1165
cians’ services (as determined under sub-
paragraph (C)) during the period begin-
ning July 1, 1997, and ending on June 30
of the year involved, and (II) the sum of
the amount of actual expenditures for phy-
sicians’ services furnished during the pe-
riod beginning July 1, 1997, and ending
on June 30 of the preceding year; divided
by
‘‘(ii) the actual expenditures for physi-
cians’ services for the 12-month period
ending on June 30 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
EX-
PENDITURES.—For purposes of this paragraph,
the allowed expenditures for physicians’ services
for the 12-month period ending with June 30
of—
‘‘(i) 1997 is equal to the actual ex-
penditures for physicians’ services fur-
nished during such 12-month period, as es-
timated by the Secretary; or
1166
‘‘(ii) a subsequent year is equal to the
allowed expenditures for physicians’ serv-
ices 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 ECONOMIC INDEX.—Notwithstanding
the amount of the update adjustment factor de-
termined 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 fol-
lowing 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 paragraph (1) shall apply to the update for years
beginning with 1999.
1167
(b) ELIMINATION OF REPORT.—Section 1848(d) (42
U.S.C. 1395w–4(d)) is amended by striking paragraph
(2).
SEC. 10603. 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 (beginning 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,
‘‘(B) 1 plus the Secretary’s estimate of the
percentage change (divided by 100) in the aver-
age number of individuals enrolled under this
part (other than MedicarePlus 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 do-
1168
mestic product per capita (divided by 100) from
the previous fiscal year to the fiscal year in-
volved, and
‘‘(D) 1 plus the Secretary’s estimate of the
percentage change (divided by 100) in expendi-
tures for all physicians’ services in the fiscal
year (compared with the previous fiscal year)
which will result from changes in law and regu-
lations, determined without taking into account
estimated changes in expenditures due to
changes in the volume and intensity of physi-
cians’ services resulting from changes in the up-
date to the conversion factor under subsection
(d)(3),
minus 1 and multiplied by 100.
‘‘(3) DEFINITIONS.—In this subsection:
‘‘(A) SERVICES INCLUDED IN PHYSICIANS’
SERVICES.—The term ‘physicians’ services’ in-
cludes other items and services (such as clinical
diagnostic laboratory tests and radiology serv-
ices), specified by the Secretary, that are com-
monly performed or furnished by a physician or
in a physician’s office, but does not include
services furnished to a MedicarePlus plan en-
rollee.
1169
‘‘(B) MEDICAREPLUS PLAN ENROLLEE.—
The term ‘MedicarePlus plan enrollee’ means,
with respect to a fiscal year, an individual en-
rolled under this part who has elected to receive
benefits under this title for the fiscal year
through a MedicarePlus plan offered under part
C, and also includes an individual who is receiv-
ing benefits under this part through enrollment
with an eligible organization with a risk-sharing
contract under section 1876.’’.
(b) CONFORMING AMENDMENTS.—Section 1848(f)
(42 U.S.C. 1395w–4(f)) is amended—
(1) in the heading, by striking ‘‘VOLUME PER-
FORMANCE STANDARD RATES OF INCREASE’’ and
inserting ‘‘SUSTAINABLE GROWTH RATE’’; and
(2) in paragraph (1)—
(A) in the heading, by striking ‘‘VOLUME
PERFORMANCE
STANDARD
RATES
OF
IN-
CREASE’’ and inserting ‘‘SUSTAINABLE GROWTH
RATE’’,
(B) by striking subparagraphs (A) and
(B); and
(C) in paragraph (1)(C)—
(i) in the heading, by striking ‘‘PER-
FORMANCE
STANDARD
RATES
OF
IN-
1170
CREASE’’ and inserting ‘‘SUSTAINABLE
GROWTH RATE’’;
(ii) in the first sentence, by striking
‘‘with 1991), the performance standard
rates of increase’’ and all that follows
through the first period and inserting
‘‘with 1999), the sustainable growth rate
for the fiscal year beginning in that year.’’;
and
(iii) in the second sentence, by strik-
ing ‘‘January 1, 1990, the performance
standard rate of increase under subpara-
graph (D) for fiscal year 1990’’ and insert-
ing ‘‘January 1, 1999, the sustainable
growth rate for fiscal year 1999’’.
