I
112th CONGRESS
2d Session
H. R. 5624
IN THE HOUSE OF REPRESENTATIVES
May 8, 2012
Mrs. McMorris Rodgers introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to protect and preserve access of Medicare beneficiaries in rural areas to health care providers under the Medicare program, to amend title III of the Public Health Service Act to extend discounts under the 340B program, and for other purposes.
Short title; table of contents
Short title
This Act may be cited as the Rural Hospital and Provider Equity and 340B Improvement
Act of 2012
.
Table of Contents
The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Rural Hospital and Provider Equity
Sec. 101. Sense of the Congress.
Sec. 102. Fairness in the Medicare disproportionate share hospital (DSH) adjustment for rural hospitals.
Sec. 103. Extension and expansion of the Medicare hold harmless provision under the prospective payment system for hospital outpatient department (HOPD) services for certain hospitals.
Sec. 104. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals.
Sec. 105. Extension of Medicare wage index reclassifications for certain hospitals.
Sec. 106. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas.
Sec. 107. Elimination of isolation test for cost-based ambulance reimbursement for critical access hospitals.
Sec. 108. Extension of Medicare incentive payment program for physician scarcity areas.
Sec. 109. Extension of floor on Medicare work geographic adjustment.
Sec. 110. Improving care planning for Medicare home health services.
Sec. 111. Rural health clinic improvements.
Sec. 112. Temporary Medicare payment increase for home health services furnished in a rural area.
Sec. 113. Extension of increased Medicare payments for rural ground ambulance services.
Sec. 114. Extension of payment for technical component of certain physician pathology services.
Sec. 115. Facilitating the provision of telehealth services across State lines.
Sec. 116. Medicare Part A payment for anesthesiologist services in certain rural hospitals based on CRNA pass-through rules.
Sec. 117. Temporary floor on the practice expense geographic index for services furnished in rural areas outside of frontier States under the Medicare physician fee schedule.
Sec. 118. Revisions to standard for designation of sole community hospitals.
Sec. 119. State offices of rural health.
Sec. 120. Ensuring proportional representation of interests of rural areas on MEDPAC.
Title II—340B Program Improvement
Sec. 201. Extension of discounts to inpatient drugs.
Sec. 202. Prohibition against duplicate discounts for physician administered drugs.
Sec. 203. Continued inclusion of orphan drugs in definition of covered outpatient drugs; technical amendment.
Sec. 204. Application of rules for determining provider-based status for certain entities.
Rural Hospital and Provider Equity
Sense of the Congress
It is the sense of the Congress that—
residents of rural and frontier communities should have access to affordable, quality health care;
rural and frontier communities face unique challenges in health care delivery and financing;
Federal health policy must reflect the unique needs of residents of rural and frontier communities and such communities in an equitable and sustainable manner; and
stakeholders should work collectively to identify innovative policies that address the availability, delivery, and affordability of health care services in rural and frontier communities.
Fairness in the Medicare disproportionate share hospital (DSH) adjustment for rural hospitals
Section
1886(d)(5)(F)(xiv)(II) of the Social Security
Act (42 U.S.C. 1395ww(d)(5)(F)(xiv)(II)) is amended by adding at the
end the following new sentence: The preceding sentence shall not apply
to any hospital with respect to discharges occurring on or after October 1,
2011, and before October 1, 2012.
.
Extension and expansion of the Medicare hold harmless provision under the prospective payment system for hospital outpatient department (HOPD) services for certain hospitals
Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended—
in subclause (II)—
in the first sentence, by striking
March 1, 2012
and inserting January 1, 2013
;
and
in the second sentence—
by striking and 85
and
inserting 85
; and
by inserting the
following before the period at the end: , and 100 percent with respect
to such services furnished in the last 10 months of 2012
; and
in subclause (III)—
in the first sentence—
by striking
2009, and before March 1, 2012, for which
and inserting
2009, and before January 1, 2013, for which
; and
by striking
85 percent
and inserting the applicable percentage (as
determined under the second sentence of subclause (II) for the year)
;
and
in the second
sentence, by striking 2010, and before March 1, 2012, the
preceding
and inserting 2010, and before January 1, 2013, the
preceding
.
Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 1395ww(d)(12)) is amended—
in subparagraph (C)(i), by inserting
and 2,000 discharges, respectively,
after 1,600
discharges
; and
in subparagraph (D)—
by striking
1,600
and inserting the applicable number of
;
and
by adding at the
end the following new sentence: For purposes of the preceding sentence,
the term applicable number of discharges means 1,600 discharges
with respect to discharges occurring in fiscal year 2011 and 2,000 discharges
with respect to discharges occurring in fiscal year 2012
.
Extension of Medicare wage index reclassifications for certain hospitals
Extension of correction of mid-Year reclassification expiration for certain hospitals
In general
In the case of a hospital described in paragraph (2), the
Secretary of Health and Human Services shall apply subsection (a) of section
106 of division B of the Tax Relief and Health Care Act of 2006 (42 U.S.C.
1395ww note), as amended by section 117 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (Public Law 110–173), section 124 of the Medicare
Improvements for Patients and Providers Act of 2008 (Public Law 110–275),
sections 3137(a) and 10317 of the Patient Protection and Affordable Care Act
(Public Law 111–148), and section 102 of the Medicare and Medicaid Extenders
Act of 2010 (Public Law 111–309), by substituting September 30,
2012
for November 30, 2011
.
Hospital described
A hospital described in this paragraph is—
a hospital—
that is described in subsection (a) of such section 106; and
that is located in a rural area; and
for which the Secretary of Health and Human Services has determined the extension under this subsection to be appropriate; or
a sole community hospital located in a State with less than 10 people per square mile that was provided with a special exception reclassification extension under section 117(a)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110–173).
Not budget neutral
The provisions of this section shall not be effected in a budget-neutral manner.
Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas
Section 416(b) of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (42 U.S.C. 1395l–4), as
amended by section 105 of division B of the Tax Relief and Health Care Act of
2006 (42 U.S.C. 1395l note), section 107 of the Medicare, Medicaid, and SCHIP
Extension Act of 2007 (42 U.S.C. 1395l note), section 3122 of the Patient
Protection and Affordable Care Act (Public Law 111–148), and section 109 of the
Medicare and Medicaid Extenders Act of 2010 (Public Law 111–309), is amended by
striking the 2-year period beginning on July 1, 2010
and
inserting the 30-month period beginning on July 1, 2010
.
Elimination of isolation test for cost-based ambulance reimbursement for critical access hospitals
In general
Section 1834(l)(8) of the Social Security Act (42 U.S.C. 1395m(l)(8)) is amended—
in subparagraph (B)—
by striking
owned and
; and
by inserting
(including when such services are provided by the entity under an
arrangement with the hospital)
after hospital
;
and
by striking the comma at the end of subparagraph (B) and all that follows and inserting a period.
Effective date
The amendments made by this section shall apply to services furnished on or after January 1, 2012.
Extension of Medicare incentive payment program for physician scarcity areas
Section 1833(u)(1) of the Social Security
Act (42 U.S.C. 1395l(u)(1)) is amended by inserting , and such services
furnished on or after January 1, 2012, and before January 1, 2013
after
2008
.
Extension of floor on Medicare work geographic adjustment
Section 1848(e)(1)(E) of the Social Security
Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking before March 1,
2012
and inserting before January 1, 2013
.
