PIMA of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2143 To prevent wasteful and abusive billing of ancillary services to the Medicare program, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 9, 2019 Ms. SPEIER (for herself and Ms. TITUS) 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 provi- sions as fall within the jurisdiction of the committee concerned A BILL To prevent wasteful and abusive billing of ancillary services to the Medicare program, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Promoting Integrity 4 in Medicare Act of 2019’’ or ‘‘PIMA of 2019’’. 5 SEC. 2. FINDINGS; PURPOSES. 6 (a) FINDINGS.—Congress finds the following: 7 (1) Recent studies by the Government Account- 8 ability Office (GAO) examining self-referral practices 9 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 2 •HR 2143 IH in advanced diagnostic imaging and anatomic pa- 1 thology determined that financial incentives were the 2 most likely cause of increases in self-referrals. 3 (2) For advanced diagnostic imaging, GAO 4 stated that ‘‘providers who self-referred made 5 400,000 more referrals for advanced imaging serv- 6 ices than they would have if they were not self-refer- 7 ring’’, at a cost of ‘‘more than $100 million’’ in 8 2010. 9 (3) For anatomic pathology, GAO found that 10 ‘‘self-referring providers likely referred over 918,000 11 more anatomic pathology services’’ than they would 12 have if they were not self-referring, costing Medicare 13 approximately $69,000,000 more in 2010 than if 14 self-referral was not permitted. 15 (4) For radiation oncology, GAO found that in- 16 tensity modulated radiation therapy (IMRT) utiliza- 17 tion among self-referring groups increased by 356 18 percent, with overall increases in IMRT utilization 19 rates and spending due entirely to services per- 20 formed by limited-specialty groups. The GAO con- 21 cluded that ‘‘the higher use of IMRT by self-refer- 22 ring providers results in higher costs for Medicare 23 and beneficiaries. To the extent that treatment deci- 24 sions are driven by providers’ financial interest and 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 3 •HR 2143 IH not by patient preference, these increased costs are 1 difficult to justify’’. 2 (5) For physical therapy, GAO found that ‘‘in 3 the year a provider began to self-refer, physical ther- 4 apy service referrals increased at a higher rate rel- 5 ative to non-self-referring providers of the same spe- 6 cialty’’. 7 (6) Noting the rapid growth of services covered 8 by the in-office ancillary services (IOAS) exception 9 and evidence that these services are sometimes fur- 10 nished inappropriately by referring physicians, the 11 Medicare Payment Advisory Commission (MedPAC) 12 stated that physician self-referral of ancillary serv- 13 ices creates incentives to increase volume under 14 Medicare’s current fee-for-service payment systems 15 and the rapid volume growth contributes to Medi- 16 care’s rising financial burden on taxpayers and bene- 17 ficiaries. 18 (7) The President’s Fiscal Year 2017 Budget 19 includes the change to remove the four services: ad- 20 vanced diagnostic imaging, anatomic pathology, radi- 21 ation oncology, and physical therapy from the IOAS 22 exception to the Stark Law and cited the change as 23 generating a savings score of $4,980,000,000 over 24 10 years. The nonpartisan Congressional Budget Of- 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 4 •HR 2143 IH fice’s analysis of the President’s Fiscal Year 2017 1 Budget listed the change as generating a savings of 2 $3,300,000,000 over 10 years. 3 (8) According to the Centers for Medicare & 4 Medicaid Services, a key rationale for the IOAS ex- 5 ception was to permit physicians to provide ancillary 6 services in their offices to better inform diagnosis 7 and treatment decisions at the time of the patient’s 8 initial office visit. 9 (9) It is necessary, therefore, to distinguish be- 10 tween services and procedures that were intended to 11 be covered by the IOAS exception, such as routine 12 clinical laboratory services or simple x-rays that are 13 provided during the patient’s initial office visit, and 14 other health care services which were clearly not en- 15 visioned to be covered by that exception because they 16 cannot be performed or completed during the pa- 17 tient’s initial office visit. 18 (10) According to a 2010 Health Affairs study, 19 less than 10 percent of CT, MRI, and Nuclear Medi- 20 cine scans take place on the same day as the initial 21 patient office visit. 