SEC. 10604. PAYMENT RULES FOR ANESTHESIA SERVICES.
(a) IN GENERAL.—Section 1848(d)(1) (42 U.S.C.
1395w–4(d)(1)), as amended by section 10601(a), is
amended—
(1) in subparagraph (C), striking ‘‘The single’’
and inserting ‘‘Except as provided in subparagraph
(D), the single’’;
(2) by redesignating subparagraph (D) as sub-
paragraph (E); and
1171
(3) by inserting after subparagraph (C) the fol-
lowing 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 factor estab-
lished for other physicians’ services, except as
adjusted for changes in work, practice expense,
or malpractice relative value units. ’’.
(b) CLASSIFICATION OF ANESTHESIA SERVICES.—
The first sentence of section 1848(j)(1) (42 U.S.C.
1395w–4(j)(1)) is amended—
(1) by striking ‘‘and including anesthesia serv-
ices’’; and
(2) by inserting before the period the following:
‘‘(including anesthesia services)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to services furnished on or after
January 1, 1998.
SEC. 10605. IMPLEMENTATION OF RESOURCE-BASED PHYSI-
CIAN PRACTICE EXPENSE.
(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
1172
‘‘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.—Section
1848(c)(2)(C)(ii) (42 U.S.C. 1395w–4(c)(2)(C)(ii)) is fur-
ther amended—
(1) in subparagraph (C)(ii), in the matter fol-
lowing subclause (II), by inserting ‘‘, to the extent
provided under subparagraph (G),’’ after ‘‘based’’,
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(G) TRANSITIONAL RULE FOR RESOURCE-
BASED PRACTICE EXPENSE UNITS.—In applying
subparagraph (C)(ii) for 1999, 2000, 2001, and
any subsequent year, the number of units under
such subparagraph shall be based 75 percent,
50 percent, 25 percent, and 0 percent, respec-
tively, on the practice expense relative value
units in effect in 1998 (or the Secretary’s im-
putation of such units for new or revised codes)
and the remainder on the relative value expense
resources involved in furnishing the service.’’.
1173
SEC. 10606. DISSEMINATION OF INFORMATION ON HIGH
PER DISCHARGE RELATIVE VALUES FOR IN-
HOSPITAL PHYSICIANS’ SERVICES.
(a) DETERMINATION
AND
NOTICE
CONCERNING
HOSPITAL-SPECIFIC PER DISCHARGE RELATIVE VAL-
UES.—
(1) IN GENERAL.—For 1999 and 2001 the Sec-
retary of Health and Human Services shall deter-
mine for each hospital—
(A) the hospital-specific per discharge rel-
ative value under subsection (b); and
(B) whether the hospital-specific relative
value is projected to be excessive (as determined
based on such value represented as a percent-
age of the median of hospital-specific per dis-
charge relative values determined under sub-
section (b)).
(2) NOTICE
TO
MEDICAL
STAFFS
AND
CAR-
RIERS.—The Secretary shall notify the medical exec-
utive committee of each hospital identifies under
paragraph (1)(B) as having an excessive hospital-
specific relative value, of the determinations made
with respect to the medical staff under paragraph
(1).
(b) DETERMINATION
OF HOSPITAL-SPECIFIC PER
DISCHARGE RELATIVE VALUES.—
1174
(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 determined under
section 1848(c)(2) of the Social Security Act) for
physicians’ services furnished to inpatients of the
hospital by the hospital’s medical staff (excluding in-
terns and residents) during the second year preced-
ing that calendar year, adjusted for variations in
case-mix and disproportionate share status among
hospitals (as determined by the Secretary under
paragraph (3)).
