Physician Self-Referral Amendments of 1999

Summary: Physician Self-Referral Amendments of 1999 - Amends title XVIII (Medicare) of the Social Security Act to revise limitations on certain physician referrals to: (1) eliminate restrictions on physician referrals based on compensation arrangements; (2) repeal site of service requirements contained in the exceptions to the ownership referral prohibitions; (3) change the definition of group practice; (4) exclude intraocular lenses, eyeglasses, and contact lenses as designated health services; and (5) permit supervision of clinical laboratory services by pathologists who are independent contractors.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Physician Self-
Referral Amendments of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Eliminating restrictions on physician referrals based on 
                            compensation arrangements.
Sec. 3. Exceptions to ownership referral prohibitions.
Sec. 4. Change in definition of group practice.
Sec. 5. Delay in implementation of 1993 ownership referral changes 
                            until promulgation of final regulations.
Sec. 6. Exclusion of intraocular lenses, eyeglasses, and contact 
                            lenses.
Sec. 7. Permitting supervision of clinical laboratory services by 
                            pathologists who are independent 
                            contractors.
Sec. 8. Effective date.

 SEC. 2. ELIMINATING RESTRICTIONS ON PHYSICIAN REFERRALS BASED ON 
              COMPENSATION ARRANGEMENTS.

    (a) In General.--Section 1877(a)(2) of the Social Security Act (42 
U.S.C. 1395nn(a)(2)) is amended by striking ``is--'' and all that 
follows through ``equity,'' and inserting ``is (except as provided in 
subsection (c)) an ownership or investment interest in the entity 
through equity,''.
    (b) Conforming Amendments.--Section 1877 of such Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (b)--
                    (A) in the heading, by striking ``to Both Ownership 
                and Compensation Arrangement Prohibitions''; and
                    (B) by redesignating paragraph (4) as paragraph 
                (7);
            (2) in subsection (c)--
                    (A) by amending the heading to read as follows: 
                ``Exception for Ownership or Investment Interest in 
                Publicly Traded Securities and Mutual Funds''; and
                    (B) in the matter preceding paragraph (1), by 
                striking ``subsection (a)(2)(A)'' and inserting 
                ``subsection (a)(2)'';
            (3) in subsection (d)--
                    (A) by striking the matter preceding paragraph (1);
                    (B) in paragraph (3), by striking ``paragraph (1)'' 
                and inserting ``paragraph (4)''; and
                    (C) by redesignating paragraphs (1), (2), and (3) 
                as paragraphs (4), (5), and (6), respectively, and by 
                transferring and inserting such paragraphs after 
                paragraph (3) of subsection (b);
            (4) by striking subsection (e);
            (5) in subsection (f)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``ownership, investment, and compensation'' 
                and inserting ``ownership and investment'';
                    (B) in paragraph (2), by striking ``subsection 
                (a)(2)(A)'' and all that follows through ``subsection 
                (a)(2)(B)),'' and inserting ``subsection (a)(2),''; and
                    (C) in paragraph (2), by striking ``or who have 
                such a compensation relationship with the entity''; and
            (6) in subsection (h)--
                    (A) by striking paragraphs (1), (2), and (3);
                    (B) in paragraph (4)(A), by striking clause (iv); 
                and
                    (C) in paragraph (4)(B), by striking ``Rules.--'' 
                and all that follows through ``(ii) Faculty'' and 
                inserting ``Rules for faculty''.

 SEC. 3. EXCEPTIONS TO OWNERSHIP REFERRAL PROHIBITIONS.

