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Subtitle 
C—Commonwealth 
of
Northern 
Mariana 
Islands
Agreement
SEC. 5201. COMMONWEALTH OF NORTHERN MARIANA IS-
LANDS AGREEMENT.
Public Law 94–241 (90 Stat. 263), as amended, is fur-
ther amended by striking ‘‘law’’ in subsection 4(b) and in-
serting in lieu thereof the following: ‘‘law: Provided, That
for fiscal years 1994 through 1998, payments shall be lim-
ited to the amounts and for the purposes set forth in the
Agreement of the Special Representatives on Future Federal
Financial Assistance of the Northern Mariana Islands, exe-
cuted on December 17, 1992 between the special representa-
tive of the President and the special representatives of the
Governor of the Northern Mariana Islands: Provided fur-
ther, That after 1998, the amount shall continue at the an-
nual amount of $27.720 million.
Subtitle D—Mineral Receipts
SEC. 5301. AMENDMENT TO THE MINERAL LEASING ACT.
Section 35 of the Mineral Leasing Act, as amended (30
U.S.C. 191) is amended as follows:
(1) by deleting the last sentence and redesignat-
ing the remaining language as subsection (a);
(2) by amending subsection (a) by inserting the
words ‘‘and, subject to the provisions of subsection
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(b),’’ between the words ‘‘United States;’’ and ‘‘50 per
centum’’;
(3) by adding a new subsection (b) as follows:
‘‘(b)(1) In calculating the amount to be paid to States
during any fiscal year under this section or under any
other provision of law requiring payment to a State of any
revenues derived from the leasing of any onshore lands or
interest in land owned by the United States for the produc-
tion of the same types of minerals leasable under this Act
or of geothermal steam, 50 per centum of the portion of
the enacted appropriation of the Department of the Interior
and any other agency during the preceding fiscal year allo-
cable to the administration of all laws providing for the
leasing of any onshore lands or interest in land owned by
the United States for the production of the same types of
minerals leasable under this Act or of geothermal steam,
and in enforcing such laws, shall be deducted from the re-
ceipts derived under those laws in approximately equal
amounts each month (subject to paragraph (4)) prior to the
division and distribution of such receipts between the States
and the United States.
‘‘(2) The proportion of the deduction provided in para-
graph (1) allocable to each State shall be determined by di-
viding the monies disbursed to the State during the preced-
ing fiscal year derived from onshore mineral leasing re-
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ferred to in paragraph (1) in that State by the total money
disbursed to States during the preceding fiscal year from
such onshore mineral leasing in all States.
‘‘(3) In the event the deduction apportioned to any
State under this subsection exceeds 50 per centum of the
Secretary of the Interior’s estimate of the amounts attrib-
utable to onshore mineral leasing referred to in paragraph
(1) within that State during the preceding fiscal year, the
deduction from receipts received from leases in that State
shall be limited to such estimated amounts and the total
amount to be deducted from such onshore mineral leasing
receipts shall be reduced accordingly.
‘‘(4) If the amount otherwise deductible under this sub-
section in any month from the portion of receipts to be dis-
tributed to a State exceeds the amount payable to the State
during that month, any amount exceeding the amount pay-
able shall be carried forward and deducted amounts payable
to the State in subsequent months. If any amount remains
to be carried forward at the end of the fiscal year, such
amount shall not be deducted from any disbursements in
any subsequent fiscal year.
‘‘(5) All deductions to be made pursuant to this sub-
section shall be made in full during the fiscal year in which
such deductions were incurred.
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‘‘(6) All amounts deducted under this subsection from
monies otherwise payable to a State shall be credited to mis-
cellaneous receipts in the Treasury.’’.
SEC. 5302. CONFORMING AMENDMENTS.
(a) Section 6 of the Mineral Leasing Act for Acquired
Lands, as amended (30 U.S.C. 355), is amended by adding
the following words ‘‘Subject to the provisions of 30 U.S.C.
191(b),’’ at the beginning of the first sentence.
(b) Section 5(a) of the Geothermal Steam Act, as
amended (30 U.S.C. 1019), is amended by adding the words
‘‘Subject to the provisions of 30 U.S.C. 191(b),’’ at the be-
ginning of that section.
TITLE VI—COMMITTEE ON ENVI-
RONMENT 
AND 
PUBLIC
WORKS
SEC. 6001. NUCLEAR REGULATORY COMMISSION ANNUAL
CHARGES.
Section 6101(a)(3) of the Omnibus Budget Reconcili-
ation Act of 1990 (42 U.S.C. 2214(a)(3)) is amended by
striking ‘‘September 30, 1995’’ and inserting ‘‘September
30, 1998’’.
SEC. 6002. CORPS OF ENGINEERS RECREATION USER FEES.
(a) IN GENERAL.—Section 210 of the Flood Control
Act of 1968 (16 U.S.C. 460d–3) is amended—
(1) by inserting ‘‘(a)’’ before ‘‘No entrance’’;
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(2) by striking the second sentence; and
(3) by adding at the end the following new sub-
section:
‘‘(b)(1) Except as provided in paragraph (2), notwith-
standing section 4(b) of the Land and Water Conservation
Fund Act of 1965 (16 U.S.C. 460l–6a(b)), the Secretary of
the Army may charge fees for the use of developed recreation
sites and facilities, including campsites, swimming beaches,
and boat launching ramps.
‘‘(2) The Secretary may not charge fees for the use or
provision of drinking water, wayside exhibits, general pur-
pose roads, overlook sites, toilet facilities, or general visitor
information.
‘‘(3) Fees collected under this subsection shall be depos-
ited into the special account established in the Treasury of
the United States for the Army Corps of Engineers under
section 4(i) of the Land and Water Conservation Fund Act
of 1965 (16 U.S.C. 460l–6a(i)).’’.
(b) CONFORMING AMENDMENT.—Section 4(b) of the
Land and Water Conservation Fund Act of 1965 (16 U.S.C.
460l–6a(b)) is amended by striking the second sentence.
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TITLE VII—FINANCE COMMITTEE
RECONCILIATION 
PROVI-
SIONS RELATING TO MEDI-
CARE, MEDICAID, AND OTHER
PROGRAMS
SEC. 7000. AMENDMENTS TO SOCIAL SECURITY ACT; REF-
ERENCES; TABLE OF CONTENTS.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Except
as otherwise specifically provided, whenever in this title an
amendment is expressed in terms of an amendment to or
repeal of a section or other provision, the reference shall
be considered to be made to that section or other provision
of the Social Security Act.
(b) REFERENCES TO OBRA.—In this title, the terms
‘‘OBRA–1986’’, 
‘‘OBRA–1987’’, 
‘‘OBRA–1989’’, 
and
‘‘OBRA–1990’’ refer to the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99–509), the Omnibus Budget Rec-
onciliation Act of 1987 (Public Law 100–203), the Omnibus
Budget Reconciliation Act of 1989 (Public Law 101–239),
and the Omnibus Budget Reconciliation Act of 1990 (Public
Law 101–508), respectively.
(c) REFERENCES TO OMNIBUS BUDGET RECONCILI-
ATION ACT OF 1993.—Any reference in this title (or in any
amendment made by this title) to the Omnibus Budget Rec-
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onciliation Act of 1993 shall be deemed to be a reference
to this title.
(d) TABLE OF CONTENTS.—The table of contents of
this title is as follows:
Sec. 7000. Amendments to Social Security Act; references; table of contents.
Subtitle A—Medicare
PART I—PROVISIONS RELATING TO PART A
Sec. 7101. Payment updates for inpatient hospital services.
Sec. 7102. Loss of regional referral center status.
Sec. 7103. Medicare-dependent, small rural hospital payment extension.
Sec. 7104. Elimination of return on equity for proprietary skilled nursing facili-
ties.
Sec. 7105. Skilled nursing facility cost limits.
PART II—PROVISIONS RELATING TO PART B
SUBPART A—PHYSICIANS’ SERVICES
Sec. 7201. Reduction in default update for conversion factor for 1994.
Sec. 7202. Reduction in performance standard rate of increase and increase in
maximum reduction permitted in default update and classifica-
tion of primary care services as a separate category of services.
Sec. 7203. Phased-in reduction in practice expense relative value units for certain
services.
Sec. 7204. Limitation on payment for the anesthesia care team.
Sec. 7205. Separate payment for interpretation of electrocardiograms.
Sec. 7206. Payments for new physicians and practitioners.
Sec. 7207. Extra-billing limits.
SUBPART B—OUTPATIENT HOSPITAL SERVICES AND AMBULATORY SURGICAL
SERVICES
Sec. 7221. Extension of 10 percent reduction in payments for capital-related costs
of outpatient hospital services.
Sec. 7222. Extension of reduction in payments for other costs of outpatient hos-
pital services.
Sec. 7223. Reduction in payments for intraocular lenses.
SUBPART C—DURABLE MEDICAL EQUIPMENT
Sec. 7231. Revisions to payment rules for durable medical equipment.
Sec. 7232. Treatment of nebulizers and aspirators.
Sec. 7233. Payment for surgical dressings.
Sec. 7234. Payments for tens devices.
SUBPART D—PART B PREMIUM
Sec. 7251. Part B premium.
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SUBPART E—OTHER PROVISIONS
Sec. 7261. Payments for clinical diagnostic laboratory tests.
PART III—PROVISIONS RELATING TO PARTS A AND B
Sec. 7301. Payments for direct graduate medical education costs.
Sec. 7302. Revision of home health agency cost limits.
Sec. 7303. Medicare as secondary payer.
Sec. 7304. Extension of self-referral ban to additional specified services.
Sec. 7305. Reduction in payment for erythropoietin.
Subtitle B—Medicaid Program
PART I—PROGRAM SAVINGS PROVISIONS
SUBPART A—REPEAL OF MANDATE
Sec. 7401. Personal care services furnished outside the home as optional benefit.
SUBPART B—OUTPATIENT PRESCRIPTION DRUGS
Sec. 7411. Permitting prescription drug formularies under State plans.
Sec. 7412. Elimination of special exemption from prior authorization for new
drugs.
Sec. 7413. Modifications to drug rebate program.
SUBPART C—RESTRICTIONS ON DIVESTITURE OF ASSETS AND ESTATE RECOVERY
Sec. 7421. Medicaid estate recoveries.
Sec. 7422. Transfers of assets.
Sec. 7423. Treatment of certain trusts.
SUBPART D—IMPROVEMENT IN IDENTIFICATION AND COLLECTION OF THIRD
PARTY PAYMENTS
Sec. 7431. Liability of third parties to pay for care and services.
Sec. 7432. Medical child support.
Sec. 7433. Offset of payment obligations relating to medical assistance against
overpayments of State and Federal income taxes.
SUBPART E—ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE
HOSPITALS
Sec. 7441. Assuring proper payments to disproportionate share hospitals.
SUBPART F—ANTI-FRAUD AND ABUSE PROVISIONS
Sec. 7451. Application of medicare rules limiting certain physician referrals.
PART II—OTHER MEDICAID PROVISIONS
Sec. 7501. Extension of demonstration project on the effect of allowing States to
extend medicaid coverage to certain low-income families.
Subtitle C—Income Security Programs
Sec. 7601. Matching of State administrative costs.
Sec. 7602. State paternity establishment programs.
Sec. 7603. Fees for Federal administration of State supplementary payments.
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Subtitle D—Miscellaneous Provisions
PART I—TRADE PROVISIONS
Sec. 7701. Extension of authority to levy customs user fees.
Sec. 7702. Extension of, and authorization of appropriations for, trade adjust-
ment assistance program.
PART II—IMPROVED ACCESS TO CHILDHOOD IMMUNIZATIONS
Sec. 7801. Reimbursement to vaccine manufacturers.
Sec. 7802. State option to provide that certain payments under AFDC are condi-
tioned on receipt of immunizations.
PART III—DISCLOSURE PROVISIONS
Sec. 7901. Disclosure of return information for administration of certain veterans
programs.
Sec. 7902. Disclosure of return information to carry out income contingent re-
payment of student loans.
Sec. 7903. Use of return information for income verification under certain hous-
ing assistance programs.
Sec. 7904. Use of return information for health coverage clearinghouse.
PART IV—OTHER PROVISIONS
Sec. 7950. Disallowance of interest on certain overpayments of tax.
Sec. 7951. Fees for applications for alcohol labeling and formula reviews.
Sec. 7952. Use of Harbor Maintenance Trust Fund amounts for administrative
expenses.
Sec. 7953. Increase in presidential election campaign fund check-off.
Sec. 7954. Increase in public debt limit.
Subtitle A—Medicare
PART I—PROVISIONS RELATING TO PART A
SEC. 7101. PAYMENT UPDATES FOR INPATIENT HOSPITAL
SERVICES.
(a) REDUCTION.—
(1) PPS HOSPITALS.—
(A) IN GENERAL.—Section 1886(b)(3)(B)(i)
(42 U.S.C. 1395ww(b)(3)(B)(i)) is amended—
(i) in the matter preceding subclause
(I), by striking ‘‘fiscal year’’ and inserting
‘‘particular time period’’,
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(ii) in subclause (VIII), by inserting
‘‘and the 3 succeeding months’’ after ‘‘fiscal
year 1993’’,
(iii) in subclause (IX)—
(I) by striking ‘‘fiscal year’’,
(II) by inserting ‘‘minus 2.18 per-
centage points’’ after ‘‘market basket
percentage increase’’ the first place it
appears, and
(III) by striking ‘‘plus 1.5 per-
centage points’’ and inserting ‘‘minus
.68 percentage point’’,
(iv) in subclause (X)—
(I) by striking ‘‘fiscal year’’,
(II) by inserting ‘‘minus 2.27 per-
centage points’’ after ‘‘market basket
percentage increase’’, and
(III) by striking ‘‘and’’ at the
end,
(v) in subclause (XI)—
(I) by striking ‘‘for fiscal year
1996 and each subsequent fiscal year’’
and inserting ‘‘for 1996’’,
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(II) by inserting ‘‘minus 2.0 per-
centage points’’ after ‘‘market basket
percentage increase’’, and
(III) by striking the period and
inserting a comma, and
(vi) by adding at the end the following
new subclauses:
‘‘(XII) for 1997, the market basket percentage in-
crease minus 1.0 percentage point for hospitals in all
areas, and
‘‘(XIII) for 1998 and each subsequent year, the
market basket percentage increase for hospitals in all
areas.’’.
(B) ADJUSTMENT
OF
LABOR
AND
NON-
LABOR
PORTIONS
OF
STANDARDIZED
AMOUNTS.—Section 1886(d)(3)(A) (42 U.S.C.
1395ww(d)(3)(A)) is amended by adding at the
end the following new clause:
‘‘(vi) For discharges occurring on or after
January 1, 1995, the Secretary shall adjust the
ratio of the labor portion to non-labor portion of
each average standardized amount to equal such
ratio for the national average standardized
amount.’’.
