251
‘‘(E) such other items as the Secretary
may determine; and
‘‘(F) for purposes of paragraphs (1) and
(3)—
‘‘(i) home dialysis supplies and equip-
ment 
(as 
described 
in 
section
1861(s)(2)(F)), and
‘‘(ii) immunosuppressive drugs (as de-
scribed in section 1861(s)(2)(J)).’’.
(2) CONFORMING AMENDMENT.—Effective Oc-
tober 1, 1994, paragraph (16) of section 1834(a)
(42 U.S.C. 1395m(a)) is repealed.
(b) REPORT ON EFFECT OF UNIFORM CRITERIA ON
UTILIZATION OF ITEMS.—Not later than July 1, 1996,
the Secretary shall submit a report to the Committee on
Ways and Means and the Committee on Energy and Com-
merce of the House of Representatives and the Committee
on Finance of the Senate analyzing the impact of the uni-
form criteria established under section 1834(i)(3)(A) of
the Social Security Act (as added by subsection (a)) on
the utilization of items of medical equipment and supplies
by individuals enrolled under part B of the medicare pro-
gram.
(c) USE OF COVERED ITEMS BY DISABLED BENE-
FICIARIES.—
252
(1) IN GENERAL.—The Secretary of Health and
Human Services, in consultation with representa-
tives of suppliers of durable medical equipment
under part B of the medicare program and individ-
uals entitled to benefits under such program on the
basis of disability, shall conduct a study of the ef-
fects of the methodology for determining payments
for items of such equipment under such part on the
ability of such individuals to obtain items of such
equipment, including customized items.
(2) REPORT.—Not later than one year after the
date of the enactment of this Act, the Secretary
shall submit a report to Congress on the study con-
ducted under paragraph (1), and shall include in the
report such recommendations as the Secretary con-
siders appropriate to assure that disabled medicare
beneficiaries have access to items of durable medical
equipment.
(d) CRITERIA FOR TREATMENT OF ITEMS AS PROS-
THETICS DEVICES OR ORTHOTICS AND PROSTHETICS.—
Not later than one year after the date of the enactment
of this Act, the Secretary of Health and Human Services
shall submit a report to the Committees on Ways and
Means and Energy and Commerce of the House of Rep-
resentatives and the Committee on Finance of the Senate
253
describing prosthetic devices or orthotics and prosthetics
covered under part B of the medicare program that do
not require individualized or custom fitting and adjust-
ment to be used by a patient. Such report shall include
recommendations for an appropriate methodology for de-
termining the amount of payment for such items under
such program.
SEC. 5035. PROHIBITION AGAINST CARRIER FORUM SHOP-
PING.
(a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.
1395m(a)(12)) is amended to read as follows:
‘‘(12) 
USE
OF
CARRIERS
TO
PROCESS
CLAIMS.—
‘‘(A) DESIGNATION
OF
REGIONAL
CAR-
RIERS.—The Secretary may designate, by regu-
lation under section 1842, one carrier for one
or more entire regions to process all claims
within the region for covered items under this
section.
‘‘(B) 
PROHIBITION
AGAINST
CARRIER
SHOPPING.—(i) No supplier of a covered item
may present or cause to be presented a claim
for payment under this part unless such claim
is presented to the appropriate regional carrier
(as designated by the Secretary).
254
‘‘(ii) For purposes of clause (i), the term
‘appropriate regional carrier’ means the carrier
having jurisdiction over the geographic area
that includes the permanent residence of the
patient to whom the item is furnished.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items furnished on or after
October 1, 1993.
(c) CLARIFICATION OF AUTHORITY TO DESIGNATE
CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing
in this subsection or the amendment made by this sub-
section may be construed to restrict the authority of the
Secretary of Health and Human Services to designate re-
gional carriers or modify claims jurisdiction rules with re-
spect to items or services under part B of the medicare
program that are not covered items under section 1834(a)
of the Social Security Act or prosthetic devices or orthotics
and prosthetics under section 1834(h) of such Act.
SEC. 5036. RESTRICTIONS ON CERTAIN MARKETING AND
SALES ACTIVITIES.
(a) PROHIBITING UNSOLICITED TELEPHONE CON-
TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP-
MENT TO MEDICARE BENEFICIARIES.—
255
(1) IN GENERAL.—Section 1834(a) (42 U.S.C.
1395m(a)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(17) PROHIBITION
AGAINST
UNSOLICITED
TELEPHONE CONTACTS BY SUPPLIERS.—
‘‘(A) IN GENERAL.—A supplier of a cov-
ered item under this subsection may not contact
an individual enrolled under this part by tele-
phone regarding the furnishing of a covered
item to the individual (other than a covered
item the supplier has already furnished to the
individual) unless—
‘‘(i) the individual gives permission to
the supplier to make contact by telephone
for such purpose; or
‘‘(ii) the supplier has furnished a cov-
ered item under this subsection to the indi-
vidual during the 15-month period preced-
ing the date on which the supplier contacts
the individual for such purpose.
‘‘(B) PROHIBITING PAYMENT FOR ITEMS
FURNISHED
SUBSEQUENT
TO
UNSOLICITED
CONTACTS.—If a supplier knowingly contacts
an individual in violation of subparagraph (A),
no payment may be made under this part for
256
any item subsequently furnished to the individ-
ual by the supplier.
‘‘(C) EXCLUSION
FROM
PROGRAM
FOR
SUPPLIERS ENGAGING IN PATTERN OF UNSO-
LICITED
CONTACTS.—If a supplier knowingly
contacts individuals in violation of subpara-
graph (A) to such an extent that the supplier’s
conduct establishes a pattern of contacts in vio-
lation of such subparagraph, the Secretary shall
exclude the supplier from participation in the
programs under this Act, in accordance with
the procedures set forth in subsections (c), (f),
and (g) of section 1128.’’.
(2) REQUIRING
REFUND
OF
AMOUNTS
COL-
LECTED FOR DISALLOWED ITEMS.—Section 1834(a)
(42 U.S.C. 1395m(a)), as amended by paragraph
(1), is amended by adding at the end the following
new paragraph:
‘‘(18) REFUND OF AMOUNTS COLLECTED FOR
CERTAIN DISALLOWED ITEMS.—
‘‘(A) IN GENERAL.—If a nonparticipating
supplier furnishes to an individual enrolled
under this part a covered item for which no
payment may be made under this part by rea-
son of paragraph (17)(B), the supplier shall re-
258
‘‘(D) TIMELY BASIS DEFINED.—A refund
under subparagraph (A) is considered to be on
a timely basis only if—
‘‘(i) in the case of a supplier who does
not request reconsideration or seek appeal
on a timely basis, the refund is made with-
in 30 days after the date the supplier re-
ceives a denial notice under subparagraph
(C), or
‘‘(ii) in the case in which such a re-
consideration or appeal is taken, the re-
fund is made within 15 days after the date
the supplier receives notice of an adverse
determination on reconsideration or ap-
peal.’’.
(b) CONFORMING AMENDMENT.—Section 1834(h)(3)
(42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para-
graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to items furnished after
the expiration of the 60-day period that begins on the date
of the enactment of this Act.
SEC. 5037. KICKBACK CLARIFICATION.
(a) IN
GENERAL.—Section 1128B(b)(3)(B) (42
U.S.C. 1320a–7b(b)(3)(B)) is amended by inserting be-
259
fore the semicolon the following: ‘‘(except that in the case
of a contract supply arrangement between any entity and
a supplier of medical supplies and equipment (as defined
in section 1834(i)(4), but not including items described
in subparagraph (F) of such section), such employment
shall not be considered bona fide to the extent that it in-
cludes tasks of a clerical and cataloging nature in trans-
mitting to suppliers assignment rights of individuals eligi-
ble for benefits under part B of title XVIII, or perform-
ance of warehousing or stock inventory functions)’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to services fur-
nished on or after the first day of the first month that
begins after the expiration of the 60-day period beginning
on the date of the enactment of this Act.
SEC. 5038. BENEFICIARY LIABILITY FOR NONCOVERED
SERVICES.
(a) UNASSIGNED CLAIMS.—
(1) IN GENERAL.—Section 1834(i) (42 U.S.C.
1395m(i)), as added by section 5034(a)(1), is
amended—
(A) by redesignating paragraph (4) as
paragraph (5), and
(B) by inserting after paragraph (3) the
following new paragraph:
260
‘‘(4) LIMITATION ON PATIENT LIABILITY.—If a
supplier of medical equipment and supplies (as de-
fined in paragraph (5))—
‘‘(A) furnishes an item or service to a ben-
eficiary for which no payment may be made by
reason of paragraph (1);
‘‘(B) furnishes an item or service to a ben-
eficiary for which payment is denied in advance
under subsection (a)(15); or
‘‘(C) furnishes an item or service to a ben-
eficiary for which payment is denied under
section 1862(a)(1);
any expenses incurred for items and services fur-
nished to an individual by such a supplier not on an
assigned basis shall be the responsibility of such
supplier. The individual shall have no financial re-
sponsibility for such expenses and the supplier shall
refund on a timely basis to the individual (and shall
be liable to the individual for) any amounts collected
from the individual for such items or services. The
provisions of subsection (a)(18) shall apply to re-
funds required under the previous sentence in the
same manner as such provisions apply to refunds
under such subsection.’’.
261
(2) 
CONFORMING
AMENDMENT.—Section
1128B(b)(3)(B) (42 U.S.C. 1320a–7b(b)(3)(B)), as
amended by section 5037(a), is amended by striking
‘‘1834(i)(4)’’ and inserting ‘‘1834(i)(5)’’.
(b) ASSIGNED CLAIMS.—Section 1879 (42 U.S.C.
