I

103D CONGRESS

1ST SESSION H. R. 2138

To provide for budget reconciliation with respect to part B of the medicare

program, the medicaid program, and other health programs within the

jurisdiction of the Committee on Energy and Commerce.

IN THE HOUSE OF REPRESENTATIVES

MAY 17, 1993

Mr. WAXMAN introduced the following bill; which was referred jointly to the

Committees on Energy and Commerce and Ways and Means

A BILL

To provide for budget reconciliation with respect to part

B of the medicare program, the medicaid program, and

other health programs within the jurisdiction of the Committee on Energy and Commerce.

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

3 TITLE I—SHORT TITLE

4 SEC. 101. SHORT TITLE.

5 This Act may be cited as the ‘‘Medicare and Medicaid

6 Budget Reconciliation Act of 1993’’.
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1 TITLE II—TABLE OF CONTENTS

2 SEC. 201. TABLE OF CONTENTS.

3 The table of contents of this Act is as follows:

TITLE I—SHORT TITLE

Sec. 101. Short title.

TITLE II—TABLE OF CONTENTS

Sec. 201. Table of contents.

TITLE III—REFERENCES TO OMNIBUS BUDGET RECONCILIATION

ACT OF 1993

Sec. 302. References to Omnibus Budget Reconciliation Act of 1993.

TITLE IV—OTHER REFERENCES IN ACT

Sec. 401. Other references in act.

TITLE V—RECONCILIATION PROVISIONS RELATING TO

MEDICARE, MEDICAID, AND OTHER HEALTH PROGRAMS

CHAPTER 1—PROVISIONS RELATING TO PART B

SUBCHAPTER A—PHYSICIANS’ SERVICES

Sec. 5001. Reduction in default update for conversion factor for 1994.

Sec. 5002. Reduction in performance standard rate of increase and increase in

maximum reduction permitted in default update.

Sec. 5003. Classification of primary care services as a separate category of

services.

Sec. 5004. Phased-in reduction in practice expense relative value units for certain services.

Sec. 5005. Limitation on payment for the anesthesia care team.

Sec. 5006. Basing payments for anesthesia services on actual time.

Sec. 5007. Separate payment for interpretation of electrocardiograms.

Sec. 5008. Payments for new physicians and practitioners.

Sec. 5009. Geographic adjustment factors for medicare physicians’ services.

Sec. 5010. Extra-billing limits.

Sec. 5011. Relative values for pediatric services.

Sec. 5012. Antigens under physician fee schedule.

Sec. 5013. Administration of claims relating to physicians’ services.

Sec. 5014. Miscellaneous and technical corrections.

SUBCHAPTER B—OUTPATIENT HOSPITAL SERVICES AND AMBULATORY

SURGICAL SERVICES

Sec. 5021. Extension of 10 percent reduction in payments for capital-related

costs of outpatient hospital services.

Sec. 5022. Extension of current reduction in payments for other costs of outpatient hospital services.

Sec. 5023. 1-year freeze in ambulatory surgery rates.

Sec. 5024. Eye or eye and ear hospitals.
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Sec. 5025. Extension of cap on payments for intraocular lenses.

Sec. 5026. Miscellaneous and technical corrections.

SUBCHAPTER C—DURABLE MEDICAL EQUIPMENT

Sec. 5031. Revisions to payment rules for durable medical equipment.

Sec. 5032. Payment for parenteral and enteral nutrients, supplies, and equipment during 1994.

Sec. 5033. Treatment of nebulizers and aspirators.

Sec. 5034. Certification of suppliers.

Sec. 5035. Prohibition against carrier forum shopping.

Sec. 5036. Restrictions on certain marketing and sales activities.

Sec. 5037. Kickback clarification.

Sec. 5038. Beneficiary liability for noncovered services.

Sec. 5039. Adjustments for inherent reasonableness.

Sec. 5040. Payment for surgical dressings.

Sec. 5041. Payments for tens devices.

Sec. 5042. Miscellaneous and technical corrections.

SUBCHAPTER D—PART B PREMIUM

Sec. 5051. Part B premium.

SUBCHAPTER E—OTHER PROVISIONS

Sec. 5061. Payments for clinical diagnostic laboratory tests.

Sec. 5062. Treatment of inpatients and provision of diagnostic and therapeutic

X-ray services by rural health clinics and Federally qualified

health centers.

Sec. 5063. Application of mammography certification requirements.

Sec. 5064. Extension of Alzheimer’s disease demonstration.

Sec. 5065. Oral cancer drugs.

Sec. 5066. Extension of municipal health service demonstration projects.

Sec. 5067. Treatment of certain Indian health programs and facilities as Federally-qualified health centers.

Sec. 5068. Interest payments.

Sec. 5069. Clarification of coverage of certified nurse-midwife services performed outside the maternity cycle.

Sec. 5069A. Increase in, and study of, annual cap on amount of medicare payment for outpatient physical therapy and occupational therapy

services.

Sec. 5070. Miscellaneous and technical corrections.

CHAPTER 2—PROVISIONS RELATING TO PARTS A AND B

Sec. 5071. Elimination of add-on for overhead of hospital-based home health

agencies.

Sec. 5072. Study and report on medicare GME payments.

Sec. 5073. Medicare as secondary payer.

Sec. 5074. Extension of self-referral ban to additional specified services.

Sec. 5075. Reduction in payment for erythropoietin.

Sec. 5076. Medicare hospital agreements with organ procurement organizations.

Sec. 5077. Extension of waiver for Watts Health Foundation.

Sec. 5078. Improved outreach for qualified medicare beneficiaries.

Sec. 5079. Social health maintenance organizations.

Sec. 5080. Peer review organizations.
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Sec. 5081. Hospice information to home health beneficiaries.

Sec. 5082. Health maintenance organizations.

Sec. 5083. Miscellaneous and technical corrections.

CHAPTER 3—PROVISIONS RELATING TO MEDICARE SUPPLEMENTAL

INSURANCE POLICIES

Sec. 5091. Standards for medicare supplemental insurance policies.

Subtitle B—Medicaid Program and Other Health Care Provisions

CHAPTER 1—MEDICAID PROGRAM

SUBCHAPTER A—PROGRAM SAVINGS PROVISIONS

PART I—REPEAL OF MANDATE

Sec. 5101. Personal care services furnished outside the home as optional benefit.

PART II—OUTPATIENT PRESCRIPTION DRUGS

Sec. 5106. Permitting prescription drug formularies under State plans.

Sec. 5107. Elimination of special exemption from prior authorization for new

drugs.

Sec. 5108. Technical corrections relating to section 4401 of OBRA–1990.

PART III—RESTRICTIONS ON DIVESTITURE OF ASSETS AND ESTATE

RECOVERY

Sec. 5111. Transfer of assets.

Sec. 5112. Medicaid estate recoveries.

Sec. 5113. Closing loophole permitting wealthy individuals to qualify for medicaid.

PART IV—IMPROVEMENT IN IDENTIFICATION AND COLLECTION OF THIRD

PARTY PAYMENTS

Sec. 5116. Liability of third parties to pay for care and services.

Sec. 5117. Health Coverage Clearinghouse.

‘‘TITLE XXI—HEALTH COVERAGE CLEARINGHOUSE

‘‘Sec. 2101. Establishment of clearinghouse.

‘‘Sec. 2102. Provision of information.

‘‘Sec. 2103. Requirement that employers furnish information.

‘‘Sec. 2104. Data bank.

Sec. 5118. Medical child support.

PART V—ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE

HOSPITALS

Sec. 5121. Assuring proper payments to disproportionate share hospitals.

SUBCHAPTER B—MISCELLANEOUS PROVISIONS

PART I—ANTI-FRAUD AND ABUSE PROVISIONS

Sec. 5131. Application of medicare rules limiting certain physician referrals.
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Sec. 5132. Intermediate sanctions for kickback violations.

Sec. 5133. Requiring maintenance of effort for State medicaid fraud control

units.

PART II—MANAGED CARE PROVISIONS

Sec. 5135. Medicaid managed care anti-fraud provisions.

Sec. 5136. Clarification of treatment of HMO enrollees in computing the medicaid inpatient utilization rate in qualifying hospitals as disproportionate share hospitals.

Sec. 5137. Extension of period of applicability of enrollment mix requirement

to certain health maintenance organizations providing services

under Dayton Area Health Plan.

Sec. 5138. Extension of medicaid waiver for Tennessee Primary Care Network.

Sec. 5139. Waiver of application of medicaid enrollment mix requirement to

District of Columbia Chartered Health Plan, Inc.

Sec. 5140. Extension of Minnesota Prepaid Medicaid Demonstration Project.

PART III—EMERGENCY SERVICES TO UNDOCUMENTED ALIENS

Sec. 5141. Increase in Federal financial participation for emergency medical assistance to undocumented aliens.

Sec. 5142. Limiting Federal medicaid matching payment to bona fide emergency services for undocumented aliens.

PART IV—MISCELLANEOUS PROVISIONS

Sec. 5144. Increase in limit on Federal medicaid matching payments to Puerto

Rico and other territories.

Sec. 5145. Criteria for making determinations of denial of Federal medicaid

matching payments to States.

Sec. 5146. Renewal of unfunded demonstration project for low-income pregnant

women and children.

Sec. 5147. Optional medicaid coverage of TB-related services for certain TBinfected individuals.

Sec. 5148. Application of mammography certification requirements under the

medicaid program.

Sec. 5149. Removal of sunset on extension of eligibility for working families.

Sec. 5150. Extension of moratorium on treatment of certain facilities as institutions for mental diseases.

Sec. 5150A. Treatment of certain clinics as federally-qualified health centers.

Sec. 5150B. Nursing home reform.

SUBCHAPTER C—MISCELLANEOUS AND TECHNICAL CORRECTIONS RELATING

TO OBRA–1990

Sec. 5151. Effective date.

Sec. 5152. Corrections relating to section 4402 (enrollment under group health

plans).

Sec. 5153. Corrections relating to section 4501 (low-income medicare beneficiaries).

Sec. 5154. Corrections relating to section 4601 (child health).

Sec. 5155. Corrections relating to section 4602 (outreach locations).

Sec. 5156. Corrections relating to section 4604 (payment for hospital services

for children under 6 years of age).

Sec. 5157. Corrections relating to section 4703 (payment adjustments for disproportionate share hospitals).
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Sec. 5158. Corrections relating to section 4704 (Federally-qualified health centers).

Sec. 5159. Corrections relating to section 4708 (substitute physicians).

Sec. 5160. Corrections relating to section 4711 (home and community care for

frail elderly).

Sec. 5161. Corrections relating to section 4712 (community supported living arrangements services).

Sec. 5162. Correction relating to section 4713 (COBRA continuation coverage).

Sec. 5163. Correction relating to section 4716 (medicaid transition for family

assistance).

Sec. 5164. Corrections relating to section 4723 (medicaid spenddown option).

Sec. 5165. Corrections relating to section 4724 (optional State disability determinations).

Sec. 5166. Correction relating to section 4732 (special rules for health maintenance organizations).

Sec. 5167. Corrections relating to section 4741 (home and community-based

waivers).

Sec. 5168. Corrections relating to section 4744 (frail elderly waivers).

Sec. 5169. Corrections relating to section 4747 (coverage of HIV-positive individuals).

Sec. 5170. Correction relating to section 4751 (advance directives).

Sec. 5171. Corrections relating to section 4752 (physicians’ services).

Sec. 5172. Corrections relating to section 4801 (nursing home reform).

Sec. 5173. Other technical corrections.

Sec. 5174. Corrections to designations of new provisions.

CHAPTER 2—UNIVERSAL ACCESS TO CHILDHOOD IMMUNIZATIONS

Sec. 5181. Establishment of entitlement and monitoring programs with respect

to childhood immunizations.

‘‘Subtitle 3—Entitlement and Monitoring Programs With Respect to

Childhood Immunizations

‘‘PART A—ENTITLEMENT PROGRAM

‘‘Sec. 2151. Delivery to States of sufficient quantities of pediatric vaccines.

‘‘Sec. 2152. Entitlements.

‘‘Sec. 2153. Voluntary participation of health care providers.

‘‘Sec. 2154. Intrastate distribution of pediatric vaccines.

‘‘Sec. 2155. General provisions.

‘‘Sec. 2156. State option regarding immunization of additional categories

of children.

‘‘Sec. 2157. State application for vaccines.

‘‘Sec. 2158. Contracts with manufacturers of pediatric vaccines.

‘‘Sec. 2159. Certain administrative variations.

‘‘Sec. 2160. List of pediatric vaccines; schedule for administration.

‘‘Sec. 2161. Childhood Immunization Trust Fund.

‘‘Sec. 2162. Definitions.

‘‘Sec. 2163. Termination of program.

‘‘PART B—NATIONAL SYSTEM FOR MONITORING IMMUNIZATION STATUS OF

CHILDREN

‘‘Sec. 2171. Formula grants for State registries with respect to monitoring.

‘‘Sec. 2172. Registry data.
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‘‘Sec. 2173. General provisions.

‘‘Sec. 2174. Application for grant.

‘‘Sec. 2175. Determination of amount of allotment.

‘‘Sec. 2176. Definitions.

‘‘Sec. 2177. Authorization of appropriations.

‘‘PART C—FUNDING FOR OTHER PURPOSES REGARDING CHILDHOOD

IMMUNIZATIONS

‘‘Sec. 2181. Grants regarding Year 2000 health objectives.

Sec. 5182. National Vaccine Injury Compensation Program amendments.

Sec. 5183. Medicaid immunization provisions.

Sec. 5184. Availability of medicaid payments for childhood vaccine replacement

programs.

Sec. 5185. Healthy start for infants.

Sec. 5186. Increase in authorization of appropriations for the Maternal and

Child Health Services Block Grant Program.

Sec. 5187. Miscellaneous technical corrections to Public Health Service Act provisions.

1 TITLE III—REFERENCES TO OM2 NIBUS BUDGET RECONCILI3 ATION ACT OF 1993

4 SEC. 302. REFERENCES TO OMNIBUS BUDGET RECONCILI5 ATION ACT OF 1993.

6 Any reference in this Act (or in any amendment made

7 by this Act) to the Omnibus Budget Reconciliation Act

8 of 1993 shall be deemed to be a reference to this Act.

9 TITLE IV—OTHER REFERENCES

10 IN ACT

11 SEC. 401. OTHER REFERENCES IN ACT.

12 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex13 cept as otherwise specifically provided, whenever in this

14 Act an amendment is expressed in terms of an amendment

15 to or repeal of a section or other provision, the reference
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1 shall be considered to be made to that section or other

2 provision of the Social Security Act.

3 (b) REFERENCES TO OBRA.—In this Act, the terms

4 ‘‘OBRA–1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’, and

5 ‘‘OBRA–1990’’ refer to the Omnibus Budget Reconcili6 ation Act of 1986 (Public Law 99–509), the Omnibus

7 Budget Reconciliation Act of 1987 (Public Law 100–203),

8 the Omnibus Budget Reconciliation Act of 1989 (Public

9 Law 101–239), and the Omnibus Budget Reconciliation

10 Act of 1990 (Public Law 101–508), respectively.

11 TITLE V—RECONCILIATION PRO12 VISIONS RELATING TO MEDI13 CARE, MEDICAID, AND OTHER

14 HEALTH PROGRAMS

15 Subtitle A—Medicare Program

16 CHAPTER 1—PROVISIONS RELATING TO

17 PART B

18 Subchapter A—Physicians’ Services

19 SEC. 5001. REDUCTION IN DEFAULT UPDATE FOR CONVER20 SION FACTOR FOR 1994.

21 Section 1848(d)(3)(A) (42 U.S.C. 1395w–

22 4(d)(3)(A)) is amended—

23 (1) in clause (i), by striking ‘‘clause (iii)’’ and

24 inserting ‘‘clauses (iii) and (iv)’’, and
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1 (2) by adding at the end the following new

2 clause:

3 ‘‘(iv) ADJUSTMENT IN PERCENTAGE

4 INCREASE FOR 1994.—In applying clause

5 (i) for services (other than primary care

6 services) furnished in 1994, the percentage

7 increase in the appropriate update index

8 shall be reduced by—

9 ‘‘(I) 3 percentage points for sur10 gical services (as defined for purposes

11 of subsection (j)(1)), and

12 ‘‘(II) 2 percentage points for

13 other services.’’.

14 SEC. 5002. REDUCTION IN PERFORMANCE STANDARD RATE

15 OF INCREASE AND INCREASE IN MAXIMUM

16 REDUCTION PERMITTED IN DEFAULT UP17 DATE.

18 (a) REDUCTION IN PERFORMANCE STANDARD FAC19 TOR.—Section 1848(f)(2)(B) (42 U.S.C. 1395w–

20 4(f)(2)(B)) is amended—

21 (1) by striking ‘‘and’’ at the end of clause (ii),

22 and

23 (2) by striking clause (iii) and inserting the fol24 lowing:

25 ‘‘(iii) for 1993 is 2 percentage points,
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‘‘(iv) for 1994 is 31 1 ⁄2 percentage

2 points, and

3 ‘‘(v) for each succeeding year is 4 per4 centage points.’’.

5 (b) INCREASE IN MAXIMUM REDUCTION PERMITTED

6 IN DEFAULT UPDATE.—Section 1848(d)(3)(B)(ii) (42

7 U.S.C. 1395w–4(d)(3)(B)(ii)) is amended—

8 (1) in subclause (II), by striking ‘‘or 1995’’,

9 and

10 (2) in subclause (III), by striking ‘‘3’’ and in11 serting ‘‘5’’.

12 SEC. 5003. CLASSIFICATION OF PRIMARY CARE SERVICES

13 AS A SEPARATE CATEGORY OF SERVICES.

14 (a) IN GENERAL.—Section 1848(j)(1) (42 U.S.C.

15 1395w–4(j)(1)) is amended by inserting ‘‘, primary care

16 services (as defined in section 1842(i)(4)),’’ after ‘‘Sec17 retary)’’.

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply—

20 (1) to volume performance standard rates of in21 crease established under section 1848(f) of the So22 cial Security Act for fiscal years beginning with fis23 cal year 1994, and

24 (2) to updates in the conversion factors for phy25 sicians’ services established under section 1848(d) of
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1 such Act for physicians’ services to be furnished in

2 calendar years beginning with 1996.

3 SEC. 5004. PHASED-IN REDUCTION IN PRACTICE EXPENSE

4 RELATIVE VALUE UNITS FOR CERTAIN SERV5 ICES.

6 (a) IN GENERAL.—Section 1848(c)(2) (42 U.S.C.

7 1395w–4(c)(2)) is amended by adding at the end the fol8 lowing new subparagraph:

9 ‘‘(E) REDUCTION IN PRACTICE EXPENSE

10 RELATIVE VALUE UNITS FOR CERTAIN SERV11 ICES.—

12 ‘‘(i) IN GENERAL.—Subject to clause

13 (ii), the Secretary shall reduce the practice

14 expense relative value units applied to serv15 ices described in clause (iii) furnished in—

16 ‘‘(I) 1994, by 25 percent of the

17 number by which the number of prac18 tice expense relative value units (de19 termined for 1994 without regard to

20 this subparagraph) exceeds the num21 ber of work relative value units deter22 mined for 1994,

23 ‘‘(II) 1995, by an additional 25

24 percent of such excess, and
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1 ‘‘(III) 1996 and subsequent

2 years, by an additional 25 percent of

3 such excess.

4 ‘‘(ii) FLOOR ON REDUCTIONS.—The

5 practice expense relative value units for a

6 physicians’ service shall not be reduced

7 under this subparagraph to a number less

8 than 110 percent of the number of work

9 relative value units.

10 ‘‘(iii) SERVICES COVERED.—For pur11 poses of clause (i), the services described in

12 this clause are physicians’ services that are

13 not described in clause (iv) and for

14 which—

15 ‘‘(I) there are work relative value

16 units, and

17 ‘‘(II) the number of practice ex18 pense relative value units (determined

19 for 1994) exceeds 110 percent of the

20 number of work relative value units

21 (determined for such year).

22 ‘‘(iv) EXCLUDED SERVICES.—For

23 purposes of clause (iii), the services de24 scribed in this clause are—

25 ‘‘(I) anesthesia services,
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1 ‘‘(II) radiology services, and

2 ‘‘(III) services which the Sec3 retary determines at least 75 percent

4 of which are provided under this title

5 in an office setting.’’.

6 (b) DEVELOPMENT OF RESOURCE-BASED METH7 ODOLOGY FOR PRACTICE EXPENSES.—

8 (1) The Secretary of Health and Human Serv9 ices shall develop a methodology for implementing in

10 1997 a resource-based system for determining prac11 tice expense relative value units for each physician’s

12 service.

13 (2) The Secretary shall transmit a report by

14 June 30, 1996, on the methodology developed under

15 paragraph (1) to the Committees on Ways and

16 Means and Energy and Commerce of the House of

17 Representatives and the Committee on Finance of

18 the Senate. The report shall include a presentation

19 of data utilized in developing the methodology and

20 an explanation of the methodology.

21 SEC. 5005. LIMITATION ON PAYMENT FOR THE ANESTHESIA

22 CARE TEAM.

23 (a) LIMIT ON PAYMENT TO A PHYSICIAN FOR MEDI24 CAL DIRECTION.—
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1 (1) IN GENERAL.—Section 1848(a) (42 U.S.C.

2 1395w–4(a)) is amended by adding at the end the

3 following new paragraph:

4 ‘‘(5) SPECIAL RULE FOR MEDICAL DIREC5 TION.—

6 ‘‘(A) IN GENERAL.—With respect to physi7 cians’ services furnished on or after January 1,

8 1994, and consisting of medical direction of

9 two, three, or four concurrent anesthesia cases,

10 the fee schedule amount to be applied shall not

11 exceed one-half of the amount described in sub12 paragraph (B).

13 ‘‘(B) AMOUNT.—The amount described in

14 this subparagraph, for a physician’s medical di15 rection of the performance of anesthesia serv16 ices, is the following percentage of the fee

17 schedule amount otherwise applicable under this

18 section if the anesthesia services were person19 ally performed by the physician alone:

20 ‘‘(i) For services furnished during

21 1994, 120 percent.

22 ‘‘(ii) For services furnished during

23 1995, 115 percent.

24 ‘‘(iii) For services furnished during

25 1996, 110 percent.
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1 ‘‘(iv) For services furnished during

2 1997, 105 percent.

3 ‘‘(v) For services furnished after

4 1997, 100 percent.’’.

5 (2) ELIMINATION OF REDUCTION FOR MEDICAL

6 DIRECTION OF MULTIPLE NURSE ANESTHETISTS.—

7 Section 1842(b) (42 U.S.C. 1395u(b)) is amended

8 by striking paragraph (13).

9 (b) PAYMENT TO A CERTIFIED REGISTERED NURSE

10 ANESTHETIST FOR MEDICALLY DIRECTED SERVICES.—

11 Subparagraph (B) of section 1833(l)(4) (42 U.S.C.

12 1395l(l)(4)) is amended—

13 (1) in clause (i), by inserting ‘‘and before Janu14 ary 1, 1994,’’ after ‘‘1991,’’;

15 (2) in clause (ii)—

16 (A) by adding ‘‘and’’ at the end of

17 subclause (II),

18 (B) by striking the comma at the end of

19 subclause (III) and inserting a period, and

20 (C) by striking subclauses (IV) through

21 (VII); and

22 (3) by adding at the end the following new

23 clause:

24 ‘‘(iii) In the case of services of a certified registered

25 nurse anesthetist who is medically directed by a physician
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1 and that are furnished on or after January 1, 1994, the

2 fee schedule amount shall be one-half of the amount de3 scribed in section 1848(a)(5)(B) with respect to the physi4 cian.’’.

5 SEC. 5006. BASING PAYMENTS FOR ANESTHESIA SERVICES

6 ON ACTUAL TIME.

7 (a) PHYSICIANS’ SERVICES.—Section 1848(b)(2)(B)

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

9 the end the following: ‘‘For anesthesia services furnished

10 on or after January 1, 1994, the Secretary may not mod11 ify the methodology in effect as of January 1, 1993, for

12 determining the amount of time that may be billed for

13 such services under this section.’’.

14 (b) SERVICES OF CERTIFIED REGISTERED NURSE

15 ANESTHETISTS.—Section 1833(l)(1)(B) (42 U.S.C.

16 1395l(l)(1)(B)) is amended by adding at the end the fol17 lowing: ‘‘For anesthesia services furnished on or after

18 January 1, 1994, the Secretary may not modify the meth19 odology in effect as of January 1, 1993, for determining

20 the amount of time that may be billed for such services

21 under this section.’’.

22 SEC. 5007. SEPARATE PAYMENT FOR INTERPRETATION OF

23 ELECTROCARDIOGRAMS.

24 (a) IN GENERAL.—Paragraph (3) of section 1848(b)

25 (42 U.S.C. 1395w–4(b)) is amended to read as follows:
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1 ‘‘(3) TREATMENT OF INTERPRETATION OF

2 ELECTROCARDIOGRAMS.—The Secretary—

3 ‘‘(A) shall make separate payment under

4 this section for the interpretation of electro5 cardiograms performed or ordered to be per6 formed as part of or in conjunction with a visit

7 to or a consultation with a physician, and

8 ‘‘(B) shall adjust the relative values estab9 lished for visits and consultations under sub10 section (c) so as not to include relative value

11 units for interpretations of electrocardiograms

12 in the relative value for visits and consulta13 tions.’’.

14 (b) ASSURING BUDGET NEUTRALITY.—Section

15 1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended by add16 ing at the end the following new subparagraph:

17 ‘‘(E) BUDGET NEUTRALITY ADJUST18 MENTS.—The Secretary—

19 ‘‘(i) shall reduce the relative values

20 for all services (other than anesthesia serv21 ices) established under this paragraph

22 (and, in the case of anesthesia services, the

23 conversion factor established by the Sec24 retary for such services) by such percent25 age as the Secretary determines to be nec-
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1 essary so that, beginning in 1996, the

2 amendment made by section 5007(a) of

3 the Omnibus Budget Reconciliation Act of

4 1993 would not result in expenditures

5 under this section that exceed the amount

6 of such expenditures that would have been

7 made if such amendment had not been

8 made, and

9 ‘‘(ii) shall reduce the amounts deter10 mined under subsection (a)(2)(B)(ii)(I) by

11 such percentage as the Secretary deter12 mines to be required to assure that, taking

13 into account the reductions made under

14 clause (i), the amendment made by section

15 5007(a) of the Omnibus Budget Reconcili16 ation Act of 1993 would not result in ex17 penditures under this section in 1994 that

18 exceed the amount of such expenditures

19 that would have been made if such amend20 ment had not been made.’’.

21 (c) CONFORMING AMENDMENTS.—Section 1848 (42

22 U.S.C. 1395w–4) is amended—

23 (1) in subsection (a)(2)(B)(ii)(I), by inserting

24 ‘‘and as adjusted under subsection (c)(2)(E)(ii)’’

25 after ‘‘for 1994’’;
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1 (2) in subsection (c)(2)(A)(i), by adding at the

2 end the following: ‘‘Such relative values are subject

3 to adjustment under subparagraph (E)(i).’’; and

4 (3) in subsection (i)(1)(B), by adding at the

5 end ‘‘including adjustments under subsection

6 (c)(2)(E),’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to services furnished on or after

9 January 1, 1994.

10 SEC. 5008. PAYMENTS FOR NEW PHYSICIANS AND PRACTI11 TIONERS.

12 (a) EQUAL TREATMENT OF NEW PHYSICIANS AND

13 PRACTITIONERS.—(1) Section 1848(a) (42 U.S.C.

14 1395w–4(a)) is amended by striking paragraph (4).

15 (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is

16 amended by striking subparagraph (F).

17 (b) BUDGET NEUTRALITY ADJUSTMENT.—Notwith18 standing any other provision of law, the Secretary of

19 Health and Human Services shall reduce the following val20 ues and amounts for 1994 (to be applied for that year

21 and subsequent years) by such uniform percentage as the

22 Secretary determines to be required to assure that the

23 amendments made by subsection (a) will not result in ex24 penditures under part B of title XVIII of the Social Secu25 rity Act in 1994 that exceed the amount of such expendi-
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1 tures that would have been made if such amendments had

2 not been made:

3 (1) The relative values established under section

4 1848(c) of such Act for services (other than anesthe5 sia services) and, in the case of anesthesia services,

6 the conversion factor established under section 1848

7 of such Act for such services.

8 (2) The amounts determined under section

9 1848(a)(2)(B)(ii)(I) of such Act.

10 (3) The prevailing charges or fee schedule

11 amounts to be applied under such part for services

12 of a health care practitioner (as defined in section

13 1842(b)(4)(F)(ii)(I) of such Act, as in effect before

14 the date of the enactment of this Act).

15 (c) CONFORMING AMENDMENTS.—Section 1848 (42

16 U.S.C. 1395w–4), as amended by section 5007(c), is

17 amended—

18 (1) in subsection (a)(2)(B)(ii)(I), by inserting

19 ‘‘and section 5008(b) of the Omnibus Budget Rec20 onciliation Act of 1993’’ after ‘‘for 1994’’;

21 (2) in subsection (c)(2)(A)(i), by inserting ‘‘and

22 section 5008(b) of the Omnibus Budget Reconcili23 ation Act of 1993’’ after ‘‘under subparagraph

24 (E)(i)’’; and
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1 (3) in subsection (i)(1)(B), by inserting ‘‘and

2 section 5008(b) of the Omnibus Budget Reconcili3 ation Act of 1993’’ after ‘‘under subsection

4 (c)(2)(E)’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall apply to services furnished on or after

7 January 1, 1994.

8 SEC. 5009. GEOGRAPHIC ADJUSTMENT FACTORS FOR MEDI9 CARE PHYSICIANS’ SERVICES.

10 (a) REQUIRING CONSULTATION WITH REPRESENTA11 TIVES OF PHYSICIANS IN REVIEWING GEOGRAPHIC AD12 JUSTMENT FACTORS.—Section 1848(e)(1)(C) (42 U.S.C.

13 1395w–4(e)(1)(C)) is amended by striking ‘‘shall review’’

14 and inserting ‘‘shall, in consultation with appropriate rep15 resentatives of physicians, review’’.

16 (b) USE OF MOST RECENT DATA IN GEOGRAPHIC

17 ADJUSTMENT.—Section 1848(e)(1) (42 U.S.C. 1395w–

18 4(e)(1)) is amended by adding at the end the following

19 new subparagraph:

20 ‘‘(D) USE OF RECENT DATA.—In estab21 lishing indices and index values under this

22 paragraph, the Secretary shall use the most re23 cent data available relating to practice ex24 penses, malpractice expenses, and physician

25 work effort in different fee schedule areas.’’.
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1 (c) DEADLINE FOR INITIAL REVIEW AND REVI2 SION.—The Secretary of Health and Human Services

3 shall first review and revise geographic adjustment factors

4 under section 1848(e)(1)(C) of the Social Security Act by

5 not later than January 1, 1995.

6 (d) REPORT ON REVIEW PROCESS.—Not later than

7 1 year after the date of the enactment of this Act, the

8 Secretary of Health and Human Services shall study and

9 report to the Committee on Finance of the Senate and

10 the Committee on Ways and Means and the Committee

11 on Energy and Commerce of the House of Representatives

12 on—

13 (1) the data necessary to review and revise the

14 indices established under section 1848(e)(1)(A) of

15 the Social Security Act, including—

16 (A) the shares allocated to physicians’

17 work effort, practice expenses (other than mal18 practice expenses), and malpractice expenses;

19 (B) the weights assigned to the input com20 ponents of such shares; and

21 (C) the index values assigned to such com22 ponents;

23 (2) any limitations on the availability of data

24 necessary to review and revise such indices at least

25 every three years;
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1 (3) ways of addressing such limitations, with

2 particular attention to the development of alternative

3 data sources for input components for which current

4 index values are based on data collected less fre5 quently than every three years; and

6 (4) the costs of developing more accurate and

7 timely data.

8 SEC. 5010. EXTRA-BILLING LIMITS.

9 (a) ENFORCEMENT AND UNIFORM APPLICATION.—

10 (1) ENFORCEMENT.—Paragraph (1) of section

11 1848(g) (42 U.S.C. 1395w–4(g)) is amended to read

12 as follows:

13 ‘‘(1) LIMITATION ON ACTUAL CHARGES.—

14 ‘‘(A) IN GENERAL.—In the case of a

15 nonparticipating physician or nonparticipating

16 supplier or other person (as defined in section

17 1842(i)(2)) who does not accept payment on an

18 assignment-related basis for a physician’s serv19 ice furnished with respect to an individual en20 rolled under this part, the following rules apply:

21 ‘‘(i) APPLICATION OF LIMITING

22 CHARGE.—No person may bill or collect an

23 actual charge for the service in excess of

24 the limiting charge described in paragraph

25 (2) for such service.
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1 ‘‘(ii) NO LIABILITY FOR EXCESS

2 CHARGES.—No person is liable for pay3 ment of any amounts billed for the service

4 in excess of such limiting charge.

5 ‘‘(iii) CORRECTION OF EXCESS

6 CHARGES.—If such a physician, supplier,

7 or other person bills, but does not collect,

8 an actual charge for a service in violation

9 of clause (i), the physician, supplier, or

10 other person shall reduce on a timely basis

11 the actual charge billed for the service to

12 an amount not to exceed the limiting

13 charge for the service.

14 ‘‘(iv) REFUND OF EXCESS COLLEC15 TIONS.—If such a physician, supplier, or

16 other person collects an actual charge for

17 a service in violation of clause (i), the phy18 sician, supplier, or other person shall pro19 vide on a timely basis a refund to the indi20 vidual charged in the amount by which the

21 amount collected exceeded the limiting

22 charge for the service. The amount of such

23 a refund shall be reduced to the extent the

24 individual has an outstanding balance owed

25 by the individual to the physician.
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1 ‘‘(B) SANCTIONS.—If a physician, supplier,

2 or other person—

3 ‘‘(i) knowingly and willfully bills or

4 collects for services in violation of subpara5 graph (A)(i) on a repeated basis, or

6 ‘‘(ii) fails to comply with clause (iii)

7 or (iv) of subparagraph (A) on a timely

8 basis,

9 the Secretary may apply sanctions against the

10 physician, supplier, or other person in accord11 ance with paragraph (2) of section 1842(j). In

12 applying this subparagraph, paragraph (4) of

13 such section applies in the same manner as

14 such paragraph applies to such section and any

15 reference in such section to a physician is

16 deemed also to include a reference to a supplier

17 or other person under this subparagraph.

18 ‘‘(C) TIMELY BASIS.—For purposes of this

19 paragraph, a correction of a bill for an excess

20 charge or refund of an amount with respect to

21 a violation of subparagraph (A)(i) in the case of

22 a service is considered to be provided ‘on a

23 timely basis’, if the reduction or refund is made

24 not later than 30 days after the date the physi25 cian, supplier, or other person is notified by the
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1 carrier under this part of such violation and of

2 the requirements of subparagraph (A).’’.

3 (2) UNIFORM APPLICATION OF EXTRA-BILLING

4 LIMITS TO PHYSICIANS’ SERVICES.—

5 (A) IN GENERAL.—Section 1848(g)(2)(C)

6 (42 U.S.C. 1395w–4(g)(2)(C)) is amended by

7 inserting ‘‘or for nonparticipating suppliers or

8 other persons’’ after ‘‘nonparticipating physi9 cians’’.

10 (B) CONFORMING DEFINITION.—Section

11 1842(i)(2) (42 U.S.C. 1395u(i)(2)) is amend12 ed—

13 (i) by striking ‘‘, and the term’’ and

14 inserting ‘‘; the term’’, and

15 (ii) by inserting before the period at

16 the end the following: ‘‘; and the term

17 ‘nonparticipating supplier or other person’

18 means a supplier or other person (exclud19 ing a provider of services) that is not a

20 participating physician or supplier (as de21 fined in subsection (h)(1))’’.

22 (3) ADDITIONAL CONFORMING AMENDMENTS.—

23 Section 1848 (42 U.S.C. 1395w–4) is amended—

24 (A) in subsection (a)(3)—
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1 (i) by inserting ‘‘AND SUPPLIERS’’

2 after ‘‘PHYSICIANS’’,

3 (ii) by inserting ‘‘or a

4 nonparticipating supplier or other person’’

5 after ‘‘nonparticipating physician’’, and

6 (iii) by adding at the end the follow7 ing: ‘‘In the case of physicians’ services

8 (including services which the Secretary ex9 cludes pursuant to subsection (j)(3)) of a

10 nonparticipating physician, supplier, or

11 other person for which payment is made

12 under this part on a basis other than the

13 fee schedule amount, the payment shall be

14 based on 95 percent of the payment basis

15 for such services furnished by a participat16 ing physician, supplier, or other person.’’;

17 (B) in subsection (g)(1)(A), as amended by

18 subsection (a), in the matter before clause (i),

19 by inserting ‘‘(including services which the Sec20 retary excludes pursuant to subsection (j)(3))’’

21 after ‘‘a physician’s service’’;

22 (C) in subsection (g)(2)(D), by inserting

23 ‘‘(or, if payment under this part is made on a

24 basis other than the fee schedule under this sec-
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1 tion, 95 percent of the other payment basis)’’

2 after ‘‘subsection (a)’’;

3 (D) in subsection (g)(3)(B)—

4 (i) by inserting after the first sentence

5 the following: ‘‘ No person is liable for pay6 ment of any amounts billed for such a

7 service in violation of the previous sen8 tence.’’, and

9 (ii) in the last sentence, by striking

10 ‘‘previous sentence’’ and inserting ‘‘first

11 sentence’’;

12 (E) in subsection (h)—

13 (i) by inserting ‘‘or nonparticipating

14 supplier or other person furnishing physi15 cians’ services (as defined in section

16 1848(j)(3))’’ after ‘‘physician’’ the first

17 place it appears,

18 (ii) by inserting ‘‘, supplier, or other

19 person’’ after ‘‘physician’’ the second place

20 it appears, and

21 (iii) by inserting ‘‘, suppliers, and

22 other persons’’ after ‘‘physicians’’ the sec23 ond place it appears; and
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1 (F) in subsection (j)(3), by inserting ‘‘, ex2 cept for purposes of subsections (a)(3), (g), and

3 (h)’’ after ‘‘tests and’’.

4 (b) CLARIFICATION OF MANDATORY ASSIGNMENT

5 RULES FOR CERTAIN PRACTITIONERS.—

6 (1) IN GENERAL.—Section 1842(b) (42 U.S.C.

7 1395u(b)) is amended by adding at the end the fol8 lowing new paragraph:

9 ‘‘(19)(A) Payment for any service furnished by a

10 practitioner described in subparagraph (C) and for which

11 payment may be made under this part on a reasonable

12 charge or fee schedule basis may only be made under this

13 part on an assignment-related basis.

14 ‘‘(B) A practitioner described in subparagraph (C) or

15 other person may not bill (or collect any amount from)

16 the individual or another person for any service described

17 in subparagraph (A), except for deductible and coinsur18 ance amounts applicable under this part. No person is lia19 ble for payment of any amounts billed for such a service

20 in violation of the previous sentence. If a practitioner or

21 other person knowingly and willfully bills (or collects an

22 amount) for such a service in violation of such sentence,

23 the Secretary may apply sanctions against the practitioner

24 or other person in the same manner as the Secretary may

25 apply sanctions against a physician in accordance with
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1 section 1842(j)(2) in the same manner as such section ap2 plies with respect to a physician. Paragraph (4) of section

3 1842(j) shall apply in this subparagraph in the same man4 ner as such paragraph applies to such section.

5 ‘‘(C) A practitioner described in this subparagraph

6 is any of the following:

7 ‘‘(i) A physician assistant, nurse practitioner, or

8 clinical nurse specialist (as defined in section

9 1861(aa)(5)).

10 ‘‘(ii) A certified registered nurse anesthetist (as

11 defined in section 1861(bb)(2)).

12 ‘‘(iii) A certified nurse-midwife (as defined in

13 section 1861(gg)(2)).

14 ‘‘(iv) A clinical social worker (as defined in sec15 tion 1861(hh)(1)).

16 ‘‘(v) A clinical psychologist (as defined by the

17 Secretary for purposes of section 1861(ii)).

18 ‘‘(D) For purposes of this paragraph, a service fur19 nished by a practitioner described in subparagraph (C) in20 cludes any services and supplies furnished as incident to

21 the service as would otherwise be covered under this part

22 if furnished by a physician or as incident to a physician’s

23 service.’’.

24 (2) CONFORMING AMENDMENTS.—
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1 (A) Section 1833 (42 U.S.C. 1395l) is

2 amended—

3 (i) in subsection (l)(5), by striking

4 subparagraph (B) and redesignating sub5 paragraph (C) as subparagraph (B);

6 (ii) by striking subsection (p); and

7 (iii) in subsection (r), by striking

8 paragraph (3) and redesignating para9 graph (4) as paragraph (3).

10 (B) Section 1842(b)(12) (42 U.S.C.

11 1395u(b)(12)) is amended by striking subpara12 graph (C).

13 (c) INFORMATION ON EXTRA-BILLING LIMITS.—

14 (1) PART OF EXPLANATION OF MEDICARE BEN15 EFITS.—Section 1842(h)(7) (42 U.S.C.

16 1395u(h)(7)) is amended—

17 (A) by striking ‘‘and’’ at the end of sub18 paragraph (B),

19 (B) in subparagraph (C), by striking ‘‘shall

20 include’’,

21 (C) in subparagraph (C), by striking the

22 period at the end and inserting ‘‘, and’’, and

23 (D) by adding at the end the following new

24 subparagraph:
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1 ‘‘(D) in the case of services for which the billed

2 amount exceeds the limiting charge imposed under

3 section 1848(g), information regarding such applica4 ble limiting charge (including information concern5 ing the right to a refund under section

6 1848(g)(1)(A)(iv)).’’.

7 (2) DETERMINATIONS BY CARRIERS.—Subpara8 graph (G) of section 1842(b)(3) (42 U.S.C.

9 1395u(b)(3)) is amended to read as follows:

10 ‘‘(G) will, for a service that is furnished with

11 respect to an individual enrolled under this part,

12 that is not paid on an assignment-related basis, and

13 that is subject to a limiting charge under section

14 1848(g)—

15 ‘‘(i) determine, prior to making payment,

16 whether the amount billed for such service ex17 ceeds the limiting charge applicable under sec18 tion 1848(g)(2);

19 ‘‘(ii) notify the physician, supplier, or other

20 person periodically (but not less often than once

21 every 30 days) of determinations that amounts

22 billed exceeded such applicable limiting charges;

23 and

24 ‘‘(iii) provide for prompt response to in25 quiries of physicians, suppliers, and other per-
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1 sons concerning the accuracy of such limiting

2 charges for their services;’’.

3 (d) REPORT ON CHARGES IN EXCESS OF LIMITING

4 CHARGE.—Section 1848(g)(6)(B) (42 U.S.C. 1395w–

5 4(g)(6)(B)) is amended by inserting ‘‘the extent to which

6 actual charges exceed limiting charges, the number and

7 types of services involved, and the average amount of ex8 cess charges and’’ after ‘‘report to the Congress’’.

9 (e) MISCELLANEOUS AND TECHNICAL AMEND10 MENTS.—Section 1833 (42 U.S.C. 1395l) is amended—

11 (1) in subsection (a)(1), as amended by section

12 5070(e)(2)—

13 (A) by striking ‘‘and’’ before ‘‘(O)’’, and

14 (B) by inserting before the semicolon at

15 the end the following: ‘‘, and (P) with respect

16 to services described in clauses (i), (ii) and (iv)

17 of section 1861(s)(2)(K), the amounts paid are

18 subject to the provisions of section

19 1842(b)(12)’’; and

20 (2) in subsection (h)(5)(D)—

21 (A) by striking ‘‘paragraphs (2) and (3)’’

22 and by inserting ‘‘paragraph (2)’’, and

23 (B) by adding at the end the following:

24 ‘‘Paragraph (4) of such section shall apply in
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1 this subparagraph in the same manner as such

2 paragraph applies to such section.’’.

3 (f) EFFECTIVE DATES.—

4 (1) ENFORCEMENT AND UNIFORM APPLICA5 TION; MISCELLANEOUS AND TECHNICAL AMEND6 MENTS.—The amendments made by subsections (a)

7 and (e) shall apply to services furnished on or after

8 the date of the enactment of this Act; except that

9 the amendments made by subsection (a) shall not

10 apply to services of a nonparticipating supplier or

11 other person furnished before January 1, 1994.

12 (2) PRACTITIONERS.—The amendments made

13 by subsection (b) shall apply to services furnished on

14 or after January 1, 1994.

15 (3) EOMBS.—The amendments made by sub16 section (c)(1) shall apply to explanations of benefits

17 provided on or after January 1, 1994.

18 (4) CARRIER DETERMINATIONS.—The amend19 ments made by subsection (c)(2) shall apply to con20 tracts as of January 1, 1994.

21 (5) REPORT.—The amendment made by sub22 section (d) shall apply to reports for years beginning

23 with 1994.
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1 SEC. 5011. RELATIVE VALUES FOR PEDIATRIC SERVICES.

2 (a) IN GENERAL.—The Secretary of Health and

3 Human Services shall fully develop, by not later than July

4 1, 1994, relative values for the full range of pediatric phy5 sicians’ services which are consistent with the relative val6 ues developed for other physicians’ services under section

7 1848(c) of the Social Security Act. In developing such val8 ues, the Secretary shall conduct such refinements as may

9 be necessary to produce appropriate estimates for such rel10 ative values.

11 (b) STUDY.—

12 (1) IN GENERAL.—The Secretary shall conduct

13 a study of the relative values for pediatric and other

14 services to determine whether there are significant

15 variations in the resources used in providing similar

16 services to different populations. In conducting such

17 study, the Secretary shall consult with appropriate

18 organizations representing pediatricians and other

19 physicians and physical and occupational therapists.

20 (2) REPORT.—Not later than July 1, 1994, the

21 Secretary shall submit to Congress a report on the

22 study conducted under paragraph (1). Such report

23 shall include any appropriate recommendations re24 garding needed changes in coding or other payment

25 policies to ensure that payments for pediatric serv-
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1 ices appropriately reflect the resources required to

2 provide these services.

3 SEC. 5012. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

4 (a) IN GENERAL.—Section 1848(j)(3) (42 U.S.C.

5 1395w–4(j)(3)) is amended by inserting ‘‘(2)(G),’’ after

6 ‘‘(2)(D),’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to services furnished on or after

9 January 1, 1994.

10 SEC. 5013. ADMINISTRATION OF CLAIMS RELATING TO PHY11 SICIANS’ SERVICES.

12 (a) LIMITATION ON CARRIER USER FEES.—Section

13 1842(c) (42 U.S.C. 1395u(c)) is amended by adding at

14 the end the following new paragraph:

15 ‘‘(4) Neither a carrier nor the Secretary may impose

16 a fee under this title—

17 ‘‘(A) for the filing of claims related to physi18 cians’ services,

19 ‘‘(B) for an error in filing a claim relating to

20 physicians’ services or for such a claim which is de21 nied,

22 ‘‘(C) for any appeal under this title with respect

23 to physicians’ services,

24 ‘‘(D) for applying for (or obtaining) a unique

25 identifier under subsection (r), or
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1 ‘‘(E) for responding to inquiries respecting phy2 sicians’ services or for providing information with re3 spect to medical review of such services.’’.

4 (b) CLARIFICATION OF PERMISSIBLE SUBSTITUTE

5 BILLING ARRANGEMENTS.—

6 (1) IN GENERAL.—Clause (D) of section

7 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended to

8 read as follows: ‘‘(D) payment may be made to a

9 physician for physicians’ services (and services fur10 nished incident to such services) furnished by a sec11 ond physician to patients of the first physician if (i)

12 the first physician is unavailable to provide the serv13 ices; (ii) the services are furnished pursuant to an

14 arrangement between the two physicians that (I) is

15 informal and reciprocal, or (II) involves per diem or

16 other fee-for-time compensation for such services;

17 (iii) the services are not provided by the second phy18 sician over a continuous period of more than 60

19 days; and (iv) the claim form submitted to the car20 rier for such services includes the second physician’s

21 unique identifier (provided under the system estab22 lished under subsection (r)) and indicates that the

23 claim meets the requirements of this clause for pay24 ment to the first physician’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply to services furnished on

3 or after the first day of the first month beginning

4 more than 60 days after the date of the enactment

5 of this Act.

6 SEC. 5014. MISCELLANEOUS AND TECHNICAL CORREC7 TIONS.

8 (a) OVERVALUED PROCEDURES (SECTION 4101 OF

9 OBRA–1990).—(1) Section 1842(b)(16)(B)(iii) (42

10 U.S.C. 1395u(b)(16)(B)(iii)) is amended—

11 (A) by striking ‘‘, simple and subcutaneous’’,

12 (B) by striking ‘‘; small’’ and inserting ‘‘and

13 small’’,

14 (C) by striking ‘‘treatments;’’ the first place it

15 appears and inserting ‘‘and’’,

16 (D) by striking ‘‘lobectomy;’’,

17 (E) by striking ‘‘enterectomy; colectomy; chole18 cystectomy;’’,

19 (F) by striking ‘‘; transurerethral resection’’

20 and inserting ‘‘and resection’’, and

21 (G) by striking ‘‘sacral laminectomy;’’.

22 (2) Section 4101(b)(2) of OBRA–1990 is amended—

23 (A) in the matter before subparagraph (A), by

24 striking ‘‘1842(b)(16)’’ and inserting

25 ‘‘1842(b)(16)(B)’’, and
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1 (B) in subparagraph (B)—

2 (i) by striking ‘‘, simple and subcutane3 ous’’,

4 (ii) by striking ‘‘(HCPCS codes 19160 and

5 19162)’’ and inserting ‘‘(HCPCS code 19160)’’,

6 and

7 (iii) by striking all that follows ‘‘(HCPCS

8 codes 92250’’ and inserting ‘‘and 92260).’’.

9 (b) RADIOLOGY SERVICES (SECTION 4102 OF

10 OBRA–1990).—(1) Section 1834(b)(4) (42 U.S.C.

11 1395m(b)(4)) is amended by redesignating subparagraphs

12 (E) and (F) as subparagraphs (F) and (G), respectively.

13 (2) Section 1834(b)(4)(D) (42 U.S.C.

14 1395m(b)(4)(D)) is amended—

15 (A) in the matter before clause (i), by striking

16 ‘‘shall be determined as follows:’’ and inserting

17 ‘‘shall, subject to clause (vii), be reduced to the ad18 justed conversion factor for the locality determined

19 as follows:’’,

20 (B) in clause (iv), by striking ‘‘LOCAL ADJUST21 MENT.—Subject to clause (vii), the conversion factor

22 to be applied to’’ and inserting ‘‘ADJUSTED CONVER23 SION FACTOR.—The adjusted conversion factor for’’,

24 (C) in clause (vii), by striking ‘‘under this sub25 paragraph’’, and
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1 (D) in clause (vii), by inserting ‘‘reduced under

2 this subparagraph by’’ after ‘‘shall not be’’.

3 (3) Section 4102(c)(2) of OBRA–1990 is amended

4 by striking ‘‘radiology services’’ and all that follows and

5 inserting ‘‘nuclear medicine services’’.

6 (4) Section 4102(d) of OBRA–1990 is amended by

7 striking ‘‘new paragraph’’ and inserting ‘‘new subpara8 graph’’.

9 (5) Section 1834(b)(4)(E) (42 U.S.C.

10 1395m(b)(4)(E)) is amended by inserting ‘‘RULE FOR

11 CERTAIN SCANNING SERVICES.—’’ after ‘‘(E)’’.

12 (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w–

13 4(a)(2)(D)(iii)) is amended by striking ‘‘that are subject

14 to section 6105(b) of the Omnibus Budget Reconciliation

15 Act of 1989’’ and by striking ‘‘provided under such sec16 tion’’ and inserting ‘‘provided under section 6105(b) of the

17 Omnibus Budget Reconciliation Act of 1989’’.

18 (c) ANESTHESIA SERVICES (SECTION 4103 OF

19 OBRA–1990).—(1) Section 4103(a) of OBRA–1990 is

20 amended by striking ‘‘REDUCTION IN FEE SCHEDULE’’

21 and inserting ‘‘REDUCTION IN PREVAILING CHARGES’’.

22 (2) Section 1842(q)(1)(B) (42 U.S.C.

23 1395u(q)(1)(B)) is amended—

24 (A) in the matter before clause (i), by striking

25 ‘‘shall be determined as follows:’’ and inserting
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1 ‘‘shall, subject to clause (iv), be reduced to the ad2 justed prevailing charge conversion factor for the lo3 cality determined as follows:’’, and

4 (B) in clause (iii), by striking ‘‘Subject to

5 clause (iv), the prevailing charge conversion factor to

6 be applied in’’ and inserting ‘‘The adjusted prevail7 ing charge conversion factor for’’.

8 (d) ASSISTANTS AT SURGERY (SECTION 4107 OF

9 OBRA–1990).—(1) Section 4107(c) of OBRA–1990 is

10 amended by inserting ‘‘(a)(1)’’ after ‘‘subsection’’.

11 (2) Section 4107(a)(2) of OBRA–1990 is amended

12 by adding at the end the following: ‘‘In applying section

13 1848(g)(2)(D) of the Social Security Act for services of

14 an assistant-at-surgery furnished during 1991, the recog15 nized payment amount shall not exceed the maximum

16 amount specified under section 1848(i)(2)(A) of such Act

17 (as applied under this paragraph in such year).’’.

18 (e) TECHNICAL COMPONENTS OF DIAGNOSTIC SERV19 ICES (SECTION 4108 OF OBRA–1990).—Section 1842(b)

20 (42 U.S.C. 1395u(b)) is amended by redesignating para21 graph (18), as added by section 4108(a) of OBRA–1990,

22 as paragraph (17) and, in such paragraph, by inserting

23 ‘‘, tests specified in paragraph (14)(C)(i),’’ after ‘‘diag24 nostic laboratory tests’’.
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1 (f) STATEWIDE FEE SCHEDULES (SECTION 4117 OF

2 OBRA–1990).—Section 4117 of OBRA–1990 is amend3 ed—

4 (1) in subsection (a)—

5 (A) by striking ‘‘IN GENERAL.—’’, and

6 (B) by striking ‘‘, if the’’ and all that fol7 lows through ‘‘1991, ’’; and

8 (2) by striking subsections (b), (c), and (d).

