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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 345 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 345

 To amend title XVIII of the Social Security Act to extend and improve 
the ban on physician referrals to health care providers with which the 
                physician has a financial relationship.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Stark introduced the following bill; which was referred jointly to 
        the Committees on Ways and Means and Energy and Commerce

                             April 1, 1993

                     Additional sponsor: Mr. Levin

_______________________________________________________________________

                                 A BILL

 
 To amend title XVIII of the Social Security Act to extend and improve 
the ban on physician referrals to health care providers with which the 
                physician has a financial relationship.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Comprehensive Physician Ownership 
and Referral Act of 1993''.

SEC. 2. APPLICATION OF MEDICARE BAN ON SELF-REFERRALS TO ALL PAYORS.

    Section 1877 of the Social Security Act (42 U.S.C. 1395nn) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)(A), by striking ``for which 
                payment otherwise may be made under this title'' and 
                inserting ``for which a charge is imposed'', and
                    (B) in paragraph (1)(B), by striking ``under this 
                title'';
            (2) by amending paragraph (1) of subsection (g) to read as 
        follows:
            ``(1) Denial of payment.--No payment may be made under this 
        title, under another Federal health care program, or under a 
        State health care program (as defined in section 1128(h)) for a 
        designated health service for which a claim is presented in 
        violation of subsection (a)(1)(B). No individual, third party 
        payor, or other entity is liable for payment for designated 
        health services for which a claim is presented in violation of 
        such subsection.''; and
            (3) in subsection (g)(3), by striking ``for which payment 
        may not be made under paragraph (1)'' and inserting ``for which 
        such a claim may not be presented under subsection (a)(1)''.

SEC. 3. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED 
              SERVICES.

    (a) In General.--Section 1877 of the Social Security Act is further 
amended--
            (1) by striking ``clinical laboratory services'' and 
        ``clinical laboratory services'' and inserting ``designated 
        health services'' and ``designated health services'', 
        respectively, each place either appears in subsections (a)(1), 
        (b)(2)(A)(ii)(I), (b)(4), (d)(1), (d)(2), and (d)(3), and
            (2) by adding at the end the following new subsection:
    ``(i) Designated Health Services Defined.--In this section, the 
term `designated health services' means--
            ``(1) clinical laboratory services;
            ``(2) physical therapy services;
            ``(3) radiology services, including magnetic resonance 
        imaging, computerized axial tomography scans, and ultrasound 
        services;
            ``(4) radiation therapy services;
            ``(5) the furnishing of durable medical equipment;
            ``(6) the furnishing of parenteral and enteral nutrition 
        equipment and supplies;
            ``(7) the furnishing of outpatient prescription drugs;
            ``(8) ambulance services;
            ``(9) home infusion therapy services;
            ``(10) occupational therapy services; and
            ``(11) inpatient and outpatient hospital services 
        (including services furnished at a psychiatric or 
        rehabilitation hospital).''.
    (b) Conforming Amendments.--Section 1877 of such Act is further 
amended--
            (1) in subsection (d)(2), by striking ``laboratory'' and 
        inserting ``entity'',
            (2) in subsection (g)(1), by striking ``clinical laboratory 
        service'' and inserting ``designated health service'', and
            (3) in subsection (h)(7)(B), by striking ``clinical 
        laboratory service'' and inserting ``designated health 
        service''.

SEC. 4. CHANGES IN EXCEPTIONS AND OTHER PROVISIONS RELATING TO 
              COMPENSATION ARRANGEMENTS.

