304 
ceeding cost reporting period (beginning before the 
date of the enactment of this Act) by the applicable 
percentage increase under section 1886(b)(3)(B)(ii) 
of such Act. 
(5) CLARIFICATION
OF
TREATMENT
OF
SAT-
ELLITE
FACILITIES
AND
REMOTE
LOCATIONS.—A 
long-stay cancer hospital described in section 
1886(d)(1)(B)(vi) of the Social Security Act, as des-
ignated under paragraph (1), shall include satellites 
or remote site locations for such hospital established 
before or after the date of the enactment of this Act 
if the provider-based requirements under section 
413.65 of title 42, Code of Federal Regulations, ap-
plicable certification requirements under title XVIII 
of the Social Security, and such other applicable 
State licensure and certificate of need requirements 
are met with respect to such satellites or remote site 
locations. 
SEC. 504. INCREASING THE DSH ADJUSTMENT CAP. 
Section 1886(d)(5)(F)(xiv) of the Social Security Act 
(42 U.S.C. 1395ww(d)(5)(F)(xiv)) is amended— 
(1) subclause (II), by striking ‘‘12 percent’’ and 
inserting ‘‘the percent specified in subclause (III)’’; 
and 
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(2) by adding at the end the following new sub-
clause: 
‘‘(III) The percent specified in this subclause is, 
in the case of discharges occurring— 
‘‘(a) before October 1, 2007, 12 percent; 
‘‘(b) during fiscal year 2008, 16 percent; 
‘‘(c) during fiscal year 2009, 18 percent; 
and 
‘‘(d) on or after October 1, 2009, 12 per-
cent.’’. 
SEC. 505. PPS-EXEMPT CANCER HOSPITALS. 
(a) AUTHORIZING
REBASING
FOR
PPS-EXEMPT 
CANCER HOSPITALS.—Section 1886(b)(3)(F) of the So-
cial Security Act (42 U.S.C. 1395ww(b)(3)(F)) is amend-
ed by adding at the end the following new clause: 
‘‘(iv) In the case of a hospital (or unit 
described in the matter following clause (v) 
of subsection (d)(1)(B)) that received pay-
ment under this subsection for inpatient 
hospital services furnished during cost re-
porting periods beginning before October 
1, 1999, that is within a class of hospital 
described in clause (iii) (other than sub-
clause (IV), relating to long-term care hos-
pitals, and that requests the Secretary (in 
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306 
a form and manner specified by the Sec-
retary) to effect a rebasing under this 
clause for the hospital, the Secretary may 
compute the target amount for the hos-
pital’s 12-month cost reporting period be-
ginning during fiscal year 2008 as an 
amount equal to the average described in 
clause (ii) but determined as if any ref-
erence in such clause to ‘the date of the 
enactment of this subparagraph’ were a 
reference to ‘the date of the enactment of 
this clause’.’’. 
(b) MEDPAC REPORT
ON PPS-EXEMPT CANCER 
HOSPITALS.—Not later than March 1, 2009, the Medicare 
Payment Advisory Commission (established under section 
1805 of the Social Security Act (42 U.S.C. 1395b–6)) 
shall submit to the Secretary and Congress a report evalu-
ating the following: 
(1) Measures of payment adequacy and Medi-
care margins for PPS-exempt cancer hospitals, as 
established under section 1886(d)(1)(B)(v) of the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(d)(1)(B)(v)). 
(2) To the extent a PPS-exempt cancer hospital 
was previously affiliated with another hospital, the 
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margins of the PPS-exempt hospital and the other 
hospital as separate entities and the margins of such 
hospitals that existed when the hospitals were pre-
viously affiliated. 
(3) Payment adequacy for cancer discharges 
under the Medicare inpatient hospital prospective 
payment system. 
SEC. 506. SKILLED NURSING FACILITY PAYMENT UPDATE. 
(a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is 
amended— 
(1) in subclause (III), by striking ‘‘and’’; 
(2) by redesignating subsection (IV) as sub-
clause (VI); and 
(3) by inserting after subclause (III) the fol-
lowing new subclauses: 
‘‘(IV) for each of fiscal years 
2004, 2005, 2006, and 2007, the rate 
computed for the previous fiscal year 
increased by the skilled nursing facil-
ity market basket percentage change 
for the fiscal year involved; 
‘‘(V) for fiscal year 2008, the 
rate computed for the previous fiscal 
year; and’’. 
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(b) 
DELAYED
EFFECTIVE
DATE.—Section 
1888(e)(4)(E)(ii)(V) of the Social Security Act, as in-
serted by subsection (a)(3), shall not apply to payment 
for days before January 1, 2008. 
