1009
‘‘(12) comprehensive outpatient rehabilitation
facility services;
‘‘(13) contact lenses and eyeglasses; and
‘‘(14) hearing aids.’’.
SEC. 13523. EXCEPTIONS FOR BOTH OWNERSHIP AND COM-
PENSATION ARRANGEMENTS.
(a) M ODIFICATION TO EXCEPTION FOR IN-OFFICE
ANCILLARY SERVICES.—Section 1877(b)(2) (42 U.S.C.
1395nn(b)(2)) is amended—
(1) by inserting ‘‘(other than durable medical
equipment, parenteral and enteral nutrition equip-
ment and supplies, and ambulance services)’’ after
‘‘services’’ the first place it appears, and
(2) in subparagraph (A)(ii)(II), by striking
‘‘centralized provision’’ and inserting ‘‘provision of
some or all’’.
(b) MODIFICATION OF RURAL PROVIDER EXCEP-
TION.—
(1) I N GENERAL.—Section 1877(b) (42 U.S.C.
1395nn(b)) is amended—
(A) by redesignating paragraph (5) as
paragraph (6), and
(B) by inserting after paragraph (4) the
following new paragraph:
1010
‘‘(5) RURAL PROVIDERS.—In the case of des-
ignated health 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 (as
defined by the Secretary) furnished by the en-
tity are furnished to 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).
SEC. 13524. EXCEPTIONS RELATED ONLY TO OWNERSHIP
OR INVESTMENT.
(a) 
PUBLICLY-TRADED
SECURITIES.—Section
1877(c)(2) (42 U.S.C. 1395nn(c)(2)) is amended by strik-
ing ‘‘total assets’’ and inserting ‘‘stockholder equity’’.
(b) R URAL PROVIDERS.—For amendment to excep-
tion relation to rural providers, see section 13523(b).
SEC. 13525. EXCEPTIONS RELATED ONLY TO COMPENSA-
TION ARRANGEMENTS.
(a) R ENTAL OF OFFICE SPACE AND EQUIPMENT.—
1011
(1) IN
GENERAL.—Paragraph (1) of section
1877(e) (42 U.S.C. 1395nn(e)) is amended to read
as follows:
‘‘(1) RENTAL OF OFFICE SPACE; RENTAL OF
EQUIPMENT.—
‘‘(A) O FFICE 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 does not exceed that which is rea-
sonable 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 aggregate rental charges
over the term of the lease are set in ad-
vance, are consistent with fair market
value, and are not determined in a manner
that takes into account the volume or value
of any referrals or other business gen-
erated between the parties,
1012
‘‘(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
‘‘(vi) the lease covers all of the prem-
ises leased between the parties for the
period 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
does not exceed that which 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,
1013
‘‘(iv) the aggregate rental charges
over the term of the lease are set in ad-
vance, are consistent with fair market
value, and are not determined in a manner
that takes into account the volume or value
of any referrals or other business gen-
erated 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
period 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) 
CONFORMING
AMENDMENT.—Section
1877(h) (42 U.S.C. 1395nn(h)) is amended by strik-
ing paragraphs (5) and (6).
(b) BONA FIDE EMPLOYMENT RELATIONSHIPS.—
Section 1877(e) (42 U.S.C. 1395nn(e)) is amended—
(1) in paragraph (2)—
1014
(A) by striking ‘‘EMPLOYMENT’’ and all
that follows through ‘‘if’’ and inserting ‘‘BONA
FIDE
EMPLOYMENT
RELATIONSHIPS.—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 ’’;
(B) in subparagraphs (A), (B), and (D),
by striking ‘‘arrangement’’ and inserting ‘‘em-
ployment’’;
(C) in subparagraph (C), by striking ‘‘to
the hospital’’; and
(D) 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 family member, if the amount of
the remuneration is not determined in a manner
that takes into account directly the volume or value
of any referrals by the referring physician.’’; and
(2) in paragraph (5)(A), by striking ‘‘in the
same manner as they apply to a hospital’’.
