^o^{r t}^h^ose^C^A^H^s^t^h^at
^h^a^v^e^already^elected^pay^m^en^t^f^o^{r ph}^y^s^ician
^s^e^rvⁱ^ces^on^t^hⁱ^s^basⁱ^s^bef^o^{re N}^o^v^e^m^b^{er 1,}
^{2003; t}^hⁱ^s^prov^is^ion^w^{ill apply}^{to th}^os^e
^C^A^H^s^s^t^artⁱⁿ^g^f^o^{r cos}^t^reportⁱⁿ^g^peri^ods^on
^{or af}^t^e^{r Ju}^l^y^{1, 2003.}

CRS-21
ⁱ^{on and Current L}^a^w^Des^cription^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the}^Senate)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
ⁱ^mⁱⁿ^{ate s}^t^{ate au}^th^ori^t^{y to w}^aⁱ^v^{e C}^A^H^S^ecti^oⁿ^405(h⁾^{. T}^h^e^S^t^a^t^e^w^{ill n}^o^loⁿ^g^e^r^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.
^{ileage requirem}^ent^s^.^Cu^r^r^eⁿ^tly^{, to}^be^{able to w}^a^iv^{e th}^{e m}^ileag^{e s}^t^an^dards^an^d
^alif^y^{as a CA}^{H, th}^e^r^u^r^a^{l, f}^o^r^-^p^r^o^f^it,^d^e^sigⁿ^a^{te a f}^acility^seekⁱⁿ^g^to^b^eco^m^e^a
ⁿ^p^r^o^f^{it, o}^r^p^u^b^{lic h}^o^sp^{ital m}^u^{st b}^e^C^A^{H as}^{a n}^eces^s^a^r^y^prov^{ider of}^{care af}^ter
^o^{re th}^an³⁵^m^iles^f^r^om^an^oth^e^r^J^aⁿ^u^a^ry^{1, 2004. A}^f^acility^desⁱ^gⁿ^a^{ted as}
^sp^ita^l^o^r¹⁵^m^{iles in}^ar^{eas w}^ith^C^A^H^bef^o^re^Jan^u^a^ry^{1, 2006 an}^{d cert}ⁱ^fⁱ^e^d
^uⁿ^t^ain^o^u^s^terrain^{or th}^os^{e w}^h^{ere on}^ly^{as a n}^ecessar^y^p^r^o^v^id^er^o^f^car^{e w}^{ill b}^e^ab^le
^d^ary^roads^{are av}^ail^a^{ble. T}^h^es^e^r^e^tain^su^ch^d^e^sigⁿ^a^tioⁿ^.
^{e s}^t^an^dards^m^a^y^be^w^a^iv^{ed if}^th^e
^sp^{ital h}^a^{s b}^een^d^e^sigⁿ^a^te^d^b^y^th^{e State}
^{a n}^eces^s^a^ry^prov^{ider of}^h^ealth^care.
^Oth^e^r^Ho^sp^itals
ⁱ^{ki/CRS-RL32005}^s^e^{ntial rura}^l^h^o^s^pⁱ^t^al^category.^e^r^a^lly^{, a}^h^o^sp^{ital d}^e^sigⁿ^a^ted^{as a CA}^H^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^o^{n 403.}^Th^e^d^e^fⁱⁿ^itioⁿ^o^f^CA^H^h^o^s^pⁱ^t^a^l^an^d^s^e^rvⁱ^ces^w^o^u^l^{d be am}^en^{ded t}^o
^g/w^em^{pt f}^r^om^IP^P^S^an^{d r}^e^ceiv^e^s^ad^d^an^essen^{tial r}^u^r^a^{l h}^o^sp^{ital. A}ⁿ^elig^ib^le
^s^.or^on^{able, cos}^t^-^b^as^{ed reim}^bu^rs^em^en^{t f}^o^r^ho^spⁱ^t^a^l^w^o^u^l^{d appl}^y^f^o^{r s}^u^c^h^a
^le^ak^d^{ered to Medicare ben}^e^fⁱ^ciaries^.^clas^sⁱ^fⁱ^cation^,^h^a^v^e^m^o^{re th}^an²⁵^lⁱ^cen^s^e^d
^://wiki^rtain^acu^{te g}^eⁿ^e^{ral h}^o^s^p^ita^l^s^receiv^e^ecial^treatm^eⁿ^t^uⁿ^d^{er IP}^P^S^{, particu}^l^arly^acu^{te care beds}^{, an}^{d be located i}ⁿ^a^r^u^ral^{area as}^defⁱⁿ^e^{d by}^IP^P^S^.^T^h^{e Secretary}
^h^ttp^s^{e f}^acilitiesⁱ^d^eⁿ^tif^ied^{as iso}^l^ated^o^r^w^o^u^l^d^h^a^v^e^to^d^e^ter^mⁱⁿ^{e th}^{at th}^e^clo^s^u^r^e^o^f
^{tial h}^o^sp^{itals p}^r^im^ar^ily^lo^catedⁱⁿ^th^{is h}^o^sp^{ital w}^o^u^l^d^sigⁿⁱ^fⁱ^can^tly^dⁱ^mⁱⁿⁱ^sh
^{ral areas}^{, in}^clu^dⁱⁿ^g^R^R^C^s^an^{d SC}^Hs^.^th^{e ab}^ilit^y^o^f^b^eⁿ^e^fⁱ^ciar^{ies to}^o^b^t^ain
^essen^tial^h^e^a^lth^car^{e ser}^v^{ices b}^a^sed^oⁿ
^cer^tain^cr^iterⁱ^{a. Su}^ch^h^o^sp^{itals w}^o^u^l^dⁿ^o^t
^{be able to ch}^an^g^e^s^u^ch^clas^sⁱ^fⁱ^cation^an^d
^w^o^u^l^{d n}^o^{t be able to be treated as}^{a SC}^H^,
^Medi^c^a^{re depen}^d^en^t^h^o^s^pⁱ^t^a^l^{or R}^R^C
^uⁿ^d^{er IPPS}^an^{d w}^o^u^l^{d be rei}^m^bu^rs^ed
^102%^ofⁱ^t^s^reas^on^abl^e^cos^t^s^f^o^{r i}ⁿ^p^a^tⁱ^en^t
^aⁿ^d^o^u^t^p^a^tⁱ^e^nt^se^r^vⁱ^c^e^s^b^e^giⁿⁿⁱ^ng^O^c^t^o^b^e^r
^1,^{2004. Ben}^e^fⁱ^ci^ary^cos^t^-^s^h^a^riⁿ^g^am^ouⁿ^t^s
^w^o^u^l^dⁿ^o^{t b}^e^af^f^ected^an^d^r^e^q^u^ir^ed^b^illin^g
^f^o^{r s}^u^ch^s^e^rv^ices^w^o^u^l^{d n}^o^{t be w}^a^iv^ed.

CRS-22
Allied Health and Graduate Medical Education Payments.
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^y^ho^spit^a^l^{s f}^o^r^t^r^aⁱ^ning^c^o^st^{s o}^f^N^o^provⁱ^sⁱ^oⁿ^.^Dⁱ^s^c^u^s^sⁱ^on^of^con^g^r^es^sⁱ^on^al^S^ecti^oⁿ^408.^Begⁱⁿⁿⁱⁿ^g^O^c^t^ober^1,^2004,^N^o^provⁱ^sⁱ^oⁿ^.
^yc^ho^l^ogi^s^t^s^{. Medicare pay}^s^h^o^s^p^italsⁱⁿ^ten^t^r^e^g^a^r^dⁱⁿ^g^th^{is p}^a^y^m^en^t^can^b^e^f^o^uⁿ^d^Medicare^w^o^u^l^{d reim}^bu^rs^{e its}^s^h^{are of}^th^e
^{r its}^s^h^{are of}^direct^cos^t^s^as^s^o^{ciated w}^ith^on^{p. 276 of}^t^h^{e C}^oⁿ^f^eren^{ce R}^e^port^reas^on^{able cos}^t^s^of^appro^v^e^d^edu^cation
^{ed h}^o^s^pⁱ^t^a^l^-^bas^e^{d t}^r^aiⁿⁱⁿ^g^prog^ram^s^activ^ities^o^f^p^s^y^c^h^o^lo^gⁱ^{sts u}ⁿ^d^er^th^e^allied
^{r n}^u^r^s^e^s^an^{d certain}^oth^e^{r all}ⁱ^e^{d h}^ealth^h^eal^t^h^prof^es^sⁱ^on^al^t^r^aiⁿⁱⁿ^g^provⁱ^sⁱ^oⁿ^s^.
^o^f^es^sⁱ^on^al^sⁱⁿ^cl^udⁱ^ngⁱ^nha^l^a^tⁱ^oⁿ
^ap^ists,ⁿ^u^r^{se an}^esth^{etists, o}^ccu^p^a^tioⁿ^a^l
^{d ph}^y^s^{ical th}^erapis^ts^.^M^e^{dicare does}
^{t pay}^f^o^{r s}^u^ch^cos^t^s^a^s^s^o^{ciated w}^ith
^y^c^ho^l^o^gi^st^{s’ t}^r^aⁱⁿⁱ^ng.
^creas^e^{initial res}ⁱ^d^{ency period for}^S^ectⁱ^oⁿ^712.^T^h^{e b}^{ill clar}^if^{ies th}^at^S^ecti^oⁿ^410.^T^h^{e Secretary}^w^oul^{d be}^N^o^provⁱ^sⁱ^oⁿ^.
ⁱ^{ki/CRS-RL32005}^{. Medicare cou}ⁿ^t^s^resⁱ^den^t^s^h^ei^{r i}ⁿⁱ^tⁱ^al^resⁱ^den^c^y^peri^{od (t}^h^e^l^e^s^s^e^r^C^oⁿ^g^r^es^sⁱⁿ^ten^d^{ed to prov}^{ide an}^ex^ception^to^th^{e in}^{itial r}^e^sid^eⁿ^c^y^p^e^rⁱ^o^d^f^o^r^g^e^rⁱ^atrⁱ^c^requⁱ^r^{ed t}^o^prom^ul^gat^eⁱⁿ^t^e^ri^m^fⁱⁿ^a^l^reg^u^l^ation^s^af^{ter no}^{tice an}^{d com}^m^eⁿ^t^th^at
^g/w^t^h^{e m}ⁱⁿⁱ^m^u^mⁿ^u^m^{ber of}^y^ears^requⁱ^r^ed^f^e^llow^s^{hip prog}^ram^s^{to accom}^m^odate^w^o^u^l^d^estab^lish^f^u^{ll GME p}^a^y^m^en^{t f}^o^r²
^s^.or^r^b^o^a^r^d^elig^ib^ilityⁱⁿ^th^e^p^h^y^s^ician^’^s^prog^ram^s^t^h^at^requⁱ^r^{e 2 y}^ears^of^t^r^aiⁿⁱⁿ^g^t^o^y^ear^s^as^{a 2}^-^y^earⁱⁿ^{itial r}^e^sid^eⁿ^c^y^p^r^o^g^r^a^m
^le^ak^eci^al^t^y^{or 5}^y^ears⁾^as^{1.0 F}^T^{E. R}^e^sⁱ^den^t^sⁱⁿ^itially^b^eco^m^e^b^o^a^r^d^elig^ib^{le in}^th^e^{for cert}^aⁱⁿ^g^e^ri^at^ri^{c t}^r^aiⁿⁱⁿ^g^prog^ram^s
^://wiki^o^s^e^t^r^aⁱⁿⁱ^{ng ha}^s^e^x^t^e^nd^e^d^b^e^y^o^nd^t^h^eⁱ^r^e^sid^eⁿ^c^y^p^e^rⁱ^o^d^co^uⁿ^t^{as 0}^.⁵^F^T^E^.^g^e^{riatric s}^p^ecia^l^ty^{. T}^h^{e Secretary}^is^r^e^q^u^ir^ed^to^p^r^o^m^u^l^g^a^t^eⁱⁿ^terⁱ^m^fⁱⁿ^a^l^ef^f^ectiv^{e f}^o^{r cos}^t^rep^o^rtin^g^periods^begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1, 2003.}
^h^ttpⁱ^atrⁱ^{cs is a su}^b^s^p^e^cⁱ^a^l^ty^o^f^f^a^m^ily^r^e^g^u^l^atioⁿ^s^coⁿ^s^isten^t^w^ith^th^{is ex}^p^r^essed
ⁱⁿ^tern^{al m}^e^dicin^e^an^{d ps}^y^c^hⁱ^atry^.ⁱⁿ^ten^t^af^terⁿ^o^{tice an}^d^su^b^j^{ect to}^p^u^b^lic
^y^{ear f}^e^l^l^o^w^s^hⁱ^{p i}^s^requⁱ^r^{ed f}^o^r^co^m^m^eⁿ^t^{. T}^h^{e r}^e^g^u^l^atioⁿ^s^w^{ill b}^e^ef^f^ectiv^e
^r^tif^icatioⁿⁱⁿ^g^e^rⁱ^atrⁱ^{cs, f}^o^llo^wⁱⁿ^g^an^f^o^{r cos}^t^reportⁱⁿ^g^p^e^ri^ods^on^{or af}^t^e^r
^e^sid^eⁿ^c^yⁱⁿ^oⁿ^{e o}^f^th^o^s^{e th}^r^ee^ar^eas.^O^c^t^{ober 1, 2003.}
^creas^e^{indirect m}^e^{dical education}^S^ecti^oⁿ^502.^F^r^om^A^p^ri^l¹^,²⁰⁰⁴^uⁿ^tⁱ^l^S^ecti^oⁿ^418.^T^h^{e I}^M^{E m}^u^l^tⁱ^p^lierⁱⁿ^N^o^provⁱ^sⁱ^oⁿ^.

^E^{) p}^aym^en^ts^.^A^h^o^sp^ital’^{s I}^M^E^Septem^{ber 30, 2004,}^th^e^{IME m}^u^{ltiplier is}^F^Y^{2004 an}^{d i}ⁿ^F^Y^{2005 w}^o^u^l^{d b}^e^1.36;
^m^en^tⁱ^s^ba^se^d^on^{a percen}^t^a^g^e^add-^on^equ^a^l^t^o^1.47;^du^riⁿ^g^FY^{2005, t}^h^{e IME}^th^{e m}^u^ltip^lⁱ^e^r^w^o^u^l^{d be 1.355 in}^FY2006
^P^P^S^r^a^{te th}^a^t^{is estab}^lish^e^d^b^y^a^m^u^ltipli^e^r^is^{1.42; du}^rin^g^{FY2006, th}^e^andⁱⁿ^s^u^bs^equ^eⁿ^t^y^ears^.^T^h^is^w^o^u^l^d
^m^p^licated^c^u^r^v^ilin^ear^f^o^r^m^u^l^{a th}^at^{IME m}^u^{ltiplier is}^{1.37; du}^rin^g^{FY2007, th}^e^provⁱ^d^e^an^{IME adj}^u^s^t^m^eⁿ^t^of^5.508%^f^o^r
^rren^tly^prov^ides^{a pay}^m^en^{t inc}^r^e^a^s^e^of^I^M^{E m}^u^ltⁱ^p^lier^{is 1}^.³²^;^an^d^,^star^tin^g^each^{10% in}^creas^eⁱⁿ^a^h^o^s^p^ital’^s^IR^B^ratio
^im^ately^{5.5% f}^o^{r each}^{10% in}^creas^e^{October 1, 2007, th}^e^I^M^{E m}^u^{ltiplier is}^f^o^r^F^Y²⁰⁰⁴^an^{d F}^Y^{2005. T}^hⁱ^s^ch^an^g^e^h^a^s
^{e h}^o^sp^ital’^sⁱⁿ^terⁿ^an^d^r^e^sid^eⁿ^t^-^t^o^-^b^e^d^eq^u^a^{l to}¹^.³⁵^.^T^h^{is p}^r^o^v^isioⁿ^ap^p^{lies to}^been^proj^{ected to}ⁱⁿ^c^r^eas^{e pay}^m^en^ts^to
^B^{) rat}ⁱ^o^{. T}^h^{e s}^t^at^u^t^ory^f^o^rm^ul^{a i}^s^di^s^c^h^a^rg^es^on^{or af}^t^e^{r A}^p^ri^l^{1, 2004.}^teachⁱⁿ^g^h^o^s^p^itals^by^$300^m^illion^ov^er¹⁰
^ltip^lied^b^y^{a h}^o^sp^ital’^{s b}^a^{se p}^a^y^m^en^t^y^ears^.

CRS-23
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^e^f^o^{r each}^{Medicare dis}^c^h^a^rg^{e to}
^e^rmⁱⁿ^e^t^h^{e IME pay}^m^en^t^s^:^{1.35 X}^[(1+^0.⁴⁰⁵
^B)^-^{1]. T}^h^{e m}^u^l^tⁱ^plⁱ^e^{r of}^1.35
^es^th^{e lev}^e^{l of}^th^{e IME adj}^u^s^t^m^eⁿ^t
^t^h^{e ex}^istin^g^tar^g^{et lev}^e^{l o}^f⁵^.⁵^%^.
^ngr^e^{ss ha}^{s p}^e^rⁱ^o^dⁱ^c^a^l^l^y^c^h^a^nge^d^t^h^e
^ltip^lier^to^d^ecr^{ease o}^rⁱⁿ^cr^{ease I}^M^E
^m^en^ts^{to teach}ⁱⁿ^g^h^o^s^p^itals^.
^unt^resident^s^{in a}^no^n-^pro^vⁱ^d^e^r^S^ecti^oⁿ^713.^F^o^{r a 12-}^m^oⁿ^t^h^peri^od^S^ecti^oⁿ^411.^T^h^e^Secretary^w^o^u^l^{d be}^N^o^provⁱ^sⁱ^oⁿ^.

^t^ing^;^dro^p^dent^ist^s^a^{nd po}^dia^t^rist^s^s^t^artⁱⁿ^g^Jan^u^a^ry^{1, 2004 h}^o^s^pⁱ^t^a^l^s^wⁱ^l^l^be^req^uⁱ^r^{ed to reim}^bu^rs^{e teach}ⁱⁿ^g^h^o^s^p^itals
^m^t^h^{e 3}^-^y^e^a^r^ro^lling^lim^it^oⁿ^IM^E^ab^{le to}^c^o^uⁿ^t^r^e^sid^eⁿ^t^{s in}^o^s^teo^p^a^th^{ic an}^d^f^o^r^r^e^sid^eⁿ^t^{s in}ⁿ^oⁿ^-^h^o^sp^{ital lo}^catioⁿ^s^,
^en^ts^.^Medi^{care h}^a^s^di^f^f^e^ren^t^resⁱ^den^t^allo^p^a^th^{ic f}^a^m^ily^p^r^actice^p^r^o^g^r^a^m^sⁱⁿ^w^h^en^h^o^sp^{itals in}^cu^r^{all, o}^r^su^b^s^tan^tially
ⁱ^{ki/CRS-RL32005}^its^{for th}^{e IME adj}^u^s^t^m^eⁿ^t^an^{d direct}^{dical edu}^cation^{(DGME) pay}^m^en^t.^exⁱ^s^t^eⁿ^{ce as}^o^f^J^aⁿ^u^a^ry^{1, 2002 w}^h^{o are}^t^r^aⁱⁿⁱ^{ng a}^t^no^n-ho^spⁱ^t^a^l^se^t^tⁱ^{ng w}ⁱ^t^h^o^u^t^{all, th}^{e c}^o^s^t^{s o}^f^th^{e tr}^ainⁱⁿ^gⁱⁿ^th^{at site}^star^tin^g^f^r^o^m^th^{e ef}^f^ectiv^{e d}^a^{te o}^f^a^w^r^itten
^g/w^ne^r^a^l^l^y^,^t^h^e^r^e^si^d^e^nt^c^o^un^t^s^fo^r^b^o^t^h^r^e^ga^r^d^t^o^t^h^e^fi^na^ncⁱ^a^l^a^r^r^a^nge^m^e^nt^ag^reem^en^{t betw}^een^th^{e hos}^{pital an}^{d th}^e
^s^.or^{d D}^G^M^{E pay}^m^en^t^s^{are bas}^e^{d on}^betw^een^th^{e h}^o^s^p^{ital an}^{d th}^{e teach}ⁱⁿ^g^en^tity^o^wⁿⁱⁿ^g^o^r^o^p^e^r^a^tin^g^th^eⁿ^oⁿ^-^h^o^sp^ital
^le^ak^nu^m^b^{er of}^resⁱ^den^t^sⁱⁿ^approv^ed^p^h^y^s^ician^p^r^acticin^gⁱⁿ^th^{e n}^oⁿ^h^o^sp^ital^{site. T}^h^{e ef}^f^ectiv^{e d}^a^t^e^o^f^th^{e w}^r^itten
ⁱ^c^aⁿ^d^os^teopath^ic^teachⁱⁿ^g^site.^T^h^e^Iⁿ^sp^ecto^r^Gen^e^r^a^{l o}^f^Health^Aⁿ^d^ag^reem^en^{t w}^o^u^l^{d be}^determⁱⁿ^ed^accordin^g
^://wiki^og^ram^s^report^e^{d by}^t^h^{e h}^o^s^pⁱ^t^a^lⁱⁿ^Hu^m^aⁿ^Ser^v^{ices (}^H^H^S^-^I^G)^w^{ill su}^b^m^{it a}^{to g}^eⁿ^e^ral^l^y^{accepted accou}ⁿ^tin^g
^h^ttp^en^dar^y^ear^{1996. T}^h^{e D}^G^M^{E l}ⁱ^mⁱ^t^m^a^y^st^ud^yⁱⁿ^c^l^udⁱ^{ng r}^e^c^o^m^m^eⁿ^d^a^tⁱ^o^{ns o}ⁿ^t^h^e^prin^ciples^{. T}^h^{e Secretary}^w^{ould n}^o^{t be}
^f^e^{r f}^r^om^th^e^IME^lim^{it becau}^s^eⁱⁿ¹⁹⁹⁶^appropri^a^t^eⁿ^e^s^s^of^t^h^{e pay}^m^en^t^{able to tak}^eⁱⁿ^{to accou}ⁿ^t^th^{e f}^act^t^h^a^t^th^e
^d^e^nt^{s t}^r^aⁱⁿⁱ^ngⁱⁿ^no^n-ho^spⁱ^t^a^l^si^t^e^{s w}^e^r^e^m^e^t^h^odol^og^y^f^o^{r t}^h^e^v^o^l^uⁿ^t^eer^s^u^pervⁱ^sⁱ^oⁿ^.^h^o^sp^{ital co}^{sts in}^cu^r^r^e^d^ar^{e lo}^w^e^r^th^an
^ib^{le f}^o^r^{DGME p}^a^y^m^eⁿ^t^s^b^u^{t n}^o^{t f}^o^r^actu^a^{l Medicare reim}^bu^rs^em^en^t.^Startin^g
^m^en^t^s^{. Pri}^o^{r t}^o^BBA^{1997, t}^h^e^wⁱ^t^h^F^Y^{2005, den}^t^al^an^{d pod}ⁱ^a^t^rⁱ^c
^m^ber^of^resⁱ^den^t^s^t^h^at^cou^l^{d be cou}ⁿ^t^ed^resⁱ^den^t^s^w^o^u^l^{d be}^rem^o^v^e^{d f}^r^om^t^h^{e 3-}
^{r IME pu}^rpos^e^sⁱⁿ^cl^u^d^{ed on}^l^y^t^h^os^{e i}ⁿ^y^{ear rollin}^g^av^erag^{e calcu}^lation^f^o^{r IME}
^o^sp^italⁱⁿ^p^a^tien^t^an^d^o^u^tp^atien^t^an^{d DGME reim}^bu^rs^em^en^ts^.
^m^e^nt^s^.^Ef^f^ectⁱ^v^{e O}^c^t^{ober 1, 1997,}
^d^{er certain}^circu^m^s^t^an^ces^{, a h}^o^s^p^ital
^y^no^w^c^o^unt^r^e^si^d^e^nt^{s i}ⁿ^no^n-ho^spⁱ^t^a^l
^e^s^f^o^{r t}^h^{e pu}^rpos^es^of^{IME. S}^u^bj^ect^t^o
^{e res}ⁱ^den^t^lim^its^{, a teach}ⁱⁿ^g^h^o^s^p^ital’^s
^an^{d D}^G^M^{E pay}^m^en^t^s^{are bas}^e^{d on}^a
^y^{ear ro}^llin^g^av^erag^{e of}^resⁱ^den^t^couⁿ^t^s^.
^{e r}^o^l^lin^g^av^erag^{e calcu}^lationⁱⁿ^clu^d^es

CRS-24
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^at^ry^an^{d den}^t^al^resⁱ^den^t^s.^CMS^h^a^s
^{ed reg}^u^l^atⁱ^oⁿ^s^t^h^at^lⁱ^mⁱ^t^Medi^care’^s
^dical^edu^cation^pay^m^en^ts^w^h^en^ex^is^tin^g
ⁱ^den^t^s^{are tran}^s^f^{erred f}^r^om^{a n}^oⁿ^-
^sp^{ital en}^tity^to^a^teachⁱⁿ^g^h^o^sp^ital,
^r^ticu^l^ar^ly^w^h^en^t^h^{e n}^oⁿ^-^h^o^sp^{ital en}^tity
^{s h}ⁱ^sto^r^ically^p^a^id^f^o^r^th^{e tr}^ainⁱⁿ^g^co^sts
^o^u^{t h}^o^sp^{ital f}^uⁿ^dⁱⁿ^g^.
^e^{nd upda}^t^e^lⁱ^m^it^a^t^io^{n o}ⁿ^hig^h^co^st^S^ecti^oⁿ^711.^Ho^sp^{itals w}^ith^p^e^r^r^e^sⁱ^d^eⁿ^t^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^711.^H^o^s^p^itals^w^ith^p^e^r^r^e^sⁱ^d^eⁿ^t
^ogram^s^{. Ho}^sp^{itals w}^ith^p^e^r^r^e^sid^eⁿ^t^am^ouⁿ^t^s^abov^{e 140%}^of^t^h^{e g}^e^og^raphⁱ^cal^l^y^am^o^unt^{s abov}^{e 140%}^of^t^h^e
^ouⁿ^t^s^bet^w^e^eⁿ^85%^an^{d 140%}^of^t^h^e^ad^j^u^stedⁿ^a^tioⁿ^a^{l av}^e^r^ag^{e am}^o^uⁿ^t^w^{ill n}^o^t^g^e^o^g^r^a^p^h^ically^-^a^d^j^u^s^tedⁿ^a^tioⁿ^a^{l av}^er^ag^e
^o^g^r^a^p^h^ically^-^a^d^j^u^s^tedⁿ^a^tioⁿ^a^{l av}^er^ag^e^ge^t^an^u^pdat^e^f^r^om^F^Y^{2004 t}^h^rou^g^h^am^ouⁿ^t^w^o^u^l^{d n}^o^t^g^e^t^aⁿ^updat^e^f^r^om
ⁱ^{ki/CRS-RL32005}^u^l^d^con^tin^u^e^{to receiv}^e^pay^m^en^ts^bas^e^d^th^{eir h}^o^s^pⁱ^t^al-^s^pecifⁱ^{c per res}ⁱ^den^t^F^Y^2013.^F^Y^{2004 t}^h^ro^{ugh FY}^2013.
^g/w^o^uⁿ^t^{s u}^p^d^a^ted^f^o^rⁱⁿ^f^l^atioⁿ^.
^s^.or
^le^ak^rib^u^t^e^{unused residency}^po^sitⁱ^oⁿ^s^.^S^ecti^oⁿ^422.^A^teachⁱⁿ^g^h^o^s^p^ital’^s^total^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^406.^A^teachⁱ^ng^ho^s^pⁱ^t^a^l^’^s^total
^{care h}^a^s^di^f^f^e^ren^t^resⁱ^den^t^lⁱ^mⁱ^t^s^f^o^rⁿ^u^m^b^e^r^o^f^r^e^sid^eⁿ^t^p^o^s^itioⁿ^s^w^{ill b}^eⁿ^u^m^ber^of^Medi^care-^rei^m^bu^rs^{ed res}ⁱ^den^t
^://wiki^u^s^t^m^eⁿ^t^an^{d DGME pay}^m^ent^.^redu^{ced f}^o^{r cos}^t^reportⁱⁿ^g^peri^ods^s^t^artⁱⁿ^g^p^o^s^itioⁿ^s^w^o^u^l^d^b^e^r^e^d^u^ced^b^y^{a p}^o^r^tioⁿ^o^f
^h^ttp^ne^r^a^l^l^y^,^t^h^e^r^e^sⁱ^d^e^nt^c^o^unt^{s fo}^r^b^o^t^h^Ju^l^y^{1, 2005 i}^fⁱ^t^s^ref^e^ren^{ce res}ⁱ^dent^l^e^v^e^lⁱ^t^s^unuse^d^r^e^si^d^e^nc^y^sl^o^t^{s fo}^r^c^o^st^r^e^p^o^r^tⁱⁿ^g
^{d D}^G^M^{E pay}^m^en^t^s^{are bas}^e^{d on}^{is less th}^an^{its ap}^p^licab^l^e^r^e^sid^eⁿ^t^lim^it.^peri^ods^s^t^a^r^tⁱⁿ^g^Jan^u^a^ry^{1, 2004 i}^fⁱ^t^s
^u^m^{ber of}^resⁱ^den^t^sⁱⁿ^approv^ed^R^u^ral^h^o^s^pⁱ^t^a^l^s^wⁱ^t^h^l^e^ss^t^h^an^{250 acu}^t^e^r^e^sid^eⁿ^t^r^e^f^e^r^eⁿ^{ce lev}^e^{l is}^l^e^{ss th}^an^its
^{ic a}ⁿ^d^o^s^teopath^ic^teachⁱⁿ^g^{care i}ⁿ^patⁱ^eⁿ^t^beds^w^o^u^l^{d be ex}^em^pt^f^r^om^ap^p^licab^{le r}^e^sid^eⁿ^t^li^m^{it. I}^f^so^{, th}^e
^r^a^m^s^t^h^at^w^e^{re report}^e^{d by}^t^h^e^th^e^s^{e r}^e^d^u^ctioⁿ^s^{. T}^h^{e r}^e^d^u^ctioⁿ^f^o^r^o^t^h^e^r^red^u^ctⁱ^oⁿ^w^o^u^l^{d be equ}^a^l^t^o^75%^of^t^h^e
^s^pⁱ^t^al^f^o^{r t}^h^{e cos}^t^reportⁱⁿ^g^peri^od^h^o^sp^{itals w}ⁱ^l^l^eq^u^a^{l 7}⁵^%^o^f^th^{e d}ⁱ^f^f^e^r^eⁿ^c^e^dⁱ^f^f^e^r^eⁿ^{ce b}^e^tw^een^th^{e h}^o^sp^ital’^s^lim^{it an}^d
^diⁿ^gⁱⁿ^cal^en^dar^y^{ear 1996. T}^h^{e D}^G^M^E^b^e^t^w^een^th^{e h}^o^sp^ital’^{s lim}^{it an}^d^its^{its r}^e^sid^eⁿ^t^r^e^f^e^r^eⁿ^{ce lev}^e^{l u}^p^oⁿ^th^e^tim^ely
^eⁿ^t^lim^{it is}^b^a^sed^oⁿ^th^{e u}ⁿ^w^eig^h^t^ed^r^e^fe^r^e^nc^e^r^e^si^d^e^nt^l^e^ve^l^.^T^h^e^r^e^fe^r^e^nc^e^requ^es^{t f}^o^{r s}^u^ch^an^adj^u^s^t^m^eⁿ^t^{, f}^o^{r th}^{e cos}^t
ⁱ^den^t^c^o^unt^s^.^It^m^a^y^di^f^f^e^{r f}^r^om^t^h^e^r^e^si^d^e^nt^l^e^ve^lⁱ^s^t^h^e^hi^ghe^s^t^num^b^e^r^o^f^reportⁱⁿ^g^peri^od^t^h^atⁱⁿ^cl^u^d^es^Ju^l^y^{1, 2003.}
^{it becau}^s^eⁱⁿ^{1996 res}ⁱ^den^t^s^al^l^o^p^a^t^hⁱ^c^aⁿ^{d os}^t^e^opat^hⁱ^c^resⁱ^den^t^A^h^o^s^pⁱ^t^a^l^’^s^ref^e^ren^{ce peri}^{od w}^o^u^l^d^be^t^h^e
ⁱⁿ^gⁱⁿⁿ^oⁿ^-^h^o^sp^{ital sites w}^e^r^e^elig^ib^le^p^o^s^itioⁿ^s⁽^b^ef^o^r^e^th^{e ap}^p^licatioⁿ^o^f^an^y^t^h^{ree m}^o^{st recen}^{t settled}^o^r^su^b^m^itted
^r^{DGME p}^a^y^m^en^t^s^b^u^{t n}^o^{t f}^o^r^I^M^E^w^e^ig^h^tin^g^f^acto^r^s)^f^o^r^th^{e h}^o^sp^ita^{l d}^u^rⁱⁿ^g^con^s^ecu^tiv^{e cos}^t^reportin^g^perio^d^s^on^or
^y^m^en^{ts. Gen}^e^r^a^lly^{, a h}^o^sp^ital’^{s I}^M^E^t^h^{e ref}^e^ren^{ce peri}^{od. T}^hⁱ^s^ref^e^ren^{ce peri}^od^bef^o^{re S}^e^pt^em^{ber 30, 2002. T}^h^{e n}^{eed f}^o^r
^u^s^t^m^eⁿ^t^an^{d in}^creas^{ed IP}^P^S^pay^m^en^ts^{is eith}^er⁽¹⁾^th^{e r}^e^sid^eⁿ^t^lev^e^l^o^f^th^{e m}^o^st^anⁱⁿ^cr^{ease in}^th^{e p}^h^y^s^ician^sp^e^cⁱ^a^lty^an^d
^d^s^on^{a h}^o^s^p^ital’^s^teachⁱⁿ^gⁱⁿ^t^eⁿ^s^ity^recen^t^cos^t^reportin^g^{period of}^th^e^h^o^s^p^ital^th^e^lo^catioⁿⁱⁿ^v^o^lv^ed^w^o^u^l^d^b^e^coⁿ^s^id^er^ed^.
^m^eas^u^r^{ed by}^th^{e ratio of}^th^{e n}^u^m^b^e^{r of}^f^o^r^w^h^ich^a^co^{st r}^e^p^o^r^{t h}^a^{s b}^een^settled⁽^o^r^P^o^sitioⁿ^s^w^o^u^l^d^b^e^dⁱ^strⁱ^b^u^ted^to^p^r^o^g^r^a^m^s

CRS-25
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^e^rn^s^an^{d res}ⁱ^den^t^s^{per bed. Medi}^car^e^’^s^su^b^m^itted^,^su^b^j^{ect to}^au^d^it)^oⁿ^o^r^b^e^f^o^r^eⁱⁿ^r^u^r^a^{l ar}^{eas an}^d^th^o^s^{e n}^o^{t in}^lar^g^{e u}^r^b^aⁿ
^m^en^t^t^o^teachⁱⁿ^g^h^o^s^p^itals^is^S^e^pt^em^{ber 30, 2002 or (2) t}^h^{e res}ⁱ^den^t^a^r^eas^on^{a f}ⁱ^rs^t-^com^e^-^fⁱ^rs^t-^s^e^rv^{ed bas}ⁱ^s^.
^e^{d on}ⁱ^t^s^u^pdat^e^{d cos}^t^pe^r^r^e^sⁱ^den^t^lev^e^{l f}^o^r^th^{e co}^{st r}^e^p^o^r^tin^g^p^e^rⁱ^o^d^th^at^T^h^e^ho^spⁱ^t^a^l^w^o^ul^d^ha^ve^t^o^d^e^m^o^nst^r^a^t^e
^b^j^{ect to a loc}^a^l^ity^adj^u^s^t^m^eⁿ^t^an^dⁱⁿ^cl^u^d^es^Ju^l^y^{1, 2003}^s^u^bj^ect^t^o^au^di^t^.^A^th^{at th}^{e r}^e^sid^eⁿ^t^p^o^s^itioⁿ^s^w^o^u^l^d^b^e^f^illed^;
^pay^m^en^{t corridors}⁾^{, th}^{e w}^e^ig^h^t^ed^h^o^sp^ital’^{s r}^e^f^e^r^eⁿ^{ce lev}^e^{l m}^a^y^b^e^ad^j^u^stedⁿ^o^{t m}^o^r^e^th^an²⁵^p^o^s^itioⁿ^s^w^o^u^l^d^b^e^gⁱ^v^eⁿ
^m^{ber of}^approv^{ed f}^u^l^l^-^tⁱ^m^{e equ}ⁱ^v^a^l^eⁿ^t^uⁿ^d^{er certain}^circu^m^s^t^an^ces^{. T}^h^eⁱⁿ^creas^e^to^an^y^h^o^sp^{ital. T}^h^{ese h}^o^sp^{itals w}^o^u^l^d^b^e
^E^{) res}ⁱ^den^t^s^,^an^{d Medicare’}^s^s^h^{are of}ⁱⁿ^ap^p^licab^{le r}^e^sid^eⁿ^t^lim^{its ap}^p^{lies to}^reim^bu^rs^{ed f}^o^{r DGME f}^o^{r th}^eⁱⁿ^creas^{e in}
^a^tien^t^d^a^y^sⁱⁿ^th^{e h}^o^sp^ital.^portⁱ^oⁿ^s^of^cos^t^reportⁱⁿ^g^perⁱ^o^d^s^r^e^sid^eⁿ^t^p^o^sⁱ^tⁱ^oⁿ^{s at th}^{e lo}^cality^-^a^d^j^u^s^ted
^occu^rriⁿ^g^on^{or af}^t^e^{r Ju}^l^y^{1, 2005. T}^h^eⁿ^a^tion^a^{l av}^erag^{e per res}ⁱ^den^t^am^ouⁿ^t^{. IME}
^ag^g^r^eg^{ate inc}^r^eas^{e m}^a^yⁿ^o^{t ex}^{ceed th}^e^pay^m^en^ts^w^o^u^l^d^a^l^s^o^{be af}^f^{ected. T}^h^e
^o^v^er^a^{ll r}^e^d^u^ctioⁿⁱⁿ^su^ch^lim^{its. T}^h^e^Secretary^w^o^u^l^{d be requ}^{ired to s}^u^bm^{it a}
^Secretary^is^{directed to}^tak^e^s^e^v^e^ral^f^actors^r^e^p^o^r^{t to}^Coⁿ^g^r^{ess, n}^o^later^th^an^J^u^ly¹^,
ⁱⁿ^{to accou}ⁿ^t^w^h^en^dis^t^ribu^tin^g^th^{e res}ⁱ^den^t^{2005, on}^w^h^et^h^e^r^t^o^ex^t^eⁿ^d^t^h^{e appl}ⁱ^catⁱ^oⁿ
ⁱ^{ki/CRS-RL32005}^p^o^sⁱ^tioⁿ^s^to^h^o^sp^{itals. No}^m^o^r^e^th^an²⁵^ad^d^itioⁿ^a^{l F}^T^{Es w}^{ill b}^e^gⁱ^v^eⁿ^to^an^y^d^ead^lin^{e f}^o^rⁱⁿ^cr^{eases in}^r^e^sid^eⁿ^t^lim^its.
^g/w^h^o^s^pⁱ^t^a^l^.^T^h^e^s^e^h^o^sp^itals^w^ill^b^e
^s^.or^reim^bu^rs^{ed f}^o^{r DGME f}^o^{r th}^{e in}^creas^{e in}
^le^ak^r^e^sid^eⁿ^t^p^o^s^itioⁿ^s^{at th}^{e lo}^cality^ad^j^u^sted
ⁿ^a^tⁱ^oⁿ^a^l^av^erag^{e per res}ⁱ^den^t^am^ount^an^d
^://wiki^w^{ill receiv}^eⁱⁿ^cre^a^s^ed^{IME p}^a^y^m^en^{ts as}
^h^ttp^w^e^l^l^f^o^{r di}^s^c^h^a^rg^es^af^t^e^r^J^u^l^y^{1, 2005.}
^T^h^e^Secretary^is^requ^{ired to s}^u^bm^it^a
^r^e^p^o^r^{t to}^Coⁿ^g^r^e^{ss n}^o^later^th^an^J^u^ly¹^,
^{2005 on}^w^h^et^h^e^{r t}^o^ex^t^eⁿ^d^t^h^{e appl}ⁱ^catⁱ^oⁿ
^d^ead^lin^{e f}^o^rⁱⁿ^cr^{eases in}^r^e^sid^eⁿ^t^lim^its.
Skilled Nursing Facility (SNF) and Hospice Services.
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^Sk^{illed Nursing}^Fa^cilit^y^Serv^{ices (}^S^NF)
^{se sk}^{illed nursing}^fa^cility^(SNF)^S^ecti^oⁿ^511.^S^t^artⁱⁿ^g^O^c^t^ober^1,^{2004, t}^h^e^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^511.^S^t^artⁱⁿ^g^O^c^t^{ober 1, 2003,}^t^h^e
^en^ts^{for AI}^DS^p^a^ti^en^ts^.^Uⁿ^de^r^PPS^,^{per di}^em^R^U^G^pay^m^en^t^f^o^{r a}^S^N^F^resⁱ^den^t^{per di}^em^R^U^G^pay^m^en^t^f^o^{r a S}^N^F^resⁱ^den^t
^a^r^e^p^a^id^{a d}^a^ily^r^a^{te th}^{at v}^a^rⁱ^es^w^ith^acquⁱ^r^e^dⁱ^m^m^une^d^e^fⁱ^cien^cy^wⁱ^t^h^a^c^q^ui^r^e^dⁱ^m^m^uⁿ^e^defⁱ^cien^cy
^dⁱⁿ^g^on^th^{e care n}^eeds^of^th^e^syⁿ^d^r^o^m^e⁽^A^I^D^S)^w^{ill b}^eⁱⁿ^cr^eased^b^y^s^yⁿ^d^rom^e^(A^{IDS) w}^o^u^l^{d be in}^creas^{ed by}

CRS-26
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^e^fⁱ^ciary^.^T^h^e^r^e^{are 44 res}^o^u^r^ce^128%^{. T}^hⁱ^sⁱⁿ^creas^{e does}ⁿ^o^t^appl^y^af^t^e^r^128%^.^T^hⁱ^sⁱⁿ^creas^{e w}^o^u^l^{d n}^o^t^appl^y^af^t^e^r
^tⁱ^oⁿ^g^r^o^u^p^s⁽^R^UGs)^u^s^ed^to^ad^j^u^st^th^e^date^th^at^th^{e Secretary}^certif^ies^th^{at th}^e^th^{e date th}^{at th}^{e Secretary}^certif^ies^th^at^th^e
^m^en^{t f}^o^{r care n}^eeds^;^each^gr^o^u^p^cas^e-^mⁱ^x^adj^u^s^t^m^e^nt^a^d^equ^a^tely^cas^e-^mⁱ^x^adj^u^s^t^m^e^nt^a^d^equ^a^tely
^l^ects^th^{e in}^ten^s^ity^of^s^e^rv^ices^,^s^u^ch^as^c^o^m^p^en^s^a^tes^f^o^{r th}^{e in}^creas^{ed cos}^t^s^com^p^en^s^a^tes^f^o^{r th}^{e in}^crea^s^e^{d cos}^t^s
^illedⁿ^u^r^sin^g^car^{e an}^d^/^o^r^v^a^rⁱ^o^u^{s th}^er^ap^y^as^s^o^{ciated w}^ith^carin^g^f^o^{r res}ⁱ^d^eⁿ^t^s^w^ith^as^s^o^{ciated w}^ith^carin^g^f^o^{r res}ⁱ^den^t^s^wⁱ^t^h
^d^oth^e^r^s^e^rv^icesⁿ^{eeded by}^{a ben}^e^fⁱ^ciary^.^AI^D^S^.^AI^D^S^.
^{clude certa}ⁱ^{n clinic v}ⁱ^sits^fro^m^sk^illed^S^ecti^oⁿ^410.^Servⁱ^ces^prov^{ided to a SNF}^S^ecti^oⁿ^429.^Serv^ices^prov^{ided by}^{a R}^H^C^S^ecti^oⁿ^408.^P^r^o^v^isioⁿ^{is lim}^ited^to^RHCs
ⁱⁿ^g^f^a^cⁱ^lⁱ^t^y⁽^S^NF⁾^pro^s^pect^iv^e^r^e^sid^eⁿ^t^b^y^a^r^u^r^a^{l h}^ealth^clin^{ic (}^R^HC)^an^d^an^{d a F}^Q^H^C^af^t^e^{r Jan}^u^a^ry^{1, 2005 w}^o^u^l^d^an^{d FQHC}^s^e^rv^ices^prov^ided^af^{ter J}^aⁿ^u^a^ry
^y^m^eⁿ^t^sy^st^e^m⁽^P^P^S⁾^Un^{der Medicare’}^s^a^f^e^d^e^r^a^lly^q^u^alif^ied^h^ealth^cen^ter⁽^F^QHC)^{be ex}^clu^d^{ed f}^r^om^SNF-^P^P^S^if^t^h^es^e^1,²⁰^{04 an}^{d does}ⁿ^o^t^ex^t^eⁿ^d^t^o^ou^t^p^atⁱ^eⁿ^t
^S^{, SNFs}^{are paid a pr}^e^d^etermⁱⁿ^e^d^af^t^e^{r Jan}^u^a^ry^{1, 2005 are ex}^cl^u^d^{ed f}^r^om^s^e^r^vⁱ^c^es^w^o^u^l^{d h}^a^v^e^been^ex^clu^d^{ed if}^s^e^rv^ices^th^{at are}^bey^oⁿ^d^th^{e g}^eⁿ^e^{ral s}^c^ope
^ouⁿ^t^{to cov}^e^{r all}^s^e^rv^ices^prov^{ided in}^a^S^N^F-^P^P^S^if^th^es^{e s}^e^rv^ices^w^o^u^l^{d h}^a^v^e^f^u^rⁿ^ish^e^d^b^y^{a p}^h^y^sⁱ^cian^o^r^p^r^actitioⁿ^e^r^of^{SNF com}^p^reh^eⁿ^s^iv^{e care plan}^s^.
^adj^u^s^t^e^d^f^o^{r th}^{e care n}^eeds^of^th^e^been^ex^clu^d^{ed if}^f^u^rn^is^h^e^{d by}^{a p}^h^y^s^ician^w^h^o^w^a^{s n}^o^{t af}^f^iliated^w^ith^{a RHC o}^r
ⁱ^{ki/CRS-RL32005}^t^.^C^e^rtain^s^e^rv^ices^aⁿ^dⁱ^t^e^m^s^{ided a SNF res}ⁱ^den^t^{, s}^u^ch^as^o^r^p^r^actitioⁿ^e^r^w^h^o^w^a^sⁿ^o^t^af^f^iliated^w^ith^{a R}^H^C^o^r^FQHC^.^{FQHC. Ou}^tp^atien^t^ser^v^{ices th}^{at ar}^e^bey^oⁿ^d^t^h^{e g}^eⁿ^e^ral^s^c^{ope of}^S^N^F
^g/w^y^sⁱ^c^ian^s^’^s^e^rv^ices^{, s}^p^ecifⁱ^{ed am}^bu^lan^c^e^com^p^reh^eⁿ^s^iv^{e care plan}^s^th^at^{are prov}^ided
^s^.or^rv^ices^{, s}^p^ecifⁱ^{ed ch}^em^oth^e^ra^p^y^item^s^an^d^by^an^eⁿ^tity^th^{at is}^{100% ow}ⁿ^e^{d as}^{a j}^oⁱⁿ^t
^le^ak^v^{ices, an}^d^cer^tain^o^u^tp^atien^t^ser^v^ic^e^s^v^eⁿ^t^u^r^{e b}^y^tw^o^Medⁱ^car^e-^p^a^r^ticip^a^tⁱⁿ^g
ⁱ^d^{ed by}^{a Medi}^care-^partⁱ^cⁱ^p^atⁱⁿ^g^h^o^s^p^itals^{or critical}^acces^s^h^o^s^p^itals^w^o^u^l^d
^://wiki^sp^{ital o}^r^CA^H,^a^r^e^ex^clu^d^ed^f^r^o^m^th^e^{be ex}^clu^d^{ed f}^r^om^th^{e SNF-}^P^P^S^.
^h^ttp^F^-^PPS^an^{d pai}^d^s^e^parat^e^l^y^uⁿ^d^er^Part^B.
^ck^g^r^o^{und check}^oⁿ^w^o^rk^ers^S^ecti^oⁿ^306.^T^h^{e Secretary}^,ⁱⁿ^con^s^u^ltation^S^ecti^oⁿ^636.^A^{ll p}^r^o^v^id^er^{s o}^f^loⁿ^g^-^ter^m^N^o^provⁱ^sⁱ^oⁿ^.