SEC. 507. REVOCATION OF UNIQUE DEEMING AUTHORITY 
OF THE JOINT COMMISSION FOR THE AC-
CREDITATION OF HEALTHCARE ORGANIZA-
TIONS. 
(a) REVOCATION.—Section 1865 of the Social Secu-
rity Act (42 U.S.C. 1395bb) is amended— 
(1) by striking subsection (a); and 
(2) by redesignating subsections (b), (c), (d), 
and (e) as subsections (a), (b), (c), and (d), respec-
tively. 
(b) CONFORMING AMENDMENTS.—(1) Such section 
is further amended— 
(A) in subsection (a)(1), as so redesig-
nated, by striking ‘‘In addition, if’’ and insert-
ing ‘‘If’’; 
(B) in subsection (b), as so redesignated— 
(i) by striking ‘‘released to him by the 
Joint Commission on Accreditation of Hos-
pitals,’’ and inserting ‘‘released to the Sec-
retary by’’; and 
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309 
(ii) by striking the comma after ‘‘As-
sociation’’; 
(C) in subsection (c), as so redesignated, 
by striking ‘‘pursuant to subsection (a) or 
(b)(1)’’ and inserting ‘‘pursuant to subsection 
(a)(1)’’; and 
(D) in subsection (d), as so redesignated, 
by striking ‘‘pursuant to subsection (a) or 
(b)(1)’’ and inserting ‘‘pursuant to subsection 
(a)(1)’’. 
(2) Section 1861(e) of such Act (42 U.S.C. 
1395x(e)) is amended in the fourth sentence by 
striking ‘‘and (ii) is accredited by the Joint Commis-
sion on Accreditation of Hospitals, or is accredited 
by or approved by a program of the country in which 
such institution is located if the Secretary finds the 
accreditation or comparable approval standards of 
such program to be essentially equivalent to those of 
the Joint Commission on Accreditation of Hospitals’’ 
and inserting ‘‘and (ii) is accredited by a national 
accreditation body recognized by the Secretary under 
section 1865(a), or is accredited by or approved by 
a program of the country in which such institution 
is located if the Secretary finds the accreditation or 
comparable approval standards of such program to 
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310 
be essentially equivalent to those of such a national 
accreditation body.’’. 
(3) Section 1864(c) of such Act (42 U.S.C. 
1395aa(c)) is amended by striking ‘‘pursuant to sub-
section (a) or (b)(1) of section 1865’’ and inserting 
‘‘pursuant to section 1865(a)(1)’’. 
(4) Section 1875(b) of such Act (42 U.S.C. 
1395ll(b)) is amended by striking ‘‘the Joint Com-
mission on Accreditation of Hospitals,’’ and insert-
ing ‘‘national accreditation bodies under section 
1865(a)’’. 
(5) Section 1834(a)(20)(B) of such Act (42 
U.S.C. 1395m(a)(20)(B)) is amended by striking 
‘‘section 1865(b)’’ and inserting ‘‘section 1865(a)’’. 
(6) Section 1852(e)(4)(C) of such Act (42 
U.S.C. 1395w-22(e)(4)(C)) is amended by striking 
‘‘section 
1865(b)(2)’’ 
and 
inserting 
‘‘section 
1865(a)(2)’’. 
(c) AUTHORITY TO RECOGNIZE JCAHO AS A NA-
TIONAL ACCREDITATION BODY.—The Secretary of Health 
and Human Services may recognize the Joint Commission 
on Accreditation of Healthcare Organizations as a na-
tional accreditation body under section 1865 of the Social 
Security Act (42 U.S.C. 1395bb), as amended by this sec-
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311 
tion, upon such terms and conditions, and upon submis-
sion of such information, as the Secretary may require. 
(d) EFFECTIVE DATE; TRANSITION RULE.—(1) Sub-
ject to paragraph (2), the amendments made by this sec-
tion shall apply with respect to accreditations of hospitals 
granted on or after the date that is 18 months after the 
date of the enactment of this Act. 
(2) For purposes of title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.), the amendments made by 
this section shall not effect the accreditation of a hospital 
by the Joint Commission on Accreditation of Healthcare 
Organizations, or under accreditation or comparable ap-
proval standards found to be essentially equivalent to ac-
creditation or approval standards of the Joint Commission 
on Accreditation of Healthcare Organizations, for the pe-
riod of time applicable under such accreditation. 
TITLE VI—OTHER PROVISIONS 
RELATING 
TO 
MEDICARE 
PART B 
Subtitle A—Payment and Coverage 
Improvements 
SEC. 601. PAYMENT FOR THERAPY SERVICES. 
