An Act to amend title XVIII of the Social Security Act, and for other purposes.
PL 94-182 (H.R.10284), enacted 12/31/1975

PUBLIC LAW 94-182—DEC. 31, 1975 
89 STAT. 1051 
Public Law 94-182 
94th Congress 
An Act 
Dec. 31. 1975 
[H.R. 10284] 
Medicare; food 
stamp 
distribution; 
irrigation dams, 
taxes. 
42 u s e 1395u. 
To amend title XVIII of the Social Security Act, and for other purposes. 
Be it enacted 'by the House of Representative and the Senate of the 
United States of America in Congress assernbled, 
TITLE I—PROVISIONS RELATING TO 
HEALTH SERVICES 
PREVAILING CHARGE LEVEL FOR FISCAL YEAR 1976 
SEC. 101. (a) Section 1842(b)(3) of the Social Security Act is 
amended by adding at the end thereof the following new sentence: 
"Notwithstanding the provisions of the third and fourth sentences 
preceding this sentence, the prevailing charge level in the case of a 
physician service in a particular locality determined pursuant to such 
third and fourth sentences for the fiscal year beginning July 1, 1975, 
shall, if lower than the prevailing charge level for the fiscal year end-
ing June 30,1975, in the case of a similar physician service in the same 
locality by reason of the application of economic index data, be raised 
to such prevailing charge level for the fiscal year ending June 30, 
1975.". 
(b) The amendment made by subsection (a) shall be applicable 
with respect to claims filed under part B of title XVIII of the Social 
Security Act with a carrier designated pursuant to section 1842 of 
such Act and processed by such carrier after the appropriate changes 
v;ere made in the prevailing charge levels for the fiscal year beginning 
July 1,1975, on the basis of economic index data under the third and 
fourth sentences of section 1842(b) (3) of such Act; except that (1) 
if less than the correct amount was paid (after the application of 
subsection (a) of this section) on any claim processed prior to the 
enactment of this section, the correct amount shall be paid by such 
carrier at such time (not exceeding 6 months after the date of the 
enactment of this section) as is administratively feasible, and (2) no 
such payment shall be made on any claim where the difference between 
the amount paid and the correct amount due is less than $1. 
EXTENSION OF AUTHORITT TO WAIVE 2 4-HOUR NURSING SERVICE 
REQUIREMENT FOR CERTAIN RURAL HOSPITALS 
SEC. 102. Section 1861(e) (5) of the Social Security Act is amended 42 USC 1395x. 
by striking out "January 1, 1976" and inserting in lieu thereof "Jan-
uary 1,1979". 
42 USC 1395u 
note. 
42 USC 1395J. 
COORDINATION BETWEEN MEDICARE AND FEDERAL EMPLOYEES' 
HEALTH 
BENEFITS 
PROGRAM 
SEO. 103. Section 1862(c) of the Social Security Act is repealed. 
Repeal. 
42 USC 1395y. 
89 STAT. 1052 
PUBLIC LAW 94-182—DEC. 31, 1975 
42 use 1395r. 
Effective date. 
42 use 1395r 
note. 
TECHNICAL AMENDMENT RELATING TO PART B PREMIUM 
DETERMINATIONS 
SEC. 104. (a) Section 1839(c)(3) of the Social Security Act is 
amended by striking out "June 1" each place it appears and inserting 
in lieu thereof "May 1". 
(b) The amendments made by subsection (a) shall apply with 
respect to determinations made under section 1839(c) (3) of the Social 
Security Act after the date of the enactment of this Act. 
PROFESSIONAL STANDARDS REVIEW AREAS 
Poll. 
SEC. 105. Section 1152 of the Social Security Act is amended by 
42use 1320C-1. adding at the end thereof the following new subsection: 
"(g) (1) In any case in which the Secretary has established, within 
a State, two or more appropriate areas with respect to which Profes-
sional Standards Eeview Organizations may be designated, he shall, 
prior to designating a Professional Standards Review Organization 
for any such area, conduct in each such area a poll in which the doc-
tors of medicine and doctors of osteopathy engaged in active practice 
therein will be asked: 'Do you support a change from the present local 
and regional Professional Standards Review Organization area desig-
nations to a single statewide area designation?'. If, in each such area, 
more than 50 per centum of the doctors responding to such question 
respond in the affirmative, then the Secretary shall establish the entire 
State as a single Professional Standards Review Organization area. 
