CERTIFICATION OF SUPPLIERS.

SEC. 131. CERTIFICATION OF SUPPLIERS. (a) Requirements.— (1) In general.— Section 1834 (42 U.S.C. 1395m), as amended by section 13544(b)(1) of OBRA-1993, is amended by adding at the end the following new subsection: “(j) Requirements for Suppliers of Medical Equipment and Supplies.— “(1) Issuance and renewal of supplier number.— “(A) Payment.— Except as provided in subparagraph (C), no payment may be made under this part after the date of the enactment of the Social Security Act Amendments of 1994 for items furnished by a supplier of medical equipment and supplies unless such supplier obtains (and renews at such intervals as the Secretary may require) a supplier number. (B) Standards for possessing a supplier number.— A supplier may not obtain a supplier number unless— 108 STAT. 4417 “(i) for medical equipment and supplies furnished on or after the date of the enactment of the Social Security Act Amendments of 1994 and before January 1, 1996, the supplier meets standards prescribed by the Secretary in regulations issued on June 18, 1992; and “(ii) for medical equipment and supplies furnished on or after January 1, 1996, the supplier meets revised standards prescribed by the Secretary (in consultation with representatives of suppliers of medical equipment and supplies, carriers, and consumers) that shall include requirements that the supplier— “(I) comply with all applicable State and Federal licensure and regulatory requirements; “(II) maintain a physical facility on an appropriate site; “(III) have proof of appropriate liability insurance; and “(IV) meet such other requirements as the Secretary may specify. “(C) Exception for items furnished as incident to a physician’s service.— Subparagraph (A) shall not apply with respect to medical equipment and supplies furnished incident to a physician’s service. “(D) Prohibition against multiple supplier numbers.— The Secretary may not issue more than one supplier number to any supplier of medical equipment and supplies unless the issuance of more than one number is appropriate to identify subsidiary or regional entities under the supplier’s ownership or control. “(E) Prohibition against delegation of supplier determinations.— The Secretary may not delegate (other than by contract under section 1842) the responsibility to determine whether suppliers meet the standards necessary to obtain a supplier number. “(2) Certificates of medical necessity.— “(A) Limitation on information provided by suppliers on certificates of medical necessity.— “(i) In general.— Effective 60 days after the date of the enactment of the Social Security Act Amendments of 1994, a supplier of medical equipment and supplies may distribute to physicians, or to individuals entitled to benefits under this part, a certificate of medical necessity for commercial purposes which contains no more than the following information completed by the supplier: “(I) An identification of the supplier and the beneficiary to whom such medical equipment and supplies are furnished. “(II) A description of such medical equipment and supplies. “(Ill) Any product code identifying such medical equipment and supplies. “(IV) Any other administrative information (other than information relating to the beneficiary’s medical condition) identified by the Secretary. 108 STAT. 4418 “(ii) Information on payment amount and charges.— If a supplier distributes a certificate of medical necessity containing any of the information permitted to be supplied under clause (i), the supplier shall also list on the certificate of medical necessity the fee schedule amount and the supplier’s charge for the medical equipment or supplies being furnished prior to distribution of such certificate to the physician. “(iii) Penalty.— Any supplier of medical equipment and supplies who knowingly and willfully distributes a certificate of medical necessity in violation of clause (i) or fails to provide the information required under clause (ii) is subject to a civil money penalty in an amount not to exceed $1,000 for each such certificate of medical necessity so distributed. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to civil money penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under section 1128A(a). “(B) Definition.— For purposes of this paragraph, the term ‘certificate of medical necessity’ means a form or other document containing information required by the carrier to be submitted to show that an item is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. “(3) Coverage and review criteria.— The Secretary shall annually review the coverage and utilization of items of medical equipment and supplies to determine whether such items should be made subject to coverage and utilization review criteria, and if appropriate, shall develop and apply such criteria to such items. “(4) Definition.— The term ‘medical equipment and supplies’ means— “(A) durable medical equipment (as defined in section 1861(n)); “(B) prosthetic devices (as described in section 1861(s)(8)); “(C) orthotics and prosthetics (as described in section 1861(s)(9)); “(D) surgical dressings (as described in section 1861(s)(5)); “(E) such other items as the Secretary may determine; and “(F) for purposes of paragraphs (1) and (3)— “(i) home dialysis supplies and equipment (as described in section 1861(s)(2)(F)), “(ii) immunosuppressive drugs (as described in section 1861(s)(2)(J)), “(iii) therapeutic shoes for diabetics (as described in section 1861(s)(12)), “(iv) oral drugs prescribed for use as an anticancer therapeutic agent (as described in section 1861(s)(2)(Q)), and “(v) self-administered erythropoetin (as described in section 1861(s)(2)(P)).”. 108 STAT. 4419 (2) Conforming amendment.— Effective 60 days after the date of enactment of the Social Security Act Amendments of 1994, paragraph (16) of section 1834(a) (42 U.S.C. 1395m(a)) is repealed. (b) Use of Covered Items by Disabled Beneficiaries.— (1) In general.— The Secretary of Health and Human Services, in consultation with representatives of suppliers of durable medical equipment under part B of the medicare program and individuals entitled to benefits under such program on the basis of disability, shall conduct a study of the effects of the methodology for determining payments for items of such equipment under such part on the ability of such individuals to obtain items of such equipment, including customized items. (2) Report.— Not later than one year after the date of the enactment of this Act, the Secretary shall submit a report to Congress on the study conducted under paragraph (1), and shall include in the report such recommendations as the Secretary considers appropriate to assure that disabled medicare beneficiaries have access to items of durable medical equipment. (c) Criteria for Treatment of Items as Prosthetic Devices or Orthotics and Prosthetics.— Not later than one year after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit a report to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate describing prosthetic devices or orthotics and prosthetics covered under part B of the medicare program that do not require individualized or custom fitting and adjustment to be used by a patient. Such report shall include recommendations for an appropriate methodology for determining the amount of payment for such items under such program.