H. R. 2015—170
‘‘(6) SUBMISSION OF RESIDENT ASSESSMENT DATA.—A skilled
nursing facility, or a facility described in paragraph (7)(B),
shall provide the Secretary, in a manner and within the time-
frames prescribed by the Secretary, the resident assessment
data necessary to develop and implement the rates under this
subsection. For purposes of meeting such requirement, a skilled
nursing facility, or a facility described in paragraph (7), may
submit the resident assessment data required under section
1819(b)(3), using the standard instrument designated by the
State under section 1819(e)(5).
‘‘(7) TRANSITION FOR MEDICARE SWING BED HOSPITALS.—
‘‘(A) IN GENERAL.—The Secretary shall determine an
appropriate manner in which to apply this subsection to
the facilities described in subparagraph (B), taking into
account the purposes of this subsection, and shall provide
that at the end of the transition period (as defined in
paragraph (2)(E)) such facilities shall be paid only under
this subsection. Payment shall not be made under this
subsection to such facilities for cost reporting periods begin-
ning before such date (not earlier than July 1, 1999) as
the Secretary specifies.
‘‘(B) FACILITIES DESCRIBED.—The facilities described in
this subparagraph are facilities that have in effect an agree-
ment described in section 1883, for which payment is made
for the furnishing of extended care services on a reasonable
cost basis under section 1814(l) (as in effect on and after
such date).
‘‘(8) LIMITATION ON REVIEW.—There shall be no administra-
tive or judicial review under section 1869, 1878, or otherwise
of—
‘‘(A) the establishment of Federal per diem rates under
paragraph (4), including the computation of the standard-
ized per diem rates under paragraph (4)(C), adjustments
and corrections for case mix under paragraphs (4)(F) and
(4)(G)(i), and adjustments for variations in labor-related
costs under paragraph (4)(G)(ii);
‘‘(B) the establishment of facility specific rates before
January 1, 1999, (except any determination of costs paid
under part A of this title); and
‘‘(C) the establishment of transitional amounts under
paragraph (7).’’.
(b) CONSOLIDATED BILLING.—
(1) FOR
SNF
SERVICES.—Section 1862(a) (42 U.S.C.
1395y(a)), as amended by 4319(b), is amended—
(A) by striking ‘‘or’’ at the end of paragraph (16),
(B) by striking the period at the end of paragraph
(17) and inserting ‘‘; or’’, and
(C) by inserting after paragraph (17) the following
new paragraph:
‘‘(18) which are covered skilled nursing facility services
described in section 1888(e)(2)(A)(i) and which are furnished
to an individual who is a resident of a skilled nursing facility
or of a part of a facility that includes a skilled nursing facility
(as determined under regulations), by an entity other than
the skilled nursing facility, unless the services are furnished
under arrangements (as defined in section 1861(w)(1)) with
the entity made by the skilled nursing facility.’’.
H. R. 2015—171
(2) REQUIRING PAYMENT FOR ALL PART B ITEMS AND SERV-
ICES TO BE MADE TO FACILITY.—The first sentence of section
1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended—
(A) by striking ‘‘and (D)’’ and inserting ‘‘(D)’’; and
(B) by striking the period at the end and inserting
the following: ‘‘, and (E) in the case of an item or service
(other than services described in section 1888(e)(2)(A)(ii))
furnished to an individual who (at the time the item or
service is furnished) is a resident of a skilled nursing
facility or of a part of a facility that includes a skilled
nursing facility (as determined under regulations), payment
shall be made to the facility (without regard to whether
or not the item or service was furnished by the facility,
by others under arrangement with them made by the facil-
ity, under any other contracting or consulting arrangement,
or otherwise).’’.
(3) PAYMENT RULES.—Section 1888(e) (42 U.S.C. 1395yy(e)),
as added by subsection (a), is amended by adding at the end
the following:
‘‘(9) PAYMENT FOR CERTAIN SERVICES.—In the case of an
item or service furnished to a resident of a skilled nursing
facility or a part of a facility that includes a skilled nursing
facility (as determined under regulations) for which payment
would (but for this paragraph) be made under part B in an
amount determined in accordance with section 1833(a)(2)(B),
the amount of the payment under such part shall be the amount
provided under the fee schedule for such item or service.
‘‘(10) REQUIRED CODING.—No payment may be made under
part B for items and services (other than services described
in paragraph (2)(A)(ii)) furnished to an individual who is a
resident of a skilled nursing facility or of a part of a facility
that includes a skilled nursing facility (as determined under
regulations), unless the claim for such payment includes a
code (or codes) under a uniform coding system specified by
the Secretary that identifies the items or services furnished.’’.
(4) FACILITY
PROVIDER
NUMBER
REQUIRED
ON
CLAIMS
SUBMITTED
BY
PHYSICIANS.—Section 1842 (42 U.S.C. 1395u)
is amended by adding at the end the following new section:
‘‘(t) Each request for payment, or bill submitted, for an item
or service furnished by a physician to an individual who is a
resident of a skilled nursing facility or of a part of a facility
that includes a skilled nursing facility (as determined under regula-
tions), for which payment may be made under this part shall
include the facility’s medicare provider number.’’.
(5) CONFORMING AMENDMENTS.—
(A) 
Section 
1819(b)(3)(C)(i) 
(42 
U.S.C. 
1395i–
3(b)(3)(C)(i)) is amended by striking ‘‘Such’’ and inserting
‘‘Subject to the timeframes prescribed by the Secretary
under section 1888(e)(6), such’’.
(B) Section 1832(a)(1) (42 U.S.C. 1395k(a)(1)) is amend-
ed by striking ‘‘(2);’’ and inserting ‘‘(2) and section
1842(b)(6)(E);’’.
(C) Section 1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is
amended by inserting ‘‘or section 1888(e)(9)’’ after ‘‘section
1886’’.
(D) Section 1861(h) (42 U.S.C 1395x(h)) is amended—
H. R. 2015—172
(i) in the opening paragraph, by striking ‘‘para-
graphs (3) and (6)’’ and inserting ‘‘paragraphs (3), (6),
and (7)’’, and
(ii) in paragraph (7), after ‘‘skilled nursing facili-
ties’’, by inserting ‘‘, or by others under arrangements
with them made by the facility’’.
(E) Section 1861(v)(7)(D) (42 U.S.C. 1395x(v)(7)(D)) is
amended by inserting ‘‘subsections (a) through (c) of’’ before
‘‘section 1888.’’.
(F) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H))
is amended—
(i) by redesignating clauses (i) and (ii) as sub-
clauses (I) and (II) respectively,
(ii) by inserting ‘‘(i)’’ after ‘‘(H)’’, and
(iii) by adding after clause (i), as so redesignated,
the following new clause:
‘‘(ii) in the case of skilled nursing facilities which provide
covered skilled nursing facility services—
‘‘(I) that are furnished to an individual who is a resi-
dent of the skilled nursing facility, and
‘‘(II) for which the individual is entitled to have pay-
ment made under this title,
to have items and services (other than services described in
section 1888(e)(2)(A)(ii)) furnished by the skilled nursing facility
or otherwise under arrangements (as defined in section
1861(w)(1)) made by the skilled nursing facility,’’.
(G) 
Section 
1883(a)(2)(B)(ii)(II) 
(42 
U.S.C.
1395tt(a)(2)(B)(ii)(II)) is amended by inserting ‘‘subsections
(a) through (d) of’’ before ‘‘section 1888’’.
(H) Section 1888(d)(1) (42 U.S.C. 1395yy(d)(1)) is
amended by striking ‘‘Any skilled nursing facility’’ and
inserting ‘‘Subject to subsection (e), any skilled nursing
facility’’.
(c) MEDICAL REVIEW PROCESS.—In order to ensure that medi-
care beneficiaries are furnished appropriate services in skilled nurs-
ing facilities, the Secretary of Health and Human Services shall
establish and implement a thorough medical review process to
examine the effects of the amendments made by this section on
the quality of covered skilled nursing facility services furnished
to medicare beneficiaries. In developing such a medical review
process, the Secretary shall place a particular emphasis on the
quality of non-routine covered services and physicians’ services
for which payment is made under title XVIII of the Social Security
Act.
(d) EFFECTIVE DATE.—The amendments made by this section
are effective for cost reporting periods beginning on or after July
1, 1998; except that the amendments made by subsection (b) shall
apply to items and services furnished on or after July 1, 1998.