1395pp) is amended by adding at the end the following
new subsection:
‘‘(h) If a supplier of medical equipment and supplies
(as defined in section 1834(i)(4))—
‘‘(1) furnishes an item or service to a bene-
ficiary for which no payment may be made by reason
of section 1834(i)(1); or
‘‘(2) furnishes an item or service to a bene-
ficiary for which payment is denied in advance under
section 1834(a)(15);
any expenses incurred for items and services furnished to
an individual by such a supplier on an assignment-related
basis shall be the responsibility of such supplier. The indi-
vidual shall have no financial responsibility for such ex-
penses and the supplier shall refund on a timely basis to
the individual (and shall be liable to the individual for)
any amounts collected from the individual for such items
or services. The provisions of section 1834(a)(18) shall
apply to refunds required under the previous sentence in
262
the same manner as such provisions apply to refunds
under such section.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to items or services furnished on
or after October 1, 1994.
SEC. 5039. ADJUSTMENTS FOR INHERENT REASONABLE-
NESS.
(a) ADJUSTMENTS
MADE
TO
FINAL
PAYMENT
AMOUNTS.—
(1) IN GENERAL.—Section 1834(a)(10)(B) (42
U.S.C. 1395m(a)(10)(B)) is amended by adding at
the end the following: ‘‘In applying such provisions
to payments for an item under this subsection, the
Secretary shall make adjustments to the payment
basis for the item described in paragraph (1)(B) if
the Secretary determines (in accordance with such
provisions and on the basis of prices and costs appli-
cable at the time the item is furnished) that such
payment basis is not inherently reasonable.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of the
enactment of this Act.
(b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—
(1) IN GENERAL.—In accordance with section
1834(a)(10)(B) of the Social Security Act (as
263
amended by subsection (a)), the Secretary of Health
and Human Services shall determine whether the
payment amounts for the items described in para-
graph (2) are not inherently reasonable, and shall
adjust such amounts in accordance with such section
if the amounts are not inherently reasonable.
(2) ITEMS DESCRIBED.—The items referred to
in paragraph (1) are decubitus care equipment,
transcutaneous electrical nerve stimulators, and any
other items considered appropriate by the Secretary.
SEC. 5040. PAYMENT FOR SURGICAL DRESSINGS.
(a) IN GENERAL.—Section 1834 (42 U.S.C. 1395m),
as amended by section 5034(a)(1), is amended by adding
at the end the following new subsection:
‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—
‘‘(1) IN GENERAL.—Payment under this sub-
section for surgical dressings (described in section
1861(s)(5)) shall be made in a lump sum amount
for the purchase of the item in an amount equal to
80 percent of the lesser of—
‘‘(A) the actual charge for the item; or
‘‘(B) a payment amount determined in ac-
cordance with the methodology described in
subparagraphs (B) and (C) of subsection (a)(2)
(except that in applying such methodology, the
264
national limited payment amount referred to in
such subparagraphs shall be initially computed
based on local payment amounts using average
reasonable charges for the 12-month period
ending December 31, 1992, increased by the
covered item updates described in such sub-
section for 1993 and 1994)
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
apply to surgical dressings that are—
‘‘(A) furnished as an incident to a physi-
cian’s professional service; or
‘‘(B) furnished by a home health agency.’’.
(b) CONFORMING AMENDMENT.—Section 1833(a)(1)
(42 U.S.C. 1395l(a)(1)), as amended by sections
5070(e)(2) and 5010(e)(1), is amended—
(1) by striking ‘‘and’’ before ‘‘(P)’’, and
(2) by inserting before the semicolon at the end
the following: ‘‘, and (Q) with respect to surgical
dressings, the amounts paid shall be the amounts
determined under section 1834(j)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to items furnished on or after Jan-
uary 1, 1994.
265
SEC. 5041. PAYMENTS FOR TENS DEVICES.
(a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.
1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the
second place it appears and inserting ‘‘45 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items furnished on or after
January 1, 1994.
SEC. 5042. MISCELLANEOUS AND TECHNICAL CORREC-
TIONS.
(a) UPDATES
TO PAYMENT AMOUNTS.—Subpara-
graph 
(A) 
of 
section 
1834(a)(14) 
(42 
U.S.C.
1395m(a)(14)) is amended to read as follows:
‘‘(A) for 1991 and 1992, the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) for the 12-
month period ending with June of the previous
year reduced by 1 percentage point; and’’.
(b) TREATMENT OF POTENTIALLY OVERUSED ITEMS
AND ADVANCED DETERMINATIONS OF COVERAGE.—(1)
Effective on the date of the enactment of this Act, section
1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to
read as follows:
‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY
OVERUSED ITEMS.—
‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY
SECRETARY.—The Secretary shall develop and
266
periodically update a list of items for which
payment may be made under this subsection
that are potentially overused, and shall include
in such list seat-lift mechanisms, transcutane-
ous electrical nerve stimulators, motorized
scooters, decubitus care mattresses, and any
such other item determined by the Secretary to
be potentially overused on the basis of any of
the following criteria—
‘‘(i) the item is marketed directly to
potential patients;
‘‘(ii) the item is marketed with an
offer to potential patients to waive the
costs of coinsurance associated with the
item or is marketed as being available at
no cost to policyholders of a medicare sup-
plemental policy (as defined in section
1882(g)(1));
‘‘(iii) the item has been subject to a
consistent pattern of overutilization; or
‘‘(iv) a high proportion of claims for
payment for such item under this part may
not be made because of the application of
section 1862(a)(1).
267
‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER
SCRUTINY.—Payment may not be made under
this part for any item contained in the list de-
veloped by the Secretary under subparagraph
(A) unless the carrier has subjected the claim
for payment for the item to special scrutiny or
has followed the procedures described in para-
graph (11)(C) with respect to the item.’’.
(2) Effective January 1, 1994, section 1834(a)(11)
(42 U.S.C. 1395m(a)) is amended by adding at the end
the following new subparagraph:
‘‘(C) CARRIER DETERMINATIONS FOR CER-
TAIN ITEMS IN ADVANCE.—A carrier shall de-
termine in advance whether payment for an
item may not be made under this subsection be-
cause of the application of section 1862(a)(1)
if—
‘‘(i) the item is a customized item
(other than inexpensive items specified by
the Secretary); or
‘‘(ii) the item is a specified covered
item under subparagraph (B).’’.
(3) Effective for standards applied for contract years
beginning after the date of the enactment of this Act, sec-
tion 1842(c) (42 U.S.C. 1395u(c)), as amended by section
268
5013(a), is amended by adding at the end the following
new paragraph:
‘‘(5) Each contract under this section which provides
for the disbursement of funds, as described in subsection
(a)(1)(B), shall require the carrier to meet criteria devel-
oped by the Secretary to measure the timeliness of carrier
responses to requests for payment of items described in
section 1834(a)(11)(C).’’.
(4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is
amended by striking ‘‘paragraph (10) and paragraph
(11)’’ and inserting ‘‘paragraphs (10) and (11)’’.
(c) STUDY OF VARIATIONS IN DURABLE MEDICAL
EQUIPMENT SUPPLIER COSTS.—
(1) COLLECTION AND ANALYSIS OF SUPPLIER
COST DATA.—The Administrator of the Health Care
Financing Administration shall, in consultation with
appropriate organizations, collect data on supplier
costs of durable medical equipment for which pay-
ment may be made under part B of the medicare
program, and shall analyze such data to determine
the proportions of such costs attributable to the
service and product components of furnishing such
equipment and the extent to which such proportions
vary by type of equipment and by the geographic
region in which the supplier is located.
269
(2) DEVELOPMENT
OF
GEOGRAPHIC
ADJUST-
MENT INDEX; REPORTS.—Not later than January 1,
1995—
(A) the Administrator shall submit a re-
port to the Committees on Energy and Com-
merce and Ways and Means of the House of
Representatives and the Committee on Finance
of the Senate on the data collected and the
analysis conducted under paragraph (1), and
shall include in such report the Administrator’s
recommendations for a geographic cost adjust-
ment index for suppliers of durable medical
equipment under the medicare program and an
analysis of the impact of such proposed index
on payments under the medicare program; and
(B) the Comptroller General shall submit a
report to the Committees on Energy and Com-
merce and Ways and Means of the House of
Representatives and the Committee on Finance
of the Senate analyzing on a geographic basis
the supplier costs of durable medical equipment
under the medicare program.
(d) OXYGEN RETESTING.—Section 1834(a)(5)(E)
(42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’
and inserting ‘‘56’’.
270
(e) 
OTHER
MISCELLANEOUS
AND
TECHNICAL
AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990
is amended by striking ‘‘amendment made by subsection
(a)’’ and inserting ‘‘amendments made by this sub-
section’’.
(2) Section 4152(c)(2) of OBRA–1990 is amended
by 
striking 
‘‘1395m(a)(7)(A)’’ 
and 
inserting
‘‘1395m(a)(7)’’.
(3) 
Section 
1834(a)(7)(A)(iii)(II) 
(42 
U.S.C.
1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause
(v)’’ and inserting ‘‘clause (vi)’’.
(4) 
Section 
1834(a)(7)(C)(i) 
(42 
U.S.C.
1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph
(3)’’.
(5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is
amended by striking subparagraph (D).
(6) Section 4153(c)(1) of OBRA–1990 is amended
by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.
(7) Section 4153(d)(2) of OBRA–1990 is amended
by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili-
ation’’.
(8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is
amended by striking paragraph (6).
(B) Section 1834(a) (42 U.S.C. 1395m(a)) is amend-
ed—
271
(i) in subparagraphs (A) and (B) of paragraph
(1), by striking ‘‘(2) through (7)’’ each place it ap-
pears and inserting ‘‘(2) through (5) and (7)’’;
(ii) in paragraph (7), by striking ‘‘(2) through
(6)’’ and inserting ‘‘(2) through (5)’’;
(iii) in paragraph (8), by striking ‘‘paragraphs
(6) and (7)’’ each place it appears in the matter pre-
ceding subparagraph (A) and in subparagraph (C)
and inserting ‘‘paragraph (7)’’; and
(iv) in paragraph (8)(A)(i), by striking ‘‘de-
scribed—’’ and all that follows and inserting ‘‘de-
scribed in paragraph (7) equal to the average of the
purchase prices on the claims submitted on an as-
signment-related basis for the unused item supplied
during the 6-month period ending with December
1986.’’.
