I

103D CONGRESS

1ST SESSION H. R. 721

To amend the Social Security Act to extend the ban on physician selfreferrals to all payors and to radiology and diagnostic imaging services,

radiation therapy services, physical therapy services, and durable medical

equipment.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 2, 1992

Mr. KASICH (for himself and Mr. SANTORUM) introduced the following bill;

which was referred jointly to the Committee on Ways and Means and Energy and Commerce

A BILL

To amend the Social Security Act to extend the ban on

physician self-referrals to all payors and to radiology

and diagnostic imaging services, radiation therapy services, physical therapy services, and durable medical

equipment.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Physician Self-Referral

5 Amendments of 1993’’.
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1 SEC. 2. EXTENSION OF PHYSICIAN SELF-REFERRAL LIMITA2 TIONS TO ALL PAYORS.

3 Section 1877 of the Social Security Act (42 U.S.C.

4 1395nn) is amended—

5 (1) in subsection (a)—

6 (A) in paragraph (1)(A), by striking ‘‘for

7 which payment otherwise may be made under

8 this title’’ and inserting ‘‘for which a charge is

9 imposed’’, and

10 (B) in paragraph (1)(B), by striking

11 ‘‘under this title’’;

12 (2) by amending paragraph (1) of subsection

13 (g) to read as follows:

14 ‘‘(1) DENIAL OF PAYMENT.—No payment may

15 be made under this title, under another Federal

16 health care program, or under a State health care

17 program (as defined in section 1128(h)) for a des18 ignated health service for which a claim is presented

19 in violation of subsection (a)(1)(B). No individual,

20 third party payor, or other entity is liable for pay21 ment for designated health services for which a

22 claim is presented in violation of such subsection.’’;

23 and

24 (3) in subsection (g)(3), by striking ‘‘for which

25 payment may not be made under paragraph (1)’’
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1 and inserting ‘‘for which such a claim may not be

2 presented under subsection (a)(1)’’.

3 SEC. 3. EXTENSION OF PHYSICIAN SELF-REFERRAL LIMITA4 TIONS TO CERTAIN ADDITIONAL SERVICES.

5 (a) IN GENERAL.—Section 1877 of the Social Secu6 rity Act is further amended—

7 (1) by striking ‘‘clinical laboratory services’’

8 and ‘‘CLINICAL LABORATORY SERVICES’’ and insert9 ing ‘‘designated health services’’ and ‘‘DESIGNATED

10 HEALTH SERVICES’’, respectively, each place either

11 appears in subsections (a)(1), (b)(2)(A)(ii)(I),

12 (b)(4), (d)(1), (d)(2), and (d)(3), and

13 (2) by adding at the end the following new sub14 section:

15 ‘‘(i) DESIGNATED HEALTH SERVICES DEFINED.—In

16 this section, the term ‘designated health services’ means—

17 ‘‘(1) clinical laboratory services,

18 ‘‘(2) physical therapy services,

19 ‘‘(3) radiology and diagnostic imaging services,

20 ‘‘(4) radiation therapy services, and

21 ‘‘(5) the furnishing of durable medical equip22 ment.’’.

23 (b) CONFORMING AMENDMENTS.—Section 1877 of

24 such Act is further amended—
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1 (1) in subsection (d)(2), by striking ‘‘labora2 tory’’ and inserting ‘‘entity’’,

3 (2) in subsection (g)(1), by striking ‘‘clinical

4 laboratory service’’ and inserting ‘‘designated health

5 service’’, and

6 (3) in subsection (h)(7)(B), by striking ‘‘clinical

7 laboratory service’’ and inserting ‘‘designated health

8 service’’, and

9 SEC. 4. CHANGES IN EXCEPTIONS.

10 (a) HEALTH MAINTENANCE ORGANIZATIONS AND

11 MANAGED CARE PLANS.—Paragraph (3) of section

12 1877(b) of the Social Security Act is amended to read as

13 follows:

14 ‘‘(3) HEALTH MAINTENANCE ORGANIZATIONS

15 AND MANAGED CARE PLANS.—

16 ‘‘(A) HEALTH MAINTENANCE ORGANIZA17 TIONS.—In the case of services furnished by a

18 health maintenance organization to an individ19 ual enrolled with the health maintenance orga20 nization, including services furnished by—

21 ‘‘(i) an eligible organization (as de22 fined in section 1876(b));

23 ‘‘(ii) an organization described in sec24 tion 1833(a)(1)(A);
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1 ‘‘(iii) an organization receiving pay2 ments on a prepaid basis under a dem3 onstration project under section 402(a) of

4 the Social Security Amendments of 1967

5 or under section 222(a) of the Social Secu6 rity Amendments of 1972; and

7 ‘‘(iv) any other entity designated by

8 the Secretary as a health maintenance or9 ganization for purposes of this subpara10 graph.

11 ‘‘(B) CERTAIN MANAGED CARE PLANS.—In

12 the case of services furnished by a managed

13 care plan (as defined by the Secretary) to an

14 individual enrolled under the plan if—

15 ‘‘(i) the plan selectively contracts with

16 physicians and with providers of des17 ignated health services; and

18 ‘‘(ii) under the plan physicians bear a

19 significant financial risk for the cost of

20 designated health services furnished upon

21 referral.’’.

22 (b) WAIVER FOR VALUABLE COMMUNITY SERV23 ICES.—Subsection (b)(5) of such section is amended by

24 adding at the end the following: ‘‘In making such deter25 minations, the Secretary shall specifically consider wheth-
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1 er the provision of necessary, valuable community services

2 will be jeopardized without such an exception.’’.

3 (c) EXCEPTION FOR HOSPITALS.—Subparagraph (A)

4 of subsection (d)(3) of such section is amended to read

5 as follows:

6 ‘‘(A) at the time the services are furnished,

7 the hospital has a participation agreement in

8 effect under section 1866, and’’.

9 SEC. 5. EFFECTIVE DATES.

10 The amendments made by this Act shall apply with

11 respect to a referral by a physician for designated health

12 services (as described in section 1877(i) of the Social Se13 curity Act)—

14 (1) made on or after the first day of the first

15 month beginning at least 2 years after the date of

16 the enactment of this Act, in the case of a referral

17 with respect to which a financial relationship (speci18 fied in section 1877(a)(2) of the Social Security Act)

19 existed as of the date of the enactment of this Act;

20 or

21 (2) made on or after the first day of the first

22 month beginning at least 6 months after the date of

23 the enactment of this Act, with respect to which

24 such a financial relationship did not exist as of the

25 date of the enactment of this Act.
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