‘‘(C) The arrangement must cover all of
the items and services to be provided by the
physician or immediate family member to the
entity or, alternatively, cross refer to any other
agreements for items or services between any of
the parties.
‘‘(D) The arrangement is consistent with
fair market value.
‘‘(E) The arrangement must specify the
compensation that will be provided under the
arrangement, which must be set in advance,
consistent with fair market value and not deter-
mined in a manner that takes into account the
volume or value of any referrals, payments for
referrals for medical services that are not cov-
ered under this title or title XIX, or other busi-
ness generated between the parties.
‘‘(F) The arrangement is commercially rea-
sonable and further the legitimate business pur-
poses of the parties.
‘‘(G) The arrangement meets such other
requirements as the Secretary may impose as
needed to protect against program or patient
abuse.
‘‘(2) EXCEPTIONS.—The following shall not be
considered to be a compensation arrangement de-
scribed in subsection (a)(2)(B):
‘‘(A) PHYSICIAN
RECRUITMENT.—In the
case of remuneration which is provided by a
hospital to a physician to induce the physician
to relocate to the geographic area served by the
hospital in order to be a member of the medical
staff of the hospital, if—
‘‘(i) the physician is not required to
refer patients to the hospital,
‘‘(ii) the amount of the remuneration
under the arrangement is not determined
in a manner that takes into account (di-
rectly or indirectly) the volume or value of
any referrals by the referring physician,
and
‘‘(iii) the arrangement meets such
other requirements as the Secretary may
impose by regulation as needed to protect
against program or patient abuse.
‘‘(B) DE
MINIMIS
EXCEPTION.—In the
case of remuneration in the form of items or
services, not including cash or cash equivalents,
if—
‘‘(i) the remuneration does not exceed
$50 per gift and an aggregate of $300 per
year, and
‘‘(ii) the remuneration is not deter-
mined in any way that takes into account
the volume or value of the physician’s re-
ferrals to the entity.’’.
SEC. 4. REVISION OF DEFINITIONS.
(a) EXCLUSION
OF
INTRAOCULAR
LENS, EYE-
GLASSES, AND CONTACT LENSES FROM DESIGNATED
HEALTH SERVICES SUBJECT TO PROHIBITIONS.—Section
1877(h)(6)(H) (42 U.S.C. 1395nn(h)(6)(H)) is amended
by striking the period at the end and inserting the fol-
lowing: ‘‘, other than an intraocluar lens inserted during
or subsequent to cataract surgery, eyeglasses, or contact
lenses.’’.
(b) CHANGE IN DEFINITION OF GROUP PRACTICE.—
Section 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)) is
amended by amending clause (vi) to read as follows:
‘‘(vi) in which the overhead expenses
of and the income from the practice are
distributed according to methods that indi-
cate that the practice is a unified busi-
ness.’’.
SEC. 5. CHANGE IN REPORTING REQUIREMENTS.
(a) REQUIREMENT.—Section 1877(f) (42 U.S.C.
1395nn(f)) is amended—
(1) by striking ‘‘shall provide the Secretary
with’’ and inserting ‘‘shall provide to the Secretary
upon request for purposes of an audit’’; and
(2) by striking the second sentence.
(b) SANCTIONS.—Section 1877(g)(5) (42 U.S.C.
1395nn(g)(5)) is amended by striking all that follows
‘‘Any person who is required, but fails,’’ and inserting the
following: ‘‘to provide the Secretary upon request for pur-
poses of an audit with information concerning the entity’s
ownership, investment, and compensation arrangements,
including—
‘‘(A) the covered items and services pro-
vided by the entity; and
‘‘(B) the names and unique physician iden-
tification numbers of all physicians with an
ownership or investment interest (as described
in subsection (a)(2)(B)) in the entity, or who
have such a compensation relationship with the
entity, or whose immediate relatives have such
an ownership or investment interest or who
have such a compensation relationship with the
entity,
is subject to a civil money penalty at the Secretary’s
discretion of not more than $10,000 for each day of
non-compliance following a request by the Secretary
for information concerning such arrangements.’’.
SEC. 6. ADVISORY OPINIONS.
Section 1877(g)(6)(A) (42 U.S.C. 1395nn(g)(6)(A))
is amended by inserting before the period at the end of
the first sentence the following: ‘‘within 60 days after the
date the Secretary receives a written request for such an
advisory opinion’’.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall apply to re-
ferrals made on or after January 1, 2000.
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