103D CONGRESS
2D SESSION
H. R. 5252
AN ACT
To amend the Social Security Act and related Acts to make
miscellaneous and technical amendments, and for other
purposes.
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 ‘‘Social Security Act
Amendments of 1994’’.
SEC. 2. REFERENCES IN ACT; TABLE OF CONTENTS.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
Act 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 Act, the terms
‘‘OBRA–1986’’, 
‘‘OBRA–1987’’, 
‘‘OBRA–1989’’,
‘‘OBRA–1990’’, and ‘‘OBRA–1993’’ refer to the Omnibus
Budget Reconciliation Act of 1986 (Public Law 99–509),
the Omnibus Budget Reconciliation Act of 1987 (Public
Law 100–203), the Omnibus Budget Reconciliation Act
of 1989 (Public Law 101–239), the Omnibus Budget Rec-
onciliation Act of 1990 (Public Law 101–508), and the
Omnibus Budget Reconciliation Act of 1993 (Public Law
103–66), respectively.
(c) TABLE OF CONTENTS.—The table of contents is
as follows:
Sec. 1. Short title.
Sec. 2. References in Act; table of contents.
TITLE I—MEDICARE PROVISIONS
Subtitle A—Provisions Relating to Part A
Sec. 101. Provisions relating to adjustments to standardized amounts for wages
and wage-related costs.
Sec. 102. Essential access community hospital (EACH) amendments.
Sec. 103. Provisions relating to rural health transition grant program.
Sec. 104. Psychology services in hospitals.
Sec. 105. Medicare-dependent, small rural hospitals and sole community hos-
pitals.
Sec. 106. Skilled nursing facilities.
Sec. 107. Notification of availability of hospice benefit.
Sec. 108. Clarifying expertise of individuals to serve on the Prospective Pay-
ment Assessment Commission.
Sec. 109. Authority for budget neutral adjustments for changes in payment
amounts for transfer cases.
Sec. 110. Clarification of DRG payment window expansion; miscellaneous and
technical corrections.
Subtitle B—Provisions Relating to Part B
PART I—PHYSICIANS’ SERVICES
Sec. 121. Development and implementation of resource-based methodology for
practice expenses.
Sec. 122. Geographic cost of practice index refinements.
Sec. 123. Extra-billing limits.
Sec. 124. Relative values for pediatric services.
Sec. 125. Administration of claims relating to physicians’ services.
Sec. 126. Miscellaneous and technical corrections.
PART II—DURABLE MEDICAL EQUIPMENT
Sec. 131. Certification of suppliers.
Sec. 132. Restrictions on certain marketing and sales activities.
Sec. 133. Beneficiary liability for noncovered services.
Sec. 134. Adjustments for inherent reasonableness.
Sec. 135. Miscellaneous and technical corrections.
PART III—OTHER ITEMS AND SERVICES
Sec. 141. Ambulatory surgical center services.
Sec. 142. Study of medicare coverage of patient care costs associated with clini-
cal trials of new cancer therapies.
Sec. 143. Study of annual cap on amount of medicare payment for outpatient
physical therapy and occupational therapy services.
Sec. 144. Payment of part B premium late enrollment penalties by States.
Sec. 145. Application of mammography certification requirements.
Sec. 146. Coverage of services of speech-language pathologists and audiologists.
Sec. 147. Miscellaneous and technical corrections.
Subtitle C—Provisions Relating to Parts A and B
Sec. 151. Medicare secondary payer reforms.
Sec. 152. Physician ownership and referral.
Sec. 153. Definition of FMGEMS examination for payment of direct graduate
medical education.
Sec. 154. Qualified medicare beneficiary outreach.
Sec. 155. Hospital agreements with organ procurement organizations.
Sec. 156. Peer review organizations.
Sec. 157. Health maintenance organizations.
Sec. 158. Home health agencies.
Sec. 159. Permanent 
extension 
of 
authority 
to 
contract 
with 
fiscal
intermediaries and carriers on other than a cost basis.
Sec. 160. Miscellaneous and technical corrections.
Subtitle D—Provisions Relating to Medicare Supplemental Insurance Policies
Sec. 171. Standards for medicare supplemental insurance policies.
Sec. 172. 6-month extension of period for issuance of medicare select policies.
TITLE II—MATERNAL AND CHILD HEALTH SERVICES BLOCK
GRANT PROGRAM
Subtitle A—Child Welfare, Foster Care, Adoption
Sec. 201. Increase in authorization of appropriations for the Maternal and
Child Health Services Block Grant Program.
Sec. 202. Required protections for foster children.
Sec. 203. Conformity reviews.
Sec. 204. States required to report on measures taken to comply with the In-
dian Child Welfare Act.
Sec. 205. Child welfare traineeships.
Sec. 206. Dispositional hearing.
Sec. 207. Elimination of foster care ceilings and of authority to transfer unused
foster care funds to child welfare services programs.
Sec. 208. Demonstration projects.
Sec. 209. Placement accountability.
Sec. 210. Payments of State claims for foster care and adoption assistance.
Sec. 211. Effect of failure to carry out State plan.
Subtitle B—Child Support Enforcement
Sec. 212. Reports to credit bureaus on persons delinquent in child support pay-
ments.
Sec. 213. Technical amendments to provision on State paternity establishment
programs.
Sec. 214. Agreement to assist in locating missing children under the parent lo-
cator service.
Subtitle C—Supplemental Security Income
Sec. 221. Definition of disability for children under age 18 applied to all indi-
viduals under age 18.
Subtitle D—Aid to Families With Dependent Children
Sec. 231. Simplification of income and eligibility verification system.
Sec. 232. Measurement and reporting of welfare receipt.
Sec. 233. New Hope demonstration project.
Sec. 234. Delay in requirement that outlying areas operate an AFDC–up pro-
gram.
Sec. 235. State option to use retrospective budgeting without monthly report-
ing.
Subtitle E—JOBS Program
Sec. 241. Expansion of coverage for Indian tribes.
Sec. 242. Report to the Congress with respect to performance standards in the
JOBS program.
Subtitle F—Other Provisions
Sec. 261. Extension of demonstration to expand job opportunities.
Sec. 262. Early childhood development projects.
Sec. 263. Reallocation of funds under title XX for empowerment and enterprise
grants.
Sec. 264. Corrections related to the income security and human resources pro-
visions of OBRA–1990.
Sec. 265. Technical corrections related to the human resource and income secu-
rity provisions of OBRA–1989.
Sec. 266. Technical correction related to the human resource and income secu-
rity provisions of OBRA–1993.
Sec. 267. Elimination of obsolete provisions relating to treatment of the earned
income tax credit.
Sec. 268. Redesignation of certain provisions.
TITLE I—MEDICARE PROVISIONS
Subtitle A—Provisions Relating to
Part A
SEC. 101. PROVISIONS RELATING TO ADJUSTMENTS TO
STANDARDIZED AMOUNTS FOR WAGES AND
WAGE-RELATED COSTS.