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(2) 
OTHER
HOSPITALS.—Section
1886(b)(3)(B)(ii) (42 U.S.C. 1395ww(b)(3)(B)(ii)) is
amended—
(A) by striking ‘‘, (C), (D),’’
(B) by striking ‘‘and’’ at the end of
subclause (III),
(C) by striking subclause (IV) and inserting
the following new subclauses:
‘‘(IV) fiscal years 1988 through 1993 and the 3
succeeding months, is the market basket percentage
increase,
‘‘(V) 1994, is 75 percent of the difference between
the market basket percentage increase and 1.0 per-
centage point,
‘‘(VI) 1995 through 1997, is the market basket
percentage increase minus 1.0 percentage points, and
‘‘(VII) 1998 and each subsequent year, is the
market basket percentage increase.’’.
(3) SOLE COMMUNITY AND MEDICARE-DEPEND-
ENT, SMALL RURAL HOSPITALS.—
(A) IN
GENERAL.—Section 1886(b)(3)(B)
(42 U.S.C. 1395ww(b)(3)(B)) is amended by
adding at the end the following new clause:
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‘‘(iv) For purposes of subparagraphs (C) and (D), the
applicable percentage increase for discharges occurring dur-
ing—
‘‘(I) cost reporting periods beginning in fiscal
year 1986 through fiscal year 1993 and the 3 succeed-
ing months, is the increase specified in clause (ii),
‘‘(II) for 1994, is 75 percent of the difference be-
tween the market basket percentage increase and 2.0
percentage points,
‘‘(III) for 1995, is the market basket percentage
increase, minus 2.0 percentage points, and
‘‘(IV) for 1996 and each subsequent year, is the
increase described in clause (i) for such year.
For purposes of subclause (I), the annual update applied
for a cost reporting period beginning during calendar year
1993 is adjusted to reflect only the time period occurring
from the beginning of the hospital’s cost reporting period
through December 31, 1993.’’.
(B) TARGET AMOUNT ADJUSTMENT.—
(i) SOLE COMMUNITY HOSPITAL.—Sec-
tion 
1886(b)(3)(C) 
(42 
U.S.C.
1395ww(b)(3)(C)) is amended—
(I) in clause (i)(II), by striking
‘‘or’’,
(II) in clause (ii)—
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(aa) by inserting ‘‘or portion
of a cost reporting period occur-
ring before December 31, 1993,’’
before ‘‘the target amount’’,
(bb) by striking ‘‘subpara-
graph 
(B)(ii)’’ 
and 
inserting
‘‘subparagraph (B)(iv)’’, and
(cc) by striking the period at
the end and inserting a comma,
and
(dd) by adding at the end the
following new clauses:
‘‘(iii) with respect to discharges occurring in
1994, the target amount for the cost reporting period
beginning in 1993 increased by the applicable per-
centage increase under subparagraph (B)(iv), or
‘‘(iv) with respect to discharges occurring in
1995 and each subsequent year, the target amount for
the preceding year increased by the applicable per-
centage increase under subparagraph (B)(iv).’’.
(ii) 
MEDICARE-DEPENDENT, 
SMALL
RURAL
HOSPITAL.—Section 1886(b)(3)(D)
(42 U.S.C. 1395ww(b)(3)(D)) is amended—
(I) in clause (i)(II), by striking
‘‘or’’,
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(II) in clause (ii)—
(aa) by inserting ‘‘or portion
of a cost reporting period occur-
ring before December 31, 1993,’’
before ‘‘the target amount’’,
(bb) by striking ‘‘subpara-
graph 
(B)(ii)’’ 
and 
inserting
‘‘subparagraph (B)(iv)’’, and
(cc) by striking the period at
the end and inserting ‘‘, or’’ and
(dd) by adding at the end the
following new clause:
‘‘(iii) with respect to discharges occurring in
1994, the target amount for the cost reporting period
beginning in 1993 increased by the applicable per-
centage increase under subparagraph (B)(iv).’’.
(4) DELAY IN INCREASE IN DISPROPORTIONATE
SHARE PAYMENTS FOR CERTAIN URBAN HOSPITALS.—
Section 
1886(d)(5)(F)(vii)(II) 
(42 
U.S.C.
1395ww(d)(5)(F)(vii)(II)) is amended—
(A) in subdivision (b), by striking ‘‘Septem-
ber 30, 1993’’ and inserting ‘‘December 31,
1993’’, and
(B) in subdivision (c), by striking ‘‘October
1, 1993’’ and inserting ‘‘January 1, 1994’’.
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(5) 
REGIONAL
FLOOR
EXTENDED.—Section
1886(d)(1)(A) 
(42 
U.S.C. 
1395ww(d)(1)(A)) 
is
amended—
(i) in clause (ii), by striking ‘‘or’’ at
the end;
(ii) in clause (iii), by striking ‘‘Sep-
tember 30, 1993, ’’ and inserting ‘‘December
31, 1993’’; and
(iii) by adding at the end the following
new clause:
‘‘(iv) beginning on and after January 1, 1994,
is equal to the national adjusted DRG prospective
payment rate determined under paragraph (3) for
such discharges.’’.
(b) CONFORMING AMENDMENTS.—
(1) 
Section 
1886(b)(3)(B)(iii) 
(42 
U.S.C.
1395ww(b)(3)(B)(iii)) is amended—
(A) by inserting ‘‘beginning in’’ after ‘‘cost
reporting periods’’,
(B) by striking ‘‘fiscal year’’ the first place
it appears and inserting ‘‘particular time pe-
riod’’,
(C) by striking ‘‘or fiscal year’’ the first
and second place it appears, and
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(D) by striking ‘‘cost reporting period or
fiscal year’’ and inserting ‘‘period’’.
(2) The first sentence in the matter in section
1886(d)(3) (42 U.S.C. 1395ww(d)(3)) preceding sub-
paragraph (A) is amended by inserting ‘‘or calendar’’
after ‘‘fiscal’’ the first place it appears.
(3) 
Section 
1886(d)(3)(A)(ii) 
(42 
U.S.C.
1395ww(d)(3)(A)(ii)) is amended—
(A) by striking ‘‘1994,’’ and inserting
‘‘1992, in the 15-month period beginning on Oc-
tober 1, 1992, and in 1994,’’, and
(B) by striking ‘‘fiscal year’’ the second and
third place it appears and inserting ‘‘time pe-
riod’’.
(4) 
Section 
1886(d)(3)(A)(iii) 
(42 
U.S.C.
1395ww(d)(3)(A)(iii)) is amended by striking ‘‘the
fiscal year beginning on October 1, 1994’’ and insert-
ing ‘‘1995’’.
(5) 
Section 
1886(d)(3)(A)(iv) 
(42 
U.S.C.
1395ww(d)(3)(A)(iv)) is amended—
(A) by striking ‘‘fiscal year beginning on or
after October 1, 1995’’ and inserting ‘‘year be-
ginning on or after January 1, 1996’’,
(B) by striking ‘‘and within each region’’,
and
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(C) by striking ‘‘fiscal’’ each place it ap-
pears.
(6) 
Section 
1886(d)(3)(D) 
(42 
U.S.C.
1395ww(d)(3)(D)) is amended—
(A) by inserting ‘‘or calendar’’ after ‘‘fiscal’’
each place it appears, and
(B) by inserting ‘‘for each fiscal year
through 1993’’ after ‘‘and shall establish’’.
(7) 
Section 
1886(d)(3)(E) 
(42 
U.S.C.
1395ww(d)(3)(E)) is amended—
(A) in the second sentence, by striking ‘‘Oc-
tober 1, 1993’’ and inserting ‘‘January 1, 1994’’,
and
(B) in the last sentence, by inserting ‘‘or
calendar’’ after ‘‘fiscal’’ the first and last place
it appears.
(8)(A) Section 1886(d)(4)(C)(iii) (42 U.S.C.
1395ww(d)(4)(C)(iii)) is amended—
(i) by inserting ‘‘or calendar’’ after ‘‘fiscal’’
the first place it appears, and
(ii) by deleting ‘‘fiscal’’ the third place it
appears.
(B) The requirements of paragraphs (3)(E) and
(4)(C)(iii) of section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)(4)(C)(iii)) shall be applied
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on a 15-month basis for the period beginning on Octo-
ber 1, 1992, and ending on December 31, 1993.
(9) 
Section 
1886(d)(4)(E) 
is 
(42 
U.S.C.
1395ww(d)(4)(E)) is amended by striking ‘‘October 1,
1993’’ and inserting ‘‘January 1, 1994’’.
(10)(A) Section 1886(d)(5)(A)(iv) (42 U.S.C.
1395ww(d)(5)(A)(iv)) is amended by inserting ‘‘or
calendar’’ after ‘‘fiscal’’.
(B) The requirement of section 1886(d)(5)(A)(iv)
of 
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(5)(A)(iv)) shall be applied on a 15-month
basis for the period beginning on October 1, 1992,
and ending on December 31, 1993.
(11) 
Section 
1886(d)(5)(B)(i) 
(42 
U.S.C.
1395ww(d)(5)(B)(i)) is amended by striking ‘‘or, if
applicable, the amount determined under paragraph
(1)(A)(iii)’’ and inserting ‘‘or, the amount determined
under paragraphs (1)(A)(iii) or (1)(A)(iv), as appli-
cable’’.
(12) 
Section 
1886(d)(5)(E)(ii) 
(42 
U.S.C.
1395ww(d)(5)(E)(ii)) is amended by inserting ‘‘or
calendar’’ after ‘‘fiscal’’.
(13) 
Section 
1886(d)(6) 
(42 
U.S.C.
1395ww(d)(5)(6)) is amended by striking ‘‘the Sep-
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tember 1 before each fiscal year (beginning with fiscal
year 1984)’’ and inserting ‘‘December 1 each year’’.
(14) The matter in section 1886(d)(9)(A) (42
U.S.C. 1395ww(d)(9)(A)) preceding clause (i) is
amended by striking ‘‘fiscal year’’ and inserting
‘‘particular time period’’.
(15) 
Section 
1886(d)(9)(C)(i) 
(42 
U.S.C.
1395ww(d)(9)(C)(i)) is amended—
(A) by striking ‘‘fiscal year’’ the first place
it appears and inserting ‘‘time period’’, and
(B) by striking ‘‘fiscal years’’ and inserting
‘‘time periods’’.
(16) Subparagraphs (A) and (B) of section
1886(e)(3) (42 U.S.C. 1395ww(e)(3)) are each amend-
ed by striking ‘‘that fiscal year’’ and inserting ‘‘the
coming fiscal or calendar year’’.
(17) The first sentence of section 1886(e)(4)(A)
(42 U.S.C. 1395ww(e)(4)(A)) is amended by inserting
‘‘or calendar’’ after ‘‘fiscal’’ the first and last place it
appears.
(18) 
Section 
1886(e)(4)(B) 
(42 
U.S.C.
1395ww(e)(4)(B)) is amended by inserting ‘‘or cal-
endar’’ after ‘‘fiscal’’.
(19) 
Section 
1886(e)(5)(A) 
(42 
U.S.C.
1395ww(e)(5)(A)) is amended by striking ‘‘that fiscal
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year’’ and inserting ‘‘the coming fiscal or calendar
year’’.
(20) The second and third sentences of section
1886(e)(5) (42 U.S.C. 1395ww(e)(5)) are each amend-
ed by inserting ‘‘or calendar’’ after ‘‘fiscal’’ each place
it appears.
SEC. 7102. LOSS OF REGIONAL REFERRAL CENTER STATUS.
(a) CONTINUATION OF OTHER URBAN PAYMENT RATE
THROUGH CALENDAR YEAR 1994.—Effective on the date of
the enactment of this Act, any hospital that was classified
as a regional referral center under section 1886(d)(5)(C)
of the Social Security Act as of September 30, 1992, shall
continue to be paid under this subsection the standardized
amount for hospitals located in other urban areas for dis-
charges occurring before the earlier of—
(1) January 1, 1995, or
(2) the reclassification of such hospital as an
urban hospital under section 1886(d)(10)(C) of such
Act.
(b) PERMITTING HOSPITALS TO DECLINE RECLASSI-
FICATION.—If any hospital fails to qualify as a rural refer-
ral center under section 1886(d)(5)(C) of the Social Secu-
rity Act as a result of a decision by the Medicare Geo-
graphic Classification Review Board under section
1886(d)(10) of such Act to reclassify the hospital as being
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located in an urban area for fiscal year 1993 or fiscal year
1994, the Secretary of Health and Human Services shall—
(1) notify such hospital of such failure to qual-
ify,
(2) provide an opportunity for such hospital to
decline such reclassification, and
(3) if the hospital declines such reclassification,
administer the Social Security Act (other than section
1886(d)(8)(D)) for such fiscal year as if the decision
by the Review Board had not occurred.
(c) REQUIRING LUMP-SUM RETROACTIVE PAYMENT
FOR HOSPITALS LOSING CLASSIFICATION.—
(1) IN GENERAL.—In the case of any regional re-
ferral center described in subsection (a), the Secretary
of Health and Human Services shall make a lump-
sum payment to the center equal to the difference be-
tween—
(A) the aggregate payment made to the cen-
ter under section 1886 of the Social Security Act
(excluding outlier payments under subsection
(d)(5)(A) of such section) during the period of
applicability described in paragraph (2), and
(B) the aggregate payment that would have
been made to the center under such section if,
during the period of applicability, the center had
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been paid as if subsection (a) of this section had
been in effect.
(2) PERIOD OF APPLICABILITY.—In paragraph
(1), the ‘‘period of applicability’’ is the period that
begins on October 1, 1992, and ends on the date of
the enactment of this Act.
SEC. 7103. MEDICARE-DEPENDENT, SMALL RURAL HOS-
PITAL PAYMENT EXTENSION.
(a) EXTENSION OF ADDITIONAL PAYMENTS.—
(1) IN
GENERAL.—Section 1886(d)(5)(G) (42
U.S.C. 1395ww(d)(5)(G)) is amended—
(A) in clause (i)—
(i) by inserting ‘‘(or portion thereof)’’
after ‘‘cost reporting period’’ in the matter
preceding subclause (I), and
(ii) by striking ‘‘March 31, 1993,’’ and
all that follows and inserting: ‘‘January 1,
1995, in the case of a subsection (d) hos-
pital which is a medicare-dependent, small
rural hospital, payment under paragraph
(1)(A) shall be equal to the sum of the
amount determined under clause (ii) and
the amount determined under clause (iii) or
(iv) of paragraph (1)(A).’’;
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such section) during the period of applicability
described in paragraph (2), and
(B) the aggregate payment that would have
been made to the hospital under such section if,
during the period of applicability, section
1886(d)(5)(G) of such Act had been applied as
if—
(i) the reference in clause (i) to ‘‘March
31, 1993,’’ had been deemed a reference to
‘‘January 1, 1995,’’; and
(ii) the amendments made by sub-
section (a) had been in effect.
