,i #aacth ,,congress #ast ,session ,h4 ,r4 #agag ,,in ,,the ,,house ,,of ,,representatives ,april #bd1 #bjac ,mr4 ,price of ,georgia 7for himself1 ,mr4 ,larson of ,connecticut1 ,mr4 ,thompson of ,pennsylvania1 ,mr4 ,braley of ,iowa1 ,mr4 ,roe of ,tennessee1 ,mr4 ,ryan of ,ohio1 ,mr4 ,tiberi1 ,mr4 ,loebsack1 ,mr4 ,joyce1 ,mr4 ,mc,kinley1 ,mrs4 ,capito1 ,mr4 ,des,jarlais1 ,mrs4 ,blackburn1 ,mr4 ,barletta1 ,mr4 ,grimm1 ,mr4 ,austin ,scott of ,georgia1 ,mr4 ,harper1 ,mr4 ,marino1 ,mr4 ,crenshaw1 ,mr4 ,king of ,new ,york1 ,mr4 ,johnson of ,ohio1 ,mr4 ,fortenberry1 ,mr4 ,chabot1 ,mr4 ,posey1 ,mr4 ,lankford1 and ,mr4 ,nunnelee7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce1 and in addition to the ,committees on ,ways and ,means and ,appropriations1 for a period to be subsequently determined by the ,speaker1 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 establish a market pricing program for durable medical equipment1 prosthetics1 orthotics1 and supplies 7,,dmepos7 under part ,b of the ,medicare program4 #a4 ,short title ,this ,act may be cited as the ,medicare ,,dmepos ,market ,pricing ,program ,act of #bjac4 #b4 ,termination of competitive acquisition program ,section #ahdg7;a77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c7;a77#a77 is amended-- 7#a7 in subparagraph 7,b71 by striking ,the programs and inserting ,subject to subparagraph 7,g71 the programs2 7#b7 in subparagraph 7,d71 by striking clauses 7ii7 and 7iii72 and 7#c7 by adding at the end the following new subparagraph3 7,g7 ,termination of program2 transition 7i7 ,no additional competition rounds ,notwithstanding subparagraph 7,b71 the competition under this section shall end on ,december #ca1 #bjac1 with round #a4 ,the ,secretary shall take no further action to implement round #b of the competitive acquisition program1 the national mail order competitive acquisition program1 or any subsequent round of the competitive acquisition program under this section4 7ii7 ,contract termination ,the contracts awarded under this section before the date of the enactment of this subparagraph shall terminate on ,july #a1 #bjac1 and no payment shall be made under this title after such date based on such a contract4 ,to the extent that any damages may be applicable as a result of the termination of such contracts1 such damages shall be payable from the ,federal ,supplementary ,medical ,insurance ,trust ,fund under section #ahda4 ,nothing in this clause shall be construed to provide an independent cause of action or right to administrative or judicial review with regard to the termination provided under this clause4 4 #c4 ,transitional payment after termination of ,,dmepos competitive bidding program 7a7 ,transitional payment rules 7#a7 ,payment for durable medical equipment 7,a7 ,in general ,section #ahcd7;a77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7a77#a77 is amended-- 7i7 in subparagraph 7,f77i7-- 7,i7 by inserting and before ,july #a1 #bjac1 after ,january #a1 #bjaa12 7,,ii7 by striking 1 subject to subparagraphs 7,g7 and 7,h712 and 7,,iii7 by adding and at the end2 7ii7 in subparagraph 7,f77ii7-- 7,i7 by striking 7and1 in the case of covered items and all that follows through subject to clause 7iii7 shall72 and 7,,ii7 by striking 2 and at the end and inserting a period2 7iii7 by striking clause 7iii7 of subparagraph 7,f72 7iv7 by striking subparagraphs 7,g7 and 7,h72 and 7v7 by adding at the end the following new subparagraph3 7,g7 ,payment rates in round #a areas during transition 7i7 ,in general ,in the case of covered items and services that are furnished in an area that had been designated by the ,secretary as a competitive acquisition program under section #ahdg7;a77#a77;,b77i77,i7 on or after the date on which contracts for the furnishing of such covered items and services expire1 the payment basis under this subsection for such items and services furnished in such area shall be the amount described in clause 7ii7 or 7iii71 as the case may be4 7ii7 ,payment rates in round #b for items and services that are not diabetic testing supplies 7,i7 ,in general ,in the case of covered items that were selected to be furnished in the competitive acquisition program 7excluding diabetic supplies7 in a competitive acquisition area selected pursuant to section #ahdg7;a77#a77;,b77i77,,ii7 on or after ,july #a1 #bjac1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c1 subject to subclause 7,,ii71 the payment basis under this subsection for such items and services furnished in such areas shall be #ie percent of the amount established under this subsection4 7,,ii7 ,further reductions in #bjad and #bjae ,in the case of covered items described in subclause 7,i7 that are furnished during #bjad1 the payment basis under this subsection for such items furnished in such areas shall be reduced by #aj percent from the amount described in such subclause4 ,in the case of such items and services that are furnished in such areas on or after ,january #a1 #bjae1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c1 the payment basis under this subsection for such items and services shall be further reduced by #aj percent after taking into account the reduction effected under the preceding sentence4 7iii7 ,payment rates for diabetic supplies 7,i7 ,in general ,in the case of all diabetic testing supplies1 mail order and non-mail order 7,,hcpcs ,codes ,a#dbcc1 ,a#dbcd1 ,a#dbce1 ,a#dbcf1 ,a#dbec1 ,a#dbef1 ,a#dbeh1 and ,a#dbei1 including the ,,kl modifier71 effective ,july #a1 #bjac1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c and subject to subclause 7,,ii71 the payment basis under this subsection for such supplies shall be #ij percent of the amount otherwise established under this subsection4 7,,ii7 ,further reductions in #bjad and #bjae ,in the case of supplies described in subclause 7,i7 that are furnished during #bjad1 the payment basis under this subsection for such items furnished in such areas shall be reduced by #ae percent from the amount described in such subclause4 ,in the case of such supplies that are furnished in such areas on or after ,january #a1 #bjae1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c1 the payment basis under this subsection for such supplies shall be further reduced by #ae percent after taking into account the reduction effected under the preceding sentence4 4 7,b7 ,conforming amendments ,section #ahdb7s7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acieu7s77 is amended-- 7i7 in paragraph 7#c71 in the matter preceding subparagraph 7,a71 by inserting and that are furnished in such an area on or before ,july #a1 #bjac after section #ahdg7;a72 and 7ii7 by adding at the end the following new paragraph3 7#d7 7,a7 7i7 ,in the case of items and services described in paragraph 7#b77;,d7 that are furnished in an area that had been designated by the ,secretary as a competitive acquisition area under section #ahdg7;a77#a77;,b77i77,i7 on or after the date on which contracts for the furnishing of such covered items and services expire1 the payment basis under this subsection for such items and services furnished in such area shall be the amounts described in clause 7ii74 7ii7 7,i7 ,in the case of items and services described in paragraph 7#b77;,d7 that were selected to be furnished in the competitive acquisition program in a competitive acquisition area selected pursuant to section #ahdg7;a77#a77;,b77i77,,ii7 on or after ,july #a1 #bjac1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c1 subject to subclause 7,,ii71 the payment basis under this subsection for such items and services furnished in such areas shall be #ie percent of the amount otherwise established under this subsection4 7,,ii7 ,in the case of covered items and services described in subclause 7,i7 that are furnished during #bjad1 the payment basis under this subsection for such items and services furnished in such areas shall be reduced by #aj percent from the amount described in such subclause4 ,in the case of such items and services that are furnished in such areas on or after ,january #a1 #bjae1 and before the date on which the ,secretary implements the market pricing program under section #ahdg;,c1 the payment basis under this subsection for such supplies shall be further reduced by #aj percent after taking into account the reduction effected under the preceding sentence4 7,b7 7i7 ,in the case of items and services described in paragraph 7#b77;,d7 that are included in the market pricing program under section #ahdg;,c1 the payment basis under this subsection for such items and services furnished in such area shall be the payment basis determined under such competitive acquisition program4 7ii7 ,the ,secretary may use information on the payment determined under such market pricing program to adjust the payment amount otherwise applicable under clause 7i7 for an area that is not a market pricing area under section #ahdg;,c1 and in the case of such adjustment1 paragraphs 7#h7 and 7#i7 of subsection 7b7 shall not be applied4 4 7#b7 ,treatment of suppliers in competitive acquisition program areas ,section #ahdg7;b77#d7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c7;b77#d77 is amended-- 7,a7 in subparagraph 7,a7-- 7i7 in the first sentence1 by striking ,the ,secretary may limit and inserting ,until ,december #ca1 #bjac1 the ,secretary may limit2 and 7ii7 by inserting after the first sentence the following3 ,the preceding sentence shall not apply to items and services furnished in an eligible auction area 7within the meaning of subsection 7a77#d7 of section #ahdg;,c7 on or after the date of the implementation of the market pricing program under such section42 and 7,b7 by adding at the end the following new subparagraph3 7,c7 ,non-contracted suppliers in market pricing program ,the ,secretary also shall award contracts to any supplier that meets eligibility requirements under this title for the furnishing of such items and services so long as the supplier accepts the price established under such program as payment in full for such items and services4 4 7#c7 ,payment for off-the-shelf orthotics ,section #ahcd7;h77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7h77#a77 is amended by adding at the end the following new subparagraph3 7,i7 ,application of market pricing program2 limitation of inherent reasonableness authority ,in the case of orthotics described in subsection 7b77#a77,k7 of section #ahdg;,c furnished on or after ,january #a1 #bjad1 in an eligible auction area1 that are included in a market pricing program under such section-- 7i7 the payment basis under this subsection for such orthotics furnished in such area shall be the payment basis determined under such market pricing program2 and 7ii7 the ,secretary may use information on the payment determined under such market pricing program to adjust the payment amount otherwise recognized under subparagraph 7,b77ii7 for an area that is not an eligible auction area under section #ahdg;,c1 and in the case of such adjustment1 paragraphs 7#h7 and 7#i7 of section #ahdb7;b7 shall not be applied4 4 7b7 ,policy after implementation of the market pricing program 7#a7 ,in general ,section #ahcd7;a77#a7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciem7a77#a771 as amended by subsection 7a77#a77;,b71 is amended by adding at the end the following new subparagraph3 7,h7 ,application of market pricing program2 limitation of inherent reasonableness authority 7i7 ,in general ,in the case of market priced items and services described in section #ahdg;,c7b77#a7 furnished on or after the date of implementation of a market pricing program for which a price has been established under the program conducted in an eligible auction area under section #ahdg;,c1 the payment basis under this subsection-- 7,i7 in the eligible auction area shall be the amount determined under the auction conducted in such eligible auction area for such items and services2 or 7,,ii7 in another eligible auction area shall be the amount determined under subclause 7,i7 adjusted by the appropriate factor described in section #ahdg;,c7d77#g77;,b77iv74 7ii7 ,no adjustment in payment amount during initial two-year period of pricing program ,during the term of any contract awarded pursuant