(a) USE OF OCCUPATIONAL MIX IN GUIDELINES FOR
DETERMINATION OF AREA WAGE INDEX.—
(1) IN GENERAL.—Section 1886(d)(10)(D)(i)(I)
(42 U.S.C. 1395ww(d)(10)(D)(i)(I)) is amended by
inserting ‘‘(to the extent the Secretary determines
appropriate)’’ after ‘‘taking into account’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect as if included in
the enactment of OBRA–1989.
(b) CONFORMING AMENDMENTS RELATING TO GEO-
GRAPHIC AREA USED TO DETERMINE WAGE INDEX AP-
PLICABLE TO HOSPITAL.—(1) Section 1886(d)(8)(C) (42
U.S.C. 1395ww(d)(8)(C)), as amended by section
13501(b)(1) of OBRA–1993, is amended—
(A) in clause (iv), by striking ‘‘paragraph (1)’’
and inserting ‘‘paragraph (10)’’; and
(B) by adding at the end the following new
clause:
‘‘(v) This subparagraph shall apply with respect to
discharges occurring in a fiscal year only if the Secretary
uses a method for making adjustments to the DRG pro-
spective payment rate for area differences in hospital wage
levels under paragraph (3)(E) for the fiscal year that is
based on the use of Metropolitan Statistical Area classi-
fications.’’.
(2) Section 1886(d)(10) (42 U.S.C. 1395ww(d)(10))
is amended—
(A) in subparagraph (C)(i)(II), by striking ‘‘the
area wage index applicable’’ and inserting ‘‘the fac-
tor used to adjust the DRG prospective payment
rate for area differences in hospital wage levels that
applies’’; and
(B) in subparagraph (D)—
(i) by redesignating clause (ii) as clause
(iii), and
(ii) by inserting after clause (i) the follow-
ing new clause:
‘‘(ii) Notwithstanding clause (i), if the Secretary uses
a method for making adjustments to the DRG prospective
payment rate for area differences in hospital wage levels
under paragraph (3)(E) that is not based on the use of
Metropolitan Statistical Area classifications, the Secretary
may revise the guidelines published under clause (i) to the
extent such guidelines are used to determine the appro-
priateness of the geographic area in which the hospital is
determined to be located for purposes of making such ad-
justments.’’.
(c) ADJUSTMENT OF LABOR AND NON-LABOR POR-
TIONS
OF
STANDARDIZED
AMOUNTS.—Section
1886(d)(3)(A)(iii) (42 U.S.C. 1395ww(d)(3)(A)(iii)) is
amended by adding at the end the following: ‘‘For dis-
charges occurring on or after October 1, 1994, the Sec-
retary 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 of all standard-
ized amounts.’’.
SEC. 
102. 
ESSENTIAL 
ACCESS 
COMMUNITY 
HOSPITAL
(EACH) AMENDMENTS.
(a) TREATMENT OF INPATIENT HOSPITAL SERVICES
PROVIDED IN RURAL PRIMARY CARE HOSPITALS.—
(1) IN
GENERAL.—Section 1820(f)(1)(F) (42
U.S.C. 1395i–4(f)(1)(F)) is amended to read as fol-
lows:
‘‘(F) subject to paragraph (4), provides not
more than 6 inpatient beds (meeting such con-
ditions as the Secretary may establish) for pro-
viding inpatient care to patients requiring sta-
bilization before discharge or transfer to a hos-
pital, except that the facility may not provide
any inpatient hospital services—
‘‘(i) to any patient whose attending
physician does not certify that the patient
may reasonably be expected to be dis-
charged or transferred to a hospital within
72 hours of admission to the facility; or
‘‘(ii) consisting of surgery or any
other service requiring the use of general
anesthesia (other than surgical procedures
specified by the Secretary under section
1833(i)(1)(A)), unless the attending physi-
cian certifies that the risk associated with
transferring the patient to a hospital for
such services outweighs the benefits of
transferring the patient to a hospital for
such services.’’.
(2) LIMITATION
ON
AVERAGE
LENGTH
OF
STAY.—Section 1820(f) (42 U.S.C. 1395i–4(f)) is
amended by adding at the end the following new
paragraph:
‘‘(4) LIMITATION ON AVERAGE LENGTH OF IN-
PATIENT STAYS.—The Secretary may terminate a
designation of a rural primary care hospital under
paragraph (1) if the Secretary finds that the average
length of stay for inpatients at the facility during
the previous year in which the designation was in ef-
fect exceeded 72 hours. In determining the compli-
ance of a facility with the requirement of the pre-
vious sentence, there shall not be taken into account
periods of stay of inpatients in excess of 72 hours
to the extent such periods exceed 72 hours because
transfer to a hospital is precluded because of inclem-
ent weather or other emergency conditions.’’.
(3) 
CONFORMING
AMENDMENT.—Section
1814(a)(8) (42 U.S.C. 1395f(a)(8)) is amended by
striking ‘‘such services’’ and all that follows and in-
serting ‘‘the individual may reasonably be expected
to be discharged or transferred to a hospital within
72 hours after admission to the rural primary care
hospital.’’.
(4) GAO REPORTS.—Not later than 2 years
after the date of the enactment of this Act, the
Comptroller General shall submit reports to Con-
gress on—
(A) the application of the requirements
under section 1820(f) of the Social Security Act
(as amended by this subsection) that rural pri-
mary care hospitals provide inpatient care only
to those individuals whose attending physicians
certify may reasonably be expected to be dis-
charged within 72 hours after admission and
maintain an average length of inpatient stay
during a year that does not exceed 72 hours;
and
(B) the extent to which such requirements
have resulted in such hospitals providing inpa-
tient care beyond their capabilities or have lim-
ited the ability of such hospitals to provide
needed services.
(b) DESIGNATION OF HOSPITALS.—
(1) PERMITTING DESIGNATION OF HOSPITALS
LOCATED IN URBAN AREAS.—
(A) IN
GENERAL.—Section 1820 (42
U.S.C. 1395i–4) is amended—
(i) by striking paragraph (1) of sub-
section (e) and redesignating paragraphs
(2) through (6) as paragraphs (1) through
(5);
(ii) in subsection (e)(1)(A) (as redes-
ignated by subparagraph (A))—
(I) by striking ‘‘is located’’ and
inserting ‘‘except in the case of a hos-
pital located in an urban area, is lo-
cated’’,
(II) by striking ‘‘, (ii)’’ and in-
serting ‘‘or (ii)’’, and
(III) by striking ‘‘or (iii)’’ and all
that follows through ‘‘section,’’; and
(iii) in subsection (i)(1)(B), by strik-
ing ‘‘paragraph (3)’’ and inserting ‘‘para-
graph (2)’’.
(B) NO CHANGE IN MEDICARE PROSPEC-
TIVE
PAYMENT.—Section 1886(d)(5)(D) (42
U.S.C. 1395ww(d)(5)(D)) is amended—
(i) in clause (iii)(III), by inserting ‘‘lo-
cated in a rural area and’’ after ‘‘that is’’,
and
(ii) in clause (v), by inserting ‘‘located
in a rural area and’’ after ‘‘in the case of
a hospital’’.
