§ 1396i. Certification and approval of rural health clinics and intermediate care facilities for mentally retarded

Footnotes

1. 1 So in original. Probably should be “an”.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1935

   Social Security Amendments of 1972

   Pub. L. 92–603 title II · 86 Stat. 1329

   Enacted · 42 U.S.C. § 1396i

   Aug. 14, 1935, ch. 531, title XIX, § 1910, as added and amended Pub. L. 92–603, title II, §§ 249A(a), 278(b)(12), Oct. 30, 1972, 86 Stat. 1426, 1454

   Source evidence

   Code source credit
   Aug. 14, 1935, ch. 531, title XIX, § 1910, as added and amended Pub. L. 92–603, title II, §§ 249A(a), 278(b)(12), Oct. 30, 1972, 86 Stat. 1426, 1454

   Enacted provision · exact public law
   TITLE II— PROVISIONS RELATING TO MEDICARE, MEDICAID, AND MATERNAL AND CHILD HEALTH Sec. 201. coverage for disability beneficiaries under medicare (a) (1) (A) The heading of title XVIII of the Social Security Act is amended to read as follows: “TITLE XVIII— HEALTH INSURANCE FOR THE AGED AND DISABLED”. (B) The heading of part A of such title is amended to read as follows: “Part A— Hospital Insurance Benefits for the Aged and Disabled”. (C) The heading of part B of such title is amended to read as follows: “Part B— Supplementary Medical Insurance Benefits for the Aged and Disabled”. (2) The text of section 1811 of such Act is amended to read as 79 Stat. 291. 42 USC 1395c. follows: “Sec. 1811. The insurance program for which entitlement is established by section 226 provides basic protection against the costs of hospital Infra. and related posthospital services in accordance with this part for (1) individuals who are age 65 or over and are entitled to retirement benefits under title II of this Act or under the railroad retirement system 42 USC 401. and (2) individuals under age 65 who have been entitled for not less than 24 consecutive months to benefits under title II of this Act or under the railroad retirement system on the basis of a disability.” (3) Section 1831 of such Act is amended— 79 Stat. 301. 42 USC 1395j. (A) by inserting “and the disabled” after “aged” in the heading, and (B) by striking out “individuals 65 years of age or over” and inserting in lieu thereof “aged and disabled individuals”. (b) (1) Section 226(a) of such Act is amended to read as follows: 79 Stat. 290. 42 USC 426. “(a) (1) Every individual who— “(A) has attained age 65, and “(B) is entitled to monthly insurance benefits under section 202 or is a qualified railroad retirement beneficiary, Ante, pp. 1335–1350. shall be entitled to hospital insurance benefits under part A of title XVIII for each month for which he meets the condition specified in 42 USC 1395. subparagraph (B), beginning with the first month after June 1966 for which he meets the conditions specified in subparagraphs (A) and (B). “(b) Every individual who— “(1) has not attained age 65, and “(2) (A) is entitled to, and has for 24 consecutive calendar months been entitled to, (i) disability insurance benefits under section 223 or (ii) child’s insurance benefits under section 202(d) 42 USC 423. Ante, p. 1347. by reason of a disability (as defined in section 223(d)) or (iii) widow’s insurance benefits under section 202(e) or widower’s insurance benefits under section 202(f) by reason of a disability (as defined in section 223(d)), or (B) is, and has been for not less than 24 consecutive months a disabled qualified railroad retirement beneficiary, within the meaning of section 22 of the Railroad Retirement Act of 1937, Post, p. 1373. shall be entitled to hospital insurance benefits under part (A) of title XVIII for each month beginning with the later of (I) July 1973 or (II) the twenty-fifth consecutive month of his entitlement or status as a qualified railroad retirement beneficiary described in paragraph (2), and ending with the month following the month in which notice of termination of such entitlement to benefits or status as a qualified railroad retirement beneficiary described in paragraph (2) is mailed to him, or if earlier, with the month before the month in which he attains age 65.” (2) Section 226(b) of such Act is amended by striking out 42 USC 426. “occurred after June 30, 1966, or on or after the first day of the month in which he attains age 65, whichever is later” and inserting in lieu thereof “occurred (i) after June 30, 1966, or on or after the first day of the month in which he attains age 65, whichever is later, or (ii) if he was entitled to hospital insurance benefits pursuant to subsection (b), at a time when he was so entitled”. (3) Section 226(b) (2) of such Act is amended by striking out “an individual shall be deemed entitled to monthly insurance benefits under section 202,” and inserting in lieu thereof “an individual shall be deemed entitled to monthly insurance benefits under section 202 or 42 USC 402, 423. 42 USC 426. section 223,”. (4) Section 226(c) of such Act is amended by inserting “or section 22” after “section 21” wherever it appeal’s. (5) Section 226 of such Act is further amended by redesignating subsection (b) as subsection (c), subsection (c) as subsection (d), and subsection (d) as subsection (f), and by inserting after subsection (d) the following new subsection: “(e) (1) For purposes of determining entitlement to hospital insurance benefits under subsection (b) in the, case of widows and widowers described in paragraph (2) (A) (iii) thereof— “(A) the term ‘age 60’ in sections 202(e) (1) (B) (ii) and 202(e) (5), and the term ‘age 62’ in sections 202(f) (1) (B) (ii), and 202 (f) (6) shall be deemed to read ‘age 65’; and “(B) the phrase ‘before she attained age 60’ in the matter following subparagraph (F) of section 202 (e) (1) shall be deemed to read ‘based on a disability’. “(2) For purposes of determining entitlement to hospital insurance benefits under subsection (a) (2) in the case of an individual under age 65 who is entitled to benefits under section 202, and who was entitled to widow’s insurance benefits or widower’s insurance benefits based on disability for the month before the first month in which such individual was so entitled to old-age insurance benefits (but ceased to be entitled to such widow’s or widower’s insurance benefits upon becoming entitled to such old-age insurance benefits), such individual shall be deemed to have continued to be entitled to such widow’s insurance benefits or widower’s insurance benefits for and after such first month. “(3) For purposes of determining entitlement to hospital insurance benefits under subsection (a)(2) any disabled widow age 50 or older who is entitled to mother’s insurance benefits (and who would have been entitled to widow’s insurance benefits by reason of disability if she had filed for such widow’s benefits) shall, upon application, for such hospital insurance benefits be deemed to have filed for such widow’s benefits and shall, upon furnishing proof of such disability prior to July 1, 1974, under such procedures as the Secretary may prescribe, be deemed to have been entitled to such widow’s benefits as of the time she would have been entitled to such widow’s benefits if she bad filed a timely application therefor.” (c) (1) Section 1836 of such Act is amended to read as follows: “Sec. 1836. “eligible individuate Every individual who— “(1) is entitled to hospital insurance benefits under part A, or “(2) has attained age 65 and is a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment under this part, is eligible to enroll in the insurance program established by this part.” (2) (A) The first sentence of section 1837 (c) of such Act is amended by striking out “paragraphs (1) and (2)” and inserting in lieu thereof “paragraph (1) or (2)”. (B) The second sentence of section 1837(c) of such Act is amended to read as follows: “For purposes of this subsection and subsection (d), an individual who has attained age 65 and who satisfies paragraph Supra. (1) of section 1836 but not paragraph (2) of such section shall be treated as satisfying such paragraph (1) on the first day on which he is (or on filing application would have been) entitled to hospital insurance benefits under part A.” (C) The first sentence of 1837(d) of such Act is amended by striking 42 USC 1395p. out “paragraphs (1) and (2)” and inserting in lieu thereof “paragraph (1) or (2)”. (3) (A) Section 1838(a) of such Act is amended by striking out 42 USC 1395q. “July 1, 1966” in paragraph (1) and inserting in lieu thereof “July 1, 1966 or (in the case of a disabled individual who has not attained age 65) July 1, 1973”. (B) Section 1838(a) of such Act is further amended— (i) by striking out “paragraphs (1) and (2)” in paragraph (2) (A) and inserting in lieu thereof “paragraph (1) or (2)”; and (ii) by striking out “such paragraphs” in subparagraphs (B), (C), and (D) and inserting in lieu thereof “such paragraph”. (C) Section 1838 of such Act is further amended by redesignating subsection (c) as subsection (d), and by inserting after subsection (b) the following new subsection: “(c) In the case of an individual satisfying paragraph (1) of section 1836 whose entitlement to hospital insurance benefits under Ante, p. 1372. part A is based on a disability rather than on his having attained the age of 65, his coverage period (and his enrollment under this part) shall be terminated as of the close of the last month for which he is entitled to hospital insurance benefits.” (4) Section 1839(c) of such Act is amended— 42 USC 1395r. (A) by inserting “(in the same continuous period of eligibility)” after “for each full 12 months”; and (B) by adding at the end thereof the following new sentence: “Any increase in an individual’s monthly premium under the first sentence of this subsection with respect to a particular continuous period of eligibility shall not be applicable with respect to any other continuous period of eligibility which such individual may have.” (5) Section 1839 of such Act is further amended by adding at Post, p. 1376. the end thereof the following new subsection: “(e) For purposes of subsection (c) (and section 1837(g) (1)), an “Continuous period of eligibility.” Post, p. 1378. individual’s ‘continuous period of eligibility’ is the period beginning with the first day on which he is eligible to enroll under section 1836 and Ante, p. 1372. ending with his death; except that any period during all of which an individual satisfied paragraph (i) of section 1836 and which terminated in or before the month preceding the month in which he attained age 65 shall be a separate ‘continuous period of eligibility’ with respect to such individual (and each such period which terminates shall he deemed not to have existed for purposes of subsequently applying this section).” (6) (A) Section 1840(a) (1) of such Act is amended by striking out 42 USC 1395s. “section 202” and inserting in lieu thereof “section 202 or 223”. (B) Section 1840(a)(2) of such Act is amended by striking out “section 202” and inserting in lieu thereof “section 202 or 223”. (7) Section 1875(a) of such Act is amended by striking out “aged” 42 USC 1395ll. and inserting in lieu thereof “aged and the disabled”. (d) The Railroad Retirement Act of 1937 is amended by adding after section 21 the following new section: 45 USC 228s–2. “Sec. 22. “hospital insurance benefits for the disabled “(1) who have been entitled to annuities for not less than 24 consecutive months during each of which the first proviso of section 3(e) could have applied on the basis of an application which 45 USC 228c. has been filed under paragraph 4 or 5 of section 2(a), and are 45 USC 228b. currently entitled to such annuities, or who are entitled to annui- 45 USC 228b. ties under paragraph 2 or 3 of section 2 (a) and could have been paid annuities for not less than 24 consecutive months under section 42 USC 423. 223 of the Social Security Act if their service as employees were included in the term ‘employment’ as defined in that Act, or “(2) who have been entitled to annuities under section 5(a) on the basis of disability, or could have been so entitled had they not been entitled on the basis of age or had they not been entitled under section 5(b) on the basis of having the custody of children, for not less than 24 consecutive months during each of which the first proviso of section 3(e) could have been applied on the basis of disability if an application for disability benefits had been filed, or “(3) who have been entitled to annuities for not less than 24 consecutive months under section 5(c) on the basis of a disability (within the meaning of section 5(1) (1) (ii)) or who could have been includible as disabled children for not less than 24 consecutive months in the computation of an annuity under the first proviso in section 3(e) and could currently be includible in such a computation, shall be certified by the Board in the same manner, for the same purposes, and subject to the same conditions, restrictions, and other 45 USC 228s–2 provisions as individuals specifically described in section 21, and also subject to the same conditions, restrictions, and other provisions as 42 USC 401. are disability beneficiaries under title II of the Social Security Act in connection with their eligibility for hospital insurance benefits Ante, p. 1370. 42 USC 1395. under part A of title XVIII of such Act and their eligibility to enroll under part B of such title XVIII: and for the purposes of this Act and title XVIII of the Social Security Act, individuals certified as provided in this section shall be considered individuals described in and certified under such section 21. Notwithstanding the other provisions of this section it shall not apply to any individual who could not be taken into account on the basis of disability in calculating the annuity under the first proviso of section 3(e) without regard to’ the second paragraph of such section.” Sec. 202. hospital insurance benefits for uninsured individuals not eligible under transitional provision Title XVIII of the Social Security Act is amended by 79 Stat. 299. 42 USC 1305i. adding after section 1817 the following new section: “Sec. 1818. “hospital insurance benefits for uninsured individuals not otherwise eligible (a) Every individual who— “(1) has attained the age of 65, “(2) is enrolled under part B of this title, “(3) is a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment under this section, and “(4) is not otherwise entitled to benefits under this part. shall be eligible to enroll in the insurance program established by this part, “(b) An individual may enroll under this section only in such manner and form as may be prescribed in regulations, and only during an enrollment period prescribed in or under this section. “(c) The provisions of section 1837 (except subsection (f) thereof), Ante, p. 1372. section 1838, subsection (c) of section 1839, and subsections (f) Ante, p. 1373. and (h) of section 1840 shall apply to persons authorized to enroll under this section except that— “(1) individuals who meet the conditions of subsection (a) (1), (3), and (4) on or before the last day of the seventh month after the month in which this section is enacted may enroll under this part and (if not already so enrolled) may also enroll under part B during an initial general enrollment period which shall begin on the first day of the second month which begins after the date on which this section is enacted and shall end on the last day of the tenth month after the month in which this Act is enacted; “(2) in the case, of an individual who first meets the conditions of eligibility under this section on or after the first day of the eighth month after the month in which this section is enacted, the initial enrollment period shall begin on the first day of the third month before the month in which he first becomes eligible and shall end 7 months later; “(3) in the case of an individual who enrolls pursuant to paragraph (1) of this subsection, entitlement to benefits shall begin on— “(A) the first day of the second month after the month in which he enrolls, “(B) July 1, 1973, or “(C) the first day of the first month in which he meets the requirements of subsection (a), whichever is the latest; “(4) termination of coverage under this section by the filing of notice that the individual no longer wishes to participate in the hospital insurance program shall take effect at the close of the month following the month in which such notice is filed; “(5) an individual’s entitlement under this section shall terminate with the month before the first month in which he becomes eligible for hospital insurance benefits under section 226 of this Act or section 103 of the Social Security Amendments of 1965; and Ante, p. 1371; Post, p. 1463. 42 USC 426a. upon such termination, such individual shall be deemed, solely for purposes of hospital insurance entitlement, to have filed in such first month the application required to establish such entitlement; and ‘(6) termination of coverage for supplementary medical insurance shall result in simultaneous termination of hospital insurance benefits for uninsured individuals who are not otherwise entitled to benefits under this Act. “(d) (1) The monthly premium of each individual for each month Monthly premiums. in his coverage period before July 1974 shall be $33. “(2) The Secretary shall, during the last calendar quarter of each year, beginning in 1973, determine and promulgate the dollar amount (whether or not such dollar amount was applicable for premiums for any prior month) which shall be applicable for premiums for months occurring in the 12-month period commencing July 1 of the next year. Such amount shall be equal to $33, multiplied by the ratio of (A) the inpatient hospital deductible for such next year, as promulgated under section 1813(b)(2), to (B) such deductible promulgated for 42 USC 1395e. 1973. Any amount determined under the preceding sentence which is not a multiple of $1 shall be rounded to the nearest multiple of $1, or if midway between multiples of $1 to the next higher multiple of $1. “(e) Payment of the monthly premiums on behalf of any individual who meets the conditions of subsection (a) may be made by any public or private agency or organization under a contract or other arrangement entered into between it and the Secretary if the Secretary determines that payment of such premiums under such contract or arrangement is administratively feasible. “(f) Amounts paid to the Secretary for coverage under this section shall be deposited in the Treasury to the credit of the Federal Hospital Insurance Trust Fund.” Sec. 203. amount of supplementary medical insurance premium (a) Section 1839(b)(1) of the Social Security Act is amended by inserting “and before July 1, 1973,” after “1967”. (b) Section 1839(b)(2) of such Act is amended by striking out “thereafter” and inserting in lieu thereof “ending on or before December 31, 1971”. (c) Section 1839 of such Act (as amended by section 201 (c) (4) and Ante, p. 1373. (5) of this Act) is further amended by redesignating subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively, and by inserting after subsection (b) the following new subsection: “(c) (1) The Secretary shall, during December of 1972 and of each year thereafter, determine the monthly actuarial rate for enrollees age 65 and over which shall be applicable for the 12-month period commencing July 1 in the succeeding year. Such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such 12-month period with respect to those enrollees age 65 and over will equal one-half of the total of the benefits and administrative costs which he estimates will be payable from the Federal Supplementary Medical Insurance Trust Fund for services performed and related administrative costs incurred in such 12-month period. In calculating the monthly actuarial rate, the Secretary shall include an appropriate amount for a contingency margin. “(2) The monthly premium of each individual enrolled under this part for each month after June 1973 shall, except as provided in subsection (d), be the amount determined under paragraph (3). “(3) The Secretary shall, during December of 1972 and of each year thereafter, determine and promulgate the monthly premium applicable for the individuals enrolled under this part for the 12-month period commencing July 1 in the succeeding year. The monthly premium shall be equal to the smaller of— “(A) the monthly actuarial rate for enrollees age 65 and over, determined according to paragraph (1) of this subsection, for that 12-month period, or “(B) the monthly premium rate most recently promulgated by the Secretary under this paragraph or, in the case of the determination made in December 1971, such rate promulgated under subsection (b)(2) multiplied by the ratio of (i) the amount in column IV of the table which, by reason of the law in effect at the time the promulgation is made, will be in effect as of June 1 next following such determination appears (or is deemed to Ante, pp. 1333, 1334, 1369. appear) in section 215(a) on the line which includes the figure ‘750’ in column III of such table to (ii) the amount in column IV of the table which appeared (or was deemed to appear) in section 215(a) on the line which included the figure ‘750’ in column III as of June 1 of the year in which such determination is made. Whenever the Secretary promulgates the dollar amount which shall be applicable as the monthly premium for any period, he shall, at the time such promulgation is announced, issue a public statement setting forth the actuarial assumptions and bases employed by him in arriving at the amount of an adequate actuarial rate for enrollees age 65 and over as provided in paragraph (1) and the derivation of the dollar amounts specified in this paragraph. “(4) The Secretary shall also, during December of 1372 and of each year thereafter, determine the monthly actuarial rate for disabled enrollees under age 65 which shall be applicable for the 12-month period commencing July 1 in the succeeding year. Such actuarial rate shall be the amount the Secretary estimates to be necessary so that the aggregate amount for such 12-month period with respect to disabled enrollees under age 65 will equal one-half of the total of the benefits and administrative costs which he estimates will be incurred in the Federal Supplementary Medical Insurance Trust Fund for such 12-month period with respect to such enrollees. In calculating the monthly actuarial rate under this paragraph, the Secretary shall include an appropriate amount for a contingency margin.” (d) (1) Section 1839(d) of such Act, as redesignated by subsection (c) of this section, is amended by inserting “or (c)” after “subsection (b)” (2) Section 1839(f) of such Act, as redesignated by subsection (c) of this section, is amended by striking out “subsection (c)” and inserting in lieu thereof “subsection (d)”. (e) Effective with respect to enrollee premiums payable for months Effective date. after June 1973, section 1844(a) (1) of such Act is amended to read as 81 Stat. 874. 42 USC 1395w. follows: “(1) (A) a Government contribution equal to the aggregate premiums payable for a month for enrollees age 65 and over under this part and deposited in the Trust Fund, multiplied by the ratio of— “(i) twice the dollar amount of the actuarially adequate rate per enrollee age 65 and over as determined under section 1839(c) (1) for such month minus the dollar amount of the Ante, p. 1376. premium per enrollee for such month, as determined under section 1839(c) (3), to “(ii) the dollar amount of the premium per enrollee for such month, plus “(B) a Government contribution equal to the aggregate premiums payable for n month for enrollees under age 65 under this part and deposited in the Trust Fund, multiplied by the ratio of— “(i) twice the dollar amount of the actuarially adequate rate per enrollee under age 65 as determined under section 1839(c) (4) for such month minus the dollar amount of the premium per enrollee for such month, as determined under section 1839(c) (3), to “(ii) the dollar amount of the premium per enrollee for such month.” Sec. 204. change in supplementary medical insurance deductible (a) Section 1833 (b) of the Social Security Act is amended 79 Stat. 302. 42 USC 1395l. by striking out “shall be reduced by a deductible of $50” and inserting in lieu thereof “shall be reduced by a deductible of $60”. (b) Section 1835(c) of such Act is amended by striking out “but 81 Stat. 849. 42 USC 1395n. only if such charges for such services do not exceed $50” and inserting in lieu thereof “but only if such charges for such services do not exceed the applicable supplementary medical insurance deductible”. (c) The amendments made by this section shall be effective with Effective date. respect to calendar years after 1972 (except that, for purposes of applying clause (1)’of the first sentence of section 1833(b) of the Social Security Act, such amendments shall be deemed to have taken Supra. effect on January 1, 1972). Sec. 206. automatic enrollment for supplementary medical insurance (a) Section 1837 of the Social Security Act is amended by adding at the end thereof the following new subsections: “(f) Any individual— “(1) who is eligible under section 1836 to enroll in the medical insurance program by reason of entitlement to hospital insurance benefits as described in paragraph (1) of such section, and “(2) whose initial enrollment period under subsection (d) begins after March 31, 1973, and “(3) who is residing in the United States, exclusive of Puerto Rico, shall be deemed to have enrolled in the medical insurance program established by this part. “(g) All of the provisions of this section shall apply to individuals satisfying subsection (f), except that— “(1) in the case of an individual who satisfies subsection (f) by reason of entitlement to disability insurance benefits described Ante, p. 1371. in section 226(a)(2)(B), his initial enrollment period shall begin on the first day of the later of (A) April 1973 or (B) the third month before the 25th consecutive month of such entitlement, and shall reoccur with each continuous period of eligibility Ante, p. 1376. (as defined in section 1839(e)) and upon attainment of age 65; “(2) (A) in the case of an individual who is entitled to monthly 42 USC 402, 423. benefits under section 202 or 223 on the first day of his initial enrollment period or becomes entitled to monthly benefits under section 202 during the first 3 months of such period, his enrollment shall be deemed to have occurred in the third month of his initial enrollment period, and “(B) in the case of an individual who is not entitled to benefits under section 202 on the first day of his initial enrollment period and does not become so entitled during the first 3 months of such period, his enrollment shall be deemed to have occurred in the month in which he files the application establishing his entitlement to hospital insurance benefits provided such filing occurs during the last 4 months of his initial enrollment period: and “(3) in the case of an individual who would otherwise satisfy subsection (f) but does not establish his entitlement to hospital insurance benefits until after the last day of his initial enrollment period (as defined in subsection (d) of this section), his enrollment shall be deemed to have occurred on the first day of the earlier of the then current or immediately succeeding general enrollment period (as defined in subsection (e) of this section).” (b) Section 1838(a) of such Act is amended— (1) by striking out the period at the end of subsection (a) and by inserting in lieu thereof “; or”; and (2) by adding at the end of subsection (a) the following new paragraph: “(3) (A) in the case of an individual who is deemed to have enrolled on or before the last day of the third month of his initial enrollment period, the first day of the month in which he first meets the applicable requirements of section 1836 or July 1, 1973, whichever is later, or “(B) in the case of an individual who is deemed to have enrolled on or after the first day of the fourth month of his initial enrollment period, as prescribed under subparagraphs (B), (C), (D), and (E) of paragraph (2) of this subsection.” (c) Section 1838(b) of such Act (as amended by section 257(a) of Post, p. 1447. 42 USC 1395q. this Act) is further amended by adding at the end thereof the following new paragraph: “Where an individual who is deemed to have enrolled for medical insurance pursuant to section 1837(f) files a notice before the first day Ante, p. 1378. of the month in which his coverage period begins advising that he does not wish to be so enrolled, the termination of the coverage period resulting from such deemed enrollment shall take effect with the first day of the month the coverage would have been effective and such notice shall not be considered a disenrollment for the purposes of section 1837(b). Where an individual who is deemed enrolled for medical Post, p. 1448. insurance benefits pursuant to section 1837 (f) files a notice requesting termination of his deemed coverage in or after the month in which such coverage becomes effective, the termination of such coverage shall take effect at the close of the calendar quarter following the calendar quarter in which the notice is filed.” Sec. 207. incentives for states to establish effective utilization review procedures under medicaid (a) (1) Section 1903 of the Social Security Act is amended 79 Stat. 349; 81 Stat. 898. 42 USC 1396b. by adding at the end thereof the following new subsections: “(g) (1) With respect to amounts paid for the following services furnished under the State plan after June 30, 1973 (other than services furnished pursuant to a contract with a health maintenance organization as defined in section 1876), the Federal medical assistance percentage Post, pp. 1396, 1453. shall be decreased as follows: After an individual has received care as an inpatient in a hospital (including an institution for tuberculosis), skilled nursing home or intermediate care facility on 60 days, or in a hospital for mental diseases on 90 days (whether or not such days are consecutive), during any fiscal year, which for purposes of this section means the four calendar quarters ending with June 30, the Federal medical assistance percentage with respect to amounts paid for any such care furnished thereafter to such individual in the same fiscal year shall be decreased by 33⅓ per centum thereof unless the State agency responsible for the administration of the plan makes a showing satisfactory to the Secretary that, with respect to each calendar quarter for which the State submits a request for payment at the full Federal medical assistance percentage for amounts paid for inpatient hospital services (including tuberculosis hospitals), skilled nursing home services, or intermediate care facility services furnished beyond 60 days (or inpatient mental hospital services furnished beyond 90 days), there is in operation in the State an effective program of control over utilization of such services; such a showing must include evidence that— “(A) in each case for which payment is made under the State plan, a physician certifies at the time of admission, or, if later, the time the individual applies for medical assistance under the State plan (and recertifies, where such services are furnished over a period of time, in such cases, at least every 60 days, and accompanied by such supporting material, appropriate to the case involved, as may be provided in regulations of the Secretary), that such services are or were required to be given on an inpatient basis because the individual needs or needed such services; and “(B) in each such case, such services were furnished under a plan established and periodically reviewed and evaluated by a physician; “(C) such State has in effect a continuous program of review of utilization pursuant to section 1902(a) (30) whereby the necessity Post, p. 1416. for admission and the continued stay of each patient in such institution is periodically reviewed and evaluated (with such frequency as may be prescribed in regulations of the Secretary) by medical and other professional personnel who are not themselves directly responsible for the care of the patient and who are not employed by or financially interested in any such institution; and “(D) such State has an effective program of medical review of the care of patients in mental hospitals, skilled nursing homes, and intermediate care facilities pursuant to section 1902(a) (26) and 81 Stat. 906; 85 Stat. 809. 42 USC 1396a. (31) whereby the professional management of each case is reviewed and evaluated at least annually by independent professional review teams. In determining the number of days on which an individual has received services described in this subsection, there shall not be counted any days with respect to which such individual is entitled to have payments 42 USC 1395d. made (in whole or in part) on his behalf under section 1812. “(2) The Secretary shall, as part of his validation procedures under this subsection, conduct sample onsite surveys of private and public institutions in which recipients of medical assistance may receive care and services under a State plan approved under this title, and his findings with respect to such surveys (as well as the showings of the State agency required under this subsection) shall be made available for public inspection. “(h) (1) If the Secretary determines for any calendar quarter beginning after June 30, 1973, with respect to any State that there does not exist a reasonable cost differential between the statewide average cost of skilled nursing home services and the statewide average cost of intermediate care facility services in such State, the Secretary may reduce the amount which would otherwise be considered as expenditures under the State plan by any amount which in his judgment is a reasonable equivalent of the difference between the amount of the expenditures by such State for intermediate care facility services and the amount that would have been expended by such State for such services if there had been a reasonable cost differential between the cost of skilled nursing home services and the cost of intermediate care facility services. “(2) In determining whether any such cost differential in any State is reasonable the Secretary shall take into consideration the range of such cost differentials in all States. “(3) For the purposes of this subsection, the term ‘cost differential’ for any State for any quarter means, as determined by the Secretary on the basis of the data for the most recent calendar quarter for which satisfactory data are available, the excess of— “(A) the average amount paid in such State (regardless of the source of payment) per inpatient day for skilled nursing home services, over “(B) the average amount paid in such State (regardless of the source of payment) per inpatient day for intermediate care facility services. “(4) For purposes of this subsection, the term ‘cost’ shall mean amounts reimbursable by the State under a State plan approved under this title.” (2) Section 1903(a) (1) of such Act is amended by inserting “, subject to subsections (g) and (h) of this section” after “section 1905(b)”. (b) The amendments made by subsection (a) shall, except as otherwise provided therein, be effective July 1, 1973. Sec. 208. cost-sharing under medicaid (a) Section 1902(a) (14) of the Social Security Act is 42 USC 1396a. amended to read as follows: “(14) effective January 1, 1973, provide that— “(A) in the case of individuals receiving aid or assistance under a State plan approved under title I, X, XIV, or XVI, or part A of title IV, or who meet the income and resources 42 USC 301, 1201, 1351, 1381, 601. requirements of the one of such State plans which is appropriate— “(i) no enrollment fee, premium, or similar charge, and no deduction, cost sharing, or similar charge with respect to the care and services listed in clauses (1) through (5) and (7) of section 1905(a), will be imposed 42 USC 1396d. under the plan, and “(ii) any deduction, cost sharing, or similar charge imposed under the plan with respect to other care and services will be nominal in amount (as determined in accordance with standards approved by the Secretary and included in the plan), and “(B) with respect to individuals who are not receiving aid or assistance under any such State plan and who do not meet the income and resources requirements of the one of such State plans which is appropriate or who, after December 31, 1973, are included under the State plan for medical assistance pursuant to section 1902(a) (10) (B) approved under title XIX— “(i) there shall be imposed an enrollment fee, premium, or similar charge which (as determined in accordance with standards prescribed by the Secretary) is related to the individual’s income, and “(ii) any deductible, cost-sharing, or similar charge imposed under the plan will be nominal;”. (b) The amendment made by subsection (a) shall be effective January Effective date. 1, 1973 (or earlier if the State plan so provided). Sec. 209. medicaid conditions of eligibility for certain employed families (a) Section 1902 of the Social Security Act is amended by adding at the end thereof the following new subsection: “(e) Notwithstanding any other provision of this title, effective January 1, 1974, each State plan approved under this title must provide that, each family which was eligible for assistance pursuant to part A of title IV in at least 3 of the 6 months immediately preceding the month in which such family became ineligible for such assistance because of increased income from employment, shall, while a member of such family is employed, remain eligible for such assistance for 4 calendar months following the month in which such family would otherwise be determined to be ineligible for such assistance because of the income and resources limitations contained in such plan.” (b) (1) Section 1902 of the Social Security Act, as amended by this section, is further amended by adding at the end thereof the following new subsection: “(f) Notwithstanding any other provision of this title, except as provided in subsection (e), no State shall be required to provide medical assistance to any aged, blind, or disabled individual (within the meaning of title XVI) for any month unless such State would be (or would have been) required to provide medical assistance to such individual for such month had its plan for medical assistance approved under this title and in effect on January 1, 1972, been in effect in such month, except that for this purpose any such individual shall be deemed eligible for medical assistance under such State plan if (in addition to meeting such other requirements as are or may be imposed under the State plan) the income of any such individual as determined 42 USC 1396b. in accordance with section 1903(f) (after deducting such individual’s 42 USC 1381. payment under title XVI, and incurred expenses for medical care as 26 USC 213. defined in section 213 of the Internal Revenue Code of 1954) is not in excess of the standard for medical assistance established under the State plan as in effect on January 1, 1972.” (2) The amendment made by this subsection shall become effective on January 1, 1974. Sec. 210. payment under medicare to individuals covered by federal employees health benefits program Section 1862 of the Social Security Act is amended by adding at the end thereof the following new subsection: “(c) No payment may be made under this title with respect to any item or service furnished to or on behalf of any individual on or after January 1, 1975, if such item or service is covered under a health benefits plan in which such individual is enrolled under chapter 89 5 USC 8901. of title 5, United States Code, unless prior to the date on which such item or service is so furnished the Secretary shall have determined and certified that such plan or the Federal employees health benefits program under chapter 89 of such title 5 has been modified so as to assure that— “(1) there is available to each Federal employee or annuitant enrolled in such plan, upon becoming entitled to benefits under part. A or B, or both parts A and B of this title, in addition to the health benefits plans available before he becomes so entitled, one or more health benefits plans which offer protection supplementing the protection he has under this title, and “(2) the Government or such plan will make available to such Federal employee or annuitant a contribution in an amount at least equal to the contribution which the Government makes toward the health insurance of any employee or annuitant enrolled for high option coverage under the Government-wide plans established under chapter 89 of such title 5, with such contribution being in the form of (A) a contribution toward the supplementary protection referred to in paragraph (1), (B) a payment, to or on behalf of such employee or annuitant to offset the cost to him of his coverage under this title, or (C) a combination of such contribution and such payment.” Sec. 211. payment under medicare for certain inpatient hospital and related physicians’ services furnished outside the united states (a) Section 1814(f) of the Social Security Act is amended to read as follows: “(f) “Payment for Certain Inpatient Hospital Services Furnished Outside the United States (1) Payment shall be made for inpatient hospital services furnished to an individual entitled to hospital insurance benefits under Ante, p. 1371. 42 USC 1395x. section 226 by a hospital located outside the United States, or under arrangements (as defined in section 1861 (w)) with it, if— “(A) such individual is a resident of the United States, and “(B) such hospital was closer to or substantially more acces-sible from, the residence of such individual than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual’s illness or injury. “(2) Payment may also be made for emergency inpatient hospital services furnished to an individual entitled to hospital insurance benefits under section 226 by a hospital located outside the United States Ante, p. 1371. if— “(A) such individual was physically present— “(i) in a place within the United States; or “(ii) at a place within Canada while traveling without unreasonable delay by the most direct, route (as determined by the Secretary) between Alaska and another State; at the time the emergency which necessitated such inpatient hospital services occurred, and “(B) such hospital was closer to, or substantially more accessible from, such place than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual’s illness or injury. “(3) Payment shall be made in the amount provided under subsection (b) to any hospital for the inpatient hospital services described in paragraph (1) or (2) furnished to an individual by the hospital or under arrangements (as defined in section 1861 (w)) with 42 USC 1395x. it if (A) the Secretary would be required to make such payment if the hospital had an agreement in effect under this title and otherwise met the conditions of payment hereunder, (B) such hospital elects to claim such payment, and (C) such hospital agrees to comply, with respect to such services, with the provisions of section 1866 (a). 42 USC 1395cc. “(4) Payment for the inpatient hospital services described in paragraph (1) or (2) furnished to an individual entitled to hospital insurance benefits under section 226 may be made on the basis of an itemized bill to such individual if (A) payment for such services cannot be made under paragraph (3) solely because, the hospital does not elect to claim such payment, and (B) such individual files application (submitted within such time and in such form and manner and by such person, and continuing and supported by such information as the Secretary shall by regulations prescribe) for reimbursement. The amount payable with respect to such services shall, subject to the provisions of section 1813, be equal to the amount which would be payable 42 USC 1395e. under subsection (d)(3).” (b) Section 1861(e) of such Act is amended— 42 USC 1395x. (1) by striking out “except for purposes of sections 1814(d) and 1835 (b)” and inserting in lieu thereof “except for purposes of sections 1814(d), 1814(f), and 1835(b)”; 42 USC 1395f. Ante, p. 1382. 42 USC 1395n. (2) by inserting “section 1814(f) (2),” immediately after “For purposes of sections 1814(d) and 1835(b) (including determination of whether an individual received inpatient hospital services or diagnostic services for purposes of such sections),”; and (3) by inserting immediately after the, third sentence the following new sentence: “For purposes of section 1814(f) (1), such term includes an institution winch (i) is a hospital for purposes of sections 1814(d), 1814(f) (2), and 1835(b) and (ii) is accredited by the Joint Commission on Accreditation of Hospitals, or is accredited by or approved by a program of the country in which such institution is located if the Secretary finds the accreditation or comparable approval standards of such program to be essentially equivalent to those of the Joint Commission on Accreditation of Hospitals.” (c) (1) Section 1862(a) (4) of such Act is amended— (A) by striking out “emergency”; and (B) by inserting after “1814(f)” the following: “and, subject to such conditions, limitations, and requirements as are provided under or pursuant to this title, physicians’ services and ambulance services furnished an individual in conjunction with such inpatient hospital services but only for the period during which such inpatient hospital services were furnished”. (2) Section 1861 (r) of such Act (as amended by sections 256(b) 42 USC 1395x. Post, pp. 1447, 1449, 1451. and 264 of this Act) is further amended by adding at the end thereof the following new sentence: “For the purposes of section 1862(a) (4) and subject to the limitations and conditions provided in the previous sentence, such term includes a doctor of one of the arts, specified in such previous sentence, legally authorized to practice such art in the country in which the inpatient hospital services (referred to in such section 1862(a) (4)) are furnished.” (3) Section 1842(b) (3) (B) (ii) of such Act is amended by striking out “service;” and inserting in lieu thereof the following: “service (except in the case of physicians’ services and ambulance service furnished as described in section 1862(a) (4), other than for purposes 42 USC 1395gg. of section 1870(f));”. (4) Section 1833(a)(1) of such Act is amended by striking out “and” before “(B)”, and by inserting before the semicolon at the end thereof the following: “, and (C) with respect to expenses incurred for those physicians’ services for which payment may be made under this part that are described in section 1862(a) (4), the amounts paid shall be subject to such limitations as may be prescribed by regulations”. (d) The amendments made by this section shall apply to services furnished with respect to admissions occurring after December 31, 1972. Sec. 212. optometrists’ services under medicaid (a) Section 1905 of the Social Security Act is amended by inserting at the end thereof the following new subsection: “(e) In the case of any State the State plan of which (as approved under this title)— “(1) does not provide for the payment of services (other than 42 USC 1396a. services covered under section 1902(a) (12)) provided by an optometrist; but “(2) at a prior period did provide for the payment of services referred to in paragraph (1); “Physicians’ services.” the term ‘physicians’ services’ (as used in subsection (a)(5)) shall include services of the type which an optometrist is legally authorized to perform where the State plan specifically provides that the term ‘physicians’ services’, as employed in such plan, includes services of the type which an optometrist is legally authorized to perform, and shall be reimbursed whether furnished by a physician or an optometrist.” (b) The provisions of subsection (e) of section 1905 of the Social Security Act (as added by subsection (a) of this section) shall be applicable in the case of services performed on or after the date of enactment of this Act. Sec. 213. limitation on liability of beneficiary where medicare claims are disallowed (a) Title XVIII of the Social Security Act, as amended Post, pp. 1396, 1419, 1420. by sections 226, 242, and 243 of this Act, is further amended by adding at the end thereof the following new section: “Sec. 1879. “limitation on liability of beneficiary where medicare claims are disallowed (a) Where— “(1) a determination is made that, by reason of section 1862(a) (1) or (9), payment may not be made under part A or part B 42 USC 1395y. of this title for any expenses incurred for items or services furnished 42 USC 1395c, 1395j. an individual by a provider of services or by another person pursuant to an assignment under section 1842(b) (3) (B) (ii), Ante, p. 1384. and “(2) both such individual and such provider of services or such other person, as the case may be, did not know, and could not reasonably have been expected to know, that payment would not be made for such items or services under such part. A or part B, then to the extent permitted by this title, payment shall, notwithstanding such determination, be made for such items or services (and for such period of time as the Secretary finds will carry out the objectives of this title), as though section 1862(a)(1) and section 1862(a)(9) did not apply. In each such ease the Secretary shall notify both such individual and such provider of services or such other person, as the case may be, of the conditions under which payment, for such items or services was made and in the case of comparable situations arising thereafter with respect to such individual or such provider or such other person, each shall, by reason of such notice (or similar notices provided before the enactment of this section), be deemed to have knowledge that payment cannot be made for such items or services or reasonably comparable, items or services. “(b) In any ease in which the provisions of paragraphs (1) and (2) of subsection (a) are met. except that, such provider or such other person, as the case may be, knew, or could be expected to know, that payment for such services or items could not be made under such part A or part B, then the Secretary shall, upon proper application filed within such time as may be prescribed in regulations, indemnify the individual (referred to in such paragraphs), subject to the deductible and coinsurance provisions of this title, for any payments received from such individual by such provider or such other person, as the case may be, for such, items or services. Any payments made by the Secretary as indemnification shall be deemed to have been made to such provider or such other person, as the case may be, and shall be treated as overpayments, recoverable from such provider or such other person, as the case may be, under applicable provisions of law. In each such case the Secretary shall notify such individual of the conditions under which indemnification is made and in the case of comparable situations arising thereafter with respect to such individual, be shall, by reason of such notice (or similar notices provided before the enactment, of this section), be deemed to have knowledge that payment cannot be made for such items or services. “(c) No payments shall be made under this title in any cases in which the provisions of paragraph (1) of subsection (a) are met, but both the individual to whom the items or services were furnished and the provider of service or other person, as the case may be who furnished the items or services knew, or could reasonably have been expected to know, that payment could not be made for items or services under part A or part. B by reason of section 1862 (a) (1) or (a) (9). “(d) In any case arising under subsection (b) (but without regard to whether payments have been made by the individual to the provider or other person) or subsection c, the provider or other person shall have the same rights that an individual has under section 1869(b) Post, p. 1464. (when the determination is under part A) or section 1842(b) (3)(C) Post, p. 1448. 42 USC 1395j. (when the determination is under part B) when the amount of benefit or payments is in controversy, except that such rights may, under prescribed regulations, be exercised by such provider or other person only after the Secretary determines that the individual will not exercise such rights under such sections.” (b) The amendments made by this section shall be effective with respect to claims under part A or part B of title XVIII of the Social 42 USC 1395c, 1395j. Security Act, filed with respect to items or services furnished after the date of the enactment of this Act. Sec. 221. limitation on federal participation for capital expenditures (a) Title XI of the Social Security Act is amended by adding at the end thereof the following new section: “Sec. 1122. “limitation on federal participation for capital expenditures (a) The purpose of this section is to assure that Federal 42 USC 701, 1395, 1396. funds appropriated under titles V, XVIII, and XIX are not used to support unnecessary capital expenditures made by or on behalf of health care, facilities or health maintenance organizations which are reimbursed under any of such titles and that, to the extent possible, reimbursement under such titles shall support planning activities with respect to health services and facilities in the various States. (b) The Secretary, after consultation with the Governor (or other chief executive officer) and with appropriate local public officials, shall make an agreement with any State which is able and willing to do so under which a designated planning agency (which shall be an agency described in clause (ii) of subsection (d) (1) (B) that has a governing body or advisory board at least half of whose members represent consumer interests) will— “(1) make, and submit to the Secretary together with such supporting materials as he may find necessary, findings and recommendations with respect to capital expenditures proposed by or on behalf of any health care facility or health maintenance organization in such State within the field of its responsibilities. (2) receive from other agencies described in clause (ii) of subsection (d) (1) (B), and submit to the Secretary together with such supporting material as he may find necessary, the findings and recommendations of such other agencies with respect to capital expenditures proposed by or on behalf of health care facilities or health maintenance organizations in such State within the fields of their respective responsibilities, and “(3) establish and maintain procedures pursuant to which a person proposing any such capital expenditure may appeal a recommendation by the designated agency and will be granted an opportunity for a fair hearing by such agency or person other than the designated agency as the Governor (or other chief executive officer) may designate to hold such hearings, whenever and to the extent that the findings of such designated agency or any such other agency indicate that any such expenditure is not consistent with the standards, criteria, or plans developed pursuant 58 Stat. 682. 42 USC 201 note. 77 Stat. 282. 42 USC 2661 note. to the Public Health Service Act (or the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963) to meet the need for adequate health care facilities in the area covered by the plan or plans so developed. “(c) The Secretary shall pay any such State from the Federal Hospital Insurance Trust Fund, in advance or by way of reimbursement as may be provided in the agreement with it (and may make adjustments in such payments on account of overpayments or underpayments previously made), for the reasonable cost of performing the functions specified in subsection (b). “(d) (1) Except as provided in paragraph (2), if the Secretary determines that— “(A) neither the planning agency designated in the agreement described in subsection (b) nor an agency described in clause (ii) of subparagraph (B) of this paragraph had been given notice of any proposed capital expenditure (in accordance with such procedure or in such detail as may be required by such agency) at least 60 days prior to obligation for such expenditure; or “(B) (i) the planning agency so designated or an agency so described had received such timely notice of the intention to make such capital expenditure and had, within a reasonable period after receiving such notice and prior to obligation for such expenditure, notified the person proposing such expenditure that the expenditure would not be in conformity with the standards, criteria, or plans developed by such agency or any other agency described in clause (ii) for adequate health care facilities in such State or in the area for which such other agency has responsibility, and “(ii) the planning agency so designated had, prior to submitting to the Secretary the findings referred to in subsection (b)— “(I) consulted with, and taken into consideration the findings and recommendations of, the State planning agencies established pursuant to sections 314(a) and 604(a) of the Public Health Service Act (to the extent that either such 42 USC 246, 291d. agency is not the agency so designated) as well as the public or nonprofit private agency or organization responsible, for the comprehensive regional, metropolitan area, or other local area plan or plans referred to in section 314(b) of the Public Health Service Act and covering the area in which the health care facility or health maintenance organization proposing such capital expenditure is located (where such agency is not the agency designated in the agreement), or, if there is no such agency, such other public or nonprofit private agency or organization (if any) as performs, as determined in accordance with criteria included in regulations, similar functions, and “(II) granted to the person proposing such capital expenditure an opportunity for a fair hearing with respect to such findings; then, for such period as he finds necessary in any case to effectuate the purpose of this section, he shall, in determining the Federal payments to be made under titles V, XVIII, and XIX with respect to services 42 USC 701, 1395, 1396. furnished in the health care facility for which such capital expenditure is made, not include any amount which is attributable to depreciation. interest on borrowed funds, a return on equity capital (in the ease of proprietary facilities), or other expenses related to such capital expenditure. With respect, to any organization which is reimbursed on a per capita basis, in determining the Federal payments to be made under titles V. XVIII, and XIX. the Secretary shall exclude an amount which in his judgment is a reasonable equivalent to the amount which would otherwise be excluded under this subsection if payment were to be made on other than a per capita basis. “(2) If the Secretary, after submitting the matters involved to the advisory council established or designated under subsection (i), determines that an exclusion of expenses related to any capital expenditure of any health care facility or health maintenance organization would discourage the operation or expansion of such facility or organization, or of any facility of such organization, which has demonstrated to his satisfaction proof of capability to provide comprehensive health care services (including institutional services) efficiently, effectively, and economically, or would otherwise be inconsistent with the effective organization and delivery of health services 42 USC 701, 1395, 1396. or the effective administration of title V, XVIII, or XIX, he shall not include such expenses pursuant to paragraph (1). “(e) Where a person obtains under lease or comparable arrangement any facility or part thereof, or equipment for a facility, which would have been subject to an exclusion under subsection (d) if the person had acquired it. by purchase, the Secretary shall (1) in computing such person’s rental expense, in determining the Federal payments to be made under titles V, XVIII, and XIX with respect to services furnished in such facility, deduct the amount which in his judgment is a reasonable equivalent of the amount that would have been excluded if the person had acquired such facility or such equipment by purchase, and (2) in computing such person’s return on equity capital deduct any amount deposited under the terms of the lease or comparable arrangement. “(f) Any person dissatisfied with a determination by the Secretary under this section may within six months following notification of such determination request the Secretary to reconsider such determination. A determination by the Secretary under this section shall not be subject to administrative or judicial review. “(g) For the purposes of this section, a ‘capital expenditure’ is an expenditure which, under generally accepted accounting principles, is not properly chargeable as an expense of operation and maintenance and which (1) exceeds $100,000, (2) changes the bed capacity of the facility with respect to which such expenditure is made, or (3) substantially changes the services of the facility with respect to which such expenditure is made. For purposes of clause (1) of the preceding sentence, the cost of the studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition, improvement, expansion, or replacement of the plant and equipment with respect to which such expenditure is made shall be included in determining whether such expenditure exceeds $100,000. “(h) The previsions of this section shall not apply to Christian Science sanatoriums operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts. “(i) (1) The Secretary shall establish a national advisory council, or designate an appropriate existing national advisory council, to advise and assist him in the preparation of general regulations to carry out the purposes of this section and on policy matters arising in the administration of this section, including the coordination of activities under this section with those under other parts of this Act or under other Federal or federally assisted health programs. “(2) The Secretary shall make appropriate provision for consultation between and coordination of the work of the advisory council established or designated under paragraph (1) and the Federal Hospital Council, the National Advisory Health Council, the Health Insurance Benefits Advisory Council, and other appropriate national advisory councils with respect to matters bearing on the purposes and administration of this section and the coordination of activities under this section with related Federal health programs. “(3) If an advisory council is established by the Secretary under paragraph (1), it shall be composed of members who are not otherwise in the regular full-time employ of the United States, and who shall be appointed by the Secretary without regard to the civil service laws from among leaders in the fields of the fundamental sciences, the med-ical sciences, and the organization, delivery, and financing of health care, and persons who are State or local officials or are active in community affairs or public or civic affairs or who are representative of minority groups. Members of such advisory council, while attending meetings of the council or otherwise serving on business of the council, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding the maximum rate specified at the time of such service for grade GS–18 in section 5332 of title 5, United States Code, 5 USC 5332 note. including traveltime, and while away from their homes or regular places of business they may also be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703(b) of such title 5 for persons in the Government service employed intermittently.” 80 Stat. 499. Effective date. (b) The amendment made by subsection (a) shall apply only with respect to a capital expenditure the obligation for which is incurred by or on behalf of a health care facility or health maintenance organization subsequent to whichever of the following is earlier: (A) December 31, 1972, or (B) with respect to any State or any part thereof specified by such State, the last day of the calendar quarter in which the State requests that the amendment made by subsection (a) of this section apply in such State or such part thereof. (c) (1) Section 505(a)(6) of such Act (as amended by section 232(b) of this Act) is further amended by inserting “, consistent Post, p. 1411. with section 1122,” after “standards” where it first appears. (2) Section 506 of such Act (as amended by sections 224(d), 229 (d), 233 (d), and 237 (b) of this Act) is further amended by adding Post, p. 1395. at the end thereof the following new subsection: “(g) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State or area wide planning agency, see section 1122.” Ante, p. 1386. (3) Clause (2) of the second sentence of section 509(a) of such Act is amended by inserting “, consistent with section 1122,” after 42 USC 709. “standards”. (4) Section 1861 (v) of such Act is amended by adding at the end 79 Stat. 313. 42 USC 1395x. thereof the following new paragraph: “(5) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State or areawide planning agency, see section 1122.” (5) Section 1902(a) (13) (D) of such Act (as amended by section 232(a) of this Act) is further amended by inserting “, consistent with Post, p. 1410. section 1122,” after “standards” where it first appears. (6) Section 1903(b) of such Act is amended by adding at the end 42 USC 1396b. thereof the following new paragraph: “(3) For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State, or areawide planning agency, see section 1122,” (d) In the case of a health care facility providing health care services as of December 18, 1970, which on such date is committed to a formal plan of expansion or replacement, the amendments made by the preceding provisions of this section shall not apply with respect to such expenditures as may be made or obligations incurred for capital items included in such plan where preliminary expenditures toward the plan of expansion or replacement (including payments for studies, surveys, designs, plans, working drawings, specifications, and site acquisition, essential to the acquisition, improvement, expansion, or replacement of the health care facility or equipment concerned) of $100,000 or more, had been made during the three-year period ended December 17, 1970. Sec. 222. demonstrations and reports; prospective reimbursement; extended care; intermediate care and homemaker services; ambulatory surgical centers; physicians’ assistants; performance incentive contracts (a) (1) The Secretary of Health, Education, and Welfare, directly or through contracts with, or grants to, public or private agencies or organizations, shall develop and carry out experiments and demonstration projects designed to determine the relative advantages and disadvantages of various alternative methods of making payment on a prospective basis to hospitals, skilled nursing facilities, and other providers of services for care and services provided by them 42 USC 1395. under title XVIII of the Social Security Act and under State plans 42 USC 1396, 701. approved under titles XIX and V of such Act, including alternative methods for classifying providers, for establishing prospective rates of payment, and for implementing on a gradual, selective, or other basis the establishment of a prospective payment system, in order to stimulate such providers through positive (or negative) financial incentives to use their facilities and personnel more efficiently and thereby to reduce the total costs of the health programs involved without adversely affecting the quality of services by containing or lowering the rate of increase in provider costs that has been and is being experienced under the existing system of retroactive cost reimbursement. (2) The experiments and demonstration projects developed under paragraph (1) shall be of sufficient scope and shall be carried out on a wide enough scale to permit a thorough evaluation of the alternative methods of prospective payment under consideration while giving assurance that the results derived from the experiments and projects will obtain generally in the operation of the programs involved (without committing such programs to the adoption of any prospective payment system either locally or nationally). (3) In the case of any experiment or demonstration project under paragraph (1), the Secretary may waive compliance with the requirements of titles XVIII, XIX, and V of the Social Security Act insofar as such requirements relate to methods of payment for services provided; and costs incurred in such experiment or project in excess of those which would otherwise be reimbursed or paid under such titles may be reimbursed or paid to the extent that such waiver applies to them (with such excess being borne by the Secretary). No experiment or demonstration project shall be developed or carried out under paragraph (1) until the Secretary obtains the advice and recommendations of specialists who are competent to evaluate the proposed experiment or project as to the soundness of its objectives, the possibilities of securing productive results, the adequacy of resources to conduct it, and its relationship to other similar experiments or projects already completed or in process; and no such experiment or project shall be actually placed in operation unless at least 30 days prior thereto a written report, prepared for purposes of notification and information only, containing a full and complete description thereof has been transmitted to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate. (4) Grants, payments under contracts, and other expenditures made for experiments and demonstration projects under this subsection shall be made in appropriate part from the Federal Hospital Insurance 42 USC 1395i. Trust Fund (established by section 1817 of the Social Security Act) and the Federal Supplementary Medical Insurance Trust Fund (established 42 USC 1393t. by section 1841 of the Social Security Act) and from funds appropriated under titles V and XIX of such Act. Grants and payments under contracts may be made either in advance or by way of reimbursement, as may be determined by the Secretary, and shall be made in such installments and on such conditions as the Secretary finds necessary to carry out the purpose of this subsection. With respect to any such grant, payment, or other expenditure, the amount to be paid from each of such trust funds (and from funds appropriated under such titles V and XIX) shall be determined by the Secretary, 42 USC 701, 1396. giving due regard to the purposes of the experiment or project involved. (5) The Secretary shall submit to the Congress no later than July Report to Congress. 1, 1974, a full report on the experiments and demonstration projects earned out under this subsection and on the experience of other programs with respect to prospective reimbursement together with any related data and materials which he may consider appropriate. Such report shall include detailed recommendations with respect to the specific methods which could be used in the full implementation of a system of prospective payment to providers of services under the programs involved. (b) (1) Section 402(a) of the Social Security Amendments of 1967 81 Stat. 930. 42 USC 1395b–1. is amended to read as follows: “(a) (1) The Secretary of Health, Education, and Welfare is authorized, either directly or through grants to public or nonprofit private agencies, institutions, and organizations or contracts with public or private agencies, institutions, and organizations, to develop and engage in experiments and demonstration projects for the following purposes: “(A) to determine whether, and if so which, changes in methods of payment or reimbursement (other than those dealt with in section 222(a) of the Social Security Amendments of 1972) for Ante, p. 1390. health care and services under health programs established by the Social Security Act, including a change to methods based on 49 Stat. 620. 42 USC 1305. negotiated rates, would have the effect of increasing the efficiency and economy of health services under such programs through the creation of additional incentives to these ends without adversely affecting the quality of such services; “(B) to determine whether payments for services other than those for which payment may be made under such programs (and which are incidental to services for which payment may be made under such programs) would, in the judgment of the Secretary, result in more economical provision and more effective utilization of services for which payment may be made under such program, where such services are furnished by organizations and institutions which have the capability of providing— “(i) comprehensive health care services, “(ii) mental health care services (as defined by section 401(c) of the Mental Retardation Facilities and Community Health Centers Construction Act of 1963), 77 Stat. 296. 