(c) PERSONAL SERVICE ARRANGEMENTS.—
1015
(1) IN
GENERAL.—Paragraph (3) of section
1877(e) (42 U.S.C. 1395nn(e)) is amended to read
as follows:
‘‘(3) 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 by the physician (or
family member) to the entity,
‘‘(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 di-
rectly or indirectly the volume or value of any
referrals or other business generated between
the parties,
1016
‘‘(F) the services to be performed under
the arrangement do not involve the counseling
or promotion of a business arrangement or
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.’’.
(2) HEALTH
SERVICES
FURNISHED
UNDER
CERTAIN
HOSPITAL
ARRANGEMENTS.—Section
1877(e) (42 U.S.C. 1395nn(e)) is amended by add-
ing at the end the following new paragraph:
‘‘(7) CERTAIN
GROUP
PRACTICE
ARRANGE-
MENTS WITH A HOSPITAL.—
‘‘(A) IN GENERAL.—An arrangement be-
tween a hospital and a group for the provision
of designated health services by the group but
billed in the name of the hospital if—
‘‘(i) the group would be a group prac-
tice, but for the fact that it bills for such
services in the name of the hospital;
‘‘(ii) with respect to services provided to an
inpatient of the hospital, the arrangement is
1017
pursuant to the provision of inpatient hospital
services under section 1861(b)(3);
‘‘(iii) the arrangement began before De-
cember 19, 1989, and has continued in effect
without interruption since such date;
‘‘(iv) the group provides substantially all of
the designated health services furnished under
the arrangement to the hospital’s patients;
‘‘(v) 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;
‘‘(vi) 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
value of any referrals or other business gen-
erated between the parties;
‘‘(vii) 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
1018
‘‘(viii) 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.’’.
(d) P HYSICIAN RECRUITMENT.—Section 1877(e)(4)
(42 U.S.C. 1395nn(e)(4)) is amended—
(1) by redesignating subparagraphs (A) through
(C) as subparagraph (B) through (D), and
(2) by inserting before subparagraph (B), as so
redesignated, the following new subparagraph:
‘‘(A) the remuneration arrangement is set
out in writing, signed by the parties, and speci-
fies the benefits provided by the hospital, the
terms under which the benefits are to be pro-
vided, and the obligations of the parties,’’.
(e) I SOLATED TRANSACTIONS.—Section 1877(e)(5)
(42 U.S.C. 1395nn(e)(5)) is amended—
(1) by striking ‘‘ISOLATED’’ and inserting
‘‘ONE-TIME’’,
(2) by striking ‘‘isolated’’ and inserting ‘‘one-
time’’, and
(3) by inserting ‘‘or practice’’ after ‘‘one-time
sale of property’’.
(f) NEW EXCEPTION FOR PAYMENTS BY PHYSI-
CIAN.—Section 1877(e) (42 U.S.C. 1395nn(e)), as amend-
1019
ed by subsection (c)(2), is further amended by adding at
the end the following new paragraph:
‘‘(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.’’.
SEC. 13526. CLARIFICATION CONCERNING CIVIL MONEY
PENALTY SANCTIONS.
Section 1877(g)(3) (42 U.S.C. 1395nn(g)(3)) is
amended by inserting ‘‘(including a referring physician)’’
after ‘‘Any person’’.
SEC. 13527. REQUIREMENTS FOR GROUP PRACTICE.
