†
186
HR 2642 EAS2
the State by law had provided for such ap-
plication); and
(ii) such section 203(f)—
(I) were applied by substituting
‘‘6.0’’ for ‘‘6.5’’ in paragraph (1)(A)(i);
and
(II) did not include the require-
ment under paragraph (1)(A)(ii).
PAYMENTS TO STATES HAVING AGREEMENTS FOR THE
PAYMENT OF EMERGENCY UNEMPLOYMENT COMPENSATION
SEC. 5003. (a) GENERAL RULE.—There shall be paid
to each State that has entered into an agreement under this
title an amount equal to 100 percent of the emergency un-
employment compensation paid to individuals by the State
pursuant to such agreement.
(b) TREATMENT
OF
REIMBURSABLE
COMPENSA-
TION.—No payment shall be made to any State under this
section in respect of any compensation to the extent the
State is entitled to reimbursement in respect of such com-
pensation under the provisions of any Federal law other
than this title or chapter 85 of title 5, United States Code.
A State shall not be entitled to any reimbursement under
such chapter 85 in respect of any compensation to the extent
the State is entitled to reimbursement under this title in
respect of such compensation.
†
187
HR 2642 EAS2
(c) DETERMINATION OF AMOUNT.—Sums payable to
any State by reason of such State having an agreement
under this title shall be payable, either in advance or by
way of reimbursement (as may be determined by the Sec-
retary), in such amounts as the Secretary estimates the
State will be entitled to receive under this title for each cal-
endar month, reduced or increased, as the case may be, by
any amount by which the Secretary finds that the Sec-
retary’s estimates for any prior calendar month were great-
er or less than the amounts which should have been paid
to the State. Such estimates may be made on the basis of
such statistical, sampling, or other method as may be agreed
upon by the Secretary and the State agency of the State
involved.
FINANCING PROVISIONS
SEC. 5004. (a) IN GENERAL.—Funds in the extended
unemployment compensation account (as established by sec-
tion 905(a) of the Social Security Act (42 U.S.C. 1105(a))
of the Unemployment Trust Fund (as established by section
904(a) of such Act (42 U.S.C. 1104(a)) shall be used for
the making of payments to States having agreements en-
tered into under this title.
(b) CERTIFICATION.—The Secretary shall from time to
time certify to the Secretary of the Treasury for payment
to each State the sums payable to such State under this
title. The Secretary of the Treasury, prior to audit or settle-
†
188
HR 2642 EAS2
ment by the Government Accountability Office, shall make
payments to the State in accordance with such certification,
by transfers from the extended unemployment compensation
account (as so established) to the account of such State in
the Unemployment Trust Fund (as so established).
(c) ASSISTANCE TO STATES.—There are appropriated
out of the employment security administration account (as
established by section 901(a) of the Social Security Act (42
U.S.C. 1101(a)) of the Unemployment Trust Fund, without
fiscal year limitation, such funds as may be necessary for
purposes of assisting States (as provided in title III of the
Social Security Act (42 U.S.C. 501 et seq.)) in meeting the
costs of administration of agreements under this title.
(d) APPROPRIATIONS
FOR
CERTAIN
PAYMENTS.—
There are appropriated from the general fund of the Treas-
ury, without fiscal year limitation, to the extended unem-
ployment compensation account (as so established) of the
Unemployment Trust Fund (as so established) such sums
as the Secretary estimates to be necessary to make the pay-
ments under this section in respect of—
(1) compensation payable under chapter 85 of
title 5, United States Code; and
(2) compensation payable on the basis of services
to which section 3309(a)(1) of the Internal Revenue
Code of 1986 applies.
†
189
HR 2642 EAS2
Amounts appropriated pursuant to the preceding sentence
shall not be required to be repaid.
FRAUD AND OVERPAYMENTS
SEC. 5005. (a) IN GENERAL.—If an individual know-
ingly has made, or caused to be made by another, a false
statement or representation of a material fact, or knowingly
has failed, or caused another to fail, to disclose a material
fact, and as a result of such false statement or representa-
tion or of such nondisclosure such individual has received
an amount of emergency unemployment compensation
under this title to which such individual was not entitled,
such individual—
(1) shall be ineligible for further emergency un-
employment compensation under this title in accord-
ance with the provisions of the applicable State un-
employment compensation law relating to fraud in
connection with a claim for unemployment compensa-
tion; and
(2) shall be subject to prosecution under section
1001 of title 18, United States Code.
