IMPLEMENTATION OF RESOURCE-BASED METHODOLOGIES.

SEC. 4505. IMPLEMENTATION OF RESOURCE-BASED METHODOLOGIES. (a) 1-Year Delay in Implementation.—Section 1848(c) (42 U.S.C. 1395w–4(c)) is amended— (1) in paragraph (2)(C)(ii), in the matter before subclause (I) and after subclause (II), by striking “1998” and inserting “1999” each place it appears; and (2) in paragraph (3)(C)(ii), by striking “1998” and inserting “1999”. (b) Phased-in Implementation.— (1) In general.—Section 1848(c)(2)(C)(ii) (42 U.S.C. 1395w–4(c)(2)(C)(ii)) is further amended— (A) by striking the comma at the end of clause (ii) and inserting a period and the following: “For 1999, such number of units shall be determined based 75 percent on such product and based 25 percent on the relative practice expense resources involved in furnishing the service. For 2000, such number of units shall be determined based 50 percent on such product and based 50 percent on such relative practice expense resources. For 2001, such number of units shall be determined based 25 percent on such product and based 75 percent on such relative practice expense resources. For a subsequent year, such number of units shall be determined based entirely on such relative practice expense resources.”. (2) Conforming amendment.—Section 1848(c)(3)(C)(ii) (42 U.S.C. 1395w–4(c)(3)(C)(ii)), as amended by subsection (a)(2), is amended by striking “1999” and inserting “2002”. (c) Review by Comptroller General.—The Comptroller General of the United States shall review and evaluate the proposed rule on resource-based methodology for practice expenses issued by the Secretary of Health and Human Services. The Comptroller General shall, within 6 months of the date of the enactment of this Act, report to the Committees on Commerce and Ways and Means of the House of Representatives and the Committee on Finance of the Senate the results of its evaluation, including an analysis of— (1) the adequacy of the data used in preparing the rule, (2) categories of allowable costs, (3) methods for allocating direct and indirect expenses, (4) the potential impact of the rule on beneficiary access to services, and (5) any other matters related to the appropriateness of resource-based methodology for practice expenses. The Comptroller General shall consult with representatives of physicians’ organizations with respect to matters of both data and methodology. (d) Requirements for Developing New Resource-Based Practice Expense Relative Value Units.— (1) Development.—For purposes of section 1848(c)(2)(C)(ii) of the Social Security Act, the Secretary of Health and Human 111 STAT. 436Services shall develop new resource-based relative value units. In developing such units the Secretary shall— (A) utilize, to the maximum extent practicable, generally accepted cost accounting principles which (i) recognize all staff, equipment, supplies, and expenses, not just those which can be tied to specific procedures, and (ii) use actual data on equipment utilization and other key assumptions; (B) consult with organizations representing physicians regarding methodology and data to be used; and (C) develop a refinement process to be used during each of the 4 years of the transition period. (2) Report.—The Secretary shall transmit a report by March 1, 1998, on the development of resource-based relative value units under paragraph (1) to the Committee on Ways and Means and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate. The report shall include a presentation of data to be used in developing the value units and an explanation of the methodology. (3) Notice of proposed rulemaking.—The Secretary shall publish a notice of proposed rulemaking with the new resource-based relative value units on or before May 1, 1998, and shall allow for a 90-day public comment period. (4) Items included.—The new proposed rule shall consider the following: (A) Impact projections which compare new proposed payment amounts on data on actual physician practice expenses. (B) Impact projections for hospital-based and other specialties, geographic payment localities, and urban versus rural localities. (e) Adjustments to Relative Value Units for 1998.—Section 1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended by adding at the end the following new subparagraph: “(G) Adjustments in relative value units for 1998.— “(i) In general.—The Secretary shall— “(I) subject to clauses (iv) and (v), reduce the practice expense relative value units applied to any services described in clause (ii) furnished in 1998 to a number equal to 110 percent of the number of work relative value units, and “(II) increase the practice expense relative value units for office visit procedure codes during 1998 by a uniform percentage which the Secretary estimates will result in an aggregate increase in payments for such services equal to the aggregate decrease in payments by reason of subclause (I). “(ii) Services covered.—For purposes of clause (i), the services described in this clause are physicians’ services that are not described in clause (iii) and for which— “(I) there are work relative value units, and111 STAT. 437 “(II) the number of practice expense relative value units (determined for 1998) exceeds 110 percent of the number of work relative value units (determined for such year). “(iii) Excluded services.—For purposes of clause (ii), the services described in this clause are services which the Secretary determines at least 75 percent of which are provided under this title in an office setting. “(iv) Limitation on aggregate reallocation.—If the application of clause (i)(I) would result in an aggregate amount of reductions under such clause in excess of $390,000,000, such clause shall be applied by substituting for 110 percent such greater percentage as the Secretary estimates will result in the aggregate amount of such reductions equaling $390,000,000. “(v) No reduction for certain services.—Practice expense relative value units for a procedure performed in an office or in a setting out of an office shall not be reduced under clause (i) if the in-office or out-of-office practice expense relative value, respectively, for the procedure would increase under the proposed rule on resource-based practice expenses issued by the Secretary on June 18, 1997 (62 Federal Register 33158 et seq.).”. (f) Application of Resource-Based Methodology to Malpractice Relative Value Units.— (1) In general.—Section 1848(c)(2)(C)(iii) (42 U.S.C. 1395w–4(c)(2)(C)(iii)) is amended— (A) in paragraph (2)(C)(iii)— (i) by inserting “for the service for years before 2000” before “equal”, and (ii) by striking the period at the end and inserting a comma and by adding at the end the following flush matter: “and for years beginning with 2000 based on the malpractice expense resources involved in furnishing the service.”; and (B) in paragraph (3)(C)(iii), by striking “The malpractice” and inserting “For years before 1999, the malpractice”. (2) Application of certain budget neutrality provisions.—In implementing the amendment made by paragraph (1)(A)(ii), the provisions of clauses (ii)(II) and (iii) of section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) shall apply in the same manner as they apply to adjustments under clause (ii)(I) of such section.