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(2) The heading in section 1861(gg) of such Act (42
U.S.C. 1395x(gg)) is amended to read as follows: ‘‘CER-
TIFIED NURSE-MIDWIFE SERVICES; CERTIFIED MIDWIFE
SERVICES’’.
(b) CERTIFIED MIDWIFE SERVICE BENEFIT.—
(1) MEDICAL AND OTHER SERVICES.—Section
1861(s)(2)(L) 
of 
such 
Act 
(42 
U.S.C.
1395x(s)(2)(L)) is amended by inserting ‘‘and cer-
tified midwife services’’ before the semicolon.
(2) PAYMENT
TO
HOSPITAL
FOR
PATIENTS
UNDER
CARE
OF
CERTIFIED
NURSE-MIDWIFE
OR
CERTIFIED
MIDWIFE.—Section 1861(e)(4) of such
Act (42 U.S.C. 1395x(e)(4)) is amended—
(A) by inserting ‘‘(i)’’ after ‘‘except that’’;
and
(B) by inserting before the semicolon the
following: ‘‘and (ii) a patient receiving certified
nurse-midwife services or certified midwife serv-
ices (as defined in paragraphs (1) and (3), re-
spectively, of subsection (gg)) may be under the
care of a certified nurse-midwife or certified
midwife with respect to such services to the ex-
tent permitted under State law’’.
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(3) INPATIENT HOSPITAL SERVICE AT TEACH-
ING HOSPITALS.—Section 1861(b) of such Act (42
U.S.C. 1395x(b)) is amended—
(A) in paragraph (4), by inserting ‘‘cer-
tified midwife services,’’ after ‘‘certified nurse-
midwife services,’’;
(B) in paragraph (6), by striking ‘‘; or’’
and inserting ‘‘or in the case of services in a
hospital or osteopathic hospital by an intern or
resident-in-training in the field of obstetrics and
gynecology, nothing in this paragraph shall be
construed to preclude a certified nurse-midwife
or certified midwife (as defined in paragraphs
(1) and (3), respectively, of subsection (gg))
from teaching or supervising such intern or
resident-in-training, to the extent permitted
under State law and as may be authorized by
the hospital; or’’;
(C) in paragraph (7), by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(D) by adding at the end the following new
paragraph:
‘‘(8) a certified nurse-midwife or a certified
midwife where the hospital has a teaching program
approved as specified in paragraph (6), if (A) the
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hospital elects to receive any payment due under this
title for reasonable costs of such services, and (B)
all certified nurse-midwives or certified midwives in
such hospital agree not to bill charges for profes-
sional services rendered in such hospital to individ-
uals covered under the insurance program estab-
lished by this title.’’.
(4) 
BENEFIT
UNDER
PART
B.—Section
1832(a)(2)(B)(iii) 
of 
such 
Act 
(42 
U.S.C.
1395k(a)(2)(B)(iii)) is amended—
(A) by inserting ‘‘(I)’’ after ‘‘(iii)’’,
(B) by inserting ‘‘certified midwife serv-
ices,’’ after ‘‘certified nurse-midwife services,’’,
and
(C) by adding at the end the following new
subclause:
‘‘(II) in the case of certified
nurse-midwife services or certified
midwife services furnished in a hos-
pital which has a teaching program
described in clause (i)(II), such serv-
ices may be furnished as provided
under section 1842(b)(7)(E) and sec-
tion 1861(b)(8);’’.
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(5) 
AMOUNT
OF
PAYMENT.—Section
1833(a)(1)(K) 
of 
such 
Act 
(42 
U.S.C.
1395l(a)(1)(K)) is amended—
(A) by inserting ‘‘and certified midwife
services’’ after ‘‘certified nurse-midwife serv-
ices’’, and
(B) by striking ‘‘65 percent’’ each place it
appears and inserting ‘‘95 percent’’.
(6) ASSIGNMENT OF PAYMENT.—The first sen-
tence of section 1842(b)(6) of such Act (42 U.S.C.
1395u(b)(6)) is amended—
(A) by striking ‘‘and (F)’’ and inserting
‘‘(F)’’; and
(B) by inserting before the period the fol-
lowing: ‘‘, and (G) in the case of certified
nurse-midwife services or certified midwife serv-
ices under section 1861(s)(2)(L), payment may
be made in accordance with subparagraph (A),
except that payment may also be made to such
person or entity (or the agent of such person or
entity) as the certified nurse-midwife or cer-
tified midwife may designate under an agree-
ment between the certified nurse-midwife or
certified midwife and such person or entity (or
the agent of such person or entity)’’.