(a) 
ADDITIONAL
REQUIREMENTS.—Section
1877(h)(4) (42 U.S.C. 1395nn(h)(4)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C);
(2) by redesignating subparagraphs (A), (B),
(C), and (D) as clauses (i), (ii), (iii), and (vii),
respectively;
(3) by inserting ‘‘(A)’’ after ‘‘.—’’;
1020
(4) by inserting after clause (iii), as so redesig-
nated, the following:
‘‘(iv) subject to subparagraph (B), no phy-
sician who is a member of the group receives
compensation based on the volume or value of
referrals by the physician;
‘‘(v) there are no less than, on average, 5
physicians for each office location (as defined in
subparagraph (C)), except where there is only a
single office location for the entire group prac-
tice;
‘‘(vi) members of the group personally con-
duct no less than 75 percent of the physician-
patient encounters of the group practice; and’’;
and
(5) by adding at the end the following new sub-
paragraphs:
‘‘(B) A physician in a group practice may be
paid a share of overall profits of the group or a pro-
ductivity bonus (based on services personally per-
formed or personally supervised by the physician or
by another physician in the group) so long as the
share or bonus is not determined in any manner
which is directly related to the volume or value of
referrals by that physician.
1021
‘‘(C)(i) Except as provided in clauses (ii)
through (iv), the term ‘office location’ means an of-
fice where physician services are offered to patients.
‘‘(ii) Such term does not include a location con-
sisting solely of a diagnostic facility, nursing facility,
or treatment facility (such as a physical or occupa-
tional therapy center), or administrative services af-
filiated with the group practice.
‘‘(iii) Any office location which is located imme-
diately adjacent to another office location shall be
treated as the same office location.
‘‘(iv) The term ‘office location’ does not include
an office located in a rural area (as defined in sec-
tion 1886(d)(2)(D)) if at least 85 percent of the
physician services at the location are provided to in-
dividuals who reside in such a rural area.’’.
(b) USE OF BILLING NUMBERS, ETC.—Section 1877
(42 U.S.C. 1395nn) is amended—
(1) in subsection (b)(2)(B), by inserting ‘‘under
a billing number assigned to the group practice’’
after ‘‘member’’,
(2) in subsection (h)(4)(A)(ii), as redesignated
by subsection (a)(2), by inserting ‘‘and under a bill-
ing number assigned to the group’’ after ‘‘in the
name of the group’’, and
1022
(3) in subsection (h)(4)(A)(iii), as redesignated
by subsection (a)(2), by striking ‘‘by members of the
group’’.
(c) T REATMENT OF CERTAIN FACULTY PRACTICE
PLANS.—The last sentence of section 1877(h)(4)(A) (42
U.S.C. 1395nn(h)(4)(A)), as redesignated by subsection
(a)(2), is amended by inserting ‘‘, institution of higher
education, or medical school’’ after ‘‘hospital’’.
SEC. 13528. NO FEDERAL PREEMPTION OF MORE RESTRIC-
TIVE STATE LAWS.
Section 1877 (42 U.S.C. 1395nn), as amended by
section 13522(2), is amended by adding at the end the
following new subsection:
‘‘(j) NO FEDERAL PREEMPTION OF MORE RESTRIC-
TIVE STATE LAWS.—Nothing in this section shall preempt
provisions of State law—
‘‘(1) that relate to referrals not covered by this
section, or
‘‘(2) that relate to referrals covered by this sec-
tion and are more restrictive with respect to such re-
ferrals than the provisions of this section.’’.
SEC. 13529. MISCELLANEOUS PROVISIONS.
(a) INDIRECT FINANCIAL RELATIONSHIPS.—The last
sentence of section 1877(a)(2) (42 U.S.C. 1395nn(a)(2))
is amended by inserting before the period the following:
1023
‘‘and includes an interest in an entity that holds an owner-
ship or investment in another entity’’.
(b) MINOR
REMUNERATION.—Section 1877(h)(1)
(42 U.S.C. 1395nn(h)(1)) is amended—
(1) in subparagraph (A), by inserting before the
period at the end the following: ‘‘(other than an ar-
rangement involving only remuneration described in
subparagraph (C))’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) 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-
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.’’.