9 (g) STUDY OF AGGREGATION RULE FOR CLAIMS OF

10 SIMILAR PHYSICIAN SERVICES (SECTION 4113 OF

11 OBRA–1990).—Section 4113 of OBRA–1990 is amend12 ed—

13 (1) by inserting ‘‘of the Social Security Act’’

14 after ‘‘1869(b)(2)’’; and

15 (2) by striking ‘‘December 31, 1992’’ and in16 serting ‘‘December 31, 1993’’.

17 (h) OTHER MISCELLANEOUS AND TECHNICAL

18 AMENDMENTS.—(1) The heading of section 1834(f) (42

19 U.S.C. 1395m(f)) is amended by striking ‘‘FISCAL YEAR’’.

20 (2)(A) Section 4105(b) of OBRA–1990 is amended—

21 (i) in paragraph (2), by striking ‘‘amendments’’

22 and inserting ‘‘amendment’’, and

23 (ii) in paragraph (3), by striking ‘‘amendments

24 made by paragraphs (1) and (2)’’ and inserting

25 ‘‘amendment made by paragraph (1)’’.
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1 (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w–

2 4(f)(2)(C)) is amended by inserting ‘‘PERFORMANCE

3 STANDARD RATES OF INCREASE FOR FISCAL YEAR

4 1991.—’’ after ‘‘(C)’’.

5 (C) Section 4105(d) of OBRA–1990 is amended by

6 inserting ‘‘PUBLICATION OF PERFORMANCE STANDARD

7 RATES.—’’ after ‘‘(d)’’.

8 (3) Section 1842(b)(4)(F) (42 U.S.C.

9 1395u(b)(4)(F)) is amended—

10 (A) in clause (i), by striking ‘‘prevailing

11 charge’’ the first place it appears and inserting

12 ‘‘customary charge’’; and

13 (B) in clause (ii)(III), by striking ‘‘second,

14 third, and fourth’’ and inserting ‘‘first, second, and

15 third’’.

16 (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C.

17 1395u(b)(4)(F)(ii)(I)) is amended by striking ‘‘respiratory

18 therapist,’’.

19 (5) Section 4106(c) of OBRA–1990 is amended by

20 inserting ‘‘of the Social Security Act’’ after

21 ‘‘1848(d)(1)(B)’’.

22 (6) Section 4114 of OBRA–1990 is amended by

23 striking ‘‘patients’’ the second place it appears.
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1 (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w–

2 4(e)(1)(C)) is amended by inserting ‘‘date of the’’ after

3 ‘‘since the’’.

4 (8) Section 4118(f)(1)(D) of OBRA–1990 is amend5 ed by striking ‘‘is amended’’.

6 (9) Section 4118(f)(1)(N)(ii) of OBRA–1990 is

7 amended by striking ‘‘subsection (f)(5)(A)’’ and inserting

8 ‘‘subsection (f)(5)(A))’’.

9 (10) Section 1845(e) (42 U.S.C. 1395w–1(e)) is

10 amended—

11 (A) by striking paragraph (2); and

12 (B) by redesignating paragraphs (3), (4), and

13 (5) as paragraphs (2), (3), and (4).

14 (11) Section 4118(j)(2) of OBRA–1990 is amended

15 by striking ‘‘In section’’ and inserting ‘‘Section’’.

16 (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w–

17 4(i)(3)) is amended by striking the space before the period

18 at the end.

19 (B) Section 1834(a)(10)(B) (42 U.S.C.

20 1395m(a)(10)(B)) is amended by striking ‘‘as such provi21 sions apply to physicians’ services and physicians and a

22 reasonable charge under section 1842(b)’’.

23 (i) OTHER CORRECTIONS.—(1) Effective on the date

24 of the enactment of this Act, section 6102(d)(4) of
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1 OBRA–1989 is amended by striking all that follows the

2 first sentence.

3 (2) Effective for payments for fiscal years beginning

4 with fiscal year 1994, section 1842(c)(1) (42 U.S.C.

5 1395u(c)(1)) is amended—

6 (A) in subparagraph (A), by striking ‘‘(A) Any

7 contract’’ and inserting ‘‘Any contract’’; and

8 (B) by striking subparagraph (B).

9 (j) EFFECTIVE DATE.—Except as provided in sub10 section (i), the amendments made by this section and the

11 provisions of this section shall take effect as if included

12 in the enactment of OBRA–1990.

13 Subchapter B—Outpatient Hospital Services

14 and Ambulatory Surgical Services

15 SEC. 5021. EXTENSION OF 10 PERCENT REDUCTION IN PAY16 MENTS FOR CAPITAL-RELATED COSTS OF

17 OUTPATIENT HOSPITAL SERVICES.

18 Section 1861(v)(1)(S)(ii)(I) (42 U.S.C.

19 1395x(v)(1)(S)(ii)(I)) is amended by striking ‘‘fiscal year

20 1992, 1993, 1994, or 1995’’ and inserting ‘‘fiscal years

21 1992 through 1998’’.
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1 SEC. 5022. EXTENSION OF CURRENT REDUCTION IN PAY2 MENTS FOR OTHER COSTS OF OUTPATIENT

3 HOSPITAL SERVICES.

4 Section 1861(v)(1)(S)(ii)(II) (42 U.S.C.

5 1395x(v)(1)(S)(ii)(II)) is amended by striking ‘‘1991’’ and

6 all that follows and inserting ‘‘1991 through 1998’’.

7 SEC. 5023. 1-YEAR FREEZE IN AMBULATORY SURGERY

8 RATES.

9 The Secretary of Health and Human Services shall

10 not provide for any update in the amounts of payment

11 described in paragraphs (2)(A) and (2)(B) of section

12 1833(i)(2) of the Social Security Act that otherwise would

13 occur in fiscal year 1994.

14 SEC. 5024. EYE OR EYE AND EAR HOSPITALS.

15 (a) IN GENERAL.—Section 1833(i) (42 U.S.C.

16 1395l(i)) is amended—

17 (1) in paragraph (3)(B)(ii)—

18 (A) by striking ‘‘the last sentence of this

19 clause’’ and inserting ‘‘paragraph (4)’’, and

20 (B) by striking the last sentence; and

21 (2) by inserting after paragraph (3) the follow22 ing new paragraph:

23 ‘‘(4)(A) In the case of a hospital that—

24 ‘‘(i) makes application to the Secretary and

25 demonstrates that it specializes in eye services or eye

26 and ear services (as determined by the Secretary),
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1 ‘‘(ii) receives more than 30 percent of its total

2 revenues from outpatient services, and

3 ‘‘(iii) on October 1, 1987—

4 ‘‘(I) was an eye specialty hospital or an eye

5 and ear specialty hospital, or

6 ‘‘(II) was operated as an eye or eye and

7 ear unit (as defined in subparagraph (B)) of a

8 general acute care hospital which, on the date

9 of the application described in clause (i), oper10 ates less than 20 percent of the beds that the

11 hospital operated on October 1, 1987, and has

12 sold or otherwise disposed of a substantial por13 tion of the hospital’s other acute care oper14 ations,

15 the cost proportion and ASC proportion in effect under

16 subclauses (I) and (II) of paragraph (3)(B)(ii) for cost

17 reporting periods beginning in fiscal year 1988 shall re18 main in effect for cost reporting periods beginning on or

19 after October 1, 1988, and before January 1, 1995.

20 ‘‘(B) For purposes of this subparagraph (A)(iii)(II),

21 the term ‘eye or eye and ear unit’ means a physically sepa22 rate or distinct unit containing separate surgical suites de23 voted solely to eye or eye and ear services.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall apply to portions of cost reporting pe3 riods beginning on or after January 1, 1994.

4 SEC. 5025. EXTENSION OF CAP ON PAYMENTS FOR INTRA5 OCULAR LENSES.

6 (a) IN GENERAL.—Section 4151(c)(3) of OBRA–

7 1990 is amended by striking ‘‘December 31, 1992’’ and

8 inserting ‘‘December 31, 1994’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 subsection (a) shall be effective as if included in the enact11 ment of OBRA–1990.

12 SEC. 5026. MISCELLANEOUS AND TECHNICAL CORREC13 TIONS.

14 (a) PAYMENT AMOUNTS FOR SERVICES FURNISHED

15 IN AMBULATORY SURGICAL CENTERS.—(1)(A) Section

16 1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i)) is amended

17 by striking the comma at the end and inserting the follow18 ing: ‘‘, as determined in accordance with a survey (based

19 upon a representative sample of procedures and facilities)

20 taken not later than January 1, 1995, and every 5 years

21 thereafter, of the actual audited costs incurred by such

22 centers in providing such services,’’.

23 (B) Section 1833(i)(2) (42 U.S.C. 1395l(i)(2)) is

24 amended—
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1 (i) in the second sentence of subparagraph (A)

2 and the second sentence of subparagraph (B), by

3 striking ‘‘and may be adjusted by the Secretary,

4 when appropriate,’’; and

5 (ii) by adding at the end the following new sub6 paragraph:

7 ‘‘(C) Notwithstanding the second sentence of sub8 paragraph (A) or the second sentence of subparagraph

9 (B), if the Secretary has not updated amounts established

10 under such subparagraphs with respect to facility services

11 furnished during a fiscal year (beginning with fiscal year

12 1996), such amounts shall be increased by the percentage

13 increase in the consumer price index for all urban consum14 ers (U.S. city average) as estimated by the Secretary for

15 the 12-month period ending with the midpoint of the fiscal

16 year involved.’’.

17 (C) The second sentence of section 1833(i)(1) (42

18 U.S.C. 1395l(i)(1)) is amended by striking the period and

19 inserting the following: ‘‘, in consultation with appropriate

20 trade and professional organizations.’’.

21 (2) Section 4151(c)(3) of OBRA–1990 is amended

22 by striking ‘‘for the insertion of an intraocular lens’’ and

23 inserting ‘‘for an intraocular lens inserted’’.

24 (b) ADJUSTMENTS TO PAYMENT AMOUNTS FOR NEW

25 TECHNOLOGY INTRAOCULAR LENSES.—(1) Not later
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1 than 1 year after the date of the enactment of this Act,

2 the Secretary of Health and Human Services (in this sub3 section referred to as the ‘‘Secretary’’) shall develop and

4 implement a process under which interested parties may

5 request review by the Secretary of the appropriateness of

6 the reimbursement amount provided under section

7 1833(i)(2)(A)(iii) of the Social Security Act with respect

8 to a class of new technology intraocular lenses. For pur9 poses of the preceding sentence, an intraocular lens may

10 not be treated as a new technology lens unless it has been

11 approved by the Food and Drug Administration.

12 (2) In determining whether to provide an adjustment

13 of payment with respect to a particular lens under para14 graph (1), the Secretary shall take into account whether

15 use of the lens is likely to result in reduced risk of

16 intraoperative or postoperative complication or trauma,

17 accelerated postoperative recovery, reduced induced astig18 matism, improved postoperative visual acuity, more stable

19 postoperative vision, or other comparable clinical advan20 tages.

21 (3) The Secretary shall publish notice in the Federal

22 Register from time to time (but no less often than once

23 each year) of a list of the requests that the Secretary has

24 received for review under this subsection, and shall provide

25 for a 30-day comment period on the lenses that are the
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1 subjects of the requests contained in such notice. The Sec2 retary shall publish a notice of his determinations with

3 respect to intraocular lenses listed in the notice within 90

4 days after the close of the comment period.

5 (4) Any adjustment of a payment amount (or pay6 ment limit) made under this subsection shall become effec7 tive not later than 30 days after the date on which the

8 notice with respect to the adjustment is published under

9 paragraph (3).

10 (c) BLEND AMOUNTS FOR AMBULATORY SURGICAL

11 CENTER PAYMENTS.—

12 (1) IN GENERAL.—Subclauses (I) and (II) of

13 section 1833(i)(3)(B)(ii) (42 U.S.C.

14 1395l(i)(3)(B)(ii)) are each amended—

15 (A) by striking ‘‘for reporting’’ and insert16 ing ‘‘for portions of cost reporting’’; and

17 (B) by striking ‘‘and on or before’’ and in18 serting ‘‘and ending on or before’’.

19 (2) EFFECTIVE DATE.—The amendments made

20 by paragraph (1) shall take effect as if included in

21 the enactment of OBRA–1990.
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1 Subchapter C—Durable Medical Equipment

2 SEC. 5031. REVISIONS TO PAYMENT RULES FOR DURABLE

3 MEDICAL EQUIPMENT.

4 (a) BASING NATIONAL PAYMENT LIMITS ON MEDIAN

5 OF LOCAL PAYMENT AMOUNTS.—

6 (1) INEXPENSIVE AND ROUTINELY PURCHASED

7 ITEMS; ITEMS REQUIRING FREQUENT AND SUBSTAN8 TIAL SERVICING.—(A) Paragraphs (2)(C)(i)(II) and

9 (3)(C)(i)(II) of section 1834(a) (42 U.S.C.

10 1395m(a)) are each amended—

11 (i) by striking ‘‘1992’’ the first place it ap12 pears and inserting ‘‘1992, 1993, and 1994’’;

13 and

14 (ii) by striking ‘‘1992’’ the second place it

15 appears and inserting ‘‘the year’’.

16 (B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of sec17 tion 1834(a) (42 U.S.C. 1395m(a)) are each amend18 ed—

19 (i) by striking ‘‘and’’ at the end of

20 subclause (I);

21 (ii) by redesignating subclause (II) as (IV);

22 and

23 (iii) by inserting after subclause (I) the fol24 lowing new subclauses:
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1 ‘‘(II) for 1992 and 1993, the

2 amount determined under this clause

3 for the preceding year increased by

4 the covered item update for such sub5 sequent year,

6 ‘‘(III) for 1994, the local pay7 ment amount determined under clause

8 (i) for such item or device for that

9 year, except that the national limited

10 payment amount may not exceed 100

11 percent of the median of all local pay12 ment amounts determined under such

13 clause for such item for that year and

14 may not be less than 85 percent of

15 the median of all local payment

16 amounts determined under such

17 clause for such item or device for that

18 year, and’’.

19 (2) MISCELLANEOUS DEVICES AND ITEMS.—

20 Section 1834(a)(8) (42 U.S.C. 1395m(a)(8)) is

21 amended—

22 (A) in subparagraph (A)(ii)(III), by strik23 ing ‘‘1992’’ and inserting ‘‘1992, 1993, and

24 1994’’; and

25 (B) in subparagraph (B)—
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1 (i) by striking ‘‘and’’ at the end of

2 clause (i),

3 (ii) by redesignating clause (ii) as (iv),

4 and

5 (iii) by inserting after clause (i) the

6 following new clauses:

7 ‘‘(ii) for 1992 and 1993, the amount

8 determined under this subparagraph for

9 the preceding year increased by the cov10 ered item update for such subsequent year;

11 ‘‘(iii) for 1994, the local purchase

12 price computed under subparagraph (A)(ii)

13 for the item for the year, except that such

14 national limited purchase price may not ex15 ceed 100 percent of the median of all local

16 purchase prices computed for the item

17 under such subparagraph for the year and

18 may not be less than 85 percent of the me19 dian of all local purchase prices computed

20 under such subparagraph for the item for

21 the year; and’’.

22 (3) OXYGEN AND OXYGEN EQUIPMENT.—Sec23 tion 1834(a)(9) (42 U.S.C. 1395m(a)(9)) is amend24 ed—
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1 (A) in subparagraph (A)(ii)(II), by striking

2 ‘‘1991 and 1992’’ and inserting ‘‘1991, 1992,

3 1993, and 1994’’; and

4 (B) in subparagraph (B)—

5 (i) by striking ‘‘and’’ at the end of

6 clause (i),

7 (ii) by redesignating clause (ii) as (iv),

8 and

9 (iii) by inserting after clause (i) the

10 following new clauses:

11 ‘‘(ii) for 1992 and 1993, the amount

12 determined under this subparagraph for

13 the preceding year increased by the cov14 ered item update for such subsequent year;

15 ‘‘(iii) for 1994, the local monthly pay16 ment rate computed under subparagraph

17 (A)(ii) for the item for the year, except

18 that such national limited monthly pay19 ment rate may not exceed 100 percent of

20 the median of all local monthly payment

21 rates computed for the item under such

22 subparagraph for the year and may not be

23 less than 85 percent of the median of all

24 local monthly payment rates computed for
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1 the item under such subparagraph for the

2 year; and’’.

3 (b) PAYMENT FOR PROSTHETIC DEVICES AND

4 ORTHOTICS AND PROSTHETICS.—

5 (1) IN GENERAL.—Section 1834(h)(2) (42

6 U.S.C. 1395m(h)(2)) is amended—

7 (A) in subparagraph (A)(ii)(II), by striking

8 ‘‘1992 or 1993’’ and inserting ‘‘1992, 1993, or

9 1994’’;

10 (B) in subparagraph (B)(ii), by striking

11 ‘‘each subsequent year’’ and inserting ‘‘1993’’;

12 (C) in subparagraph (C)(iv), by striking

13 ‘‘regional purchase price computed under sub14 paragraph (B)’’ and inserting ‘‘national limited

15 purchase price computed under subparagraph

16 (E)’’;

17 (D) in subparagraph (D)(ii), by striking ‘‘a

18 subsequent year’’ and inserting ‘‘1993’’; and

19 (E) by adding at the end the following new

20 subparagraph:

21 ‘‘(E) COMPUTATION OF NATIONAL LIM22 ITED PURCHASE PRICE.—With respect to the

23 furnishing of a particular item in a year, the

24 Secretary shall compute a national limited pur25 chase price—
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1 ‘‘(i) for 1994, equal to the local pur2 chase price computed under subparagraph

3 (A)(ii)(II) for the item for the year, except

4 that such national limited purchase price

5 may not exceed 100 percent of the median

6 of all local purchase prices for the item

7 computed under such subparagraph for the

8 year, and may not be less than 85 percent

9 of the median of all local purchase prices

10 for the item computed under such subpara11 graph for the year; and

12 ‘‘(ii) for each subsequent year, equal

13 to the amount determined under this sub14 paragraph for the preceding year increased

15 by the applicable percentage increase for

16 such subsequent year.’’.

17 (2) EXCEPTION FOR CERTAIN ITEMS.—Section

18 1834(h) (42 U.S.C. 1395m(h)), as amended by

19 paragraph (1), is further amended—

20 (A) in paragraph (1)(B), by striking ‘‘sub21 paragraph (C),’’ and inserting ‘‘subparagraphs

22 (C) and (F),’’; and

23 (B) by adding at the end of paragraph (2)

24 the following new subparagraph:
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1 ‘‘(F) EXCEPTION FOR CERTAIN ITEMS.—

2 Payment for ostomy supplies, tracheostomy

3 supplies, and urologicals shall be made in ac4 cordance with subparagraphs (B) and (C) of

5 section 1834(a)(2).’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to items furnished on or after Jan8 uary 1, 1994.

9 SEC. 5032. PAYMENT FOR PARENTERAL AND ENTERAL NU10 TRIENTS, SUPPLIES, AND EQUIPMENT DUR11 ING 1994.

12 In determining the amount of payment under part

13 B of title XVIII of the Social Security Act during 1994,

14 the charges determined to be reasonable with respect to

15 parenteral and enteral nutrients, supplies, and equipment

16 may not exceed the charges determined to be reasonable

17 with respect to such nutrients, supplies, and equipment

18 during 1993.

19 SEC. 5033. TREATMENT OF NEBULIZERS AND ASPIRATORS.

20 (a) IN GENERAL.—Section 1834(a)(3)(A) (42 U.S.C.

21 1395m(a)(3)(A)) is amended by striking ‘‘ventilators, as22 pirators, IPPB machines, and nebulizers’’ and inserting

23 ‘‘ventilators and IPPB machines’’.
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1 (b) PAYMENT FOR ACCESSORIES RELATING TO

2 NEBULIZERS AND ASPIRATORS.—Section 1834(a)(2)(A)

3 (42 U.S.C. 1395m(a)) is amended—

4 (1) by striking ‘‘or’’ at the end of clause (i),

5 (2) by adding ‘‘or’’ at the end of clause (ii), and

6 (3) by inserting after clause (ii) the following

7 new clause:

8 ‘‘(iii) which is an accessory used in

9 conjunction with a nebulizer or aspirator,’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to items furnished on or after Jan12 uary 1, 1994.

13 SEC. 5034. CERTIFICATION OF SUPPLIERS.

14 (a) REQUIREMENTS.—

15 (1) IN GENERAL.—Section 1834 (42 U.S.C.

16 1395m) is amended by adding at the end the follow17 ing new subsection:

18 ‘‘(i) REQUIREMENTS FOR SUPPLIERS OF MEDICAL

19 EQUIPMENT AND SUPPLIES.—

20 ‘‘(1) ISSUANCE AND RENEWAL OF SUPPLIER

21 NUMBER.—

22 ‘‘(A) PAYMENT.—Except as provided in

23 subparagraph (C), no payment may be made

24 under this part after October 1, 1994, for items

25 furnished by a supplier of medical equipment
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1 and supplies unless such supplier obtains (and

2 renews at such intervals as the Secretary may

3 require) a supplier number.

4 ‘‘(B) STANDARDS FOR POSSESSING A SUP5 PLIER NUMBER.—A supplier may not obtain a

6 supplier number unless—

7 ‘‘(i) for medical equipment and sup8 plies furnished on or after October 1,

9 1994, and before January 1, 1996, the

10 supplier meets standards prescribed by the

11 Secretary; and

12 ‘‘(ii) for medical equipment and sup13 plies furnished on or after January 1,

14 1996, the supplier meets revised standards

15 prescribed by the Secretary (in consulta16 tion with representatives of suppliers of

17 medical equipment and supplies, carriers,

18 and consumers) that shall include require19 ments that the supplier—

20 ‘‘(I) comply with all applicable

21 State and Federal licensure and regu22 latory requirements;

23 ‘‘(II) maintain a physical facility

24 on an appropriate site;
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1 ‘‘(III) have proof of appropriate

2 liability insurance; and

3 ‘‘(IV) meet such other require4 ments as the Secretary may specify.

5 ‘‘(C) EXCEPTION FOR ITEMS FURNISHED

6 AS INCIDENT TO A PHYSICIAN’S SERVICE.—

7 Subparagraph (A) shall not apply with respect

8 to medical equipment and supplies furnished as

9 an incident to a physician’s service.

10 ‘‘(D) PROHIBITION AGAINST MULTIPLE

11 SUPPLIER NUMBERS.—The Secretary may not

12 issue more than one supplier number to any

13 supplier of medical equipment and supplies un14 less the issuance of more than one number is

15 appropriate to identify subsidiary or regional

16 entities under the supplier’s ownership or con17 trol.

18 ‘‘(E) PROHIBITION AGAINST DELEGATION

19 OF SUPPLIER DETERMINATIONS.—The Sec20 retary may not delegate (other than by contract

21 under section 1842) the responsibility to deter22 mine whether suppliers meet the standards nec23 essary to obtain a supplier number.

24 ‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—
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1 ‘‘(A) STANDARDIZED CERTIFICATES.—Not

2 later than October 1, 1994, the Secretary shall,

3 in consultation with carriers under this part,

4 develop one or more standardized certificates of

5 medical necessity (as defined in subparagraph

6 (C)) for medical equipment and supplies for

7 which the Secretary determines that such a cer8 tificate is necessary.

9 ‘‘(B) PROHIBITION AGAINST DISTRIBUTION

10 BY SUPPLIERS OF CERTIFICATES OF MEDICAL

11 NECESSITY.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), a supplier of medical

14 equipment and supplies may not distribute

15 to physicians or to individuals entitled to

16 benefits under this part for commercial

17 purposes any completed or partially com18 pleted certificates of medical necessity on

19 or after October 1, 1994.

20 ‘‘(ii) EXCEPTION FOR CERTAIN BILL21 ING INFORMATION.—Clause (i) shall not

22 apply with respect to a certificate of medi23 cal necessity for any item that is not con24 tained on the list of potentially overused

25 items developed by the Secretary under
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1 subsection (a)(15)(A) to the extent that

2 such certificate contains only information

3 completed by the supplier of medical equip4 ment and supplies identifying such supplier

5 and the beneficiary to whom such medical

6 equipment and supplies are furnished, a

7 description of such medical equipment and

8 supplies, any product code identifying such

9 medical equipment and supplies, and any

10 other administrative information (other

11 than information relating to the bene12 ficiary’s medical condition) identified by

13 the Secretary. In the event a supplier pro14 vides a certificate of medical necessity con15 taining information permitted under this

16 clause, such certificate shall also contain

17 the fee schedule amount and the supplier’s

18 charge for the medical equipment or sup19 plies being furnished prior to distribution

20 of such certificate to the physician.

21 ‘‘(iii) PENALTY.—Any supplier of

22 medical equipment and supplies who know23 ingly and willfully distributes a certificate

24 of medical necessity in violation of clause

25 (i) is subject to a civil money penalty in an
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1 amount not to exceed $1,000 for each such

2 certificate of medical necessity so distrib3 uted. The provisions of section 1128A

4 (other than subsections (a) and (b)) shall

5 apply to civil money penalties under this

6 subparagraph in the same manner as they

7 apply to a penalty or proceeding under sec8 tion 1128A(a).

9 ‘‘(C) DEFINITION.—For purposes of this

10 paragraph, the term ‘certificate of medical ne11 cessity’ means a form or other document con12 taining information required by the Secretary to

13 be submitted to show that a covered item is

14 reasonable and necessary for the diagnosis or

15 treatment of illness or injury or to improve the

16 functioning of a malformed body member.

17 ‘‘(3) COVERAGE AND REVIEW CRITERIA.—

18 ‘‘(A) DEVELOPMENT AND ESTABLISH19 MENT.—Not later than January 1, 1996, the

20 Secretary, in consultation with representatives

21 of suppliers of medical equipment and supplies,

22 individuals enrolled under this part, and appro23 priate medical specialty societies, shall develop

24 and establish uniform national coverage and

25 utilization review criteria for 200 items of medi-
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1 cal equipment and supplies selected in accord2 ance with the standards described in subpara3 graph (B). The Secretary shall publish the cri4 teria as part of the instructions provided to fis5 cal intermediaries and carriers under this part

6 and no further publication, including publica7 tion in the Federal Register, shall be required.

8 ‘‘(B) STANDARDS FOR SELECTING ITEMS

9 SUBJECT TO CRITERIA.—The Secretary may se10 lect an item for coverage under the criteria de11 veloped and established under subparagraph

12 (A) if the Secretary finds that—

13 ‘‘(i) the item is frequently purchased

14 or rented by beneficiaries;

15 ‘‘(ii) the item is frequently subject to

16 a determination that such item is not

17 medically necessary; or

18 ‘‘(iii) the coverage or utilization cri19 teria applied to the item (as of the date of

20 the enactment of this subsection) is not

21 consistent among carriers.

22 ‘‘(C) ANNUAL REVIEW AND EXPANSION OF

23 ITEMS SUBJECT TO CRITERIA.—The Secretary

24 shall annually review the coverage and utiliza25 tion of items of medical equipment and supplies
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1 to determine whether items not included among

2 the items selected under subparagraph (A)

3 should be made subject to uniform national cov4 erage and utilization review criteria, and, if ap5 propriate, shall develop and apply such criteria

6 to such additional items.

7 ‘‘(4) DEFINITION.—The term ‘medical equip8 ment and supplies’ means—

9 ‘‘(A) durable medical equipment (as de10 fined in section 1861(n));

11 ‘‘(B) prosthetic devices (as described in

12 section 1861(s)(8));

13 ‘‘(C) orthotics and prosthetics (as de14 scribed in section 1861(s)(9));

15 ‘‘(D) surgical dressings (as described in

16 section 1861(s)(5));

17 ‘‘(E) such other items as the Secretary

18 may determine; and

19 ‘‘(F) for purposes of paragraphs (1) and

20 (3)—

21 ‘‘(i) home dialysis supplies and equip22 ment (as described in section

23 1861(s)(2)(F)), and

24 ‘‘(ii) immunosuppressive drugs (as de25 scribed in section 1861(s)(2)(J)).’’.
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1 (2) CONFORMING AMENDMENT.—Effective Oc2 tober 1, 1994, paragraph (16) of section 1834(a)

3 (42 U.S.C. 1395m(a)) is repealed.

4 (b) REPORT ON EFFECT OF UNIFORM CRITERIA ON

5 UTILIZATION OF ITEMS.—Not later than July 1, 1996, the

6 Secretary shall submit a report to the Committee on Ways

7 and Means and the Committee on Energy and Commerce

8 of the House of Representatives and the Committee on

9 Finance of the Senate analyzing the impact of the uniform

10 criteria established under section 1834(i)(3)(A) of the So11 cial Security Act (as added by subsection (a)) on the utili12 zation of items of medical equipment and supplies by indi13 viduals enrolled under part B of the medicare program.

14 (c) USE OF COVERED ITEMS BY DISABLED BENE15 FICIARIES.—

16 (1) IN GENERAL.—The Secretary of Health and

17 Human Services, in consultation with representa18 tives of suppliers of durable medical equipment

19 under part B of the medicare program and individ20 uals entitled to benefits under such program on the

21 basis of disability, shall conduct a study of the ef22 fects of the methodology for determining payments

23 for items of such equipment under such part on the

24 ability of such individuals to obtain items of such

25 equipment, including customized items.
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1 (2) REPORT.—Not later than one year after the

2 date of the enactment of this Act, the Secretary

3 shall submit a report to Congress on the study con4 ducted under paragraph (1), and shall include in the

5 report such recommendations as the Secretary con6 siders appropriate to assure that disabled medicare

7 beneficiaries have access to items of durable medical

8 equipment.

9 (d) CRITERIA FOR TREATMENT OF ITEMS AS PROS10 THETICS DEVICES OR ORTHOTICS AND PROSTHETICS.—

11 Not later than one year after the date of the enactment

12 of this Act, the Secretary of Health and Human Services

13 shall submit a report to the Committees on Ways and

14 Means and Energy and Commerce of the House of Rep15 resentatives and the Committee on Finance of the Senate

16 describing prosthetic devices or orthotics and prosthetics

17 covered under part B of the medicare program that do

18 not require individualized or custom fitting and adjust19 ment to be used by a patient. Such report shall include

20 recommendations for an appropriate methodology for de21 termining the amount of payment for such items under

22 such program.
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1 SEC. 5035. PROHIBITION AGAINST CARRIER FORUM SHOP2 PING.

3 (a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.

4 1395m(a)(12)) is amended to read as follows:

5 ‘‘(12) USE OF CARRIERS TO PROCESS

6 CLAIMS.—

7 ‘‘(A) DESIGNATION OF REGIONAL CAR8 RIERS.—The Secretary may designate, by regu9 lation under section 1842, one carrier for one

10 or more entire regions to process all claims

11 within the region for covered items under this

12 section.

13 ‘‘(B) PROHIBITION AGAINST CARRIER

14 SHOPPING.—(i) No supplier of a covered item

15 may present or cause to be presented a claim

16 for payment under this part unless such claim

17 is presented to the appropriate regional carrier

18 (as designated by the Secretary).

19 ‘‘(ii) For purposes of clause (i), the term

20 ‘appropriate regional carrier’ means the carrier

21 having jurisdiction over the geographic area

22 that includes the permanent residence of the

23 patient to whom the item is furnished.’’.

24 (b) EFFECTIVE DATE.—The amendment made by

25 subsection (a) shall apply to items furnished on or after

26 October 1, 1993.
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1 (c) CLARIFICATION OF AUTHORITY TO DESIGNATE

2 CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing

3 in this subsection or the amendment made by this sub4 section may be construed to restrict the authority of the

5 Secretary of Health and Human Services to designate re6 gional carriers or modify claims jurisdiction rules with re7 spect to items or services under part B of the medicare

8 program that are not covered items under section 1834(a)

9 of the Social Security Act or prosthetic devices or orthotics

10 and prosthetics under section 1834(h) of such Act.

11 SEC. 5036. RESTRICTIONS ON CERTAIN MARKETING AND

12 SALES ACTIVITIES.

13 (a) PROHIBITING UNSOLICITED TELEPHONE CON14 TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP15 MENT TO MEDICARE BENEFICIARIES.—

16 (1) IN GENERAL.—Section 1834(a) (42 U.S.C.

17 1395m(a)) is amended by adding at the end the fol18 lowing new paragraph:

19 ‘‘(17) PROHIBITION AGAINST UNSOLICITED

20 TELEPHONE CONTACTS BY SUPPLIERS.—

21 ‘‘(A) IN GENERAL.—A supplier of a cov22 ered item under this subsection may not contact

23 an individual enrolled under this part by tele24 phone regarding the furnishing of a covered

25 item to the individual (other than a covered
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1 item the supplier has already furnished to the

2 individual) unless—

3 ‘‘(i) the individual gives permission to

4 the supplier to make contact by telephone

5 for such purpose; or

6 ‘‘(ii) the supplier has furnished a cov7 ered item under this subsection to the indi8 vidual during the 15-month period preced9 ing the date on which the supplier contacts

10 the individual for such purpose.

11 ‘‘(B) PROHIBITING PAYMENT FOR ITEMS

12 FURNISHED SUBSEQUENT TO UNSOLICITED

13 CONTACTS.—If a supplier knowingly contacts

14 an individual in violation of subparagraph (A),

15 no payment may be made under this part for

16 any item subsequently furnished to the individ17 ual by the supplier.

18 ‘‘(C) EXCLUSION FROM PROGRAM FOR

19 SUPPLIERS ENGAGING IN PATTERN OF UNSO20 LICITED CONTACTS.—If a supplier knowingly

21 contacts individuals in violation of subpara22 graph (A) to such an extent that the supplier’s

23 conduct establishes a pattern of contacts in vio24 lation of such subparagraph, the Secretary shall

25 exclude the supplier from participation in the
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1 programs under this Act, in accordance with

2 the procedures set forth in subsections (c), (f),

3 and (g) of section 1128.’’.

4 (2) REQUIRING REFUND OF AMOUNTS COL5 LECTED FOR DISALLOWED ITEMS.—Section 1834(a)

6 (42 U.S.C. 1395m(a)), as amended by paragraph

7 (1), is amended by adding at the end the following

8 new paragraph:

9 ‘‘(18) REFUND OF AMOUNTS COLLECTED FOR

10 CERTAIN DISALLOWED ITEMS.—

11 ‘‘(A) IN GENERAL.—If a nonparticipating

12 supplier furnishes to an individual enrolled

13 under this part a covered item for which no

14 payment may be made under this part by rea15 son of paragraph (17)(B), the supplier shall re16 fund on a timely basis to the patient (and shall

17 be liable to the patient for) any amounts col18 lected from the patient for the item, unless—

19 ‘‘(i) the supplier establishes that the

20 supplier did not know and could not rea21 sonably have been expected to know that

22 payment may not be made for the item by

23 reason of paragraph (17)(B), or

24 ‘‘(ii) before the item was furnished,

25 the patient was informed that payment
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1 under this part may not be made for that

2 item and the patient has agreed to pay for

3 that item.

4 ‘‘(B) SANCTIONS.—If a supplier knowingly

5 and willfully fails to make refunds in violation

6 of subparagraph (A), the Secretary may apply

7 sanctions against the supplier in accordance

8 with section 1842(j)(2).

9 ‘‘(C) NOTICE.—Each carrier with a con10 tract in effect under this part with respect to

11 suppliers of covered items shall send any notice

12 of denial of payment for covered items by rea13 son of paragraph (17)(B) and for which pay14 ment is not requested on an assignment-related

15 basis to the supplier and the patient involved.

16 ‘‘(D) TIMELY BASIS DEFINED.—A refund

17 under subparagraph (A) is considered to be on

18 a timely basis only if—

19 ‘‘(i) in the case of a supplier who does

20 not request reconsideration or seek appeal

21 on a timely basis, the refund is made with22 in 30 days after the date the supplier re23 ceives a denial notice under subparagraph

24 (C), or
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1 ‘‘(ii) in the case in which such a re2 consideration or appeal is taken, the re3 fund is made within 15 days after the date

4 the supplier receives notice of an adverse

5 determination on reconsideration or ap6 peal.’’.

7 (b) CONFORMING AMENDMENT.—Section 1834(h)(3)

8 (42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para9 graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 subsections (a) and (b) shall apply to items furnished after

12 the expiration of the 60-day period that begins on the date

13 of the enactment of this Act.

14 SEC. 5037. KICKBACK CLARIFICATION.

15 (a) IN GENERAL.—Section 1128B(b)(3)(B) (42

16 U.S.C. 1320a–7b(b)(3)(B)) is amended by inserting be17 fore the semicolon the following: ‘‘(except that in the case

18 of a contract supply arrangement between any entity and

19 a supplier of medical supplies and equipment (as defined

20 in section 1834(i)(4), but not including items described

21 in subparagraph (F) of such section), such employment

22 shall not be considered bona fide to the extent that it in23 cludes tasks of a clerical and cataloging nature in trans24 mitting to suppliers assignment rights of individuals eligi-
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1 ble for benefits under part B of title XVIII, or perform2 ance of warehousing or stock inventory functions)’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply with respect to services fur5 nished on or after the first day of the first month that

6 begins after the expiration of the 60-day period beginning

7 on the date of the enactment of this Act.

8 SEC. 5038. BENEFICIARY LIABILITY FOR NONCOVERED

9 SERVICES.

10 (a) UNASSIGNED CLAIMS.—

11 (1) IN GENERAL.—Section 1834(i) (42 U.S.C.

12 1395m(i)), as added by section 5034(a)(1), is

13 amended—

14 (A) by redesignating paragraph (4) as

15 paragraph (5), and

16 (B) by inserting after paragraph (3) the

17 following new paragraph:

18 ‘‘(4) LIMITATION ON PATIENT LIABILITY.—If a

19 supplier of medical equipment and supplies (as de20 fined in paragraph (5))—

21 ‘‘(A) furnishes an item or service to a ben22 eficiary for which no payment may be made by

23 reason of paragraph (1);
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1 ‘‘(B) furnishes an item or service to a ben2 eficiary for which payment is denied in advance

3 under subsection (a)(15); or

4 ‘‘(C) furnishes an item or service to a ben5 eficiary for which payment is denied under sec6 tion 1862(a)(1);

7 any expenses incurred for items and services fur8 nished to an individual by such a supplier not on an

9 assigned basis shall be the responsibility of such

10 supplier. The individual shall have no financial re11 sponsibility for such expenses and the supplier shall

12 refund on a timely basis to the individual (and shall

13 be liable to the individual for) any amounts collected

14 from the individual for such items or services. The

15 provisions of subsection (a)(18) shall apply to re16 funds required under the previous sentence in the

17 same manner as such provisions apply to refunds

18 under such subsection.’’.

19 (2) CONFORMING AMENDMENT.—Section

20 1128B(b)(3)(B) (42 U.S.C. 1320a–7b(b)(3)(B)), as

21 amended by section 5037(a), is amended by striking

22 ‘‘1834(i)(4)’’ and inserting ‘‘1834(i)(5)’’.

23 (b) ASSIGNED CLAIMS.—Section 1879 (42 U.S.C.

24 1395pp) is amended by adding at the end the following

25 new subsection:
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1 ‘‘(h) If a supplier of medical equipment and supplies

2 (as defined in section 1834(i)(4))—

3 ‘‘(1) furnishes an item or service to a bene4 ficiary for which no payment may be made by reason

5 of section 1834(i)(1); or

6 ‘‘(2) furnishes an item or service to a bene7 ficiary for which payment is denied in advance under

8 section 1834(a)(15);

9 any expenses incurred for items and services furnished to

10 an individual by such a supplier on an assignment-related

11 basis shall be the responsibility of such supplier. The indi12 vidual shall have no financial responsibility for such ex13 penses and the supplier shall refund on a timely basis to

14 the individual (and shall be liable to the individual for)

15 any amounts collected from the individual for such items

16 or services. The provisions of section 1834(a)(18) shall

17 apply to refunds required under the previous sentence in

18 the same manner as such provisions apply to refunds

19 under such section.’’.

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to items or services furnished on

22 or after October 1, 1994.
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1 SEC. 5039. ADJUSTMENTS FOR INHERENT REASONABLE2 NESS.

3 (a) ADJUSTMENTS MADE TO FINAL PAYMENT

4 AMOUNTS.—

5 (1) IN GENERAL.—Section 1834(a)(10)(B) (42

6 U.S.C. 1395m(a)(10)(B)) is amended by adding at

7 the end the following: ‘‘In applying such provisions

8 to payments for an item under this subsection, the

9 Secretary shall make adjustments to the payment

10 basis for the item described in paragraph (1)(B) if

11 the Secretary determines (in accordance with such

12 provisions and on the basis of prices and costs appli13 cable at the time the item is furnished) that such

14 payment basis is not inherently reasonable.’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) shall take effect on the date of the

17 enactment of this Act.

18 (b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—

19 (1) IN GENERAL.—In accordance with section

20 1834(a)(10)(B) of the Social Security Act (as

21 amended by subsection (a)), the Secretary of Health

22 and Human Services shall determine whether the

23 payment amounts for the items described in para24 graph (2) are not inherently reasonable, and shall

25 adjust such amounts in accordance with such section

26 if the amounts are not inherently reasonable.
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1 (2) ITEMS DESCRIBED.—The items referred to

2 in paragraph (1) are decubitus care equipment,

3 transcutaneous electrical nerve stimulators, and any

4 other items considered appropriate by the Secretary.

5 SEC. 5040. PAYMENT FOR SURGICAL DRESSINGS.

6 (a) IN GENERAL.—Section 1834 (42 U.S.C. 1395m),

7 as amended by section 5034(a)(1), is amended by adding

8 at the end the following new subsection:

9 ‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—

10 ‘‘(1) IN GENERAL.—Payment under this sub11 section for surgical dressings (described in section

12 1861(s)(5)) shall be made in a lump sum amount

13 for the purchase of the item in an amount equal to

14 80 percent of the lesser of—

15 ‘‘(A) the actual charge for the item; or

16 ‘‘(B) a payment amount determined in ac17 cordance with the methodology described in

18 subparagraphs (B) and (C) of subsection (a)(2)

19 (except that in applying such methodology, the

20 national limited payment amount referred to in

21 such subparagraphs shall be initially computed

22 based on local payment amounts using average

23 reasonable charges for the 12-month period

24 ending December 31, 1992, increased by the
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1 covered item updates described in such sub2 section for 1993 and 1994)

3 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

4 apply to surgical dressings that are—

5 ‘‘(A) furnished as an incident to a physi6 cian’s professional service; or

7 ‘‘(B) furnished by a home health agency.’’.

8 (b) CONFORMING AMENDMENT.—Section 1833(a)(1)

9 (42 U.S.C. 1395l(a)(1)), as amended by sections

10 5070(e)(2) and 5010(e)(1), is amended—

11 (1) by striking ‘‘and’’ before ‘‘(P)’’, and

12 (2) by inserting before the semicolon at the end

13 the following: ‘‘, and (Q) with respect to surgical

14 dressings, the amounts paid shall be the amounts

15 determined under section 1834(j);’’.

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to items furnished on or after Jan18 uary 1, 1994.

19 SEC. 5041. PAYMENTS FOR TENS DEVICES.

20 (a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.

21 1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the

22 second place it appears and inserting ‘‘45 percent’’.

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) shall apply to items furnished on or after

25 January 1, 1994.
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1 SEC. 5042. MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.

3 (a) UPDATES TO PAYMENT AMOUNTS.—Subpara4 graph (A) of section 1834(a)(14) (42 U.S.C.

5 1395m(a)(14)) is amended to read as follows:

6 ‘‘(A) for 1991 and 1992, the percentage

7 increase in the consumer price index for all

8 urban consumers (U.S. city average) for the 12-

9 month period ending with June of the previous

10 year reduced by 1 percentage point; and’’.

11 (b) TREATMENT OF POTENTIALLY OVERUSED ITEMS

12 AND ADVANCED DETERMINATIONS OF COVERAGE.—(1)

13 Effective on the date of the enactment of this Act, section

14 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to

15 read as follows:

16 ‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY

17 OVERUSED ITEMS.—

18 ‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY

19 SECRETARY.—The Secretary shall develop and

20 periodically update a list of items for which

21 payment may be made under this subsection

22 that are potentially overused, and shall include

23 in such list seat-lift mechanisms, transcutane24 ous electrical nerve stimulators, motorized

25 scooters, decubitus care mattresses, and any

26 such other item determined by the Secretary to
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1 be potentially overused on the basis of any of

2 the following criteria—

3 ‘‘(i) the item is marketed directly to

4 potential patients;

5 ‘‘(ii) the item is marketed with an

6 offer to potential patients to waive the

7 costs of coinsurance associated with the

8 item or is marketed as being available at

9 no cost to policyholders of a medicare sup10 plemental policy (as defined in section

11 1882(g)(1));

12 ‘‘(iii) the item has been subject to a

13 consistent pattern of overutilization; or

14 ‘‘(iv) a high proportion of claims for

15 payment for such item under this part may

16 not be made because of the application of

17 section 1862(a)(1).

18 ‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER

19 SCRUTINY.—Payment may not be made under

20 this part for any item contained in the list de21 veloped by the Secretary under subparagraph

22 (A) unless the carrier has subjected the claim

23 for payment for the item to special scrutiny or

24 has followed the procedures described in para25 graph (11)(C) with respect to the item.’’.
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1 (2) Effective January 1, 1994, section 1834(a)(11)

2 (42 U.S.C. 1395m(a)) is amended by adding at the end

3 the following new subparagraph:

4 ‘‘(C) CARRIER DETERMINATIONS FOR CER5 TAIN ITEMS IN ADVANCE.—A carrier shall de6 termine in advance whether payment for an

7 item may not be made under this subsection be8 cause of the application of section 1862(a)(1)

9 if—

10 ‘‘(i) the item is a customized item

11 (other than inexpensive items specified by

12 the Secretary); or

13 ‘‘(ii) the item is a specified covered

14 item under subparagraph (B).’’.

15 (3) Effective for standards applied for contract years

16 beginning after the date of the enactment of this Act, sec17 tion 1842(c) (42 U.S.C. 1395u(c)), as amended by section

18 5013(a), is amended by adding at the end the following

19 new paragraph:

20 ‘‘(5) Each contract under this section which provides

21 for the disbursement of funds, as described in subsection

22 (a)(1)(B), shall require the carrier to meet criteria devel23 oped by the Secretary to measure the timeliness of carrier

24 responses to requests for payment of items described in

25 section 1834(a)(11)(C).’’.
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1 (4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is

2 amended by striking ‘‘paragraph (10) and paragraph

3 (11)’’ and inserting ‘‘paragraphs (10) and (11)’’.

4 (c) STUDY OF VARIATIONS IN DURABLE MEDICAL

5 EQUIPMENT SUPPLIER COSTS.—

6 (1) COLLECTION AND ANALYSIS OF SUPPLIER

7 COST DATA.—The Administrator of the Health Care

8 Financing Administration shall, in consultation with

9 appropriate organizations, collect data on supplier

10 costs of durable medical equipment for which pay11 ment may be made under part B of the medicare

12 program, and shall analyze such data to determine

13 the proportions of such costs attributable to the

14 service and product components of furnishing such

15 equipment and the extent to which such proportions

16 vary by type of equipment and by the geographic re17 gion in which the supplier is located.

18 (2) DEVELOPMENT OF GEOGRAPHIC ADJUST19 MENT INDEX; REPORTS.—Not later than January 1,

20 1995—

21 (A) the Administrator shall submit a re22 port to the Committees on Energy and Com23 merce and Ways and Means of the House of

24 Representatives and the Committee on Finance

25 of the Senate on the data collected and the
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1 analysis conducted under paragraph (1), and

2 shall include in such report the Administrator’s

3 recommendations for a geographic cost adjust4 ment index for suppliers of durable medical

5 equipment under the medicare program and an

6 analysis of the impact of such proposed index

7 on payments under the medicare program; and

8 (B) the Comptroller General shall submit a

9 report to the Committees on Energy and Com10 merce and Ways and Means of the House of

11 Representatives and the Committee on Finance

12 of the Senate analyzing on a geographic basis

13 the supplier costs of durable medical equipment

14 under the medicare program.

15 (d) OXYGEN RETESTING.—Section 1834(a)(5)(E)

16 (42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’

17 and inserting ‘‘56’’.

18 (e) OTHER MISCELLANEOUS AND TECHNICAL

19 AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990

20 is amended by striking ‘‘amendment made by subsection

21 (a)’’ and inserting ‘‘amendments made by this sub22 section’’.

23 (2) Section 4152(c)(2) of OBRA–1990 is amended

24 by striking ‘‘1395m(a)(7)(A)’’ and inserting

25 ‘‘1395m(a)(7)’’.
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1 (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C.

2 1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause

3 (v)’’ and inserting ‘‘clause (vi)’’.

4 (4) Section 1834(a)(7)(C)(i) (42 U.S.C.

5 1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph

6 (3)’’.

7 (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is

8 amended by striking subparagraph (D).

9 (6) Section 4153(c)(1) of OBRA–1990 is amended

10 by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.

11 (7) Section 4153(d)(2) of OBRA–1990 is amended

12 by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili13 ation’’.

14 (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is

15 amended by striking paragraph (6).

16 (B) Section 1834(a) (42 U.S.C. 1395m(a)) is amend17 ed—

18 (i) in subparagraphs (A) and (B) of paragraph

19 (1), by striking ‘‘(2) through (7)’’ each place it ap20 pears and inserting ‘‘(2) through (5) and (7)’’;

21 (ii) in paragraph (7), by striking ‘‘(2) through

22 (6)’’ and inserting ‘‘(2) through (5)’’;

23 (iii) in paragraph (8), by striking ‘‘paragraphs

24 (6) and (7)’’ each place it appears in the matter pre-
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1 ceding subparagraph (A) and in subparagraph (C)

2 and inserting ‘‘paragraph (7)’’; and

3 (iv) in paragraph (8)(A)(i), by striking ‘‘de4 scribed—’’ and all that follows and inserting ‘‘de5 scribed in paragraph (7) equal to the average of the

6 purchase prices on the claims submitted on an as7 signment-related basis for the unused item supplied

8 during the 6-month period ending with December

9 1986.’’.

10 (9) The amendments made by this subsection shall

11 take effect as if included in the enactment of OBRA–1990.

12 Subchapter D—Part B Premium

13 SEC. 5051. PART B PREMIUM.

14 Section 1839(e) (42 U.S.C. 1395r(e)) is amended—

15 (1) in paragraph (1)(A), by inserting ‘‘and for

16 each month in 1996 and 1997’’ after ‘‘January

17 1991’’, and

18 (2) in paragraph (2), by striking ‘‘1991’’ and

19 inserting ‘‘1998’’.

20 Subchapter E—Other Provisions

21 SEC. 5061. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORA22 TORY TESTS.

23 (a) LOWER CAP.—Section 1833(h)(4)(B) (42 U.S.C.

24 1395l(h)(4)(B)) is amended—

25 (1) by striking ‘‘and’’ at the end of clause (iii),
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1 (2) in clause (iv), by inserting ‘‘and before Jan2 uary 1, 1994,’’ after ‘‘1990,’’,

3 (3) by striking the period at the end of clause

4 (iv) and inserting ‘‘, and’’, and

5 (4) by adding at the end the following:

6 ‘‘(v) after December 31, 1993, is equal to 76

7 percent of the median of all the fee schedules estab8 lished for that test for that laboratory setting under

9 paragraph (1).’’.

10 (b) TWO PERCENT UPDATE FOR 1994 THROUGH

11 1998.—Section 1833(h)(2)(A)(ii)(III) (42 U.S.C.

12 1395l(h)(2)(A)(ii)(III)) is amended by striking ‘‘1991,

13 1992, and 1993’’ and inserting ‘‘1991 through 1998’’.

14 SEC. 5062. TREATMENT OF INPATIENTS AND PROVISION OF

15 DIAGNOSTIC AND THERAPEUTIC X-RAY SERV16 ICES BY RURAL HEALTH CLINICS AND FED17 ERALLY QUALIFIED HEALTH CENTERS.

18 (a) TREATMENT OF INPATIENTS.—Section 1861(aa)

19 (42 U.S.C. 1395x(aa)) is amended—

20 (1) in paragraph (1), in the matter following

21 subparagraph (C), by striking ‘‘as an outpatient’’

22 and inserting ‘‘as a patient’’;

23 (2) in paragraph (2)(A), by striking ‘‘furnishing

24 to outpatients’’ and inserting ‘‘furnishing to pa25 tients’’; and
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1 (3) in paragraph (3), in the matter following

2 subparagraph (B), by striking ‘‘as an outpatient’’

3 and inserting ‘‘as a patient’’.

4 (b) TREATMENT OF DIAGNOSTIC AND THERAPEUTIC

5 X-RAY SERVICES.—Section 1861(aa) (42 U.S.C.

6 1395x(aa)) is further amended—

7 (1) in paragraph (1)(A), by inserting ‘‘(i)’’ after

8 ‘‘(A)’’ and by adding at the end the following: ‘‘and

9 (ii) diagnostic and therapeutic x-ray services,’’, and

10 (2) in paragraph (2)(A), by striking ‘‘(A)’’ and

11 inserting ‘‘(A)(i)’’.

12 (c) CONFORMING AMENDMENT.—Section

13 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by

14 striking ‘‘and services of a certified registered nurse anes15 thetist’’ and inserting ‘‘services of a certified registered

16 nurse anesthetist, rural health clinic services, and Feder17 ally-qualified health center services’’.

18 (d) EFFECTIVE DATE.—The amendments made by

19 this section shall take effect on January 1, 1994, and shall

20 apply to services furnished on or after such date.