(b) REPAYMENT.—In the case of individuals who have
received amounts of emergency unemployment compensa-
tion under this title to which they were not entitled, the
State shall require such individuals to repay the amounts
of such emergency unemployment compensation to the State
†
190
HR 2642 EAS2
agency, except that the State agency may waive such repay-
ment if it determines that—
(1) the payment of such emergency unemploy-
ment compensation was without fault on the part of
any such individual; and
(2) such repayment would be contrary to equity
and good conscience.
(c) RECOVERY BY STATE AGENCY.—
(1) IN GENERAL.—The State agency may recover
the amount to be repaid, or any part thereof, by de-
ductions from any emergency unemployment com-
pensation payable to such individual under this title
or from any unemployment compensation payable to
such individual under any State or Federal unem-
ployment compensation law administered by the
State agency or under any other State or Federal law
administered by the State agency which provides for
the payment of any assistance or allowance with re-
spect to any week of unemployment, during the 3-year
period after the date such individuals received the
payment of the emergency unemployment compensa-
tion to which they were not entitled, except that no
single deduction may exceed 50 percent of the weekly
benefit amount from which such deduction is made.
†
191
HR 2642 EAS2
(2) OPPORTUNITY FOR HEARING.—No repayment
shall be required, and no deduction shall be made,
until a determination has been made, notice thereof
and an opportunity for a fair hearing has been given
to the individual, and the determination has become
final.
(d) REVIEW.—Any determination by a State agency
under this section shall be subject to review in the same
manner and to the same extent as determinations under
the State unemployment compensation law, and only in
that manner and to that extent.
DEFINITIONS
SEC. 5006. In this title, the terms ‘‘compensation’’,
‘‘regular compensation’’, ‘‘extended compensation’’, ‘‘benefit
year’’, ‘‘base period’’, ‘‘State’’, ‘‘State agency’’, ‘‘State law’’,
and ‘‘week’’ have the respective meanings given such terms
under section 205 of the Federal-State Extended Unemploy-
ment Compensation Act of 1970 (26 U.S.C. 3304 note).
APPLICABILITY
SEC. 5007. (a) IN GENERAL.—Except as provided in
subsection (b), an agreement entered into under this title
shall apply to weeks of unemployment—
(1) beginning after the date on which such agree-
ment is entered into; and
(2) ending on or before March 31, 2009.
†
192
HR 2642 EAS2
(b) TRANSITION
FOR AMOUNT REMAINING
IN AC-
COUNT.—
(1) IN GENERAL.—Subject to paragraphs (2) and
(3), in the case of an individual who has amounts re-
maining in an account established under section 5002
as of the last day of the last week (as determined in
accordance with the applicable State law) ending on
or before March 31, 2009, emergency unemployment
compensation shall continue to be payable to such in-
dividual from such amounts for any week beginning
after such last day for which the individual meets the
eligibility requirements of this title.
(2) LIMIT ON AUGMENTATION.—If the account of
an individual is exhausted after the last day of such
last week (as so determined), then section 5002(c)
shall not apply and such account shall not be aug-
mented under such section, regardless of whether such
individual’s State is in an extended benefit period (as
determined under paragraph (2) of such section).
(3) LIMIT ON COMPENSATION.—No compensation
shall be payable by reason of paragraph (1) for any
week beginning after June 30, 2009.
TITLE VI—OTHER HEALTH MATTERS
SEC. 6001. (a) MORATORIA ON CERTAIN MEDICAID
REGULATIONS.—
†
193
HR 2642 EAS2
(1) EXTENSION OF CERTAIN MORATORIA IN PUB-
LIC
LAW
110–28.—Section 7002(a)(1) of the U.S.
