Protecting Access through Competitive-pricing Transition Act of 2015 or the PACT Act of 2015
This bill amends titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act to modify provisions relating to payment for durable medical equipment (DME) under the Medicare and Medicaid programs. (DME includes certain medically necessary equipment such as walkers, wheelchairs, and hospital beds.)
With respect to DME furnished in areas that are not competitive acquisition areas, current regulations require the Centers for Medicare & Medicaid (CMS) to phase in, over a two-year period, Medicare payment adjustments using information from competitive acquisition programs. (Through such programs, payment amounts for each area are determined based on competitive bids submitted by suppliers, rather than according to an established fee schedule.) The bill codifies this requirement and specifies that CMS shall adjust fee schedule amounts to the lesser of: (1) a specified percentage of the regional amount; and (2) the amount that would otherwise be determined according to the fee schedule, with specified adjustments.
In determining Medicare payment adjustments for areas that are not competitive acquisition areas, CMS shall solicit stakeholder input and take into account several specified factors.
CMS may not accept a bid under the competitive acquisition program unless the bidder: (1) meets applicable state licensure requirements; and (2) has submitted a cash deposit as a bond, as specified by the bill.
CMS must establish a six-year market pricing demonstration project, under which auctions are conducted in eligible areas for the furnishing of market-priced DME items and services. The bill establishes project requirements related to auction design, contract terms, transparency, and monitoring.
[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4185 Introduced in House (IH)]
<DOC>
114th CONGRESS
1st Session
H. R. 4185
To make adjustments, including by amending title XVIII of the Social
Security Act, relating to competitive bidding program and durable
medical equipment under the Medicare program, to amend such title to
establish a DMEPOS market pricing program demonstration project, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 8, 2015
Mr. Tom Price of Georgia (for himself, Mrs. McMorris Rodgers, Mrs.
Blackburn, Ms. Duckworth, Mr. Loebsack, Mr. Ryan of Ohio, Mr. Roe of
Tennessee, Mrs. Noem, Mr. King of New York, Mr. Zinke, Mr. Tipton, Mr.
Blum, Mr. Cramer, Mr. McClintock, Mr. Keating, Mr. Duncan of Tennessee,
Mrs. Ellmers of North Carolina, Mr. Harper, and Mr. Austin Scott of
Georgia) introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committee on
Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To make adjustments, including by amending title XVIII of the Social
Security Act, relating to competitive bidding program and durable
medical equipment under the Medicare program, to amend such title to
establish a DMEPOS market pricing program demonstration project, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Access through
Competitive-pricing Transition Act of 2015'' or as the ``PACT Act of
2015''.
SEC. 2. REVISION OF PAYMENTS FOR DURABLE MEDICAL EQUIPMENT UNDER THE
MEDICARE PROGRAM.
(a) Transition to Implementation of Fee Schedule Payment
Adjustments Using Information From Competitive Bidding Programs.--
Section 1834(a)(1) of the Social Security Act (42 U.S.C. 1395m(a)(1))
is amended by adding at the end the following new subparagraph:
``(J) Transition to implementation of payment
adjustments using information from competitive bidding
programs.--
``(i) In general.--In implementing
subparagraph (F) and paragraphs (1) and (2) of
section 414.210(g) of title 42, Code of Federal
Regulations, with respect to items and services
furnished on or after January 1, 2016, and
before January 1, 2019, the fee schedule amount
that would otherwise be determined for each
area under this section shall be adjusted to
the lesser of--
``(I) 130 percent of the regional
price determined under clause (i) of
such paragraph (1) for the State in
which such area is located (or, in the
case of an area located within the
District of Columbia, for such
District); or
``(II) the fee schedule amount that
would otherwise be determined for such
area under this section (without the
application of subsection (a)(1)(F) of
such section) on January 1, 2015,
updated by the covered item update
described in paragraph (14)(L) for the
year in which the items and services to
which such fee schedule applies are
furnished.
``(ii) Phase-in.--The adjustment described
in clause (i) shall be implemented over a two-
year period and in a manner that phases in such
adjustment in equal increments in each year of
such two-year period, with such adjustment
being fully implemented with respect to items
and services furnished in 2017.''.
