US (United States) Code. Title 42. Chapter 7: Social Security

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # The Public Health and Welfare

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REFERENCES IN TEXT

Section 13515(b) of the Omnibus Budget Reconciliation Act of

1993, referred to in subsecs. (a)(2)(B)(ii)(I), (c)(2)(A)(i), and

(i)(1)(B), is section 13515(b) of Pub. L. 103-66, which is set out

as a note under section 1395u of this title.

Section 6105(b) of the Omnibus Budget Reconciliation Act of 1989,

referred to in subsec. (a)(2)(D)(ii), (iii), is section 6105(b) of

Pub. L. 101-239, which is set out as a note under section 1395m of

this title.

Section 4048(b) of the Omnibus Budget Reconciliation Act of 1987,

referred to in subsec. (b)(2)(B), is section 4048(b) of Pub. L.

100-203, which is set out as a note under section 1395u of this

title.

Section 13514(a) of the Omnibus Budget Reconciliation Act of

1993, referred to in subsec. (c)(2)(F), is section 13514(a) of Pub.

L. 103-66, which amended subsec. (b)(3) of this section. See 1993

Amendment note below.

The Balanced Budget Act of 1997, referred to in subsec.

(d)(1)(C), is Pub. L. 105-33, Aug. 5, 1997, 111 Stat. 251. Chapter

1 of subtitle F of title IV of the Act is chapter 1 (Secs.

4501-4513) of subtitle F of title IV of Pub. L. 105-33, which

amended this section and sections 1395a, 1395k, 1395l, 1395u,

1395x, 1395y, 1395cc, and 1395yy of this title and enacted

provisions set out as notes under this section and sections 1395a,

1395k, 1395l, 1395x, and 1395ww of this title. For complete

classification of this Act to the Code, see Tables.

Part C of this subchapter, referred to in subsec. (f)(4)(B), is

classified to section 1395w-21 et seq. of this title.

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AMENDMENTS

2000 - Subsec. (j)(3). Pub. L. 106-554 inserted "(13)," after

"(4),".

1999 - Subsec. (d)(1)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title

II, Sec. 211(a)(3)(A)(i)], inserted "(for years before 2001) and,

for years beginning with 2001, multiplied by the update

(established under paragraph (4)) for the year involved" before

period at end.

Subsec. (d)(1)(E). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(a)(2)(A)], amended heading and text of subpar. (E)

generally. Prior to amendment, text read as follows: "The Secretary

shall cause to have published in the Federal Register, during the

last 15 days of October of -

"(i) 1991, the conversion factor which will apply to

physicians' services for 1992, and the update determined under

paragraph (3) for 1992; and

"(ii) each succeeding year, the conversion factor which will

apply to physicians' services for the following year and the

update determined under paragraph (3) for such year."

Subsec. (d)(3). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(a)(1)(A)(i)], inserted "for 1999 and 2000" after "Update" in

heading.

Subsec. (d)(3)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(a)(1)(A)(ii)], substituted "1999 and 2000" for "a year

beginning with 1999" in introductory provisions.

Subsec. (d)(3)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(a)(1)(A)(iii)], inserted "and paragraph (4)" after "For

purposes of this paragraph" in introductory provisions.

Subsec. (d)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(a)(1)(B)], added par. (4).

Subsec. (f)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(b)(1)], amended heading and text of par. (1) generally. Prior

to amendment, text read as follows: "The Secretary shall cause to

have published in the Federal Register the sustainable growth rate

for each fiscal year beginning with fiscal year 1998. Such

publication shall occur by not later than August 1 before each

fiscal year, except that such rate for fiscal year 1998 shall be

published not later than November 1, 1997."

Subsec. (f)(2). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(b)(2)(A)], substituted "fiscal year 1998 and ending with fiscal

year 2000) and a year beginning with 2000" for "fiscal year 1998)"

in introductory provisions.

Subsec. (f)(2)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(b)(2)(B)], substituted "applicable period" for "fiscal

year".

Subsec. (f)(2)(B), (C). Pub. L. 106-113, Sec. 1000(a)(6) [title

II, Sec. 211(b)(2)(B)], substituted "applicable period" for "fiscal

year" in two places.

Subsec. (f)(2)(D). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(a)(3)(A)(ii), (b)(2)(B)], substituted "applicable period"

for "fiscal year" in two places and "subsection (d)(3)(B) or

(d)(4)(B) of this section, as the case may be" for "subsection

(d)(3)(B) of this section".

Subsec. (f)(3). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(b)(5)], added par. (3). Former par. (3) redesignated (4).

Subsec. (f)(3)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 211(b)(3)], added subpar. (C).

Subsec. (f)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

211(b)(4)], redesignated par. (3) as (4).

Subsec. (j)(3). Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec.

321(k)(5)], substituted "section 1395x(oo)(2) of this title)" for

"section 1395x(oo)(2) of this title,", "(B)," for "(B),", and ",

and (15)" for "and (15)".

1997 - Subsec. (b)(1). Pub. L. 105-33, Sec. 4644(d), substituted

"Before November 1 of the preceding year, for each year beginning

with 1998" for "Before January 1 of each year beginning with 1992"

in introductory provisions.

Subsec. (c)(2)(B)(iii). Pub. L. 105-33, Sec. 4022(b)(2)(C),

substituted "Medicare Payment Advisory Commission" for "Physician

Payment Review Commission".

Subsec. (c)(2)(C)(ii). Pub. L. 105-33, Sec. 4505(b)(1)(A), which

directed an amendment striking the comma at the end of cl. (ii) and

inserting a period and the following: "For 1999, such number of

units shall be determined based 75 percent on such product and

based 25 percent on the relative practice expense resources

involved in furnishing the service. For 2000, such number of units

shall be determined based 50 percent on such product and based 50

percent on such relative practice expense resources. For 2001, such

number of units shall be determined based 25 percent on such

product and based 75 percent on such relative practice expense

resources. For a subsequent year, such number of units shall be

determined based entirely on such relative practice expense

resources.", was executed by making the insertion at end of cl.

(ii) to reflect the probable intent of Congress, because cl. (ii)

ended with a period rather than a comma.

Pub. L. 105-33, Sec. 4505(a)(1), substituted "1999" for "1998" in

two places.

Subsec. (c)(2)(C)(iii). Pub. L. 105-33, Sec. 4505(f)(1)(A),

inserted "for the service for years before 2000" before "equal" in

introductory provisions, substituted comma for period at end of

subcl. (II), and inserted concluding provisions.

Subsec. (c)(2)(G). Pub. L. 105-33, Sec. 4505(e), added subpar.

(G).

Subsec. (c)(3)(C)(ii). Pub. L. 105-33, Sec. 4505(b)(2),

substituted "2002" for "1999" in introductory provisions.

Pub. L. 105-33, Sec. 4505(a)(2), substituted "1999" for "1998" in

introductory provisions.

Subsec. (c)(3)(C)(iii). Pub. L. 105-33, Sec. 4505(f)(1)(B),

substituted "For years before 1999, the malpractice" for "The

malpractice" in introductory provisions.

Subsec. (d)(1)(A). Pub. L. 105-33, Sec. 4501(b)(1), (2), struck

out "(or factors)" after "conversion factor" in two places and

struck out "or updates" after "update".

Subsec. (d)(1)(C). Pub. L. 105-33, Sec. 4504(a)(1), substituted

"Except as provided in subparagraph (D), the single conversion

factor" for "The single conversion factor".

Pub. L. 105-33, Sec. 4501(a)(2), added subpar. (C). Former

subpar. (C) redesignated (D).

Subsec. (d)(1)(D). Pub. L. 105-33, Sec. 4504(a)(3), added subpar.

(D). Former subpar. (D) redesignated (E).

Pub. L. 105-33, Sec. 4501(b)(1), (3), struck out "(or updates)"

after "update" in two places and struck out "(or factors)" after

"conversion factor" in cl. (ii).

Pub. L. 105-33, Sec. 4501(a)(1), redesignated subpar. (C) as (D).

Subsec. (d)(1)(E). Pub. L. 105-33, Sec. 4504(a)(2), redesignated

subpar. (D) as (E).

Subsec. (d)(2). Pub. L. 105-33, Sec. 4502(b), struck out heading

and text of par. (2) which related to recommendation of update.

Subsec. (d)(2)(F). Pub. L. 105-33, Sec. 4022(b)(1)(B)(i), struck

out heading and text of subpar. (F). Text read as follows: "The

Physician Payment Review Commission shall review the report

submitted under subparagraph (A) in a year and shall submit to the

Congress, by not later than May 15 of the year, a report including

its recommendations respecting the update (or updates) in the

conversion factor (or factors) for the following year."

Subsec. (d)(3). Pub. L. 105-33, Sec. 4502(a)(1), amended heading

and text generally. Prior to amendment, text related to updates of

conversion factor based on index and made provision for adjustments

in update.

Subsec. (f). Pub. L. 105-33, Sec. 4503(b), amended subsec.

heading and heading and text of par. (1) generally. Prior to

amendment, par. (1) related to process for establishing medicare

volume performance standard rates of increase.

Subsec. (f)(1)(B). Pub. L. 105-33, Sec. 4022(b)(2)(B)(ii), struck

out heading and text of subpar. (B). Text read as follows: "The

Physician Payment Review Commission shall review the recommendation

transmitted during a year under subparagraph (A) and shall make its

recommendation to Congress, by not later than May 15 of the year,

respecting the performance standard rates of increase for the

fiscal year beginning in that year."

Subsec. (f)(2). Pub. L. 105-33, Sec. 4503(a), added par. (2) and

struck out heading and text of former par. (2) which related to

specification of performance standard rates of increase for

physician services for fiscal years beginning in 1991.

Subsec. (f)(3). Pub. L. 105-33, Sec. 4503(a), added par. (3) and

struck out heading and text of former par. (3). Text read as

follows: "The Secretary shall establish procedures for providing,

on a quarterly basis to the the Congressional Budget Office, the

Congressional Research Service, the Committees on Ways and Means

and Energy and Commerce of the House of Representatives, and the

Committee on Finance of the Senate, information on compliance with

performance standard rates of increase established under this

subsection."

Pub. L. 105-33, Sec. 4022(b)(2)(B)(iii), struck out "Physician

Payment Review Commission," before "the Congressional Budget

Office".

Subsec. (f)(4), (5). Pub. L. 105-33, Sec. 4503(a), struck out

heading and text of par. (4) which related to separate

group-specific performance standard rates of increase and par. (5)

which defined "physicians' services" and "HMO enrollee".

Subsec. (g)(3)(A). Pub. L. 105-33, Sec. 4714(b)(2), inserted

before period at end "and the provisions of section 1396a(n)(3)(A)

of this title apply to further limit permissible charges under this

section".

Subsec. (g)(6)(C), (7)(C). Pub. L. 105-33, Sec. 4022(b)(2)(C),

substituted "Medicare Payment Advisory Commission" for "Physician

Payment Review Commission".

Subsec. (j)(1). Pub. L. 105-33, Sec. 4501(b)(4), substituted "For

services furnished before January 1, 1998, the term" for "The

term".

Subsec. (j)(3). Pub. L. 105-33, Sec. 4106(b), substituted "(4),

(14)" for "(4) and (14)" and inserted "and (15)" after

"1395x(nn)(2) of this title)".

Pub. L. 105-33, Sec. 4105(a)(2), inserted "(2)(S)," before "(3)".

Pub. L. 105-33, Sec. 4103(d), inserted "(2)(P) (with respect to

services described in subparagraphs (A) and (C) of section

1395x(oo)(2) of this title," after "(2)(G)".

Pub. L. 105-33, Secs. 4102(d), 4104(d), inserted "(2)(R) (with

respect to services described in subparagraphs (B) , (C), and (D)

of section 1395x(pp)(1) of this title)," before "(3)" and

substituted "(4) and (14) (with respect to services described in

section 1395x(nn)(2) of this title)" for "and (4)".

1994 - Subsec. (a)(2)(D)(iii). Pub. L. 103-432, Sec. 126(b)(6),

struck out "that are subject to section 6105(b) of the Omnibus

Budget Reconciliation Act of 1989" after "nuclear medicine

services" and substituted "provided under section 6105(b) of the

Omnibus Budget Reconciliation Act of 1989" for "provided under such

section".

Subsec. (c)(2)(C)(ii). Pub. L. 103-432, Sec. 121(b)(1), inserted

"for the service for years before 1998" before "equal to" in

introductory provisions, substituted comma for period at end of

subcl. (II), and inserted "and for years beginning with 1998 based

on the relative practice expense resources involved in furnishing

the service." as closing provisions.

Subsec. (c)(3)(C)(ii). Pub. L. 103-432, Sec. 121(b)(2),

substituted "For years before 1998, the practice" for "The

practice".

Subsec. (c)(4). Pub. L. 103-432, Sec. 126(g)(6), made technical

amendment to directory language of Pub. L. 101-508, Sec.

4118(f)(1)(D). See 1990 Amendment note below.

Subsec. (e)(1)(C). Pub. L. 103-432, Sec. 126(g)(5), inserted

"date of the" before "last previous adjustment".

Pub. L. 103-432, Sec. 122(a), substituted "shall, in consultation

with appropriate representatives of physicians, review" for "shall

review".

Subsec. (e)(1)(D). Pub. L. 103-432, Sec. 122(b), added subpar.

(D).

Subsec. (f)(2)(A)(i). Pub. L. 103-432, Sec. 126(g)(7), made

technical amendment to directory language of Pub. L. 101-508, Sec.

4118(f)(1)(N)(ii). See 1990 Amendment note below.

Subsec. (f)(2)(C). Pub. L. 103-432, Sec. 126(g)(2)(B), inserted

heading.

Subsec. (g)(1). Pub. L. 103-432, Sec. 123(a)(1), amended heading

and text of par. (1) generally. Prior to amendment, text read as

follows: "If a nonparticipating physician or nonparticipating

supplier or other person (as defined in section 1395u(i)(2) of this

title) knowingly and willfully bills on a repeated basis for

physicians' services (including services which the Secretary

excludes pursuant to subsection (j)(3) of this section, furnished

with respect to an individual enrolled under this part on or after

January 1, 1991) an actual charge in excess of the limiting charge

described in paragraph (2) and for which payment is not made on an

assignment-related basis under this part, the Secretary may apply

sanctions against such physician, supplier, or other person in

accordance with section 1395u(j)(2) of this title. In applying this

subparagraph, any reference in such section to a physician is

deemed also to include a reference to a supplier or other person

under this subparagraph."

Subsec. (g)(3)(B). Pub. L. 103-432, Sec. 123(a)(2), inserted

after first sentence "No person is liable for payment of any

amounts billed for such a service in violation of the previous

sentence." and in last sentence substituted "first sentence" for

"previous sentence".

Subsec. (g)(6)(B). Pub. L. 103-432, Sec. 123(d), inserted

"information on the extent to which actual charges exceed limiting

charges, the number and types of services involved, and the average

amount of excess charges and information" after "report to the

Congress".

Subsec. (i)(3). Pub. L. 103-432, Sec. 126(g)(10)(A), struck out

space before the period at end.

1993 - Subsec. (a)(2)(B)(ii)(I). Pub. L. 103-66, Sec.

13515(c)(1), inserted "and under section 13515(b) of the Omnibus

Budget Reconciliation Act of 1993" after "subsection (c)(2)(F)(ii)

of this section".

Pub. L. 103-66, Sec. 13514(c)(1), inserted "and as adjusted under

subsection (c)(2)(F)(ii) of this section" after "for 1994".

Subsec. (a)(3). Pub. L. 103-66, Sec. 13517(a)(1), in heading

inserted "and suppliers" after "physicians" and in text inserted

"or a nonparticipating supplier or other person" after

"nonparticipating physician" and inserted at end "In the case of

physicians' services (including services which the Secretary

excludes pursuant to subsection (j)(3) of this section) of a

nonparticipating physician, supplier, or other person for which

payment is made under this part on a basis other than the fee

schedule amount, the payment shall be based on 95 percent of the

payment basis for such services furnished by a participating

physician, supplier, or other person."

Subsec. (a)(4). Pub. L. 103-66, Sec. 13516(a)(1), added par. (4).

Pub. L. 103-66, Sec. 13515(a)(1), struck out heading and text of

par. (4). Text read as follows: "In the case of physicians'

services furnished by a physician before the end of the physician's

first full calendar year of furnishing services for which payment

may be made under this part, and during each of the 3 succeeding

years, the fee schedule amount to be applied shall be 80 percent,

85 percent, 90 percent, and 95 percent, respectively, of the fee

schedule amount applicable to physicians who are not subject to

this paragraph. The preceding sentence shall not apply to primary

care services or services furnished in a rural area (as defined in

section 1395ww(d)(2) of this title) that is designated under

section 249(a)(1)(A) of this title as a health manpower shortage

area."

Subsec. (b)(3). Pub. L. 103-66, Sec. 13514(a), amended heading

and text of par. (3) generally. Prior to amendment, text read as

follows: "If payment is made under this part for a visit to a

physician or consultation with a physician and, as part of or in

conjunction with the visit or consultation there is an

electrocardiogram performed or ordered to be performed, no payment

may be made under this part with respect to the interpretation of

the electrocardiogram and no physician may bill an individual

enrolled under this part separately for such an interpretation. If

a physician knowingly and willfully bills one or more individuals

in violation of the previous sentence, the Secretary may apply

sanctions against the physician or entity in accordance with

section 1395u(j)(2) of this title."

Subsec. (c)(2)(A)(i). Pub. L. 103-66, Sec. 13515(c)(2), inserted

before period at end "and section 13515(b) of the Omnibus Budget

Reconciliation Act of 1993".

Pub. L. 103-66, Sec. 13514(c)(2), inserted at end "Such relative

values are subject to adjustment under subparagraph (F)(i)."

Subsec. (c)(2)(E). Pub. L. 103-66, Sec. 13513, added subpar. (E).

Subsec. (c)(2)(F). Pub. L. 103-66, Sec. 13514(b), added subpar.

(F).

Subsec. (d)(3)(A)(i). Pub. L. 103-66, Sec. 13511(a)(1)(A),

substituted "clauses (iii) through (v)" for "clause (iii)".

Subsec. (d)(3)(A)(iv) to (vi). Pub. L. 103-66, Sec.

13511(a)(1)(B), added cls. (iv) to (vi).

Subsec. (d)(3)(B)(ii). Pub. L. 103-66, Sec. 13512(b), substituted

"1994" for "1994 or 1995" in subcl. (II) and "5" for "3" in subcl.

(III).

Subsec. (f)(2)(B). Pub. L. 103-66, Sec. 13512(a), added cls.

(iii) to (v) and struck out former cl. (iii) which read as follows:

"for each succeeding year is 2 percentage points."

Subsec. (g)(1). Pub. L. 103-66, Sec. 13517(a)(2)(C), (D),

inserted ", supplier, or other person" after "such physician" and

inserted at end "In applying this subparagraph, any reference in

such section to a physician is deemed also to include a reference

to a supplier or other person under this subparagraph."

Pub. L. 103-66, Sec. 13517(a)(2)(B), which directed insertion of

"including services which the Secretary excludes pursuant to

subsection (j)(3) of this section," after "physician's services (",

was executed by making the insertion after "physicians' services ("

to reflect the probable intent of Congress.

Pub. L. 103-66, Sec. 13517(a)(2)(A), inserted "or

nonparticipating supplier or other person (as defined in section

1395u(i)(2) of this title)" after "nonparticipating physician".

Subsec. (g)(2)(C). Pub. L. 103-66, Sec. 13517(a)(3), inserted "or

for nonparticipating suppliers or other persons" after

"nonparticipating physicians".

Subsec. (g)(2)(D). Pub. L. 103-66, Sec. 13517(a)(4), inserted

"(or, if payment under this part is made on a basis other than the

fee schedule under this section, 95 percent of the other payment

basis)" after "subsection (a) of this section".

Subsec. (h). Pub. L. 103-66, Sec. 13517(a)(5), inserted "or

nonparticipating supplier or other person furnishing physicians'

services (as defined in subsection (j)(3) of this section)" after

"each physician", inserted ", supplier, or other person" after "by

the physician", and inserted ", suppliers, and other persons" after

"notices to physicians".

Subsec. (i)(1)(B). Pub. L. 103-66, Sec. 13515(c)(3), inserted

"and section 13515(b) of the Omnibus Budget Reconciliation Act of

1993" after "subsection (c)(2)(F) of this section".

Pub. L. 103-66, Sec. 13514(c)(3), inserted at end "including

adjustments under subsection (c)(2)(F) of this section,".

Subsec. (j)(1). Pub. L. 103-66, Sec. 13511(a)(2), substituted

"Secretary and including anesthesia services), primary care

services (as defined in section 1395u(i)(4) of this title)," for

"Secretary)".

Subsec. (j)(3). Pub. L. 103-66, Sec. 13518(a), inserted "(2)(G),"

after "(2)(D),".

Pub. L. 103-66, Sec. 13517(a)(6), inserted ", except for purposes

of subsections (a)(3), (g), and (h) of this section" after "tests

and".

1990 - Subsec. (a)(1). Pub. L. 101-508, Sec. 4104(b)(2), struck

out "or 1395m(f)" after "section 1395m(b)" in introductory

provisions.

Subsec. (a)(2)(C). Pub. L. 101-508, Sec. 4102(b), inserted "and

radiology" after "Special rule for anesthesia" in heading and

inserted at end "With respect to radiology services, '109 percent'

and '9 percent' shall be substituted for '115 percent' and '15

percent', respectively, in subparagraph (A)(ii)."

Subsec. (a)(2)(D)(ii). Pub. L. 101-508, Sec. 4102(g)(2)(A),

inserted ", but excluding nuclear medicine services that are

subject to section 6105(b) of the Omnibus Budget Reconciliation Act

of 1989" after "section 1395m(b)(6) of this title)".

Subsec. (a)(2)(D)(iii). Pub. L. 101-508, Sec. 4102(g)(2)(B),

added cl. (iii).

Subsec. (a)(4). Pub. L. 101-508, Sec. 4106(b)(1), added par. (4).

Subsec. (b)(3). Pub. L. 101-508, Sec. 4109(a), added par. (3).

Subsec. (c)(1)(B). Pub. L. 101-508, Sec. 4118(f)(1)(A), struck

out at end "In this subparagraph, the term 'practice expenses'

includes all expenses for furnishing physicians' services,

excluding malpractice expenses, physician compensation, and other

physician fringe benefits."

Subsec. (c)(3). Pub. L. 101-508, Sec. 4118(f)(1)(C), redesignated

par. (3), relating to ancillary policies, as (4).

Subsec. (c)(3)(C)(ii)(II), (iii)(II). Pub. L. 101-508, Sec.

4118(f)(1)(B), struck out "by" before "the proportion".

Subsec. (c)(4). Pub. L. 101-508, Sec. 4118(f)(1)(D), as amended

by Pub. L. 103-432, Sec. 126(g)(6), substituted "section" for

"subsection".

Pub. L. 101-508, Sec. 4118(f)(1)(C), redesignated par. (3),

relating to ancillary policies, as (4). Former par. (4)

redesignated (5).

Pub. L. 101-508, Sec. 4118(d), struck out "only for services

furnished on or after January 1, 1993" after "visits and

consultations".

Subsec. (c)(5), (6). Pub. L. 101-508, Sec. 4118(f)(1)(C),

redesignated pars. (4) and (5) as (5) and (6), respectively.

Subsec. (d)(1)(A). Pub. L. 101-508, Sec. 4118(f)(1)(E),

(F)(i)(III), amended subpar. (A) identically, substituting

"paragraph (3)" for "subparagraph (C)".

Pub. L. 101-508, Sec. 4118(f)(1)(F)(i)(I), (II), substituted

"conversion factor (or factors)" for "conversion factor" in two

places and "update or updates" for "update".

Subsec. (d)(1)(C)(i). Pub. L. 101-508, Sec. 4118(f)(1)(F)(ii)(I),

substituted "conversion factor" for "conversion factor (or

factors)".

Subsec. (d)(1)(C)(ii). Pub. L. 101-508, Sec.

4118(f)(1)(F)(ii)(II), inserted "the conversion factor (or factors)

which will apply to physicians' services for the following year

and" before "the update (or updates)" and substituted "such year"

for "the following year".

Subsec. (d)(2)(A). Pub. L. 101-508, Sec. 4118(f)(1)(G), (I),

substituted "physicians' services (as defined in subsection

(f)(5)(A) of this section)" for "physicians' services" in first

sentence and "proportion of individuals who are enrolled under this

part who are HMO enrollees" for "proportion of HMO enrollees" in

last sentence.

Subsec. (d)(2)(A)(ii). Pub. L. 101-508, Sec. 4118(f)(1)(H),

substituted "and for the services involved" for "(as defined in

subsection (f)(5)(A) of this section)" and "such services" for "all

such physicians' services".

Subsec. (d)(2)(E)(i). Pub. L. 101-508, Sec. 4118(f)(1)(J),

inserted "the" before "most recent".

Subsec. (d)(2)(E)(ii)(I). Pub. L. 101-508, Sec. 4118(f)(1)(K),

substituted "payments for physicians' services" for "physicians'

services".

Subsec. (d)(3)(A)(i). Pub. L. 101-508, Sec. 4105(a)(3)(A),

inserted "except as provided in clause (iii)," after "subparagraph

(B),".

Subsec. (d)(3)(A)(iii). Pub. L. 101-508, Sec. 4105(a)(3)(B),

added cl. (iii).

Subsec. (d)(3)(B)(i). Pub. L. 101-508, Sec. 4118(f)(1)(L)(i)(II),

which directed amendment of cl. (i) by substituting "services in

such category" for "physicians' services (as defined in subsection

(f)(5)(A))", was executed by making the substitution for

"physicians' services (as defined in section (f)(5)(A))" to reflect

the probable intent of Congress.

Pub. L. 101-508, Sec. 4118(f)(1)(L)(i)(I), substituted "update

for a category of physicians' services for a year" for "update for

a year".

Subsec. (d)(3)(B)(ii). Pub. L. 101-508, Sec. 4118(f)(1)(L)(ii),

inserted "more than" after "decrease of" in introductory provisions

and struck out "more than" before "2 percentage points" in subcl.

(I).

Subsec. (e)(1)(A). Pub. L. 101-508, Sec. 4118(c)(1), substituted

"subparagraphs (B) and (C)" for "subparagraph (B)" in introductory

provisions.

Subsec. (e)(1)(C). Pub. L. 101-508, Sec. 4118(c)(2), added

subpar. (C).

Subsec. (f)(1)(C). Pub. L. 101-508, Sec. 4105(c)(1), substituted

"1991" for "1990" after "beginning with".

Subsec. (f)(1)(D)(i). Pub. L. 101-508, Sec. 4118(f)(1)(M),

substituted "portions of calendar years" for "calendar years".

Subsec. (f)(2)(A). Pub. L. 101-508, Sec. 4118(b)(1),

(f)(1)(N)(i), in introductory provisions, substituted "the

performance standard rate of increase, for all physicians' services

and for each category of physicians' services," for "each

performance standard rate of increase" and "product" for "sum".

Pub. L. 101-508, Sec. 4118(b)(6), substituted "minus 1,

multiplied by 100, and reduced" for "reduced" in concluding

provisions.

Subsec. (f)(2)(A)(i). Pub. L. 101-508, Sec. 4118(f)(1)(N)(ii), as

amended by Pub. L. 103-432, Sec. 126(g)(7), substituted "all

physicians' services or for the category of physicians' services,

respectively," for "physicians' services (as defined in subsection

(f)(5)(A) of this section)".

Pub. L. 101-508, Sec. 4118(f)(1)(M), substituted "portions of

calendar years" for "calendar years".

Pub. L. 101-508, Sec. 4118(b)(2), (3), substituted "1 plus the

Secretary's" for "the Secretary's" and "percentage increase

(divided by 100)" for "percentage increase".

Subsec. (f)(2)(A)(ii). Pub. L. 101-508, Sec. 4118(b)(2), (4),

substituted "1 plus the Secretary's" for "the Secretary's" and

inserted "(divided by 100)" after "decrease".

Subsec. (f)(2)(A)(iii). Pub. L. 101-508, Sec. 4118(f)(1)(N)(iii),

substituted "all physicians' services or of the category of

physicians' services, respectively," for "physicians' services".

Pub. L. 101-508, Sec. 4118(b)(2), (5), substituted "1 plus the

Secretary's" for "the Secretary's" and inserted "(divided by 100)"

after "percentage growth".

Subsec. (f)(2)(A)(iv). Pub. L. 101-508, Sec. 4118(e),

(f)(1)(N)(iv), substituted "all physicians' services or of the

category of physicians' services, respectively," for "physicians'

services (as defined in subsection (f)(5)(A) of this section)" and

inserted "including changes in law and regulations affecting the

percentage increase described in clause (i)" after "law or

regulations".

Pub. L. 101-508, Sec. 4118(b)(2), (4), substituted "1 plus the

Secretary's" for "the Secretary's" and "decrease (divided by 100)"

for "decrease".

Subsec. (f)(2)(C). Pub. L. 101-508, Sec. 4105(c)(2), added

subpar. (C).

Subsec. (f)(4)(A). Pub. L. 101-508, Sec. 4118(f)(1)(O),

substituted "subparagraph (B)" for "paragraph (B)".

Subsec. (f)(4)(B). Pub. L. 101-508, Sec. 4118(f)(1)(P),

substituted "specifically approved by law" for "Congress

specifically approves the plan".

Subsec. (g)(2)(A). Pub. L. 101-508, Sec. 4118(f)(1)(Q), inserted

"other than radiologist services subject to section 1395m(b) of

this title," after "during 1991," in introductory provisions.

Pub. L. 101-508, Sec. 4116, inserted at end "In the case of

evaluation and management services (as specified in section

1395u(b)(16)(B)(ii) of this title), the preceding sentence shall be

applied by substituting '40 percent' for '25 percent'."

Subsec. (g)(2)(B). Pub. L. 101-508, Sec. 4118(f)(1)(Q), inserted

"other than radiologist services subject to section 1395m(b) of

this title," after "during 1992," in introductory provisions.

Subsec. (i)(1)(A). Pub. L. 101-508, Sec. 4118(f)(1)(R),

substituted "adjusted historical payment basis (as defined in

subsection (a)(2)(D)(i)" for "historical payment basis (as defined

in subsection (a)(2)(C)(i)".

Subsec. (i)(2). Pub. L. 101-508, Sec. 4107(a)(1), added par. (2).

Subsec. (i)(3). Pub. L. 101-508, Sec. 4118(k), added par. (3).

Subsec. (j)(1). Pub. L. 101-508, Sec. 4118(f)(1)(S), which

directed the amendment of par. (1) by substituting "(as defined by

the Secretary) and all other physicians' services" for ", and such

other" and all that follows through the period was executed by

making the substitution for ", and such other category or

categories of physicians' services as the Secretary, from time to

time, defines in regulation." to reflect the probable intent of

Congress.

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by Pub. L. 106-554 applicable with respect to screening

mammographies furnished on or after Jan. 1, 2002, see section

1(a)(6) [title I, Sec. 104(c)] of Pub. L. 106-554, set out as a

note under section 1395m of this title.

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Sec. 211(d)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-350, provided that: "The

amendments made by this section [amending this section and sections

1395b-6 and 1395l of this title] shall be effective in determining

the conversion factor under section 1848(d) of the Social Security

Act (42 U.S.C. 1395w-4(d)) for years beginning with 2001 and shall

not apply to or affect any update (or any update adjustment factor)

for any year before 2001."

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(5)] of

Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 4022(b)(2)(B), (C) of Pub. L. 105-33

effective Nov. 1, 1997, the date of termination of the Prospective

Payment Assessment Commission and the Physician Payment Review

Commission, see section 4022(c)(2) of Pub. L. 105-33 set out as an

Effective Date; Transition; Transfer of Functions note under

section 1395b-6 of this title.

Amendment by section 4102(d) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 1998, see section

4102(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4103(d) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 2000, see section

4103(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4104(d) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 1998, see section

4104(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4105(a)(2) of Pub. L. 105-33 applicable to

items and services furnished on or after July 1, 1998, see section

4105(d)(1) of Pub. L. 105-33, set out as a note under section 1395m

of this title.

Amendment by section 4106(b) of Pub. L. 105-33 applicable to bone

mass measurements performed on or after July 1, 1998, see section

4106(d) of Pub. L. 105-33, set out as a note under section 1395x of

this title.

Section 4502(a)(2) of Pub. L. 105-33 provided that: "The

amendment made by this subsection [amending this section] shall

apply to the update for years beginning with 1999."

Section 4504(b) of Pub. L. 105-33 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

services furnished on or after January 1, 1998."

Amendment by section 4714(b)(2) of Pub. L. 105-33 applicable to

payment for (and with respect to provider agreements with respect

to) items and services furnished on or after Aug. 5, 1997, see

section 4714(c) of Pub. L. 105-33, set out as a note under section

1396a of this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by section 123(a) of Pub. L. 103-432 applicable to

services furnished on or after Oct. 31, 1994, but inapplicable to

services of nonparticipating supplier or other person furnished

before Jan. 1, 1995, see section 123(f)(1) of Pub. L. 103-432, set

out as a note under section 1395l of this title.

Section 123(f)(5) of Pub. L. 103-432 provided that: "The

amendment made by subsection (d) [amending this section] shall

apply to reports for years beginning with 1995."

Amendment by section 126(b)(6), (g)(2)(B), (5)-(7), (10)(A) of

Pub. L. 103-432 effective as if included in the enactment of Pub.

L. 101-508, see section 126(i) of Pub. L. 103-432, set out as a

note under section 1395m of this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13511(b) of Pub. L. 103-66 provided that: "The amendments

made by this section [amending this section] shall apply to

services furnished on or after January 1, 1994; except that

amendment made by subsection (a)(2) shall not apply -

"(1) to volume performance standard rates of increase

established under section 1848(f) of the Social Security Act

[subsec. (f) of this section] for fiscal years before fiscal year

1994, and

"(2) to adjustment in updates in the conversion factors for

physicians' services under section 1848(d)(3)(B) of such Act for

physicians' services to be furnished in calendar years before

1996."

Section 13514(d) of Pub. L. 103-66 provided that: "The amendments

made by this section [amending this section] shall apply to

services furnished on or after January 1, 1994."

Amendment by section 13515(a)(1) of Pub. L. 103-66 applicable to

services furnished on or after Jan. 1, 1994, see section 13515(d)

of Pub. L. 103-66, set out as a note under section 1395u of this

title.

Section 13517(c) of Pub. L. 103-66 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

services furnished on or after January 1, 1994."

Section 13518(c) of Pub. L. 103-66 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

services furnished on or after January 1, 1995."

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 4102(b), (g)(2) of Pub. L. 101-508

applicable to services furnished on or after Jan. 1, 1991, see

section 4102(i)(1) of Pub. L. 101-508, set out as a note under

section 1395m of this title.

Amendment by section 4104(b)(2) of Pub. L. 101-508 applicable to

services furnished on or after Jan. 1, 1991, see section 4104(d) of

Pub. L. 101-508, set out as a note under section 1395l of this

title.

Amendment by section 4106(b)(1) of Pub. L. 101-508 applicable to

services furnished after 1991, see section 4106(d)(2) of Pub. L.

101-508, set out as a note under section 1395u of this title.

Section 4107(a)(2) of Pub. L. 101-508, as amended by Pub. L.

103-432, title I, Sec. 126(d)(2), Oct. 31, 1994, 108 Stat. 4415,

provided that: "Section 1848(i)(2) of the Social Security Act

[subsec. (i)(2) of this section], as added by the amendment made by

paragraph (1), shall apply to services furnished in 1991 in the

same manner as it applies to services furnished after 1991. In

applying the previous sentence, the prevailing charge shall be

substituted for the fee schedule amount. In applying section

1848(g)(2)(D) of the Social Security Act for services of an

assistant-at-surgery furnished during 1991, the recognized payment

amount shall not exceed the maximum amount specified under section

1848(i)(2)(A) of such Act (as applied under this paragraph in such

year)."

Section 4107(c) of Pub. L. 101-508, as amended by Pub. L.

103-432, title I, Sec. 126(d)(1), Oct. 31, 1994, 108 Stat. 4415,

provided that: "The amendment made by subsection (a)(1) [amending

this section] shall apply with respect to services furnished on or

after January 1, 1992."

Section 4109(b) of Pub. L. 101-508 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

services furnished on or after January 1, 1992. In applying section

1848(d)(1)(B) of the Social Security Act [subsec. (d)(1)(B) of this

section] (in computing the initial budget-neutral conversion factor

for 1991), the Secretary shall compute such factor assuming that

section 1848(b)(3) of such Act (as added by the amendment made by

subsection (a)) had applied to physicians' services furnished

during 1991."

-TRANS-

TRANSFER OF FUNCTIONS

Physician Payment Review Commission (PPRC) was terminated and its

assets and staff transferred to the Medicare Payment Advisory

Commission (MedPAC) by section 4022(c)(2), (3) of Pub. L. 105-33,

set out as a note under section 1395b-6 of this title. Section

4022(c)(2), (3) further provided that MedPAC was to be responsible

for preparation and submission of reports required by law to be

submitted by PPRC, and that, for that purpose, any reference in law

to PPRC was to be deemed, after the appointment of MedPAC, to refer

to MedPAC.

-MISC2-

TERMINATION OF REPORTING REQUIREMENTS

For termination, effective May 15, 2000, of provisions of law

requiring submittal to Congress of any annual, semiannual, or other

regular periodic report listed in House Document No. 103-7 (in

which item 8 on page 94 identifies a reporting provision which, as

subsequently amended, is contained in subsec. (g)(6)(B) of this

section and in which item 9 on page 94 identifies a reporting

provision which is contained in subsec. (g)(7)(B) of this section),

see section 3003 of Pub. L. 104-66, as amended, set out as a note

under section 1113 of Title 31, Money and Finance.

TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES UNDER MEDICARE

Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec. 542], Dec. 21, 2000,

114 Stat. 2763, 2763A-550, provided that:

"(a) In General. - When an independent laboratory furnishes the

technical component of a physician pathology service to a

fee-for-service medicare beneficiary who is an inpatient or

outpatient of a covered hospital, the Secretary of Health and Human

Services shall treat such component as a service for which payment

shall be made to the laboratory under section 1848 of the Social

Security Act (42 U.S.C. 1395w-4) and not as an inpatient hospital

service for which payment is made to the hospital under section

1886(d) of such Act (42 U.S.C. 1395ww(d)) or as an outpatient

hospital service for which payment is made to the hospital under

section 1833(t) of such Act (42 U.S.C. 1395l(t)).

"(b) Definitions. - For purposes of this section:

"(1) Covered hospital. - The term 'covered hospital' means,

with respect to an inpatient or an outpatient, a hospital that

had an arrangement with an independent laboratory that was in

effect as of July 22, 1999, under which a laboratory furnished

the technical component of physician pathology services to

fee-for-service medicare beneficiaries who were hospital

inpatients or outpatients, respectively, and submitted claims for

payment for such component to a medicare carrier (that has a

contract with the Secretary under section 1842 of the Social

Security Act, 42 U.S.C. 1395u) and not to such hospital.

"(2) Fee-for-service medicare beneficiary. - The term

'fee-for-service medicare beneficiary' means an individual who -

"(A) is entitled to benefits under part A, or enrolled under

part B, or both, of such title [part A or part B of this

subchapter]; and

"(B) is not enrolled in any of the following:

"(i) A Medicare+Choice plan under part C of such title

[part C of this subchapter].

"(ii) A plan offered by an eligible organization under

section 1876 of such Act (42 U.S.C. 1395mm).

"(iii) A program of all-inclusive care for the elderly

(PACE) under section 1894 of such Act (42 U.S.C. 1395eee).

"(iv) A social health maintenance organization (SHMO)

demonstration project established under section 4018(b) of

the Omnibus Budget Reconciliation Act of 1987 (Public Law

100-203) [101 Stat. 1330-65].

"(c) Effective Date. - This section shall apply to services

furnished during the 2-year period beginning on January 1, 2001.

"(d) GAO Report. -

"(1) Study. - The Comptroller General of the United States

shall conduct a study of the effects of the previous provisions

of this section on hospitals and laboratories and access of

fee-for-service medicare beneficiaries to the technical component

of physician pathology services.

"(2) Report. - Not later than April 1, 2002, the Comptroller

General shall submit to Congress a report on such study. The

report shall include recommendations about whether such

provisions should be extended after the end of the period

specified in subsection (c) for either or both inpatient and

outpatient hospital services, and whether the provisions should

be extended to other hospitals."

ONE-TIME PUBLICATION OF INFORMATION ON TRANSITION

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Sec.

211(a)(2)(C)], Nov. 29, 1999, 113 Stat. 1536, 1501A-347, provided

that: "The Secretary of Health and Human Services shall cause to

have published in the Federal Register, not later than 90 days

after the date of the enactment of this section [Nov. 29, 1999],

the Secretary's determination, based upon the best available data,

of -

"(i) the allowed expenditures under subclauses (I) and (II) of

subsection (d)(4)(C)(ii) of section 1848 of the Social Security

Act (42 U.S.C. 1395w-4), as added by subsection (a)(1)(B), for

the 9-month period beginning on April 1, 1999, and for 1999;

"(ii) the estimated actual expenditures described in subsection

(d) of such section for 1999; and

"(iii) the sustainable growth rate under subsection (f) of such

section for 2000."

USE OF DATA COLLECTED BY ORGANIZATIONS AND ENTITIES IN DETERMINING

PRACTICE EXPENSE RELATIVE VALUES

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Sec. 212],

Nov. 29, 1999, 113 Stat. 1536, 1501A-350, provided that:

"(a) In General. - The Secretary of Health and Human Services

shall establish by regulation (after notice and opportunity for

public comment) a process (including data collection standards)

under which the Secretary will accept for use and will use, to the

maximum extent practicable and consistent with sound data

practices, data collected or developed by entities and

organizations (other than the Department of Health and Human

Services) to supplement the data normally collected by that

Department in determining the practice expense component under

section 1848(c)(2)(C)(ii) of the Social Security Act (42 U.S.C.

1395w-4(c)(2)(C)(ii)) for purposes of determining relative values

for payment for physicians' services under the fee schedule under

section 1848 of such Act (42 U.S.C. 1395w-4). The Secretary shall

first promulgate such regulation on an interim final basis in a

manner that permits the submission and use of data in the

computation of practice expense relative value units for payment

rates for 2001.

"(b) Publication of Information. - The Secretary shall include,

in the publication of the estimated and final updates under section

1848(c) of such Act (42 U.S.C. 1395w-4(c)) for payments for 2001

and for 2002, a description of the process established under

subsection (a) for the use of external data in making adjustments

in relative value units and the extent to which the Secretary has

used such external data in making such adjustments for each such

year, particularly in cases in which the data otherwise used are

inadequate because such data are not based upon a large enough

sample size to be statistically reliable."

CONSULTATION WITH ORGANIZATIONS IN ESTABLISHING PAYMENT AMOUNTS FOR

SERVICES PROVIDED BY PHYSICIANS

Section 4105(a)(3) of Pub. L. 105-33 provided that: "In

establishing payment amounts under section 1848 of the Social

Security Act [this section] for physicians' services consisting of

diabetes outpatient self-management training services, the

Secretary of Health and Human Services shall consult with

appropriate organizations, including such organizations

representing individuals or medicare beneficiaries with diabetes."

REQUIREMENTS FOR DEVELOPING NEW RESOURCE-BASED PRACTICE EXPENSE

RELATIVE VALUE UNITS

Section 4505(d) of Pub. L. 105-33 provided that:

"(1) Development. - For purposes of section 1848(c)(2)(C)(ii) of

the Social Security Act [subsec. (c)(2)(C)(ii) of this section],

the Secretary of Health and Human Services shall develop new

resource-based relative value units. In developing such units the

Secretary shall -

"(A) utilize, to the maximum extent practicable, generally

accepted cost accounting principles which (i) recognize all

staff, equipment, supplies, and expenses, not just those which

can be tied to specific procedures, and (ii) use actual data on

equipment utilization and other key assumptions;

"(B) consult with organizations representing physicians

regarding methodology and data to be used; and

"(C) develop a refinement process to be used during each of the

4 years of the transition period.

"(2) Report. - The Secretary shall transmit a report by March 1,

1998, on the development of resource-based relative value units

under paragraph (1) to the Committee on Ways and Means and the

Committee on Commerce of the House of Representatives and the

Committee on Finance of the Senate. The report shall include a

presentation of data to be used in developing the value units and

an explanation of the methodology.

"(3) Notice of proposed rulemaking. - The Secretary shall publish

a notice of proposed rulemaking with the new resource-based

relative value units on or before May 1, 1998, and shall allow for

a 90-day public comment period.

"(4) Items included. - The new proposed rule shall consider the

following:

"(A) Impact projections which compare new proposed payment

amounts on data on actual physician practice expenses.

"(B) Impact projections for hospital-based and other

specialties, geographic payment localities, and urban versus

rural localities."

APPLICATION OF CERTAIN BUDGET NEUTRALITY PROVISIONS

Section 4505(f)(2) of Pub. L. 105-33 provided that: "In

implementing the amendment made by paragraph (1)(A)(ii) [amending

this section], the provisions of clauses (ii)(II) and (iii) of

section 1848(c)(2)(B) of the Social Security Act (42 U.S.C.

1395w-4(c)(2)(B)) shall apply in the same manner as they apply to

adjustments under clause (ii)(I) of such section."

DEVELOPMENT OF RESOURCE-BASED METHODOLOGY FOR PRACTICE EXPENSES

Section 121(a) of Pub. L. 103-432 provided that:

"(1) In general. - The Secretary of Health and Human Services

shall develop a methodology for implementing in 1998 a

resource-based system for determining practice expense relative

value units for each physicians' service. The methodology utilized

shall recognize the staff, equipment, and supplies used in the

provision of various medical and surgical services in various

settings.

"(2) Report. - The Secretary shall transmit a report by June 30,

1996, on the methodology developed under paragraph (1) to the

Committees on Ways and Means and Energy and Commerce of the House

of Representatives and the Committee on Finance of the Senate. The

report shall include a presentation of data utilized in developing

the methodology and an explanation of the methodology."

APPLICATION OF SUBSECTION (C)(2)(B)(II)(II), (III)

Section 121(b)(3) of Pub. L. 103-432 provided that: "In

implementing the amendment made by paragraph (1)(C) [amending this

section], the provisions of clauses (ii)(II) and (iii) of section

1848(c)(2)(B) of the Social Security Act [subsec.

(c)(2)(B)(ii)(II), (iii) of this section] shall apply in the same

manner as they apply to adjustments under clause (ii)(I) of such

section."

REPORT ON REVIEW PROCESS

Section 122(c) of Pub. L. 103-432 provided that not later than 1

year after Oct. 31, 1994, Secretary of Health and Human Services

was to study and report to Congress on data necessary to review and

revise indices established under subsec. (e)(1)(A) of this section,

any limitations on availability of data necessary to review and

revise such indices at least every three years, ways of addressing

such limitations, with particular attention to the development of

alternative data sources for input components for which current

index values are based on data collected less frequently than every

three years, and costs of developing more accurate and timely data.

RELATIVE VALUE FOR PEDIATRIC SERVICES

Section 124(a) of Pub. L. 103-432 provided that: "The Secretary

of Health and Human Services shall fully develop, by not later than

July 1, 1995, relative values for the full range of pediatric

physicians' services which are consistent with the relative values

developed for other physicians' services under section 1848(c) of

the Social Security Act [subsec. (c) of this section]. In

developing such values, the Secretary shall conduct such

refinements as may be necessary to produce appropriate estimates

for such relative values."

BUDGET NEUTRALITY ADJUSTMENT

For provisions requiring reduction of relative values established

under subsec. (c) of this section and amounts determined under

subsec. (a)(2)(B)(ii)(I) of this section for 1994 (to be applied

for that year and subsequent years) in order to assure that the

amendments to this section and section 1395u of this title by

section 13515(a) of Pub. L. 103-66 will not result in expenditures

under this part that exceed the amount of such expenditures that

would have been made if such amendments had not been made, see

section 13515(b) of Pub. L. 103-66, set out as a note under section

1395u of this title.

Section 13518(b) of Pub. L. 103-66 provided that:

"Notwithstanding any other provision of law, the Secretary of

Health and Human Services shall implement the amendment made by

subsection (a) [amending this section] in a manner to assure that

such amendment will result in expenditures under part B of title

XVIII of the Social Security Act [this part] in 1995 for services

described in such amendment that shall be equal to the amount of

expenditures for such services that would have been made if such

amendment had not been made."

ANCILLARY POLICIES; ADJUSTMENT FOR INDEPENDENT LABORATORIES

FURNISHING PHYSICIAN PATHOLOGY SERVICES

Section 4104(c) of Pub. L. 101-508 provided: "The Secretary of

Health and Human Services, in establishing ancillary policies under

section 1848(c)(3) of the Social Security Act [subsec. (c)(3) of

this section], shall consider an appropriate adjustment to reflect

the technical component of furnishing physician pathology services

through a laboratory that is independent of a hospital and separate

from an attending or consulting physician's office."

COMPUTATION OF CONVERSION FACTOR FOR 1992

Section 4105(b)(2) of Pub. L. 101-508, as amended by Pub. L.

103-432, title I, Sec. 126(g)(2)(A)(i), Oct. 31, 1994, 108 Stat.

4415, provided that: "In computing the conversion factor under

section 1848(d)(1)(B) of the Social Security Act for 1992 [subsec.

(d)(1)(B) of this section], the Secretary of Health and Human

Services shall determine the estimated aggregate amount of payments

under part B of title XVIII of such Act [this part] for physicians'

services in 1991 assuming that the amendment made by this

subsection [amending section 1395u of this title] did not apply."

Section 4106(c) of Pub. L. 101-508, as amended by Pub. L.

103-432, title I, Sec. 126(g)(3), Oct. 31, 1994, 108 Stat. 4416,

provided that: "In computing the conversion factor under section

1848(d)(1)(B) of the Social Security Act [subsec. (d)(1)(B) of this

section] for 1992, the Secretary of Health and Human Services shall

determine the estimated aggregate amount of payments under part B

[this part] for physicians' services in 1991 assuming that the

amendments made by this section [amending this section, section

1395u of this title, and provisions set out as a note under section

1395u of this title] (notwithstanding subsection (d) [set out as an

Effective Date of 1990 Amendment note under section 1395u of this

title]) applied to all services furnished during such year."

PUBLICATION OF PERFORMANCE STANDARD RATES

Section 4105(d) of Pub. L. 101-508, as amended by Pub. L.

103-432, title I, Sec. 126(g)(2)(C), Oct. 31, 1994, 108 Stat. 4416,

provided that: "Not later than 45 days after the date of the

enactment of this Act [Nov. 5, 1990], the Secretary of Health and

Human Services, based on the most recent data available, shall

estimate and publish in the Federal Register the performance

standard rates of increase specified in section 1848(f)(2)(C) of

the Social Security Act [subsec. (f)(2)(C) of this section] for

fiscal year 1991."

STUDY OF REGIONAL VARIATIONS IN IMPACT OF MEDICARE PHYSICIAN

PAYMENT REFORM

Section 4115 of Pub. L. 101-508 provided that:

"(a) Study. - The Secretary of Health and Human Services shall

conduct a study of -

"(1) factors that may explain geographic variations in Medicare

reasonable charges for physicians' services that are not

attributable to variations in physician practice costs (including

the supply of physicians in an area and area variations in the

mix of services furnished);

"(2) the extent to which the geographic practice cost indices

applied under the fee schedule established under section 1848 of

the Social Security Act [this section] accurately reflect

variations in practice costs and malpractice costs (and

alternative sources of information upon which to base such

indices);

"(3) the impact of the transition to a national, resource-based

fee schedule for physicians' services under Medicare on access to

physicians' services in areas that experience a

disproportionately large reduction in payments for physicians'

services under the fee schedule by reason of such variations; and

"(4) appropriate adjustments or modifications in the transition

to, or manner of determining payments under, the fee schedule

established under section 1848 of the Social Security Act, to

compensate for such variations and ensure continued access to

physicians' services for Medicare beneficiaries in such areas.