42 USC 2691. “(iii) ambulatory health care services (including surgical services provided on an outpatient basis), or “(iv) institutional services which may substitute., at lower cost, for hospital care; “(C) to determine whether the rates of payment or reimbursement for health care services, approved by a State for purposes of the administration of one or more of its laws, when utilized to determine the amount to be paid for services furnished in such State under the health programs established by the Social Security Act, would have the effect of reducing the costs of such programs without adversely affecting the quality of such services; “(D) to determine whether payments under such programs based on a single combined rate of reimbursement or charge for the teaching activities and patient care which residents, interns, and supervising physicians render in connection with a graduate medical education program in a patient facility would result in more equitable and economical patient care arrangements without adversely affecting the quality of such care; “(E) to determine whether coverage of intermediate care facility services and homemaker services would provide suitable alternatives to post hospital benefits presently provided under title 42 USC 1395. XVIII of the Social Security Act; such experiment and demonstration projects may include: “(i) counting each day of care in an intermediate care facility as one day of care in a skilled nursing facility, if such care was for a condition for which the individual was hospitalized. “(ii) covering the services of homemakers for a maximum of 21 days, if institutional services are not medically appropriate. “(iii) determining whether such coverage would reduce long-range costs by reducing the lengths of stay in hospitals and skilled nursing facilities, and “(iv) establishing alternative eligibility requirements and determining the probable cost of applying each alternative, if the project suggests that such extension of coverage would be desirable; “(F) to determine whether, and if so which type of, fixed price or performance incentive contract would have the effect of inducing to the greatest degree effective, efficient, and economical performance of agencies and organizations making payment under agreements or contracts with the Secretary for health care and services under health programs established by the Social Security 42 USC 1305. Act; “(G) to determine under what circumstances payment for services would be appropriate and the most appropriate, equitable, and noninflationary methods and amounts of reimbursement under health care programs established by the. Social Security Act for services, which are performed independently by an assistant to a physician, including a nurse practitioner (whether or not performed in the office of or at a place at, which such physician is physically present), and— “(i) which such assistant is legally authorized to perform by the State or political subdivision wherein such services are performed, and “(ii) for which such physician assumes full legal and ethical responsibility as to the necessity, propriety, and quality thereof; “(H) to establish an experimental program to provide day-care services, which consist of such personal care, supervision, and services as the Secretary shall by regulation prescribe, for individuals eligible to enroll in the supplemental medical insurance program established under part B of title XVIII and title XIX 42 USC 1395j, 1396. of the Social Security Act, in day-care centers which meet such standards as the Secretary shall by regulation establish; and “(I) to determine whether the services of clinical psychologists may be made more generally available to persons eligible for services under titles XVIII and XIX of this Act in a manner consistent with quality of care and equitable and efficient administration. For purposes of this subsection, ‘health programs established by the Definition. Social Security Act’ means the program established by title XVIII of such Act, a program established by a plan of a State approved 42 USC 1395. under title XIX of such Act, and a program established by a plan 42 USC 1396. of a State approved under title V of such Act. 42 USC 701. “(2) Grants, payments under contracts, and other expenditures made for experiments and demonstration projects under paragraph (1) shall be made in appropriate part from the Federal Hospital Insurance Trust Fund (established by section 1817 of the Social Security Act) and the Federal Supplementary Medical Insurance 42 USC 1395i. Trust Fund (established by section 1841 of the Social Security Act) 42 USC 1395t. and from funds appropriated under titles V and XIX of such Act. Grants and payments under contracts may be made either in advance or by way of reimbursement, as may be determined by the Secretary, and shall be made in such installments and on such conditions as the Secretary finds necessary’ to carry out the purpose of this section. With respect to any such grant, payment, or other expenditure, the amount to be paid from each of such trust funds (and from funds appropriated under such titles V and XIX) shall be determined by the Secretary, giving due regard to the purposes of the experiment or project involved.” (2) Section 402 (b) of such amendments is amended— 42 USC 1395b–1. (A) by striking out “experiment” each time it appears and inserting in lieu thereof “experiment or demonstration project”; (B) by striking out “experiments” and inserting in lieu thereof “experiments and projects”; and (C) by striking out “reasonable charge” and inserting in lieu thereof “reasonable charge, or to reimbursement or payment only for such services or items as may be specified in the experiment”. (c) Section 1875(b) of the Social Security Act is amended— 42 USC 1395ll. (1) by striking out “experimentation” and inserting in lieu thereof “experiments and demonstration projects”, and (2) by inserting “and the experiments and demonstration projects authorized by section 222(a) of the Social Security Amendments of 1972” after “1967”. Ante, p. 1390. Sec. 223. limitations on coverage of costs under medicare (a) The first sentence of section 1861 (v) (1) of the Social Security Act is amended by inserting immediately before “determined” 42 USC 1395x. where it first appears the following: “the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services, and shall be”. (b) The third sentence of section 1861 (v) (1) of such Act is amended by striking out the comma after “services,” where it last appeal’s and inserting in lieu thereof the following: “may provide for the establishment of limits on the direct or indirect overall incurred costs or incurred costs of specific items or services or groups of items or services to be recognized as reasonable based on estimates of the costs necessary in the efficient delivery of needed health services to individuals covered by the insurance programs established under this title,”. (c) The fourth sentence of section 1861 (v) (1) of such Act is amended by inserting after “services” when it first appears the following: “(excluding therefrom any such costs, including standby costs, which are determined in accordance with regulations to be unnecessary in the efficient delivery of services covered by the insurance programs established under this title)”. (d) The fourth sentence of section 1861(v) (1) of such Act is further amended by striking out “costs with respect” where it first appears and inserting in lieu thereof the following: “necessary costs of efficiently delivering covered services”. (e) Section 1866(a) (2) (B) of such Act is amended (1) by inserting “(i)” after “(B)”, and (2) by adding at the end thereof the following new clause: “(ii) Where a provider of services customarily furnishes an individual items or services which are more expensive than the items or services determined to be necessary in the efficient delivery of needed health services under this title and which have not been requested by such individual, such provider may (except with respect to emergency services) also charge such individual or other person for such more expensive items or services to the extent that the costs of (or, if less, the customary charges for) such more expensive items or services experienced by such provider in the second fiscal period immediately preceding the fiscal period in which such charges are imposed exceed the cost of such items or services determined to be necessary in the efficient delivery of needed health services, but only if— “(I) the Secretary has provided notice to the public of any charges being imposed on individuals entitled to benefits under this title on account of costs in excess of the costs determined to be necessary in the efficient delivery of needed health services under this title by particular providers of services in the area in which such items or services are furnished, and “(II) the provider of services has identified such charges to such individual or other person, in such manner as the Secretary may prescribe, as charges to meet costs in excess of the cost determined to be necessary in the efficient delivery of needed health services under this title.” (f) Section 1861 (v) of such Act (as amended by section 221(c) (4) Ante, p. 1389. of this Act) is further amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph: “(4) If a provider of services furnishes items or services to an individual which are in excess of or more expensive than the items or services determined to be necessary in the efficient delivery of needed health services and charges are imposed for such more expensive items or services Supra. under the authority granted in section 1866(a) (2) (B) (ii), the amount of payment with respect to such items or services otherwise due such provider in any fiscal period shall be reduced to the extent that such payment plus such charges exceed the cost actually incurred for such items or services in the fiscal period in which such charges are imposed.” (g) (1) Section 1866(a)(2) of such Act is amended by inserting after subparagraph (C) the following new subparagraph: “(D) Where a provider of services customarily furnishes items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this title, such provider, notwithstanding the preceding provisions of this paragraph, may not, under the authority of section 1866(a) (2) (B) (ii), charge any individual or other person any amount for such items or services in excess of the amount of the payment which may otherwise be made for such items or services under this title if the admitting physician has a direct or indirect financial interest in such provider.” (2) The last paragraph of section 1866(a) (2) is amended by striking out “clause (iii) of the preceding sentence” and inserting in lieu thereof “subparagraph (C)”. (h) The amendments made by this section shall be effective with respect to accounting periods beginning after December 31, 1972. Sec. 224. limits on prevailing charge levels (a) Section 1842(b)(3) of the Social Security Act is 42 USC 1395u. amended by adding at the end thereof the following new sentences: “No charge may be determined to be reasonable in the case of bills submitted or requests for payment made under this part after December 31, 1970, if it exceeds the higher of (i) the prevailing charge recognized by the carrier and found acceptable by the Secretary for similar services in the same locality in administering this part on December 31, 1970, or (ii) the prevailing charge level that, on the basis of statistical data and methodology acceptable to the Secretary, would cover 75 percent of the customary charges made for similar services in the same locality during the last preceding calendar year elapsing prior to the start of the fiscal year in which the bill is submitted or the request for payment is made. In the case of physician services the prevailing charge level determined for purposes of clause (ii) of the preceding sentence for any fiscal year beginning after June 30, 1973, may not exceed (in the aggregate) the level determined under such clause for the fiscal year ending June 30, 1973, except to the extent that the Secretary finds, on the basis of appropriate economic index data, that such higher level is justified by economic changes. In the case of medical services, supplies, and equipment (including equipment servicing) that, in the judgment of the Secretary, do not generally vary significantly in quality from one supplier to another, the charges incurred after December 31, 1972, determined to be reasonable may not exceed the lowest charge, levels at which such services, supplies, and equipment are widely and consistently available in a locality except to the extent and under the circumstances specified by the Secretary’.” (b) The Health Insurance Benefits Advisory Council established Reimbursement for physicians’ services, study. Post, p. 1457. under section 1867 of the Social Security’ Act shall conduct a study of the methods of reimbursement for physicians’ services under Medicare for the purpose of evaluating their effects on (1) physicians’ fees generally, (2) the extent of assignments accepted by physicians, and (3) the share of total physician-fee costs which the Medicare program does not pay and which the beneficiary must assume. The Council Report to Congress. shall report the results of such study to the Congress no later than January 1, 1973, together with a presentation of alternatives to the present methods and its recommendations as to the preferred method. (c) Section 1903 of such Act is amended by adding at the end thereof 42 USC 1396b. (after the new subsections added by section 207(a) (1) of this Act) Ante, p. 1379. the following new subsection: “(i) Payment under the preceding provisions of this section shall not be made, with respect to any amount paid for items or services furnished under the plan after December 31, 1972, to the extent that such amount exceeds the charge which would be determined to be reasonable for such items or services under the third, fourth, and fifth sentences of section 1842(b) (3).” Supra. (d) Section 506 of such Act is amended by adding at the end thereof 81 Stat. 924. 42 USC 706. the following new subsection: “(f) Notwithstanding the preceding provisions of this section, no payment shall be made to any State thereunder with respect to any amount paid for items or services furnished under the plan after December 31, 1972, to the extent that such amount exceeds the charge which would be determined to be reasonable for such items or services under the third, fourth, and fifth sentences of section 1842(b) (3),” Supra. Sec. 225. limits ox payment for skilled nursing home and intermediate care facility services Section 1903 of the Social Security Act is amended by adding at the end thereof (after the new subsection added by section 224 Ante, p. 1395. (c) of this Act) the following new subsection: “(j) Notwithstanding the preceding provisions of this section— “(1) in determining the amount payable to any State with respect to expenditures for skilled nursing home services furnished in any calendar quarter beginning after December 31, 1972, there shall not be included as expenditures under the State plan any amount in excess of the product of (A) the number of inpatient days of skilled nursing home services provided under the State plan in such quarter, and (B) 105 per centum of the average per diem cost of such services for the fourth calendar quarter preceding such calendar quarter; and “(2) in determining the amount payable to any State with respect to expenditures for intermediate care facility services furnished in any calendar quarter beginning after December 31, 1972, there shall not be included as expenditures under the State plan any amount in excess of the product of (A) the number of inpatient days of intermediate care facility services provided in such quarter under each of the plans of such State approved under 42 USC 301, 1201, 1351, 1381, 1396. titles I, X, XIV, XVI. and XIX, and (B) 105 per centum of the average per diem cost of such services for the fourth calendar quarter preceding such calendar quarter. For purposes of determining the amount payable to any State with respect to any quarter under paragraphs (1) and (2), the Secretary may by regulation increase the percentage specified in clause (B) of each such paragraph to the extent necessary to take account of increases in per diem costs which result directly from increases in the Federal minimum wage, or which otherwise result directly from cost increases which the Secretary’ determines are attributable to the upgrading of services and facilities required by this Act or from provisions of Federal law enacted (or amendments to Federal law made) after the date of the enactment of the Social Security Amendments of 1972.” Sec. 226. payments to health maintenance organizations (a) Title XVIII of the Social Security Act is amended by adding at the end thereof the following new section: “Sec. 1876. “payments to health maintenance organizations (a) (1) In lieu of amounts which would otherwise be Post, p. 1411. 42 USC 1395l. payable pursuant to sections 1814(b) and 1833(a), the Secretary is authorized to determine, by actuarial methods, as provided in this section, but only with respect to a health maintenance organization with which he has entered into a contract under subsection (i), a per capita rate of payment— “(A) for services provided under parts A and B for individuals enrolled with such organization pursuant to subsection (e) who are entitled to hospital insurance benefits under part A and enrolled for medical insurance benefits under part B, and “(B) for services provided under part B for individuals enrolled with such organization pursuant to subsection (e) who are not entitled to benefits under part A but who are enrolled for benefits under part B. “(2) An interim per capita rate of payment for each health Interim per capita rate. maintenance organization shall be determined annually by the Secretary on the basis of each organization’s animal operating budget and enrollment forecast which shall be submitted (in such form and in such detail as the Secretary may prescribe) at least 90 days before the beginning of each contract year. Each interim rate shall be equal to the estimated per capita cost (based upon types and components of expenses otherwise reimbursable under this title) of providing services defined in paragraph (3) (A) (iii). In the event that the data Infra. requested to be furnished by a health maintenance organization are not furnished timely, such reduction in interim payments may be made by the Secretary as is appropriate, until such time as a reasonable estimate of per capita costs can be made. Each month, the Secretary shall pay each such organization its interim per capita rate, in advance, for each individual enrolled with it pursuant to subsection (e). Each such organization shall submit interim estimated cost reports Interim estimated cost reports. and enrollment data on a quarterly basis in such form and manner satisfactory to the Secretary, and the Secretary shall adjust each interim per capita rate to the extent necessary to maintain interim payments at the level of current costs. Interim payments made under this paragraph shall be subject to retroactive adjustment at the end of each contract year as provided in paragraph (3). “(3) (A) With respect, to any health maintenance organization Adjustments. which has entered into a risk sharing contract with the Secretary pursuant to subsection (i)(2)(A), payments made to such organization shall be subject, to the following adjustments at the end of each contract year: “(i) if the Secretary determines that the per capita incurred Per capita incurred cost, apportionment. cost of any such organization in any contract year for providing services described in paragraph (1) is less than the adjusted average per capita incurred cost (as defined herein) of providing such services, the resulting difference (hereinafter referred to as ‘savings’) shall be apportioned following the close of a contract year for such year between such organization and the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust. Fund (hereinafter collectively referred to as the ‘Medicare Trust Funds’) as follows: “(I) savings up to 20 percent of the adjusted average per capita cost shall be apportioned equally between such organization and the Medicare Trust Funds; “(II) savings in excess of 20 percent of the adjusted average per capita cost shall be apportioned entirely to such Trust Funds; “(ii) if the Secretary determines that the per capita incurred Losses. cost, of any such organization in any contract year for providing services described in paragraph (1) is greater than the adjusted average per capita incurred cost of providing such services, the resulting difference (hereinafter referred to as ‘losses’), shall be absorbed by such organization, and shall be carried forward and offset, from savings realized in later years, with the apportionment of savings being proportional to the losses absorbed and not yet offset; “(iii) determination of any amounts payable at the close of the contract year to such organization or to the Trust Funds shall be made as follows: “(I) within 90 days after close of a contract year, interim determination of the amount of estimated savings and apportionment thereof shall be made, actuarially, on the basis of interim reports of costs incurred by an organization, and adjusted average per capita costs incurred (as defined herein), and other evidence acceptable to the Secretary and one-half of any amounts deemed payable to such organization or the Trust Funds shall be paid by such organization or the Secretary as appropriate; “(II) final settlement and payment by the Secretary or organization, as appropriate, of any additional amounts’ due on basis of such final settlement will be made where adequate data for actuarial computation are available, in timely fashion following submission by such organization of reports specified in subparagraph (C) of this paragraph; and “(III) where such final settlement is reached more than 90 days following submission of reports specified in subparagraph (C) of this paragraph, any amount payable by the Secretary or organization shall be increased by an interest amount, accruing from the 91st day following submission of such report, equal to the average rate of interest payable on Federal obligations if issued on such 91st day for purchase by the Trust Funds. “(iv) The term ‘adjusted average per capita cost’ means the average per capita amount that the Secretary determines (on the basis of actual experience, or retrospective actuarial equivalent based upon an adequate sample and other information and data, in the geographic area served by a health maintenance organization or in a similar area, with appropriate adjustment to assure actuarial equivalence, including adjustments relating to age distribution, sex, race, institutional status, disability status, and any other relevant factors) would be payable in any contract year for services covered under this title, and types of expenses otherwise reimbursable under this title (including administrative costs 79 Stat. 297; Post, p. 1449. 42 USC 1395h, 1395u. incurred by organizations described in sections 1816 and 1842) if such services were to be furnished by other than such health maintenance organization. “(B) With respect to any health maintenance organization which has entered into a reasonable cost reimbursement contract with the Secretary pursuant to subsection (i) (2) (B), payments made to such organization shall be subject to suitable retroactive corrective adjustments at the end of each contract year so as to assure, that such organization is paid for the reasonable cost actually incurred (excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of health services) for the types of expenses otherwise reimbursable under this title for providing services covered under this title to individuals described in paragraph (1). “(C) Any contract with a health maintenance organization under this title shall provide that the Secretary shall require, at such time following the expiration of each accounting period of a health maintenance organization (and in such form and in such detail) as he may prescribe: “(i) that such health maintenance organization report to him in an independently certified financial statement its per capita incurred cost based on the types and components of expenses otherwise reimbursable under this title for providing services described in paragraph (1), including therein, in accordance with accounting procedures prescribed by the Secretary, its methods of allocating costs between individuals enrolled under this section and other individuals enrolled with such organization; “(ii) that failure to report such information as may be required may be deemed to constitute evidence of likely overpayment on the basis of which appropriate collection action may be taken; “(iii) that in any case in which a health maintenance organization is related to another organization ‘by common ownership or control, a consolidated financial statement shall be filed and that the allowable costs for such organization may not include costs for the types of expense otherwise reimbursable under this title, in excess of those which would be determined to be reasonable in accordance with regulations (providing for limiting reimbursement to costs rather than charges to the health maintenance organization by related organizations and owners) issued by the Secretary in accordance with section 1861 (v) of the Social Security Act; and 42 USC 1395x. “(iv) that in any case in which compensation is paid by a health maintenance organization substantially in excess of what is normally paid for similar services by similar practitioners (regardless of method of compensation), such compensation may as appropriate be considered to constitute a distribution of profits. “(4) The payments to health maintenance organizations under this subparagraph with respect to individuals described in subsection (a) (1)(A) shall be made from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund. The portion of such payment to such an organization for a month to be paid by the latter trust fund shall be equal to 200 percent of the sum of— “(A) the product of (i) the number of covered enrollees of such organization for such month (as described in paragraph (1)) who have attained age 65, and (ii) the monthly actuarial rate for supplementary medical insurance for such month as determined under section 1839 (c) (1), and Ante, p. 1376. “(B) the product of (i) the number of covered enrollees of such organization for such month (as described in paragraph (1)) who have not attained age 65, and (ii) the monthly actuarial rate for supplementary medical insurance for such month as determined under section 1839 (c) (4). Ante, P. 1377. The remainder of such payment shall be paid by the former trust fund. For limitation on Federal participation for capital expenditures which are out of conformity with a comprehensive plan of a State or areawide planning agency, see section 1122. Ante, p. 1386. “Health maintenance organization.” “(b) The term ‘health maintenance organization’ means a public or private organization which— “(1) provides, either directly or through arrangements with others, health services to individuals enrolled with such organization on the basis of a predetermined periodic rate without regard to the frequency or extent of services furnished to any particular enrollee; “(2) provides, either directly or through arrangements with others, to the extent applicable in subsection (c) (through institutions, entities, and persons meeting the applicable requirements of section 1861), all of the services and benefits covered under 42 USC 1395x. parts A and B of this title which are available to individuals 42 USC 1395c, 1395j. residing in the geographic area served by the health maintenance organization; “(3) provides physicians’ services primarily (A) directly through physicians who are either employees or partners of such organization, or (B) under arrangements with one or more groups of physicians (organized on a group practice, or individual practice basis) under which, each such group is reimbursed for its services primarily on the basis of an aggregate fixed sum or on a per capita basis, regardless of whether the individual physician members of any such group are paid on a fee-for-service or other basis; “(4) provides either directly or under arrangements with others, the services of a sufficient number of primary care and specialty care physicians to meet the health needs of its members; “Specialty care physician.” for purposes of this section the term ‘specialty care physician’ means a physician who is either hoard certified or eligible for board certification, except that the Secretary may by regulation prescribe conditions under which physicians who have a record of demonstrated proficiency but who are not eligible for board certification may, on the basis of training and experience, be recognized as specialty care physicians; “(5) has effective arrangements to assure that its members have access to qualified practitioners in those specialties which are generally available in the geographic area served by the health maintenance organization; “(6) demonstrates to the satisfaction of the Secretary proof of financial responsibility and proof of capability to provide comprehensive health care services, including institutional services, efficiently, effectively, and economically; “(7) except as provided in subsection (h), has at least half of its enrolled members consisting of individuals under age 65; “(8) assures that the health services required by its members are received promptly and appropriately and that the services that are received measure up to quality standards which it establishes in accordance with regulations; and “(9) has an open enrollment period at least every year under which it accepts up to the limits of its capacity and without restrictions, except as may be authorized in regulations, individuals who are eligible to enroll under subsection (d) in the order in which they apply for enrollment (unless to do so would result in failure to meet the requirements of paragraph (7)) or would result in enrollment of enrollees substantially nonrepresentative, as determined in accordance with regulations of the Secretary, of the population in the geographic area served by such health maintenance organization. “(c) The benefits provided under this section to enrollees of an organization which has entered into a risk sharing contract with the Post, p. 1401. Secretary pursuant to subsection (i) (2) (A) shall consist of— “(1) in the case of an individual who is entitled to hospital 42 USC 1395c. 42 USC 1395j. insurance benefits under part A and enrolled for medical insurance benefits under part B— “(A) entitlement to have payment made on his behalf for 79 Stat. 291. 42 USC 1395d. Post, p. 1406. all services described in section 1812 and section 1832 which are furnished to him by the health maintenance organization with which he is enrolled pursuant to subsection (e) of this section; and “(B) entitlement to have payment, made by such health maintenance organization to him or on his behalf for (i) such emergency services (as defined in regulations.), (ii) such urgently needed services (as defined in regulations) furnished to him during a period of temporary absence (as defined in regulations) from the geographic area served by the health maintenance organization with which he is enrolled, and (iii) such other services as may be determined, in accordance with subsection (f), to be services which the individual was entitled to have furnished by the health maintenance organization, as may be furnished to him by a physician, supplier, or provider of services, other than the health maintenance organization with which he is enrolled; and “(2) in the case of an individual who is not entitled to hospital insurance benefits under part A but who is enrolled for medical 42 USC 1395c. insurance benefits under part B, entitlement to have payment 42 USC 1395j. made for services described in paragraph (1), but only to the extent that such services are also described in section 1832. 79 Stat. 302. 42 USC 1395k. “(d) Subject to the provisions of subsection (e), every individual described in subsection (c) shall be eligible to enroll with any health maintenance organization (as defined in subsection (b)) which serves the geographic area in which such individual resides. “(e) An individual may enroll with a health maintenance organization under this section, and may terminate such enrollment, as may be prescribed by regulations. “(f) Any individual enrolled with a health maintenance organization Hearings; judicial review. under this section who is dissatisfied by reason of his failure to receive without additional cost to him any health service to which he believes he is entitled shall, if the amount in controversy is $100 or more, be entitled to a hearing before the Secretary to the same extent as is provided in section 205(b) and in any such hearing the Secretary 53 Stat. 1368. 42 USC 405. shall make such health maintenance, organization a party thereto. If the amount in controversy is $1,000 or more, such individual or health maintenance organization shall be entitled to judicial review of the Secretary’s final decision after such hearing as is provided in section 205(g). “ “(g) (1) If the health maintenance organization provides its enrollees under this section only the services described in subsection (c), its premium rate, or other charges for such enrollees shall not exceed the actuarial value of the deductible and coinsurance which would otherwise be applicable to such enrollees under part A and part B, if they were not enrolled under this section. “(2) If the health maintenance organization provides to its enrollees under this section services in addition to those described in subsection (c), election of coverage for such additional services shall be optional for such enrollees and such organization shall furnish such enrollees with information on the portion of its premium rate or other charges applicable to such additional services. The portion applicable to the services described in subsection (c) may not exceed (i) the actuarial value of the deductible and coinsurance which would otherwise be applicable to such enrollees under part A and part B if they were not enrolled under this section less (ii) the actuarial value of other charges made in lieu of such deductible and coinsurance. “(h) The provisions of paragraph (7) of subsection (b) shall not Nonapplicability. apply with respect to any health maintenance organization for such period not to exceed three years from the date such organization enters into an agreement with the Secretary pursuant to subsection (i), as the Secretary may permit, but only so long as such organization demonstrates to the satisfaction of the Secretary by the submission of its plans for each year that it is making continuous efforts and progress toward achieving compliance with the provisions of such paragraph (7) within such three-year period. “(i) (1) Subject to the limitations contained in subparagraphs (A) Contract authority. and (B) of paragraph (2), the Secretary is authorized to enter into a contract with any health maintenance organization which undertakes to provide, on an interim per capita prepayment basis, the services described in section 1832 (and section 1812, in the case of indi- 42 USC 1395d. 42 USC 1395c. viduals who are entitled to hospital insurance benefits under part A) to individuals enrolled with such organization pursuant to subsection (e). “(2) (A) If the health maintenance organization (i) has a current enrollment of not less than 25,000 members on a prepaid capitation basis and has been the primary source of health care of at least 8,000 persons in each of the two years immediately preceding the contract year, or (ii) serves a nonurban geographic area, has a current enrollment of not less than 5,000 members on a prepaid capitation basis and has been the primary source of health care for at least 1,500 persons in each of the three years immediately preceding the contract year, the Secretary may enter into a risk sharing contract with such organization pursuant to which any savings, as determined pursuant to subsection (a)(3)(A), are shared between such organization and the Medicare Trust Funds in the manner prescribed in such subsection. Nonurban geographic area. For purposes of this subparagraph, a health maintenance organization shall be considered to serve a nonurban geographic area if it is located in a nonmetropolitan county (that is, a county with fewer than 50,000 inhabitants), or if it has at least one such county in its normal service area, or if it is located outside of a metropolitan area and its facilities are within reasonable travel distance (as defined Prohibition. by the Secretary) of fewer than 50,000 individuals. No health maintenance organization which has entered into a risk-sharing contract with the Secretary under this subparagraph and has voluntarily terminated such contract may again enter into such a contract. “(B) If the health maintenance organization does not meet the requirements of subparagraph (A), or if the Secretary’ is not satisfied that the health maintenance organization has the capacity to bear the risk of potential losses as determined under clause (ii) of subsection (a)(3)(A), or if the health maintenance organization meeting the requirements of subparagraph (A) so elects, or if an organization does Ante, p. 1399. not fully meet the requirements of section 1876(b) but has demonstrated to the satisfaction of the Secretary that it is making reasonable efforts to meet, and is developing the capability to fully meet, such requirements, and that it fully meets such basic requirements as the Secretary shall prescribe, in regulations, the Secretary may, if he is otherwise satisfied that the health maintenance organization or other organization is able to perform its contractual obligations effectively and efficiently, enter into a contract with such organization pursuant to which such organization is reimbursed on the basis of its reasonable 42 USC 1395x. cost (as defined in section 1861 (v)) in the manner prescribed in subsection (a) (3) (B). “(3) Such contract may, at the option of such organization, provide that the Secretary (A) will reimburse hospitals and extended care facilities for the reasonable cost (as determined under section 1861 (v)) of services furnished to individuals enrolled with such organization pursuant to subsection (e), and (B) will deduct the amount of such reimbursement from payments which would otherwise be made to such organization. If a health maintenance organization pays a hospital or extended care facility directly, the amount paid shall not exceed the reasonable cost of the services (as determined under section 1861 (v)) unless such organization demonstrates to the satisfaction of the Secretary that such excess payments are justified on the basis of advantages gained by the organization. “(4) Each contract under this section shall be for a term of at least one year, as determined by the Secretary, and may be made automatically renewable from term to term in the absence of notice by either party of intention to terminate at the end of the current term; except that the Secretary may terminate any such contract at any time (after such reasonable notice and opportunity for hearing to the health maintenance organization involved as he may provide in regulations), Contract termination, notice, hearing. if he finds that the organization (A) has failed substantially to carry out the contract, (B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this section, or (C) no longer substantially meets the applicable conditions of subsection (b). “(5) The effective date of any contract executed pursuant to this subsection shall be specified in such contract pursuant to the regulations. “(6) Each contract under this section— “(A) shall provide that the Secretary, or any person or organization designated by him— “(i) shall have the right to inspect or otherwise evaluate Inspection authority. the quality, appropriateness, and timeliness of services performed under such contract; and “(ii) shall have the right to audit and inspect any books and records of such health maintenance organization which pertain to services performed and determinations of amounts payable under such contract; “(B) shall provide that no reinsurance costs (other than those with respect to out-of-area services), including any underwriting of risk relating to costs in excess of adjusted average per capita cost, as defined in clause (iii) of subsection (a) (3) (A), shall be allowed for purposes of determining payments authorized under this section; and “(C) shall contain such other terms and conditions not inconsistent with this section as the Secretary may find necessary. “(j) The function vested in the Secretary by subsection (i) may be performed without regard to such provisions of law or of other regulations relating to the making, performance, amendment, or modification of contracts of the United States as the Secretary may determine to be inconsistent with the furtherance of the purposes of this title.” (b) (1) Notwithstanding the provisions of section 1814 and section 1833 of the Social Security Act, any health maintenance organization 42 USC 1395f, 1395l. which has entered into a contract with the Secretary pursuant to section 1876 of such Act shall, for the duration of such Ante, p. 1396. contract, (except as provided in paragraph (2)) be entitled to reimbursement only as provided in section 1876 of such Act for individuals who are members of such organizations. (2) With respect to individuals who are members of organizations which have entered into a risk-sharing contract with the Secretary pursuant to subsection (i)(2)(A) prior to July 1, 1973, and who, Ante, p. 1402. although eligible to have payment made pursuant to section 1876 of such Act for services rendered to them, chose (in accordance with regulations) not to have such payment made pursuant to such section, the Secretary shall, for a period not to exceed three years commencing on July 1, 1973, pay to such organization on the basis of an interim per capita rate, determined in accordance with the provisions of section 1876(a)(2) of such Act, with appropriate actuarial adjustments to reflect the difference in utilization of out-of-plan services, which would have been considered sufficiently reasonable and necessary under the rules of the health maintenance organization to be provided by that organization, between such individuals and individuals who are enrolled with such organization pursuant to section 1876 of such Act. Payments under this paragraph shall be subject to retroactive adjustment at the end of each contract year as provided in paragraph (3). (3) If the Secretary determines that the per capita cost of any such organization in any contract year for providing services to individuals described in paragraph (2), when combined with the cost of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such year for providing out-of-plan services to such individuals, is less than or greater than the adjusted Ante, p. 1396. average per capita cost (as defined in section 1876(a) (3) of such Act) of providing such services, the resulting savings shall be apportioned between such organization and such Trust. Funds, or the resulting losses shall be absorbed by such organization, in the manner prescribed in section 1876(a) (3) of such Act. (c) (1) Section 1814(a) of such Act is amended by striking out “Except as provided in subsection (d),” and inserting in lieu thereof the following: “Except as provided in subsection (d) and in section 1876,”. (2) Section 1833(a) of such Act is amended by striking out “Subject to” and inserting in lieu thereof the following: “Except as provided in section 1876, and subject to”. (d) Section 1875(b) of the Social Security Act, as amended by section 222 (c) of this Act, is further amended— (1) by inserting “the operation and administration of health maintenance organizations authorized by section 226 of the Social Ante, p. 1396. Security Amendments of 1972,” after the word “including”; and (2) by striking out “1971” and inserting in lieu thereof “1972”. (e) Section 1903 of such Act, as amended by sections 207, 224, and 290 of this Act, is further amended by adding after subsection (j) the following new subsection: “(k) The Secretary is authorized to provide at the request of any State (and without cost to such State) such technical and actuarial assistance as may be necessary to assist such State to contract with any health maintenance organization which meets the requirements of section 1876 for the purpose of providing medical care and services to individuals who are entitled to medical assistance under this title.” (f) The amendments made by this section shall be effective with respect to services provided on or after July 1, 1973. Sec. 227. payment under medicare for services of physicians rendered at a teaching hospital (a) Section 1861(b) of the Social Security Act is amended by striking out the second sentence and inserting in lieu thereof the following: “Paragraph (4) shall not apply to services provided in a hospital by— “(6) an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or. in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association; or “(7) a physician where the hospital has a teaching program approved as specified in paragraph (6), unless (A) such inpatient is a private patient (as defined in regulations), or (B) the hospital establishes that during the two-year period ending December 31, 1967, and each year thereafter all inpatients have been regularly billed by the hospital for services rendered by physicians and reasonable efforts have been made to collect in full from all patients and payment of reasonable charges (including applicable deductibles and coinsurance) has been regularly collected in full or in substantial part from at least 50 percent of all inpatients.” (b) (1) So much of section 1814(a) of such Act as precedes paragraph 42 USC 1395f. (1) (as amended by section 226(c) (1) of this Act) is further amended by striking out “subsection (d)” and inserting in lieu thereof “subsections (d) and (g)”. (2) Section 1814 is further amended by adding at the end thereof the Ante, p. 1382. following new subsection: “(g) “Payment for Services of a Physician Rendered in a Teaching Hospital Pot purposes of services for which the reasonable cost thereof is determined under section 1861 (v) (1) (D), payment under this part Infra. shall be made to such fund as may be designated by the organized medical staff of the hospital in which such services were furnished or, if such services were furnished in such hospital by the faculty of a medical school, to such fund as may be designated by such faculty, but only if— “(1) such hospital has an agreement with the Secretary under section 1866, and 42 USC 1395cc. “(2) the Secretary has received written assurances that (A) such payment will be used by such fund solely for the improvement of care of hospital patients or for educational or charitable purposes and (B) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged, provision will be made for return of any moneys incorrectly collected).” (c) Section 1861(v) (1) of such Act (as amended by section 223 of 42 USC 1395x. this Act) is amended— (1) by inserting “(A)” after “(1)”; (2) by striking out “(A) take” and “(B) provide” in the fourth sentence and inserting in lieu thereof “(i) take” and “(ii) provide”, respectively; (3) by inserting “(B)” immediately preceding “Such regulations in the case of extended care services”; and (4) by adding at the end thereof the following new subparagraphs: “(C) Where a hospital has an arrangement with a medical school under which the faculty of such school provides services at such hospital, an amount not in excess of the reasonable cost of such services to the medical school shall be included in determining the reasonable cost to the hospital of furnishing services— “(i) for which payment may be made under part A, 42 USC 1395c. but only if “(I) payment for such services as furnished under such arrangement would be made under part A to the hospital had such services been furnished by the hospital, and “(II) such hospital pays to the medical school at least the reasonable cost of such services to the medical school, or “(ii) for which payment may be made under part B, but only if such hospital pays to the medical school at least the reasonable cost of such services to the medical school. “(D) Where (i) physicians furnish services which are either inpatient hospital services (including services in conjunction with the teaching programs of such hospital) by reason of paragraph (7) of subsection (b) or for which entitlement exists by reason of clause (II) of section 1832 Infra. (a)(2)(B) (i) and (ii) such hospital (or medical school under arrangement with such hospital) incurs no actual cost in the furnishing of such services, the reasonable cost of such services shall (under regulations of the Secretary) be deemed to be the cost such hospital or medical school would have incurred had it paid a salary to such physicians rendering such services approximately equivalent to the average salary paid to all physicians employed by such hospital (or if such employment does not exist, or is minimal in such hospital, by similar hospitals in a geographic area of sufficient size to assure reasonable inclusion of sufficient physicians in development of such average salary).” (d) (1) Section 1861 (u) of such Act is amended by inserting before the period at the end thereof the following: “, or, for purposes of section 1814(g) and Ante, p. 1405; Infra. section 1835 (e), a fund”. (2) So much of section 1866(a) (1) of such Act as precedes subparagraph (A) is amended by inserting “(except a fund designated for purposes of section 1814(g) and section 1835(e))” after “provider of services”. (e) (1) Section 1832(a) (2) (B) of such Act is amended to read as follows: “(B) medical and other health services furnished by a provider of services or by others under arrangement with them made by a provider of services, excluding— “(i) physician services except where furnished by— “(I) a resident or intern of a hospital, or “(II) a physician to a patient in a hospital which has a teaching program approved as specified in Ante, p. 1404. paragraph (6) of section 1861(b) (including services in conjunction with the teaching programs of such hospital whether or not such patient is an inpatient of such hospital), unless either clause (A) or (B) of paragraph (7) of such section is met, and “(ii) services for which payment may be made pursuant to section 1835(b) (2); and”. (2) (A) So much of section 1835(a) of such Act as precedes paragraph (1) is amended by striking out “subsections (b) and (c),” and inserting in lieu thereof “subsections (b), (c), and (e),”. (B) Section 1835 of such Act is further amended by adding at the end thereof the following new subsection: “(e) For purposes of services (1) which are inpatient hospital Ante, p. 1404. services by reason of paragraph (7) of section 1861(b) or for which entitlement exists by reason of clause (II) of section 1832(a) (2)(B) Supra. (i), and (2) for which the reasonable cost thereof is determined under Ante, p. 1405. section 1861 (v) (1) (D), payment under this part shall be made to such fund as may be designated by the organized medical staff of the hospital in which such services were furnished or, if such services were furnished in such hospital by the faculty of a medical school, to such fund as may be designated by such faculty, but only if— “(1) such hospital has an agreement with the Secretary under section 1866, and 42 USC 1395cc. “(2) the Secretary has received written assurances that such payment will be used by such fund solely for the improvement of care to patients in such hospital or for educational or charitable purposes and (B) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged provision will be made for return for any moneys incorrectly collected).” (3) Section 1842(a) of such Act is amended by inserting after 42 USC 1395u. “which involve payments for physicians’ services” the following: “on a reasonable charge basis”. (f) Section 1861 (q) of such Act is amended by striking out the 42 USC 1395x. parenthetical phrase “(but not including services described in the last sentence of subsection (b))” and inserting in lieu thereof “(but not including services described in subsection (b)(6))”. Ante, p. 1404. (g) The amendments made by this section shall apply with respect Effective date. to accounting periods beginning after June 30, 1973. Sec. 228. advance approval of extended care and home health coverage under medicare (a) Section 1814 of the Social Security Act (as amended by section 227(b)(2) of this Act) is amended by adding at the end Ante, p. 1405. thereof the following new subsections: “(h) “Payment for Posthospital Extended Care Services (1) An individual shall be presumed to require the care specified in subsection (a) (2) (C) of this section for purposes of making Post, p. 1425. payment to an extended care facility (subject to the provisions of section 1812) for post hospital extended care services which are furnished 42 USC 1395d. by such facility to such individual if— “(A) the certification referred to in subsection (a)(2)(C) of this section is submitted prior to or at the time of admission of such individual to such extended care facility, “(B) such certification states that the medical condition of the individual is a condition designated in regulations, “(C) such certification is accompanied by a plan of treatment for providing such services, and “(D) there is compliance with such other requirements and procedures as may be specified in regulations, but only for services furnished during such limited periods of time with respect to such conditions of the individual as may be prescribed in regulations by the Secretary, taking into account the medical severity of such conditions, the degree of incapacity, and the minimum length of stay in an institution generally needed for such conditions, and such other factors affecting the type of care to be provided as the Secretary deems pertinent. “(2) If the Secretary determines with respect to a physician that Erroneous certification, nonapplicability. such physician is submitting with some frequency (A) erroneous certifications that individuals have conditions designated in regulations as provided in this subsection or (B) plans for providing services which are inappropriate, the provisions of paragraph (1) shall not apply, after the effective date of such determination, in any case in which such physician submits a certification or plan referred to in subparagraph (A), (B),or (C) of paragraph (1). “(i) “Payment for Posthospital Home Health Services (1) An individual shall be presumed to require the services 42 USC 1395f. specified in subsection (a)(2)(D) of this section for purposes of making payment to a home health agency (subject to the provisions of section 42 USC 1395d. 1812) for posthospital home health services furnished by such agency to such individual if— “(A) the certification and plan referred to in subsection (a) (2) (D) of this section are submitted in timely fashion prior to the first visit by such agency, “(B) such certification states that the medical condition of the individual is a condition designated in regulations, and “(C) there is compliance with such other requirements and procedures as may be specified in regulations, but only for services furnished during such limited numbers of visits with respect to such conditions of the individual as may be prescribed in regulations by the Secretary, taking into account the medical severity of such conditions, the degree of incapacity, and the minimum period of home confinement generally needed for such conditions, and such other factors affecting the type of care to be provided as the Secretary deems pertinent. “(2) If the Secretary determines with respect to a physician that such physician is submitting with some frequency (A) erroneous certifications that individuals have conditions designated in regulations as provided in this subsection or (B) plans for providing services which are inappropriate, the provisions of paragraph (1) shall not apply, after the effective date of such determination, in any case in which such physician submits a certification or plan referred to in subparagraph (A) or (B) of paragraph (1).” (b) The amendment made by subsection (a) and any regulations adopted pursuant to such amendment shall apply with respect to plans of care initiated on or after January 1, 1973, and with respect to admission to skilled nursing facilities and home health plans initiated on or after such date. Sec. 229. authority of secretary to terminate payments to suppliers of services (a) Section 1862 of the Social Security Act (as amended Ante, p. 1382. by section 210 of this Act) is further amended by adding at the end thereof the following new subsection: “(d) (1) No payment may be made under this title with respect to any item or services furnished to an individual by a person where the Secretary determines under this subsection that such person— “(A) has knowingly and willfully made, or caused to be made, any false statement or representation of a material fact for use in an application for payment under this title or for use in determining the right to a payment under this title; “(B) has submitted or caused to be submitted (except in the case of a provider of services), bills or requests for payment under this title containing charges (or in applicable cases requests for payment of costs to such person) for services rendered which the Secretary finds, with the concurrence of the appropriate program Post, p. 1409. review team appointed pursuant to paragraph (4), to be substantially in excess of such person’s customary charges (or in applicable cases substantially in excess of such person’s costs) for such services, unless the Secretary finds there is good cause for such bills or requests containing such charges (or in applicable cases, such costs); or “(C) has furnished services or supplies which are determined by the Secretary, with the concurrence of the members of the appropriate program review team appointed pursuant to paragraph (4) who are physicians or other professional personnel in Infra. the health care field, to be substantially in excess of the needs of individuals or to be harmful to individuals or to be of a grossly inferior quality. “(2) A determination made by the Secretary under this subsection Determination effective date, public notice. shall be effective at such time and upon such reasonable notice to the public and to the person furnishing the services involved as may be specified in regulations. Such determination shall be effective with respect to services furnished to an individual on or after the effective date of such determination (except that in the case of inpatient hospital services, posthospital extended care services, and home health services such determination shall be effective in the manner provided in section 1866(b) (3) and (4) with respect to terminations of agreements), Post, p. 1427 and shall remain in effect until the Secretary finds and gives reasonable notice to the public that the basis for such determination has been removed and that there is reasonable assurance that it will not recur. “(3) Any person furnishing services described in paragraph (1) Judicial review. who is dissatisfied with a determination made by the Secretary under this subsection shall be entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided in section 205(b), and to judicial review of the Secretary’s final 42 USC 405. decision after such hearing as is provided in section 205(g). “(4) For the purposes of paragraph (1) (B) and (C) of this subsection, Program review teams. Infra. and clause (F) of section 1866(b)(2), the Secretary shall, after consultation with appropriate State and local professional societies, the appropriate carriers and intermediaries utilized in the administration of this title, and consumer representatives familiar with the health needs of residents of the State, appoint one or more program review teams (composed of physicians, other professional personnel in the health care field, and consumer representatives) in each State which shall, among other things— “(A) undertake to review such statistical data on program utilization as may be submitted by the Secretary, “(B) submit to the Secretary periodically, as maybe prescribed Report to Secretary. in regulations, a report on the results of such review, together with recommendations with respect thereto, “(C) undertake to review particular cases where there is a likelihood that the person or persons furnishing services and supplies to individuals may come, within the provisions of paragraph (1) (B) and (C) of this subsection or clause (F) of section 1866(b)(2), and “(D) submit to the Secretary periodically, as may be prescribed Report to Secretary. in regulations, a report of cases reviewed pursuant to subparagraph (C) along with an analysis of, and recommendations with respect to, such cases.” (b) Section 1866(b) (2) of such Act is amended by striking out 42 USC 1395cc. the period at the end thereof and inserting in lieu thereof the following: or (D) that such provider has made, or caused to be made, any false statement or representation of a material fact for use in an application for payment under this title or for use in determining the right to a payment under this title, or (E) that such provider has submitted, or caused to be submitted, requests for payment under this title of amounts for rendering services substantially in excess of the costs incurred by such provider for rendering such services, or (F) that such provider has furnished services or supplies which are determined by the Secretary, with the concurrence of the members of the appropriate program review team appointed pursuant to section Ante, p. 1408. 1862(d)(4) who are physicians or other professional personnel in the health care field, to be substantially in excess of the needs of individuals or to be harmful to individuals or to be of a grossly inferior quality,” (c) Section 1903(i) of such Act (as added by section 224(c) of this Act) is further amended by striking out “shall not be made” and all that follows and inserting in lieu thereof the following: “shall not be made— “(1) with respect to any amount paid for items or services furnished under the plan after December 31, 1972, to the extent that such amount exceeds the charge which would be determined to be reasonable for such items or services under the fourth and Ante, p. 1395; Post, p. 1447. fifth sentences of section 1842(b) (3); or “(2) with respect to any amount paid for services furnished under the plan after December 31, 1972, by a provider or Other person during any period of time, if payment may not be made 42 USC 1395. under title XVIII with respect to services furnished by such provider or person during such period of time solely by reason of a Ante, p. 1408. determination by the Secretary under section 1862(d) (1) or under Ante, p. 1409. clause (D), (E), or (F) of section 1866(b)(2).” (d) Section 506(f) of such Act (as added by section 224(d) of this Act) is further amended by striking out “no payment shall be made” and all that follows and inserting in lieu thereof the following: “no payment shall be made to any State thereunder— “(1) with respect to any amount paid for items or services furnished under the plan after December 31, 1972, to the extent that such amount exceeds the charge which would be determined to be reasonable for such items or services under the fourth and fifth sentences of section 1842(b) (3); or “(2) with respect to any amount paid for services furnished under the plan after December 31, 1972, by a provider or other person during any period of time, if payment may not be made under title XVIII with respect to services furnished by such provider or person during such period of time solely by reason of a determination by the Secretary under section 1862(d) (1) or under clause (D), (E), or (F) of section 1866(b)(2).” Sec. 230. elimination or requirement that states move toward comprehensive medicaid programs Section 1903(e) of the Social Security Act, and section 2(b) of Public Law 91–56 (approved August 9, 1969), are repealed. Sec. 231. repeal of section 1902 (d) of medicaid Section 1902(d) of the Social Security Act is repealed. Sec. 232. determination of reasonable cost of inpatient hospital services under medicaid and under maternal and child health program (a) Section 1902(a) (13) (D) of the Social Security Act is amended to read as follows: “(D) for payment of the reasonable cost of inpatient hospital services provided under the plan, as determined in accordance with methods and standards which shall be developed by the State and reviewed and approved by the Secretary and (after notice of approval by the Secretary) included in the plan, except that the reasonable cost of any such services as determined under such methods and standards shall not exceed the amount which would be determined under section 1861 (v) as the reasonable cost of such services for 42 USC 1395x. purposes of title XVIII;”. 42 USC 1395. (b) Section 505(a) (6) of such Act is amended to read as follows: 42 USC 705. “(6) provides for payment of the reasonable cost of inpatient hospital services provided under the plan, as determined in accordance with methods and standards which shall be developed by the State and included in the plan, except that the reasonable cost of any such services as determined under such methods and standards shall not exceed the amount which would be determined under section 1861 (v) as the reasonable cost of such services for purposes of title XVIII;”. (c) The amendments made by this section shall be effective July 1, Effective date. 1972 (or earlier if the State plan so provides). Sec. 233. amount of payments where customary charges for services furnished are less than reasonable cost (a) Section 1814(b) of the Social Security Act is amended 79 Stat. 294. 42 USC 1395f. to read as follows: “(b) “Amount Paid to Providers The amount paid to any provider of services with respect to services for which payment may be made under this part shall, subject to the provisions of section 1813, be— 42 USC 1395e. “(1) the lesser of (A) the reasonable cost of such services, as determined under section 1861 (v), or (B) the customary charges 42 USC 1395x. with respect to such services; or “(2) if such services are. furnished by a public provider of services free of charge or at nominal charges to the public, the amount determined on the basis of those items (specified in regulations prescribed by the Secretary) included in the determination of such reasonable cost which the Secretary finds will provide fair compensation to such provider for such services. “(b) Section 1833(a) (2) of such Act is amended to read as follows: 79 Stat. 302. “(2) in the case of services described in section 1832(a) (2)—80 42 USC 1395l. 42 USC 1395k. percent of— “(A) the lesser of (i) the reasonable cost of such services, as determined under section 1861(v), or (ii) the customary charges with respect to such services; or “(B) if such services are furnished by a public provider of services free of charge or at nominal charges to the public, the amount determined in accordance with section 1814(b)(2).” Supra. (c) Section 1903 (i) of such Act (as added by section 224(c) and amended by section 229(c) of this Act) is further amended by striking Ante, pp. 1395, 1410. out the period at the end of paragraph (2) and inserting in lieu thereof “: or”, and by adding after paragraph (2) the following new paragraph: “(3) with respect, to any amount expended for inpatient, hospital services furnished under the plan to the extent that such amount exceeds the hospital’s customary charges with respect to such services or (if such services are furnished under the plan by a public institution free of charge or at nominal charges to the public) exceeds an amount determined on the basis of those items (specified in regulations prescribed by the Secretary) included in the determination of such payment which the Secretary finds will provide fair compensation to such institution for such services.” (d) Section 506(f) of such Act (as added by section 224(d) and Ante, pp. 1395, 1410. amended by section 229(d) of this Act) is further amended by striking out the period at the end of paragraph (2) and inserting in lieu thereof “; or”, and by adding after paragraph (2) the following new paragraph: “(3) with respect to any amount expended for inpatient hospital services furnished under the plan to the extent that such amount exceeds the hospital’s customary charges with respect to such services or (if such services are furnished under the plan by a public institution free of charge or at nominal charges to the 0 exceeds an amount determined on the basis of those items (specified in regulations prescribed by the Secretary) included in the determination of such payment which the Secretary finds will provide fair compensation to such institution for such services.” (e) Clause (2) of the second sentence of section 509(a) of such Ante, p. 1389. Act (as amended by section 221(e) (3) of this Act) is further amended by inserting “(A)” before “the reasonable cost”, and by inserting after “under the project,” the following: “or (B) if less, the customary charges with respect to such services provided under the project, or (C) if such services are furnished under the project by a public institution free of charge or at nominal charges to the public, an amount determined on the basis of those items (specified in regulations prescribed by the Secretary) included in the determination of such reasonable cost which the Secretary finds will provide fair compensation to such institution for such services”. (f) The amendments made by subsections (a) and (b) shall apply to services furnished by hospitals, extended care facilities, and home health agencies in accounting periods beginning after December 31, 1972. The amendments made by subsections (c), (d), and (e) shall apply with respect to services furnished by hospitals in accounting periods beginning after December 31, 1972. Sec. 234. institutional planning under medicare (a) The first sentence of section 1861(e) of the Social Ante, p. 1383. Security Act is amended— (1) by striking out “and” at the end of paragraph (7); (2) by redesignating paragraph (8) as paragraph (9); and (3) by inserting after paragraph (7) the following new paragraph: “(8) has in effect an overall plan and budget that meets the Post, p. 1413. requirements of subsection (z); and”. (b) Section 1861(f) (2) of such Act is amended to read as follows: “(2) satisfies the requirements of paragraphs (3) through (9) of subsection (e);”. (c) Section 1861(g) (2) of such Act is amended to read as follows: “(2) satisfies the requirements of paragraphs (3) through (9) of subsection (e);”. (d) The first sentence of section 1861 (j) of such Act is amended— (1) by striking out “and” at the end of paragraph (9); (2) by redesignating paragraph (10) as paragraph (11); and (3) by inserting after paragraph (9) the following new paragraph: “(10) has in effect an overall plan and budget that meets the requirements of subsection (z); and”. Infra. (e) Section 1861 (o) of such Act is amended— 42 USC 1395x. (1) by striking out “and” at the end of paragraph (4); (2) by redesignating paragraph (5) as paragraph (6); and (3) by inserting after paragraph (4) the following new paragraph: “(5) has in effect an overall plan and budget that meets the requirements of subsection (z); and”. (f) Section 1861 of such Act is further amended by adding at the end 79 Stat. 313. 42 USC 1395x. thereof the following new subsection: “(z) “Institutional Planning An overall plan and budget of a hospital, extended care facility, or home health agency shall be considered sufficient if it— “(1) provides for an annual operating budget which includes all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items (except that nothing in this paragraph shall require that there be prepared, in connection with any budget, an item-by-item identification of the components of each type of anticipated expenditure or income); “(2) provides for a capital expenditures plan for at least a 3-year period (including the year to which the operating budget described in subparagraph (1) is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objectives of, each anticipated expenditure in excess of $100,000 related to the acquisition of land, the improvement of land, buildings, and equipment, and the replacement, modernization, and expansion of the buildings and equipment which would, under generally accepted accounting principles, be considered capital items; “(3) provides for review and updating at least annually; and “(4) is prepared, under the direction of the governing body of the institution or agency, by a committee consisting of representatives of the governing body, the administrative, staff, and the medical staff (if any) of the institution or agency.” (g) (1) Section 1814(a) (2) (C) and section 1814(a) (2) (D) of such Act are each amended by striking out “and (8)” and inserting in lieu 42 USC 1395f. thereof “and (9)”. (2) Section 1863 of such Act is amended by striking out “subsections 42 USC 1395z. (c)(8), (f)(4), (g)(4), (j)(10), and (o)(5)” and inserting in lieu thereof “subsections (e)(9), (f)(4), (g)(4), (j)(11), and (o)(6)”. (h) Section 1865 of such Act is amended— 42 USC 1395bb. (1) by striking out “(except paragraph (6) thereof)” in the first sentence and inserting in lieu thereof “(except paragraphs (6) and (8) thereof)”, and (2) by striking out the second sentence and inserting in lieu thereof the following: “If such Commission, as a condition for accreditation of a hospital, (1) requires a utilization review plan as defined in section 1861 (k) or imposes another requirement 42 USC 1395x. which serves substantially the same purpose, or (2) requires institutional plans as defined in section 1861 (z) or imposes another Supra. requirement which serves substantially the same purpose, the Secretary is authorized to find that all institutions so accredited by the Commission comply also with section 1861(e) (6) or 1861(e) 42 USC 1395x. (8), as the case may be.” (i) The amendments made by this section shall apply with respect to any provider of services for fiscal years (of such provider) beginning after the fifth month following the month in which this Act is enacted. Sec. 235. payments to states under medicaid for installation and operation of claims processing and information retrieval systems (a) Section 1903(a) of the Social Security Act is amended by redesignating paragraph (3) as paragraph (4), and by inserting after paragraph (2) the following new paragraph: “(3) an amount equal to— “(A) (i) 90 per centum of so much of the sums expended during such quarter as are attributable to the design, development, or installation of such mechanized claims processing and information retrieval systems as the Secretary determines are likely to provide more efficient, economical, and effective administration of the plan and to be compatible with the claims processing and information retrieval systems utilized 42 USC 1395. in the administration of title XVIII, including the State’s share of the cost of installing such a system to be used jointly in the administration of such State’s plan and the plan of any other State approved under this title, and “(ii) 90 per centum of so much of the sums expended during any such quarter in the fiscal year ending June 30, 1972, or the fiscal year ending June 30, 1973, as are attributable to the design, development, or installation of cost determination systems for State-owned general hospitals (except that the total amount paid to all States under this clause for either such fiscal year shall not exceed $150,000), and “(B) 7a per centum of so much of the sums expended during such quarter as are attributable to the operation of systems (whether such systems are operated directly by the State or by another person under a contract with the State) of the type described in subparagraph (A)(i) (whether or not designed, developed, or installed with assistance under such subparagraph) which are approved by the Secretary and which include provision for prompt written notice to each individual who is furnished services covered by the plan of the specific services so covered, the name of the person or persons furnishing the services, the date or dates on which the services were furnished, and the amount of the payment or payments made under the plan on account of the services; plus”. (b) The amendments made by subsection (a) shall apply with respect to expenditures under State plans approved under title XIX 42 USC 1396. of the Social Security Act made after June 30, 1971. Sec. 236. prohibition against reassignment of claims to benefits (a) Section 1842(b) of the Social Security Act is amended by adding at the end thereof the following new paragraph: “(5) No payment under this part for a service provided to any 42 USC 1395gg. individual shall (except as provided in section 1870) be made to anyone other than such individual or (pursuant to an assignment described in subparagraph (B) (ii) of paragraph (3)) the physician Ante, p. 1384; Post, p. 1455. or other person who provided the service, except that payment may be made (A) to the employer of such physician or other person if such physician or other person is required as a condition of his employment to turn over his fee for such service to his employer, or (B) (where the service was provided in a hospital, clinic, or other facility) to the facility in which the service was provided if there is a contractual arrangement between such physician or other person and such facility under which such facility submits the bill for such service.” (b) Section 1902(a) of such Act is amended— 42 USC 1396a. (1) by striking out “and” at the end of paragraph (30); (2) by striking out the period at the end of paragraph (31) and inserting in lieu thereof “; and”; and (3) by inserting after paragraph (31) the following new paragraph: “(32) provide that no payment under the plan for any care or service provided to an individual by a physician, dentist, or other individual practitioner shall be made to anyone other than such individual or such physician, dentist, or practitioner, except that payment may be made (A) to the employer of such physician, dentist, or practitioner if such physician, dentist, or practitioner is required as a condition of his employment to turn over his fee for such care or service to his employer, or (B) (where the care or service was provided in a hospital, clinic, or other facility) to the facility in which the care or service was provided if there is a contractual arrangement between such physician, dentist, or practitioner and such facility under which such facility submits the bill for such care or service.” (c) The amendment made by subsection (a) shall apply with respect Effective dates. to bills submitted and requests for payments made after the date of the enactment of this Act. The amendments made by subsection (b) shall be effective January 1, 1973 (or earlier if the State plan so provides). Sec. 237. utilization review requirements for hospitals and skilled nursing homes under medicaid and under maternal and child health program (a) (1) Section 1903(i) of the Social Security Act (as added by section 224(c) and amended by sections 229(c) and 233(c) of this Act) is further amended by striking out the period at the end Ante, pp. 1395, 1410, 1411. of paragraph (3) and inserting in lieu thereof “; or”, and by adding after paragraph (3) the following new paragraph: “(4) with respect to any amount expended for care or services furnished under the plan by a hospital or skilled nursing home unless such hospital or skilled nursing home has in effect a utilization review plan which meets the requirements imposed by section 1861(k) for purposes of title XVIII; and if such hospital or 42 USC 1395x, 1395. skilled nursing home has in effect such a utilization review plan for purposes of title XVIII, such plan shall serve as the plan required by this subsection (with the same standards and procedures and the same review committee or group) as a condition of payment under this title; the Secretary is authorized to waive the requirements of this paragraph if the State agency demonstrates to his satisfaction that it has in operation utilization review procedures which are superior in their effectiveness to the procedures required under section 1861 (k).” (2) Section 1902(a) (30) of such Act is amended by inserting “(including but not limited to utilization review plans as provided for in section 1903(i) (4))” after “plan” where it, first, appears. (b) Section 506(f) of such Act (as added by section 224(d) and Ante, pp, 1395, 1410, 1412. amended by sections 229(d) and 233(d) of this Act) is further amended by striking out the period at the end of paragraph (3) and inserting in lieu thereof “; or”, and by adding after paragraph (3) the following new paragraph: “(4) with respect to any amount expended for services furnished under the plan by a hospital unless such hospital has in effect a utilization review plan which meets the requirement 42 USC 1395x, 1395. imposed by section 1861 (k) for purposes of title XVIII; and if such hospital has in effect such a utilization review plan for purposes of title XVIII, such plan shall serve as the plan required by this subsection (with the same standards and procedures and the same review committee or group) as a condition of payment under this title; the Secretary is authorized to waive the requirements of this paragraph in any State if the State agency demonstrates to his satisfaction that it has in operation utilization review procedures which are superior in their effectiveness to the procedures required under section 1861 (k).” (c) Section 1861 (k) of such Act is amended by adding at the end thereof the following new sentence: “If the Secretary determines that 42 USC 1396. the utilization review procedures established pursuant to title XIX are superior in their effectiveness to the procedures required under this section, he may, to the extent that he deems it appropriate, require for purposes of this title that the procedures established pursuant to title XIX be utilized instead of the procedures required by this section.” (d) (1) The amendments made by subsections (a) (1) and (b) shall apply with respect to services furnished in calendar quarters beginning after June 30, 1973. (2) The amendment made by subsection (a)(2) shall be effective July 1, 1973. Sec. 238. notification of unnecessary admission to a hospital or extended care facility under medicare (a) Section 1814(a) (7) of the Social Security Act is amended by striking out “as described in section 1861 (k) (4)” and inserting in lieu thereof “as described in section 1861 (k) (4), including any finding made in the course of a sample or other review of admissions to the institution”. (b) The amendment made by subsection (a) shall apply with respect to services furnished after the second month following the month in which this Act is enacted. Sec. 239. use of state health agency to perform certain functions under medicaid and under maternal and child health program (a) Section 1902(a)(9) of the Social Security Act is amended to read as follows: “(9) provide— “(A) that the State health agency, or other appropriate State medical agency (whichever is utilized by the Secretary for the purpose specified in the first, sentence of section 1864 42 USC 1395aa. (a)), shall be responsible for establishing and maintaining health standards for private or public institutions in which recipients of medical assistance under the plan may receive care or services, and “(B) for the establishment or designation of a State authority or authorities which shall be responsible for establishing and maintaining standards, other than those relating to health, for such institutions;”. (b) Section 1900(a) of such Act (as amended by section 236(b) of this Act) is further amended— Ante, p. 1415. (1) 1) by striking out “and” at the end of paragraph (31); (2) by striking out the period at the end of paragraph (32) and inserting in lieu thereof “; and”; and (3) by inserting after paragraph (32) the following new paragraph: “(33) provide— “(A) that the State health agency, or other appropriate State medical agency, shall be responsible for establishing a plan, consistent with regulations prescribed by the Secretary, or the review by appropriate, professional health personnel of the appropriateness and quality of care and services furnished to recipients of medical assistance under the plan in order to provide guidance with respect thereto in the administration of the plan to the State agency established or designated pursuant to paragraph (5) and, where applicable, to the State agency described in the last sentence of this subsection; and “(B) that the State or local agency utilized by the Secretary for the purpose specified in the first sentence of section 1864(a), or, if such agency is not the State agency which is 42 USC 1395aa. responsible for licensing health institutions, the State agency responsible for such licensing, will perform for the State agency administering or supervising the administration of the plan approved under this title the function of determining whether institutions and agencies meet the requirements for participation in the program under such plan,” (c) Section 505 (a) of such Act is amended— 81 Stat. 923. 