I
103D CONGRESS
1ST SESSION
H. R. 73
To require the Secretary of Health and Human Services and the Attorney
General to jointly carry out a demonstration program to reduce health
care costs through the sharing by medical facilities of certain services
and equipment, notwithstanding any antitrust law to the contrary, and
to direct the Attorney General to carry out a certificate of review process
exempting eligible medical facilities from the application of certain anti-
trust laws.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. HOAGLAND introduced the following bill; which was referred jointly to the
Committees on Energy and Commerce and the Judiciary
MAY 11, 1993
Additional sponsor: Mr. DOOLEY
A BILL
To require the Secretary of Health and Human Services
and the Attorney General to jointly carry out a dem-
onstration program to reduce health care costs through
the sharing by medical facilities of certain services and
equipment, notwithstanding any antitrust law to the con-
trary, and to direct the Attorney General to carry out
a certificate of review process exempting eligible medical
facilities from the application of certain antitrust laws.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Health Services Cost
Control Act’’.
SEC. 2. PURPOSE.
It is the purpose of this Act to reduce health care
costs by encouraging cooperation between hospitals and
other medical facilities in order to contain costs and
achieve a more efficient and effective health care delivery
system through the elimination of unnecessary duplication
of expensive medical or high technology services or equip-
ment while preserving services in geographical proximity
to the communities traditionally served by the facilities.
SEC. 3. TECHNOLOGY AND SERVICES SHARING DEM-
ONSTRATION PROGRAM.
Part D of title VI of the Public Health Service Act
(42 U.S.C. 291k et seq.) is amended by adding at the end
thereof the following new section:
‘‘SEC. 647. TECHNOLOGY AND SERVICES SHARING DEM-
ONSTRATION PROGRAM.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—The Secretary and the At-
torney General (in this section jointly referred to as
the ‘Administrators’) shall jointly carry out a dem-
onstration program under which twenty three-year
grants are awarded for fiscal year 1994 to eligible
applicants to facilitate collaboration among two or
more licensed hospitals or other medical facilities
with respect to the provision of expensive, capital-in-
tensive medical technology or other highly resource-
intensive services. Such program shall be designed to
demonstrate the extent to which such agreements re-
sult in a reduction in costs to the facilities and indi-
viduals involved, in an increase in access to care for
individuals, and in improvements in the quality of
care.
‘‘(2) SERVICE AREA.—The Administrators shall
determine the region to be served by a demonstra-
tion program under paragraph (1). In carrying out
this section, the Administrators shall ensure that the
operation of such a program preserves the availabil-
ity of health services in geographical proximity to
the communities traditionally served by the facilities
participating in the program.
‘‘(b) ELIGIBLE APPLICANTS.—
‘‘(1) IN GENERAL.—To be eligible to receive a
grant under subsection (a), a medical facility or fa-
cilities shall prepare and submit to the Administra-
tors an application at such time, in such manner,
and containing such information as the Administra-
tors may require, including—
‘‘(A) a statement that such entity desires
to negotiate and enter into a voluntary agree-
ment under which such entity is operating in
one State or region for the sharing of medical
technology or services;
‘‘(B) a description of the nature and scope
of the activities contemplated under the cooper-
ative agreement;
‘‘(C) a description of the financial arrange-
ment between the entities that are parties to
the agreement;
‘‘(D) a description of the geographical area
generally served by the entities;
‘‘(E) a description of anticipated benefits
and advantages to the providers and to individ-
uals; and
‘‘(F) any other information determined ap-
propriate by the Administrators.
‘‘(2) DEVELOPMENT
OF
EVALUATION
GUIDE-
LINES.—Not later than 90 days after the date of en-
actment of this section, the Administrators shall de-
velop regulations, including criteria and evaluation
guidelines with respect to applications submitted
under paragraph (1).
‘‘(3) EVALUATIONS
OF
APPLICATIONS.—The
Administrators shall evaluate applications submitted
under paragraph (1). In determining which applica-
tions to approve for purposes of awarding grants
under subsection (a), the Administrators shall con-
sider whether the agreement described in each such
application meets the criteria and guidelines devel-
oped under paragraph (2) and is likely to result in—
‘‘(A) the enhancement of the quality of
care;
‘‘(B) the preservation of services in geo-
graphical proximity to the communities tradi-
tionally served by the applicant;
‘‘(C) improvements in the cost-effectiveness
of high-technology services by the entities in-
volved;
‘‘(D) improvements in the efficient utiliza-
tion of the entities’ resources and capital equip-
ment;
‘‘(E) the provision of services that would
not otherwise be available;
‘‘(F) the elimination of unnecessary dupli-
cation of hospital resources;
‘‘(G) a reduction in costs to individuals; or
‘‘(H) no undue harm to the care provided
individuals seeking services.
‘‘(c) ALLOCATION OF GRANT FUNDS.—
‘‘(1) IN GENERAL.—Amounts provided under a
grant awarded under subsection (a) shall be used to
facilitate collaboration among entities. Such permis-
sible uses may include reimbursements for the ex-
penses associated with specialized personnel, admin-
istrative services, support services, transportation,
and instructional programs. Funds may not be used
to purchase expensive, capital-intensive medical tech-
nology or other highly resource-intensive services not
previously owned or provided by the facility.
‘‘(2) GRANT AWARD AMOUNT.—Entities apply-
ing for grants under subsection (a) shall specify the
desired grant award amount. The Administrators
shall determine the appropriate amount in granting
such awards.
‘‘(3) GEOGRAPHIC
AND
SIZE
DIVERSITY.—In
awarding grants under this section, the Administra-
tors shall assure that, to the extent reasonably prac-
ticable, there is a sufficiently representative geo-
graphic and size distribution of grantees.