"(b) Report. - By not later than July 1, 1992, the Secretary

shall submit to Congress a report on the study conducted under

subsection (a)."

STATEWIDE FEE SCHEDULE AREAS FOR PHYSICIANS' SERVICES

Section 4117 of Pub. L. 101-508, as amended by Pub. L. 103-432,

title I, Sec. 126(f), Oct. 31, 1994, 108 Stat. 4415, provided that:

"Notwithstanding section 1848(j)(2) of the Social Security Act (42

U.S.C. 1395w-4(j)(2)), in the case of the States of Nebraska and

Oklahoma the Secretary of Health and Human Services (Secretary)

shall treat the State as a single fee schedule area for purposes of

determining -

"(1) the adjusted historical payment basis (as defined in

section 1848(a)(2)(D) of such Act (42 U.S.C. 1395w-4(a)(2)(D))),

and

"(2) the fee schedule amount (as referred to in section 1848(a)

(42 U.S.C. 1395w-4(a)) of such Act),

for physicians' services (as defined in section 1848(j)(3) of such

Act (42 U.S.C. 1395w-4(j)(3))) furnished on or after January 1,

1992."

STUDIES

Pub. L. 101-239, title VI, Sec. 6102(d), Dec. 19, 1989, 103 Stat.

2185, as amended by Pub. L. 103-432, title I, Sec. 126(h)(1), Oct.

31, 1994, 108 Stat. 4416; Pub. L. 105-362, title VI, Sec.

601(b)(5), Nov. 10, 1998, 112 Stat. 3286, provided for various

studies and reports as follows: (1) directed Comptroller General to

conduct study of alternative payment methodology for malpractice

component for physicians' services, and to submit report to

Congress by not later than Apr. 1, 1991; (2) directed Secretary of

Health and Human Services to conduct study of how payments under

this section may affect payments to eligible organizations with

risk-sharing contracts under section 1395mm of this title, and to

submit report to Congress by not later than Apr. 1, 1990; (3)

directed Secretary to conduct study of volume performance standard

rates of increase for services furnished by geography, specialty,

and type of service, and to submit report with appropriate

recommendations to Congress by not later than July 1, 1990; (4)

directed Physician Payment Review Commission to conduct study of

payment for practice and malpractice expenses, including

appropriate methods for allocating malpractice expenses to

particular procedures which could be incorporated into the

determination of relative values for such procedures using a

consensus panel and other appropriate methodologies, and to submit

report and recommendations to Congress by not later than July 1,

1991; (5) directed Physician Payment Review Commission to conduct

study of feasibility and desirability of using Metropolitan

Statistical Areas or other payment areas for purposes of payment

for physicians' services under this part, and to submit report to

Congress by not later than July 1, 1991; (6) directed Physician

Payment Review Commission to conduct study of payment for

non-physician providers of medicare services, including physician

assistants, clinical psychologists, nurse midwives, and other

health practitioners whose services can be billed under medicare

program on a fee-for-service basis, and to submit report to

Congress by not later than July 1, 1991; (7) directed Physician

Payment Review Commission to conduct study of physician fees under

State medicaid programs established under subchapter XIX of this

chapter, and to submit report with recommendations to Congress by

no later than July 1, 1991; and (8) directed Comptroller General to

conduct study of effect of anti-trust laws on ability of physicians

to act in groups to educate and discipline peers of such physicians

in order to reduce and eliminate ineffective practice patterns and

inappropriate utilization, and to submit report to Congress by no

later than July 1, 1991.

DISTRIBUTION OF MODEL FEE SCHEDULE

Section 6102(e)(11) of Pub. L. 101-239, as amended by Pub. L.

101-508, title IV, Sec. 4118(f)(2)(E), Nov. 5, 1990, 104 Stat.

1388-70, provided that: "By September 1, 1990, the Secretary of

Health and Human Services shall develop a Model Fee Schedule, using

the methodology set forth in section 1848 of the Social Security

Act [this section]. The Model Fee Schedule shall include as many

services as the Secretary of Health and Human Services concludes

can be assigned valid relative values. The Secretary of Health and

Human Services shall submit the Model Fee Schedule to the

appropriate committees of Congress and make it generally available

to the public."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395a, 1395b-6, 1395l,

1395m, 1395u, 1395w-22, 1395w-23, 1395y, 1395qq, 1395rr, 1395ww of

this title; title 5 section 8904; title 10 section 1079.

-FOOTNOTE-

(!1) So in original. Probably should be "elapsed".

(!2) So in original. The comma probably should not appear.

(!3) So in original. The word "a" probably should not appear.

(!4) So in original. Probably should be followed by a comma.

-End-

-CITE-

42 USC Part C - Medicare+Choice Program 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

PART C - MEDICARE+CHOICE PROGRAM

-MISC1-

PRIOR PROVISIONS

A prior part C of this subchapter, consisting of section 1395x et

seq., was redesignated part D of this subchapter.

-SECREF-

PART REFERRED TO IN OTHER SECTIONS

This part is referred to in sections 1320b-5, 1320d, 1395b-6,

1395w-4, 1395cc, 1395cc-2, 1395ff, 1395mm, 1395nn, 1395ss, 1395ww,

1395eee, 1395ggg, 1396b, 1396u-2, 1396u-4 of this title; title 26

section 138.

-End-

-CITE-

42 USC Sec. 1395w-21 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-21. Eligibility, election, and enrollment

-STATUTE-

(a) Choice of medicare benefits through Medicare+Choice plans

(1) In general

Subject to the provisions of this section, each Medicare+Choice

eligible individual (as defined in paragraph (3)) is entitled to

elect to receive benefits under this subchapter -

(A) through the original medicare fee-for-service program

under parts A and B of this subchapter, or

(B) through enrollment in a Medicare+Choice plan under this

part.

(2) Types of Medicare+Choice plans that may be available

A Medicare+Choice plan may be any of the following types of

plans of health insurance:

(A) Coordinated care plans

Coordinated care plans which provide health care services,

including but not limited to health maintenance organization

plans (with or without point of service options), plans offered

by provider-sponsored organizations (as defined in section

1395w-25(d) of this title), and preferred provider organization

plans.

(B) Combination of MSA plan and contributions to

Medicare+Choice MSA

An MSA plan, as defined in section 1395w-28(b)(3) of this

title, and a contribution into a Medicare+Choice medical

savings account (MSA).

(C) Private fee-for-service plans

A Medicare+Choice private fee-for-service plan, as defined in

section 1395w-28(b)(2) of this title.

(3) Medicare+Choice eligible individual

(A) In general

In this subchapter, subject to subparagraph (B), the term

"Medicare+Choice eligible individual" means an individual who

is entitled to benefits under part A of this subchapter and

enrolled under part B of this subchapter.

(B) Special rule for end-stage renal disease

Such term shall not include an individual medically

determined to have end-stage renal disease, except that -

(i) an individual who develops end-stage renal disease

while enrolled in a Medicare+Choice plan may continue to be

enrolled in that plan; and

(ii) in the case of such an individual who is enrolled in a

Medicare+Choice plan under clause (i) (or subsequently under

this clause), if the enrollment is discontinued under

circumstances described in subsection (e)(4)(A) of this

section, then the individual will be treated as a

"Medicare+Choice eligible individual" for purposes of

electing to continue enrollment in another Medicare+Choice

plan.

(b) Special rules

(1) Residence requirement

(A) In general

Except as the Secretary may otherwise provide and except as

provided in subparagraph (C), an individual is eligible to

elect a Medicare+Choice plan offered by a Medicare+Choice

organization only if the plan serves the geographic area in

which the individual resides.

(B) Continuation of enrollment permitted

Pursuant to rules specified by the Secretary, the Secretary

shall provide that a plan may offer to all individuals residing

in a geographic area the option to continue enrollment in the

plan, notwithstanding that the individual no longer resides in

the service area of the plan, so long as the plan provides that

individuals exercising this option have, as part of the basic

benefits described in section 1395w-22(a)(1)(A) of this title,

reasonable access within that geographic area to the full range

of basic benefits, subject to reasonable cost sharing liability

in obtaining such benefits.

(C) Continuation of enrollment permitted where service changed

Notwithstanding subparagraph (A) and in addition to

subparagraph (B), if a Medicare+Choice organization eliminates

from its service area a Medicare+Choice payment area that was

previously within its service area, the organization may elect

to offer individuals residing in all or portions of the

affected area who would otherwise be ineligible to continue

enrollment the option to continue enrollment in a

Medicare+Choice plan it offers so long as -

(i) the enrollee agrees to receive the full range of basic

benefits (excluding emergency and urgently needed care)

exclusively at facilities designated by the organization

within the plan service area; and

(ii) there is no other Medicare+Choice plan offered in the

area in which the enrollee resides at the time of the

organization's election.

(2) Special rule for certain individuals covered under FEHBP or

eligible for veterans or military health benefits

(A) FEHBP

An individual who is enrolled in a health benefit plan under

chapter 89 of title 5 is not eligible to enroll in an MSA plan

until such time as the Director of the Office of Management and

Budget certifies to the Secretary that the Office of Personnel

Management has adopted policies which will ensure that the

enrollment of such individuals in such plans will not result in

increased expenditures for the Federal Government for health

benefit plans under such chapter.

(B) VA and DOD

The Secretary may apply rules similar to the rules described

in subparagraph (A) in the case of individuals who are eligible

for health care benefits under chapter 55 of title 10 or under

chapter 17 of title 38.

(3) Limitation on eligibility of qualified medicare beneficiaries

and other medicaid beneficiaries to enroll in an MSA plan

An individual who is a qualified medicare beneficiary (as

defined in section 1396d(p)(1) of this title), a qualified

disabled and working individual (described in section 1396d(s) of

this title), an individual described in section

1396a(a)(10)(E)(iii) of this title, or otherwise entitled to

medicare cost-sharing under a State plan under subchapter XIX of

this chapter is not eligible to enroll in an MSA plan.

(4) Coverage under MSA plans on a demonstration basis

(A) In general

An individual is not eligible to enroll in an MSA plan under

this part -

(i) on or after January 1, 2003, unless the enrollment is

the continuation of such an enrollment in effect as of such

date; or

(ii) as of any date if the number of such individuals so

enrolled as of such date has reached 390,000.

Under rules established by the Secretary, an individual is not

eligible to enroll (or continue enrollment) in an MSA plan for

a year unless the individual provides assurances satisfactory

to the Secretary that the individual will reside in the United

States for at least 183 days during the year.

(B) Evaluation

The Secretary shall regularly evaluate the impact of

permitting enrollment in MSA plans under this part on selection

(including adverse selection), use of preventive care, access

to care, and the financial status of the Trust Funds under this

subchapter.

(C) Reports

The Secretary shall submit to Congress periodic reports on

the numbers of individuals enrolled in such plans and on the

evaluation being conducted under subparagraph (B). The

Secretary shall submit such a report, by not later than March

1, 2002, on whether the time limitation under subparagraph

(A)(i) should be extended or removed and whether to change the

numerical limitation under subparagraph (A)(ii).

(c) Process for exercising choice

(1) In general

The Secretary shall establish a process through which elections

described in subsection (a) of this section are made and changed,

including the form and manner in which such elections are made

and changed. Such elections shall be made or changed only during

coverage election periods specified under subsection (e) of this

section and shall become effective as provided in subsection (f)

of this section.

(2) Coordination through Medicare+Choice organizations

(A) Enrollment

Such process shall permit an individual who wishes to elect a

Medicare+Choice plan offered by a Medicare+Choice organization

to make such election through the filing of an appropriate

election form with the organization.

(B) Disenrollment

Such process shall permit an individual, who has elected a

Medicare+Choice plan offered by a Medicare+Choice organization

and who wishes to terminate such election, to terminate such

election through the filing of an appropriate election form

with the organization.

(3) Default

(A) Initial election

(i) In general

Subject to clause (ii), an individual who fails to make an

election during an initial election period under subsection

(e)(1) of this section is deemed to have chosen the original

medicare fee-for-service program option.

(ii) Seamless continuation of coverage

The Secretary may establish procedures under which an

individual who is enrolled in a health plan (other than

Medicare+Choice plan) offered by a Medicare+Choice

organization at the time of the initial election period and

who fails to elect to receive coverage other than through the

organization is deemed to have elected the Medicare+Choice

plan offered by the organization (or, if the organization

offers more than one such plan, such plan or plans as the

Secretary identifies under such procedures).

(B) Continuing periods

An individual who has made (or is deemed to have made) an

election under this section is considered to have continued to

make such election until such time as -

(i) the individual changes the election under this section,

or

(ii) the Medicare+Choice plan with respect to which such

election is in effect is discontinued or, subject to

subsection (b)(1)(B) of this section, no longer serves the

area in which the individual resides.

(d) Providing information to promote informed choice

(1) In general

The Secretary shall provide for activities under this

subsection to broadly disseminate information to medicare

beneficiaries (and prospective medicare beneficiaries) on the

coverage options provided under this section in order to promote

an active, informed selection among such options.

(2) Provision of notice

(A) Open season notification

At least 15 days before the beginning of each annual,

coordinated election period (as defined in subsection (e)(3)(B)

of this section), the Secretary shall mail to each

Medicare+Choice eligible individual residing in an area the

following:

(i) General information

The general information described in paragraph (3).

(ii) List of plans and comparison of plan options

A list identifying the Medicare+Choice plans that are (or

will be) available to residents of the area and information

described in paragraph (4) concerning such plans. Such

information shall be presented in a comparative form.

(iii) Additional information

Any other information that the Secretary determines will

assist the individual in making the election under this

section.

The mailing of such information shall be coordinated, to the

extent practicable, with the mailing of any annual notice under

section 1395b-2 of this title.

(B) Notification to newly eligible Medicare+Choice eligible

individuals

To the extent practicable, the Secretary shall, not later

than 30 days before the beginning of the initial

Medicare+Choice enrollment period for an individual described

in subsection (e)(1) of this section, mail to the individual

the information described in subparagraph (A).

(C) Form

The information disseminated under this paragraph shall be

written and formatted using language that is easily

understandable by medicare beneficiaries.

(D) Periodic updating

The information described in subparagraph (A) shall be

updated on at least an annual basis to reflect changes in the

availability of Medicare+Choice plans and the benefits and

Medicare+Choice monthly basic and supplemental beneficiary

premiums for such plans.

(3) General information

General information under this paragraph, with respect to

coverage under this part during a year, shall include the

following:

(A) Benefits under original medicare fee-for-service program

option

A general description of the benefits covered under the

original medicare fee-for-service program under parts A and B

of this subchapter, including -

(i) covered items and services,

(ii) beneficiary cost sharing, such as deductibles,

coinsurance, and copayment amounts, and

(iii) any beneficiary liability for balance billing.

(B) Election procedures

Information and instructions on how to exercise election

options under this section.

(C) Rights

A general description of procedural rights (including

grievance and appeals procedures) of beneficiaries under the

original medicare fee-for-service program and the

Medicare+Choice program and the right to be protected against

discrimination based on health status-related factors under

section 1395w-22(b) of this title.

(D) Information on medigap and medicare select

A general description of the benefits, enrollment rights, and

other requirements applicable to medicare supplemental policies

under section 1395ss of this title and provisions relating to

medicare select policies described in section 1395ss(t) of this

title.

(E) Potential for contract termination

The fact that a Medicare+Choice organization may terminate

its contract, refuse to renew its contract, or reduce the

service area included in its contract, under this part, and the

effect of such a termination, nonrenewal, or service area

reduction may have on individuals enrolled with the

Medicare+Choice plan under this part.

(4) Information comparing plan options

Information under this paragraph, with respect to a

Medicare+Choice plan for a year, shall include the following:

(A) Benefits

The benefits covered under the plan, including the following:

(i) Covered items and services beyond those provided under

the original medicare fee-for-service program.

(ii) Any beneficiary cost sharing.

(iii) Any maximum limitations on out-of-pocket expenses.

(iv) In the case of an MSA plan, differences in cost

sharing, premiums, and balance billing under such a plan

compared to under other Medicare+Choice plans.

(v) In the case of a Medicare+Choice private

fee-for-service plan, differences in cost sharing, premiums,

and balance billing under such a plan compared to under other

Medicare+Choice plans.

(vi) The extent to which an enrollee may obtain benefits

through out-of-network health care providers.

(vii) The extent to which an enrollee may select among

in-network providers and the types of providers participating

in the plan's network.

(viii) The organization's coverage of emergency and

urgently needed care.

(B) Premiums

(i) In general

The Medicare+Choice monthly basic beneficiary premium and

Medicare+Choice monthly supplemental beneficiary premium, if

any, for the plan or, in the case of an MSA plan, the

Medicare+Choice monthly MSA premium.

(ii) Reductions

The reduction in part B premiums, if any.

(C) Service area

The service area of the plan.

(D) Quality and performance

To the extent available, plan quality and performance

indicators for the benefits under the plan (and how they

compare to such indicators under the original medicare

fee-for-service program under parts A and B of this subchapter

in the area involved), including -

(i) disenrollment rates for medicare enrollees electing to

receive benefits through the plan for the previous 2 years

(excluding disenrollment due to death or moving outside the

plan's service area),

(ii) information on medicare enrollee satisfaction,

(iii) information on health outcomes, and

(iv) the recent record regarding compliance of the plan

with requirements of this part (as determined by the

Secretary).

(E) Supplemental benefits

Whether the organization offering the plan includes mandatory

supplemental benefits in its base benefit package or offers

optional supplemental benefits and the terms and conditions

(including premiums) for such coverage.

(5) Maintaining a toll-free number and Internet site

The Secretary shall maintain a toll-free number for inquiries

regarding Medicare+Choice options and the operation of this part

in all areas in which Medicare+Choice plans are offered and an

Internet site through which individuals may electronically obtain

information on such options and Medicare+Choice plans.

(6) Use of non-Federal entities

The Secretary may enter into contracts with non-Federal

entities to carry out activities under this subsection.

(7) Provision of information

A Medicare+Choice organization shall provide the Secretary with

such information on the organization and each Medicare+Choice

plan it offers as may be required for the preparation of the

information referred to in paragraph (2)(A).

(e) Coverage election periods

(1) Initial choice upon eligibility to make election if

Medicare+Choice plans available to individual

If, at the time an individual first becomes entitled to

benefits under part A of this subchapter and enrolled under part

B of this subchapter, there is one or more Medicare+Choice plans

offered in the area in which the individual resides, the

individual shall make the election under this section during a

period specified by the Secretary such that if the individual

elects a Medicare+Choice plan during the period, coverage under

the plan becomes effective as of the first date on which the

individual may receive such coverage.

(2) Open enrollment and disenrollment opportunities

Subject to paragraph (5) -

(A) Continuous open enrollment and disenrollment through 2004

At any time during the period beginning January 1, 1998, and

ending on December 31, 2004, a Medicare+Choice eligible

individual may change the election under subsection (a)(1) of

this section.

(B) Continuous open enrollment and disenrollment for first 6

months during 2005

(i) In general

Subject to clause (ii) and subparagraph (D), at any time

during the first 6 months of 2005, or, if the individual

first becomes a Medicare+Choice eligible individual during

2005, during the first 6 months during 2005 in which the

individual is a Medicare+Choice eligible individual, a

Medicare+Choice eligible individual may change the election

under subsection (a)(1) of this section.

(ii) Limitation of one change

An individual may exercise the right under clause (i) only

once. The limitation under this clause shall not apply to

changes in elections effected during an annual, coordinated

election period under paragraph (3) or during a special

enrollment period under the first sentence of paragraph (4).

(C) Continuous open enrollment and disenrollment for first 3

months in subsequent years

(i) In general

Subject to clause (ii) and subparagraph (D), at any time

during the first 3 months of a year after 2005, or, if the

individual first becomes a Medicare+Choice eligible

individual during a year after 2005, during the first 3

months of such year in which the individual is a

Medicare+Choice eligible individual, a Medicare+Choice

eligible individual may change the election under subsection

(a)(1) of this section.

(ii) Limitation of one change during open enrollment period

each year

An individual may exercise the right under clause (i) only

once during the applicable 3-month period described in such

clause in each year. The limitation under this clause shall

not apply to changes in elections effected during an annual,

coordinated election period under paragraph (3) or during a

special enrollment period under paragraph (4).

(D) Continuous open enrollment for institutionalized

individuals

At any time after 2004 in the case of a Medicare+Choice

eligible individual who is institutionalized (as defined by the

Secretary), the individual may elect under subsection (a)(1) of

this section -

(i) to enroll in a Medicare+Choice plan; or

(ii) to change the Medicare+Choice plan in which the

individual is enrolled.

(3) Annual, coordinated election period

(A) In general

Subject to paragraph (5), each individual who is eligible to

make an election under this section may change such election

during an annual, coordinated election period.

(B) Annual, coordinated election period

For purposes of this section, the term "annual, coordinated

election period" means, with respect to a year before 2003 and

after 2005, the month of November before such year and with

respect to 2003, 2004, and 2005, the period beginning on

November 15 and ending on December 31 of the year before such

year.

(C) Medicare+Choice health information fairs

During the fall season of each year (beginning with 1999), in

conjunction with the annual coordinated election period defined

in subparagraph (B), the Secretary shall provide for a

nationally coordinated educational and publicity campaign to

inform Medicare+Choice eligible individuals about

Medicare+Choice plans and the election process provided under

this section.

(D) Special information campaign in 1998

During November 1998 the Secretary shall provide for an

educational and publicity campaign to inform Medicare+Choice

eligible individuals about the availability of Medicare+Choice

plans, and eligible organizations with risk-sharing contracts

under section 1395mm of this title, offered in different areas

and the election process provided under this section.

(4) Special election periods

Effective as of January 1, 2005, an individual may discontinue

an election of a Medicare+ÐChoice plan offered by a

Medicare+Choice organization other than during an annual,

coordinated election period and make a new election under this

section if -

(A)(i) the certification of the organization or plan under

this part has been terminated, or the organization or plan has

notified the individual of an impending termination of such

certification; or

(ii) the organization has terminated or otherwise

discontinued providing the plan in the area in which the

individual resides, or has notified the individual of an

impending termination or discontinuation of such plan;

(B) the individual is no longer eligible to elect the plan

because of a change in the individual's place of residence or

other change in circumstances (specified by the Secretary, but

not including termination of the individual's enrollment on the

basis described in clause (i) or (ii) of subsection (g)(3)(B)

of this section);

(C) the individual demonstrates (in accordance with

guidelines established by the Secretary) that -

(i) the organization offering the plan substantially

violated a material provision of the organization's contract

under this part in relation to the individual (including the

failure to provide an enrollee on a timely basis medically

necessary care for which benefits are available under the

plan or the failure to provide such covered care in

accordance with applicable quality standards); or

(ii) the organization (or an agent or other entity acting

on the organization's behalf) materially misrepresented the

plan's provisions in marketing the plan to the individual; or

(D) the individual meets such other exceptional conditions as

the Secretary may provide.

Effective as of January 1, 2005, an individual who, upon first

becoming eligible for benefits under part A of this subchapter at

age 65, enrolls in a Medicare+Choice plan under this part, the

individual may discontinue the election of such plan, and elect

coverage under the original fee-for-service plan, at any time

during the 12-month period beginning on the effective date of

such enrollment.

(5) Special rules for MSA plans

Notwithstanding the preceding provisions of this subsection, an

individual -

(A) may elect an MSA plan only during -

(i) an initial open enrollment period described in

paragraph (1),

(ii) an annual, coordinated election period described in

paragraph (3)(B), or

(iii) the month of November 1998;

(B) subject to subparagraph (C), may not discontinue an

election of an MSA plan except during the periods described in

clause (ii) or (iii) of subparagraph (A) and under the first

sentence of paragraph (4); and

(C) who elects an MSA plan during an annual, coordinated

election period, and who never previously had elected such a

plan, may revoke such election, in a manner determined by the

Secretary, by not later than December 15 following the date of

the election.

(6) Open enrollment periods

Subject to paragraph (5), a Medicare+Choice organization -

(A) shall accept elections or changes to elections during the

initial enrollment periods described in paragraph (1), during

the month of November 1998 and during the annual, coordinated

election period under paragraph (3) for each subsequent year,

and during special election periods described in the first

sentence of paragraph (4); and

(B) may accept other changes to elections at such other times

as the organization provides.

(f) Effectiveness of elections and changes of elections

(1) During initial coverage election period

An election of coverage made during the initial coverage

election period under subsection (e)(1)(A) of this section shall

take effect upon the date the individual becomes entitled to

benefits under part A of this subchapter and enrolled under part

B of this subchapter, except as the Secretary may provide

(consistent with section 1395q of this title) in order to prevent

retroactive coverage.

(2) During continuous open enrollment periods

An election or change of coverage made under subsection (e)(2)

of this section shall take effect with the first day of the first

calendar month following the date on which the election or change

is made.

(3) Annual, coordinated election period

An election or change of coverage made during an annual,

coordinated election period (as defined in subsection (e)(3)(B)

of this section) in a year shall take effect as of the first day

of the following year.

(4) Other periods

An election or change of coverage made during any other period

under subsection (e)(4) of this section shall take effect in such

manner as the Secretary provides in a manner consistent (to the

extent practicable) with protecting continuity of health benefit

coverage.

(g) Guaranteed issue and renewal

(1) In general

Except as provided in this subsection, a Medicare+Choice

organization shall provide that at any time during which

elections are accepted under this section with respect to a

Medicare+Choice plan offered by the organization, the

organization will accept without restrictions individuals who are

eligible to make such election.

(2) Priority

If the Secretary determines that a Medicare+Choice

organization, in relation to a Medicare+Choice plan it offers,

has a capacity limit and the number of Medicare+Choice eligible

individuals who elect the plan under this section exceeds the

capacity limit, the organization may limit the election of

individuals of the plan under this section but only if priority

in election is provided -

(A) first to such individuals as have elected the plan at the

time of the determination, and

(B) then to other such individuals in such a manner that does

not discriminate, on a basis described in section 1395w-22(b)

of this title, among the individuals (who seek to elect the

plan).

The preceding sentence shall not apply if it would result in the

enrollment of enrollees substantially nonrepresentative, as

determined in accordance with regulations of the Secretary, of

the medicare population in the service area of the plan.

(3) Limitation on termination of election

(A) In general

Subject to subparagraph (B), a Medicare+ÐChoice organization

may not for any reason terminate the election of any individual

under this section for a Medicare+Choice plan it offers.

(B) Basis for termination of election

A Medicare+Choice organization may terminate an individual's

election under this section with respect to a Medicare+Choice

plan it offers if -

(i) any Medicare+Choice monthly basic and supplemental

beneficiary premiums required with respect to such plan are

not paid on a timely basis (consistent with standards under

section 1395w-26 of this title that provide for a grace

period for late payment of such premiums),

(ii) the individual has engaged in disruptive behavior (as

specified in such standards), or

(iii) the plan is terminated with respect to all

individuals under this part in the area in which the

individual resides.

(C) Consequence of termination

(i) Terminations for cause

Any individual whose election is terminated under clause

(i) or (ii) of subparagraph (B) is deemed to have elected the

original medicare fee-for-service program option described in

subsection (a)(1)(A) of this section.

(ii) Termination based on plan termination or service area

reduction

Any individual whose election is terminated under

subparagraph (B)(iii) shall have a special election period

under subsection (e)(4)(A) of this section in which to change

coverage to coverage under another Medicare+Choice plan. Such

an individual who fails to make an election during such

period is deemed to have chosen to change coverage to the

original medicare fee-for-service program option described in

subsection (a)(1)(A) of this section.

(D) Organization obligation with respect to election forms

Pursuant to a contract under section 1395w-27 of this title,

each Medicare+Choice organization receiving an election form

under subsection (c)(2) of this section shall transmit to the

Secretary (at such time and in such manner as the Secretary may

specify) a copy of such form or such other information

respecting the election as the Secretary may specify.

(h) Approval of marketing material and application forms

(1) Submission

No marketing material or application form may be distributed by

a Medicare+Choice organization to (or for the use of)

Medicare+ÐChoice eligible individuals unless -

(A) at least 45 days (or 10 days in the case described in

paragraph (5)) before the date of distribution the organization

has submitted the material or form to the Secretary for review,

and

(B) the Secretary has not disapproved the distribution of

such material or form.

(2) Review

The standards established under section 1395w-26 of this title

shall include guidelines for the review of any material or form

submitted and under such guidelines the Secretary shall

disapprove (or later require the correction of) such material or

form if the material or form is materially inaccurate or

misleading or otherwise makes a material misrepresentation.

(3) Deemed approval (1-stop shopping)

In the case of material or form that is submitted under

paragraph (1)(A) to the Secretary or a regional office of the

Department of Health and Human Services and the Secretary or the

office has not disapproved the distribution of marketing material

or form under paragraph (1)(B) with respect to a Medicare+Choice

plan in an area, the Secretary is deemed not to have disapproved

such distribution in all other areas covered by the plan and

organization except with regard to that portion of such material

or form that is specific only to an area involved.

(4) Prohibition of certain marketing practices

Each Medicare+Choice organization shall conform to fair

marketing standards, in relation to Medicare+Choice plans offered

under this part, included in the standards established under

section 1395w-26 of this title. Such standards -

(A) shall not permit a Medicare+Choice organization to

provide for cash or other monetary rebates as an inducement for

enrollment or otherwise, and

(B) may include a prohibition against a Medicare+Choice

organization (or agent of such an organization) completing any

portion of any election form used to carry out elections under

this section on behalf of any individual.

(5) Special treatment of marketing material following model

marketing language

In the case of marketing material of an organization that uses,

without modification, proposed model language specified by the

Secretary, the period specified in paragraph (1)(A) shall be

reduced from 45 days to 10 days.

(i) Effect of election of Medicare+Choice plan option

(1) Payments to organizations

Subject to sections 1395w-22(a)(5), 1395w-23(g), 1395w-23(h),

1395ww(d)(11), and 1395ww(h)(3)(D) of this title, payments under

a contract with a Medicare+Choice organization under section

1395w-23(a) of this title with respect to an individual electing

a Medicare+ÐChoice plan offered by the organization shall be

instead of the amounts which (in the absence of the contract)

would otherwise be payable under parts A and B of this subchapter

for items and services furnished to the individual.

(2) Only organization entitled to payment

Subject to sections 1395w-23(e), 1395w-23(g), 1395w-23(h),

1395w-27(f)(2), 1395ww(d)(11), and 1395ww(h)(3)(D) of this title,

only the Medicare+Choice organization shall be entitled to

receive payments from the Secretary under this subchapter for

services furnished to the individual.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1851, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 275; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(A), title V, Secs. 501(a)(1), (b), (c), 502(a), 519(a)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-367, 1501A-378 to 1501A-380,

1501A-385; Pub. L. 106-554, Sec. 1(a)(6) [title VI, Secs.

606(a)(2)(C), 613(a), 619(a), 620(a)], Dec. 21, 2000, 114 Stat.

2763, 2763A-558, 2763A-560, 2763A-563; Pub. L. 107-188, title V,

Sec. 532(a), (c)(1), June 12, 2002, 116 Stat. 696.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in text, are

classified to section 1395c et seq. and section 1395j et seq.,

respectively, of this title.

-MISC1-

AMENDMENTS

2002 - Subsec. (e)(2)(A). Pub. L. 107-188, Sec. 532(a)(1),

substituted "through 2004" for "through 2001" in heading and

"during the period beginning January 1, 1998, and ending on

December 31, 2004" for "during 1998, 1999, 2000, and 2001" in text.

Subsec. (e)(2)(B). Pub. L. 107-188, Sec. 532(a)(2), substituted

"during 2005" for "during 2002" in heading.

Subsec. (e)(2)(B)(i), (C)(i). Pub. L. 107-188, Sec. 532(a)(3),

substituted "2005" for "2002" wherever appearing.

Subsec. (e)(2)(D). Pub. L. 107-188, Sec. 532(a)(4), substituted

"2004" for "2001".

Subsec. (e)(3)(B). Pub. L. 107-188, Sec. 532(c)(1)(A),

substituted "means, with respect to a year before 2003 and after

2005, the month of November before such year and with respect to

2003, 2004, and 2005, the period beginning on November 15 and

ending on December 31 of the year before such year" for "means,

with respect to a calendar year (beginning with 2000), the month of

November before such year".

Subsec. (e)(4). Pub. L. 107-188, Sec. 532(a)(5), substituted

"2005" for "2002" in introductory and concluding provisions.

Subsec. (e)(6)(A). Pub. L. 107-188, Sec. 532(c)(1)(B),

substituted "during the annual, coordinated election period under

paragraph (3) for each subsequent year" for "each subsequent year

(as provided in paragraph (3))".

2000 - Subsec. (a)(3)(B). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 620(a)], substituted "except that - " and cls. (i) and

(ii) for "except that an individual who develops end-stage renal

disease while enrolled in a Medicare+Choice plan may continue to be

enrolled in that plan."

Subsec. (d)(4)(B). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

606(a)(2)(C)], designated existing provisions as cl. (i), inserted

heading, and added cl. (ii).

Subsec. (f)(2). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

619(a)], struck out ", except that if such election or change is

made after the 10th day of any calendar month, then the election or

change shall not take effect until the first day of the second

calendar month following the date on which the election or change

is made" before period at end.

Subsec. (h)(1)(A). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

613(a)(1)], inserted "(or 10 days in the case described in

paragraph (5))" after "45 days".

Subsec. (h)(5). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

613(a)(2)], added par. (5).

1999 - Subsec. (b)(1)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title

V, Sec. 501(c)(1)], inserted "and except as provided in

subparagraph (C)" after "may otherwise provide".

Subsec. (b)(1)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 501(c)(2)], added subpar. (C).

Subsec. (e)(2)(B)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 501(b)(1)], inserted "and subparagraph (D)" after "clause

(ii)".

Subsec. (e)(2)(C)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 501(b)(2)], inserted "and subparagraph (D)" after "clause

(ii)".

Subsec. (e)(2)(D). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 501(b)(3)], added subpar. (D).

Subsec. (e)(3)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 519(a)], substituted "During the fall season" for "In the

month of November".

Subsec. (e)(4)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 501(a)(1)], added subpar. (A) and struck out former subpar.

(A) which read as follows: "the organization's or plan's

certification under this part has been terminated or the

organization has terminated or otherwise discontinued providing the

plan in the area in which the individual resides;".

Subsec. (f)(2). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

502(a)], inserted "or change" before "is made" and ", except that

if such election or change is made after the 10th day of any

calendar month, then the election or change shall not take effect

until the first day of the second calendar month following the date

on which the election or change is made" before the period at end.

Subsec. (i)(2). Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(A)], struck out "and" after "1395w-27(f)(2),".

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-188, title V, Sec. 532(c)(2), June 12, 2002, 116

Stat. 696, provided that: "The amendment made by paragraph (1)

[amending this section] shall apply to the annual, coordinated

election period for years beginning with 2003."

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by section 1(a)(6) [title VI, Sec. 606(a)(2)(C)] of

Pub. L. 106-554 applicable to years beginning with 2003, see

section 1(a)(6) [title VI, Sec. 606(b)] of Pub. L. 106-554, set out

as a note under section 1395r of this title.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 613(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-560, provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

marketing material submitted on or after January 1, 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 619(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-563, provided that: "The amendment made

by this section [amending this section] shall apply to elections

and changes of coverage made on or after June 1, 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 620(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-564, provided that:

"(1) In general. - The amendment made by subsection (a) [amending

this section] shall apply to terminations and discontinuations

occurring on or after the date of the enactment of this Act [Dec.

21, 2000].

"(2) Application to prior plan terminations. - Clause (ii) of

section 1851(a)(3)(B) of the Social Security Act [subsection

(a)(3)(B)(ii) of this section] (as inserted by subsection (a))

shall also apply to individuals whose enrollment in a

Medicare+Choice plan was terminated or discontinued after December

31, 1998, and before the date of the enactment of this Act. In

applying this paragraph, such an individual shall be treated, for

purposes of part C of title XVIII of the Social Security Act [this

part], as having discontinued enrollment in such a plan as of the

date of the enactment of this Act."

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(6)(A)] of

Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 501(d)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-379, provided that:

"(1) The amendments made by subsection (a) [amending this section

and section 1395ss of this title] apply to notices of impending

terminations or discontinuances made on or after the date of the

enactment of this Act [Nov. 29, 1999].

"(2) The amendments made by subsection (c) [amending this

section] apply to elections made on or after the date of the

enactment of this Act [Nov. 29, 1999] with respect to eliminations

of Medicare+Choice payment areas from a service area that occur

before, on, or after the date of the enactment of this Act."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 502(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-380, provided that: "The

amendments made by this section [amending this section] apply to

elections and changes of coverage made on or after January 1,

2000."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 519(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-385, provided that: "The

amendment made by subsection (a) [amending this section] first

applies to campaigns conducted beginning in 2000."

MEDPAC STUDY ON CONSUMER COALITIONS

Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec. 124], Dec. 21, 2000,

114 Stat. 2763, 2763A-478, provided that:

"(a) Study. - The Medicare Payment Advisory Commission shall

conduct a study that examines the use of consumer coalitions in the

marketing of Medicare+Choice plans under the medicare program under

title XVIII of the Social Security Act [this subchapter]. The study

shall examine -

"(1) the potential for increased efficiency in the medicare

program through greater beneficiary knowledge of their health

care options, decreased marketing costs of Medicare+Choice

organizations, and creation of a group market;

"(2) the implications of Medicare+Choice plans and medicare

supplemental policies (under section 1882 of the Social Security

Act (42 U.S.C. 1395ss)) offering medicare beneficiaries in the

same geographic location different benefits and premiums based on

their affiliation with a consumer coalition;

"(3) how coalitions should be governed, how they should be

accountable to the Secretary of Health and Human Services, and

how potential conflicts of interest in the activities of consumer

coalitions should be avoided; and

"(4) how such coalitions should be funded.

"(b) Report. - Not later than 1 year after the date of the

enactment of this Act [Dec. 21, 2000], the Commission shall submit

to Congress a report on the study conducted under subsection (a).

The report shall include a recommendation on whether and how a

demonstration project might be conducted for the operation of

consumer coalitions under the medicare program.

"(c) Consumer Coalition Defined. - For purposes of this section,

the term 'consumer coalition' means a nonprofit, community-based

group of organizations that -

"(1) provides information to medicare beneficiaries about their

health care options under the medicare program; and

"(2) negotiates benefits and premiums for medicare

beneficiaries who are members or otherwise affiliated with the

group of organizations with Medicare+Choice organizations

offering Medicare+Choice plans, issuers of medicare supplemental

policies, issuers of long-term care coverage, and pharmacy

benefit managers."

REPORT ON ACCOUNTING FOR VA AND DOD EXPENDITURES FOR MEDICARE

BENEFICIARIES

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 551],

Nov. 29, 1999, 113 Stat. 1536, 1501A-392, provided that: "Not later

[than] April 1, 2001, the Secretary of Health and Human Services,

jointly with the Secretaries of Defense and of Veterans Affairs,

shall submit to Congress a report on the estimated use of health

care services furnished by the Departments of Defense and of

Veterans Affairs to medicare beneficiaries, including both

beneficiaries under the original medicare fee-for-service program

and under the Medicare+Choice program. The report shall include an

analysis of how best to properly account for expenditures for such

services in the computation of Medicare+Choice capitation rates."

REPORT ON MEDICARE MSA (MEDICAL SAVINGS ACCOUNT) PLANS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 552(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-393, provided that: "Not later

than 1 year after the date of the enactment of this Act [Nov. 29,

1999], the Medicare Payment Assessment Commission shall submit to

Congress a report on specific legislative changes that should be

made to make MSA plans (as defined in section 1859(b)(3) of the

Social Security Act, 42 U.S.C. 1395w-29(b)(3) [1395w-28(b)(3)]) a

viable option under the Medicare+Choice program."

GAO AUDIT AND REPORTS ON PROVISION OF MEDICARE+CHOICE HEALTH

INFORMATION TO BENEFICIARIES

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 553(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-393, provided that:

"(1) In general. - Beginning in 2000, the Comptroller General

shall conduct an annual audit of the expenditures by the Secretary

of Health and Human Services during the preceding year in providing

information regarding the Medicare+Choice program under part C of

title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.)

to eligible medicare beneficiaries.

"(3) [(2)] Reports. - Not later than March 31 of 2001, 2004,

2007, and 2010, the Comptroller General shall submit a report to

Congress on the results of the audit of the expenditures of the

preceding 3 years conducted pursuant to subsection (a) [enacting

provisions set out as a note under section 1395ss of this title],

together with an evaluation of the effectiveness of the means used

by the Secretary of Health and Human Services in providing

information regarding the Medicare+Choice program under part C of

title XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.)

to eligible medicare beneficiaries."

ENROLLMENT TRANSITION RULE

Section 4002(c) of Pub. L. 105-33 provided that: "An individual

who is enrolled on December 31, 1998, with an eligible organization

under section 1876 of the Social Security Act (42 U.S.C. 1395mm)

shall be considered to be enrolled with that organization on

January 1, 1999, under part C of title XVIII of such Act [this

part] if that organization has a contract under that part for

providing services on January 1, 1999 (unless the individual has

disenrolled effective on that date)."

SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL

Section 4002(f)(2) of title IV of Pub. L. 105-33 provided that:

"Not later than 6 months after the date of the enactment of this

Act [Aug. 5, 1997], the Secretary of Health and Human Services

shall submit to the appropriate committees of Congress a

legislative proposal providing for such technical and conforming

amendments in the law as are required by the provisions of this

chapter [chapter 1 (Secs. 4001-4006) of subtitle A of title IV of

Pub. L. 105-33, see Tables for classification]."

REPORT ON INTEGRATION AND TRANSITION

Section 4014(c) of Pub. L. 105-33 provided that:

"(1) In general. - The Secretary of Health and Human Services

shall submit to Congress, by not later than January 1, 1999, a plan

for the integration of health plans offered by social health

maintenance organizations (including SHMO I and SHMO II sites

developed under section 2355 of the Deficit Reduction Act of 1984

[Pub. L. 98-369, 98 Stat. 1103] and under the amendment made by

section 4207(b)(3)(B)(i) of OBRA-1990 [Pub. L. 101-508, amending

provisions set out as a note under section 1395pp of this title],

respectively) and similar plans as an option under the

Medicare+Choice program under part C of title XVIII of the Social

Security Act [this part].

"(2) Provision for transition. - Such plan shall include a

transition for social health maintenance organizations operating

under demonstration project authority under such section.

"(3) Payment policy. - The report shall also include

recommendations on appropriate payment levels for plans offered by

such organizations, including an analysis of the application of

risk adjustment factors appropriate to the population served by

such organizations."

MEDICARE ENROLLMENT DEMONSTRATION PROJECT

Section 4018 of Pub. L. 105-33 provided that:

"(a) Demonstration Project. -

"(1) Establishment. - The Secretary shall implement a

demonstration project (in this section referred to as the

'project') for the purpose of evaluating the use of a third-party

contractor to conduct the Medicare+Choice plan enrollment and

disenrollment functions, as described in part C of title XVIII of

the Social Security Act [this part] (as added by section 4001 of

this Act), in an area.

"(2) Consultation. - Before implementing the project under this

section, the Secretary shall consult with affected parties on -

"(A) the design of the project;

"(B) the selection criteria for the third-party contractor;

and

"(C) the establishment of performance standards, as described

in paragraph (3).

"(3) Performance standards. -

"(A) In general. - The Secretary shall establish performance

standards for the accuracy and timeliness of the

Medicare+Choice plan enrollment and disenrollment functions

performed by the third-party contractor.

"(B) Noncompliance. - In the event that the third-party

contractor is not in substantial compliance with the

performance standards established under subparagraph (A), such

enrollment and disenrollment functions shall be performed by

the Medicare+Choice plan until the Secretary appoints a new

third-party contractor.

"(b) Report to Congress. - The Secretary shall periodically

report to Congress on the progress of the project conducted

pursuant to this section.

"(c) Waiver Authority. - The Secretary shall waive compliance

with the requirements of part C of title XVIII of the Social

Security Act [this part] (as amended by section 4001 of this Act)

to such extent and for such period as the Secretary determines is

necessary to conduct the project.

"(d) Duration. - A demonstration project under this section shall

be conducted for a 3-year period.

"(e) Separate From Other Demonstration Projects. - A project

implemented by the Secretary under this section shall not be

conducted in conjunction with any other demonstration project."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1320b-5, 1395w-22,

1395w-23, 1395w-24, 1395w-27, 1395w-28, 1395mm, 1395nn, 1395ss,

1395ggg of this title.

-End-

-CITE-

42 USC Sec. 1395w-22 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-22. Benefits and beneficiary protections

-STATUTE-

(a) Basic benefits

(1) In general

Except as provided in section 1395w-28(b)(3) of this title for

MSA plans, each Medicare+ÐChoice plan shall provide to members

enrolled under this part, through providers and other persons

that meet the applicable requirements of this subchapter and part

A of subchapter XI of this chapter -

(A) those items and services (other than hospice care) for

which benefits are available under parts A and B of this

subchapter to individuals residing in the area served by the

plan, and

(B) additional benefits required under section

1395w-24(f)(1)(A) of this title.

(2) Satisfaction of requirement

(A) In general

A Medicare+Choice plan (other than an MSA plan) offered by a

Medicare+Choice organization satisfies paragraph (1)(A), with

respect to benefits for items and services furnished other than

through a provider or other person that has a contract with the

organization offering the plan, if the plan provides payment in

an amount so that -

(i) the sum of such payment amount and any cost sharing

provided for under the plan, is equal to at least

(ii) the total dollar amount of payment for such items and

services as would otherwise be authorized under parts A and B

of this subchapter (including any balance billing permitted

under such parts).

(B) Reference to related provisions

For provision relating to -

(i) limitations on balance billing against Medicare+Choice

organizations for non-contract providers, see subsection (k)

of this section and section 1395cc(a)(1)(O) of this title,

and

(ii) limiting actuarial value of enrollee liability for

covered benefits, see section 1395w-24(e) of this title.

(C) Election of uniform coverage policy

In the case of a Medicare+Choice organization that offers a

Medicare+Choice plan in an area in which more than one local

coverage policy is applied with respect to different parts of

the area, the organization may elect to have the local coverage

policy for the part of the area that is most beneficial to

Medicare+Choice enrollees (as identified by the Secretary)

apply with respect to all Medicare+Choice enrollees enrolled in

the plan.

(3) Supplemental benefits

(A) Benefits included subject to Secretary's approval

Each Medicare+Choice organization may provide to individuals

enrolled under this part, other than under an MSA plan (without

affording those individuals an option to decline the coverage),

supplemental health care benefits that the Secretary may

approve. The Secretary shall approve any such supplemental

benefits unless the Secretary determines that including such

supplemental benefits would substantially discourage enrollment

by Medicare+Choice eligible individuals with the organization.

(B) At enrollees' option

(i) In general

Subject to clause (ii), a Medicare+Choice organization may

provide to individuals enrolled under this part supplemental

health care benefits that the individuals may elect, at their

option, to have covered.

(ii) Special rule for MSA plans

A Medicare+Choice organization may not provide, under an

MSA plan, supplemental health care benefits that cover the

deductible described in section 1395w-28(b)(2)(B) of this

title. In applying the previous sentence, health benefits

described in section 1395ss(u)(2)(B) of this title shall not

be treated as covering such deductible.

(C) Application to Medicare+Choice private fee-for-service

plans

Nothing in this paragraph shall be construed as preventing a

Medicare+Choice private fee-for-service plan from offering

supplemental benefits that include payment for some or all of

the balance billing amounts permitted consistent with

subsection (k) of this section and coverage of additional

services that the plan finds to be medically necessary.

(4) Organization as secondary payer

Notwithstanding any other provision of law, a Medicare+Choice

organization may (in the case of the provision of items and

services to an individual under a Medicare+Choice plan under

circumstances in which payment under this subchapter is made

secondary pursuant to section 1395y(b)(2) of this title) charge

or authorize the provider of such services to charge, in

accordance with the charges allowed under a law, plan, or policy

described in such section -

(A) the insurance carrier, employer, or other entity which

under such law, plan, or policy is to pay for the provision of

such services, or

(B) such individual to the extent that the individual has

been paid under such law, plan, or policy for such services.

(5) National coverage determinations and legislative changes in

benefits

If there is a national coverage determination or legislative

change in benefits required to be provided under this part made

in the period beginning on the date of an announcement under

section 1395w-23(b) of this title and ending on the date of the

next announcement under such section and the Secretary projects

that the determination will result in a significant change in the

costs to a Medicare+Choice organization of providing the benefits

that are the subject of such national coverage determination and

that such change in costs was not incorporated in the

determination of the annual Medicare+Choice capitation rate under

section 1395w-23 of this title included in the announcement made

at the beginning of such period, then, unless otherwise required

by law -

(A) such determination or legislative change in benefits

shall not apply to contracts under this part until the first

contract year that begins after the end of such period, and

(B) if such coverage determination or legislative change

provides for coverage of additional benefits or coverage under

additional circumstances, section 1395w-21(i)(1) of this title

shall not apply to payment for such additional benefits or

benefits provided under such additional circumstances until the

first contract year that begins after the end of such period.

The projection under the previous sentence shall be based on an

analysis by the Chief Actuary of the Health Care Financing

Administration of the actuarial costs associated with the

coverage determination or legislative change in benefits.

(b) Antidiscrimination

(1) Beneficiaries

(A) In general

A Medicare+Choice organization may not deny, limit, or

condition the coverage or provision of benefits under this

part, for individuals permitted to be enrolled with the

organization under this part, based on any health

status-related factor described in section 300gg-1(a)(1) of

this title.

(B) Construction

Subparagraph (A) shall not be construed as requiring a

Medicare+Choice organization to enroll individuals who are

determined to have end-stage renal disease, except as provided

under section 1395w-21(a)(3)(B) of this title.

(2) Providers

A Medicare+Choice organization shall not discriminate with

respect to participation, reimbursement, or indemnification as to

any provider who is acting within the scope of the provider's

license or certification under applicable State law, solely on

the basis of such license or certification. This paragraph shall

not be construed to prohibit a plan from including providers only

to the extent necessary to meet the needs of the plan's enrollees

or from establishing any measure designed to maintain quality and

control costs consistent with the responsibilities of the plan.

(c) Disclosure requirements

(1) Detailed description of plan provisions

A Medicare+Choice organization shall disclose, in clear,

accurate, and standardized form to each enrollee with a

Medicare+Choice plan offered by the organization under this part

at the time of enrollment and at least annually thereafter, the

following information regarding such plan:

(A) Service area

The plan's service area.

(B) Benefits

Benefits offered under the plan, including information

described in section 1395w-21(d)(3)(A) of this title and

exclusions from coverage and, if it is an MSA plan, a

comparison of benefits under such a plan with benefits under

other Medicare+Choice plans.

(C) Access

The number, mix, and distribution of plan providers,

out-of-network coverage (if any) provided by the plan, and any

point-of-service option (including the supplemental premium for

such option).

(D) Out-of-area coverage

Out-of-area coverage provided by the plan.

(E) Emergency coverage

Coverage of emergency services, including -

(i) the appropriate use of emergency services, including

use of the 911 telephone system or its local equivalent in

emergency situations and an explanation of what constitutes

an emergency situation;

(ii) the process and procedures of the plan for obtaining

emergency services; and

(iii) the locations of (I) emergency departments, and (II)

other settings, in which plan physicians and hospitals

provide emergency services and post-stabilization care.

(F) Supplemental benefits

Supplemental benefits available from the organization

offering the plan, including -

(i) whether the supplemental benefits are optional,

(ii) the supplemental benefits covered, and

(iii) the Medicare+Choice monthly supplemental beneficiary

premium for the supplemental benefits.

(G) Prior authorization rules

Rules regarding prior authorization or other review

requirements that could result in nonpayment.

(H) Plan grievance and appeals procedures

All plan appeal or grievance rights and procedures.

(I) Quality assurance program

A description of the organization's quality assurance program

under subsection (e) of this section.

(2) Disclosure upon request

Upon request of a Medicare+Choice eligible individual, a

Medicare+Choice organization must provide the following

information to such individual:

(A) The general coverage information and general comparative

plan information made available under clauses (i) and (ii) of

section 1395w-21(d)(2)(A) of this title.

(B) Information on procedures used by the organization to

control utilization of services and expenditures.