42 USC 705. (1) by striking out “and” at the end of paragraph (13); (2) by striking out the period at the end of paragraph (14) and inserting in lieu thereof “; and”: and (3) by adding after paragraph (14) the following new paragraph: “(15) provides— “(A) that the State health agency, or other appropriate State medical agency, shall be responsible for establishing a plan, consistent with regulations prescribed by the Secretary, for the review by appropriate professional health personnel of the appropriateness and quality of care and services furnished to recipients of services under the plan and, where applicable, for providing guidance, with respect thereto to the other State agency referred to in paragraph (2); and “(B) that the State or local agency utilized by the Secretary for the purpose specified in the first sentence of section 1864(a), or, if such agency is not the State agency which is 42 USC 1395aa. responsible for licensing health institutions, the State agency responsible for such licensing, will perform the function of determining whether institutions and agencies meet the requirements for participation in the program under the plan under this title.” (d) The amendments made by this section shall be effective January 1, 1973 (or earlier if the State plan so provides). Sec. 240. relationship between medicaid and comprehensive health care programs Section 1902(a) (23) of the Social Security Act is amended by adding after the semicolon at the end thereof the following: “and a State plan shall not be deemed to be out of compliance with the requirements of this paragraph or paragraph (1) or (10) solely by reason of the fact that the State (or any political subdivision thereof) has entered into a contract with an organization which has agreed to provide care and services in addition to those offered under the State plan to individuals eligible for medical assistance who reside in the geographic area served by such organization and who elect to obtain such care and services from such organization;”. Sec. 241. program for determining qualifications for certain health care personnel Title XI of the Social Security Act is amended by adding Ante, p. 1386. after section 1122 (as added by section 221(a) of this Act) the following new section: “Sec. 1123. “program for determining qualifications for certain health care personnel (a) The Secretary, in carrying out his functions relating 42 USC 1395. to the qualifications for health care personnel under title XVIII, shall develop (in consultation with appropriate professional health organizations and State health and licensure agencies) and conduct (in conjunction with State health and licensure agencies) until December 31, 1977, a program designed to determine the proficiency of individuals (who do not otherwise meet the formal educational, professional membership, or other specific criteria established for determining the qualifications of practical nurses, therapists, laboratory technicians, and technologists, and cytotechnologists, X-ray technicians, psychiatric technicians, or other health care technicians and technologists) to perform the duties and functions of practical nurses, therapists, laboratory technicians, technologists, and cytotechnologists, X-ray technicians, psychiatric technicians, or other health care technicians and technologists. Such program shall include (but not be limited to) the employment of procedures for the formal testing of the proficiency of individuals. In the conduct of such program, no individual who otherwise meets the proficiency requirements for any health care specialty shall be denied a satisfactory proficiency rating solely because of his failure to meet formal educational or professional membership requirements. “(b) If any individual has been determined, under the program established pursuant to subsection (a), to be qualified to perform the duties and functions of any health care specialty, no person or provider utilizing the services of such individual to perform such duties and functions shall be denied payment, under title XVIII or under 42 USC 1396. any State plan approved under title XIX, for any health care services provided by such person on the grounds that such individual is not qualified to perform such duties and functions.” Sec. 242. penalties for fraudulent acts and false reporting under medicare and medicaid (a) Section 1872 of the Social Security Act is amended 42 USC 1395ii. by striking out “208,”. (b) Title XVIII of the Social Security Act is amended by adding at the end thereof Rafter the new section added by section 226(a) of this Act) the following new section: Ante, p. 1396. “Sec. 1877. “penalties (a) Whoever— “(1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under this title, “(2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining rights to any such benefit or payment, “(3) having knowledge of the occurrence of any event affecting (A) his initial or continued right to any such benefit or payment, or (B) the initial or continued right to any such benefit or payment of any other individual in whose behalf he has applied for or is receiving such benefit or payment, conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized, or “(4) having made application to receive any such benefit or payment for the use and benefit of another and having received it, knowingly and willfully converts such benefit or payment or any part thereof to a use other than for the use and benefit of such other person, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. “(b) Whoever furnishes items or services to an individual for which payment is or may be made under this title and who solicits, offers, or receives any— “(1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or “(2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. “(c) Whoever knowingly and willfully makes or causes to be made, or induces or seeks to induce the making of, any false statement or representation of a material fact with respect to the conditions or operation of any institution or facility in order that such institution or facility may qualify (either upon initial certification or upon recertification) as a hospital, skilled nursing facility, or home health agency (as those terms are defined in section 1861), shall be guilty of a misdemeanor 42 USC 1395x. and upon conviction thereof shall be fined not more than $2,000 or imprisoned for not more than 6 months, or both.” (c) Title XIX of such Act is amended by adding after section 1908 42 USC 1396. the following new section: “Sec. 1909. “penalties (a) Whoever— “(1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under a State plan approved under this title, “(2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining rights to such benefit or payment, “(3) having knowledge of the occurrence of any event affecting (A) his initial or continued right to any such benefit or payment, or (B) the initial or continued right to any such benefit or payment of any other individual in whose, behalf he has applied for or is receiving such benefit or payment, conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized, or “(4) having made application to receive any such benefit or payment for the use and benefit of another and having received it, knowingly and willfully converts such benefit or payment or any part thereof to a use other than for the use and benefit of such other person, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. “(b) Whoever furnishes items or services to an individual for which payment is or may be made in whole or in part out of Federal funds under a State plan approved under this title and who solicits, offers, or receives any— “(1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or “(2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. “(c) Whoever knowingly and willfully makes or causes to be made,, or induces or seeks to induce the making of, any false statement or representation of a material fact with respect to the conditions or operation of any institution or facility in order that such institution or facility may qualify (either upon initial certification or upon recertification) as a hospital, skilled nursing home, intermediate care facility, or home health agency (as those terms are employed in this title) shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $2,000 or imprisoned for not more than 6 months, or both.” (d) The provisions of amendments made by this section shall not be applicable to any acts, statements, or representations made or committed prior to the enactment of this Act. Sec. 243. provider reimbursement review board (a) Title XVIII of the Social Security Act is amended by adding at the end thereof (after the new sections added by section Ante, p. 1419. 226(a) and section 242 (b) of this Act) the following new section: “Sec. 1878. “provider reimbursement review board (a) Any provider of services which has filed a required Establishment. cost report within the time specified in regulations may obtain a hearing with respect, to such cost report by a Provider Reimbursement Review Board (hereinafter referred to as the ‘Board’) which shall be established by the Secretary in accordance with subsection (h), if— Conditions. “(1) such provider— “(A) is dissatisfied with a final determination of the organization serving as its fiscal intermediary pursuant to section 1816 as to the amount of total program reimbursement 42 USC 1395h. due the provider for the items and services furnished to individuals for which payment may be made under this title for the period covered by such report, “(B) has not received such final determination from such intermediary on a timely basis after filing such report., where such report complied with the rules and regulations of the Secretary relating to such report, or “(C) has not received such final determination on a timely basis after filing a supplementary cost report, where such cost report did not so comply and such supplementary cost report did so comply, “(2) the amount in controversy is $10,000 or more, and “(3) such provider files a request for a hearing within 180 days after notice of the intermediary’s final determination under paragraph (1) (A) or with respect to appeals pursuant to paragraph (1) (B) or (C), within 180 days after notice of such determination would have been received if such determination had been made on a timely basis. “(b) The provisions of subsection (a) shall apply to any group of Group appeal. providers of services if each provider of services in such group would, upon the filing of an appeal (but without regard to the $10,000 limitation), be entitled to such a hearing, but only if the matters in controversy involve a common question of fact or interpretation of law or regulations and the amount in controversy is, in the aggregate, $50,000 or more. “(c) At such hearing, the provider of services shall have the right to be represented by counsel, to introduce evidence, and to examine and cross-examine witnesses. Evidence may be received at any such hearing even though inadmissable under rules of evidence applicable to court procedure. “(d) A decision by the Board shall be based upon the record made at such hearing, which shall include the evidence considered by the intermediary and such other evidence as may be obtained or received by the Board, and shall be supported by substantial evidence when the record is viewed as a whole. The Board shall have the power to affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a cost report and to make any other revisions on matters covered by such cost report, (including revisions adverse to the provider of services) even though such matters were not considered by the intermediary in making such final determination. “(e) The Board shall have full power and authority to make rules Rules and regulations. and establish procedures, not inconsistent with the provisions of this title or regulations of the Secretary, which are necessary or appropriate to carry out the provisions of this section. In the course of any hearing the Board may administer oaths and affirmations. The provisions of subsections (d), (e), and (f) of section 205 with respect to subpenas 42 USC 405. shall apply to the Board to the same extent as they apply to the Secretary 42 USC 401. Board decision, reviewability. with respect to title II. “(f) A decision of the Board shall be final unless the Secretary, on his own motion, and within 60 days after the provider of services is notified of the Board’s decision, reverses or modifies (adversely to such provider) the Board’s decision. In any case where such a reversal or modification occurs the provider of services may obtain a review of such decision by a civil action commenced within 60 days of the date he is notified of the Secretary’s reversal or modification. Such action shall be, brought in the district court of the United States for the judicial district in which the provider is located or in the District Court for the District of Columbia and shall be tried pursuant to the applicable 5 USC 701. provisions under chapter 7 of title 5, United States Code, notwithstanding 42 USC 405. any other provisions in section 205. “(g) The finding of a fiscal intermediary that no payment may be made under this title for any expenses incurred for items or services furnished to an individual because such items or services are listed in 42 USC 1395y. section 1862 shall not be reviewed by the Board, or by any court pursuant to an action brought under subsection (f). “(h) The Board shall be composed of five members appointed by the Secretary without regard to the provisions of title 5, United States 5 USC 101 et seq. Code, governing appointments in the competitive services. Two of such members shall be representative of providers of services. All of the members of the Board shall be persons knowledgeable in the field of cost reimbursement, and at least one of them shall be a certified Compensation. public accountant. Members of the Board shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding the rate specified (at the time the service involved is rendered by such members) for grade GS–18 in section 5332 of title 5, United States 5 USC 5332 note. Code. The term of office shall be three years, except that the Secretary shall appoint the initial members of the Board for shorter terms to the extent necessary to permit staggered terms of office. “(i) The Board is authorized to engage such technical assistance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Board such secretarial, clerical, and other assistance as the Board may require to carry out its functions.” (b) The first sentence of section 1816(a) of such Act is amended by striking out “subject to” in the parenthetical phrase and inserting in lieu thereof “subject to the provisions of section 1878 and to”. (c) The amendments made by this section shall apply with respect to cost reports of providers of services, as defined in title XVIII of 42 USC 1395. the Social Security Act, for accounting periods ending on or after June 30, 1973. Sec. 244. validation of surveys made by joint commission on the accreditation of hospitals (a) Section 1864 of the Social Security Act is amended by inserting at the end thereof the following new subsection: “(c) The Secretary is authorized to enter into an agreement with any State under which the appropriate State or local agency which performs the certification function described in subsection (a) will survey, on a selective sample basis (or where the Secretary finds that a survey is appropriate because of substantial allegations of the existence of a significant deficiency or deficiencies which would, if found to be present, adversely affect health and safety of patients), hospitals 42 USC 1395cc. which have an agreement with the Secretary under section 1866 and which are accredited by the Joint Commission on the Accreditation of Hospitals. The Secretary shall pay for such services in the manner prescribed in subsection (b).” (b) (1) Section 1865 of such Act, as amended by section 234 of this Act, is further amended by striking out “Sec. 1865” and the first two Ante, p. 1413. sentences of such section and inserting in lieu thereof the following: “Sec. 1865. (a) Except as provided in subsection (b) and the second sentence of section 1863, if— 42 USC 1395z. “(1) an institution is accredited as a hospital by the Joint Commission on Accreditation of Hospitals, and “(2) such institution (if it is included within a survey described in section 1864 (c)) authorizes the Commission to release to the Ante, p. 1422. Secretary (on a confidential basis) upon his request (or such State agency as the Secretary may designate) a copy of the most current accreditation survey of such institution made by such Commission, then, such institution shall be deemed to meet the requirements of the numbered paragraphs of section 1861 (e); except— 42 USC 1395x. “(3) paragraph (6) thereof, and “(4) any standard, promulgated by the Secretary pursuant to paragraph (9) thereof, which is higher than the requirements prescribed for accreditation by such Commission. If such Commission, as a condition for accreditation of a hospital, requires a utilization review plan (or imposes another requirement which serves substantially the same purpose) or imposes a standard which the Secretary determines is at least equivalent to the standard promulgated by the Secretary as described in paragraph (4) of this subsection, the Secretary is authorized to find that all institutions so accredited by such Commission comply also with section 1861(e) (6) or the standard described in such paragraph (4), as the case may be.” (2) Such section 1865 (as so amended) is further amended by adding after subsection (a) thereof the following: “(b) Notwithstanding any other provision of this title, if the Secretary finds following a survey made pursuant to section 1864(c) that Ante, p. 1422. an institution has significant, deficiencies (as defined in regulations pertaining to health and safety), such institution shall, after the date of notice of such finding to the hospital and for such period as may be prescribed In regulations, be deemed not to meet the requirements of the numbered paragraphs of section 1861(e).” (c) Section 1861(e) of such Act, as amended by sections 211 and 234 of this Act, is further amended by striking out, in subsection (9), Ante, pp. 1383, 1412. everything after the word “institution” and inserting in lieu thereof a period. (d) Section 1875(b) of such Act, as amended by sections 222 and 226 of this Act, is further amended by inserting, after “including” and Ante, pp. 1393, 1404. before “the operation”, the following: “a validation of the accreditation process of the Joint Commission on the Accreditation of Hospitals,”. Sec. 245. payment for durable medical equipment under medicare (a) The Secretary is authorized to conduct reimbursement experiments designed to eliminate unreasonable expenses resulting from prolonged rentals of durable medical equipment described in section 1861(s) (6) of the Social Security Act. 42 USC 1395x. (b) Such experiment may be conducted in one or more geographic areas, as the Secretary deems appropriate, and may, pursuant to agreements with suppliers, provide for reimbursement for such equipment on a lump-sum basis whenever it is determined (in accordance with guidelines established by the Secretary) that a lump-sum payment would be more economical than the anticipated period of rental payments. Such experiments may also provide for incentives to beneficiaries (including waiver of the 20 percent coinsurance amount 79 Stat. 302. 42 USC 1395l. applicable under section 1833 of the Social Security Act) to purchase used equipment whenever the purchase price is at least 25 percent less than the reasonable charge for new equipment. (c) The Secretary is authorized, at such time as he deems appropriate, to implement on a nationwide basis any such reimbursement procedures winch he finds to be workable, desirable and economical and which are consistent with the purposes of this section. (d) Section 1833(f) of the Social Security Act is amended— (1) by striking out “with respect to purchases of inexpensive equipment (as determined by the Secretary)” and inserting in lieu thereof “(A)”, and (2) by inserting before the period at the end thereof the following: “, and (B) with respect to purchases of used equipment the Secretary is authorized to waive the 20 percent coinsurance amount applicable under subsection (a) whenever the purchase price of such equipment is at least 25 percent less than the reasonable charge for comparable new equipment.” (3) by inserting “(1)” after “(f)” and by adding after paragraph (1) the following new paragraph: “(2) In the case of rental of durable medical equipment, the Secretary may, pursuant to agreements made with suppliers of such equipment, establish any reimbursement procedures (including payment on a lump-sum basis in lieu of prolonged rental payments) which he finds to be equitable, economical, and feasible.” Sec. 246. uniform standards for skilled nursing facilities under medicare and medicaid (a) Section 1902(a) (28) of the Social Security Act is amended to read as follows: “(28) provide that any skilled nursing facility receiving payments under such plan must satisfy all of the requirements contained in section 1861(f), except, that the exclusion contained therein with respect to institutions which are primarily for the care and treatment of mental diseases and tuberculosis shall not apply for purposes of this title;” (b) Section 1861(j) of such Act, as amended by section 234(d) of Ante, p. 1412. this Act, is further amended— (1) by striking out “and” at the end of paragraph (10); (2) by redesignating paragraph (11) as paragraph (15); (3) by inserting after paragraph (10) the following new paragraphs: “(11) supplies full and complete information to the Secretary or his delegate as to the identity (A) of each person who has any direct or indirect ownership interest of 10 per centum or more in such skilled nursing facility or who is the owner (in whole or in part) of any mortgage, deed of trust, note, or other obligation secured (in whole or in part) by such skilled nursing facility or any of the property or assets of such skilled nursing facility, (B) in case a skilled nursing facility is organized as a corporation, of each officer and director of the corporation, and (C) in case a skilled nursing facility is organized as a partnership, of each partner; and promptly reports any changes which would affect the current accuracy of the information so required to be supplied; “(12) cooperates in an effective program which provides for a regular program of independent medical evaluation and audit of the patients in the facility to the extent required by the programs in which the facility participates (including medical evaluation of each patient’s need for skilled nursing facility care); “(13) meets such provisions of the Life Safety Code of the National Fire Protection Association (21st edition, 1967) as are applicable to nursing homes; except that the Secretary may waive, for such periods as he deems appropriate, specific provisions of such Code which if rigidly applied would result in unreasonable hardship upon a nursing home, but only if such waiver will not adversely affect the health and safety or the patients; except that the provisions of such Code shall not apply in any State if the Secretary finds that in such State there is in effect a fire and safety code, imposed by State law, which adequately protects patients in nursing facilities; and” and (4) by adding at the end of paragraph (15) (as redesignated by paragraph (2) of this subsection) the following new sentence: “Notwithstanding any other provision of law, all information concerning skilled nursing facilities required by this subsection to be filed with the Secretary shall be made available to Federal or State employees for purposes consistent with the effective administration of programs established under titles XVIII and XIX of this Act.” 42 USC 1395, 1396. Effective date. (c) The amendments made by this section shall be effective July 1, 1973. Sec. 247. level of care requirements for skilled nursing home services (a) Section 1814(a)(2)(C) of the Social Security Act 42 USC 1395f. is amended by striking out everything which appears before “(or services” and inserting in lieu thereof the following: “(C) in the case of post hospital extended care services, such services are or were required to be given because the individual needs or needed on a daily basis skilled nursing care (provided directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation services, which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis, for any of the conditions with respect to which he was receiving inpatient hospital services”. (b) Section 1905 of the Social Security Act. as amended by section 212 of this Act, is further amended by adding at the end thereof the Ante, p. 1384. following new subsection: “(f) For purposes of this title, the term ‘skilled nursing facility “Skilled nursing facility services.” services’ means services which are or were required to be given an individual who needs or needed on a daily basis skilled nursing care (provided directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation services which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis.” (c) The amendments made by this section shall be effective with Effective date. respect to services furnished after December 31, 1972. Sec. 248. modification of medicare’s 14-day transfer requirement for extended care benefits Section 1861 (i) of the Social Security Act is amended 42 USC 1395x. by striking out “within 14 days after discharge from such hospital;” and inserting in lieu thereof the following: “(A) within 14 days after discharge from such hospital, or (B) within 28 days after such discharge, in the case of an individual who was unable to be admitted to a skilled nursing facility within such 14 days because of a shortage of appropriate bed space in the geographic area in which he resides, or (C) within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 14 days after discharge from a hospital;” Sec. 249. reimbursement rates for skilled nursing and intermediate cake facilities (a) Section 1902(a) (13) of the Social Security Act, as Ante, p. 1410. amended by section 221 (c) (5) of this Act, is further amended— (1) by inserting “and” at the end of subparagraph (D), and (2) by inserting after subparagraph (I)) the following new paragraph: “(E) effective July 1, 1976, for payment of the skilled nursing facility and intermediate care facility services provided under the plan on a reasonable cost related basis, as determined in accordance with methods and standards which shall be developed by the State on the basis of cost-finding methods approved and verified by the Secretary;”. (b) Section 1861 (v)(1) of such Act, as amended by sections 223 Ante, p. 1405. and 227 of this Act, is further amended by inserting after subparagraph (D) the following new subparagraph: “(E) Such regulations may, in the case of skilled nursing facilities in any State, provide for the uses of rates, developed by the State in which such facilities are located, for the payment of the cost of skilled nursing facility services furnished under the State’s plan approved 42 USC 1396. under title XIX (and such rates may be increased by the Secretary on a class or size of institution or on a geographical basis by a percentage factor not in excess of 10 percent to take into account determinable items or services or other requirements under this title not otherwise included in the computation of such State rates), if the Secretary finds that such rates are reasonably related to (but not necessarily limited to) analyses undertaken by such State of costs of care in comparable facilities in such State; except that the foregoing provisions of this subparagraph shall not apply to any skilled nursing facility in such State if— “(i) such facility is a distinct part of or directly operated by a hospital, or “(ii) such facility operates in a close, formal satellite relationship (as defined in regulations of the Secretary) with a participating hospital or hospitals. Notwithstanding the previous provisions of this paragraph in the case of a facility specified in clause (ii) of this subparagraph, the reasonable cost of any services furnished by such facility as determined by the Secretary under this subsection shall not exceed 150 percent of the costs determined by the application of this subparagraph (without regard to such clause (ii)).”. Sec. 249A. medicaid certification and approval of skilled nursing facilities (a) Title XIX of the Social Security Act is amended by adding at the end thereof (after the new section 1909 added by Ante, p. 1420. this Act) the following new section: “Sec. 1910. “certification and approval of skilled nursing facilities (a) Whenever the Secretary certifies an institution in a State to be qualified as a skilled nursing facility under title XVIII, 41 USC 1395. such institution shall be deemed to meet the standards for certification as a skilled nursing facility for purposes of section 1902(a) (28). Ante, p. 1424. “(b) The Secretary shall notify the State agency administering the Notification. medical assistance plan of his approval or disapproval of any institution which has applied for certification by him as a qualified skilled nursing facility.” (b) Section 1866(a) (1) of the Social Security Act is amended by 42 USC 1395cc. adding at the end thereof the following sentence: “An agreement under tills paragraph with an extended care facility shall be for a term of not exceeding 12 months, except that the Secretary may extend such term for a period not exceeding 2 months, where the health and safety of patients will not be jeopardized thereby, if he finds that such extension is necessary to prevent irreparable harm to such facility or hardship to the individuals being furnished items or services by such facility or if he finds it impracticable within such 12-month period to determine whether such facility is complying with the provisions of this title and regulations thereunder.” (c) Section 1866(b) of such Act is amended by— (1) striking out, in the material which precedes clause (1), “terminated-” and inserting in lieu thereof “terminated (and in the case of an extended care facility, prior to the end of the term specified in subsection (a)(1))-”; and (2) by striking out all of clause (3) appearing after the phrase “Any termination shall be applicable—” and inserting in lieu thereof the following: “(3) in the case of inpatient hospital services (including tuberculosis hospital services and inpatient psychiatric hospital services) or post-hospital extended care services, with respect to services furnished after the effective date of such termination, except that payment may be made for up to thirty days with respect to inpatient institutional services furnished to any eligible individual who was admitted to such institution prior to the effective date of such termination,”. (d) Section 1866(c) of such Act is amended by inserting “(1)” after “(c)” and by adding at the end thereof the following new paragraph: “(2) In the case of a skilled nursing facility participating in the programs established by this title and title XIX, the Secretary may 42 USC 1395, 1396. enter into an agreement under this section only if such facility has been approved pursuant to section 1910, and the term of any such agreement shall be in accordance with the period of approval of eligibility specified by the Secretary pursuant to such section.” (e) The provisions of this section shall be effective with respect to Effective date. agreements filed with the Secretary under section 1866 of the Social Security Act by skilled nursing facilities (as defined in section 1861 (j) of such Act) before, on, or after the date of enactment of this Act, 42 USC 1395x. but accepted by him on or after such date. (f) Notwithstanding any other provision of law, any agreement, Termination date. filed by a skilled nursing facility (as defined in section 1861 (j) of the Social Security Act) with the Secretary under section 1866 of such Act and accepted by him prior to the date of enactment of this Act, which was in effect on such date shall be deemed to be for a specified term ending on December 31, 1973. Sec. 249B. payments to states under medicaid for compensation of inspectors responsible for maintaining compliance with federal standards Section 1903(a) of the Social Security Act, as amended Ante, pp. 1380, 1414. Effective period. by sections 207(a)(2) and 235(a) of this Act, is further amended, effective for the period beginning October 1, 1972, and ending June 30, 1974, by redesignating paragraph (4) as paragraph (5), and by inserting after paragraph (3) the following new paragraph: “(4) an amount equal to 100 per centum of the sums expended during such quarter (as found necessary by the Secretary for the proper and efficient administration of the State plan) which are attributable to compensation or training of personnel (of the State agency or any other public agency) responsible for inspecting public or private institutions (or portions thereof) providing long-term care to recipients of medical assistance to determine whether such institutions comply with health or safety standards applicable to such institutions under this Act; plus”. Sec. 249C. disclosure of information concerning the performance of carriers, intermediaries, state agencies, and providers of services under medicare and medicaid (a) Section 1106 of the Social Security Act is amended by adding at the end thereof the following new subsections: “(d) Notwithstanding any other provision of this section the Secretary shall make available to each State agency operating a program 42 USC 1396. under title XIX and shall, subject to the limitations contained in subsection (e), make available for public inspection in readily accessible form and fashion, the following official reports (not including, however, references to any internal tolerance rules and practices that may be contained therein, internal working papers or other informal memoranda) dealing with the operation of the health programs established 42 USC 1395, 1396. by titles XVIII and XIX— “(1) individual contractor performance reviews and other formal evaluations of the performance of carriers, intermediaries, and State agencies, including the reports of follow-up reviews; “(2) comparative evaluations of the performance of such contractors, including comparisons of either overall performance or of any particular aspect of contractor operation; and “(3) program validation survey reports and other formal evaluations of the performance of providers of services, including the reports of follow-up reviews, except that such reports shall not identify individual patients, individual health care practitioners, or other individuals. “(e) No report described in subsection (d) shall be made public by the Secretary or the State title XIX agency until the contractor or provider of services whose performance is being evaluated has had a reasonable opportunity (not exceeding 60 days) to review such report and to offer comments pertinent parts of which may be incorporated in the public report; nor shall the Secretary be required to include in any such report information with respect to any deficiency (or improper practice or procedures) which is known by the Secretary to have been fully corrected, within 60 days of the date such deficiency was first brought to the attention of such contractor or provider of services, as the case may be.” (b) The provisions of subsection (a) shall apply with respect to reports which are completed by the Secretary after the third calendar month following the enactment of this Act. Sec. 249D. limitation on institutional care Section 121(b) of the Social Security Amendments of 1965 is amended by adding at the end thereof the following new 79 Stat. 352. 42 USC 1396b note. sentence: “After the date of enactment of the Social Security Amendments of 1972, Federal matching shall not be available for any portion of any payment by any State under title I, X, XIV, or XVI, or part A of title IV, of the Social Security Act, for or on account 42 USC 301, 1201, 1351, 1381, 601. of any medical or any other type of remedial care provided by an institution to any individual as an inpatient thereof, in the case of any State which has a plan approved under title XIX of such Act, 42 USC 1396. if such care is (or could be) provided under a State plan approved under title XIX of such Act by an institution certified under such title XIX.”. Sec. 249E. determining eligibility for assistance under title xix for certain individuals For purposes of section 1902(a) (10) of the Social Security Act any individual who, for the month of August 1972, was eligible for or receiving aid or assistance under a State plan approved under title I, X, XIV, or XVI, or part A of title IV of such Act and who for such month was entitled to monthly insurance benefits under title II of such Act shall be deemed to be eligible for such aid or assistance for any month thereafter prior to October 1974 if such individual would have been eligible for such aid or assistance for such month had the increase in monthly insurance benefits under title II of such Act resulting from enactment of Public Law 92–336 not been applicable to such individual. Sec. 249F. professional standards review (a) The heading to title XI of the Social Security Act is amended by striking out “TITLE XI— GENERAL PROVISIONS” and inserting in lieu thereof “TITLE XI— GENERAL PROVISIONS AND PROFESSIONAL STANDARDS REVIEW “Part A— General Provisions” (b) Title XI of such Act is further amended by adding the following: “Part B— Professional Standards Review “Sec. 1151. “declaration of purpose In order to promote the effective, efficient, and economical delivery of health care services of proper quality for which payment may be made (in whole or in part) under this Act and in recognition of the interests of patients, the public, practitioners, and providers in improved health care services, it is the purpose of this part to assure, through the application of suitable procedures of professional standards review, that the services for which payment may be made under the Social Security Act will conform to appropriate professional standards for the provision of health care and that payment for such services will be made— “(1) only when, and to the extent, medically necessary, as determined in the exercise of reasonable limits of professional discretion; and “(2) in the case of services provided by a hospital or other health care facility on an inpatient basis, only when and for such period as such services cannot, consistent with professionally recognized health care standards, effectively be provided on an outpatient basis or more economically in an inpatient health care facility of a different type, as determined in the exercise of reasonable limits of professional discretion. “Sec. 1152. “designation of professional standards review organizations (a) The Secretary shall (1) not later than January 1, 1974, establish throughout the United States appropriate areas with respect to which Professional Standards Review Organizations may be designated, and (2) at the earliest practicable date after designation of an area enter into an agreement with a qualified organization whereby such an organization shall be conditionally designated as the Professional Standards Review Organization for such area. If, on the basis of its performance during such period of conditional designation, the Secretary determines that such organization is capable of fulfilling, in a satisfactory manner, the obligations and requirements for a Professional Standards Review Organization under this part, he shall enter into an agreement with such organization designating it as the Professional Standards Review Organization for such area. “(b) For purposes of subsection (a), the term ‘qualified organization’ means— “(1) when used in connection with any area— “(A) an organization (i) which is a nonprofit professional association (or a component organization thereof), (ii) which is composed of licensed doctors of medicine or osteopathy engaged in the practice of medicine or surgery in such area, (iii) the membership of which, includes a substantial proportion of all such physicians in such area, (iv) which is organized in a manner which makes available professional competence to review health care services of the types and kinds with respect to which Professional Standards Review Organizations have review responsibilities under this part, (v) the membership of which is voluntary and open to all doctors of medicine or osteopathy licensed to engage in the practice of medicine or surgery in such area without requirement of membership in or payment of dues to any organized medical society or association, and (vi) which does not restrict the eligibility of any member for service as an officer of the Professional Standards Review Organization or eligibility for and assignment to duties of such Professional Standards Review Organization, or. subject to subsection (c) (i), “(B) such other public, nonprofit private, or other agency or organization, which the Secretary determines, in accordance with criteria prescribed by him in regulations, to be of professional competence and otherwise suitable; and “(2) an organization which the Secretary, on the basis of his examination and evaluation of a formal plan submitted to him by the association, agency, or organization (as well as on the basis of other relevant data and information), finds to be willing to perform and capable of performing, in an effective, timely, and objective manner and at reasonable cost, the duties, functions, and activities of a Professional Standards Review Organization required by or pursuant to this part. “(c) (1) The Secretary shall not enter into any agreement under this part under which there is designated as the Professional Standards Review Organization for any area any organization other than an organization referred to in subsection (b) (1) (A) prior to January 1, 1976, nor after such date, unless, in such area, there is no organization referred to in subsection (b) (1) (A) which meets the conditions specified in subsection (b)(2). “(2) Whenever the Secretary shall have entered into an agreement under this part under which there is designated as the Professional Standards Review Organization for any area any organization other than an organization referred to in subsection (b) (1) (A), he shall not renew such agreements with such organization if he determines that— “(A) there is in such area an organization referred to in subsection (b)(1) (A) which (i) has not been previously designated as a Professional Standards Review Organization, and (ii) is willing to enter into an agreement under this part under which such organization would be designated as the Professional Standards Review Organization for such area; “(B) such organization meets the conditions specified in subsection (b)(2); and “(C) the designation of such organization as the Professional Standards Review Organization for such area is anticipated to result in substantial improvement in the performance in such area of the duties and functions required of such organizations under this part. “(d) Any such agreement under this part with an organization Agreement expiration; prior termination. Post, p. 1432. (other than an agreement established pursuant to section 1154) shall be for a term of 12 months; except that, prior to the expiration of such term such agreement may be terminated— “(1) by the organization at such time and upon such notice to the Secretary as may be prescribed in regulations (except that notice of more than 3 months may not be required); or “(2) ‘by the Secretary at such time and upon such reasonable notice to the organization as may be prescribed in regulations, but only after the Secretary has determined (after providing such organization with an opportunity for a formal hearing on the matter) that such organization is not substantially complying with or effectively carrying out the provisions of such agreement. “(e) In order to avoid duplication of functions and unnecessary Waiver. review and control activities, the Secretary is authorized to waive any or all of the review, certification, or similar activities otherwise required under or pursuant to any provision of this Act (other than this part) where he finds, on the basis of substantial evidence of the effective performance of review and control activities by Professional Standards Review Organizations, that the review, certification, and similar activities otherwise so required are not needed for the provision of adequate review and control. “(f) (1) In the case of agreements entered into prior to January 1, Agreement notice. 1976, under this part, under which any organization is designated as the Professional Standards Review Organization for any area, the Secretary shall, prior to entering into any such agreement with any organization for any area, inform (under regulations of the Secretary) the doctors of medicine or osteopathy who are in active practice in such area of the Secretary’s intention to enter into such an agreement with such organization. “(2) If, within a reasonable period of time following the serving of such notice, more than 10 per centum of such doctors object to the Secretary’s entering into such an agreement with such organization on the ground that such organization is not representative of doctors in such area, the Secretary shall conduct a poll of such doctors to determine whether or not such organization is representative of such doctors in such area. If more than 50 per centum of the doctors responding to such poll indicate that such organization is not representative of such doctors in such area the Secretary shall not enter into such an agreement with such organization. “Sec. 1153. “review pending designation of professional standards review organization Pending the assumption by a Professional Standards Review Organization for any area, of full review responsibility, and pending a demonstration of capacity for improved review effort with respect to matters involving the provision of health care services in such area for which payment (in whole or in part) may be made, under this Act, any review with respect to such services which has not been designated by the Secretary as the full responsibility of such organization, shall be reviewed in the manner otherwise provided for under law. “Sec. 1154. “trial period for professional standards review organizations (a) The Secretary shall initially designate an organization as a Professional Standards Review Organization for any area on a conditional basis with a view to determining the capacity of such organization to perform the duties and functions imposed under this Plan, approval. part on Professional Standards Review Organizations. Such designation may not be made prior to receipt from such organization and approval by the Secretary of a formal plan for the orderly assumption and implementation of the responsibilities of the Professional Standards Review Organization under this part. “(b) During any such trial period (which may not exceed 24 months), the Secretary may require a Professional Standards Review Organization to perform only such of the duties and functions required under this part of Professional Standards Review Organization as he determines such organization to be capable of performing. The number and type of such duties shall, during the trial period, be progressively increased as the organization becomes capable of added responsibility so that, by the end of such period, such organization shall be considered a qualified organization only if the Secretary finds that it is substantially carrying out in a satisfactory manner, the activities and functions required of Professional Standards Review Organizations under this part with respect to the review of health care services provided or ordered by physicians and other practitioners and institutional and other health care facilities, agencies, and organizations. Any of such duties and functions not performed by such organization during such period shall be performed in the manner and to the extent otherwise provided for under law. “(c) Any agreement under which any organization is conditionally designated as the Professional Standards Review Organization for any area may be terminated by such organization upon 90 days notice to the Secretary or by the Secretary upon 90 days notice to such organization. “Sec. 1155. “duties and functions of professional standards review organizations (a) (1) Notwithstanding any other provision of law, hut consistent with the provisions of this part, it shall (subject to the provisions of subsection (g)) be the duty and function of each Professional Standards Review Organization for any area to assume, at the earliest date practicably, responsibility for the review of the professional activities in such area of physicians and other health care practitioners and institutional and noninstitutional providers of health care services in the provision of health care services and items for which payment may be made (in whole or in part.) under this Act for the purpose of determining whether— “(A) such services and items are or were medically necessary; “(B) the quality of such services meets professionally recognized standards of health care; and “(C) in case such services and items are proposed to be provided in a hospital or other health care facility on an inpatient basis, such services and items could, consistent with the provision of appropriate medical care, be effectively provided on an outpatient basis or more economically in an inpatient health care facility of a different type. “(2) Each Professional Standards Review Organization shall have the authority to determine, in advance, in the case of— “(A) any elective admission to a hospital, or other health care facility, or “(B) any other health care service which will consist of extended or costly courses of treatment, whether such service, if provided, or if provided by a particular health care practitioner or by a particular hospital or other health care facility, organization, or agency, would meet the criteria specified in clauses (A) and (C) of paragraph (1). “(3) Each Professional Standards Review Organization shall, in Case criteria, publication. accordance with regulations of the Secretary, determine and publish, from time to time, the types and kinds of cases (whether by type of health care or diagnosis involved, or whether in terms of other relevant criteria relating to the provision of health care services) with respect to which such organization will, in order most effectively to carry out the purposes of this part, exercise the authority conferred upon it under paragraph (2). “(4) Each Professional Standards Review Organization shall be Patient profiles, maintenance and review. responsible for the arranging for the maintenance of and the regular review of profiles of care and services received and provided with respect to patients, utilizing to the greatest extent practicable in such patient profiles, methods of coding which will provide maximum confidentiality as to patient identity and assure objective evaluation consistent with the purposes of this part. Profiles shall also be regularly reviewed on an ongoing basis with respect to each health care practitioner and provider to determine whether the care and services ordered or rendered are consistent with the criteria specified in clauses (A), (B), and (C) of paragraph (1). “(5) Physicians assigned responsibility for the review of hospital Hospital care, physician review. care may be only those having active hospital staff privileges in at least one of the participating hospitals in the area served by the Professional Standards Review Organization and (except as may be otherwise provided under subsection (e) (1) of this section) such physicians ordinarily should not be responsible for, but may participate in the review of care and services provided in any hospital in which such physicians have active staff privileges. “(6) No physician shall be permitted to review— “(A) health care services provided to a patient if he was directly or indirectly involved in providing such services, or “(B) health care services provided in or by an institution, organization, or agency, if he or any member of his family has, directly or indirectly, any financial interest in such institution, organization, or agency. Physician’s family. For purposes of this paragraph, a physician’s family includes only his spouse (other than a spouse who is legally separated from him under a decree of divorce, or separate maintenance), children (including legally adopted children), grandchildren, parents, and grandparents. “(b) To the extent necessary or appropriate for the proper performance of its duties and functions, the Professional Standards Review Organization serving any area is authorized in accordance with regulations prescribed by the Secretary to— “(1) make arrangements to utilize the services of persons who are practitioners of or specialists in the various areas of medicine (including dentistry), or other types of health care, which persons shall, to the maximum extent practicable, be individuals engaged in the practice of their profession within the area served by such organization; “(2) undertake such professional inquiry either before or after, or both before and after, the provision of services with respect to which such organization has a responsibility for review under subsection (a)(1); “(3) examine the pertinent records of any practitioner or provider of health care services providing services with respect to which such organization has a responsibility for review under subsection (a) (1); and “(4) inspect the facilities in which care is rendered or service: provided (which are located in such area) of any practitioner or provider. “(c) No Professional Standards Review Organization shall utilize the services of any individual who is not a duly licensed doctor of medicine or osteopathy to make final determinations in accordance with its duties and functions under this part with respect to the professional conduct of any other duly licensed doctor of medicine or osteopathy, or any act performed by any duly licensed doctor of medicine or osteopathy in the exercise of his profession. “(d) In order to familiarize physicians with the review functions and activities of Professional Standards Review Organizations and to promote acceptance of such functions and activities by physicians, patients, and other persons, each Professional Standards Review Organization, in carrying out its review responsibilities, shall (to the maximum extent consistent with the effective and timely performance of its duties and functions)— “(1) encourage all physicians practicing their profession in the area served by such Organization to participate as reviewers in the review activities of such Organizations; “(2) provide rotating physician membership of review committees on an extensive and continuing basis; “(3) assure that membership on review committees have the broadest representation feasible in terms of the various types of practice in which physicians engage in the area served by such Organization; and “(4) utilize, whenever appropriate, medical periodicals and similar publications to publicize the functions and activities of Professional Standards Review Organizations. “(e) (1) Each Professional Standards Review Organization shall Review committees. utilize the services of, and accept the findings of, the review committees of a hospital or other operating health care facility or organization located in the area served by such organization, but only when and only to the extent and only for such time that such committees in such hospital or other operating health care facility or organization have demonstrated to the satisfaction of such organization their capacity effectively and in timely fashion to review activities in such hospital or other operating health care facility or organization (including the medical necessity of admissions, types and extent of services ordered, and lengths of stay) so as to aid in accomplishing the purposes and responsibilities described in subsection (a)(1), except where the Secretary disapproves, for good cause, such acceptance. “(2) The Secretary may prescribe regulations to carry out the provisions Regulations. of this subsection. “(f) (1) An agreement entered into under this part between the Agreement requirements. Secretary and any organization under which such organization is designated as the Professional Standards Review Organization for any area shall provide that such organization will— “(A) perform such duties and functions and assume such responsibilities and comply with such other requirements as may be required by this part or under regulations of the Secretary promulgated to carry out the provisions of this part; and “(B) collect such data relevant to its functions and such information and keep and maintain such records in such form as the Secretary may require to carry out the purposes of this part and to permit access to and use of any such records as the Secretary may require for such purposes. “(2) Any such agreement with an organization under this part shall provide that the Secretary make payments to such organization equal to the amount of expenses reasonably and necessarily incurred, as determined by the Secretary, by such organization in carrying out or preparing to carry out the duties and functions required by such agreement. “(g) Notwithstanding any other provision of this part, the responsibility for review of health care services of any Professional Standards Review Organization shall be the review of health care services provided by or in institutions, unless such Organization shall have made a request to the Secretary that it be charged with the duty and function of reviewing other health care services and the Secretary shall have approved such request. “Sec. 1156. “norms of health care services for various illnesses or health conditions (a) Each Professional Standards Review Organization shall apply professionally developed norms of care, diagnosis, and treatment based upon typical patterns of practice in its regions (including typical lengths-of-stay for institutional care by age and diagnosis) as principal points of evaluation and review. The National Professional Standards Review Council and the Secretary shall provide such technical assistance to the organization as will be helpful in utilizing and applying such norms of care, diagnosis, and treatment. Where the actual norms of care, diagnosis, and treatment in a Professional Standards Review Organization area are significantly different from professionally developed regional norms of care, diagnosis, and treatment approved for comparable conditions, the Professional Standards Review Organization concerned shall be so informed, and in the event that appropriate consultation and discussion indicate reasonable basis for usage of other norms in the area concerned, the Professional Standards Review Organization may apply such norms in such area as are approved by the National Professional Standards Review Council. “(b) Such norms with respect to treatment for particular illnesses or health conditions shall include (in accordance with regulations of the Secretary)— “(1) the types and extent of the health care services which, taking into account differing, but acceptable, modes of treatment and methods of organizing and delivering care are considered within the range of appropriate diagnosis and treatment of such illness or health condition, consistent with professionally recognized and accepted patterns of care; “(2) the type of health care facility which is considered, consistent with such standards, to be the type in which health care services which are medically appropriate for such illness or condition can most economically be provided. “(c) (1) The National Professional Standards Review Council shall provide for the preparation and distribution, to each Professional Standards Review Organization and to each other agency or person performing review functions with respect to the provision of health care services under this Act, of appropriate materials indicating the regional norms to be utilized pursuant to this part. Such data concerning norms shall be reviewed and revised from time to time. The approval of the National Professional Standards Review Council of norms of care, diagnosis, and treatment shall be based on its analysis of appropriate and adequate data. “(2) Each review organization, agency, or person referred to in paragraph (1) shall utilize the norms developed under this section as a principal point of evaluation and review for determining, with respect to any health care services which have been or are proposed to be provided, whether such care and services are consistent, with the criteria Ante, p. 1433. specified in section 1155 (a)(1). “(d) (1) Each Professional Standards Review Organization shall— “(A) in accordance with regulations of the Secretary, specify the appropriate points in time after the admission of a patient for inpatient care in a health care institution, at which the physician attending such patient shall execute a certification stating that further inpatient care in such institution will be medically necessary effectively to meet the health care needs of such patient; and “(B) require that there be included in any such certification with respect to any patient such information as may be necessary to enable such organization properly to evaluate the medical necessity of the further institutional health care recommended by the physician executing such certification. “(2) The points in time at which any such certification will be required (usually, not later than the 50th percentile of lengths-of-stay for patients in similar age groups with similar diagnoses) shall be consistent with and based on professionally developed norms of care and treatment and data developed with respect to length of stay in health care institutions of patients having various illnesses, injuries, or health conditions, and requiring various types of health care services or procedures. “Sec. 1157. “submission of efforts by profesional standards review organizations If, in discharging its duties and functions under this part, any Professional Standards Review Organization determines that any health care practitioner or any hospital, or other health care facility, agency, or organization has violated any of the obligations imposed by section 1160, such organization shall report the Post, p. 1438. matter to the Statewide Professional Standards Review Council for the State in which such organization is located together with the recommendations of such Organization as to the action which should be taken with respect to the matter. Any Statewide, Professional Standards Review Council receiving any such report and recommendation shall review the same and promptly transmit such report and recommendation to the Secretary’ together with any additional comments or recommendations thereon as it deems appropriate. The Secretary may utilize a Professional Standards Review Organization, in lieu of a program review team as specified in sections 1862 and 1866, 79 Stat. 325; 81 Stat. 846. 42 USC 1395y, 1395cc. Ante, p. 1408. Ante, p. 1409. for purposes of subparagraph (C) of section 1862(d)(1) and subparagraph (F) of section 1866(b)(2). “Sec. 1158. “requirement of review approval as condition of payment of claims (a) Except as provided for in section 1159, no Federal funds appropriated under any title of this Act (other than title V) 81 Stat. 921. 42 USC 701. for the provision of health care services or items shall be used (directly or indirectly) for the payment, under such title or any program established pursuant thereto, of any claim for the provision of such services or items, unless the Secretary, pursuant to regulation determines that the claimant is without fault if— “(1) the provision of such services or items is subject to review under this part by any Professional St and aids Review Organization. or other agency; and “(2) such organization or other agency has, in the proper exercise of its duties and functions under or consistent with the purposes of this part, disapproved of the services or items giving rise to such claim, and has notified the practitioner or provider who provided or proposed to provide such services or items and the individual who would receive or was proposed to receive such services or items of its disapproval of the provision of such services or items. “(b) Whenever any Professional Standards Review Organization, in the discharge of its duties and functions as specified by or pursuant to this part, disapproves of any health care services or items furnished or to be furnished by any practitioner or provider, such organization shall, after notifying the practitioner, provider, or other organization or agency of its disapproval in accordance with subsection (a), promptly notify the agency or organization having responsibility for acting upon claims for payment for or on account of such services or items. “Sec. 1159. “hearings and review by secretary (a) Any beneficiary or recipient who is entitled to benefits under this Act (other than title V) or a provider or practitioner who is dissatisfied with a determination with respect to a claim made by a Professional Standards Review Organization in carrying out its responsibilities for the review of professional activities in accordance with paragraphs (1) and (2) of section 1155(a) shall, after being Ante, p. 1433. notified of such determination, be entitled to a reconsideration thereof by the Professional Standards Review Organization and, where the Professional Standards Review Organization reaffirms such determination in a State which has established a Statewide Professional Standards Review Council, and where the matter in controversy is $100 or more, such determination shall be reviewed by professional members of such Council and, if the Council so determined, revised. “(b) Where the determination of the Statewide Professional Standards Review Council is adverse to the beneficiary or recipient (or, in the absence of such Council in a State and where the matter in controversy is $100 or more), such beneficiary or recipient shall be entitled to a hearing thereon by the Secretary to the same extent as is provided 53 Stat. 1368. 42 USC 405. in section 205(b), and, where the amount in controversy is $1,000 or more, to judicial review of the Secretary’s final decision after such hearing as is provided in section 205(g). The Secretary will render a decision only after appropriate professional consultation on the matter. “(c) Any review or appeals provided under this section shall be in lieu of any review, hearing, or appeal under this Act with respect to the same issue. “Sec. 1160. “obligations of health care practitioners and providers of health care services; sanctions and penalties; hearings and review (a) (1) It shall be the obligation of any health care practitioner and any other person (including a hospital or other health care facility, organization, or agency) who provides health care services for which payment may be made (in whole or in part) under this Act, to assure that services or items ordered or provided by such practitioner or person to beneficiaries and recipients under this Act— “(A) will be provided only when, and to the extent, medically necessary; and “(B) will be of a quality which meets professionally recognized standards of health care; and “(C) will be supported by evidence of such medical necessity and quality in such form and fashion and at such time as may reasonably be required by the Professional Standards Review Organization in the exercise of its duties and responsibilities; and it shall be the obligation of any health care practitioner in ordering, authorizing, directing, or arranging for the provision by any other person (including a hospital or other health care facility, organization, or agency), of health care services for any patient of such practitioner, to exercise his professional responsibility with a view to assuring (to the extent of his influence or control over such patient, such person, or the provision of such services) that such services or items will be provided— “(D) only when, and to the extent, medically necessary; and “(E) will be of a quality which meets professionally recognized standards of health care. “(2) Each health care practitioner, and each hospital or other provider of health care services, shall have an obligation, within reasonable limits of professional discretion, not to take any action, in the exercise of his profession (in the case of any health care practitioner), or in the conduct of its business (in the case of any hospital or other such provider), which would authorize any individual to be admitted as an inpatient in or to continue as an inpatient in any hospital or other health care facility unless— “(A) inpatient care is determined by such practitioner and by such hospital or other provider, consistent with professionally recognized health care standards, to be medically necessary for the proper care of such individual; and “(B) (i) the inpatient care required by such individual cannot, consistent with such standards, be provided more economically in a health care facility of a different type; or “(ii) (in the case of a patient who requires care which can, consistent with such standards, be provided more economically in a health care facility of a different type) there is, in the area in which such individual is located, no such facility or no such facility which is available to provide care to such individual at the time when care is needed by him. “(b) (1) If after reasonable notice and opportunity for discussion Report and Recommendations. with the practitioner or provider concerned, any Professional Standards Review Organization submits a report and recommendations to the Secretary pursuant to section 1157 (which report and recommendations Ante, p. 1437. shall be submitted through the Statewide Professional Standards Review Council, if such Council has been established, which shall promptly transmit such report, and recommendations together with any additional comments and recommendations thereon as it deems appropriate) and if the Secretary determines that such practitioner or provider, in providing health care services over which such organization has review responsibility and for which payment (in whole or in part) may be made under this Act has— “(A) by failing, in a substantial number of cases, substantially to comply with any obligation imposed on him under subsection (a), or “(B) by grossly and flagrantly violating any such obligation in one or more instances. demonstrated an unwillingness or a lack of ability substantially to comply with such obligations, he (in addition to any other sanction provided under law) may exclude (permanently for such period as the Secretary’ may prescribe) such practitioner or provider from eligibility to provide such services on a reimbursable basis. “(2) A determination made by the Secretary under this subsection shall be effective at such time and upon such reasonable notice to the public and to the person furnishing the services involved as may be specified in regulations. Such determination shall be effective with respect to services furnished to an individual on or after the effective date of such determination (except that in the case of institutional health care services such determination shall be effective in the manner provided in title XVIII with respect to terminations of provider 42 USC 1395. agreements), and shall remain in effect until the Secretary finds and gives reasonable notice to the public that the basis for such determination has been removed and that there is reasonable assurance that it will not recur. “(3) In lieu of the sanction authorized by paragraph (1) ,the Secretary may require that (as a condition to the continued eligibility of such practitioner or provider to provide such health care services on a reimbursable basis) such practitioner or provider pay to the United States, in ease such acts or conduct involved the provision or ordering by such practitioner or provider of health care, services which were medically improper or unnecessary, an amount not in excess of the actual or estimated cost, of the medically improper or unnecessary services so provided, or (if less) $5,000. Such amount may be deducted from any sums owing by the United States (or any instrumentality thereof) to the person from whom such amount is claimed. “(4) Any person furnishing services described in paragraph (1) who is dissatisfied with a determination made by the Secretary under this subsection shall be entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided 53 Stat. 1363. 