Troop Readiness, Veterans’ Care, Katrina Recovery,
and Iraq Accountability Appropriations Act, 2007
(Public Law 110–28) is amended—
(A) by striking ‘‘prior to the date that is 1
year after the date of enactment of this Act’’ and
inserting ‘‘prior to April 1, 2009’’;
(B) in subparagraph (A), by inserting after
‘‘Federal Regulations)’’ the following: ‘‘or in the
final regulation, relating to such parts, published
on May 29, 2007 (72 Federal Register 29748)’’;
and
(C) in subparagraph (C), by inserting be-
fore the period at the end the following: ‘‘, in-
cluding the proposed regulation published on
May 23, 2007 (72 Federal Register 28930)’’.
(2) EXTENSION OF CERTAIN MORATORIA IN PUB-
LIC LAW 110–173.—Section 206 of the Medicare, Med-
icaid, and SCHIP Extension Act of 2007 (Public
Law 110–173) is amended—
(A) by striking ‘‘June 30, 2008’’ and insert-
ing ‘‘April 1, 2009’’;
(B) by inserting ‘‘, including the proposed
regulation published on August 13, 2007 (72
†
194
HR 2642 EAS2
Federal Register 45201),’’ after ‘‘rehabilitation
services’’; and
(C) by inserting ‘‘, including the final regu-
lation published on December 28, 2007 (72 Fed-
eral Register 73635),’’ after ‘‘school-based trans-
portation’’.
(3) MORATORIUM ON INTERIM FINAL MEDICAID
REGULATION RELATING TO OPTIONAL CASE MANAGE-
MENT
AND
TARGETED
CASE
MANAGEMENT
SERV-
ICES.—Notwithstanding any other provision of law,
the Secretary of Health and Human Services shall
not, prior to April 1, 2009, finalize, implement, en-
force, or otherwise take any action (through promul-
gation of regulation, issuance of regulatory guidance,
use of Federal payment audit procedures, or other ad-
ministrative action, policy, or practice, including a
Medical Assistance Manual transmittal or letter to
State Medicaid directors) to impose any restrictions
relating to the interim final regulation relating to op-
tional State plan case management services and tar-
geted case management services under the Medicaid
program published on December 4, 2007 (72 Federal
Register 68077) in its entirety.
(4) ADDITIONAL MORATORIA.—
†
195
HR 2642 EAS2
(A) IN
GENERAL.—Notwithstanding any
other provision of law, the Secretary of Health
and Human Services shall not, prior to April 1,
2009, take any action (through promulgation of
regulation, issuance of regulatory guidance, use
of Federal payment audit procedures, or other
administrative action, policy, or practice, in-
cluding a Medical Assistance Manual trans-
mittal or letter to State Medicaid directors) to
impose any restrictions relating to a provision
described in subparagraph (B) or (C) if such re-
strictions are more restrictive in any aspect than
those applied to the respective provision as of the
date specified in subparagraph (D) for such pro-
vision.
(B) PROPOSED REGULATION RELATING TO
REDEFINITION OF MEDICAID OUTPATIENT HOS-
PITAL
SERVICES.—The provision described in
this subparagraph is the proposed regulation re-
lating to clarification of outpatient clinic and
hospital facility services definition and upper
payment limit under the Medicaid program pub-
lished on September 28, 2007 (72 Federal Reg-
ister 55158) in its entirety.
†
196
HR 2642 EAS2
(C) PORTION
OF
PROPOSED
REGULATION
RELATING TO MEDICAID ALLOWABLE PROVIDER
TAXES.—
(i) IN
GENERAL.—Subject to clause
(ii), the provision described in this subpara-
graph is the final regulation relating to
health-care-related taxes under the Medicaid
program published on February 22, 2008
(73 Federal Register 9685) in its entirety.
(ii) EXCEPTION.—The provision de-
scribed in this subparagraph does not in-
clude the portions of such regulation as re-
late to the following:
(I) REDUCTION IN THRESHOLD.—
The reduction from 6 percent to 5.5
percent in the threshold applied under
section 433.68(f)(3)(i) of title 42, Code
of Federal Regulations, for determining
whether or not there is an indirect
guarantee to hold a taxpayer harmless,
as required to carry out section
1903(w)(4)(C)(ii) of the Social Secu-
rity Act, as added by section 403 of the
Medicare Improvement and Extension
†
197
HR 2642 EAS2
Act of 2006 (division B of Public Law
109–432).