    (a) Multiple Locations for Group Practices.--Section 
1877(b)(2)(A)(ii)(II) of the Social Security Act is amended by striking 
``centralized provision'' and inserting ``provision of some or all''.
    (b) Treatment of Compensation Arrangements.--
            (1) Rental of office space and equipment.--Paragraph (1) of 
        section 1877(e) of such Act is amended to read as follows:
            ``(1) Rental of office space; rental of equipment.--
                    ``(A) Office space.--Payments made by a lessee to a 
                lessor for the use of premises if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        premises covered by the lease,
                            ``(ii) the aggregate space rented or leased 
                        is reasonable and necessary for the legitimate 
                        business purposes of the lease or rental,
                            ``(iii) the lease provides for a term of 
                        rental or lease for at least one year,
                            ``(iv) in the case of a lease that is 
                        intended to provide the lessee with access to 
                        the premises for periodic intervals of time, 
                        rather than on a full-time basis, the lease 
                        specifies exactly the schedule of such 
                        intervals, their length, and the rent for such 
                        intervals,
                            ``(v) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(vi) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.
                    ``(B) Equipment.--Payments made by a lessee of 
                equipment to the lessor of the equipment for the use of 
                the equipment if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        equipment covered by the lease,
                            ``(ii) the equipment rented or leased is 
                        reasonable and necessary for the legitimate 
                        business purposes of the lease or rental,
                            ``(iii) the lease provides for a term of 
                        rental or lease of at least one year,
                            ``(iv) in the case of a lease that is 
                        intended to provide the lessee with use of the 
                        equipment for periodic intervals of time, 
                        rather than on a full-time basis, the lease 
                        specifies exactly the schedule of such 
                        intervals, their length, and the rent for such 
                        intervals,
                            ``(v) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(vi) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.''.
            (2) Bona fide employment relationships.--Paragraph (2) of 
        such section is amended--
                    (A) by striking ``with hospitals'',
                    (B) by striking ``An arrangement'' and all that 
                follows through ``if'' and inserting ``Any amount paid 
                by an employer to an employee who has a bona fide 
                employment relationship with the employer for 
                employment, or paid by a hospital pursuant to an 
                arrangement with a physician (or immediate family 
                member) for the provision of administrative services, 
                if'',
                    (C) in subparagraphs (A), (B), and (D), by striking 
                ``arrangement'' and inserting ``employment relationship 
                or arrangement'', and
                    (D) in subparagraph (C), by striking ``to the 
                hospital''.
            (3) Additional exceptions.--Such subsection is further 
        amended by adding at the end the following new paragraphs:
            ``(7) Payments to a physician for other items or 
        services.--
                    ``(A) In general.--Payments made by an entity to a 
                physician (or family member) who is not employed by the 
                entity as compensation for services specified in 
                subparagraph (B), if--
                            ``(i) the compensation agreement is set out 
                        in writing and specifies the services to be 
                        provided by the parties, the compensation for 
                        each unit of service provided under the 
                        agreement, and the schedule for the provision 
                        of such services,
                            ``(ii) the compensation paid over the term 
                        of the agreement is consistent with fair market 
                        value and is not determined in a manner that 
                        takes into account the volume or value of any 
                        referrals or other business generated between 
                        the parties,
                            ``(iii) the compensation is provided 
                        pursuant to an agreement which would be 
                        commercially reasonable even if no referrals 
                        were made to the entity, and
                            ``(iv) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.
                    ``(B) Specified services.--For purposes of 
                subparagraph (A), the services specified in this 
                subparagraph are any of the following:
                            ``(i) Consultative services that--
                                    ``(I) relate to results that have 
                                been obtained that are outside 
                                established parameters, or are 
                                specifically requested by the referring 
                                physician on a specified patient,
                                    ``(II) are furnished by a physician 
                                other than the referring physician (or 
                                by another physician who is a member of 