(2) SPECIAL
RULE
FOR
TEACHING
HOS-
PITALS.—The hospital-specific relative value pro-
jected for a teaching hospital in a year shall be equal
to the sum of—
(A) the average per discharge relative
value (as determined under section 1848(c)(2)
of such Act) for physicians’ services furnished
to inpatients of the hospital by the hospital’s
medical staff (excluding interns and residents)
during the second year preceding that calendar
year, and
1175
(B) the equivalent per discharge relative
value (as determined under such section) for
physicians’ services furnished to inpatients of
the hospital by interns and residents of the hos-
pital during the second year preceding that cal-
endar year, adjusted for variations in case-mix,
disproportionate share status, and teaching sta-
tus among hospitals (as determined by the Sec-
retary 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
DIS-
PROPORTIONATE SHARE HOSPITALS.—The Secretary
shall adjust the allowable per discharge relative val-
ues otherwise determined under this subsection to
take into account the needs of teaching hospitals
and hospitals receiving additional payments under
subparagraphs (F) and (G) of section 1886(d)(5) of
the Social Security Act. The adjustment for teaching
status or disproportionate share shall not be less
than zero.
(c) DEFINITIONS.—For purposes of this section:
1176
(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 medi-
cal 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 govern-
ing body, and
(iii) under the clinical privileges, the
individual may provide physicians’’ services
independently within the scope of the indi-
vidual’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.
1177
(3) PHYSICIANS’ SERVICES.—The term ‘‘physi-
cians’’ services’’ means the services described in sec-
tion 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 pro-
gram approved as specified in section 1861(b)(6) of
the Social Security Act (42 U.S.C. 1395x(b)(6)).
SEC. 10607. NO X-RAY REQUIRED FOR CHIROPRACTIC SERV-
ICES.
(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, 1998.
1178
SEC. 10608. TEMPORARY COVERAGE RESTORATION FOR
PORTABLE 
ELECTROCARDIOGRAM 
TRANS-
PORTATION.
(a) IN GENERAL.—Effective for electrocardiogram
tests furnished during 1998, the Secretary of Health and
Human Services shall restore separate payment, under
part B of title XVIII of the Social Security Act, for the
transportation of electrocardiogram equipment (HCPCS
code R0076) based upon the status code and relative value
units established for such service as of December 31,
1996.
(b) DETERMINATION.—By not later than July 1,
1998, the Secretary of Health and Human Services shall
determine, taking into account the study of coverage of
portable electrocardiogram transportation conducted by
the Comptroller General and other relevant information,
including information submitted by interested parties,
whether coverage of portable electrocardiogram transpor-
tation should be provided under part B of title XVIII of
the Social Security Act.
CHAPTER 2—OTHER PAYMENT
PROVISIONS
SEC. 10611. PAYMENTS FOR DURABLE MEDICAL EQUIP-
MENT.
(a) REDUCTION IN PAYMENT AMOUNTS FOR ITEMS
OF DURABLE MEDICAL EQUIPMENT.—
1179
(1) 
FREEZE
IN
UPDATE
FOR
COVERED
ITEMS.—Section 
1834(a)(14) 
(42 
U.S.C.
1395m(a)(14)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (A);
(B) in subparagraph (B)—
(i) by striking ‘‘a subsequent year’’
and inserting ‘‘1993, 1994, 1995, 1996,
and 1997’’, and
(ii) by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
‘‘(C) for each of the years 1998 through
2002, 0 percentage points; and
‘‘(D) for a subsequent year, the percentage
increase in the consumer price index for all
urban consumers (U.S. urban average) for the
12-month period ending with June of the pre-
vious year.’’.
(2) UPDATE FOR ORTHOTICS AND PROSTHET-
ICS.—Section 
1834(h)(4)(A) 
(42 
U.S.C.
1395m(h)(4)(A)) is amended—
(A) by striking ‘‘, and’’ at the end of
clause (iii) and inserting a semicolon;
1180
(B) in clause (iv), by striking ‘‘a subse-
quent year’’ and inserting ‘‘1996 and 1997’’,
and
(C) by adding at the end the following new
clauses:
‘‘(v) for each of the years 1998
through 2002, 1 percent, and
‘‘(vi) for a subsequent year, the per-
centage increase in the consumer price
index for all urban consumers (United
States city average) for the 12-month pe-
riod ending with June of the previous
year;’’.