(II) CHANGE
IN
DEFINITION
OF
MANAGED
CARE.—The change in the
definition of managed care as proposed
in the revision of section 433.56(a)(8)
of title 42, Code of Federal Regula-
tions, as required to carry out section
1903(w)(7)(A)(viii) of the Social Secu-
rity Act, as amended by section 6051
of the Deficit Reduction Act of 2005
(Public Law 109–171).
(D) DATE SPECIFIED.—The date specified
in this subparagraph for the provision described
in—
(i) subparagraph (B) is September 27,
2007; or
(ii) subparagraph (C) is February 21,
2008.
(b) RESTORATION
OF ACCESS
TO NOMINAL DRUG
PRICING FOR CERTAIN CLINICS AND HEALTH CENTERS.—
(1) IN GENERAL.—Section 1927(c)(1)(D) of the
Social Security Act (42 U.S.C. §1396r–8(c)(1)(D)),
as added by section 6001(d)(2) of the Deficit Reduc-
†
198
HR 2642 EAS2
tion Act of 2005 (Public Law 109–171), is
amended—
(A) in clause (i)—
(i) by redesignating subclause (IV) as
subclause (VI); and
(ii) by inserting after subclause (III)
the following:
‘‘(IV) An entity that—
‘‘(aa) is described in section
501(c)(3) of the Internal Revenue
Code of 1986 and exempt from tax
under section 501(a) of such Act
or is State-owned or operated;
and
‘‘(bb) would be a covered en-
tity 
described 
in 
section
340(B)(a)(4) of the Public Health
Service Act insofar as the entity
provides the same type of services
to the same type of populations as
a covered entity described in such
section provides, but does not re-
ceive funding under a provision of
law referred to in such section.
†
199
HR 2642 EAS2
‘‘(V) A public or nonprofit entity,
or an entity based at an institution of
higher learning whose primary purpose
is to provide health care services to stu-
dents of that institution, that provides
a service or services described under
section 1001(a) of the Public Health
Service Act.’’; and
(B) by adding at the end the following new
clause:
‘‘(iv) RULE OF CONSTRUCTION.—Noth-
ing in this subparagraph shall be construed
to alter any existing statutory or regulatory
prohibition on services with respect to an
entity described in subclause (IV) or (V) of
clause (i), including the prohibition set
forth in section 1008 of the Public Health
Service Act.’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect as if included in
the amendment made by section 6001(d)(2) of the
Deficit Reduction Act of 2005.
(c) ASSET VERIFICATION THROUGH ACCESS TO IN-
FORMATION HELD BY FINANCIAL INSTITUTIONS.—
†
200
HR 2642 EAS2
(1) ADDITION OF AUTHORITY.—Title XIX of the
Social Security Act is amended by inserting after sec-
tion 1939 the following new section:
‘‘ASSET VERIFICATION THROUGH ACCESS TO INFORMATION
HELD BY FINANCIAL INSTITUTIONS
‘‘SEC. 1940. (a) IMPLEMENTATION.—
‘‘(1) IN GENERAL.—Subject to the provisions of
this section, each State shall implement an asset
verification program described in subsection (b), for
purposes of determining or redetermining the eligi-
bility of an individual for medical assistance under
the State plan under this title.
‘‘(2) PLAN SUBMITTAL.—In order to meet the re-
quirement of paragraph (1), each State shall—
‘‘(A) submit not later than a deadline speci-
fied by the Secretary consistent with paragraph
(3), a State plan amendment under this title
that describes how the State intends to imple-
ment the asset verification program; and
‘‘(B) provide for implementation of such
program for eligibility determinations and rede-
terminations made on or after 6 months after the
deadline established for submittal of such plan
amendment.
‘‘(3) PHASE-IN.—
‘‘(A) IN GENERAL.—
†
201
HR 2642 EAS2
‘‘(i) IMPLEMENTATION
IN
CURRENT
ASSET
VERIFICATION
DEMO
STATES.—The
Secretary shall require those States specified
in subparagraph (C) (to which an asset
verification program has been applied be-
fore the date of the enactment of this sec-
tion) to implement an asset verification
program under this subsection by the end of
fiscal year 2009.