(2) PERMITTING HOSPITALS LOCATED IN AD-
JOINING STATES TO PARTICIPATE IN STATE PRO-
GRAM.—
(A) IN
GENERAL.—Section 1820 (42
U.S.C. 1395i–4) is amended—
(i) by redesignating subsection (k) as
subsection (l); and
(ii) by inserting after subsection (j)
the following new subsection:
‘‘(k) ELIGIBILITY OF HOSPITALS NOT LOCATED IN
PARTICIPATING
STATES.—Notwithstanding any other
provision of this section—
‘‘(1) for purposes of including a hospital or fa-
cility as a member institution of a rural health net-
work, a State may designate a hospital or facility
that is not located in the State as an essential access
community hospital or a rural primary care hospital
if the hospital or facility is located in an adjoining
State and is otherwise eligible for designation as
such a hospital;
‘‘(2) the Secretary may designate a hospital or
facility that is not located in a State receiving a
grant under subsection (a)(1) as an essential access
community hospital or a rural primary care hospital
if the hospital or facility is a member institution of
a rural health network of a State receiving a grant
under such subsection; and
‘‘(3) a hospital or facility designated pursuant
to this subsection shall be eligible to receive a grant
under subsection (a)(2).’’.
(B) CONFORMING AMENDMENTS.—(i) Sec-
tion 1820(c)(1) (42 U.S.C. 1395i–4(c)(1)) is
amended by striking ‘‘paragraph (3)’’ and in-
serting ‘‘paragraph (3) or subsection (k)’’.
(ii) Paragraphs (1)(A) and (2)(A) of sec-
tion 1820(i) (42 U.S.C. 1395i–4(i)) are each
amended—
(I) in clause (i), by striking ‘‘(a)(1)’’
and inserting ‘‘(a)(1) (except as provided
in subsection (k))’’, and
(II) in clause (ii), by striking ‘‘sub-
paragraph (B)’’ and inserting ‘‘subpara-
graph (B) or subsection (k)’’.
(c) SKILLED NURSING SERVICES IN RURAL PRIMARY
CARE HOSPITALS.—Section 1820(f)(3) (42 U.S.C. 1395i–
4(f)(3)) is amended by striking ‘‘because the facility’’ and
all that follows and inserting the following: ‘‘because, at
the time the facility applies to the State for designation
as a rural primary care hospital, there is in effect an
agreement between the facility and the Secretary under
section 1883 under which the facility’s inpatient hospital
facilities are used for the furnishing of extended care serv-
ices, except that the number of beds used for the furnish-
ing of such services may not exceed the total number of
licensed inpatient beds at the time the facility applies to
the State for such designation (minus the number of inpa-
tient beds used for providing inpatient care pursuant to
paragraph (1)(F)). For purposes of the previous sentence,
the number of beds of the facility used for the furnishing
of extended care services shall not include any beds of a
unit of the facility that is licensed as a distinct-part skilled
nursing facility at the time the facility applies to the State
for designation as a rural primary care hospital.’’.
(d) DEADLINE FOR DEVELOPMENT OF PROSPECTIVE
PAYMENT SYSTEM
FOR INPATIENT RURAL PRIMARY
CARE
HOSPITAL
SERVICES.—Section 1814(l)(2) (42
U.S.C. 1395f(l)(2)) is amended by striking ‘‘January 1,
1993’’ and inserting ‘‘January 1, 1996’’.
(e) PAYMENT
FOR OUTPATIENT RURAL PRIMARY
CARE HOSPITAL SERVICES.—
(1) IMPLEMENTATION
OF
PROSPECTIVE
PAY-
MENT
SYSTEM.—Section 
1834(g) 
(42 
U.S.C.
1395m(g)) is amended—
(A) in paragraph (1), by striking ‘‘during
a year before 1993’’ and inserting ‘‘during a
year before the prospective payment system de-
scribed in paragraph (2) is in effect’’; and
(B) in paragraph (2), by striking ‘‘January
1, 1993,’’ and inserting ‘‘January 1, 1996,’’.
(2) NO USE OF CUSTOMARY CHARGE IN DETER-
MINING PAYMENT.—Section 1834(g)(1) (42 U.S.C.
1395m(g)(1)) is amended by adding at the end the
following new flush sentence:
‘‘The amount of payment shall be determined under
either method without regard to the amount of the
customary or other charge.’’.
(f) CLARIFICATION
OF PHYSICIAN STAFFING RE-
QUIREMENT FOR RURAL PRIMARY CARE HOSPITALS.—
Section 1820(f)(1)(H) (42 U.S.C. 1395i–4(f)(1)(H)) is
amended by striking the period and inserting the follow-
ing: ‘‘, except that in determining whether a facility meets
the requirements of this subparagraph, subparagraphs (E)
and (F) of that paragraph shall be applied as if any ref-
erence to a ‘physician’ is a reference to a physician as de-
fined in section 1861(r)(1).’’.
(g) TECHNICAL AMENDMENTS RELATING TO PART
A DEDUCTIBLE, COINSURANCE, AND SPELL
OF ILL-
NESS.—(1) Section 1812(a)(1) (42 U.S.C. 1395d(a)(1))
is amended—
(A) by striking ‘‘inpatient hospital services’’ the
first place it appears and inserting ‘‘inpatient hos-
pital services or inpatient rural primary care hos-
pital services’’;
(B) by striking ‘‘inpatient hospital services’’ the
second place it appears and inserting ‘‘such serv-
ices’’; and
(C) by striking ‘‘and inpatient rural primary
care hospital services’’.
(2) Sections 1813(a) and 1813(b)(3)(A) (42 U.S.C.
1395e(a), 1395e(b)(3)(A)) are each amended by striking
‘‘inpatient hospital services’’ each place it appears and in-
serting ‘‘inpatient hospital services or inpatient rural pri-
mary care hospital services’’.
(3) 
Section 
1813(b)(3)(B) 
(42 
U.S.C.
1395e(b)(3)(B)) is amended by striking ‘‘inpatient hos-
pital services’’ and inserting ‘‘inpatient hospital services,
inpatient rural primary care hospital services’’.
(4) Section 1861(a) (42 U.S.C. 1395x(a)) is amend-
ed—
(A) in paragraph (1), by striking ‘‘inpatient
hospital services’’ and inserting ‘‘inpatient hospital
services, inpatient rural primary care hospital serv-
ices’’; and
(B) in paragraph (2), by striking ‘‘hospital’’
and inserting ‘‘hospital or rural primary care hos-
pital’’.
(h) AUTHORIZATION OF APPROPRIATIONS.—Section
1820(l) (42 U.S.C. 1395i–4(l)), as redesignated by sub-
section (c)(2)(A), is amended by striking ‘‘1990, 1991,
and 1992’’ and inserting ‘‘1990 through 1997’’.
(i) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 103. PROVISIONS RELATING TO RURAL HEALTH TRAN-
SITION GRANT PROGRAM.
(a) ELIGIBILITY OF RURAL PRIMARY CARE HOS-
PITALS FOR GRANTS.—
(1) 
IN
GENERAL.—Section 
4005(e)(2) 
of
OBRA–1987 is amended in the matter preceding
subparagraph (A) by inserting ‘‘any rural primary
care hospital designated by the Secretary under sec-
tion 1820(i)(2) of the Social Security Act, or’’ after
‘‘means’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to grants made on or
after October 1, 1994.
