An Act to amend the Social Security Act to provide increases in benefits, improve computation methods, and raise the earnings base under the OASDI program, to make improvements in the Medicare, Medicaid, and maternal and child health programs with emphasis on improvements in their operating effectiveness, to authorize a family assistance plan providing basic benefits to low-income families with children with incentives for employment and training to improve the capacity for employment of members of such families, to achieve more uniform treatment of recipients under the Federal-State public assistance programs and otherwise improve such programs, and for other purposes
PL 92-603 (H.R.1), enacted 10/30/1972

86 STAT. ] 
PUBLIC LAW 92-603~OCT. 30, 1972 
1329 
Public Law 92-603 
AN A C T 
October 30, 1972 
To amend the Social Security Act, and for other purposes. 
[H. R. i] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That this Act, with 
sociai security 
the following table of contents, may be cited as the "Social Security ^g™^"'^'"^"*^ °^ 
Amendments of 1972". 
TABLE OF CONTENTS 
TITLE I—PROVISIONS RELATING TO OLD-AGE, SURVIVORS, AND 
DISABILITY INSURANCE 
Sec. 101. Special minimum primary insurance amount. 
- " 
Sec. 102. Increased widow's and widower's insurance benefits. 
Sec. 103. Delayed retirement credit. 
Sec. 104. Age-62 computation point for men. 
Sec. 105. Liberalization and automatic adjustment of earnings test. 
Sec. 106. Exclusion of certain earnings in year of attaining age 72. 
Sec. 107. Reduced benefits for widowers at age 60. 
Sec. 108. Entitlement to child's insurance benefits based on disability which began 
between age 18 and 22. 
Sec. 109. Continuation of child's benefits through end of semester. 
Sec. 110. Child's benefits in case of child entitled on more than one wage record. 
Sec. 111. Adoptions by disability and old-age insurance beneficiaries. 
Sec. 112. Child's insurance benefits not to be terminated by reason of adoption. 
Sec. 113. Benefits for child based on earnings record of grandparent. 
Sec, 114. Elimination of support requirement as condition of benefits for divorced 
and surviving divorced wives. 
Sec. 115. Waiver of duration-of-relationship requirement for widow, widower, 
or stepchild in case of remarriage to the same individual. 
Sec. 116. Reduction from 6 to 5 months of waiting period for disability benefits. 
Sec. 117. Elimination of disability insured-status requirement of substantial 
recent covered work in case of individuals who are blind. 
Sec. 118. Applications for disability insurance benefits filed after death of 
insured individual. 
Sec. 119. Workmen's compensation offset for disability insurance beneficiaries. 
Sec. 120. Wage credits for members of the uniformed services. 
Sec. 121. Optional determination of self-employment earnings. 
Sec. 122. Payments by employer to survivor or estate of former employee. 
Sec. 123. Coverage of vow-of-poverty members of religious orders. 
Sec. 124. Self-employment income of certain individuals temporarily living out-
side the United States. 
Sec. 125. Coverage of Federal Home Loan Bank employees. 
Sec. 126. Policemen and firemen in Idaho. 
Sec. 127. Coverage of certain hospital employees in New Mexico. 
Sec. 128. Coverage of certain employees of the government of Guam. 
Sec. 129. Coverage exclusion of students employed by nonprofit organizations 
auxiliary to schools, colleges, and universities. 
Sec. 130. Penalty for furnishing false information to obtain social security 
account number, and for deceptive practices involving social security 
account numbers. 
Sec. 131. Increase of amounts in trust funds available to pay costs of 
rehabilitation services. 
Sec. 132. Acceptance of money gifts made unconditionally to social security. 
Sec. 133. Payment in certain cases of disability insurance benefits with respect 
to certain i)eriods of disability. 
Sec. 134, Recomputation of benefits based on combined railroad and social 
security earnings. 
Sec. 135. Changes in tax schedules. 
Sec, 136. Allocation to disability insurance trust fund. 
1330 
PUBLIC L
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[86 STAT. 
Sec. 137. Method of issuance of social security account numbers. 
Sec. 138. Payments by employer to disabled former employee. 
Sec. 139. Termination of coverage of registrars of voters in Louisiana. 
Sec. 140. Computation of income of American ministers and members of 
religious orders performing services outside the "United States. 
Sec. 141. Modification of State agreements with respect to certain students 
and certain part-time employees. 
Sec. 142. Benefits in case of certain individuals interned during World 
War II. 
Sec. 143. Modification of agreement with West Virginia to provide coverage 
for certain policemen and firemen. 
Sec. 144. Perfecting amendments related to the 20-percent increase provision 
enacted in Public Law 92-336. 
Sec. 145. Elimination of duration-of-relationship requirements in certain cases 
involving survivor benefits (where insured's death was accidental 
or occurred in line of duty while he was a serviceman). 
TITLE II—PROVISIONS RELATING TO MEDICARE, MEDICAID, AND 
MATERNAL AND CHILD HEALTH 
Sec. 201. Coverage for disability beneficiaries under Medicare. 
Sec. 202. Hospital insurance benefits for uninsured individuals not eligible 
under transitional provision. 
Sec. 203. Amount of supplementary medical insurance premium. 
Sec. 204. Change in supplementary medical insurance premium. 
Sec. 206. Automatic enrollment for supplementary medical insurance. 
Sec. 207. Incentives for States to establish effective utilization review proce-
dures under Medicaid. 
See. 208. Cost-sharing under Medicaid. 
Sec. 209. Medicaid conditions of eligibility for certain employed families. 
Sec. 210. Payment under Medicare to individuals covered by Federal employees 
health benefits program. 
Sec. 211. Payment under Medicare for certain inpatient hospital and related 
physicians' services furnished outside the United States. 
Sec. 212. Optometrists' services under Medicaid. 
Sec. 213. Limitation on liability of beneficiary where Medicare claims are dis-
allowed. 
Sec. 221. Limitation on Federal participation for capital expenditures. 
Sec. 222. Demonstrations and reports; prospective reimbursement; extended 
care; intermediate care and homemaker services; ambulatory sur-
gical centers; physicians' assistants; performance incentive contracts. 
Sec. 223. Limitations on coverage of costs under Medicare. 
Sec. 224. Limits on prevailing charge levels. 
Sec. 225. Limits on payment for skilled nursing home and intermediate care 
facility services. 
Sec. 226. Payments to health maintenance organizations. 
Sec. 227. Payment under Medicare for services of physicians rendered at a 
teaching hospital. 
Sec. 228. Advance approval of extended care and home health coverage under 
Medicare. 
Sec. 229. Authority of Secretary to terminate payments to suppliers of services. 
Sec. 230. Elimination of requirement that States move toward comprehensive 
Medicaid programs. 
Sec. 231. Repeal of section 1902(d) of Medicaid. 
Sec. 232. Determination of reasonable cost of inpatient hospital services under 
Medicaid and under maternal and child health program. 
Sec. 233. Amount of payments where customary charges for services furnished 
are less than reasonable cost. 
Sec. 234. Institutional planning under Medicare. 
Sec. 235. Payments to States under Medicaid for installation and operation of 
claims processing and information retrieval systems. 
Sec. 236. Prohibition against reassignment of claims to benefits. 
Sec. 237. Utilization review requirements for hospitals and skilled nursing homes 
under Medicaid and under maternal and child health program. 
Sec. 238. Notification of unnecessary admission to a hospital or extended care 
facility under Medicare. 
Sec. 239. Use of State health agency to perform certain functions under Medic-
aid and under maternal and child health program. 
Sec. 240. Relationship between Medicaid and comprehensive health 
care 
programs. 
Sec. 241. Program for determining qualifications for certain health care 
personnel. 
86 STAT. ] 
PUBLIC L
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1331 
Sec. 242. Penalties for fraudulent acts and false reporting under Medicare and 
Medicaid. 
Sec. 243. Provider Reimbursement Review Board. 
Sec. 244. Validation of surveys made by Joint Commission on the Accreditation 
of Hospitals. 
Sec. 245. Payment for durable medical equipment under Medicare. 
Sec. 246. Uniform standards for skilled nursing facilities under Medicare and 
Medicaid. 
Sec. 247, Level of care requirements for skilled nursing home services. 
Sec. 248. Modification of Medicare's 14-day transfer requirement for extended 
care benefits. 
Sec. 249. Reimbursement rates for skilled nursing homes and intermediate care 
facilities. 
Sec. 249A. Medicaid certification and approval of skilled nursing facilities. 
Sec. 249B. Payments to States under Medicaid for compensation of inspectors 
responsible for maintaining compliance with Federal standards. 
Sec. 249C. Disclosure of information concerning the performance of carriers, 
intermediaries, State agencies, and providers of services under 
Medicare and Medicaid. 
Sec. 249D. Limitation on institutional care. 
Sec. 249E. Determining eligibility for assistance under title XIX for certain 
individuals. 
Sec. 249F. Professional standards review. 
Sec. 251. Physical therapy and other therapy services under Medicare. 
Sec. 252. Coverage of supplies related to colostomies. 
Sec. 255. Coverage prior to application for medical assistance. 
Sec. 256. Hospital admissions for dental services under Medicare. 
Sec. 257. Extension of grace period for termination of supplementary medical 
insurance coverage where failure to pay premiums is due to good 
cause. 
Sec. 258. Extension of time for filing claim for supplementary medical insur-
ance benefits where delay is due to administrative error. 
Sec. 259. Waiver of enrollment period requirements where individual's rights 
were prejudiced by administrative error or inaction. 
Sec. 260. Elimination of provisions preventing enrollment in supplementary med-
ical insurance program more than three years after first opportunity. 
Sec. 261. Waiver of recovery of incorrect payments from survivor who is with-
out fault under Medicare. 
Sec. 262. Requirement of minimum amount of claim to establish entitlement to 
hearing under supplementary medical insurance program. 
Sec. 263. Collection of supplementary medical insurance premiums from indi-
viduals entitled to both social security and railroad retirement 
benefits. 
Sec. 264. Prosthetic lenses furnished by optometrists under supplementary medi-
cal insurance program. 
Sec. 265. Provision of medical social services not mandatory for extended care 
facilities. 
Sec. 266. Refund of excess premiums under Medicare. 
Sec. 267. Waiver of registered nurse requirement in skilled nursing facilities 
in rural areas. 
Sec. 268. Exemption of Christian Science sanatoriums from certain nursing home 
requirements under Medicaid. 
Sec. 269. Requirements for nursing home administrators. 
Sec. 271. Increase in limitation on payments to Puerto Rico and the Virgin 
Islands for medical assistance. 
Sec. 271A. Medical assistance in Puerto Rico, the Virgin Islands, and Guam. 
Sec. 272. Extension of title V to American Samoa and the Trust Territory of 
the Pacific Islands. 
Sec. 273. Inclusion of chiropractor services under Medicare. 
Sec. 274. Miscellaneous technical and clerical amendments. 
Sec. 275. Chiropractors' services under Medicaid. 
Sec. 276. Services of podiatric interns and residents under part A of Medicare. 
Sec. 277. Use of consultants for extended care facilities. 
Sec. 278. Designation of extended care facilities and skilled nursing homes as 
skilled nursing facilities. 
Sec. 279. Direct laboratory billing of patients. 
Sec. 280. Clarification of meaning of "physicians' services" under title XIX. 
Sec. 281. Limitation on adjustment or recovery of incorrect payments under the 
Medicare program. 
Sec. 283. Conditions of coverage of outpatient speech pathology services under 
Medicare. 
Sec. 287. Termination of Medical Assistance Advisory Council. 
Sec. 288. Modification of the role of the Health Insurance Benefits Advisory 
Council. 
1332 
PUBLIC L
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[86 STAT. 
Sec. 289. Authority of Secretary to administer oaths in Medicare proceedings. 
Sec. 290. Withholding of Federal payments under Medicaid with respect to 
certain health care facilities. 
Sec. 292. Intermediate care services in States which do not have a Medicaid 
program. 
Sec. 293. Required information relating to excess Medicare tax payments by 
railroad employees. 
Sec. 294. Appointment and confirmation of Administrator of Social and Reha-
bilitation Service. 
Sec. 295. Repeal of section 1903(b) (1). 
Sec. 297. Coverage under Medicaid of intermediate care furnished in mental and 
tuberculosis institutions. 
Sec. 298. Independent review of intermediate care facility patients. 
Sec. 299. Intermediate care, maintenance of effort in public institutions. 
Sec. 299A. Disclosure of ownership of intermediate care facilities. 
Sec. 299B. Treatment in mental hospitals for individuals under age 21. 
Sec. 299D. Public disclosure of information concerning survey reports of an 
institution. 
Sec. 299E. Family planning services mandatory under Medicaid. 
Sec. 299F. Penalty for failure to provide child health screening services under 
Medicaid. 
Sec. 2991. Chronic renal disease considered to constitute disability. 
Sec, 299K. Elimination of coinsurance payment with respect to home health 
services under part B of Medicare. 
Sec. 299L. Certification of intermediate care facilities located on an Indian 
reservation. 
Sec. 2990. Determinations and appeals. 
TITLE III—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, 
, 
BLIND, AND DISABLED 
Sec. 301. Establishment of program. 
"TITLE XVI—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, 
BLIND. AND DISABLED 
"Sec. 1601. Purpose; appropriations. 
"Sec. 1602. Basic eligibility for benefits. 
,. > 
"^''- 
"Part A—Determination of Benefits 
i:ifz 
•?>; 
"Sec. 1611. Eligibility for and amount of benefits. 
"(a) Definition of eligible individual. 
• r;. y. 
"(b) Amounts of benefits. 
''"8' 
"(c) Period for determination of benefits. 
: vs ,n'ifi 
"(d) Special limits on gross income. 
"(e) Limitation on eligibility of certain individuals. 
s*<«iii i 
«(f) Suspension of payments to individuals who are outside the 
United States. 
"(g) Certain individuals deemed to meet the resources test. 
"(h) Certain individuals deemed to meet the income test. 
"Sec. 1612. Income. 
"(a) Meaning of income. 
"(b) Exclusions from income. 
"Sec. 1618. Resources. 
"(a) Exclusions from resources. 
"(b) Disposition of resources. 
"Sec. 1614. Meaning of terms. 
"(a) Aged, blind, or disabled individual. 
"(b) Eligible spouse. 
-i" 
"(c) Definition of child. 
"(d) Determination of marital relationships. 
=
"
" 
"(e) United States. 
"(f) Income and resources of individuals other than eligible 
individuals and eligible spouses. 
"Sec. 1615. Rehabilitation services for blind and disabled individuals. 
"Sec. 1616. Optional State supplementation. 
'•»uu:f •; ' •
• , 
"Part B—Procedural and General Provisions 
- v ^ < 
"Sec. 1631. Payments and procedures. 
"(a) Payment of benefits. 
"(b) Overpayments and underpayments. 
"(c) Hearings and review. 
86 STAT. ] 
PUBLIC L
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1333 
"(d) Procedures; prohibitions of assignments, representation of 
claimants. 
"(e) Applications and furnishing of information. 
"(f) Furnishing of information by other agencies. 
"Sec. 1632. Penalties for fraud. 
"Sec. 1633. Administration. 
"Sec. 1634. Determinations of medicaid eligibility. 
"TITLE VI—GRANTS TO STATES FOR SERVICES TO THE AGED, BLIND, 
OR DISABLED 
"Sec. 601, Appropriation. 
"Sec. 602. State plans for services to the aged, blind, or disabled. 
"Sec. 603. Payments to States. 
"Sec. 604. Operation of State plans. 
"Sec. 605. Definitions." 
Sec. 303. Repeal of titles I, X, and XIV of the Social Security Act. 
Sec. 304. Provision for disregarding of certain income in determining need for 
' ' 
* ^ <
*
^ 
aid to the aged, blind, or disabled for assistance. 
Sec. 305. Advances from OASI Trust Fund for administrative expenses. 
, • .q .siniv 
Sec. 306. Disregarding of income of OASDI recipients in determining need for 
public assistance. 
TITLE IV—MISCELLANEOUS 
Sec. 401. Limitation on fiscal liability of States for optional State supplementa-
tion. 
^
. 
^ . ,
^ 
Sec. 402. Transitional administrative provisions. 
' ' 
- •'^»^" 
Sec. 403. Savings provision regarding certain expenditures for social services. 
Sec. 404. Change in Executive Schedule—Commissioner of Social Security, 
Sec. 405. Separation of social services not required. 
Sec. 406. Manuals and policy issuances not required without charge. 
Sec. 407. Effective date of fair hearing decision. 
Sec. 408. Absence from State for more than 90 days. 
Sec. 409. Rent payments to public housing agency. 
Sec. 410. Statewideness not required for services. 
Sec. 411. Prohibition against participation in food stamp or surplus commodities 
,, 
,. , 
program by persons eligible to participate in employment or 
"" 
' ^* 
assistance programs. 
Sec. 412. Child welfare services. 
-' 
^- »A 
Sec. 413. Safeguarding information. 
TITLE I—PROVISIONS RELATING TO OLD-AGE, 
SURVIVORS, AND DISABILITY INSURANCE 
SPECIAL MINIMUM PRIMARY INSURANCE AMOUNT 
SEC. 101. (a) Section 215(a) of the Social Security Act is amended— 
^"'«' P- ••lo. 
(1) by striking out "paragraph (2)" in the matter preceding 
subparagraph (A) of paragraph (1) and inserting in lieu thereof 
•'paragraphs (2] and (3)"; and 
(2) by inserting after paragraph (2) the following: 
"(3) Such primary insurance amount shall be an amount equal 
to $8.50 multiplied by the individual's years of coverage in excess 
of 10 in any case in which such amount is higher than the indi-
vidual's primary insurance amount as determined under para-
graph (1) or (2). 
For purposes of paragraph (3), an individual's 'years of coverage' 
is the number (not exceeding 30) equal to the sum of (i) the number 
(not exceeding 14 and disregarding any fraction) determined by 
dividing the total of the wages credited to him (including wages 
deemed to be paid prior to 1951 to such individual under section 217, 
compensation under the Railroad Retirement Act of 1937 prior to 1951 
which is creditable to such individual pursuant to this title, and wages 
deemed to be paid prior to 1951 to such individual under section 231) 
for years after 1936 and before 1951 by $900, plus (ii) the number 
equal to the number of years after 1950 each of which is a computation 
base year (within the meaning of subsection (b)(2)(C)) and in each 
"Years 
erage." 
64 Stat. 
42 u s e 
50 Stat. 
45 u s e 
Post, 
p . 
of cov 
512. 
417. 
307. 
228a. 
1367. 
1334 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
64 Stat. 512. 
42 u s e 417. 
50 Stat. 307. 
45 u s e 228a. 
Post, p. 1352. 
72 Stat. 1017; 
Ante, p. 411. 
Ante, p. 1333. 
Ante, p. 406. 
Ante, p. 410. 
42 u s e 423. 
Ante, p. 412. 
Ante, p. 411. 
"Primary in-
surance amount. 
Ante, p. 1333. 
Ante, p. 411. 
Ante, p. 412 
of which he is credited with wages (including wages deemed to be 
paid to such individual under section 217, compensation under the 
Railroad Retirement Act of 1937 which is creditable to such indi-
vidual pursuant to this title, and wages deemed to be paid to such 
individual under section 229) and self-employment income of not less 
than 25 percent of the maximum amount which, pursuant to sub-
section (e), may be counted for such year." 
(b) Section 203(a) of such Act is amended by striking out "or" 
at the end of paragraph (3), by striking out the period at the end 
of paragraph (4) and inserting in lieu thereof ", or", and by inserting 
after paragraph (4) the following new paragraph: 
"(5) whenever the monthly benefits of such individuals are 
based on an insured individual's primary insurance amount which 
is determined under section 215(a) (3) and such primary insur-
ance amount does not appear in column IV of the table in (or 
deemed to be in) section 215(a), the applicable maximum amount 
in column V of such table shall be the amount in such column that 
appears on the line on which the next higher primary insurance 
amount appears in column IV, or, if larger, the largest amou^^t 
determined for such persons under this subsection for any month 
prior to October 1972." 
(c) Section 215 (a) (2) of such Act is amended by striking out "such 
primary insurance amount shall be" and all that follows and insert-
ing in lieu thereof the following: 
"such primary insurance amount shall be— 
"(A) the amount in column IV of such table which is 
equal to the primary insurance amount upon which such 
disability insurance benefit is based; except that if such 
individual was entitled to a disability insurance benefit under 
section 223 for the month before the effective month of a new 
table (whether enacted by another law or deemed to be such 
table under subsection (i)(2)(D)) and in the following 
month became entitled to an old-age insurance benefit, or he 
died in such following month, then his primary insurance 
• amount for such following month shall be the amount in 
column IV of the new table on the line on which in column I I 
of such table appears his primary insurance amount for the 
month before the effective month of the table (as determined 
under subsection (c)) instead of the amount in column IV 
equal to the primary insurance amount on which his disability 
insurance benefit is based. For purposes of this paragraph, the 
term 'primary insurance amount' with respect to any indi-
vidual means only a primarv insurance amount determined 
under paragraph (1) (and such individual's benefits shall be 
deemed to be based upon the primary insurance amount as so 
determined); or 
"(B) an amount equal to the primary insurance amount 
upon which such disability insurance benefit is based if such 
primary insurance amount was determined under paragraph 
(3)." 
(d) Section 215(f)(2) of such Act is amended by striking out 
"subsection (a) (1) (A) and (C)" and inserting in lieu thereof "sub-
sections (a)(1) (A) and (C) and (a)(3)". 
(e) Section 215(i)(2)(A)(ii) of such Act is amended bv striking 
out "mi'ler this title" and inserting in lieu thereof "under this title (but 
not including a primarv insurance amount determined under subsec-
tion (aH3) of this section)". 
(f) Whenever an insured individual is entitled to benefits for a 
month which are based on a primary insurance amount under para-
graph (1) or paragraph (3) of section 215(a) of the Social Security 
Ante, p. 410. 
86 STAT. ] 
PUBLIC L
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1335 
Act and for the following month siich prinuiiy insurance amount is 
^"'®' P- ^333. 
increased or such individual becomes entitled to benefits on a higher 
primary insurance amount under a diffei-ent paragraph of such section 
215 (a), such individuaPs old-age or disability insurance benefit (begin-
ning with the elective month of the increased primary insurance 
amount) shall be increased by an amount equal to the difference 
between the higher primary insirr-ance amount and the primary insur--
ance amount on which such benefit M-as based for the month prior to 
such effective month, after the application of section 202 (q) of sucli 
Act where applicable, to sirch difference. 
^°s^ pp. 1336-
(g) The amendments made by this section shall apply with respect 
Effective date. 
to monthly insurance benefits under title I I of the Social Security Act 
53 stat. i362. 
for months after December 1972 (without regard to Avhen the insured 
''^ ^^^ '*°^' 
individual became entitled to such benefits or when he died) and with 
respect to lump-sum death payments under such title in the case of 
deaths occurring after such month. 
iN("KEAsr-:D WIDOW'S AND WIDOWER'S INSURANCE BENEFITS 
SEC. 102. (a) (1) Section 202(e) (1) of the Social Security Act is 
79 stat. 376; 
amended— 
Posf, p. i348. 
(A) by striking out "821/2 percent of" wherever it appears; 
42 use 402. 
(B) by striking out "entitled, after attainment of age 62, to 
Avife's insurance benefits," in subparagraph (C) (i) and inserting 
in lieu thereof "entitled to wife's insurance benefits," and by strik-
ing out "or'' at the end of clause (i) in such subparagraph and 
inserting in lieu thereof "and (I) has attained age 65 or (II) is not 
entitled to benefits under subsection (a) or section 223, or"; and 
^'^ ^^'^ ^'^^• 
(C) bv striking out "age 62'' in subparagraph (C) (ii), and in 
the matter following subparagraph (G), and inserting in lieu 
thereof in each instance "age 65''. 
(2) Par'agraph (2) of section 202(e) of such Act is amended to read 
as follows: 
"(2) (A) Except as provided in subsection (q), paragraph (4) of 
this subsection, and subparagraph (B) of this paragraph, such widow's 
J5 stat. 131; 
iiisur-ance benefit for each month shall be equal to the primary insur-
ance amount of such deceased individual. 
"(B) If the deceased individual (on the basis of whose wages and 
self-employment income a widow or sui'viving divorced wife is 
entitled to Avidow's insurance benefits under this subsection) w-as, at any 
time, entitled to an old-age insurance benefit which was reduced by 
i-eason of the application of subsection (q), the widow's insurance bene-
fit of such widow or surviving divorced wife for any month shall, if the 
amount of the widow's insurance benefit of such widoAV or surviving 
divorced Avife (as deter-mined under subparagraph (A) and after 
application of subsection (q)) is greater than— 
"(i) the amount of the old-age insurance benefit to which such 
deceased individual Avould have been entitled (after application 
of subsection (({)) for such month if such individual A\^ere still 
liA'ingf, and 
"(ii) 82i/> per-cent of the primary insur-ance amount of such 
deceased individual, 
be reduced to the amount r-eferr-ed to in clause (i), or (if greater) the 
amount referred to in clause (ii)." 
(b) (1) Section 202(f) (1) of such Act is amended— 
8i^stfl^82t^^' 
(A) by striking out "82i/> percent of" AAiier-ever it appears; 
Post^p. 1336. 
(B) by strikirijr out "died," in subparagraph (C) and inserting 
in lieu thereof "died, and (I) has attained age 65 or (II) is not 
entitled to benefits under- subsection (a) or section 223,"; and 
82-081 O - 73 - 87 
1336 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
Widower's bene-
fits. 
75 Stat. 138; 
79 Stat. 404. 
42 u s e 402. 
75 Stat. 131; 
79 Stat. 368. 
74 Stat. 954; 
81 Stat. 832. 
42 u s e 403. 
ti' 38U 
81 Stat. 832; 
Post, p. 1343. 
70 Stat. 814; 
79 Stat. 404. 
Ante, p. 1335; 
Supra, 
Benefit reduc-
tions. 
79 Stat. 374; 
81 Stat. 830. 
42 u s e 402. 
81 Stat. 831. 
(C) by striking out "age 62" in the matter following subpara-
graph (G) and inserting in lieu thereof "age 65". 
(2) Paragraph (3) of section 202(f) of such Act is amended to read 
as follows: 
"(3) (A) Except as provided in subsection (q), paragraph (5) of 
this subsection, and subparagraph (B) of this paragraph, such widow-
er's insurance benefit for each month shall be equal to the primary 
insurance amount of his deceased wife. 
"(B) If the deceased wife (on the basis of whose wages and self-
employment income a widower is entitled to widower's insurance bene-
fits under this subsection) was, at any time, entitled to an old-age 
insurance benefit which was reduced by reason of the application of 
subsection (q), the widower's insurance benefit of such widower for 
any month shall, if the amount of the widower's insurance benefit of 
such widower (as determined under subparagraph (A) and after 
application of subsection (q)) is greater than— 
"(i) the amount of the old-age insurance benefit to which such 
deceased wife would have been entitled (after application of sub-
section (q)) for such month if such wife were still living; and 
"(ii) 821^ percent of the primary insurance amount of such 
deceased wife; 
be reduced to the amount referred to in clause (i), or (if greater) the 
amount referred to in clause (ii)." 
(c) (1) The last sentence of section 203(c) of such Act is amended 
by striking out all that follows the semicolon and inserting in lieu 
thereof the following: "nor shall any deduction be made under this 
subsection from any widow's insurance benefits for any month in which 
the widow or surviving divorced wife is entitled and has not attained 
age 65 (but only if she became so entitled prior to attaining age 60), 
or from any widower's insurance benefit for any month in which the 
widower is entitled and has not attained age 65 (but only if he became 
so entitled prior to attaining age 62)." 
(2) Clause (D) of section 203(f)(1) of such Act is amended to 
read as follows: " (D) for which such individual is entitled to widow's 
insurance benefits and has not attained age 65 (but only if she became 
so entitled prior to attaining age 60), or widower's insurance benefits 
and has not attained age 65 (but only if he became so entitled prior 
to attaining age 62), or". 
(d) Section 202(k) (3) (A) of such Act is amended by striking out 
"subsection (q) and" and inserting in lieu thereof "subsection (q), 
subsection (e)(2) or (f)(3), and". 
(e) (1) Section 202(q) (1) of such Act is amended to read as follows: 
"(1) If the first month for which an individual is entitled to an 
old-age, wife's, husband's, widow's, or widower's insurance benefit 
is a month before the month in which such individual attains retire-
ment age, the amount of such benefit for such month and for any sub-
sequent month shall, subject to the succeeding paragraphs of this 
subsection, be reduced by— 
"(A) % of 1 percent of such amount if such benefit is an 
old-age insurance benefit, 2%g of 1 percent of such amount if such 
j | 
benefit is a wife's or husband's insurance benefit, or i%o of 
1 percent of such amount if such benefit is a widow's or widower's 
insurance benefit, multiplied by— 
"(B) (i) the number of months in the reduction period for such 
benefit (determined under paragraph (6) (A)), if such benefit is 
for a month before the month in which such individual attains 
retirement age, or 
inxu 
•it* 
\ 
• i 
86 STAT.] 
PUBLIC L
A
W 92-60a-OCT. 30, 1972 
1337 
"(ii) if less, the number of such months in the adjusted reduc-
tion period for such benefit (determined under paragraph (7)), 
if such benefit is (I) for the month in which such individual 
attains age 62, or (II) for the month in which such individual 
attains retirement age; 
and in the case of a widow or widower whose first month of entitle-
ment to a widow's or widower's insurance benefit is a month before 
the month in which such widow or widower attains age 60, such bene-
fit, reduced pursuant to the preceding provisions of this paragraph 
(and before the application of the second sentence of paragraph (8)), 
shall be further reduced by— 
"(C) 4%4Q of 1 percent of the amount of such benefit, mul-
tiplied bv— 
"(D) (i) the number of months in the additional reduction 
period for such benefit (determined under paragraph (6) (B)), if 
such benefit is for a month before the month in which such indi-
vidual attains age 62, or 
"(ii) if less, the number of months in the additional adjusted 
reduction period for such benefit (determined under paragraph 
(7)), if such benefit is for the month in which such individual 
attains age 62 or any month thereafter." 
(2) Section 202(q) (3) of such Act is amended— 
(A) by striking out clause (ii) of subparagraph (E) and 
inserting in lieu thereof the following: 
"(ii) the amount equal to the sum of (I) the amount by which 
such widow's or widower's insurance benefit would be reduced 
under paragraph (1) if the period specified in paragraph (6) (A) 
ended with the month before the month in which she or he 
attained age 62 and (II) the amount by which such old-age insur-
ance benefit would be reduced under paragraph (1) if it were 
equal to the excess of such old-age insurance benefit (before 
reduction under this subsection) over such widow's or widower's 
insurance benefit (before reduction under this subsection)". 
(B) by striking out clause (ii) of subparagraph (F) and 
inserting in lieu thereof the following: 
"(ii) the amount equal to the sum of (I) the amount by which 
such widow's or widower's insurance benefit would be reduced 
under paragraph (1) if the period specified in paragraph (6) (A) 
ended with the month before the month in which she or he 
attained age 62 and (II) the amount by which such disability 
insurance benefit would be reduced under paragraph (2) if it were 
equal to the excess of such disability insurance benefit (before 
reduction under this subsection) over such widow's or widower's 
insurance benefit (before reduction under this subsection)". 
(C) by striking out "had such individual attained age 62 in" 
in subparagraph (G) and inserting in lieu thereof "as if the 
period specified in paragraph (6) (A) (or, if such paragraph does 
not apply, the period specified in paragraph (6) (B)) ended with 
the month before". 
(3) Section 202 (q) (7) of such Act is amended— 
(A) by striking out everything that precedes subparagraph 
(A) and inserting in lieu thereof the following:, 
" (7) For purposes of this subsection the 'adjusted reduction period' 
for an individual's old-age, wife's, husband's, widow's, or widower's 
insurance benefit is the reduction period prescribed in pai-agraph (6) 
(A) for such benefit, and the 'additional adjusted reduction period' 
for an individual's, widow's, or widower's insurance benefit is the 
additional reduction period prescribed by paragraph (6) (B) for such 
benefit, excluding from each such period—"; and 
Infra. 
75 Stat. 131; 
79 Stat. 368. 
42 u s e 402. 
81 Stat. 831. 
75 Stat. 131; 
79 Stat. 368, 369, 
374. 
"Adjusted re-
duction period." 
"Additional 
adjusted reduc-
tion period." 
1338 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
.
^ , 
(B) by striking out "attained retirement age" in subparagraph 
(E) and inserting in lieu thereof "attained age 62, and also for 
any later month before the month in which he attained retire-
ment age,". 
"Retirement 
(4) Sectiou 202(q) (9) of sucih Act is amended to read as follows: 
^
^
7
*
9 Stat. 375. 
" (9) For purposcs of this subsection, the term 'retirement age' means 
42 use 402. 
age 65." 
Ante, p. 1337. 
(5) Scction 202(q) (3) of such Act is amended by adding at the 
end thereof the following new subparagraph: 
"(H) Notwithstanding subparagraph (A) of this paragraph, if the 
fii-st month for which an individual is entitled to a widow's or widow-
er's insurance benefit is a month for which such individual is also 
entitled to an old-age insurance benefit to which such individual was 
first entitled for a month before she or he became entitled to a widow's 
' 
or widower's benefit, the reduction in such widow's or widower's 
insurance benefit shall be determined under paragraph (1)." 
68 Stat. 1073; 
(f) Sectiou 202(m) of such Act is amended to read as follows: 
72 Stat. 1017. 
"Minimum Survivor's Benefit 
64 Stat. 
Ante, 
Ante, 
Ante, 
336. 
p. 
p. 
PP 
487. 
1336. 
406. 
. 1335, 
"(m) (1) In any case in which an individual is entitled to a monthly 
benefit under this section on the basis of the wages and self-employ-
ment income of a deceased individual for any month and no other 
person is (without the application of subsection (j) (1)) entitled to a 
monthly benefit under this section for such month on the basis of such 
wages and self-employment income, such individual's benefit amount 
for such month, prior to reduction under subsection (k) (3), shall be 
not less than the first amount appearing in column IV of the table 
in (or deemed to be in) section 215(a), except as provided in para-
graph (2). 
"(2) In the case of any such individual who is entitled to a monthly 
benefit under subsection (e) or (f), such individual's benefit amount, 
after reduction under subsection (q) (1), shall be not less than— 
"(A) $84.50, if his first month of entitlement to such benefit 
is the month in which such individual attained age 62 or a sub-
sequent month, or 
"(B) $84.50 reduced under subsection (q) (1) as if retirement 
81 Stat. 831. 
age as specified in spbsection (q) (6) (A) (ii) were age 62 instead 
Supra. 
of the age specified in subsection (q)(9), if his first month of 
entitlement to such benefit is before the month in which he attained 
age 62. 
"(3) In the case of any individual whose benefit amount was com-
puted (or recomputed) under the provisions of paragraph (2) and 
such individual was entitled to benefits under subsection (e) or (f) 
for a month prior to any month after 1972 for which a general benefit 
Ante. p. 412. 
increase under this title (as defined in section 215(i) (3)) or a benefit 
increase under section 215 (i) becomes effective, the benefit amount of 
such individual as computed under paragraph (2) without regard to 
the reduction specified in subparagraph (B) thereof shall be increased 
by the percentage increase applicable for such benefit increase, prior 
to the application of subsection (q) (1) pursuant to paragraph (2) (B) 
^/l^st^y/i; 
and subsection (q) (4)." 
(g) (1) In the case of an individual who is entitled to widow's or 
widower's insurance benefits for the month of December 1972 the 
Secretary shall, if it would increase such benefits, redetermine the 
amount of such benefits for months after December 1972 under title I I 
53 Stat. 1362. 
of the Social Security Act as if the amendments made by this section 
had been m effect for the first month of such individual's entitlement 
to such benefits. 
42 u s e 401. 
42 u s e 403. 
Ante, 
p. 1337. 
1336. 
72 Stat. 1017; 
Ante, 
p. 410. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1339 
(2) For purposes of paragraph (1)— 
(A) any deceased individual on whose wages and self-employ-
ment income the benefits of an individual referred to in paragraph 
(1) are based, shall be deemed not to have been entitled to benefits 
if the record, of insured individuals who were entitled to benefits, 
that is readily available to the Secretary contains no entry for 
such deceased individual; and 
» * 
(B) any deductions under subsections (b) and (c) of section 
203 of such Act, applicable to the benefits of an individual 
^4 stat. 953 
referred to m paragraph (1) tor any month prior to Septem-
ber 1965, shall be disregarded in applying the provisions of 
section 202(q) (7) of such Act (as amended by this Act). 
(h) Where— 
(1) two or more persons are entitled to monthly benefits under 
section 202 of the Social Security Act for December 1972 on the 
64 stat. 482. 
basis of the wages and self-employment incx)me of a deceased 
individual, and one or more of such persons is so entitled under 
subsection (e) or (f) of such section 202, and 
,^"^^' ^^' ^^^^ 
(2) one or more of such persons is entitled on the basis of such 
wages and self-employment income to monthly benefits under sub-
section (e) or (f) of such section 202 (as amended by this section) 
for January 1973, and 
(3) the total of benefits to which all persons are entitled imder 
section 202 of such Act on the basis of such wages and self-
employment income for January 1973 is reduced by reason of 
section 203 (a) of such Act, as amended by this Act (or would, but 
for the penultimate sentence of such section 203(a), be so 
reduced), 
then the amount of the benefit to which each such person referred to 
in paragraph (1) is entitled for months after December 1972 shall 
in no case be less after the application of this section and such section 
203(a) than the amount it would have been without the application 
of this section. 
(i) The amendments made by this section shall apply with respect 
Effective date, 
to monthly benefits under title I I of the Social Security Act for months 
53 stat. 1362. 
after December 1972. 
'^ "«^ '^'• 
DELAYED RETIREMENT CREDIT 
SEC. 103. (a) Section 202 of the Social Security Act is amended by 
^4 stat. 482; 
adding after subsection (v) thereof the following: 
^^ ^*^*" ^^^' 
"Increase in Old-Age Insurance Benefit Amounts on Account of 
Delayed Retirement 
"(w) (1) If the first month for which an old-age insurance benefit 
becomes payable to an individual is not earlier than the month in 
which such individual attains age 65 (or his benefit payable at such 
age is not reduced under subsection (q)), the amount of the old-age 13^8'^' ^^' ^^^^" 
insurance benefit (other than a benefit based on a primary insurance 
amount determined under section 215(a) (3)) whicn is payable with-
out regard to this subsection to such individual shall be increased by— 
"(A) 142 of 1 percent of such amount, multiplied by 
"(B) the number (if any) of the increment months for such 
individual. 
"(2) For purposes of this subsection, the number of increment 
months for any individual shall be a number equal to the total number 
of the months— 
Ante, 
p. 1333, 
rv 
1340 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
Infra. 
74 Stat. 953. 
42 use 403. 
70 Stat. 818. 
42 u s e 202. 
Ante, p. 415. 
Ante, p. 1339. 
Effective date. 
53 Stat. 1362. 
42 u s e 401. 
" (A) which have elapsed after the month before the month in 
which such individual attained age 65 or (if later) December 1970 
and prior to the month in which such individual attained age 72, 
and 
"(B) with respect to which— 
"(i) such individual was a fully insured individual (as 
defined in section 214 (a)), and 
' 
"(ii) such individual either was not entitled to an old-age 
insurance benefit or suffered deductions under section 203(D) 
or 203 (c) in amounts equal to the amount of such benefit. 
"(3) For purposes of applying the provisions of paragraph (1), a 
determination shall be made under paragraph (2) for each year, begin-
ning with 1972, of the total number of an individual's increment months 
through the year for which the determination is made and the total 
so determined shall be applicable to such individual's old-age insurance 
benefits beginning with benefits for January of the year following the 
year for which such determination is made; except that the totalnum-
ber applicable in the case of an individual who attains age 72 after 
1972 shall be determined through the month before the month in which 
he attains such age and shall be applicable to his old-age insurance ben-
efit beginning with the month in which he attains such age. 
"(4) This subsection shall be applied after reduction under section 
203(a)." 
(b) The matter following paragraph (3) of section 202(a) of such 
Act is amended by inserting "and subsection (w)" after "subsection 
(q)"-
(c) Effective January 1, 1974, section 203(a) (2) (C) of such Act is 
amended by striking out "determined under this title" and inserting 
in lieu thereof "determined under this title (excluding any part thereof 
determined under section 202 (w))". 
(d) The amendments made by this section shall be applicable Tvith 
respect to old-age insurance benefits payable under title I I of the 
Social Security Act for months beginning after 1972. 
75 Stat. 137. 
42 use 414. 
42 u s e 415. 
74 Stat. 967; 
Post, p. 1351. 
42 u s e 423. 
42 u s e 427. 
Supra. 
AGE-6 2 COMPUTATION POINT FOR MEN 
SEC. 104. (a) Section 214(a) (1) of the Social Security Act is 
amended by striking out "before—" and all that follows down through 
"except" and inserting in lieu thereof the following: 
"before the year in which he died or (if earlier) the year in which 
he attained age 62, except". 
(b) Section 215(b)(3) of such Act is amended by striking out 
"before—" and all that follows down through "For" and inserting in 
lieu thereof the following: 
"before the year in which he died, or if it occurred earlier but after 
1960, the year in which he attained age 62. For". 
(c) Section 223 (a) (2) of such Act is amended—• 
^1^ by striking out "(if a woman) or age 65 (if a man)", 
(2) by striking out "m the case of a woman" and inserting in 
lieu thereof "in the case of an individual", and 
(3) by striking out "she" and inserting in lieu thereof "he". 
(d) Section 223(c) (1) (A) of such Act is amended by striking out 
" (if a woman) or age 65 (if a man)". 
(e) Section 227(a) of such Act is amended by striking out "so much 
of paragraph (1) of section 214(a) as follows clause (C)" and insert-
ing in lieu thereof "paragraph (1) of section 214 (a)". 
(f) Section 227 (b) of such Act is amended by striking out "so much 
of paragraph (1) thereof as follows clause (C)" and inserting in lieu 
thereof "paragraph (1) thereof". 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1341 
(g) Sections 20i)(i) and 216(1) (3) (A), of such Act are amended 
by striking out" (if a woman) or age 65 (if a man) '\ 
(h) Section 303(g) (1) of the Social Security Amendments of 1960 
is amended— 
(1) by striking out "Amendments of 1965 and 1967" and insert-
ing in lieu thereof "Amendments of 1965, 1967, 1969, and 1972 
(and by Public Law 92-5)"; and 
(2) by striking out "Amendments of 1967" wdierever it appears 
and inserting in lieu thereof "Amendments of 1972". 
(i) Paragraph (9) of section 3121(a) of the Internal Revenue Code 
of 1954 (relating to definition of wages) is amended to read as follows: 
"(9) any payment (other than vacation or sick pay) made to 
an employee after the month in which he attains age 62, if such 
employee did not work for the employer in the period for which 
such payment is made;". 
(j) (1) The amendments made by this section (except the amend-
inent made by subsection (i), and the amendment made by subsection 
(g) to section 209(i) of the Social Security Act) shall apply only in 
Mie case of a man who attains (or would attain) age 62 after Decem-
ber 1974. The amendment made by subsection (i), and the amend-
ment made by subsection (g) to section 209(i) of the Social Security 
Act, shall apply only with respect to payments after 1974. 
(2) In the case of a man who attains age 62 prior to 1975, the num-
bev of his elapsed years for purposes of section 215(b) (3; of the 
Social Security Act shall be equal to (A) the number determined 
under such section as in effect on September 1, 1972, or (B) if less, 
the number determined as though he attained age 65 in 1975, except 
that monthly benefits under title I I of the Social Security Act for 
months prior to January 1973 payable on the basis of his wages and 
self-employment income shall be determined as though this section 
had not been enacted. 
(3) (A) In the case of a man who attains or will attain age 62 in 
1973, the figure "65" in sections 214(a) (1), 223(c) (1) (A), and 216(i) 
(3) (A) of the Social Security Act shall be deemed to read "64". 
(B) In the case of a man who attains or will attain age 62 in 1974, 
the figure "65" in sections 214(a) (1), 223(c) (1) (A), and 216(i) (3) 
(A) of the Social Security Act shall be deemed to read "63". 
42 u s e 409, 
416. 
42 u s e 415 
note. 
70 Stat. 839. 
26 u s e 3121. 
Effective dates^ 
Ante, p. 1340. 
53 Stat. 1362. 
42 u s e 401. 
Ante, p. 
Supra. 
1340; 
LIBERALIZATIOX AXI) AUTOMATIC ADJUSTMENT OF EARXIXGS TEST 
SEC. 105. (a)(1) Paragraphs (1) and (4) (B) of section 203(f) of 
the Social Security Act ai'e each amended by striking out "$140" and 
inserting in lieu thereof "$175 or the exempt amount as determined 
under paragraph (8)". 
(2) Paragraph (1) (A) of section 203(h) of such Act is amended by 
striking out "$140" and inserting in lieu thereof "$175 or the exempt 
amount as determined under subsection (f) (8)". 
(3) Paragraph (3) of section 203(f) of such Act is amended to 
read as follows: 
"(3) For purposes of parairraph (1) and subsection (h), an 
individual's excess earnings for a taxable year shall be 50 per 
centum of his earnings for such year in excess of the product of 
$175 or the exempt amount as determined under paragraph (8), 
multiplied by the number of months in such year. The excess earn-
ings as derived under the preceding sentence, if not a multiple of 
$1, shall be reduced to the next lower multiple of $1." 
(b) Section 203(f) of such Act is amended by adding at the end 
thereof the following new paragraph : 
42 u s e 403. 
Post, p. 1342. 
1342 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
Ante, p. 1334. 
Publication in 
Federal Register. 
Ante, p. 417. 
Estimated in-
crease, notice 
to congressional 
committees. 
Effective date. 
"(8) (A) Whenever the Secretary pursuant to section 215 (i) 
increases benefits effective with the first month of the calendar year 
following a cost-of-living computation quarter, he shall also deter-
mine and publish in the Federal Register on or before November 1 
of the calendar year in which such quarter occurs (along with the 
publication of such benefit increase as required by section 215 (i) (2) 
(D)) a new exempt amount which shall be effective (unless such new 
exempt amount is prevented from becoming effective by subparagraph 
(C) of this paragraph) with respect to any individual's taxable year 
which ends with the close of or after the calendar year with the first 
month of which such benefit increase is effective (or, in the case of an 
individual who dies during such calendar year, w4th respect to such 
individual's taxable year which ends, upon his death, during such 
year. 
"(B) The exempt amount for each month of a particular taxable 
year shall be whichever of the following is the larger— 
"(i) the exempt amount which was in effect with respect to 
months in the taxable year in which the determination under sub-
paragraph (A) was made, or 
"(ii) the product of the exempt amount described in clause (i) 
and the ratio of (I) the average of the taxable wages of all 
employees as reported to the Secretary for the first calendar quar-
ter of the calendar year in which the determination under subpara-
graph (A) was made to (II) the average of the taxable wages of 
all employees as reported to the Secretary for the first calendar 
quarter of 1973, or, if later, the first calendar quarter of the most 
recent calendar year in which an increase in the contribution and 
benefit base was enacted or a determination resulting in such an 
increase was made under section 230(a), with such product, if 
not a multiple of $10, being rounded to the next higher multiple 
of $10 where such product is a multiple of $5 but not of $10 and 
to the nearest multiple of $10 in any other case. 
Whenever the Secretary determines that the exempt amount is to be 
increased in any year under this paragraph, he shall notify the House 
Committee on Ways and Means and the Senate Committee on Finance 
no later than August 15 of such year of the estimated amount of such 
increase, indicating the new exempt amount, the actuarial estimates of 
the effect of the increase, and the actuarial assumptions and methodol-
ogy used in preparing such estimates. 
"(C) Notwithstanding the determination of a new exempt amount 
by the Secretary under subparagraph (A) (and notwithstanding any 
publication thereof under such subparagraph or any notification 
thereof under the last sentence of subparagraph (B)), such new 
exempt amount shall not take effect pursuant thereto if during the 
calendar year in which such determination is made a law increasing 
the exempt amount or providing a general benefit increase under this 
title (as defined in section 215(i) (3)) is enacted." 
(c) The amendments made by this section shall apply with respect 
to taxable years ending after December 1972. 
EXCLUSION 
OF 
CERTAIN 
EARNINGS 
IN 
YEAR 
OF 
ATTAINING 
AGE 
72 
SEC. 106. (a) The first sentence of section 203(f) (3) of the Social 
Security Act (as amended by section 105(a) (3) of this Act) is further 
amended by inserting before the period at the end thereof the follow-
ing : ", except that, in determining an individual's excess earnings for 
the taxable year in which he attains age 72, there shall be excluded 
any earnings of such individual for the month in which he attains such 
age and any subsequent month (with any net earnings or net loss from 
self-employment in such year being prorated in an equitable manner 
under regulations of the Secretary)". 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1343 
(b) The amendment made by subsection (a) shall apply with 
Effective date. 
respect to taxable years ending after December 1972. 
REDUCED BENEFITS FOR WIDOWERS AT AGE 60 
SEC. 107. (a) Section 202(f) of the Social Security Act (as amended 
by section 102(b) of this Act) is further amended— 
(1) by striking out "age 62" each place it appears in sub-
paragraph (B) of paragraph (1) and in paragraph (6) and 
inserting in lieu thereof "age 60"; 
(2) by striking out "or the third month" in the matter follow-
ing subparagraph (G) in paragraph (1) and inserting in lieu 
thereof "or, if he became entitled to such benefits before he attained 
age 60, the third month"; and 
-^* "^^'' '^ 
(3) by striking out "the age of 62" in paragraph (5) and insert-
ing in lieu thereof "the age of 60". 
(b) (1) The last sentence of section 203(c) of such Act (as amended 
by section 102(c) (1) of this Act) is further amended by striking out 
"age 62" and inserting in lieu thereof "age 60". 
(2) Clause (D) of section 203(f)(1) of such Act as amended by 
section 102(c)(2) of this Act) is further amended by striking out 
^"'®' P- ^336. 
"age 62" and inserting in lieu thereof "age 60". 
(3) Section 222(b)(1) of such Act is amended by striking out 
42 use 422. 
"a widow or surviving divorced wife who has not attained age 60, a 
widower who has not attained age 62" and inserting in lieu thereof 
"a widow, widower or surviving divorced wife who has not attained 
age 60". 
(4) Section 222(d) (1) (D) of such Act is amended by striking out 
si stat. 832; 
"age 62" each place it appears and inserting in lieu thereof "age 60". 
°^'' ^' ^^^°' 
(5) Section 225 of such Act is amended by striking out "age 62" and 
''^ use 425. 
inserting in lieu thereof "age 60". 
(c) The amendments made by this section shall apply with respect 
to monthly benefits under title I I of the Social Security Act for 
months after December 1972, except that in the case of an individual 
who was not entitled to a monthly benefit under title I I of such Act 
for December 1972 such amendments shall apply only on the basis of 
an application filed in or after the month in which this Act is enacted. 
ENTITLEMENT TO C H I L D ' S INSURANCE BENEFITS BASED ON DISABILITY 
WHICH BEGAN BETWEEN AGE 18 AND 2 2 
SEC. 108. (a) Clause (ii) of section 202(d)(1)(B) of the Social 
Security Act is amended by striking out "which began before he 
attained the age of eighteen" and inserting in lieu thereof "which 
began before he attained the age of 22". 
(b) Subparagraphs (F) and (G) of section 202(d) (1) of such Act 
are amended to read as follows: 
"(F) if such child was not under a disability (as so defined) at 
the time he attained the age of 18, the earlier of— 
"(i) the first month during no part of which he is a full-
time student, or 
" (ii) the month in which he attains the age of 22, 
but only if he was not under a disability (as so defined) in such 
earlier month; or 
"(G) if such child was under a disability (as so defined) at the 
time he attained the age of 18, or if he was not under a disability 
(as so defined) at such time but was under a disability (as so 
defined) at or prior to the time he attained (or would attain) the 
Effective date. 
53 Stat. 1362. 
42 use 401. 
79 Stat. 370. 
42 use 402. 
1344 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
.
5
,
»
B
h .iv«}ti»«H 
ti ' age of 22, the third month following the month in which he ceases 
to be under such disability or (if later) the earlier of— 
"(i) the first month, during no part of which he is a full-
time student, or 
" (ii) the month in which he attains the age of 22, 
but only if he was not under a disability (as so defined) in such 
earlier month." 
Ante, p. 1343. 
(c) Sectiou 202(d) (1) of such Act is further amended by adding 
at the end thereof the following new sentence: "No payment under 
this paragraph may be made to a child who would not meet the 
42 us^c'42^3 
definition of disability in section 223(d) except for paragraph (1) (B) 
thereof for any month in which he engages in substantial gainful 
activity." 
42 use 402. 
(d) Section 202(d) (6) of such Act is amended by striking out "in 
which he is a full-time student and has not attained the age of 22" 
and all that follows and inserting in lieu thereof "in which he— 
"(A)(i) is a full-time student or is under a disability (as 
defined in section 223(d)), and (ii) had not attained the age of 
22, or 
•v! 
"(B) is under a disability (as so defined) which began before 
... ) . 
vnk 
the close of the 84th month following the month in which his 
most recent entitlement to child's insurance benefits terminated 
;' - - = 
because he ceased to be under such disability, 
but only if he has filed application for such reentitlement. Such 
reentitlement shall end with the month preceding whichever of the 
following first occurs: 
"(C) the first month in which an event specified in paragraph 
(1) (D) occurs; 
"(D) the earlier of (i) the first month during no part of which 
; . 
he is a full-time student or (ii) the month in which he attains 
the age of 22, but only if he is not under a disability (as so defined) 
in such earlier month; or 
"(E) if he was under a disability (as so defined), the third 
month following the month in which he ceases to be under such 
disability or (if later) the earlier of— 
"(i) the first month during no part of which he is a full-
time student, or 
" (ii) the month in which he attains the age of 22." 
(e) Section 202 (s) of such Act is amended— 
(1) by striking out "which began before he attained such age" 
in paragraph (1); and 
(2) by striking out "which began before such child attained 
the age of 18" in paragraphs (2) and (3). 
Effective dates. 
(f) xiie amendments made by this section shall apply only with 
respect to monthly benefits under section 202 of the Social Security 
Act for months after December 1972 except that in the case of an 
individual who was not entitled to a monthly benefit under such 
section 202 for December 1972 such amendments shall apply only on 
the basis of an application filed after September 30,1972. 
(g) Where— 
(1) one or more persons are entitled (without the application 
of sections 202(j) (1) and 223(b) of the Social Security Act) to 
monthly benefits under section 202 or 223 of such Act for Decem-
ber 1972 on the basis of the wages and self-employment income 
of an insured individual, and 
(2) one or more persons (not included in paragraph (1)) are 
entitled to monthly benefits under such section 202 or 223 for 
January 1973 solely by reason of the amendments made by this 
section on the basis of such wages and self-employment income, 
and 
Post. p. 1351. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1345 
(3) the total of benefits to which all persons are entitled under 
such sections 202 and 223 on the basis of such wages and self- 
42 use 402, 
employment income for January 1973 is reduced by reason of '^^^' 
section 203(a) of such Act as amended by this Act (or would, 
^"'^' P- '*^^-
but for the penultimate sentence of such section 203(a), be so 
reduced), 
then the amount of the benefit to which each person referred to in 
paragraph (1) of this subsection is entitled for months after Decem-
ber 1972 shall be adjusted, after the application of such section 203 (a), 
to an amount no less than the amount it would have been if the person 
or persons referred to in paragraph (2) of this subsection were not 
entitled to a benefit referred to in such paragraph (2). 
' 
' T : 
CONTINUATION OF C H I L D ' S BENEFITS THROUGH END OF SEMESTER 
SEC. 109. (a) Paragraph (7) of section 202(d) of the Social Security 
Act is amended by adding at the end thereof the following new sub- 
^^ us c 402 
paragraph: 
"(D) A child who attains age 22 at a time when he is a full-time 
student (as defined in subparagraph (A) of this paragraph and 
without application of subparagraph (B) of such paragraph) 
but has not (at such time) completed the requirements for, or 
received, a degree from a four-year college or university shall be 
deemed (for purposes of determining whether his entitlement to 
benefits under this subsection has terminated under paragraph 
(1) (F) and for purposes of determining his initial entitlement to 
such benefits under clause (i) of paragraph (1) (B)) not to have 
attained such age until the first day of the first month following 
the end of the quarter or semester m which he is enrolled at such 
time (or, if the educational institution (as defined in this para-
graph) in which he is enrolled is not operated on a quarter or 
semester system, until the first day of the first month following 
the completion of the course in which he is so enrolled or until 
the first day of the third month beginning after such time, which-
ever first occurs)." 
(b) The amendment made by subsection (a) shall apply only with 
Effective date. 
respect to benefits payable under title I I of the Social Security Act for 
53 stat. 1362. 
months after December 1972. 
C H I L D ' S BENEFITS IN CASE OF CHILD ENTITLED ON MORE THAN ONE 
WAGE RECORD 
SEC. 110. (a) Section 202(k) (2) (A) of the Social Security Act is 
64 stat. 482. 
amended to read as follows: 
"(2) (A) Any child who under the preceding provisions of this sec-
tion is entitled for any month to child's insurance benefits on the wages 
and self-employment income of more than one insured individual shaJll, 
notwithstanding such provisions, be entitled to only one of such child's 
insurance benefits for such month. Such child's insurance benefits for 
such month shall be the benefit based on the wages and self-employ-
ment income of the insured individual who has the greatest primary 
insurance amount, except that such child's insurance benefits for such 
month shall be the largest benefit to which such child could be entitled 
under subsection (d) (without the application of section 203(a)) or 
subsection (m) if entitlement to such benefit would not, with respect to 
any person, result in a benefit lower (after the application of section 
203 (a)) than the benefit which would be applicable if such child were 
entitled on the wages and self-employment income of the individual 
with the greatest primary insurance amount. Where more than one 
1346 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
child is entitled to child's insurance benefits pursuant to the preceding 
provisions of this paragraph, each such child who is entitled on the 
wages and self-employment income of the same insured individuals 
shall be entitled on the wages and self-employment income of the same 
such insured individual." 
Effective date. 
(jj) The amendment made by subsection (a) shall apply only with 
53 Stat. 1362. 
rcspect to monthly benefits under title I I of the Social Security Act 
42 use 401. 
fQj. months after December 1972. 
Ante, 
pp. 1343-
1345. 
ADOPTIONS BY DISABILITY AND OLD-AGE INSURANCE BENEFICIARIES 
SEC. 111. (a) Section 202(d) of the Social Security Act is amended 
by striking out paragraphs (8) and (9) and inserting in lieu thereof 
the following new paragraph: 
" (8) In the case of— 
"(A) an individual entitled to old-age insurance benefits (other 
than an individual referred to in subparagraph (B)), or 
"(B) an individual entitled to disability insurance benefits, or 
an individual entitled to old-age insurance benefits who was 
entitled to disability insurance benefits for the month preceding 
the first month for which he was entitled to old-age insurance 
benefits, 
a child of such individual adopted after such individual became 
entitled to such old-age or disability insurance benefits shall be deemed 
not to meet the requirements of clause (i) or (iii) of paragraph (1) (C) 
unless such child— 
"(C) is the natural child or stepchild of such individual 
(including such a child who was legally adopted by such indi-
vidual), or 
"(D) (i) was legally adopted by such individual in an adop-
tion decreed by a court of competent jurisdiction within the 
United States, 
"(ii) was living with such individual in the United States 
and receiving at least one-half of his support from such individual 
(I) if he is an individual referred to m subparagraph (A), for 
the year immediately before the month in which such individual 
became entitled to old-age insurance benefits or, if such individual 
had a period of disability which continued until he had become 
entitled to old-age insurance benefits, the month in which such 
period of disability began, or (II) if he is an individual referred 
to in subparagraph (B), for the year immediately before the 
month in which began the period of disability of such individual 
which still exists at the time of adoption (or, if such child was 
adopted by such individual after such individual attained age 
65, the period of disability of such individual which existed in 
the month preceding the month in which he attained age 65), or 
the month in which such individual became entitled to disability 
insurance benefits, and 
" (iii) had not attained the age of 18 before he began living with 
such individual. 
In the cuse of a child who was born in the one-year period during which 
such child must have been living with and receiving at least one-half 
of his support from such individual, such child shall be deemed to 
meet such requirements for such period if, as of the close of such 
period, such child has lived with such individual in the United States 
and received at least one-half of his support from such individual 
for substantially all of the period which begins on the date of 
birth of such child." 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1347 
(b) The amendment made by subsection (a) shall apply with respect 
Effective date. 
to monthly benefits payable under title I I of the Social Security Act 
^3 stat. i362. 
for months after December 1967 on the basis of an application filed in 
'^^ "^^ "
* 
or after the month in which this Act is enacted; except that such 
amendments shall not apply with respect to benefits for any month 
before the month in which this Act is enacted unless such application 
is filed before the close of the sixth month after the month in which 
this Act is enacted. 
CHILD'S INSURANCE BENEFITS NOT TO BE TERMINATED BY REASON OF 
ADOPTION 
SEC. 112. (a) Paragraph (1)(D) of section 202(d) of the Social 
Security Act is amended by striking out "marries" and all that fol- 
H use 402 / 
lows and inserting in lieu thereof "or marries,". 
(b) The amendment made by subsection (a) shall apply only with 
Effective date. 
respect to monthly benefits under title I I of the Social Security Act 
for months beginning with the month in which this Act is enacted. 
(c) Any child— 
(1) whose entitlement to child's insurance benefits under sec-
tion 202 (d) of the Social Security Act was terminated by reason of 
his adoption, prior to the date of the enactment of this Act, and 
(2) who, except for such adoption, would be entitled to child's 
insurance benefits under such section for a month after the month 
in which this Act is enacted, 
may, upon filing application for child's insurance benefits under the 
Social Security Act after the date of enactment of this Act, become 
reentitled to such benefits; except that no child shall, by reason of the 
enactment of this section, become reentitled to such benefits for any 
month prior to the month after the month in which this Act is enacted. 
