DURABLE MEDICAL EQUIPMENT.

SEC. 4152. DURABLE MEDICAL EQUIPMENT. (a) Payments for Seat-Lift and TENS.— (1) 15 percent reduction in payments for transcutaneous electrical nerve stimulators.—Section 1834(a)(l)(D) of the Social Security Act (42 U.S.C. 1395m(a)(l)(D)l is amended by inserting before the period at the end the following: “, and, in the case of a transcutaneous electrical nerve stimulator furnished on or after January 1, 1991, the Secretary shall further reduce such payment amount (as previously reduced) by 15 percent”. (2) Seat-lifts.—Section 1861(n) of the Social Security Act (42 U.S.C. 1395x(n)) is amended by adding at the end the following: “With respect to a seat-lift chair, such term includes only the seat-lift mechanism and does not include the chair.”. (3) Effective date.—The amendment made by subsection (a) shall apply to items furnished on or after January 1, 1991. (b) Development and Application of National Limits on Fees.— (1) Inexpensive and routinely purchased durable medical equipment and items requiring frequent and substantial servicing.— Paragraphs (2) and (3) of section 1834(a) of such Act (42 U.S.C. 1395m(a)) are each amended— (A) in subparagraph (B)(i), by striking “or” at the end; (B) by striking clause (ii) of subparagraph (B) and inserting the following: “(ii) in 1991 is the sum of (I) 67 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(D for 1991, and (ID 33 per-cent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1991; “(iii) in 1992 is the sum of (I) 33 percent of the local payment amount for the item or device computed under subparagraph (C)(i)(ID for 1992, and (II) 67 per-cent of the national limited payment amount for the item or device computed under subparagraph (C)(ii) for 1992; and “(iv) in 1993 and each subsequent year is the national limited payment amount for the item or device computed under subparagraph (C)(ii) for that year.”; and (C) by adding at the end the following new subparagraph: “(C) Computation of local payment amount and national limited payment amount.—For purposes of subparagraph (B)— “(i) the local payment amount for an item or device for a year is equal to— “(I) for 1991, the amount specified in subparagraph (B)(i) for 1990 increased by the covered item update for 1991, and “(II) for 1992, the amount determined under this clause for the preceding year increased by the covered item update for 1992; and “(ii) the national limited payment amount for an item or device for a year is equal to— 104 STAT. 1388–75 “(I) for 1991, the local payment amount determined under clause (i) for such item or device for that year, except that the national limited payment amount may not exceed 100 percent of the weighted average of all local payment amounts determined under such clause for such item for that year and may not be less than 85 percent of the weighted average of ail local payment amounts determined under such clause for such item, and “(II) for each subsequent year, the amount determined under this clause for the preceding year increased by the covered item update for such subsequent year.”. (2) Miscellaneous items and other covered items.— Section 1834(a)(8) (42 U.S.C. 1395m(a)(8)l is amended— (A) in subparagraph (A)(ii)— (i) by striking “or” at the end of subclause (I); (ii) in subclause (II)— (I) by striking “1991 or”, and (II) by striking “the percentage increase” and all that follows through the period and inserting “the covered item update for the year.”; (iii) by redesignating subclause (II) as subclause (III); and (iv) by inserting after subclause (I) the following new subclause: “(II) in 1991, equal to the local purchase price computed under this clause for the previous year, increased by the covered item update for 1991, and decreased by the percentage by which the average of the reasonable charges for claims paid for all items described in paragraph (7) is lower than the average of the purchase prices submitted for such items during the final 9 months of 1988; or”; (B) by amending subparagraph (B) to read as follows: “(B) Computation of national limited purchase price.— With respect to the furnishing of a particular item in a year, the Secretary shall compute a national limited purchase price— “(i) for 1991, equal to the local purchase price computed under subparagraph (A)(ii) for the item for the year, except that such national limited purchase price may not exceed 100 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year, and may not be less than 85 percent of the weighted average of all local purchase prices for the item computed under such subparagraph for the year; and “(ii) for each subsequent year, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year.”; (C) in subparagraph (C)— (i) by striking “regional purchase price” each place it appears and inserting “national limited purchase price”, (ii) by striking “and subject to subparagraph (D)”, 104 STAT. 1388–76 (iii) in clause (ii)— (I) by striking “75” and inserting 67”; and (II) by striking “25” and inserting “33”, and (iv) in clause (iii)— (I) in subclause (I), by striking “50” and inserting “33” and by striking “(A)(ii)(ID” and inserting “ (A)(ii)(IID”; and (II) in subclause (ID, by striking “50” and inserting “67”; and (D) by striking subparagraph (D). (3) Oxygen and oxygen equipment.