‘‘(ii) 
IMPLEMENTATION
IN
OTHER
STATES.—The Secretary shall require other
States to submit and implement an asset
verification program under this subsection
in such manner as is designed to result in
the application of such programs, in the ag-
gregate for all such other States, to enroll-
ment of approximately, but not less than,
the following percentage of enrollees, in the
aggregate for all such other States, by the
end of the fiscal year involved:
‘‘(I) 12.5 percent by the end of fis-
cal year 2009.
‘‘(II) 25 percent by the end of fis-
cal year 2010.
†
202
HR 2642 EAS2
‘‘(III) 50 percent by the end of fis-
cal year 2011.
‘‘(IV) 75 percent by the end of fis-
cal year 2012.
‘‘(V) 100 percent by the end of fis-
cal year 2013.
‘‘(B) CONSIDERATION.—In selecting States
under subparagraph (A)(ii), the Secretary shall
consult with the States involved and take into
account the feasibility of implementing asset
verification programs in each such State.
‘‘(C) STATES SPECIFIED.—The States speci-
fied in this subparagraph are California, New
York, and New Jersey.
‘‘(D) CONSTRUCTION.—Nothing in subpara-
graph (A)(ii) shall be construed as preventing a
State from requesting, and the Secretary approv-
ing, the implementation of an asset verification
program in advance of the deadline otherwise es-
tablished under such subparagraph.
‘‘(4) EXEMPTION OF TERRITORIES.—This section
shall only apply to the 50 States and the District of
Columbia.
‘‘(b) ASSET VERIFICATION PROGRAM.—
†
203
HR 2642 EAS2
‘‘(1) IN GENERAL.—For purposes of this section,
an asset verification program means a program de-
scribed in paragraph (2) under which a State—
‘‘(A) requires each applicant for, or recipi-
ent of, medical assistance under the State plan
under this title on the basis of being aged, blind,
or disabled to provide authorization by such ap-
plicant or recipient (and any other person whose
resources are required by law to be disclosed to
determine the eligibility of the applicant or re-
cipient for such assistance) for the State to ob-
tain (subject to the cost reimbursement require-
ments of section 1115(a) of the Right to Finan-
cial Privacy Act of 1978 but at no cost to the ap-
plicant or recipient) from any financial institu-
tion (within the meaning of section 1101(1) of
such Act) any financial record (within the
meaning of section 1101(2) of such Act) held by
the institution with respect to the applicant or
recipient (and such other person, as applicable),
whenever the State determines the record is need-
ed in connection with a determination with re-
spect to such eligibility for (or the amount or ex-
tent of) such medical assistance; and
†
204
HR 2642 EAS2
‘‘(B) uses the authorization provided under
subparagraph (A) to verify the financial re-
sources of such applicant or recipient (and such
other person, as applicable), in order to deter-
mine or redetermine the eligibility of such appli-
cant or recipient for medical assistance under
the State plan.
‘‘(2) PROGRAM
DESCRIBED.—A program de-
scribed in this paragraph is a program for verifying
individual assets in a manner consistent with the ap-
proach used by the Commissioner of Social Security
under section 1631(e)(1)(B)(ii).
‘‘(c) 
DURATION
OF
AUTHORIZATION.—Notwith-
standing section 1104(a)(1) of the Right to Financial Pri-
vacy Act of 1978, an authorization provided to a State
under subsection (b)(1)(A) shall remain effective until the
earliest of—
‘‘(1) the rendering of a final adverse decision on
the applicant’s application for medical assistance
under the State’s plan under this title;
‘‘(2) the cessation of the recipient’s eligibility for
such medical assistance; or
‘‘(3) the express revocation by the applicant or
recipient (or such other person described in subsection
†
205
HR 2642 EAS2
(b)(1)(A), as applicable) of the authorization, in a
written notification to the State.