                                the same group practice), and
                                    ``(III) for which the physician 
                                furnishes a written report for that 
                                patient.
                            ``(ii) Interpretation of tissue pathology 
                        or Pap smear slides or the provision of other 
                        cytology services.
                            ``(iii) Phlebotomy services for paternity 
                        or toxicology testing where the services are 
                        furnished by a physician other than the 
                        physician referring the individual for such 
                        testing (or by another physician who is a 
                        member of the same group practice).
                            ``(iv) Employment-related health care 
                        services, including a payment by a self-insured 
                        employer for services rendered to employee 
                        applicants, employees, or their families under 
                        the terms of a health benefit plan.
                            ``(v) Services as a clinical consultant to 
                        the entity as required for certification of the 
                        provider under section 353 of the Public Health 
                        Service Act.
                            ``(vi) Services required by local, State, 
                        or Federal licensure, accreditation, or other 
                        health and safety provisions.
                            ``(vii) Services billed in the name of a 
                        group practice provided by a physician under 
                        contract to the group practice for services not 
                        otherwise available directly through a 
                        physician who is a member of the group.
            ``(8) Payments by a physician for items and services.--
        Payments made by a physician--
                    ``(A) to a laboratory in exchange for the provision 
                of clinical laboratory services, or
                    ``(B) to an entity as compensation for other items 
                or services if the items or services are furnished at a 
                price that is consistent with fair market value and are 
                generally available to referrors and non-referrors 
                alike on similar terms and conditions.
            ``(9) Payments for pathology services of a group 
        practice.--Payments made to a group practice for pathology 
        services under an agreement if--
                    ``(A) the agreement is set out in writing and 
                specifies the services to be provided by the parties 
                and the compensation for services provided under the 
                agreement,
                    ``(B) the compensation paid over the term of the 
                agreement is consistent with fair market value and is 
                not determined in a manner that takes into account the 
                volume or value of any referrals or other business 
                generated between the parties,
                    ``(C) the compensation is provided pursuant to an 
                agreement which would be commercially reasonable even 
                if no referrals were made to the entity; and
                    ``(D) the compensation arrangement between the 
                parties meets such other requirements as the Secretary 
                may impose by regulation as needed to protect against 
                program or patient abuse.''.
    (c) Treatment of Group Practices.--
            (1) Use of billing numbers, etc.--Section 1877 of the 
        Social Security Act is amended--
                    (A) in subsection (b)(2)(B), by inserting ``under a 
                billing number assigned to the group practice'' after 
                ``member'',
                    (B) in subsection (h)(4)(B), by inserting ``and 
                under a billing number assigned to the group'' after 
                ``in the name of the group'', and
                    (C) in subsection (h)(4)(C), by striking ``by 
                members of the group''.
            (2) Treatment of clinical laboratory services furnished 
        under arrangements between hospitals and group practices.--
                    (A) In general.--Section 1877(h)(4) of such Act is 
                amended--
                            (i) in subparagraph (B) (as amended by 
                        paragraph (1)(B)), by inserting ``(or are 
                        billed in the name of a hospital for which the 
                        group provides clinical laboratory services 
                        pursuant to an arrangement that meets the 
                        requirements of subparagraph (B))'' after 
                        ``assigned to the group'';
                            (ii) by redesignating subparagraphs (A) 
                        through (D) as clauses (i) through (iv), 
                        respectively;
                            (iii) by inserting ``(A)'' after ``.--''; 
                        and
                            (iv) by adding at the end the following new 
                        subparagraph:
            ``(B) The requirements of this subparagraph, with respect 
        to an arrangement for clinical laboratory services provided by 
        the laboratory of a group and billed in the name of a hospital, 
        are that--
                    ``(i) with respect to services provided to an 
                inpatient of the hospital, the arrangement is pursuant 
                to the provision of inpatient hospital services under 
                section 1861(b)(3);
                    ``(ii) the arrangement began before December 19, 
                1989, and has continued in effect without interruption 
                since such date;
                    ``(iii) the laboratory provides substantially all 