^e^dica^{re and M}^e^dicaid^w^ith^th^{e A}^tto^rⁿ^ey^Gen^e^r^a^{l, is r}^e^q^uⁱ^r^ed^to^{care s}^e^rv^ices^th^{at par}^tⁱ^c^{ipate in}^Medicare
^l^{th and long-term}^{care providers}^.^estab^lish^p^ilo^{t p}^r^o^j^{ects o}ⁿ^b^ack^g^r^o^uⁿ^d^an^d/^{or Medi}^cai^d^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o
^rsⁱ^ng^h^o^m^e^s^an^{d h}^o^m^e^h^ealth^ag^en^cies^ch^eck^s^f^o^{r certa}ⁱⁿ^lon^g^-^term^{care w}^o^rk^ersⁱⁿⁱ^tⁱ^{ate back}^g^r^ouⁿ^d^ch^eck^s^f^o^{r certain}
^y^requ^es^{t th}^{e Federal B}^u^reau^of^w^ith^direct^acces^s^{to patien}^t^s^{or res}ⁱ^den^t^sⁱⁿ^w^o^rk^e^r^s^w^ith^acces^s^{to a patien}^t^or
^v^e^stig^atioⁿ⁽^F^B^I⁾^to^sear^ch^{its all-}^state^{no m}^o^{re th}^an^{10 s}^t^ates^{. T}^h^{e Secretary}^is^r^e^si^d^e^nt^.^P^r^o^c^e^d^ur^e^s^for^con^d^uc^tⁱⁿ^g
ⁱ^oⁿ^a^l^dat^a^ban^k^of^arr^e^st^aⁿ^d^r^e^q^u^ir^ed^to^estab^lish^cr^iterⁱ^{a f}^o^r^selectin^g^back^g^r^ouⁿ^d^ch^eck^s^w^o^u^l^{d be s}^p^ecifⁱ^ed,
ⁿ^vⁱ^ctioⁿ^s^f^o^r^th^{e cr}^imⁱⁿ^{al h}ⁱ^sto^r^{ies o}^f^th^os^{e s}^t^ates^th^{at v}^o^luⁿ^t^{eer to participate.}^an^{d w}^oul^dⁱⁿ^clu^d^{e s}^earch^es^of^s^t^{ate an}^d
ⁱ^cant^s^w^h^{o w}^o^u^l^{d prov}ⁱ^d^{e di}^rect^Th^e^b^{ill s}^p^e^cⁱ^fⁱ^e^s^p^r^o^c^e^d^u^r^e^s^f^o^r^F^B^{I crim}ⁱⁿ^{al records}^.^Violators^of^th^e^s^e
^t^{care, as}^lon^g^as^s^t^a^t^es^es^tablis^h^c^o^nd^uc^tⁱ^ng^b^a^c^kgr^o^{und ch}^eck^s^,^aⁿ^d^requ^irem^en^ts^w^o^u^l^d^be^s^u^bj^{ect to crim}ⁱⁿ^al
^an^is^m^s^f^o^{r proces}^sⁱⁿ^g^th^es^{e requ}^es^tsⁱⁿ^clu^d^es^s^earch^es^of^s^t^{ate an}^{d FB}^{I crim}ⁱⁿ^al^p^e^na^l^t^y^fⁱⁿ^e^s^an^d/^orⁱ^m^p^rⁱ^s^oⁿ^m^e^nt^.
^os^{t s}^t^ates^requ^{ire ch}^eck^s^f^o^{r certa}ⁱⁿ^records^.^A^t^leas^{t on}^{e s}^t^{ate in}^the^pⁱ^lot^P^r^o^vⁱ^d^e^r^s^w^o^u^l^d^b^e^p^e^r^m^itted^t^o
^ou^ps^of^em^pl^o^y^e^e^s⁾^{. Prov}ⁱ^d^ers^f^o^l^l^o^w^proj^ect^w^o^u^l^{d be al}^l^o^w^e^{d t}^o^es^t^a^blⁱ^s^h^provⁱ^sⁱ^oⁿ^a^l^l^y^em^pl^oy^w^o^rk^ers^pen^dⁱⁿ^g
^procedu^r^es^to^con^d^u^c^{t th}^es^e^ch^eck^s^.^procedu^r^es^f^o^r^u^sⁱⁿ^g^em^ploy^m^eⁿ^t^ag^en^cies^com^p^l^e^tⁱ^oⁿ^of^t^h^e^c^h^e^c^k^s^an^{d w}^o^u^l^{d be}

CRS-27
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^aⁱⁿ^tain^{s a n}^a^tioⁿ^a^{l h}^e^a^l^th^car^e^{to con}^d^u^c^{t th}^es^{e ch}^eck^s^.^P^r^ov^iders^m^a^y^reim^bu^rs^{ed f}^o^{r th}^{eir cos}^t^s^of^con^d^u^c^tin^g
^{d an}^d^a^b^u^s^{e data bas}^e^{, th}^{e Health}^care^provⁱ^sⁱ^oⁿ^a^l^l^y^em^pl^oy^w^o^rk^ers^pen^dⁱⁿ^g^th^es^{e ch}^eck^s^.
^teg^r^ity^an^d^P^r^o^t^ectioⁿ^Data^B^aⁿ^k^com^p^letion^of^th^{e ch}^eck^s^.
^{DB). S}^e^l^f^-^q^u^e^ri^es^o^f^HIP^D^{B are}^T^h^e^nur^se^aⁱ^d^e^r^e^gi^st^r^y^w^o^ul^d^b^e^e^x^p^a^nd^e^d
^e^{d by}^g^o^v^e^rnm^e^{nt ag}^en^cies^{, h}^ealth^T^h^{e Sec}^r^etary^is^requ^{ired to pay}^th^os^e^toⁱⁿ^clu^d^e^{all em}^ploy^ees^of^lon^g^-^term^care
^s^,^h^ealth^{care prov}^iders^,^s^u^ppliers^an^d^s^t^ates^f^o^{r th}^{e cos}^t^s^of^con^d^u^c^tin^g^th^{e pilot}^provⁱ^d^ers^an^{d re}^na^m^e^d^“e^m^p^l^o^y^e^e
^actitioⁿ^e^r^s^.^A^{ll states also}^m^aⁱⁿ^tain^th^eir^prog^ram^(res^e^rvⁱⁿ^g^4%^of^t^h^{e pay}^m^en^t^s^f^o^r^r^e^gⁱ^s^t^r^y^.^”^T^h^{e in}^v^e^stig^ato^r^y^r^e^sp^oⁿ^sib^ilities
ⁿ^regⁱ^s^t^ri^es^of^t^h^os^{e pers}^on^s^t^h^at^t^h^e^t^h^{e pro}^g^ram^’^s^ev^al^u^a^tⁱ^oⁿ⁾^{. A}^s^u^m^of^$25^of^s^u^rv^ey^an^{d certif}^ication^ag^en^cies^w^o^u^l^d
ⁱⁿ^e^s^m^{eet th}^{e requ}^irem^en^ts^to^m^illioⁿ^{is ap}^p^r^o^p^r^iated^f^r^o^m^f^uⁿ^d^{s in}^t^h^e^b^e^e^x^p^aⁿ^d^e^d^.^$10.2^m^illioⁿ^w^o^u^l^d^b^e
^r^k^asⁿ^u^r^s^e^aides^.^In^clu^d^{ed in}^th^es^e^T^r^eas^u^r^yⁿ^o^t^ot^h^e^rwⁱ^s^e^appropri^a^t^e^{d, f}^o^r^au^t^h^ori^{zed t}^o^{be appropri}^a^t^e^{d f}^o^{r F}^Y^2004,
ⁱ^s^t^ries^are^{data des}^c^ribin^g^s^t^{ate f}ⁱⁿ^dⁱⁿ^g^s^fⁱ^s^cal^y^ears^{2004 t}^h^ro^ugh^2007.^w^ith^co^m^p^lian^{ce d}^e^a^d^lin^{es v}^a^r^yⁱⁿ^g^b^y
^resⁱ^den^tⁿ^e^g^l^{ect, abu}^s^{e an}^{d/or th}^e^provⁱ^d^{er g}^r^ou^p.
^s^a^ppropri^a^tⁱ^oⁿ^of^resⁱ^den^t^propert^y^.
ⁱ^{ki/CRS-RL32005}^u^rv^ey^ag^en^cies^{are requ}^{ired to}^Gr^an^{ts w}^o^u^l^d^b^e^av^ailab^l^{e to}^d^e^v^e^lo^pⁱⁿ^f^o^r^m^atioⁿ^oⁿ^b^e^{st p}^r^{actices in}^p^a^tⁱ^eⁿ^t
^g/w^stⁱ^g^a^t^e^a^l^l^e^ga^tⁱ^o^{ns o}^f^r^e^sⁱ^d^e^nt^ne^gl^e^c^t^,^a^b^use^p^r^e^v^eⁿ^tⁱ^o^{n t}^r^aⁱⁿⁱ^{ng a}ⁿ^d^fo^r^o^t^he^r
^s^.or^s^{e an}^d/^{or t}^h^{e m}ⁱ^s^a^ppropri^a^tⁱ^oⁿ^of^pu^rpos^es^.
^le^ak^d^e^nt^p^r^o^p^e^r^t^yⁱⁿ^nur^si^{ng ho}^m^e^s.
^L^oⁿ^g^-^term^{care prov}^iders^cou^l^{d acces}^s^th^e
^://wiki^HI^P^D^B^d^a^{ta b}^aⁿ^k^an^d^m^o^r^eⁱⁿ^f^o^r^m^atioⁿ
^h^ttp^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o^{be i}ⁿ^cl^u^d^ed.^A^report
^on^back^g^r^ouⁿ^d^ch^eck^s^w^o^u^l^{d be du}^{e t}^o
^C^oⁿ^g^r^es^sⁿ^o^{later th}^an^{2 y}^ears^af^ter
^en^actm^eⁿ^t^.
^Hos^p^{ice Services}
^{it hos}^p^ices^{to provide}^core^hos^p^ice^S^ecti^oⁿ^946.^B^e^giⁿⁿⁱ^{ng w}ⁱ^t^h^t^h^e^d^a^t^e^o^f^S^ecti^oⁿ^406.^B^e^giⁿⁿⁱ^{ng w}ⁱ^t^h^t^h^e^d^a^t^e^o^f^S^ecti^oⁿ^946.^S^a^m^e^provⁱ^sⁱ^oⁿ^.

^{under arrangem}^ent^{. Medicare}^en^a^c^tm^en^{t, a h}^o^sp^{ice is p}^e^r^m^itted^to^en^ter^en^actm^eⁿ^t^{, a h}^o^sp^{ice w}^o^u^l^d^b^e^p^e^r^m^itted
^ires^{a h}^o^s^p^{ice to pro}^v^{ide certain}^coreⁱⁿ^t^o^a^r^r^a^nge^m^e^nt^{s w}ⁱ^t^h^aⁿ^o^t^he^r^ho^spⁱ^c^e^to^en^te^rⁱⁿ^to^ar^r^aⁿ^g^e^m^eⁿ^t^{s w}^ith^an^o^t^h^e^r
^rv^ices^directly^{. T}^h^es^{e c}^o^r^e^s^e^rv^ices^pro^g^r^a^m^{to prov}^{ide core s}^e^rv^icesⁱⁿ^h^o^s^p^{ice prog}^ram^{to prov}^{ide core s}^e^rv^{ice in}
^d^{e n}^u^r^sⁱⁿ^g^{care, m}^e^{dical s}^o^cial^ex^traordin^ary^circu^m^s^t^an^ces^.^ex^traordin^ary^circu^m^s^t^an^ces^.
^rv^ices^{, an}^{d cou}ⁿ^s^elin^g^s^e^rv^ices^.

CRS-28
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^{it nurs}^e^{practitioners}^{, clini}^c^al^S^ecti^oⁿ^408.^T^h^{e d}^e^fⁱⁿ^itioⁿ^o^f^an^atten^dⁱⁿ^g^S^ecti^oⁿ^407.^Begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1,}^2004,^S^ecti^oⁿ^409.^Nu^r^s^{e p}^r^actitioⁿ^e^r^s^w^o^u^l^d^b^e
^r^s^e^s^p^e^c^ia^list^s^{, a}^{nd phy}^siciaⁿ^p^h^y^s^icianⁱⁿ^h^o^sp^{ice is ex}^p^aⁿ^d^ed^toⁱⁿ^clu^d^e^{a ter}^mⁱⁿ^ally^{ill b}^eⁿ^e^fⁱ^ciar^y^uⁿ^d^e^r^h^o^sp^ice^p^e^r^m^itted^to^b^e^id^en^tif^ied^{as a b}^eⁿ^e^fⁱ^ciar^y^’^s
^sⁱ^s^t^an^ts^{to atten}^d^h^o^s^pⁱ^{ce p}^a^ti^en^ts^.^{a n}^u^r^{se p}^r^actitioⁿ^e^r^.^Aⁿ^u^r^se^p^r^actitioⁿ^e^r^is^car^{e w}^o^u^l^d^b^e^ab^{le to}^d^e^sigⁿ^a^te^{a p}^h^y^s^ician^at^t^e^ndⁱⁿ^g^ph^y^sⁱ^cⁱ^aⁿ^an^{d w}^o^u^l^{d be abl}^e^t^o
^e^rs^h^o^s^p^{ice s}^e^rv^ices^to^c^a^r^eⁿ^o^{t p}^e^r^m^itted^to^cer^tⁱ^f^y^{a b}^eⁿ^e^fⁱ^ciar^y^as^assistan^t,ⁿ^u^r^{se p}^r^actitioⁿ^e^r^,^o^r^clin^ical^estab^lish^an^d^r^e^vⁱ^ew^th^e^w^r^itten^p^l^an^-^o^f^-
^r^th^{e ter}^mⁱⁿ^{al illn}^{ess o}^f^{a b}^eⁿ^e^fⁱ^ciar^y^.^termⁱⁿ^ally^ill^f^o^{r th}^{e p}^u^rp^o^s^{es o}^f^receivⁱⁿ^gⁿ^u^r^s^e^s^p^ecialis^{t (w}^h^o^isⁿ^o^t^an^em^ploy^{ee of}^{care as}^w^e^{ll as}^prov^{ide oth}^e^r^s^e^rv^ices^{, bu}^t
^as^on^{able an}^{d n}^eces^s^a^ry^m^e^{dical an}^d^th^{e h}^o^sp^{ice b}^eⁿ^e^f^{it. T}^h^e^p^r^o^v^isioⁿ^is^th^{e h}^o^s^p^{ice pro}^g^r^a^m⁾^as^hⁱ^s^{or h}^e^r^w^o^u^l^dⁿ^o^{t b}^e^ab^{le to}^cer^tif^y^th^{at a}
^pport^s^e^rvⁱ^ces^f^o^{r t}^h^{e m}^aⁿ^a^g^e^m^eⁿ^t^of^t^h^e^ef^f^ectiv^{e u}^pon^en^actm^eⁿ^t^.^atten^dⁱⁿ^g^p^h^y^s^ician^.^T^h^{e w}^r^itten^p^l^an^-^o^f^-^b^eⁿ^e^fⁱ^ciar^y^{is ter}^mⁱⁿ^ally^ill.
^mⁱⁿ^a^l^illn^{ess ar}^{e f}^u^rⁿ^ish^e^d^uⁿ^d^er^a^{care w}^o^u^l^{d be abl}^e^t^o^be^e^s^t^a^blⁱ^s^h^e^{d by}
^itten^p^l^an^-^o^f^-^car^e^e^s^t^a^b^lⁱ^s^h^e^d^an^d^t^h^es^{e prof}^es^sⁱ^on^al^s^w^h^{o w}^o^u^l^{d be abl}^e^t^o
^odi^cal^l^y^revⁱ^ew^{ed by}^t^h^{e pat}ⁱ^eⁿ^t^’^s^periodically^revⁱ^ew^th^{e ben}^e^fⁱ^ci^ary^’^s
^dⁱⁿ^g^p^h^y^s^ician^an^d^th^{e h}^o^sp^{ice. T}^h^e^w^r^itten^p^l^an^-^o^f^-^car^e.
^e^ndⁱⁿ^g^ph^y^sⁱ^cⁱ^aⁿ^m^a^y^{be em}^pl^oy^{ed by}
^o^sp^{ice an}^dⁱ^s^id^en^tif^ied^b^y^th^e
ⁱ^{ki/CRS-RL32005}^ne^fi^cⁱ^a^r^y^a^s^ha^vi^{ng t}^h^e^m^o^st^si^gni^fi^c^aⁿ^t^{le in}^t^h^e^d^e^ter^mⁱⁿ^atioⁿ^an^d^d^e^liv^er^y^o^f
^g/w^{dical care to th}^{e ben}^e^fⁱ^ciary^{at th}^{e tim}^e
^s^.or^o^s^p^{ice care is}^elected.
^le^ak
ⁱ^{cian co}^ns^{ultation s}^ervices^S^ecti^oⁿ^512.^Begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005,}^N^o^provⁱ^sⁱ^oⁿ^.^S^e^cti^oⁿ^512.^A^s^o^f^J^a^nua^r^y¹^,^2004,
^://wiki^t^ances^.^Cu^r^r^en^{t law}^Medⁱ^car^{e w}^{ill p}^a^y^f^o^r^{a h}^o^sp^ice-^em^p^l^o^y^ed^{Medicare w}^o^u^l^{d pay}^f^o^{r a h}^o^s^p^ice-
^h^ttp^th^orizes^cov^e^rag^e^of^h^o^s^p^{ice s}^e^rv^ices^{, in}^p^h^y^s^ician^’^{s co}ⁿ^s^u^ltatioⁿ^w^ith^{a ter}^mⁱⁿ^ally^em^p^l^o^y^ed^p^h^y^s^ician^’^{s co}ⁿ^s^u^ltatioⁿ^w^ith^a
^o^f^cer^tain^o^t^h^e^r^Medⁱ^car^{e b}^eⁿ^e^f^{its, f}^o^r^{ill b}^eⁿ^e^fⁱ^ciar^y^w^h^o^h^a^{s n}^o^t^elected^th^e^t^e^r^mⁱⁿ^ally^{ill b}^eⁿ^e^fⁱ^ciar^y^w^h^o^h^a^{s n}^o^t
^mⁱⁿ^ally^{ill b}^eⁿ^e^fⁱ^ciar^{ies w}^h^o^{elect su}^ch^ho^spⁱ^c^e^b^e^ne^fi^t^.^{elected th}^{e h}^o^s^p^{ice ben}^e^f^it.
^e^r^a^g^e^{. T}^h^{e h}^o^s^p^{ice can}^{be paid by}
^ly^af^{ter t}^h^e^ben^e^fⁱ^ciary^h^a^s
^{e h}^o^s^p^{ice ben}^e^fⁱ^t
^a^{blish rura}^{l ho}^{spice dem}^o^nst^r^a^tⁱ^oⁿ^S^ecti^oⁿ^409.^T^h^{e Secretary}^is^requ^{ired to}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^418.^T^h^e^Secretary^w^oul^d
^ogram^.^Medicare’^s^hos^{pice s}^e^rv^ices^estab^lish^{a d}^e^m^oⁿ^s^tr^atioⁿ^p^r^o^j^{ect in}³^estab^lish^{a 5}^-^y^ear^d^e^m^oⁿ^s^tr^atioⁿ^p^r^o^j^{ect in}
^p^r^o^v^id^ed^p^r^im^ar^ilyⁱⁿ^{a p}^a^tien^t^’^s^h^o^m^e^h^o^s^p^{ice prog}^ram^s^{to deliv}^{er h}^o^s^p^{ice care}^to^th^r^{ee h}^o^sp^{ice p}^r^o^g^r^a^m^s^to^d^e^liv^e^r^h^o^sp^ice
^eⁿ^e^fⁱ^ciar^{ies w}^h^o^a^r^{e ter}^mⁱⁿ^ally^{ill an}^d^{Medicare ben}^e^fⁱ^ciariesⁱⁿ^ru^{ral areas}^.^A^car^{e to Medicare ben}^e^fⁱ^ciariesⁱⁿ^ru^ral
^o^{elect s}^u^ch^s^e^rv^ices^{. Medicare law}^p^r^o^j^{ect is n}^o^{t p}^e^r^m^itted^to^{last lo}ⁿ^g^e^r^th^an^areas^{. T}^h^os^{e Medicare ben}^e^fⁱ^ciaries^w^h^o
^cribes^th^{at th}^{e a}^ggr^eg^{ate n}^u^m^{ber of}^{5 y}^ears^.^T^h^os^{e Medicare ben}^e^fⁱ^ciaries^w^h^o^lack^an^appro^p^r^{iate careg}^iv^{er an}^{d are}
^y^s^o^fⁱⁿ^p^a^tien^t^car^{e p}^r^o^v^id^ed^to^lack^an^{appropriate careg}^iv^er^aⁿ^{d are}^uⁿ^a^{ble to receiv}^e^h^o^m^e^-^b^as^{ed h}^o^s^p^ice^care
^e^fⁱ^cⁱ^aries^w^h^{o elect h}^o^s^p^ice^uⁿ^a^{ble to receiv}^e^h^o^m^e^-^b^as^{ed h}^o^s^p^ice^care^w^o^u^l^{d be able to receiv}^e^h^o^s^p^{ice care in}^a
^an^y^12-^m^oⁿ^t^h^peri^o^d^canⁿ^o^t^co^u^l^d^receiv^e^h^o^s^p^{ice care in}^{a f}^acility^o^f^f^acility^o^f²⁰^o^r^f^e^w^e^r^b^e^d^s^th^{at o}^f^f^e^r^s^a

CRS-29
^Provisⁱ^{on and Current L}^a^w^{H.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^ceed^20%^of^th^{e total n}^u^m^{ber of}^day^s^of^{20 or f}^e^w^e^r^beds^t^h^at^of^f^e^rs^{a f}^u^l^l^ran^g^e^of^f^u^{ll r}^aⁿ^g^e^o^f^h^o^sp^{ice ser}^v^ic^e^s^w^ithⁱⁿ^its
^s^p^{ice cov}^e^rag^e^prov^{ided to th}^es^e^h^o^sp^{ice ser}^v^{ices w}^ithⁱⁿ^{its w}^a^lls.^w^a^{lls. T}^h^{e f}^acilit^y^w^o^u^l^dⁿ^o^{t b}^e^r^e^q^u^ir^ed
^on^s^.^to^o^f^f^e^r^ser^vⁱ^c^e^s^o^u^tsid^{e o}^f^th^{e h}^o^m^e^an^d
^th^{e lim}^{it on}^th^{e ag}^g^r^eg^{ate num}^b^e^{r of}
ⁱⁿ^p^a^tien^t^d^a^y^s^p^r^o^v^id^ed^to^Medⁱ^car^e
^ben^e^fⁱ^ciaries^w^h^{o elect h}^o^s^p^{ice care}^w^o^u^l^d
^{be w}^aⁱ^v^ed.
Other Part A Provisions.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^a^k^e^grants^{to States}^{and certain}^{Section 405(f)}^.^T^h^e^r^u^r^a^l^h^o^sp^ital^S^ecti^oⁿ^405(f).^Uⁿ^{der t}^hⁱ^s^prog^ram^,^t^h^e^{Section 405}⁽^g^).^T^h^{e au}^th^o^r^izatioⁿ^to
ⁱ^{ki/CRS-RL32005}^p^itals^.^T^h^{e Secretary}^is^{able to}^k^e^g^r^an^ts^f^o^{r s}^p^ecifⁱ^{ed pu}^rpos^es^to^f^l^ex^ib^ility^g^r^an^{t p}^r^o^g^r^a^m^{is au}^th^o^r^ize^d^at^{$35 m}^illion^ea^c^h^y^{ear f}^r^om^FY2005^Secretary^w^o^u^l^{d be able}^{to aw}^{ard g}^r^an^ts^of^u^p^t^o^{$50,000 t}^o^h^o^s^pⁱ^t^a^l^s^t^o^as^sⁱ^s^t^elⁱ^gⁱ^b^l^e^aw^{ard g}^r^an^ts^uⁿ^d^{er th}^{e ex}^is^tin^{g R}^u^ral^Ho^sp^{ital Flex}^ibⁱ^l^ity^P^r^o^g^r^a^m^w^o^u^l^d^b^e
^g/w^r^elig^ib^{le sm}^{all r}^u^r^a^{l h}^o^sp^itals^t^h^r^o^{ugh FY}^{2008. S}^t^artⁱⁿ^gⁱⁿ^FY^{2005, a}^sm^{all r}^u^r^a^{l h}^o^sp^{itals in}^r^e^d^u^cin^g^m^e^dⁱ^cal^es^t^a^blⁱ^s^h^e^d^f^r^om^F^Y^{2004 t}^h^ro^{ugh FY}²⁰⁰⁸
^s^.or^f^o^{r s}^u^ch^aw^ards^uⁿ^d^{er th}^e^state^{is r}^e^q^u^ir^ed^to^coⁿ^s^u^{lt w}^ith^th^e^h^o^sp^ital^errors^an^{d in}^creasⁱⁿ^g^patien^t^s^a^f^e^ty^uⁿ^d^er^fr^o^m^t^h^e^Fe^d^e^r^a^l^H^I^T^r^ust^Fund^a^t^a^m^o^unt^s
^le^akⁱ^car^{e Ho}^sp^{ital Flex}^ib^ility^P^r^o^g^r^a^m^.^asso^ciatioⁿ^aⁿ^d^r^u^r^a^{l h}^o^sp^{itals in}^th^{e state}^th^{e n}^e^w^Sm^a^l^l^R^u^r^a^{l Ho}^sp^ital^of^u^p^{$25 m}^illion^each^y^ear.
^://wiki^{e Secretary}^m^a^y^als^o^aw^{ard g}^r^an^ts^to^sp^{itals to}^{assist elig}^ib^{le sm}^{all r}^u^r^a^l^on^t^h^{e m}^o^s^t^appropri^a^t^e^w^a^y^t^o^u^s^{e s}^u^ch^f^uⁿ^d^s^.^A^s^t^{ate m}^a^yⁿ^o^{t s}^p^en^{d m}^o^{re th}^an^Im^prov^em^en^t^Prog^ram^.^A^ppropri^a^tⁱ^oⁿ^s^of^{$25 m}^illion^each^y^{ear f}^r^om^th^{e T}^r^eas^u^r^y
^h^ttp^sp^{itals (}^w^ith^{less th}^an⁵⁰^b^e^d^s⁾ⁱⁿ^t^h^{e l}^e^s^s^e^{r of}^15%^of^t^h^{e g}^r^an^t^a^m^o^unt^or^f^r^om^F^Y^{2004 t}^h^ro^{ugh FY}^{2008 w}^o^u^l^{d be}
^p^l^em^en^tin^g^d^a^{ta sy}^stem^{s r}^e^q^u^ir^ed^th^{e States’}^f^e^d^e^r^a^llyⁿ^e^g^o^tiatedⁱⁿ^dⁱ^r^ect^au^th^o^r^ized^f^o^r^th^{is p}^u^r^p^o^s^e.
^d^{er BBA}^{1997. A}^nnua^l^fundⁱ^{ng fo}^r^t^h^e^rat^e^f^o^{r ad}^mⁱⁿⁱ^st^r^a^tⁱ^v^{e pu}^rpos^es^.^A^ppropri^a^tⁱ^oⁿ^s^of^{$40 m}^illion^each^y^ear
^r^a^{l Ho}^sp^{ital Flex}^ib^ility^Gr^an^{t P}^r^o^g^r^a^m^Begⁱⁿⁿⁱⁿ^g^wⁱ^t^h^F^Y^{2005, up}^t^o^5%^of^t^h^e^f^r^om^F^Y^{2004 t}^h^ro^{ugh FY}^{2008 f}^r^om^t^h^e^H^I
^s^{$25 m}^illion^f^r^om^{1999 th}^rou^g^h^t^o^{tal am}^o^uⁿ^t^ap^p^r^o^p^r^iated^f^o^r^g^r^an^{ts w}^ill^T^r^u^s^t^Fuⁿ^d^f^o^r^g^r^an^ts^{to s}^t^ates^f^o^{r s}^p^ecifⁱ^ed
^illionⁱⁿ^{FY2002; an}^{d $25}^{be av}^{ailable to th}^{e Hea}^l^t^h^R^e^s^o^u^r^ces^an^d^pu^rpos^es^w^o^u^l^{d be}^au^th^{orized. States}^th^at
ⁱⁿ^{2003. T}^h^{e au}^th^orization^to^Serv^ices^A^d^mⁱⁿⁱ^s^t^ration^f^o^r^admⁱⁿⁱ^s^t^erin^g^{are aw}^{arded g}^r^an^ts^w^o^u^l^{d be requ}^ire^d^to
^{ard t}^h^{e g}^r^an^t^s^ex^pi^{red i}ⁿ^F^Y^2002.^th^es^{e g}^r^an^ts^.^coⁿ^s^u^{lt w}^ith^th^{e h}^o^s^p^{ital asso}^ciatioⁿ^s^an^d
^r^u^r^a^{l h}^o^sp^{itals in}^th^{e state.}
^t^a^b^lⁱ^s^h^h^e^al^th^{care i}ⁿ^fras^tru^c^tu^{re l}^o^aⁿ^S^ecti^oⁿ^1016.^A^l^o^an^prog^ram^wⁱ^l^l^be^S^ecti^oⁿ^608.^A^l^o^an^prog^ram^w^o^u^l^{d be}^N^o^provⁱ^sⁱ^oⁿ^.

^ogram^.^No^p^r^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^estab^lish^e^d^to^im^p^r^o^v^{e th}^{e can}^ce^r^-^r^e^lated^es^tablis^h^e^{d to}ⁱ^m^prov^{e th}^{e can}^cer-^r^elated
^h^ealth^car^{e in}^f^r^astr^u^c^tu^r^e^{. I}ⁿ^o^r^d^e^r^to^h^ealth^c^a^r^{e in}^f^r^astr^u^c^tu^r^eⁱⁿ^{states w}^ith^a
^receiv^e^assistan^{ce, th}^{e ap}^p^lican^{t w}^{ill b}^e^popu^lation^of^les^s^th^an^{3 m}^illion^.^In^order
^requ^{ired to: (1) be en}^g^a^g^e^{d in}^can^cer^{to receiv}^e^as^sⁱ^s^t^an^{ce, th}^{e applicant w}^o^u^l^d
^rese^a^r^c^h^;^an^{d (2) be des}ⁱ^gⁿ^a^t^e^{d as}^a^{be requ}ⁱ^r^{ed t}^o^:^{(1) be}^e^nga^g^e^{d i}ⁿ^can^cer

CRS-30
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^can^{cer cen}^ter^f^o^{r th}^{e Nation}^a^{l C}^aⁿ^cer^res^earch^;^an^d^{(2) be des}ⁱ^gⁿ^a^{ted as}^{a can}^cer
^Iⁿ^s^t^itu^{te (}^N^CI⁾^o^r^b^e^sim^ilar^l^y^d^e^sigⁿ^a^ted^cen^ter^f^o^r^th^{e NCI}^o^r^b^e^sim^ilar^l^y
^b^y^t^h^e^s^t^a^t^e^.^$²⁰⁰^m^illioⁿⁱⁿ^b^u^d^g^et^desⁱ^gⁿ^a^{ted by}^th^{e s}^t^at^e^.^{$49 m}^illionⁱⁿ
^au^t^h^ori^t^yⁱ^s^au^t^h^o^rⁱ^{zed f}^o^{r Ju}^l^y^{1, 2004}^bu^dg^et^au^t^h^ori^t^y^w^o^u^l^{d be au}^t^h^ori^zed^for
^t^h^r^o^{ugh FY}^{2008 t}^o^carry^ou^t^t^h^{e l}^o^an^J^u^l^y¹^,²⁰⁰⁴^t^h^r^o^{ugh FY}^{2008 t}^o^carry^ou^t
^p^r^o^g^r^am^{, $}²^m^illioⁿ^f^o^r^p^r^o^g^r^a^m^t^h^{e l}^o^an^prog^ram^,^{$2 m}ⁱ^l^lⁱ^o^{n f}^o^{r prog}^ram
^admⁱⁿⁱ^s^t^ration^.^B^y^{4 y}^ears^f^r^om^en^actm^eⁿ^t^,^a^d^mⁱⁿⁱ^st^r^a^tⁱ^o^n.
^th^{e Secr}^e^t^ar^y^w^{ill su}^b^m^{it a r}^e^p^o^r^{t to}
^Co^ngr^e^{ss o}ⁿ^c^o^ntⁱ^nui^{ng t}^h^e^p^r^o^g^r^a^m^.
^t^a^b^lⁱ^s^h^capⁱ^talⁱⁿ^fras^tru^c^tu^re^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^609.^T^h^{e Secretary}^w^o^u^l^{d be}^able^N^o^provⁱ^sⁱ^oⁿ^.
^viⁿ^g^l^oan^program^T^h^{e P}^u^b^lic^to^m^a^k^e^lo^an^{s to}^an^y^r^u^r^a^l^en^tityⁱⁿ^clu^dⁱⁿ^g
^Ser^v^{ices A}^c^{t estab}^lish^e^{s a f}^uⁿ^dⁱⁿ^r^u^r^a^{l h}^ealth^clin^{ics, a m}^e^dⁱ^{cal f}^acility^w^ith
ⁱ^{ki/CRS-RL32005}^r^e^a^s^ury^f^r^om^w^h^ich^th^{e Secretary}^of^can^m^a^k^e^loan^s^{or loan}^g^u^a^ran^t^eesⁱⁿ^{less th}^an⁵⁰^b^e^d^sⁱⁿⁿ^oⁿ^-^MSA^co^uⁿ^ties^o^rⁱⁿ^ru^ral^cen^s^u^s^t^r^act^s^of^MS^A^s^{, ru}^ral
^g/w^o^uⁿ^t^{s th}^{at h}^a^v^e^b^een^s^p^e^c^if^iedⁱⁿ^ref^e^{rral cen}^ters^{or s}^o^{le co}^m^m^uni^t^y
^s^.or^p^r^o^p^rⁱ^atioⁿ^s^{acts f}^r^o^m^tim^{e to}^tim^e.^h^o^sp^{itals f}^o^r^v^a^rⁱ^o^u^s^p^u^r^p^o^s^e^s^{. A}ⁿ
^le^ak^{der th}^{e Medicare R}^u^{ral Hos}^p^ital^g^e^o^g^r^a^p^h^ically^r^eclassifⁱ^ed^en^tity^w^o^u^l^d^b^e
^ib^ili^t^y^P^r^o^g^r^a^m^estab^lish^e^d^{as p}^a^r^t^o^f^elig^ib^{le f}^o^r^th^e^s^e^l^o^an^{s an}^d^lo^an
^://wiki^I^I^,^th^{e Secr}^etar^y^m^a^y^aw^ar^d^gua^r^a^nt^e^e^s^.^T^h^e^go^ve^rⁿ^me^nt^{’s t}^o^t^a^l
^h^ttp^an^{ts to}^r^u^r^a^{l h}^o^sp^{itals to}^co^v^e^r^th^e^ex^pos^u^r^{e f}^o^r^t^hⁱ^s^prog^ram^w^o^u^l^{d n}^o^t
^plem^en^tation^cos^t^s^as^s^o^{ciated w}^ith^da^t^a^e^x^ceed^{$50 m}^illioⁿ^p^e^r^y^ear^an^d^th^e
^s^t^em^sⁿ^{eeded to m}^{eet th}^{e B}^B^A⁹⁷^p^rⁱⁿ^cip^a^l^am^o^uⁿ^t^o^f^{all lo}^an^{s d}ⁱ^r^ectly^m^a^d^e
^irem^en^ts^.^{or g}^u^a^ran^t^{eed in}^an^y^y^{ear is}ⁿ^o^{t to e}^x^ceed
^{$250 m}^illioⁿ^{per y}^{ear. In}^addition^,^ru^ral
^prov^iders^cou^l^{d appl}^y^{to receiv}^e^$50,000
^p^l^anⁿⁱⁿ^g^g^r^an^{ts to}^h^e^lp^ass^e^{ss cap}^{ital an}^d
ⁱⁿ^f^r^as^tru^c^tu^{re n}^eeds^.^T^h^{e g}^r^an^ts^aw^ard^e^d
ⁱⁿ^an^y^y^{ear w}^o^u^l^dⁿ^o^t^ex^ceed^$²^.⁵^m^illioⁿ^.
^T^h^{e prog}^ram^w^o^u^l^d^ex^pi^re^af^t^e^{r S}^e^pt^em^ber
^{30, 2008.}
^a^{blish rura}^{l co}^m^m^unit^y^ho^spit^a^l^S^ecti^oⁿ^410A^.^T^h^{e Secr}^etar^y^w^{ill estab}^lish^S^ecti^oⁿ^414.^T^h^{e Secretary}^w^o^u^l^{d be}^N^o^provⁱ^sⁱ^oⁿ^.

^o^nst^r^a^t^io^{n pro}^g^r^a^m^{. No prov}^is^ion^{a 5}^-^y^ear^r^u^r^a^{l c}^o^m^m^uⁿ^ity^h^o^sp^{ital (}^RCH)^r^e^q^u^ir^ed^to^e^s^t^a^b^lish^{a 5}^-^y^ear^RCH
^r^r^en^{t law}^.^d^e^m^oⁿ^s^tr^atioⁿ^p^r^o^g^r^a^mⁱⁿ^selected^r^u^r^a^l^dem^oⁿ^s^t^r^atⁱ^oⁿ^prog^ramⁱⁿ^{4 areas}
^areas^w^ith^low^popu^lation^den^s^ities^.^Un^derⁱⁿ^c^l^udⁱ^{ng K}^a^nsa^s^aⁿ^d^N^e^b^r^a^s^ka^t^o^p^a^y^fo^r

CRS-31
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^th^{e p}^r^o^g^r^a^m^,^u^p^to¹⁵^h^o^sp^{itals w}^ith⁵⁰^ac^u^t^eⁱⁿ^p^a^tien^t^ser^v^{ices, o}^u^tp^atien^t
^acu^{te care b}^e^d^s^w^{ill receiv}^e^p^a^y^m^en^{t f}^o^r^s^e^rv^ices^{, an}^{d certain}^h^o^m^e^h^eal^t^h^s^e^rv^ices
ⁱⁿ^p^a^tien^t^se^r^v^{ices eith}^er^oⁿ^th^{e b}^a^{sis o}^f^itsⁱⁿ^q^u^alif^yⁱⁿ^g^h^o^spⁱ^t^{als eith}^er^oⁿ^th^{e b}^a^sis
^r^easoⁿ^ab^{le co}^{sts (}^w^ith^o^u^{t r}^e^g^a^r^d^to^th^e^o^f^{its r}^easoⁿ^ab^{le co}^{sts (}^w^ith^o^u^{t r}^e^g^a^r^d^to
^am^ouⁿ^t^of^cu^s^t^om^ary^ch^arg^e^s⁾^{or u}^s^ing^a^th^e^am^ouⁿ^t^of^cu^s^t^om^ary^ch^arg^e^s⁾^or^u^sⁱⁿ^g
^tar^g^{et am}^o^uⁿ^t^.^T^h^{e p}^r^o^j^{ect w}^{ill b}^e^th^{e res}^p^ectiv^e^p^r^o^s^p^e^c^tⁱ^v^{e pay}^m^en^t
ⁱ^m^pl^em^en^t^e^{d n}^o^t^l^a^t^e^{r t}^h^an^Jan^u^a^ry^{1, 2005}^s^y^s^t^em^s^f^o^{r th}^os^{e s}^e^rv^ices^{. In}^th^isⁱⁿ^s^t^an^ce,
^an^{d n}^o^t^bef^o^{re O}^c^t^{ober 1, 2004. T}^h^e^reas^on^abl^e^c^o^s^t^reim^bu^rs^em^en^{t of}^capital
^p^r^o^j^ect^w^o^u^l^{d be bu}^dg^etⁿ^e^u^t^ral^.^C^e^rt^aⁱⁿ^cos^t^s^w^o^u^l^{d in}^clu^d^{e a r}^e^tu^rn^on^equ^ity
^lⁱ^m^{its o}ⁿ^b^eⁿ^e^fⁱ^ciar^y^co^st-^s^h^a^rⁱⁿ^g^w^{ill b}^e^pay^m^en^t^of^150%^of^t^h^{e av}^erag^{e rat}^e^of
^im^p^o^s^ed^{. T}^h^{e Secr}^etar^y^w^{ill su}^b^mⁱ^t^aⁱⁿ^ter^e^{st p}^a^id^b^y^t^h^e^HI^T^r^u^s^{t Fu}ⁿ^d^{. T}^h^e
^report^wⁱ^t^h^recom^m^eⁿ^d^atⁱ^oⁿ^s^t^o^C^ongres^s^proj^ect^w^o^u^l^{d be b}^u^d^g^e^tⁿ^e^u^t^ral^.^C^e^rt^aiⁿ
ⁿ^o^later^th^an⁶^m^oⁿ^t^h^s^af^ter^co^m^p^letioⁿ^o^f^lⁱ^mⁱ^t^s^oⁿ^b^e^ne^fi^cⁱ^a^r^y^c^o^st^-sha^rⁱ^{ng w}^o^ul^d^b^e
ⁱ^{ki/CRS-RL32005}^th^{e proj}^ectⁱ^m^pos^ed.
^g/w^s^u^{re s}^t^atus^as^long-term^hos^p^itals^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^416.^T^h^e^Secr^e^t^a^r^y^w^o^u^l^dⁿ^o^t^b^e^N^o^provⁱ^sⁱ^oⁿ^.
^s^.or^p^ital^-in-hos^p^itals^.^A^ab^{le to}^im^p^o^s^e^an^y^sp^{ecial co}ⁿ^d^itioⁿ^s^oⁿ
^le^ak^sp^ital-ⁱⁿ^-^a^-^h^o^s^p^{ital is a lo}ⁿ^g^-^ter^m^car^e^t^h^{e operat}ⁱ^oⁿ^,^sⁱ^ze^,ⁿ^u^m^{ber of}^beds^{, or}
^sp^{ital th}^{at is p}^h^y^s^ically^lo^catedⁱⁿ^an^lo^catioⁿ^o^f^an^ex^istin^g^loⁿ^g^-^t^er^m^h^o^sp^ital
^://wiki^{te car}^{e h}^o^sp^{ital. CMS h}^a^{s estab}^lish^e^dⁱⁿ^o^r^d^e^r^to^coⁿ^tin^u^e^p^a^r^ticip^atin^gⁱⁿ
^h^ttp^tain^r^e^q^u^ir^em^en^{ts f}^o^r^th^{ese en}^{tities to}^Medi^{care or Medi}^cai^{d or t}^o^con^tⁱⁿ^u^e^beiⁿ^g
^clu^d^{ed f}^r^om^th^{e IP}^P^S^an^{d be paid as}^cl^a^ssifⁱ^ed^{as a lo}ⁿ^g^-^ter^m^h^o^sp^{ital. T}^h^e
ⁿ^g^-^ter^m^h^o^sp^{ital. I}^t^ex^em^p^t^ed^Se^c^r^et^ary^w^o^u^l^{d n}^o^t^{be abl}^e^t^o^adopt^a
^istin^g^en^{tities (}^t^h^o^{se th}^{at w}^e^r^eⁱⁿ^propos^{ed reg}^u^l^atⁱ^oⁿ^t^h^at^w^o^u^l^{d i}^m^pl^em^en^t
ⁱ^s^t^eⁿ^{ce on}^{or bef}^o^{re S}^e^pt^em^{ber 30,}^su^ch^coⁿ^d^itioⁿ^s^o^r^aⁿ^y^r^e^vⁱ^sioⁿ^to^su^ch
^h^en^t^h^es^{e requ}ⁱ^r^em^en^t^s^w^e^re^reg^u^l^ation^th^{at h}^a^v^e^{a com}^p^{arable ef}^f^ect.
^t^a^blⁱ^s^h^e^{d. O}ⁿ^May^{19, 2003, C}^M^S^[D^u^p^lⁱ^cat^{e prov}ⁱ^sⁱ^oⁿⁱ^s^at^S^ectⁱ^oⁿ^420B]
^{ed t}^h^at^{a g}^r^an^df^at^h^e^{red h}^o^s^pⁱ^t^a^l^-
^a^h^o^s^pⁱ^t^a^l^w^o^u^l^{d on}^l^y^{be ex}^em^pt^f^r^om
^istin^g^r^e^q^u^ir^em^en^{ts if}^{it co}ⁿ^tin^u^e^s
^p^e^r^a^{te w}^ithⁱⁿ^th^{e sam}^e^ter^m^{s an}^d
ⁿ^d^itioⁿ^s^th^{at w}^e^r^eⁱⁿ^ef^f^{ect as o}^f
^pt^em^{ber 30, 1995.}
^tablis^{h s}^p^ecia^l^treatm^{ent for certain}^S^ecti^oⁿ^508(f)^{. R}^eclas^sⁱ^fⁱ^cation^s^o^f^a^S^ecti^oⁿ^417.^S^t^artⁱⁿ^g^O^c^t^{ober 1, 2003,}^N^o^provⁱ^sⁱ^oⁿ^.

^ti^ti^es^.^Uⁿ^lⁱ^k^{e ot}^h^e^{r prov}ⁱ^d^ers^,^ac^ut^e^couⁿ^t^y^or^area^m^a^{de by}^an^A^c^{t of}^C^oⁿ^g^r^es^s^I^r^e^d^e^l^l^Co^unt^y^aⁿ^d^Ro^w^a^{n Co}^unt^y^,^N^o^r^t^h
^sp^{itals m}^a^y^ap^p^l^y^to^th^{e Med}ⁱ^car^e^t^h^at^ex^pi^{red on}^S^e^pt^em^{ber 3}⁰^,^{2003 s}^h^al^l^C^a^rolⁱⁿ^a^w^o^u^l^{d be deem}^{ed to be}^locatedⁱⁿ

CRS-32
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^raph^{ic C}^l^as^sⁱ^fⁱ^cation^R^e^vi^ew^B^o^ard^{be rei}ⁿ^s^t^at^{ed s}^t^artⁱⁿ^g^oⁿ^J^aⁿ^u^a^ry^{1, 2004}^th^{e Ch}^ar^lo^tte-^G^astoⁿⁱ^a-^Ro^ck^{Hill, NC-}^S^C
^R^B^{) f}^o^{r a ch}^an^g^eⁱⁿ^clas^sⁱ^fⁱ^cation^t^h^r^o^{ugh Se}^p^t^e^m^b^e^r³⁰^,^2004.^Metr^o^p^o^litan^St^a^t^{istical A}^r^{ea f}^o^r^th^e
^{a ru}^{ral area to an}^u^r^baⁿ^{area, or}^pu^rp^o^s^{e of}^Medicare’^sⁱⁿ^patien^t^an^d
^s^sⁱ^gⁿ^m^en^{t f}^r^om^on^{e u}^r^ban^{area to}^o^u^tp^atien^t^acu^{te h}^o^sp^{ital p}^a^y^m^en^{ts as w}^e^ll
^oth^e^{r u}^r^ban^area.^Hos^p^ital^as^S^N^F^an^{d h}^o^m^e^h^ealth^pay^m^en^ts^{. T}^h^e
^sⁱ^fication^s^{are es}^tablis^h^e^{d on}^a^Secretary^w^o^u^l^{d be requ}^ired^t^o^adj^u^s^t^th^e
^dg^{et n}^e^u^t^ral^basⁱ^s^s^o^ag^g^r^eg^{ate in}^patien^t^w^a^g^eⁱⁿ^d^e^x^v^a^lu^es^o^f^{all h}^o^sp^{itals in}^No^r^t^h
^pectⁱ^v^{e pay}^m^en^t^s^y^s^t^em^expen^dⁱ^t^u^res^C^a^rolin^{a to as}^s^u^{re th}^{at ag}^g^r^eg^ate^pay^m^en^ts
^o^tⁱⁿ^c^r^{ease as a r}^e^su^{lt. A}^s^id^{e f}^r^o^m^f^o^r^h^o^sp^{ital in}^p^a^tien^t^o^p^e^r^atin^g^co^{sts ar}^e
^l^a^ssi^fi^c^a^tⁱ^o^ns^t^h^r^o^{ugh t}^h^e^M^G^CRB^,ⁿ^o^{t g}^r^{eater th}^an^th^ey^w^o^u^l^{d h}^a^ve^been
^s^p^itals^h^a^v^e^als^o^b^e^en^reclas^sⁱ^fⁱ^{ed by}^w^ith^ou^{t s}^u^ch^{a ch}^an^g^e^:^als^o^ag^g^r^eg^ate
^.^pa^y^m^en^ts^f^o^{r SNF an}^{d h}^o^m^e^h^ealth
^ser^v^{ices in}^No^r^t^h^Car^o^lin^{a w}^o^u^l^dⁿ^o^{t b}^e
^g^r^{eater th}^an^th^ey^w^o^u^l^d^h^a^v^e^been^w^ith^ou^t
ⁱ^{ki/CRS-RL32005}^s^u^ch^{a ch}^an^g^e^.
^g/w^mⁱ^{t charg}^e^s^{for contract health}^S^ecti^oⁿ^506.^Ho^sp^{itals th}^{at p}^a^r^ticip^at^eⁱⁿ^S^e^c^tⁱ^oⁿ^412.^T^h^{e am}^en^dm^en^{t w}^o^u^l^d^N^o^provⁱ^sⁱ^oⁿ^.