BENEFITS FOR CHILD BASED ON EARNINGS RECORD OF GRANDPARENT 
SEC. 113. (a) The first sentence of section 216(e) of the Social 
Security Act is amended— 
74 stat. 950. 
(1) by striking out "and" at the end of clause (1), and 
42 use 4i6. 
(2) bv inserting immediately before the period at the end there-
of the following: ", and (3) a person who is the grandchild or 
stepgrandchild of an individual or his spouse, but only if (A) 
there was no natural or adoptive parent (other than such a par-
ent who was under a disability, as defined in section 223(d)) of 
^2 use 423. 
such person living at the time (i) such individual became entitled 
to old-age insurance benefits or disability insurance benefits 
or died, or (ii) if such individual had a period of disability 
which continued until such individual became entitled to old-
age insurance benefits or disability insurance benefits, or died, at 
the time such period of disability began, or (B) such person was 
legally adopted after the death of such individual by such indi-
vidual's surviving spouse in an adoption that was decreed by a 
court of competent jurisdiction within the United States and such 
person's natural or adopting parent or stepparent was not liv-
ing in such individual's household and making regular contribu-
tions toward such person's support at the time such individual 
died", 
(b) Section 202(d) of such Act (as amended by section 111 of this 
Act) is further amended by adding at the end thereof the following 
'^"'®' P- ^^'*^-
new paragraph: 
1348 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
"(9) (A) A child who is a child of an individual under clause (3) 
Ante, p. 1347. 
^j ^j^^, ^^^ sentence of section 216(e) and is not a child of such indi-
vidual under clause (1) or (2) of such first sentence shall be deemed 
not to be dependent on such individual at the time specified in sub-
42 use 416. 
paragraph (1) (C) of this subsection unless (i) such child was living 
with such individual in the United States and receiving at least one-
half of his support from such individual (I) for the year immediately 
before the month in which such individual became entitled to old-age 
insurance benefits or disability insurance benefits or died, or (II) if 
such individual had a period of disability which continued until he 
had become entitled to old-age insurance benefits, or disability insur-
ance benefits, or died, for the year immediately before the month in 
which such period of disability began, and (ii) the period during 
which such child was living with such individual began before the 
child attained age 18. 
"(B) In the case of a child who was born in the one-year period 
during which such child must have been living with and receiving at 
least one-half of his support from such individual, such child shall be 
deemed to meet such requirements for such period if, as of the close of 
such period, such child has lived with such individual i^ the United 
States and received at least one-half of his support from such indi-
vidual for substantially all of the period which begins on the date 
of such child's birth." 
Effective date. 
(g) 'j'j^g amendments made by this section shall apply with respect 
S3 Stat. 1362. 
to monthly benefits payable under title I I of the Social Security Act 
42 use 401. 
^Qj. jjionths after December 1972, but only on the basis of applications 
filed on or after the date of the enactment of this Act. 
ELIMINATION OF SUPPORT REQUIREMENT AS CONDITION OF BENEFITS FOR 
DIVORCED AND SURVIVING DIVORCED WIVES 
II ITc 4o'2.' 
^ ^ ^ - 1 ^ ^ - (^) Section 202 (b)(1) of the Social Security Act is further 
amended— 
(1) by adding "and" at the end of subparagraph (C), 
V
i
? '.! ^, 
(2^ by striking out subparagraph (D),and 
(3) by redesignating subparagraphs (E) through (L) as sub-
paragraphs (D) through (K), respectively, 
(b) (1) Section 202(e) (1) of such Act (as amended by section 102 
Ante, p. 1335. 
(a) of this Act) is further amended— 
(A) by adding "and" at the end of subparagraph (C), 
(B) by striking out subparagraph (D), and 
(C) by redesignating subparagraphs (E) through (G) as sub-
paragraphs (D) through (F),respectively. 
Post ^*^*is^^o' 
(^^ Section 202 (e]) (6) of such Act is amended by striking out "para-
°^ ' ^' 
' 
graph (1) (G)" and inserting in lieu thereof "paragraph (1) (F)". 
79 Stat. 378. 
(c) Section 202(g) (1) (F) of such Act is amended oy striking out 
clause (i), and by redesignating clauses (ii) and (iii) as clauses (i) 
and (ii), respectively. 
Effective date. 
(d) The amendments made by this section shall apply only with 
respect to benefits payable under title I I of the Social Security Act for 
months after December 1972 on the basis of applications filed on or 
after the date of enactment of this Act. 
(e) Where— 
(1) one or more persons are entitled (without the application 
r2°usc'423^^' 
^^ sections 202(j) (1) and 223(b) of the Social Security Act) to 
monthly benefits under section 202 or 223 of such Act for Decem-
ber 1972 on the basis of the wages and self-employment income of 
an insured individual, and 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1349 
(2) one or more persons (not included in paragraph (1)) are 
entitled to monthly benefits under such section 202(g) as a sur-
viving divorced mother (as defined in section 216(d) (3)) for a 
month after December 1972 on the basis of such wages and self-
employment income, and 
(3) the total of benefits to which all persons are entitled under 
such section 202 and 223 on the basis of such wages and self-
employment income for any month after December 1972 is reduced 
by reason of section 203(a) of such Act as amended by this Act 
(or would, but for the penultimate sentence of such section 203 (a), 
be so reduced), 
then the amount of the benefit to which each person referred to in 
paragraph (1) of this subsection is entitled beginning with the first 
month after December 1972 for which any person referred to in para-
graph (2) becomes entitled shall be adjusted, after the application of 
such section 203(a), to an amount no less than the amount it would 
have been if the person or persons referred to in paragraph (2) of this 
subsection were not entitled to a benefit referred to in such paragraph 
Ante, p. 1348. 
79 Stat. 377. 
42 u s e 416. 
42 u s e 402, 
423. 
Ante, pp. 1334, 
1340; 
Post, 
p. 1370. 
WAIVER OF DURATION-OF-RELATIONSHIP REQUIREMENT FOR W^DOW, WID-
OWER, OR STEPCHILD I N CASE OF REMARRIAGE TO T H E SAME INDIVIDUAL 
SEC. 115. (a) The heading of section 216(k) of the Social Security 
Act is amended by adding at the end thereof ", or in Case of Remar-
riage to the Same Individual". 
(b) Section 216(k) of such Act is amended by striking out "if his 
death—" and all that follows and inserting in lieu thereof "if— 
"(1) his death— 
"(A) is accidental, or 
^ 
"(B) occurs in line of duty while he is a member of a uni-
formed service serving on active duty (as defined in section 
210(1) (2)), 
and he would satisfy such requirement if a three-month period 
were substituted for- the nine-month period, or 
"(2) (A) the widow or widower of such individual had been 
previously married to such individual and subsequently divorced 
and such requirement would have been satisfied at the time of 
such divorce if such previous marriage had been terminated by 
the death of such individual at such time instead of bv divorce; or 
"(B) the steochild of such individual had been the stepchild 
of such individual during a previous marriage of such step-
child's parent to such individual which ended in divorce and 
such requirement would have been satisfied at the time of such 
divorce if such previous marriage had been terminated by the 
death of such individual at such time instead of by divorce; 
except that this subsection shall not apply if the Secretary determines 
that at the time of the marriage involved the individual could not 
have reasonably been expected to live for nine months. For purposes of 
paragraph (1) (A) of this subsection, the death of an individual is 
accidental if he receives bodily injuries solely through violent, exter-
nal, and accidental means and, as a direct result of the bodily injuries 
and indej)endently of all other causes, loses his life not later than 
three months after the day on which he receives such bodily injuries."' 
(c) The amendments made by this section shall apply only with 
i-espect to benefits payable under title II of the Social Security Act 
for months after December 1972 on the basis of applications filed in 
or after the month in which this Act is enacte<l. 
81 Stat. 866; 
Post, p. 1370. 
42 u s e 416. 
42 u s e 410. 
Effective date. 
53 Stat. 1362. 
42 u s e 401. 
1350 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
REDUCTION FROM 6 TO 5 MONTHS OP WAITING PERIOD FOR DISABILITT 
BENEFITS 
42 use 423. 
SEC. 116. (a) Section 223(c)(2) of the Social Security Act is 
amended— 
(1) by striking out "six" and inserting in lieu thereof "five", 
and 
(2) by striking out "eighteenth" each place it appears and 
inserting in lieu thereof "seventeenth". 
Ante,p.i348. 
(b) Scction 202 (e)(6) of such Act is amended— 
(1) by striking out "six" and inserting in lieu thereof "five", 
(2) by striking out "eighteenth" and inserting in lieu thereof 
"seventeenth", and 
(3) by striking out "sixth" and inserting in lieu thereof "fifth". 
81 Stat. 830. 
(c) Scctlou 202 (f) (7) of such Act is amended— 
4 9 i m f ^ 4 0 9 
v / \ / 
(1) by striking out "six" and inserting in lieu thereof "five", 
(2) by striking out "eighteenth" and inserting in lieu thereof 
"seventeenth", and 
(3) by striking out "sixth" and inserting in lieu thereof "fifth". 
79 Stat. 367. 
(d) Sectiou 216(1) (2) (A) of such Act is amended by striking out 
42 use 416. 
UQ„ ^^^ inserting in lieu thereof "five". 
(e) The amendments made by this section shall be effective with 
respect to applications for disability insurance benefits under section 
223 of the Social Security Act, applications for widow's and wid-
ower's insurance benefits based on disability under section 202 of such 
Act, and applications for disability determinations under section 216 
(i) of such Act, filed— 
(1) in or after the month in which this Act is enacted, or 
(2) before the month in which this Act is enacted if— 
(A) notice of the final decision of the Secretary of Health, 
Education, and Welfare has not been given to the applicant 
before such month, or 
(B) the notice referred to in subparagraph (A) has been 
so given before such month but a civil action with respect to 
such final decision is commenced under section 205(g) of the 
42 use 405. 
Social Security Act (whether before, in, or after such month) 
and the decision in such civil action has not become final 
before such month; 
except that no monthly benefits under title I I of the Social Security 
53 sta^. 1362. 
Act shall be payable or increased by reason of the amendments made 
^o .,o^ ^n, 
^^ ^^^^ section for any month before January 1973. 
ELIMINATION OF DISABILITY INSURED-STATUS REQUIREMENT OF SUBSTAN-
TIAL RECENT COVERED WORK IN CASE OF INDIVIDUALS WHO ARE BLIND 
SEC. 117. (a) The first sentence of section 216(i) (3) of the Social 
Security Act is amended by striking out all that follows subparagraph 
(B) and inserting in lieu thereof the following: 
"except that the provisions of subparagraph (B) of this paragraph 
shall not apply in the case of an individual who is blind (within the 
meaning of 'blindness' as defined in paragraph (1))." 
(b) Section 223(c)(1) of such Act is amended by striking out 
"coverage." in subparagraph (B) (ii) and inserting in lieu thereof 
"coverage;", and by striking out "For purposes" and inserting in lieu 
thereof the following: 
"except that the provisions of subparagraph (B) of this para-
graph shall not apply in the case of an individual who is blind 
(within the meaning of 'blindness' as defined in section 216(i) 
(1)). For purposes". 
42 use 401. 
42 use 416. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1351 
(c) The amendments made by this section shall be effective with 
Effective dates. 
respect to applications for disability insurance benefits under section 
223 of the Social Security Act, and for disability determinations under 
^^^^^^ ''"341 
section 216 (i) of such Act, 
filed— 
1350, infra. 
(1) in or after the month in which this Act is enacted, or 
(2) before the month in which this Act is enacted if— 
(A) notice of the final decision of the Secretary of Health, 
Education, and Welfare has not been given to the applicant 
before such month; or 
(B) the notice referred to in subparagraph (A) has been 
so given before such month but a civil action with respect 
to such final decision is commenced under section 205(g) of 
the Social Security Act (whether before, in, or after such 
42 use 405. 
month) and the decision in such civil action has not become 
final before such month; 
except that no monthly benefits under title I I of the Social Security 
Act shall be payable or increased by reason of the amendments made 
by this section for months before January 1973. 
53 Stat. 1362. 
42 u s e 401. 
APPLICATIONS FOR DISABILITY INSURANCE BENEFITS FILED AFTER DEATH 
OF INSURED INDIVIDUAL 
SEC. 118. (a) (1) Section 223(a) (1) of the Social Security Act is 
^2 use 423. 
amended by adding at the end thereof the following new sentence: 
''In the case of a deceased individual, the requirement of subpara-
graph (C) may be satisfied by an application for benefits filed with 
respect to such individual within 3 months after the month in which 
he died." 
(2) Section 223(a) (2) of such Act is amended by striking out "he 
>!"'«' P- '340. 
filed his application for disability insurance benefits and was" and 
inserting in lieu thereof "the application for disability insurance 
benefits was filed and he was". 
(3) The third sentence of section 223(b) of such Act is amended by 
striking out "if he files such application" and inserting in lieu thereof 
,^ 
"if such application is filed". 
(4) Section 223(c)(2)(A) of such Act is amended by striking 
^^'e, p. 1350. 
out "who files such application" and inserting in lieu thereof "with 
respect to whom such application is filed". 
(b) Section 216(i) (2) (B) of such Act is amended by adding at 
^^ use 4i6. 
the end thereof the following new sentence: "In the case of a deceased 
individual, the requirement of an application under the preceding 
sentence may be satisfied by an application for a disability determina-
tion filed with respect to such individual within 3 months after the 
month in which he died." 
(c) The amendments made by this section shall apply in the case 
Effective dates. 
of deaths occurring after December 31, 1969. For purposes of such 
amendments (and for purposes of sections 202(j) (1) and 223(b) of 
the Social Security Act), any application with respect to an individual 
^^ "^^ '*°^' 
Avhose death occurred after December 31, 1969, but before the date of 
the enactment of this Act which is filed in, or within 3 months after the 
month in which this Act is enacted shall be deemed to have been filed 
in the month in which such death occurred. 
82-081 0-73 
1352 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
. . . 
. ; 
W O R K M E N ' S C O M P E X S A T I O X OFFSET FOR DISABILITY INSURANCE 
BENEFICIARIES 
SEC. Hi), (a) The next to last sentence of section 224(a) of tlie 
42 use 424a. 
Social Secui'lty Act is amended— 
(1) by striking out "larger'' and inserting in lieu thereof 
"largest", 
(2) by striking out "or" before "(B)'', and 
(8) by inserting before the period at the end thereof the follow-
ing: ", or (C) one-twelfth of the total of his wages and self-
employment income (computed without regard to the limitations 
Ante, p. 417, 
Specified in sections 209(a) and 211(b) (1)) for the calendar year 
^^^- 
in which he had the highest such wages and income during the 
period consisting of the calendar year in which he became dis-
42 use 423. 
abled (as defined in section 223(d)) and the five years preceding 
that year". 
.. ; i . V 
(b) The last sentence of section 224(a) of such Act is amended by 
striking out "clause (B)" and inserting in lieu thereof "clauses (B) 
and(C)". 
Effective date. 
(g) Tlic amendments made by subsections (a) and (b) shall apply 
with respect to monthly benefits under title I I of the Social Security 
53 Stat. 1362. 
Act for moutlis after December 1972. 
42 u s e 401. 
WAGE CREDITS FOR MEMBERS OF THE ITNIFORMED SERVICES 
Effective date. 
81 Stat. 833. 
g^^, 120. (a) Subscctiou 229(a) of the Social Security Act ia 
42 u s e 429. 
J :\ 
' 
*
^ 
amended— 
(1) by striking out "after December 1967" and inserting in lieu 
^; . , .,,«. 
thereof "after December 1972"; 
(2) by striking out "after 1967" and inserting in lieu thereof 
"after 1956"; and 
(3) by striking out all that follows "(in addition to the wages 
actually paid to him for such service)" and inserting in lieu 
thereof "of $300." 
(b) The amendments made by subsection (a) shall apply with 
.. 
. 
, 
respect to monthly benefits under title II of the Social Security Act 
for months after December 1972 and with respect to lump-sum death 
payments under such title in the case of deaths occurring after 
December 1972 except that, in the case of any individual who is entitled, 
on the basis of the wages and self-employment income of any indi-
42 use 429. 
vidual to whom section 229 of such Act applies, to monthly benefits 
42 use 401. 
under title I I of such Kct for the month in which this Act is enacted, 
such amendments shall apply (1) only if a written request for a 
recalculation of such benefits (by reason of such amendments) under 
42 use 415. 
the provisions of section 215 (bj and (d) of such Act, as in effect at 
the time such request is filed, is filed by such individual, or any other 
individual, entitled to benefits under such title I I on the basis of such 
jxi >?t. 
wages and self-employment income, and (2) only with respect to such 
benefits for months beginning with whichever of the following is 
later: January 1973 or the twelfth month before the month in which 
such request was filed. Recalculations of benefits as required to carry 
out the provisions of this section shall be made notwithstanding the 
provisions of section 215(f)(1) of the Social Security Act, and no 
such recalculation shall be regarded as a recomputation for purposes 
of section 215(f) of such Act. 
*a - !,v - o rw- S8 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
. 
1353 
O m O X A L DETERMINATION OF SELF-EMPLOYMENT EARNINGS 
SEC. 121. (a)(1) Section 211(a) of the Social Security Act is 
Post, pp. 1357. 
amended by adding at the end thereof the following neAv paragraph: ^^42^use 411. 
"The preceding sentence and clauses (i) through (iv) of the second 
preceding sentence shall also apply in the case of any trade or business 
(other than a trade or business specified in such second preceding 
sentence) which is carried on by an individual who is self-employed 
on a regular basis as defined in subsection (g), or by a partnership 
^"''•^• 
of which an individual is a member on a regular basis as defined in 
subsection (g), but only if such individual's net earnings from self-
employment in the taxable year as determined without regard to this 
sentence are less than $1,600 and less than 66% percent of the sum (in 
such taxable year) of such individual's gross income derived from 
, , ., 
all trades or businesses carried on by him and his distributive share 
of the income or loss from all trades or businesses carried on by all 
the partnerships of which he is a member; except that this sentence 
shall not apply to more than 5 taxable years in the case of any indi-
vidual, and m no case in which an individual elects to determine th6 
amount of his net earnings from self-employment for a taxable year 
under the provisions of tne two preceding sentences with respect to 
a trade or business to which the second preceding sentence applies and 
with respect to a trade or business to which this sentence applies shall 
such net earnings for such year exceed $1,600." 
(2) Section 211 of such Act is amended by adding at the end thereof 
the following new subsection: 
64 Stat. 502; 
72 Stat. 1036. 
"Regular Basis 
" (g) An individual shall be deemed to be self-employed on a regular 
basis in a taxable year, or to be a member of a partnership on a regular 
basis in such year, if he had net earnings from self-employment, as 
defined in the first sentence of subsection (a), of not less than $400 in 
at least two of the three consecutive taxable years immediately preced-
ing such taxable year from trades or businesses carried on by such 
individual or such partnership." 
(b)(1) Section 1402(a) of the Internal Revenue Code of 1954 135°^''^^-^^"' 
(relating to definition of net earnings from self-employment) is 
26 use 1402. 
amended by adding at the end thereof the following new paragraph: 
"The preceding sentence and clauses (i) through (iv) of the second 
preceding sentence shall also apply in the case of any trade or busi- 
,, ,_^'' 
ness (other than a trade or business specified in such second preceding 
sentence) which is carried on by an individual who is self-employed 
on a regular basis as defined in subsection (i), or by a partnership of 
which an individual is a member on a regular basis as defined in sub-
section (i), but only if such individual's net earnings from self-employ-
ment as determined without regard to this sentence in the taxable year 
are less than $1,600 and less than 66% percent of the sum (in such 
taxable year) of such individual's gross income derived from all trades 
or businesses carried on by him and his distributive share of the income 
or loss from all trades or businesses carried on by all the partnerships 
of which he is a member; except that this sentence shall not apply to 
more than 5 taxable years in the case of any individual, and in no case 
in which an individual elects to determine the amount of his net earn-
ings from self-employment for a taxable year under the provisions of 
the two preceding sentences with respect to a trade or business to which 
the second preceding sentence applies and with respect to a trade or 
business to which this sentence applies shall such net earnings for such 
year exceed $1,600." 
1354 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
68A Stat. 353; 
79 Stat. 391. 
26 u s e 1402. 
26 u s e 1401-
1403. 
Effective date. 
(2) Section 1402 of such Code (definitions relating to Self-Employ-
ment Contributions Act of 1954) is amended by adding at the end 
thereof the following new subsection: 
"Regular Basis 
"(i) An individual shall be deemed to be self-employed on a regu-
lar basis in a taxable year, or to be a member of a partnership on a 
regular basis in such year, if he had net earnings from self-employ-
ment, as defined in the first sentence of subsection (a), of not less than 
$400 in at least two of the three consecutive taxable years immediately 
preceding such taxable year from trades or businesses carried on by 
such individual or such partnership." 
(c) The amendments made by this section shall apply only with 
respect to taxable years beginning after December 31,1972. 
64 Stat. 492; 
!1 Stat. 935. 
42 u s e 409. 
68A Stat. 417; 
81 Stat. 934. 
26 u s e 3121. 
Effective date. 
PAYMENTS BY EMPLOYER TO SURVIVOR OR ESTATE OF FORMER EMPLOYEE 
SEC. 122. (a) Section 209 of the Social Security Act is amended by 
striking out "or" at the end of subsection (1), by striking out the 
period at the end of subsection (m) and inserting in lieu thereof "; 
or", and by inserting after subsection (m) the following new 
subsection: 
" (n) Any payment made by an employer to a survivor or the estate 
of a former employee after the calendar year in which such employee 
died." 
(b) Section 3121 (a) of the Internal Eevenue Code of 1954 (relating 
to definition of wages) is amended by striking out "or" at the end of 
paragraph (12), by striking out the period at the end of paragraph 
(13) and inserting in lieu thereof "; or", and by inserting after para-
graph (13) the following new paragraph: 
"(14) any payment made by an employer to a survivor or the 
estate of a former employee after the calendar year in which such 
employee died." 
(c) The amendments made by this section shall apply in the case 
of any payment made after December 1972. 
64 Stat. 494; 
68 Stat. 1052. 
42 u s e 410. 
Infra. 
Supra. 
26 u s e 3101. 
COVERAGE FOR VOW-OF-POVERTY MEMBERS OF RELIGIOUS ORDERS 
SEC. 123. (a) (1) Section 210(a) (8) (A) of the Social Security Act 
is amended by inserting before the semicolon at the end thereof the 
following: ", except that this subparagraph shall not apply to service 
performed by a member of such an order in the exercise of such duties, 
if an election of coverage under section 3121 (r) of the Internal Reve-
nue Code of 1954 is in effect with respect to such order, or with respect 
to the autonomous subdivision thereof to which such member belongs". 
(2) Section 3121(b) (8) (A) of the Internal Revenue Code of 1954 
(relating to definition of employment) is amended by inserting before 
the semicolon at the end thereof the following: ", except that this sub-
paragraph shall not apply to service performed by a member of such 
an order in the exercise of such duties, if an election of coverage under 
subsection (r) is in effect with respect to such order, or with respect to 
the autonomous subdivision thereof to which such meriiber belongs". 
(b) Section 3121 of such Code (definitions relating to Federal 
Insurance Contributions Act) is amended by adding at the end thereof 
the following new subsection: 
" (r) ELECTION OF COVERAGE BY RELIGIOUS ORDERS.— 
"(1) 
CERTIFICATE OF ELECTION BY ORDER.—A religious order 
whose members are required to take a vow of poverty, or any 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1355 
autonomous subdivision of such order, may file a certificate (in 
such form and manner, and with such official, as may be prescribed 
by regulations under this chapter) electing to have the insurance 
system established by title I I of the Social Security Act extended 
'^^ ^^^ '^'^^• 
to services performed by its monbers in the exercise of duties 
required by such order or such subdivision thereof. Such cer-
tificate of election shall provide that— 
" (A) such election of coverage by such order or subdivision 
shall be irrevocable; 
"(B) such election shall apply to all current and future 
members of such order, or in the case of a subdivision thereof 
to all current and future members of such order who belong 
to such subdivision; 
"(C) all services performed by a member of such an order 
or subdivision in the exercise of duties required by such order 
or subdivision shall be deemed to have been performed by 
such member as an employee of such order or subdivision; 
and 
"(D) the waoes of each member, upon which such order or 
subdivision shall pay the taxes imposed by sections 3101 and 
3111, will be del;ermined as provided in subsection (i) (4). 
^°«'' PP- ^362-
"(2) DEFINITION OF MEMBER.—For purposes of this subsection, 
a member of a religious order means any individual who is sub-
ject to a vow of poverty as a member of such order and Avho per-
forms tasks usually required (and to the extent usually required) 
of an active member of such order and who is not considered 
retired because of old age or total disability. 
"(3) EFFECTIVE DATE FOR ELECTION.— (A) A certificate of elec-
tion of coverage shall be in effect, for purposes of subsection (b) 
(8) (A) and for purposes of section 210(a) (8) (A) of the Social 
^ 
Security Act, for the period beginning with whichever of the ^"f^' P- I3S4. 
following may be designated by the order or subdivision thereof: 
"(i) the first day of the calendar quarter in which the 
certificate is filed, 
"(ii) the first day of the calendar quarter succeeding such 
quarter, or 
"(iii) the first day of anv calendar quarter preceding the 
calendar quarter in which the certificate is filed, except that 
such date may not be earlier than the first day of the twentieth 
calendar quarter preceding the quarter in which such certifi-
cate is filed. 
Whenever a date is designated imder clause (iii), the election 
shall apply to services performed before the quarter in which the 
certificate is filed only if the member performing such services 
was a member at the time such services were performed and is 
living on the first day of the quarter in which such certificate is 
filed. 
"(B) If a certificate of election filed pursuant to this subsection 
is effective for one or more calendar quarters prior to the quarter 
in which such certificate is filed, then— 
"(i) for purposes of computing interest and for purposes 
of section 6651 (relating to addition to tax for failure to file 26 use eesi. 
tax return), the due date for the return and payment of the 
tax for such prior calendar quarters resulting from the filing 
of such certificate shall be the last day of the calendar month 
following the calendar quarter in which the certificate is filed; 
and 
1356 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"(ii) the statutory period for the assessment of such tax 
shall not expire before the expiration of 3 years from such 
due date. 
"(4) 
COORDINATION WITH COVERAGE OF LAY EMPLOYEES.—Not-
withstanding the preceding provisions of this subsection, no cer-
tificate of election shall become effective with respect to an order 
or subdivision thereof, unless— 
""(A) if at the time the certificate of election is filed a cer-
tificate of waiver of exemption under subsection (k) is in 
effect with respect to such order or subdivision, such order or 
subdivision amends such certificate of waiver of exemption 
(in such foi-m and manner as may be prescribed by regulations 
made under this chapter) to provide that it may not be 
revoked, or 
"(B) if at the time the certificate of election is filed a 
certificate of waiver of exemption under such subsection is not 
• •
' in effect with i-espect to such order or subdivision, such order 
or subdivision files such certificate of waiver of exemption 
under the provisions of such subsection except that such 
certificate of waiver of exemption cannot become effective at 
" 
• 
; 
a later date than the certificate of election and such certificate 
of waiver of exemption must specify that such certificate of 
waiver of exemption may not be revoked. The certificate of 
> 
• 
waiver of exemption required under this subparagraph shall 
be filed notM'ithstandingthe provisions of subsection (k) (3)." 
Ante, p. 1354; 
(c) (1) Scctiou 209 of the Social Security Act is amended by adding 
Post, p. 1365. 
,^^ ^j^^ ^^^ thereof the following new paragraph: 
"Wages." 
"For purposes of this title, in any case where an individual is a 
member of a religious order (as defined in section 3121 (r) (2) of the 
Ante, p. 1354. 
Internal Revenue Code of 1954) performing service in the exercise 
of duties required by such order, and an election of coverage under 
section 3121 (r) of such (^ode is in effect with respect to such order or 
with respect to the autonomous subdivision thereof to which such 
member belongs, the term 'wages' shall, subject to the provisions of 
subsection (a) of this section, include as such individual's remunera-
tion for such service the fair market value of any board, lodging, 
clothing, and other perquisites furnished to such member by such order 
or subdivision thereof or by any other person or organization pur-
suant to an agreement with such order or subdivision, except that the 
amount included as such individuars i-emuneration under this para-
graph shall not be less than $100 a month.'' 
7o^stat.^878; 
(2) Sectiou 3121 (i) of the Internal Revenue Code of 1954 (relating 
26 use 3121. 
*
^
o computation of wages in certain cases) is amended by adding at 
the end thereof the following new paragraph: 
"Wages." 
"(4) 
SERVICE PERFORMED BY CERTAIN MEMBERS OF RELIGIOUS 
ORDERS.—For purposes of this chapter, in any case where an 
individual is a member of a religious order (as defined in subsec-
tion (r) (2)) performing service in the exercise of duties required 
by such order, and an election of coverage under subsection 
(r) is in effect with respect to such order or with respect to 
the autonomous subdivision thereof to which such member 
belongs, the term 'wages' shall, subject to the provisions of sub-
section (a)(1), include as such individual's remuneration for 
such service the fair market value of any board, lodging, cloth-
ing, and other pei-quisites furnished to such member by such 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1357 
order or subdivision thereof or by any other person or organiza-
tion pursuant to an agreement with such order or subdivision, 
except that the amount included as such individual's remuneration 
under this paragraph shall not be less than $100 a month." 
SELF-EMPLOYMENT INCOME OF CERTAIN INDIVIDUALS TEMPORARILY 
LIVING OUTSIDE T H E UNITED 
STATES 
SEC. 124. (a) Section 211 (a) of the Social Security Act is amended— 
^'^*^' P- ^^sa. 
(1^ by striking out "and" at the end of paragraph (8); 
(2) by striking out the period at the end of paragraph (9) and 
inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (9) the following new 
paragraph: 
" (10) In the case of an individual who has been a resident of 
the United States during the entire taxable year, the exclusion 
from gross income provided by section 911(a) (2) of the Internal 
Revenue Code of 1954 shall not apply." 
26 use 9i i. 
(b) Section 1402(a) of the Internal Revenue Code of 1954 (relat- 
Ante, p. 1353; 
ing to definition of net earnings from self-employment) is amended— ^°^'' ^' ^^^^• 
(1) by striking out "and" at the end of paragraph (9); 
(2) by striking out the period at the end of paragraph (10) 
and inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (10) the following new 
paragraph: 
"(11) in the case of an individual who has been a resident of 
the United States during the entire taxable year, the exclusion 
from gross income provided by section 911 (a) (2) shall not apply." 
(c) The amendments made by this section shall apply with respect 
Effective date. 
to taxable years beginning after December 31,1972. 
COVERAGE OF FEDERAL HOME LOAN BANK 
EMPLOYEES 
SEC. 125. (a) The provisions of section 210(a) (6) (B) (ii) of the 
Social Security Act and section 3121(b) (6) (B) (ii) of the Internal 
^2 use 4io. 
Revenue Code of 1954, insofar as they relate to service performed in 
the employ of a Federal home loan bank, shall be effective— 
(1) with respect to all service performed in the employ of a 
Federal home loan bank on and after the first day of the first 
calendar quarter which begins on or after the date of the enact-
ment of this Act; and 
(2) in the case of individuals who are in the employ of a Fed-
eral home loan bank on such first day, with respect to any service 
performed in the employ of a Federal home loan bank after the 
last day of the sixth calendar year preceding the year in which 
this Act is enacted; but this paragraph shall be effective only if 
an amount equal to the taxes imposed by sections 3101 and 3111 
of such Code with respect to the services of all such individuals ,,^°*'' PP- ^^^2-
performed in the employ of Federal home loan banks after the 
last day of the sixth calendar year preceding the year in which 
this Act is enacted are paid under the provisions of section 3122 
of such Code by July 1, 1973, or by such later date as may be pro-
vided in an agreement entered into before such date with the 
Secretary of the Treasury or his delegate for purposes of this 
paragraph, 
(b) Subparagraphs (A) (i) and (B) of section 104(i) (2) of the 
Repeal. 
Social Security Amendments of 1956 are repealed. 
42 use 410 
1364. 
Ante, p. 419. 
note. 
1358 
PUBLICLAW92-603-OCT. 30, 1972 
[86 STAT. 
POLICEMEX AND FIREMEN I N IDAHO 
. . 
42 use 418. 
SEC. 126. Section 218(p) (1) of the Social Security Act is amended 
by inserting "Idaho," after "Hawaii,". 
f , ^ 
^
.
< .,.. 
«,,,.. 
COVERAGE OF CERTAIN HOSPITAL EMPLOYEES I N N E W MEXICO 
SEC. 127. Notwithstanding any provisions of section 218 of the 
, 
Social Security Act, the Agreement with the State of New Mexico 
heretofore entered into pursuant to such section may at the option 
of such State be modified at any time prior to the first day of the 
fourth month after the month in which this Act is enacted, so as to 
apply to the services of employees of a hospital which is an integral 
part of a political subdivision to which an agreement under this section 
has not been made applicable, as a separate coverage group wdthin the 
meaning of section 218 (b) (5) of such Act, but only if such hospital has 
prior to 1966 withdrawn from a retirement system which had been 
applicable to the employees of such hospital. 
COVERAGE OF CERTAIN EMPLOYEES OF T H E GOVERNMENT OF GUAM 
42 use 410. 
SEC. 128. (a) Section 210(a)(7) of the Social Security Act is 
amended by striking out "or" at the end of subparagraph (C), by 
striking out the semicolon at the end of subparagraph (D) and insert-
ing in lieu thereof ", or", and by adding at the end thereof the follow-
ing new subparagraph: 
"(E) service performed in the employ of the Government 
of Guam (or any instrumentality which is wholly owned by 
such Government) by an employee properly classified as a 
- - 
• 3tvi; 
temporary or intermittent employee, if such service is not 
covered by a retirement system established by a law of Guam; 
except that (i) the provisions of this subparagraph shall not 
be applicable to services performed by an elected official or a 
member of the legislature or in a hospital or penal institution 
,, , ,, , 
by a patient or inmate thereof, and (ii) for purposes of this 
subparagraph, clauses (i) and (ii) of subparagraph (C) shall 
apply;". 
r/stat'^as"*' 
(b) Section 3121(b)(7) of the Internal Revenue Code of 1954 is 
26 use 3121. 
amended by striking out "or" at the end of subparagraph (B), by 
striking out the semicolon at the end of subparagraph (C) and insert-
ing in lieu thereof ", or", and by adding at the end thereof the follow-
ing new subparagraph: 
"(D) service performed in the employ of the Government 
of Guam (or any instrumentality which is wholly owned by 
such Government) by an employee properly classified as a 
temporary or intermittent employee, if such service is not 
covered by a retirement system established by a law of Guam; 
. , j , 
. , 
except that (i) the provisions of this subparagraph shall not 
' 
t , 
be applicable to services performed by an elected official or a 
member of the legislature or in a hospital or penal institution 
by a patient or inmate thereof, and (ii) for purposes of this 
subparagraph, clauses (i) and (ii) of subparagraph (B) 
shall apply;". 
Effective date. 
(Q) The amendments made by this section shall apply with respect 
to service performed on and after the first day of the first calendar 
quarter which begins on or after the date of the enactment of this Act. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1359 
COVERAGE EXCLUSION OF STUDENTS EMPLOYED BY NONPROFIT ORGANIZA-
TIONS AUXILIARY TO SCHOOLS, COLLEGES, AND UNIVERSITIES 
SEC. 129. (a) (1) Section 210(a) (10) (B) of the Social Security Act 
^2 use 4io. 
is amended to read as follows: 
"(B) Service performed in the employ of— 
" (i) a school, college, or university, or 
*'(ii) an organization described in section 509(a)(3) of 
the Internal Revenue Code of 1954 if the organization is 
2 6 use 509. 
organized, and at all times thereafter is operated, exclusively 
for the benefit of, to perform the functions of, or to carry 
out the purposes of a school, college, or university and is 
operated, supervised, or controlled by or in connection with 
such school, college, or university, unless it is a school, col-
lege, or university of a State or a political subdivision thereof 
and the services in its employ performed by a student referred 
to in section 218(c)(5) are covered under the agreement 
42 use 418. 
between the Secretary of Health, Education, and Welfare and 
such State entered into pursuant to section 218; 
if such service is performed by a student who is enrolled and 
regularly attending classes at such school, college, or university;". 
(2) Section 3121(b) (10) (B) of the Internal Revenue Code of 
1954 is amended to read as follows: 
^^^ stat. 417; 
"(B) service performed in the employ of— 
26 use 3121. 
" (i) a school, college, or university, or 
"(ii) an organization described in section 509(a) (3) if the 
organization is organized, and at all times thereafter is oper-
ated, exdlusively lor the benefit of, to perform the functions 
of, or to carry out the purposes of a school, college, or univer-
sity and is operated, supervised, or controlled by or in con-
nection with such school, college, or university, unless it is a 
school, college, or university of a State or a political sub-
division thereof and the services performed in its employ by 
a student referred to in section 218(c)(5) of the Social 
Security Act are covered under the agreement between the 
Secretary of Health, Education, and Welfare and such State 
entered into pursuant to section 218 of such Act; 
. 
,. • .
.
«
» 
if such service is performed by a student who is enrolled and reg-
ularly attending classes at such school, college, or university;*', 
(b) The amendments made by subsection (a) shall apply to services 
Effective date. 
performed after December 31,1972. 
PENALTY FOR F U R N I S H I N G FALSE INFORMATION TO OBTAIN SOCIAL SECU-
RITY ACCOUNT NUMBER FOR DECEPTIVE PRACTICES INVOLVING 
SOCIAL 
SECURITY ACCOUNT NUMBERS 
SEC 130. (a) Section 208 of the Social Security Act is amended by 
^2 stat. 1034. 
adding "or" after the semicolon at the end of subsection (e), and by 
'* "^^ '^^^' 
inserting after subsection (e) the following new subsections: 
"(f) willfully, knowingly, and with intent to deceive the Secretary 
as to his true identity (or the true identity of any other person) fur-
nishes or causes to be furnished false information to the Secretary with 
respect to any information re(]^uired by the Secretary in connection 
with the establishment and maintenance of the records provided for 
in section 205 (c) (2); or 
Post, p. 1364. 
1360 
PUBUCLAW92-603-OCT. 30, 1972 
[86 STAT. 
"(g) for the purpose of causing an increase in any payment author-
ized under this title (or any otlier program financed in whole or in 
, 
^ 
part from Federal funds), or for the purpose of causing a payment 
under this title (or any such other program) to be made when no pay-
ment is authorized thereunder, or for the purpose of obtaining (for 
himself or any other person) any payment or any other benefit to 
which he (or such other person) is not entitled— 
"(1) willfully, knowingly, and with intent to deceive, uses a 
social security account number, assigned by the Secretary (in the 
Post, 1364. 
exercise of his authority under section 205(c) (2) to establish and 
maintain records) on the basis of false information furnished to 
the Secretary by him or by any other person; or 
" (2) with intent to deceive, falsely represents a number to be the 
social security account number assigned by the Secretary to him 
or to another person, when in fact such number is not the social 
security account number assigned by the Secretary to him or to 
""''' ''' ' * 
such other person;". 
Effective date. 
(b) The amendments made by subsection (a) shall apply with 
respect to information furnished to the Secretary after the date of 
the enactment of this Act. 
IXCREASE OF AMOUNTS IX TRUST FUNDS AVAILABLE TO PAY COSTS 
, ' : ' .':!^'- 
OF REHABILITATION SERVICES 
Ante, p. 1343. 
SEC. 131. The first sentence of section 222(d)(1) of the Social 
7
9 Stat. 408; 
Secuiity Act (as amended by section 107 (b) (4) of this Act) is further 
amended by striking out "except that the total amount so made avail-
able pursuant to this subsection in any fiscal year may not exceed 1 
percent of the total of the benefits under section 202(d) for children 
who have attained age 18 and are under a disability" and inserting in 
lieu thereof the following: "except that the total amount so made 
available pursuant to this subsection may not exceed— 
" (i) 1 percent in the fiscal year ending June 30, 1972, 
" (ii) 1.25 percent in the fiscal year ending June 30,1973, 
X
. 
"(iii) 1.5 percent in the fiscal year ending June 30, 1974, and 
thereafter. 
Ante, pp. 1343- of the total of the benefits under section 202(d) for children who 
have attained age 18 and are under a disability". 
1347. 
42 use 401. 
A C C E P T A N C E OF M O N E Y GIFTS MADE UNCONDITIONALLY TO SOCIAL SECURITY 
SEC. 132. (a) The second sentence of section 201(a) of the Social 
Security Act is amended by inserting after "in addition," the follow-
ing : "such gifts and bequests as may be made as provided in subsection 
Infra. 
(i)(l),and". 
Post. p. 1364. 
(b) The second sentence of section 201(b) of such Act is amended 
.' ' .5B? ,: ^y inserting after "consist of" the following: "such gifts and bequests 
i:. j^'j i- 
as may be made as provided in subsection (i) (1), and". 
(c) Section 201 of such Act is further amended by adding after sub-
section (h) the following new subsection: 
"(i) (1) The Managing Trustee of the Federal Old-Age and Sur-
vivors Insurance Trust Fund, the Federal Disability Insurance Trust 
Fund, the Federal Hospital Insurance Trust Fund, and the Federal 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1361 
SupplementaiT Medical Insurance Trust Fund is authorized to ac-
cept on behalf of the United States money gifts and bequests made 
unconditionally to any one or more of such Trust Funds or to the 
Department of Health, Education, and Welfare, or any part or 
officer thereof, for the benefit of any of such Funds or any activity 
financed through such Funds. 
"(2) Any such gift accepted pursuant to the authority granted in 
paragraph (1) of this subsection shall be deposited in— 
"(A) the specific trust fund designated by the donor or 
"(B) if the donor has not so designated, the Federal Old-Age 
and Survivors Insurance Trust Fund." 
(d) The second sentence of section 1817(a) of such Act is amended 
H ^^^' ^^^^^ 
by inserting after "consist of" and before "such amounts" the follow-
ing : "such gifts and bequests as may be made as provided in section 
201(i)(l), and". 
Ante, p. laeo. 
(e) The second sentence of section 1841(a) of such Act is amended 
42 use i39st. 
by inserting after "consist of" and before "such amounts" the follow-
ing : "such gifts and bequests as may be made as provided in section 
201(i)(l), and". 
(f) The amendments made by this section shall apply with respect 
Effective date. 
to gifts and bequests received after the date of enactment of this Act. 
(g) For the purpose of Federal income, estate, and gift taxes, any 
gift or bequest to the Federal Old-Age and Survivors Insurance Trust 
Fund, the Federal Disability Insurance Trust Fund, the Federal Hos-
pital Insurance Trust Fund, or the Federal Supplementary Medical 
Insurance Trust Fund, or to the Department of Health, Education, 
and Welfare, or any part or officer thereof, for the benefit of any of 
such Funds or any activity financed through any of such Funds, 
which is accepted by the Managing Trustee of such Trust Funds under 
• * 
the authority of section 201 (i) of the Social Security Act, shall be 
considered as a gift or bequest to or for the use of the United States 
and as made for exclusively public purposes. 
PAYMENT I N CERTAIN CASES OF DISABILITY INSURANCE BENEFITS W I T H 
RESPECT TO CERTAIN PERIODS OF DISABILITY 
1 
* 
SEC. 133. (a) If an individual would (upon the timely filing of an 
- J :.. 
application for a disability determination under section 216(i) of the 
Social Security Act and of an application for disability insurance I^^Q^^I^S. 
benefits under section 223 of such Act) have been entitled to disability 
insurance benefits under such section 223 for a period which began after 
1959 and ended prior to 1964, such individual shall, upon filing applica-
tion for disability insurance benefits under such section 223 with respect 
to such period not later than 6 months after the date of enactment of 
this section, be entitled, notwithstanding any other provision of title I I 
of the Social Security Act, to receive in a lump sum, as disability ^2 use 40i. 
insurance benefits payable under section 223, an amount equal to the 
total amounts of disability insurance benefits which would have been 
payable to him for such period if he had timely filed such an applica-
tion for a disability determination and such an application for disa-
bility insurance benefits with respect to such period; but only if— 
(1) prior to the date of enactment of this section and after the 
date of enactment of the Social Security Amendments of 1967, 42 use 302 
1341, 
1362 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, pp. 
1341, 
1350, 1351. 
such period was determined (under section 216 (i) of the Social 
Security Act) to be a period of disability as to such individual; 
and 
(2) the application giving rise to the determination (under such 
/ i section 216 (i)) that such period is a period of disability as to such 
individual would not have been accepted as an application for 
such a determination except for the provisions of section 216(i) 
(2)(F). 
(b) No payment shall be made to any individual by reason of the 
l^rovisions of subsection (a) except upon the basis of an application 
filed after the date of enactment of this sedtion. 
42 u s e 415. 
Ante, p. 1340. 
Ante, pp. 1350, 
1351. 
42 u s e 405. 
81 Stat. 864; 
Post, p. 1369. 
42 u s e 415. 
RECOMPUTATION OF BENEFITS BASED ON COMBINED RAILROAD AND SOCIAL 
n.H;;vK' ;n, '-i,,,r fu,;^^ .-,:; 
SECURITY EARNINGS 
,;; 
SEC. 134. (a) Section 215 (f) of the Social Security Act is amended— 
(1) by striking out subparagraph (B) of paragraph (2) and 
inserting in lieu thereof the following: 
"(B) in the case of an individual who died in such year, for 
tv 
monthly benefits beginning with benefits for the month in w^hich 
he died."; and 
(2) by adding at the end the following new paragraph: 
"(6) Upon the death after 1967 of an individual entitled to bene-
fits under section 202(a) or section 223, if any person is entitled to 
monthly benefits or a lump-sum death payment, on the wages and self-
employment income of such individual, the Secretary shall recompute 
the decedent's primary insurance amount, but only if the decedent 
during his lifetime was paid compensation which was treated under 
section 205 (o) as remuneration for employment." 
(b) Section 215(d)(2) of such Act is amended by inserting "or 
(6)" before the period at the end thereof. 
79 Stat. 394; 
81 Stat. 835. 
26 u s e 1401. 
26 u s e 3101. 
CHANGES I N TAX SCHEDUI^S 
SEC. 135. (a) (1) Section 1401(a) of the Internal Revenue Code of 
1954 (relating to rate of tax on self-employment income for purposes 
of old-age, survivors, and disability insurance) is amended— 
(A) by striking out "1978" in paragraph (3) and inserting in 
lieu thereof "1973"; and 
(B) by striking out paragraphs (4) and (5) and inserting in 
i' 
lieu thereof the following: 
"(4) in the case of any taxable year beginning after December 
31,1972, the tax shall be equal to 7.0 percent of the amount of the 
self-employment income for such taxable year." 
(2) Section 3101(a) of such Code (relating to rate of tax on 
employees for purposes of old-age, survivors, and disability insurance) 
is amended (A) by striking out "any of the calendar years 1971 through 
1977" and inserting in lieu thereof "the calendar years 1971 and 1972" 
and (B) by striking out paragraphs (4) and (5) and inserting in lieu 
thereof the following: 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1363 
"(4) with respect to wages received during the calendar years 
1973,1974,1975,1976, and 1977, the rate shall be 4.85 percent; 
"(5) with respect to wages received during the calendar years 
1978 through 2010, the rate shall be 4.80 percent; and 
"(6) with respect to wages received after December 31, 2010, 
the rate shall be 5.85 percent." 
(3) Section 3111 (a) of such Code (relating to rate of tax on employ- 
^"'^' P- 42i. 
ers for purposes of old-age, survivors, and disability insurance) is 
amended (A) by striking out "any of the calendar years 1971 through 
1977" and inserting in lieu thereof "the calendar years 1971 and 1972" 
and (B) by striking out paragraphs (4) and (5) and inserting in lieu 
thereof the following: 
" (4) with respect to wages paid during the calendar years 1973, 
•;. , 
1974,1975,1976, and 1977, the rate shall be 4.85 percent; 
" (5) with respect to wages paid during the calendar years 1978 
through 2010, the rate shall be 4.80 percent; and 
"(6) with respect to wages paid after December 31, 2010, the 
rate shall be 5.85 percent." 
(b) (1) Section 1401(b) of such Code (relating to rate of tax on 
^"'«. P- 42I. 
self-employment income for purposes of hospital insurance) is 
amended by striking out paragraphs (2) through (5) and inserting in 
lieu thereof the following: 
"(2) in the case of any taxable year beginning after Decem-
ber 31, 1972, and before January 1, 1978, the tax shall be equal 
to 1.0 percent of the amount of the self-employment income for 
such taxable year; 
"(3) in the case of any taxable year beginning after Decem-
ber 31, 1977, and before January 1, 1981, the tax shall be equal 
to 1.25 percent of the amount of the self-employment income for 
such taxable year; 
"(4) in the case of any taxable year beginning after Decem-
ber 31, 1980, and before January 1, 1986, the tax shall be equal 
to 1.35 percent of the amount of the self-employment income for 
such taxable year; 
"(5) in the case of any taxable year beginning after Decem-
ber 31, 1985, the tax shall be equal to 1.45 percent of the amount 
of the self-employment income for such taxable year." 
(2) Section 3101(b) of such Code (relating to rate of tax on 
^"<e, p. 421. 
employees for purposes of hospital insurance) is amended by striking 
out paragraphs (2) through (5) and inserting in lieu thereof the 
following: 
"(2) with respect to wages received during the calendar years 
1973, 1974, 1975, 1976, and 1977, the rate shall be 1.0 percent; 
"(3) with respect to wages received during the calendar years 
1978,1979, and 1980, the rate shall be 1.25 percent; 
"(4) with respect to wages received during the calendar vears 
1981, 1982, 1983, 1984, and 1985, the rate shall be 1.35 percent; 
and 
"(5) with respect to wages received after December 31, 1985, 
the rate shall be 1.45 percent." 
1364 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, p. 422. 
(3^ Sectioii 3111(b) of such Code (relating to rate of tax on 
employers for purposes of hospital insurance) is amended by striking 
out paragraphs (2) through (5) and inserting in lieu thereof the 
following: 
"(2) with respect to wages paid during the calendar years 
1973, 1974, 1975, 1976, and 1977, the rate shall be 1.0 percent; 
* • <
* - 
' 
"(3) with respect to wages paid during the calendar years 
i." 1978, 1979, and 1980, the rate shall be 1.25 percent; 
"(4) with respect to wages paid during the calendar years 
1981,1982,1983,1984, and 1985, the rate shall be 1.35 percent; and 
i . 
"(5) with respect to wages paid after December 31, 1985, the 
rate shall be 1.45 percent." 
Effective date. 
(c) The amendments made by subsectious (a)(1) and (b)(1) shall 
apply only with respect to taxable years beginning after December 
31,1972. The remaining amendments made by this section shall apply 
only with respect to remuneration paid after December 31, 1972. 
ALLOCATION TO DISABILITY INSURANCE TRUST F U N D 
Ante, p. 422. 
g^c. 136. (a) Scctiou 201(b)(1) of the Social Security Act is 
amended— 
(1) by striking out "(E) 1.0" and inserting in lieu thereof 
"(E) 1.1", 
(2) by striking out "(F) 1.1" and inserting in lieu thereof 
;: "(F) 1.15", and 
(3) by striking out "(G) 1.4" and inserting in lieu thereof 
"(G) 1.5". 
(b) Section 201(b) (2) of such Act is amended— 
(1) by striking out "(E) 0.75" and inserting in lieu thereof 
' 
"(E) 0.795", 
(2) by striking out "(F) 0.825" and inserting in lieu thereof 
,'; "(F) 0.84", and 
' 
(3) by striking out "(G) 0.915" and inserting in lieu thereof 
' 
"(G) 0.895". 
METHOD OF ISSUANCE OF SOCIAL SECURITY ACCOUNT NUMBERS 
64 Stat. 518. 
g^c. 137. Sectiou 205 (c) (2) of the Social Security Act is amended— 
^' "
"
^
"
^ ^°^- 
(1) by inserting " ( A ) " immediately after "(2)"; and 
(2) by adding at the end thereof the following new subpara-
graph : 
"(B) (i) In carrying out his duties under subparagraph (A), the 
Secretary shall take affirmative measures to assure that social security 
account numbers will, to the maximum extent practicable, be assigned 
to all members of appropriate groups or categories of individuals 
by assigning such numbers (or ascertaining that such numbers have 
already been assigned) : 
"(I) to aliens at the time of their lawful admission to the 
United States either for permanent residence or under other 
authority of law permitting them to engage in employment in 
the United States and to other aliens at such time as their status 
is so changed as to make it lawful for them to engage in such 
employment; 
"(II) to any individual who is an applicant for or recipient 
of benefits under any program financed in whole or in part from 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1365 
Federal funds including any child on whose behalf such benefits 
are claimed by another person; and 
"(III) to any other individual when it appears that he could 
have been but was not assigned an account number under the 
provisions of subclauses (I) or (II) but only after such investi-
gation as is necessary to establish to the satisfaction of the Sec-
retary, the identity of such individual, the fact that an account 
number has not already been assigned to such individual, and 
the fact that such individual is a citizen or a noncitizen who is 
not, because of his alien status, prohibited from engaging in 
employment; 
and, in carrying out such duties, the Secretary is authorized to take 
affirmative measures to assure the issuance of social security numbers: 
"(IV) to or on behalf of children who are below school age at 
the request of their parents or guardians; and 
"(V) to children of school age at the time of their first enroll-
ment in school, 
"(ii) The Secretary shall require of applicants for social security 
account numbers such evidence as may be necessary to establish the 
age, citizenship, or alien status, and true identity of such applicants, 
and to determine which (if any) social security account number has 
previously been assigned to such individual. 
"(iii) In carrying out the requirements of this subparagraph, the 
Secretary shall enter into such agreements as may be necessary with 
the Attorney General and other officials and with State and local wel-
fare agencies and school authorities (including non-public school 
authorities)." 
PAYMENTS BY EMPLOYER TO DISABLED FORMER EMPLOYEE 
SEC. 138. (a) Section 209 of the Social Security Act (as amended by 
section 122(a) of this Act) is further amended by striking out "or" 
^nte, p. 1354. 
at the end of subsection (m), by striking out the period at the end of 
subsection (n) and inserting in lieu thereof "; or", and by inserting 
after subsection (n) the following new subsection: 
" (o) Any payment made by an employer to an employee, if at the 
time such payment is made such employee is entitled to disability 
insurance benefits under section 223(a) and such entitlement com- 
^n'e. P-1351. 
menced prior to the calendar year in which such payment is made, and 
if such employee did not perform any services for such employer dur-
ing the period for which such payment is made." 
(b) Section 3121(a) of the Internal Revenue Code of 1954 (relating 
to definition of wages, and as amended by section 122(b) of this Act) 
^nte, p. i3S4. 
is further amended by striking out "or" at the end of paragraph (13), 
by striking out the period at the end of paragraph (14) and inserting 
in lieu thereof "; or", and by inserting after paragraph (14) the 
following new paragraph: 
"(15) any payment made by an employer to an employee, if 
:v-a 
at the time such payment is made such employee is entitled to 
disability insurance benefits under section 223(a) of the Social 
^' 
Security Act and such entitlement commenced prior to the cal-
1366 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
, ,ll endar year in which such payment is made, and if such employee 
did not perform any services for such employer during the period 
for which such payment is made." 
(c) The amendments made by this section shall apply in the case 
of any payment made after December 1972. 
Effective date. 
TERMIXATION OF COVERAGE OF REGISTRARS OF VOTERS 
I N 
LOUISIANA 
SEC. 139. (a) Xotwithstanding the provisions of section 218(g) (1) 
42 use'418". 
^^ *^^^ Social Security Act, the Secretary may, under such conditions 
as he deems appropriate, permit the State of Louisiana to modify its 
agreement entered into under section 218 of such Act so as to terminate 
the coverage of all employees who are in positions under the Regis-
trars of Voters Employees' Retirement System, effective after Decem-
ber 1975, but only if such State files with him notice of termination 
on or before December 31,1973. 
(b) If the coverage of such employees in positions under such 
retirement system is terminated pursuant to subsection (a), coverage 
cannot later be extended to employees in positions under such retire-
ment system. 
COMPUTATION 
OF INCOME OF AMERICAN MINISTERS AND MEMBERS OF 
RELIGIOUS ORDERS PERFORMING SERVICES OUTSIDE THE UNITED STATES 
71 Stat. 523. 
SEC. 140. (a) Scctlou 211(a)(7) of the Social Security Act is 
^2^^^^^^- 
amended-
(1) by striking out "and section 119" and inserting in lieu 
thereof ", section 119"; 
(2) by striking out "of the Internal Revenue Code of 1954 
and, in addition, if he is a citizen of the United States performing 
such service as an employee of an American employer (as defined 
42 use 410. 
in section 210(e)_) or as a minister in a foreign country who has a 
congregation which is composed predominantly of citizens of the 
United States, without regard to" and inserting in lieu thereof a 
<
4
i
i comma; and 
(3) by striking out "such Code" and inserting in lieu thereof 
"the Internal Revenue Code of 1954". 
(b) Section 1402(a) (8) of the Internal Revenue Code is amended— 
(1) by striking out "and section 119" and inserting in lieu 
thereof ", section 119"; and 
(2) by stiiking out "and, in addition, if he is a citizen of the 
United States performing such service as an employee of an 
American employer (as defined in section 3121(h)) or as a 
minister in a foreign country who has a congregation which is 
composed predominantly of citizens of the United States, without 
regard to" and inserting in lieu thereof a comma. 
Effective date. 
(c) Thc amendments made by this section shall apply with respect 
to taxable years beginning after December 31, 1972. 
MODIFICATION OF STATE AGREEMENTS WITH RESPECT TO CERTAIN STUDENTS 
AND CERTAIN PART-TIME 
EMPLOYEES 
SEC. 141. ^a) Notwithstanding any provision of section 218 of the 
42 use 418. 
Social Security Act, the agreement with any State (or any modifica-
tions thereof) entered into pursuant to such section may, at the option 
of such State, be modified at any time prior to January 1,1974, so as to 
exclude either or both of the following: 
71 Stat. 523. 
26 u s e 1402 
'J I .<! ,®^a^ 
86 STAT. ] 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
1367 
(1) service in any class or classes of part-time positions; or 
(2) service performed in the employ of a school, college, or 
university if such service is performed by a student who is 
enrolled and is regularly attendmg classes at such school, college, 
or university. 
(b) Any modification of such agreement pursuant to this section 
Effective date, 
shall be effective with respect to services performed after the end of 
the calendar quarter following the calendar quarter in which such 
agreement is modified. 
(c) If any such modification terminates coverage with respect to 
service in any class or classes of part-time positions in any coverage 
§roup, the Secretary of Health, Education, and Welfare and the 
tate may not thereafter modify such agreement so as to again make 
the agreement applicable to service in such positions in such coverage 
group; if such modification terminates coverage with respect to se]-v-
ice performed in the employ of a school, college, or university, by 
a student who is enrolled and regularly attending classes at such 
school, college, or university, the Secretary of Health, Education, and 
Welfare and the State may not thereafter modify such agreement so 
as to again make the agreement applicable to such service performed 
in the employ of such school, college, or university. 
BENEFITS IN CASE OF CERTAIN INDIVIDUALS INTERNED DURING 
WORLD WAR II 
SEC. 142. (a) Title II of the Social Security Act (as amended by 
this Act) is amended by adding at the end thereof a new section as 
*^ ^^^ ^°^-
follows: 
" B E N E F I T S I N CASE OF CERTAIN INDIVIDUALS INTERNED DURING 
WORI^D WAR II 
"SEC. 281. (a) For the purposes of this section the term 'internee' 
"intemee." 
means an individual wlxo was interned during any period of time from 
T^ecember 7, 1941, through December 31, 1946, at a place within the 
United States operated by the Government of the United States for 
the internment of United States citizens of Japanese ancestry. 
"(b)(1) For purposes of determining entitlement to and the amount 
of any monthly benefit for any month after December 1972, or entitle-
ment to and the amount of any lump-sum death payment in the case of 
a death after such month, payable under this title on the basis of the 
wages and self-employment income of any individual, and for pur-
E
oses of section 216 (i) (3), such individual shall be deemed to nave 
^"<e, p. uso. 
een paid during any period after he attained age 18 and for which 
he was an internee, wages (in addition to any wages actually paid to 
him) at a weekly rate of basic pay during such period as follows— 
"(A) in the case such individual was not employed prior to the 
beginning of such period, 40 multiplied by the minimum hourly 
rate or rates in effect at any such time under section 206(a) (1) of 
title 29, United States (Jode, for each full week during such 
so stat. ass. 
period; and 
"^B) in the case such individual who was employed prior to 
the oeginning of such period, 40 multiplied by the greater of (i) 
the highest hourly rate received during any such employment, 
or (ii) the minimum hourly rate or rates m effect at any such time 
under section 206(a) (1) of title 29, United States Code, for each 
full week during such period. 
"(2) This subsection shall not be applicable in the case of any 
monthly benefit or lump-sum death payment if— 
82-081 O - 73 - 89 
1368 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Nonapplicabil-
ity. 
Ante, 
pp, 1333, 
1334, 1362. 
Ante, 
p. 1350. 
Appropriation. 
42 u s e 415. 
" (A) a larger such benefit or payment, as the case may be, would 
be payable without its application; or 
(B) a benefit (other than a benefit payable in a lump-sum 
unless it is a commutation of, or a substitute for, periodic pay-
ments) which is based, in whole or in part, upon internment 
during any period from December 7, 1941, through December 31, 
1946, at a place within the United States operated by the Govern-
ment of the United States for the internment of United States 
citizens of Japanese ancestry, is determined by any agency or 
wholly owned instrumentality of the United States to be payable 
by it under any other law of the United States or under a system 
established by such agency or instrumentality. 
The provisions of clause (B) shall not apply in the case of any 
monthly benefit or lump-sum death payment under this title if its 
application would reduce by $0.50 or less the primary insurance 
amount (as computed under section 215 prior to any recomputation 
thereof pursuant to subsection (f) of such section) of the individual on 
whose wages and self-employment income such benefit or payment is 
based. The provisions of clause (B) shall also not apply for purposes 
of section 216 (i) (3). 