22 (11) According to a 2012 Health Affairs study, 23 urologists’ self-referrals for anatomic pathology serv- 24 ices of biopsy specimens is linked to increased use 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 5 •HR 2143 IH and volume billed along with a lower detection of 1 prostate cancer. 2 (12) According to an October 2011 Laboratory 3 Economics report, there has been an increase in the 4 number of anatomic pathology specimen units billed 5 to the Medicare part B program from 2006 through 6 2010, specifically for CPT Code 88305, and the rate 7 of increase billed by physician offices for this service 8 is accelerating at a far greater pace than the rest of 9 the provider segments. 10 (13) According to a 2013 American Academy of 11 Dermatology Pathology Billing paper, arrangements 12 involving the split of the technical and professional 13 components of anatomic pathology services among 14 different providers may endanger patient safety and 15 undermine quality of care. 16 (14) In November 2012, Bloomberg News re- 17 leased an investigative report that scrutinized or- 18 deals faced by California prostate cancer patients 19 treated by a urology clinic that owns radiation ther- 20 apy equipment. The report found that physician self- 21 referral resulted in a detrimental impact on patient 22 care and drove up health care costs in the Medicare 23 program. The Wall Street Journal, the Washington 24 Post, and the Baltimore Sun have also published in- 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 6 •HR 2143 IH vestigations showing that urology groups owning ra- 1 diation therapy machines have utilization rates that 2 rise quickly and are well above national norms for 3 radiation therapy treatment of prostate cancer. 4 (15) According to a 2010 MedPAC report, only 5 3 percent of outpatient physical therapy services 6 were provided on the same day as an office visit, 7 only 9 percent within 7 days of an office visit, and 8 only 14 percent within 14 days of an office visit. 9 These services are not integral to the physician’s ini- 10 tial diagnosis and do not improve patient conven- 11 ience because patients must return for physical ther- 12 apy treatments. 13 (16) In an April 2018, European Urology arti- 14 cle authored by leading urologists about Medicare 15 beneficiaries with prostate cancer diagnoses, re- 16 searchers found, ‘‘Urologists practicing in single-spe- 17 cialty groups with an ownership interest in radiation 18 therapy are more likely to treat men with prostate 19 cancer, including those with a high risk of noncancer 20 mortality.’’. This suggests that urologists practicing 21 in single-specialty groups with an ownership interest 22 in radiation therapy are more likely to treat, and 23 even potentially overtreat, patients with IMRT than 24 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 7 •HR 2143 IH those affiliated with a multispecialty practice or a 1 group without an ownership stake. 2 (17) In a January 2019, JAMA Oncology arti- 3 cle, authors systematically reviewed 18 studies to as- 4 sess physicians’ response to reimbursement incen- 5 tives on cancer care delivery across various clinical 6 settings. Across the studies, the authors consistently 7 found that ‘‘the ability to self-refer for radiation on- 8 cology services was associated with increased use of 9 radiation therapy’’. 10 (18) Those services intended to be covered 11 under the IOAS exception are not affected by this 12 legislation. 13 (19) The exception to the ownership or invest- 14 ment prohibition for rural providers in the ‘‘Stark’’ 15 rule is not affected by this legislation. 16 (b) PURPOSES.—The purposes of this Act are the fol- 17 lowing: 18 (1) Maintain the in-office ancillary services ex- 19 ception and preserve its original intent by removing 20 certain complex services from the exception—specifi- 21 cally, advanced imaging, anatomic pathology, radi- 22 ation therapy, and physical therapy. 23 (2) Protect patients from misaligned provider 24 financial incentives. 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 8 •HR 2143 IH (3) Protect Medicare resources by saving bil- 1 lions of dollars. 2 (4) Accomplish the purposes described in para- 3 graphs (1), (2), and (3) in a manner that does not 4 alter the existing exception to the ownership or in- 5 vestment prohibition for rural providers. 6 SEC. 3. LIMITATION ON APPLICATION OF PHYSICIANS’ 7 SERVICES AND IN-OFFICE ANCILLARY SERV- 8 ICES EXCEPTIONS. 