^s^.or^provⁱ^d^e^d^t^o^Iⁿ^dⁱ^aⁿ^s^b^y^{Medicare an}^{d th}^{at provi}^d^e^Medicare^prohⁱ^bⁱ^t^Medi^{care prov}ⁱ^d^ers^f^r^om^ch^argⁱⁿ^g
^le^ak^rt^icipa^t^ing^ho^spit^a^l^s^{. T}^h^{e In}^dian^co^v^e^r^e^dⁱⁿ^p^a^tien^t^h^o^s^p^{ital ser}^v^{ices u}ⁿ^d^er^th^{e In}^dian^Health^Serv^{ice m}^o^{re th}^an^th^e
^S^e^rv^{ice (IHS) prov}^ides^h^ealth^care^th^{e con}^t^{ract h}^ealth^s^e^rv^ices^prog^ram^Medⁱ^c^a^r^e^-^e^stab^lish^e^d^r^a^{tes f}^o^rⁱⁿ^p^a^tien^t
^://wiki^t^{h d}ⁱ^r^e^c^t^l^y^,^t^h^r^o^{ugh t}^rⁱ^b^e^s^aⁿ^d^t^rⁱ^b^a^l^fun^d^{ed by}^th^{e In}^dian^Health^Serv^ices^an^d^h^o^sp^{ital ser}^v^ices.
^h^ttp^nso^r^tⁱ^a^,^aⁿ^d^t^h^r^o^{ugh ur}^b^a^{n I}ⁿ^dⁱ^aⁿ^{operated by}^th^e^Iⁿ^dⁱ^an^Health^Serv^{ice, an}
^gaⁿⁱ^z^a^tⁱ^o^ns.^Iⁿ^dⁱ^an^tr^ib^{e, an}^Iⁿ^dⁱ^aⁿ^tr^ib^{al o}^r^g^aⁿⁱ^zatioⁿ^,
^o^r^an^u^r^b^aⁿ^Iⁿ^dⁱ^an^o^r^g^aⁿⁱ^zatioⁿ^w^{ill b}^e
^{paid in}^accordan^{ce w}^ith^reg^u^l^ation^s
^prom^u^l^g^a^t^e^{d by}^t^h^{e S}^ecret^a^r^y^reg^a^rdiⁿ^g
^admⁱ^s^sⁱ^on^practices^{, pay}^m^en^t
^m^e^t^h^odol^ogⁱ^e^s^,^an^d^rat^e^s^of^pay^m^en^t^s^.
^T^h^{is w}^{ill in}^clu^d^{e th}^{e req}^u^irem^en^{t to}^accep^t
^th^{ese r}^a^{tes as p}^a^y^m^en^{t in}^f^u^{ll ex}^cep^{t f}^o^r^th^e
^pay^m^en^t^r^a^tes^f^o^{r n}^e^on^{atal care. T}^h^is
^p^r^o^vⁱ^s^ioⁿ^w^{ill ap}^p^l^y^to^Medⁱ^car^e
^participati^oⁿ^ag^reem^en^tsⁱⁿ^ef^f^{ect or}
^en^t^e^{red i}ⁿ^t^o^by^{a dat}^e^s^p^ecⁱ^fⁱ^e^{d by}^t^h^e
^Secr^etar^y^.^Iⁿⁿ^o^{case w}^{ill th}^{is d}^a^te^b^e^later
^th^an^{1 y}^{ear af}^{ter th}^{e date of}^en^actm^eⁿ^t^.

CRS-33
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^{t on clerical erro}^r^{into HI}^S^ecti^oⁿ^734.^T^h^{e Secretary}^of^th^e^T^r^eas^u^r^y^S^ecti^o^{n 623.}^A^f^ter^coⁿ^s^u^ltatioⁿ^w^ith^th^e^S^ecti^oⁿ^513.^S^a^m^e^provⁱ^sⁱ^oⁿ^.
^F^und.^Aⁿⁱⁿ^{correct am}^ouⁿ^t^of^{is r}^e^q^u^ir^ed^to^tr^an^sf^erⁱⁿ^to^th^{e HI}^T^r^u^s^t^Secreta^r^y^of^{HHS, th}^{e Secretary}^of^th^e
^m^e^w^a^{s tr}^an^sf^er^r^e^dⁱⁿ^to^th^{e HI}^T^r^u^s^t^Fund^aⁿ^a^m^o^unt^t^h^a^t^w^o^ul^d^ha^ve^b^e^eⁿ^he^l^d^T^r^easu^r^y^w^o^u^l^d^b^e^r^e^q^u^ir^ed^to^tr^an^sf^erⁱⁿ^to
ⁿ^dⁱⁿ^A^p^{ril 2001, becau}^s^e^of^{a cler}ⁱ^c^a^l^by^th^{at f}^uⁿ^d^if^th^{e cleric}^a^l^{error h}^a^{d n}^o^t^th^{e HI}^T^r^us^{t f}^uⁿ^d^an^am^ouⁿ^t^th^{at w}^o^u^l^d
^o^r^.^Aⁿ^ad^d^itioⁿ^a^l^a^m^o^uⁿ^t^w^a^s^occu^rred.^T^h^{e appropri}^a^tⁱ^oⁿⁱ^s^t^o^be^m^a^de^ha^ve^been^h^e^{ld by}^th^{at f}^uⁿ^d^if^th^{e cleri}^c^a^l
^sf^er^r^e^dⁱⁿ^to^th^{e HI}^T^r^u^s^{t Fu}ⁿ^dⁱⁿ^an^{d t}^r^an^s^f^{er i}^s^requⁱ^r^{ed w}ⁱ^t^hⁱⁿ^{120 day}^s^of^{error h}^a^{d n}^o^t^occu^{rred w}ⁱ^t^hⁱⁿ^{120 day}^s^of
^{ber, 2001 to}^{correct f}^o^{r th}^{e prin}^cipal^en^actm^eⁿ^t^of^th^is^A^c^t.^Iⁿ^t^h^{e cas}^{e of}^a^en^actm^eⁿ^t^.
^ouⁿ^t^as^s^o^ciated^wⁱ^t^h^t^h^e^e^r^ror.^{clerical error th}^{at occu}^rs^a^f^{ter A}^p^{ril 15,}
^rrectⁱ^oⁿ^of^th^{e in}^teres^t^as^s^o^{ciated w}^ith^2001,^t^h^{e S}^ecret^ary^of^t^h^{e T}^r^eas^u^r^yⁱ^s
^ires^legⁱ^s^l^ation^.^requⁱ^r^ed^t^o^no^tⁱ^f^y^t^h^e^appropri^a^t^e
^com^mⁱ^t^t^ees^of^C^oⁿ^g^r^es^s^abou^{t th}^{e error}
^an^{d t}^h^{e act}ⁱ^ons^t^o^{be t}^a^k^eⁿ^,^bef^o^{re s}^u^ch
^actioⁿ^{is tak}^eⁿ^.
ⁱ^{ki/CRS-RL32005}^t^h^{e O}^ccupa^tⁱ^oⁿ^a^l^Sa^f^e^t^y^aⁿ^d^th^A^c^{t of 1970 (OS}^H^A⁾^b^l^ood^b^o^rn^e^{Section 947}^.^P^u^b^{lic h}^o^sp^{itals, n}^o^t^oth^e^rw^is^{e s}^u^bj^{ect to th}^{e Occu}^patⁱ^oⁿ^a^l^N^o^provⁱ^sⁱ^oⁿ^.^Se^cti^oⁿ^947.^A^s^of^Ju^l^y^{1, 2004,}^p^u^b^lⁱ^c^h^o^s^p^itals^th^{at are not oth}^e^rw^is^{e s}^u^bj^{ect to}
^g/w^t^h^o^g^e^{ns st}^a^nda^{rd t}^o^{public ho}^spit^a^l^s^.^S^a^f^e^t^y^an^{d H}^eal^t^h^A^c^t^of^1970,^a^r^e^OSHA^w^o^u^l^d^b^e^r^e^q^uⁱ^r^e^d^to^co^m^p^ly^w^ith
^s^.orⁱ^oⁿ¹⁸⁶⁶^of^t^h^{e S}^o^ci^al^S^ecu^ri^t^y^A^c^t^r^e^q^u^ir^ed^to^co^m^p^ly^w^ith^th^{e B}^l^o^o^d^b^o^rⁿ^e^t^h^{e Bl}^oodborn^e^Pat^h^og^en^s^s^t^an^{dard u}ⁿ^d^er
^le^ak^t^a^b^lⁱ^s^h^e^s^c^e^r^t^aⁱⁿ^c^oⁿ^d^itioⁿ^s^o^f^P^a^t^h^og^en^s^s^t^an^{dard u}ⁿ^d^{er s}^e^c^tⁱ^oⁿ^Section^{1910.1030 of}^T^itle²⁹^of^th^e^C^ode
^r^ticip^a^tioⁿ^th^{at h}^o^sp^{itals m}^u^{st m}^{eet in}^{1910.1030 of}^{title 29}^o^f^th^{e C}^{ode of}^of^Feder^a^l^Regul^atⁱ^ons^.^A^h^o^sp^{ital th}^at
^://wiki^d^e^r^to^p^a^r^ticip^{ate in}^Medⁱ^car^e.^Fed^e^r^a^{l Reg}^u^l^atioⁿ^s^{. A}^h^o^sp^it^a^l^th^{at f}^a^ils^f^a^{ils to}^co^m^p^ly^w^ith^th^{e r}^e^q^u^ir^em^en^{t w}^o^u^l^d
^h^ttp^to^co^m^p^ly^w^ith^th^{e r}^e^q^u^ir^em^eⁿ^{t w}^{ill b}^e^b^e^su^b^j^{ect to}^a^civ^il^m^oⁿ^e^tar^y^p^eⁿ^a^lty^{, b}^u^t
^su^b^j^{ect to}^{a civ}^{il m}^oⁿ^e^tar^y^p^eⁿ^a^lty^{, b}^u^t^w^o^u^l^dⁿ^o^{t b}^e^ter^mⁱⁿ^ated^f^r^o^m^p^a^r^ticip^atin^g
^canⁿ^o^t^b^e^ter^mⁱⁿ^ated^f^r^o^m^p^a^r^ticip^atin^gⁱⁿⁱⁿ^Medicare.

^{Medicare. T}^h^{e prov}^is^ion^app^lⁱ^e^s^to
^h^o^s^pⁱ^t^a^l^s^as^of^Ju^l^y^{1, 2004.}

CRS-34
ovisions Relating to Part B
^Ph^y^s^ician^an^d^Pract^it^ioⁿ^e^{r Serv}^ices.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^tab^lⁱ^s^h^fl^{oor on}^geogr^ap^hⁱ^c^S^ecti^oⁿ^412.^T^h^{e Secretary}^is^requ^{ired to}^S^ecti^o^{n 421.}^{For s}^e^rv^ices^f^u^rn^is^h^e^{d af}^ter^S^ecti^oⁿ^605(a).^F^o^{r s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^d
^j^u^st^m^e^nt^f^o^{r phy}^siciaⁿ^f^e^{e schedule}^.ⁱⁿ^creas^e^th^{e v}^a^lu^{e of}^an^y^w^o^rk^g^e^og^raph^ic^Jan^u^a^ry^{1, 2004, t}^h^{e S}^ecret^ary^w^o^u^l^{d be}^af^t^e^{r Jan}^u^a^ry^1,²⁰⁰⁴^an^{d bef}^o^{re Jan}^u^a^ry^1,
^e^dⁱ^c^a^r^e^’^{s p}^a^ymeⁿ^t^f^o^r^p^h^ysⁱ^cⁱ^a^ns’ⁱⁿ^d^e^x^t^h^atⁱ^s^bel^o^w^{1.0 t}^o^{1.0 f}^o^{r s}^e^rvⁱ^ces^requ^{ired to in}^creas^{e th}^{e v}^a^lu^{e of}^an^y^w^o^rk²⁰⁰^{6, t}^h^{e S}^ecret^ary^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o
^rv^ices^uⁿ^d^{er a f}^{ee s}^c^h^e^du^{le h}^a^s^th^ree^f^u^rnⁱ^s^h^e^{d on}^{or af}^t^e^{r Jan}^u^a^ry^{1, 2004 an}^d^g^e^og^raphⁱ^cⁱⁿ^dex^t^h^atⁱ^s^bel^o^w^{.980 t}^oⁱⁿ^creas^e^th^{e v}^a^lu^{e of}^an^y^w^o^rk^g^e^og^raph^ic
^m^p^oⁿ^en^{ts: th}^{e r}^e^lativ^{e v}^a^lu^{e f}^o^r^th^e^bef^o^{re Jan}^u^a^ry^{1, 2007}^.980.^T^h^e^v^a^l^u^es^f^o^{r w}^o^rkⁱⁿ^dex^w^o^u^l^d^beⁱⁿ^dex^t^h^atⁱ^s^bel^o^w^{1.00. t}^o^{1.00 u}ⁿ^l^es^s^t^h^e
^rv^{ice, g}^e^og^raph^{ic adj}^u^s^t^m^eⁿ^t^f^actors^an^d^rai^s^{ed t}^o^1.0^f^o^r^s^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^{d i}ⁿ^2005,^S^ecretary^determⁱⁿ^es^{, bas}^e^{d on}^th^e
^v^e^rs^ion^f^{actor in}^to^{a dollar am}^ouⁿ^t^.^{2006, an}^{d 2007.}^T^h^e^practⁱ^{ce ex}^pen^s^{e an}^d^sub^s^e^q^ue^nt^G^A^O^st^ud^y^w^hⁱ^c^{h i}^s^d^u^e^b^y
^{e g}^e^og^raph^ic^adj^u^s^t^m^eⁿ^t^f^actors^are^m^a^lp^r^{actice g}^e^o^g^r^a^p^h^{ic in}^dⁱ^{ces in}^lo^w^S^e^pt^em^{ber 1, 2004, t}^h^at^t^h^e^r^eⁱ^sⁿ^o^s^o^uⁿ^d
^th^{at ref}^l^{ect th}^{e relativ}^{e cos}^t^v^a^lu^{e lo}^calitie^s^ar^{eas w}^o^u^l^d^b^e^r^a^ised^to^econ^o^mⁱ^{c ration}^a^{le f}^o^{r s}^u^ch^ch^an^g^e^.
^f^e^ren^{ce in}^{a g}ⁱ^v^eⁿ^{area in}^com^p^aris^on^to^{1.00 f}^o^{r s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^dⁱⁿ^{2005 u}ⁿ^tⁱ^l
ⁱ^{ki/CRS-RL32005}^a^tion^a^{l av}^erag^e^2008.
^g/w^creas^e^{practice ex}^pens^e^paym^ents^for^S^ecti^o^{ns 303(a) an}^d^304.^B^e^giⁿⁿⁱ^{ng i}ⁿ^S^ecti^oⁿ^432(b^)(1).^T^h^{e Secretary}^w^o^u^l^d^S^ecti^oⁿ^303(a)^T^h^{e Secretar}^y^w^o^u^l^d
^s^.or^p^ecialis^ts^{. T}^h^{e r}^e^lativ^{e v}^a^lu^e^{2004, t}^h^{e pract}ⁱ^{ce ex}^pen^s^{e rel}^a^tⁱ^v^{e v}^a^l^u^e^es^tab^lish^th^{e p}^r^{actice ex}^p^eⁿ^s^{e r}^e^lativ^eⁱⁿ^creas^{e th}^{e practice}^e^xpen^s^{e relativ}^e
^le^ak^s^o^{ciated w}^ith^{a partic}^u^l^{ar ph}^y^s^ician^uⁿ^{its f}^o^r^oⁿ^co^lo^g^y^ad^mⁱⁿⁱ^str^a^tioⁿ^ser^v^ices^v^a^l^u^es^f^o^{r t}^h^{e C}^Y²⁰⁰⁴^f^{ee s}^c^h^e^du^l^e^u^sⁱⁿ^g^v^a^l^u^e^s^f^o^r^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^{le in}
^://wiki^rv^{ice is}^th^{e s}^u^m^of^th^{ree com}^pon^en^ts^on^e^w^h^ich^is^pra^c^t^{ice ex}^pen^s^{e. P}^r^actice^w^{ill b}^e^ad^j^u^sted^u^sⁱⁿ^g^su^r^v^ey^d^a^{ta th}^at^w^a^s^col^l^e^c^t^{ed as}^of^Jan^u^a^ry^{1, 2003 (t}^hⁱ^s^dat^a^th^{e su}^r^v^ey^d^a^{ta f}^r^o^m^a^p^h^y^s^ician^sp^ecialty^g^r^ou^{p as}^of^J^aⁿ^u^a^ry^{1, 2003 i}^f^t^h^{e dat}^a^C^Y²⁰⁰⁵^u^sⁱⁿ^g^appropri^a^t^e^s^u^rv^ey^dat^a^on^t^h^{e ex}^pen^s^es^as^s^o^{ciated w}^ith^d^r^u^g
^h^ttp^pen^s^eⁱⁿ^clu^d^es^both^{direct cos}^t^s^(s^u^c^h^as^w^a^s^su^b^m^itted^b^y^th^{e A}^m^er^ican^So^ciety^o^f^{appropriately}^cov^e^rs^th^{e practice ex}^pen^s^es^ad^mⁱⁿⁱ^s^t^r^a^tioⁿ^p^r^o^v^id^ed^b^y^en^{tities an}^d
^ician^’^{s tim}^{e an}^d^th^{e m}^e^dⁱ^cal^su^p^p^lies^Clin^{ical On}^co^lo^gⁱ^sts)^;^t^h^e^ad^d^itioⁿ^a^l^f^o^{r on}^colog^y^admⁱⁿⁱ^s^t^ration^s^e^rv^ices^.^T^h^e^o^r^g^aⁿⁱ^zatioⁿ^s^th^{at ar}^{e su}^b^m^itted^b^y
^vⁱ^d^e^{a s}^p^ecifⁱ^{c s}^e^rv^{ice to a patien}^t⁾^ex^p^eⁿ^d^itu^r^e^{s w}^{ill b}^e^ex^em^p^t^f^r^o^m^th^e^Secretary^w^o^u^l^d^revⁱ^ew^an^{d appropriately}^Decem^{ber 31, 2004}^.^Usⁱⁿ^g^ex^is^tin^g
^{d in}^{direct cos}^t^s^(s^u^c^h^as^ren^t^aⁿ^d^bu^dg^{et n}^e^u^t^rality^requ^irem^en^{t in}^{2004. T}^h^e^m^o^dⁱ^f^y^p^a^y^m^en^{ts f}^o^r^th^e^ad^mⁱⁿⁱ^str^a^tioⁿ^o^f^proces^s^e^s^f^o^{r codin}^g^con^s^ideration^s^{, th}^e
^{. B}^B^R^A^r^e^q^u^ir^ed^th^{e Secr}^etar^y^to^w^o^r^k^r^e^lativ^{e v}^a^lu^{e u}ⁿ^{its f}^o^r^d^r^u^g^m^o^{re th}^an^on^{e an}^ti-^can^{cer ag}^en^t^{to a}^Secretary^w^o^u^l^{d ev}^alu^a^{te ex}^is^tin^g^c^o^des
^lish^{a d}^a^{ta co}^llectioⁿ^p^r^o^cess^an^d^ad^mⁱⁿⁱ^str^a^tioⁿ^s^e^r^v^{ices f}^u^rⁿ^ish^e^d^oⁿ^o^r^p^a^tien^tⁱⁿ^{a d}^a^y^.^T^h^{e r}^e^su^ltin^gⁱⁿ^cr^e^a^s^{e in}^f^o^{r dru}^g^admⁱⁿⁱ^s^t^ration^{to en}^s^u^{re accu}^rate
^dards^f^o^{r determ}ⁱⁿⁱⁿ^g^{practice ex}^pen^s^e^af^{ter J}^aⁿ^u^a^ry^{1, 2004 w}^{ill be equ}^a^{l to th}^e^s^p^en^diⁿ^g^w^o^u^l^{d be ex}^em^p^t^f^r^om^t^h^e^r^e^p^o^r^tiⁿ^g^an^d^b^illin^g^f^o^r^th^{ese ser}^v^ices.
^{e v}^a^lu^{es as}^w^e^l^l^{as to}^u^s^{e d}^a^ta^w^o^r^k^r^e^la^tⁱ^v^e^v^a^lu^{e u}ⁿ^{its f}^o^r^{a lev}^e^{l 1}^b^u^d^g^{et n}^e^u^t^r^a^lity^r^e^q^u^ir^em^en^{t. A}^l^so^,^t^h^e^Aⁿ^y^res^u^l^tⁱⁿ^g^C^Y^{2005 pay}^m^en^tⁱⁿ^creas^e
^l^ect^ed^{or dev}^e^l^{oped ou}^t^sⁱ^d^{e H}^H^S^,^t^o^t^h^e^o^f^fⁱ^{ce m}^e^dⁱ^{cal v}ⁱ^{sit f}^o^r^aⁿ^e^s^tab^lish^e^d^Secretary^w^o^u^l^d^ch^an^g^e^th^{e n}^oⁿ^-^ph^y^s^ician^w^o^u^l^dⁿ^o^{t b}^e^su^b^j^{ect to}^b^u^d^g^{et n}^e^u^t^r^a^lity
^xⁱ^m^u^m^ex^ten^t^p^r^a^c^ticab^{le, co}ⁿ^s^isten^t^patⁱ^eⁿ^t^.^S^t^artⁱⁿ^gⁱⁿ^{2005 t}^h^ro^ugh^{2006, t}^h^e^w^o^rk^pool^m^e^t^h^{od s}^o^t^h^at^a^sso^ci^at^ed^p^r^o^vⁱ^sⁱ^oⁿ^s^{, w}^o^u^l^{d be ex}^em^pt^f^r^om
^t^h^so^{und dat}^a^col^l^ectⁱ^oⁿ^practⁱ^ces^{. T}^h^e^{practice ex}^pen^s^{e relativ}^{e v}^a^lu^es^f^o^{r oth}^e^r^p^a^y^m^en^{ts ar}^{e n}^o^{t in}^o^r^dⁱⁿ^a^tely^r^e^d^u^ced^.^admⁱⁿⁱ^s^t^rativ^{e an}^{d j}^u^{dicial rev}ⁱ^ew^{, an}^d
^{e v}^a^lu^es^{are periodically}^revⁱ^e^w^ed^d^r^u^g^ad^mⁱⁿⁱ^str^a^tioⁿ^s^e^r^v^{ices w}^{ill b}^e^T^h^e^s^e^adj^u^s^t^m^e^nt^{s w}^o^ul^d^no^t^b^e^w^o^u^l^{d be treated as}^{a ch}^an^g^eⁱⁿ^l^a^w^aⁿ^d
^{d adj}^u^s^t^ed^{to accou}ⁿ^t^f^o^{r v}^a^riou^s^f^actors^;ⁱⁿ^creas^{ed in}^t^h^e^ph^y^s^ician^f^{ee s}^c^h^e^du^leⁱ^m^pl^em^en^t^e^{d u}ⁿ^l^es^s^ot^h^e^{r ou}^t^p^atⁱ^eⁿ^t^dru^g^r^e^g^u^l^atioⁿⁱⁿ^th^{e su}^stain^a^b^l^{e g}^r^o^w^th^r^a^te
^an^g^e^s^th^{at cau}^s^e^m^o^{re th}^an^{$20 m}^illion^u^sⁱⁿ^g^appropri^a^t^e^s^u^ppl^e^m^eⁿ^t^a^l^s^u^rv^ey^dat^a^p^r^icin^g^ch^an^g^e^{s in}^th^{e sectio}ⁿ^a^r^e^det^e^rmⁱⁿ^a^tⁱ^o^n.^Sub^s^e^q^ue^nt^b^u^d^g^e^t
^en^dⁱⁿ^g^tr^ig^g^e^r^{a b}^u^d^g^etⁿ^e^u^t^r^a^lity^s^u^bm^itted^b^y^M^a^rch^{1, 2004, f}^o^{r 2005, or}^im^plem^en^ted.ⁿ^e^u^t^r^a^lity^ad^j^u^stm^eⁿ^t^{s w}^o^u^l^d^b^e^p^e^r^m^itted^.
^u^s^t^m^eⁿ^t^.^March^{1, 2005}^fo^r²^{006. Data w}^{ill be}^T^h^{e s}^a^m^eⁿ^oⁿ^-^ph^y^sⁱ^cⁱ^aⁿ^w^o^rk^pool

CRS-35
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^a^{ccepted f}^r^om^th^os^{e s}^p^ecialis^ts^w^h^o^m^e^t^h^odol^og^y^provⁱ^sⁱ^oⁿ^a^sⁱⁿ^S^.^{1 i}^s
^receiv^e^{d 40% or m}^o^{re of}^th^eⁱ^r^Medicareⁱⁿ^clu^d^ed.
^p^a^y^m^en^t^sⁱⁿ^{2002 f}^r^om^dru^g^s^an^d
^bⁱ^ol^ogⁱ^cal^s^.^T^h^e^e^xⁱ^s^tⁱ^{ng d}^r^ug
^ad^mⁱⁿⁱ^str^a^tioⁿ^co^d^e^{s w}^{ill b}^e^ev^alu^a^ted
^uⁿ^d^er^ex^istin^g^p^r^o^cesses^af^ter^coⁿ^s^u^ltatioⁿ
^w^ithⁱⁿ^ter^e^sted^p^a^r^ties.^T^h^es^e^a^d^ju^s^t^m^eⁿ^t^s
ⁱⁿ^p^r^{actice ex}^p^eⁿ^s^{e r}^e^lativ^{e v}^a^lu^{e u}ⁿ^{its f}^o^r
^certain^d^r^ug^admⁱⁿⁱ^s^t^ration^s^e^rv^ices^are
^ex^em^p^t^f^r^o^m^th^e^b^u^d^g^e^tⁿ^e^u^t^r^a^lity
^requⁱ^r^em^en^t^sⁱⁿ^{2005, 2006, an}^{d 2}⁰^07.
^T^h^{e Secretary}^can^adj^u^s^t^{practice e}^xpen^s^e
^pay^m^en^tsⁱⁿ^s^u^bs^equ^eⁿ^t^y^ear^s^,^s^u^bj^{ect to}
ⁱ^{ki/CRS-RL32005}^th^{e b}^u^d^g^{et n}^e^u^t^r^a^lity^p^r^o^v^isioⁿ^s^{. T}^h^e^ef^f^ect^of^t^h^{e n}^oⁿ^p^h^y^sⁱ^ci^an^w^o^rk^pool
^g/w^m^e^t^h^o^d^o^l^o^g^y^w^{ill n}^o^{t b}^e^c^h^aⁿ^g^e^d^.
^s^.or^M^e^dicare’^s^pay^m^en^{t policy}ⁱⁿ^ef^f^{ect on}
^le^ak^O^c^t^{ober 1, 2003, f}^o^{r t}^h^{e adm}ⁱⁿⁱ^s^t^ratⁱ^oⁿ^of
^m^o^{re t}^h^an^on^{e dru}^g^{or bi}^ol^ogⁱ^cal^t^o^aⁿ
^://wikiⁱⁿ^dⁱ^vi^d^u^a^l^oⁿ^a^si^ngl^e^d^a^y^t^h^r^o^ugh^t^h^e^p^u^sh
^h^ttp^t^e^chⁿⁱ^q^u^{e w}^{ill b}^e^m^o^dⁱ^fⁱ^ed^an^d^th^e
ⁱⁿ^cr^eased^p^a^y^m^en^t^s^w^{ill b}^e^ex^em^p^t^f^r^o^m
^th^{e bu}^dg^et-ⁿ^eu^trality^requ^irem^en^tⁱⁿ^2004.
^A^tr^an^sitioⁿ^a^{l ad}^j^u^stm^eⁿ^t⁽^o^r^ad^d^itioⁿ^a^l
^pay^m^en^t⁾^of^32%ⁱⁿ²⁰⁰⁴^an^d^3%ⁱⁿ²⁰⁰⁵
^w^{ill b}^e^m^a^d^e^.
^creas^e^paym^ents^{to phys}ⁱ^ciansⁱⁿ^Se^cti^oⁿ^413.^C^e^rt^aiⁿ^ph^y^sⁱ^cⁱ^aⁿ^s^{, bot}^h^S^ecti^oⁿ^422.^T^h^{e Secreta}^r^y^w^o^u^l^{d be}^S^ecti^oⁿ^417.^Sam^e^p^r^o^v^isioⁿ^w^ith^r^e^sp^ect
^l^{y created s}^c^{arcity areas}^;^change^prim^ary^{care an}^{d s}^p^ecialis^ts^,ⁱⁿ^s^carcity^r^e^q^u^ir^ed^to^estab^lish^p^r^o^ced^u^r^{es to}^{to Secretary}^dev^e^lopⁱⁿ^g^procedu^r^es^to
^e^dⁱ^car^e^Iⁿ^cen^ti^{ve Program}^(M^I^P^).^ar^ea^{s ar}^{e elig}^ib^{le f}^o^r^an^ad^d^itioⁿ^a^{l 5}^%^determⁱⁿ^{e w}^h^en^{a ph}^y^sⁱ^cⁱ^aⁿⁱⁿ^{a HP}^SA^is^id^en^tif^y^p^h^y^s^ician^s^elig^ib^{le f}^o^r^b^oⁿ^u^s
^y^s^ician^s^p^r^o^v^idⁱⁿ^g^ser^v^icesⁱⁿ^{a h}^ealthⁱⁿ^creas^eⁱⁿ^pay^m^en^ts^s^t^artin^g^on^J^aⁿ^u^a^ry^1,^elig^ib^{le f}^o^r^{a b}^oⁿ^u^s^p^a^y^m^en^{t. T}^h^e^pay^m^en^t^s^{. A}^l^s^o^{, ph}^y^sⁱ^cⁱ^a^{ns i}ⁿⁿ^e^w^l^y^-
^es^sⁱ^on^{al s}^h^ortag^e^{area (HP}^S^A⁾^are^{2005 an}^{d en}^diⁿ^g^by^Jan^u^a^ry^{1, 2008.}^T^o^Secretary^w^o^u^l^{d als}^o^{be requ}^{ired to}^{created s}^carcity^areas^as^w^e^{ll as}^o^t^he^r
^titled^to^aⁿⁱⁿ^cen^tiv^{e p}^a^y^m^en^{t f}^r^o^m^th^e^determⁱⁿ^{e th}^{e s}^carcity^areas^{, th}^{e Secretary}^e^s^t^a^b^lⁱ^s^{h a}ⁿ^o^ngoⁱ^{ng e}^d^uc^a^tⁱ^o^{n p}^r^o^g^r^a^m^,^p^h^y^s^ician^s^w^o^u^l^d^b^e^elⁱ^g^ib^{le f}^o^r^an
^ram^.^T^h^isⁱⁿ^cen^tiv^e^w^{ill calcu}^lat^e^r^a^tio^{s o}^f^p^r^acticin^g^p^r^im^ar^y^aⁿ^o^ngoⁱ^{ng st}^ud^y^aⁿ^d^sub^mⁱ^t^aⁿⁿ^u^a^l^ad^d^itioⁿ^a^l⁵^%ⁱⁿ^cr^{ease in}^th^eir^f^e^e
^m^en^{t is}^a¹⁰^%ⁱⁿ^creas^{e ov}^{er th}^e^{care ph}^y^s^ician^s^an^{d s}^p^ecialis^ts^to^Medicare^report^s^{. A}^G^A^O^report^w^o^u^l^d^{be requ}ⁱ^r^ed^s^c^h^e^du^le^pay^m^en^{t am}^ouⁿ^t^s^.^T^h^{e Secretary}
^o^unt^w^hⁱ^c^h^w^o^ul^d^o^t^he^r^wⁱ^s^e^b^e^p^aⁱ^d^b^eⁿ^e^fⁱ^ciaries^,^ran^k^each^couⁿ^t^y^(orⁿ^o^{later th}^an^{1 y}^{ear f}^r^om^en^actm^eⁿ^t^.^w^o^u^l^d^also^b^e^r^e^q^u^ir^e^d^to^p^u^b^lish^{a list o}^f
^d^er^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^le.^equⁱ^va^l^eⁿ^t^{area) accordin}^g^{to each}^ratio,^{all areas}^th^{at qu}^alif^y^as^{a HP}^SA^eac^h^y^ear

CRS-36
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^an^{d th}^enⁱ^d^en^tif^y^th^os^{e areas}^w^ith^th^eⁱⁿ^t^h^{e propos}^{ed an}^{d f}ⁱⁿ^a^l^r^u^l^e
^lo^w^e^st^r^a^tio^{s w}^h^ich^co^llectiv^ely^r^e^p^r^esen^t^im^p^l^em^en^tin^g^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^le.
^{20% of}^th^{e total}^M^e^{dicare ben}^e^fⁱ^ciary
^popu^l^a^tⁱ^oⁿⁱⁿ^t^h^os^e^a^r^e^a^s^.^T^h^{e l}ⁱ^s^t^of
^c^o^uⁿ^{ties w}^{ill b}^e^r^e^vⁱ^sedⁿ^o^{less o}^f^ten^t^h^aⁿ
^on^{ce ev}^ery^{3 y}^ears^uⁿ^l^es^s^th^{ere are}ⁿ^oⁿ^e^w
^{data. T}^h^{ere w}ⁱ^l^l^{be n}^o^admⁱⁿⁱ^s^t^rativ^{e or}
^j^u^{dicial rev}ⁱ^ew^of^th^{e des}ⁱ^gⁿ^a^tion^of^th^e
^couⁿ^t^y^{or area as}^{a s}^carcity^{area, th}^e
^desⁱ^gⁿ^a^tⁱ^oⁿ^of^anⁱⁿ^di^vⁱ^du^al^ph^y^sⁱ^cⁱ^aⁿ^’^s
^s^p^ecialty^{, or th}^{e as}^sⁱ^gⁿ^m^en^{t of}^a^pos^tal^zip
^{code to th}^{e cou}ⁿ^t^y^or^o^t^he^r^{area. MIP}
^p^a^y^m^en^{ts to}^p^h^y^s^ician^sⁱⁿ^HP^SA^{s th}^at
ⁱ^{ki/CRS-RL32005}^c^oⁿ^sⁱ^s^t^o^f^eⁿ^tⁱ^r^e^c^o^uⁿ^tⁱ^e^s^w^ill^b^e^m^a^d^e^w^ith^o^u^t^r^e^q^u^irⁱⁿ^g^th^{e p}^h^y^s^ician^to^id^en^tif^y
^g/w^th^{e HP}^SA^w^h^en^requ^es^tin^g^pay^m^en^t.
^s^.or
^le^ak^vⁱ^se^r^e^a^ssigⁿ^m^e^nt^pr^ovi^sioⁿ^s^.^Se^c^tⁱ^oⁿ^952.^T^h^{e b}^{ill p}^e^r^m^{its Med}ⁱ^car^e^S^ecti^oⁿ^434.^St^a^ffi^ng^com^p^an^ies^S^e^c^tⁱ^oⁿ^952.^Sam^e^p^r^o^v^isioⁿ^w^ith^so^m^e
ⁿ^e^fⁱ^ciaries^a^r^e^th^{e parties}^w^h^{o are}^p^a^y^m^en^t^f^o^r^P^a^r^t^B^ser^v^{ices to}^b^e^m^a^d^e^to⁽ⁱⁿ^d^iv^id^u^a^{ls o}^r^en^tities)^w^o^u^l^d^b^e^ab^{le to}^draf^tin^g^dif^f^e^ren^ces^.
^://wiki^titled^to^receiv^e^Medⁱ^{care p}^a^y^m^en^ts^aⁿ^en^tity^{, as d}^e^fⁱⁿ^e^d^b^y^th^{e Secr}^etar^y^,^th^at^s^u^bm^{it claim}^s^t^o^{Medicare f}^o^{r ph}^y^s^ician
^h^ttp^d^{er th}^{e Medicare}^s^t^atu^t^{e. How}^e^v^e^{r, m}^o^s^t^ha^{s a}^c^o^nt^r^a^c^t^ua^l^a^r^r^a^nge^m^e^nt^wⁱ^t^h^t^h^e^se^r^vⁱ^ces^provi^d^e^d^und^e^r^c^o^nt^r^a^c^t^ua^l
^ne^ficⁱ^a^r^ie^{s a}^{ssign t}^h^e^s^e^rⁱ^g^h^t^{s to}^phy^si^ci^an^{or ot}^h^e^{r pers}^on^w^h^{o prov}ⁱ^d^ed^arran^g^e^m^eⁿ^t^betw^een^th^e^com^p^an^y^an^{d th}^e
^r^ticip^atin^g^p^h^y^s^ician^s^{, su}^p^p^lier^s^{, an}^d^th^{e ser}^v^{ice. I}ⁿ^o^r^d^e^r^to^b^ill^f^o^r^th^{e ser}^v^ice,^p^h^y^s^ician^,^if^th^{e ar}^r^aⁿ^g^e^m^eⁿ^t^m^eets
^e^{r prov}ⁱ^d^ers^w^h^{o di}^rect^l^y^pr^o^vⁱ^d^{e t}^h^e^th^{e en}^tity^an^d^th^{e co}ⁿ^t^r^actu^a^l^ar^r^aⁿ^g^e^m^eⁿ^t^appropri^a^t^e^prog^ramⁱⁿ^t^e^g^rⁱ^t^y^an^{d ot}^h^e^r
ⁿ^d^th^en^s^u^bm^{it claim}^s^f^o^{r Medicare}^w^{ill h}^a^v^e^to^m^{eet p}^r^o^g^r^a^mⁱⁿ^teg^r^ity^an^d^s^a^f^e^g^u^a^rds^es^tablis^h^e^{d by}^th^{e Secretary}^.
^y^m^eⁿ^t^.^A^l^t^h^o^{ugh M}^e^dⁱ^c^a^r^e^p^e^r^mⁱ^t^s^ot^h^e^r^sa^fe^gua^r^d^{s sp}^e^cⁱ^fie^d^b^y^t^h^e
^y^s^ician^s^to^r^eassigⁿ^th^eir^rⁱ^g^h^{t to}^Secretary^.
^y^m^en^{t to}^cer^tain^o^t^h^e^r^en^titi^e^s^,^th^ey
^{not reas}^sⁱ^gⁿ^th^{eir rig}^h^t^{to pay}^m^en^{t to}
^fⁱⁿ^g^co^m^p^an^{ies (}^eⁿ^{tities th}^{at r}^e^taⁱⁿ
^y^s^ician^s^on^{a con}^t^ractu^a^{l bas}ⁱ^s⁾^.
^e^{nd pro}^vⁱ^sioⁿ^f^o^r^sepa^ra^t^e^pa^y^m^ent^s^{Section 73}²^.^{Direct pay}^m^en^ts^f^o^{r th}^e^S^ecti^oⁿ^435.^{Direct pay}^m^en^ts^fo^{r th}^e^S^ecti^oⁿ^734.^Sim^ilar^p^r^o^v^isioⁿ^ex^cep^t
^certainⁱⁿ^p^a^tien^{t p}^a^th^{ology s}^ervices^.^t^echⁿⁱ^cal^com^pone^nt^f^o^{r t}^h^es^{e pat}^h^ol^og^y^techⁿⁱ^{cal com}^pon^en^{t f}^o^{r th}^es^{e patho}^l^og^y^Medicare^w^o^u^l^{d m}^a^k^e^{direct pay}^m^en^ts^f^o^r
^ge^ne^r^a^l^,ⁱⁿ^de^p^e^nd^eⁿ^t^l^a^b^o^r^a^t^o^rⁱ^e^{s c}^a^nno^t^se^r^vⁱ^{ces w}^{ill b}^e^m^a^d^e^f^o^r^ser^v^ices^s^e^rvⁱ^ces^w^o^u^l^{d be m}^a^{de f}^o^{r s}^e^rvⁱ^ces^th^{e tech}ⁿⁱ^{cal com}^pon^en^{t of}^path^olog^y
^ectly^b^{ill f}^o^r^th^{e tech}ⁿⁱ^{cal co}^m^p^oⁿ^en^{t o}^f^f^u^rnⁱ^s^h^e^{d du}^riⁿ^g^{2005 an}^{d 2006.}^f^u^rnⁱ^s^h^e^{d du}^riⁿ^g^2005.^s^e^r^vⁱ^c^e^s^f^r^o^m²⁰⁰⁴^t^h^o^ugh^{2008. Wou}^l^d
^h^ol^og^y^s^e^rvⁱ^ces^provⁱ^d^{ed t}^o^Medi^care^als^o^s^p^ecif^y^th^{at a ch}^an^g^eⁱⁿ^h^o^s^p^ital

CRS-37
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^fi^cⁱ^ari^e^s^w^h^{o are i}ⁿ^patⁱ^eⁿ^t^s^or^owⁿ^e^rs^hⁱ^{p w}^o^u^l^{d n}^o^{t af}^f^{ect th}^es^{e direct}
^tp^atien^t^{s o}^f^acu^{te car}^{e h}^o^sp^{itals. B}^I^P^A^b^illin^g^ar^r^aⁿ^g^e^m^eⁿ^t^s.
^r^m^itted^cer^tainⁱⁿ^d^e^p^eⁿ^d^en^t^lab^o^r^ato^r^ies
^ex^istin^g^ar^r^aⁿ^g^e^m^eⁿ^t^{s w}^ith^acu^te
^spⁱ^t^a^l^{s t}^o^d^o^soⁱ^f^t^h^e^a^r^r^a^nge^m^e^nt^ha^d
ⁱⁿ^ef^f^ect^as^of^Ju^l^y²²^,^{1999. T}^h^e
^pay^m^en^ts^f^o^{r th}^es^{e s}^e^rv^ices^apply^to
^r^vⁱ^ces^f^u^rnⁱ^s^h^e^{d du}^riⁿ^g^{a 2-}^y^{ear peri}^od
ⁱⁿ^g^on^Jan^u^a^ry^{1, 20}⁰¹^an^{d en}^diⁿ^g
^{ber 31, 2002.}
^creas^e^M^e^{dicare p}^a^y^m^eⁿ^t^s^t^o^S^ecti^oⁿ^602.^P^h^y^s^ician^sⁱⁿ^A^l^ask^a^w^ith^S^ecti^oⁿ^450K^{. F}^o^{r 2004,}^p^h^y^sⁱ^cⁱ^aⁿ^sⁱⁿ^N^o^provⁱ^sⁱ^oⁿ^.
^siciaⁿ^{s in Ala}^s^ka^.^P^h^y^s^ician^s^th^at^v^a^lu^es^of^{practice ex}^pen^s^{e, m}^a^lpractice,^A^l^as^k^a^w^o^u^l^{d be}^p^aⁱ^d^90%^of^t^h^{e V}^A
ⁱ^{ki/CRS-RL32005}^ide^s^e^rv^ices^{to Medicare}^ben^e^fⁱ^ciaries^d^bas^e^{d on}^Medi^care’^s^ph^y^sⁱ^cⁱ^aⁿ^f^e^e^an^{d w}^o^rk^ge^o^g^raphⁱ^cⁱⁿ^dex^bel^o^w^1.67^w^{ill h}^a^v^e^th^{ese v}^a^lu^{es r}^aⁱ^s^ed^to¹^.⁶⁷^ph^y^sⁱ^cⁱ^aⁿ^f^{ee s}^c^h^e^du^l^e^u^s^{ed f}^o^r^FY^2001.^In^2005,^t^hⁱ^s^am^ouⁿ^t^w^o^u^l^{d be i}ⁿ^creas^ed
^g/w^h^e^du^{le th}^{at is}^adj^u^s^t^{ed to accou}ⁿ^t^fo^r^s^t^artⁱⁿ^g^Jan^u^a^ry^{1, 2004 an}^{d bef}^o^re^by^th^{e u}^{pdate am}^ouⁿ^t^f^o^{r th}^e^Medicare
^s^.or^og^raph^{ic v}^a^riation^sⁱⁿ^{practice ex}^pen^s^es^.^Jan^u^a^ry^{1, 2006.}^ph^y^sⁱ^cⁱ^aⁿ^f^ee^s^c^h^e^du^l^e^f^o^{r 2005. If}ⁿ^o^V^A
^le^ak^f^{ee s}^c^h^e^du^{le am}^ouⁿ^t^ex^is^ts^f^o^{r a s}^e^rvi^c^e^,
^t^h^{e pay}^m^eⁿ^t^am^ouⁿ^t^w^o^u^l^{d be an}
^://wiki^adj^u^s^t^m^eⁿ^t^{to th}^{e Medicare pay}^m^en^t.^T^h^e
^h^ttp^adj^u^s^t^m^eⁿ^t^w^o^u^l^{d equ}^a^{l 90% of}^th^{e ov}^erall
^percen^tag^e^dif^f^e^ren^ce^betw^een^th^{e tw}^{o f}^e^e
^s^c^h^e^du^l^e^s^w^eⁱ^g^h^t^ed^by^t^h^{e di}^s^t^ri^bu^tⁱ^oⁿ^of
^Medi^{care cl}^ai^m^sⁱⁿ^2001.
^a^blish^u^p^d^a^t^{e t}^o^phy^siciaⁿ^f^e^e^S^ecti^oⁿ^601.^T^h^{e u}^p^d^a^{te to}^th^{e co}ⁿ^v^e^r^s^ioⁿ^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^601.^T^h^{e u}^p^d^a^{te to}^th^e^coⁿ^v^e^r^s^ioⁿ
^{. Medicare}^p^a^y^s^f^o^{r s}^e^rv^ices^of^f^act^{or f}^o^{r 2004 an}^{d 2005 w}ⁱ^l^lⁿ^o^t^{be l}^e^s^s^f^act^{or f}^o^{r 2004 an}^{d 2005 w}^o^u^l^d^beⁿ^o^t^l^e^s^s
^y^s^ician^s^an^d^cer^tainⁿ^oⁿ^-^p^h^y^s^ici^aⁿ^t^h^an^1.5%^an^{d w}ⁱ^l^l^{be ex}^em^pt^f^r^om^t^h^e^t^h^an^1.5%^an^{d w}^o^u^l^{d be ex}^em^pt^f^r^om^t^h^e
^actitioⁿ^e^r^s^oⁿ^th^e^b^a^{sis o}^f^{a f}^{ee sch}^e^d^u^le.^b^u^d^g^{et n}^e^u^t^r^a^lity^ad^j^u^stm^eⁿ^t^.^b^u^d^g^{et n}^e^u^t^r^a^lity^ad^j^u^stm^eⁿ^t^.

^{e law}^pr^o^v^ides^{a s}^p^ecifⁱ^{c f}^o^rm^u^l^{a f}^o^r
^l^c^u^l^a^tⁱ^{ng t}^h^e^a^nnua^l^up^d^a^t^e^t^o^t^h^e
^nve^r^sⁱ^o^{n fa}^c^t^o^r^.