(b) Bid Ceiling for Competitive Acquisition for Durable Medical
Equipment Under the Medicare Program.--Section 1847(b)(5) of the Social
Security Act (42 U.S.C. 1395w-3(b)(5)) is amended--
(1) in subparagraph (A)--
(A) by inserting ``, subject to subparagraph (E),''
after ``subsection (a)(2)''; and
(B) by inserting ``, subject to subparagraph (E),''
after ``Based on such bids''; and
(2) by adding at the end the following new subparagraph:
``(E) Bid ceiling for durable medical equipment.--
``(i) In general.--Payment under this
section for applicable covered items may not
exceed the amount that would otherwise be paid
for such items under section 1834 (without the
application of subsection (a)(1)(F) of such
section) on January 1, 2015, updated by the
covered item update described in section
1834(a)(14)(L) for the year in which such
covered item is furnished.
``(ii) Application to new covered items.--
The Secretary shall establish a process for
purposes of applying clause (i) with respect to
applicable covered items for which no amount
would otherwise be paid under section 1834
(without the application of subsection
(a)(1)(F) of such section) on January 1, 2015.
``(iii) Applicable covered items defined.--
For purposes of this subparagraph, the term
`applicable covered items' means covered items
(as defined in section 1834(a)(13)) for which
payment would otherwise be made under section
1834(a) that are furnished with respect to
competitive bid contracts that begin on or
after January 1, 2017.''.
(c) Requirement in Determining Adjustments Using Information From
Competitive Bidding Programs.--Section 1834(a)(1)(G) of the Social
Security Act (42 U.S.C. 1395m(a)(1)(G)) is amended by adding at the end
the following new sentence: ``In the case of items and services
furnished on or after January 1, 2019, in making any adjustments under
clause (ii) or (iii) of subparagraph (F), the Secretary shall take into
account the average travel distance and cost associated with furnishing
items and services in a competitive acquisition area, the average
volume of items and services furnished by providers in such an area,
the clearing price of items and services, and the number of providers
in competitive acquisition areas compared to the number of providers in
noncompetitive acquisition areas. In implementing the preceding
sentence, the Secretary shall solicit and take into account stakeholder
input.''.
SEC. 3. ESTABLISHMENT OF DMEPOS MARKET PRICING PROGRAM DEMONSTRATION
PROJECT.
(a) In General.--Part B of title XVIII of the Social Security Act
is amended by inserting after section 1847B (42 U.S.C. 1395w-3b) the
following new section:
``dmepos market pricing program demonstration project
``Sec. 1847C.
``(a) Establishment.--
``(1) In general.--The Secretary shall establish and
implement a six-year market pricing program demonstration
project (in this section referred to as the `demonstration
project') under which three auctions are conducted in eligible
auction areas (as defined in paragraph (3)) throughout the
United States for the furnishing of market-priced items and
services (as defined in subsection (b)) for which payment is
made under this part. Each such auction shall, in accordance
with subsection (c)(3)(D)(ii)(IV), be with respect to a
contract period of two years for each lead product.
``(2) Implementation timeline.--The demonstration project
shall be carried out in accordance with the following timeline:
``(A) Contracting with auction expert and market
monitor.--Not later than 3 months after the date of the
enactment of this section, the Secretary shall contract
with the auction expert contracted with under
subsection (f)(1) (hereinafter referred to as the
`auction expert') and market monitor contracted with
under such subsection (hereinafter referred to as the
`market monitor').
``(B) Initial design of auction.--Not later than 5
months after such date of enactment, the development of
the initial auction design under subsection
(c)(2)(B)(i) shall be completed.
``(C) Auction design conference.--Not later than 6
months after such date of enactment, the Secretary
shall hold the auction design conference under
subsection (c)(2)(C).
``(D) Finalizing auction details.--Not later than
7\1/2\ months after such date of enactment, the
Secretary shall promulgate, through the expedited
rulemaking process under subsection (c)(2)(D), the
procedures to be used for auctions under the
demonstration project.
``(E) Conduct of first auction.--Not later than 11
months after such date of enactment, the first auction
under the demonstration project shall occur under
subsection (c)(3).
``(F) Awarding contracts under first auction.--Not
later than 1 year after such date of enactment,
contracts under such first auction shall be awarded.
``(3) Eligible auction areas.--
``(A) Definition.--
``(i) In general.--In this section, subject
to clause (ii), the term `eligible auction
area' means, with respect to an auction under
this section, a county, aggregation of
counties, or part of one or more counties
specified by the Secretary for purposes of such
auction, in accordance with this paragraph.
``(ii) Special rule for diabetic
supplies.--In applying this section with
respect to the product category described in
subsection (b)(11), the term `eligible auction
area' means, with respect to an auction under
this section, a State specified by the
Secretary for purposes of such auction, in
accordance with subparagraph (B)(iii).