‘‘(d) TREATMENT OF RIGHT TO FINANCIAL PRIVACY
ACT REQUIREMENTS.—
‘‘(1) An authorization obtained by the State
under subsection (b)(1) shall be considered to meet the
requirements of the Right to Financial Privacy Act of
1978 for purposes of section 1103(a) of such Act, and
need not be furnished to the financial institution, not-
withstanding section 1104(a) of such Act.
‘‘(2) The certification requirements of section
1103(b) of the Right to Financial Privacy Act of 1978
shall not apply to requests by the State pursuant to
an authorization provided under subsection (b)(1).
‘‘(3) A request by the State pursuant to an au-
thorization provided under subsection (b)(1) is
deemed to meet the requirements of section 1104(a)(3)
of the Right to Financial Privacy Act of 1978 and of
section 1102 of such Act, relating to a reasonable de-
scription of financial records.
‘‘(e) REQUIRED DISCLOSURE.—The State shall inform
any person who provides authorization pursuant to sub-
section (b)(1)(A) of the duration and scope of the authoriza-
tion.
†
206
HR 2642 EAS2
‘‘(f) REFUSAL OR REVOCATION OF AUTHORIZATION.—
If an applicant for, or recipient of, medical assistance
under the State plan under this title (or such other person
described in subsection (b)(1)(A), as applicable) refuses to
provide, or revokes, any authorization made by the appli-
cant or recipient (or such other person, as applicable) under
subsection (b)(1)(A) for the State to obtain from any finan-
cial institution any financial record, the State may, on that
basis, determine that the applicant or recipient is ineligible
for medical assistance.
‘‘(g) USE OF CONTRACTOR.—For purposes of imple-
menting an asset verification program under this section,
a State may select and enter into a contract with a public
or private entity meeting such criteria and qualifications
as the State determines appropriate, consistent with re-
quirements in regulations relating to general contracting
provisions and with section 1903(i)(2). In carrying out ac-
tivities under such contract, such an entity shall be subject
to the same requirements and limitations on use and disclo-
sure of information as would apply if the State were to
carry out such activities directly.
‘‘(h) TECHNICAL ASSISTANCE.—The Secretary shall
provide States with technical assistance to aid in imple-
mentation of an asset verification program under this sec-
tion.
†
207
HR 2642 EAS2
‘‘(i) REPORTS.—A State implementing an asset
verification program under this section shall furnish to the
Secretary such reports concerning the program, at such
times, in such format, and containing such information as
the Secretary determines appropriate.
‘‘(j) TREATMENT OF PROGRAM EXPENSES.—Notwith-
standing any other provision of law, reasonable expenses
of States in carrying out the program under this section
shall be treated, for purposes of section 1903(a), in the same
manner as State expenditures specified in paragraph (7)
of such section.’’.
(2) 
STATE
PLAN
REQUIREMENTS.—Section
1902(a) of such Act (42 U.S.C. 1396a(a)) is
amended—
(A) in paragraph (69) by striking ‘‘and’’ at
the end;
(B) in paragraph (70) by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by inserting after paragraph (70), as so
amended, the following new paragraph:
‘‘(71) provide that the State will implement an
asset verification program as required under section
1940.’’.
†
208
HR 2642 EAS2
(3) WITHHOLDING OF FEDERAL MATCHING PAY-
MENTS FOR NONCOMPLIANT STATES.—Section 1903(i)
of such Act (42 U.S.C. 1396b(i)) is amended—
(A) in paragraph (22) by striking ‘‘or’’ at
the end;
(B) in paragraph (23) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by adding after paragraph (23) the fol-
lowing new paragraph:
‘‘(24) if a State is required to implement an
asset verification program under section 1940 and
fails to implement such program in accordance with
such section, with respect to amounts expended by
such State for medical assistance for individuals sub-
ject to asset verification under such section, unless—
‘‘(A) the State demonstrates to the Sec-
retary’s satisfaction that the State made a good
faith effort to comply;
‘‘(B) not later than 60 days after the date
of a finding that the State is in noncompliance,
the State submits to the Secretary (and the Sec-
retary approves) a corrective action plan to rem-
edy such noncompliance; and
†
209
HR 2642 EAS2
‘‘(C) not later than 12 months after the date
of such submission (and approval), the State ful-
fills the terms of such corrective action plan.’’.