CHAPTER 4—PROVISIONS RELATED TO HOSPICE
SERVICES
SEC. 4441. PAYMENTS FOR HOSPICE SERVICES.
(a) PAYMENT
UPDATE.—Section 1814(i)(1)(C)(ii) (42 U.S.C.
1395f(i)(1)(C)(ii)) is amended—
(1) in subclause (V), by striking ‘‘and’’ at the end;
(2) by redesignating subclause (VI) as subclause (VII); and
H. R. 2015—173
(3) by inserting after subclause (V) the following new sub-
clause:
‘‘(VI) for each of fiscal years 1998 through 2002, the market
basket percentage increase for the fiscal year involved minus
1.0 percentage points; and’’.
(b) COLLECTION OF DATA.—Section 1814(i) (42 U.S.C. 1395f(i))
is amended by adding at the end the following new paragraph:
‘‘(3) Hospice programs providing hospice care for which payment
is made under this subsection shall submit to the Secretary such
data with respect to the costs for providing such care for each
fiscal year, beginning with fiscal year 1999, as the Secretary deter-
mines necessary.’’.
SEC. 4442. PAYMENT FOR HOME HOSPICE CARE BASED ON LOCATION
WHERE CARE IS FURNISHED.
(a) IN GENERAL.—Section 1814(i)(2) (42 U.S.C. 1395f(i)(2)) is
amended by adding at the end the following:
‘‘(D) A hospice program shall submit claims for payment for
hospice care furnished in an individual’s home under this title
only on the basis of the geographic location at which the service
is furnished, as determined by the Secretary.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
applies to cost reporting periods beginning on or after October
1, 1997.
SEC. 4443. HOSPICE CARE BENEFITS PERIODS.
(a) RESTRUCTURING
OF BENEFIT PERIOD.—Section 1812 (42
U.S.C. 1395d) is amended in subsections (a)(4) and (d)(1) by striking
‘‘, a subsequent period of 30 days, and a subsequent extension
period’’ and inserting ‘‘and an unlimited number of subsequent
periods of 60 days each’’.
(b) CONFORMING AMENDMENTS.—(1) Section 1812 (42 U.S.C.
1395d) is amended in subsection (d)(2)(B) by striking ‘‘90- or 30-
day period or a subsequent extension period’’ and inserting ‘‘90-
day period or a subsequent 60-day period’’.
(2) Section 1814(a)(7)(A) (42 U.S.C. 1395f(a)(7)(A)) is amended—
(A) in clause (i), by inserting ‘‘and’’ at the end;
(B) in clause (ii)—
(i) by striking ‘‘30-day’’ and inserting ‘‘60-day’’; and
(ii) by striking ‘‘, and’’ at the end and inserting a
period; and
(C) by striking clause (iii).
SEC. 4444. OTHER ITEMS AND SERVICES INCLUDED IN HOSPICE CARE.
(a) IN GENERAL.—Section 1861(dd)(1) (42 U.S.C. 1395x(dd)(1))
is amended—
(1) in subparagraph (G), by striking ‘‘and’’ at the end;
(2) in subparagraph (H), by striking the period at the
end and inserting ‘‘, and’’; and
(3) by inserting after subparagraph (H) the following:
‘‘(I) any other item or service which is specified in the
plan and for which payment may otherwise be made under
this title.’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply with respect to items or services furnished on or after
April 1, 1998.
H. R. 2015—174
SEC. 4445. CONTRACTING WITH INDEPENDENT PHYSICIANS OR PHYSI-
CIAN GROUPS FOR HOSPICE CARE SERVICES PER-
MITTED.
Section 1861(dd)(2) (42 U.S.C. 1395x(dd)(2)) is amended—
(1) in subparagraph (A)(ii)(I), by striking ‘‘(F),’’; and
(2) in subparagraph (B)(i), by inserting ‘‘or, in the case
of a physician described in subclause (I), under contract with’’
after ‘‘employed by’’.
SEC. 4446. WAIVER OF CERTAIN STAFFING REQUIREMENTS FOR HOS-
PICE CARE PROGRAMS IN NONURBANIZED AREAS.
Section 1861(dd)(5) (42 U.S.C. 1395x(dd)(5)) is amended—
(1) in subparagraph (B), by inserting ‘‘or (C)’’ after
‘‘subparagraph (A)’’ each place it appears; and
(2) by adding at the end the following:
‘‘(C) The Secretary may waive the requirements of paragraph
(2)(A)(i) and (2)(A)(ii) for an agency or organization with respect
to the services described in paragraph (1)(B) and, with respect
to dietary counseling, paragraph (1)(H), if such agency or organiza-
tion—
‘‘(i) is located in an area which is not an urbanized area
(as defined by the Bureau of Census), and
‘‘(ii) demonstrates to the satisfaction of the Secretary that
the agency or organization has been unable, despite diligent
efforts, to recruit appropriate personnel.’’.
SEC. 4447. LIMITATION ON LIABILITY OF BENEFICIARIES FOR CERTAIN
HOSPICE COVERAGE DENIALS.
Section 1879(g) (42 U.S.C. 1395pp(g)) is amended—
(1) by redesignating paragraphs (1) and (2) as subpara-
graphs (A) and (B), respectively, and moving such subpara-
graphs 2 ems to the right;
(2) by striking ‘‘is,’’ and inserting ‘‘is—’’;
(3) by making the remaining text of subsection (g), as
amended, that follows ‘‘is—’’ a new paragraph (1) and indenting
such paragraph 2 ems to the right;
(4) by striking the period at the end and inserting ‘‘; and’’;
and
(5) by adding at the end the following new paragraph:
‘‘(2) with respect to the provision of hospice care to an
individual, a determination that the individual is not terminally
ill.’’.
SEC. 4448. EXTENDING THE PERIOD FOR PHYSICIAN CERTIFICATION
OF AN INDIVIDUAL’S TERMINAL ILLNESS.
Section 1814(a)(7)(A)(i) (42 U.S.C. 1395f(a)(7)(A)(i)) is amended
in the matter following subclause (II) by striking ‘‘, not later than
2 days after hospice care is initiated (or, if each certify verbally
not later than 2 days after hospice care is initiated, not later
than 8 days after such care is initiated)’’ and inserting ‘‘at the
beginning of the period’’.
SEC. 4449. EFFECTIVE DATE.
Except as otherwise provided in this chapter, the amendments
made by this chapter apply to benefits provided on or after the
date of the enactment of this chapter, regardless of whether or
not an individual has made an election under section 1812(d) of
the Social Security Act (42 U.S.C. 1395d(d)) before such date.
H. R. 2015—175
CHAPTER 5—OTHER PAYMENT PROVISIONS
SEC. 4451. REDUCTIONS IN PAYMENTS FOR ENROLLEE BAD DEBT.
Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by adding
at the end the following new subparagraph:
‘‘(T) In determining such reasonable costs for hospitals, no
reduction in copayments under section 1833(t)(5)(B) shall be treated
as a bad debt and the amount of bad debts otherwise treated
as allowable costs which are attributable to the deductibles and
coinsurance amounts under this title shall be reduced—
‘‘(i) for cost reporting periods beginning during fiscal year
1998, by 25 percent of such amount otherwise allowable,
‘‘(ii) for cost reporting periods beginning during fiscal year
1999, by 40 percent of such amount otherwise allowable, and
‘‘(iii) for cost reporting periods beginning during a subse-
quent fiscal year, by 45 percent of such amount otherwise
allowable.’’.
SEC. 4452. PERMANENT EXTENSION OF HEMOPHILIA PASS-THROUGH
PAYMENT.
Section 6011(d) of OBRA–1989 (as amended by section 13505
of OBRA–1993) is amended by striking ‘‘and shall expire September
30, 1994.’’ and inserting ‘‘and on or before September 30, 1994,
and on or after October 1, 1997.’’.
SEC. 4453. REDUCTION IN PART A MEDICARE PREMIUM FOR CERTAIN
PUBLIC RETIREES.
(a) IN GENERAL.—Section 1818(d) (42 U.S.C. 1395i–2(d)) is
amended—
(1) in paragraph (2), by striking ‘‘paragraph (4)’’ and insert-
ing ‘‘paragraphs (4) and (5)’’; and
(2) by adding at the end the following new paragraph:
‘‘(5)(A) The amount of the monthly premium shall be zero
in the case of an individual who is a person described in subpara-
graph (B) for a month, if—
‘‘(i) the individual’s premium under this section for the
month is not (and will not be) paid for, in whole or in part,
by a State (under title XIX or otherwise), a political subdivision
of a State, or an agency or instrumentality of one or more
States or political subdivisions thereof; and
‘‘(ii) in each of 84 months before such month, the individual
was enrolled in this part under this section and the payment
of the individual’s premium under this section for the month
was not paid for, in whole or in part, by a State (under title
XIX or otherwise), a political subdivision of a State, or an
agency or instrumentality of one or more States or political
subdivisions thereof.