(c) PAYMENT FREEZE FOR PARENTERAL AND EN-
TERAL NUTRIENTS, SUPPLIES, AND EQUIPMENT.—In de-
termining the amount of payment under part B of title
XVIII of the Social Security Act with respect to parenteral
and enteral nutrients, supplies, and equipment during
each of the years 1998 through 2002, the charges deter-
mined to be reasonable with respect to such nutrients,
supplies, and equipment may not exceed the charges deter-
mined to be reasonable with respect to such nutrients,
supplies, and equipment during 1995.
1181
SEC. 10612. OXYGEN AND OXYGEN EQUIPMENT.
Section 1834(a)(9)(C) (42 U.S.C. 1395m(a)(9)(C))
is amended—
(1) by striking ‘‘and’’ at the end of clause (iii);
(2) in clause (iv)—
(A) by striking ‘‘a subsequent year’’ and
inserting ‘‘1993, 1994, 1995, 1996, and 1997’’,
and
(B) by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new
clauses:
‘‘(v) in each of the years 1998
through 2002, is 80 percent of the national
limited monthly payment rate computed
under subparagraph (B) for the item for
the year; and
‘‘(vi) in a subsequent year, is the na-
tional limited monthly payment rate com-
puted under subparagraph (B) for the item
for the year.’’.
SEC. 
10613. 
REDUCTION 
IN 
UPDATES 
TO 
PAYMENT
AMOUNTS FOR CLINICAL DIAGNOSTIC LAB-
ORATORY TESTS.
(a) 
CHANGE
IN
UPDATE.—Section
1833(h)(2)(A)(ii)(IV) (42 U.S.C. 1395l(h)(2)(A)(ii)(IV))
1182
is amended by inserting ‘‘and 1998 through 2002’’ after
‘‘1995’’.
(b) LOWERING CAP ON PAYMENT AMOUNTS.—Sec-
tion 1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is amend-
ed—
(1) in clause (vi), by striking ‘‘and’’ at the end;
(2) in clause (vii)—
(A) by inserting ‘‘and before January 1,
1998,’’ after ‘‘1995,’’, and
(B) by striking the period at the end and
inserting ‘‘, and’’; and
(3) by adding at the end the following new
clause:
‘‘(viii) after December 31, 1997, is equal to 72
percent of such median.’’.
SEC. 10614. SIMPLIFICATION IN ADMINISTRATION OF LAB-
ORATORY TESTS.
(a) SELECTION OF REGIONAL CARRIERS.—
(1) IN GENERAL.—The Secretary of Health and
Human Services (in this section referred to as the
‘‘Secretary’’) shall—
(A) divide the United States into no more
than 5 regions, and
(B) designate a single carrier for each such
region,
1183
for the purpose of payment of claims under part B
of title XVIII of the Social Security Act with respect
to clinical diagnostic laboratory tests (other than for
independent physician offices) furnished on or after
such date (not later than January 1, 1999) as the
Secretary specifies.
(2) DESIGNATION.—In designating such car-
riers, the Secretary shall consider, among other cri-
teria—
(A) a carrier’s timeliness, quality, and ex-
perience in claims processing, and
(B) a carrier’s capacity to conduct elec-
tronic data interchange with laboratories and
data matches with other carriers.
(3) SINGLE DATA RESOURCE.—The Secretary
may select one of the designated carriers to serve as
a central statistical resource for all claims informa-
tion relating to such clinical diagnostic laboratory
tests handled by all the designated carriers under
such part.
(4) ALLOCATION OF CLAIMS.—The allocation of
claims for clinical diagnostic laboratory tests to par-
ticular designated carriers shall be based on whether
a carrier serves the geographic area where the lab-
1184
oratory specimen was collected or other method
specified by the Secretary.
(b) ADOPTION OF UNIFORM POLICIES FOR CLINICAL
LABORATORY TESTS.—
(1) IN GENERAL.—Not later than July 1, 1998,
the Secretary shall first adopt, consistent with para-
graph (2), uniform coverage, administration, and
payment policies for clinical diagnostic laboratory
tests under part B of title XVIII of the Social Secu-
rity Act, using a negotiated rulemaking process
under subchapter III of chapter 5 of title 5, United
States Code.