to section #ahdg;,c7d77#f7 for an item and service described in clause 7i71 the ,secretary may not adjust the payment basis established under such clause to take into account the effects of a later-conducted auction during that two-year contract period4 ,the ,secretary may1 at the termination of a contract awarded under section #ahdg;,c7d77#f7 for such an item or service1 adjust such payment basis to take into account the effects of a later-conducted auction4 7iii7 ,market pricing in rural and non-competitive areas ,the ,secretary1 after consultation with the auction expert under section #ahdg;,c1 may 7and1 in the case of covered items furnished on or after ,january #a1 #bjaf1 shall7 use information on the payment determined under such market pricing program to adjust the payment amount otherwise recognized under subparagraph 7,b77ii7 for an area in which an auction has not been conducted pursuant to section #ahdg;,c7a74 7iv7 ,continued use of additional information ,in the case of covered items furnished on or after ,january #a1 #bjaf1 the ,secretary shall continue to make such adjustments described in clause 7ii7 as1 under such market pricing program1 additional covered items are phased in or information is updated as contracts are renewed under such program4 4 7#b7 ,regulatory authority ,section #ahcd7;a77#a77;,g7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c7;a77#a77;,g77 is amended-- 7,a7 in the subparagraph heading1 by inserting or market pricing before rates2 7,b7 by striking subparagraph 7,f77ii7 and inserting subparagraph 7,f77ii71 subparagraph 7,h77iii712 and 7,c7 by inserting or eligible auction areas in which an auction has been conducted1 after ,june #cj1 #bjac1 after competitive acquisition areas4 #d4 ,establishment of ,,dmepos market pricing program 7a7 ,in general ,part ,b of title ,,xviii of the ,social ,security ,act is amended by inserting after section #ahdg;,b 7#db ,u4,s4,c4 #aciew-#c;b7 the following new section3 #ahdg;,c4 ,,dmepos market pricing program 7a7 ,establishment 7#a7 ,in general ,the ,secretary shall establish and implement a market pricing program 7in this section referred to as market pricing program7 under which auctions are conducted in eligible auction areas 7as defined in paragraph 7#d77 throughout the ,united ,states for the furnishing of market priced items and services 7as defined in subsection 7b77 for which payment is made under this part4 7#b7 ,roles of auction expert and market monitor ,the elements of the market pricing program1 including eligible auction areas1 auction design1 establishing of clearing prices1 and conduct of auctions1 shall be established and operated in consultation with1 and after input and review by1 the auction expert and the market monitor under subsection 7g74 ,in this section1 the terms auction expert and market monitor refer to the respective auction expert and market monitor contracted with under subsection 7g77#a74 7#c7 ,implementation ,the market pricing program shall be implemented in all eligible auction areas so that market pricing occurs nationwide in the first year of implementation consistent with the following3 7,a7 ,first year of implementation ,in the first year of implementation-- 7i7 auctions under the program shall be held in at least #bj percent of eligible auction areas2 7ii7 prices in these areas will be set by such auctions2 7iii7 in each eligible auction area #b categories of items shall be selected for auction2 7iv7 prices for categories not selected for auction in the area shall be set by reference to auctions held for those categories in econometrically similar areas2 and 7v7 in those areas in which no auctions are held1 prices for all categories will be set by reference to auctions held for those categories in econometrically similar areas4 7,b7 ,second year of implementation ,in the second year of implementation-- 7i7 auctions shall be held in other eligible auction areas that include #aj percent of eligible auction areas2 and 7ii7 prices in those areas in which no auctions are held or for categories in which an auction is not held1 shall be set in the same manner as under subparagraph 7,a74 7,c7 ,subsequent years ,in each subsequent year of implementation-- 7i7 auctions shall be held in an additional #aj percent of eligible auction areas1 selected by the ,secretary annually on an ongoing and rotating basis1 until all eligible auction areas have been covered2 and 7ii7 prices in those areas in which no auctions are held or for categories in which an auction is not held1 shall be set in the same manner as under subparagraph 7,a74 7,d7 ,once the market pricing program is applied throughout the ,united ,states under subparagraph 7,c71 the ,secretary shall conduct auctions for different eligible auction areas throughout the ,united ,states on an ongoing and rotating basis covering #aj percent of eligible auction areas no later than ,march for each subsequent year4 7,e7 ,the requirements of this section shall apply to each subsequent round of market-priced auctions in the same manner that such requirements apply to the initial market-priced auction4 7#d7 ,eligible auction areas 7,a7 ,in general ,in this section and section #ahcd1 the term eligible auction areas means counties1 aggregations of counties1 or parts of counties1 not excluded under subparagraph 7,d71 as established by the ,secretary4 7,b7 ,market areas must reflect economic interdependency ,in determining and selecting eligible auction areas1 the ,secretary shall choose1 from among counties1 aggregations of counties1 or parts of counties1 auction areas that form an economically interdependent area reflecting standard econometric market models4 ,nothing in this subparagraph shall preclude the ,secretary from subdividing a large county to take into account population and geographic size in establishing auction areas in order to comply with this subparagraph4 7,c7 ,selection of auction areas ,in selecting auction areas in which an auction will be conducted under this section1 the ,secretary shall ensure that several auction areas of each econometric model are chosen4 7,d7 ,exclusion of certain auction areas ,the ,secretary shall not subject areas described in clause 7iii7 of section #ahdg7;a77#a77;,d7 to market program reimbursement rates before the year specified in such clause4 7#e7 ,application of certain policies applicable to competitive acquisition programs ,the following provisions of subsection 7a77#a7 of section #ahdg shall apply to the market pricing program in the same manner as they apply to competitive acquisition programs under such section except as otherwise provided3 7,a7 ,subparagraph 7,c7 7relating to waiver of certain provisions74 7,b7 ,subparagraph 7,e7 7relating to verification by ,,oig71 except that the assessment shall be of market pricing and subsequent pricing determinations that are the basis for auction prices and single payment amounts for items and services in eligible auction areas and shall be conducted in the first two years of the market pricing program and may continue in subsequent years of the program4 7,c7 ,subparagraph 7,f7 7relating to feedback on missing financial documentation71 except that any reference to a round of a program is deemed a reference to a year of the market pricing program4 7b7 ,market priced items and services defined 7#a7 ,in general ,in this section1 subject to paragraph 7#b71 the term market priced items and services means the following3 7,a7 ,oxygen supplies and equipment4 7,b7 ,standard power wheelchairs1 power scooters1 and related accessories4 7,c7 ,manual wheelchairs4 7,d7 ,enteral nutrients1 equipment1 and supplies4 7,e7 ,continuous positive airway pressure devices1 respiratory assistive devices1 and related supplies4 7,f7 ,hospital beds and related accessories4 7,g7 ,walkers and related accessories4 7,h7 ,support services 7,group #b mattresses and overlays74 7,i7 ,negative pressure wound therapy pumps and related supplies and accessories4 7,j7 ,diabetic supplies4 7,k7 ,off-the-shelf orthotics described in section #ahdg7;a77#b77;,c7 furnished on or after ,july #a1 #bjac4 7,l7 ,external infusion pumps and supplies4 7,m7 ,other items and services 7other than those items and services specified in paragraph 7#b77 that could have been subject to participation in competitive acquisition programs under section #ahdg7;a77#a74 7#b7 ,excluded items ,such term does not include the following3 7,a7 ,an adjustable skin protection cushion used in connection with a wheelchair4 7,b7 ,a complex rehabilitative power wheelchair and related accessories4 7,c7 ,a manual wheelchair billed using current ,,hcpcs ,codes ,k#jjje or ,e#aafa1 and related accessories for such a wheelchair4 7,d7 ,a medical device classified in class ,,iii under the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7c7 ,market pricing program requirements 7#a7 ,in general ,the ,secretary shall establish an auction design through the process described in paragraph 7#b71 that meets the requirements of paragraph 7#c71 and shall ensure that the first auction will be conducted for all eligible auction areas no later than #ad months after the date of entering into the contract with the auction expert under subsection 7g77#a74 7#b7 ,auction process2 input of stakeholders2 design 7,a7 ,transparent process required 7i7 ,in general ,in establishing such auction design1 the ,secretary shall utilize an open and transparent process that involves all relevant stakeholders 7as defined in clause 7ii77 in the market1 including through the auction plan conference and other outreach efforts4 7ii7 ,relevant stakeholders ,for purposes of clause 7i71 the term relevant stakeholders means suppliers and manufacturers of market priced items and services 7and trade associations representing such suppliers and manufacturers71 physicians1 and individuals entitled to benefits under this title 7and representatives of such individuals74 7,b7 ,draft auction design ,not later than #b months after the date the auction expert first begins service under subsection 7g77#a71 the auction expert shall develop a draft auction design that shall propose auction areas nationwide1 lead products for each product category1 and the price index associated with each lead product1 and proposed rules for the conduct of auctions4 7,c7 ,design conference 7i7 ,in general ,not later than #d months after the date the auction expert first begins service under subsection 7g77#a71 the ,secretary shall convene a design conference 7in this paragraph referred to as the design conference7 for the auction process under this section4 ,the auction expert shall chair the conference4 7ii7 ,participants ,the participants at the design conference shall include at least the following3 7,i7 ,manufacturers and suppliers of ,,dmepos ,representatives of market priced items and services4 7,,ii7 ,beneficiaries ,representatives of individuals entitled to benefits under this part4 7,,iii7 ,,cms ,the ,administrator of the ,centers for ,medicare ,medicaid ,services and other appropriate ,federal personnel4 7,,iv7 ,program advisory and oversight committee ,the members of the committee referred to in paragraph 7#c74 7iii7 ,purpose of conference ,the purpose of the design conference shall be to review the auction design developed by the auction expert under subparagraph 7,b7 for the establishment of an efficient auction consistent with best practices and actuarial science4 7iv7 ,elements of conference ,with respect to the design conference-- 7,i7 the auction expert shall provide a demonstration of the preliminary auction design2 7,,ii7 the auction expert shall lead a mock auction based upon such design in which the attendees will participate and offer comments and suggestions for improvement2 7,,iii7 the auction expert may establish working committees on major issues2 and 7,,iv7 the design conference shall be recorded and made available over the ,internet through simultaneous ,web cast or otherwise4 7,d7 ,recommendations 7i7 ,working committees ,not later than #b months after the last day of the design conference1 each working committee established under subparagraph 7,c77iv77,,iii7 shall submit to the auction expert the committee's recommendations on the final design