(9) The amendments made by this subsection shall
take effect as if included in the enactment of OBRA–1990.
Subchapter D—Part B Premium
SEC. 5051. PART B PREMIUM.
Section 1839(e) (42 U.S.C. 1395r(e)) is amended—
(1) in paragraph (1)(A), by inserting ‘‘and for
each month in 1996 and 1997’’ after ‘‘January
1991’’, and
272
(2) in paragraph (2), by striking ‘‘1991’’ and
inserting ‘‘1998’’.
Subchapter E—Other Provisions
SEC. 5061. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORA-
TORY TESTS.
(a) LOWER CAP.—Section 1833(h)(4)(B) (42 U.S.C.
1395l(h)(4)(B)) is amended—
(1) by striking ‘‘and’’ at the end of clause (iii),
(2) in clause (iv), by inserting ‘‘and before Jan-
uary 1, 1994,’’ after ‘‘1990,’’,
(3) by striking the period at the end of clause
(iv) and inserting ‘‘, and’’, and
(4) by adding at the end the following:
‘‘(v) after December 31, 1993, is equal to 76
percent of the median of all the fee schedules estab-
lished for that test for that laboratory setting under
paragraph (1).’’.
(b) TWO PERCENT UPDATE FOR 1994 THROUGH
1998.—Section 
1833(h)(2)(A)(ii)(III) 
(42 
U.S.C.
1395l(h)(2)(A)(ii)(III)) is amended by striking ‘‘1991,
1992, and 1993’’ and inserting ‘‘1991 through 1998’’.
273
SEC. 5062. TREATMENT OF INPATIENTS AND PROVISION OF
DIAGNOSTIC AND THERAPEUTIC X-RAY SERV-
ICES BY RURAL HEALTH CLINICS AND FED-
ERALLY QUALIFIED HEALTH CENTERS.
(a) TREATMENT OF INPATIENTS.—Section 1861(aa)
(42 U.S.C. 1395x(aa)) is amended—
(1) in paragraph (1), in the matter following
subparagraph (C), by striking ‘‘as an outpatient’’
and inserting ‘‘as a patient’’;
(2) in paragraph (2)(A), by striking ‘‘furnishing
to outpatients’’ and inserting ‘‘furnishing to pa-
tients’’; and
(3) in paragraph (3), in the matter following
subparagraph (B), by striking ‘‘as an outpatient’’
and inserting ‘‘as a patient’’.
(b) TREATMENT OF DIAGNOSTIC AND THERAPEUTIC
X-RAY
SERVICES.—Section 
1861(aa) 
(42 
U.S.C.
1395x(aa)) is further amended—
(1) in paragraph (1)(A), by inserting ‘‘(i)’’ after
‘‘(A)’’ and by adding at the end the following: ‘‘and
(ii) diagnostic and therapeutic x-ray services,’’, and
(2) in paragraph (2)(A), by striking ‘‘(A)’’ and
inserting ‘‘(A)(i)’’.
(c) 
CONFORMING
AMENDMENT.—Section
1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by
striking ‘‘and services of a certified registered nurse anes-
274
thetist’’ and inserting ‘‘services of a certified registered
nurse anesthetist, rural health clinic services, and Feder-
ally-qualified health center services’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1994, and shall
apply to services furnished on or after such date.
SEC. 5063. APPLICATION OF MAMMOGRAPHY CERTIFI-
CATION REQUIREMENTS.
(a) SCREENING MAMMOGRAPHY.—Section 1834(c)
(42 U.S.C. 1395m(c)) is amended—
(1) in paragraph (1)(B), by striking ‘‘meets the
quality standards established under paragraph (3)’’
and inserting ‘‘is conducted by a facility that has a
certificate (or provisional certificate) issued under
section 354 of the Public Health Service Act’’;
(2) in paragraph (1)(C)(iii), by striking ‘‘para-
graph (4)’’ and inserting ‘‘paragraph (3)’’;
(3) by striking paragraph (3); and
(4) by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4).
(b) 
DIAGNOSTIC
MAMMOGRAPHY.—Section
1861(s)(3) (42 U.S.C. 1395x(s)(3)) is amended by insert-
ing ‘‘and including diagnostic mammography if conducted
by a facility that has a certificate (or provisional certifi-
275
cate) issued under section 354 of the Public Health Serv-
ice Act’’ after ‘‘necessary’’.
(c) 
CONFORMING
AMENDMENTS.—(1) 
Section
1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended by
striking ‘‘or which does not meet the standards established
under section 1834(c)(3)’’ and inserting ‘‘or which is not
conducted 
by 
a 
facility 
described 
in 
section
1834(c)(1)(B)’’.
(2) Section 1863 (42 U.S.C. 1395z) is amended by
striking ‘‘or whether screening mammography meets the
standards established under section 1834(c)(3),’’.
(3) The first sentence of section 1864(a) (42 U.S.C.
1395aa(a)) is amended by striking ‘‘, or whether screening
mammography meets the standards established under sec-
tion 1834(c)(3)’’.
(4) The third sentence of section 1865(a) (42 U.S.C.
1395bb(a)) is amended by striking ‘‘1834(c)(3),’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to mammography furnished by a
facility on and after the first date that the certificate re-
quirements of section 354(b) of the Public Health Service
Act apply to such mammography conducted by such facil-
ity.
276
SEC. 5064. EXTENSION OF ALZHEIMER’S DISEASE DEM-
ONSTRATION.
Section 9342 of OBRA–1986, as amended by section
4164(a)(2) of OBRA–1990, is amended—
(1) in subsection (c)(1), by striking ‘‘4 years’’
and inserting ‘‘5 years’’; and
(2) in subsection (f)—
(A) by striking ‘‘$55,000,000’’ and insert-
ing ‘‘$60,000,000’’, and
(B) by striking ‘‘$3,000,000’’ and insert-
ing ‘‘$5,000,000’’.
SEC. 5065. ORAL CANCER DRUGS.
(a) COVERAGE
OF CERTAIN SELF-ADMINISTERED
ANTICANCER DRUGS.—Section 1861(s)(2) (42 U.S.C.
1395(s)(2)), as amended by section 5070(f)(7)(B), is
amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (N);
(2) by adding ‘‘and’’ at the end of subpara-
graph (O); and
(3) by adding at the end the following new sub-
paragraph:
‘‘(P) an oral drug (which is approved by the
Federal Food and Drug Administration) prescribed
for use as an anticancer chemotherapeutic agent for
a given indication, and containing an active ingredi-
277
ent (or ingredients), which is the same indication
and active ingredient (or ingredients) as a drug
which the carrier determines would be covered pur-
suant to subparagraph (A) or (B) if the drug could
not be self-administered;’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to items furnished on or after Jan-
uary 1, 1994.
SEC. 5066. EXTENSION OF MUNICIPAL HEALTH SERVICE
DEMONSTRATION PROJECTS.
Section 9215 of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended by section 6135
of OBRA–1989, is amended—
(1) by striking ‘‘December 31, 1993’’ and in-
serting ‘‘December 31, 1997’’, and
(2) in the second sentence, by inserting after
‘‘beneficiary costs,’’ the following: ‘‘costs to the med-
icaid program and other payors, access to care, out-
comes, beneficiary satisfaction, utilization differences
among the different populations served by the
projects,’’.
278
SEC. 5067. TREATMENT OF CERTAIN INDIAN HEALTH PRO-
GRAMS 
AND 
FACILITIES 
AS 
FEDERALLY-
QUALIFIED HEALTH CENTERS.
(a) IN GENERAL.—Section 1861(aa)(4) (42 U.S.C.
1395x(aa)(4)) is amended—
(1) by striking ‘‘or’’ at the end of subparagraph
(B);
(2) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘; or’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(D) is an outpatient health program or facility
operated by a tribe or tribal organization under the
Indian Self-Determination Act or by an urban In-
dian organization receiving funds under title V of
the Indian Health Care Improvement Act.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of section 4161(a)(2)(C) of OBRA–1990.
SEC. 5068. INTEREST PAYMENTS.
(a) IN GENERAL.—Section 1842(c)(2)(B)(ii)(IV) of
the Social Security Act shall be applied with respect to
paper claims received in the 9-month period beginning
January 1, 1993, by substituting ‘‘27 calendar days’’ for
‘‘24 calendar days’’ and ‘‘17 calendar days’’.
279
(b) PROHIBITING PAYMENT OF INTEREST DURING
MANDATORY
PAYMENT
DELAY
PERIOD.—Section
1842(c)(2)(C) (42 U.S.C. 1395u(c)(2)(C)) is amended by
adding at the end the following: ‘‘Notwithstanding any
other provision of law, no interest may be paid with re-
spect to a claim pursuant to the preceding sentence within
any period following the submission of the claim during
which no payment may be issued, mailed, or otherwise
transmitted with respect to the claim.’’.
SEC. 5069. CLARIFICATION OF COVERAGE OF CERTIFIED
NURSE-MIDWIFE 
SERVICES 
PERFORMED
OUTSIDE THE MATERNITY CYCLE.
(a) IN GENERAL.—Section 1861(gg)(2) (42 U.S.C.
1395x(gg)(2)) is amended by striking ‘‘, and performs
services’’ and all that follows and inserting a period.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
January 1, 1994.
SEC. 5069A. INCREASE IN, AND STUDY OF, ANNUAL CAP ON
AMOUNT OF MEDICARE PAYMENT FOR OUT-
PATIENT PHYSICAL THERAPY AND OCCUPA-
TIONAL THERAPY SERVICES.
(a) INCREASE
IN ANNUAL LIMITATION.—Section
1833(g) (42 U.S.C. 1395l(g)) is amended by striking
‘‘$750’’ and inserting ‘‘$900’’ each place it appears.