CRS-38
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^an^{ge th}^e^sus^t^aiⁿ^a^b^l^{e grow}^th^rate^S^ecti^oⁿ^601.^T^h^{e f}^o^r^m^ul^a^f^o^{r calcu}^latin^g^S^ecti^oⁿ^464.^T^h^{e prov}ⁱ^sⁱ^on^e^x^pres^s^e^s^a^S^ecti^oⁿ^601.^T^h^{e f}^o^rm^u^l^{a f}^o^r^c^a^l^cu^latin^g
^u^l^a^.^{Medicare pay}^s^f^o^{r s}^e^rv^ices^of^th^{e su}^stain^a^b^l^{e g}^r^o^w^th^r^a^{te w}^{ill b}^e^s^eⁿ^s^{e of}^th^e^Sen^a^{te th}^{at Medicare}^th^{e s}^u^s^t^ain^a^{ble g}^r^o^w^t^h^{rate w}^o^u^l^{d be}
^y^s^icⁱ^aⁿ^s^an^d^cer^tainⁿ^oⁿ^-^p^h^y^s^ician^m^odi^fⁱ^{ed. S}^t^artⁱⁿ^gⁱⁿ^2003,^t^h^e^G^D^P^f^act^or^b^eⁿ^e^fⁱ^ciary^{access to}^q^u^ality^{care m}^a^y^b^e^m^odi^fⁱ^ed.^S^t^artⁱⁿ^g^wⁱ^t^h^t^h^{e S}^G^R^f^o^{r 2003,}
^actitioⁿ^e^r^s^oⁿ^th^{e b}^a^{sis o}^f^a^f^ee^sch^e^d^u^le.^w^{ill b}^e^b^a^se^d^oⁿ^the^a^nnua^l^a^v^e^r^a^g^e^c^h^a^nge^c^o^m^p^r^o^mⁱ^se^d^if^Co^ngr^e^{ss d}^o^e^{s no}^{t p}^r^e^v^eⁿ^t^t^h^{e G}^D^P^f^act^{or w}^o^u^l^{d be bas}^e^d^oⁿ^t^h^e
^{e law}^prov^ides^a^s^p^ecifⁱ^{c f}^o^rm^u^l^{a f}^o^r^ov^{er the precedin}^g^{10 y}^ears^{(a 10-}^y^ear^cu^t^sⁱⁿ^{2004 an}^{d f}^o^l^l^o^wⁱⁿ^g^y^ears^t^h^at^s^t^em^{annual aver}^{age change}^o^v^er^the^p^r^eced^ing
^l^c^u^l^a^tⁱ^{ng t}^h^e^a^nnua^l^up^d^a^t^e^t^o^t^h^e^r^o^llin^g^av^er^ag^e)^{. T}^h^{e 1}⁰^-^y^ear^r^o^llin^g^f^r^om^th^{e S}^G^R^f^o^rm^u^l^{a. [Du}^p^{licate of}^{10 y}^ears^{(a 10-}^y^{ear rollin}^g^av^erag^{e). T}^h^is
^v^e^rs^ion^f^{actor w}^h^ich^reg^u^l^ates^ov^erall^av^er^ag^{e calcu}^latioⁿ^o^f^th^e^GDP^w^{ill ap}^p^l^y^S^ectⁱ^oⁿ^622]^calcu^lation^w^o^u^l^{d replace th}^e^cu^rren^t^GDP
^eⁿ^dⁱ^{ng fo}^r^p^h^y^sⁱ^cⁱ^a^ns’^se^r^vⁱ^c^e^s^.^Se^ve^r^a^l^to^co^m^p^u^t^atioⁿ^s^o^f^th^{e SGR star}^tin^gⁱⁿ^f^act^o^r^w^h^ich^m^eas^u^r^es^th^{e 1-}^y^{ear ch}^an^g^e
^en^{ter i}ⁿ^t^o^th^{e calcu}^lation^of^th^e^2003.^f^r^om^th^{e precedin}^g^y^ear.
^rm^u^l^{a. On}^{e of}^th^os^{e f}^actor^sⁱ^s^th^e
^stain^a^b^l^{e g}^r^o^w^th^r^a^te⁽^S^GR)^w^h^ich^is
^s^eⁿ^tially^{a targ}^{et f}^o^{r Medicare s}^p^en^din^g^S^e^cti^oⁿ^629.^T^h^{e prov}ⁱ^sⁱ^oⁿ^provⁱ^d^es^a
^o^w^thⁱⁿ^p^h^y^sⁱ^c^ian^s^’^ser^v^{ices. On}^e^sen^s^{e o}^f^th^{e Sen}^a^te^t^h^a^t^th^{e r}^e^d^u^ctioⁿ^sⁱⁿ
ⁱ^{ki/CRS-RL32005}^u^r^{e u}^s^{ed to calcul}^a^t^e^th^{e SGR}^is^th^e^nua^l^p^e^r^c^eⁿ^t^a^ge^c^h^a^ngeⁱⁿ^g^r^o^s^s^Medica^re’^s^ph^y^s^ician^f^{ee s}^c^h^e^du^{le are}
^g/w^m^{estic p}^r^o^d^u^c^{t (}^GDP⁾^.^I^f^ex^p^eⁿ^d^itu^r^e^s^d^e^stab^ilizin^g^,^p^r^im^arⁱ^l^y^cau^sed^b^y^th^e
^s^.or^c^{eed th}^{e targ}^{et, th}^{e u}^{pdate f}^o^{r a f}^u^tu^re^s^u^s^t^ain^a^bl^{e g}^r^ow^th^{rate calcu}^lation^,^an^d
^le^ak^redu^{ced. If}^ex^pe^ndⁱ^t^u^res^{are les}^s^th^{at CMS sh}^o^u^ld^u^s^e^{its d}ⁱ^scr^e^tioⁿ^to^m^a^k^e
^th^{e targ}^{et, th}^{e u}^{pdate is}ⁱⁿ^creas^ed.^cer^tain^ex^c^l^u^s^ioⁿ^s^an^d^ad^j^u^stm^eⁿ^t^{s to}^th^e^SGR^calcu^lation^.
^://wiki^{e recen}^{t ne}^g^a^tiv^{e u}^{pdate adj}^u^s^t^m^eⁿ^t
^h^ttp^t^o^r^s^ref^l^{ect th}^{e application}^of^th^{e SGR}
^ste^m^.
^{re G}^A^{O report on phys}ⁱ^cian^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^953(a).^No^later^th^an^six^m^oⁿ^t^h^s
^m^p^ens^a^tion^{. No}^p^r^o^v^isioⁿⁱⁿ^cu^r^r^en^t^f^r^om^en^act^m^eⁿ^t^{, G}^A^O^w^o^u^l^{d report}^t^o
^.^C^oⁿ^g^r^es^s^on^t^h^{e appropri}^a^t^eⁿ^e^s^s^of^t^h^e
^con^v^e^rs^ion^f^acto^r^u^pdates^an^{d th}^{e SGR}
^fo^rm^u^l^{a f}^o^{r 2002 an}^{d s}^u^bs^equ^eⁿ^t^l^y^;^t^h^e
^stab^ility^an^d^th^{e p}^r^ed^ictab^ility^o^f^th^e
^u^p^d^a^{tes; an}^d^alterⁿ^ativ^{es to}^th^{e SGR in}^th^e
^u^p^d^a^{te. No}^later^th^an¹²^m^oⁿ^t^h^s^f^r^o^m
^eⁿ^act^m^eⁿ^t^{, G}^A^O^w^o^u^l^{d be requ}ⁱ^r^ed^t^o
^{report to C}^oⁿ^g^r^es^s^oⁿ^{all as}^pects^of
^p^h^y^s^ician^co^m^p^en^satioⁿ^f^o^r^Medⁱ^car^e
^s^e^rvⁱ^ces^{. T}^h^{e report}^w^oul^{d rev}ⁱ^ew
^alterⁿ^ativ^{es to}^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^le.

CRS-39
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^e^{nd M}^e^dica^re’^{s pr}^{ivate cont}^racting^S^ecti^oⁿ^603.^D^o^ct^ors^of^den^t^al^s^u^rg^ery^or^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^604.^D^o^ct^ors^of^den^t^al^s^u^rg^ery^or
^t^h^o^r^it^y^t^o^dent^ist^s^a^{nd po}^dia^t^rist^s^.^of^den^t^al^m^e^di^ciⁿ^e^{, doct}^o^rs^of^podi^at^ri^c^of^den^t^al^m^e^di^ciⁿ^e^an^d^doct^o^rs^of^podi^at^ri^c
^iv^{ate con}^t^ractin^g^allow^s^{a ph}^y^s^ician^an^d^m^e^dⁱ^cin^e^{, an}^d^d^o^c^to^r^s^o^f^o^p^t^o^m^etr^y^w^ill^b^e^m^e^dⁱ^ciⁿ^e^w^o^u^l^d^b^e^ab^{le to}^en^terⁱⁿ^to
^e^fⁱ^ciaryⁿ^o^t^{to s}^u^bm^{it a claim}^{able to en}^{ter in}^t^o^priv^{ate con}^t^racts^w^ith^p^r^iv^{ate con}^t^racts^w^ith^Me^dⁱ^c^a^r^e
^{r a s}^e^rv^{ice w}^h^ich^w^o^u^l^{d o}^t^herw^is^{e be}^Medicare^ben^e^fⁱ^ciaries^.^T^h^{e prov}^is^ion^w^ill^ben^e^fⁱ^ciaries^.
^e^{red an}^{d pai}^d^f^o^{r by}^Medi^care.^Uⁿ^der^{be ef}^f^ectiv^{e u}^pon^en^actm^eⁿ^t^.
ⁱ^v^a^t^e^c^o^nt^r^a^c^tⁱ^ng,^p^hysⁱ^cⁱ^a^{ns (}ⁿ^o^t
^t^s^{or den}^tⁱ^s^ts^{) can}^{bill patien}^t^s^at
^dⁱ^scr^e^tioⁿ^w^ith^o^u^{t b}^eⁱⁿ^g^su^b^j^{ect to}
^p^e^r^p^a^y^m^eⁿ^{t lim}^{its sp}^ecifⁱ^ed^b^y
^If^{a ph}^y^s^ician^decides^{to en}^ter^a
^{ate con}^t^ract^wⁱ^t^h^{a Medicare}
^e^fⁱ^ciary^,^th^{at ph}^y^s^icⁱ^aⁿ^m^u^s^t^ag^{ree to}
ⁱ^{ki/CRS-RL32005}^reg^o^an^y^reim^bu^rs^em^en^{t by}^Medicare^f^o^r^e^fⁱ^ciaries^f^o^{r 2 y}^ears^.
^g/w
^s^.or^q^uⁱ^{re G}^A^{O rep}^{ort on}^geograp^hⁱ^c^S^ecti^oⁿ^413(c)^.^GA^{O w}^{ill stu}^d^y^p^a^y^m^en^t^S^ectⁱ^o^{n 444.}^G^A^O^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o^S^ecti^oⁿ^413.^S^a^m^e^provⁱ^sⁱ^oⁿ^.
^le^ak^{in phys}ⁱ^cian^p^aym^ents^{. No}^di^f^f^e^ren^ces^u^{nder t}^h^{e ph}^y^sⁱ^cⁱ^aⁿ^f^e^e^s^t^u^d^y^g^e^og^raph^{ic di}^ff^eren^cesⁱⁿ^pay^m^en^t
^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^s^c^h^e^du^l^e^f^o^{r di}^f^f^e^r^e^nt^g^e^og^raphⁱ^c^areas^.^am^o^uⁿ^t^sⁱⁿ^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^le^an^d
^://wiki^T^h^e^st^ud^y^,ⁱⁿ^c^l^udⁱ^{ng r}^e^c^o^m^m^e^nd^a^tⁱ^o^ns^r^e^p^o^r^{t to}^Coⁿ^g^r^{ess w}^ithⁱⁿ¹^y^ear^o^f
^h^ttp^con^cernⁱⁿ^g^us^e^of^m^o^{re cu}^rren^{t data an}^d^en^actm^eⁿ^t^.
^u^s^e^of^cos^t^{data rath}^{er th}^an^price^prox^ies^,^is
^d^u^{e to}^Coⁿ^g^r^{ess w}^ithⁱⁿ¹^y^ear^o^f^th^e
^en^actm^eⁿ^t^date.
^A^{O report on benefici}^a^r^y^S^ecti^oⁿ^604.^GA^{O is r}^e^q^u^ir^ed^to^coⁿ^d^u^c^t^S^ecti^oⁿ^447.^G^A^O^w^o^u^l^{d s}^u^bmⁱ^t^{a report}^S^ecti^oⁿ^602(a).^G^A^O^w^o^ul^{d be requ}ⁱ^r^ed
^s^{to s}^ervices^inclu^dⁱ^{ng concierge}^a^s^t^u^d^y^on^acces^s^of^Medicare^ben^e^fⁱ^ciaries^t^o^Co^ngr^e^ss,ⁱⁿ^c^l^udⁱ^{ng r}^e^c^o^m^m^e^nd^a^tⁱ^o^ns,^t^o^con^d^u^c^{t a s}^t^u^d^y^on^acces^s^of^Medicare
^{pact of}^thes^{e m}^a^ndatory^fees^{to ph}^y^s^ician^s^’^s^e^rv^ices^uⁿ^d^er^{Medicare an}^d^reg^a^rdin^g^th^{e ef}^f^{ect of}^c^o^nc^ierg^{e care on}^b^eⁿ^e^fⁱ^ciar^{ies to}^p^h^y^s^ician^s^’^ser^v^{ices u}ⁿ^d^er
^e^r^v^ices^{on acces}^s^Peri^odi^c^su^b^m^{it a r}^e^p^o^r^t^to^Coⁿ^g^r^{ess o}ⁿ^th^{is stu}^d^y^ben^e^fⁱ^ciaries^’^acces^s^{to Medicare covered}^{Medicare in}^clu^dⁱⁿ^g^ben^e^fⁱ^ciarⁱ^e^s^’^u^s^{e of}
^aly^s^es^by^th^e^P^h^y^s^ician^P^a^y^m^en^{t R}^e^vⁱ^ew^wⁱ^t^hⁱⁿ¹⁸^m^o^nt^{hs o}^f^eⁿ^a^c^t^m^e^nt^.^s^e^rv^ices^by^{12 m}^oⁿ^t^h^s^f^r^om^en^actm^eⁿ^t^.^In^se^r^vⁱ^c^e^s^t^h^r^o^{ugh a}ⁿ^aⁿ^a^l^y^sⁱ^s^o^f^c^l^aⁱ^m^s^d^a^t^a
^m^mⁱ^s^sⁱ^on^{, an}^{d s}^u^bs^equ^eⁿ^t^l^y^M^e^dPA^C^,^S^ecti^oⁿ^650.^G^A^O^w^o^ul^d^st^ud^y^c^o^ncⁱ^e^r^g^e^th^isⁱⁿ^s^t^an^{ce, con}^c^ie^r^g^{e care w}^o^u^l^{d be an}^aⁿ^d^th^{e ex}^ten^t^to^w^h^ich^p^h^y^s^ician^s^ar^{e n}^o^t
^w^e^{ll as}^C^M^{S s}^h^o^w^e^d^th^{at acces}^s^to^{care prov}^{ided to Medicare ben}^e^fⁱ^ciaries^arran^g^e^m^eⁿ^t^w^h^{ere a ph}^y^s^ician^or^acceptin^gⁿ^e^w^Medic^a^r^{e ben}^e^fⁱ^ciaries^as
^y^s^ician^s^’^ser^v^ices^g^eⁿ^e^r^a^lly^r^e^m^aⁱⁿ^ed^an^dⁱ^t^s^ef^f^{ect on}^th^{eir acces}^s^{to Medicare}^p^r^actitioⁿ^e^r^ch^ar^g^e^{s an}ⁱⁿ^dⁱ^vⁱ^d^u^{al a}^p^a^tien^t^s.

^f^o^{r m}^o^s^t^ben^e^fⁱ^ci^ari^e^s^t^h^ro^ugh^1999.^cov^e^{red s}^e^rv^ices^an^{d s}^u^bm^{it a report to}^m^e^m^b^ers^h^ip^f^ee^{or oth}^e^{r f}^{ee or requ}^ires^th^e
^{t s}^u^rv^ey^s^con^v^e^y^{a m}^o^re^mⁱ^x^e^d^Co^ngr^e^ss,ⁱⁿ^c^l^udⁱ^{ng r}^e^c^o^m^m^e^nd^a^tⁱ^o^ns,^no^pu^rch^a^s^e^of^an^item^{or s}^e^r^v^{ice as}^a
^t^ur^e^ho^w^e^ve^r^.^{later th}^an^{12 m}^oⁿ^t^h^s^f^r^om^en^actm^eⁿ^t^.^prerequⁱ^s^{ite f}^o^{r prov}^idin^g^th^{e care.}

CRS-40
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^uⁱ^{re I}ⁿ^s^t^{itute of M}^e^{dicine (I}^OM⁾^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^602(b⁾^.^T^h^e^S^ecretary^w^o^u^l^{d be}
^oⁿ^supply^o^f^phy^siciaⁿ^s^{. No}^r^e^q^u^ir^ed^to^r^e^q^u^{est th}^{at I}^O^{M stu}^d^y^th^e
^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^adequ^acy^of^th^{e s}^u^pply^of^ph^y^s^ician^s
⁽ⁱⁿ^c^lu^dⁱⁿ^g^sp^ecialists)ⁱⁿ^th^{e co}^uⁿ^t^r^y^aⁿ^d
^th^{e f}^actors^th^{at af}^f^{ect s}^u^pply^.^T^h^e
^Secretar^y^w^o^u^l^{d be requ}^{ired to s}^u^bm^{it th}^e
^r^e^su^{lts o}^f^th^e^stu^d^yⁱⁿ^{a r}^e^p^o^r^{t to}^Coⁿ^g^r^ess
ⁿ^o^later^th^an²^y^ear^s^f^r^o^m^th^{e d}^a^{te o}^f
^en^actm^eⁿ^t^.
^u^{ire M}^e^{dPAC report on paym}^ent^S^ecti^oⁿ^303(a)^{. Med}^P^A^C^is^r^e^q^u^ir^ed^to^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^603.^MedPA^C^w^o^u^l^{d be}^requⁱ^r^ed
ⁱ^{cian s}^e^r^vⁱ^c^es^{. No}^p^r^o^v^isioⁿⁱⁿ^revⁱ^ew^th^e^pay^m^en^{t ch}^an^g^e^s^as^th^ey^af^f^ect^t^o^report^t^o^C^ongres^s^on^t^h^{e ef}^f^ect^s^of
^rren^{t law}^.^p^a^y^m^en^{ts f}^o^r^item^s^an^d^ser^v^{ices f}^u^rⁿ^ish^e^d^refⁱⁿ^e^m^eⁿ^t^s^{to th}^{e pra}^c^{tice ex}^pen^s^e
ⁱ^{ki/CRS-RL32005}^by^on^col^o^gⁱ^s^t^s^an^{d f}^o^{r dru}^g^admⁱⁿⁱ^s^t^ratⁱ^oⁿ^s^e^rv^ices^f^u^rn^is^h^e^d^by^oth^e^{r s}^p^ecialis^ts^an^d^com^pon^en^t^of^pay^m^en^t^s^f^o^{r ph}^y^sⁱ^cⁱ^aⁿ^s^’^ser^v^{ices af}^ter^f^u^{ll im}^p^l^e^m^eⁿ^tatioⁿ^o^f^th^e
^g/w^s^u^bmⁱ^t^{a report to th}^{e Secretary}^.^T^h^e^res^o^u^r^ce-^bas^e^{d pay}^m^en^tⁱⁿ^2002.

^s^.or^MedPA^C^report^on^on^col^o^gⁱ^s^t^s^’^pay^m^en^t^s
^le^akⁱ^s^du^e^t^o^C^oⁿ^g^r^es^s^by^Jan^u^a^ry^{1, 2006 an}^d
^t^h^{e report}^on^dru^g^admⁱⁿⁱ^s^t^ratⁱ^oⁿ^s^e^rvⁱ^c^e^s
^://wiki^f^u^rⁿ^ish^e^d^b^y^o^t^h^e^r^sp^{ecialists is}^d^u^{e b}^y
^h^ttp^J^a^nua^ry^{1, 2007. T}^h^{e S}^ecret^ary^cou^l^d
^m^a^k^e^appropri^a^t^e^adj^u^s^t^m^eⁿ^t^s^t^o^pay^m^en^t^s
^{as p}^a^r^t^o^f^th^{e r}^u^lem^a^kⁱⁿ^g^f^o^r^p^h^y^s^ician
^pay^m^en^t^s^f^o^{r 2006.}
^S^ecti^o^{n 606.}^M^e^d^P^A^Cⁱ^s^r^e^q^uⁱ^r^e^d^t^o
^{report to C}^oⁿ^g^r^es^s^on^th^{e ef}^f^ects^of
^refⁱⁿ^e^m^eⁿ^t^s^{to th}^{e practi}^c^{e ex}^pen^s^e
^com^pon^en^{t, by}^s^p^ecialty^w^ithⁱⁿ¹^y^{ear of}
^en^act^m^eⁿ^t^{. A}^MedPA^C^report^on^t^h^e
^e^f^f^{ect of}ⁱⁿ^creas^{ed ph}^y^s^ician^s^e^rv^ices^oⁿ
^th^{e w}^e^ll-^bein^g^of^{Medicare ben}^e^fⁱ^cⁱ^aries
^an^{d ot}^h^e^{r f}^act^orsⁱ^s^du^e^wⁱ^t^hⁱⁿ^{1 y}^{ear of}
^en^actm^eⁿ^t^as^w^e^ll.

CRS-41
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^nsult^a^tⁱ^v^e^pro^{cess bef}^o^re^S^ecti^oⁿ^941.^T^h^{e Sec}^r^e^t^ar^y^{is p}^r^o^h^ib^ited^S^ecti^oⁿ^553.^T^h^{e Secretary}^,^bef^o^re^S^ecti^oⁿ^941.^T^h^{e Secretary}^w^o^u^l^d^be
^tab^lⁱ^s^hⁱⁿ^gⁿ^e^w^eval^u^a^ti^on^an^d^fr^o^mⁱ^m^pl^em^en^tⁱⁿ^{g ne}^w^E^&^M^m^a^kⁱⁿ^g^c^h^an^g^e^{s in}^d^o^c^u^m^en^tatioⁿ^p^r^o^h^ib^ited^f^r^o^m^im^p^l^e^m^en^tin^gⁿ^e^w^E&^M
^a^na^g^e^m^e^nt⁽^E^&M⁾^co^des^{. I}ⁿ^{itial E&}^M^docu^m^en^t^a^tⁱ^o^{n gui}^d^e^lⁱⁿ^e^s^uⁿ^l^es^s^t^h^e^g^uⁱ^delin^es^f^o^r,^prov^idin^g^clin^{ical ex}^am^ples^d^o^c^u^meⁿ^t^a^tⁱ^o^{n gui}^d^e^lⁱⁿ^e^s^unl^e^{ss t}^h^e
^cu^m^eⁿ^t^atioⁿ^g^uⁱ^d^e^lin^{es w}^e^r^e^issu^edⁱⁿ^S^e^cretary^dev^e^{loped th}^{e g}^uⁱ^delin^esⁱⁿ^of^{, or ch}^an^gⁱⁿ^g^codes^f^o^{r report}ⁱⁿ^g^E^&^M^S^e^c^r^e^t^ary^dev^e^l^{oped t}^h^{e g}^uⁱ^delⁱⁿ^esⁱⁿ
ⁱ^t^h^r^e^vi^sⁱ^on^sⁱ^s^s^u^{ed i}ⁿ^1997;^bot^h^co^llab^o^r^atioⁿ^w^ith^p^r^acticin^g^p^h^y^s^ician^s^,^p^h^y^s^ician^s^e^r^v^{ices, w}^o^u^l^d^b^e^r^e^q^u^ir^ed^to^co^llab^o^r^atioⁿ^w^ith^p^r^acticin^g^p^h^y^s^ici^aⁿ^s^;
^aⁱⁿⁱⁿ^f^o^{rce t}^oday^.^A^pproxⁱ^m^at^el^y^40%^es^tab^lⁱ^s^h^e^{d a plan}^w^ith^g^o^als^,^con^d^u^c^ted^en^s^u^re^th^at^th^{e proces}^s^u^s^{ed in}^dev^e^lopin^g^es^tab^lis^h^e^{d a plan}^w^ith^g^o^als^;^con^d^u^c^ted
^Medi^{care pay}^m^en^t^s^f^o^{r ph}^y^sⁱ^cⁱ^aⁿ^p^ilo^t^p^r^o^j^e^c^t^s^,^aⁿ^d^estab^lish^e^d^an^d^th^{e g}^uⁱ^delin^es^{, ex}^am^ples^,^{or codes}^w^a^s^p^ilo^t^p^r^o^j^ec^t^s^;^e^s^t^a^b^lish^e^d^an^d
^rv^ices^{are f}^o^{r s}^e^rv^ices^w^h^ich^are^im^plem^en^{ted an}^edu^cation^prog^ram^on^th^e^wⁱ^dely^con^s^u^ltativ^{e am}^on^g^phy^sⁱ^cian^s^,^im^plem^en^{ted an}^edu^cation^prog^ram^on^th^e
^sⁱ^fⁱ^{ed as}^ev^alu^a^tion^an^{d m}^aⁿ^a^g^e^m^eⁿ^t^u^s^{e o}^f^t^h^{e g}^uⁱ^d^e^lin^{es w}^ith^ap^p^r^o^p^r^iate^ref^l^ects^{a br}^o^a^{d con}^s^en^s^u^s^am^on^g^u^s^e^o^f^th^{e g}^uⁱ^d^e^lin^{es w}^ith^ap^p^r^o^p^r^iate
^vⁱ^{ces (}ⁱ^{.e., p}^h^y^s^ician^vⁱ^sits)^.^T^h^e^ou^treach^{. A}ⁿ^y^ch^an^g^e^s^to^E&^M^g^uⁱ^delin^es^sp^{ecialties, an}^d^w^o^u^l^d^allo^w^v^e^rⁱ^fⁱ^catioⁿ^o^f^ou^treach^{. C}^h^an^g^e^s^{to E&}^{M g}^uⁱ^delin^es
^ary^s^t^{opped w}^o^rk^on^t^h^{e cu}^rren^t^re-^{are requ}^{ired to re}^d^u^{ce paperw}^ork^bu^rden^report^e^{d an}^{d f}^u^rnⁱ^s^h^e^{d s}^e^rvⁱ^ces^.^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o^redu^{ce paperw}^ork
^t^of^E&^{M codes}ⁱⁿ^{order t}^o^reas^s^e^s^s^t^h^e^on^ph^y^sⁱ^cⁱ^aⁿ^s^.^bu^rden^on^ph^y^sⁱ^cⁱ^aⁿ^s^.
^{tire ef}^f^o^rt.
ⁱ^{ki/CRS-RL32005}^ad^dⁱ^ti^on^al^h^o^s^pⁱ^t^al^ou^tp^ati^eⁿ^t^{Section 614}^.^Sc^r^e^eⁿⁱ^{ng m}^a^m^m^o^gr^a^p^hy^S^ecti^o^{n 445.}^Un^ilater^a^{l an}^d^b^ilater^a^l^S^ecti^oⁿ^614.^Sam^e^prov^is^ion^ex^cept
^g/w^rt^m^e^nt⁽^H^O^P^D)^m^a^m^m^o^g^r^a^phy^an^d^dⁱ^agⁿ^o^{stic m}^a^m^m^o^g^r^ap^h^y^w^{ill b}^e^dⁱ^a^gno^stⁱ^c^m^a^m^m^o^gr^a^p^hy^a^s^w^e^l^l^a^s^ef^f^ectⁱ^v^{e dat}^e^w^o^u^l^{d be Jan}^u^a^ry^{1, 2004.}
^s^.or^ic^e^s^using^phy^siciaⁿ^f^{ee schedule}^.^ex^clu^d^ed^f^r^o^m^OP^P^S^.^T^h^is^p^r^o^v^isioⁿ^w^ill^sc^r^e^eⁿⁱ^{ng m}^a^m^m^o^gr^a^p^hy^se^r^vⁱ^c^e^s^w^o^ul^d
^le^ak^re^eⁿⁱ^{ng m}^a^m^m^o^gr^a^p^hy^cov^e^rag^e^apply^{to s}^c^reenⁱⁿ^g^m^a^m^m^o^g^r^aph^y^s^e^rv^ices^b^e^p^a^id^f^o^r^uⁿ^d^er^th^{e p}^h^y^s^ician^f^e^e
^d^es^th^{e radiolog}^ical^procedu^r^{e as}^w^e^ll^f^u^rnⁱ^s^h^e^{d on}^or^af^t^e^{r t}^h^{e dat}^e^of^en^act^m^eⁿ^t^s^c^h^e^du^l^e^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005.}
^://wiki^{e p}^h^y^s^icⁱ^aⁿ^’^{s in}^ter^p^r^e^tatioⁿ^o^f^th^e^aⁿ^d^w^{ill ap}^p^l^y^to^dⁱ^a^gⁿ^o^s^tⁱ^c
^h^ttp^u^lts^of^th^{e procedu}^r^{e. T}^h^e^us^u^a^{l P}^a^{rt B}^m^a^m^m^o^gr^a^p^hy^se^r^vⁱ^c^e^s^furⁿⁱ^s^he^d^oⁿ^o^r
^d^u^ctib^{le is w}^a^iv^ed^f^o^r^{tests. P}^a^y^m^en^{t is}^af^t^e^{r Jan}^u^a^ry^{1, 2005.}
^d^e^uⁿ^d^er^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^le.
^rtain^s^e^rv^ices^{paid und}^{er f}^{ee s}^c^h^e^du^les
^e^{r pay}^m^en^{t s}^y^s^t^em^s^{are ex}^clu^d^ed
^Medicare’^s^OP^PS^-^P^P^S^{. For}
^a^gno^stⁱ^c^ma^mmo^gr^a^p^hy^se^r^vⁱ^c^e^s
^{ided in}^an^HOP^{D, th}^{e tech}ⁿⁱ^c^a^l
^m^p^oⁿ^en^{t o}^f^th^{e f}^{ee is p}^a^id^uⁿ^d^er^th^e
^{D P}^P^S^.
ⁱ^{cian for pharm}^acy^S^e^c^tⁱ^oⁿ^303(e⁾⁽²⁾^{. T}^h^{e Secr}^etar^y^w^{ill p}^a^y^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^o^{n 303(g).}^T^h^{e Secretary}^w^o^u^l^d^be
^a^nagem^e^{nt s}^ervices^.^No^p^r^o^v^isioⁿⁱⁿ^{a dis}^p^en^sⁱ^ng^f^{ee (les}^s^th^{e applicable}^requⁱ^r^{ed t}^o^provⁱ^d^{e f}^o^{r s}^e^par^a^t^e^pay^m^en^t^s
^rren^{t law}^.^dedu^{ctible an}^{d coins}^u^ran^{ce am}^ouⁿ^t^s⁾^toⁱⁿ^th^{e p}^h^y^s^ician^f^{ee sch}^e^d^u^{le t}^o^co^v^e^r^th^e
^licen^s^e^{d approv}^{ed ph}^arm^acies^f^o^r^cov^e^red^a^d^mⁱⁿⁱ^s^t^r^a^tⁱ^oⁿ^an^d^acq^uⁱ^sitioⁿ^c^o^s^t^s
^im^m^uⁿ^o^s^u^ppres^sⁱ^v^e^dru^g^s^{, oral}^an^ti-^can^cer^as^s^o^ciated^wⁱ^t^h^c^o^v^e^red^dru^g^s^an^d
^dru^g^s^{, an}^{d oral an}^ti-ⁿ^a^u^s^{ea drugs}^u^s^{ed as}^bi^ol^ogⁱ^cal^s^f^u^rnⁱ^s^h^e^{d by}^a^con^t^ract^{or u}ⁿ^d^er
^part^of^{a ch}^em^ot^h^e^rapeu^tⁱ^c^regⁱ^m^eⁿ^.^th^{e co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^p^r^o^g^r^a^m^.

CRS-42
^Ho^sp^it^{al O}^u^t^p^at^ien^t^Dep^a^rt^men^t⁽^H^O^P^D)^{, A}^m^b^u^l^at^o^r^y^Su^rg^ery^Cen^t^{er (}^A^SC)^,^an^d^Clin^{ic Serv}^ices.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^Hos^pⁱ^t^al^Ou^tp^ati^eⁿ^t^Dep^a^rtm^e^{nt (HOPD) Services}
^e^{nd ho}^ld-^h^a^r^m^l^{ess pro}^vⁱ^sioⁿ^{s f}^o^r^S^ecti^oⁿ^411.^T^h^{e h}^o^ld^-^h^ar^m^l^ess^p^r^o^v^isioⁿ^s^S^ecti^oⁿ^423.^T^h^{e h}^o^ld^-^h^ar^m^l^ess^p^r^o^v^isioⁿ^s^S^ecti^oⁿ^407.^T^h^{e h}^o^ld^-^h^ar^m^l^ess^p^r^o^v^isioⁿ
^a^{ll rura}^l^ho^spit^a^l^s^{. T}^h^{e o}^u^tp^atien^t^g^o^v^e^rⁿⁱⁿ^g^OP^P^S^f^o^r^sm^{all r}^u^r^a^{l h}^o^sp^itals^g^o^v^e^rnⁱⁿ^g^O^P^P^S^rei^m^bu^rs^em^en^t^f^o^{r s}^m^al^l^w^o^u^l^{d be ex}^t^eⁿ^d^{ed t}^o^Jan^u^a^r^y^{1, 2006.}
^p^e^c^tⁱ^v^{e pay}^m^en^t^s^y^s^t^em^(O^PPS^{) w}^a^s^{are ex}^tend^{ed to HOP}^{D s}^e^rv^ices^prov^ided^r^u^r^a^{l h}^o^sp^itals^w^o^u^l^d^b^e^r^e^-^e^stab^lish^e^dⁱⁿ^T^h^e^S^e^cretary^w^o^u^l^{d be requ}^{ired to}
^p^l^e^m^eⁿ^t^e^dⁱⁿ^A^ugust^{2000 f}^o^r^m^o^s^t^b^e^{fore Jan}^u^a^ry^{1, 2006. T}^h^{e S}^ecret^aryⁱ^s^2006.^coⁿ^d^u^c^{t a stu}^d^y^to^d^e^ter^mⁱⁿ^{e if}^th^{e co}^{sts b}^y
^{te care h}^o^s^p^itals^.^Un^{der h}^o^ld-^h^arm^l^es^s^r^e^q^u^ir^ed^to^coⁿ^d^u^c^{t a stu}^d^y^to^d^e^ter^mⁱⁿ^{e if}^am^bu^latory^pay^m^en^{t clas}^sⁱ^fⁱ^cation^(A^P^C⁾
^o^v^isioⁿ^s^{, r}^u^r^a^{l h}^o^sp^{itals w}^ithⁿ^o^m^o^r^e^t^h^e^cos^t^s^,^by^am^bu^l^a^t^o^ry^pay^m^en^t^g^r^ou^psⁱⁿ^cu^{rred by}^ru^{ral prov}^iders^ex^ceeds
^{100 be}^d^s^{are pai}^dⁿ^o^l^e^s^s^uⁿ^d^{er t}^hⁱ^s^cl^as^sⁱ^fⁱ^catⁱ^oⁿ^(A^PC^{) g}^r^ou^ps^{, i}ⁿ^cu^{rred by}^t^h^os^{e cos}^t^sⁱⁿ^cu^rred^by^u^r^ban^provⁱ^d^ers
^S^s^y^s^t^em^th^an^th^ey^w^o^u^l^{d h}^a^v^e^receiv^e^d^ru^{ral prov}^iders^ex^{ceed th}^os^{e cos}^t^sⁱⁿ^cu^rred^a^{nd prov}ⁱ^d^{e an}^appropri^a^t^e^pay^m^en^t
^d^{er th}^{e prior}^r^e^im^bu^rs^em^en^{t s}^y^s^t^em^f^o^r^by^u^r^ban^provⁱ^d^ers^.^If^appropri^a^t^e^,^t^h^e^adj^u^s^t^m^eⁿ^t^{to ref}^l^{ect th}^e^hi^g^h^e^{r cos}^t^s^of
^e^{red H}^O^P^D^s^e^rvⁱ^ces^provⁱ^d^{ed bef}^o^re^Secr^etar^y^w^{ill p}^r^o^v^id^e^f^o^r^{a p}^a^y^m^en^t^ru^ral^provⁱ^d^ers^by^Jan^u^a^ry^{1, 2005.}
ⁱ^{ki/CRS-RL32005}^u^a^ry^{1, 2004.}^adj^u^s^t^m^eⁿ^t^{to ref}^l^{ect th}^{e h}ⁱ^g^h^e^{r cos}^t^s^of^ru^ral^provⁱ^d^ers^by^Jan^u^a^ry^{1, 2006}
^g/w
^s^.or^a^{blish ho}^ld-^h^a^r^m^l^{ess pro}^vⁱ^sioⁿ^f^o^r^S^ecti^oⁿ^411.^T^h^e^h^o^ld^h^a^r^m^{less p}^r^o^v^isioⁿ^s^S^e^c^tⁱ^oⁿ^423.^OP^P^S^h^o^ld-^h^arm^l^es^s^S^ecti^oⁿ^407.^T^h^{e h}^o^ld^-^h^ar^m^l^ess^p^r^o^v^isioⁿ^s
^le^ak^le^c^o^m^m^unit^y^ho^spit^a^l^s⁽^S^CH^s)^.^No^{are ex}^ten^d^{ed to SC}^Hs^loc^a^t^{ed in}^{a ru}^ral^provⁱ^sⁱ^oⁿ^s^w^o^u^l^{d be ex}^t^eⁿ^d^{ed t}^o^S^C^H^s^w^o^u^l^{d be ex}^t^eⁿ^d^{ed t}^o^S^C^H^s^{for 2004 an}^d
^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^are^a^s^t^artⁱⁿ^g^f^o^{r cos}^t^reportⁱⁿ^g^peri^ods^{located in}^ru^{ral areas}^f^o^r^s^e^rv^ices^prov^ided^2005.
^://wiki^begⁱⁿⁿⁱⁿ^g^on^an^d^af^t^e^r^Jan^u^a^ry^{1, 2004 an}^dⁱⁿ^2006.
^h^ttp^en^diⁿ^g^f^o^{r HOP}^{D s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^d
^bef^o^{re Jan}^u^a^ry^1,2006.
^an^{ge h}^o^l^d^-h^arm^l^es^s^p^r^ovi^sⁱ^on^for^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^450J.^T^h^es^{e provi}^si^oⁿ^s^f^o^r^N^o^provⁱ^sⁱ^oⁿ^.
^s^hos^p^itals^.^OP^P^S^con^t^ain^s^a^chⁱ^l^d^ren^’^s^hos^pi^t^a^l^s^w^o^u^l^{d be m}^odi^fⁱ^{ed s}^o
^an^en^t^h^o^ld-ha^r^m^l^e^s^s^fo^r^c^aⁿ^cer^t^h^a^t^th^o^s^{e in}^Mar^y^lan^d⁽^w^hⁱ^ch^h^a^s^a
^spⁱ^t^a^l^{s a}ⁿ^d^c^h^ild^r^e^{n’s ho}^sp^ita^{ls w}^h^e^r^e^{Medicare w}^a^iv^{er) th}^{at are paid les}^s^uⁿ^d^er
^y^m^en^{ts to}^th^{ese h}^o^sp^{itals can}ⁿ^o^{t f}^a^ll^OP^P^S^th^an^w^h^{at w}^o^u^l^d^h^a^v^e^been^receiv^e^d
^l^o^w^w^h^a^t^t^h^e^s^e^ho^spⁱ^t^a^l^s^w^o^ul^d^ha^ve^und^e^r^t^h^e^p^rⁱ^o^r^sy^st^e^m^o^r^usi^{ng ho}^spⁱ^t^a^l^’^s
^e^{d u}ⁿ^d^{er th}^{e pay}^m^en^t^s^y^s^t^emⁱⁿ^reas^on^{able operatin}^g^and^{capital cos}^t^s
^o^{re OP}^P^S^.^recei^v^e^ad^d^itioⁿ^a^{l p}^a^y^m^en^{ts af}^{ter Octo}^b^e^r
^{1, 2003.}
^creas^e^{HOPD paym}^ents^to^s^m^{all rural}^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^424.^Medicare’^s^fe^e^s^c^he^d^u^l^e^N^o^provⁱ^sⁱ^oⁿ^.

^spi^t^a^l^s^{. Un}^{der OP}^P^S^{, w}^h^ich^w^a^s^pay^m^eⁿ^t^s^w^o^u^l^{d be i}ⁿ^creas^{ed by}^5%^f^o^r
^p^l^e^m^eⁿ^t^e^dⁱⁿ^A^ugus^t^,^{2000, Medi}^care^co^v^e^r^e^d^o^u^tp^atien^t^clin^{ic an}^d^em^er^g^eⁿ^c^y

CRS-43
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^s^f^o^{r cov}^e^{red s}^e^rvⁱ^ces^u^sⁱ^ng^a^f^e^e^room^vⁱ^sⁱ^t^s^t^h^at^{are prov}ⁱ^d^{ed by}^ru^ral
^h^e^du^l^e^bas^e^{d on}^A^P^C^s^{. Benef}ⁱ^ci^ary^h^o^s^pⁱ^t^a^l^s^wⁱ^t^h^u^p^t^o^{100 beds}^begⁱⁿⁿⁱⁿ^g
^m^en^ts^are^es^tablis^h^e^{d as}^{a percen}^tag^e^Jan^u^a^ry^{1, 2005 an}^{d bef}^o^{re Jan}^u^a^ry^1,
^Medic^a^r^e’^s^f^{ee s}^c^h^e^du^{le pay}^m^en^{t an}^d^{2008. Ben}^e^fⁱ^ci^ary^copay^m^en^t^am^ouⁿ^t^s
^f^e^r^b^y^A^P^{C. Cer}^t^ain^h^o^sp^{itals, in}^clu^dⁱⁿ^g^w^o^u^l^{d n}^o^{t be af}^f^{ected. T}^h^eⁱⁿ^creas^ed
^ral^h^o^s^pⁱ^t^a^l^s^wⁱ^t^hⁿ^o^m^o^re^t^h^an^{100 beds}^,^M^e^dⁱ^c^a^r^e^pay^m^en^t^s^w^o^u^l^{d no}^t^b^e
^{er on}^a^tem^porary^{or on}^con^s^{idered w}^h^en^calcu^latin^g^{a ru}^ral
^e^r^m^an^en^{t b}^a^{sis, f}^r^o^m^fⁱⁿ^aⁿ^c^{ial lo}^sses^h^o^sp^ital’^s^h^o^ld^-^h^ar^m^l^{ess p}^a^y^m^en^t.^B^u^d^g^et
^e^su^{lt f}^r^o^m^im^p^l^em^en^tatioⁿ^o^f^OP^P^Sⁿ^e^u^t^r^a^lity^p^r^o^v^isioⁿ^s^f^o^r^Medⁱ^car^e’^{s OP}^P^S
^e^r^ho^l^d^-ha^r^m^l^e^{ss p}^r^o^vⁱ^sⁱ^o^ns^w^o^u^l^{d n}^o^{t apply}^.^Fin^a^lly^{, th}^es^{e in}^creas^ed
^pay^m^en^t^s^w^oul^{d n}^o^t^af^f^ect^Medi^care
^p^a^y^m^en^{ts f}^o^r^co^v^e^r^e^d^o^u^tp^atien^t^ser^v^ices
^af^t^e^{r Jan}^u^a^ry^{1, 2008.}
ⁱ^{ki/CRS-RL32005}^creas^e^paym^ent^s^{to s}^o^{le com}^m^unity^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^427.^{SCHs th}^{at p}^r^o^v^id^e^clin^ical^N^o^provⁱ^sⁱ^oⁿ^.
^g/w^s^pⁱ^t^al^s^(S^C^H^s⁾^{for cl}ⁱⁿⁱ^c^al^dⁱ^agnos^ti^c^di^agⁿ^o^s^tⁱ^c^l^a^borat^ory^t^e^s^t^s^cov^e^{red u}ⁿ^d^er
^s^.or^t^s^{. Gen}^e^r^a^lly^{, h}^o^sp^{itals th}^at^P^a^rt^{B i}ⁿ^{2005 an}^{d 2006 w}^o^u^l^d^b^e
^le^ak^o^v^id^{e clin}^{ical d}ⁱ^agⁿ^o^{stic lab}^o^r^ato^r^y^tests^reim^bu^rs^{ed th}^{eir reas}^on^{able cos}^t^s^of
^e^r^P^a^{rt B}^{are reim}^bu^rs^{ed u}^sⁱⁿ^g^{a f}^e^e^f^u^rn^is^hⁱⁿ^g^th^{e tes}^t^s^.^{No ben}^e^fⁱ^ciary^cos^t^-
^://wiki^e^d^u^{le. SCHs th}^at^p^r^o^v^id^e^so^m^e^clin^ical^sha^rⁱ^{ng a}^m^o^unt^{s w}^o^ul^d^a^p^p^l^{y t}^o^t^h^e^s^e
^h^ttpⁿ^o^s^tⁱ^c^t^e^s^t^s^{24 h}^o^u^r^s^{a day}^qu^alⁱ^f^y^f^o^r^s^e^rv^ices^.
^creas^{e in}^th^e^am^ouⁿ^t^s^es^tablis^h^e^{d in}
^u^tp^a^tⁱ^eⁿ^t^lab^o^r^ato^r^y^f^{ee sch}^e^d^u^{le; n}^o
^ne^fi^cⁱ^a^r^y^c^o^st^-sha^rⁱ^{ng a}^m^o^unt^{s a}^r^e
^pos^ed.
^a^{blish new}^pa^y^m^ent^m^e^t^h^o^d^f^o^r^Se^c^tⁱ^oⁿ^621.^S^t^artⁱⁿ^g^Jan^u^a^ry^{1, 2004,}^S^ecti^oⁿ^436.^Aⁿ^e^w^pa^y^m^en^t^m^e^t^h^{od f}^o^r^S^ecti^oⁿ^621(a)^{. Startin}^g^f^o^{r s}^e^rv^ices
^{and biologicals}^.^sp^ecifⁱ^ed^co^v^e^r^e^d^HOP^D^d^r^u^g^s^w^{ill b}^e^cert^aⁱⁿ^H^O^P^D^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^w^o^u^l^d^furⁿⁱ^s^he^d^b^e^giⁿⁿⁱ^{ng J}^a^nua^r^y¹^,²⁰⁰⁴^,
^{der OP}^P^S^{, Medicar}^e^p^a^y^s^f^o^{r cov}^e^red^pai^d^bas^e^d^on^{a percen}^t^a^g^e^of^t^h^{e ref}^e^ren^c^e^{be es}^t^a^blⁱ^s^h^e^{d f}^o^{r 200}⁵^an^{d 2006. T}^h^e^c^e^r^t^aⁱⁿ^c^o^ve^r^e^d^H^O^P^D^d^r^{ugs w}^o^ul^d^b^e
^tp^atien^t^d^r^u^g^sⁱⁿ^oⁿ^{e o}^f^th^r^{ee w}^a^y^s^{: (}¹⁾^av^erag^e^w^h^oles^{ale price f}^o^{r th}^{e dru}^g^.^T^h^e^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^w^o^u^l^{d be t}^h^os^{e f}^o^r^pai^dⁿ^o^m^o^{re t}^h^an^95%^of^A^W^{P or l}^e^s^s
^a^tr^aⁿ^sitio^na^{l p}^a^ss-thr^o^{ugh p}^a^y^m^eⁿ^{t; (}²⁾^percen^tag^e^of^the^r^e^f^e^ren^{ce price f}^o^{r s}^o^le-^w^h^ich^h^o^sp^{itals receiv}^e^d^tran^sitioⁿ^a^{l p}^a^ss-^th^an^th^e^tr^an^sitioⁿ^p^e^r^cen^tag^e^o^f^th^e^A^W^P
^{a s}^e^p^a^r^a^{te A}^P^C^pay^m^en^{t; or (3) as}^so^u^r^{ce d}^r^u^g^s^m^aⁿ^u^f^actu^r^ed^b^y^oⁿ^{e en}^tity^t^h^r^o^{ugh p}^a^y^m^eⁿ^t^s^p^rⁱ^o^r^t^o^J^a^nua^r^y¹^,²⁰⁰⁵^f^r^om^CY^{2004 t}^h^ro^{ugh CY}^{2006. In}
^k^ag^{ed A}^P^C^pay^m^en^{t w}^ith^oth^e^r^c^aⁿ^b^eⁿ^o^les^s^th^an^{88% an}^{d n}^o^g^r^eater^t^h^a^t^ha^ve^b^e^eⁿ^a^ssi^gne^d^t^o^d^r^ug-sp^e^cⁱ^fi^c^s^u^bs^equ^eⁿ^t^y^ears^,^pay^m^en^{t w}^o^u^l^{d be equ}^a^l
^v^{ices. T}^r^an^sitioⁿ^a^l^p^a^ss-^th^r^o^u^g^h^t^h^an^95%ⁱⁿ^C^Y^{2004 an}^{d n}^o^l^e^s^s^t^h^an^83%^A^P^{Cs b}^e^giⁿⁿⁱ^{ng t}^h^e^d^a^t^e^o^f^eⁿ^a^c^t^m^e^nt^.^O^r^{to av}^erag^{e price f}^o^{r th}^{e dru}^gⁱⁿ^th^{e area}
^m^en^ts^{are ex}^t^r^{a pay}^m^en^ts^{to cov}^e^{r th}^e^an^dⁿ^o^g^r^eat^er^t^h^an^95%ⁱⁿ^C^Y^{2005. T}^h^e^th^os^{e th}^{at w}^o^u^l^{d h}^a^v^e^been^pai^dⁱⁿ^s^u^ch^a^an^d^y^ear^estab^lish^e^d^b^y^th^{e co}^m^p^etitiv^e
^en^{tal cos}^t^as^s^o^{ciated w}ⁱ^t^h^certain^percen^tag^e^of^th^{e ref}^e^ren^{ce price}^for^m^aⁿⁿ^e^r^b^u^{t f}^o^r^th^{e ap}^p^licatioⁿ^o^f^thⁱ^s^a^c^q^uⁱ^s^ition^prog^ram^uⁿ^d^{er 1847A}^{. T}^h^e