‘‘(B) A person described in this subparagraph for a month
is a person who establishes to the satisfaction of the Secretary
that, as of the last day of the previous month—
‘‘(i)(I) the person was receiving cash benefits under a quali-
fied State or local government retirement system (as defined
in subparagraph (C)) on the basis of the person’s employment
in one or more positions covered under any such system, and
(II) the person would have at least 40 quarters of coverage
under title II if remuneration for medicare qualified government
employment (as defined in paragraph (1) of section 210(p),
H. R. 2015—176
but determined without regard to paragraph (3) of such section)
paid to such person were treated as wages paid to such person
and credited for purposes of determining quarters of coverage
under section 213;
‘‘(ii)(I) the person was married (and had been married
for the previous 1-year period) to an individual who is described
in clause (i), or (II) the person met the requirement of clause
(i)(II) and was married (and had been married for the previous
1-year period) to an individual described in clause (i)(I);
‘‘(iii) the person had been married to an individual for
a period of at least 1 year (at the time of such individual’s
death) if (I) the individual was described in clause (i) at the
time of the individual’s death, or (II) the person met the require-
ment of clause (i)(II) and the individual was described in clause
(i)(I) at the time of the individual’s death; or
‘‘(iv) the person is divorced from an individual and had
been married to the individual for a period of at least 10
years (at the time of the divorce) if (I) the individual was
described in clause (i) at the time of the divorce, or (II) the
person met the requirement of clause (i)(II) and the individual
was described in clause (i)(I) at the time of the divorce.
‘‘(C) For purposes of subparagraph (B)(i)(I), the term ‘qualified
State or local government retirement system’ means a retirement
system that—
‘‘(i) is established or maintained by a State or political
subdivision thereof, or an agency or instrumentality of one
or more States or political subdivisions thereof;
‘‘(ii) covers positions of some or all employees of such a
State, subdivision, agency, or instrumentality; and
‘‘(iii) does not adjust cash retirement benefits based on
eligibility for a reduction in premium under this paragraph.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to premiums for months beginning with January
1998, and months before such month may be taken into account
for purposes of meeting the requirement of section 1818(d)(5)(B)(iii)
of the Social Security Act, as added by subsection (a).
SEC. 4454. COVERAGE OF SERVICES IN RELIGIOUS NONMEDICAL
HEALTH CARE INSTITUTIONS UNDER THE MEDICARE
AND MEDICAID PROGRAMS.
(a) MEDICARE COVERAGE.—
(1) IN
GENERAL.—Section 1861 (42 U.S.C. 1395x) (as
amended by sections 4103 and 4106) is amended—
(A) in the sixth sentence of subsection (e)—
(i) by striking ‘‘includes’’ and all that follows up
to ‘‘but only’’ and inserting ‘‘includes a religious non-
medical health care institution (as defined in sub-
section (ss)(1)),’’, and
(ii) by inserting ‘‘consistent with section 1821’’
before the period;
(B) in subsection (y)—
(i) by amending the heading to read as follows:
‘‘Extended Care in Religious Nonmedical Health Care Institutions’’,
(ii) in paragraph (1), by striking ‘‘includes’’ and
all that follows up to ‘‘but only’’ and inserting ‘‘includes
H. R. 2015—177
a religious nonmedical health care institution (as
defined in subsection (ss)(1)),’’, and
(iii) by inserting ‘‘consistent with section 1821’’
before the period; and
(C) by adding at the end the following:
‘‘Religious Nonmedical Health Care Institution
‘‘(ss)(1) The term ‘religious nonmedical health care institution’
means an institution that—
‘‘(A) is described in subsection (c)(3) of section 501
of the Internal Revenue Code of 1986 and is exempt from
taxes under subsection (a) of such section;
‘‘(B) is lawfully operated under all applicable Federal,
State, and local laws and regulations;
‘‘(C) provides only nonmedical nursing items and serv-
ices exclusively to patients who choose to rely solely upon
a religious method of healing and for whom the acceptance
of medical health services would be inconsistent with their
religious beliefs;
‘‘(D) provides such nonmedical items and services
exclusively through nonmedical nursing personnel who are
experienced in caring for the physical needs of such
patients;
‘‘(E) provides such nonmedical items and services to
inpatients on a 24-hour basis;
‘‘(F) on the basis of its religious beliefs, does not provide
through its personnel or otherwise medical items and serv-
ices (including any medical screening, examination, diag-
nosis, prognosis, treatment, or the administration of drugs)
for its patients;
‘‘(G)(i) is not owed by, under common ownership with,
or has an ownership interest in, a provider of medical
treatment of services;
‘‘(ii) is not affiliated with—
‘‘(I) a provider of medical treatment or services,
or
‘‘(II) an individual who has an ownership interest
in a provider of medical treatment or services;
‘‘(H) has in effect a utilization review plan which—
‘‘(i) provides for the review of admissions to the
institution, of the duration of stays therein, of cases
of continuous extended duration, and of the items and
services furnished by the institution,
‘‘(ii) requires that such reviews be made by an
appropriate committee of the institution that includes
the individuals responsible for overall administration
and for supervision of nursing personnel at the institu-
tion,
‘‘(iii) provides that records be maintained of the
meetings, decisions, and actions of such committee,
and
‘‘(iv) meets such other requirements as the Sec-
retary finds necessary to establish an effective utiliza-
tion review plan;
‘‘(I) provides the Secretary with such information as
the Secretary may require to implement section 1821,
H. R. 2015—178
including information relating to quality of care and cov-
erage determinations; and
‘‘(J) meets such other requirements as the Secretary
finds necessary in the interest of the health and safety
of individuals who are furnished services in the institution.
‘‘(2) To the extent that the Secretary finds that the accreditation
of an institution by a State, regional, or national agency or associa-
tion provides reasonable assurances that any or all of the require-
ments of paragraph (1) are met or exceeded, the Secretary may
treat such institution as meeting the condition or conditions with
respect to which the Secretary made such finding.
‘‘(3)(A)(i) In administering this subsection and section 1821,
the Secretary shall not require any patient of a religious nonmedical
health care institution to undergo medical screening, examination,
diagnosis, prognosis, or treatment or to accept any other medical
health care service, if such patient (or legal representative of the
patient) objects thereto on religious grounds.
‘‘(ii) Clause (i) shall not be construed as preventing the Sec-
retary from requiring under section 1821(a)(2) the provision of
sufficient information regarding an individual’s condition as a condi-
tion for receipt of benefits under part A for services provided in
such an institution.
‘‘(B)(i) In administering this subsection and section 1821, the
Secretary shall not subject a religious nonmedical health care
institution or its personnel to any medical supervision, regulation,
or control, insofar as such supervision, regulation, or control would
be contrary to the religious beliefs observed by the institution
or such personnel.
‘‘(ii) Clause (i) shall not be construed as preventing the Sec-
retary from reviewing items and services billed by the institution
to the extent the Secretary determines such review to be necessary
to determine whether such items and services were not covered
under part A, are excessive, or are fraudulent.
‘‘(4)(A) For purposes of paragraph (1)(G)(i), an ownership
interest of less than 5 percent shall not be taken into account.
‘‘(B) For purposes of paragraph (1)(G)(ii), none of the following
shall be considered to create an affiliation:
‘‘(i) An individual serving as an uncompensated director,
trustee, officer, or other member of the governing body of a
religious nonmedical health care institution.
‘‘(ii) An individual who is a director, trustee, officer,
employee, or staff member of a religious nonmedical health
care institution having a family relationship with an individual
who is affiliated with (or has an ownership interest in) a
provider of medical treatment or services.
‘‘(iii) An individual or entity furnishing goods or services
as a vendor to both providers of medical treatment or services
and religious nonmedical health care institutions.’’.