``(B) Specification of eligible auction areas.--For
purposes of this section, the Secretary shall specify
eligible auction areas in accordance with the
following:
``(i) Market areas must reflect economic
interdependency.--The Secretary shall choose
counties, aggregations of counties, or parts of
counties in such a manner as to provide for
auction areas that form economically
interdependent areas (as reflected in standard
econometric market models). For purposes of
specifying eligible auction areas in accordance
with the preceding sentence, the Secretary may
subdivide a large county to take into account
population and geographic size.
``(ii) Round 2 recompete competitive
bidding areas.--The Secretary shall specify at
least 10 eligible auction areas that
constituted Round 2 Recompete competitive
bidding areas under section 1847. To the extent
possible, areas selected for the demonstration
project should represent a variety of economic
markets (as reflected in standard econometric
market models).
``(iii) Mail order diabetic supplies.--For
purposes of subparagraph (A)(ii), with respect
to the product category described in subsection
(b)(11), the Secretary shall specify two States
as eligible auction areas for mail order
diabetic supplies. Such two States, combined,
shall represent at least 7 percent of the total
population of individuals who are either
entitled to benefits under part A or enrolled
under part B (as determined based upon the most
recent available data).
``(4) Application of certain policies applicable to
competitive acquisition programs.--The following provisions of
subsection (a)(1) of section 1847 shall apply to the
demonstration project in the same manner as such provisions
apply to competitive acquisition programs under such section
except as otherwise provided:
``(A) Subparagraph (C) (relating to waiver of
certain provisions).
``(B) Subparagraph (E) (relating to verification by
OIG), except that the assessment shall be of market
pricing and subsequent pricing determinations that are
the basis for auction prices and single payment amounts
for items and services in eligible auction areas and
shall be conducted in the first two years of the
demonstration project and may continue in subsequent
years of the project.
``(C) Subparagraph (F) (relating to feedback on
missing financial documentation), except that any
reference to a round of a program is deemed a reference
to a year of the demonstration project.
``(b) Market-Priced Items and Services Defined.--In this section,
the term `market-priced items and services' means items and services in
each of the following categories (each of which in this section
referred to as a `product category'):
``(1) Oxygen supplies and equipment.
``(2) Standard power wheelchairs, power scooters, and
related accessories.
``(3) Manual wheelchairs.
``(4) Enteral nutrients, equipment, and supplies.
``(5) Continuous positive airway pressure devices,
respiratory assistive devices, and related supplies.
``(6) Hospital beds and related accessories.
``(7) Walkers and related accessories.
``(8) Support services (Group 2 mattresses and overlays).
``(9) Negative pressure wound therapy pumps and related
supplies and accessories.
``(10) Off-the-shelf orthotics described in subparagraph
(C) of section 1847(a)(2) to the extent they are included
pursuant to such subparagraph in items and services described
under such section and included in a competitive bidding
program in a competitive acquisition area under section
1847(a).
``(11) Mail order diabetic supplies.
``(12) Other items and services (other than those items and
services specified in paragraph (2)) that could have been
subject to participation in competitive acquisition programs
under section 1847(a)(1).
``(c) Demonstration Pricing Project Requirements.--
``(1) In general.--The Secretary shall establish, through
the process described in paragraph (2), an auction design for
each auction that meets the requirements of paragraph (3), and
shall ensure that the first auction under the demonstration
project will be conducted for all eligible auction areas
specified under subsection (a)(3) not later than the date
specified in subsection (a)(2)(E).
``(2) Auction design process; stakeholder input.--
``(A) Transparent process required.--In
establishing the auction design described in paragraph
(1), the Secretary shall utilize an open and
transparent process that involves all eligible
participants described in subparagraph (C)(ii),
including through the auction design conference and
other outreach efforts.
``(B) Initial auction design.--The auction expert
shall, with respect to an auction and consistent with
subsection (a)(2)(B), develop an auction design
(referred to in this section as the `initial auction
design') that shall propose for such auction eligible
auction areas, lead products for each product category,
weights to be assigned to products under paragraph
(3)(B)(iv), and proposed rules for the conduct of the
auction.
``(C) Auction design conference.--
``(i) In general.--The Secretary shall,
consistent with subsection (a)(2)(C), convene a
design conference (in this paragraph referred
to as the `design conference') for the auction
process for each auction under this section.
The auction expert shall chair the conference
and the market monitor shall participate in the
conference (including as described in clause
(v)).