    (a) Revisions to Exception for In-Office Ancillary Services.--
            (1) Repeal of site-of-service requirement.--Section 1877 of 
        the Social Security Act (42 U.S.C. 1395nn) is amended--
                    (A) by amending subparagraph (A) of subsection 
                (b)(2) to read as follows:
                    ``(A) that are furnished personally by the 
                referring physician, personally by a physician who is a 
member of the same group practice as the referring physician, or 
personally by individuals who are under the general supervision of the 
physician or of another physician in the group practice, and''; and
                    (B) by adding at the end of subsection (h) the 
                following new paragraph:
            ``(7) General supervision.--An individual is considered to 
        be under the `general supervision' of a physician if the 
        physician (or group practice of which the physician is a 
        member) is legally responsible for the services performed by 
        the individual and for ensuring that the individual meets 
        licensure and certification requirements, if any, applicable 
        under other provisions of law, regardless of whether or not the 
        physician is physically present when the individual furnishes 
        an item or service.''.
            (2) Clarification of treatment of physician owners of group 
        practice.--Section 1877(b)(2)(B) of such Act (42 U.S.C. 
        1395nn(b)(2)(B)) is amended by striking ``or such group 
        practice.'' and inserting ``, such group practice, or the 
        physician owners of such group practice.''.
            (3) Conforming amendment.--Section 1877(b)(2) of such Act 
        (42 U.S.C. 1395nn(b)(2)) is amended by amending the heading to 
        read as follows: ``Ancillary services furnished personally or 
        through group practice''.
    (b) Clarification of Exception for Services Furnished in a Rural 
Area.--Section 1877(d)(2) of such Act (42 U.S.C. 1395nn(d)(2)), before 
redesignation and transfer as section 1877(b)(5) of such Act under 
section 2(b)(3)(C), is amended by striking ``substantially all'' and 
inserting ``not less than 75 percent''.

SEC. 4. CHANGE IN DEFINITION OF GROUP PRACTICE.

    Section 1877(h)(4) of the Social Security Act (42 U.S.C. 
1395nn(h)(4)) is amended--
            (1) in subparagraph (A), as amended by section 2(b)(6)(B)--
                    (A) by adding ``and'' at the end of clause (iii);
                    (B) by redesignating clause (v) as clause (iv) and 
                by striking ``, and'' at the end and inserting a 
                period, and
                    (C) by striking clause (vi); and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Member of a group.--A physician is a `member' 
                of a group if the physician is an owner or a bona fide 
                employee, or both, of the group.''.

 SEC. 5. DELAY IN IMPLEMENTATION OF 1993 OWNERSHIP REFERRAL CHANGES 
              UNTIL PROMULGATION OF FINAL REGULATIONS.

    Notwithstanding paragraphs (1) and (2) of section 13562(b) of the 
Omnibus Budget Reconciliation Act of 1993, the amendments made by 
section 13562(a) of such Act shall not apply to any referrals made 
before the effective date of final regulations promulgated by the 
Secretary of Health and Human Services to carry out such amendments.

SEC. 6. EXCLUSION OF INTRAOCULAR LENSES, EYEGLASSES, AND CONTACT 
              LENSES.

    Section 1877(h)(6)(H) of the Social Security Act (42 U.S.C. 
1395nn(h)(6)(H)) is amended by inserting ``, other than intraocular 
lenses, eyeglasses, and contact lenses'' before the period.

SEC. 7. PERMITTING SUPERVISION OF CLINICAL LABORATORY SERVICES BY 
              PATHOLOGISTS WHO ARE INDEPENDENT CONTRACTORS.

    Section 1877(b)(2) of the Social Security Act (42 U.S.C. 
1395nn(b)(2)), as amended by section 3(a)(1)(A), is amended by adding 
at the end the following: ``In applying subparagraph (A) in the case of 
a pathologist who supervises or directs the provision of clinical 
laboratory services for a group practice, the pathologist is deemed to 
be a member of (and in) such group practice.''.

SEC. 8. EFFECTIVE DATE.

    The amendments made by sections 2 through 4 and 6 and 7 of this Act 
apply to referrals made on or after the date of the enactment of this 
Act, regardless of whether or not regulations are promulgated to carry 
out such amendments.