(C) Information on the number of grievances,

redeterminations, and appeals and on the disposition in the

aggregate of such matters.

(D) An overall summary description as to the method of

compensation of participating physicians.

(d) Access to services

(1) In general

A Medicare+Choice organization offering a Medicare+Choice plan

may select the providers from whom the benefits under the plan

are provided so long as -

(A) the organization makes such benefits available and

accessible to each individual electing the plan within the plan

service area with reasonable promptness and in a manner which

assures continuity in the provision of benefits;

(B) when medically necessary the organization makes such

benefits available and accessible 24 hours a day and 7 days a

week;

(C) the plan provides for reimbursement with respect to

services which are covered under subparagraphs (A) and (B) and

which are provided to such an individual other than through the

organization, if -

(i) the services were not emergency services (as defined in

paragraph (3)), but (I) the services were medically necessary

and immediately required because of an unforeseen illness,

injury, or condition, and (II) it was not reasonable given

the circumstances to obtain the services through the

organization,

(ii) the services were renal dialysis services and were

provided other than through the organization because the

individual was temporarily out of the plan's service area, or

(iii) the services are maintenance care or

post-stabilization care covered under the guidelines

established under paragraph (2);

(D) the organization provides access to appropriate

providers, including credentialed specialists, for medically

necessary treatment and services; and

(E) coverage is provided for emergency services (as defined

in paragraph (3)) without regard to prior authorization or the

emergency care provider's contractual relationship with the

organization.

(2) Guidelines respecting coordination of post-stabilization care

A Medicare+Choice plan shall comply with such guidelines as the

Secretary may prescribe relating to promoting efficient and

timely coordination of appropriate maintenance and

post-stabilization care of an enrollee after the enrollee has

been determined to be stable under section 1395dd of this title.

(3) "Emergency services" defined

In this subsection -

(A) In general

The term "emergency services" means, with respect to an

individual enrolled with an organization, covered inpatient and

outpatient services that -

(i) are furnished by a provider that is qualified to

furnish such services under this subchapter, and

(ii) are needed to evaluate or stabilize an emergency

medical condition (as defined in subparagraph (B)).

(B) Emergency medical condition based on prudent layperson

The term "emergency medical condition" means a medical

condition manifesting itself by acute symptoms of sufficient

severity (including severe pain) such that a prudent layperson,

who possesses an average knowledge of health and medicine,

could reasonably expect the absence of immediate medical

attention to result in -

(i) placing the health of the individual (or, with respect

to a pregnant woman, the health of the woman or her unborn

child) in serious jeopardy,

(ii) serious impairment to bodily functions, or

(iii) serious dysfunction of any bodily organ or part.

(4) Assuring access to services in Medicare+ÐChoice private

fee-for-service plans

In addition to any other requirements under this part, in the

case of a Medicare+Choice private fee-for-service plan, the

organization offering the plan must demonstrate to the Secretary

that the organization has sufficient number and range of health

care professionals and providers willing to provide services

under the terms of the plan. The Secretary shall find that an

organization has met such requirement with respect to any

category of health care professional or provider if, with respect

to that category of provider -

(A) the plan has established payment rates for covered

services furnished by that category of provider that are not

less than the payment rates provided for under part A of this

subchapter, part B of this subchapter, or both, for such

services, or

(B) the plan has contracts or agreements with a sufficient

number and range of providers within such category to provide

covered services under the terms of the plan,

or a combination of both. The previous sentence shall not be

construed as restricting the persons from whom enrollees under

such a plan may obtain covered benefits.

(e) Quality assurance program

(1) In general

Each Medicare+Choice organization must have arrangements,

consistent with any regulation, for an ongoing quality assurance

program for health care services it provides to individuals

enrolled with Medicare+Choice plans of the organization.

(2) Elements of program

(A) In general

The quality assurance program of an organization with respect

to a Medicare+Choice plan (other than a Medicare+Choice private

fee-for-service plan, a non-network MSA plan, or a preferred

provider organization plan) it offers shall -

(i) stress health outcomes and provide for the collection,

analysis, and reporting of data (in accordance with a quality

measurement system that the Secretary recognizes) that will

permit measurement of outcomes and other indices of the

quality of Medicare+Choice plans and organizations;

(ii) monitor and evaluate high volume and high risk

services and the care of acute and chronic conditions;

(iii) evaluate the continuity and coordination of care that

enrollees receive;

(iv) be evaluated on an ongoing basis as to its

effectiveness;

(v) include measures of consumer satisfaction;

(vi) provide the Secretary with such access to information

collected as may be appropriate to monitor and ensure the

quality of care provided under this part;

(vii) provide review by physicians and other health care

professionals of the process followed in the provision of

such health care services;

(viii) provide for the establishment of written protocols

for utilization review, based on current standards of medical

practice;

(ix) have mechanisms to detect both underutilization and

overutilization of services;

(x) after identifying areas for improvement, establish or

alter practice parameters;

(xi) take action to improve quality and assesses the

effectiveness of such action through systematic followup; and

(xii) make available information on quality and outcomes

measures to facilitate beneficiary comparison and choice of

health coverage options (in such form and on such quality and

outcomes measures as the Secretary determines to be

appropriate).

Such program shall include a separate focus (with respect to

all the elements described in this subparagraph) on racial and

ethnic minorities.

(B) Elements of program for organizations offering

Medicare+Choice private fee-for-service plans, non-network

MSA plans, and preferred provider organization plans

The quality assurance program of an organization with respect

to a Medicare+Choice private fee-for-service plan, a

non-network MSA plan, or a preferred provider organization plan

it offers shall -

(i) meet the requirements of clauses (i) through (vi) of

subparagraph (A);

(ii) insofar as it provides for the establishment of

written protocols for utilization review, base such protocols

on current standards of medical practice; and

(iii) have mechanisms to evaluate utilization of services

and inform providers and enrollees of the results of such

evaluation.

Such program shall include a separate focus (with respect to

all the elements described in this subparagraph) on racial and

ethnic minorities.

(C) "Non-network MSA plan" defined

In this subsection, the term "non-network MSA plan" means an

MSA plan offered by a Medicare+Choice organization that does

not provide benefits required to be provided by this part, in

whole or in part, through a defined set of providers under

contract, or under another arrangement, with the organization.

(D) Definition of preferred provider organization plan

In this paragraph, the term "preferred provider organization

plan" means a Medicare+Choice plan that -

(i) has a network of providers that have agreed to a

contractually specified reimbursement for covered benefits

with the organization offering the plan;

(ii) provides for reimbursement for all covered benefits

regardless of whether such benefits are provided within such

network of providers; and

(iii) is offered by an organization that is not licensed or

organized under State law as a health maintenance

organization.

(3) External review

(A) In general

Each Medicare+Choice organization shall, for each

Medicare+Choice plan it operates, have an agreement with an

independent quality review and improvement organization

approved by the Secretary to perform functions of the type

described in sections 1320c-3(a)(4)(B) and 1320c-3(a)(14) of

this title with respect to services furnished by

Medicare+Choice plans for which payment is made under this

subchapter. The previous sentence shall not apply to a

Medicare+ÐChoice private fee-for-service plan or a non-network

MSA plan that does not employ utilization review.

(B) Nonduplication of accreditation

Except in the case of the review of quality complaints, and

consistent with subparagraph (C), the Secretary shall ensure

that the external review activities conducted under

subparagraph (A) are not duplicative of review activities

conducted as part of the accreditation process.

(C) Waiver authority

The Secretary may waive the requirement described in

subparagraph (A) in the case of an organization if the

Secretary determines that the organization has consistently

maintained an excellent record of quality assurance and

compliance with other requirements under this part.

(4) Treatment of accreditation

(A) In general

The Secretary shall provide that a Medicare+Choice

organization is deemed to meet all the requirements described

in any specific clause of subparagraph (B) if the organization

is accredited (and periodically reaccredited) by a private

accrediting organization under a process that the Secretary has

determined assures that the accrediting organization applies

and enforces standards that meet or exceed the standards

established under section 1395w-26 of this title to carry out

the requirements in such clause.

(B) Requirements described

The provisions described in this subparagraph are the

following:

(i) Paragraphs (1) and (2) of this subsection (relating to

quality assurance programs).

(ii) Subsection (b) of this section (relating to

antidiscrimination).

(iii) Subsection (d) of this section (relating to access to

services).

(iv) Subsection (h) of this section (relating to

confidentiality and accuracy of enrollee records).

(v) Subsection (i) of this section (relating to information

on advance directives).

(vi) Subsection (j) of this section (relating to provider

participation rules).

(C) Timely action on applications

The Secretary shall determine, within 210 days after the date

the Secretary receives an application by a private accrediting

organization and using the criteria specified in section

1395bb(b)(2) of this title, whether the process of the private

accrediting organization meets the requirements with respect to

any specific clause in subparagraph (B) with respect to which

the application is made. The Secretary may not deny such an

application on the basis that it seeks to meet the requirements

with respect to only one, or more than one, such specific

clause.

(D) Construction

Nothing in this paragraph shall be construed as limiting the

authority of the Secretary under section 1395w-27 of this

title, including the authority to terminate contracts with

Medicare+Choice organizations under subsection (c)(2) of such

section.

(5) Report to Congress

(A) In general

Not later than 2 years after December 21, 2000, and

biennially thereafter, the Secretary shall submit to Congress a

report regarding how quality assurance programs conducted under

this subsection focus on racial and ethnic minorities.

(B) Contents of report

Each such report shall include the following:

(i) A description of the means by which such programs focus

on such racial and ethnic minorities.

(ii) An evaluation of the impact of such programs on

eliminating health disparities and on improving health

outcomes, continuity and coordination of care, management of

chronic conditions, and consumer satisfaction.

(iii) Recommendations on ways to reduce clinical outcome

disparities among racial and ethnic minorities.

(f) Grievance mechanism

Each Medicare+Choice organization must provide meaningful

procedures for hearing and resolving grievances between the

organization (including any entity or individual through which the

organization provides health care services) and enrollees with

Medicare+Choice plans of the organization under this part.

(g) Coverage determinations, reconsiderations, and appeals

(1) Determinations by organization

(A) In general

A Medicare+Choice organization shall have a procedure for

making determinations regarding whether an individual enrolled

with the plan of the organization under this part is entitled

to receive a health service under this section and the amount

(if any) that the individual is required to pay with respect to

such service. Subject to paragraph (3), such procedures shall

provide for such determination to be made on a timely basis.

(B) Explanation of determination

Such a determination that denies coverage, in whole or in

part, shall be in writing and shall include a statement in

understandable language of the reasons for the denial and a

description of the reconsideration and appeals processes.

(2) Reconsiderations

(A) In general

The organization shall provide for reconsideration of a

determination described in paragraph (1)(B) upon request by the

enrollee involved. The reconsideration shall be within a time

period specified by the Secretary, but shall be made, subject

to paragraph (3), not later than 60 days after the date of the

receipt of the request for reconsideration.

(B) Physician decision on certain reconsiderations

A reconsideration relating to a determination to deny

coverage based on a lack of medical necessity shall be made

only by a physician with appropriate expertise in the field of

medicine which necessitates treatment who is other than a

physician involved in the initial determination.

(3) Expedited determinations and reconsiderations

(A) Receipt of requests

(i) Enrollee requests

An enrollee in a Medicare+Choice plan may request, either

in writing or orally, an expedited determination under

paragraph (1) or an expedited reconsideration under paragraph

(2) by the Medicare+ÐChoice organization.

(ii) Physician requests

A physician, regardless whether the physician is affiliated

with the organization or not, may request, either in writing

or orally, such an expedited determination or

reconsideration.

(B) Organization procedures

(i) In general

The Medicare+Choice organization shall maintain procedures

for expediting organization determinations and

reconsiderations when, upon request of an enrollee, the

organization determines that the application of the normal

time frame for making a determination (or a reconsideration

involving a determination) could seriously jeopardize the

life or health of the enrollee or the enrollee's ability to

regain maximum function.

(ii) Expedition required for physician requests

In the case of a request for an expedited determination or

reconsideration made under subparagraph (A)(ii), the

organization shall expedite the determination or

reconsideration if the request indicates that the application

of the normal time frame for making a determination (or a

reconsideration involving a determination) could seriously

jeopardize the life or health of the enrollee or the

enrollee's ability to regain maximum function.

(iii) Timely response

In cases described in clauses (i) and (ii), the

organization shall notify the enrollee (and the physician

involved, as appropriate) of the determination or

reconsideration under time limitations established by the

Secretary, but not later than 72 hours of the time of receipt

of the request for the determination or reconsideration (or

receipt of the information necessary to make the

determination or reconsideration), or such longer period as

the Secretary may permit in specified cases.

(4) Independent review of certain coverage denials

The Secretary shall contract with an independent, outside

entity to review and resolve in a timely manner reconsiderations

that affirm denial of coverage, in whole or in part. The

provisions of section 1395ff(c)(5) of this title shall apply to

independent outside entities under contract with the Secretary

under this paragraph.

(5) Appeals

An enrollee with a Medicare+Choice plan of a Medicare+Choice

organization under this part who is dissatisfied by reason of the

enrollee's failure to receive any health service to which the

enrollee believes the enrollee is entitled and at no greater

charge than the enrollee believes the enrollee is required to pay

is entitled, if the amount in controversy is $100 or more, to a

hearing before the Secretary to the same extent as is provided in

section 405(b) of this title, and in any such hearing the

Secretary shall make the organization a party. If the amount in

controversy is $1,000 or more, the individual or organization

shall, upon notifying the other party, be entitled to judicial

review of the Secretary's final decision as provided in section

405(g) of this title, and both the individual and the

organization shall be entitled to be parties to that judicial

review. In applying subsections (b) and (g) of section 405 of

this title as provided in this paragraph, and in applying section

405(l) of this title thereto, any reference therein to the

Commissioner of Social Security or the Social Security

Administration shall be considered a reference to the Secretary

or the Department of Health and Human Services, respectively.

(h) Confidentiality and accuracy of enrollee records

Insofar as a Medicare+Choice organization maintains medical

records or other health information regarding enrollees under this

part, the Medicare+Choice organization shall establish procedures -

(1) to safeguard the privacy of any individually identifiable

enrollee information;

(2) to maintain such records and information in a manner that

is accurate and timely; and

(3) to assure timely access of enrollees to such records and

information.

(i) Information on advance directives

Each Medicare+Choice organization shall meet the requirement of

section 1395cc(f) of this title (relating to maintaining written

policies and procedures respecting advance directives).

(j) Rules regarding provider participation

(1) Procedures

Insofar as a Medicare+Choice organization offers benefits under

a Medicare+Choice plan through agreements with physicians, the

organization shall establish reasonable procedures relating to

the participation (under an agreement between a physician and the

organization) of physicians under such a plan. Such procedures

shall include -

(A) providing notice of the rules regarding participation,

(B) providing written notice of participation decisions that

are adverse to physicians, and

(C) providing a process within the organization for appealing

such adverse decisions, including the presentation of

information and views of the physician regarding such decision.

(2) Consultation in medical policies

A Medicare+Choice organization shall consult with physicians

who have entered into participation agreements with the

organization regarding the organization's medical policy,

quality, and medical management procedures.

(3) Prohibiting interference with provider advice to enrollees

(A) In general

Subject to subparagraphs (B) and (C), a Medicare+Choice

organization (in relation to an individual enrolled under a

Medicare+ÐChoice plan offered by the organization under this

part) shall not prohibit or otherwise restrict a covered health

care professional (as defined in subparagraph (D)) from

advising such an individual who is a patient of the

professional about the health status of the individual or

medical care or treatment for the individual's condition or

disease, regardless of whether benefits for such care or

treatment are provided under the plan, if the professional is

acting within the lawful scope of practice.

(B) Conscience protection

Subparagraph (A) shall not be construed as requiring a

Medicare+Choice plan to provide, reimburse for, or provide

coverage of a counseling or referral service if the

Medicare+ÐChoice organization offering the plan -

(i) objects to the provision of such service on moral or

religious grounds; and

(ii) in the manner and through the written

instrumentalities such Medicare+ÐChoice organization deems

appropriate, makes available information on its policies

regarding such service to prospective enrollees before or

during enrollment and to enrollees within 90 days after the

date that the organization or plan adopts a change in policy

regarding such a counseling or referral service.

(C) Construction

Nothing in subparagraph (B) shall be construed to affect

disclosure requirements under State law or under the Employee

Retirement Income Security Act of 1974 [29 U.S.C. 1001 et

seq.].

(D) "Health care professional" defined

For purposes of this paragraph, the term "health care

professional" means a physician (as defined in section 1395x(r)

of this title) or other health care professional if coverage

for the professional's services is provided under the

Medicare+Choice plan for the services of the professional. Such

term includes a podiatrist, optometrist, chiropractor,

psychologist, dentist, physician assistant, physical or

occupational therapist and therapy assistant, speech-language

pathologist, audiologist, registered or licensed practical

nurse (including nurse practitioner, clinical nurse specialist,

certified registered nurse anesthetist, and certified

nurse-midwife), licensed certified social worker, registered

respiratory therapist, and certified respiratory therapy

technician.

(4) Limitations on physician incentive plans

(A) In general

No Medicare+Choice organization may operate any physician

incentive plan (as defined in subparagraph (B)) unless the

following requirements are met:

(i) No specific payment is made directly or indirectly

under the plan to a physician or physician group as an

inducement to reduce or limit medically necessary services

provided with respect to a specific individual enrolled with

the organization.

(ii) If the plan places a physician or physician group at

substantial financial risk (as determined by the Secretary)

for services not provided by the physician or physician

group, the organization -

(I) provides stop-loss protection for the physician or

group that is adequate and appropriate, based on standards

developed by the Secretary that take into account the

number of physicians placed at such substantial financial

risk in the group or under the plan and the number of

individuals enrolled with the organization who receive

services from the physician or group, and

(II) conducts periodic surveys of both individuals

enrolled and individuals previously enrolled with the

organization to determine the degree of access of such

individuals to services provided by the organization and

satisfaction with the quality of such services.

(iii) The organization provides the Secretary with

descriptive information regarding the plan, sufficient to

permit the Secretary to determine whether the plan is in

compliance with the requirements of this subparagraph.

(B) "Physician incentive plan" defined

In this paragraph, the term "physician incentive plan" means

any compensation arrangement between a Medicare+Choice

organization and a physician or physician group that may

directly or indirectly have the effect of reducing or limiting

services provided with respect to individuals enrolled with the

organization under this part.

(5) Limitation on provider indemnification

A Medicare+Choice organization may not provide (directly or

indirectly) for a health care professional, provider of services,

or other entity providing health care services (or group of such

professionals, providers, or entities) to indemnify the

organization against any liability resulting from a civil action

brought for any damage caused to an enrollee with a

Medicare+Choice plan of the organization under this part by the

organization's denial of medically necessary care.

(6) Special rules for Medicare+Choice private fee-for-service

plans

For purposes of applying this part (including subsection (k)(1)

of this section) and section 1395cc(a)(1)(O) of this title, a

hospital (or other provider of services), a physician or other

health care professional, or other entity furnishing health care

services is treated as having an agreement or contract in effect

with a Medicare+Choice organization (with respect to an

individual enrolled in a Medicare+Choice private fee-for-service

plan it offers), if -

(A) the provider, professional, or other entity furnishes

services that are covered under the plan to such an enrollee;

and

(B) before providing such services, the provider,

professional, or other entity -

(i) has been informed of the individual's enrollment under

the plan, and

(ii) either -

(I) has been informed of the terms and conditions of

payment for such services under the plan, or

(II) is given a reasonable opportunity to obtain

information concerning such terms and conditions,

in a manner reasonably designed to effect informed agreement

by a provider.

The previous sentence shall only apply in the absence of an

explicit agreement between such a provider, professional, or

other entity and the Medicare+Choice organization.

(k) Treatment of services furnished by certain providers

(1) In general

Except as provided in paragraph (2), a physician or other

entity (other than a provider of services) that does not have a

contract establishing payment amounts for services furnished to

an individual enrolled under this part with a Medicare+Choice

organization described in section 1395w-21(a)(2)(A) of this title

shall accept as payment in full for covered services under this

subchapter that are furnished to such an individual the amounts

that the physician or other entity could collect if the

individual were not so enrolled. Any penalty or other provision

of law that applies to such a payment with respect to an

individual entitled to benefits under this subchapter (but not

enrolled with a Medicare+Choice organization under this part)

also applies with respect to an individual so enrolled.

(2) Application to Medicare+Choice private fee-for-service plans

(A) Balance billing limits under Medicare+ÐChoice private

fee-for-service plans in case of contract providers

(i) In general

In the case of an individual enrolled in a Medicare+Choice

private fee-for-service plan under this part, a physician,

provider of services, or other entity that has a contract

(including through the operation of subsection (j)(6) of this

section) establishing a payment rate for services furnished

to the enrollee shall accept as payment in full for covered

services under this subchapter that are furnished to such an

individual an amount not to exceed (including any

deductibles, coinsurance, copayments, or balance billing

otherwise permitted under the plan) an amount equal to 115

percent of such payment rate.

(ii) Procedures to enforce limits

The Medicare+Choice organization that offers such a plan

shall establish procedures, similar to the procedures

described in section 1395w-4(g)(1)(A) of this title, in order

to carry out the previous sentence.

(iii) Assuring enforcement

If the Medicare+Choice organization fails to establish and

enforce procedures required under clause (ii), the

organization is subject to intermediate sanctions under

section 1395w-27(g) of this title.

(B) Enrollee liability for noncontract providers

For provision -

(i) establishing minimum payment rate in the case of

noncontract providers under a Medicare+Choice private

fee-for-service plan, see subsection (a)(2) of this section;

or

(ii) limiting enrollee liability in the case of covered

services furnished by such providers, see paragraph (1) and

section 1395cc(a)(1)(O) of this title.

(C) Information on beneficiary liability

(i) In general

Each Medicare+Choice organization that offers a

Medicare+Choice private fee-for-service plan shall provide

that enrollees under the plan who are furnished services for

which payment is sought under the plan are provided an

appropriate explanation of benefits (consistent with that

provided under parts A and B of this subchapter and, if

applicable, under medicare supplemental policies) that

includes a clear statement of the amount of the enrollee's

liability (including any liability for balance billing

consistent with this subsection) with respect to payments for

such services.

(ii) Advance notice before receipt of inpatient hospital

services and certain other services

In addition, such organization shall, in its terms and

conditions of payments to hospitals for inpatient hospital

services and for other services identified by the Secretary

for which the amount of the balance billing under

subparagraph (A) could be substantial, require the hospital

to provide to the enrollee, before furnishing such services

and if the hospital imposes balance billing under

subparagraph (A) -

(I) notice of the fact that balance billing is permitted

under such subparagraph for such services, and

(II) a good faith estimate of the likely amount of such

balance billing (if any), with respect to such services,

based upon the presenting condition of the enrollee.

(l) Return to home skilled nursing facilities for covered

post-hospital extended care services

(1) Ensuring return to home SNF

(A) In general

In providing coverage of post-hospital extended care

services, a Medicare+Choice plan shall provide for such

coverage through a home skilled nursing facility if the

following conditions are met:

(i) Enrollee election

The enrollee elects to receive such coverage through such

facility.

(ii) SNF agreement

The facility has a contract with the Medicare+Choice

organization for the provision of such services, or the

facility agrees to accept substantially similar payment under

the same terms and conditions that apply to similarly

situated skilled nursing facilities that are under contract

with the Medicare+Choice organization for the provision of

such services and through which the enrollee would otherwise

receive such services.

(B) Manner of payment to home SNF

The organization shall provide payment to the home skilled

nursing facility consistent with the contract or the agreement

described in subparagraph (A)(ii), as the case may be.

(2) No less favorable coverage

The coverage provided under paragraph (1) (including scope of

services, cost-sharing, and other criteria of coverage) shall be

no less favorable to the enrollee than the coverage that would be

provided to the enrollee with respect to a skilled nursing

facility the post-hospital extended care services of which are

otherwise covered under the Medicare+Choice plan.

(3) Rule of construction

Nothing in this subsection shall be construed to do the

following:

(A) To require coverage through a skilled nursing facility

that is not otherwise qualified to provide benefits under part

A of this subchapter for medicare beneficiaries not enrolled in

a Medicare+Choice plan.

(B) To prevent a skilled nursing facility from refusing to

accept, or imposing conditions upon the acceptance of, an

enrollee for the receipt of post-hospital extended care

services.

(4) Definitions

In this subsection:

(A) Home skilled nursing facility

The term "home skilled nursing facility" means, with respect

to an enrollee who is entitled to receive post-hospital

extended care services under a Medicare+Choice plan, any of the

following skilled nursing facilities:

(i) SNF residence at time of admission

The skilled nursing facility in which the enrollee resided

at the time of admission to the hospital preceding the

receipt of such post-hospital extended care services.

(ii) SNF in continuing care retirement community

A skilled nursing facility that is providing such services

through a continuing care retirement community (as defined in

subparagraph (B)) which provided residence to the enrollee at

the time of such admission.

(iii) SNF residence of spouse at time of discharge

The skilled nursing facility in which the spouse of the

enrollee is residing at the time of discharge from such

hospital.

(B) Continuing care retirement community

The term "continuing care retirement community" means, with

respect to an enrollee in a Medicare+Choice plan, an

arrangement under which housing and health-related services are

provided (or arranged) through an organization for the enrollee

under an agreement that is effective for the life of the

enrollee or for a specified period.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1852, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 286; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(B), title V, Secs. 518, 520(a)], Nov. 29, 1999, 113 Stat.

1536, 1501A-367, 1501A-384, 1501A-385; Pub. L. 106-554, Sec.

1(a)(6) [title V, Sec. 521(b), title VI, Secs. 611(b), 615, 616,

621(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-543, 2763A-560,

2763A-561, 2763A-564.)

-REFTEXT-

REFERENCES IN TEXT

Part A of subchapter XI of this chapter, referred to in subsec.

(a)(1)(A), is classified to section 1301 et seq. of this title.

Parts A and B of this subchapter, referred to in subsecs.

(a)(1)(A), (2)(A)(ii), (d)(4)(A), (k)(2)(C)(i), and (l)(3)(A), are

classified to sections 1395c et seq. and 1395j et seq.,

respectively, of this title.

The Employee Retirement Income Security Act of 1974, referred to

in subsec. (j)(3)(C), is Pub. L. 93-406, Sept. 2, 1974, 88 Stat.

832, as amended, which is classified principally to chapter 18

(Sec. 1001 et seq.) of Title 29, Labor. For complete classification

of this Act to the Code, see Short Title note set out under section

1001 of Title 29 and Tables.

-MISC1-

AMENDMENTS

2000 - Subsec. (a)(2)(C). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 615], added subpar. (C).

Subsec. (a)(5). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

611(b)(5)], inserted concluding provisions.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 611(b)(1), (2)],

inserted "and legislative changes in benefits" after "National

coverage determinations" in heading and inserted "or legislative

change in benefits required to be provided under this part" after

"there is a national coverage determination" in introductory

provisions.

Subsec. (a)(5)(A). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

611(b)(3)], inserted "or legislative change in benefits" after

"such determination".

Subsec. (a)(5)(B). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

611(b)(4)], inserted "or legislative change" after "if such

coverage determination".

Subsec. (e)(2)(A), (B). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 616(a)], inserted concluding provisions.

Subsec. (e)(5). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

616(b)], added par. (5).

Subsec. (g)(4). Pub. L. 106-554, Sec. 1(a)(6) [title V, Sec.

521(b)], inserted at end "The provisions of section 1395ff(c)(5) of

this title shall apply to independent outside entities under

contract with the Secretary under this paragraph."

Subsec. (l). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

621(a)], added subsec. (l).

1999 - Subsec. (a)(3)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(6)(B)(i)], struck out comma after "MSA plan" and

inserted comma after "the coverage)".

Subsec. (e)(2)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 520(a)(1)], substituted ", a non-network MSA plan, or a

preferred provider organization plan" for "or a non-network MSA

plan" in introductory provisions.

Subsec. (e)(2)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 520(a)(2)], substituted ", non-network MSA plans, and

preferred provider organization plans" for "and non-network MSA

plans" in heading and ", a non-network MSA plan, or a preferred

provider organization plan" for "or a non-network MSA plan" in

introductory provisions.

Subsec. (e)(2)(D). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 520(a)(3)], added subpar. (D).

Subsec. (e)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

518], amended heading and text of par. (4) generally. Prior to

amendment, text read as follows: "The Secretary shall provide that

a Medicare+Choice organization is deemed to meet requirements of

paragraphs (1) and (2) of this subsection and subsection (h) of

this section (relating to confidentiality and accuracy of enrollee

records) if the organization is accredited (and periodically

reaccredited) by a private organization under a process that the

Secretary has determined assures that the organization, as a

condition of accreditation, applies and enforces standards with

respect to the requirements involved that are no less stringent

than the standards established under section 1395w-26 of this title

to carry out the respective requirements."

Subsec. (g)(1)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(6)(B)(ii)(I)], inserted "or" after "in whole".

Subsec. (g)(3)(B)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(6)(B)(ii)(II)], inserted period at end.

Subsec. (h)(2). Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(B)(iii)], substituted a semicolon for a comma before

"and".

Subsec. (k)(2)(C)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(6)(B)(iv)], substituted "balance" for "balancing"

before "billing under subparagraph (A) could" in introductory

provisions.

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by section 1(a)(6) [title V, Sec. 521(b)] of Pub. L.

106-554 applicable with respect to initial determinations made on

or after Oct. 1, 2002, see section 1(a)(6) [title V, Sec. 521(d)]

of Pub. L. 106-554, set out as a note under section 1320c-3 of this

title.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 611(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-560, provided that: "The amendments

made by this section [amending this section and section 1395w-23 of

this title] are effective on the date of the enactment of this Act

[Dec. 21, 2000] and shall apply to national coverage determinations

and legislative changes in benefits occurring on or after such

date."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 621(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-565, provided that: "The amendment made

by subsection (a) [amending this section] shall apply with respect

to contracts entered into or renewed on or after the date of the

enactment of this Act [Dec. 21, 2000]."

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(6)(B)] of

Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 520(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-386, provided that: "The

amendments made by subsection (a) [amending this section] apply to

contract years beginning on or after January 1, 2000."

MEDPAC STUDY

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 621(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-565, provided that:

"(1) Study. - The Medicare Payment Advisory Commission shall

conduct a study analyzing the effects of the amendment made by

subsection (a) [amending this section] on Medicare+Choice

organizations. In conducting such study, the Commission shall

examine the effects (if any) such amendment has had -

"(A) on the scope of additional benefits provided under the

Medicare+Choice program;

"(B) on the administrative and other costs incurred by

Medicare+Choice organizations; and

"(C) on the contractual relationships between such

organizations and skilled nursing facilities.

"(2) Report. - Not later than 2 years after the date of the

enactment of this Act [Dec. 21, 2000], the Commission shall submit

to Congress a report on the study conducted under paragraph (1)."

TRANSITIONAL PASS-THROUGH OF ADDITIONAL COSTS UNDER MEDICARE+CHOICE

PROGRAM FOR 2000

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Sec. 227(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-355, provided that: "The

provisions of subparagraphs (A) and (B) of section 1852(a)(5) of

the Social Security Act (42 U.S.C. 1395w-22(a)(5)) shall apply with

respect to the coverage of additional benefits for

immunosuppressive drugs under the amendments made by this section

[amending sections 1395k and 1395x of this title] for drugs

furnished in 2000 in the same manner as if such amendments

constituted a national coverage determination described in the

matter in such section before subparagraph (A)."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-23,

1395w-24, 1395w-25, 1395w-27, 1395w-28, 1395ff, 1396u-2 of this

title.

-End-

-CITE-

42 USC Sec. 1395w-23 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-23. Payments to Medicare+Choice organizations

-STATUTE-

(a) Payments to organizations

(1) Monthly payments

(A) In general

Under a contract under section 1395w-27 of this title and

subject to subsections (e), (g), and (i) of this section and

section 1395w-28(e)(4) of this title, the Secretary shall make

monthly payments under this section in advance to each

Medicare+Choice organization, with respect to coverage of an

individual under this part in a Medicare+Choice payment area

for a month, in an amount equal to 1/12 of the annual

Medicare+Choice capitation rate (as calculated under subsection

(c) of this section) with respect to that individual for that

area, reduced by the amount of any reduction elected under

section 1395w-24(f)(1)(E) of this title and adjusted for such

risk factors as age, disability status, gender, institutional

status, and such other factors as the Secretary determines to

be appropriate, so as to ensure actuarial equivalence. The

Secretary may add to, modify, or substitute for such factors,

if such changes will improve the determination of actuarial

equivalence.

(B) Special rule for end-stage renal disease

The Secretary shall establish separate rates of payment to a

Medicare+Choice organization with respect to classes of

individuals determined to have end-stage renal disease and

enrolled in a Medicare+Choice plan of the organization. Such

rates of payment shall be actuarially equivalent to rates paid

to other enrollees in the Medicare+Choice payment area (or such

other area as specified by the Secretary). In accordance with

regulations, the Secretary shall provide for the application of

the seventh sentence of section 1395rr(b)(7) of this title to

payments under this section covering the provision of renal

dialysis treatment in the same manner as such sentence applies

to composite rate payments described in such sentence. In

establishing such rates, the Secretary shall provide for

appropriate adjustments to increase each rate to reflect the

demonstration rate (including the risk adjustment methodology

associated with such rate) of the social health maintenance

organization end-stage renal disease capitation demonstrations

(established by section 2355 of the Deficit Reduction Act of

1984, as amended by section 13567(b) of the Omnibus Budget

Reconciliation Act of 1993), and shall compute such rates by

taking into account such factors as renal treatment modality,

age, and the underlying cause of the end-stage renal disease.

(2) Adjustment to reflect number of enrollees

(A) In general

The amount of payment under this subsection may be

retroactively adjusted to take into account any difference

between the actual number of individuals enrolled with an

organization under this part and the number of such individuals

estimated to be so enrolled in determining the amount of the

advance payment.

(B) Special rule for certain enrollees

(i) In general

Subject to clause (ii), the Secretary may make retroactive

adjustments under subparagraph (A) to take into account

individuals enrolled during the period beginning on the date

on which the individual enrolls with a Medicare+Choice

organization under a plan operated, sponsored, or contributed

to by the individual's employer or former employer (or the

employer or former employer of the individual's spouse) and

ending on the date on which the individual is enrolled in the

organization under this part, except that for purposes of

making such retroactive adjustments under this subparagraph,

such period may not exceed 90 days.

(ii) Exception

No adjustment may be made under clause (i) with respect to

any individual who does not certify that the organization

provided the individual with the disclosure statement

described in section 1395w-22(c) of this title at the time

the individual enrolled with the organization.

(3) Establishment of risk adjustment factors

(A) Report

The Secretary shall develop, and submit to Congress by not

later than March 1, 1999, a report on the method of risk

adjustment of payment rates under this section, to be

implemented under subparagraph (C), that accounts for

variations in per capita costs based on health status. Such

report shall include an evaluation of such method by an

outside, independent actuary of the actuarial soundness of the

proposal.

(B) Data collection

In order to carry out this paragraph, the Secretary shall

require Medicare+Choice organizations (and eligible

organizations with risk-sharing contracts under section 1395mm

of this title) to submit data regarding inpatient hospital

services for periods beginning on or after July 1, 1997, and

data regarding other services and other information as the

Secretary deems necessary for periods beginning on or after

July 1, 1998. The Secretary may not require an organization to

submit such data before January 1, 1998.

(C) Initial implementation

(i) In general

The Secretary shall first provide for implementation of a

risk adjustment methodology that accounts for variations in

per capita costs based on health status and other demographic

factors for payments by no later than January 1, 2000.

(ii) Phase-in

Except as provided in clause (iii), such risk adjustment

methodology shall be implemented in a phased-in manner so

that the methodology insofar as it makes adjustments to

capitation rates for health status applies to -

(I) 10 percent of 1/12 of the annual Medicare+Choice

capitation rate in 2000 and each succeeding year through

2003;

(II) 30 percent of such capitation rate in 2004;

(III) 50 percent of such capitation rate in 2005;

(IV) 75 percent of such capitation rate in 2006; and

(V) 100 percent of such capitation rate in 2007 and

succeeding years.

(iii) (!1) Data for risk adjustment methodology

Such risk adjustment methodology for 2004 and each

succeeding year, shall be based on data from inpatient

hospital and ambulatory settings.

(iii) (!1) Full implementation of risk adjustment for

congestive heart failure enrollees for 2001

(I) Exemption from phase-in

Subject to subclause (II), the Secretary shall fully

implement the risk adjustment methodology described in

clause (i) with respect to each individual who has had a

qualifying congestive heart failure inpatient diagnosis (as

determined by the Secretary under such risk adjustment

methodology) during the period beginning on July 1, 1999,

and ending on June 30, 2000, and who is enrolled in a

coordinated care plan that is the only coordinated care

plan offered on January 1, 2001, in the service area of the

individual.

(II) Period of application

Subclause (I) shall only apply during the 1-year period

beginning on January 1, 2001.

(D) Uniform application to all types of plans

Subject to section 1395w-28(e)(4) of this title, the

methodology shall be applied uniformly without regard to the

type of plan.

(b) Annual announcement of payment rates

(1) Annual announcement

The Secretary shall annually determine, and shall announce (in

a manner intended to provide notice to interested parties) for

years before 2004 and after 2005 not later than March 1 before

the calendar year concerned and for 2004 and 2005 not later than

the second Monday in May before the respective calendar year -

(A) the annual Medicare+Choice capitation rate for each

Medicare+Choice payment area for the year, and

(B) the risk and other factors to be used in adjusting such

rates under subsection (a)(1)(A) of this section for payments

for months in that year.

(2) Advance notice of methodological changes

At least 45 days before making the announcement under paragraph

(1) for a year, the Secretary shall provide for notice to

Medicare+Choice organizations of proposed changes to be made in

the methodology from the methodology and assumptions used in the

previous announcement and shall provide such organizations an

opportunity to comment on such proposed changes.

(3) Explanation of assumptions

In each announcement made under paragraph (1), the Secretary

shall include an explanation of the assumptions and changes in

methodology used in the announcement in sufficient detail so that

Medicare+Choice organizations can compute monthly adjusted

Medicare+Choice capitation rates for individuals in each

Medicare+Choice payment area which is in whole or in part within

the service area of such an organization.

(4) Continued computation and publication of county-specific per

capita fee-for-service expenditure information

The Secretary, through the Chief Actuary of the Health Care

Financing Administration, shall provide for the computation and

publication, on an annual basis beginning with 2001 at the time

of publication of the annual Medicare+Choice capitation rates

under paragraph (1), of the following information for the

original medicare fee-for-service program under parts A and B of

this subchapter (exclusive of individuals eligible for coverage

under section 426-1 of this title) for each Medicare+Choice

payment area for the second calendar year ending before the date

of publication:

(A) Total expenditures per capita per month, computed

separately for part A of this subchapter and for part B of this

subchapter.

(B) The expenditures described in subparagraph (A) reduced by

the best estimate of the expenditures (such as graduate medical

education and disproportionate share hospital payments) not

related to the payment of claims.

(C) The average risk factor for the covered population based

on diagnoses reported for medicare inpatient services, using

the same methodology as is expected to be applied in making

payments under subsection (a) of this section.

(D) Such average risk factor based on diagnoses for inpatient

and other sites of service, using the same methodology as is

expected to be applied in making payments under subsection (a)

of this section.

(c) Calculation of annual Medicare+Choice capitation rates

(1) In general

For purposes of this part, subject to paragraphs (6)(C) and

(7), each annual Medicare+ÐChoice capitation rate, for a

Medicare+Choice payment area for a contract year consisting of a

calendar year, is equal to the largest of the amounts specified

in the following subparagraph (A), (B), or (C):

(A) Blended capitation rate

The sum of -

(i) the area-specific percentage (as specified under

paragraph (2) for the year) of the annual area-specific

Medicare+Choice capitation rate for the Medicare+Choice

payment area, as determined under paragraph (3) for the year,

and

(ii) the national percentage (as specified under paragraph

(2) for the year) of the input-price-adjusted annual national

Medicare+Choice capitation rate, as determined under

paragraph (4) for the year,

multiplied by the budget neutrality adjustment factor

determined under paragraph (5).

(B) Minimum amount

12 multiplied by the following amount:

(i) For 1998, $367 (but not to exceed, in the case of an

area outside the 50 States and the District of Columbia, 150

percent of the annual per capita rate of payment for 1997

determined under section 1395mm(a)(1)(C) of this title for

the area).

(ii) For 1999 and 2000, the minimum amount determined under

clause (i) or this clause, respectively, for the preceding

year, increased by the national per capita Medicare+Choice

growth percentage described in paragraph (6)(A) applicable to

1999 or 2000, respectively.

(iii)(I) Subject to subclause (II), for 2001, for any area

in a Metropolitan Statistical Area with a population of more

than 250,000, $525, and for any other area $475.

(II) In the case of an area outside the 50 States and the

District of Columbia, the amount specified in this clause

shall not exceed 120 percent of the amount determined under

clause (ii) for such area for 2000.

(iv) For 2002 and each succeeding year, the minimum amount

specified in this clause (or clause (iii)) for the preceding

year increased by the national per capita Medicare+Choice

growth percentage, described in paragraph (6)(A) for that

succeeding year.

(C) Minimum percentage increase

(i) For 1998, 102 percent of the annual per capita rate of

payment for 1997 determined under section 1395mm(a)(1)(C) of

this title for the Medicare+Choice payment area.

(ii) For 1999 and 2000, 102 percent of the annual

Medicare+Choice capitation rate under this paragraph for the

area for the previous year.

(iii) For 2001, 103 percent of the annual Medicare+Choice

capitation rate under this paragraph for the area for 2000.

(iv) For 2002 and each succeeding year, 102 percent of the

annual Medicare+Choice capitation rate under this paragraph for

the area for the previous year.

(2) Area-specific and national percentages

For purposes of paragraph (1)(A) -

(A) for 1998, the "area-specific percentage" is 90 percent

and the "national percentage" is 10 percent,

(B) for 1999, the "area-specific percentage" is 82 percent

and the "national percentage" is 18 percent,

(C) for 2000, the "area-specific percentage" is 74 percent

and the "national percentage" is 26 percent,

(D) for 2001, the "area-specific percentage" is 66 percent

and the "national percentage" is 34 percent,

(E) for 2002, the "area-specific percentage" is 58 percent

and the "national percentage" is 42 percent, and

(F) for a year after 2002, the "area-specific percentage" is

50 percent and the "national percentage" is 50 percent.

(3) Annual area-specific Medicare+Choice capitation rate

(A) In general

For purposes of paragraph (1)(A), subject to subparagraph

(B), the annual area-specific Medicare+Choice capitation rate

for a Medicare+Choice payment area -

(i) for 1998 is, subject to subparagraph (D), the annual

per capita rate of payment for 1997 determined under section

1395mm(a)(1)(C) of this title for the area, increased by the

national per capita Medicare+Choice growth percentage for

1998 (described in paragraph (6)(A)); or

(ii) for a subsequent year is the annual area-specific

Medicare+Choice capitation rate for the previous year

determined under this paragraph for the area, increased by

the national per capita Medicare+Choice growth percentage for

such subsequent year.

(B) Removal of medical education from calculation of adjusted

average per capita cost

(i) In general

In determining the area-specific Medicare+Choice capitation

rate under subparagraph (A) for a year (beginning with 1998),

the annual per capita rate of payment for 1997 determined

under section 1395mm(a)(1)(C) of this title shall be adjusted

to exclude from the rate the applicable percent (specified in

clause (ii)) of the payment adjustments described in

subparagraph (C).

(ii) Applicable percent

For purposes of clause (i), the applicable percent for -

(I) 1998 is 20 percent,

(II) 1999 is 40 percent,

(III) 2000 is 60 percent,

(IV) 2001 is 80 percent, and

(V) a succeeding year is 100 percent.

(C) Payment adjustment

(i) In general

Subject to clause (ii), the payment adjustments described

in this subparagraph are payment adjustments which the

Secretary estimates were payable during 1997 -

(I) for the indirect costs of medical education under

section 1395ww(d)(5)(B) of this title, and

(II) for direct graduate medical education costs under

section 1395ww(h) of this title.

(ii) Treatment of payments covered under State hospital

reimbursement system

To the extent that the Secretary estimates that an annual

per capita rate of payment for 1997 described in clause (i)

reflects payments to hospitals reimbursed under section

1395f(b)(3) of this title, the Secretary shall estimate a

payment adjustment that is comparable to the payment

adjustment that would have been made under clause (i) if the

hospitals had not been reimbursed under such section.

(D) Treatment of areas with highly variable payment rates

In the case of a Medicare+Choice payment area for which the

annual per capita rate of payment determined under section

1395mm(a)(1)(C) of this title for 1997 varies by more than 20

percent from such rate for 1996, for purposes of this

subsection the Secretary may substitute for such rate for 1997

a rate that is more representative of the costs of the

enrollees in the area.

(4) Input-price-adjusted annual national Medicare+Choice

capitation rate

(A) In general

For purposes of paragraph (1)(A), the input-price-adjusted

annual national Medicare+Choice capitation rate for a

Medicare+Choice payment area for a year is equal to the sum,

for all the types of medicare services (as classified by the

Secretary), of the product (for each such type of service) of -

(i) the national standardized annual Medicare+Choice

capitation rate (determined under subparagraph (B)) for the

year,

(ii) the proportion of such rate for the year which is

attributable to such type of services, and

(iii) an index that reflects (for that year and that type

of services) the relative input price of such services in the

area compared to the national average input price of such

services.

In applying clause (iii), the Secretary may, subject to

subparagraph (C), apply those indices under this subchapter

that are used in applying (or updating) national payment rates

for specific areas and localities.

(B) National standardized annual Medicare+ÐChoice capitation

rate

In subparagraph (A)(i), the "national standardized annual

Medicare+Choice capitation rate" for a year is equal to -

(i) the sum (for all Medicare+Choice payment areas) of the

product of -

(I) the annual area-specific Medicare+ÐChoice capitation

rate for that year for the area under paragraph (3), and

(II) the average number of medicare beneficiaries

residing in that area in the year, multiplied by the

average of the risk factor weights used to adjust payments

under subsection (a)(1)(A) of this section for such

beneficiaries in such area; divided by

(ii) the sum of the products described in clause (i)(II)

for all areas for that year.

(C) Special rules for 1998

In applying this paragraph for 1998 -

(i) medicare services shall be divided into 2 types of

services: part A services and part B services;

(ii) the proportions described in subparagraph (A)(ii) -

(I) for part A services shall be the ratio (expressed as

a percentage) of the national average annual per capita

rate of payment for part A of this subchapter for 1997 to

the total national average annual per capita rate of

payment for parts A and B of this subchapter for 1997, and

(II) for part B services shall be 100 percent minus the

ratio described in subclause (I);

(iii) for part A services, 70 percent of payments

attributable to such services shall be adjusted by the index

used under section 1395ww(d)(3)(E) of this title to adjust

payment rates for relative hospital wage levels for hospitals

located in the payment area involved;

(iv) for part B services -

(I) 66 percent of payments attributable to such services

shall be adjusted by the index of the geographic area

factors under section 1395w-4(e) of this title used to

adjust payment rates for physicians' services furnished in

the payment area, and

(II) of the remaining 34 percent of the amount of such

payments, 40 percent shall be adjusted by the index

described in clause (iii); and

(v) the index values shall be computed based only on the

beneficiary population who are 65 years of age or older and

who are not determined to have end stage renal disease.

The Secretary may continue to apply the rules described in this

subparagraph (or similar rules) for 1999.

(5) Payment adjustment budget neutrality factor

For purposes of paragraph (1)(A), for each year, the Secretary

shall determine a budget neutrality adjustment factor so that the

aggregate of the payments under this part (other than those

attributable to subsections (a)(3)(C)(iii) and (i) of this

section) shall equal the aggregate payments that would have been

made under this part if payment were based entirely on

area-specific capitation rates.

(6) "National per capita Medicare+Choice growth percentage"

defined

(A) In general

In this part, the "national per capita Medicare+Choice growth

percentage" for a year is the percentage determined by the

Secretary, by March 1st before the beginning of the year

involved, to reflect the Secretary's estimate of the projected

per capita rate of growth in expenditures under this subchapter

for an individual entitled to benefits under part A of this

subchapter and enrolled under part B of this subchapter,

reduced by the number of percentage points specified in

subparagraph (B) for the year. Separate determinations may be

made for aged enrollees, disabled enrollees, and enrollees with

end-stage renal disease.

(B) Adjustment

The number of percentage points specified in this

subparagraph is -

(i) for 1998, 0.8 percentage points,

(ii) for 1999, 0.5 percentage points,

(iii) for 2000, 0.5 percentage points,

(iv) for 2001, 0.5 percentage points,

(v) for 2002, 0.3 percentage points, and

(vi) for a year after 2002, 0 percentage points.

(C) Adjustment for over or under projection of national per

capita Medicare+Choice growth percentage

Beginning with rates calculated for 1999, before computing

rates for a year as described in paragraph (1), the Secretary

shall adjust all area-specific and national Medicare+Choice

capitation rates (and beginning in 2000, the minimum amount)

for the previous year for the differences between the

projections of the national per capita Medicare+Choice growth

percentage for that year and previous years and the current

estimate of such percentage for such years.

(7) Adjustment for national coverage determinations and

legislative changes in benefits

If the Secretary makes a determination with respect to coverage

under this subchapter or there is a change in benefits required

to be provided under this part that the Secretary projects will

result in a significant increase in the costs to Medicare+Choice

of providing benefits under contracts under this part (for

periods after any period described in section 1395w-22(a)(5) of

this title), the Secretary shall adjust appropriately the

payments to such organizations under this part. Such projection

and adjustment shall be based on an analysis by the Chief Actuary

of the Health Care Financing Administration of the actuarial

costs associated with the new benefits.

(d) "Medicare+Choice payment area" defined

(1) In general

In this part, except as provided in paragraph (3), the term

"Medicare+Choice payment area" means a county, or equivalent area

specified by the Secretary.

(2) Rule for ESRD beneficiaries

In the case of individuals who are determined to have end stage

renal disease, the Medicare+Choice payment area shall be a State

or such other payment area as the Secretary specifies.

(3) Geographic adjustment

(A) In general

Upon written request of the chief executive officer of a

State for a contract year (beginning after 1998) made by not

later than February 1 of the previous year, the Secretary shall

make a geographic adjustment to a Medicare+Choice payment area

in the State otherwise determined under paragraph (1) -

(i) to a single statewide Medicare+Choice payment area,

(ii) to the metropolitan based system described in

subparagraph (C), or

(iii) to consolidating into a single Medicare+Choice

payment area noncontiguous counties (or equivalent areas

described in paragraph (1)) within a State.

Such adjustment shall be effective for payments for months

beginning with January of the year following the year in which

the request is received.

(B) Budget neutrality adjustment

In the case of a State requesting an adjustment under this

paragraph, the Secretary shall initially (and annually

thereafter) adjust the payment rates otherwise established

under this section for Medicare+Choice payment areas in the

State in a manner so that the aggregate of the payments under

this section in the State shall not exceed the aggregate

payments that would have been made under this section for

Medicare+Choice payment areas in the State in the absence of

the adjustment under this paragraph.

(C) Metropolitan based system

The metropolitan based system described in this subparagraph

is one in which -

(i) all the portions of each metropolitan statistical area

in the State or in the case of a consolidated metropolitan

statistical area, all of the portions of each primary

metropolitan statistical area within the consolidated area

within the State, are treated as a single Medicare+Choice

payment area, and

(ii) all areas in the State that do not fall within a

metropolitan statistical area are treated as a single

Medicare+Choice payment area.

(D) Areas

In subparagraph (C), the terms "metropolitan statistical

area", "consolidated metropolitan statistical area", and

"primary metropolitan statistical area" mean any area

designated as such by the Secretary of Commerce.

(e) Special rules for individuals electing MSA plans

(1) In general

If the amount of the Medicare+Choice monthly MSA premium (as

defined in section 1395w-24(b)(2)(C) of this title) for an MSA

plan for a year is less than 1/12 of the annual Medicare+Choice

capitation rate applied under this section for the area and year

involved, the Secretary shall deposit an amount equal to 100

percent of such difference in a Medicare+Choice MSA established

(and, if applicable, designated) by the individual under

paragraph (2).

