Direct Billing Act

Summary: Direct Billing Act - Amends the Public Health Service Act to make it unlawful for any person to present a bill, claim, or demand for payment to any person other than the patient receiving services. Makes it unlawful for any physician to present a bill for ancillary health services to any recipient of such services unless the services were furnished personally by:  (1) the referring physician; (2) a physician who is a member of the same group practice as the referring physician; or (3) individuals employed by such physician or group practice who are supervised by such physician or another physician in the group practice.  Makes such prohibitions inapplicable with respect to ancillary health services for which payment may be made under title XVIII (Medicare) of the Social Security Act. 
Provides exceptions to such prohibitions, including demands for payments made to immediate family members, designated payors of the patient, or a health maintenance organization in which a recipient is enrolled. 
Provides sanctions against those collecting payment in violation of this Act.  Allows the Secretary of Health and Human Services to suspend, revoke, or limit a laboratory certification as part of such sanctions. 
Defines "ancillary health services" as clinical laboratory services, diagnostic x-rays and other diagnostic imaging services and tests, durable medical equipment, and physical therapy services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Direct Billing Act''.

SEC. 2. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

    The Public Health Service Act is amended by adding at the end the 
following:

                 ``TITLE XXVII--RESTRICTIONS ON BILLING

``SEC. 2701. PROHIBITION.

    ``(a) Billing of Others for Ancillary Health Services.--Except as 
provided in section 2702, it shall be unlawful for any person 
(including any individual or entity) who furnishes ancillary health 
services (as defined in section 2705(1)) to present or cause to be 
presented, a claim, bill, or demand for payment to any person other 
than the patient receiving such services.
    ``(b) Billing of Recipient of Services.--Except as provided in 
section 2702, it shall be unlawful for any physician, or the agent of 
any physician, to present, or cause to be presented, a claim, bill, or 
demand for payment for ancillary health services to any recipient of 
such services unless the services covered by the claim, bill, or demand 
were furnished--
            ``(1) personally by, or under the supervision of, the 
        referring physician;
            ``(2) personally by, or under the supervision of, a 
        physician who is a member of the same group practice as the 
        referring physician; or
            ``(3) personally by individuals who are employed by such 
        physician or group practice and who are personally supervised 
        by the physician or by another physician in the group practice.
    ``(c) General Exception for Services Under Medicare.--This section 
does not apply with respect to any ancillary health services for which 
payment may be made under title XVIII of the Social Security Act.

``SEC. 2702. EXCEPTIONS.

    ``Notwithstanding the provisions of section 2701, a person who 
furnishes ancillary health services to an individual may present, or 
cause to be presented, for payment for actual services rendered a 
claim, bill, or demand to--
            ``(1) an immediate family member of the recipient of the 
        services or any other person legally responsible for the debts 
        or care of the recipient of the services;
            ``(2) a third party payor designated by the recipient of 
        the services;
            ``(3) a health maintenance organization in which the 
        recipient of the services is enrolled;
            ``(4) a hospital or skilled nursing facility where the 
        recipient of the services was an inpatient or outpatient at the 
        time the services were provided;
            ``(5) an employer where the recipient of the services is an 
        employee of such employer and the employer is responsible for 
        payment for the services;
            ``(6) a governmental agency or specified agent, on behalf 
        of the recipient of the services;
            ``(7) a substance abuse program where the clients of such a 
        program were the recipient of the services;
            ``(8) a clinic or other health care provider that has been 
        designated (or that is operated by an organization that has 
        been designated) as tax-exempt pursuant to section 501(c)(3) of 
        the Internal Revenue Code of 1986 whose purpose is the 
        promotion of public health, if the services rendered relate to 
        testing for sexually transmitted disease, acquired immune 
        deficiency syndrome, pregnancy, pregnancy termination, or other 
        conditions where the Secretary has determined that compliance 
        with section 2701 could seriously compromise the recipient's 
        need for confidentiality;
            ``(9) a person engaged in bona fide research studies;
            ``(10) the party requesting the ancillary health services 
        where Federal, State, or local law requires that the identity 
        of the recipient be kept confidential;
            ``(11) another person furnishing the same ancillary health 
        services for which payment is sought (hereafter referred to in 
        this paragraph as the `requesting party') where the person 
        presenting, or causing to be presented, the claim, bill, or 
        demand for payment furnished the services at the request of the 
        requesting party, except that the requesting party may not be a 
        facility owned or operated by the physician requesting the 
        ancillary health service; and
            ``(12) an entity approved to receive such claims, bills or 
        demands by the Secretary in regulations.
The persons described in paragraphs (1) through (12) who have received 
a claim, bill, or demand for payment for such ancillary health services 
may present, or cause to be presented, such claim, bill, or demand to 
the responsible party.

``SEC. 2703. SANCTIONS.