CRS-44
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^di^cal^devⁱ^ces^{, dru}^g^s^an^{d bi}^ol^ogⁱ^cal^s^t^h^atⁱⁿⁿ^o^v^a^to^r^m^u^ltip^le^so^u^r^{ce d}^r^u^g^s^can^b^eⁿ^o^provⁱ^sⁱ^on.^Pay^m^en^t^s^m^a^{de u}ⁿ^d^{er t}^hⁱ^s^cov^e^{red H}^O^P^D^dru^g^s^af^f^e^c^t^{ed by}^t^hⁱ^s
^p^u^t^s^{to an}^ex^is^tin^g^s^e^rv^{ice. T}^h^e^g^r^eat^{er t}^h^an^68%ⁱⁿ^C^Y^{2004 an}^d^C^Y^2005.^provⁱ^sⁱ^oⁿ^w^o^u^l^{d be ex}^em^pt^f^r^om^t^h^e^prov^is^ion^{are radioph}^arm^a^ceu^ticals^an^d
^d^itioⁿ^a^{l p}^a^y^m^en^{t f}^o^r^{a g}ⁱ^v^eⁿ^item^is^T^h^{e p}^e^r^c^eⁿ^tag^e^of^th^{e ref}^e^ren^{ce price f}^o^r^bu^dg^{et n}^e^u^t^rality^requ^irem^en^{t in}^FY2005^ou^t^p^atⁱ^eⁿ^t^dru^g^s^t^h^at^w^e^{re pai}^d^oⁿ^{a pas}^s^-
^t^a^blⁱ^s^h^e^{d f}^o^{r 2 or 3 y}^ears^an^{d t}^h^eⁿ^t^h^eⁿ^oⁿⁱⁿⁿ^o^v^a^to^r^m^u^ltip^le^so^u^r^{ce d}^r^u^g^s^can^b^e^aⁿ^d^F^Y^{2006. In}^{2005, t}^h^es^{e dru}^g^s^w^oul^d^thr^o^{ugh b}^a^{sis o}ⁿ^o^r^b^e^f^o^r^e^Decem^b^e^r³¹^,
^t^s^{are in}^corporat^edⁱⁿ^to^th^e^AP^Cⁿ^o^g^r^eat^{er t}^h^an⁴⁶^{% i}ⁿ^C^Y^{2004 an}^d^{be paid as}^f^o^llow^s^{: a s}ⁱ^{ngle s}^o^u^r^{ce or}^{2002. T}^h^es^{e w}^o^u^l^{d n}^o^tⁱⁿ^cl^u^d^{e drug}^s^f^o^r
^{e w}^e^ig^h^t^s^.^B^B^R^{A s}^p^ecifⁱ^{ed th}^at^C^Y^{2005. T}^h^{e ref}^e^ren^{ce av}^erag^e^w^h^ol^es^al^e^orph^an^produ^ct^w^o^u^l^{d be pai}^d^at^94%^of^w^hⁱ^c^{h p}^a^s^s^-t^hr^o^{ugh p}^a^y^m^eⁿ^t^s^a^r^e^fi^r^s^t
^ss-t^h^r^o^{ugh p}^a^y^m^eⁿ^t^s^w^o^ul^d^b^e^m^a^d^e^fo^r^{price is}^th^{e av}^erag^{e w}^h^oles^ale^price^f^o^{r th}^e^t^h^{e A}^W^P^e^xⁱ^s^tⁱⁿ^g^on^May^{1, 2003;}^a^m^a^{de beg}ⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2}⁰^{03 or t}^h^os^e
^rren^{t or}^p^h^an^dru^g^s^{; cu}^rren^{t can}^cer^dru^g^as^of^May^{1, 2003.}^Iⁿ^su^bs^equ^eⁿ^t^m^u^ltip^le^so^u^r^ce^d^r^u^g^w^o^u^l^d^b^e^p^a^id^{at 9}¹^%^dru^g^s^f^o^{r w}^hⁱ^c^h^{a t}^e^m^porary^H^C^PC^S^code
^e^r^a^p^y^dru^g^s^{, bi}^ol^ogⁱ^cal^s^,^aⁿ^d^y^ear^{s, p}^a^y^m^en^{t w}^{ill eq}^u^a^{l to}^th^{e av}^er^a^g^e^of^th^{at ex}^is^tin^g^av^erag^{e w}^h^ol^es^{ale price}^ha^{s n}^o^t^b^e^eⁿ^a^ssi^gne^d^.^D^r^{ugs fo}^r^w^hⁱ^c^{h a}
^y^t^h^e^rapy^{; cu}^rren^{t radi}^o^p^h^a^m^aceu^tical^acq^uⁱ^sitioⁿ^co^{st f}^o^r^th^{e d}^r^u^g^f^o^r^th^{at y}^ear⁽^A^W^P⁾^;^aⁿ^d^a^d^r^{ug w}ⁱ^t^h^ge^ne^rⁱ^c^ve^r^sⁱ^o^ns^t^e^m^porary^H^C^PC^S^{code h}^a^sⁿ^o^t^been
^g^s^an^{d bi}^ol^ogⁱ^cal^pro^d^u^ct^s^;^an^{d n}^e^w⁽^w^hi^c^h^m^a^y^va^r^y^b^y^ho^spⁱ^t^a^l^gr^o^u^p^t^a^kiⁿ^g^w^o^u^l^d^b^e^p^a^id^at⁷¹^{% o}^f^th^{at ex}^istin^g^assⁱ^gⁿ^e^{d w}^o^u^l^{d be rei}^m^bu^rs^{ed at}^95%^of
^g^s^an^{d b}ⁱ^o^l^og^{ical ag}^en^ts^{. Gen}^e^rally^,ⁱⁿ^{to accou}ⁿ^t^h^o^s^p^{ital v}^o^lu^m^e^{or oth}^e^r^A^W^{P. T}^h^os^{e i}^t^e^m^s^f^u^rnⁱ^s^h^e^{d as}^part^of^t^h^e^A^W^P.^Th^e^t^r^aⁿ^s^itioⁿ^p^e^r^c^eⁿ^t^a^g^e^t^o
^a^{s estab}^lish^e^d^th^{at a p}^a^ss-^t^h^r^o^u^g^h^h^o^sp^{ital ch}^ar^acter^istics)^o^r^if^h^o^sp^ital^ot^h^e^{r H}^O^P^D^s^e^rvⁱ^ces^w^o^u^l^d^{be pai}^d^u^sⁱⁿ^g^A^W^P^fo^r^so^l^e^-so^u^r^c^e^d^r^{ugs m}^a^nufa^c^t^ur^e^d
ⁱ^{ki/CRS-RL32005}^m^en^t^f^o^{r an}^elⁱ^gⁱ^b^l^e^dru^gⁱ^s^bas^e^{d on}^f^e^ren^{ce betw}^een^95%^of^its^av^erag^e^acq^uⁱ^sitioⁿ^co^{st d}^a^ta^ar^{e n}^o^{t av}^ailab^l^{e, th}^e^ave^r^ag^{e price f}^o^{r th}^{e dru}^gⁱⁿ^th^{e y}^ear^th^e^sam^e^ap^p^licab^{le p}^e^r^cen^tag^e^o^f^th^e^A^W^P^th^{at w}^o^u^l^{d h}^a^v^e^been^determⁱⁿ^{ed on}^by^on^{e en}^tity^is⁸³^%ⁱⁿ^C^Y^{2004, 77% in}^C^Y^{2005, an}^d^71%ⁱⁿ^C^Y^{2006. T}^h^e
^g/w^{ale price an}^{d th}^{e portion}^of^th^e^es^t^a^blⁱ^s^h^e^{d u}ⁿ^d^{er S}^ectⁱ^oⁿ^s^{1842(o), 1847A}^May^{1, 2003 i}^f^s^u^ch^pay^m^en^t^w^e^{re t}^o^h^a^v^e^tr^an^sitioⁿ^p^e^r^cen^tag^e^to^A^W^P^f^o^rⁱⁿⁿ^o^v^a^to^r
^s^.or^e^r^w^{ise ap}^p^licab^{le A}^P^C^p^a^y^m^en^{t r}^a^te^{or 18}^{47B (w}^hⁱ^ch^s^p^eci^f^y^Medi^care^been^m^a^{de on}^t^h^at^d^a^t^e^{. F}^o^{r 2006, t}^h^es^e^m^u^{ltiple s}^o^u^r^ce^dru^g^s^is^{81.5% in}^C^Y^2004,
^le^ak^ib^u^t^ab^{le to}^th^{e ex}^istin^g^d^r^u^g^,^su^b^j^{ect to}^p^a^y^m^en^{ts f}^o^r^o^u^tp^atien^t^d^r^u^g^s^co^v^e^r^e^d^pay^m^en^{t am}^o^uⁿ^t^s^w^o^u^l^{d be in}^creas^{ed by}^75%ⁱⁿ^C^Y^2005,^an^d^68%ⁱⁿ^C^Y^{2006. T}^h^e
^u^d^g^{et n}^e^u^t^r^a^lity^p^r^o^v^isioⁿ^.^uⁿ^d^{er P}^a^{rt B}⁾^as^calcu^{lated an}^{d adj}^u^s^t^{ed by}^C^P^I-^U^.^A^pri^v^at^{e n}^oⁿ^-^pr^ofⁱ^t^org^aⁿⁱ^zatⁱ^oⁿ^tr^an^sitioⁿ^p^e^r^cen^tag^e^to^A^W^P^f^o^r^m^u^ltip^le
^://wiki^th^{e Secretary}^.^T^h^{e cov}^e^{red HOP}^{D dru}^g^s^uⁿ^d^{er con}^t^ra^{ct w}^o^u^l^{d determ}ⁱⁿ^{e th}^e^so^u^r^{ce d}^r^u^g^s^w^ith^g^eⁿ^e^rⁱ^{c d}^r^u^g^co^m^p^etito^r^s
^h^ttp^af^f^ected^b^y^th^{is p}^r^o^v^isioⁿ^a^r^{e o}^u^tp^atien^t^h^o^s^p^{ital acq}^uⁱ^sitioⁿ^,^p^h^ar^m^acy^ser^v^ices,ⁱ^s^46%ⁱⁿ^C^Y^{2004 t}^h^ro^{ugh CY}^{2006. T}^h^e
^dru^g^s^t^h^at^w^e^{re p}^aⁱ^d^on^{a pas}^s^-^t^h^rou^g^h^an^{d h}^aⁿ^d^lin^g^cos^t^s^fo^{r each}^of^th^{e dru}^g^s^ad^d^itioⁿ^a^{l ex}^p^eⁿ^d^itu^r^e^{s r}^e^su^ltin^g^f^r^o^m
^ba^sⁱ^s^on^or^be^f^o^r^e^Decem^be^r^31,^2002.^pai^dⁱⁿ^t^hⁱ^s^f^a^s^hⁱ^oⁿ^t^o^s^e^t^pay^m^en^t^sⁱⁿ²⁰⁰⁷^t^h^es^{e prov}ⁱ^sⁱ^oⁿ^s^w^o^u^l^{d n}^o^t^{be s}^u^bj^ect^t^o
^T^h^e^s^e^w^o^ul^d^no^tⁱⁿ^c^l^ud^e^d^r^{ugs fo}^r^w^hⁱ^c^h^an^{d bey}^oⁿ^d^{. T}^hⁱ^s^an^al^y^sⁱ^s^w^o^u^l^{d be}^th^e^b^u^d^g^{et n}^e^u^t^r^a^lity^r^e^q^u^ir^em^en^{t. Star}^tin^g
^p^a^ss-t^h^r^o^{ugh p}^a^y^m^eⁿ^t^s^a^r^e^fi^r^s^t^m^a^d^e^oⁿ^o^r^accu^{rate w}^ithⁱⁿ^{3% of}^th^{e tru}^e^m^eanⁱⁿ^C^Y^{2004, t}^h^{e S}^ecret^ary^w^o^u^l^{d be}
^af^t^e^{r Jan}^u^a^ry¹^,²⁰^03;^t^h^os^{e dru}^g^s^f^o^r^h^o^sp^ital^acq^uⁱ^sitioⁿ^an^d^h^aⁿ^d^lin^g^co^{sts at a}^r^e^q^uⁱ^r^ed^to^lo^w^e^r^th^{e th}^r^e^sh^o^l^d^f^o^r
^w^hⁱ^c^h^{a t}^e^m^porary^H^C^PC^S^{code h}^a^sⁿ^o^t⁹⁵^%^c^o^nfi^d^eⁿ^c^e^l^e^ve^l^;^b^e^gi^{n b}^y^J^a^nua^r^y¹^,^estab^lishⁱⁿ^g^{a sep}^a^r^a^{te A}^P^{C g}^r^o^u^p^f^o^r
^{been as}^sⁱ^gⁿ^e^d;^{or, du}^riⁿ^g^{2004 an}^{d 2005,}^2005;^an^{d be u}^pdat^e^{d a}^nnua^l^l^y^.^St^a^r^tⁱⁿ^g^hⁱ^g^h^e^{r cos}^t^s^dru^g^s^f^r^o^m^{$150 t}^o^{$50 per}
^o^r^p^h^aⁿ^d^r^ugs.^D^r^ug^s^fo^r^w^hⁱ^c^{h a}^Jan^u^a^ry^{1, 2006, a report}^w^o^u^l^{d be du}^{e t}^o^a^d^mⁱⁿⁱ^st^r^a^tⁱ^o^n.^T^h^e^s^e^se^p^a^r^a^t^e^d^r^{ug A}^P^C
^t^e^m^p^orary^H^C^PC^S^{code h}^a^sⁿ^o^t^been^C^oⁿ^g^r^es^s^each^y^ear.^g^r^o^u^p^s^w^o^u^l^dⁿ^o^{t b}^e^elig^ib^{le f}^o^r^o^u^t^lier
^assigⁿ^e^d^w^{ill b}^e^r^e^im^b^u^r^s^ed^{at 9}⁵^%^o^f^th^e^p^a^y^m^eⁿ^t^s^.^S^t^a^r^tⁱⁿ^gⁱⁿ^C^Y²⁰⁰⁴^,
^A^W^P^.^O^r^p^h^aⁿ^d^r^ugs^d^u^rⁱ^{ng t}^hⁱ^s²^-^y^e^a^r^M^e^dⁱ^c^a^r^e^’^{s tr}^an^sitioⁿ^a^{l p}^a^ss-^th^r^o^u^g^h
^tim^e^p^e^rⁱ^o^d^w^{ill b}^e^p^a^id^{at an}^am^o^uⁿ^t^pay^m^en^t^s^f^o^{r dru}^g^s^and^bi^ol^ogⁱ^cal^s
^s^p^ecifⁱ^{ed by}^th^{e Secretary}^.^co^v^e^r^e^d^uⁿ^d^er^{a co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ
^con^t^{ract w}^o^u^l^{d ref}^l^{ect th}^{e a}^m^ouⁿ^t^paid
^Med^P^A^C^w^{ill su}^b^m^{it a r}^e^p^o^r^{t to}^th^e^uⁿ^d^{er th}^{at con}^t^{ract, n}^o^{t 95% of}^A^W^P^.

CRS-45
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^Secretary^on^th^{e pay}^m^en^{t adj}^u^s^t^m^eⁿ^t^to
^am^bu^latory^pay^m^en^{t clas}^sⁱ^fⁱ^cation^s^f^o^r
^s^p^ecifⁱ^{ed cov}^e^{red ou}^tpatien^t^dru^g^s^th^at
^tak^e^sⁱⁿ^{to accou}ⁿ^t^ov^erh^{ead an}^{d related}
^ex^pen^s^es^(s^u^c^h^as^ph^arm^acy^s^e^rv^ices^an^d
^h^aⁿ^d^lin^g^co^s^t^s⁾^{. T}^h^{e Secretary}^is
^au^th^{orized t}^o^adj^u^s^t^th^{e w}^e^ig^h^t^s^f^o^r
^am^bu^latory^pay^m^en^{t clas}^sⁱ^fⁱ^cation^bas^e^d
^oⁿ^su^ch^a^r^eco^m^m^eⁿ^d^atioⁿ^.^T^h^{e ad}^d^itioⁿ^a^l
^e^x^p^eⁿ^d^itu^r^e^{s th}^{at r}^e^su^{lt f}^r^o^m^th^{e p}^r^ev^io^u^s
^ch^an^g^e^{s w}^{ill n}^o^{t b}^e^tak^eⁿⁱⁿ^to^acco^uⁿ^tⁱⁿ
^e^s^t^a^b^lⁱ^s^hi^{ng t}^h^e^c^o^nve^r^sⁱ^o^n,^w^eⁱ^ghtⁱ^ng^aⁿ^d
^ot^h^e^{r adj}^u^s^t^m^eⁿ^t^f^act^ors^f^o^{r 2004 an}^d
ⁱ^{ki/CRS-RL32005}^{2005, bu}^{t w}^{ill be tak}^eⁿⁱⁿ^to^a^ccouⁿ^tⁱⁿ^s^u^bs^equ^eⁿ^t^y^ears^.
^g/w
^s^.or^Fo^r^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^f^u^rnⁱ^s^h^e^{d i}ⁿ
^le^ak^{2005 an}^{d 2006, t}^h^{e S}^ecret^ar^yⁱ^s^requⁱ^r^ed
^t^o^lo^w^e^r^th^{e th}^r^e^sh^o^l^d^f^o^r^estab^lishⁱⁿ^g^a
^://wiki^se^p^a^r^a^t^e^A^P^{C gr}^o^u^p^fo^r^hi^ghe^r^c^o^st^d^r^ugs
^h^ttp^f^r^om^{$150 t}^o^{$50 per adm}ⁱⁿⁱ^s^t^ratⁱ^oⁿ^.
^T^h^es^{e s}^e^parat^e^dr^u^g^A^P^C^g^r^ou^ps^{are n}^o^t
^elig^ib^{le f}^o^r^o^u^tlier^p^a^y^m^en^{ts. Star}^tin^gⁱⁿ
^C^Y^{2004, Medicar}^e^’^s^tran^s^ition^a^{l pas}^s^-
^t^h^r^o^{ugh p}^a^y^m^eⁿ^t^s^fo^r^d^r^u^g^{s a}ⁿ^d
^bⁱ^o^l^o^g^{icals co}^v^e^r^e^d^uⁿ^d^er^{a co}^m^p^etitiv^e
^acq^uⁱ^sitioⁿ^coⁿ^t^r^{act w}^ill^eq^u^a^l^th^{e av}^er^ag^e
^pri^c^e^fo^r^t^h^{e dru}^g^{or bi}^ol^ogⁱ^cal^f^o^{r al}^l
^co^m^p^etitiv^{e acq}^uⁱ^si^tⁱ^oⁿ^ar^{eas calcu}^lated
^an^{d adj}^u^s^t^{ed by}^th^{e Secretary}^f^o^r^th^at^y^ear.

CRS-46
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^mⁱ^{t ap}^p^lⁱ^c^ati^oⁿ^{of fu}ⁿ^c^ti^on^al^S^ecti^oⁿ^622.^T^h^{e Sec}^r^e^t^ar^y^{is p}^r^o^h^ib^ited^S^ecti^oⁿ^437.^T^h^{e Secretary}^w^o^u^l^d^no^t^be^S^ecti^oⁿ⁶²¹^(c).^T^h^{e Secretary}^w^o^u^l^{d be}
^uⁱ^v^a^l^eⁿ^{ce s}^t^andards^w^h^{en determ}ⁱⁿⁱⁿ^g^fr^o^m^p^u^b^lⁱ^s^hi^{ng r}^e^gul^a^tⁱ^o^ns^t^h^a^t^a^p^p^l^y^a^ab^{le to}^a^p^p^l^y^th^{is stan}^d^a^r^d^to^{a d}^r^u^g^o^r^prohⁱ^bⁱ^t^e^{d f}^r^om^appl^yⁱⁿ^g^{a “}^f^uⁿ^c^tⁱ^oⁿ^a^l
^’^s^elig^ibilit^y^f^o^r^t^r^aⁿ^sitⁱ^oⁿ^a^l^pa^ss^func^tⁱ^o^na^l^e^q^ui^va^l^e^nc^e^st^aⁿ^d^a^r^d^t^o^a^d^r^ug^bi^ol^ogⁱ^cal^f^o^{r t}^r^an^sⁱ^tⁱ^oⁿ^a^l^pas^s^-^t^h^rou^g^h^equⁱ^v^a^len^{ce” s}^t^an^{dard or an}^y^sⁱ^m^ilar
^ou^gh^p^aym^en^ts^.^S^t^artⁱⁿ^gⁱⁿ^2003,^o^r^bⁱ^o^l^o^g^{ical f}^o^r^tr^an^sitioⁿ^a^{l p}^a^ss-^th^r^o^u^g^h^p^a^y^m^en^{ts u}ⁿ^d^er^OP^P^S^.^T^h^{is p}^r^o^h^ib^itioⁿ^s^t^an^{dard i}ⁿ^{order t}^o^deem^{a part}ⁱ^c^u^l^{ar dru}^g
^{S decided th}^at^aⁿ^e^w^an^em^{ia treatm}^eⁿ^t^p^a^y^m^en^t^s^uⁿ^d^er^OP^P^S^{. T}^h^{is p}^r^o^h^ib^itioⁿ^w^o^u^l^{d apply}^,^uⁿ^l^es^s^s^u^ch^{a s}^t^an^{dard w}^a^s^{or bi}^ol^ogⁱ^cal^t^o^{be s}ⁱ^mⁱ^l^a^{r or f}^uⁿ^c^tⁱ^oⁿ^a^l^l^y
^r^can^cer^p^a^tien^t^{s w}^a^{s n}^o^loⁿ^g^e^r^elig^ib^le^ap^p^{lies to}^th^{e ap}^p^licatioⁿ^o^f^th^e^f^uⁿ^c^tioⁿ^a^l^m^a^d^e^p^r^io^r^to^en^actm^eⁿ^t^aⁿ^d^oⁿ^ly^f^o^r^th^e^e^q^ui^va^l^e^nt^t^o^aⁿ^o^t^he^r^d^r^{ug unl}^e^{ss t}^h^e
^r^p^a^ss-t^h^o^{ugh p}^a^y^m^eⁿ^t^s^uⁿ^d^e^r^O^P^P^S^,^equⁱ^v^a^len^{ce s}^t^an^dard^on^or^af^{ter th}^{e date of}^p^u^r^p^o^s^es^o^f^tr^an^sitioⁿ^a^{l p}^a^ss-^th^r^o^u^g^h^C^o^m^mⁱ^s^sⁱ^on^{er of}^FDA^es^tablis^h^e^s^s^u^ch^a
^s^e^{it w}^a^s^f^uⁿ^c^tion^a^lly^equⁱ^v^a^len^t^en^actm^eⁿ^t^{, u}ⁿ^l^es^s^s^u^ch^a^p^plication^w^a^s^p^a^y^m^en^{ts. T}^h^{e Secr}^etar^y^w^o^u^l^d^{still b}^e^s^t^an^{dard an}^{d certif}^ies^th^{at th}^{e tw}^{o produ}^cts
^t^h^o^{ugh no}^t^st^r^u^c^t^ur^a^l^l^yⁱ^d^eⁿ^tⁱ^c^a^l^o^r^m^a^{de prior to en}^actm^eⁿ^t^an^{d th}^{e Secretary}^{able to deem}^{a partic}^u^l^{ar dru}^g^as^iden^tical^{are f}^uⁿ^c^tion^a^lly^equⁱ^v^a^len^t^.^T^h^{e Secretary}
^tical^l^y^equⁱ^v^a^len^t^{) to an}^ex^is^tin^g^a^p^p^{lies su}^ch^stan^d^a^r^d^to^th^{e d}^r^u^g^oⁿ^ly^f^o^r^t^o^an^ot^h^e^{r dru}^gⁱ^f^t^h^e^t^w^{o produ}^ct^s^are^w^o^u^l^d^b^e^ab^{le to}^im^p^l^em^eⁿ^{t th}^{is stan}^d^a^r^d
^eⁿ^t^{. T}^h^{e tr}^an^sitioⁿ^a^{l p}^a^ss-^th^r^o^u^g^h^t^h^{e pu}^rpos^es^of^t^r^an^sⁱ^tⁱ^oⁿ^a^l^pas^s^-^t^h^rou^g^h^ph^arm^aceu^tic^a^l^l^y^e^q^uⁱ^v^a^len^t^an^d^a^f^ter^m^eetin^g^ap^p^licab^l^e^r^u^l^e^m^a^kⁱⁿ^g
^o^r^th^{e d}^r^u^g^w^a^{s r}^e^d^u^ced^to^z^e^r^o^p^a^y^m^en^{ts. T}^h^{is p}^r^o^v^isioⁿ^d^o^e^{s n}^o^t^a^f^f^e^ct^bi^oequⁱ^v^al^en^t^,^as^det^e^rmⁱⁿ^{ed by}^F^D^A^.^r^e^q^u^ir^em^en^ts.^T^h^{e p}^r^o^v^isioⁿ^p^r^o^h^ib^{its th}^e
ⁱⁿ^g^f^o^{r s}^e^rvⁱ^cesⁱⁿ^2003.^th^{e Secretar}^y^’^s^au^th^ority^{to deem}^a^applⁱ^catⁱ^oⁿ^of^t^hⁱ^s^s^t^an^{dard t}^o^{a dru}^g^or
ⁱ^{ki/CRS-RL32005}^p^a^r^tⁱ^c^u^l^{ar dru}^g^{to be iden}^{tical to an}^oth^e^r^dru^g^if^th^{e 2 produ}^cts^{are ph}^arm^aceu^tically^bi^ol^ogⁱ^cal^pri^o^{r t}^o^Juⁿ^e^{13, 2003.}
^g/w^e^q^uⁱ^v^a^l^eⁿ^t^an^{d bi}^oequⁱ^v^a^l^eⁿ^t^,^a^s
^s^.or^det^e^rmⁱⁿ^e^d^by^t^h^{e C}^o^m^mⁱ^s^sⁱ^on^{er of}^t^h^e
^le^ak^F^{ood an}^{d D}^r^u^g^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ^.
^://wiki^tablis^h^s^e^{parate paym}^ents^{for certain}^S^ecti^oⁿ^421(b⁾^.^Fr^om^Jan^u^a^ry^{1, 2004}^Secti^oⁿ^450A^{. T}^h^{e Secretary}^w^o^u^l^{d be}^S^ecti^oⁿ^621(b⁾^.^F^r^om^{2004 t}^h^rou^g^h
^h^ttp^c^hy^t^h^era^py^devⁱ^c^e^s^{. In}^Medicare’^s^t^h^r^o^{ugh Decem}^b^e^r³¹^,^{2006, Medi}^care’^s^requ^{ired to con}^d^u^c^{t a bu}^dg^etⁿ^e^u^t^{ral, 3-}^2006,^pay^m^en^t^s^f^o^{r brach}^y^t^h^e^rapy^devⁱ^ces
^P^S^{, cu}^rren^{t dru}^g^s^an^{d biolog}^icals^th^at^pay^m^en^t^s^f^o^{r brach}^y^t^h^e^rapy^d^e^vi^ces^wⁱ^l^l^y^ear^dem^oⁿ^s^tration^proj^{ect th}^{at w}^o^u^l^d^w^o^u^l^{d equ}^a^{l th}^{e h}^o^s^p^ital’^s^ch^arg^e^s^adj^u^s^t^ed
^r^e^elig^ib^l^e^f^o^r^tr^an^sitioⁿ^a^{l p}^a^ss-^th^r^o^u^g^h^equ^a^{l th}^{e h}^o^s^p^ital’^s^ch^arg^e^s^adj^u^s^t^ed^to^e^x^c^l^u^d^{e brach}^y^t^h^e^rapy^devⁱ^ces^f^r^om^th^e^t^o^c^o^s^t^{. T}^h^{e Secretary}^w^o^u^l^{d be requ}^ired
^m^en^t^s^on^{or pri}^o^{r t}^o^Jan^u^a^ry¹^,²^000,^co^{st. Ch}^ar^g^e^s^f^o^r^su^ch^d^e^vⁱ^{ces w}^{ill n}^o^{t b}^e^O^PPS^an^d^m^a^k^e^pay^m^en^t^on^t^h^{e bas}ⁱ^s^of^{to create s}^e^{parate A}^P^C^s^{to pay}^f^o^{r th}^es^e
^{re rem}^o^v^e^{d f}^r^om^t^h^at^pay^m^en^t^s^t^at^u^sⁱⁿ^clu^d^edⁱⁿ^d^e^ter^mⁱⁿⁱⁿ^g^an^y^o^u^tlier^th^{e h}^o^s^p^ital’^s^ch^a^r^g^e^s^f^o^{r each}^devⁱ^ce,^devⁱ^ces^th^{at ref}^l^{ect th}^{e num}^b^e^{r, is}^otope,
^ectⁱ^v^e^J^a^nu^ary^{1, 2003. C}^M^S^pay^m^en^ts^{. T}^h^{e S}^ecretary^is^requ^{ired to}^adj^u^s^t^{ed to cos}^t^{. T}^h^{e Secretary}^w^o^u^l^{d be}^an^d^r^a^dioactiv^{e in}^ten^s^ity^of^s^u^ch^devⁱ^ces^.
^lish^e^d^sep^a^r^a^{te A}^P^{C p}^a^y^m^eⁿ^{ts f}^o^r^{create s}^e^para^t^e^A^P^C^s^{to pay}^f^o^{r th}^es^e^r^e^q^u^ir^ed^to^c^r^{eate sep}^a^r^a^{te, ad}^d^itioⁿ^a^l^T^hⁱ^s^w^o^u^l^{d i}ⁿ^cl^u^d^{e s}^e^parat^e^g^r^ou^ps^f^o^r
^of^th^es^{e dru}^g^s^{. Oth}^e^{r dru}^g^s^s^u^ch^as^devⁱ^ces^t^h^at^re^fl^e^c^t^t^h^{e n}^u^m^{ber, i}^s^ot^ope,^g^r^ou^ps^of^cov^e^{red H}^O^P^D^s^e^rvⁱ^ces^f^o^r^pal^l^a^di^u^m^-^{103 an}^{d i}^odiⁿ^e^-^{125 dev}ⁱ^ces^.
^h^y^th^erapy^s^eeds⁽^r^ad^io^activ^{e iso}^t^o^p^e^s^an^{d radioactiv}^{e int}^eⁿ^s^ity^of^s^u^ch^devⁱ^ces^,^brach^y^t^h^e^rapy^devⁱ^ces^{to ref}^l^{ect th}^e^G^A^O^w^o^u^l^{d s}^u^bmⁱ^t^{a r}^e^port^t^o^C^oⁿ^g^r^es^s
^{ed in}^can^{cer treatm}^eⁿ^t^s⁾^w^e^{re pack}^agedⁱⁿ^cl^u^dⁱⁿ^g^s^e^parat^e^g^r^ou^ps^f^o^{r pal}^l^a^di^u^m^-ⁿ^u^m^{ber, i}^s^ot^{ope, an}^{d radi}^oactⁱ^v^{e i}ⁿ^t^eⁿ^sⁱ^t^y^oⁿ^t^h^{e appropri}^a^t^eⁿ^e^s^s^of^s^u^ch^pay^m^en^t^s
^to^p^a^y^m^en^{ts f}^o^r^b^r^a^c^h^y^t^h^e^r^a^p^y^{103 an}^{d i}^odiⁿ^e^-¹²⁵^devⁱ^ces^{. G}^A^Oⁱ^s^of^s^u^ch^devⁱ^ces^.ⁿ^o^l^a^t^e^{r t}^h^an^Jan^u^a^ry^{1, 2005.}

^r^es^.^r^e^q^u^ir^e^d^to^stu^d^y^th^{e ap}^p^r^o^p^r^iaten^e^{ss o}^f
^pay^m^en^t^s^f^o^{r bra}^c^h^y^t^h^e^rapy^devⁱ^ces^an^d
^s^u^bmⁱ^t^{a report}ⁱⁿ^c^l^u^dⁱⁿ^g
^r^e^c^o^m^m^e^nd^a^tⁱ^o^ns^t^o^Co^ngr^e^{ss a}ⁿ^d^t^o^t^h^e
^S^ecret^aryⁿ^o^l^a^t^e^{r t}^h^an^Jan^u^a^ry^{1, 2005.}

CRS-47
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^spit^a^l^a^c^quisitⁱ^oⁿ^s^t^udy^.^No^S^ecti^oⁿ^621(a).^GA^O^wⁱ^{ll co}ⁿ^d^u^c^{t an}^N^o^provⁱ^sⁱ^oⁿ^.^S^ectⁱ^oⁿ^621(d⁾^.^T^h^{e Secretary}^w^o^u^l^d
^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^a^c^q^uⁱ^sitioⁿ^co^{st su}^rv^ey^f^o^{r each}^sp^ecifⁱ^ed^stu^d^y^th^{e h}^o^sp^{ital acq}^uⁱ^sitioⁿ^co^{sts r}^e^lated
^co^v^e^{red dru}^gⁱⁿ^{2004 an}^{d 2005. N}^o^l^a^t^e^r^t^o^c^o^ve^r^e^d^o^u^t^p^a^tⁱ^e^nt^d^r^{ugs t}^h^a^t^c^o^st^$⁵⁰
^th^an^A^p^r^{il 1}^,²⁰⁰⁵^,^G^A^{O w}^{ill f}^u^rⁿ^ish^th^is^{per adm}ⁱⁿⁱ^s^t^ratⁱ^oⁿ^an^{d m}^o^re^t^h^a^t^are
^s^u^rv^ey^d^a^t^a^t^o^s^e^t^{2006 pay}^m^en^t^rat^e^s^.^reim^bu^rs^{ed u}ⁿ^d^{er th}^{e OP}^P^S^.
^GA^{O w}^{ill su}^b^mⁱ^t^{a r}^e^p^o^r^{t to}^Coⁿ^g^r^{ess o}ⁿ
^{2006 rat}^e^sⁿ^o^l^a^t^e^{r t}^h^an^{30 day}^s^af^t^e^r
^is^s^u^an^{ce of}^th^{e propos}^{ed ru}^{le s}^e^ttin^g^f^o^rth
^th^{ese r}^a^t^e^s^.^G^A^{O w}^{ill su}^b^m^it
^r^e^c^o^m^m^e^nd^a^tⁱ^o^{ns r}^e^ga^r^dⁱ^{ng t}^h^e^sur^v^e^y
^m^e^t^h^odol^og^y^an^{d f}^r^equ^e^nc^y^t^o^t^h^e
^Secr^etar^y^w^h^o^w^{ill co}ⁿ^d^u^c^{t p}^e^rⁱ^o^dⁱ^c
^sur^v^e^y^{s to}^se^{t sub}^s^e^q^ue^{nt p}^a^y^m^eⁿ^{t r}^a^te^s.
ⁱ^{ki/CRS-RL32005}
^g/w
^s^.or
^le^ak^Am^{bulatory Surgery Center Services}^(ASCs⁾
^://wiki^d^u^c^e^am^b^u^l^{atory s}^u^{rgery cen}^ter^S^ecti^oⁿ^626.^In^F^Y^{2004, s}^t^artⁱⁿ^g^A^p^ri^l^1,^N^o^provⁱ^sⁱ^oⁿ^.^Sectioⁿ⁶^25.^T^h^{e r}^e^d^u^ctioⁿⁱⁿ^th^e^u^p^d^a^te
^h^ttp^S^C⁾^upda^t^e^.^{Medicare u}^s^es^{a f}^e^e^{2004, t}^h^{e A}^S^C^u^{pdate w}^{ill be th}^{e C}^P^I-^U^w^o^u^l^{d be rees}^t^a^blⁱ^s^h^e^{d f}^o^{r F}^Y²⁰⁰⁴^-^F^Y
^e^d^u^{le to}^p^a^y^f^o^r^th^{e f}^acility^ser^v^ices^(es^tⁱ^m^at^{ed as}^of^March³¹^{, 2003) m}ⁱⁿ^u^s^2008.^A^S^C^s^w^o^u^l^{d g}^e^t^anⁱⁿ^creas^e
^to^{a su}^r^g^er^y^p^r^o^v^id^edⁱⁿ^an^AS^C^.^{3.0 percen}^t^a^g^e^poiⁿ^t^s^.^In^F^Y^{2005, t}^h^{e l}^a^s^t^cal^cu^{lated as}^th^{e C}^P^I-^{U m}ⁱⁿ^u^s^2.0
^om^F^Y^{1998 t}^h^ro^{ugh FY}^{2002, t}^h^{e u}^pdat^e^qu^{arter of}^calen^{dar y}^{ear 2005,}^an^{d each}^of^p^e^r^cen^tag^e^p^oⁱⁿ^{ts (}^b^u^tⁿ^o^{t less th}^an^zer^o⁾
^{s e}^s^tab^lish^e^d^{as th}^{e CP}^I^-^{U m}ⁱⁿ^u^s²^.⁰^t^h^{e cal}^en^da^r^y^e^ars^{2006 t}^h^ro^ugh^{2009 t}^h^eⁱⁿ^each^of^th^{e f}ⁱ^s^{cal y}^ears^f^r^om²⁰⁰⁴
^t^a^g^e^poiⁿ^t^s^,^bu^tⁿ^o^t^l^e^s^s^t^h^an^zero.^u^p^d^a^{te w}^{ill b}^e⁰^%^{. A}^r^e^vⁱ^sed^p^a^y^m^en^t^t^h^r^o^ugh^2008.

²⁰⁰³^an^d^s^u^bs^equ^eⁿ^t^y^ears^,^t^h^{e u}^pdat^eⁱ^s^s^y^s^t^em^f^o^r^s^u^rg^{ical s}^e^rv^ices^f^u^rn^is^h^e^{d in}^an
^I^-^U^.^AS^C^w^{ill b}^e^im^p^l^em^en^ted^oⁿ^o^r^af^te^r
^Jan^u^a^ry^{1, 2006}^an^{d n}^o^t^l^a^t^e^{r t}^h^an^Jan^u^a^ry
^1,^2008.^It^w^{ill be}^bu^dg^e^tⁿ^e^u^t^ra^lⁱⁿⁱ^t^s
^im^p^l^em^en^tatioⁿ^y^ear^{. T}^h^er^{e w}^{ill b}^eⁿ^o
^admⁱⁿⁱ^s^t^rativ^{e or j}^u^{dicial rev}ⁱ^e^w^of^th^e
^AS^C^clas^sⁱ^fⁱ^catio^{n s}^y^s^t^e^m^,^r^e^l^a^tⁱ^v^e
^w^e^ig^h^t^s^,^pay^m^en^{t am}^ouⁿ^t^s^an^{d an}^y
^g^e^o^g^r^a^p^h^{ic ad}^j^u^stm^eⁿ^t^{s. GA}^{O w}^ill^stu^d^y
^th^{e relativ}^{e cos}^t^s^of^A^S^C^procedu^r^es^.

CRS-48
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^Rura^{l H}^e^a^l^t^h^{Clinics (}^R^H^C^s)^a^{nd Federa}^lly^Q^u^a^lif^{ied H}^e^a^l^t^h^{Clinics (}^F^Q^H^Cs)^Serv^ices
^creas^e^paym^ents^{for rural health}^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^{428. T}^h^{e R}^H^C^up^p^e^r^p^a^y^m^eⁿ^t^N^o^provⁱ^sⁱ^oⁿ^.
^{. BBA}^{1997 ex}^t^eⁿ^d^{ed t}^h^e^{per v}ⁱ^sⁱ^t^w^o^u^l^{d be i}ⁿ^creas^{ed t}^o^{$80.00 f}^o^{r cal}^en^dar
^y^m^eⁿ^t^lim^{its th}^{at h}^a^d^ex^isted^f^o^r^y^{ear 2005.}^T^h^{e MEI appl}ⁱ^cabl^e^t^o^pri^m^ary
^e^p^eⁿ^d^eⁿ^t^r^u^r^a^{l h}^ealth^clinⁱ^c^s^t^o^{care s}^e^rv^ices^w^o^u^l^{d be u}^s^{ed to in}^creas^{e th}^e
^o^v^id^er^-^b^ased^r^u^r^a^{l h}^ealth^c^lⁱⁿ^{ics (}^R^HC)^p^a^y^m^en^{t lim}^{it in}^su^b^s^eq^u^eⁿ^t^y^ear^s.
^cep^t^f^o^r^th^o^s^{e clin}^{ics b}^a^sedⁱⁿ^sm^{all r}^u^r^a^l
^sp^ita^l^s^w^ith^f^e^w^e^r^th^an⁵⁰^b^e^d^s^{. Fo}^r
^rvⁱ^ces^r^eⁿ^d^{ered f}^r^om^Jan^u^a^ry^{1, 2003}
^o^{ugh Fe}^b^r^ua^r^y²⁸^,^{2003, t}^h^{e R}^H^C^u^pper
^m^en^t^lⁱ^mⁱ^tⁱ^s^{$66.46, w}^hⁱ^c^h^ref^l^ect^s^a
ⁱ^{ki/CRS-RL32005}ⁱⁿ^creas^{e i}ⁿ^{2002 pay}^m^eⁿ^t^lⁱ^mⁱ^t^as^t^a^blⁱ^s^h^e^{d by}^t^h^{e 2002 Med}ⁱ^care
^g/w^o^mⁱ^c^In^dex^{(MEI). F}^o^{r s}^e^rvⁱ^ces
^s^.or^d^{ered f}^r^om^March^{1, 2003 t}^h^r^o^u^g^h
^le^ak^{ber 31, 2003,}^t^h^e^{Medicare R}^H^C
^m^en^t^lⁱ^mⁱ^tⁱ^s^{$66.72, w}^hⁱ^c^h
^://wiki^l^ect^s^{a 3.}⁰^%ⁱⁿ^creas^{e i}ⁿ^t^h^{e 2002}
^h^ttp^m^en^t^lⁱ^mⁱ^t^as^es^t^a^blⁱ^s^h^e^d^b^y^t^h^{e 2003}
^E^I^.^Th^e^{2002 M}^E^I^w^a^s^u^s^e^d^a^s^aⁿ
^f^o^{r 3 m}^oⁿ^t^h^s^becau^s^e^of^th^{e delay}^e^d
^p^l^em^en^tatioⁿ^.
^Cov^e^r^e^{d P}^a^r^t^{B Outpa}^t^ie^{nt Dr}^ugs^{(Not P}^r^ov^ide^d^by^a^HOP^D^).
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^y^f^o^{r e}^x^istⁱ^ng^o^u^t^p^a^t^ient^drug^s^S^ecti^oⁿ^303(b⁾^Iⁿ^ge^ne^r^a^l^,^p^a^ym^eⁿ^t^s^fo^r^S^ecti^o^{n 432(a).}^In^2004,^existⁱ^ng^drug^s^S^ecti^oⁿ^303(b⁾^.^Ph^y^sⁱ^cⁱ^aⁿ^s^w^h^{o opt}^ou^t^of
^vⁱ^{ded inc}ⁱ^dent^t^o^a^phy^siciaⁿ^’^s^m^o^s^t^c^o^ve^r^e^d^P^a^r^t^B^d^r^ugs,ⁱⁿ^c^l^udⁱⁿ^g^(av^aⁱ^l^a^bl^{e by}^A^p^ri^l^{1, 2003) w}^o^u^l^{d be pai}^d^th^{e co}^m^p^etitⁱ^v^e^a^c^q^uⁱ^s^itioⁿ^p^r^o^g^r^a^m
^.^A^l^t^h^o^{ugh M}^e^dⁱ^c^a^r^e^d^o^e^{s no}^tⁱⁿ^tr^av^en^o^u^s^im^m^uⁿ^e^g^l^o^b^u^lin^{, f}^u^rⁿ^ish^e^dⁱⁿ^th^{e lo}^w^e^r^o^f^th^{e w}ⁱ^d^e^ly^av^ailab^l^{e m}^a^r^k^et^(w^hⁱ^chⁱ^s^des^c^ri^{bed s}^u^bs^equ^eⁿ^t^l^y^{) w}^o^u^l^d
^r^r^en^tly^h^a^v^e^an^o^u^tp^a^t^ien^t^p^r^escr^ip^tioⁿ²⁰⁰⁴^w^{ill eq}^u^a^{l 8}⁵^%^o^f^th^{e av}^er^ag^e^pri^{ce or 85%}^of^t^h^{e l}ⁱ^s^t^e^{d A}^W^{P as}^of^A^p^r.^{be pai}^d^uⁿ^d^{er a n}^e^w^,^s^e^par^a^t^e^1847B
^g^ben^e^fⁱ^t^,ⁱ^t^cov^e^rs^approxⁱ^m^at^el^y⁴⁵⁰^w^h^oles^{ale price (determ}ⁱⁿ^e^{d as}^of^A^p^{ril 1,}¹^,²^{003 as}^s^u^bs^equ^eⁿ^t^l^yⁱⁿ^creas^{ed by}^t^h^e^p^a^y^m^en^{t m}^e^th^o^d^.^S^u^b^j^e^c^t^to^th^e
^t^p^atⁱ^eⁿ^t^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^au^t^h^ori^zed^{2003). C}^e^rt^aiⁿ^cat^eg^orⁱ^e^{s of}^dru^g^s^an^d^C^P^{I f}^o^r^m^e^{dical care as}^of^J^uⁿ^e^{. T}^h^e^b^eⁿ^e^fⁱ^cⁱ^a^r^{y c}^o^s^t^-^s^h^a^rⁱⁿ^g^,^no^n-ge^ne^rⁱ^c^d^r^u^g^s
^s^t^atu^t^{e, in}^clu^dⁱⁿ^g^th^os^e:⁽¹^{) th}^{at are}^bⁱ^o^l^o^g^{icals (}^d^r^u^g^p^r^o^d^u^cts)^w^ill^coⁿ^tin^u^e^to^Secretary^w^o^u^l^d^{be requ}^{ired to determ}ⁱⁿ^e^w^o^u^l^{d be pai}^d^112%^o^f^t^h^{e appl}ⁱ^cabl^e

CRS-49
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^v^e^r^e^d^if^th^ey^ar^{e u}^s^u^a^llyⁿ^o^{t self}^-^b^e^pai^d^at^95%^of^t^h^{e A}^W^{P i}ⁿ^cl^u^dⁱⁿ^g^w^h^eth^e^{r th}^{e w}ⁱ^dely^av^{ailable m}^a^rk^{et price}^pri^{ce i}ⁿ²^{005 an}^{d 2006 an}^{d 100%}^of^t^h^e
ⁱⁿⁱ^s^t^e^r^{ed an}^{d are prov}^{ided in}^ciden^t^to^bl^{ood produ}^ct^s^an^{d cl}^o^t^tⁱⁿ^g^f^act^orsⁱ^s^dⁱ^ffe^r^e^nt^fr^o^m^t^h^e^A^W^P^a^m^o^unt^{s usi}ⁿ^g^p^r^{ice su}^b^s^eq^u^eⁿ^tly^{. T}^h^{e m}^u^ltip^{le so}^u^r^c^e
^h^y^s^ician^’^{s ser}^v^ices;⁽²⁾^th^o^s^{e th}^{at ar}^e^f^u^rnⁱ^s^h^e^{d du}^riⁿ^g²^004;^{a dru}^g^produ^ct^an^y^H^H^S^-^I^G^{or G}^A^O^reportⁱ^s^s^u^edⁱⁿ²⁰⁰⁰^dru^g^app^l^{icable price w}^o^u^l^{d be th}^e
^s^a^ry^f^o^{r th}^{e ef}^f^ectiv^{e u}^s^{e of}^c^o^vered^f^u^rnⁱ^s^h^e^{d du}^riⁿ^g^{2004 t}^h^at^w^a^sⁿ^o^t^an^d^l^a^t^e^{r as}^w^e^l^l^as^ot^h^e^{r dat}^a^f^r^om^{reported v}^o^lu^m^e^-w^eig^h^t^{ed av}^erag^{e of}^th^e
^{rable m}^e^{dical equ}ⁱ^pm^en^{t; (3) certain}^av^{ailable f}^o^{r P}^a^{rt B}^pay^m^en^{t as}^of^A^p^{ril 1,}^p^u^r^c^ha^se^r^,^sup^p^lⁱ^e^r^aⁿ^d^m^a^nufa^c^t^ur^e^r^s.^I^f^av^erag^{e s}^a^les^price;^th^{e applicable price f}^o^r
^lf^-^a^dmⁱⁿ^is^{tered oral can}^{cer an}^{d an}^ti-^2003;^pn^e^u^m^o^co^ccal,ⁱⁿ^f^l^u^eⁿ^z^a^,^aⁿ^d^dif^f^e^ren^t^{, th}^{e w}ⁱ^dely^av^{ailable m}^a^rk^et^price^{a s}ⁱⁿ^g^l^{e s}^o^u^r^{ce dru}^g^w^o^u^l^{d be th}^{e les}^s^{er of}
^u^s^{ea drugs}^(th^o^s^e^w^ithⁱⁿ^j^ectable^h^e^patitis^{B v}^acciⁿ^e^s^;^an^{d a dru}^g^or^w^o^u^l^{d be}^t^r^e^a^t^e^{d as}^t^h^{e A}^W^{P am}^ouⁿ^tⁱⁿ^th^e^m^a^nuf^a^c^ture^r’^{s a}^v^e^r^a^g^e^sa^le^{s p}^r^ic^e
ⁱ^v^a^l^eⁿ^t^s^;⁽⁴⁾^ery^t^h^r^opoi^etⁱⁿ^(u^s^e^{d t}^o^bi^ol^ogⁱ^cal^(ot^h^{er t}^h^an^ery^t^h^r^opoi^etⁱⁿ⁾^{2004 an}^{d s}^u^bs^equ^eⁿ^t^l^y^{. H}^o^w^e^v^e^{r, i}^f^t^h^at^(A^S^P⁾^f^o^{r t}^h^{e N}^D^C^code^{or t}^h^{e report}^e^d
^em^{ia); (5) im}^m^uⁿ^o^s^u^ppres^sⁱ^v^e^f^u^rⁿ^ish^e^dⁱⁿ^coⁿⁿ^ectioⁿ^w^ith^r^eⁿ^a^{l d}ⁱ^aly^s^is^di^f^f^e^ren^{ce i}^s^m^o^{re t}^h^an^15%^{, pay}^m^en^t^s^w^h^o^l^esa^l^{e a}^c^q^u^isitio^{n co}^{st (}^W^A^C⁾^.
^g^s^af^{ter cov}^e^{red Medicare org}^aⁿ^ser^v^{ices th}^{at ar}^{e sep}^a^r^a^tely^b^illed^b^y^r^eⁿ^a^l^w^o^u^l^{d be redu}^{ced i}ⁿ^15%ⁱⁿ^crem^ent^s^o^f^P^a^y^m^en^ts^w^o^u^l^{d n}^o^{t ac}^c^o^uⁿ^t^f^o^{r s}^p^ecial
^sp^lan^t^{s; (}⁶⁾^h^e^m^o^p^h^{ilia clo}^t^tⁱⁿ^g^f^acto^r^s;^dⁱ^aly^s^{is f}^{acilities. Dr}^u^g^p^r^o^d^u^{cts p}^a^id^at^Medicare’^s^{prior y}^{ear pay}^m^{ent. T}^h^is^p^ack^agⁱⁿ^g^,^lab^e^lin^g^o^r^id^en^tifⁱ^e^r^s^oⁿ^th^e
^{d (7)}^v^accin^e^s^f^o^{r in}^f^l^u^eⁿ^{za, pn}^eu^m^oⁿⁱ^a,^85%^of^A^W^{P i}ⁿ^{2004 m}^a^y^{be pai}^d^a^tr^an^sitioⁿ^w^o^u^l^dⁿ^o^{t ap}^p^l^y^to^th^o^s^{e w}^ith^dos^ag^{e f}^o^rm^{or product}^{or pack}^ag^{e. By}
^d^h^e^p^a^{titis B}^.^P^a^y^m^en^t^s^a^r^{e b}^a^sed^oⁿ^dif^f^e^ren^t^am^ouⁿ^t^if^th^{e w}ⁱ^d^e^l^y^av^ailable^ge^ne^rⁱ^c^ve^r^sⁱ^o^{ns i}ⁿ^t^h^e^m^a^r^k^e^t^b^e^giⁿⁿⁱ^ng^A^p^ri^l^1,²^{004, t}^h^e^ASP^w^o^u^l^{d be}
ⁱ^{ki/CRS-RL32005}^th^{e av}^erag^e^w^h^oles^ale^price^(A^W^P⁾^blⁱ^s^{hed i}ⁿⁱⁿ^du^s^t^ry^ref^e^ren^c^e^m^a^rk^{et price is}^dif^f^e^ren^t^th^an^th^{e pay}^m^en^t^am^ouⁿ^t^fo^r^th^e^y^ear.^Al^s^o^p^a^y^m^eⁿ^t^s^m^a^y²^{004. A}^f^t^e^{r Jan}^.^{1, 2004, pay}^m^en^t^s^f^o^r^cov^e^{red v}^accin^e^s^w^oul^d^{be equ}^a^{l to th}^e^calcu^{lated by}^NDC^each^ca^len^d^{ar qu}^arter^b^y^dⁱ^vi^dⁱ^{ng a}^m^a^nufa^c^t^ur^e^r^{’s t}^o^t^a^l^sa^l^e^{s b}^y
^g/w^blication^s^{. A}^W^P^doesⁿ^o^{t accou}ⁿ^t^f^o^r^b^e^ad^j^u^sted^b^ecau^{se o}^f^d^a^{ta su}^b^m^itted^b^y^AW^P^.^th^{e u}ⁿ^{its so}^ldⁱⁿ^th^{at q}^u^ar^ter^w^ith^c^e^r^tain
^s^.or^c^ouⁿ^t^s^rou^tⁱⁿ^el^y^of^f^e^r^e^{d t}^o^provⁱ^d^ers^th^{e m}^aⁿ^u^f^actu^r^er^o^r^b^y^an^o^t^h^e^r^en^tity^b^y^adj^u^s^t^m^eⁿ^t^s^{to accou}ⁿ^t^f^o^r^volu^m^e
^le^ak^{d ph}^y^sⁱ^cⁱ^a^ns.^C^u^rren^t^Medi^care^October^15,^{2003. In}ⁿ^o^cas^e^w^ill^pay^m^en^t^di^s^c^ouⁿ^t^s^a^{nd ot}^h^e^{r rebat}^e^s^.^C^e^rt^aiⁿ^s^a^l^e^s
^m^en^t^rat^e^s^{are 95}^%^of^A^W^{P f}^o^{r bran}^d^{be l}^e^s^s^t^h^an^80%^of^A^W^P.^w^o^u^l^{d be ex}^em^pt^f^r^om^th^{e calcu}^lation^.
^://wiki^m^e^dru^g^s^pr^odu^{ced by}^{a s}ⁱⁿ^g^l^e^Th^e^WA^C^w^o^ul^d^b^e^t^h^e^m^a^nufa^c^t^ur^e^r^{’s l}ⁱ^s^t
^h^ttpⁿ^u^f^actu^r^{er (or s}ⁱ^{ngle s}^o^u^r^{ce dru}^g^s^).^S^ecti^oⁿ^303(c)^Begⁱⁿⁿⁱ^ngⁱⁿ^{2005, dru}^g^{price to}^w^h^oles^alers^{or direct pu}^rch^a^s^e^rs
ⁱ^car^e^w^ill^p^a^y⁹⁵^%^o^f^th^{e lo}^w^e^r^o^f⁽^a⁾^produ^cts^,^ex^{cept f}^o^r^pⁿ^e^u^m^o^coccal,^{for th}^{e m}^o^s^t^recen^{t av}^{ailable m}^oⁿ^t^h^,^no^t
^e^di^an^A^W^{P of}^al^l^g^eⁿ^e^ri^c^dru^g^s^{or (b)}ⁱⁿ^f^l^u^eⁿ^{za, a}ⁿ^d^h^e^p^a^{titis B}^v^accin^e^{s, th}^o^s^eⁱⁿ^cl^u^dⁱⁿ^g^di^s^c^ouⁿ^t^s^{or ot}^h^e^{r pri}^c^e
^o^w^e^s^t^bran^d-ⁿ^a^m^e^produ^ct^A^W^{P f}^o^r^as^s^o^{ciated w}^ith^certain^ren^a^{l dialy}^s^is^r^e^du^ctⁱ^oⁿ^s^{, as}^report^e^{d i}ⁿ^w^h^ol^es^al^{e pri}^c^e
^g^s^wⁱ^t^h^t^w^{o or}^m^o^{re com}^p^etⁱⁿ^g^bran^d^s^e^rv^ices^{, blood produ}^cts^an^{d clottin}^g^g^uⁱ^des^{or ot}^h^e^{r pri}^cⁱⁿ^g^pu^b^lⁱ^catⁱ^oⁿ^s^.
^m^e^{s (}^o^r^m^u^ltip^{le so}^u^r^c^e^d^r^u^g^s⁾^o^r^th^o^s^e^fa^cto^r^{s an}^d^radⁱ^o^p^h^arm^aceu^{ticals, w}^{ill b}^e^Pay^m^eⁿ^t^rat^e^s^w^o^u^l^{d be u}^pdat^e^{d on}^a
^{ugs w}ⁱ^t^h^a^v^aⁱ^l^a^b^l^e^ge^ne^rⁱ^c^e^q^ui^va^l^e^nt^s.^{paid u}^sⁱⁿ^g^eith^er^t^h^e^av^erag^{e s}^a^les^price^qu^arterly^basⁱ^s^.^C^e^rtain^con^t^ractors^w^o^u^l^d
^t^h^o^{ugh M}^e^dⁱ^c^a^r^e^use^s^t^h^e^H^e^a^l^t^h^c^a^r^e^m^e^t^h^odol^og^y^or^t^h^ro^{ugh the}^c^o^m^p^e^titive^determⁱⁿ^{e th}^{e pay}^m^en^t^am^ouⁿ^t^s^.^C^e^rtain
^m^m^oⁿ^Procedu^r^{e C}^odin^g^Sy^s^t^e^m^acq^uⁱ^sitioⁿ^p^r^o^g^r^a^m^.^Medⁱ^car^e’^{s p}^a^y^m^en^t^stan^d^a^r^d^{s w}^o^u^l^d^d^e^fⁱⁿ^e^m^u^ltip^{le an}^d^sin^g^l^e
^C^P^C^S^{) codes}^t^o^pay^f^o^{r ph}^y^sⁱ^cⁱ^aⁿ^uⁿ^d^{er the av}^erag^{e s}^a^les^{price (A}^SP⁾^s^o^u^r^ce^dru^g^s^an^{d es}^tablis^h^ph^arm^aceu^tical
ⁱⁿⁱ^s^t^ered^dru^g^s^{, t}^h^e^AW^P^s^a^r^e^m^e^th^odolog^y^w^{ill equ}^a^{l 106%}^o^f^th^e^e^q^ui^va^l^e^nc^e^.^T^h^ere^w^o^ul^d^b^e^no
^lish^e^d^f^o^rⁿ^a^tioⁿ^a^{l d}^r^u^g^co^d^e^{s (}^NDC)^ap^p^licab^{le p}^r^{ice f}^o^r^a^m^u^ltip^le^so^u^r^{ce d}^r^u^g^admⁱⁿⁱ^s^t^rativ^{e or j}^u^{dicial rev}ⁱ^ew^of^th^e
^ich^prov^ides^{data on}^ch^em^{ical m}^o^lecu^le,^{or s}ⁱⁿ^g^l^e^s^o^u^r^{ce dru}^g^s^u^bj^{ect to ben}^e^fⁱ^ciary^AS^P^.