(2) CONSIDERATIONS IN DESIGN OF UNIFORM
POLICIES.—The policies under paragraph (1) shall
be designed to promote uniformity and program in-
tegrity and reduce administrative burdens with re-
spect to clinical diagnostic laboratory tests payable
under such part in connection with the following:
(A) Beneficiary information required to be
submitted with each claim or order for labora-
tory tests.
(B) Physicians’ obligations regarding docu-
mentation requirements and recordkeeping.
(C) Procedures for filing claims and for
providing remittances by electronic media.
1185
(D) The documentation of medical neces-
sity.
(E) Limitation on frequency of coverage
for the same tests performed on the same indi-
vidual.
(3) CHANGES
IN
CARRIER
REQUIREMENTS
PENDING ADOPTION OF UNIFORM POLICY.—During
the period that begins on the date of the enactment
of this Act and ends on the date the Secretary first
implements uniform policies pursuant to regulations
promulgated under this subsection, a carrier under
such part may implement changes relating to re-
quirements for the submission of a claim for clinical
diagnostic laboratory tests.
(4) USE
OF
INTERIM
REGIONAL
POLICIES.—
After the date the Secretary first implements such
uniform policies, the Secretary shall permit any car-
rier to develop and implement interim policies of the
type described in paragraph (1), in accordance with
guidelines established by the Secretary, in cases in
which a uniform national policy has not been estab-
lished under this subsection and there is a dem-
onstrated need for a policy to respond to aberrant
utilization or provision of unnecessary services. Ex-
cept as the Secretary specifically permits, no policy
1186
shall be implemented under this paragraph for a pe-
riod of longer than 2 years.
(5) INTERIM
NATIONAL
POLICIES.—After the
date the Secretary first designates regional carriers
under subsection (a), the Secretary shall establish a
process under which designated carriers can collec-
tively develop and implement interim national stand-
ards of the type described in paragraph (1). No such
policy shall be implemented under this paragraph for
a period of longer than 2 years.
(6) BIENNIAL
REVIEW
PROCESS.—Not less
often than once every 2 years, the Secretary shall
solicit and review comments regarding changes in
the uniform policies established under this sub-
section. As part of such biennial review process, the
Secretary shall specifically review and consider
whether to incorporate or supersede interim, re-
gional, or national policies developed under para-
graph (4) or (5). Based upon such review, the Sec-
retary may provide for appropriate changes in the
uniform policies previously adopted under this sub-
section.
(7) NOTICE.— Before a carrier implements a
change or policy under paragraph (3), (4), or (5),
the carrier shall provide for advance notice to inter-
1187
ested parties and a 45-day period in which such par-
ties may submit comments on the proposed change.
(c) INCLUSION OF LABORATORY REPRESENTATIVE
ON CARRIER ADVISORY COMMITTEES.—The Secretary
shall direct that any advisory committee established by
such a carrier, to advise with respect to coverage, adminis-
tration or payment policies under part B of title XVIII
of the Social Security Act, shall include an individual to
represent the interest and views of independent clinical
laboratories and such other laboratories as the Secretary
deems appropriate. Such individual shall be selected by
such committee from among nominations submitted by na-
tional and local organizations that represent independent
clinical laboratories.
SEC. 10615. UPDATES FOR AMBULATORY SURGICAL SERV-
ICES.
Section 1833(i)(2)(C) (42 U.S.C. 1395l(i)(2)(C)) is
amended by striking all that follows ‘‘shall be increased’’
and inserting the following: ‘‘as follows:
‘‘(i) For fiscal years 1996 and 1997, by the
percentage increase in the consumer price index for
all urban consumers (U.S. city average) as estimated
by the Secretary for the 12-month period ending
with the midpoint of the year involved.
1188
‘‘(ii) For each of fiscal years 1998 through
2002 by such percentage increase minus 2.0 percent-
age points.
‘‘(iii) For each succeeding fiscal year by such
percentage increase.’’.
SEC. 
10616. 