for auctions under this section4 7ii7 ,final design recommendation ,not later than #c months after the last day of the design conference1 the auction expert shall submit to the ,secretary final recommendations on the auction design for approval for expedited rulemaking4 ,in this clause1 the term expedited rulemaking process means a process of publication of the proposed auction design and solicitation of public comments on such design4 ,the provisions of section #ahga7;b77#a7 shall not apply to such process4 7#c7 ,requirements ,in establishing the auction design1 the ,secretary shall ensure that rates of payment developed through the auction process-- 7,a7 are market-based and based on binding bids and clearing prices2 and 7,b7 do not result in a diminution of access to or quality of items of market priced items and services in the applicable market areas4 7d7 ,conduct of auction 7#a7 ,initial auction ,no later than #ad months after the date a contract is first entered into with an auction expert under subsection 7g71 the ,secretary shall conduct auctions 7each in this section referred to as a market-priced auction7 among entities supplying market priced items and services in eligible auction areas that are selected in the auction design and consistent with subsection 7a77#c74 ,each auction shall conclude no later than #b months after its commencement4 ,market-based auctions shall be conducted in accordance with an auction design developed under subsection 7c74 7#b7 ,items and services subject to auction 7,a7 ,in general ,in each eligible auction area in which a market-priced auction is conducted1 the ,secretary shall select to be subject to auction a combination of #b categories of items and services from among the market priced items and services4 7,b7 ,all listed items and services to be subject to auction ,the ,secretary shall ensure in the market-priced auction that each lead product that is identified under paragraph 7#d7 from among each market priced item and service is subject to auction among all eligible auction areas4 ,the ,secretary shall ensure that each product category is auctioned in at least a sufficient number of eligible auction areas to produce a sample of bids based on the percentages set forth in subsection 7a77#c74 7#c7 ,requirements to submit bid in auction 7,a7 ,submission of bids ,any supplier that complies with the requirements of subparagraph 7,b7 and that is identified by the ,secretary pursuant to paragraph 7#e77;,c7 as a supplier of a market priced item or service that is the subject of a market-priced auction in an eligible auction area may submit a bid at such auction4 7,b7 ,financial assurances 7i7 ,in general ,in order to be eligible to participate in a market-priced auction1 a supplier must submit a cash deposit in an amount determined by the ,secretary4 7ii7 ,letter of credit in lieu of cash deposit ,the ,secretary may1 in the ,secretary's sole discretion1 accept a letter of credit from a financial institution acceptable to the ,secretary instead of the cash deposit otherwise required under clause 7i74 7,c7 ,treatment of deposits submitted by suppliers 7i7 ,successful bidders ,the ,secretary shall retain as a performance guarantee the deposit submitted under subparagraph 7,b77i7 of a supplier that has submitted a winning bid at a market-priced auction4 7ii7 ,unsuccessful bids ,if a supplier submits a bid that is not accepted at the auction1 any such deposit shall be returned to the supplier4 7iii7 ,deposit return requirements for partially successful suppliers ,if a supplier submits a bid that is accepted at the auction1 but the supplier is not awarded a contract for the full amount of the bid1 the ,secretary shall provide for a proportionate return of any such deposit4 7#d7 ,lead product selection for establishing clearing prices 7,a7 ,in general ,for each product category of items and services specified in subsection 7b77#a7 that is the subject of a market-priced auction1 the ,secretary shall establish a lead product4 ,such lead product shall be selected based upon the price and utilization of the product under this part4 7,b7 ,lead product clearing price establishes clearing price for other products 7i7 ,lead product as reference point for other products ,the lead product selected under subparagraph 7,a7 shall be used as a reference point for all other products 7categorized by the healthcare common procedure coding system code7 in the same category as the lead product4 ,such lead product shall be assigned a weight of #ajj percent4 7ii7 ,additional products in each product category ,every other product in the same product category as the lead product identified under subparagraph 7,a7 shall be assigned based upon each auction a weight expressed as a percentage of the lead product1 which percentage of the clearing price1 established by the auction expert in the plan design and adjusted after input from providers at the design plan conference1 establishes the price of each item and service in the category4 7iii7 ,establishing clearing price for items and services ,the ,secretary shall establish the clearing price for each market priced item and service that is subject to the auction based upon the data submitted under this subparagraph4 ,such clearing price shall be equal to the highest cost bid that will meet capacity targets in the eligible auction area for such item and service4 7#e7 ,conduct of auction 7,a7 ,in general ,the ,secretary shall conduct the market-priced auctions consistent with the provisions of this paragraph4 7,b7 #c months before auction date ,approximately #c months before the scheduled auction date1 the ,secretary shall detail auction rules that are consistent with the auction plan developed under this section4 ,these rules shall include the following3 7i7 ,financial and other qualification requirements for bidders4 7ii7 ,algorithms for determining winners and prices as a function of bids4 7iii7 ,performance obligations of contract suppliers1 guarantees1 and penalties for non-conformance4 7iv7 ,the product categories to be selected 7and their related healthcare common procedure