21 SEC. 5063. APPLICATION OF MAMMOGRAPHY CERTIFI22 CATION REQUIREMENTS.

23 (a) SCREENING MAMMOGRAPHY.—Section 1834(c)

24 (42 U.S.C. 1395m(c)) is amended—
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1 (1) in paragraph (1)(B), by striking ‘‘meets the

2 quality standards established under paragraph (3)’’

3 and inserting ‘‘is conducted by a facility that has a

4 certificate (or provisional certificate) issued under

5 section 354 of the Public Health Service Act’’;

6 (2) in paragraph (1)(C)(iii), by striking ‘‘para7 graph (4)’’ and inserting ‘‘paragraph (3)’’;

8 (3) by striking paragraph (3); and

9 (4) by redesignating paragraphs (4) and (5) as

10 paragraphs (3) and (4).

11 (b) DIAGNOSTIC MAMMOGRAPHY.—Section

12 1861(s)(3) (42 U.S.C. 1395x(s)(3)) is amended by insert13 ing ‘‘and including diagnostic mammography if conducted

14 by a facility that has a certificate (or provisional certifi15 cate) issued under section 354 of the Public Health Serv16 ice Act’’ after ‘‘necessary’’.

17 (c) CONFORMING AMENDMENTS.—(1) Section

18 1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended by

19 striking ‘‘or which does not meet the standards established

20 under section 1834(c)(3)’’ and inserting ‘‘or which is not

21 conducted by a facility described in section

22 1834(c)(1)(B)’’.

23 (2) Section 1863 (42 U.S.C. 1395z) is amended by

24 striking ‘‘or whether screening mammography meets the

25 standards established under section 1834(c)(3),’’.
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1 (3) The first sentence of section 1864(a) (42 U.S.C.

2 1395aa(a)) is amended by striking ‘‘, or whether screening

3 mammography meets the standards established under sec4 tion 1834(c)(3)’’.

5 (4) The third sentence of section 1865(a) (42 U.S.C.

6 1395bb(a)) is amended by striking ‘‘1834(c)(3),’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to mammography furnished by a

9 facility on and after the first date that the certificate re10 quirements of section 354(b) of the Public Health Service

11 Act apply to such mammography conducted by such facil12 ity.

13 SEC. 5064. EXTENSION OF ALZHEIMER’S DISEASE DEM14 ONSTRATION.

15 Section 9342 of OBRA–1986, as amended by section

16 4164(a)(2) of OBRA–1990, is amended—

17 (1) in subsection (c)(1), by striking ‘‘4 years’’

18 and inserting ‘‘5 years’’; and

19 (2) in subsection (f)—

20 (A) by striking ‘‘$55,000,000’’ and insert21 ing ‘‘$60,000,000’’, and

22 (B) by striking ‘‘$3,000,000’’ and insert23 ing ‘‘$5,000,000’’.
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1 SEC. 5065. ORAL CANCER DRUGS.

2 (a) COVERAGE OF CERTAIN SELF-ADMINISTERED

3 ANTICANCER DRUGS.—Section 1861(s)(2) (42 U.S.C.

4 1395(s)(2)), as amended by section 5070(f)(7)(B), is

5 amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (N);

8 (2) by adding ‘‘and’’ at the end of subpara9 graph (O); and

10 (3) by adding at the end the following new sub11 paragraph:

12 ‘‘(P) an oral drug (which is approved by the

13 Federal Food and Drug Administration) prescribed

14 for use as an anticancer chemotherapeutic agent for

15 a given indication, and containing an active ingredi16 ent (or ingredients), which is the same indication

17 and active ingredient (or ingredients) as a drug

18 which the carrier determines would be covered pur19 suant to subparagraph (A) or (B) if the drug could

20 not be self-administered;’’.

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

22 this section shall apply to items furnished on or after Jan23 uary 1, 1994.
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1 SEC. 5066. EXTENSION OF MUNICIPAL HEALTH SERVICE

2 DEMONSTRATION PROJECTS.

3 Section 9215 of the Consolidated Omnibus Budget

4 Reconciliation Act of 1985, as amended by section 6135

5 of OBRA–1989, is amended—

6 (1) by striking ‘‘December 31, 1993’’ and in7 serting ‘‘December 31, 1997’’, and

8 (2) in the second sentence, by inserting after

9 ‘‘beneficiary costs,’’ the following: ‘‘costs to the med10 icaid program and other payors, access to care, out11 comes, beneficiary satisfaction, utilization differences

12 among the different populations served by the

13 projects,’’.

14 SEC. 5067. TREATMENT OF CERTAIN INDIAN HEALTH PRO15 GRAMS AND FACILITIES AS FEDERALLY16 QUALIFIED HEALTH CENTERS.

17 (a) IN GENERAL.—Section 1861(aa)(4) (42 U.S.C.

18 1395x(aa)(4)) is amended—

19 (1) by striking ‘‘or’’ at the end of subparagraph

20 (B);

21 (2) by striking the period at the end of sub22 paragraph (C) and inserting ‘‘; or’’; and

23 (3) by adding at the end the following new sub24 paragraph:

25 ‘‘(D) is an outpatient health program or facility

26 operated by a tribe or tribal organization under the
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1 Indian Self-Determination Act or by an urban In2 dian organization receiving funds under title V of

3 the Indian Health Care Improvement Act.’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall take effect as if included in the enact6 ment of section 4161(a)(2)(C) of OBRA–1990.

7 SEC. 5068. INTEREST PAYMENTS.

8 (a) IN GENERAL.—Section 1842(c)(2)(B)(ii)(IV) of

9 the Social Security Act shall be applied with respect to

10 paper claims received in the 9-month period beginning

11 January 1, 1993, by substituting ‘‘27 calendar days’’ for

12 ‘‘24 calendar days’’ and ‘‘17 calendar days’’.

13 (b) PROHIBITING PAYMENT OF INTEREST DURING

14 MANDATORY PAYMENT DELAY PERIOD.—Section

15 1842(c)(2)(C) (42 U.S.C. 1395u(c)(2)(C)) is amended by

16 adding at the end the following: ‘‘Notwithstanding any

17 other provision of law, no interest may be paid with re18 spect to a claim pursuant to the preceding sentence within

19 any period following the submission of the claim during

20 which no payment may be issued, mailed, or otherwise

21 transmitted with respect to the claim.’’.
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1 SEC. 5069. CLARIFICATION OF COVERAGE OF CERTIFIED

2 NURSE-MIDWIFE SERVICES PERFORMED

3 OUTSIDE THE MATERNITY CYCLE.

4 (a) IN GENERAL.—Section 1861(gg)(2) (42 U.S.C.

5 1395x(gg)(2)) is amended by striking ‘‘, and performs

6 services’’ and all that follows and inserting a period.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to services furnished on or after

9 January 1, 1994.

10 SEC. 5069A. INCREASE IN, AND STUDY OF, ANNUAL CAP ON

11 AMOUNT OF MEDICARE PAYMENT FOR OUT12 PATIENT PHYSICAL THERAPY AND OCCUPA13 TIONAL THERAPY SERVICES.

14 (a) INCREASE IN ANNUAL LIMITATION.—Section

15 1833(g) (42 U.S.C. 1395l(g)) is amended by striking

16 ‘‘$750’’ and inserting ‘‘$900’’ each place it appears.

17 (b) STUDY.—(1) The Physician Payment Review

18 Commission shall conduct a study of the appropriateness

19 of continuing an annual limitation on the amount of pay20 ment for outpatient services of independently practicing

21 physical and occupational therapists under the medicare

22 program.

23 (2) By not later than January 1, 1995, the Commis24 sion shall submit to the Committees on Energy and Com25 merce and Ways and Means of the House of Representa26 tives and the Committee on Finance of the Senate a report
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1 on the study conducted under paragraph (1). Such report

2 shall include such recommendations for changes in such

3 annual limitation as the Commission finds appropriate.

4 (c) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall apply to services furnished on or after

6 January 1, 1994.

7 SEC. 5070. MISCELLANEOUS AND TECHNICAL CORREC8 TIONS.

9 (a) REVISION OF INFORMATION ON PART B CLAIMS

10 FORMS.—Section 1833(q)(1) (42 U.S.C. 1395l(q)(1)) is

11 amended—

12 (1) by striking ‘‘provider number’’ and inserting

13 ‘‘unique physician identification number’’; and

14 (2) by striking ‘‘and indicate whether or not the

15 referring physician is an interested investor (within

16 the meaning of section 1877(h)(5))’’.

17 (b) CONSULTATION FOR SOCIAL WORKERS.—Effec18 tive with respect to services furnished on or after January

19 1, 1991, section 6113(c) of OBRA–1989 is amended—

20 (1) by inserting ‘‘and clinical social worker

21 services’’ after ‘‘psychologist services’’; and

22 (2) by striking ‘‘psychologist’’ the second and

23 third place it appears and inserting ‘‘psychologist or

24 clinical social worker’’.
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1 (c) REPORTS ON HOSPITAL OUTPATIENT PAY2 MENT.—(1) OBRA–1989 is amended by striking section

3 6137.

4 (2) Section 1135(d) (42 U.S.C. 1320b–5(d)) is

5 amended—

6 (A) by striking paragraph (6); and

7 (B) in paragraph (7)—

8 (i) by striking ‘‘systems’’ each place it ap9 pears and inserting ‘‘system’’; and

10 (ii) by striking ‘‘paragraphs (1) and (6)’’

11 and inserting ‘‘paragraph (1)’’.

12 (d) RADIOLOGY AND DIAGNOSTIC SERVICES PRO13 VIDED IN HOSPITAL OUTPATIENT DEPARTMENTS.—(1)

14 Effective as if included in the enactment of OBRA–1989,

15 section 1833(n)(1)(B)(i)(II) (42 U.S.C.

16 1395l(n)(1)(B)(i)(II)) is amended—

17 (A) by striking ‘‘1989’’ and inserting ‘‘1989

18 and for services described in subsection (a)(2)(E)(ii)

19 furnished on or after January 1, 1992’’; and

20 (B) by striking ‘‘1842(b)’’ and inserting

21 ‘‘1842(b) (or, in the case of services furnished on or

22 after January 1, 1992, under section 1848)’’.

23 (2) Effective as if included in the enactment of

24 OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
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1 1395l(n)(1)(B)(i)(II)) is amended by striking ‘‘January 1,

2 1989’’ and inserting ‘‘April 1, 1989’’.

3 (e) PAYMENTS TO NURSE PRACTITIONERS IN RURAL

4 AREAS (SECTION 4155 OF OBRA–1990).—(1) Section

5 1861(s)(2)(K)(iii) (42 U.S.C. 1395x(s)(2)(K)(iii)) is

6 amended—

7 (A) by striking ‘‘subsection (aa)(3)’’ and insert8 ing ‘‘subsection (aa)(5)’’; and

9 (B) by striking ‘‘subsection (aa)(4)’’ and insert10 ing ‘‘subsection (aa)(6)’’.

11 (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is

12 amended—

13 (A) by striking ‘‘and’’ before ‘‘(N)’’; and

14 (B) with respect to the matter inserted by sec15 tion 4155(b)(2)(B) of OBRA–1990—

16 (i) by striking ‘‘(M)’’ and inserting ‘‘, and

17 (O)’’, and

18 (ii) by transferring and inserting it (as

19 amended) immediately before the semicolon at

20 the end.

21 (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is

22 amended—

23 (A) by striking ‘‘ambulatory’’ each place it ap24 pears and inserting ‘‘or ambulatory’’; and
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1 (B) by striking ‘‘center,’’ and inserting ‘‘cen2 ter’’.

3 (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A))

4 is amended by striking ‘‘subsection (a)(1)(M)’’ and insert5 ing ‘‘subsection (a)(1)(O)’’.

6 (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is

7 amended by striking ‘‘subsection (s)(2)(K)(i)’’ and insert8 ing ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’.

9 (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is

10 amended by striking ‘‘this Act’’ and inserting ‘‘this title’’.

11 (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is

12 amended by striking ‘‘1861(s)(2)(K)(i)’’ and inserting

13 ‘‘1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’.

14 (8) Section 1866(a)(1)(H) (42 U.S.C.

15 1395cc(a)(1)(H)) is amended by striking

16 ‘‘1861(s)(2)(K)(i)’’ and inserting ‘‘1861(s)(2)(K)(i) or

17 1861(s)(2)(K)(iii)’’.

18 (f) OTHER MISCELLANEOUS AND TECHNICAL

19 AMENDMENTS.—

20 (1) IMMEDIATE ENROLLMENT IN PART B BY IN21 DIVIDUALS COVERED BY AN EMPLOYMENT-BASED

22 PLAN.—(A) Subparagraphs (A) and (B) of section

23 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each amend24 ed—
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1 (i) by striking ‘‘beginning with the first

2 day of the first month in which the individual

3 is no longer enrolled’’ and inserting ‘‘including

4 each month during any part of which the indi5 vidual is enrolled’’; and

6 (ii) by striking ‘‘and ending seven months

7 later’’ and inserting ‘‘ending with the last day

8 of the eighth consecutive month in which the in9 dividual is at no time so enrolled’’.

10 (B) Paragraphs (1) and (2) of section 1838(e)

11 (42 U.S.C. 1395q(e)) are amended to read as fol12 lows:

13 ‘‘(1) in any month of the special enrollment pe14 riod in which the individual is at any time enrolled

15 in a plan (specified in subparagraph (A) or (B), as

16 applicable, of section 1837(i)(3)) or in the first

17 month following such a month, the coverage period

18 shall begin on the first day of the month in which

19 the individual so enrolls (or, at the option of the in20 dividual, on the first day of any of the following

21 three months), or

22 ‘‘(2) in any other month of the special enroll23 ment period, the coverage period shall begin on the

24 first day of the month following the month in which

25 the individual so enrolls.’’.
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1 (C) The amendments made by subparagraphs

2 (A) and (B) shall take effect on the first day of the

3 first month that begins after the expiration of the

4 120-day period that begins on the date of the enact5 ment of this Act.

6 (2) BLEND AMOUNTS FOR AMBULATORY SUR7 GICAL CENTER PAYMENTS.—Subclauses (I) and (II)

8 of section 1833(i)(3)(B)(ii) (42 U.S.C.

9 1395l(i)(3)(B)(ii)) are each amended—

10 (A) by striking ‘‘for reporting’’ and insert11 ing ‘‘for portions of cost reporting’’; and

12 (B) by striking ‘‘and on or before’’ and in13 serting ‘‘and ending on or before’’.

14 (3) CLINICAL DIAGNOSTIC LABORATORY TESTS

15 (SECTION 4154 OF OBRA–1990).—Section 4154(e)(5)

16 of OBRA–1990 is amended by striking ‘‘(1)(A)’’ and

17 inserting ‘‘(1)(A),’’.

18 (4) SEPARATE PAYMENT UNDER PART B FOR

19 CERTAIN SERVICES (SECTION 4157 OF OBRA–1990).—

20 Section 4157(a) of OBRA–1990 is amended by

21 striking ‘‘(a) SERVICES OF’’ and all that follows

22 through ‘‘Section’’ and inserting ‘‘(a) TREATMENT

23 OF SERVICES OF CERTAIN HEALTH PRACTITION24 ERS.—Section’’.
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1 (5) COMMUNITY HEALTH CENTERS AND RURAL

2 HEALTH CLINICS (SECTION 4161 OF OBRA–1990).—

3 (A) The fourth sentence of section 1861(aa)(2) (42

4 U.S.C. 1395x(aa)(2)) is amended—

5 (i) by striking ‘‘certification’’ the first

6 place it appears and inserting ‘‘approval’’; and

7 (ii) by striking ‘‘the Secretary’s approval

8 or disapproval of the certification’’ and insert9 ing ‘‘Secretary’s approval or disapproval’’.

10 (B) Section 4161(a)(7)(B) of OBRA–1990 is

11 amended by inserting ‘‘and to the Committee on Fi12 nance of the Senate’’ after ‘‘Representatives’’.

13 (6) SCREENING MAMMOGRAPHY (SECTION 4163

14 OF OBRA–1990).—Section 4163 of OBRA–1990 is

15 amended—

16 (A) by adding at the end of subsection (d)

17 the following new paragraph:

18 ‘‘(3) The amendment made by paragraph

19 (2)(A)(iv) shall apply to screening pap smears per20 formed on or after July 1, 1990.’’; and

21 (B) in subsection (e), by striking ‘‘The

22 amendments’’ and inserting ‘‘Except as pro23 vided in subsection (d)(3), the amendments.’’.

24 (7) INJECTABLE DRUGS FOR TREATMENT OF

25 OSTEOPOROSIS.—
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1 (A) CLARIFICATION OF DRUGS COV2 ERED.—The section 1861(jj) (42 U.S.C.

3 1395x(jj)) inserted by section 4156(a)(2) of

4 OBRA–1990 is amended—

5 (i) in the matter preceding paragraph

6 (1), by striking ‘‘a bone fracture related

7 to’’; and

8 (ii) in paragraph (1), by striking ‘‘pa9 tient’’ and inserting ‘‘individual has suf10 fered a bone fracture related to post-meno11 pausal osteoporosis and that the individ12 ual’’.

13 (B) LIMITING COVERAGE TO DRUGS PRO14 VIDED BY HOME HEALTH AGENCIES.—(i) The

15 section 1861(jj) (42 U.S.C. 1395x(jj)) inserted

16 by section 4156(a)(2) of OBRA–1990 is

17 amended by striking ‘‘if’’ and inserting ‘‘by a

18 home health agency if’’.

19 (ii) Section 1861(m)(5) (42 U.S.C.

20 1395x(m)(5)) is amended by striking ‘‘but ex21 cluding’’ and inserting ‘‘and a covered

22 osteoporosis drug (as defined in subsection

23 (kk), but excluding other’’.

24 (iii) Section 1861(s)(2) (42 U.S.C.

25 1395x(s)(2)) is amended—
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1 (I) by adding ‘‘and’’ at the end of

2 subparagraph (N), and

3 (II) by striking subparagraph (O) and

4 redesignating subparagraph (P) as sub5 paragraph (O).

6 (C) PAYMENT BASED ON REASONABLE

7 COST.—Section 1833(a)(2) (42 U.S.C.

8 1395l(a)(2)) is amended—

9 (i) in subparagraph (A), by striking

10 ‘‘health services’’ and inserting ‘‘health

11 services (other than covered osteoporosis

12 drug (as defined in section 1861(kk)))’’;

13 (ii) by striking ‘‘and’’ at the end of

14 subparagraph (D);

15 (iii) by striking the semicolon at the

16 end and inserting ‘‘; and’’; and

17 (iv) by adding at the end the following

18 new subparagraph:

19 ‘‘(F) with respect to covered osteoporosis

20 drug (as defined in section 1861(kk)) furnished

21 by a home health agency, 80 percent of the rea22 sonable cost of such service, as determined

23 under section 1861(v);’’.

24 (D) APPLICATION OF PART B DEDUCT25 IBLE.—Section 1833(b)(2) (42 U.S.C.
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1 1395l(b)(2)) is amended by striking ‘‘services’’

2 and inserting ‘‘services (other than covered

3 osteoporosis drug (as defined in section

4 1861(kk)))’’.

5 (E) COVERED OSTEOPOROSIS DRUG (SEC6 TION 4156 OF OBRA–1990).—Section 1861 (42

7 U.S.C. 1395x) is amended, in the subsection

8 (jj) inserted by section 4156(a)(2) of OBRA–

9 1990, by striking ‘‘(jj) The term’’ and inserting

10 ‘‘(kk) The term’’.

11 (8) OTHER MISCELLANEOUS AND TECHNICAL

12 CORRECTIONS (SECTION 4164 OF OBRA–1990).—

13 (A) OWNERSHIP DISCLOSURE REQUIRE14 MENTS.—(i) Section 1124A(a)(2)(A) (42

15 U.S.C. 1320a–3a(a)(2)(A)) is amended by

16 striking ‘‘of the Social Security Act’’.

17 (ii) Section 4164(b)(4) of OBRA–1990 is

18 amended by striking ‘‘paragraph’’ and inserting

19 ‘‘paragraphs’’.

20 (B) DIRECTORY OF UNIQUE PHYSICIAN

21 IDENTIFIER NUMBERS.—Section 4164(c) of

22 OBRA–1990 is amended by striking ‘‘publish’’

23 and inserting ‘‘publish, and shall periodically

24 update,’’.
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1 (g) EFFECTIVE DATE.—Except as otherwise provided

2 in this section, the amendments made by this section shall

3 take effect as if included in the enactment of OBRA–1990.

4 CHAPTER 2—PROVISIONS RELATING TO

5 PARTS A AND B

6 SEC. 5071. ELIMINATION OF ADD-ON FOR OVERHEAD OF

7 HOSPITAL-BASED HOME HEALTH AGENCIES.

8 (a) GENERAL RULE.—The first sentence of section

9 1861(v)(1)(L)(ii) (42 U.S.C. 1395x(v)(1)(L)(ii)) is

10 amended by striking ‘‘, with appropriate adjustment for

11 administrative and general costs of hospital-based agen12 cies’’.

13 (b) EFFECTIVE DATE.—The amendment made by

14 subsection (a) applies to cost reporting periods beginning

15 after fiscal year 1993.

16 SEC. 5072. STUDY AND REPORT ON MEDICARE GME PAY17 MENTS.

18 (a) STUDY.—The Secretary of Health and Human

19 Services shall conduct a study of the methodology used

20 to determine payments to hospitals under the medicare

21 program for the costs of medical residency training pro22 grams and shall include in the study an analysis of the

23 causes of variation among such programs in the per resi24 dent costs of direct graduate medical education, including
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1 the extent of support for such programs from non-hospital

2 sources.

3 (b) REPORT.—Not later than 1 year after the date

4 of the enactment of this Act, the Secretary shall submit

5 a report to Congress on the study conducted under sub6 section (a), and shall include in the report any rec7 ommendations considered appropriate by the Secretary for

8 modifications to the methodology used to determine pay9 ments to hospitals under the medicare program for the

10 costs of medical residency training programs that will en11 courage greater uniformity among medical residency train12 ing programs in the per resident costs of direct graduate

13 medical education.

14 SEC. 5073. MEDICARE AS SECONDARY PAYER.

15 (a) EXTENSION OF DATA MATCH PROGRAM.—Sec16 tion 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is

17 amended by striking ‘‘1995’’ and inserting ‘‘1998’’.

18 (b) PERMANENT APPLICATION TO DISABLED INDI19 VIDUALS.—Section 1862(b)(1)(B) (42 U.S.C.

20 1395y(b)(1)(B)) is amended by striking clause (iii).

21 (c) APPLICATION OF ESRD RULES TO CERTAIN

22 AGED AND DISABLED BENEFICIARIES AND EXTENSION

23 OF APPLICATION OF 18-MONTH RULE.—
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1 (1) Subparagraphs (A)(iv) and (B)(ii) of section

2 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each

3 amended—

4 (A) by striking ‘‘Clause (i) shall not apply’’

5 and inserting ‘‘Subparagraph (C) shall apply

6 instead of clause (i)’’, and

7 (B) by inserting ‘‘(without regard to enti8 tlement under section 226)’’ after ‘‘or’’ the sec9 ond place it appears.

10 (2) The second sentence of section

11 1862(b)(1)(C) is amended by striking ‘‘on or before

12 January 1, 1996’’ and inserting ‘‘before October 1,

13 1998’’.

14 (d) UNIFORM RULES FOR SIZE OF EMPLOYER.—

15 (1) IN GENERAL.—Section 1862(b)(1) (42

16 U.S.C. 1395y(b)(1)) is amended by adding at the

17 end the following:

18 ‘‘(E) GENERAL PROVISIONS.—

19 ‘‘(i) EXCLUSION OF GROUP HEALTH

20 PLAN OF A SMALL EMPLOYER.—Subpara21 graphs (A) through (C) do not apply to a

22 group health plan unless the plan is a plan

23 of, or contributed to by, an employer or

24 employee organization that has 20 or more

25 individuals in current employment status
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1 for each working day in each of 20 or more

2 calendar weeks in the current calendar

3 year or the preceding calendar year.

4 ‘‘(ii) EXCEPTION FOR SMALL EMPLOY5 ERS IN MULTIEMPLOYER OR MULTIPLE

6 EMPLOYER GROUP HEALTH PLANS.—Sub7 paragraphs (A) through (C) also do not

8 apply with respect to individuals enrolled

9 in a multiemployer or multiple employer

10 group health plan if the coverage of the in11 dividuals under the plan is by virtue of

12 current employment status with an em13 ployer that does not have 20 or more indi14 viduals in current employment status for

15 each working day in each of 20 or more

16 calendar weeks in the current calendar

17 year and the preceding calendar year; but

18 the exception provided in this clause ap19 plies only if the plan elects treatment

20 under this clause.

21 ‘‘(iii) APPLICATION OF CONTROLLED

22 GROUP RULES.—For purposes of clauses

23 (i) and (ii)—

24 ‘‘(I) all employees of corporations

25 which are members of a controlled
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1 group of corporations (within the

2 meaning of section 1563(a) of the In3 ternal Revenue Code of 1986, deter4 mined without regard to subsection

5 (a)(4) or (e)(3)(C)), shall be treated

6 as employed by a single employer,

7 ‘‘(II) all employees of trades or

8 businesses (whether or not incor9 porated) which are under common

10 control (under regulations prescribed

11 by the Secretary of the Treasury

12 under section 414(c) of that Code)

13 shall be treated as employed by a sin14 gle employer,

15 ‘‘(III) all employees of the mem16 bers of an affiliated service group (as

17 defined in section 414(m) of that

18 Code) shall be treated as employed by

19 a single employer, and

20 ‘‘(IV) leased employees (as de21 fined in section 414(n)(2) of that

22 Code) shall be treated as employees of

23 the person for whom they perform

24 services to the extent they are so
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1 treated under section 414(n) of that

2 Code.

3 In applying sections of the Internal Reve4 nue Code of 1986 under this clause, the

5 Secretary shall rely upon the regulations

6 and decisions of the Secretary of the

7 Treasury respecting such sections.

8 ‘‘(iv) GROUP HEALTH PLAN DE9 FINED.—For purposes of this subsection,

10 the term ‘group health plan’ has the mean11 ing given such term in section 5000(b) of

12 the Internal Revenue Code of 1986, with13 out regard to section 5000(d) of such

14 Code.

15 ‘‘(v) CURRENT EMPLOYMENT STATUS

16 DEFINED.—For purposes of this sub17 section, an individual has ‘current employ18 ment status’ with an employer if the indi19 vidual is an employee, is the employer, or

20 is associated with the employer in a busi21 ness relationship.

22 ‘‘(vi) TREATMENT OF SELF-EM23 PLOYED PERSONS AS EMPLOYERS.—For

24 purposes of this subsection, the term ‘em25 ployer’ includes a self-employed person.’’.
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1 (2) CONFORMING AMENDMENTS FOR WORKING

2 AGED.—Section 1862(b)(1)(A) (42 U.S.C.

3 1395y(b)(1)(A)) is amended—

4 (A) by amending subclauses (I) and (II) of

5 clause (i) to read as follows:

6 ‘‘(I) may not take into account

7 that an individual (or the individual’s

8 spouse) who is covered under the plan

9 by virtue of the individual’s current

10 employment status with an employer

11 is entitled to benefits under this title

12 under section 226(a), and

13 ‘‘(II) shall provide that any indi14 vidual age 65 or over (and the individ15 ual’s spouse age 65 or older) who is

16 covered under the plan by virtue of

17 the individual’s current employment

18 status with an employer shall be enti19 tled to the same benefits under the

20 plan under the same conditions as any

21 such individual (or spouse) under age

22 65.’’;

23 (B) by striking clauses (ii), (iii), and (v),

24 and
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1 (C) by redesignating clause (iv) as clause

2 (ii).

3 (3) AMENDMENTS FOR DISABLED INDIVID4 UALS.—Section 1862(b) (42 U.S.C. 1395y(b)) is

5 amended—

6 (A) by amending the heading and clause

7 (i) of paragraph (1)(B) to read as follows:

8 ‘‘(B) DISABLED INDIVIDUALS UNDER

9 GROUP HEALTH PLANS.—

10 ‘‘(i) IN GENERAL.—A group health

11 plan may not take into account that an in12 dividual (or a member of the individual’s

13 family) who is covered under the plan by

14 virtue of the individual’s current employ15 ment status with an employer is entitled to

16 benefits under this title under section

17 226(b).’’;

18 (B) by striking clause (iv) of paragraph

19 (1)(B); and

20 (C) in the second sentence of paragraph

21 (2)(A), by striking ‘‘or large group health

22 plan’’.

23 (4) AMENDMENTS FOR INDIVIDUALS WITH

24 ESRD.—Section 1862(b)(1)(C) (42 U.S.C.

25 1395y(b)(1)(C)) is amended—
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1 (A) in the matter preceding clause (i), by

2 striking ‘‘(as defined in paragraph (A)(v))’’,

3 (B) by striking ‘‘solely’’ each place it ap4 pears,

5 (C) by striking ‘‘by reason of’’ and insert6 ing ‘‘under’’ each place it appears, and

7 (D) by inserting ‘‘or eligible for’’ after ‘‘en8 titled to’’ each place it appears.

9 (e) SECONDARY PAYER EXEMPTION FOR MEMBERS

10 OF RELIGIOUS ORDERS.—Effective as if included in the

11 enactment of OBRA–1989, section 6202(e)(2) of such Act

12 is amended by adding at the end the following: ‘‘Such

13 amendment also shall apply to items and services fur14 nished before such date with respect to secondary payor

15 cases which the Secretary of Health and Human Services

16 had not identified as of such date.’’.

17 (f) IMPROVING IDENTIFICATION OF MEDICARE SEC18 ONDARY PAYER SITUATIONS.—

19 (1) SURVEY OF BENEFICIARIES.—

20 (A) IN GENERAL.—Section 1862(b)(5) (42

21 U.S.C. 1395y(b)(5)) is amended by adding at

22 the end the following new subparagraph:

23 ‘‘(D) OBTAINING INFORMATION FROM

24 BENEFICIARIES.—Before an individual applies

25 for benefits under part A or enrolls under part
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1 B, the Administrator shall mail the individual a

2 questionnaire to obtain information on whether

3 the individual is covered under a primary plan

4 and the nature of the coverage provided under

5 the plan, including the name, address, and iden6 tifying number of the plan.’’.

7 (B) DISTRIBUTION OF QUESTIONNAIRE BY

8 CONTRACTOR.—The Secretary of Health and

9 Human Services shall enter into an agreement

10 with an entity not later than April 1, 1994, to

11 distribute the questionnaire described in section

12 1862(b)(5)(D) of the Social Security Act (as

13 added by subparagraph (A)).

14 (C) NO MEDICARE SECONDARY PAYOR DE15 NIAL BASED ON FAILURE TO COMPLETE QUES16 TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.

17 1395y(b)(2)) is amended by adding at the end

18 the following new subparagraph:

19 ‘‘(C) TREATMENT OF QUESTIONNAIRES.—

20 The Secretary may not fail to make payment

21 under subparagraph (A) solely on the ground

22 that an individual failed to complete a question23 naire concerning the existence of a primary

24 plan.’’.
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1 (2) MANDATORY SCREENING BY PROVIDERS

2 AND SUPPLIERS UNDER PART B.—

3 (A) IN GENERAL.—Section 1862(b) (42

4 U.S.C. 1395y(b)) is amended by adding at the

5 end the following new paragraph:

6 ‘‘(6) SCREENING REQUIREMENTS FOR PROVID7 ERS AND SUPPLIERS.—

8 ‘‘(A) IN GENERAL.—Notwithstanding any

9 other provision of this title, no payment may be

10 made for any item or service furnished under

11 part B unless the entity furnishing such item or

12 service completes (to the best of its knowledge

13 and on the basis of information obtained from

14 the individual to whom the item or service is

15 furnished) the portion of the claim form relat16 ing to the availability of other health benefit

17 plans.

18 ‘‘(B) PENALTIES.—An entity that know19 ingly, willfully, and repeatedly fails to complete

20 a claim form in accordance with subparagraph

21 (A) or provides inaccurate information relating

22 to the availability of other health benefit plans

23 on a claim form under such subparagraph shall

24 be subject to a civil money penalty of not to ex25 ceed $2,000 for each such incident. The provi-
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1 sions of section 1128A (other than subsections

2 (a) and (b)) shall apply to a civil money penalty

3 under the previous sentence in the same man4 ner as such provisions apply to a penalty or

5 proceeding under section 1128A(a).’’.

6 (B) EFFECTIVE DATE.—The amendment

7 made by subparagraph (A) shall apply with re8 spect to items and services furnished on or

9 after January 1, 1994.

10 (g) IMPROVEMENTS IN RECOVERY OF PAYMENTS

11 FROM PRIMARY PAYERS.—

12 (1) SUBMISSION OF REPORTS ON EFFORTS TO

13 RECOVER ERRONEOUS PAYMENTS.—Section

14 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—

15 (A) by striking ‘‘and’’ at the end of sub16 paragraphs (G) and (H); and

17 (B) by inserting after subparagraph (H)

18 the following new subparagraph:

19 ‘‘(I) will submit annual reports to the Secretary

20 describing the steps taken to recover payments made

21 under this part for items or services for which pay22 ment has been or could be made under a primary

23 plan (as defined in section 1862(b)(2)(A)).’’.

24 (2) REQUIREMENTS UNDER CARRIER PERFORM25 ANCE EVALUATION PROGRAM.—Section 1842(b)(2)
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1 (42 U.S.C. 1395u(b)(2)) is amended by adding at

2 the end the following new subparagraph:

3 ‘‘(D) In addition to any other standards and criteria

4 established by the Secretary for evaluating carrier per5 formance under this paragraph relating to avoiding erro6 neous payments, the Secretary shall establish standards

7 and criteria relating to the carrier’s success in recovering

8 payments made under this part for items or services for

9 which payment has been or could be made under a pri10 mary plan (as defined in section 1862(b)(2)(A)).’’.

11 (3) DEADLINE FOR REIMBURSEMENT BY PRI12 MARY PLANS.—

13 (A) IN GENERAL.—Section

14 1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))

15 is amended by adding at the end the following

16 sentence: ‘‘If reimbursement is not made to the

17 appropriate Trust Fund before the expiration of

18 the 60-day period that begins on the date such

19 notice or other information is received, the Sec20 retary may charge interest (beginning with the

21 date on which the notice or other information

22 is received) on the amount of the reimburse23 ment until reimbursement is made (at a rate

24 determined by the Secretary in accordance with
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1 regulations of the Secretary of the Treasury ap2 plicable to charges for late payments).’’.

3 (B) CONFORMING AMENDMENT.—The

4 heading of clause (i) of section 1862(b)(2)(B) is

5 amended to read as follows: ‘‘REPAYMENT RE6 QUIRED.—’’.

7 (C) EFFECTIVE DATE.—The amendments

8 made by this paragraph shall apply to payments

9 for items and services furnished on or after the

10 date of the enactment of this Act.

11 (4) EFFECTIVE DATE.—The amendments made

12 by paragraphs (1) and (2) shall apply to contracts

13 with fiscal intermediaries and carriers under title

14 XVIII of the Social Security Act for years beginning

15 with 1994.

16 (h) MISCELLANEOUS AND TECHNICAL CORREC17 TIONS.—

18 (1) The sentence in section 1862(b)(1)(C)

19 added by section 4203(c)(1)(B) of OBRA–1990 is

20 amended by striking ‘‘clauses (i) and (ii)’’ and in21 serting ‘‘this subparagraph’’.

22 (2) Effective as if included in the enactment of

23 OBRA–1989, section 1862(b)(1) is amended—

24 (A) in subparagraphs (A)(v) and

25 (B)(iv)(II), by inserting ‘‘, without regard to
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1 section 5000(d) of such Code’’ before the period

2 at the end of each subparagraph;

3 (B) in subparagraph (A)(iii), by striking

4 ‘‘current calendar year or the preceding cal5 endar year’’ and inserting ‘‘current calendar

6 year and the preceding calendar year’’; and

7 (C) in the matter in subparagraph (C)

8 after clause (ii), by striking ‘‘taking into ac9 count that’’ and inserting ‘‘paying benefits sec10 ondary to this title when’’.

11 (3) Section 1862(b)(5)(C)(i) (42 U.S.C.

12 1395y(b)(5)(C)(i)) is amended by striking

13 ‘‘6103(l)(12)(D)(iii)’’ and inserting

14 ‘‘6103(l)(12)(E)(iii)’’.

15 (4) Section 4203(c)(2) of OBRA–1990 is

16 amended—

17 (A) by striking ‘‘the application of clause

18 (iii)’’ and inserting ‘‘the second sentence’’;

19 (B) by striking ‘‘on individuals’’ and all

20 that follows through ‘‘section 226A of such

21 Act’’;

22 (C) in clause (ii), by striking ‘‘clause’’ and

23 inserting ‘‘sentence’’;

24 (D) in clause (v), by adding ‘‘and’’ at the

25 end; and
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1 (E) in clause (vi)—

2 (i) by inserting ‘‘of such Act’’ after

3 ‘‘1862(b)(1)(C)’’, and

4 (ii) by striking the period at the end

5 and inserting the following: ‘‘, without re6 gard to the number of employees covered

7 by such plans.’’.

8 (5) Section 4203(d) of OBRA–1990 is amended

9 by striking ‘‘this subsection’’ and inserting ‘‘this sec10 tion’’.

11 (6) Except as provided in paragraph (2), the

12 amendments made by this subsection shall be effec13 tive as if included in the enactment of OBRA–1990

14 and shall be executed before the amendments made

15 by subsections (a) through (d) of this section.

16 (i) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as otherwise pro18 vided in this section, the amendments made by this

19 section shall take effect on the date of the enactment

20 of this Act.

21 (2) ESRD AND UNIFORM SIZE RULES.—The

22 amendments made by subsections (c) and (d) apply

23 to items and services furnished on or after January

24 1, 1994.
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1 SEC. 5074. EXTENSION OF SELF-REFERRAL BAN TO ADDI2 TIONAL SPECIFIED SERVICES.

3 (a) EXTENSION TO DESIGNATED HEALTH SERV4 ICES.—

5 (1) IN GENERAL.—Section 1877 (42 U.S.C.

6 1395nn) is amended—

7 (A) by striking ‘‘clinical laboratory serv8 ices’’ and ‘‘CLINICAL LABORATORY SERVICES’’

9 and inserting ‘‘designated health services’’ and

10 ‘‘DESIGNATED HEALTH SERVICES’’, respectively,

11 each place either appears in subsections (a)(1),

12 (b)(2)(A)(ii), (b)(4), (d)(1), (d)(2), and (d)(3);

13 and

14 (B) by adding at the end the following new

15 subsection:

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

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

18 ‘‘(1) clinical laboratory services;

19 ‘‘(2) physical or occupational therapy services;

20 ‘‘(3) radiology or other diagnostic services;

21 ‘‘(4) radiation therapy services;

22 ‘‘(5) the furnishing of durable medical equip23 ment;

24 ‘‘(6) the furnishing of parenteral and enteral

25 nutrition nutrients, supplies, and equipment;

26 ‘‘(7) home health services; and
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1 ‘‘(8) home infusion therapy services.’’.

2 (2) CONFORMING AMENDMENTS.—Section 1877

3 is further amended—

4 (A) in subsection (g)(1), by striking ‘‘clini5 cal laboratory service’’ and inserting ‘‘des6 ignated health service’’, and

7 (B) in subsection (h)(7)(B), by striking

8 ‘‘clinical laboratory service’’ and inserting ‘‘des9 ignated health service’’.

10 (b) MULTIPLE LOCATIONS FOR GROUP PRAC11 TICES.—Section 1877(b)(2)(A)(ii)(II) (42 U.S.C.

12 1395nn(b)(2)(A)(ii)(II)) is amended by striking ‘‘central13 ized provision’’ and inserting ‘‘provision of some or all’’.

14 (c) TREATMENT OF COMPENSATION ARRANGE15 MENTS.—

16 (1) RENTAL OF OFFICE SPACE AND EQUIP17 MENT.—Paragraph (1) of section 1877(e) (42

18 U.S.C. 1395nn(e)) is amended to read as follows:

19 ‘‘(1) RENTAL OF OFFICE SPACE; RENTAL OF

20 EQUIPMENT.—

21 ‘‘(A) OFFICE SPACE.—Payments made by

22 a lessee to a lessor for the use of premises if—

23 ‘‘(i) the lease is set out in writing,

24 signed by the parties, and specifies the

25 premises covered by the lease,
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1 ‘‘(ii) the aggregate space rented or

2 leased is reasonable and necessary for the

3 legitimate business purposes of the lease or

4 rental and is used exclusively by the lessee

5 when being used by the lessee,

6 ‘‘(iii) the lease provides for a term of

7 rental or lease for at least one year,

8 ‘‘(iv) the rental charges over the term

9 of the lease are set in advance, are consist10 ent with fair market value, and are not de11 termined in a manner that takes into ac12 count the volume or value of any referrals

13 or other business generated between the

14 parties,

15 ‘‘(v) the lease would be commercially

16 reasonable even if no referrals were made

17 between the parties,

18 ‘‘(vi) the lease covers all of the prem19 ises leased between the parties for the pe20 riod of the lease, and

21 ‘‘(vii) the compensation arrangement

22 meets such other requirements as the Sec23 retary may impose by regulation as needed

24 to protect against program or patient

25 abuse.
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1 ‘‘(B) EQUIPMENT.—Payments made by a

2 lessee of equipment to the lessor of the equip3 ment for the use of the equipment if—

4 ‘‘(i) the lease is set out in writing,

5 signed by the parties, and specifies the

6 equipment covered by the lease,

7 ‘‘(ii) the equipment rented or leased is

8 reasonable and necessary for the legitimate

9 business purposes of the lease or rental

10 and is used exclusively by the lessee when

11 being used by the lessee,

12 ‘‘(iii) the lease provides for a term of

13 rental or lease of at least one year,

14 ‘‘(iv) the rental charges over the term

15 of the lease are set in advance, are consist16 ent with fair market value, and are not de17 termined in a manner that takes into ac18 count the volume or value of any referrals

19 or other business generated between the

20 parties,

21 ‘‘(v) the lease would be commercially

22 reasonable even if no referrals were made

23 between the parties,
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1 ‘‘(vi) the lease covers all of the equip2 ment leased between the parties for the pe3 riod of the lease, and

4 ‘‘(vii) the compensation arrangement

5 meets such other requirements as the Sec6 retary may impose by regulation as needed

7 to protect against program or patient

8 abuse.’’.

9 (2) BONA FIDE EMPLOYMENT RELATION10 SHIPS.—Section 1877(e)(2) (42 U.S.C.

11 1395nn(e)(2)) is amended—

12 (A) by striking ‘‘AND SERVICE’’ and ‘‘WITH

13 HOSPITALS’’;

14 (B) by striking ‘‘An arrangement’’ and all

15 that follows through ‘‘if’’ and inserting ‘‘Any

16 amount paid by an employer to a physician (or

17 immediate family member) who has a bona fide

18 employment relationship with the employer for

19 the provision of services if’’;

20 (C) in subparagraphs (A), (B), and (D), by

21 striking ‘‘arrangement’’ and inserting ‘‘employ22 ment’’;

23 (D) in subparagraph (C), by striking ‘‘to

24 the hospital’’; and

25 (E) by adding at the end the following:
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1 ‘‘Subparagraph (B)(ii) shall not be construed as pro2 hibiting the payment of remuneration in the form of

3 shares of overall profits or in the form of a produc4 tivity bonus based on services performed personally

5 by the physician or member, if the amount of the re6 muneration is not determined in a manner that

7 takes into account directly the volume or value of

8 any referrals by the referring physician.’’.

9 (3) PERSONAL SERVICE ARRANGEMENTS.—Sec10 tion 1877(e) is further amended by adding at the

11 end the following new paragraph:

12 ‘‘(7) PERSONAL SERVICE ARRANGEMENTS.—Re13 muneration from an entity under an arrangement

14 if—

15 ‘‘(A) the arrangement is set out in writing,

16 signed by the parties, and specifies the services

17 covered by the arrangement,

18 ‘‘(B) the arrangement covers all of the

19 services to be provided,

20 ‘‘(C) the aggregate services contracted for

21 do not exceed those that are reasonable and

22 necessary for the legitimate business purposes

23 of the arrangement,

24 ‘‘(D) the term of the arrangement is for at

25 least one year,
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1 ‘‘(E) the compensation to be paid over the

2 term of the arrangement is set in advance, does

3 not exceed fair market value, and is not deter4 mined in a manner that takes into account the

5 volume or value of any referrals or other busi6 ness generated between the parties,

7 ‘‘(F) the services to be performed under

8 the arrangement do not involve the counseling

9 or promotion of a business arrangement of

10 other activity that violates any State or Federal

11 law, and

12 ‘‘(G) the arrangement meets such other re13 quirements as the Secretary may impose by reg14 ulation as needed to protect against program or

15 patient abuse.’’.

16 (4) ADDITIONAL EXCEPTIONS.—Section

17 1877(e) is further amended by adding at the end the

18 following new paragraphs:

19 ‘‘(8) PAYMENTS BY A PHYSICIAN FOR ITEMS

20 AND SERVICES.—Payments made by a physician—

21 ‘‘(A) to a laboratory in exchange for the

22 provision of clinical laboratory services, or

23 ‘‘(B) to an entity as compensation for

24 other items or services if the items or services
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1 are furnished at a price that is consistent with

2 fair market value.

3 ‘‘(9) PAYMENTS FOR PATHOLOGY SERVICES OF

4 A GROUP PRACTICE.—Payments made to a group

5 practice for pathology services under an agreement

6 if—

7 ‘‘(A) the agreement is set out in writing

8 and specifies the services to be provided by the

9 parties and the compensation for services pro10 vided under the agreement,

11 ‘‘(B) the compensation paid over the term

12 of the agreement is consistent with fair market

13 value and is not determined in a manner that

14 takes into account the volume or value of any

15 referrals or other business generated between

16 the parties,

17 ‘‘(C) the compensation is provided pursu18 ant to an agreement which would be commer19 cially reasonable even if no referrals were made

20 to the entity, and

21 ‘‘(D) the compensation arrangement be22 tween the parties meets such other require23 ments as the Secretary may impose by regula24 tion as needed to protect against program or

25 patient abuse.’’.
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1 (4) REFERRING PHYSICIANS.—Section

2 1877(h)(7)(C) (42 U.S.C. 1395nn(h)(7)(C)) is

3 amended—

4 (A) by inserting ‘‘a request by a radiologist

5 for diagnostic radiology services, and a request

6 by a radiation oncologist for radiation therapy,’’

7 after ‘‘examination services,’’, and

8 (B) by inserting ‘‘, radiologist, or radiation

9 oncologist’’ after ‘‘pathologist’’ the second place

10 it appears.

11 (d) TREATMENT OF GROUP PRACTICES.—

12 (1) USE OF BILLING NUMBERS, ETC.—Section

13 1877 is amended—

14 (A) in subsection (b)(2)(B), by inserting

15 ‘‘under a billing number assigned to the group

16 practice’’ after ‘‘member’’,

17 (B) in subsection (h)(4)(B), by inserting

18 ‘‘and under a billing number assigned to the

19 group’’ after ‘‘in the name of the group’’, and

20 (C) in subsection (h)(4)(C), by striking

21 ‘‘by members of the group’’.

22 (2) TREATMENT OF SERVICES UNDER AR23 RANGEMENTS BETWEEN HOSPITALS AND GROUP

24 PRACTICES.—
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1 (A) IN GENERAL.—Section 1877(h)(4) (42

2 U.S.C. 1395nn(h)(4)) is amended—

3 (i) in subparagraph (B) (as amended

4 by paragraph (1)(B)), by inserting ‘‘(or

5 are billed in the name of a hospital for

6 which the group provides designated health

7 services pursuant to an arrangement that

8 meets the requirements of subparagraph

9 (B))’’ after ‘‘assigned to the group’’;

10 (ii) by redesignating subparagraphs

11 (A) through (D) as clauses (i) through

12 (iv), respectively;

13 (iii) by inserting ‘‘(A)’’ after ‘‘.—’’;

14 and

15 (iv) by adding at the end the following

16 new subparagraph:

17 ‘‘(B) The requirements of this subparagraph,

18 with respect to an arrangement for designated

19 health services provided by the group and billed in

20 the name of a hospital, are that—

21 ‘‘(i) with respect to services provided to an

22 inpatient of the hospital, the arrangement is

23 pursuant to the provision of inpatient hospital

24 services under section 1861(b)(3);
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1 ‘‘(ii) the arrangement began before Decem2 ber 19, 1989, and has continued in effect with3 out interruption since such date;

4 ‘‘(iii) the group provides substantially all of

5 the designated health services to the hospital’s

6 patients;

7 ‘‘(iv) the arrangement is pursuant to an

8 agreement that is set out in writing and that

9 specifies the services to be provided by the par10 ties and the compensation for services provided

11 under the agreement;

12 ‘‘(v) the compensation paid over the term

13 of the agreement is consistent with fair market

14 value and the compensation per unit of services

15 is fixed in advance and is not determined in a

16 manner that takes into account the volume or

17 value of any referrals or other business gen18 erated between the parties;

19 ‘‘(vi) the compensation is provided pursu20 ant to an agreement which would be commer21 cially reasonable even if no referrals were made

22 to the entity; and

23 ‘‘(vii) the arrangement between the parties

24 meets such other requirements as the Secretary
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1 may impose by regulation as needed to protect

2 against program or patient abuse.’’.

3 (B) CONFORMING AMENDMENT.—Section

4 1877(b)(2)(B) (42 U.S.C. 1395nn(b)(2)(B)) is

5 amended by inserting ‘‘(or by a hospital for

6 which such a group practice provides designated

7 health services pursuant to an arrangement

8 that meets the requirements of subsection

9 (h)(4)(B))’’ after ‘‘by a group practice of which

10 such physician is a member’’.

11 (3) TREATMENT OF CERTAIN FACULTY PRAC12 TICE PLANS.—The last sentence of section

13 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)), as re14 designated by paragraph (1)(A), is amended by in15 serting ‘‘, institution of higher education, or medical

16 school’’ after ‘‘hospital’’.

17 (e) EXPANDING RURAL PROVIDER EXCEPTION TO

18 COVER COMPENSATION ARRANGEMENTS.—

19 (1) IN GENERAL.—Section 1877(b) (42 U.S.C.

20 1395nn(b)) is amended—

21 (A) by redesignating paragraph (5) as

22 paragraph (7), and

23 (B) by inserting after paragraph (4) the

24 following new paragraph:
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1 ‘‘(5) RURAL PROVIDERS.—In the case of des2 ignated services if—

3 ‘‘(A) the entity furnishing the services is in

4 a rural area (as defined in section

5 1886(d)(2)(D)), and

6 ‘‘(B) substantially all of the services fur7 nished by the entity to individuals entitled to

8 benefits under this title are furnished to such

9 individuals who reside in such a rural area.’’.

10 (2) CONFORMING AMENDMENTS.—Section

11 1877(d) (42 U.S.C. 1395nn(d)) is amended—

12 (A) by striking paragraph (2), and

13 (B) by redesignating paragraph (3) as

14 paragraph (2).

15 (f) EXCEPTION FOR SHARED FACILITY LABORATORY

16 SERVICES.—

17 (1) IN GENERAL.—Section 1877 is amended—

18 (A) in subsection (b), as amended by sub19 section (e)(1), by inserting after paragraph (5)

20 the following new paragraph:

21 ‘‘(6) SHARED FACILITY LABORATORY SERV22 ICES.—

23 ‘‘(A) IN GENERAL.—In the case of shared

24 facility laboratory services of a shared facility—

25 ‘‘(i) that are furnished—
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1 ‘‘(I) personally by the referring

2 physician who is a shared facility phy3 sician or personally by an individual

4 supervised by such a physician or by

5 another shared facility physician and

6 employed under the shared facility ar7 rangement,

8 ‘‘(II) by a shared facility in a

9 building in which the referring physi10 cian furnishes physician’s services un11 related to the furnishing of shared fa12 cility laboratory services, and

13 ‘‘(III) to a patient of a shared fa14 cility physician; and

15 ‘‘(ii) that are billed by the referring

16 physician or by an entity that is wholly

17 owned by such physician.

18 ‘‘(B) LIMITATION.—The exception under

19 this paragraph shall only apply to a shared fa20 cility only if the facility and the shared facility

21 arrangement were established as of June 26,

22 1992.’’; and

23 (B) in subsection (h), by adding at the end

24 the following new paragraph:
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1 ‘‘(8) SHARED FACILITY RELATED DEFINI2 TIONS.—

3 ‘‘(A) SHARED FACILITY LABORATORY

4 SERVICES.—The term ‘shared facility laboratory

5 services’ means, with respect to a shared facil6 ity, clinical laboratory services furnished by the

7 facility to patients of shared facility physicians.

8 ‘‘(B) SHARED FACILITY.—The term

9 ‘shared facility’ means an entity that furnishes

10 shared facility laboratory services under a

11 shared facility arrangement.

12 ‘‘(C) SHARED FACILITY PHYSICIAN.—The

13 term ‘shared facility physician’ means, with re14 spect to a shared facility, a physician who has

15 a financial relationship under a shared facility

16 arrangement with the facility.

17 ‘‘(D) SHARED FACILITY ARRANGEMENT.—

18 The term ‘shared facility arrangement’ means,

19 with respect to the provision of shared facility

20 laboratory services in a building, a financial ar21 rangement—

22 ‘‘(i) which is only between physicians

23 who are providing services (unrelated to

24 shared facility laboratory services) in the

25 same building,
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1 ‘‘(ii) in which the overhead expenses

2 of the facility are shared, in accordance

3 with methods previously determined by the

4 physicians in the arrangement, among the

5 physicians in the arrangement, and

6 ‘‘(iii) which, in the case of a corpora7 tion, is wholly owned and controlled by

8 shared facility physicians.’’.

9 (2) GAO STUDY OF SHARED FACILITY AR10 RANGEMENTS.—

11 (A) IN GENERAL.—The Comptroller Gen12 eral shall analyze the effect on the utilization of

13 health services of shared facility arrangements

14 for which an exception is provided under the

15 amendments made by paragraph (1). The anal16 ysis shall include a review of the effect of the

17 limitation, described in section 1877(b)(6)(B) of

18 the Social Security Act (as added by paragraph

19 (1)), with respect to such exception and on the

20 availability of services (including hematology

21 services).