(b) EXTENSION OF AUTHORIZATION OF APPROPRIA-
TIONS.—Section 4005(e)(9) of OBRA–1987 is amended—
(1) by striking ‘‘1989 and’’ and inserting
‘‘1989,’’; and
(2) by striking ‘‘1992’’ and inserting ‘‘1992
and $30,000,000 for each of fiscal years 1993
through 1997’’.
(c) FREQUENCY OF REQUIRED REPORTS.—Section
4008(e)(8)(B) of OBRA–1987 is amended by striking
‘‘every 6 months’’ and inserting ‘‘every 12 months’’.
SEC. 104. PSYCHOLOGY SERVICES IN HOSPITALS.
Section 1861(e)(4) (42 U.S.C. 1395x(e)(4)) is
amended by striking ‘‘physician;’’ and inserting ‘‘physi-
cian, except that a patient receiving qualified psychologist
services (as defined in subsection (ii)) may be under the
care of a clinical psychologist with respect to such services
to the extent permitted under State law;’’.
SEC. 105. MEDICARE-DEPENDENT, SMALL RURAL HOS-
PITALS AND SOLE COMMUNITY HOSPITALS.
(a) MEDICARE DEPENDENT, SMALL RURAL HOS-
PITALS.—
(1) 
CLARIFICATION
OF
ADDITIONAL
PAY-
MENT.—Section 1886(d)(5)(G)(ii)(I) (42 U.S.C.
1395ww(d)(5)(G)(ii)(I)), as amended by section
13501(e)(1) of OBRA–1993, is amended by striking
‘‘the first 3 12-month cost reporting periods that
begin’’ and inserting ‘‘the 36-month period begin-
ning with the first day of the cost reporting period
that begins’’.
(2) CONFORMING TARGET AMOUNTS TO EXTEN-
SION
OF
ADDITIONAL
PAYMENTS.—Section
1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)) is
amended in the matter preceding clause (i) by strik-
ing ‘‘March 31, 1993’’ and inserting ‘‘September 30,
1994’’.
(b) 
CLARIFICATION
OF
UPDATES.—Section
1886(b)(3)(B)(iv)(II) 
(42 
U.S.C.
1395ww(b)(3)(B)(iv)(II)), 
as 
added 
by 
section
13501(a)(2) of OBRA–1993, is amended by striking
‘‘(taking into account’’ and all that follows through
‘‘1994)’’ and inserting ‘‘(adjusted to exclude any portion
of a cost reporting period beginning during fiscal year
1993 for which the applicable percentage increase is deter-
mined under subparagraph (I))’’.
SEC. 106. SKILLED NURSING FACILITIES.
(a) CONSTRUCTION
OF 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 ad-
(1) SUSPENSION
OF
DECERTIFICATION
OF
NURSES AIDE TRAINING AND COMPETENCY EVALUA-
TION PROGRAMS BASED ON EXTENDED SURVEYS.—
(A) 
IN
GENERAL.—Section
1819(f)(2)(B)(iii)(I)(b) 
(42 
U.S.C. 
1395i–
3(f)(2)(B)(iii)(I)(b)) is amended by striking the
semicolon and inserting the following: ‘‘, unless
the survey shows that the facility is in compli-
ance with the requirements of subsections (b),
(c), and (d) of this section;’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall take effect as
if included in the enactment of OBRA–1990.
(2) REQUIREMENTS
FOR
CONSULTANTS
CON-
DUCTING REVIEWS ON USE OF DRUGS.—
(A) IN GENERAL.—Section 1819(c)(1)(D)
(42 U.S.C. 1395i–3(c)(1)(D)) is amended by
adding at the end the following sentence: ‘‘In
determining whether such a consultant is quali-
fied to conduct reviews under the preceding sen-
tence, the Secretary shall take into account the
needs of nursing facilities under this title to
have access to the services of such a consultant
on a timely basis.’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall take effect as
if included in the enactment of OBRA–1987.
(3) INCREASE IN MINIMUM AMOUNT REQUIRED
FOR SEPARATE DEPOSIT OF PERSONAL FUNDS.—
(A) 
IN
GENERAL.—Section
1819(c)(6)(B)(i) 
(42 
U.S.C. 
1395i–
3(c)(6)(B)(i)) is amended by striking ‘‘$50’’
and inserting ‘‘$100’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall take effect
January 1, 1995.
(4) DUE
PROCESS
PROTECTIONS
FOR
NURSE
AIDES.—
(A) PROHIBITING STATE FROM INCLUDING
UNDOCUMENTED
ALLEGATIONS
IN
NURSES
AIDE
REGISTRY.—Section 1819(e)(2)(B) (42
U.S.C. 1395i–3(e)(2)(B)) is amended by strik-
ing the period at the end of the first sentence
and inserting the following: ‘‘, but shall not in-
clude any allegations of resident abuse or ne-
glect or misappropriation of resident property
that are not specifically documented by the
State under such subsection.’’.
(B) DUE
PROCESS
REQUIREMENTS
FOR
REBUTTING
ALLEGATIONS.—Section
1819(g)(1)(C) (42 U.S.C. 1395i–3(g)(1)(C)) is
amended by striking the second sentence and
inserting the following: ‘‘The State shall, after
providing the individual involved with a written
notice of the allegations (including a statement
of the availability of a hearing for the individual
to rebut the allegations) and the opportunity
for a hearing on the record, make a written
finding as to the accuracy of the allegations.’’.
(C) EFFECTIVE DATE.—The amendments
made by this paragraph shall take effect Janu-
ary 1, 1995.
(d) CORRECTIONS RELATING TO SECTION 4008.—
(1) Section 1819(b)(5)(D) (42 U.S.C. 1395i–
3(b)(5)(D)), as amended by section 4008(h)(1)(D)
of OBRA–1990, is amended by striking the comma
before ‘‘or a new competency evaluation program.’’.
(2) Section 1819(b)(5)(G) (42 U.S.C. 1395i–
3(b)(5)(G)) is amended by striking ‘‘or licensed or
certified social worker’’ and inserting ‘‘licensed or
certified social worker, registered respiratory thera-
pist, or certified respiratory therapy technician’’.
(3) Section 1819(f)(2)(B)(i) (42 U.S.C. 1395i–
3(f)(2)(B)(i)) is amended by striking ‘‘facilities,’’
and inserting ‘‘facilities (subject to clause (iii)),’’.
(4) Section 1819(f)(2)(B)(iii)(I)(c) (42 U.S.C.
1395i–3(f)(2)(B)(iii)(I)(c)) is amended by striking
‘‘clauses’’ each place it appears and inserting
‘‘clause’’.
(5) Section 1819(g)(5)(B) (42 U.S.C. 1395i–
3(g)(5)(B)) is amended by striking ‘‘paragraphs’’
and inserting ‘‘paragraph’’.