(2) CONDITIONS OF COVERAGE.—Part A of title XVIII is
amended by adding at the end the following new section:
‘‘CONDITIONS FOR COVERAGE OF RELIGIOUS NONMEDICAL HEALTH
CARE INSTITUTIONAL SERVICES
‘‘SEC. 1821. (a) IN GENERAL.—Subject to subsections (c) and
(d), payment under this part may be made for inpatient hospital
services or post-hospital extended care services furnished an individ-
ual in a religious nonmedical health care institution only if—
H. R. 2015—179
‘‘(1) the individual has an election in effect for such benefits
under subsection (b); and
‘‘(2) the individual has a condition such that the individual
would qualify for benefits under this part for inpatient hospital
services or extended care services, respectively, if the individual
were an inpatient or resident in a hospital or skilled nursing
facility that was not such an institution.
‘‘(b) ELECTION.—
‘‘(1) IN
GENERAL.—An individual may make an election
under this subsection in a form and manner specified by the
Secretary consistent with this subsection. Unless otherwise pro-
vided, such an election shall take effect immediately upon its
execution. Such an election, once made, shall continue in effect
until revoked.
‘‘(2) FORM.—The election form under this subsection shall
include the following:
‘‘(A) A written statement, signed by the individual
(or such individual’s legal representative), that—
‘‘(i) the individual is conscientiously opposed to
acceptance of nonexcepted medical treatment; and
‘‘(ii) the individual’s acceptance of nonexcepted
medical treatment would be inconsistent with the
individual’s sincere religious beliefs.
‘‘(B) A statement that the receipt of nonexcepted medi-
cal services shall constitute a revocation of the election
and may limit further receipt of services described in sub-
section (a).
‘‘(3) REVOCATION.—An election under this subsection by
an individual may be revoked by voluntarily notifying the Sec-
retary in writing of such revocation and shall be deemed to
be revoked if the individual receives nonexcepted medical treat-
ment for which reimbursement is made under this title.
‘‘(4) LIMITATION
ON
SUBSEQUENT
ELECTIONS.—Once an
individual’s election under this subsection has been made and
revoked twice—
‘‘(A) the next election may not become effective until
the date that is 1 year after the date of most recent previous
revocation, and
‘‘(B) any succeeding election may not become effective
until the date that is 5 years after the date of the most
recent previous revocation.
‘‘(5) EXCEPTED MEDICAL TREATMENT.—For purposes of this
subsection:
‘‘(A) 
EXCEPTED
MEDICAL
TREATMENT.—The 
term
‘excepted medical treatment’ means medical care or treat-
ment (including medical and other health services)—
‘‘(i) received involuntarily, or
‘‘(ii) required under Federal or State law or law
of a political subdivision of a State.
‘‘(B) NONEXCEPTED
MEDICAL
TREATMENT.—The term
‘nonexcepted medical treatment’ means medical care or
treatment (including medical and other health services)
other than excepted medical treatment.
‘‘(c) MONITORING AND SAFEGUARD AGAINST EXCESSIVE EXPENDI-
TURES.—
‘‘(1) ESTIMATE OF EXPENDITURES.—Before the beginning of
each fiscal year (beginning with fiscal year 2000), the Secretary
H. R. 2015—180
shall estimate the level of expenditures under this part for
services described in subsection (a) for that fiscal year.
‘‘(2) ADJUSTMENT IN PAYMENTS.—
‘‘(A) PROPORTIONAL
ADJUSTMENT.—If the Secretary
determines that the level estimated under paragraph (1)
for a fiscal year will exceed the trigger level (as defined
in subparagraph (C)) for that fiscal year, the Secretary
shall, subject to subparagraph (B), provide for such a
proportional reduction in payment amounts under this part
for services described in subsection (a) for the fiscal year
involved as will assure that such level (taking into account
any adjustment under subparagraph (B)) does not exceed
the trigger level for that fiscal year.
‘‘(B) ALTERNATIVE ADJUSTMENTS.—The Secretary may,
instead of making some or all of the reduction described
in subparagraph (A), impose such other conditions or
limitations with respect to the coverage of covered services
(including limitations on new elections of coverage and
new facilities) as may be appropriate to reduce the level
of expenditures described in paragraph (1) to the trigger
level.
‘‘(C) TRIGGER LEVEL.—For purposes of this subsection—
‘‘(i) IN
GENERAL.—Subject to adjustment under
paragraph (3)(B), the ‘trigger level’ for a year is the
unadjusted trigger level described in clause (ii).
‘‘(ii) 
UNADJUSTED
TRIGGER
LEVEL.—The
‘unadjusted trigger level’ for—
‘‘(I) fiscal year 1998, is $20,000,000, or
‘‘(II) a succeeding fiscal year is the amount
specified under this clause for the previous fiscal
year increased by the percentage increase in the
consumer price index for all urban consumers (all
items; United States city average) for the 12-month
period ending with July preceding the beginning
of the fiscal year.
‘‘(D) PROHIBITION
OF
ADMINISTRATIVE
AND
JUDICIAL
REVIEW.—There shall be no administrative or judicial
review under section 1869, 1878, or otherwise of the esti-
mation of expenditures under subparagraph (A) or the
application of reduction amounts under subparagraph (B).
‘‘(E) EFFECT ON BILLING.—Notwithstanding any other
provision of this title, in the case of a reduction in payment
provided under this subsection for services of a religious
nonmedical health care institution provided to an individ-
ual, the amount that the institution is otherwise permitted
to charge the individual for such services is increased by
the amount of such reduction.
‘‘(3) MONITORING EXPENDITURE LEVEL.—
‘‘(A) IN
GENERAL.—The Secretary shall monitor the
expenditure level described in paragraph (2)(A) for each
fiscal year (beginning with fiscal year 1999).
‘‘(B) ADJUSTMENT IN TRIGGER LEVEL.—
‘‘(i) IN GENERAL.—If the Secretary determines that
such level for a fiscal year exceeded, or was less than,
the trigger level for that fiscal year, then, subject to
clause (ii), the trigger level for the succeeding fiscal
H. R. 2015—181
year shall be reduced, or increased, respectively, by
the amount of such excess or deficit.
‘‘(ii) LIMITATION ON CARRYFORWARD.—In no case
may the increase effected under clause (i) for a fiscal
year exceed $50,000,000.
‘‘(d) SUNSET.—If the Secretary determines that the level of
expenditures described in subsection (c)(1) for 3 consecutive fiscal
years (with the first such year being not earlier than fiscal year
2002) exceeds the trigger level for such expenditures for such years
(as determined under subsection (c)(2)), benefits shall be paid under
this part for services described in subsection (a) and furnished
on or after the first January 1 that occurs after such 3 consecutive
years only with respect to an individual who has an election in
effect under subsection (b) as of such January 1 and only during
the duration of such election.
‘‘(e) ANNUAL REPORT.—At the beginning of each fiscal year
(beginning with fiscal year 1999), the Secretary shall submit to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate an annual report
on coverage and expenditures for services described in subsection
(a) under this part and under State plans under title XIX. Such
report shall include—
‘‘(1) level of expenditures described in subsection (c)(1) for
the previous fiscal year and estimated for the fiscal year
involved;
‘‘(2) trends in such level; and
‘‘(3) facts and circumstances of any significant change in
such level from the level in previous fiscal years.’’.
(b) MEDICAID.—
(1) The third sentence of section 1902(a) (42 U.S.C.
1396a(a)) is amended by striking all that follows ‘‘shall not
apply’’ and inserting ‘‘to a religious nonmedical health care
institution (as defined in section 1861(ss)(1)).’’.
(2) Section 1908(e)(1) (42 U.S.C. 1396g–1(e)(1)) is amended
by striking all that follows ‘‘does not include’’ and inserting
‘‘a religious nonmedical health care institution (as defined in
section 1861(ss)(1)).’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 1122(h) (42 U.S.C. 1320a–1(h)) is amended by
striking all that follows ‘‘shall not apply to’’ and inserting
‘‘a religious nonmedical health care institution (as defined in
section 1861(ss)(1)).’’.
(2) Section 1162 (42 U.S.C. 1320c–11) is amended—
(A) by amending the heading to read as follows:
‘‘EXEMPTIONS FOR RELIGIOUS NONMEDICAL HEALTH CARE
INSTITUTIONS’’; and
(B) by striking all that follows ‘‘shall not apply with
respect to a’’ and inserting ‘‘religious nonmedical health
care institution (as defined in section 1861(ss)(1)).’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the date of the enactment of this Act and
shall apply to items and services furnished on or after such date.
By not later than July 1, 1998, the Secretary of Health and Human
Services shall first issue regulations to carry out such amendments.