(2) Establishment and designation of Medicare+Choice medical

savings account as requirement for payment of contribution

In the case of an individual who has elected coverage under an

MSA plan, no payment shall be made under paragraph (1) on behalf

of an individual for a month unless the individual -

(A) has established before the beginning of the month (or by

such other deadline as the Secretary may specify) a

Medicare+Choice MSA (as defined in section 138(b)(2) of the

Internal Revenue Code of 1986), and

(B) if the individual has established more than one such

Medicare+Choice MSA, has designated one of such accounts as the

individual's Medicare+Choice MSA for purposes of this part.

Under rules under this section, such an individual may change the

designation of such account under subparagraph (B) for purposes

of this part.

(3) Lump-sum deposit of medical savings account contribution

In the case of an individual electing an MSA plan effective

beginning with a month in a year, the amount of the contribution

to the Medicare+Choice MSA on behalf of the individual for that

month and all successive months in the year shall be deposited

during that first month. In the case of a termination of such an

election as of a month before the end of a year, the Secretary

shall provide for a procedure for the recovery of deposits

attributable to the remaining months in the year.

(f) Payments from Trust Fund

The payment to a Medicare+Choice organization under this section

for individuals enrolled under this part with the organization and

payments to a Medicare+Choice MSA under subsection (e)(1) of this

section shall be made from the Federal Hospital Insurance Trust

Fund and the Federal Supplementary Medical Insurance Trust Fund in

such proportion as the Secretary determines reflects the relative

weight that benefits under part A of this subchapter and under part

B of this subchapter represents of the actuarial value of the total

benefits under this subchapter. Monthly payments otherwise payable

under this section for October 2000 shall be paid on the first

business day of such month. Monthly payments otherwise payable

under this section for October 2001 shall be paid on the last

business day of September 2001. Monthly payments otherwise payable

under this section for October 2006 shall be paid on the first

business day of October 2006.

(g) Special rule for certain inpatient hospital stays

In the case of an individual who is receiving inpatient hospital

services from a subsection (d) hospital (as defined in section

1395ww(d)(1)(B) of this title) as of the effective date of the

individual's -

(1) election under this part of a Medicare+ÐChoice plan offered

by a Medicare+Choice organization -

(A) payment for such services until the date of the

individual's discharge shall be made under this subchapter

through the Medicare+Choice plan or the original medicare

fee-for-service program option described in section

1395w-21(a)(1)(A) of this title (as the case may be) elected

before the election with such organization,

(B) the elected organization shall not be financially

responsible for payment for such services until the date after

the date of the individual's discharge, and

(C) the organization shall nonetheless be paid the full

amount otherwise payable to the organization under this part;

or

(2) termination of election with respect to a Medicare+Choice

organization under this part -

(A) the organization shall be financially responsible for

payment for such services after such date and until the date of

the individual's discharge,

(B) payment for such services during the stay shall not be

made under section 1395ww(d) of this title or by any succeeding

Medicare+Choice organization, and

(C) the terminated organization shall not receive any payment

with respect to the individual under this part during the

period the individual is not enrolled.

(h) Special rule for hospice care

(1) Information

A contract under this part shall require the Medicare+Choice

organization to inform each individual enrolled under this part

with a Medicare+Choice plan offered by the organization about the

availability of hospice care if -

(A) a hospice program participating under this subchapter is

located within the organization's service area; or

(B) it is common practice to refer patients to hospice

programs outside such service area.

(2) Payment

If an individual who is enrolled with a Medicare+Choice

organization under this part makes an election under section

1395d(d)(1) of this title to receive hospice care from a

particular hospice program -

(A) payment for the hospice care furnished to the individual

shall be made to the hospice program elected by the individual

by the Secretary;

(B) payment for other services for which the individual is

eligible notwithstanding the individual's election of hospice

care under section 1395d(d)(1) of this title, including

services not related to the individual's terminal illness,

shall be made by the Secretary to the Medicare+Choice

organization or the provider or supplier of the service instead

of payments calculated under subsection (a) of this section;

and

(C) the Secretary shall continue to make monthly payments to

the Medicare+Choice organization in an amount equal to the

value of the additional benefits required under section

1395w-24(f)(1)(A) of this title.

(i) New entry bonus

(1) In general

Subject to paragraphs (2) and (3), in the case of

Medicare+Choice payment area in which a Medicare+Choice plan has

not been offered since 1997 (or in which all organizations that

offered a plan since such date have filed notice with the

Secretary, as of October 13, 1999, that they will not be offering

such a plan as of January 1, 2000, or filed notice with the

Secretary as of October 3, 2000, that they will not be offering

such a plan as of January 1, 2001), the amount of the monthly

payment otherwise made under this section shall be increased -

(A) only for the first 12 months in which any Medicare+Choice

plan is offered in the area, by 5 percent of the total monthly

payment otherwise computed for such payment area; and

(B) only for the subsequent 12 months, by 3 percent of the

total monthly payment otherwise computed for such payment area.

(2) Period of application

Paragraph (1) shall only apply to payment for Medicare+Choice

plans which are first offered in a Medicare+Choice payment area

during the 2-year period beginning on January 1, 2000.

(3) Limitation to organization offering first plan in an area

Paragraph (1) shall only apply to payment to the first

Medicare+Choice organization that offers a Medicare+Choice plan

in each Medicare+Choice payment area, except that if more than

one such organization first offers such a plan in an area on the

same date, paragraph (1) shall apply to payment for such

organizations.

(4) Construction

Nothing in paragraph (1) shall be construed as affecting the

calculation of the annual Medicare+Choice capitation rate under

subsection (c) of this section for any payment area or as

applying to payment for any period not described in such

paragraph and paragraph (2).

(5) Offered defined

In this subsection, the term "offered" means, with respect to a

Medicare+Choice plan as of a date, that a Medicare+Choice

eligible individual may enroll with the plan on that date,

regardless of when the enrollment takes effect or when the

individual obtains benefits under the plan.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1853, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 299; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Secs. 511(a),

512, 514(a), 517], Nov. 29, 1999, 113 Stat. 1536, 1501A-380,

1501A-382 to 1501A-384; Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Secs. 601(a), 602(a), 603, 605(a), 606(a)(2)(A), 607, 608(a),

611(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-554 to 2763A-559;

Pub. L. 107-188, title V, Sec. 532(d)(1), June 12, 2002, 116 Stat.

696.)

-REFTEXT-

REFERENCES IN TEXT

Section 2355 of the Deficit Reduction Act of 1984, as amended by

section 13567(b) of the Omnibus Budget Reconciliation Act of 1993,

referred to in subsec. (a)(1)(B), is section 2355 of Pub. L.

98-369, div. B, title III, July 18, 1984, 98 Stat. 1103, as amended

by section 13567(b) of Pub. L. 103-66, title XIII, Aug. 10, 1993,

107 Stat. 608, which is not classified to the Code.

Parts A and B of this subchapter, referred to in subsecs. (b)(4),

(c)(4)(C), (6)(A), and (f), are classified to section 1395c et seq.

and section 1395j et seq., respectively, of this title.

The Internal Revenue Code of 1986, referred to in subsec.

(e)(2)(A), is classified generally to Title 26, Internal Revenue

Code.

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(1). Pub. L. 107-188 in introductory provisions

substituted "for years before 2004 and after 2005 not later than

March 1 before the calendar year concerned and for 2004 and 2005

not later than the second Monday in May before the respective

calendar year" for "not later than March 1 before the calendar year

concerned".

2000 - Subsec. (a)(1)(A). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 606(a)(2)(A)], inserted "reduced by the amount of any

reduction elected under section 1395w-24(f)(1)(E) of this title

and" after "for that area,".

Subsec. (a)(1)(B). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

605(a)], inserted at end "In establishing such rates, the Secretary

shall provide for appropriate adjustments to increase each rate to

reflect the demonstration rate (including the risk adjustment

methodology associated with such rate) of the social health

maintenance organization end-stage renal disease capitation

demonstrations (established by section 2355 of the Deficit

Reduction Act of 1984, as amended by section 13567(b) of the

Omnibus Budget Reconciliation Act of 1993), and shall compute such

rates by taking into account such factors as renal treatment

modality, age, and the underlying cause of the end-stage renal

disease."

Subsec. (a)(3)(C)(ii). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 607(a)(1)], substituted "Except as provided in clause (iii),

such risk adjustment" for "Such risk adjustment".

Subsec. (a)(3)(C)(ii)(I). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 603(1)(A)], substituted "and each succeeding year through

2003" for "and 2001" and struck out "and" at end.

Subsec. (a)(3)(C)(ii)(II) to (V). Pub. L. 106-554, Sec. 1(a)(6)

[title VI, Sec. 603(1)(B)], added subcls. (II) to (V) and struck

out former subcl. (II) which read as follows: "not more than 20

percent of such capitation rate in 2002."

Subsec. (a)(3)(C)(iii). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 607(a)(2)], added cl. (iii) relating to full implementation of

risk adjustment for congestive heart failure enrollees for 2001.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 603(2)], added cl.

(iii) relating to data for risk adjustment methodology.

Subsec. (c)(1)(B)(ii), (iii). Pub. L. 106-554, Sec. 1(a)(6)

[title VI, Sec. 601(a)(2)], added cls. (ii) and (iii). Former cl.

(ii) redesignated (iv).

Subsec. (c)(1)(B)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 601(a)(1), (3)], redesignated cl. (ii) as (iv) and substituted

"2002 and each succeeding year" for "a succeeding year" and "clause

(iii)" for "clause (i)".

Subsec. (c)(1)(C)(ii), (iii). Pub. L. 106-554, Sec. 1(a)(6)

[title VI, Sec. 602(a)(2)], added cls. (ii) and (iii). Former cl.

(ii) redesignated (iv).

Subsec. (c)(1)(C)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 602(a)(1), (3)], redesignated cl. (ii) as (iv) and substituted

"2002 and each succeeding year" for "a subsequent year".

Subsec. (c)(5). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

607(b)], substituted "subsections (a)(3)(C)(iii) and (i)" for

"subsection (i)".

Subsec. (c)(7). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

611(a)], amended heading and text of par. (7) generally. Prior to

amendment, text read as follows: "If the Secretary makes a

determination with respect to coverage under this subchapter that

the Secretary projects will result in a significant increase in the

costs to Medicare+Choice of providing benefits under contracts

under this part (for periods after any period described in section

1395w-22(a)(5) of this title), the Secretary shall adjust

appropriately the payments to such organizations under this part."

Subsec. (i)(1). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

608(a)], in introductory provisions, inserted ", or filed notice

with the Secretary as of October 3, 2000, that they will not be

offering such a plan as of January 1, 2001" after "January 1,

2000".

1999 - Subsec. (a)(1)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title

V, Sec. 512(1)], substituted "subsections (e), (g), and (i) of this

section" for "subsections (e) and (f) of this section".

Subsec. (a)(3)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 511(a)], designated existing provisions as cl. (i), inserted

heading, and added cl. (ii).

Subsec. (b)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

514(a)], added par. (4).

Subsec. (c)(5). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

512(2)], inserted "(other than those attributable to subsection (i)

of this section)" after "payments under this part".

Subsec. (c)(6)(B)(v). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 517], substituted "0.3 percentage points" for "0.5 percentage

points".

Subsec. (i). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

512(3)], added subsec. (i).

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-188, title V, Sec. 532(d)(2), June 12, 2002, 116

Stat. 697, provided that: "The amendment made by paragraph (1)

[amending this section] shall first apply to announcements for

years after 2003."

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 605(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-556, provided that: "The amendment made

by subsection (a) [amending this section] shall apply to payments

for months beginning with January 2002."

Amendment by section 1(a)(6) [title VI, Sec. 606(a)(2)(A)] of

Pub. L. 106-554 applicable to years beginning with 2003, see

section 1(a)(6) [title VI, Sec. 606(b)] of Pub. L. 106-554, set out

as a note under section 1395r of this title.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 608(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-559, provided that: "The amendment made

by subsection (a) [amending this section] shall apply as if

included in the enactment of BBRA [Pub. L. 106-113, Sec.

1000(a)(6)]."

Amendment by section 1(a)(6) [title VI, Sec. 611(a)] of Pub. L.

106-554 effective Dec. 21, 2000, and applicable to national

coverage determinations and legislative changes in benefits

occurring on or after such date, see section 1(a)(6) [title VI,

Sec. 611(c)] of Pub. L. 106-554, set out as a note under section

1395w-22 of this title.

SPECIAL RULE FOR JANUARY AND FEBRUARY OF 2001

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 601(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-554, provided that:

"(1) In general. - Notwithstanding the amendments made by

subsection (a) [amending this section], for purposes of making

payments under section 1853 of the Social Security Act (42 U.S.C.

1395w-23) for January and February 2001, the annual Medicare+Choice

capitation rate for a Medicare+Choice payment area shall be

calculated, and the excess amount under section 1854(f)(1)(B) of

such Act (42 U.S.C. 1395w-24(f)(1)(B)) shall be determined, as if

such amendments had not been enacted.

"(2) Construction. - Paragraph (1) shall not be taken into

account in computing such capitation rate for 2002 and subsequent

years."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 602(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-555, provided that: "The provisions of

section 601(b) [set out above] shall apply with respect to the

amendments made by subsection (a) [amending this section] in the

same manner as they apply to the amendments made by section 601(a)

[amending this section]."

TRANSITION TO REVISED MEDICARE+CHOICE PAYMENT RATES

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 604], Dec. 21,

2000, 114 Stat. 2763, 2763A-555, provided that:

"(a) Announcement of Revised Medicare+Choice Payment Rates. -

Within 2 weeks after the date of the enactment of this Act [Dec.

21, 2000], the Secretary of Health and Human Services shall

determine, and shall announce (in a manner intended to provide

notice to interested parties) Medicare+Choice capitation rates

under section 1853 of the Social Security Act (42 U.S.C. 1395w-23)

for 2001, revised in accordance with the provisions of this Act.

"(b) Reentry Into Program Permitted for Medicare+Choice Programs.

- A Medicare+Choice organization that provided notice to the

Secretary of Health and Human Services before the date of the

enactment of this Act [Dec. 21, 2000] that it was terminating its

contract under part C of title XVIII of the Social Security Act

[this part] or was reducing the service area of a Medicare+Choice

plan offered under such part shall be permitted to continue

participation under such part, or to maintain the service area of

such plan, for 2001 if it submits the Secretary with the

information described in section 1854(a)(1) of the Social Security

Act (42 U.S.C. 1395w-24(a)(1)) within 2 weeks after the date

revised rates are announced by the Secretary under subsection (a).

"(c) Revised Submission of Proposed Premiums and Related

Information. - If -

"(1) a Medicare+Choice organization provided notice to the

Secretary of Health and Human Services as of July 3, 2000, that

it was renewing its contract under part C of title XVIII of the

Social Security Act [this part] for all or part of the service

area or areas served under its current contract, and

"(2) any part of the service area or areas addressed in such

notice includes a payment area for which the Medicare+Choice

capitation rate under section 1853(c) of such Act (42 U.S.C.

1395w-23(c)) for 2001, as determined under subsection (a), is

higher than the rate previously determined for such year,

such organization shall revise its submission of the information

described in section 1854(a)(1) of the Social Security Act (42

U.S.C. 1395w-24(a)(1)), and shall submit such revised information

to the Secretary, within 2 weeks after the date revised rates are

announced by the Secretary under subsection (a). In making such

submission, the organization may only reduce beneficiary premiums,

reduce beneficiary cost-sharing, enhance benefits, utilize the

stabilization fund described in section 1854(f)(2) of such Act (42

U.S.C. 1395w-24(f)(2)), or stabilize or enhance beneficiary access

to providers (so long as such stabilization or enhancement does not

result in increased beneficiary premiums, increased beneficiary

cost-sharing, or reduced benefits).

"(d) Waiver of Limits on Stabilization Fund. - Any regulatory

provision that limits the proportion of the excess amount that can

be withheld in such stabilization fund for a contract period shall

not apply with respect to submissions described in subsections (b)

and (c).

"(e) Disregard of New Rate Announcement in Applying Pass-Through

for New National Coverage Determinations. - For purposes of

applying section 1852(a)(5) of the Social Security Act (42 U.S.C.

1395w-22(a)(5)), the announcement of revised rates under subsection

(a) shall not be treated as an announcement under section 1853(b)

of such Act (42 U.S.C. 1395w-23(b))."

PUBLICATION

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 605(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-556, provided that: "Not later than 6

months after the date of the enactment of this Act [Dec. 21, 2000],

the Secretary of Health and Human Services shall publish for public

comment a description of the appropriate adjustments described in

the last sentence of section 1853(a)(1)(B) of the Social Security

Act (42 U.S.C. 1395w-23(a)(1)(B)), as added by subsection (a). The

Secretary shall publish such adjustments in final form by not later

than July 1, 2001, so that the amendment made by subsection (a) is

implemented on a timely basis consistent with subsection (b) [set

out as a note above]."

REPORT ON INCLUSION OF CERTAIN COSTS OF THE DEPARTMENT OF VETERANS

AFFAIRS AND MILITARY FACILITY SERVICES IN CALCULATING

MEDICARE+CHOICE PAYMENT RATES

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 609], Dec. 21,

2000, 114 Stat. 2763, 2763A-559, provided that: "The Secretary of

Health and Human Services shall report to Congress by not later

than January 1, 2003, on a method to phase-in the costs of military

facility services furnished by the Department of Veterans Affairs,

and the costs of military facility services furnished by the

Department of Defense, to medicare-eligible beneficiaries in the

calculation of an area's Medicare+Choice capitation payment. Such

report shall include on a county-by-county basis -

"(1) the actual or estimated cost of such services to

medicare-eligible beneficiaries;

"(2) the change in Medicare+Choice capitation payment rates if

such costs are included in the calculation of payment rates;

"(3) one or more proposals for the implementation of payment

adjustments to Medicare+Choice plans in counties where the

payment rate has been affected due to the failure to calculate

the cost of such services to medicare-eligible beneficiaries; and

"(4) a system to ensure that when a Medicare+Choice enrollee

receives covered services through a facility of the Department of

Veterans Affairs or the Department of Defense there is an

appropriate payment recovery to the medicare program under title

XVIII of the Social Security Act [this subchapter]."

MEDPAC STUDY AND REPORT

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 511(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-380, provided that:

"(1) Study. - The Medicare Payment Advisory Commission shall

conduct a study that evaluates the methodology used by the

Secretary of Health and Human Services in developing the risk

factors used in adjusting the Medicare+Choice capitation rate paid

to Medicare+Choice organizations under section 1853 of the Social

Security Act (42 U.S.C. 1395w-23) and includes the issues described

in paragraph (2).

"(2) Issues to be studied. - The issues described in this

paragraph are the following:

"(A) The ability of the average risk adjustment factor applied

to a Medicare+Choice plan to explain variations in plans' average

per capita medicare costs, as reported by Medicare+Choice plans

in the plans' adjusted community rate filings.

"(B) The year-to-year stability of the risk factors applied to

each Medicare+Choice plan and the potential for substantial

changes in payment for small Medicare+Choice plans.

"(C) For medicare beneficiaries newly enrolled in

Medicare+Choice plans in a given year, the correspondence between

the average risk factor calculated from medicare fee-for-service

data for those individuals from the period prior to their

enrollment in a Medicare+Choice plan and the average risk factor

calculated for such individuals during their initial year of

enrollment in a Medicare+Choice plan.

"(D) For medicare beneficiaries disenrolling from or switching

among Medicare+Choice plans in a given year, the correspondence

between the average risk factor calculated from data pertaining

to the period prior to their disenrollment from a Medicare+Choice

plan and the average risk factor calculated from data pertaining

to the period after disenrollment.

"(E) An evaluation of the exclusion of 'discretionary'

hospitalizations from consideration in the risk adjustment

methodology.

"(F) Suggestions for changes or improvements in the risk

adjustment methodology.

"(3) Report. - Not later than December 1, 2000, the Commission

shall submit a report to Congress on the study conducted under

paragraph (1), together with any recommendations for legislation

that the Commission determines to be appropriate as a result of

such study."

STUDY AND REPORT REGARDING REPORTING OF ENCOUNTER DATA

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 511(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-381, provided that:

"(1) Study. - The Secretary of Health and Human Services shall

conduct a study on how to reduce the costs and burdens on

Medicare+Choice organizations of their complying with reporting

requirements for encounter data imposed by the Secretary in

establishing and implementing a risk adjustment methodology used in

making payments to such organizations under section 1853 of the

Social Security Act (42 U.S.C. 1395w-23). The Secretary shall

consult with representatives of Medicare+Choice organizations in

conducting the study. The study shall address the following issues:

"(A) Limiting the number and types of sites of services (that

are in addition to inpatient sites) for which encounter data must

be reported.

"(B) Establishing alternative risk adjustment methods that

would require submission of less data.

"(C) The potential for Medicare+Choice organizations to

misreport, overreport, or underreport prevalence of diagnoses in

outpatient sites of care, the potential for increases in payments

to Medicare+Choice organizations from changes in Medicare+Choice

plan coding practices (commonly known as 'coding creep') and

proposed methods for detecting and adjusting for such variations

in diagnosis coding as part of the risk adjustment methodology

using encounter data from multiple sites of care.

"(D) The impact of such requirements on the willingness of

insurers to offer Medicare+Choice MSA plans and options for

modifying encounter data reporting requirements to accommodate

such plans.

"(E) Differences in the ability of Medicare+Choice

organizations to report encounter data, and the potential for

adverse competitive impacts on group and staff model health

maintenance organizations or other integrated providers of care

based on data reporting capabilities.

"(2) Report. - Not later than January 1, 2001, the Secretary

shall submit a report to Congress on the study conducted under this

subsection, together with any recommendations for legislation that

the Secretary determines to be appropriate as a result of such

study."

SPECIAL RULE FOR 2001

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 514(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-384, provided that: "In

providing for the publication of information under section

1853(b)(4) of the Social Security Act (42 U.S.C. 1395w-23(b)(4)),

as added by subsection (a), in 2001, the Secretary of Health and

Human Services shall also include the information described in such

section for 1998, as well as for 1999."

DEVELOPMENT OF SPECIAL PAYMENT RULES UNDER MEDICARE+CHOICE PROGRAM

FOR FRAIL ELDERLY ENROLLED IN SPECIALIZED PROGRAMS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 552(a)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-392, provided that:

"(1) Study. - The Medicare Payment Advisory Commission shall

conduct a study on the development of a payment methodology under

the Medicare+Choice program for frail elderly Medicare+Choice

beneficiaries enrolled in a Medicare+Choice plan under a

specialized program for the frail elderly that -

"(A) accounts for the prevalence, mix, and severity of chronic

conditions among such frail elderly Medicare+Choice

beneficiaries;

"(B) includes medical diagnostic factors from all provider

settings (including hospital and nursing facility settings); and

"(C) includes functional indicators of health status and such

other factors as may be necessary to achieve appropriate payments

for plans serving such beneficiaries.

"(2) Report. - Not later than 1 year after the date of the

enactment of this Act [Nov. 29, 1999], the Commission shall submit

a report to Congress on the study conducted under paragraph (1),

together with any recommendations for legislation that the

Commission determines to be appropriate as a result of such study."

PUBLICATION OF NEW CAPITATION RATES

Section 4002(i) of Pub. L. 105-33 provided that: "Not later than

4 weeks after the date of the enactment of this Act [Aug. 5, 1997],

the Secretary of Health and Human Services shall announce the

annual Medicare+Choice capitation rates for 1998 under section

1853(b) of the Social Security Act [subsec. (b) of this section]."

MEDICARE+CHOICE COMPETITIVE PRICING DEMONSTRATION PROJECT

Pub. L. 105-33, title IV, Secs. 4011, 4012, Aug. 5, 1997, 111

Stat. 334-336, as amended by Pub. L. 106-113, div. B, Sec.

1000(a)(6) [title V, Sec. 533], Nov. 29, 1999, 113 Stat. 1536,

1501A-389, provided that:

"SEC. 4011. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRATION

PROJECT.

"(a) Establishment of Project. -

"(1) In general. - Subject to the succeeding provisions of this

subsection, the Secretary of Health and Human Services (in this

subchapter [subchapter A (Secs. 4011-4012) of chapter 2 of

subtitle A of title IV of Pub. L. 105-33] referred to as the

'Secretary') shall establish a demonstration project (in this

subchapter referred to as the 'project') under which payments to

Medicare+Choice organizations in medicare payment areas in which

the project is being conducted are determined in accordance with

a competitive pricing methodology established under this

subchapter.

"(2) Delay in implementation. - The Secretary shall not

implement the project until January 1, 2002, or, if later, 6

months after the date the Competitive Pricing Advisory Committee

has submitted to Congress a report on each of the following

topics:

"(A) Incorporation of original medicare fee-for-service

program into project. - What changes would be required in the

project to feasibly incorporate the original medicare

fee-for-service program into the project in the areas in which

the project is operational.

"(B) Quality activities. - The nature and extent of the

quality reporting and monitoring activities that should be

required of plans participating in the project, the estimated

costs that plans will incur as a result of these requirements,

and the current ability of the Health Care Financing

Administration to collect and report comparable data,

sufficient to support comparable quality reporting and

monitoring activities with respect to beneficiaries enrolled in

the original medicare fee-for-service program generally.

"(C) Rural project. - The current viability of initiating a

project site in a rural area, given the site specific budget

neutrality requirements of the project under subsection (g),

and insofar as the Committee decides that the addition of such

a site is not viable, recommendations on how the project might

best be changed so that such a site is viable.

"(D) Benefit structure. - The nature and extent of the

benefit structure that should be required of plans

participating in the project, the rationale for such benefit

structure, the potential implications that any benefit

standardization requirement may have on the number of plan

choices available to a beneficiary in an area designated under

the project, the potential implications of requiring

participating plans to offer variations on any standardized

benefit package the committee might recommend, such that a

beneficiary could elect to pay a higher percentage of

out-of-pocket costs in exchange for a lower premium (or premium

rebate as the case may be), and the potential implications of

expanding the project (in conjunction with the potential

inclusion of the original medicare fee-for-service program) to

require medicare supplemental insurance plans operating in an

area designated under the project to offer a coordinated and

comparable standardized benefit package.

"(3) Conforming deadlines. - Any dates specified in the

succeeding provisions of this section shall be delayed (as

specified by the Secretary) in a manner consistent with the delay

effected under paragraph (2).

"(b) Designation of 7 Medicare Payment Areas Covered by Project.

-

"(1) In general. - The Secretary shall designate, in accordance

with the recommendations of the Competitive Pricing Advisory

Committee under paragraphs (2) and (3), medicare payment areas as

areas in which the project under this subchapter will be

conducted. In this section, the term 'Competitive Pricing

Advisory Committee' means the Competitive Pricing Advisory

Committee established under section 4012(a).

"(2) Initial designation of 4 areas. -

"(A) In general. - The Competitive Pricing Advisory Committee

shall recommend to the Secretary, consistent with subparagraph

(B), the designation of 4 specific areas as medicare payment

areas to be included in the project. Such recommendations shall

be made in a manner so as to ensure that payments under the

project in 2 such areas will begin on January 1, 1999, and in 2

such areas will begin on January 1, 2000.

"(B) Location of designation. - Of the 4 areas recommended

under subparagraph (A), 3 shall be in urban areas and 1 shall

be in a rural area.

"(3) Designation of additional 3 areas. - Not later than

December 31, 2001, the Competitive Pricing Advisory Committee may

recommend to the Secretary the designation of up to 3 additional,

specific medicare payment areas to be included in the project.

"(c) Project Implementation. -

"(1) In general. - Subject to paragraph (2), the Secretary

shall for each medicare payment area designated under subsection

(b) -

"(A) in accordance with the recommendations of the

Competitive Pricing Advisory Committee -

"(i) establish the benefit design among plans offered in

such area,

"(ii) structure the method for selecting plans offered in

such area; and

"(iii) establish beneficiary premiums for plans offered in

such area in a manner such that a beneficiary who enrolls in

an offered plan the per capita bid for which is less than the

standard per capita government contribution (as established

by the competitive pricing methodology established for such

area) may, at the plan's election, be offered a rebate of

some or all of the medicare part B premium that such

individual must otherwise pay in order to participate in a

Medicare+Choice plan under the Medicare+Choice program; and

"(B) in consultation with such Committee -

"(i) establish methods for setting the price to be paid to

plans, including, if the Secretaries determines appropriate,

the rewarding and penalizing of Medicare+Choice plans in the

area on the basis of the attainment of, or failure to attain,

applicable quality standards, and

"(ii) provide for the collection of plan information

(including information concerning quality and access to

care), the dissemination of information, and the methods of

evaluating the results of the project.

"(2) Consultation. - The Secretary shall take into account the

recommendations of the area advisory committee established in

section 4012(b), in implementing a project design for any area,

except that no modifications may be made in the project design

without consultation with the Competitive Pricing Advisory

Committee. In no case may the Secretary change the designation of

an area based on recommendations of any area advisory committee.

"(d) Monitoring and Report. -

"(1) Monitoring impact. - Taking into consideration the

recommendations of the Competitive Pricing Advisory Committee and

the area advisory committees, the Secretary shall closely monitor

and measure the impact of the project in the different areas on

the price and quality of, and access to, medicare covered

services, choice of health plans, changes in enrollment, and

other relevant factors.

"(2) Report. - Not later than December 31, 2002, the Secretary

shall submit to Congress a report on the progress under the

project under this subchapter, including a comparison of the

matters monitored under paragraph (1) among the different

designated areas. The report may include any legislative

recommendations for extending the project to the entire medicare

population.

"(e) Waiver Authority. - The Secretary of Health and Human

Services may waive such requirements of title XVIII of the Social

Security Act [this subchapter] (as amended by this Act) as may be

necessary for the purposes of carrying out the project.

"(f) Relationship to Other Authority. - Except pursuant to this

subchapter, the Secretary of Health and Human Services may not

conduct or continue any medicare demonstration project relating to

payment of health maintenance organizations, Medicare+Choice

organizations, or similar prepaid managed care entities on the

basis of a competitive bidding process or pricing system described

in subsection (a).

"(g) No Additional Costs to Medicare Program. - The aggregate

payments to Medicare+Choice organizations under the project for any

designated area for a fiscal year may not exceed the aggregate

payments to such organizations that would have been made under

title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), as

amended by section 4001 [enacting this part and redesignating

former part C of this subchapter as part D], if the project had not

been conducted.

"(h) Definitions. - Any term used in this subchapter which is

also used in part C of title XVIII of the Social Security Act [this

part], as amended by section 4001, shall have the same meaning as

when used in such part.

"SEC. 4012. ADVISORY COMMITTEES.

"(a) Competitive Pricing Advisory Committee. -

"(1) In general. - Before implementing the project under this

subchapter [subchapter A (Secs. 4011-4012) of chapter 2 of

subtitle A of title IV of Pub. L. 105-33], the Secretary shall

appoint the Competitive Pricing Advisory Committee, including

independent actuaries, individuals with expertise in competitive

health plan pricing, and an employee of the Office of Personnel

Management with expertise in the administration of the Federal

Employees Health Benefit Program, to make recommendations to the

Secretary concerning the designation of areas for inclusion in

the project and appropriate research design for implementing the

project.

"(2) Initial recommendations. - The Competitive Pricing

Advisory Committee initially shall submit recommendations

regarding the area selection, benefit design among plans offered,

structuring choice among health plans offered, methods for

setting the price to be paid to plans, collection of plan

information (including information concerning quality and access

to care), information dissemination, and methods of evaluating

the results of the project.

"(3) Quality recommendation. - The Competitive Pricing Advisory

Committee shall study and make recommendations regarding the

feasibility of providing financial incentives and penalties to

plans operating under the project that meet, or fail to meet,

applicable quality standards.

"(4) Advice during implementation. - Upon implementation of the

project, the Competitive Pricing Advisory Committee shall

continue to advise the Secretary on the application of the design

in different areas and changes in the project based on experience

with its operations.

"(5) Sunset. - The Competitive Pricing Advisory Committee shall

terminate on December 31, 2004.

"(b) Appointment of Area Advisory Committee. - Upon the

designation of an area for inclusion in the project, the Secretary

shall appoint an area advisory committee, composed of

representatives of health plans, providers, and medicare

beneficiaries in the area, to advise the Secretary concerning how

the project will be implemented in the area. Such advice may

include advice concerning the marketing and pricing of plans in the

area and other salient factors. The duration of such a committee

for an area shall be for the duration of the operation of the

project in the area.

"(c) Special application. - Notwithstanding section 9(c) of the

Federal Advisory Committee Act (5 U.S.C. App.), the Competitive

Pricing Advisory Commission and any area advisory committee

(described in subsection (b)) may meet as soon as the members of

the commission or committee, respectively, are appointed."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-22,

1395w-24, 1395w-27, 1395w-28, 1395mm, 1395eee of this title.

-FOOTNOTE-

(!1) So in original. Two cls. (iii) have been enacted.

-End-

-CITE-

42 USC Sec. 1395w-24 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-24. Premiums

-STATUTE-

(a) Submission of proposed premiums and related information

(1) In general

Not later than the second Monday in September of 2002, 2003,

and 2004 (or July 1 of each other year), each Medicare+Choice

organization shall submit to the Secretary, in a form and manner

specified by the Secretary and for each Medicare+Choice plan for

the service area (or segment of such an area if permitted under

subsection (h) of this section) in which it intends to be offered

in the following year -

(A) the information described in paragraph (2), (3), or (4)

for the type of plan involved; and

(B) the enrollment capacity (if any) in relation to the plan

and area.

(2) Information required for coordinated care plans

For a Medicare+Choice plan described in section

1395w-21(a)(2)(A) of this title, the information described in

this paragraph is as follows:

(A) Basic (and additional) benefits

For benefits described in section 1395w-22(a)(1)(A) of this

title -

(i) the adjusted community rate (as defined in subsection

(f)(3) of this section);

(ii) the Medicare+Choice monthly basic beneficiary premium

(as defined in subsection (b)(2)(A) of this section);

(iii) a description of deductibles, coinsurance, and

copayments applicable under the plan and the actuarial value

of such deductibles, coinsurance, and copayments, described

in subsection (e)(1)(A) of this section; and

(iv) if required under subsection (f)(1) of this section, a

description of the additional benefits to be provided

pursuant to such subsection and the value determined for such

proposed benefits under such subsection.

(B) Supplemental benefits

For benefits described in section 1395w-22(a)(3) of this

title -

(i) the adjusted community rate (as defined in subsection

(f)(3) of this section);

(ii) the Medicare+Choice monthly supplemental beneficiary

premium (as defined in subsection (b)(2)(B) of this section);

and

(iii) a description of deductibles, coinsurance, and

copayments applicable under the plan and the actuarial value

of such deductibles, coinsurance, and copayments, described

in subsection (e)(2) of this section.

(3) Requirements for MSA plans

For an MSA plan described, the information described in this

paragraph is as follows:

(A) Basic (and additional) benefits

For benefits described in section 1395w-22(a)(1)(A) of this

title, the amount of the Medicare+Choice monthly MSA premium.

(B) Supplemental benefits

For benefits described in section 1395w-22(a)(3) of this

title, the amount of the Medicare+Choice monthly supplementary

beneficiary premium.

(4) Requirements for private fee-for-service plans

For a Medicare+Choice plan described in section

1395w-21(a)(2)(C) of this title for benefits described in section

1395w-22(a)(1)(A) of this title, the information described in

this paragraph is as follows:

(A) Basic (and additional) benefits

For benefits described in section 1395w-22(a)(1)(A) of this

title -

(i) the adjusted community rate (as defined in subsection

(f)(3) of this section);

(ii) the amount of the Medicare+Choice monthly basic

beneficiary premium;

(iii) a description of the deductibles, coinsurance, and

copayments applicable under the plan, and the actuarial value

of such deductibles, coinsurance, and copayments, as

described in subsection (e)(4)(A) of this section; and

(iv) if required under subsection (f)(1) of this section, a

description of the additional benefits to be provided

pursuant to such subsection and the value determined for such

proposed benefits under such subsection.

(B) Supplemental benefits

For benefits described in section 1395w-22(a)(3) of this

title, the amount of the Medicare+Choice monthly supplemental

beneficiary premium (as defined in subsection (b)(2)(B) of this

section).

(5) Review

(A) In general

Subject to subparagraph (B), the Secretary shall review the

adjusted community rates, the amounts of the basic and

supplemental premiums, and values filed under this subsection

and shall approve or disapprove such rates, amounts, and values

so submitted. The Chief Actuary of the Health Care Financing

Administration shall review the actuarial assumptions and data

used by the Medicare+Choice organization with respect to such

rates, amounts, and values so submitted to determine the

appropriateness of such assumptions and data.

(B) Exception

The Secretary shall not review, approve, or disapprove the

amounts submitted under paragraph (3) or subparagraphs (A)(ii)

and (B) of paragraph (4).

(b) Monthly premium charged

(1) In general

(A) Rule for other than MSA plans

The monthly amount of the premium charged to an individual

enrolled in a Medicare+Choice plan (other than an MSA plan)

offered by a Medicare+Choice organization shall be equal to the

sum of the Medicare+Choice monthly basic beneficiary premium

and the Medicare+Choice monthly supplementary beneficiary

premium (if any).

(B) MSA plans

The monthly amount of the premium charged to an individual

enrolled in an MSA plan offered by a Medicare+Choice

organization shall be equal to the Medicare+Choice monthly

supplemental beneficiary premium (if any).

(2) Premium terminology defined

For purposes of this part:

(A) The Medicare+Choice monthly basic beneficiary premium

The term "Medicare+Choice monthly basic beneficiary premium"

means, with respect to a Medicare+Choice plan, the amount

authorized to be charged under subsection (e)(1) of this

section for the plan, or, in the case of a Medicare+Choice

private fee-for-service plan, the amount filed under subsection

(a)(4)(A)(ii) of this section.

(B) Medicare+Choice monthly supplemental beneficiary premium

The term "Medicare+Choice monthly supplemental beneficiary

premium" means, with respect to a Medicare+Choice plan, the

amount authorized to be charged under subsection (e)(2) of this

section for the plan or, in the case of a MSA plan or

Medicare+ÐChoice private fee-for-service plan, the amount filed

under paragraph (3)(B) or (4)(B) of subsection (a) of this

section.

(C) Medicare+Choice monthly MSA premium

The term "Medicare+Choice monthly MSA premium" means, with

respect to a Medicare+Choice plan, the amount of such premium

filed under subsection (a)(3)(A) of this section for the plan.

(c) Uniform premium

The Medicare+Choice monthly basic and supplemental beneficiary

premium, the Medicare+ÐChoice monthly MSA premium charged under

subsection (b) of this section of a Medicare+ÐChoice organization

under this part may not vary among individuals enrolled in the

plan.

(d) Terms and conditions of imposing premiums

Each Medicare+Choice organization shall permit the payment of

Medicare+Choice monthly basic and supplemental beneficiary premiums

on a monthly basis, may terminate election of individuals for a

Medicare+Choice plan for failure to make premium payments only in

accordance with section 1395w-21(g)(3)(B)(i) of this title, and may

not provide for cash or other monetary rebates as an inducement for

enrollment or otherwise.

(e) Limitation on enrollee liability

(1) For basic and additional benefits

In no event may -

(A) the Medicare+Choice monthly basic beneficiary premium

(multiplied by 12) and the actuarial value of the deductibles,

coinsurance, and copayments applicable on average to

individuals enrolled under this part with a Medicare+Choice

plan described in section 1395w-21(a)(2)(A) of this title of an

organization with respect to required benefits described in

section 1395w-22(a)(1)(A) of this title and additional benefits

(if any) required under subsection (f)(1)(A) of this section

for a year, exceed

(B) the actuarial value of the deductibles, coinsurance, and

copayments that would be applicable on average to individuals

entitled to benefits under part A of this subchapter and

enrolled under part B of this subchapter if they were not

members of a Medicare+Choice organization for the year.

(2) For supplemental benefits

If the Medicare+Choice organization provides to its members

enrolled under this part in a Medicare+Choice plan described in

section 1395w-21(a)(2)(A) of this title with respect to

supplemental benefits described in section 1395w-22(a)(3) of this

title, the sum of the Medicare+Choice monthly supplemental

beneficiary premium (multiplied by 12) charged and the actuarial

value of its deductibles, coinsurance, and copayments charged

with respect to such benefits may not exceed the adjusted

community rate for such benefits (as defined in subsection (f)(3)

of this section).

(3) Determination on other basis

If the Secretary determines that adequate data are not

available to determine the actuarial value under paragraph (1)(A)

or (2), the Secretary may determine such amount with respect to

all individuals in same geographic area, the State, or in the

United States, eligible to enroll in the Medicare+Choice plan

involved under this part or on the basis of other appropriate

data.

(4) Special rule for private fee-for-service plans

With respect to a Medicare+Choice private fee-for-service plan

(other than a plan that is an MSA plan), in no event may -

(A) the actuarial value of the deductibles, coinsurance, and

copayments applicable on average to individuals enrolled under

this part with such a plan of an organization with respect to

required benefits described in section 1395w-22(a)(1) of this

title, exceed

(B) the actuarial value of the deductibles, coinsurance, and

copayments that would be applicable on average to individuals

entitled to benefits under part A of this subchapter and

enrolled under part B of this subchapter if they were not

members of a Medicare+Choice organization for the year.

(f) Requirement for additional benefits

(1) Requirement

(A) In general

Each Medicare+Choice organization (in relation to a

Medicare+Choice plan, other than an MSA plan, it offers) shall

provide that if there is an excess amount (as defined in

subparagraph (B)) for the plan for a contract year, subject to

the succeeding provisions of this subsection, the organization

shall provide to individuals such additional benefits (as the

organization may specify) in a value which the Secretary

determines is at least equal to the adjusted excess amount (as

defined in subparagraph (C)).

(B) Excess amount

For purposes of this paragraph, the "excess amount", for an

organization for a plan, is the amount (if any) by which -

(i) the average of the capitation payments made to the

organization under section 1395w-23 of this title for the

plan at the beginning of contract year, exceeds

(ii) the actuarial value of the required benefits described

in section 1395w-22(a)(1)(A) of this title under the plan for

individuals under this part, as determined based upon an

adjusted community rate described in paragraph (3) (as

reduced for the actuarial value of the coinsurance,

copayments, and deductibles under parts A and B of this

subchapter).

(C) Adjusted excess amount

For purposes of this paragraph, the "adjusted excess amount",

for an organization for a plan, is the excess amount reduced to

reflect any amount withheld and reserved for the organization

for the year under paragraph (2).

(D) Uniform application

This paragraph shall be applied uniformly for all enrollees

for a plan.

(E) Premium reductions

(i) In general

Subject to clause (ii), as part of providing any additional

benefits required under subparagraph (A), a Medicare+Choice

organization may elect a reduction in its payments under

section 1395w-23(a)(1)(A) of this title with respect to a

Medicare+Choice plan and the Secretary shall apply such

reduction to reduce the premium under section 1395r of this

title of each enrollee in such plan as provided in section

1395s(i) of this title.

(ii) Amount of reduction

The amount of the reduction under clause (i) with respect

to any enrollee in a Medicare+Choice plan -

(I) may not exceed 125 percent of the premium described

under section 1395r(a)(3) of this title; and

(II) shall apply uniformly to each enrollee of the

Medicare+Choice plan to which such reduction applies.

(F) Construction

Nothing in this subsection shall be construed as preventing a

Medicare+Choice organization from providing supplemental

benefits (described in section 1395w-22(a)(3) of this title)

that are in addition to the health care benefits otherwise

required to be provided under this paragraph and from imposing

a premium for such supplemental benefits.

(2) Stabilization fund

A Medicare+Choice organization may provide that a part of the

value of an excess amount described in paragraph (1) be withheld

and reserved in the Federal Hospital Insurance Trust Fund and in

the Federal Supplementary Medical Insurance Trust Fund (in such

proportions as the Secretary determines to be appropriate) by the

Secretary for subsequent annual contract periods, to the extent

required to stabilize and prevent undue fluctuations in the

additional benefits offered in those subsequent periods by the

organization in accordance with such paragraph. Any of such value

of the amount reserved which is not provided as additional

benefits described in paragraph (1)(A) to individuals electing

the Medicare+Choice plan of the organization in accordance with

such paragraph prior to the end of such periods, shall revert for

the use of such trust funds.

(3) Adjusted community rate

For purposes of this subsection, subject to paragraph (4), the

term "adjusted community rate" for a service or services means,

at the election of a Medicare+Choice organization, either -

(A) the rate of payment for that service or services which

the Secretary annually determines would apply to an individual

electing a Medicare+Choice plan under this part if the rate of

payment were determined under a "community rating system" (as

defined in section 300e-1(8) of this title, other than

subparagraph (C)), or

(B) such portion of the weighted aggregate premium, which the

Secretary annually estimates would apply to such an individual,

as the Secretary annually estimates is attributable to that

service or services,

but adjusted for differences between the utilization

characteristics of the individuals electing coverage under this

part and the utilization characteristics of the other enrollees

with the plan (or, if the Secretary finds that adequate data are

not available to adjust for those differences, the differences

between the utilization characteristics of individuals selecting

other Medicare+Choice coverage, or Medicare+Choice eligible

individuals in the area, in the State, or in the United States,

eligible to elect Medicare+Choice coverage under this part and

the utilization characteristics of the rest of the population in

the area, in the State, or in the United States, respectively).

(4) Determination based on insufficient data

For purposes of this subsection, if the Secretary finds that

there is insufficient enrollment experience to determine an

average of the capitation payments to be made under this part at

the beginning of a contract period or to determine (in the case

of a newly operated provider-sponsored organization or other new

organization) the adjusted community rate for the organization,

the Secretary may determine such an average based on the

enrollment experience of other contracts entered into under this

part and may determine such a rate using data in the general

commercial marketplace.

(g) Prohibition of State imposition of premium taxes

No State may impose a premium tax or similar tax with respect to

payments to Medicare+Choice organizations under section 1395w-23 of

this title.

(h) Permitting use of segments of service areas

The Secretary shall permit a Medicare+Choice organization to

elect to apply the provisions of this section uniformly to separate

segments of a service area (rather than uniformly to an entire

service area) as long as such segments are composed of one or more

Medicare+Choice payment areas.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1854, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 308; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(C), title V, Secs. 515(a), 516(a)], Nov. 29, 1999, 113

Stat. 1536, 1501A-367, 1501A-384; Pub. L. 106-554, Sec. 1(a)(6)

[title VI, Secs. 606(a)(1), 622(a)], Dec. 21, 2000, 114 Stat. 2763,

2763A-557, 2763A-566; Pub. L. 107-188, title V, Sec. 532(b)(1),

June 12, 2002, 116 Stat. 696.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in subsecs.

(e)(1)(B), (4)(B) and (f)(1)(B)(ii), are classified to section

1395c et seq. and section 1395j et seq., respectively, of this

title.

-MISC1-

AMENDMENTS

2002 - Subsec. (a)(1). Pub. L. 107-188 substituted "Not later

than the second Monday in September of 2002, 2003, and 2004 (or

July 1 of each other year)" for "Not later than July 1 of each

year" in introductory provisions.

2000 - Subsec. (a)(5)(A). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 622(a)], substituted "values so submitted" for "value so

submitted" and inserted at end "The Chief Actuary of the Health

Care Financing Administration shall review the actuarial

assumptions and data used by the Medicare+Choice organization with

respect to such rates, amounts, and values so submitted to

determine the appropriateness of such assumptions and data."

Subsec. (f)(1)(E), (F). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 606(a)(1)], added subpar. (E) and redesignated former subpar.

(E) as (F).

1999 - Subsec. (a)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 516(a)], substituted "July 1" for "May 1" in introductory

provisions.

Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec. 515(a)(1)],

inserted "(or segment of such an area if permitted under subsection

(h) of this section)" after "service area" in introductory

provisions.

Subsec. (a)(2)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(6)(C)(i)(I)], inserted "section" before

"1395w-22(a)(1)(A) of this title" in introductory provisions.

Subsec. (a)(2)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(6)(C)(i)(II)], inserted "section" after "described in"

in introductory provisions.

Subsec. (a)(3)(A), (B). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(6)(C)(ii)], inserted "section" after "described

in".

Subsec. (a)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec.

321(k)(6)(C)(iii)(I)], which directed insertion of "section" after

"described in", was executed by making the insertion after

"described in" the second time appearing in introductory provisions

to reflect the probable intent of Congress.

Subsec. (a)(4)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(6)(C)(iii)(II)], inserted "section" after "described

in" in introductory provisions.

Subsec. (a)(4)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(6)(C)(iii)(III)], inserted "section" after "described

in".

Subsec. (h). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

515(a)(2)], added subsec. (h).

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-188, title V, Sec. 532(b)(2), June 12, 2002, 116

Stat. 696, provided that: "The amendment made by paragraph (1)

[amending this section] shall apply to information submitted for

years beginning with 2003."

EFFECTIVE DATE OF 2000 AMENDMENT

Amendment by section 1(a)(6) [title VI, Sec. 606(a)(1)] of Pub.

L. 106-554 applicable to years beginning with 2003, see section

1(a)(6) [title VI, Sec. 606(b)] of Pub. L. 106-554, set out as a

note under section 1395r of this title.

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 622(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-566, provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

submissions made on or after May 1, 2001."

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(6)(C)] of

Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 515(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-384, provided that: "The

amendments made by this section [amending this section] apply to

contract years beginning on or after January 1, 2001."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 516(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-384, provided that: "The

amendment made by subsection (a) [amending this section] applies to

information submitted by Medicare+Choice organizations for years

beginning with 1999."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395r, 1395s, 1395w,

1395w-22, 1395w-23, 1395w-27, 1395w-28, 1395mm of this title.

-End-

-CITE-

42 USC Sec. 1395w-25 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-25. Organizational and financial requirements for

Medicare+Choice organizations; provider-sponsored organizations

-STATUTE-

(a) Organized and licensed under State law

(1) In general

Subject to paragraphs (2) and (3), a Medicare+Choice

organization shall be organized and licensed under State law as a

risk-bearing entity eligible to offer health insurance or health

benefits coverage in each State in which it offers a

Medicare+Choice plan.

(2) Special exception for provider-sponsored organizations

(A) In general

In the case of a provider-sponsored organization that seeks

to offer a Medicare+Choice plan in a State, the Secretary shall

waive the requirement of paragraph (1) that the organization be

licensed in that State if -

(i) the organization files an application for such waiver

with the Secretary by not later than November 1, 2002, and

(ii) the Secretary determines, based on the application and

other evidence presented to the Secretary, that any of the

grounds for approval of the application described in

subparagraph (B), (C), or (D) has been met.

(B) Failure to act on licensure application on a timely basis

The ground for approval of such a waiver application

described in this subparagraph is that the State has failed to

complete action on a licensing application of the organization

within 90 days of the date of the State's receipt of a

substantially complete application. No period before August 5,

1997, shall be included in determining such 90-day period.

(C) Denial of application based on discriminatory treatment

The ground for approval of such a waiver application

described in this subparagraph is that the State has denied

such a licensing application and -

(i) the standards or review process imposed by the State as

a condition of approval of the license imposes any material

requirements, procedures, or standards (other than solvency

requirements) to such organizations that are not generally

applicable to other entities engaged in a substantially

similar business, or

(ii) the State requires the organization, as a condition of

licensure, to offer any product or plan other than a

Medicare+ÐChoice plan.

(D) Denial of application based on application of solvency

requirements

With respect to waiver applications filed on or after the

date of publication of solvency standards under section

1395w-26(a) of this title, the ground for approval of such a

waiver application described in this subparagraph is that the

State has denied such a licensing application based (in whole

or in part) on the organization's failure to meet applicable

solvency requirements and -

(i) such requirements are not the same as the solvency

standards established under section 1395w-26(a) of this

title; or

(ii) the State has imposed as a condition of approval of

the license documentation or information requirements

relating to solvency or other material requirements,

procedures, or standards relating to solvency that are

different from the requirements, procedures, and standards

applied by the Secretary under subsection (d)(2) of this

section.