(2) PERIOD OF APPLICABILITY.—In paragraph
(1), the ‘‘period of applicability’’ is, with respect to
a hospital, the period that begins on the first day of
the hospital’s first 12-month cost reporting period
that begins after April 1, 1992, and ends on the date
of the enactment of this Act.
SEC. 7104. ELIMINATION OF RETURN ON EQUITY FOR PRO-
PRIETARY SKILLED NURSING FACILITIES.
(a) REPEAL OF REQUIREMENT FOR RETURN ON EQ-
UITY.—(1) 
Section 
1861(v)(1)(B) 
(42 
U.S.C.
1395x(v)(1)(B)) is amended to read as follows:
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‘‘(B) In the case of extended care services, the regula-
tions under subparagraph (A) shall not include provision
for specific recognition of a return on equity capital.’’.
(2) Section 1878(f)(2) (42 U.S.C. 1395oo(f)(2)) is
amended by striking ‘‘the rate of return on equity capital
established by regulation pursuant to section 1861(v)(1)(B)
and in effect at the time’’ and inserting ‘‘the average of
the rates of interest on obligations issued for purchase by
the Federal Hospital Insurance Trust Fund for each of the
months any part of which is included in the cost reporting
period in which’’.
(3) Section 1881(b)(2)(C) (42 U.S.C. 1395rr(b)(2)(C))
is amended by striking all that follows ‘‘capital’’ up to the
period.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) apply to portions of cost reporting periods occur-
ring on or after October 1, 1993.
SEC. 7105. SKILLED NURSING FACILITY COST LIMITS.
(a) SKILLED NURSING FACILITY COST LIMITS.—
(1) IN GENERAL.—Section 1888(a) (42 U.S.C.
1395yy(a)) is amended by striking ‘‘112 percent of
the mean’’ and inserting ‘‘110 percent of the median’’
each place it appears.
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(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to cost reporting peri-
ods beginning on or after October 1, 1993.
(b) SKILLED NURSING FACILITY WAGE INDEX.—Not
later than 1 year after the date of the enactment of this
Act, the Secretary of Health and Human Services shall
begin to collect data on employee compensation and paid
hours of employment in skilled nursing facilities for the
purpose of constructing a skilled nursing facility wage
index adjustment to the routine service cost limits required
under section 1888(a) of the Social Security Act.
(c) PROPAC REPORT.—The Prospective Payment As-
sessment Commission shall, by March 31, 1994, study and
report to the Congress on the impact of applying the routine
per diem cost limits for skilled nursing facilities on a re-
gional basis.
PART II—PROVISIONS RELATING TO PART B
Subpart A—Physicians’ Services
SEC. 7201. REDUCTION IN DEFAULT UPDATE FOR CONVER-
SION FACTOR FOR 1994.
Section 1848(d)(3)(A) (42 U.S.C. 1395w–4(d)(3)(A))
is amended—
(1) in clause (i), by striking ‘‘clause (iii)’’ and
inserting ‘‘clauses (iii) and (iv)’’, and
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(2) by adding at the end the following new
clause:
‘‘(iv) ADJUSTMENT IN PERCENTAGE IN-
CREASE FOR 1994.—In applying clause (i)
for services (other than primary care serv-
ices) furnished in 1994, the percentage in-
crease in the appropriate update index shall
be reduced by—
‘‘(I) 8 percentage points for sur-
gical services (as defined for purposes
of subsection (j)(1)), and
‘‘(II) 4.4 percentage points for
other services.’’.
SEC. 7202. REDUCTION IN PERFORMANCE STANDARD RATE
OF INCREASE AND INCREASE IN MAXIMUM
REDUCTION PERMITTED IN DEFAULT UPDATE
AND CLASSIFICATION OF PRIMARY CARE
SERVICES AS A SEPARATE CATEGORY OF
SERVICES.
(a) REDUCTION IN PERFORMANCE STANDARD FAC-
TOR.—Section 1848(f)(2)(B) (42 U.S.C. 1395w–4(f)(2)(B))
is amended to read as follows:
‘‘(B) PERFORMANCE STANDARD FACTOR.—
For purposes of subparagraph (A)—
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‘‘(i) IN GENERAL.—Except as provided
in clause (ii), the performance standard fac-
tor—
‘‘(I) for 1993 is 2 percentage
points,
‘‘(II) for 1994 is 31⁄2 percentage
points, and
‘‘(III) for each succeeding year is
4 percentage points.
‘‘(ii) PRIMARY
CARE
SERVICES.—The
performance standard factor for primary
care 
services 
(as 
defined 
in 
section
1842(i)(4)) is 0 percentage points.’’.
(b) INCREASE IN MAXIMUM REDUCTION PERMITTED IN
DEFAULT UPDATE.—Section 1848(d)(3)(B)(ii) (42 U.S.C.
1395w–4(d)(3)(B)(ii)) is amended—
(1) in subclause (II), by striking ‘‘or 1995’’, and
(2) in subclause (III), by striking ‘‘3’’ and in-
serting ‘‘5’’.
(c) CLASSIFICATION OF PRIMARY CARE SERVICES AS
SEPARATE CATEGORY OF SERVICES.—
(1) IN GENERAL.—Section 1848(j)(1) (42 U.S.C.
1395w–4(j)(1)) is amended by inserting ‘‘, primary
care services (as defined in section 1842(i)(4)),’’ after
‘‘Secretary)’’.
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(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply—
(A) to volume performance standard rates of
increase established under section 1848(f) of the
Social Security Act for fiscal years beginning on
or after October 1, 1993, and
(B) to updates in the conversion factors for
physicians’ services established under section
1848(d) of such Act for physicians’ services to be
furnished in calendar years beginning after
1995.
SEC. 7203. PHASED-IN REDUCTION IN PRACTICE EXPENSE
RELATIVE VALUE UNITS FOR CERTAIN SERV-
ICES.
(a) IN GENERAL.—Section 1848(c)(2) (42 U.S.C.
1395w–4(c)(2)) is amended by adding at the end the follow-
ing new subparagraph:
‘‘(E) REDUCTION
IN
PRACTICE
EXPENSE
RELATIVE
VALUE
UNITS
FOR
CERTAIN
SERV-
ICES.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii), the Secretary shall reduce the practice
expense relative value units applied to serv-
ices described in clause (iii) furnished in—
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‘‘(I) 1994, by 25 percent of the
number by which the number of prac-
tice expense relative value units (deter-
mined for 1994 without regard to this
subparagraph) exceeds the number of
work relative value units determined
for 1994,
‘‘(II) 1995, by an additional 25
percent of such excess, and
‘‘(III) 1996, by an additional 25
percent of such excess.
‘‘(ii) FLOOR
ON
REDUCTIONS.—The
practice expense relative value units for a
physician’s service shall not be reduced
under this subparagraph to a number less
than 110 percent of the number of work rel-
ative value units.
‘‘(iii) SERVICES COVERED.—For pur-
poses of clause (i), the services described in
this clause are physicians’ services that are
not described in clause (iv) and for which—
‘‘(I) there are work relative value
units, and
‘‘(II) the number of practice ex-
pense relative value units (determined
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for 1994) exceeds 110 percent of the
number of work relative value units
(determined for such year).
‘‘(iv) EXCLUDED SERVICES.—For pur-
poses of clause (iii), the services described in
this clause are services which the Secretary
determines at least 75 percent of which are
provided under this title in an office set-
ting.’’.
(b) DEVELOPMENT OF RESOURCE-BASED METHODOL-
OGY FOR PRACTICE EXPENSES.—
(1) The Secretary of Health and Human Serv-
ices shall develop a methodology for implementing in
1997 a resource-based system for determining practice
expense relative value units for each physician’s serv-
ice.
(2) The Secretary shall transmit a report by
June 30, 1996, on the methodology developed under
paragraph (1) to the Committee on Ways and Means
and the Committee on Energy and Commerce of the
House of Representatives and the Committee on Fi-
nance of the Senate. The report shall include a pres-
entation of data utilized in developing the methodol-
ogy and an explanation of the methodology.
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SEC. 7204. LIMITATION ON PAYMENT FOR THE ANESTHESIA
CARE TEAM.
(a) LIMIT ON PAYMENT TO A PHYSICIAN FOR MEDICAL
DIRECTION.—
(1) IN GENERAL.—Section 1848(a) (42 U.S.C.
1395w–4(a)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(5) SPECIAL RULE FOR MEDICAL DIRECTION.—
‘‘(A) IN GENERAL.—With respect to physi-
cians’ services furnished on or after January 1,
1994, and consisting of medical direction of 2, 3,
or 4 concurrent anesthesia cases, the fee schedule
amount to be applied shall not exceed one-half of
the amount described in subparagraph (B).
‘‘(B) AMOUNT.—The amount described in
this subparagraph, for a physician’s medical di-
rection of the performance of anesthesia services,
is the following percentage of the fee schedule
amount otherwise applicable under this section if
the anesthesia services were personally performed
by the physician alone:
‘‘(i) For services furnished during
1994, 120 percent.
‘‘(ii) For services furnished during
1995, 115 percent.
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‘‘(iii) For services furnished during
1996, 110 percent.
‘‘(iv) For services furnished during
1997, 105 percent.
‘‘(v) For services furnished after 1997,
100 percent.’’.
(2) ELIMINATION OF REDUCTION FOR MEDICAL
DIRECTION
OF
MULTIPLE
NURSE
ANESTHETISTS.—
Section 1842(b) (42 U.S.C. 1395u(b)) is amended by
striking paragraph (13).
(b) PAYMENT TO A CERTIFIED REGISTERED NURSE
ANESTHETIST
FOR MEDICALLY DIRECTED SERVICES.—
Subparagraph (B) of section 1833(l)(4) (42 U.S.C.
1395l(l)(4)) is amended—
(1) in clause (i), by inserting ‘‘and before Janu-
ary 1, 1994,’’ after ‘‘1991,’’;
(2) in clause (ii)—
(A) by adding ‘‘and’’ at the end of subclause
(II),
(B) by striking the comma at the end of
subclause (III) and inserting a period, and
(C) by striking subclauses (IV) through
(VII); and
(3) by adding at the end the following new
clause:
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‘‘(iii) In the case of services of a certified registered
nurse anesthetist who is medically directed or medically su-
pervised by a physician which are furnished on or after
January 1, 1994, the fee schedule amount shall be 50 per-
cent of the amount described in section 1848(a)(5)(B) with
respect to the physician.’’.
SEC. 7205. SEPARATE PAYMENT FOR INTERPRETATION OF
ELECTROCARDIOGRAMS.
(a) IN GENERAL.—Paragraph (3) of section 1848(b)
(42 U.S.C. 1395w–4(b)) is amended to read as follows:
‘‘(3) TREATMENT OF INTERPRETATION OF ELEC-
TROCARDIOGRAMS.—The Secretary—
‘‘(A) shall make separate payment under
this section for the interpretation of electro-
cardiograms performed or ordered to be per-
formed as part of or in conjunction with a visit
to or a consultation with a physician, and
‘‘(B) shall adjust the relative values estab-
lished for visits and consultations under sub-
section (c) so as not to include relative value
units for interpretations of electrocardiograms in
the relative value for visits and consultations.’’.
(b) 
ASSURING
BUDGET
NEUTRALITY.—Section
1848(c)(2) (42 U.S.C. 1395w–4(c)(2)), as amended by sec-
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tion 7203(a), is further amended by adding at the end the
following new subparagraph:
‘‘(F) 
BUDGET
NEUTRALITY
ADJUST-
MENTS.—The Secretary—
‘‘(i) shall reduce the relative values for
all services (other than anesthesia services)
established under this paragraph (and, in
the case of anesthesia services, the conver-
sion factor established by the Secretary for
such services) by such percentage as the Sec-
retary determines to be necessary so that,
beginning in 1996, the amendment made by
section 7205(a) of the Omnibus Budget Rec-
onciliation Act of 1993 would not result in
expenditures under this section that exceed
the amount of such expenditures that would
have been made if such amendment had not
been made, and
‘‘(ii) shall reduce the amounts deter-
mined under subsection (a)(2)(B)(ii)(I) by
such percentage as the Secretary determines
to be required to assure that, taking into ac-
count the reductions made under clause (i),
the amendment made by section 7205(a) of
the Omnibus Budget Reconciliation Act of
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1993 would not result in expenditures
under this section in 1994 that exceed the
amount of such expenditures that would
have been made if such amendment had not
been made.’’.
(c) CONFORMING AMENDMENTS.—Section 1848 (42
U.S.C. 1395w–4) is amended—
(1) in subsection (a)(2)(B)(ii)(I), by inserting
‘‘and as adjusted under subsection (c)(2)(F)(ii)’’ after
‘‘for 1994’’;
(2) in subsection (c)(2)(A)(i), by adding at the
end the following: ‘‘Such relative values are subject to
adjustment under subparagraph (F)(i).’’; and
(3) in subsection (i)(1)(B), by adding at the end
‘‘including adjustments under subsection (c)(2)(F),’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to services furnished on or after January
1, 1994.
SEC. 7206. PAYMENTS FOR NEW PHYSICIANS AND PRACTI-
TIONERS.
(a) EQUAL TREATMENT
OF NEW PHYSICIANS
AND
PRACTITIONERS.—(1) Section 1848(a) (42 U.S.C. 1395w–
4(a)), as amended by section 7204(a), is further amended
by striking paragraph (4) and by redesignating paragraph
(5) as paragraph (4).
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(2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is
amended by striking subparagraph (F).
(b) BUDGET NEUTRALITY ADJUSTMENT.—Notwith-
standing any other provision of law, the Secretary of
Health and Human Services shall reduce the following val-
ues and amounts for 1994 (to be applied for that year and
subsequent years) by such uniform percentage as the Sec-
retary determines to be required to assure that the amend-
ments made by subsection (a) will not result in expendi-
tures under part B of title XVIII of the Social Security
Act in 1994 that exceed the amount of such expenditures
that would have been made if such amendments had not
been made:
(1) The relative values established under section
1848(c) of such Act for services (other than anesthesia
services) and, in the case of anesthesia services, the
conversion factor established under section 1848 of
such Act for such services.
(2) The amounts determined under section
1848(a)(2)(B)(ii)(I) of such Act.
(3) The prevailing charges or fee schedule
amounts to be applied under such part for services of
a health care practitioner (as defined in section
1842(b)(4)(F)(ii)(I) of such Act, as in effect before the
date of the enactment of this Act).