22 (B) REPORT.—Not later than January 1,

23 1995, the Comptroller General shall submit a

24 report to Congress on the analysis conducted

25 under subparagraph (A). The report shall in-
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1 clude recommendations with respect to chang2 ing the limitation.

3 (g) EXEMPTION OF COMPENSATION ARRANGEMENTS

4 INVOLVING CERTAIN TYPES OF REMUNERATION.—Sec5 tion 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is amended—

6 (1) by striking subparagraph (B);

7 (2) in subparagraph (A), by inserting before the

8 period the following: ‘‘(other than an arrangement

9 involving only remuneration described in subpara10 graph (B))’’; and

11 (3) by adding at the end the following new sub12 paragraph:

13 ‘‘(B) Remuneration described in this subpara14 graph is any remuneration consisting of any of the

15 following:

16 ‘‘(i) The forgiveness of amounts owed for

17 inaccurate tests or procedures, mistakenly per18 formed tests or procedures, or the correction of

19 minor billing errors.

20 ‘‘(ii) The provision of items, devices, or

21 supplies that are used solely to—

22 ‘‘(I) collect, transport, process, or

23 store specimens for the entity providing

24 the item, device, or supply, or
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1 ‘‘(II) communicate the results of tests

2 or procedures for such entity.’’.

3 (h) EXCEPTION FOR PUBLICLY-TRADED SECURI4 TIES.—Section 1877(c)(2) (42 U.S.C. 1395nn(d)(2)) is

5 amended by striking ‘‘total assets exceeding

6 $100,000,000’’ and inserting ‘‘stockholder equity exceed7 ing $75,000,000’’.

8 (i) MISCELLANEOUS AND TECHNICAL CORREC9 TIONS.—Section 1877 (42 U.S.C. 1395nn) is amended—

10 (1) in subsection (b)(2)(A)(i), in subparagraph

11 (A)(i), by striking ‘‘who are employed by such physi12 cian or group practice and who are personally’’ and

13 inserting ‘‘who are directly’’;

14 (2) in the fourth sentence of subsection (f)—

15 (A) by striking ‘‘provided’’ and inserting

16 ‘‘furnished’’, and

17 (B) by striking ‘‘provides’’ and inserting

18 ‘‘furnish’’;

19 (3) in the fifth sentence of subsection (f)—

20 (A) by striking ‘‘providing’’ each place it

21 appears and inserting ‘‘furnishing’’,

22 (B) by striking ‘‘with respect to the provid23 ers’’ and inserting ‘‘with respect to the enti24 ties’’, and
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1 (C) by striking ‘‘diagnostic imaging serv2 ices of any type’’ and inserting ‘‘magnetic reso3 nance imaging, computerized axial tomography

4 scans, and ultrasound services’’; and

5 (4) in subsection (a)(2)(B), by striking ‘‘sub6 section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.

7 (j) EFFECTIVE DATES.—

8 (1) The amendments made by subsection (a)

9 apply with respect to a referral by a physician for

10 designated health services (as described in section

11 1877(i) of the Social Security Act) made after De12 cember 31, 1994.

13 (2) The amendments made by this section

14 (other than subsection (a)) shall apply to referrals

15 made on or after January 1, 1992.

16 SEC. 5075. REDUCTION IN PAYMENT FOR ERYTHRO17 POIETIN.

18 (a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42

19 U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—

20 (1) by striking ‘‘1991’’ and inserting ‘‘1994’’,

21 and

22 (2) by striking ‘‘$11’’ and inserting ‘‘$10’’.

23 (b) EFFECTIVE DATE.—The amendments made by

24 subsection (a) apply to erythropoietin furnished after

25 1993.
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1 SEC. 5076. MEDICARE HOSPITAL AGREEMENTS WITH

2 ORGAN PROCUREMENT ORGANIZATIONS.

3 (a) IN GENERAL.—Section 1138(a)(1) (42 U.S.C.

4 1320b–8(a)(1)) is amended—

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (A),

7 (2) by striking the period at the end of sub8 paragraph (B) and inserting ‘‘; and’’, and

9 (3) by adding at the end the following new sub10 paragraph:

11 ‘‘(C) in the case of a hospital or rural primary

12 care hospital that has in effect an agreement (de13 scribed in section 371(b)(3)(A) of the Public Health

14 Service Act) with an organ procurement organiza15 tion, the agreement is with such organization for the

16 service area in which the hospital is located (as es17 tablished under such section).’’.

18 (b) EFFECTIVE DATE.—The amendments made by

19 subsection (a) shall apply to hospitals participating in the

20 programs under titles XVIII and XIX of the Social Secu21 rity Act as of January 1, 1994.

22 SEC. 5077. EXTENSION OF WAIVER FOR WATTS HEALTH

23 FOUNDATION.

24 Section 9312(c)(3)(D) of OBRA–1986, as added by

25 section 4018(d) of OBRA–1987 and as amended by sec-
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1 tion 6212(a)(1) of OBRA–1989, is amended by striking

2 ‘‘1994’’ and inserting ‘‘1996’’.

3 SEC. 5078. IMPROVED OUTREACH FOR QUALIFIED MEDI4 CARE BENEFICIARIES.

5 The Secretary of Health and Human Services shall

6 establish and implement a method for obtaining informa7 tion from newly eligible medicare beneficiaries that may

8 be used to determine whether such beneficiaries may be

9 eligible for medical assistance for medicare cost-sharing

10 under State medicaid plans as qualified medicare bene11 ficiaries, and for transmitting such information to the

12 State in which such a beneficiary resides.

13 SEC. 5079. SOCIAL HEALTH MAINTENANCE ORGANIZA14 TIONS.

15 (a) EXTENSION OF CURRENT WAIVERS.—Section

16 4018(b) of OBRA–1987, as amended by section

17 4207(b)(4) of OBRA–1990, is amended—

18 (1) in paragraph (1) by striking ‘‘December 31,

19 1995’’ and inserting ‘‘December 31, 1997’’; and

20 (2) in paragraph (4) by striking ‘‘March 31,

21 1996’’ and inserting ‘‘March 31, 1998’’.

22 (b) EXPANSION OF DEMONSTRATIONS.—Section

23 2355 of the Deficit Reduction Act of 1984, as amended

24 by section 4207(b)(4)(B) of OBRA–1990, is amended—
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1 (1) in the last sentence of subsection (a) by

2 striking ‘‘12 months’’ and inserting ‘‘36 months’’;

3 and

4 (2) in subsection (b)(1)(B)—

5 (A) by striking ‘‘or’’ at the end of clause

6 (iii), and

7 (B) by redesignating clause (iv) as clause

8 (v) and inserting after clause (iii) the following

9 new clause:

10 ‘‘(iv) integrating acute and chronic

11 care management for patients with end12 stage renal disease through expanded com13 munity care case management services

14 (and for purposes of a demonstration

15 project conducted under this clause, any

16 requirement under a waiver granted under

17 this section that a project disenroll individ18 uals who develop end-stage renal disease

19 shall not apply); or’’.

20 (c) EXPANSION OF NUMBER OF MEMBERS PER

21 SITE.—The Secretary of Health and Human Services may

22 not impose a limit of less than 12,000 on the number of

23 individuals that may participate in a project conducted

24 under section 2355 of the Deficit Reduction Act of 1984.
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1 (d) MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.—

3 (1) The section following section 4206 of

4 OBRA–1990 is amended by striking ‘‘SEC. 4027.’’

5 and inserting ‘‘SEC. 4207.’’, and in this subtitle is

6 referred to as section 4207 of OBRA–1990.

7 (2) Section 2355(b)(1)(B) of the Deficit Reduc8 tion Act of 1984, as amended by section

9 4207(b)(4)(B)(ii) of OBRA–1990, is amended—

10 (A) by striking ‘‘12907(c)(4)(A)’’ and in11 serting ‘‘4207(b)(4)(B)(i)’’, and

12 (B) by striking ‘‘feasibilitly’’ and inserting

13 ‘‘feasibility’’.

14 (3) Section 4207(b)(4)(B)(iii)(III) of OBRA–

15 1990 is amended by striking the period at the end

16 and inserting a semicolon.

17 (4) Subsections (c)(3) and (e) of section 2355

18 of the Deficit Reduction Act of 1984, as amended by

19 section 4207(b)(4)(B) of OBRA–1990, are each

20 amended by striking ‘‘12907(c)(4)(A)’’ each place it

21 appears and inserting ‘‘4207(b)(4)(B)’’.

22 (5) Section 4207(c)(2) of OBRA–1990 is

23 amended by striking ‘‘the Committee on Ways and

24 Means’’ each place it appears and inserting ‘‘the
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1 Committees on Ways and Means and Energy and

2 Commerce’’.

3 (6) Section 4207(d) of OBRA–1990 is amended

4 by redesignating the second paragraph (3) (relating

5 to effective date) as paragraph (4).

6 (7) Section 4207(i)(2) of OBRA–1990 is

7 amended—

8 (A) by striking the period at the end of

9 clause (iii) and inserting a semicolon, and

10 (B) in clause (v), by striking ‘‘residents’’

11 and inserting ‘‘patients’’.

12 (8) Section 4207(j) of OBRA–1990 is amended

13 by striking ‘‘title’’ each place it appears and insert14 ing ‘‘subtitle’’.

15 (e) EFFECTIVE DATE.—The amendments made by

16 this section shall take effect as if included in the enact17 ment of OBRA–90.

18 SEC. 5080. PEER REVIEW ORGANIZATIONS.

19 (a) REPEAL OF PRO PRECERTIFICATION REQUIRE20 MENT FOR CERTAIN SURGICAL PROCEDURES.—

21 (1) IN GENERAL.—Section 1164 (42 U.S.C.

22 1320c–13) is repealed.

23 (2) CONFORMING AMENDMENTS.—

24 (A) Section 1154 (42 U.S.C. 1320c–3) is

25 amended—
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1 (i) in subsection (a), by striking para2 graph (12), and

3 (ii) in subsection (d), by striking

4 ‘‘(and except as provided in section

5 1164)’’.

6 (B) Section 1833 (42 U.S.C. 1395l) is

7 amended—

8 (i) in subsection (a)(1)(D)(i), by strik9 ing ‘‘, or for tests furnished in connection

10 with obtaining a second opinion required

11 under section 1164(c)(2) (or a third opin12 ion, if the second opinion was in disagree13 ment with the first opinion)’’;

14 (ii) in subsection (a)(1), by striking

15 clause (G);

16 (iii) in subsection (a)(2)(A), by strik17 ing ‘‘to items and services (other than clin18 ical diagnostic laboratory tests) furnished

19 in connection with obtaining a second opin20 ion required under section 1164(c)(2) (or a

21 third opinion, if the second opinion was in

22 disagreement with the first opinion),’’;

23 (iv) in subsection (a)(2)(D)(i)—

24 (I) by striking ‘‘related basis,’’

25 and inserting ‘‘related basis or’’, and
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1 (II) by striking ‘‘, or for tests

2 furnished in connection with obtaining

3 a second opinion required under sec4 tion 1164(c)(2) (or a third opinion, if

5 the second opinion was in disagree6 ment with the first opinion))’’;

7 (v) in subsection (a)(3), by striking

8 ‘‘and for items and services furnished in

9 connection with obtaining a second opinion

10 required under section 1164(c)(2), or a

11 third opinion, if the second opinion was in

12 disagreement with the first opinion)’’; and

13 (vi) in the first sentence of subsection

14 (b), by striking ‘‘(4)’’ and all that follow

15 through ‘‘and (5)’’ and inserting ‘‘and

16 (4)’’.

17 (C) Section 1834(g)(1)(B) (42 U.S.C.

18 1395m(g)(1)(B)) is amended by striking ‘‘and

19 for items and services furnished in connection

20 with obtaining a second opinion required under

21 section 1164(c)(2), or a third opinion, if the

22 second opinion was in disagreement with the

23 first opinion)’’.

24 (D) Section 1862(a) (42 U.S.C. 1395y(a))

25 is amended—
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1 (i) by adding ‘‘or’’ at the end of para2 graph (14),

3 (ii) by striking ‘‘; or’’ at the end of

4 paragraph (15) and inserting a period, and

5 (iii) by striking paragraph (16).

6 (E) The third sentence of section

7 1866(a)(2)(A) (42 U.S.C. 1395w(a)(2)(A)) is

8 amended by striking ‘‘, with respect to items

9 and services furnished in connection with ob10 taining a second opinion required under section

11 1164(c)(2) (or a third opinion, if the second

12 opinion was in disagreement with the first opin13 ion),’’.

14 (3) EFFECTIVE DATE.—The amendments made

15 by this subsection shall apply to services provided on

16 or after the date of the enactment of this Act.

17 (b) MISCELLANEOUS AND TECHNICAL CORREC18 TIONS.—(1) The third sentence of section 1156(b)(1) (42

19 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘whehter’’

20 and inserting ‘‘whether’’.

21 (2)(A) Subparagraph (B) of section 1154(a)(9) (42

22 U.S.C. 1320c–3(a)(9)) is amended to read as follows:

23 ‘‘(B) If the organization finds, after reasonable

24 notice and opportunity for discussion with the physi25 cian or practitioner concerned, that the physician or
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1 practitioner has furnished services in violation of

2 section 1156(a), the organization shall notify the

3 State board or boards responsible for the licensing

4 or disciplining of the physician or practitioner of its

5 finding and of any action taken as a result of the

6 finding.’’.

7 (B) Subparagraph (D) of section 1160(b)(1) (42

8 U.S.C. 1320c–9(b)(1)) is amended to read as follows:

9 ‘‘(D) to provide notice in accordance with

10 section 1154(a)(9)(B);’’.

11 (3) Section 4205(d)(2)(B) of OBRA–1990 is amend12 ed by striking ‘‘amendments’’ and inserting ‘‘amend13 ment’’.

14 (4) Section 1160(d) (42 U.S.C. 1320c–9(d)) is

15 amended by striking ‘‘subpena’’ and inserting ‘‘subpoena’’.

16 (5) Section 4205(e)(2) of OBRA–1990 is amended

17 by striking ‘‘amendments’’ and inserting ‘‘amendment’’

18 and by striking ‘‘all’’.

19 (6)(A) Except as provided in subparagraph (B), the

20 amendments made by this subsection shall take effect as

21 if included in the enactment of OBRA–1990.

22 (B) The amendments made by paragraph (2) (relat23 ing to the requirement on reporting of information to

24 State boards) shall take effect on the date of the enact25 ment of this Act.
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1 SEC. 5081. HOSPICE INFORMATION TO HOME HEALTH

2 BENEFICIARIES.

3 (a) IN GENERAL.—Section 1891(a)(1) (42 U.S.C.

4 1395bbb(a)(1)) is amended by adding at the end the fol5 lowing new subparagraph:

6 ‘‘(H) The right, in the case of a resident

7 who is entitled to benefits under this title, to be

8 fully informed orally and in writing (at the time

9 of coming under the care of the agency) of the

10 entitlement of individuals to hospice care under

11 section 1812(a)(4) (unless there is no hospice

12 program providing hospice care for which pay13 ment may be made under this title within the

14 geographic area of the facility and it is not the

15 common practice of the agency to refer patients

16 to hospice programs located outside such geo17 graphic area).’’.

18 (b) EFFECTIVE DATE.—The amendment made by

19 subsection (a) shall apply to services furnished on or after

20 the first day of the first month beginning more than one

21 year after the date of the enactment of this Act.

22 SEC. 5082. HEALTH MAINTENANCE ORGANIZATIONS.

23 (a) ADJUSTMENT IN MEDICARE CAPITATION PAY24 MENTS TO ACCOUNT FOR REGIONAL VARIATIONS IN AP25 PLICATION OF SECONDARY PAYOR PROVISIONS.—
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1 (1) IN GENERAL.—Section 1876(a)(4) (42

2 U.S.C. 1395mm(a)(4)) is amended by adding at the

3 end the following new sentence: ‘‘In establishing the

4 adjusted average per capita cost for a geographic

5 area, the Secretary shall take into account the dif6 ferences between the proportion of individuals in the

7 area with respect to whom there is a group health

8 plan that is a primary payor (within the meaning of

9 section 1862(b)(2)(A)) compared to the proportion

10 of all such individuals with respect to whom there is

11 such a group health plan.’’.

12 (2) EFFECTIVE DATE.—The amendment made

13 by paragraph (1) shall apply to contracts entered

14 into for years beginning with 1994.

15 (b) REVISIONS IN THE PAYMENT METHODOLOGY

16 FOR RISK CONTRACTORS.—Section 4204(b) of OBRA–

17 1990 is amended to read as follows:

18 ‘‘(b) REVISIONS IN THE PAYMENT METHODOLOGY

19 FOR RISK CONTRACTORS.—(1)(A) Not later than January

20 1, 1995, the Secretary of Health and Human Services (in

21 this subsection referred to as the ‘‘Secretary’’) shall sub22 mit a proposal to the Congress that provides for revisions

23 to the payment method to be applied in years beginning

24 with 1996 for organizations with a risk-sharing contract

25 under section 1876(g) of the Social Security Act.
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1 ‘‘(B) In proposing the revisions required under sub2 paragraph (A) the Secretary shall consider—

3 ‘‘(i) the difference in costs associated with med4 icare beneficiaries with differing health status and

5 demographic characteristics; and

6 ‘‘(ii) the effects of using alternative geographic

7 classifications on the determinations of costs associ8 ated with beneficiaries residing in different areas.

9 ‘‘(2) Not later than 3 months after the date of sub10 mittal of the proposal made pursuant to paragraph (1),

11 the Comptroller General shall review the proposal and

12 shall report to Congress on the appropriateness of the pro13 posed modifications.’’.

14 (c) MISCELLANEOUS AND TECHNICAL CORREC15 TIONS.—(1) Section 1876(a)(3) (42 U.S.C.

16 1395mm(a)(3)) is amended by striking ‘‘subsection

17 (c)(7)’’ and inserting ‘‘subsections (c)(2)(B)(ii) and

18 (c)(7)’’.

19 (2) Section 4204(c)(3) of OBRA–1990 is amended

20 by striking ‘‘for 1991’’ and inserting ‘‘for years beginning

21 with 1991’’.

22 (3) Section 4204(d)(2) of OBRA–1990 is amended

23 by striking ‘‘amendment’’ and inserting ‘‘amendments’’.
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1 (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C.

2 1395mm(a)(1)(E)(ii)(I)) is amended by striking the

3 comma after ‘‘contributed to’’.

4 (5) Section 4204(e)(2) of OBRA–1990 is amended

5 by striking ‘‘(which has a risk-sharing contract under sec6 tion 1876 of the Social Security Act)’’.

7 (6) Section 4204(f)(4) of OBRA–1990 is amended by

8 striking ‘‘final’’.

9 (7) Section 1862(b)(3)(C) (42 U.S.C.

10 1395y(b)(3)(C)) is amended—

11 (A) in the heading, by striking ‘‘PLAN’’ and in12 serting ‘‘PLAN OR A LARGE GROUP HEALTH PLAN’’;

13 (B) by striking ‘‘group health plan’’ and insert14 ing ‘‘group health plan or a large group health

15 plan’’;

16 (C) by striking ‘‘, unless such incentive is also

17 offered to all individuals who are eligible for cov18 erage under the plan’’; and

19 (D) by striking ‘‘the first sentence of subsection

20 (a) and other than subsection (b)’’ and inserting

21 ‘‘subsections (a) and (b)’’.

22 (8) The amendments made by this subsection shall

23 take effect as if included in the enactment of OBRA–1990.
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1 SEC. 5083. MISCELLANEOUS AND TECHNICAL CORREC2 TIONS.

3 (a) SURVEY AND CERTIFICATION REQUIREMENTS.—

4 (1) Section 1864 (42 U.S.C. 1395aa) is amended—

5 (A) in subsection (e), by striking ‘‘title’’ and in6 serting ‘‘title (other than any fee relating to section

7 353 of the Public Health Service Act)’’; and

8 (B) in the first sentence of subsection (a), by

9 striking ‘‘1861(s) or’’ and all that follows through

10 ‘‘Service Act,’’ and inserting ‘‘1861(s),’’.

11 (2) An agreement made by the Secretary of Health

12 and Human Services with a State under section 1864(a)

13 of the Social Security Act may include an agreement that

14 the services of the State health agency or other appro15 priate State agency (or the appropriate local agencies) will

16 be utilized by the Secretary for the purpose of determining

17 whether a laboratory meets the requirements of section

18 353 of the Public Health Service Act.

19 (b) OTHER MISCELLANEOUS AND TECHNICAL PRO20 VISIONS.—(1) Section 1833 (42 U.S.C. 1395l) is amended

21 by redesignating the subsection (r) added by section

22 4206(b)(2) of OBRA–1990 as subsection (s).

23 (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is

24 amended by striking ‘‘1833(r)’’ and inserting ‘‘1833(s)’’.

25 (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is

26 amended by moving subparagraph (O), as redesignated by
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1 section 5070(f)(7)(B)(iii)(II) of this subtitle, two ems to

2 the left.

3 (4) Section 1881(b)(1)(C) (42 U.S.C.

4 1395rr(b)(1)(C)) is amended by striking ‘‘1861(s)(2)(Q)’’

5 and inserting ‘‘1861(s)(2)(P)’’.

6 (5) Section 4201(d)(2) of OBRA–1990 is amended

7 by striking ‘‘(B) by striking’’, ‘‘(C) by striking’’, and ‘‘(3)

8 by adding’’ and inserting ‘‘(i) by striking’’, ‘‘(ii) by strik9 ing’’, and ‘‘(B) by adding’’, respectively.

10 (6)(A) Section 4207(a)(1) of OBRA–1990 is amend11 ed by adding closing quotation marks and a period after

12 ‘‘such review.’’.

13 (B) Section 4207(a)(4) of OBRA–1990 is amended

14 by striking ‘‘this subsection’’ and inserting ‘‘paragraphs

15 (2) and (3)’’.

16 (C) Section 4207(b)(1) of OBRA–1990 is amended

17 by striking ‘‘section 3(7)’’ and inserting ‘‘section

18 601(a)(1)’’.

19 (7) Section 4202 of OBRA–1990 is amended—

20 (A) in subsection (b)(1)(A), by striking ‘‘home

21 hemodialysis staff assistant’’ and inserting ‘‘quali22 fied home hemodialysis staff assistant (as described

23 in subsection (d))’’;
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1 (B) in subsection (b)(2)(B)(ii)(I), by striking

2 ‘‘(as adjusted to reflect differences in area wage lev3 els)’’;

4 (C) in subsection (c)(1)(A), by striking

5 ‘‘skilled’’; and

6 (D) in subsection (c)(1)(E), by striking

7 ‘‘(b)(4)’’ and inserting ‘‘(b)(2)’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall take effect as if included in the enact10 ment of OBRA–1990.

11 CHAPTER 3—PROVISIONS RELATING TO

12 MEDICARE SUPPLEMENTAL INSUR13 ANCE POLICIES

14 SEC. 5091. STANDARDS FOR MEDICARE SUPPLEMENTAL IN15 SURANCE POLICIES.

16 (a) SIMPLIFICATION OF MEDICARE SUPPLEMENTAL

17 POLICIES.—

18 (1) Section 4351 of OBRA–1990 is amended by

19 striking ‘‘(a) IN GENERAL.—’’.

20 (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is

21 amended—

22 (A) in paragraph (1)(A)—

23 (i) by striking ‘‘promulgates’’ and in24 serting ‘‘changes the revised NAIC Model
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1 Regulation (described in subsection (m)) to

2 incorporate’’,

3 (ii) by striking ‘‘(such limitations, lan4 guage, definitions, format, and standards

5 referred to collectively in this subsection as

6 ‘NAIC standards’)’’, and

7 (iii) by striking ‘‘included a reference

8 to the NAIC standards’’ and inserting

9 ‘‘were a reference to the revised NAIC

10 Model Regulation as changed under this

11 subparagraph (such changed regulation re12 ferred to in this section as the ‘1991 NAIC

13 Model Regulation’)’’;

14 (B) in paragraph (1)(B)—

15 (i) by striking ‘‘promulgate NAIC

16 standards’’ and inserting ‘‘make the

17 changes in the revised NAIC Model Regu18 lation’’,

19 (ii) by striking ‘‘limitations, language,

20 definitions, format, and standards de21 scribed in clauses (i) through (iv) of such

22 subparagraph (in this subsection referred

23 to collectively as ‘Federal standards’)’’ and

24 inserting ‘‘a regulation’’, and
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1 (iii) by striking ‘‘included a reference

2 to the Federal standards’’ and inserting

3 ‘‘were a reference to the revised NAIC

4 Model Regulation as changed by the Sec5 retary under this subparagraph (such

6 changed regulation referred to in this sec7 tion as the ‘1991 Federal Regulation’)’’;

8 (C) in paragraph (1)(C)(i), by striking

9 ‘‘NAIC standards or the Federal standards’’

10 and inserting ‘‘1991 NAIC Model Regulation or

11 1991 Federal Regulation’’;

12 (D) in paragraphs (1)(C)(ii)(I), (1)(E),

13 (2), and (9)(B), by striking ‘‘NAIC or Federal

14 standards’’ and inserting ‘‘1991 NAIC Model

15 Regulation or 1991 Federal Regulation’’;

16 (E) in paragraph (2)(C), by striking

17 ‘‘(5)(B)’’ and inserting ‘‘(4)(B)’’;

18 (F) in paragraph (4)(A)(i), by inserting

19 ‘‘or paragraph (6)’’ after ‘‘(B)’’;

20 (G) in paragraph (4), by striking ‘‘applica21 ble standards’’ each place it appears and insert22 ing ‘‘applicable 1991 NAIC Model Regulation

23 or 1991 Federal Regulation’’;

24 (H) in paragraph (6), by striking ‘‘in re25 gard to the limitation of benefits described in
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1 paragraph (4)’’ and inserting ‘‘described in

2 clauses (i) through (iii) of paragraph (1)(A)’’;

3 (I) in paragraph (7), by striking ‘‘policy4 holder’’ and inserting ‘‘policyholders’’;

5 (J) in paragraph (8), by striking ‘‘after the

6 effective date of the NAIC or Federal standards

7 with respect to the policy, in violation of the

8 previous requirements of this subsection’’ and

9 inserting ‘‘on and after the effective date speci10 fied in paragraph (1)(C) (but subject to para11 graph (10)), in violation of the applicable 1991

12 NAIC Model Regulation or 1991 Federal Regu13 lation insofar as such regulation relates to the

14 requirements of subsection (o) or (q) or clause

15 (i), (ii), or (iii) of paragraph (1)(A)’’;

16 (K) in paragraph (9), by adding at the end

17 the following new subparagraph:

18 ‘‘(D) Subject to paragraph (10), this paragraph shall

19 apply to sales of policies occurring on or after the effective

20 date specified in paragraph (1)(C).’’; and

21 (L) in paragraph (10), by striking ‘‘this

22 subsection’’ and inserting ‘‘paragraph

23 (1)(A)(i)’’.

24 (b) GUARANTEED RENEWABILITY.—Section 1882(q)

25 (42 U.S.C. 1395ss(q)) is amended—
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1 (1) in paragraph (2), by striking ‘‘paragraph

2 (2)’’ and inserting ‘‘paragraph (4)’’, and

3 (2) in paragraph (4), by striking ‘‘the succeed4 ing issuer’’ and inserting ‘‘issuer of the replacement

5 policy’’.

6 (c) ENFORCEMENT OF STANDARDS.—

7 (1) Section 1882(a)(2) (42 U.S.C.

8 1395ss(a)(2)) is amended—

9 (A) in subparagraph (A), by striking

10 ‘‘NAIC standards or the Federal standards’’

11 and inserting ‘‘1991 NAIC Model Regulation or

12 1991 Federal Regulation’’, and

13 (B) by striking ‘‘after the effective date of

14 the NAIC or Federal standards with respect to

15 the policy’’ and inserting ‘‘on and after the ef16 fective date specified in subsection (p)(1)(C)’’.

17 (2) The sentence in section 1882(b)(1) added

18 by section 4353(c)(5) of OBRA–1990 is amended—

19 (A) by striking ‘‘The report’’ and inserting

20 ‘‘Each report’’,

21 (B) by inserting ‘‘and requirements’’ after

22 ‘‘standards’’,

23 (C) by striking ‘‘and’’ after ‘‘compliance,’’,

24 and
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1 (D) by striking the comma after ‘‘Commis2 sioners’’.

3 (3) Section 1882(g)(2)(B) (42 U.S.C.

4 1395ss(g)(2)(B)) is amended by striking ‘‘Panel’’

5 and inserting ‘‘Secretary’’.

6 (4) Section 1882(b)(1) (42 U.S.C.

7 1395ss(b)(1)) is amended by striking ‘‘the the Sec8 retary’’ and inserting ‘‘the Secretary’’.

9 (d) PREVENTING DUPLICATION.—

10 (1) Section 1882(d)(3)(A) (42 U.S.C.

11 1395ss(d)(3)(A)) is amended—

12 (A) by amending the first sentence to read

13 as follows:

14 ‘‘(i) It is unlawful for a person to sell or issue to an

15 individual entitled to benefits under part A or enrolled

16 under part B of this title—

17 ‘‘(I) a health insurance policy with knowledge

18 that the policy duplicates health benefits to which

19 the individual is otherwise entitled under this title or

20 title XIX,

21 ‘‘(II) a medicare supplemental policy with

22 knowledge that the individual is entitled to benefits

23 under another medicare supplemental policy, or

24 ‘‘(III) a health insurance policy (other than a

25 medicare supplemental policy) with knowledge that
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1 the policy duplicates health benefits to which the in2 dividual is otherwise entitled, other than benefits to

3 which the individual is entitled under a requirement

4 of State or Federal law.’’;

5 (B) by designating the second sentence as

6 clause (ii) and, in such clause, by striking ‘‘the

7 previous sentence’’ and inserting ‘‘clause (i)’’;

8 (C) by designating the third sentence as

9 clause (iii) and, in such clause—

10 (i) by striking ‘‘the previous sentence’’

11 and inserting ‘‘clause (i) with respect to

12 the sale of a medicare supplemental pol13 icy’’, and

14 (ii) by striking ‘‘and the statement’’

15 and all that follows up to the period at the

16 end; and

17 (D) by striking the last sentence.

18 (2) Section 1882(d)(3)(B) (42 U.S.C.

19 1395ss(d)(3)(B)) is amended—

20 (A) in clause (ii)(II), by striking ‘‘65 years

21 of age or older’’,

22 (B) in clause (iii)(I), by striking ‘‘another

23 medicare’’ and inserting ‘‘a medicare’’,
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1 (C) in clause (iii)(I), by striking ‘‘such a

2 policy’’ and inserting ‘‘a medicare supplemental

3 policy’’,

4 (D) in clause (iii)(II), by striking ‘‘another

5 policy’’ and inserting ‘‘a medicare supplemental

6 policy’’, and

7 (E) by amending subclause (III) of clause

8 (iii) to read as follows:

9 ‘‘(III) If the statement required by clause (i) is ob10 tained and indicates that the individual is entitled to any

11 medical assistance under title XIX, the sale of the policy

12 is not in violation of clause (i) (insofar as such clause re13 lates to such medical assistance), if a State medicaid plan

14 under such title pays the premiums for the policy, or, in

15 the case of a qualified medicare beneficiary described in

16 section 1905(p)(1), if the State pays less than the full

17 amount of medicare cost-sharing as described in subpara18 graphs (B), (C), and (D) of section 1905(p)(3) for such

19 individual.’’.

20 (3)(A) Section 1882(d)(3)(C) (42 U.S.C.

21 1395ss(d)(3)(C)) is amended—

22 (i) by striking ‘‘the selling’’ and inserting

23 ‘‘(i) the sale or issuance’’, and

24 (ii) by inserting before the period at the

25 end the following: ‘‘, (ii) the sale or issuance of
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1 a policy or plan described in subparagraph

2 (A)(i)(I) (other than a medicare supplemental

3 policy to an individual entitled to any medical

4 assistance under title XIX) under which all the

5 benefits are fully payable directly to or on be6 half of the individual without regard to other

7 health benefit coverage of the individual but

8 only if (for policies sold or issued more than 60

9 days after the date the statements are pub10 lished or promulgated under subparagraph (D))

11 there is disclosed in a prominent manner as

12 part of (or together with) the application the

13 applicable statement (specified under subpara14 graph (D)) of the extent to which benefits pay15 able under the policy or plan duplicate benefits

16 under this title, or (iii) the sale or issuance of

17 a policy or plan described in subparagraph

18 (A)(i)(III) under which all the benefits are fully

19 payable directly to or on behalf of the individual

20 without regard to other health benefit coverage

21 of the individual’’.

22 (B) Section 1882(d)(3) (42 U.S.C.

23 1395ss(d)(3)) is amended by adding at the end the

24 following:

25 ‘‘(D)(i) If—
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1 ‘‘(I) within the 90-day period beginning on the

2 date of the enactment of this subparagraph, the Na3 tional Association of Insurance Commissioners devel4 ops (after consultation with consumer and insurance

5 industry representatives) and submits to the Sec6 retary a statement for each of the types of health in7 surance policies (other than medicare supplemental

8 policies and including, as separate types of policies,

9 policies paying directly to the beneficiary fixed, cash

10 benefits) which are sold to persons entitled to health

11 benefits under this title, of the extent to which bene12 fits payable under the policy or plan duplicate bene13 fits under this title, and

14 ‘‘(II) the Secretary approves all the statements

15 submitted as meeting the requirements of subclause

16 (I),

17 each such statement shall be (for purposes of subpara18 graph (C)) the statement specified under this subpara19 graph for the type of policy involved. The Secretary shall

20 review and approve (or disapprove) all the statements sub21 mitted under subclause (I) within 30 days after the date

22 of their submittal. Upon approval of such statements, the

23 Secretary shall publish such statements.

24 ‘‘(ii) If the Secretary does not approve the statements

25 under clause (i) or the statements are not submitted with-
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1 in the 90-day period specified in such clause, the Secretary

2 shall promulgate (after consultation with consumer and

3 insurance industry representatives and not later than 90

4 days after the date of disapproval or the end of such 90-

5 day period (as the case may be)) a statement for each

6 of the types of health insurance policies (other than medi7 care supplemental policies and including, as separate types

8 of policies, policies paying directly to the beneficiary fixed,

9 cash benefits) which are sold to persons entitled to health

10 benefits under this title, of the extent to which benefits

11 payable under the policy or plan duplicate benefits under

12 this title, and each such statement shall be (for purposes

13 of subparagraph (C)) the statement specified under this

14 subparagraph for the type of policy involved.’’.

15 (C) The requirement of a disclosure under sec16 tion 1882(d)(3)(C)(ii) of the Social Security Act

17 shall not apply to an application made for a policy

18 or plan before 60 days after the date the Secretary

19 of Health and Human Services publishes or promul20 gates all the statements under section

21 1882(d)(3)(D) of such Act.

22 (4) Subparagraphs (A) and (B) of section

23 1882(q)(5)(A) (42 U.S.C. 1395ss(q)(5)(A)) are

24 amended by striking ‘‘of the Social Security Act’’.
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1 (5) The second subsection (b) of section 4354

2 of OBRA–1990 (relating to effective date) is amend3 ed by redesignating such subsection as subsection

4 (c).

5 (e) LOSS RATIOS AND REFUNDS OF PREMIUMS.—

6 (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is

7 amended—

8 (A) in paragraph (1), by striking ‘‘or sold’’

9 and inserting ‘‘or renewed (or otherwise provide

10 coverage after the date described in subsection

11 (p)(1)(C))’’;

12 (B) in paragraph (1)(A), by inserting ‘‘for

13 periods after the effective date of these provi14 sions’’ after ‘‘the policy can be expected’’;

15 (C) in paragraph (1)(A), by striking

16 ‘‘Commissioners,’’ and inserting ‘‘Commis17 sioners)’’;

18 (D) in paragraph (1)(B), by inserting be19 fore the period at the end the following: ‘‘,

20 treating policies of the same type as a single

21 policy for each standard package’’;

22 (E) by adding at the end of paragraph (1)

23 the following: ‘‘For the purpose of calculating

24 the refund or credit required under paragraph

25 (1)(B) for a policy issued before the date speci-
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1 fied in subsection (p)(1)(C), the refund or cred2 it calculation shall be based on the aggregate

3 benefits provided and premiums collected under

4 all such policies issued by an insurer in a State

5 (separated as to individual and group policies)

6 and shall be based only on aggregate benefits

7 provided and premiums collected under such

8 policies after the date specified in section

9 5091(m)(4) of the Omnibus Budget Reconcili10 ation Act of 1993.’’;

11 (F) in the first sentence of paragraph

12 (2)(A), by striking ‘‘by policy number’’ and in13 serting ‘‘by standard package’’;

14 (G) by striking the second sentence of

15 paragraph (2)(A) and inserting the following:

16 ‘‘Paragraph (1)(B) shall not apply to a policy

17 until 12 months following issue.’’;

18 (H) in the last sentence of paragraph

19 (2)(A), by striking ‘‘in order’’ and all that fol20 lows through ‘‘are effective’’;

21 (I) by adding at the end of paragraph

22 (2)(A), the following new sentence: ‘‘In the case

23 of a policy issued before the date specified in

24 subsection (p)(1)(C), paragraph (1)(B) shall

25 not apply until 1 year after the date specified
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1 in section 5091(m)(4) of the Omnibus Budget

2 Reconciliation Act of 1993.’’;

3 (J) in paragraph (2), by striking ‘‘policy

4 year’’ each place it appears and inserting ‘‘cal5 endar year’’;

6 (K) in paragraph (4), by striking ‘‘Feb7 ruary’’, ‘‘disllowance’’, ‘‘loss-ratios’’ each place

8 it appears, and ‘‘loss-ratio’’ and inserting ‘‘Oc9 tober’’, ‘‘disallowance’’, ‘‘loss ratios’’, and ‘‘loss

10 ratio’’, respectively;

11 (L) in paragraph (6)(A), by striking ‘‘is12 sues a policy in violation of the loss ratio re13 quirements of this subsection’’ and ‘‘such viola14 tion’’ and inserting ‘‘fails to provide refunds or

15 credits as required in paragraph (1)(B)’’ and

16 ‘‘policy issued for which such failure occurred’’,

17 respectively; and

18 (M) in paragraph (6)(B), by striking ‘‘to

19 policyholders’’ and inserting ‘‘to the policy20 holder or, in the case of a group policy, to the

21 certificate holder’’.

22 (2) Section 1882(b)(1) (42 U.S.C.

23 1395ss(b)(1)) is amended, in the matter after sub24 paragraph (H), by striking ‘‘subsection (F)’’ and in25 serting ‘‘subparagraph (F)’’.
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1 (3) Section 4355(d) of OBRA–1990 is amended

2 by striking ‘‘sold or issued’’ and all that follows and

3 inserting ‘‘issued or renewed (or otherwise providing

4 coverage after the date described in section

5 1882(p)(1)(C) of the Social Security Act) on or after

6 the date specified in section 1882(p)(1)(C) of such

7 Act.’’.

8 (f) TREATMENT OF HMO’S.—

9 (1) Section 1882(g)(1) (42 U.S.C.

10 1395ss(g)(1)) is amended by striking ‘‘a health

11 maintenance organization or other direct service or12 ganization’’ and all that follows through ‘‘1833’’ and

13 inserting ‘‘an eligible organization (as defined in sec14 tion 1876(b)) if the policy or plan provides benefits

15 pursuant to a contract under section 1876 or an ap16 proved demonstration project described in section

17 603(c) of the Social Security Amendments of 1983,

18 section 2355 of the Deficit Reduction Act of 1984,

19 or section 9412(b) of the Omnibus Budget Reconcili20 ation Act of 1986 or, during the period beginning on

21 the date specified in subsection (p)(1)(C) and ending

22 on December 31, 1994, a policy or plan of an orga23 nization if the policy or plan provides benefits pursu24 ant to an agreement under section 1833(a)(1)(A)’’.
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1 (2) Section 4356(b) of OBRA–1990 is amended

2 by striking ‘‘on the date of the enactment of this

3 Act’’ and inserting ‘‘on the date specified in section

4 1882(p)(1)(C) of the Social Security Act’’.

5 (g) PRE-EXISTING CONDITION LIMITATIONS.—Sec6 tion 1882(s) (42 U.S.C. 1395ss(s)) is amended—

7 (1) in paragraph (2)(A), by striking ‘‘for which

8 an application is submitted’’ and inserting ‘‘in the

9 case of an individual for whom an application is sub10 mitted prior to or’’,

11 (2) in paragraph (2)(A), by striking ‘‘in which

12 the individual (who is 65 years of age or older) first

13 is enrolled for benefits under part B’’ and inserting

14 ‘‘as of the first day on which the individual is 65

15 years of age or older and is enrolled for benefits

16 under part B’’, and

17 (3) in paragraph (2)(B), by striking ‘‘before it’’

18 and inserting ‘‘before the policy’’.

19 (h) MEDICARE SELECT POLICIES.—

20 (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is

21 amended—

22 (A) in paragraph (1), by inserting ‘‘medi23 care supplemental’’ after ‘‘If a’’,
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1 (B) in paragraph (1), by striking ‘‘NAIC

2 Model Standards’’ and inserting ‘‘1991 NAIC

3 Model Regulation or 1991 Federal Regulation’’,

4 (C) in paragraph (1)(A), by inserting ‘‘or

5 agreements’’ after ‘‘contracts’’,

6 (D) in subparagraphs (E)(i) and (F) of

7 paragraph (1), by striking ‘‘NAIC standards’’

8 and inserting ‘‘standards in the 1991 NAIC

9 Model Regulation or 1991 Federal Regulation’’,

10 and

11 (E) in paragraph (2), by inserting ‘‘the is12 suer’’ before ‘‘is subject to a civil money pen13 alty’’.

14 (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c–

15 3(a)(4)(B)) is amended—

16 (A) by inserting ‘‘that is’’ after ‘‘(or’’, and

17 (B) by striking ‘‘1882(t)’’ and inserting

18 ‘‘1882(t)(3)’’.

19 (i) HEALTH INSURANCE COUNSELING.—Section

20 4360 of OBRA–1990 is amended—

21 (1) in subsection (b)(2)(A)(ii), by striking

22 ‘‘Act’’ and inserting ‘‘Act)’’;

23 (2) in subsection (b)(2)(D), by striking ‘‘serv24 ices’’ and inserting ‘‘counseling’’;
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1 (3) in subsection (b)(2)(I), by striking ‘‘assist2 ance’’ and inserting ‘‘referrals’’;

3 (4) in subsection (c)(1), by striking ‘‘and that

4 such activities will continue to be maintained at such

5 level’’;

6 (5) in subsection (d)(3), by striking ‘‘to the

7 rural areas’’ and inserting ‘‘eligible individuals resid8 ing in rural areas’’;

9 (6) in subsection (e)—

10 (A) by striking ‘‘subsection (c) or (d)’’ and

11 inserting ‘‘this section’’,

12 (B) by striking ‘‘and annually thereafter,

13 issue an annual report’’ and inserting ‘‘and an14 nually thereafter during the period of the grant,

15 issue a report’’,

16 (C) in paragraph (1), by striking ‘‘State17 wide’’, and

18 (D) in subsection (f), by striking para19 graph (2) and by redesignating paragraphs (3)

20 through (5) as paragraphs (2) through (4), re21 spectively; and

22 (7) by redesignating the second subsection (f)

23 (relating to authorization of appropriations for

24 grants) as subsection (g).

25 (j) TELEPHONE INFORMATION SYSTEM.—
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1 (1) Section 1804 (42 U.S.C. 1395b–2) is

2 amended—

3 (A) by adding at the end of the heading

4 the following: ‘‘; MEDICARE AND MEDIGAP IN5 FORMATION’’,

6 (B) by inserting ‘‘(a)’’ after ‘‘1804.’’, and

7 (C) by adding at the end the following new

8 subsection:

9 ‘‘(b) The Secretary shall provide information via a

10 toll-free telephone number on the programs under this

11 title.’’.

12 (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is

13 amended by adding at the end the following new

14 paragraph:

15 ‘‘(3) The Secretary shall provide information via a

16 toll-free telephone number on medicare supplemental poli17 cies (including the relationship of State programs under

18 title XIX to such policies).’’.

19 (3) Section 1889 (42 U.S.C. 1395zz) is re20 pealed.

21 (k) MAILING OF POLICIES.—Section 1882(d)(4) (42

22 U.S.C. 1395ss(d)(4)) is amended—

23 (1) in subparagraph (D), by striking ‘‘, if such

24 policy’’ and all that follows up to the period at the

25 end, and
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1 (2) by adding at the end the following new sub2 paragraph:

3 ‘‘(E) Subparagraph (A) shall not apply in the case

4 of an issuer who mails or causes to be mailed a policy,

5 certificate, or other matter solely to comply with the re6 quirements of subsection (q).’’.

7 (l) EFFECTIVE DATE.—The amendments made by

8 this section shall be effective as if included in the enact9 ment of OBRA–1990; except that—

10 (1) the amendments made by subsection (d)(1)

11 shall take effect on the date of the enactment of this

12 Act, but no penalty shall be imposed under section

13 1882(d)(3)(A) of the Social Security Act (for an ac14 tion occurring after the effective date of the amend15 ments made by section 4354 of OBRA–1990 and be16 fore the date of the enactment of this Act) with re17 spect to the sale or issuance of a policy which is not

18 unlawful under section 1882(d)(3)(A)(i)(II) of the

19 Social Security Act (as amended by this section);

20 (2) the amendments made by subsection

21 (d)(2)(A) and by subparagraphs (A), (B), and (E)

22 of subsection (e)(1) shall be effective on the date

23 specified in subsection (m)(4); and

24 (3) the amendment made by subsection (g)(2)

25 shall take effect on January 1, 1994, and shall apply
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1 to individuals who attain 65 years of age or older on

2 or after the effective date of section 1882(s)(2) of

3 the Social Security Act (and, in the case of individ4 uals who attained 65 years of age after such effec5 tive date and before January 1, 1994, and who were

6 not covered under such section before January 1,

7 1994, the 6-month period specified in that section

8 shall begin January 1, 1994).

9 (m) TRANSITION PROVISIONS.—

10 (1) IN GENERAL.—If the Secretary of Health

11 and Human Services identifies a State as requiring

12 a change to its statutes or regulations to conform its

13 regulatory program to the changes made by this sec14 tion, the State regulatory program shall not be con15 sidered to be out of compliance with the require16 ments of section 1882 of the Social Security Act due

17 solely to failure to make such change until the date

18 specified in paragraph (4).

19 (2) NAIC STANDARDS.—If, within 6 months

20 after the date of the enactment of this Act, the Na21 tional Association of Insurance Commissioners (in

22 this subsection referred to as the ‘‘NAIC’’) modifies

23 its 1991 NAIC Model Regulation (adopted in July

24 1991) to conform to the amendments made by this

25 section and to delete from section 15C the exception
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1 which begins with ‘‘unless’’, such modifications shall

2 be considered to be part of that Regulation for the

3 purposes of section 1882 of the Social Security Act.

4 (3) SECRETARY STANDARDS.—If the NAIC

5 does not make the modifications described in para6 graph (2) within the period specified in such para7 graph, the Secretary of Health and Human Services

8 shall make the modifications described in such para9 graph and such modifications shall be considered to

10 be part of that Regulation for the purposes of sec11 tion 1882 of the Social Security Act.

12 (4) DATE SPECIFIED.—

13 (A) IN GENERAL.—Subject to subpara14 graph (B), the date specified in this paragraph

15 for a State is the earlier of—

16 (i) the date the State changes its stat17 utes or regulations to conform its regu18 latory program to the changes made by

19 this section, or

20 (ii) 1 year after the date the NAIC or

21 the Secretary first makes the modifications

22 under paragraph (2) or (3), respectively.

23 (B) ADDITIONAL LEGISLATIVE ACTION RE24 QUIRED.—In the case of a State which the Sec25 retary identifies as—
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1 (i) requiring State legislation (other

2 than legislation appropriating funds) to

3 conform its regulatory program to the

4 changes made in this section, but

5 (ii) having a legislature which is not

6 scheduled to meet in 1994 in a legislative

7 session in which such legislation may be

8 considered,

9 the date specified in this paragraph is the first

10 day of the first calendar quarter beginning after

11 the close of the first legislative session of the

12 State legislature that begins on or after Janu13 ary 1, 1994. For purposes of the previous sen14 tence, in the case of a State that has a 2-year

15 legislative session, each year of such session

16 shall be deemed to be a separate regular session

17 of the State legislature.
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1 Subtitle B—Medicaid Program and

2 Other Health Care Provisions

3 CHAPTER 1—MEDICAID PROGRAM

4 Subchapter A—Program Savings Provisions

5 PART I—REPEAL OF MANDATE

6 SEC. 5101. PERSONAL CARE SERVICES FURNISHED OUT7 SIDE THE HOME AS OPTIONAL BENEFIT.

8 (a) IN GENERAL.—Section 1905(a) (42 U.S.C.

9 1396d(a)), as amended by section 5174(c)(1), is further

10 amended—

11 (1) in paragraph (7), by striking ‘‘including

12 personal care services’’ and all that follows through

13 ‘‘nursing facility’’;

14 (2) in paragraph (23), by striking ‘‘and’’ at the

15 end;

16 (3) by redesignating paragraph (24) as para17 graph (25); and

18 (4) by inserting after paragraph (23) the fol19 lowing new paragraph:

20 ‘‘(24) personal care services furnished to an in21 dividual who is not an inpatient or resident of a

22 nursing facility that are (A) authorized by a physi23 cian for the individual in accordance with a plan of

24 treatment, (B) provided by an individual who is

25 qualified to provide such services and who is not a
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1 member of the individual’s family, (C) supervised by

2 a registered nurse, and (D) furnished in a home or

3 other location; and’’.

4 (b) CONFORMING AMENDMENTS.—(1) Section

5 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)), as

6 amended by section 5174(c)(2)(A), is amended by striking

7 ‘‘through (23)’’ and inserting ‘‘through (24)’’.

8 (2) Section 1902(j) (42 U.S.C. 1396a(j)), as amend9 ed by section 5174(c)(2)(B), is amended by striking

10 ‘‘through (24)’’ and inserting ‘‘through (25)’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 subsections (a) and (b) shall take effect as if included in

13 the enactment of section 4721(a) of OBRA–90.

14 PART II—OUTPATIENT PRESCRIPTION DRUGS

15 SEC. 5106. PERMITTING PRESCRIPTION DRUG

16 FORMULARIES UNDER STATE PLANS.

17 (a) ELIMINATION OF PROHIBITION AGAINST USE OF

18 FORMULARIES.—Paragraph (54) of section 1902(a)(54)

19 (42 U.S.C. 1396a(a)(54)) is amended to read as follows:

20 ‘‘(54) in the case of a State plan that provides

21 medical assistance for covered outpatient drugs (as

22 defined in section 1927(k)), comply with the applica23 ble requirements of section 1927;’’.
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1 (b) STANDARDS FOR FORMULARIES.—Section

2 1927(d) (42 U.S.C. 1396r–8(d)), as amended by sections

3 5107(a) and 5108(b)(4)(A)(iii), is amended—

4 (1) by adding at the end of paragraph (1) the

5 following new subparagraph:

6 ‘‘(C) In the case of a State that establishes a

7 formulary in accordance with paragraph (5), the

8 State may exclude coverage of a covered outpatient

9 drug that is not included in the formulary.’’; and

10 (2) by inserting after paragraph (4) the follow11 ing new paragraph:

12 ‘‘(5) REQUIREMENTS FOR FORMULARIES.—A

13 State may establish a formulary only if the following

14 requirements are met:

15 ‘‘(A) The formulary is established by a

16 committee consisting of physicians, phar17 macists, and other appropriate individuals ap18 pointed by the Governor of the State (or, at the

19 option of the State, the State’s drug use review

20 board established under subsection (g)(3)).

21 ‘‘(B) Except as provided in subparagraph

22 (C), the formulary includes the covered out23 patient drugs of any manufacturer which has

24 entered into and complies with an agreement

25 under subsection (a).
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1 ‘‘(C) The committee may exclude a covered

2 outpatient drug with respect to the treatment of

3 a specific disease or condition for an identified

4 population (if any) only if the committee finds,

5 based on the drug’s labeling (or, in the case of

6 a drug whose prescribed use is not approved

7 under the Federal Food, Drug, and Cosmetic

8 Act but is a medically accepted indication,

9 based on information from the appropriate com10 pendia described in subsection (k)(6)), that the

11 excluded drug does not have a significant, clini12 cally meaningful therapeutic advantage in terms

13 of safety, effectiveness, or clinical outcome of

14 such treatment for such population over other

15 drugs included in the formulary.

16 ‘‘(D) With respect to a decision to exclude

17 a covered outpatient drug from the formulary

18 or a prescribed use of such a drug, the commit19 tee issues a written explanation of its decision

20 that is available to the public, unless the deci21 sion was made at a meeting of the committee

22 which was open to the public.

23 ‘‘(E) The manufacturer of the drug, and

24 any person affected by the decision, may obtain

25 a reversal of the committee’s decision to exclude
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1 a covered outpatient drug from the formulary

2 under subparagraph (C) on the ground that the

3 decision was arbitrary and capricious, in ac4 cordance with an appeals process that is estab5 lished by the State and that provides an oppor6 tunity for judicial review of such decision.

7 ‘‘(F) The State plan permits coverage of a

8 drug excluded from the formulary pursuant to

9 a prior authorization program that is consistent

10 with paragraph (4).

11 ‘‘(G) The formulary meets such other re12 quirements as the Secretary may impose.’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to calendar quarters beginning on

15 or after October 1, 1993, without regard to whether or

16 not regulations to carry out such amendments have been

17 promulgated by such date.