"(3) Upon application for benefits, a recalculation of benefits (by 
i-eason of this section), or a lump-sum death payment on the basis of 
the wages and self-employment income of any individual who was 
an internee, the Secretary of Health, Education, and Welfare shall 
accept the certification of the Secretary of Defense or his designee 
concerning any period of time for which an internee is to receive 
credit under paragraph (1) and shall make a decision without regard 
to clause (B) of paragraph (2) of this subsection unless he has been 
notified by some other agency or instrumentality of the United States 
that, on the basis of the period for which such individual was an 
internee, a benefit described in clause (B) of paragraph (2) has been 
determined by such agency or instrumentality to be payable by it. If 
the Secretary of Health, Education, and Welfare has not been so 
notified, he shall then ascertain whether some other agency or w^holly 
owned instrumentality of the United States has decided that a benefit 
described in clause (B) of paragraph (2) is payable by it. If any such 
agency or instrumentality has decided, or thereafter decides, that such 
a benefit is payable by it, it shall so notify the Secretary of Health, 
Education, and Welfare, and the Secretary shall certify no further 
benefits for payment or shall recompute the amount of any further 
benefits payable, as may be required by this section. 
"(4) Any agency or wholly owned instrumentality of the United 
States which is authorized by any law of the United States to pay 
benefits, or has a system of benefits which are based, in whole or in part, 
on any period for which any individual was an internee shall, at the 
request of the Secretary of Health, Education, and Welfare, certify 
to him, with respect to any individual who was an internee, such 
information as the Secretary deems necessary to carry out his func-
tions under paragraph (3) of this subsection. 
"(c) There are authorized to be appropriated to the Trust Funds 
and the Federal Hospital Insurance Trust Fund for the fiscal year end-
ing June 30, 1978, such sums as the Secretary determines would place 
the Trust Funds and the Federal Hospital Insurance Trust Fund in 
the position in which they would have been if the preceding provisions 
of this section had not been enacted." 
(b) Section 215(d)(1)(C) of such Act is amended by striking out 
"and" at the end of clause (ii), by striking out the period at the end 
of clause (iii), and inserting in lieu thereof ", and", and by inserting 
after clause (iii) the following new clause: 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30,1972 
1369 
"(iv) wages deemed paid prior to 1951 to such individual 
under section 231.". 
(c) Section 215(d) (2) of such Act (as amended by section 134 of 
this Act) is further amended by striking out the period at the end 
tl'^^scUil^^' 
thereof and inserting in lieu thereof "or section 231.". 
MODIFICATION OF AGREEMENT W I T H WEST VIRGINIA TO PROVIDE COVERAGE 
FOR CERTAIN POLICEMEN AND FIREMEN 
SEC. 143. (a) Notwithstanding the provisions of subsection (d) (5) 
(A) of section 218 of the Social Security Act and the references thereto 
42 use 4i8. 
in subsections (d) (1) and (d) (3) of such section 218, the agreement 
with the State of West Virginia heretofore entered into pursuant to 
such section 218 may, at any time prior to 1974, be modified pursuant 
to subsection (c) (4) of such section 218 so as to apply to services per-
formed in policemen's or firemen's positions covered by a retirement 
system on the date of the enactment of this Act by individuals as 
employees of any class I I I or class IV municipal corporation (as 
defined in or under the laws of the State) if the State of West Virginia 
has at any time prior to the date of the enactment of this Act paid to the 
Secretary of the Treasury, with respect to any of the services per-
formed in such positions by individuals as employees of such munici-
pal corporation, the sums prescribed pursuant to subsection (e)(1) 
of such section 218. For purposes of this subsection, a retirement system 
, ; . 
which covers positions of policemen or firemen, or both, and other 
positions, shall, if the State of West Virginia so desires, be deemed to 
be a separate retirement system with respect to the positions of such 
policemen or firemen, or both, as the case may be. 
(b) Notwithstanding the provisions of subsection (f) of section 218 
of the Social Security Act, any modification in the agreement with the 
State of West Virginia under subsection (a) of this section, to the 
extent it involves services performed by individuals as employees of 
any class I I I or class IV municipal corporation, may be made effective 
with respect to— 
(1) all services performed by such individual, in any police- 
'" ' ' 
man's or fireman's position to which the modification relates, on or 
after the date of the enactment of this Act; and 
(2) all services performed by such individual in such a position 
before such date of enactment with respect to which the State of 
West Virginia has paid to the Secretary of the Treasury the sums 
prescribed pursuant to subsection (e) (1) of such section 218 at 
the time or times established pursuant to such subsection (e) (1), 
if and to the extent that— 
(A) no refund of the sums so paid has been obtained, or 
(B) a refund of part or all of the sums so paid has been 
obtained but the State of West Virginia repays to the Secre-
tary of the Treasury the amount of such refund within ninety 
days after the date that the modification is agreed to by the 
State and the Secretary of Health, Education, and Welfare. 
PERFECTING AMENDMENTS RELATED TO T H E 20-PERCENT INCREASE 
PROVISION ENACTED I N PUBLIC LAW 9 2 - 3 a 6 
SEC, 144. (a) (1) The table in section 215(a) of the Social Security 
Act (as inserted by section 201 (a) of Public Law 92-336) is amended— 
^"'e, p. 406. 
(A) in column I I of such table, by striking out "251.40" and 
inserting in lieu thereof "254.40", and 
(B) in column I I I of such table, by striking out "699" and 
inserting in lieu thereof "696". 
1370 
PUBLIC LAW 92-^03-OCT. 30,1972 
[86 STAT. 
Ante, 
p. 410. 
Ante, 
p. 415. 
Ante, 
p. 417. 
Ante, 
p. 406. 
Ante, 
p. 417. 
26 u s e 6413. 
(2) Section 203(a)(2)(B) of such Act (as amended by section 
201(b) of Public Law 92-336) is amended by striking out "for each 
person" and inserting in lieu thereof "for each such person". 
(3) Section 203(a)(2)(C) of such Act (as amended by section 
202(a)(2)(B) of Public Law 92-336) is amended by striking out 
"month including" and inserting in lieu thereof "month (including". 
(4) Section 230(b) (2) of such Act (as added by section 202(b) (1) 
of Public Law 92-336) is amended by striking out "or" at the end of 
clause (A) and inserting in lieu thereof "of". 
(b) The amendments made by each of the paragraphs in subsection 
(a) shall be effective in like manner as if such amendment had been 
included in title II of Public Law 92-336 in the particular provision 
of such title referred to in such paragraph. 
(c) Section 203(b) (6) of Public Law 92-336 is amended, effective 
July 1, 1972, by striking out "Section 6413(a) (2) (A)" and inserting 
in heu thereof "Section 6413(c) (2) (A)". 
Ante, 
p. 1349. 
42 u s e 401. 
ELIMIXATION OF DURATION-OF-RELATIONSHIP REQUIREMENT 
I N 
CERTAIN 
CASES INVOLVING 
SURVIVOR BENEFITS 
(WHERE 
INSURED'S 
DEATH 
WAS 
ACCIDENTAL OR OCCURRED I N LINE OF DUTY W H I L E H E WAS A SERVICE-
M A N ) 
SEC. 145. (a) The first sentence of section 216(k) of the Social 
Security Act (as amended by section 115 of this Act) is further 
amended— 
(1) by striking out "and he would satisfy such requirement if 
a three-month period were substituted for the nine-month period" 
and inserting in lieu thereof "unless the Secretary determines that 
at the time of the marriage involved the individual could not 
have reasonably been expected to live for nine months"; and 
(2) by striking out "except that this subsection shall not apply" 
and inserting in lieu thereof "except that paragraph (2) of this 
subsection shall not apply". 
(b) The amendments made by this section shall apply only with 
i-espect to benefits payable under title II of the Social Security Act for 
months after December 1972 on the basis of applications filed in or 
after the month in which this Act is enacted. 
TITLE II—PROVISIONS RELATING TO MEDICARE, MED-
ICAID, AND MATERNAL AND CHILD HEALTH 
C O V E R A G E F O R DISABILITY BENEFICIARIES UNDER MEDICARE 
SEC. 201. (a)(1)(A) The heading of title X V I I I of the Social 
Security Act is amended to read as follows: 
"TITLE XVIII—HEALTH INSURANCE FOR T H E AGED 
AND DISABLED". 
(B) The heading of part A of such title is amended to read as 
follows: 
"PART A—HOSPITAL INSURANCE BENEFITS FOR THE AGED 
AND 
D I S A B L E D " . 
(C) The heading of part B of such title is amended to read as 
follows: 
42 
use 426. 
Ante, pp. 1335-
1350. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1371 
"PART B—SUPPLEMENTARY MEDICAL INSURANCE BENEFITS FOR THE 
AGED AND DISABLED". 
(2) The text of section 1811 of such Act is amended to read as 
79 stat. 291. 
f o l l o w s : 
. 
. 
. 
42USC1395C. 
"SEC. 1811. The insurance program for which entitlement is estab-
lished by section 226 provides basic protection against the costs of hos- 
^"^'•«-
pital and related posthospital services in accordance with this part for 
(I) individuals who are age 65 or over and are entitled to retirement 
benefits under title II of this Act or under the railroad retirement sys- 
42 use 40i. 
tern and (2) individuals under age 65 who have been entitled for not 
less than 24 consecutive months to benefits under title II of this Act or 
under the railroad retirement system on the basis of a disability." 
(3) Section 1831 of such Act is amended— 
79 stat. 301. 
(A) by inserting "AND THE DISABLED" after "AGED" in the head- 
^'^ ^^^ i395j. 
ing, and 
(B) by striking out "individuals 65 years of age or over" and 
inserting in lieu thereof "aged and disabled individuals". 
(b) (1) Section 226(a) of such Act is amended to read as follows: 
79 stajt^-290 
"(a)(1) Every individual who— 
" (A) has attained age 65, and 
"(B) is entitled to monthly insurance benefits under section 
202 or is a qualified railroad retirement beneficiary, 
shall be entitled to hospital insurance benefits under part A of title 
X V I I I for each month for which he meets the condition specified in 
^2 use 1395. 
subparagraph (B), beginning with the first month after June 1966 for 
which he meets the conditions specified in subparagraphs (A) and (B). 
"(b) Every individual who— 
" (1) has not attained age 65, and 
"(2) (A) is entitled to, and has for 24 consecutive calendar 
months been entitled to, (i) disability insurance benefits under 
section 223 or (ii) child's insurance benefits under section 202(d) 
^2 use 423. 
by reason of a disability (as defined in section 223(d)) or (iii) 
"'*' ^' ^^^^ 
widow's insurance benefits under section 202(e) or widowers 
insurance benefits under section 202(f) by reason of a disability 
(as defined in section 223(d)), or (B) is, and has been for not less 
than 24 consecutive months a disabled qualified railroad retire-
ment beneficiary, within the meaning of section 22 of the Railroad 
Retirement Act of 1937, 
Post, p. 1373 
shall be entitled to hospital insurance benefits under part (A) of title 
X V I I I for each month beginning with the later of (I) July 1973 or 
(II) the twenty-fifth consecutive month of his entitlement or status 
as a qualified railroad retirement beneficiary described in paragraph 
(2), and ending with the month following the month in which notice 
of termination of such entitlement to benefits or status as a qualified 
railroad retirement beneficiary described in paragraph (2) is mailed 
to him, or if earlier, with the month before the month in which he 
attains age 65." 
(2) Section 226(b) of such Act is amended by striking out 
42 use 426. 
"occurred after June 30,1966, or on or after the first day of the month 
in which he attains age 65, whichever is later" and inserting in lieu 
thereof "occurred (i) after June 30, 1966, or on or after the first day 
of the month in which he attains age 65, whichever is later, or (ii) if 
he was entitled to hospital insurance benefits pursuant to subsection 
(b), at a time when he was so entitled". 
(3) Section 226(b) (2) of such Act is amended by striking out "an 
individual shall be deemed entitled to monthly insurance benefits 
under section 202," and inserting in lieu thereof "an individual shall be 
1372 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
deemed entitled to monthly insurance benefits under section 202 or 
42 use 402, 
section 223,". 
'^"i use 426. 
C
"
^
) Section 226(c) of such Act is amended by inserting "or section 
22" after "section 21*' wlierever it appears. 
Ante, p. 1371. 
(5) SectioH 226 of such Act is further amended by redesignating 
subsection (b) as subsection (c), subsection (c^ as subsection (d),and 
subsection (d) as subsection (f), and by inserting after subsection (d) 
the following new subsection : 
"(e) (1) For purposes of determining entitlement to hospital insur-
ance benefits under subsection (b) in the case of widows and widowers 
described in paragraph (2) (A) (iii) thereof— 
" (A) the term 'age 60' in sections 202 (e) (1) (B) (ii) and 202(e) 
(5), and the term 'age 62' in sections 202(f) (1) (B) (ii), and 202 
(f) (6) shall be deemed to read 'age 65'; and 
"(B) the phrase 'before she attained age 60' in the matter fol-
lowing subparagraph (F) of section 202(e) (1) shall be deemed to 
read 'based on a disability'. 
"(2) For purposes of determining entitlement to hospital insurance 
benefits under subsection (a) (2) in the case of an individual under age 
65 who is entitled to benefits under section 202, and who was entitled to 
widow's insurance benefits or widower's insurance benefits based on 
disability for the month before the first month in which such individual 
was so entitled to old-age insurance benefits (but ceased to be entitled 
to such widow's or widower's insurance benefits upon becoming entitled 
to such old-age insurance benefits), such individual shall be deemed to 
have continued to be entitled to such widow's insurance benefits or 
widower's insurance benefits for and after such first month. 
"(3) For purposes of determining entitlement to hospital insurance 
benefits under subsection (a) (2) any disabled widow age 50 or older 
who is entitled to mother's insurance benefits (and who would have 
been entitled to widow's insurance benefits by reason of disability if she 
had filed for such widow's benefits) shall, upon application, for 
such hospital insurance benefits be deemed to have filed for such 
widow's benefits and shall, upon furnishing proof of such disability 
prior to July 1,1974, under such procedures as the Secretary may pre-
scribe, be deemed to have been entitled to such widow's benefits as of 
the time she would have been entitled to such widow's benefits if she 
had filed a timely application therefor." 
79 Stat. 304. 
(c) (1) Sectiou 1836 of such Act is amended to read as follows: 
42 u s e 1395o. 
V / V / 
u 
ELIGIBLE 
INDIVIDUALS 
"SEC. 1836. Every individual who— 
" (1) is entitled to hospital insurance benefits under part A, or 
"(2) has attained age 65 and is a resident of the United States, 
and is either (A) a citizen or (B) an alien Lawfully admitted for 
permanent residence who has resided in the United States con-
tinuously during the 5 years immediately preceding the month in 
which he applies for enrollment under this part, 
is eligible to enroll in the insurance program established by this part." 
42 use i39Sp. 
(2) (A) The first sentence of section 1837(c) of such Act is amended 
by striking out "paragraphs (1) and (2)" and inserting in lieu thereof 
"paragraph (1) or (2)". 
(B) The second sentence of section 1837(c) of such Act is amended 
to read as follows: "For purposes of tliis subsection and subsection 
(d), an individual who has attained age 65 and who satisfies paragraph 
^'^"- 
(1) of section 1836 but not paragraph (2) of such section shall be 
treated as satisfying such paragraph (1) on the first day on which 
he is (or on filing application would have been) entitled to hospital 
insurance benefits under part A." 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1373 
(C) The first sentence of 1837(d) of sucli Act is amended by strik-
ing out "paragraphs (1) and (2)" and inserting in lieu thereof "para-
graph (1) or (2)". 
(3) (A) Section 1838(a) of such Act is amended by striking out 
"July 1, 1966" in paragraph (1) and inserting in lieu thereof "July 
1, 1966 or (in the case of a disabled individual who has not attained 
age 65) July 1,1973". 
(B) Section 1838(a) of such Act is further amended— 
(i) by striking out "paragraphs (1) and (2)" in paragraph 
(2) (A) and inserting in lieu thereof "paragraph (1) or (2)"; and 
(ii) by striking out "such paragraphs" in subparagraphs (B), 
(C), and (D) and inserting in lieu thereof "such paragraph". 
(C) Section 1838 of such Act is further amended by redesignating 
subsection (c) as subsection (d), and by inserting after subsection 
(b) the following new subsection: 
"(c) In the case of an individual satisfying paragraph (1) of 
section 1836 whose entitlement to hospital insurance benefits under 
part A is based on a disability rather than on his having attained 
the age of 65, his coverage period (and his enrollment under this part) 
shall be terminated as of the close of the last month for which he 
is entitled to hospital insurance benefits." 
(4) Section 1839 (c) of such Act is amended— 
(A) 
by inserting "(in the same continuous period of 
eligibility)" after "for each full 12 months"; and 
(B) by adding at the end thereof the following new sen-
tence : "Any increase in an individual's monthly premium under 
the first sentence of this subsection with respect to a particular 
continuous period of eligibility shall not be applicable with 
respect to any other continuous period of eligibility which such 
individual may have." 
(5) Section 1839 of such Act is further amended by adding at 
the end thereof the following new subsection: 
"(e) For purposes of subsection (c) (and section 1837(g) (1)), an 
individual's 'continuous period of eligibility' is the period beginning 
with the first day on which he is eligible to enroll under section 1836 
and ending with his death; except that any period during all of 
which an individual satisfied paragraph (i) of section 1836 and 
which terminated in or before the month preceding the month in 
which he attained age 65 shall be a separate 'continuous period of 
eligibility' with respect to such individual (and each such period 
which terminates shall be deemed not to have existed for purposes of 
subsequently applying this section)." 
(6) (A) Section 1840(a) (1) of such Act is amended by striking out 
"section 202" and inserting in lieu thereof "section 202 or 223". 
(B) Section 1840(a)(2) of such Act is amended by striking out 
"section 202" and inserting in lieu thereof "section 202 or 223". 
(7) Section 1875(a) of such Act is amended by striking out "aged" 
and inserting in lieu thereof "aged and the disabled". 
(d) The Railroad Retirement Act of 1937 is a«iended by adding 
after section 21 the following: new section: 
42 u s e 13.95p. 
42 u s e 1395q. 
Ante, 
p. 1372. 
42 u s e 139Sr. 
Post, p. 1376. 
"eontinuous 
period of eligibil-
ity." 
Post, 
p. 1378. 
Ante, p. 1372. 
42 u s e 1395s. 
42 u s e 
139SII. 
45 u s e 228S-2. 
HOSPITAL INSURAXCE BEXEFITS FOR T H E DISABLED 
"SEC. 22. Individuals under age 65— 
"(1) who have been entitled to annuities for not less than 24 
consecutive months during each of which the first proviso of sec-
tion 3(e) could have applied on the basis of an application which 
has been filed under paragraph 4 or 5 of section 2(a), and are 
currently entitled to such annuities, or who are entitled to annui-
45 
use 228c. 
45 
use 228b. 
45 use 228S-2. 
1374 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
45 use 228b. 
ties imder paragraph 2 or 3 of section 2(a) and could have been 
paid annuities for not less than 24 consecutive months under sec-
42 use 423. 
tion 223 of the Social Security Act if their service as employees 
were included in the term 'employment' as defined in that Act, or 
"(2) who have been entitled to annunities under section 5(a) 
on the basis of disability, or could have been so entitled had they 
not been entitled on the basis of age or had they not been entitled 
under section 5(b) on the basis of having the custody of chil-
dren, for not less than 24 consecutive months during each of which 
the first proviso of section 3(e) could have been applied on the 
basis of disability if an application for disability benefits had been 
filed, or 
"(3) who have been entitled to annuities for not less than 24 
consecutive months under section 5(c) on the basis of a disability 
(within the meaning of section 5(1) (1) (ii)) or who could have 
been includible as disabled children for not less than 24 con-
secutive months in the computation of an annuity under the first 
proviso in section 3(e) and could currently be includible in such 
a computation, 
shall be certified by the Board in the same manner, for the same pur-
poses, and subject to the same conditions, restrictions, and other 
])rovisions as individuals specifically described in section 21, and also 
subject to the same conditions, restrictions, and other provisions as 
42 use 401. 
.^YQ disability beneficiaries under title I I of the Social Security Act 
in connection witli their eligibility for hospital insurance benefits 
4"use 13^5°' 
^"ider pait A of title XVIII of such Act and their eligibility to enroll 
under part B of such title X V I I I ; and for the purposes of tliis Act 
and title X V I I I of the Social Security Act, individuals certified as 
])rovided in this section shall be considered individuals described 
in and certified under such section 21. Notwithstanding the other 
provisions of this section it shall not a])ply to any individual who 
could not be taken into account on the basis of disability in calculating 
the annuity under the first proviso of section 3(e) Avithout regard to 
the second paragraph of such section." 
HOSPITAL INSURANCE BENKFITS FOR UNINSURED INDIVIDUALS NOT 
ELIGIBLE UNDER TRANSITIONAL PROVISION 
SEC. 202. Title X V I I I of tlie Social Security Act is amended by 
It ^l^J^" ?^^' 
adding after section 1817 the following new section: 
42 use 13951. 
*
^ 
*^ 
" H O S P I T A L I N S U R A N C E BENEFITS ?^0R I^NINSURED IXDHIDUALS NOT 
OTHERWISE ELIOIBLE 
"SEC. 1818. (a) Every individual who— 
" (1) has attained the age of 65, 
" (2) is enrolled under part B of this title, 
"(3) is a resident of the United States, and is either (A) a 
citizen or (B) an alien lawfully admitted for permanent r-esidence 
who has resided in the Ignited States continuously during the 5 
years immediately preceding the month in which he applies for 
enrollment under this section, and 
"(4) is not otherwise entitled to benefits under this part, 
shall be eligible to enroll in the insurance program established by this 
part. 
"(b) An individual may enroll under this section only in such man-
ner and form as may be prescribed in regulations, and only during 
an enrollment period prescribed in or under this section. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1375 
"(c) The provisions of section 1887 (except subsection (f) thereof), 
^nte.p. 1372. 
section 1838, subsection (c) of section 1839, and subsections (f) 
Ante, p. 1373. 
and (h) of section 1840 shall apply to persons authorized to enroll 
under this section except that— 
"(1) individuals who meet the conditions of subsection (a) 
(1), (3), and (4) on or before the last day of the seventh month 
after the month in which this section is enacted may enroll under 
this part and (if not already so enrolled) may also enroll under 
part B durinjr an initial general enrollment period which shall 
begin on the first day of the second month which begins after the 
date on which this section is enacted and shall end on the last 
day of the tenth month after the month in Avhich this Act is 
enacted; 
" (2) in the case of an individual who first meets the conditions 
of eligibility under this section on or after the first day of the 
eighth month after the month in which this section is enacted, the 
initial enrollment period shall begin on the first day of the third 
month before the month in which he first becomes eligible and shall 
end 7 months later; 
" (3) in the case of an individual who enrolls pursuant to para-
graph 
(1) of this subsection, entitlement to benefits shall 
begin on— 
"(A) the first day of the second month after the month in 
which he enrolls, 
"(B) July 1,1973, or 
"(C) the first day of the first month in which he meets 
the requirements of subsection (a), 
whichever is the latest; 
" (4) termination of coverage under this section by the filing of 
notice that the individual no longer wishes to participate in the 
hospital insurance program shall take effect at the close of the 
month following the month in which such notice is filed; 
" (5) an individual's entitlement under this section shall termi-
nate with the month before the first month in which he becomes 
eligible for hospital insurance benefits under section 226 of this 
Act or section 103 of the Social Security Amendments of 1965; and ptstl%!^i46V ^' 
upon such termination, such individual shall be deemed, solely 
42'use 426a. 
for purposes of hospital insurance entitlement, to have filed in 
such first month the application required to establish such entitle-
ment; and 
'• (6) termination of coverage for supplementary medical insur-
ance shall result in simultaneous termination of hospital inpui-ance 
benefits for uninsured individuals Avho are not otherwise entitled 
to benefits under this Act. 
"(d) (1) The monthly premium of each individual for each month 
Monthly pre-
in his coverage period before July 1974 shall be $33. 
'"^"'"^' 
"(2) The Secretary shall, during the last calendar quarter of each 
year, beginning in 1973, determine and promulgate the dollar amount 
(whether or not such dollar amount was applicable for premiums for 
any prior month) which shall be applicable for premiums for months 
occurring in the 12-month period commencing July 1 of the next year. 
Such amount shall be equal to $33, multiplied by the ratio of (A) 
the inpatient hospital deductible for such next year, as promulgated 
under section 1813(b)(2), to (B) such deductible promulgated for 
42 use lagse. 
1973. Any amount determined under the preceding sentence which is 
not a multiple of $1 shall be rounded to the nearest multiple of $1, or 
if midway between multiples of $1 to the next higher multiple of $1. 
"(e) Payment of the monthly premiums on behalf of any individual 
Ante, p. 1373. 
1376 
PUBLIC LAW 92-^03-OCT. 30, 1972 
[86 STAT. 
who meets the conditions of subsection (a) may be made by any pub-
lic or private agency or organization under a contract or other arrange-
ment entered nito between it and tlie Secretary if the Secretary 
determines that payment of such premiums under such contract or 
arrangement is administratively feasible. 
"(f) Amounts paid to the Secretary for coverage under this section 
shall be deposited in the Treasury to the credit of the Federal Hospital 
Insurance Trust Fund." 
AMOUNT OF SUPPLEMENTARY MEDICAL INSURANCE PREMIUM 
42usci395r. 
SEC. 203. (a) Sectiou 1839(b)(1) of the Social Security Act is 
amended b)^ inserting "and before July 1,1973," after "1967". 
(b) Section 1839(b)(2) of such Act is amended by striking out 
"thereafter" and inserting in lieu thereof "ending on or 
before 
December 31, 1971". 
(c) Section 1839 of such Act (as amended by section 201 (c) (4) and 
(5) of this Act) is further amended by redesignating subsections (c), 
(d), and (e) as subsections (d), (e), and (f), respectively, and by 
inserting after subsection (b) the following new subsection: 
"(c) (1) The Secretary shall, during December of 1972 and of each 
year thereafter, determine the monthly actuarial rate for enrollees age 
65 and over which shall be applicable for the 12-month period com-
mencing July 1 in the succeeding year. Such actuarial rate shall be the 
amount the Secretary estimates to be necessary so that the aggregate 
amount for such 12-month period with respect to those enrollees age 65 
and over will equal one-half of the total of the benefits and administra-
tive costs which he estimates will be payable from the Federal Supple-
mentary Medical Insurance Trust Fund for services performed and 
related administrative costs incurred in such 12-month period. In 
calculating the monthly actuarial rate, the Secretary shall include an 
appropriate amount for a contingency margin. 
"(2J The monthly premium of each individual enrolled under this 
part for each month after June 1973 shall, except as provided in sub-
section (d), be the amount determined under paragraph (3). 
"(3) The Secretary shall, during December of 1972 and of each year 
thereafter, determine and promulgate the monthly premium applicable 
for the individuals enrolled under this part for the 12-month period 
commencing July 1 in the succeeding year. The monthly premium shall 
be equal to the smaller of— 
"(A) the monthly actuarial rate for enrollees age 65 and over, 
determined according to paragraph (1) of this subsection, for that 
12-month period, or 
"(B) the monthly premium rate most recently promulgated by 
the Secretary under this paragraph or, in tlie case of the deter-
mination made in December 1971, such rate promulgated under 
subsection (b) (2) multiplied by the ratio of (i) the amount in 
column IV of the table which, by reason of the law in effect at 
the time the promulgation is made, will be in effect as of June 1 
next following such determination appears (or is deemed to 
appear) in section 215 (a) on the line which includes the figure '750' 
1334, 1369. 
j ^ column I I I of such table to (ii) the amoimt in column IV of 
the table which appeared (or was deemed to appear) in section 
215(a) on the line which included the figure '750' in column I I I 
as of June 1 of the year in which such determination is made. 
Whenever the Secretary promulgates the dollar amount which shall 
be applicable as the monthly premium for any period, he shall, at the 
time such promulgation is announced, issue a public statement setting 
forth the actuarial assumptions and bases emf)loyed by him in arriving 
Ante, 
pp. 1333, 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1377 
at the amount of an adequate actuarial rate for enrollees age 65 aiul 
over as provided in paragraph (1) and the derivation of the dolhir 
amounts specified in this paragraph. 
"(4) The Secretary shall also, during December of 1972 and of 
each year thereafter, determine the monthly actuarial rate for dis-
abled enrollees under age 65 which shall be applicable for the 
12-month period commencing July 1 in the succeeding year. Such 
actuarial rate shall be the amount the Secretary estimates to l>e neces-
sary so that the aggregate amount for such 12-month period with 
respect to disabled enrollees under age 65 will equal one-half of the 
total of the benefits and administrative costs which he estimates will be 
incurred in the Federal Supplementary Medical Insurance Trust Fund 
for such 12-month period with respect to such enrollees. In calculating 
the monthly actuarial rate under this paragraph, the Secretary shall 
include an appropriate amount for a contingency margin."' 
(d) (1) Section 1839(d) of such Act, as redesignated by subsection 
(c) of this section, is amended by inserting "or (c)'' after "subsection 
(b)". 
(2) Section 1839(f) of such Act, as redesignated by subsection (c) of 
this section, is amended by striking out "subsection (c)" and inserting 
in lieu thereof "subsection (d)". 
(e) Effective with respect to enrollee premiums payable for months 
Effective date. 
after June 1973, section 1844(a) (1) of such Act is amended to read as 
^^ f
*
^
'
- f 
J„^: 
p tt 
' 
\ 
/ \ 
/ 
42 u s e l395w. 
follows: 
" (1) (A) a Government contribution equal to the aggregate pre-
miums payable for a month for enrollees age 65 and over under 
this part and deposited in the Trust Fund, multiplied by the 
ratio of— 
"(i) twice the dollar amount of the actuarially adequate 
rate per enrollee age 65 and over as determined mider section 
1839(c) (1) for such month minus the dollar amount of the 
'^"^^' ^- ^^'^^• 
premium per enrollee for such month, as determined under 
section 1839(c) (3), to 
"(ii) the dollar amount of the premium per enrollee for 
such month, plus 
"(B) a Government contribution equal to the aggregate pre-
miums pavable for a month for enrollees under age 65 under this 
part and deposited in the Trust Fund, multiplied by the ratio of— 
"(i) twice the dollar amount of the actuarially adequate 
rate per enrollee under age 65 as determined under section 
1839(c) (4) for such montli minus the dollar amount of the 
pi-emium per enrollee for such month, as determined under 
section 1839(c) (3), to 
"(ii) the dollar amount of the premium per enrollee for 
such month." 
. , 
CHANGE I X SUPPLEMENTARY MEDICAL INSURANCE 
DEDUCTIBLE 
SEC. 204. (a) Section 1833(b) of the Social Security Act is amended 
jg sta^. 3
^
0
2
^
.
^ 
by striking out "shall be i-educed by a deductible of $50'' and inserting 
in lieu thereof "shall be i-educed by a deductible of $60"'. 
(b) Section 1835(c) of such Act is amended by striking out "but 
^i sta^-849. 
only if such charges tor such services do not exceed $50" and insert- 
"' 
ing in lieu thereof "but only if such charges for such services do not 
exceed the applicable supplementary medical insurance deductible". 
(c) The amendments made by this section shall be effective with 
Effective date. 
respect to calendar years after 1972 (except that, for purposes of 
applying clause (1) of the first sentence of section 1833(b) of the 
Social Security Act, such amendments shall be deemed to have taken supra. 
effect on January 1, 1972). 
423 
1378 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
AUTOMATIC EXROLLMEXT FOR SUPPLEMENTARY MEDICAL INSURANCE 
79 Stat. 304; 
SEC. 206. (a) Section 1837 of the Social Security Act is amended 
*^42*usc^13*95 
^^y ^^Idii^g ^t the end thereof the following new subsections: 
"(f) Any individual— 
Ante, p. 1372. 
"(1) who is eligible under section 1836 to enroll in the medical 
insurance program by reason of entitlement to hospital insurance 
benefits as described in paragraph (1) of such section, and 
"(2) whose initial enrollment period under subsection (d) 
begins after March 31, 1973, and 
"(3) who is residing in the United States, exclusive of Puerto 
Rico, 
shall be deemed to have enrolled in the medical insurance program 
established by this part. 
"(g) All of the provisions of this section shall apply to individuals 
satisfying subsection (f), except that— 
"(1) in the case of an individual who satisfies subsection (f) 
by reason of entitlement to disability insurance benefits described 
Ante, p. 1371. 
In scctiou 226(a)(2)(B), his initial enrollment period shall 
begin on the first day of the later of (A) April 1973 or (B) 
the third month before the 25th consecutive month of such 
entitlement, and shall reoccur with each continuous period of eli-
Ante.p. 1376. 
gibility (as defined in section 1839(e)) and upon attainment of 
age 65; 
"(2) (A) in the case of an individual who is entitled to monthly 
42 use 402, 
benefits under section 202 or 223 on the first day of his initial 
enrollment period or becomes entitled to monthly benefits under 
section 202 during the first 3 months of such period, his enroll-
ment shall be deemed to have occurred in the third month of his 
initial enrollment period, and 
"(B) in the case of an individual who is not entitled to bene-
fits under section 202 on the first day of his initial enrollment 
period and does not become so entitled during the first 3 months 
of such period, his enrollment shall be deemed to have occurred in 
the month in which he files the application establishing his entitle-
ment to hospital insurance benefits provided such filing occurs 
during the last 4 months of his initial enrollment period; and 
"(3) in the case of an individual who would otherwise satisfy 
subsection (f) but does not establish his entitlement to hospital 
insurance benefits until after the last day of his initial enroll-
ment period (as defined in subsection (d) of this section), his 
enrollment shall be deemed to have occurred on the first day of 
the earlier of the then current or immediately succeeding general 
enrollment period (as defined in subsection (e) of this section)." 
Ante. p. 1373. 
^^j Scctiou 1838(a) of such Act is amended— 
(1) by striking out the period at the end of subsection (a) 
and by inserting in lieu thereof "; or"; and 
(2) by adding at the end of subsection (a) the following new 
paragraph: 
"(3) (A) in the case of an individual w^ho is deemed to have 
enrolled on or before the last day of the third month of his initial 
enrollment period, the first day of the month in which he first 
meets the applicable requirements of section 1836 or July 1, 1973, 
whichever is later, or 
"(B) in the case of an individual who is deemed to have 
enrolled on or after the first day of the fourth month of his initial 
enrollment period, as prescribed under subparagraphs (B), (C), 
(D), and (E) of paragraph (2) of this subsection." 
(c) Section 1838(b) of such Act (as amended by section 257(a) of 
^^^t'c.^'.K'^^J' 
this Act) is further amended by adding at the end thereof the fol-
42 use 1395q. 
, 
. 
' 
, 
J 
fe 
J owing new paragraph: 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1379 
"Where an individual who is deemed to have enrolled for medical 
insurance pursuant to section 1837(f) files a notice before the first day 
^"'e- P- ^378. 
of the month in which his coverage period begins advising that he 
does not wish to be so enrolled, the termination of the coverage period 
resulting from such deemed enrollment shall take effect with the first 
day of the month the coverage would have been effective and such 
notice shall not be considered a disenrollment for the purposes of 
section 1837 (b). Where an individual who is deemed enrolled for medi- 
^°^'' P- ^'*'*^' 
cal insurance benefits pursuant to section 1837 (f) files a notice request-
ing termination of his deemed coverage in or after the month in which 
such coverage becomes effective, the termination of such coverage 
shall take effect at the close of the calendar quarter following the calen-
dar quarter in which the notice is filed." 
INCENTIVES FOR STATES TO ESTABLISH EFFECTIVE UTILIZATION 
REVIEW PROCEDURES UNDER 
MEDICAID 
SEC. 207. (a) (1) Section 1903 of the Social Security Act is amended giltf^ s/s"!^' 
by adding at the end thereof the following new subsections: 
42 use uWb. 
"(g)(1) With respect to amounts paid for the following services 
furnished under the State plan after June 30,1973 (other than services 
furnished pursuant to a contract with a health maintenance organiza-
tion as defined in section 1876), the Federal medical assistance per- 
Post, pp. 1396, 
centage shall be decreased as follows: After an individual has received ^'^^^' 
care as an inpatient in a hospital (including an institution for 
tuberculosis), skilled nursing home or intermediate care facility on 
60 days, or in a hospital for mental diseases on 90 days (whether or 
not such days are consecutive), during any fiscal year, which for pur-
poses of this section means the four calendar quarters ending with 
June 30, the Federal medical assistance percentage with respect to 
amounts paid for any such care furnished thereafter to such individual 
in the same fiscal year shall be decreased by 33l^ per centum thereof 
unless the State agency responsible for the administration of the plan 
makes a showing satisfactory to the Secretary that, with respect to 
each calendar quarter for which the State submits a request for pay-
ment at the full Federal medical assistance percentage for amounts 
paid for inpatient hospital services (including tuberculosis hospitals), 
skilled nursing home services, or intermediate care facility services 
furnished beyond 60 days (or inpatient mental hospital services fur-
nished beyond 90 days), there is in operation in the State an effective 
program of control over utilization of such services; such a showing 
must include evidence that— 
"(A) in each case for which payment is made under the State 
plan, a physician certifies at the time of admission, or, if later, 
the time the individual applies for medical assistance under the 
State plan (and recertifies, where such services are furnished over 
a period of time, in such cases, at least every 60 days, and accom-
panied by such supporting material, appropriate to the case 
involved, as niay be provided in regulations of the Secretary), 
that such services are or were required to be given on an inpatient 
basis because the individual needs or needed such services; and 
"(B) in each such case, such services were furnished under a 
plan established and periodically reviewed and evaluated by a 
physician; 
"(C) such State has in effect a continuous program of review 
of utilization pursuant to section 1902(a) (30) whereby the neces- 
^°^*' P- ^^le. 
sity for adnriission and the continued stay of each patient in such 
institution is periodically reviewed and evaluated (with such 
1380 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
frequency as may be prescribed in regulations of the Secretary) 
by medical and other professional personnel who are not them-
selves directly responsible for the care of the patient and who 
are not employed by or financially interested in any such insti-
tution ; and 
"(D) such State has an effective program of medical review of 
the care of patients in mental hospitals, skilled nursing homes, and 
intermediate care facilities pursuant to section 1902(a) (26) and 
85*stat^809°^' 
^^^^ whcreby the professional management of each case is re-
42 use 1396a. 
vicwed aud evaluated at least annually by independent profes-
sional review teams. 
In determining the number of days on which an individual has received 
services described in this subsection, there shall not be counted any 
days with respect to which such individual is entitled to have payments 
42 use i395d. made (in whole or in pail) on his behalf under section 1812, 
"(2) The Secretary shall, as part of his validation procedures under 
this subsection, conduct sample onsite surveys of private and public 
institutions in which recipients of medical assistance may receive care 
and services under a State plan approved under this title, and his find-
ings with respect to such surveys (RS well as the showings of the State 
agency required under this subsection) shall be made available for pub-
lic inspection. 
"(h) (1) If the Secretary determines for any calendar quarter begin-
ning after June 30, 1973, with respect to any State that there does not 
exist a reasonable cost differential between the statewide average cost 
of skilled nursing home services and the statewide average cost of 
intermediate care facility services in such State, the Secretary may 
reduce the amount which would otherwise be considered as expendi-
tures under the State plan by any amount which in his judgment is 
a reasonable equivalent of the difference between the amount of the 
expenditures by such State for intermediate care facility services and 
the amount that would have been expended by such State for such 
services if there had been a reasonable cost differential between the 
cost of skilled nursing home services and the cost of intermediate care 
facility services. 
"(2) In determining w^hether any such cost differential in any State 
is reasonable the Secretary shall take into consideration the range of 
such cost differentials in all States. 
Costdifferen- 
"(3) For the purposes of this subsection, the term 'cost differential' 
for any State for any quarter means, as determined by the Secretary 
on the basis of the data for the most recent calendar quarter for which 
satisfactory data are available, the excess of— 
"(A) the average amount paid in such State (regardless of the 
source of payment) per inpatient day for skilled nursing home 
services, over 
"(B) the average amount paid in such State (regardless of the 
source of payment) per inpatient day for intermediate care facility 
services. 
"eost.»» 
"(4) For purposes of this subsection, the term 'cost' shall mean 
amounts reimbursable by the State under a State plan approved under 
this title." 
42 use 1396b. 
(2) Section 1903(a) (1) of such Act is amended by inserting ", sub-
ject to subsections (g) and (h) of this section" after "section 1905(b)". 
Effective date. 
^j^^ rpj^g amendments made by subsection (a) shall, except as other-
wise provided therein, be effective July 1, 1973. 
tial 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1381 
COST-SHARING UNDER MEDICAID 
SEC. 208. (a) Section 1902(a) (14) of the Social Security Act is 
42 use 1396a. 
amended to read as follows: 
"(14) effective January 1, 1973, provide that— 
"(A) in the case of individuals receiving aid or assistance 
under a State plan approved under title I, X, XIV, or XVI, 
or part A of title IV, or who meet the income and resources , ^2 use 301, 
requirements of the one of such State plans which is goi. ' 
appropriate— 
"(i) no enrollment fee, premium, or similar charge, 
and no deduction, cost sharing, or similar charge with 
respect to the care and services listed in clauses (1) 
through (5) and (7) of section 1905(a), will be imposed 
42 use i396d. 
under the plan, and 
"(ii) any deduction, cost sharing, or similar charge 
imposed under the plan with respect to other care and 
services will be nominal in amount (as determined in 
accordance with standards approved by the Secretary and 
included in the plan), and 
"(B) with respect to individuals who are not receiving aid 
or assistance under any such State plan and who do not meet 
the income and resources requirements of the one of such 
State plans which is appropriate or who, after December 31, 
1973, are included under the State plan for medical assistance 
pursuant to section 1902(a) (10) (B) approved under title 
XIX— 
"(i) there shall be imposed an enrollment fee, pre-
mium, or similar charge which (as determined in accord-
ance with standards prescribed by the Secretary) is 
related to the individual's income, and 
"(ii) any deductible, cost-sharing, or similar charge 
imposed under the plan will be nominal;", 
(b) The amendment made by subsection (a) shall be effective Jan- 
Effective date. 
uary 1, 1973 (or earlier if the State plan so provided). 
MEDICAID CONDITIONS OF ELIGIBILITY FOR CERTAIN EMPLOYED FAMILIES 
SEC. 209. (a) Section 1902 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(e) Notwithstanding any other provision of this title, effective 
January 1, 1974, each State plan approved under this title must pro-
vide that each family which was eligible for assistance pursuant to 
part A of title IV in at least 3 of the 6 months immediately preceding 
the month in which such family became ineligible for such assistance 
because of increased income from employment, shall, while a member 
of such family is employed, remain eligible for such assistance for 4 
calendar months following the month in which such family would 
otherwise be determined to be ineligible for such assistance because of 
the income and resources limitations contained in such plan." 
(b) (1) Section 1902 of the Social Security Act, as amended by this 
section, is further amended by adding at the end thereof the following 
new subsection: 
"(f) Notwithstanding any other provision of this title, except as 
provided in subsection (e), no State shall be required to provide medi-
cal assistance to any aged, blind, or disabled individual (within the 
meaning of title XVI) for any month unless such State would be (or 
would have been) required to provide medical assistance to such indi-
vidual for such month had its plan for medical assistance approved 
under this title and in effect on January 1, 1972, been in effect in such 
1382 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Jiionth, except that for tliis purpose any siicli individual sliall be 
deemed eligible for medical assistance under such State plan if (in 
addition to meeting such other requirements as are or may be imposed 
under the State plan) the income of any such individual as determined 
42 use 1396b. 
in accordauce with section 1908(f) (after deducting such individual's 
42 use 1381. 
payment under title XVI, and incurred expenses for medical care as 
26 use 213. 
defined in section 213 of the Internal Revenue Code of 1954) is not in 
excess of the standard for medical assistance established under the 
State plan as in effect on January 1,1972." 
Effective date. 
(2) The amendment made by this subsection shall become effective 
on January 1,1974. 
PAYMENT UNDER MEDICARE TO INDIVIDUALS COVERED BY FEDERAL 
EMPLOYEES H E A L T H BENEFITS PROGRAM 
79 Stat. 325; 
SFC. 210. Sectiou 1862 of the Social Security Act is amended by 
^ ^ruse^l 3 95 
adding at the end thereof the following new subsection: 
"(c) No payment may be made under this title with respect to any 
item or service furnished to or on behalf of any individual on or after 
January 1, 1975, if such item or service is covered under a health 
benefits plan in which such individual is enrolled under chapter 89 
5 use 8901. 
of title 5, United States Code, unless prior to the date on which such 
item or service is so furnished the Secretary shall have determined and 
certified that such plan or the Federal employees health benefits 
program imder chapter 89 of such title 5 has been modified so as to 
assure that— 
"(1) there is available to each Federal employee or annuitant 
enrolled in such plan, upon becoming entitled to benefits under 
part A or B, or both parts A and B of this title, in addition to the 
health benefits plans available before he becomes so entitled, one 
or more health benefits plans which offer protection supplement-
ing the protection he has under this title, and 
"(2) the Government or such plan will make available to such 
Federal employee or annuitant a contribution in an amount at 
least equal to the conti-ibution which the Government makes 
toward the health insurance of any employee or annuitant enrolled 
for high option coverage under the Government-wide plans 
established under chapter 89 of such title 5, with such contribution 
being in the form of (A) a contribution toward the supplementary 
protection referred to in paragraph (1), (B) a payment to or on 
behalf of such employee or annuitant to offset the cost to him of 
his coverage under this title, or (C) a combination of such con-
tribution and such payment.'' 
PAYMENT 
UNDER 
MEDICARE 
FOR 
CERTAIN 
I N P A T I E N T 
HOSPITAL 
AND 
RELATED 
PHYSICIANS' 
SERVICES 
FURNISHED 
OUTSIDE 
T H E 
UNITED 
STATES 
42 use i395f. 
SEC. 211. (a) Section 1814(f) of the Social Security Act is amended 
to read as follows: 
''Payment for (^ertain Inpatient Hospital Services Furnished Outside 
the Ignited States 
"(f) (1) Payment shall be made for inpatient hospital services fur-
nished to an individual entitled to hospital insurance benefits under 
Ante. p. 1371. 
sectiou 226 by a hospital located outside the United States, or under 
42 use 1395X. arrangements (as defined in section 1861 (w)) Avith it, if— 
"(A) such individual is a resident of the United States, and 
"(B) such hospital was closer to, or substantially more acces-
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1383 
sible from, the residence of such individual than the nearest hos-
pital within the L^nited States which was adequately equipped 
to deal with, and was available for the treatment of, such indi-
vidual's illness or injury. 
"(2) Payment may also be made for emergency inpatient hospital 
services furnished to an individual entitled to hospital insurance ben-
efits under section 226 by a hospital located outside the United States 
"(A) such individual was physically present— 
"(i) in a place within the United States; or 
"(ii) at a place within Canada while traveling without 
unreasonable delay by the most direct route (as determined 
by the Secretary) between Alaska and another State; 
at the time the emergency which necessitated such inpatient hos-
pital services occurred, and 
"(B) such hospital was closer to, or substantially more acces-
sible from, such place than the nearest hospital within the 
United States which was adequately equipped to deal with, and 
was available for the treatment of, such individual's illness or 
injury. 
"(3) Payment shall be made in the amount provided under sub-
section (b) to any hospital for the inpatient hospital services 
described in paragraph (1) or (2) furnished to an individual by the 
hospital or under arrangements (as defined in section 1861 (w)) with 
it if (A) the Secretary would be required to make such payment if 
the hospital had an agreement in effect under this title and otherwise 
met the conditions of payment hereunder, (B) such hospital elects 
to claim such payment, and (C) such hospital agrees to comply, with 
respect to such services, with the provisions of section 1866 (a). 
"(4) Payment for the inpatient hospital services described in para-
graph (1) or (2) furnished to an individual entitled to hospital insur-
ance benefits under section 226 may be made on the basis of an itemized 
bill to such individual if (A) payment for such services cannot be 
made under paragraph (3) solely because the hospital does not elect 
to claim such payment, and (B) such individual files application 
(submitted within such time and in such form and manner and by 
such person, and continuing and supported by such information as 
the Secretary shall by regulations prescribe) for reimbursement. The 
amount payable with respect to such services shall, subject to the 
provisions of section 1813, be equal to the amount which would be pay-
able under subsection (d) (3)." 
(b) Section 1861(e) of such Act is amended— 
(1) by striking out "except for purposes of sections 1814(d) 
and 1835 (b)" and inserting in lieu thereof "except for purposes of 
sections 1814(d), 1814(f), and 1835(b)"; 
(2) by inserting "section 1814(f) (2)," immediately after "For 
purposes of sections 1814(d) and 1835(b) (including determina-
tion of whether an individual received inpatient hospital services 
or diagnostic services for purposes of such sections),"; and 
(3) by inserting immediately after the third sentence the fol-
lowing new sentence: "For purposes of section 1814(f) (1), such 
term includes an institution which (i) is a hospital for purposes 
of sections 1814(d), 1814(f) (2), and 1835(b) and (ii) is accred-
ited by the Joint Commission on Accreditation of Hospitals, or is 
accredited by or approved by a program of the country in which 
such institution is located if the Secretary finds the accreditation 
or comparable approval standards of such program to be essen-
tially equivalent to those of the Joint Commission on Accredita-
tion of Hospitals." 
Ante, 
p. 1371. 
42 u s e 1395X. 
42 u s e 1395CC. 
42 u s e 1395e. 
42 u s e 1395x. 
42 u s e 1395f. 
Ante, p. 1382. 
42 u s e 139Sn. 
82-081 O - 73 - 90 
1384 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
42 use i395y. 
(c) (1) Sectioii 1862(a) (4) of such Act is amended— 
(A) by striking out "emergency"; and 
(B) by inserting after "1814(f)" the following: 
"and, subject to such conditions, limitations, and requirements as are 
provided under or pursuant to this title, physicians' services and ambu-
lance services furnished an individual in conjunction with such inpa-
tient hospital services but only for the period during which such 
inpatient hospital services were furnished". 
(2) Section 1861 (r) of such Act (as amended by sections 256(b) 
42 use 1395X. 
aud 264 of this Act) is further amended by adding at the end thereof 
1449! 14T1'. 
' the following new sentence: "For the purposes of section 1862(a) (4) 
and subject to the limitations and conditions provided in the previous 
sentence, such term includes a doctor of one of the arts, specified in 
such previous sentence, legally authorized to practice such art in the 
country in which the inpatient hospital services (referred to in such 
section 1862(a) (4)) are furnished." 
42 use 1395U. 
(3) Section 1842(b) (3) (B) (ii) of such Act is amended by striking 
out "service;" and inserting in lieu thereof the following: "service 
(except in the case of physicians' services and ambulance service 
furnished as described in section 1862(a) (4), other than for purposes 
42 use i395gg. of section 1870(f));". 
42 use 1395Z. 
(4) Section 1838(a)(1) of such Act is amended by striking out 
"and" before "(B)", and by inserting before the semicolon at the end 
thereof the following: ", and (C) with respect to expenses incurred for 
those physicians' services for which payment may be made under this 
part that are described in section 1862(a) (4), the amounts paid shall 
be subject to such limitations as may be prescribed by regulations". 
Effective date. 
((J) The amendments made by this section shall applv to services 
furnished with respect to admissions occurring after December 31, 
1972. 
OPTOMETRISTS' SERVICES UNDER MEDICAID 
42 use i396d. 
SEC. 212. (a) Section 1905 of the Social Security Act is amended 
by inserting at the end thereof the following ncAv subsection: 
"(e) In the case of any State the State plan of which (as approved 
imder this title) — 
"(1) does not provide for the payment of services (other than 
42 use 1396a. 
services covered under section 1902(a) (12)) provided by an 
optometrist; but 
"(2) at a prior period did provide for the payment of services 
referred to in paragraph (1) ; 
services^'*'^"^' 
^^^ tcTm 'physiciaus' services' (as used in subsection (a)(5)) shall 
include services of the type which an optometrist is legally authorized 
to perform where the State plan specifically provides that the term 
'physicians' services', as employed m such plan, includes services of 
the type which an optometrist is legally authorized to perform, and 
shall be reimbursed whether furnished by a physician or an 
optometrist." 
Effective date. 
(b) The provlsions of subsection (e) of section 1905 of the Social 
Security Act (as added by subsection (a) of this section) shall be 
applicable in the case of services performed on or after the date of 
enactment of this Act. 
LIMITATION ON LIABILITY OF BENEFICIARY WHERE MEDICARE CLAIMS 
ARE DISALLOWED 
SEC. 213. (a) Title X V I I I of the Social Security Act, as amended 
i4r9°*i'420* ^^^^' ^y sections 226, 242, and 243 of this Act, is further amended by adding 
at the end thereof the following new section: 
86 STAT. ] 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
1385 
" L T M I T A T I O X O X L I A B I L I T Y OF BENErlCIARY WHERE MEDICARE CLAIMS 
ARE DISALLOWED 
"SEC. 1879. (a) Where— 
"(1) a determination is made that, by reason of section 1862(a) 
(1) or (9), payment may not be made under part A or part B 
42 use i395y. 
of this title for any expenses incurred for items or services fur- 
42 use 1395c, 
nished an individual by a provider of services or by another per- ^^^^J-
son pursuant to an assignment under section 1842(b) (3) (B) (ii), 
^"'«'' P- I384. 
and 
"(2) both such individual and such provider of services or 
such other person, as the case may be, did not know, and could 
not reasonably have been expected to know, that payment would 
not be made for such items or services under such part A or part B, 
then to the extent permitted by this title, payment shall, notwithstand-
ing such determination, be made for such items or services (and for 
such period of time as the Secretary finds will carry out the objectives 
of this title), as though section 1862(a) (1) and section 1862(a)(9) 
did not apply. In each such case the Secretary shall notify both such 
individual and such provider of services or such other person, as the 
case may be, of the conditions under which payment for such items 
or services was made and in the case of comparable situations arising 
thereafter with respect to such individual or such provider or such 
other person, each shall, by reason of such notice (or similar notices 
provided before the enactment of this section), be deemed to have 
knowledge that payment cannot be made for such items or services or 
reasonably comparable items or services. 
"(b) In any case in which the provisions of paragraphs (1) and 
(2) of subsection (a) are met, except that such provider or such 
other person, as the case may be, knew, or could be expected to know, 
that payment for such services or items could not be made under such 
l)art A or part B, then the Secretary shall, upon proper application 
filed within such time as may be prescribed in regulations, indemnify 
tlie individual (referred to in such paragraphs), subject to the deducti-
ble and coinsurance provisions of this title, for any payments received 
from such individual by such provider or such other person, as the 
case may be, for such items or sendees. Any payments made by the 
Secretary as indemnification shall be deemed to have been made to 
such provider or such other person, as the case may be, and shall be 
treated as overpayments, recoverable from such provider or such other 
person, as the case may be, under applicable provisions of law. In 
each such case the Secretary shall notify such individual of the con-
ditions under which indemnification is made and in the case of com-
]>arable situations arising thereafter with respect to such individual, 
he shall, by reason of such notice (or similar notices provided before 
the enactment of this section), be deemed to have knowledge that pay-
ment cannot be made for such items or services. 
"(c) No payments shall be made under this title in any cases in 
which the provisions of paragraph (1) of subsection (a) are met, 
but both the individual to whom the items or services were furnished 
and the provider of service or other person, as the case may be, who 
furnished the items or services knew, or could reasonably have been 
expected to know, that payment could not be made for items or serv-
ices under part A or part B by reason of section 1862 (a) (1) or (a) (9). 
"(d) In any case arising under subsection (b) (but without regard 
to whether payments have been made by the individual to the provider 
or other person) or subsection (c), the provider or other person shall 
have the same rights that an individual has under section 1869(b) 
Post, p. i464. 
(when the determination is under part A) or section 1842(b) (3) (C) 
^°®'' P* ^'*'*^-
1386 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 1395J. 
Effective date. 
42 u s e 1395c, 
1395J. 
(when tlie determination is under part B) wlien the amount of benefit 
or payments is in controversy, except tliat such rights may, under pre-
scribed regulations, be exercised by such provider or other person only 
after the Secretary determines that the individual will not exercise 
such rights under such sections." 
(b) The amendments made by this section shall be effective with 
respect to claims under part A or part B of title X V I I I of the Social 
Security Act, filed with respect to items or services furnished after 
the date of the enactment of this Act. 
42 u s e 1301. 
42 u s e 701, 
1395, 1396. 
58 Stat. 682. 
42 u s e 201 
note. 
77 Stat. 282. 
42 u s e 2661 
note. 
LIMITATIOX OX FEDERAL rAKTICIPATION FOR CAPITAL 
EXPEXDITURES 
SEC. 221. (a) Title X I of the Social Security Act is amended by 
adding at the end thereof the following new section: 
" L I M I T A T I O N 
O X FEDERAL PARTK IPATIOX FOR CAPITAL EXPEXDITt'RES 
"SEC. 1122. (a) The purpose of this section is to assure that Federal 
funds appropriated under titles V, XVIII, and X I X are not used to 
support unnecessary capital expenditures made by or on behalf of 
health care facilities or health maintenance organizations which are 
reimbursed under any of such titles and that, to the extent possible, 
reimbursement under such titles shall support planning activities with 
respect to health services and facilities in the various States. 
(b) The Secretary, after consultation with the Governor (or other 
chief executive officer) and wdth appropriate local public officials, shall 
make an agreement with any State which is able and willing to do 
so under which a designated planning agency (which shall be an agency 
described in clause (ii) of subsection (d)(1)(B) that has a govern-
ing body or advisory board at least half of whose members represent 
consumer interests) will— 
"(1) make, and submit to the Secretary together with such sup-
porting materials as he may find necessary, findings and recom-
mendations with respect to capital expenditures proposed by or 
on behalf of any health care facility or health maintenance 
organization in such State within the field of its responsibilities, 
(2) receive from other agencies described in clause (ii) of 
subsection (d)(1)(B), and submit to the Secretary together with 
such supporting material as he may find necessary, the findings 
and recommendations of such other agencies with respect to 
capital expenditures proposed by or on behalf of health care 
facilities or health maintenance organizations in such State within 
the fields of their respective responsibilities, and 
"(3) establish and maintain procedures pursuant to which a 
person proposing any such capital expenditure may appeal a 
recommendation by the designated agency and will be granted 
an op])ortunity for a fair hearing by such agency or person other 
than the designated agency as the Governor (or other chief execu-
tive officer) may designate to hold such hearings, 
whenever and to the extent that the findings of such designated agency 
or any such other agency indicate that any such expenditure is not 
consistent with the standards, criteria, or plans developed pursuant 
to the Public Health Service Act (or the Mental Retardation Facilities 
and Community Mental Health Centers Construction Act of 1963) to 
meet the need for adequate health care facilities in the area covered 
by the plan or plans so developed. 
"(c) The Secretary shall pay any such State from the Federal 
Hospital Insurance Trust Fund, in advance or by way of reimburse-
ment as may be provided in the agreement with it (and may make 
291d. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1387 
adjustments in such i)ayments on account of overpayments or under-
payments previously made), for the reasonable cost of performing the 
functions specified in subsection (b). 
''(d)(1) Except as provided in paragraph (2), if the Secretary 
determines that— 
"(A) neither the planning agency designated in the agreement 
described in subsection (b) nor an agency described in clause (ii) 
of sub[)aragraph (B) of this jjaragraph had been given notice 
of any proposed capital expenditure (in accordance with such 
procedure or in such detail as may be required by such agency) 
at least 60 days i)rior to obligation for such expenditure; or 
'''(B)(i) the planning agency so designated or an agency so 
described had i-eceived such timely notice of the intention to make 
such capital expenditure and had, within a reasonable period 
after receiving such notice and ])i'ior to obligation for such 
expenditure, notified the person proposing such expenditure that 
the expenditure would not be in conformity with the standards, 
critei-ia, or plans developed by such agency or any other agency 
described in clause (ii) for adecpiate health care facilities in such 
State or in the area for which such other agency has responsibility, 
and 
"'(ii) the planning agency so designated had, prior to submit-
ting to the Secretary the findings referred to in subsection (b) — 
''(I) consulted with, and taken into consideration the find-
ings and recommendations of, the State planning agencies 
established pursuant to sections 314(a) and 604(a) of the 
Public Health Service Act (to the extent that either such ^
„
'
*
,
2 "^^ 2^^' 
agency is not the agency so designated) as well as the public 
or nonprofit private agency or organization responsible for 
the comprehensive regional, metropolitan area, or other local 
area plan or plans referred to in section 814(b) of the Public 
Health Service Act and covering the area in which the health 
care facility or health maintenance organization proposing 
such capital expenditure is located (where such agency is not 
the agency designated in the agreement), or, if there is no 
such agency, such other public or nonprofit private agency 
or organization (if any) as performs, as determined in accord-
ance with criteria included in regulations, similar functions, 
and 
"(II) granted to the person proposing such capital expend-
iture an opportunity for a fair hearing with respect to 
such findings; 
then, for such period as he finds necessary in any case to effectuate the 
purpose of this section, he shall, in detei'mining the Federal payments 
to be made under titles V, XVIII, and X I X with respect to services 
42 use 701, 
furnished in the health care facility for which such capital expendi-
ture is made, not include any amount which is attributable to deprecia-
tion, interest on borrowed funds, a return on equity capital (in the case 
of proprietary facilities), or other expenses related to such capital 
expenditur-e. With respect to any organization which is reimbursed 
on a per capita basis, in determining the Federal payments to be 
made under titles V, XVIII, and XIX, the Secretary shall exclude an 
amount Avhicli in his judgment is a reasonable equivalent to the amount 
which would otherwise be excluded under this subsection if payment 
were to be made on othei' than a per capita basis. 