For purposes of this paragraph, the term "solvency

requirements" means requirements relating to solvency and other

matters covered under the standards established under section

1395w-26(a) of this title.

(E) Treatment of waiver

In the case of a waiver granted under this paragraph for a

provider-sponsored organization with respect to a State -

(i) Limitation to State

The waiver shall be effective only with respect to that

State and does not apply to any other State.

(ii) Limitation to 36-month period

The waiver shall be effective only for a 36-month period

and may not be renewed.

(iii) Conditioned on compliance with consumer protection and

quality standards

The continuation of the waiver is conditioned upon the

organization's compliance with the requirements described in

subparagraph (G).

(iv) Preemption of State law

Any provisions of law of that State which relate to the

licensing of the organization and which prohibit the

organization from providing coverage pursuant to a contract

under this part shall be superseded.

(F) Prompt action on application

The Secretary shall grant or deny such a waiver application

within 60 days after the date the Secretary determines that a

substantially complete waiver application has been filed.

Nothing in this section shall be construed as preventing an

organization which has had such a waiver application denied

from submitting a subsequent waiver application.

(G) Application and enforcement of State consumer protection

and quality standards

(i) In general

A waiver granted under this paragraph to an organization

with respect to licensing under State law is conditioned upon

the organization's compliance with all consumer protection

and quality standards insofar as such standards -

(I) would apply in the State to the organization if it

were licensed under State law;

(II) are generally applicable to other Medicare+Choice

organizations and plans in the State; and

(III) are consistent with the standards established under

this part.

Such standards shall not include any standard preempted under

section 1395w-26(b)(3)(B) of this title.

(ii) Incorporation into contract

In the case of such a waiver granted to an organization

with respect to a State, the Secretary shall incorporate the

requirement that the organization (and Medicare+Choice plans

it offers) comply with standards under clause (i) as part of

the contract between the Secretary and the organization under

section 1395w-27 of this title.

(iii) Enforcement

In the case of such a waiver granted to an organization

with respect to a State, the Secretary may enter into an

agreement with the State under which the State agrees to

provide for monitoring and enforcement activities with

respect to compliance of such an organization and its

Medicare+Choice plans with such standards. Such monitoring

and enforcement shall be conducted by the State in the same

manner as the State enforces such standards with respect to

other Medicare+Choice organizations and plans, without

discrimination based on the type of organization to which the

standards apply. Such an agreement shall specify or establish

mechanisms by which compliance activities are undertaken,

while not lengthening the time required to review and process

applications for waivers under this paragraph.

(H) Report

By not later than December 31, 2001, the Secretary shall

submit to the Committee on Ways and Means and the Committee on

Commerce of the House of Representatives and the Committee on

Finance of the Senate a report regarding whether the waiver

process under this paragraph should be continued after December

31, 2002. In making such recommendation, the Secretary shall

consider, among other factors, the impact of such process on

beneficiaries and on the long-term solvency of the program

under this subchapter.

(3) Licensure does not substitute for or constitute certification

The fact that an organization is licensed in accordance with

paragraph (1) does not deem the organization to meet other

requirements imposed under this part.

(b) Assumption of full financial risk

The Medicare+Choice organization shall assume full financial risk

on a prospective basis for the provision of the health care

services for which benefits are required to be provided under

section 1395w-22(a)(1) of this title, except that the organization

-

(1) may obtain insurance or make other arrangements for the

cost of providing to any enrolled member such services the

aggregate value of which exceeds such aggregate level as the

Secretary specifies from time to time,

(2) may obtain insurance or make other arrangements for the

cost of such services provided to its enrolled members other than

through the organization because medical necessity required their

provision before they could be secured through the organization,

(3) may obtain insurance or make other arrangements for not

more than 90 percent of the amount by which its costs for any of

its fiscal years exceed 115 percent of its income for such fiscal

year, and

(4) may make arrangements with physicians or other health care

professionals, health care institutions, or any combination of

such individuals or institutions to assume all or part of the

financial risk on a prospective basis for the provision of basic

health services by the physicians or other health professionals

or through the institutions.

(c) Certification of provision against risk of insolvency for

unlicensed PSOs

(1) In general

Each Medicare+Choice organization that is a provider-sponsored

organization, that is not licensed by a State under subsection

(a) of this section, and for which a waiver application has been

approved under subsection (a)(2) of this section, shall meet

standards established under section 1395w-26(a) of this title

relating to the financial solvency and capital adequacy of the

organization.

(2) Certification process for solvency standards for PSOs

The Secretary shall establish a process for the receipt and

approval of applications of a provider-sponsored organization

described in paragraph (1) for certification (and periodic

recertification) of the organization as meeting such solvency

standards. Under such process, the Secretary shall act upon such

a certification application not later than 60 days after the date

the application has been received.

(d) "Provider-sponsored organization" defined

(1) In general

In this part, the term "provider-sponsored organization" means

a public or private entity -

(A) that is established or organized, and operated, by a

health care provider, or group of affiliated health care

providers,

(B) that provides a substantial proportion (as defined by the

Secretary in accordance with paragraph (2)) of the health care

items and services under the contract under this part directly

through the provider or affiliated group of providers, and

(C) with respect to which the affiliated providers share,

directly or indirectly, substantial financial risk with respect

to the provision of such items and services and have at least a

majority financial interest in the entity.

(2) Substantial proportion

In defining what is a "substantial proportion" for purposes of

paragraph (1)(B), the Secretary -

(A) shall take into account the need for such an organization

to assume responsibility for providing -

(i) significantly more than the majority of the items and

services under the contract under this section through its

own affiliated providers; and

(ii) most of the remainder of the items and services under

the contract through providers with which the organization

has an agreement to provide such items and services,

in order to assure financial stability and to address the

practical considerations involved in integrating the delivery

of a wide range of service providers;

(B) shall take into account the need for such an organization

to provide a limited proportion of the items and services under

the contract through providers that are neither affiliated with

nor have an agreement with the organization; and

(C) may allow for variation in the definition of substantial

proportion among such organizations based on relevant

differences among the organizations, such as their location in

an urban or rural area.

(3) Affiliation

For purposes of this subsection, a provider is "affiliated"

with another provider if, through contract, ownership, or

otherwise -

(A) one provider, directly or indirectly, controls, is

controlled by, or is under common control with the other,

(B) both providers are part of a controlled group of

corporations under section 1563 of the Internal Revenue Code of

1986,

(C) each provider is a participant in a lawful combination

under which each provider shares substantial financial risk in

connection with the organization's operations, or

(D) both providers are part of an affiliated service group

under section 414 of such Code.

(4) Control

For purposes of paragraph (3), control is presumed to exist if

one party, directly or indirectly, owns, controls, or holds the

power to vote, or proxies for, not less than 51 percent of the

voting rights or governance rights of another.

(5) "Health care provider" defined

In this subsection, the term "health care provider" means -

(A) any individual who is engaged in the delivery of health

care services in a State and who is required by State law or

regulation to be licensed or certified by the State to engage

in the delivery of such services in the State, and

(B) any entity that is engaged in the delivery of health care

services in a State and that, if it is required by State law or

regulation to be licensed or certified by the State to engage

in the delivery of such services in the State, is so licensed.

(6) Regulations

The Secretary shall issue regulations to carry out this

subsection.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1855, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 312.)

-REFTEXT-

REFERENCES IN TEXT

The Internal Revenue Code of 1986, referred to in subsec.

(d)(3)(B), (D), is classified generally to Title 26, Internal

Revenue Code.

-CHANGE-

CHANGE OF NAME

Committee on Commerce of House of Representatives changed to

Committee on Energy and Commerce of House of Representatives, and

jurisdiction over matters relating to securities and exchanges and

insurance generally transferred to Committee on Financial Services

of House of Representatives by House Resolution No. 5, One Hundred

Seventh Congress, Jan. 3, 2001.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-26,

1395w-28, 1395cc of this title; title 26 section 501.

-End-

-CITE-

42 USC Sec. 1395w-26 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-26. Establishment of standards

-STATUTE-

(a) Establishment of solvency standards for provider-sponsored

organizations

(1) Establishment

(A) In general

The Secretary shall establish, on an expedited basis and

using a negotiated rulemaking process under subchapter III of

chapter 5 of title 5, standards described in section

1395w-25(c)(1) of this title (relating to the financial

solvency and capital adequacy of the organization) that

entities must meet to qualify as provider-sponsored

organizations under this part.

(B) Factors to consider for solvency standards

In establishing solvency standards under subparagraph (A) for

provider-sponsored organizations, the Secretary shall consult

with interested parties and shall take into account -

(i) the delivery system assets of such an organization and

ability of such an organization to provide services directly

to enrollees through affiliated providers,

(ii) alternative means of protecting against insolvency,

including reinsurance, unrestricted surplus, letters of

credit, guarantees, organizational insurance coverage,

partnerships with other licensed entities, and valuation

attributable to the ability of such an organization to meet

its service obligations through direct delivery of care, and

(iii) any standards developed by the National Association

of Insurance Commissioners specifically for risk-based health

care delivery organizations.

(C) Enrollee protection against insolvency

Such standards shall include provisions to prevent enrollees

from being held liable to any person or entity for the

Medicare+ÐChoice organization's debts in the event of the

organization's insolvency.

(2) Publication of notice

In carrying out the rulemaking process under this subsection,

the Secretary, after consultation with the National Association

of Insurance Commissioners, the American Academy of Actuaries,

organizations representative of medicare beneficiaries, and other

interested parties, shall publish the notice provided for under

section 564(a) of title 5 by not later than 45 days after August

5, 1997.

(3) Target date for publication of rule

As part of the notice under paragraph (2), and for purposes of

this subsection, the "target date for publication" (referred to

in section 564(a)(5) of such title) shall be April 1, 1998.

(4) Abbreviated period for submission of comments

In applying section 564(c) of such title under this subsection,

"15 days" shall be substituted for "30 days".

(5) Appointment of negotiated rulemaking committee and

facilitator

The Secretary shall provide for -

(A) the appointment of a negotiated rulemaking committee

under section 565(a) of such title by not later than 30 days

after the end of the comment period provided for under section

564(c) of such title (as shortened under paragraph (4)), and

(B) the nomination of a facilitator under section 566(c) of

such title by not later than 10 days after the date of

appointment of the committee.

(6) Preliminary committee report

The negotiated rulemaking committee appointed under paragraph

(5) shall report to the Secretary, by not later than January 1,

1998, regarding the committee's progress on achieving a consensus

with regard to the rulemaking proceeding and whether such

consensus is likely to occur before 1 month before the target

date for publication of the rule. If the committee reports that

the committee has failed to make significant progress towards

such consensus or is unlikely to reach such consensus by the

target date, the Secretary may terminate such process and provide

for the publication of a rule under this subsection through such

other methods as the Secretary may provide.

(7) Final committee report

If the committee is not terminated under paragraph (6), the

rulemaking committee shall submit a report containing a proposed

rule by not later than 1 month before the target date of

publication.

(8) Interim, final effect

The Secretary shall publish a rule under this subsection in the

Federal Register by not later than the target date of

publication. Such rule shall be effective and final immediately

on an interim basis, but is subject to change and revision after

public notice and opportunity for a period (of not less than 60

days) for public comment. In connection with such rule, the

Secretary shall specify the process for the timely review and

approval of applications of entities to be certified as

provider-sponsored organizations pursuant to such rules and

consistent with this subsection.

(9) Publication of rule after public comment

The Secretary shall provide for consideration of such comments

and republication of such rule by not later than 1 year after the

target date of publication.

(b) Establishment of other standards

(1) In general

The Secretary shall establish by regulation other standards

(not described in subsection (a) of this section) for

Medicare+Choice organizations and plans consistent with, and to

carry out, this part. The Secretary shall publish such

regulations by June 1, 1998. In order to carry out this

requirement in a timely manner, the Secretary may promulgate

regulations that take effect on an interim basis, after notice

and pending opportunity for public comment.

(2) Use of current standards

Consistent with the requirements of this part, standards

established under this subsection shall be based on standards

established under section 1395mm of this title to carry out

analogous provisions of such section.

(3) Relation to State laws

(A) In general

The standards established under this subsection shall

supersede any State law or regulation (including standards

described in subparagraph (B)) with respect to Medicare+ÐChoice

plans which are offered by Medicare+ÐChoice organizations under

this part to the extent such law or regulation is inconsistent

with such standards.

(B) Standards specifically superseded

State standards relating to the following are superseded

under this paragraph:

(i) Benefit requirements (including cost-sharing

requirements).

(ii) Requirements relating to inclusion or treatment of

providers.

(iii) Coverage determinations (including related appeals

and grievance processes).

(iv) Requirements relating to marketing materials and

summaries and schedules of benefits regarding a

Medicare+Choice plan.

(4) Prohibition of midyear implementation of significant new

regulatory requirements

The Secretary may not implement, other than at the beginning of

a calendar year, regulations under this section that impose new,

significant regulatory requirements on a Medicare+Choice

organization or plan.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1856, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 317; amended

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Secs. 612(a), 614(a)],

Dec. 21, 2000, 114 Stat. 2763, 2763A-560.)

-MISC1-

AMENDMENTS

2000 - Subsec. (b)(3)(B)(i). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 614(a)(1)], inserted "(including cost-sharing

requirements)" after "Benefit requirements".

Subsec. (b)(3)(B)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title VI,

Sec. 614(a)(2)], added cl. (iv).

Subsec. (b)(4). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

612(a)], added par. (4).

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 612(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-560, provided that: "The amendment made

by subsection (a) [amending this section] takes effect on the date

of the enactment of this Act [Dec. 21, 2000]."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 614(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-561, provided that: "The amendments

made by subsection (a) [amending this section] take effect on the

date of the enactment of this Act [Dec. 21, 2000]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-22,

1395w-25, 1395w-28, 1395mm of this title.

-End-

-CITE-

42 USC Sec. 1395w-27 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-27. Contracts with Medicare+Choice organizations

-STATUTE-

(a) In general

The Secretary shall not permit the election under section

1395w-21 of this title of a Medicare+Choice plan offered by a

Medicare+ÐChoice organization under this part, and no payment shall

be made under section 1395w-23 of this title to an organization,

unless the Secretary has entered into a contract under this section

with the organization with respect to the offering of such plan.

Such a contract with an organization may cover more than 1

Medicare+Choice plan. Such contract shall provide that the

organization agrees to comply with the applicable requirements and

standards of this part and the terms and conditions of payment as

provided for in this part.

(b) Minimum enrollment requirements

(1) In general

Subject to paragraph (2), the Secretary may not enter into a

contract under this section with a Medicare+Choice organization

unless the organization has -

(A) at least 5,000 individuals (or 1,500 individuals in the

case of an organization that is a provider-sponsored

organization) who are receiving health benefits through the

organization, or

(B) at least 1,500 individuals (or 500 individuals in the

case of an organization that is a provider-sponsored

organization) who are receiving health benefits through the

organization if the organization primarily serves individuals

residing outside of urbanized areas.

(2) Application to MSA plans

In applying paragraph (1) in the case of a Medicare+Choice

organization that is offering an MSA plan, paragraph (1) shall be

applied by substituting covered lives for individuals.

(3) Allowing transition

The Secretary may waive the requirement of paragraph (1) during

the first 3 contract years with respect to an organization.

(c) Contract period and effectiveness

(1) Period

Each contract under this section shall be for a term of at

least 1 year, as determined by the Secretary, and may be made

automatically renewable from term to term in the absence of

notice by either party of intention to terminate at the end of

the current term.

(2) Termination authority

In accordance with procedures established under subsection (h)

of this section, the Secretary may at any time terminate any such

contract if the Secretary determines 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 part;

or

(C) no longer substantially meets the applicable conditions

of this part.

(3) Effective date of contracts

The effective date of any contract executed pursuant to this

section shall be specified in the contract, except that in no

case shall a contract under this section which provides for

coverage under an MSA plan be effective before January 1999 with

respect to such coverage.

(4) Previous terminations

(A) In general

The Secretary may not enter into a contract with a

Medicare+Choice organization if a previous contract with that

organization under this section was terminated at the request

of the organization within the preceding 2-year period, except

as provided in subparagraph (B) and except in such other

circumstances which warrant special consideration, as

determined by the Secretary.

(B) Earlier re-entry permitted where change in payment policy

Subparagraph (A) shall not apply with respect to the offering

by a Medicare+Choice organization of a Medicare+Choice plan in

a Medicare+Choice payment area if during the 6-month period

beginning on the date the organization notified the Secretary

of the intention to terminate the most recent previous

contract, there was a legislative change enacted (or a

regulatory change adopted) that has the effect of increasing

payment amounts under section 1395w-23 of this title for that

Medicare+Choice payment area.

(5) Contracting authority

The authority vested in the Secretary by this part may be

performed without regard to such provisions of law or 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 purpose of this

subchapter.

(d) Protections against fraud and beneficiary protections

(1) Periodic auditing

The Secretary shall provide for the annual auditing of the

financial records (including data relating to medicare

utilization, costs, and computation of the adjusted community

rate) of at least one-third of the Medicare+ÐChoice organizations

offering Medicare+ÐChoice plans under this part. The Comptroller

General shall monitor auditing activities conducted under this

subsection.

(2) Inspection and audit

Each contract under this section shall provide that the

Secretary, or any person or organization designated by the

Secretary -

(A) shall have the right to inspect or otherwise evaluate (i)

the quality, appropriateness, and timeliness of services

performed under the contract, and (ii) the facilities of the

organization when there is reasonable evidence of some need for

such inspection, and

(B) shall have the right to audit and inspect any books and

records of the Medicare+Choice organization that pertain (i) to

the ability of the organization to bear the risk of potential

financial losses, or (ii) to services performed or

determinations of amounts payable under the contract.

(3) Enrollee notice at time of termination

Each contract under this section shall require the organization

to provide (and pay for) written notice in advance of the

contract's termination, as well as a description of alternatives

for obtaining benefits under this subchapter, to each individual

enrolled with the organization under this part.

(4) Disclosure

(A) In general

Each Medicare+Choice organization shall, in accordance with

regulations of the Secretary, report to the Secretary financial

information which shall include the following:

(i) Such information as the Secretary may require

demonstrating that the organization has a fiscally sound

operation.

(ii) A copy of the report, if any, filed with the Health

Care Financing Administration containing the information

required to be reported under section 1320a-3 of this title

by disclosing entities.

(iii) A description of transactions, as specified by the

Secretary, between the organization and a party in interest.

Such transactions shall include -

(I) any sale or exchange, or leasing of any property

between the organization and a party in interest;

(II) any furnishing for consideration of goods, services

(including management services), or facilities between the

organization and a party in interest, but not including

salaries paid to employees for services provided in the

normal course of their employment and health services

provided to members by hospitals and other providers and by

staff, medical group (or groups), individual practice

association (or associations), or any combination thereof;

and

(III) any lending of money or other extension of credit

between an organization and a party in interest.

The Secretary may require that information reported respecting

an organization which controls, is controlled by, or is under

common control with, another entity be in the form of a

consolidated financial statement for the organization and such

entity.

(B) "Party in interest" defined

For the purposes of this paragraph, the term "party in

interest" means -

(i) any director, officer, partner, or employee responsible

for management or administration of a Medicare+Choice

organization, any person who is directly or indirectly the

beneficial owner of more than 5 percent of the equity of the

organization, any person who is the beneficial owner of a

mortgage, deed of trust, note, or other interest secured by,

and valuing more than 5 percent of the organization, and, in

the case of a Medicare+Choice organization organized as a

nonprofit corporation, an incorporator or member of such

corporation under applicable State corporation law;

(ii) any entity in which a person described in clause (i) -

(I) is an officer or director;

(II) is a partner (if such entity is organized as a

partnership);

(III) has directly or indirectly a beneficial interest of

more than 5 percent of the equity; or

(IV) has a mortgage, deed of trust, note, or other

interest valuing more than 5 percent of the assets of such

entity;

(iii) any person directly or indirectly controlling,

controlled by, or under common control with an organization;

and

(iv) any spouse, child, or parent of an individual

described in clause (i).

(C) Access to information

Each Medicare+Choice organization shall make the information

reported pursuant to subparagraph (A) available to its

enrollees upon reasonable request.

(5) Loan information

The contract shall require the organization to notify the

Secretary of loans and other special financial arrangements which

are made between the organization and subcontractors, affiliates,

and related parties.

(e) Additional contract terms

(1) In general

The contract shall contain such other terms and conditions not

inconsistent with this part (including requiring the organization

to provide the Secretary with such information) as the Secretary

may find necessary and appropriate.

(2) Cost-sharing in enrollment-related costs

(A) In general

A Medicare+Choice organization shall pay the fee established

by the Secretary under subparagraph (B).

(B) Authorization

The Secretary is authorized to charge a fee to each

Medicare+Choice organization with a contract under this part

that is equal to the organization's pro rata share (as

determined by the Secretary) of the aggregate amount of fees

which the Secretary is directed to collect in a fiscal year.

Any amounts collected shall be available without further

appropriation to the Secretary for the purpose of carrying out

section 1395w-21 of this title (relating to enrollment and

dissemination of information) and section 1395b-4 of this title

(relating to the health insurance counseling and assistance

program).

(C) Authorization of appropriations

There are authorized to be appropriated for the purposes

described in subparagraph (B) for each fiscal year beginning

with fiscal year 2001 an amount equal to $100,000,000, reduced

by the amount of fees authorized to be collected under this

paragraph for the fiscal year.

(D) Limitation

In any fiscal year the fees collected by the Secretary under

subparagraph (B) shall not exceed the lesser of -

(i) the estimated costs to be incurred by the Secretary in

the fiscal year in carrying out the activities described in

section 1395w-21 of this title and section 1395b-4 of this

title; or

(ii)(I) $200,000,000 in fiscal year 1998;

(II) $150,000,000 in fiscal year 1999;

(III) $100,000,000 in fiscal year 2000; and

(IV) the Medicare+Choice portion (as defined in

subparagraph (E)) of $100,000,000 in fiscal year 2001 and

each succeeding fiscal year.

(E) Medicare+Choice portion defined

In this paragraph, the term "Medicare+Choice portion" means,

for a fiscal year, the ratio, as estimated by the Secretary, of

-

(i) the average number of individuals enrolled in

Medicare+Choice plans during the fiscal year, to

(ii) the average number of individuals entitled to benefits

under part A of this subchapter, and enrolled under part B of

this subchapter, during the fiscal year.

(f) Prompt payment by Medicare+Choice organization

(1) Requirement

A contract under this part shall require a Medicare+Choice

organization to provide prompt payment (consistent with the

provisions of sections 1395h(c)(2) and 1395u(c)(2) of this title)

of claims submitted for services and supplies furnished to

enrollees pursuant to the contract, if the services or supplies

are not furnished under a contract between the organization and

the provider or supplier (or in the case of a Medicare+Choice

private fee-for-service plan, if a claim is submitted to such

organization by an enrollee).

(2) Secretary's option to bypass noncomplying organization

In the case of a Medicare+Choice eligible organization which

the Secretary determines, after notice and opportunity for a

hearing, has failed to make payments of amounts in compliance

with paragraph (1), the Secretary may provide for direct payment

of the amounts owed to providers and suppliers (or, in the case

of a Medicare+Choice private fee-for-service plan, amounts owed

to the enrollees) for covered services and supplies furnished to

individuals enrolled under this part under the contract. If the

Secretary provides for the direct payments, the Secretary shall

provide for an appropriate reduction in the amount of payments

otherwise made to the organization under this part to reflect the

amount of the Secretary's payments (and the Secretary's costs in

making the payments).

(g) Intermediate sanctions

(1) In general

If the Secretary determines that a Medicare+Choice organization

with a contract under this section -

(A) fails substantially to provide medically necessary items

and services that are required (under law or under the

contract) to be provided to an individual covered under the

contract, if the failure has adversely affected (or has

substantial likelihood of adversely affecting) the individual;

(B) imposes premiums on individuals enrolled under this part

in excess of the amount of the Medicare+Choice monthly basic

and supplemental beneficiary premiums permitted under section

1395w-24 of this title;

(C) acts to expel or to refuse to re-enroll an individual in

violation of the provisions of this part;

(D) engages in any practice that would reasonably be expected

to have the effect of denying or discouraging enrollment

(except as permitted by this part) by eligible individuals with

the organization whose medical condition or history indicates a

need for substantial future medical services;

(E) misrepresents or falsifies information that is furnished

-

(i) to the Secretary under this part, or

(ii) to an individual or to any other entity under this

part;

(F) fails to comply with the applicable requirements of

section 1395w-22(j)(3) or 1395w-22(k)(2)(A)(ii) of this title;

or

(G) employs or contracts with any individual or entity that

is excluded from participation under this subchapter under

section 1320a-7 or 1320a-7a of this title for the provision of

health care, utilization review, medical social work, or

administrative services or employs or contracts with any entity

for the provision (directly or indirectly) through such an

excluded individual or entity of such services;

the Secretary may provide, in addition to any other remedies

authorized by law, for any of the remedies described in paragraph

(2).

(2) Remedies

The remedies described in this paragraph are -

(A) civil money penalties of not more than $25,000 for each

determination under paragraph (1) or, with respect to a

determination under subparagraph (D) or (E)(i) of such

paragraph, of not more than $100,000 for each such

determination, plus, with respect to a determination under

paragraph (1)(B), double the excess amount charged in violation

of such paragraph (and the excess amount charged shall be

deducted from the penalty and returned to the individual

concerned), and plus, with respect to a determination under

paragraph (1)(D), $15,000 for each individual not enrolled as a

result of the practice involved,

(B) suspension of enrollment of individuals under this part

after the date the Secretary notifies the organization of a

determination under paragraph (1) and until the Secretary is

satisfied that the basis for such determination has been

corrected and is not likely to recur, or

(C) suspension of payment to the organization under this part

for individuals enrolled after the date the Secretary notifies

the organization of a determination under paragraph (1) and

until the Secretary is satisfied that the basis for such

determination has been corrected and is not likely to recur.

(3) Other intermediate sanctions

In the case of a Medicare+Choice organization for which the

Secretary makes a determination under subsection (c)(2) of this

section the basis of which is not described in paragraph (1), the

Secretary may apply the following intermediate sanctions:

(A) Civil money penalties of not more than $25,000 for each

determination under subsection (c)(2) of this section if the

deficiency that is the basis of the determination has directly

adversely affected (or has the substantial likelihood of

adversely affecting) an individual covered under the

organization's contract.

(B) Civil money penalties of not more than $10,000 for each

week beginning after the initiation of civil money penalty

procedures by the Secretary during which the deficiency that is

the basis of a determination under subsection (c)(2) of this

section exists.

(C) Suspension of enrollment of individuals under this part

after the date the Secretary notifies the organization of a

determination under subsection (c)(2) of this section and until

the Secretary is satisfied that the deficiency that is the

basis for the determination has been corrected and is not

likely to recur.

(D) Civil monetary penalties of not more than $100,000, or

such higher amount as the Secretary may establish by

regulation, where the finding under subsection (c)(2)(A) of

this section is based on the organization's termination of its

contract under this section other than at a time and in a

manner provided for under subsection (a) of this section.

(4) Civil money penalties

The provisions of section 1320a-7a (other than subsections (a)

and (b)) of this title shall apply to a civil money penalty under

paragraph (2) or (3) in the same manner as they apply to a civil

money penalty or proceeding under section 1320a-7a(a) of this

title.

(h) Procedures for termination

(1) In general

The Secretary may terminate a contract with a Medicare+Choice

organization under this section in accordance with formal

investigation and compliance procedures established by the

Secretary under which -

(A) the Secretary provides the organization with the

reasonable opportunity to develop and implement a corrective

action plan to correct the deficiencies that were the basis of

the Secretary's determination under subsection (c)(2) of this

section; and

(B) the Secretary provides the organization with reasonable

notice and opportunity for hearing (including the right to

appeal an initial decision) before terminating the contract.

(2) Exception for imminent and serious risk to health

Paragraph (1) shall not apply if the Secretary determines that

a delay in termination, resulting from compliance with the

procedures specified in such paragraph prior to termination,

would pose an imminent and serious risk to the health of

individuals enrolled under this part with the organization.

(i) Medicare+Choice program compatibility with employer or union

group health plans

To facilitate the offering of Medicare+Choice plans under

contracts between Medicare+Choice organizations and employers,

labor organizations, or the trustees of a fund established by one

or more employers or labor organizations (or combination thereof)

to furnish benefits to the entity's employees, former employees (or

combination thereof) or members or former members (or combination

thereof) of the labor organizations, the Secretary may waive or

modify requirements that hinder the design of, the offering of, or

the enrollment in such Medicare+Choice plans.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1857, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 319; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Secs. 513(a),

(b)(1), 522(a)], Nov. 29, 1999, 113 Stat. 1536, 1501A-383,

1501A-387; Pub. L. 106-554, Sec. 1(a)(6) [title VI, Secs. 617(a),

623(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A-561, 2763A-566.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in subsec.

(e)(2)(E)(ii), are classified to section 1395c et seq. and section

1395j et seq., respectively, of this title.

-MISC1-

AMENDMENTS

2000 - Subsec. (g)(3)(D). Pub. L. 106-554, Sec. 1(a)(6) [title

VI, Sec. 623(a)], added subpar. (D).

Subsec. (i). Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec.

617(a)], added subsec. (i).

1999 - Subsec. (c)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 513(b)(1)(B), (C)], designated existing provisions as subpar.

(A), inserted heading, realigned margins, and added subpar. (B).

Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec. 513(a),

(b)(1)(A)], substituted "2-year period" for "5-year period" and

"except as provided in subparagraph (B) and except in such other

circumstances" for "except in circumstances".

Subsec. (e)(2)(B). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 522(a)(1)], substituted "Any amounts collected shall be

available without further appropriation to the Secretary for" for

"Any amounts collected are authorized to be appropriated only for".

Subsec. (e)(2)(C). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 522(a)(2)], amended heading and text of subpar. (C) generally.

Prior to amendment, text read as follows: "For any fiscal year, the

fees authorized under subparagraph (B) are contingent upon

enactment in an appropriations act of a provision specifying the

aggregate amount of fees the Secretary is directed to collect in a

fiscal year. Fees collected during any fiscal year under this

paragraph shall be deposited and credited as offsetting

collections."

Subsec. (e)(2)(D)(ii)(II). Pub. L. 106-113, Sec. 1000(a)(6)

[title V, Sec. 522(a)(3)(A)], struck out "and" after semicolon.

Subsec. (e)(2)(D)(ii)(III). Pub. L. 106-113, Sec. 1000(a)(6)

[title V, Sec. 522(a)(3)(B)], substituted "; and" for "and each

subsequent fiscal year."

Subsec. (e)(2)(D)(ii)(IV). Pub. L. 106-113, Sec. 1000(a)(6)

[title V, Sec. 522(a)(3)(C)], added subcl. (IV).

Subsec. (e)(2)(E). Pub. L. 106-113, Sec. 1000(a)(6) [title V,

Sec. 522(a)(4)], added subpar. (E).

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 617(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-562, provided that: "The amendment made

by subsection (a) [amending this section] shall apply with respect

to years beginning with 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title VI, Sec. 623(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-566, provided that: "The amendment made

by subsection (a) [amending this section] shall apply to

terminations occurring after the date of the enactment of this Act

[Dec. 21, 2000]."

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 513(c)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-383, provided that: "The

amendments made by this section [amending this section] apply to

contract terminations occurring before, on, or after the date of

the enactment of this Act [Nov. 29, 1999]."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 522(b)],

Nov. 29, 1999, 113 Stat. 1536, 1501A-387, provided that: "The

amendments made by subsection (a) [amending this section] apply to

fees charged on or after January 1, 2001. The Secretary of Health

and Human Services may not increase the fees charged under section

1857(e)(2) of the Social Security Act (42 U.S.C. 1395w-27(e)(2))

for the 3-month period beginning with October 2000 above the level

in effect during the previous 9-month period."

CONSTRUCTION RELATING TO ADDITIONAL EXCEPTIONS

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec.

513(b)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A-383, provided

that: "Nothing in the amendment made by paragraph (1)(C) [amending

this section] shall be construed to affect the authority of the

Secretary of Health and Human Services to provide for exceptions in

addition to the exception provided in such amendment, including

exceptions provided under Operational Policy Letter #103

(OPL99.103)."

IMMEDIATE EFFECTIVE DATE FOR CERTAIN REQUIREMENTS FOR

DEMONSTRATIONS

Section 4002(g) of Pub. L. 105-33 provided that: "Section

1857(e)(2) of the Social Security Act [subsec. (e)(2) of this

section] (requiring contribution to certain costs related to the

enrollment process comparative materials) applies to demonstrations

with respect to which enrollment is effected or coordinated under

section 1851 of such Act [section 1395w-21 of this title]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-22,

1395w-23, 1395w-25, 1395w-28, 1395mm, 1395eee, 1396u-4 of this

title.

-End-

-CITE-

42 USC Sec. 1395w-28 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part C - Medicare+Choice Program

-HEAD-

Sec. 1395w-28. Definitions; miscellaneous provisions

-STATUTE-

(a) Definitions relating to Medicare+Choice organizations

In this part -

(1) Medicare+Choice organization

The term "Medicare+Choice organization" means a public or

private entity that is certified under section 1395w-26 of this

title as meeting the requirements and standards of this part for

such an organization.

(2) Provider-sponsored organization

The term "provider-sponsored organization" is defined in

section 1395w-25(d)(1) of this title.

(b) Definitions relating to Medicare+Choice plans

(1) Medicare+Choice plan

The term "Medicare+Choice plan" means health benefits coverage

offered under a policy, contract, or plan by a Medicare+Choice

organization pursuant to and in accordance with a contract under

section 1395w-27 of this title.

(2) Medicare+Choice private fee-for-service plan

The term "Medicare+Choice private fee-for-service plan" means a

Medicare+Choice plan that -

(A) reimburses hospitals, physicians, and other providers at

a rate determined by the plan on a fee-for-service basis

without placing the provider at financial risk;

(B) does not vary such rates for such a provider based on

utilization relating to such provider; and

(C) does not restrict the selection of providers among those

who are lawfully authorized to provide the covered services and

agree to accept the terms and conditions of payment established

by the plan.

(3) MSA plan

(A) In general

The term "MSA plan" means a Medicare+ÐChoice plan that -

(i) provides reimbursement for at least the items and

services described in section 1395w-22(a)(1) of this title in

a year but only after the enrollee incurs countable expenses

(as specified under the plan) equal to the amount of an

annual deductible (described in subparagraph (B));

(ii) counts as such expenses (for purposes of such

deductible) at least all amounts that would have been payable

under parts A and B of this subchapter, and that would have

been payable by the enrollee as deductibles, coinsurance, or

copayments, if the enrollee had elected to receive benefits

through the provisions of such parts; and

(iii) provides, after such deductible is met for a year and

for all subsequent expenses for items and services referred

to in clause (i) in the year, for a level of reimbursement

that is not less than -

(I) 100 percent of such expenses, or

(II) 100 percent of the amounts that would have been paid

(without regard to any deductibles or coinsurance) under

parts A and B of this subchapter with respect to such

expenses,

whichever is less.

(B) Deductible

The amount of annual deductible under an MSA plan -

(i) for contract year 1999 shall be not more than $6,000;

and

(ii) for a subsequent contract year shall be not more than

the maximum amount of such deductible for the previous

contract year under this subparagraph increased by the

national per capita Medicare+Choice growth percentage under

section 1395w-23(c)(6) of this title for the year.

If the amount of the deductible under clause (ii) is not a

multiple of $50, the amount shall be rounded to the nearest

multiple of $50.

(c) Other references to other terms

(1) Medicare+Choice eligible individual

The term "Medicare+Choice eligible individual" is defined in

section 1395w-21(a)(3) of this title.

(2) Medicare+Choice payment area

The term "Medicare+Choice payment area" is defined in section

1395w-23(d) of this title.

(3) National per capita Medicare+Choice growth percentage

The "national per capita Medicare+Choice growth percentage" is

defined in section 1395w-23(c)(6) of this title.

(4) Medicare+Choice monthly basic beneficiary premium;

Medicare+Choice monthly supplemental beneficiary premium

The terms "Medicare+Choice monthly basic beneficiary premium"

and "Medicare+Choice monthly supplemental beneficiary premium"

are defined in section 1395w-24(a)(2) of this title.

(d) Coordinated acute and long-term care benefits under

Medicare+Choice plan

Nothing in this part shall be construed as preventing a State

from coordinating benefits under a medicaid plan under subchapter

XIX of this chapter with those provided under a Medicare+Choice

plan in a manner that assures continuity of a full-range of acute

care and long-term care services to poor elderly or disabled

individuals eligible for benefits under this subchapter and under

such plan.

(e) Restriction on enrollment for certain Medicare+Choice plans

(1) In general

In the case of a Medicare+Choice religious fraternal benefit

society plan described in paragraph (2), notwithstanding any

other provision of this part to the contrary and in accordance

with regulations of the Secretary, the society offering the plan

may restrict the enrollment of individuals under this part to

individuals who are members of the church, convention, or group

described in paragraph (3)(B) with which the society is

affiliated.

(2) Medicare+Choice religious fraternal benefit society plan

described

For purposes of this subsection, a Medicare+Choice religious

fraternal benefit society plan described in this paragraph is a

Medicare+Choice plan described in section 1395w-21(a)(2) of this

title that -

(A) is offered by a religious fraternal benefit society

described in paragraph (3) only to members of the church,

convention, or group described in paragraph (3)(B); and

(B) permits all such members to enroll under the plan without

regard to health status-related factors.

Nothing in this subsection shall be construed as waiving any plan

requirements relating to financial solvency.

(3) "Religious fraternal benefit society" defined

For purposes of paragraph (2)(A), a "religious fraternal

benefit society" described in this section is an organization

that -

(A) is described in section 501(c)(8) of the Internal Revenue

Code of 1986 and is exempt from taxation under section 501(a)

of such Act;

(B) is affiliated with, carries out the tenets of, and shares

a religious bond with, a church or convention or association of

churches or an affiliated group of churches;

(C) offers, in addition to a Medicare+ÐChoice religious

fraternal benefit society plan, health coverage to individuals

not entitled to benefits under this subchapter who are members

of such church, convention, or group; and

(D) does not impose any limitation on membership in the

society based on any health status-related factor.

(4) Payment adjustment

Under regulations of the Secretary, in the case of individuals

enrolled under this part under a Medicare+Choice religious

fraternal benefit society plan described in paragraph (2), the

Secretary shall provide for such adjustment to the payment

amounts otherwise established under section 1395w-24 of this

title as may be appropriate to assure an appropriate payment

level, taking into account the actuarial characteristics and

experience of such individuals.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1859, as added Pub. L.

105-33, title IV, Sec. 4001, Aug. 5, 1997, 111 Stat. 325; amended

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title V, Sec. 523], Nov.

29, 1999, 113 Stat. 1536, 1501A-387.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in subsec.

(b)(3)(A), are classified to section 1395c et seq. and section

1395j et seq., respectively, of this title.

The Internal Revenue Code of 1986, referred to in subsec.

(e)(3)(A), is classified generally to Title 26, Internal Revenue

Code.

-MISC1-

AMENDMENTS

1999 - Subsec. (e)(2). Pub. L. 106-113 substituted "section

1395w-21(a)(2) of this title" for "section 1395w-21(a)(2)(A) of

this title" in introductory provisions.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1395w-21, 1395w-22,

1395w-23 of this title; title 26 section 138.

-End-

-CITE-

42 USC Part D - Miscellaneous Provisions 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

PART D - MISCELLANEOUS PROVISIONS

-SECREF-

PART REFERRED TO IN OTHER SECTIONS

This part is referred to in sections 426, 1395i-4 of this title;

title 45 section 231f.

-End-

-CITE-

42 USC Sec. 1395x 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395x. Definitions

-STATUTE-

For purposes of this subchapter -

(a) Spell of illness

The term "spell of illness" with respect to any individual means

a period of consecutive days -

(1) beginning with the first day (not included in a previous

spell of illness) (A) on which such individual is furnished

inpatient hospital services, inpatient critical access hospital

services or extended care services, and (B) which occurs in a

month for which he is entitled to benefits under part A of this

subchapter, and

(2) ending with the close of the first period of 60 consecutive

days thereafter on each of which he is neither an inpatient of a

hospital or critical access hospital nor an inpatient of a

facility described in section 1396r(a)(2) of this title or

subsection (y)(1) of this section.

(b) Inpatient hospital services

The term "inpatient hospital services" means the following items

and services furnished to an inpatient of a hospital and (except as

provided in paragraph (3)) by the hospital -

(1) bed and board;

(2) such nursing services and other related services, such use

of hospital facilities, and such medical social services as are

ordinarily furnished by the hospital for the care and treatment

of inpatients, and such drugs, biologicals, supplies, appliances,

and equipment, for use in the hospital, as are ordinarily

furnished by such hospital for the care and treatment of

inpatients; and

(3) such other diagnostic or therapeutic items or services,

furnished by the hospital or by others under arrangements with

them made by the hospital, as are ordinarily furnished to

inpatients either by such hospital or by others under such

arrangements;

excluding, however -

(4) medical or surgical services provided by a physician,

resident, or intern, services described by subsection (s)(2)(K)

of this section, certified nurse-midwife services, qualified

psychologist services, and services of a certified registered

nurse anesthetist; and

(5) the services of a private-duty nurse or other private-duty

attendant.

Paragraph (4) shall not apply to services provided in a hospital by

-

(6) an intern or a resident-in-training under a teaching

program 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 Association,

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 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 Podiatric Medical

Education of the American Podiatric Medical Association; or

(7) a physician where the hospital has a teaching program

approved as specified in paragraph (6), if (A) the hospital

elects to receive any payment due under this subchapter for

reasonable costs of such services, and (B) all physicians in such

hospital agree not to bill charges for professional services

rendered in such hospital to individuals covered under the

insurance program established by this subchapter.

(c) Inpatient psychiatric hospital services

The term "inpatient psychiatric hospital services" means

inpatient hospital services furnished to an inpatient of a

psychiatric hospital.

(d) Repealed. Pub. L. 98-369, div. B, title III, Sec. 2335(b)(1),

July 18, 1984, 98 Stat. 1090

(e) Hospital

The term "hospital" (except for purposes of sections 1395f(d),

1395f(f), and 1395n(b) of this title, subsection (a)(2) of this

section, paragraph (7) of this subsection, and subsection (i) of

this section) means an institution which -

(1) is primarily engaged in providing, by or under the

supervision of physicians, to inpatients (A) diagnostic services

and therapeutic services for medical diagnosis, treatment, and

care of injured, disabled, or sick persons, or (B) rehabilitation

services for the rehabilitation of injured, disabled, or sick

persons;

(2) maintains clinical records on all patients;

(3) has bylaws in effect with respect to its staff of

physicians;

(4) has a requirement that every patient with respect to whom

payment may be made under this subchapter must be under the care

of a physician, except that a patient receiving qualified

psychologist services (as defined in subsection (ii) of this

section) may be under the care of a clinical psychologist with

respect to such services to the extent permitted under State law;

(5) provides 24-hour nursing service rendered or supervised by

a registered professional nurse, and has a licensed practical

nurse or registered professional nurse on duty at all times;

except that until January 1, 1979, the Secretary is authorized to

waive the requirement of this paragraph for any one-year period

with respect to any institution, insofar as such requirement

relates to the provision of twenty-four-hour nursing service

rendered or supervised by a registered professional nurse (except

that in any event a registered professional nurse must be present

on the premises to render or supervise the nursing service

provided, during at least the regular daytime shift), where

immediately preceding such one-year period he finds that -

(A) such institution is located in a rural area and the

supply of hospital services in such area is not sufficient to

meet the needs of individuals residing therein,

(B) the failure of such institution to qualify as a hospital

would seriously reduce the availability of such services to

such individuals, and

(C) such institution has made and continues to make a good

faith effort to comply with this paragraph, but such compliance

is impeded by the lack of qualified nursing personnel in such

area;

(6)(A) has in effect a hospital utilization review plan which

meets the requirements of subsection (k) of this section and (B)

has in place a discharge planning process that meets the

requirements of subsection (ee) of this section;

(7) in the case of an institution in any State in which State

or applicable local law provides for the licensing of hospitals,

(A) is licensed pursuant to such law or (B) is approved, by the

agency of such State or locality responsible for licensing

hospitals, as meeting the standards established for such

licensing;

(8) has in effect an overall plan and budget that meets the

requirements of subsection (z) of this section; and

(9) meets such other requirements as the Secretary finds

necessary in the interest of the health and safety of individuals

who are furnished services in the institution.

For purposes of subsection (a)(2) of this section, such term

includes any institution which meets the requirements of paragraph

(1) of this subsection. For purposes of sections 1395f(d) and

1395n(b) of this title (including determination of whether an

individual received inpatient hospital services or diagnostic

services for purposes of such sections), section 1395f(f)(2) of

this title, and subsection (i) of this section, such term includes

any institution which (i) meets the requirements of paragraphs (5)

and (7) of this subsection, (ii) is not primarily engaged in

providing the services described in subsection (j)(1)(A) of this

section and (iii) is primarily engaged in providing, by or under

the supervision of individuals referred to in paragraph (1) of

subsection (r) of this section, to inpatients diagnostic services

and therapeutic services for medical diagnosis, treatment, and care

of injured, disabled, or sick persons, or rehabilitation services

for the rehabilitation of injured, disabled, or sick persons. For

purposes of section 1395f(f)(1) of this title, such term includes

an institution which (i) is a hospital for purposes of sections

1395f(d), 1395f(f)(2), and 1395n(b) of this title and (ii) is

accredited 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 essentially equivalent to those of the Joint Commission on

Accreditation of Hospitals. Notwithstanding the preceding

provisions of this subsection, such term shall not, except for

purposes of subsection (a)(2) of this section, include any

institution which is primarily for the care and treatment of mental

diseases unless it is a psychiatric hospital (as defined in

subsection (f) of this section). The term "hospital" also includes

a religious nonmedical health care institution (as defined in

subsection (ss)(1) of this section), but only with respect to items

and services ordinarily furnished by such institution to

inpatients, and payment may be made with respect to services

provided by or in such an institution only to such extent and under

such conditions, limitations, and requirements (in addition to or

in lieu of the conditions, limitations, and requirements otherwise

applicable) as may be provided in regulations consistent with

section 1395i-5 of this title. For provisions deeming certain

requirements of this subsection to be met in the case of accredited

institutions, see section 1395bb of this title. The term "hospital"

also includes a facility of fifty beds or less which is located in

an area determined by the Secretary to meet the definition relating

to a rural area described in subparagraph (A) of paragraph (5) of

this subsection and which meets the other requirements of this

subsection, except that -

(A) with respect to the requirements for nursing services

applicable after December 31, 1978, such requirements shall

provide for temporary waiver of the requirements, for such period

as the Secretary deems appropriate, where (i) the facility's

failure to fully comply with the requirements is attributable to

a temporary shortage of qualified nursing personnel in the area

in which the facility is located, (ii) a registered professional

nurse is present on the premises to render or supervise the

nursing service provided during at least the regular daytime

shift, and (iii) the Secretary determines that the employment of

such nursing personnel as are available to the facility during

such temporary period will not adversely affect the health and

safety of patients;

(B) with respect to the health and safety requirements

promulgated under paragraph (9), such requirements shall be

applied by the Secretary to a facility herein defined in such

manner as to assure that personnel requirements take into account

the availability of technical personnel and the educational

opportunities for technical personnel in the area in which such

facility is located, and the scope of services rendered by such

facility; and the Secretary, by regulations, shall provide for

the continued participation of such a facility where such

personnel requirements are not fully met, for such period as the

Secretary determines that (i) the facility is making good faith

efforts to fully comply with the personnel requirements, (ii) the

employment by the facility of such personnel as are available to

the facility will not adversely affect the health and safety of

patients, and (iii) if the Secretary has determined that because

of the facility's waiver under this subparagraph the facility

should limit its scope of services in order not to adversely

affect the health and safety of the facility's patients, the

facility is so limiting the scope of services it provides; and

(C) with respect to the fire and safety requirements

promulgated under paragraph (9), the Secretary (i) may waive, for

such period as he deems appropriate, specific provisions of such

requirements which if rigidly applied would result in

unreasonable hardship for such a facility and which, if not

applied, would not jeopardize the health and safety of patients,

and (ii) may accept a facility's compliance with all applicable

State codes relating to fire and safety in lieu of compliance

with the fire and safety requirements promulgated under paragraph

(9), if he determines that such State has in effect fire and

safety codes, imposed by State law, which adequately protect

patients.

The term "hospital" does not include, unless the context otherwise

requires, a critical access hospital (as defined in subsection

(mm)(1) of this section).

(f) Psychiatric hospital

The term "psychiatric hospital" means an institution which -

(1) is primarily engaged in providing, by or under the

supervision of a physician, psychiatric services for the

diagnosis and treatment of mentally ill persons;

(2) satisfies the requirements of paragraphs (3) through (9) of

subsection (e) of this section;

(3) maintains clinical records on all patients and maintains

such records as the Secretary finds to be necessary to determine

the degree and intensity of the treatment provided to individuals

entitled to hospital insurance benefits under part A of this

subchapter; and

(4) meets such staffing requirements as the Secretary finds

necessary for the institution to carry out an active program of

treatment for individuals who are furnished services in the

institution.

In the case of an institution which satisfies paragraphs (1) and

(2) of the preceding sentence and which contains a distinct part

which also satisfies paragraphs (3) and (4) of such sentence, such

distinct part shall be considered to be a "psychiatric hospital".

(g) Outpatient occupational therapy services

The term "outpatient occupational therapy services" has the

meaning given the term "outpatient physical therapy services" in

subsection (p) of this section, except that "occupational" shall be

substituted for "physical" each place it appears therein.

(h) Extended care services

The term "extended care services" means the following items and

services furnished to an inpatient of a skilled nursing facility

and (except as provided in paragraphs (3), (6), and (7)) by such

skilled nursing facility -

(1) nursing care provided by or under the supervision of a

registered professional nurse;

(2) bed and board in connection with the furnishing of such

nursing care;

(3) physical or occupational therapy or speech-language

pathology services furnished by the skilled nursing facility or

by others under arrangements with them made by the facility;

(4) medical social services;

(5) such drugs, biologicals, supplies, appliances, and

equipment, furnished for use in the skilled nursing facility, as

are ordinarily furnished by such facility for the care and

treatment of inpatients;

(6) medical services provided by an intern or

resident-in-training of a hospital with which the facility has in

effect a transfer agreement (meeting the requirements of

subsection (l) of this section), under a teaching program of such

hospital approved as provided in the last sentence of subsection

(b) of this section, and other diagnostic or therapeutic services

provided by a hospital with which the facility has such an

agreement in effect; and

(7) such other services necessary to the health of the patients

as are generally provided by skilled nursing facilities, or by

others under arrangements with them made by the facility;

excluding, however, any item or service if it would not be included

under subsection (b) of this section if furnished to an inpatient

of a hospital.

(i) Post-hospital extended care services

The term "post-hospital extended care services" means extended

care services furnished an individual after transfer from a

hospital in which he was an inpatient for not less than 3

consecutive days before his discharge from the hospital in

connection with such transfer. For purposes of the preceding

sentence, items and services shall be deemed to have been furnished

to an individual after transfer from a hospital, and he shall be

deemed to have been an inpatient in the hospital immediately before

transfer therefrom, if he is admitted to the skilled nursing

facility (A) within 30 days after discharge from such hospital, or

(B) 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 30 days after discharge from a

hospital; and an individual shall be deemed not to have been

discharged from a skilled nursing facility if, within 30 days after

discharge therefrom, he is admitted to such facility or any other

skilled nursing facility.

(j) Skilled nursing facility

The term "skilled nursing facility" has the meaning given such

term in section 1395i-3(a) of this title.