1024
(c) R EFERRING PHYSICIAN.—Section 1877(h)(7)(C)
(42 U.S.C. 1395nn(h)(7)(C)) is amended—
(1) by inserting ‘‘a request by a radiologist for
diagnostic radiology services, and a request by a ra-
diation oncologist for radiation therapy,’’ after ‘‘ex-
amination services,’’, and
(2) by inserting ‘‘, radiologist, or radiation
oncologist’’ after ‘‘pathologist’’ the second place it
appears.
(d) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—Section 1877 (42 U.S.C. 1395nn) is further
amended—
(1) in the next to last sentence of subsection
(f)—
(A) by striking ‘‘provided’’ and inserting
‘‘furnished’’, and
(B) by striking ‘‘provides’’ and inserting
‘‘furnish’’;
(2) in the last 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
1025
(C) by striking ‘‘diagnostic imaging serv-
ices of any type’’ and inserting ‘‘magnetic reso-
nance imaging, computerized axial tomography
scans, and ultrasound services’’; and
(3) in subsection (a)(2)(B), by striking ‘‘sub-
section (h)(1)(A)’’ and inserting ‘‘subsection (h)(1)’’.
SEC. 13530. EFFECTIVE DATES.
(a) E XPANSION OF PAYERS AND SERVICES.—The
amendments made by sections 13521 and 13522 shall
apply with respect to a referral by a physician made on
or after December 31, 1994.
(b) OTHER PROVISIONS.—
(1) I N GENERAL.—Except as provided in this
subsection, the amendments made by sections 13523
through 13529 shall apply to referrals made on or
after January 1, 1992.
(2) D ELAY IN EFFECTIVENESS FOR MORE RE-
STRICTIVE PROVISIONS.—The amendments made by
the following sections shall apply with respect to a
referral by a physician made on or after December
31, 1994:
(A) Section 13523(b) (relating to the rural
provider exception).
(B) Section 13524(a) (relating to publicly-
traded securities).
1026
(C)(i) Section 13525(a) (relating to an ex-
ception for office rental and equipment), other
than the exception relating to equipment.
(ii) Section 13525(c)(1) (relating to excep-
tion for personal services arrangements).
(iii) Section 13525(d) (relating to physi-
cian recruitment).
(D) Section 13526 (relating to civil money
penalty).
(E) Section 13527 (relating to require-
ments for group practices), other than sub-
section (c) (relating to faculty plans).
(F) Section 13528 (relating to non-pre-
emption).
(G) Section 13529(a) (relating to indirect
financial relationships).
Subchapter D—Other Provisions
SEC. 13551. DIRECT GRADUATE MEDICAL EDUCATION.
(a) A DJUSTMENT IN GME B ASE-YEAR COSTS OF
FEDERAL INSURANCE CONTRIBUTIONS ACT.—
(1) I N GENERAL.—In determining the amount
of payment to be made under section 1886(h) of the
Social Security Act in the case of a hospital de-
scribed in paragraph (2) for cost reporting periods
beginning on or after October 1, 1992, the Secretary
1027
of Health and Human Services shall redetermine the
approved FTE resident amount to reflect the
amount that would have been paid the hospital if,
during the hospital’s base cost reporting period, the
hospital had been liable for FICA taxes or for con-
tributions to the retirement system of a State, a po-
litical subdivision of a State, or an instrumentality
of such a State or political subdivision with respect
to interns and residents in its medical residency
training program.
(2) HOSPITALS
AFFECTED.—A hospital de-
scribed in this paragraph is a hospital that did not
pay FICA taxes with respect to interns and resi-
dents in its medical residency training program dur-
ing the hospital’s base cost reporting period, but is
required to pay FICA taxes or make contributions to
a retirement system described in paragraph (1) with
respect to such interns and residents because of the
amendments made by section 11332(b) of OBRA–
1990.
(3) DEFINITIONS.—In this subsection:
(A) The ‘‘base cost reporting period’’ for a
hospital is the hospital’s cost reporting period
that began during fiscal year 1984.
1028
(B) The term ‘‘FICA taxes’’ means, with
respect to a hospital, the taxes under section
3111 of the Internal Revenue Code of 1986.
