I 

113TH CONGRESS 

1ST SESSION H. R. 2914 

To prevent abusive billing of ancillary services to the Medicare program, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

AUGUST 1, 2013 

Ms. SPEIER (for herself, Ms. TITUS, and Mr. MCDERMOTT) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To prevent abusive billing of ancillary services to the 

Medicare program, and for other purposes. 

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 ‘‘Promoting Integrity 

5 in Medicare Act of 2013’’. 

6 SEC. 2. FINDINGS; PURPOSES. 

7 (a) FINDINGS.—Congress finds the following: 


smartinez on DSK6TPTVN1PROD with BILLS
2 

•HR 2914 IH

1 (1) Recent studies by the Government Account2 ability Office (GAO) examining self-referral practices 

3 in advanced diagnostic imaging and anatomic pa4 thology determined that financial incentives were the 

5 most likely cause of increases in self-referrals. 

6 (2) For advanced diagnostic imaging, GAO 

7 stated that ‘‘providers who self-referred made 

8 400,000 more referrals for advanced imaging serv9 ices than they would have if they were not self-refer10 ring’’, at a cost of ‘‘more than $100 million’’ in 

11 2010. 

12 (3) For anatomic pathology, GAO found that 

13 ‘‘self-referring providers likely referred over 918,000 

14 more anatomic pathology services’’ than they would 

15 have if they were not self-referring, costing Medicare 

16 approximately $69 million more in 2010 than if self17 referral was not permitted. 

18 (4) Noting the rapid growth of services covered 

19 by the in-office ancillary services (IOAS) exception 

20 and evidence that these services are sometimes fur21 nished inappropriately by referring physicians, the 

22 Medicare Payment Advisory Commission (MedPAC) 

23 stated that physician self-referral of ancillary serv24 ices creates incentives to increase volume under 

25 Medicare’s current fee-for-service payment systems 


smartinez on DSK6TPTVN1PROD with BILLS
3 

•HR 2914 IH

1 and the rapid volume growth contributes to Medi2 care’s rising financial burden on taxpayers and bene3 ficiaries. 

4 (5) According to the Centers for Medicare & 

5 Medicaid Services, a key rationale for the IOAS ex6 ception was to permit physicians to provide ancillary 

7 services in their offices to better inform diagnosis 

8 and treatment decisions at the time of the patient’s 

9 initial office visit. 

10 (6) It is necessary, therefore, to distinguish be11 tween services and procedures that were intended to 

12 be covered by the IOAS exception, such as routine 

13 clinical laboratory services or simple x-rays that are 

14 provided during the patient’s initial office visit, and 

15 other health care services which were clearly not en16 visioned to be covered by that exception because they 

17 cannot be performed during the patient’s initial of18 fice visit. 

19 (7) According to a 2010 Health Affairs study, 

20 less than 10 percent of CT, MRI, and Nuclear Medi21 cine scans take place on the same day as the initial 

22 patient office visit. 

23 (8) According to a 2012 Health Affairs study, 

24 urologists’ self-referrals for anatomic pathology serv25 ices of biopsy specimens is linked to increased use 


smartinez on DSK6TPTVN1PROD with BILLS
4 

•HR 2914 IH

1 and volume billed along with a lower detection of 

2 prostate cancer. 

3 (9) According to an October 2011 Laboratory 

4 Economics report, there has been an increase in the 

5 number of anatomic pathology specimen units billed 

6 to the Medicare part B program from 2006 through 

7 2010, specifically for CPT Code 88305, and the rate 

8 of increase billed by physician offices for this service 

9 is accelerating at a far greater pace than the rest of 

10 the provider segments. 

11 (10) According to a 2013 American Academy of 

12 Dermatology Pathology Billing paper, arrangements 

13 involving the split of the technical and professional 

14 components of anatomic pathology services among 

15 different providers may endanger patient safety and 

16 undermine quality of care. 

17 (11) In November 2012, Bloomberg News re18 leased an investigative report that scrutinized or19 deals faced by California prostate cancer patients 

20 treated by a urology clinic that owns radiation ther21 apy equipment. The report found that physician self22 referral resulted in a detrimental impact on patient 

23 care and drove up health care costs in the Medicare 

24 program. The Wall Street Journal, the Washington 

25 Post, and the Baltimore Sun have also published inVerDate Mar 15 2010 01:03 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2914.IH H2914

smartinez on DSK6TPTVN1PROD with BILLS
5 

•HR 2914 IH

1 vestigations showing that urology groups owning ra2 diation therapy machines have utilization rates that 

3 rise quickly and are well above national norms for 

4 radiation therapy treatment of prostate cancer. 