``(ii) Participants.--The participants at
the design conference shall include at least
the following:
``(I) Manufacturers, suppliers and
trade associations of dmepos.--
Representatives of manufacturers,
suppliers, and trade associations of
market-priced items and services.
``(II) Beneficiaries.--
Representatives of individuals enrolled
under this part.
``(III) CMS.--The Administrator of
the Centers for Medicare & Medicaid
Services and other appropriate Federal
personnel.
``(iii) Purpose of conference.--The purpose
of the design conference shall be to review the
initial auction design for the establishment of
an efficient auction consistent with best
practices and actuarial science and to provide
stakeholders the opportunity to provide
feedback on the initial auction design.
``(iv) Auction expert responsibilities at
conference.--With respect to the design
conference, the auction expert shall--
``(I) provide a demonstration of
the initial auction design;
``(II) lead a mock auction based
upon such initial auction design in
which the attendees will participate
and offer comments and suggestions for
improvement;
``(III) invite input from suppliers
as to the relationship between, with
respect to a product category, the lead
product in such product category and
the value of other products in the same
product category as such lead product
(and may establish working committees
on major issues related to such
relationship); and
``(IV) invite input from small
suppliers as to the ways in which such
initial auction design can be improved
to ensure that small suppliers have the
opportunity to participate in the
auction.
``(v) Market monitor responsibilities at
conference.--With respect to the design
conference, the market monitor shall provide a
presentation on the responsibilities of the
market monitor throughout the year and comment
on key aspects of the initial auction design
and their purpose.
``(vi) Internet accessibility of
conference.--The design conference shall be
recorded and made available on an Internet Web
site (through simultaneous Web cast or
otherwise).
``(D) Auction design proposed through expedited
rulemaking.--
``(i) Submission to secretary.--The auction
expert shall, with respect to an auction and in
accordance with the timeline described in
subsection (a)(2), submit to the Secretary an
auction design for the auction (referred to in
this section as the `revised auction design')
that takes into account the feedback on the
initial auction design provided at the auction
conference for such auction.
``(ii) Publication and proposal.--Upon
receiving the submission of the revised auction
design for an auction by the auction expert
pursuant to clause (i), the Secretary shall--
``(I) make such modifications to
such revised auction design as are
necessary to ensure that the such
auction design meets the requirements
described in clause (viii);
``(II) make such other
modifications to such revised auction
design as the Secretary determines
appropriate; and
``(III) publish and propose a rule
for implementing such auction design
for such auction, as modified pursuant
to subclauses (I) and (II), through an
expedited rulemaking process.
``(iii) Submission of comments to auction
expert and market monitor.--The Secretary shall
submit comments received on an auction design
published under clause (ii)(III) to the auction
expert and the market monitor to consider for
modification of such auction design.
``(iv) Review of comments by auction expert
and market monitor.--The market monitor and
auction expert shall review such comments and,
within one month of the receipt of such
comments pursuant to clause (iii), shall each
provide public comment on such comments.
``(v) Determination of changes to auction
design.--Taking into consideration the comments
submitted to the auction expert and market
monitor pursuant to clause (iii), such auction
expert shall determine if any changes should be
made in the auction design published under
clause (ii)(III) for an auction in response to
such comments. If the auction expert determines
that changes should be made in such design in
response to such comments, the auction expert
shall submit to the Secretary an auction design
(referred to in this section as the `further
revised auction design') for such auction.
``(vi) Adoption and publication of auction
design.--The Secretary shall adopt as the
auction design to be used for purposes of an
auction conducted under the demonstration
project either--
``(I) the further revised auction
design for such auction, modified as
necessary by the Secretary to ensure
that such auction design meets the
requirements described in clause (viii)
(and, if such design is so established,
shall publish by rule such design); or
``(II) the auction design published
under clause (ii)(III) for such auction
(and, if such design is so selected
despite a further revised auction
design having been submitted to the
Secretary under clause (v), shall
notify the auction expert and market
monitor of, and publish in the Federal
Register, the reasons for electing to
establish the revised auction design
instead of the further revised auction
design).
``(vii) Expedited rulemaking process
defined.--In this subparagraph, the term
`expedited rulemaking process' means a process
of publication of the revised auction design
(and, as applicable, the further revised
auction design) and solicitation of public
comments on such design. The provisions of
section 1871(b)(1) shall not apply to such
process.