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(c) CONFORMING AMENDMENTS.—Section 1848 (42
U.S.C. 1395w–4), as amended by section 7205(c), is amend-
ed—
(1) in subsection (a)(2)(B)(ii)(I), by inserting
‘‘and under section 7206(b) of the Omnibus Budget
Reconciliation 
Act 
of 
1993’’ 
after 
‘‘subsection
(c)(2)(F)(ii)’’;
(2) in subsection (c)(2)(A)(i), by inserting ‘‘and
section 7206(b) of the Omnibus Budget Reconciliation
Act of 1993’’ after ‘‘under subparagraph (F)(i)’’; and
(3) in subsection (i)(1)(B), by inserting ‘‘and
section 7206(b) of the Omnibus Budget Reconciliation
Act of 1993’’ after ‘‘under subsection (c)(2)(F)’’.
(d) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to services furnished on or after
January 1, 1994.
SEC. 7207. EXTRA-BILLING LIMITS.
(a) ENFORCEMENT AND UNIFORM APPLICATION.—
(1) ENFORCEMENT.—Paragraph (1) of section
1848(g) (42 U.S.C. 1395w–4(g)) is amended to read
as follows:
‘‘(1) LIMITATION ON ACTUAL CHARGES.—
‘‘(A) IN
GENERAL.—In the case of a
nonparticipating physician or nonparticipating
supplier or other person (as defined in section
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1842(i)(2)) who does not accept payment on an
assignment-related basis for a physician’s service
furnished with respect to an individual enrolled
under this part, the following rules apply:
‘‘(i) 
APPLICATION
OF
LIMITING
CHARGE.—No person may bill or collect an
actual charge for the service in excess of the
limiting charge described in paragraph (2)
for such service.
‘‘(ii) 
NO
LIABILITY
FOR
EXCESS
CHARGES.—No person is liable for payment
of any amounts billed for the service in ex-
cess of such limiting charge.
‘‘(iii) 
CORRECTION
OF
EXCESS
CHARGES.—If such a physician, supplier,
or other person bills, but does not collect, an
actual charge for a service in violation of
clause (i), the physician, supplier, or other
person shall reduce on a timely basis the ac-
tual charge billed for the service to an
amount not to exceed the limiting charge for
the service.
‘‘(iv) REFUND
OF
EXCESS
COLLEC-
TIONS.—If such a physician, supplier, or
other person collects an actual charge for a
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service in violation of clause (i), the physi-
cian, supplier, or other person shall provide
on a timely basis a refund to the individual
charged in the amount by which the amount
collected exceeded the limiting charge for the
service. The amount of such a refund shall
be reduced to the extent the individual has
an outstanding balance owed to the physi-
cian.
‘‘(B) SANCTIONS.—If a physician, supplier,
or other person—
‘‘(i) knowingly and willfully bills or
collects for services in violation of subpara-
graph (A)(i) on a repeated basis, or
‘‘(ii) fails to comply with clause (iii)
or (iv) of subparagraph (A) on a timely
basis,
the Secretary may apply sanctions against the
physician, supplier, or other person in accord-
ance with paragraph (2) of section 1842(j). In
applying this subparagraph, paragraph (4) of
such section applies in the same manner as such
paragraph applies to such section and any ref-
erence in such section to a physician is deemed
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means a supplier or other person (excluding
a provider of services) that is not a partici-
pating physician or supplier (as defined in
subsection (h)(1))’’.
(3) ADDITIONAL
CONFORMING
AMENDMENTS.—
Section 1848 (42 U.S.C. 1395w–4) is amended—
(A) in subsection (a)(3)—
(i) by inserting ‘‘AND
SUPPLIERS’’
after ‘‘PHYSICIANS’’ in the heading,
(ii) 
by 
inserting 
‘‘or 
a
nonparticipating supplier or other person’’
after ‘‘nonparticipating physician’’, and
(iii) by adding at the end the follow-
ing: ‘‘In the case of physicians’ services (in-
cluding services which the Secretary ex-
cludes pursuant to subsection (j)(3)) of a
nonparticipating physician, supplier, or
other person for which payment is made
under this part on a basis other than the fee
schedule amount, the payment shall be
based on 95 percent of the payment basis
for such services furnished by a participat-
ing physician, supplier, or other person.’’;
(B) in subsection (g)(1)(A), as amended by
subsection (a), in the matter before clause (i), by
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inserting ‘‘(including services which the Sec-
retary excludes pursuant to subsection (j)(3))’’
after ‘‘a physician’s service’’;
(C) in subsection (g)(2)(D), by inserting
‘‘(or, if payment under this part is made on a
basis other than the fee schedule under this sec-
tion, 95 percent of the other payment basis)’’
after ‘‘subsection (a)’’;
(D) in subsection (g)(3)(B)—
(i) by inserting after the first sentence
the following: ‘‘No person is liable for pay-
ment of any amounts billed for such a serv-
ice in violation of the preceding sentence.’’,
and
(ii) in the last sentence, by striking
‘‘previous sentence’’ and inserting ‘‘first
sentence’’;
(E) in subsection (h)—
(i) by inserting ‘‘or nonparticipating
supplier or other person furnishing physi-
cians’ services (as defined in section
1848(j)(3))’’ after ‘‘physician’’ the first
place it appears,
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(ii) by inserting ‘‘, supplier, or other
person’’ after ‘‘physician’’ the second place
it appears, and
(iii) by inserting ‘‘, suppliers, and
other persons’’ after ‘‘physicians’’ the second
place it appears; and
(F) in subsection (j)(3), by inserting ‘‘, ex-
cept for purposes of subsections (a)(3), (g), and
(h),’’ after ‘‘tests and’’.
(b) CLARIFICATION
OF
MANDATORY
ASSIGNMENT
RULES FOR CERTAIN PRACTITIONERS.—
(1) IN GENERAL.—Section 1842(b) (42 U.S.C.
1395u(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(19)(A) Payment for any service furnished by a prac-
titioner described in subparagraph (C) and for which pay-
ment may be made under this part on a reasonable charge
or fee schedule basis may only be made under this part on
an assignment-related basis.
‘‘(B) A practitioner described in subparagraph (C) or
other person may not bill (or collect any amount from) the
individual or another person for any service described in
subparagraph (A), except for deductible and coinsurance
amounts applicable under this part. No person is liable for
payment of any amounts billed for such a service in viola-
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tion of the previous sentence. If a practitioner or other per-
son knowingly and willfully bills (or collects an amount)
for such a service in violation of such sentence, the Sec-
retary may apply sanctions against the practitioner or
other person in the same manner as the Secretary may
apply sanctions against a physician in accordance with
subsection (j)(2) in the same manner as such section applies
with respect to a physician. Paragraph (4) of subsection
(j) shall apply in this subparagraph in the same manner
as such paragraph applies to such section.
‘‘(C) A practitioner described in this subparagraph is
any of the following:
‘‘(i) A physician assistant, nurse practitioner, or
clinical nurse specialist (as defined in section
1861(aa)(5)).
‘‘(ii) A certified registered nurse anesthetist (as
defined in section 1861(bb)(2)).
‘‘(iii) A certified nurse-midwife (as defined in
section 1861(gg)(2)).
‘‘(iv) A clinical social worker (as defined in sec-
tion 1861(hh)(1)).
‘‘(v) A clinical psychologist (as defined by the
Secretary for purposes of section 1861(ii)).
‘‘(D) For purposes of this paragraph, a service fur-
nished by a practitioner described in subparagraph (C) in-
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cludes any services and supplies furnished as incident to
the service as would otherwise be covered under this part
if furnished by a physician or as incident to a physician’s
service.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 1833 (42 U.S.C. 1395l) is
amended—
(i) in subsection (l)(5), by striking sub-
paragraph (B) and redesignating subpara-
graph (C) as subparagraph (B);
(ii) by striking subsection (p); and
(iii) in subsection (r), by striking
paragraph (3) and redesignating paragraph
(4) as paragraph (3).
(B) 
Section 
1842(b)(12) 
(42 
U.S.C.
1395u(b)(12)) is amended by striking subpara-
graph (C).
(c) INFORMATION ON EXTRA-BILLING LIMITS.—
(1) PART OF EXPLANATION OF MEDICARE BENE-
FITS.—Section 1842(h)(7) (42 U.S.C. 1395u(h)(7)) is
amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B),
(B) in subparagraph (C), by striking ‘‘shall
include’’,
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(C) in subparagraph (C), by striking the
period at the end and inserting ‘‘, and’’, and
(D) by adding at the end the following new
subparagraph:
‘‘(D) in the case of services for which the billed
amount exceeds the limiting charge imposed under
section 1848(g), information regarding such applica-
ble limiting charge (including information concerning
the 
right 
to 
a 
refund 
under 
section
1848(g)(1)(A)(iv)).’’.
(2) DETERMINATIONS BY CARRIERS.—Subpara-
graph 
(G) 
of 
section 
1842(b)(3) 
(42 
U.S.C.
1395u(b)(3)) is amended to read as follows:
‘‘(G) will, for a service that is furnished with re-
spect to an individual enrolled under this part, that
is not paid on an assignment-related basis, and that
is subject to a limiting charge under section
1848(g)—
‘‘(i) determine, prior to making payment,
whether the amount billed for such service ex-
ceeds the limiting charge applicable under sec-
tion 1848(g)(2);
‘‘(ii) notify the physician, supplier, or other
person periodically (but not less often than once
every 30 days) of determinations that amounts
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billed exceeded such applicable limiting charges;
and
‘‘(iii) provide for prompt response to in-
quiries of physicians, suppliers, and other per-
sons concerning the accuracy of such limiting
charges for their services;’’.
(d) REPORT ON CHARGES IN EXCESS OF LIMITING
CHARGE.—Section 1848(g)(6)(B) (42 U.S.C. 1395w–
4(g)(6)(B)) is amended by inserting ‘‘the extent to which
actual charges exceed limiting charges, the number and
types of services involved, and the average amount of excess
charges and’’ after ‘‘report to the Congress’’.
(e) MISCELLANEOUS AND TECHNICAL AMENDMENTS.—
Section 1833 (42 U.S.C. 1395l) is amended—
(1) in subsection (a)(1)—
(A) by striking ‘‘and’’ before ‘‘(N)’’;
(B) with respect to the matter inserted by
section 4155(b)(2)(B) of OBRA–1990—
(i) by striking ‘‘(M)’’ and inserting ‘‘,
and (O)’’; and
(ii) by transferring and inserting it
(as amended) immediately before the semi-
colon at the end;
(C) by striking ‘‘and’’ before ‘‘(O)’’, and
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(D) by inserting before the semicolon at the
end the following: ‘‘, and (P) with respect to
services described in clauses (i), (ii) and (iv) of
section 1861(s)(2)(K), the amounts paid are sub-
ject to the provisions of section 1842(b)(12)’’;
and
(2) in subsection (h)(5)(D)—
(A) by striking ‘‘paragraphs (2) and (3)’’
and by inserting ‘‘paragraph (2)’’, and
(B) by adding at the end the following:
‘‘Paragraph (4) of such section shall apply in
this subparagraph in the same manner as such
paragraph applies to such section.’’.
(f) EFFECTIVE DATES.—
(1) ENFORCEMENT AND UNIFORM APPLICATION;
MISCELLANEOUS AND TECHNICAL AMENDMENTS.—The
amendments made by subsections (a) and (e) shall
apply to services furnished on or after the date of the
enactment of this Act; except that the amendments
made by subsection (a) shall not apply to services of
a nonparticipating supplier or other person furnished
before January 1, 1994.
(2) PRACTITIONERS.—The amendments made by
subsection (b) shall apply to services furnished on or
after January 1, 1994.
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(3) EOMBS.—The amendments made by sub-
section (c)(1) shall apply to explanations of benefits
provided on or after January 1, 1994.
(4) CARRIER
DETERMINATIONS.—The amend-
ments made by subsection (c)(2) shall apply to con-
tracts as of January 1, 1994.
(5) REPORT.—The amendment made by sub-
section (d) shall apply to reports for years beginning
after 1993.
Subpart B—Outpatient Hospital Services and
Ambulatory Surgical Services
SEC. 7221. EXTENSION OF 10 PERCENT REDUCTION IN PAY-
MENTS FOR CAPITAL-RELATED COSTS OF
OUTPATIENT HOSPITAL SERVICES.
Section 
1861(v)(1)(S)(ii)(I) 
(42 
U.S.C.
1395x(v)(1)(S)(ii)(I)) is amended by striking ‘‘fiscal year
1992, 1993, 1994, or 1995’’ and inserting ‘‘fiscal years 1992
through 1998’’.
SEC. 7222. EXTENSION OF REDUCTION IN PAYMENTS FOR
OTHER COSTS OF OUTPATIENT HOSPITAL
SERVICES.
Section 
1861(v)(1)(S)(ii)(II) 
(42 
U.S.C.
1395x(v)(1)(S)(ii)(II)) is amended by striking ‘‘, 1992,
1993, 1994, or 1995’’ and inserting ‘‘through 1998’’.
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SEC. 7223. REDUCTION IN PAYMENTS FOR INTRAOCULAR
LENSES.
(a) PAYMENT
FOR
INTRAOCULAR
LENS.—Section
4151(c)(3) of OBRA–1990 is amended—
(1) by striking ‘‘center’’ and all that follows and
inserting ‘‘center—
‘‘(A) on or after the date of the enactment
of this Act and on or before December 31, 1993,
shall be equal to $200; and
‘‘(B) on or after January 1, 1994, and on
or before December 31, 1998, shall be equal to
$150.’’; and
(2) in the heading, by striking ‘‘2-YEAR FREEZE
IN ALLOWANCE’’ and inserting ‘‘ALLOWANCE’’.
(b) CONFORMING AMENDMENTS.—
(1) PAYMENT
AMOUNTS
FOR
SERVICES
FUR-
NISHED IN AMBULATORY SURGICAL CENTERS.—(A)(i)
Section 1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i))
is amended by striking the comma at the end and in-
serting the following: ‘‘, as determined in accordance
with a survey (based upon a representative sample of
procedures and facilities) taken not later than Janu-
ary 1, 1995, and every 5 years thereafter, of the ac-
tual audited costs incurred by such centers in provid-
ing such services,’’.
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(ii) The second sentence of section 1833(i)(1) (42
U.S.C. 1395l(i)(1)) is amended by striking the period
and inserting the following: ‘‘, in consultation with
appropriate trade and professional organizations.’’.
(B) Section 4151(c)(3) of OBRA–1990, as
amended in subsection (a), is amended by striking
‘‘for the insertion of an intraocular lens’’ and insert-
ing ‘‘for an intraocular lens inserted’’.
(2) ADJUSTMENTS TO PAYMENT AMOUNTS FOR
NEW TECHNOLOGY INTRAOCULAR LENSES.—(A) Not-
withstanding section 4151(c)(3) of OBRA–1990 (as
amended by subsection (a)), the Secretary of Health
and Human Services (in this paragraph referred to
as the ‘‘Secretary’’) shall, not later than 1 year after
the date of the enactment of this Act, develop and im-
plement a process under which interested parties may
request review by the Secretary of the appropriateness
of the reimbursement amount provided under section
1833(i)(2)(A)(iii) of the Social Security Act with re-
spect to a class of new technology intraocular lenses.