(k) Utilization review

A utilization review plan of a hospital or skilled nursing

facility shall be considered sufficient if it is applicable to

services furnished by the institution to individuals entitled to

insurance benefits under this subchapter and if it provides -

(1) for the review, on a sample or other basis, of admissions

to the institution, the duration of stays therein, and the

professional services (including drugs and biologicals)

furnished, (A) with respect to the medical necessity of the

services, and (B) for the purpose of promoting the most efficient

use of available health facilities and services;

(2) for such review to be made by either (A) a staff committee

of the institution composed of two or more physicians (of which

at least two must be physicians described in subsection (r)(1) of

this section), with or without participation of other

professional personnel, or (B) a group outside the institution

which is similarly composed and (i) which is established by the

local medical society and some or all of the hospitals and

skilled nursing facilities in the locality, or (ii) if (and for

as long as) there has not been established such a group which

serves such institution, which is established in such other

manner as may be approved by the Secretary;

(3) for such review, in each case of inpatient hospital

services or extended care services furnished to such an

individual during a continuous period of extended duration, as of

such days of such period (which may differ for different classes

of cases) as may be specified in regulations, with such review to

be made as promptly as possible, after each day so specified, and

in no event later than one week following such day; and

(4) for prompt notification to the institution, the individual,

and his attending physician of any finding (made after

opportunity for consultation to such attending physician) by the

physician members of such committee or group that any further

stay in the institution is not medically necessary.

The review committee must be composed as provided in clause (B) of

paragraph (2) rather than as provided in clause (A) of such

paragraph in the case of any hospital or skilled nursing facility

where, because of the small size of the institution, or (in the

case of a skilled nursing facility) because of lack of an organized

medical staff, or for such other reason or reasons as may be

included in regulations, it is impracticable for the institution to

have a properly functioning staff committee for the purposes of

this subsection. If the Secretary determines that the utilization

review procedures established pursuant to subchapter XIX of this

chapter 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 subchapter that the

procedures established pursuant to subchapter XIX of this chapter

be utilized instead of the procedures required by this section.

(l) Agreements for transfer between skilled nursing facilities and

hospitals

A hospital and a skilled nursing facility shall be considered to

have a transfer agreement in effect if, by reason of a written

agreement between them or (in case the two institutions are under

common control) by reason of a written undertaking by the person or

body which controls them, there is reasonable assurance that -

(1) transfer of patients will be effected between the hospital

and the skilled nursing facility whenever such transfer is

medically appropriate as determined by the attending physician;

and

(2) there will be interchange of medical and other information

necessary or useful in the care and treatment of individuals

transferred between the institutions, or in determining whether

such individuals can be adequately cared for otherwise than in

either of such institutions.

Any skilled nursing facility which does not have such an agreement

in effect, but which is found by a State agency (of the State in

which such facility is situated) with which an agreement under

section 1395aa of this title is in effect (or, in the case of a

State in which no such agency has an agreement under section 1395aa

of this title, by the Secretary) to have attempted in good faith to

enter into such an agreement with a hospital sufficiently close to

the facility to make feasible the transfer between them of patients

and the information referred to in paragraph (2), shall be

considered to have such an agreement in effect if and for so long

as such agency (or the Secretary, as the case may be) finds that to

do so is in the public interest and essential to assuring extended

care services for persons in the community who are eligible for

payments with respect to such services under this subchapter.

(m) Home health services

The term "home health services" means the following items and

services furnished to an individual, who is under the care of a

physician, by a home health agency or by others under arrangements

with them made by such agency, under a plan (for furnishing such

items and services to such individual) established and periodically

reviewed by a physician, which items and services are, except as

provided in paragraph (7), provided on a visiting basis in a place

of residence used as such individual's home -

(1) part-time or intermittent nursing care provided by or under

the supervision of a registered professional nurse;

(2) physical or occupational therapy or speech-language

pathology services;

(3) medical social services under the direction of a physician;

(4) to the extent permitted in regulations, part-time or

intermittent services of a home health aide who has successfully

completed a training program approved by the Secretary;

(5) medical supplies (including catheters, catheter supplies,

ostomy bags, and supplies related to ostomy care, and a covered

osteoporosis drug (as defined in subsection (kk) of this

section), but excluding other drugs and biologicals) and durable

medical equipment while under such a plan;

(6) in the case of a home health agency which is affiliated or

under common control with a hospital, medical services provided

by an intern or resident-in-training of such hospital, under a

teaching program of such hospital approved as provided in the

last sentence of subsection (b) of this section; and

(7) any of the foregoing items and services which are provided

on an outpatient basis, under arrangements made by the home

health agency, at a hospital or skilled nursing facility, or at a

rehabilitation center which meets such standards as may be

prescribed in regulations, and -

(A) the furnishing of which involves the use of equipment of

such a nature that the items and services cannot readily be

made available to the individual in such place of residence, or

(B) which are furnished at such facility while he is there to

receive any such item or service described in clause (A),

but not including transportation of the individual in connection

with any such item or service;

excluding, however, any item or service if it would not be included

under subsection (b) of this section if furnished to an inpatient

of a hospital. For purposes of paragraphs (1) and (4), the term

"part-time or intermittent services" means skilled nursing and home

health aide services furnished any number of days per week as long

as they are furnished (combined) less than 8 hours each day and 28

or fewer hours each week (or, subject to review on a case-by-case

basis as to the need for care, less than 8 hours each day and 35 or

fewer hours per week). For purposes of sections 1395f(a)(2)(C) and

1395n(a)(2)(A) of this title, "intermittent" means skilled nursing

care that is either provided or needed on fewer than 7 days each

week, or less than 8 hours of each day for periods of 21 days or

less (with extensions in exceptional circumstances when the need

for additional care is finite and predictable).

(n) Durable medical equipment

The term "durable medical equipment" includes iron lungs, oxygen

tents, hospital beds, and wheelchairs (which may include a

power-operated vehicle that may be appropriately used as a

wheelchair, but only where the use of such a vehicle is determined

to be necessary on the basis of the individual's medical and

physical condition and the vehicle meets such safety requirements

as the Secretary may prescribe) used in the patient's home

(including an institution used as his home other than an

institution that meets the requirements of subsection (e)(1) of

this section or section 1395i-3(a)(1) of this title), whether

furnished on a rental basis or purchased, and includes

blood-testing strips and blood glucose monitors for individuals

with diabetes without regard to whether the individual has Type I

or Type II diabetes or to the individual's use of insulin (as

determined under standards established by the Secretary in

consultation with the appropriate organizations); except that such

term does not include such equipment furnished by a supplier who

has used, for the demonstration and use of specific equipment, an

individual who has not met such minimum training standards as the

Secretary may establish with respect to the demonstration and use

of such specific equipment. With respect to a seat-lift chair, such

term includes only the seat-lift mechanism and does not include the

chair.

(o) Home health agency

The term "home health agency" means a public agency or private

organization, or a subdivision of such an agency or organization,

which -

(1) is primarily engaged in providing skilled nursing services

and other therapeutic services;

(2) has policies, established by a group of professional

personnel (associated with the agency or organization), including

one or more physicians and one or more registered professional

nurses, to govern the services (referred to in paragraph (1))

which it provides, and provides for supervision of such services

by a physician or registered professional nurse;

(3) maintains clinical records on all patients;

(4) in the case of an agency or organization in any State in

which State or applicable local law provides for the licensing of

agencies or organizations of this nature, (A) is licensed

pursuant to such law, or (B) is approved, by the agency of such

State or locality responsible for licensing agencies or

organizations of this nature, as meeting the standards

established for such licensing;

(5) has in effect an overall plan and budget that meets the

requirements of subsection (z) of this section;

(6) meets the conditions of participation specified in section

1395bbb(a) of this title and such other conditions of

participation as the Secretary may find necessary in the interest

of the health and safety of individuals who are furnished

services by such agency or organization;

(7) provides the Secretary with a surety bond -

(A) effective for a period of 4 years (as specified by the

Secretary) or in the case of a change in the ownership or

control of the agency (as determined by the Secretary) during

or after such 4-year period, an additional period of time that

the Secretary determines appropriate, such additional period

not to exceed 4 years from the date of such change in ownership

or control;

(B) in a form specified by the Secretary; and

(C) for a year in the period described in subparagraph (A) in

an amount that is equal to the lesser of $50,000 or 10 percent

of the aggregate amount of payments to the agency under this

subchapter and subchapter XIX of this chapter for that year, as

estimated by the Secretary; and

(8) meets such additional requirements (including conditions

relating to bonding or establishing of escrow accounts as the

Secretary finds necessary for the financial security of the

program) as the Secretary finds necessary for the effective and

efficient operation of the program;

except that for purposes of part A of this subchapter such term

shall not include any agency or organization which is primarily for

the care and treatment of mental diseases. The Secretary may waive

the requirement of a surety bond under paragraph (7) in the case of

an agency or organization that provides a comparable surety bond

under State law.

(p) Outpatient physical therapy services

The term "outpatient physical therapy services" means physical

therapy services furnished by a provider of services, a clinic,

rehabilitation agency, or a public health agency, or by others

under an arrangement with, and under the supervision of, such

provider, clinic, rehabilitation agency, or public health agency to

an individual as an outpatient -

(1) who is under the care of a physician (as defined in

paragraph (1), (3), or (4) of subsection (r) of this section),

and

(2) with respect to whom a plan prescribing the type, amount,

and duration of physical therapy services that are to be

furnished such individual has been established by a physician (as

so defined) or by a qualified physical therapist and is

periodically reviewed by a physician (as so defined);

excluding, however -

(3) any item or service if it would not be included under

subsection (b) of this section if furnished to an inpatient of a

hospital; and

(4) any such service -

(A) if furnished by a clinic or rehabilitation agency, or by

others under arrangements with such clinic or agency, unless

such clinic or rehabilitation agency -

(i) provides an adequate program of physical therapy

services for outpatients and has the facilities and personnel

required for such program or required for the supervision of

such a program, in accordance with such requirements as the

Secretary may specify,

(ii) has policies, established by a group of professional

personnel, including one or more physicians (associated with

the clinic or rehabilitation agency) and one or more

qualified physical therapists, to govern the services

(referred to in clause (i)) it provides,

(iii) maintains clinical records on all patients,

(iv) if such clinic or agency is situated in a State in

which State or applicable local law provides for the

licensing of institutions of this nature, (I) is licensed

pursuant to such law, or (II) is approved by the agency of

such State or locality responsible for licensing institutions

of this nature, as meeting the standards established for such

licensing; and

(v) meets such other conditions relating to the health and

safety of individuals who are furnished services by such

clinic or agency on an outpatient basis, as the Secretary may

find necessary, and provides the Secretary on a continuing

basis with a surety bond in a form specified by the Secretary

and in an amount that is not less than $50,000, or

(B) if furnished by a public health agency, unless such

agency meets such other conditions relating to health and

safety of individuals who are furnished services by such agency

on an outpatient basis, as the Secretary may find necessary.

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, rehabilitation

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. 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

individual as an inpatient of a hospital or extended care facility.

The term "outpatient physical therapy services" also includes

speech-language pathology services furnished by a provider of

services, a clinic, rehabilitation agency, or by a public health

agency, or by others under an arrangement with, and under the

supervision of, such provider, clinic, rehabilitation agency, or

public health agency to an individual as an outpatient, subject to

the conditions prescribed in this subsection. Nothing in this

subsection shall be construed as requiring, with respect to

outpatients who are not entitled to benefits under this subchapter,

a physical therapist to provide outpatient physical therapy

services only to outpatients who are under the care of a physician

or pursuant to a plan of care established by a physician. The

Secretary may waive the requirement of a surety bond under

paragraph (4)(A)(v) in the case of a clinic or agency that provides

a comparable surety bond under State law.

(q) Physicians' services

The term "physicians' services" means professional services

performed by physicians, including surgery, consultation, and home,

office, and institutional calls (but not including services

described in subsection (b)(6) of this section).

(r) Physician

The term "physician", when used in connection with the

performance of any function or action, means (1) a doctor of

medicine or osteopathy legally authorized to practice medicine and

surgery by the State in which he performs such function or action

(including a physician within the meaning of section 1301(a)(7) of

this title), (2) a doctor of dental surgery or of dental medicine

who is legally authorized to practice dentistry by the State in

which he performs such function and who is acting within the scope

of his license when he performs such functions, (3) a doctor of

podiatric medicine for the purposes of subsections (k), (m),

(p)(1), and (s) of this section and sections 1395f(a),

1395k(a)(2)(F)(ii), and 1395n of this title but only with respect

to functions which he is legally authorized to perform as such by

the State in which he performs them, (4) a doctor of optometry, but

only for purposes of subsection (p)(1) of this section and with

respect to the provision of items or services described in

subsection (s) of this section which he is legally authorized to

perform as a doctor of optometry by the State in which he performs

them, 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

jurisdiction in which he performs such services), and who meets

uniform minimum standards promulgated by the Secretary, but only

for the purpose of subsections (s)(1) and (s)(2)(A) of this section

and only with respect to treatment by means of manual manipulation

of the spine (to correct a subluxation) which he is legally

authorized to perform by the State or jurisdiction in which such

treatment is provided. For the purposes of section 1395y(a)(4) of

this title 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 1395y(a)(4) of this title)

are furnished.

(s) Medical and other health services

The term "medical and other health services" means any of the

following items or services:

(1) physicians' services;

(2)(A) services and supplies (including drugs and biologicals

which are not usually self-administered by the patient) furnished

as an incident to a physician's professional service, of kinds

which are commonly furnished in physicians' offices and are

commonly either rendered without charge or included in the

physicians' bills;

(B) hospital services (including drugs and biologicals which

are not usually self-administered by the patient) incident to

physicians' services rendered to outpatients and partial

hospitalization services incident to such services;

(C) diagnostic services which are -

(i) furnished to an individual as an outpatient by a hospital

or by others under arrangements with them made by a hospital,

and

(ii) ordinarily furnished by such hospital (or by others

under such arrangements) to its outpatients for the purpose of

diagnostic study;

(D) outpatient physical therapy services and outpatient

occupational therapy services;

(E) rural health clinic services and Federally qualified health

center services;

(F) home dialysis supplies and equipment, self-care home

dialysis support services, and institutional dialysis services

and supplies;

(G) antigens (subject to quantity limitations prescribed in

regulations by the Secretary) prepared by a physician, as defined

in subsection (r)(1) of this section, for a particular patient,

including antigens so prepared which are forwarded to another

qualified person (including a rural health clinic) for

administration to such patient, from time to time, by or under

the supervision of another such physician;

(H)(i) services furnished pursuant to a contract under section

1395mm of this title to a member of an eligible organization by a

physician assistant or by a nurse practitioner (as defined in

subsection (aa)(5) of this section) and such services and

supplies furnished as an incident to his service to such a member

as would otherwise be covered under this part if furnished by a

physician or as an incident to a physician's service; and

(ii) services furnished pursuant to a risk-sharing contract

under section 1395mm(g) of this title to a member of an eligible

organization by a clinical psychologist (as defined by the

Secretary) or by a clinical social worker (as defined in

subsection (hh)(2) of this section), and such services and

supplies furnished as an incident to such clinical psychologist's

services or clinical social worker's services to such a member as

would otherwise be covered under this part if furnished by a

physician or as an incident to a physician's service;

(I) blood clotting factors, for hemophilia patients competent

to use such factors to control bleeding without medical or other

supervision, and items related to the administration of such

factors, subject to utilization controls deemed necessary by the

Secretary for the efficient use of such factors;

(J) prescription drugs used in immunosuppressive therapy

furnished, to an individual who receives an organ transplant for

which payment is made under this subchapter;

(K)(i) services which would be physicians' services if

furnished by a physician (as defined in subsection (r)(1) of this

section) and which are performed by a physician assistant (as

defined in subsection (aa)(5) of this section) under the

supervision of a physician (as so defined) and which the

physician assistant is legally authorized to perform by the State

in which the services are performed, and such services and

supplies furnished as incident to such services as would be

covered under subparagraph (A) if furnished incident to a

physician's professional service; and (!1) but only if no

facility or other provider charges or is paid any amounts with

respect to the furnishing of such services,(!2)

(ii) services which would be physicians' services if furnished

by a physician (as defined in subsection (r)(1) of this section)

and which are performed by a nurse practitioner or clinical nurse

specialist (as defined in subsection (aa)(5) of this section)

working in collaboration (as defined in subsection (aa)(6) of

this section) with a physician (as defined in subsection (r)(1)

of this section) which the nurse practitioner or clinical nurse

specialist is legally authorized to perform by the State in which

the services are performed, and such services and supplies

furnished as an incident to such services as would be covered

under subparagraph (A) if furnished incident to a physician's

professional service, but only if no facility or other provider

charges or is paid any amounts with respect to the furnishing of

such services;

(L) certified nurse-midwife services;

(M) qualified psychologist services;

(N) clinical social worker services (as defined in subsection

(hh)(2) of this section);

(O) erythropoietin for dialysis patients competent to use such

drug without medical or other supervision with respect to the

administration of such drug, subject to methods and standards

established by the Secretary by regulation for the safe and

effective use of such drug, and items related to the

administration of such drug;

(P) prostate cancer screening tests (as defined in subsection

(oo) of this section);

(Q) an oral drug (which is approved by the Federal Food and

Drug Administration) prescribed for use as an anticancer

chemotherapeutic agent for a given indication, and containing an

active ingredient (or ingredients), which is the same indication

and active ingredient (or ingredients) as a drug which the

carrier determines would be covered pursuant to subparagraph (A)

or (B) if the drug could not be self-administered;

(R) colorectal cancer screening tests (as defined in subsection

(pp) of this section); and (!1)

(S) diabetes outpatient self-management training services (as

defined in subsection (qq) of this section);

(T) an oral drug (which is approved by the Federal Food and

Drug Administration) prescribed for use as an acute anti-emetic

used as part of an anticancer chemotherapeutic regimen if the

drug is administered by a physician (or as prescribed by a

physician) -

(i) for use immediately before, at, or within 48 hours after

the time of the administration of the anticancer

chemotherapeutic agent; and

(ii) as a full replacement for the anti-emetic therapy which

would otherwise be administered intravenously;

(U) screening for glaucoma (as defined in subsection (uu) of

this section) for individuals determined to be at high risk for

glaucoma, individuals with a family history of glaucoma and

individuals with diabetes; and

(V) medical nutrition therapy services (as defined in

subsection (vv)(1) of this section) in the case of a beneficiary

with diabetes or a renal disease who -

(i) has not received diabetes outpatient self-management

training services within a time period determined by the

Secretary;

(ii) is not receiving maintenance dialysis for which payment

is made under section 1395rr of this title; and

(iii) meets such other criteria determined by the Secretary

after consideration of protocols established by dietitian or

nutrition professional organizations;

(3) diagnostic X-ray tests (including tests under the

supervision of a physician, furnished in a place of residence

used as the patient's home, if the performance of such tests

meets such conditions relating to health and safety as the

Secretary may find necessary and including diagnostic mammography

if conducted by a facility that has a certificate (or provisional

certificate) issued under section 354 of the Public Health

Service Act [42 U.S.C. 263b]), diagnostic laboratory tests, and

other diagnostic tests;

(4) X-ray, radium, and radioactive isotope therapy, including

materials and services of technicians;

(5) surgical dressings, and splints, casts, and other devices

used for reduction of fractures and dislocations;

(6) durable medical equipment;

(7) ambulance service where the use of other methods of

transportation is contraindicated by the individual's condition,

but only to the extent provided in regulations;

(8) prosthetic devices (other than dental) which replace all or

part of an internal body organ (including colostomy bags and

supplies directly related to colostomy care), including

replacement of such devices, and including one pair of

conventional eyeglasses or contact lenses furnished subsequent to

each cataract surgery with insertion of an intraocular lens;

(9) leg, arm, back, and neck braces, and artificial legs, arms,

and eyes, including replacements if required because of a change

in the patient's physical condition;

(10)(A) pneumococcal vaccine and its administration and,

subject to section 4071(b) of the Omnibus Budget Reconciliation

Act of 1987, influenza vaccine and its administration; and

(B) hepatitis B vaccine and its administration, furnished to an

individual who is at high or intermediate risk of contracting

hepatitis B (as determined by the Secretary under regulations);

(11) services of a certified registered nurse anesthetist (as

defined in subsection (bb) of this section);

(12) subject to section 4072(e) of the Omnibus Budget

Reconciliation Act of 1987, extra-depth shoes with inserts or

custom molded shoes with inserts for an individual with diabetes,

if -

(A) the physician who is managing the individual's diabetic

condition (i) documents that the individual has peripheral

neuropathy with evidence of callus formation, a history of

pre-ulcerative calluses, a history of previous ulceration, foot

deformity, or previous amputation, or poor circulation, and

(ii) certifies that the individual needs such shoes under a

comprehensive plan of care related to the individual's diabetic

condition;

(B) the particular type of shoes are prescribed by a

podiatrist or other qualified physician (as established by the

Secretary); and

(C) the shoes are fitted and furnished by a podiatrist or

other qualified individual (such as a pedorthist or orthotist,

as established by the Secretary) who is not the physician

described in subparagraph (A) (unless the Secretary finds that

the physician is the only such qualified individual in the

area);

(13) screening mammography (as defined in subsection (jj) of

this section);

(14) screening pap smear and screening pelvic exam; and

(15) bone mass measurement (as defined in subsection (rr) of

this section).

No diagnostic tests performed in any laboratory, including a

laboratory that is part of a rural health clinic, or a hospital

(which, for purposes of this sentence, means an institution

considered a hospital for purposes of section 1395f(d) of this

title) shall be included within paragraph (3) unless such

laboratory -

(16) if situated in any State in which State or applicable

local law provides for licensing of establishments of this

nature, (A) is licensed pursuant to such law, or (B) is approved,

by the agency of such State or locality responsible for licensing

establishments of this nature, as meeting the standards

established for such licensing; and

(17)(A) meets the certification requirements under section 353

of the Public Health Service Act [42 U.S.C. 263a]; and

(B) meets such other conditions relating to the health and

safety of individuals with respect to whom such tests are

performed as the Secretary may find necessary.

There shall be excluded from the diagnostic services specified in

paragraph (2)(C) any item or service (except services referred to

in paragraph (1)) which would not be included under subsection (b)

of this section if it were furnished to an inpatient of a hospital.

None of the items and services referred to in the preceding

paragraphs (other than paragraphs (1) and (2)(A)) of this

subsection which are furnished to a patient of an institution which

meets the definition of a hospital for purposes of section 1395f(d)

of this title shall be included unless such other conditions are

met as the Secretary may find necessary relating to health and

safety of individuals with respect to whom such items and services

are furnished.

(t) Drugs and biologicals

(1) The term "drugs" and the term "biologicals", except for

purposes of subsection (m)(5) of this section and paragraph (2),

include only such drugs (including contrast agents) and

biologicals, respectively, as are included (or approved for

inclusion) in the United States Pharmacopoeia, the National

Formulary, or the United States Homeopathic Pharmacopoeia, or in

New Drugs or Accepted Dental Remedies (except for any drugs and

biologicals unfavorably evaluated therein), or as are approved by

the pharmacy and drug therapeutics committee (or equivalent

committee) of the medical staff of the hospital furnishing such

drugs and biologicals for use in such hospital.

(2)(A) For purposes of paragraph (1), the term "drugs" also

includes any drugs or biologicals used in an anticancer

chemotherapeutic regimen for a medically accepted indication (as

described in subparagraph (B)).

(B) In subparagraph (A), the term "medically accepted

indication", with respect to the use of a drug, includes any use

which has been approved by the Food and Drug Administration for the

drug, and includes another use of the drug if -

(i) the drug has been approved by the Food and Drug

Administration; and

(ii)(I) such use is supported by one or more citations which

are included (or approved for inclusion) in one or more of the

following compendia: the American Hospital Formulary Service-Drug

Information, the American Medical Association Drug Evaluations,

the United States Pharmacopoeia-Drug Information, and other

authoritative compendia as identified by the Secretary, unless

the Secretary has determined that the use is not medically

appropriate or the use is identified as not indicated in one or

more such compendia, or

(II) the carrier involved determines, based upon guidance

provided by the Secretary to carriers for determining accepted

uses of drugs, that such use is medically accepted based on

supportive clinical evidence in peer reviewed medical literature

appearing in publications which have been identified for purposes

of this subclause by the Secretary.

The Secretary may revise the list of compendia in clause (ii)(I) as

is appropriate for identifying medically accepted indications for

drugs.

(u) Provider of services

The term "provider of services" means a hospital, critical access

hospital, skilled nursing facility, comprehensive outpatient

rehabilitation facility, home health agency, hospice program, or,

for purposes of section 1395f(g) and section 1395n(e) of this

title, a fund.

(v) Reasonable costs

(1)(A) The reasonable cost of any services shall be 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 determined in accordance with regulations

establishing the method or methods to be used, and the items to be

included, in determining such costs for various types or classes of

institutions, agencies, and services; except that in any case to

which paragraph (2) or (3) applies, the amount of the payment

determined under such paragraph with respect to the services

involved shall be considered the reasonable cost of such services.

In prescribing the regulations referred to in the preceding

sentence, the Secretary shall consider, among other things, the

principles generally applied by national organizations or

established prepayment organizations (which have developed such

principles) in computing the amount of payment, to be made by

persons other than the recipients of services, to providers of

services on account of services furnished to such recipients by

such providers. Such regulations may provide for determination of

the costs of services on a per diem, per unit, per capita, or other

basis, may provide for using different methods in different

circumstances, may provide for the use of estimates of costs of

particular items or services, 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

individuals covered by the insurance programs established under

this subchapter, and may provide for the use of charges or a

percentage of charges where this method reasonably reflects the

costs. Such regulations shall (i) take into account both direct and

indirect costs of providers of services (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 subchapter) in order that, under the methods of

determining costs, the necessary costs of efficiently delivering

covered services to individuals covered by the insurance programs

established by this subchapter will not be borne by individuals not

so covered, and the costs with respect to individuals not so

covered will not be borne by such insurance programs, and (ii)

provide for the making of suitable retroactive corrective

adjustments where, for a provider of services for any fiscal

period, the aggregate reimbursement produced by the methods of

determining costs proves to be either inadequate or excessive.

(B) In the case of extended care services, the regulations under

subparagraph (A) shall not include provision for specific

recognition of a return on equity capital.

(C) Where a hospital has an arrangement with a medical school

under which the faculty of such school provides services 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 furnishing services -

(i) for which payment may be made under part A of this

subchapter, but only if -

(I) payment for such services as furnished under such

arrangement would be made under part A of this subchapter 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 medical school, or

(ii) for which payment may be made under part B of this

subchapter, but only if such hospital pays to the medical school

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 conjunction with

the teaching programs of such hospital) by reason of paragraph (7)

of subsection (b) of this section or for which entitlement exists

by reason of clause (II) of section 1395k(a)(2)(B)(i) of this

title, 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 development of such average salary).

(E) Such regulations may, in the case of skilled nursing

facilities in any State, provide for the use 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 under subchapter XIX of this chapter (and

such rates may be increased by the Secretary on a class or size of

institution or on a geographical basis by a percentage factor not

in excess of 10 percent to take into account determinable items or

services or other requirements under this subchapter not otherwise

included in the computation of such State rates), if the Secretary

finds that such rates are reasonably related to (but not

necessarily limited to) analyses undertaken by such State of costs

of care in comparable facilities in such State. Notwithstanding the

previous sentence, such regulations with respect to skilled nursing

facilities shall take into account (in a manner consistent with

subparagraph (A) and based on patient-days of services furnished)

the costs (including the costs of services required to attain or

maintain the highest practicable physical, mental, and psychosocial

well-being of each resident eligible for benefits under this

subchapter) of such facilities complying with the requirements of

subsections (b), (c), and (d) of section 1395i-3 of this title

(including the costs of conducting nurse aide training and

competency evaluation programs and competency evaluation programs).

(F) Such regulations shall require each provider of services

(other than a fund) to make reports to the Secretary of information

described in section 1320a(a) of this title in accordance with the

uniform reporting system (established under such section) for that

type of provider.

(G)(i) In any case in which a hospital provides inpatient

services to an individual that would constitute post-hospital

extended care services if provided by a skilled nursing facility

and a quality control and peer review organization (or, in the

absence of such a qualified organization, the Secretary or such

agent as the Secretary may designate) determines that inpatient

hospital services for the individual are not medically necessary

but post-hospital extended care services for the individual are

medically necessary and such extended care services are not

otherwise available to the individual (as determined in accordance

with criteria established by the Secretary) at the time of such

determination, payment for such services provided to the individual

shall continue to be made under this subchapter at the payment rate

described in clause (ii) during the period in which -

(I) such post-hospital extended care services for the

individual are medically necessary and not otherwise available to

the individual (as so determined),

(II) inpatient hospital services for the individual are not

medically necessary, and

(III) the individual is entitled to have payment made for

post-hospital extended care services under this subchapter,

except that if the Secretary determines that there is not an excess

of hospital beds in such hospital and (subject to clause (iv))

there is not an excess of hospital beds in the area of such

hospital, such payment shall be made (during such period) on the

basis of the amount otherwise payable under part A with respect to

inpatient hospital services.

(ii)(I) Except as provided in subclause (II), the payment rate

referred to in clause (i) is a rate equal to the estimated adjusted

State-wide average rate per patient-day paid for services provided

in skilled nursing facilities under the State plan approved under

subchapter XIX of this chapter for the State in which such hospital

is located, or, if the State in which the hospital is located does

not have a State plan approved under subchapter XIX of this

chapter, the estimated adjusted State-wide average allowable costs

per patient-day for extended care services under this subchapter in

that State.

(II) If a hospital has a unit which is a skilled nursing

facility, the payment rate referred to in clause (i) for the

hospital is a rate equal to the lesser of the rate described in

subclause (I) or the allowable costs in effect under this

subchapter for extended care services provided to patients of such

unit.

(iii) Any day on which an individual receives inpatient services

for which payment is made under this subparagraph shall, for

purposes of this chapter (other than this subparagraph), be deemed

to be a day on which the individual received inpatient hospital

services.

(iv) In determining under clause (i), in the case of a public

hospital, whether or not there is an excess of hospital beds in the

area of such hospital, such determination shall be made on the

basis of only the public hospitals (including the hospital) which

are in the area of the hospital and which are under common

ownership with that hospital.

(H) In determining such reasonable cost with respect to home

health agencies, the Secretary may not include -

(i) any costs incurred in connection with bonding or

establishing an escrow account by any such agency as a result of

the surety bond requirement described in subsection (o)(7) of

this section and the financial security requirement described in

subsection (o)(8) of this section;

(ii) in the case of home health agencies to which the surety

bond requirement described in subsection (o)(7) of this section

and the financial security requirement described in subsection

(o)(8) of this section apply, any costs attributed to interest

charged such an agency in connection with amounts borrowed by the

agency to repay overpayments made under this subchapter to the

agency, except that such costs may be included in reasonable cost

if the Secretary determines that the agency was acting in good

faith in borrowing the amounts;

(iii) in the case of contracts entered into by a home health

agency after December 5, 1980, for the purpose of having services

furnished for or on behalf of such agency, any cost incurred by

such agency pursuant to any such contract which is entered into

for a period exceeding five years; and

(iv) in the case of contracts entered into by a home health

agency before December 5, 1980, for the purpose of having

services furnished for or on behalf of such agency, any cost

incurred by such agency pursuant to any such contract, which

determines the amount payable by the home health agency on the

basis of a percentage of the agency's reimbursement or claim for

reimbursement for services furnished by the agency, to the extent

that such cost exceeds the reasonable value of the services

furnished on behalf of such agency.

(I) In determining such reasonable cost, the Secretary may not

include any costs incurred by a provider with respect to any

services furnished in connection with matters for which payment may

be made under this subchapter and furnished pursuant to a contract

between the provider and any of its subcontractors which is entered

into after December 5, 1980, and the value or cost of which is

$10,000 or more over a twelve-month period unless the contract

contains a clause to the effect that -

(i) until the expiration of four years after the furnishing of

such services pursuant to such contract, the subcontractor shall

make available, upon written request by the Secretary, or upon

request by the Comptroller General, or any of their duly

authorized representatives, the contract, and books, documents

and records of such subcontractor that are necessary to certify

the nature and extent of such costs, and

(ii) if the subcontractor carries out any of the duties of the

contract through a subcontract, with a value or cost of $10,000

or more over a twelve-month period, with a related organization,

such subcontract shall contain a clause to the effect that until

the expiration of four years after the furnishing of such

services pursuant to such subcontract, the related organization

shall make available, upon written request by the Secretary, or

upon request by the Comptroller General, or any of their duly

authorized representatives, the subcontract, and books, documents

and records of such organization that are necessary to verify the

nature and extent of such costs.

The Secretary shall prescribe in regulation (!3) criteria and

procedures which the Secretary shall use in obtaining access to

books, documents, and records under clauses required in contracts

and subcontracts under this subparagraph.

(J) Such regulations may not provide for any inpatient routine

salary cost differential as a reimbursable cost for hospitals and

skilled nursing facilities.

(K)(i) The Secretary shall issue regulations that provide, to the

extent feasible, for the establishment of limitations on the amount

of any costs or charges that shall be considered reasonable with

respect to services provided on an outpatient basis by hospitals

(other than bona fide emergency services as defined in clause (ii))

or clinics (other than rural health clinics), which are reimbursed

on a cost basis or on the basis of cost related charges, and by

physicians utilizing such outpatient facilities. Such limitations

shall be reasonably related to the charges in the same area for

similar services provided in physicians' offices. Such regulations

shall provide for exceptions to such limitations in cases where

similar services are not generally available in physicians' offices

in the area to individuals entitled to benefits under this

subchapter.

(ii) For purposes of clause (i), the term "bona fide emergency

services" means services provided in a hospital emergency room

after the sudden onset of a medical condition manifesting itself by

acute symptoms of sufficient severity (including severe pain) such

that the absence of immediate medical attention could reasonably be

expected to result in -

(I) placing the patient's health in serious jeopardy;

(II) serious impairment to bodily functions; or

(III) serious dysfunction of any bodily organ or part.

(L)(i) The Secretary, in determining the amount of the payments

that may be made under this subchapter with respect to services

furnished by home health agencies, may not recognize as reasonable

(in the efficient delivery of such services) costs for the

provision of such services by an agency to the extent these costs

exceed (on the aggregate for the agency) for cost reporting periods

beginning on or after -

(I) July 1, 1985, and before July 1, 1986, 120 percent of the

mean of the labor-related and nonlabor per visit costs for

freestanding home health agencies,

(II) July 1, 1986, and before July 1, 1987, 115 percent of such

mean,

(III) July 1, 1987, and before October 1, 1997, 112 percent of

such mean,

(IV) October 1, 1997, and before October 1, 1998, 105 percent

of the median of the labor-related and nonlabor per visit costs

for freestanding home health agencies, or

(V) October 1, 1998, 106 percent of such median.

(ii) Effective for cost reporting periods beginning on or after

July 1, 1986, such limitations shall be applied on an aggregate

basis for the agency, rather than on a discipline specific basis.

The Secretary may provide for such exemptions and exceptions to

such limitation as he deems appropriate.

(iii) Not later than July 1, 1991, and annually thereafter (but

not for cost reporting periods beginning on or after July 1, 1994,

and before July 1, 1996, or on or after July 1, 1997, and before

October 1, 1997), the Secretary shall establish limits under this

subparagraph for cost reporting periods beginning on or after such

date by utilizing the area wage index applicable under section

1395ww(d)(3)(E) of this title and determined using the survey of

the most recent available wages and wage-related costs of hospitals

located in the geographic area in which the home health service is

furnished (determined without regard to whether such hospitals have

been reclassified to a new geographic area pursuant to section

1395ww(d)(8)(B) of this title, a decision of the Medicare

Geographic Classification Review Board under section 1395ww(d)(10)

of this title, or a decision of the Secretary).

(iv) In establishing limits under this subparagraph for cost

reporting periods beginning after September 30, 1997, the Secretary

shall not take into account any changes in the home health market

basket, as determined by the Secretary, with respect to cost

reporting periods which began on or after July 1, 1994, and before

July 1, 1996.

(v) For services furnished by home health agencies for cost

reporting periods beginning on or after October 1, 1997, subject to

clause (viii)(I), the Secretary shall provide for an interim system

of limits. Payment shall not exceed the costs determined under the

preceding provisions of this subparagraph or, if lower, the product

of -

(I) an agency-specific per beneficiary annual limitation

calculated based 75 percent on 98 percent of the reasonable costs

(including nonroutine medical supplies) for the agency's 12-month

cost reporting period ending during fiscal year 1994, and based

25 percent on 98 percent of the standardized regional average of

such costs for the agency's census division, as applied to such

agency, for cost reporting periods ending during fiscal year

1994, such costs updated by the home health market basket index;

and

(II) the agency's unduplicated census count of patients

(entitled to benefits under this subchapter) for the cost

reporting period subject to the limitation.

(vi) For services furnished by home health agencies for cost

reporting periods beginning on or after October 1, 1997, the

following rules apply:

(I) For new providers and those providers without a 12-month

cost reporting period ending in fiscal year 1994 subject to

clauses (viii)(II) and (viii)(III), the per beneficiary

limitation shall be equal to the median of these limits (or the

Secretary's best estimates thereof) applied to other home health

agencies as determined by the Secretary. A home health agency

that has altered its corporate structure or name shall not be

considered a new provider for this purpose.

(II) For beneficiaries who use services furnished by more than

one home health agency, the per beneficiary limitations shall be

prorated among the agencies.

(vii)(I) Not later than January 1, 1998, the Secretary shall

establish per visit limits applicable for fiscal year 1998, and not

later than April 1, 1998, the Secretary shall establish per

beneficiary limits under clause (v)(I) for fiscal year 1998.

(II) Not later than August 1 of each year (beginning in 1998) the

Secretary shall establish the limits applicable under this

subparagraph for services furnished during the fiscal year

beginning October 1 of the year.

(viii)(I) In the case of a provider with a 12-month cost

reporting period ending in fiscal year 1994, if the limit imposed

under clause (v) (determined without regard to this subclause) for

a cost reporting period beginning during or after fiscal year 1999

is less than the median described in clause (vi)(I) (but determined

as if any reference in clause (v) to "98 percent" were a reference

to "100 percent"), the limit otherwise imposed under clause (v) for

such provider and period shall be increased by 1/3 of such

difference.

(II) Subject to subclause (IV), for new providers and those

providers without a 12-month cost reporting period ending in fiscal

year 1994, but for which the first cost reporting period begins

before fiscal year 1999, for cost reporting periods beginning

during or after fiscal year 1999, the per beneficiary limitation

described in clause (vi)(I) shall be equal to the median described

in such clause (determined as if any reference in clause (v) to "98

percent" were a reference to "100 percent").

(III) Subject to subclause (IV), in the case of a new provider

for which the first cost reporting period begins during or after

fiscal year 1999, the limitation applied under clause (vi)(I) (but

only with respect to such provider) shall be equal to 75 percent of

the median described in clause (vi)(I).

(IV) In the case of a new provider or a provider without a

12-month cost reporting period ending in fiscal year 1994,

subclause (II) shall apply, instead of subclause (III), to a home

health agency which filed an application for home health agency

provider status under this subchapter before September 15, 1998, or

which was approved as a branch of its parent agency before such

date and becomes a subunit of the parent agency or a separate

agency on or after such date.

(V) Each of the amounts specified in subclauses (I) through (III)

are such amounts as adjusted under clause (iii) to reflect

variations in wages among different areas.

(ix) Notwithstanding the per beneficiary limit under clause

(viii), if the limit imposed under clause (v) (determined without

regard to this clause) for a cost reporting period beginning during

or after fiscal year 2000 is less than the median described in

clause (vi)(I) (but determined as if any reference in clause (v) to

"98 percent" were a reference to "100 percent"), the limit

otherwise imposed under clause (v) for such provider and period

shall be increased by 2 percent.

(x) Notwithstanding any other provision of this subparagraph, in

updating any limit under this subparagraph by a home health market

basket index for cost reporting periods beginning during each of

fiscal years 2000, 2002, and 2003, the update otherwise provided

shall be reduced by 1.1 percentage points. With respect to cost

reporting periods beginning during fiscal year 2001, the update to

any limit under this subparagraph shall be the home health market

basket index.

(M) Such regulations shall provide that costs respecting care

provided by a provider of services, pursuant to an assurance under

title VI or XVI of the Public Health Service Act [42 U.S.C. 291 et

seq., 300q et seq.] that the provider will make available a

reasonable volume of services to persons unable to pay therefor,

shall not be allowable as reasonable costs.

(N) In determining such reasonable costs, costs incurred for

activities directly related to influencing employees respecting

unionization may not be included.

(O)(i) In establishing an appropriate allowance for depreciation

and for interest on capital indebtedness with respect to an asset

of a provider of services which has undergone a change of

ownership, such regulations shall provide, except as provided in

clause (iii), that the valuation of the asset after such change of

ownership shall be the historical cost of the asset, as recognized

under this subchapter, less depreciation allowed, to the owner of

record as of August 5, 1997 (or, in the case of an asset not in

existence as of August 5, 1997, the first owner of record of the

asset after August 5, 1997).

(ii) Such regulations shall not recognize, as reasonable in the

provision of health care services, costs (including legal fees,

accounting and administrative costs, travel costs, and the costs of

feasibility studies) attributable to the negotiation or settlement

of the sale or purchase of any capital asset (by acquisition or

merger) for which any payment has previously been made under this

subchapter.

(iii) In the case of the transfer of a hospital from ownership by

a State to ownership by a nonprofit corporation without monetary

consideration, the basis for capital allowances to the new owner

shall be the book value of the hospital to the State at the time of

the transfer.

(P) If such regulations provide for the payment for a return on

equity capital (other than with respect to costs of inpatient

hospital services), the rate of return to be recognized, for

determining the reasonable cost of services furnished in a cost

reporting period, shall be equal to the average of the rates of

interest, for each of the months any part of which is included in

the period, on obligations issued for purchase by the Federal

Hospital Insurance Trust Fund.

(Q) Except as otherwise explicitly authorized, the Secretary is

not authorized to limit the rate of increase on allowable costs of

approved medical educational activities.

(R) In determining such reasonable cost, costs incurred by a

provider of services representing a beneficiary in an unsuccessful

appeal of a determination described in section 1395ff(b) of this

title shall not be allowable as reasonable costs.

(S)(i) Such regulations shall not include provision for specific

recognition of any return on equity capital with respect to

hospital outpatient departments.

(ii)(I) Such regulations shall provide that, in determining the

amount of the payments that may be made under this subchapter with

respect to all the capital-related costs of outpatient hospital

services, the Secretary shall reduce the amounts of such payments

otherwise established under this subchapter by 15 percent for

payments attributable to portions of cost reporting periods

occurring during fiscal year 1990, by 15 percent for payments

attributable to portions of cost reporting periods occurring during

fiscal year 1991, and by 10 percent for payments attributable to

portions of cost reporting periods occurring during fiscal years

1992 through 1999 and until the first date that the prospective

payment system under section 1395l(t) of this title is implemented.

(II) The Secretary shall reduce the reasonable cost of outpatient

hospital services (other than the capital-related costs of such

services) otherwise determined pursuant to section

1395l(a)(2)(B)(i)(I) of this title by 5.8 percent for payments

attributable to portions of cost reporting periods occurring during

fiscal years 1991 through 1999 and until the first date that the

prospective payment system under section 1395l(t) of this title is

implemented.

(III) Subclauses (I) and (II) shall not apply to payments with

respect to the costs of hospital outpatient services provided by

any hospital that is a sole community hospital (as defined in

section 1395ww(d)(5)(D)(iii) of this title (!4) or a critical

access hospital (as defined in subsection (mm)(1) of this section).

(IV) In applying subclauses (I) and (II) to services for which

payment is made on the basis of a blend amount under section

1395l(i)(3)(A)(ii) or 1395l(n)(1)(A)(ii) of this title, the costs

reflected in the amounts described in sections 1395l(i)(3)(B)(i)(I)

and 1395l(n)(1)(B)(i)(I) of this title, respectively, shall be

reduced in accordance with such subclause.(!5)

(T) In determining such reasonable costs for hospitals, no

reduction in copayments under section 1395l(t)(5)(B) (!6) of this

title shall be treated as a bad debt and the amount of bad debts

otherwise treated as allowable costs which are attributable to the

deductibles and coinsurance amounts under this subchapter shall be

reduced -

(i) for cost reporting periods beginning during fiscal year

1998, by 25 percent of such amount otherwise allowable,

(ii) for cost reporting periods beginning during fiscal year

1999, by 40 percent of such amount otherwise allowable,

(iii) for cost reporting periods beginning during fiscal year

2000, by 45 percent of such amount otherwise allowable, and

(iv) for cost reporting periods beginning during a subsequent

fiscal year, by 30 percent of such amount otherwise allowable.

(U) In determining the reasonable cost of ambulance services (as

described in subsection (s)(7) of this section) provided during

fiscal year 1998, during fiscal year 1999, and during so much of

fiscal year 2000 as precedes January 1, 2000, the Secretary shall

not recognize the costs per trip in excess of costs recognized as

reasonable for ambulance services provided on a per trip basis

during the previous fiscal year (after application of this

subparagraph), increased by the percentage increase in the consumer

price index for all urban consumers (U.S. city average) as

estimated by the Secretary for the 12-month period ending with the

midpoint of the fiscal year involved reduced by 1.0 percentage

point. For ambulance services provided after June 30, 1998, the

Secretary may provide that claims for such services must include a

code (or codes) under a uniform coding system specified by the

Secretary that identifies the services furnished.

(2)(A) If the bed and board furnished as part of inpatient

hospital services (including inpatient tuberculosis hospital

services and inpatient psychiatric hospital services) or

post-hospital extended care services is in accommodations more

expensive than semi-private accommodations, the amount taken into

account for purposes of payment under this subchapter with respect

to such services may not exceed the amount that would be taken into

account with respect to such services if furnished in such

semi-private accommodations unless the more expensive

accommodations were required for medical reasons.

(B) Where a provider of services which has an agreement in effect

under this subchapter furnishes to an individual 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 part A or part B of

this subchapter, as the case may be, the Secretary shall take into

account for purposes of payment to such provider of services only

the items or services with respect to which such payment may be

made.

(3) If the bed and board furnished as part of inpatient hospital

services (including inpatient tuberculosis hospital services and

inpatient psychiatric hospital services) or post-hospital extended

care services is in accommodations other than, but not more

expensive than, semi-private accommodations and the use of such

other accommodations rather than semi-private accommodations was

neither at the request of the patient nor for a reason which the

Secretary determines is consistent with the purposes of this

subchapter, the amount of the payment with respect to such bed and

board under part A of this subchapter shall be the amount otherwise

payable under this subchapter for such bed and board furnished in

semi-private accommodations minus the difference between the charge

customarily made by the hospital or skilled nursing facility for

bed and board in semi-private accommodations and the charge

customarily made by it for bed and board in the accommodations

furnished.

(4) If a provider of services furnishes items or services to an

individual which are in excess of or more expensive than the items

or services determined to be necessary in the efficient delivery of

needed health services and charges are imposed for such more

expensive items or services under the authority granted in section

1395cc(a)(2)(B)(ii),(!7) of this title, 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.

(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 furnished under an arrangement with a provider of services or

other organization, specified in the first sentence of subsection

(p) of this section (including through the operation of subsection

(g) of this section) the amount included in any payment to such

provider or other organization under this subchapter 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 with such provider or

other organization (rather than under such arrangement) plus the

cost of such other expenses (including a reasonable allowance for

traveltime and other reasonable types of expense related to any

differences in acceptable methods of organization for the provision

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

sentence of subsection (p) of this section 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.

(6) For purposes of this subsection, the term, "semi-private

accommodations" means two-bed, three-bed, or four-bed

accommodations.

(7)(A) For limitation on Federal participation for capital

expenditures which are out of conformity with a comprehensive plan

of a State or areawide planning agency, see section 1320a-1 of this

title.

(B) For further limitations on reasonable cost and determination

of payment amounts for operating costs of inpatient hospital

services and waivers for certain States, see section 1395ww of this

title.

(C) For provisions restricting payment for provider-based

physicians' services and for payments under certain percentage

arrangements, see section 1395xx of this title.

(D) For further limitations on reasonable cost and determination

of payment amounts for routine service costs of skilled nursing

facilities, see subsections (a) through (c) of section 1395yy of

this title.

(8) Items unrelated to patient care. - Reasonable costs do not

include costs for the following -

(i) entertainment, including tickets to sporting and other

entertainment events;

(ii) gifts or donations;

(iii) personal use of motor vehicles;

(iv) costs for fines and penalties resulting from violations of

Federal, State, or local laws; and

(v) education expenses for spouses or other dependents of

providers of services, their employees or contractors.

(w) Arrangements for certain services; payments pursuant to

arrangements for utilization review activities

(1) The term "arrangements" is limited to arrangements under

which receipt of payment by the hospital, critical access hospital,

skilled nursing facility, home health agency, or hospice program

(whether in its own right or as agent), with respect to services

for which an individual is entitled to have payment made under this

subchapter, discharges the liability of such individual or any

other person to pay for the services.

(2) Utilization review activities conducted, in accordance with

the requirements of the program established under part B of

subchapter XI of this chapter with respect to services furnished by

a hospital or critical access hospital to patients insured under

part A of this subchapter or entitled to have payment made for such

services under part B of this subchapter or under a State plan

approved under subchapter XIX of this chapter, by a quality control

and peer review organization designated for the area in which such

hospital or critical access hospital is located shall be deemed to

have been conducted pursuant to arrangements between such hospital

or critical access hospital and such organization under which such

hospital or critical access hospital is obligated to pay to such

organization, as a condition of receiving payment for hospital or

critical access hospital services so furnished under this part or

under such a State plan, such amount as is reasonably incurred and

requested (as determined under regulations of the Secretary) by

such organization in conducting such review activities with respect

to services furnished by such hospital or critical access hospital

to such patients.

(x) State and United States

The terms "State" and "United States" have the meaning given to

them by subsections (h) and (i), respectively, of section 410 of

this title.

(y) Extended care in religious nonmedical health care institutions

(1) The term "skilled nursing facility" also includes a religious

nonmedical health care institution (as defined in subsection

(ss)(1) of this section), but only (except for purposes of

subsection (a)(2) of this section) with respect to items and

services ordinarily furnished by such an institution to inpatients,

and payment may be made with respect to services provided by or in

such an institution only to such extent and under such conditions,

limitations, and requirements (in addition to or in lieu of the

conditions, limitations, and requirements otherwise applicable) as

may be provided in regulations consistent with section 1395i-5 of

this title.

(2) Notwithstanding any other provision of this subchapter,

payment under part A of this subchapter may not be made for

services furnished an individual in a skilled nursing facility to

which paragraph (1) applies unless such individual elects, in

accordance with regulations, for a spell of illness to have such

services treated as post-hospital extended care services for

purposes of such part; and payment under part A of this subchapter

may not be made for post-hospital extended care services -

(A) furnished an individual during such spell of illness in a

skilled nursing facility to which paragraph (1) applies after -

(i) such services have been furnished to him in such a

facility for 30 days during such spell, or

(ii) such services have been furnished to him during such

spell in a skilled nursing facility to which such paragraph

does not apply; or

(B) furnished an individual during such spell of illness in a

skilled nursing facility to which paragraph (1) does not apply

after such services have been furnished to him during such spell

in a skilled nursing facility to which such paragraph applies.

(3) The amount payable under part A of this subchapter for

post-hospital extended care services furnished an individual during

any spell of illness in a skilled nursing facility to which

paragraph (1) applies shall be reduced by a coinsurance amount

equal to one-eighth of the inpatient hospital deductible for each

day before the 31st day on which he is furnished such services in

such a facility during such spell (and the reduction under this

paragraph shall be in lieu of any reduction under section

1395e(a)(3) of this title).

(4) For purposes of subsection (i) of this section, the

determination of whether services furnished by or in an institution

described in paragraph (1) constitute post-hospital extended care

services shall be made in accordance with and subject to such

conditions, limitations, and requirements as may be provided in

regulations.

(z) Institutional planning

An overall plan and budget of a hospital, skilled nursing

facility, comprehensive outpatient rehabilitation 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)(A) provides for a capital expenditures plan for at least a

3-year period (including the year to which the operating budget

described in paragraph (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

$600,000 (or such lesser amount as may be established by the

State under section 1320a-1(g)(1) of this title in which the

hospital is located) related to the acquisition of land, the

improvement of land, buildings, and equipment, and the

replacement, modernization, and expansion of the buildings and

equipment which would, under generally accepted accounting

principles, be considered capital items;

(B) provides that such plan is submitted to the agency

designated under section 1320a-1(b) of this title, or if no such

agency is designated, to the appropriate health planning agency

in the State (but this subparagraph shall not apply in the case

of a facility exempt from review under section 1320a-1 of this

title by reason of section 1320a-1(j) of this title);

(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

representatives of the governing body, the administrative staff,

and the medical staff (if any) of the institution or agency.