``(viii) Requirements described.--For
purposes of this paragraph, the requirements
described in this clause are requirements that,
with respect to an auction design--
``(I) the rates of payment under
such auction design do not result in a
diminution of access to market-priced
items and services for individuals
entitled to benefits under part A or
enrolled under part B in the eligible
auction areas in which the
demonstration project is conducted or
of the quality of such items and
services that are furnished to such
individuals in such areas;
``(II) the lead product proposed in
such auction design for each product
category has been selected to be so
proposed based upon the historical
price and utilization of the product
under this part; and
``(III) the weights assigned under
paragraph (3)(B)(iv) to products that
are not lead products take into
consideration input provided on such
weights by providers at the design
conference for the applicable auction.
``(3) Conduct of auction.--
``(A) In general.--The market monitor shall,
consistent with subsection (a)(2)(E) and in accordance
with the auction design adopted under paragraph (2)(D),
conduct auctions (each in this section referred to as a
`market-priced auction') among potential bidders that
are identified as eligible bidders under subparagraph
(B)(ii) by carrying out the activities described in
subparagraph (B) and subparagraph (C)(i) and such other
activities as specified by the Secretary.
``(B) Market monitor actions before auction date.--
In conducting a market-priced auction, the market
monitor shall (subject, as appropriate, to review by
the Secretary), on a date that is prior to the date of
such auction, carry out the following:
``(i) Detail auction rules.--Detail auction
rules and processes that are consistent with
the auction design adopted under paragraph
(2)(D). The rules and processes described in
the preceding sentence shall, with respect to
an auction, include the following:
``(I) The requirements that an
entity must meet in order to be
considered an eligible bidder under
subparagraph (E)(ii) for purposes of
such auction.
``(II) Processes through which it
will be determined for such auction, as
a function of bids submitted by
eligible bidders at such auction, the
eligible bidders for lead products that
are to be awarded contracts under this
section and the prices for all products
that are in the same product category
as such lead product.
``(III) Performance obligations of
such eligible bidders that are awarded
such contracts, guarantee requirements
applied under the demonstration
program, and penalties that will apply
in the case of such an eligible bidder
that is awarded such a contract and
that fails satisfy the terms of such
contract or such requirements.
``(ii) Identify eligible bidders.--Review
all applications for potential bidders seeking
to be eligible bidders in the auction and
identify, for purposes of such auction, the
eligible bidders (as defined in subparagraph
(E)(ii)) by eligible auction area.
``(iii) Specify target capacity for
eligible bidders.--Specify, with respect to
each eligible bidder for such auction, a target
percentage for a product category that
represents the percentage of the projected
market for such product in an eligible auction
area and contract period that it is estimated
that the eligible bidder would have the
capacity to serve. Each such target percentage
shall be determined as follows:
``(I) In the case of an eligible
bidder with historic capacity in an
auction area with respect to the lead
product in such product category, the
target percentage shall be determined
based on the historic capacity for such
bidder for such product.
``(II) In the case of an eligible
bidder that has no historic capacity in
an auction area with respect to such
lead product, the target percentage
shall be 1 percent of the projected
market for such product.
``(iv) Set product weights.--
``(I) In general.--Assign to each
product (categorized by the health care
common procedure coding system code)
that is in the same product category as
a lead product a weight that is
expressed as a number.
``(II) Weight amount for lead
product.--With respect to a product
category described in clause (i), the
lead product in such product category
shall, for purposes of such clause, be
assigned a weight of 1.0.
``(C) Auction.--In conducting a market-priced
auction, the market monitor or Secretary (as
applicable) shall, during such auction, carry out the
following:
``(i) Establishment of clearing price.--The
market monitor (subject, as appropriate, to
review by the Secretary) shall establish a
clearing price for each lead product selected
under subparagraph (A) for each eligible area.
Such clearing price shall, subject to clause
(iii) and with respect to a lead product, be
equal to the price (referred to in this clause
as the `target price') specified in the bid
submitted by an eligible bidder with respect to
such product and such area that, in conjunction
with all bids submitted by eligible bidders for
such product and such area that specify prices
that are less than such target price, will
provide for the total projected volume
determined by the Secretary to be needed to
fulfill demand for such product under this
title in such area (as determined through the
use of target percentages specified under
subparagraph (B)(iii)).
``(ii) Awarding of contracts.--
``(I) In general.--The Secretary
shall award, pursuant to an auction for
a contract period and eligible auction
area, a contract for products in a
product category to each eligible
bidder whose bid submitted for the lead
product in such product category for
such area is at or below the clearing
price established for such lead product
and area pursuant to clause (i).