(6) Section 4008(h)(1)(F)(ii) of OBRA–1990 is
amended—
(A) by striking ‘‘The amendments’’ and in-
serting ‘‘(I) The amendments’’;
(B) by striking ‘‘nursing facility’’ each
place it appears and inserting ‘‘skilled nursing
facility’’;
(C) 
by 
redesignating 
subclauses 
(I)
through (V) as items (aa) through (ee); and
(D) by adding at the end the following new
subclause:
‘‘(II) Notwithstanding subclause (I)
and subject to section 1819(f)(2)(B)(iii)(I)
of the Social Security Act (as amended by
clause (i)), a State may approve a training
and competency evaluation program or a
competency evaluation program offered by
or in a skilled nursing facility described in
subclause (I) if, during the previous 2
years, item (aa), (bb), (cc), (dd), or (ee) of
subclause (I) did not apply to the facil-
ity.’’.
(7) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect as if included in
the enactment of OBRA–1990.
SEC. 107. NOTIFICATION OF AVAILABILITY OF HOSPICE
BENEFIT.
(a) IN
GENERAL.—Section 1861(ee)(2)(D) (42
U.S.C. 1395x(ee)(2)(D)) is amended by inserting ‘‘, in-
cluding hospice services,’’ after ‘‘post-hospital services’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
the first day of the first month beginning more than one
year after the date of the enactment of this Act.
SEC. 108. CLARIFYING EXPERTISE OF INDIVIDUALS TO
SERVE ON THE PROSPECTIVE PAYMENT AS-
SESSMENT COMMISSION.
Section 1886(e)(6)(B) (42 U.S.C. 1395ww(e)(6)(B))
is amended by striking ‘‘hospital reimbursement, hospital
financial management’’ and inserting ‘‘health facility man-
agement, reimbursement of health facilities or other pro-
viders of services which reflect the scope of the Commis-
sion’s responsibilities’’.
SEC. 109. AUTHORITY FOR BUDGET NEUTRAL ADJUST-
MENTS FOR CHANGES IN PAYMENT AMOUNTS
FOR TRANSFER CASES.
Section 1886(d)(5)(I) (42 U.S.C. 1395ww(d)(5)) is
amended—
(1) by inserting ‘‘(i)’’ after ‘‘(I)’’; and
(2) by adding at the end the following new
clause:
‘‘(ii) In making adjustments under clause (i) for
transfer cases (as defined by the Secretary) in a fiscal
year, the Secretary may make adjustments to each of the
average standardized amounts determined under para-
graph (3) to assure that the aggregate payments made
under this subsection for such fiscal year are not greater
or lesser than those that would have otherwise been made
in such fiscal year.’’.
SEC. 110. CLARIFICATION OF DRG PAYMENT WINDOW EX-
PANSION; MISCELLANEOUS AND TECHNICAL
CORRECTIONS.
(a) CLARIFICATION OF DRG PAYMENT WINDOW EX-
PANSION.—The first sentence of section 1886(a)(4) (42
U.S.C. 1395ww(a)(4)) is amended by inserting ‘‘(or, in the
case of a hospital that is not a subsection (d) hospital,
during the 1 day)’’ after ‘‘3 days’’.
(b) TECHNICAL CORRECTION RELATING TO RESI-
DENT
ASSESSMENT
IN
NURSING
HOMES.—Section
1819(b)(3)(C)(i)(I) (42 U.S.C. 1395i–3(b)(3)(C)(i)(I)) is
amended by striking ‘‘not later than’’ before ‘‘14 days’’.
(c) TECHNICAL CORRECTION RELATING TO APPLICA-
BLE ADJUSTMENT FACTOR
FOR INDIRECT MEDICAL
EDUCATION
ADJUSTMENT.—Section 1886(d)(5)(B)(ii)
(42 U.S.C. 1395ww(d)(5)(B)(ii)) is amended by striking
‘‘May 1, 1986,’’ and inserting ‘‘October 1, 1988,’’.
(d) 
CLERICAL
CORRECTIONS.—(1) 
Section
1814(i)(1)(C)(i) (42 U.S.C. 1395f(i)(1)(C)(i)) is amended
by striking ‘‘September 30, 1990,,’’ and inserting ‘‘Sep-
tember 30, 1990,’’.
(2) 
Section 
1816(f)(2)(A)(ii) 
(42 
U.S.C.
1396h(f)(2)(A)(ii)) is amended by striking ‘‘such agency’’
and inserting ‘‘such agency’s’’.
Subtitle B—Provisions Relating to
Part B
PART I—PHYSICIANS’ SERVICES
SEC. 121. DEVELOPMENT AND IMPLEMENTATION OF RE-
SOURCE-BASED METHODOLOGY FOR PRAC-
TICE EXPENSES.
(a) DEVELOPMENT.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall develop a methodology for im-
plementing in 1998 a resource-based system for de-
termining practice expense relative value units for
each physicians’ service. The methodology utilized
shall recognize the staff, equipment, and supplies
used in the provision of various medical and surgical
services in various settings.
(2) REPORT.—The Secretary shall transmit a
report by June 30, 1996, on the methodology devel-
oped under paragraph (1) to the Committees on
Ways and Means and 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.
(b) IMPLEMENTATION.—
(1) IN
GENERAL.—Section 1848(c)(2)(C)(ii)
(42 U.S.C. 1395w–4(c)(2)(C)(ii)) is amended—
(A) by inserting ‘‘for the service for years
before 1998’’ before ‘‘equal to’’,
(B) by striking the period at the end of
subclause (II) and inserting a comma, and
(C) by adding after and below subclause
(II) the following:
‘‘and for years beginning with 1998 based
on the relative practice expense resources
involved in furnishing the service.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1848(c)(3)(C)(ii) (42 U.S.C. 1395w–4(c)(3)(C)(ii))
is amended by striking ‘‘The practice’’ and inserting
‘‘For years before 1998, the practice’’.
(3) APPLICATION OF CERTAIN PROVISIONS.—In
implementing the amendment made by paragraph
(1)(C), the provisions of clauses (ii)(II) and (iii) of
section 1848(c)(2)(B) of the Social Security Act
shall apply in the same manner as they apply to ad-
justments under clause (ii)(I) of such section.
SEC. 122. GEOGRAPHIC COST OF PRACTICE INDEX REFINE-
MENTS.
(a) REQUIRING CONSULTATION WITH REPRESENTA-
TIVES OF PHYSICIANS IN REVIEWING GEOGRAPHIC AD-
JUSTMENT FACTORS.—Section 1848(e)(1)(C) (42 U.S.C.
1395w–4(e)(1)(C)) is amended by striking ‘‘shall review’’
and inserting ‘‘shall, in consultation with appropriate rep-
resentatives of physicians, review’’.
(b) USE OF MOST RECENT DATA IN GEOGRAPHIC
ADJUSTMENT.—Section 1848(e)(1) (42 U.S.C. 1395w–
4(e)(1)) is amended by adding at the end the following
new subparagraph:
‘‘(D) USE OF RECENT DATA.—In estab-
lishing indices and index values under this
paragraph, the Secretary shall use the most re-
cent data available relating to practice ex-
penses, malpractice expenses, and physician
work effort in different fee schedule areas.’’.