42 USC 405. in section 205(b), and to judicial review of the Secretary’s final decision after such hearing as is provided in section 205 (g). “(c) It shall be the duty of each Professional Standards Review Organization and each Statewide Professional Standards Review Council to use such authority or influence it may possess as a professional organization, and to enlist the support of any other professional or governmental organization having influence or authority over health care practitioners and any other person (including a hospital or other health care facility, organization, or agency) providing health care services in the area served by such review organization, in assuring that each practitioner or provider (referred to in subsection (a)) providing health care services in such area shall comply with all obligations imposed on him under subsection (a). “Sec. 1161. “notice to practitioner or provider Whenever any Professional Standards Review Organization takes any action or makes any determination— “(a) which denies any request, by a health care practitioner or other provider of health care services, for approval of a health care service or item proposed to be ordered or provided by such practitioner or provider; or “(b) that any such practitioner or provider has violated any obligation imposed on such practitioner or provider under section 1160, such organization shall, immediately after taking such action or making such determination, give notice to such practitioner or provider of such determination and the basis therefor, and shall provide him with appropriate opportunity for discussion and review of the matter. “Sec. 1162. “statewide professional standards review councils; advisory groups to such councils (a) In any State in which there are located three or more Professional Standards Review Organizations, the Secretary shall establish a Statewide Professional Standards Review Council. “(b) The membership of any such Council for any State shall be appointed by the Secretary and shall consist of— “ (1) one representative from and designated by each Professional Standards Review Organization in the State; “ (2) four physicians, two of whom may be designated by the State medical society and two of whom may be designated by the State hospital association of such State to serve as members, on such Council; and “ (3) four persons knowledgeable in health care from such State whom the Secretary shall have selected as representatives of the public in such State (at least two of whom shall have been recommended for membership on the Council by the Governor of such State). “(c) It shall be the duty and function of the Statewide Professional Standards Review Council for any State, in accordance with regulations of the Secretary, (1) to coordinate the activities of, and disseminate information and data among the various Professional Standards Review Organizations within such State including assisting the Secre-tary in development of uniform data gathering procedures and operating procedures applicable to the several areas m a State (including, where appropriate, common data processing operations serving several or all areas) to assure efficient operation and objective evaluation of comparative performance of the several areas and, (2) to assist the Secretary in evaluating the performance of each Professional Standards Review Organization, and (3) where the Secretary finds it necessary to replace a Professional Standards Review Organization, to assist him in developing and arranging for a qualified replacement Professional Standards Review Organization. “(d) The Secretary is authorized to enter into an agreement with Payments. any such Council under which the Secretary shall make payments to such Council equal to the amount of expenses reasonably and necessarily incurred, as determined by the Secretary, by such Council in carrying out the duties and functions provided in this section. “(e) (1) The Statewide Professional Standards Review Council for any State (or in a State which does not have such Council, the Professional Standards Review Organizations in such State which have agreements with the Secretary) shall be advised and assisted in carrying out its functions by an advisory group (of not less than seven nor more than eleven members) which shall be made up of representatives of health care practitioners (other than physicians) and hospitals and other health care facilities which provide within the State health care services for which payment (in whole or in part) may be made under any program established by or pursuant to this Act. “(2) The Secretary shall by regulations provide the manner in Member selection, regulations. which members of such advisory group shall be selected by the Statewide Professional Standards Review Council (or Professional Standards Review Organizations in States without such Councils). “(3) The expenses reasonably and necessarily incurred, as determined Expenses. by the Secretary, by such group in carrying out it duties and functions under this subsection shall be considered to be expenses necessarily incurred by the Statewide Professional Standards Review Council served by such group. “Sec. 1163. “national professional standards review council (a) (1) There shall be established a National Professional Establishment; membership. Standards Review Council (hereinafter in this section referred to as the ‘Council’) which shall consist, of eleven physicians, not otherwise in the employ of the United States, appointed by the Secretary without regard to the provisions of title 5, United States Code, governing 5 USC 101 et seq. appointments in the competitive service. “(2) Members of the Council shall be appointed for a term of three Term of membership. years and shall be eligible for reappointment. “(3) The Secretary shall from time to time designate one of the members of the Council to serve as Chairman thereof. “(b) Members of the Council shall consist of physicians of recognized Qualifications. standing and distinction in the appraisal of medical practice. A majority of such members shall be physicians who have been recommended by the Secretary to serve on the Council by national organizations recognized by the Secretary as representing practicing physicians. The membership of the Council shall include physicians who have been recommended for membership on the Council by consumer groups and other health care interests. “(c) The Council is authorized to utilize, and the Secretary shall Consultants. make available, or arrange for, such technical and professional consultative assistance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Council such secretarial, clerical and other assistance and such pertinent data prepared by, for, or otherwise available to, the Department of Health, Education, and Welfare as the Council may require to carry out its functions. ‘(d) Members of the Council, while serving on business of the Council, shall be entitled to receive compensation at a rate fixed by the Secretary (but not in excess of the daily rate paid under GS–18 of the General Schedule under section 5332 of title 5, United States 5 USC 5332 note. Code), including traveltime; and while so serving away from their homes or regular places of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for persons in Government service employed intermittently. “(e) It shall be the duty of the Council to— “(1) advise the Secretary in the administration of this part; “(2) provide for the development and distribution, among Statewide Professional Standards Review Councils and Professional Standards Review Organizations of information and data which will assist such review councils and organizations in carrying out their duties and functions; “(3) review the operations of Statewide Professional Standards Review Councils .and Professional Standards Review Organizations with a view to determining the effectiveness and comparative performance of such review councils and organizations in carrying out the purposes of this part: and “(4) make or arrange for the making of studies and investigations with a view to developing and recommending to the Secretary and to the Congress measures designed more effectively to accomplish the purposes and objectives of this part. “(f) The National Professional Standards Review Council shall from time to time, but not less often than annually, submit to the Secretary and to the Congress a report on its activities and shall include in such report the findings of its studies and investigations together with any recommendations it may have with respect to the more effective accomplishment of the purposes and objectives of this part. Such report shall also contain comparative data indicating the results of review activities, conducted pursuant to this part, in each State and in each of the various areas thereof. “Sec. 1164. “application of this part to certain state programs receiving federal financial assistance (a) In addition to the requirements imposed by law as a condition of approval of a State plan approved under any title of this Act under which health care services are paid for in whole or part, with Federal funds, there is hereby imposed the requirement that provisions of this part shall apply to the operation of such plan or program. “(b) The requirement imposed by subsection (a) with respect to such State plans approved under this Act shall apply— “(1) in the case of any such plan where legislative action by the State legislature is not necessary to meet such requirement, on and after January 1, 1974; and “(2) in the case of any such plan where legislative action by the State legislature is necessary to meet such requirement, whichever of the following is earlier— “(A) on and after July 1, 1974, or “(B) on and after the first day of the calendar month which first commences more than ninety days after the close of the first regular session of the legislature of such State which begins after December 31, 1973. “Sec. 1165. “correlation of functions between professional standards review organizations and administrative instrumentalities The Secretary shall by regulations provide for such correlation of activities, such interchange of data and information, and such other cooperation consistent with economical, efficient, coordinated, and comprehensive implementation of this part (including, but not limited to usage of existing mechanical and other data-gathering capacity) between and among— “(a) (1) agencies and organizations which are parties to agreements entered into pursuant to section 1816, (2) carriers which 79 Stat. 297. 42 USC 1395h. 42 USC 1395u. are parties to contracts entered into pursuant to section 1842, and (3) any other public or private agency (other than a Professional Standards Review Organization) having review or control functions, or proved relevant data-gathering procedures and experience, and “(b) Professional Standards Review Organizations, as may be necessary or appropriate for the effective administration of title XVIII, or State plans approved under this Act. 42 USC 1395. “Sec. 1166. “prohibition against disclosure of information (a) Any data or information acquired by any Professional Standards Review Organization, in the exercise of its duties and functions, shall be held in confidence and shall not be disclosed to any person except (1) to the extent that may be necessary to carry out the purposes of this part or (2) in such cases and under such circumstances as the Secretary shall by regulations provide to assure adequate protection of the rights and interests of patients, health care practitioners, or providers of health care. “(b) It shall be unlawful for any person to disclose any such information Penalty. other than for such purposes, and any person violating the provisions of this section shall, upon conviction, be fined not more than $1,000, and imprisoned for not more than six months, or both, together with the costs of prosecution. “Sec. 1167. “limitation on liability for persons providing information, and for members and employees of professional standards review organizations, and for health care pract1tioners and providers (a) Notwithstanding any other provision of law, no person providing information to any Professional Standards Review Organization shall be held, by reason of having provided such information, to have violated any criminal law, or to be civilly liable under any law, of the United States or of any State (or political subdivision thereof) unless— “(1) such information is unrelated to the performance of the duties and functions of such Organization, or “(2) such information is false and the person providing such information knew, or had reason to believe, that such information was false. “(b) (1) No individual who, as a member or employee of any Professional Standards Review Organization or who furnishes profes-sional counsel or services to such organization, shall be held by reason of the performance by him of any duty, function, or activity authorized or required of Professional Standards Review Organizations under this part, to have violated any criminal law, or to be civilly liable under any law, of the United States or of any State (or political subdivision thereof) provided he has exercised due care. “(2) The provisions of paragraph (1) shall not apply with respect to any action taken by any individual if such individual, in taking such action, was motivated by malice toward any person affected by such action. “(c) No doctor of medicine or osteopathy and no provider (including directors, trustees, employees, or officials thereof) of health care services shall be civilly liable to any person under any law of the United States or of any State (or political subdivision thereof) on account of any action taken by him in compliance with or reliance upon professionally developed norms of care and treatment, applied by a Professional Standards Review Organization (which has been Ante, p. 1430. designated in accordance with section 1152(b)(1)(A)) operating in the area where such doctor of medicine or osteopathy or provider took such action but only if— “(1) he takes such action (in the case of a health care practitioner) in the exercise of his profession as a doctor of medicine or osteopathy (or in the case of a provider of health care services) in the exercise of Ills functions as a provider of health care services, and “(2) he exercised due care in all professional conduct taken or directed by him and reasonably related to, and resulting from, the actions taken in compliance with or reliance upon such professionally accepted norms of care and treatment. “Sec. 1168. “authorization for use of certain funds to administer the provisions of this part Expenses incurred in the administration of this part shall be payable from— “(a) funds in the Federal Hospital Insurance Trust Fund; “(b) funds in the Federal Supplementary Medical Insurance Trust Fund; and “(c) funds appropriated to carry out the health care provisions of the several titles of this Act; in such amounts from each of the sources of funds (referred to in subsections (a), (b), and (c)) as the Secretary shall deem to be fair and equitable after taking into consideration the costs attributable to the administration of this part with respect to each of such plans and programs. “Sec. 1169. “technical assistance to organizations desiring to be designated as professional standards review organizations The Secretary is authorized to provide all necessary’ technical and other assistance (including the preparation of prototype plans of organization and operation) to organizations described in section 1152(b) (1) which— “(a) express a desire to be designated as a Professional Standards Review Organization; and “(b) the Secretary determines have a potential for meeting the requirements of a Professional Standards Review Organization; to assist such organizations in developing a proper plan to be submitted to the Secretary and otherwise in preparing to meet the requirements of this part for designation as a Professional Standards be view Organization. “Sec. 1170. “exemptions or Christian science sanatoriums The provisions of this part shall not apply with respect to a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts.” Sec. 251. physical therapy services and other therapy services under medicare (a) (1) Section 1861(p) of the Social Security Act is amended by adding at the end thereof (after and below paragraph 81 Stat. 850. 42 USC 1395x. (4) (B)) the following new sentence: “The term ‘outpatient physical therapy services’ also includes physical therapy services furnished an individual by a physical therapist (in his office or in such individual’s home) who meets licensing and other standards prescribed by the Secretary in regulations, otherwise than under an arrangement with and under the supervision of a provider of services, clinic, rehabilitation agency, or public health agency, if the furnishing of such services meets such conditions relating to health and safety as the Secretary may find necessary.” (2) Section 1833 of such Act is amended by adding at the end Ante, p. 1424. thereof the following new subsection: “(g) In the case of services described in the next to last sentence of section 1861 (p), with respect to expenses incurred in any calendar year, no more than $100 shall be considered as incurred expenses for purposes of subsections (a) and (b).” (3) Section 1833(a) (2) of such Act (as amended by section 233(b) of this Act) is further amended by striking out the period at the end Ante, p. 1411. of subparagraph (B) and inserting in lieu thereof “; or”, and by adding after subparagraph (B) the following new subparagraph: “(C) if such services are services to which the next to last sentence of section 1861 (p) applies, the reasonable charges for such services.” (4) Section 1832(a)(2)(C) of such Act is amended by striking 81 Stat. 851. 42 USC 1395k. out “services.” and inserting in lieu thereof “services, other than services to which the next to last sentence of section 1861 (p) applies.” (b) (1) Section 1861 (p) of such Act (as amended by subsection (a)(1) of this section) is further amended by adding at the end thereof the following new sentence: “In addition, such term includes physical therapy services which meet the requirements of the first sentence of this subsection except that they are furnished to an individual as an inpatient of a hospital or extended care facility.” (2) Section 1835(a)(2)(C) of such Act is amended by striking 81 Stat. 851. 42 USC 1395n. out “on an outpatient basis”. (c) Section 1861 (v) of such Act (as amended by sections 221(c) (4) and 223(f) of this Act) is further amended by redesignating paragraphs Ante, p. 1394. (5) and (6) as paragraphs (6) and (7), respectively, and by inserting after paragraph (4) the following new paragraph: “(5) (A) Where physical therapy services, occupational therapy services, speech therapy services, or other therapy services or services of other health-related personnel (other than physicians) are furnished under an arrangement with a provider of services or other organization, specified in the first sentence of section 1861 (p) the amount included in any payment to such provider or other organization under this title as the reasonable cost of such services (as furnished under such arrangements) shall not exceed an amount equal to the salary which would reasonably have been paid for such services (together with any additional costs that would have been incurred by the provider or other organization) to the person performing them if they had been performed in an employment relationship with such provider or other organization (rather than under such arrangement) plus the cost of such other expenses (including a reasonable allowance for travel time and other reasonable types of expense related to any differences in acceptable methods of organization for the provision of such therapy) incurred by such person, as the Secretary may in regulations determine to be appropriate. “(B) Notwithstanding the provisions of subparagraph (A), if a provider of services or other organization specified in the first sentence 81 Stat. 850. 12 USC 1395x. of section 1861 (p) requires the services of a therapist on a limited part-time basis, or only to perform intermittent services, the Secretary may make payment on the basis of a reasonable rate per unit of service, even though such rate is greater per unit of time than salary related amounts, where he finds that such greater payment is, in the aggregate, less than the amount that would have been paid if such organization had employed a therapist on a full- or part-time salary basis.” (d) (1) The amendments made by subsection (a) shall apply with respect to services furnished on or after July 1, 1973. (2) The amendments made by subsection (b) shall apply with respect to services furnished on or after the date of enactment of this Act. (3) The amendments made by subsection (c) shall be effective with respect to accounting periods beginning after December 31, 1972. Sec. 252. coverage of supplies related to colostomies (a) Section 1861 (s) (8) of the Social Security Act is amended by inserting after “organ” the following: “(including colostomy bags and supplies directly related to colostomy care)”. (b) The amendment made by subsection (a) shall apply only with respect to items furnished on or after the date of the enactment of this Act. Sec. 255. coverage prior to application for medical assistance (a) Section 1902(a) of the Social Security Act (as Ante, pp. 1415, 1417. amended by sections 236(b) and 239(b) of this Act) is further amended— (1) by striking out “and” at the end of paragraph (32); (2) by striking out the period at the end of paragraph (33) and inserting in lieu thereof “; and”; and (3) by inserting after paragraph (33) the following new paragraph: “(34) provide that in the case of any individual who has been determined to be eligible for medical assistance under the plan, such assistance will be made available to him for care and services included under the plan and furnished in or after the third month before the month in which he made application for such assistance. if such individual was (or upon application would have been) eligible for such assistance at the time such care and services were furnished.” (b) The amendments made by subsection (a.) shall be effective July 1, 1973. Sec. 256. hospital admissions for dental services under medicare (a) Section 1814(a)(2) of the Social Security Act is amended by striking out “or” at the end of subparagraph (C), by Ante, p. 1413. adding “or” after the semicolon at the end of the subparagraph (D), and by inserting after subparagraph (D) the following new subparagraph: “(E) in the case of inpatient hospital services in connection with a dental procedure, the individual suffers from impairments of such severity as to require hospitalization;”. (b) Section 1861(c) of such Act is amended by inserting after “or 79 Stat. 321. 42 USC 1395x. any facial bone,” the following: “or (C) the certification required by section 1814(a) (2) (E) of this Act,”. (c) Section 1862(a) (12) of such Act is amended by inserting before 42 USC 1395y. the semicolon the following: “, except that payment may be made under part A in the case of inpatient hospital services in connection with a dental procedure where the individual suffers from impairments of such severity as to require hospitalization”. (d) The amendments made by this section shall apply with respect Effective date. to admissions occurring after the second month following the month in which this Act is enacted. Sec. 257. extension of or ace period for termination of supplementary medical insurance coverage where failure to pay premiums is die to good cause (a) Section 1838(b) of the Social Security Act is amended Ante, p. 1378. by striking out “(not in excess of 90 days)” in the third sentence, and by adding at the end thereof the following new sentence: “The grace period determined under the preceding sentence shall not exceed 90 days; except that it may be extended to not to exceed 180 days in any case where the Secretary determines that there was good cause for failure to pay the overdue premiums within such 90-day period.” (b) The amendments made by subsection (a) shall apply with Effective date. respect to nonpayment of premiums which become due and payable on or after the date of the enactment of this Act or which became payable within the 90-day period immediately preceding such date; and for purposes of such amendments any premium which became due and payable within such 90-day period shall be considered a premium becoming due and payable on the date of the enactment of this Act. Sec. 258. extension of time for filing claim for supplementary medical insurance benefits where delay is due to administrative error (a) Section 1842(b)(3) of the Social Security Act (as amended by section 224(a) of this Act) is further amended by adding Ante, p. 1395. at the end thereof the following new sentence: “The requirement in subparagraph (B) that a bill be submitted or request for payment be made by the close of the following calendar year shall not apply if (i) failure to submit the bill or request the payment by the close of such year is due to the error or misrepresentation of an officer, employee, fiscal intermediary, carrier, or agent of the Department of Health, Education, and Welfare performing functions under this title and acting within the scope of his or its authority, and (ii) the bill is submitted or the payment is requested promptly after such error or misrepresentation is eliminated or corrected.” (b) The amendment made by subsection (a) shall apply with Effective date. respect to bills submitted and requests for payment made after March 1968. Sec. 259. waiver of enrollment period requirements where individual’s rights were prejudiced by administrative error or inaction (a) Section 1837 of the Social Security Act (after the new Ante, p. 1378. subsections added by section 206(a) of this Act) is amended by adding at the end thereof the following new subsection: “(h) In any case where the Secretary finds that an individual’s enrollment or nonenrollment in the insurance program established by Ante, p. 1374. this part or part A pursuant to section 1818 is unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, or inaction of an officer, employee, or agent of the Federal Government, or its instrumentalities, the Secretary may take such action (including the designation for such individual of a special initial or subsequent enrollment period, with a coverage period determined on the basis thereof and with appropriate adjustments of premiums) as may be necessary to correct or eliminate the effects of such error, misrepresentation, or inaction.” (b) The amendment made by subsection (a) shall be effective as of July 1, 1966. Sec. 260. elimination of provisions preventing enrollment in supplementary medical insurance program more than three years after first opportunity Section 1837 (b) of the Social Security Act is amended to read as follows: “(b) No individual may enroll under this part more than twice.” Sec. 261. waiver of recovery of incorrect payments from survivor who is without fault under medicare (a) Section 1870(c) of the Social Security Act is amended by striking out “and where” and inserting in lieu thereof the following: “or where the adjustment (or recovery) would be made by decreasing payments to which another person who is without fault is entitled as provided in subsection (b) (4), if”. (b) The amendment made by subsection (a) shall apply with respect to waiver actions considered after the date of the enactment of this Act. Sec. 262. requirement of minimum amount of claim to establish entitlement to hearing under supplementary medical insurance program (a) Section 1842(b) (3) (C) of the Social Security Act is amended by inserting after “a fair hearing by the carrier” the following: “, in any case where the amount in controversy is $100 or more,”. (b) The amendment made by subsection (a) shall apply with respect to hearings requested (under the procedures established under section 1842(b)(3)(C) of the Social Security Act) after the date of the enactment of this Act. Sec. 263. collection of supplementary medical insurance premiums from individuals entitled to both social security and railroad retirement benefits (a) Section 1840(a)(1) of the Social Security Act is amended by striking out “subsection (d)” and inserting in lieu thereof “subsections (b)(1) and (c)”. (b) Section 1840(b)(1) of such Act is amended by inserting 42 USC 1395s. “(whether or not such individual is also entitled for such month to a monthly insurance benefit under section 202)” after “1937”, and by striking out “subsection (d)” and inserting in lieu thereof “subsection (c)” (c) Section 1840 of such Act is further amended by striking out subsection (c), and by redesignating subsections (d) through (i) as subsections (c) through (h), respectively. (d) (1) Section 1840(e) of such Act (as so redesignated) is amended by striking out “subsection (d)” and inserting in lieu thereof “subsection (c)”. (2) Section 1840(f) of such Act (as so redesignated) is amended by striking out “subsection (d) or (f)” and inserting in lieu thereof “subsection (c) or (e)”. (3) Section 1840(h) of such Act (as so redesignated) is amended by sinking out “(c), (d), and (e)” and inserting in lieu thereof “(c), and (d)”. (4) Section 1841(h) of such Act is amended by striking out 42 USC 1395t. “1840(e)” and inserting in lieu thereof “1840(d)”. (5) Section 1842 of such Act is amended by adding at the end 42 USC 1395u. thereof the following new subsection: “(g) The Railroad Retirement Board shall, in accordance with such regulations as the Secretary may prescribe, contract with a carrier or carriers to perform the functions set out in this section with respect to individuals entitled to benefits as qualified railroad retirement beneficiaries pursuant to section 226(a) of this Act and section 21(b) of Ante, p. 1371. the Railroad Retirement Act of 1937.” 79 Stat. 340. 45 USC 228s–2. 42 USC 1395t. (e) Section 1841 of such Act is amended by adding at the end thereof the following new subsection: “(i) The Managing Trustee shall pay from time to time from the Trust Fund such amounts as the Secretary of Health, Education, and Welfare certifies are necessary to pay the costs incurred by the Railroad Retirement Board for services performed pursuant to section 1840(b) (1) and section 1842(g). During each fiscal year or after the close of such fiscal year, the Railroad Retirement Board shall certify to the Secretary the amount of the costs it incurred in performing such services and such certified amount shall be the basis for the amount of such costs certified by the Secretary to the Managing Trustee.” (f) The amendments made by this section with respect to collection Effective date. of premiums shall apply to premiums becoming due and payable after the fourth month following the month in which this Act is enacted. Sec. 264. prosthetic lenses furnished by optometrists under supplementary medical insurance program (a) Section 1861 (r) of the Social Security Act (as amended by sections 211(c)(2) and 256(b) of this Act) is further Ante, pp. 1384 1447. amended (1) by striking out “or (3)” and inserting in lieu thereof “(3)”, and (2) by inserting before the period at the end thereof the following: “, or (4) a doctor of optometry who is legally authorized to practice optometry by the State in which he performs such function, but only with respect to establishing the necessity for prosthetic lenses”. (b) The amendment made by subsection (a) shall apply only with Effective date. respect to services performed on or after the date of the enactment of this Act. Sec. 265. provision of medical social services not mandatory for extended care facilities Section 1861 (j) (11) of the Social Security Act (as redesignated Ante, pp. 1412, 1424. by section 234(d) of this Act) is amended by inserting before the semicolon at the end thereof the following: “, except that the Secretary shall not require as a condition of participation that medical social services be furnished in any such institution”. Sec. 266. refund of excess premiums under medicare Section 1870 of the Social Security Act is amended by adding at the end thereof the following new subsection: “(g) If an individual, who is enrolled under section 1818(c) of the Ante, p. 1374. 42 USC 1395p. Social Security Act or under section 1837, dies, and premiums with respect to such enrollment have been received with respect to such individual for any month after the month of his death, such premiums shall be refunded to the person or persons determined by the Secretary under regulations to have paid such premiums or if payment for such premiums was made by the deceased individual before his death, to the legal representative of the estate of such deceased individual, if any. If there is no person who meets the requirements of the preceding sentence such premiums shall be refunded to the person or persons in the priorities specified in paragraphs (2) through (7) of subsection (e).” Sec. 267. waiver of registered nurse requirement in skilled nursing facilities in rural areas Section 1861 (j) of the Social Security Act, as amended by Ante, pp. 1412, 1424. sections 234(d) and 246(b) of this Act, is further amended by adding at the end thereof the following new sentence: “To the extent that paragraph (6) of this subsection may be deemed to require that any skilled nursing facility engage the services of a registered professional nurse for more than 40 hours a week, the Secretary is authorized to waive such requirement if he finds that— “(A) such facility is located in a rural area and the supply of skilled nursing facility services in such area is not sufficient to meet the needs of individuals residing therein, “(B) such facility has one full-time registered professional nurse who is regularly on duty at such facility 40 hours a week, and “(C) such facility (i) has only patients whose physicians have indicated (through physicians’ orders or admission notes) that each such patient does not require the services of a registered nurse or a physician for a 48-hour period, or (ii) has made arrangements for a registered professional nurse or a physician to spend such time at such facility as may be indicated as necessary by the physician to provide necessary skilled nursing services on days when the regular full-time registered professional nurse is not on duty.” Sec. 268. exemption of christian science sanatoriums from certain nursing home requirements under medicaid (a) Section 1902(a) of the Social Security Act is amended by adding at the end thereof the following new sentence: “For purposes of paragraphs (9) (A), (29), (31), and (33), and of section Ante, p. 1415. 1903(i) (4), the terms ‘skilled nursing home’ and ‘nursing home’ do not include a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts.” (b) Section 1908(g) (1) of such Act is amended by inserting after 81 Stat. 908. 42 USC 1396g. “Secretary” the following: “, but does not include a Christian Science sanatorium operated, or listed and certified, by the First Church of Christ, Scientist, Boston, Massachusetts”. (c) The amendments made by this section shall be effective on the Effective date. date of the enactment of this Act. Sec. 269. requirements for nursing home administrators Section 1908(d) of the Social Security Act is amended by striking out “No State” and inserting in lieu thereof the following; “No State shall be considered to have failed to comply with the provisions of section 1902(a) (29) because the agency or board of such 42 USC 1396a. State (established pursuant to subsection (b)) shall have granted any waiver, with respect to any individual who, during all of the three calendar years immediately preceding the calendar year in which the requirements prescribed in section 1902(a) (29) are first met by the State, has served as a nursing home administrator, of any of the standards developed, imposed, and enforced by such agency or board pursuant to subsection (c). No State”. Sec. 271. increase in limitation on payments to puerto rico and the virgin islands for medical assistance (a) Section 1108(c)(1) of the Social Security Act is 42 USC 1308. amended by striking out “$20,000,000” and inserting in lieu thereof “$30,000,000”. (b) Section 1108(c)(2) of such Act is amended by striking out “$650,000” and inserting in lieu thereof “$1,000,000”. (c) The amendments made by subsections (a) and (b) shall apply Effective date. with respect to fiscal years beginning after June 30, 1971. Sec. 271A. medical assistance in puerto rico, the virgin islands, and guam (a) Section 227 (b) of the Social Security Amendments of 1967 is amended by striking out “June 30, 1972” and inserting in 81 Stat. 903. 42 USC 1396a note. Effective date. lieu thereof “June 30, 1975”. (b) The amendment made by subsection (a) shall be effective from and after July 1, 1972. Sec. 272. extension of title v to american samoa and the trust territory of the pacific islands (a) Section 1101(a)(1) of the Social Security Act is 42 USC 1301. amended by adding at the end thereof the following, new sentence: “Such term when used in title V also includes American Samoa and the Trust Territory of the Pacific Islands.” (b) Section 1108(d) of such Act is amended by inserting, after 42 USC 1308. “allot such smaller amount to Guam”, the following: “, American Samoa, and the Trust Territory of the Pacific Islands”. (c) The amendments made by this section shall apply with respect Effective date. to fiscal years beginning after June 30, 1971. Sec. 273. inclusion of chiropractor services under medicare (a) Section 1861 (r) of the Social Security Act (as amended by sections 256(b) and 264(a) of this Act) is further Ante, p. 1449. amended by— (1) striking out “or (4)” and inserting in lieu thereof “(4)”, and (2) inserting before the period at the end thereof the following “, or (5) a chiropractor who is licensed as such by the State (or in a State which does not license chiropractors as such, is legally authorized to perform the services of a chiropractor in the jurisdiction in which he performs such services), and who meets uniform minimum standards promulgated by the Secretary, but 42 USC 1395x. only for the purpose of sections 1861(s) (1) and 1861 (s) (2) (A) and only with respect to treatment by means of manual manipulation of the spine (to correct a subluxation demonstrated by X-ray to exist) which he is legally authorized to perform by the State or jurisdiction in which such treatment is provided”. (b) The amendments made by this section shall be effective with respect to services furnished after June 30, 1973. Sec. 274. miscellaneous technical, and clerical amendments (a) Clause (A) of section 1902(a) (26) of the Social 42 USC 1396a. Security Act is amended by striking out “evaluation” and inserting in lieu thereof “evaluation)”, and by striking out “care)” and inserting in lieu thereof “care”. (b) Section 1908(d) of such Act is amended by striking out “subsection (b) (1)” and inserting in lieu thereof “subsection (c) (1)”. Sec. 275. chiropractors’ services under medicaid (a) Section 1905 of the Social Security Act is amended by adding after subsection (f), as added by section 247 of this Act, the following new subsection: “(g) If the State plan includes provision of chiropractors’ services, such services include only— “(1) services provided by a chiropractor (A) who is licensed as such by the State and (B) who meets uniform minimum standards promulgated by the Secretary under section 1861 (r) (5); and “(2) services which consist of treatment by means of manual manipulation of the spine which the chiropractor is legally authorized to perform by the State.” (b) The amendment made by this section shall be effective with respect to services furnished after June 30, 1973. Sec. 276. services of podiatric interns and residents under part a of medicare (a) Section 1861(b)(6), as added by section 227(a) of this Act, is amended by deleting “; or” and inserting in lieu thereof the following: “, or in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of podiatry, approved by the Council on Podiatry Education of the American Podiatry Association; or”. (b) The amendment made by this section shall apply with respect, to accounting periods beginning after December 31, 1972. Sec. 277. use of consultants for extended care facilities Section 1864(a) of the Social Security Act is amended by adding at the end the following new sentence: “Any State agency which has such an agreement may (subject to approval of the Secre-tary) furnish to an extended care facility, after proper request by such facility, such specialized consultative services (which such agency is able and willing to furnish in a manner satisfactory to the Secretary) as such facility may need to meet one or more of the conditions specified in section 1861(j). Any such services furnished by a State agency 42 USC 1395x. shall be deemed to have been furnished pursuant to such agreement.” Sec. 278. designation of extended care facilities and skilled nursing homes as skilled nursing facilities (a) The following sections of the Social Security Act are amended by striking out “extended care facility”, “extended care facilities”, “skilled nursing home”, and “skilled nursing homes” each time they appear therein and inserting in lieu thereof “skilled nursing facility” or “skilled nursing facilities”, as the case may be, and by changing “an” to “a” as appropriate: (1) section 1814(a) (2) (C); Ante, p. 1425. (2) section 1814(a) (6); 42 USC 1395f. (3) section 1814(a) (7): (4) section 1861(a) (2); 42 USC 1395x. (5) section 1861(h); (6) section 1861 (i); (7) section 1861(j); (8) section 1861 (k); (9) section 1861(1); (10) section 1861 (m) (7); (11) section 1861 (n); (12) section 1861(u); (13) section 1861(v) (3); (14) section 1861 (w); (15) section 1861 (y); (16) section 1864(a); 42 USC 1395aa. (17) section 1866; 42 USC 1395cc. (18) section 1902(a) (13); 42 USC 1396a. (19) section 1902(a) (26); (20) section 1902(a) (28); Ante, p. 1424. (21) section 1905(a) (4); 42 USC 1396d. (22) section 1905(a) (5); (23) section 1905(a) (14); and Ante, p. 1459. (24) section 1121. 42 USC 1320a. (b) The following sections of the Social Security Act, as amended or added by the provisions of this Act, are further amended by striking out the terms “extended care facility”, “extended care facilities”, “skilled nursing home”, and “skilled nursing homes” each time they appear therein and inserting in lieu thereof “skilled nursing facility” or “skilled nursing facilities”, as the case may be, and by changing “an” to “a” as appropriate: (1) section 1903 (g) and (h) of the Social Security Act as added by section 207 of this Act; (2) section 402(a) (1) (E) of the Social Security Amendments of 1967 as amended by section 222 of this Act; (3) section 1876 of the Social Security Act as added by section 226(a) of this Act; (4) section 1814(h) of such Act as added by section 228(a) of this Act; (5) section 1903(h) of such Act as added by section 207(a)(1) of this Act; (6) section 1861 (z) of such Act as added by section 234(f) of this Act; (7) section 1903(i) (4) of such Act. as added by section 237(a) of this Act; (8) section 1877(c) of such Act as added by section 242(b) of this Act; (9) section 1909(c) of such Act as added by section 242(c) of this Act; (10) section 1861 (i) of such Act as amended by section 248 of this Act: (11) section 1861 (v) (1) (E) of such Act as added by section 249(b) of this Act; (12) section 1910 of such Act as added by section 249A of this Act; (13) section 1861(j) of such Act as amended by section 267 of this Act; (14) section 1902(a) of such Act as amended by section 268 of this Act; (15) section 1864(a) of such Act as amended by section 277 of this Act; (16) section 1903 (j) of such Act as added by section 225 of this Act; (17) section 1814(h) of such Act as added by section 228(a) of this Act; and (18) section 1866(a)(1) of such Act as amended by section 249A of this Act. Sec. 279. direct laboratory billing of patients (a) Section 1833(a) (1) of the Social Security Act (as Ante, p. 1384. amended by section 211(c)(4) of this Act) is further amended by— (1) striking out “and” before “(C)”; (2) inserting before the semicolon at the end thereof the following: “, and (D) with respect to diagnostic tests performed in a laboratory for which payment is made under this part to the laboratory, the amounts paid shall be equal to 100 percent of the negotiated rate for such tests (as determined pursuant to subsection (g) of this section)”. (b) Section 1833 of such Act is amended by adding at the end thereof the following subsection: “(g) With respect to diagnostic tests performed in a laboratory for which payment is made under this part to the laboratory, the Secretary is authorized to establish a payment rate which is acceptable to the laboratory and which would be considered the full charge for such tests. Such negotiated rate shall be limited to an amount not in excess of the total payment that would have been made for the services in the absence of such a rate.” Sec. 280. clarification of meaning of “physicians’ services” under title xix Section 1905(a) (5) of the Social Security Act is amended by inserting “furnished by a physician (as defined in section 1861 (r) (1))” after “physicians’ services”. Sec. 281. limitation on adjustment or recovery of incorrect payments under the medicare program (a) (1) Section 1870(b)(1) of the Social Security Act is amended by— (A) inserting “(A)” after “the Secretary determines”; and (B) inserting at the end of paragraph (1) the following: “(B) that such provider of services or other person was without fault with respect to the payment of such excess over the correct amount, or”. (2) Section 1870(b) of such Act is amended by adding at the end 42 USC 1395gg. the following new sentence: “For purposes of clause (B) of paragraph (1), such provider of services or such other person shall, in the absence of evidence to the contrary, be deemed to be without fault if the Secretary’s determination that more than such correct amount was paid was made subsequent to the third year following the year in which notice was sent to such individual that such amount had been paid; except that the Secretary may reduce such three-year period to not less than one year if he finds such reduction is consistent with the objectives of this title.” (b) Section 1870(c) of such Act (as amended by section 261 of this Act) is further amended by— (1) inserting “or title XVIII” after “title II”, and (2) adding at the end the following new sentence: “Adjustment or recovery of an incorrect, payment (or only such part of an incorrect payment as the Secretary determines to be inconsistent with the purposes of this title) against an individual who is without fault shall be deemed to be against equity and good conscience if (A) the incorrect payment was made for expenses incurred for items or services for which payment may not be made under this title by reason of the provisions of paragraph (1) or (9) of section 1862 and (B) if the Secretary’s determination 42 USC 1395y. that such payment was incorrect was made subsequent to the third year following the year in which notice of such payment was sent to such individual; except that the Secretary may reduce such three-year period to not less than one year if he finds such reduction is consistent with the objectives of this title.” (c) Section 1866(a)(1) of such Act (as amended by section 227(d)(2) of this Act) is further amended by— (1) redesignating subparagraph (B) as subparagraph (C), and (2) inserting after subparagraph (A) the following new subparagraph: “(B) not to charge any individual or any other person for items or services for which such individual is not entitled to have payment made under this title because payment for expenses incurred for such items or services may not be made by reason of the provisions of paragraph (1) or (9), but only if (i) such individual was without fault in incurring such expenses and (ii) the Secretary’s determination that such payment may not be made for such items and services was made after the third year following the year in which notice of such payment was sent to such individual; except that the Secretary may reduce such three-year period to not less than one year if he finds such reduction is consistent with the objectives of this title, and” (d) Section 1842(b) (3) (B) (ii) of such Act (as amended by section 211(c) (3) of this Act) is further amended by— (1) inserting “(I)” after “of which”; and (2) inserting after “service” the following: “and (II) the physician or other person furnishing such service agrees not to charge for such service if payment may not be made therefor by reason of the provisions of paragraph (1) of section 1862, and if the individual to whom such service was furnished was without fault in incurring the expenses of such service, and if the Secretary’s determination that payment (pursuant to such assignment) was incorrect and was made subsequent to the third year following the year in which notice of such payment was sent to such individual; except that the Secretary may reduce such three-year period to not less than one year if he finds such reduction is consistent with the objectives of this title.” (e) Section 1814(a) (1) of such Act is amended to read as follows: “(1) written request, signed by such individual, except in cases in which the Secretary finds it impracticable for the individual to do so, is filed for such payment in such form, in such manner, and by such person or persons as the Secretary may by regulation prescribe, no later than the close of the period of 3 calendar years following the year in which such services are furnished (deeming any services furnished in the last 3 calendar months of any calendar year to have been furnished in the succeeding calendar year) except that where the Secretary deems that efficient administration so requires, such period may be reduced to not less than 1 calendar year;”. (f) Section 1835(a) (1) of such Act is amended to read as follows: “(1) written request, signed by such individual, except in cases in which the Secretary finds it impracticable for the individual to do so, is filed for such payment in such form, in such manner and by such person or persons as the Secretary may by regulation prescribe, no later than the close of the period of 3 calendar years following the year in which such services are furnished (deeming any services furnished in the last. 3 calendar months of any calendar year to have been furnished in the succeeding calendar year) except that, where the Secretary deems that efficient administration so requires, such period may be reduced to not less than 1 calendar year; and”. (g) The provisions of subsection (a)(1) shall apply with respect to notices of payment sent to individuals after the date of enactment of this Act. The provisions of subsections (a)(2), (b), (c), and (d) shall apply in the case of notices sent to individuals after 1968. The Provisions of subsections (e) and (f) shall apply in the case of services furnished (or deemed to have been furnished) after 1970. Sec. 283. coverage of outpatient speech pathology services under medicare (a) Section 1861 (p) of the Social Security Act is amended by adding at the end thereof the following new sentence: “The term ‘outpatient physical therapy services’ also includes speech pathology services furnished by a provider of services, a clinic, rehabilitation agency, or by a public health agency, or by others under an arrangement with, and under the supervision of, such provider, clinic, rehabilitation agency, or public health agency to an individual as an outpatient, subject to the conditions prescribed in this subsection.”. (b) Section 1835(a) (2) of such Act (as amended by section 251 of this Act) is further amended— (1) by striking out the period at the end of subparagraph (C) and inserting in lieu thereof “; and”; and (2) by adding after subparagraph (C) the following new subparagraph: “(D) in the case of outpatient speech pathology services, (i) such services are or were required because the individual needed speech pathology services (ii) a plan for furnishing such services has been established and is periodically reviewed by a physician, and (iii) such services are or were furnished while the individual is or was under the care of a physician.”. (c) The provisions of this section shall apply with respect to services rendered after December 31, 1972. Sec. 287. termination of medical assistance advisory council (a) Section 1906 of the Social Security Act is repealed. Repeal. 42 USC 1396e. Effective date. (b) The provisions of subsection (a) shall become effective on the first day of the third calendar month following the month in which this Act is enacted. Sec. 288. modification of the role of the health insurance benefits advisory council (a) Section 1867 (a) of the Social Security Act is amended 42 USC 1395dd. to read as follows: “(a) There is hereby created a Health Insurance Benefits Advisory Council which shall consist of 19 persons, not otherwise in the employ of the United States, appointed by the Secretary without regard to the provisions of title 5. United States Code, governing appointments 5 USC 101 et seq. in the competitive services. The Secretary shall from time to time appoint one of the members to serve as Chairman. The members shall include persons who are outstanding in fields related to hospital, medical, and other health activities, persons who are representative of organizations and associations of professional personnel in the field of medicine, and at least one person who is representative of the general public. Each member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term. A member shall not be eligible to serve continuously for more than two terms. Members Per diem and travel expenses. of the Advisory Council, while attending meetings or conferences thereof or otherwise serving on business of the Advisory Council, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding $100 per day, including traveltime, and while so serving away from their homes or regular places of business they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for persons in the Government service employed intermittently. The Advisory Council shall meet as the Secretary deems necessary, but not less than annually.” (b) Section 1867(b) of such Act is amended to read as follows: “(b) It shall be the function of the Advisory Council to provide advice and recommendations for the consideration of the Secretary on matters of general policy with respect to this title and title XIX.” 42 USC 1395, 1396. (c) Section 1867 of such Act is further amended by striking out subsection (c). Sec. 289. authority of secretary to administer oaths in medicare proceedings Section 1874 of the Social Security Act is amended by 42 USC 1395kk. adding at the end thereof the following new subsection: “(c) In the course of any hearing, investigation, or other proceeding that he is authorized to conduct under this title, the Secretary may administer oaths and affirmations.” Sec. 290. withholding of federal payments under medicaid with respect to certain health care facilities Section 1903 of the Social Security Act is amended by adding Ante, pp. 1396, 1454. after subsection (i) thereof the following new subsection: “(j) (1) Notwithstanding the preceding provisions of this section, no payment shall be made to a State (except as provided under this subsection) with respect to expenditures incurred by it for services provided by any institution during any period that an order for suspension of payment (as authorized by this subsection) is effective with respect to such institution. “(2) The Secretary may issue a suspension of payment order with respect to any institution if— “(A) such institution (i) does not (at the time such order is issued) have in effect an agreement with the Secretary which is 42 USC 1395cc. entered into pursuant to section 18(56; and (ii) did (prior to the time such order is issued) have in effect such an agreement; and “(B) (i) the Secretary’ has been unable to collect (or make satisfactory arrangement for the collection of) amounts due on account of overpayments made to such institution under title 42 USC 1395. XVIII; or “(ii) the Secretary has been unable to obtain from such institution the data and information necessary to enable him to determine the amount (if any) of the overpayments made to such institution under title XVIII. “(3) Whenever the Secretary issues any order for suspension of payment under this subsection with respect to any institution, he shall submit a notice of such order to the single State agency (referred to in section 1902(a) (5)) of each State which he has reason to believe does or may utilize the services of such institution in providing medical assistance under a plan approved under this title. “(4) Any order for suspension of payment issued with respect to any institution under this subsection shall become effective, in the case of any state plan approved under this title, on the 60th day after the date the State agency (referred 42 USC 1396a. to in section 1902(a) (5)) administering or supervising the administration of such plan receives notice of such older submitted pursuant to paragraph (3). Any such order shall cease to be effective at such time as the Secretary is satisfied that the institution is participating in substantial negotiations which seek to remedy the conditions which gave rise to his order of suspension of payments, or that the amounts (referred to in paragraph (2)) are no longer due from such institution or that a satisfactory arrangement has been made for the payment by such institution of any such amounts. Upon the determination of the Secretary that any such order with respect to any such institution shall cease to be effective, he shall forthwith notify each State agency to which he has theretofore submitted notice under paragraph (3) with respect to such institution. “(5) Whenever any order which has been issued by the Secretary under the preceding provisions of this subsection with respect to an institution ceases to be effective, any payment to which any State would (except for the preceding provisions of this subsection) have been entitled under this section on account of services provided by such institution shall be made to such State for the month in which such order ceases to be effective.” Sec. 292. intermediate care services in states which do not have a medicaid program Section 4(d) of Public Law 92–223 (approved December 85 Stat. 810. 42 USC 1396a note. 28, 1971) is amended by inserting immediately before the period at the end thereof the following: “; except that the repeal made by subsection (c) shall not become effective in the case of any State, which on January 1, 1972 did not have in effect a State plan approved 42 USC 1396. under title XIX of the Social Security Act, until the first day of the first month (occurring after such date) that such State does have in effect a State plan approved under such title”. Sec. 293. required information relating to excess medicare tax payments by railroad employees (a) Section 6051(a) of the Internal Revenue Code of 1954 68A Stat. 747. 26 USC 6051. (relating to requirement of receipts for employees) is amended— (1) by striking out “section 3101, 3201, or 3402” in the matter preceding paragraph (1) and inserting in lieu thereof “section 3101 or 3402”; (2) by inserting “and” at the end of paragraph (5), and by striking out the comma at the end of paragraph (6) and inserting in lieu thereof a period; and (3) by striking out paragraphs (7) and (8). (b) Section 6051(c) ‘of such Code (relating to additional requirements (is amended by striking out “sections 3101 and 3201” in the second sentence and inserting in lieu thereof “section 3101”. (c) Section 6051 of such Code (relating to receipts for employees) is amended by adding at the end thereof the following new subsection: “(e) Railroad Employees.— “(1) Additional requirement.— Every person required to deduct and withhold tax under section 3201 from an employee shall include on or with the statement required to be furnished such employee under subsection (a) a notice concerning the provisions of this title with respect to the allowance of a credit or refund of the tax on wages imposed by section 3101 (b) and the tax on compensation imposed by section 3201 or 3211 which is treated as a tax on wages imposed by section 3101 (b). “(2) Information to be supplied to employees.— Each person required to deduct and withhold tax under section 3201 during any year from an employee who has also received wages during such year subject to the tax imposed by section 3101(b) shall, upon request of such employee, furnish to him a written statement showing— “(A) the total amount of compensation with respect to which the tax imposed by section 3201 was deducted, “(B) the total amount deducted as tax under section 3201, and “(C) the portion of the total amount deducted as tax under section 3201 which is for financing the cost of hospital insurance under part A of title XVIII of the Social Security Act.” 42 USC 1395c. “(d) The amendments made by this section shall apply in respect Effective date. to remuneration paid after December 31, 1971. Sec. 294. appointment and confirmation of administrator of social and rehabilitation service Appointments made on or after the date of enactment of this Act to the office of Administrator of the Social and Rehabilitation Service, within the Department of Health, Education, and Welfare, shall be made by the President, by and with the advice and consent of the Senate. Sec. 295. repeal of section 1903(b)(1) Section 1903(b) (1) of the Social Security Act is repealed. 42 USC 1396b. Sec. 297. coverage under medicaid of intermediate care furnished in mental and tuberculosis institutions (a) Section 1905(a) (14) of the Social Security Act is 42 USC 1396d. amended to read as follows: “(14) inpatient hospital services, skilled nursing home services, and intermediate care facility services for individuals 65 years of age or over in an institution for tuberculosis or mental diseases;” “(b) The amendment, made by this section shall apply with respect to services furnished after December 31, 1972. Sec. 298. independent review of intermediate care facility patients Section 1902(a) (31) (A) of the Social Security Act, as 85 Stat. 809. 42 USC 1396a. added by Public Law 92–223, is amended by striking out the phrase “which provides more than a minimum level of health care services.” Sec. 299. intermediate care, maintenance of effort in public institutions Section 1905(d) (3) of the Social Security Act, as added 42 USC 1396d. by Public Law 92–223, is amended to read as follows: “(3) the State or political subdivision responsible for the operation of such institution has agreed that the non-Federal expenditures in any calendar quarter prior to January 1, 1975, with respect to services furnished to patients in such institution (or distinct part thereof) in the State will not, because of payments made under this title, be reduced below the average amount expended for such services in such institution in the four quarters immediately preceding the quarter in which the State in which such institution is located elected to make such services available under its plan approved under this title.” Sec. 299A. disclosure of ownership of operations of intermediate care facilities Section 1902(a) of the Social Security Act, as amended by sections 236, 239, and 255 of this Act, is further amended— (1) by striking out “and” at the end of paragraph’ (33); (2) by striking out the period at the end of paragraph (34) and inserting in lieu thereof “; and”; and (3) by inserting after paragraph (34) the following new paragraph: “(35) effective January 1, 1973, provide that any intermediate care facility receiving payments under such plan must supply to the licensing agency of the State full and complete information as to the identity (A) of each person having (directly or indirectly) an ownership interest of 10 per centum or more in such intermediate care facility, (B) in case an intermediate care facility is organized as a corporation, of each officer and director of the corporation, and (C) in case an intermediate care facility is organized as a partnership, of each partner; and promptly report any changes which would affect the current accuracy of the information so required to be supplied.” Sec. 299B. treatment in mental hospitals for individuals under age 21 (a) Section 1905(a) of the Social Security Act is amended— (1) by striking the word “and” in paragraph (15); (2) by redesignating paragraph (15) as paragraph (17); (3) by redesignating paragraph (16) as paragraph (15); (4) by inserting after paragraph (15) the following new paragraph: “(16) effective January 1, 1973, inpatient psychiatric hospital services for individuals under 21, as defined in subsection (e);”. (b) Section 1905 of such Act, as amended by sections 212(a), 247 (b) and 275(e) of this Act, is further amended by adding after subsection Ante, p. 1452. (g) the following new subsection: “(h) (1) For purposes of paragraph (16) of subsection (a), the term Definition. ‘inpatient psychiatric hospital services for individuals under age 21’ includes only— “(A) inpatient services which are provided in an institution which is accredited as a psychiatric hospital by the Joint Commission on Accreditation of Hospitals; “(B) inpatient services which, in the case of any individual, involves active treatment (i) which meets such standards as may be prescribed pursuant to title XVIII in regulations by the Secretary, 42 USC 1395. and (ii) which a team, consisting of physicians and other personnel qualified to make determinations with respect to mental health conditions and the treatment thereof, has determined are necessary on an inpatient basis and can reasonably be expected to improve the condition, by reason of which such services are necessary, to the extent that eventually such services will no longer be necessary; and “(C) inpatient services which, in the case of any individual, are provided prior to (A) the date such individual attains age 21, or (B) in the case of an individual who was receiving such services in the period immediately preceding the date on which he attained age 21, (i) the date such individual no longer requires such services, or (ii) if earlier, the date such individual attains age 22; “(2) Such term does not include services provided during any calendar quarter under the State plan of any State if the total amount of the funds expended, during such quarter, by the State (and the political subdivisions thereof) from non-Federal funds for inpatient services included under paragraph (e)(1), and for active psychiatric care and treatment provided on an outpatient basis for eligible mentally ill children, is less than the average quarterly amount of the funds expended, during the 4-quarter period ending December 31, 1971, by the State (and the political subdivisions thereof) from non-Federal funds for such services,” (c) Section 1905(a) is further amended by striking out, in the part which follows paragraph (17) (as redesignated by subsection (a) of this section), “except that” and inserting in lieu thereof “except as otherwise, provided in paragraph (16),”. Sec. 299D. public disclosure of information concerning survey reports of an institution (a) Section 1864(a) of the Social Security Act is Ante, pp, 1452–1454. amended by adding at the end thereof the following new sentence: “Within 90 days following the completion of each survey of any health care facility, laboratory, clinic, agency, or organization by the appropriate State or local agency described in the first sentence of this subsection, the Secretary shall make public in readily available form and place the pertinent findings of each such survey relating to the compliance of each such health care facility, laboratory’, clinic, agency, or organization with (1) the statutory conditions of participation imposed under this title and (2) the major additional conditions which the Secretary finds necessary in the interest of health and safety of individuals who are furnished care or services by any such facility, laboratory, clinic, agency, or organization.”. (b) Section 1902(a) of the Social Security Act, as amended by sections Ante, p. 1460. 236, 239, 255, and 299A of this Act, is further amended— (1) by striking out “and” at the end of paragraph (35); (2) by striking out the period at the end of paragraph (36) and inserting in hen thereof “; and”; and (3) by inserting after paragraph (36) the following new paragraph: “(37) provide that within 90 days following the completion of each survey of any health care facility, laboratory, agency, clinic, or organization, by the appropriate State agency described in paragraph (9), such agency shall (in accordance with regulations of the Secretary) make public in readily available form and place the pertinent findings of each such survey relating to the compliance of each such health care facility, laboratory, clinic, agency, or organization with (A) the statutory conditions of participation imposed under this title, and (B) the major additional conditions which the Secretary finds necessary in the interest of health and safety of individuals who are furnished care or services by any such facility, laboratory, clinic, agency, or organization. (c) The provisions of this section shall be effective beginning January 1, 1973, or within 6 months following the enactment of this Act, whichever is later. Sec. 299E. family planning services mandatory under medicaid (a) Section 1903(a) of the Social Security Act, as Ante, p. 1428. amended by sections 235 and 249B of this Act, is further amended by redesignating paragraph (5) as paragraph (6), and by inserting after paragraph (4) the following new paragraph: “(5) an amount equal to 90 per centum of the sums expended during such quarter (as found necessary by the Secretary for the proper and efficient administration of the plan) which are attributable to the offering, arranging, and furnishing (directly or on a contract basis) of family planning services and supplies;”. (b) Section 1905(a)(4) of the Social Security Act is amended by adding after clause (B) the following: “and (C) family planning services and supplies furnished (directly or under arrangements with others) to individuals of child-bearing age (including minors who can be considered to be sexually active) who are eligible under the State plan and who desire such services and supplies.;”. (c) Section 402(a) (15) (B) of such Act is amended, effective January 1, 1973, (1) by adding after “in all appropriate cases” the following: “(including minors who can be considered to be sexually active)”, and (2) by adding after “family planning services are offered them” the following: “and are provided promptly (directly or under arrangements with others) to all individuals voluntarily requesting such services”. (d) Section 403 of such Act is amended by adding at the end thereof the following new sections: “(e) Notwithstanding any other provision of subsection (a), with respect to expenditures during any calendar quarter beginning after December 31, 1972 (as found necessary by the Secretary for the proper and efficient administration of the plan) which are attributable to the offering, arranging, and furnishing, directly or on a contract basis, of family planning services and supplies, the amount payable to any State under this part shall be 90 per centum of such expenditures. “(f) Notwithstanding’ any other provision of this section, the amount payable to any State under this part for quarters in a fiscal year shall with respect to quarters in fiscal years beginning after June 30, 1973, be reduced by 1 per centum (calculated without regard to any reduction under section 403(g)) of such amount if such State— Infra. “(1) in the immediately preceding fiscal year failed to carry out the provisions of section 402(a) (15) (B) as pertain to requiring Ante, p. 1462. the offering and arrangement for provision of family planning services; or “(2) in the immediately preceding fiscal year (but, in the case of the fiscal year beginning July 1, 1972, only considering the third and fourth quarters thereof), failed to carry out the provisions of section 402(a) (15) (B) of the Social Security Act with respect to any individual who, within such period or periods as the Secretary may prescribe., has been an applicant for or recipient of aid to families with dependent children under the plan of the State approved under this part.” Sec. 299F. penalty for failure to provide child health screening services under medicaid Section 403 of the Social Security Act is amended by adding at the end thereof the following: “(g) Notwithstanding any other provision of this section, the amount payable to any State under this part for quarters in a fiscal year shall with respect to quarters in fiscal years beginning after June 30, 1974, be reduced by 1 per centum (calculated without regard to any reduction under section 403(f)) of such amount if such State Supra. fails to— “(1) inform all families in the State receiving aid to families with dependent children under the plan of the State approved under this part of the availability of child health screening services under the plan of such State approved under title XIX, Ante, p. 1426. “(2) provide or arrange for the provision of such screening services in all cases where they are requested, or “(3) arrange for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services.” Sec. 299I. chronic renal disease considered to constitute disability Effective with respect to services provided on and after Effective date. July 1, 1973, section 226 of the Social Security Act (as amended by section 201(b)(5) of this Act) is amended by redesignating subsection Ante, p. 1372. (e) as subsection (f), and by inserting after subsection (d) the following new subsection: “(e) Notwithstanding the foregoing provisions of this section, every individual who— “(1) has not attained the age of 65; “(2) (A) is fully or currently insured (as such terms are defined in section 214 of this Act), or (B) is entitled to monthly insurance Ante, p. 1341. 42 USC 401. benefits under title II of this Act, or (C) is the spouse or dependent child (as defined in regulations) of an individual who is fully or currently insured, or (D) is the spouse or dependent child (as defined in regulations) of an individual entitled to monthly insurance benefits under title II of this Act; and “(3) is medically determined to have chronic renal disease and who requires hemodialysis or renal transplantation for such disease; shall be deemed to be disabled for purposes of coverage under parts A and B of Medicare subject to the deductible, premium, and copayment 42 USC 1395. provisions of title XVIII. “(f) Medicare eligibility on the basis of chronic kidney failure shall begin with the third month after the month in which a course of renal dialysis is initiated and would end with the twelfth month after the month in which the person has a renal transplant or such course of dialysis is terminated. “(g) The Secretary is authorized to limit reimbursement under Medicare for kidney transplant and dialysis to kidney disease treatment centers which meet such requirements as he may by regulation prescribe: Provided, That such requirements must include at least requirements for a minimal utilization rate for covered procedures and for a medical review board to screen the appropriateness of patients for the proposed treatment procedures.” Sec. 299K. elimination of coinsurance payment with respect to home health services under part b of medicare (a) Section 1833(a)(2) of the Social Security Act is amended by striking out “80 percent” and inserting in lieu thereof “with respect to home health services, 100 percent, and with respect to other services, 80 percent.” (b) The amendment made by subsection (a) shall apply to services furnished by home health agencies in accounting periods beginning after December 31, 1972. Sec. 299L. certification of intermediate care facilities and skilled nursing facilities located on an indian reservation (a) Section 1905(c) of the Social Security Act, as added 85 Stat. 809. 42 USC 1396d. by Public Law 92–223, is amended by adding after the penultimate sentence thereof the following: “The term ‘intermediate care facility’ also includes any institution which is located in a State on an Indian reservation and is certified by the Secretary as meeting the requirements of clauses (2) and (3) of this subsection and providing the care and services required under clauses (1).”. (b) Section 1905 of the Social Security Act, as amended by this Act, is amended by adding at the end thereof the following new subsection: “(h) For purposes of this title, the term ‘skilled nursing facility’ also includes any institution which is located in a State on an Indian reservation and is certified by the Secretary as being a qualified skilled 42 USC 1395x. nursing facility by meeting the requirements of section 1861(j).” Sec. 299O. determinations and appeals (a) Section 1869(b) of the Social Security Act is amended to read as follows: “(b) (1) Any individual dissatisfied with any determination under subsection (a) as to— “(A) whether he meets the conditions of section 226 of this Act 79 Stat. 333; 81 Stat. 854. 42 USC 426a. 42 USC 1395j. Ante, p. 1374. or section 103 of the Social Security Amendments of 1965, or “(B) whether he is eligible to enroll and has enrolled pursuant to the provisions of part B of this title, or section 1818, or section 1819, or “(C) the amount of benefits under part A (including a determination where such amount is determined to be zero) shall be entitled to a hearing thereon by the Secretary to the same extent as is provided in section 205(b) and to judicial review of the Secretary’s 42 USC 405. final decision after such hearing as is provided in section 205 (g). “(2) Notwithstanding the provisions of subparagraph (C) of paragraph (1) of this subsection, a hearing shall not be available to an individual by reason of such subparagraph (C) if the amount in controversy is less than $100; nor shall judicial review be available to an individual by reason of such subparagraph (C) if the amount in controversy is less than $1,000.” (b) (1) The provisions of subparagraphs (A) and (B) of section Effective dates. 1869(b) (1) of the Social Security Act, as amended by subsection (a) of this section, shall be effective on the date of enactment of this Act. (2) The provisions of paragraph (2) and of subparagraph (C) of paragraph (1) of section 1869(b) of the Social Security Act, as amended by subsection (a) of this section, shall be effective with respect to any claims under part A of title XVIII of such Act, filed— 42 USC 1395c. (A) in or after the month in which this Act is enacted, or (B) before the month in which this Act is enacted, but only if a civil action with respect to a final decision of the Secretary of Health, Education, and Welfare on such claim has not been commenced under such section 1869(b) before such month.

