I
104TH CONGRESS
1ST SESSION
H. R. 2173
To amend title XVIII of the Social Security Act to modify the types of
ownership and compensation arrangements which are not considered ar-
rangements between a physician and an entity furnishing a designated
health service under the Medicare Program for purposes of the provisions
of such title which deny payment for designated health services for
which a referral is made by a physician with an ownership or compensa-
tion arrangement with the entity furnishing the service.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 1995
Mr. STARK introduced the following bill; which was referred to the Committee
on Commerce, and in addition to the Committee on Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To amend title XVIII of the Social Security Act to modify
the types of ownership and compensation arrangements
which are not considered arrangements between a physi-
cian and an entity furnishing a designated health service
under the Medicare Program for purposes of the provi-
sions of such title which deny payment for designated
health services for which a referral is made by a physi-
cian with an ownership or compensation arrangement
with the entity furnishing the service.
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 ‘‘Medicare Physician
Ownership and Referral Amendments of 1995’’.
SEC. 2. MODIFICATIONS TO EXCEPTIONS FOR CERTAIN
ARRANGEMENTS.
(a) EXCEPTIONS FOR BOTH OWNERSHIP AND COM-
PENSATION ARRANGEMENTS.—
(1) REPEAL OF EXCEPTION FOR PHYSICIANS’
SERVICES.—Section 1877(b) of the Social Security
Act (42 U.S.C. 1395nn(b)) is amended by striking
‘‘Subsection (a)(1) shall not apply in the following
cases’’ and all that follows through paragraph (1).
(2) NEW
EXCEPTION
FOR
SHARED
FACILITY
SERVICES.—Section 1877(b) of such Act (42 U.S.C.
1395nn(b)), as amended by paragraph (1), is
amended by inserting before paragraph (2) the fol-
lowing new paragraph:
‘‘(1) SHARED FACILITY SERVICES.—
‘‘(A) IN
GENERAL.—Subsection (a)(1)
shall not apply in the case of a designated
health service consisting of a shared facility
service of a shared facility—
‘‘(i) that is furnished—
‘‘(I) personally by the referring
physician who is a shared facility phy-
sician or personally by an individual
directly employed by such a physician,
‘‘(II) by a shared facility in a
building in which the referring physi-
cian furnishes substantially all of the
services of the physician that are un-
related to the furnishing of shared fa-
cility services, and
‘‘(III) to a patient of a shared fa-
cility physician; and
‘‘(ii) that is billed by the referring
physician.
‘‘(B) SHARED FACILITY RELATED DEFINI-
TIONS.—
‘‘(i) SHARED
FACILITY
SERVICE.—
The term ‘shared facility service’ means,
with respect to a shared facility, a des-
ignated health service furnished by the fa-
cility to patients of shared facility physi-
cians.
‘‘(ii) SHARED
FACILITY.—The term
‘shared facility’ means an entity that fur-
nishes shared facility services under a
shared facility arrangement.
‘‘(iii) SHARED FACILITY PHYSICIAN.—
The term ‘shared facility physician’ means,
with respect to a shared facility, a physi-
cian who has a financial relationship under
a shared facility arrangement with the fa-
cility.
‘‘(iv) SHARED
FACILITY
ARRANGE-
MENT.—The term ‘shared facility arrange-
ment’ means, with respect to the provision
of shared facility services in a building, a
financial arrangement—
‘‘(I) which is only between physi-
cians who are providing services (un-
related to shared facility services) in
the same building,
‘‘(II) in which the overhead ex-
penses of the facility are shared, in
accordance with methods previously
determined by the physicians in the
arrangement, among the physicians in
the arrangement, and
‘‘(III) which, in the case of a cor-
poration, is wholly owned and con-
trolled by shared facility physicians.’’.
(3) INCLUSION OF DURABLE MEDICAL EQUIP-
MENT AND PARENTERAL AND ENTERAL NUTRIENTS,
EQUIPMENT, AND SUPPLIES IN EXCEPTION FOR IN-
OFFICE ANCILLARY SERVICES.—Section 1877(b)(2)
of such Act (42 U.S.C. 1395nn(b)(2)) is amended by
striking ‘‘In the case of’’ and all that follows
through ‘‘supplies)’’ and inserting ‘‘Subsection
(a)(1) shall not apply in the case of designated
health services’’.
(4) NEW
EXCEPTION
FOR
CAPITATED
PAY-
MENTS.—Section 1877(b) of such Act (42 U.S.C.
1395nn(b)) is amended—
(A) by redesignating paragraph (4) as
paragraph (5); and
(B) by inserting after paragraph (3) the
following new paragraph:
‘‘(4) OTHER
CAPITATED
PAYMENTS.—Sub-
section (a)(1) shall not apply in the case of a des-
ignated health service, if the designated health serv-
ice is included in the services for which a physician
or physician group is paid only on a capitated basis
by a health plan or insurer pursuant to a written ar-