(c) REPORT ON REVIEW PROCESS.—Not later than
1 year after the date of the enactment of this Act, the
Secretary of Health and Human Services shall study and
report to the Committee on Finance of the Senate and
the Committee on Ways and Means and the Committee
on Energy and Commerce of the House of Representatives
on—
(1) the data necessary to review and revise the
indices established under section 1848(e)(1)(A) of
the Social Security Act, including—
(A) the shares allocated to physicians’
work effort, practice expenses (other than mal-
practice expenses), and malpractice expenses;
(B) the weights assigned to the input com-
ponents of such shares; and
(C) the index values assigned to such com-
ponents;
(2) any limitations on the availability of data
necessary to review and revise such indices at least
every three years;
(3) ways of addressing such limitations, with
particular attention to the development of alternative
data sources for input components for which current
index values are based on data collected less fre-
quently than every three years; and
(4) the costs of developing more accurate and
timely data.
SEC. 123. EXTRA-BILLING LIMITS.
(a) ENFORCEMENT OF LIMITS.—Section 1848(g) (42
U.S.C. 1395w–4(g)), as amended by section 13517(a) of
OBRA–1993, is amended—
(1) by amending paragraph (1) to read as fol-
lows:
‘‘(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
1842(i)(2)) who does not accept payment on an
assignment-related basis for a physician’s serv-
ice furnished with respect to an individual en-
rolled 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 pay-
ment of any amounts billed for the service
in excess 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 actual 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 service in violation of clause (i), the phy-
sician, supplier, or other person shall pro-
vide on a timely basis a refund to the indi-
vidual 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
by the individual to the physician.
‘‘(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
reference in such section to a physician is
deemed also to include a reference to a supplier
or other person under this subparagraph.
‘‘(C) TIMELY BASIS.—For purposes of this
paragraph, a correction of a bill for an excess
charge or refund of an amount with respect to
a violation of subparagraph (A)(i) in the case of
a service is considered to be provided ‘on a
timely basis’, if the reduction or refund is made
not later than 30 days after the date the physi-
cian, supplier, or other person is notified by the
carrier under this part of such violation and of
the requirements of subparagraph (A).’’; and
(2) in paragraph (3)(B)—
(A) by inserting after the first sentence the
following: ‘‘No person is liable for payment of
any amounts billed for such a service in viola-
tion of the previous sentence.’’, and
(B) in the last sentence, by striking ‘‘pre-
vious sentence’’ and inserting ‘‘first sentence’’.
(b) CLARIFICATION
OF MANDATORY ASSIGNMENT
RULES FOR CERTAIN PRACTITIONERS.—
(1) IN GENERAL.—Section 1842(b) (42 U.S.C.
1395u(b)), as amended by section 126(e), is amend-
ed by adding at the end the following new para-
graph:
‘‘(18)(A) Payment for any service furnished by a
practitioner described in subparagraph (C) and for which
payment 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 coinsur-
ance amounts applicable under this part. No person is lia-
ble for payment of any amounts billed for such a service
in violation of the previous sentence. If a practitioner or
other person knowingly and willfully bills (or collects an
amount) for such a service in violation of such sentence,
the Secretary 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 ap-
plies with respect to a physician. Paragraph (4) of sub-
section (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-
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
subparagraph (B) and redesignating sub-
paragraph (C) as subparagraph (B);
(ii) by striking subsection (p); and
(iii) in subsection (r), by striking
paragraph (3) and redesignating para-
graph (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 BEN-
EFITS.—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’’,
(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 concern-
ing 
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
respect 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
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 ‘‘information on the
extent to which actual charges exceed limiting charges, the
number and types of services involved, and the average
amount of excess charges and information’’ after ‘‘report
to the Congress’’.
(e) MISCELLANEOUS
AND
TECHNICAL
AMEND-
MENTS.—Section 
1833(h)(5)(D) 
(42 
U.S.C.
1395l(h)(5)(D)) is amended—
(1) by striking ‘‘paragraphs (2) and (3)’’ and
by inserting ‘‘paragraph (2)’’; and
(2) by adding at the end the following: ‘‘Para-
graph (4) of such section shall apply in this sub-
paragraph in the same manner as such paragraph
applies to such section.’’.
(f) EFFECTIVE DATES.—
(1) 
ENFORCEMENT; 
MISCELLANEOUS
AND
TECHNICAL AMENDMENTS.—The amendments made
by subsections (a) and (e) shall apply to services fur-
nished on or after the date of the enactment of this
Act; except that the amendments made by sub-
section (a) shall not apply to services of a
nonparticipating supplier or other person furnished
before January 1, 1995.
(2) PRACTITIONERS.—The amendments made
by subsection (b) shall apply to services furnished on
or after January 1, 1995.
(3) EOMBS.—The amendments made by sub-
section (c)(1) shall apply to explanations of benefits
provided on or after July 1, 1995.
(4) CARRIER
DETERMINATIONS.—The amend-
ments made by subsection (c)(2) shall apply to con-
tracts as of January 1, 1995.
(5) REPORT.—The amendment made by sub-
section (d) shall apply to reports for years beginning
with 1995.
SEC. 124. RELATIVE VALUES FOR PEDIATRIC SERVICES.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall fully develop, by not later than July
1, 1995, relative values for the full range of pediatric phy-
sicians’ services which are consistent with the relative val-
ues developed for other physicians’ services under section
1848(c) of the Social Security Act. In developing such val-
ues, the Secretary shall conduct such refinements as may
be necessary to produce appropriate estimates for such rel-
ative values.
(b) STUDY.—
(1) IN GENERAL.—The Secretary shall conduct
a study of the relative values for pediatric and other
services to determine whether there are significant
variations in the resources used in providing similar
services to different populations. In conducting such
study, the Secretary shall consult with appropriate
organizations representing pediatricians and other
physicians and physical and occupational therapists.
(2) REPORT.—Not later than July 1, 1995, the
Secretary shall submit to Congress a report on the
study conducted under paragraph (1). Such report
shall include any appropriate recommendations re-
garding needed changes in coding or other payment
policies to ensure that payments for pediatric serv-
ices appropriately reflect the resources required to
provide these services.
SEC. 125. ADMINISTRATION OF CLAIMS RELATING TO PHY-
SICIANS’ SERVICES.
(a) LIMITATION ON CARRIER USER FEES.—Section
1842(c) (42 U.S.C. 1395u(c)) is amended by adding at
the end the following new paragraph:
‘‘(4) Neither a carrier nor the Secretary may impose
a fee under this title—
‘‘(A) for the filing of claims related to physi-
cians’ services,
‘‘(B) for an error in filing a claim relating to
physicians’ services or for such a claim which is de-
nied,
‘‘(C) for any appeal under this title with respect
to physicians’ services,
‘‘(D) for applying for (or obtaining) a unique
identifier under subsection (r), or
‘‘(E) for responding to inquiries respecting phy-
sicians’ services or for providing information with re-
spect to medical review of such services.’’.