(a) EXTENSION
OF
EXCEPTIONS
PROCESS
FOR 
MEDICARE THERAPY CAPS.—Section 1833(g)(5) of the 
Social Security Act (42 U.S.C. 1395l(g)(5)), as amended 
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by section 201 of the Medicare Improvements and Exten-
sion Act of 2006 (division B of Public Law 109–432), is 
amended by striking ‘‘2007’’ and inserting ‘‘2009’’. 
(b) STUDY AND REPORT.— 
(1) STUDY.—The Secretary of Health and 
Human Services, in consultation with appropriate 
stakeholders, shall conduct a study on refined and 
alternative payment systems to the Medicare pay-
ment cap under section 1833(g) of the Social Secu-
rity Act (42 U.S.C. 1395l(g)) for physical therapy 
services and speech-language pathology services, de-
scribed in paragraph (1) of such section and occupa-
tional therapy services described in paragraph (3) of 
such section. Such study shall consider, with respect 
to payment amounts under Medicare, the following: 
(A) The creation of multiple payment caps 
for such services to better reflect costs associ-
ated with specific health conditions. 
(B) The development of a prospective pay-
ment system, including an episode-based system 
of payments, for such services. 
(C) The data needed for the development 
of a system of multiple payment caps (or an al-
ternative payment methodology) for such serv-
ices and the availability of such data. 
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313 
(2) REPORT.—Not later than January 1, 2009, 
the Secretary shall submit to Congress a report on 
the study conducted under paragraph (1). 
SEC. 602. MEDICARE SEPARATE DEFINITION OF OUT-
PATIENT 
SPEECH-LANGUAGE 
PATHOLOGY 
SERVICES. 
(a) IN GENERAL.—Section 1861(ll) of the Social Se-
curity Act (42 U.S.C. 1395x(ll)) is amended— 
(1) by redesignating paragraphs (2) and (3) as 
paragraphs (3) and (4), respectively; and 
(2) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) The term ‘outpatient speech-language pa-
thology services’ has the meaning given the term 
‘outpatient physical therapy services’ in subsection 
(p), except that in applying such subsection— 
‘‘(A) ‘speech-language pathology’ shall be 
substituted for ‘physical therapy’ each place it 
appears; and 
‘‘(B) ‘speech-language pathologist’ shall be 
substituted for ‘physical therapist’ each place it 
appears.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1832(a)(2)(C) of the Social Security 
Act (42 U.S.C. 1395k(a)(2)(C)) is amended— 
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(A) by striking ‘‘and outpatient’’ and in-
serting ‘‘, outpatient’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, and outpatient speech-lan-
guage pathology services (other than services to 
which the second sentence of section 1861(p) 
applies through the application of section 
1861(ll)(2))’’. 
(2) Subparagraphs (A) and (B) of section 
1833(a)(8) of such Act (42 U.S.C. 1395l(a)(8)) are 
each amended by striking ‘‘(which includes out-
patient speech-language pathology services)’’ and in-
serting ‘‘, outpatient speech-language pathology 
services,’’. 
(3) Section 1833(g)(1) of such Act (42 U.S.C. 
1395l(g)(1)) is amended— 
(A) by inserting ‘‘and speech-language pa-
thology services of the type described in such 
section through the application of section 
1861(ll)(2)’’ after ‘‘1861(p)’’; and 
(B) by inserting ‘‘and speech-language pa-
thology services’’ after ‘‘and physical therapy 
services’’. 
(4) The second sentence of section 1835(a) of 
such Act (42 U.S.C. 1395n(a)) is amended— 
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(A) by striking ‘‘section 1861(g)’’ and in-
serting ‘‘subsection (g) or (ll)(2) of section 
1861’’ each place it appears; and 
(B) by inserting ‘‘or outpatient speech-lan-
guage pathology services, respectively’’ after 
‘‘occupational therapy services’’. 
(5) Section 1861(p) of such Act (42 U.S.C. 
1395x(p)) is amended by striking the fourth sen-
tence. 
(6) Section 1861(s)(2)(D) of such Act (42 
U.S.C. 1395x(s)(2)(D)) is amended by inserting ‘‘, 
outpatient speech-language pathology services,’’ after 
‘‘physical therapy services’’. 
(7) Section 1862(a)(20) of such Act (42 U.S.C. 