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(7) CLARIFICATION
REGARDING
PAYMENTS
UNDER PART B FOR SUCH SERVICES FURNISHED IN
TEACHING HOSPITALS.—(A) Section 1842(b)(7) of
such Act (42 U.S.C. 1395u(b)(7)) is amended—
(i) in subparagraphs (A) and (C), by in-
serting ‘‘or, for purposes of subparagraph (E),
the conditions described in section 1861(b)(8),’’
after ‘‘section 1861(b)(7),’’; and
(ii) by adding at the end the following new
subparagraph:
‘‘(E) In the case of certified nurse-midwife
services or certified midwife services furnished
to a patient in a hospital with a teaching pro-
gram 
approved 
as 
specified 
in 
section
1861(b)(6) but which does not meet the condi-
tions described in section 1861(b)(8), the provi-
sions of subparagraphs (A) through (C) shall
apply with respect to a certified nurse-midwife
or a certified midwife respectively under this
subparagraph as they apply to a physician
under subparagraphs (A) through (C).’’.
(B) Not later than 180 days after the date of
the enactment of this Act, the Secretary shall pre-
scribe regulations to carry out the amendments
made by subparagraph (A).
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SEC. 3. MEDICARE PAYMENT FOR FREESTANDING BIRTH
CENTER SERVICES.
(a) FREESTANDING
BIRTH
CENTER
SERVICES,
FREESTANDING BIRTH CENTER DEFINED.—
(1) IN GENERAL.—(A) Section 1861(gg) of the
Social Security Act (42 U.S.C. 1395x(gg)), as
amended in section 2(a)(1), is amended by adding at
the end the following new paragraphs:
‘‘(5) The term ‘freestanding birth center serv-
ices’ means items and services furnished by a free-
standing birth center (as defined in paragraph (6))
and such items and services furnished as an incident
to the freestanding birth center’s services as would
otherwise be covered if furnished by a physician or
as an incident to a physician’s service.
‘‘(6) The term ‘freestanding birth center’ means
a facility, institution, or site (other than a rural
health clinic, critical access hospital, or a sole com-
munity hospital) (A) in which births are planned to
occur (outside the mother’s place of residence), (B)
in which comprehensive health care services are fur-
nished, and (C) which has been approved by the Sec-
retary or accredited by an organization recognized
by the Secretary for purposes of accrediting free-
standing birth centers. Such term does not include
a facility, institution, or site that is a hospital or an
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ambulatory surgical center, unless with respect to
ambulatory surgical centers, the State law or regula-
tion that regulates such centers also regulates free-
standing birth centers in the State.’’.
(B) The heading in section 1861(gg) of such
Act (42 U.S.C. 1395x(gg)), as amended in section
2(b)(2), is further amended by adding at the end the
following: ‘‘; FREESTANDING BIRTH CENTER SERV-
ICES’’.
(2) MEDICAL AND OTHER SERVICES.—Section
1861(s)(2)(L) 
of 
such 
Act 
(42 
U.S.C.
1395x(s)(2)(L)), as amended in section 2(b)(1), is
further amended—
(A) by inserting ‘‘(i)’’ after ‘‘(L)’’;
(B) by adding ‘‘and’’ after the semicolon;
and
(C) by adding at the end the following new
clause:
‘‘(ii) freestanding birth center serv-
ices,’’.
(b) PART B BENEFIT.—
(1) IN GENERAL.—Section 1832(a)(2)(B)(iii) of
such Act (42 U.S.C. 1395k(a)(2)(B)(iii)), as amend-
ed in section 2(b)(4), is further amended by insert-
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ing ‘‘freestanding birth center services,’’ after ‘‘cer-
tified midwife services,’’.
(2) AMOUNT OF PAYMENT.—Section 1833(a)(1)
of such Act (42 U.S.C. 1395l(a)(1)) is amended—
(A) by striking ‘‘and (S)’’ and inserting in
lieu thereof ‘‘(S)’’, and
(B) by inserting before the semicolon the
following new subparagraph: ‘‘, and (T) with
respect to freestanding birth center services
under section 1861(s)(2)(L)(ii), the amount
paid shall be made on an assignment-related
basis, and shall be 80 percent of the lesser of
(i) the actual charge for the services or (ii) an
amount established by the Secretary for pur-
poses of this subparagraph, such amount being
95 percent of the Secretary’s estimate of the
average total payment made to hospitals and
physicians during 1997 for charges for delivery
and pre-delivery visits, such amounts adjusted
to allow for regional variations in labor costs;
except that (I) such estimate shall not include
payments for diagnostic tests, drugs, or the cost
associated with the transfer of a patient to the
hospital or the physician whether or not sepa-
rate payments were made under this title for
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such tests, drugs, or transfers, and (II) such
amount shall be updated by applying the single
conversion factor for 1998 under section
1848(d)(1)(C)’’.
SEC. 4. INTERIM, FINAL REGULATIONS.
Except as provided in section 2(b)(7)(B), in order to
carry out the amendments made by this Act in a timely
manner, the Secretary of Health and Human Services may
first promulgate regulations, that take effect on an interim
basis, after notice and pending opportunity for public com-
ment, by not later than 6 months after the date of the
enactment of this Act.
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