(b) CLARIFICATION OF PERMISSIBLE SUBSTITUTE
BILLING ARRANGEMENTS.—
(1) IN
GENERAL.—Clause (D) of section
1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended to
read as follows: ‘‘(D) payment may be made to a
physician for physicians’ services (and services fur-
nished incident to such services) furnished by a sec-
ond physician to patients of the first physician if (i)
the first physician is unavailable to provide the serv-
ices; (ii) the services are furnished pursuant to an
arrangement between the two physicians that (I) is
informal and reciprocal, or (II) involves per diem or
other fee-for-time compensation for such services;
(iii) the services are not provided by the second phy-
sician over a continuous period of more than 60
days; and (iv) the claim form submitted to the car-
rier for such services includes the second physician’s
unique identifier (provided under the system estab-
lished under subsection (r)) and indicates that the
claim meets the requirements of this subparagraph
for payment to the first physician’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to services furnished on
or after the first day of the first month beginning
more than 60 days after the date of the enactment
of this Act.
SEC. 126. MISCELLANEOUS AND TECHNICAL CORRECTIONS.
(a) 
OVERVALUED
PROCEDURES.—(1) 
Section
1842(b)(16)(B)(iii) (42 U.S.C. 1395u(b)(16)(B)(iii)) is
amended—
(A) by striking ‘‘, simple and subcutaneous’’,
(B) by striking ‘‘; small’’ and inserting ‘‘and
small’’,
(C) by striking ‘‘treatments;’’ the first place it
appears and inserting ‘‘and’’,
(D) by striking ‘‘lobectomy;’’,
(E) by striking ‘‘enterectomy; colectomy; chole-
cystectomy;’’,
(F) by striking ‘‘; transurerethral resection’’
and inserting ‘‘and resection’’, and
(G) by striking ‘‘sacral laminectomy;’’.
(2) Section 4101(b)(2) of OBRA–1990 is amended—
(A) in the matter before subparagraph (A), by
striking 
‘‘1842(b)(16)’’ 
and 
inserting
‘‘1842(b)(16)(B)’’, and
(B) in subparagraph (B)—
(i) by striking ‘‘, simple and subcutane-
ous’’,
(ii) by striking ‘‘(HCPCS codes 19160 and
19162)’’ and inserting ‘‘(HCPCS code 19160)’’,
and
(iii) by striking all that follows ‘‘(HCPCS
codes 92250’’ and inserting ‘‘and 92260).’’.
(b) RADIOLOGY SERVICES.—(1) Section 1834(b)(4)
(42 U.S.C. 1395m(b)(4)) is amended by redesignating the
subparagraphs (E) and (F) redesignated by section
4102(a)(1) of OBRA–1990 as subparagraphs (F) and
(G), respectively.
(2) 
Section 
1834(b)(4)(D) 
(42 
U.S.C.
1395m(b)(4)(D)) is amended—
(A) in the matter before clause (i), by striking
‘‘shall be determined as follows:’’ and inserting
‘‘shall, subject to clause (vii), be reduced to the ad-
justed conversion factor for the locality determined
as follows:’’,
(B) in clause (iv), by striking ‘‘LOCAL ADJUST-
MENT.—Subject to clause (vii), the conversion factor
to be applied to’’ and inserting ‘‘ADJUSTED CONVER-
SION FACTOR.—The adjusted conversion factor for’’,
(C) in clause (vii), by striking ‘‘under this sub-
paragraph’’, and
(D) in clause (vii), by inserting ‘‘reduced under
this subparagraph by’’ after ‘‘shall not be’’.
(3) Section 4102(c)(2) of OBRA–1990 is amended
by striking ‘‘radiology services’’ and all that follows and
inserting ‘‘nuclear medicine services.’’.
(4) Section 4102(d) of OBRA–1990 is amended by
striking ‘‘new paragraph’’ and inserting ‘‘new subpara-
graph’’.
(5) 
Section 
1834(b)(4)(E) 
(42 
U.S.C.
1395m(b)(4)(E)) is amended by inserting ‘‘RULE FOR
CERTAIN SCANNING SERVICES.—’’ after ‘‘(E)’’.
(6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w–
4(a)(2)(D)(iii)) is amended by striking ‘‘that are subject
to section 6105(b) of the Omnibus Budget Reconciliation
Act of 1989’’ and by striking ‘‘provided under such sec-
tion’’ and inserting ‘‘provided under section 6105(b) of the
Omnibus Budget Reconciliation Act of 1989’’.
(c) ANESTHESIA SERVICES.—(1) Section 4103(a) of
OBRA–1990 is amended by striking ‘‘REDUCTION IN FEE
SCHEDULE’’ and inserting ‘‘REDUCTION IN PREVAILING
CHARGES’’.
(2) 
Section 
1842(q)(1)(B) 
(42 
U.S.C.
1395u(q)(1)(B)) is amended—
(A) in the matter before clause (i), by striking
‘‘shall be determined as follows:’’ and inserting
‘‘shall, subject to clause (iv), be reduced to the ad-
justed prevailing charge conversion factor for the lo-
cality determined as follows:’’, and
(B) in clause (iii), by striking ‘‘Subject to
clause (iv), the prevailing charge conversion factor to
be applied in’’ and inserting ‘‘The adjusted prevail-
ing charge conversion factor for’’.
(d) ASSISTANTS AT SURGERY.—(1) Section 4107(c)
of OBRA–1990 is amended by inserting ‘‘(a)(1)’’ after
‘‘subsection’’.
(2) Section 4107(a)(2) of OBRA–1990 is amended
by adding at the end the following: ‘‘In applying section
1848(g)(2)(D) of the Social Security Act for services of
an assistant-at-surgery furnished during 1991, the recog-
nized payment amount shall not exceed the maximum
amount specified under section 1848(i)(2)(A) of such Act
(as applied under this paragraph in such year).’’.
(e) TECHNICAL COMPONENTS OF DIAGNOSTIC SERV-
ICES.—Section 1842(b) (42 U.S.C. 1395u(b)) is amended
by redesignating paragraph (18), as added by section
4108(a) of OBRA–1990, as paragraph (17) and, in such
paragraph, by inserting ‘‘, tests specified in paragraph
(14)(C)(i),’’ after ‘‘diagnostic laboratory tests’’.
(f) STATEWIDE FEE SCHEDULES.—Section 4117 of
OBRA–1990 is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a) IN GENERAL.—’’, and
(B) by striking ‘‘, if the’’ and all that fol-
lows through ‘‘1991,’’; and
(2) by striking subsections (b), (c), and (d).
(g) 
OTHER
MISCELLANEOUS
AND
TECHNICAL
AMENDMENTS.—(1) The heading of section 1834(f) (42
U.S.C. 1395m(f)) is amended by striking ‘‘FISCAL YEAR’’.
(2)(A) Section 4105(b) of OBRA–1990 is amended—
(i) in paragraph (2), by striking ‘‘amendments’’
and inserting ‘‘amendment’’, and
(ii) in paragraph (3), by striking ‘‘amendments
made by paragraphs (1) and (2)’’ and inserting
‘‘amendment made by paragraph (1)’’.
(B) Section 1848(f)(2)(C) (42 U.S.C. 1395w–
4(f)(2)(C)) is amended by inserting ‘‘PERFORMANCE
STANDARD
RATES
OF
INCREASE
FOR
FISCAL
YEAR
1991.—’’ after ‘‘(C)’’.