coding system codes7 from within the market priced items and services4 7v7 ,the lead product for each product category selected under paragraph 7#d77;,a7 and the price grid for such category4 7vi7 ,the eligible auction areas nationwide 7and areas identified as having the same econometric model7 and those eligible auction areas in which a market-priced auction will be conducted each year4 7,c7 #cj days before auction date ,thirty days before a scheduled auction date1 the ,secretary shall review all applicants and identify the qualified suppliers eligible to submit bids4 ,in carrying out this subparagraph1 the ,secretary shall specify the following3 7i7 ,the historic capacity for each eligible bidder for each category that will be subject to the auction4 7ii7 ,bidder eligibility by eligible auction area4 7iii7 ,for each auction area1 the lead product established under paragraph 7#d77;,a74 7iv7 ,the price index 7described in subsection 7c77#b77;,b77 in each auction area4 7,d7 ,bidders conference ,prior to conducting each such auction1 the auction expert shall conduct a conference of prospective bidders in eligible auction areas in which an auction will be conducted4 7,e7 ,during auction ,during the conduct of the auction1 the ,secretary shall announce the following3 7i7 ,the time of the end of the round of auctioning4 7ii7 ,the history of prior rounds including the aggregate supply at the end of the round price for each product category by round4 7,f7 ,immediately after each auction round ,not later than #ae minutes after the end of each auction1 the ,secretary shall announce the following3 7i7 ,the aggregate supply for each item and service that is the subject of the auction at the price established during the auction4 7ii7 ,for each supplier that has participated in the auction1 its own supply for all prices 7from the initial starting price to the end of round price7 for each item and service that is the subject of the auction4 7iii7 ,revised schedule of rounds for the next bidding day4 7,g7 ,at conclusion of final auction round ,not later than #ae minutes after the end of the final auction round1 the ,secretary shall announce the following3 7i7 ,a list of winning suppliers4 7ii7 ,the market clearing price for each item and service that is the subject of the auction4 7,h7 ,final actions ,not later than #cj days after the end of the final auction round1 the ,secretary shall adjust the performance guarantees received from each bidder to reflect the outcome of the auction in accordance with paragraph 7#c77;,b74 7#f7 ,conditions of awarding contract 7,a7 ,in general ,the ,secretary shall award a contract to any entity in an eligible auction area in which an auction is conducted and whose bid submitted pursuant to paragraph 7#c77;,a7 is at or below the clearing price established pursuant to paragraph 7#d77;,g77ii74 7,b7 ,terms of contract 7i7 ,mandatory acceptance of contract ,a supplier that submits a bid at or below such clearing price shall be treated as having agreed to and accept the contract awarded pursuant to subparagraph 7,a74 7ii7 ,contract terms ,a contract awarded pursuant to subparagraph 7,a7 shall be valid for #b years4 7iii7 ,no requirement to supply up to bid amount ,nothing in this subsection shall require a supplier that is awarded a contract pursuant to subparagraph 7,a7 to supply a marked priced item or service that is the subject of an auction in the eligible auction area beyond the level of demand for such item or service in the eligible auction area1 even if such level is below the level that the supplier assumed in its bid4 7,c7 ,ensuring adequate selection of contractors ,the ,secretary may not award a contract to any entity under the auction to furnish such items or services unless the ,secretary finds that the conditions described in section #ahdg7;b77#b77;,a7 apply with respect to an entity receiving a contract under this paragraph4 7,d7 ,sufficient capacity 7i7 ,in general ,the ,secretary shall identify the capacity of each supplier that applies to participate in an auction under this section4 ,a supplier's capacity shall be based upon the capacity of the supplier in the preceding year in the auction area4 7ii7 ,new suppliers ,each bidding supplier that has no historic capacity in the auction area shall be assigned a base capacity for each produce category made available under the auction of #a percent of the total dollar value of that item or service made available in the eligible auction area4 7#g7 ,payment amount shall equal auction clearing price 7,a7 ,in general ,with respect to market priced items or services that are provided in an eligible auction area in which-- 7i7 a market-priced auction is conducted1 the auction price determined at such auction for such item in such eligible auction area2 or 7ii7 such an auction is not conducted1 the auction price determined at an auction for those items that is conducted in another eligible auction area1 as adjusted by the factor described in subparagraph 7,b77iv71 if appropriate1 shall constitute the payment amount under section #ahcd7;a77#a77;,h77i77,i7 or section #ahdb7s71 as the case may be4 7,b7 ,supplying items or services 7i7 ,in general ,no entity other than a supplier of a market priced item or service that is the subject of a market-priced auction in an eligible auction area and that is a winning bidder in that eligible auction area shall be eligible to receive a contract under paragraph 7#f77;,a7 in such auction area4 7ii7 ,supplying items in economically equivalent markets ,a supplier of a market priced item or service that is not a winning bidder in the eligible auction area described in clause 7i7 shall1 subject to clauses 7iii7 and 7iv71 be eligible to supply any other market priced item or service that was not the subject of an auction in that eligible auction area but that was the subject of a market-priced auction in another econometrically similar eligible auction area 7as determined by the ,secretary74 7iii7 ,supplier must accept auction price ,clause 7ii7 shall only apply to a supplier that agrees to accept the price determined at an auction