"(2) If the Secretary, after submitting the matters involved 
to the advisory council established or designated under subsection 
(i), determines that an exclusion of expenses related to any capital 
expenditure of any health care facility or health maintenance organi-
zation would discoirrage the operation or expansion of such facility 
1395,1396. 
1388 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 701, 
1395, 1396. 
"Capital ex-
penditure." 
National ad-
visory council, 
establishment. 
Membership. 
or oi-ganization, or of any facility of sucli organization, which 
has demonstrated to his satisfaction proof of capability to provide 
comprehensive health care services (including institutional services) 
efficiently, effectively, and economically, or would otherwise be incon-
sistent with the effective organization and delivery of health services 
or the effective administration of title V, XVIII, or XIX, he shall 
not include such expenses pursuant to paragraph (1). 
"(e) Where a person obtains under lease or comparable arrangement 
any facility or part thereof, or equipment for a facility, which would 
have been siibject to an exclusion under subsection (d) if the person 
had acquired it by purchase, the Secretary shall (1) in computing 
such person's rental expense in determining the Federal payments 
to be made under titles V, XVIII, and X I X with respect to services 
furnished in such facility, deduct the amount which in his judgment 
is a reasonable equivalent of the amount that would have been excluded 
if the person had acquired such facility or such equipment by purchase, 
and (2) in computing such pei-son's return on equity capital deduct 
any amount dej)osited under the terms of the lease or comparable 
arrangement. 
"(f) Any pei-son dissatisfied with a determination by the Secretary 
under this section may within six months following notification of such 
determination request the Secretary to reconsider such determination. 
A determination by the Secretary imder this section shall not be 
subject to administrative or judicial review. 
"(g) For the puriDOses of this section, a 'capital expenditure" is an 
expenditure which, under generally accepted accounting principles, 
is not properly chargeable as an expense of operation and mainte-
nance and which (1) exceeds $100,000, (2) changes the bed capacity of 
the facility M'ith respect to which such expenditure is made, or (3) 
substantiailv changes the services of the facility with respect to which 
such expenditure is made. For purj^oses of clause (1) of the preceding 
sentence, the cost of the studies, surveys, designs, plans, working 
drawings, specifications, and other activities essential to the acquisi-
tion, improvement, expansion, or replacement of the plant and equip-
ment with respect to which such expenditure is made shall be 
included in determining whether such expenditure exceeds $100,000. 
"(h) The provisions of this section shall not apply to Christian 
Science sanatoriums operated, or listed and certified, by the First 
Church of Christ, Scientist, Boston, Massachusetts. 
"(i)(l) The Secretary shall establish a national advisory council, 
or designate an appropriate existing national advisory council, to 
advise and assist him in the preparation of general regulations to carry 
out the purposes of this section and on policy matters arising in the 
administr'ation of this section, including the coordination of activities 
under this section with those under other parts of this Act or under 
other Federal or federally assisted health programs. 
"(2) The Secretary shall make appropriate provision for consulta-
tion between and coordination of the work of the advisory council 
established or designated under paragraph (1) and the Federal Hos-
])ital Council, the National Advisory Health Council, the Health 
Insurance Benefits Advisory Council, and other appropriate national 
advisory councils with respect to matters bearing on the purposes and 
administration of this section and the coordination of activities under 
this section with related Federal health programs. 
"(3) If an advisory council is established by the Secretary under 
paragraph (1). it shall be composed of members who are not otherwise 
in the regular full-time employ of the United States, and who shall 
be appointed by the Secretary without regard to the civil service laws 
from among leaders in the fields of the fundamental sciences, the med-
86 STAT. ] 
PUBLIC LAW 92^03-OCT. 30, 1972 
1389 
ical sciences, and the organization, delivery, and financing of health 
care, and persons who are State or local officials or are active in com-
munity affairs or public or civic affairs or who are representative of 
minority groups. 5lembers of such advisory council, while attending 
meetings of the council or otherwise serving on business of the council, 
shall be entitled to receive compensation at rates fixed by the Secretary, 
but not exceeding the maximum rate specified at the time of such serv-
ice for grade GS-18 in section 5332 of title 5, United States Code, ^^\^^^ ^^^^ 
including traveltime, and while away from their homes or regular 
places of business they may also be allowed travel expenses, including 
per diem in lieu of subsistence, as authorized by section 5703 (b) of such 
title 5 for pei-sons in the Government service employed intermittently." 
^o ^'^t- 499. 
(b) The amendment made by subsection (a) shall apply only with 
Effective date, 
respect to a capital expenditure the obligation for which is incurred 
by or on behalf of a health cai-e facility or health maintenance 
organization subsequent to whichever of the following is earlier: (A) 
December 31, 1972, or (B) with respect to any State or any part 
thereof specified by such State, the last day of the calendar quarter 
in which the State requests that the amendment made by subsection 
(a) of this section apply in such State or such part thereof. 
(c)(1) Section 505(a)(6) of such Act (as amended by section 
232(b) of this Act) is further amended by inserting ", consistent 
Posf, p. uii. 
with section 1122," after "standards" where it first appears. 
(2) Section 506 of such Act (as amended by sections 224(d), 229 
(d). 233(d), and 237(b) of this Act) is further amended by adding 
''°«^ P- ^^^S. 
at the end thereof the following new subsection: 
"(g) For limitatioji on Federal participation for capital expendi-
tures Avhich are out of conformity with a comprehensive plan of a 
State or area wide planning agency, see section 1122." 
^"fe. p. lase. 
(3) Clause (2) of the second sentence of section 509(a) of such 
Act is amended by inserting ", consistent with section 1122," after 
''^ "^^ ^°^* 
"standards". 
(4) Section 1861 (v) of such Act is amended by adding at the end 
^^ usc u9s 
thereof the following new paragraph: 
"(5) For limitation on Federal participation for capital expendi-
tures which are out of conformity with a comprehensive plan of a 
State or areawide planning agency, see section 1122." 
(5) Section 1902(a) (13) (D) of such Act (as amended by section 
232(a) of this Act) is further amended by inserting ", consistent with 
^°s'' P- ^^lo. 
s?ction 1122," after "standards" where it fiist appears. 
(6) Section 1903(b) of such Act is amended by adding at the end 
'*2 use 1396b. 
thereof the following new paragraph: 
"(3) For limitation on Federal participation for capital expendi-
tures which are out of conformity with a comprehensive plan of a 
State or areawide planning agency, see section 1122." 
(d) In the case of a health care facility providing health care serv-
ices as of December 18, 1970, which on such date is committed to a 
formal plan of expansion or replacement, the amendments made by 
the preceding provisions of this section shall not apply with respect to 
such expenditures as may be made or obligations incurred for capital 
items included in such plan where preliminary expenditures toward 
the plan of expansion or replacement (including payments for studies, 
surveys, designs, plans, working drawings, specifications, and site 
acquisition, essential to the acquisition, improvement, expansion, or 
replacement of the health care facility or equipment concerned) of 
$100^000 or more, had been made during the three-year period ended 
December 17,1970. 
1390 
PUBLIC LAW 92-603~OCT. 30, 1972 
[86 STAT. 
DKMOXSTKATIOXS AXl) HEPOKTS ; rKOSPECTIVE REIMBURSEMENT; EXTENDED 
C A R E ; INTERMEDIATE CARE AND HOMEMAKER SERVICES; AMBULATORY 
SURGICAL C E N T E R S ; 
P H Y S I C I A N S ' 
A S S I S T A N T S ; PERFORMANCE INCEN-
TIVE CONTRACTS 
SEC. 222. (a) (1) The Secretary of Health, Education, and "Welfare, 
directly or through contracts with, or grants to, public or private 
agencies or organizations, shall develop and carry out experiments 
and demonstration projects designed to determine the relative advan-
tages and disadvantages of various alternative methods of making 
payment on a prospective basis to hospitals, skilled nursing facilities, 
and other providers of services for care and services provided by them 
42 use 1395. 
under title X V I I I of the Social Security Act and under State plans 
701^ "^^ ^^^^' 
approved under titles X I X and V of such Act, including alternative 
methods for classifying providers, for establishing prospective rates 
of payment, and for implementing on a gradual, selective, or other 
basis the establishment of a prospective payment system, in order to 
stimulate such providers through positive (or negative) financial 
incentives to use their facilities and pereonnel more efficiently and 
thereby to reduce the total costs of the health programs involved 
without adversely aft'ecting the quality of services by containing or 
lowering the rate of increase in provider costs that has been and is 
being experienced under the existing system of retroactive cost reim-
bursement. 
(2) The experiments and demonstration projects developed under 
paragraph (1) shall be of sufficient scope and shall be carried out on a 
wide enough scale to permit a thorough evaluation of the alternative 
methods of prospective payment under consideration while giving 
assurance that the results derived from the experiments and projects 
will obtain generally in the operation of the programs involved (with-
out committing such programs to the adoption of any prospective 
payment system either locally or nationally). 
(3) In the case of any experiment or demonstration project under 
paragraph (1), the Secretary may waive compliance with the require-
ments of titles XVIII, X I X , and V of the Social Security Act insofar 
as such requirements relate to methods of payment for services pro-
vided; and costs incurred in such experiment or project in excess of 
those which would otherwise be reimbursed or paid under such titles 
may be reimbursed or paid to the extent that such waiver applies to 
them (with such excess being borne by the Secretary). No experiment 
or demonstration project shall be developed or carried out under para-
graph (1) until the Secretary obtains the advice and recommendations 
of specialists who are competent to evaluate the proposed experiment 
or project as to the soundness of its objectives, the possibilities of 
securing productive results, the adequacy of resources to conduct it, 
and its relationship to other similar experiments or projects already 
completed or in process; and no such experiment or project shall be 
actually placed in operation unless at least 30 days prior thereto a 
written report, prepared for purposes of notification and information 
only, containing a full and complete description thereof has been trans-
mitted to the Committee on Ways and Means of the House of Repre-
sentatives and to the Committee on Finance of the Senate. 
(4) Grants, payments under contracts, and other expenditures made 
for experiments and demonstration projects under this subsection 
shall be made in appropriate part from the Federal Hospital Insurance 
42 use 13951. 
Trust Fund (established by section 1817 of the Social Security Act) 
and the Federal Supplementary Medical Insurance Trust Fund (estab-
42 use i3 95t, 
lished by section 1841 of the Social Security Act) and from funds 
appropriated under titles V and X I X of such Act. Grants and pay-
ments under contracts may be made either in advance or by way of 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1391 
reimbursement, as may be determined by tlie Secretary, and shall be 
made in such installments and on such conditions as the Secretary 
Hnds necessary to carry out the purpose of this subsection. With 
respect to any such grant, payment, or other expenditure, the amount to 
be paid from each of such trust funds (and from funds appropriated 
under such titles V and X I X ) shall be determined by the Secretary, i^g^^^'^ ^°^' 
giving due regard to the purposes of the experiment or project 
involved. 
(5) The Secretary shall submit to the Congress no later than July 
^Report to Con-
1, 1974, a full report on the experiments and demonstration projects 
carried out under this subsection and on the experience of other pro-
grams with respect to prospective reimbursement together with any 
related data and materials which he may consider appropriate. Such 
report shall include detailed recommendations with respect to the 
specific methods which could be used in the full implementation of a 
system of prospective payment to providers of services under the pro-
grams involved. 
(b) (1) Section 402(a) of the Social Security Amendments of 1967 
si stat. 930. 
is amended to read as follows: 
^^ ^^^ i395b-i. 
"(a)(1) The Secretary of Health, Education, and Welfare is 
authorized, either directly or through grants to public or nonprofit 
private agencies, institutions, and organizations or contracts with 
public or private agencies, institutions, and organizations, to develop 
and engage in experiments and demonstration projects for the follow-
ing purposes: 
" (A) to determine whether, and if so which, changes in methods 
of payment or reimbureement (other than those dealt with in 
section 222(a) of the Social Security Amendments of 1972) for 
^"^e, p. 1390. 
health care and services under health programs established by the 
Social Security Act, including a change to methods based on 
^^ ^^^- ^^^^ 
negotiated rates, would have the effect of increasing the efficiency 
and economy of health services under such programs through the 
creation of additional incentives to these ends without adversely 
affecting the quality of such services; 
"(B) to determine whether payments for services other than 
those for which payment may be made under such programs (and 
which are incidental to services for which payment may be made 
under such programs) would, in the judgment of the Secretary, 
result in more economical provision and more effective utilization 
of services for which payment may be made under such program, 
where such services are furnished by organizations and institu-
tions which have the capability of providing— 
" (i) comprehensive health care services, 
"(ii) mental health care services (as defined by section 
401(c) of the Mental Retardation Facilities and Community 
Health Centers Construction Act of 1963), 
77 stat .296. 
"(iii) ambulatory health care services (including surgical 
^^ ^^^ ^691. 
services provided on an outpatient basis), or 
"(iv) institutional services which may substitute, at lower 
cost, for hospital care; 
"(C) to determine whether the rates of payment or reimburse-
ment for health care services, approved by a State for purposes 
of the administration of one or more of its laws, when utilized to 
determine the amount to be paid for services furnished in such 
State under the health programs established by the Social Secu-
rity Act, would have the effect of reducing the costs of such pro-
grams without adversely affecting the quality of such services; 
"(D) to determine whether payments under such programs 
based on a single combined rate of reimbursement or charge for 
1392 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
tlie teaching activities and patient care Avliich residents, interns, 
and supervisino- physicians render in connection with a graduate 
medical education program in a patient facility Avould result in 
more equitable and economical patient care arrangements without 
adversely affecting the quality of such care; 
"(E) to determine whether coverage of intermediate care facil-
ity services antl homemaker services would provide suitable alter-
natives to posthospital benefits presently provided under title 
42 use 1395. 
X V I I I of the Social Security Act; such experiment and demon-
stration projects may include: 
"(i) counting each day of care in an intermediate care 
facility as one day of care in a skilled nursing facility, if such 
care was for a condition for which the individual was 
hospitalized, 
"(ii) covering the services of homemakers for a maximum 
of 21 days, if institutional services are not medically appro-
" 
priate, 
. o 
' / 
"(iii) determining whether such coverage would reduce 
' 
'' 
' 
long-range costs by reducing the lengths of stay in hospitals 
and skilletl nui'sing facilities, and 
"(iv) establishing alternative eligibility requirements and 
determining the probable cost of applying each alternative, 
if the project suggests that such extension of coverage would 
be desirable; 
" (F) to determine whether, and if so which type of, fixed price 
or performance incentive contract would have the effect of induc-
ing to the greatest degree effective, efficient, and economical per-
" ' 
^-'* 
formance of agencies and organizations making payment under 
agreements or contracts with the Secretary for health care and 
services under health programs established by the Social Security 
Act; 
"(G) to determine under what circumstances payment for 
, 
services would be appropriate and the most appropriate, equitable, 
and noninflationary methods and amounts of reimbursement 
luider health care programs established by the Social Security 
Act for services, which are performed independently by an assist-
ant to a physician, including a nurse practitioner (whether or not 
performed in the office of or at a place at which such physician is 
physically present), and— 
.: 
"(i) which such assistant is legally authorized to perform 
J 
by the State or political subdivision wherein such services are 
performed, and 
" (ii) for which such physician assumes full legal and ethi-
'• 
cal responsibility as to the necessity, propriety, and quality 
thereof; 
"(H) to establish an experimental program to provide day-care 
services, which consist of such personal care, supervision, and 
services as the Secretary shall by regulation prescribe, for individ-
uals eligible to enroll in the supplemental medical insurance 
program established under part B of title XVIII and title X I X 
42 use i395j, 
of the Social Security Act, in day-care centers which meet such 
standards as the Secretary shall by regulation establish; and 
"(I) to determine whether the services of clinical psychologists 
may be made more generally available to persons eligible for serv-
ices under titles X V I I I and X I X of this Act in a manner 
consistent with quality of care and equitable and efficient admin-
istration. 
42 u s e 1305. 
1396 
42 use 13951, 
42 u s e 1395t. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1393 
For purposes of this subsection, 'health programs established by the 
Definition. 
Social Security Act' means the program established by title X V l I I 
of such Act, a program established by a plan of a State approved 
^2 use 1395. 
under title X I X of such Act, and a program established by a plan 
^2 use 1396. 
of a State approved under title V of such Act. 
^^ use 701. 
"(2) Grants, payments under contracts, and other expenditures 
made for experiments and demonstration projects under paragraph 
(1) shall be made in appropriate part from the Federal Hospital 
Insurance Trust Fund (established by section 1817 of the Social 
Security Act) and the Federal Supplementary Medical Insurance 
Trust Fund (established by section 1841 of the Social Security Act) 
and from funds appropriated under titles V and X I X of such Act. 
Grants and payments under contracts may be made either in advance 
or by way of reimbursement, as may be determined by the Secretary, 
and shall be made in such installments and on such conditions as the 
Secretary finds necessary to caiTy out the purpose of this section. With 
lespect to any such grant, payment, or other expenditure, the amount 
to be paid from each of such trust funds (and from funds appropri-
ated under such titles V and X I X ) shall be determined by the Sec-
retary, giving due regard to the purposes of the experiment or project 
involved." 
(2) Section 402 (b) of such amendments is amended— 
42 use i395b.i, 
(A) by striking out "experiment" each time it appears and 
inserting in lieu thereof "experiment or demonstration project"; 
(B) by striking out "experiments" and inserting in lieu thereof 
"experiments and projects"; and 
(C) by striking out "reasonable charge" and inserting in lieu 
thereof "reasonable charge, or to reimbursement or payment only 
for such services or items as may be specified in the experiment". 
(c) Section 1875(b) of the Social S^ecurity Act is amended— _ 
42 use 1395H. 
(1) by striking out "experimentation" and inserting in lieu 
thereof "experiments and demonstration projects", and 
-
(2) by inserting "and the experiments and demonstration proj-
ects authorized by section 222(a) of the Social Security Amend-
ments of 1972" after "1967". 
^"'^' "• ^^^°-
LIMITATIONS OX COVERAGE OF COSTS UNDER MEDICARE 
SEC. 223. (a) The first sentence of section 1861 (v) (1) of the Social 
Security Act is amended by inserting immediately before "deter-
mined" where it first appears the following: "the cost actually incurred, 
excluding therefrom any part of incurred cost found to be unnecessary 
in the efficient delivery of needed health services, and shall be". 
(b) The third sentence of section 1861 (v) (1) of such Act is amend-
ed by striking out the comma after "services," where it last appears 
and inserting in lieu thereof the following: "may provide for the 
establishment of limits on the direct or indirect overall incurred costs 
or incurred costs of specific items or services or groups of items or 
services to be recognized as reasonable based on estimates of the costs 
necessary in the efficient delivery of needed health services to indi-
viduals covered by the insurance programs established under this 
title,". 
(c) The fourth sentence of section 1861 (v) (1) of such Act is amend-
ed by inserting after "services" when it first appears the following: 
" (excluding therefrom any such costs, including standby costs, which 
are determined in accordance with regulations to be unnecessary in 
the efficient delivery of services covered by the insurance programs 
established under this title)". 
42 use 139Sx. 
1394 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, p. 1393. 
(d) The fourth sentence of section 1861 (v) (1) of such Act is fur-
ther amended by striking out "costs with respect" where it first 
appears and inserting in lieu thereof the following: "necessary costs of 
efficiently delivering covered services". 
42 use 139SCC. 
(c) Sectiou 1866(a) (2) (B) of such Act is amended (1) by insert-
ing " ( i ) " after "(B)", and (2) by adding at the end thereof the fol-
lowing new clause: 
"(ii) Where a provider of services customarily furnishes an indi-
vidual items or services which are more expensive than the items or 
services determined to be necessary in the efficient delivery of needed 
health services under this title and which have not been requested by 
such individual, such provider may (except with respect to emergency 
services) also charge such individual or other person for such more 
expensive items or services to the extent that the costs of (or, if less, 
the customary charges for) such more expensive items or services 
experienced by such provider in the second fiscal period immediately 
preceding the fiscal period in which such charges are imposed exceed 
the cost of such items or services determined to be necessary in the 
efficient delivery of needed health services, but only if— 
"(I) the Secretary has provided notice to the public of any 
charges being imposed on individuals entitled to benefits under 
this title on account of costs in excess of the costs determined to 
be necessary in the efficient delivery of needed health services 
under this title by particular providers of services in the area in 
which such items or services are furnished, and 
"(II) the provider of services has identified such charges to 
such individual or other person, in such manner as the Secretary 
may prescribe, as charges to meet costs in excess of the cost deter-
mined to be necessary in the efficient delivery of needed health 
services under this title." 
(f) Section 1861 (v) of such Act (as amended by section 221(c) (4) 
Ante, p. 1389. 
of this Act) is further amended by redesignating paragraphs (4) and 
(5) as paragraphs (5) and (6), respectively, and by inserting after 
paragraph (3) the following new paragraph: 
" (4) If a provider of services furnishes items or services to an indi-
vidual which are in excess of or more expensive than the items or serv-
ices determined to be necessary in the efficient delivery of needed health 
services and charges are imposed for such more expensive items or serv-
Supra, 
ices Under the authority granted in section 1866(a) (2) (B) (ii), the 
amount of payment with respect to such items or services otherwise 
due such provider in any fiscal period shall be reduced to the extent 
that such payment plus such charges exceed the cost actually incurred 
for such items or services in the fiscal period in which such charges are 
imposed." 
(g)(1) Section 1866(a)(2) of such Act is amended by inserting 
after subparagraph (C) the following new subparagraph: 
"(D) Where a provider of services customarily furnishes items or 
services which are in excess of or more expensive than the items or 
services with respect to which payment may be made under this title, 
such provider, notwithstanding the preceding provisions of this para-
graph, may not, under the authority of section 1866(a) (2) (B) (ii), 
charge any individual or other person any amount for such items or 
services in excess of the amount of the pa^j^ment which majr otherwise 
be made for such items or services under this title if the admitting phy-
sician has a direct or indirect financial interest in such proviaer." 
(2) The last paragraph of section 1866(a) (2) is amended by strik-
ing out "clause (iii) of the preceding sentence" and inserting in lieu 
thereof "subparagraph (C)". 
Effective date. 
(h) The amendments made by this section shall be effective with 
respect to accounting periods beginning after December 31, 1972. 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1395 
LIMITS ON PREVAILING CHARGE LEVELS 
SEC. 224. (a) Section 1842(b)(3) of the Social Security Act is 
amended by adding at the end thereof the following new sentences: 
"No charge may be determined to be reasonable in the case of bills sub-
mitted or requests for payment made under this part after December 
31, 1970, if it exceeds the higher of (i) the prevailing charge recog-
nized by the carrier and found acceptable by the Secretary for similar 
services in the same locality in administering this part on December 31, 
1970, or (ii) the prevailing charge level that, on the basis of statistical 
data and methodology acceptable to the Secretary, would cover 75 
percent of the customary charges made for similar services in the same 
locality during the last preceding calendar year elapsing prior to the 
start of the fiscal year in which the bill is submitted or the request for 
payment is made. In the case of physician services the prevailing 
charge level determined for purposes of clause (ii) of the preceding 
sentence for any fiscal year beginning after June 30, 1973, may not 
exceed (in the aggregate) the level determined under such clause for 
the fiscal year ending June 30, 1973, except to the extent that the Sec-
retary finds, on the basis of appropriate economic index data, that 
such higher level is justified by economic changes. In the case of medi-
cal services, supplies, and equipment (including equipment servicing) 
that, in the judgment of the Secretary, do not generally vary sig-
nificantly in quality from one supplier to another, the charges incurred 
after December 31, 1972, determined to be reasonable may not 
exceed the lowest charge levels at which such services, supplies, and 
equipment are widely and consistently available in a locality except 
to the extent and under the circumstances specified by the Secretary." 
(b) The Health Insurance Benefits Advisory Council established 
under section 1867 of the Social Security Act shall conduct a study 
of the methods of reimbursement for physicians' services under Medi-
care for the purpose of evaluating their effects on (1) physicians' fees 
generally, (2) the extent of assignments accepted by physicians, and 
(3) the share of total physician-fee costs which the Medicare program 
does not pay and which the beneficiary must assume. The Council 
shall report the results of such study to the Congress no later than 
January 1, 1973, together with a presentation of alternatives to the 
present methods and its recommendations as to the preferred method. 
(c) Section 1903 of such Act is amended by adding at the end thereof 
(after the new subsections added by section 207(a.) (1) of this Act) 
the following new subsection: 
"(i) Payment under the preceding provisions of this section shall 
not be made with respect to any amount paid for items or services 
furnished under the plan after December 31, 1972, to the extent that 
such amount exceeds the charge which would be determined to be 
reasonable for such items or services under the third, fourth, and fifth 
sentences of section 1842 (b) (3)." 
(d) Section 506 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(f) Notwithstanding the preceding provisions of this section, no 
payment shall be made to any State thereunder with respect to any 
amount paid for items or services furnished under the plan after 
December 31. 1972, to the extent tha/t such amount exceeds the charge 
which would be determined to be reasonable for such items or services 
under the third, fourth, and fifth sentences of section 1842(b) (3)." 
42 use 139Su. 
Reimbursement 
for physicians' 
services, study. 
Post, p. 1457. 
Report to Con-
gress. 
42 use 1396b. 
Ante, p. 1379. 
Supra. 
81 Stat. 924. 
42 use 706. 
Supra. 
1396 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
LIMITS ON PAYMENT FOR SKILLED NURSING HOME x\ND INTERMEDIATE CARE 
FACILITY SERVICES 
SEC. 225. Section 1903 of the Social Security Act is amended by add-
ing at the end thereof (after the new subsection added by section 224 
Ante. p. 1395. 
(c) of this Act) the following new subsection: 
"(j) Notwithstanding the preceding provisions of this section— 
"(1) in determining the amount payable to any State with 
respect to expenditures for skilled nursing home services furnished 
in any calendar quarter beginning after December 31,1972, there 
shall not be included as expenditures under the State plan any 
amount in excess of the product of (A) the number of inpatient 
days of skilled nursing home services provided under the State 
plan in such quarter, and (B) 105 per centum of the average per 
diem cost of such services for the fourth calendar quarter preced-
ing such calendar quarter; and 
"(2) in determining the amount payable to any State with 
respect to expenditures for intermediate care facility services 
furnished in any calendar quarter beginning after December 31, 
1972, there shall not be included as expenditures under the State 
plan any amount in excess of the product of (A) the number of 
inpatient days of intermediate care facility services provided in 
such quarter under each of the plans of such State approved under 
1
2
0
^
1 ^^^s^lssi 
*^^^^ -'•' -^' ^^7' 
^^^' 
^^^ ^^^' 
^".^ (-"^^ '^^^ P^^ centum of the 
13961 
' 
' 
average per diem cost of such services for the fourth calendar 
quarter preceding such calendar quarter. 
For purposes of determining the amount payable to any State with 
respect to any quarter under paragraphs (1) and (2), the Secretary 
may by regulation increase the percentage specified in clause (B) of 
each such paragraph to the extent necessary to take account of 
increases in per diem costs which result directly from increases in the 
Federal minimum wage, or which otherwise result directly from cost 
increases which the Secretary determines are attributable to the 
upgrading of services and facilities required by this Act or from pro-
visions of Federal law enacted (or amendments to Federal law made) 
after the date of the enactment of the Social Security Amendments of 
1972." 
PAYMENTS TO HEALTH MAINTENANCE ORGANIZATIONS 
42 use 1395. 
SEC 226. (a) Title X V I I I of the Social Security Act is amended by 
adding at the end thereof the following new section: 
" P A Y M E N T S TO HEALTH MAINTENANCE ORGANIZATIONS 
"SEC. 1876. (a) (1) In lieu of amounts which would otherwise be 
r2*'iJsc'i3V5V 
Payable pursuant to sections 1814(b) and 1833(a), the Secretary is 
authorized to determine, by actuarial methods, as provided in this 
section, but only with respect to a health maintenance organization 
with which he has entered into a contract under subsection (i), a per 
capita rate of payment— 
" (A) for services provided under parts A and B for individuals 
enrolled with such organization pursuant to subsection (e) who 
are entitled to hospital insurance benefits under part A and 
enrolled for medical insurance benefits under part B, and 
^^,, 
"(B) for services provided under part B for individuals enrolled 
with such organization pursuant to subsection (e) who are not 
entitled to benefits under part A but who are enrolled for benefits 
under part B. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1397 
"(2) An interim per capita rate of payment for each health 
maintenance organization shall be determined annually by the 
Secretaiy on the basis of each organization's annual operating budget 
and enrollment forecast which shall be submitted (in such form and 
in such detail as the Secretary may prescribe) at least 90 days before 
the beginning of each contract year. Each interim rate shall be equal 
to the estimated per capita cost (based upon types and components 
of expenses otherwise reimbursable under this title) of providing 
services defined in paragraph (3) (A) (iii). In the event that the data 
requested to be furnished by a health maintenance organization are 
not furnished timely, such reduction in interim payments may be 
made by the Secretary as is appropriate, until such time as a reasonable 
estimate of per capita costs can be made. Each month, the Secretary 
shall pay each such organization its interim per capita rate, in advance, 
for each individual enrolled with it pursuant to subsection (e). 
Each such organization shall submit interim estimated cost reports 
and enrollment data on a quarterly basis in such form and manner 
satisfactory to the Secretary, and the Secretary shall adjust each 
interim per capita rate to the extent necessary to maintain interim 
payments at the level of current costs. Interim payments made under 
this paragraph shall be subject to retroactive adjustment at the end 
of each contract year as provided in paragraph (3). 
"(3) (A) With respect to any health maintenance organization 
which has entered into a risk sharing contract with the Secretary pur-
suant to subsection (i)(2)(A), payments made to such organization 
shall be subject to the following adjustments at the end of each contract 
year: 
"(i) if the Secretary determines that the per capita incurred 
cost of any such organization in any contract year for providing 
services described in paragraph (1) is less than the adjusted aver-
age per capita incurred cost (as defined herein) of providing 
such services, the resulting difference (hereinafter referred to as 
'savings') shall be apportioned following the close of a contract 
year for such year between such organization and the Federal 
Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund (hereinafter collectively referred 
to as the 'Medicare Trust Funds') as follows: 
"(I) savings up to 20 percent of the adjusted average per 
capita cost shall be apportioned equally between such orga-
nization and the Medicare Trust Funds; 
"(II) savings in excess of 20 percent of the adjusted aver-
age per capita cost shall be apportioned entirely to such Trust 
Funds; 
"(ii) if the Secretary determines that the per canita incurred 
cost of any such organization in any contract year for providing 
services described in paragraph (1) is greater than the adjusted 
average per capita incurred cost of providing such services, the 
resulting difference (hereinafter referred to as 'losses'), shall be 
absorbed by such organization, and shall be carried forward and 
offset from savings realized in later years, with the apportion-
ment of savings being proportional to the losses absorbed and 
not yet offset; 
"(iii) determination of any amounts payable at the close of the 
contract year to such organization or to the Trust Funds shall be 
made as follows: 
"(I) within 90 days after close of a contract year, interim 
determination of the amount of estimated savings and appor-
tionment thereof shall be made, actuarially, on the basis of 
interim reports of costs incurred by an organization, and 
Interim per 
capita rate. 
Infra. 
Interim esti-
mated cost re-
ports-. 
Adjustments. 
Per capita in-
curred cost, ap-
portionment. 
Losses. 
1398 
PUBLIC LAW 92-603-OCT. 30,1972 
[86 STAT. 
"Adjusted 
average per 
capita cost.*' 
79 Stat. 297; 
Post, p. 1449. 
42 use 1395h, 
1395U. 
Retroactive 
corrective ad-
justments. 
adjusted average per capita costs incurred (as defined herein), 
and other evidence acceptable to the Secretary and one-half 
of any amounts deemed payable to such organization or the 
Trust Funds shall be paid by such organization or the Secre-
tary as appropriate; 
"(II) final settlement and payment by the Secretary or 
organization, as appropriate, of any additional amounts due 
on basis of such final settlement will be made where adequate 
data for actuarial computation are available, in timely fash-
ion following submission by such organization of reports spec-
ified in subparagraph (C) of this paragraph; and 
" ( I I I ) where such final settlement is reached more than 90 
days following submission of reports specified in subpara-
§raph (C) of this paragraph, any amount payable by the 
ecretary or organization shall be increased by an interest 
amount, accruing from the 91st day following submission of 
such report, equal to the average rate of interest payable on 
Federal obligations if issued on such 91st day for purchase by 
the Trust Funds, 
"(iv) The term 'adjusted average per capita cost' means the 
average per capita amount that the Secretary determines (on the 
basis of actual experience, or retrospective actuarial equivalent 
based upon an adequate sample and other information and data, 
in the geographic area served by a health maintenance organiza-
tion or in a similar area, with appropriate adjustment to assure 
actuarial equivalence, including adjustments relating to age dis-
tribution, sex, race, institutional status, disability status, and any 
other relevant factors) would be payable in any contract year for 
services covered under this title and types of expenses otherwise 
reimbursable under this title (including administrative costs 
incurred by organizations described in sections 1816 and 1842) if 
such services were to be furnished by other than such health main-
tenance organization. 
"(B) With respect to any health maintenance organization which 
has entered into a reasonable cost reimbursement contract with the 
Secretary pursuant to subsection (i)(2)(B), payments made to such 
organization shall be subject to suitable retroactive corrective adjust-
ments at the end of each contract year so as to assure that such orga-
nization is paid for the reasonable cost actually incurred (excluding 
therefrom any part of incurred cost found to be unnecessary in the 
efficient delivery of health services) for the types of expenses otherwise 
reimbursable under this title for providing services covered under this 
title to individuals described in paragraph (1). 
"(C) Any contract with a health maintenance organization under 
this title shall provide that the Secretary shall require, at such time 
following the expiration of each accounting period of a health main-
tenance organization (and in such form and in such detail) as he may 
prescribe: 
"(i) that such health maintenance organization report to him 
in an independently certified financial statement its per capita 
incurred cost based on the types and components of expenses 
otherwise reimbursable under this title for providing services 
described in paragraph (1), including therein, in accordance with 
accounting procedures prescribed by the Secretary, its methods 
of allocating costs between individuals enrolled under this section 
and other individuals enrolled with such organization; 
" (ii) that failure to report such information as may be required 
may be deemed to constitute evidence of likely overpayment on 
the basis of which appropriate collection action may be taken; 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1399 
"(iii) that in any case in which a health maintenance organiza-
tion is related to another organization by common ownership or 
control, a consolidated financial statement shall be filed and that 
the allowable costs for such organization may not include costs 
for the types of expense otherwise reimbursable under this title, 
in excess of those which would be determined to be reasonable in 
accordance with regulations (providing for limiting reimburse-
ment to costs rather than charges to the health maintenance orga-
nization hy related organizations and owners) issued by the 
Secretary m accordance with section 1861 (v) of the Social Secu-
rity Act; and 
"(iv) that in any case in which compensation is paid by a 
health maintenance organization substantially in excess of what 
is normally paid for similar services by similar practitioners 
(regardless of method of compensation), such compensation may 
as appropriate be considered to constitute a distribution of 
profits. 
"(4) The payments to health maintenance organizations under this 
subparagraph with respect to individuals described in subsection (a) 
(1)(A) shall be made from the Federal Hospital Insurance Trust 
Fund and the Federal Supplementary Medical Insurance Trust Fund. 
The portion of such payment to such an organization for a month to 
be paid by the latter trust fund shall be equal to 200 percent of the 
sum of— 
"(A) the product of (i) the number of covered enrollees of such 
organization for such month (as described in paragraph (1)) 
who have attained age 65, and (ii) the monthly actuarial rate 
for supplementary medical insurance for such month as deter-
mined under section 1839 (c) (1), and 
"(B) the product of (i) the number of covered enrollees of such 
organization for such month (as described in paragraph (1)) 
who have not attained age 65, and (ii) the monthly actuarial rate 
for supplementary medical insurance for such month as deter-
mined under section 1839 (c) (4). 
The remainder of such payment shall be paid by the former trust 
fund. For limitation on Federal participation for capital expendi-
tures which are out of conformity with a comprehensive plan of a 
State or area 
wide planning agency, see section 1122. 
"(b) The term 'health maintenance organization' means a public 
or private organization which— 
"(1) provides, either directly or through arrangements with 
others, health services to individuals enrolled with such organiza-
tion on the basis of a predetermined periodic rate without regard 
to the frequency or extent of services furnished to any particular 
enrollee; 
"(2) provides, either directly or through arrangements with 
others, to the extent applicable in subsection (c) (through insti-
tutions, entities, and persons meeting the applicable requirements 
of section 1861), all of the services and benefits covered under 
parts A and B of this title which are available to individuals 
residing in the geographic area served by the health maintenance 
organization; 
"(3) provides physicians' services primarily (A) 
directly 
through physicians who are either employees or partners of such 
organization, or (B) under arrangements with one or more groups 
of physicians (organized on a group practice or individual prac-
tice basis) under which, each such group is reimbursed for its 
services primarily on the basis of an aggregate fixed sum or on a 
42 u s e 1395X. 
Ante, 
p. 1376. 
Ante, p. 1377. 
Ante, 
p. 1386. 
"Health mainte-
nance organiza-
tion." 
42 u s e 139Sx. 
42 u s e 1395c, 
139Sj. 
-081 
O - 
73 - 
91 
physician. 
1400 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
per capita basis, regardless of whether the individual physician 
members of any such group are paid on a fee-for-service or other 
basis; 
"(4) provides either directly or under arrangements with 
others, the services of a sufficient number of primary care and 
specialty care physicians to meet the health needs of its members; 
hv«?ria^n"»^ "^'^ 
^^^" P^rposes of this section the term 'specialty care physician' 
means a physician who is either board certified or eligible for 
board certification, except that the Secretary may by regulation 
prescribe conditions under which physicians who have a record 
. , 
of demonstrated proficiency but who are not eligible for board 
certification may, on the basis of training and experience, be 
recognized as specialty care physicians; 
" (5) has effective arrangements to assure that its members have 
access to qualified practitioners in those specialties which are 
generally available in the geographic area served by the health 
maintenance organization; 
"(6) demonstrates to the satisfaction of the Secretary proof 
of financial responsibility and proof of capability to provide 
comprehensive health care services, including institutional serv-
ices, efficiently, effectively, and economically; 
"(7) except as provided in subsection (h), has at least half 
of its enrolled members consisting of individuals under age 65; 
"(8) assures that the health services required by its members 
are received promptly and appropriately and that the services 
that are received measure up to quality standards which it estab-
lishes in accordance with regulations; and 
"(9) has an open enrollment period at least every year under 
,,. 
which it accepts up to the limits of its capacity and without restric-
tions, except as may be authorized in regulations, individuals 
w^ho are eligible to enroll under subsection (d) in the order in 
w^hich they apply for enrollment (unless to do so would result in 
failure to meet the requirements of paragraph (7)) or would 
, . 
result in enrollment of enrollees substantially nonrepresentative, 
as determined in accordance with regulations of the Secretary, 
of the population in the geographic area served by such health 
maintenance organization. 
"(c) The benefits provided under this section to enrollees of an 
organization which has entered into a risk sharing contract with the 
Post, p. 1401. 
Secretary pursuant to subsection (i) (2) (A) shall consist of— 
"(1) in the case of an individual who is entitled to hospital 
42 use 1395c. 
iusuraucc benefits under part A and enrolled for medical insur-
42 use 1395J. 
ance benefits under part B— 
"(A) entitlement to have payment made on his behalf for 
79 ^*g'-^^-^- 
all services described in section 1812 and section 1832 which 
Post, p. 1406. 
are furnished to him by the health maintenance organization 
with which he is enrolled pursuant to subsection (e) of this 
section; and 
"(B) entitlement to have payment made by such health 
maintenance organization to him or on his behalf for (i) 
such emergency services (as defined in regulations.), (ii) such 
urgently needed services (as defined in regulations) fur-
nished to him during a period of temporary absence (as 
defined in regulations) from the geographic area served by 
the health maintenance organization with which he is 
enrolled, and (iii) such other services as may be determined, 
in accordance with subsection (f), to be services which the 
individual was entitled to have furnished bv the health 
86 STAT.] 
PUBLIC LAW 92^03-OCT. 30, 1972 
1401 
maintenance organization, as may be furnished to him by 
a physician, supplier, or provider of services, other than the 
health maintenance organization with which he is enrolled; 
and 
"(2) in the case of an individual who is not entitled to hospital 
insurance benefits under part A but who is enrolled for medical 
insurance benefits under part B, entitlement to have payment 
made for services described in paragraph (1), but only to the 
extent that such services are also described in section 1832. 
"(d) Subject to the provisions of subsection (e), every individual 
described in subsection (c) shall be eligible to enroll with any health 
maintenance organization (as defined in subsection (b)) which serves 
the geographic area in which such individual resides. 
"(e) An individual may enroll with a health maintenance organ-
ization under this section, and may terminate such enrollment, as may 
be prescribed by regulations. 
"(f) Any individual enrolled with a health maintenance organiza-
tion under this section who is dissatisfied by reason of his failure to 
receive without additional cost to him any health service to which he 
believes he is entitled shall, if the amount in controversy is $100 or 
more, be entitled to a hearing before the Secretary to the same extent 
as is provided in section 205(b) and in any such hearing the Secretary 
shall make such health maintenance organization a party thereto. If 
the amount in controvei-sy is $1,000 or more, such individual or health 
maintenance organization shall be entitled to judicial review of the 
Secretary's final decision after such hearing as is provided in section 
205(g). 
"(g)(1) 
If tl^6 health maintenance organization provides its 
enrollees under this section only the services described in subsection 
(c), its premium rate or other charges for such enrollees shall not 
exceed the actuarial value of the deductible and coinsurance which 
would otherwise be applicable to such enrollees under part A and part 
B, if they were not enrolled under this section. 
"(2) If the health maintenance organization provides to its enrollees 
under this section services in addition to those described in subsection 
(c), election of coverage for such additional services shall be optional 
for such enrollees and such organization shall furnish such enrollees 
with information on the portion of its premium rate or other charges 
applicable to such additional services. The portion applicable to the 
services described in subsection (c) may not exceed (i) the actuarial 
value of the deductible and coinsurance which would otherwise be 
applicable to such enrollees under part A and part B if they were not 
enrolled under this section less (ii) the actuarial value of other charges 
made in lieu of such deductible and coinsurance. 
"(h) The provisions of paragraph (7) of subsection (b) shall not 
apply with respect to any health maintenance organization for such 
period not to exceed three years from the date such organization enters 
into an agreement with the Secretary pursuant to subsection (i), as 
the Secretary may permit, but only so long as such organization dem-
onstrates to the satisfaction of the Secretary by the submission of its 
plans for each year that it is making continuous efforts and progress 
toward achieving compliance with the provisions of such paragraph 
(7) within such three-year period. 
"(i) (1) Subject to the limitations contained in subparagraphs (A) 
and (B) of paragraph (2), the Secretary is authorized to enter into 
5
1 contract with any health maintenance organization which under-
takes to provide, on an interim per capita prepayment basis, the serv-
ices described in section 1832 (and section 1812, in the case of indi-
42 use 1395c, 
42 use 1395J. 
79 Stat, 302, 
42 use 13 95k, 
Hearings; judi-
cial review. 
53 Stat. 1368, 
42 use 405. 
Nbnapplicabil-
ity. 
eontract author-
ity. 
42 use 1395d, 
1402 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 use 1395c. 
Risk-sharing 
contract. 
Nonurban geo-
graphic area. 
Prohibition. 
Ante, p. 1399. 
42 use 1395X. 
Contract term, 
renewal. 
viduals who are entitled to hospital insurance benefits under part A) to 
individuals enrolled with such organization pursuant to subsection 
(e). 
. 
. 
. 
"(2) (A) If the health maintenance organization (i) has a current 
enrollment of not less than 25,000 members on a prepaid capitation 
basis and has been the primary source of health care of at least 8,000 
persons in each of the two years immediately preceding the contract 
year, or (ii) serves a nonurban geographic area, has a current enroll-
ment of not less than 5,000 members on a prepaid capitation basis 
and has been the primary source of health care for at least 1,500 per-
sons in each of the three years immediately preceding the contract 
year, the Secretary may enter into a risk sharing contract with such 
organization pursuant to which any savings, as determined pursuant 
to subsection (a)(3)(A), are shared between such organization and 
the Medicare Trust Funds in the manner prescribed in such subsec-
tion. For purposes of this subparagraph, a health maintenance orga-
nization shall be considered to serve a nonurban geographic area if it 
is located in a nonmetropolitan county (that is, a county with fewer 
than 50,000 inhabitants), or if it has at least one such county in its 
normal service area, or if it is located outside of a metropolitan area 
and its facilities are within reasonable travel distance (as defined 
by the Secretary) of fewer than 50,000 individuals. No health main-
tenance organization which has entered into a risk-sharing contract 
with the Secretary under this subparagraph and has voluntarily 
terminated such contract may again enter into such a contract. 
"(B) If the health maintenance organization does not meet the 
requirements of subparagraph (A), or if the Secretary is not satisfied 
that the health maintenance organization has the capacity to bear the 
risk of potential losses as determined under clause (ii) of subsection 
(a)(3)(A), or if the health maintenance organization meeting the 
requirements of subparagraph (A) so elects, or if an organization does 
not fully meet the requirements of section 1876(b) but has demon-
strated to the satisfaction of the Secretary that it is making reasonable 
efforts to meet, and is developing the capability to fully meet, such 
requirements, and that it fully meets such basic requirements as the 
Secretary shall prescribe in regulations, the Secretary may, if he is 
otherwise satisfied that the health maintenaiice organization or other 
organization is able to perform its contractual obligations effectively 
and efficiently, enter into a contract with such organization pursuant to 
which such organization is reimbursed on the basis of its reasonable 
cost (as defined in section 1861 (v)) in the manner prescribed in sub-
section (a)(3)(B). 
"(3) Such contract may, at the option of such organization, pro-
Adde that the Secretary (A) will reimburse hospitals and extended 
care facilities for the reasonable cost (as determined under section 
1861 (v)) of services furnished to individuals enrolled with such orga-
nization pursuant to subsection (e), and (B) will deduct the amount 
of such reimbursement from payments which would otherwise be made 
to such organization. If a health maintenance organization pays a 
hospital or extended care facility directly, the amount paid shall not 
exceed the reasonable cost of the services (as determined under sec-
tion 1861 (v)) unless such organization demonstrates to the satisfaction 
of the Secretary that such excess payments are justified on the basis 
of advantages gained by the organization. 
" (4) Each contract under this section shall be for a term of at least 
one year, as determined by the Secretary, and may be made auto-
matically renewable from term to term in the absence of notice by 
either party of intention to terminate at the end of the current term; 
except that the Secretary may terminate any such contract at any 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1403 
time (after such reasonable notice and opportunity for hearing to the 
liealtn maintenance organization involved as he may provide in regula-
tions), if he finds that the organization (A) has failed substantially 
to carry out the contract, (B) is carrying out the contract in a manner 
inconsistent with the efficient and effective administration of this 
section, or (C) no longer substantially meets the applicable conditions 
of subsection (b). 
"(5) The effective date of any contract executed pursuant to this 
subsection shall be specified in such contract pursuant to the 
regulations. 
" (6) Each contract under this section— 
"(A) shall provide that the Secretary, or any person or organi-
zation designated by him— 
"(i) shall have the right to inspect or otherwise evaluate 
the quality, appropriateness, and timeliness of services 
perfoi-med under sucfi contract; and 
"(ii) shall have the right to audit and inspect any books 
and records of such health maintenance organization which 
pertain to services performed and determinations of amounts 
payable under such contract; 
"(B) shall provide that no reinsurance costs (other than those 
with respect to out-of-area services), including any underwriting 
of risk relating to costs in excess of adjusted average per capita 
cost, as defined in clause (iii) of subsection (a) (3) (A), shall be 
allowed for purposes of determining payments authorized under 
this section; and 
"(C) shall contain such other terms and conditions not incon-
sistent with this section as the Secretary may find necessary, 
"(j) The function vested in the Secretary by subsection (i) may 
be performed without regard to such provisions of law or of other 
regulations relating to the making, performance, amendment, or 
modification of contracts of the United States as the Secretary may 
determine to be inconsistent with the furtherance of the purposes 
of this title." 
(b)(1) Notwithstanding the provisions of section 1814 and sec-
tion 1833 of the Social Securitv Act, any health maintenance orga-
nization which has entered into a contract with the Secretary 
pursuant to section 1876 of such Act shall, for the duration of such 
contract, (except as provided in paragraph (2)) be entitled to 
reimbursement only as provided in section 1876 of such Act for 
individuals who are members of such organizations. 
(2) With respect to individuals who are membei-s of organizations 
which have entered into a I'isk-sharing contract with the Secretary 
pursuant to subsection (i)(2)(A) prior to July 1, 1973, and who, 
although eligible to have payment made pursuant to section 1876 of 
such Act for services rendered to them, chose (in accordance with regu-
lations) not to have such payment made pursuant to such section, the 
Secretary shall, for a period not to exceed three years commencing on 
July 1, 1973. pay to such organization on the basis of an interim per 
capita rate, determined in accordance with the provisions of section 
1876(a)(2) of such Act, with appropriate actuarial adjustments to 
reflect the difference in utilization of out-of-plan services, which would 
have been considered sufficiently reasonable and necessary under the 
rules of the health maintenance organization to be provided by that 
organization, between such individuals and individuals who are 
enrolled with such organization pursuant to section 1876 of such Act. 
Payments under this pai'agi'aph shall be subject to retroactive adjust-
ment at the end of each contract year as provided in paragraph (3). 
Contract termi-
nation, notice, 
hearing. 
Inspection au-
thority. 
42 u s e 1395f, 
139SZ. 
Ante, 
p. 1396. 
Ante, 
p. 1402. 
1404 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Retroactive ad-
justment. 
Ante, p. 1396. 
79 Stat. 294. 
42 use 1395f. 
79 Stat. 302. 
42 use 1395/. 
Ante, p. 1393. 
Ante, p. 1396, 
42 u s e 1396b. 
Technical as-
sistance to States, 
Effective date. 
(3) If the Secretary determines that the per capita cost of any such 
organization in any contract year for providing services to individuals 
described in paragraph (2), when combined with the cost of the Fed-
eral Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund in such year for providing out-of-plan 
services to such individuals, is less than or greater than the adjusted 
average per capita cost (as defined in section 1876(a) (3) of such Act) 
of providing such services, the resulting savings shall be apportioned 
between such organization and such Trust Funds, or the resulting 
losses shall be absorbed by such organization, in the manner prescribed 
in section 1876(a) (3) of such Act. 
(c)(1) Section 1814(a) of such Act is amended by striking out 
"Except as provided in subsection (d)," and inserting in lieu thereof 
the following: "Except as provided in subsection (d) and in section 
1876,". 
(2) Section 1833(a) of such Act is amended by striking out "Sub-
ject to" and inserting in lieu thereof the following: "Except as pro-
vided in section 1876, and subject to". 
(d) Section 1875(b) of the Social Security Act, as amended by 
section 222 (c) of this Act, is further amended— 
(1) by inserting "the operation and administration of health 
maintenance organizations authorized by section 226 of the Social 
Security Amendments of 1972," after the word "including"; and 
(2) by striking out "1971" and inserting in lieu thereof "1972". 
(e) Section 1903 of such Act, as amended by sections 207, 224, and 
290 of this Act, is further amended by adding after subsection (j) the 
following new subsection: 
"(k) The Secretary is authorized to provide at the request of any 
State (and without cost to such State) such technical and actuarial 
assistance as may be necessary to assist such State to contract with any 
health maintenance organization which meets the requirements of sec-
tion 1876 for the purpose of providing medical care and services to 
individuals who are entitled to medical assistance under this title." 
(f) The amendments made by this section shall be effective with 
respect to services provided on or after July 1,1973. 
42 u s e 1395X. 
PAYMENT UNDER MEDICARE FOR SERVICES OF PHYSICIANS RENDERED 
AT A TEACHING HOSPITAL 
SEC. 227. (a) Section 1861(b) of the Social Security Act is amended 
by striking out the second sentence and inserting in lieu thereof the 
following: 
"Paragraph (4) shall not apply to services provided in a hospital by— 
"(6) an intern or a resident-in-training under a teaching pro-
gram approved by the Council on Medical Education of the 
American Medical Association or, in the case of an osteopathic 
hospital, approved by the Committee on Hospitals of the Bureau 
of Professional Education of the American Osteopathic Associa-
tion, or, in the case of services in a hospital or osteopathic hospital 
by an intern or resident-in-training in the field of dentistry, 
approved by the Council on Dental Education of the American 
Dental Association; or 
"(7) a physician where the hospital has a teaching program 
approved as specified in paragraph (6), unless (A) such inpatient 
is a private patient (as defined in regulations), or (B) the hos-
pital establishes that during the two-year period ending Decem-
ber 31, 1967, and each year thereafter all inpatients have been 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1405 
regularly billed by the hospital for services rendered by physi-
cians and reasonable efforts have been made to collect in full 
from all patients and payment of reasonable charges (including 
applicable deductibles and coinsurance) has been regularly col-
lected in full or in substantial part from at least 50 percent of all 
inpatients." 
(b) (1) So much of section 1814(a) of such Act as precedes para-
graph (1) (as amended by section 226(c) (1) of this Act) is further 
amended by striking out "subsection (d)" and inserting in lieu thereof 
"subsections (d) and (g)". 
(2) Section 1814 is further amended by adding at the end thereof the 
following new subsection: 
"Payment for Services of a Physician Rendered in a Teaching 
Hospital 
"(g) For purposes of services for which the reasonable cost thereof 
is determined under section 1861 (v) (1) (D), payment under this part 
shall be made to such fund as may be designated by the organized medi-
cal staff of the hospital in which such services were furnished or, if 
such services were furnished in such hospital by the faculty of a medi-
cal school, to such fund as may be designated by such faculty, but 
only if— 
"(1) such hospital has an agreement with the Secretary under 
section 1866, and 
"(2) the Secretary has received written assurances that (A) 
such payment will be used by such fund solely for the improve-
ment of care of hospital patients or for educational or charitable 
purposes and (B) the individuals who were furnished such serv-
ices or any other persons will not be charged for such services (or 
if charged, provision will be made for return of any moneys 
incorrectly collected)." 
(c) Section 1861 (v) (1) of such Act (as amended by section 223 of 
this Act) is amended— 
(1) by inserting " (A)" after " (1)"; 
(2) by striking out "(A) take" and "(B) provide" in the 
fourth sentence and inserting in lieu thereof "(i) take" and "(ii) 
provide", respectively; 
(3) by inserting " ( B ) " immediately 4)receding "Such regula-
tions in the case of extended care services"; and 
(4) by adding at the end thereof the following new subpara-
graphs : 
"(C) Where a hospital has an arrangement with a medical 
school under which the faculty of such school provides serv-
ices at such hospital, an amount not in excess of the reasonable 
cost of such services to the medical school shall be included 
in determining the reasonable cost to the hospital of furnish-
ing services— 
"(i) for which payment may be made under part A, 
but only if 
"(I) 
payment for such services as furnished 
under such arrangement would be made under part 
A to the hospital had such services been furnished 
by the hospital, and 
"(II) such hospital pays to the medical school at 
least the reasonable cost of such services to the medi-
cal school, or 
42 u s e 1395f. 
Ante, 
p. 1382. 
Infra. 
42 u s e 1395CC. 
42 u s e 1395X. 
42 u s e 1395c. 
1406 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
Infra, 
42 u s e 1395x. 
Ante, p. 1405; 
Infra, 
42 u s e 139SCC. 
42 u s e 1395k. 
42 use 1395J. 
"(ii) for which payment may be made under part B, 
but only if such hospital pays to the medical scliool at 
least the reasonable cost of such services to the medical 
school. 
"(D) Where (i) physicians furnish services which are 
either inpatient hospital services (including services in con-
junction with the teaching programs pf such hospital) by 
reason of paragraph (7) of subsection (b) or for which 
entitlement exists by reason of clause (II) of section 1832 
(a)(2)(B) (i) and (ii) such hospital (or medical school 
under arrangement with such hospital) incurs no actual cost 
in the furnishing of such services, the reasonable cost of such 
services shall (under regulations of the Secretary) be deemed 
to be the cost such hospital or medical school would have 
incurred had it paid a salary to such physicians rendering 
such services approximately equivalent to the average salary 
paid to all physicians employed by such hospital (or if such 
employment does not exist, or is minimal in such hospital, by 
similar hospitals in a geographic area of sufficient size to 
assure reasonable inclusion of sufficient physicians in develop-
ment of such average salary)." 
(d) (1) Section 1861 (u) of such Act is amended by inserting before 
the period at the end thereof the following: ", or, for purposes of 
section 1814(g) and section 1835 (e), a fund". 
(2) So much of section 1866(a) (1) of such Act as precedes subpara-
graph (A) is amended by inserting "(except a fund designated for 
purposes of section 1814(g) and section 1835(e))" after "provider of 
services". 
Ce) (1) Section 1832(a) (2) (B) of such Act is amended to read as 
follows: 
"(B) medical and other health services furnished by a 
provider of services or by others under arrangement with 
them made by a provider of services, excluding— 
"(i) physician services except where furnished by— 
" (I) a resident or intern of a hospital, or 
"(II) a physician to a patient in a hospital which 
has a teaching program approved as specified in 
Ante, p. 1404. 
paragraph (6) of section 1861(b) (including serv-
ices in conjunction with the teaching programs of 
such hospital whether or not such patient is an 
inpatient of such hospital), unless either clause (A) 
or (B) of paragraph (7) of such section is met, and 
"(ii) services for which payment may be made pur-
suant to section 1835(b) (2); and". 
42 use i395n. 
(2) (A) So much of section 1835(a) of such Act as precedes para-
graph (1) is amended by striking out "subsections (b) and (c)," and 
inserting in lieu thereof "subsections (b), (c), and (e),". 
(B) Section 1835 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(e) For purposes of services (1) which are inpatient hospital 
Ante, p, 1404. 
services by reason of paragraph (7) of section 1861(b) or for which 
entitlement exists by reason of clause (II) of section 1832(a) (2) (B) 
Supra. 
(i), and (2) for which the reasonable cost thereof is determined under 
Ante, p. 1405. 
sectiou 1861 (v) (1) (D), payment under this part shall be made to 
such fund as may be designated by the organized medical staff of 
the hospital in which such services were furnished or, if such services 
were furnished in such hospital by the faculty of a medical school, 
to such fund as may be designated by such faculty, but only if— 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1407 
"(1) such hospital has an agreement with the Secretary under 
section 1866, and 
"(2) the Secretary has received written assurances that such 
payment will be used by such fund solely for the improvement 
of care to patients in such hospital or for educational or char-
itable purposes and (B) the individuals who were furnished 
such services or any other persons will not be charged for such 
services (or if charged provision will be made for return for 
any moneys incorrectly collected)/' 
(8) Section 1842(a) of such Act is amended by inserting after 
"which involve payments for physicians' services" the following: "on 
a reasonable charge basis". 
(f) Section 1861 (q) of such Act is amended by striking out the 
parenthetical phrase "(but not including services described in the last 
sentence of subsection (b))" and inserting in lieu thereof "(but not 
including services described in subsection (b) (6))". 
(g) The amendments made by this section shall apply with respect 
to accounting periods beginning after June 30, 1978. 
42 u s e 1395CC. 
42 u s e 1395u. 
42 u s e 1395x. 
Ante, 
p. 1404. 
Effective date. 
ADVAXCE APPROVAL OF EXTENDED CARE AXD HOME HEALTH COVERAGE 
UNDER MEDICARE 
SEC. 228. (a) Section 1814 of the Social Security Act (as amended 
by section 227(b) (2) of this Act) is amended by adding at the end 
thereof the following new subsections: 
"Payment for Posthospital Extended Care Services 
"(h) (1) An individual shall be presumed to require the care spec-
ified in subsection (a) (2) ((.) of this section for purposes of making 
payment to an extended care facility (subject to the provisions of 
section 1812) for posthospital extended care services which are fur-
nished by such facility to such individual if— 
"(A) the certification referred to in subsection (a)(2)(C) of 
this section is submitted prior to or at the time of admission of 
such individual to such extended care facility, 
"(B) such certification states that the medical condition of the 
individual is a condition designated in regulations, 
"(C) such certification is accompanied by a plan of treatment 
for providing such services, and 
"(D) there is compliance wdth such other requirements and pro-
cedures as may be specified in regulations, 
but only for services furnished during such limited periods of time 
with respect to such conditions of the individual as may be prescribed 
in regulations by the Secretary, taking into account the medical 
severity of such conditions, the degree of incapacity, and the minimum 
length of stay in an institution generally needed for such conditions, 
and such other factors affecting the type of care to be provided as 
the Secretary deems pertinent. 
"(2) If the Secretary determines with respect to a physician that 
such physician is submitting with some frequency (A) erroneous cer-
tifications that individuals have conditions designated in regulations 
as provided in ^this subsection or (B) plans for providing services 
which are inappropriate, the provisions of paragraph (1) shall not 
apply, after the effective date of such determination, in any case in 
which such physician submits a certification or plan referred to in sub-
paragraph (A), (B),or (C) of paragraph (1). 
Ante, 
p. 1405. 
Post, 
p. 1425. 
42 u s e 139Sd. 
Erroneous cer-
tification, nonap-
plicability. 
1408 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 139Sf. 
42 u s e 1395d. 
Erroneous cer-
tification, non-
applicability. 
Effective date. 
.. j, 
"Payment for Posthospital Home Health Services 
" ( i ) ( l ) An individual shall be presumed to require the services 
specified in subsection (a) (2) (D) of this section for purposes of mak-
ing payment to a home health agency (subject to the provisions of sec-
tion 1812) for posthospital home health services furnished by such 
agency to such individual if— 
"(A) the certification and plan referred to in subsection (a) (2) 
(D) of this section are submitted in timely fashion prior to the 
first visit by such agency, 
"(B) such certification states that the medical condition of the 
individual is a condition designated in regulations, and 
"(C) there is compliance with such other requirements and 
procedures as may be specified in regulations, 
but only for services furnished during such limited numbers of visits 
with respect to such conditions of the individual as may be prescribed 
in regulations by the Secretary, taking into account the medical sever-
ity of such conditions, the degree of incapacity, and the minimum 
period of home confinement generally needed for such conditions, and 
such other factors affecting the type of care to be provided as the Sec-
retary deems pertinent. 