For purposes of the preceding sentence, an intraocular
lens may not be treated as a new technology intra-
ocular lens unless it has been approved by the Food
and Drug Administration.
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(B) In determining whether to provide an ad-
justment of payment with respect to a particular lens
under subparagraph (A), the Secretary shall take into
account whether use of the lens is likely to result in
reduced risk of intraoperative or postoperative com-
plication or trauma, accelerated postoperative recov-
ery, reduced induced astigmatism, improved post-
operative visual acuity, more stable postoperative vi-
sion, or other comparable clinical advantages.
(C) The Secretary shall publish notice in the
Federal Register from time to time (but no less often
than once each year) of a list of the requests that the
Secretary has received for review under this sub-
section, and shall provide for a 30-day comment pe-
riod on the lenses that are the subjects of the requests
contained in such notice. The Secretary shall publish
a notice of the determinations with respect to intra-
ocular lenses listed in the notice within 90 days after
the close of the comment period.
(D) Any adjustment of a payment amount (or
payment limit) made under this paragraph shall be-
come effective not later than 30 days after the date on
which the notice with respect to the adjustment is
published under subparagraph (C).
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(3) BLEND AMOUNTS FOR AMBULATORY SUR-
GICAL CENTER PAYMENTS.—
(A) IN GENERAL.—Subclauses (I) and (II)
of 
section 
1833(i)(3)(B)(ii) 
(42 
U.S.C.
1395l(i)(3)(B)(ii)) are each amended—
(i) by striking ‘‘for reporting’’ and in-
serting ‘‘for portions of cost reporting’’; and
(ii) by striking ‘‘and on or before’’ and
inserting ‘‘and ending on or before’’.
(B) EFFECTIVE
DATE.—The amendments
made by subparagraph (A) shall take effect as if
included in the enactment of OBRA–1990.
Subpart C—Durable Medical Equipment
SEC. 7231. REVISIONS TO PAYMENT RULES FOR DURABLE
MEDICAL EQUIPMENT.
(a) BASING NATIONAL PAYMENT LIMITS ON MEDIAN
OF LOCAL PAYMENT AMOUNTS.—
(1) INEXPENSIVE
AND
ROUTINELY
PURCHASED
ITEMS; ITEMS REQUIRING FREQUENT AND SUBSTAN-
TIAL SERVICING.—(A) Paragraphs (2)(C)(i)(II) and
(3)(C)(i)(II) of section 1834(a) (42 U.S.C. 1395m(a))
are each amended—
(i) by striking ‘‘1992’’ the first place it ap-
pears and inserting ‘‘1992, 1993, and 1994’’;
and
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(ii) by striking ‘‘1992’’ the second place it
appears and inserting ‘‘the year’’.
(B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of sec-
tion 1834(a) (42 U.S.C. 1395m(a)) are each amend-
ed—
(i) by striking ‘‘and’’ at the end of
subclause (I);
(ii) by redesignating subclause (II) as (IV);
and
(iii) by inserting after subclause (I) the fol-
lowing new subclauses:
‘‘(II) for 1992 and 1993, the
amount determined under this clause
for the preceding year increased by the
covered item update for such subse-
quent year,
‘‘(III) for 1994, the local payment
amount determined under clause (i) for
such item or device for that year, ex-
cept that the national limited payment
amount may not exceed 100 percent of
the median of all local payment
amounts determined under such clause
for such item for that year and may
not be less than 85 percent of the me-
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dian of all local payment amounts de-
termined under such clause for such
item or device for that year, and’’.
(2) MISCELLANEOUS DEVICES AND ITEMS.—Sec-
tion 1834(a)(8) (42 U.S.C. 1395m(a)(8)) is amend-
ed—
(A) in subparagraph (A)(ii)(III), by strik-
ing ‘‘1992’’ and inserting ‘‘1992, 1993, and
1994’’; and
(B) in subparagraph (B)—
(i) by striking ‘‘and’’ at the end of
clause (i),
(ii) by redesignating clause (ii) as (iv),
and
(iii) by inserting after clause (i) the
following new clauses:
‘‘(ii) for 1992 and 1993, the amount
determined under this subparagraph for the
preceding year increased by the covered
item update for such subsequent year;
‘‘(iii) for 1994, the local purchase price
computed under subparagraph (A)(ii) for
the item for the year, except that such na-
tional limited purchase price may not ex-
ceed 100 percent of the median of all local
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purchase prices computed for the item
under such subparagraph for the year and
may not be less than 85 percent of the me-
dian of all local purchase prices computed
under such subparagraph for the item for
the year; and’’.
(3) OXYGEN AND OXYGEN EQUIPMENT.—Section
1834(a)(9) (42 U.S.C. 1395m(a)(9)) is amended—
(A) in subparagraph (A)(ii)(II), by striking
‘‘1991 and 1992’’ and inserting ‘‘1991, 1992,
1993, and 1994’’; and
(B) in subparagraph (B)—
(i) by striking ‘‘and’’ at the end of
clause (i),
(ii) by redesignating clause (ii) as (iv),
and
(iii) by inserting after clause (i) the
following new clauses:
‘‘(ii) for 1992 and 1993, the amount
determined under this subparagraph for the
preceding year increased by the covered
item update for such subsequent year;
‘‘(iii) for 1994, the local monthly pay-
ment rate computed under subparagraph
(A)(ii) for the item for the year, except that
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such national limited monthly payment
rate may not exceed 100 percent of the me-
dian of all local monthly payment rates
computed for the item under such subpara-
graph for the year and may not be less than
85 percent of the median of all local month-
ly payment rates computed for the item
under such subparagraph for the year;
and’’.
(b) PAYMENT
FOR
PROSTHETIC
DEVICES
AND
ORTHOTICS AND PROSTHETICS.—
(1) IN GENERAL.—Section 1834(h)(2) (42 U.S.C.
1395m(h)(2)) is amended—
(A) in subparagraph (A)(ii)(II), by striking
‘‘1992 or 1993’’ and inserting ‘‘1992, 1993, or
1994’’;
(B) in subparagraph (B)(ii), by striking
‘‘each subsequent year’’ and inserting ‘‘1993’’;
(C) in subparagraph (C)(iv), by striking
‘‘regional purchase price computed under sub-
paragraph (B)’’ and inserting ‘‘national limited
purchase price computed under subparagraph
(E)’’;
(D) in subparagraph (D)(ii), by striking ‘‘a
subsequent year’’ and inserting ‘‘1993’’; and
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(E) by adding at the end the following new
subparagraph:
‘‘(E) COMPUTATION OF NATIONAL LIMITED
PURCHASE PRICE.—With respect to the furnish-
ing of a particular item in a year, the Secretary
shall compute a national limited purchase
price—
‘‘(i) for 1994, equal to the local pur-
chase price computed under subparagraph
(A)(ii)(II) for the item for the year, except
that such national limited purchase price
may not exceed 100 percent of the median
of all local purchase prices for the item
computed under such subparagraph for the
year, and may not be less than 85 percent
of the median of all local purchase prices
for the item computed under such subpara-
graph for the year; and
‘‘(ii) for each subsequent year, equal to
the amount determined under this subpara-
graph for the preceding year increased by
the applicable percentage increase for such
subsequent year.’’.
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(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to items furnished on or after January
1, 1994.
SEC. 7232. TREATMENT OF NEBULIZERS AND ASPIRATORS.
(a) IN GENERAL.—Section 1834(a)(3)(A) (42 U.S.C.
1395m(a)(3)(A)) is amended by striking ‘‘(such as ventila-
tors, aspirators, IPPB machines, and nebulizers)’’.
(b) PAYMENT
FOR
ACCESSORIES
RELATING
TO
NEBULIZERS
AND ASPIRATORS.—Section 1834(a)(2)(A)
(42 U.S.C. 1395m(a)) is amended—
(1) by striking ‘‘or’’ at the end of clause (i),
(2) by adding ‘‘or’’ at the end of clause (ii), and
(3) by inserting after clause (ii) the following
new clause:
‘‘(iii) which is an accessory used in
conjunction with a nebulizer or aspirator,’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to items furnished on or after January
1, 1994.
SEC. 7233. PAYMENT FOR SURGICAL DRESSINGS.
(a) IN GENERAL.—Section 1834 (42 U.S.C. 1395m)
is amended by adding at the end the following new sub-
section:
‘‘(i) PAYMENT FOR SURGICAL DRESSINGS.—
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‘‘(1) IN
GENERAL.—Payment under this sub-
section for surgical dressings (described in section
1861(s)(5)) shall be made in a lump sum amount for
the purchase of the item in an amount equal to 80
percent of the lesser of—
‘‘(A) the actual charge for the item; or
‘‘(B) a payment amount determined in ac-
cordance with the methodology described in sub-
paragraphs (B) and (C) of subsection (a)(2) (ex-
cept that in applying such methodology, the na-
tional limited payment amount referred to in
such subparagraphs shall be initially computed
based on local payment amounts using average
reasonable charges for the 12-month period end-
ing December 31, 1992, increased by the covered
item updates described in such subsection for
1993 and 1994).
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
apply to surgical dressings that are—
‘‘(A) furnished as an incident to a physi-
cian’s professional service; or
‘‘(B) furnished by a home health agency.’’.
(b) CONFORMING AMENDMENT.—Section 1833(a)(1)
(42 U.S.C. 1395l(a)(1)), as amended by section 7207(e)(1),
is amended—
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(1) by striking ‘‘and’’ before ‘‘(P)’’, and
(2) by inserting before the semicolon at the end
the following: ‘‘, and (Q) with respect to surgical
dressings, the amounts paid shall be the amounts de-
termined under section 1834(j)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to items furnished on or after January
1, 1994.
SEC. 7234. PAYMENTS FOR TENS DEVICES.
(a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.
1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the
second place it appears and inserting ‘‘45 percent’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to items furnished on or after Janu-
ary 1, 1994.
Subpart D—Part B Premium
SEC. 7251. PART B PREMIUM.
Section 1839(e) (42 U.S.C. 1395r(e)) is amended—
(1) in paragraph (1)(A), by striking ‘‘December
1983 and prior to January 1991 shall be an amount
equal to 50 percent’’ and inserting ‘‘after December
1995 and prior to January 1999 shall be an amount
equal to 50 percent’’, and
(2) in paragraph (2), by striking ‘‘1991’’ and in-
serting ‘‘1998’’.
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Subpart E—Other Provisions
SEC. 7261. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORA-
TORY TESTS.
(a) LOWER CAP.—Section 1833(h)(4)(B) (42 U.S.C.
1395l(h)(4)(B)) is amended—
(1) by striking ‘‘and’’ at the end of clause (iii),
(2) in clause (iv), by inserting ‘‘and before Janu-
ary 1, 1994,’’ after ‘‘1990,’’,
(3) by striking the period at the end of clause
(iv) and inserting ‘‘, and’’, and
(4) by adding at the end the following:
‘‘(v) after December 31, 1993, is equal to 76 per-
cent of the median of all the fee schedules established
for that test for that laboratory setting under para-
graph (1).’’.
(b) NO UPDATE FOR 1994 THROUGH 1998.—Section
1833(h)(2)(A)(ii)(II) (42 U.S.C. 1395l(h)(2)(A)(ii)(III)) is
amended by inserting ‘‘1994, 1995, 1996, 1997, and 1998’’
after ‘‘1988’’.
PART III—PROVISIONS RELATING TO PARTS A
AND B
SEC. 7301. PAYMENTS FOR DIRECT GRADUATE MEDICAL
EDUCATION COSTS.
(a) WEIGHTING FACTORS.—Section 1886(h)(4)(C) (42
U.S.C. 1395ww(h)(4)(C)) is amended to read as follows:
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‘‘(C) WEIGHTING
FACTORS
FOR
CERTAIN
RESIDENTS.—Subject to subparagraph (D), such
rules shall provide, in calculating the number of
full-time-equivalent residents in an approved
residency program—
‘‘(i) with respect to residents entering
an approved medical residency training
program before September 1, 1993—
‘‘(I) for a resident who is in the
resident’s initial residency period, the
weighting factor is 1.00, and
‘‘(II) for a resident who is not in
the resident’s initial residency period,
the weighting factor is .50; and
‘‘(ii) with respect to residents entering
an approved medical residency training
program on or after September 1, 1993—
‘‘(I) for a resident who is in the
resident’s initial residency period, and
is in—
‘‘(aa) a primary care resi-
dency, the weighting factor is
1.10, and
‘‘(bb) any other residency,
the weighting factor is 0.70, and
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‘‘(II) for a resident who is not in
the resident’s initial residency period,
the weighting factor is 0.50.’’.
(b) INITIAL RESIDENCY PERIOD.—
(1) IN
GENERAL.—Section 1886(h)(5)(F) (42
U.S.C. 1395ww(h)(5)(F)) is amended by striking
‘‘plus one year’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall be effective on and after July 1,
1995.
(c) PRIMARY CARE RESIDENCY.—Section 1886(h)(5)
(42 U.S.C. 1395ww(h)(5)) is amended by adding at the end
the following new subparagraph:
‘‘(I) PRIMARY CARE RESIDENCY.—The term
‘primary care residency’ means a residency
training program in family medicine, general
internal medicine, general pediatrics, preventive
care, geriatric care, or osteopathic general prac-
tice.’’.
(d) PREVENTIVE CARE SERVICES AS PART OF INITIAL
RESIDENCY PERIOD.—Section 1886(h)(5)(F)(ii) (42 U.S.C.
1395ww(h)(5)(F)(ii)) is amended by inserting ‘‘or a pre-
ventive care residency or fellowship program’’ after ‘‘fellow-
ship program’’.
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(e) SUCCESSOR EXAMS INCLUDED IN DEFINITION OF
FMGEMS EXAMINATION.—
(1) IN
GENERAL.—Section 1886(h)(5)(E) is
amended by inserting ‘‘or any successor examination’’
after ‘‘Medical Sciences’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply as if included in the enact-
ment of the Consolidated Omnibus Budget Reconcili-
ation Act of 1985 (Public Law 99–272).
(f) REPORT BY THE SECRETARY.—
(1) RECOMMENDATIONS.—The Secretary shall
make recommendations—
(A) concerning the extent to which variation
in the approved FTE per resident amounts
should be reduced;
(B) whether the approved FTE per resident
amounts should be adjusted to account for sub-
stantial changes in the operation of an approved
medical residency training program since the
base year calculation; and
(C) potential changes in the graduate medi-
cal education payment system that would pro-
mote residency training in nonhospital ambula-
tory site.
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(2) REPORT.—Not later than July 31, 1994, the
Secretary shall deliver a report to Congress which
shall contain recommendations on each of the matters
under paragraph (1).