^g^m^aⁿ^u^f^actu^r^{er, dos}^ag^{e, dos}^ag^{e f}^o^rm^dedu^ctible^an^d^coin^s^u^ran^{ce am}^ouⁿ^t^s^.^T^h^e
^{d pack}^ag^{e s}ⁱ^ze.^ap^p^licab^{le p}^r^{ice f}^o^r^m^u^ltip^{le so}^u^r^{ce d}^r^u^g^s
^is^th^{e v}^o^lu^m^e^-^w^eig^h^t^{ed av}^erag^{e of}^th^e
^av^erag^{e s}^a^{le price}^calcu^lated^by^NDC^code

CRS-50
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^f^o^{r each}^calen^{dar qu}^{arter. T}^h^{e a}^pplicable
^price^f^o^r^sⁱⁿ^g^l^{e s}^o^u^r^{ce dru}^g^s^is^th^e^les^s^e^r^of
^the^av^erag^{e s}^a^les^{price or th}^{e w}^h^oles^ale
^acq^uⁱ^sitioⁿ^co^st.^Cer^t^ain^{sales su}^ch^as
^t^h^os^{e t}^o^t^h^e^Medi^cai^{d dru}^g^rebat^e^prog^ram
^{are e}^x^e^m^{pt f}^r^om^th^{e calcu}^lation^,^bu^{t th}^e
^A^S^P^w^{ill tak}^eⁱⁿ^to^acco^uⁿ^t^certain
^di^s^c^ouⁿ^t^s⁽ⁿ^otⁱⁿ^cl^u^dⁱⁿ^g^M^e^dⁱ^cai^{d rebat}^e^s⁾^.
^A^f^t^e^{r 2004, t}^h^{e S}^ecret^ary^m^a^yⁱⁿ^cl^u^d^e
^oth^e^{r price con}^ces^sⁱ^on^s^r^ecom^m^eⁿ^d^{ed by}
^th^{e HHS-}^I^G^w^h^o^w^{ill co}ⁿ^d^u^c^{t m}^a^r^k^et
^s^u^rv^ey^s^.^If^th^{e A}^S^P^ex^ceeds^th^{e m}^a^r^k^et
^{price or av}^erag^{e m}^aⁿ^u^f^actu^r^e^r^p^r^{ice by}^a
ⁱ^{ki/CRS-RL32005}^t^h^res^h^ol^{d percen}^t^a^g^e^{, t}^h^e^A^S^{P m}^a^y^be^di^s^r^eg^{arded. In}^{2005 t}^h^{e t}^h^res^h^ol^{d i}^s^5%^;
^g/wⁱⁿ²^{006 an}^{d s}^u^bs^equ^eⁿ^t^y^ears^,^t^h^e
^s^.or^p^e^r^cen^tag^e^th^r^e^s^h^o^l^d^w^{ill b}^e^sp^ecifⁱ^ed^b^y
^le^ak^th^{e Secretary}^.^T^h^e^p^a^y^m^en^{t am}^ouⁿ^t^w^ill
^t^h^en^b^e^eq^u^a^{l to}^th^{e lesser}^o^f^th^{e w}ⁱ^d^e^ly
^://wiki^av^ai^l^a^bl^{e m}^a^rk^et^pri^{ce or 103%}^o^f^t^h^e
^h^ttp^av^erag^{e m}^aⁿ^u^f^act^{urer price. For dru}^g^s
^furⁿⁱ^s^h^e^{d i}ⁿ^{a y}^{ear af}^t^e^{r 2004, t}^h^{e w}ⁱ^del^y
^av^{ailable m}^a^r^k^{et price is}^th^{e price th}^{at a}
^pru^d^en^t^ph^y^sⁱ^cⁱ^aⁿ^{or s}^u^pplⁱ^e^{r w}^o^u^l^{d p}^a^y
^f^o^{r a dru}^g^prod^uc^t^,^takⁱⁿ^gⁱⁿ^{to accou}ⁿ^t
^cer^tain^r^o^u^tin^ely^av^ailab^l^{e d}ⁱ^sco^uⁿ^t^{s. T}^h^e
^w^h^o^l^e^s^a^l^{e acq}^uⁱ^sitioⁿ^co^{st o}^r^o^t^h^e^r
^reas^on^{able m}^eas^u^r^{e m}^a^y^be^u^s^edⁱⁿ^s^t^{ead of}
^th^{e m}^aⁿ^u^f^actu^r^er’^s^a^v^erag^{e s}^a^{le price in}
^th^{e cas}^{e of}^certain^p^{ublic em}^erg^eⁿ^c^ies^.
^T^h^er^e^w^ill^b^eⁿ^o^ad^mⁱⁿⁱ^str^a^tiv^{e o}^r^j^u^dⁱ^cial
^revⁱ^ew^of^det^e^rmⁱⁿ^atⁱ^o^{ns of}^pay^m^en^t
^am^o^uⁿ^t^{s; t}^h^{e id}^en^tif^icatioⁿ^o^f^uⁿ^{its an}^d
^p^a^c^k^ag^{e s}ⁱ^{ze; or th}^{e m}^e^th^{od u}^s^{ed to}
^{allocate price con}^ces^sⁱ^on^s^t^o^{a s}^p^ecifⁱ^c
^qu^art^e^{r am}^on^g^ot^h^e^{r i}^t^e^m^s^.

CRS-51
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^y^f^o^{r new}^o^u^t^p^a^t^ient^drug^{s pro}^vⁱ^ded^S^ecti^oⁿ^303(c).^D^r^u^g^produ^ct^s^du^riⁿ^g^an^S^e^c^tⁱ^oⁿ⁴³²⁽^a⁾^co^ntinued^{. New}^drug^s^S^ecti^oⁿ^303(b⁾^c^oⁿ^tinued^{. New}^drug^s.
^t^{to a phys}ⁱ^cian’s^s^ervices^{. See}ⁱⁿ^itial^p^e^rio^d⁽ⁿ^o^t^to^ex^ceed^{a f}^u^{ll calen}^d^a^r^(av^aⁱ^l^a^b^l^{e af}^t^e^{r A}^p^ri^l^{1, 2003) w}^o^u^l^{d be}^T^h^{e Secretary}^w^o^u^l^{d be able}^{to dis}^r^eg^ard
^e.^q^u^ar^ter⁾^w^h^en^d^a^{ta o}ⁿ^th^{e p}^r^ices^f^o^r^sales^is^paid^bas^e^{d on}^th^{e m}^aⁿ^u^f^actu^r^er’^s^es^tim^ated^the^a^v^erag^{e s}^a^les^{price du}^rin^g^th^{e f}ⁱ^rs^t
ⁿ^o^{t s}^u^f^fⁱ^cien^tly^a^v^{ailable to com}^p^u^t^{e A}^S^P^p^r^{ice d}^a^{ta. Du}^rⁱⁿ^g^th^{e f}ⁱ^r^s^{t an}^d^se^c^oⁿ^d^q^u^ar^ter^o^f^{a n}^e^w^d^r^u^g^’^{s sales if}^th^{e p}^r^ice
^w^{ill b}^e^p^a^id^b^a^sed^oⁿ^th^e^w^h^o^l^esale^y^ears^,^th^{e m}^aⁿ^u^f^actu^r^{er w}^o^u^l^{d prov}^{ide data}^d^a^taⁱ^sⁿ^o^{t su}^f^fⁱ^cien^{t to}^d^e^ter^mⁱⁿ^{e an}
^acq^uⁱ^sitioⁿ^co^{st o}^r^oⁿ^th^{e p}^a^y^m^en^t^m^e^th^o^d^s^on^th^{e act}^ua^l^m^a^rk^{et prices}^{paid by}^av^erag^{e am}^ouⁿ^t^pay^a^ble.
ⁱⁿ^ef^f^ect^as^of^N^o^v^e^m^b^{er 1, 2003.}^ph^y^sⁱ^cⁱ^aⁿ^s^{or s}^u^pplⁱ^e^rs^w^hⁱ^c^h^w^o^u^l^{d be}
^eq^u^a^{l to}^th^{e lesser}^o^f^th^{e AW}^P^o^r^th^e
^origⁱⁿ^{al es}^tim^ate.^Su^bs^equ^eⁿ^tly^{, pay}^m^en^ts
^w^o^u^l^d^b^e^eq^u^a^l^to^th^{e lesser}^o^f^th^{e A}^W^P^o^r
^th^{e w}ⁱ^d^e^l^y^a^v^aⁱ^l^a^{ble m}^a^rk^{et price}
^e^s^t^a^b^lⁱ^s^he^d^fo^r^e^xⁱ^s^tⁱ^{ng d}^r^ugs.^I^f^no
^m^a^rk^{et price ex}^is^ts^{, th}^{e prior y}^ear’^s
ⁱ^{ki/CRS-RL32005}^pay^m^en^{t is}ⁱⁿ^creas^{ed by}^J^uⁿ^e^’^s^C^P^{I f}^o^r^m^e^{dical care. Oth}^e^{r pay}^m^en^{t ch}^an^g^e^s^fo^r
^g/w^t^h^e^a^d^mⁱⁿⁱ^st^r^a^tⁱ^o^{n o}^f^d^r^{ugs w}^o^ul^d^b^e
^s^.or^coⁿ^tin^g^eⁿ^t^oⁿ^th^{e im}^p^l^em^en^tatioⁿ^o^f^th^ese
^le^ak^provⁱ^sⁱ^oⁿ^s^.
^://wiki^a^{blish co}^m^p^et^it^iv^{e pricing}^pro^g^r^a^m^S^ecti^oⁿ^303(d⁾^.^Un^d^e^r^th^{e n}^e^w^Sectioⁿ^{See abov}^e.^Se^c^tⁱ^o^{n 303(b}⁾^.^Uⁿ^d^e^rⁿ^e^w^s^e^c^tioⁿ
^h^ttp^aⁿ^est^a^{blish a}^l^t^erna^t^iv^{e pricing}^{1847B, t}^h^{e S}^ecret^a^r^yⁱ^s^requⁱ^r^{ed t}^o^1847A^{, t}^h^{e S}^ecret^ary^w^o^u^l^{d es}^t^a^blⁱ^s^h^a
^e^{thod for phys}ⁱ^cians^w^h^o^{elect not to}^estab^l^ish^{a co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^co^m^p^etitiv^e^acq^uⁱ^sitioⁿ^p^r^o^g^r^a^m^to^acq^uⁱ^r^e
^r^tⁱ^cⁱ^p^{ate in com}^p^{etitive bidding}^p^r^o^g^r^a^m^t^o^a^c^q^ui^r^e^a^nd^pay^fo^r^an^{d pay}^fo^{r cov}^e^{red ou}^t^p^atⁱ^eⁿ^t^dru^g^s^.
^ogram^{. See abov}^e^co^m^p^etitiv^ely^bⁱ^d^d^a^b^l^e^d^r^u^g^p^r^o^d^u^{cts. T}^h^e^Uⁿ^der^t^hⁱ^s^prog^ram^,^a^t^l^e^a^s^t^t^w^o
^Secretary^is^requ^{ired to c}^o^m^p^u^t^{e an}^area^con^t^ractors^w^o^u^l^{d be es}^tablis^h^e^{d in}^each
^av^er^ag^{e o}^f^th^{e b}ⁱ^d^p^r^{ices su}^b^m^itted^,ⁱⁿ^co^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^ar^{ea (}^w^hⁱ^ch^w^o^u^l^d
^cont^r^a^{ct of}^f^e^rs^{accepted f}^o^{r th}^{e categ}^ory^{be def}ⁱⁿ^e^{d as}^an^appropri^a^t^e^g^e^og^raphⁱ^c
^a^{nd th}^{e area, f}^o^{r each}^y^{ear or oth}^e^r^r^e^gi^oⁿ⁾^t^h^r^o^ugho^ut^t^h^e^Uⁿⁱ^t^e^d^St^a^t^e^s^.^E^a^c^h
^con^t^ract^peri^{od. Medi}^ca^r^e^’^s^prog^ram^y^{ear, a ph}^y^s^ician^w^o^u^l^d^{be able to s}^e^{lect a}
^p^a^y^m^en^t^f^o^r^th^{ese d}^r^u^g^s^w^{ill eq}^u^a^{l 8}⁰^%^o^f^con^t^{ractor w}^h^{o w}^o^u^l^{d deliv}^{er cov}^e^red
^th^{e av}^erag^{e bid price af}^{ter th}^{e M}^e^dicare^dru^g^s^an^{d bi}^ol^o^gⁱ^cal^s^t^o^t^h^{e ph}^y^sⁱ^cⁱ^aⁿ^;^as
^ben^e^fⁱ^ciary^m^eet^s^t^h^e^a^p^p^lⁱ^c^a^b^le^di^s^c^u^s^s^e^{d abov}^{e, a ph}^y^sⁱ^cⁱ^aⁿ^w^o^u^l^{d be}^abl^e
^d^e^d^u^ctib^{le. Ge}ⁿ^e^r^a^lly^{, co}ⁱⁿ^su^r^aⁿ^{ce an}^d^{to elect pay}^m^eⁿ^{t u}ⁿ^d^{er th}^{e A}^S^P^pay^m^en^t
^d^e^d^u^ctib^{le am}^o^uⁿ^t^{s w}^{ill b}^e^co^llected^b^y^th^e^m^e^t^h^odol^og^y^es^t^a^blⁱ^s^h^e^d^by^{1847B. Bl}^ood
^con^t^ract^{or t}^h^at^s^u^pplⁱ^e^s^t^h^{e dru}^g^produc^t^.^cl^ot^tⁱ^{ng f}^act^ors^,^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s
^T^h^ere^s^h^all^{be n}^o^admⁱⁿⁱ^s^t^rativ^{e or j}^u^dicial^f^u^rn^is^h^e^{d as}^treatm^eⁿ^t^f^o^r^en^d-^s^t^ag^{e ren}^a^l
^r^e^vⁱ^ew^w^ith^r^e^sp^{ect to}^th^{e estab}^lish^m^en^t^o^f^dis^eas^{e (ESR}^D⁾^,^r^a^dⁱ^o^p^h^a^r^m^a^c^e^u^ticals^,^an^d

CRS-52
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^pay^m^eⁿ^t^a^m^o^uⁿ^t^s^,^con^t^{ract aw}^ards^,^v^accin^e^s^w^o^u^l^{d n}^o^t^{be con}^s^{idered cov}^e^red
^estab^lish^m^en^{t o}^f^co^m^p^etitiv^e^acq^uⁱ^sitioⁿ^d^r^u^g^s^uⁿ^d^er^th^{e co}^m^p^etⁱ^tⁱ^v^e^acq^uⁱ^sitioⁿ
^ar^eas^{, th}^{e ph}^as^ed-ⁱⁿ^im^plem^en^tation^,^th^e^prog^ram^.
^selectioⁿ^o^f^categ^o^r^{ies o}^f^co^m^p^etitiv^ely
^bi^ddabl^{e dru}^g^s^an^d^bⁱ^o^l^o^gⁱ^c^a^l^s^f^o^r
^co^m^p^etitiv^{e a}^c^q^uⁱ^sitioⁿ^,^o^r^th^{e b}ⁱ^d^dⁱⁿ^g
^s^t^ru^ctu^r^e^{or n}^u^m^{ber of}^con^t^ractors^w^h^o^are
^s^e^l^ect^{ed. N}^o^l^a^t^e^{r t}^h^aⁿ^Ju^l^y^{1, 2008, t}^h^e
^Secretary^is^requ^{ired to report to C}^oⁿ^g^r^es^s
^oⁿ^sa^vi^ngs,^r^e^d^u^c^tⁱ^o^{ns i}ⁿ^c^o^st^-sha^rⁱ^ng,
^access^to^co^m^p^etitiv^ely^bⁱ^d^d^a^b^l^{e d}^r^u^g^s^an^d
^bi^ol^ogⁱ^cal^s^,^t^h^e^ran^g^e^of^ch^oi^ces^of
^con^t^ractors^av^{ailable to prov}^iders^as^w^e^ll
ⁱ^{ki/CRS-RL32005}^a^s^ben^e^fⁱ^ciary^an^{d prov}^{ider s}^a^tis^f^action^uⁿ^d^er^th^{e co}^m^p^etitiv^e^acq^uⁱ^sitioⁿ^p^r^o^g^r^a^m^.
^g/w
^s^.or^a^bl^{ish co}^nt^ra^ctⁱⁿ^{g requirem}^ents^for^S^ecti^oⁿ^303(d⁾^C^e^rtain^con^t^ractor^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^303(b⁾^.^T^h^{e 1847A}^prog^ram
^le^ak^p^eti^tⁱ^v^{e acq}^uⁱ^sⁱ^ti^on^p^r^ogra^m^.^No^s^e^lection^an^{d con}^t^ractin^g^requ^irem^en^ts^f^o^r^w^o^ul^d^ha^ve^t^w^o^d^r^{ug c}^a^t^e^g^o^rⁱ^e^s:^t^h^e
^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^th^{e co}^m^p^etitiv^{e ac}^q^u^isitioⁿ^p^r^o^g^r^a^m^ar^e^oⁿ^c^o^l^o^gy^d^r^{ugs w}^hⁱ^c^{h w}^o^ul^d^b^e
^://wiki^es^tablis^h^e^{d. Specif}ⁱ^cally^{, th}^{e Secretary}^isⁱ^m^pl^em^en^t^e^{d by}^{2005 an}^{d t}^h^{e n}^oⁿ^-
^h^ttp^r^e^q^uⁱ^r^e^d^t^o^e^s^t^a^b^lⁱ^s^{h a}ⁿ^a^nnua^l^se^l^e^c^tⁱ^oⁿ^on^col^o^g^y^dru^g^s^w^hⁱ^c^{h w}^o^u^l^{d be}
^proces^s^f^o^{r a con}^t^ract^o^rⁱⁿ^each^{area f}^o^rⁱ^m^pl^em^en^t^e^{d by}^2006.^C^e^rt^aiⁿ^con^t^ract^or
^each^c^a^t^e^g^ory^of^dru^g^s^an^{d biolog}^icals^.^s^e^lection^an^{d con}^t^ractin^g^requ^irem^en^ts^f^o^r
^T^h^e^S^ecretary^m^a^yⁿ^o^{t aw}^{ard th}^{e 3-}^y^ear^t^h^{e prog}^ram^w^o^ul^d^b^e^es^t^a^blⁱ^s^h^e^d.
^c^oⁿ^t^r^a^c^t^t^o^aⁿ^y^eⁿ^tity^th^a^t^d^o^e^sⁿ^o^t^h^a^v^e^Specifⁱ^cally^,^th^{e Secretary}^w^o^u^l^{d es}^tablis^h
^t^h^{e capaci}^t^y^t^o^s^u^ppl^y^t^h^e^dru^g^produ^ct^s^or^aⁿ^a^nnua^l^se^l^e^c^tⁱ^oⁿ^p^r^o^c^e^{ss fo}^r^a^c^o^nt^r^a^c^t^o^r
^d^o^e^{s n}^o^{t m}^{eet estab}^lish^e^d^q^u^ality^,^ser^v^ice,ⁱⁿ^each^{area f}^o^{r each}^of^th^e^tw^o^categ^ories
^fⁱⁿ^aⁿ^cⁱ^a^l^perf^orm^aⁿ^{ce an}^{d s}^o^l^v^eⁿ^c^y^of^dru^g^s^{. T}^h^e^Secretary^m^a^yⁿ^o^{t aw}^{ard th}^e
^s^t^an^dards^.^T^h^{e n}^u^m^{ber of}^q^u^alⁱ^fⁱ^e^d²^-^y^ear^coⁿ^t^r^{act to}^an^y^en^tity^th^{at d}^o^e^{s n}^o^t
^en^{tities selected}ⁱⁿ^e^ach^categ^o^r^y^an^d^ar^ea^m^{eet cap}^acity^{, q}^u^ality^{, ser}^v^{ice, f}ⁱⁿ^aⁿ^c^ial
^m^a^y^b^e^lim^ited^b^u^{t w}^{ill n}^o^{t b}^e^l^e^{ss th}^an²^.^perf^orm^aⁿ^{ce, s}^o^lv^en^cy^s^t^an^dards^,^con^d^u^c^t
^A^l^l^dru^g^s^an^d^bⁱ^ol^ogⁱ^cal^produ^ct^s^staⁿ^d^a^r^d^{s o}^r^dⁱ^sc^lo^sur^e^r^e^q^u^ir^e^m^eⁿ^ts.^T^h^e
^dⁱ^s^t^ri^bu^t^e^{d by}^{a con}^t^ract^{or m}^u^s^t^b^eⁿ^u^m^b^e^r^o^f^q^u^alif^ied^en^{tities selected}ⁱⁿ
^acquⁱ^red^directly^f^r^om^th^{e m}^aⁿ^u^f^actu^r^{er or}^each^categ^ory^an^{d area}^m^a^y^{be lim}^{ited bu}^t
^f^r^om^{a di}^s^t^ri^bu^t^o^{r t}^h^at^h^a^s^acquⁱ^{red t}^h^e^w^{ill n}^o^{t b}^e^l^e^s^s^t^h^an²^.^A^s^p^a^r^t^o^f^th^e
^produ^ct^s^di^rect^l^y^f^r^om^t^h^e^m^aⁿ^u^f^act^u^r^er.^a^w^{arded con}^t^{ract, th}^{e s}^e^{lected con}^t^racto^r
^T^h^{e am}^o^uⁿ^t^o^f^th^{e b}ⁱ^d^p^rⁱ^c^{e w}^{ill b}^e^w^o^u^l^d^b^e^r^e^q^u^ir^ed^to^dⁱ^sclo^{se th}^e

CRS-53
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^r^e^q^u^ir^e^d^to^b^e^th^{e sam}^e^f^o^r^{all p}^o^r^tioⁿ^s^o^f^r^easoⁿ^ab^{le, n}^e^{t acq}^uⁱ^sitioⁿ^co^{sts r}^e^g^u^l^a^r^ly
^th^{e area. T}^h^{e appropriate con}^t^ra^c^t^{or, as}^(bu^tⁿ^o^{t m}^o^re^of^ten^th^an^on^{ce a qu}^{arter) as}
^selected^b^y^th^{e p}^h^y^s^ician^,^w^{ill su}^p^p^l^y^d^r^u^g^s^p^ecifⁱ^{ed by}^th^{e Secretary}^.^C^oⁿ^t^{ract of}^f^e^rs
^p^r^o^d^u^{cts d}ⁱ^r^ectly^to^th^{e p}^h^y^s^ician^,^ex^cep^t^cou^l^{d be rej}^{ected if}^th^{e ag}^g^r^eg^{ate av}^era^g^e
ⁱⁿ^situ^atioⁿ^s^w^h^en^{a b}^eⁿ^e^fⁱ^cⁱ^ar^y^is^{bid price ex}^ceeds^th^{e A}^S^P^uⁿ^d^{er e}^1847B
^pres^en^tly^{able to receiv}^e^a^dru^g^{at h}^o^m^e^or^proces^s^.^T^h^{e bi}^{d pri}^{ce w}^o^u^l^{d be requ}ⁱ^r^ed
^ot^h^e^r^a^ppropri^a^t^eⁿ^oⁿ^-^ph^y^sⁱ^cⁱ^aⁿ^of^fⁱ^ce^to^b^e^th^{e sam}^e^f^o^r^{all p}^o^r^ti^oⁿ^s^o^f^th^{e ar}^ea.
^settin^g^s^{. Ru}^{les w}^ill^b^e^estab^lish^e^d^r^e^latin^g^T^h^{e appropriate con}^t^{ractor, as}^s^e^lected^by
^to^r^e^su^p^p^l^y^o^fⁱⁿ^v^eⁿ^t^o^r^{ies, co}ⁿ^s^isten^t^w^ith^t^h^{e ph}^y^sⁱ^cⁱ^aⁿ^,^w^o^u^l^{d s}^u^ppl^y^cov^e^red^dru^g^s
^s^a^f^e^dru^g^pr^a^c^tices^an^{d w}^ith^adequ^a^te^dⁱ^r^ectly^to^th^{e p}^h^y^s^ician^,^ex^c^e^p^t^uⁿ^d^er^th^e
^s^a^f^e^g^u^a^rds^ag^ain^s^t^f^r^au^{d an}^{d abu}^s^{e. No}^circu^m^s^t^an^ces^w^h^en^{a be}^ne^fⁱ^ciary^is
^{applicable State requ}^irem^en^ts^relatⁱⁿ^g^to^pres^en^tly^{able to receiv}^e^{a dru}^g^{at h}^o^m^e^or
^th^{e licen}^sⁱⁿ^g^of^ph^arm^acies^{are w}^a^iv^ed.^{at oth}^e^r^s^p^ecifⁱ^{ed n}^oⁿ^-^ph^y^s^ician^of^fⁱ^ce
ⁱ^{ki/CRS-RL32005}^se^t^tⁱ^ngs.^A^d^e^q^ua^t^e^s^a^fe^gua^r^d^{s a}^g^aⁱ^nst^fr^a^u^d^an^{d abu}^s^{e an}^{d con}^s^is^ten^t^w^ith^s^a^f^e^dru^g
^g/w^p^r^{actices, in}^o^r^d^e^r^f^o^r^{a p}^h^y^s^ician^to
^s^.or^m^aⁱⁿ^t^aⁱⁿ^{a s}^u^ppl^y^of^dru^g^s^t^h^at^m^a^y^be
^le^ak^ne^e^d^e^dⁱⁿ^e^m^e^r^ge^nc^{y si}^t^u^a^tⁱ^o^ns,^w^o^ul^d^b^e
^estab^lish^e^d^.
^://wiki
^h^ttp^e^p^a^ratel^y^{for th}^{e ad}^mⁱⁿⁱ^s^t^rati^on^of^S^ecti^oⁿ^303(e)(1).^T^h^{e Secretary}^is^S^ecti^oⁿ^432(b^)(4).^T^h^{e Secretary}^w^o^u^l^d^S^ecti^oⁿ^303(f).^MedPA^C^w^o^u^l^{d be}
^ood^cl^ottiⁿ^g^factors^.^Medⁱ^car^{e w}^{ill p}^a^y^r^e^q^u^ir^e^d^to^r^e^vⁱ^ew^{a GA}^{O r}^e^p^o^r^{t an}^d^{be requ}ⁱ^r^{ed t}^o^revⁱ^e^w^{a G}^A^O^report^an^d^requⁱ^r^{ed t}^o^s^u^bmⁱ^t^t^o^C^ongres^s^s^p^eci^fⁱ^c
^{r blood c}^l^o^t^tin^g^f^actors^f^o^{r h}^e^m^oph^ilia^provⁱ^d^e^{a s}^e^parat^e^pay^m^en^t^f^o^{r t}^h^e^provⁱ^d^{e a}^se^parat^e^pay^m^en^t^f^o^{r t}^h^e^recom^m^eⁿ^d^ation^s^w^ith^res^p^{ect to pay}^m^en^t
^t^s^w^h^{o are com}^p^eten^{t to u}^s^{e s}^u^ch^admⁱⁿⁱ^s^t^ration^of^th^es^{e f}^actors^.^T^h^{e total}^a^d^mⁱⁿⁱ^s^t^ration^of^th^es^{e f}^actors^.^T^h^es^e^f^o^r^bl^{ood cl}^ot^tⁱⁿ^g^f^a^c^t^o^r^s^aⁿ^dⁱ^t^s
^{to con}^t^{rol bleedin}^g^w^ith^ou^{t m}^e^dical^am^ouⁿ^t^of^p^a^y^m^en^ts^f^o^{r blood clottin}^g^pay^m^en^tsⁱⁿ^C^Y^{2004 w}^o^u^l^{d n}^o^{t ex}^ceed^th^e^admⁱⁿⁱ^s^t^ratⁱ^oⁿⁱⁿⁱ^t^s^{2004 a}^nnua^l^r^e^p^o^r^t^.
^p^e^r^v^isioⁿ^{as w}^e^{ll as th}^{e item}^s^r^e^lated^to^fa^c^t^ors^f^u^rnⁱ^s^h^e^{d i}ⁿ^C^Y^{2005 can}ⁿ^o^t^a^m^o^unt^t^h^a^t^w^o^u^l^d^ha^ve^o^t^he^r^wⁱ^s^e^b^e^eⁿ
ⁱⁿⁱ^s^t^ration^of^s^u^ch^f^actors^.^ex^{ceed th}^{e am}^ouⁿ^t^th^{at w}^o^u^l^{d h}^a^v^e^ex^pen^d^{ed. In}^C^Y^{2005 an}^{d s}^u^bs^equ^eⁿ^t^l^y^,
^ot^h^e^rwⁱ^s^{e been}^ex^pen^d^{ed. In}^C^Y²⁰⁰⁶^an^d^t^h^{e s}^e^parat^e^pay^m^en^t^am^oun^t^w^o^u^l^{d be}
^s^u^b^s^eq^u^eⁿ^tly^{, th}^{is sep}^a^r^a^t^e^p^a^y^m^eⁿ^t^u^pdat^e^{d by}^Juⁿ^e^’^s^C^P^{I f}^o^{r m}^e^di^cal^care.
^am^ouⁿ^t^w^o^u^l^d^{be u}^pdat^e^{d by}^t^h^{e ch}^an^g^eⁱⁿ
^th^{e C}^P^{I f}^o^r^m^e^dⁱ^{cal care f}^o^{r th}^{e prev}^iou^s
^y^e^a^r^eⁿ^dⁱ^{ng i}ⁿ^J^une^.
^{e p}^h^y^sⁱ^ci^an^{a p}^h^a^r^m^acy^S^ecti^oⁿ^303(e)(2)^{. T}^h^{e Secretary}^is^S^ecti^oⁿ^432(b⁾⁽⁸⁾^.^Medi^{care w}^o^u^l^{d pay}^a^N^o^provⁱ^sⁱ^oⁿ^.

^p^ensⁱ^{ng fee.}^{Medicare pay}^s^f^o^{r certain}^requ^{ired to pay}^{a dis}^p^ensⁱ^ng^f^{ee (les}^s^th^e^dⁱ^s^p^en^sⁱⁿ^g^f^{ee (les}^s^{applicable cos}^t^-^s^h^a^rin^g
^tpatien^t^pres^crⁱ^p^tⁱ^oⁿ^d^r^u^g^s^an^d^ap^p^licab^{le d}^e^d^u^ctib^{le an}^d^coⁱⁿ^su^r^aⁿ^c^e^am^ouⁿ^t^s⁾^{to licen}^s^e^{d approv}^{ed ph}^arm^acies
^icals^.^{For in}^s^t^an^{ce, Medicare pay}^s^a^am^ouⁿ^t^s⁾^{to licen}^s^e^{d approv}^{ed ph}^arm^acies^f^o^{r cov}^e^{red i}^m^m^uⁿ^o^s^u^ppres^sⁱ^v^e^dru^g^s^{, oral}

CRS-54
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^eⁿ^si^{ng f}^e^eⁱⁿ^c^o^nj^unc^tⁱ^oⁿ^wⁱ^t^h^fo^r^c^o^ve^r^e^dⁱ^m^m^uno^suppressi^ve^d^r^ugs,^o^r^a^l^an^ti-^can^{cer dru}^g^s^{, an}^{d oral an}^{ti- n}^a^u^s^ea
^h^a^latioⁿ^th^er^ap^y^d^r^u^g^s^u^s^e^dⁱⁿ^an^ti-^can^{cer dru}^g^s^{, an}^{d or}^{al an}^ti-ⁿ^a^u^s^ea^dru^g^s^u^s^{ed as}^{part of}^an^an^ti-^c^aⁿ^cer
^bu^lⁱ^z^e^rs^{. Medi}^{care does}ⁿ^o^t^pay^a^dru^g^s^u^s^{ed as}^{part of}^an^an^ti-c^aⁿ^cer^ch^em^ot^herapeu^tⁱ^c^regⁱ^m^eⁿ^.^Medi^care
^p^en^sⁱⁿ^g^f^{ee to ph}^arm^acis^t^s^{or prov}^iders^c^h^e^m^o^t^he^r^a^p^e^utⁱ^c^r^e^gi^m^e^n.^w^o^u^l^d^be^able^{to pay}^{a dis}^p^en^sⁱⁿ^g^f^ee^(les^s
^{o s}^u^ppl^y^oral^dru^g^s^.^th^{e applicabl}^e^dedu^{ctible an}^{d coin}^s^u^ran^c^e
^am^ouⁿ^t^s⁾^{to licen}^s^e^{d approv}^{ed ph}^arm^acies
^f^o^{r ot}^h^e^{r dru}^g^s^an^{d bi}^ol^ogⁱ^cal^s^.
^y^f^o^{r disca}^r^{ded chem}^o^t^hera^py^drug^s^.^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^432(b⁾⁽⁹⁾^{. T}^h^{e Secretary}^w^o^u^l^d^N^o^provⁱ^sⁱ^oⁿ^.
^{care does}ⁿ^o^t^pay^f^o^{r che}^m^ot^h^e^rapy^b^e^ab^{le to}^p^a^y^a^p^h^y^sⁱ^cⁱ^aⁿ^f^o^r
^g^s^t^h^at^are^pu^rch^a^s^e^d^by^ph^y^sⁱ^cⁱ^aⁿ^s^{, are}^ch^em^oth^e^rapy^dru^g^s^th^{at are pu}^rch^a^s^e^d
^t^di^s^p^en^s^e^{d, an}^{d m}^u^s^t^{be di}^s^carded.^w^ith^{a r}^easoⁿ^ab^{le in}^ten^t^to^ad^mⁱⁿⁱ^st^e^r^to^a
^{Medicare ben}^e^fⁱ^ciary^bu^t^w^h^ich^canⁿ^o^{t be}
ⁱ^{ki/CRS-RL32005}^a^d^mⁱⁿⁱ^ster^ed^d^e^sp^{ite th}^{e p}^h^y^s^ician^’^s^r^e^a^s^on^abl^e^ef^f^o^rt^s^an^{d m}^u^s^t^{be di}^s^carded.
^g/w^P^a^ymeⁿ^t^a^m^o^unt^{s f}^o^r^a^l^l^c^o^v^e^r^e^d
^s^.or^ch^em^oth^e^rapy^dru^g^s^cou^l^{d be in}^creas^ed,
^le^ak^s^u^bj^{ect to a 1% cap}^{. T}^h^{e ben}^e^fⁱ^ciary^’^s
^c^o^st^-sha^rⁱ^{ng a}^m^o^unt^s^w^o^ul^d^no^t^b^e
^://wiki^af^f^ected.
^h^ttp
^v^{er int}^r^a^v^e^no^{us im}^m^{une g}^l^o^bulin^S^ecti^oⁿ⁶⁴^2.^T^h^{e prov}ⁱ^sⁱ^oⁿ^cov^e^rs^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^629.^B^y^Jan^u^a^ry^1,^2004,^IV^IG
^G⁾^{for the treatm}^eⁿ^t^{of prim}^aryⁱⁿ^tr^av^en^o^u^{s im}^m^uⁿ^e^g^l^o^b^u^lin⁽^I^V^I^G⁾^f^o^r^f^o^r^th^e^tr^eatm^eⁿ^t^o^f^p^r^im^ar^y^im^m^uⁿ^e
^m^une^{deficiency dis}^e^as^es^{in the hom}^e^.^th^e^t^r^eatm^eⁿ^tⁱⁿ^th^{e h}^o^m^e^of^prim^ary^defⁱ^cien^cy^dis^eas^esⁱⁿ^th^{e h}^o^m^e^w^o^u^l^{d be}
^tr^av^en^o^u^{s im}^m^uⁿ^e^g^l^o^b^u^lin⁽^I^V^I^G⁾^{is a}ⁱ^m^m^une^d^e^fⁱ^cien^cy^dis^eas^es^und^e^rⁱⁿ^clu^d^{ed as}^{a cov}^e^{red m}^e^{dical s}^e^rv^{ice, if}^a
^produ^ct^{prepared f}^r^om^t^h^{e pool}^ed^{Medicare. IVIG is}^defⁱⁿ^e^{d as}^an^approv^ed^p^h^y^s^ician^d^e^ter^mⁱⁿ^{es ad}^mⁱⁿⁱ^str^a^tioⁿ^o^f^th^e
^m^a^of^don^ors^.^It^h^a^s^been^u^s^ed^t^o^t^r^eat^pool^{ed pl}^as^m^a^deri^v^a^tⁱ^v^{e f}^o^{r t}^h^{e t}^r^eat^m^eⁿ^t^,^d^e^rⁱ^v^a^tiv^{e in}^th^{e p}^a^tien^t^’^s^h^o^m^e^is
^a^riety^of^au^toim^m^uⁿ^e^di^s^e^a^s^e^s^,ⁱⁿ^th^{e p}^a^tien^t^’^s^h^o^m^e^{, o}^f^{a p}^a^tien^t^w^ith^a^m^e^di^cal^l^y^appropri^a^t^e^.^T^hⁱ^s^w^o^u^l^{d n}^o^t
^c^l^u^dⁱⁿ^g^m^u^co^cu^tan^e^o^u^{s b}^listerⁱⁿ^g^diagⁿ^o^s^e^{d prim}^ary^im^m^uⁿ^e^defⁱ^cien^cyⁱⁿ^clu^d^{e item}^s^o^r^ser^v^{ices r}^e^l^a^ted^to^th^e
^s^e^as^es^{. It h}^a^s^f^e^w^e^{r s}ⁱ^{de ef}^f^ects^th^an^dⁱ^sea^s^e^,^if^{a p}^h^y^s^ician^d^e^ter^mⁱⁿ^es^a^d^mⁱⁿⁱ^s^t^ratⁱ^on^of^t^h^{e d}^e^rⁱ^v^a^tⁱ^v^e^.
^ds^{or i}^m^m^uⁿ^o^s^u^ppr^e^s^sⁱ^v^e^ag^en^t^s^.^ad^mⁱⁿⁱ^str^a^tioⁿ^o^f^th^{e d}^e^rⁱ^v^a^tiv^{e in}^th^e^In^t^r^av^en^ou^sⁱ^m^m^uⁿ^e^g^l^obu^lⁱⁿ^w^o^u^l^{d be}
^f^ectⁱ^v^{e O}^c^t^{ober 1, 2002,}^IV^IGⁱ^s^cov^e^red^p^a^tien^t^’^s^h^o^m^e^{is m}^e^dⁱ^cally^ap^p^r^o^p^rⁱ^ate.^{paid at 80}^%^o^f^th^{e les}^s^e^{r of}^actu^a^{l ch}^arg^e
^r^th^{e tr}^eatm^eⁿ^t^o^f^cer^tain^coⁿ^d^itioⁿ^s^f^o^r^I^t^em^{s o}^r^ser^v^ic^e^s^r^e^lated^to^th^e^{or th}^{e pay}^m^en^{t am}^ouⁿ^t^.

^aⁱⁿ^s^u^bpopu^l^a^tⁱ^oⁿ^s^{. IV}^IG^f^o^{r t}^h^e^ad^mⁱⁿⁱ^str^a^tioⁿ^o^f^th^e^d^e^rⁱ^v^a^tiv^{e ar}^{e n}^o^t
^eⁿ^t^of^au^toim^m^uⁿ^e^m^o^cocu^tateou^sⁱⁿ^clu^d^ed^{. I}^V^I^G^w^{ill b}^e^p^a^id^at⁸⁰^%^o^f^th^e
^s^t^e^riⁿ^g^di^s^eas^es^m^u^s^t^{be u}^s^{ed onl}^y^f^o^r^l^e^s^s^e^{r of}^act^u^a^l^c^h^a^r^{ge or t}^h^{e pay}^m^en^t
^o^r^{t ter}^m^th^e^r^a^p^y^,^b^u^{t n}^o^{t as a}^am^ouⁿ^t^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2004.}

CRS-55
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
ⁱⁿ^ten^aⁿ^{ce th}^er^ap^y^,^f^o^r^th^o^s^e^f^o^r^w^h^o^m
ⁿ^v^eⁿ^tioⁿ^a^{l th}^er^ap^y^h^a^{s f}^a^iled^.
^a^{blish dem}^o^nst^r^a^tⁱ^oⁿ^p^r^oj^e^c^t^t^o^co^v^e^r^S^ecti^oⁿ^641.^A²^-^y^ear^d^e^m^oⁿ^s^tr^atioⁿ^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^631.^T^h^{e Secr}^e^t^a^r^y^w^o^ul^d
^t^p^a^t^ient^drug^s^{. No}^p^r^o^v^isioⁿⁱⁿ^cu^r^r^en^t^p^r^o^j^{ect w}^{ill b}^e^estab^lish^e^d^th^{at w}^{ill co}^v^e^r^con^d^u^c^t^{a 2-}^y^{ear dem}^onst^r^atⁱ^oⁿ^proj^ectⁱⁿ
^.^m^o^{re th}^an^{50,000 patien}^t^s^an^d^w^ill^pay^f^o^r^th^{ree s}^t^a^t^es^cov^e^rin^g^m^o^{re th}^an^10,000
^dru^g^produ^cts^th^{at are pres}^cribed^a^s^patⁱ^e^nt^s^un^{der Part}^{B t}^h^at^w^o^u^l^{d pay}^f^o^r
^replacem^en^ts^f^o^{r ex}^is^tin^g^cov^e^{red P}^a^{rt B}^dru^g^s^an^d^biolog^icals^th^{at are pres}^{cribed as}
^d^r^u^g^s^th^{at ar}^{e f}^u^rⁿ^ish^e^dⁱⁿ^cⁱ^d^eⁿ^t^to^a^replac^em^en^ts^f^o^{r ex}^is^tin^g^cov^e^{red dru}^g^s
^p^h^y^s^ician^’^{s ser}^v^{ice w}^h^ich^ar^{e n}^o^{t u}^s^u^a^lly^th^{at ar}^{e f}^u^rⁿ^ish^e^dⁱⁿ^cid^eⁿ^t^to^{a p}^h^y^s^ician^’^s
^s^e^lf^-^a^d^mⁱⁿ^ister^e^d^,ⁱⁿ^clu^dⁱⁿ^g^o^r^a^l^aⁿ^tⁱ^c^aⁿ^c^e^r^prof^es^sⁱ^on^{al s}^e^rv^{ice an}^d^w^h^ich^{are n}^o^t
^ch^em^oth^e^rapu^tic^ag^en^ts^{. T}^h^{e proj}^{ect is}ⁿ^o^t^u^s^u^a^lly^self^-^a^d^mⁱⁿ^ister^e^dⁱⁿ^clu^dⁱⁿ^g^o^r^al
^perm^{itted to cos}^t^m^o^{re th}^an^{$500 m}^illion^.^an^ti-^can^cer^c^h^em^oth^e^rapu^{tic ag}^en^ts^{. T}^h^e
ⁱ^{ki/CRS-RL32005}^T^h^{e Se}^c^r^e^t^ar^y^{is r}^e^q^u^ir^ed^to^su^b^m^{it an}^ev^alu^a^tioⁿ^to^Coⁿ^g^r^{ess n}^o^later^th^an^J^u^ly¹^,^proj^ect^w^o^u^l^dⁿ^o^t^ex^t^eⁿ^d^bey^oⁿ^d^D^{ec. 31,}^{2005 an}^{d w}^o^u^l^{d n}^o^t^cos^t^m^o^{re t}^h^an^$100
^g/w^{2006. T}^h^{e proj}^{ect w}^{ill beg}ⁱⁿ⁹⁰^day^s^f^r^om^m^illioⁿ^.
^s^.or^en^actm^eⁿ^t^an^{d en}^{d n}^o^{later th}^an^Decem^ber
^le^ak^{31, 2005.}
^://wiki^A^O^repo^r^t^oⁿ^im^pa^ct^o^f^drug^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^432(e).^GA^{O w}^o^u^l^d^e^x^a^mⁱⁿ^e^th^e^S^ecti^oⁿ^303(e).^Sam^e^pr^o^v^is^ion^ex^cept
^h^ttp^ovi^sⁱ^oⁿ^s^on^b^eⁿ^e^fi^ci^{ary acces}^s^to^im^{pact of}^th^{e dru}^g^prov^is^ion^s^on^th^{e acces}^s^report^w^o^u^l^{d be du}^{e 2 y}^ear^s^a^f^t^e^{r t}^h^e
^.^No^p^r^o^v^isioⁿⁱⁿ^cu^r^r^eⁿ^t^of^{Medicare ben}^e^fⁱ^ciaries^’^{to cov}^e^red^im^p^l^em^eⁿ^t^a^tⁱ^oⁿ^o^f^th^{e co}^m^p^etitiv^e
^.^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^w^hⁱ^c^h^w^o^u^l^{d be du}^e^acquⁱ^s^ition^prog^ram^(J^an^u^a^ry^{1, 2007).}
^t^o^C^oⁿ^g^r^es^sⁿ^o^l^a^t^e^{r t}^h^an^Jan^u^a^ry^{1, 2006.}
^G^r^e^ports^{on m}^a^rk^et^S^ecti^oⁿ^303(c).^T^h^e^HHS-^I^{G w}^{ill su}^b^m^it^S^ecti^oⁿ^432(e).^T^h^{e H}^H^S^IG^w^o^u^l^{d be}^N^o^provⁱ^sⁱ^oⁿ^.