"(2) If the Secretary determines with respect to a physician that 
such physician is submitting with some frequency (A) erroneous certi-
fications that individuals have conditions designated in regulations as 
provided in this subsection or (B) plans for providing services which 
are inappropriate, the provisions of paragraph (1) shall not apply, 
after the effective date of such determination, in any case in which such 
physician submits a certification or plan referred to in subparagraph 
(A) or (B) of paragraph (1)." 
(b) The amendment made by subsection (a) and any regulations 
adopted pursuant to such amendment shall apply with respect to plans 
of care initiated on or after January 1,1973, and with respect to admis-
sion to skilled nursing facilities and Iiome health plans initiated on 
or after such date. 
AUTHORITY OF SECRETARY TO TER3IINA1'E PAYMENTS TO SUPPLIERS OF 
SERVICES 
SEC. 229. (a) Section 1862 of the Social Security Act (as amended 
Ante, p. 1382. 
by sectiou 210 of this Act) is further amended by adding at the end 
thereof the following new subsection: 
"(d) (1) 'No payment may be made under this title with respect to 
any item or services furnished to an individual by a person where the 
Secretary determines under this subsection that such person— 
"(A) has knowingly and willfully made, or caused to be made, 
any false statement or representation of a material fact for use 
in an application for payment under this title or for use in deter-
mining the right to a payment under this title; 
"(B) has submitted or caused to be submitted (except in the 
' 
case of a provider of services), bills or requests for payment under 
this title containing charges (or in applicable cases requests for 
payment of costs to such person) for services rendered which the 
Secretary finds, with the concurrence of the appropriate program 
Post, p. 1409. 
review team appointed pursuant to paragraph (4), to be substan-
tially in excess of such person's customary charges (or in appli-
cable cases substantially in excess of such person's costs) for such 
services, unless the Secretary finds there is good cause for such bills 
86 STAT.] 
PUBLIC LAW 92-603-.OCT. 30, 1972 
1409 
or requests containing sucli charges (or in applicable cases, such 
costs); or 
"(C) has furnished services or supplies which are determined 
by the Secretary, with the concurrence of the members of the 
appropriate program review team appointed pursuant to para-
graph (4) who are physicians or other professional personnel in 
the health care field, to be substantially in excess of the needs of 
individuals or to be harmful to individuals or to be of a grossly 
inferior quality. 
"(2) A determination made by the Secretary under this subsection 
shall be effective at such time and upon such reasonable notice to the 
public and to the person furnishing the services involved as may be 
specified in regulations. Such determination shall be effective with 
respect to services furnished to an individual on or after the effective 
date of such determination (except that in the case of inpatient hospital 
services, posthospital extended care services, and home health services 
such determination shall be effective in the manner provided in sec-
tion 1866(b) (3) and (4) with respect to terminations of agreements), 
and shall remain in effect until the Secretary finds and gives reasonable 
notice to the public that the basis for such determination has been 
removed and that there is reasonable assurance that it will not recur. 
"(3) Any person furnishing services described in paragraph (1) 
who is dissatisfied with a determination made by the Secretary under 
this subsection shall be entitled to reasonable notice and opportunity 
for a hearing thereon by the Secretary to the same extent as is pro-
vided in section 205(b), and to judicial review of the Secretary's final 
decision after such hearing as is provided in section 205 (g). 
"(4) For the purposes of paragraph (1) (B) and (C) of this sub-
section, and clause (F) of section 1866(b)(2), the Secretary shall, 
after consultation with appropriate State and local professional 
societies, the appropriate carriers and intermediaries utilized in the 
administration of this title, and consumer representatives familiar 
with the health needs of residents of the State, appoint one or more 
program review teams (composed of physicians, other professional 
personnel in the health care field, and consumer representatives) in 
each State which shall, among other things— 
"(A) undertake to review such statistical data on program 
utilization as may be submitted by the Secretary, 
"(B) submit to the Secretary periodically, as may be prescribed 
in regulations, a report on the results of such review, together 
Avith recommendations with respect thereto, 
"(C) undertake to review particular cases where there is a 
likelihood that the person or persons furnishing services and 
supplies to individuals may come within the provisions of para-
graph (1) (B) and (C) of this subsection or clause (F) of section 
1866(b)(2),and 
"(D) submit to the Secretary periodically, as may be prescribed 
in regulations, a report of cases reviewed pursuant to subpara-
graph (C) along with an analysis of, and recommendations with 
respect to, such cases." 
(b) Section 1866(b)(2) of such Act is amended by striking out 
the period at the end thereof and inserting in lieu thereof the fol-
lowing: ", or (D) that such provider has made, or caused to be made, 
any false statement or representation of a material fact for use in an 
application for payment under this title or for use in determining the 
right to a payment under this title, or (E) that such provider has sub-
mitted, or caused to be submitted, requests for payment under this 
title of amounts for rendering services substantially in excess of the 
Intra. 
Determination, 
effective date, 
public notice. 
Post, 
p. 1427. 
Judicial review. 
42 u s e 405. 
Program review 
teams. 
Intra. 
Report to Secre-
tary. 
Report to Secre-
tary. 
42 u s e 1395CC. 
1410 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, 
p. 1408. 
Ante, p. 1395. 
Ante, 
p. 1395; 
Post, 
p. 1447. 
42 u s e 1395. 
Ante, 
p. 1408. 
Ante, 
p. 1409. 
Ante, p. 1395. 
costs incurred by such provider for rendering such services, or (F) 
that such provider has furnished services or supplies which are deter-
mined by the Secretary, with the concurrence of the members of 
the appropriate program review team appointed pursuant to section 
1862(d) (4) who are physicians or other professional personnel in 
the health care field, to be substantially in excess of the needs of in-
dividuals or to be harmful to individuals or to be of a grossly inferior 
quality." 
(c) Section 1903 (i) of such Act (as added by section 224(c) of this 
Act) is further amended by striking out "shall not be made" and all 
that follows and inserting in lieu thereof the following: "shall not 
be made— 
"(1) with respect to any amount paid for it€>ms or services 
furnished under the plan after December 31, 1972, to the extent 
that such amount exceeds the charge which would be determined 
to be reasonable for such items or services under the fourth and 
fifth sentences of section 1842(b) (3); or 
"(2) with respect to any amount paid for services furnished 
under the plan after December 31, 1972, by a provider or oither 
person during any period of time, if payment may not be made 
under title X V I I I with respect to services furnished by such pro-
vider or person during such period of time solely by reason of a 
determination by the Secretary under section 1862(d) (1) or under 
clause (D), (E), or (F) of section 1866(b) (2)." 
(d) Section 506(f) of such Act (as added by section 224(d) of this 
Act) is further amended by striking out "no payment shall be made" 
and all that follows and inserting in lieu thereof the following: "no 
payment shall be made to any State thereunder— 
"(1) with respect to any amount paid for items or services 
furnished under the plan after December 31, 1972, to the extent 
that such amount exceeds the charge which would be determined 
to be reasonable for such items or services under the fourth and 
fifth sentences of section 1842(b) (3); or 
"(2) with respect to any amount paid for services furnished 
under the plan after December 31, 1972, by a provider or other 
person during any period of time, if payment may not be made 
under title X V I I I with respect to services furnished by such 
provider or person during such period of time solely by reason 
of a determination by the Secretary under section 1862(d) (1) or 
under clause (D), (E), or (F) of section 1866(b) (2)." 
Repeals. 
42 
use 1396b. 
42 
use 1396b 
note. 
42 u s e 1396a, 
ELIMINATION OF REQUIREMENT THAT STATES MOVE TOWARD COMPREHEN-
SIVE MEDICAID PROGRAMS 
SEC. 230. Section 1903(e) of the Social Security Act, and section 
2(b) of Public Law 91-56 (approved August 9, 1969), are repealed. 
R E P E A L , 
O F 
SECTION 
1 9 0 2 ( d ) 
OF 
MEDICAID 
SEC. 231. Section 1902(d) of the Social Security Act is repealed. 
81 Stat. 902. 
42 u s e 1396a. 
DETERMINATION OF REASONABLE COST OF I N P A T I E N T HOSPITAL SERVICES 
UNDER MEDICAID AND UNDER MATERNAL AND CHILD HEALTH PROGRAM 
SEC. 232. (a) Section 1902(a) (13) (D) of the Social Security Act is 
amended to read as follows: 
"(D) for payment of the reasonable cost of inpatient hos-
pital services provided under the plan, as determined in 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1411 
accordance with methods and standards which shall be devel-
oped by the State and reviewed and approved by the Secre-
tary and (after notice of approval by the Secretary) included 
in the plan, except that the reasonable cost of any such serv-
ices as determined under such methods and standards shall 
not exceed the amount which would be determined under 
section 1861 (v) as the reasonable cost of such services for 
purposes of title XVIII;". 
(b) Section 505(a) (6) of such Act is amended to read as follows: 
"(6) provides for payment of the reasonable cost of inpatient 
hospital services provided under the plan, as determined in 
accordance with methods and standards which shall be developed 
by the State and included in the plan, except that the reasonable 
cost of any such services as determined under such methods and 
standards shall not exceed the amount which would be determined 
under section 1861 (v) as the reasonable cost of such services for 
purposes of title XVIII;". 
(c) The amendments made by this section shall be effective July 1, 
1972 (or earlier if the State plan so provides). 
42 u s e 1395X. 
42 u s e 1395. 
42 u s e 705. 
Effective date. 
AMOUNT OF PAYMENTS W H E R E CUSTOMARY CHARGES FOR SERVICES 
FURNISHED ARE LESS T H A N REASONABLE COST 
SEC. 233. (a) Section 1814(b) of the Social Security Act is amended 
to read as follows: 
79 Stat. 294. 
42 u s e 1395f. 
"Amount Paid to Providers 
"(b) The amount paid to any provider of services with respect to 
services for which payment may be made under this part shall, subject 
to the provisions of section 1813, be— 
"(1) the lesser of (A) the reasonable cost of such services, as 
determined under section 1861 (v), or (B) the customary charges 
with respect to such services; or 
"(2) if such services are furnished by a public provider of 
services free of charge or at nominal charges to the public, the 
amount determined on the basis of those items (specified in regula-
tions prescribed by the Secretary) included in the determina-
tion of such reasonable cost which the Secretary finds will 
provide fair compensation to such provider for such services." 
(b) Section 1833(a) (2) of such Act is amended to read as follows: 
"(2) in the case of services described in section 1832(a) (2)— 
80 percent of— 
"(A) the lesser of (i) the reasonable cost of such services, 
as determined under section 1861 (v), or (ii) the customary 
charges with respect to such services; or 
"(B) if such services are furnished by a public provider 
of services free of charge or at nominal charges to the 
public, the amount determined in accordance with section 
1814(b)(2)." 
(c) Section 1903 (i) of such Act (as added by section 224(c) and 
amended by section 229(c) of this Act) is further amended by strik-
ing out the period at the end of paragraph (2) and inserting in lieu 
thereof "; or", and by adding after paragraph (2) the following new 
paragraph: 
"(3) with respect to any amount expended for inpatient hos-
pital services furnished under the plan to the extent that such 
amount exceeds the hospital's customary charges with respect to 
42 u s e 1395e. 
42 u s e 1395x. 
79 Stat. 302. 
42 u s e 1395Z. 
42 u s e 1395k. 
Supra. 
Ante, pp. 1395, 
1410. 
Ante, p. 1389. 
1412 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
such services or (if such services are furnished under the plan by a 
public institution free of charge or at nominal charges to the 
public) exceeds an amount determined on the basis of those items 
(specified in regulations prescribed by the Secretary) included in 
the determination of such payment which the Secretary finds 
will provide fair compensation to such institution for such 
. 
services." 
(d) Section 506(f) of such Act (as added by section 224(d) and 
1410**' ^^' ^^^^' *^®iid®d by section 229(d) of this Act) is further amended by strik-
ing out the period at the end of paragraph (2) and inserting in lieu 
thereof "; or", and by adding after paragraph (2) the following new 
paragraph: 
"(3) with respect to any amount expended for inpatient hos-
pital services furnished under the plan to the extent that such 
amount exceeds the hospital's customary charges with respect to 
such services or (if such services are furnished under the plan by 
a public institution free of charge or at nominal charges to the 
public) exceeds an amount determined on the basis of those items 
(specified in regulations prescribed by the Secretary) included in 
the determination of such payment which the Secretary finds will 
provide fair compensation to such institution for such services." 
(e) Clause (2) of the second sentence of section 509(a) of such 
Act (as amended by section 221 (c) (3) of this Act) is further amended 
by inserting " ( A ) " before "the reasonable cost", and by inserting 
after "under the project," the following: "or (B) if less, the customary 
charges with respect to such services provided under the project, or 
(C) if such services are furnished under the project by a public institu-
tion free of charge or at nominal charges to the public, an amount 
determined on the basis of those items (specified in regulations pre-
scribed by the Secretary) included in the determination of such rea-
sonable c»st which the Secretary finds will provide fair compensation 
to such institution for such services". 
(f) The amendments made by subsections (a) and (b) shall apply 
to services furnished by hospitals, extended care facilities, and home 
health agencies in accounting periods beginning after December 31, 
1972. The amendments made by subsections (c), (d), and (e) shall 
apply with respect to services furnished by hospitals in accounting 
periods beginnmg after December 31, 1972. 
INSTITUTIONAL PLANNING UNDER MEDICARE 
SEC. 234. (a) The first sentence of section 1861(e) of the Social 
Ante, p. 1383. 
ggcurlty Act Is amended— 
(1) by striking out "and" at the end of paragraph (7) ; 
(2) by redesignating paragraph (8) as paragraph (9) ; and 
(3) by inserting after paragraph (7) the following new 
paragraph: 
"(8) has in effect an overall plan and budget that meets the 
Post, p. 1413. 
requirements of subsection (z) ; and". 
42 use 1395X. 
(b) Sectiou 1861 (f) (2) of such Act is amended to read as follows: 
"(2) satisfies the requirements of paragraphs (3) through (9) 
of subsection (e) ;". 
(c) Section 1861 (g) (2) of such Act is amended to read as follows: 
"(2) satisfies the requirements of paragraphs (3) through (9) 
of subsection (e) ;". 
(d) The first sentence of section 1861 (j) of such Act is amended— 
(1) by striking out "and" at the end of paragraph (9) ; 
(2) by redesignating paragraph (10) as paragraph (11); and 
Effective 
dates. 
42 u s e 1395x. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1413 
(3) by inserting after paragraph (9) tlie follo\\'ing new 
paragraph: 
"(10) has in effect an overall plan and budget that meets the 
requirements of subsection (z); and ". 
(e) Section 1861 (o) of such Act is amended— 
(1) by striking out "and" at the end of paragraph (4); 
(2) by redesignating paragraph (5) as paragraph (6); and 
(3) by inserting after paragraph (4) the following new 
paragraph: 
"(5) has in effect an overall plan and budget that meets the 
requirements of subsection (z); and". 
(f) Section 1861 of such Act is further amended by adding at the end 
thereof the following new subsection: 
"Institutional Planning 
"(z) An overall plan and budget of a hospital, extended care 
facility, or home health agency shall be considered sufficient if it— 
"(1) provides for an annual operating budget which includes 
all anticipated income and expenses related to items which would, 
under generally accepted accounting principles, be considered 
income and expense items (except that nothing in this paragraph 
shall require that there be prepared, in connection with any budget, 
an item-by-item identification of the components of each type of 
anticipated expenditure or income) ; 
"(2) provides for a capital expenditures plan for at least a 
3-year period (including the year to which the operating budget 
described in subparagraph (1) is applicable) which includes and 
identifies in detail the anticipated sources of financing for, and 
the objectives of, each anticipated expenditure in excess of $100,000 
related to the acquisition of land, the improvement of land, build-
ings, and equipment, and the replacement, modernization, and 
expansion of the buildings and e<][uipment which would, under 
generally accepted accounting principles, be considered capital 
items; 
"(3) provides for review and updating at least annually; and 
" (4) is prepared, under the direction of the governing body of 
the institution or agency, by a committee consisting of representa-
tives of the governing body, the administrative staff, and the 
medical staff (if any) of the institution or agency." 
(g) (1) Section 1814(a) (2) (C) and section 1814(a) (2) (D) of such 
Act are each amended by striking out "and (8)" and inserting in lieu 
thereof "and (9)". 
(2) Section 1863 of such Act is amended by striking out "subsections 
(e)(8), (f)(4), (g)(4), (j)(10), and (o)(5)" and inserting in lieu 
thereof "subsections (e)(9), (f)(4), (g)(4), (j) (11), and (o)(6)". 
(h) Section 1865 of such Act is amended— 
(1) by striking out "(except paragraph (6) thereof)" in the 
first sentence and inserting in lieu thereof "(except paragraphs 
(6) and (8) thereof)", and 
(2) by striking out the second sentence and inserting in lieu 
thereof the following: "If such Commission, as a condition for 
accreditation of a hospital, (1) requires a utilization review plan 
as defined in section 1861 (k) or imposes another requirement 
which serves substantially the same purpose, or (2) requires insti-
tutional plans as defined in section 1861 (z) or imposes another 
requirement which serves substantially the same purpose, the 
Intra, 
42 u s e 1395x. 
79 Stat. 313. 
42 u s e 1395x. 
42 u s e 139Sf. 
42 u s e 1395Z. 
42 u s e 139Sbb. 
42 u s e 1395X. 
Supra, 
1414 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Secretary is authorized to find that all institutions so accredited by 
the Commission comply also with section 1861(e) (6) or 1861(e) 
42 use 1395%. 
(8), as the case may be." 
Effective date. 
(i) The amendments made by this section shall apply with respect to 
any provider of services for fiscal yeare (of such provider) beginning 
after the fifth month following the month in which this Act is 
enacted. 
PAYMENTS TO STATES UNDER MEDICAID FOR INSTALLATION AND OPERATION 
OF CLAIMS PROCESSING AND INFORMATION RETRIEVAL SYSTEMS 
42 use 1396b. 
SEC. 235. (a) Section 1903(a) of the Social Security Act is amended 
by redesignating paragraph (3) as paragraph (4), and by inserting 
after paragraph (2) the following new paragraph: 
"(3) an amount equal to— 
"(A) (i) 90 per centum of so much of the sums expended 
during such quarter as are attributable to the design, develop-
ment, or installation of such mechanized claims processing 
and information retrieval systems as the Secretary determines 
are likely to provide more efficient, economical, and effective 
administration of the plan and to be compatible with the 
claims processing and information retrieval systems utilized 
42 use 1395. 
in the administration of title XVIII, including the State's 
share of the cost of installing such a system to be used jointly 
in the administration of such State's plan and the plan of any 
other State approved under this title, and 
"(ii) 90 per centum of so much of the sums expended dur-
ing any such quarter in the fiscal year ending June 30, 1972, 
or the fiscal year ending June 30, 1973, as are attributable to 
the design, development, or installation of cost determina-
tion systems for State-owned general hospitals (except that 
the total amount paid to all States under this clause for either 
such fiscal year shall not exceed $150,000), and 
"(B) 75 per centum of so much of the sums expended dur-
ing such quarter as are attributable to the operation of sys-
tems (whether such systems are operated directly by the 
State or by another person under a contract with the State) 
of the type described in subparagraph (A) (i) (whether or 
not designed, developed, or installed with assistance under 
such subparagraph) which are approved by the Secretary 
and which include provision for prompt written notice to 
each individual who is furnished services covered by the plan 
of the specific services so covered, the name of the person 
or persons furnishing the services, the date or dates on which 
the services were furnished, and the amount of the payment 
or payments made under the plan on account of the services; 
plus". 
Effective date. 
(b) The amendments made by subsection (a) shall apply with 
respect to expenditures under State plans approved under title X I X 
42 use 1396. 
of the Social Security Act made after June 30,1971. 
PROHIBITION AGAINST REASSIGNMENT OF CLAIMS TO BENEFITS 
42 use 139SU. 
SEC 236. (a) Section 1842(b) of the Social Security Act is amended 
by adding at the end thereof the following new paragraph: 
"(5) No payment under this part for a service provided to any 
42 use i395gg. individual shall (except as provided in section 1870) be made to 
anyone other than such individual or (pursuant to an assignment 
86 STAT.] 
PUBLIC LAW 92-^03-OCT. 30, 1972 
1415 
described in subparagraph (B) (ii) of paragraph (3)) the physician 
or other person who provided the service, except that payment may 
be made (A) to the employer of such physician or other person if 
such physician or other person is required as a condition of his employ-
ment to turn over his fee for such service to his employer, or (B) 
(where the service was provided in a hospital, clinic, or other facility) 
to the facility in which the service was provided if there is a con-
tractual arrangement between such physician or other person and 
such facility under which such facility submits the bill for such 
service." 
(b) Section 1902 (a) of such Act is amended— 
(1) by striking out "and" at the end of paragraph (30) ; 
(2) by striking out the period at the end of paragraph (31) and 
inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (31) the following new 
paragraph: 
"(32) provide that no payment under the plan for any care 
or service provided to an individual by a physician, dentist, or 
other individual practitioner shall be made to anyone other than 
such individual or such physician, dentist, or practitioner, except 
that payment may be made (A) to the employer of such phy-
sician, dentist, or practitioner if such physician, dentist, or prac-
titioner is required as a condition of his employment to turn 
over his fee for such care or service to his employer, or (B) 
(where the care or service was provided in a hospital, clinic, or 
other facility) to the facility in which the care or service was 
provided if there is a contractual arrangement between such 
physician, dentist, or practitioner and such facility under which 
such facility submits the bill for such care or service." 
(c) The amendment made by subsection (a) shall apply with respect 
to bills submitted and requests for payments made after the date of 
the enactment of this Act. The amendments made by subsection (b) 
shall be effective January 1, 1973 (or earlier if the State plan so pro-
vides) . 
Ante, 
p. 1384; 
Post, 
p. 1455. 
42 u s e 1396a. 
Effective dates. 
UTILIZATION REVIEW REQUIREMENTS FOR HOSPITALS AND SKILLED NURSING 
HOMES UNDER MEDICAID AND UNDER MATERNAL AND CHILD 
H E A L T H 
PROGRAM 
SEC. 237. (a)(1) Section 1903(i) of the Social Security Act (as 
added bv section 224(c) and amended by sections 229(c) and 233(c) 
of this Act) is further amended by striking out the period at the end 
of paragraph (3) and inserting in lieu thereof "; or", and by adding 
after paragraph (3) the following new paragraph: 
"(4) with respect to any amount expended for care or services 
furnished under the plan by a hospital or skilled nursing home 
unless such hospital or skilled nursing home has in effect a utiliza-
tion review plan which meets the requirements imposed by sec-
tion 1861 (k) for purposes of title X V I I I ; and if such hospital or 
skilled nursing home has in effect such a utilization review plan 
for purposes of title XVIII, such plan shall serve as the plan 
required by this subsection (with the same standards and proce-
dures and the same review committee or group) as a condition of 
payment under this title; the Secretary is authorized to waive the 
requirements of this paragraph if the State agency demonstrates 
to his satisfaction that it has in operation utilization review pro-
cedures which are superior in their effectiveness to the procedures 
required under section 1861 (k)." 
Ante, 
pp. 1395, 
1410, 1411. 
42 u s e 1395X, 
1395. 
82-081 O - 73 - 92 
1416 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 1396a. 
Ante, pp. 1395, 
1410, 1412. 
42 use 1395X, 
1395. 
42 u s e 1395x. 
42 u s e 1396. 
Effective dates. 
(2) Section 1902(a) (30) of such Act is amended by inserting 
" (including but not limited to utilization review plans as provided for 
in section 1903(i) (4))" after "plan" where it first appears. 
(b) Section 506(f) of such Act (as added by section 224(d) and 
amended by sections 229(d) and 233(d) of this Act) is further 
amended by striking out the period at the end of paragraph (3) and 
inserting in lieu thereof "; or", and by adding after paragraph (3) 
the following new paragraph: 
"(4) with respect to any amount expended for services fur-
nished under the plan by a hospital unless such hospital has in 
effect a utilization review plan which meets the requirement 
imposed by section 1861 (k) for purposes of title X V I I I ; and if 
such hospital has in effect such a utilization review plan for pur-
poses of title XVIII, such plan shall serve as the plan required 
by this subsection (with the same standards and procedures and 
the same review committee or ^roup) as a condition of payment 
under this title; the Secretary is authorized to waive the require-
ments of this paragraph in any State if the State agency demon-
strates to his satisfaction that it has in operation utilization review 
procedures which are superior in their effectiveness to the pro-
cedures required under section 1861 (k)." 
(c) Section 1861 (k) of such Act is amended by adding at the end 
thereof the following new sentence: "If the Secretary determines that 
the utilization review procedures established pursuant to title X I X 
are superior in their effectiveness to the procedures required under 
this section, he may, to the extent that he deems it appropriate, require 
for purposes of this title that the procedures established pursuant to 
title X I X be utilized instead of the procedures required by this 
section." 
(d) (1) The amendments made by subsections (a) (1) and (b) shall 
apply with respect to services furnished in calendar quarters begin-
ning after June 30,1973. 
(2) The amendment made by subsection (a) (2) shall be effective 
July 1, 1973. 
42 u s e 1395f. 
Effective date. 
NOTIFICATION OF UNNECESSARY ADMISSION TO A HOSPITAL OR 
EXTENDED CARE FACILITY UNDER MEDICARE 
SEC. 238. (a) Section 1814(a)(7) of the Social Security Act is 
amended by striking out "as described in section 1861 (k) (4)" and 
inserting in lieu thereof "as described in section 1861 (k) (4), including 
any finding made in the course of a sample or other review of admis-
sions to the institution". 
(b) The amendment made by subsection (a) shall apply with respect 
to ^rvices furnished after the second month following the month in 
which this Act is enacted. 
42 
use 1396a. 
42 
use 1395aa. 
USE OF STATE HEALTH AGENCY TO PERFORM CERTAIN FUNCTIONS UNDER 
MEDICAID AND UNDER MATERNAL AND CHILD HEALTH PROGRAM 
SEC. 239. (a) Section 1902(a)(9) of the Social Security Act is 
amended to read as follows: 
"(9) provide—• 
"(A) that the State health agency, or other appropriate 
State medical agency (whichever is utilized by the Secretary 
for the purpose specified in the first sentence of section 1864 
(a)), shall be responsible for establishing and maintaining 
health standards lor private or public institutions in which 
86 STAT. ] 
PUBLIC LAW 92^03~OCT. 30, 1972 
1417 
recipients of medical assistance under the plan may receive 
care or services, and 
"(B) for the establishment or designation of a State 
- authority or authorities which shall be responsible for estab-
lishing and maintaining standards, other than, those relating 
to health, for such institutions;". . 
(b) Section 1902(a) of such Act (as amended by section 236(b) 
of this Act) is further amended— 
^"'e, p. uis. 
(1) by striking out "and" at the end of paragraph (31) ; 
(2) by striking out the period at the end of paragraph (32) 
and inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (32) the following new para-
graph : 
"(33) provide— 
"(A) that the State health agency, or other appropriate 
State medical agency, shall be responsible for establishing a 
plan, consistent with regulations prescribed by the Secretary, 
for the review by appropriate professional health personnel 
of the appropriateness and quality of care and services fur-
nished to recipients of medical assistance under the plan in 
order to provide guidance with respect thereto in the admin-
istration of the plan to the State agency established or desig-
nated pursuant to paragraph (5) and, where applicable, to the 
State agency described in the last sentence of this subsection; 
and 
"(B) that the State or local agency utilized by the Secre-
tary for the purpose specified in the first sentence of section 
1864(a), or, if such agency is not the State agency which is 
42 use i395aa. 
responsible for licensing health institutions, the State agency 
responsible for such licensing, will perform for the State 
agency administering or supervising the administration of 
the plan approved under this title the function of determining 
whether institutions and agencies meet the requirements for 
participation in the program under such plan." 
(c) Section 505 (a) of such Act is amended— 
si stat. 923. 
(1) by striking out "and" at the end of paragraph (13); 
^^ ^^^ ^°^-
(2) by striking out the period at the end of paragraph (14) 
and inserting in lieu thereof "; and"; and 
(3) by adding after paragraph 
(14) the following new 
paragraph: 
"(15) provides— 
"(A) that the State health agency, or other appropriate 
State medical agency, shall be responsible for establishing a 
plan, consistent with regulations prescribed by the Secretary, 
for the review by appropriate professional health personnel 
of the appropriateness and quality of care and services fur- 
• ' 
nished to recipients of services under the plan and, where 
applicable, for providing guidance with respect thereto to 
the other State agency referred to in paragraph (2) ; and 
"(B) that the State or local agency utilized by the Secre-
tary for the purpose specified in the first sentence of section 
1864(a), or, if such agency is not the State agency which is 
42 use isgsaa. 
responsible for licensing health institutions, the State agency 
responsible for such licensing, will perform the function of 
determining whether institutions and agencies meet the 
requirements for participation in the program under the plan 
under this title." 
1418 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Effective date. 
(J) xhe amendnieiits made by this section shall be effective Janu-
ary 1,1973 (or earlier if the State plan so provides). 
RELATIONSHIP BETWEEN MEDICAID AND COMPREHENSIVE HEALTH 
CARE PROGRAMS 
81 Stat. 903. 
SEC. 240. Section 1902(a) (23) of the Social Security Act is 
42 use 1396a. 
amended by adding after the semicolon at the end thereof the follow-
ing: "and a State plan shall not be deemed to be out of compliance 
with the requirements of this paragraph or paragraph (1) or (10) 
solely by reason of the fact that the State (or any political subdivision 
thereof) has entered into a contract with an organization which has 
agreed to provide care and services in addition to those offered under 
the State plan to individuals eligible for medical assistance who reside 
in the geographic area served by such organization and who elect 
to obtain such care and services from such organization;". 
PROGRAM FOR DETERMINING QUALIFICATIONS FOR CERTAIN HEALTH 
CARE PERSONNEL 
SEC. 241. Title X I of the Social Security Act is amended by add-
Ante, p. 1386. 
j^g after section 1122 (as added by section 221(a) of this Act) the 
following new section: 
" P R O G R A M FOR D E T E R M I N I N G QUALIFICATIONS FOR CERTAIN HEALTH CARE 
PERSONNEL 
"SEC. 1123. (a) The Secretary, in carrying out his functions relat-
42 use 1395. 
ing to the qualifications for health care personnel under title XVIII, 
shall develop (in consultation with appropriate professional health 
organizations and State health and licensure agencies) and conduct (in 
conjunction with State health and licensure agencies) until December 
31, 1977, a program designed to determine the proficiency of individ-
uals (who do not otherwise meet the formal educational, professional 
membership, or other specific criteria established for determining the 
qualifications of practical nurses, therapists, laboratory technicians, 
and technologists, and cytotechnologists. X-ray technicians, psychia-
tric technicians, or other health care technicians and technologists) to 
perform the duties and functions of practical nurses, therapists, labo-
ratory technicians, technologists, and cytotechnologists, X-ray tech-
nicians, psychiatric technicians, or other health care technicians 
and technologists. Such program shall include (but not be limited to) 
the employment of procedures for the formal testing of the proficiency 
of individuals. In the conduct of such program, no individual who 
otherwise meets the proficiency requirements for any health care 
specialty shall be denied a satisfactory^ proficiency rating solely because 
of his failure to meet formal educational or professional membership 
requirements, 
(b) If any individual has been determined, under the program 
established pursuant to subsection (a), to be qualified to perform the 
duties and functions of any health care specialty, no person or pro-
vider utilizing the services of such individual to perform such duties 
and functions shall be denied payment, under title X V I I I or under 
42 use 1396. 
any State plan approved under title XIX, for any health care services 
provided by such person on the grounds that such individual is not 
qualified to perform such duties and functions." 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1419 
PENALTIES FOR FRAUDULENT ACTS AND FALSE REPORTING UNDER 
MEDICARE AND MEDICAID 
42 u s e 1395ii. 
S E C 242. (a) Section 1872 of the Social Security Act is amended 
by striking out "208,". 
(b) Title X V I I I of the Social Security Act is amended by adding 
at the end thereof (after the new section added by section 226(a) of 
this Act) the foUowmg new section: 
Ante, p. 1395. 
(( 
PENALTIES 
" S E C 1877. (a) Whoever— 
"(1) knowingly and willfully makes or causes to be made any 
false statement or representation of a material fact in any appli-
cation for any benefit or payment under this title, 
" (2) at any time knowingly and willfully makes or causes to be 
made any false statement or representation of a material fact for 
use in determining rights to any such benefit or payment, 
"(3) having knowledge of the occurrence 01 any event affect-
ing (A) his initial or continued right to any such benefit or pay-
ment, or (B) the initial or continued right to any such benefit or 
payment of anjr other individual in whose behalf he has applied 
for or is receiving such benefit or payment, conceals or fails to 
disclose such event with an intent fraudulently to secure such bene-
fit or payment either in a greater amount or quantity than is due 
or when no such benefit or payment is authorized, or 
"(4) having made application to receive any such benefit or 
payment for the use and benefit of another and having received it, 
knowingly and willfully converts such benefit or payment or any 
part thereof to a use other than for the use and benefit of such 
other person, 
shall be guilty of a misdemeanor and upon conviction thereof shall be 
fined not more than $10,000 or imprisoned for not more than one year, 
or both. 
"(b) Whoever furnishes items or services to an individual for which 
payment is or may be made under this title and who solicits, offers, or 
receives any— 
"(1) kickback or bribe in connection with the furnishing of 
such items or services or the making or receipt of such payment, 
or 
"(2) rebate of any fee or charge for referring any such 
individual to another person for the furnishing of such items or 
services, 
shall be guilty of a misdemeanor and upon conviction thereof shall be 
fined not more than $10,000 or imprisoned for not more than one year, 
or both. 
"(c) Whoever knowingly and willfully makes or causes to be made, 
or induces or seeks to induce the making of, any false statement or 
representation of a material fact with respect to the conditions or 
operation of any institution or facilitj in order that such institution 
or facility may qualify (either upon initial certification or upon recerti-
fication) as a hospital, skilled nursing facility, or home health agency 
(as those terms are defined in section 1861), shall be guilty of a mis- 
42 use lagsx, 
demeanor and upon conviction thereof shall be fined not more than 
$2,000 or imprisoned for not more than 6 months, or both." 
(c) Title A l X of such Act is amended by adding after section 1908 
42 use 1396. 
the following new section; 
1420 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
(( 
PENALTIES 
"SEC. 1909. (a) Whoever— 
"(1) knowingly and willfully makes or causes to be made any 
false statement or representation of a material fact in any appli-
cation for any benefit or payment under a State plan approved 
under this title, 
"(2) at any time knowingly and willfully makes or causes to 
be made any false statement or representation of a material fact 
for use in determining rights to such benefit or payment, 
"(3) having knowledge of the occurrence of any event affect-
ing (A) his initial or continued right to any such benefit or pay-
ment, or (B) the initial or continued right to any such benefit 
or payment of any other individual in whose behalf he has applied 
for or is receiving such benefit or payment, conceals or fails to 
disclose such event with an intent fraudulently to secure such 
benefit or payment either in a greater amount or quantity than is 
due or when no such benefit or payment is authorized, or 
"(4) having made application to receive any such benefit or 
payment for the use and benefit of another and having received 
it, knowingly and willfully converts such benefit or payment or 
any part thereof to a use other than for the use and benefit of 
such other person, 
shall be guilty of a misdemeanor and upon conviction thereof shall be 
fined not more than $10,000 or imprisoned for not more than one 
year, or both. 
"(b) Whoever furnishes items or services to an individual for which, 
payment is or may be made in whole or in part out of Federal funds 
under a State plan approved under this title and who solicits, offers, 
or receives any— 
"(1) kickback or bribe in connection with the furnishing of 
such items or services or the making or receipt of such payment, 
or 
"(2) rebate of any fee or charge for referring any such indi-
vidual to another person for the furnishing of such items or 
services 
shall be guilty of a misdemeanor and upon conviction thereof shall be 
fined not more than $10,000 or imprisoned for not more than one year, 
or both. 
"(c) Whoever knowingly and willfully makes or causes to be made,, 
or induces or seeks to induce the making of, any false statement or 
representation of a material fact with respect to the conditions or 
operation of any institution or facility in order that such institution 
or facility may qualify (either upon initial certification or upon 
recertification) as a hospital, skilled nursing home, intermediate care 
facility, or home health agency (as those terms are employed in this 
title) shall be guilty of a misdemeanor and upon conviction thereof 
shall be fined not more than $2,000 or imprisoned for not more than 
6 months, or both." 
(d) The provisions of amendments made by this section shall not 
be applicable to any acts, statements, or representations made or com-
mitted prior to the enactment of this Act. 
PROVIDEK REIMBURSEMENT REVIEW BOARD 
'' " 
SEC. 243. (a) Title X V I I I of the Social Security Act is amended 
by adding at the end thereof (after the new sections added by section 
Ante. p. 1419. 
226(a) and section 242(b) of this Act) the following new section: 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30,1972 
1421 
"PROVIDER REIMBURSEMENT REVIEW BOARD 
"SEC. 1878. (a) Any provider of services which has filed a required 
cost report within the time specified in regulations may obtain a hear-
ing with respect to such cost report by a Provider Reimbursement 
Review Board (hereinafter referred to as the 'Board') which shall be 
established by the Secretary in accordance with subsection (h), if— 
"(1) such provider— 
" (A) is dissatisfied with a final determination of the orga-
nization serving as its fiscal intermediary pursuant to sec-
tion 1816 as to the amount of total program reimbursement 
due the provider for the items and services furnished to indi-
viduals for which payment may be made under this title for 
the period covered by such report, 
"(B) has not received such final determination from such 
intermediary on a timely basis after filing such report, where 
such report complied with the rules and regulations of the 
Secretary relating to such report, or 
"(C) has not received such final determination on a timely 
basis after filing a supplementary cost report, where such 
cost report did not so comply and such supplementary cost 
report did so comply, 
" (2) the amount in controversy is $10,000 or more, and 
"(3) such provider files a request for a hearing within 180 
days after notice of the intermediary's final determination under 
paragraph (1) (A) or with respect to appeals pursuant to para-
graph (1) (B) or (C), within 180 days after notice of such 
determination would have been received if such determination 
had been made on a timely basis. 
"(b) The provisions of subsection (a) shall apply to any group of 
providers of services if each provider of services in such group would, 
upon the filing of an appeal (but without regard to the $10,000 limi-
tation), be entitled to such a hearing, but only if the matters in con-
troversy involve a common question of fact or interpretation of law or 
regulations and the amount in controversy is, in the aggregate, $50,000 
or more. 
"(c) At such hearing, the provider of services shall have the right 
to be represented by counsel, to introduce evidence, and to examine and 
cross-examine witnesses. Evidence may be received at any such hearing 
even though inadmissable under rules of evidence applicable to court 
procedure. 
"(d) A decision by the Board shall be based upon the. record made 
at such hearing, which shall include the evidence considered by the 
intermediary and such other evidence as may be obtained or received 
by the Board, and shall be supported by substantial evidence when the 
record is viewed as a whole. The Board shall haverthe power to affirm, 
modify, or reverse a final determination of the fiscal intermediary with 
respect to a cost report and to make any other revisions on matters 
covered by such cost report (including revisions adverse to the provider 
of services) even though such matters were not considered by the 
intermediary in making such final determination. 
"(e) The Board shall have full power and authority to make rules 
and establish procedures, not inconsistent with the provisions of this 
title or regulations of the Secretary, which are necessary or appropriate 
to carry out the provisions of this section. In the course of any hearing 
the Board may administer oaths and affirmations. The provisions of 
subsections (d), (e), and (f) of section 205 with respect to subpenas 
Establishment. 
Conditions. 
42 u s e 1395h. 
Group appeal. 
Rules and regu-
lations. 
42 u s e 405. 
1422 
PUBLIC LAW 92-603-.OCT. 30, 1972 
[86 STAT. 
42 u s e 401. 
Board decision, 
reviewability. 
5 u s e 701. 
42 u s e 405. 
42 u s e 1395y. 
Membership. 
5 u s e ibl et 
seq. 
eompensation. 
5 u s e 5332 
note. 
Technical and 
clerical assist-
ance. 
42 u s e 1395h. 
Effective date. 
42 u s e 1395. 
shall apply to the Board to the same extent as they apply to the Secre-
tary with respect to title II. 
"(f) A decision of the Board shall be final unless the Secretary, 
on his own motion, and within 60 days after the provider of services 
is notified of the Board's decision, reverses or modifies (adversely to 
such provider) the Board's decision. In any case where such a reversal 
or modification occurs the provider of services may obtain a review of 
such decision by a civil action commenced within 60 days of the date 
he is notified of the Secretary's reversal or modification. Such action 
shall be brought in the district court of the LTnited States for the judi-
cial district in which the provider is located or in the District Court 
for the District of Columbia and shall be tried pursuant to the apnli-
cable provisions under chapter 7 of title 5, United States Code, not-
withstanding any other provisions in section 205. 
"(g) The finding of a fiscal intermediary that no payment may be 
made under this title for any expenses incurred for items or services 
furnished to an individual because such items or services are listed in 
section 1862 shall not be reviewed by the Board, or by any court pur-
suant to an action brought under subsection (f). 
"(h) The Board shall be composed of five members appointed by 
the Secretary without regard to the provisions of title 5, United States 
Cyode, governing appointments in the competitive services. Two of 
such members shall be representative of providers of services. All of 
the members of the Board shall be pereons knowledgeable in the field 
of cost reimbursement, and at least one of them shall be a certified 
public accountant. Members of the Board shall be entitled to receive 
compensation at rates fixed by the Secretary, but not exceeding.the 
late specified (at the time the sei'vice involved is rendered by such 
members) for grade GS-18 in section 5332 of title 5, United States 
(^ode. The term of office shall be three years, except that the Secretary 
shall appoint the initial members of the Board for shorter terms to 
the extent necessary to permit staggered terms of office. 
"(i) The Board is authorized to engage such technical assistance as 
may be required to carry out its functions, and the Secretary shall, in 
addition, make available to the Board such secretarial, clerical, and 
other assistance as the Board may require to carry out its functions." 
(b) The first sentence of section 1816(a) of such Act is amended by 
striking out "subject to" in the parenthetical phrase and inseiting in 
lieu thereof "subject to the provisions of section 1878 and to". 
(c) The amendments made by this section shall apply with respect 
to cost reports of providers of services, as defined in title X V I I I of 
the Social Security Act, for accounting periods ending on or after 
June 30,1973. 
79 Stat. 326. 
42 u s e 1395aa. 
42 use 1395cc. 
VALIDATIGX OF SURVEYS MADE BY JOINT COMMISSION ON THE 
ACCREDITATION OF HOSPITALS 
SEC. 244. (a) Section 1864 of the Social Security Act is amended 
by inserting at the end thereof the following new subsection: 
"(c) The Secretary is authorized to enter into an agreement with 
any State under which the appropriate State or local agency which 
performs the certification function described in subsection (a) will 
survey, on a selective sample basis (or where the Secretary finds that 
a survey is appropriate because of substantial allegations of the exist-
ence of a significant deficiency or deficiencies which would, if found to 
be present, adversely affect health and safety of patients), hospitals 
w^hich have an agreement with the Secretary under section 1866 and 
which are accredited by the Joint Commission on the Accreditation of 
86 STAT. ] 
PUBLIC LAW 92^03-OCT. 30, 1972 
1423 
Hospitals. The Secretary shall pay for such services in the manner 
prescribed in subsection (b)." 
(b) (1) Section 1865 of such Act, as amended by section 234 of this 
Act, is further amended by striking out "SEC. 1865" and the first two 
Ante, p. 1413. 
sentences of such section and inserting in lieu thereof the following: 
"SEC. 1865. (a) Except as provided in subsection (b) and the second 
sentence of section 1863, if— 
42 use i395z. 
" (1) an institution is accredited as a hospital by the Joint Com-
mission on Accreditation of Hospitals, and 
"(2) such institution (if it is included within a survey described 
in section 1864(c)) authorizes the Commission to release to the 
Ante, p. 1422. 
Secretary (on a confidential basis) upon his request (or such 
State agency as the Secretary may designate) a copy of the most 
current accreditation survey of such institution made by such 
Commission, 
then, such institution shall be deemed to meet the requirements of the 
numbered paragraphs of section 1861 (e); except— 
42 use ISQSX. 
"(3) paragraph (6) thereof, and 
"(4) any standard, promulgated by the Secretary pursuant to 
paragraph (9) thereof, which is higher than the requirements 
prescribed for accreditation by such Commission. 
If such Commission, as a condition for accreditation of a hospital, 
requires a utilization review plan (or imposes another requirement 
which serves substantially the same purpose) or imposes a standard 
which the Secretary determines is at least equivalent to the standard 
promulgated by the Secretary as described in paragraph (4) of this 
subsection, the Secretary is authorized to find that all institutions so 
accredited by such Commission comply also with section 1861(e) (6) 
or the standard described in such paragraph (4), as the case may be." 
(2) Such section 1865 (as so amended) is further amended by 
adding after subsection (a) thereof the following: 
"(b) Notwithstanding any other provision of this title, if the Sec-
retary finds following a survey made pursuant to section 1864(c) that 
Ante, p. 1422. 
an institution has significant deficiencies (as defined in regulations 
pertaining to health and safety), such institution shall, after the date 
of notice of such finding to the hospital and for such period as may be 
prescribed in regulations, be deemed not to meet the requirements of 
the numbered paragraphs of section 1861 (e)." 
(c) Section 1861(e) of such Act, as amended by sections 211 and 
234 of this Act, is further amended by striking out, in subsection (9), ,^^^'^' PP- *^^^ 
everything after the word "institution" and inserting in lieu thereof 
a period. 
(d) Section 1875(b) of such Act, as amended by sections 222 and 
226 of this Act, is further amended by inserting:, after "including" and 
before "the operation", the following: "a validation of the accredita-
tion process of the Joint Commission on the Accreditation of Hos-
pitals,". 
PAYMENT FOR DURABLE MEDICAL E Q U I P M E N T UNDER 
MEDICARE 
SEC. 245. (a) The Secretary is authorized to conduct reimbursement 
experiments designed to eliminate unreasonable expenses resulting 
from prolonged rentals of durable medical equipment described in 
section 1861 (s) (6) of the Social Security Act. 
42 use isgsx. 
(b) Such experiment may be conducted in one or more geographic 
areas, as the Secretary deems appropriate, and may, pursuant to 
agreements with supf)liers, provide for reimbursement for such equip-
ment on a lump-sum basis whenever it is determined (in accordance 
1412. 
Ante, 
pp. 1393, 
1404. 
1424 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
with guidelines established by the Secretary) that a lump-sum pay-
ment would be more ecjonomical than the anticipated period of rental 
payments. Such experiments may also provide for incentives to bene-
ficiaries (including waiver of the 20 percent coinsurance amount 
42 use 1395Z 
applicable under section 1833 of the Social Security Act) to purchase 
* used equipment whenever the purchase price is at least 25 percent less 
than the reasonable charge for new equipment. 
(c) The Secretary is authorized, at such time as he deems appropri-
ate, to implement on a nationwide basis any such reimbursement proce-
dures which he finds to be workable, desirable and economical and 
which are consistent with the purposes of this section. 
81 Stat. 850. 
(d) Section 1833(f) of the Social Security Act is amended— 
(1) by striking out "with respect to purchases of inexpensive 
equipment (as determined by the Secretary)" and inserting in 
lieu thereof " (A)", and 
(2) by inserting before the period at the end thereof the 
following: ", and (B) with respect to purchases of used equip-
ment the Secretary is authorized to waive the 20 percent coin-
surance amount applicable under subsection (a) whenever the 
purchase price of such equipment is at least 25 percent less than 
the reasonable charge for comparable new equipment." 
(3) by inserting "(1)" after " ( f ) " and by adding after para-
graph (1) the following new paragraph: 
"(2) In the case of rental of durable medical equipment, the 
Secretary may, pursuant to agreements made with suppliers of 
such equipment, establish any reimbursement procedures (includ-
ing payment on a lump-sum basis in lieu of prolonged rental pay-
ments) which he finds to be equitable, economical, and feasible." 
UXIFORM STANDARDS FOR SKILLED NURSIXG FACILITIES TINDER MEDICARE 
AND MEDICAID 
42 use 1396a. 
gj,c. 246. (a) Sectiou 1902(a) (28) of the Social Security Act is 
amended to read as follows: 
"(28) provide that any skilled nursing facility receiving payments 
under such plan must satisfy all of the requirements contained in sec-
tion 1861 (j), except that the exclusion contained therein with respect 
to institutions which are primarily for the care and treatment of 
mental diseases and tuberculosis shall not apply for purposes of this 
title;" 
(b) Section 1861 (j) of such Act, as amended by section 234.(d) of 
yinte, p. 1412. this Act, is further amended— 
(1) by striking out "and" at the end of paragraph (10); 
(2) by redesignating paragraph (11) as paragraph (15); 
(3) by inserting after paragraph (10) the following new 
paragraphs: 
"(11) supplies full and complete information to the Secretary 
or his delegate as to the identity (A) of each person who has any 
direct or indirect ownership interest of 10 per centum or more in 
such skilled nursing facility or who is the owner (in whole or in 
part) of any mortgage, deed of trust, note, or other obligation 
secured (in whole or in part) by such skilled nursing facility or 
any of the property or assets of such skilled nursing facility, (B) 
in case a skilled nursing facility is organized as a corporation, of 
each officer and director of the corporation, and (C) in case a 
skilled nursing facility is organized as a partnership, of each part-
ner; and promptly reports any changes which would affect the 
current accuracy of the information so required to be supplied; 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1425 
"(12) cooperates in an effective program Avliich provides for a 
regular program of independent medical evaluation and audit of 
the patients in the f 
acility^ to the extent required by the programs 
in which the facility paiticipates (including medical evaluation of 
each patient's need for skilled nui-sing facility care); 
"(13) meets such provisions of the Life Safety Code of the 
National Fire Protection Association (21st edition, 1967) as are 
applicable to nursing homes; except that the Secretary may waive, 
for such periods as he deems appropriate, specific provisions of 
such Code which if rigidly applied would result in unreasonable 
hardship upon a nursing home, but only if such waiver will not 
adversely affect the health and safety of the patients; except that 
the provisions of such Code shall not apply in any State if the 
Secretary finds that in such State there is in effect a fire and safety 
code, imposed by State law, Avhich adequately protects patients in 
nursing facilities; and" and 
(4) by adding at the end of paragraph (15) (as redesignated 
by paragraph (2) of this subsection) the following new sentence: 
"Notwithstanding any other provision of law, all information 
concerning skilled nursing facilities required by this subsection to 
be filed with the Secretary shall be made available to Federal or 
State employees for purposes consistent Avith the effective admin-
istration of programs established under titles X V I I I and X I X 
of this Act." 
(c) The amendments made by this section shall be effective July 1, 
1973. 
42 u s e 1395, 
1396. 
Effective date. 
LEVEL OF CARE REQUIREMEXTS TOR SKILLED NURSIXG HOME 
SERVICES 
SEC. 247. (a) Section 1814(a)(2)(C) of the Social Security Act 
is amended by striking out everything which appears before "(or 
services" and inserting in lieu thereof the following: 
"(C) in the case of post hospital extended care services, such 
services are or were required to be ariven because the individual 
needs or needed on a daily basis skilled nursing care (provided 
directly by or requiring the supervision of skilled nui-sing person-
nel) or other skilled rehabilitation sendees, which as a practical 
matter can only be provided in a skilled nui-sing facility on an 
inpatient basis, for any of the conditions with respect to which 
he was receiving inpatient hospital sendees". 
(b) Section 1905 of the Social Security Act, as amended by section 
212 of this Act, is further amended by adding at the end thereof the 
following new subsection: 
"(f) For purposes of this title, the term 'skilled numng facility 
services' means services which are or were required to be.given an 
individual who needs or needed on a daily basis skilled nursing care 
(provided directly by or requiring the supervision of skilled nursing 
personnel) or other skilled I'ehabilitation services which as a practical 
matter can only be provided in a skilled nui'sing facility on an 
inpatient basis." 
(c) The amendments made by this section shall be effective Avith 
respect to services furnished after December 31,1972. 
MODinCATION OF MEDICARE'S 14-DAY TRAXSFER REQUIREMENT FOR 
EXTENDED CARE BENEFITS 
42 u s e 1395f. 
Ante, p. 1384. 
"Skilled nursing 
facility services." 
Effective date. 
42 u s e 139Sx. 
1426 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
after discharge from such hospital, or (B) within 28 days after such 
discharge, in the case of an individual who was unable to be admitted 
to a skilled nursing facility within such 14 days because of a shortage 
of appropriate bed space m the geographic area in which he resides, 
or (^C) within such time as it would be medically appropriate to 
begin an active course of treatment, in the case of an individual whose 
condition is such that skilled nursing facility care would not be 
medically appropriate within 14 days after discharge from a hospital;" 
REIMBURSEMENT RATES FOR SKILLED NURSING AND INTERMEDIATE 
CARE FACILITIES 
Ante, p. 1410. 
SEC. 249. (a) Section 1902(a) (13) of the Social Security Act, as 
amended by section 221 (c) (5) of this Act, is further amended— 
(1) by inserting "and" at the end of subparagraph (D), and 
(2) by inserting after subparagraph (D) the following new 
paragraph: 
"(E) effective July 1, 1976, for payment of the skilled nursing 
facility and intermediate care facility services provided under 
the plan on a reasonable cost related basis, as determined in 
accordance with methods and standards which shall be developed 
by the State on the basis of cost-finding methods approved and 
verified by the Secretary;". 
(b) Section 1861 (v)(l) of such Act, as amended by sections 223 
Ante, p. 1405. 
^nd 227 of this Act, is further amended by inserting after subpara-
graph (D) the following new subparagraph: 
"(E) Such regulations may, in the case of skilled nursing facilities 
in any State, provide for the uses of rates, developed by the State in 
which such facilities are located, for the payment of the cost of skilled 
nursing facility services furnished under the State's plan approved 
42 use 1396. 
under title X I X (and such rates may be increased by the Secretary 
on a class or size of institution or on a geographical basis by a per-
centage factor not in excess of 10 percent to take into account deter-
minable items or services or other requirements under this title not 
otherwise included in the computation of such State rates), if the Sec-
retary finds that such rates are reasonably related to (but not neces-
sarily limited to) analyses undertaken by such State of costs of care in 
comparable facilities in such State; except that the foregoing provi-
sions of this subparagraph shall not apply to any skilled nursing 
facility in such State if— 
"(i) such facility is a distinct part of or directly operated by 
a hospital, or 
"(ii) such facility operates in a close, foi-mal satellite relation-
ship (as defined in regulations of the Secretary) with a par-
ticipating hospital or hospitals. 
Xotwithstanding the previous provisions of this paragraph in the case 
of a facility specified in clause (ii) of this subparagraph, the reason-
able cost or any services furnished by such facility as determined by 
the Secretary under this subsection shall not exceed 150 percent of the 
costs determined by the application of this subparagraph (without 
regard to such clause (ii)).". 
MEDICAID CERTIFICATION AND APPROVAL OF SKILLED NURSING FACILITIES 
SEC. 249A. (a) Title X I X of the Social Security Act is amended 
by adding at the end thereof (after the new section 1909 added by 
Ante, p. 1420. 
^\^\^ Act) the following new section: 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1427 
•CERTIFICATION AND APPROVAL OF SKILLED NURSING FACILITIES 
"SEC. 1910. (a) Whenever the Secretary certifies an institution in 
a State to be qualified as a skilled nursing facility under title XVIII, 
such institution shall be deemed to meet the standards for certification 
as a skilled nursing facility for purposes of section 1902(a) (28). 
"(b) The Secretary shall notify the State agency administering the 
medical assistance plan of his approval or disapproval of any institu-
tion which has applied for certification by him as a qualified skilled 
nursing facility." 
(b) Section 1866(a) (1) of the Social Security Act is amended by 
adding at the end thereof the following sentence: "An agreement under 
this paragraph with an extended care facility shall be for a term of 
not exceeding 12 months, except that the Secretary may extend such 
term for a period not exceeding 2 months, where the health and safety 
of patients will not be jeopardized thereby, if he finds that such 
extension is necessary to prevent irreparable harm to such facility or 
hardship to the individuals being furnished items or services hj such 
facility or if he finds it impracticable within such 12-month period to 
determine whether such facility is complying with the provisions of 
this title and regulations thereunder." 
(c) Section 1866(b) of such Act is amended by— 
(1) striking out, in the material which precedes clause (1), 
"terminated-" and inserting in lieu thereof "terminated (and 
in the case of an extended care facility, prior to the end of the 
term specified in subsection (a)(1))-"; and 
(2) by striking out all of clause (3) appearing after the phrase 
"Any termination shall be applicable—" and inserting in lieu 
thereof the following: 
"(3) in the case of inpatient hospital services (including 
tuberculosis hospital services and inpatient psychiatric hos-
pital services) or post-hospital extended care services, with 
respect to services furnished after the effective date of such 
termination, except that payment may be made for up to 
thirty days with respect to inpatient institutional services 
furnished to any eligible individual who was admitted to 
such 
institution 
prior 
to the effective 
date of 
such 
termination,". 
(d) Section 1866(c) of such Act is amended by inserting "(1)" 
after "(c)" and by adding at the end thereof the following new 
paragraph: 
"(2) In the case of a skilled nursing facility participating in the 
programs established by this title and title XIX, the Secretary may 
enter into an agreement under this section only if such facility has 
been approved pursuant to section 1910, and the term of any such 
agreement shall be in accordance with the period of approval of eligi-
bility specified by the Secretary pursuant to such section." 
(e) The provisions of this section shall be effective with respect to 
agreements filed with the Secretary under section 1866 of the Social 
Security Act by skilled nursing facilities (as defined in section 1861 (j) 
of such Act) before, on, or after the date of enactment of this Act, 
but accepted by him on or after such date. 
(f) Notwithstanding any other provision of law, any agreement, 
filed by a skilled nursing facility (as defined in section 1861 (j) of the 
Social Security Act) with the Secretary under section 1866 of such 
Act and accepted by him prior to the date of enactment of this Act, 
which was in effect on such date shall be deemed to be for a specified 
term ending on December 31, 1973. 
42 u s e 1395. 
Ante, p. 1424. 
Notification. 
42 u s e 1395CC. 
42 u s e 1395, 
1396. 
Effective date. 
42 u s e 139Sx. 
Termination 
date. 
1428 
PUBLIC LAW 92-^03_OCT. 30, 1972 
[86 STAT. 
PAYMENTS TO STATES UNDER MEDICAID FOR COMPENSATION OF INSPECTORS 
RESPONSIBLE FOR M A I N T A I N I N G COMPLIANCE W I T H FEDERAL STANDARDS 
SEC. 249B. Section 1903(a) of the Social Security Act, as amended 
^^An<e, pp. 1380, by sections 207(a)(2) and 235(a) of this Act, is further amended, 
Effective pe- 
etfcctive for the period beginning October 1, 1972, and ending June 
"od- 
30, 1974, by redesignating paragraph (4) as paragraph (5), and by 
inserting after paragraph (3) the following new paragraph: 
"(4) an amount equal to 100 per centum of the sums expended 
during such quarter (as found necessary by the Secretary for 
the proper and efficient administration of the State plan) which 
are attributable to compensation or training of personnel (of the 
State agency or any other public agency) responsible for inspect-
ing public or private institutions (or portions thereof) providing 
long-term care to recipients of medical assistance to determine 
whether such institutions comply with health or safety standards 
applicable to sucli institutions under this Act; plus". 
DISCLOSURE OF INFORMATION CONCERNING T H E PERFORMANCE OF CARRIERS, 
INTERMEDIARIES, STATE AGENCIES, AND PROVIDERS OF SERVICES UNDER 
MEDICARE AND MEDICAID 
42 use 1306. 
SEC. 249C. (a) Section 1106 of the Social Security Act is amended 
by adding at the end thereof the following new subsections: 
"(d) Notwithstanding any other provision of this section the Sec-
retary shall make available to each State agency operating a program 
42 use 1396. 
under title X I X and shall, subject to the limitations contained in sub-
section (e), make available for public inspection in readily accessible 
form and fashion, the following official reports (not including, how-
ever, references to any internal tolerance rules and practices that may 
be contained therein, internal working papere or other informal memo-
randa) dealing with the operation of the health programs established 
42 use 1395, 
by titles X V I I I and XIX— 
"(1) individual contractor performance reviews and other for-
mal evaluations of the performance of carriers, intermediaries, 
and State agencies, including the reports of follow-up reviews; 
"(2) comparative evaluations of the performance of such con-
tractors, including comparisons of either overall performance or 
of any particular aspect of contractor operation; and 
"(3) program validation survey reporte and other formal eval-
uations of the performance of providers of services, including 
the reports of follow-up reviews, except that such reports shall 
not identify individual patients, individual health care practition-
ers, or other individuals, 
eontractor, re- 
"(g) jy[Q report described in subsection (d) shall be made public 
)rt review. 
-^^ ^^^ Secretary or the State title X I X agency until the contractor 
or provider of services whose performance is being evaluated has had 
a reasonable opportunity (not exceeding 60 days) to review such 
report and to offer comments pertinent parts of which may be incor-
porated in the public report; nor shall the Secretary be required to 
include in any such report information with respect to any deficiency 
(or improper practice or procedures) which is known by the Secre-
tary to have been fully corrected, within 60 days of the date such 
deficiency was first brought to the attention of such contractor or 
provider of services, as the case may be." 
Effective date. 
(b) ^he provisions of subsection (a) shall apply with respect to 
reports which are completed by the Secretary after the third calendar 
month following the enactment of this Act. 