Improving care planning for Medicare home health services
Part A provisions
Section 1814(a) of the Social Security Act (42 U.S.C. 1395f(a)) is amended—
in paragraph (2)—
in the matter preceding subparagraph (A),
by inserting , a nurse practitioner or clinical nurse specialist who is
working in collaboration with a physician in accordance with State law, a
certified nurse-midwife (as defined in section 1861(gg)) as authorized by State
law, or a physician assistant (as defined in section 1861(aa)(5)) under the
supervision of a physician
after 1866(j)
; and
in subparagraph (C)—
by inserting , a nurse practitioner,
a clinical nurse specialist, a certified nurse-midwife, or a physician
assistant (as the case may be)
after physician
the first
2 times it appears; and
by striking , and, in the case of a
certification made by a physician
and all that follows through
face-to-face encounter
and inserting , and, in the case
of a certification made by a physician after January 1, 2010, or by a nurse
practitioner, clinical nurse specialist, certified nurse-midwife, or physician
assistant (as the case may be) after January 1, 2012, prior to making such
certification the physician, nurse practitioner, clinical nurse specialist,
certified nurse-midwife, or physician assistant must document that the
physician, nurse practitioner, clinical nurse specialist, certified
nurse-midwife, or physician assistant has had a face-to-face
encounter
;
in the second sentence, by inserting
certified nurse-midwife,
after clinical nurse
specialist,
;
in the third sentence—
by striking physician
certification
and inserting certification
;
by inserting (or on January 1, 2012,
in the case of regulations to implement the amendments made by section 11 of
the Rural Hospital and Provider Equity and
340B Improvement Act of 2012)
after 1981
;
and
by striking a physician who
and inserting a physician, nurse practitioner, clinical nurse
specialist, certified nurse-midwife, or physician assistant who
;
and
in the fourth sentence, by inserting
, nurse practitioner, clinical nurse specialist, certified
nurse-midwife, or physician assistant
after
physician
.
Part B provisions
Section 1835(a) of the Social Security Act (42 U.S.C. 1395n(a)) is amended—
in paragraph (2)—
in the matter
preceding subparagraph (A), by inserting , a nurse practitioner or
clinical nurse specialist (as those terms are defined in section 1861(aa)(5))
who is working in collaboration with a physician in accordance with State law,
a certified nurse-midwife (as defined in section 1861(gg)) as authorized by
State law, or a physician assistant (as defined in section 1861(aa)(5)) under
the supervision of a physician
after 1866(j)
; and
in subparagraph (A)—
in each of clauses (ii) and (iii) of
subparagraph (A) by inserting , a nurse practitioner, a clinical nurse
specialist, a certified nurse-midwife, or a physician assistant (as the case
may be)
after physician
; and
in clause (iv),
by striking after January 1, 2010
and all that follows through
face-to-face encounter
and inserting made by a physician
after January 1, 2010, or by a nurse practitioner, clinical nurse specialist,
certified nurse-midwife, or physician assistant (as the case may be) after
January 1, 2012, prior to making such certification the physician, nurse
practitioner, clinical nurse specialist, certified nurse-midwife, or physician
assistant must document that the physician, nurse practitioner, clinical nurse
specialist, certified nurse-midwife, or physician assistant has had a
face-to-face encounter
;
in the third sentence, by inserting
, nurse practitioner, clinical nurse specialist, certified
nurse-midwife, or physician assistant (as the case may be)
after
physician
;
in the fourth sentence—
by striking physician
certification
and inserting certification
;
by inserting (or on January 1, 2012,
in the case of regulations to implement the amendments made by section 11 of
the Rural Hospital and Provider Equity and
340B Improvement Act of 2012)
after 1981
;
and
by striking a physician who
and inserting a physician, nurse practitioner, clinical nurse
specialist, certified nurse-midwife, or physician assistant who
;
and
in the fifth sentence, by inserting
, nurse practitioner, clinical nurse specialist, certified
nurse-midwife, or physician assistant
after
physician
.
Definition provisions
Home health services
Section 1861(m) of the Social Security Act (42 U.S.C. 1395x(m)) is amended—
in the matter preceding paragraph (1)—
by inserting , a nurse practitioner
or a clinical nurse specialist (as those terms are defined in subsection
(aa)(5)), a certified nurse-midwife (as defined in section 1861(gg)), or a
physician assistant (as defined in subsection (aa)(5))
after
physician
the first place it appears; and
by inserting , a nurse practitioner,
a clinical nurse specialist, a certified nurse-midwife, or a physician
assistant
after physician
the second place it appears;
and
in paragraph (3), by inserting , a
nurse practitioner, a clinical nurse specialist, a certified nurse-midwife, or
a physician assistant
after physician
.