2. 1977

   Pub. L. 95–210 § 2(d) · 91 Stat. 1485

   1. Substituted · 42 U.S.C. § 1396i

      Pub. L. 95–210 substituted “facilities and of rural health clinics” for “facilities” in section catchline

   2. Redesignated · 42 U.S.C. § 1396i

      Pub. L. 95–210 redesignated existing subsecs. (a) and (b) as (a)(1) and (2), respectively

   3. Added · 42 U.S.C. § 1396i

      Pub. L. 95–210 added subsec. (b)

   Source evidence

   Code amendment note
   Pub. L. 95–210 substituted “facilities and of rural health clinics” for “facilities” in section catchline, redesignated existing subsecs. (a) and (b) as (a)(1) and (2), respectively, and added subsec. (b).

   Enacted provision · exact public law section
   (d) Section 1910 of such Act is amended— 42 USC 1396i. (1) by amending the heading to read as follows: “certification and approval of skilled nursing facilities and of rural health clinics”; (2) by striking out “(a)” and inserting in lieu thereof “(a) (1)”; (3) by striking out “(b)” and inserting in lieu thereof “(2)”; and (4) by adding at the end thereof the following new subsection: Certification. “(b) Whenever the Secretary certifies a facility in a State to be qualified as a rural health clinic under title XVIII, such facility shall 42 USC 1395. be deemed to meet the standards for certification as a rural health clinic for purposes of providing rural health clinic services under this title. “(2) The Secretary shall notify the State agency administering the Approval. medical assistance plan of his approval or disapproval of any facility in that State which has applied for certification by him as a qualified rural health clinic.”.

3. 1980

   Pub. L. 96–499 title IX § 916(b)(2) · 94 Stat. 2599

   Added · 42 U.S.C. § 1396i(c)

   Pub. L. 96–499 added subsec. (c)

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 96–499 added subsec. (c).

   Enacted provision · exact public law section
   (2) Section 1910 of such Act is amended by adding at the end thereof the following new subsection: “(c) (1) The Secretary may cancel approval of any skilled nursing or intermediate care facility at any time if he finds on the basis of a determination made by him as provided in section 1902(a)(33)(B) that 42 USC 1396a. a facility fails to meet the requirements contained in section 1902(a)(28) or section 1905(c), or if he finds grounds for termination of 42 USC 1396d. 42 USC 1395cc. his agreement with the facility pursuant to section 1866(b). In that event the Secretary shall notify the State agency and the skilled nursing facility or intermediate care facility that approval of eligibility of the facility to participate in the programs established by this title and title XVIII shall be terminated at a time specified by the 42 USC 1395. Secretary. The approval of eligibility of any such facility to participate in such programs may not be reinstated unless the Secretary finds that the reason for termination has been removed and there is reasonable assurance that it will not recur. “(2) Any skilled nursing facility or intermediate care facility which Hearing and judicial review. is dissatisfied with a determination by the Secretary that it no longer qualifies as a skilled nursing facility or intermediate care facility for purposes of this title, shall be entitled to a hearing by the Secretary to the same extent as is provided in section 205(b) and to judicial review 42 USC 405. of the Secretary’s final decision after such hearing as is provided in section 205(g). Any agreement between such facility and the State agency shall remain in effect until the period for filing a request for a hearing has expired or, if a request has been filed, until a decision has been made by the Secretary; except that the agreement shall not be extended if the Secretary makes a written determination, specifying the reasons therefor, that the continuation of provider status constitutes an immediate and serious threat to the health and safety of patients, and the Secretary certifies that the facility has been notified of its deficiencies and has failed to correct them.”.

4. 1987

   Pub. L. 100–203 title IV § 4212(e)(3) · 101 Stat. 1330

   1. Struck · 42 U.S.C. § 1396i

      Pub. L. 100–203 struck out “skilled nursing facilities and” before “of rural” in section catchline

   2. Redesignated · 42 U.S.C. § 1396i

      Pub. L. 100–203 redesignated subsecs. (b) and (c) as (a) and (b), respectively

   3. Struck · 42 U.S.C. § 1396i

      Pub. L. 100–203 struck out former subsec. (a) which related to certification and approval of skilled nursing facilities

   Source evidence

   Code amendment note
   Pub. L. 100–203 struck out “skilled nursing facilities and” before “of rural” in section catchline, redesignated subsecs. (b) and (c) as (a) and (b), respectively, and struck out former subsec. (a) which related to certification and approval of skilled nursing facilities.

   Enacted provision · exact public law section
   (3) Section 1910 of such Act (42 U.S.C. 13961) is amended— (A) by striking “skilled nursing facilities and” in the heading, (B) by striking subsection (a), and (C) by redesignating subsections (b) and (c) as subsections (a) and (b) respectively.

5. 1988

   Medicare Catastrophic Coverage Act of 1988

   Pub. L. 100–360 § 411 · 102 Stat. 683

   1. Added · 42 U.S.C. § 1396i(b)(1)

      Pub. L. 100–360, § 411(l)(6)(F), as added by Pub. L. 100–485, § 608(d)(27)(J)

   2. Inserted · 42 U.S.C. § 1396i(b)(1)

      Pub. L. 100–360, § 411(l)(6)(F), as inserted “or section 1396r of this title” after “1396a(a)(28) of this title”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 100–360, § 411(l)(6)(F), as added by Pub. L. 100–485, § 608(d)(27)(J), inserted “or section 1396r of this title” after “1396a(a)(28) of this title”.