(aa) Rural health clinic services and Federally qualified health

center services

(1) The term "rural health clinic services" means -

(A) physicians' services and such services and supplies as are

covered under subsection (s)(2)(A) of this section if furnished

as an incident to a physician's professional service and items

and services described in subsection (s)(10) of this section,

(B) such services furnished by a physician assistant or a nurse

practitioner (as defined in paragraph (5)), by a clinical

psychologist (as defined by the Secretary) or by a clinical

social worker (as defined in subsection (hh)(1) of this

section),,(!8) and such services and supplies furnished as an

incident to his service as would otherwise be covered if

furnished by a physician or as an incident to a physician's

service, and

(C) in the case of a rural health clinic located in an area in

which there exists a shortage of home health agencies, part-time

or intermittent nursing care and related medical supplies (other

than drugs and biologicals) furnished by a registered

professional nurse or licensed practical nurse to a homebound

individual under a written plan of treatment (i) established and

periodically reviewed by a physician described in paragraph

(2)(B), or (ii) established by a nurse practitioner or physician

assistant and periodically reviewed and approved by a physician

described in paragraph (2)(B),

when furnished to an individual as an outpatient of a rural health

clinic.

(2) The term "rural health clinic" means a facility which -

(A) is primarily engaged in furnishing to outpatients services

described in subparagraphs (A) and (B) of paragraph (1);

(B) in the case of a facility which is not a physician-directed

clinic, has an arrangement (consistent with the provisions of

State and local law relative to the practice, performance, and

delivery of health services) with one or more physicians (as

defined in subsection (r)(1)) of this section under which

provision is made for the periodic review by such physicians of

covered services furnished by physician assistants and nurse

practitioners, the supervision and guidance by such physicians of

physician assistants and nurse practitioners, the preparation by

such physicians of such medical orders for care and treatment of

clinic patients as may be necessary, and the availability of such

physicians for such referral of and consultation for patients as

is necessary and for advice and assistance in the management of

medical emergencies; and, in the case of a physician-directed

clinic, has one or more of its staff physicians perform the

activities accomplished through such an arrangement;

(C) maintains clinical records on all patients;

(D) has arrangements with one or more hospitals, having

agreements in effect under section 1395cc of this title, for the

referral and admission of patients requiring inpatient services

or such diagnostic or other specialized services as are not

available at the clinic;

(E) has written policies, which are developed with the advice

of (and with provision for review of such policies from time to

time by) a group of professional personnel, including one or more

physicians and one or more physician assistants or nurse

practitioners, to govern those services described in paragraph

(1) which it furnishes;

(F) has a physician, physician assistant, or nurse practitioner

responsible for the execution of policies described in

subparagraph (E) and relating to the provision of the clinic's

services;

(G) directly provides routine diagnostic services, including

clinical laboratory services, as prescribed in regulations by the

Secretary, and has prompt access to additional diagnostic

services from facilities meeting requirements under this

subchapter;

(H) in compliance with State and Federal law, has available for

administering to patients of the clinic at least such drugs and

biologicals as are determined by the Secretary to be necessary

for the treatment of emergency cases (as defined in regulations)

and has appropriate procedures or arrangements for storing,

administering, and dispensing any drugs and biologicals;

(I) has a quality assessment and performance improvement

program, and appropriate procedures for review of utilization of

clinic services, as the Secretary may specify;

(J) has a nurse practitioner, a physician assistant, or a

certified nurse-midwife (as defined in subsection (gg) of this

section) available to furnish patient care services not less than

50 percent of the time the clinic operates; and

(K) meets such other requirements as the Secretary may find

necessary in the interest of the health and safety of the

individuals who are furnished services by the clinic.

For the purposes of this subchapter, such term includes only a

facility which (i) is located in an area that is not an urbanized

area (as defined by the Bureau of the Census) and in which there

are insufficient numbers of needed health care practitioners (as

determined by the Secretary), and that, within the previous 3-year

period, has been designated by the chief executive officer of the

State and certified by the Secretary as an area with a shortage of

personal health services or designated by the Secretary either (I)

as an area with a shortage of personal health services under

section 330(b)(3) (!9) or 1302(7) [42 U.S.C. 300e-1(7)] of the

Public Health Service Act, (II) as a health professional shortage

area described in section 332(a)(1)(A) of that Act [42 U.S.C.

254e(a)(1)(A)] because of its shortage of primary medical care

manpower, (III) as a high impact area described in section

329(a)(5) (!9) of that Act, or (IV) as an area which includes a

population group which the Secretary determines has a health

manpower shortage under section 332(a)(1)(B) of that Act [42 U.S.C.

254e(a)(1)(B)], (ii) has filed an agreement with the Secretary by

which it agrees not to charge any individual or other person for

items or services for which such individual is entitled to have

payment made under this subchapter, except for the amount of any

deductible or coinsurance amount imposed with respect to such items

or services (not in excess of the amount customarily charged for

such items and services by such clinic), pursuant to subsections

(a) and (b) of section 1395l of this title, (iii) employs a

physician assistant or nurse practitioner, and (iv) is not a

rehabilitation agency or a facility which is primarily for the care

and treatment of mental diseases. A facility that is in operation

and qualifies as a rural health clinic under this subchapter or

subchapter XIX of this chapter and that subsequently fails to

satisfy the requirement of clause (i) shall be considered, for

purposes of this subchapter and subchapter XIX of this chapter, as

still satisfying the requirement of such clause if it is

determined, in accordance with criteria established by the

Secretary in regulations, to be essential to the delivery of

primary care services that would otherwise be unavailable in the

geographic area served by the clinic. If a State agency has

determined under section 1395aa(a) of this title that a facility is

a rural health clinic and the facility has applied to the Secretary

for approval as such a clinic, the Secretary shall notify the

facility of the Secretary's approval or disapproval not later than

60 days after the date of the State agency determination or the

application (whichever is later).

(3) The term "Federally qualified health center services" means -

(A) services of the type described in subparagraphs (A) through

(C) of paragraph (1), and

(B) preventive primary health services that a center is

required to provide under sections 329, 330, and 340 (!9) of the

Public Health Service Act,

when furnished to an individual as an outpatient of a Federally

qualified health center and, for this purpose, any reference to a

rural health clinic or a physician described in paragraph (2)(B) is

deemed a reference to a Federally qualified health center or a

physician at the center, respectively.

(4) The term "Federally qualified health center" means an entity

which -

(A)(i) is receiving a grant under section 330 (other than

subsection (h)) of the Public Health Service Act [42 U.S.C.

254b], or

(ii)(I) is receiving funding from such a grant under a contract

with the recipient of such a grant, and (II) meets the

requirements to receive a grant under section 330 (other than

subsection (h)) of such Act [42 U.S.C. 254b];

(B) based on the recommendation of the Health Resources and

Services Administration within the Public Health Service, is

determined by the Secretary to meet the requirements for

receiving such a grant;

(C) was treated by the Secretary, for purposes of part B of

this subchapter, as a comprehensive Federally funded health

center as of January 1, 1990; or

(D) is an outpatient health program or facility operated by a

tribe or tribal organization under the Indian Self-Determination

Act [25 U.S.C. 450f et seq.] or by an urban Indian organization

receiving funds under title V of the Indian Health Care

Improvement Act [25 U.S.C. 1651 et seq.].

(5)(A) The term "physician assistant" and the term "nurse

practitioner" mean, for purposes of this subchapter, a physician

assistant or nurse practitioner who performs such services as such

individual is legally authorized to perform (in the State in which

the individual performs such services) in accordance with State law

(or the State regulatory mechanism provided by State law), and who

meets such training, education, and experience requirements (or any

combination thereof) as the Secretary may prescribe in regulations.

(B) The term "clinical nurse specialist" means, for purposes of

this subchapter, an individual who -

(i) is a registered nurse and is licensed to practice nursing

in the State in which the clinical nurse specialist services are

performed; and

(ii) holds a master's degree in a defined clinical area of

nursing from an accredited educational institution.

(6) The term "collaboration" means a process in which a nurse

practitioner works with a physician to deliver health care services

within the scope of the practitioner's professional expertise, with

medical direction and appropriate supervision as provided for in

jointly developed guidelines or other mechanisms as defined by the

law of the State in which the services are performed.

(7)(A) The Secretary shall waive for a 1-year period the

requirements of paragraph (2) that a rural health clinic employ a

physician assistant, nurse practitioner or certified nurse midwife

or that such clinic require such providers to furnish services at

least 50 percent of the time that the clinic operates for any

facility that requests such waiver if the facility demonstrates

that the facility has been unable, despite reasonable efforts, to

hire a physician assistant, nurse practitioner, or certified

nurse-midwife in the previous 90-day period.

(B) The Secretary may not grant such a waiver under subparagraph

(A) to a facility if the request for the waiver is made less than 6

months after the date of the expiration of any previous such waiver

for the facility, or if the facility has not yet been determined to

meet the requirements (including subparagraph (J) of the first

sentence of paragraph (2)) of a rural health clinic.

(C) A waiver which is requested under this paragraph shall be

deemed granted unless such request is denied by the Secretary

within 60 days after the date such request is received.

(bb) Services of a certified registered nurse anesthetist

(1) The term "services of a certified registered nurse

anesthetist" means anesthesia services and related care furnished

by a certified registered nurse anesthetist (as defined in

paragraph (2)) which the nurse anesthetist is legally authorized to

perform as such by the State in which the services are furnished.

(2) The term "certified registered nurse anesthetist" means a

certified registered nurse anesthetist licensed by the State who

meets such education, training, and other requirements relating to

anesthesia services and related care as the Secretary may

prescribe. In prescribing such requirements the Secretary may use

the same requirements as those established by a national

organization for the certification of nurse anesthetists. Such term

also includes, as prescribed by the Secretary, an anesthesiologist

assistant.

(cc) Comprehensive outpatient rehabilitation facility services

(1) The term "comprehensive outpatient rehabilitation facility

services" means the following items and services furnished by a

physician or other qualified professional personnel (as defined in

regulations by the Secretary) to an individual who is an outpatient

of a comprehensive outpatient rehabilitation facility under a plan

(for furnishing such items and services to such individual)

established and periodically reviewed by a physician -

(A) physicians' services;

(B) physical therapy, occupational therapy, speech-language

pathology services, and respiratory therapy;

(C) prosthetic and orthotic devices, including testing,

fitting, or training in the use of prosthetic and orthotic

devices;

(D) social and psychological services;

(E) nursing care provided by or under the supervision of a

registered professional nurse;

(F) drugs and biologicals which cannot, as determined in

accordance with regulations, be self-administered;

(G) supplies and durable medical equipment; and

(H) such other items and services as are medically necessary

for the rehabilitation of the patient and are ordinarily

furnished by comprehensive outpatient rehabilitation facilities,

excluding, however, any item or service if it would not be included

under subsection (b) of this section if furnished to an inpatient

of a hospital. In the case of physical therapy, occupational

therapy, and speech pathology services, there shall be no

requirement that the item or service be furnished at any single

fixed location if the item or service is furnished pursuant to such

plan and payments are not otherwise made for the item or service

under this subchapter.

(2) The term "comprehensive outpatient rehabilitation facility"

means a facility which -

(A) is primarily engaged in providing (by or under the

supervision of physicians) diagnostic, therapeutic, and

restorative services to outpatients for the rehabilitation of

injured, disabled, or sick persons;

(B) provides at least the following comprehensive outpatient

rehabilitation services: (i) physicians' services (rendered by

physicians, as defined in subsection (r)(1) of this section, who

are available at the facility on a full- or part-time basis);

(ii) physical therapy; and (iii) social or psychological

services;

(C) maintains clinical records on all patients;

(D) has policies established by a group of professional

personnel (associated with the facility), including one or more

physicians defined in subsection (r)(1) of this section to govern

the comprehensive outpatient rehabilitation services it

furnishes, and provides for the carrying out of such policies by

a full- or part-time physician referred to in subparagraph

(B)(i);

(E) has a requirement that every patient must be under the care

of a physician;

(F) in the case of a facility in any State in which State or

applicable local law provides for the licensing of facilities of

this nature (i) is licensed pursuant to such law, or (ii) is

approved by the agency of such State or locality, responsible for

licensing facilities of this nature, as meeting the standards

established for such licensing;

(G) has in effect a utilization review plan in accordance with

regulations prescribed by the Secretary;

(H) has in effect an overall plan and budget that meets the

requirements of subsection (z) of this section;

(I) provides the Secretary on a continuing basis with a surety

bond in a form specified by the Secretary and in an amount that

is not less than $50,000; and

(J) meets such other conditions of participation as the

Secretary may find necessary in the interest of the health and

safety of individuals who are furnished services by such

facility, including conditions concerning qualifications of

personnel in these facilities.

The Secretary may waive the requirement of a surety bond under

subparagraph (I) in the case of a facility that provides a

comparable surety bond under State law.

(dd) Hospice care; hospice program; definitions; certification;

waiver by Secretary

(1) The term "hospice care" means the following items and

services provided to a terminally ill individual by, or by others

under arrangements made by, a hospice program under a written plan

(for providing such care to such individual) established and

periodically reviewed by the individual's attending physician and

by the medical director (and by the interdisciplinary group

described in paragraph (2)(B)) of the program -

(A) nursing care provided by or under the supervision of a

registered professional nurse,

(B) physical or occupational therapy, or speech-language

pathology services,

(C) medical social services under the direction of a physician,

(D)(i) services of a home health aide who has successfully

completed a training program approved by the Secretary and (ii)

homemaker services,

(E) medical supplies (including drugs and biologicals) and the

use of medical appliances, while under such a plan,

(F) physicians' services,

(G) short-term inpatient care (including both respite care and

procedures necessary for pain control and acute and chronic

symptom management) in an inpatient facility meeting such

conditions as the Secretary determines to be appropriate to

provide such care, but such respite care may be provided only on

an intermittent, nonroutine, and occasional basis and may not be

provided consecutively over longer than five days,

(H) counseling (including dietary counseling) with respect to

care of the terminally ill individual and adjustment to his

death, and

(I) any other item or service which is specified in the plan

and for which payment may otherwise be made under this

subchapter.

The care and services described in subparagraphs (A) and (D) may be

provided on a 24-hour, continuous basis only during periods of

crisis (meeting criteria established by the Secretary) and only as

necessary to maintain the terminally ill individual at home.

(2) The term "hospice program" means a public agency or private

organization (or a subdivision thereof) which -

(A)(i) is primarily engaged in providing the care and services

described in paragraph (1) and makes such services available (as

needed) on a 24-hour basis and which also provides bereavement

counseling for the immediate family of terminally ill

individuals,

(ii) provides for such care and services in individuals' homes,

on an outpatient basis, and on a short-term inpatient basis,

directly or under arrangements made by the agency or

organization, except that -

(I) the agency or organization must routinely provide

directly substantially all of each of the services described in

subparagraphs (A), (C), and (H) of paragraph (1), except as

otherwise provided in paragraph (5), and

(II) in the case of other services described in paragraph (1)

which are not provided directly by the agency or organization,

the agency or organization must maintain professional

management responsibility for all such services furnished to an

individual, regardless of the location or facility in which

such services are furnished; and

(iii) provides assurances satisfactory to the Secretary that

the aggregate number of days of inpatient care described in

paragraph (1)(G) provided in any 12-month period to individuals

who have an election in effect under section 1395d(d) of this

title with respect to that agency or organization does not exceed

20 percent of the aggregate number of days during that period on

which such elections for such individuals are in effect;

(B) has an interdisciplinary group of personnel which -

(i) includes at least -

(I) one physician (as defined in subsection (r)(1) of this

section),

(II) one registered professional nurse, and

(III) one social worker,

employed by or, in the case of a physician described in

subclause (I), under contract with the agency or organization,

and also includes at least one pastoral or other counselor,

(ii) provides (or supervises the provision of) the care and

services described in paragraph (1), and

(iii) establishes the policies governing the provision of

such care and services;

(C) maintains central clinical records on all patients;

(D) does not discontinue the hospice care it provides with

respect to a patient because of the inability of the patient to

pay for such care;

(E)(i) utilizes volunteers in its provision of care and

services in accordance with standards set by the Secretary, which

standards shall ensure a continuing level of effort to utilize

such volunteers, and (ii) maintains records on the use of these

volunteers and the cost savings and expansion of care and

services achieved through the use of these volunteers;

(F) in the case of an agency or organization in any State in

which State or applicable local law provides for the licensing of

agencies or organizations of this nature, is licensed pursuant to

such law; and

(G) meets such other requirements as the Secretary may find

necessary in the interest of the health and safety of the

individuals who are provided care and services by such agency or

organization.

(3)(A) An individual is considered to be "terminally ill" if the

individual has a medical prognosis that the individual's life

expectancy is 6 months or less.

(B) The term "attending physician" means, with respect to an

individual, the physician (as defined in subsection (r)(1) of this

section), who may be employed by a hospice program, whom the

individual identifies as having the most significant role in the

determination and delivery of medical care to the individual at the

time the individual makes an election to receive hospice care.

(4)(A) An entity which is certified as a provider of services

other than a hospice program shall be considered, for purposes of

certification as a hospice program, to have met any requirements

under paragraph (2) which are also the same requirements for

certification as such other type of provider. The Secretary shall

coordinate surveys for determining certification under this

subchapter so as to provide, to the extent feasible, for

simultaneous surveys of an entity which seeks to be certified as a

hospice program and as a provider of services of another type.

(B) Any entity which is certified as a hospice program and as a

provider of another type shall have separate provider agreements

under section 1395cc of this title and shall file separate cost

reports with respect to costs incurred in providing hospice care

and in providing other services and items under this subchapter.

(5)(A) The Secretary may waive the requirements of paragraph

(2)(A)(ii)(I) for an agency or organization with respect to all or

part of the nursing care described in paragraph (1)(A) if such

agency or organization -

(i) is located in an area which is not an urbanized area (as

defined by the Bureau of the Census);

(ii) was in operation on or before January 1, 1983; and

(iii) has demonstrated a good faith effort (as determined by

the Secretary) to hire a sufficient number of nurses to provide

such nursing care directly.

(B) Any waiver, which is in such form and containing such

information as the Secretary may require and which is requested by

an agency or organization under subparagraph (A) or (C), shall be

deemed to be granted unless such request is denied by the Secretary

within 60 days after the date such request is received by the

Secretary. The granting of a waiver under subparagraph (A) or (C)

shall not preclude the granting of any subsequent waiver request

should such a waiver again become necessary.

(C) The Secretary may waive the requirements of paragraph

(2)(A)(i) and (2)(A)(ii) for an agency or organization with respect

to the services described in paragraph (1)(B) and, with respect to

dietary counseling, paragraph (1)(H), if such agency or

organization -

(i) is located in an area which is not an urbanized area (as

defined by the Bureau of Census), and

(ii) demonstrates to the satisfaction of the Secretary that the

agency or organization has been unable, despite diligent efforts,

to recruit appropriate personnel.

(ee) Discharge planning process

(1) A discharge planning process of a hospital shall be

considered sufficient if it is applicable to services furnished by

the hospital to individuals entitled to benefits under this

subchapter and if it meets the guidelines and standards established

by the Secretary under paragraph (2).

(2) The Secretary shall develop guidelines and standards for the

discharge planning process in order to ensure a timely and smooth

transition to the most appropriate type of and setting for

post-hospital or rehabilitative care. The guidelines and standards

shall include the following:

(A) The hospital must identify, at an early stage of

hospitalization, those patients who are likely to suffer adverse

health consequences upon discharge in the absence of adequate

discharge planning.

(B) Hospitals must provide a discharge planning evaluation for

patients identified under subparagraph (A) and for other patients

upon the request of the patient, patient's representative, or

patient's physician.

(C) Any discharge planning evaluation must be made on a timely

basis to ensure that appropriate arrangements for post-hospital

care will be made before discharge and to avoid unnecessary

delays in discharge.

(D) A discharge planning evaluation must include an evaluation

of a patient's likely need for appropriate post-hospital

services, including hospice services, and the availability of

those services, including the availability of home health

services through individuals and entities that participate in the

program under this subchapter and that serve the area in which

the patient resides and that request to be listed by the hospital

as available.

(E) The discharge planning evaluation must be included in the

patient's medical record for use in establishing an appropriate

discharge plan and the results of the evaluation must be

discussed with the patient (or the patient's representative).

(F) Upon the request of a patient's physician, the hospital

must arrange for the development and initial implementation of a

discharge plan for the patient.

(G) Any discharge planning evaluation or discharge plan

required under this paragraph must be developed by, or under the

supervision of, a registered professional nurse, social worker,

or other appropriately qualified personnel.

(H) Consistent with section 1395a of this title, the discharge

plan shall -

(i) not specify or otherwise limit the qualified provider

which may provide post-hospital home health services, and

(ii) identify (in a form and manner specified by the

Secretary) any entity to whom the individual is referred in

which the hospital has a disclosable financial interest (as

specified by the Secretary consistent with section

1395cc(a)(1)(S) of this title) or which has such an interest in

the hospital.

(3) With respect to a discharge plan for an individual who is

enrolled with a Medicare+Choice organization under a

Medicare+Choice plan and is furnished inpatient hospital services

by a hospital under a contract with the organization -

(A) the discharge planning evaluation under paragraph (2)(D) is

not required to include information on the availability of home

health services through individuals and entities which do not

have a contract with the organization; and

(B) notwithstanding subparagraph (H)(i) (!10), the plan may

specify or limit the provider (or providers) of post-hospital

home health services or other post-hospital services under the

plan.

(ff) Partial hospitalization services

(1) The term "partial hospitalization services" means the items

and services described in paragraph (2) prescribed by a physician

and provided under a program described in paragraph (3) under the

supervision of a physician pursuant to an individualized, written

plan of treatment established and periodically reviewed by a

physician (in consultation with appropriate staff participating in

such program), which plan sets forth the physician's diagnosis, the

type, amount, frequency, and duration of the items and services

provided under the plan, and the goals for treatment under the

plan.

(2) The items and services described in this paragraph are -

(A) individual and group therapy with physicians or

psychologists (or other mental health professionals to the extent

authorized under State law),

(B) occupational therapy requiring the skills of a qualified

occupational therapist,

(C) services of social workers, trained psychiatric nurses, and

other staff trained to work with psychiatric patients,

(D) drugs and biologicals furnished for therapeutic purposes

(which cannot, as determined in accordance with regulations, be

self-administered),

(E) individualized activity therapies that are not primarily

recreational or diversionary,

(F) family counseling (the primary purpose of which is

treatment of the individual's condition),

(G) patient training and education (to the extent that training

and educational activities are closely and clearly related to

individual's care and treatment),

(H) diagnostic services, and

(I) such other items and services as the Secretary may provide

(but in no event to include meals and transportation);

that are reasonable and necessary for the diagnosis or active

treatment of the individual's condition, reasonably expected to

improve or maintain the individual's condition and functional level

and to prevent relapse or hospitalization, and furnished pursuant

to such guidelines relating to frequency and duration of services

as the Secretary shall by regulation establish (taking into account

accepted norms of medical practice and the reasonable expectation

of patient improvement).

(3)(A) A program described in this paragraph is a program which

is furnished by a hospital to its outpatients or by a community

mental health center (as defined in subparagraph (B)), and which is

a distinct and organized intensive ambulatory treatment service

offering less than 24-hour-daily care.

(B) For purposes of subparagraph (A), the term "community mental

health center" means an entity that -

(i)(I) provides the mental health services described in section

1913(c)(1) of the Public Health Service Act [42 U.S.C.

300x-2(c)(1)]; or

(II) in the case of an entity operating in a State that by law

precludes the entity from providing itself the service described

in subparagraph (E) of such section, provides for such service by

contract with an approved organization or entity (as determined

by the Secretary);

(ii) meets applicable licensing or certification requirements

for community mental health centers in the State in which it is

located; and

(iii) meets such additional conditions as the Secretary shall

specify to ensure (I) the health and safety of individuals being

furnished such services, (II) the effective and efficient

furnishing of such services, and (III) the compliance of such

entity with the criteria described in section 1931(c)(1) of the

Public Health Service Act [42 U.S.C. 300x-31(c)(1)].

(gg) Certified nurse-midwife services

(1) The term "certified nurse-midwife services" means such

services furnished by a certified nurse-midwife (as defined in

paragraph (2)) and such services and supplies furnished as an

incident to the nurse-midwife's service which the certified

nurse-midwife is legally authorized to perform under State law (or

the State regulatory mechanism provided by State law) as would

otherwise be covered if furnished by a physician or as an incident

to a physicians' service.

(2) The term "certified nurse-midwife" means a registered nurse

who has successfully completed a program of study and clinical

experience meeting guidelines prescribed by the Secretary, or has

been certified by an organization recognized by the Secretary.

(hh) Clinical social worker; clinical social worker services

(1) The term "clinical social worker" means an individual who -

(A) possesses a master's or doctor's degree in social work;

(B) after obtaining such degree has performed at least 2 years

of supervised clinical social work; and

(C)(i) is licensed or certified as a clinical social worker by

the State in which the services are performed, or

(ii) in the case of an individual in a State which does not

provide for licensure or certification -

(I) has completed at least 2 years or 3,000 hours of

post-master's degree supervised clinical social work practice

under the supervision of a master's level social worker in an

appropriate setting (as determined by the Secretary), and

(II) meets such other criteria as the Secretary establishes.

(2) The term "clinical social worker services" means services

performed by a clinical social worker (as defined in paragraph (1))

for the diagnosis and treatment of mental illnesses (other than

services furnished to an inpatient of a hospital and other than

services furnished to an inpatient of a skilled nursing facility

which the facility is required to provide as a requirement for

participation) which the clinical social worker is legally

authorized to perform under State law (or the State regulatory

mechanism provided by State law) of the State in which such

services are performed as would otherwise be covered if furnished

by a physician or as an incident to a physician's professional

service.

(ii) Qualified psychologist services

The term "qualified psychologist services" means such services

and such services and supplies furnished as an incident to his

service furnished by a clinical psychologist (as defined by the

Secretary) which the psychologist is legally authorized to perform

under State law (or the State regulatory mechanism provided by

State law) as would otherwise be covered if furnished by a

physician or as an incident to a physician's service.

(jj) Screening mammography

The term "screening mammography" means a radiologic procedure

provided to a woman for the purpose of early detection of breast

cancer and includes a physician's interpretation of the results of

the procedure.

(kk) Covered osteoporosis drug

The term "covered osteoporosis drug" means an injectable drug

approved for the treatment of post-menopausal osteoporosis provided

to an individual by a home health agency if, in accordance with

regulations promulgated by the Secretary -

(1) the individual's attending physician certifies that the

individual has suffered a bone fracture related to

post-menopausal osteoporosis and that the individual is unable to

learn the skills needed to self-administer such drug or is

otherwise physically or mentally incapable of self-administering

such drug; and

(2) the individual is confined to the individual's home (except

when receiving items and services referred to in subsection

(m)(7) of this section).

(ll) Speech-language pathology services; audiology services

(1) The term "speech-language pathology services" means such

speech, language, and related function assessment and

rehabilitation services furnished by a qualified speech-language

pathologist as the speech-language pathologist is legally

authorized to perform under State law (or the State regulatory

mechanism provided by State law) as would otherwise be covered if

furnished by a physician.

(2) The term "audiology services" means such hearing and balance

assessment services furnished by a qualified audiologist as the

audiologist is legally authorized to perform under State law (or

the State regulatory mechanism provided by State law), as would

otherwise be covered if furnished by a physician.

(3) In this subsection:

(A) The term "qualified speech-language pathologist" means an

individual with a master's or doctoral degree in speech-language

pathology who -

(i) is licensed as a speech-language pathologist by the State

in which the individual furnishes such services, or

(ii) in the case of an individual who furnishes services in a

State which does not license speech-language pathologists, has

successfully completed 350 clock hours of supervised clinical

practicum (or is in the process of accumulating such supervised

clinical experience), performed not less than 9 months of

supervised full-time speech-language pathology services after

obtaining a master's or doctoral degree in speech-language

pathology or a related field, and successfully completed a

national examination in speech-language pathology approved by

the Secretary.

(B) The term "qualified audiologist" means an individual with a

master's or doctoral degree in audiology who -

(i) is licensed as an audiologist by the State in which the

individual furnishes such services, or

(ii) in the case of an individual who furnishes services in a

State which does not license audiologists, has successfully

completed 350 clock hours of supervised clinical practicum (or

is in the process of accumulating such supervised clinical

experience), performed not less than 9 months of supervised

full-time audiology services after obtaining a master's or

doctoral degree in audiology or a related field, and

successfully completed a national examination in audiology

approved by the Secretary.

(mm) Critical access hospital; critical access hospital services

(1) The term "critical access hospital" means a facility

certified by the Secretary as a critical access hospital under

section 1395i-4(e) of this title.

(2) The term "inpatient critical access hospital services" means

items and services, furnished to an inpatient of a critical access

hospital by such facility, that would be inpatient hospital

services if furnished to an inpatient of a hospital by a hospital.

(3) The term "outpatient critical access hospital services" means

medical and other health services furnished by a critical access

hospital on an outpatient basis.

(nn) Screening pap smear; screening pelvic exam

(1) The term "screening pap smear" means a diagnostic laboratory

test consisting of a routine exfoliative cytology test

(Papanicolaou test) provided to a woman for the purpose of early

detection of cervical or vaginal cancer and includes a physician's

interpretation of the results of the test, if the individual

involved has not had such a test during the preceding 2 years, or

during the preceding year in the case of a woman described in

paragraph (3).

(2) The term "screening pelvic exam" means a pelvic examination

provided to a woman if the woman involved has not had such an

examination during the preceding 2 years, or during the preceding

year in the case of a woman described in paragraph (3), and

includes a clinical breast examination.

(3) A woman described in this paragraph is a woman who -

(A) is of childbearing age and has had a test described in this

subsection during any of the preceding 3 years that indicated the

presence of cervical or vaginal cancer or other abnormality; or

(B) is at high risk of developing cervical or vaginal cancer

(as determined pursuant to factors identified by the Secretary).

(oo) Prostate cancer screening tests

(1) The term "prostate cancer screening test" means a test that

consists of any (or all) of the procedures described in paragraph

(2) provided for the purpose of early detection of prostate cancer

to a man over 50 years of age who has not had such a test during

the preceding year.

(2) The procedures described in this paragraph are as follows:

(A) A digital rectal examination.

(B) A prostate-specific antigen blood test.

(C) For years beginning after 2002, such other procedures as

the Secretary finds appropriate for the purpose of early

detection of prostate cancer, taking into account changes in

technology and standards of medical practice, availability,

effectiveness, costs, and such other factors as the Secretary

considers appropriate.

(pp) Colorectal cancer screening tests

(1) The term "colorectal cancer screening test" means any of the

following procedures furnished to an individual for the purpose of

early detection of colorectal cancer:

(A) Screening fecal-occult blood test.

(B) Screening flexible sigmoidoscopy.

(C) Screening colonoscopy.

(D) Such other tests or procedures, and modifications to tests

and procedures under this subsection, with such frequency and

payment limits, as the Secretary determines appropriate, in

consultation with appropriate organizations.

(2) An "individual at high risk for colorectal cancer" is an

individual who, because of family history, prior experience of

cancer or precursor neoplastic polyps, a history of chronic

digestive disease condition (including inflammatory bowel disease,

Crohn's Disease, or ulcerative colitis), the presence of any

appropriate recognized gene markers for colorectal cancer, or other

predisposing factors, faces a high risk for colorectal cancer.

(qq) Diabetes outpatient self-management training services

(1) The term "diabetes outpatient self-management training

services" means educational and training services furnished (at

such times as the Secretary determines appropriate) to an

individual with diabetes by a certified provider (as described in

paragraph (2)(A)) in an outpatient setting by an individual or

entity who meets the quality standards described in paragraph

(2)(B), but only if the physician who is managing the individual's

diabetic condition certifies that such services are needed under a

comprehensive plan of care related to the individual's diabetic

condition to ensure therapy compliance or to provide the individual

with necessary skills and knowledge (including skills related to

the self-administration of injectable drugs) to participate in the

management of the individual's condition.

(2) In paragraph (1) -

(A) a "certified provider" is a physician, or other individual

or entity designated by the Secretary, that, in addition to

providing diabetes outpatient self-management training services,

provides other items or services for which payment may be made

under this subchapter; and

(B) a physician, or such other individual or entity, meets the

quality standards described in this paragraph if the physician,

or individual or entity, meets quality standards established by

the Secretary, except that the physician or other individual or

entity shall be deemed to have met such standards if the

physician or other individual or entity meets applicable

standards originally established by the National Diabetes

Advisory Board and subsequently revised by organizations who

participated in the establishment of standards by such Board, or

is recognized by an organization that represents individuals

(including individuals under this subchapter) with diabetes as

meeting standards for furnishing the services.

(rr) Bone mass measurement

(1) The term "bone mass measurement" means a radiologic or

radioisotopic procedure or other procedure approved by the Food and

Drug Administration performed on a qualified individual (as defined

in paragraph (2)) for the purpose of identifying bone mass or

detecting bone loss or determining bone quality, and includes a

physician's interpretation of the results of the procedure.

(2) For purposes of this subsection, the term "qualified

individual" means an individual who is (in accordance with

regulations prescribed by the Secretary) -

(A) an estrogen-deficient woman at clinical risk for

osteoporosis;

(B) an individual with vertebral abnormalities;

(C) an individual receiving long-term glucocorticoid steroid

therapy;

(D) an individual with primary hyperparathyroidism; or

(E) an individual being monitored to assess the response to or

efficacy of an approved osteoporosis drug therapy.

(3) The Secretary shall establish such standards regarding the

frequency with which a qualified individual shall be eligible to be

provided benefits for bone mass measurement under this subchapter.

(ss) Religious nonmedical health care institution

(1) The term "religious nonmedical health care institution" means

an institution that -

(A) is described in subsection (c)(3) of section 501 of the

Internal Revenue Code of 1986 and is exempt from taxes under

subsection (a) of such section;

(B) is lawfully operated under all applicable Federal, State,

and local laws and regulations;

(C) provides only nonmedical nursing items and services

exclusively to patients who choose to rely solely upon a

religious method of healing and for whom the acceptance of

medical health services would be inconsistent with their

religious beliefs;

(D) provides such nonmedical items and services exclusively

through nonmedical nursing personnel who are experienced in

caring for the physical needs of such patients;

(E) provides such nonmedical items and services to inpatients

on a 24-hour basis;

(F) on the basis of its religious beliefs, does not provide

through its personnel or otherwise medical items and services

(including any medical screening, examination, diagnosis,

prognosis, treatment, or the administration of drugs) for its

patients;

(G)(i) is not owned by, under common ownership with, or has an

ownership interest in, a provider of medical treatment or

services;

(ii) is not affiliated with -

(I) a provider of medical treatment or services, or

(II) an individual who has an ownership interest in a

provider of medical treatment or services;

(H) has in effect a utilization review plan which -

(i) provides for the review of admissions to the institution,

of the duration of stays therein, of cases of continuous

extended duration, and of the items and services furnished by

the institution,

(ii) requires that such reviews be made by an appropriate

committee of the institution that includes the individuals

responsible for overall administration and for supervision of

nursing personnel at the institution,

(iii) provides that records be maintained of the meetings,

decisions, and actions of such committee, and

(iv) meets such other requirements as the Secretary finds

necessary to establish an effective utilization review plan;

(I) provides the Secretary with such information as the

Secretary may require to implement section 1395i-5 of this title,

including information relating to quality of care and coverage

determinations; and

(J) meets such other requirements as the Secretary finds

necessary in the interest of the health and safety of individuals

who are furnished services in the institution.

(2) To the extent that the Secretary finds that the accreditation

of an institution by a State, regional, or national agency or

association provides reasonable assurances that any or all of the

requirements of paragraph (1) are met or exceeded, the Secretary

may treat such institution as meeting the condition or conditions

with respect to which the Secretary made such finding.

(3)(A)(i) In administering this subsection and section 1395i-5 of

this title, the Secretary shall not require any patient of a

religious nonmedical health care institution to undergo medical

screening, examination, diagnosis, prognosis, or treatment or to

accept any other medical health care service, if such patient (or

legal representative of the patient) objects thereto on religious

grounds.

(ii) Clause (i) shall not be construed as preventing the

Secretary from requiring under section 1395i-5(a)(2) of this title

the provision of sufficient information regarding an individual's

condition as a condition for receipt of benefits under part A of

this subchapter for services provided in such an institution.

(B)(i) In administering this subsection and section 1395i-5 of

this title, the Secretary shall not subject a religious nonmedical

health care institution or its personnel to any medical

supervision, regulation, or control, insofar as such supervision,

regulation, or control would be contrary to the religious beliefs

observed by the institution or such personnel.

(ii) Clause (i) shall not be construed as preventing the

Secretary from reviewing items and services billed by the

institution to the extent the Secretary determines such review to

be necessary to determine whether such items and services were not

covered under part A of this subchapter, are excessive, or are

fraudulent.

(4)(A) For purposes of paragraph (1)(G)(i), an ownership interest

of less than 5 percent shall not be taken into account.

(B) For purposes of paragraph (1)(G)(ii), none of the following

shall be considered to create an affiliation:

(i) An individual serving as an uncompensated director,

trustee, officer, or other member of the governing body of a

religious nonmedical health care institution.

(ii) An individual who is a director, trustee, officer,

employee, or staff member of a religious nonmedical health care

institution having a family relationship with an individual who

is affiliated with (or has an ownership interest in) a provider

of medical treatment or services.

(iii) An individual or entity furnishing goods or services as a

vendor to both providers of medical treatment or services and

religious nonmedical health care institutions.

(tt) Post-institutional home health services; home health spell of

illness

(1) The term "post-institutional home health services" means home

health services furnished to an individual -

(A) after discharge from a hospital or rural primary care (!11)

hospital in which the individual was an inpatient for not less

than 3 consecutive days before such discharge if such home health

services were initiated within 14 days after the date of such

discharge; or

(B) after discharge from a skilled nursing facility in which

the individual was provided post-hospital extended care services

if such home health services were initiated within 14 days after

the date of such discharge.

(2) The term "home health spell of illness" with respect to any

individual means a period of consecutive days -

(A) beginning with the first day (not included in a previous

home health spell of illness) (i) on which such individual is

furnished post-institutional home health services, and (ii) which

occurs in a month for which the individual is entitled to

benefits under part A of this subchapter, and

(B) ending with the close of the first period of 60 consecutive

days thereafter on each of which the individual is neither an

inpatient of a hospital or rural primary care (!11) hospital nor

an inpatient of a facility described in section 1395i-3(a)(1) of

this title or subsection (y)(1) of this section nor provided home

health services.

(uu)Screening for glaucoma

The term "screening for glaucoma" means a dilated eye examination

with an intraocular pressure measurement, and a direct

ophthalmoscopy or a slit-lamp biomicroscopic examination for the

early detection of glaucoma which is furnished by or under the

direct supervision of an optometrist or ophthalmologist who is

legally authorized to furnish such services under State law (or the

State regulatory mechanism provided by State law) of the State in

which the services are furnished, as would otherwise be covered if

furnished by a physician or as an incident to a physician's

professional service, if the individual involved has not had such

an examination in the preceding year.

(vv)Medical nutrition therapy services; registered dietitian or

nutrition professional

(1) The term "medical nutrition therapy services" means

nutritional diagnostic, therapy, and counseling services for the

purpose of disease management which are furnished by a registered

dietitian or nutrition professional (as defined in paragraph (2))

pursuant to a referral by a physician (as defined in subsection

(r)(1) of this section).

(2) Subject to paragraph (3), the term "registered dietitian or

nutrition professional" means an individual who -

(A) holds a baccalaureate or higher degree granted by a

regionally accredited college or university in the United States

(or an equivalent foreign degree) with completion of the academic

requirements of a program in nutrition or dietetics, as

accredited by an appropriate national accreditation organization

recognized by the Secretary for this purpose;

(B) has completed at least 900 hours of supervised dietetics

practice under the supervision of a registered dietitian or

nutrition professional; and

(C)(i) is licensed or certified as a dietitian or nutrition

professional by the State in which the services are performed; or

(ii) in the case of an individual in a State that does not

provide for such licensure or certification, meets such other

criteria as the Secretary establishes.

(3) Subparagraphs (A) and (B) of paragraph (2) shall not apply in

the case of an individual who, as of December 21, 2000, is licensed

or certified as a dietitian or nutrition professional by the State

in which medical nutrition therapy services are performed.

-SOURCE-

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1861, as added Pub. L.

89-97, title I, Sec. 102(a), July 30, 1965, 79 Stat. 313; amended

Pub. L. 89-713, Sec. 7, Nov. 2, 1966, 80 Stat. 1111; Pub. L.

90-248, title I, Secs. 127(a), 129(a), (b), (c)(9)(C), (10), (11),

132(a), 133(a), (b), 134(a), 143(a), 144(a)-(d), Jan. 2, 1968, 81

Stat. 846-850, 852, 857, 858; Pub. L. 91-690, Jan. 12, 1971, 84

Stat. 2074; Pub. L. 92-603, title II, Secs. 211(b), (c)(2),

221(c)(4), 223(a)-(d), (f), 227(a), (c), (d)(1), (f), 234(a)-(f),

237(c), 244(c), 246(b), 248, 249(b), 251(a)(1), (b)(1), (c),

252(a), 256(b), 264(a), 265, 267, 273(a), 276(a), 278(a) (4)-(15),

(b)(6), (10), (11), (13), 283(a), Oct. 30, 1972, 86 Stat. 1383,

1384, 1389, 1393, 1394, 1404-1407, 1412, 1413, 1416, 1423-1426,

1445-1447, 1449-1454, 1456; Pub. L. 94-182, title I, Secs. 102,

106(a), 112(a)(1), Dec. 31, 1975, 89 Stat. 1051, 1052, 1055; Pub.

L. 95-142, Secs. 3(a)(2), 5(m), 19(b)(1), 21(a), Oct. 25, 1977, 91

Stat. 1178, 1191, 1204, 1207; Pub. L. 95-210, Sec. 1(d), (g), (h),

Dec. 13, 1977, 91 Stat. 1485, 1487, 1488; Pub. L. 95-216, title V,

Sec. 501(a), Dec. 20, 1977, 91 Stat. 1564; Pub. L. 95-292, Sec.

4(d), June 13, 1978, 92 Stat. 315; Pub. L. 96-499, title IX, Secs.

902(a)(1), 915(a), 930(k)-(n), (p), 931(c), (d), 933(c)-(e),

936(a), 937(a), 938(a), 948(a)(1), 949, 950, 951(a), (b), 952(a),

formerly 952, Dec. 5, 1980, 94 Stat. 2612, 2623, 2632, 2633, 2635,

2639, 2640, 2643, 2645, 2646; Pub. L. 96-611, Sec. 1(a)(1), (b)(3),

Dec. 28, 1980, 94 Stat. 3566; Pub. L. 97-35, title XXI, Secs.

2102(a), 2114, 2121(c), (d), 2141(a), 2142(a), 2143(a), 2144(a),

2193(c)(9), Aug. 13, 1981, 95 Stat. 787, 796-799, 828; Pub. L.

97-248, title I, Secs. 101(a)(2), (d), 102(a), 103(a), 105(a),

106(a), 107(a), 108(a)(2), 109(b), 114(b), 122(d), 127(1),

128(a)(1), (d)(2), 148(b), Sept. 3, 1982, 96 Stat. 335-339, 350,

359, 366, 367, 394; Pub. L. 97-448, title III, Sec. 309(a)(4), Jan.

12, 1983, 96 Stat. 2408; Pub. L. 98-21, title VI, Secs. 602(d),

607(b)(2), (d), Apr. 20, 1983, 97 Stat. 163, 171, 172; Pub. L.

98-369, div. B, title III, Secs. 2314(a), 2318(a), (b), 2319(a),

2321(e), 2322(a), 2323(a), 2324(a), 2335(b), 2340(a), 2341(a), (c),

2342(a), 2343(a), (b), 2354(b)(18)-(29), July 18, 1984, 98 Stat.

1079, 1081, 1082, 1085, 1086, 1090, 1093, 1094, 1101; Pub. L.

98-617, Sec. 3(a)(4), (b)(7), Nov. 8, 1984, 98 Stat. 3295, 3296;

Pub. L. 99-272, title IX, Secs. 9107(b), 9110(a), 9202(i)(1),

9219(b)(1)(B), (3)(A), Apr. 7, 1986, 100 Stat. 160, 162, 177, 182,

183; Pub. L. 99-509, title IX, Secs. 9305(c)(1), (2), 9313(a)(2),

9315(a), 9320(b), (c), (f), 9335(c)(1), 9336(a), 9337(d), 9338(a),

Oct. 21, 1986, 100 Stat. 1989, 2002, 2005, 2013, 2015, 2030, 2033,

2034; Pub. L. 100-203, title IV, Secs. 4009(e)(1), (f), 4021(a),

4026(a)(1), 4039(b), 4064(e)(1), 4065(a), 4070(b)(1), (2), 4071(a),

4072(a), 4073(a), (c), 4074(a), (b), 4075(a), 4076(a), 4077(a)(1),

(b)(1), (4), formerly (5), 4078, 4084(c)(1), 4085(i)(9)-(14),

4201(a)(1), (b)(1), (d)(1), (2), (5), formerly (d), Dec. 22, 1987,

101 Stat. 1330-57, 1330-58, 1330-67, 1330-74, 1330-81, 1330-111,

1330-112, 1330-114, 1330-116, 1330-118 to 1330-121, 1330-132,

1330-133, 1330-160, 1330-174, as amended Pub. L. 100-360, title IV,

Sec. 411(h)(4)(D), (5)-(7)(A), (E), (F), (i)(3), (4)(C)(iii),

(l)(1)(B), (C), July 1, 1988, 102 Stat. 787-789, 801, as amended

Pub. L. 100-485, title VI, Sec. 608(d)(27)(B), Oct. 13, 1988, 102

Stat. 2422; Pub. L. 100-360, title I, Sec. 104(d)(4), title II,

Secs. 202(a), 203(b), (e)(1), 204(a), 205(b), 206(a), title IV,

Sec. 411(d)(1)(B)(i), (5)(A), (g)(3)(H), (h)(1)(B), (2), (3)(A),

July 1, 1988, 102 Stat. 689, 702, 721, 725, 730, 731, 773, 774,

785, 786; Pub. L. 100-485, title VI, Sec. 608(d)(6)(A), (23)(B),

Oct. 13, 1988, 102 Stat. 2414, 2421; Pub. L. 100-647, title VIII,

Secs. 8423(a), 8424(a), Nov. 10, 1988, 102 Stat. 3803; Pub. L.

101-234, title I, Sec. 101(a), title II, Sec. 201(a), Dec. 13,

1989, 103 Stat. 1979, 1981; Pub. L. 101-239, title VI, Secs.

6003(g)(3)(A), (C)(i), (D)(x), 6110, 6112(e)(1), 6113(a)-(b)(2),

6114(a), (d), 6115(a), 6116(a)(1), 6131(a)(2), 6141(a),

6213(a)-(c), Dec. 19, 1989, 103 Stat. 2151-2153, 2213, 2215-2219,

2221, 2225, 2250, 2251; Pub. L. 101-508, title IV, Secs.

4008(h)(2)(A)(i), 4151(a), (b)(1), 4152(a)(2), 4153(b)(2)(A),

4155(a), (d), 4156(a), 4157(a), 4161(a)(1), (2), (5), (b)(1), (2),

4162(a), 4163(a), 4201(d)(1), 4207(d)(1), formerly 4027(d)(1), Nov.

5, 1990, 104 Stat. 1388-48, 1388-71, 1388-72, 1388-74, 1388-84,

1388-86 to 1388-88, 1388-93 to 1388-96, 1388-104, 1388-120,

renumbered Pub. L. 103-432, title I, Sec. 160(d)(4), Oct. 31, 1994,

108 Stat. 4444; Pub. L. 101-597, title IV, Sec. 401(c)(2), Nov. 16,

1990, 104 Stat. 3035; Pub. L. 103-66, title XIII, Secs.

13503(c)(1)(A), 13521, 13522, 13553(a), (b), 13554(a), 13556(a),

13564(a)(2), (b)(1), 13565, 13566(b), Aug. 10, 1993, 107 Stat. 578,

586, 591, 592, 607; Pub. L. 103-432, title I, Secs. 102(g)(4), 104,

107(a), 145(b), 146(a), (b), 147(e)(1), (4), (5), (f)(3), (4)(A),

(6)(A), (B), (E), 158(a)(1), Oct. 31, 1994, 108 Stat. 4404, 4405,

4407, 4427-4432, 4442; Pub. L. 104-299, Sec. 4(b)(1), Oct. 11,

1996, 110 Stat. 3645; Pub. L. 105-33, title IV, Secs. 4102(a), (c),

4103(a), 4104(a)(1), 4105(a)(1), (b)(1), 4106(a), 4201(c)(1), (2),

4205(b)(1), (c)(1), (d)(1)-(3)(A), 4312(b)(1), (2), (d), (e), 4320,

4321(a), 4404(a), 4432(b)(5)(D), (E), 4444(a), 4445, 4446, 4451,

4454(a)(1), 4511(a)(1)-(2)(B), (d), 4512(a), 4513(a), 4522,

4531(a)(1), 4557(a), 4601(a), 4602(a)-(c), 4604(b), 4611(b),

4612(a), Aug. 5, 1997, 111 Stat. 360-362, 366, 367, 373, 376, 377,

386, 387, 394, 400, 421-426, 442-444, 450, 463, 466, 472, 474; Pub.

L. 105-277, div. J, title V, Sec. 5101(a), (b), (d)(1), Oct. 21,

1998, 112 Stat. 2681-913, 2681-914; Pub. L. 106-113, div. B, Sec.

1000(a)(6) [title II, Secs. 201(k), 221(b)(1), 227(a), title III,

Secs. 303(a), 304(a), 321(k)(7)-(9), title V, Sec. 521], Nov. 29,

1999, 113 Stat. 1536, 1501A-341, 1501A-351, 1501A-354, 1501A-360,

1501A-361, 1501A-367, 1501A-386; Pub. L. 106-554, Sec. 1(a)(6)

[title I, Secs. 101(a), 102(a), (b), 103(a), 105(a), (b), 112(a),

113(a), title IV, Secs. 430(b), 431(a), title V, Secs. 502(a),

541], Dec. 21, 2000, 114 Stat. 2763, 2763A-467, 2763A-468,

2763A-471, 2763A-473, 2763A-525, 2763A-529, 2763A-550.)

-REFTEXT-

REFERENCES IN TEXT

Parts A and B of this subchapter, referred to in text, are

classified to section 1395c et seq. and section 1395j et seq.,

respectively, of this title.

Section 4071(b) of the Omnibus Budget Reconciliation Act of 1987,

referred to in subsec. (s)(10)(A), is section 4071(b) of Pub. L.

100-203, which is set out as a note below.

Section 4072(e) of the Omnibus Budget Reconciliation Act of 1987,

referred to in subsec. (s)(12), is section 4072(e) of Pub. L.

100-203, which is set out as a note below.

The Public Health Service Act, referred to in subsec. (v)(1)(M),

is act July 1, 1944, ch. 373, 58 Stat. 682, as amended, which is

classified generally to chapter 6A (Sec. 201 et seq.) of this

title. Titles VI and XVI of the Public Health Service Act are

classified generally to subchapters IV (Sec. 291 et seq.) and XIV

(Sec. 300q et seq.), respectively, of chapter 6A of this title. For

complete classification of this Act to the Code, see Short Title

note set out under section 201 of this title and Tables.

Section 1395l(t)(5)(B) of this title, referred to in subsec.

(v)(1)(T), was redesignated section 1395l(t)(8)(B) of this title by

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Secs.

201(a)(1), 202(a)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A-336,

1501A-342.

Section 1395cc(a)(2)(B)(ii) of this title, referred to in subsec.