5 (12) According to a 2010 MedPAC report, only 

6 3 percent of outpatient physical therapy services 

7 were provided on the same day as an office visit, 

8 only 9 percent within 7 days of an office visit, and 

9 only 14 percent within 14 days of an office visit. 

10 These services are not integral to the physician’s ini11 tial diagnosis and do not improve patient conven12 ience because patients must return for physical ther13 apy treatments. 

14 (13) Those services intended to be covered 

15 under the IOAS exception are not affected by this 

16 legislation. 

17 (14) The exception to the ownership or invest18 ment prohibition for rural providers in the ‘‘Stark’’ 

19 rule is not affected by this legislation. 

20 (b) PURPOSES.—The purposes of this Act are the fol21 lowing: 

22 (1) Maintain the in-office ancillary services ex23 ception and preserve its original intent by removing 

24 certain complex services from the exception—specifiVerDate Mar 15 2010 01:03 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2914.IH H2914

smartinez on DSK6TPTVN1PROD with BILLS
6 

•HR 2914 IH

1 cally, advanced imaging, anatomic pathology, radi2 ation therapy, and physical therapy. 

3 (2) Protect patients from misaligned provider 

4 financial incentives. 

5 (3) Protect Medicare resources by saving bil6 lions of dollars. 

7 (4) Accomplish the purposes described in para8 graphs (1), (2), and (3) in a manner that does not 

9 alter the existing exception to the ownership or in10 vestment prohibition for rural providers. 

11 SEC. 3. LIMITATION ON APPLICATION OF PHYSICIANS’ 

12 SERVICES AND IN-OFFICE ANCILLARY SERV13 ICES EXCEPTIONS. 

14 (a) IN GENERAL.—Section 1877(b) of the Social Se15 curity Act (42 U.S.C. 1395nn(b)) is amended— 

16 (1) in paragraph (1), by inserting ‘‘, other than 

17 specified non-ancillary services,’’ after ‘‘section 

18 1861(q))’’; and 

19 (2) in paragraph (2), by inserting ‘‘, specified 

20 non-ancillary services,’’ after ‘‘(excluding infusion 

21 pumps)’’. 

22 (b) INCREASE OF CIVIL MONEY PENALTIES.—Sec23 tion 1877(g) of the Social Security Act (42 U.S.C. 

24 1395nn(g)) is amended— 


smartinez on DSK6TPTVN1PROD with BILLS
7 

•HR 2914 IH

1 (1) in paragraph (3), by inserting ‘‘, unless 

2 such bill or claim included a bill or claim for a speci3 fied non-ancillary service, in which case the civil 

4 money penalty shall be not more than $25,000 for 

5 each such service’’ before the period at the end of 

6 the first sentence; and 

7 (2) in paragraph (4), by inserting ‘‘(or 

8 $150,000 if such referrals are for specified non-an9 cillary services)’’ after ‘‘$100,000’’. 

10 (c) ENHANCED SCREENING OF CLAIMS.—Section 

11 1877(g) of the Social Security Act (42 U.S.C. 1395nn(g)) 

12 is further amended by adding at the end the following new 

13 paragraph: 

14 ‘‘(7) COMPLIANCE REVIEW FOR SPECIFIED

15 NON-ANCILLARY SERVICES.— 

16 ‘‘(A) IN GENERAL.—Not later than 180 

17 days after the date of the enactment of this 

18 paragraph, the Secretary, in consultation with 

19 the Inspector General of the Department of 

20 Health and Human Services, shall review com21 pliance with subsection (a)(1) with respect to 

22 referrals for specified non-ancillary services in 

23 accordance with procedures established by the 

24 Secretary. 


smartinez on DSK6TPTVN1PROD with BILLS
8 

•HR 2914 IH

1 ‘‘(B) FACTORS IN COMPLIANCE REVIEW.— 

2 Such procedures— 

3 ‘‘(i) shall, for purposes of targeting 

4 types of entities that the Secretary deter5 mines represent a high risk of noncompli6 ance with subsection (a)(1) with respect to 

7 such billing for such specified non-ancillary 

8 services, apply different levels of review 

9 based on such type; and 

10 ‘‘(ii) may include prepayment reviews, 

11 claims audits, focused medical review, com12 puter algorithms designed to identify pay13 ment or billing anomalies.’’. 