Home health agency
Section 1861(o)(2) of the Social Security Act (42 U.S.C. 1395x(o)(2)) is amended—
by inserting , nurse practitioners
or clinical nurse specialists (as those terms are defined in subsection
(aa)(5)), certified nurse-midwives (as defined in section 1861(gg)), or
physician assistants (as defined in subsection (aa)(5))
after
physicians
; and
by inserting , nurse practitioner,
clinical nurse specialist, certified nurse-midwife, physician
assistant,
after physician
.
Home health prospective payment system provisions
Section 1895 of the Social Security Act (42 U.S.C. 1395fff) is amended—
in subsection (c)(1), by inserting ,
the nurse practitioner or clinical nurse specialist (as those terms are defined
in section 1861(aa)(5)), the certified nurse-midwife (as defined in section
1861(gg)), or the physician assistant (as defined in section
1861(aa)(5)),
after physician
; and
in subsection (e)—
in paragraph (1)(A), by inserting ,
a nurse practitioner or clinical nurse specialist (as those terms are defined
in section 1861(aa)(5)), a certified nurse-midwife (as defined in section
1861(gg)), or a physician assistant (as defined in section 1861(aa)(5))
after physician
; and
in paragraph (2)—
in the heading, by striking
Physician
certification
and inserting Rule of construction regarding requirement for
certification
; and
by striking
physician
.
Effective Date
The amendments made by this section shall apply to items and services furnished on or after January 1, 2012.
Rural health clinic improvements
Section 1833(f) of the Social Security Act (42 U.S.C. 1395l(f)) is amended—
in paragraph (1),
by striking , and
at the end and inserting a semicolon;
in paragraph (2)—
by inserting
(before 2012)
after in a subsequent year
;
and
by striking the period at the end and inserting a semicolon; and
by adding at the end the following new paragraphs:
in 2012, at $101 per visit; and
in a subsequent year, at the limit established under this subsection for the previous year increased by the percentage increase in the MEI (as so defined) applicable to primary care services (as so defined) furnished as of the first day of that year.
.
Temporary Medicare payment increase for home health services furnished in a rural area
Section 421(a) of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public
Law 108–173; 117 Stat. 2283), as amended by section 5201(b) of the Deficit
Reduction Act of 2005 (Public Law 109–171; 120 Stat. 46) and section 3131(c) of
the Patient Protection and Affordable Care Act (Public Law 111–148; 124 Stat.
428), is amended by striking 2016, 3 percent
and inserting
2011, and episodes and visits ending on or after January 1, 2013, and
before January 1, 2016, 3 percent
.
Extension of increased Medicare payments for rural ground ambulance services
In general
Section 1834(l)(13)(A) of the Social Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended—
in the matter preceding clause (i)—
by striking
2007, and for
and inserting 2007, for
; and
by inserting
, and for such services described in clause (i) furnished on or after
March 1, 2012, and before January 1, 2013
after 2012
;
and
in clause (i), by
inserting , or 5 percent if such service is furnished on or after March
1, 2012, and before January 1, 2013
after 2012
.
Super rural ambulance
Section 1834(l)(12)(A) of the Social Security Act (42
U.S.C. 1395m(l)(12)(A)) is amended by striking March 1, 2012
and
inserting January 1, 2013
.
Extension of payment for technical component of certain physician pathology services
Section 542(c) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(as enacted into law by section 1(a)(6) of Public Law 106–554), as amended by
section 732 of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (42 U.S.C. 1395w–4 note), section 104 of division B of the Tax
Relief and Health Care Act of 2006 (42 U.S.C. 1395w–4 note), section 104 of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110–173),
section 136 of the Medicare Improvements for Patients and Providers Act of 2008
(Public Law 110–275), section 3104 of the Patient Protection and Affordable
Care Act (Public Law 111–148), section 105 of the Medicare and Medicaid
Extenders Act of 2010 (Public Law 111–309), and section 305 of the Temporary
Payroll Tax Cut Continuation Act of 2011 (Public Law 112–78) is amended by
striking the first two months of
.
Facilitating the provision of telehealth services across State lines
In general
For purposes of expediting the provision of telehealth services, for which payment is made under the Medicare program, across State lines, the Secretary of Health and Human Services shall, in consultation with representatives of States, physicians, health care practitioners, and patient advocates, encourage and facilitate the adoption of provisions allowing for multistate practitioner practice across State lines.