"(2) The provisions of paragraph (1) shall not be applicable with 
respect to the designation of Professional Standards Review Orga-
nization areas in any State, if, prior to the date of enactment of this 
subsection, the Secretary has entered into an agreement (on a condi-
tional basis or otherwise) with an organization designating it as the 
Professional Standards Review Organization for any area in the 
State.". 
42 use 1395x. 
Effective date. 
42 use 1395x 
note. 
42 use 1395, 
1396. 
UPDATING o r THE LIFE SAFETY REQUIREMENTS APPLICABLE TO 
NURSING HOMES 
SEC 106. (a) Section 1861(j)(13) of the Social Security Act is 
amended by striking out "(21st edition, 1967)" and inserting in lieu 
thereof " (23d edition, 1973)". 
(b) Subject to subsection (c), the amendment made by subsection 
(a) shall be effective on the first day of the sixth month which begins 
after the date of enactment of this Act. 
(c) Any institution (or part of an institution) which complied with 
the requirements of section 1861 (j) (13) of the Social Security Act 
on the day preceding the first day referred to in subsection (b) shall, 
so long as such compliance is maintained (either by meeting the ap-
plicable provisions of the Life Safety Code (21st edition, 1967), with 
or without waivers of specific provisions, or by meeting the applicable 
provisions of a fire and safety code imposed by State law as provided 
for in such section 1861 (j) (13)), be considered (for purposes of titles 
XVTII and XIX of such Act) to be in compliance with the require-
ments of such section 1861 (j) (13), as it is amended by subsection (a) 
of this section. 
PUBLIC LAW 94-182—DEC. 31, 1975 
89 STAT. 1053 
GRANTS FOR CERTAIN EXPERIMENTS AND DEMONSTRATION PROJECTS 
SEC. 107. Nothing contained in section 222 (a) of Public Law 92-603 
42 USC 1395f 
shall be construed to preclude or prohibit the Secretary of Health, note. 
Education, and Welfare from including in any grant otherwise 
authorized to be made under such section moneys which are to be used 
for payments, to a participant in a demonstration or experiment with 
respect to which the grant is made, for or on account of costs incurred 
or services performed by such participant for a period prior to the 
date that the project of such participant is placed in operation, if— 
(1) the applicant for such grant is a State or an agency thereof, 
(2) such participant is an individual practice association which 
has been in existence for at least 3 years prior to the date of enact-
ment of this section and which has in effect a contract with such 
State (or an agency thereof), entered into prior to the date on 
which the grant is approved by the Secretary, under which such 
association will, for a period which begins before and ends after 
the date such grant is so approved, provide health care services 
for individuals entitled to care and services under the State plan 
of such State which is approved under title XIX of the Social 
Security Act, 
42 USC 1396. 
(3) the purpose of the inclusion of the project of such associa-
tion is to test the utility of a particular rate-setting methodology, 
designed to be employed in prepaid health plans, in an individual 
practice association operation, and 
(4) the applicant for such grant affirms that the use of moneys 
from such grant to make such payments to such individual prac-
tice association is necessary or useful in assuring that such asso-
ciation will be able to continue in operation and carry out the 
project described in clause (3). 
PROFESSIONAL STANDARDS REVIEW ORGANIZATION STARTUP DEADLINE 
SEC. 108. (a) Subsections (c) (1) and (f) (1) of section 1152 of the 
Social Security Act are each amended by striking out "January 1,1976" 42 USC 1320c-l. 
and inserting in lieu thereof "January 1,1978". 
(b) The amendments made by subsection (a) shall not apply in any ^^ USC 1320c-l 
area designated in accordance with section 1152(a) (1) of the Social "°^®-
Security Act where— 
(1) the membership association or organization representing 
the largest number of doctors of medicine in such area, or in the 
State in which such area is located if different, has adopted by 
resolution or other official procedure a formal policy position of 
opposition to or noncooperation with the established program of 
professional standards review; or 
(2) the organization proposed to be designated by the Secre-
tary under section 1152 of such Act has been negatively voted 
upon in accordance with the provisions of subsection (f) (2) 
thereof. 