(4) REPEAL.—Section 4 of Public Law 110–90
is repealed.
SEC. 6002. LIMITATION ON MEDICARE EXCEPTION TO
THE PROHIBITION ON CERTAIN PHYSICIAN REFERRALS
FOR HOSPITALS.—
(a) IN GENERAL.—Section 1877 of the Social Security
Act (42 U.S.C. 1395nn) is amended—
(1) in subsection (d)(2)—
(A) in subparagraph (A), by striking ‘‘and’’
at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(C) in the case where the entity is a hos-
pital, the hospital meets the requirements of
paragraph (3)(D).’’;
(2) in subsection (d)(3)—
(A) in subparagraph (B), by striking ‘‘and’’
at the end;
(B) in subparagraph (C), by striking the
period at the end and inserting ‘‘; and’’; and
†
210
HR 2642 EAS2
(C) by adding at the end the following new
subparagraph:
‘‘(D) the hospital meets the requirements de-
scribed in subsection (i)(1) not later than 18
months after the date of the enactment of this
subparagraph.’’; and
(3) by adding at the end the following new sub-
section:
‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY FOR
HOSPITAL EXCEPTION
TO OWNERSHIP
OR INVESTMENT
PROHIBITION.—
‘‘(1) REQUIREMENTS DESCRIBED.—For purposes
of subsection (d)(3)(D), the requirements described in
this paragraph for a hospital are as follows:
‘‘(A) PROVIDER AGREEMENT.—The hospital
had—
‘‘(i) physician ownership on September
1, 2008; and
‘‘(ii) a provider agreement under sec-
tion 1866 in effect on such date.
‘‘(B) LIMITATION ON EXPANSION OF FACIL-
ITY
CAPACITY.—Except as provided in para-
graph (3), the number of operating rooms, proce-
dure rooms, and beds of the hospital at any time
on or after the date of the enactment of this sub-
†
211
HR 2642 EAS2
section are no greater than the number of oper-
ating rooms, procedure rooms, and beds as of
such date.
‘‘(C) PREVENTING
CONFLICTS
OF
INTER-
EST.—
‘‘(i) The hospital submits to the Sec-
retary an annual report containing a de-
tailed description of—
‘‘(I) the identity of each physician
owner and any other owners of the hos-
pital; and
‘‘(II) the nature and extent of all
ownership interests in the hospital.
‘‘(ii) The hospital has procedures in
place to require that any referring physi-
cian owner discloses to the patient being re-
ferred, by a time that permits the patient to
make a meaningful decision regarding the
receipt of care, as determined by the
Secretary—
‘‘(I) the ownership interest of such
referring physician in the hospital;
and
†
212
HR 2642 EAS2
‘‘(II) if applicable, any such own-
ership interest of the treating physi-
cian.
‘‘(iii) The hospital does not condition
any physician ownership interests either di-
rectly or indirectly on the physician owner
making or influencing referrals to the hos-
pital or otherwise generating business for
the hospital.
‘‘(iv) The hospital discloses the fact
that the hospital is partially owned by
physicians—
‘‘(I) on any public website for the
hospital; and
‘‘(II) in any public advertising
for the hospital.
‘‘(D) ENSURING BONA FIDE INVESTMENT.—
‘‘(i) Physician owners in the aggregate
do not own more than the greater of—
‘‘(I) 40 percent of the total value
of the investment interests held in the
hospital or in an entity whose assets
include the hospital; or
†
213
HR 2642 EAS2
‘‘(II) the percentage of such total
value determined on the date of enact-
ment of this subsection.
‘‘(ii) Any ownership or investment in-
terests that the hospital offers to a physician
owner are not offered on more favorable
terms than the terms offered to a person
who is not a physician owner.
‘‘(iii) The hospital (or any investors in
the hospital) does not directly or indirectly
provide loans or financing for any physi-
cian owner investments in the hospital.
‘‘(iv) The hospital (or any investors in
the hospital) does not directly or indirectly
guarantee a loan, make a payment toward
a loan, or otherwise subsidize a loan, for
any individual physician owner or group of
physician owners that is related to acquir-
ing any ownership interest in the hospital.