   Enacted provision · exact public law section
   SEC. 411. TECHNICAL CORRECTIONS TO CERTAIN HEALTH CARE PROVISIONS IN THE OMNIBUS BUDGET RECONCILIATION ACT OF 1987. (a) Reference to OBRA and Effective Dates.— (1) Reference.— In this section, the term “OBRA” refers to the Omnibus Budget Reconciliation Act of 1987 (Public Law 100–203). (2) Effective date.— Except as specifically provided in this section, the amendments made by this section, as they relate to a provision in OBRA, shall be effective as if they were included in the enactment of that provision in OBRA. (3) Ratification of enrollment corrections and printed enrollment.— (A) In general.— Except as provided in subparagraph (B), the enrollment corrections noted in footnotes numbered 9 through 72 of OBRA are hereby ratified and shall be considered to have been enacted as part of OBRA. The printed enrollment of title IV of OBRA, as prepared and printed under section 8004 of OBRA (including the footnote corrections described in subparagraph (B) and as incorporating the clarifications described in subparagraph (C)), shall be deemed to constitute title IV of OBRA as enacted. (B) Footnote corrections.— (i) With respect to the reference to which footnote 28 relates (101 Stat. 1330–81), the reference shall be deemed to have read “1320a–7b)”. (ii) With respect to the word to which footnote 30 relates (101 Stat. 1330–91), the word shall be deemed to have read “the”. (iii) With respect to the designation to which footnote 52 relates (101 Stat. 1330–151), the designation shall be deemed to have read “(F)”. (C) Clarifications of illegible matter.— (i) Section 1842(n)(1)(A) of the Social Security Act, as added by section 42 USC 1395u. 4051(a) of OBRA (101 Stat. 1330–93), is deemed to nave the phrase “the supplier’s reasonable charge to individuals enrolled under this part for the test” immediately after “or, if lower, the”. (ii) Section 1834(a)(7)(B)(i) of the Social Security Act, as 42 USC 1395m. inserted by section 4062(b) of OBRA (101 Stat. 1330–103), is deemed to have a reference to “1987” immediately after “December”. (b) Corrections Relating to Part 1 of Subtitle A of Title IV (Part A of the Medicare Program).— (1) Section 4002.— (A) Subclauses (III) and (IV) of section 1886(b)(3)(B)(i) of the Social Security Act, as amended by section 42 USC 1395ww. 4002(a) of OBRA, are amended by striking “other hospitals” and inserting “for hospitals located in other urban areas”. (B) Section 1886(b)(3)(B)(i)(IV) of the Social Security Act, as amended by section 4002(a) of OBRA, is amended by striking “percent” each place it appears and inserting “percentage points”. (C) Section 18860(b)(3)(B)(i)(V) of the Social Security Act, as amended by section 4002(a) of OBRA, is amended by inserting 42 USC 1395ww. “increase” after “market basket percentage”. (D) The second sentence of section 1886(d)(2)(D) of the Social Security Act, as amended by section 4002(b) of OBRA, is amended by striking “the publication described in subsection (e)(5)(B)” and inserting “the publications described in subsection (e)(5)”. (E) Section 4002(c)(1)(B)(iii) of OBRA is amended, in the 42 USC 1395ww. matter stricken, by striking the comma after “available”. (F) Section 1886(d)(3)(A)(ii) of the Social Security Act, as Urban areas. amended by section 4002(c)(1)(C) of OBRA, is amended by striking “in urban areas” and inserting “in other urban areas”. (G) Section 1886(d)(1)(A)(iii) of the Social Security Act, as Urban areas. Rural areas. amended by section 4002(d) of OBRA, is amended by striking “if greater” and inserting “if the average standardized amount (described in clause (i)(I) or clause (ii)(I) of paragraph (3)(D)) for hospitals within the region of, and in the same rural, large urban, or other urban area as, the hospital is greater than the average standardized amount (described in the respective clause) for hospitals within the United States in that type of area”. (H) (i) Section 1886(d)(2)(D) of the Social Security Act is amended by striking the last sentence (added by section 4002(f)(1)(A) of OBRA). (ii) Section 4002(f) of OBRA is amended by adding at the end the following new paragraph: “(3) The second sentence of section 1813(b)(1) of the Social Security Act (42 U.S.C. 1395e(b)(1)) is amended by striking ‘applicable percentage increase’ and all that follows through ‘is applied’ and inserting ‘Secretary’s best estimate of the payment-weighted average of the applicable percentage increases (as defined in section 1886(b)(3)(B)) which are applied.”. (iii) The amendment made by clause (ii) shall apply to the Effective date. 42 USC 1395e note. inpatient hospital deductible for years beginning with 1989. (I) Section 4002(g) of OBRA is amended— (i) in paragraph (1)(A), by striking “1886(a)(1)(A)(iii)” and 42 USC 1395ww note. inserting “1886(d)(1)(A)(iii)”. (ii) in paragraphs (1)(B) and (2)(B), by striking “1886(d)(3)(B)” and inserting “1886(b)(3)(B)”, and (iii) in paragraph (6), by striking “1886(d)(10)(B)” and inserting “1886(d)(1)(B)”. (2) Section 4003.— Section 4003(d) of OBRA is amended— 101 Stat. 1330–46. (A) in paragraph (2)— (i) by inserting “(other than under section 1886(d)(5)(F) of such Act)” after “receives payments”, and (ii) by inserting “of such services” after “reasonable costs”; and (B) in the matter following paragraph (2), by inserting “the” after “facilities of”. (3) Section 4004.— Section 4004(a) of OBRA is amended by 42 USC 1395ww. inserting “(1)” after “Survey.—” and by adding at the end the following new paragraph: “(2) Section 1886(d)(9)(C)(iv) of such Act is amended by adding at Puerto Rico. the end the following new sentence: “The second and third sentences of paragraph (3)(E) shall apply to subsection (d) Puerto Rico hospitals under this clause in the same manner as they apply to subsection (d) hospitals under such paragraph and, for purposes of this clause, any reference in such paragraph to a subsection (d) hospital is deemed a reference to a subsection (d) Puerto Rico hospital.”. (4) Section 4005.— (A) Section 1886(d)(8)(B) of the Social 42 USC 1395ww. Security Act, as added by section 4005(a)(1)(D) of OBRA, is amended— (i) by striking “The Secretary” and inserting “For purposes of this subsection, the Secretary”, and (ii) by striking all that follows “if’ and inserting the Rural areas. following: “the rural county would otherwise be considered part of an urban area, under the standards for designating Metropolitan Statistical Areas (and for designating New England County Metropolitan Areas) published in the Federal Register on January 3, 1980, if the commuting rates used in determining outlying counties (or, for New England, similar recognized areas) were determined on the basis of the aggregate number of resident workers who commute to (and, if applicable under the standards, from) the central county or counties of all contiguous Metropolitan Statistical Areas (or New England County Metropolitan Areas).”. (B) Section 1886(d)(8)(C) of the Social Security Act, as added by section 4005(a)(1)(D) of OBRA, is amended by striking “standardized amount” and inserting “standardized amounts”. (C) Section 4005(a) of OBRA is amended— (i) in paragraph (1)(D), by striking “subparagraph” and inserting “subparagraphs”, and (ii) in paragraph (3), by striking “This section, and the amendments made by paragraph (1),” and inserting “This subsection”. (D) Section 1883(d)(3) of the Social Security Act, as added by 42 USC 1395tt. section 4005(b)(2)(B) of OBRA, is amended by inserting before the period at the end the following: “, except that such payment shall continue to be made in the period for those patients who are receiving extended care services at the time the hospital reaches the limit specified in this paragraph”. (5) Section 4006.— (A) Section 1886(g)(3)(A)(iv) of the Social Security Act, as amended by section 4006(a) of OBRA, is amended by inserting “for payments attributable” after “15 percent”. (B) Section 4006(a) of OBRA is amended— (i) by adding “and” at the end of subparagraph (A), and (ii) by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively. (6) Section 4007.— Section 4007 of OBRA is amended— (A) in the second sentence of subsection (a), by striking “updata” and inserting “updated”; (B) by amending subsection (b) to read as follows: “(b) Requiring Reporting of Standardized Cost Report Electronically.— “(1) In general.— Section 1886(f)(1) of the Social Security Act (42 U.S.C. 1395ww(f)(1)) is amended— “(A) by striking for a period ending not earlier than September 30, 1988,”, “(B) by inserting ‘(A)’ after ‘(f)(1)’, and “(C) by adding at the end the following new subparagraph: “(B) (i) Subject to clause (ii), the Secretary shall place into effect a standardized electronic cost reporting format for hospitals under this title. “(ii) The Secretary may delay or waive the implementation of such format in particular instances where such implementation would result in financial hardship (in particular with respect to hospitals with a small percentage of inpatients entitled to benefits under this title).”. “(2) Effective date.— The amendment made by paragraph 42 USC 1395ww note. (1)(0 shall apply to hospital cost reporting periods beginning on or after October 1, 1989”; and (C) in subsection (c)— 42 USC 1395ww note. (i) in paragraph (1)— (I) by striking “3-year”, and (II) by striking “contracting” and inserting “conducting”; (ii) in paragraph (2), by striking “by category of service and” in subparagraphs (A) and (B); (iii) in paragraph (2)(0, by striking “(by category of service)”; (iv) in paragraph (2), by striking subparagraph (D) and redesignating subparagraphs (E) through (L) as subparagraphs (D) through (K), respectively; (v) by amending subparagraph (1), as so redesignated, to read as follows: “(I) Bad debt and charity care.”; (vi) in paragraph (2), by adding at the end the following: “The Secretary shall develop a definition of ‘outpatient visit’ for purposes of reporting hospital information.”; (vii) in paragraph (5), by striking “paragraph (3)” and inserting “paragraph (2)”; (viii) in paragraph (5)(A), by striking “The terms” and all that follows through “as” and inserting “The term ‘bad debt and charity care’ has such meaning as”; (ix) in paragraph (5)(B)— (I) by inserting “at least” after “to payors”, (II) by striking “title VIII” and inserting “title XVIII”, and (III) by striking “self-paying individuals” and inserting “and other persons (including self-paying individuals)”; and (x) in paragraph (6)— (I) by striking “$1,000,000 for each of” and inserting “a total of $3,000,000 for”, (II) by inserting “or from operation funds” after “research funds”, (III) by striking “, and at least” and all that follows through “operations funds” and inserting “and”, and (IV) by striking “over 3 years”. (7) Section 4008.— Section 4008(d)(1)(B) of OBRA is amended 42 USC 1395ww note. by striking “1886” and inserting “1886(d)”. (8) Section 4009.— (A) Section 4009(a) of OBRA is amended— 42 USC 1395dd. (i) by striking paragraphs (1) and (2) and inserting the following: “(1) Increase in civil monetary penalty and exclusion of responsible physician violators.— Section 1867(d)(2) of the Social Security Act (42 U.S.C. 1395dd(d)(2)) is amended— “(A) in the second sentence— “(i) by redesignating such sentence as subparagraph (C), “(ii) by striking ‘previous sentence’ and inserting ‘this paragraph’, and “(iii) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and “(B) by striking the first sentence and inserting the following: ‘(A) A participating hospital that knowingly violates a requirement of this section is subject to a civil money penalty of not more than $50,000 for each such violation. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under this subparagraph in the same manner as such provisions apply with respect to a penalty or proceeding under section 1128A(a). “‘(B) The responsible physician in a participating hospital with respect to the hospital’s violation of a requirement of this subsection is subject to the sanctions described in section 1842(j)(2), except that, for purposes of this subparagraph, the civil money penalty with respect to each violation may not exceed $50,000, rather than $2,000.’”and (ii) by redesignating paragraph (3) as paragraph (2). (B) Section 4009(d)(1)(A) of OBRA is amended, in the matter inserted by such section, by striking the comma after “representatives”. (C) Section 4009(i) of OBRA is amended by striking “New England county metropolitan areas” and “4001(b)” and inserting “urban areas in New England” and “4002(b)”, respectively. (D) Section 4009j) of OBRA is amended by adding at the end the following new paragraphs: “(9) Section 1818(c) of the Social Security Act (42 U.S.C. 1395i–2(c)) is amended by striking paragraph (4) and redesignating paragraphs (5) through (7) as paragraphs (4) through (6), respectively. “(10) Section 9305(d) of the Omnibus Budget Reconciliation 100 Stat. 1988 . Act of 1986 is amended by striking ‘2 years after the date of the enactment of this Act’ and inserting ‘January 1, 1990’.”. (c) Corrections Relating to Subpart A of Part 2 of Subtitle A of Title IV (Health Maintenance Organization Reforms).— (1) Section 4011.— Subparagraph (F) of section 1876(c)(3) of the Social Security Act, as added by the amendment made by 42 USC 1395mm. section 4011(a)(1) of OBRA, is amended by moving its indentation 4 ems to the left so its left margin is aligned with the left margin of subparagraph (G) of that section, as added by section 4011(b)(1) of OBRA. (2) Section 4012.— (A) (i) Section 1866(a)(1)(O) of the Social Security Act, as inserted by section 4012(a) of OBRA, is amended by striking “with a risk-sharing contract under section 1876” and inserting “(i) with a risk-sharing contract under section 1876, under section 1876(i)(2)(A) (as in effect before February 1, 1985), under section 402(a) of the Social Security Amendments of 1967, or under section 222(a) of the Social Security Amendments of 1972, and (ii) which does not have a contract establishing payment amounts for services furnished to members of the organization”. (ii) The amendment made by clause (i) shall apply to admissions Effective date. 42 USC 1395cc note. occurring on or after the first day of the fourth month beginning after the date of the enactment of this Act. (B) Section 4012(c) of OBRA is amended by striking “paragraph (2)” 42 USC 1395mm note. and inserting “subsection (a)”. (3) Section 4013.— Section 4013 of OBRA is amended by striking 42 USC 1395mm. “(a) In General” and all that follows through the end and inserting the following: “Section 2350(b)(3) of the Deficit Reduction Act of 1984 is amended 42 USC 1395mm note. by striking ‘four years after the date of the enactment of this Act’ and inserting ‘September 30, 1990’.”. (4) Section 4014.— Section 1876(i)(6) of the Social Security Act, as amended by section 4014 of OBRA, is amended— 42 USC 1395mm. (A) in subparagraph (A), by inserting “, in addition to any other remedies authorized by law,” after “the Secretary may provide”, and (B) in the last sentence of subparagraph (B), by striking “under that section” and inserting “or proceeding under section 1128A(a)”. (5) Section 4018.— Section 1876(f)(3)(A) of the Social Security Act, as inserted by section 4018(a) of OBRA, is amended— (A) by inserting “enrollment and residency requirements under this section and for” after “for purposes of”, and (B) by striking “of the subdivision” and inserting “described in subparagraph (B)(iii) who receive services through the subdivision”. (d) Corrections Relating to Subpart B of Part 2 of Subtitle A of Title IV (Home Health Quality).— (1) Section 4021.— (A) Section 1891(a) of the Social Security Act, as added by section 4021(b) of OBRA, is amended— 42 USC 1395bbb. (i) in paragraph (3)(A), by striking “who is not a licensed health care professional (as defined in subparagraph (F))”, (ii) in paragraph (3)(F), by inserting “physical or occupational Health care professionals. therapy assistant,” after “occupational therapist,”, and (iii) by striking paragraph (4) and by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively. (B) (i) Section 1861(n) of the Social Security Act (42 U.S.C. 1395x(n)) is amended by inserting before the period at the end the following: “; except that such term does not include such equipment furnished by a supplier who has used, for the demonstration and use of specific equipment, an individual who has not met such minimum training standards as the Secretary may establish with respect to the demonstration and use of such specific equipment”. (ii) The amendment made by clause (i) shall apply to equipment Effective date. furnished on or after the effective date provided in section 4021(c) of OBRA. (2) Section 4022.— (A) The third sentence of section 1891(c)(1) of the Social Security Act, as added by section 4022(a) of OBRA, is amended by inserting “(other than subsections (a) and (b))” after “1128A”. (B) Section 1891(d)(2)(A) of the Social Security Act, as added 42 USC 1395bbb. by section 4022(a) of OBRA, is amended by striking “1991” and inserting “1992”. (3) Section 4023.— (A) Section 4023 of OBRA is amended by inserting “(a) In General.—” before “Section 1891”. (B) Section 1891(f)(2)(A) of the Social Security Act, as added by section 4023 of OBRA, is amended— (i) by moving the indentation of clauses (i) through (iii) (and the sentence following clause (iii)) 2 ems to the left, (ii) in clause (i), by striking “for each day of noncompliance” and inserting “in an amount not to exceed $10,000 for each day of noncompliance”, and (iii) by inserting after and below clause (iii), the following: “The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under clause (i) in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).”. (C) Section 4023(b) of OBRA is amended by inserting before the period at the end the following: “, and no intermediate sanction described in section 1891(f)(2)(A) of such Act shall be imposed for violations occurring before such effective date”. (4) Section 4025.— (A) Section 1864(a) of the Social Security 42 USC 1395aa. Act is amended— (i) in the first sentence added by section 4025(a) of OBRA, by striking “most recent accreditation survey conducted with respect to the agency,” and inserting “most recent accreditation survey conducted by a State agency or private accreditation agency under section 1865 with respect to the home health agency,”, and (ii) in the second sentence so added— (I) by inserting “such State or local” before “agency” the first place it appears, and (II) by striking “section 1864” and inserting “section 1865”. (B) Section 4025 of OBRA is amended— (i) in subsection (b), by striking “subsection (a)” and inserting “this section” and by redesignating such subsection as subsection (c), and (ii) by inserting after subsection (a) the following new subsection: “(b) Conforming Amendment.— The last sentence of section 1865(a) of such Act (42 U.S.C. 1395bb(a)) is amended by inserting ‘(other than a survey with respect to a home health agency’ after ‘any accreditation survey’.”. (5) Section 4026.— (A) Section 1861(v)(1)(L)(iii) of the Social 42 USC 1395x. Security Act, as added by section 4026(a)(1)of OBRA, is amended— (i) by striking “audited” each place it appears and inserting “verified”, and (ii) by adding at the end the following: “ Wages. In the case of a home health agency that refuses to provide data, or deliberately provides false data, respecting wages for purposes of this clause upon the request of the Secretary, the Secretary may withhold up to 5 percent of the amount of the payments otherwise payable to the agency under this title until such date as the Secretary determines that such data has been satisfactorily provided.”. (B) Section 4026(a)(2) of OBRA is amended by striking “July 1, 42 USC 1395x note. 1988” and inserting “July 1, 1989”. (C) Section 4026(b) of OBRA is amended by striking “June 1, 1988” and inserting “June 1, 1989”. (6) Section 4027.— Section 4027(a) of OBRA is amended by 42 USC 1395n note. striking “July 1, 1988” and inserting “April 1, 1989”. (e) Corrections Relating to Subpart C of Part 2 of Subtitle A of Title IV (Other Medicare Part A and B Provisions).— (1) Section 4032.— (A) Section 4032 of OBRA is amended by 42 USC 1395b. striking “and Physician Review” in the heading of subsection (a) and by striking “and Carriers” in the heading of subsection (b). (B) Section 18166)(2) of the Social Security Act, as added by section 4032(a) of OBRA, is amended— 42 USC 1395h. (i) by inserting “in the case of a request for reconsideration of a denial,” after “(2)”, and (ii) by inserting “the” before “disposition”. (C) Section 4032(c)(1)(B) of OBRA is amended by striking 42 USC 1395b note. “claims filed” and inserting “reconsiderations requested”. (2) Section 4033.— Section 4033 of OBRA is amended— (A) by striking “(a) In General.—” 42 USC 426. (B) by redesignating paragraphs (1) and (2) (and subparagraphs 42 USC 426 note. (A) and (B) of paragraph (2)) as subsections (a) and (b) (and paragraphs (1) and (2) of subsection (b)), respectively, and (C) by aligning the left margins of the matter in such section flush left. (3) Section 4039.— Section 4039 of OBRA is amended by adding at the end the following new subsection: “(h) Technical Corrections.— “(1) Section 1128A(b) of the Social Security Act (42 U.S.C. 1320a–7a(b)) is amended— “(A) in paragraph (1)(A), by striking ‘)(VII’ and inserting ‘XVII’, and “(B) in paragraph (2) by inserting ‘each’ after ‘$2,000 for’. “(2) Section 1138(a)(1)(B) of such Act (42 U.S.C. 1320b–8(a)(1)(B)) is amended by striking ‘In’ and inserting ‘in’. “(3) Section 1154(a)(4) of such Act (42 U.S.C. 1320c–3(a)(4)) is amended— “(A) by indenting subparagraphs (B) and (C) (and clauses (i) through (iii) of subparagraph (C) two additional ems; “(B) in subparagraph (B), by inserting ‘risk-sharing’ before ‘contract under section 1876’; and “(C) in subparagraph (C)(i), by adding before the comma at the end the following: ‘(other than the ability to perform review functions under this section that are not described in subparagraph (B))’. “(4) Section 1154(d) of such Act (42 U.S.C. 1320c–3(d)) is amended by striking “1164(b)(4)” and inserting ‘1164’. “(5) Section 1156(b) of such Act (42 U.S.C. 1320c–5(b)) is amended— “(A) in the second sentence of paragraph (1), by striking ‘such services on a reimbursable basis.’ and inserting ‘services under this Act on a reimbursable basis.’, and “(B) in paragraph (2), by striking ‘at such time’ and all that follows through ‘and shall remain’ and inserting ‘on the same date and in the same manner as an exclusion from participation under the programs under this Act becomes effective under section 1128(c), and shall remain’. “(6) Section 1160 of such Act (42 U.S.C. 1320c–9) is amended by adding at the end the following new subsection: “‘(e) For purposes of this section and section 1157, the term “organization with a contract with the Secretary under this part” includes an entity with a contract with the Secretary under section 1154(a)(4)(C).’. “(7) The heading of section 1870 of such Act (42 U.S.C. 1395gg) is amended to read as follows: “(8) Section 1876(i)(7) of such Act (42 U.S.C. 1395mm(i)(7)) is amended— “(A) in subparagraph (A), by striking ‘Except as provided under section 1154(a)(4)(C), each’ and inserting ‘Each’; “(B) in subparagraph (A), by inserting ‘or with an entity selected by the Secretary under section 1154(a)(4)(C)’ after ‘located)’; and “(C) by striking ‘peer’ in subparagraph (B) and the second place it appears in subparagraph (A). “(9) Section 9353 of the Omnibus Budget Reconciliation Act of 42 USC 1320c–3 note. Contracts. 1986 is amended— “(A) in subsection (a)(6)(A)(i), by striking ‘paragraphs (1) and (2)(D) shall apply to contracts as of and inserting ‘paragraph (1) shall apply to contracts entered into or renewed on or after’; “(B) in subsection (a)(6)(B), by striking ‘amendment made by paragraph (2)(B)’ and inserting ‘amendments made by paragraphs (2)(B) and (2)(D)’; and “(C) in subsection (e)(3)(B), by adding at the end the following: “The provisions of section 1876(1)(7) of the Social Security Act (added by such amendment) shall apply to health maintenance organizations with contracts in effect under section 1876 of such Act (as in effect before the date of the enactment of Public Law 97–248) in the same manner as it applies to eligible organizations with risk-sharing contracts in effect under section 1876 of such Act (as in effect on the date of the enactment of this Act).’.”. (f) Corrections Relating to Subpart A of Part 3 of Subtitle A of Title IV (Payments for Physicians’ Services).— (1) Section 4041.— (A) Section 4041(a)(1)(B) of OBRA is amended— (i) by inserting “as amended retroactively by section 4085(i)(7)(C),” after “(j)(1)(C),”, and (ii) by redesignating the clause added by such section as clause (viii). (B) The last sentence of section 1842(b)(2) of the Social 42 USC 1395u. Security Act, as added by section 4041(a)(3)(A) of OBRA, is amended by striking “and subsection (h)” and inserting “, subsection (h), and section 1845(f)(2)”. (C) Subclause (II) of section 4041(a)(3)(B)(iii) of OBRA is amended to read as follows: “(II) by striking ‘April 1’ and inserting ‘September 30’, and”. (2) Section 4042.— (A) Section 1842(b)(4)(F)(iii) of the Social Security Act, as added by section 4042(a) of OBRA, is amended— 42 USC 1395u. (i) in subclause (I), by striking the semicolon and inserting a comma, and (ii) in subclause (ID, by striking “physician’s” and inserting “physicians’ ”. (B) Section 1842(b)(4)(F)(ii)(1) of the Social Security Act, as added by section 4042(a) of OBRA, is amended by striking “subparagraph (E)(iii) ” and inserting “subsection (i)(4)”. (C) Section 4042(b) of OBRA is amended by striking “Section” and all that follows up to “The term” and inserting the following: “(1) Section 1842 of such Act (42 U.S.C. 1395u) is amended— “(A) in subsection (h)(7), by striking described in paragraph (8)’; “(B) in paragraph (8) of subsection (h)— “(i) by striking ‘(8) For purposes of this title, a’ and inserting ‘(1) A’, “(ii) by indenting such paragraph 2 ems, and “(iii) by inserting before such paragraph the following: “‘(i) For purposes of this title:’; (C) in subsection (b)(4)(E)— “(i) by striking ‘(E) In this section:’, “(ii) by redesignating clauses (i) and (ii), as paragraphs (2) and (3), respectively, and “(iii) by transferring and inserting such paragraphs, as redesignated, before subsection (j); “(D) in subsection (b)(4), by redesignating subparagraphs (F) and (G) of subsection (b)(4), as subparagraphs (E) and (F), respectively; and “(E) by inserting, after the paragraphs transferred and inserted by subparagraph (C)(iii), the following new paragraph: “‘4’” . (D) Section 4042(b) of OBRA is further amended by adding at 42 USC 1395u. the end the following: “(2) (A) Section 1842(b)(4)(A)(vii) of such Act, as redesignated by sections 4041(a)(1)(A)(i) and 4044(a), is amended by striking ‘subparagraph (E)(ii)’ and inserting ‘subsection (i)(3)’. “(B) Section 1833(1)(2) of such Act (42 U.S.C. 139510)(2)) is amended by striking ‘1842(b)(4)(E)(ii)’ and inserting ‘18420)(3)’.”. (E) The last sentence of section 1842(b)(4)(A)(iv)(II) of the Social Security Act, as added by section 4042(c)(2) of OBRA, is amended by striking “January 1, 1988” and inserting “January 1, 1989”. (F) Section 4042(c) of OBRA is amended— (i) by striking “Section” and all that follows up to “In the previous sentence” and inserting the following: “(1) The first sentence of clause (iv) of section 1842(b)(4)(A) of such Act (42 U.S.C. 139u(b)(4)(A)) is amended to read as follows: ‘The reasonable charge for physicians’ services furnished on or Health care professionals. after January 1, 1987, by a nonparticipating physician shall be no greater than the applicable percent of the prevailing charge levels established under the third and fourth sentences of paragraph (3) (or under any other applicable provision of law affecting the prevailing charge level)?.”, and (ii) by adding at the end the following: “(2) Subclauses (I) and (II) of section 1842(j)(1)(C)(i) of such Act are amended by striking ‘prevailing charge for the year involved for such service furnished by nonparticipating physicians’ and inserting ‘applicable percent (as defined in subsection (b)(4)(A)(iv)) of the prevailing charge for the year and service involved’.”. (3) Section 4044.— (A) Section 4044(a) of OBRA is amended by striking “Increase in Prevailing Charges” and inserting “Prevailing Charge Floor”. (B) Section 1842(b)(4)(A)(vi) of the Social Security Act, as 42 USC 1395u. inserted by section 4044(a) of OBRA, is amended— (i) by striking “subparagraph (E)(iii)” and inserting “subsection (i)(4)”. (ii) by striking “the average of the prevailing charge levels” and inserting “the estimated average prevailing charge levels based on the best available data”, and (iii) by striking “for participating physicians”. (4) Section 4045.— (A) Section 1842(b)(10) of the Social Security Act, as amended by section 4045(a) of OBRA, is amended— (i) in subparagraph (A)(i)— (I) by striking “under paragraph (3)”, (II) by striking “subparagraph (C)” and inserting “subparagraph (B)”, and (III) by striking “for participating and nonparticipating physicians”; (ii) in subparagraph (A)(iii), by striking “clause (i)(ID” and inserting “clause (i)(I)”; (iii) in subparagraph (B) by inserting “(including subsequent insertion of an intraocular lens)” after “cataract surgery”; and (iv) in subparagraph (D), by inserting “under” after “review”. (B) Section 4045(c)(2) of OBRA is amended— (i) in subparagraph (B), by inserting before the period at the end the following: “and by striking the second sentence”, and (ii) by adding at the end the following new subparagraph: “(D) The fourth sentence of section 1842(b)(3) of the Social Security Act (42 U.S.C. 1395u(b)(3)) is amended by inserting ‘(or under any other provision of law affecting the prevailing charge level)’ after ‘the level determined under this sentence’.”. (C) Section 1842(j)(1)(D)(iv) of the Social Security Act, as added by section 4045(c)(1)(B) of OBRA, is amended by striking “imposes a charge” and inserting “bills”. (D) (i) Section 1862(a)(15) of the Social Security Act (42 U.S.C. 1395y(a)(15)) is amended by inserting “(including subsequent insertion of an intraocular lens)” after “operation”. (ii) The amendment made by clause (i) shall apply to operations performed on or after 60 days after the date of the enactment of this Act. (5) Section 4048.— (A) Section 1842(b)(H)(C)(i) of the Social Security Act, as inserted by section 4046(a)(1)(C) of OBRA and as designated by section 4063(a)(1)(A), is amended by striking “implantation” and inserting “insertion”. (B) Section 1842(j)(1)(D)(ii)(IV) of the Social Security Act, as inserted by section 4046(a)(2)(A) of OBRA, is amended by striking 42 USC 1395u. “is”. (6) Section 4047.— (A) The heading of section 4047 of OBRA is amended by striking “PRIMARY CARE” and inserting “CERTAIN”. (B) Section 1842(b)(4)(G) of the Social Security Act, as added by section 4047(a) of OBRA, is amended— (i) by inserting “than” after “(other”, and (ii) by striking “(as determined under the third and fourth sentences of paragraph (3) and under paragraph (4))”. (C) Section 4047(b) of OBRA is amended by inserting “on or” 42 USC 1395u note. after “medicare beneficiaries”. (D) The item in the table of contents of title IV of OBRA relating to section 4047 is amended to read as follows: “Sec. 4047. Customary charges for certain services of new physicians.”. (7) Section 4048.— (A) Paragraph (14) of section 1842(b) of the Social Security Act, as added by section 4048(a) of OBRA, is redesignated as paragraph (13). (B) Section 4048 of OBRA is amended by adding at the end the 101 Stat. 1330–89. following new subsection: “(e) Conforming Amendment to Maxmimum Allowable Actual Charge.— Section 1842(1)(1)(C) of the Social Security Act (42 U.S.C. 1395u(j)(1)(C)), as amended by sections 4085(i)(7)(C) and 4041(a)(1)(B) of this title, is amended by adding at the end the following new clause: “(ix) If there is a reduction under subsection (b)(IS) in the Health care professionals. reasonable charge for medical direction furnished by a nonparticipating physician, the maximum allowable actual charge otherwise permitted under this subsection for such services shall be reduced in the same manner and in the same percentage as the reduction in such reasonable charge.’.”. (8) Section 4049.— (A) Section 1834(b)(6) of the Social Security Act, as added by section 4049(a)(2) of OBRA, is amended by 42 USC 1395m. striking “radiologic” each place it appears and inserting “radiology”. (B) Section 4049(a) of OBRA is amended— (i) in paragraph (1), by striking “4062(c)(3)” and inserting 42 USC 1395l. “4062(d)(3)”, and (ii) in paragraph (2), by striking “4062(a)” and inserting 42 USC 1395n. “4062(b)’. (C) Section 1833(a)(1) of the Social Security Act, as amended by section 4049(a)(1)of OBRA, is amended in the clause added 42 USC 1395l. by that section by striking “1834(b)(5)” and inserting “1834(b)(6)”. (D) Section 1834(b) of the Social Security Act, as added by section 4049(a)(2) of OBRA, is amended— (i) “physicians”; (ii) in paragraph (5)(0, by striking “imposes a charge” and inserting “bills”; (iii) in paragraph (5)(0, by inserting “in the same manner as such sanctions may apply to a physician” after “18420)(2)”; (iv) in paragraph (6), by striking “, section 1833(a)(1)(I), and section 1842(h)(1)(B)” and inserting “and section 1833(a)(1)(J)”; and (v) in paragraph (6)(B), by striking “billings” and inserting “the total amount of charges”. (E) Section 4049(b) of OBRA is amended by striking “establish” and inserting “propose”. (9) Section 4051.— Section 1842(n) of the Social Security Act, 42 USC 1395u. as added by section 4051(a) of OBRA, is amended— (A) in paragraph (1) in the matter before subparagraph (A)— (i) by striking “to a patient”, (ii) by inserting “the bill or request for” after “for which”, (iii) by striking “his” and inserting “a”, and (iv) by striking “supervised the test” and inserting “supervised the performance of the test”; (B) in paragraph (1)(A), by striking “to individuals enrolled under this part”; (C) in paragraph (2)(A), by inserting “the payment amount specified in paragraph (1)(A) and” after “other than”; and (D) in paragraph (3), by striking “or supplier”. (10) First section 4052.— (A) Section 1892(a) of the Social 42 USC 1395ccc. Security Act, as added by the first section 4052(a) of OBRA, is amended— (i) in paragraphs (2)(C)(ii) and (3)(B), by striking “paragraph (3)” and inserting “paragraph (4)”, (ii) in paragraph (4), by striking “bar” and inserting “exclude”, and (iii) in paragraph (4), by inserting before the period at the end the following: “if a State requests that the physician not be excluded”. (B) The first section 4052(b) of OBRA (relating to conforming reference) is amended by striking “338E(b)(1)” and “254o(b)(1)K and inserting “338E)(b)(1)(B)(i)” and “254o(b)(1)(B)(i)”, respectively. (C) (i) Section 1892 of the Social Security Act, as added by the first section 4052(a) of OBRA, is amended— (I) in the heading, by striking “physicians” and “schoolarship” and inserting “individuals” and “scholarship” and inserting “individuals” and “scholarship and loan”, respectively; (II) by striking “physician” each place it appears (other than the third place it appears in subsection (a)(4)) and inserting “individual”; (III) by striking “physician” the third place it appears in subsection (a)(4) and inserting “practitioner”; (IV) in paragraph (1)(A), by inserting “, the Physician Shortage Area Scholarship Program, or the Health Education Assistance Loan Program,” after “Scholarship Program”; (V) in subsection (b), by striking “, and (2)” and all that follows through “Act” and inserting “or under subpart III of part F of title VII of such Act (as in effect before October 1, 1976) and which has not been paid by the deadline established by the Secretary pursuant to such respective section”; and (VI) in subsection (b), by striking the period at the end and inserting or” and by adding at the end the following: “(2) owed by an individual to the United States by reason of a Loans. loan covered by Federal loan insurance under subpart I of part C of title VII of the Public Health Service Act and payment for which has not been cancelled, waived, or suspended by the Secretary under such subpart.”. (ii) Section 733(0 of the Public Health Service Act (42 U.S.C. 294(f)) is amended by adding at the end the following: “Procedures for reduction of payments under the medicare program are provided under section 1892 of the Social Security Act.”. (iii) The amendments made by this subparagraph shall be Effective date. 42 USC 294f note. effective 30 days after the date of the enactment of this Act. (11) Second section 4052.— (A) The second section 4052(a) of OBRA is amended by striking “is amended” and all that follows 42 USC 1395u. through the end and inserting the following: “is amended by inserting before the period at the end of the next-to-last sentence the following: ‘, and shall remain at such prevailing charge level until the prevailing charge for a year (as adjusted by economic index data) equals or exceeds such prevailing charge level’.”. (B) The second section 4052(b) of OBRA is amended by striking 42 USC 1395u note. “January” and inserting “April”. (12) Section 4054.— (A) Section 4054 of OBRA is amended to 42 USC 1395l note. read as follows: “SEC. 4054. APPLYING COPAYMENT AND DEDUCTIBLE TO CERTAIN OUT-PATIENT PHYSICIANS’ SERVICES. “(a) In General.— Section 1833 of the Social Security Act (42 U.S.C. 13951) is amended— “(1) in subsection (a)(1), by striking clause (F), “(2) in subsection (b), by striking paragraph (3) and by re-designating paragraphs (4) and (5) as paragraphs (3) and (4), respectively, and “(3) in subsection (i), by striking paragraph (4). “(b) Effective Date.— The amendments made by subsection (a) shall apply to services furnished on or after April 1, 1988.”. (B) The item relating to section 4054 in the table of contents of title IV of OBRA is amended to read as follows: “Sec. 4054. Applying copayment and deductible to certain outpatient physicians’ services.”. (13) Section 4055.— Section 4055 of OBRA is amended— (A) in subsection (a)(2), by striking “such list” and inserting 42 USC 1395u note. “such definitions”, and (B) in subsection (b)(1), by striking “dermatology,”. 42 USC 1395w–1 note. (14) Redesignation.— The second section 4052 of OBRA and sections 4053, 4054, and 4055 of OBRA are redesignated as 42 USC 1395u, 1395u notes, 1395l, 1395l notes, 1395w–1 note. sections 4053 through 4056, respectively. (g) Corrections Relating to Subpart B of Part 3 of Subtitle A of Title IV (Payments for Other Part B Services).— (1) Section 4062.— (A) The heading of section 1834 of the Social Security Act, as inserted by section 4062(b) of OBRA, is 42 USC 1395m. amended by inserting “items and” after “particular”. (B) Subsection (a) of section 1834 of the Social Security Act, as so inserted, is amended— (i) in paragraph (1)(C), by inserting “or under part A to a home health agency” after “under this part”; (ii) in the second sentence of paragraph (2)(A), by striking “rental” before “payments”; (iii) in paragraph (2)(B)(i), by striking “allowed” and inserting ’‘reasonable”, and in paragraphs (3)(B)(i) and (8)(A)(i)(I), by striking “allowable” and inserting “reasonable”; (iv) in paragraph (3)(A), by striking the extra space after “ventilators”; (v) in paragraph (4), by inserting after “individual patient” the following: and for that reason cannot be grouped with similar items for purposes of payment under this title,”; (vi) in paragraph (4), by inserting “(A)” after “in a lump-sum amount” and by inserting “(B)” after “for that item, and”; (vii) in paragraph (4), by striking “maintenance and service” each place it appears and inserting “maintenance and servicing”, in paragraph (7)(A)(iii), by striking “service and maintenance” and inserting “maintenance and servicing”, and in paragraphs (7)(A)(ii) and (11)(A), by striking “servicing” and inserting “maintenance and servicing”; (viii) in paragraph (7)(A)(iii)(I), by striking “fee established by the carrier” and inserting “fee or fees established by the Secretary ”; (ix) in paragraph (9)(A)(ii)(I), by striking “12-month period” and inserting “6-month period”; (x) in paragraph (9)(A)(ii)(H), by striking “and to 1991” and inserting “, 1991, and 1992”; (xi) in paragraphs (9)(B)(i) and (10)(B)(i), by striking the comma after “1991”; (xii) in paragraph (9)(C)(i), by striking “subparagraph (A)(ii)(D” and inserting “subparagraph (A)(ii)”; (xiii) in paragraph (10)(B), by inserting before the period the following: ,rand payments under this subsection as such provisions apply to physicians’ services and physicians and a reasonable charge under section 1842(b)”; (xiv) in the last sentence of paragraph (11)(A), by striking “under subsection (j)(2)” and inserting “under section 1842q)(2)”; (xv) in paragraph (12), by striking “(as defined in section 1886(d)(2)(D))”; and (xvi) by striking paragraph (14). (C) Section 4062(c)(4) of OBRA is amended— (i) by inserting “and payment of a reasonable copying fee which the Secretary may establish” after “upon written request”, and (ii) by inserting before the period at the end the following: “, but only in a form which does not permit identification of individual suppliers”. (D) The last sentence of section 1866(a)(2)(A) of the Social Security Act, as added by section 4062(d)(4) of OBRA, is amended by striking “section 1834(a)(2)” and inserting “section 1834(a)(1)(B)”. (E) The matter added by section 4062(d)(3)(A)(ii) of OBRA is amended by striking “and” before “(I)”. (2) Section 4063.— (A) Section 1842(b)(H)(C)(ii) of the Social Security Act, as amended by section 4063(a)(1)(A) of OBRA, is 42 USC 1395u. amended— (i) by striking “implanted” and inserting “inserted”, and (ii) by inserting “or subsequent to” after “during”. (B) Subclause (IV) of section 1842(j)(1)(D)(ii) of the Social Security Act, as inserted by section 4063(a)(2)(A) of OBRA, is redesignated as subclause (V) and is amended by striking “is”. (C) Section 4063(a)(2)(B) of OBRA is amended by striking 42 USC 1395l. clause (ii) and by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively. (D) Section 1833(i)(2)(A)(iii) of the Social Security Act, as inserted by section 4063(b)(3) of OBRA is amended— 42 USC 1395l. (i) by striking “implantation” and inserting “insertion”, and (ii) by inserting “or subsequent to” after “during”. (E) Section 4063 of OBRA is amended by adding at the end the following new subsection: “(e) Prevention of Additional Billings for IOLs.— “(1) Section 1833(i) of the Social Security Act (42 U.S.C. 13951(i)) is amended by adding at the end the following new paragraph: “(6) Any person, other than a facility having an agreement under Contracts. Claims. Law enforcement and crime. section 1832(a)(2)(F)(i), who knowingly and willfully presents, or causes to be presented, a bill or request for payment, for an intraocular lens inserted during or subsequent to cataract surgery for which payment may be made under paragraph (2)(A)(iii), is subject to a civil money penalty of not to exceed $2,000. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’. “(2) Section 1832(a)(2)(F)(i) of such Act (42 U.S.C. 1395k(a)(2)(F)(D) is amended by inserting ‘(including intraocular lens in cases described in section 1833(i)(2)(A)(iiD)Y after ‘services’ each place it appears.”. (3) Section 4064.— (A) Section 4064(a) of OBRA is amended by 42 USC 1395l note. striking all that follows the first dash and inserting the following: “Paragraph (2) of section 1833(h) of the Social Security Act (42 U.S.C. 13951(h)) is amended— “(1) by inserting ‘(A)(i)’ after ‘(2)’; “(2) in the second sentence— “(A) by redesignating clauses (A) and (B) as clauses (i) and (ii), respectively, and “(B) by designating such sentence as subparagraph (B); and “(3) by adding at the end of subparagraph (A)(i), as designated under paragraph (1), the following new clause: “‘(ii) Notwithstanding any other provision of this subsection— “‘(I) any change in the fee schedules which would have become effective under this subsection for tests furnished on or after January 1, 1988, shall not be effective for tests furnished during the 3-month period beginning on January 1, 1988, and ‘“(II) the Secretary shall not adjust the fee schedules under clause (i) to take into account any increase in the consumer price index for 1988.’.”. (B) Section 4064(b)(1)of OBRA is amended— (i) by striking “1833(h)(2) of the Social Security Act (42 U.S.C. 13951(h)(2))” and inserting “1833(h)(2)(A) of the Social Security Act (42 U.S.C. 13951(h)(2)(A)), as amended by subsection (a),”; (ii) by striking “the following: ‘In establishing fee schedules under the first sentence of this paragraph with respect to” and inserting “the following new clause: “‘(iii) In establishing fee schedules under clause (i) with respect to”; and (iii) by moving the indentation of all the matter added following “with respect to” 2 ems to the left. (C) The clause added by section 4064(b)(1) of OBRA, as amended by subparagraph (A), is amended by inserting before the period at the end the following: and such reduced fee schedules shall serve as the base tor 1989 and subsequent years”. (D) Section 1833(h)(4)(B)(ii) of the Social Security Act, as amended by section 4064(b)(2)(B) of OBRA, is 42 USC 1395l. amended by inserting “after” before “March”. (E) Section 4064(c) of OBRA is amended by striking all that follows the dash and inserting the following: “Section 1833(h)(1)(D) of such Act is amended by inserting “, in a sole community hospital (as defined in the last sentence of section 1886(d)(5)(C)(ii))? after ‘a hospital laboratory’.”. (F) Section 4064(c) of OBRA is amended by inserting “(1)” after the dash and by adding at the end the following new paragraph: “(2) The amendment made by paragraph (1) shall apply with respect to diagnostic laboratory tests furnished on or after April 1, 1988.”. (G) Section 1846 of the Social Security Act, as added by 42 USC 1395w–2. section 4064(d)(1)of OBRA, is amended— (i) in subsection (a)— (I) by striking “certified” and “certification” and inserting “approved” and “approval”, respectively, (II) by inserting “or for coverage” after “conditions of participation”, and (III) by striking “cancelling immediately the certification of the provider or clinical laboratory” and inserting “terminating immediately the provider agreement or cancelling immediately approval of the clinical laboratory”; (ii) in subsections (b)(1)(A) and (b)(2)(A)(iv), by striking “certified”; (iii) in subsection (b)(2)(A)(ii), by striking “civil fines and penalties” and inserting “civil money penalties in an amount not to exceed $10,000 for each day of substantial noncompliance”; (iv) in subsection (b)(2)(A), by adding at the end the following new sentence: Law enforcement and crime. “The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under clause (ii) in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). (v) in subsection (b)(2)(A)(iii), by striking “certification”; (vi) in subsection (b)(2)(A)(iv), by striking “provided on or after the date in” and inserting “furnished on or after the date on”; and (vi) in subsection (b)(3), by striking “fines” and inserting “penalties” each place it appears. (H) The matter inserted in section 1861(s) of the Social Security Act by section 4064(e)(1) of OBRA is amended by inserting a 42 USC 1395x. comma after “year”. (4) Section 4066.— (A) The heading of section 4066 of OBRA is amended by inserting “AND OTHER DIAGNOSTIC TESTS” after “RADIOLOGY” (B) The item relating to section 4066 in the table of contents of title IV of OBRA is amended to read as follows: “Sec. 4066. Payments to hospital outpatient departments for radiology and other diagnostic tests.”. (C) Section 1833(n) of the Social Security Act, as added by section 4066(a)(2) of OBRA, is amended— 42 USC 1395l. (i) in paragraph (1)(A), by striking “beginning on or after October 1, 1988, under this part for services described in subsection (a)(2)(E)” and inserting “for services described in subsection (a)(2)(E)(i) furnished under this part on or after October 1, 1988, and for services described in subsection (a)(2)(E)(ii) furnished under this part on or after October 1, 1989,”; (ii) in paragraph (1)(B)(i)(II), by inserting “or (for services described in subsection (a)(2)(E)(i) furnished on or after January 1, 1989) the fee schedule amount established” after “the prevailing charge”; and (iii) by amending subclauses (I) and (II) of paragraph (1)(B)(ii) to read as follows: “(I) The term ‘cost proportion’ means 50 percent, except that such term means 65 percent in the case of outpatient radiology services for portions of cost reporting periods which occur in fiscal year 1989 and in the case of diagnostic procedures described in subsection (a)(2)(E)(ii) for portions of cost reporting periods which occur in fiscal year 1990. “(II) The term ‘charge proportion’ means 100 percent minus the cost proportion.”. (5) Section 4067.— Section 1833(f) of the Social Security Act, as inserted by section 4067(a) of OBRA, is amended by striking “medicare economic index (referred to in the fourth sentence of section 1842(b)(3)) applicable to physicians’ services” and inserting “MEI (as defined in section 1842(i)(3)) applicable to primary care services (as defined in section 1842(i)(4))”. (6) Section 4068.— The last sentence of section 1135(d)(3) of the Social Security Act, as added by section 4068(b)(1)of OBRA, 42 USC 1320b–5. is amended by striking “speciality” and inserting “specialty”. (h) Corrections Relating to Subpart B of Part 3 of Subtitle A of Title IV (Part B Eligibility and Benefits Changes).— (1) Section 4070.— (A) The last sentence of section 1833(c) of Prescription drugs. the Social Security Act, as added by section 407()(a)(2) of OBRA, is amended by striking “prescribing or monitoring prescription drugs” and inserting “monitoring or changing drug prescriptions”. (B) Section 1861(ff) of the Social Security Act, as added by section 4070(b)(2) of OBRA, is amended— (i) by inserting before such subsection the following heading: (ii) in paragraph (3), by striking “hospital-based or hospital-affiliated (as defined by the Secretary)” and inserting “furnished by a hospital to its outpatients”. (2) Section 4071.— Section 1861(s)(10)(A) of the Social Security 42 USC 1395x. Act, as amended by section 4071(a) of OBRA, is amended by inserting “, subject to section 4071(b) of the Omnibus Budget Reconciliation Act of 1987,” before “influenza vaccine”. (3) Section 4072.— (A) Section 1861(s)(12) of the Social Security Act, as amended by section 4072(a) of OBRA, is amended by inserting “subject to section 4072(e) of the Omnibus Budget Reconciliation Act of 1987,” after “(12)”. (B) Section 4072(b) of OBRA is amended— (i) by striking “by inserting after subsection (e)” and inserting “by adding at the end, as previously amended,”, and (ii) by redesignating the subsection added by such section as subsection (o). (4) Section 4073.— Section 4073 of OBRA is amended— (A) by striking paragraph (1) of subsection (b); (B) in paragraph (2) of subsection (b)— (i) by redesignating such paragraph as paragraph (1); (ii) by inserting “and” at the end of subparagraph (A); (iii) by striking subparagraph (B); (iv) in the matter added by subparagraph (C)— (I) by striking “and (I)” and inserting “(K)”, (II) by inserting “80 percent of the lesser of the actual charge for the services or” after “amounts paid shall be”, (III) by striking “but in no event more than” and inserting “but in no event shall such fee schedule exceed”, and (IV) by striking the semicolon and inserting a comma; and (v) by redesignating subparagraph (C) as subparagraph (B); (C) in paragraph (3) of subsection (b)— (i) by inserting “, as previously amended,” after “at the end”, (ii) by redesignating such paragraph as paragraph (2), (iii) by redesignating the subsection added by such paragraph as subsection (p), and (iv) by adding at the end of the subsection added by such paragraph the following: “Except for deductible and coinsurance amounts applicable under section 1833, whoever knowingly and willfully presents, or causes to be presented, to an individual enrolled under this part a bill or request for payment for services described in the previous sentence, is subject to a civil money penalty of not to exceed $2,000 for each such bill or request. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).; (D) in the subsection added by subsection (c)— 42 USC 1395x. (i) by redesignating such subsection as subsection (gg), and (ii) in paragraph (1), by striking “his” and inserting “the nurse-midwife’s” and by striking “physician’s” and inserting “physicians” and (E) in the matter inserted by subsection (d)(1), by striking 42 USC 1396d. “section 1861(ff)” and inserting “section 1861(gg)”. (5) Section 4074.— Section 4074 of OBRA is amended— 42 USC 1395x. (A) in the matter inserted by subsection (a)(1), by striking “(ff)” and inserting “(hh)”, and (B) by redesignating the subsection added by subsection (b) as subsection (hh). (6) Section 4076.— Subsection (a) of section 4076 of OBRA is 42 USC 1395x. amended to read as follows: “(a) Services Covered.— Section 1861(s)(2)(K) of the Social Security Rural areas. Act (42 U.S.C. 1395x(s)(2)(K)) is amended by inserting “(D’ before ‘in a hospital’ and by striking ‘or as an assistant at surgery’ and inserting (II) as an assistant at surgery. or (III) in a rural area (as defined in section 1886(d)(2)(D)) that is designated, under section 332(a)(1)(A) of the Public Health Service Act, as a health manpower shortage area,’.”. (7) Section 4077.— Section 4077(b) of OBRA is amended— (A) in paragraph (1), by inserting “by section 4073(a) of 42 USC 1395x. this title” after “as amended”; (B) by striking paragraph (2); 42 USC 1395k. (C) in paragraph (3)— 42 USC 1395l. (i) by striking “1395k(a)(1))” and inserting “13951(a)(1)),” (ii) by striking subparagraphs (A) and (B), (iii) in subparagraph (C), by striking “(I)” and inserting “(K)” and by redesignating such subparagraph as subparagraph (A), (iv) in subparagraph (D), by striking “subparagraph:” and inserting “clause.” and by redesignating such subparagraph as subparagraph (B), and (v) in the matter added by subparagraph (B), as so redesignated— (I) by striking “(J)” and inserting “(L)”, and (II) by inserting “80 percent of the lesser of the actual charge for the services or” after “amounts paid shall be”; (D) in paragraph (4), by striking “section 4073(b)(3)” and 42 USC 1395l. inserting “4073(b)(2)”; (E) in paragraph (5), by redesignating the subsection (gg) 42 USC 1395x. added by such paragraph as subsection (ii); and (F) by redesignating paragraphs (3) through (6) as paragraphs 42 USC 1395l, 1395x, 1395k note. (2) through (5), respectively. (8) Section 4079.— Section 4079(c)(1) of OBRA is amended by 42 USC 1395mm note. striking “subsection (d)” and inserting “subsection (e)”. (i) Provisions Relating to Subpart D of Part 3 of Subtitle A of Title IV (Other Part B Provisions).— (1) Section 4081.— (A) Section 1842(h)(3)(B) of the Social Security Act, as added by section 4081(a) of OBRA, is amended— 42 USC 1395u. (i) in the second sentence— (I) by striking “claims” and inserting “payment”, and (II) by striking “including such information as the Secretary determines is generally provided” and inserting “shall include an explanation of benefits and any additional information that the Secretary may determine to be appropriate in order”; (ii) in the third sentence, by striking “arrangements” and inserting “agreements”; and (iii) in the fourth sentence— (I) by inserting “by a carrier” after “under this subparagraph”, and (II) by inserting before the period at the end the following: “, and such user fees shall be collected and retained by the carrier” (B) Section 4081(b)(2) of OBRA is amended by redesignating subparagraphs (A) through (C) as subparagraphs (B) through (D), respectively, and by inserting before subparagraph (B), as so redesignated, the following: “(A) in the matter before paragraph (1), by inserting ‘(or, with respect to paragraph (3), the issuer of the policy)’ after ‘he finds that such policy’,”. (C) Section 1882(c)(3) of the Social Security Act, as inserted by section 4081(b)(2)(C) of OBRA, is amended— (i) in subparagraph (A), by striking “claims form” each place it appears and inserting “claim form” in the first 2 places and “notice” in the third place, (ii) in subparagraph (B)(i), by inserting “under the policy” after “payment determination”, and (iii) in subparagraph (B)(ii), by striking “appropriate payment” and inserting “payment covered by such policy’. (D) Section 4081(c)(2)(B)(i) of OBRA is amended by striking “medical” and inserting “medicare”. (E) Section 4081(c)(2)(B)(ii) of OBRA is amended by inserting “or which has not enacted such legislation before July 1, 1988,” after “in which such legislation may be considered”. (2) Section 4082.