PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.

SEC. 4551. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT. (a) Reduction in Payment Amounts for Items of Durable Medical Equipment.— (1) Freeze in update for covered items.—Section 1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended— (A) in subparagraph (A), by striking “and” at the end; (B) in subparagraph (B)— (i) by striking “a subsequent year” and inserting “1993, 1994, 1995, 1996, and 1997”, and (ii) by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following new subparagraphs: “(C) for each of the years 1998 through 2002, 0 percent age points; and “(D) for a subsequent year, the percentage increase in the consumer price index for all urban consumers (U.S. urban average) for the 12-month period ending with June of the previous year.”. (2) Update for orthotics and prosthetics.—Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended—111 STAT. 458 (A) in clause (iii), by striking “, and” at the end and inserting a semicolon; (B) in clause (iv), by striking “a subsequent year” and inserting “1996 and 1997”; and (C) by adding at the end the following new clauses: “(v) for each of the years 1998 through 2002, 1 percent, and “(vi) for a subsequent year, the percentage increase in the consumer price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year;”. (b) Payment Freeze for Parenteral and Enteral Nutrients, Supplies, and Equipment.—In determining the amount of payment under part B of title XVIII of the Social Security Act with respect to parenteral and enteral nutrients, supplies, and equipment during each of the years 1998 through 2002, 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 nutrients, supplies, and equipment during 1995. (c) Upgraded Durable Medical Equipment.— (1) In general.—Section 1834(a) (42 U.S.C. 1395m(a)), as amended by section 4312(a), is amended by inserting after paragraph (16) the following new paragraph: “(17) Certain upgraded items.— “(A) Individual’s right to choose upgraded item.—Notwithstanding any other provision of this title, the Secretary may issue regulations under which an individual may purchase or rent from a supplier an item of upgraded durable medical equipment for which payment would be made under this subsection if the item were a standard item. “(B) Payments to supplier.—In the case of the purchase or rental of an upgraded item under subparagraph (A)— “(i) the supplier shall receive payment under this subsection with respect to such item as if such item were a standard item; and “(ii) the individual purchasing or renting the item shall pay the supplier an amount equal to the difference between the supplier’s charge and the amount under clause (i). In no event may the supplier’s charge for an upgraded item exceed the applicable fee schedule amount (if any) for such item. “(C) Consumer protection safeguards.—Any regulations under subparagraph (A) shall provide for consumer protection standards with respect to the furnishing of upgraded equipment under subparagraph (A). Such regulations shall provide for— “(i) determination of fair market prices with respect to an upgraded item; “(ii) full disclosure of the availability and price of standard items and proof of receipt of such disclosure information by the beneficiary before the furnishing of the upgraded item;111 STAT. 459 “(iii) conditions of participation for suppliers in the billing arrangement; “(iv) sanctions of suppliers who are determined to engage in coercive or abusive practices, including exclusion; and “(v) such other safeguards as the Secretary determines are necessary.”. (2) Effective date.—The amendment made by paragraph (1) shall apply to purchases or rentals after the effective date of any regulations issued pursuant to such amendment.