1396 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1429 
LIMITATION ON INSTITUTIONAL CARE 
SEC. 249D. Section 121(b) of the Social Security Amendments of 
1965 is amended by adding at the end thereof the following new 
^j use U96b 
sentence: "After the date of enactment of the Social Security Amend- note. 
ments of 1972, Federal matching shall not be available for any portion 
of any payment by any State under title I, X, XIV, or XVI, 
or part A of title IV, of the Social Security Act. for or on account 
of any medical or any other type of remedial care provided by an 
institution to any individual as an inpatient thereof, in the case of 
any State which has a plan approved under title X I X of such Act, 
if such care is (or could be) provided under a State plan approved 
under title X I X of such Act by an institution certified under such 
title XIX.". 
42 
use 
301, 
1201, 1351, 1381, 
601. 
42 
use 
1396. 
DETERMINING ELIGIBILITY FOR ASSISTANCE UNDER TITLE XIX FOR CERTAIN 
INDIVIDUALS 
SEC. 249E. For purposes of section 1902(a) (10) of the Social Secu-
rity Act any individual who, for the month of August 1972, was eligible 
for or receiving aid or assistance under a State plan approved under 
title I, X, XIV, or XVI, or part A of title IV of such Act and who 
for such month was entitled to monthly insurance benefits under title 
I I of such Act shall be deemed to be eligible for such aid or assistance 
for any month thereafter prior to October 1974 if such individual 
would have been eligible for such aid or assistance for such month had 
the increase in monthly insurance benefits under title I I of such Act 
resulting from enactment of Public Law 92-336 not been applicable to 
such individual. 
PROFESSIONAL STANDARDS REVIEW 
42 u s e 1396a. 
42 u s e 401. 
Ante, p. 406. 
SEC. 249F. (a) The heading to title X I of the Social Security Act 
42 use isoi, 
is amended by striking out 
"TITLE XI—GENERAL PROVISIONS" 
and inserting in lieu thereof 
"TITLE XI—GENERAL PROVISIONS AND 
PROFESSIONAL STANDARDS REVIEW 
"PART A—GENERAL PROVISIONS" 
(b) Title X I of such Act is further amended by adding the 
^"'*' P- ^'•S. 
following: 
"PART B—PROFESSIONAL STANDARDS REVIEW 
it DECLARATION OF PURPOSE 
"SEC. 1151. In order to promote the effective, efficient, and economi-
cal delivery of health care services of proper quality for which pay-
ment may be made (in whole or in part) under this Act and in 
recognition of the interests of patients, the public, practitioners, and 
providers in improved health care services, it is the purpose of this 
part to assure, through the application of suitable procedures of pro-
fessional standards review, that the services for which payment may 
be made under the Social Security Act will conform to appropriate 
professional standards for the provision of health care and that pay-
ment for such services will be made— 
1430 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"(1) only when, and to the extent, medically necessary, as 
determined in the exercise of reasonable limits of professional 
discretion; and 
"(2) in the case of services provided by a hospital or other 
health care facility on an inpatient basis, only when and for such 
period as such services cannot, consistent with professionally 
recognized health care standards, effectively be provided on an 
outpatient basis or more economically in an inpatient health care 
facility of a different type, as determined in the exercise of rea-
sonable limits of professional discretion. 
"DESIGNATION OF PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS 
"SEC. 1152. (a) The Secretary shall (1) not later than January 1, 
1974, establish throughout the United States appropriate areas with 
respect to which Professional Standards Review Organizations may 
be designated, and (2) at the earliest practicable date after designation 
of an area enter into an agreement with a qualified organization 
whereby such an organization shall be conditionally designated as 
,, 
the Professional Standards Review Organization for such area. If, on 
the basis of its performance during such period of conditional desig-
nation, the Secretary determines that such organization is capable of 
fulfilling, in a satisfactory manner, the obligations and requirements 
for a Professional Standards Review Organization under this part, 
he shall enter into an agreement with such organization designating 
it as the Professional Standards Review Organization for such area. 
"Qualified or- 
"'(h) For purposes of subsection (a), the term 'qualified organiza-
ganxzation. 
t i o u ' mCaUS 
"(1) when used in connection with any area—-
"(A) an organization (i) which is a nonprofit professional 
association (or a component organization thereof), (ii) which 
is composed of licensed doctors of medicine or osteopathy 
engaged in the practice of medicine or surgery in such area, 
(iii) the membership of which includes a substantial propor-
tion of all such physicians in such area, (iv) which is orga-
nized in a manner which makes available professional com-
petence to review health care services of the types and kinds 
with respect to which Professional Standards Review Orga-
nizations have review responsibilities under this part, (v) the 
membership of which is voluntary and open to all doctors of 
medicine or osteopathy licensed to engage in the practice of 
medicine or surgery in such area without requirement of 
membership in or payment of dues to any organized medical 
society or association, and (vi) which does not restrict the 
eligibility of any member for service as an officer of the Pro-
fessional Standards Review Organization or eligibility for 
and assignment to duties of such Professional Standards Re-
view Organization, or, subject to subsection (c) (i), 
"(B) such other public, nonprofit private, or other agency 
or organization, which the Secretary determines, in accord-
ance with criteria prescribed by him in regulations, to be of 
professional competence and otherwise suitable; and 
"(2) an organization which the Secretary, on the basis of his 
examination and evaluation of a formal plan submitted to him by 
the association, agency, or organization (as well as on the basis 
of other relevant data and information), finds to be willing to 
perform and capable of performing, in an effective, timely, and 
, 
objective manner and at reasonable cost, the duties, functions, and 
\ 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1431 
activities of a Professional Standards Review Organization 
required by or pursuant to this part. 
" (c) (1) The Secretary shall not enter into any agreement under this 
part under which there is designated as the Professional Standards 
Review Organization for any area any organization other than an 
organization referred to in subsection (b) (1) (A) prior to January 
1,1976, nor after such date, unless, in such area, there is no organization 
referred to in subsection (b) (1) (A) which meets the conditions 
specified in subsection (b) (2). 
"(2) Whenever the Secretary shall have entered into an agreement 
under this part under which there is designated as the Professional 
Standards Review Organization for any area any organization other 
than an organization referred to in subsection (b) (1) (A), he shall not 
renew such agreements with such organization if he determines that— 
"(A) there is in such area an organization referred to in sub-
section (b) (1) (A) which (i) has not been previously designated 
as a Professional Standards Review Organization, and (ii) is 
willing to enter into an agreement under this part under which 
such organization would be designated as the Professional Stand-
ards Review Organization for such area; 
"(B) such organization meets the conditions specified in sub-
section (b)(2);and 
"(C) the designation of such organization as the Professional 
Standards Review Organization for such area is anticipated to 
result in substantial improvement in the performance in such 
area of the duties and functions required of such organizations 
under this part. 
"(d) Any such agreement under this part with an organization 
(other than an agreement established pursuant to section 1154) shall 
be for a term of 12 months; except that, prior to the expiration of 
such term such agreement may be terminated— 
"(1) by the organization at such time and upon such notice 
to the Secretary as may be prescribed in regulations (except that 
notice of more than 3 months may not be required); or 
"(2) by the Secretary at such time and upon such reasonable 
notice to the organization as may be prescribed in regulations, 
but only after the Secretary has determined (after providing 
such organization with an opportunity for a formal hearing on 
the matter) that such organization is not substantially complying 
with or effectively carrying out the provisions of such agreement. 
"(e) In order to avoid duplication of functions and unnecessary 
review and control activities, the Secretary is authorized to waive any 
or all of the revicAv, certification, or similar activities otherwise 
required under or pursuant to any provision of this Act (other than 
this part) where he finds, on the basis of substantial evidence of the 
effective performance of review and control activities by Professional 
Standards Review Organizations, that the review, certification, and 
similar activities otherwise so required are not needed for the pro-
vision of adequate review and control. 
"(f) (1) In the case of agreements entered into prior to January 1, 
1976, under this part under which any organization is designated as 
the Professional Standards Review Organization for any area, the 
Secretary shall, prior to entering into any such agreement with any 
organization for any area, inform (under regulations of the Secretary) 
the doctors of medicine or osteopathy who are in active practice in 
such area of the Secretary's intention to enter into such an agreement 
with such orgranization. 
' 
Agreement expi-
ration; prior ter-
mination. 
Post, 
p. 1432. 
.»•!-• J u Q 
Waiver. 
Agreement 
-081 O - 73 - ! 
1432 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
" (2) If, within a reasonable period of time following the sei-ving of 
such notice, more than 10 per centum of such doctoi'S object to the 
Secretary's entering into such an agreement with such organization 
on the ground that such organization is not representative of doctors 
in such area, the Secretary shall conduct a poll of such doctors to deter-
mine whether or not such organization is representative of such doctors 
in such area. If more than 50 per centum of the doctoi-s responding to 
sucih poll indicate that such organization is not representative of such 
doctors in such area the Secretary shall not enter into such an agree-
ment with such organization. 
Plan, approval. 
Duties. 
Termination, 
notice. 
"REVIEW PENDING DESIGNATION OF PROFESSIONAL STANDARDS 
REVIEW ORGANIZATION 
"SEC. 1153. Pending the assumption bv a Professional Standards 
Keview Organization for any area, of full review responsibility, and 
pending a demonstration of capacity for improved review effort with 
respect to matters invdlving the provision of health care semces in 
such area for which payment (in whole or in part) may be made, under 
this Act, any review with respect to such services which has not been 
designated by the Secretary as the full responsibility of such organiza-
tion, shall be reviewed in the manner otherwise provided for under 
law. 
" T R I A L PERIOD FOR PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS 
"SEC. 1154. (a) The Secretary shall initially designate an organiza-
tion as a Professional Standards Review Organization for any area 
on a conditional basis with a view to determining the capacity of such 
organization to perform the duties and functions imposed under this 
part on Professional Standards Review Organizations. Such designa-
tion may not be made prior to receipt from such organization and 
approval by the Secretary of a formal plan for the orderly assump-
tion and implementation of the responsibilities of the Professional 
Standards Review Organization under this part. 
"(b) During any such trial period (which may not exceed 24 
months), the Secretary may require a Professional Standards Review 
Organization to perform only such of the duties and functions required 
under this part of Professional Standards Review Organization as 
he determines such organization to be capable of performing. The 
number and type of such duties shall, during the trial period, be 
progressively increased as the organization becomes capable of added 
responsibility so that, by the end of such period, such organization 
shall be considered a qualified organization only if the Secretary finds 
that it is substantially carrying out in a satisfactory manner, the 
activities and functions required of Professional Standards Review 
Organizations under this part with respect to the review of health 
care services provided or ordered by physicians and other practitioners 
and institutional and other health care facilities, agencies, and orga-
nizations. Any of such duties and functions not performed by such 
organization during such period shall be performed in the manner and 
to the extent otherwise provided for under law. 
"(c) Any agreement under which any organization is conditionally 
designated as the Professional Standards Review Organization for any 
area may be terminated by such organization upon 90 days notice to 
the Secretary or by the Secretary upon 90 days notice to such 
organization. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1433 
"DUTIES AXD FUNCTIONS OF PROFESSIONAL STANDARDS REVIEW 
ORGANIZATIONS 
"SEC. 1155. (a) (1) Notwithstanding any other provision of law, but 
consistent with the provisions of this part, it shall (subject to the pro-
visions of subsection (g)) be the duty and function of each Profes-
sional Standards Review Organization for any area to assume, at the 
earliest date practicable, responsibility for the review of the profes-
sional activities in such area of physicians and other health care prac-
titioners and institutional and noninstitutional providers of health 
care services in the provision of health care services and items for 
which payment may be made (in whole or in part) under this Act for 
the purpose of determining whether— 
"(A) such services and items are or were medically necessary; 
"(B) the quality of such services meets professionally recog-
nized standards of health care; and 
"(C) in case such services and items are proposed to be pro-
vided in a hospital or other health care facility on an inpatient 
basis, such services and items could, consistent with the provision 
of appropriate medical care, be effectively provided on an out-
patient basis or more economically in an inpatient health care 
facility of a different type. 
"(2) Each Professional Standards Review Organization shall have 
the authority to determine, in advance, in the case of— 
"(A) any elective admission to a hospital, or other health care 
facility, or 
"(B) any other health care service which will consist of 
extended or costly courses of treatment, 
whether such service, if provided, or if provided by a particular health 
care practitioner or by a particular hospital or other health care 
facility, organization, or agency, would meet the criteria specified in 
clauses (A) and (C) of paragraph (1). 
"(3) Each Professional Standards Review Organization shall, in 
accordance with regulations of the Secretary, determine and publish, 
from time to time, the types and kinds of cases (whether by type of 
health care or diagnosis involved, or whether in terms of other rele-
vant criteria relating to the provision of health care services) with 
respect to which such organization will, in order most effectively to 
carry out the purposes of this part, exercise the authority conferred 
upon it under paragraph (2). 
"(4) Each Professional Standards Review Organization shall be 
responsible for the arranging for the maintenance of and the regular 
review of profiles of care and services received and provided with 
respect to patients, utilizing to the greatest extent practicable in such 
patient profiles, methods of coding which will provide maximum con-
fidentiality as to patient identity and assure objective evaluation con-
sistent with the purposes of this part. Profiles shall also be regularly 
reviewed on an ongoing basis with respect to each health care prac-
titioner and provider to determine whether the care and services 
ordered or rendered are consistent with the criteria specified in clauses 
(A), (B),and (C) of paragraph (1). 
"(5) Physicians assigned responsibility for the review of hospital 
care may be only those having active hospital staff privileges in at 
least one of the participating hospitals in the area served by the Pro-
fessional Standards Review Organization and (except as may be other-
wise provided under subsection (e) (1) of this section) such physicians 
ordinarily should not be responsible for, but may participate in the 
review of care and services provided in any hospital in which such 
physicians have active staff privileges. 
Case criteria, 
publication. 
Patient pro-
files, mainte-
nance and review. 
Hospital care, 
physician review. 
1434 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"(6) No physician shall be permitted to review— 
"(A) health care services provided to a patient if he was 
directly or indirectly involved in providing such services, or 
"(B) health care services provided in or by an institution, 
organization, or agency, if he or any member of his family has, 
directly or indirectly, any financial interest in such institution, 
organization, or agency. 
Physician's 
For purposes of this paragraph, a physician's family includes only his 
family. 
spouse (othcr than a spouse who is legally separated from him under 
a decree of divorce or separate maintenance), children (including 
legally adopted children), grandchildren, parents, and grandparents. 
"(b) To the extent necessary or appropriate for the proper perform-
ance of its duties and functions, the Professional Standards Review 
Organization serving any area is authorized in accordance with regu-
lations prescribed by the Secretary to— 
"(1) make arrangements to utilize the services of persons who 
are practitioners of or specialists in the various areas of medicine 
(including dentistry), or other types of health care, which persons 
shall, to the maximum extent practicable, be individuals engaged 
in the practice of their profession within the area served by such 
organization; 
"(2) undertake such professional inquiry either before or after, 
or both before and after, the provision of services with respect to 
which such organization has a responsibility for review under 
subsection (a) (1); 
"(3) examine the pertinent records of any practitioner or pro-
vider of health care services providing services with respect to 
which such organization has a responsibility for review undei 
subsection (a) (1); and 
"(4) inspect the facilities in which care is rendered or services 
provided (which are located in such area) of any practitioner oi 
provider. 
"(c) No Professional Standards Review Organization shall utilize 
the services of any individual who is not a duly licensed doctor of 
medicine or osteopathy to make final determinations in accordance 
with its duties and functions under this part with respect to the pro-
fessional conduct of any other duly licensed doctor of medicine or 
osteopathy, or any act performed by any duly licensed doctor of 
medicine or osteopathy in the exercise of his profession. 
"(d) In order to familiarize physicians with the review functions 
and activities of Professional Standards Review Organizations and to 
promote acceptance of such functions and activities by physicians, 
patients, and other persons, each Professional Standards Review 
Organization, in carrying out its review responsibilities, shall (to 
the maximum extent consistent with the effective and timely perform-
ance of its duties and functions)— 
"(1) encourage all physicians practicing their profession in the 
area served by such Organization to participate as reviewers in 
the review activities of such Organizations; 
"(2) provide rotating physician membership of review com-
mittees on an extensive and continuing basis; 
"(3) assure that membership on review committees have the 
broadest representation feasible in terms of the various types of 
practice in which physicians engage in the area served by such 
Organization; and 
''(4) utilize, whenever aj^propriate, medical periodicals and 
similar publications to publicize the functions and activities of 
Professional Standards Review Organizations. 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1435 
"(e)(1) Each Professional Standards Review Organization sliall 
utilize the services of, and accept the findings of, the review com-
mittees of a hospital or other operating health care facility or orga-
nization located in the area served by such organization, but only when 
and only to the extent and only for such time that such committees in 
such hospital or other operating health care facility or organization 
have demonstrated to the satisfaction of such organization their 
capacity effectively and in timely fashion to review activities in such 
hospital or other operating health care facility or organization 
(including the medical necessity of admissions, types and extent of 
services ordered, and lengths ef stay) so as to aid in accomplishing 
the purposes and responsibilities described in subsection (a)(1), except 
Avhere the Secretary disapproves, for good cause, such acceptance. 
" (2) The Secretary may prescribe regulations to carry out the pro-
visions of this subsection. 
"(f)(1) An agreement entered into under this part between the 
Secretary and any organization under which such organization is 
designated as the Professional Standards Review Organization for 
any area shall provide that such organization will— 
"(A) perform such duties and functions and assume such 
responsibilities and comply with such other requirements as may 
be required by this part or under regulations of the Secretary 
promulgated to carry out the provisions of this part; and 
"(B) collect such data relevant to its functions and such infor-
mation and keep and maintain such records in such form as 
the Secretary may require to carry out the purposes of this pait 
and to permit access to and use of any such records as the Secre-
tary may require for such purposes. 
"(2) Any such agreement with an organization under this part shall 
provide that the Secretary make payments to such organization equal 
to the amount of expenses reasonably and necessarily incurred, as 
determined by the Secretary, by such organization in carrying out or 
preparing to carry out the duties and functions required by such 
agreement. 
"(g) Notwithstanding any other provision of this part, the respon-
sibility for review of health care services of any Professional 
Standards Review Organization shall be the review of health care 
services provided by or in institutions, unless such Organization shall 
have made a request to the Secretary that it be charged with the 
duty and function of reviewing other health care services and the 
Secretary shall have approved such request. 
Review commit-
tees. 
Regulations. 
Agreement re-
quirements. 
"XORMS OF HEALTH CARE SERVICES FOR VARIOrS HJ.XESSES OR HEALTH 
CONDITIONS 
"SEC. 1156. (a) Each Professional Standards Review Organization 
shall apply professionally developed norms of care, diagnosis, and 
treatment based upon typical patterns of practice in its regions 
(including typical lengths-of-stay for institutional care by age and 
diagnosis) as principal points of evaluation and review. The National 
Professional Standards Review Council and the Secretary shall pro-
vide such technical assistance to the organization as will be helpful 
in utilizing and applying such norms of care, diagnosis, and treatment. 
Where the actual norms of care, diagnosis, and treatment in a Profes-
sional Standards Review Organization area are significantly different 
from professionally developed regional norms of care, diagnosis, and 
1436 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
treatment approved for comparable conditions, the Professional 
Standards Review Organization concerned shall be so informed, and 
in the event that appropriate consultation and discussion indicate 
reasonable basis for usage of other norms in the area concerned, the 
Professional Standards Review Organization may apply such norms 
in such area as are approved by the National Professional Standards 
Review Council. 
"(b) Such norms with respect to treatment for particular illnesses 
or health conditions shall include (in accordance with regulations of 
the Secretary)— 
"(1) the types and extent of the health care services which, 
taking into account differing, but acceptable, modes of treatment 
and methods of organizing and delivering care are considered 
within the range of appropriate diagnosis and treatment of such 
illness or health condition, consistent with professionally recog-
nized and accepted patterns of care; 
"(2) the type of health care facility which is considered, con-
sistent with such standards, to be the type in which health care 
services which are medically appropriate for such illness or condi-
tion can most economically be provided, 
dirtrlbuuon""*^"'* 
"(9) (-^) ^^^ National Professional Standards Review Council shall 
data.^ " 
provide for the preparation and distribution, to each Professional 
Standards Review Organization and to each other agency or person 
performing review functions with respect to the provision of health 
care services under this Act, of appropriate materials indicating the 
regional norms to be utilized pursuant to this part. Such data concern-
ing norms shall be reviewed and revised from time to time. The 
approval of the National Professional Standards Review Council of 
norms of care, diagnosis, and treatment shall be based on its analysis of 
appropriate and adequate data. 
"(2) Each review organization, agency, or person referred to in 
paragraph (1) shall utilize the norms developed under this section as 
a principal point of evaluation and review for determining, with respect 
to any health care services which have been or are proposed to be pro-
vided, whether such care and services are consistent with the criteria 
Ante, p. 1433. 
Specified in section 1155(a) (1). 
"(d) (1) Each Professional Standards Review Organization shall— 
"(A) in accordance with regulations of the Secretary, specify 
the appropriate points in time after the admission of a patient for 
inpatient care in a health care institution, at which the physician 
attending such patient shall execute a certification stating that 
further inpatient care in such institution will be medically neces-
sary effectively to meet the health care needs of such patient; and 
"(B) require that there be included in any such certification 
with respect to any patient such information as may be necessary 
to enable such organization properly to evaluate the medical 
necessity of the further institutional health care recommended by 
the physician executing such certification. 
"(2) The points in time at which any such certification will be 
required (usually, not later than the 50th percentile of lengths-of-stay 
for patients in similar age groups with similar diagnoses) shall be 
consistent with and based on professionally developed norms of care 
and treatment and data developed with respect to length of stay in 
health care institutions of patients having various illnesses, injuries, 
or health conditions, and requiring various types of health care serv-
ices or procedures. 
86 STAT. ] 
PUBLIC LAW 92-603~OCT. 30, 1972 
1437 
"SUBMISSION OF REPORTS BY PROFESIONAL STANDARDS REVIEW 
ORGANIZATIONS 
"SEC. 1157. If, in discharging its duties and functions under this 
part, any Professional Standards Review Organization determines 
that any health care practitioner or any hospital, or other health 
care facility, agency, or organization has violated any of the obliga-
tions imposed by section 1160, such organization shall report the 
^°*'' P- ^'•^S. 
matter to the Statewide Professional Standards Review Council for 
the State in which such organization is located together with the 
recommendations of such Organization as to the action which should 
be taken with respect to the matter. Any Statewide Professional 
Standards Review Council receiving any such report and recom-
mendation shall review the same and promptly transmit such report 
and recommendation to the Secretary together with any additional 
comments or recommendations thereon as it deems appropriate. The 
Secretary may utilize a Professional Standards Review Organization, 
in lieu of a program review team as specified in sections 1862 and 1866, 
79 stat. 325; 
for purposes of subparagraph (C) of section 1862(d)(1) and sub- * 4rusclagsy, 
paragraph (F) of section 1866(b) (2). 
i395cc. 
R E Q U I R E M E N T o r R E V I E W APPROVAL AS CONDITION OF PAYMENT OF CLAIMS 
"SEC. 1158. (a) Except as provided for in section 1159, no Federal 
funds appropriated under any title of this Act (other than title V) 
for the provision of health care services or items shall be used (directly 
or indirectly) for the payment, under such title or any program estab-
lished pursuant thereto, of any claim for the provision of such services 
or items, unless the Secretary, pursuant to regulation determines that 
the claimant is without fault if— 
"(1) the provision of such services or items is subject to review 
under this part by any Professional Standards Review Organiza-
tion, or other agency; and 
" (2) such organization or other agency has, in the proper exer-
cise of its duties and functions under or consistent with the 
purposes of this part, disapproved of the services or items giving 
rise to such claim, and has notified the practitioner or provider 
who provided or proposed to provide such services or items and 
the individual who would receive or was proposed to receive such 
services or items of its disapproval of the provision of such 
services or items. 
"(b) Whenever any Professional Standards Review Organization, 
in the discharge of its duties and functions as specified by or pursuant 
to this part, disapproves of any health care services or items furnished 
or to be furnished by any practitioner or provider, such organization 
shall, after notifying the practitioner, provider, or other organization 
or agency of its disapproval in accordance with subsection (a), 
promptly notify the agency or organization having responsibility for 
acting upon claims for payment for or on account of such services or 
items. 
"HEARINGS AND REVIEW BY SECRETARY 
"SEC. 1159. (a) Any beneficiary or recipient who is entitled to ben-
efits under this Act (other than title V) or a provider or practitioner 
who is dissatisfied with a determination with respect to a claim made 
by a Professional Standards Review Organization in carrying out its 
responsibilities for the review of professional activities in accordance 
with paragraphs (1) and (2) of section 1155(a) shall, after being 
Ante, p. 1408. 
Ante, p. 1409. 
81 Stat. 921. 
42 u s e 701. 
Ante, p. 1433. 
14a8 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
notified of such determination, be entitled to a reconsideration thereof 
by the Professional Standards RevieAv Organization and, where the 
Professional Standards Review Organization reaffirms such deter-
mination in a State which has established a Statewide Professional 
Standards Review Council, and where the matter in controversy is 
$100 or more, such determination shall be reviewed by professional 
members of such Council and, if the Council so determined, revised. 
" (b) Where the determination of the Statewide Professional Stand-
ards Review Council is adverse to the beneficiary or recipient (or, in 
the absence of such Council in a State and where the matter in con-
troversy is $100 or more), such beneficiary or recipient shall be entitled 
to a hearing thereon by the Secretary to the same extent as is provided 
42 u*sc 405*" 
"^ section 205(b), and, where the amount in controversy is $1,000 or 
more, to judicial review of the Secretary's final decision after such 
hearing as is provided in section 205(g). The Secretary will render a 
decision only after appropriate professional consultation on the 
matter. 
"(c) Any review or appeals provided under this section shall be in 
lieu of any review, hearing, or appeal under this Act with respect to 
the same issue. 
"OBLIGATIONS OF TTEALTTI CARE PRACTITIONERS AND PROVIDERS OF HEALTH 
CARE SERVICES; SANCTIONS AND PENALTIES; HEARINGS AND REVIEW 
"SEC. 1160. (a)(1) It shall be the obligation of any health care 
practitioner and any other person (including a hospital or other 
health care facility, organization, or agency) who provides health 
care services for which payment may be made (in whole or in part) 
under this Act, to assure that services or items ordered or provided by 
such practitioner or person to beneficiaries and i-ecipients under this 
Act— 
"(A) will be provided only when, and to the extent, medically 
necessary; and 
"(B) will be of a quality which meets professionally recognized 
standards of health care; and 
"(C) will be supported by evidence of such medical necessity 
and quality in such form and fashion and at such time as may 
reasonably be required bv the Professional Standards Review 
Organization in the exercise of its duties and responsibilities; 
and it shall b^. the obligation of any health care practitioner in order-
ing, authorizing, directing, or arranging for the provision by any 
other person (including a hospital or other health care facility, organi-
zation, or agency), of health care services for any patient of such prac-
titioner, to exercise his professional responsibility with a view to 
assuring (to the extent of his influence or control over such patient, 
such person, or the provision of such services) that such services or 
items will be provided— 
"(D) onlv when, and to the extent, medically necessary; and 
"(E) will be of a quality which meets professionally recognized 
standards of health care. 
"(2) Each health care practitioner, and each hospital or other 
provider of health care services, shall have an obligation, within 
reasonable limits of professional discretion, not to take any action, in 
the exercise of his profession (in the case of any health care practi-
tioner) , or in the conduct of its business (in the case of any hospital or 
other such provider), which would authorize any individual to be 
admitted as an inpatient in or to continue as an inpatient in any 
hospital or other health care facility unless— 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
^ 9 
"(A) inpatient care is determined by such practitioner and by 
such hospital or other provider, consistent with professionally 
recognized health care standards, to be medically necessary for 
the proper care of such individual; and 
"(B) (i) the inpatient care required by such individual can-
not, consistent with such standards, be provided more economi-
cally in a health care facility of a different type; or 
"(ii) (in the case of a patient who requires care which can, 
consistent with such standards, be provided more economically 
in a health care facility of a different type) there is, in the area 
in which such individual is located, no such facility or no such 
facility which is available to provide care to such individual at 
the time when care is needed by him. 
"(b) (1) If after reasonable notice and opportunity for discussion 
Report and 
with the practitioner or provider concerned, any Professional Stand- '•^^°"»'"«n'*^*i°"s 
ards Review Organization submits a report and recommendations to 
the Secretary pui-suant to section 1157 (which report and recom- 
Ante, p. 1437. 
mendations shall be submitted through the Statewide Professional 
Standards Review (^ouncil, if such Council has been established, which 
shall promptly transmit such report and recommendations together 
with any additional comments and recommendations thereon as it 
deems appropriate) and if the Secretary determines that such prac-
titioner or provider, in providing health care services over which such 
organization has review responsibility and for which payment (in 
whole or in part) may be made under this Act has— 
"(A) by failing, in a substantial number of cases, substantially 
to comply with any obligation imposed on him under subsection 
(a),or 
"(B) by grossly and flagranti}^ violating any such obligation 
in one or more instances, 
demonstrated an unwillingness or a lack of ability substantially to 
comply with such obligations, he (in addition to any other sanction 
provided under law) may exclude (permanently for such period as 
the Secretary may prescribe) such practitioner or provider from eli-
gibility to provide such services on a reimbui-sable basis. 
"('2) A determination made by the Secretary under this subsection 
shall be effective at such time and upon such reasonable notice to the 
public and to the person furnishing the services involved as may be 
specified in regulations. Such determination shall be effective with 
i-espect to services furnished to an individual on or after the effective 
date of such determination (except that in the case of institutional 
•
* 
health care servicer such determination shall be effective in the manner 
provided in title X V I I I with respect to terminations of provider 
42 use 1395. 
agreements), and shall remain in effect until the Secretary finds and 
gives reasonable notice to the public that the basis for such determina-
tion has been removed and that there is reasonable assurance that it 
will not recur. 
" (3) In lieu of the sanction authorized by pai'agraph (1), the Secre-
tary may require that (as a condition to the continued eligibility of 
such practitioner or provider to provide such health care services on 
a reimbursable basis) such practitioner or provider pay to the United 
States, in case such acts or conduct involved the provision or ordering 
by such practitioner or provider of health care services which were 
medically improper or unnecessary, an amount not in excess of the 
actual o;' estimated cost of the medically improper or unnecessary serv-
ices so provided, or (if less) $5,000. Such amount may be deducted 
from any sums owing by the United States (or any instnimentality 
thereof) to the person from whom such amount is claimed. 
5»i3i.a 
1440 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
53 Stat. 1368. 
42 u s e 405. 
"(4) Any person furnishing services described in paragraph (1) 
who is dissatisfied with a determination made by the Secretary under 
this subsection shall be entitled to reasonable notice and opportunity 
for a hearing thereon by the Secretary to the same extent as is pro-
vided in section 205(b), and to judicial review of the Secretary's final 
decision after such hearing as is provided in section 205 (g). 
"(c) It shall be the duty of each Professional Standards Review 
Organization and each Statewide Professional Standards Review 
Council to use such authority or influence it may possess as a profes-
sional organization, and to enlist the support of any other professional 
or governmental organization having influence or authority over 
health care practitioners and any other person (including a hospital 
or other health care facility, organization, or agency) providing health 
care services in the area served by such review organization, in assur-
ing that each practitioner or provider (referred to in subsection (a)) 
providing health care services in such area shall comply with all 
obligations imposed on him under subsection (a). 
"NOTICE TO PRACTITIONER OR PROVIDER 
"SEC. 1161. Whenever any Professional Standards Review Organi-
zation takes any action or makes any determination— 
"(a) w^hich denies any request, by a health care practitioner or 
other provider of health care services, for approval of a health 
care service or item proposed to be ordered or provided by such 
practitioner or provider; or 
"(b) that any such practitioner or provider has violated any 
obligation imposed on such practitioner or provider under section 
1160, 
such organization shall, immediately after taking such action or mak-
ing such determination, give notice to such practitioner or provider of 
such determination and the basis therefor, and shall provide him with 
appropriate opportunity for discussion and review of the matter. 
Establishment. 
Membership. 
Duties. 
" S T A T E W I D E P R O F E S S I O N A L STANDARDS REVIEW COUNCILS ; ADVISORY GROUPS 
TO SUCH COUNCILS 
"SEC. 1162. (a) In any State in which there are located three or more 
Professional Standards Review Organizations, the Secretary shall 
establish a Statewide Professional Standards Review Council. 
"(b) The membership of any such Council for any State shall be 
appointed by the Secretary and shall consist of— 
"(1) one representative from and designated by each Profes-
sional Standards Review Organization in the State; 
"(2) four physicians, two of whom may be designated by the 
State medical society and two of whom may be designated by the 
State hospital association of such State to serve as members on 
such Council; and 
" (3) four persons knowledgeable in health care from such State 
whom the Secretary shall have selected as representatives of the 
public in such State (at least two of whom shall have been recom-
mended for membership on the Council by the Governor of such 
State). 
"(c) It shall be the duty and function of the Statewide Professional 
Standards Review Council for anv State, in accordance with regula-
tions of the Secretary, (1) to coordinate the activities of, and dissemi-
nate information and data among the various Professional Standards 
Review Organizations within such State including assisting the Secre-
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1441 
tary in development of uniform data gathering procedures and operat-
ing procedures applicable to the several areas in a State (including, 
where appropriate, common data processing operations serving several 
or all areas) to assure efficient operation ana objective evaluation of 
comparative performance of the several areas and, (2) to assist the 
Secretary in evaluating the performance of each Professional Stand-
ards Review Organization, and (3) where the Secretary finds it neces-
sary to replace a Professional Standards Review Organization, to 
assist him in developing and arranging for a qualified replacement 
Professional Standards Review Organization. 
"(d) The Secretary is authorized to enter into an agreement with 
any such Council under which the Secretary shall make payments to 
such Council equal to the amount of expenses reasonably and neces-
sarily incurred, as determined by the Secretary, by such Council in 
carrying out the duties and functions provided m this section. 
"(e) (1) The Statewide Professional Standards Review Council for 
any State (or in a State which does not have such Council, the Profes-
sional Standards Review Organizations in such State which have 
agreements with the Secretary) shall be advised and assisted in carry-
ing out its functions by an advisory group (of not less than seven nor 
more than eleven members) which shall be made up of representatives 
of health care practitioners (other than physicians) and hospitals and 
other health care facilities which provide within the State health care 
services for which payment (in whole or in part) may be made under 
any program established by or pursuant to this Act. 
"(2) The Secretary shall by regulations provide the manner in 
which members of such advisory group shall be selected by the State-
wide Professional Standards Review Council (or Professional Stand-
ards Review Organizations in States without such Councils). 
"(3) The expenses reasonably and necessarily incurred, as deter-
mined by the Secretary, by such group in carrying out it duties and 
functions under this subsection shall be considered to be expenses neces-
sarily incurred by the Statewide Professional Standards Review 
Council served by such group. 
Payments. 
Member selec-
tion, regulations. 
Expenses. 
"NATIONAL PROFESSIONAL STANDARDS REVIEW COUNCIL 
"SEC. 1163. (a) (1) There shall be established a National Profes-
sional Standards Review Council (hereinafter in this section referred 
to as the 'Council') which shall consist of eleven physicians, not other-
wise in the employ of the United States, appointed by the Secretary 
without regard to the provisions of title 5, United States Code, govern-
ing appointments in the competitive service. 
"(2) Members of the Council shall be appointed for a term of three 
years and shall be eligible for reappointment. 
"(3) The Secretarjr shall from time to time designate one of the 
members of the Council to serve as Chairman thereof. 
"(b) Members of the Council shall consist of physicians of recog-
nized standing and distinction in the appraisal of medical practice. 
A majority of such members shall be physicians who have been recom-
mended by the Secretary to serve on the Council by national orga-
nizations recognized by the Secretary as representing practicing 
physicians. The rtiembership of the Council shall include physicians 
who have been recommended for membership on the Council by 
consumer groups and other health care interests. 
"(c) The Council is authorized to utilize, and the Secretary shall 
make available, or arrange for, such technical and professional consul-
tative assistance as may be required to carry out its functions, and the 
Establishment; 
membership. 
5 u s e 101 et 
seq. 
Term of member-
ship. 
Qualifications. 
Consultants. 
5 use 5332 
note. 
1442 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Secretary shall, in addition, make available to the Council such secre-
tarial, clerical and other assistance and such pertinent data prepared 
by, for, or otherwise available to, the Department of Health, Educa-
tion, and Welfare as the Council may require to carry out its 
functions. 
Compensation. 
«((j) Membcrs of the Council, while serving on business of the 
Council, shall be entitled to receive compensation at a rate fixed by 
the Secretary (but not in excess of the daily rate paid under GS-18 
of the General Schedule under section 5332 of title 5, United States 
Code), including traveltime; and while so serving away from their 
homes or regular places of business, they may be allowed travel 
expenses, including per diem in lieu of subsistence, as authorized by 
section 5703 of title 5, United States Code, for persons in Government 
service employed intermittently. 
Duties. 
"(e) It shall be the duty of the Council to— 
" (1) advise the Secretary in the administration of this part; 
"(2) provide for the development and distribution, among 
Statewide Professional Standards Review Councils and Pro-
fessional Standards Review Organizations of information and 
data which will assist such review councils and organizations in 
carrying out their duties and functions; 
"(3) review the operations of Statewide Professional Stand-
ards Review Councils and Professional Standards Review Orga-
nizations with a view to determining the effectiveness and 
comparative performance of such review councils and organiza-
tions in carrying out the purposes of this part; and 
"(4) make or arrange for the making of studies and investiga-
tions with a view to developing and recommending to the Secre-
tary and to the Congress measures designed more effectively to 
accomplish the purposes and objectives of this nart. 
tafy^and Congress. 
"(*) ^he National Professional Standards Review Council shall 
from time to time, but not less often than annually, submit to the 
Secretary and to the Congress a report on its activities and shall 
include in such report the findings of its studies and investigations 
together with any recommendations it may have with respect to the 
more effective accomplishment of the purposes and objectives of this 
part. Such report shall also contain comparative data indicating the 
results of review activities, conducted pursuant to this part, in each 
State and in each of the various areas thereof. 
"APPLICATION or 
THIS PART TO CERTAIN STATE PROGRAMS RECEIVING 
FEDERAL FINANCIAL ASSISTANCE 
"SEC. 1164. (a) In addition to the requirements imposed by law as a 
condition of approval of a State plan approved under any title of this 
Act under which health care services are paid for in whole or part, 
with Federal funds, there is hereby imposed the requirement that pro-
visions of this part shall apply to the operation of such plan or 
program. 
"(b) The requirement imposed by subsection (a) with respect to 
such State plans approved under this Act shall apply— 
"(1) in the case of any such plan where legislative action by 
the State legislature is not necessary to meet such requirement, on 
and after January 1,1974; and 
"(2) in the case of any such plan where legislative action by 
the State legislature is necessary to meet such requirement, which-
ever of the following is earlier— 
"(A) on and after July 1,1974, or 
86 STAT. ] 
PUBLIC LA\V 92-603-OCT. 30, 1972 
1443 
"(B) on and after the first day of the calendar month 
which first commences more than ninety days after the close 
of the first regular session of the legislature of such State 
which begins after December 31,1973. 
'"CORRELATIOX OP FUNCTIOXS BETWEEN PROFESSIONAL STANDARDS REVIEW 
ORGANIZATIONS AND ADMINISTRATIVE INSTRUMENTALITIES 
"SEC. 1165. The Secretary shall by regulations provide for such cor-
relation of activities, such interchange of data and information, and 
such other cooperation consistent with economical, efficient, coordi-
nated, and comprehensive implementation of this part (including, 
but not limited to^ usage of existing mechanical and other data-gath-
ering capacity) between and among— 
"(a) (1) agencies and organizations which are parties to agree-
ments entered into pursuant to section 1816, (2) carriers which 
J^ ^tat^ 29j^^ 
are parties to contracts entered into pursuant to section 1842, 
42 use i395u! 
and (3) any other public or private agency (other than a Profes-
sional Standards Review Organization) having review or con-
trol functions, or proved relevant data-gathering procedures and 
experience, and 
"(b) Professional Standards Review Organizations, as may 
be necessary or appropriate for the effective administration of 
title XVIII, or State plans approved under this Act. 
42 use 1395. 
li PROHIBITION AGAINST DISCLOSURE OF INFORMATION 
"SEC. 1166. (a) Any data or information acquired by any Profes-
sional Standards Review Organization, in the exercise of its duties 
and functions, shall be held in confidence and shall not be disclosed 
to any person except (1) to the extent that may be necessary to carry 
out the purposes ot this part or (2) in such cases and under such cir-
cumstances as the Secretary shall by regulations provide to assure 
adequate protection of the rights and interests of patients, health 
care practitioners, or providers of health care. 
"(b) It shall be unlawful for any person to disclose any such infor- 
Penalty. 
mation other than for such purposes, and any person violating the 
provisions of this section shall, upon conviction, be fined not more 
than $1,000, and imprisoned for not more than six months, or both, 
together with the costs of prosecution. 
" L I M I T A T I O N O N LIABILITY FOR PERSONS PROVIDING INFORMATION, AND 
FOR M E M B E R S AND EMPLOYEES OF PROFESSIONAL STANDARDS REVIEW OR-
GANIZATIONS, AND FOR HEALTH CARE PRACTITIONERS AND PROVIDERS 
"SEC. 1167. (a) Notwithstanding any other provision of law, no 
pei-son providing information to any Professional Standards Review 
Organization shall be held, by reason of having provided such informa-
tion, to have violated any criminal law, or to be civilly liable under 
any law, of the United States or of any State (or political subdivision 
thereof^ unless— 
"(1) such information is unrelated to the performance of the 
duties and functions of such Organization, or 
"(2) such information is false and the person providing such 
information knew, or had reason to believe, that such information 
was false. 
"(b) (1) No individual who, as a member or employee of any Pro-
fessional Standards Review Organization or who furnishes profes-
1444 
PUBLIC LAW 92-^03-OCT. 30, 1972 
[86 STAT. 
sional counsel or services to such organization, shall be held by reason 
of the performance by him of any duty, function, or activity authorized 
or required of Professional Standards Review Organizations under 
this part, to have violated any criminal law, or to be civilly liable 
imder any law, of the United States or of any State (or political sub-
division thereof) provided he has exercised due care. 
"(2) The provisions of paragraph (1) shall not apply with respect 
to any action taken by any individual if such individual, in taking 
such action, was motivated by malice toward any person affected by 
such action. 
"(c) No doctor of medicine or osteopathy and no provider (includ-
ing directors, trustees, employees, or officials thereof) of health care 
services shall be civilly liable to any person under any law of the 
United States or of any State (or political subdivision thereof) on 
account of any action taken by him in compliance with or reliance 
upon professionally developed noi-ms of care and treatment applied 
by a Professional Standards Review Organization (which has been 
Ante, p. 1430. 
designated in accordance with section 1152(b) (1) (A)) operating in 
the area where such doctor of medicine or osteopathy or provider took 
such action but only if— 
"(1) he takes such action (in the case of a health care practi-
tioner) in the exercise of his profession as a doctor of medicine 
or osteopathy (or in the case of a provider of health care services) 
in the exercise of his functions as a provider of health care serv-
ices, and 
"(2) he exercised due care in all professional conduct taken or 
directed by him and reasonably related to, and resulting from, 
the actions taken in compliance with or reliance upon such pro-
fessionally accepted norms of care and treatment. 
"AUTHORIZATION FOR USE or CERTAIN FUNDS TO ADMINISTER THE 
PROVISIONS OF T H I S PART 
"SEC. 1168. Expenses incurred in the administration of this part 
shall be payable from— 
"(a) funds in the Federal Hospital Insurance Trust Furid; 
"(b) funds in the Federal Supplementary Medical Insurance 
Trust Fund; and 
"(c) funds appropriated to carry out the health care provisions 
of the several titles of this Act; 
in such amounts from each of the sources of funds (referred to in sub-
sections (a), (b), and (c)) as the Secretary shall deem to be fair and 
equitable after taking into consideration the costs attributable to the 
administration of this part with respect to each of such plans and 
programs. 
"TECHNICAL ASSISTANCE TO ORGANIZATIONS DESIRING TO BE DESIGNATED 
AS PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS 
"SEC. 1169. The Secretary is authorized to provide all necessary 
technical and other assistance (including the preparation of prototype 
plans of organization and operation) to organizations described in sec-
tion 1152(b) (1) which— 
"(a) express a desire to be designated as a Professional Stand-
ards Review Organization; and 
"(b) the Secretary determines have a potential for meeting the 
requirements of a Professional Standards Review Organization; 
86 STAT. ] 
PUBLIC LAW 92-603--OCT. 30, 1972 
1445 
to assist such organizations in developing a proper plan to be sub-
mitted to the Secretary and otherwise in preparing to meet the require-
ments of this pait for designation as a Professional Standards Eeview 
Organization. 
a EXEMPTIOXS OP CHRISTIAN SCIEXCE SANATORHJMS 
"SEC. 1170. The provisions of this part shall not apply with respect 
to a Christian Science sanatorium operated, or listed and certified, by 
the First Church of Christ, Scientist, Boston, Massachusetts." 
PHYSICAL THERAPY SERVICES AND OTHER THERAPY SERVICES UNDER 
MEDICARE 
SEC. 251. (a)(1) Section 1861 (p) of the Social Security Act is 
amended by adding at the end thereof (after and below paragraph 
si stat. sso. 
(4) (B)) the following new sentence: "The term 'outpatient physical 
'*^ ^^^ ^^^^^ 
therapy services' also includes physical therapy services furnished an 
individual by a physical therapist (in his office or in such individual's 
home) who meets licensing and other standards prescribed by the 
Secretary in regulations, otherwise than under an arrangement with 
and under the supervision of a provider of services, clinic, rehabilita-
tion agency, or public health agency, if the furnishing of such services 
meets such conditions relating to health and safety as the Secretary 
may find necessary." 
(2) Section 1833 of such Act is amended, by adding at the end 
^^te, p. 1424 
thereof the following new subsection: 
"(g) In the case of services described in the next to last sentence 
of section 1861 (p), with respect to expenses incurred in any calendar 
year, no more than $100 shall be considered as incurred expenses for 
purposes of subsections (a) and (b)." 
(3) Section 1833(a) (2) of such Act (as amended by section 233(b) 
of this Act) is further amended by striking out the period at the end 
of subparagraph (B) and insertmg in lieu thereof "; or", and by 
adding after subparagraph (B) the following new subparagraph: 
"(C) if such services are services to which the next to last 
sentence of section 1861 (p) applies, the reasonable charges 
for such services." 
(4) Section 1832(a)(2)(C) of such Act is amended by striking 
out "services." and inserting in lieu thereof "services, other than 
services to which the next to last sentence of section 1861 (p) applies." 
(b)(1) Section 1861 (p) of such Act (as amended by subsection 
(a) (1) of this section) is further amended by adding at the end 
thereof the following new sentence: "In addition, such term includes 
physical therapy services which meet the requirements of the first 
sentence of this subsection except that they are furnished to an individ-
ual as an inpatient of a hospital or extended care facility." 
(2) Section 1835(a)(2)(C) of such Act is amended by striking 
si stat. ssi. 
out "on an outpatient basis". 
42 use i395r 
(c) Section 1861 (v) of such Act (as amended by sections 221 (c) (4) 
and 223(f) of this Act) is further amended by redesignating para- 
^"'®» P- 1394 
f
raphs (5) and (6) as paragraphs (6) and (7), respectively, and 
y inserting after paragraph (4) the following new paragraph: 
"(5) (A) Where physical therapy services, occupational therapy 
services, speech therapy services, or other therapy services or services 
of other health-related personnel (other than physicians) are fur-
nished under an arrangement with a provider of services or other 
organization, specified in the first sentence of section 1861 (p) the 
Ante, p. 1411. 
81 Stat. 851. 
42 u s e 139Sk:. 
1446 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT;' 
81 Stat. 850. 
42 u s e 1395x. 
Effective date. 
amount included in any payment to such provider or other organiza-
tion under this title as the reasonable cost of such services (as furnished 
under such arrangements) shall not exceed an amount equal to the 
salary which would reasonably have been paid for such services 
(together with any additional costs that would have been incurred 
by the provider or other organization) to the person performing them 
if they had been performed in an employment relationship witn such 
provider or other organization (rather than under such arrangement) 
plus the cost of such other expenses (including a reasonable allow-
ance for traveltime and other reasonable types of expense related to 
any differences in acceptable methods of organization for the provi-
sion of such therapy) incurred by such person, as the Secretary may 
in regulations determine to be appropriate. 
"(B) Notwithstanding the provisions of subparagraph (A), if a 
provider of services or other organization specified in the first sen-
tence of section 1861 (p) requires the services of a therapist on a 
limited part-time basis, or only to perform intermittent services, the 
Secretary may make payment on the basis of a reasonable rate per 
unit of service, even though such rate is greater per unit of time than 
salary related amounts, where he finds that such greater payment is, 
in the aggregate, less than the amount that would have been paid if 
such organization had employed a therapist on a full- or part-time 
salary basis." 
(d) (1) The amendments made by subsection (a) shall apply with 
respect to services furnished on or after July 1,1973. 
(2) The amendments made by subsection (b) shall apply with respect 
to services furnished on or after the date of enactment of this Act. 
(3) The amendments made by subsection (c) shall be effective with 
respect to accounting periods beginning after December 31, 1972. 
79 Stat. 3 U . 
42 u s e 1395x. 
Effective date. 
Ante, pp. 1415, 
1417. 
Effective date. 
COVERAGE OF SUPPLIES RELATED TO COLOSTOMIES 
SEC. 252. (a) Section 1861 (s) (8) of the Social Security Act is 
amended by inserting after "organ" the following: "(including 
colostomy bags and supplies directly related to colostomy care)". 
(b) The amendment made by subsection (a) shall apply only with 
respect to items furnished on or after the date of the enactment of this 
Act. 
C O V E R A G E P R I O R TO APPLICATION FOR MEDICAL ASSISTANCE 
SEC. 255. (a) Section 1902(a) of the Social Securitjr Act (as 
amended by sections 236(b) and 239(b) of this Act) is furither 
amended— 
(1) by striking out "and" at the end of paragraph (32); 
(2) by striking out the period at the end of paragraph (33) 
and inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (33) the following new para-
graph: 
"(34) provide that in the case of any individual who has been 
determined to be eligible for medical assistance under the plan, 
such assistance will \^ made available to him for care and services 
included under the plan and furnished in or after the third month 
before the month in which he made application for such assist-
ance if such individual was (or upon application would have 
been) eligible for such assistance at the time such care and serv-
ices were furnished." 
(b) The amendments made by subsection (a) shall be effective 
July 1, 1973. 
, 
,, 
, 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1447 
HOSPITAL ADMISSIONS FOR DENTAL SERVICES UNDER MEDICARE 
SEC. 256. (a) Section 1814(a)(2) of the Social Security Act is 
amended by striking out "or" at the end of subparagraph (C), by 
adding "or" after the semicolon at the end of the subparagraph (D), 
and by inserting after subparagraph (D) the following new subpara-
graph : 
"(E) in the case of inpatient hospital services in connec-
tion with a dental procedure, the individual suffers from 
impairments of such severity as to require hospitalization;". 
(b) Section 1861 (r) of such Act is amended by inserting after "or 
any facial bone," the following: "or (C) the certification required by 
section 1814(a) (2) (E) of this Act,". 
(c) Section 1862(a) (12) of such Act is amended by inserting before 
the semicolon the following: ", except that payment may be made 
under part A in the case of inpatient hospital services in connection 
with a dental procedure where the individual suffers from impair-
ments of such severity as to require hospitalization". 
(d) The amendments made by this section shall apply with respect 
to admissions occurring after the second month following the month 
in which this Act is enacted. 
Ante, p. 1413. 
79 Stat. 321. 
42 u s e 139Sx. 
42 u s e 1395y. 
Effective date. 
EXTENSION 
OF GRACE 
PERIOD 
FOR 
TERMINATION 
OF 
SUPPLEMENTARY 
MEDICAL INSURANCE COVERAGE WHERE FAILURE TO PAY PREMIUMS IS 
DUE TO GOOD CAUSE 
SEC. 257. (a) Section 1838(b) of the Social Security Act is amended 
by striking out " (not in excess of 90 days)" in the third sentence, and 
by adding at the end thereof the following new sentence: "The grace 
period determined under the preceding sentence shall not exceed 90 
days; except that it may be extended to not to exceed 180 days in any 
case where the Secretary determines that there was good cause for 
failure to pay the overdue premiums within such 90-day period." 
(b) The amendments made by subsection (a) shall apply with 
respect to nonpayment of premiums which become due and payable on 
or after the date of the enactment of this Act or which became payable 
within the 90-day period immediately preceding such date; and for 
purposes of such amendments any premium which became due and 
payable within such 90-day period shall be considered a premium 
becoming due and payable on the date of the enactment of this Act. 
Ante, p. 1378. 
Effective date. 
EXTENSION OF TIME FOR FILING CLAIM FOR SUPPLEMENTARY 
MEDICAL 
INSURANCE BENEFITS WHERE DELAY IS DUE TO ADMINISTRATIVE ERROR 
SEC. 258. (a) Section 1842(b)(3) of the Social Securitv Act (as 
amended by section 224(a) of this Act) is further amended by adding 
at the end thereof the following new sentence: "The requirement in 
subparagraph (B) that a bill be submitted or request for payment be 
made by the close of the following calendar year shall not apply if 
(i) failure to submit the bill or request the payment by the close of 
such year is due to the error or misrepresentation of an officer, 
employee, fiscal intermediary, carrier, or agent of the Department of 
Health, Education, and Welfare performing functions under this title 
and acting within the scope of his or its authority, and (ii) the bill is 
submitted or the payment is requested promptly after such error or 
misrepresentation is eliminated or corrected." 
(b) The amendment made by subsection (a) shall apply with 
respect to bills submitted and requests for payment made after March 
1968. 
Ante, p. 1395. 
Effective date. 
82-081 O - 73 - 94 
1448 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, p. 1378, 
Ante, 
p. 1374. 
Effective date. 
WAIVER 
OF ENROLLMENT 
PERIOD REQUIREMENTS 
WHERE 
INDIVIDUAL'S 
RIGHTS WERE PREJUDICED BY ADMINISTRATIVE ERROR OR INACTION 
SEC. 259. (a) Section 1837 of the Social Securitjr Act (after the new 
subsections added by section 206(a) of this Act) is amended by add-
ing at the end thereof the following new subsection: 
"(h) In any case where the Secretary finds that an individual's 
enrollment or nonenroUment in the insurance program established by 
this part or part A pursuant to section 1818 is unintentional, inad-
vertent, or erroneous and is the result of the error, misrepresentation, 
or inaction of an officer, employee, or agent of the Federal Govern-
ment, or its instrumentalities, the Secretary may take such action 
(including the designation for such individual of a special initial or 
subsequent enrollment period, with a coverage period determined on 
the basis thereof and with appropriate adjustments of premiums) as 
may be necessary to correct or eliminate the effects of such error, mis-
representation, or inaction." 
(b) The amendment made by subsection (a) shall be effective as 
of July 1, 1966. 
42 u s e 1395p. 
ELIMINATION OF PROVISIONS PREVENTING ENROLLMENT I N 
SUPPLEMEN-
TARY MEDICAL INSURANCE PROGRAM MORE T H A N THREE YEARS AFTER 
FIRST 
OPPORTUNITY 
SEC. 260. Section 1837(b) of the Social Security Act is amended to 
read as follows: 
"(b) No individual may enroll under this part more than twice." 
WAIVER OF R E C O V E R Y OF INCORRECT PAYMENTS FROM SURVIVOR W H O IS 
WITHOUT FAULT UNDER MEDICARE 
42 use i395gg. 
SEC. 261. (a) Section 1870(c) of the Social Security Act is amended 
by striking out "and where" and inserting in lieu thereof the follow-
ing : "or where the adjustment (or recovery) would be made by decreas-
ing payments to which another person wno is without fault is entitled 
as provided in subsection (b) (4), if". 
(b) The amendment made by subsection (a) shall apply with re-
spect to waiver actions considered after the date of the enactment of 
this Act. 
Effective date. 
42 u s e 139Su. 
Effective date. 
REQUIREMENT OF M I N I M U M AMOUNT OF CLAIM TO ESTABLISH ENTITLE-
M E N T 
TO 
HEARING 
UNDER 
SUPPLEMENTARY 
MEDICAL 
INSURANCE 
PROGRAM 
SEC. 262. (a) Section 1842(b) (3) (C) of the Social Security Act is 
amended by inserting after "a fair hearing by the carrier" the follow-
ing : ", in any case where the amount in controversy is $100 or more,". 
(b) The amendment made by subsection (a) shall apply with respect 
to hearings requested (under the procedures established under section 
1842(b)(3)(C) of the Social Security Act) after the date of the 
enactment of this Act. 
42 u s e 1395s. 
COLLECTION OF SUPPLEMENTARY MEDICAL INSURANCE PREMIUMS 
FROM 
INDIVIDUALS ENTITLED TO BOTH SOCIAL SECURITY AND RAILROAD RETIRE-
M E N T 
BENEFITS 
SEC. 263. (a) Section 1840(a)(1) of the Social Security Act is 
amended by striking out "subsection (d)" and inserting in lieu 
thereof "subsections (b)(1) and (c)". 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1449 
(b) Section 1840(b)(1) of such Act is amended by inserting 
"(Avhetlier or not such individual is also entitled for such month to a 
monthly insurance benefit under section 202)" after "1937", and by 
striking out "subsection (d)" and inserting in lieu thereof "sub-
section (c)". 
(c) Section 1840 of such Act is further amended by striking out 
subsection (c), and by redesignating subsections (d) through (i) as 
subsections (c) through (h), respectively. 
(d) (1) Section 1840(e) of such Act (as so redesignated) is amended 
by striking out "subsection (d)" and inserting in lieu thereof "sub-
section (c)". 
(2) Section 1840(f) of such Act Cas so redesignated) is amended 
by striking out "subsection (d) or (f)" and inserting in lieu thereof 
"subsection (c) or (e)". 
(3) Section 1840(h) of such Act (as so redesignated) is amended by 
striking out "(c), (d), and (e)" and inserting in lieu thereof "(c), 
and(d)". 
(4) Section 1841(h) of such Act is amended by striking out 
"1840(e)" and inserting in lieu thereof "1840(d)". 
(5) Section 1842 of such Act is amended by adding at the end 
thereof the following new subsection: 
"(g) The Railroad Retirement Board shall, in accordance with such 
regulations as the Secretary may prescribe, contract with a carrier 
or carriers to perform the functions set out in this section with respect 
to individuals entitled to benefits as qualified railroad retirement ben-
eficiaries pursuant to section 226(a) of this Act and section 21(b) of 
the Railroad Retirement Act of 1937." 
(e) Section 1841 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(i) The Managing Trustee shall pay from time to time from the 
Trust Fund such amounts as the Secretary of Health, Education, and 
Welfare certifies are necessary to pay the costs incurred by the Rail-
road Retirement Board for services performed pursuant to section 
1840(b) (1) and section 1842(g). During each fiscal year or after the 
close of such fiscal year, the Railroad Retirement Board shall certify 
to the Secretary the amount of the costs it incurred in performing such 
services and such certified amount shall be the basis for the amount of 
such costs certified by the Secretary to the Managing Trustee." 
(f) The amendments made by this section with respect to collection 
of premiums shall apply to premiums becoming due and payable 
after the fourth month following the month in which this Act is 
enacted. 
42 u s e 139SS. 
42 u s e 1395t. 
42 u s e 1395u. 
Ante, p. 1371. 
79 Stat. 340. 
45 u s e 2288-2. 
42 u s e 1395t. 
Effective date. 
PROSTHETIC LENSES FURNISHED BY OPTOMETRISTS UNDER SUPPLEMENTARY 
MEDICAL INSURANCE PROGRAM 
SEC. 264. (a) Section 1861 (r) of the Social Security Act (as 
amended by sections 211(c)(2) and 256(b) of this Act) is further 
amended (1) by striking out "or (3)" and inserting in lieu thereof 
"(3)", and (2) by inserting before the period at the end thereof the 
following: ", or (4) a doctor of optometry who is legally authorized 
to practice optometry by the State in which he performs such function, 
but only with respect to establishing the necessity for prosthetic 
lenses". 
(b) The amendment made by subsection (a) shall apply only with 
respect to services performed on or after the date of the enactment of 
this Act. 
Ante, pp. 1384, 
1447. 
Effective date. 
1450 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
PROVISION OF MEDICAL SOCLVL SERVICES NOT MANDATORY FOR EXTENDED 
CARE FACILITIES 
SEC. 265. Section 1861 (j) (11) of the Social Security Act (as redesig-
Ante. pp. 1412, nated by section 234(d) of this Act) is amended by inserting before 
^'*^'*' 
the semicolon at the end thereof the following: ", except that the 
Secretary shall not require as a condition of participation that medical 
social services be furnished in any such institution". 
REFUND o p EXCESS PREMIUMS UNDER MEDICARE 
42 use i39sgg. 
SEC. 266. Section 1870 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(g) If an individual, who is enrolled under section 1818(c) of the 
Ante, p. 1374. 
Social Securitv Act or under section 1837, dies, and premiums with 
42 use i395p. 
respect; tx) sucli enrollment have been received with respect to such 
individual for any month after the month of his death, such premiums 
shall be refunded to the person or persons determined by the Secretary 
under regulations to have paid such premiums or if payment for such 
premiums was made by the deceased individual before his death, to 
the legal representative of the estate of such deceased individual, if any. 
If there is no person who meets the requirements of the preceding 
sentence such premiums shall be refunded to the person or persons 
in the priorities specified in paragraphs (2) through (7) of subsec-
tion (e)." 