(b) PUBLICLY-FUNDED FAMILY PRACTICE RESI-
DENCY PROGRAMS.—
(1) IN
GENERAL.—Section 1886(h)(5) (42
U.S.C. 1395ww(h)(5)) is amended by adding at the
end the following new subparagraph:
‘‘(I) A DJUSTMENTS FOR CERTAIN FAMILY
PRACTICE RESIDENCY PROGRAMS.—
‘‘(i) I N GENERAL.—In the case of an
approved medical residency training pro-
gram (meeting the requirements of clause
(ii)) of a hospital which received payments
from the United States, a State, or a polit-
ical subdivision of a State or an instrumen-
tality of such a State or political subdivi-
sion (other than payments under this title
or a State plan under title XIX) for the
program during the cost reporting period
that began during fiscal year 1984, the
Secretary shall—
‘‘(I) provide for an average
amount under paragraph (2)(A) that
takes into account the Secretary’s es-
1029
timate of the amount that would have
been recognized as reasonable under
this title if the hospital had not re-
ceived such payments, and
‘‘(II) reduce the payment amount
otherwise provided under this sub-
section in an amount equal to the pro-
portion of such program payments
during the cost reporting period in-
volved that is allocable to this title.
‘‘(ii) ADDITIONAL REQUIREMENTS.—
A hospital’s approved medical residency
program meets the requirements of this
clause if—
‘‘(I) the program is limited to
training for family and community
medicine;
‘‘(II) the program is the only ap-
proved medical residency program of
the hospital; and
‘‘(III) the average amount deter-
mined under paragraph (2)(A) for the
hospital (as determined without re-
gard to the increase in such amount
1030
described in clause (i)(I)) does not ex-
ceed $10,000.’’.
(2) E FFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to payments under sec-
tion 1886(h) of the Social Security Act for cost re-
porting periods beginning on or after October 1,
1990.
(c) PREVENTIVE CARE RESIDENCIES.—
(1) E LIGIBILITY OF PREVENTIVE CARE RESI-
DENCY
PROGRAMS
FOR
EXPANDED
INITIAL
RESI-
DENCY
PERIODS.—Section 1886(h)(5)(F)(ii) (42
U.S.C. 1395ww(h)(5)(F)(ii)) is amended by insert-
ing after ‘‘fellowship program’’ the following: ‘‘or a
preventive care residency or fellowship program’’.
(2) E FFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to cost reporting
periods beginning on or after October 1, 1993.
SEC. 13552. IMMUNOSUPPRESSIVE DRUG THERAPY.
Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) is
amended by striking ‘‘title, within’’ and all that follows
and inserting the following: ‘‘title, but only in the case of
drugs furnished—
‘‘(i) before 1994, within 12 months after
the date of the transplant procedure,
1031
‘‘(ii) during 1994, within 18 months after
the date of the transplant procedure,
‘‘(iii) during 1995, within 24 months after
the date of the transplant procedure,
‘‘(iv) during 1996, within 30 months after
the date of the transplant procedure, and
‘‘(v) during any year after 1997, within 36
months after the date of the transplant proce-
dure;’’.
SEC. 
13553. 
REDUCTION 
IN 
PAYMENTS 
FOR
ERYTHROPOIENTIN.
(a) IN GENERAL.—Section 1881(b)(11)(B)(ii)(I) (42
U.S.C. 1395rr(b)(11)(B)(ii)(I)) is amended—
(1) by striking ‘‘1991’’ and inserting ‘‘1994’’;
and
(2) by striking ‘‘$11’’ and inserting ‘‘$10’’.
(b) E FFECTIVE DATE.—The amendments made by
subsection (a) shall apply to erythropoietin furnished on
or after January 1, 1994.
SEC. 13554. QUALIFIED MEDICARE BENEFICIARY OUT-
REACH.