Such regulations may be issued so they are effective on an interim
H. R. 2015—182
basis pending notice and opportunity for public comment. For peri-
ods before the effective date of such regulations, such regulations
shall recognize elections entered into in good faith in order to
comply with the requirements of section 1821(b) of the Social Secu-
rity Act.
Subtitle F—Provisions Relating to Part B
Only
CHAPTER 1—SERVICES OF HEALTH PROFESSIONALS
Subchapter A—Physicians’ Services
SEC. 4501. ESTABLISHMENT OF SINGLE CONVERSION FACTOR FOR
1998.
(a) IN GENERAL.—Section 1848(d)(1) (42 U.S.C. 1395w–4(d)(1))
is amended—
(1) by redesignating subparagraph (C) as subparagraph
(D), and
(2) by inserting after subparagraph (B) the following:
‘‘(C) SPECIAL RULES FOR 1998.—The single conversion
factor for 1998 under this subsection shall be the conversion
factor for primary care services for 1997, increased by
the Secretary’s estimate of the weighted average of the
three separate updates that would otherwise occur were
it not for the enactment of chapter 1 of subtitle F of
title IV of the Balanced Budget Act of 1997.’’.
(b) CONFORMING
AMENDMENTS.—Section 1848 (42 U.S.C.
1395w–4) is amended—
(1) by striking ‘‘(or factors)’’ each place it appears in sub-
section (d)(1)(A) and (d)(1)(D)(ii) (as redesignated by subsection
(a)(1)),
(2) in subsection (d)(1)(A), by striking ‘‘or updates’’,
(3) in subsection (d)(1)(D) (as redesignated by subsection
(a)(1)), by striking ‘‘(or updates)’’ each place it appears, and
(4) in subsection (j)(1), by striking ‘‘The term’’ and inserting
‘‘For services furnished before January 1, 1998, the term’’.
SEC. 4502. ESTABLISHING UPDATE TO CONVERSION FACTOR TO
MATCH SPENDING UNDER SUSTAINABLE GROWTH RATE.
(a) UPDATE.—
(1) IN
GENERAL.—Section 1848(d)(3) (42 U.S.C. 1395w–
4(d)(3)) is amended to read as follows:
‘‘(3) UPDATE.—
‘‘(A) IN GENERAL.—Unless otherwise provided by law,
subject to subparagraph (D) and the budget-neutrality fac-
tor 
determined 
by 
the 
Secretary 
under 
subsection
(c)(2)(B)(ii), the update to the single conversion factor estab-
lished in paragraph (1)(C) for a year beginning with 1999
is equal to the product of—
‘‘(i) 1 plus the Secretary’s estimate of the percent-
age increase in the MEI (as defined in section
1842(i)(3)) for the year (divided by 100), and
‘‘(ii) 1 plus the Secretary’s estimate of the update
adjustment factor for the year (divided by 100),
minus 1 and multiplied by 100.
H. R. 2015—183
‘‘(B) UPDATE
ADJUSTMENT
FACTOR.—For purposes of
subparagraph (A)(ii), the ‘update adjustment factor’ for a
year is equal (as estimated by the Secretary) to—
‘‘(i) the difference between (I) the sum of the
allowed expenditures for physicians’ services (as deter-
mined under subparagraph (C)) for the period begin-
ning April 1, 1997, and ending on March 31 of the
year involved, and (II) the amount of actual expendi-
tures for physicians’ services furnished during the
period beginning April 1, 1997, and ending on March
31 of the preceding year; divided by
‘‘(ii) the actual expenditures for physicians’ services
for the 12-month period ending on March 31 of the
preceding year, increased by the sustainable growth
rate under subsection (f) for the fiscal year which
begins during such 12-month period.
‘‘(C) DETERMINATION OF ALLOWED EXPENDITURES.—For
purposes of this paragraph, the allowed expenditures for
physicians’ services for the 12-month period ending with
March 31 of—
‘‘(i) 1997 is equal to the actual expenditures for
physicians’ services furnished during such 12-month
period, as estimated by the Secretary; or
‘‘(ii) a subsequent year is equal to the allowed
expenditures for physicians’ services for the previous
year, increased by the sustainable growth rate under
subsection (f) for the fiscal year which begins during
such 12-month period.
‘‘(D) RESTRICTION ON VARIATION FROM MEDICARE ECO-
NOMIC INDEX.—Notwithstanding the amount of the update
adjustment factor determined under subparagraph (B) for
a year, the update in the conversion factor under this
paragraph for the year may not be—
‘‘(i) greater than 100 times the following amount:
(1.03 + (MEI percentage/100)) ¥1; or
‘‘(ii) less than 100 times the following amount:
(0.93 + (MEI percentage/100)) ¥1,
where ‘MEI percentage’ means the Secretary’s estimate
of the percentage increase in the MEI (as defined in section
1842(i)(3)) for the year involved.’’.
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to the update for years beginning with
1999.
(b) ELIMINATION
OF
REPORT.—Section 1848(d) (42 U.S.C.
1395w–4(d)) is amended by striking paragraph (2).
SEC. 4503. REPLACEMENT OF VOLUME PERFORMANCE STANDARD
WITH SUSTAINABLE GROWTH RATE.
(a) IN GENERAL.—Section 1848(f) (42 U.S.C. 1395w–4(f)) is
amended by striking paragraphs (2) through (5) and inserting the
following:
‘‘(2) SPECIFICATION
OF
GROWTH
RATE.—The sustainable
growth rate for all physicians’ services for a fiscal year (begin-
ning with fiscal year 1998) shall be equal to the product of—
‘‘(A) 1 plus the Secretary’s estimate of the weighted
average percentage increase (divided by 100) in the fees
for all physicians’ services in the fiscal year involved,
H. R. 2015—184
‘‘(B) 1 plus the Secretary’s estimate of the percentage
change (divided by 100) in the average number of individ-
uals enrolled under this part (other than Medicare+Choice
plan enrollees) from the previous fiscal year to the fiscal
year involved,
‘‘(C) 1 plus the Secretary’s estimate of the projected
percentage growth in real gross domestic product per capita
(divided by 100) from the previous fiscal year to the fiscal
year involved, and
‘‘(D) 1 plus the Secretary’s estimate of the percentage
change (divided by 100) in expenditures for all physicians’
services in the fiscal year (compared with the previous
fiscal year) which will result from changes in law and
regulations, determined without taking into account esti-
mated changes in expenditures resulting from the update
adjustment factor determined under subsection (d)(3)(B),
minus 1 and multiplied by 100.
‘‘(3) DEFINITIONS.—In this subsection:
‘‘(A) SERVICES
INCLUDED
IN
PHYSICIANS’ SERVICES.—
The term ‘physicians’ services’ includes other items and
services (such as clinical diagnostic laboratory tests and
radiology services), specified by the Secretary, that are
commonly performed or furnished by a physician or in
a physician’s office, but does not include services furnished
to a Medicare+Choice plan enrollee.
‘‘(B) MEDICARE+CHOICE
PLAN
ENROLLEE.—The term
‘Medicare+Choice plan enrollee’ means, with respect to a
fiscal year, an individual enrolled under this part who
has elected to receive benefits under this title for the fiscal
year through a Medicare+Choice plan offered under part
C, and also includes an individual who is receiving benefits
under this part through enrollment with an eligible
organization with a risk-sharing contract under section
1876.’’.
(b) CONFORMING AMENDMENT.—So much of section 1848(f) (42
U.S.C. 1395w–4(f)) as precedes paragraph (2) is amended to read
as follows:
‘‘(f) SUSTAINABLE GROWTH RATE.—
‘‘(1) PUBLICATION.—The Secretary shall cause to have pub-
lished in the Federal Register the sustainable growth rate
for each fiscal year beginning with fiscal year 1998. Such
publication shall occur by not later than August 1 before each
fiscal year, except that such rate for fiscal year 1998 shall
be published not later than November 1, 1997.’’.
SEC. 4504. PAYMENT RULES FOR ANESTHESIA SERVICES.
(a) IN GENERAL.—Section 1848(d)(1) (42 U.S.C. 1395w–4(d)(1)),
as amended by section 4501(a), is amended—
(1) in subparagraph (C), by striking ‘‘The single’’ and insert-
ing ‘‘Except as provided in subparagraph (D), the single’’;
(2) by redesignating subparagraph (D) as subparagraph
(E); and
(3) by inserting after subparagraph (C) the following new
subparagraph:
‘‘(D) SPECIAL RULES FOR ANESTHESIA SERVICES.—The
separate conversion factor for anesthesia services for a
year shall be equal to 46 percent of the single conversion
H. R. 2015—185
factor established for other physicians’ services, except as
adjusted for changes in work, practice expense, or mal-
practice relative value units.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to services furnished on or after January 1, 1998.