REIMBURSEMENT 
FOR 
DRUGS 
AND
BIOLOGICALS.
(a) IN GENERAL.—Section 1842 (42 U.S.C. 1395u)
is amended by inserting after subsection (n) the following
new subsection:
‘‘(o) If a physician’s, supplier’s, or any other person’s
bill or request for payment for services includes a charge
for a drug or biological for which payment may be made
under this part and the drug or biological is not paid on
a cost or prospective payment basis as otherwise provided
in this part, the amount payable for the drug or biological
is equal to 95 percent of the average wholesale price.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to drugs and biologicals furnished on
or after January 1, 1998.
SEC. 10617. COVERAGE OF ORAL ANTI-NAUSEA DRUGS
UNDER CHEMOTHERAPEUTIC REGIMEN.
(a) IN GENERAL.—Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)), as amended, is further amended—
1189
(1) by striking ‘‘and’’ at the end of subpara-
graph (R); and
(2) by inserting after subparagraph (S) the fol-
lowing new subparagraph:
‘‘(T) an oral drug (which is approved by the
Federal Food and Drug Administration) prescribed
for use as an acute anti-emetic used as part of an
anticancer chemotherapeutic regimen if the drug is
administered by a physician (or as prescribed by a
physician)—
‘‘(i) for use immediately before, at, or
within 48 hours after the time of the adminis-
tration of the anticancer chemotherapeutic
agent; and
‘‘(ii) as a full replacement for the anti-
emetic therapy which would otherwise be ad-
ministered intravenously.’’.
(b) PAYMENT LEVELS.—Section 1834 (42 U.S.C.
1395m), as amended by sections 10421(a)(2) and
10431(b)(2), is amended by adding at the end the follow-
ing new subsection:
‘‘(m) SPECIAL RULES
FOR PAYMENT
FOR ORAL
ANTI-NAUSEA DRUGS.—
‘‘(1) LIMITATION
ON
PER
DOSE
PAYMENT
BASIS.—Subject to paragraph (2), the per dose pay-
1190
ment basis under this part for oral anti-nausea
drugs (as defined in paragraph (3)) administered
during a year shall not exceed 90 percent of the av-
erage per dose payment basis for the equivalent in-
travenous anti-emetics administered during the year,
as computed based on the payment basis applied
during 1996.
‘‘(2) AGGREGATE LIMIT.—The Secretary shall
make such adjustment in the coverage of, or pay-
ment basis for, oral anti-nausea drugs so that cov-
erage of such drugs under this part does not result
in any increase in aggregate payments per capita
under this part above the levels of such payments
per capita that would otherwise have been made if
there were no coverage for such drugs under this
part.
‘‘(3) ORAL
ANTI-NAUSEA
DRUGS
DEFINED.—
For purposes of this subsection, the term ‘oral anti-
nausea drugs’ means drugs for which coverage is
provided under this part pursuant to section
1861(s)(2)(P).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to items and services furnished on
or after January 1, 1998.
1191
SEC. 10618. RURAL HEALTH CLINIC SERVICES.
(a) PER-VISIT PAYMENT LIMITS
FOR PROVIDER-
BASED CLINICS.—
(1) EXTENSION OF LIMIT.—
(A) IN GENERAL.—The matter in section
1833(f) (42 U.S.C. 1395l(f)) preceding para-
graph (1) is amended by striking ‘‘independent
rural health clinics’’ and inserting ‘‘rural health
clinics (other than such clinics in rural hospitals
with less than 50 beds)’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) applies to services
furnished after 1997.
(2) 
TECHNICAL
CLARIFICATION.—Section
1833(f)(1) (42 U.S.C. 1395l(f)(1)) is amended by
inserting ‘‘per visit’’ after ‘‘$46’’.
(b) ASSURANCE OF QUALITY SERVICES.—
(1) IN
GENERAL.—Subparagraph (I) of the
first sentence of section 1861(aa)(2) (42 U.S.C.
1395x(aa)(2)) is amended to read as follows:
‘‘(I) has a quality assessment and performance
improvement program, and appropriate procedures
for review of utilization of clinic services, as the Sec-
retary may specify,’’.