280
(b) STUDY.—(1) The Physician Payment Review
Commission shall conduct a study of the appropriateness
of continuing an annual limitation on the amount of pay-
ment for outpatient services of independently practicing
physical and occupational therapists under the medicare
program.
(2) By not later than January 1, 1995, the Commis-
sion shall submit to the Committees on Energy and Com-
merce and Ways and Means of the House of Representa-
tives and the Committee on Finance of the Senate a report
on the study conducted under paragraph (1). Such report
shall include such recommendations for changes in such
annual limitation as the Commission finds appropriate.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
January 1, 1994.
SEC. 5070. MISCELLANEOUS AND TECHNICAL CORREC-
TIONS.
(a) REVISION OF INFORMATION ON PART B CLAIMS
FORMS.—Section 1833(q)(1) (42 U.S.C. 1395l(q)(1)) is
amended—
(1) by striking ‘‘provider number’’ and inserting
‘‘unique physician identification number’’; and
281
(2) by striking ‘‘and indicate whether or not the
referring physician is an interested investor (within
the meaning of section 1877(h)(5))’’.
(b) CONSULTATION FOR SOCIAL WORKERS.—Effec-
tive with respect to services furnished on or after January
1, 1991, section 6113(c) of OBRA–1989 is amended—
(1) by inserting ‘‘and clinical social worker
services’’ after ‘‘psychologist services’’; and
(2) by striking ‘‘psychologist’’ the second and
third place it appears and inserting ‘‘psychologist or
clinical social worker’’.
(c) REPORTS
ON
HOSPITAL
OUTPATIENT
PAY-
MENT.—(1) OBRA–1989 is amended by striking section
6137.
(2) Section 1135(d) (42 U.S.C. 1320b–5(d)) is
amended—
(A) by striking paragraph (6); and
(B) in paragraph (7)—
(i) by striking ‘‘systems’’ each place it ap-
pears and inserting ‘‘system’’; and
(ii) by striking ‘‘paragraphs (1) and (6)’’
and inserting ‘‘paragraph (1)’’.
(d) RADIOLOGY AND DIAGNOSTIC SERVICES PRO-
VIDED
IN
HOSPITAL
OUTPATIENT
DEPARTMENTS.—
(1) Effective as if included in the enactment of
282
OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
1395l(n)(1)(B)(i)(II)) is amended—
(A) by inserting ‘‘and for services described in
subsection (a)(2)(E)(ii) furnished on or after Janu-
ary 1, 1992’’ after ‘‘1989’’; and
(B) by striking ‘‘1842(b)’’ and inserting
‘‘1842(b) (or, in the case of services furnished on or
after January 1, 1992, under section 1848)’’.
(2) Effective as if included in the enactment of
OBRA–1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C.
1395l(n)(1)(B)(i)(II)) is amended by striking ‘‘January
1,’’ and inserting ‘‘April 1,’’.
(e) PAYMENTS TO NURSE PRACTITIONERS IN RURAL
AREAS (SECTION 4155 OF OBRA–1990).—(1) Section
1861(s)(2)(K)(iii) (42 U.S.C. 1395x(s)(2)(K)(iii)) is
amended—
(A) by striking ‘‘subsection (aa)(3)’’ and insert-
ing ‘‘subsection (aa)(5)’’; and
(B) by striking ‘‘subsection (aa)(4)’’ and insert-
ing ‘‘subsection (aa)(6)’’.
(2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is
amended—
(A) by striking ‘‘and’’ before ‘‘(N)’’; and
(B) with respect to the matter inserted by sec-
tion 4155(b)(2)(B) of OBRA–1990—
283
(i) by striking ‘‘(M)’’ and inserting ‘‘, and
(O)’’, and
(ii) by transferring and inserting it (as
amended) immediately before the semicolon at
the end.
(3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is
amended—
(A) by striking ‘‘ambulatory’’ each place it ap-
pears and inserting ‘‘or ambulatory’’; and
(B) by striking ‘‘center,’’ and inserting ‘‘cen-
ter’’.
(4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A))
is amended by striking ‘‘subsection (a)(1)(M)’’ and insert-
ing ‘‘subsection (a)(1)(O)’’.
(5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is
amended by striking ‘‘subsection (s)(2)(K)(i)’’ and insert-
ing ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’.
(6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is
amended by striking ‘‘this Act’’ and inserting ‘‘this title’’.
(7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is
amended by striking ‘‘1861(s)(2)(K)(i)’’ and inserting
‘‘1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’.
(8) 
Section 
1866(a)(1)(H) 
(42 
U.S.C.
1395cc(a)(1)(H)) 
is 
amended 
by 
striking
284
‘‘1861(s)(2)(K)(i)’’ and inserting ‘‘1861(s)(2)(K)(i) or
1861(s)(2)(K)(iii)’’.
(f) 
OTHER
MISCELLANEOUS
AND
TECHNICAL
AMENDMENTS.—
(1) IMMEDIATE ENROLLMENT IN PART B BY IN-
DIVIDUALS
COVERED
BY
AN
EMPLOYMENT-BASED
PLAN.—(A) Subparagraphs (A) and (B) of section
1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each amend-
ed—
(i) by striking ‘‘beginning with the first
day of the first month in which the individual
is no longer enrolled’’ and inserting ‘‘including
each month during any part of which the indi-
vidual is enrolled’’; and
(ii) by striking ‘‘and ending seven months
later’’ and inserting ‘‘ending with the last day
of the eighth consecutive month in which the in-
dividual is at no time so enrolled’’.
(B) Paragraphs (1) and (2) of section 1838(e)
(42 U.S.C. 1395q(e)) are amended to read as fol-
lows:
‘‘(1) in any month of the special enrollment pe-
riod in which the individual is at any time enrolled
in a plan (specified in subparagraph (A) or (B), as
applicable, of section 1837(i)(3)) or in the first
285
month following such a month, the coverage period
shall begin on the first day of the month in which
the individual so enrolls (or, at the option of the in-
dividual, on the first day of any of the following
three months), or
‘‘(2) in any other month of the special enroll-
ment period, the coverage period shall begin on the
first day of the month following the month in which
the individual so enrolls.’’.
(C) The amendments made by subparagraphs
(A) and (B) shall take effect on the first day of the
first month that begins after the expiration of the
120-day period that begins on the date of the enact-
ment of this Act.
(2) BLEND AMOUNTS FOR AMBULATORY SUR-
GICAL CENTER PAYMENTS.—Subclauses (I) and (II)
of 
section 
1833(i)(3)(B)(ii) 
(42 
U.S.C.
1395l(i)(3)(B)(ii)) are each amended—
(A) by striking ‘‘for reporting’’ and insert-
ing ‘‘for portions of cost reporting’’; and
(B) by striking ‘‘and on or before’’ and in-
serting ‘‘and ending on or before’’.
(3) CLINICAL DIAGNOSTIC LABORATORY TESTS
(SECTION 4154 OF OBRA–1990).—Section 4154(e)(5)
286
of OBRA–1990 is amended by striking ‘‘(1)(A)’’ and
inserting ‘‘(1)(A),’’.
(4) SEPARATE PAYMENT UNDER PART B FOR
CERTAIN SERVICES (SECTION 4157 OF OBRA–1990).—
Section 4157(a) of OBRA–1990 is amended by
striking ‘‘(a) SERVICES
OF’’ and all that follows
through ‘‘Section’’ and inserting ‘‘(a) TREATMENT
OF SERVICES
OF CERTAIN HEALTH PRACTITION-
ERS.—Section’’.
(5) COMMUNITY HEALTH CENTERS AND RURAL
HEALTH CLINICS (SECTION 4161 OF OBRA–1990).—
(A) The fourth sentence of section 1861(aa)(2) (42
U.S.C. 1395x(aa)(2)) is amended—
(i) by striking ‘‘certification’’ the first
place it appears and inserting ‘‘approval’’; and
(ii) by striking ‘‘the Secretary’s approval
or disapproval of the certification’’ and insert-
ing ‘‘Secretary’s approval or disapproval’’.
(B) Section 4161(a)(7)(B) of OBRA–1990 is
amended by inserting ‘‘and to the Committee on Fi-
nance of the Senate’’ after ‘‘Representatives’’.
(6) SCREENING MAMMOGRAPHY (SECTION 4163
OF
OBRA–1990).—Section 4163 of OBRA–1990 is
amended—
287
(A) by adding at the end of subsection (d)
the following new paragraph:
‘‘(3) The amendment made by paragraph
(2)(A)(iv) shall apply to screening pap smears per-
formed on or after July 1, 1990.’’; and
(B) in subsection (e), by striking ‘‘The
amendments’’ and inserting ‘‘Except as pro-
vided in subsection (d)(3), the amendments’’.
(7) INJECTABLE DRUGS FOR TREATMENT OF
OSTEOPOROSIS.—
(A) 
CLARIFICATION
OF
DRUGS
COV-
ERED.—The 
section 
1861(jj) 
(42 
U.S.C.
1395x(jj)) inserted by section 4156(a)(2) of
OBRA–1990 is amended—
(i) in the matter preceding paragraph
(1), by striking ‘‘a bone fracture related
to’’; and
(ii) in paragraph (1), by striking ‘‘pa-
tient’’ and inserting ‘‘individual has suf-
fered a bone fracture related to post-meno-
pausal osteoporosis and that the individ-
ual’’.
(B) LIMITING COVERAGE TO DRUGS PRO-
VIDED BY HOME HEALTH AGENCIES.—(i) The
section 1861(jj) (42 U.S.C. 1395x(jj)) inserted
288
by section 4156(a)(2) of OBRA–1990 is
amended by striking ‘‘if’’ and inserting ‘‘by a
home health agency if’’.
(ii) 
Section 
1861(m)(5) 
(42 
U.S.C.
1395x(m)(5)) is amended by striking ‘‘but ex-
cluding’’ 
and 
inserting 
‘‘and 
a 
covered
osteoporosis drug (as defined in subsection
(kk), but excluding other’’.