18 SEC. 5107. ELIMINATION OF SPECIAL EXEMPTION FROM

19 PRIOR AUTHORIZATION FOR NEW DRUGS.

20 (a) IN GENERAL.—Section 1927(d) (42 U.S.C.

21 1396r–8(d)), as amended by section 5108(b)(4)(A)(iii), is

22 amended by striking paragraph (5).

23 (b) CONFORMING AMENDMENT.—Section 1927(d)(3)

24 (42 U.S.C. 1396r–8(d)(3)) is amended by striking ‘‘(ex-
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1 cept with respect’’ and all that follows through ‘‘of this

2 paragraph)’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to calendar quarters beginning on

5 or after October 1, 1993, without regard to whether or

6 not regulations to carry out such amendments have been

7 promulgated by such date.

8 SEC. 5108. TECHNICAL CORRECTIONS RELATING TO SEC9 TION 4401 OF OBRA–1990.

10 (a) SECTION 1903, SSA.—Paragraph (10) of section

11 1903(i), as inserted by section 4401(a)(1)(B) of OBRA–

12 1990, is amended to read as follows:

13 ‘‘(10) with respect to covered outpatient drugs

14 unless there is a rebate agreement in effect under

15 section 1927 with respect to such drugs or unless

16 section 1927(a)(3) applies;’’.

17 (b) SECTION 1927, SSA.—(1) Section 1927(a) (42

18 U.S.C. 1396r–8(a)) is amended—

19 (A) in paragraph (1)—

20 (i) by amending the second sentence to

21 read as follows: ‘‘Any such agreement entered

22 into prior to April 1, 1991, shall be deemed to

23 have been entered into on January 1, 1991, and

24 the amount of the rebate under such agreement
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1 shall be calculated as if the agreement had been

2 entered into on January 1, 1991.’’, and

3 (ii) in the third sentence, by striking

4 ‘‘March’’ and inserting ‘‘April’’;

5 (B) in paragraph (2)—

6 (i) by striking ‘‘first’’, and

7 (ii) by striking the period at the end and

8 inserting the following: ‘‘, except that such

9 paragraph (and section 1903(i)(10)(A)) shall

10 not apply to the dispensing of such a drug be11 fore April 1, 1991, if the Secretary determines

12 that there were extenuating circumstances with

13 respect to the first calendar quarter of 1991.’’;

14 (C) in paragraph (3), by striking ‘‘single

15 source’’ and all that follows and inserting the follow16 ing: ‘‘covered outpatient drugs if—

17 ‘‘(A) based on information provided by a

18 beneficiary’s physician, the State has made a

19 determination that the availability of the drug

20 is essential to the health of the beneficiary

21 under the State plan, and the Secretary has re22 viewed and approved such determination; and

23 ‘‘(B) the drug has been given a rating of

24 1–A by the Food and Drug Administration.’’;

25 (D) in paragraph (4)—
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1 (i) by striking ‘‘in compliance with’’

2 and inserting ‘‘in effect under’’, and

3 (ii) by striking ‘‘coverage of the man4 ufacturer’s drugs’’ and inserting ‘‘ingredi5 ent costs of the manufacturer’s covered

6 outpatient drugs covered’’; and

7 (E) by adding at the end the following new

8 paragraph:

9 ‘‘(5) APPLICATION IN CERTAIN STATES AND

10 TERRITORIES.—

11 ‘‘(A) APPLICATION IN STATES OPERATING

12 UNDER DEMONSTRATION PROJECTS.—In the

13 case of any State which is providing medical as14 sistance to its residents under a waiver granted

15 under section 1115, the Secretary shall require

16 the State to meet the requirements of section

17 1902(a)(54) and of this section in the same

18 manner as the State would be required to meet

19 such requirements if the State had in effect a

20 plan approved under this title.

21 ‘‘(B) NO APPLICATION IN COMMON22 WEALTHS AND TERRITORIES.—This section,

23 and sections 1902(a)(54) and 1903(i)(10), shall

24 only apply to a State that is one of the 50

25 States or the District of Columbia.’’.
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1 (2) Section 1927(b) (42 U.S.C. 1396r–8(b)) is

2 amended—

3 (A) in paragraph (1)(A)—

4 (i) by striking ‘‘(or periodically in accord5 ance with a schedule specified by the Sec6 retary)’’ and inserting ‘‘(or other period speci7 fied by the Secretary)’’, and

8 (ii) by inserting ‘‘after December 31, 1990,

9 for which payment was made’’ after ‘‘dis10 pensed’’;

11 (B) in paragraph (2)(A)—

12 (i) by striking ‘‘calendar quarter’’ and ‘‘the

13 quarter’’ and inserting ‘‘rebate period’’ and

14 ‘‘the period’’, respectively,

15 (ii) by striking ‘‘dosage units’’ and insert16 ing ‘‘units of each dosage form and strength’’,

17 and

18 (iii) by inserting ‘‘after December 31,

19 1990, for which payment was made’’ after ‘‘dis20 pensed’’;

21 (C) in paragraph (3)(A)—

22 (i) in clause (i), by striking ‘‘quarter’’ each

23 place it appears and inserting ‘‘calendar quarter

24 or other rebate period under the agreement’’,
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1 (ii) in clause (i), by striking the open pa2 renthesis before ‘‘for’’ and the close parenthesis

3 after ‘‘drugs’’,

4 (iii) in clause (i), by striking ‘‘subsection

5 (c)(2)(B)) for covered outpatient drugs’’ and in6 serting ‘‘subsection (c)(1)(C) for each covered

7 outpatient drug’’, and

8 (iv) in clause (ii), by inserting a comma

9 after ‘‘this section’’ and after ‘‘1990’’;

10 (D) in paragraph (3)(B)—

11 (i) by striking ‘‘$100,000’’ and inserting

12 ‘‘$10,000’’,

13 (ii) by striking ‘‘if the wholesaler’’ and in14 serting ‘‘for each instance in which the whole15 saler’’,

16 (iii) by inserting ‘‘in response to such a re17 quest’’ after ‘‘false information’’, and

18 (iv) by striking ‘‘(with respect to amounts

19 of penalties or additional assessments)’’;

20 (E) in paragraph (3)(C)—

21 (i) in clause (i), by striking ‘‘the penalty’’

22 and inserting ‘‘the rebate next required to be

23 paid’’,
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1 (ii) in clause (i), by striking ‘‘and such

2 amount shall be paid to the Treasury, and, if’’

3 and inserting ‘‘. If’’,

4 (iii) in clause (ii), by inserting ‘‘under sub5 paragraph (A)’’ after ‘‘provides false informa6 tion’’, and

7 (iv) in clause (ii), by striking ‘‘Such civil

8 money penalties are’’ and inserting ‘‘Any such

9 civil money penalty shall be’’;

10 (F) in paragraph (3)(D), by striking ‘‘whole11 saler,’’ and inserting ‘‘wholesaler or the’’; and

12 (G) in paragraph (4)(B)(iii), by adding at the

13 end the following: ‘‘In the case of such a termi14 nation, a State may terminate coverage of the drugs

15 affected by such termination as of the effective date

16 of such termination without providing any advance

17 notice otherwise required by regulation.’’.

18 (3) Section 1927(c) (42 U.S.C. 1396r–8(c)) is

19 amended—

20 (A) in paragraph (1) in the matter preceding

21 subparagraph (A)—

22 (i) by striking the first sentence,

23 (ii) in the second sentence, by striking

24 ‘‘Except as otherwise provided’’ and all that fol25 lows through ‘‘the Secretary)’’ and inserting the
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1 following: ‘‘For purposes of this section, the

2 amount of the rebate under this subsection for

3 a rebate period’’, and

4 (iii) by inserting ‘‘(except as provided in

5 subsection (b)(3)(C) and paragraph (2))’’ after

6 ‘‘drugs shall’’;

7 (B) in paragraph (1)(A), by striking ‘‘the quar8 ter (or other period)’’ and inserting ‘‘the rebate pe9 riod’’;

10 (C) in subparagraph (C)—

11 (i) by striking ‘‘For purposes of this para12 graph’’ and inserting ‘‘BEST PRICE DEFINED.—

13 For purposes of this section’’,

14 (ii) by inserting ‘‘provider,’’ after ‘‘re15 tailer,’’, and

16 (iii) by striking the semicolon at the end

17 and inserting a period; and

18 (D) by striking subparagraph (D) and inserting

19 the following:

20 ‘‘(D) USE OF ESTIMATED BEST PRICES

21 DURING INITIAL YEAR OF AVAILABILITY OF

22 DRUG.—If the Secretary determines that a

23 manufacturer cannot determine the best price

24 for rebate periods during the first year in which

25 an agreement is in effect until after the end of
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1 the year, as part of the agreement the Sec2 retary may require the manufacturer to esti3 mate the best price for rebate periods during

4 the year and provide an adjustment to the re5 bate paid to the State to take into account the

6 difference (if any) between the best price and

7 the estimated best price.’’.

8 (4)(A) Section 1927(d) (42 U.S.C. 1396r–8(d)) is

9 amended—

10 (i) in paragraph (2)—

11 (I) in subparagraph (A), by inserting ‘‘or

12 loss’’ after ‘‘gain’’,

13 (II) by striking subparagraph (I), and

14 (III) by redesignating subparagraphs (J)

15 and (K) as subparagraphs (I) and (J);

16 (ii) in paragraph (3)—

17 (I) by striking ‘‘described in paragraph

18 (2)’’, and

19 (II) by inserting ‘‘described in paragraph

20 (2)’’ after ‘‘classes of drugs,’’;

21 (iii) by striking paragraph (4) and by redesig22 nating paragraphs (5) through (7) as paragraphs

23 (4) through (6);

24 (iv) in paragraph (6), as so redesignated, by

25 striking ‘‘provided’’ and inserting ‘‘if’’; and
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1 (v) by striking the second sentence of para2 graph (6), as so redesignated, and paragraph (8)

3 and inserting the following:

4 ‘‘(7) CONSTRUCTION WITH RESPECT TO FRAUD

5 AND ABUSE.—Nothing in this section shall be con6 strued to restrict the authority of a State to apply

7 sanctions under this Act against any person for

8 fraud or abuse.’’.

9 (B) Section 1927(d)(4) of the Social Security Act, as

10 redesignated by subparagraph (A)(iii), shall first apply to

11 drugs dispensed on or after July 1, 1991.

12 (5)(A) Section 1927(f) (42 U.S.C. 1396r–8(f)) is

13 amended to read as follows:

14 ‘‘(f) NO REDUCTIONS IN PHARMACY REIMBURSE15 MENT LIMITS.—

16 ‘‘(1) IN GENERAL.—During the period begin17 ning on November 5, 1990, and ending on December

18 31, 1994—

19 ‘‘(A) a State may not reduce the amount

20 paid by the State under this title with respect

21 to the ingredient cost of a covered outpatient

22 drug or the dispensing fee for such a drug

23 below the amount in effect as of November 5,

24 1990, and
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1 ‘‘(B) the Secretary may not change the

2 regulations in effect on November 5, 1990, gov3 erning the amounts described in subparagraph

4 (A) which are eligible for Federal financial par5 ticipation, to reduce the reimbursement limits

6 described in such regulations.

7 ‘‘(2) CONSTRUCTION.—If the Secretary notified

8 a State before November 5, 1990, that its payment

9 amounts under this title with respect to the ingredi10 ent cost of a covered outpatient drug or the dispens11 ing fee for such a drug were in excess of those per12 mitted under regulations in effect on such date,

13 paragraph (1)(B) shall not be construed as prevent14 ing a State from reducing payment amounts or dis15 pensing fee in order to comply with such regula16 tions.’’.

17 (B) Not later than April 1, 1994, the Secretary of

18 Health and Human Services shall establish an upper limit

19 on the amount of payment which is eligible for Federal

20 financial participation under title XIX of the Social Secu21 rity Act for each multiple source drug (as defined in sec22 tion 1927(k)(7)(A)(i) of such Act) for which the Food and

23 Drug Administration has rated at least 3 formulations of

24 such drug as therapeutically and pharmaceutically equiva25 lent, regardless of whether all the formulations of such
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1 drug are rated as so equivalent. In establishing such a

2 limit for a drug, the Secretary shall take into account only

3 those formulations of the drug which the Food and Drug

4 Administration has rated as therapeutically and pharma5 ceutically equivalent.

6 (6) Section 1927(g) (42 U.S.C. 1396r–8(g)) is

7 amended—

8 (A) by amending paragraph (1) to read as fol9 lows:

10 ‘‘(1) REQUIREMENT FOR DRUG USE REVIEW

11 PROGRAM.—Each State shall provide, by not later

12 than January 1, 1993, for a drug use review pro13 gram for covered outpatient drugs (other than drugs

14 dispensed to residents of nursing facilities) that—

15 ‘‘(i) meets the requirements of para16 graph (2), and

17 ‘‘(ii) is intended to assure that pre18 scriptions for such drugs are appropriate,

19 medically necessary, and not likely to lead

20 to adverse medical results.’’;

21 (B) in paragraph (2)—

22 (i) by amending the matter before subpara23 graph (A) to read as follows:

24 ‘‘(2) REQUIREMENTS.—’’,
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1 (ii) by amending subparagraph (A) to read

2 as follows:

3 ‘‘(A) PROSPECTIVE DRUG USE REVIEW.—

4 Each drug use review program shall provide for

5 a review of drug therapy before each prescrip6 tion is filled or delivered to an individual receiv7 ing benefits under this title (including counsel8 ing by pharmacists) consistent with standards

9 established by the Secretary. Nothing in this

10 paragraph shall be construed as requiring a

11 pharmacist to provide consultation when an in12 dividual receiving benefits under this title or

13 caregiver of such individual refuses such con14 sultation.’’,

15 (iii) in subparagraph (C)—

16 (I) by striking ‘‘APPLICATION OF

17 STANDARDS.—’’ and inserting ‘‘STAND18 ARDS.—(i)’’,

19 (II) by striking ‘‘and literature re20 ferred to in subsection (1)(B)’’ and insert21 ing ‘‘described in clause (ii)’’,

22 (III) by striking ‘‘including but not

23 limited to’’ and inserting ‘‘. Such assess24 ment shall include’’,
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1 (IV) by striking ‘‘abuse/misuse and,

2 as necessary, introduce remedial strate3 gies,’’ and inserting ‘‘abuse or misuse and

4 introduce remedial strategies’’, and

5 (V) by adding at the end the following

6 new clause:

7 ‘‘(ii) The compendia described in this

8 clause are the American Hospital Formulary

9 Service Drug Information, the United States

10 Pharmacopeia-Drug Information, and the

11 American Medical Association Drug Evalua12 tions.’’, and

13 (iv) by amending subparagraph (D) to

14 read as follows:

15 ‘‘(D) EDUCATIONAL PROGRAM.—The pro16 gram shall educate (directly or by contract)

17 pharmacists, physicians, and other individuals

18 prescribing or dispensing covered outpatient

19 drugs under the State plan on common drug

20 therapy problems in order to improve prescrib21 ing or dispensing practices.’’;

22 (C) in paragraph (3)—

23 (i) in subparagraph (A), by striking

24 ‘‘(hereinafter’’ and all that follows and inserting
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1 ‘‘(in this paragraph referred to as the ‘DUR

2 Board’).’’,

3 (ii) in subparagraph (B), by striking ‘‘51

4 percent’’ and all that follows and inserting ‘‘50

5 percent licensed and actively practicing physi6 cians and at least 1/3 but not more than 50

7 percent licensed and actively practicing phar8 macists.’’,

9 (iii) by amending subparagraph (C) to

10 read as follows:

11 ‘‘(C) RESPONSIBILITIES.—The responsibil12 ities of the DUR Board shall include the follow13 ing:

14 ‘‘(i) Carrying out retrospective drug

15 use review pursuant to paragraph (2)(B).

16 ‘‘(ii) Establishing and applying stand17 ards for drug use review described in para18 graph (2)(C).

19 ‘‘(iii) Implementing educational pro20 grams described in paragraph (2)(D).

21 ‘‘(iv) Conducting ongoing evaluations

22 of the effectiveness of its programs and ac23 tivities in improving the quality and safety

24 of drug therapy for individuals receiving

25 benefits under the State plan.’’; and
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1 (D) by amending subparagraph (D) to read as

2 follows:

3 ‘‘(4) ANNUAL REPORT.—Each State shall sub4 mit a report each year to the Secretary on the na5 ture and scope of the drug use review program

6 under this subsection. Such report shall include an

7 estimate of cost savings resulting from operation of

8 such program.’’.

9 (7) Section 1927(h) (42 U.S.C. 1396r–8(h)) is

10 amended to read as follows:

11 ‘‘(h) ENCOURAGING ELECTRONIC CLAIMS MANAGE12 MENT.—The Secretary shall encourage each single State

13 agency under this title to establish, as its principal means

14 of processing claims for covered outpatient drugs, a point15 of-sale electronic claims management system for the pur16 pose of verifying eligibility, transmitting data on claims,

17 and assisting pharmacists and other authorized persons

18 in applying for and receiving payment under the State

19 plan.’’.

20 (8) Section 1927(i) (42 U.S.C. 1396r–8(i)) is amend21 ed to read as follows:

22 ‘‘(i) ANNUAL REPORT ON REBATE PROGRAM.—Not

23 later than May 1 of each year, the Secretary shall submit

24 to the Committee on Finance of the Senate, the Commit25 tee on Energy and Commerce of the House of Representa-
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1 tives, and the Committee on Aging of the Senate a report

2 on the operation of the rebate agreements required for

3 covered outpatient drugs under this section in the preced4 ing fiscal year, and shall include in the report such infor5 mation in addition to the information required to be re6 ported under section 601(d) of the Veterans Health Care

7 Act of 1992 as the Secretary considers appropriate.’’.

8 (9) Section 1927(j) (42 U.S.C. 1396r–8(j)) is amend9 ed to read as follows:

10 ‘‘(j) EXEMPTION FROM CERTAIN REQUIREMENTS

11 FOR CERTAIN HEALTH MAINTENANCE ORGANIZATIONS

12 AND HOSPITALS.—

13 ‘‘(1) CERTAIN HEALTH MAINTENANCE ORGANI14 ZATIONS AND PHARMACIES.—The requirements of

15 subsections (g) and (h) shall not apply with respect

16 to covered outpatient drugs dispensed by—

17 ‘‘(A) an entity which receives payment

18 under a prepaid capitation basis or under any

19 other risk basis in accordance with section

20 1903(m)(2)(A) for services provided under the

21 State plan; or

22 ‘‘(B) a pharmacy that is owned or operated

23 by a qualified health maintenance organization

24 (as defined in section 1310(d) of the Public
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1 Health Service Act) that operates its own pro2 spective drug use review program.

3 ‘‘(2) HOSPITALS WITH INDEPENDENT FOR4 MULARY SYSTEMS.—

5 ‘‘(A) IN GENERAL.—The requirements of

6 subsections (g) and (h) shall not apply with re7 spect to covered outpatient drugs dispensed by

8 a hospital providing medical assistance under

9 the State plan that dispenses such drugs under

10 a drug formulary system.

11 ‘‘(B) APPLICATION OF STATE FOR12 MULARY.—Nothing in subparagraph (A) shall

13 be construed to permit payment to be made

14 under the State plan for a covered outpatient

15 drug that is included in a drug formulary but

16 that is not included in the State formulary

17 under subsection (d)(5).

18 ‘‘(3) CONSTRUCTION IN DETERMINING BEST

19 PRICE.—Nothing in this subsection shall be con20 strued to exclude any covered outpatient drugs sub21 ject to the provisions of this subsection from the de22 termination of the best price (as defined in sub23 section (c)(1)(C)) for such drugs.’’.

24 (10) Section 1927(k) (42 U.S.C. 1396r–8(k)) is

25 amended—
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1 (A) in paragraph (1), by striking ‘‘calendar

2 quarter’’ and inserting ‘‘rebate period’’;

3 (B) in paragraph (2)—

4 (i) in the matter before clause (i) of sub5 paragraph (A), strike ‘‘paragraph (5)’’ and in6 sert ‘‘subparagraph (D)’’,

7 (ii) by striking ‘‘and’’ at the end of sub8 paragraph (A),

9 (iii) by striking the period at the end of

10 subparagraph (C) and inserting ‘‘; and’’, and

11 (iv) by adding at the end the following new

12 subparagraph:

13 ‘‘(D) a drug which may be sold without a

14 prescription (commonly referred to as an ‘over15 the-counter drug’), if the drug is prescribed by

16 a physician (or other person authorized to pre17 scribe under State law).’’;

18 (C) in paragraph (3)—

19 (i) in subparagraph (E), by striking ‘‘****

20 emergency room visits’’,

21 (ii) in subparagraph (F), by striking

22 ‘‘sevices’’ and inserting ‘‘services’’, and

23 (iii) in subparagraph (H), by inserting

24 ‘‘services’’ after ‘‘dialysis’’;

25 (D) by striking paragraph (4);
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1 (E) by amending paragraph (5) to read as fol2 lows:

3 ‘‘(5) MANUFACTURER.—The term ‘manufac4 turer’ means, with respect to a covered outpatient

5 drug—

6 ‘‘(A) the entity (if any) that both manufac7 tures and distributes the drug, or

8 ‘‘(B) if no such entity exists, the entity

9 that distributes the drug.

10 Such term does not include a wholesale distributor

11 of the drug that does not hold a National Drug Code

12 number for the drug or a retail pharmacy licensed

13 under State law.’’;

14 (F) in paragraph (6), by striking ‘‘, which ap15 pears’’ and all that follows and inserting ‘‘which is

16 accepted by any of the compendia described in sub17 section (g)(2)(C)(ii).’’;

18 (G) in paragraph (7)—

19 (i) in subparagraph (A)(i), by striking

20 ‘‘calendar quarter’’ and inserting ‘‘rebate pe21 riod’’,

22 (ii) in subparagraph (A)(i), by striking

23 ‘‘paragraph (5)’’ and inserting ‘‘paragraph

24 (2)(D)’’,
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1 (iii) in subparagraph (A)(ii), by inserting

2 ‘‘or product licensing application’’ after ‘‘appli3 cation’’,

4 (iv) in subparagraph (C)(i), by striking

5 ‘‘pharmaceuutically’’ and inserting ‘‘pharma6 ceutically’’, and

7 (v) in subparagraph (C)(iii), by striking ‘‘,

8 provided that’’ and inserting ‘‘and’’; and

9 (H) by redesignating paragraph (8) as para10 graph (9) and by inserting after paragraph (7) the

11 following new paragraph:

12 ‘‘(8) REBATE PERIOD.—The term ‘rebate pe13 riod’ means, with respect to an agreement under

14 subsection (a), a calendar quarter or other period

15 specified with respect to the agreement under sub16 section (b)(1)(A) for the payment of rebates.’’.

17 (d) FUNDING.—Section 4401(b)(2) of OBRA–1990

18 is amended by striking ‘‘75 percent,’’ and all that follows

19 and inserting ‘‘75 percent.’’.

20 (e) DEMONSTRATION PROJECTS.—Section

21 4401(c)(1) of OBRA–1990 is amended—

22 (A) in subparagraph (A), by striking ‘‘10’’ and

23 inserting ‘‘5’’; and

24 (B) in subparagraph (C), by striking ‘‘regi25 ment’’ and inserting ‘‘regimen’’.
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1 (f) STUDIES.—Section 4401(d) of OBRA–1990 is

2 amended—

3 (1) in paragraph (1)(A), by striking ‘‘other in4 stitutional facilities, and managed care plans’’ and

5 inserting ‘‘nursing facilities, intermediate care facili6 ties for the mentally retarded, and health mainte7 nance organizations’’;

8 (2) in paragraph (1)(B), by striking ‘‘under

9 this subsection’’ and inserting ‘‘under this para10 graph’’;

11 (3) in paragraph (1)(B)(i), by striking ‘‘under

12 this section’’ and inserting ‘‘under section 1927 of

13 the Social Security Act’’;

14 (4) in paragraph (1)(B)(ii)—

15 (A) by striking ‘‘drug use review’’ and in16 serting ‘‘the type of drug use review that is’’,

17 and

18 (B) by striking ‘‘under this section’’ and

19 inserting ‘‘under such section’’;

20 (5) in paragraph (1)(B)(iii), by striking ‘‘under

21 this title’’ and inserting ‘‘under title XIX of the So22 cial Security Act’’;

23 (6) in paragraph (1)(C)—

24 (A) by striking ‘‘May 1, 1991’’ and insert25 ing ‘‘May 1, 1992’’, and
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1 (B) by striking ‘‘hereafter’’;

2 (7) in paragraph (2), by striking ‘‘the Commit3 tees on Aging of the Senate and House of Rep4 resentatives an annual report and inserting ‘‘the

5 Committee on Aging of the Senate a report’’;

6 (8) in paragraph (3)—

7 (A) in subparagraph (A), by striking ‘‘,

8 acting in consultation with the Comptroller

9 General,’’,

10 (B) by indenting subparagraph (B) an ad11 ditional 2 ems, and

12 (C) in subparagraph (B)—

13 (i) by striking ‘‘December 31, 1991,

14 the Secretary and the Comptroller Gen15 eral’’ and inserting ‘‘June 1, 1993, the

16 Secretary’’, and

17 (ii) by striking ‘‘the Committees on

18 Aging of the Senate and the House of Rep19 resentatives’’ and inserting ‘‘the Commit20 tee on Aging of the Senate’’;

21 (9) in paragraph (4)(A), by striking ‘‘each’’ and

22 by striking the semicolon and inserting a comma;

23 and

24 (10) by striking paragraphs (5) and (6).
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1 PART III—RESTRICTIONS ON DIVESTITURE OF

2 ASSETS AND ESTATE RECOVERY

3 SEC. 5111. TRANSFER OF ASSETS.

4 (a) PERIOD OF INELIGIBILITY.—

5 (1) EXTENDING LOOK-BACK PERIOD TO 36

6 MONTHS.—Section 1917(c)(1) (42 U.S.C.

7 1396p(c)(1)) is amended by striking ‘‘30-month pe8 riod’’ and inserting ‘‘36-month period’’.

9 (2) ELIMINATING 30-MONTH LIMIT ON PERIOD

10 OF INELIGIBILITY.—The second sentence of such

11 section is amended by striking ‘‘equal to’’ and all

12 that follows and inserting the following: ‘‘equal to—

13 ‘‘(A) the total uncompensated value of the re14 sources so transferred; divided by

15 ‘‘(B) the average monthly cost, to a private pa16 tient at the time of the application, of nursing facil17 ity services in the State or, at State option, in the

18 community in which the individual is institutional19 ized.’’.

20 (3) CUMULATIVE PERIODS OF INELIGIBILITY IN

21 THE CASE OF MULTIPLE TRANSFERS.—Such sen22 tence is further amended by inserting ‘‘(or, in the

23 case of a transfer which occurs during a period of

24 ineligibility attributable to a previous transfer, the

25 first month after the end of all periods of ineligibil-
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1 ity attributable to any previous transfer)’’ after

2 ‘‘shall begin with the month in which such resources

3 were transferred’’.

4 (b) CRITERIA FOR UNDUE HARDSHIP EXCEPTION.—

5 Section 1917(c)(2)(D) (42 U.S.C. 1396p(c)(2)(D)) is

6 amended to read as follows:

7 ‘‘(D) the State agency determines, under proce8 dures established by the State (in accordance with

9 standards specified by the Secretary) that the denial

10 of eligibility would work an undue hardship (in ac11 cordance with criteria established by the Sec12 retary).’’.

13 (c) TREATMENT OF JOINTLY HELD ASSETS.—Sec14 tion 1917(c) (42 U.S.C. 1936p(c)) is further amended by

15 adding at the end the following new paragraph:

16 ‘‘(6) For purposes of this subsection, in the case of

17 an asset held by an individual in common with another

18 person or persons in a joint tenancy or a similar arrange19 ment, the asset (or the affected portion thereof) shall be

20 considered to be transferred by such individual when any

21 action is taken, either by such individual or by any other

22 person, that reduces or eliminates such individual’s owner23 ship or control of such asset.’’.
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1 (d) MEDICAID QUALIFYING TRUSTS.—Section

2 1902(k) (42 U.S.C. 1396a(k)) is amended to read as fol3 lows:

4 ‘‘(k) TREATMENT OF TRUST AMOUNTS.—

5 ‘‘(1) IN GENERAL.—For purposes of determin6 ing an individual’s eligibility for or amount of bene7 fits under a State plan under this title, subject to

8 paragraph (4), the following rules shall apply to a

9 trust (which term includes, for purposes of this sub10 section, any similar legal instrument or device, such

11 as an annuity) established by such individual:

12 ‘‘(A) REVOCABLE TRUSTS.—In the case of

13 a revocable trust—

14 ‘‘(i) the corpus of the trust shall be

15 considered resources available to the indi16 vidual,

17 ‘‘(ii) payments from the trust to or

18 for the benefit of the individual shall be

19 considered income of the individual, and

20 ‘‘(iii) any other payments from the

21 trust shall be considered a transfer of as22 sets by the individual subject to section

23 1917(c).

24 ‘‘(B) IRREVOCABLE TRUSTS WHICH MAY

25 BENEFIT GRANTOR.—In the case of an irrev-
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1 ocable trust, if there are any circumstances

2 under which payment from the trust could be

3 made to or for the benefit of the individual—

4 ‘‘(i) the corpus of the trust (or that

5 portion of the corpus from which, or from

6 the increase whereof, payment to the indi7 vidual could be made) shall be considered

8 resources available to the individual, and

9 payments from that portion of the corpus

10 (or increase)—

11 ‘‘(I) to or for the benefit of the

12 individual, shall be considered income

13 of the individual, and

14 ‘‘(II) for any other purpose, shall

15 be considered a transfer of assets by

16 the individual subject to the provisions

17 of section 1917(c); and

18 ‘‘(ii) any portion of the trust from

19 which (or from the income whereof) no

20 payment could under any circumstances be

21 made to the individual shall be considered,

22 as of the date of establishment of the trust

23 (or, if later, the date on which payment to

24 the individual was foreclosed), a transfer of

25 assets by the individual subject to section
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1 1917(c), and payments from such portion

2 of the trust after such date shall be dis3 regarded.

4 ‘‘(C) IRREVOCABLE TRUSTS WHICH CAN5 NOT BENEFIT GRANTOR.—In the case of an ir6 revocable trust, if no payment may be made

7 from the trust under any circumstances to or

8 for the benefit of the individual—

9 ‘‘(i) the corpus of the trust shall be

10 considered, as of the date of establishment

11 of the trust (or, if later, the date on which

12 payment to the individual was foreclosed),

13 a transfer of assets subject to section

14 1917(c), and

15 ‘‘(ii) payments from the trust after

16 the date specified in clause (i) shall be dis17 regarded.

18 ‘‘(2) DETERMINATION OF GRANTOR.—

19 ‘‘(A) TREATMENT OF ACTS BY INDIVIDUAL

20 AND OTHERS.—For purposes of this subsection,

21 an individual shall be considered to have estab22 lished a trust if—

23 ‘‘(i) the individual (or the individual’s

24 spouse), or a person (including a court or

25 administrative body) with legal authority
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1 to act in place of or on behalf of such indi2 vidual (or spouse), or any person (includ3 ing any court or administrative body) act4 ing at the direction or upon the request of

5 such individual (or spouse), established

6 (other than by will) such a trust, and

7 ‘‘(ii) assets of the individual (as de8 fined in subparagraph (B)) were used to

9 form all or part of the corpus of such

10 trust.

11 ‘‘(B) ASSETS.—For purposes of this para12 graph, assets of an individual include all income

13 and resources of the individual and of the indi14 vidual’s spouse, including any income or re15 sources which the individual (or spouse) is enti16 tled to but does not receive because of action by

17 the individual (or spouse), by a person (includ18 ing a court or administrative body) with legal

19 authority to act in place of or on behalf of such

20 individual (or spouse), or by any person (includ21 ing any court or administrative body) acting at

22 the direction or upon the request of such indi23 vidual (or spouse).

24 ‘‘(C) TRUSTS CONTAINING ASSETS OF

25 MORE THAN ONE INDIVIDUAL.—In the case of
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1 a trust whose corpus includes assets of an indi2 vidual (as determined pursuant to subpara3 graph (A)) and assets of any other person or

4 persons, the provisions of this subsection shall

5 apply to the portion of the trust attributable to

6 the assets of the individual.

7 ‘‘(3) APPLICATION; RELATION TO OTHER PRO8 VISIONS.—Subject to paragraph (4), this subsection

9 shall apply without regard to—

10 ‘‘(A) the purposes for which the trust is es11 tablished,

12 ‘‘(B) whether the trustees have or exercise

13 any discretion under the trust,

14 ‘‘(C) any restrictions on when or whether

15 distributions may be made from the trust, or

16 ‘‘(D) any restrictions on the use of dis17 tributions from the trust.

18 ‘‘(4) EXCEPTIONS AND HARDSHIP WAIVER.—

19 ‘‘(A) EXCEPTION FOR CERTAIN TRUSTS.—

20 This subsection shall not apply to any of the

21 following trusts:

22 ‘‘(i) A trust established for the benefit

23 of a disabled individual (as determined

24 under section 1614(a)(3)) by a parent,
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1 grandparent, or other representative payee

2 of the individual.

3 ‘‘(ii) A trust established in a State for

4 the benefit of an individual if—

5 ‘‘(I) the trust is composed only of

6 pension, Social Security, and other in7 come to the individual (and accumu8 lated income in the trust),

9 ‘‘(II) the State will receive any

10 amounts remaining in the trust upon

11 the death of the individual, and

12 ‘‘(III) the State makes medical

13 assistance available to individuals de14 scribed in section

15 1902(a)(10)(A)(ii)(V), but does not

16 make such assistance available to any

17 group of individuals under section

18 1902(a)(10)(C).

19 ‘‘(B) SPECIAL TREATMENT OF ANNU20 ITIES.—In this subsection, the term ‘trust’ in21 cludes an annuity only to such extent and in

22 such manner as the Secretary specifies.

23 ‘‘(C) HARDSHIP WAIVER.—The State

24 agency shall establish procedures (in accordance

25 with standards specified by the Secretary)
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1 under which the agency waives the application

2 of this subsection with respect to an individual

3 if the individual establishes (under criteria es4 tablished by the Secretary) that such applica5 tion would work an undue hardship on the indi6 vidual.’’.

7 (e) EFFECTIVE DATE.—(1) The amendments made

8 by this section shall apply, except as provided in this sub9 section, to payments under title XIX of the Social Security

10 Act for calendar quarters beginning on or after October

11 1, 1993, without regard to whether or not final regulations

12 to carry out such amendments have been promulgated by

13 such date.

14 (2) The amendments made by this section shall not

15 apply—

16 (A) to medical assistance provided for services

17 furnished before October 1, 1993,

18 (B) with respect to resources disposed of before

19 May 11, 1993,

20 (C) with respect to trusts established before

21 May 11, 1993, or

22 (D) with respect to inter-spousal transfers.

23 SEC. 5112. MEDICAID ESTATE RECOVERIES.

24 (a) REQUIRING ESTABLISHMENT OF ESTATE RECOV25 ERY PROGRAMS.—
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1 (1) IN GENERAL.—Section 1902(a)(51) (42

2 U.S.C. 1396a(a)(51)) is amended by striking ‘‘and

3 (B)’’ and inserting ‘‘(B) provide for an estate recov4 ery program that meets the requirements of section

5 1917(b)(1), and (C)’’.

6 (2) REQUIREMENTS FOR ESTATE RECOVERY

7 PROGRAMS.—Section 1917(b) (42 U.S.C. 1396p(b))

8 is amended—

9 (A) in paragraph (1)—

10 (i) by striking ‘‘(b)(1)’’ and inserting

11 ‘‘(2)’’, and

12 (ii) by striking ‘‘(a)(1)(B)’’ and in13 serting ‘‘(a)(1)(B)(i)’’;

14 (B) in paragraph (2), by striking ‘‘(2) Any

15 adjustment or recovery under’’ and inserting

16 ‘‘(3) Any adjustment or recovery under an es17 tate recovery program under’’; and

18 (C) by inserting before paragraph (2), as

19 designated by subparagraph (A), the following:

20 ‘‘(b)(1) For purposes of section 1902(a)(51)(B), the

21 requirements for an estate recovery program of a State

22 are as follows:

23 ‘‘(A) The program provides for identifying and

24 tracking (and, at the option of the State, preserving)

25 resources (whether excluded or not) of individuals
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1 who are furnished any of the following long-term

2 care services for which medical assistance is pro3 vided under this title:

4 ‘‘(i) Nursing facility services.

5 ‘‘(ii) Home and community-based services

6 (as defined in section 1915(d)(5)(C)(i)).

7 ‘‘(iii) Services described in section

8 1905(a)(14) (relating to services in an institu9 tion for mental diseases).

10 ‘‘(iv) Home and community care provided

11 under section 1929.

12 ‘‘(v) Community supported living arrange13 ments services provided under section 1930.

14 ‘‘(B) The program provides for promptly

15 ascertaining—

16 ‘‘(i) when such an individual dies;

17 ‘‘(ii) in the case of such an individual who

18 was married at the time of death, when the sur19 viving spouse dies; and

20 ‘‘(iii) at the option of the State, cases in

21 which adjustment or recovery may not be made

22 at the time of death because of the application

23 of paragraph (3)(A) or paragraph (3)(B).
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1 ‘‘(C)(i) The program provides for the collection

2 consistent with paragraph (3) of an amount (not to

3 exceed the amount described in clause (ii)) from—

4 ‘‘(I) the estate of the individual;

5 ‘‘(II) in the case of an individual described

6 in subparagraph (B)(ii), from the estate of the

7 surviving spouse; or

8 ‘‘(III) at the option of the State, in a case

9 described in subparagraph (B)(iii), from the ap10 propriate person.

11 ‘‘(ii) The amount described in this clause is the

12 amount of medical assistance correctly paid under

13 this title for long-term care services described in

14 subparagraph (A) furnished on behalf of the individ15 ual.’’.

16 (b) HARDSHIP WAIVER.—Section 1917(b) (42 U.S.C.

17 1396p(b)) is further amended by adding at the end the

18 following new paragraph:

19 ‘‘(4) The State agency shall establish procedures (in

20 accordance with standards specified by the Secretary)

21 under which the agency waives the application of this sub22 section if such application would work an undue hardship

23 (in accordance with criteria established by the Sec24 retary).’’.
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1 (c) DEFINITION OF ESTATE.—Section 1917(b) (42

2 U.S.C. 1396(b)) is further amended by adding at the end

3 the following new paragraph:

4 ‘‘(5) For purposes of this section, the term ‘estate’,

5 with respect to a deceased individual, includes all real and

6 personal property and other assets in which the individual

7 had any legally cognizable title or interest at the time of

8 his death, including such assets conveyed to a survivor,

9 heir, or assign of the deceased individual through joint

10 tenancy, survivorship, life estate, living trust, or other ar11 rangement.’’.

12 (d) EFFECTIVE DATE.—

13 (1)(A) The amendments made by subsections

14 (a) and (b) apply (except as provided under subpara15 graph (B)) to payments under title XIX of the So16 cial Security Act for calendar quarters beginning on

17 or after October 1, 1993, without regard to whether

18 or not final regulations or standards to carry out

19 such amendments have been promulgated by such

20 date.

21 (B) In the case of a State plan for medical as22 sistance under title XIX of the Social Security Act

23 which the Secretary of Health and Human Services

24 determines requires State legislation (other than leg25 islation appropriating funds) in order for the plan to
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1 meet the additional requirements imposed by the

2 amendments made by subsections (a) and (b), the

3 State plan shall not be regarded as failing to comply

4 with the requirements of such title solely on the

5 basis of its failure to meet these additional require6 ments before the first day of the first calendar quar7 ter beginning after the close of the first regular ses8 sion of the State legislature that begins after the

9 date of the enactment of this Act. For purposes of

10 the previous sentence, in the case of a State that has

11 a 2-year legislative session, each year of such session

12 shall be deemed to be a separate regular session of

13 the State legislature.

14 (2) The amendments made by this section shall

15 not apply to individuals who died before October 1,

16 1993.

17 SEC. 5113. CLOSING LOOPHOLE PERMITTING WEALTHY IN18 DIVIDUALS TO QUALIFY FOR MEDICAID.

19 (a) IN GENERAL.—Section 1902(r)(2) (42 U.S.C.

20 1396a(r)(2)) is amended by adding at the end the follow21 ing:

22 ‘‘(C)(i) Notwithstanding subparagraph (A), except as

23 provided in clause (ii), a State plan may not provide pur24 suant to this paragraph for disregarding any assets—
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1 ‘‘(I) to the extent that payments are made

2 under a long-term care insurance policy; or

3 ‘‘(II) because an individual has received (or is

4 entitled to receive) benefits for a specified period of

5 time under a long-term care insurance policy.

6 ‘‘(ii) Clause (i) shall not apply to State plan provi7 sions that are approved as of May 14, 1993.’’.

8 (b) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall take effect on the date of the enact10 ment of this Act.

11 PART IV—IMPROVEMENT IN IDENTIFICATION

12 AND COLLECTION OF THIRD PARTY PAYMENTS

13 SEC. 5116. LIABILITY OF THIRD PARTIES TO PAY FOR CARE

14 AND SERVICES.

15 (a) LIABILITY OF ERISA PLANS.—(1) Section

16 1902(a)(25)(A) (42 U.S.C. 1396a(a)(25)(A)) is amended

17 by striking ‘‘insurers)’’ and inserting ‘‘insurers and group

18 health plans (as defined in section 607(1) of the Employee

19 Retirement Income Security Act of 1974) and including

20 a service benefit plan and a health maintenance organiza21 tion)’’.

22 (2) Section 1903(o) of such Act (42 U.S.C. 1396b(o))

23 is amended by striking ‘‘regulation)’’ and inserting ‘‘regu24 lation and including a group health plan (as defined in

25 section 607(1) of the Employee Retirement Income Secu-
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1 rity Act of 1974)), a service benefit plan, and a health

2 maintenance organization’’.

3 (b) REQUIRING STATE TO PROHIBIT INSURERS

4 FROM TAKING MEDICAID STATUS INTO ACCOUNT.—Sec5 tion 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (F);

8 (2) by adding ‘‘and’’ at the end of subpara9 graph (G); and

10 (3) by adding after subparagraph (G) the fol11 lowing new subparagraph:

12 ‘‘(H) that the State prohibits any health

13 insurer (including a group health plan, as de14 fined in section 607(1) of the Employee Retire15 ment Income Security Act of 1974, a service

16 benefit plan, and a health maintenance organi17 zation), in enrolling an individual or in making

18 any payments for benefits to the individual or

19 on the individual’s behalf, from taking into ac20 count that the individual is eligible for or is

21 provided medical assistance under a State

22 plan;’’.

23 (c) STATE RIGHT TO SUBROGATION.—Section

24 1902(a)(25) (42 U.S.C. 1396a(a)(25)), as amended by

25 subsection (b), is further amended—
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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (G);

3 (2) by adding ‘‘and’’ at the end of subpara4 graph (H); and

5 (3) by adding after subparagraph (H) the fol6 lowing new subparagraph:

7 ‘‘(I) that to the extent that payment has

8 been made under the State plan for medical as9 sistance in any case where a third party has a

10 legal liability to make payment for such assist11 ance, the State is subrogated to the right of any

12 other party to payment for such assistance;’’.

13 (d) EFFECTIVE DATE.—(1) Except as provided in

14 paragraph (2), the amendments made by subsections

15 (a)(1), (b), and (c) shall apply to calendar quarters begin16 ning on or after October 1, 1993, without regard to wheth17 er or not final regulations to carry out such amendments

18 have been promulgated by such date.

19 (2) In the case of a State plan for medical assistance

20 under title XIX of the Social Security Act which the Sec21 retary of Health and Human Services determines requires

22 State legislation (other than legislation appropriating

23 funds) in order for the plan to meet the additional require24 ments imposed by the amendments made by subsections

25 (a) and (b), the State plan shall not be regarded as failing
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1 to comply with the requirements of such title solely on the

2 basis of its failure to meet these additional requirements

3 before the first day of the first calendar quarter beginning

4 after the close of the first regular session of the State leg5 islature that begins after the date of the enactment of this

6 Act. For purposes of the previous sentence, in the case

7 of a State that has a 2-year legislative session, each year

8 of such session shall be deemed to be a separate regular

9 session of the State legislature.

10 (3) The amendment made by subsection (a)(2) shall

11 apply to items and services furnished on or after October

12 1, 1993.

13 SEC. 5117. HEALTH COVERAGE CLEARINGHOUSE.

14 (a) IN GENERAL.—The Social Security Act is

15 amended by adding at the end the following new title:

16 ‘‘TITLE XXI—HEALTH COVERAGE

17 CLEARINGHOUSE

18 ‘‘ESTABLISHMENT OF CLEARINGHOUSE

19 ‘‘SEC. 2101. (a) IN GENERAL.—The Secretary shall

20 establish and operate a Health Coverage Clearinghouse (in

21 this title referred to as the ‘Clearinghouse’) for the pur22 pose of identifying, for beneficiaries of a covered health

23 program (as defined in subsection (c)), third parties

24 (which may include a covered health program) which may
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1 be liable for payment for health care items and services

2 furnished to such beneficiaries under such program.

3 ‘‘(b) DIRECTOR.—The Clearinghouse shall be headed

4 by a Director (in this title referred to as the ‘Director’)

5 appointed by the Secretary.

6 ‘‘(c) COVERED HEALTH PROGRAM DEFINED.—In

7 this title, the term ‘covered health program’ means any

8 of the following under which payment is made for health

9 care items or services furnished to a beneficiary:

10 ‘‘(1) The medicare program under title XVIII.

11 ‘‘(2) A State plan for medical assistance under

12 title XIX (including a State plan operating under a

13 Statewide waiver under section 1115).

14 ‘‘(3) The Indian Health Service and any pro15 gram under the Indian Health Care Improvement

16 Act.

17 ‘‘(4) A State program under title V that pro18 vides payment for items or services.

19 ‘‘(d) OTHER DEFINITIONS.—In this title:

20 ‘‘(1) The term ‘administrator’ means, with re21 spect to the covered health program described in—

22 ‘‘(A) subsection (c)(1), the Administrator

23 of the Health Care Financing Administration;

24 ‘‘(B) subsection (c)(2), the single State

25 agency referred to in section 1902(a)(5);
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1 ‘‘(C) subsection (c)(3), the Director of the

2 Indian Health Service; and

3 ‘‘(D) subsection (c)(4), the State agency

4 receiving funds under title V.

5 ‘‘(2) The term ‘group health plan’ has the

6 meaning given such term in section

7 6103(l)(12)(E)(ii) of such Code.

8 ‘‘(3) The term ‘qualified employer’ has the

9 meaning given such term in section

10 6103(l)(12)(E)(iii) of the Internal Revenue Code of

11 1986.

12 ‘‘PROVISION OF INFORMATION

13 ‘‘SEC. 2102. (a) REQUEST FOR INFORMATION.—An

14 administrator of a covered health program may request

15 from the Director information concerning the employment

16 and group health coverage of a program beneficiary, the

17 beneficiary’s spouse, and (if the beneficiary is a dependent

18 child) the beneficiary’s parents. The Director shall provide

19 such information if the request—

20 ‘‘(1) is in such form and manner and at such

21 a time as the Director may require, and

22 ‘‘(2) specifies the name and tax identification

23 number of the beneficiary.

24 ‘‘(b) DATA MATCHING PROGRAM.—

25 ‘‘(1) REQUEST BY DIRECTOR.—The Director

26 shall, at such intervals as the Director finds appro-
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1 priate, transmit to the Secretary of the Treasury the

2 names and tax identification numbers of bene3 ficiaries with respect to whom a request has been

4 made pursuant to subsection (a), and request that

5 such Secretary disclose to the Commissioner of So6 cial Security the following information:

7 ‘‘(A) Whether the beneficiary is married

8 and, if so, the name of the spouse and such

9 spouse’s tax identification number.

10 ‘‘(B) If the beneficiary is a dependent

11 child, the name of and tax identification num12 bers of the beneficiary’s parents.

13 ‘‘(2) INFORMATION FROM COMMISSIONER OF

14 SOCIAL SECURITY.—The Secretary, acting through

15 the Commissioner of Social Security, shall, upon

16 written request from the Director, disclose to the Di17 rector, the following information:

18 ‘‘(A) For each individual who is identified

19 as having received wages (as defined in section

20 3401(a) of the Internal Revenue Code of 1986)

21 from, and as having available coverage under a

22 group health plan of, an employer in a previous

23 year—

24 ‘‘(i) the name and taxpayer identifica25 tion number of the individual;
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1 ‘‘(ii) the name, address, and taxpayer

2 identification number of the employer, and

3 whether such employer is a qualified em4 ployer; and

5 ‘‘(iii) whether the employer has made

6 available a group health plan to the em7 ployee and the plan coverage provided (if

8 any) with respect to the employee and fam9 ily members of the employee under the

10 group health plan.

11 ‘‘(B) For each individual who is identified

12 as married and whose spouse is identified as

13 having received wages (as defined in section

14 3401(a) of the Internal Revenue Code of 1986)

15 from, and as having available coverage under a

16 group health plan of, an employer in a previous

17 year—

18 ‘‘(i) the name and taxpayer identifica19 tion number of the individual and of the

20 individual’s spouse;

21 ‘‘(ii) the name, address, and taxpayer

22 identification number of the spouse’s em23 ployer, and whether such employer is a

24 qualified employer; and
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1 ‘‘(iii) whether the spouse’s employer

2 has made available a group health plan to

3 the spouse and the plan coverage provided

4 (if any) with respect to the spouse and

5 family members of the spouse under the

6 group health plan.

7 ‘‘(C) For each individual who is identified

8 as a dependent child and whose parent is iden9 tified as having received wages (as defined in

10 section 3401(a) of the Internal Revenue Code

11 of 1986) from, and as having available coverage

12 under a group health plan of, an employer in a

13 previous year—

14 ‘‘(i) the name and taxpayer identifica15 tion number of the individual and of the

16 individual’s parent;

17 ‘‘(ii) the name, address, and taxpayer

18 identification number of the parent’s em19 ployer, and whether such employer is a

20 qualified employer; and

21 ‘‘(iii) whether the parent’s employer

22 has made available a group health plan to

23 the parent and the plan coverage provided

24 (if any) with respect to the parent and de-
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1 pendent children of the parent under the

2 group health plan.

3 ‘‘(3) INFORMATION FROM EMPLOYERS.—The

4 Director shall—

5 ‘‘(A) request, from the employer of each

6 individual (including each spouse) with respect

7 to whom information was received from the

8 Commissioner of Social Security pursuant to

9 paragraph (2), specific information concerning

10 coverage of such individual (and of the individ11 ual’s spouse and dependent children) under the

12 employer’s group health plan (including the pe13 riod and nature of the coverage, and the name,

14 address, and identifying number of the plan),

15 and

16 ‘‘(B) furnish the information received in

17 response to such request with respect to an in18 dividual (or such individual’s spouse or depend19 ent children) to the administrator requesting

20 such information pursuant to subsection (a).

21 ‘‘REQUIREMENT THAT EMPLOYERS FURNISH

22 INFORMATION

23 ‘‘SEC. 2103. (a) IN GENERAL.—An employer shall

24 furnish to the Director the information requested pursu25 ant to section 2102(b)(3) within 30 days after receipt of

26 such a request.
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1 ‘‘(b) SUNSET ON REQUIREMENT.—Subsection (a)

2 shall not apply to inquiries made after September 30,

3 1998.

4 ‘‘(c) CIVIL MONEY PENALTY FOR FAILURE TO CO5 OPERATE.—

6 ‘‘(1) IN GENERAL.—An employer (other than a

7 Federal or other governmental entity) who willfully

8 or repeatedly fails to provide timely and accurate re9 sponse to a request for information pursuant to sec10 tion 2102(b)(3) shall be subject, in addition to any

11 other penalties that may be prescribed by law, to a

12 civil money penalty of not to exceed $1,000 for each

13 individual with respect to whom such a request is

14 made.

15 ‘‘(2) ENFORCEMENT AUTHORITY.—In cases of

16 failure to respond to the Director in accordance with

17 subsection (a) to inquiries relating to requests pur18 suant to section 2102, the provisions of section

19 1128A (other than subsections (a) and (b)) shall

20 apply to civil money penalties under paragraph (1)

21 in the same manner as such provisions apply to pen22 alties or proceedings under section 1128A(a).

23 ‘‘DATA BANK

24 ‘‘SEC. 2104. (a) MAINTENANCE OF INFORMATION.—

25 The Clearinghouse shall maintain a data bank, containing

26 information on individuals obtained pursuant to this title.
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1 Individual information in the data bank shall be retained

2 for not less than one year after the date the information

3 was obtained.

4 ‘‘(b) DISCLOSURE OF INFORMATION IN DATA

5 BANK.—

6 ‘‘(1) IN GENERAL.—The Director is authorized

7 (subject to paragraph (2)) to disclose any informa8 tion in the data bank established pursuant to sub9 section (a) with respect to an individual (or an indi10 vidual’s spouse or parent)—

11 ‘‘(A) to the Commissioner of Social Secu12 rity, the Secretary of the Treasury, administra13 tors, employers, and insurers, to the extent nec14 essary to assist such administrators;

15 ‘‘(B) to Federal and State law enforcement

16 officials responsible for enforcement of civil or

17 criminal laws, in connection with investigations

18 or administrative or judicial law enforcement

19 proceedings relating to a covered health pro20 gram; and

21 ‘‘(C) for research or statistical purposes.

22 ‘‘(2) RESTRICTIONS ON DISCLOSURE.—Informa23 tion in the data bank may be disclosed under this

24 subsection only for purposes of, and to the extent
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1 necessary in, determining the extent to which an in2 dividual is covered under any group health plan.

3 ‘‘(c) USE OF CONTRACTORS.—The responsibilities of

4 the Clearinghouse under this section may be carried out

5 by contract.

6 ‘‘(d) FEES.—The Clearinghouse shall—

7 ‘‘(1) establish fees for services under this sec8 tion designed to cover the full costs to the Clearing9 house of providing such services, and

10 ‘‘(2) require the payment of such fees to pro11 vide such services.’’.

