APPLICATION OF INHERENT REASONABLENESS TO ALL PART B SERVICES OTHER THAN PHYSICIANS’ SERVICES.

SEC. 4316. APPLICATION OF INHERENT REASONABLENESS TO ALL PART B SERVICES OTHER THAN PHYSICIANS’ SERVICES. (a) In General.—Paragraphs (8) and (9) of section 1842(b) (42 U.S.C. 1395u(b)) are amended to read as follows: “(8)(A)(i) The Secretary shall by regulation— “(I) describe the factors to be used in determining the cases (of particular items or services) in which the application of this part (other than to physicians’ services paid under 111 STAT. 391section 1848) results in the determination of an amount that, because of its being grossly excessive or grossly deficient, is not inherently reasonable, and “(II) provide in those cases for the factors to be considered in determining an amount that is realistic and equitable. “(ii) Notwithstanding the determination made in clause (i), the Secretary may not apply factors that would increase or decrease the payment under this part during any year for any particular item or service by more than 15 percent from such payment during the preceding year except as provided in subparagraph (B). “(B) The Secretary may make a determination under this subparagraph that would result in an increase or decrease under subparagraph (A) of more than 15 percent of the payment amount for a year, but only if— “(i) the Secretary’s determination takes into account the factors described in subparagraph (C) and any additional factors the Secretary determines appropriate, “(ii) the Secretary’s determination takes into account the potential impacts described in subparagraph (D), and “(iii) the Secretary complies with the procedural requirements of paragraph (9). “(C) The factors described in this subparagraph are as follows: “(i) The programs established under this title and title XIX are the sole or primary sources of payment for an item or service. “(ii) The payment amount does not reflect changing technology, increased facility with that technology, or reductions in acquisition or production costs. “(iii) The payment amount for an item or service under this part is substantially higher or lower than the payment made for the item or service by other purchasers. “(D) The potential impacts of a determination under subparagraph (B) on quality, access, and beneficiary liability, including the likely effects on assignment rates and participation rates. “(9)(A) The Secretary shall consult with representatives of suppliers or other individuals who furnish an item or service before making a determination under paragraph (8)(B) with regard to that item or service. “(B) The Secretary shall publish notice of a proposed determination under paragraph (8)(B) in the Federal Register— “(i) specifying the payment amount proposed to be established with respect to an item or service, “(ii) explaining the factors and data that the Secretary took into account in determining the payment amount so specified, and “(iii) explaining the potential impacts described in paragraph (8)(D). “(C) After publication of the notice required by subparagraph (B), the Secretary shall allow not less than 60 days for public comment on the proposed determination. “(D)(i) Taking into consideration the comments made by the public, the Secretary shall publish in the Federal Register a final determination under paragraph (8)(B) with respect to the payment amount to be established with respect to the item or service. “(ii) A final determination published pursuant to clause (i) shall explain the factors and data that the Secretary took into consideration in making the final determination.”.111 STAT. 392 (b) Conforming Amendment.—Section 1834(a)(10)(B) (42 U.S.C. 1395m(a)(10)(B)) is amended— (1) by striking “For covered items furnished on or after January 1, 1991, the” and inserting “The”; (2) by striking “(other than subparagraph (D))”; and (3) by striking all that follows “payments under this subsection” and inserting a period. (c) Effective Date.—The amendments made by this section shall take effect on the date of the enactment of this Act.