(C) Section 4105(d) of OBRA–1990 is amended by
inserting ‘‘PUBLICATION OF PERFORMANCE STANDARD
RATES.—’’ after ‘‘(d)’’.
(3) Section 4106(c) of OBRA–1990 is amended by
inserting 
‘‘of 
the 
Social 
Security 
Act’’ 
after
‘‘1848(d)(1)(B)’’.
(4) Section 4114 of OBRA–1990 is amended by
striking ‘‘patients’’ the second place it appears.
(5) Section 1848(e)(1)(C) (42 U.S.C. 1395w–
4(e)(1)(C)) is amended by inserting ‘‘date of the’’ after
‘‘since the’’.
(6) Section 4118(f)(1)(D) of OBRA–1990 is amend-
ed by striking ‘‘is amended’’.
(7) Section 4118(f)(1)(N)(ii) of OBRA–1990 is
amended by striking ‘‘subsection (f)(5)(A)’’ and inserting
‘‘subsection (f)(5)(A))’’.
(8) Section 1845(e) (42 U.S.C. 1395w–1(e)) is
amended—
(A) by striking paragraph (2); and
(B) by redesignating paragraphs (3), (4), and
(5) as paragraphs (2), (3), and (4).
(9) Section 4118(j)(2) of OBRA–1990 is amended by
striking ‘‘In section’’ and inserting ‘‘Section’’.
(10)(A) Section 1848(i)(3) (42 U.S.C. 1395w–
4(i)(3)) is amended by striking the space before the period
at the end.
(B) 
Section 
1834(a)(10)(B) 
(42 
U.S.C.
1395m(a)(10)(B)) is amended—
(i) by striking ‘‘apply to’’ and inserting ‘‘would
otherwise apply to’’, and
(ii) by inserting before the period at the end
‘‘but for the application of section 1848(i)(3)’’.
(h) OTHER CORRECTIONS.—(1) Effective on the date
of the enactment of this Act, section 6102(d)(4) of
OBRA–1989 is amended by striking all that follows the
first sentence.
(2) Effective for payments for fiscal years beginning
with fiscal year 1994, section 1842(c)(1) (42 U.S.C.
1395u(c)(1)) is amended—
(A) in subparagraph (A), by striking ‘‘(A) Any
contract’’ and inserting ‘‘Any contract’’; and
(B) by striking subparagraph (B).
(i) EFFECTIVE DATE.—Except as provided in sub-
section (i), the amendments made by this section and the
provisions of this section shall take effect as if included
in the enactment of OBRA–1990.
PART II—DURABLE MEDICAL EQUIPMENT
SEC. 131. CERTIFICATION OF SUPPLIERS.
(a) REQUIREMENTS.—
(1) IN
GENERAL.—Section 1834 (42 U.S.C.
1395m), as amended by section 13544(b)(1) of
OBRA–1993, is amended by adding at the end the
following new subsection:
‘‘(j) REQUIREMENTS FOR SUPPLIERS OF MEDICAL
EQUIPMENT AND SUPPLIES.—
‘‘(1) ISSUANCE
AND
RENEWAL
OF
SUPPLIER
NUMBER.—
‘‘(A) PAYMENT.—Except as provided in
subparagraph (C), no payment may be made
under this part after the date of the enactment
of the Social Security Act Amentments of 1994
for items furnished by a supplier of medical
equipment and supplies unless such supplier ob-
tains (and renews at such intervals as the Sec-
retary may require) a supplier number.
‘‘(B) STANDARDS FOR POSSESSING A SUP-
PLIER NUMBER.—A supplier may not obtain a
supplier number unless—
‘‘(i) for medical equipment and sup-
plies furnished on or after the date of en-
actment of the Social Security Act Amend-
ments of 1994, and before January 1,
1996, the supplier meets standards pre-
scribed by the Secretary in regulations is-
sued on June 18, 1992; and
‘‘(ii) for medical equipment and sup-
plies furnished on or after January 1,
1996, the supplier meets revised standards
prescribed by the Secretary (in consulta-
tion with representatives of suppliers of
medical equipment and supplies, carriers,
and consumers) that shall include require-
ments that the supplier—
‘‘(I) comply with all applicable
State and Federal licensure and regu-
latory requirements;
‘‘(II) maintain a physical facility
on an appropriate site;
‘‘(III) have proof of appropriate
liability insurance; and
‘‘(IV) meet such other require-
ments as the Secretary may specify.
‘‘(C) EXCEPTION FOR ITEMS FURNISHED
AS
INCIDENT
TO
A
PHYSICIAN’S
SERVICE.—
Subparagraph (A) shall not apply with respect
to medical equipment and supplies furnished in-
cident to a physician’s service.
‘‘(D) PROHIBITION
AGAINST
MULTIPLE
SUPPLIER NUMBERS.—The Secretary may not
issue more than one supplier number to any
supplier of medical equipment and supplies un-
less the issuance of more than one number is
appropriate to identify subsidiary or regional
entities under the supplier’s ownership or con-
trol.
‘‘(E) PROHIBITION AGAINST DELEGATION
OF
SUPPLIER
DETERMINATIONS.—The Sec-
retary may not delegate (other than by contract
under section 1842) the responsibility to deter-
mine whether suppliers meet the standards nec-
essary to obtain a supplier number.
‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—
‘‘(A) LIMITATION ON INFORMATION PRO-
VIDED
BY
SUPPLIERS
ON
CERTIFICATES
OF
MEDICAL NECESSITY.—
‘‘(i) IN GENERAL.—Effective 60 days
after the date of enactment of the Social
Security Act Amendments of 1994, a sup-
plier of medical equipment and supplies
may distribute to physicians, or to individ-
uals entitled to benefits under this part, a
certificate of medical necessity for commer-
cial purposes which contains no more than
the following information completed by the
supplier:
‘‘(I) An identification of the sup-
plier and the beneficiary to whom
such medical equipment and supplies
are furnished.
‘‘(II) A description of such medi-
cal equipment and supplies.
‘‘(III) Any product code identify-
ing such medical equipment and sup-
plies.
‘‘(IV) Any other administrative
information (other than information
relating to the beneficiary’s medical
condition) identified by the Secretary.
‘‘(ii) 
INFORMATION
ON
PAYMENT
AMOUNT AND CHARGES.—If a supplier dis-
tributes a certificate of medical necessity
containing any of the information per-
mitted to be supplied under clause (i), the
supplier shall also list on the certificate of
medical necessity the fee schedule amount
and the supplier’s charge for the medical
equipment or supplies being furnished
prior to distribution of such certificate to
the physician.
‘‘(iii) PENALTY.—Any supplier of
medical equipment and supplies who know-
ingly and willfully distributes a certificate
of medical necessity in violation of clause
(i) or fails to provide the information re-
quired under clause (ii) is subject to a civil
money penalty in an amount not to exceed
$1,000 for each such certificate of medical
necessity so distributed. The provisions of
section 1128A (other than subsections (a)
and (b)) shall apply to civil money pen-
alties under this subparagraph in the same