12 (b) CONFORMING MEDICARE AMENDMENTS.—Sec13 tion 1862(b)(5) (42 U.S.C. 1395y(b)(5)) is amended—

14 (1) in subparagraph (A)(i)—

15 (A) by striking ‘‘Secretary of the Treas16 ury’’ and inserting ‘‘Director of the Health Cov17 erage Clearinghouse’’,

18 (B) by striking ‘‘(as defined in section

19 6103(l)(12) of the Internal Revenue Code of

20 1986)’’ and inserting ‘‘(as defined in clause

21 (iii))’’, and

22 (C) by striking ‘‘and request’’ and all that

23 follows and inserting a period;

24 (2) in subparagraph (A)(ii)—
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1 (A) by striking ‘‘the Commissioner of the

2 Social Security Administration’’ and all that

3 follows and inserting ‘‘the Director of the

4 Health Coverage Clearinghouse to obtain and

5 disclose to the Administrator, pursuant to sec6 tion 2102(b) and to subparagraph (C) of sec7 tion 6103(l)(12) of the Internal Revenue Code

8 of 1986, the information described in section

9 2102(b) and subparagraph (B) of such section

10 6103(l)(12).’’, and

11 (B) by inserting ‘‘, pursuant to section

12 1144(c),’’ after ‘‘disclose to the Administrator’’;

13 and

14 (3) by striking subparagraph (C).

15 (c) MEDICAID USE OF CLEARINGHOUSE.—Section

16 1902(a)(25)(A) (42 U.S.C. 1396a(a)(25)(A)) is amended

17 by inserting ‘‘(including making appropriate requests to

18 the Director of the Health Coverage Clearinghouse under

19 section 2102)’’ after ‘‘all reasonable measures’’.

20 (d) COLLECTION OF THIRD PARTY PAYMENTS

21 UNDER MATERNAL AND CHILD HEALTH BLOCK GRANT

22 PROGRAM.—Section 505(a) (42 U.S.C. 705(a)) is amend23 ed—

24 (1) by striking ‘‘and’’ at the end of paragraph

25 (4),
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1 (2) by striking the period at the end of para2 graph (5) and inserting ‘‘; and’’, and

3 (3) by inserting after paragraph (5) the follow4 ing new paragraph:

5 ‘‘(6) provides for an entity providing health

6 services with assistance from the State under this

7 title taking all reasonable steps—

8 ‘‘(A) to ascertain the legal liability of third

9 parties to pay for such services, and

10 ‘‘(B) where such liability is found to exist,

11 to seek reimbursement for such services.’’.

12 (e) EFFECTIVE DATES.—

13 (1) The amendments made by subsections (a),

14 (b), and (d) shall take effect on April 1, 1995.

15 (2) The amendments made by subsection (c)

16 shall apply to allotments for years beginning with

17 fiscal year 1994.

18 SEC. 5118. MEDICAL CHILD SUPPORT.

19 (a) STATE PLAN REQUIREMENT.—Section

20 1902(a)(45) (42 U.S.C. 1396a(a)(45)) is amended by

21 striking ‘‘owed to recipients’’ and inserting ‘‘and have in

22 effect laws relating to medical child support’’.

23 (b) MEDICAL CHILD SUPPORT LAWS.—Section 1912

24 of such Act (42 U.S.C. 1396k) is amended—
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1 (1) by adding at the end of the heading the fol2 lowing: ‘‘; REQUIRED LAWS RELATING TO MEDICAL

3 CHILD SUPPORT’’; and

4 (2) by adding at the end the following new sub5 section:

6 ‘‘(c) The laws relating to medical child support, which

7 a State is required to have in effect under section

8 1902(a)(45), are as follows:

9 ‘‘(1) A law that prohibits an insurer from deny10 ing enrollment of a child under the health coverage

11 of the child’s parent on the ground that the child

12 was born out of wedlock, on the ground that the

13 child may not be claimed as a dependent on the par14 ent’s Federal income tax return, or on the ground

15 that the child does not reside with the parent or in

16 the insurer’s service area. In this subsection, the

17 term ‘insurer’ includes a group health plan, as de18 fined in section 607(1) of the Employee Retirement

19 Income Security Act of 1974, a health maintenance

20 organization, and an entity offering a service benefit

21 plan.

22 ‘‘(2) A law that requires an insurer, in any case

23 in which a parent is required by court or administra24 tive order to provide health coverage for a child and
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1 the parent is eligible for family health coverage

2 through the insurer—

3 ‘‘(A) to permit such parent, upon applica4 tion and without regard to any enrollment sea5 son restrictions, to enroll the parent and such

6 child under such family coverage;

7 ‘‘(B) if such a parent is enrolled but fails

8 to make application to obtain coverage of such

9 child, to enroll such child under such family

10 coverage upon application by the child’s other

11 parent or by the State agency administering the

12 program under this title or part D of title IV;

13 and

14 ‘‘(C) not to disenroll (or eliminate coverage

15 of) such a child unless the insurer is provided

16 satisfactory written evidence that—

17 ‘‘(i) such court or administrative

18 order is no longer in effect, or

19 ‘‘(ii) the child is or will be enrolled in

20 comparable health coverage through an21 other insurer which will take effect not

22 later than the effective date of such

23 disenrollment.

24 ‘‘(3) A law that requires an employer doing

25 business in the State, in the case of health coverage
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1 offered through employment with the employer and

2 providing coverage of a child of an employee pursu3 ant to a court or administrative order, to withhold

4 from such employee’s compensation the employee’s

5 share (if any) of premiums for health coverage (to

6 the maximum amount permitted under section

7 303(b) of the Consumer Credit Protection Act) and

8 to pay such share of premiums to the insurer.

9 ‘‘(4) A law that prohibits an insurer from im10 posing requirements upon a State agency, which is

11 acting as an agent or subrogee of an individual eligi12 ble for medical assistance under this title and cov13 ered for health benefits from the insurer, that are

14 different from requirements applicable to an agent

15 or subrogee of any other individual so covered.

16 ‘‘(5) A law that requires an insurer, in any case

17 in which a child has health coverage through the in18 surer of a noncustodial parent—

19 ‘‘(A) to provide such information to the

20 custodial parent as may be necessary for the

21 child to obtain benefits through such coverage;

22 ‘‘(B) to permit the custodial parent (or

23 provider, with the custodial parent’s approval)

24 to submit claims for covered services without

25 the approval of the noncustodial parent; and
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1 ‘‘(C) to make payment on claims submitted

2 in accordance with subparagraph (B) directly to

3 the custodial parent or the provider.

4 ‘‘(6) A law that requires the State agency under

5 this title to garnish the wages, salary, or other em6 ployment income of, and to withhold amounts from

7 State tax refunds to, any person who—

8 ‘‘(A) is required by court or administrative

9 order to provide coverage of the costs of health

10 services to a child who is eligible for medical as11 sistance under this title,

12 ‘‘(B) has received payment from a third

13 party for the costs of such services to such

14 child, but

15 ‘‘(C) has not used such payments to reim16 burse, as appropriate, either the other parent or

17 guardian of such child or the provider of such

18 services,

19 to the extent necessary to reimburse the State agen20 cy for expenditures for such costs under its plan

21 under this title, but any claims for current or past22 due child support shall take priority over any such

23 claims for the costs of such services.’’.

24 (c) EFFECTIVE DATE.—(1) Except as provided in

25 paragraph (2), the amendments made by this section
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1 apply to calendar quarters beginning on or after April 1,

2 1994, without regard to whether or not final regulations

3 to carry out such amendments have been promulgated by

4 such date.

5 (2) In the case of a State plan under title XIX of

6 the Social Security Act which the Secretary of Health and

7 Human Services determines requires State legislation in

8 order for the plan to meet the additional requirements im9 posed by the amendments made by this section, the State

10 plan shall not be regarded as failing to comply with the

11 requirements of such title solely on the basis of its failure

12 to meet these additional requirements before the first day

13 of the first calendar quarter beginning after the close of

14 the first regular session of the State legislature that be15 gins after the date of enactment of this Act. For purposes

16 of the previous sentence, in the case of a State that has

17 a 2-year legislative session, each year of such session shall

18 be deemed to be a separate regular session of the State

19 legislature.

20 PART V—ASSURING PROPER PAYMENTS TO

21 DISPROPORTIONATE SHARE HOSPITALS

22 SEC. 5121. ASSURING PROPER PAYMENTS TO DISPROPOR23 TIONATE SHARE HOSPITALS.

24 (a) DISPROPORTIONATE SHARE HOSPITALS RE25 QUIRED TO PROVIDE MINIMUM LEVEL OF SERVICES TO
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1 MEDICAID PATIENTS.—Section 1923 (42 U.S.C. 1396r–

2 4) is amended—

3 (1) in subsection (a)(1)(A), by striking ‘‘re4 quirement’’ and inserting ‘‘requirements’’;

5 (2) in subsection (b)(1), by striking ‘‘require6 ment’’ and inserting ‘‘requirements’’;

7 (3) in the heading to subsection (d), by striking

8 ‘‘REQUIREMENT’’ and inserting ‘‘REQUIREMENTS’’;

9 (4) by adding at the end of subsection (d) the

10 following new paragraph:

11 ‘‘(3) No hospital may be defined or deemed as

12 a disproportionate share hospital under a State plan

13 under this title or under subsection (b) or (e) of this

14 section unless the hospital has a medicaid inpatient

15 utilization rate (as defined in subsection (b)(2)) of

16 not less than 1 percent.’’;

17 (5) in subsection (e)(1)—

18 (A) by striking ‘‘and’’ before ‘‘(B)’’, and

19 (B) by inserting before the period at the

20 end the following: ‘‘, and (C) the plan meets the

21 requirement of subsection (d)(3) and such pay22 ment adjustments are made consistent with the

23 fourth sentence of subsection (c)’’; and

24 (6) in subsection (e)(2)—
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1 (A) in subparagraph (A), by inserting

2 ‘‘(other than the fourth sentence of subsection

3 (c))’’ after ‘‘(c)’’,

4 (B) by striking ‘‘and’’ at the end of sub5 paragraph (A),

6 (C) by striking the period at the end of

7 subparagraph (B) and inserting ‘‘, and’’, and

8 (D) by adding at the end the following new

9 subparagraph:

10 ‘‘(C) subsection (d)(3) shall apply.’’.

11 (b) LIMITING AMOUNT OF PAYMENT ADJUSTMENTS

12 FOR STATE OR COUNTY HOSPITALS TO UNCOVERED

13 COSTS.—Subsection (c) of such section is amended by

14 adding at the end the following: ‘‘A payment adjustment

15 during a year is not considered to be consistent with this

16 subsection with respect to a hospital owned or operated

17 by a State (or by an instrumentality or a unit of govern18 ment within a State) if the payment adjustment exceeds

19 the costs of furnishing hospital services (as determined by

20 the Secretary and net of payments under this title, other

21 than under this section, and by uninsured patients) by the

22 hospital to individuals who either are eligible for medical

23 assistance under the State plan or have no health insur24 ance (or other source of third party payment) for such

25 services during the year. For purposes of the preceding
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1 sentence, payments made to a hospital for services pro2 vided to indigent patients made by a State or a unit of

3 local government within a State shall not be considered

4 to be a source of third party payment.’’.

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to payments to States under sec7 tion 1903(a) of the Social Security Act for payments to

8 hospitals made under State plans after—

9 (1) the end of the State fiscal year that ends

10 during 1994, or

11 (2) in the case of a State with a State legisla12 ture which is not scheduled to have a regular legisla13 tive session in 1994, the end of the State fiscal year

14 that ends during 1995;

15 without regard to whether or not final regulations to carry

16 out such amendments have been promulgated by either

17 such date.

18 Subchapter B—Miscellaneous Provisions

19 PART I—ANTI-FRAUD AND ABUSE PROVISIONS

20 SEC. 5131. APPLICATION OF MEDICARE RULES LIMITING

21 CERTAIN PHYSICIAN REFERRALS.

22 (a) IN GENERAL.—Section 1903(i) (42 U.S.C.

23 1396b(i)), as amended by section 5174(b), is amended—

24 (A) in paragraph (12), by striking or at

25 the end,
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1 (B) in paragraph (13), by striking the pe2 riod at the end and inserting ‘‘; or’’, and

3 (C) by inserting after paragraph (13) the

4 following new paragraph:

5 ‘‘(14) with respect to any amount expended for

6 an item or service for which payment would be de7 nied under section 1877(g)(1) if the item or service

8 were furnished to an individual entitled to benefits

9 under title XVIII.’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall apply to items and services furnished

12 on or after October 1, 1993.

13 SEC. 5132. INTERMEDIATE SANCTIONS FOR KICKBACK VIO14 LATIONS.

15 (a) PENALTY FOR KICKBACKS.—Section 1128A(a)

16 (42 U.S.C. 1320a–7a(a)) is amended—

17 (1) by striking ‘‘or’’ at the end of paragraphs

18 (1) and (2);

19 (2) by adding ‘‘or’’ at the end of paragraph (3);

20 (3) by inserting after paragraph (3) the follow21 ing new paragraph:

22 ‘‘(4) carries out any activity in violation of

23 paragraph (1) or (2) of section 1128B(b);’’;
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1 (4) by striking ‘‘given).’’ at the end of the first

2 sentence and inserting ‘‘given or, in cases under

3 paragraph (4), $50,000 for each such violation).’’;

4 (5) in the second sentence, by inserting ‘‘in

5 cases under paragraphs (1), (2), and (3),’’ after ‘‘In

6 addition,’’; and

7 (6) by inserting after the second sentence, the

8 following new sentence: ‘‘In cases under paragraph

9 (4), such a person shall be subject to an assessment

10 of not more than twice the total amount of the re11 muneration offered, paid, solicited, or received in

12 violation of section 1128B(b), determined without

13 regard to whether a portion of such remuneration

14 was offered, paid, solicited, or received for a lawful

15 purpose.’’.

16 (b) AUTHORIZATION TO ACT.—The first sentence of

17 section 1128A(c)(1) (42 U.S.C. 1320a–7a(c)(1)) is

18 amended by striking all that follows ‘‘(b)’’ and inserting

19 the following: ‘‘unless, within one year after the date the

20 Secretary presents a case to the Attorney General for con21 sideration, the Attorney General brings an action in a dis22 trict court of the United States.’’.

23 (c) EFFECTIVE DATES.—

24 (1) The amendments made by subsection (a)

25 shall apply to remuneration offered, paid, solicited,
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1 or received before, on, or after the date of the enact2 ment of this Act.

3 (2) The amendment made by subsection (b)

4 shall apply to cases presented by the Secretary of

5 Health and Human Services for consideration on or

6 after the date of the enactment of this Act.

7 SEC. 5133. REQUIRING MAINTENANCE OF EFFORT FOR

8 STATE MEDICAID FRAUD CONTROL UNITS.

9 (a) IN GENERAL.—Section 1902(a)(49) (42 U.S.C.

10 1396a(a)(49)) is amended—

11 (1) by inserting ‘‘(A)’’ after ‘‘(49)’’, and

12 (2) by adding at the end the following new sub13 paragraph:

14 ‘‘(B) provide that the State will expend for its

15 medicaid fraud and abuse control unit (as defined in

16 section 1903(q)), for each State fiscal year, an

17 amount that is not less than the amount expended

18 for such unit in the State fiscal year that ended in

19 1992 adjusted to reflect the percentage increase in

20 total expenditures under the State plan between

21 such State fiscal year and the State fiscal year in22 volved;’’.

23 (b) EFFECTIVE DATE.—The amendments made by

24 subsection (a) shall apply to State fiscal years ending after

25 1993.
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1 PART II—MANAGED CARE PROVISIONS

2 SEC. 5135. MEDICAID MANAGED CARE ANTI-FRAUD PROVI3 SIONS.

4 (a) PROHIBITING AFFILIATIONS WITH INDIVIDUALS

5 DEBARRED BY FEDERAL AGENCIES.—

6 (1) IN GENERAL.—Section 1903(m) (42 U.S.C.

7 1396b(m)) is amended—

8 (A) in paragraph (2)(A)—

9 (i) by striking ‘‘and’’ at the end of

10 clause (x),

11 (ii) by striking the period at the end

12 of clause (xi) and inserting ‘‘; and’’, and

13 (iii) by adding at the end the follow14 ing new clause:

15 ‘‘(xii) the entity complies with the requirements

16 of paragraph (3) (relating to certain protections

17 against fraud and abuse).’’;

18 (B) in paragraph (2)(B), as amended by

19 section 5158(b), by striking ‘‘clause (ix)’’ and

20 inserting ‘‘clauses (ix) and (xii)’’; and

21 (C) by inserting after paragraph (2) the

22 following new paragraph:

23 ‘‘(3)(A)(i) A health maintenance organization may

24 not have a person described in clause (iv) as a director,
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1 officer, partner, or person with beneficial ownership of

2 more than 5 percent of organization’s equity.

3 ‘‘(ii) A health maintenance organization may not have

4 an employment, consulting, or other agreement with a per5 son described in clause (iv) for the provision of goods and

6 services that are significant and material to the organiza7 tion’s obligations under its contract with the State de8 scribed in paragraph (2)(A)(iii).

9 ‘‘(iii) If a health maintenance organization is not in

10 compliance with clause (i) or clause (ii)—

11 ‘‘(I) a State may continue an existing agree12 ment with the organization unless the Secretary (in

13 consultation with the Inspector General of the De14 partment of Health and Human Services) directs

15 otherwise; and

16 ‘‘(II) a State may not renew or otherwise ex17 tend the duration of an existing agreement with the

18 organization unless the Secretary (in consultation

19 with the Inspector General of the Department of

20 Health and Human Services) provides a written

21 statement describing compelling reasons that exist

22 for renewing or extending the agreement.

23 ‘‘(iv) A person described in this clause is a person

24 that—
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1 ‘‘(I) is debarred or suspended by the Federal

2 Government, pursuant to the Federal acquisition

3 regulation, from Government contracting and sub4 contracting, or

5 ‘‘(II) is an affiliate (within the meaning of the

6 Federal acquisition regulation) of a person described

7 in subclause (I).’’.

8 (2) EFFECTIVE DATE.—The amendments made

9 by paragraph (1) shall apply to agreements between

10 a State and an entity under section 1903(m) of the

11 Social Security Act entered into or renewed on or

12 after October 1, 1993, without regard to whether

13 regulations to carry out such amendments are pro14 mulgated by such date.

15 (b) REQUIREMENT FOR STATE CONFLICT-OF-INTER16 EST SAFEGUARDS IN MEDICAID RISK CONTRACTING.—

17 (1) IN GENERAL.—Section 1903(m)(2)(A) (42

18 U.S.C. 1396b(m)(2)(A)), as amended by subsection

19 (a)(1)(C), is amended—

20 (A) by striking ‘‘and’’ at the end of clause

21 (xi),

22 (B) by striking the period at the end of

23 clause (xii) and inserting ‘‘; and’’, and

24 (C) by adding at the end the following new

25 clause:
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1 ‘‘(xiii) the State certifies to the Secretary that

2 it has in effect conflict-of-interest safeguards with

3 respect to officers and employees of the State with

4 responsibility with respect to contracts with organi5 zations under this subsection that are at least as ef6 fective as the Federal safeguards, provided under

7 section 27 of the Office of Federal Procurement Pol8 icy Act (41 U.S.C. 423), against conflicts of interest

9 that apply with respect to Federal procurement offi10 cials with comparable responsibilities with respect to

11 such contracts.’’.

12 (2) EFFECTIVE DATE.—The amendments made

13 by paragraph (1) shall apply as of July 1, 1994,

14 without regard to whether regulations to carry out

15 such amendments are promulgated by such date.

16 (c) REQUIRING DISCLOSURE OF FINANCIAL INFOR17 MATION.—

18 (1) IN GENERAL.—Section 1903(m)(3), as in19 serted by subsection (a)(1)(C), is amended by add20 ing at the end the following new subparagraph:

21 ‘‘(B) The contract between the State and an entity

22 referred to in paragraph (2)(A)(iii) shall provide that—

23 ‘‘(i) the entity agrees to report to the State

24 such financial information as the Secretary or the
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1 State may require to demonstrate that the entity has

2 a fiscally sound operation; and

3 ‘‘(ii) the entity agrees to make available to its

4 enrollees upon reasonable request—

5 ‘‘(I) the information reported under para6 graph (1),

7 ‘‘(II) the information required to be dis8 closed under sections 1124 and 1126, and

9 ‘‘(III) a description of each transaction,

10 described in subparagraphs (A) through (C) of

11 section 1318(a)(3) of the Public Health Service

12 Act, between the entity and a party in interest

13 (as defined in section 1318(b) of such Act).’’.

14 (2) EFFECTIVE DATE.—The amendment made

15 by paragraph (1) shall apply to contract years begin16 ning on or after October 1, 1993, without regard to

17 whether regulations to carry out such amendments

18 are promulgated by such date, with respect to infor19 mation reported or required to be disclosed, or

20 transactions occurring, before, on, or after such

21 date.

22 (d) PROHIBITING MARKETING FRAUD.—

23 (1) IN GENERAL.—Section 1903(m)(3), as in24 serted by subsection (a)(1) and as amended by sub-
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1 section (c)(1), is amended by adding at the end the

2 following new subparagraph:

3 ‘‘(C) The contract between the State and an entity

4 referred to in paragraph (2)(A)(iii) shall provide that the

5 entity agrees to comply with such procedures and condi6 tions as the Secretary prescribes in order to ensure that,

7 before an individual is enrolled with the entity, the individ8 ual is provided accurate and sufficient information to

9 make an informed decision whether or not to enroll.’’.

10 (2) EFFECTIVE DATE.—The amendment made

11 by paragraph (1) shall apply to contract years that

12 begin on or after October 1, 1993, without regard

13 to whether regulations to carry out such amendment

14 are promulgated by such date.

15 (e) REQUIRING ADEQUATE EQUITY FOR FOR-PROFIT

16 ENTITIES.—

17 (1) IN GENERAL.—Section 1903(m)(3), as pre18 viously amended by this section, is further amended

19 by adding at the end the following new subpara20 graph:

21 ‘‘(D)(i) The contract between the State and an entity

22 referred to in paragraph (2)(A)(iii) shall require, in the

23 case of a for-profit entity, that the entity shall maintain

24 an average ratio of—

25 ‘‘(I) equity capital to
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1 ‘‘(II) payments made by the State to the entity

2 under the contract on a capitation basis or any other

3 risk basis,

4 of not less than such minimum ratio as the Secretary shall

5 specify.

6 ‘‘(ii) The contract between the State and a non-profit

7 entity referred to in paragraph (2)(A)(iii) shall require

8 that no payment shall be made directly or indirectly under

9 an agreement between the non-profit entity and a related

10 for-profit entity (as defined by the Secretary) unless the

11 for-profit entity maintains an average ratio of equity cap12 ital to payments under such agreement of not less than

13 such ratio as the Secretary shall specify.’’.

14 (2) EFFECTIVE DATE.—The amendment made

15 by paragraph (1) shall apply to contract years begin16 ning on or after July 1, 1994, without regard to

17 whether regulations to carry out such amendment

18 are promulgated by such date.

19 (f) REQUIRING ADEQUATE PROVISION AGAINST RISK

20 OF INSOLVENCY.—

21 (1) IN GENERAL.—Section 1903(m)(1)(A)(ii)

22 (42 U.S.C. 1396b(m)(1)(A)(ii)) is amended by in23 serting ‘‘, which meets such standards as the Sec24 retary shall prescribe’’ after ‘‘satisfactory to the

25 State’’.
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1 (2) EFFECTIVE DATE AND TRANSITION.—(A)

2 The amendment made by paragraph (1) shall apply

3 to contract years beginning on or after July 1, 1994,

4 without regard to whether regulations to carry out

5 such amendments are promulgated by such date.

6 (B) If the Secretary of Health and Human

7 Services has not promulgated standards to carry out

8 the amendment made by paragraph (1) by July 1,

9 1994, until such standards have been promulgated a

10 provision of a health maintenance organization

11 against the risk of insolvency shall not be considered

12 to meet standards prescribed by the Secretary, for

13 purposes of section 1903(m)(1)(A)(ii) of the Social

14 Security Act, unless such provision has been found

15 satisfactory by the Secretary under section

16 1876(b)(2)(E) of such Act.

17 (g) REQUIRING REPORT ON NET EARNINGS AND AD18 DITIONAL BENEFITS.—

19 (1) IN GENERAL.—Section 1903(m)(3), as pre20 viously amended by this section, is amended by add21 ing at the end the following new subparagraph:

22 ‘‘(E) The contract between the State and an entity

23 referred to in paragraph (2)(A)(iii) shall provide that the

24 entity shall submit a report to the State and the Secretary
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1 not later than 12 months after the close of a contract year

2 containing—

3 ‘‘(i) a financial statement of the entity’s net

4 earnings under the contract during the contract

5 year, which statement has been audited using audit6 ing standards established by the Secretary in con7 sultation with the States; and

8 ‘‘(ii) a description of any benefits that are in

9 addition to the benefits required to be provided

10 under the contract that were provided during the

11 contract year to members enrolled with the entity

12 and entitled to medical assistance under the plan.’’.

13 (2) EFFECTIVE DATE.—The amendment made

14 by paragraph (1) shall apply to contract years begin15 ning on or after October 1, 1993, without regard to

16 whether regulations to carry out such amendments

17 are promulgated by such date.

18 (h) REPORT ON NET EARNINGS OF CONTRACTORS.—

19 Not later than 6 months after the date of the enactment

20 of this Act, the Secretary of Health and Human Services

21 shall submit a report to Congress on the earnings of orga22 nizations with contracts to receive payment for providing

23 medical assistance under title XIX of the Social Security

24 Act on a prepaid capitation or any other risk basis. The

25 report shall include the Secretary’s recommendations on
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1 options for requiring such organizations, as a condition

2 of participation under such title, to dedicate a portion of

3 such earnings to the provision of additional benefits to in4 dividuals enrolled with the organization.

5 SEC. 5136. CLARIFICATION OF TREATMENT OF HMO EN6 ROLLEES IN COMPUTING THE MEDICAID IN7 PATIENT UTILIZATION RATE IN QUALIFYING

8 HOSPITALS AS DISPROPORTIONATE SHARE

9 HOSPITALS.

10 (a) IN GENERAL.—Section 1923(b)(2) (42 U.S.C.

11 1396r–4(b)(2)) is amended by inserting before the period

12 at the end the following: ‘‘and whether or not the individ13 ual is enrolled with an entity contracting with the State

14 on a prepaid capitation basis or other risk basis under sec15 tion 1903(m)’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall apply to payments to States under sec18 tion 1903(a) of the Social Security Act for payments to

19 hospitals made under State plans on and after the first

20 day of the first calendar quarter beginning after the date

21 of the enactment of this Act.
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1 SEC. 5137. EXTENSION OF PERIOD OF APPLICABILITY OF

2 ENROLLMENT MIX REQUIREMENT TO CER3 TAIN HEALTH MAINTENANCE ORGANIZA4 TIONS PROVIDING SERVICES UNDER DAYTON

5 AREA HEALTH PLAN.

6 Section 2 of Public Law 102–276 is amended by

7 striking ‘‘January 31, 1994’’ and inserting ‘‘December 31,

8 1995’’.

9 SEC. 5138. EXTENSION OF MEDICAID WAIVER FOR TEN10 NESSEE PRIMARY CARE NETWORK.

11 Section 6411(f) of the Omnibus Budget Reconcili12 ation Act of 1989, as amended by section 1 of Public Law

13 102–317, is amended by striking ‘‘January 31, 1994’’ and

14 inserting ‘‘December 31, 1995’’.

15 SEC. 5139. WAIVER OF APPLICATION OF MEDICAID EN16 ROLLMENT MIX REQUIREMENT TO DISTRICT

17 OF COLUMBIA CHARTERED HEALTH PLAN,

18 INC.

19 (a) IN GENERAL.—The Secretary of Health and

20 Human Services shall waive the application of the require21 ment described in section 1903(m)(2)(A)(ii) of the Social

22 Security Act to the entity known as the District of Colum23 bia Chartered Health Plan, Inc., for the period described

24 in subsection (b), if the Secretary determines that the en25 tity is making continuous efforts and progress toward

26 achieving compliance with such requirement.
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1 (b) PERIOD OF APPLICABILITY.—The period referred

2 to in subsection (a) is the period that begins on October

3 1, 1992, and ends on December 31, 1995.

4 SEC. 5140. EXTENSION OF MINNESOTA PREPAID MEDICAID

5 DEMONSTRATION PROJECT.

6 (a) IN GENERAL.—Section 507 of the Family Sup7 port Act of 1988, as amended by section 6411(j) of

8 OBRA–1989 and by section 4733 of OBRA–1990, is

9 amended by striking ‘‘1996’’ and inserting ‘‘1998’’.

10 (b) AUTHORITY TO IMPOSE PREMIUM.—

11 (1) IN GENERAL.—Notwithstanding section

12 1916 of the Social Security Act and subject to para13 graph (2), the State of Minnesota may impose a pre14 mium on individuals receiving medical assistance

15 under the Minnesota Prepaid Demonstration Project

16 operated under a waiver granted by the Secretary of

17 Health and Human Services under section 1115(a)

18 of the Social Security Act and other individuals eligi19 ble under the State’s plan for medical assistance

20 under title XIX of such Act.

21 (2) LIMITATION ON AMOUNT OF PREMIUM.—In

22 no case may the amount of any premium imposed on

23 an individual receiving medical assistance under the

24 State plan or under the Demonstration Project de25 scribed in paragraph (1) exceed 10 percent of the
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1 amount by which the family income (less expenses

2 for the care of a dependent child) of the individual

3 exceeds 110 percent of the income official poverty

4 line (as defined by the Office of Management and

5 Budget), and revised annually in accordance with

6 section 673(2) of the Omnibus Budget Reconcili7 ation Act of 1981) applicable to a family of the size

8 involved.

9 PART III—EMERGENCY SERVICES TO

10 UNDOCUMENTED ALIENS

11 SEC. 5141. INCREASE IN FEDERAL FINANCIAL PARTICIPA12 TION FOR EMERGENCY MEDICAL ASSIST13 ANCE TO UNDOCUMENTED ALIENS.

14 (a) IN GENERAL.—Section 1905(b) (42 U.S.C.

15 1396d(b)) is amended by adding at the end the following:

16 ‘‘Notwithstanding the first sentence of this section, sub17 ject to 1903(v)(4), the Federal medical assistance percent18 age shall be 100 per centum with respect to amounts ex19 pended by an eligible State in a covered fiscal year (as

20 defined in section 1903(v)(4)(C)) as medical assistance for

21 care and services described in section 1903(v)(2) to aliens

22 described in section 1903(v)(1).’’.

23 (b) LIMITATION.—Section 1903(v) (42 U.S.C.

24 1396b(v)) is amended by adding at the end the following

25 new paragraph:
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1 ‘‘(4)(A) With respect to any eligible State (as defined

2 in subparagraph (C)(i)), the amount of the increase in

3 payments to a State under subsection (a) in a covered fis4 cal year (as defined in subparagraph (C)(ii)), resulting

5 from the increase in the Federal medical assistance per6 centage under the fourth sentence of section 1905(b), shall

7 not exceed the State’s allotment determined under sub8 paragraph (B).

9 ‘‘(B)(i) The total of the allotments to all States for

10 a covered fiscal year under this paragraph shall be

11 $300,000,000.

12 ‘‘(ii) From the total allotment under clause (i) for

13 a covered fiscal year, the Secretary shall determine the

14 amount of the allotment for each eligible State. Subject

15 to clause (iii), the amount of such allotment for such a

16 fiscal year shall bear the same ratio to the total amount

17 specified in clause (i) for the fiscal year as the ratio of—

18 ‘‘(I) the allotment to the State for fiscal year

19 1993 under section 204 of the Immigration Reform

20 and Control Act of 1986, to

21 ‘‘(II) the total of such allotments for all such el22 igible States for fiscal year 1993.

23 ‘‘(iii) In the case of an eligible State which notifies

24 the Secretary that an amount of its allotment will not be

25 used by the State under this paragraph, the State’s allot-
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1 ment shall be reduced by such amount and such amount

2 shall be redistributed among the other eligible States in

3 proportion to the amount otherwise allotted to such State

4 under clause (ii).

5 ‘‘(C) For purposes of this paragraph and the fourth

6 sentence of section 1905(b):

7 ‘‘(i) The term ‘eligible State’ means a State—

8 ‘‘(I) with a plan approved under this title

9 (including a State which is providing medical

10 assistance to its residents under a statewide

11 waiver granted under section 1115), and

12 ‘‘(II) for which its allotment for fiscal year

13 1993 under section 204 of the Immigration Re14 form and Control Act of 1986 is at least 1 per15 cent of the total of such allotments for all the

16 States for fiscal year 1993.

17 ‘‘(ii) The term ‘covered fiscal year’ means only

18 fiscal year 1994.

19 ‘‘(D) Nothing in this paragraph or the fourth sen20 tence of section 1905(b) shall be construed as establishing

21 entitlement authority (within the meaning of section 3(9)

22 of the Congressional Budget Act of 1974) for any fiscal

23 year other than a covered fiscal year.’’.
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1 SEC. 5142. LIMITING FEDERAL MEDICAID MATCHING PAY2 MENT TO BONA FIDE EMERGENCY SERVICES

3 FOR UNDOCUMENTED ALIENS.

4 (a) IN GENERAL.—Section 1903(v)(2) (42 U.S.C.

5 1396b(v)(2)) is amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (A),

8 (2) by striking the period at the end of sub9 paragraph (B) and inserting ‘‘, and’’, and

10 (3) by adding at the end the following new sub11 paragraph:

12 ‘‘(C) such care and services are not related to

13 an organ transplant procedure.’’.

14 (b) EFFECTIVE DATE.—(1) Subject to paragraph

15 (2), the amendments made by subsection (a) shall apply

16 as if included in the enactment of OBRA–1986.

17 (2) The Secretary of Health and Human Services

18 shall not disallow expenditures made for the care and serv19 ices described in section 1903(v)(2)(C) of the Social Secu20 rity Act, as added by subsection (a), furnished before the

21 date of the enactment of this Act.
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1 PART IV—MISCELLANEOUS PROVISIONS

2 SEC. 5144. INCREASE IN LIMIT ON FEDERAL MEDICAID

3 MATCHING PAYMENTS TO PUERTO RICO AND

4 OTHER TERRITORIES.

5 (a) IN GENERAL.—Paragraphs (1) through (5) of

6 section 1108(c) (42 U.S.C. 1308(c)) are amended to read

7 as follows:

8 ‘‘(1) Puerto Rico shall not exceed (A)

9 $104,000,000 for fiscal year 1994 and (B) for each

10 succeeding fiscal year the amount provided in this

11 paragraph for the preceding fiscal year increased by

12 percentage increase in the medical care component

13 of the consumer price index for all urban consumers

14 (as published by the Bureau of Labor Statistics) for

15 the twelve-month period ending in March preceding

16 the beginning of the fiscal year, rounded to the near17 est $100,000;

18 ‘‘(2) the Virgin Islands shall not exceed (A)

19 $3,425,000 for fiscal year 1994, and (B) for each

20 succeeding fiscal year the amount provided in this

21 paragraph for the preceding fiscal year increased by

22 percentage increase referred to in paragraph (1)(B),

23 rounded to the nearest $10,000;

24 ‘‘(3) Guam shall not exceed (A) $3,290,000 for

25 fiscal year 1994, and (B) for each succeeding fiscal
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1 year the amount provided in this paragraph for the

2 preceding fiscal year increased by percentage in3 crease referred to in paragraph (1)(B), rounded to

4 the nearest $10,000;

5 ‘‘(4) Northern Mariana Islands shall not exceed

6 (A) $990,000 for fiscal year 1994, and (B) for each

7 succeeding fiscal year the amount provided in this

8 paragraph for the preceding fiscal year increased by

9 percentage increase referred to in paragraph (1)(B),

10 rounded to the nearest $10,000; and

11 ‘‘(5) American Samoa shall not exceed (A)

12 $1,910,000 for fiscal year 1994, and (B) for each

13 succeeding fiscal year the amount provided in this

14 paragraph for the preceding fiscal year increased by

15 percentage increase referred to in paragraph (1)(B),

16 rounded to the nearest $10,000.’’.

17 (b) EFFECTIVE DATE.—The amendment made by

18 subsection (a) shall apply beginning with fiscal year 1994.

19 SEC. 5145. CRITERIA FOR MAKING DETERMINATIONS OF

20 DENIAL OF FEDERAL MEDICAID MATCHING

21 PAYMENTS TO STATES.

22 (a) IN GENERAL.—Section 1903 (42 U.S.C. 1396b)

23 is amended by adding at the end the following new sub24 section:
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1 ‘‘(x)(1) In any case in which the Secretary proposes

2 to disallow under section 1116(d) a claim by a State under

3 this section and the State exercises its right of reconsider4 ation under section 1116(d), the Departmental Appeals

5 Board established in the Department of Health and

6 Human Services shall, if such Board upholds the basis for

7 the disallowance, determine whether the amount of the

8 disallowance should be reduced. In making this determina9 tion, the Board shall take into account (to the extent the

10 State makes a showing) factors which shall include—

11 ‘‘(A) the nature of the basis for the disallow12 ance;

13 ‘‘(B) whether the amount of the disallowance is

14 proportionate to the error or deficiency on which the

15 disallowance is based;

16 ‘‘(C) whether the basis of the disallowance con17 stitutes noncompliance that prevented or materially

18 affected the provision of appropriate services to indi19 viduals eligible under this title; or

20 ‘‘(D) whether Federal guidance with respect to

21 the action that is the basis for the proposed dis22 allowance was insufficient and the State made good

23 faith efforts to conform its action to the intent of

24 the applicable Federal statute or regulation.
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1 ‘‘(2) No disallowance shall be taken or upheld if the

2 action of the State on which the disallowance would be

3 based is consistent with its approved State plan.’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 subsection (a) shall apply to disallowances made after the

6 date of the enactment of this Act and shall take effect

7 without regard to the promulgation of implementing regu8 lations.

9 SEC. 5146. RENEWAL OF UNFUNDED DEMONSTRATION

10 PROJECT FOR LOW-INCOME PREGNANT

11 WOMEN AND CHILDREN.

12 (a) IN GENERAL.—Section 6407 of OBRA–89 is

13 amended—

14 (1) in subsection (d), by striking ‘‘3 years’’ and

15 inserting ‘‘5 years’’;

16 (2) in subsection (f), by striking ‘‘$10,000,000

17 in each of fiscal years 1990, 1991, and 1992’’ and

18 inserting ‘‘$30,000,000’’; and

19 (3) in subsection (g)(2), by striking ‘‘January

20 1, 1994’’ and inserting ‘‘one year after the termi21 nation of the demonstration projects’’.

22 (b) EFFECTIVE DATE.—The amendments made by

23 subsection (a) shall take effect as if included in the enact24 ment of OBRA–89.
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1 SEC. 5147. OPTIONAL MEDICAID COVERAGE OF TB-RELAT2 ED SERVICES FOR CERTAIN TB-INFECTED IN3 DIVIDUALS.

4 (a) COVERAGE AS OPTIONAL, CATEGORICALLY

5 NEEDY GROUP.—Section 1902(a)(10)(A)(ii) (42 U.S.C.

6 1396a(a)(10)(A)(ii)) is amended—

7 (1) by striking ‘‘or’’ at the end of subclause

8 (X),

9 (2) by adding ‘‘or’’ at the end of subclause

10 (XI), and

11 (3) by adding at the end the following new

12 subclause:

13 ‘‘(XII) who are described in sub14 section (z)(1) (relating to certain TB15 infected individuals);’’.

16 (b) GROUP AND BENEFIT DESCRIBED.—Section

17 1902 is amended by adding at the end the following new

18 subsection:

19 ‘‘(z)(1) Individuals described in this paragraph are

20 individuals not described in subsection (a)(10)(A)(i)—

21 ‘‘(A) who have tested positively to be infected

22 with tuberculosis;

23 ‘‘(B) whose income (as determined under the

24 State plan under this title with respect to disabled

25 individuals) does not exceed the maximum amount

26 of income a disabled individual described in sub-
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1 section (a)(10)(A)(i) may have and obtain medical

2 assistance under the plan; and

3 ‘‘(C) whose resources (as determined under the

4 State plan under this title with respect to disabled

5 individuals) do not exceed the maximum amount of

6 resources a disabled individual described in sub7 section (a)(10)(A)(i) may have and obtain medical

8 assistance under the plan.

9 ‘‘(2) For purposes of subsection (a)(10), the term

10 ‘TB-related services’ means each of the following services

11 relating to treatment of infection with tuberculosis:

12 ‘‘(A) Prescribed drugs.

13 ‘‘(B) Physicians’ services and services described

14 in section 1905(a)(2).

15 ‘‘(C) Laboratory and X-ray services.

16 ‘‘(D) Clinic services and Federally-qualified

17 health center services.

18 ‘‘(E) Case management services (as defined in

19 section 1915(g)(2)).

20 ‘‘(F) Services (other than room and board) de21 signed to encourage completion of regimens of pre22 scribed drugs by outpatients, including services to

23 observe directly the intake of prescribed drugs.’’.
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1 (c) LIMITATION ON BENEFITS.—Section

2 1902(a)(10), as amended by section 5162(a), is amended,

3 in the matter following subparagraph (F)—

4 (1) by striking ‘‘, and (XII)’’ and inserting ‘‘,

5 (XII)’’, and

6 (2) by inserting before the semicolon at the end

7 the following: ‘‘, and (XIII) the medical assistance

8 made available to an individual described in sub9 section (z)(1) who is eligible for medical assistance

10 only because of subparagraph (A)(ii)(XII) shall be

11 limited to medical assistance for TB-related services

12 (as defined in subsection (z)(2))’’.

13 (d) CONFORMING EXPANSION OF CASE MANAGE14 MENT SERVICES OPTION.—Section 1915(g)(1) (42 U.S.C.

15 1396n(g)(1)) is amended by inserting ‘‘or to individuals

16 described in section 1902(z)(1)(A),’’ after ‘‘or with ei17 ther,’’.

18 (e) CONFORMING AMENDMENT.—Section 1905(a)

19 (42 U.S.C. 1396d(a)) is amended—

20 (1) by striking ‘‘or’’ at the end of clause (ix),

21 (2) by adding ‘‘or’’ at the end of clause (x),

22 (3) by inserting after clause (x) the following

23 new clause:

24 ‘‘(xi) individuals described in section

25 1902(z)(1),’’, and
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1 (4) by amending paragraph (19) to read as fol2 lows:

3 ‘‘(19) case management services (as defined in

4 section 1915(g)(2)) and TB-related services de5 scribed in section 1902(z)(2)(F);’’.

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

7 this section shall apply to medical assistance furnished on

8 or after January 1, 1994, without regard to whether or

9 not final regulations to carry out such amendments have

10 been promulgated by such date.

11 SEC. 5148. APPLICATION OF MAMMOGRAPHY CERTIFI12 CATION REQUIREMENTS UNDER THE MEDIC13 AID PROGRAM.

14 (a) IN GENERAL.—Section 1902(a)(9) (42 U.S.C.

15 1396a(a)(9)) is amended—

16 (1) by striking ‘‘and’’ at the end of subpara17 graph (B),

18 (2) by striking the semicolon at the end of sub19 paragraph (C) and inserting ‘‘, and’’, and

20 (3) by adding at the end the following new sub21 paragraph:

22 ‘‘(D) that any mammography paid for

23 under such plan must be conducted by a facility

24 that has a certificate (or provisional certificate)
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1 issued under section 354 of the Public Health

2 Service Act;’’.

3 (b) EFFECTIVE DATE.—(1) Except as provided in

4 paragraph (2), the amendments made by subsection (a)

5 shall apply to mammography furnished by a facility during

6 calendar quarters beginning on or after the first date that

7 the certificate requirements of section 354(b) of the Public

8 Health Service Act apply to such mammography con9 ducted by such facility, without regard to whether or not

10 final regulations to carry out such amendments have been

11 promulgated by such date.

12 (2) In the case of a State plan for medical assistance

13 under title XIX of the Social Security Act which the Sec14 retary of Health and Human Services determines requires

15 State legislation (other than legislation appropriating

16 funds) in order for the plan to meet the additional require17 ment imposed by the amendment made by subsection

18 (a)(3), the State plan shall not be regarded as failing to

19 comply with the requirements of such title solely on the

20 basis of its failure to meet this additional requirement be21 fore the first day of the first calendar quarter beginning

22 after the close of the first regular session of the State leg23 islature that begins after the date of the enactment of this

24 Act. For purposes of the previous sentence, in the case

25 of a State that has a 2-year legislative session, each year
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1 of such session shall be deemed to be a separate regular

2 session of the State legislature.

3 SEC. 5149. REMOVAL OF SUNSET ON EXTENSION OF ELIGI4 BILITY FOR WORKING FAMILIES.

5 Subsection (f) of section 1925 (42 U.S.C. 1396r–6)

6 is repealed.

7 SEC. 5150. EXTENSION OF MORATORIUM ON TREATMENT

8 OF CERTAIN FACILITIES AS INSTITUTIONS

9 FOR MENTAL DISEASES.

10 Effective as if included in the enactment of OBRA–

11 1989, section 6408(a)(3) of such Act is amended by strik12 ing ‘‘180 days’’ and all that follows and inserting ‘‘Decem13 ber 31, 1995.’’.

14 SEC. 5150A. TREATMENT OF CERTAIN CLINICS AS FEDER15 ALLY-QUALIFIED HEALTH CENTERS.

16 (a) IN GENERAL.—Section 1905(l)(2)(B) (42 U.S.C.

17 1396d(l)(2)(B)), as amended by section 5158(c), is

18 amended—

19 (1) by striking ‘‘or’’ at the end of clause

20 (ii)(II),

21 (2) by adding ‘‘or’’ at the end of clause (iii),

22 and

23 (3) by inserting after clause (iii) the following

24 new clause:
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1 ‘‘(iv) was treated by the Secretary, for purposes

2 of part B of title XVIII, as a comprehensive Feder3 ally funded health center as of January 1, 1990;’’.

4 (b) EFFECTIVE DATE.—The amendments made by

5 subsection (a) shall apply to calendar quarters beginning

6 on or after July 1, 1993.

7 SEC. 5150B. NURSING HOME REFORM.

8 (a) SUSPENSION OF DECERTIFICATION OF NURSES

9 AIDE TRAINING AND COMPETENCY EVALUATION PRO10 GRAMS BASED ON EXTENDED SURVEYS.—

11 (1) IN GENERAL.—Section

12 1919(f)(2)(B)(iii)(I)(b) (42 U.S.C.

13 1396r(f)(2)(B)(iii)(I)(b)) is amended by striking the

14 semicolon and inserting the following: ‘‘, unless the

15 survey shows that the facility is in compliance with

16 the requirements of subsections (b), (c), and (d) of

17 this section;’’.

18 (2) EFFECTIVE DATE.—The amendment made

19 by paragraph (1) shall take effect as included in the

20 enactment of OBRA–1990.

21 (b) REQUIREMENTS FOR CONSULTANTS CONDUCT22 ING REVIEWS ON USE OF DRUGS.—

23 (1) IN GENERAL.—Section 1919(c)(1)(D) (42

24 U.S.C. 1396r(c)(1)(D)) is amended by adding at the

25 end the following sentence: ‘‘In determining whether
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1 such a consultant is qualified to conduct reviews

2 under the previous sentence, the Secretary shall take

3 into account the needs of nursing facilities under

4 this title to have access to the services of such a con5 sultant on a timely basis.’’.

6 (2) EFFECTIVE DATE.—The amendment made

7 by paragraph (1) shall take effect as included in the

8 enactment of OBRA–1987.

9 (c) INCREASE IN MINIMUM AMOUNT REQUIRED FOR

10 SEPARATE DEPOSIT OF PERSONAL FUNDS.—

11 (1) IN GENERAL.—Section 1919(c)(6)(B)(i) (42

12 U.S.C. 1396r(c)(6)(B)(i)) is amended by striking

13 ‘‘$50’’ and inserting ‘‘$100’’.

14 (2) EFFECTIVE DATE.—The amendment made

15 by paragraph (1) shall take effect October 1, 1993.

16 (d) DUE PROCESS PROTECTIONS FOR NURSES

17 AIDES.—

18 (1) PROHIBITING STATE FROM INCLUDING UN19 DOCUMENTED ALLEGATIONS IN NURSES AIDE REG20 ISTRY.—Section 1919(e)(2)(B) (42 U.S.C.

21 1396r(e)(2)(B)) is amended by striking the period at

22 the end of the first sentence and inserting the fol23 lowing: ‘‘, but shall not include any allegations of

24 resident abuse or neglect or misappropriation of
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1 resident property that are not specifically docu2 mented by the State under such subsection.’’.

3 (2) DUE PROCESS REQUIREMENTS FOR REBUT4 TING ALLEGATIONS.—Section 1919(g)(1)(C) (42

5 U.S.C. 1396r(g)(1)(C)) is amended by striking the

6 second sentence and inserting the following: ‘‘The

7 State shall, after providing the individual involved

8 with a written notice of the allegations (including a

9 statement of the availability of a hearing for the in10 dividual to rebut the allegations) and the oppor11 tunity for a hearing on the record, make a written

12 finding as to the accuracy of the allegations.’’.

13 (3) EFFECTIVE DATE.—The amendments made

14 by this subsection shall take effect October 1, 1993.

15 Subchapter C—Miscellaneous and Technical

16 Corrections Relating to OBRA–1990

17 SEC. 5151. EFFECTIVE DATE.

18 Except as otherwise provided, the amendments made

19 by this subchapter shall take effect as if included in the

20 enactment of OBRA–1990.

21 SEC. 5152. CORRECTIONS RELATING TO SECTION 4402 (EN22 ROLLMENT UNDER GROUP HEALTH PLANS).

23 Section 4402(b) of OBRA–1990 is amended by strik24 ing ‘‘1903(u)(1)(C)(iv) (42 U.S.C. 1395b(u)(1)(C)(iv))’’
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1 and inserting ‘‘1903(u)(1)(D)(iv) (42 U.S.C.

2 1395b(u)(1)(D)(iv))’’.

3 SEC. 5153. CORRECTIONS RELATING TO SECTION 4501

4 (LOW-INCOME MEDICARE BENEFICIARIES).

5 (a) Section 1902(a)(10)(E)(iii), as added by section

6 4501(b)(3) of OBRA–1990, is amended by striking ‘‘cost

7 sharing’’ and inserting ‘‘cost-sharing’’.

8 (b) Section 1905(p)(4)(B), as amended by section

9 4501(c)(1) of OBRA–1990, is amended by striking

10 ‘‘1902(a)(10)(E)(iii)’’ and inserting ‘‘section

11 1902(a)(10)(E)(iii)’’.

12 SEC. 5154. CORRECTIONS RELATING TO SECTION 4601

13 (CHILD HEALTH).

14 (a) Section 1902(a)(10)(A)(i)(VII), as added by sec15 tion 4601(a)(10)(A)(iii) of OBRA–1990, is amended by

16 striking ‘‘family;’’ and inserting ‘‘family; and’’.

17 (b) Section 1902(l), as amended by section

18 4601(a)(1)(C) of OBRA–1990, is amended—

19 (1) in paragraph (1)(C), by striking ‘‘children’’

20 after ‘‘(C)’’;

21 (2) in paragraph (3), by striking

22 ‘‘(a)(10)(A)(i)(VII),,’’ and inserting

23 ‘‘(a)(10)(A)(i)(VII),’’; and

24 (3) in paragraph (4)(B), by inserting a comma

25 before ‘‘(a)(10)(A)(i)(VI),’’.
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1 (c) Subsections (a)(3)(C) and (b)(3)(C)(i) of section

2 1925, as amended by section 4601(a) of OBRA–1990, are

3 each amended by striking ‘‘(i)(VI)’’ and inserting

4 ‘‘(i)(VI),’’.

5 SEC. 5155. CORRECTIONS RELATING TO SECTION 4602 (OUT6 REACH LOCATIONS).

7 (a) Section 1902(a)(55), as added by section

8 4602(a)(3) of OBRA–1990, is amended—

9 (1) in the matter preceding subparagraph (A)—

10 (A) by striking ‘‘subsection’’ and inserting

11 ‘‘paragraph’’, and

12 (B) by striking ‘‘(a)’’ each place it ap13 pears; and

14 (2) in subparagraph (A), by striking

15 ‘‘1905(1)(2)(B)’’ and inserting ‘‘1905(l)(2)(B)’’.

16 (b) Section 1902(l)(1) is amended by striking ‘‘who

17 are not described in any of subclauses (I) through (III)

18 of subsection (a)(10)(A)(i) and’’.

19 SEC. 5156. CORRECTIONS RELATING TO SECTION 4604 (PAY20 MENT FOR HOSPITAL SERVICES FOR CHIL21 DREN UNDER 6 YEARS OF AGE).

22 (a) Section 1902(a)(10) is amended in clause (X) in

23 the matter following subparagraph (F) by striking ‘‘under

24 one year of age’’ and inserting ‘‘under 6 years of age’’.
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1 (b) Section 1902(s), as added by section 4604(a) of

2 OBRA–1990, is amended to read as follows:

3 ‘‘(s) In order to meet the requirements of subsection

4 (a)(56), the State plan must provide that payments to hos5 pitals under the plan for inpatient services furnished to

6 infants who have not attained the age of 1 year (or, in

7 the case of such an individual who is an inpatient on his

8 first birthday, until such individual is discharged) shall—

9 ‘‘(1) if made on a prospective basis (whether

10 per diem, per case, or otherwise) provide for an

11 outlier adjustment in payment amounts for medi12 cally necessary inpatient hospital services involving

13 exceptionally high costs or exceptionally long lengths

14 of stay;

15 ‘‘(2) not be limited by the imposition of day

16 limits; and

17 ‘‘(3) not be limited by the imposition of dollar

18 limits (other than dollar limits resulting from pro19 spective payments as adjusted pursuant to para20 graph (1)).’’.