SEC. 4505. IMPLEMENTATION OF RESOURCE-BASED METHODOLOGIES.
(a) 1-YEAR DELAY
IN IMPLEMENTATION.—Section 1848(c) (42
U.S.C. 1395w–4(c)) is amended—
(1) in paragraph (2)(C)(ii), in the matter before subclause
(I) and after subclause (II), by striking ‘‘1998’’ and inserting
‘‘1999’’ each place it appears; and
(2) in paragraph (3)(C)(ii), by striking ‘‘1998’’ and inserting
‘‘1999’’.
(b) PHASED-IN IMPLEMENTATION.—
(1) IN
GENERAL.—Section 1848(c)(2)(C)(ii) (42 U.S.C.
1395w–4(c)(2)(C)(ii)) is further amended—
(A) by striking the comma at the end of clause (ii)
and inserting a period and the following:
‘‘For 1999, such number of units shall be determined
based 75 percent on such product and based 25 percent
on the relative practice expense resources involved in
furnishing the service. For 2000, such number of units
shall be determined based 50 percent on such product
and based 50 percent on such relative practice expense
resources. For 2001, such number of units shall be
determined based 25 percent on such product and
based 75 percent on such relative practice expense
resources. For a subsequent year, such number of units
shall be determined based entirely on such relative
practice expense resources.’’.
(2) CONFORMING AMENDMENT.—Section 1848(c)(3)(C)(ii) (42
U.S.C. 1395w–4(c)(3)(C)(ii)), as amended by subsection (a)(2),
is amended by striking ‘‘1999’’ and inserting ‘‘2002’’.
(c) REVIEW BY COMPTROLLER GENERAL.—The Comptroller Gen-
eral of the United States shall review and evaluate the proposed
rule on resource-based methodology for practice expenses issued
by the Secretary of Health and Human Services. The Comptroller
General shall, within 6 months of the date of the enactment of
this Act, report to the Committees on Commerce and Ways and
Means of the House of Representatives and the Committee on
Finance of the Senate the results of its evaluation, including an
analysis of—
(1) the adequacy of the data used in preparing the rule,
(2) categories of allowable costs,
(3) methods for allocating direct and indirect expenses,
(4) the potential impact of the rule on beneficiary access
to services, and
(5) any other matters related to the appropriateness of
resource-based methodology for practice expenses.
The Comptroller General shall consult with representatives of physi-
cians’ organizations with respect to matters of both data and meth-
odology.
(d) REQUIREMENTS
FOR DEVELOPING NEW RESOURCE-BASED
PRACTICE EXPENSE RELATIVE VALUE UNITS.—
(1) DEVELOPMENT.—For purposes of section 1848(c)(2)(C)(ii)
of the Social Security Act, the Secretary of Health and Human
H. R. 2015—186
Services shall develop new resource-based relative value units.
In developing such units the Secretary shall—
(A) utilize, to the maximum extent practicable, gen-
erally accepted cost accounting principles which (i) recog-
nize all staff, equipment, supplies, and expenses, not just
those which can be tied to specific procedures, and (ii)
use actual data on equipment utilization and other key
assumptions;
(B) consult with organizations representing physicians
regarding methodology and data to be used; and
(C) develop a refinement process to be used during
each of the 4 years of the transition period.
(2) REPORT.—The Secretary shall transmit a report by
March 1, 1998, on the development of resource-based relative
value units under paragraph (1) to the Committee on Ways
and Means and the Committee on Commerce of the House
of Representatives and the Committee on Finance of the Senate.
The report shall include a presentation of data to be used
in developing the value units and an explanation of the meth-
odology.
(3) NOTICE OF PROPOSED RULEMAKING.—The Secretary shall
publish a notice of proposed rulemaking with the new resource-
based relative value units on or before May 1, 1998, and shall
allow for a 90-day public comment period.
(4) ITEMS INCLUDED.—The new proposed rule shall consider
the following:
(A) Impact projections which compare new proposed
payment amounts on data on actual physician practice
expenses.
(B) Impact projections for hospital-based and other
specialties, geographic payment localities, and urban versus
rural localities.
(e) ADJUSTMENTS TO RELATIVE VALUE UNITS FOR 1998.—Section
1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended by adding at the
end the following new subparagraph:
‘‘(G) ADJUSTMENTS
IN
RELATIVE
VALUE
UNITS
FOR
1998.—
‘‘(i) IN GENERAL.—The Secretary shall—
‘‘(I) subject to clauses (iv) and (v), reduce the
practice expense relative value units applied to
any services described in clause (ii) furnished in
1998 to a number equal to 110 percent of the
number of work relative value units, and
‘‘(II) increase the practice expense relative
value units for office visit procedure codes during
1998 by a uniform percentage which the Secretary
estimates will result in an aggregate increase in
payments for such services equal to the aggregate
decrease in payments by reason of subclause (I).
‘‘(ii) SERVICES COVERED.—For purposes of clause
(i), the services described in this clause are physicians’
services that are not described in clause (iii) and for
which—
‘‘(I) there are work relative value units, and
H. R. 2015—187
‘‘(II) the number of practice expense relative
value units (determined for 1998) exceeds 110 per-
cent of the number of work relative value units
(determined for such year).
‘‘(iii) EXCLUDED SERVICES.—For purposes of clause
(ii), 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
setting.
‘‘(iv) LIMITATION ON AGGREGATE REALLOCATION.—
If the application of clause (i)(I) would result in an
aggregate amount of reductions under such clause in
excess of $390,000,000, such clause shall be applied
by substituting for 110 percent such greater percentage
as the Secretary estimates will result in the aggregate
amount of such reductions equaling $390,000,000.
‘‘(v) NO REDUCTION FOR CERTAIN SERVICES.—Prac-
tice expense relative value units for a procedure per-
formed in an office or in a setting out of an office
shall not be reduced under clause (i) if the in-office
or out-of-office practice expense relative value, respec-
tively, for the procedure would increase under the pro-
posed rule on resource-based practice expenses issued
by the Secretary on June 18, 1997 (62 Federal Register
33158 et seq.).’’.
(f) APPLICATION OF RESOURCE-BASED METHODOLOGY TO MAL-
PRACTICE RELATIVE VALUE UNITS.—
(1) IN
GENERAL.—Section 1848(c)(2)(C)(iii) (42 U.S.C.
1395w–4(c)(2)(C)(iii)) is amended—
(A) in paragraph (2)(C)(iii)—
(i) by inserting ‘‘for the service for years before
2000’’ before ‘‘equal’’, and
(ii) by striking the period at the end and inserting
a comma and by adding at the end the following flush
matter:
‘‘and for years beginning with 2000 based on the mal-
practice expense resources involved in furnishing the
service.’’; and
(B) in paragraph (3)(C)(iii), by striking ‘‘The mal-
practice’’ and inserting ‘‘For years before 1999, the mal-
practice’’.
(2) APPLICATION OF CERTAIN BUDGET NEUTRALITY PROVI-
SIONS.—In implementing the amendment made by paragraph
(1)(A)(ii), the provisions of clauses (ii)(II) and (iii) of section
1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–
4(c)(2)(B)) shall apply in the same manner as they apply to
adjustments under clause (ii)(I) of such section.
SEC. 4506. DISSEMINATION OF INFORMATION ON HIGH PER DIS-
CHARGE RELATIVE VALUES FOR IN-HOSPITAL PHYSI-
CIANS’ SERVICES.
(a) DETERMINATION AND NOTICE CONCERNING HOSPITAL-SPE-
CIFIC PER DISCHARGE RELATIVE VALUES.—
(1) IN
GENERAL.—For 1999 and 2001 the Secretary of
Health and Human Services shall determine for each hospital—
(A) the hospital-specific per discharge relative value
under subsection (b); and
H. R. 2015—188
(B) whether the hospital-specific relative value is pro-
jected to be excessive (as determined based on such value
represented as a percentage of the median of hospital-
specific per discharge relative values determined under
subsection (b)).