The Secretary of Health and Human Services shall
establish and implement a method for obtaining informa-
tion from newly eligible medicare beneficiaries that may
be used to determine whether such beneficiaries may be
1032
eligible for medical assistance for medicare cost-sharing
under State medicaid plans as qualified medicare bene-
ficiaries, and for transmitting such information to the
State in which such a beneficiary resides.
SEC. 13555. EXTENSION OF SOCIAL HEALTH MAINTENANCE
ORGANIZATION DEMONSTRATIONS.
(a) EXTENSION
OF CURRENT WAIVERS.—Section
4018(b) of OBRA–1987, as amended by section
4207(b)(4)(B) of OBRA–1990, is amended—
(1) in paragraph (1) by striking ‘‘December 31,
1995’’ and inserting ‘‘December 31, 1997’’; and
(2) in paragraph (4) by striking ‘‘March 31,
1996’’ and inserting ‘‘March 31, 1998’’.
(b) EXPANSION
OF
DEMONSTRATIONS.—Section
2355 of the Deficit Reduction Act of 1984 is amended—
(1) in the last sentence of subsection (a) by
striking ‘‘12 months’’ and inserting ‘‘36 months’’;
and
(2) in subsection (b)(1)(B)—
(A) by striking ‘‘or’’ at the end of clause
(iii); and
(B) by redesignating clause (iv) as clause
(v) and inserting after clause (iii) the following
new clause:
1033
‘‘(iv) integrating acute and chronic
care management for patients with end-
stage renal disease through expanded com-
munity care case management services
(and for purposes of a demonstration
project conducted under this clause, any
requirement under a waiver granted under
this section that a project disenroll individ-
uals who develop end-stage renal disease
shall not apply); or’’.
(c) EXPANSION
OF NUMBER
OF MEMBERS PER
SITE.—The Secretary of Health and Human Services may
not impose a limit of less than 12,000 on the number of
individuals that may participate in a project conducted
under section 2355 of the Deficit Reduction Act of 1984.
(d) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—
(1) The section following section 4206 of
OBRA–1990 is amended by striking ‘‘SEC. 4027.’’
and inserting ‘‘SEC. 4207.’’, and in this subtitle is
referred to as section 4207 of OBRA–1990.
(2) Section 2355(b)(1)(B) of the Deficit Reduc-
tion 
Act 
of 
1984, 
as 
amended 
by 
section
4207(b)(4)(B)(ii) of OBRA–1990, is amended—
1034
(A) by striking ‘‘12907(c)(4)(A)’’ and in-
serting ‘‘4207(b)(4)(B)(i)’’, and
(B) by striking ‘‘feasibilitly’’ and inserting
‘‘feasibility’’.
(3) Section 4207(b)(4)(B)(iii)(III) of OBRA–
1990 is amended by striking the period at the end
and inserting a semicolon.
(4) Subsections (c)(3) and (e) of section 2355
of the Deficit Reduction Act of 1984, as amended by
section 4207(b)(4)(B) of OBRA–1990, are each
amended by striking ‘‘12907(c)(4)(A)’’ each place it
appears and inserting ‘‘4207(b)(4)(B)’’.
(5) Section 4207(c)(2) of OBRA–1990 is
amended by striking ‘‘the Committee on Ways and
Means’’ each place it appears and inserting ‘‘the
Committees on Ways and Means and Energy and
Commerce’’.
(6) Section 4207(d) of OBRA–1990 is amended
by redesignating the second paragraph (3) (relating
to effective date) as paragraph (4).
(7) Section 4207(i)(2) of OBRA–1990 is
amended—
(A) by striking the period at the end of
clause (iii) and inserting a semicolon, and
1035
(B) in clause (v), by striking ‘‘residents’’
and inserting ‘‘patients’’.
(8) Section 4207(j) of OBRA–1990 is amended
by striking ‘‘title’’ each place it appears and insert-
ing ‘‘subtitle’’.
(e) E FFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of OBRA–90.
