To amend title XVIII of the Social Security Act to eliminate the annual cap on the amount of payment for outpatient physical therapy and occupational therapy services under part B of the medicare program, and for other purposes.

SECTION 1. ELIMINATION OF ANNUAL CAP ON AMOUNT OF MEDICARE PAYMENT FOR 
              OUTPATIENT PHYSICAL THERAPY AND OCCUPATIONAL THERAPY 
              SERVICES.

    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by striking subsection (g).
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 1994.

SEC. 2. EXTRA-BILLING LIMITS.

    (a) Enforcement and Uniform Application.--
            (1) Enforcement.--Paragraph (1) of section 1848(g) of the 
        Social Security Act (42 U.S.C. 1395w-4(g)) is amended to read 
        as follows:
            ``(1) Limitation on actual charges.--
                    ``(A) In general.--In the case of a 
                nonparticipating physician or nonparticipating supplier 
                or other person (as defined in section 1842(i)(2)) who 
                does not accept payment on an assignment-related basis 
                with respect to a physician's service furnished to an 
                individual enrolled under this part, the following 
                rules apply:
                            ``(i) Application of limiting charge.--No 
                        such physician, supplier, or person may bill or 
                        collect an actual charge for the service in 
                        excess of the limiting charge described in 
                        paragraph (2) for such service.
                            ``(ii) No liability for excess charges.--No 
                        person is liable for payment of any amounts 
                        billed for the service in excess of such 
                        limiting charge.
                            ``(iii) Correction of excess charges.--If 
                        such a physician, supplier, or other person 
                        bills, but does not collect, an actual charge 
                        for a service in violation of clause (i), the 
                        physician, supplier, or other person shall 
                        reduce on a timely basis the actual charge 
                        billed for the service to an amount not to 
                        exceed the limiting charge for the service.
                            ``(iv) Refund of excess collections.--If 
                        such a physician, supplier, or other person 
                        collects an actual charge for a service in 
                        violation of clause (i), the physician, 
                        supplier, or other person shall provide on a 
                        timely basis a refund to the individual charged 
                        in the amount by which the amount collected 
                        exceeded the limiting charge for the service. 
                        The amount of such a refund shall be reduced to 
                        the extent the individual has an outstanding 
                        balance owed by the individual to the 
                        physician, supplier, or other person.
                    ``(B) Sanctions.--If a physician, supplier, or 
                other person--
                            ``(i) knowingly and willfully bills or 
                        collects for services in violation of 
                        subparagraph (A)(i) on a repeated basis, or
                            ``(ii) fails to comply with clause (iii) or 
                        (iv) of subparagraph (A) on a timely basis,
                the Secretary may apply sanctions against the 
                physician, supplier, or other person in accordance with 
                paragraph (2) of section 1842(j). The provisions of 
                section 1842(j)(4) shall apply for purposes of this 
                paragraph except that any reference in such section to 
                a physician is deemed also to include a reference to a 
                supplier or other person under this subparagraph.
                    ``(C) Timely basis.--For purposes of this 
                paragraph, the term `on a timely basis', means not 
                later than 30 days after the date the physician, 
                supplier, or other person is notified by the carrier 
                under this part of a violation of the requirements of 
                subparagraph (A).''.
            (2) Uniform application of extra-billing limits to 
        physicians' services.--
                    (A) In general.--Section 1848(g)(2)(C) of the 
                Social Security Act (42 U.S.C. 1395w-4(g)(2)(C)) is 
                amended by inserting ``or for nonparticipating 
                suppliers or other persons'' after ``nonparticipating 
                physicians''.
                    (B) Conforming definition.--Section 1842(i)(2) of 
                the Social Security Act (42 U.S.C. 1395u(i)(2)) is 
                amended--
                            (i) by striking ``, and the term'' and 
                        inserting ``; the term'', and
                            (ii) by inserting before the period at the 
                        end the following: ``; and the term 
                        `nonparticipating supplier or other person' 
                        means a supplier or other person (excluding a 
                        provider of services) that is not a 
                        participating physician or supplier (as defined 
                        in subsection (h)(1))''.
            (3) Additional conforming amendments.--Section 1848 of the 
        Social Security Act (42 U.S.C. 1395w-4) is amended--
                    (A) in subsection (a)(3)--
                            (i) by inserting ``and suppliers'' after 
                        ``physicians'',
                            (ii) by inserting ``or a nonparticipating 
                        supplier or other person (as defined in section 
                        1842(i)(2))'' after ``nonparticipating 
                        physician'', and
                            (iii) by adding at the end the following: 
                        ``In the case of physicians' services 
                        (including services which the Secretary 