(iii) 
Section 
1861(s)(2) 
(42 
U.S.C.
1395x(s)(2)) is amended—
(I) by adding ‘‘and’’ at the end of
subparagraph (N), and
(II) by striking subparagraph (O) and
redesignating subparagraph (P) as sub-
paragraph (O).
(C) PAYMENT
BASED
ON
REASONABLE
COST.—Section 
1833(a)(2) 
(42 
U.S.C.
1395l(a)(2)) is amended—
(i) in subparagraph (A), by striking
‘‘health services’’ and inserting ‘‘health
services (other than covered osteoporosis
drug (as defined in section 1861(kk)))’’;
(ii) by striking ‘‘and’’ at the end of
subparagraph (D);
289
(iii) by striking the semicolon at the
end and inserting ‘‘; and’’; and
(iv) by adding at the end the following
new subparagraph:
‘‘(F) with respect to covered osteoporosis
drug (as defined in section 1861(kk)) furnished
by a home health agency, 80 percent of the rea-
sonable cost of such service, as determined
under section 1861(v);’’.
(D) APPLICATION
OF
PART
B
DEDUCT-
IBLE.—Section 
1833(b)(2) 
(42 
U.S.C.
1395l(b)(2)) is amended by striking ‘‘services’’
and inserting ‘‘services (other than covered
osteoporosis 
drug 
(as 
defined 
in 
section
1861(kk)))’’.
(E) COVERED OSTEOPOROSIS DRUG (SEC-
TION 4156 OF OBRA–1990).—Section 1861 (42
U.S.C. 1395x) is amended, in the subsection
(jj) inserted by section 4156(a)(2) of OBRA–
1990, by striking ‘‘(jj) The term’’ and inserting
‘‘(kk) The term’’.
(8) OTHER
MISCELLANEOUS
AND
TECHNICAL
CORRECTIONS (SECTION 4164 OF OBRA–1990).—
(A) OWNERSHIP
DISCLOSURE
REQUIRE-
MENTS.—(i) 
Section 
1124A(a)(2)(A) 
(42
290
U.S.C. 1320a–3a(a)(2)(A)) is amended by
striking ‘‘of the Social Security Act’’.
(ii) Section 4164(b)(4) of OBRA–1990 is
amended by striking ‘‘paragraph’’ and inserting
‘‘paragraphs’’.
(B) DIRECTORY
OF
UNIQUE
PHYSICIAN
IDENTIFIER
NUMBERS.—Section 4164(c) of
OBRA–1990 is amended by striking ‘‘publish’’
and inserting ‘‘publish, and shall periodically
update,’’.
(g) EFFECTIVE DATE.—Except as otherwise provided
in this section, the amendments made by this section shall
take effect as if included in the enactment of OBRA–1990.
CHAPTER 2—PROVISIONS RELATING TO
PARTS A AND B
SEC. 5071. ELIMINATION OF ADD-ON FOR OVERHEAD OF
HOSPITAL-BASED HOME HEALTH AGENCIES.
(a) GENERAL RULE.—The first sentence of section
1861(v)(1)(L)(ii) (42 U.S.C. 1395x(v)(1)(L)(ii)) is
amended by striking ‘‘, with appropriate adjustment for
administrative and general costs of hospital-based agen-
cies’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to cost reporting periods beginning
after fiscal year 1993.
291
SEC. 5072. STUDY AND REPORT ON MEDICARE GME PAY-
MENTS.
(a) STUDY.—The Secretary of Health and Human
Services shall conduct a study of the methodology used
to determine payments to hospitals under the medicare
program for the costs of medical residency training pro-
grams and shall include in the study an analysis of the
causes of variation among such programs in the per resi-
dent costs of direct graduate medical education, including
the extent of support for such programs from non-hospital
sources.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Secretary shall submit
a report to Congress on the study conducted under sub-
section (a), and shall include in the report any rec-
ommendations considered appropriate by the Secretary for
modifications to the methodology used to determine pay-
ments to hospitals under the medicare program for the
costs of medical residency training programs that will en-
courage greater uniformity among medical residency train-
ing programs in the per resident costs of direct graduate
medical education.
SEC. 5073. MEDICARE AS SECONDARY PAYER.
(a) EXTENSION OF DATA MATCH PROGRAM.—Sec-
tion 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is
amended by striking ‘‘1995’’ and inserting ‘‘1998’’.
292
(b) PERMANENT APPLICATION TO DISABLED INDI-
VIDUALS.—Section 
1862(b)(1)(B) 
(42 
U.S.C.
1395y(b)(1)(B)) is amended by striking clause (iii).
(c) APPLICATION
OF ESRD RULES
TO CERTAIN
AGED AND DISABLED BENEFICIARIES AND EXTENSION
OF APPLICATION OF 18-MONTH RULE.—
(1) Subparagraphs (A)(iv) and (B)(ii) of section
1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each
amended—
(A) by striking ‘‘Clause (i) shall not apply’’
and inserting ‘‘Subparagraph (C) shall apply
instead of clause (i)’’, and
(B) by inserting ‘‘(without regard to enti-
tlement under section 226)’’ after ‘‘or’’ the sec-
ond place it appears.
(2) 
The 
second 
sentence 
of 
section
1862(b)(1)(C) is amended by striking ‘‘on or before
January 1, 1996’’ and inserting ‘‘before October 1,
1998’’.
(d) UNIFORM RULES FOR SIZE OF EMPLOYER.—
(1) IN
GENERAL.—Section 1862(b)(1) (42
U.S.C. 1395y(b)(1)) is amended by adding at the
end the following:
‘‘(E) GENERAL PROVISIONS.—
293
‘‘(i) EXCLUSION OF GROUP HEALTH
PLAN OF A SMALL EMPLOYER.—Subpara-
graphs (A) through (C) do not apply to a
group health plan unless the plan is a plan
of, or contributed to by, an employer or
employee organization that has 20 or more
individuals in current employment status
for each working day in each of 20 or more
calendar weeks in the current calendar
year or the preceding calendar year.
‘‘(ii) EXCEPTION FOR SMALL EMPLOY-
ERS
IN
MULTIEMPLOYER
OR
MULTIPLE
EMPLOYER GROUP HEALTH PLANS.—Sub-
paragraphs (A) through (C) also do not
apply with respect to individuals enrolled
in a multiemployer or multiple employer
group health plan if the coverage of the in-
dividuals under the plan is by virtue of
current employment status with an em-
ployer that does not have 20 or more indi-
viduals in current employment status for
each working day in each of 20 or more
calendar weeks in the current calendar
year and the preceding calendar year; but
the exception provided in this clause ap-
294
plies only if the plan elects treatment
under this clause.
‘‘(iii) APPLICATION OF CONTROLLED
GROUP
RULES.—For purposes of clauses
(i) and (ii)—
‘‘(I) all employees of corporations
which are members of a controlled
group of corporations (within the
meaning of section 1563(a) of the In-
ternal Revenue Code of 1986, deter-
mined without regard to subsection
(a)(4) or (e)(3)(C)), shall be treated
as employed by a single employer,
‘‘(II) all employees of trades or
businesses (whether or not incor-
porated) which are under common
control (under regulations prescribed
by the Secretary of the Treasury
under section 414(c) of that Code)
shall be treated as employed by a sin-
gle employer,
‘‘(III) all employees of the mem-
bers of an affiliated service group (as
defined in section 414(m) of that
295
Code) shall be treated as employed by
a single employer, and
‘‘(IV) leased employees (as de-
fined in section 414(n)(2) of that
Code) shall be treated as employees of
the person for whom they perform
services to the extent they are so
treated under section 414(n) of that
Code.
In applying sections of the Internal Reve-
nue Code of 1986 under this clause, the
Secretary shall rely upon the regulations
and decisions of the Secretary of the
Treasury respecting such sections.
‘‘(iv) GROUP
HEALTH
PLAN
DE-
FINED.—For purposes of this subsection,
the term ‘group health plan’ has the mean-
ing given such term in section 5000(b) of
the Internal Revenue Code of 1986, with-
out regard to section 5000(d) of such
Code.
‘‘(v) CURRENT EMPLOYMENT STATUS
DEFINED.—For purposes of this sub-
section, an individual has ‘current employ-
ment status’ with an employer if the indi-
296
vidual is an employee, is the employer, or
is associated with the employer in a busi-
ness relationship.
‘‘(vi) 
TREATMENT
OF
SELF-EM-
PLOYED
PERSONS
AS
EMPLOYERS.—For
purposes of this subsection, the term ‘em-
ployer’ includes a self-employed person.’’.
(2) CONFORMING AMENDMENTS FOR WORKING
AGED.—Section 
1862(b)(1)(A) 
(42 
U.S.C.
1395y(b)(1)(A)) is amended—
(A) by amending subclauses (I) and (II) of
clause (i) to read as follows:
‘‘(I) may not take into account
that an individual (or the individual’s
spouse) who is covered under the plan
by virtue of the individual’s current
employment status with an employer
is entitled to benefits under this title
under section 226(a), and
‘‘(II) shall provide that any indi-
vidual age 65 or over (and the individ-
ual’s spouse age 65 or older) who is
covered under the plan by virtue of
the individual’s current employment
status with an employer shall be enti-
297
tled to the same benefits under the
plan under the same conditions as any
such individual (or spouse) under age
65.’’;
(B) by striking clauses (ii), (iii), and (v),
and
(C) by redesignating clause (iv) as clause
(ii).
(3) AMENDMENTS
FOR
DISABLED
INDIVID-
UALS.—Section 1862(b) (42 U.S.C. 1395y(b)) is
amended—
(A) by amending the heading and clause
(i) of paragraph (1)(B) to read as follows:
‘‘(B) 
DISABLED
INDIVIDUALS
UNDER
GROUP HEALTH PLANS.—
‘‘(i) IN
GENERAL.—A group health
plan may not take into account that an in-
dividual (or a member of the individual’s
family) who is covered under the plan by
virtue of the individual’s current employ-
ment status with an employer is entitled to
benefits under this title under section
226(b).’’;
(B) by striking clause (iv) of paragraph
(1)(B); and
298
(C) in the second sentence of paragraph
(2)(A), by striking ‘‘or large group health
plan’’.