``(II) Mandatory acceptance of
contract.--An eligible bidder that has
been awarded a contract under subclause
(I) based on a bid described in such
subclause by such bidder shall be
treated, upon the conclusion of the
auction with respect to which such
contract is awarded, as having agreed
to and accepted the contract, including
the requirements described in
subclauses (III) and (IV), based on the
price of items included in such bid.
``(III) Volume of products under
contract.--A contract awarded to an
eligible bidder under subclause (I)
with respect to market-priced items and
services in a product category for an
eligible auction area and contract
period shall include a requirement that
such bidder will furnish such items and
services in sufficient quantities to
meet the needs of individuals for such
items and services in the eligible
auction area during such period. An
eligible bidder shall not satisfy the
sufficient quantities requirement
described in the preceding sentence
unless the bidder furnishes the
percentage of the market for such item
or service in such area that is equal
to the target percentage specified for
such bidder for the lead product for
such category under subparagraph
(B)(iii) or, if lesser, the percentage
of such market in such area and period
that seeks such item or service from
such bidder.
``(IV) Duration of contract.--A
contract awarded under subclause (I)
shall be valid for 2 years.
``(iii) Rule if total bids inadequate to
fulfill demand.--In the case that the capacity
represented by all bids submitted by eligible
bidders for a lead product for an eligible area
does not provide for the total projected volume
determined by the Secretary to be needed to
fulfill demand for such product under this
title in such area, the Secretary shall--
``(I) establish a clearing price
for such lead product and area that is
equal to the initial bid price
established at such auction by the
market monitor for such product and
area and, pursuant to clause (ii)(I),
award contracts to all eligible bidders
for such lead product and area whose
bid submitted for such product and area
is at or below such price;
``(II) announce the remaining
aggregate supply needed for such
product and area in order to fulfill
demand for such product under this
title in such area; and
``(III) conduct among eligible
bidders an additional auction round, in
such manner as is specified by the
Secretary, to fulfill such remaining
supply.
``(D) Announcement of information after auction.--
Immediately after a market-priced auction is completed,
the Secretary shall publish on the Internet Web site of
the Centers for Medicare & Medicaid Services and in the
Federal Register the following:
``(i) A list of eligible bidders awarded
contracts under such auction.
``(ii) The price determined at such auction
for each product in a product category that is
subject to the auction.
``(E) Bid-related terms defined.--For purposes of
this section:
``(i) The term `bid' means, with respect to
a lead product in a product category that is
subject to a market-priced auction under the
demonstration project, an offer made at the
auction by an eligible bidder to furnish a lead
product in a volume specified in such bid for a
particular price and time period for one or
more eligible auction areas.
``(ii) The term `eligible bidder' means,
with respect to an auction and an eligible
auction area and lead product, a supplier
that--
``(I) applies to the Secretary to
participate in such auction with
respect to such area and lead product;
``(II) is identified by the
Secretary as a supplier of a market-
priced item or service that is the
subject of a market-priced auction in
an eligible auction area;
``(III) would meet the licensure
and performance guarantee requirements
under section 1847(a)(1)(G) if such
requirements applied for purposes of
auctions conducted under the
demonstration project in the same
manner that they apply with respect to
such section; and
``(IV) meets such other licensure,
bid-bond, and other requirements as the
Secretary may specify.
``(4) Monitoring access and quality.--
``(A) In general.--The Secretary, in consultation
with the market monitor, shall monitor the performance
of eligible bidders that are awarded contracts under
paragraph (3)(C)(ii) and the effects of the
demonstration project to ensure compliance with the
requirements of this section, including the
requirements and obligations established in the auction
design adopted under paragraph (2)(D)(v).
``(B) Provide transparency of information.--The
market monitor shall make publicly available the number
of suppliers providing market-priced items and services
in an eligible auction area during each year of the
operation of the demonstration project.
``(C) Enforcement.--If the Secretary, after
consultation with the market monitor, determines that
there has been a material failure of an eligible bidder
that has been awarded a contract under paragraph
(3)(C)(ii) to comply with such requirements, the
Secretary, after consultation with the market monitor,
shall implement, consistent with subparagraph (D),
enforcement measures, which may include the termination
of a contract awarded under paragraph (3)(C)(ii).