STUDY REGARDING COVERAGE UNDER PART B OF MEDICARE FOR CERTAIN 
SERVICES PROVIDED BY OPTOMETRISTS 
SEC 109. The Secretary of Health, Education, and Welfare shall 
Study, report to 
conduct a study of, and submit to the Congress not later than 4 months Congress, 
after the date of enactment of this section a report containing his find- ^2 USC 1395] 
ings and recommendations with respect to, the appropriateness of 
°°*®-
reimbursement under the insurance program established by part B of 
89 STAT. 1054 
PUBLIC LAW 94-182—DEC. 31, 1975 
42 use 1395J. 
title XVIII of the Social Security Act for services performed by 
doctors of optometry but not presently recognized for purposes of 
reimbursement with respect to the provision of prosthetic lenses for 
patients with aphakia. 
42 use 1396b. 
42 use 1396a. 
Effective date. 
42 use 1396b 
note. 
UTILIZATION REVIEW UNDER MEDICAID 
SEC. 110. (a) Section 1903(g) (1) (C) of the Social Security Act is 
amended to read as follows: 
"(C) such State has in effect a continuous program of review 
of utilization pursuant to section 1902(a) (30) whereby each 
admission is reviewed or screened in accordance with criteria 
established by medical and other professional personnel who ai-e 
not themselves directly responsible for the care of the patient 
involved, and who do not have a significant financial interest in 
any such institution and are not, except in the case of a hospital, 
employed by the institution providing the care involved; and the 
information developed from such review or screening, along with 
the data obtained from prior reviews of the necessity for admis-
sion and continued stay of patients by such professional personnel, 
shall be used as the basis for establishing the size and composition 
of the sample of admissions to be subject to review and evaluation 
by such personnel, and any such sample may be of any size up to 
100 per centum of all admissions and must be of sufficient size to 
serve the purpose of (i) identifying the patterns of care being 
provided and the changes occurring over time in such patterns 
so that the need for modification may be ascertained, and (ii) sub-
jecting admissions to early or more extensive review where infor-
mation indicates that such consideration is warranted; and", 
(b) The amendment made by subsection (a) shall take effect on the 
first day of the first calendar month which begins not less than 90 days 
after the date of enactment of this Act. 
42 use 1396a. 
42 use 1395x. 
use prec. title 1. 
42 use 1396b. 
Supra. 
Effective date. 
42 use 1396a 
note. 
CONSENT BY STATES TO CERTAIN SUITS 
SEC. 111. (a) Section 1902 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(g) Notwithstanding any other provision of this title, a State 
plan tor medical assistance must include a consent by the State to the 
exercise of the judicial power of the United States in any suit brought 
against thp State or a State officer by or on behalf of any provider of 
services (as defined in section 1861 (u)) with respect to the application 
of subsection (a) (13) (D) to services furnished under such plan after 
June 30,1975, and a waiver by the State of any immunity from such a 
suit conferred by the 11th amendment to the Constitution or otherwise." 
(b) Section 1903 of such Act is amended by adding at the end thereof 
the following new subsection: 
" (1) Notwithstanding any other provision of this section, the amount 
payable to any State under this section with respect to any quarter 
beginning after December 31,1975, shall be reduced by 10 per centum 
of the amount determined with respect to such quarter under the pre-
ceding provisions of this section if such State is found by the Secretary 
not to be in compliance with section 1902(g)." 
(c) The amendments made by this section shall (except as other-
wise provided therein) become effective January 1,1976. 
PUBLIC LAW 94-182—DEC. 31, 1975 
89 STAT. 1055 
UTILIZATION REVIEW ACTIVITIES 
SEC. 112. (a)(1) Section 1861 (w) of the Social Security Act is 
amended— 
[A) by inserting "(1)" immediately after "(w)", and 
B) by adding at the end thereof the following new para-
graph : 
" (2) Utilization review activities conducted, in accordance with the 
requirements of the program established under part B of title XI 
of the Social Security Act with respect to services furnished by a hos-
pital to patients insured under part A of this title or entitled to have 
payment made for such services under a State plan approved under 
title V or XIX, by a Professional Standards Keview Organization 
designated for the area in which such hospital is located shall be 
deemed to have been conducted pursuant to arrangements between 
such hospital and such organization under which such hospital is 
obligated to pay to such organization, as a condition of receiving pay-
ment for hospital services so furnished under this part or under such 
a State plan, such amount as is reasonably incurred and requested (as 
determined under regulations of the Secretary) by such organization 
in conducting such review activities with respect to services furnished 
by such hospital to such patients.". 