21 (c) Section 1923(a)(2)(C) is amended by striking

22 ‘‘provided on or after July 1, 1989,’’ and all that follows

23 and inserting the following: ‘‘involving exceptionally high

24 costs or exceptionally long lengths of stay—
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1 ‘‘(i) for individuals under 1 year of age, in the

2 case of services provided on or after July 1, 1989,

3 and on or before June 30, 1991; and

4 ‘‘(ii) for individuals under 6 years of age, in the

5 case of services provided on or after July 1, 1991.’’.

6 SEC. 5157. CORRECTIONS RELATING TO SECTION 4703 (PAY7 MENT ADJUSTMENTS FOR DISPROPORTION8 ATE SHARE HOSPITALS).

9 (a) Section 1923(c) is amended—

10 (1) in paragraph (2), by striking ‘‘paragraph

11 (b)(3)’’ and inserting ‘‘subsection (b)(3)’’;

12 (2) by striking the period at the end of para13 graph (3)(B) and inserting a comma; and

14 (3) in the third sentence, by striking ‘‘the pay15 ment adjustment described in paragraph (2)’’ and

16 inserting ‘‘a payment adjustment described in para17 graph (2) or (3)’’.

18 (b) Effective December 22, 1987, section

19 1923(d)(2)(A)(ii) is amended by striking ‘‘the date of the

20 enactment of this Act’’ and inserting ‘‘December 22,

21 1987’’.

22 (c) Section 4703(d) of OBRA–1990 is amended by

23 striking ‘‘412(a)(2)’’ and inserting ‘‘4112(a)(2)’’.
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1 SEC. 5158. CORRECTIONS RELATING TO SECTION 4704 (FED2 ERALLY-QUALIFIED HEALTH CENTERS).

3 (a) Clause (ix) of section 1903(m)(2)(A), as added

4 by section 4704(b)(1)(C) of OBRA–1990, is amended—

5 (1) by striking ‘‘of such center’’ the first place

6 it appears;

7 (2) by striking ‘‘federally qualified’’ and insert8 ing ‘‘Federally-qualified’’;

9 (3) by inserting ‘‘section’’ before

10 ‘‘1905(a)(2)(C)’’; and

11 (4) by moving such clause 2 ems to the left.

12 (b) Section 1903(m)(2)(B), as amended by section

13 4704(b)(2) of OBRA–1990, is amended by striking ‘‘ex14 cept with respect to clause (ix) of subparagraph (A),’’ and

15 inserting ‘‘(except with respect to clause (ix) of such sub16 paragraph)’’.

17 (c) Section 1905(l)(2), as amended by section

18 4704(c) of OBRA–1990, is amended—

19 (1) in subparagraph (A)—

20 (A) by striking ‘‘Federally-qualififed’’ and

21 inserting ‘‘Federally-qualified’’, and

22 (B) by striking ‘‘an patient’’ and inserting

23 ‘‘a patient’’; and

24 (2) in subparagraph (B)—

25 (A) in the matter preceding clause (i), by

26 striking ‘‘a entity’’ and inserting ‘‘an entity’’,
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1 (B) by striking ‘‘or’’ at the end of clause

2 (i),

3 (C) by striking the semicolon at the end of

4 clause (ii)(II) and inserting ‘‘, or’’,

5 (D) by moving clause (ii) 4 ems to the left,

6 and

7 (E) in the last sentence, by striking

8 ‘‘clause (ii)’’ and inserting ‘‘clause (iii)’’.

9 SEC. 5159. CORRECTIONS RELATING TO SECTION 4708 (SUB10 STITUTE PHYSICIANS).

11 Section 1902(a)(32)(C), as added by section

12 4708(a)(3) of OBRA–1990, is amended to read as follows:

13 ‘‘(C) payment may be made to a physician

14 for physicians’ services (and services furnished

15 incident to such services) furnished by a second

16 physician to patients of the first physician if (i)

17 the first physician is unavailable to provide the

18 services; (ii) the services are furnished pursuant

19 to an arrangement between the two physicians

20 that (I) is informal and reciprocal, or (II) in21 volves per diem or other fee-for-time compensa22 tion for such services; (iii) the services are not

23 provided by the second physician over a contin24 uous period of more than 60 days; and (iv) the

25 claim form submitted to the carrier for such
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1 services includes the second physician’s unique

2 identifier (provided under the system estab3 lished under subsection (x)) and indicates that

4 the claim meets the requirements of this clause

5 for payment to the first physician;’’.

6 SEC. 5160. CORRECTIONS RELATING TO SECTION 4711

7 (HOME AND COMMUNITY CARE FOR FRAIL

8 ELDERLY).

9 (a) Section 1929, as added by section 4711(b) of

10 OBRA–1990, is amended—

11 (1) in subsection (c)(2)(F), by moving the sec12 ond sentence 2 ems to the right;

13 (2) in subsection (d)(2)(F)(ii), by striking ‘‘they

14 manage’’ and inserting ‘‘it manages’’;

15 (3) in subsection (d)(2)(F)(iii), by inserting

16 ‘‘the agency or organization’’ after ‘‘(iii)’’;

17 (4) in subsection (e)(2)(B), by striking ‘‘fiscal

18 year 1989’’ and inserting ‘‘fiscal year 1990’’;

19 (5) in subsection (f)(1), by striking ‘‘Commu20 nity care’’ and inserting ‘‘community care’’;

21 (6) in subsection (g)(1)—

22 (A) by striking ‘‘SETTINGS’’ and inserting

23 ‘‘SETTING’’, and

24 (B) in subparagraph (B), by striking ‘‘set25 ting.’’ and inserting ‘‘setting in which home and
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1 community care under this section is pro2 vided.’’;

3 (7) in subsection (g)(2), by striking ‘‘commu4 nity care’’ the second, third, and fourth places it ap5 pears and inserting ‘‘home and community care’’;

6 (8) in subsection (h)(1)—

7 (A) by striking ‘‘more than 8’’ each place

8 it appears and inserting ‘‘8 or more’’, and

9 (B) in subparagraph (B), by inserting

10 ‘‘(other than merely board)’’ after ‘‘personal

11 services’’;

12 (9) in subsection (h)(2), by striking ‘‘commu13 nity care’’ the second and third places it appears

14 and inserting ‘‘home and community care’’;

15 (10) in subsection (j)(1)—

16 (A) in subparagraph (B)(ii), by striking

17 ‘‘1990’’ and inserting ‘‘1991’’, and

18 (B) by adding at the end the following new

19 subparagraph:

20 ‘‘(C) APPLICABILITY TO COMMUNITY CARE

21 SETTINGS.—Subparagraphs (A) and (B) shall

22 apply to community care settings in the same

23 manner as such subparagraphs apply to provid24 ers of home or community care.’’;
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1 (11) in subsection (j)(2), by adding at the end

2 the following new subparagraph:

3 ‘‘(D) APPLICABILITY TO COMMUNITY CARE

4 SETTINGS.—Subparagraphs (A), (B), and (C)

5 shall apply to community care settings in the

6 same manner as such subparagraphs apply to

7 providers of home or community care.’’;

8 (12) in subsection (k)(1)(A)(i)—

9 (A) by striking ‘‘(d)(2)(E)’’ and inserting

10 ‘‘(d)(2)’’, and

11 (B) by striking ‘‘settings,’’ and inserting

12 ‘‘settings),’’;

13 (13) in subsection (l), by striking ‘‘State wide14 ness’’ and inserting ‘‘Statewideness’’;

15 (14) in subsection (m)—

16 (A) in paragraph (2), by striking ‘‘Individ17 ual Community Care Plan’’ and inserting ‘‘indi18 vidual community care plan’’,

19 (B) in paragraph (3), by striking ‘‘and

20 need for services’’ and inserting ‘‘need for serv21 ices, and income’’,

22 (C) in the second sentence in paragraph

23 (4), by striking ‘‘elderly individuals’’ and all

24 that follows and inserting ‘‘individuals receiving

25 home and community care under this section
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1 who reside in such State in relation to the total

2 number of individuals receiving home and com3 munity care under this section.’’, and

4 (D) by adding at the end the following new

5 paragraph:

6 ‘‘(5) NOTICE TO STATES OF AMOUNTS AVAIL7 ABLE FOR ASSISTANCE.—

8 ‘‘(A) NOTICE TO SECRETARY.—In order to

9 receive Federal medical assistance for expendi10 tures for home and community care under this

11 section for a fiscal year (beginning with fiscal

12 year 1994), a State shall submit a notice to the

13 Secretary of its intention to provide such care

14 under this section not later than 3 months be15 fore the beginning of the fiscal year.

16 ‘‘(B) NOTICE TO STATES.—Not later than

17 2 months before the beginning of each fiscal

18 year (beginning with fiscal year 1994), the Sec19 retary shall notify each State that has submit20 ted a notice to the Secretary under subpara21 graph (A) for the fiscal year of the amount of

22 Federal medical assistance that will be available

23 to the State for the fiscal year (as established

24 under paragraph (4)).’’; and
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1 (15) by adding at the end the following new

2 subsection:

3 ‘‘(n) COMMUNITY CARE SETTING DEFINED.—In this

4 section, the term ‘community care setting’ means a small

5 community care setting (as defined in subsection (g)(1))

6 or a large community care setting (as defined in sub7 section (h)(1)).’’.

8 (b) Section 1905(r)(5) is amended by striking

9 ‘‘1905(a)’’ and inserting ‘‘subsection (a) (other than serv10 ices described in paragraph (22) or (23) of such sub11 section)’’.

12 (c) Section 4711(f) of OBRA–1990 is amended by

13 striking ‘‘Act’’ each place it appears and inserting ‘‘sec14 tion’’.

15 SEC. 5161. CORRECTIONS RELATING TO SECTION 4712

16 (COMMUNITY SUPPORTED LIVING ARRANGE17 MENTS SERVICES).

18 (a) Section 1930, as added by section 4712(b)(2) of

19 OBRA–1990, is amended—

20 (1) in subsection (b)—

21 (A) by striking ‘‘title the term,’’ and in22 serting ‘‘title, the term’’,

23 (B) by striking ‘‘guardian’’ and inserting

24 ‘‘guardian or’’, and
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1 (C) by striking ‘‘3 other’’ and inserting

2 ‘‘3’’;

3 (2) in subsection (d)—

4 (A) in the matter preceding paragraph (1),

5 by striking ‘‘program,’’ and inserting ‘‘pro6 gram’’, and

7 (B) in the second sentence, by striking

8 ‘‘plan’’ each place it appears and inserting

9 ‘‘program’’; and

10 (3) in subsection (i), by striking ‘‘FUNDS’’ and

11 inserting ‘‘FUNDS’’.

12 (b) Section 4712(c) of OBRA–1990 is amended—

13 (1) in paragraph (1), by inserting ‘‘of section

14 1930 of the Social Security’’ after ‘‘subsection (h)’’;

15 and

16 (2) in paragraph (2), by striking ‘‘this section’’

17 and inserting ‘‘such section’’.

18 SEC. 5162. CORRECTION RELATING TO SECTION 4713

19 (COBRA CONTINUATION COVERAGE).

20 (a) Section 1902(a)(10) is amended in the matter fol21 lowing subparagraph (F)—

22 (1) by striking ‘‘; and (XI)’’ and inserting

23 ‘‘, (XI)’’;

24 (2) by striking ‘‘individuals, and (XI)’’ and in25 serting ‘‘individuals, and (XII); and
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1 (3) by striking ‘‘COBRA continuation pre2 miums’’ and inserting ‘‘COBRA premiums’’.

3 (b) Section 1902(u)(3), as added by section

4 4713(a)(2) of OBRA–1990, is amended by striking ‘‘title

5 VI’’ and inserting ‘‘part 6 of subtitle B of title I’’.

6 SEC. 5163. CORRECTION RELATING TO SECTION 4716 (MED7 ICAID TRANSITION FOR FAMILY ASSIST8 ANCE).

9 Section 4716(a) of OBRA–1990 is amended by strik10 ing ‘‘AMENDMENTS.—Subsection (f) of section’’ and in11 serting ‘‘IN GENERAL.—Section’’.

12 SEC. 5164. CORRECTIONS RELATING TO SECTION 4723

13 (MEDICAID SPENDDOWN OPTION).

14 Section 1903(f)(2), as amended by section 4723(a)

15 of OBRA–1990, is amended—

16 (1) by striking ‘‘(A)’’ after ‘‘(2)’’;

17 (2) by striking ‘‘or, (B)’’ and inserting ‘‘. There

18 shall also be excluded,’’;

19 (3) by striking ‘‘to the State, provided that’’

20 and inserting ‘‘to the State if’’; and

21 (4) by striking ‘‘pursuant to this subpara22 graph.’’ and inserting ‘‘pursuant to the previous sen23 tence’’.
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1 SEC. 5165. CORRECTIONS RELATING TO SECTION 4724 (OP2 TIONAL STATE DISABILITY DETERMINA3 TIONS).

4 Section 1902(v), as added by section 4724 of OBRA–

5 1990, is amended—

6 (1) by striking ‘‘(v)(1)’’ and inserting ‘‘(v)’’;

7 and

8 (2) by striking ‘‘of the Social Security Act’’.

9 SEC. 5166. CORRECTION RELATING TO SECTION 4732 (SPE10 CIAL RULES FOR HEALTH MAINTENANCE OR11 GANIZATIONS).

12 Section 1903(m)(2)(F)(i), as amended by section

13 4732(b)(2)(B) of OBRA–1990, is amended by striking

14 ‘‘or’’ before ‘‘with an eligible organization’’.

15 SEC. 5167. CORRECTIONS RELATING TO SECTION 4741

16 (HOME AND COMMUNITY-BASED WAIVERS).

17 The first sentence of section 1915(d)(3) is amended

18 by striking the period at the end and inserting the follow19 ing: ‘‘, and a waiver of the requirements of section

20 1902(a)(23) (relating to choice of providers) insofar as

21 such requirements relate to the provision of case manage22 ment services and the State provides assurances satisfac23 tory to the Secretary that a waiver of such requirements

24 will not substantially limit access to such services).’’
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1 SEC. 5168. CORRECTIONS RELATING TO SECTION 4744

2 (FRAIL ELDERLY WAIVERS).

3 (a) Section 1924(a)(5), as added by section

4 4744(b)(1) of OBRA–1990, is amended by striking

5 ‘‘1986.’’ and inserting ‘‘1986 or a waiver under section

6 603(c) of the Social Security Amendments of 1983.’’.

7 (b) Section 603(c) of the Social Security Amend8 ments of 1983 is amended—

9 (1) by striking ‘‘(c)’’ and inserting ‘‘(c)(1)’’;

10 (2) by redesignating paragraphs (1) and (2) as

11 subparagraphs (A) and (B); and

12 (3) by adding at the end the following new

13 paragraph:

14 ‘‘(2) Section 1924 of the Social Security Act shall

15 apply to any individual receiving services from an organi16 zation receiving a waiver under this subsection.’’.

17 SEC. 5169. CORRECTIONS RELATING TO SECTION 4747 (COV18 ERAGE OF HIV-POSITIVE INDIVIDUALS).

19 Section 4747 of OBRA–1990 is amended—

20 (1) in subsection (a), by striking ‘‘subsection

21 (c)’’ and inserting ‘‘subsection (b)’’;

22 (2) in subsection (b)(2)—

23 (A) by striking ‘‘preventative’’ each place it

24 appears and inserting ‘‘preventive’’, and

25 (B) by adding a period at the end of sub26 paragraph (J);
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1 (3) in subsection (c)(1)—

2 (A) by striking ‘‘subsection (c)’’ and in3 serting ‘‘subsection (b)’’, and

4 (B) by striking ‘‘paragraphs (1) and (2)

5 of’’; and

6 (4) in subsection (d)—

7 (A) by striking ‘‘paragraph (3)’’ and in8 serting ‘‘subsection (b)’’, and

9 (B) by striking ‘‘paragraph (1)’’ and in10 serting ‘‘subsection (a)’’.

11 SEC. 5170. CORRECTION RELATING TO SECTION 4751 (AD12 VANCE DIRECTIVES).

13 Section 1903(m)(1)(A), as amended by section

14 4751(b)(1) of OBRA–1990, is amended—

15 (1) by striking ‘‘1902(w)’’ and inserting

16 ‘‘1902(w) and’’; and

17 (2) by striking ‘‘1902(a)’’ and inserting

18 ‘‘1902(w)’’.

19 SEC. 5171. CORRECTIONS RELATING TO SECTION 4752 (PHY20 SICIANS’ SERVICES).

21 (a) The paragraph (58) of section 1902(a) added by

22 section 4752(c)(1)(C) of OBRA–1990 is amended by

23 striking ‘‘subsection (v)’’ and inserting ‘‘subsection (x)’’.
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1 (b) Subparagraphs (A) and (B) of the paragraph (14)

2 of section 1903(i) added by section 4752(e)(2) of OBRA–

3 1990 are each amended—

4 (1) by striking ‘‘or’’ at the end of clause (v);

5 (2) by redesignating clause (vi) as clause (vii);

6 and

7 (3) by inserting after clause (v) the following

8 new clause:

9 ‘‘(vi) delivers such services in the

10 emergency department of a hospital par11 ticipating in the state plan approved under

12 this title, or’’.

13 SEC. 5172. CORRECTIONS RELATING TO SECTION 4801

14 (NURSING HOME REFORM).

15 (a) Section 1919(b)(3)(C)(i)(I), as amended by sec16 tion 4801(e)(3) of OBRA–1990, is amended by striking

17 ‘‘no later than’’ before ‘‘not to exceed 14 days’’.

18 (b) Section 1919(b)(5)(D), as amended by section

19 4801(a)(4) of OBRA–1990, is amended by striking the

20 comma before ‘‘or a new competency evaluation pro21 gram.’’.

22 (c) Section 1919(b)(5)(G) is amended by striking ‘‘or

23 licensed or certified social worker’’ and inserting ‘‘licensed

24 or certified social worker, registered respiratory therapist,

25 or certified respiratory therapy technician’’.
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1 (d) Section 1919(f)(2)(B)(i) is amended by striking

2 ‘‘facilities,’’ and inserting ‘‘facilities (subject to clause

3 (iii)),’’.

4 (e) Section 1919(f)(2)(B)(iii)(I)(c) is amended by

5 striking ‘‘clauses’’ each place it appears and inserting

6 ‘‘clause’’.

7 (f) Section 1919(g)(5)(B) is amended by striking

8 ‘‘paragraphs’’ and inserting ‘‘paragraph’’.

9 (g) Section 4801(a)(6)(B) of OBRA–1990 is amend10 ed—

11 (1) by striking ‘‘The amendments’’ and insert12 ing ‘‘(i) The amendments’’;

13 (2) by redesignating clauses (i) through (v) as

14 subclauses (I) through (V); and

15 (3) by adding at the end the following new

16 clause:

17 ‘‘(ii) Notwithstanding clause (i) and sub18 ject to section 1919(f)(2)(B)(iii) of the Social

19 Security Act (as amended by subparagraph

20 (A)), a State may approve a training and com21 petency evaluation program or a competency

22 evaluation program offered by or in a nursing

23 facility described in clause (i) if, during the pre24 vious 2 years, none of the subclauses of clause

25 (i) applied to the facility.’’.
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1 SEC. 5173. OTHER TECHNICAL CORRECTIONS.

2 (a) Section 1905(o)(1)(A) is amended—

3 (1) in the first sentence, by striking ‘‘intermedi4 ate care facility services’’ and inserting ‘‘for nursing

5 facility services or intermediate care facility services

6 for the mentally retarded’’; and

7 (2) in the second sentence, by striking ‘‘or in8 termediate care facility’’ and inserting ‘‘(for pur9 poses of title XVIII), a nursing facility, or an inter10 mediate care facility for the mentally retarded’’.

11 (b) Section 1915(d) is amended—

12 (1) by striking ‘‘skilled nursing facility or inter13 mediate care facility’’ each place it appears in para14 graphs (1), (2)(B), and (2)(C) and inserting ‘‘nurs15 ing facility’’;

16 (2) in paragraph (2)(B)(i), by striking ‘‘skilled

17 nursing or intermediate care facility’’ and inserting

18 ‘‘nursing facility’’;

19 (3) in paragraph (5)(A), by striking ‘‘under’’

20 the second place it appears and inserting ‘‘(or, in the

21 case of waiver years beginning on or after October

22 1, 1990, with respect to nursing facility services and

23 home and community-based services) under’’; and

24 (4) in paragraph (5)(B)—

25 (A) in clause (i), by striking ‘‘furnished’’

26 and inserting ‘‘(or, with respect to waiver years
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1 beginning on or after October 1, 1990, for

2 nursing facility services) furnished’’; and

3 (B) in clause (iii)(I), by striking ‘‘(regard4 less’’ and inserting ‘‘(or, with respect to waiver

5 years beginning on or after October 1, 1990,

6 which comprise nursing facility services) (re7 gardless’’.

8 SEC. 5174. CORRECTIONS TO DESIGNATIONS OF NEW PRO9 VISIONS.

10 (a) PARAGRAPHS ADDED TO SECTION 1902(a).—

11 Section 1902(a) is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (54);

14 (2) in the paragraph (55) inserted by section

15 4602(a)(3) of OBRA–1990, by striking the period at

16 the end and inserting a semicolon;

17 (3) by redesignating the paragraph (55) in18 serted by section 4604(b)(3) of OBRA–1990 as

19 paragraph (56), by transferring and inserting it

20 after the paragraph (55) inserted by section

21 4602(a)(3) of such Act, and by striking the period

22 at the end and inserting a semicolon;

23 (4) by placing paragraphs (57) and (58), in24 serted by section 4751(a)(1)(C) of OBRA–1990, im-
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1 mediately after paragraph (56), as redesignated by

2 paragraph (3);

3 (5) in the paragraph (58) inserted by section

4 4751(a)(1)(C) of OBRA–1990, by striking the pe5 riod at the end and inserting ‘‘; and’’; and

6 (6) by redesignating the paragraph (58) in7 serted by section 4752(c)(1)(C) of OBRA–1990 as

8 paragraph (59) and by transferring and inserting it

9 after the paragraph (58) inserted by section

10 4751(a)(1)(C) of such Act.

11 (b) PARAGRAPHS ADDED TO SECTION 1903(i).—Sec12 tion 1903(i), as amended by section 2(b)(2) of the Medic13 aid Voluntary Contribution and Provider-Specific Tax

14 Amendments of 1991, is amended—

15 (1) in the paragraph (10) inserted by section

16 4401(a)(1)(B) of OBRA–1990, by striking all that

17 follows ‘‘1927(g)’’ and inserting a semicolon;

18 (2) by redesignating the paragraph (12) in19 serted by section 4752(a)(2) of OBRA–1990 as

20 paragraph (11), by transferring and inserting it

21 after the paragraph (10) inserted by section

22 4401(a)(1)(B) of OBRA–1990, and by striking the

23 period at the end and inserting a semicolon;

24 (3) by redesignating the paragraph (14) in25 serted by section 4752(e) of OBRA–1990 as para-
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1 graph (12), by transferring and inserting it after

2 paragraph (11), as redesignated by paragraph (2),

3 and by striking the period at the end and inserting

4 ‘‘; or’’; and

5 (4) by redesignating the paragraph (11) in6 serted by section 4801(e)(16)(A) of OBRA–1990 as

7 paragraph (13) and by transferring and inserting it

8 after paragraph (12), as redesignated by paragraph

9 (3).

10 (c) PARAGRAPHS ADDED TO SECTION 1905(a).—

11 (1) IN GENERAL.—Section 1905(a) is amend12 ed—

13 (A) by striking ‘‘and’’ at the end of para14 graph (21);

15 (B) in paragraph (24), by striking the

16 comma at the end and inserting ‘‘; and’’; and

17 (C) by redesignating paragraphs (22),

18 (23), and (24) as paragraphs (24), (22), and

19 (23), respectively, and by transferring and in20 serting paragraph (24) after paragraph (23), as

21 so redesignated.

22 (2) CONFORMING AMENDMENTS.—(A) Effective

23 July 1, 1991, section 1902(a)(10)(C)(iv), as amend24 ed by section 4755(c)(1)(A) of OBRA–1990, is
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1 amended by striking ‘‘through (21)’’ and inserting

2 ‘‘through (23)’’.

3 (B) Effective July 1, 1991, section 1902(j), as

4 amended by section 4711(d)(1) of OBRA–1990, is

5 amended by striking ‘‘through (22)’’ and inserting

6 ‘‘through (24)’’.

7 (d) FINAL SECTIONS.—Section 1928, as redesignated

8 by section 4401(a)(3) of OBRA–1990, is amended—

9 (1) by transferring such section to the end of

10 title XIX of the Social Security Act; and

11 (2) by redesignating such section as section

12 1931.

13 CHAPTER 2—UNIVERSAL ACCESS TO

14 CHILDHOOD IMMUNIZATIONS

15 SEC. 5181. ESTABLISHMENT OF ENTITLEMENT AND MON16 ITORING PROGRAMS WITH RESPECT TO

17 CHILDHOOD IMMUNIZATIONS.

18 (a) IN GENERAL.—Title XXI of the Public Health

19 Service Act (42 U.S.C. 300aa-1 et seq.) is amended by

20 adding at the end the following subtitle:
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1 ‘‘Subtitle 3—Entitlement and Monitoring Programs With

2 Respect to Childhood Immunizations

3 ‘‘PART A—ENTITLEMENT PROGRAM

4 ‘‘SEC. 2151. DELIVERY TO STATES OF SUFFICIENT QUAN5 TITIES OF PEDIATRIC VACCINES.

6 ‘‘(a) IN GENERAL.—In the case of any State that

7 submits to the Secretary an application in accordance with

8 section 2157, the Secretary, acting through the Director

9 of the Centers for Disease Control and Prevention, shall

10 provide for the purchase and delivery on behalf of the

11 State of such quantities of pediatric vaccines as may be

12 necessary for the immunization of each eligible child in

13 the State. The preceding sentence is subject to sections

14 2152(d) and 2159(a).

15 ‘‘(b) ELIGIBLE CHILDREN.—For purposes of this

16 part, the term ‘eligible child’ means an individual 18 years

17 of age or younger who—

18 ‘‘(1) with respect to the State involved, is enti19 tled to medical assistance under the plan approved

20 for the State under title XIX of the Social Security

21 Act (including a State operating under a statewide

22 waiver under section 1115 of such Act);

23 ‘‘(2)(A) is uninsured with respect to health in24 surance policies or plans (including group health

25 plans or prepaid health plans and including em-
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1 ployee welfare benefit plans under the Employee Re2 tirement Income Security Act of 1974); or

3 ‘‘(B) is covered under such a policy or plan, but

4 under the policy or plan benefits are not available

5 with respect to immunizations; or

6 ‘‘(3) is an Indian.

7 ‘‘SEC. 2152. ENTITLEMENTS.

8 ‘‘(a) ENTITLEMENT OF STATES.—Subject to sub9 section (d), in the case of any State that submits to the

10 Secretary an application in accordance with section 2157,

11 the State is entitled to have the Secretary provide for the

12 purchase and delivery on behalf of the State of pediatric

13 vaccines under section 2151. The preceding sentence con14 stitutes budget authority in advance of appropriations

15 Acts, and represents the obligation of the Federal Govern16 ment to provide for the purchase and delivery to the State

17 of the vaccines.

18 ‘‘(b) ENTITLEMENTS OF CHILDREN AND HEALTH

19 CARE PROVIDERS.—Subject to subsection (d), the Sec20 retary may provide for the purchase and delivery of pedi21 atric vaccines under section 2151 on behalf of a State only

22 if the State agrees as follows:

23 ‘‘(1) Each eligible child in the State, in receiv24 ing an immunization with a pediatric vaccine from

25 a program-registered provider (as defined in section
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1 2153(a)), is entitled to receive the immunization

2 without charge for the cost of such vaccine.

3 ‘‘(2) Each program-registered provider in the

4 State who administers a pediatric vaccine to an eligi5 ble child in the State is entitled to receive such vac6 cine from the State without charge.

7 ‘‘(3) The State will carry out a program to ad8 minister the entitlements established pursuant to

9 paragraphs (1) and (2).

10 ‘‘(c) ENFORCEMENT OF PROVIDER RIGHTS BY ELI11 GIBLE CHILDREN.—With respect to the obligation of a

12 State under the entitlement established in subsection

13 (b)(2), an eligible child (or representative of the child)

14 may enforce the rights of the provider under such para15 graph if—

16 ‘‘(1) the provider administered a pediatric vac17 cine to the child notwithstanding the failure of the

18 State to carry out such obligation with respect to the

19 vaccine; or

20 ‘‘(2) an immunization with the vaccine was

21 sought for the child by a parent of the child, but the

22 provider, on the basis of such failure of the State,

23 did not administer the vaccine to the child.

24 ‘‘(d) CERTAIN CONDITIONS.—
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1 ‘‘(1) IN GENERAL.—This part does not apply

2 with respect to any vaccine administered before Oc3 tober 1, 1994.

4 ‘‘(2) RELATIONSHIP TO PURCHASE CONTRACTS

5 WITH MANUFACTURERS.—With respect to a pedi6 atric vaccine, the obligation of the Federal Govern7 ment pursuant to subsection (a), and the obligations

8 of the State pursuant to subsection (b), are effective

9 only to the extent that there is in effect a contract

10 under section 2158 for the purchase and delivery of

11 the vaccine.

12 ‘‘(3) SUBMISSION OF APPLICATION.—

13 ‘‘(A) Subject to subparagraph (C), the en14 titlements established pursuant to subsections

15 (a) and (b) are established with respect to a

16 State upon the State submitting to the Sec17 retary an application in accordance with section

18 2157.

19 ‘‘(B) An application submitted to the Sec20 retary under section 2157 is deemed to have

21 been submitted in accordance with such section

22 unless the Secretary, not later than 30 days

23 after the date on which the application is sub24 mitted, notifies the State that the application is

25 not in accordance with such section.
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1 ‘‘(C) In the case of a State whose applica2 tion submitted under section 2157 is not sub3 mitted in accordance with such section, the Sec4 retary may, upon the submission by the State

5 of an application that is in accordance with

6 such section, provide that the entitlements es7 tablished pursuant to such submission are

8 deemed to have been established on the date on

9 which the State first submitted the application.

10 ‘‘SEC. 2153. VOLUNTARY PARTICIPATION OF HEALTH CARE

11 PROVIDERS.

12 ‘‘(a) IN GENERAL.—

13 ‘‘(1) REQUEST FOR PARTICIPATION; REQUIRED

14 APPROVAL.—The Secretary may provide for the pur15 chase and delivery of pediatric vaccines under sec16 tion 2151 on behalf of a State only if the State

17 agrees that federally-supplied pediatric vaccines will

18 not be distributed to a health care provider unless—

19 ‘‘(A) the provider submits to the State a

20 written request to participate in the program

21 established by the State pursuant to section

22 2152(b)(3);

23 ‘‘(B) the request is in such form and is

24 made in such manner as the Secretary may re25 quire; and
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1 ‘‘(C) the provider makes the agreements

2 described in this section.

3 ‘‘(2) PROGRAM-REGISTERED PROVIDERS.—For

4 purposes of this part, the term ‘program-registered

5 provider’ means a health care provider that meets

6 the conditions specified in subparagraphs (A)

7 through (C) of paragraph (1).

8 ‘‘(b) ELIGIBILITY OF CHILDREN.—

9 ‘‘(1) IN GENERAL.—An agreement for a health

10 care provider under subsection (a) is that the pro11 vider—

12 ‘‘(A) before administering a pediatric vac13 cine to a child, will ask a parent of the child

14 such questions as are necessary to determine

15 whether the child is an eligible child;

16 ‘‘(B) will, for a period of time specified by

17 the Secretary, maintain records of responses

18 made to the questions; and

19 ‘‘(C) will, upon request, make such records

20 available to the State involved and to the Sec21 retary, subject to paragraph (2).

22 ‘‘(2) RESTRICTION ON USE OF INFORMATION.—

23 Records provided to a State or to the Secretary

24 under paragraph (1)(C) may be used only for pur-
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1 poses of audit of the program carried out under sec2 tion 2152(b)(3) by the State.

3 ‘‘(c) CHARGES FOR VACCINES.—

4 ‘‘(1) VACCINES PER SE.—An agreement for a

5 health care provider under subsection (a) is that, in

6 administering a federally-supplied pediatric vaccine

7 to an eligible child, the provider will not impose a

8 charge for the cost of the vaccine.

9 ‘‘(2) ADMINISTRATION OF VACCINES.—With re10 spect to compliance with an agreement under para11 graph (1), a program-registered provider may im12 pose a charge for the administration of a federally13 supplied pediatric vaccine, subject to an agreement

14 by the provider that the provider will not impose

15 such charge with respect to a child if a parent of the

16 child certifies to the provider that the parent is un17 able to pay the charge.

18 ‘‘(d) RULES OF CONSTRUCTION.—

19 ‘‘(1) EXTENT OF PARTICIPATION.—This section

20 may not be construed as requiring that a program21 registered provider administer a federally-supplied

22 pediatric vaccine to each eligible child for whom an

23 immunization with the vaccine is sought from the

24 provider.
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1 ‘‘(2) VERIFICATION OF INFORMATION.—With

2 respect to compliance with agreements under sub3 sections (b) and (c), such agreements may not be

4 construed as requiring a program-registered provider

5 to verify independently the information provided to

6 the provider by a parent pursuant to such sub7 sections.

8 ‘‘SEC. 2154. INTRASTATE DISTRIBUTION OF PEDIATRIC VAC9 CINES.

10 ‘‘(a) IN GENERAL.—Not later than 180 days after

11 the date of the enactment of the Omnibus Budget Rec12 onciliation Act of 1993, the Secretary shall, through publi13 cation in the Federal Register, establish criteria for the

14 delivery on behalf of the States of federally-supplied pedi15 atric vaccines to program-registered providers in the

16 State.

17 ‘‘(b) INVOLVEMENT OF CERTAIN PROVIDERS.—

18 ‘‘(1) IN GENERAL.—In establishing criteria

19 under subsection (a), the Secretary shall establish

20 criteria with respect to encouraging the entities de21 scribed in paragraph (2) to become program-reg22 istered providers.

23 ‘‘(2) RELEVANT PROVIDERS.—The entities re24 ferred to in paragraph (1) are—

25 ‘‘(A) private health care providers; and
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1 ‘‘(B)(i) health care providers that receive

2 funds under title V of the Indian Health Care

3 Improvement Act;

4 ‘‘(ii) the Indian Health Service; and

5 ‘‘(iii) health programs or facilities operated

6 by Indian tribes or tribal organizations.

7 ‘‘(c) CULTURAL CONTEXT OF SERVICES.—In estab8 lishing criteria under subsection (a), the Secretary shall

9 require that, in providing a federally-supplied pediatric

10 vaccine to any population of eligible children a substantial

11 portion of whose parents have a limited ability to speak

12 the English language, a State have in effect a reasonable

13 plan to administer the vaccines through program-reg14 istered providers who are able to communicate with the

15 population involved in the language and cultural context

16 that is most appropriate.

17 ‘‘(d) COMPLIANCE BY STATES.—The Secretary may

18 provide for the purchase and delivery of pediatric vaccines

19 under section 2151 on behalf of a State only if the State

20 agrees to maintain compliance with the criteria established

21 under subsection (a).

22 ‘‘SEC. 2155. GENERAL PROVISIONS.

23 ‘‘(a) FEDERAL STANDARDS ON ACCOUNTABILITY.—

24 ‘‘(1) ESTABLISHMENT OF STANDARDS.—Not

25 later than 180 days after the date of the enactment
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1 of the Omnibus Budget Reconciliation Act of 1993,

2 the Secretary shall, through publication in the Fed3 eral Register, establish standards with respect to de4 termining the extent to which States and program5 registered providers are in compliance with the

6 agreements made under this part.

7 ‘‘(2) COMPLIANCE BY STATES.— The Secretary

8 may provide for the purchase and delivery of pedi9 atric vaccines under section 2151 on behalf of a

10 State only if the State agrees to maintain compli11 ance with the standards established under subsection

12 (a).

13 ‘‘(b) STATE MAINTENANCE OF IMMUNIZATION

14 LAWS.—The Secretary may provide for the purchase and

15 delivery of vaccines under section 2151 on behalf of a

16 State only if the State certifies to the Secretary that, if

17 it had in effect as of May 1, 1993, a law that requires

18 some or all health insurance policies or plans to provide

19 some coverage with respect to a pediatric vaccine, the

20 State has not modified or repealed such law in a manner

21 that reduces the amount of coverage so required.

22 ‘‘(c) PARTICIPATION IN NATIONAL MONITORING SYS23 TEM.—On and after January 1, 1998, the Secretary may

24 provide for the purchase and delivery of vaccines under

25 section 2151 on behalf of a State only if the State certifies
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1 to the Secretary that the State is operating a registry in

2 accordance with part B.

3 ‘‘SEC. 2156. STATE OPTION REGARDING IMMUNIZATION OF

4 ADDITIONAL CATEGORIES OF CHILDREN.

5 ‘‘(a) STATE PURCHASES.—Subject to subsections (b)

6 and (c), for the purpose of administering a pediatric vac7 cine to children in addition to eligible children, any partici8 pating State under section 2151 may, pursuant to section

9 2158(a)(2), purchase the vaccine from a manufacturer of

10 the vaccine at the price in effect under section 2158.

11 ‘‘(b) REQUIREMENTS.—A State may purchase pedi12 atric vaccines pursuant to subsection (a) only if the follow13 ing conditions are met:

14 ‘‘(1) The State agrees that the vaccines will be

15 used to provide immunizations for children who are

16 not eligible children.

17 ‘‘(2) The State designates the particular cat18 egories of children who are to receive the immuniza19 tions, and submits to the Secretary a description of

20 the categories so designated.

21 ‘‘(3) The State provides to the Secretary such

22 information as the Secretary determines to be nec23 essary to provide for quantities of pediatric vaccines

24 for the State to purchase pursuant to section

25 2158(a)(2).
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1 ‘‘(4) The State agrees, subject to subsection (c),

2 that the program established by the State pursuant

3 to section 2152(b)(3) applies to children designated

4 under paragraph (2) to the same extent and in the

5 same manner as the program applies to eligible chil6 dren (except for the State being the purchaser of the

7 pediatric vaccines involved).

8 ‘‘(c) CERTAIN LIMITATIONS.—A State may purchase

9 pediatric vaccines pursuant to subsection (a) only if the

10 State agrees as follows:

11 ‘‘(1) The authorization established in such sub12 section with respect to a pediatric vaccine is subject

13 to the quantity of the vaccine that, on behalf of the

14 State, the Secretary provides for under section

15 2158(a)(2).

16 ‘‘(2) In any case in which multiple contracts are

17 in effect under section 2158 with respect to such a

18 vaccine and the State elects to purchase the vaccine

19 pursuant to subsection (a), the Secretary will deter20 mine which of such contracts will be applicable to

21 the purchase.

22 ‘‘SEC. 2157. STATE APPLICATION FOR VACCINES.

23 ‘‘(a) IN GENERAL.—An application by a State for pe24 diatric vaccines under section 2151(a) is in accordance

25 with this section if the application—
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1 ‘‘(1) is submitted not later than the date speci2 fied by the Secretary;

3 ‘‘(2) contains each agreement required in this

4 part (including the agreements required in section

5 2156, if the State is electing to purchase pediatric

6 vaccines pursuant to such section);

7 ‘‘(3) contains any information required in this

8 part to be submitted to the Secretary (including the

9 information required in section 2156, if the State is

10 electing to purchase pediatric vaccines pursuant to

11 such section);

12 ‘‘(4) contains the certification required in sub13 section (b) of section 2155 and, as applicable, the

14 certification required in subsection (c) of such sec15 tion; and

16 ‘‘(5) is in such form, is made in such manner,

17 and contains such agreements, assurances, and in18 formation as the Secretary determines to be nec19 essary to carry out this part.

20 ‘‘(b) FAILURE TO APPLY.—

21 ‘‘(1) IN GENERAL.—If, as of January 1, 1998,

22 a State is not receiving pediatric vaccines under sec23 tion 2151 and carrying out a program pursuant to

24 section 2152(b)(3), the Secretary shall, subject to
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1 paragraph (2), terminate payments to the State

2 under part A of title XIX.

3 ‘‘(2) EXCEPTIONS.—Paragraph (1) does not

4 apply in the case of a State described in such para5 graph that—

6 ‘‘(A) is, through all willing health care pro7 viders, providing for the immunization of eligi8 ble children with pediatric vaccines, and is not

9 imposing a charge on such providers or children

10 for the costs of the vaccines; or

11 ‘‘(B) meets or exceeds the objectives estab12 lished by the Secretary for the year 2000 for

13 the immunization status of children in the

14 United States who are 2 years of age.

15 ‘‘SEC. 2158. CONTRACTS WITH MANUFACTURERS OF PEDI16 ATRIC VACCINES.

17 ‘‘(a) IN GENERAL.—Subject to the provisions of this

18 section, the Secretary shall periodically enter into negotia19 tions with manufacturers of pediatric vaccines for the pur20 pose of maintaining contracts under which—

21 ‘‘(1) the Secretary provides for the purchase of

22 quantities of pediatric vaccines necessary for carry23 ing out section 2151, and provides for the delivery

24 of the vaccines to participating States under such

25 section; and
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1 ‘‘(2) each participating State, at the option of

2 the State under section 2156, is permitted to obtain

3 additional quantities of pediatric vaccines (subject to

4 limits in such contracts regarding quantities)

5 through purchasing the vaccines from the manufac6 turers at the price negotiated by the Secretary for

7 the quantities specified in paragraph (1).

8 The Secretary shall enter into the initial negotiations

9 under the preceding sentence not later than 180 days after

10 the date of the enactment of the Omnibus Budget Rec11 onciliation Act of 1993.

12 ‘‘(b) NEGOTIATION OF PURCHASE PRICE.—

13 ‘‘(1) IN GENERAL.—In negotiating the prices at

14 which pediatric vaccines will be purchased from a

15 manufacturer under subsection (a), the Secretary

16 shall negotiate a price that provides a reasonable

17 profit for the manufacturer.

18 ‘‘(2) CERTAIN FACTORS.—

19 ‘‘(A) In determining a reasonable profit for

20 a manufacturer under paragraph (1), the Sec21 retary shall consider the following factors:

22 ‘‘(i) The costs of the manufacturer in

23 researching, developing, and producing the

24 pediatric vaccine involved.
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1 ‘‘(ii) The costs of the manufacturer in

2 researching and developing new or im3 proved vaccines (pediatric or otherwise).

4 ‘‘(iii) The costs of shipping and han5 dling pediatric vaccines in compliance with

6 the agreement under subsection (c).

7 ‘‘(iv) Such other factors as the Sec8 retary determines to be appropriate.

9 ‘‘(B) With respect to factors considered

10 under subparagraph (A), the Secretary may

11 enter into a contract under subsection (a) only

12 if the manufacturer involved provides to the

13 Secretary such information regarding the fac14 tors as the Secretary determines to be appro15 priate.

16 ‘‘(3) CONFIDENTIALITY.—With respect to infor17 mation provided to the Secretary by a manufacturer

18 under paragraph (2), the following applies:

19 ‘‘(A) The Secretary shall maintain the con20 fidentiality of the information, with provision

21 for reasonable disclosures.

22 ‘‘(B) For purposes of section 552(b)(4) of

23 title 5, United States Code, the information

24 shall be considered to be trade secrets and com-
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1 mercial or financial information obtained from

2 a person and privileged or confidential.

3 ‘‘(C) Section 1905 of title 18, United

4 States Code, applies to information maintained

5 confidentially under subparagraph (A).

6 ‘‘(c) CHARGES FOR SHIPPING AND HANDLING.—The

7 Secretary may enter into a contract under subsection (a)

8 only if the manufacturer involved agrees that the manu9 facturer will provide for delivering the vaccines on behalf

10 of the States in accordance with the programs established

11 by the States pursuant to section 2152(b)(3), and will not

12 impose any charges for the costs of such delivery (except

13 to the extent such costs are provided for in the price nego14 tiated under subsection (b)).

15 ‘‘(d) QUANTITY OF VACCINES.—For the purpose of

16 ensuring that the Federal Government has the ability to

17 carry out section 2151, the Secretary, in negotiations

18 under subsection (a), shall negotiate for maintaining a

19 supply of pediatric vaccines to meet unanticipated needs

20 for the vaccines. For purposes of the preceding sentence,

21 the Secretary shall negotiate for a 6-month supply of vac22 cines in addition to the quantity that the Secretary other23 wise would provide for in such negotiations. In carrying

24 out this paragraph, the Secretary shall consider the poten-
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1 tial for outbreaks of the diseases with respect to which

2 the vaccines have been developed.

3 ‘‘(e) NEGOTIATING AUTHORITY OF SECRETARY.—In

4 carrying out subsection (a), the Secretary, to the extent

5 determined by the Secretary to be appropriate, may enter

6 into contracts described in such subsection, may decline

7 to enter into such contracts, and with the consent of the

8 manufacturers involved, may modify such agreements and

9 may extend such agreements.

10 ‘‘(f) CERTAIN CONTRACT PROVISIONS.—

11 ‘‘(1) DURATION.—A contract entered into by

12 the Secretary under subsection (a) is effective for

13 such period as the Secretary and the manufacturer

14 involved may agree in the contract.

15 ‘‘(2) ADVANCE FUNDING.—The Secretary may,

16 pursuant to section 2152(a), enter into contracts

17 under subsection (a) under which the Federal Gov18 ernment is obligated to make outlays, the budget au19 thority for which is not provided for in advance in

20 appropriations Acts.

21 ‘‘(g) REPORTS TO SECRETARY.—The Secretary may

22 enter into a contract under subsection (a) only if the man23 ufacturer involved agrees to submit to the Secretary such

24 reports as the Secretary determines to be appropriate with

25 respect to compliance with the contract. For purposes of
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1 paragraph (3) of subsection (b), such reports shall be con2 sidered to be information provided by the manufacturer

3 to the Secretary under paragraph (2) of such subsection.

4 ‘‘(h) MULTIPLE SUPPLIERS.—

5 ‘‘(1) IN GENERAL.—In the case of the pediatric

6 vaccine involved, the Secretary shall, as appropriate,

7 enter into a contract under subsection (a) with each

8 manufacturer of the vaccine that meets the terms

9 and conditions of the Secretary for an award of such

10 a contract (including terms and conditions regarding

11 safety, quality, and price).

12 ‘‘(2) RULE OF CONSTRUCTION.—With respect

13 to multiple contracts entered into pursuant to para14 graph (1), such paragraph may not be construed as

15 prohibiting the Secretary from having in effect dif16 ferent prices under each of such contracts.

17 ‘‘SEC. 2159. CERTAIN ADMINISTRATIVE VARIATIONS.

18 ‘‘(a) TRIBES AND TRIBAL ORGANIZATIONS.—

19 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

20 the Secretary shall provide for the purchase and de21 livery on behalf of each Indian tribe and each tribal

22 organization of such quantities of pediatric vaccines

23 as may be necessary for the immunization of each

24 Indian child in the State in which the tribe or orga25 nization (as the case may be) is located.
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1 ‘‘(2) ENTITLEMENTS; ADMINISTERING PRO2 GRAM.—The Secretary may provide for the purchase

3 and delivery of pediatric vaccines under paragraph

4 (1) on behalf of an Indian tribe or tribal organiza5 tion only if the tribe or organization (as the case

6 may be) agrees that this part applies to the tribe or

7 organization (in relation to Indian children) to the

8 same extent and in the manner as such part applies

9 to States (in relation to eligible children).

10 ‘‘(b) STATE AS MANUFACTURER.—

11 ‘‘(1) PAYMENTS IN LIEU OF VACCINES.—In the

12 case of a participating State under section 2151 that

13 manufactures a pediatric vaccine and is not receiv14 ing the vaccine under such section, if the Secretary

15 determines that the program of the State under

16 2152(b)(3) is carried out with respect to the vaccine,

17 the Secretary shall provide to the State an amount

18 equal to the value of the quantity of such vaccine

19 that otherwise would have been delivered to the

20 State under section 2151, subject to the provisions

21 of this subsection.

22 ‘‘(2) DETERMINATION OF VALUE.—In deter23 mining the amount to pay a State under paragraph

24 (1) with respect to a pediatric vaccine, the value of

25 the quantity of vaccine shall be determined on the
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1 basis of the price in effect for the vaccine under con2 tracts under section 2158. If more than 1 such con3 tract is in effect, the Secretary shall determine such

4 value on the basis of the average of the prices under

5 the contracts, after weighting each such price in re6 lation to the quantity of vaccine under the contract

7 involved.

8 ‘‘(3) USE OF PAYMENTS.—A State may expend

9 payments received under paragraph (1) only for pur10 poses relating to pediatric vaccines.

11 ‘‘SEC. 2160. LIST OF PEDIATRIC VACCINES; SCHEDULE FOR

12 ADMINISTRATION.

13 ‘‘(a) RECOMMENDED PEDIATRIC VACCINES.—

14 ‘‘(1) IN GENERAL.—The Secretary shall estab15 lish a list of the vaccines that the Secretary rec16 ommends for administration to all children for the

17 purpose of immunizing the children, subject to such

18 contraindications for particular medical categories of

19 children as the Secretary may establish under sub20 section (b)(1)(D). The Secretary shall periodically

21 review the list, and shall revise the list as appro22 priate.

23 ‘‘(2) RULE OF CONSTRUCTION.—
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1 ‘‘(A) The list of vaccines specified in sub2 paragraph (B) is deemed to be the list of vac3 cines maintained under paragraph (1).

4 ‘‘(B) The list of vaccines specified in this

5 subparagraph is the list of vaccines that, for

6 purposes of paragraph (1), is established (and

7 periodically reviewed and as appropriate re8 vised) by the Advisory Committee on Immuni9 zation Practices, an advisory committee estab10 lished by the Secretary, acting through the Di11 rector of the Centers for Disease Control and

12 Prevention.

13 ‘‘(b) RECOMMENDED SCHEDULE FOR ADMINISTRA14 TION.—

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

16 in the case of a pediatric vaccine, the Secretary shall

17 establish (and periodically review and as appropriate

18 revise) a schedule of nonbinding recommendations

19 for the following:

20 ‘‘(A) The number of immunizations with

21 the vaccine that children should receive.

22 ‘‘(B) The ages at which children should re23 ceive the immunizations.

24 ‘‘(C) The dosage of vaccine that should be

25 administered in the immunizations.
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1 ‘‘(D) Any contraindications regarding ad2 ministration of the vaccine to particular medical

3 categories of children.

4 ‘‘(E) Such other guidelines as the Sec5 retary determines to be appropriate with re6 spect to administering the vaccine to children.

7 ‘‘(2) VARIATIONS IN MEDICAL PRACTICE.—In

8 establishing and revising a schedule under para9 graph (1), the Secretary shall ensure that, in the

10 case of the pediatric vaccine involved, the schedule

11 provides for the full range of variations in medical

12 judgment regarding the administration of the vac13 cine, subject to remaining within medical norms.

14 ‘‘(3) RULE OF CONSTRUCTION.—

15 ‘‘(A) The schedule specified in subpara16 graph (B) is deemed to be the schedule main17 tained under paragraph (1).

18 ‘‘(B) The schedule specified in this sub19 paragraph is the schedule that, for purposes of

20 paragraph (1), is established (and periodically

21 reviewed and as appropriate revised) by the ad22 visory committee specified in subsection

23 (a)(2)(B).

24 ‘‘(c) GENERALLY APPLICABLE RULES OF CONSTRUC25 TION.—
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1 ‘‘(1) IN GENERAL.—The list established under

2 subsection (a) and the schedules established under

3 subsection (b) do not constitute guidelines, stand4 ards, performance measures, or review criteria for

5 purposes of the program carried out by the Adminis6 trator for Health Care Policy and Research under

7 part B of title IX or under section 1142 of the So8 cial Security Act.

9 ‘‘(2) STATE LAWS.—This section does not su10 persede any State law on requirements with respect

11 to receiving immunizations (including any such law

12 relating to religious exemptions or medical exemp13 tions).

14 ‘‘(d) ISSUANCE OF LIST AND SCHEDULES.—Not later

15 than 180 days after the date of the enactment of the Om16 nibus Budget Reconciliation Act of 1993, the Secretary

17 shall establish the initial list required in subsection (a) and

18 the schedule required in subsection (b).

19 ‘‘SEC. 2161. CHILDHOOD IMMUNIZATION TRUST FUND.

20 ‘‘(a) ESTABLISHMENT OF FUND.—There is estab21 lished in the Treasury of the United States a fund to be

22 known as the National Childhood Immunization Trust

23 Fund (in this section referred to as the ‘Fund’). The Fund

24 shall consist of such amounts as may be appropriated to

25 the Fund in appropriations Acts, in the Internal Revenue
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1 Code of 1986, or in subsection (c)(3). Amounts appro2 priated to the Fund shall remain available until expended.

3 ‘‘(b) EXPENDITURES FROM FUND.—Amounts in the

4 Fund are available to the Secretary for the purpose of car5 rying out this part. Payments under the program under

6 this part, and the costs of carrying out such program,

7 shall be exempt from reduction under any order issued

8 under part C of the Balanced Budget and Emergency Def9 icit Control Act of 1985.

10 ‘‘(c) INVESTMENT.—

11 ‘‘(1) IN GENERAL.—The Secretary of the

12 Treasury shall invest such amounts of the Fund as

13 such Secretary determines are not required to meet

14 current withdrawals from the Fund. Such invest15 ments may be made only in interest-bearing obliga16 tions of the United States. For such purpose, such

17 obligations may be acquired on original issue at the

18 issue price, or by purchase of outstanding obliga19 tions at the market price.

20 ‘‘(2) SALE OF OBLIGATIONS.—Any obligation

21 acquired by the Fund may be sold by the Secretary

22 of the Treasury at the market price.

23 ‘‘(3) AVAILABILITY OF INCOME.—Any interest

24 derived from obligations acquired by the Fund, and
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1 proceeds from any sale or redemption of such obliga2 tions, are hereby appropriated to the Fund.