(4) AMENDMENTS
FOR
INDIVIDUALS
WITH
ESRD.—Section 
1862(b)(1)(C) 
(42 
U.S.C.
1395y(b)(1)(C)) is amended—
(A) in the matter preceding clause (i), by
striking ‘‘(as defined in subparagraph (A)(v))’’,
(B) by striking ‘‘solely’’ each place it ap-
pears,
(C) by striking ‘‘by reason of’’ and insert-
ing ‘‘under’’ each place it appears, and
(D) by inserting ‘‘or eligible for’’ after ‘‘en-
titled to’’ each place it appears.
(e) SECONDARY PAYER EXEMPTION FOR MEMBERS
OF RELIGIOUS ORDERS.—Effective as if included in the
enactment of OBRA–1989, section 6202(e)(2) of such Act
is amended by adding at the end the following: ‘‘Such
amendment also shall apply to items and services fur-
nished before such date with respect to secondary payer
cases which the Secretary of Health and Human Services
had not identified as of such date.’’.
(f) IMPROVING IDENTIFICATION OF MEDICARE SEC-
ONDARY PAYER SITUATIONS.—
(1) SURVEY OF BENEFICIARIES.—
299
(A) IN GENERAL.—Section 1862(b)(5) (42
U.S.C. 1395y(b)(5)) is amended by adding at
the end the following new subparagraph:
‘‘(D) 
OBTAINING
INFORMATION
FROM
BENEFICIARIES.—Before an individual applies
for benefits under part A or enrolls under part
B, the Administrator shall mail the individual a
questionnaire to obtain information on whether
the individual is covered under a primary plan
and the nature of the coverage provided under
the plan, including the name, address, and iden-
tifying number of the plan.’’.
(B) DISTRIBUTION OF QUESTIONNAIRE BY
CONTRACTOR.—The Secretary of Health and
Human Services shall enter into an agreement
with an entity not later than April 1, 1994, to
distribute the questionnaire described in section
1862(b)(5)(D) of the Social Security Act (as
added by subparagraph (A)).
(C) NO MEDICARE SECONDARY PAYER DE-
NIAL BASED ON FAILURE TO COMPLETE QUES-
TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.
1395y(b)(2)) is amended by adding at the end
the following new subparagraph:
300
‘‘(C) TREATMENT OF QUESTIONNAIRES.—
The Secretary may not fail to make payment
under subparagraph (A) solely on the ground
that an individual failed to complete a question-
naire concerning the existence of a primary
plan.’’.
(2) MANDATORY
SCREENING
BY
PROVIDERS
AND SUPPLIERS UNDER PART B.—
(A) IN
GENERAL.—Section 1862(b) (42
U.S.C. 1395y(b)) is amended by adding at the
end the following new paragraph:
‘‘(6) SCREENING REQUIREMENTS FOR PROVID-
ERS AND SUPPLIERS.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of this title, no payment may be
made for any item or service furnished under
part B unless the entity furnishing such item or
service completes (to the best of its knowledge
and on the basis of information obtained from
the individual to whom the item or service is
furnished) the portion of the claim form relat-
ing to the availability of other health benefit
plans.
‘‘(B) PENALTIES.—An entity that know-
ingly, willfully, and repeatedly fails to complete
301
a claim form in accordance with subparagraph
(A) or provides inaccurate information relating
to the availability of other health benefit plans
on a claim form under such subparagraph shall
be subject to a civil money penalty of not to ex-
ceed $2,000 for each such incident. The provi-
sions of section 1128A (other than subsections
(a) and (b)) shall apply to a civil money penalty
under the previous sentence in the same man-
ner as such provisions apply to a penalty or
proceeding under section 1128A(a).’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall apply with re-
spect to items and services furnished on or
after January 1, 1994.
(g) IMPROVEMENTS
IN RECOVERY
OF PAYMENTS
FROM PRIMARY PAYERS.—
(1) SUBMISSION OF REPORTS ON EFFORTS TO
RECOVER
ERRONEOUS
PAYMENTS.—Section
1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (H); and
(B) by inserting after subparagraph (H)
the following new subparagraph:
302
‘‘(I) will submit annual reports to the Secretary
describing the steps taken to recover payments made
under this part for items or services for which pay-
ment has been or could be made under a primary
plan (as defined in section 1862(b)(2)(A)).’’.
(2) REQUIREMENTS UNDER CARRIER PERFORM-
ANCE
EVALUATION
PROGRAM.—Section 1842(b)(2)
(42 U.S.C. 1395u(b)(2)) is amended by adding at
the end the following new subparagraph:
‘‘(D) In addition to any other standards and criteria
established by the Secretary for evaluating carrier per-
formance under this paragraph relating to avoiding erro-
neous payments, the Secretary shall establish standards
and criteria relating to the carrier’s success in recovering
payments made under this part for items or services for
which payment has been or could be made under a pri-
mary plan (as defined in section 1862(b)(2)(A)).’’.
(3) DEADLINE FOR REIMBURSEMENT BY PRI-
MARY PLANS.—
(A) 
IN
GENERAL.—Section
1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))
is amended by adding at the end the following
sentence: ‘‘If reimbursement is not made to the
appropriate Trust Fund before the expiration of
the 60-day period that begins on the date such
303
notice or other information is received, the Sec-
retary may charge interest (beginning with the
date on which the notice or other information
is received) on the amount of the reimburse-
ment until reimbursement is made (at a rate
determined by the Secretary in accordance with
regulations of the Secretary of the Treasury ap-
plicable to charges for late payments).’’.
(B) 
CONFORMING
AMENDMENT.—The
heading of clause (i) of section 1862(b)(2)(B) is
amended to read as follows: ‘‘REPAYMENT RE-
QUIRED.—’’.
(C) EFFECTIVE DATE.—The amendments
made by this paragraph shall apply to payments
for items and services furnished on or after the
date of the enactment of this Act.
(4) EFFECTIVE DATE.—The amendments made
by paragraphs (1) and (2) shall apply to contracts
with fiscal intermediaries and carriers under title
XVIII of the Social Security Act for years beginning
with 1994.
(h) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—
(1) The sentence in section 1862(b)(1)(C)
added by section 4203(c)(1)(B) of OBRA–1990 is
304
amended by striking ‘‘clauses (i) and (ii)’’ and in-
serting ‘‘this subparagraph’’.
(2) Effective as if included in the enactment of
OBRA–1989, section 1862(b)(1) is amended—
(A) 
in 
subparagraphs 
(A)(v) 
and
(B)(iv)(II), by inserting ‘‘, without regard to
section 5000(d) of such Code’’ before the period
at the end of each subparagraph;
(B) in subparagraph (A)(iii), by striking
‘‘current calendar year or the preceding cal-
endar year’’ and inserting ‘‘current calendar
year and the preceding calendar year’’; and
(C) in the matter in subparagraph (C)
after clause (ii), by striking ‘‘taking into ac-
count that’’ and inserting ‘‘paying benefits sec-
ondary to this title when’’.
(3) 
Section 
1862(b)(5)(C)(i) 
(42 
U.S.C.
1395y(b)(5)(C)(i)) 
is 
amended 
by 
striking
‘‘6103(l)(12)(D)(iii)’’ 
and 
inserting
‘‘6103(l)(12)(E)(iii)’’.
(4) Section 4203(c)(2) of OBRA–1990 is
amended—
(A) by striking ‘‘the application of clause
(iii)’’ and inserting ‘‘the second sentence’’;
305
(B) by striking ‘‘on individuals’’ and all
that follows through ‘‘section 226A of such
Act’’;
(C) in clause (ii), by striking ‘‘clause’’ and
inserting ‘‘sentence’’;
(D) in clause (v), by adding ‘‘and’’ at the
end; and
(E) in clause (vi)—
(i) by inserting ‘‘of such Act’’ after
‘‘1862(b)(1)(C)’’, and
(ii) by striking the period at the end
and inserting the following: ‘‘, without re-
gard to the number of employees covered
by such plans.’’.
(5) Section 4203(d) of OBRA–1990 is amended
by striking ‘‘this subsection’’ and inserting ‘‘this sec-
tion’’.
(6) Except as provided in paragraph (2), the
amendments made by this subsection shall be effec-
tive as if included in the enactment of OBRA–1990
and shall be executed before the amendments made
by subsections (a) through (d) of this section.
(i) EFFECTIVE DATE.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this section, the amendments made by this
306
section shall take effect on the date of the enactment
of this Act.
(2) ESRD AND
UNIFORM
SIZE
RULES.—The
amendments made by subsections (c) and (d) apply
to items and services furnished on or after January
1, 1994.
SEC. 5074. EXTENSION OF SELF-REFERRAL BAN TO ADDI-
TIONAL SPECIFIED SERVICES.
(a) EXTENSION
TO DESIGNATED HEALTH SERV-
ICES.—
(1) IN
GENERAL.—Section 1877 (42 U.S.C.
1395nn) is amended—
(A) by striking ‘‘clinical laboratory serv-
ices’’ and ‘‘CLINICAL LABORATORY SERVICES’’
and inserting ‘‘designated health services’’ and
‘‘DESIGNATED HEALTH SERVICES’’, respectively,
each place either appears in subsections (a)(1),
(b)(2)(A)(ii), (b)(4), (d)(1), and (d)(3); and
(B) by adding at the end the following new
subsection:
‘‘(i) DESIGNATED HEALTH SERVICES DEFINED.—In
this section, the term ‘designated health services’ means—
‘‘(1) clinical laboratory services;
‘‘(2) physical or occupational therapy services;
‘‘(3) radiology or other diagnostic services;
307
‘‘(4) radiation therapy services;
‘‘(5) the furnishing of durable medical equip-
ment;
‘‘(6) the furnishing of parenteral and enteral
nutrition nutrients, supplies, and equipment;
‘‘(7) home health services; and
‘‘(8) home infusion therapy services.’’.