(2) Section 1815 of such Act is amended— 
(A) by inserting "(a)" immediately after "SEC. 1815.", and 
(B) by adding at the end thereof the following new subsection: 
" (b) No payment shall be made to a provider of services which is a 
hospital for or with respect to services furnished by it for any period 
with respect to which it is deemed, under section 1861 (w) (2), to have 
in effect an arrangement with a Professional Standards Review Orga-
nization for the conduct of utilization review activities by such orga-
nization unless such hospital has paid to such organization the amount 
due (as determined pursuant to such section) to such organization for 
the review activities conducted by it pursuant to such arrangements or 
such hospital has provided assurances satisfactory to the Secretary 
that such organization will promptly be paid the amount so due to it 
from the proceeds of the payment claimed by the hospital. Payment 
under this title for utilization review activities provided by a Profes-
sional Standards Review Organization pursuant to an arrangement or 
deemed arrangement with a hospital under section 1861 (w) (2) shall 
be calculated without any requirement that the reasonable cost of such 
activities be apportioned among the patients of such hospital, if any, 
to whom such activities were not applicable.". 
(c) Section 1168 of such Act is amended by adding at the end 
thereof the following new sentence: "The Secretary shall make such 
transfers of moneys between the funds, referred to in clauses (a), (b), 
and (c) of the preceding sentence, as may be appropriate to settle 
accounts between them in cases where expenses properly payable from 
the funds described in one such clause have been paid from funds 
described in another of such clauses.". 
(d) The amendments made by this section shall be effective with 
respect to utilization review activities conducted on and after the first 
day of the first month which begins more than 30 days after the date of 
enactment of this Act, 
42 u s e 1395x. 
42 u s e 1320c. 
42 u s e 1395c. 
42 u s e 701, 
1396. 
Payment to 
provider of 
services. 
42 u s e 1395g. 
Supra. 
Transfer of fuiads. 
42 use 
1320C-17. 
Effective date. 
42 u s e 1395x 
note. 
89 STAT. 1056 
PUBLIC LAW 94-182—DEC. 31, 1975 
TITLE II—PROVISIONS RELATING TO FOOD STAMPS 
PROVIDED TO AFDC FAMILIES 
FOOD STAMP DISTRIBUTION TO ATDC FAMILIES 
7 use 2019 note. 
QEC. 201. Notwithstanding any other provision of law, the final date 
for compliance with regulations in implementation of section 10 (e) (7) 
7 use 2019. 
of the Food Stamp Act of 1964, as amended, may be extended until 
October 1,1976. 
TITLE III—INTERNAL REVENUE CODE AMENDMENT 
CERTAIN IRRIGATION DAMS 
26 use 103. 
SEC. 301. (a) Section 103 of the Internal Revenue Code of 1954 
(relating to interest on certain governmental obligations) is amended 
by redesignating subsection (e) as subsection (f) and by inserting 
after subsection (d) the following new subsection: 
"(e) CERTAIN IRRIGATION DAMS.—A dam for the furnishing of 
water for irrigation purposes which has a subordinate use in con-
nection with the generation of electric energy by water shall be treated 
as meeting the requirements of subsection (c) (4) (G) if— 
"(1) substantially all of the stored water is contractually avail-
able for release from such dam for irrigation purposes, and 
"(2) the water so released is available on reasonable demand 
to members of the general public.". 
Effective date. 
(b) The amendment made by subsection (a) shall apply to obliga-
26 use 103 note, tions issued after the date of the enactment of this Act. 
Approved December 31, 1975. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 94-626 (eomm. on Ways and Means). 
SENATE REPORT No. 94-549 (eomm. on Finance). 
eONGRESSIONAL REeORD, VoL 121 (1975): 
Nov. 17, considered and passed House. 
Dec. 17, considered and passed Senate, amended. 
Dec. 18, 19, House concurred in Senate amendments with an amendment. 
Dec. 19, Senate concurred in House amendment.