— Section 1834(a)(9) of such Act (42 U.S.C. 1395m(a)(9)) is amended— (A) in subparagraph (A)(ii)(II), by striking “the percentage increase” and all that follows through the period and inserting “the covered item increase for the year.”; (B) by amending subparagraph (B) to read as follows: “(B) Computation of national limited monthly payment rate.— With respect to the furnishing of an item in a year, the Secretary shall compute a national limited monthly payment rate equal to— “(i) for 1991, the local monthly payment rate computed under subparagraph (A)(ii)(II) for the item for the year, except that such national limited monthly payment rate may not exceed 100 percent of the weighted average of all local monthly payment rates computed for the item under such subparagraph for the year, and may not be less than 85 percent of the weighted aver-age of all local monthly payment rates computed for the item under such subparagraph for the year; and “(ii) for each subsequent year, equal to the amount determined under this subparagraph for the preceding year increased by the covered item update for such subsequent year.”, (C) in subparagraph (C)— (i) by striking “regional monthly payment rate” each place it appears and inserting “national limited monthly payment rate”, (ii) in clause (ii)— (I) by striking “75” and inserting “67”; and (II) by striking “25” and inserting “33”, and (iii) in clause (iii)— (I) in subclause (I), by striking “50” and inserting “33”; and (II) in subclause (H), by striking “50” and inserting “67” and by striking “(B)(D” and inserting “(B)(ii)”; and (D) by striking subparagraph (D). (4) Definition.—Section 1834(a) (42 U.S.C. 1395m(a)) is amended by adding at the end the following new paragraph: “(14) Covered item update.— In this subsection, the term ‘covered item update’ means, with respect to a year— “(A) for 1991 and 1992, 1313So in original. Probably should be “a reduction”. reduction of 1 percentage point; and “(B) for a subsequent year, the percentage increase in the consumer price index for all urban consumers (U.S. city average) for the 12-month period ending with June of the previous year.”. 104 STAT. 1388–77 (5) Conforming amendment.—Section 1834(a)(12) (42 U.S.C. 1395m(a)(12)) is amended by striking “defined for purposes of paragraphs (8)(B) and (9)(B)”. (c) Treatment of “Rental Cap” Items.— (1) Limitation on monthly recognized rental amounts for miscellaneous items.— Section 1834(a)(7)(A)(i) (42 U.S.C. 1395m(a)(7)(A)(D) is amended— (A) by striking “for each such month” and inserting “for each of the first 3 months of such period”; and (B) by striking the semicolon at the end and inserting the following: “, and for each of the remaining months of such period is 7.5 percent of such purchase price;”. (2) Offer of option to purchase for miscellaneous items; establishment of reasonable lifetime.— Section 1834(a)(7) of such Act (42 U.S.C. 1395m(a)(7)(A)) is amended— (A) in subparagraph (A)(i), by striking “15 months” and inserting “15 months, or, in the case of an item for which a purchase agreement has been entered into under clause (iii), a period of continuous use of longer than 13 months”; (B) in subparagraph (A)(ii)— (i) by striking “(ii) during the succeeding 6-month period of medical need,” and inserting “(iv) in the case of an item for which a purchase agreement has not been entered into under clause (ii) or clause (iii), during the first 6-month period of medical need that follows the period of medical need during which payment is made under clause (i),”, and (ii) by striking “and” at the end; (C) in subparagraph (A)(iii)— (i) by striking “(iii)” and inserting “(v) in the case of an item for which a purchase agreement has not been entered into under clause (ii) or clause (iii),”, and (ii) by striking the period at the end and inserting “; and”; (D) by inserting after clause (i) of subparagraph (A) the following new clauses: “(ii) in the case of a power-driven wheelchair, at the time the supplier furnishes the item, the supplier shall offer the individual patient the option to purchase the item, and payment for such item