— Section 4082(c) of OBRA is amended— (A) by striking “1842(b)(5) of such Act (42 U.S.C. 1395u(b)(5)” and inserting “1842(b)(2) of such Act (42 U.S.C. 1395u(b)(2))”, and (B) in paragraph (1), by striking “(5)” and inserting “(2)”. (3) Section 4084.— Section 4084 of OBRA is amended by adding at the end the following new subsection: “(c) Additional Technical Corrections.— “(1) Section 1861(bb)(2) of the Social Security Act (42 U.S.C. 1395x(bb)(2)) is amended by adding at the end the following: ‘Such term also includes, as prescribed by the Secretary, an anesthesiologist assistant.’. “(2) Section 1833(a)(1)(H) of such Act (42 U.S.C. 13951(a)(1)(H)) is amended by striking ‘lesser of the actual charge’ and inserting ‘least of the actual charge, the prevailing charge that would be recognized if the services had been performed by an anesthesiologist,’. “(3) The amendments made by this subsection shall apply to services furnished after December 31, 1988.”. (4) Section 4085.— (A) Section 1845(f) of the Social Security Act, as added by section 4085(a) of OBRA, is amended— (i) in paragraph (1), by striking “October 1st” and inserting “December 31st”, and (ii) in paragraph (2), by striking “July 1st of the following year” and inserting “the later of (A) July 1st of the following year, or (B) 45 days after the date of a reasonable charge update”. (B) Subparagraph (D) of section 1833(h)(5) of the Social Security Act, as added by section 4085(b)(1) of OBRA, is amended— 42 USC 1395l. (i) by striking “If a person” and all that follows through “under subparagraph (C)” and inserting the following: “A person may not bill for a clinical diagnostic laboratory test performed by a laboratory, other than a rural health clinic, other than on an assignment-related basis. If a person knowingly and willfully and on a repeated basis bills for a clinical diagnostic laboratory test in violation of the previous sentence”, and (ii) by striking “section 1842(j)(2)” and inserting “paragraphs (2) and (3) of section 1842Q) in the same manner such paragraphs apply with respect to a physician”. (C) Section 4085(i) of OBRA is amended— (i) in the matter inserted by paragraph (1)(A), by inserting 42 USC 1395l. a comma after “assignment-related basis”; (ii) in paragraph (1), by striking subparagraph (B); (iii) in paragraph (11), by striking “9367(a)” and inserting 42 USC 1395x. “4072(a)’, (iv) in paragraph (21)(D)(1), by inserting “by” after “(i)”; 42 USC 1395l. (v) in paragraph (21)(D)(ii), by striking “and by” and all 42 USC 1395l. that follows up to the semicolon; and (vi) by adding at the end the following: “(22) (A) Section 1832(a)(2)(F)(ii) of the Social Security Act (42 U.S.C. 1395k(a)(2)(F)(ii)) is amended by striking ‘an assignment described in section 1842(b)(3)(B)(ii)’ and inserting ‘payment on an assignment-related basis’. “(B) Section 1833(h)(5) of such Act (42 U.S.C. 1395101)(5)) is amended, in each of subparagraphs (A) and (C), by striking ‘on the basis of an assignment’ and all that follows through ‘1870(f)(1),’ and inserting ‘on an assignment-related basis’. “(C) Section 1842(b)(7)(B)(iii) of such Act (42 U.S.C. 1395u(b)(7)(B)(ii)) is amended by striking ‘the basis of’ and all that follows through ‘1870(f)(1)’ and inserting ‘an assignment-related basis’. “(23) Section 1833(1)(5)(B)(ii) of such Act (42 U.S.C. 1395k(l)(5)(B)(ii)) is amended— “(A) in the first sentence by striking ‘monetary’ and inserting ‘money’, and “(B) by amending the second sentence to read as follows: ‘The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’. “(24) The fourth sentence of section 1842(b)(3) of such Act (42 U.S.C. 1395u(b)(3)) is amended by striking ‘physician services’ and ‘physicians services’ and inserting ‘physicians’ services’ in both places. “(25) Section 1842(b)(12)(C) of such Act (42 U.S.C. 1395u(b)(12)(C)) is amended— “(A) in the first sentence by striking ‘monetary’ and inserting ‘money’, and “(B) by amending the second sentence to read as follows: ‘The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’. “(26) Section 1842(j)(2) of such Act (42 U.S.C. 1395u(j)(2)(B)) is amended— “(A) by striking ‘title’ each place it appears and inserting ‘Act’, and “(B) in subparagraph (B)— “(i) by striking ‘the imposition of, “(ii) by inserting ‘and assessments’ after ‘such penalties’, and “(iii) by amending the second sentence to read as follows: ‘The provisions of section 1128A (other than the first 2 sentences of subsection (a) and other than subsection (b)) shall apply to a civil money penalty and assessment under subparagraph (B) in the same manner as such provisions apply to a penalty, assessment, or proceeding under section 1128A(a), except to the extent such provisions are inconsistent with subparagraph (A) or paragraph (3).’. “(27) Section 1842(l)(1)(C)(i) of such Act (42 U.S.C. 1395u(l)(1)(C)(i)) is amended by inserting ‘the physician establishes that’ after ‘(i)’. “(28) Section 1866(g) of such Act (42 U.S.C. 1395cc(g)) is amended— “(A) in the first sentence by striking ‘monetary’ and inserting ‘money’, and “(B) by amending the second sentence to read as follows: ‘The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’.”. (D) (i) Section 1862(e) of the Social Security Act (42 U.S.C. 1395y(e)) is amended— (I) by striking “or section 1128A” and inserting “, 1128A, 1156, 1842(j)(2), or 1867(d)”, (II) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), and (III) by inserting “(1)” after “(e)”. (ii) Section 1890 of the Social Security Act, as added by section 42 USC 1395aaa. 10 of Public Law 100–93, is amended— (I) by striking its heading, (II) by striking “Sec. 1890” and inserting “(2)”; (III) by inserting “1842(j)(2),” before “1862(d),”; (IV) by striking “or 1866” and inserting “1866, or 1867(d)”; and (V) by transferring and adding such provision at the end 42 USC 1395y. of section 1862(e) of such Act. (j) Corrections to Part 4 of Subtitle A of Title IV (Relating to Peer Review Organizations).— (1) Section 4091.— Section 4091(a)(1)(B) of OBRA is amended by striking “renewals occurring” and inserting “contracts expiring”. (2) Section 4093.— Section 1154(a)(3) of the Social Security Act, as amended by section 4093(a) of OBRA, is amended by 42 USC 1320c–3. amending the last sentence to read as follows: “(C) The discussion and review conducted under subparagraph Health care professionals. (B)(H) shall not affect the rights of a practitioner or provider to a formal reconsideration of a determination under this part (as provided under section 1155).”. (3) Section 4094.— (A) Section 4094(a) of OBRA is amended by 42 USC 1320c–3. striking “subparagraph (B)” and inserting “subparagraph (A)”. (B) Section 1154(a)(15) of the Social Security Act, as added by section 4094(b) of OBRA, is amended by striking “at at” and inserting “in at”. (4) Section 4096.— (A) Section 4096(a)(1)(A) of OBRA is 42 USC 1395u. amended by striking “(b)(3)(ii)” and inserting “(b)(3)(B)(ii)”. (B) Section 1870(f) of the Social Security Act, as amended by section 4096(a)(2) of OBRA, is amended by striking “specified in 42 USC 1395gg. subclauses (I) and (II) of ” and inserting “of assignment specified in”. (C) Sections 1154(e)(3)(A)(i) and 1154(e)(3)(B) (42 U.S.C. 1320c–3(e)(3)(A)(i), 1320c–3(e)(2)(B)), as amended by section 4096(c) of OBRA, are each amended by striking “or (2)” before “paragraph (2)”. (5) Section 4097.— Section 4097(b) of OBRA is amended by 42 USC 1395cc. striking “1866(a)(4)(C)(ii) of such Act (42 U.S.C. 1395cc(a)(4)(C)(ii)) ” and inserting “1866(a)(3)(C)(ii) of such Act (42 U.S.C. 1395cc(a)(3)(C)(ii))”. (k) Corrections to Subtitle B of Title IV (Relating to Medic-aid).— (1) Table of contents.— The table of contents of title IV of OBRA is amended by striking the item relating to section 4105 and by redesignating the items relating to sections 4106 and 4107 as relating to sections 4105 and 4106, respectively. (2) Section 4101.— Section 1916(c)(1)of the Social Security Act, as inserted by section 4101(d)(1)(C) of OBRA, is amended by 42 USC 1396o. striking “nonfarm”. (3) Section 4102.— (A) Section 1915(d)(5)(B) of the Social Security Act, as amended by section 4102(a)(1)(B) of OBRA, is 42 USC 1396n. amended— (i) in clause (iii)(TII), by striking “75” and inserting “65”, and (ii) by inserting before “Effective on” the following: “The Secretary shall develop (by not later than October 1, 1989) a method for projecting, on a State-specific basis, the percentage increase in the number of residents in each State who are over 75 years of age for any period.”. (B) Section 1915(d)(5)(C)(i) of the Social Security Act, as amended by section 4102(a)(1)(B) of OBRA, is amended— (i) by striking “(4)(B),” and inserting “(4), and”, and (ii) by striking “, and services furnished” and all that follows through “subsection (c)”. (4) Section 4103.— Section 1905(a)(5)(B) of the Social Security Act, as inserted by section 4103(a) of OBRA, is amended by 42 USC 1396d. striking “subparagraph” and inserting “clause”. (5) Section 4104.— (A) Paragraph (1) of section 4104(1) of OBRA is amended to read as follows: 42 USC 1396a. “(1) by striking ‘, or’ at the end of subclause (I)() and inserting a semicolon and by inserting ‘or’ at the end of subclause ()(); and”. (B) Section 1902(a)(10)(A)(ii)()(I) of the Social Security Act, as added by section 4104(2) of OBRA, is amended— (i) by striking “are more restrictive” and inserting “may be more restrictive”, and (ii) by striking the period at the end and inserting a semicolon. (6) Section 4112.— (A) Section 4112 of OBRA is amended— (i) in subsection (a)(2)(A)— (I) by striking “such date” and inserting “April 1, 1989”, and (II) by inserting “, effective for inpatient hospital services provided on or after July 1, 1989” before the period; (ii) in subsection (a)(2)(B)— (I) by striking “such date” and inserting “April 1, 1990”, and (II) by inserting “, effective for inpatient hospital services provided on or after July 1, 1990” before the period; (iii) the undesignated paragraph at the end of subsection (a) is amended— (I) by striking “June 30 of each year in which the State is required to submit” and inserting “90 days after the date a State submits”, (II) by indenting all of such paragraph 2 ems, and (III) by designating the first two sentences thereof as paragraph (3) and the last sentence thereof as paragraph (4); (iv) in subsection (b)(2), by striking “the State plan” and inserting “a State plan”; (v) in subsection (b)(3)(B)(i), by inserting “, less the portion of any cash subsidies described in clause (i)(II) in the period reasonably attributable to inpatient hospital services” after “charity care in a period”; (vi) in subsection (c)— (I) by striking “paragraphs (2)(A) and (2)(B)” and inserting “paragraphs (1)(B) and (2)(A) of subsection (a)”, (II) by striking “paragraph (2)(A)” and “paragraph (2)(B)” and inserting “such paragraph (1)(B)” and “such paragraph (2)(A)”, respectively, (III) in paragraph (1), by inserting “at least” after “equal to”, (IV) in paragraph (2), by inserting “(without regard to the election made by a State under subsection (b)(1))” after “payment) and”, (V) in the matter after paragraph (2), by inserting “at least” before “one-third” and before “two-thirds”, and (VI) by adding at the end the following new Children and youth. sentences: “In the case of a hospital described in subsection (d)(2)(A)(i) (relating to children’s hospitals), in computing the hospital’s disproportionate share adjustment percentage for purposes of paragraph (1)(B) of this subsection, the disproportionate patient percent-age (defined in section 1886(d)(5)(F)(vi)) shall be computed by substituting for the fraction described in subclause (I) of such section the fraction described in subclause (ID of that section. If a State elects in a State plan amendment under subsection (a) to provide the State and local governments. payment adjustment described in paragraph (2), the State must include in the amendment a detailed description of the specific methodology to be used in determining the specified additional payment amount (or increased percentage payment) to be made to each hospital qualifying for such a payment adjustment and must publish at least annually the name of each hospital qualifying for such a payment adjustment and the amount of such payment adjustment made for each such hospital.”; and (vii) in subsection (e)— (I) by inserting “(1)” after “Special Rule.—”, (II) by inserting “based on a pooling arrangement involving a majority of the hospitals participating under the plan” after “payment adjustments”, and (III) by adding at the end the following new paragraph: “(2) In the case of a State that used a health insuring organization before January 1, 1986, to administer a portion of its plan on a State-wide basis, during the 3-year period beginning on July 1, 1988— “(A) the requirements of subsections (b) and (c) shall not apply if the aggregate amount of the payment adjustments under the plan for disproportionate share hospitals (as defined under the State plan) is not less than the aggregate amount of payment adjustments otherwise required to be made if such subsections applied, and “(B) subsection (d)(2)(B) shall apply to hospitals located in Urban areas. Rural areas. 42 USC 1396a note. urban areas, as well as in rural areas.”;. (B) Section 4112 of OBRA is further amended— (i) by striking “(a) Implementation of Requirement.—” and inserting the following: “(a) In General.— Title )(I)( of the Social Security Act is amended— “(1) by redesignating section 1923 as section 1924, and 42 USC 1396s. “(2) by inserting after section 1922 the following new section: “Sec. 1923. “ ‘adjustment in payment for inpatient hospital services furnished by disproportionate share hospitals (a) Implementation of Requirement.— (ii) in subsection (a)(1), by striking “A State’s plan under title )(I)( of the Social Security Act” and inserting “A State plan under this title”; (iii) in subsection (a)(1), by striking “of such Act”; (iv) in subsection (a), by striking “of Health and Human Services” each place it appears; (v) in the matter following paragraph (2)(B) of subsection (a), by striking “of the Social Security Act”; (vi) in subsections (b) and (c), by striking “under title )(I)( of the Social Security Act” each place it appears and inserting “under this title”, (vii) in subsection (d)(2)(B), by striking “of the Social Security Act”; (viii) in subsections (b)(2), (b)(3), and (d)(2)(B), by striking double quotation marks enclosing terms and inserting single quotation marks; (ix) by placing opening double quotation marks at the beginning of any matter with an initial paragraph indentation (beginning with subsection (a)(1)) and closing double quotation marks at the end of subsection (e); and (x) by adding at the end the following: “(b) Conforming Amendment.— Section 1903(i)(3) of such Act (42 U.S.C. 1396b(i)(3)) is amended by inserting ‘(other than amounts attributable to the special situation of a hospital which serves a disproportionate number of low income patients with special needs)’ before ‘to the extent’.”. (7) Section 4113.— Section 4113 of OBRA is amended— (A) in the matter inserted by subsection (a)(1)(B)— (i) by moving the left margin of the matter 2 ems to the left, and (ii) by striking “subparagraph (G)” and inserting “subparagraph (E) or (G)”; (B) in the matter inserted by subsection (a)(2), by striking “paragraph (2)(G) or (6)” and inserting “paragraph (2)(B)(iii), (2)(E), (2)(G), or (6)”; (C) in subsection (b)(2)(ii), by striking “such”; and (D) by striking subsection (d) and redesignating subsection (e) as subsection (d). (8) Section 4114.— (A) Section 4114 of OBRA is amended in paragraph (1), by striking “ ‘(1)’ ” and inserting “ ‘(o)(1)’ ”. (B) Section 1905(o)(1)(B) of the Social Security Act, as added by section 4114(3) of OBRA, is amended— (i) by striking “only”, and (ii) by striking “immunodeficiency syndrome” and inserting “immune deficiency syndrome (AIDS)”. (9) Section 4115.— (A) Section 4115 of OBRA is amended— (A) in subsection (b)(4)(B), by striking “program” and inserting “Program”, (B) in subsection (c)— (i) by inserting “under section 9121 of this Act” after “Upon approval”, and (ii) by striking “1916, and 1924” and inserting “1902(e)(1), and 1916”, and (C) by adding at the end the following: “(d) Extension of Texas State Waiver.— Section 9523(a) of the 100 Stat. 217 . Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by striking ‘January 1, 1989’ and inserting ‘January 1, 1990’.”. (10) Section 4118.— (A) Section 1915(c)(10) of the Social 42 USC 1396n. Security Act, as added by section 4118(b) of OBRA, is amended— (i) by striking “No waiver under this subsection shall limit by an amount less than 200” and inserting “The Secretary shall not limit to fewer than 200”, and (ii) by striking “under such waiver” and inserting “under a waiver under this subsection”. (B) Section 4118(e) of OBRA is amended— (i) in paragraph (3), by striking “amendment” and inserting “amendments”, and (ii) in paragraph (1)— (I) by inserting “(A)” after “(1)”, (II) by striking “1128A(a)(D” and “1320a–7(a)(1)” and 42 USC 1320a–7a, 1320a–7. 42 USC 1320a–7a. inserting “1128(a)” and “1320a–7(a))”, respectively, and (III) by adding at the end the following: “(B) Section 1128A of such Act is amended by adding at the 42 USC 1320a–7. end the following new subsection: “(l) ‘A principal is liable under this section for the actions of the principal’s agent acting within the scope of the agency.’” (C) Section 1128(d)(3)(B)(u) of the Social Security Act, as added by section 4118(e)(2)(B) of OBRA, is amended by striking “under a program”. (D) Section 4118(e) of OBRA is amended by redesignating 42 USC 1320a–7a note. paragraph (3) as paragraph (14) and by inserting after paragraph (2) the following new paragraphs: “(3) Section 1128(b)(8)(A)(i) of such Act is amended by inserting after ‘(A)(i)’ the following: ‘who has a direct or indirect ownership or control interest of 5 percent or more in the entity or’. “(4) Section 1128(d) of such Act is amended— “(A) in paragraph (1), by striking ‘subsection (b)’ and inserting ‘this section and section 1128A’, and “(B) in paragraph (3)(A), by striking ‘under a program’. “(5) Section 1128(i) of such Act is amended— “(A) in the matter before paragraph (1), by striking ‘a physician or other individual and inserting “an individual or entity”, “(B) in paragraphs (1) through (4), by striking ‘physician or other individual’ each place it appears and inserting ‘individual or entity’, and “(C) in paragraph (4), by striking ‘first offender or other program’ and inserting ‘first offender, deferred adjudication, or other arrangement or program’. “(6) Section U28A(a)(D(D) of such Act is amended— “(A) by striking ‘excluded under’ and inserting ‘excluded from’, and “(B) by inserting ‘or as a result of the application of the provisions of section 1842(j)(2) or section 1867(d)(2)’ after ‘or 1866(b)’. “(7) The second sentence of section 1128A(c)(1) of such Act is amended— “(A) by inserting “, request for payment, or other occurrence described in this section’ after ‘any claim’, and “(B) by inserting “, the request for payment was made, or the occurrence took place’ after ‘claim was presented’. “(8) Section 1128A(i) of such Act is amended, in the matter before paragraph (1), by striking ‘subsection’ and inserting ‘section’. “(9) Section 1128A(i)(1) of such Act is amended by inserting ‘or title )()(’ after ‘title V’. “(10) Section 1128A of such Act is further amended— “(A) in the matter in subsection (a) before paragraph (1), by inserting but excluding a beneficiary, as defined in subsection (1)(5)’ after ‘other entity’, “(B) in subsection (i)(2), by striking ‘submitted by’ and all that follows through the end and inserting ‘for payments for items and services under title V, )(VIII, )(I)(, or )()( of this Act.’, and “(C) by adding at the end the following new paragraph: “’(5) The term “beneficiary” means an individual who is eligible to receive items or services for which payment may be made under title V, XVIII, XIX, or XX but does not include a provider, supplier, or practitioner.’. “(11) Section 1903(i)(2) of such Act (42 U.S.C. 1396b(i)(2)) is amended— “(A) in subparagraph (A), by striking ‘in the State plan under this title pursuant to section 1128 or section 1128A’ and inserting ‘under title V, XVIII, or XX or under this title pursuant to section 1128, 1128A, 1156, 1842(j)(2), or 1867(d)(2)’, and “(B) in subparagraph (B), by striking ‘pursuant to section 1128 or section U28A from participation in the program under this title’ and inserting ‘from participation under title V, XVIII, or XX or under this title pursuant to section 1128, 1128A, 1156, 1842(j)(2), or 1867(d)(2)’. “(12) Section 504(b)(6) of such Act (42 U.S.C. 704(b)(6)) is amended by striking ‘pursuant to section 1128 or section 1128A from participation in the program under this title’ each place it appears and inserting ‘under this title or title XVIII, XIX, or XX pursuant to section 1128, U28A, 1156, 1842(j)(2), or 1867(d)(2)’. “(13) Section 2005(a)(9) of such Act (42 U.S.C. 1397d(a)(9)) is amended by striking ‘pursuant to section 1128 or section 1128A from participation in the program under this title’ each place it appears and inserting ‘under this title or title V, XVIII, or XIX pursuant to section 1128, 1128A, 1156, 1842(j)(2), or 1867(d)(2)’.”. (E) Section 4118(f)(1) of OBRA is amended by striking “4111(g)(8)” and inserting “4211(h)(8)”. (F) Section 4118(g)(D(B) of OBRA is amended by striking “insert” and inserting “inserting”. (G) Section 4118(h) of OBRA is amended— (i) by inserting a dash after “Expenses.”; (ii) in paragraph (1), by striking “Section 1902(a)(17) of the Social Security Act (42 U.S.C. 1396a(a)(17)) is amended” and inserting “Sections 1902(a)(17) and 1903(f)(2) of the Social Security Act (42 U.S.C. 1396a(a)(17), 1396b(f)(2)) are each amended”; (iii) in paragraph (2), by striking “(2) The amendment made by paragraph (1)” and inserting “(3) The amendments made by this subsection”, and (iv) by inserting after paragraph (1) the following new paragraph: “(2) The first sentence of section 1902(f) of such Act (42 U.S.C. 1396a(f)) is amended by inserting after ‘as recognized under State law’ the following: ‘regardless of whether such expenses are reimbursed under another public program of the State or political subdivision thereof’.”. (H) Section 1915(c)(7)(B) of the Social Security Act, as added by section 4118(k) of OBRA, is amended by inserting before the period at the end the following: “, without regard to the availability of beds for such inpatients”. (I) Section 4118(1)(1) of OBRA is amended by inserting “, as redesignated by section 4102(a),” after “1396n(h))”. (J) Section 9414(b)(3) of the Omnibus Budget Reconciliation Act of 1986, as amended by section 4U8(o)(1)(C) of OBRA, is 100 Stat. 2064. amended by striking “nonfarm”. (K) Section 4118(o)(2)(A) of OBRA is amended by inserting 101 Stat. 1330–158. “each place it appears” before “and inserting”. (L) Section 4118(p)(9) of OBRA is amended by striking 42 USC 1396s. “1925(a)” and “(4111(a))” and inserting “1923(a)” and “4211(a)”, respectively. (M) Section 4118(p) of OBRA is amended by adding at the end the following new paragraph: “(11) Paragraph (5) of section 9432(c) of the Omnibus Budget Reconciliation Act of 1986 is amended to read as follows: 42 USC 1396a note. Reports. “‘(5) The Secretary shall submit an interim report on the results of the study, including an analysis of the geographic variations under paragraph (2), to the Congress not later than January 1, 1990, and shall report the final results of the study to the Congress not later than January 1, 1992.’.”. (11) Omitted section.— (A) Part 2 of subtitle B of title IV of OBRA is amended by adding at the end the following new section: “SEC. 4119. STUDY OF MEANS OF RECOVERING COSTS OF NURSING FACILITY SERVICES FROM ESTATES OF BENEFICIARIES. “The Secretary of Health and Human Services shall study the means of recovering amounts from estates of deceased medicare beneficiaries (or the estates of the spouses of such deceased beneficiaries) to pay for the medical assistance for skilled nursing facility or intermediate care facility services furnished, under title XIX of the Social Security Act, to such medicare beneficiaries. The Secretary Reports. shall report to Congress, not later than December 31, 1988, on such means, and include appropriate recommendations for changes in legislation.”. (B) The table of contents of title IV of OBRA is amended by inserting after the item relating to section 4118 the following new item: “Sec. 4119. Study of means of recovering costs of nursing facility services from estates of beneficiaries.”. (12) Medicare conforming amendment to section 4014 of obra.— (A) Paragraph (5) of section 1903(m) of the Social Security Act (42 U.S.C. 1396b(m)) is amended to read as follows: (5) (A) If the Secretary determines that an entity with a contract under Contracts. this subsection— (i) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual; (ii) imposes premiums on individuals enrolled under this subsection in excess of the premiums permitted under this title; “(iii) acts to discriminate among individuals in violation of the provision of paragraph (2)(A)(v), including expulsion or refusal to re-enroll an individual or engaging in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this subsection) by eligible individuals with the organization whose medical condi- tion or history indicates a need for substantial future medical services; or “(iv) misrepresents or falsifies information that is furnished— “(I) to the Secretary or the State under this subsection, or “(II) to an individual or to any other entity under this subsection, the Secretary may provide, in addition to any other remedies available under law, for any of the remedies described in subparagraph (B). “(B) The remedies described in this subparagraph are— “(i) civil money penalties of not more than $25,000 for each determination under subparagraph (A), or, with respect to a determination under clause (iii) or (iv)(I) of such subparagraph, of not more than $100,000 for each such determination, plus, with respect to a determination under subparagraph (A)(ii), double the excess amount charged in violation of such subparagraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under subparagraph (A)(iii), $15,000 for each individual not enrolled as a result of a practice described in such subparagraph, or “(ii) denial of payment to the State for medical assistance furnished under the contract under this subsection for individuals enrolled after the date the Secretary notifies the organization of a determination under subparagraph (A) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under clause (i) in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’. (B) The amendment made by subparagraph (A) shall apply to actions occurring on or after the date of the enactment of this Act. (13) Treatment of educationally-related services.— (A) Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by inserting after subsection (b) the following new subsection: “(c) Nothing in this title shall be construed as prohibiting or restricting, or authorizing the Secretary to prohibit or restrict, payment under subsection (a) for medical assistance for covered services furnished to a handicapped child because such services are included in the child’s individualized education program established pursuant to part B of the Education of the Handicapped Act or furnished to a handicapped infant or toddler because such services are included in the child’s individualized family service plan adopted pursuant to part H of such Act.”. (B) The amendment made by subparagraph (A) shall take effect on the date of the enactment of this Act. (14) Clarification of term “institution for mental diseases”.— (A) Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended by inserting after subsection (h) the following new subsection: “(i) The term ‘institution for mental diseases’ means a hospital, nursing facility, or other institution of more than 16 beds, that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services.”. (B) The amendment made by subparagraph (A) shall take Effective date. 42 USC 1396d note. effect on the date of the enactment of this Act. (15) Eligibility verification technical correction.— (A) Section 1137 of the Social Security Act (42 U.S.C. 1320b–7) is amended by adding at the end the following new subsection: “(f) Subsections (a)(1) and (d) shall not apply with respect to aliens Aliens. seeking medical assistance for the treatment of an emergency medical condition under section 1903(v)(2).”. (B) The amendment made by subparagraph (A) shall apply as Effective date. 42 USC 1320b–7 note. if it were included in the enactment of section 9406 of the Omnibus Budget Reconciliation Act of 1986. (16) Technical corrections relating to presumptive eligibility.— (A) Section 1920(d)(1)(B) of the Social Security Act (42 U.S.C. 1396r–1(d)(D(B)) is amended by striking “by a qualified provider” and inserting “by a provider that is eligible for payments under the State plan”. (B) Section 192()(b)(2)(D) of such Act (42 U.S.C. 1396r–1(b)(2)(D)) is amended— (i) in clause (i)— (I) in subclause (I), by striking “or section 330” and inserting 330, or 340” and by striking “or” at the end, (II) in subclause (II), by striking the semicolon at the end and inserting “, or”, and (III) by adding after subclause (II) the following new subclause: “(III) title V of the Indian Health Care Improvement Act;”; (ii) in clause (ii), by striking “or” at the end; and (iii) by adding at the end the following new clause: “(iv) is the Indian Health Service or is a health program Indians. or facility operated by a tribe or tribal organization under the Indian Self-Determination Act (Public Law 93–638).”. (C) The amendments made by this paragraph shall be effective Effective date. 42 USC 1396r–1 note. as if they were included in section 9407(b) of the Omnibus Budget Reconciliation Act of 1986. (17) Waiver for children infected with aids or drug dependent at birth.— (A) Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended— (i) by redesignating subsection (f) as paragraph (2); (ii) in subsection (e), by striking paragraph (2) and by redesignating such subsection as subsection (f); (iii) by inserting after subsection (d) the following new subsection: “(e) (1) (A) Subject to paragraph (2), the Secretary shall grant a State and local governments. Prescription drugs. Children and youth. Transportation. waiver to provide that a State plan approved under this title shall include as ‘medical assistance’ under such plan payment for part or all of the cost of nursing care, respite care, physicians’ services, prescribed drugs, medical devices and supplies, transportation services, and such other services requested by the State as the Secretary may approve which are provided pursuant to a written plan of care to a child described in subparagraph (B) with respect to whom there has been a determination that but for the provision of such services the infants would be likely to require the level of care provided in a hospital or nursing facility the cost of which could be reimbursed under the State plan. “(B) Children described in this subparagraph are individuals under 5 years of age who— “(i) at the time of birth were infected with (or tested positively for) the etiologic agent for acquired immune deficiency syndrome (AIDS), “(ii) have such syndrome, or “(iii) at the time of birth were dependent on heroin, cocaine, or phencyclidine, and with respect to whom adoption or foster care assistance is (or will be) made available under part E of title IV. “(2) A waiver shall not be granted under this subsection unless the State provides assurances satisfactory to the Secretary that— “(A) necessary safeguards (including adequate standards for provider participation) have been taken to protect the health and welfare of individuals provided services under the waiver and to assure financial accountability for funds expended with respect to such services; ”(B) under such waiver the average per capita expenditure estimated by the State in any fiscal year for medical assistance provided with respect to such individuals does not exceed 100 percent of the average per capita expenditure that the State reasonably estimates would have been made in that fiscal year for expenditures under the State plan for such individuals if the waiver had not been granted; and “(C) the State will provide to the Secretary annually, consistent with a data collection plan designed by the Secretary, information on the impact of the waiver granted under this subsection on the type and amount of medical assistance provided under the State plan and on the health and welfare of recipients. “(3) A waiver granted under this subsection may include a waiver of the requirements of section 1902(a)(1)(relating to statewideness) and section 1902(a)(10)(B) (relating to comparability). A waiver under this subsection shall be for an initial term of 3 years and, upon the request of a State, shall be extended for additional five-year periods unless the Secretary determines that for the previous waiver period the assurances provided under paragraph (2) nave not been met. “(4) The provisions of paragraph (6) of subsection (d) shall apply to this subsection in the same manner as it applies to subsection (a).”; and (iv) in subsection (h), by striking “or (d)” and inserting“(d), or (e)”. (B) Section 1902(a)(10)(A)(ii)(VI) of such Act (42 U.S.C. 1396a(a)(10)(A)(ii)(VI)) is amended by striking “(c) or (d)” each place it appears and inserting “(c), (d), or(e)”. (l) Corrections Relating to Subtitle C of Title IV (Nursing Home Reform).— (1) Section 4201.— (A) Section 1819 of the Social Security Act, 42 USC 1395i–3. as added by section 4201(a)(3) of OBRA, is amended— (i) in subsection (b)(3)(C)(i)(1), by striking “October 1, 1990” the second place it appears and inserting “January 1, 1991”; (ii) in subsection (b)(4)(C)(i)— (I) by inserting “licensed” after “24-hour”, (II) by striking “employ” and inserting “use”, and (III) by striking “during the day tour of duty (of at least 8 hours a day)” and inserting “at least 8 consecutive hours a day,”; (III) in subsection (b)(5)(A), by striking “October 1, 1989” and all that follows through “July 1, 1989” and inserting “January 1, 1990”; (iv) in subsection (e)(1)(A), by striking “March 1, 1989” and inserting “January 1, 1989”, (v) in subsection (e)(1)(B), by striking “March 1, 1990” and inserting “January 1, 1990”; (vi) in subsection (e)(2)(A), by striking “March 1, 1989” and inserting “January 1, 1989’”; (vii) in subsection (e)(3), by striking “October 1, 1990” and inserting “October 1, 1989”; (viii) in subsection (e)(5), by striking “July 1, 1989” and inserting “July 1, 1990”; (ix) in subsection (f)(3), by striking “October 1, 1989” and inserting “October 1, 1988”; (x) in subsection (f)(6)(A), by striking “July 1, 1989” and inserting “January 1, 1989”; and (xi) in subsection (f)(6)(B), by striking “October 1, 1990” and inserting “April 1, 1990”. (B) Section 4201(d) of OBRA is amended— 42 USC 1395x. (i) by striking “Amendment.—” (ii) by striking “1919(a)(2)” and inserting “1819(a)(1)”, and (iii) by adding at the end the following new paragraph: “(2) Section 1861(n) of such Act (42 U.S.C. 1395x(n)) is amended by striking ‘or (j)(1) of this section’ and inserting ‘or of section 1819(a)(D’.”. (2) Sections 4201 and 4211.— (A) Sections 1819(b)(3)(A)(iv) and 1919(b)(3)(A)(iv) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, 42 USC 1395i–3, 1396r. are amended by striking “in the case of a resident eligible for benefits under part A of this title” and by striking “in the case of a resident eligible for benefits under part A of title XVIII respectively”. (B) Sections 1819(b)(3)(A)(iii) and 1919(b)(3)(A)(iii) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, are amended by striking “in the case of a resident eligible for benefits under title )(I)(,” and “in the case of a resident eligible for benefits under this title,”, respectively. (C) Subclause (III) of each of sections 1819(b)(3)(B)(ii) and 1919Cb)(3)(B)(ii) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, is amended to read as follows: “(III) The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under this clause in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).”. (D) Sections 1819(b)(5) and 1919(b)(5) of the Social Security Act, as added by section 4201(a)(3) of OBRA and as inserted by section 4211(a)(3) of OBRA, respectively, are each amended— (i) in subparagraph (A), by striking “, who is not a licensed health care professional (as defined in subparagraph (E)),”, (ii) in subparagraph (A)(ii), by striking “such services” and inserting “nursing or nursing-related services”, and (iii) in subparagraph (G), by inserting “physical or occupational therapy assistant,” after “occupational therapist,”. (E) Effective as of the date of the enactment of this Act and until the effective date of section 1819(c) of such Act, section 1861(j) of the Social Security Act is deemed to include the requirement described in section 1819(c)(3)(A) of such Act (as added by section 4201(a)(3) of OBRA). (F) Sections 1819(c)(2)(A)(v) and 1919(c)(2)(A)(v) of the Social Security Act, as added by section 4201(a)(3) and as inserted by 42 USC 13951–3, 1396r. section 4211(a)(3) of OBRA, respectively, are each amended by striking “an allowable charge” and all that follows through the semicolon and inserting “for a stay at the facility;”. (G) Sections 1819(c)(6) and 1919(c)(6) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, are each amended— (i) in subparagraph (A)(ii), by striking “once the facility accepts” and inserting “upon”, and (ii) in subparagraph (B), by striking “a facility’s acceptance of”. (H) Sections 1819(e)(2)(B) and 1919(e)(2)(B) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively are each amended by inserting State and local governments. Public information. Records. after the first sentence the following sentence: “The State shall make available to the public information in the registry.”. (I) Sections 1819(e)(3), 1819(f)(3), 1919(e)(3), and 1919(f)(3) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 42U(a)(3) of OBRA, are each amended— (i) by inserting “and discharges” after “transfers” (ii) by inserting “and discharges” after “transfers”. (J) Sections 1819(f)(2)(A)(i)(I) and 1919tf)(2)(A)(i)(I) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, are each amended by striking “cognitive, behavioral and social care” and inserting “recognition of mental health and social service needs”. (K) Sections 1819(f)(7) and 1919(f)(7) of the Social Security Act, as added by section 4201(a)(3) and as inserted by section 4211(a)(3) of OBRA, respectively, are each amended by striking “patients” and inserting “residents”. (L) (i) Section 1819(1)(7)(8) of the Social Security Act, as added by section 4201(a)(3), is amended by striking “shall not” and inserting “shall”. (ii) Section 1919(f)(7)(B) of the Social Security Act, as inserted by section 4211(a)(3) of OBRA, is amended by striking “do not”. (3) Section 4211.— (A) Section 1919(b)(4)(C) of the Social Security Act, as inserted by section 4211(a) of OBRA, is amended— (i) by striking “registered nurse” each place it appears and inserting “registered professional nurse”; (ii) by striking “employ” and inserting “use”; (iii) by striking “(u) Facility waivers.—” and all that follows through “(i) Waiver” and inserting “(ii) Waiver”; (iv) by striking “and subject to clause (ii)” and inserting “and subject to clause (iii)”; (v) by striking “(ii) Assumption” and inserting “(iii) Assumption”; and (vi) in clause (iii), as so redesignated, by striking “excercise” and inserting “exercise”. (B) Section 1919(b)(5)(A) of the Social Security Act, as added 42 USC 1396r. by section 4211(a)(3) of OBRA, is amended by striking “subparagraph (E)” and inserting “subparagraph (F)”. (C) Effective as of the date of the enactment of this Act and Effective date. until the effective date of section 1919(c) of such Act, section 1905(c) of the Social Security Act is deemed to include the 42 USC 1396d. requirement described in section 1919(c)(3)(A) of such Act (as inserted by section 4211(a)(3) of OBRA). (D) Section 1919 of the Social Security Act, as inserted by section 4211(a)(3) of OBRA, is amended— (i) in subsection (e)(1)(A), by striking “September 1, 1988” and inserting “January 1, 1989”; (ii) in subsection (e)(1)(B), by striking “September 1, 1990” and inserting “January 1, 1990”; (iii) in subsection (e)(7)(E), by striking “October 1, 1988” and inserting “April 1, 1989”; and (iv) in subsection (f)(2), by striking “July 1, 1988” and inserting “September 1, 1988”. (E) Section 1902(a)(28)(D)(i) of the Social Security Act, as amended by section 4211(b)(1)(B) of OBRA, is amended by striking 42 USC 1396a. “1919(f)” and all that follows through “instrument)” and inserting “1919(e)”. (F) Section 4211(d)(2) of OBRA is amended by striking “For 42 USC 1396b note. calendar quarters during fiscal years 1988 and 1989” and inserting “For the 8 calendar quarters (beginning with the calendar quarter that begins on July 1, 1988)”. (G) Section 4211(h)(10)(G) of OBRA is amended by adding 42 USC 1396n. before the period at the end the following: “, and by striking ‘skilled nursing facility or intermediate care facility’ in subparagraph (B) and inserting ‘nursing facility’”. (H) Section 4211(h)(2) of OBRA is amended— 42 USC 1396a. (i) in subparagraph (C), by striking “inserting ‘nursing facilities’” each place it appears and inserting “inserting ‘nursing facilities and for intermediate care facilities for the mentally retarded’ ”, (ii) in subparagraph (D)(i), by striking “inserting ‘nursing facility’ ” and inserting “inserting ‘nursing facility or intermediate care facility for the mentally retarded’ ”, and (iii) in subparagraph (D)(ii), by striking “inserting ‘nursing facility’ ” and inserting “inserting ‘nursing facility services or services in an intermediate care facility for the mentally retarded”. (I) Subparagraph (B) of section 4211(h)(12) of OBRA is 42 USC 1396p. amended to read as follows: “(B) in subsection (c)(2)(B)(ii), by striking ‘skilled’ each place it appears.”. (4) Section 4202.— Section 1819(g)(2)(C)(i) of the Social Security Act, as added by section 4202(a) of OBRA, is amended by 42 USC 1395i—3. striking “October 1, 1990” and inserting “January 1, 1990”. (5) Sections 4202 and 4212.— Sections 1819(g) and 1919(g) of the Social Security Act, as added by sections 4202(a)(2) and 42 USC 1395i–3, 1396r. 4212(a) of OBRA, respectively, are amended— (A) in paragraph (1)(C), by striking “, review,” and inserting “and timely review”; (B) in the first sentence of paragraph (1)(C), by inserting “or by another individual used by the facility in providing services to such a resident” after “a nursing facility”; (C) by striking the second sentence of paragraph (1)(C) State and local governments. Health care professionals. and inserting the following: “The State shall, after notice to the individual involved and a reasonable opportunity for a hearing for the individual to rebut allegations, make a finding as to the accuracy of the allegations. If the State finds that a nurse aide has neglected or abused a resident or misappropriated resident property in a facility, the State shall notify the nurse aide and the registry of such finding. If the State finds that any other individual used by the facility has neglected or abused a resident or misappropriated resident property in a facility, the State shall notify the appropriate licensure authority.”; (D) in paragraph (1)(D), by striking “to establish standards under subsection (f)” and inserting “to issue regulations to carry out this subsection”; (E) in paragraph (2)(A)(i), by amending the third sentence to read as follows: “The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).”; (F) in paragraph (3)(D) (relating to special surveys of compliance, as redesignated by paragraph (6)(A) in the case of section 1919(g)), by striking “on that basis” and inserting “on the basis of that survey”; and (G) in paragraph (4), by striking “chronically”. (6) Section 4212.— (A) Section 1919(g)(3) of the Social Security Act, as added by section 4212(a) of OBRA, is amended by redesignating the second subparagraph (C) (relating to special surveys of compliance) as subparagraph (D). (B) Section 4212(b) of OBRA is amended to read as follows: “(b) Posting Survey Results.— Section 1919(c) of such Act is amended by adding at the end the following new paragraph: “(7) Posting or survey results.— A nursing facility must post in a place readily accessible to residents, and family members and legal representatives of residents, the results of the most recent survey of the facility conducted under subsection (g).’”. (C) Section 1902(a)(33)(B) of the Social Security Act, as amended by section 4212(d)(3) of OBRA, is amended by striking “1919(d)” and inserting “1919(g)”. (D) Section 4212(e)(1)(B) of OBRA is amended by inserting “provided” after “services” each place it appears. (E) Section 4212(e) of OBRA is amended by adding at the end the following new paragraph: “(5) Section 1922(e) of such Act, as redesignated and transferred by section 4211(a)(2) of this Act, is amended by striking ‘1910(c)’ in paragraphs (1) and (2)(A) and inserting ‘1910(b)’.”. (7) Sections 4203 and 4213.— (A) Sections 1819(h)(2)(B)(ii) and 1919(h)(3)(C)(ii) of the Social Security Act, as added by sections 4203(a)(2) and 4213(a) of OBRA, respectively, are each amended 42 USC 1395i–3, 1396r. by striking “and the Secretary” and all that follows through “1128A.” and inserting the following: “. The provisions of section 1128A (other than subsections (a) and (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).”. (B) Sections 1819(h)(6) and 1919(h)(9) of the Social Security Act, as added by sections 4203(a)(2) and 4213(a) of OBRA, respectively, are each amended by inserting “by such facilities” after “shall be made available”. (8) Section 4213.— (A) Section 4213(a) of OBRA is amended by 42 USC 1396r. striking “as inserted by section 4201 and amended by section 4202” and inserting “as inserted by section 4211 and amended by section 4212”. (B) Section 1919(h) of the Social Security Act, as added by section 4213(a) of OBRA, is amended— (i) in the last sentence of paragraph (1), by striking “(2)(A)(i)” and inserting “(2)(A)(ii)”, (ii) in the second sentence of paragraph (2)(B)(i), by striking “or otherwise”, and (iii) in paragraph (5), by striking “State and the Secretary” and inserting “State or the Secretary, respectively”. (C) Paragraph (1) of section 4213(b) of OBRA is amended by 42 USC 1396a. striking “1902” and all that follows through the end and inserting the following: “1902(i) of such Act (42 U.S.C. 1396a(i)) is amended— “(A) in paragraph (1), by striking ‘skilled nursing facility or intermediate care facility’ and inserting ‘intermediate care facility for the mentally retarded’; “(B) in paragraph (1), by striking ‘the provisions of section 18610) or section 1905(c), respectively,’ and inserting ‘the requirements for such a facility under this title’; and “(C) in paragraphs (2) and (3), by striking ‘the provisions of section 18610) or section 1905(c) (as the case may be)’ and inserting ‘the requirements for such a facility under this title’.”. (9) Section 4204.— (A) Section 4204(a) of OBRA is amended by 42 USC 1395i—3 note. striking “extended care”. (B) Section 4204 of OBRA is amended— (i) in subsection (a), by striking “made by this part” and inserting “made by sections 4201 and 4202 (relating to skilled nursing facility requirements and survey and certification requirements)”, (ii) by redesignating subsection (c) as subsection (d), and (iii) by inserting after subsection (a) the following new subsection: “(b) Enforcement.— (1) Except as otherwise specifically provided Effective date. n section 1819 of the Social Security Act, the amendments made by section 4203 of this Act apply January 1, 1988, without regard to whether regulations to implement such amendments are promulgated by such date. “(2) In applying the amendments made by section 4203 of this Act or services furnished by a skilled nursing facility before October 1, 1990, any reference to a requirement of subsection (b), (c), or (d), of section 1819 of the Social Security Act is deemed a reference to the provisions of section 1861(j) of such Act.”. (10) Section 4214.— Section 4214 of OBRA is amended— (A) by striking “(c) Transitional Rule.—”and inserting “(2)”, (B) by inserting “of section 1919 of the Social Security Act” after “(b), (c), or (d)”, and (C) by redesignating subsection (d) as subsection (c). (m) Corrections to Subtitle E of Title IV (Relating to Rural Health).— (1) Section 4401.— Section 711(b)(1) of the Social Security Act, 42 USC 912. as added by section 4401 of OBRA, is amended by striking “section 4083 of the Omnibus Budget Reconciliation Act of 1987” and inserting “section 4403 of the Omnibus Budget Reconciliation Act of 1987 (as such section pertains to rural health issues)”. (2) Section 4403.— (A) Section 4403 of OBRA is amended— (i) in the heading, by striking “EXPERIMENTS AND DEMONSTRATION PROJECTS RELATING TO RURAL HEALTH CARE ISSUES” and inserting “RESEARCH AND DEMONSTRATION PROJECTS ON RURAL AND INNER-CITY HEALTH ISSUES”; (ii) in subsection (a)— (I) by striking “Set Aside.—” and inserting “Set Asides for Issues of Health Care in Rural Areas and In Inner-City Areas.—(1)”, (II) by striking “expended in each fiscal year” and all that follows through “1972” and inserting “annually appropriated to, and expended by, the Health Care Financing Administration for the conduct of research and demonstration projects in fiscal years 1988, 1989, and 1990”, (III) by striking “experiments” and inserting “research”; (iii) by adding at the end the following new paragraph: “(2) Not less than ten percent of the total amounts annually appropriated to, and expended by, the Health Care Financing Administration for the conduct of research and demonstration projects in fiscal years 1988, 1989, and 1990 shall be expended for research and demonstration projects relating exclusively or substantially to issues of providing health care in inner-city areas, including (but not limited to) the impact of the payment methodology under section 1886(d) of the Social Security Act on the financial viability of inner-city hospitals and the impact of medicare policies on access to (and the quality of) health care in inner-city areas.”; and (iv) in subsection (b)— (I) by striking “of experiments” and inserting “of research”, (II) by inserting “or to inner-city health issues” after “rural health issues”, and (III) by striking “experiments and”. (B) The item in the table of contents of OBRA relating to section 4403 is amended to read as follows: “Sec. 4403. Set aside for research and demonstration projects on rural and inner-city health issues.”. (n) Corrections to Certain Health-Related Provisions in Title I)(.— (1) Section 9010.— The last sentence of section 226(b) of the Social Security Act, as added by section 9010(e)(3) of OBRA, is 42 USC 426. amended to read as follows: “In determining when an individual’s entitlement or status terminates for purposes of the preceding sentence, the term ‘36 months’ in the second sentence of section 223(a)(1), in section 202(d)(1)(G)(i), in the last sentence of section 202(e)(1), and in the last sentence of section 202(f)(1) shall be applied as though it read ‘15 months’.”. (2) Section 9115.— Section 9115(b) of OBRA is amended by 42 USC 1396a. striking “1902(1)” and inserting “1902(o)”. (3) Section 9119.— Section 9119 of OBRA is amended by 42 USC 1396a note. adding at the end the following new subsection: “(d) Conforming Amendments to Medicare Program for the Medically Needy.— (1) Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended— “(A) in subsection (a)— “(i) by striking ‘and’ at the end of paragraph (48), “(ii) by striking the period at the end of paragraph (49) and inserting “; and’, and “(iii) by inserting after paragraph (49) the following new paragraph: “‘(50) provide, in accordance with subsection (q), for a monthly personal needs allowance for certain institutionalized individuals and couples.’; and “(B) by adding at the end the following new subsection: “‘(q) (1) (A) In order to meet the requirement of subsection (a)(50), State and local governments. the State plan must provide that, in the case of an institutionalized individual or couple described in subparagraph (B), in determining the amount of the individual’s or couple’s income to be applied monthly to payment for the cost of care in an institution, there shall be deducted from the monthly income (in addition to other allowances otherwise provided under the State plan) a monthly personal needs allowance— “‘(i) which is reasonable in amount for clothing and other personal needs of the individual (or couple) while in an institution, and “‘(ii) which is not less (and may be greater) than the minimum monthly personal needs allowance described in paragraph (2). “(B) In this subsection, the term “institutionalized individual or couple” means an individual or married couple— “‘(i) who is an inpatient (or who are inpatients) in a medical institution or nursing facility for which payments are made under this title throughout a month, and “‘(ii) who is or are determined to be eligible for medical assistance under the State plan. “‘(2) The minimum monthly personal needs allowance described Blind persons. Handicapped persons. in this paragraph is $30 for an institutionalized individual and $60 for an institutionalized couple (if both are aged, blind, or disabled, and their incomes are considered available to each other in determining eligibility).’. “(2) The amendments made by paragraph (1) apply to payments 42 USC 1396a note. under title XIX of the Social Security Act for calendar quarters beginning on or after July 1, 1988, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.”. (o) Subtitle D of Title IV.— (1) Section 4303.— Section 2115 of the Public Health Service 42 USC 300aa–15. Act is amended— (A) in subsection (i)(1), as added by section 4303(a) of OBRA, by striking “from appropriations under subsection (i)” and inserting “by the Secretary from appropriations under subsection (j)”, and (B) in subsection (j), as added by section 4303(b) of OBRA, by inserting “to the Department of Health and Human Services” after “to be appropriated”. (2) Section 4307.— Section 4307(3)(0 of OBRA is amended by striking “subsection (g)” and inserting “subsection (e), as redesignated by section 4303(d)(2)(A),”. (3) Section 4308.— (A) Subtitle D of title IV of OBRA is amended by adding at the end the following new section: “SEC. 4308. TECHNICAL AMENDMENTS RELATING TO COURT OF CLAIMS PROCEDURES. “(a) Duties of Special Masters.— Section 2112(c)(2) of the Public Health Service Act (42 U.S.C. 300aa–12(a)) is amended— “(1) by inserting shall prepare and submit to the court proposed findings of fact and conclusions of law,’ after ‘adjunct to the court’, “(2) by inserting ‘and’ at the end of subparagraph (C), “(3) by striking ‘, and’ at the end of subparagraph (D) and inserting a period, and “(4) by striking subparagraph (E). “(b) Requiring Filing of Appeals Within 60 Days.— Section 2112(e) of such Act (42 U.S.C. 300aa–12(e)), as redesignated by section 4303(d)(2)(A), is amended by inserting ‘within 60 days of the date of the judgment’ after ‘petition filed’. “(c) Clarification on Timing of Bringing Additional Actions.— The second sentence of section 2121(a) of such Act (42 U.S.C. 300aa–21(a)) is amended by striking ‘the entry of the court’s judgment’ and inserting ‘the court’s final judgment’.”. (B) The table of contents relating to title IV of OBRA is amended by inserting after the item relating to section 4307 the following new item: “Sec. 4308. Technical amendments relating to Court of Claims procedures.”.