^o^{r drug}^s.^No^p^r^o^v^isioⁿⁱⁿ^cu^r^r^en^t^{a s}^t^u^d^y^{to C}^oⁿ^g^r^es^s^on^th^e^adequ^acy^of^r^e^q^u^ir^ed^to^coⁿ^d^u^c^{t o}ⁿ^{e o}^r^m^o^r^e^stu^d^ies
^.^A^S^P^p^a^y^m^en^ts^f^o^{r can}^{cer treatm}^eⁿ^t^s^by^th^{at com}^p^{are th}^{e m}^a^rk^{et prices}^to
^O^c^t^{ober 1, 2005. T}^h^{e S}^ecret^ar^y^wⁱ^l^l^M^e^{dicare pay}^m^en^ts^f^o^{r dru}^g^s^th^a^t
^sub^mⁱ^t^a^r^e^p^o^r^t^t^o^Co^ngr^e^{ss b}^y^J^a^nua^r^y¹^,^r^e^p^r^esen^{t th}^{e lar}^g^{est p}^o^r^tioⁿ^o^f^M^e^dⁱ^car^e
^{2006 on}^t^h^e^s^a^l^e^s^of^dru^g^s^an^{d bi}^ol^ogⁱ^cal^s^s^p^en^diⁿ^g^on^s^u^chⁱ^t^e^m^s^.
^to^lar^g^{e v}^o^lu^m^e^p^u^r^c^h^a^ser^s^to^d^e^ter^mⁱⁿ^e
^w^h^eth^e^{r th}^e^p^r^{ice at w}^h^ich^dru^g^s^an^d
^bi^ol^ogi^c^a^l^s^{are s}^o^l^d^t^o^t^h^es^{e pu}^rch^a^s^e^rs
^r^e^pres^en^{t th}^{e price m}^a^{de av}^{ailable t}^o
^p^hysⁱ^cⁱ^a^{ns a}ⁿ^d^r^e^c^o^m^m^e^nd^w^h^e^t^he^r^t^h^e^s^e
^s^a^l^e^s^s^h^ou^{ld be ex}^clu^d^{ed f}^r^om^th^{e A}^S^P
^c^o^m^p^ut^a^tⁱ^o^n.

CRS-56
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^q^uⁱ^{re s}^t^u^d^y^onⁿ^oⁿ^-^on^col^{ogy code}^s.^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^303(h⁾^.^T^h^e^S^ecretary^w^o^u^l^d^be
^p^r^o^v^isioⁿⁱⁿ^cu^r^r^en^{t law}^.^r^e^q^u^ir^ed^to^su^b^m^{it a stu}^d^y^t^o^Coⁿ^g^r^ess
^wⁱ^t^hⁱⁿ^{1 y}^{ear of}^en^actm^eⁿ^t^th^{at ex}^amⁱⁿ^es
^th^{e ap}^p^r^o^p^r^iaten^e^{ss o}^f^estab^lishⁱⁿ^g^an^d
ⁱ^m^pl^em^en^tⁱⁿ^g^s^e^parat^e^codes^f^o^{r n}^oⁿ^-
^oⁿ^co^lo^g^yⁱⁿ^f^u^sioⁿ^{s th}^{at ad}^d^r^{ess th}^{e lev}^e^l^o^f
^co^m^p^lex^ity^an^d^r^e^so^u^r^c^e^coⁿ^s^u^m^p^tioⁿ^.^I^f
^deem^{ed appropriate, th}^{e Secretary}^w^o^u^l^d
^{be abl}^e^t^oⁱ^m^pl^em^en^t^appropri^a^t^e^ch^an^g^e^s
ⁱⁿ^t^h^{e pay}^m^en^t^m^e^t^h^odol^og^y^.
^Self^-^I^nj^ect^{ed Drug}^{s a}^{nd B}ⁱ^o^l^o^gⁱ^ca^ls
^e^{lected s}^e^lf-injected^d^r^u^g^s^and^N^o^provⁱ^sⁱ^oⁿ^.^{Section 450}^E^.^In^{2004 an}^d^2005,^N^o^provⁱ^sⁱ^oⁿ^.

ⁱ^{ki/CRS-RL32005}^ol^ogi^cal^s^{. Co}^v^e^r^a^g^e^o^f^cer^tain^o^u^tp^atien^t^{Medicare w}^o^u^l^{d cov}^e^{r FDA}^approv^ed^s^e^lf^-
^g/w^g^s^an^d^bⁱ^ol^ogⁱ^cal^sⁱ^s^au^t^h^ori^{zed by}ⁱⁿ^j^{ected bio}^l^o^g^icals^th^{at are pres}^{cribed as}
^s^.or^t^{e. Un}^{der Medicare P}^a^{rt B}^,^th^es^e^com^p^{lete replacem}^en^ts^f^o^{r cu}^rren^tly
^le^ak^s^{are cov}^e^r^e^d^if^th^ey^{are u}^s^u^a^llyⁿ^o^t^c^o^ve^r^e^{d dru}^g^sⁱⁿ^ph^y^sⁱ^cⁱ^aⁿ^s^’^of^fⁱ^ces^{or as}
^lf^-^a^d^mⁱⁿⁱ^s^{tered an}^{d are prov}^{ided in}^ciden^t^u^s^u^a^lly^s^e^l^f^-^a^d^mⁱⁿⁱ^s^t^e^r^e^d^o^u^tp^atien^t
^://wiki^h^y^sⁱ^c^ian^’^{s ser}^v^{ices. Gen}^e^r^a^lly^,^h^o^s^p^it^{al s}^e^rv^ices^an^{d oth}^e^{r s}^e^lf^-ⁱⁿ^j^ected
^h^ttpⁱ^l^l^c^o^v^e^{r an}^ou^tpatien^t^dru^g^as^d^r^u^g^s^t^h^{at ar}^{e u}^s^ed^to^tr^{eat m}^u^ltip^le
^u^a^lly^self^-^a^d^mⁱⁿ^ister^e^d^if^{it is d}^e^li^v^e^r^e^d^sc^le^r^o^sis.
ⁱⁿ^tr^am^u^s^cu^larⁱⁿ^j^ectioⁿ^,^b^u^{t n}^o^{t if}^{it is}
^{ected s}^u^bcu^t^an^eou^s^ly^.

CRS-57
^Cov^e^{red Drugs and Serv}^{ices at}^{a Dialy}^s^{is Facilit}^y^.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^tablis^{h the com}^p^os^{ite rate a}ⁿ^d^S^ecti^oⁿ^623.^T^h^{e b}^{ill in}^cr^{eases th}^e^S^ecti^oⁿ^432(b^)(5).^In²⁰⁰⁴^t^h^{e com}^posⁱ^t^e^{Section 623}⁽^c^).^T^h^{e ESR}^D^com^pos^ite
^ents^{for covered drugs}^and^s^ervices^com^p^osⁱ^t^e^rat^e^f^o^{r ren}^a^l^di^al^y^sⁱ^s^by^1.6%^{rate w}^o^u^l^{d be in}^creas^{ed s}^o^th^at^th^e^s^u^m^of^p^a^y^m^en^{t rate w}^o^u^l^{d in}^creas^{e by}^{1.6% f}^o^r
^dia^l^y^s^{is f}^a^cilit^y^.^Dialy^s^{is f}^acilities^f^o^{r 2005. T}^h^{e bill requ}^ires^t^h^e^S^e^cretary^th^es^{e pay}^m^en^ts^plu^s^th^{e pay}^m^en^ts^f^o^{r n}^oⁿ^-^2004.
ⁱ^dⁱⁿ^g^{care to en}^{d s}^t^ag^{e ren}^a^{l dis}^eas^e^to^est^a^b^lish^a^basⁱ^c^cas^e-^mⁱ^x^adj^u^s^t^ed^EP^O^d^r^u^g^s^aⁿ^d^bⁱ^o^l^o^g^icals^b^illed
^{D) ben}^e^fⁱ^ciaries^receiv^e^{a f}ⁱ^x^e^d^pros^pectiv^e^pay^m^en^{t s}^y^s^t^em^f^o^{r dialy}^s^is^sep^a^r^a^tely^eq^u^a^{l p}^a^y^m^en^{ts th}^at^w^o^u^l^d^h^a^v^e
^pectiv^ely^determⁱⁿ^ed^pay^m^en^{t am}^ouⁿ^t^s^e^rvⁱ^ces^{. T}^h^{e bas}ⁱ^{c cas}^e-^mⁱ^x^adj^u^s^t^ed^been^m^a^d^e^w^ith^ou^{t en}^actm^eⁿ^t^of^th^{e dru}^g
^e^com^pos^{ite rate) f}^o^{r each}^dialy^s^is^s^y^s^t^em^is^requ^{ired to beg}ⁱⁿ^f^o^{r s}^e^r^vⁱ^ces^p^r^icin^g^p^r^o^v^isioⁿ^sⁱⁿ^thⁱ^s^legⁱ^slatioⁿ^.
^m^eⁿ^t^{, regardl}^e^s^s^of^w^h^et^h^e^{r s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^{d beg}ⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005. T}^h^e^D^u^riⁿ^g^2005,^t^h^{e ES}^R^D^rat^e^w^o^u^l^{d be}
^p^r^o^v^id^ed^{at th}^{e f}^acility^o^rⁱⁿ^th^e^s^y^s^t^em^{is r}^e^q^u^ir^ed^to^ad^j^u^{st f}^o^r^{a lim}^itedⁱⁿ^c^r^e^a^s^e^{d by}^0.05%^an^{d f}^u^rt^h^e^{r i}ⁿ^creas^ed
ⁱ^eⁿ^t^’^s^h^o^m^e^{. Medi}^{care pay}^s^s^e^parat^e^l^yⁿ^u^m^{ber of}^patien^t^ch^aracteris^tics^(th^e^cas^e-^b^y¹^.⁶^%^.^D^u^rⁱⁿ^g^{2006, t}^h^e^r^a^t^e^w^o^u^l^d^b^e
^r^er^y^t^h^r^o^p^o^ietin⁽^E^P^O⁾^w^h^ich^{is u}^s^ed^to^mⁱ^x⁾^.^T^h^{e bas}ⁱ^{c cas}^e-^mⁱ^x^adj^u^s^t^{ed s}^y^s^t^emⁱⁿ^creas^{ed by}^0.0⁵^{% an}^{d th}^en^f^u^rth^e^r
^an^em^{ia f}^o^{r pers}^on^s^w^ith^ch^ronⁱ^{c ren}^a^lⁱ^s^com^pos^{ed of}^t^w^{o com}^pon^en^t^s^:^{(1) t}^h^os^eⁱⁿ^creas^{ed by}^1.6%^{. D}^u^riⁿ^g²⁰⁰⁷^an^d
ⁱ^{ki/CRS-RL32005}^r^e^w^h^o^a^r^e^oⁿ^dⁱ^aly^s^{is. Co}ⁿ^g^r^{ess h}^a^s^t^Medi^care’^s^pay^m^en^t^f^o^{r EPO}^at^{$10 per}^ser^v^{ices w}^h^ich^cu^r^r^eⁿ^tly^co^m^p^rⁱ^{se th}^e^com^posⁱ^t^e^r^a^t^e⁽ⁱⁿ^c^l^u^diⁿ^g^t^h^{e 1.6%}^su^b^s^eq^u^eⁿ^tly^{, th}^{e ESRD r}^a^{te o}^f^th^e^prev^iou^s^y^{ear w}^o^u^l^d^{be in}^creas^{ed by}
^g/wⁿⁱ^t^s^w^h^et^h^e^{r i}^tⁱ^s^admⁱⁿⁱ^s^t^eredⁱⁿ^creas^{e i}ⁿ^{2005), an}^{d (2) t}^h^e^s^p^{read on}^0.05%^{. In}^an^y^y^{ear af}^t^e^{r 2004, t}^h^e
^s^.or^en^ou^s^l^y^{or s}^u^bcu^t^an^eou^s^lyⁱⁿ^dialy^s^is^sep^a^r^a^tely^b^illed^d^r^u^g^s^an^d^bⁱ^o^l^o^g^ical^s^Secretary^w^o^u^l^d^{be requ}^{ired to prov}^{ide f}^o^r
^le^ak^rⁱⁿ^p^a^tien^t^s’^h^o^m^e^{s. P}^r^o^v^id^er^s⁽ⁱⁿ^c^l^u^diⁿ^g^ery^t^h^r^opoi^etⁱⁿ^aⁿ^d^a^s^ad^d^itioⁿ^a^{l in}^cr^{eases in}^th^{e co}^m^p^o^s^{ite r}^a^te
^e^{95% of}^th^{e A}^W^P^f^o^{r s}^e^p^a^rately^d^e^ter^mⁱⁿ^ed^b^y^th^{e HHS-}^I^{G r}^e^p^o^r^ts)^.^{to accou}ⁿ^t^f^o^{r an}^y^pay^m^eⁿ^t^redu^ction^s^f^o^r
^://wiki^l^{e in}^j^ectab^{le m}^e^dⁱ^catioⁿ^s^o^t^h^e^r^th^an^se^p^a^r^a^t^e^l^y^a^d^mⁱⁿⁱ^st^e^r^e^d^d^r^{ugs (}^b^ut^no^t
^h^ttp^{O adm}ⁱⁿⁱ^s^t^ered^du^rin^g^treatm^eⁿ^t^s^{at th}^e^D^r^{ugs a}ⁿ^d^bⁱ^o^l^o^gⁱ^c^a^l^{s (}ⁱ^nc^l^u^di^ng^EPO⁾ⁱⁿ^t^h^{e s}^a^m^e^m^aⁿⁿ^e^{r as}ⁱⁿ^2004.
^.^ery^t^h^r^opoietin^{) cu}^rren^tly^{billed s}^e^parately^,^T^h^es^{e pay}^m^en^{t am}^ouⁿ^t^s^,^m^e^th^ods^or
^w^ill^coⁿ^tin^u^e^to^b^e^b^illed^sep^a^r^a^tely^uⁿ^d^er^a^d^j^u^st^me^nt^{s w}^o^ul^d^no^t^b^e^sub^j^e^c^t^t^o
^th^{e bas}ⁱ^{c cas}^e-^mⁱ^x^a^d^j^u^s^t^{ed s}^y^s^t^em^{. T}^h^ey^admⁱⁿⁱ^s^t^rativ^{e or j}^u^{dicial rev}ⁱ^ew^.
^canⁿ^o^{t b}^e^b^uⁿ^d^ledⁱⁿ^to^th^{e n}^e^w^sy^stem^.
^t^{ore com}^p^os^{ite ra}^t^e^exc^e^pt^io^{n f}^o^r^S^ecti^oⁿ^623.^T^h^{e p}^r^o^h^ib^itioⁿ^oⁿ^ex^cep^tⁱ^oⁿ^s^N^o^provⁱ^sⁱ^oⁿ^Se^cti^oⁿ⁶²³⁽^b)^.^T^h^{e p}^r^o^h^ib^itioⁿ^oⁿ
^t^ri^c^f^a^cilit^ies^{. P}^r^io^r^to^B^I^P^A^{, an}^con^t^ain^e^{d in}^B^I^P^A^s^ection⁴²²⁽^{a)(2) does}^ex^ceptⁱ^oⁿ^s^w^o^u^l^{d n}^o^t^appl^y^t^o^pedi^at^ri^c
^{e in}^th^{e com}^pos^{ite rate w}^o^u^l^dⁿ^o^{t ap}^p^l^y^to^p^e^dⁱ^atrⁱ^{c ESRD f}^{acilities as o}^f^ESR^D^f^acilities^a^s^of^{October 1, 2002.}
^g^e^{r an}^opportuⁿ^ity^f^o^{r ESR}^D^f^acilities^{October 1,}^{2002. P}^e^{diatric ESR}^D^f^acilities^P^e^dⁱ^a^t^rⁱ^{c f}^{acilities w}^o^u^l^d^b^e^d^e^fⁱⁿ^e^d^{as a}
^r^e^q^u^{est a r}^a^{te ex}^cep^tioⁿⁱⁿ^o^r^d^e^r^to^ar^{e d}^e^fⁱⁿ^e^d^{as r}^eⁿ^a^{l f}^acilitie^{s w}^ith⁵⁰^%^o^f^r^eⁿ^a^l^f^acility^w^ith⁵⁰^%^o^f^{its p}^a^tien^t^s^uⁿ^d^er
^e^hⁱ^g^h^e^{r pay}^m^en^ts^{. B}^I^P^A^requ^ired^t^h^ei^{r pat}ⁱ^eⁿ^t^s^uⁿ^d^{er 18 y}^ears^ol^d.^T^h^e^{18 y}^ears^ol^d.

^to^d^e^v^e^{lop an}ⁿ^e^w^ESR^D^prov^is^ion^is^ef^f^ectiv^{e u}^pon^en^actm^eⁿ^t^.
^y^m^en^{t sy}^stem^an^d^p^r^o^h^ib^ited^th^e
^an^tin^g^ofⁿ^e^w^ex^ception^s^w^ith^res^p^{ect to}
^s^receiv^e^{d af}^{ter Ju}^ly^{1, 2001.}

CRS-58
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^ents^{for ex}^is^tiⁿ^g^end-^S^ecti^oⁿ^623.^B^y^O^c^t^{ober 1, 2005, t}^h^e^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^623(a).^T^h^{e prov}ⁱ^sⁱ^oⁿ^w^o^u^l^d
^al^dⁱ^s^e^a^s^e^de^m^o^nst^r^a^tⁱ^oⁿ^Secretary^is^requ^{ired to report}^to^C^oⁿ^g^r^es^s^r^e^qu^{ire th}^{e Secretary}^{to es}^tablis^h^aⁿ
^{. T}^h^{e Secretary}^anⁿ^o^uⁿ^{ced a}^on^th^{e elem}^en^ts^an^d^f^eatu^r^es^f^o^{r th}^{e des}ⁱ^gⁿ^ad^vi^sory^{board f}^o^{r t}^h^{e ES}^R^D^di^s^eas^e
^m^oⁿ^s^t^r^atⁱ^oⁿ^proj^ect^es^t^a^blⁱ^s^hi^ng^a^an^{d im}^plem^en^tation^of^{a f}^u^lly^cas^e-^mⁱ^x^m^a^na^ge^m^e^nt^d^e^m^o^nst^r^a^tⁱ^o^n.
^eas^e-^m^aⁿ^a^g^e^m^eⁿ^t^prog^ram^th^{at w}^ill^adj^u^s^t^{ed, bu}ⁿ^d^{led pro}^s^pectiv^{e pay}^m^en^t
^org^aⁿⁱ^zation^s^ex^perien^{ced w}^ith^sy^st^e^m^fo^r^se^r^v^ic^e^s^furⁿ^ishe^d^b^y^E^S^RD
^g^E^S^R^D^p^a^tⁱ^eⁿ^t^s^t^o^d^e^v^e^lo^p^f^{acilities. T}^h^{e Secr}^etar^y^{is r}^e^q^u^ir^ed^to
^aⁿ^cⁱⁿ^g^an^{d deliv}^ery^approach^es^to^better^es^tablis^h^{a 3-}^y^ear^dem^oⁿ^s^tration^proj^{ect of}
^{e n}^eeds^of^ben^e^fⁱ^ciaries^wⁱ^th^th^{e f}^u^lly^cas^e-^mⁱ^x^a^d^j^u^s^t^{ed pay}^m^en^t
^R^D^.^sy^st^e^m^f^o^r^E^S^RD^se^r^vⁱ^c^e^s^,^b^e^giⁿⁿⁱ^ng
^Jan^u^a^ry¹^,²^{006 an}^{d con}^s^u^l^t^wⁱ^t^h^a
^r^e^q^u^ir^ed^ad^vⁱ^so^r^y^b^o^a^r^dⁱⁿ^car^r^yⁱⁿ^g^o^u^{t th}^e
^d^e^m^oⁿ^s^tr^atioⁿ^.
ⁱ^{ki/CRS-RL32005}
^g/w^Dur^a^ble^M^e^dic^a^l^E^quipmeⁿ^{t (DM}^E^{) a}^{nd Re}^la^te^{d Outpa}^t^ie^{nt Dr}^ugs^.
^s^.or^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^le^ak
^y^f^o^{r ho}^m^e^inf^u^sioⁿ^drug^s^.^Medicare^S^ecti^oⁿ^303(b⁾^.^Iⁿ^fusi^oⁿ^d^r^ugs^furⁿⁱ^s^he^d^S^ecti^oⁿ^432(b⁾⁽⁶⁾^{. T}^h^{e Secretary}^w^o^u^l^d^S^ecti^oⁿ^302.^Iⁿ^fusi^oⁿ^d^r^{ugs w}^o^ul^d^b^e
^://wiki^v^e^r^o^u^tp^atien^t^p^r^escr^ip^tioⁿ^d^r^u^g^s^t^h^r^o^{ugh c}^o^ve^r^e^d^d^u^r^a^bl^e^m^e^dⁱ^c^a^l^b^e^ab^{le to}^m^a^k^e^sep^a^r^a^{te p}^a^y^m^en^{ts f}^o^r^co^v^e^r^e^d^uⁿ^d^er^th^{e co}^m^p^etitiv^{e b}ⁱ^d^dⁱⁿ^g
^h^ttp^{d biolog}^icals^if^th^ey^{are n}^eces^s^a^ry^f^o^r^equⁱ^pm^en^t^s^t^artin^g^J^aⁿ^u^a^ry^{1, 2004 w}^{ill be}ⁱⁿ^f^u^sⁱ^on^drug^s^an^{d bi}^ol^ogⁱ^cal^s^f^u^rnⁱ^s^h^e^d^proj^ect^.
^{e u}^s^{e of}^cov^e^{red du}^rable^pai^d^95%^of^t^h^{e A}^W^{P i}ⁿ^ef^f^ect^on^O^c^t^ober^t^h^r^o^ugh^c^o^ve^r^e^d^D^M^E^b^e^giⁿⁿⁱ^{ng J}^a^nua^r^y
^{dical equ}ⁱ^pm^en^{t (}^D^{ME), in}^clu^dⁱⁿ^g^{1, 2003;}^s^t^artⁱⁿ^g^Jan^u^a^ry^1,^{2007, i}ⁿ^f^u^sⁱ^on^{1, 2004 i}^f^s^u^ch^pay^m^en^t^s^{are det}^e^rmⁱⁿ^{ed t}^o
^s^e^d^r^u^g^s^w^h^ich^m^u^{st b}^e^p^u^{t d}ⁱ^r^ectlyⁱⁿ^to^dru^g^s^f^u^rn^is^h^e^dⁱⁿ^an^y^{area cov}^e^{red by}^th^e^{be appropri}^a^t^e^.^T^o^t^a^l^am^ouⁿ^t^of^pay^m^en^t^s
^e^e^q^uⁱ^p^m^en^{t s}^u^ch^as^tu^m^o^r^{DME co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^p^r^o^g^r^a^m^w^ill^f^o^{r th}^{e in}^f^u^sⁱ^on^dru^g^sⁱⁿ^th^e^y^ear^cou^l^{d n}^o^t
^em^o^t^h^e^rapy^ag^en^ts^u^s^{ed w}^ithⁱⁿ^f^u^sⁱ^on^b^e^p^a^id^{at th}^{e co}^m^p^etitiv^{e p}^r^ice.^ex^ce^{ed th}^{e total am}^ouⁿ^t^of^s^p^en^din^g^th^at
^m^p^(h^om^{e i}ⁿ^f^u^sⁱ^on^dru^g^s^).^w^o^u^l^{d h}^a^v^e^occu^rred^w^ith^ou^{t en}^actm^eⁿ^t^of
^th^{is leg}ⁱ^slatioⁿ^.
^y^m^eⁿ^{t for inhalation therapy}^{. A}^s^S^e^c^tⁱ^o^{n 305.}^I^nha^l^a^tⁱ^o^{n d}^r^{ugs o}^r^S^ecti^oⁿ^432(b⁾⁽⁷⁾^{. T}^h^{e Secretary}^w^o^u^l^d^S^ecti^oⁿ^302.^T^h^{e co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ
ⁿ^tioⁿ^e^d^ab^o^v^{e, Med}ⁱ^car^{e w}^{ill co}^v^e^r^bi^ol^ogⁱ^cal^s^f^u^rnⁱ^s^h^e^{d t}^h^roug^h^cov^e^red^{be able to in}^creas^{e pa}^y^m^en^ts^f^o^{r cov}^e^red^prog^ram^w^o^u^l^dⁱⁿ^cl^u^d^e^dru^g^s^an^{d s}^u^pplⁱ^e^s
^tp^atien^t^p^r^escrⁱ^p^tⁱ^oⁿ^d^r^u^g^s^aⁿ^d^d^u^r^a^b^l^e^m^e^dⁱ^cal^eq^uⁱ^p^m^en^t^w^{ill b}^e^p^a^id^at^DME^asso^ciated^w^ithⁱⁿ^h^a^latioⁿ^d^r^u^g^s^an^d^use^dⁱⁿ^c^o^nj^unc^tⁱ^o^{n w}ⁱ^t^h^D^M^E^,ⁱⁿ^c^l^udⁱⁿ^g
^icals^if^th^ey^areⁿ^eces^s^a^ry^f^o^{r th}^e^85%^of^t^h^{e A}^W^{P (det}^ermⁱ^ne^{d as}^of^A^p^ri^l^bi^ol^ogⁱ^cal^s^an^d^m^a^k^e^s^e^parat^e^pay^m^en^t^s^{, i}^fⁱⁿ^h^a^latioⁿ^th^er^ap^y^.
^ectiv^{e u}^s^{e of}^cov^e^red^du^{rable m}^e^dical^{1, 2003) i}ⁿ^{2004 an}^{d by}^t^h^e^am^ouⁿ^t^appropri^a^t^e^{, f}^o^{r t}^h^os^{e f}^u^rnⁱ^s^h^e^{d t}^h^rou^g^h^S^ecti^oⁿ^302.^T^h^{e co}^m^p^etitiv^e^acq^uⁱ^sitioⁿ
^ui^p^m^eⁿ^t⁽^D^M^E⁾^,ⁱⁿ^c^l^udⁱ^{ng t}^h^o^s^e^d^r^ugs^prov^{ided u}ⁿ^d^{er th}^{e av}^e^r^ag^{e s}^a^les^price^co^{vered D}^M^{E beg}ⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2004.}^prog^ram^w^o^u^l^{d i}ⁿ^cl^u^d^{e dru}^g^s^an^d^s^u^pplⁱ^e^s
^ich^m^u^s^t^b^e^p^u^{t d}ⁱ^r^ectlyⁱⁿ^to^th^e^m^e^t^h^odol^og^yⁱⁿ^{2005 an}^{d s}^u^bs^equ^eⁿ^t^l^y^.^T^h^e^as^s^o^ciated^s^p^en^din^gⁱⁿ^an^y^y^ear^w^o^u^l^d^use^dⁱⁿ^c^o^nj^unc^tⁱ^o^{n w}ⁱ^t^h^D^M^E^,ⁱⁿ^c^l^udⁱⁿ^g
ⁱ^pm^en^{t s}^u^ch^as^res^p^iratory^dru^g^s^gⁱ^v^eⁿⁿ^o^{t ex}^{ceed th}^{e 10% of}^th^e^dif^f^e^ren^ce^of^th^eⁱⁿ^h^a^latioⁿ^th^er^ap^y^.^S^ecti^oⁿ^602(c)^{. GA}^O
^o^{ugh a}^ne^b^u^lⁱ^z^e^r⁽ⁱ^nha^l^a^tⁱ^o^{n d}^r^ugs)^.^GA^{O is b}^e^r^e^q^u^ir^ed^to^c^oⁿ^d^u^c^{t a stu}^d^y^to^sa^vi^{ngs fo}^r^t^h^e^s^e^d^r^{ugs a}^t^t^rⁱ^b^ut^e^d^t^o^t^hⁱ^s^w^o^u^l^{d be requ}ⁱ^r^{ed t}^o^cond^uc^t^{a s}^t^u^d^y^t^o

CRS-59
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^e^x^a^mⁱⁿ^{e th}^{e adequ}^acy^of^cu^rr^eⁿ^t^l^e^gⁱ^s^l^a^tⁱ^oⁿ^.^ex^amⁱⁿ^{e t}^h^e^a^d^e^q^u^acy^of^cu^rren^t
^r^e^im^b^u^r^s^em^en^{ts f}^o^rⁱⁿ^h^a^latioⁿ^th^e^r^ap^y^r^e^im^b^u^r^s^em^en^{ts f}^o^rⁱⁿ^h^a^latioⁿ^th^er^ap^y
^uⁿ^d^{er th}^{e Medicare prog}^ram^an^{d s}^u^bm^it^uⁿ^d^{er th}^{e Medicare prog}^ram^an^{d s}^u^bm^it
^th^{e r}^e^su^{lts o}^f^th^e^stu^d^yⁱⁿ^{a r}^e^p^o^r^{t to}^th^{e r}^e^su^{lts o}^f^t^h^{e stu}^d^yⁱⁿ^{a r}^e^p^o^r^{t to}
^Coⁿ^g^r^es^{s n}^o^later^th^an¹^y^ear^f^r^o^m^th^e^C^oⁿ^g^r^es^sⁿ^o^l^a^t^e^{r t}^h^an^May^{1, 2004.}
^en^actm^eⁿ^t^d^a^{te o}^f^th^{is leg}ⁱ^slatioⁿ^.
^a^{blish pa}^y^m^ent^s^f^o^r^dura^b^le^m^e^dica^l^S^ecti^oⁿ^302(b⁾^.^T^h^{e b}^{ill estab}^lish^e^{s a}^S^ecti^oⁿ^430.^{Medicare w}^o^u^l^{d n}^o^{t in}^creas^e^S^ecti^oⁿ^302.^Co^m^p^etitiv^{e acq}^uⁱ^si^tioⁿ
^ent⁽^D^M^E⁾^{. Medicare pay}^s^f^o^r^co^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^p^r^o^g^r^a^m^f^o^r^DME^th^{e DME}^f^e^e^sch^e^d^u^{le am}^o^uⁿ^t^{s in}^an^y^o^f^prog^ram^s^f^o^{r du}^rabl^{e m}^e^di^cal^equⁱ^pm^en^t^,
^E^aⁿ^d^P^O^,^usi^ng^dⁱ^ffe^r^e^nt^fe^e^sc^he^d^u^l^e^s⁽ⁱⁿ^c^lu^dⁱⁿ^g^item^s^u^s^edⁱⁿⁱⁿ^f^u^sioⁿ^an^d^t^h^{e y}^ears^f^r^om^{2004 t}^h^ro^ugh^{2010 an}^d^m^e^dⁱ^{cal su}^p^p^{lies, item}^s^u^s^edⁱⁿⁱⁿ^f^u^sioⁿ^,
^{r each}^clas^s^of^cov^e^re^dⁱ^t^e^m^th^{at are}^drug^s⁾^{, m}^e^di^cal^s^u^pplⁱ^e^s^,^h^o^m^e^di^al^y^sⁱ^s^w^o^u^l^{d u}^pdat^e^t^h^{e am}^ouⁿ^t^s^by^t^h^{e C}^P^I-^Uⁱⁿ^d^r^{ugs a}ⁿ^d^sup^p^lⁱ^e^{s use}^dⁱⁿ^c^o^nj^unc^tⁱ^oⁿ
^bj^ect^t^o^di^f^f^e^ren^t^f^l^oors^an^{d cei}^lⁱ^ng^s^,^su^p^p^lies,^th^er^ap^eu^tic^s^h^o^e^s^,^eⁿ^t^e^r^a^l^each^s^u^bs^equ^eⁿ^t^y^{ear. P}^a^y^m^en^ts^f^o^r^w^ith^du^{rable m}^e^dⁱ^c^a^{l equ}ⁱ^pm^en^{t, m}^e^dical
^{lated eith}^{er on}^{a s}^t^ate,^r^e^gⁱ^on^{al, or}^nut^rⁱ^eⁿ^t^s^,^e^q^ui^p^m^eⁿ^t^,^an^{d s}^u^pplⁱ^e^s,^orth^{otic dev}ⁱ^ces^th^{at h}^a^v^eⁿ^o^{t been}^cu^s^t^om^-^s^u^pplⁱ^e^s^,^h^o^m^e^di^al^y^sⁱ^s^s^u^pplⁱ^e^s^,^bl^ood
ⁱ^{ki/CRS-RL32005}^tⁱ^oⁿ^a^l^basⁱ^s.^BBA^{1997 am}^en^ded^law^{to f}^r^{eeze DME f}^ee^s^c^h^e^du^le^electrom^y^og^ram^devⁱ^ces^{, s}^a^liv^ation^devⁱ^ces^{, bl}^{ood produ}^ct^s^,^an^{d t}^r^an^s^f^u^sⁱ^oⁿ^f^a^{bricated w}^o^u^l^{d be s}ⁱ^m^ilarly^a^f^f^ected.^C^l^as^s^III^m^e^{dical dev}ⁱ^ces^w^o^u^l^{d be ex}^em^pt^p^r^o^d^u^c^ts,^p^a^r^e^nta^l^nutr^itio^n,^aⁿ^d^o^ff-the^-^s^h^elf^o^r^th^o^{tics (}^r^e^q^u^irⁱⁿ^g^mⁱⁿⁱ^m^a^{l self}^-
^g/w^o^w^aⁿ^ces^f^o^{r 5 y}^ears^,^begⁱⁿⁿⁱⁿ^gⁱⁿ^1998.^m^e^dⁱ^cⁱ^ne^,^aⁿ^d^o^ff-t^he^-she^l^f^o^r^t^h^o^tⁱ^c^s^f^r^om^th^{e f}^r^{eeze in}^{DME pay}^m^en^ts^.^adj^u^s^t^m^eⁿ^t^f^o^{r appropri}^a^t^e^u^s^{e) w}^o^u^l^d
^s^.or^s^w^e^{re s}^u^bj^{ect to a 1% in}^creas^{e f}^o^{r 5}⁽^r^e^q^ui^rⁱ^{ng m}ⁱⁿⁱ^m^a^l^se^l^f-a^d^j^ust^m^eⁿ^t^fo^r^P^r^o^s^th^{etics, p}^r^o^s^th^{etic d}^e^vⁱ^ce^s^,^aⁿ^d^{replace th}^{e f}^{ee s}^c^h^e^du^{le pay}^m^en^ts^.^En^teral
^le^ak^,^begⁱⁿⁿⁱⁿ^gⁱⁿ¹⁹⁹⁸^.^BBA^{97 al}^s^o^appropri^a^t^e^u^s^{e). T}^hⁱ^s^progr^a^m^wⁱ^l^l^cu^s^t^om^-^f^a^bri^cat^e^d^ort^h^otⁱ^c^s^w^o^u^l^{d be}ⁿ^u^t^rien^ts^an^{d clas}^s^{III dev}ⁱ^ces^w^o^u^l^{d n}^o^{t be}
^{ired th}^{e S}^e^c^r^etary^{to u}ⁿ^d^ertak^e^a^r^e^p^l^a^{ce th}^{e Medicare f}^e^e^s^c^h^e^d^u^l^e^u^pdat^e^{d by}^t^h^{e percen}^t^a^g^e^ch^an^g^eⁱⁿ^t^h^e^cov^e^{red by}^th^e^p^r^og^ram^.^R^u^{ral areas}^an^d
^://wiki^m^p^etitiv^{e b}ⁱ^d^dⁱⁿ^g^d^e^m^oⁿ^s^tr^atioⁿ^f^o^r^p^a^y^m^en^{ts. Ex}^clu^s^ioⁿ^s^f^r^o^m^th^e^co^m^p^etitiv^e^CP^I^-^U^.^areas^wⁱ^t^h^l^o^w^popu^l^a^tⁱ^oⁿ^den^sⁱ^t^y^wⁱ^t^hⁱⁿ
^h^ttp^h^ich^o^ccu^r^r^ed^{at tw}^o^{sites: P}^o^lk^acq^uⁱ^sitioⁿ^ar^{e: in}^h^a^latioⁿ^d^r^u^g^s^;^p^a^r^eⁿ^t^er^al^u^r^ban^are^a^s^w^o^u^l^{d be abl}^e^t^o^{be ex}^em^pt^,
^unt^y^,^Fl^o^rⁱ^d^a^aⁿ^d^Sa^{n A}ⁿ^t^oⁿⁱ^o^,^T^e^xa^s.ⁿ^u^t^rien^ts^{, equ}ⁱ^pm^en^{t, an}^{d s}^upplies^;^an^d^uⁿ^l^{ess a sig}ⁿⁱ^fⁱ^can^{t n}^a^tioⁿ^a^{l m}^a^r^k^{et ex}^ists
^as^s^III^m^e^{dical dev}ⁱ^ces^{are dev}ⁱ^ces^th^at^c^l^a^{ss I}^I^I^d^e^vic^e^s⁽^t^ho^se^tha^t^sustaⁱⁿ^o^r^t^h^r^o^{ugh m}^aⁱ^l^o^r^d^e^r^fo^r^a^p^a^r^tⁱ^c^ul^a^rⁱ^t^e^m^o^r
^s^t^aiⁿ^{or s}^u^pport^lⁱ^f^{e, are i}^m^pl^an^t^e^{d, or}^s^u^pport^lⁱ^f^{e, are i}^m^pl^an^t^e^{d, or pres}^en^t^s^e^rvⁱ^ce.^T^h^{e prog}^ram^s^w^o^u^l^{d be ph}^as^ed-ⁱⁿ
^en^{t poten}^{tial u}ⁿ^r^eas^on^able^ris^k^(e.g^.,^poten^tial^uⁿ^r^eas^on^{able ris}^k^an^{d are s}^u^bj^ect^ov^{er 3 y}^ears^wⁱ^t^h^{at leas}^{t on}^e-^th^{ird of}^th^e
^pl^an^t^a^bl^{e i}ⁿ^f^u^sⁱ^on^pu^m^p^s^an^{d h}^eart^{to prem}^ark^e^{t approv}^{al by}^th^e^F^o^o^d^an^d^areasⁱ^m^pl^em^en^t^e^{d i}ⁿ^{2005 an}^d^t^w^o-^t^hⁱ^r^ds
^l^v^{e replacem}^en^ts^{) an}^{d are s}^u^bj^{ect to}^D^r^{ug A}^d^mⁱⁿⁱ^st^r^a^tⁱ^oⁿ⁾^.^Iⁿ^st^a^r^tⁱ^{ng t}^h^e^of^t^h^{e areas}ⁱ^m^pl^em^en^t^e^{d i}ⁿ^{2006. H}ⁱ^g^h^-
^ark^e^{t approv}^al,^th^{e m}^o^s^t^s^t^rin^g^eⁿ^t^p^r^o^g^ram^s^{, th}^{e Secretary}^is^requ^{ired t}^o^cos^t^item^s^an^{d s}^e^rv^ices^w^o^u^l^{d be requ}^ired
^a^t^o^r^y^c^o^nt^r^o^l^.^estab^lish^co^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^ar^{eas, b}^u^t^{to be ph}^as^ed-ⁱⁿ^fⁱ^rs^t.^C^e^rtain^requ^irem^en^ts
^w^o^u^l^d^{be able to ex}^em^{pt ru}^{ral areas}^an^d^f^o^r^th^{e co}^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^p^r^o^g^r^a^m
^areas^wⁱ^t^h^l^o^w^popu^l^a^tⁱ^oⁿ^den^sⁱ^t^y^wⁱ^t^hⁱⁿ^w^o^u^l^{d be es}^t^a^blⁱ^s^h^e^d.^A^Prog^ram^A^d^vⁱ^s^o^ry
^u^r^b^aⁿ^ar^{eas th}^{at ar}^{e n}^o^{t co}^m^p^etitiv^{e, u}ⁿ^l^ess^an^d^Ov^er^sig^h^t^Co^m^m^ittee^w^o^u^l^d^b^e
^{a sig}ⁿⁱ^fⁱ^can^tⁿ^a^tioⁿ^a^{l m}^a^r^k^{et ex}^{ists th}^r^o^u^g^h^es^t^a^b^lⁱ^s^h^e^{d. T}^h^{e Secretary}^w^o^u^l^{d be able}
^m^a^{il o}^r^d^e^r^f^o^r^{a p}^a^r^ticu^l^ar^item^o^r^ser^v^ice.^to^u^s^{e th}^{is p}^a^y^m^en^{t in}^f^o^r^m^atioⁿ^to^ad^j^u^st
^Th^e^p^r^o^g^r^a^m^s^w^{ill b}^e^p^h^a^s^e^d^-ⁱⁿ^s^o^t^h^a^t^th^{e pay}^m^en^{t am}^ouⁿ^t^s^f^o^{r DME}^{not in}^a
^co^m^p^etitioⁿ^uⁿ^d^er^th^{e p}^r^o^g^r^a^m^s^o^ccu^r^sⁱⁿ^co^m^p^etitiv^{e acq}^uⁱ^sitioⁿ^ar^ea.^Iⁿ^th^is
¹⁰^o^f^th^{e lar}^g^est^m^e^tr^o^p^o^litan^statisticalⁱⁿ^s^t^an^{ce, th}^{e in}^h^e^ren^t^reas^on^ablen^e^s^s^ru^le
^areasⁱⁿ^{2007. T}^h^{e Secretar}^yⁱ^s^perm^itted^w^o^u^l^{d n}^o^t^{be appl}ⁱ^e^d.

CRS-60
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^to^p^h^ase-ⁱⁿ^fⁱ^r^s^{t item}^s^an^d^ser^v^{ices w}^ith^th^e
^hi^ghe^st^c^o^st^aⁿ^d^hi^ghe^st^vo^l^u^m^e^,^o^r^t^h^o^s^e
^item^s^an^{d s}^e^rv^ice^s^th^{at th}^{e Secretary}
^d^e^ter^mⁱⁿ^{es h}^a^v^e^th^{e lar}^g^{est sav}ⁱⁿ^g^s
^poten^{tial. T}^h^{e Secretary}^is^requ^ired^to
^report^t^o^C^oⁿ^g^r^es^s^by^Ju^l^y^{1, 2009, on}
^s^a^vⁱⁿ^g^s^{, redu}^ction^sⁱⁿ^cos^t^-^s^h^a^rin^g^,^acces^s
^{to item}^s^an^{d s}^e^rv^ices^{, a}^{nd ben}^e^fⁱ^ciary
^satisf^actioⁿ^uⁿ^d^e^r^t^h^e^co^m^p^etitiv^e
^acq^uⁱ^sitioⁿ^p^r^o^g^r^a^m^.
^tablis^{h accreditat}^{ion s}^t^andards^and^S^ecti^oⁿ^302(a).^DM^E^com^p^an^ies^an^d^S^ecti^oⁿ^430(c).^{DME co}^m^p^an^ies^an^d^S^ectⁱ^o^{n 302.}^T^h^{e co}^m^p^etitiv^{e b}ⁱ^d^dⁱⁿ^g
^oces^s^{for DM}^E^s^uppliers^{. Medicare}^su^p^p^{liers w}^{ill b}^e^su^b^j^{ect to}^an^accred^itatioⁿ^sup^p^lⁱ^e^r^s^w^o^u^l^{d be s}^u^bj^e^c^t^t^o^aⁿ^p^r^o^j^{ect w}^o^u^l^d^estab^lish^cer^tain^q^u^ality
ⁱ^{ki/CRS-RL32005}^r^e^q^u^ir^{es DME su}^p^p^lier^s^to^m^eet^tain^r^e^q^u^ir^em^en^{ts in}^o^r^d^e^r^to^p^a^r^ticip^ate^an^d^q^u^ality^assu^r^aⁿ^{ce p}^r^o^{cess. T}^h^e^S^e^c^r^etary^is^requ^{ired to des}ⁱ^gⁿ^a^t^e^accredi^t^a^tⁱ^oⁿ^and^q^u^a^lity^a^s^s^u^ran^c^e^proces^s^.^T^h^{e Secretar}^y^w^o^u^l^{d be requ}^ired^s^t^an^dards^f^o^{r D}^M^{E produ}^ct^sⁿ^o^l^a^t^e^{r t}^h^an^Ju^l^y^{1, 2004.}

^g/w^h^{e prog}^ram^.^Medi^{care l}^a^w^doesⁿ^o^tⁱⁿ^depen^d^en^{t accreditation}^org^aⁿⁱ^zation^sⁿ^o^{to des}ⁱ^gⁿ^a^{te in}^depen^d^en^{t accreditation}
^s^.or^th^{orize th}^{e Secretary}^t^o^d^e^e^m^later^th^an¹^y^ear^f^r^o^m^eⁿ^a^c^tm^en^{t. T}^h^e^o^r^gaⁿⁱ^z^a^tⁱ^o^{ns no}^l^a^t^e^r^t^h^aⁿ⁶^m^o^nt^{hs fr}^o^m
^le^ak^itatioⁿ^b^y^anⁱⁿ^d^e^p^eⁿ^d^en^t^en^tity^as^a^Secretary^is^requ^ired^to^estab^lish^stan^d^a^r^d^s^en^actm^eⁿ^t^af^{ter con}^s^u^ltation^w^ith^an^ex^pert
^b^s^titu^{te f}^o^r^oⁿ^{site in}^sp^ectioⁿ^b^y^CMS.^f^o^r^clin^{ical co}ⁿ^dⁱ^tioⁿ^s^f^o^r^p^a^y^m^en^{t f}^o^r^o^u^tsid^e^ad^vⁱ^so^r^y^p^aⁿ^e^{l. T}^h^{e ap}^p^licatioⁿ^o^f
^://wiki^cove^r^e^{d du}^rabl^{e m}^e^di^cal^equⁱ^pm^en^t^t^h^at^q^u^ality^stan^d^a^r^d^s^w^o^u^l^d^b^e^p^h^ased^-ⁱⁿ^o^v^er
^h^ttpⁱⁿ^clu^d^e^th^{e s}^p^ecifⁱ^cation^of^ty^pes^or^clas^s^e^s^{a 3-}^y^{ear peri}^od.
^of^cov^e^{red item}^s^th^{at requ}^{ire, as}^a
^coⁿ^d^itioⁿ^o^f^p^a^y^m^en^{t, a f}^ace-^to^-^f^ace
^e^x^a^mⁱⁿ^atioⁿ^an^d^{a p}^r^escr^ip^tioⁿ^f^o^r^th^e
^item^.^B^e^gⁱⁿⁿⁱⁿ^g^w^ith^th^{e d}^a^{te o}^f
^en^actm^eⁿ^t^{, pay}^m^en^{t m}^a^yⁿ^o^{t be m}^a^{de f}^o^r
^m^o^{torized or pow}^{er w}^h^eelch^airs^uⁿ^l^e^s^s^a
^p^h^y^sⁱ^cⁱ^a^n,^ph^y^sⁱ^cⁱ^aⁿ^as^sⁱ^s^t^an^t^,^nur^se
^p^r^actitioⁿ^e^r^,^o^r^{a clin}^{ical n}^u^r^{se sp}^ecialist
^h^a^s^con^d^u^c^{ted a f}^ace-^to-^f^{ace ex}^amⁱⁿ^ation
^o^f^th^{e in}^dⁱ^vⁱ^d^u^al^an^d^w^r^itten^{a p}^r^escr^ip^tioⁿ
^f^o^{r th}^{e item}^.^{Medicare pay}^m^en^{t is}^no^t
^p^e^r^m^itted^uⁿ^l^{ess th}^{e item}^m^eets^th^e
^stan^d^a^r^d^s^estab^lish^e^d^f^o^r^clin^ical^coⁿ^d^itioⁿ
^o^f^c^o^ve^r^a^ge^.