Definitions
In subsection (a):
Telehealth service
The term telehealth service has the meaning given that term in subparagraph (F) of section 1834(m)(4) of the Social Security Act (42 U.S.C. 1395m(m)(4)).
Physician, practitioner
The terms physician and practitioner have the meaning given those terms in subparagraphs (D) and (E), respectively, of such section.
Medicare program
The term Medicare program means the program of health insurance administered by the Secretary of Health and Human Services under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).
Medicare Part A payment for anesthesiologist services in certain rural hospitals based on CRNA pass-through rules
In general
Section 1814 of the Social Security Act (42 U.S.C. 1395f) is amended by adding at the end the following new subsection:
Anesthesiologist services provided in certain rural hospitals
Notwithstanding any other provision of this title, coverage and payment shall be provided under this part for physicians' services that are anesthesia services furnished by a physician who is an anesthesiologist in a rural hospital described in paragraph (3) in the same manner as payment is made under the exception provided in section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as added by section 608(c)(2) of the Family Support Act of 1988 and amended by section 6132 of the Omnibus Budget Reconciliation Act of 1989, (relating to payment on a reasonable cost, pass-through basis) for certified registered nurse anesthetist services furnished by a certified registered nurse anesthetist in a hospital described in such section 9320(k).
No payment shall be made under any other provision of this title for physicians' services for which payment is made under this subsection.
A rural hospital described in this paragraph is a hospital described in section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as so added and amended, except that—
any reference in such section to a certified registered nurse anesthetist or an anesthetist is deemed a reference to a physician who is an anesthesiologist or an anesthesiologist, respectively; and
any reference to January 1, 1988 or 1987 is deemed a reference to such date and year as the Secretary shall specify.
.
Effective date
The amendment made by subsection (a) shall apply to services furnished during cost reporting periods beginning on or after the date of the enactment of this Act.
Temporary floor on the practice expense geographic index for services furnished in rural areas outside of frontier States under the Medicare physician fee schedule
Section 1848(e)(1) of the Social Security Act (42 U.S.C. 1395w–4(e)(1)) is amended—
in subparagraph
(A), by striking and (I)
and inserting (I), and
(J)
; and
by adding at the end the following new subparagraph:
Floor at 1.0 on practice expense geographic index for services furnished in rural areas outside of frontier States
For purposes of payment for services furnished in a rural area (other than a rural area located in a State to which subparagraph (I) applies) on or after January 1, 2012, and before January 1, 2013, after calculating the practice expense index under subparagraph (A)(i), the Secretary shall increase any such index to 1.0 if such index would otherwise be less than 1.0. The preceding sentence shall not be applied in a budget neutral manner.
.
Revisions to standard for designation of sole community hospitals
Section 1886(d)(5)(D)(iv) of the Social
Security Act (42 U.S.C. 1395ww(d)(5)(D)(iv)) is amended by adding at the end
the following new sentence: Under such standard, the time required for
an individual to travel to the nearest alternative source of care shall be
measured over improved roads maintained by a local, State, or Federal
Government entity for use by the general public which is the most expeditious
and accessible route as designated by law enforcement for emergency vehicle
travel.
.
State offices of rural health
Section
338J(j)(1) of the Public Health Service Act (42 U.S.C. 254r(j)(1)) is amended
by inserting and 2012 through 2013
before the period.
Ensuring proportional representation of interests of rural areas on MEDPAC
In general
Section 1805(c)(2) of the Social Security Act (42 U.S.C. 1395b–6(c)(2)) is amended—
in subparagraph
(A), by inserting (consistent with the requirements of subparagraph
(E))
after rural representatives
; and
by adding at the end the following new subparagraph:
Proportional representation of interests of rural areas
In order to provide a balance between urban and rural representatives under subparagraph (A), the proportion of members who represent the interests of health care providers and Medicare beneficiaries located in rural areas shall be no less than the proportion of the total number of Medicare beneficiaries who reside in rural areas.
.
Effective date
The amendments made by subsection (a) shall apply to appointments made to the Medicare Payment Advisory Commission after the date of the enactment of this Act.