                        excludes pursuant to subsection (j)(3)) of a 
                        nonparticipating physician, supplier, or other 
                        person for which payment is made under this 
                        part on a basis other than the fee schedule 
                        amount, the payment shall be based on 95 
                        percent of the payment basis for services of 
                        such type which are furnished by a 
                        participating physician, supplier, or other 
                        person.'';
                    (B) in subsection (g)(1)(A), as amended by 
                subsection (a), in the matter before clause (i), by 
                inserting ``(including services which the Secretary 
                excludes pursuant to subsection (j)(3))'' after ``a 
                physician's service'';
                    (C) in subsection (g)(2)(D), by inserting ``(or, if 
                payment under this part is made on a basis other than 
                the fee schedule under this section, 95 percent of the 
                other payment basis)'' after ``subsection (a)'';
                    (D) in subsection (g)(3)(B)--
                            (i) by inserting after the first sentence 
                        the following: ``No person is liable for 
                        payment of any amounts billed for such a 
                        service in violation of the previous 
                        sentence.'', and
                            (ii) in the last sentence, by striking 
                        ``previous sentence'' and inserting ``first 
                        sentence''; and
                    (E) in subsection (h)--
                            (i) by inserting ``or nonparticipating 
                        supplier or other person'' after ``physician'' 
                        the first place it appears,
                            (ii) by inserting ``, supplier, or other 
                        person'' after ``physician'' the second place 
                        it appears, and
                            (iii) by inserting ``, suppliers, and other 
                        persons'' after ``physicians'' the second place 
                        it appears.
    (b) Information on Extra-Billing Limits.--
            (1) Part of explanation of medicare benefits.--Section 
        1842(h)(7) of the Social Security Act (42 U.S.C. 1395u(h)(7)) 
        is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) in subparagraph (C), by striking ``shall 
                include'' and by striking the period at the end and 
                inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(D) in the case of services for which the billed amount 
        exceeds the limiting charge imposed under section 1848(g), 
        information regarding such limiting charge (including 
        information concerning the right to a refund under section 
        1848(g)(1)(A)(iv)).''.
            (2) Determinations by carriers.--Subparagraph (G) of 
        section 1842(b)(3) of the Social Security Act (42 U.S.C. 
        1395u(b)(3)) is amended to read as follows:
            ``(G) for a service that is furnished with respect to an 
        individual enrolled under this part, that is not paid on an 
        assignment-related basis, and that is subject to a limiting 
        charge under section 1848(g), will--
                    ``(i) determine, prior to making payment, whether 
                the amount billed for such service exceeds the limiting 
                charge applicable under section 1848(g)(2);
                    ``(ii) notify the physician, supplier, or other 
                person periodically (but not less often than once every 
                30 days) of determinations that amounts billed exceeded 
                such limiting charges; and
                    ``(iii) provide for prompt response to inquiries of 
                physicians, suppliers, and other persons concerning the 
                accuracy of such limiting charges for their 
                services;''.
    (c) Report on Charges in Excess of Limiting Charge.--Section 
1848(g)(6)(B) of the Social Security Act (42 U.S.C. 1395w-4(g)(6)(B)) 
is amended by inserting ``on the extent to which actual charges exceed 
limiting charges, the number and types of services involved, and the 
average amount of excess charges and'' after ``report to the 
Congress''.
    (d) Effective Dates.--
            (1) Enforcement and uniform application.--The amendments 
        made by subsection (a) shall apply to services furnished on or 
        after January 1, 1994.
            (2) Explanations.--The amendments made by subsection (b)(1) 
        shall apply to explanations of benefits provided on or after 
        January 1, 1994, except that the requirement for including 
        information concerning the right to a refund shall apply to 
        explanations of benefits provided on or after July 1, 1994.
            (3) Carrier determinations.--The amendments made by 
        subsection (b)(2) shall apply to contracts as of January 1, 
        1994.
            (4) Report.--The amendment made by subsection (c) shall 
        apply to reports for years beginning after 1994.

Summary: Amends title XVIII (Medicare) of the Social Security Act to eliminate the annual cap on the amount of payment for outpatient physical therapy and occupational therapy services under Medicare part B (Supplementary Medical Insurance). 
Revises the limitation on beneficiary liability for payment of any amounts billed in excess of the applicable limiting charge for physician services.  Applies such limitation to nonparticipating suppliers and other persons, as well as nonparticipating physicians. 
Includes in the Secretary of Health and Human Services' annual explanation of Medicare benefits information on refunds of such amounts. 
Makes carriers responsible for determining, prior to making payment, whether the amount billed for services is in excess of the applicable limiting charge and, if so, notifying the physician or other providers as appropriate. 
Requires the reports to the Congress on changes in excess charges for physician services to reflect additional information on the services involved.