SEC. 7302. REVISION OF HOME HEALTH AGENCY COST LIM-
ITS.
(a) IN GENERAL.—Section 1861(v)(1)(L) (42 U.S.C.
1395x(v)(1)(L)(i)) is amended—
(1) in clause (i), by striking ‘‘for cost reporting
periods’’ and all that follows through to the period
and inserting ‘‘110 percent of the median of the labor-
related and nonlabor per visit costs for home health
agencies.’’, and
(2) in clause (ii), by striking ‘‘specific basis,’’
and all that follows through ‘‘agencies.’’ and inserting
‘‘specific basis.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall apply to cost reporting periods beginning
on or after October 1, 1993.
SEC. 7303. MEDICARE AS SECONDARY PAYER.
(a) EXTENSION
OF
AND MODIFICATIONS
TO DATA
MATCH PROGRAM.—(1)(A) Section 1862(b)(5)(C)(iii) (42
U.S.C. 1395y(b)(5)(C)(iii)) is amended by striking ‘‘1995’’
and inserting ‘‘1998’’.
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(B) Section 6103(l)(12)(F) of the Internal Revenue
Code of 1986 is amended—
(i) in clause (i), by striking ‘‘1995’’ and insert-
ing ‘‘1998’’,
(ii) in clause (ii)(I), by striking ‘‘1994’’ and in-
serting ‘‘1997’’, and
(iii) in clause (ii)(II), by striking ‘‘1995’’ and
inserting ‘‘1998’’.
(2)(A) Section 6103(l)(12)(B)(i) of the Internal Reve-
nue Code of 1986 is amended by inserting ‘‘, above an
amount (if any) specified by the Secretary of Health and
Human Services,’’ after ‘‘section 3401(a))’’.
(B) The matter in section 6103(l)(12)(B)(ii) of such
Code preceding subclause (I) is amended by inserting ‘‘,
above an amount (if any) specified by the Secretary of
Health and Human Services,’’ after ‘‘wages’’.
(C) The heading to section 6103(l)(12) of such Code
is amended by striking ‘‘TAXPAYER IDENTITY’’ and insert-
ing ‘‘RETURN’’.
(3)(A) Section 6103(l)(12) of the Internal Revenue
Code of 1986, as amended by paragraph (1), is amended—
(i) by redesignating subparagraphs (E) and (F)
as subparagraphs (F) and (G), respectively, and
(ii) by inserting after subparagraph (D) the fol-
lowing new subparagraph:
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‘‘(E) DISCLOSURE
CONCERNING
ENFORCE-
MENT
ACTIVITIES.—The Secretary shall, upon
written request from the Secretary of Health and
Human Services, disclose to the Secretary of
Health and Human Services the status of any
activities undertaken (with respect to persons
specified by the Secretary of Health and Human
Services) to enforce the requirements of section
5000.’’.
(B) Section 6103(l)(12)(D)(i) of such Code is amended
by striking ‘‘this paragraph’’ and inserting ‘‘subparagraphs
(A) through (C)’’.
(C) The heading to section 6103(l)(12) of such Code
is amended by inserting ‘‘AND FOR FACILITATION OF EN-
FORCEMENT OF MEDICARE SECONDARY PAYER REQUIRE-
MENTS’’ before the period.
(D) 
Section 
1862(b)(5)(C)(i) 
(42 
U.S.C.
1395y(b)(5)(C)(i)) 
is 
amended 
by 
striking
‘‘6103(l)(12)(D)(iii)’’ and inserting ‘‘6103(l)(12)(F)(iii)’’.
(b) PERMANENT APPLICATION TO DISABLED ACTIVE
INDIVIDUALS.—Section 
1862(b)(1)(B) 
(42 
U.S.C.
1395y(b)(1)(B)) is amended by striking clause (iii).
(c) APPLICATION OF ESRD RULES TO CERTAIN AGED
AND DISABLED BENEFICIARIES AND INCREASE IN MEDI-
CARE SECONDARY PAYER COVERAGE FOR ESRD SERVICES
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TO 24-MONTHS.—(1) Subparagraphs (A)(iv) and (B)(ii) of
section 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each amend-
ed—
(A) by striking ‘‘Clause (i) shall not apply’’ and
inserting ‘‘Subparagraph (C) shall apply instead of
clause (i)’’, and
(B) by inserting ‘‘(without regard to entitlement
under section 226)’’ after ‘‘individual is, or’’.
(2) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C))
is amended—
(A) in the second sentence, by striking ‘‘on or be-
fore January 1, 1996’’ and inserting before ‘‘January
1, 1994’’, and
(B) by adding at the end the following: ‘‘Effec-
tive for items and services furnished on or after Janu-
ary 1, 1994, and before October 1, 1998, (with respect
to periods beginning on or after July 1, 1992), this
subparagraph shall be applied by substituting ‘24-
month’ for ‘12-month’ each place it appears.’’.
(d) APPLICATION OF EXCISE TAX TO FAILURE TO RE-
IMBURSE FEDERAL GOVERNMENT.—
(1) IN GENERAL.—Section 5000(c) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘of
section 1862(b)(1)’’ and inserting ‘‘of paragraph (1),
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or with the requirements of paragraph (2), of section
1862(b).’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to demands for repayment
issued after the date of the enactment of this Act.
(e) RETROACTIVE EXEMPTION FOR CERTAIN SITUA-
TIONS
INVOLVING
RELIGIOUS
ORDERS.—Section
1862(b)(1)(D) of the Social Security Act (42 U.S.C.
1395y(b)(1)(D)) applies, with respect to items and services
furnished before October 1, 1989, to any claims that the
Secretary of Health and Human Services had not identified
before that date as subject to the provisions of this sub-
section.
(f) UNIFORM RULES FOR SIZE OF EMPLOYER.—(1)
Section 1862(b)(1) (42 U.S.C. 1395y(b)(1)) is amended by
adding at the end the following new subparagraph:
‘‘(E) GENERAL PROVISIONS.—
‘‘(i) EXCLUSION
OF
GROUP
HEALTH
PLAN
OF
A
SMALL
EMPLOYER.—Subpara-
graphs (A) through (C) shall not apply to
a group health plan unless the plan is a
plan of, or contributed to by, an employer
or employee organization that has 20 or
more individuals in current employment
status for each working day in each of 20
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or more calendar weeks in the current cal-
endar year or the preceding calendar year.
‘‘(ii) EXCEPTION FOR SMALL EMPLOY-
ERS IN MULTIEMPLOYER OR MULTIPLE EM-
PLOYER GROUP HEALTH PLANS.—Subpara-
graphs (A) through (C) shall not apply with
respect to individuals enrolled in a multi-
employer or multiple employer group health
plan if the coverage of the individuals under
the plan is by virtue of current employment
status with an employer that does not have
20 or more individuals in current employ-
ment status for each working day in each of
20 or more calendar weeks in the current
calendar year or the preceding calendar
year; but the exception provided in this
clause applies only if the plan elects treat-
ment under this clause.
‘‘(iii) SPECIAL RULES.—For purposes
of clauses (i) and (ii)—
‘‘(I) all employees of corporations
which are members of a controlled
group of corporations (within the
meaning of section 1563(a) of the In-
ternal Revenue Code of 1986, deter-
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mined 
without 
regard 
to 
section
1563(a)(4) or section (e)(3)(C) of such
Code), shall be treated as employed by
a single employer,
‘‘(II) all employees of trades or
businesses (whether or not incor-
porated) which are under common con-
trol (under regulations prescribed by
the Secretary of the Treasury under
section 414(c) of such Code) shall be
treated as employed by a single em-
ployer,
‘‘(III) all employees of the mem-
bers of an affiliated service group (as
defined in section 414(m) of such
Code) shall be treated as employed by
a single employer, and
‘‘(IV) leased employees (as defined
in section 414(n)(2) of such Code) shall
be treated as employees of the person
for whom they perform services to the
extent they are so treated under section
414(n) of such Code.
In applying sections of the Internal Reve-
nue Code under this clause, the Secretary
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shall rely upon regulations and decisions of
the Secretary of the Treasury respecting
such sections.’’.
‘‘(iv) 
GROUP
HEALTH
PLAN
DE-
FINED.—For purposes of this subsection, the
term ‘group health plan’ has the meaning
given such term in section 5000(b) of the
Internal Revenue Code of 1986, without re-
gard to section 5000(d) of such Code.
‘‘(v) CURRENT
EMPLOYMENT
STATUS
DEFINED.—For purposes of this subsection,
an individual has ‘current employment sta-
tus’ with an employer if the individual is
an employee, is the employer, or is associ-
ated with the employer in a business rela-
tionship.
‘‘(vi) EMPLOYER DEFINED.—For pur-
poses of this subsection, the term ‘employer’
includes a self-employed person.’’.
(2)(A) 
Section 
1862(b)(1)(A)(i)(I) 
(42 
U.S.C.
1395y(b)(1)(A)(i)(I)) is amended to read as follows:
‘‘(I) may not take into account
that an individual (or the individual’s
spouse) who is covered under the plan
by virtue of the individual’s current
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employment status with an employer is
entitled to benefits under this title
under section 226(a), and’’.
(B) 
Section
1862(b)(1)(A)(i)(II) 
(42 
U.S.C.
1395y(b)(1)(A)(i)(II)) is amended to read as follows:
‘‘(II) shall provide that any indi-
vidual age 65 or over (and the individ-
ual’s spouse age 65 or older) who is
covered under the plan by virtue of the
individual’s current employment status
with an employer shall be entitled to
the same benefits under the plan under
the same conditions as any such indi-
vidual (or spouse) under age 65.’’.
(C) Section 1862(b)(1)(A) (42 U.S.C. 1395y(b)(1)(A)),
as amended by subsection (c)(1), is amended—
(i) by striking clauses (ii), (iii), and (v), and
(ii) by redesignating clause (iv) as clause (ii).
(3)(A) 
Section 
1862(b)(1)(B) 
(42 
U.S.C.
1395y(b)(1)(B)(i)) is amended—
(i) by striking the heading and inserting the fol-
lowing new heading:
‘‘(B) DISABLED INDIVIDUALS UNDER GROUP
HEALTH PLANS.—’’, and
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(ii) by striking clause (i) and inserting the fol-
lowing new clause:
‘‘(i) IN
GENERAL.—A group health plan
may not take into account that an individual
(or a member of the individual’s family) who is
covered under the plan by virtue of the individ-
ual’s current employment status with an em-
ployer is entitled to benefits under this title
under section 226(b).’’.
(B) Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B))
is amended by striking clause (iv).
(4) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C))
is amended—
(A) in the matter preceding clause (i), by strik-
ing ‘‘(as defined in subparagraph (A)(v))’’,
(B) by striking ‘‘solely’’ each place it appears,
(C) by striking ‘‘by reason of’’ and inserting
‘‘under’’ each place it appears, and
(D) by inserting ‘‘or eligible for’’ after ‘‘entitled
to’’ the first and last place it appears.
(5) The second sentence of section 1862(b)(2)(A) (42
U.S.C. 1395y(b)(2)(A)) is amended by striking ‘‘or large
group health plan’’.
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(6)(A) Subsection (a) of section 5000 of the Internal
Revenue Code of 1986 is amended by inserting ‘‘(including
a self-employed person)’’ after ‘‘employer’’;
(B) Subsection (b) of section 5000 of such Code is
amended to read as follows:
‘‘(b) GROUP HEALTH PLAN.—The term ‘group health
plan’ means a plan (including a self-insured plan) of, or
contributed to by, an employer (including a self-employed
person) or employee organization to provide health care
(directly or otherwise) to the employees, former employees,
the employer, others associated or formerly associated with
the employer in a business relationship, or their families.’’;
and
(C) Subsection (c) of section 5000 of such Code by
striking ‘‘or large group health plan’’.
(D) Section 6103(l)(12)(F)(ii) of such Code (as redes-
ignated by subsection (a)(3)(A)(i) of this section) is amend-
ed to read as follows:
‘‘(ii) GROUP HEALTH PLAN.—The term
‘group health plan’ means any group health
plan (as defined in section 5000(b)).’’.
(g) EFFECTIVE DATE.—The amendments made by sub-
sections (c)(1), (d), and (f) apply to items and services fur-
nished after the third calendar month beginning after the
date of enactment of this Act.
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SEC. 7304. EXTENSION OF SELF-REFERRAL BAN TO ADDI-
TIONAL SPECIFIED SERVICES.
(a) EXTENSION
TO
DESIGNATED
HEALTH
SERV-
ICES.—
(1) IN GENERAL.—Section 1877(h) (42 U.S.C.
1395nn(h)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(8) DESIGNATED HEALTH SERVICES.—The term
‘designated health services’ means—
‘‘(A) clinical laboratory services;
‘‘(B) physical or occupational therapy serv-
ices;
‘‘(C) radiology or other diagnostic services;
‘‘(D) radiation therapy services;
‘‘(E) the furnishing of durable medical
equipment;
‘‘(F) the furnishing of parenteral and en-
teral nutrition nutrients, supplies, and equip-
ment;
‘‘(G) home health services; and
‘‘(H) the furnishing of prosthetics, orthotics,
and prosthetic devices.’’.
(2) CONFORMING
AMENDMENTS.—Section 1877
(42 U.S.C. 1395nn) is amended—
(A) by striking ‘‘clinical laboratory serv-
ices’’ and ‘‘CLINICAL
LABORATORY
SERVICES’’
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and inserting ‘‘designated health services’’ and
‘‘DESIGNATED HEALTH SERVICES’’, respectively,
each place either appears in subsections (a)(1),
(b)(2)(A)(ii), (d)(1), (d)(2), and (d)(3); and
(B) by striking ‘‘clinical laboratory service’’
and inserting ‘‘designated health service’’ each
place it appears in subsections (g)(1) and
(h)(7)(B).
(b) MODIFICATION TO EXCEPTION FOR IN-OFFICE AN-
CILLARY
SERVICES.—Section 
1877(b)(2) 
(42 
U.S.C.
1395nn(b)(2)) is amended—
(1) by inserting ‘‘(other than durable medical
equipment and parenteral and enteral nutrition
equipment and supplies)’’ after ‘‘services’’ the first
place it appears; and
(2) in subparagraph (A)(ii)(II), by striking
‘‘centralized provision’’ and inserting ‘‘provision of
some or all’’.
(c) 
TREATMENT
OF
COMPENSATION
ARRANGE-
MENTS.—
(1) RENTAL
OF
OFFICE
SPACE
AND
EQUIP-
MENT.—
(A) IN GENERAL.—Paragraph (1) of section
1877(e) (42 U.S.C. 1395nn(e)) is amended to
read as follows:
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termined in a manner that takes into ac-
count the volume or value of any referrals
or other business generated between the par-
ties,
‘‘(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
‘‘(vi) the lease covers all of the premises
leased between the parties for the period of
the lease, and
‘‘(vii) the compensation arrangement
meets such other requirements as the Sec-
retary may impose by regulation as needed
to protect against program or patient abuse.