in another eligible auction area for a market priced item or service4 7iv7 ,appropriate adjustments ,the ,secretary shall develop an adjustment factor to reflect economic differences between the auction area that was the subject of the market-priced auction for the item or service and the auction area in which the supplier is located4 ,the ,secretary shall use such adjustment factor to adjust the payment amount made to a supplier pursuant to clause 7iii74 ,the ,secretary1 auction expert1 and market monitor shall consult with relevant stakeholders in developing such factors4 7#h7 ,monitor access and quality 7,a7 ,in general ,the ,secretary shall monitor the performance of suppliers that are awarded a contract pursuant to paragraph 7#f7 to ensure compliance with the requirements of this subsection1 including the requirements and obligations established by the auction expert under paragraph 7#e77;,b74 7,b7 ,enforcement ,if the ,secretary1 after consultation with the market monitor1 determines that there has been a material failure of a supplier that has been awarded a contract pursuant to paragraph 7#f7 to comply with such requirements1 the ,secretary1 after consultation with the market monitor1 shall implement enforcement measures4 ,such enforcement measures may include the following3 7i7 ,a formal warning letter4 7ii7 ,forfeiture of amounts submitted as a performance deposit pursuant to subsection 7d77#c77;,b74 7iii7 ,termination of a contract awarded under paragraph 7#f74 7iv7 ,termination of the supplier's agreement to participate in the program under this title for up to #b years4 7e7 ,application of competitive acquisition program provisions ,in implementing the market pricing program under this section1 the provisions of section #ahdg7;b7 shall be applied as follows3 7#a7 ,paragraph 7#c7 shall apply1 except that1 for purposes of contracts awarded under the market pricing program1 subparagraph 7,b7 of such paragraph shall be applied by substituting #b years for #c years4 7#b7 ,subject to subsection 7d77#g77;,b71 paragraph 7#d7 shall apply4 7#c7 ,paragraph 7#e7 shall apply1 except that-- 7,a7 the reference in subparagraph 7,a7 of such paragraph to subsection 7a77#b7 is deemed a reference to subsection 7b77#a7 of this section2 and 7,b7 the reference in subparagraph 7,b77i7 of such paragraph to subparagraph 7,a7 is deemed a reference to subsection 7d77#d7 of this section4 7#d7 ,paragraph 7#g7 shall not apply4 7#e7 ,paragraph 7#h7 shall apply4 7#f7 ,paragraph 7#i7 shall apply1 except that such paragraph shall be applied as if a reference to a bidding program includes a reference to the market pricing program4 7#g7 ,paragraph 7#aj7 shall apply1 except that such paragraph shall be applied as if a reference to a competitive acquisition program includes a reference to the market pricing program4 7#h7 ,paragraph 7#aa7 shall not apply1 except that-- 7,a7 the pendency of any claim for review under this section shall not delay any auction round conducted pursuant to subsection 7a77#c7 or 7d77#a72 and 7,b7 there shall be no administrative or judicial review of any claim to enjoin the operation of a market-priced auction conducted4 7f7 ,transparency requirements for market pricing program ,in implementing the market pricing program1 the ,secretary shall provide for publication1 on an ,internet ,web site operated by the ,secretary1 of the following information3 7#a7 ,the qualifications necessary to submit a bid pursuant to subsection 7d77#c74 7#b7 ,the financial requirements that are applicable for purposes of subsection 7d77#c77;,b74 7#c7 ,the quality standards and the performance standards developed pursuant to subsection 7c77#c77;,b74 7#d7 ,the calculation of the total market capacity of an eligible auction area for purposes of subsection 7d77#e77;,c77i74 7#e7 ,the methodology developed for an adjustment factor applied pursuant to subsection 7d77#g77;,b77iv74 7#f7 ,the process for soliciting and accepting bids for purposes of paragraphs 7#c7 and 7#e7 of subsection 7d74 7#g7 ,for purposes of subsection 7d77#e7-- 7,a7 the number of bidders at the auction2 7,b7 the number of winning and losing bidders at the auction2 and 7,c7 with respect to rejected bidders1 the specific reasons for rejections of any bid1 and1 with respect to any such rejection1 a means of ensuring the availability of the process of review or appeal to a rejected bidder4 7#h7 ,the calculation of and compliance with the requirement of section #ahdg7;b77#f77;,d71 as made applicable to the market pricing program by subsection 7e74 7g7 ,reliance on auction expert and market monitor in establishing and operating market pricing program2 advisory committee report and monitoring 7#a7 ,auction expert and market monitor 7,a7 ,in general ,the ,secretary shall1 not later than #c months after the date of the enactment of this section1 through the ,office of the ,assistant ,secretary for ,planning and ,evaluation1 enter into a contract with an individual to serve as the auction expert and such a contract to serve as a market monitor to assist in the design1 development1 implementation and functioning of the auction to be conducted pursuant to subsection 7b74 ,the auction expert and market monitor shall report and be accountable to the ,secretary4 7,b7 ,selection of auction expert and market monitor2 term2 access to information 7i7 ,competitive process ,the selection of the individual to serve as the auction expert and as a market monitor under subparagraph 7,a7 shall be undertaken through a competitive process4 7ii7 ,disqualifications ,an individual may not be selected as the auction expert if such individual-- 7,i7 is a current or former employee of the ,centers for ,medicare ,medicaid ,services2 7,,ii7 is a current or former contractor for the ,centers for ,medicare ,medicaid ,services that participated in the implementation of the competitive acquisition program under section #ahdg7;a72 7,,iii7 does not have significant experience in implementing auctions of similar complexity in government programs2 and 7,,iv7 does not have appropriate educational credentials4 7iii7 ,access to information ,the ,secretary shall make available to the auction expert and the market monitor all applicable information 7including confidential information7 on the relevant markets throughout the duration of the market pricing program4 7iv7 ,term of contract ,the contract for the auction expert and for the market monitor under this paragraph shall be for a period of #d years4 7#b7 ,functions of auction expert ,the auction expert shall conduct the activities as described in this section1 including-- 7,a7 development of a draft auction design and design conference under subparagraphs 7,b7 and 7,c7 of subsection 7c77#b72 7,b7 conducting bidders conferences under subsection 7d77#e77;,d72 and 7,c7 lead the auction1 contracting1 and other aspects of implementing the market pricing program with the advice of the market monitor4 7#c7 ,functions of market monitor 7,a7 ,participate in design conference ,the market monitor shall participate in the design conference under subsection 7c77#b77;,c7 and1 at the conference1 provide a presentation on the responsibilities of the market monitor throughout the year and common on key aspects of the design and their purpose4 7,b7 ,review of final design ,the market monitor shall review the final auction design recommendations submitted under subsection 7c77#b77;,d7 and1 within one month of the release of such recommendations1 provide public comment on them4 7,c7 ,monitoring 7i7 ,in general ,the market monitor shall provide ongoing monitoring of the performance of suppliers and the effects of the market pricing program to guard against the occurrence of any negative effects specified in subsection 7d77#h74 7ii7 ,provide transparency of information ,the monitoring under clause 7i7 shall include public availability of the number of suppliers providing market priced items and services in an eligible auction area during each year of the operation of the market pricing program4 7,d7 ,biannual reports to ,secretary ,the market monitor shall provide biannual reports to the ,secretary in the initial two years and annually thereafter on the development and operations of the market pricing program4 ,in each report1 the monitor shall-- 7i7 identify potential problems with the program2 and 7ii7 recommend solutions to problems so identified4 7,e7 ,annual report ,the market monitor shall provide an annual report to ,congress on the operation and functioning of the market pricing program4 ,each such report shall include information on-- 7i7 potential problems with the program2 7ii7 recommended solutions to problems identified pursuant to subclause 7,i72 7iii7 the appropriateness of ,,hcpcs codes selected for auctions2 7iv7 an evaluation on the ability of individuals eligible for benefits under this part to obtain items and services subject to the market pricing program2 7v7 any adverse health effects resulting from implementation of the program2 7vi7 any material deterioration in the quality of items and services provided under the program2 7vii7 the costs of any preventable or prolonged hospitalizations due to lack of timely access to market priced items and services2 and 7viii7 any negative business consequences to the supplier of any market priced items and services occurring as a result of errors made in the conduct of the program4 4 #e4 ,application of existing provisions 7a7 ,revisions to ,program ,advisory and ,oversight ,committee ,section #ahdg7;c7 of the ,social ,security ,act 7#db ,u4,s4,c4 #aciew-#c7;c77 is amended-- 7#a7 in paragraph 7#a71 by adding at the end the following3 ,the ,secretary shall reconstitute the ,committee and extend the terms of its members42 7#b7 in paragraph 7#c71 by adding at the end the following new subparagraph3 7,c7 ,additional report to ,congress ,not later than #a year after the date of the appointment of the auction expert under section #ahdg;,c7g77#a71 the ,committee shall submit to the ,congress a report on the market pricing program established under section #ahdg;,c4 ,the report shall include information on the design of the market pricing program1 access to and quality of market priced items and services by beneficiaries under the program4 2 7#c7 by striking paragraph 7#d7 7relating to ,,faca72 and 7#d7 in paragraph 7#e71 by inserting before the period at the end the following3 1 except that the reconstituted ,committee shall terminate #b years after the date of the appointment of the auction expert and the market monitor under section #ahdg;,c7g77#a74 7b7 ,negative pressure wound therapy standards ,the ,secretary of ,health and ,human ,services1 in consultation with relevant stakeholders 7as defined in section #ahdg;,c7c77#b77;,a77ii7 of the ,social ,security ,act1 as added by section #d71 shall develop standards for coverage and quality of negative pressure wound therapy items and services 7within the meaning of section #ahdg7;a77#a77;,d77i77,,iv7 of such ,act1 #db ,u4,s4,c4 #aciew-#c7;a77#a77;,d77i77,,iv774 #f4 ,additional budgetary offset 7a7 ,in general ,in addition to the payment reductions specified in the amendments made by section #c7;a77#a71 unobligated balances of all discretionary appropriations for each fiscal year 7beginning with fiscal year #bjac7 are hereby rescinded in an amount equal to the amount necessary to make this ,act budget neutral for such fiscal year4 7b7 ,implementation ,the ,director of the ,office of ,management and ,budget shall determine and identify each account1 program1 project1 and activity to which the rescission under subsection 7a7 shall apply and the amount of such rescission that shall apply to each such account1 program1 project and activity4 ,not later than #fj days after the date of the enactment of this ,act1 the ,director of the ,office of ,management and ,budget shall submit a report to the ,secretary of the ,treasury and to ,congress of the accounts1 programs1 projects1 activities1 and amounts determined and identified for rescission under the preceding sentence4 7c7 ,exception ,this section shall not apply to accounts1 programs1 projects and activities operated by the ,department of ,defense or the ,department of ,veteran's ,affairs4