WAIVER OF REGISTERED NURSE REQUIREMENT I N SKILLED NURSING 
FACILITIES I N RURAL AREAS 
1424 
SEC. 267. Section 1861 (j) of the Social Security Act, as amended by 
Ante, pp. 1412, sectious 234(d) and 246(b) of this Act, is further amended by adding 
at the end thereof the following new sentence: "To the extent that 
paragraph (6) of this subsection may be deemed to require that any 
skilled nursing facility engage the services of a registered professional 
nurse for more than 40 hours a week, the Secretary is authorized to 
Avaive such requirement if he finds that— 
"(A) such facility is located in a rural area and the supply of 
skilled nursing facility services in such area is not sufficient to 
meet the needs of individuals residing therein, 
"(B) such facility has one full-time registered professional 
nurse who is regularly on duty at such facilitv 40 hours a week, 
and 
"(C) such facility (i) has only patients whose physicians have 
indicated (through physicians' orders or admission notes) that 
each such patient does not require the services of a registered 
nurse or a physician for a 48-hour period, or (ii) has made 
arrangements for a registered professional nurse or a physician 
to spend such time at such facility as may be indicated as neces-
sary by the physician to provide necessary skilled nursing services 
on days when the regular full-time registered professional nurse 
is not on duty." 
EXEMPTION OF CHRISTIAN SCIENCE SANATORIUMS FROM CERTAIN NURSING 
HOME REQUIREMENTS UNDER MEDICAID 
42 use 1396a. 
gfic. 268. (a) Scctiou 1902(a) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "For pur-
poses of paragraphs (9) (A), (29), (31), and (33), and of section 
Ante, p. 1415. 
1903 (1) (4), the terms 'skilled nursing home' and 'nursing home' do not 
86 STAT. ] 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
1451 
include a Christian Science sanatorium operated, or listed and certified, 
by the First Church of Christ, Scientist, Boston, Massachusetts." 
(b) Section 1908(g) (1) of such Act is amended by inserting after 
"Secretary'- the following: ", but does not include a Christian Science 
sanatorium operated, or listed and certified, by the First Church of 
Christ, Scientist,. 
Boston, Massachusetts". 
(c) The amendments made by this section shall be effective on the 
date of the enactment of this Act. 
81 Stat. 908. 
42 u s e 1396g. 
Effective date. 
HEQUIREMENTS FOR NURSING HOME ADMINISTRATORS 
SEC. 269. Section 1908(d) of the Social Security Act is amended by 
striking out "No State" and inserting in lieu thereof the following: 
"No State shall be considered to have failed to comply with the pro-
visions of section 1902(a) (29) because the agency or board of such 
State (established pursuant to subsection (b)) shall have granted any 
waiver, with respect to any individual who, during all of the three 
calendar years immediately preceding the calendar year in which the 
requirements prescribed in section 1902(a) (29) are first met by the 
State, has served as a nursing home administrator, of any of the stand-
ards developed, imposed, and enforced by such agency or board pursu-
ant to subsection (c). No State". 
42 u s e 1396a. 
INCREASE I N LIMITATION ON PAYMENTS TO PUERTO RICO AND THE 
VIRGIN ISLANDS FOR MEDICAL ASSISTANCE 
SEC. 271. (a) Section 1108(c)(1) of the Social Security Act is 
amended by striking out "$20,000,000" and inserting in lieu thereof 
"$30,000,000". 
(b) Section 1108(c)(2) of such Act is amended by striking out 
"$650,000" and inserting in lieu thereof "$1,000,000". 
(c) The amendments made by subsections (a) and (b) shall apply 
with respect to fiscal years beginning after June 30,1971. 
MEDICAL ASSISTANCE I N PUERTO RICO, THE VIRGIN ISLANDS, AND GUAM 
SEC. 271A. (a) Section 227(b) of the Social Security Amendments 
of 1967 is amended by striking out "June 30, 1972" and inserting in 
lieu thereof "June 30,1975". 
(b) The amendment made by subsection (a) shall be effective from 
and after July 1,1972. 
42 u s e 1308. 
Effective date. 
81 Stat. 903. 
42 u s e 1396a 
note. 
Effective date. 
EXTENSION OF TITLE V TO AMERICAN SAMOA AND THE TRUST TERRITORY 
OF THE PACIFIC ISLANDS 
SEC 272. (a) Section 1101(a)(1) of the Social Security Act is 
amended by adding at the end thereof the following,new sentence: 
"Such term when used in title V also includes American Samoa and 
the Trust Territory of the Pacific Islands." 
(b) Section 1108(d) of such Act is amended by inserting, after 
"allot such smaller amount to Guam", the following: ", American 
Samoa, and the Trust Temtory of the Pacific Islands". 
(c) The amendments made by this section shall apply with respect 
to fiscal years beginning after June 30,1971. 
INCLUSION OF CHIROPRACTOR SERVICES UNDER MEDICARE 
SEC. 273. (a) Section 1861 (r) of the Social Securitjr Act (as 
amended by sections 256(b) and 264(a) of this Act) is further 
amended by— 
42 u s e 1301. 
42 u s e 1308. 
Effective date. 
Ante, p. 1449. 
1452 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 139Sx. 
Effective date. 
(1) striking out "or (4)" and inserting in lieu thereof "(4)", 
and 
(2) inserting before the period at the end thereof the following 
", or (5) a chiropractor who is licensed as such by the State (or 
in a State which does not license chiropractors as such, is legally 
authorized to perform the services of a chiropractor in the juris-
diction in which he performs such services), -and who meets 
uniform minimum standards promulgated by the Secretary, but 
only for the purpose of sections 1861(s) (1) and 1861 (s) (2) (A) 
and only with respect to treatment by means of manual manipula-
tion of the spine (to correct a subluxation demonstrated by X-ray 
to exist) which he is legally authorized to perform by the State 
or jurisdiction in Avhich such treatment is provided". 
(b) The amendments made by this section shall be effective with 
respect to services furnished after June 30,1973. 
42 u s e 1396a. 
42 u s e 1396gs. 
MISCELLANEOUS TECHNICAL AND CLERICAL AMENDMENTS 
SEC. 274. (a) Clause (A) of section 1902(a) (26) of the Social 
Security Act is amended by striking out "evaluation" and inserting in 
lieu thereof "evaluation)", and by striking out "care)" and inserting 
in lieu thereof "care". 
(b) Section 1908(d) of such Act is amended by striking out "sub-
section (b) (1)" and inserting in lieu thereof "subsection (c) (1)". 
Effective date. 
CHIROPRACTORS' SEflRVICES UNDER MEDICAID 
SEC. 275. (a) Section 1905 of the Social Security Act is amended by 
adding after subsection (f), as added by section 247 of this Act, the 
following new subsection: 
" (g) If the State plan includes provision of chiropractors' services, 
such services include only— 
"(1) services provided by a chiropractor (A) who is licensed 
as such by the State and (B) who meets uniform minimum stand-
ards promulgated by the Secretary under section 1861 (r) (5); 
and 
"(2) services which consist of treatment by means of manual 
manipulation of the spine which the chiropractor is legally 
authorized to perform by the State." 
(b) The amendment made by this section shall be effective with 
respect to services furnished after June 30, 1973. 
Effective date. 
SERVICES OF FODIATRIC INTERNS AND RESIDENTS UNDER PART A 
OF MEDICARE 
SEC 276. (a) Section 1861(b)(6), as added by section 227(a) of 
this Act, is amended by deleting "; or" and inserting in lieu thereof 
the following: ", or in the case of services in a hospital or osteopathic 
hospital by an intern or resident-in-training in the field of podiatry, 
approved by the Council on Podiatry Education of the American 
Podiatry Association; or". 
(b) The amendment made by this section shall apply with respect to 
accounting periods beginning after December 31,1972. 
42 u s e 1395aa. 
USE OP CONSULTANTS FOR EXTENDED CARE FACILITIES 
SEC. 277. Section 1864(a) of the Social Security Act is amended by 
adding at the end the following new sentence: "Any State agency 
which has such an agreement may (subject to approval of the Seci-e-
42 u s e 1395x. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1453 
tary) furnish to an extended care facility, after proper request by such 
facility, such specialized consultative services (which such agency is 
able and willing to furnish in a manner satisfactory to the Secretary) 
as such f 
aciLty may need to meet one or more of the conditions specified 
in section 1861 (j). Any such services furnished by a State agency 
42 use ISQSX. 
shall be deemed to have been furnished pursuant to such agreement." 
DESIGNATION OF EXTENDED CARE FACILITIES AND SKILLED NURSING HOMES 
AS SKILLED NURSING FACILITIES 
SEC. 278. (a) The following sections of the Social Security Act are 
amended by striking out "extended care facility", "extended care 
facilities", "'skilled nursing home", and "skilled nursing homes" each 
time they appear therein and inserting in lieu thereof "skilled nurs-
ing facility" or "skilled nursing facilities", as the case may be, and 
by changing "an" to "a" as appropriate: 
(1) section 1814(a) (2) (C); 
Ante. p. 1425. 
(2) section 1814(a) (6); 
42 use i395f. 
(3) section 1814(a) (7): 
(4) section 1861(a) (2); 
(5) section 1861(h); 
(6) section 1861 (i); 
(7) section 1861 (j); 
(8) section 1861 (k); 
(9) section 1861(1); 
(10) section 1861 (m) (7); 
(11) section 1861 (n); 
(12) section 1861 (u); 
(13) section 1861 (v) (3); 
(14) section 1861 (w); 
(15) section 1861 (y); 
(16) section 1864(a); 
(17) section 1866; 
(18) section 1902(a) (13); 
(19) section 1902(a) (26); 
(20) section 1902(a) (28); 
(21) section 1905(a) (4); 
(22) section 1905(a) (5); 
(23) section 1905(a) (14); and 
(24) section 1121. 
(b) The following sections of the Social Security Act, as amended 
or added by the provisions of this Act, are further amended by strik-
ing out the terms "extended care facility", "extended care facilities", 
"skilled nursing home", and "skilled nursing homes" each time they 
appear therein and inserting in lieu thereof "skilled nursing facility" 
or "skilled nursing facilities", as the case may be, and by changing 
"an" to "a" as appropriate: 
(1) section 1903 (g) and (h) of the Social Security Act as 
added by section 207 of this Act; 
(2) section 402(a) (1) (E) of the Social Security Amendments 
of 1967 as amended by section 222 of this Act; 
(3) section 1876 of the Social Security Act as added by section 
226(a) of this Act; 
(4) section 1814(h) of such Act as added by section 228(a) of 
this Act; 
(5) section 1903(h) of such Act as added by section 207(a) (1) 
of this Act; 
(6) section 1861 (z) of such Act as added by section 234(f) of 
this Act; 
42 u s e 
42 u s e 
42 u s e 
Ante, p 
42 use 
Ante, p. 
42 u s e 
1395aa 
139SCC 
1396a. 
1424. 
1396d, 
1459. 
1320a. 
1454 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
. (7) section 1903(i) (4) of such Act as added by section 237(a) 
of this Act; 
(8) section 1877(c) of such Act as added by section 242(b) of 
this Act; 
(9) section 1909(c) of such Act as added by section 242(c) of 
this Act; 
(10) section 1861 (i) of such Act as amended by section 248 of 
this Act: 
(11) section 1861 (v) (1) (E) of such Act as added by section 
249(b) of this Act; 
(12) section 1910 of such Act as added by section 249A of this 
Act; 
(13) section 1861 (j) of such Act as amended by section 267 of 
this Act; 
(14) section 1902(a) of such Act as amended by section 268 of 
this Act; 
(15) section 1864(a) of such Act as amended by section 277 of 
this Act; 
(16) section 1903(j) of such Act as added by section 225 of this 
Act; 
(17) section 1814(h) of such Act as added by section 228(a) of 
this Act; and 
(18) section 1866(a)(1) of such Act as amended by section 
249A of this Act. 
DIRECT LABORATORY BILLING OF PATIENTS 
SEC. 279. (a) Section 1833(a)(1) of the Social Security Act (as 
Ante, p. 1384. 
amended by section 211(c) (4) of this Act) is further amended by— 
(1) striking out "and" before " ( C ) " ; 
(2) inserting before the semicolon at the end thereof the fol-
lowing: ", and (D) with respect.to diagnostic tests performed 
in a laboratory for which payment is made under this part to the 
laboratory, the amounts paid shall be equal to 100 percent of the 
negotiated rate for such tests (as determined pursuant to sub-
section (g) of this section)". 
Ante, p. 1445. 
(b) Scctiou 1833 of such Act is amended by adding at the end 
thereof the following subsection: 
"(g) With respect to diagnostic tests performed in a laboratory for 
which payment is made under this part to the laboratory, the Secre-
tary is authorized to establish a payment rate which is acceptable 
to the laboratory and which would be considered the full charge for 
such tests. Such negotiated rate shall be limited to an amount not in 
excess of the total payment that would have been made for the serv-
ices in the absence of such a rate." 
CLARIFICATION OF MEANING OF "pHYSICIANS' SERVICES" UNDER TITLE XIX 
42 use i396d. 
SEC 280. Section 1905(a) (5) of the Social Security Act is amended 
by inserting "furnished by a physician (as defined in section 1861 (r) 
(1))" after "physicians' services". 
L13IITATION ON ADJUSTMENT OR RECOVERY OF INCORRECT PAYMENTS UNDER 
THE MEDICARE PROGRAM 
42 use i395gg. 
SEC 281. (a) (1) Section 1870(b) (1) of.the Social Security Act is 
amended by— 
(A) inserting " ( A ) " after "the Secretary determines"; and 
(B) inserting at the end of paragraph (1) the following: 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1455 
"(B) that such provider of services or other person was with-
out fault with respect to the payment of such excess over the 
correct amount, or". 
(2) Section 1870(b) of such Act is amended by adding at the end 
42 use i39Sgg. 
the following new sentence: "For purposes of clause (B) of paragraph 
(1), such provider of services or such other person shall, in the 
absence of evidence to the contrary, be deemed to be without fault if 
the Secretary's determination that more than such correct amount was 
paid was made subsequent to the third year following the year in 
which notice was sent to such individual that such amount had been 
paid; except that the Secretary may reduce such three-year period to 
not less than one year if he finds such reduction is consistent with the 
objectives of this title." 
(b) Section 1870(c) of such Act (as amended by section 261 of this 
Act) is further amended by— 
(1) inserting "or title X V I I I " after "title II", and 
(2) adding at the end the following new sentence: "Adjust-
ment or recovery of an incorrect payment (or only such part of 
an incorrect payment as the Secretary determines to be inconsist- 
' ^^ 
ent with the purposes of this title) against an individual who is 
without fault shall be deemed to be against equity and good con-
science if (A) the incorrect payment was made for expenses 
incurred for items or services for which payment may not be 
made under this title by reason of the provisions of paragraph 
(1) or (9) of section 1862 and (B) if the Secretary's determina- 
^2 use i395y. 
tion that such payment was incorrect was made subsequent to the 
third year following the year in which notice of such payment 
was sent to such individual; except that the Secretary may reduce 
such three-year period to not less than one year if he finds such 
reduction is consistent wnth the objectives of this title." 
(c) Section 1866(a)(1) of such Act (as amended by section 
-i'osiijr 
227(d)(2) of this Act) is further amended by— 
(1) redesignating subparagraph (B) as subparagraph (C), 
and 
(2) inserting after subparagraph (A) the following new sub-
paragraph : 
"(B) not to charge any individual or any other person for 
items or services for which such individual is not entitled to have 
payment made under this title because payment for expenses 
,,, 
. ^^^^p.^ 
incurred for such items or services may not be made by reason of 
the provisions of paragraph (1) or (9), but only if (i) such 
individual was without fault in incurring such expenses and (ii) 
the Secretary's determination that such payment may not be made 
for such items and services was made after the third year follow-
ing the year in which notice of such payment was sent to such 
individual; except that the Secretary may reduce such three-year 
period to not less than one year if he finds such reduction is con-
sistent with the objectives of this title, and" 
(d) Section 1842(b) (3) (B) (ii) of such Act (as amended by sec-
tion 211(c) (3) of this Act) is further amended by— 
(1) inserting " ( I ) " after "of which"; and 
(2) inserting after "service" the following: "and (II) the 
physician or other person furnishing such service agrees not to 
charge for such service if payment may not be made therefor by 
reason of the provisions of paragraph (1) of section 1862, and 
if the individual to whom such service was furnished was with-
out fault in incurring the expenses of such service, and if the 
1456 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 1395f. 
42 u s e 1395n. 
Effective date. 
Secretary's determination that payment (pursuant to such assign-
ment) was incorrect and was made subsequent to tlie third year 
following the year in which notice of such payment was sent to 
such individual; except that the Secretary may reduce such three-
year period to not less than one year if he nnds such reduction 
IS consistent with the objectives of this title." 
(e) Section 1814(a) (1) of such Act is amended to read as follows: 
"(IJ written request, signed by such individual, except in cases 
in which the Secretary finds it impracticable for the mdividual 
to do so, is filed for such payment in such form, in such manner, 
and by such person or persons as the Secretary may by regulation 
prescribe, no later than the close of the period of 3 calendar years 
following the year in which such services are furnished (deeming 
any services furnished in the last 3 calendar months of any calen-
dar year to have been furnished in the succeeding calendar year) 
except that where the Secretary deems that efficient administra-
tion so requires, such period may be reduced to not less than 1 
calendar year;". 
(f) Section 1835 (a) (1) of such Act is amended to read as follows: 
"(1) written request, signed by such individual, except in cases 
in which the Secretary finds it impracticable for the individual 
to do so, is filed for such payment m such form, in such manner 
and by such person or persons as the Secretary may by regula-
tion prescribe, no later than the close of the period of 3 calendar 
years following the year in which such services are furnished 
(deeming any services furnished in the last 3 calendar months 
of any calendar year to have been furnished in the succeeding 
calendar year) except that, where the Secretary deems that effi-
cient administration so requires, such period may be reduced to 
not less than 1 calendar year; and". 
(g) The provisions of subsection (a)(1) shall apply with respect 
to notices of payment sent to individuals after the date of enactment 
of this Act. The provisions of subsections (a) (2), (b), (c), and (d) 
shall apply in the case of notices sent to individuals after 1968. The 
provisions of subsections (e) and (f) shall apply in the case of services 
furnished (or deemed to have been furnished) aiter 1970. 
Ante, p. 1445. 
Effective date. 
COVERAGE OF OUTPATIENT SPEECH PATHOLOGY SERVICES TJNDER MEDICARE 
SEC. 283. (a) Section 1861 (p) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "The term 
'outpatient physical therapy services' also includes speech pathology 
services furnished by a provider of services, a clinic, rehabilitation 
agency, or by a public health agency, or by others under an arrange-
ment with, and under the supervision of, such provider, clinic, rehabil-
itation agency, or public health agency to an individual as an out-
patient, subject to the conditions prescribed in this subsection.". 
^b) Section 1835(a) (2) of such Act (as amended by section 251 of 
this Act) is further amended— 
(1) by striking out the period at the end of subparagraph (C) 
and inserting in lieu thereof "; and"; and 
(2) by adding after subparagraph (C) the following new sub-
paragraph : 
"(D) in the case of outpatient speech pathology services, (i) 
such services are or were required because the individual needed 
speech pathology services, (ii) a plan for furnishing such services 
has been established and is periodically reviewed by a physician, 
and (iii) such services are or were furnished while the individual 
is or was under the care of a physician.", 
(c) The provisions of this section shall apply with respect to serv-
ices rendered after December 31,1972. 
86 STAT. ] 
PUBLIC L
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1457 
TERMINATION OF 3IEDICAL ASSISTANCE ADVISORY COUNCIL 
SEC. 287. (a) Section 1906 of the Social Security Act is repealed. 
^
2
*
* u^'sc i396e 
(b) The provisions of subsection (a) shall become effective on the 
Effective date. 
first day of the third calendar month following the month in which 
this Act is enacted. 
MODIFICATION OF THE ROLE OF THE HEALTH INSURANCE BENEFITS ADVISORY 
COUNCIL 
SEC. 288. (a) Section 1867(a) of the Social Security Act is amended 
to read as follows: 
" (a) There is hereby created a Health Insurance Benefits Advisory 
Council which shall consist of 19 persons, not otherwise in the employ 
of the United States, appointed by the Secretary without regard to. 
the provisions of title 5, IJnited States Code, governing appointments 
in the competitive services. The Secretary shall from time to time 
appoint one of the members to serve as Chairman. The members shall 
include persons who are outstanding in fields related to hospital, 
medical, and other health activities, persons who are representative of 
organizations and associations of professional personnel in the field 
of medicine, and at least one person who is representative of the gen-
eral public. Each member shall hold office for a term of four years, 
except that any member appointed to fill a vacancy occurring prior 
to the expiration of the term for which his predecessor was appointed 
shall be appointed for the remainder of such term. A member shall 
not be eligible to serve continuously for more than two terms. Mem-
bers of the Advisory Council, while attending meetings or conferences 
thereof or otherwise serving on business of the Advisory Council, 
shall be entitled to receive compensation at rates fixed by the Secre-
tary, but not exceeding $100 per day, including traveltime, and while 
so serving away from their homes or regular places of business they 
may be allowed travel expenses, including per diem in lieu of sub-
sistence, as authorized by section 5703 of title 5, United States Code, 
for persons in the Government service employed intermittently. The 
Advisory Council shall meet as the Secretary deems necessary, but 
not less than annually." 
(b) Section 1867(b) of spch Act is amended to read as follows: 
"(b) It shall be the function of the Advisory Council to provide 
advice and recommendations for the consideration of the Secretary on 
matters of general policy with respect to this title and title XIX." 
(c) Section 1867 of such Act is further amended by striking out 
subsection (c). 
42 u s e 1395dd. 
5 u s e 101 et 
seq. 
Per diem and 
travel expenses. 
42 u s e 1395, 
1396. 
AUTHORITY OF SECRETARY TO ADMINISTER OATHS I N MEDICARE 
PROCEEDINGS 
SEC. 289. Section 1874 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(c) In the course of any hearing, investigation, or other proceeding 
that he is authorized to conduct under this title, the Secretary may 
administer oaths and affirmations." 
42 u s e 1395kk. 
WITHHOLDING OF FEDERAL PAYMENTS UNDER MEDICAID WITH RESPECT TO 
CERTAIN HEALTH CARE FACILITIES 
SEC. 290. Section 1903 of the Social Security Act is amended by add-
ing after subsection (i) thereof the following new subsection: 
"(j) (1) Notwithstanding the preceding provisions of this section, 
no payment shall be made to a State (except as provided under this 
Ante, pp. 
1454. 
42 use 1395. 
Notice. 
1458 
PUBLIC L
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[86 STAT. 
subsection) with lespect to expenditures incurred by it for services pro-
vided by any institution during any period that an order for suspension 
of payment (as authorized by this subsection) is effective with respect 
to such institution. 
"(2) The Secretary may issue a suspension of payment order with 
respect to any institution if— 
"(A) such institution (i) does not (at the time such order 
is issued) have in effect an agreement with the Secretary which is 
42 use 1
3
9
S
C
C
. 
entered into pui'suant to section 1866; and (ii) did (prior to the 
time such order is issued) have in effect such an agreement; and 
''(B)(i) the Secretary has been unable to collect (or make 
satisfactory arrangement for the collection of) amounts due on 
accoimt oi overpavments made to such institution under title 
XVIII; or 
"(ii) the Secretary has been unable to obtain from such insti-
tution the data and information necessary to enable him to deter-
mine the amount (if any) of the overpayments made to such 
institution under title XVIII. 
"(3) Whenever the Secretary issues any order for suspension of 
payment under this subsection with respect to any institution, he 
shall submit a notice of such order to the single State agency (referred 
42 use 1396a. ^Q in section 1902(a) (5)) of each State which he has reason to believe 
does or may utilize the sei-vices of such institution in providing medi-
cal assistance under a plan approved under this title. 
" (4) Any order for suspension of payment issued with respect to any 
institution under this subsection shall become effective, in the case of 
any state plan approved under this title, on the 60th day after the date 
the State agency (referred to in section 1902(a) (5)) administering or 
supervising the administration of such plan receives notice of such 
order submitted pui-suant to paragraph (3). Any such order shall cease 
to be effective at such time as the Secretary is satisfied that the insti-
tution is participating in substantial negotiations which seek to remedy 
the conditions which gave rise to his order of suspension of payments, 
or that the amounts (referred to in paragraph (2)) are no longer due 
from such institution or that a satisfactory arrangement has been 
made for the payment by such institution of any such amounts. Upon 
the determination of the Secretary that any such order with respect 
to any such institution shall cease to be effective, he shall forthwith 
notify each State agency to which he has theretofore submitted notice 
under paragraph (3) with respect to such institution. 
"(5) Whenever any order which has been issued by the Secretary 
under the pi-eceding provisions of this subsection with respect to an 
institution cea^s to be effective, any payment to which any State would 
(except for the preceding provisions of this subsection) have been 
entitled under this section on account of services provided by such 
institution shall be made to such State for the month in which such 
order ceases to be effective." 
INTERMEDIATE CARE SERVICES IX STATES WHICH DO NOT IIA^T: A MEDICAID 
PROGRAM 
SEC 292. Section 4(d) of Public Law 92-223i (approved December 
85 Stat. 810. 
2gj 1971) is amended by inserting immediately before the period at 
4
2 use 1396a 
^j^^ ^^^ thercof the following: '"; except that the repeal made by 
subsection (c) shall not become effective in the case of any State, 
which on January 1,1972 did not have in effect a State plan approved 
4
2 use 1396. 
under title XIX of the Social Security Act, until the first day of the 
first month (occurring after such date) that such State does have in 
effect a State plan approved under such title". 
pote 
86 STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1459 
KEQUIRED INFORMATION RELATING TO EXCESS MEDICARE TAX PAYMENTS BY 
ILilLROAD EMPLOYEES 
SEC. 293. (a) Section 6051(a) of the Internal Kevenue Code of 1954 
(relating to requirement of receipts for employees) is amended— 
(1) by striking out "section 3101, 3201, or 3402" in the matter 
preceding paragraph (1) and inserting in lieu thereof "section 
3101 or 3402"; 
(2) by inserting "and" at the end of paragraph (5), and by 
striking out the comma at the end of paragraph (6) and inserting 
in lieu thereof a period; and 
(3) by striking out paragraphs (7) and (8). 
(b) Section 6051(c) 'of such Code (relating to additional require-
ments (is amended by striking out "sections 3101 and 3201" in the 
second sentence and inserting in lieu thereof "section 3101". 
(c) Section 6051 of such Code (relating to receipts for employees) 
is amended by adding at the end thereof the following new subsection: 
"(e) 
RAILROAD EMPLOYEES.— 
"(1) 
ADDITIONAL REQUIREMENT.—Every pei-son required to 
deduct and withhold tax under section 3201 from an employee 
shall include on or with the statement required to be furnished 
such employee under subsection (a) a notice concerning the pro-
visions of this title with respect to the allowance of a credit or 
refund of the tax on wages imposed by section 3101 (b) and the tax 
on compensation imposed by section 3201 or 3211 which is treated 
as a tax on wages imposed by section 3101 (b). 
" (2) INFORMATION TO BE SUPPLIED TO EMPLOYEES.—Each person 
required to deduct and withhold tax under section 3201 during 
any year from an employee who has also received wages during 
such year subject to the tax imposed by section 3101(b) shall, 
upon request of such employee, furnish to him a written statement 
showing— 
"(A) the total amount of compensation with respect to 
which the tax imposed by section 3201 was deducted, 
"(B) the total amount deducted as tax under section 3201, 
and 
"(C) the portion of the total amount deducted as tax under 
section 3201 which is for financing the cost of hospital insur-
ance under part A of title X V I I I of the Social Security Act." 
(d) The amendments made by this section shall apply in respect 
to remuneration paid after December 31,1971. 
68A Stat. 747. 
26 u s e 6051. 
42 u s e 139Se. 
Effective date. 
APPOINTMENT AND CONFIRMATION OF ADMINISTRATOR OF SOCIAL AND 
REHABILITATION SERVICE 
SEC. 294. Appointments made on or after the date of enactment of 
this Act to the office of Administrator of the Social and Rehabilitation 
Service, within the Department of Health, Education, and Welfare, 
shall be made by the President, by and with the advice and consent 
of the Senate. 
REPEAL OF S E C T I O N 
1 9 0 3 ( b ) ( 1 ) 
SEC. 295. Section 1903(b) (1) of the Social Security Act is repealed. 
42 use i396b. 
COVERAGE UNDER MEDICAID OF INTERMEDIATE CARE FURNISHED I N MENTAL 
AND 
T U B E R C U I X ) 8 I S 
INSTITUTIONS 
SEC. 297. (a) Section 1905(a) (14) of the Social Security Act is 
amended to read as follows: 
42 u s e 1396d. 
1460 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Effective date. 
"(14) inpatient hospital services, skilled nursing home services, 
and intermediate care facility services for individuals 65 years of 
age or over in an institution for tuberculosis or mental diseases;" 
(b) The amendment made by this section shall apply with respect 
to services furnished after December 31,1972. 
85 Stat. 809. 
42 u s e 1396a. 
IXDEPEXDEXT REVIEW OF INTERMEDIATE CARE FACILITY PATIENTS 
SEC. 298. Section 1902(a) (31) (A) of the Social Security Act, as 
added by Public Law^ 92-223, is amended by striking out the phrase 
"which provides more than a minimum level of health care services." 
42 u s e 1396d. 
INTERMEDIATE CARE, MAINTENANCE OF EFFORT I N PUBLIC INSTITUTIONS 
SEC. 299. Section 1905(d) (3) of the Social Security Act, as added 
by Public Law 92-223, is amended to read as follows: 
" (3) the State or political subdivision responsible for the opera-
tion of such institution has agreed that the non-Federal expendi-
tures in any calendar quarter prior to January 1, 1975, with 
respect to services furnished to patients in such institution (or 
distinct part thereof) in the State will not, because of payments 
made under this title, be reduced below the average amount 
expended for such services in such institution in the four quarters 
immediately preceding the quarter in which the State in which 
such institution is located elected to make such services available 
under its plan approved under this title." 
DISCLOSURE OF OWNERSHIP OF OPERATIONS OF INTERMEDIATE CARE 
FACILITIES 
SEC. 299A. Section 1902(a) of the Social Security Act, as amended 
by sections 236,239, and 255 of this Act, is further amended— 
(1) by striking out "and" at the end of paragraph- (33); 
(2) by striking out the period at the end of paragraph (34) and 
inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (34) the following new para-
graph : 
"(35) effective January 1, 1973, provide that any intermediate 
care facility receiving payments under such plan must supply 
to the licensing agency of the State full and complete information 
as to the identity (A) of each person having (directly or 
indirectly) an ownership interest of 10 per centum or more in such 
intermediate care facility, (B) in case an intermediate care facility 
is organized as a corporation, of each officer and director of the 
corporation, and (C) in case an intermediate care facility is orga-
nized as a partnership, of each partner; and promptly report any 
changes which would affect the current accuracy of the informa-
tion so required to be supplied." 
TREATMENT I N MENTAL HOSPITALS FOR INDIVIDUALS UNDER AGE 21 
SEC. 299B. (a) Section 1905(a) of the Social Security Act is 
amended— 
(1) by striking the word "and" in paragraph (15); 
(2) by redesignating paragraph (15) as paragraph (17); 
(3) by redesignating paragraph (16) as paragraph (15); 
(4) by inserting after paragraph (15) the following new 
paragraph: 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1461 
"(16) effective January 1, 1973, inpatient psychiatric hospital 
services for individuals under 21, as defined in subsection (e);". 
(b) Section 1905 of such Act, as amended by sections 212(a), 247 (b) 
and 275(e) of this Act, is further amended by adding after subsection 
Ante, p. 1452. 
(g) the following new subsection: 
"(h) (1) For purposes of paragraph (16) of subsection (a), the term 
Definition. 
'inpatient psychiatric hospital services for individuals under age 21' 
includes only— 
"(A) inpatient services which are provided in an institution 
which is accredited as a psychiatric hospital by the Joint Commis-
sion on Accreditation of Hospitals; 
"(B) inpatient services which, in the case of any individual, 
involves active treatment (i) which meets such standards as may 
be prescribed pursuant to title X V I I I in regulations by the Sec- 
42 use 139s. 
retary, and (ii) which a team, consisting of physicians and other 
personnel qualified to make determinations with respect to mental 
health conditions and the treatment thereof, has determined are 
necessary on an inpatient basis and can reasonably be expected to 
improve the condition, by reason of which such services are neces-
sary, to the extent that eventually such services will no longer be 
necessary; and 
"(C) inpatient services which, in the case of any individual, are 
provided prior to (A) the date such individual attains age 21, or 
(B) in the case of an individual who was receiving such services in 
the period immediately preceding the date on which he attained 
age 21, (i) the date such individual no longer requires such serv-
ices, or (ii) if earlier, the date such individual attains age 22; 
"(2) Such term does not include services provided during any 
calendar quarter under the State plan of any State if the total amount 
of the funds expended, during such quarter, by the State (and the 
political subdivisions thereof) from non-Federal funds for inpatient 
services included under paragraph (e) (1), and for active psychiatric 
care and treatment provided on an outpatient basis for eligible men-
tally ill children, is less than the average quarterly amount of the funds 
expended, during the 4-quarter period ending December 31, 1971, by 
the State (and the political subdivisions thereof) from non-Federal 
funds for such services." 
(c) Section 1905(a) is further amended by striking out, in the part 
w^hich follows paragraph (17) (as redesignated by subsection (a) of 
this section), "except that" and inserting in lieu thereof "except as 
otherwise provided in paragraph (16),". 
PUBLIC DISCLOSURE OF INFORMATION 
CONCERNING SURVEY REPORTS OF 
A N 
INSTITUTION 
SEC. 299D. (a) Section 1864(a) of the Social Security Act is 
Ante, pp. 1452. 
amended by adding at the end thereof tne following new sentence: ^'*^'* 
"Within 90 days following the completion of each survey of any health 
care facility, laboratory, clinic, agency, or organization by the appro-
priate State or local agency described in the first sentence of this sub-
section, the Secretary shall make public in readily available form and 
place the pertinent findings of each such survey relating to the com-
pliance of each such health care facility, laboratory, clinic, agency, or 
organization with (1) the statutory conditions of participation 
imi>osed under this title and (2) the major additional conditions 
which the Secretary finds necessary in the interest of health and safety 
of individuals who are furnished care or services by any such facility, 
laboratory, clinic, agency, or organization.". 
1462 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, p. 1460. 
Effective date. 
•'• (b) Section 1902(a) of the Social Security Act, as amended by sec-
tions 236, 239, 255, and 299A of this Act, is further amended— 
(1) by striking out "and" at tlie end of paragraph (35); 
(2) by striking out the period at the end of paragraph (36) 
and inserting in lieu thereof "; and"; and 
(3) by inserting after paragraph (36) the following new 
paragraph: 
"(37) provide that within 90 days following the completion 
of eacn survey of any health care facility, laboratory, agency, 
clinic, or organization, by the appropriate State agency described 
in paragraph (9), such agency shall (in accordance with regula-
tions of the Secretary) make public in readily available form and 
place the pertinent findings of each such survey relating to the 
J 
compliance of each such health care facility, laboratory, clinic, 
- a g e n c y , or organization with (A) the statutory conditions of 
participation imposed under this title, and (B) the major 
additional conditions which the Secretary finds necessary in the 
interest of health and safety of individuals who are furnished 
care or services by any such facility, laboratory, clinic, agency, or 
organization, 
(c) The provisions of this section shall be effective beginning Janu-
ary 1, 1973, or within 6 months following the enactment of this Act, 
whichever is later. 
Ante. p. 1428. 
79 Stat. 351; 
81 Stat. 929. 
42 u s e 1396d. 
85 Stat. 803. 
42 u s e 602. 
49 Stat. 628; 
85 Stat. 80S. 
42 u s e 603. 
FAMILY PLANNING SERVICES MANDATORY UNDER MEDICAID 
SEC. 299E. (a) Section 1903(a) of the Social Security Act, as 
amended by sections 235 and 249B of this Act, is further amended by 
redesignating paragraph (5) as paragraph (6), and by inserting 
after paragraph (4) the following new paragraph: 
"(5) an amount equal to 90 per centum of the sums expended 
during such quarter (as found necessary by the Secretary for the 
proper and efficient administration of the plan) w^hich are attrib-
utable to the offering, arranging, and furnishing (directly or on 
a contract basis) of family planning services and supplies;". 
(b) Section 1905(a) (4) of the Social Security Act is amended by 
adding after clause (B) the following: "and (C) family planning 
services and supplies furnished (directly or under arrangements with 
others) to individuals of child-bearing age (including minors who 
can be considered to be sexually active) who are eligible under the 
State plan and who desire such services and supplies;". 
(c) Section 402(a) (15) (B) of such Act is amended, effective Jan-
uary 1, 1973, (1) by adding after "in all appropriate cases" the fol-
lowing: "(including minors who can be considered to be sexually 
active)", and (2) by adding after "family planning services are 
offered them" the following: "and are provided promptly (directly 
or under arrangements with othei-s) to all individuals voluntarily 
requesting such services". 
(d) Section 403 of such Act is amended by adding at the end thereof 
the following new sections: 
"(e) Notwithstanding any^ other provision of subsection (a), with 
respect to expenditures during any calendar quarter beginning after 
December 31,1972 (as found necessary by the Secretary for the proper 
and efficient administration of the plan) which are attributable to the 
offering, arranging, and furnishing, directly or on a contract basis, 
of family planning services and supplies, the amount payable to any 
State under this part shall be 90 per centum of such expenditures. 
86 STAT.] 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
1463 
"(f) Notwithstanding any other provision of this section, the 
amount payable to any State under this part for quarters in a fiscal 
year shall with respect to quarters in fiscal years beginning after June 
30, 1973, be reduced by 1 per centum (calculated without regard to 
any reduction under section 403(g)) of such amount if such State— 
"(1) in the immediately preceding fiscal year failed to carry 
out the provisions of section 402(a) (15) (B) as pertain to requir-
ing the offering and arrangement for provision of family plan-
ning services; or 
"(2) in the immediately preceding fiscal year (but, in the case 
of the fiscal year beginning July 1,1972, only considering the third 
and fourth quarters thereof), tailed to carry out the provisions of 
section 402(a) (15) (B) of the Social Security Act with respect 
to any individual who, within such period or periods as the Secre-
tary may prescribe, has been an applicant for or recipient of aid 
to families with dependent children under the plan of the State 
approved under this part." 
Infra, 
Ante, p. 1462. 
PENALTY FOR FAILURE TO PROVIDE CHILD HEALTH SCREENING SERVICES 
UNDER MEDICAID 
SEC. 299F. Section 403 of the Social Security Act is amended by add-
ing at the end thereof the following: 
"(g) Notwithstanding any otner provision of this section, the 
amount payable to any State under this part for quarters in a fiscal 
year shall with respect to quarters in fiscal years beginning after 
June 30,1974, be reduced b5^ 1 per centum (calculated without regard 
to any reduction under section 403(f)) of such amount if such State 
fails to— 
"(1) inform all families in the State receiving aid to families 
with dependent children under the plan of the State approved 
under this part of the availability of child health screening serv-
ices under the plan of such State approved under title XIX, 
"(2) provide or arrange for the provision of such screening 
services m all cases where they are requested, or 
"(3) arrange for (directly or through referral to appropriate 
agencies, organizations, or individuals) corrective treatment the 
need for which is disclosed by such child health screening services." 
Supra, 
Ante, p. 1426. 
CHRONIC RENAL DISEASE CONSIDERED TO CONSTITUTE DISABILITY 
SEC. 2991. Effective with respect to services provided on and after 
July 1, 1973, section 226 of the Social Security Act (as amended by 
section 201(b) (5) of this Act) is amended by redesignating subsec-
tion (e) as subsection (f), and by inserting after subsection (d) the 
following new subsection: 
"(e) Notwithstanding the foregoing provisions of this section, every 
individual who— 
"(1) has not attained the a^e of 65; 
" (2) (A) is fully or currently insured (as such terms are defined 
in section 214 of this Act), or (B) is entitled to monthly insurance 
benefits under title II of this Act, or (C) is the spouse or dependent 
child (as defined in regulations) of an individual who is fully 
or currently insured, or (D) is the spKJuse or dependent child (as 
defined in regulations) of an individual entitled to monthly insur-
ance benefits under title II of this Act; and 
"(3) is medically determined to have chronic renal disease and 
who requires hemodialysis or renal transplantation for such 
disease; 
Effective date. 
Ante, p. 1372. 
Ante, p. 1341. 
42 u s e 401. 
-081 O - 73 - 95 
1464 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 
STAT.. 
42 u s e 1395. 
shall be deemed to be disabled for purposes of coverage under parts 
A and B of Medicare subject to the deductible, premium, and copay-
ment provisions of title XVIII. 
"(f) Medicare eligibility on the basis of chronic kidney failure 
shall begin with the third month after the month in which a course of 
renal dialysis is initiated and would end with the twelfth month after 
the month in which the person has a renal transplant or such course 
of dialysis is terminated. 
"(g) The Secretary is authorized to limit reimbursement under 
Medicare for kidney transplant and dialysis to kidney disease treat-
ment centers which meet such requirements as he may by regulation 
prescribe: Provided^ That such requirements must include at least 
requirements for a minimal utilization rate for covered procedures 
and for a medical review board to screen the appropriateness of 
patients for the proposed treatment procedures." 
Ante, p. 1411. 
Effective date. 
ELIMIXATION OF COINSURANCE PAYMENT WITH RESPECT TO HOME HEALTH 
SERVICES UNDER PART B OF MEDICARE 
SEC. 299K. (a) Section 1833(a)(2) of the Social Security Act is 
amended by striking out "80 percent" and inserting in lieu thereof 
"with respect to home health services, 100 percent, and with respect 
to other services, 80 percent." 
(b) The amendment made by subsection (a) shall apply to services 
furnished by home health agencies in accounting periods beginning 
after DecemW 31,1972. 
85 Stat. 809. 
42 u s e 1396d. 
"Skilled nurs-
ing facility." 
Ante, p. 1452. 
42 u s e 1395x. 
CERTIFICATION OP INTERMEDIATE CARE FACILITIES AND SKILLED NURSING 
FACILITIES LOCATED ON A N INDIAN 
RESERVATION 
SEC. 299L. (a) Section 1905(c) of the Social Security Act, as added 
by Public Law 92-223, is amended by adding after the penultimate 
sentence thereof the following: "The term 'intermediate care facility' 
also includes any institution which is locate in a State on an Indian 
reservation and is certified by the Secretary as meeting the require-
ments of clauses (2) and (3) of this subsection and providing the care 
and services required under clauses (1).". 
(b) Section 1905 of the Social Security Act, as amended by this 
Act, is amended by adding at the end thereof the following new 
subsection: 
"(h) For purposes of this title, the term 'skilled nursing facility' 
also includes any institution which is located in a State on an Indian 
i-eservation and is certified by the Secretary as being a qualified skilled 
nureing facility by meeting the requirements of section 1861 (j)." 
79 Stat. 330. 
42 u s e 1395£f. 
42 u s e 426. 
79 Stat. 333; 
81 Stat. 854. 
42 u s e 426a. 
42 u s e 1395J. 
Ante, p. 1374. 
42 u s e 139Sc. 
DETERMINATIONS AND APPEALS 
SEC. 2990. (a) Section 1869(b) of the Social Security Act is 
amended to read as follows: 
"(b) (1) Any individual dissatisfied with any determination under 
subsection (a) as to— 
" ( A ) whether he meets the conditions of section 226 of this Act 
or section 103 of the Social Security Amendments of 1965, or 
"(B) whether he is eligible to enroll and has enrolled pursuant 
to the provisions of part B of this title, or section 1818, or section 
1819,or 
"(C) the amount of benefits under ^art A (including a deter-
mination where such amount is determined to be zero) 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1465 
42 u s e 405. 
Effective dates. 
42 u s e 1395c. 
shall be entitled to a hearing thereon by the Secretary to the same extent 
as is provided in section 205(b) and to judicial review of the Secre-
tary's final decision after such hearing as is provided in section 205(g). 
"(2) Notwithstanding the provisions of subparagraph (C) of para-
graph (1) of this subsection, a hearing shall not be available to an 
individual by reason of such subparagraph (C) if the amount in 
controversy is less than $100; nor shall judicial review be available to 
an individual by reason of such subparagraph (C) if the amount in 
controversy is less than $1,000." 
(b)(1) The provisions of subparagraphs (A) and (B) of section 
1869(b) (1) of the Social Security Act, as amended by subsection (a) 
of this section, shall be effective on the date of enactment of this Act. 
(2) The provisions of paragraph (2) and of subparagraph (C) of 
paragraph (1) of section 1869(b) of the Social Security Act, as 
amended by subsection (a) of this section, shall be effective with 
respect to any claims under part A of title X V I I I of such Act, filed— 
(A) in or after the month in which this Act is enacted, or 
(B) before the month in which this Act is enacted, but only if a 
civil action with respect to a final decision of the Secretary of 
Health, Education, and Welfare on such claim has not been com-
menced under such section 1869(b) before such month. 
TITLE III—SUPPLEMENTAL SECUKITY INCOME FOR 
T H E AGED, BLIND, AND DISABLED 
ESTABLISHMENT OF PROGRAM 
SEC. 301. Effective January 1,1974, title X V I of the Social Security 
Effective date. 
Act is amended to read as follows: 
"
* 
76 stat. i97; 
81 Stat. 896. 
"TITLE XVI—SUPPLEMENTAL SECURITY INCOME FOR 
'*' "^"^ '^*^-
T H E AGED, BLIND, AND DISABLED 
u 
P U R P O S E ; APPROPRIATIONS 
"SEC. 1601. For the purpose of establishing a national program to 
provide supplemental security income to individuals who have attained 
age 65 or are blind or disabled, there are authorized to be appropriated 
sums sufficient to carry out this title. 
U-
BASIC ELIGIBILITY TOR BENEFITS 
"SEC. 1602. Every aged, blind, or disabled individual who is deter-
mined under part A to be eligible on the basis of his income and 
resources shall, in accordance with and subject to the provisions of this 
title, be paid benefits by the Secretary of Health, Education, and 
Welfare. 
1466 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"PART A—DETERMINATION OF BENEFITS 
.eo?-. -JC'.' • 
"ELIGIBILITY FOR AND AMOUNT OF BENEFITS 
"Definition of Eligible Individual 
"SEC. 1611. (a) (1) Each aged, blind, or disabled individual who does 
not have an eligible spouse and— 
"(A) whose income, other than income excluded pursuant to 
• 
'>»r; 
section 1612(b), is at a rate of not more than $1,560 for the 
calendar year 1974 or any calendar year thereafter, and 
"(B) whose resources, other than resources excluded pursuant 
to section 1613(a), are not more than (i) in case such individual 
has a spouse with whom he is living, $2,250, or (ii) in case such 
individual has no spouse with whom he is living, $1,500, 
shall be an eligible individual for purposes of this title. 
"(2) Each aged, blind, or disabled individual who has an eligible 
spouse and— 
" (A) whose income (together with the income of such sjjouse), 
other than income excluded pursuant to section 1612(b), is at a 
rate of not more than $2,340 for the calendar year 1974, or any 
calendar year thereafter, and 
"(B) whose resources (together with the resources of such 
spouse), other than resources excluded pursuant to section 1613 
(a), are not more than $2,250, 
shall be an eligible individual for purposes of this title. 
"Amounts of Benefits 
"(b)(1) The benefit under this title for an individual who does not 
have an eligible spouse shall be payable at the rate of $1,560 for the 
calendar year 1974 and any calendar year thereafter, reduced by the 
amount of income, not excluded pursuant to section 1612(b), of such 
individual. 
" (2) The benefit under this title for an individual who has an eligi-
ble spouse shall be payable at the rate of $2,340 for the calendar year 
1974 and any calendar year thereafter, reduced by the amount of 
income, not excluded pursuant to section 1612(b), of such individual 
and spouse. 
"Period for Determination of Benefits 
"(c) (1) An individual's eligibility for benefits under this title and 
the amount of such benefits shall be determined for each quarter of a 
calendar year except that, if the initial application for benefits is filed 
in the second or third month of a calendar quarter, such determina-
tions shall be made for each month in such quarter. Eligibility for and 
the amount of such benefits for any quarter shall be redetermined at 
such time or times as may be provided by the Secretary. 
"(2) For purposes of this subsection an application shall be con-
sidered to be effective as of the first day of the month in which it was 
actually filed. 
"Special Limits on Gross Income 
"(d) The Secretary may prescribe the circumstances under which, 
consistently with the purposes of this title, the' gross income from a 
trade or business (includmg farming) will be considered sufficiently 
large to make an individual ineligible for benefits under this title. For 
j)urposes of this subsection, the term 'gross income' has the same 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1467 
26 use 1 et 
meaning as when used in chapter 1 of the Internal Revenue Code of 
1954. 
"Limitation on Eligibility of Certain Individuals 
"(e)(1)(A) Except as provided in subparagraph (B), no person 
shall be an eligible individual or eligible spouse for purposes of this 
title with respect to any month if throughout such month he is an 
inmate of a public institution. 
"(B) In any case where an eligible individual or his eligible spouse 
(if any) is, throughout any month, in a hospital, extended care 
facility, nursing home, or intermediate care facility receiving pay-
ments (with respect to such individual or spouse) under a State plan 
approved under title XIX, the benefit under this title for such indi- 
'•2 use 1396. 
vidual for such month shall be payable— 
"(i) at a rate not in excess of $300 per year (reduced by the 
amount of any income not excluded pursuant to section 1612(b)) 
in the case of an individual who does not have an eligible spouse; 
"(ii) at a rate not in excess of the sum of the applicable rate 
specified in subsection (b)(1) and the rate of $300 per year 
(reduced by the amount of any income not excluded pui-suant to 
section 1612(b)) in the case of an individual who has an eligible 
.; 
spouse, if only one of them is in such a hospital, home, or facility 
throughout such month; and 
"(iii) at a rate not in excess of $600 per year (reduced by the 
amount of any income not excluded pursuant to section 1612(b)) 
in the case of an individual who has an eligible spouse, if both of 
them are in such a hospital, home, or facility throughout such 
month. 
"(2) No person shall be an eligible individual or eligible spouse for 
purposes of this title if, after notice to such person by the Secre-
tary that it is likely that such person is eligible for any payments of 
the type enumerated in section 1612(a)(2)(B), such person fails 
within 30 days to take all appropriate steps to apply for and (if 
eligible) obtain any such payments. 
"(3) (A) No person who is an aged, blind, or disabled individual 
solely by reason of disability (as determined under section 1614(a) 
(3)) shall be an eligible individual or eligible spouse for purposes of 
this title with respect to any month if such individual is medically 
determined to be a drug addict or an alcoholic unless such individual 
is undergoing any treatment that may be appropriate for his condition 
as a drug addict or alcoholic (as the case may be) at an institution 
or facility approved for purposes of this paraorraph by the Secretary 
(so lon^ as such treatment is available) and demonstrates that ho is 
complying with the terms, conditions, and requirements of such treat-
ment and with requirements imposed by the Secretary under subpara-
graph (B). 
"(B) The Secretary shall provide for the monitoring and testing 
of all individuals who are receiving benefits under this title and who 
as a condition of such benefits are required to be undergoing treat-
ment and complying with the terms, conditions, and requirements 
^^ 
thereof as described in subparagraph (A), in order to assure such 
compliance and to determine the extent to which the imposition of 
such requirement is contributing to the achievement of the purposes 
of this title. The Secretary shall annually submit to the Congress ^
^
f
^
^
f
*
"
"
* *° ^°"' 
a full and complete report on his activities under this paragraph. 
gress. 
1468 
PUBLIC LAW 92^03~OCT. 30, 1972 
[86 STAT. 
"Suspension of Payments to Individuals Who Are Outside the United 
States 
"(f) Notwithstanding any other provision of this title, no indi-
vidual shall be considered an eligible individual for purposes of this 
title for any month during all of which such individual is outside the 
United States (and no person shall be considered the eligible spouse 
of an individual for purposes of this title with respect to any month 
during all of which such person is outside the United States). For 
purposes of the preceding sentence, after an individual has been outside 
the United States for any period of 30 consecutive days, he shall be 
treated as remaining outside the United States until he has been in 
the United States for a period of 30 consecutive days. 
"Certain Individuals Deemed To Meet Resources Test 
" (g) In the case of any individual or any individual and his spouse 
(as the case may be) who for the month of December 1973 was a 
recipient of aid or assistance under a State plan approved under title 
42 use 301, 
I, X, XIV, or XVI, the resources of such individual or such individual 
^^An'te^p^'ues. *^^^ ^^^ spouse shall be deemed not to exceed the amount specified in 
sections 1611(a) (1) (B) and 1611(a) (2) (B) during any period that 
the resources of such individual or individual and his spouse (as the 
case may be) does not exceed the maximum amount of resources, as 
specified in the State plan (above referred to, and as in effect in Octo-
ber 1972) under which he or they were entitled to aid or assistance for 
the month of December 1972. 
"Certain Individuals Deemed To Meet Income Test 
"(h) In determining eligibility for, and the amount of, benefits 
payable under this section in the case of any individual or any individ-
ual and his spouse (as the case may be) who is blind (as that term is 
defined under a State plan approved under title X or XVI as in 
effect in October 1972) and who for the month of December 1973 was 
a recipient of aid or assistance under a State plan approved under 
title X or XVI, there shall be disregarded an amount equal to the 
greater of the amounts determined as follows— 
"(1) the maximum amount of any earned or unearned income 
which could have been disregarded under the State plan (above 
referred to, and as in effect in October 1972), or 
"(2) the amount which would be required to be disregarded 
under section 1612 without application of this subsection. 
"INCOME 
"Meaning of Income 
"SEC. 1612. (a) For purposes of this title, income means both earned 
income and unearned income; and— 
"(1) earned income means only— 
42 use 403. 
"(A) wages as determined under section 203(f) (5) (C); 
and 
"(B) net earnings from self-employment, as defined in sec-
Ante, p. 1353. 
tion 211 (without the application of the second and third 
sentences following subsection (a) (10), and the last par-
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1469 
agrapli of subsection (a)), including earnings for services 
described in paragraphs (4), (5), and (6) of subsection (c) ; 
and 
"(2) unearned income means all other income, including— 
" (A) support and maintenance furnished in cash or kind; 
except that in the case of any individual (and his eligible 
spouse, if any) living in another person's household and 
receiving support and maintenance in kind from such person, 
the dollar amounts otherwise applicable to such individual 
(and spouse) as specified in subsections (a) and (b) of sec-
tion 1611 shall be reduced by ZSy^ percent in lieu of including 
such support and maintenance in the unearned income of 
such individual (and spouse) as otherwise required by this 
subparagraph ; 
"(B) any payments received as an annuity, pension, retire-
ment, or disability benefit, including veterans' compensa-
tion and pensions, workmen's compensation 
payments, 
old-age, survivors, and disability insurance benefits, railroad 
retirement 
annuities and pensions, and 
unemployment 
insurance benefits; 
"(C) prizes and awards; 
"(D) the proceeds of any life insurance policy to the 
extent that they exceed the amount expended by the bene-
ficiary for purposes of the insured individual's last illness and 
burial or $1,500, whichever is less; 
"(E) gifts (cash or otherwise), support and alimony pay-
ments, and inheritances; and 
"(F) rents, dividends, interest, and royalties. 
"Exclusions From Income 
"(b) In determining the income of an individual (and his eligible 
spouse) there shall be excluded— 
"(1) subject to limitations (as to amount or otherwise) 
prescribed by the Secretary, if such individual is a child who is, as 
determined by the Secretary, a student regularly attending a 
school, college, or university, or a course of vocational or technical 
training designed to prepare him for gainful employment, the 
earned income of such individual; 
"(2) the first $240 per year (or proportionately smaller 
amounts for shorter periods) of income (whether earned or 
unearned) other than income which is paid on the basis of the need 
of the eligible individual; 
"(3) (A) the total unearned income of such individual (and 
such spouse, if any) in a calendar quarter which, as determined in 
accordance with criteria prescribed by the Secretary, is received 
too infrequently or irregularly to be included, if such income so 
received does not exceed $60 in such quarter, and (B) the total 
earned income of such individual (and such spouse, if any) in a 
calendar quarter which, as determined in accordance with such 
criteria, is received too infrequently or irregularly to be included, 
if such income so received does not exceed $30 in such quarter ; 
"(4) (A) if such individual (or such spouse) is blind (and has 
not attained age 65, or received benefits under this title (or aid 
under a State plan approved under section 1002 or 1602) for the 
''osf, p. uss. 
month before the month in which he attained age 65), (i) the first 
$780 per year (or proportionately smaller amounts for shorter 
periods) of earned income not excluded by the preceding para-
1470 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
graphs of this subsection, plus one-half of the remainder thereof, 
(ii) an amount equal to any expenses reasonably attributable to 
the earning of any income, and (^iii) such additional amounts of 
other income, where such individual has a plan for achieving 
self-support approved by the Secretary, as may be necessary for 
the fulfillment of such plan, 
"(B) if such individual (or such spouse) is disabled but not 
blind (and has not attained age 65, or received benefits under this 
title (or aid under a State plan approved under section 1402 or 
Post, p. 1488. 
1602) for the month before the month in which he attained age 
65), (i) the first $780 per year (or proportionately smaller 
amounts for shorter periods) of earned income not excluded by 
the preceding paragraphs of this subsection, plus one-half of the 
remainder thereof, and (ii) such additional amounts of other 
income, where such individual has a plan for achieving self-
support approved by the Secretary, as may be necessary for the 
fulfillment of such plan, or 
"(C) if such individual (or such spouse) has attained age 65 
and is not included under subparagraph (A) or (BY, the first 
$780 per year (or proportionately smaller amounts tor shorter 
periods) of earned income not excluded by the preceding para-
graphs of this subsection, plus one-half of the remainder thereof; 
"(5) any amount received from any public agency as a return 
or refund of taxes paid on real property or on food purchased 
by such individual (or such spouse); 
"(6) assistance described m section 1616(a) which is based on 
need and furnished by any State or political subdivision of a 
State; 
"^7) any portion of any grant, scholarship, or fellowship 
received for use in paying the cost of tuition and fees at any 
educational (including technical or vocational education) institu-
tion; 
"(8) home produce of such individual (or spouse) utilized by 
the household for its own consumption; 
"(9) if such individual is a child one-third of any payment for 
his support received from an absent parent; and 
"(10) any amounts received for the foster care of a child who 
is not an eligible individual but who is living in the same home 
as such individual and was placed in such home by a public or 
nonprofit private child-placement or child-care agency. 
"RESOURCES 
"Exclusions From Resources 
"SEC. 1613. (a) In determining the resources of an individual (and 
his eligible spouse, if any) there shall be excluded— 
"(1) the home (including the land that appertains thereto), to 
the extent that its value does not exceed such amoimt as the 
Secretary determines to be reasonable; 
"(2) household ^oods, personal effects, and an automobile, to 
the extent that their total value does not exceed such amount as 
the Secretary determines to be reasonable j 
"(3) other property which, as determined in accordance with 
and subject to limitations prescribed by the Secretary, is so essen-
tial to the means of self-support of such individual (and such 
spouse) as to warrant its exclusion; 
"(4) such resources of an individual who is blind or disabled 
and who has a plan for achieving self-support approved by the 
86 STAT. ] 
PUBLIC LAW 92-^03-OCT. 30, 1972 
, 
1471 
Secretary, as may be necessary for the fulfillment of such plan; 
and 
"(5) in the case of Natives of Alaska, shares of stock held in a 
Regional or a Village Corporation, during the period of twenty 
years in which such stock is inalienable, as provided in section 
7(h) and section 8(c) of the Alaska Native Claims Settlement 
A c t . 
85 Stat. 691. 
In determining the resources of an individual (or eligible spouse) an ^J'^y^^^ lew, 
insurance policy shall be taken into account only to the extent of its 
cash surrender value; except that if the total race value of all life 
insurance policies on any person is $1,500 or less, no part of the value 
of any such policy shall be taken into account. 
"Disposition of Resources 
; .iViC 
"(b) The Secretary shall prescribe the period or periods of time 
within which, and the manner in which, various kinds of property 
must be disposed of in order not to be included in determining an 
individual's eligibility for benefits. Any portion of the individual's 
benefits paid for any such period shall be conditioned upon such dis-
posal ; and any benefits so paid shall (at the time of the disposal) be 
considered overpayments to the extent they would not have been paid 
had the disposal occurred at the beginning of the period for which 
such benefits were paid. 
" M E A N I N G o r TERMS 
"Aged, Blind, or Disabled Individual 
"SEC. 1614. (a) (1) For purposes of this title, the term'aged, blind, 
or disabled individual' means an individual who— 
"(A) is 65 years of age or older, is blind (as determined under 
paragraph (2)), or is disabled (as determined under paragraph 
(3)), and 
"(B) is a resident of the United States, and is either (i) a 
citizen or (ii) an alien lawfully admitted for permanent residence 
or otherwise permanently residing in the United States under 
color of law (including any alien who is lawfully present in the 
United States as a result of the application of the provisions of 
section 203(a) (7) or section 212(d) (5) of the Immigration and 
Nationality Act). 
H «;«;• JJ2. 
"(2) An individual shall be considered to be blind for purposes 
s use iis3,' 
of this title if he has central visual acuity of 20/200 or less in the i*82. 
better eye with the use of a correcting lens. An eye which is accom-
panied by a limitation in the fields of visicm such that the widest diam-
eter of the visual field subtends an angle no greater than 20 degrees 
shall be considered for purposes of the first sentence of this sub-
section as having a central visual acuity of 20/200 or less. An individ-
ual shall also be considered to be blind for purposes of this title if 
he is blind as defined under a State plan approved under title X or 
XVI as in effect for October 1972 and received aid under such plan ^^^^^^^ ^^°^' 
(on the basis of blindness) for December 1973, so long as he is 
continuously blind as so defined. 
"(3) (A) An individual shall be considered to be disabled for pur-
poses of this title if he is unable to engage in any substantial gainful 
activity by reason of any medically determinable phvsical or mental 
impairment which can be expected to result in death or which has 
lasted or can be expected to last for a continuous period of not less 
than twelve months (or, in the case of a child under the age of 18, 
if he suffers from any medically determinable physical or mental 
impairment of comparable severity). An individual shall also be 
1472 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 
STAT. 
42 u s e 1351, 
1381. 
Definition. 
