To amend title XVIII of the Social Security Act to provide for the treatment of certain physician pathology services under the Medicare Program.

Summary: Physician Pathology Services Continuity Act of 2007 - Amends title XVIII (Medicare) of the Social Security Act to require the Secretary of Health and Human Services, with regard to a laboratory-furnished technical component of certain physician pathology services, to treat such component as a service for which payment shall be made to the laboratory, and not as an inpatient hospital or hospital outpatient service for which payment is made to the hospital.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Physician Pathology Services 
Continuity Act of 2007''.

SEC. 2. PERMANENT TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES 
              UNDER MEDICARE.

    Section 1848(i) of the Social Security Act (42 U.S.C. 1395w-4(i)) 
is amended by adding at the end the following new paragraph:
            ``(4) Treatment of certain physician pathology services.--
                    ``(A) In general.--With respect to services 
                furnished on or after January 1, 2008, if an 
                independent laboratory furnishes the technical 
                component of a physician pathology service to a fee-
                for-service medicare beneficiary who is an inpatient or 
                outpatient of a covered hospital, the Secretary shall 
                treat such component as a service for which payment 
                shall be made to the laboratory under this section and 
                not as an inpatient hospital service for which payment 
                is made to the hospital under section 1886(d) or as a 
                hospital outpatient service for which payment is made 
                to the hospital under section 1833(t).
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Covered hospital.--
                                    ``(I) In general.--The term 
                                `covered hospital' means, with respect 
                                to an inpatient or outpatient, a 
                                hospital that had an arrangement with 
                                an independent laboratory that was in 
                                effect as of July 22, 1999, under which 
                                a laboratory furnished the technical 
                                component of physician pathology 
                                services to fee-for-service medicare 
                                beneficiaries who were hospital 
                                inpatients or outpatients, 
                                respectively, and submitted claims for 
                                payment for such component to a carrier 
                                with a contract under section 1842 and 
                                not to the hospital.
                                    ``(II) Change in ownership does not 
                                affect determination.--A change in 
                                ownership with respect to a hospital on 
                                or after the date referred to in 
                                subclause (I) shall not affect the 
                                determination of whether such hospital 
                                is a covered hospital for purposes of 
                                such subclause.
                            ``(ii) Fee-for-service medicare 
                        beneficiary.--The term `fee-for-service 
                        medicare beneficiary' means an individual who 
                        is entitled to (or enrolled for) benefits under 
                        part A, or enrolled under this part, or both, 
                        but who is not enrolled in any of the 
                        following:
                                    ``(I) A Medicare Advantage plan 
                                under part C.
                                    ``(II) A plan offered by an 
                                eligible organization under section 
                                1876.
                                    ``(III) A program of all-inclusive 
                                care for the elderly (PACE) under 
                                section 1894.
                                    ``(IV) A social health maintenance 
                                organization (SHMO) demonstration 
                                project established under section 
                                4018(b) of the Omnibus Budget 
                                Reconciliation Act of 1987 (Public Law 
                                100-203).
                    ``(C) Reference.--For the treatment of certain 
                physician pathology services furnished prior to January 
                1, 2008, see section 542 of the Medicare, Medicaid, and 
                SCHIP Benefits Improvement and Protection Act of 2000, 
                as extended by--
                            ``(i) Centers for Medicare & Medicaid 
                        Services (CMS) Program Memorandum for Carriers 
                        (transmittal B-03-001), issued January 17, 
                        2003;
                            ``(ii) CMS Manual System, Publication 100-
                        20 One-Time Notification (transmittal 34), 
                        issued December 24, 2003;
                            ``(iii) section 732 of the Medicare 
                        Prescription Drug, Improvement, and 
                        Modernization Act of 2003; and
                            ``(iv) section 104 of division B of the Tax 
                        Relief and Health Care Act of 2006.''.