Medicare Prescription Drug, Improvement, and Modernization Act—Directed Studies
Section 621 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) directs two distinct Congressional agencies-the Medicare Payment Advisory Commission (MedPAC) and the General Accountability Office (GAO-to conduct three separate studies that will have a significant impact on reimbursement to hospital outpatient departments. Each study was issued a deadline for completion, but the GAO studies are currently past deadline.
Click here for the full text of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
MedPAC Study:
Section 621 (E)
ADJUSTMENT IN PAYMENT RATES FOR OVERHEAD COSTS.
Deadline for completion: July 1, 2005
MEDPAC REPORT ON DRUG APC DESIGN. The Medicare Payment Advisory Commission shall submit to the Secretary, not later than July 1, 2005, a report on adjustment of payment for ambulatory payment classifications for specified covered outpatient drugs to take into account overhead and related expenses, such as pharmacy services and handling costs. Such report shall include:
a description and analysis of the data available with regard to such expenses;
a recommendation as to whether such a payment adjustment should be made; and
if such adjustment should be made, a recommendation regarding the methodology for making such an adjustment.
ADJUSTMENT AUTHORIZED. The Secretary may adjust the weights for ambulatory payment classifications for specified covered outpatient drugs to take into account the recommendations contained in the report submitted under clause (I).
GAO Studies:
Section 621 (D)
ACQUISITION COST SURVEY FOR HOSPITAL OUTPATIENT DRUGS.
Deadline for completion: April 1, 2005
(i) ANNUAL GAO SURVEYS IN 2004 AND 2005.
(I) IN GENERAL.The Comptroller General of the United States shall conduct a survey in each of 2004 and 2005 to determine the hospital acquisition cost for each specified covered outpatient drug. Not later than April 1, 2005, the Comptroller General shall furnish data from such surveys to the Secretary for use in setting the payment rates under subparagraph (A) for 2006.
(II) RECOMMENDATIONS.Upon the completion of such surveys, the Comptroller General shall recommend to the Secretary the frequency and methodology of subsequent surveys to be conducted by the Secretary under clause (ii).
(ii) SUBSEQUENT SECRETARIAL SURVEYS. The Secretary, taking into account such recommendations, shall conduct periodic subsequent surveys to determine the hospital acquisition cost for each specified covered outpatient drug for use in setting the payment rates under subparagraph (A).
(iii) SURVEY REQUIREMENTS.The surveys conducted under clauses (i) and (ii) shall have a large sample of hospitals that is sufficient to generate a statistically significant estimate of the average hospital acquisition cost for each specified covered outpatient drug. With respect to the surveys conducted under clause (i), the Comptroller General shall report to Congress on the justification for the size of the sample used in order to assure the validity of such estimates.
(iv) DIFFERENTIATION IN COST. In conducting surveys under clause (i), the Comptroller General shall determine and report to Congress if there is (and the extent of any) variation in hospital acquisition costs for drugs among hospitals based on the volume of covered OPD services performed by such hospitals or other relevant characteristics of such hospitals (as defined by the Comptroller General).
(v) COMMENT ON PROPOSED RATES. Not later than 30 days after the date the Secretary promulgated proposed rules setting forth the payment rates under subparagraph (A) for 2006, the Comptroller General shall evaluate such proposed rates and submit to Congress a report regarding the appropriateness of such rates based on the surveys the Comptroller General has conducted under clause (i).
Section 621 (3)
GAO REPORT.
Deadline for completion: January 1, 2005
The Comptroller General of the United States shall conduct a study to determine appropriate payment amounts under section 1833(t)(16)(C) of the Social Security Act, as added by paragraph (1), for devices of brachytherapy. Not later than January 1, 2005, the Comptroller General shall submit to Congress and the Secretary a report on the study conducted under this paragraph, and shall include specific recommendations for appropriate payments for such devices.
Matt Farber, Manager, Provider Economics & Public Policy,Phone 301.984.9496, ext. 221, Email mfarber@accc-cancer.org