340B Program Improvement
Extension of discounts to inpatient drugs
In general
Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended—
in subsection (a)—
in paragraphs (1),
(2), and (5), by striking covered outpatient drug
each place
such term appears and inserting covered drug
; and
in paragraphs (1),
(7), and (9), by striking covered outpatient drugs
each place
such term appears and inserting covered drugs
;
in subsection
(b)(2)(B) by striking paragraph (3)(A)
and inserting
paragraph (3)
; and
in subsection (d),
by striking covered outpatient drugs
each place such term
appears and inserting covered drugs
.
Medicaid credits on inpatient drugs
Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by inserting after subsection (b) the following new subsection:
Medicaid credits on inpatient drugs
In general
For each cost reporting period, based on the most recently filed Medicare cost report under title XVIII of the Social Security Act and subject to paragraph (5), a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) and enrolled to participate in the drug discount program under this section shall provide to each State that has a plan for medical assistance under title XIX of such Act and that makes payment to such hospital for covered drugs provided to Medicaid recipients for inpatient use, a credit on the estimated annual purchases by such hospital of such covered drugs provided to such Medicaid recipients.
Amount of credit
In general
The credit described in paragraph (1), with respect to a hospital and cost reporting period described in such paragraph shall be equal to—
the product of—
the sum of the annual credit amounts (described in subparagraph (B)) calculated under subparagraph (B)(i) for each dosage form and strength of each covered drug purchased by the hospital during the cost reporting period; and
the estimated percentage of the purchases of covered drugs by the hospital during such period attributable to Medicaid recipients for inpatient use, as determined in accordance with subparagraph (D); and
subject to paragraph (3)(D), reduced by the amount by which the Medicaid inpatient reimbursement (as defined in subparagraph (E)(ii)) of the hospital for such period was reduced as a result of participation in the drug discount program under this section during such period by the hospital, as determined in accordance with subparagraph (E).
Annual credit amounts
For purposes of subparagraph (A)(i)(I), an annual credit amount, with respect to a covered drug purchased by a hospital described in paragraph (1) during a cost reporting period of the hospital—
is equal to the sum of the quarterly credit amounts calculated under subparagraph (C)(i), for each of the 4 quarters of the cost reporting period for such covered drug; and
shall be calculated for each dosage form and strength of such covered drug.
Quarterly credit amounts
For purposes of subparagraph (B)(ii), a quarterly credit amount, with respect to a covered drug purchased by a hospital described in paragraph (1) during a quarter of the cost reporting period of the hospital—
is equal to the product of—
the total number of units of each dosage form and strength of such covered drug purchased by the hospital during such quarter;
the average manufacturer price of the covered drug (for the unit of the dosage form and strength involved) during such quarter; and
half of the rebate percentage for the covered drug, as defined in subsection (a)(2); and
shall be calculated for—
each dosage form and strength of the covered drug purchased by the hospital; and
each of the 4 quarters of such cost reporting period.
Percentage of drug purchases attributable to medicaid recipients for impatient use
For purposes of subparagraph (A)(i)(II), the estimated percentage of the drug purchases of the hospital attributable to Medicaid recipients for inpatient use shall be equal to the Medicaid inpatient drug charges as reported on the most recently filed Medicare cost report of the hospital, divided by the total drug charges reported on the cost report.
Credit offset
In general
For purposes of subparagraph (A)(ii), the amount by which the Medicaid inpatient reimbursement of a hospital, with respect to a cost reporting period, is reduced as a result of the participation in the drug discount program under this section by the hospital shall be computed as the difference between—
the Medicaid inpatient reimbursement that would have otherwise been payable to the hospital for the cost reporting period if the hospital did not participate in such drug discount program; and
the actual Medicaid inpatient reimbursement payable to the hospital for the cost reporting period.
Medicaid inpatient reimbursement defined
For purposes of this subsection, the term Medicaid inpatient reimbursement means the total payments received by the hospital under the State plan under title XIX of the Social Security Act for providing inpatient services to Medicaid recipients.