    ``(a) Payment.--No payment may be made for a service that is 
provided in violation of section 2701.
    ``(b) Collection of Amounts.--
            ``(1) Liability on collection.--If a person collects any 
        amounts that were billed in violation of section 2701(a), such 
        person shall be liable for, and shall refund on a timely basis 
        to the individual whom such amounts were collected, any amounts 
        so collected.
            ``(2) Collection by physician.--If a physician collects any 
        amounts from a recipient of services, or from another person on 
        behalf of the recipient of services (including a third-party 
        payor) that were billed in violation of section 2701(b), such 
        physician shall be liable for, and shall refund on a timely 
        basis to the recipient or person, any amounts so collected.
    ``(c) Repeated Claims.--Any person that presents, or causes to be 
presented, on a repeated basis, a bill or a claim that such person 
knows, or should have known, is for a service for which payment may not 
be made under subsection (a), or for which a refund has not been made 
under subsection (b), shall be subject to a civil money penalty of not 
more than $5,000 for each such bill or claim. The provisions of section 
1128A of the Social Security Act (other than the first sentence of 
subsection (a) and subsection (b)) shall apply to a civil money penalty 
assessed under the previous sentence in the same manner as such 
provisions apply to a penalty or proceeding under such section 
1128A(a).
    ``(d) Suspension of Laboratory Certification.--If the Secretary 
finds, after reasonable notice and opportunity for a hearing, that a 
laboratory which holds a certificate pursuant to section 353 has 
violated section 2701, the Secretary may suspend, revoke or limit such 
certification in accordance with the procedures established in section 
353(k).
    ``(e) Exclusion From Other Programs.--
            ``(1) Authority.--The Secretary may exclude from 
        participation in any program under title XVIII of the Social 
        Security Act, any individual or entity that the Secretary 
        determines has violated section 2701 and may direct that such 
        individual and entity be excluded from participation in any 
        State health care program receiving Federal funds.
            ``(2) Application of other law.--The provisions of section 
        1128(e) of the Social Security Act shall apply to any exclusion 
        under paragraph (1) in the same manner as such provisions apply 
        to a proceeding under such section 1128.

``SEC. 2704. REGULATIONS.

    ``The Secretary shall by regulation impose such other requirements 
as may be necessary to implement the purposes of this title.

``SEC. 2705. DEFINITIONS.

    ``As used in this title:
            ``(1) Ancillary health services.--The term `ancillary 
        health services' means--
                    ``(A) clinical laboratory services;
                    ``(B) diagnostic x-ray tests and other diagnostic 
                imaging services including CT and magnetic resonance 
                imaging services;
                    ``(C) other diagnostic tests;
                    ``(D) durable medical equipment; and
                    ``(E) physical therapy services.
            ``(2) Group practices.--The term `group practice' means a 
        group of 2 or more physicians legally organized as a 
        partnership, professional corporation, foundation, not-for-
        profit corporation, faculty practice plan, or similar 
        association--
                    ``(A) in which each physician who is a member of 
                the group provides substantially the full range of 
                services that the physician routinely provides 
                (including medical care, consultation, diagnosis, or 
                treatment) through the joint use of shared office 
                space, facilities, equipment, and personnel;
                    ``(B) for which substantially all of the services 
                of the physicians who are members of the group are 
                provided through the group and are billed in the name 
                of the group and amounts so received are treated as 
                receipts of the group;
                    ``(C) in which the overhead expenses of and the 
                income from the practice are distributed in accordance 
                with methods previously determined by members of the 
                group; and
                    ``(D) which meets such other standards as the 
                Secretary may impose by regulation.
        In the case of a faculty practice plan associated with a 
        hospital with an approved medical residency training program in 
        which physician members may provide a variety of different 
        specialty services and provide professional services both 
        within and outside the group (as well as perform other tasks, 
        such as research), the definition of such term shall be limited 
        with respect to the services provided outside of the faculty 
        practice plan.
            ``(3) Immediate family member.--The term `immediate family 
        member' shall include spouses, natural and adoptive parents, 
        natural and adoptive children, natural and adopted siblings, 
        stepparents, stepchildren and stepsiblings, fathers-in-law, 
        mothers-in-law, brothers-in-law, sisters-in-law, sons-in-law 
        and daughters-in-law, grandparents and grandchildren, and such 
        additional family members as may be specified in regulations 
        adopted by the Secretary.
            ``(4) Physician.--The term `physician' means--
                    ``(A) a doctor of medicine or osteopathy legally 
                authorized to practice medicine and perform surgery by 
                the State in which such individual performs such 
                function or action;
                    ``(B) a doctor of dental surgery or of dental 
                medicine who is legally authorized to practice 
                dentistry in the State in which such individual 
                performs such functions;
                    ``(C) a doctor of podiatric medicine;
                    ``(D) a doctor of optometry; or
                    ``(E) a chiropractor.
            ``(5) Third party payor.--The term `third party payor' 
        means any health care insurer, including any hospital services 
        corporation, health services corporation, medical expense 
        indemnity corporation, mutual insurance company, or self-
        insured corporation, that provides coverage for health or 
        health-related items or service.''.

SEC. 3. EFFECTIVE DATE.

    (a) In General.--This Act shall become effective December 31, 1996.
    (b) Regulations.--Not later than July 1, 1997, the Secretary of 
Health and Human Services shall promulgate such regulations as may be 
appropriate to carry out this Act.