1395y(a)(20)) is amended— 
(A) by striking ‘‘outpatient occupational 
therapy services or outpatient physical therapy 
services’’ and inserting ‘‘outpatient physical 
therapy services, outpatient speech-language pa-
thology services, or outpatient occupational 
therapy services’’; and 
(B) by striking ‘‘section 1861(g)’’ and in-
serting ‘‘subsection (g) or (ll)(2) of section 
1861’’. 
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316 
(8) Section 1866(e)(1) of such Act (42 U.S.C. 
1395cc(e)(1)) is amended— 
(A) by striking ‘‘section 1861(g)’’ and in-
serting ‘‘subsection (g) or (ll)(2) of section 
1861’’ the first two places it appears; 
(B) by striking ‘‘defined) or’’ and inserting 
‘‘defined),’’; and 
(C) by inserting before the semicolon at 
the end the following: ‘‘, or (through the oper-
ation of section 1861(ll)(2)) with respect to the 
furnishing of outpatient speech-language pa-
thology’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2008. 
(d) CONSTRUCTION.—Nothing in this section shall be 
construed to affect existing regulations and policies of the 
Centers for Medicare & Medicaid Services that require 
physician oversight of care as a condition of payment for 
speech-language pathology services under part B of the 
medicare program. 
SEC. 603. INCREASED REIMBURSEMENT RATE FOR CER-
TIFIED NURSE-MIDWIVES. 
(a) IN GENERAL.—Section 1833(a)(1)(K) of the So-
cial Security Act (42 U.S.C.1395l(a)(1)(K)) is amended 
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317 
by striking ‘‘(but in no event’’ and all that follows through 
‘‘performed by a physician)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to services furnished on or after 
April 1, 2008. 
SEC. 604. ADJUSTMENT IN OUTPATIENT HOSPITAL FEE 
SCHEDULE INCREASE FACTOR. 
The first sentence of section 1833(t)(3)(C)(iv) of the 
Social Security Act (42 U.S.C. 1395l(t)(3)(C)(iv)) is 
amended by inserting before the period at the end the fol-
lowing: ‘‘and reduced by 0.25 percentage point for such 
factor for such services furnished in 2008’’. 
SEC. 605. EXCEPTION TO 60-DAY LIMIT ON MEDICARE SUB-
STITUTE BILLING ARRANGEMENTS IN CASE 
OF PHYSICIANS ORDERED TO ACTIVE DUTY 
IN THE ARMED FORCES. 
(a) IN GENERAL.—Section 1842(b)(6)(D)(iii) of the 
Social Security Act (42 U.S.C. 1395u(b)(6)(D)(iii)) is 
amended by inserting after ‘‘of more than 60 days’’ the 
following: ‘‘or are provided over a longer continuous period 
during all of which the first physician has been called or 
ordered to active duty as a member of a reserve component 
of the Armed Forces’’. 
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318 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to services furnished on or after 
the date of the enactment of this section. 
SEC. 606. EXCLUDING CLINICAL SOCIAL WORKER SERVICES 
FROM COVERAGE UNDER THE MEDICARE 
SKILLED NURSING FACILITY PROSPECTIVE 
PAYMENT SYSTEM AND CONSOLIDATED PAY-
MENT. 
(a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the 
Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 
amended by inserting ‘‘clinical social worker services,’’ 
after ‘‘qualified psychologist services,’’.. 
(b) 
CONFORMING
AMENDMENT.—Section 
1861(hh)(2) of the Social Security Act (42 U.S.C. 
1395x(hh)(2)) is amended by striking ‘‘and other than 
services furnished to an inpatient of a skilled nursing facil-
ity which the facility is required to provide as a require-
ment for participation’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to items and services furnished on 
or after January 1, 2008. 
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319 
SEC. 607. COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES AND MENTAL HEALTH COUN-
SELOR SERVICES. 
(a) COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES.— 
(1) 
COVERAGE
OF
SERVICES.—Section 
1861(s)(2) of the Social Security Act (42 U.S.C. 
1395x(s)(2)) is amended— 
(A) in subparagraph (Z), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (AA), by adding 
‘‘and’’ at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(BB) marriage and family therapist services 
(as defined in subsection (ccc));’’. 
(2) DEFINITION.—Section 1861 of the Social 
Security Act (42 U.S.C. 1395x) is amended by add-
ing at the end the following new subsection: 
‘‘(ccc) MARRIAGE AND FAMILY THERAPIST SERV-
ICES.—(1) The term ‘marriage and family therapist serv-
ices’ means services performed by a marriage and family 
therapist (as defined in paragraph (2)) for the diagnosis 
and treatment of mental illnesses, which the marriage and 
family therapist is legally authorized to perform under 
State law (or the State regulatory mechanism provided by 
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