``(D) Enforcement measures.--
``(i) Warning letters and opportunity for
corrective action.--The Secretary shall provide
for the following before terminating, pursuant
to subparagraph (B), a contract awarded under
paragraph (3)(C)(ii):
``(I) Warning letter.--The
Secretary shall issue a formal warning
letter at least 90 days before the date
on which the Secretary terminates such
contract. The warning letter shall
describe the reason (or reasons) for
the termination.
``(II) Opportunity for corrective
action.--The Secretary shall provide an
opportunity for the supplier to take
corrective action to come into
compliance with the contract and avoid
termination of the contract.
``(ii) Additional consequences of
termination.--In the case of a termination of
such a contract with an eligible bidder, the
Secretary may require forfeiture of amounts
submitted as a bid and performance bond
pursuant to section 1847(a)(1)(G)(ii).
``(d) Application of Competitive Acquisition Program Provisions.--
In implementing the demonstration project under this section, the
provisions of section 1847(b) shall be applied as follows:
``(1) Paragraph (3) shall apply, except that, for purposes
of contracts awarded under the demonstration project,
subparagraph (B) of such paragraph shall be applied by
substituting `2 years' for `3 years'.
``(2) Paragraph (4) shall apply.
``(3) Paragraph (5) shall apply, except that--
``(A) the reference in subparagraph (A) of such
paragraph to subsection (a)(2) is deemed a reference to
subsection (b) of this section; and
``(B) the reference in subparagraph (B)(i) of such
paragraph to subparagraph (A) is deemed a reference to
subsection (a) of this section.
``(4) Paragraph (7) shall not apply.
``(5) Paragraph (8) shall apply.
``(6) Paragraph (9) shall apply, except that such paragraph
shall be applied as if a reference to a bidding program
includes a reference to the demonstration project.
``(7) Paragraph (10) shall apply, except that such
paragraph shall be applied as if a reference to a competitive
acquisition program includes a reference to the demonstration
project.
``(8) Paragraph (11) shall not apply, except that--
``(A) the pendency of any claim for review under
this section shall not delay any auction conducted
pursuant to this section; and
``(B) there shall be no administrative or judicial
review of any claim to enjoin the operation of a
market-priced auction conducted during the first round
of the demonstration project.
``(e) Transparency Requirements for Demonstration Project.--In
implementing the demonstration project, the Secretary shall provide for
the publication, on an Internet Web site operated by the Secretary, of
the following information with respect to an auction:
``(1) The qualifications necessary to be an eligible
bidder.
``(2) The standards developed for purposes of subsection
(c)(2)(B)(ii)(II).
``(3) The calculation of the total market capacity of an
eligible auction area for purposes of specifying the target
percentage under subsection (c)(3)(B)(iii) for eligible bidders
in the auction for such area.
``(4) The process for soliciting and accepting bids for
purposes of subsection (c)(3)(D)(ii).
``(5) For purposes of such subsection--
``(A) the number of eligible bidders at the
auction;
``(B) the number of eligible bidders at the auction
that were awarded a contract under such subsection at
the auction; and
``(C) with respect to prospective bidders at the
auction that were determined by the Secretary not to be
eligible bidders--
``(i) the specific reasons for such
determination; and
``(ii) a means and process by which such
prospective bidders may appeal, or otherwise
obtain a review of, such determination.
``(6) The calculation of and compliance with the
requirement of section 1847(b)(6)(D), as made applicable to the
demonstration project by subsection (d).
``(f) Reliance on Auction Expert and Market Monitor in Establishing
and Operating Market-Pricing Demonstration Project; Advisory Committee
Report and Monitoring.--
``(1) Auction expert and market monitor.--
``(A) In general.--The Secretary shall, consistent
with subsection (a)(2)(A) and through the Office of the
Assistant Secretary for Planning and Evaluation, enter
into a contract with an individual to serve as the
auction expert and a contract with an individual to
serve as a market monitor to assist in the design,
development, implementation and functioning of the
auctions to be conducted pursuant to subsection (c).
Under each such contract, the auction expert and market
monitor shall report and be accountable to the
Secretary in the manner described in this section.
``(B) Selection of auction expert and market
monitor; term; access to information.--
``(i) Competitive process.--The selection
of the individual to serve as the auction
expert and as a market monitor under
subparagraph (A) shall be undertaken through a
competitive process.
``(ii) Disqualifications.--An individual
may not be selected as the auction expert if
such individual--
``(I) is a current or former
employee of the Centers for Medicare &
Medicaid Services;
``(II) is a current or former
contractor for the Centers for Medicare
& Medicaid Services that participated
in the implementation of the
competitive acquisition program under
section 1847(a);
``(III) does not have significant
experience in implementing auctions of
similar complexity in Government
programs; or
``(IV) does not have appropriate
educational credentials.
