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physical therapist services in States authorizing such
services without a physician referral and in States
that require such a physician referral. The study
shall—
(A) examine the use of and referral pat-
terns for physical therapist services for patients
age 50 and older in States that authorize such
services without a physician referral and in
States that require such a physician referral;
(B) examine the use of and referral pat-
terns for physical therapist services for patients
who are medicare beneficiaries;
(C) examine the potential effect of prohib-
iting a physician from referring patients to
physical therapy services owned by the physi-
cian and provided in the physician’s office;
(D) examine the delivery of physical thera-
pists’ services within the facilities of Depart-
ment of Defense; and
(E) analyze the potential impact on medi-
care beneficiaries and on expenditures under
the medicare program of eliminating the need
for a physician referral and physician certifi-
cation for physical therapist services under the
medicare program.
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(2) REPORT.—The Comptroller General shall
submit to Congress a report on the study conducted
under paragraph (1) by not later than 1 year after
the date of the enactment of this Act.
SEC. 514. ACCELERATED IMPLEMENTATION OF 20 PERCENT
COINSURANCE FOR HOSPITAL OUTPATIENT
DEPARTMENT (OPD) SERVICES; OTHER OPD
PROVISIONS.
(a) ACCELERATED IMPLEMENTATION OF COINSUR-
ANCE
REDUCTIONS.—Section 
1833(t)(8)(C)(ii) 
(42
U.S.C. 1395l(t)(8)(C)(ii)) is amended by striking sub-
clauses (III) through (V) and inserting the following:
‘‘(III) For procedures performed
in 2004, 45 percent.
‘‘(IV) For procedures performed
in 2005, 40 percent.
‘‘(V) For procedures performed
in 2006, 2007, 2008 and 2009, 35
percent.
‘‘(VI) For procedures performed
in 2010, 30 percent.
‘‘(VII) For procedures performed
in 2011, 25 percent.
176
‘‘(VIII) 
For 
procedures 
per-
formed in 2012 and thereafter, 20
percent.’’.
(b) TREATMENT
OF TEMPERATURE MONITORED
CRYOABLATION.—
(1) IN
GENERAL.—Section 1833(t)(6)(A)(ii)
(42 U.S.C. 1395l(t)(6)(A)(ii)) is amended by strik-
ing ‘‘or temperature monitored cryoablation’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to payment for services
furnished on or after January 1, 2003.
SEC. 515. COVERAGE OF AN INITIAL PREVENTIVE PHYS-
ICAL EXAMINATION.
(a) COVERAGE.—Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)), is amended—
(1) in subparagraph (U), by striking ‘‘and’’ at
the end;
(2) in subparagraph (V), by inserting ‘‘and’’ at
the end; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(W) an initial preventive physical exam-
ination (as defined in subsection (ww));’’.
177
(b) SERVICES DESCRIBED.—Section 1861 (42 U.S.C.
1395x) is amended by adding at the end the following new
subsection:
‘‘Initial Preventive Physical Examination
‘‘(ww) The term ‘initial preventive physical examina-
tion’ means physicians’ services consisting of a physical
examination with the goal of health promotion and disease
detection and includes items and services specified by the
Secretary in regulations.’’.
(c) WAIVER OF DEDUCTIBLE AND COINSURANCE.—
(1) DEDUCTIBLE.—The first sentence of sec-
tion 1833(b) (42 U.S.C. 1395l(b)) is amended—
(A) by striking ‘‘and’’ before ‘‘(6)’’, and
(B) by inserting before the period at the
end the following: ‘‘, and (7) such deductible
shall not apply with respect to an initial preven-
tive physical examination (as defined in section
1861(ww))’’.
(2) COINSURANCE.—Section 1833(a)(1) (42
U.S.C. 1395l(a)(1)) is amended—
(A) in clause (N), by inserting ‘‘(or 100
percent in the case of an initial preventive phys-
ical 
examination, 
as 
defined 
in 
section
1861(ww))’’ after ‘‘80 percent’’; and
178
(B) in clause (O), by inserting ‘‘(or 100
percent in the case of an initial preventive phys-
ical 
examination, 
as 
defined 
in 
section
1861(ww))’’ after ‘‘80 percent’’.
(d) PAYMENT AS PHYSICIANS’ SERVICES.—Section
1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) is amended by in-
serting ‘‘(2)(W),’’ after ‘‘(2)(S),’’.
(e) OTHER CONFORMING AMENDMENTS.—Section
1862(a) (42 U.S.C. 1395y(a)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (H);
(B) by striking the semicolon at the end of
subparagraph (I) and inserting ‘‘, and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(J) in the case of an initial preventive physical
examination, which is performed not later than 6
months after the date the individual’s first coverage
period begins under part B;’’; and
(2) in paragraph (7), by striking ‘‘or (H)’’ and
inserting ‘‘(H), or (J)’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to services furnished on or after
179
January 1, 2004, but only for individuals whose coverage
period begins on or after such date.
SEC. 516. RENAL DIALYSIS SERVICES.
(a) REPORT ON DIFFERENCES IN COSTS IN DIF-
FERENT SETTINGS.—Not later than 1 year after the date
of the enactment of this Act, the Comptroller General of
the United States shall submit to Congress a report
containing—
(1) an analysis of the differences in costs of
providing renal dialysis services under the medicare
program in home settings and in facility settings;
(2) an assessment of the percentage of overhead
costs in home settings and in facility settings; and
(3) an evaluation of whether the charges for
home dialysis supplies and equipment are reasonable
and necessary.
(b) RESTORING COMPOSITE RATE EXCEPTIONS FOR
PEDIATRIC FACILITIES.—
(1) IN GENERAL.—Section 422(a)(2) of BIPA
is amended—
(A) in subparagraph (A), by striking ‘‘and
(C)’’ and inserting ‘‘, (C), and (D)’’;
(B) in subparagraph (B), by striking ‘‘In
the case’’ and inserting ‘‘Subject to subpara-
graph (D), in the case’’; and