(2) CONFORMING AMENDMENTS.—Section 1877
is further amended—
(A) in subsection (g)(1), by striking ‘‘clini-
cal laboratory service’’ and inserting ‘‘des-
ignated health service’’, and
(B) in subsection (h)(7)(B), by striking
‘‘clinical laboratory service’’ and inserting ‘‘des-
ignated health service’’.
(b) MULTIPLE
LOCATIONS
FOR
GROUP
PRAC-
TICES.—Section 
1877(b)(2)(A)(ii)(II) 
(42 
U.S.C.
1395nn(b)(2)(A)(ii)(II)) is amended by striking ‘‘central-
ized provision’’ and inserting ‘‘provision of some or all’’.
(c) TREATMENT
OF
COMPENSATION
ARRANGE-
MENTS.—
(1) RENTAL
OF
OFFICE
SPACE
AND
EQUIP-
MENT.—Paragraph (1) of section 1877(e) (42
U.S.C. 1395nn(e)) is amended to read as follows:
308
‘‘(1) RENTAL OF OFFICE SPACE; RENTAL OF
EQUIPMENT.—
‘‘(A) OFFICE SPACE.—Payments made by
a lessee to a lessor for the use of premises if—
‘‘(i) the lease is set out in writing,
signed by the parties, and specifies the
premises covered by the lease,
‘‘(ii) the aggregate space rented or
leased is reasonable and necessary for the
legitimate business purposes of the lease or
rental and is used exclusively by the lessee
when being used by the lessee,
‘‘(iii) the lease provides for a term of
rental or lease for at least one year,
‘‘(iv) the rental charges over the term
of the lease are set in advance, are consist-
ent with fair market value, and are not de-
termined in a manner that takes into ac-
count the volume or value of any referrals
or other business generated between the
parties,
‘‘(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
309
‘‘(vi) the lease covers all of the prem-
ises leased between the parties for the pe-
riod of the lease, and
‘‘(vii) the compensation arrangement
meets such other requirements as the Sec-
retary may impose by regulation as needed
to protect against program or patient
abuse.
‘‘(B) EQUIPMENT.—Payments made by a
lessee of equipment to the lessor of the equip-
ment for the use of the equipment if—
‘‘(i) the lease is set out in writing,
signed by the parties, and specifies the
equipment covered by the lease,
‘‘(ii) the equipment rented or leased is
reasonable and necessary for the legitimate
business purposes of the lease or rental
and is used exclusively by the lessee when
being used by the lessee,
‘‘(iii) the lease provides for a term of
rental or lease of at least one year,
‘‘(iv) the rental charges over the term
of the lease are set in advance, are consist-
ent with fair market value, and are not de-
termined in a manner that takes into ac-
310
count the volume or value of any referrals
or other business generated between the
parties,
‘‘(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
‘‘(vi) the lease covers all of the equip-
ment leased between the parties for the pe-
riod of the lease, and
‘‘(vii) the compensation arrangement
meets such other requirements as the Sec-
retary may impose by regulation as needed
to protect against program or patient
abuse.’’.
(2) BONA
FIDE
EMPLOYMENT
RELATION-
SHIPS.—Section 
1877(e)(2) 
(42 
U.S.C.
1395nn(e)(2)) is amended—
(A) by striking ‘‘AND SERVICE’’ and ‘‘WITH
HOSPITALS’’;
(B) by striking ‘‘An arrangement’’ and all
that follows through ‘‘if’’ and inserting ‘‘Any
amount paid by an employer to a physician (or
immediate family member) who has a bona fide
employment relationship with the employer for
the provision of services if’’;
311
(C) in subparagraphs (A), (B), and (D), by
striking ‘‘arrangement’’ and inserting ‘‘employ-
ment’’;
(D) in subparagraph (C), by striking ‘‘to
the hospital’’; and
(E) by adding at the end the following:
‘‘Subparagraph (B)(ii) shall not be construed as pro-
hibiting the payment of remuneration in the form of
shares of overall profits or in the form of a produc-
tivity bonus based on services performed personally
by the physician or member, if the amount of the re-
muneration is not determined in a manner that
takes into account directly the volume or value of
any referrals by the referring physician.’’.
(3) PERSONAL SERVICE ARRANGEMENTS.—Sec-
tion 1877(e) is further amended by adding at the
end the following new paragraph:
‘‘(7) PERSONAL SERVICE ARRANGEMENTS.—Re-
muneration from an entity under an arrangement
if—
‘‘(A) the arrangement is set out in writing,
signed by the parties, and specifies the services
covered by the arrangement,
‘‘(B) the arrangement covers all of the
services to be provided,
312
‘‘(C) the aggregate services contracted for
do not exceed those that are reasonable and
necessary for the legitimate business purposes
of the arrangement,
‘‘(D) the term of the arrangement is for at
least one year,
‘‘(E) the compensation to be paid over the
term of the arrangement is set in advance, does
not exceed fair market value, and is not deter-
mined in a manner that takes into account the
volume or value of any referrals or other busi-
ness generated between the parties,
‘‘(F) the services to be performed under
the arrangement do not involve the counseling
or promotion of a business arrangement of
other activity that violates any State or Federal
law, and
‘‘(G) the arrangement meets such other re-
quirements as the Secretary may impose by reg-
ulation as needed to protect against program or
patient abuse.’’.
(4) 
ADDITIONAL
EXCEPTIONS.—Section
1877(e) is further amended by adding at the end the
following new paragraphs:
313
‘‘(8) PAYMENTS BY A PHYSICIAN FOR ITEMS
AND SERVICES.—Payments made by a physician—
‘‘(A) to a laboratory in exchange for the
provision of clinical laboratory services, or
‘‘(B) to an entity as compensation for
other items or services if the items or services
are furnished at a price that is consistent with
fair market value.
‘‘(9) PAYMENTS FOR PATHOLOGY SERVICES OF
A GROUP PRACTICE.—Payments made to a group
practice for pathology services under an agreement
if—
‘‘(A) the agreement is set out in writing
and specifies the services to be provided by the
parties and the compensation for services pro-
vided under the agreement,
‘‘(B) the compensation paid over the term
of the agreement is consistent with fair market
value and is not determined in a manner that
takes into account the volume or value of any
referrals or other business generated between
the parties,
‘‘(C) the compensation is provided pursu-
ant to an agreement which would be commer-
314
cially reasonable even if no referrals were made
to the entity, and
‘‘(D) the compensation arrangement be-
tween the parties meets such other require-
ments as the Secretary may impose by regula-
tion as needed to protect against program or
patient abuse.’’.
(4) 
REFERRING
PHYSICIANS.—Section
1877(h)(7)(C) (42 U.S.C. 1395nn(h)(7)(C)) is
amended—
(A) by inserting ‘‘a request by a radiologist
for diagnostic radiology services, and a request
by a radiation oncologist for radiation therapy,’’
after ‘‘examination services,’’, and
(B) by inserting ‘‘, radiologist, or radiation
oncologist’’ after ‘‘pathologist’’ the second place
it appears.
(d) TREATMENT OF GROUP PRACTICES.—
(1) USE OF BILLING NUMBERS, ETC.—Section
1877 is amended—
(A) in subsection (b)(2)(B), by inserting
‘‘under a billing number assigned to the group
practice’’ after ‘‘member’’,
315
(B) in subsection (h)(4)(B), by inserting
‘‘and under a billing number assigned to the
group’’ after ‘‘in the name of the group’’, and
(C) in subsection (h)(4)(C), by striking
‘‘by members of the group’’.
(2) TREATMENT
OF
SERVICES
UNDER
AR-
RANGEMENTS
BETWEEN
HOSPITALS
AND
GROUP
PRACTICES.—
(A) IN GENERAL.—Section 1877(h)(4) (42
U.S.C. 1395nn(h)(4)) is amended—
(i) in subparagraph (B) (as amended
by paragraph (1)(B)), by inserting ‘‘(or
are billed in the name of a hospital for
which the group provides designated health
services pursuant to an arrangement that
meets the requirements of subparagraph
(B))’’ after ‘‘assigned to the group’’;
(ii) by redesignating subparagraphs
(A) through (D) as clauses (i) through
(iv), respectively;
(iii) by inserting ‘‘(A)’’ after ‘‘.—’’;
and
(iv) by adding at the end the following
new subparagraph:
316
‘‘(B) The requirements of this subparagraph,
with respect to an arrangement for designated
health services provided by the group and billed in
the name of a hospital, are that—
‘‘(i) with respect to services provided to an
inpatient of the hospital, the arrangement is
pursuant to the provision of inpatient hospital
services under section 1861(b)(3);
‘‘(ii) the arrangement began before Decem-
ber 19, 1989, and has continued in effect with-
out interruption since such date;
‘‘(iii) the group provides substantially all of
the designated health services to the hospital’s
patients;
‘‘(iv) the arrangement is pursuant to an
agreement that is set out in writing and that
specifies the services to be provided by the par-
ties and the compensation for services provided
under the agreement;
‘‘(v) the compensation paid over the term
of the agreement is consistent with fair market
value and the compensation per unit of services
is fixed in advance and is not determined in a
manner that takes into account the volume or
317
value of any referrals or other business gen-
erated between the parties;
‘‘(vi) the compensation is provided pursu-
ant to an agreement which would be commer-
cially reasonable even if no referrals were made
to the entity; and
‘‘(vii) the arrangement between the parties
meets such other requirements as the Secretary
may impose by regulation as needed to protect
against program or patient abuse.’’.
(B) CONFORMING
AMENDMENT.—Section
1877(b)(2)(B) (42 U.S.C. 1395nn(b)(2)(B)) is
amended by inserting ‘‘(or by a hospital for
which such a group practice provides designated
health services pursuant to an arrangement
that meets the requirements of subsection
(h)(4)(B))’’ before ‘‘, or by an entity’’.