‘‘(B) EQUIPMENT.—Payments made by a
lessee of equipment to the lessor of the equipment
for the use of the equipment if—
‘‘(i) the lease is set out in writing,
signed by the parties, and specifies the
equipment covered by the lease,
‘‘(ii) the equipment rented or leased is
reasonable and necessary for the legitimate
business purposes of the lease or rental and
is used exclusively by the lessee when being
used by the lessee,
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‘‘(iii) the lease provides for a term of
rental or lease of at least one year,
‘‘(iv) the rental charges over the term
of the lease are set in advance, are consist-
ent with fair market value, and are not de-
termined in a manner that takes into ac-
count the volume or value of any referrals
or other business generated between the par-
ties,
‘‘(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
‘‘(vi) the lease covers all of the equip-
ment leased between the parties for the pe-
riod of the lease, and
‘‘(vii) the compensation arrangement
meets such other requirements as the Sec-
retary may impose by regulation as needed
to protect against program or patient
abuse.’’.
(B) 
CONFORMING
AMENDMENT.—Section
1877(h) (42 U.S.C. 1395nn(h)) is amended by
striking paragraphs (5) and (6) and by redesig-
nating paragraphs (7) and (8) (as added by sub-
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section (a)(1)) as paragraphs (5) and (6), respec-
tively.
(2) BONA FIDE EMPLOYMENT RELATIONSHIPS.—
Section 1877(e)(2) (42 U.S.C. 1395nn(e)(2)) is
amended—
(A) by striking ‘‘AND SERVICE’’ and ‘‘WITH
HOSPITALS’’;
(B) by striking ‘‘An arrangement’’ and all
that follows through ‘‘if’’ and inserting ‘‘Any
amount paid by an employer to a physician (or
an immediate family member of such physician)
who has a bona fide employment relationship
with the employer for the provision of services
if’’;
(C) in subparagraphs (A), (B), and (D), by
striking ‘‘arrangement’’ and inserting ‘‘employ-
ment relationship’’;
(D) in subparagraph (C), by striking ‘‘hos-
pital’’ and inserting ‘‘employer’’; and
(E) by adding at the end the following new
flush sentence:
‘‘Subparagraph (B)(ii) shall not be construed as pro-
hibiting the payment of remuneration in the form of
a productivity bonus based on services performed per-
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sonally by the physician (or an immediate family
member of such physician).’’.
(3) PERSONAL
SERVICE
ARRANGEMENTS.—Sec-
tion 1877(e)(3) (42 U.S.C. 1395nn(e)(3)) is amended
to read as follows:
‘‘(3) SERVICE ARRANGEMENTS.—
‘‘(A) 
PERSONAL
SERVICE
ARRANGE-
MENTS.—Remuneration from an entity under an
arrangement if—
‘‘(i) the arrangement is set out in writ-
ing, signed by the parties, and specifies the
services covered by the arrangement,
‘‘(ii) the arrangement covers all of the
services to be provided,
‘‘(iii) the aggregate services contracted
for do not exceed those that are reasonable
and necessary for the legitimate business
purposes of the arrangement,
‘‘(iv) the term of the arrangement is
for at least one year,
‘‘(v) the compensation to be paid over
the term of the arrangement is set in ad-
vance, does not exceed fair market value,
and is not determined in a manner that
takes into account the volume or value of
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any referrals or other business generated be-
tween the parties,
‘‘(vi) the services to be performed under
the arrangement do not involve the counsel-
ing or promotion of a business arrangement
of other activity that violates any State or
Federal law, and
‘‘(vii) the arrangement meets such
other requirements as the Secretary may
impose by regulation as needed to protect
against program or patient abuse.
‘‘(B) OTHER
SERVICE
ARRANGEMENTS.—
Remuneration from an entity under an arrange-
ment if—
‘‘(i) the arrangement is—
‘‘(I) for specific identifiable serv-
ices as the medical director or as a
member of a medical advisory board at
the entity pursuant to a requirement of
this title,
‘‘(II) for specific identifiable phy-
sicians’ services to be furnished to an
individual receiving hospice care if
payment for such services may only be
made under this title as hospice care,
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‘‘(III) for specific physicians’
services furnished to a nonprofit blood
center, or
‘‘(IV) for specific identifiable ad-
ministrative services (other than direct
patient care services), but only under
exceptional circumstances specified by
the Secretary in regulations;
‘‘(ii) the requirements described in sub-
paragraphs (B) and (C) of paragraph (2)
are met with respect to the entity in the
same manner as they apply to an employer;
and
‘‘(iii) the arrangement meets such other
requirements as the Secretary may impose
by regulation as needed to protect against
program or patient abuse.’’.
(4) HEALTH SERVICES FURNISHED UNDER CER-
TAIN HOSPITAL ARRANGEMENTS.—Section 1877(e) (42
U.S.C. 1395nn(e)) is amended by adding at the end
the following new paragraph:
‘‘(7) CERTAIN GROUP PRACTICE ARRANGEMENTS
WITH A HOSPITAL.—
‘‘(A) IN
GENERAL.—An arrangement be-
tween a hospital and a group under which des-
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ignated health services are provided by the group
but are billed by the hospital if—
‘‘(i) the group would be a group prac-
tice, but for the fact that it bills for such
services through the hospital;
‘‘(ii) with respect to services provided
to an inpatient of the hospital, the arrange-
ment is pursuant to the provision of inpa-
tient 
hospital 
services 
under 
section
1861(b)(3);
‘‘(iii) the arrangement began before
December 19, 1989, and has continued in
effect without interruption since such date;
‘‘(iv) the group provides substantially
all of the designated health services fur-
nished under the arrangement to the hos-
pital’s patients;
‘‘(v) the arrangement is pursuant to
an agreement that is set out in writing and
that specifies the services to be provided by
the parties and the compensation for serv-
ices provided under the arrangement;
‘‘(vi) the compensation paid over the
term of the agreement is consistent with fair
market value and the compensation per
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unit of services is fixed in advance and is
not determined in a manner that takes into
account the volume or value of any referrals
or other business generated between the par-
ties;
‘‘(vii) the compensation is provided
pursuant to an agreement which would be
commercially reasonable even if no referrals
were made to the entity; and
‘‘(viii) the arrangement between the
parties meets such other requirements as the
Secretary may impose by regulation as
needed to protect against program or pa-
tient abuse.’’.
(5) ADDITIONAL
EXCEPTION.—Section 1877(e)
(42 U.S.C. 1395nn(e)) is further amended by adding
at the end the following new paragraph:
‘‘(8) PAYMENTS BY A PHYSICIAN FOR ITEMS AND
SERVICES.—Payments made by a physician—
‘‘(A) to a laboratory in exchange for the
provision of clinical laboratory diagnostic tests,
or
‘‘(B) to an entity as compensation for other
items or services if the items or services are fur-
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nished at a price that is consistent with fair
market value.’’.
(6) REFERRING PHYSICIANS.—Subparagraph (C)
of section 1877(h)(5) (42 U.S.C. 1395nn(h)(5)), as re-
designated by subsection (c)(1)(B), is amended—
(A) by inserting ‘‘a request by a radiologist
for diagnostic radiology services, and a request
by a radiation oncologist for radiation therapy,’’
after ‘‘examination services,’’, and
(B) by inserting ‘‘, radiologist, or radiation
oncologist’’ after ‘‘pathologist’’ the second place it
appears.
(7) CONFORMING AMENDMENT.—Section 1877(b)
(42 U.S.C. 1395nn(b)) is amended by striking para-
graph (4) and redesignating paragraph (5) as para-
graph (4).
(d) REQUIREMENTS FOR GROUP PRACTICE.—
(1) 
ADDITIONAL
REQUIREMENTS.—Section
1877(h)(4) (42 U.S.C. 1395nn(h)(4)) is amended to
read as follows:
‘‘(4) GROUP PRACTICE.—
‘‘(A) DEFINITION
OF
GROUP
PRACTICE.—
The term ‘group practice’ means a group of 2 or
more physicians legally organized as a partner-
ship, professional corporation, foundation, not-
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for-profit corporation, faculty practice plan, or
similar association—
‘‘(i) in which each physician who is a
member of the group provides substantially
the full range of services which the physi-
cian routinely provides, including medical
care, consultation, diagnosis, or treatment,
through the joint use of shared office space,
facilities, equipment and personnel;
‘‘(ii) for which substantially all of the
services of the physicians who are members
of the group are provided through the group
and are billed in the name of the group and
amounts so received are treated as receipts
of the group;
‘‘(iii) in which the overhead expenses of
and the income from the practice are dis-
tributed in accordance with methods pre-
viously determined by members of the
group;
‘‘(iv) except as provided in subpara-
graph (B)(i), in which no physician who is
a member of the group directly or indirectly
receives compensation based on the volume
or value of referrals by the physician;
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‘‘(v) in which, on average, there are no
less than 5 physicians per office location,
but if a group has less than 15 physicians
such group may have up to 3 office loca-
tions any one of which may have less than
5 physicians;
‘‘(vi) in which members of the group
personally conduct no less than 75 percent
of the physician-patient encounters of the
group practice; and
‘‘(vii) which meets such other stand-
ards as the Secretary may impose by regu-
lation.
‘‘(B) SPECIAL RULES.—
‘‘(i) PROFITS AND PRODUCTIVITY BO-
NUSES.—A physician in a group practice
may be paid a share of overall profits of the
group, or a productivity bonus based on
services personally performed or services in-
cident to such personally performed services,
so long as the share or bonus is not deter-
mined in any manner which is directly re-
lated to the volume or value of referrals by
such physician.
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‘‘(ii) FACULTY
PRACTICE
PLANS.—In
the case of a faculty practice plan associ-
ated with a hospital, institution of higher
education, or medical school with an ap-
proved medical residency training program
in which physician members may provide a
variety of different specialty services and
provide professional services both within
and outside the group, as well as perform
other tasks such as research, subparagraph
(A) shall be applied only with respect to the
services provided within the faculty practice
plan.
‘‘(C) DEFINITION OF OFFICE LOCATION.—
For purposes of this paragraph, the term ‘office
location’ means an office where physician serv-
ices are offered to patients except that—
‘‘(i) such term does not include—
‘‘(I) a location consisting solely of a
diagnostic facility, nursing facility, or
treatment facility such as a physical or oc-
cupational therapy center, or a facility pro-
viding administrative services affiliated
with the group practice; or
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‘‘(II) an office located in a rural area
(as defined in section 1886(d)(2)(D)) if at
least 85 percent of the physicians’ services
furnished at the location are furnished to
individuals who reside in such a rural area;
and
‘‘(ii) any office location which is located
immediately adjacent to another office location
shall be treated as the same office location.’’.
(2) USE OF BILLING NUMBERS, ETC.—Section
1877 (42 U.S.C. 1395nn) is amended—
(A) in subsection (b)(2)(B), by inserting
‘‘under a billing number assigned to the group
practice’’ after ‘‘member’’,
(B) in subsection (h)(4)(A)(ii), as added by
subsection (d)(1), by inserting ‘‘and under a bill-
ing number assigned to the group’’ after ‘‘in the
name of the group’’, and
(C) in subsection (h)(4)(A)(iii), as so added,
by striking ‘‘by members of the group’’.
(3) CONFORMING AMENDMENT.—Section 1877(h)
(42 U.S.C. 1395nn(h)) is amended by striking ‘‘DEFI-
NITIONS.—’’ and inserting ‘‘DEFINITIONS AND SPE-
CIAL RULES.—’’.
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(e) EXPANDING RURAL PROVIDER EXCEPTION TO
COVER COMPENSATION ARRANGEMENTS.—
(1) IN GENERAL.—Section 1877(b) (42 U.S.C.
1395nn(b)) is amended—
(A) by redesignating paragraph (4), as re-
designated by subsection (c)(7), as paragraph
(5), and
(B) by inserting after paragraph (3) the fol-
lowing new paragraph:
‘‘(4) RURAL
PROVIDERS.—In the case of des-
ignated health services if—
‘‘(A) the services are furnished in a rural
area (as defined in section 1886(d)(2)(D)), and
‘‘(B) substantially all of the services fur-
nished by the entity furnishing the services de-
scribed in subparagraph (A) are furnished to in-
dividuals entitled to benefits under this title who
reside in such a rural area.’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1877(d) (42 U.S.C. 1395nn(d)) is amended—
(A) by striking paragraph (2), and
(B) by redesignating paragraph (3) as
paragraph (2).
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(f) EXEMPTION
OF COMPENSATION ARRANGEMENTS
INVOLVING CERTAIN TYPES OF REMUNERATION.—Section
1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is amended—
(1) in subparagraph (A), by inserting before the
period at the end the following: ‘‘other than an ar-
rangement involving only remuneration described in
subparagraph (C)’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) Remuneration described in this subpara-
graph is any remuneration consisting of any of the
following:
‘‘(i) The forgiveness of amounts owed for in-
accurate tests or procedures, mistakenly per-
formed tests or procedures, or the correction of
minor billing errors.
‘‘(ii) The provision of items, devices, or sup-
plies of minor value that are used to—
‘‘(I) collect, transport, process, or store
specimens for the entity providing the item,
device, or supply, or
‘‘(II) communicate the results of tests
or procedures for such entity.’’.
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(g) EXCEPTION
FOR
PUBLICLY-TRADED
SECURI-
TIES.—Section 1877(c) (42 U.S.C. 1395nn(c)) is amend-
ed—
(1) in the matter preceding paragraph (1), by
striking ‘‘on terms generally available to the public’’
and inserting ‘‘through public trading on a public ex-
change or which were inherited’’; and
(2) in paragraph (2), by striking ‘‘total assets
exceeding $100,000,000’’ and inserting ‘‘stockholder
equity exceeding $75,000,000’’.
(h) 
MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—Section 1877 (42 U.S.C. 1395nn) is amended—
(1) in subsection (b)(2)(A)(i), by striking ‘‘who
are employed by such physician or group practice
and who are personally’’ and inserting ‘‘who are di-
rectly’’;
(2) in the fourth sentence of subsection (f)—
(A) by striking ‘‘provided’’ and inserting
‘‘furnished’’, and
(B) by striking ‘‘provides’’ and inserting
‘‘furnish’’;
(3) in the last sentence of subsection (f)—
(A) by striking ‘‘providing’’ each place it
appears and inserting ‘‘furnishing’’,
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(B) by striking ‘‘with respect to the provid-
ers’’ and inserting ‘‘with respect to the entities’’,
and
(C) by striking ‘‘diagnostic imaging services
of any type’’ and inserting ‘‘magnetic resonance
imaging, computerized axial tomography scans,
and ultrasound services’’; and
(4) in subsection (a)(2)(B), by striking ‘‘sub-
section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.