SEC. 13556. HOSPICE NOTIFICATION TO HOME HEALTH
BENEFICIARIES.
(a) I N GENERAL.—Section 1891(a)(1) (42 U.S.C.
1395bbb(a)(1)) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(H) The right, in the case of a resident
who is entitled to benefits under this title, to be
fully informed orally and in writing (at the time
of coming under the care of the agency) of the
entitlement of individuals to hospice care under
section 1812(a)(4) (unless there is no hospice
program providing hospice care for which pay-
ment may be made under this title within the
geographic area of the facility and it is not the
common practice of the agency to refer patients
to hospice programs located outside such geo-
graphic area).’’.
1036
(b) E FFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
the first day of the first month beginning more than one
year after the date of the enactment of this Act.
SEC. 13557. INTEREST PAYMENTS.
(a) IN GENERAL.—Sections 1816(c)(2)(B)(ii)(IV)
and 1842(c)(2)(B)(ii)(IV) of the Social Security Act shall
be applied with respect to claims received in the 12-month
period beginning October 1, 1992, by substituting ‘‘30 cal-
endar days’’ for ‘‘24 calendar days’’ and ‘‘17 calendar
days’’.
(b) EFFECTIVE DATE.—Subsection (a) shall be in ef-
fect during the period that begins on the date of the enact-
ment of this Act and ends on September 30, 1993.
SEC. 13558. PEER REVIEW ORGANIZATIONS.
(a) R EPEAL OF PRO P RECERTIFICATION REQUIRE-
MENT FOR CERTAIN SURGICAL PROCEDURES.—
(1) IN
GENERAL.—Section 1164 (42 U.S.C.
1320c–13) is repealed.
(2) CONFORMING AMENDMENTS.—
(A) Section 1154 (42 U.S.C. 1320c–3) is
amended—
(i) in subsection (a), by striking para-
graph (12), and
1037
(ii) in subsection (d), by striking
‘‘(and except as provided in section
1164)’’.
(B) Section 1833 (42 U.S.C. 1395l) is
amended—
(i) in subsection (a)(1)(D)(i), by strik-
ing ‘‘, or for tests furnished in connection
with obtaining a second opinion required
under section 1164(c)(2) (or a third opin-
ion, if the second opinion was in disagree-
ment with the first opinion)’’;
(ii) in subsection (a)(1), by striking
clause (G);
(iii) in subsection (a)(2)(A), by strik-
ing ‘‘, to items and services (other than
clinical diagnostic laboratory tests) fur-
nished in connection with obtaining a sec-
ond 
opinion 
required 
under 
section
1164(c)(2) (or a third opinion, if the sec-
ond opinion was in disagreement with the
first opinion),’’;
(iv) in subsection (a)(2)(D)(i)—
(I) by striking ‘‘basis,’’ and in-
serting ‘‘basis or’’, and
1038
(II) by striking ‘‘, or for tests
furnished in connection with obtaining
a second opinion required under sec-
tion 1164(c)(2) (or a third opinion, if
the second opinion was in disagree-
ment with the first opinion)’’;
(v) in subsection (a)(3), by striking
‘‘and for items and services furnished in
connection with obtaining a second opinion
required under section 1164(c)(2), or a
third opinion, if the second opinion was in
disagreement with the first opinion)’’; and
(vi) in the first sentence of subsection
(b), by striking ‘‘(4)’’ and all that follows
through ‘‘and (5)’’ and inserting and (4)’’.
(C) Section 1834(g)(1)(B) (42 U.S.C.
1395m(g)(1)(B)) is amended by striking ‘‘and
for items and services furnished in connection
with obtaining a second opinion required under
section 1164(c)(2), or a third opinion, if the
second opinion was in disagreement with the
first opinion)’’.
(D) Section 1862(a) (42 U.S.C. 1395y(a))
is amended—
1039
(i) by adding ‘‘or’’ at the end of para-
graph (14),
(ii) by striking ‘‘; or’’ at the end of
paragraph (15) and inserting a period, and
(iii) by striking paragraph (16).