3 ‘‘SEC. 2162. DEFINITIONS.

4 ‘‘For purposes of this subtitle:

5 ‘‘(1) The term ‘eligible child’ has the meaning

6 given such term in section 2151(b).

7 ‘‘(2) The term ‘federally-supplied’, with respect

8 to a pediatric vaccine, means that such vaccine is

9 purchased and delivered on behalf of a State under

10 section 2151(a).

11 ‘‘(3) The term ‘health care provider’, with re12 spect to the administration of vaccines to children,

13 means an entity that is licensed or otherwise author14 ized for such administration under the law of the

15 State in which the entity administers the vaccine,

16 subject to section 333(e).

17 ‘‘(4) The term ‘immunization’ means an immu18 nization against a vaccine-preventable disease.

19 ‘‘(5) Each of the terms ‘Indian’, ‘Indian tribe’,

20 and ‘tribal organization’ has the meaning given such

21 term in section 4 of the Indian Health Care Im22 provement Act.

23 ‘‘(6) The term ‘Indian child’ means an Indian

24 who is 18 years of age or younger.
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1 ‘‘(7) The term ‘manufacturer’ means any cor2 poration, organization, or institution, whether public

3 or private (including Federal, State, and local de4 partments, agencies, and instrumentalities), which

5 manufactures, imports, processes, or distributes

6 under its label any pediatric vaccine. The term

7 ‘manufacture’ means to manufacture, import, proc8 ess, or distribute a vaccine.

9 ‘‘(8) The term ‘parent’, with respect to a child,

10 means a legal guardian of the child.

11 ‘‘(9) The term ‘participating State under sec12 tion 2151’ means a State that has submitted to the

13 Secretary an application in accordance with section

14 2157.

15 ‘‘(10) The term ‘pediatric vaccine’ means a vac16 cine included on the list established under section

17 2160(a).

18 ‘‘(11) The term ‘program-registered provider’

19 has the meaning given such term in 2153(a)(2).

20 ‘‘SEC. 2163. TERMINATION OF PROGRAM.

21 This part shall cease to be in effect beginning on such

22 date as may be prescribed in Federal law providing for

23 immunization services for all children as part of a broad24 based reform of the national health care system.
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1 ‘‘PART B—NATIONAL SYSTEM FOR MONITORING

2 IMMUNIZATION STATUS OF CHILDREN

3 ‘‘SEC. 2171. FORMULA GRANTS FOR STATE REGISTRIES

4 WITH RESPECT TO MONITORING.

5 ‘‘(a) IN GENERAL.—For the purpose described in

6 subsection (b), the Secretary, acting through the Director

7 of the Centers for Disease Control and Prevention, shall

8 make an allotment each fiscal year for each State in an

9 amount determined in accordance with section 2175. The

10 Secretary shall make a grant to the State of the allotment

11 made for the State for the fiscal year if the State submits

12 to the Secretary an application in accordance with section

13 2174.

14 ‘‘(b) AUTHORIZED ACTIVITIES.—The Secretary may

15 make a grant under subsection (a) only if the State agrees

16 to expend the grant for the purpose of—

17 ‘‘(1) collecting the data described in section

18 2172;

19 ‘‘(2) operating registries to maintain the data

20 (and establishing such registries, in the case of a

21 State that is not operating such a registry);

22 ‘‘(3) utilizing the data to monitor the extent to

23 which children have received immunizations in ac24 cordance with the schedule established under section

25 2160(b);
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1 ‘‘(4) notifying parents if children have not re2 ceived immunizations in accordance with such sched3 ule; and

4 ‘‘(5) such other activities as the Secretary may

5 authorize with respect to achieving the objectives es6 tablished by the Secretary for the year 2000 for the

7 immunization status of children in the United

8 States.

9 ‘‘(c) REQUIREMENT REGARDING STATE LAWS.—

10 ‘‘(1) IN GENERAL.—The Secretary may make a

11 grant under subsection (a) only if the State in12 volved—

13 ‘‘(A) provides assurances satisfactory to

14 the Secretary that, not later than October 1,

15 1996, the State will be operating a registry in

16 accordance with this part, including having in

17 effect such laws and regulations as may be nec18 essary to so operate such a registry; and

19 ‘‘(B) agrees that, prior to such date, the

20 State will make such efforts to operate a reg21 istry in accordance with this part as may be au22 thorized in the law and regulations of the State.

23 ‘‘(2) RULES OF CONSTRUCTION.—

24 ‘‘(A) With respect to the agreements made

25 by a State under this part, other than the
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1 agreement under paragraph (1)(B), the Sec2 retary may require compliance with the agree3 ments only to the extent consistent with such

4 paragraph.

5 ‘‘(B) This part does not authorize the Sec6 retary, as a condition of the receipt of a grant

7 under subsection (a) by a State, to prohibit the

8 State from providing any parent, upon the re9 quest of the parent, with an exemption from the

10 requirements established by the State pursuant

11 to this part for the collection of data regarding

12 any child of the parent.

13 ‘‘SEC. 2172. REGISTRY DATA.

14 ‘‘(a) IN GENERAL.—For purposes of section

15 2171(b)(1), the data described in this section are the data

16 described in subsection (b) and the data described in sub17 section (c). This section applies to data regarding a child

18 without regard to whether the child is an eligible child as

19 defined in section 2162.

20 ‘‘(b) DATA REGARDING BIRTH OF CHILD.—With re21 spect to the birth of a child, the data described in this

22 subsection is as follows:

23 ‘‘(1) The name of each child born in the State

24 involved on or after October 1, 1993.

25 ‘‘(2) Demographic data on the child.
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1 ‘‘(3) The name of one or both of the parents of

2 the child.

3 ‘‘(4) The address, as of the date of the birth of

4 the child, of each parent whose name is received in

5 the registry pursuant to paragraph (3).

6 ‘‘(c) DATA REGARDING INDIVIDUAL IMMUNIZA7 TIONS.—With respect to a child to whom a pediatric vac8 cine is administered in the State involved, the data de9 scribed in this subsection is as follows:

10 ‘‘(1) The name, age, and address of the child.

11 ‘‘(2) The date on which the vaccine was admin12 istered to the child.

13 ‘‘(3) The name and business address of the

14 health care provider that administered the vaccine.

15 ‘‘(4) The address of the facility at which the

16 vaccine was administered.

17 ‘‘(5) The name and address of one or both par18 ents of the child as of the date on which the vaccine

19 was administered, if such information is available to

20 the health care provider.

21 ‘‘(6) The type of vaccine.

22 ‘‘(7) The number or other information identify23 ing the particular manufacturing batch of the vac24 cine, if such information appears on the container or
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1 packaging for the vaccine or is otherwise readily ac2 cessible to the health care provider.

3 ‘‘(8) The dosage of vaccine that was adminis4 tered.

5 ‘‘(9) A description of any adverse medical reac6 tions that the child experienced in relation to the

7 vaccine and of which the health care provider is

8 aware.

9 ‘‘(10) Any other contraindications noted by the

10 health care provider with respect to administration

11 of the vaccine to the child.

12 ‘‘(11) Such other data regarding immunizations

13 for the child, including identifying data, as the Sec14 retary may require consistent with applicable law

15 (including social security account numbers furnished

16 pursuant to section 205(c)(2)(E) of the Social Secu17 rity Act).

18 ‘‘(d) DATE CERTAIN FOR SUBMISSION TO REG19 ISTRY.—The Secretary may make a grant under section

20 2171 only if the State involved agrees to ensure that, with

21 respect to a child—

22 ‘‘(1) the data described in subsection (b) are

23 submitted to the registry under such section not

24 later than 6 weeks after the date on which the child

25 is born; and
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1 ‘‘(2) the data described in subsection (c) with

2 respect to a vaccine are submitted to such registry

3 not later than 6 weeks after the date on which the

4 vaccine is administered to the child.

5 ‘‘SEC. 2173. GENERAL PROVISIONS.

6 ‘‘(a) FEDERAL STANDARDS ON CONFIDENTIALITY.—

7 The Secretary shall by regulation establish standards pro8 viding for maintaining the confidentiality of the identity

9 of individuals with respect to whom data are maintained

10 in a registries under section 2171. Such standards shall,

11 with respect to a State, provide that the State is to have

12 in effect laws regarding such confidentiality, including ap13 propriate penalties for violation of the laws. The Secretary

14 may make a grant under such section only if the State

15 involved agrees to comply with the standards.

16 ‘‘(b) USE OF SOCIAL SECURITY ACCOUNT NUM17 BERS.—Any usage or disclosure of data in registries under

18 section 2171 that consists of social security account num19 bers and related information which is otherwise permitted

20 under this part may be exercised only to the extent per21 mitted under section 205(c)(2)(E) of the Social Security

22 Act. For purposes of the preceding sentence, the term ‘re23 lated information’ has the meaning given such term in

24 clause (iv)(II) of such section.
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1 ‘‘(c) UNIFORMITY IN METHODOLOGIES.—The Sec2 retary shall establish standards regarding the methodolo3 gies used in establishing and operating registries under

4 section 2171, and may make a grant under such section

5 only if the State agrees to comply with the standards. The

6 Secretary shall provide for a reasonable degree of uniform7 ity among the States in such methodologies for the pur8 pose of ensuring the utility, comparability, and exchange

9 of the data maintained in such registries.

10 ‘‘(d) COORDINATION AMONG STATES.—The Sec11 retary may make a grant under section 2171 to a State

12 only if, with respect to the operation of the registry of

13 the State under such section, the State agrees to cooperate

14 with the Secretary and with other States in carrying out

15 activities with respect to achieving the objectives estab16 lished by the Secretary for the year 2000 for the immuni17 zation status of children in the United States.

18 ‘‘(e) REPORTS TO SECRETARY.—The Secretary may

19 make a grant under section 2171 only if the State involved

20 agrees to submit to the Secretary such reports as the Sec21 retary determines to be appropriate with respect to the

22 activities of the State under this part.

23 ‘‘SEC. 2174. APPLICATION FOR GRANT.

24 ‘‘An application by a State for a grant under section

25 2171 is in accordance with this section if the application—
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1 ‘‘(1) is submitted not later than the date speci2 fied by the Secretary;

3 ‘‘(2) contains each agreement required in this

4 part;

5 ‘‘(3) contains any information required in this

6 part to be submitted to the Secretary; and

7 ‘‘(4) is in such form, is made in such manner,

8 and contains such agreements, assurances, and in9 formation as the Secretary determines to be nec10 essary to carry out this part.

11 ‘‘SEC. 2175. DETERMINATION OF AMOUNT OF ALLOTMENT.

12 ‘‘The Secretary shall determine the amount of the al13 lotments required in section 2171 for States for a fiscal

14 year in accordance with a formula established by the Sec15 retary that allots the amounts appropriated under section

16 2177 for the fiscal year on the basis of the costs of the

17 States in establishing and operating registries under sec18 tion 2171.

19 ‘‘SEC. 2176. DEFINITIONS.

20 ‘‘For purposes of this part, each of the terms ‘health

21 care provider, ‘pediatric vaccine’ and ‘parent’ has the

22 meaning given the term in section 2162.

23 ‘‘SEC. 2177. AUTHORIZATION OF APPROPRIATIONS.

24 ‘‘For the purpose of carrying out this part, there are

25 authorized to be appropriated $50,000,000, for fiscal year
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1 1994, $152,000,000 for fiscal year 1995, $125,000,000

2 for fiscal year 1996, and $35,000,000 for each of the fis3 cal years 1997 through 1999.

4 ‘‘PART C—FUNDING FOR OTHER PURPOSES REGARDING

5 CHILDHOOD IMMUNIZATIONS

6 ‘‘SEC. 2181. GRANTS REGARDING YEAR 2000 HEALTH OBJEC7 TIVES.

8 ‘‘(a) IN GENERAL.—The Secretary, acting through

9 the Director of the Centers for Disease Control and Pre10 vention, may make grants to States for the purpose of car11 rying out activities with respect to achieving the objectives

12 established by the Secretary for the year 2000 for the im13 munization status of children in the United States, other

14 than providing for the purchase and delivery on behalf of

15 the State of any pediatric vaccine (as defined in section

16 2162).

17 ‘‘(b) CERTAIN ACTIVITIES.—Subject to subsection

18 (a), the purposes for which a grant under such subsection

19 may be expended include the following:

20 ‘‘(1) Research into the prevention and control

21 of diseases that may be prevented through vaccina22 tion.

23 ‘‘(2) Demonstration projects for the prevention

24 and control of such diseases.
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1 ‘‘(3) Public information and education pro2 grams for the prevention and control of such dis3 eases.

4 ‘‘(4) Education, training, and clinical skills im5 provement activities in the prevention and control of

6 such diseases for health professionals (including al7 lied health personnel).

8 ‘‘(5) Such other activities as the Secretary de9 termines to be appropriate.

10 ‘‘(c) APPLICATION FOR GRANT.—The Secretary may

11 make a grant under subsection (a) only if an application

12 for the grant is submitted to the Secretary and the appli13 cation is in such form, is made in such manner, and con14 tains such agreements, assurances, and information as the

15 Secretary determines to be necessary to carry out this sec16 tion.

17 ‘‘(d) SUPPLIES AND SERVICES IN LIEU OF GRANT

18 FUNDS.— The Secretary, at the request of a recipient of

19 a grant under subsection (a), may reduce the amount of

20 such grant by—

21 ‘‘(1) the fair market value of any supplies or

22 equipment furnished the grant recipient, and

23 ‘‘(2) the amount of the pay, allowances, and

24 travel expenses of any officer or employee of the

25 Federal Government when detailed to the grant re-
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1 cipient and the amount of any other costs incurred

2 in connection with the detail of such officer or em3 ployee.

4 When the furnishing of such supplies or equipment or the

5 detail of such an officer or employee is for the convenience

6 of and at the request of such grant recipient and for the

7 purpose of carrying out a program with respect to which

8 the grant under subsection (a) is made. The amount by

9 which any such grant is so reduced shall be available for

10 payment by the Secretary of the costs incurred in furnish11 ing the supplies or equipment, or in detailing the person12 nel, on which the reduction of such grant is based, and

13 such amount shall be deemed as part of the grant and

14 shall be deemed to have been paid to the grant recipient.

15 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

16 purpose of carrying out this part, there are authorized to

17 be appropriated $580,000,000 for fiscal year 1993,

18 $680,000,000 for fiscal year 1994, and such sums as may

19 be necessary for each of the fiscal years 1995 through

20 1999.’’.

21 (b) AUTHORITY TO USE SOCIAL SECURITY ACCOUNT

22 NUMBERS.—Section 205(c)(2) of the Social Security Act

23 (42 U.S.C. 405(c)(2)) is amended—

24 (1) by redesignating subparagraphs (E) and

25 (F) as subparagraphs (F) and (G), respectively; and
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1 (2) by inserting after subparagraph (D) the fol2 lowing new subparagraph:

3 ‘‘(E)(i) The Secretary and each State receiving

4 grants under section 2171(a) of the Public Health Service

5 Act may utilize social security account numbers issued by

6 the Secretary under this subsection for purposes of—

7 ‘‘(I) operating registries under such section to

8 maintain information including such numbers (and

9 establishing such registries, in the case of a State

10 that is not operating such a registry),

11 ‘‘(II) utilizing such numbers to monitor the ex12 tent to which children have received immunizations

13 in accordance with the schedule established under

14 section 2160(b) of the Public Health Service Act,

15 and

16 ‘‘(III) notifying parents if children have not re17 ceived immunizations in accordance with such sched18 ule.

19 ‘‘(ii) Disclosure by individuals of social security ac20 count numbers may be required by a State for purposes

21 of identification of children in a registry operated pursu22 ant to a grant referred to in clause (i), except that such

23 disclosure may be required to be made only to persons spe24 cifically authorized in regulations of the Secretary pre25 scribed under part B of subtitle 3 of title XXI of the Pub-
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1 lic Health Service Act. The Secretary shall take such ac2 tions as are necessary to restrict access to information

3 consisting of such numbers and related information only

4 to such authorized persons whose duties or responsibilities

5 require access for the purposes described in clause (i). The

6 Secretary shall issue regulations governing the use, main7 tenance, and disclosure by any holder of such information,

8 including appropriate administrative, technical, and phys9 ical safeguards, to ensure that only such authorized per10 sons have access to such information. Any use or disclo11 sure of such information in violation of such regulations

12 shall be deemed a disclosure in violation of subparagraph

13 (C)(vii).

14 ‘‘(iii) The Secretary shall submit a report to the Com15 mittee on Ways and Means of the House of Representa16 tives and the Committee on Finance of the Senate not

17 later than January 1, 1996, and biennially thereafter, on

18 the operation of this subparagraph.

19 ‘‘(iv) For purposes of this subparagraph—

20 ‘‘(I) the term ‘State’ has the meaning provided

21 such term under section 2(f) of the Public Health

22 Service Act, and

23 ‘‘(II) the term ‘related information’ means any

24 record, list, or compilation which indicates, directly

25 or indirectly, the identity of any individual with re-
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1 spect to whom a social security account number is

2 maintained pursuant to this subparagraph and part

3 B of subtitle 3 of title XXI of the Public Health

4 Service Act.’’.

5 (c) RELATIONSHIP OF NEW PROGRAM OF IMMUNIZA6 TION GRANTS TO CURRENT PROGRAM.—

7 (1) STRIKING OF CURRENT PROGRAM.—Section

8 317 of the Public Health Service Act (42 U.S.C.

9 247b) is amended—

10 (A) in subsection (j)—

11 (i) by striking paragraph (1); and

12 (ii) by striking the remaining para13 graph designation; and

14 (B) in subsection (k)—

15 (i) by striking paragraph (1); and

16 (ii) by redesignating paragraphs (2)

17 and (3) as paragraphs (1) and (2), respec18 tively.

19 (2) TRANSITIONAL AUTHORITY UNDER NEW

20 PROGRAM.—With respect to activities that the Sec21 retary of Health and Human Services was author22 ized to carry out pursuant to section 317(j)(1) of

23 the Public Health Service Act (as in effect on the

24 day before the date of the enactment of this Act),

25 the Secretary may, for fiscal year 1994, carry out
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1 any such activity under section 2181 of the Public

2 Health Service Act (as added by subsection (a) of

3 this section), notwithstanding the provisions of such

4 section 2181. The authority established in the pre5 ceding sentence includes the authority to purchase

6 vaccines.

7 (d) CONTINUED COVERAGE OF COSTS OF A PEDI8 ATRIC VACCINE UNDER GROUP HEALTH PLANS.—

9 (1) REQUIREMENT.—The requirement of this

10 paragraph, with respect to a group health plan for

11 plan years beginning after the date of the enactment

12 of this Act, is that the group health plan not reduce

13 its coverage of the costs of pediatric vaccines (as de14 fined under section 2162 of the Public Health Serv15 ice Act) below the coverage it provided as of May 1,

16 1993.

17 (2) ENFORCEMENT.—

18 (A) For purposes of section 2207 of the

19 Public Health Service Act, the requirement of

20 paragraph (1) is deemed a requirement of title

21 XXII of such Act.

22 (B) For purposes of subsections (a)

23 through (e) of section 4980B of the Internal

24 Revenue Code of 1986, paragraph (1) is
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1 deemed a requirement of subsection (f) of such

2 section.

3 (C) For purposes of section 502 of the

4 Employee Retirement Income Security Act of

5 1974, paragraph (1) is deemed a provision of

6 part 6 of subtitle B of title I of such Act.

7 SEC. 5182. NATIONAL VACCINE INJURY COMPENSATION

8 PROGRAM AMENDMENTS.

9 (a) USE OF VACCINE INJURY COMPENSATION TRUST

10 FUND.—Section 6601(r) of the Omnibus Budget Rec11 onciliation Act of 1989 is amended by striking

12 ‘‘$2,500,000 for each of fiscal years 1991 and 1992’’ each

13 place it appears and inserting ‘‘$3,000,000 for fiscal year

14 1994 and each fiscal year thereafter’’ (in three places).

15 (b) AMENDMENT OF VACCINE INJURY TABLE.—Sec16 tion 2116(b) of the Public Health Service Act (42 U.S.C.

17 300aa–16(b)) is amended by striking ‘‘such person may

18 file’’ and inserting ‘‘or to significantly increase the likeli19 hood of obtaining compensation, such person may, not20 withstanding section 2111(b)(2), file’’.

21 (c) EXTENSION OF TIME FOR DECISION.—Section

22 2112(d)(3)(D) of such Act (42 U.S.C. 300aa–

23 12(d)(3)(D)) is amended by striking ‘‘540 days’’ and in24 serting ‘‘30 months (but for no more than 6 months at

25 a time)’’.
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1 (d) SIMPLIFICATION OF VACCINE INFORMATION MA2 TERIALS.—

3 (1) Section 2126(b) of such Act (42 U.S.C.

4 300aa–26(b)) is amended—

5 (A) by striking ‘‘by rule’’ in the matter

6 preceding paragraph (1);

7 (B) by striking, in paragraph (1), ‘‘, op8 portunity for a public hearing, and 90’’ and in9 serting ‘‘and 30’’; and

10 (C) by striking, in paragraph (2), ‘‘, appro11 priate health care providers and parent organi12 zations’’.

13 (2) Section 2126(c) of such Act (42 U.S.C.

14 300aa–26(c)) is amended—

15 (A) by inserting ‘‘shall be based on avail16 able data and information,’’ after ‘‘such mate17 rials’’ in the matter preceding paragraph (1),

18 and

19 (B) by striking paragraphs (1) through

20 (10) and inserting the following:

21 ‘‘(1) a concise description of the benefits of the

22 vaccine,

23 ‘‘(2) a concise description of the risks associ24 ated with the vaccine,
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1 ‘‘(3) a statement of the availability of the Na2 tional Vaccine Injury Compensation Program, and

3 ‘‘(4) such other relevant information as may be

4 determined by the Secretary.’’.

5 (3) Subsections (a) and (d) of section 2126 of

6 such Act (42 U.S.C. 300aa–26) are each amended

7 by inserting ‘‘or to any other individual’’ after ‘‘to

8 the legal representative of any child’’.

9 (4) Subsection (d) of section 2126 of such Act

10 (42 U.S.C. 300aa–26) is amended—

11 (A) by striking all after ‘‘subsection (a),’’

12 the second place it appears in the first sentence

13 and inserting ‘‘supplemented with visual presen14 tations or oral explanations, in appropriate

15 cases.’’, and

16 (B) by striking ‘‘or other information’’ in

17 the last sentence.

18 SEC. 5183. MEDICAID IMMUNIZATION PROVISIONS.

19 (a) OUTREACH AND EDUCATION.—

20 (1) IMMUNIZATION OUTREACH THROUGH EPSDT

21 PROGRAM.—Section 1902(a)(43)(A) (42 U.S.C.

22 1396a(a)(43)(A)) is amended by inserting before the

23 comma at the end the following: ‘‘and the need for

24 age-appropriate immunizations against vaccine-pre25 ventable diseases’’.
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1 (2) COORDINATION WITH MATERNAL AND

2 CHILD HEALTH BLOCK GRANT PROGRAMS AND WIC

3 PROGRAMS.—Section 1902(a)(11) (42 U.S.C.

4 1396a(a)(11)) is amended—

5 (A) in clause (B)—

6 (i) by striking ‘‘effective July 1,

7 1969,’’,

8 (ii) by striking ‘‘and’’ before ‘‘(ii)’’,

9 and

10 (iii) by striking ‘‘to him under section

11 1903’’ and inserting ‘‘to the individual

12 under section 1903, and (iii) providing for

13 coordination of information and education

14 on childhood vaccinations and delivery of

15 immunization services’’; and

16 (B) in clause (C), by inserting ‘‘(including

17 the provision of information and education on

18 childhood vaccinations and the delivery of im19 munization services)’’ after ‘‘operations under

20 this title’’.

21 (3) COVERAGE OF PUBLIC HOUSING HEALTH

22 CENTERS AS FEDERALLY-QUALIFIED HEALTH CEN23 TERS.—Section 1905(l)(2)(B) (42 U.S.C.

24 1396d(l)(2)(B)) is amended by striking ‘‘or 340’’

25 each place it appears and inserting ‘‘340, or 340A’’.
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1 (4) EFFECTIVE DATE.—(A) Except as provided

2 in subparagraph (B), the amendments made by this

3 subsection shall apply to calendar quarters beginning

4 on or after October 1, 1993, without regard to

5 whether or not final regulations to carry out such

6 amendments have been promulgated by such date.

7 (B) In the case of a State plan for medical as8 sistance under title XIX of the Social Security Act

9 which the Secretary of Health and Human Services

10 determines requires State legislation (other than leg11 islation appropriating funds) in order for the plan to

12 meet the additional requirements imposed by the

13 amendments made by this subsection, the State plan

14 shall not be regarded as failing to comply with the

15 requirements of such title solely on the basis of its

16 failure to meet these additional requirements before

17 the first day of the first calendar quarter beginning

18 after the close of the first regular session of the

19 State legislature that begins after the date of the en20 actment of this Act. For purposes of the previous

21 sentence, in the case of a State that has a 2-year

22 legislative session, each year of such session shall be

23 deemed to be a separate regular session of the State

24 legislature.
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1 (b) SCHEDULE OF IMMUNIZATIONS UNDER

2 EPSDT.—

3 (1) IN GENERAL.—Section 1905(r)(1) (42

4 U.S.C. 1396d(r)(1)) is amended—

5 (A) in subparagraph (A)(i), by inserting

6 ‘‘and, with respect to immunizations under sub7 paragraph (B)(iii), in accordance with the

8 schedule recommended by the Secretary under

9 section 2160 of the Public Health Service Act’’

10 after ‘‘child health care’’; and

11 (B) in subparagraph (B)(iii), by inserting

12 ‘‘(according to the schedule recommended by

13 the Secretary under section 2160 of the Public

14 Health Service Act)’’ after ‘‘appropriate immu15 nizations’’.

16 (2) EFFECTIVE DATE.—The amendments made

17 by subparagraphs (A) and (B) of paragraph (1)

18 shall first apply 90 days after the date the Secretary

19 of Health and Human Services first issues the rec20 ommended schedule referred to in subparagraphs

21 (A)(i) and subparagraph (B)(iii) of section

22 1905(r)(1) of the Social Security Act (as amended

23 by such respective subparagraphs).

24 (c) ASSURING ADEQUATE PAYMENT RATES FOR AD25 MINISTRATION OF VACCINES TO CHILDREN.—
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1 (1) PAYMENT RATES.—Section 1926(a)(4)(B)

2 (42 U.S.C. 1396r–7(a)(4)(B)) is amended by insert3 ing ‘‘(including the administration of vaccines)’’

4 after ‘‘means services’’.

5 (2) EFFECTIVE DATE.—The amendment made

6 by paragraph (1) shall apply to the plan amendment

7 required to be submitted under section 1926(a)(2) of

8 the Social Security Act by not later than April 1,

9 1994.

10 (d) DENIAL OF FEDERAL FINANCIAL PARTICIPATION

11 FOR INAPPROPRIATE ADMINISTRATION OF SINGLE–ANTI12 GEN VACCINE.—

13 (1) IN GENERAL.—Section 1903(i) (42 U.S.C.

14 1396b(i)), as amended by sections 5174(b) and

15 5131(a), is amended—

16 (A) in paragraph (13), by striking ‘‘or’’ at

17 the end,

18 (B) in paragraph (14), by striking the pe19 riod at the end and inserting ‘‘; or’’, and

20 (C) by inserting after paragraph (14) the

21 following new paragraph:

22 ‘‘(15) with respect to any amount expended for

23 a single-antigen vaccine and its administration in

24 any case in which the administration of a combined-
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1 antigen vaccine was medically appropriate (as deter2 mined by the Secretary).’’.

3 (2) EFFECTIVE DATE.—The amendments made

4 by paragraph (1) shall apply to amounts expended

5 for vaccines administered on or after October 1,

6 1993.

7 (e) REQUIRING MEDICAID MANAGED CARE PLANS

8 T±±O COMPLY WITH IMMUNIZATION AND OTHER EPSDT

9 REQUIREMENTS.—

10 (1) IN GENERAL.—Section 1903(m) (42 U.S.C.

11 1396b(m)) is amended—

12 (A) in paragraph (2)(A), as amended by

13 subsections (a)(1) and (b)(1) of section 5135—

14 (i) by striking ‘‘and’’ at the end of

15 clause (xii),

16 (ii) by striking the period at the end

17 of clause (xiii) and inserting ‘‘; and’’, and

18 (iii) by adding at the end the follow19 ing new clause:

20 ‘‘(xiv) the entity complies with the requirements

21 of paragraph (7) (relating to EPSDT compliance).’’;

22 and

23 (B) by adding at the end the following new

24 paragraph:
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1 ‘‘(7) The contract between the State and an entity

2 referred to in paragraph (2)(A)(iii) shall—

3 ‘‘(A) specify which early and periodic screening,

4 diagnostic, and treatment services are to be provided

5 under the contract to individuals under age 21 en6 rolled with the entity;

7 ‘‘(B) in the case of such services which are not

8 to be so provided, specify the steps the entity will

9 take (through referrals or other arrangements) to

10 assure that such individuals will receive such serv11 ices; and

12 ‘‘(C) require the entity to submit such periodic

13 reports as may be necessary to enable the State to

14 prepare and submit timely reports under section

15 1902(a)(43)(D) and section 506(a)(2).’’.

16 (2) APPLICATION OF INTERMEDIATE SANC17 TIONS FOR FAILURE TO PROVIDE IMMUNIZATIONS

18 AND OTHER EPSDT SERVICES.—Section

19 1903(m)(5)(A) (42 U.S.C. 1396b(m)(5)(A)) is

20 amended—

21 (A) by striking ‘‘, or’’ at the end of clause

22 (iv) and inserting a semicolon,

23 (B) by striking the comma at the end of

24 clause (v) and inserting ‘‘; or’’, and
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1 (C) by inserting after clause (v) the follow2 ing new clause:

3 ‘‘(vi) fails substantially to provide early and

4 periodic screening, diagnostic, and treatment serv5 ices to the extent specified in the contract under

6 paragraph (7)(A);’’.

7 (3) EFFECTIVE DATE.—The amendments made

8 by this subsection shall apply to contract years be9 ginning on or after October 1, 1993, without regard

10 to whether or not final regulations to carry out such

11 amendments have been promulgated by such date.

12 (f) TRANSITION RULE.—

13 (1) MEDICAID USE OF CDC CONTRACT PRICE.—

14 The Secretary of Health and Human Services shall

15 not, on or after the date of the enactment of this

16 Act, enter into a contract for the purchase by the

17 Centers for Disease Control and Prevention of pedi18 atric vaccines for distribution (as provided for in

19 section 317 or section 2181 of the Public Health

20 Service Act) unless such contract provides that the

21 charge for such vaccines, for which medical assist22 ance is provided under a State plan under title XIX

23 of the Social Security Act, will not exceed the price

24 negotiated under the contract. The previous sentence

25 shall not apply, with respect to a vaccine for which
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1 medical assistance is provided by a State, on and

2 after such date as the State becomes entitled to have

3 the Secretary provide for the purchase and delivery

4 on behalf of the State of that vaccine under section

5 2151 of the Public Health Service Act.

6 (2) OPTIONAL USE BY STATES OF CDC CON7 TRACT PRICE.—Nothing in paragraph (1) shall be

8 construed as limiting the Federal financial participa9 tion available to States, under title XIX of the So10 cial Security Act, for the cost of a pediatric vaccine

11 to the contract price described in such paragraph for

12 the vaccine.

13 SEC. 5184. AVAILABILITY OF MEDICAID PAYMENTS FOR

14 CHILDHOOD VACCINE REPLACEMENT PRO15 GRAMS.

16 (a) IN GENERAL.—Section 1902(a)(32) (42 U.S.C.

17 1396a(a)(32)) is amended—

18 (1) by striking ‘‘and’’ at the end of subpara19 graph (B),

20 (2) by striking the period at the end of sub21 paragraph (C) and inserting ‘‘; and’’, and

22 (3) by adding at the end the following new sub23 paragraph:

24 ‘‘(D) in the case of payment for a child25 hood vaccine administered to individuals enti-
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1 tled to medical assistance under the State plan,

2 the State plan may make payment directly to

3 the manufacturer of the vaccine under a vol4 untary replacement program agreed to by the

5 State pursuant to which the manufacturer (i)

6 supplies doses of the vaccine to providers ad7 ministering the vaccine, (ii) periodically replaces

8 the supply of the vaccine, and (iii) charges the

9 State the manufacturer’s bid price to the Cen10 ters for Disease Control and Prevention for the

11 vaccine so administered plus a reasonable pre12 mium to cover shipping and the handling of re13 turns;’’.

14 (b) EFFECTIVE DATE.—The amendments made by

15 subsection (a) shall take effect on the date of the enact16 ment of this Act.

17 SEC. 5185. HEALTHY START FOR INFANTS.

18 (a) IN GENERAL.—Part D of title III of the Public

19 Health Service Act (42 U.S.C. 254b et seq.) is amended

20 by inserting after section 330 the following section:

21 ‘‘HEALTHY START FOR INFANTS

22 ‘‘SEC. 330A. (a) GRANTS FOR COMPREHENSIVE

23 SERVICES.—

24 ‘‘(1) IN GENERAL.—The Secretary may make

25 grants for the operation of not more than 21 dem26 onstration projects to provide the services described
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1 in subsection (b) for the purpose of reducing, in the

2 geographic areas in which the projects are carried

3 out—

4 ‘‘(A) the incidence of infant mortality and

5 morbidity;

6 ‘‘(B) the incidence of fetal deaths;

7 ‘‘(C) the incidence of maternal mortality;

8 ‘‘(D) the incidence of fetal alcohol syn9 drome; and

10 ‘‘(E) the incidence of low-birthweight

11 births.

12 ‘‘(2) ACHIEVEMENT OF YEAR 2000 HEALTH STA13 TUS OBJECTIVES.—With respect to the objectives es14 tablished by the Secretary for the health status of

15 the population of the United States for the year

16 2000, the Secretary shall, in providing for a dem17 onstration project under paragraph (1) in a geo18 graphic area, seek to meet the objectives that are

19 applicable to the purpose described in such para20 graph and the populations served by the project.

21 ‘‘(b) AUTHORIZED SERVICES.—

22 ‘‘(1) IN GENERAL.—Subject to subsection (h),

23 the services referred to in this subsection are com24 prehensive services (including preventive and pri25 mary health services for pregnant women and in-
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1 fants and childhood immunizations in accordance

2 with the schedule recommended by the Secretary

3 under section 2160) for carrying out the purpose de4 scribed in subsection (a), including services other

5 than health services.

6 ‘‘(2) CERTAIN PROVIDERS.—The Secretary may

7 make a grant under subsection (a) only if the appli8 cant involved agrees that, in making any arrange9 ments under which other entities provide authorized

10 services in the demonstration project involved, the

11 applicant will include among the entities with which

12 the arrangements are made grantees under any of

13 sections 329, 330, 340, and 340A, if such grantees

14 are providing services in the service area of such

15 project and the grantees are willing to make such

16 arrangements with the applicant.

17 ‘‘(c) ELIGIBLE GEOGRAPHIC AREAS.—The Secretary

18 may make a grant under subsection (a) only if—

19 ‘‘(1) the applicant for the grant specifies the

20 geographic area in which the demonstration project

21 under such subsection is to be carried out and

22 agrees that the project will not be carried out in

23 other areas; and
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1 ‘‘(2) the rate of infant mortality in the geo2 graphic area equals or exceeds 150 percent of the

3 national average in the United States of such rates.

4 ‘‘(d) MINIMUM QUALIFICATIONS OF GRANTEES.—

5 ‘‘(1) PUBLIC OR NONPROFIT PRIVATE ENTI6 TIES.—The Secretary may make a grant under sub7 section (a) only if the applicant for the grant is a

8 State or local department of health, or other public

9 or nonprofit private entity, or a consortium of public

10 or nonprofit private entities.

11 ‘‘(2) APPROVAL OF POLITICAL SUBDIVISIONS.—

12 With respect to a proposed demonstration project

13 under subsection (a), the Secretary may make a

14 grant under such subsection only if—

15 ‘‘(A) the chief executive officer of each po16 litical subdivision in the service area of such

17 project approves the applicant for the grant as

18 being qualified to carry out the project; and

19 ‘‘(B) the leadership of any Indian tribe or

20 tribal organization with jurisdiction over any

21 portion of such area so approves the applicant.

22 ‘‘(3) STATUS AS MEDICAID PROVIDER.—

23 ‘‘(A) In the case of any service described

24 in subsection (b) that is available pursuant to

25 the State plan approved under title XIX of the
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1 Social Security Act for a State in which a dem2 onstration project under subsection (a) is car3 ried out, the Secretary may make a grant under

4 such subsection for the project only if, subject

5 to subparagraph (B)—

6 ‘‘(i) the applicant for the grant will

7 provide the service directly, and the appli8 cant has entered into a participation agree9 ment under the State plan and is qualified

10 to receive payments under such plan; or

11 ‘‘(ii) the applicant will enter into an

12 agreement with a public or private entity

13 under which the entity will provide the

14 service, and the entity has entered into

15 such a participation agreement under the

16 State plan and is qualified to receive such

17 payments.

18 ‘‘(B)(i) In the case of an entity making an

19 agreement pursuant to subparagraph (A)(ii) re20 garding the provision of services, the require21 ment established in such subparagraph regard22 ing a participation agreement shall be waived

23 by the Secretary if the entity does not, in pro24 viding health care services, impose a charge or

25 accept reimbursement available from any third-
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1 party payor, including reimbursement under

2 any insurance policy or under any Federal or

3 State health benefits plan.

4 ‘‘(ii) A determination by the Secretary of

5 whether an entity referred to in clause (i) meets

6 the criteria for a waiver under such clause shall

7 be made without regard to whether the entity

8 accepts voluntary donations regarding the pro9 vision of services to the public.

10 ‘‘(e) STATE APPROVAL OF PROJECT.—With respect

11 to a proposed demonstration project under subsection (a),

12 the Secretary may make a grant under such subsection

13 to the applicant involved only if—

14 ‘‘(1) the chief executive officer of the State in

15 which the project is to be carried out approves the

16 proposal of the applicant for carrying out the

17 project; and

18 ‘‘(2) the leadership of any Indian tribe or tribal

19 organization with jurisdiction over any portion of the

20 service area of the project so approves the proposal.

21 ‘‘(f) ELIGIBILITY FOR SERVICES PROVIDED WITH

22 GRANT FUNDS.—

23 ‘‘(1) IN GENERAL.—With respect to any au24 thorized service under subsection (b), if the service

25 is a service that States are required or authorized to
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1 provide under title XIX of the Social Security Act,

2 the Secretary may make a grant under subsection

3 (a) only if the applicant involved agrees that the

4 grant will not be expended to provide the service to

5 any individual to whom States are required or au6 thorized under such title to provide the service. The

7 Secretary may not make a grant under subsection

8 (a) unless the State involved agrees that the grant

9 will not be expended to make payment for any item

10 or service to the extent that payment has been

11 made, or can reasonably be expected to be made,

12 with respect to such item or service—

13 ‘‘(A) under a health insurance policy or

14 plan (including a group health plan or a pre15 paid health plan),

16 ‘‘(B) under any Federal or State health

17 benefits program, including any program under

18 title V, XVIII, or XIX of the Social Security

19 Act, or

20 ‘‘(C) under subpart 2 of part B of title

21 XIX of this Act.

22 ‘‘(2) RULES OF CONSTRUCTION.—For purposes

23 of paragraph (1):

24 ‘‘(A) Individuals to whom States are au25 thorized to provide services under title XIX of
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1 the Social Security Act include, pursuant to

2 section 1902(l) of such title, pregnant women,

3 infants, and children with an income level not

4 less than 133 percent, and not more than 185

5 percent, of the official poverty line.

6 ‘‘(B) Authorized services under subsection

7 (b) that are authorized to be provided under

8 title XIX of such Act include, pursuant to sec9 tion 1920 of such title, ambulatory prenatal

10 services during a period of presumptive eligi11 bility.

12 ‘‘(C) Authorized services under subsection

13 (b) that are required to be provided under title

14 XIX of such Act include, pursuant to section

15 1905(a)(4)(B) of such title, early and periodic

16 screening, diagnostic, and treatment services for

17 children under the age of 21.

18 ‘‘(D) Authorized services under subsection

19 (b) that are authorized to be provided under

20 title XIX of such Act include, pursuant to sec21 tion 1905(a)(19) of such title, case-manage22 ment services.

23 ‘‘(g) MAINTENANCE OF EFFORT.—

24 ‘‘(1) GRANTEE.—With respect to authorized

25 services under subsection (b), the Secretary may
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1 make a grant under subsection (a) only if the appli2 cant involved agrees to maintain expenditures of

3 non-Federal amounts for such services at a level

4 that is not less than the level of such expenditures

5 maintained by the applicant for fiscal year 1991.

6 ‘‘(2) RELEVANT POLITICAL SUBDIVISIONS.—

7 With respect to authorized services under subsection

8 (b), the Secretary may make a grant under sub9 section (a) only if each political subdivision in the

10 service area of the demonstration project involved

11 agrees to maintain expenditures of non-Federal

12 amounts for such services at a level that is not less

13 than the level of such expenditures maintained by

14 the political subdivision for fiscal year 1991.

15 ‘‘(h) RESTRICTIONS ON EXPENDITURE OF GRANT.—

16 ‘‘(1) IN GENERAL.—Except as provided in para17 graph (3), the Secretary may make a grant under

18 subsection (a) only if the applicant involved agrees

19 that the grant will not be expended—

20 ‘‘(A) to provide inpatient services, except

21 with respect to residential treatment for sub22 stance abuse provided in settings other than

23 hospitals;
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1 ‘‘(B) to make cash payments to intended

2 recipients of health services or mental health

3 services; or

4 ‘‘(C) to purchase or improve real property

5 (other than minor remodeling of existing im6 provements to real property) or to purchase

7 major medical equipment (other than mobile

8 medical units for providing ambulatory prenatal

9 services).

10 ‘‘(2) ADMINISTRATIVE EXPENSES; DATA COL11 LECTION.—The Secretary may make a grant under

12 subsection (a) only if the applicant involved agrees

13 that not more than an aggregate 10 percent of the

14 grant will be expended for administering the grant

15 and the collection and analysis of data.

16 ‘‘(3) WAIVER.—If the Secretary finds that the

17 purpose described in subsection (a) cannot otherwise

18 be carried out, the Secretary may, with respect to an

19 otherwise qualified applicant, waive the restriction

20 established in paragraph (1)(C).

21 ‘‘(i) DETERMINATION OF CAUSE OF INFANT

22 DEATHS.—The Secretary may make a grant under sub23 section (a) only if the applicant involved—
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1 ‘‘(1) agrees to provide for a determination of

2 the cause of each infant death in the service area of

3 the demonstration project involved; and

4 ‘‘(2) the applicant has made such arrangements

5 with public entities as may be necessary to carry out

6 paragraph (1).

7 ‘‘(j) ANNUAL REPORTS TO SECRETARY.—The Sec8 retary may make a grant under subsection (a) only if the

9 applicant involved agrees that, for each fiscal year for

10 which the applicant operates a demonstration project

11 under such subsection the applicant will, not later than

12 April 1 of the subsequent fiscal year, submit to the Sec13 retary a report providing the following information with

14 respect to the project:

15 ‘‘(1) The number of individuals that received

16 authorized services, and the demographic character17 istics of the population of such individuals.

18 ‘‘(2) The types of authorized services provided,

19 including the types of ambulatory prenatal services

20 provided and the trimester of the pregnancy in

21 which the services were provided.

22 ‘‘(3) The sources of payment for the authorized

23 services provided.

24 ‘‘(4) The extent to which children under age 2

25 receiving authorized services have received the ap-
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1 propriate number and variety of immunizations

2 against vaccine-preventable diseases.

3 ‘‘(5) An analysis of the causes of death deter4 mined under subsection (i).

5 ‘‘(6) The extent of progress being made toward

6 meeting the health status objectives specified in sub7 section (a)(2).

8 ‘‘(7) The extent to which, in the service area in9 volved, progress is being made toward meeting the

10 participation goals established for the State by the

11 Secretary under section 1905(r) of the Social Secu12 rity Act (relating to early periodic screening, diag13 nostic, and treatment services for children under the

14 age of 21).

15 ‘‘(k) COMMUNITY PARTICIPATION.—The Secretary

16 may make a grant under subsection (a) only if the appli17 cant involved agrees that, in preparing the proposal of the

18 applicant for the demonstration project involved, and in

19 the operation of the project, the applicant will consult with

20 the residents of the service area for the project and with

21 public and nonprofit private entities that provide author22 ized services to such residents.

23 ‘‘(l) APPLICATION FOR GRANT.—The Secretary may

24 make a grant under subsection (a) only if an application

25 for the grant is submitted to the Secretary and the appli-
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1 cation is in such form, is made in such manner, and con2 tains such agreements, assurances, and information as the

3 Secretary determines to be necessary to carry out this sub4 section.

5 ‘‘(m) REPORT TO CONGRESS.—Not later than Feb6 ruary 1, 1998, the Secretary shall submit to the Commit7 tee on Energy and Commerce of the House of Representa8 tives, and the Committee on Labor and Human Resources

9 of the Senate, a report—

10 ‘‘(1) summarizing the reports received by the

11 Secretary under subsection (j);

12 ‘‘(2) describing the extent to which demonstra13 tion projects under subsection (a) have been cost ef14 fective; and

15 ‘‘(3) describing the extent to which the Sec16 retary has, in the service areas of such projects,

17 been successful in meeting the health status objec18 tives specified in subsection (a)(2).

19 ‘‘(n) LIMITATION ON CERTAIN EXPENSES OF SEC20 RETARY.—Of the amounts appropriated under subsection

21 (o) for a fiscal year, the Secretary may not obligate more

22 than an aggregate 5 percent for the administrative costs

23 of the Secretary in carrying out this section, for the provi24 sion of technical assistance regarding demonstration
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1 projects under subsection (a), and for evaluations of such

2 projects.

3 ‘‘(o) DEFINITIONS.—For purposes of this section:

4 ‘‘(1) The term ‘authorized services’ means the

5 services specified in subsection (b).

6 ‘‘(2) The terms ‘Indian tribe’ and ‘tribal organi7 zation’ have the meaning given such terms in section

8 4(b) and section 4(c) of the Indian Self-Determina9 tion and Education Assistance Act.

10 ‘‘(3) The term ‘service area’, with respect to a

11 demonstration project under subsection (a), means

12 the geographic area specified in subsection (c).

13 ‘‘(p) AUTHORIZATION OF APPROPRIATIONS.—For the

14 purpose of carrying out this section, there are authorized

15 to be appropriated for each of the fiscal years 1994

16 through 1997 such sums as may be necessary.

17 ‘‘(q) SUNSET.—Effective October 1, 1997, this sec18 tion is repealed.’’.

19 (b) REPORT FOR FISCAL YEAR 1993.—With respect

20 to grants under section 330A of the Public Health Service

21 Act, as added by subsection (a) of this section, the Sec22 retary of Health and Human Services may make a grant

23 under such section for fiscal year 1994 only if the appli24 cant for the grant agrees to submit to the Secretary, not

25 later than April 1 of such year, a report on any federally-
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1 supported project of the applicant that is substantially

2 similar to the demonstration projects authorized in such

3 section 330A, which report provides, to the extent prac4 ticable, the information described in subsection (j) of such

5 section.

6 (c) SAVINGS PROVISION.—With respect to grants

7 under section 330A of the Public Health Service Act, as

8 added by subsection (a) of this section and in effect for

9 the fiscal years 1994 through 1997, such grants remain

10 available for obligation and expenditure in accordance with

11 the terms upon which the grants were made, notwith12 standing the repeal of such section 330A pursuant to sub13 section (q) of such section.

14 (d) USE OF GENERAL AUTHORITY UNDER PUBLIC

15 HEALTH SERVICE ACT.—With respect to the program es16 tablished in section 330A of the Public Health Service Act,

17 as added by subsection (a) of this section, section 301 of

18 the Public Health Service Act may not be construed as

19 providing to the Secretary of Health and Human Services

20 any authority to carry out, during any fiscal year in which

21 such program is in operation, any demonstration project

22 to provide any of the services specified in subsection (b)

23 of such section 330A.
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1 SEC. 5186. INCREASE IN AUTHORIZATION OF APPROPRIA2 TIONS FOR THE MATERNAL AND CHILD

3 HEALTH SERVICES BLOCK GRANT PROGRAM.

4 Section 501(a) (42 U.S.C. 701(a)) is amended by

5 striking ‘‘$686,000,000 for fiscal year 1990’’ and insert6 ing ‘‘$705,000,000 for fiscal year 1994’’.

7 SEC. 5187. MISCELLANEOUS TECHNICAL CORRECTIONS TO

8 PUBLIC HEALTH SERVICE ACT PROVISIONS.

9 (a) COMPENSATION FOR MEMBERS OF NATIONAL

10 ADVISORY COUNCIL ON NATIONAL HEALTH SERVICE

11 CORPS.—

12 (1) IN GENERAL.—Section 337(b)(2) of the

13 Public Health Service Act (42 U.S.C. 254j(b)(2)) is

14 amended—

15 (A) by inserting after ‘‘so serving’’ the fol16 lowing: ‘‘compensation at a rate fixed by the

17 Secretary (but not to exceed’’, and

18 (B) by striking ‘‘Schedule;’’ and inserting

19 ‘‘Schedule);’’.

20 (2) EFFECTIVE DATE.—The amendments made

21 by paragraph (1) shall take effect on the date of the

22 enactment of this Act.

23 (b) LIABILITY PROTECTIONS FOR INDIVIDUALS PRO24 VIDING SERVICES AT CERTAIN CLINICS.—

25 (1) CLARIFICATION OF VOLUNTARY PARTICIPA26 TION BY CERTAIN ENTITIES.—(A) Section 224(g) of
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1 the Public Health Service Act (42 U.S.C.

2 133(g)(1)), as added by section 2(a) of the Federally

3 Supported Health Centers Assistance Act of 1992, is

4 amended—

5 (i) in paragraph (4), by striking ‘‘An en6 tity’’ and inserting ‘‘Except as provided in

7 paragraph (6), an entity’’, and

8 (ii) by adding at the end the following new

9 paragraph:

10 ‘‘(6) An entity may elect not to be treated as being

11 described in paragraph (4) if the entity establishes that

12 on a continuous basis since October 24, 1992, the entity

13 has been a participant in, and partial owner of, a nonprofit

14 risk retention group which offers malpractice and other

15 liability coverage to the entity.’’.

16 (B) Section 224(k)(2) of such Act (42 U.S.C.

17 233(k)(2)), as added by section 4 of the Federally

18 Supported Health Centers Assistance Act of 1992, is

19 amended by striking ‘‘entities receiving funds’’ and

20 all that follows through ‘‘subsection (g)’’ and insert21 ing the following: ‘‘entities described in subsection

22 (g)(4) and receiving funds under each of the grant

23 programs described in such subsection’’.

24 (2) CLARIFICATION OF COVERAGE OF OFFICERS

25 AND EMPLOYEES OF CLINICS.—The first sentence of
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1 section 224(g)(1) of the Public Health Service Act

2 (42 U.S.C. 233(g)(1)) is amended by striking ‘‘offi3 cer, employee, or contractor’’ and inserting the fol4 lowing: ‘‘officer or employee of such an entity, and

5 any contractor’’.

6 (3) COVERAGE FOR SERVICES FURNISHED TO

7 INDIVIDUALS OTHER THAN PATIENTS OF CLINIC.—

8 Section 224(g) of such Act (42 U.S.C. 233(g)(1)),

9 as amended by paragraph (1), is amended—

10 (A) in the first sentence of paragraph (1),

11 by inserting after ‘‘Service’’ the following: ‘‘with

12 respect to services provided to patients of the

13 entity and (subject to paragraph (7)) to certain

14 other individuals’’; and

15 (B) by adding at the end the following new

16 paragraph:

17 ‘‘(7) For purposes of paragraph (1), an officer, em18 ployee, or contractor described in such paragraph may be

19 deemed to be an employee of the Public Health Service

20 with respect to services provided to individuals who are

21 not patients of an entity described in paragraph (4) only

22 if the Secretary determines—

23 ‘‘(A) that the provision of the services to such

24 individuals is necessary to assure the treatment of

25 patients of such an entity; or
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1 ‘‘(B) that such services are otherwise required

2 to be provided to such individuals under an employ3 ment contract (or other similar arrangement) be4 tween the individual and the entity.’’.

5 (4) DETERMINING COMPLIANCE OF ENTITY

6 WITH REQUIREMENTS FOR COVERAGE.—Section

7 224(h) of such Act (42 U.S.C. 233(h)), as added by

8 section 2(b) of the Federally Supported Health Cen9 ters Assistance Act of 1992, is amended by striking

10 ‘‘the entity—’’ and inserting the following: ‘‘the Sec11 retary, after receiving such assurances and conduct12 ing such investigation as the Secretary considers

13 necessary, finds that the entity—’’.

14 (5) EFFECTIVE DATE.—The amendments made

15 by this subsection shall take effect as if included in

16 the enactment of the Federally Supported Health

17 Centers Assistance Act of 1992.

18 (c) ELIMINATION OF DUPLICATE WAIVER AUTHOR19 ITY FOR PARTICIPANTS IN NATIONAL HEALTH SERVICE

20 CORPS.—Section 338E(c) of the Public Health Service

21 Act (42 U.S.C. 254o(c)) is amended by striking paragraph

22 (3) and redesignating paragraph (4) as paragraph (3).

23 (d) CLARIFICATION OF PROHIBITION AGAINST RE24 SALE OF DRUGS UNDER DRUG REBATE AGREEMENTS.—

25 Section 340B(a)(5)(B) of the Public Health Service Act
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1 (42 U.S.C. 256b(a)(5)(B)), as added by section 602(a) of

2 the Veterans Health Care of 1992, is amended by striking

3 ‘‘entity.’’ and inserting ‘‘covered entity.’’.

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