(3) TREATMENT OF CERTAIN FACULTY PRAC-
TICE
PLANS.—The 
last 
sentence 
of 
section
1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)), as re-
designated by paragraph (2)(A), is amended by in-
serting ‘‘, institution of higher education, or medical
school’’ after ‘‘hospital’’.
(e) EXPANDING RURAL PROVIDER EXCEPTION TO
COVER COMPENSATION ARRANGEMENTS.—
318
(1) IN GENERAL.—Section 1877(b) (42 U.S.C.
1395nn(b)) is amended—
(A) by redesignating paragraph (5) as
paragraph (7), and
(B) by inserting after paragraph (4) the
following new paragraph:
‘‘(5) RURAL PROVIDERS.—In the case of des-
ignated services if—
‘‘(A) the entity furnishing the services is in
a 
rural 
area 
(as 
defined 
in 
section
1886(d)(2)(D)), and
‘‘(B) substantially all of the services fur-
nished by the entity to individuals entitled to
benefits under this title are furnished to such
individuals who reside in such a rural area.’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1877(d) (42 U.S.C. 1395nn(d)) is amended—
(A) by striking paragraph (2), and
(B) by redesignating paragraph (3) as
paragraph (2).
(f) EXCEPTION FOR SHARED FACILITY LABORATORY
SERVICES.—
(1) IN GENERAL.—Section 1877 is amended—
319
(A) in subsection (b), as amended by sub-
section (e)(1), by inserting after paragraph (5)
the following new paragraph:
‘‘(6) SHARED
FACILITY
LABORATORY
SERV-
ICES.—
‘‘(A) IN GENERAL.—In the case of shared
facility laboratory services of a shared facility—
‘‘(i) that are furnished—
‘‘(I) personally by the referring
physician who is a shared facility phy-
sician or personally by an individual
supervised by such a physician or by
another shared facility physician and
employed under the shared facility ar-
rangement,
‘‘(II) by a shared facility in a
building in which the referring physi-
cian furnishes physician’s services un-
related to the furnishing of shared fa-
cility laboratory services, and
‘‘(III) to a patient of a shared fa-
cility physician; and
‘‘(ii) that are billed by the referring
physician or by an entity that is wholly
owned by such physician.
320
‘‘(B) LIMITATION.—The exception under
this paragraph shall only apply to a shared fa-
cility only if the facility and the shared facility
arrangement were established as of June 26,
1992.’’; and
(B) in subsection (h), by adding at the end
the following new paragraph:
‘‘(8) SHARED
FACILITY
RELATED
DEFINI-
TIONS.—
‘‘(A) 
SHARED
FACILITY
LABORATORY
SERVICES.—The term ‘shared facility laboratory
services’ means, with respect to a shared facil-
ity, clinical laboratory services furnished by the
facility to patients of shared facility physicians.
‘‘(B) 
SHARED
FACILITY.—The 
term
‘shared facility’ means an entity that furnishes
shared facility laboratory services under a
shared facility arrangement.
‘‘(C) SHARED FACILITY PHYSICIAN.—The
term ‘shared facility physician’ means, with re-
spect to a shared facility, a physician who has
a financial relationship under a shared facility
arrangement with the facility.
‘‘(D) SHARED FACILITY ARRANGEMENT.—
The term ‘shared facility arrangement’ means,
321
with respect to the provision of shared facility
laboratory services in a building, a financial ar-
rangement—
‘‘(i) which is only between physicians
who are providing services (unrelated to
shared facility laboratory services) in the
same building,
‘‘(ii) in which the overhead expenses
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 corpora-
tion, is wholly owned and controlled by
shared facility physicians.’’.
(2) GAO STUDY
OF
SHARED
FACILITY
AR-
RANGEMENTS.—
(A) IN GENERAL.—The Comptroller Gen-
eral shall analyze the effect on the utilization of
health services of shared facility arrangements
for which an exception is provided under the
amendments made by paragraph (1). The anal-
ysis shall include a review of the effect of the
limitation, described in section 1877(b)(6)(B) of
the Social Security Act (as added by paragraph
322
(1)), with respect to such exception and on the
availability of services (including hematology
services).
(B) REPORT.—Not later than January 1,
1995, the Comptroller General shall submit a
report to Congress on the analysis conducted
under subparagraph (A). The report shall in-
clude recommendations with respect to chang-
ing the limitation.
(g) EXEMPTION OF COMPENSATION ARRANGEMENTS
INVOLVING CERTAIN TYPES OF REMUNERATION.—Sec-
tion 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is amended—
(1) by striking subparagraph (B);
(2) in subparagraph (A), by inserting before the
period the following: ‘‘(other than an arrangement
involving only remuneration described in subpara-
graph (B))’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) Remuneration described in this subpara-
graph is any remuneration consisting of any of the
following:
‘‘(i) The forgiveness of amounts owed for
inaccurate tests or procedures, mistakenly per-
323
formed tests or procedures, or the correction of
minor billing errors.
‘‘(ii) The provision of items, devices, or
supplies that are used solely to—
‘‘(I) collect, transport, process, or
store specimens for the entity providing
the item, device, or supply, or
‘‘(II) communicate the results of tests
or procedures for such entity.’’.
(h) EXCEPTION
FOR PUBLICLY-TRADED SECURI-
TIES.—Section 1877(c)(2) (42 U.S.C. 1395nn(d)(2)) is
amended 
by 
striking 
‘‘total 
assets 
exceeding
$100,000,000’’ and inserting ‘‘stockholder equity exceed-
ing $75,000,000’’.
(i) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—Section 1877 (42 U.S.C. 1395nn) is amended—
(1) in subsection (b)(2)(A)(i), in subparagraph
(A)(i), by striking ‘‘who are employed by such physi-
cian or group practice and who are personally’’ and
inserting ‘‘who are directly’’;
(2) in the fourth sentence of subsection (f)—
(A) by striking ‘‘provided’’ and inserting
‘‘furnished’’, and
(B) by striking ‘‘provides’’ and inserting
‘‘furnish’’;
324
(3) in the fifth sentence of subsection (f)—
(A) by striking ‘‘providing’’ each place it
appears and inserting ‘‘furnishing’’,
(B) by striking ‘‘with respect to the provid-
ers’’ and inserting ‘‘with respect to the enti-
ties’’, and
(C) by striking ‘‘diagnostic imaging serv-
ices of any type’’ and inserting ‘‘magnetic reso-
nance imaging, computerized axial tomography
scans, and ultrasound services’’; and
(4) in subsection (a)(2)(B), by striking ‘‘sub-
section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.
(j) EFFECTIVE DATES.—
(1) The amendments made by subsection (a)
apply with respect to a referral by a physician for
designated health services (as described in section
1877(i) of the Social Security Act) made after De-
cember 31, 1994.
(2) The amendments made by this section
(other than subsection (a)) shall apply to referrals
made on or after January 1, 1992.
SEC. 
5075. 
REDUCTION 
IN 
PAYMENT 
FOR 
ERYTHRO-
POIETIN.
(a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42
U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—
325
(1) by striking ‘‘1991’’ and inserting ‘‘1994’’,
and
(2) by striking ‘‘$11’’ and inserting ‘‘$10’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to erythropoietin furnished after
1993.
SEC. 
5076. 
MEDICARE 
HOSPITAL 
AGREEMENTS 
WITH
ORGAN PROCUREMENT ORGANIZATIONS.
(a) IN GENERAL.—Section 1138(a)(1) (42 U.S.C.
1320b–8(a)(1)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A),
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) in the case of a hospital or rural primary
care hospital that has in effect an agreement (de-
scribed in section 371(b)(3)(A) of the Public Health
Service Act) with an organ procurement organiza-
tion, the agreement is with such organization for the
service area in which the hospital is located (as es-
tablished under such section).’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to hospitals participating in the
351
(1) Section 1882(r) (42 U.S.C. 1395ss(r)) is
amended—
(A) in paragraph (1), by striking ‘‘or sold’’
and inserting ‘‘or renewed (or otherwise provide
coverage after the date described in subsection
(p)(1)(C))’’;
(B) in paragraph (1)(A), by inserting ‘‘for
periods after the effective date of these provi-
sions’’ after ‘‘the policy can be expected’’;
(C) in paragraph (1)(A), by striking
‘‘Commissioners,’’ 
and 
inserting 
‘‘Commis-
sioners)’’;
(D) in paragraph (1)(B), by inserting be-
fore the period at the end the following: ‘‘,
treating policies of the same type as a single
policy for each standard package’’;
(E) by adding at the end of paragraph (1)
the following: ‘‘For the purpose of calculating
the refund or credit required under paragraph
(1)(B) for a policy issued before the date speci-
fied in subsection (p)(1)(C), the refund or cred-
it calculation shall be based on the aggregate
benefits provided and premiums collected under
all such policies issued by an insurer in a State
(separated as to individual and group policies)
373
‘‘(A) based on information provided by a
beneficiary’s physician, the State has made a
determination that the availability of the drug
is essential to the health of the beneficiary
under the State plan, and the Secretary has re-
viewed and approved such determination; and
‘‘(B) the drug has been given a rating of
1–A by the Food and Drug Administration.’’;
(D) in paragraph (4)—
(i) by striking ‘‘in compliance with’’
and inserting ‘‘in effect under’’, and
(ii) by striking ‘‘coverage of the man-
ufacturer’s drugs’’ and inserting ‘‘ingredi-
ent costs of the manufacturer’s covered
outpatient drugs covered’’; and
(E) by adding at the end the following new
paragraph:
‘‘(5) APPLICATION
IN
CERTAIN
STATES
AND
TERRITORIES.—
‘‘(A) APPLICATION IN STATES OPERATING
UNDER
DEMONSTRATION
PROJECTS.—In the
case of any State which is providing medical as-
sistance to its residents under a waiver granted
under section 1115, the Secretary shall require
the State to meet the requirements of section