                of the clinical laboratory services to the hospital's 
                patients;
                    ``(iv) the arrangement is pursuant to an agreement 
                that is set out in writing and that specifies the 
                services to be provided by the parties and the 
                compensation for services provided under the agreement;
                    ``(v) the compensation paid over the term of the 
                agreement is consistent with fair market value and the 
                compensation per unit of services is fixed in advance 
                and is not determined in a manner that takes into 
                account the volume or value of any referrals or other 
                business generated between the parties;
                    ``(vi) the compensation is provided pursuant to an 
                agreement which would be commercially reasonable even 
                if no referrals were made to the entity; and
                    ``(vii) the arrangement between the parties meets 
                such other requirements as the Secretary may impose by 
                regulation as needed to protect against program or 
                patient abuse.''.
                    (B) Conforming amendment.--Section 1877(b)(2)(B) of 
                such Act is amended by inserting ``(or by a hospital 
                for which such a group practice provides clinical 
                laboratory services pursuant to an arrangement that 
                meets the requirements of subsection (h)(4)(B))'' after 
                ``by a group practice of which such physician is a 
                member''.
            (3) Treatment of certain faculty practice plans.--The last 
        sentence of section 1877(h)(4)(A) of such Act, as redesignated 
        by paragraph (1)(A), is amended by inserting ``, institution of 
        higher education, or medical school'' after ``hospital''.
    (d) Expanding Rural Provider Exception To Cover Compensation 
Arrangements.--
            (1) In general.--Section 1877(b) of such Act is further 
        amended--
                    (A) by redesignating paragraph (5) as paragraph 
                (7), and
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Rural providers.--In the case of designated services 
        if--
                    ``(A) the entity furnishing the services is in a 
                rural area (as defined in section 1886(d)(2)(D)), and
                    ``(B) substantially all of the services furnished 
                by the entity to individuals entitled to benefits under 
                this title are furnished to such individuals who reside 
                in such a rural area.''.
            (2) Conforming amendments.--Section 1877(d) of such Act is 
        amended--
                    (A) by striking paragraph (2), and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
    (e) Exemption of Compensation Arrangements Involving Certain Types 
of Remuneration.--Section 1877(h)(1) of such Act is amended--
            (1) by striking subparagraph (B);
            (2) in subparagraph (A), by inserting before the period the 
        following: ``(other than an arrangement involving only 
        remuneration described in subparagraph (B))''; and
            (3) by adding at the end the following new subparagraph:
            ``(B) Remuneration described in this subparagraph is any 
        remuneration consisting of any of the following:
                    ``(i) The forgiveness of amounts owed for 
                inaccurate tests or procedures, mistakenly performed 
                tests or procedures, or the correction of minor billing 
                errors.
                    ``(ii) The provision of items, devices, or supplies 
                of minor value that are used to--
                            ``(I) collect, transport, process, or store 
                        specimens for the entity providing the item, 
                        device, or supply, or
                            ``(II) communicate the results of tests or 
                        procedures for such entity.
                    ``(iii) The furnishing by an entity of laboratory 
                services to a group practice affiliated with the 
                entity, if the entity provides all or substantially all 
                of the clinical laboratory services of the group 
                practice.''.
    (f) Miscellaneous and Technical Corrections.--Section 1877 of such 
Act is amended--
            (1) in the fourth sentence of subsection (f)--
                    (A) by striking ``provided'' and inserting 
                ``furnished'', and
                    (B) by striking ``provides'' and inserting 
                ``furnish'';
            (2) in the fifth sentence of subsection (f)--
                    (A) by striking ``providing'' each place it appears 
                and inserting ``furnishing'',
                    (B) by striking ``with respect to the providers'' 
                and inserting ``with respect to the entities'', and
                    (C) by striking ``diagnostic imaging services of 
                any type'' and inserting ``magnetic resonance imaging, 
                computerized axial tomography scans, and ultrasound 
                services''; and
            (3) in subsection (a)(2)(B), by striking ``subsection 
        (h)(1)(A)'' and inserting ``subsection (h)(1)''.

SEC. 5. EFFECTIVE DATES.

    (a) Expansion of Coverage and Payors.--The amendments made by 
sections 2 and 3 shall apply with respect to a referral by a physician 
for designated health services (as described in section 1877(i) of the 
Social Security Act) made on or after the first day of the first month 
beginning 2 years after the date of the enactment of this Act.
    (b) Changes in Exceptions, Etc.--The amendments made by section 4 
shall apply to referrals made on or after January 1, 1992.

                                 <all>

HR 345 SC----2
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