II
103D CONGRESS
2D SESSION
H. R. 5252
IN THE SENATE OF THE UNITED STATES
OCTOBER 8 (legislative day, SEPTEMBER 12), 1994
Received
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.
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-
justment to the routine service cost limits required under
section 1888(a)(4) of the Social Security Act.
(b) CLARIFICATION OF REPEAL OF UTILIZATION RE-
VIEW REQUIREMENTS.—
(1) IN GENERAL.—(A) Section 1814(a)(5) (42
U.S.C. 1395f(a)(5)) is amended—
(i) by striking ‘‘and with respect’’ and all
that follows through ‘‘regulations’’;
(ii) by striking ‘‘or skilled nursing facility,
as the case may be’’; and
(iii) by striking ‘‘or facility’’.
(B) Section 1866(d) (42 U.S.C. 1395cc(d)) is
amended—
(i) by striking ‘‘or skilled nursing facility’’;
(ii) by striking ‘‘or facility’’ each place it
appears;
(iii) by striking ‘‘or for post-hospital’’ and
all that follows through ‘‘the case may be’’; and
(iv) by striking ‘‘, or (in the case of’’ and
all that follows through ‘‘transfer agreement,’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall take effect as if included in
the enactment of OBRA–1987.
(c) CONFORMING AMENDMENTS TO NURSING HOME
REFORM.—
(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)).