(2) NOTICE
TO
SUBSET
OF
MEDICAL
STAFFS; EVALUATION
OF RESPONSES.—The Secretary shall notify the medical execu-
tive committee of a subset of the hospitals identified under
paragraph (1)(B) as having an excessive hospital-specific rel-
ative value, of the determinations made with respect to the
medical staff under paragraph (1). The Secretary shall evaluate
the responses of the hospitals so notified with the responses
of other hospitals so identified that were not so notified.
(b) DETERMINATION OF HOSPITAL-SPECIFIC PER DISCHARGE REL-
ATIVE VALUES.—
(1) IN GENERAL.—For purposes of this section, the hospital-
specific per discharge relative value for the medical staff of
a hospital (other than a teaching hospital) for a year shall
be equal to the average per discharge relative value (as deter-
mined under section 1848(c)(2) of the Social Security Act (42
U.S.C. 1395w–4(c)(2)) for physicians’ services furnished to
inpatients of the hospital by the hospital’s medical staff (exclud-
ing interns and residents) during the second year preceding
that calendar year, adjusted for variations in case-mix among
hospitals and disproportionate share status and teaching status
among hospitals (as determined by the Secretary under para-
graph (3)).
(2) SPECIAL RULE FOR TEACHING HOSPITALS.—The hospital-
specific relative value projected for a teaching hospital in a
year shall be equal to the sum of—
(A) the average per discharge relative value (as deter-
mined under section 1848(c)(2) of such Act) for physicians’
services furnished to inpatients of the hospital by the hos-
pital’s medical staff (excluding interns and residents) dur-
ing the second year preceding that calendar year, and
(B) the equivalent per discharge relative value (as
determined under such section) for physicians’ services fur-
nished to inpatients of the hospital by interns and residents
of the hospital during the second year preceding that cal-
endar year, adjusted for variations in case-mix among hos-
pitals, and in disproportionate share status and teaching
status among hospitals (as determined by the Secretary
under paragraph (3)).
The Secretary shall determine the equivalent relative value
unit per discharge for interns and residents based on the best
available data and may make such adjustment in the aggregate.
(3) ADJUSTMENT
FOR
TEACHING
AND
DISPROPORTIONATE
SHARE HOSPITALS.—The Secretary shall adjust the allowable
per discharge relative values otherwise determined under this
subsection to take into account the needs of teaching hospitals
and hospitals receiving additional payments under subpara-
graphs (F) and (G) of section 1886(d)(5) of the Social Security
Act (42 U.S.C. 1395ww(d)(5)). The adjustment for teaching sta-
tus or disproportionate share shall not be less than zero.
(c) DEFINITIONS.—For purposes of this section:
H. R. 2015—189
(1) HOSPITAL.—The term ‘‘hospital’’ means a subsection
(d) hospital as defined in section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)) .
(2) MEDICAL STAFF.—An individual furnishing a physician’s
service is considered to be on the medical staff of a hospital—
(A) if (in accordance with requirements for hospitals
established by the Joint Commission on Accreditation of
Health Organizations)—
(i) the individual is subject to bylaws, rules, and
regulations established by the hospital to provide a
framework for the self-governance of medical staff
activities,
(ii) subject to the bylaws, rules, and regulations,
the individual has clinical privileges granted by the
hospital’s governing body, and
(iii) under the clinical privileges, the individual
may provide physicians’ services independently within
the scope of the individual’s clinical privileges, or
(B) if the physician provides at least one service to
an individual entitled to benefits under this title in that
hospital.
(3) PHYSICIANS’ SERVICES.—The term ‘‘physicians’ services’’
means the services described in section 1848(j)(3) of the Social
Security Act (42 U.S.C. 1395w–4(j)(3)).
(4) RURAL
AREA; URBAN
AREA.—The terms ‘‘rural area’’
and ‘‘urban area’’ have the meaning given those terms under
section 1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)).
(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Health and Human Services.
(6) TEACHING
HOSPITAL.—The term ‘‘teaching hospital’’
means a hospital which has a teaching program approved as
specified in section 1861(b)(6) of the Social Security Act (42
U.S.C. 1395x(b)(6)).
SEC. 4507. USE OF PRIVATE CONTRACTS BY MEDICARE BENE-
FICIARIES.
(a) ITEMS
OR SERVICES PROVIDED THROUGH PRIVATE CON-
TRACTS.—
(1) IN GENERAL.—Section 1802 (42 U.S.C. 1395a) is amend-
ed by adding at the end the following new subsection:
‘‘(b) USE OF PRIVATE CONTRACTS BY MEDICARE BENEFICIARIES.—
‘‘(1) IN GENERAL.—Subject to the provisions of this sub-
section, nothing in this title shall prohibit a physician or practi-
tioner from entering into a private contract with a medicare
beneficiary for any item or service—
‘‘(A) for which no claim for payment is to be submitted
under this title, and
‘‘(B) for which the physician or practitioner receives—
‘‘(i) no reimbursement under this title directly or
on a capitated basis, and
‘‘(ii) receives no amount for such item or service
from an organization which receives reimbursement
for such item or service under this title directly or
on a capitated basis.
‘‘(2) BENEFICIARY PROTECTIONS.—
‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to
any contract unless—
H. R. 2015—191
‘‘(C) ENFORCEMENT.—If a physician or practitioner
signing an affidavit under subparagraph (B) knowingly
and willfully submits a claim under this title for any item
or service provided during the 2-year period described in
subparagraph (B)(ii) (or receives any reimbursement or
amount described in paragraph (1)(B) for any such item
or service) with respect to such affidavit—
‘‘(i) this subsection shall not apply with respect
to any items and services provided by the physician
or practitioner pursuant to any contract on and after
the date of such submission and before the end of
such period; and
‘‘(ii) no payment shall be made under this title
for any item or service furnished by the physician
or practitioner during the period described in clause
(i) (and no reimbursement or payment of any amount
described in paragraph (1)(B) shall be made for any
such item or service).
‘‘(4) LIMITATION ON ACTUAL CHARGE AND CLAIM SUBMISSION
REQUIREMENT NOT APPLICABLE.—Section 1848(g) shall not apply
with respect to any item or service provided to a medicare
beneficiary under a contract described in paragraph (1).
‘‘(5) DEFINITIONS.—In this subsection:
‘‘(A) MEDICARE
BENEFICIARY.—The term ‘medicare
beneficiary’ means an individual who is entitled to benefits
under part A or enrolled under part B.
‘‘(B) PHYSICIAN.—The term ‘physician’ has the meaning
given such term by section 1861(r)(1).
‘‘(C) PRACTITIONER.—The term ‘practitioner’ has the
meaning given such term by section 1842(b)(18)(C).’’
(2) CONFORMING AMENDMENTS.—
(A) Section 1802 (42 U.S.C. 1395a) is amended by
striking ‘‘Any’’ and inserting ‘‘(a) BASIC
FREEDOM
OF
CHOICE.—Any’’.
(B) Section 1862(a) (42 U.S.C. 1395y(a)), as amended
by sections 4319(b) and 4432, is amended by striking ‘‘or’’
at the end of paragraph (17), by striking the period at
the end of paragraph (18) and inserting ‘‘; or’’, and by
adding after paragraph (18) the following new paragraph:
‘‘(19) which are for items or services which are furnished
pursuant to a private contract described in section 1802(b).’’.
(b) REPORT.—Not later than October 1, 2001, the Secretary
of Health and Human Services shall submit a report to Congress
on the effect on the program under this title of private contracts
entered into under the amendment made by subsection (a). Such
report shall include—
(1) analyses regarding—
(A) the fiscal impact of such contracts on total Federal
expenditures under title XVIII of the Social Security Act
and on out-of-pocket expenditures by medicare beneficiaries
for health services under such title; and
(B) the quality of the health services provided under
such contracts; and
(2) recommendations as to whether medicare beneficiaries
should continue to be able to enter private contracts under
section 1802(b) of such Act (as added by subsection (a)) and
H. R. 2015—192
if so, what legislative changes, if any should be made to improve
such contracts.
(c) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply with respect to contracts entered into on and after
January 1, 1998.
Subchapter B—Other Health Care Professionals
SEC. 4511. INCREASED MEDICARE REIMBURSEMENT FOR NURSE
PRACTITIONERS AND CLINICAL NURSE SPECIALISTS.