``(iii) Access to information.--The
Secretary shall make available to the auction
expert and the market monitor all applicable
information (including confidential
information) on the relevant markets throughout
the duration of the demonstration project.
``(iv) Term of contract.--The contract for
the auction expert and for the market monitor
under this paragraph shall be for a period of 6
years.
``(2) Reports.--
``(A) Semiannual reports to secretary.--The market
monitor shall provide to the Secretary semiannual
reports in the initial two years of the demonstration
project and annual reports in each subsequent year of
the demonstration project on the development and
operations of the demonstration project. In each
report, the market monitor shall--
``(i) identify potential problems with the
demonstration project; and
``(ii) recommend solutions to potential
problems so identified.
``(B) Annual report.--The market monitor shall
submit to the Committees on Ways and Means and Energy
and Commerce of the House of Representatives and the
Committee on Finance of the Senate an annual report on
the operation and functioning of the demonstration
project. Each such report shall include information
on--
``(i) potential problems with the project;
``(ii) recommended solutions to problems
identified pursuant to clause (i);
``(iii) the appropriateness of HCPCS codes
selected for auctions;
``(iv) an evaluation on the ability of
individuals eligible for benefits under this
part to obtain items and services subject to
the demonstration project;
``(v) any adverse health effects resulting
from implementation of the project;
``(vi) any material deterioration in the
quality of items and services provided under
the project;
``(vii) the costs of any preventable or
prolonged hospitalizations due to lack of
timely access to market-priced items and
services; and
``(viii) any negative business consequences
to the supplier of any market-priced items and
services occurring as a result of errors made
in the conduct of the project.''.
(b) Licensure Requirements and Financial Assurances Under
Competitive Bidding.--Section 1847(a)(1) of the Social Security Act (42
U.S.C. 1395w-3(a)(1)) is amended by adding at the end the following new
subparagraphs:
``(G) Requiring state licensure and performance
guarantees for bidding entities.--With respect to
rounds of competitions beginning under this subsection
on or after the date of enactment of this subparagraph,
the Secretary may not accept a bid from an entity for
an area unless, as of the deadline for bid submission--
``(i) the entity meets applicable State
licensure requirements for such area for all
items in such bid for a product category; and
``(ii) the entity has submitted a cash
deposit as a bid and performance bond in an
amount determined by the Secretary after
consultation with the auction expert, except
that the Secretary may, in the Secretary's sole
discretion, accept a letter of credit from a
financial institution acceptable to the
Secretary in lieu of the cash deposit required
to be submitted under this clause.
``(H) Treatment of bid and performance bonds
submitted.--
``(i) For successful bidders.--The
Secretary shall retain as a performance
guarantee the deposit submitted by a supplier
that is selected at an auction conducted
pursuant to subparagraph (G)(ii) and such
deposit--
``(I) shall be returned to the
entity within 90 days of the date of
completion of the contract; or
``(II) shall be retained by the
Secretary if the contract is terminated
before the expiration of the contract.
``(ii) Unsuccessful bidders.--If a bidding
entity submits a bid that is not accepted for
an area, the bid and performance deposit
submitted for the entity for such area shall be
returned within 90 days of the date of notice
of nonacceptance.''.
(c) Clarification About Individual Self-Adjustment for Off-the-
Shelf Orthotics.--
(1) In general.--Section 1847(a)(2)(C) of the Social
Security Act (42 U.S.C. 1395w-3(a)(2)(C)) is amended--
(A) by inserting ``furnished to an individual''
after ``section 1861(s)(9)'';
(B) by inserting after ``minimal self-adjustment''
the following: ``by that individual (and not by another
person)''; and
(C) by striking ``to fit to the individual'' and
inserting ``to fit to that individual''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to off-the-shelf orthotics (as defined in section
1847(a)(2)(C) of the Social Security Act (42 U.S.C. 1395w-
3(a)(2)(C)), as amended by paragraph (1)) furnished in rounds
of competitive bidding under section 1847 of such Act (42
U.S.C. 1395w-3) initiated on or after such date, as soon as
practicable after the date of the enactment of this Act, as the
Secretary of Health and Human Services determines appropriate.
Such amendments only apply to the demonstration project under
section 1847C of such Act, as added by subsection (a), if the
Secretary implements competitive bidding for such off-the-shelf
orthotics under the competitive bidding program under such
section 1847.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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