6. 1989

   Omnibus Budget Reconciliation Act of 1989

   Pub. L. 101–239 § 6901(d)(5)(A) · 103 Stat. 2106

   Substituted · 42 U.S.C. § 1396i

   Pub. L. 101–239, § 6901(d)(5)(A), substituted “rural health clinics and intermediate care facilities for the mentally retarded” for “rural health clinics” in section catchline

   Source evidence

   Code amendment note
   Pub. L. 101–239, § 6901(d)(5)(A), substituted “rural health clinics and intermediate care facilities for the mentally retarded” for “rural health clinics” in section catchline.

   Enacted provision · exact public law section
   (A) by inserting “and intermediate care facilities for the mentally retarded” after “rural health clinics”,

7. 1989

   Omnibus Budget Reconciliation Act of 1989

   Pub. L. 101–239 § 6901(d)(5)(B) · 103 Stat. 2106

   1. Substituted · 42 U.S.C. § 1396i(b)(1)

      Pub. L. 101–239, § 6901(d)(5)(B)–(D), substituted “any intermediate care facility for the mentally retarded” for “any skilled nursing or intermediate care facility”

   2. Substituted · 42 U.S.C. § 1396i(b)(1)

      Pub. L. 101–239, § 6901(d)(5)(B)–(D), substituted “section 1396a(a)(31) of this title or section 1396d(d) of this title” for “section 1396a(a)(28) of this title or section 1396r of this title or section 1396d(c) of this title”

   3. Substituted · 42 U.S.C. § 1396i(b)(1)

      Pub. L. 101–239, § 6901(d)(5)(B)–(D), substituted “the intermediate care facility for the mentally retarded” for “the skilled nursing facility or intermediate care facility”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 101–239, § 6901(d)(5)(B)–(D), substituted “any intermediate care facility for the mentally retarded” for “any skilled nursing or intermediate care facility”, “section 1396a(a)(31) of this title or section 1396d(d) of this title” for “section 1396a(a)(28) of this title or section 1396r of this title or section 1396d(c) of this title”, and “the intermediate care facility for the mentally retarded” for “the skilled nursing facility or intermediate care facility”.

   Enacted provision · exact public law section
   (B) in subsection (b)(1), by striking “skilled nursing or intermediate care facility” and inserting “intermediate care facility for the mentally retarded”,

8. 1989

   Omnibus Budget Reconciliation Act of 1989

   Pub. L. 101–239 § 6901(d)(5)(D) · 103 Stat. 2106

   Substituted · 42 U.S.C. § 1396i(b)(2)

   Pub. L. 101–239, § 6901(d)(5)(D), substituted “intermediate care facility for the mentally retarded” for “skilled nursing facility or intermediate care facility” in two places

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 101–239, § 6901(d)(5)(D), substituted “intermediate care facility for the mentally retarded” for “skilled nursing facility or intermediate care facility” in two places.

   Enacted provision · exact public law section
   (D) in subsections (b)(1) and (b)(2), by striking “skilled nursing facility or intermediate care facility” each place it appears and inserting “intermediate care facility for the mentally retarded”.

9. 1994

   Pub. L. 103–296 title I § 108(d)(4) · 108 Stat. 1464

   Inserted · 42 U.S.C. § 1396i(b)(2)

   Pub. L. 103–296 inserted before period at end of first sentence “, except that, in so applying such sections and in applying section 405(l) of this title thereto, any reference therein to the Commissioner of Social Security or the Social Security Administration shall be considered a reference to the Secretary or the Department of Health and Human Services, respectively”

   Source evidence

   Code amendment note
   Subsec. (b)(2). Pub. L. 103–296 inserted before period at end of first sentence “, except that, in so applying such sections and in applying section 405(l) of this title thereto, any reference therein to the Commissioner of Social Security or the Social Security Administration shall be considered a reference to the Secretary or the Department of Health and Human Services, respectively”.

   Enacted provision · exact public law section
   SEC. 108. ADDITIONAL CONFORMING AMENDMENTS. (a) Amendments to Title VII.— (1) Title VII of the Social Security Act (42 U.S.C. 901 et seq.) is amended by adding at the end the following new section:

   Effective date note
   Amendment by Pub. L. 103–296 effective Mar. 31, 1995, see section 110(a) of Pub. L. 103–296, set out as a note under section 401 of this title.

10. 1999

    District of Columbia Appropriations Act, 2000

    Pub. L. 106–113 div. B § 1000(a)(6)(tVI)(s608)(n) · 113 Stat. 1501

    Struck · 42 U.S.C. § 1396i

    Pub. L. 106–113 struck out “of” after “approval of” in section catchline

    Source evidence

    Code amendment note
    Pub. L. 106–113 struck out “of” after “approval of” in section catchline.

15 of 17 references resolved to an enrolled provision · 2 partial