Definition. 
considered to be disabled for purposes of this title if he is perma-
nently and totally disabled as defined under a State plan approved 
under title XIV or XVI as in effect for October 1972 and received 
aid under such plan (on the basis of disability) for December 1973, 
so long as he is continuously disabled as so defined. 
"(B) For purposes of subparagraph (A), an individual shall be 
determined to be under a disability only if his physical or mental 
impairment or impairments are of such severity that he is not only 
unable to do his previous work but cannot, considering his age, educa-
tion, and work experience, engage in any other kind of substantial 
gainful work which exists in the national economy, regardless of 
whether such work exists in the immediate area in which he lives, or 
whether a specific job vacancy exists for him, or whether he would 
be hired if he applied for work. For purposes of the preceding sen-
tence (with respect to any individual), 'work which exists in the 
national economy' means work which exists in significant numbers 
either in the region where such individual lives or in several regions 
of the country. 
"(C) For purposes of this paragraph, a physical or mental impair-
ment is an impairment that results from anatomical, physiological, or 
psychological abnormalities which are demonstrable by medically 
acceptable clinical and laboratory diagnostic techniques. 
"(D) The Secretary shall by regulations prescribe the criteria for 
determining when services performed or earnings derived from serv-
ices demonstrate an individual's ability to engage in substantial gain-
ful activity. Notwithstanding the provisions of subparagraph (B), an 
individual whose services or earnings meet such criteria, except for 
purposes of naragraph (4), shall be found not to be disabled. 
"(4) (A) For purposes of this title, any services rendered during 
a period of trial work (as defined in subparagraph (B)) by an indi-
vidual who is an aged, blind, or disabled individual solely by reason of 
disability (as determined under paragraph (3) of this subsection) 
shall be deemed not to have been rendered by such individual in 
determining whether his disability has ceased in a month during 
such period. As used in this paragraph, the term 'services' means 
activity which is performed for remuneration or gain or is deter-
mined by the Secretary to be of a type normally performed for 
remuneration or gain. 
"(B) The term 'period of trial work', with respect to an individual 
who is an aged, blind, or disabled individual solely by reason of dis-
ability (as determined under paragraph (3) of this subsection), means 
a period of months beginning and ending as provided in subpara-
graphs (C) and (D). 
" (C) A period of trial work for any individual shall begin with the 
month in which he becomes eligible for benefits under this title on the 
basis of his disability; but no such period may begin for an individual 
who is eligible for l>enefits under this title on the basis of a disability 
if he has had a previous period of trial work while eligible for benefits 
on the basis of the same disability. 
"(D) A period of trial A
)
v
^
o
r
k for any individual shall end with the 
close of whichever of the following months is the earlier: 
"(i) the ninth month, beginning on or after the first day of 
such period, in which the individual renders services (whether or 
not such nine months are consecutive); or 
"(ii) the month in which his disability (as determined under 
para^aph (3) of this subsection) ceases (as determined after the 
application of subparagraph (A) of this paragraph). 
86 STAT. ] 
PUBLIC L
A
W 92^03-OCT. 30, 1972 
1473 
"Eligible Spouse 
"(b) For purposes of this title, the term 'eligible spouse' means an 
aged, blind, or disabled individual who is the husband or wife of 
another aged, blind, or disabled individual and who has not been 
living apart from such other aged, blind, or disabled individual for 
more than six months. If two aged, blind, or disabled individuals are 
husband and wife as described m the preceding sentence, onlv one of 
them may be an 'eligible individual' within the meaning of section 
1611(a). 
"Definition of Child 
"(c) For purposes of this title, the term 'child' means an individual 
who is neither married nor (as determined by the Secretary) the head 
of a household, and who is Q) under the age of eighteen, or (2) under 
the age of twenty-two and (as determined by the Secretary) a student 
regularly attending a school, college, or university, or a course of voca-
tional or technical training designed to prepare him for gainful 
employment. 
"Determination of Marital Kelationships 
"(d) In determining whether two individuals are husband and wife 
for purposes of this title, appropriate State law shall be applied; 
except that— 
" (1) if a man and women have been determined to be husband 
and wife under section 216(h) (1) for purposes of title II they 
4
2 use 4oi. 
shall be considered (from and after the date of such determina-
tion or the date of their application for benefits under this title, 
whichever is later) to be husband and wife for purposes of this 
title, or 
"(2) if a man and woman are found to be holding themselves 
out to the community in which they reside as husband and wife, 
they shall be so considered for purposes of this title notwith-
standing any other provision of this section. 
"United States 
" (e) For purposes of this title, the term 'United States', when used 
in a geograj^hical sense, means the 50 States and the District of 
Columbia. 
"Income and Resources of Individuals Other Than 
Eligible Individuals and Eligible Spouses 
"(f)(1) For purposes of determining eligibility for and the amount 
of benefits for any individual who is married and whose spouse is 
living Avith him in the same household but is not an eligible spouse, 
such individual's income and resources shall be deemed to include any 
income and resources of such spouse, whether or not available to such 
individual, except to the extent determined by the Secretary to be 
inequitable under the circumstances. 
" (2) For purposes of determining eligibility for and the amount of 
benefits for any individual who is a child under age 21, such indi-
vidual's income and resources shall be deemed to include any income 
and resources of a parent of such individual (or the spouse of such a 
parent) who is living in the same household as such individual, 
1474 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"wlietlxer or not available to such individual, except to the extent 
determined by the Secretary to be inequitable under the circumstances. 
u 
29 u s e 31 note. 
REHABILITATION SERVICES FOR BLIND AND DISABLED INDIVIDUALS 
"SEC. 1615. (a) In the case of any blind or disabled individual who— 
" (1) has not attained age 65, and 
"(2) is receiving benefits (or with respect to whom benefits 
are paid) under this title, 
the Secretary shall make provision for referral of such individual to 
the appropriate State agency administering the State plan for voca-
tional rehabilitation services approved under the Vocational Rehabili-
ol fisn ^^l^^^. tatidfi Act, and (except in such cases as he may determine) for a review 
oa I
T r- ^ 1 ^^,^ ^^^ j ^ ^ ^ often than quarterljy^ of such individual's blindness or disability 
and his need for and utilization of the rehabilitation services made 
available to him under such plan. 
"(b) Every individual with respect to whom the Secretary is 
required to make provision for referral under subsection (a) shall 
accept such rehabilitation services as are made available to him under 
the State plan for vocational rehabilitation services approved under 
the Vocational Rehabilitation Act; and the Secretary is authorized to 
pay to the State agency administering or supervising the administra-
tion of such State plan the costs incurred in the provision of such 
services to individuals so referred. 
"(c) No individual shall be an eligible individual or eligible spouse 
for purposes of this title if he refuses without good cause to accept 
vocational rehabilitation services for which he is referred under sub-
section (a). 
" O P T I O N A L STATE SUPPLEMENTATION 
"SEC. 1616. (a) Any cash payments which are made by a State 
(or political subdivision thereof) on a regular basis to individuals 
who are receiving benefits under this title or who would but for their 
income be eligible to receive benefits under this title, as assistance 
based on need in supplementation of such benefits (as determined 
by the Secretary), shall be excluded under section 1612(b)(6) in 
determining the income of such individuals for purposes of this title 
and the Secretary and such State may enter into an agreement which 
satisfies subsection (b) under which the Secretary will, on behalf of 
such State (or subdivision) make such supplementary payments to all 
such individuals. 
"(b) Any agreement between the Secretary and a State entered 
into under subsection (a) shall provide— 
"(1) that such payments will be made (subject to subsection 
(c)) to all individuals residing in such State (or subdivision) 
who are receiving benefits under this title, and 
"(2) such other rules with respect to eligibility for or amount 
of the supplementary payments, and such procedural or other gen-
eral administrative provisions, as the Secretary finds necessary 
(subject to subsection (c)) to achieve efficient and effective admin-
istration of both the program which he conducts under this title 
and the optional State supplementation. 
"(c) (1) Any State (or political subdivision) making supplementary 
payments described in subsection (a) may at its option impose as a 
condition of eligiblity for such payments, and include in the State's 
agreement with the Secretary under such subsection, a residence 
requirement which excludes individuals who have resided in the State 
(or political subdivision) for less than a minimum period prior to 
application for such payments. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1475 
"(2) Any State (or political subdivision), in determining the eligi-
bility of any individual for supplementary payments described in sub-
section (a), may disregard amounts of earned and unearned income in 
addition to other amounts which it is required or permitted to dis-
regard under this section in determining such eligibility, and shall 
include a provision specifying the amount of any such income that 
will be disregarded, if any. 
"(d) Any State which has entered into an agreement with the Sec-
retary under this section which provides that the Secretary will, on 
behalf of the State (or political subdivision), make the supplemen-
tary payments to individuals who are receiving benefits under this title 
(or who would but for their income be eligible to receive such bene-
fits), shall, at such times and in such installments as may be agreed 
upon between the Secretary and such State, pav to the Secretary an 
amount ecjual to the expenditures made by the Secretary as such sup-
plementary payments. 
"PART B—PROCEDURAL AND GENERAL PROVISIONS 
"PAYMENTS AND PROCEDURES 
"Payment of Benefits 
"SEC. 1631. (a) (1) Benefits under this title shall be paid at such 
time or times and in such installments as will best effectuate the pur-
poses of this title, as determined under regulations (and may in any 
case be paid less frequently than monthly where the amount of the 
monthly benefit would not exceed $10). 
" (2) Payments of the benefit of any individual may be made to any 
such individual or to his eligible spouse (if any) or partly to each, or, 
if the Secretary deems it appropriate to any other person (including 
an appropriate public or private agency) who is interested in or con-
cerned with the welfare of such individual (or spouse). Notwith-
standing the provisions of the preceding sentence, in the case of any 
individual or eligible spouse referred to in section 1611 (e) (3) (A), the 
Secretary shall provide for making payments of the benefit to any 
other person (including an appropriate public or private agency) who 
is interested in or concerned with the welfare of such individual (or 
spouse). 
"(3) The Secretary may by regulation establish ran.<res of incomes 
within which a single amount of benefits under this title shall apply. 
"(4) The Secretary— 
"(A) may make to any individual initially applying for bene-
fits under this title who is presumptively eligible for such benefits 
and who is faced with financial emergency a cash advance against 
such benefits in an amount not exceeding $100; and 
"(B) may pay benefits under this title to an individual apply-
ing for such benefits on the basis of disability for a period not 
exceeding 3 months prior to the determination of such individual's 
disability, if such individual is presumptively disabled and is 
determined to be otherwise eligible for such benefits, and any 
benefits so paid prior to such determination shall in no event be 
considered overpayments for purposes of subsection (b). 
" (5) Payment of the benefit of any individual who is an aged, blind, 
or disabled individual solely by reason of blindness (as determined 
under section 1614(a) (2)) or disability (as determined under section 
1614(a) (3)), and who ceases to be blind or to be under such disability, 
_">2IJ SI" 
1476 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
shaU continue (so long as such individual is othei-wise eligible) through 
the second month following the month in which such blindness or dis-
ability ceases. 
"Overpayments and Underpayments 
" (b) Whenever the Secretary finds that more or less than the correct 
amount of benefits has been paid with respect to any individual, 
proper adjustment or recovery shall, subject to the succeeding provi-
sions of this subsection, be made by appropriate adjustments in future 
payments to such individual or by recovery from or payment to such 
individual or his eligible spouse (or by recovery from the estate of 
either). The Secretary shall make such provision as he finds appro-
E
riate in the case of payment of more than the correct amount of 
enefits with respect to an individual with a view to avoiding penaliz-
ing such individual or his eligible spouse who was without fault in 
connection with the overpayment, if adjustment or recovery on account 
of such overpayment in such case would defeat the purposes of this 
title, or be against equity or good conscience, or (because of the small 
amount involved) impede efficient or effective administration of this 
title. 
"Hearings and Review 
"(c) (1) The Secretary shall provide reasonable notice and oppor-
tunity for a hearing to any individual who is or claims to be an 
eligible individual or eligible spouse and is in disagreement with any 
determination under this title with respect to eligibility of such indi-
vidual for benefits, or the amount of such individual's benefits, if such 
individual requests a hearing on the matter in disagreement within 
thirty days after notice of such determination is received. 
"(2) Determination on the basis of such hearing, except to the 
extent that the matter in disagreement involves the existence of a 
disability (within the meaning of section 1614(a) (3)), shall be made 
within ninety days after the individual requests the hearing as pro-
vided in paragraph (1). 
"(3) The final determination of the Secretary after a hearing under 
paragraph (1) shall be subject to judicial review as provided in sec-
42 use 405. 
tion 205(g) to the same extent as the Secretary's final determinations 
under section 205; except that the detennination of the Secretary after 
such hearing as to any fact shall be final and conclusive and not subject 
to review by any court. 
"Procedures; Prohibitions of Assignments; Representation of 
Claimants 
4
2 use 407. 
"(d)(1) The provisions of section 207 and subsections (a), (d), 
(e), and (f) of section 205 shall applv with respect to this part to the 
4
2 use 401 
same extent as they apply in the case oi title II. 
" ('2) To the extent the Secretary finds it will promote the achieve-
ment of the objectives of this title, qualified persons may be appointed 
to serve as hearing examiners in hearings under subsection (c) with-
out meeting the specific standards prescribed for hearing examiners 
80 Stat. 381; 
by O
F uudcr subchapter II of chaj)ter 5 of title 5, United States Code. 
*^^us*c 551. 
"(3) The Secretary may prescribe rules and regulations governing 
Rules and regu- the Tecognition of agents or other persons, other than attorneys, as 
hereinafter provided, representing claimants before the Secretary 
under this title, and may require of such agents or other persons, before 
being recognized as representatives of claimants, that they shall show 
lations. 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1477 
that they are of good character and in good repute, possessed of the 
necessary qualifications to enable them to render such claimants valu-
able service, and otherwise competent to advise and assist such claim-
ants in the presentation of their cases. An attorney in good standing 
who is admitted to practice before the highest court of the State, 
Territory, District, or insular possession of his residence or before the 
Supreme Court of the United States or the inferior Federal courts, 
shall be entitled to represent claimants before the Secretary. The Secre-
tary may, after due notice and opportunity for hearing, suspend or pro-
hibit from further practice before him any such person, agent, or 
attorney 
who refuses 
to 
comply 
with 
the 
Secretary's 
rules 
and regulations or who violates any provision of this paragraph 
for 
which 
a penalty 
is prescribed. 
The 
Secretary 
may, 
by 
rule and regulation, prescribe the maximum fees which 
may 
be charged 
for 
services performed 
in 
connection 
with 
any 
claim before the Secretary under this title, and any agreement in 
violation of such rules and reflations shall be void. Any person who 
shall, with intent to defraud, m any manner willfully and knowingly 
deceive, mislead, or threaten any claimant or prospective claimant or 
beneficiary under this title by word, circular, letter, or advertisement, 
or who shall knowingly charge or collect directly or indirectly any 
fee in excess of the maximum fee, or make any agreement directly or 
indirectly to charge or collect any fee in excess of the maximum fee, 
prescribed by the Secretary, shall be deemed guilty of a misdemeanor 
and, upon conviction thereof, shall for each offense be punished by a 
fine not exceeding $500 or by imprisonment not exceeding one year, 
or both. 
"Applications and Furnishing of Information 
"(e)(1)(A) The Secretary shall, subject to subparagraph (B), 
prescribe such requirements with respect to the filing of applications, 
the suspension or termination of assistance, the furnishing of other 
data and material, and the reporting of events and changes in circum-
stances, as may be necessary for the effective and efficient adminis-
tration of this title. 
"(B) The requirements prescribed by the Secretary pursuant to 
subparagraph (A) shall require that eligibility for benefits under this 
title will not be determined solely on the basis of declarations by the 
applicant concerning eligibility factors or other relev^ant facts, and 
that relevant information will be verified from independent or col-
lateral sources and additional information obtained as necessary in 
order to assure that such benefits are only provided to eligible indi-
viduals (or eligible spouses) and that the amounts of such benefits are 
correct. 
"(2) In case of the failure by any individual to submit a report of 
events and changes in circumstances relevant to eligibility for or 
amount of benefits under this title as required by the Secretary under 
paragraph (1), or delay by any individual in submitting a report as 
so required, the Secretary (in addition to taking any other action he 
may consider appropriate under paragraph (1)) shall reduce any 
benefits which may subsequently become payable to such individual 
under this title by— 
" (A) $25 in the case of the first such failure or delay, 
"(B) $50 in the case of the second such failure or delay, and 
"(C) $100 in the case of the third or a subsequent such failure 
or delay, 
except where the individual was without fault or good cause for such 
failure or delay existed. 
Offenses and 
penalties. 
Requirements. 
Benefits, feduc-
1478 
PUBLIC L
A
W 92-603-OCT. 30, 1972 
[86 STAT. 
42 u s e 421. 
"Furnishing of Information by Other Agencies 
"(f) The head of any Federal agency shall provide such informa-
tion as the Secretary needs for purposes of determining eli^bility for 
or amount of benefits, or verifying other information with respect 
thereto. 
(( 
PENALTIES FOR FRAUD 
"SEC. 1632. Whoever— 
"(1) knowingly and willfully makes or causes to be made anj 
false statement or representation of a material fact in any appli-
cation for any benefit under this title, 
"(2) at anv time knowingly and willfully makes or causes to be 
made any false statement or representation of a material fact for 
use in determining rights to any such benefit, 
"(3) having knowledge of the occurrence of any event affecting 
(A) his initial or continued right to any such benefit, or (B) 
the initial or continued right to any such benefit of any other 
individual in whose behalf he has applied for or is receiving such 
benefit, conceals or fails to disclose such event with an intent 
fraudulently to secure such benefit either in a greater amount or 
quantity than is due or when no such benefit is authorized, or 
"(4) having made application to receive anj such benefit for 
the use and benefit of another and having received it, knowingly 
and willfully converts such benefit or any part thereof to a use 
other than tor the use and benefit of such other person, 
shall be guilty of a misdemeanor and upon conviction thereof shall 
be fined not more than $1,000 or imprisoned for not more than one 
year, or both. 
(( 
ADMINISTRATION" 
"SEC. 1633. The Secretary may make such administrative and other 
arrangements (including arran^ments for the detennination of blind-
ness and disability under section 1614(^a) (2) and (3) in the same 
manner and subject to the same conditions as provided with respect 
to disability determinations under section 221) as may be necessary 
or appropriate to carry out his functions imder this title. 
((. 
42 u s e 1396. 
Effective date. 
49 Stat. 620; 
81 Stat. 921. 
42 u s e 130S. 
DETERMINATIONS OF MEDICAID ELIGIBILITY 
"SEC. 1634. The Secretary may enter into an agreement with any 
State which wishes to do so under which he will determine eligibility 
for medical assistance in the case of aged, blind, or disabled individ-
uals under such State's plan approvea under title XIX. Any such 
agreement shall provide for payments by the State, for use by the 
Secretary in carrying out the agreement, of an amount equal to one-
half of the cost of carrying out the agreement, but in computing such 
cost with respect to individuals eligiole for benefits under this title, 
the Secretary shall include only those costs which are additional to the 
costs incurred in carrying out this title." 
SEC. 302. The Social Security Act is amended, effective January 1, 
1974, by adding after title V the following new title: 
"TITLE VI—GRANTS TO STATES FOR SERVICES TO THE 
AGED, BLIND, OR DISABLED 
(( 
APPROPRLVTTON 
"SEC. 601. For the purpose of encouraging each State, as far as 
practicable under the conditions in such State, to furnish rehabilitation 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1479 
and other services to help needy individuals who are 65 years of age 
or over, are blind, or are disabled to attain or retain capability for 
self-support or self-care, there is hereby authorized to be appropriated 
for each fiscal year, subject to section 1130, a sum sufficient to carry 
Ante. p. 94S. 
out the purposes of this title. The sums made available under this 
section shall be used for making payments to States which have sub-
mitted, and had approved by the Secretary of Health, Education, and 
Welfare, State plans for services to the aged, blind, or disabled. 
"STATE PLANS FOR SERVICES TO THE AGED, BLIND, OR DISABLED 
"SEC. 602. (a) A State plan for services to the aged, blind, or dis-
abled, must— 
"(1) except to the extent permitted by the Secretary, provide 
that it shall be in effect in all political subdivisions of the State, 
and if administered by them, be mandatory upon them; 
"(2) provide for financial participation by the State; 
"(3) either provide for the establishment or designation of a 
single State agency to administer the plan, or provide for the 
establishment or designation of a single State agency to supervise 
the administration of the plan; 
"(4) provide (A) such methods of administration (including 
methods relating to the establishment and maintenance of per-
sonnel standards on a merit basis, except that the Secretary shall 
exercise no authority with respect to the selection, tenure of office, 
and compensation of any individual employed in accordance with 
such methods) as are found by the Secretary to be necessary for 
the proper and efficient operation of the plan, and (B) for the 
training and effective use of paid subprofessional staff, with par-
ticular emphasis on the full-time or part-time employment of 
' 
persons of low income, as community service aides, in the admin-
istration of the plan and for the use of nonpaid or partially paid 
volunteei-s in a social service volunteer program in providing 
services under the plan and in assisting any advisory committees 
established by the State agency; 
"(5) provide that the State agency will make such reports, 
"
^ 
in such form and containing such information, as the Secretary 
may from time to time require, and comply with such provisions 
as the Secretary may from time to time find necessary to assure 
the correctness and verification of such reports; 
"(6) provide safeguards which permit the use or disclosure 
of information concerning applicants or recipients only (A) to 
public officials who require such information in connection with 
their official duties, or (B) to other persons for purposes directly 
connected with the administration of the State plan; 
*- 
i« 
"(7) provide, if the plan includes services to individuals in 
private or public institutions, for the establishment or designation 
of a State authority or authorities which shall be responsible 
' "•' 
for establishing and maintaining standards for such institutions; 
"(8) provide a description of the services which the State 
* 
agency makes available under the plan including a description 
of the steps taken to assure, in the provision of such services, 
maximum utilization of other agencies providing similar or 
related services; 
"(9) provide that, in determining whether an individual is 
blind, there shall be an examination by a physician skilled in 
the diseases of the eye or by an optometrist, whichever the indi-
vidual may select; 
82-081 O - 73 - 96 
1480 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"(10) include reasonable standards, consistent with the objec-
tives of this title, for determining eligibility for and the extent 
of services under the plan; 
"(11) if the State plan includes services to individuals 65 
years of age or older who are patients in institutions for mental 
diseases— 
"(A) provide for having in effect such agreements or 
other arrangements with State authorities concerned with 
mental diseases, and where appropriate, with such institu-
tions, as may be necessary for carrying out the State plan, 
including arrangements for joint planning and for develop-
ment of alternate methods of care, arrangements providing 
assurance of immediate readmittance to institutions where 
needed for individuals under alternate plans of care, and 
arrangements providing for access to patients and facilities, 
for furnishing information, and for making reports; 
"(B) provide for an individual plan for each such patient 
to assure that the institutional care provided to him is in his 
best interests, including, to that end, assurances that there 
will be initial and periodic review of his medical and other 
needs, that he will be given appropriate medical treatment 
within the institution, and that there will be a periodic 
determination of his need for continued treatment in the 
institution; and 
"(C) provide for the development of alternate plans of 
care, making maximum utilization of available resources, 
for persons receiving services under the State plan who are 
65 years of age or older and who would otherwise need care 
in such institutions; for services referred to in section 
603(a)(1)(A) (i) and (ii) which are appropriate for such 
persons receiving services and for such patients; and for 
methods of administration necessary to assure that the respon-
sibilities of the State agency under the State plan with respect 
to such persons receiving services and such patients will be 
effectively carried out; 
" (12) if the State plan includes services to individuals 65 years 
of age or older who are patients in public institutions for 
mental diseases, show that the State is making satisfactory prog-
ress toward developing and implementing a comprehensive 
mental health program, including provision for utilization of com-
munity mental health centers, nursing homes, and other alterna-
tives to care in public institutions for mental diseases. 
Notwithstanding paragraph (3), if on October 1, 1972, the State 
agency which administered or supervised the administration of the 
42 use 1201. 
plan of such State approved under title X (or so much of the plan of 
Ante, p. 1465. 
g^ich State approved under title XVI as applies to the blind) was dif-
ferent from the State agency which administered or supervised the 
42 use 30 
administration of the plan of such State approved under title I and the 
State agency which administered or supervised the administration of 
42 use 1351. 
the plan of such State approved under title XIV (or so much of the 
plan of such State approved under title XVI as applies to the aged 
and disabled), the State agency which administered or supervised the 
administration of such plan approved under title X (or so much of the 
plan of such State approved under title XVI as applies to the blind) 
may be designated to administer or supervise the administration of the 
portion of the State plan for services to the aged, blind, or disabled 
which relates to blind individuals and a separate State agency may be 
established or designated to administer or supervise the administra-
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1481 
tion of the rest of such plan; and in such case the part of the plan 
which each such agency administers, or the administration of which 
each such agency supervises, shall be regarded as a separate plan for 
purposes of this title. 
"(b) The Secretary shall approve any plan which fulfills the condi-
tions specified in subsection (a), except that he shall not approve any 
plan which imposes, as a condition of eligibility for services under 
the plan— 
"(1) an age requirement of more than sixty-five years; or 
"(2) any residence requirement which excludes any individual 
who resides in the State; or 
"(3) any citizenship requirement which excludes any citizen 
of the United States. 
it PAYMENTS TO STATES 
"SEC. 603. (a) From the sums appropriated therefor, the Secretary 
shall, subject to section 1130, pay to each State which has a plan 
^nte, p. 945. 
approved under this title, for each quarter— 
" (1) in the case of any State whose State plan approved under 
section 602 meets the requirements of subsection (c)(1), an 
amount equal to the sum of the following proportions of the total 
amounts expended during such quarter as found necessary by the 
Secretary of Health, Education, and Welfare for the proper and 
efficient administration of the State plan— 
"(A) 75 per centum of so much of such expenditures as 
are for— 
"(i) services which are prescribed pursuant to sub-
section (c) (1) and are provided (in accordance with 
the next sentence) to applicants for or recipients of 
supplementary security income benefits under title XVI 
^nte, p. ues. 
to help them attain or retain capability for self-support 
or self-care, or 
"(ii) other services, specified by the Secretary, as 
likely to prevent or reduce dependency, so provided to 
such aDplicants or recipients, or 
"^iii) any of the services prescribed pursuant to sub-
section (c) (1), and of the services specified as provided 
in clause (ii), which the Secretary may specify as appro-
priate for individuals who, within such period or periods 
as the Secretary may prescribe^ have been or are likely 
to become applicants for or recipients of supplementary 
security income benefits under title XVI. if such serv-
ices are requested by such individuals and are provided 
to such individuals in accordance with the next sen-
tence, or 
"(iv) the training of personnel employed or preparing 
for employment by the State agency or by the local 
agency administering the plan in the political subdivi-
sion; plus 
"(B) one-half of so much of such expenditures (not 
included under subparagraph (A)) as are for services pro-
vided (in accordance with the next sentence) to applicants for 
or recipients of supplementarv security income benefits under 
title XVI, and to individuals requesting such services who 
(within such period or periods as the Secretary may pre-
scribe) have been or are likely to become applicants for or 
recipients of such benefits; plus 
1482 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
"(C) one-half of the remamder of such expenditures. 
The services referred to in subparagraphs (A) and (B) shall, 
except to the extent specified by the Secretary, include only— 
"(D) services provided hj the staff oi the State agency, or 
of the local agency administering the State plan in the polit-
ical subdivision: Provided, That no funds authorized under 
this title shall be available for services defined as vocational 
rehabilitation services under the Vocational Eehabilitation 
68 Stat. 652. 
Act (i) which are available to individuals in need of them 
29 use 31 note. 
under programs for their rehabilitation carried on under a 
State plan approved under such Act, or (ii) which the State 
agency or agencies administering or supervising the admin-
istration of the State plan approved under such Act are able 
and willing to provide if reimbursed for the cost thereof 
pursuant to agreement under subparagraph (E), if provided 
by such staff, and 
"(E) under conditions which shall be prescribed by the 
Secretary, services which in the judgment of the State agency 
cannot be as economically or as effectively provided by the 
staff of such State or local agency and are not otherwise 
reasonably available to individuals in need of them, and 
which are provided, pursuant to agreement with the State 
agency, by the State health authority or the State agency or 
agencies administering or supervising the administration of 
the State plan for vocational rehabilitation services approved 
under the Vocational Rehabilitation Act or by any other State 
agency which the Secretary may determine to be appropriate 
(whether provided by its staff or by contract with public 
(local) or nonprofit private agencies) ; 
except that services described in clause (ii) of subparagraph (D) 
hereof may be provided only pursuant to agreement with such 
State agency or agencies administering or supervising the admin-
istration of the State plan for vocational rehabilitation services so 
approved. The portion of the amount expended for administration 
of the State plan to which subparagraph (A) applies and the por-
tion thereof to which subparagraphs (B) and (C) apply shall be 
determined in accordance with such methods and procedures as 
may be permitted by the Secretary; and 
"(2) in the case of any State whose State plan approved under 
section 602 does not meet the requirements of subsection (c) (1), 
an amount equal to one-half of the total of the sums expended 
during such quarter as found necessary by the Secretary for the 
proper and efficient administration of the State plan, including 
services referred to in paragraph (1) and provided in accordance 
Avith the provisions of such paragraph. 
" (b) (1) Prior to the beginning of each quarter, the Secretary shall 
estimate the amount to which a State will be entitled under subsection 
(a) for such quarter, such estimates to be based on (A) a report filed 
by the State containing its estimate of the total sum to be expended in 
such quarter in accordance with the provisions of such subsection, 
and stating the amount appropriated or made available by the State 
and its political subdivisions for such expenditures in such quarter, 
and if such amount is less tlian the State's proportionate share of the 
total sum of such estimated expenditures, the source or sources from 
which the difference is expected to be derived, and (B) such other 
investigation as the Secretary may find necessary. 
"(2) The Secretary shall then pay, in such installments as he may 
determine, to the State the amount so estimated, reduced or increased 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1483 
to the extent of any overpayment or underpayment which the Secre-
tary determines was made under this section to such State for any 
prior quarter and with respect to which adjustment has not already 
been made under this subsection. 
"(3) Upon the making of any estimate by the Secretary under 
this subsection, any appropriations available for payments under this 
section shall be deemed obligated. 
"(c) (1) In order for a State to qualify for payments under para-
graph (1) of subsection (a), its State plan approved under section 602 
must provide that the State agency shall make available to applicants 
for and recipients of supplementary security income benefits under 
title XVI at least those services to help them attain or retain capa- 
Ante. p. ues. 
bility for self-support or self-care which are prescribed by the 
Secretary. 
" (2) in the case of any State whose State plan included a provision 
meeting the requirements of paragraph (1), but v^^ith respect to which 
the Secretary finds, after reasonable notice and opportunity for hearing 
to the State agency, administering or supervising the administration 
of such plan, that^— 
"(A) the provision has been so changed that it no longer com-
plies with the requirements of paragraph (1), or 
"(B) in the administration of the plan there is a failure to 
comply substantially with such provision, 
the Secretary shall notify such State agency that further payments will 
not be made to the State under paragraph (1) of subsection (a) until 
he is satisfied that there will no longer be any such failure to comply. 
Until the Secretary is so satisfied further payments with respect to 
,r 
the administration of such State plan shall not be made under para-
graph (1) of subsection (a) but shall instead be made, subject to the 
other provisions of this title, under paragraph (2) of such subsection. 
"(d) Notwithstanding the preceding provisions of this section, the 
amount determined under such provisions for any State for any 
quarter which is attributable to expenditures with respect to indi-
viduals 65 years of age or older who are patients in institutions for 
mental diseases shall be paid only to the extent that the State makes 
a showing satisfactory to the Secretary that total expenditures in the 
State from Federal, State, and local sources for mental health services 
(including payments to or in behalf of individuals with mental health 
problems) under State and local public health and public welfare 
programs for such quarter exceed the average of the total expendi-
tures in the State from such sources for such services under such pro-
grams for each quarter of the fiscal year ending June 30, 1965. For 
purposes of this subsection, expenditures for such sei-vices for each 
quarter in the fiscal year ending June 30,1965, in the case of any State 
shall be determined on the basis of the latest data, satisfactory to the 
Secretary, available to him at the time of the first determination bv 
him under this subsection for such State; and expenditures for such 
services for any quarter beginning after December 31, 1965, in the 
case of any State shall be determined on the basis of the latest data, 
satisfactory to the Secretary, available to him at the time of the 
determination under this subsection for such State for such quarter; 
and determinations so made shall be conclusive for purposes of this 
subsection. 
1484 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
u 
OPERAIION OF STATE PLANS 
"SEC. 604. If the Secretary, after reasonable notice and opportunity 
for hearing to the State agency administering or supervising the 
administration of the State plan approved under this title, finds— 
"(1) that the plan no longer complies with the provisions of 
section 602; or 
"(2) that in the administration of the plan there is a failure 
to comply substantially with any such provision," 
the Secretary shall notify such State agency that further payments 
will not be made to the State (or, in his discretion, that payments will 
be limited to categories under or parts of the State plan not affected 
by such failure), until the Secretary is satisfied that there will no 
longer be any such failure to comply. Until he is so satisfied he shall 
make no further payments to such State (or shall limit payments to 
categories under or parts of the State plan not affected by such 
failure). 
"DEFINITION 
"SEC. 605. For purposes of this title, the term 'services to the aged, 
blind, or disabled' means services (including but not limited to the 
services referred to in section 603(a) (1) (A) and (B)) provided for 
or on behalf of needy individuals who are 65 years of age or older or 
are blind, or are disabled." 
Effective date. 
42 u s e 301, 
1201, 1351. 
64 Stat. 47. 
25 u s e 639. 
REPEAL OF TITLES I . X, AND XIV OF T H E SOCIAL SECURITY ACT 
SEC. 303. (a) Efi'ective January 1,1974, titles I, X, and XIV of the 
Social Security Act are repealed. 
(b) The amendments made by sections 301 and 302 and the repeals 
made by subsection (a) shall not be applicable in the case of Puerto 
Rico, Guam, and the Virgin Islands. 
(c) Section 9 of the Act of April 19, 1950, is repealed effective 
January 1,1974. 
Effective date. 
84 Stat. 2038; 
85 Stat. 810. 
42 u s e 415 
note. 
PROVISION FOR DISREGARDING OP CERTAIN INC03IE I N DETERMINING NEED 
FOR AID TO T H E AGED, BLIND, OR DISABLED FOR ASSISTANCE 
SEC. 304. Effective upon the enactment of this Act, section 1007 of 
the Social Security Amendments of 1969 is amended by striking out 
"and before January 1973"' and inserting in lieu thereof "and before 
January 1974". 
79 Stat. 338. 
42 u s e 401. 
Ante, p. 1465. 
42 u s e 1395. 
ADVANCES FROM OASI TRUST F U N D FOR ADMINISTRATI^-E EXPENSES 
SEC. 305. (a) Section 201(g) (1) (A) of the Social Security Act is 
amended— 
(1) by striking out "this title and title X V I I I " wherever it 
appears and inserting in lieu thereof "this title, title XVI, and 
title X V I I I " ; 
(2) by striking out "costs which should be borne by each of 
the Trust Funds/' and inserting in lieu thereof "costs which 
should be borne by each of the Trust Funds and (with respect 
to title XVI) by the general revenues of the United States"; and 
(3) by striking out "in order to assure that each of the Trust 
Funds bears" and inserting in lieu thereof "in order to assure 
that (after appropriations made pursuant to section 1601, and 
repayment to the Trust Funds from amounts so appropriated) 
86 
STAT.] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1485 
each of the Trust Funds and the general revenues of the United 
States bears". 
(b) (1) Sums appropriated pursuant to section 1601 of the Social 
Security Act shall be utilized from time to time, in amounts certified 
under the second sentence of section 201(g) (1) (A) of such Act, to 
repay the Trust Funds for expenditures made from such Funds in 
any fiscal year under section 201(g) (1) (A) of such Act (as amended 
by subsection (a) of this section) on account of the costs of admin-
istration of title XVI of such Act (as added by section 301 of this Act). 
(2) If the Trust Funds have not theretofore been repaid for 
expenditures made in any fiscal year (as described in paragraph (1)) 
to the extent necessary on account of— 
(A) expenditures made from such Funds prior to the end of 
such fiscal year to the extent that the amount of such expenditures 
exceeded the amount of the expenditures which would have been 
made from such Funds if subsection (a) had not been enacted, 
(B) the additional administrative expenses, if any, resulting 
from the excess expenditures described in subparagraph (A), and 
(C) any loss in interest to such Funds resulting from such excess 
expenditures and such administrative expenses, 
in order to place each such Fund in the same position (at the end of 
such fiscal year) as it would have been in if such excess expenditures 
had not been made, the amendments made by subsection (a) shall cease 
to be effective at the close of the fiscal year following such fiscal year. 
(3) As used in this subsection, the term "Trust Funds" has the 
meaning given it in section 201(g) (1) (A) of the Social Security Act. 
(c) The provisions of this section shall become effective on the date 
of enactment of this Act. 
Ante, 
p. 1465. 
Ante, p. 1484. 
Effective date. 
351. 
p. 1465. 
42 u s e 401. 
Ante, 
p. 406. 
DISREGARDING OF INCOME OF 0A8DI RECIPIENTS I N DETERMINING 
NEED 
FOR PUBLIC ASSISTANCE 
SEC. 306. In addition to the requirements imposed by law as a con-
dition of approval of a State plan to provide aid or assistance in the 
form of money payments to individuals under title I, X, XIV, or XVI 
of the Social Security Act, there is hereby imposed the requirement 
42 use soi, 
(and the plan shall be deemed to require) that, in the case of any ^^^^' ^ 
individual receiving aid or assistance for any month after October 1972, 
or, at the option of the State, September 1972, and before January 
1974 who also receives in such month a monthly insurance benefit under 
title I I of such Act which was increased as a result of the enactment 
of Public Law 92-336, the sum of the aid or assistance received by him 
for such month, plus the monthly insurance benefit received by him in 
such month (not including any part of such benefit which is dis-
regarded under such plan), shall exceed the sum of the aid or assistance 
which would have been received by him for such month under such 
plan as in effect for October 1972, plus the monthly insurance benefit 
which would have been received by him in such month, by an amount 
equal to $4 or (if less) to such increase in his monthly insurance benefit 
under such title I I (whether such excess is brought about by disregard-
ing a portion of such monthly insurance benefit or otherwise). 
TITLE IV—MISCELLANEOUS 
LIMITATION ON FISCAL LIABILITY OF STATES FOR OPTIONAL 
STATE 
SUPPLEMENTATION 
SEC 401. (a) (1) The amount payable to the Secretary by a State 
for any fiscal year pursuant to its agreement or agreements under 
1486 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
Ante, p. 1474. gectioii 1616 of the Social Security Act shall not exceed the non-
Federal share of expenditures as aid or assistance for quarters in 
the calendar year 1972 under the plans of the State approved under 
12J? "351'°^' 
*it^^s I, X, XIV, and XVI of the Social Security Act (as defined in 
Ante, p. 1465. 
subscction (c) of this section). 
(2) Paragraph (1) of this subsection shall only apply with 
respect to that portion of the supplementary payments made by the 
Secretary on behalf of the State under such agreements in any fiscal 
year which does not exceed in the case of any individual the difference 
between— 
(A) 
the adjusted 
payment level under the 
appropriate 
approved plan of such State as in effect for January 1972 (as 
defined in subsection (b) of this section), and 
(B) the benefits under title XVI of the Social Security Act, 
plus income not excluded under section 1612(b) of such Act in 
determining such benefits, paid to such individual in such fiscal 
year, 
and shall not apply with respect to supplementary payments to any 
individual who (i) is not required by section 1616 of such Act to be 
included in any such agreement administered by the Secretary and 
(ii) would have been ineligible (for reasons other than income) for 
^ 
payments under the appropriate approved State plan as in effect 
for January 1972. 
Definitions. 
(\y^ (]^^ YoT purposcs of subsectiou (a), the term "adjusted payment 
level under the appropriate approved plan of a State as in effect for 
January 1972" means the amount of the money payment which an 
individual with no other income would have received under the plan 
of such State approved under title I, X, XIV, or XVI of the Social 
Security Act, as may be appropriate, and in effect for January 1972; 
except that the State may, at its option, increase such payment level 
with respect to any such plan by an amount which does not exceed the 
sum of— 
(A) a payment level modification (as defined in paragraph (2) 
of this subsection) with respect to such plan, and 
(B) the bonus value of food stamps in such State for Janu-
ary 1972 (as defined in paragraph (3) of this subsection). 
(2) For purposes of paragraph (1), the term "payment level modi-
fication" with respect to any State plan means that amount bv which 
a State which for January 1972 made money payments under such 
plan to individuals with no other income which were less than 100 
per centum of its standard of need could have increased such money 
payments without increasing (if it reduced its standard of need under 
such plan so that such increased money payments equaled 100 per 
centum of such standard of need) the non-Federal share of expendi-
tures as aid or assistance for quarters in calendar year 1972 under the 
plans of such State approved under titles I, X, XIV, and XVI of 
the Social Security Act. 
(3) For purposes of paragraph (1), the term "bonus value of food 
stamps in a State for January 1972" (with respect to an individual) 
means— 
(A) the face value of the coupon allotment which would have 
been provided to such an individual under the Food Stamp Act 
of 1964 for January 1972, reduced by 
(B) the charge which such an individual would have paid for 
such coupon allotment, 
if the income of such individual, for purposes of determining the 
charge it would have paid for its coupon allotment, had been equal 
to the adjusted payment level under the State plan (including any 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1487 
payment level modification with respect to the plan adopted pursuant 
to paragraph (2) (but not including any amount under this para-
graph) ). The total face value of food stamps and the cost thereof in 
January 1972 shall be determined in accordance with rules prescribed 
by the Secretary of Agriculture in effect in such month. 
(c) For purposes of this section, the term "non-Federal share 
of expenditures as aid or assistance for quarters in the calendar year 
1972 under the plans of a State approved under titles I, X, XIV, and 
XVI of the Social Security Act" means the difference between— 
(1) the total expenditures in such quarters under such plans 
for aid or assistance (expenditures authorized under section 1119 
of such Act for repairing the home of an individual who was 
receiving aid or assistance under one of such plans (as such 
section was in effect prior to the enactment of this Act)), and 
(2) the total of the amounts determined under sections 3,1003, 
1403, and 1603 of the Social Security Act, under section 1118 of 
such Act, and under section 9 of the Act of April 19, 1950, for 
such State with respect to such expenditures m such quarters. 
TRAXSITIOXAL ADMINISTRATIVE PROVISIONS 
SEC. 402. In order for a State to be eligible for any payments pursu-
ant to title IV, V, XVI, or X I X of the Social Security Act with 
respect to expenditures for any quarter in the fiscal year ending 
June 30,1975, and for the purpose of providing an orderly transition 
from State to Federal administration of the Supplemental Security 
Income Program, such State shall enter into an agreement with the 
Secretary of Health, Education, and Welfare under which the State 
agencies responsible for administering or for supervising the adminis-
tration of the plans approved under titles I, X, XIV, and XVI of the 
Social Security Act will, on behalf of the Secretary, administer all or 
such part or parts of the program established by section 301 of this 
Act, during such portion of the fiscal year ending June 30, 1975, as 
may be provided in such agreement. 
Definition. 
42 u s e 301, 
1201, 1351. 
Ante, p. 1465. 
81 Stat. 894. 
42 u s e 1319. 
42 u s e 303, 
1203, 1353, 1383. 
79 Stat. 423. 
42 u s e 1318. 
Ante, p. 1484. 
42USC601,701, 
1396. 
SAVINGS PROVISION REGARDING CERTAIN EXPENDITURES FOR 
SOCIAL SERVICES 
SEC. 403. In the administration of section 1130 of the Social Security 
Act, the allotment of each State (as determined under subsection (b) 
of such section) for the fiscal year ending June 30,1973, shall (notwith-
standing any provision of snch section 1130) be adjusted so that the 
amount of such allotment for such year consists of the sum of the 
following: 
(1) the amount, not to exceed $50,000,000, payable to the State 
(as determined without regard to such section 1130) with respex?t 
to the total expenditures incurred by the State for services (of 
the type, and under the programs to which the allotment, as 
determined under such subsection (b), is applicable) for the 
calendar quarter commencing July 1,1972, plus 
(2) an amount equal to three-fourths of the amount of the 
allotment of such State (as determined under such subsection 
(b), but without application of the provisions of this section) : 
Pt'&vided, hmvever, That no State shall receive less under this section 
than the amount to which it would have been entitled otherwise 
under section 1130 of the Social Security Act. 
Ante, p. 945. 
148» 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
CHANGE IN EXECUTIVE SCHEDULE 
COMMISSIONER OF SOCIAL SECURITY 
80 Stat. 463. 
SEC. 404. (a) Section 5316 of title 5, United States Code (relating 
to positions at level V of the Executive Schedule), is amended by 
striking out: 
"(51) Commissioner of Social Security, Department of Health, 
Education, and Welfare.". 
Ante, p. 149. 
(jj) Sectiou 5315 of title 5, United States Code (relating to positions 
at level IV of the Executive Schedule), is amended by adding at the 
end thereof the following: 
" (97) Commissioner of Social Security, Department of Health, 
Education, and Welfare.". 
Effective date. 
(c) The amendments made by the preceding provisions of this 
section shall take effect on the first day of the first pay period of the 
Commissioner of Social Security, Department of Health, Education, 
and Welfare, which commences on or after the first day of the month 
which follows the month in which this Act is enacted. 
42 u s e 302. 
42 u s e 1382. 
SEPARATION OF SOCIAL SERVICES NOT REQUIRED 
SEC. 405. (a) Section 2(a) (10) (C) of the Social Security Act is 
amended by inserting "(using whatever internal organizational 
arrangement it finds appropriate for this purpose)" immediately after 
"provide a description of the services (if any) which the State agency 
makes available". 
42 use 1202. 
(^^ Section 1002(a) (13) of such Act is amended by inserting 
"(using whatever internal organizational arrangement it finds appro-
priate for this purpose)" immediately after "provide a description 
of the services (if any) which the State agency makes available". 
42 use 1352. 
(c) Section 1402(a) (12) of such Act is amended by inserting 
"(using whatever internal organizational arrangement it finds appro-
priate for this purpose)" immediately after "provide a description 
of the services (if any) which the State agency makes available". 
(d) Section 1602(a) (10) of such Act is amended by inserting 
"(using whatever internal organizational arrangement it finds appro-
priate for this purpose)" immediately after "provide a description 
of the services (if any) which the State agency makes available". 
MANUALS AND POLICY ISSUANCES NOT REQUIRED WITHOUT CHARGE 
SEC. 406. (a) Section 2(b) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "At the 
option of the State, the plan may provide that manuals and other 
policy issuances will be furnished to persons without charge for the 
reasonable cost of such materials, but such provision shall not be 
required by the Secretary as a condition for the approval of such 
plan under this title." 
(b) Section 1002(b) of such Act is amended by adding immediately 
after the first sentence thereof the following new sentence: "At the 
option of the State, the plan may provide that manuals and other 
policy issuances will be furnished to persons without charge for the 
reasonable cost of such materials, but such provision shall not be 
required by the Secretary as a condition for the approval of such 
plan under this title." 
(c) Section 1402(b) of such Act is amended by adding at the end 
thereof the following new sentence: "At the option of the State, the 
plan may provide that manuals and other policy issuances will be fur-
nished to persons without charge for the reasonable cost of such 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1489 
materials, but such provision shall not be required by the Secretary 
as a condition for the approval of such plan under this title." 
(d) Section 1602(b) of such Act is amended by adding immediately 
42 use i382. 
after the first sentence thereof the following new sentence: "At the 
option of the State, the plan may provide that manuals and other 
policy issuances will be furnished to persons without charge for the 
reasonable cost of such materials, but such provision shall not be 
required by the Secretary as a condition for the approval of such plan 
under this title." 
EFFECTIVE DATE OF FAIR HEARING DECISION 
SEC. 407. (a) Section 2 (a) (4) is amended bj^— 
42 use 302. 
(1) deleting "provide" and inserting in lieu thereof "provide 
(AV', and 
(2) inserting immediately before the semicolon at the end 
thereof the following: ", and (B) that if the State plan is admin-
istered in each of the political subdivisions of the State by a local 
agency and such local agency provides a hearing at which evi-
dence may be presented prior to a hearing before the State agency, 
such local agency may put into effect immediately upon issuance 
its decision upon the matter considered at such hearing". 
(b) Section 1002(a) (4) is amended by— 
42 use 1202. 
(1) deleting "provide" and inserting in lieu thereof "provide 
(A)", and 
(2) inserting immediately before the semicolon at the end 
thereof the following: ", and (B) that if the State plan is 
administered in each of the political subdivisions of the State by 
a local agency and such local agency provides a hearing at which 
evidence may be presented prior to a hearing before the State 
agency, such local agency may put into effect immediately upon 
issuance its decision upon the matter considered at such hearing". 
(c) Section 1402(a) (4) is amended by— 
42 use 1352. 
(1) deleting "provide" and inserting in lieu thereof "provide 
(A)", and 
(2) inserting immediately before the semicolon at the end 
thereof the following: ", and (B) that if the State plan is admin-
istered in each of the political subdivisions of the State by a local 
agency and such local agency provides a hearing at which evidence 
may be presented prior to a hearing before the State agency, such 
local agency may put into effect immediately upon issuance its 
decision upon the matter considered at such hearing". 
(d) Section 1602(a) (4) is amended by— 
(1) deleting "provide" and inserting in lieu thereof "provide 
(A)", and 
(2) inserting immediately before the semicolon at the end 
thereof the following: ", and (B) that if the State plan is admin-
istered in each of the political subdivisions of the State by a 
local agency and such local agency provides a hearing at which 
evidence may be presented prior to a hearing before the State 
agency, such local agency may put into effect immediately upon 
issuance its decision upon the matter considered at such hearing". 
A B S E N C E F R O M STATE F O R M O R E T H A N 90 DAYS 
SEC. 408. (a) Section 6(a) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "At the 
option of a State (if its plan approved under this title so provides). 
42 u s e 306. 
1490 
PUBLIC LAW 92-603-OCT. 30, 1972 
[86 STAT. 
such term need not include money payments to an individual who 
has been absent from such State for a period in excess of 90 con-
secutive days (regardless of whether he has maintained his residence 
in such State during such period) until he has been present in such 
State for 30 consecutive days in the case of such an individual who 
has maintained his residence in such State during such period or 90 
consecutive days in the case of any other such individual." 
42 use 1206. 
(b) Section 1006 of such Act is amended by adding at the end 
thereof the following new sentence: "At the option of a State (if its 
plan approved under this title so provides), such term need not 
mclude money payments to an individual who has been absent from 
such State for a period in excess of 90 consecutive days (regardless 
of whether he has maintained his residence in such State during such 
period) until he has been present in such State for 30 consecutive 
days in the case of such an individual who has maintained his resi-
dence in such State during such period or 90 consecutive days in 
the case of any other such individual." 
42 use 1355. 
(c) Sectiou 1405 of such Act is amended hj adding at the end 
thereof the following new sentence: "At the option of a State (if its 
plan approved under this title so provides), such term need not 
include money payments to an individual who has been absent from 
such State for a period in excess of ninety consecutive days (regard-
less of whether he has maintained his residence in such State during 
such period) until he has been present in such State for thirty con-
secutive days in the case of such an individual who has maintained 
his residence in such State during such period or ninety consecutive 
days in the case of any other such individual." 
42 use 1385. 
"((i) Section 1605(a) of such Act is amended by adding at the end 
thereof the following new sentence: "At the option of a State (if its 
plan approved under this title so provides). such term need not include 
money payments to an individual who has been absent from such State 
for a period in excess of ninety consecutive days (regardless of whether 
he has maintained his residence in such State during such period) 
until he has been present in such State for thirty consecutive days in 
the case of such an individual who has maintained his residence in 
such State during such period or ninety consecutive days in the case 
of any other such individual." 
RENT PAYMENTS TO PUBLIC HOUSING AGENCY 
Ante. p. 1489. 
SEC. 409. (a) Section 6(a) of the Social Security Act (as amended 
by section 554 (a) of this Act) is further amended by— 
(1) striking out "such term" in the last sentence thereof and 
inserting in lieu thereof "such term (i)", and 
(2) adding immediately before the period at the end of such 
sentence the following: ", and (ii) may include rent payments 
made directly to a public housing agency on behalf of a recipient 
or a group or groups of recipients of assistance under such plan". 
*"'"•''• 
(b) Section 1006 of such Act (as amended by section 554(b) of this 
Act) is further amended by— 
(1) striking out "such term" in the last sentence thereof and 
inserting in lieu thereof "such term (i)", and 
(2) adding immediately before the period at the end of such 
sentence the following: ", and (ii) may include rent payments 
made directly to a public housing agency on behalf of a recipient 
or a group or groups of recipients of aid under such plan". 
86 STAT. ] 
PUBLIC LAW 92-603-OCT. 30, 1972 
1491 
(c) Section 1405 of such Act (as amended by section 554(c) of this 
Act) is further amended by— 
(1) striking out "such term'' in the last sentence thereof and 
inserting in lieu thereof "such term (i)", and 
(2) adding immediately before the period at the end of such 
sentence the following: ", and (ii) may include rent payments 
made directly to a public housing agency on behalf of a recipient 
or a group or groups of recipients of aid under such plan". 
(d) Section 1605(a) of such Act (as amended by section 554(d) of 
this Act) is further amended by— 
(1) striking out "such term" in the last sentence thereof and 
inserting in lieu thereof "such term (i)", and 
(2) adding immediately before the period at the end of such 
sentence the following,: ", and (ii) may include rent payments 
made directly to a public housing agency on behalf of a recipient 
or a group or groups of recipients of aid under such plan". 
Ante, p. 1490. 
STATEWIDENESS NOT REQUIRED FOR SERVICES 
SEC. 410. (a) Section 2(a) of the Social Security Act is amended 
by inserting "except to the extent permitted by the Secretary with 
respect to services," before "provide" at the beginning of paragraph 
(1). 
(b) Section 1002(a) of such Act is amended by inserting "except to 
the extent permitted by the Secretary with respect to services," before 
"provide" at the beginning of clause (1). 
(c) Section 1402(a) of such Act is amended by inserting "except 
to the extent permitted by the Secretary with respect to services," 
before "provide" at the beginning of,clause (1). 
(d) Section 1602(a) of such Act is amended by inserting "except 
to the extent permitted by the Secretary with respect to services," 
before "provide" at the beginning of paragraph (1). 
42 u s e 302. 
42 u s e 1202. 
42 u s e 1352. 
42 u s e 1382. 
PROHIBITION AGAINST PARTICIPATION I N FOOD STAMP OR SURPLUS COM-
MODITIES PROGRAM BY PERSONS ELIGIBLE TO PARTICIPATE I N EMPLOY-
MENT OR ASSISTANCE PROGRAMS 
SEC. 411. (a) Effective January 1, 1974, section 3(e) of the Food 
Stamp Act of 1964 is amended by adding at the end thereof the fol-
lowing new sentence: "No person who is eligible (or upon application 
would be eligible) to receive supplemental security income benefits 
under title X V l of such Act shall be considered to be a member of a 
household or an elderlv person for purposes of this Act." 
(b) Section 3(h) of such Act is amended to read as follows: 
"(n) The term 'State agency', with respect to any State, means the 
agency of State government which is designated by the Secretary for 
purposes of carrying out this Act in such State." 
(c) Section 10(c) of such Act is amended by striking out the first 
sentence. 
(d) Clause (2) of the second sentence of section 10(e) of such Act 
is amended by striking out "used by them in the certification of appli-
cants for benefits under the federally aided public assistance pro-
grams" and inserting in lieu thereof the following: "prescribed by the 
Secretary in the regulations issued pursuant to this Act". 
(e) Section 10(e) of such Act is further amended by striking out 
the third sentence. 
Effective date. 
84 Stat. 2048. 
7 u s e 2012. 
78 Stat. 703. 
84 Stat. 2051. 
7 u s e 2019. 
1492 
PUBLIC LAW 92-603--OCT. 30, 1972 
[86 STAT. 
84 Stat. 2052. 
7 u s e 2023. 
68 Stat. 458; 
84 Stat. 199. 
7 u s e 1431. 
Effective date. 
(f) Section 14 of such Act is amended by striking out subsection (e). 
(g) Effective January 1,1974, section 416 of the Act of October 31, 
1949, is amended by adding at the end thereof the following new 
sentence: "No person who is eligible (or upon application would be 
eligible) to receive supplemental security income under title XVI of 
such Act shall be eligible to participate in any program conducted 
under this section (other than nonprofit child feeding programs or 
programs under which commodities are distributed on an emergency 
or temporary basis and eligibility for participation therein is not based 
upon the income or resources of the individual or family)." 
(h) Except as otherwise provided in this section, the amendments 
made by this section shall take effect on January 1, 1973. 
Effective date. 
42 u s e 620. 
CHILD WELFARE SERVICES 
SEC. 412. Effective with respect to fiscal years beginning after 
June 30, 1972, section 420 of the Social Security Act is amended by 
striking out "$55,000,000 for the fiscal year ending June 30, 1968, 
$100,000,000 for the fiscal year ending June 30,1969, and $110,000,000 
for each fiscal year thereafter" and inserting in lieu thereof 
"$196,000,000 for the fiscal year ending June 30, 1973, $211,000,000 
for the fiscal year ending June 30, 1974, $226,000,000 for the fiscal 
year ending June 30, 1975, $246,000,000 for the fiscal year ending 
June 30, 1976, and $266,000,000 for each fiscal year thereafter". 
42 u s e 302. 
42 u s e 1202. 
42 u s e 1352. 
42 u s e 1382. 
SAFEGUARDING INFORMATION 
SEC. 413. (a) Section 2(a) (7) of the Social Security Act is amended 
to read as follows: 
"(7) provide safeguards which permit the use or disclosure of 
information concerning applicants or recipients only (A) to 
public officials who require such information in connection with 
their official duties, or (B) to other persons for purposes directly 
connected with the administration of the State plan;". 
(b) Section 1002(a) (9) of such Act is amended to read as follows: 
"(9) provide safeguards which permit the use or disclosure of 
information concerning applicants or recipients only (A) to 
public officials who require such information in connection with, 
their official duties, or (B) to other persons for purposes directly 
connected with the administration of the State plan;". 
(c) Section 1402(a) (9) of such Act is amended to read as follows: 
"(9) provide safeguards which permit the use or disclosure 
of information concerning applicants or recipients only (A) to 
public officials who require such information in connection with 
their official duties, or (B) to other persons for purposes directly 
connected with the administration of the State plan;". 
(d) Section 1602(a) (7) of such Act is amended to read as follows: 
"(7) provide safeguards which permit the use or disclosure 
of information concerning applicants or recipients only (A) to 
public officials who require such information in connection with 
their official duties, or (B) to other persons for purposes directly 
connected with the administration of the State plan;". 
42 u s e 602. 
RECIPIENTS OF ASSISTANCE FOR THE AGED, BLIND, AND DISABLED INELIGIBLE 
SEC. 414. (a) Section 402(a) of the Social Security Act is amended 
(1) by striking out the period at the end thereof and inserting in lieu 
86 STAT. ] 
PUBLIC LAW 92-605-OCT. 31, 1972 
1493 
of such period "; and", and (2) by adding at the end thereof the 
following new clause: "(24) if an individual is receiving benefits 
under title XVI, then, for the period for which such benefits are 
received, such individual shall not be regarded as a member of a 
family for purposes of determining the amount of the benefits of the 
family under this title and his income and resources shall not be 
counted as income and resources of a family under this title." 
(b) The amendments made by subsection (a) shall be effective on 
and after January 1, 1973. 
Approved October 30, 1972. 
Ante, p. 1465. 
Effective date. 
Public Law 92-604 
AN ACT 
To authorize appropriations to carry out jellyfisli control programs uiitil tlie 
close of fiscal year 1977. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 3 of 
the Act entitled "An Act to provide for the control or elimination of 
jellyfish and other such pests in the coastal waters of the United States, 
and for other purposes", approved November 2,1966 (16 U.S.C. 1203), 
is amended by striking out "and" after "June 30,1969,"; and by strik-
ing out the period at the end thereof and inserting in lieu thereof the 
following: ", and $400,000 for each of the fiscal years ending June 30, 
1974, June 30,1975, June 30,1976, and June 30,1977.". 
Approved October 31, 1972. 
October 31, 1972 
[H. R. 16074] 
Jellyfish con-
trol. 
Appropriation. 
80 Stat. 1149; 
84 Stat. 922. 
Public Law 92-605 
AN ACT 
To declare a portion of the Delaware River in Philadelphia County, 
Pennsylvania, nonnavigable. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled. That portion of the 
Delaware River in Philadelphia County, Commonwealth of Pennsyl-
vania, lying between all that certain lot or piece of ground situate 
in the second and fifth wards of the city of Philadelphia described as 
follows: 
Beginning at a point on the easterly side of Delaware Avenue (var-
iable width) said side being the bulkhead line of the Delaware River 
(approved by the Secretary of War on September 10, 1940), at the 
distance of 1,833,652 feet from an angle point on the easterly side of 
said Delaware Avenue south of Washington Avenue; 
thence extending along the easterly side of said Delaware Ave-
nue the following courses and distances, (1) north 0 degree 45 
minutes 33.2 seconds west 2,524.698 feet to a point; (2) north 9 
degrees 36 minutes 25 seconds east, 2,168.160 feet to a point; (3) 
north 13 degrees 26 minutes 45.8 seconds east, 2,039.270 feet to a 
point; (4) north 20 degrees 12 minutes 52.4 seconds east, 35.180 
feet to an angle point in Delaware Avenue; 
thence continuing north 20 degrees 12 minutes 52.4 seconds 
east along the said bulkhead line, the distance of 574.970 feet to 
a point on the south house line of Callowhill Street produced; 
thence extending along the south house line of Callowhill 
October 31, 1972 
[S. 1971] 
Delaware River, 
Pa. 
Nonnavigable 
portion, declara-
Uon.