
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1395w-3]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
 Part B--Supplementary Medical Insurance Benefits for Aged and Disabled
 
Sec. 1395w-3. Demonstration projects for competitive acquisition 
        of items and services
        

(a) Establishment of demonstration project bidding areas

                           (1) In general

        The Secretary shall implement not more than 5 demonstration 
    projects under which competitive acquisition areas are established 
    for contract award purposes for the furnishing under this part of 
    the items and services described in subsection (d) of this section.

                      (2) Project requirements

        Each demonstration project under paragraph (1)--
            (A) shall include such group of items and services as the 
        Secretary may prescribe,
            (B) shall be conducted in not more than 3 competitive 
        acquisition areas, and
            (C) shall be operated over a 3-year period.

     (3) Criteria for establishment of competitive acquisition 
                                    areas

        Each competitive acquisition area established under a 
    demonstration project implemented under paragraph (1)--
            (A) shall be, or shall be within, a metropolitan statistical 
        area (as defined by the Secretary of Commerce), and
            (B) shall be chosen based on the availability and 
        accessibility of entities able to furnish items and services, 
        and the probable savings to be realized by the use of 
        competitive bidding in the furnishing of items and services in 
        such area.

(b) Awarding of contracts in areas

                           (1) In general

        The Secretary shall conduct a competition among individuals and 
    entities supplying items and services described in subsection (c) of 
    this section for each competitive acquisition area established under 
    a demonstration project implemented under subsection (a) of this 
    section.

                (2) Conditions for awarding contract

        The Secretary may not award a contract to any entity under the 
    competition conducted pursuant to paragraph (1) to furnish an item 
    or service unless the Secretary finds that the entity meets quality 
    standards specified by the Secretary and that the total amounts to 
    be paid under the contract are expected to be less than the total 
    amounts that would otherwise be paid.

                      (3) Contents of contract

        A contract entered into with an entity under the competition 
    conducted pursuant to paragraph (1) is subject to terms and 
    conditions that the Secretary may specify.

                 (4) Limit on number of contractors

        The Secretary may limit the number of contractors in a 
    competitive acquisition area to the number needed to meet projected 
    demand for items and services covered under the contracts.

(c) Expansion of projects

                           (1) Evaluations

        The Secretary shall evaluate the impact of the implementation of 
    the demonstration projects on medicare program payments, access, 
    diversity of product selection, and quality. The Secretary shall 
    make annual reports to the Committees on Ways and Means and Commerce 
    of the House of Representatives and the Committee on Finance of the 
    Senate on the results of the evaluation described in the preceding 
    sentence and a final report not later than 6 months after the 
    termination date specified in subsection (e) of this section.

                            (2) Expansion

        If the Secretary determines from the evaluations under paragraph 
    (1) that there is clear evidence that any demonstration project--
            (A) results in a decrease in Federal expenditures under this 
        subchapter, and
            (B) does not reduce program access, diversity of product 
        selection, and quality under this subchapter,

    the Secretary may expand the project to additional competitive 
    acquisition areas.

(d) Services described

    The items and services to which this section applies are all items 
and services covered under this part (except for physicians' services as 
defined in section 1395x(s)(1) of this title) that the Secretary may 
specify. At least one demonstration project shall include oxygen and 
oxygen equipment.

(e) Termination

    Notwithstanding any other provision of this section, all projects 
under this section shall terminate not later than December 31, 2002.

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1847, as added Pub. L. 105-
33, title IV, Sec. 4319(a), Aug. 5, 1997, 111 Stat. 392; amended Pub. L. 
106-113, div. B, Sec. 1000(a)(6) [title III, Sec. 321(c)], Nov. 29, 
1999, 113 Stat. 1536, 1501A-366.)


                            Prior Provisions

    A prior section 1395w-3, act Aug. 14, 1935, ch. 531, title XVIII, 
Sec. 1847, as added July 1, 1988, Pub. L. 100-360, title II, 
Sec. 202(j), 102 Stat. 719; amended Oct. 13, 1988, Pub. L. 100-485, 
title VI, Sec. 608(d)(5)(I), 102 Stat. 2414, provided for appointment of 
Prescription Drug Payment Review Commission by Director of Congressional 
Office of Technology Assessment, prior to repeal by Pub. L. 101-234, 
title II, Sec. 201(a), (c), Dec. 13, 1989, 103 Stat. 1981, effective 
Jan. 1, 1990.


                               Amendments

    1999--Subsec. (b)(2). Pub. L. 106-113 inserted ``and'' after 
``specified by the Secretary''.


                    Effective Date of 1999 Amendment

    Amendment by Pub. L. 106-113 effective as if included in the 
enactment of the Balanced Budget Act of 1997, Pub. L. 105-33, except as 
otherwise provided, see section 1000(a)(6) [title III, Sec. 321(m)] of 
Pub. L. 106-113, set out as a note under section 1395d of this title.


                              Study by GAO

    Section 4319(c) of Pub. L. 105-33 provided that: ``The Comptroller 
of the United States shall study the effectiveness of the establishment 
of competitive acquisition areas under section 1847(a) of the Social 
Security Act [subsec. (a) of this section], as added by this section.''

                  Section Referred to in Other Sections

    This section is referred to in section 1395y of this title.