shall be made on a lump-sum basis if the patient exercises such option; “(iii) during the 10th continuous month during which payment is made for the rental of an item under clause (i), the supplier of such item shall offer the individual patient the option to enter into a purchase agreement under which, if the patient notifies the supplier not later than 1 month after the supplier makes such offer that the patient agrees to accept such offer and exercise such option— “(I) the supplier shall transfer title to the item to the individual patient on the first day that begins after the 13th continuous month during which payment is made for the rental of the item under clause (i), “(II) after the supplier transfers title to the item under subclause (I), maintenance and servicing 104 STAT. 1388–78 payments shall be made in accordance with clause (v);”; (E) by inserting after clause (v) of subparagraph (A) {as amended by subparagraph (CM the following new clause: “(vi) in the case of an item for which a purchase agreement has been entered into under clause (ii) or clause (iii), maintenance and servicing payments may be made (for parts and labor not covered by the supplier’s or manufacturer’s warranty, as determined by the Secretary to be appropriate for the particular type of durable medical equipment), and such payments shall be in an amount established by the Secretary on the basis of reasonable charges in the locality for maintenance and servicing.”; and (F) by adding at the end the following new subparagraph: “(C) Replacement of items.— “(i) Establishment of reasonable useful life-time.—In accordance with clause (iii), the Secretary shall determine and establish a reasonable useful life-time for items of durable medical equipment for which payment may be made under this paragraph or paragraph (3). “(ii) Payment for replacement items.— If the reasonable lifetime of such an item, as so established, has been reached during a continuous period of medical need, or the carrier determines that the item is lost or irreparably damaged, the patient may elect to have payment for an item serving as a replacement for such item made— “(I) on a monthly basis for the rental of the replacement item in accordance with subparagraph (A); or “(II) in the case of an item for which a purchase agreement has been entered into under subparagraph (A)(ii) or (A)(iii), in a lump-sum amount for the purchase of the item. “(iii) Length of reasonable useful lifetime.—The reasonable useful lifetime of an item of durable medical equipment under this subparagraph shall be equal to 5 years, except that, if the Secretary determines that, on the basis of prior experience in making payments for such an item under this title, a reasonable useful lifetime of 5 years is not appropriate with respect to a particular item, the Secretary shall establish an alternative reasonable lifetime for such item.”. (3) Application of reasonable useful lifetime for items requiring frequent and substantial servicing.— Section 1834(a)(8) (42 U.S.C. 1395m(a)(3)), as amended by subsection (b)(D, is further amended by adding at the end the following new subparagraph: “(D) Replacement of items.—If the reasonable useful lifetime of such an item, as established under paragraph (7)(C), has been reached during a continuous period of medical need, or the Secretary determines on the basis of investigation by the carrier that the item is lost or irreparably damaged, payment for an item serving as a replacement for such item shall be made on a monthly basis for the 104 STAT. 1388–79 rental of the replacement item in accordance with subparagraph (A).”. (4) Treatment of power-driven wheelchairs as miscellaneous items of durable medical equipment.— (A) In general—Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)(2)(A)) is amended— (i) in clause (i), by inserting “or” at the end; (ii) in clause (ii), by striking “or” at the end; and (iii) by striking clause (iii). (B) Criteria for treatment of wheelchair as customized item.— (i) Section 1834(a)(4) (42 U.S.C. 1395m(a)(4)) is amended by adding at the end the following: “In the case of a wheelchair furnished on or after January 1, 1992, the wheelchair shall be treated as a customized item for purposes of this paragraph if the wheelchair has been measured, fitted, or adapted in consideration of the patient’s body size, disability, period of need, or intended use, and has been assembled by a supplier or ordered from a manufacturer who makes available customized features, modifications, or components for wheelchairs that are intended for an individual patient’s use in accordance with instructions from the patient’s physician.”