Requirements
In general
A hospital shall not be required to provide a credit under paragraph (1) to a State unless, not later than 30 days after receiving the information described in subparagraph (B), the State calculates in accordance with paragraph (2) the amount of the credit owed by the hospital under paragraph (1) and provides the hospital with both the amount of such credit so owed and an explanation of how the State calculated such credit.
Hospital provision of information
Not later than 30 days after the date of the filing of the most recently filed Medicare cost report of a hospital described in paragraph (1), the hospital shall provide the State involved with the information described in subparagraphs (C)(i)(I) and (D) of paragraph (2). With respect to each covered drug purchased during the cost reporting period, the hospital shall provide the National Drug Code, date of purchase, and the number of units purchased. Submission of such information shall not be required if a covered drug has not been assigned a National Drug Code at the time of purchase.
Access to AMP and rebate data
The Secretary shall establish a system for giving States access to the information necessary for them to calculate credits under paragraph (2), with respect to covered drugs, including the average manufacturer price and rebate percentage for such covered drugs.
Credit offset
Paragraph (2)(A)(ii) shall be applied, with respect to a credit owed by a hospital under paragraph (1), only if, not later than 30 days after filing the most recent Medicare cost report, the hospital submits to the State involved—
a request for the State to apply such paragraph and to calculate the amount described in such paragraph in accordance with paragraph (2)(E); and
the data needed by the State to determine the amount of the Medicaid inpatient reimbursement described in paragraph (2)(E)(i)(I) for such hospital.
Disputes
A State and hospital described in paragraph (1) shall have access to the same State dispute resolution procedures and system applicable to Medicaid reimbursement matters under title XIX of the Social Security Act.
Payment deadline
A hospital shall provide to a State the credits owed by such hospital under paragraph (1) not later than 60 days after the hospital receives the information described in paragraph (3)(A).
Opt out
A hospital shall not be required to provide a credit under paragraph (1) to a State if the hospital and State agree to an alternative arrangement.
Offset against medical assistance
Amounts received by a State under this subsection shall be considered to be a reduction in the amount expended under the State plan for medical assistance for purposes of section 1903(a)(1) of the Social Security Act.
Medicaid recipient defined
For purposes of this subsection, the term Medicaid recipient means, with respect to a State, an individual who receives benefits under the State plan under title XIX of the Social Security Act.
.
Conforming amendments
Section 1927 of the Social Security Act (42 U.S.C. 1396r–8) is amended—
in subsection (a)(5)—
in subparagraph
(A), by striking covered outpatient drugs
and inserting
covered drugs (as defined in section 340B(b)(2) of the Public Health
Service Act)
; and
by striking subparagraphs (D) and (E); and
in subsection (c)(1)(C)(i)—
by redesignating subclauses (II) through (VI) as subclauses (III) through (VII), respectively; and
by inserting after subclause (I) the following:
any prices charged for a covered drug, as defined in section 340B(b)(2) of the Public Health Service Act;
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Prohibition against duplicate discounts for physician administered drugs
Section 340B(a)(5)(A) of the Public Health Service Act (42 U.S.C. 256b) is amended by adding at the end the following:
Physician administered drugs
A hospital described in subparagraph (L), (M), (N), or (O) of paragraph (4) shall not be required under section 1927(a)(7) of the Social Security Act to report National Drug Code numbers for drugs administered by a physician (or under a physician’s supervision) if the State is precluded from seeking a rebate on such drugs because such drugs were purchased at a discount under this section. Nothing in this clause shall relieve a hospital of its obligation to submit National Drug Codes in accordance with subsection (c)(3)(B).
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Continued inclusion of orphan drugs in definition of covered outpatient drugs; technical amendment
In general
Section 340B of the Public Health Service Act (42 U.S.C. 256b) is amended by striking subsection (e).
Effective date
The amendment made by subsection (a) shall apply to drugs purchased on or after March 30, 2010.
Application of rules for determining provider-based status for certain entities
Notwithstanding any other provision of law, in making determinations of provider-based status under title XVIII of the Social Security Act, the facility or organization shall be treated as satisfying any requirements and standards for geographic location in relation to a hospital or a critical access hospital if the facility or organization is described in subparagraph (L), (M), (N), or (O) of section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 256b(a)(4)).