(E) 
The 
third 
sentence 
of 
section
1866(a)(2)(A) (42 U.S.C. 1395w(a)(2)(A)) is
amended by striking ‘‘, with respect to items
and services furnished in connection with ob-
taining a second opinion required under section
1164(c)(2) (or a third opinion, if the second
opinion was in disagreement with the first opin-
ion),’’.
(3) E FFECTIVE DATE.—The amendments made
by this subsection shall apply to services provided on
or after the date of the enactment of this Act.
(b) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—(1) The third sentence of section 1156(b)(1) (42
U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘whehter’’
and inserting ‘‘whether’’.
(2) Section 1154(a)(9)(B) (42 U.S.C. 1320c–
3(a)(9)(B)) is amended by striking ‘‘this subsection’’ and
inserting ‘‘section 1156(a)’’.
1040
(3) Section 4205(d)(2)(B) of OBRA–1990 is amend-
ed by striking ‘‘amendments’’ and inserting ‘‘amend-
ment’’.
(4) Section 1160(d) (42 U.S.C. 1320c–9(d)) is
amended by striking ‘‘subpena’’ and inserting ‘‘subpoena’’.
(5) Section 4205(e)(2) of OBRA–1990 is amended
by striking ‘‘amendments’’ and inserting ‘‘amendment’’
and by striking ‘‘all’’.
(6)(A) Except as provided in subparagraph (B), the
amendments made by this subsection shall take effect as
if included in the enactment of OBRA–1990.
(B) The amendment made by paragraph (2) (relating
to the requirement on reporting of information to State
licensing boards) shall take effect on the date of the enact-
ment of this Act.
SEC. 13559. HEALTH MAINTENANCE ORGANIZATIONS.
(a) A DJUSTMENT IN MEDICARE CAPITATION PAY-
MENTS TO ACCOUNT FOR REGIONAL VARIATIONS IN AP-
PLICATION OF SECONDARY PAYER PROVISIONS.—
(1) IN
GENERAL.—Section 1876(a)(4) (42
U.S.C. 1395mm(a)(4)) is amended by adding at the
end the following new sentence: ‘‘In establishing the
adjusted average per capita cost for a geographic
area, the Secretary shall take into account the dif-
ferences between the proportion of individuals in the
1041
area with respect to whom there is a group health
plan that is a primary plan (within the meaning of
section 1862(b)(2)(A)) compared to the proportion
of all such individuals with respect to whom there is
such a group health plan.’’.
(2) E FFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to contracts entered
into for years beginning with 1994.
(b) REVISIONS IN THE PAYMENT METHODOLOGY
FOR RISK CONTRACTORS.—Section 4204(b) of OBRA–
1990 is amended to read as follows:
‘‘(b) REVISIONS IN THE PAYMENT METHODOLOGY
FOR RISK CONTRACTORS.—(1)(A) Not later than October
1, 1993, the Secretary of Health and Human Services (in
this subsection referred to as the ‘Secretary’) shall submit
a proposal to the Congress that provides for revisions to
the payment method to be applied in years beginning with
1995 for organizations with a risk-sharing contract under
section 1876(g) of the Social Security Act.
‘‘(B) In proposing the revisions required under sub-
paragraph (A) the Secretary shall consider—
‘‘(i) the difference in costs associated with med-
icare beneficiaries with differing health status and
demographic characteristics; and
1059
(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)
and shall be based only on aggregate benefits
provided and premiums collected under such
policies after the date specified in section
13571(m)(4) of the Omnibus Budget Reconcili-
ation Act of 1993.’’;
(F) in the first sentence of paragraph
(2)(A), by striking ‘‘by policy number’’ and in-
serting ‘‘by standard package’’;
(G) by striking the second sentence of
paragraph (2)(A) and inserting the following:
‘‘Paragraph (1)(B) shall not apply to a policy
until 12 months following issue.’’;