(i) EFFECTIVE DATES.—
(1) Except as provided in paragraph (2), the
amendments made by this section shall apply to refer-
rals made on or after January 1, 1992.
(2) The amendments made by subsection (a)
apply with respect to a referral by a physician for
designated health services (as defined in section
1877(h)(6) of the Social Security Act) made after De-
cember 31, 1994.
SEC. 7305. REDUCTION IN PAYMENT FOR ERYTHROPOIETIN.
(a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42
U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—
(1) by striking ‘‘1991’’ and inserting ‘‘1994’’,
and
(2) by striking ‘‘$11’’ and inserting ‘‘$10’’.
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(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) apply to erythropoietin furnished after 1993.
Subtitle B—Medicaid Program
PART I—PROGRAM SAVINGS PROVISIONS
Subpart A—Repeal of Mandate
SEC. 7401. PERSONAL CARE SERVICES FURNISHED OUT-
SIDE THE HOME AS OPTIONAL BENEFIT.
(a) IN
GENERAL.—Section 1905(a) (42 U.S.C.
1396d(a)), as amended by subsection (b), is amended—
(1) in paragraph (7), by striking ‘‘including per-
sonal care services’’ and all that follows through
‘‘nursing facility’’;
(2) in paragraph (23), by striking ‘‘and’’ at the
end;
(3) by redesignating paragraph (24) as para-
graph (25); and
(4) by inserting after paragraph (23) the follow-
ing new paragraph:
‘‘(24) personal care services furnished to an indi-
vidual who is not an inpatient or resident of a nurs-
ing facility or other medical institution that are (A)
authorized by a physician for the individual in ac-
cordance with a plan of treatment, (B) provided by
an individual who is qualified to provide such serv-
ices and who is not a member of the individual’s fam-
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ily, (C) supervised by a registered nurse, and (D) fur-
nished in a home or other location; and’’.
(b) REDESIGNATIONS
TO PARAGRAPHS ADDED
BY
OBRA–1990.—Section 1905(a) (42 U.S.C. 1396d(a)) is
amended—
(1) by striking ‘‘and’’ at the end of paragraph
(21);
(2) in paragraph (24), by striking the comma at
the end and inserting ‘‘; and’’; and
(3) by redesignating paragraphs (22), (23), and
(24) as paragraphs (24), (22), and (23), respectively,
and by transferring and inserting paragraph (24), as
so redesignated, after paragraph (23), as so redesig-
nated.
(c) 
CONFORMING
AMENDMENTS.—(1) 
Section
1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is
amended by striking ‘‘through (21)’’ and inserting ‘‘through
(24)’’.
(2) Section 1902(j) (42 U.S.C. 1396a(j)) is amended
by striking ‘‘through (22)’’ and inserting ‘‘through (25)’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall take effect as if included in the enactment of
OBRA–1990.
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Subpart B—Outpatient Prescription Drugs
SEC. 
7411. 
PERMITTING 
PRESCRIPTION 
DRUG
FORMULARIES UNDER STATE PLANS.
(a) ELIMINATION OF PROHIBITION AGAINST USE OF
FORMULARIES.—Paragraph (54) of section 1902(a) (42
U.S.C. 1396a(a)) is amended to read as follows:
‘‘(54) in the case of a State plan that provides
medical assistance for covered outpatient drugs (as
defined in section 1927(k)), comply with the applica-
ble requirements of section 1927;’’.
(b) STANDARDS FOR FORMULARIES.—Section 1927(d)
(42 U.S.C. 1396r–8(d)), as amended by section 7412(a), is
amended—
(1) by adding at the end of paragraph (1) the
following new subparagraph:
‘‘(C) In the case of a State that establishes a for-
mulary in accordance with paragraph (6), the State
may exclude coverage of a covered outpatient drug
that is not included in the formulary.’’; and
(2) by inserting after paragraph (5) the follow-
ing new paragraph:
‘‘(6) REQUIREMENTS
FOR
FORMULARIES.—A
State may establish a formulary only if the following
requirements are met:
‘‘(A) The formulary is developed by a com-
mittee consisting of physicians, pharmacists, and
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other appropriate individuals appointed by the
Governor of the State or, at the option of the
State, the State’s drug use review board estab-
lished under subsection (g)(3).
‘‘(B) The formulary includes each covered
outpatient drug of a manufacturer which has en-
tered into and complies with an agreement under
subsection (a) unless the drug is contained in the
list referred to in paragraph (2) or excluded in
accordance with subparagraph (C).
‘‘(C)(i) The committee may exclude a cov-
ered outpatient drug with respect to the treat-
ment of a specific disease or condition for an
identified population (if any) only if the com-
mittee finds that the excluded drug does not have
a significant, clinically meaningful therapeutic
advantage in terms of safety, effectiveness, or
clinical outcome of such treatment for such popu-
lation over other drugs included in the for-
mulary.
‘‘(ii) The committee’s finding under clause
(i) shall be based on—
‘‘(I) the drug’s labeling, or
‘‘(II) in the case of a drug the pre-
scribed use of which is not approved under
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the Federal Food, Drug, and Cosmetic Act
but is a medically accepted indication, on
information from the appropriate compen-
dia described in subsection (k)(6).
‘‘(D) With respect to a recommendation to
exclude a covered outpatient drug from the for-
mulary or to exclude a prescribed use of such a
drug, the committee issues a written explanation
of its recommendation that is available to the
public.
‘‘(E) The State plan permits coverage of a
drug excluded from the formulary pursuant to a
prior authorization program that is consistent
with paragraph (5) unless the drug is contained
in the list referred to in paragraph (2).
‘‘(F) The formulary meets such other re-
quirements as the Secretary may impose.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to calendar quarters beginning on or
after October 1, 1993, without regard to whether or not reg-
ulations to carry out such amendments have been promul-
gated by such date.
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SEC. 7412. ELIMINATION OF SPECIAL EXEMPTION FROM
PRIOR AUTHORIZATION FOR NEW DRUGS.
(a) IN GENERAL.—Section 1927(d) (42 U.S.C. 1396r–
8(d)) is amended by striking paragraph (6).
(b) 
CONFORMING
AMENDMENT.—(1) 
Section
1927(d)(1)(A) (42 U.S.C. 1396r–8(d)(1)(A)) is amended by
striking ‘‘Except as provided in paragraph (6), a State’’
and inserting ‘‘A State’’.
(2) Section 1927(d)(3) (42 U.S.C. 1396r–8(d)(3)) is
amended by striking ‘‘(except with respect’’ and all that fol-
lows through ‘‘of this paragraph)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to calendar quarters beginning on or
after October 1, 1993, without regard to whether or not reg-
ulations to carry out such amendments have been promul-
gated by such date.
SEC. 7413. MODIFICATIONS TO DRUG REBATE PROGRAM.
(a) ELIMINATION OF ADDITIONAL REBATE BASED ON
WEIGHTED AVERAGE MANUFACTURER PRICE.—Paragraph
(2) of section 1927(c) (42 U.S.C. 1396r–8(c)) is amended
to read as follows:
‘‘(2) ADDITIONAL REBATE FOR SINGLE SOURCE
AND INNOVATOR MULTIPLE SOURCE DRUGS.—
‘‘(A) IN GENERAL.—The amount of the re-
bate for a calendar quarter with respect to each
dosage form and strength of a single source drug
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or an innovator multiple source drug, is in-
creased by an amount equal to the product of—
‘‘(i) the total number of dosage units
dispensed after December 31, 1990, for
which payment was made under the State
plan for the period reported by the State
under subsection (b)(2), and
‘‘(ii) the amount (if any) by which—
‘‘(I) the average manufacturer
price for the dosage form and strength
of the drug for the period, exceeds
‘‘(II) the average manufacturer
price for such dosage form and strength
for the calendar quarter beginning
July 1, 1990, increased by the percent-
age by which the average of the
consumer price indices for all urban
consumers (U.S. city average) for
months during the calendar quarter ex-
ceeds such index for September 1990.
‘‘(B) SPECIAL RULE.—In the case of a cov-
ered outpatient drug approved by the Food and
Drug Administration after October 1, 1990,
subclause (II) of subparagraph (A)(ii) shall be
applied by substituting ‘the first full calendar
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quarter after the drug was marketed’ for ‘the cal-
endar quarter beginning July 1, 1990’ and ‘the
month prior to the first month of the first full
calendar quarter after the drug was marketed’
for ‘September 1990’.’’.
(b) BASE DATE FOR COVERED OUTPATIENT DRUG
SOLD OR TRANSFERRED.—Paragraph (2) of section 1927(c)
(42 U.S.C. 1396r–8(c)), as amended by subsection (a), is
amended by adding at the end the following new subpara-
graph:
‘‘(C) BASE DATE FOR COVERED OUTPATIENT
DRUG SOLD OR TRANSFERRED.—For purposes of
computing the additional rebate under this para-
graph for any covered outpatient drug that is
sold or transferred to any entity, including a di-
vision or subsidiary of a manufacturer, the base
date for such drug after such sale or transfer
shall be the original base date established for
such drug.’’.
(c) MAXIMUM ALLOWABLE COST LIMITATIONS.—Sec-
tion 1927 (42 U.S.C. 1396r–8) is amended by adding at
the end the following new subsection:
‘‘(l) MAXIMUM ALLOWABLE COST LIMITATIONS.—This
section shall not supersede or affect provisions in effect
prior to January 1, 1991, relating to maximum allowable
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cost limitations for payment by States for covered out-
patient drugs, and rebates under this section shall be made
without regard to whether or not payment by the State for
such drugs is subject to such limitations or the amount of
such cost limitations.’’.
(d) EFFECTIVE DATES.—(1) The amendments made
by subsections (a) and (c) shall be effective as if included
in the enactment of section 4401 of OBRA–1990.
(2) The amendment made by subsection (b) shall be
effective on the date of the enactment of this Act.
Subpart C—Restrictions on Divestiture of Assets and
Estate Recovery
SEC. 7421. MEDICAID ESTATE RECOVERIES.
(a) MANDATE TO SEEK RECOVERY.—The matter pre-
ceding subparagraph (A) of section 1917(b)(1) (42 U.S.C.
1396p(b)(1)) is amended to read as follows: ‘‘The State
agency shall seek adjustment or recovery of any medical as-
sistance correctly paid on behalf of an individual under the
State plan—’’.
(b) HARDSHIP WAIVER.—Section 1917(b) (42 U.S.C.
1396p(b)) is amended by adding at the end the following
new paragraph:
‘‘(3) The State agency shall establish procedures (in
accordance with standards specified by the Secretary) under
which the agency shall waive the application of this sub-
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section if such application would work an undue hardship
as determined on the basis of criteria established by the Sec-
retary.’’.
(c) DEFINITION
OF ESTATE.—Section 1917(b) (42
U.S.C. 1396p(b)), as amended by subsection (b), is amended
by adding at the end the following new paragraph:
‘‘(4) DEFINITION.—For purposes of this section, the
term ‘estate’, with respect to a deceased individual—
‘‘(A) shall include all real and personal property
and other assets included within the individual’s es-
tate, as defined for purposes of State law with respect
to inheritance, and
‘‘(B) may include, at the option of the State,
any or all other real or personal property or other as-
sets in which the individual had any legal title or in-
terest at the time of death, including such assets con-
veyed to a survivor, heir, or assign of the deceased in-
dividual through joint tenancy, tenancy in common,
survivorship, life estate, living trust, or other arrange-
ment.’’.
(d) EFFECTIVE DATE.—(1)(A) Except as provided in
subparagraph (B), the amendments made by this section
shall apply to payments under title XIX of the Social Secu-
rity Act for calendar quarters beginning on or after October
1, 1993.
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(B) In the case of a State plan for medical assistance
under title XIX of the Social Security Act which the Sec-
retary of Health and Human Services determines requires
State legislation (other than legislation appropriating
funds) in order for the plan to meet the additional require-
ments imposed by the amendments made by this section,
the State plan shall not be regarded as failing to comply
with the requirements imposed by such amendments solely
on the basis of its failure to meet these additional require-
ments before the first day of the first calendar quarter be-
ginning after the close of the first regular session of the
State legislature that begins after the date of the enactment
of this Act. For purposes of the preceding sentence, in the
case of a State that has a 2-year legislative session, each
year of such session shall be deemed to be a separate regular
session of the State legislature.
(2) The amendments made by this section shall not
apply to individuals who died before October 1, 1993.
SEC. 7422. TRANSFERS OF ASSETS.
(a) MANDATORY AND OPTIONAL PERIODS OF INELI-
GIBILITY.—Section 1917(c) (42 U.S.C. 1396p(c)) is amend-
ed—
(1) by amending paragraph (1) to read as fol-
lows:
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‘‘(1)(A) In order to meet the requirements of this sub-
section for purposes of section 1902(a)(18), the State plan
shall provide that any institutionalized individual (or the
spouse of such individual) who disposes of assets for less
than fair market value on the date specified in subpara-
graph (B)(ii), or at any time thereafter during such indi-
vidual’s lifetime, is ineligible for medical assistance for—
‘‘(i) nursing facility services,
‘‘(ii) a level of care in any institution equivalent
to that of nursing facility services, and
‘‘(iii) home or community-based services under
subsection (c) or (d) of section 1915,
during any and all applicable periods specified in para-
graph (2).
‘‘(B)(i) The date specified in this clause, with respect
to an institutionalized individual, is the first date as of
which the individual—
‘‘(I) is an institutionalized individual, and
‘‘(II) has applied for or is receiving medical as-
sistance under the State plan.
‘‘(ii) The date specified in this clause, with respect to
an institutionalized individual, is the date 30 months before
the date specified in clause (i) (or, at the option of the State,
such earlier date as provided by the State in accordance
with paragraph (3)(A)(iii)).’’;
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(2) by redesignating paragraphs (2) through (5)
as paragraphs (4) through (7) and by inserting after
paragraph (1) the following new paragraphs:
‘‘(2) The period of ineligibility required under para-
graph (1) with respect to an institutionalized individual—
‘‘(A) shall be a number of months equal to—
‘‘(i) the total uncompensated value of all as-
sets transferred by the individual or the individ-
ual’s spouse on or after the date specified in
paragraph (1)(B)(ii), divided by
‘‘(ii) the average cost to a private patient of
nursing facility services in the State (or, at the
option of the State, in the community in which
the individual is institutionalized) on the date
specified in paragraph (1)(B)(i) based on costs
which include the cost of services included in the
State’s nursing facility reimbursement rate; and
‘‘(B) shall begin with the first month in which—
‘‘(i) the individual—
‘‘(I) is an institutionalized individual,
‘‘(II) is (or but for the provisions of
this subsection would be) entitled to have
medical assistance paid under the State
plan for services specified under paragraph
(1), and