‘‘(v) Investment returns are distributed
to each investor in the hospital in an
amount that is directly proportional to the
ownership interest of such investor in the
hospital.
†
214
HR 2642 EAS2
‘‘(vi) Physician owners do not receive,
directly or indirectly, any guaranteed re-
ceipt of or right to purchase other business
interests related to the hospital, including
the purchase or lease of any property under
the control of other investors in the hospital
or located near the premises of the hospital.
‘‘(vii) The hospital does not offer a
physician owner the opportunity to pur-
chase or lease any property under the con-
trol of the hospital or any other investor in
the hospital on more favorable terms than
the terms offered to an individual who is
not a physician owner.
‘‘(E) PATIENT SAFETY.—
‘‘(i) Insofar as the hospital admits a
patient and does not have any physician
available on the premises to provide services
during all hours in which the hospital is
providing services to such patient, before
admitting the patient—
‘‘(I) the hospital discloses such
fact to a patient; and
‘‘(II) following such disclosure, the
hospital receives from the patient a
†
215
HR 2642 EAS2
signed acknowledgment that the pa-
tient understands such fact.
‘‘(ii) The hospital has the capacity
to—
‘‘(I) provide assessment and ini-
tial treatment for patients; and
‘‘(II) refer and transfer patients
to hospitals with the capability to treat
the needs of the patient involved.
‘‘(F) LIMITATION ON APPLICATION TO CER-
TAIN CONVERTED FACILITIES.—The hospital was
not converted from an ambulatory surgical cen-
ter to a hospital on or after the date of enact-
ment of this subsection.
‘‘(2) 
PUBLICATION
OF
INFORMATION
RE-
PORTED.—The Secretary shall publish, and update on
an annual basis, the information submitted by hos-
pitals under paragraph (1)(C)(i) on the public Inter-
net website of the Centers for Medicare & Medicaid
Services.
‘‘(3) EXCEPTION TO PROHIBITION ON EXPANSION
OF FACILITY CAPACITY.—
‘‘(A) PROCESS.—
‘‘(i) ESTABLISHMENT.—The Secretary
shall establish and implement a process
†
216
HR 2642 EAS2
under which an applicable hospital (as de-
fined in subparagraph (E)) may apply for
an exception from the requirement under
paragraph (1)(B).
‘‘(ii) OPPORTUNITY
FOR
COMMUNITY
INPUT.—The process under clause (i) shall
provide individuals and entities in the com-
munity that the applicable hospital apply-
ing for an exception is located with the op-
portunity to provide input with respect to
the application.
‘‘(iii) TIMING FOR IMPLEMENTATION.—
The Secretary shall implement the process
under clause (i) on November 1, 2009.
‘‘(iv) REGULATIONS.—Not later than
November 1, 2009, the Secretary shall pro-
mulgate regulations to carry out the process
under clause (i).
‘‘(B) FREQUENCY.—The process described
in subparagraph (A) shall permit an applicable
hospital to apply for an exception up to once
every 2 years.
‘‘(C) PERMITTED INCREASE.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii) and subparagraph (D), an applicable
†
217
HR 2642 EAS2
hospital granted an exception under the
process described in subparagraph (A) may
increase the number of operating rooms,
procedure rooms, and beds of the applicable
hospital above the baseline number of oper-
ating rooms, procedure rooms, and beds of
the applicable hospital (or, if the applicable
hospital has been granted a previous excep-
tion under this paragraph, above the num-
ber of operating rooms, procedure rooms,
and beds of the hospital after the applica-
tion of the most recent increase under such
an exception).
‘‘(ii) LIFETIME 100 PERCENT INCREASE
LIMITATION.—The Secretary shall not per-
mit an increase in the number of operating
rooms, procedure rooms, and beds of an ap-
plicable hospital under clause (i) to the ex-
tent such increase would result in the num-
ber of operating rooms, procedure rooms,
and beds of the applicable hospital exceed-
ing 200 percent of the baseline number of
operating rooms, procedure rooms, and beds
of the applicable hospital.