CRS-61
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^b^o^d^y^orth^oti^c^m^aⁿ^agem^eⁿ^t^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^450B^.^M^e^dⁱ^c^a^r^e^w^o^ul^d^pay^f^o^r^N^o^provⁱ^sⁱ^oⁿ^.
^{for cer}^t^a^{in nurs}ⁱ^{ng hom}^e^qu^alⁱ^fⁱ^e^{d t}^o^t^a^l^body^ort^h^otⁱ^c^m^aⁿ^a^g^e^m^eⁿ^t
^idents^.^Orth^otics^{are rig}ⁱ^{d dev}ⁱ^ces^{, or}^d^e^vⁱ^ces^p^r^o^v^id^ed^b^y^q^u^alif^ied^p^r^actitioⁿ^e^r^s
^{, w}^h^ich^are^applied^to^th^{e ou}^ts^{ide of}^an^d^su^p^p^lier^sⁿ^o^later^th^an⁶⁰^d^a^y^s^f^r^o^m
^t^o^s^u^pport^{or res}^t^ri^ct^m^o^v^e^m^eⁿ^tⁱⁿ^en^actm^eⁿ^t^{. T}^h^es^{e m}^e^dically^pres^cribed
^part^.^O^r^t^h^otⁱ^c^s^{are cov}^e^{red Part}^B^d^e^vⁱ^c^e^s^w^o^u^l^d^coⁿ^s^{ist o}^f^cu^sto^m^f^itted
ⁿ^e^f^{its w}^h^en^f^u^rⁿⁱ^s^h^e^dⁱⁿ^anⁱⁿ^stitu^tioⁿ^a^lⁱⁿ^divⁱ^du^{al braces}^th^{at are attach}^{ed to a}
^t^tⁱⁿ^g^,^su^ch^{as in}^{a h}^o^sp^{ital o}^r^sk^illed^f^r^am^{e th}^atⁱ^sⁱⁿ^teg^r^{al to th}^{e dev}ⁱ^{ce f}^o^{r a}
^r^sin^g^f^acility^{, w}^h^{ile d}^u^r^a^b^l^{e m}^e^dⁱ^cal^f^u^ll-^tim^{e p}^a^tien^t^o^f^a^s^k^illedⁿ^u^r^sin^g
^uⁱ^p^m^en^{t (}^D^ME)^{is n}^o^t^co^v^e^r^e^dⁱⁿ^th^o^s^e^f^acility^w^h^o^r^e^q^u^ir^{es su}^ch^m^e^dⁱ^{cal car}^e.
^ttin^g^s^{, becau}^s^e^{Medicare law}^requ^ires
^cov^e^{red D}^M^E^b^e^appropri^a^t^e^f^o^{r u}^s^e
^o^m^e^.
ⁱ^{ki/CRS-RL32005}^t^om^s^h^oes^{for diabetic}^Se^c^tⁱ^oⁿ^627.^S^t^artⁱⁿ^g^Jan^u^a^ry^{1, 2005,}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^626.^A^s^o^f^Jan^u^a^ry^1,^2004,
^g/w^tⁱ^ent^s^{. Su}^bj^ect^{to s}^p^ecifⁱ^{ed lim}^its^an^d^p^a^y^m^en^t^f^o^r^dⁱ^ab^{etic sh}^o^e^{s is lim}^ited^to^th^e^dⁱ^ab^{etic sh}^o^e^{s w}^o^u^l^d^b^e^p^a^id^{as is if}^th^ey
^s^.or^d^er^certain^circu^m^s^t^an^ces^{, Medicare}^w^ill^am^ouⁿ^t^t^h^at^w^o^u^l^{d be pai}^dⁱ^f^t^h^ey^w^e^re^w^e^{re con}^s^{idered to be a pros}^th^{etic or}
^le^ak^f^o^{r ex}^t^r^a-^dept^h^s^h^oes^wⁱ^t^hⁱⁿ^sert^s^or^coⁿ^s^id^er^ed^to^b^e^{a p}^r^o^s^th^{etic o}^r^o^r^th^o^tic^orth^{otic dev}ⁱ^ce.^T^h^{e Secretary}^{or a carrier}
^sto^m^m^o^ld^e^d^sho^e^{s w}^{ith inse}^r^t^{s fo}^r^aⁿ^devⁱ^{ce. T}^h^e^Secretary^m^a^y^es^tablis^h^low^e^r^w^o^u^l^d^b^e^ab^{le to}^estab^lish^lo^w^e^r^p^a^y^m^en^t
^://wiki^vⁱ^du^al^wⁱ^t^h^s^e^v^e^{re di}^abetⁱ^c^f^oot^p^a^y^m^en^{t lim}^{its th}^an^th^{ese am}^o^uⁿ^t^if^sh^o^e^s^lⁱ^mⁱ^t^s^th^an^th^es^{e am}^ouⁿ^t^s^if^s^h^oes^an^d
^h^ttp^eas^{e. Diabetic s}^h^oes^a^r^eⁿ^e^ith^er^an^dⁱⁿ^ser^t^{s o}^f^an^ap^p^r^o^p^r^{iate q}^u^ality^ar^eⁱⁿ^ser^t^{s o}^f^an^ap^p^r^o^p^r^{iate q}^u^ality^ar^e^r^ead^ily
ⁿ^s^id^er^ed^D^M^Eⁿ^o^r^o^r^th^o^{tics, b}^u^{t a}^readily^av^{ailable at low}^e^{r am}^ouⁿ^t^s^.^T^h^e^av^{ailable at low}^e^r^am^ouⁿ^t^s^.^T^h^{e Secretary}
^{parate categ}^ory^of^cov^e^rag^e^uⁿ^d^er^Secretary^is^requ^{ired to es}^tablis^{h a}^w^o^u^l^d^b^e^r^e^q^u^ir^ed^to^estab^lish^{a p}^a^y^m^en^t
^a^{rt B}^.^pay^m^eⁿ^t^a^m^ouⁿ^t^f^o^{r an}ⁱⁿ^di^vⁱ^du^al^am^o^uⁿ^t^f^o^r^anⁱⁿ^dⁱ^vⁱ^d^u^{al su}^b^s^titu^tin^g
^su^b^s^titu^tin^g^m^o^dⁱ^fⁱ^c^a^tioⁿ^s^to^th^{e co}^v^e^r^e^d^m^odi^fⁱ^catⁱ^oⁿ^s^t^o^t^h^e^cov^e^{red s}^h^{oe t}^h^at
^sh^o^e^th^{at w}^o^u^l^d^assu^r^e^th^{at th}^e^r^eⁱ^sⁿ^oⁿ^e^t^w^o^u^l^d^a^s^s^u^{re th}^{at th}^{ere is}ⁿ^oⁿ^e^{t in}^creas^e
ⁱⁿ^creas^{e in}^{Medicare ex}^pen^d^itu^res^.ⁱⁿ^{Medicare ex}^pen^d^itu^res^.

CRS-62
^A^m^b^u^l^an^{ce Serv}^ices.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^e^{d the Hous}^e)
^creas^e^am^{bulance fee}^s^c^h^e^d^u^l^e.^S^ecti^oⁿ⁴¹⁴^(b^).^Medicare’^s^pay^m^en^ts^S^ecti^oⁿ^425.^P^a^y^m^eⁿ^t^s^f^o^r^g^r^o^uⁿ^d^S^ecti^oⁿ^410.^T^h^{e bas}^e^rat^e^f^o^r^gr^o^uⁿ^d
^ad^itioⁿ^a^lly^{, Med}ⁱ^car^{e h}^a^{s p}^a^id^su^p^p^lier^s^o^f^f^o^r^g^r^o^uⁿ^d^am^b^u^lan^{ce ser}^v^ices^w^ill^b^e^am^bu^lan^{ce s}^e^rv^ices^origⁱⁿ^atin^gⁱⁿ^a^am^bu^lan^{ce s}^e^rv^ices^th^at^origⁱⁿ^ateⁱⁿ^{a qu}^alif^ied
^bu^lan^{ce s}^e^rv^ices^on^{a reas}^on^abl^e^ch^arg^eⁱⁿ^creas^{ed by}^on^{e qu}^a^r^t^e^{r of}^th^e^ru^ral^{area or a ru}^{ral cen}^s^u^s^tract^w^o^u^l^d^ru^{ral area w}^o^u^l^{d be in}^creas^{ed af}^{ter J}^a^nuary^1,
ⁱ^s^an^{d pai}^d^provⁱ^d^er-^b^as^{ed am}^bu^l^aⁿ^ces^on^p^a^y^m^en^{t p}^e^r^m^{ile r}^a^{te o}^t^h^e^r^w^ise^{be in}^creas^{ed by}^{5% f}^o^{r s}^e^rvⁱ^ces²⁰⁰⁴^b^y^t^h^e^a^v^e^r^a^g^e^c^o^s^t^s^p^e^r^t^rⁱ^p^f^o^r^t^h^e^b^a^s^e
^on^a^b^l^e^cos^t^basⁱ^s^.^BBA^{1997 prov}ⁱ^d^ed^estab^lish^e^d^f^o^r^tr^ip^{s lo}ⁿ^g^e^r^t^h^an⁵⁰^f^u^rnⁱ^s^h^e^d^J^aⁿ^u^a^ry^{1, 2005 t}^h^rou^g^h^r^a^{te in}^th^{e lo}^w^e^{st q}^u^ar^{tile as co}^m^p^ar^ed^to^th^e
^r^{a n}^a^tioⁿ^a^l^f^e^e^s^c^h^e^d^u^{le w}^h^ich^w^a^{s to}^b^e^mⁱ^l^e^s^occu^rrⁱ^ng^on^{or af}^t^e^{r Ju}^l^y^1,^Decem^{ber 31, 2007. T}^h^{e f}^{ee s}^c^h^e^du^le^av^erag^{e cos}^t^f^o^{r th}^{e bas}^e^{rate in}^th^{e h}ⁱ^g^h^e^s^t
^plem^en^{ted i}ⁿ^ph^as^es^{. T}^h^{e requ}^{ired f}^e^e²⁰⁰⁴^an^d^bef^o^re^Jan^u^a^ry^{1, 2009. T}^h^e^f^o^{r oth}^e^r^areas^w^o^u^l^{d be in}^creas^{ed by}^q^u^ar^{tile o}^f^{all r}^u^r^a^{l co}^uⁿ^ties.^A^q^u^alif^ied^r^u^r^a^l
^h^e^du^le^becam^{e ef}^f^ectiv^{e A}^p^{ril 1, 2002}^w^ith^pay^m^en^{t in}^creas^{e applies}^reg^a^rdles^s^of^{2%. T}^h^es^eⁱⁿ^creas^{ed pay}^m^en^ts^w^o^u^l^d^couⁿ^t^y^is^{a ru}^{ral area (a cou}ⁿ^t^yⁿ^o^{t as}^sⁱ^gⁿ^e^{d to}
^l^lⁱ^m^pl^em^en^t^a^tⁱ^oⁿ^by^Jan^u^ary^,^{2006. In}^t^h^e^w^h^er^{e th}^{e tr}^an^sp^o^r^tatioⁿ^o^r^igⁱⁿ^ates.ⁿ^o^t^af^f^ect^s^u^bs^equ^e^nt^peri^ods^{. T}^h^e^{a m}^e^tr^o^p^o^litan^{statistical ar}^ea)^wⁱ^t^h^a
^sitioⁿ^p^e^rⁱ^o^d^,^{a g}^r^ad^u^a^lly^d^ecr^easiⁿ^g^S^ecti^oⁿ^414(c).^T^h^{e Secretary}^w^ill^am^bu^lan^{ce con}^v^e^rs^ion^{factor w}^o^u^l^d^popu^l^a^tⁱ^oⁿ^den^sⁱ^t^y^of^Medi^{care ben}^e^fⁱ^ci^ari^e^sⁱⁿ
^tⁱ^oⁿ^of^t^h^{e pay}^m^en^tⁱ^s^t^o^{be bas}^e^{d on}^t^h^e^prov^{ide a percen}^t^a^g^eⁱⁿ^creas^{e in}^th^e^no^{t be adj}^u^s^t^{ed dow}ⁿ^w^{ard becau}^s^e^o^f^th^{e lo}^w^e^{st q}^u^ar^{tile o}^f^{all r}^u^r^a^{l co}^uⁿ^ties.

^o^{r pay}^m^en^t^m^e^t^h^odol^og^y^.^bas^e^rat^e^of^t^h^{e f}^{ee s}^c^h^e^du^l^e^f^o^r^th^{e ev}^alu^a^tioⁿ^of^th^{e prior y}^ear’^s
ⁱ^{ki/CRS-RL32005}^gr^o^und^a^m^b^u^l^a^nc^e^se^r^vⁱ^c^e^s^furⁿⁱ^s^he^d^oⁿ^{or af}^t^e^{r Ju}^l^y^{1, 2004 an}^{d bef}^o^r^e^c^o^nve^r^sⁱ^o^{n fa}^c^t^o^r^.
^g/w^Jan^u^a^ry^{1, 2010 t}^h^at^o^rⁱ^gⁱⁿ^at^{e i}ⁿ^a
^s^.or^q^u^alif^ied^r^u^r^a^{l ar}^{ea. T}^h^e^q^u^alif^ied
^le^ak^ru^{ral areas}^{are th}^os^{e w}^ith^low^e^s^t
^popu^lation^s^den^s^ities^th^{at c}^o^llectiv^ely
^://wiki^repres^en^t^{a t}^o^t^a^l^of^25%^of^t^h^e
^h^ttp^popu^l^a^tⁱ^oⁿⁱⁿ^t^h^os^{e areas}^{. T}^o^t^h^e
^ex^ten^t^f^eas^{ible, th}^{e Secretary}^is
^r^e^q^u^ir^ed^to^tr^{eat cer}^tain^r^u^r^a^{l ce}ⁿ^s^u^s
^tractsⁱⁿ^m^e^tropolⁱ^t^an^s^t^atis^{tical areas}
^{as r}^u^r^a^l^a^r^{eas. T}^h^er^{e w}^{ill b}^eⁿ^o
^admⁱⁿⁱ^s^t^rativ^{e or j}^u^{dicial rev}ⁱ^ew^uⁿ^d^er
^S^ectⁱ^oⁿ^s^{1869 an}^d¹⁸⁷⁸^of^t^h^{e S}^S^A^or
^o^t^h^e^r^w^{ise w}ⁱ^t^h^r^e^s^p^ect^to^th^e
^id^en^tif^icatioⁿ^o^f^{a q}^u^alif^ied^r^u^r^a^{l ar}^ea.
^Iⁿ^o^r^d^e^r^to^p^r^o^m^p^tly^im^p^l^em^en^{t th}^is
^p^r^ov^is^ion^,^th^{e Secretary}^m^a^y^u^s^{e data}
^f^u^rn^is^h^e^{d by}^GA^O.
^S^ectⁱ^o^{n 414(c).}^T^h^{e pay}^m^en^ts^f^o^r
^g^r^o^uⁿ^d^am^b^u^lan^ce^ser^v^{ices o}^r^igⁱⁿ^atin^g
ⁱⁿ^{a ru}^{ral area or}^{a ru}^{ral cen}^s^u^s^tract
^wⁱ^l^l^{be in}^creas^{ed by}^{2% (af}^t^er

CRS-63
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^e^{d the Hous}^e)
^ap^p^licatioⁿ^o^f^th^{e lo}ⁿ^g^trⁱ^p^an^d^lo^w
^den^s^ity^pay^m^en^{t in}^creas^es⁾^f^o^{r s}^e^rv^ices
^f^u^rnⁱ^s^h^e^{d o}ⁿ^{or af}^t^e^{r Ju}^l^y^{1, 2004}
^t^h^r^o^{ugh D}^e^c^e^m^b^e^r³¹^,^{2007. T}^h^{e f}^e^e
^s^c^h^e^du^{le f}^o^r^am^bu^lan^cesⁱⁿ^oth^e^{r areas}
⁽^a^f^t^er^ap^p^licatioⁿ^o^f^t^h^{e lo}ⁿ^g^tr^ip
^ad^j^u^s^t^m^eⁿ^t⁾^w^{ill in}^cr^{ease b}^y¹^%^.
^T^h^{ese in}^cr^eased^p^a^y^m^en^{ts w}^{ill n}^o^t
^af^f^{ect Medicare pay}^m^en^ts^fo^r^cov^e^red
^am^bu^l^aⁿ^{ce s}^e^rvⁱ^ces^af^t^e^{r 2006. A}
^GA^{O r}^e^p^o^r^{t is r}^e^q^u^ir^ed^.
^m^b^u^l^{ance fee s}^c^hedule.^Iⁿ^t^h^e^S^e^c^tⁱ^oⁿ^414(a).^Pa^y^m^eⁿ^t^s^f^o^r^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^622.^P^a^y^m^en^ts^w^o^u^l^{d be in}^corporate^a
ⁱ^{ki/CRS-RL32005}^s^ition^{period f}^r^om^2002-^{2006, pay}^m^en^{t is}^e^{d on}^a^blen^{d w}^ith^{a g}^r^adu^a^llyⁱⁿ^creasⁱⁿ^g^am^b^u^lan^{ce ser}^v^{ices w}^{ill b}^e^b^a^sed^oⁿ^eith^er^th^{e n}^a^tioⁿ^a^{l f}^{ee sch}^e^d^u^{le am}^o^uⁿ^t^r^e^gⁱ^oⁿ^{al f}^{ee sch}^e^d^u^{le, if}^th^{at w}^o^u^l^d^r^e^su^{lt in}^a^larg^{er pay}^m^en^{t to th}^{e am}^bu^lan^{ce prov}^{ider or}
^g/wⁱ^oⁿ^of^t^h^{e pay}^m^en^t^bas^e^d^on^t^h^{e f}^e^e^o^r^{a b}^l^en^d^e^d^r^a^{te o}^f^th^{e n}^a^tioⁿ^a^{l f}^e^e^s^u^pplⁱ^e^{r. T}^h^e^b^l^en^{ded rat}^e^f^r^om^{2004 t}^h^rou^g^h
^s^.or^h^e^du^{le a}ⁿ^d^{a decreas}ⁱⁿ^g^portion^on^th^e^s^c^h^e^du^{le an}^{d a reg}ⁱ^on^{al f}^{ee s}^c^h^e^d^u^l^e^,^{2010 w}^o^u^l^{d i}ⁿ^corporat^{e a decreas}ⁱⁿ^g^portⁱ^oⁿ^of
^le^ak^rm^{er pay}^m^en^{t m}^e^th^{od (of}^eith^{er reas}^on^able^w^hⁱ^c^h^e^v^e^r^r^e^su^{lts in}^th^{e la}^r^g^e^r^th^{e reg}ⁱ^on^al^f^{ee s}^c^h^e^du^les^calcu^{lated f}^o^{r each}
^t^s^f^o^{r am}^bu^lan^ce^prov^iders^{or reas}^on^able^pay^m^en^t^.^T^h^{e bl}^en^{ded rat}^e^du^riⁿ^g^t^h^e^o^fⁿⁱⁿ^e^cen^s^u^s^regⁱ^on^s^.^Fu^{ll ph}^as^e-ⁱⁿ^{to t}^h^e
^://wiki^arg^e^s^f^o^{r am}^bu^lan^{ce s}^u^ppliers^{.) In}²⁰⁰³^,^p^h^ase-ⁱⁿ^p^e^rⁱ^o^d^w^{ill in}^co^r^p^o^r^{ate a}^exⁱ^s^tⁱ^{ng f}^{ee s}^c^h^e^du^l^e^w^o^u^l^{d occu}^{r by}^2010.
^h^ttp^bl^en^dⁱ^s^40%^of^t^h^{e f}^{ee s}^c^h^e^du^l^e^an^d^60%^decreasⁱⁿ^g^portion^of^th^{e pay}^m^en^t^Medicare’^s^pay^m^en^ts^f^o^r^g^r^ouⁿ^d^am^bu^lan^c^e
^th^{e cos}^t^{or ch}^arg^e^rates^.^ba^{sed on}^regⁱ^on^al^f^{ee s}^c^h^e^du^l^e^s^s^e^rv^ices^w^o^ul^d^{be in}^creas^{ed by}^on^{e qu}^{arter of}
^c^a^l^c^u^l^a^t^e^d^f^o^r^each^o^fⁿⁱⁿ^e^c^eⁿ^s^u^s^th^{e am}^o^uⁿ^t^o^t^h^e^r^w^{ise estab}^lish^e^d^f^o^r^t^r^ip^s
^regⁱ^on^s^.^F^o^{r 2004, s}^t^artⁱⁿ^g^f^o^r^s^e^rvⁱ^ces^l^o^nge^r^t^h^aⁿ⁵⁰^mⁱ^l^e^{s o}^c^c^u^r^rⁱ^{ng b}^e^giⁿⁿⁱ^ng
^on^Ju^l^y^1,^{2004, t}^h^{e bl}^en^{ded rat}^eⁱ^s^Jan^u^a^ry^{1, 2004 an}^{d bef}^o^{re J}^a^nu^ary^{1 2009.}
^bas^e^{d on}^20%^of^t^h^{e n}^a^tⁱ^oⁿ^a^l^f^e^e^A^G^A^O^report^w^o^u^l^{d be requ}ⁱ^r^ed.

^s^c^h^e^du^l^e^an^{d 80%}^of^t^h^{e reg}ⁱ^on^al^f^e^e
^s^c^h^e^du^l^e^;^f^o^{r 2005, t}^h^{e bl}^en^{ded rat}^eⁱ^s
^bas^e^{d on}^{a 40}^%ⁿ^a^tⁱ^oⁿ^a^l^an^{d 60%}
^regⁱ^on^{al s}^p^{lit; in}^{2006, th}^{e blen}^{ded rate}
ⁱ^s^bas^e^{d on}^{a 60%}ⁿ^a^tⁱ^ona^l^an^{d 40%}
^regⁱ^on^{al s}^p^{lit; in}^{2007, 2008 an}^{d 2009,}
^t^h^{e bl}^en^d^e^d^rat^eⁱ^s^bas^e^{d on}^{a 80%}
ⁿ^a^tioⁿ^a^{l an}^d²⁰^%^r^e^gⁱ^oⁿ^{al sp}^{lit; an}^dⁱⁿ
^{2010 an}^{d s}^u^bs^equ^eⁿ^t^l^y^{, t}^h^e^am^bu^l^aⁿ^c^e
^f^{ee s}^c^h^e^du^l^eⁱ^s^bas^e^{d on}^t^h^{e n}^a^tⁱ^oⁿ^a^l
^f^{ee s}^c^h^e^du^le.

CRS-64
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^e^{d the Hous}^e)
^c^r^e^as^{e coverage for ai}^{r am}^b^u^l^an^ce^S^ecti^oⁿ^415.^Reg^u^l^atioⁿ^s^w^{ill p}^r^o^v^id^e^S^ecti^oⁿ^426.^F^o^{r s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^d^N^o^provⁱ^sⁱ^oⁿ^.

^.^M^e^{dicare pay}^s^f^o^{r am}^bu^lan^c^e^th^{at air am}^bu^lan^{ce s}^e^rv^ices^wⁱ^l^l^be^begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^1,²^{005, t}^h^e
^rv^ices^uⁿ^d^{er a f}^{ee s}^c^h^e^du^{le. Se}^veⁿ^cov^e^{red i}^f^:^{(1) s}^u^ch^se^rvⁱ^{ce i}^s^r^e^g^u^l^a^tⁱ^o^{ns go}^ve^rⁿⁱ^{ng a}^m^b^u^l^aⁿ^c^e
^ories^of^g^r^ouⁿ^d^am^bu^lan^{ce s}^e^rvⁱ^c^es^,^reas^on^{able an}^{d n}^eces^s^a^ry^bas^e^d^on^th^e^s^e^rv^ices^w^o^u^l^{d be requ}^{ired to en}^s^u^re
ⁱⁿ^g^f^r^om^basⁱ^{c l}ⁱ^f^{e s}^u^pport^t^o^s^p^eci^al^t^y^p^a^tien^t^’^s^h^ealth^coⁿ^d^itioⁿ^{at o}^r^th^{at air am}^bu^lan^ce^s^e^rv^ices^{be cov}^e^red
^s^{port, and}^tw^{o categ}^ories^of^air^im^m^e^dⁱ^ately^p^r^io^r^to^th^{e tim}^e^o^f^th^e^if^{: (1}⁾^t^h^{e air am}^bu^lan^{ce s}^e^rv^{ice is}
^bu^lan^{ce s}^e^rv^ices^are^es^tablis^h^e^d.^P^a^y^m^en^t^tran^s^{port s}^e^rvⁱ^c^e^;^an^{d (2) th}^{e air}^m^e^di^cal^l^yⁿ^eces^s^a^ry^bas^e^{d on}^t^h^e
^{r am}^bu^lan^{ce s}^e^rv^ices^can^on^ly^be^m^a^d^e^if^am^bu^lan^{ce s}^e^rv^{ice com}^p^lies^w^ith^h^ealth^coⁿ^d^itioⁿ^o^f^th^{e p}^a^tien^t^b^eⁱⁿ^g
^h^e^{r m}^e^t^h^ods^o^f^t^r^aⁿ^s^p^ort^a^tⁱ^oⁿ^are^es^t^a^b^lⁱ^s^he^d^e^q^ui^p^m^eⁿ^t^an^d^crew^tr^an^sp^o^r^ted^{at o}^r^im^m^e^dⁱ^ately^p^r^io^r^to
^raiⁿ^di^cat^{ed by}^t^h^{e pat}ⁱ^eⁿ^t^’^s^m^e^di^cal^r^e^qu^irem^en^ts^{. A}ⁿ^{air am}^bu^lan^c^e^th^{e tim}^{e of}^th^{e tran}^s^{port s}^e^rv^{ice; an}^d
ⁿ^d^itioⁿ^s^{, b}^u^{t o}ⁿ^ly^to^th^e^e^x^ten^t^p^r^o^v^id^edⁱⁿ^s^e^rv^{ice is}^con^s^{idered reas}^on^{able and}^{(2) th}^{e air am}^bu^lan^ce^s^e^rv^ice^com^p^lies
^a^tⁱ^o^ns.ⁿ^eces^s^a^ry^w^h^eⁿ^requ^es^t^e^d:^{(1) by}^a^w^ith^th^{e equ}ⁱ^p^m^eⁿ^t^a^{nd crew}
^ph^y^sⁱ^cⁱ^aⁿ^{or ot}^h^e^{r qu}^alⁱ^fⁱ^e^{d m}^e^di^cal^r^e^q^u^ir^em^en^t^s^e^s^tab^lish^e^d^b^y^th^e
ⁱ^{ki/CRS-RL32005}^pers^onⁿ^e^l^w^h^{o reas}^on^abl^y^det^e^rmⁱⁿ^es^th^a^t^th^{e tim}^{e n}^eed^to^tr^an^sp^o^r^{t b}^y^lan^d^Secretary^.^T^h^es^{e s}^e^rv^ices^w^o^u^l^{d be}^a^fⁱ^x^e^{d w}ⁱ^ng^{or rot}^a^ry^wⁱⁿ^g^ai^r
^g/w^o^r^t^h^{e in}^stab^ility^o^f^su^ch^tr^an^sp^o^r^t^am^bu^lan^{ce s}^e^rv^ices^.
^s^.or^th^reaten^s^t^h^{e patien}^t^’^s^h^ealth^or
^le^ak^s^u^rv^iv^{al; or (2) s}^u^ch^s^e^rv^ices^are
^f^u^rnⁱ^s^h^e^{d pu}^rs^u^aⁿ^t^t^o^{a prot}^ocol^t^h^atⁱ^s
^://wiki^es^t^a^blⁱ^s^h^e^{d by}^{a s}^t^a^t^{e or reg}ⁱ^on^al
^h^ttp^em^erg^eⁿ^c^y^m^e^{dical s}^e^rv^ices^(EMS)
^ag^en^cy^an^{d approv}^{ed by}^th^e^Secretary^.
^T^h^e^{EMS ag}^en^cy^canⁿ^o^{t h}^a^v^e^an
^o^wⁿ^e^r^s^hⁱ^pⁱⁿ^ter^e^{st in}^th^{e en}^tity
^f^u^rn^is^hⁱⁿ^g^s^u^ch^s^e^rv^ice.^Als^o^{, th}^ere
^c^a^nno^t^b^e^a^fi^na^ncⁱ^a^l^,^e^m^p^l^o^y^m^e^nt^o^r
^o^wⁿ^e^r^s^hⁱ^p^r^e^latioⁿ^s^hⁱ^p^b^e^tw^een^th^e
^p^e^r^s^oⁿ⁽^o^rⁱ^mme^dⁱ^a^t^e^f^a^mi^l^y^me^mb^e^r⁾
^re^q^u^es^tin^g^th^{e s}^e^rv^{ice an}^{d th}^e
^f^u^rⁿ^ishⁱⁿ^g^en^tity^{. T}^h^{is p}^r^o^hⁱ^b^itioⁿ
^does^no^t^apply^{to certain}ⁱⁿ^s^t^an^ces
^w^h^en^{a h}^o^spⁱ^t^a^{l an}^d^an^en^tity
^f^u^rⁿ^ishⁱⁿ^g^th^{e r}^u^r^a^{l air}^am^b^u^lan^c^e
^s^e^rv^ices^{are u}ⁿ^d^{er com}^m^oⁿ^owⁿ^e^rs^hⁱ^p.
^A^ru^{ral air am}^bu^lan^{ce s}^e^rvⁱ^c^e^is
^d^e^fi^ne^d^a^s^a^fi^xe^d^wⁱ^{ng o}^r^r^o^t^a^r^y^wⁱ^ng

CRS-65
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^e^{d the Hous}^e)
^{air am}^bu^lan^{ce s}^e^r^vⁱ^{ce w}^h^{ere th}^e
^patien^t^pick^u^p^occu^rsⁱⁿ^{a ru}^{ral area or}
^ru^{ral cen}^s^u^s^{tract. T}^h^{e prov}^is^ion
^ap^p^{lies to}^ser^vⁱ^{ces o}ⁿ^o^r^af^ter^J^aⁿ^u^a^r^y
^{1, 2005.}
^O^t^h^e^{r Part}^{B Serv}^{ices an}^d^Pro^v^isioⁿ^s^.
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^tab^lⁱ^s^h^{2-year m}^o^ratori^u^m^on^th^erap^y^Section⁶²⁴^.^A^p^p^licatioⁿ^o^f^th^{e th}^er^ap^y^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^624.^A^p^p^lⁱ^c^a^tⁱ^oⁿ^of^th^e^th^erapy
^.^B^B^A⁹⁷^e^s^t^a^b^lⁱ^s^he^d^a^nnua^l^p^a^y^m^eⁿ^t^capsⁱ^s^s^u^s^p^en^{ded f}^o^{r t}^h^{e rem}^aⁱⁿ^{der of}^caps^w^o^u^l^{d be s}^u^s^p^en^{ded i}ⁿ^2004.
^{its p}^e^r^b^eⁿ^e^fⁱ^ciar^y^f^o^r^{all o}^u^t^p^atien^t²⁰⁰³^(af^t^{er en}^act^m^eⁿ^t^{), i}ⁿ²⁰⁰⁴^an^d^2005.^P^r^o^v^isioⁿ^s^w^ith^r^e^sp^e^c^{t to}^ex^istin^g^r^e^p^o^r^t
^s^e^rv^ices^prov^{ided by}ⁿ^oⁿ^-^h^o^s^p^ital^T^h^{e Secretary}^is^requ^{ired to s}^u^bm^{it th}^e^requ^irem^en^ts^{are in}^clu^d^ed.
ⁱ^{ki/CRS-RL32005}ⁱ^d^ers^.^T^h^{e cap appl}ⁱ^e^dⁱⁿ^19999.^report^s^requⁱ^r^{ed by}^BBA^{97 an}^{d BIPA}^by
^g/w^A^an^{d BIPA}^s^u^s^p^en^{ded appl}ⁱ^catⁱ^oⁿ^March^31,^{2004 rel}^a^tⁱⁿ^g^t^o^t^h^{e al}^t^e^rn^atⁱ^v^es
^s^.or^{r 2000 t}^h^ro^ugh^{2002. En}^f^o^r^c^e^m^en^t^w^a^s^t^o^a^si^ngl^e^a^nnua^l^d^o^l^l^a^r^c^a^p^oⁿ^o^u^t^p^a^tⁱ^e^nt
^le^ak^e^{d u}ⁿ^{til Septem}^{ber 1, 2003.}^th^er^ap^y^an^d^th^{e u}^tilizatioⁿ^p^a^tterⁿ^{s f}^o^r
^o^u^t^p^atien^t^th^er^ap^y^.^T^h^{e GA}^{O is r}^e^q^u^ir^ed
^://wiki^to^id^en^tif^y^coⁿ^d^itioⁿ^s^o^r^dⁱ^{seases th}^{at m}^a^y
^h^ttp^j^u^stif^y^w^a^ivⁱⁿ^g^th^{e ap}^p^licatioⁿ^o^f^th^e
^th^erapy^caps^an^{d report}^{to C}^oⁿ^g^r^es^s^by
^O^c^t^{ober 1, 2004.}
^t^s^as^s^o^{ciated w}ⁱ^th^S^ecti^oⁿ^731.^T^h^{e Secretary}ⁱ^s^proh^ibited^S^ecti^oⁿ^438.^A^f^t^e^{r Jan}^u^a^ry^{1, 2005, t}^h^e^S^ecti^oⁿ^733.^T^h^e^rou^tin^{e cos}^t^s^of^{care f}^o^r
^l^t^r^ia^ls^.^C^u^rren^tly^{, Medicare cov}^e^rs^from^ex^clu^dⁱⁿ^g^f^r^om^{Medicare cov}^e^ra^ge^rou^tin^{e cos}^t^s^of^{care fo}^r^Medicare^Medⁱ^car^{e b}^eⁿ^e^fⁱ^ciar^{ies p}^a^r^ticip^atin^gⁱⁿ
^r^o^u^tin^{e co}^{sts o}^f^q^u^alif^yⁱⁿ^g^clin^ical^th^{e rou}^tin^{e cos}^t^s^of^{care in}^cu^{rred by}^a^b^eⁿ^e^fⁱ^ciar^ies^p^a^r^ticip^atin^gⁱⁿ^clin^ical^tr^ials^clin^{ical tr}^{ials th}^{at a}^r^e^coⁿ^d^u^c^tedⁱⁿ
^w^ith^o^u^{t ex}^p^{licit statu}^t^o^r^yⁱⁿ^str^u^ctioⁿ^.^{Medicare ben}^e^fⁱ^ciary^participatin^gⁱⁿ^a^w^o^u^l^{d be cov}^e^{red by}^s^t^atu^t^{e. T}^h^e^Secretary^accordan^{ce w}^ith^anⁱⁿ^v^e^s^tig^ationa^{l dev}ⁱ^ce
^w^e^v^e^{r, Medi}^{care does}ⁿ^o^t^pay^f^o^r^categ^o^r^y^A^clin^{ical tr}^{ial, b}^e^gⁱⁿⁿⁱⁿ^g^wⁱ^th^w^oul^dⁿ^o^t^{be requ}ⁱ^r^{ed t}^o^m^odi^f^y^t^h^e^ex^em^ptⁱ^oⁿ^approv^{ed u}ⁿ^d^{er S}^ectⁱ^oⁿ^530(g⁾
^as^pects^of^th^e^clin^{ical trial}^rou^tin^e^cos^t^sⁱⁿ^cu^{rred on}^an^{d af}^{ter J}^aⁿ^u^a^ry^ex^istin^g^r^e^g^u^l^atioⁿ^s^{. T}^o^t^a^{l Med}ⁱ^car^e^of^t^h^{e F}^e^d^e^ral^F^{ood, D}^r^u^g^,^an^{d C}^o^s^m^etⁱ^c
^dⁱⁿ^g^:^th^{e in}^v^e^stig^atioⁿ^a^{l item}^o^r^{1, 2005.}^T^hⁱ^s^provⁱ^sⁱ^oⁿ^doesⁿ^o^t^appl^y^t^o^,^ex^p^eⁿ^d^itu^r^e^{s asso}^ciated^w^ith^th^{is p}^r^o^v^isioⁿ^A^c^t^w^o^u^l^{d be cov}^e^{red. A}ⁿ^y^clⁱⁿⁱ^cal^t^rⁱ^a^l
^v^{ice, item}^s^an^d^ser^v^{ices n}^o^{t u}^s^edⁱⁿ^th^e^{or af}^fe^c^t^{, Medicare cov}^e^rag^e^{or pay}^m^en^t^w^o^u^l^{d n}^o^{t ex}^{ceed s}^p^ecifⁱ^{ed lim}^its^th^{at s}^t^art^es^t^a^blⁱ^s^h^e^{d on}^t^h^{e dat}^e^of^en^act^m^eⁿ^t^or
^r^{ect clin}^{ical m}^aⁿ^a^g^e^m^eⁿ^t^of^th^{e patien}^t^,^fo^r^a^no^n-e^x^p^e^rⁱ^m^e^nt^a^l^/ⁱⁿ^v^e^stⁱ^g^a^tⁱ^o^na^l^{at $32 m}^illionⁱⁿ^{2005 an}^{d in}^cr^e^a^s^e^af^t^e^{r w}^o^u^l^{d be cov}^e^red.^S^e^rvⁱ^ces^provⁱ^d^ed
^{d item}^s^an^{d s}^e^rv^ices^c^u^s^t^om^arily^(categ^ory^B⁾^devⁱ^ce.^g^r^adu^a^lly^{to $50 m}^illionⁱⁿ^2013.^on^{or af}^t^e^{r en}^act^m^eⁿ^t^w^o^u^l^{d be cov}^e^red.

^{ided by}^th^{e res}^earch^s^pon^s^o^{r f}^r^{ee of}
^arg^e^f^o^{r an}^y^en^{rollee in}^th^{e trial.}

CRS-66
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^v^{er certa}ⁱ^{n v}ⁱ^sioⁿ^reha^b^ilita^t^ioⁿ^S^ecti^oⁿ^645.^T^h^e^Secretary^is^requ^{ired to}^S^ecti^oⁿ^446.^{Medicare P}^a^{rt B}^w^o^u^l^d^cov^e^r^N^o^provⁱ^sⁱ^oⁿ^.
^{. Medicare does}ⁿ^o^{t cov}^e^{r rou}^tin^e^stu^d^y^th^{e f}^easib^ility^an^d^ad^vⁱ^sab^ility^o^f^vⁱ^sioⁿ^r^e^h^a^b^ilitatioⁿ^ser^v^{ices f}^u^rⁿ^ish^e^d^to
^{e car}^{e o}^r^r^e^lated^se^r^vⁱ^c^e^s^an^d^w^{ill n}^o^t^provⁱ^dⁱⁿ^g^f^o^{r pay}^m^en^t^f^o^{r v}ⁱ^sⁱ^on^a^ben^e^fⁱ^ciary^w^h^{o is}^diagⁿ^o^s^e^{d w}^ith^certain
^f^o^{r ey}^eg^las^s^e^s^;^m^o^s^t^con^t^{act lens}^e^s^;^r^e^h^a^b^ilitatioⁿ^ser^v^{ices f}^u^rⁿ^ish^e^d^b^y^vⁱ^sioⁿ^vi^si^oⁿⁱ^m^p^aⁱ^r^m^e^nt^s.^Co^ve^r^e^d^se^r^vⁱ^c^e^s
^{e ex}^amⁱⁿ^ation^s^f^o^{r th}^{e pu}^rpos^{e of}^r^e^h^a^bⁱ^lita^tⁱ^oⁿ^p^r^o^f^e^s^sⁱ^oⁿ^a^l^s^.^Th^e^r^e^p^o^r^tⁱ^s^w^o^u^l^{d be es}^t^a^blⁱ^s^h^e^{d by}^a^p^l^an^of^care
^escr^ibⁱⁿ^g^,^f^ittin^g^,^o^r^ch^an^gⁱⁿ^g^ey^eg^lasses^du^{e t}^o^C^oⁿ^g^r^es^s^by^Jan^u^a^ry^{1, 2005.}^dev^e^l^{oped by}^{a qu}^alⁱ^fⁱ^e^d^ph^y^sⁱ^cⁱ^aⁿ^or
^t^{act len}^s^es^{; an}^{d m}^o^s^t^p^r^ocedu^r^es^q^u^alif^ied^o^c^c^u^p^a^tioⁿ^a^{l th}^er^ap^{ist w}^h^o^s^{e p}^l^an
^r^f^o^r^m^e^d^to^d^e^ter^mⁱⁿ^e^th^{e r}^e^f^r^activ^{e state}^of^{care is}^periodically^revⁱ^ew^{ed by}^a
^th^e^ey^es^{. A}^C^M^{S prog}^ram^m^e^m^o^ran^d^u^m^qu^alⁱ^fⁱ^e^{d ph}^y^sⁱ^cⁱ^aⁿ^.^Medi^car^e^w^o^u^l^{d pay}
^u^{ed May}²⁹^,^{2002, cl}^ari^fⁱ^e^{d t}^h^at^f^o^{r th}^{e s}^e^rv^ices^uⁿ^d^{er th}^{e ph}^y^s^ician^f^e^e
^e^{dicare ben}^e^fⁱ^ciaries^w^h^{o are blin}^{d or}^sc^he^d^u^le^.
^s^u^ally^im^{paired are eli}^gⁱ^b^l^e^f^o^r
^y^sⁱ^cⁱ^aⁿ^-^p^r^escr^ib^ed^r^e^h^a^b^ilitatioⁿ^se^r^vⁱ^c^e^s
ⁱ^{ki/CRS-RL32005}^approv^{ed h}^eal^t^h^care^prof^es^sⁱ^on^al^s^on^sa^m^e^b^a^{sis a}^s^b^e^ne^fi^cⁱ^a^r^ie^{s w}^{ith o}^t^he^r
^g/w^dⁱ^{cal co}ⁿ^d^itioⁿ^s^t^h^{at r}^e^su^{lt in}^r^e^d^u^ced
^s^.or^y^sⁱ^c^a^l^func^tⁱ^oⁿⁱ^ng.
^le^ak
^a^{rriage couns}^{eling a}ⁿ^{d fam}^ily^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^448.^S^t^ar^tⁱ^ng^J^a^nua^r^y¹^,^2004,^N^o^provⁱ^sⁱ^oⁿ^.

^://wiki^{Medicare w}^ill^cov^e^{r s}^e^rv^ices^Medicare^w^o^u^l^d^cov^e^{r m}^a^rriag^{e an}^{d f}^a^m^ily
^h^ttpⁿ^{ected w}^ith^th^{e treatm}^e^nt^o^f^{a m}^eⁿ^t^al,^th^erapis^{t s}^e^rv^ices^an^{d m}^eⁿ^t^{al h}^ealth
^y^c^h^oⁿ^e^u^r^o^{tic, o}^r^p^e^r^s^oⁿ^ality^dⁱ^so^r^d^er^o^f^co^uns^{elor s}^e^rv^ices^f^o^{r th}^{e diag}ⁿ^o^sⁱ^s^an^d
ⁱⁿ^dⁱ^vⁱ^d^u^{al w}^h^o^{is n}^o^{t an}ⁱⁿ^p^a^tien^t^o^f^a^tr^eatm^eⁿ^t^o^f^m^eⁿ^t^{al illn}^{ess. P}^a^y^m^en^t
^s^p^{ital at th}^{e tim}^e^s^u^ch^ex^pen^s^es^are^am^ouⁿ^t^s^w^o^u^l^{d be 80%}^of^t^h^e^l^e^s^s^e^{r of}^t^h^e
^rr^e^d^{. T}^h^{e term}^“^t^reatm^eⁿ^t^{” does}ⁿ^o^t^actu^a^l^ch^arg^e^{or 75% of}^th^e^am^ouⁿ^t^paid^to
^d^{e b}^r^ief^o^f^fⁱ^{ce v}ⁱ^{sits f}^o^r^th^{e so}^le^a^p^s^y^c^ho^l^o^gi^st^.^T^h^e^s^e^s^e^r^vⁱ^c^e^s^w^o^ul^d^b^e
^r^p^o^s^e^o^f^m^oⁿⁱ^t^o^rⁱ^{ng o}^r^c^h^a^ngi^{ng d}^r^ug^su^b^j^{ect to}^assigⁿ^m^en^{t. Ru}^r^a^{l h}^ealth^clin^ics,
^cription^s^u^s^{ed in}^th^{e treatm}^eⁿ^t^of^s^u^ch^f^e^d^e^r^a^lly^q^u^alif^ied^h^ealth^c^eⁿ^t^er^{s, an}^d
^r^d^er^{s o}^r^p^a^r^{tial h}^o^sp^italizatioⁿ^ser^v^ices^h^o^s^pⁱ^c^e^prog^ram^s^w^o^u^l^{d be au}^t^h^ori^{zed t}^o
^o^{t dire}^c^t^l^y^prov^{ided by}^th^e^prov^{ide s}^u^ch^s^e^rv^ices^{. Marriag}^e^aⁿ^d
^y^s^ician^.^Fam^ily^co^uⁿ^s^elin^g^ser^v^ice^s^f^a^m^ily^th^er^apⁱ^s^{ts w}^o^u^l^d^b^e^au^th^o^r^ized^to
^m^e^m^b^ers^of^th^{e h}^o^u^s^eh^{old are}^d^e^v^e^lo^p^p^o^s^{t h}^o^sp^{ital d}ⁱ^sch^a^r^g^{e p}^l^an^{s f}^o^r
^e^red^on^l^y^w^h^{ere t}^h^{e pri}^m^ary^pu^rpos^e^of^p^a^tien^t^s.
^ch^couⁿ^s^eliⁿ^g^is^th^{e treatm}^eⁿ^t^of^th^e
^tien^t^’^s^coⁿ^d^itioⁿ^.

CRS-67
^Provisⁱ^{on and Current L}^a^w^H^{.R. 1 as}^enacted^S^{. 1 (as}^pas^s^e^{d the Sena}^te)^H^{.R. 1 (as}^pas^s^{ed the Hous}^e)
^s^ervices^provⁱ^d^e^d^by^S^ecti^oⁿ^630.^T^h^{e b}^{ill p}^r^o^v^id^{es a 5}^-^y^ear^S^ecti^oⁿ^450C^.^A^{ll Med}ⁱ^car^{e P}^a^r^t^B^item^s^N^o^provⁱ^sⁱ^oⁿ^.
ⁿ^ho^spit^a^l^{s a}^{nd clinics}^{. Medicare}^ex^p^aⁿ^s^ioⁿ^o^f^th^{e item}^s^aⁿ^d^ser^v^ices^an^d^ser^v^{ices p}^r^o^v^id^ed^b^y^h^o^sp^itals,^sk^illed
^e^rs^s^p^ecifⁱ^{c P}^a^{rt B}^s^e^rv^ices^prov^ided^by^c^o^{vered u}ⁿ^d^{er Medicare P}^a^{rt B}^w^h^enⁿ^u^r^sin^g^f^{acilities, o}^r^am^b^u^lato^r^y^car^e
^o^sp^{ital, sk}^illedⁿ^u^r^sin^g^f^aci^lity^{, o}^r^f^u^rⁿ^ish^e^dⁱⁿ^Iⁿ^dⁱ^an^h^o^sp^{itals an}^d^clin^{ics o}^p^e^r^a^ted^b^y^th^{e I}ⁿ^dⁱ^an^Health
^bu^la^t^o^ry^{care clin}^{ic (w}^h^e^th^{er prov}^ider-^am^b^u^lato^r^y^car^{e clin}^ics.^T^h^{e b}^{ill ap}^p^{lies to}^Serv^{ice or by}^an^In^dian^{tribe or}
^e^{d or f}^r^ee^st^aⁿ^diⁿ^g⁾^t^h^atⁱ^s^operat^e^{d by}ⁱ^t^e^m^s^an^{d s}^e^rvⁱ^ces^f^u^rnⁱ^s^h^e^{d on}^{or af}^t^e^r^org^aⁿⁱ^z^a^tⁱ^oⁿ^begⁱⁿⁿⁱⁿ^g^O^c^t^{ober 1, 2004}
^dian^Health^Serv^{ice or by}^an^In^dian^Jan^u^a^ry^{1, 2005.}^w^o^u^l^{d be pai}^d^.
^{e o}^r^tr^ib^{al o}^r^g^aⁿⁱ^zatioⁿ^.
^s^c^ul^{ar s}^{creening tes}^t^s^.^S^ecti^oⁿ^612.^Medⁱ^car^e^w^ill^co^v^e^r^S^ecti^oⁿ^450D^.^Begⁱⁿⁿⁱⁿ^g^Jan^u^a^ry^{1, 2005,}^S^ecti^oⁿ^612.^{Medicare cov}^e^rag^e^of
^e^rs^{a n}^u^m^{ber of}^prev^en^tiv^e^cardi^ov^as^cu^l^a^r^sc^r^e^eⁿⁱⁿ^g^bl^{ood t}^e^s^t^s^{Medicare w}^o^u^l^d^cov^e^{r cardiov}^as^cu^lar^ch^o^l^ester^o^{l an}^d^b^l^o^o^d^lip^id^scr^eenⁱⁿ^g
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