. (ii) The amendment made by clause (i) shall apply to items furnished on or after January 1, 1992, unless the Secretary develops specific criteria before that date for the treatment of wheelchairs as customized items for purposes of section 1834(a)(4) of the Social Security Act (in which case the amendment made by such clause shall not become effective). (d) Freeze in Reasonable Charges for Parenteral and Enteral Nutrients, Supplies, and Equipment During 1991.—In determining the amount of payment under part B of title )(V1H of the Social Security Act for enteral and parenteral nutrients, sup-plies, and equipment furnished during 1991, the charges determined to be reasonable with respect to such nutrients, supplies, and equipment may not exceed the charges determined to be reasonable with respect to such items for 1990. (e) Requiring Prior Approval for Potentially Overused Items.—Section 1834(a) (42 U.S.C. 1395m(a)), as amended by subsection (b), is amended by adding at the end the following new paragraph: “(15) Carrier determinations of potentially overused items in advance.— “(A) Development of list of items by secretary.—The Secretary shall develop and periodically update a list of items for which payment may be made under this subsection that the Secretary determines, on the basis of prior payment experience, are frequently subject to unnecessary utilization, and shall include in such list seat-lift mechanisms, transcutaneous electrical nerve stimulators, and motorized scooters. “(B) Determinations of coverage in advance.—A carrier shall determine in advance whether payment for an item included on the list developed by the Secretary under subparagraph (A) may not be made because of the application of section 1862(a)(l).”. 104 STAT. 1388–80 (f) Prohibition Against Distribution of Medical Necessity Forms by Suppliers.— (1) In general.—Section 1834(a) (42 U.S.C. 1395m(a)), as amended by subsections (b) and (e), is further amended by adding at the end the following new paragraph: “(16) Prohibition against distribution by suppliers of forms documenting medical necessity.— “(A) In general.—A supplier of a covered item under this subsection may not distribute to physicians or to individuals entitled to benefits under this part for commercial purposes any completed or partially completed forms or other documents required by the Secretary to be submitted to show that a covered item is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. “(B) Penalty.—Any supplier of a covered item who knowingly and willfully distributes a form or other document in violation of subparagraph (A) is subject to a civil money penalty in an amount not to exceed $1,000 for each such form or document so distributed. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under section 1128A(a).”. (2) Effective date.—The amendment made by paragraph (1) shall apply to forms and documents distributed on or after January 1, 1991. (g) Recertification for Certain Patients Receiving Home Oxygen Therapy Services.— (1) In general.— Section 1834(a)(5) (42 U.S.C. 1395m(a)(5)) is amended— (A) in subparagraph (A), by striking “(B) and (C)” and inserting “(B), (C), and (E)”; and (B) by adding at the end the following new subparagraph: “(E) Recertification for patients receiving home oxygen therapy.—In the case of a patient receiving home oxygen therapy services who, at the time such services are initiated, has an initial arterial blood gas value at or above a partial pressure of 55 or an arterial oxygen saturation at or above 89 percent (or such other values, pressures, or criteria as the Secretary may specify) no payment may be made under this part for such services after the expiration of the 90-day period that begins on the date the patient first receives such services unless the patient’s attending physician certifies that, on the basis of a follow-up test of the patient’s arterial blood gas value or arterial oxygen saturation conducted during the final 30 days of such 90-day period, there is a medical need for the patient to continue to receive such services”. (2) Effective date.—The amendments made by paragraph (1) shall apply to patients who first receive home oxygen therapy services on or after January 1, 1991. (h) Technical Corrections.—Effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1987, section 4062(e) of such Act is amended— 104 STAT. 1388–81 (1) by inserting “(other than oxygen and oxygen equipment)” after “covered items”, and (2) by inserting before the period at the end the following: “and to oxygen and oxygen equipment furnished on or after June 1, 1989”. (i) Effective Date.—Except as otherwise provided, the amendments made by this section shall apply to items furnished on or after January 1, 1991.