‘‘(d) MEDICAL TECHNOLOGY AND SERVICES.—
‘‘(1) IN
GENERAL.—Agreements carried out
under this section shall provide for the sharing of
medical technology or eligible services among the en-
tities which are parties to such agreements.
‘‘(2) MEDICAL TECHNOLOGY.—For purposes of
this section, the term ‘medical technology’ includes
the drugs, devices, equipment and medical and sur-
gical procedures utilized in medical care, and the or-
ganizational and support systems within which such
care is provided, that—
‘‘(A) have high capital costs or extremely
high annual operating costs; and
‘‘(B) are technologies with respect to which
there is a reasonable expectation that shared
ownership will avoid a significant degree of the
potential excess capacity of such service in the
community or region to be served under such
agreement.
‘‘(3) ELIGIBLE
SERVICES.—With respect to
services that may be shared under an agreement en-
tered into under this section, such services shall—
‘‘(A) either have high capital costs or ex-
tremely high annual operating costs; and
‘‘(B) be services with respect to which
there is a reasonable expectation that shared
Such report shall also contain the recommendations
of the Administrators with respect to future pro-
grams to facilitate cooperative agreements and rec-
ommendations for legislation.
‘‘(g) RELATION TO ANTITRUST LAWS.—
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of the antitrust laws, it shall not be considered
a violation of the antitrust laws for an entity that
receives a grant under subsection (a) to enter into
and carry out activities under a cooperative agree-
ment in accordance with this section.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘antitrust laws’ means—
‘‘(A) the Act entitled ‘‘An Act to protect
trade and commerce against unlawful restraints
and monopolies’’, approved July 2, 1890, com-
monly known as the ‘‘Sherman Act’’ (26 Stat.
209; chapter 647; 15 U.S.C. 1 et seq.);
‘‘(B) the Federal Trade Commission Act,
approved September 26, 1914 (38 Stat. 717;
chapter 311; 15 U.S.C. 41 et seq.);
‘‘(C) the Act entitled ‘‘An Act to supple-
ment existing laws against unlawful restraints
and monopolies, and for other purposes’’, ap-
proved October 15, 1914, commonly known as
the ‘‘Clayton Act’’ (38 Stat. 730; chapter 323;
15 U.S.C. 12 et seq.; 18 U.S.C. 402, 660,
3285, 3691; 29 U.S.C. 52, 53); and
‘‘(D) any State antitrust laws that would
prohibit the activities described in paragraph
(1).
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$2,500,000 for each of the fiscal years 1994 through
1996. Any appropriation pursuant to the preceding sen-
tence shall be subject to section 601 of the Congressional
Budget Act of 1974 (relating to discretionary spending
limits).’’.
SEC. 4. CERTIFICATE OF REVIEW PROCESS.
(a) ISSUANCE OF CERTIFICATE OF REVIEW.—
(1) IN GENERAL.—The Attorney General may
issue a certificate of review with a three-year term
to licensed hospitals and other medical facilities that
enter into cooperative agreements with respect to the
provision of expensive, capital-intensive medical tech-
nology or other highly resource-intensive services if
such agreements—
(A) are designed to result in a reduction in
unnecessary duplication of services, in a reduc-
tion in costs to individuals, in an increase in ac-
cess to care for individuals, or in improvements
in the quality of care;
(B) will not unreasonably enhance, sta-
bilize, or depress prices within the United
States for the equipment or services of the class
under the agreement; and
(C) will not constitute unfair methods of
competition against competitors engaged in pro-
viding the services of the class under the agree-
ment.
(2) DEADLINE
FOR
RESPONSE
TO
APPLICA-
TION.—The Attorney General shall respond to a re-
quest for a certificate of review under paragraph (1)
not later than 90 days after receiving the request.
(b) PROTECTION CONFERRED BY CERTIFICATE OF
REVIEW.—
(1) PROTECTION
FROM
CIVIL
OR
CRIMINAL
ANTITRUST ACTIONS.—Except as provided in para-
graph (2), no criminal or civil action may be brought
under the antitrust laws against a hospital or other
medical facility to which a certificate of review under
subsection (a) is issued which is based on conduct
which is specified in, and compliance with the terms
of, such certificate of review which certificate was in
effect when the conduct occurred.
(2) CIVIL ACTIONS.—
(A) Any person who has been injured as a
result of conduct engaged in under a certificate
of review under subsection (a) may bring a civil
action for injunctive relief, actual damages, the
loss of interest on actual damages, and the cost
of suit (including a reasonable attorney’s fee)
for the failure to comply with the standards of
such subsection. Any action commenced under
this subsection shall proceed as if it were an ac-
tion commenced under section 4 or section 16
of the Clayton Act, except that the standards of
subsection (a) and the remedies provided in this
paragraph shall be the exclusive standards and
remedies applicable to such action.
(B) Any action brought under subpara-
graph (A) shall be filed within two years of the
date the plaintiff has notice of the failure to
comply with the standards of subsection (a) but
in any event within 4 years after the cause of
action accrues.
(C) In any action brought under subpara-
graph (A), there shall be a presumption that
conduct which is specified in and complies with
a certificate of review does comply with the
standards of subsection (a).
(D) In any action brought under subpara-
graph (A), if the court finds that the conduct
does comply with the standards of subsection
(a), the court shall award to the hospital or
other medical facility against which the claim is
brought the cost of suit attributable to defend-
ing against the claim (including a reasonable
attorney’s fee).
(E) The Attorney General may file a suit
pursuant to section 15 of the Clayton Act (15
U.S.C. 25) to enjoin conduct threatening clear
and irreparable harm to the national interest.
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