(a) REMOVAL OF RESTRICTIONS ON SETTINGS.—
(1) IN GENERAL.—Clause (ii) of section 1861(s)(2)(K) (42
U.S.C. 1395x(s)(2)(K)) is amended to read as follows:
‘‘(ii) services which would be physicians’ services if fur-
nished by a physician (as defined in subsection (r)(1)) and
which are performed by a nurse practitioner or clinical nurse
specialist (as defined in subsection (aa)(5)) working in collabora-
tion (as defined in subsection (aa)(6)) with a physician (as
defined in subsection (r)(1)) which the nurse practitioner or
clinical nurse specialist is legally authorized to perform by
the State in which the services are performed, and such services
and supplies furnished as an incident to such services as would
be covered under subparagraph (A) if furnished incident to
a physician’s professional service, but only if no facility or
other provider charges or is paid any amounts with respect
to the furnishing of such services;’’.
(2) CONFORMING AMENDMENTS.—(A) Section 1861(s)(2)(K)
(42 U.S.C. 1395x(s)(2)(K)) is further amended—
(i) in clause (i), by inserting ‘‘and such services and
supplies furnished as incident to such services as would
be covered under subparagraph (A) if furnished incident
to a physician’s professional service; and’’ after ‘‘are per-
formed,’’; and
(ii) by striking clauses (iii) and (iv).
(B) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended
by striking ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’ and insert-
ing ‘‘subsection (s)(2)(K)’’.
(C) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended
by striking ‘‘section 1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’ and
inserting ‘‘section 1861(s)(2)(K)’’.
(D) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is
amended 
by 
striking 
‘‘section 
1861(s)(2)(K)(i) 
or
1861(s)(2)(K)(iii)’’ and inserting ‘‘section 1861(s)(2)(K)’’.
(E) Section 1888(e)(2)(A)(ii) (42 U.S.C. 1395yy(e)(2)(A)(ii)),
as added by section 4432(a) (relating to prospective payment
system for rehabilitation hospitals), is amended by striking
‘‘through (iii)’’ and inserting ‘‘and (ii)’’.
(b) INCREASED PAYMENT.—
(1) FEE SCHEDULE AMOUNT.—Subparagraph (O) of section
1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended to read as follows:
‘‘(O) 
with 
respect 
to 
services 
described 
in 
section
1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical nurse
specialist services), the amounts paid shall be equal to 80
percent of (i) the lesser of the actual charge or 85 percent
of the fee schedule amount provided under section 1848, or
(ii) in the case of services as an assistant at surgery, the
lesser of the actual charge or 85 percent of the amount that
H. R. 2015—193
would otherwise be recognized if performed by a physician
who is serving as an assistant at surgery; and’’.
(2) CONFORMING AMENDMENTS.—Section 1833(r) (42 U.S.C.
1395l(r)) is amended—
(A) 
in 
paragraph 
(1), 
by 
striking 
‘‘section
1861(s)(2)(K)(iii) (relating to nurse practitioner or clinical
nurse specialist services provided in a rural area)’’ and
inserting ‘‘section 1861(s)(2)(K)(ii) (relating to nurse practi-
tioner or clinical nurse specialist services)’’;
(B) by striking paragraph (2);
(C) 
in 
paragraph 
(3), 
by 
striking 
‘‘section
1861(s)(2)(K)(iii)’’ and inserting ‘‘section 1861(s)(2)(K)(ii)’’;
and
(D) by redesignating paragraph (3) as paragraph (2).
(c) DIRECT PAYMENT FOR NURSE PRACTITIONERS AND CLINICAL
NURSE
SPECIALISTS.—Section 
1832(a)(2)(B)(iv) 
(42 
U.S.C.
1395k(a)(2)(B)(iv)) is amended by striking ‘‘provided in a rural area
(as defined in section 1886(d)(2)(D))’’ and inserting ‘‘but only if
no facility or other provider charges or is paid any amounts with
respect to the furnishing of such services’’.
(d) DEFINITION OF CLINICAL NURSE SPECIALIST CLARIFIED.—
Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(5)’’;
(2) by striking ‘‘The term ‘physician assistant’ ’’ and all
that follows through ‘‘who performs’’ and inserting ‘‘The term
‘physician assistant’ and the term ‘nurse practitioner’ mean,
for purposes of this title, a physician assistant or nurse practi-
tioner who performs’’; and
(3) by adding at the end the following new subparagraph:
‘‘(B) The term ‘clinical nurse specialist’ means, for purposes
of this title, an individual who—
‘‘(i) is a registered nurse and is licensed to practice nursing
in the State in which the clinical nurse specialist services
are performed; and
‘‘(ii) holds a master’s degree in a defined clinical area
of nursing from an accredited educational institution.’’.
(e) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to services furnished and supplies provided
on and after January 1, 1998.
SEC. 4512. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN
ASSISTANTS.
(a) 
REMOVAL
OF
RESTRICTION
ON
SETTINGS.—Section
1861(s)(2)(K)(i) (42 U.S.C. 1395x(s)(2)(K)(i)), as amended by section
4511, is amended—
(1) by striking ‘‘(I) in a hospital’’ and all that follows
through ‘‘shortage area,’’, and
(2) by adding at the end the following: ‘‘but only if no
facility or other provider charges or is paid any amounts with
respect to the furnishing of such services,’’.
(b) INCREASED PAYMENT.—
(1) FEE
SCHEDULE
AMOUNT.—Section 1833(a)(1)(O) (42
U.S.C. 1395l(a)(1)(O)), as amended by section 4511, is further
amended—
(A) by striking ‘‘section 1861(s)(2)(K)(ii)’’ and inserting
‘‘1861(s)(2)(K)’’, and
H. R. 2015—194
(B) by striking ‘‘nurse practitioner or clinical nurse
specialist services’’ and inserting ‘‘services furnished by
physician assistants, nurse practitioners, or clinic nurse
specialists’’.
(2) CONFORMING AMENDMENT.—Paragraph (12) of section
1842(b) (42 U.S.C. 1395u(b)) is repealed.
(c) REMOVAL OF RESTRICTION ON EMPLOYMENT RELATIONSHIP.—
Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)), as amended by section
4205, is amended by adding at the end the following new sentence:
‘‘For purposes of subparagraph (C) of the first sentence of this
paragraph, an employment relationship may include any independ-
ent contractor arrangement, and employer status shall be deter-
mined in accordance with the law of the State in which the services
described in such clause are performed.’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to services furnished and supplies provided
on and after January 1, 1998.
SEC. 4513. NO X-RAY REQUIRED FOR CHIROPRACTIC SERVICES.
(a) IN GENERAL.—Section 1861(r)(5) (42 U.S.C. 1395x(r)(5)) is
amended by striking ‘‘demonstrated by X-ray to exist’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
applies to services furnished on or after January 1, 2000.
(c) UTILIZATION GUIDELINES.—The Secretary of Health and
Human Services shall develop and implement utilization guidelines
relating to the coverage of chiropractic services under part B of
title XVIII of the Social Security Act in cases in which a subluxation
has not been demonstrated by X-ray to exist.
CHAPTER 2—PAYMENT FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES
SEC. 4521. ELIMINATION OF FORMULA-DRIVEN OVERPAYMENTS (FDO)
FOR CERTAIN OUTPATIENT HOSPITAL SERVICES.
(a) ELIMINATION OF FDO FOR AMBULATORY SURGICAL CENTER
PROCEDURES.—Section 
1833(i)(3)(B)(i)(II) 
(42 
U.S.C.
1395l(i)(3)(B)(i)(II)) is amended—
(1) by striking ‘‘of 80 percent’’; and
(2) by striking the period at the end and inserting the
following: ‘‘, less the amount a provider may charge as described
in clause (ii) of section 1866(a)(2)(A).’’.
(b) ELIMINATION OF FDO FOR RADIOLOGY SERVICES AND DIAG-
NOSTIC
PROCEDURES.—Section 
1833(n)(1)(B)(i) 
(42 
U.S.C.
1395l(n)(1)(B)(i)) is amended—
(1) by striking ‘‘of 80 percent’’, and
(2) by inserting before the period at the end the following:
‘‘, less the amount a provider may charge as described in
clause (ii) of section 1866(a)(2)(A)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to services furnished during portions of cost reporting
periods occurring on or after October 1, 1997.
SEC. 4522. EXTENSION OF REDUCTIONS IN PAYMENTS FOR COSTS OF
HOSPITAL OUTPATIENT SERVICES.
(a) REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS.—
Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(S)(ii)(I)) is amend-
ed by striking ‘‘through 1998’’ and inserting ‘‘through 1999 and
during fiscal year 2000 before January 1, 2000’’.