14 (d) DEFINITION OF SPECIFIED NON-ANCILLARY

15 SERVICES.—Section 1877(h) of the Social Security Act 

16 (42 U.S.C. 1395nn(h)) is amended by adding at the end 

17 the following new paragraph: 

18 ‘‘(8) SPECIFIED NON-ANCILLARY SERVICES.— 

19 The term ‘specified non-ancillary service’ means a 

20 service that the Secretary has determined is not usu21 ally provided and completed during an office visit to 

22 a physician’s office in which the service is deter23 mined to be necessary, and includes the following: 

24 ‘‘(A) Anatomic pathology services, as de25 fined by the Secretary and including the techVerDate Mar 15 2010 01:03 Aug 06, 2013 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2914.IH H2914

smartinez on DSK6TPTVN1PROD with BILLS
9 

•HR 2914 IH

1 nical or professional component of the fol2 lowing: 

3 ‘‘(i) Surgical pathology. 

4 ‘‘(ii) Cytopathology. 

5 ‘‘(iii) Hematology. 

6 ‘‘(iv) Blood banking. 

7 ‘‘(v) Pathology consultation and clin8 ical laboratory interpretation services. 

9 ‘‘(B) Radiation therapy services and sup10 plies, as defined by the Secretary. 

11 ‘‘(C) Advanced diagnostic imaging studies 

12 (as defined in section 1834(e)(1)(B)). 

13 ‘‘(D) Physical therapy services (as de14 scribed in paragraph (6)(B)).’’. 

15 (e) CONSTRUCTION.—Nothing in this section (or the 

16 amendments made by this section) shall be construed to 

17 affect the authority of the Secretary of Health and Human 

18 Services to waive the requirements imposed under the pro19 visions of this section (or such amendments) under section 

20 1899 of the Social Security Act (42 U.S.C. 1395jjj). 

21 (f) EFFECTIVE DATE.—The amendments made by 

22 subsections (a) and (b) shall apply to items and services 

23 furnished on or after the first day of the first month be24 ginning more than 12 months after the date of the enact25 ment of this Act. 


smartinez on DSK6TPTVN1PROD with BILLS
10 

•HR 2914 IH

1 SEC. 4. CLARIFICATION OF CERTAIN ENTITIES SUBJECT TO 

2 STARK RULE AND ANTI-MARKUP RULE. 

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

4 1395nn(h)) is further amended by adding at the end the 

5 following new paragraph: 

6 ‘‘(9) CLARIFICATION OF CERTAIN ENTITIES

7 SUBJECT TO ANTI-MARKUP RULE.—In applying this 

8 section, the term ‘entity’ shall include a physician’s 

9 practice when it bills under this title for the tech10 nical component or the professional component of a 

11 specified non-ancillary service, including when such 

12 service is billed in compliance with section 

13 1842(n)(1).’’. 

14 SEC. 5. CLARIFICATION OF SUPERVISION OF TECHNICAL 

15 COMPONENT OF ANATOMIC PATHOLOGY 

16 SERVICES. 

17 Section 1861(s)(17) of the Social Security Act (42 

18 U.S.C. 1395x(s)(17)) is amended— 

19 (1) by striking ‘‘and’’ at the end of subpara20 graph (A); 

21 (2) by redesignating subparagraph (B) as sub22 paragraph (C); and 

23 (3) by inserting after subparagraph (A) the fol24 lowing new subparagraph: 

25 ‘‘(B) with regard to the provision of the tech26 nical component of anatomic pathology services, 


smartinez on DSK6TPTVN1PROD with BILLS
11 

•HR 2914 IH

1 meets the applicable supervision requirements for 

2 laboratories certified in the subspecialty of 

3 histopathology, pursuant to section 353 of the Pub4 lic Health Services Act; and’’. 

5 SEC. 6. EXEMPTION FROM BUDGET NEUTRALITY UNDER 

6 PHYSICIAN FEE SCHEDULE. 

7 Section 1848(c)(2)(B)(v) of the Social Security Act 

8 (42 U.S.C. 1395w–4(c)(2)(B)(v)) is amended by adding 

9 at the end the following new subclause: 

10 ‘‘(VIII) CHANGES TO LIMITA11 TIONS ON CERTAIN PHYSICIAN REFER12 RALS.—Effective for fee schedules es13 tablished beginning with 2014, re14 duced expenditures attributable to the 

15 Promoting Integrity in Medicare Act 

16 of 2013.’’. 

Æ 


smartinez on DSK6TPTVN1PROD with BILLS