9 (a) IN GENERAL.—Section 1877(b) of the Social Se- 10 curity Act (42 U.S.C. 1395nn(b)) is amended— 11 (1) in paragraph (1), by inserting ‘‘, other than 12 specified non-ancillary services,’’ after ‘‘section 13 1861(q))’’; and 14 (2) in paragraph (2), by inserting ‘‘, specified 15 non-ancillary services,’’ after ‘‘(excluding infusion 16 pumps)’’. 17 (b) INCREASE OF CIVIL MONEY PENALTIES.—Sec- 18 tion 1877(g) of the Social Security Act (42 U.S.C. 19 1395nn(g)) is amended— 20 (1) in paragraph (3), by inserting ‘‘, unless 21 such bill or claim included a bill or claim for a speci- 22 fied non-ancillary service, in which case the civil 23 money penalty shall be not more than $25,000 for 24 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 9 •HR 2143 IH each such service’’ before the period at the end of 1 the first sentence; and 2 (2) in paragraph (4), by inserting ‘‘(or 3 $150,000 if such referrals are for specified non-an- 4 cillary services)’’ after ‘‘$100,000’’. 5 (c) ENHANCED SCREENING OF CLAIMS.—Section 6 1877(g) of the Social Security Act (42 U.S.C. 1395nn(g)) 7 is further amended by adding at the end the following new 8 paragraph: 9 ‘‘(7) COMPLIANCE REVIEW FOR SPECIFIED 10 NON-ANCILLARY SERVICES.— 11 ‘‘(A) IN GENERAL.—Not later than 180 12 days after the date of the enactment of this 13 paragraph, the Secretary, in consultation with 14 the Inspector General of the Department of 15 Health and Human Services, shall review com- 16 pliance with subsection (a)(1) with respect to 17 referrals for specified non-ancillary services in 18 accordance with procedures established by the 19 Secretary. 20 ‘‘(B) FACTORS IN COMPLIANCE REVIEW.— 21 Such procedures— 22 ‘‘(i) shall, for purposes of targeting 23 types of entities that the Secretary deter- 24 mines represent a high risk of noncompli- 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 10 •HR 2143 IH ance with subsection (a)(1) with respect to 1 such billing for such specified non-ancillary 2 services, apply different levels of review 3 based on such type; and 4 ‘‘(ii) may include prepayment reviews, 5 claims audits, focused medical review, and 6 computer algorithms designed to identify 7 payment or billing anomalies.’’. 8 (d) DEFINITION OF SPECIFIED NON-ANCILLARY 9 SERVICES.—Section 1877(h) of the Social Security Act 10 (42 U.S.C. 1395nn(h)) is amended by adding at the end 11 the following new paragraphs: 12 ‘‘(8) SPECIFIED NON-ANCILLARY SERVICES.— 13 ‘‘(A) Subject to subparagraph (B), the 14 term ‘specified non-ancillary service’ means the 15 following: 16 ‘‘(i) Anatomic pathology services, as 17 defined by the Secretary and including the 18 technical or professional component of the 19 following: 20 ‘‘(I) Surgical pathology. 21 ‘‘(II) Cytopathology. 22 ‘‘(III) Hematology. 23 ‘‘(IV) Blood banking. 24 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 11 •HR 2143 IH ‘‘(V) Pathology consultation and 1 clinical laboratory interpretation serv- 2 ices. 3 ‘‘(ii) Radiation therapy services and 4 supplies, as defined by the Secretary. 5 ‘‘(iii) Advanced diagnostic imaging 6 studies (as defined in section 7 1834(e)(1)(B)). 8 ‘‘(iv) Physical therapy services (as de- 9 scribed in paragraph (6)(B)). 10 ‘‘(v) Any other service that the Sec- 11 retary has determined is not usually pro- 12 vided and completed as part of the office 13 visit to a physician’s office in which the 14 service is determined to be necessary. 15 ‘‘(B) The term ‘specified non-ancillary 16 service’ does not include the following: 17 ‘‘(i) Any service that is furnished— 18 ‘‘(I) in an urban area (as defined 19 in section 1886(d)(2)(D)) to an indi- 20 vidual who resides in a rural area (as 21 defined in such section); and 22 ‘‘(II) to such individual in its en- 23 tirety on the same day as the day on 24 which, with respect to the condition 25 VerDate Sep 11 2014 02:46 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2143.IH H2143 kjohnson on DSK79L0C42 with BILLS 12 •HR 2143 IH for which the service is furnished, the 1 initial office visit of the individual for 2 such condition occurs. 3 ‘‘(ii) Any service that is furnished— 4 ‘‘(I) by a provider of services or 5 supplier participating in an account- 6 able care organization that partici- 7 pates in the shared savings program 8 established under section 1899; and 9 ‘‘(II) to a Medicare fee-for-serv- 10 ice beneficiary (as defined in section 11 1899(h)(3)) assigned to such account- 12 [Text truncated for display. 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