(v)(4), was repealed by Pub. L. 101-239, title VI, Sec. 6017(2),

Dec. 19, 1989, 103 Stat. 2165.

Part B of subchapter XI of this chapter, referred to in subsec.

(w)(2), is classified to section 1320c et seq. of this title.

Sections 329 and 330 of the Public Health Service Act, referred

to in subsec. (aa)(2), (3)(B), were sections 329 and 330 of act

July 1, 1944, which were classified, respectively, to sections 254b

and 254c of this title and were omitted in the general amendment of

subpart I (Sec. 254b et seq.) of part D of subchapter II of chapter

6A of this title by Pub. L. 104-299, Sec. 2, Oct. 11, 1996, 110

Stat. 3626. Sections 2 and 3(a) of Pub. L. 104-299 enacted new

sections 330 and 330A of act July 1, 1944, which are classified,

respectively, to sections 254b and 254c of this title.

Section 340 of the Public Health Service Act, referred to in

subsec. (aa)(3)(B), was section 340 of act July 1, 1944, which was

classified to section 256 of this title prior to repeal by Pub. L.

104-299, Sec. 4(a)(3), Oct. 11, 1996, 110 Stat. 3645.

The Indian Self-Determination Act, referred to in subsec.

(aa)(4)(D), is title I of Pub. L. 93-638, Jan. 4, 1975, 88 Stat.

2206, as amended, which is classified principally to part A (Sec.

450f et seq.) of subchapter II of chapter 14 of Title 25, Indians.

For complete classification of this Act to the Code, see Short

Title note set out under section 450 of Title 25 and Tables.

The Indian Health Care Improvement Act, referred to in subsec.

(aa)(4)(D), is Pub. L. 94-437, Sept. 30, 1976, 90 Stat. 1400, as

amended. Title V of the Act is classified generally to subchapter

IV (Sec. 1651 et seq.) of chapter 18 of Title 25. For complete

classification of this Act to the Code, see Short Title note set

out under section 1601 of Title 25 and Tables.

The Internal Revenue Code of 1986, referred to in subsec.

(ss)(1)(A), is classified generally to Title 26, Internal Revenue

Code.

-MISC1-

AMENDMENTS

2000 - Subsec. (s)(2)(A), (B). Pub. L. 106-554, Sec. 1(a)(6)

[title I, Sec. 112(a)], substituted "(including drugs and

biologicals which are not usually self-administered by the

patient)" for "(including drugs and biologicals which cannot, as

determined in accordance with regulations, be self-administered)".

Subsec. (s)(2)(J). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

113(a)], struck out provisions limiting application to drugs

furnished within 12 months after the date of the transplant

procedure for drugs furnished before 1995, to within 18 months

after the date of the transplant procedure for drugs furnished

during 1995, to within 24 months after the date of the transplant

procedure for drugs furnished during 1996, to within 30 months

after the date of the transplant procedure for drugs furnished

during 1997, and to within 36 months after the date of the

transplant procedure plus additional number of months provided

under section 1395k(b) for drugs furnished during any year after

1997.

Subsec. (s)(2)(U). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

102(a)], added subpar. (U).

Subsec. (s)(2)(V). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

105(a)], added subpar. (V).

Subsec. (t)(1). Pub. L. 106-554, Sec. 1(a)(6) [title IV, Sec.

430(b)], inserted "(including contrast agents)" after "only such

drugs".

Subsec. (v)(1)(L)(x). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 502(a)], struck out "2001," after " 2000," and inserted at end

"With respect to cost reporting periods beginning during fiscal

year 2001, the update to any limit under this subparagraph shall be

the home health market basket index."

Subsec. (v)(1)(T)(ii). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 541(1)], struck out "and" at end.

Subsec. (v)(1)(T)(iii). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 541(2)], substituted "during fiscal year 2000" for "during a

subsequent fiscal year" and ", and" for period at end.

Subsec. (v)(1)(T)(iv). Pub. L. 106-554, Sec. 1(a)(6) [title V,

Sec. 541(3)], added cl. (iv).

Subsec. (ff)(3)(B). Pub. L. 106-554, Sec. 1(a)(6) [title IV, Sec.

431(a)], substituted "entity that - " for "entity - ", added cls.

(i) to (iii), and struck out former cls. (i) and (ii) which read as

follows:

"(i) providing the services described in section 1916(c)(4) of

the Public Health Service Act; and

"(ii) meeting applicable licensing or certification requirements

for community mental health centers in the State in which it is

located."

Subsec. (nn)(1), (2). Pub. L. 106-554, Sec. 1(a)(6) [title I,

Sec. 101(a)], substituted "2 years" for "3 years".

Subsec. (pp)(1)(C). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

103(a)(1)], substituted "Screening colonoscopy" for "In the case of

an individual at high risk for colorectal cancer, screening

colonoscopy".

Subsec. (pp)(2). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

103(a)(2)], substituted "An" for "In paragraph (1)(C), an".

Subsec. (uu). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

102(b)], added subsec. (uu).

Subsec. (vv). Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec.

105(b)], added subsec. (vv).

1999 - Subsec. (o)(7). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 304(a)], amended par. (7) generally. Prior to amendment,

par. (7) read as follows: "provides the Secretary on a continuing

basis with a surety bond in a form specified by the Secretary and

in an amount that is not less than $50,000; and".

Subsec. (p)(1). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

221(b)(1)(A)], substituted ", (3), or (4)" for "or (3)".

Subsec. (r)(4). Pub. L. 106-113, Sec. 1000(a)(6) [title II, Sec.

221(b)(1)(B)], inserted "for purposes of subsection (p)(1) of this

section and" after "but only".

Subsec. (s)(2)(J)(v). Pub. L. 106-113, Sec. 1000(a)(6) [title II,

Sec. 227(a)], inserted before semicolon at end "plus such

additional number of months (if any) provided under section

1395k(b) of this title".

Subsec. (s)(2)(T)(ii). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(7)], substituted semicolon for period at end.

Subsec. (v)(1)(L)(ix), (x). Pub. L. 106-113, Sec. 1000(a)(6)

[title III, Sec. 303(a)], added cl. (ix) and redesignated former

cl. (ix) as (x).

Subsec. (v)(1)(S)(ii)(I), (II). Pub. L. 106-113, Sec. 1000(a)(6)

[title II, Sec. 201(k)], substituted "and until the first date that

the prospective payment system under section 1395l(t) of this title

is implemented" for "and during fiscal year 2000 before January 1,

2000".

Subsec. (aa)(2)(I). Pub. L. 106-113, Sec. 1000(a)(6) [title III,

Sec. 321(k)(8)], substituted semicolon for comma at end and

realigned margins.

Subsec. (ee)(3). Pub. L. 106-113, Sec. 1000(a)(6) [title V, Sec.

521], added par. (3).

Subsec. (ss)(1)(G)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title

III, Sec. 321(k)(9)(B)], which directed substitution of "or" for

"of", was executed by making the substitution for "of" the second

time appearing to reflect the probable intent of Congress.

Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec. 321(k)(9)(A)],

substituted "owned" for "owed".

1998 - Subsec. (v)(1)(L)(i)(III) to (V). Pub. L. 105-277, Sec.

5101(b), in subcl. (III) struck out "or" at end, in subcl. (IV)

inserted "and before October 1, 1998," after "1997," and

substituted ", or" for period at end, and added subcl. (V).

Subsec. (v)(1)(L)(v). Pub. L. 105-277, Sec. 5101(a)(1), inserted

"subject to clause (viii)(I)," before "the Secretary" in

introductory provisions.

Subsec. (v)(1)(L)(vi)(I). Pub. L. 105-277, Sec. 5101(a)(2),

inserted "subject to clauses (viii)(II) and (viii)(III)" after

"1994".

Subsec. (v)(1)(L)(viii). Pub. L. 105-277, Sec. 5101(a)(3), added

cl. (viii).

Subsec. (v)(1)(L)(ix). Pub. L. 105-277, Sec. 5101(d)(1), added

cl. (ix).

1997 - Subsec. (a). Pub. L. 105-33, Sec. 4201(c)(1), substituted

"critical access" for "rural primary care" in pars. (1) and (2).

Subsec. (b)(4). Pub. L. 105-33, Sec. 4511(a)(2)(B), substituted

"subsection (s)(2)(K)" for "clauses (i) or (iii) of subsection

(s)(2)(K)".

Subsec. (e). Pub. L. 105-33, Sec. 4454(a)(1)(A), in fifth

sentence after par. (9), substituted "includes a religious

nonmedical health care institution (as defined in subsection

(ss)(1) of this section)," for "includes a Christian Science

sanatorium operated, or listed and certified, by the First Church

of Christ, Scientist, Boston, Massachusetts," and inserted

"consistent with section 1395i-5 of this title" before the period.

Pub. L. 105-33, Sec. 4201(c)(1), substituted "critical access"

for "rural primary care" in last sentence.

Subsec. (h). Pub. L. 105-33, Sec. 4432(b)(5)(D)(i), substituted

"paragraphs (3), (6), and (7)" for "paragraphs (3) and (6)" in

introductory provisions.

Subsec. (h)(7). Pub. L. 105-33, Sec. 4432(b)(5)(D)(ii), inserted

", or by others under arrangements with them made by the facility"

after "skilled nursing facilities".

Subsec. (m). Pub. L. 105-33, Sec. 4612(a), inserted at end of

closing provisions "For purposes of paragraphs (1) and (4), the

term 'part-time or intermittent services' means skilled nursing and

home health aide services furnished any number of days per week as

long as they are furnished (combined) less than 8 hours each day

and 28 or fewer hours each week (or, subject to review on a

case-by-case basis as to the need for care, less than 8 hours each

day and 35 or fewer hours per week). For purposes of sections

1395f(a)(2)(C) and 1395n(a)(2)(A) of this title, 'intermittent'

means skilled nursing care that is either provided or needed on

fewer than 7 days each week, or less than 8 hours of each day for

periods of 21 days or less (with extensions in exceptional

circumstances when the need for additional care is finite and

predictable)."

Subsec. (n). Pub. L. 105-33, Sec. 4105(b)(1), inserted before

semicolon in first sentence ", and includes blood-testing strips

and blood glucose monitors for individuals with diabetes without

regard to whether the individual has Type I or Type II diabetes or

to the individual's use of insulin (as determined under standards

established by the Secretary in consultation with the appropriate

organizations)".

Subsec. (o). Pub. L. 105-33, Sec. 4312(b)(1)(D), inserted at end

of closing provisions "The Secretary may waive the requirement of a

surety bond under paragraph (7) in the case of an agency or

organization that provides a comparable surety bond under State

law."

Subsec. (o)(7), (8). Pub. L. 105-33, Sec. 4312(b)(1)(A)-(C),

added par. (7) and redesignated former par. (7) as (8).

Subsec. (p). Pub. L. 105-33, Sec. 4312(e)(2), inserted at end of

closing provisions "The Secretary may waive the requirement of a

surety bond under paragraph (4)(A)(v) in the case of a clinic or

agency that provides a comparable surety bond under State law."

Subsec. (p)(4)(A)(v). Pub. L. 105-33, Sec. 4312(e)(1), inserted

"and provides the Secretary on a continuing basis with a surety

bond in a form specified by the Secretary and in an amount that is

not less than $50,000," after "as the Secretary may find

necessary,".

Subsec. (r)(5). Pub. L. 105-33, Sec. 4513(a), struck out

"demonstrated by x-ray to exist" following "(to correct a

subluxation".

Subsec. (s)(2)(K)(i). Pub. L. 105-33, Secs. 4511(a)(2)(A)(i),

4512(a), struck out "(I) in a hospital, skilled nursing facility,

or nursing facility (as defined in section 1396r(a) of this title),

(II) as an assistant at surgery, or (III) in a rural area (as

defined in section 1395ww(d)(2)(D) of this title) that is

designated, under section 332(a)(1)(A) of the Public Health Service

Act, as a health professional shortage area," after "physician (as

so defined)" and inserted at end "and such services and supplies

furnished as incident to such services as would be covered under

subparagraph (A) if furnished incident to a physician's

professional service; and but only if no facility or other provider

charges or is paid any amounts with respect to the furnishing of

such services,".

Subsec. (s)(2)(K)(ii). Pub. L. 105-33, Sec. 4511(a)(1), amended

cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:

"services which would be physicians' services if furnished by a

physician (as defined in subsection (r)(1) of this section) and

which are performed by a nurse practitioner (as defined in

subsection (aa)(5) of this section) working in collaboration (as

defined in subsection (aa)(6) of this section) with a physician (as

defined in subsection (r)(1) of this section) in a skilled nursing

facility or nursing facility (as defined in section 1396r(a) of

this title) which the nurse practitioner is legally authorized to

perform by the State in which the services are performed,".

Subsec. (s)(2)(K)(iii), (iv). Pub. L. 105-33, Sec.

4511(a)(2)(A)(ii), struck out cls. (iii) and (iv) which read as

follows:

"(iii) services which would be physicians' services if furnished

by a physician (as defined in subsection (r)(1) of this section)

and which are performed by a nurse practitioner or clinical nurse

specialist (as defined in subsection (aa)(5) of this section)

working in collaboration (as defined in subsection (aa)(6) of this

section) with a physician (as defined in subsection (r)(1) of this

section) in a rural area (as defined in section 1395ww(d)(2)(D) of

this title) which the nurse practitioner or clinical nurse

specialist is authorized to perform by the State in which the

services are performed, and such services and supplies furnished as

an incident to such services as would be covered under subparagraph

(A) if furnished as an incident to a physician's professional

service, and

"(iv) such services and supplies furnished as an incident to

services described in clause (i) or (ii) as would be covered under

subparagraph (A) if furnished as an incident to a physician's

professional service;".

Subsec. (s)(2)(N) to (P). Pub. L. 105-33, Sec. 4103(a)(1), struck

out "and" at end of subpars. (N) and (O) and added subpar. (P).

Subsec. (s)(2)(R). Pub. L. 105-33, Sec. 4104(a)(1)(A), added

subpar. (R).

Subsec. (s)(2)(S). Pub. L. 105-33, Sec. 4105(a)(1)(A), added

subpar. (S).

Subsec. (s)(2)(T). Pub. L. 105-33, Sec. 4557(a), added subpar.

(T).

Subsec. (s)(12)(C). Pub. L. 105-33, Sec. 4106(a)(1)(A), struck

out "and" at end.

Subsec. (s)(14). Pub. L. 105-33, Sec. 4102(c), inserted "and

screening pelvic exam" after "screening pap smear".

Subsec. (s)(15) to (17). Pub. L. 105-33, Sec. 4106(a)(1)(B)-(D),

added par. (15) and redesignated former pars. (15) and (16) as (16)

and (17), respectively.

Subsec. (u). Pub. L. 105-33, Sec. 4201(c)(1), substituted

"critical access" for "rural primary care".

Subsec. (v)(1)(H)(i). Pub. L. 105-33, Sec. 4312(b)(2)(A),

substituted "the surety bond requirement described in subsection

(o)(7) of this section and the financial security requirement

described in subsection (o)(8) of this section" for "the financial

security requirement described in subsection (o)(7) of this

section".

Subsec. (v)(1)(H)(ii). Pub. L. 105-33, Sec. 4312(b)(2)(B),

substituted "the surety bond requirement described in subsection

(o)(7) of this section and the financial security requirement

described in subsection (o)(8) of this section apply" for "the

financial security requirement described in subsection (o)(7) of

this section applies".

Subsec. (v)(1)(L)(i). Pub. L. 105-33, Sec. 4602(a)(5), struck out

closing provisions which read as follows: "of the mean of the

labor-related and nonlabor per visit costs for free standing home

health agencies."

Subsec. (v)(1)(L)(i)(I). Pub. L. 105-33, Sec. 4602(a)(1), (2),

inserted "of the mean of the labor-related and nonlabor per visit

costs for freestanding home health agencies" before comma at end

and realigned margins.

Subsec. (v)(1)(L)(i)(II). Pub. L. 105-33, Sec. 4602(a)(1), (3),

substituted "of such mean," for ", or" at end and realigned

margins.

Subsec. (v)(1)(L)(i)(III). Pub. L. 105-33, Sec. 4602(a)(1), (4),

inserted "and before October 1, 1997," after "July 1, 1987,",

substituted "of such mean, or" for comma at end, and realigned

margins.

Subsec. (v)(1)(L)(i)(IV). Pub. L. 105-33, Sec. 4602(a)(5), added

subcl. (IV).

Subsec. (v)(1)(L)(iii). Pub. L. 105-33, Sec. 4604(b), substituted

"service is furnished" for "agency is located".

Pub. L. 105-33, Sec. 4602(b), inserted ", or on or after July 1,

1997, and before October 1, 1997" after "July 1, 1996".

Subsec. (v)(1)(L)(iv). Pub. L. 105-33, Sec. 4601(a), added cl.

(iv).

Subsec. (v)(1)(L)(v) to (vii). Pub. L. 105-33, Sec. 4602(c),

added cls. (v) to (vii).

Subsec. (v)(1)(O)(i). Pub. L. 105-33, Sec. 4404(a)(1), struck out

"and (if applicable) a return on equity capital" after "capital

indebtedness" and substituted "provider of services" for "hospital

or skilled nursing facility", "clause (iii)" for "clause (iv)", and

"the historical cost of the asset, as recognized under this

subchapter, less depreciation allowed, to the owner of record as of

August 5, 1997 (or, in the case of an asset not in existence as of

August 5, 1997, the first owner of record of the asset after August

5, 1997)." for "the lesser of the allowable acquisition cost of

such asset to the owner of record as of July 18, 1984 (or, in the

case of an asset not in existence as of such date, the first owner

of record of the asset after such date), or the acquisition cost of

such asset to the new owner."

Subsec. (v)(1)(O)(ii) to (iv). Pub. L. 105-33, Sec. 4404(a)(2),

(3), redesignated cls. (iii) and (iv) as (ii) and (iii),

respectively, and struck out former cl. (ii) which read as follows:

"Such regulations shall provide for recapture of depreciation in

the same manner as provided under the regulations in effect on June

1, 1984."

Subsec. (v)(1)(S)(ii)(I), (II). Pub. L. 105-33, Sec. 4522,

substituted "through 1999 and during fiscal year 2000 before

January 1, 2000" for "through 1998".

Subsec. (v)(1)(S)(ii)(III). Pub. L. 105-33, Sec. 4201(c)(1),

substituted "critical access" for "rural primary care".

Subsec. (v)(1)(T). Pub. L. 105-33, Sec. 4451, added subpar. (T).

Subsec. (v)(1)(U). Pub. L. 105-33, Sec. 4531(a)(1), added subpar.

(U).

Subsec. (v)(7)(D). Pub. L. 105-33, Sec. 4432(b)(5)(E), inserted

"subsections (a) through (c) of" before "section 1395yy of this

title".

Subsec. (v)(8). Pub. L. 105-33, Sec. 4320, added par. (8).

Subsec. (w). Pub. L. 105-33, Sec. 4201(c)(1), substituted

"critical access" for "rural primary care" wherever appearing.

Subsec. (y). Pub. L. 105-33, Sec. 4454(a)(1)(B)(i), substituted

"Extended care in religious nonmedical health care institutions"

for "Post-hospital extended care in Christian Science skilled

nursing facilities" in heading.

Subsec. (y)(1). Pub. L. 105-33, Sec. 4454(a)(1)(B)(iii), which

directed the amendment of this subsec. by inserting "consistent

with section 1395i-5 of this title" before the period, was executed

by making the insertion in par. (1) to reflect the probable intent

of Congress.

Pub. L. 105-33, Sec. 4454(a)(1)(B)(ii), substituted "includes a

religious nonmedical health care institution (as defined in

subsection (ss)(1) of this section)," for "includes a Christian

Science sanatorium operated, or listed and certified, by the First

Church of Christ, Scientist, Boston, Massachusetts,".

Subsec. (aa)(2). Pub. L. 105-33, Sec. 4205(d)(3)(A), in second

sentence of concluding provisions inserted before period at end "if

it is determined, in accordance with criteria established by the

Secretary in regulations, to be essential to the delivery of

primary care services that would otherwise be unavailable in the

geographic area served by the clinic".

Pub. L. 105-33, Sec. 4205(d)(1), (2), in cl. (i) of first

sentence of concluding provisions substituted "Bureau of the

Census) and in which there are insufficient numbers of needed

health care practitioners (as determined by the Secretary), and

that, within the previous 3-year period, has been designated" for

"Bureau of the Census) and that is designated" and "personal health

services or designated by the Secretary" for "personal health

services, or that is designated by the Secretary".

Subsec. (aa)(2)(I). Pub. L. 105-33, Sec. 4205(b)(1), amended

subpar. (I) generally. Prior to amendment, subpar. (I) read as

follows: "has appropriate procedures for review of utilization of

clinic services to the extent that the Secretary determines to be

necessary and feasible;".

Subsec. (aa)(5). Pub. L. 105-33, Sec. 4511(d), designated

existing provisions as subpar. (A), substituted "The term

'physician assistant' and the term 'nurse practitioner' mean, for

purposes of this subchapter, a physician assistant or nurse

practitioner who performs" for "The term 'physician assistant', the

term 'nurse practitioner', and the term 'clinical nurse specialist'

mean, for purposes of this subchapter, a physician assistant, nurse

practitioner, or clinical nurse specialist who performs", and added

subpar. (B).

Subsec. (aa)(7)(B). Pub. L. 105-33, Sec. 4205(c)(1), inserted

before period at end ", or if the facility has not yet been

determined to meet the requirements (including subparagraph (J) of

the first sentence of paragraph (2)) of a rural health clinic".

Subsec. (cc)(2). Pub. L. 105-33, Sec. 4312(d)(4), inserted

concluding provisions.

Subsec. (cc)(2)(I), (J). Pub. L. 105-33, Sec. 4312(d)(1)-(3),

added subpar. (I) and redesignated former subpar. (I) as (J).

Subsec. (dd)(1)(I). Pub. L. 105-33, Sec. 4444(a), added subpar.

(I).

Subsec. (dd)(2)(A)(ii)(I). Pub. L. 105-33, Sec. 4445(1),

substituted "subparagraphs (A), (C), and (H)" for "subparagraphs

(A), (C), (F), and (H)".

Subsec. (dd)(2)(B)(i). Pub. L. 105-33, Sec. 4445(2), in

concluding provisions, inserted "or, in the case of a physician

described in subclause (I), under contract with" after "employed

by".

Subsec. (dd)(5)(B). Pub. L. 105-33, Sec. 4446(1), inserted "or

(C)" after "subparagraph (A)" in two places.

Subsec. (dd)(5)(C). Pub. L. 105-33, Sec. 4446(2), added subpar.

(C).

Subsec. (ee)(2)(D). Pub. L. 105-33, Sec. 4321(a)(1), inserted

before period at end ", including the availability of home health

services through individuals and entities that participate in the

program under this subchapter and that serve the area in which the

patient resides and that request to be listed by the hospital as

available".

Subsec. (ee)(2)(H). Pub. L. 105-33, Sec. 4321(a)(2), added

subpar. (H).

Subsec. (mm). Pub. L. 105-33, Sec. 4201(c)(2), amended heading

and text of subsec. (mm) generally. Prior to amendment, text read

as follows:

"(1) The term 'rural primary care hospital' means a facility

designated by the Secretary as a rural primary care hospital under

section 1395i-4(i)(2) of this title.

"(2) The term 'inpatient rural primary care hospital services'

means items and services, furnished to an inpatient of a rural

primary care hospital by such a hospital, that would be inpatient

hospital services if furnished to an inpatient of a hospital by a

hospital.

"(3) The term 'outpatient rural primary care hospital services'

means medical and other health services furnished by a rural

primary care hospital."

Subsec. (nn). Pub. L. 105-33, Sec. 4102(a), substituted

"Screening pap smear; screening pelvic exam" for "Screening pap

smear" in heading, designated existing provisions as par. (1),

inserted "or vaginal" after "cervical" in two places, substituted

"3 years, or during the preceding year in the case of a woman

described in paragraph (3)." for "3 years (or such shorter period

as the Secretary may specify in the case of a woman who is at high

risk of developing cervical or vaginal cancer (as determined

pursuant to factors identified by the Secretary)).", and added

pars. (2) and (3).

Subsec. (oo). Pub. L. 105-33, Sec. 4103(a)(2), added subsec.

(oo).

Subsec. (pp). Pub. L. 105-33, Sec. 4104(a)(1)(B), added subsec.

(pp).

Subsec. (qq). Pub. L. 105-33, Sec. 4105(a)(1)(B), added subsec.

(qq).

Subsec. (rr). Pub. L. 105-33, Sec. 4106(a)(2), added subsec.

(rr).

Subsec. (ss). Pub. L. 105-33, Sec. 4454(a)(1)(C), added subsec.

(ss).

Subsec. (tt). Pub. L. 105-33, Sec. 4611(b), added subsec. (tt).

1996 - Subsec. (aa)(4)(A)(i). Pub. L. 104-299 substituted

"section 330 (other than subsection (h))" for "section 329, 330, or

340".

Subsec. (aa)(4)(A)(ii)(II). Pub. L. 104-299 which directed

amendment of subcl. (I) by substituting "section 330 (other than

subsection (h))" for "section 329, 330, or 340", was executed to

subcl. (II) to reflect the probable intent of Congress.

1994 - Subsec. (a)(1). Pub. L. 103-432, Sec. 102(g)(4)(A),

substituted "inpatient hospital services, inpatient rural primary

care hospital services" for "inpatient hospital services".

Subsec. (a)(2). Pub. L. 103-432, Sec. 102(g)(4)(B), substituted

"hospital or rural primary care hospital" for "hospital".

Subsec. (b)(3). Pub. L. 103-432, Sec. 147(f)(3), made technical

amendment to Pub. L. 101-508, Sec. 4157(a). See 1990 Amendment note

below.

Subsec. (b)(4). Pub. L. 103-432, Sec. 147(f)(3), made technical

amendment to Pub. L. 101-508, Sec. 4157(a). See 1990 Amendment note

below.

Pub. L. 103-432, Sec. 147(e)(4), substituted "clauses (i) or

(iii) of subsection (s)(2)(K) of this section" for "subsection

(s)(2)(K)(i) of this section".

Subsec. (e)(4). Pub. L. 103-432, Sec. 104, substituted

"physician, except that a patient receiving qualified psychologist

services (as defined in subsection (ii) of this section) may be

under the care of a clinical psychologist with respect to such

services to the extent permitted under State law;" for

"physician;".

Subsec. (h)(3). Pub. L. 103-432, Sec. 146(b)(1), substituted "or

occupational therapy or speech-language pathology services" for ",

occupational, or speech therapy".

Subsec. (m)(2). Pub. L. 103-432, Sec. 146(b)(2), substituted "or

occupational therapy or speech-language pathology services" for ",

occupational, or speech therapy".

Subsec. (m)(5). Pub. L. 103-432, Sec. 147(f)(6)(B)(ii),

substituted "and a covered osteoporosis drug (as defined in

subsection (kk) of this section), but excluding other drugs" for

"but excluding drugs".

Subsec. (p). Pub. L. 103-432, Sec. 146(b)(3), substituted

"speech-language pathology services" for "speech pathology

services" after "term 'outpatient physical therapy services' also

includes" in third sentence of closing provisions.

Subsec. (s)(2)(K)(iii). Pub. L. 103-432, Sec. 147(e)(1), made an

amendment identical to that made by Pub. L. 101-508, Sec.

4161(a)(5)(A), substituting "subsection (aa)(5)" for "subsection

(aa)(3)" and "subsection (aa)(6)" for "subsection (aa)(4)".

Subsec. (s)(2)(N). Pub. L. 103-432, Sec. 147(f)(6)(B)(iii)(I),

inserted "and" at end.

Subsec. (s)(2)(O), (P). Pub. L. 103-432, Sec.

147(f)(6)(B)(iii)(II), redesignated subpar. (P) as (O) and struck

out former subpar. (O) which read as follows: "a covered

osteoporosis drug and its administration (as defined in subsection

(jj) of this section) furnished on or after January 1, 1991, and on

or before December 31, 1995; and".

Subsec. (s)(3). Pub. L. 103-432, Sec. 145(b), inserted "and

including diagnostic mammography if conducted by a facility that

has a certificate (or provisional certificate) issued under section

354 of the Public Health Service Act" after "necessary".

Subsec. (v)(1)(L)(iii). Pub. L. 103-432, Sec. 158(a)(1),

substituted "and determined using the survey of the most recent

available wages and wage-related costs of hospitals" for "as of

such date to hospitals".

Subsec. (aa)(2). Pub. L. 103-432, Sec. 147(f)(4)(A), in last

sentence of closing provisions, substituted "approval as such a

clinic" for "certification as such a clinic" and "Secretary's

approval or disapproval" for "the Secretary's approval or

disapproval of the certification".

Subsec. (aa)(5). Pub. L. 103-432, Sec. 147(e)(5), substituted

"this subchapter" for "this chapter".

Subsec. (cc)(1)(B). Pub. L. 103-432, Sec. 146(b)(4), substituted

"speech-language pathology services" for "speech pathology

services".

Subsec. (dd)(1)(B). Pub. L. 103-432, Sec. 146(b)(5), substituted

"therapy, or speech-language pathology services" for "therapy or

speech-language pathology".

Subsec. (ee)(2)(D). Pub. L. 103-432, Sec. 107(a), inserted ",

including hospice services," after "post-hospital services".

Subsec. (jj). Pub. L. 103-432, Sec. 147(f)(6)(E), redesignated

subsec. (jj), defining "covered osteoporosis drug", as (kk).

Pub. L. 103-432, Sec. 147(f)(6)(A), (B)(i), amended subsec. (jj),

defining "covered osteoporosis drug", in introductory provisions,

by striking out "a bone fracture related to" before

"post-menopausal osteoporosis" and substituting "individual by a

home health agency if" for "individual if", and in par. (1), by

substituting "individual has suffered a bone fracture related to

post-menopausal osteoporosis and that the individual" for

"patient".

Subsec. (kk). Pub. L. 103-432, Sec. 147(f)(6)(E), redesignated

subsec. (jj), defining "covered osteoporosis drug", as (kk).

Subsec. (ll). Pub. L. 103-432, Sec. 146(a), added subsec. (ll).

1993 - Subsec. (s)(2)(J). Pub. L. 103-66, Sec. 13565, substituted

"subchapter, but only in the case of drugs furnished - " and cls.

(i) to (v) for "subchapter, within 1 year after the date of the

transplant procedure;".

Subsec. (s)(2)(P). Pub. L. 103-66, Sec. 13566(b), substituted

"dialysis" for "home dialysis" and realigned margin.

Subsec. (s)(2)(Q). Pub. L. 103-66, Sec. 13553(a), added subpar.

(Q).

Subsec. (t). Pub. L. 103-66, Sec. 13553(b), designated existing

provisions as par. (1), inserted "and paragraph (2)", and added

par. (2).

Subsec. (v)(1)(B). Pub. L. 103-66, Sec. 13503(c)(1), amended

subpar. (B) generally. Prior to amendment, subpar. (B) read as

follows: "Such regulations in the case of extended care services

furnished by proprietary facilities shall include provision for

specific recognition of a reasonable return on equity capital,

including necessary working capital, invested in the facility and

used in the furnishing of such services, in lieu of other

allowances to the extent that they reflect similar items. The rate

of return recognized pursuant to the preceding sentence for

determining the reasonable cost of any services furnished in any

cost reporting period shall be equal to the average of the rates of

interest, for each of the months any part of which is included in

the period, on obligations issued for purchase by the Federal

Hospital Insurance Trust Fund."

Subsec. (v)(1)(L)(ii). Pub. L. 103-66, Sec. 13564(b)(1), struck

out ", with appropriate adjustment for administrative and general

costs of hospital-based agencies" after "discipline specific

basis".

Subsec. (v)(1)(L)(iii). Pub. L. 103-66, Sec. 13564(a)(2),

substituted "thereafter (but not for cost reporting periods

beginning on or after July 1, 1994, and before July 1, 1996)" for

"thereafter".

Subsec. (v)(1)(S)(ii)(I). Pub. L. 103-66, Sec. 13521, substituted

"fiscal years 1992 through 1998" for "fiscal year 1992, 1993, 1994,

or 1995".

Subsec. (v)(1)(S)(ii)(II). Pub. L. 103-66, Sec. 13522,

substituted "fiscal years 1991 through 1998" for "fiscal years

1991, 1992, 1993, 1994, or 1995".

Subsec. (aa)(4)(D). Pub. L. 103-66, Sec. 13556(a), added subpar.

(D).

Subsec. (gg)(2). Pub. L. 103-66, Sec. 13554(a), substituted a

period for ", and performs services in the area of management of

the care of mothers and babies throughout the maternity cycle."

1990 - Subsec. (b)(3). Pub. L. 101-508, Sec. 4157(a)(1), as

amended by Pub. L. 103-432, Sec. 147(f)(3), struck out "(including

clinical psychologist (as defined by the Secretary))" after "the

hospital or by others".

Subsec. (b)(4). Pub. L. 101-508, Sec. 4157(a)(2), as amended by

Pub. L. 103-432, Sec. 147(f)(3), substituted ", services described

by subsection (s)(2)(K)(i) of this section, certified nurse-midwife

services, qualified psychologist services, and services of a

certified registered nurse anesthetist; and" for "and anesthesia

services provided by a certified registered nurse anesthetist;

and".

Subsec. (n). Pub. L. 101-508, Sec. 4152(a)(2), inserted at end

"With respect to a seat-lift chair, such term includes only the

seat-lift mechanism and does not include the chair."

Subsec. (s)(2)(E). Pub. L. 101-508, Sec. 4161(a)(1), inserted

"and Federally qualified health center services" after "clinic

services".

Subsec. (s)(2)(H)(i). Pub. L. 101-508, Sec. 4161(a)(5)(A),

substituted "subsection (aa)(5)" for "subsection (aa)(3)".

Subsec. (s)(2)(K)(i). Pub. L. 101-597 substituted "health

professional shortage area" for "health manpower shortage area".

Pub. L. 101-508, Sec. 4161(a)(5)(A), substituted "subsection

(aa)(5)" for "subsection (aa)(3)".

Subsec. (s)(2)(K)(ii). Pub. L. 101-508, Sec. 4161(a)(5)(A),

substituted "subsection (aa)(5)" for "subsection (aa)(3)" and

"subsection (aa)(6)" for "subsection (aa)(4)".

Subsec. (s)(2)(K)(iii). Pub. L. 101-508, Sec. 4161(a)(5)(A),

substituted "subsection (aa)(5)" for "subsection (aa)(3)" and

"subsection (aa)(6)" for "subsection (aa)(4)".

Pub. L. 101-508, Sec. 4155(a)(3), added cl. (iii). Former cl.

(iii) redesignated (iv).

Subsec. (s)(2)(K)(iv). Pub. L. 101-508, Sec. 4155(a)(2),

redesignated cl. (iii) as (iv).

Subsec. (s)(2)(O). Pub. L. 101-508, Sec. 4156(a)(1), added

subpar. (O).

Subsec. (s)(2)(P). Pub. L. 101-508, Sec. 4201(d)(1), added

subpar. (P).

Subsec. (s)(8). Pub. L. 101-508, Sec. 4153(b)(2)(A), inserted ",

and including one pair of conventional eyeglasses or contact lenses

furnished subsequent to each cataract surgery with insertion of an

intraocular lens" after "such devices".

Subsec. (s)(13). Pub. L. 101-508, Sec. 4163(a)(1), added par.

(13).

Subsec. (v)(1)(E). Pub. L. 101-508, Sec. 4008(h)(2)(A)(i),

substituted "the costs (including the costs of services required to

attain or maintain the highest practicable physical, mental, and

psychosocial well-being of each resident eligible for benefits

under this subchapter) of such facilities" for "the costs of such

facilities" in second sentence.

Subsec. (v)(1)(L)(iii). Pub. L. 101-508, Sec. 4207(d)(1),

formerly Sec. 4027(d)(1), as renumbered by Pub. L. 103-432, Sec.

160(d)(4), amended cl. (iii) generally. Prior to amendment, cl.

(iii) read as follows: "In establishing limits under this

subparagraph, the Secretary shall -

"(I) utilize a wage index that is based on verified wage data

obtained from home health agencies, and

"(II) base such limits on the most recent verified wage data

available, which data may be for cost reporting periods beginning

no earlier than July 1, 1985.

In the case of a home health agency that refuses to provide data,

or deliberately provides false data, respecting wages for purposes

of this clause upon the request of the Secretary, the Secretary may

withhold up to 5 percent of the amount of the payments otherwise

payable to the agency under this subchapter until such date as the

Secretary determines that such data has been satisfactorily

provided."

Subsec. (v)(1)(S)(ii)(I). Pub. L. 101-508, Sec. 4151(a)(1),

inserted before period at end ", by 15 percent for payments

attributable to portions of cost reporting periods occurring during

fiscal year 1991, and by 10 percent for payments attributable to

portions of cost reporting periods occurring during fiscal year

1992, 1993, 1994, or 1995".

Subsec. (v)(1)(S)(ii)(II). Pub. L. 101-508, Sec. 4151(b)(1)(D),

added subcl. (II). Former subcl. (II) redesignated (III).

Pub. L. 101-508, Sec. 4151(b)(1)(A), substituted "Subclauses (I)

and (II)" for "Subclause (I)" and "costs of hospital outpatient

services provided by any hospital" for "capital-related costs of

any hospital".

Pub. L. 101-508, Sec. 4151(a)(2), substituted "section

1395ww(d)(5)(D)(iii) of this title or a rural primary care hospital

(as defined in subsection (mm)(1) of this section)" for "section

1395ww(d)(5)(D)(iii) of this title)".

Subsec. (v)(1)(S)(ii)(III). Pub. L. 101-508, Sec. 4151(b)(1)(C),

redesignated former subcl. (II) as (III). Former subcl. (III)

redesignated (IV).

Pub. L. 101-508, Sec. 4151(b)(1)(B), substituted "subclauses (I)

and (II)" for "subclause (I)" and "the costs reflected" for

"capital-related costs reflected".

Subsec. (v)(1)(S)(ii)(IV). Pub. L. 101-508, Sec. 4151(b)(1)(C),

redesignated subcl. (III) as (IV).

Subsec. (aa). Pub. L. 101-508, Sec. 4161(a)(2)(A), inserted "and

Federally qualified health center services" after "clinic services"

in heading.

Subsec. (aa)(1)(B). Pub. L. 101-508, Sec. 4161(a)(5)(B),

substituted "paragraph (5)" for "paragraph (3)".

Subsec. (aa)(2). Pub. L. 101-597 substituted "health professional

shortage area" for "health manpower shortage area" in second

sentence.

Pub. L. 101-508, Sec. 4161(b)(1), inserted at end "If a State

agency has determined under section 1395aa(a) of this title that a

facility is a rural health clinic and the facility has applied to

the Secretary for certification as such a clinic, the Secretary

shall notify the facility of the the Secretary's approval or

disapproval of the certification not later than 60 days after the

date of the State agency determination or the application

(whichever is later)."

Subsec. (aa)(3). Pub. L. 101-508, Sec. 4161(a)(2)(C), added par.

(3). Former par. (3) redesignated (5).

Pub. L. 101-508, Sec. 4161(a)(2)(B), which directed amendment of

par. (3) by substituting "the previous provisions of this

subsection" for "paragraphs (1) and (2)", could not be executed

because the words "paragraphs (1) and (2)" did not appear after

amendment by Pub. L. 101-508, Sec. 4155(d). See below.

Pub. L. 101-508, Sec. 4155(d), substituted "The term 'physician

assistant', the term 'nurse practitioner', and the term 'clinical

nurse specialist' mean, for purposes of this chapter, a physician

assistant, nurse practitioner, or clinical nurse specialist who

performs" for "The term 'physician assistant' and the term 'nurse

practitioner' mean, for the purposes of paragraphs (1) and (2), a

physician assistant or nurse practitioner who performs".

Subsec. (aa)(4) to (6). Pub. L. 101-508, Sec. 4161(a)(2)(B), (C),

added par. (4) and redesignated former pars. (3) and (4) as (5) and

(6), respectively.

Subsec. (aa)(7). Pub. L. 101-508, Sec. 4161(b)(2), added par.

(7).

Subsec. (ff)(3). Pub. L. 101-508, Sec. 4162(a), designated

existing provision as subpar. (A), substituted "outpatients or by a

community mental health center (as defined in subparagraph (B)),"

for "outpatients", and added subpar. (B).

Subsec. (jj). Pub. L. 101-508, Sec. 4163(a)(2), added subsec.

(jj) defining "screening mammography".

Pub. L. 101-508, Sec. 4156(a)(2), added subsec. (jj) defining

"covered osteoporosis drug".

1989 - Subsec. (a). Pub. L. 101-234, Sec. 101(a), repealed Pub.

L. 100-360, Sec. 104(d)(4)(A), and provided that the provisions of

law amended or repealed by such section are restored or revived as

if such section had not been enacted, see 1988 Amendment note

below.

Subsec. (e). Pub. L. 101-239, Sec. 6003(g)(3)(D)(x)(I), inserted

at end "The term 'hospital' does not include, unless the context

otherwise requires, a rural primary care hospital (as defined in

subsection (mm)(1) of this section)."

Pub. L. 101-234, Sec. 101(a), repealed Pub. L. 100-360, Sec.

104(d)(4)(B), and provided that the provisions of law amended or

repealed by such section are restored or revived as if such section

had not been enacted, see 1988 Amendment note below.

Subsec. (i). Pub. L. 101-234, Sec. 201(a), repealed Pub. L.

100-360, Sec. 104(d)(4)(C), and provided that the provisions of law

amended or repealed by such section are restored or revived as if

such section had not been enacted, see 1988 Amendment note below.

Subsec. (m). Pub. L. 101-234, Sec. 201(a), repealed Pub. L.

100-360, Sec. 206(a), and provided that the provisions of law

amended or repealed by such section are restored or revived as if

such section had not been enacted, see 1988 Amendment note below.

Subsec. (m)(5). Pub. L. 101-239, Sec. 6112(e)(1), amended par.

(5) generally. Prior to amendment, par. (5) read as follows:

"medical supplies (other than drugs and biologicals) and durable

medical equipment, while under such a plan;".

Subsec. (s). Pub. L. 101-239, Sec. 6141(a)(1), substituted ",

including a laboratory that is part of" for "which is independent

of a physician's office, a laboratory not independent of a

physician's office that has a volume of clinical diagnostic

laboratory tests exceeding 5,000 per year," in provisions following

par. (14).

Subsec. (s)(2)(H)(ii). Pub. L. 101-239, Sec. 6113(b)(2)(A),

substituted "subsection (hh)(2)" for "subsection (hh)".

Subsec. (s)(2)(J). Pub. L. 101-239, Sec. 6114(a)(1), struck out

"and" at end.

Pub. L. 101-234, Sec. 201(a), repealed Pub. L. 100-360, Sec.

202(a)(1), and provided that the provisions of law amended or

repealed by such section are restored or revived as if such section

had not been enacted, see 1988 Amendment note below.

Subsec. (s)(2)(K). Pub. L. 101-239, Sec. 6114(a)(2), added cl.

(ii), redesignated former cl. (ii) as (iii), and substituted "to

services described in clause (i) or (ii)" for "to such services" in

cl. (iii).

Subsec. (s)(2)(N). Pub. L. 101-239, Sec. 6113(b)(1), added

subpar. (N).

Subsec. (s)(12). Pub. L. 101-239, Sec. 6131(a)(2), inserted "with

inserts" after "custom molded shoes" in introductory provisions.

Subsec. (s)(13). Pub. L. 101-234, Sec. 201(a), which repealed

Pub. L. 100-360, Sec. 204(a)(1)(B)-(D), and directed that the

provisions of law amended or repealed by such section are restored

or revived as if such section had not been enacted, was executed by

striking out par. (13) as added by Pub. L. 100-360, Sec.

204(a)(1)(B)-(D), but former par. (13) which was redesignated (14)

was not restored in view of intervening redesignation as (15) by

Pub. L. 101-239, Sec. 6115(a)(1)(C), see 1988 Amendment note below.

Subsec. (s)(14). Pub. L. 101-239, Sec. 6115(a)(1)(A), (B), (D),

added par. (14). Former par. (14) redesignated (15).

Pub. L. 101-234, Sec. 201(a), which repealed Pub. L. 100-360,

Sec. 204(a)(1)(A), and directed that the provisions of law amended

or repealed by such section are restored or revived as if such

section had not been enacted, was not executed in view of

intervening redesignation of par. (14) as (15) by Pub. L. 101-239,

Sec. 6115(a)(1)(C), see 1988 Amendment note below.

Subsec. (s)(15). Pub. L. 101-239, Sec. 6115(a)(1)(C),

redesignated par. (14) as (15). Former par. (15) redesignated (16).

Pub. L. 101-234, Sec. 201(a), which repealed Pub. L. 100-360,

Sec. 204(a)(1)(A), and directed that the provisions of law amended

or repealed by such section are restored or revived as if such

section had not been enacted, was not executed in view of

intervening redesignation of par. (15) as (16) by Pub. L. 101-239,

Sec. 6115(a)(1)(C), see 1988 Amendment note below.

Subsec. (s)(16). Pub. L. 101-239, Sec. 6141(a)(2), (3), added

subpar. (A) and designated existing provisions as subpar. (B).

Pub. L. 101-239, Sec. 6115(a)(1)(C), redesignated par. (15) as

(16).

Subsec. (t). Pub. L. 101-234, Sec. 201(a), repealed Pub. L.

100-360, Sec. 202(a)(2), and provided that the provisions of law

amended or repealed by such section are restored or revived as if

such section had not been enacted, see 1988 Amendment note below.

Subsec. (u). Pub. L. 101-239, Sec. 6003(g)(3)(C)(i), inserted

"rural primary care hospital," after "hospital,".

Pub. L. 101-234, Sec. 201(a), repealed Pub. L. 100-360, Sec.

203(e)(1), and provided that the provisions of law amended or

repealed by such section are restored or revived as if such section

had not been enacted, see 1988 Amendment note below.

Subsec. (v)(1)(G)(i). Pub. L. 101-234, Sec. 101(a), repealed Pub.

L. 100-360, Sec. 104(d)(4)(D), and provided that the provisions of

law amended or repealed by such section are restored or revived as

if such section had not been enacted, see 1988 Amendment note

below.

Subsec. (v)(1)(S). Pub. L. 101-239, Sec. 6110, designated

existing provisions as cl. (i) and added cl. (ii).

Subsec. (v)(2)(A), (3). Pub. L. 101-234, Sec. 101(a), repealed

Pub. L. 100-360, Sec. 104(d)(4)(D), and provided that the

provisions of law amended or repealed by such section are restored

or revived as if such section had not been enacted, see 1988

Amendment note below.

Subsec. (w)(1). Pub. L. 101-239, Sec. 6003(g)(3)(D) (x)(II),

inserted "rural primary care hospital," after "hospital,".

Subsec. (w)(2). Pub. L. 101-239, Sec. 6003(g)(3)(D) (x)(III),

substituted "hospital or rural primary care hospital" for

"hospital" in six places.

Subsec. (y). Pub. L. 101-234, Sec. 101(a), repealed Pub. L.

100-360, Sec. 104(d)(4)(E), and provided that the provisions of law

amended or repealed by such section are restored or revived as if

such section had not been enacted, see 1988 Amendment note below.

Subsec. (aa)(1)(B). Pub. L. 101-239, Sec. 6213(b), substituted

"(as defined in paragraph (3)), by" for "(as defined in paragraph

(3)), or by" and inserted "or by a clinical social worker (as

defined in subsection (hh)(1) of this section)," after

"Secretary)".

Subsec. (aa)(2). Pub. L. 101-239, Sec. 6213(c), in second

sentence substituted "designated by the chief executive officer of

the State and certified by the Secretary as an area with a shortage

of personal health services, or that is designated by the

Secretary" for "designated by the Secretary", "section 330(b)(3) or

1302(7) of the Public Health Service Act," for "section 1302(7) of

the Public Health Service Act or", and "medical care manpower,

(III) as a high impact area described in section 329(a)(5) of that

Act, or (IV) as an area which includes a population group which the

Secretary determines has a health manpower shortage under section

332(a)(1)(B) of that Act," for "medical care manpower,".

Subsec. (aa)(2)(J), (K). Pub. L. 101-239, Sec. 6213(a), added

subpar. (J) and redesignated former subpar. (J) as (K).

Subsec. (aa)(4). Pub. L. 101-239, Sec. 6114(d), added par. (4).

Subsec. (hh). Pub. L. 101-239, Sec. 6113(b)(2)(B), inserted ";

clinical social worker services" after "social worker" in heading,

redesignated existing provisions as par. (1), redesignated former

pars. (1) to (3) as subpars. (A) to (C), respectively, in subpar.

(C), redesignated former subpars. (A) and (B) as cls. (i) and (ii),

respectively, in cl. (ii), redesignated former cls. (i) and (ii) as

subcls. (I) and (II), respectively, and added par. (2).

Subsec. (ii). Pub. L. 101-239, Sec. 6113(a), struck out "on-site

at a community mental health center (as such term is used in the

Public Health Service Act), and such services that are necessarily

furnished off-site (other than at an off-site office of such

psychologist) as part of a treatment plan because of the inability

of the individual furnished such services to travel to the center

by reason of physical or mental impairment, because of

institutionalization, or because of similar circumstances of the

individual," after "as defined by the Secretary)".

Subsecs. (jj) to (ll). Pub. L. 101-234, Sec. 201(a), repealed

Pub. L. 100-360, Secs. 203(b), 204(a)(2), 205(b), and provided that

the provisions of law amended or repealed by such sections are

restored or revived as if such sections had not been enacted, see

1988 Amendment notes below.

Subsec. (mm). Pub. L. 101-239, Sec. 6003(g)(3)(A), added subsec.

(mm).

Subsec. (mm)(3). Pub. L. 101-239, Sec. 6116(a)(1), added par.

(3).

Subsec. (nn). Pub. L. 101-239, Sec. 6115(a)(2), added subsec.

(nn).

1988 - Subsec. (a). Pub. L. 100-360, Sec. 104(d)(4)(A), struck

out subsec. (a) which defined "spell of illness".

Subsec. (a)(2). Pub. L. 100-360, Sec. 411(l)(1)(B)(i), (ii),

redesignated and amended Pub. L. 100-203, Sec. 4201(d)(1), see 1987

Amendment note below.

Subsec. (e). Pub. L. 100-360, Sec. 104(d)(4)(B), substituted "and

paragraph (7) of this subsection" for "paragraph (7) of this

subsection, and subsection (i) of this section" in introductory

provisions, struck out second sentence which read as follows: "For

purposes of subsection (a)(2) of this section, such term includes

any institution which meets the requirements of paragraph (1) of

this subsection.", substituted "and section 1395f(f)(2) of this

title" for "section 1395f(f)(2) of this title, and subsection (i)

of this section" in third sentence, and struck out ", except for

purposes of subsection (a)(2) of this section," after "such term

shall not" in fifth sentence.

Subsec. (i). Pub. L. 100-360, Sec. 104(d)(4)(C), struck out

subsec. (i) which defined "post-hospital extended care services".

Subsec. (m). Pub. L. 100-360, Sec. 206(a), inserted at end "For

purposes of paragraphs (1) and (4) and sections 1395f(a)(2)(C) and

1395n(a)(2)(A) of this title, nursing care and home health aide

services shall be considered to be provided or needed on an

'intermittent' basis if they are provided or needed less than 7

days each week and, in the case they are provided or needed for 7

days each week, if they are provided or needed for a period of up

to 38 consecutive days."

Subsec. (n). Pub. L. 100-360, Sec. 411(l)(1)(C), as added by Pub.

L. 100-485, Sec. 608(d)(27)(B), added Pub. L. 100-203, Sec.

4201(d)(5), see 1987 Amendment note below.

Pub. L. 100-360, Sec. 411(l)(1)(B)(iii), added Pub. L. 100-203,

Sec. 4201(d)(2), see 1987 Amendment note below.

Pub. L. 100-360, Sec. 411(d)(1)(B)(i), inserted "; except that

such term does not include such equipment furnished by a supplier

who has used, for the demonstration and use of specific equipment,

an individual who has not met such minimum training standards as

the Secretary may establish with respect to the demonstration and

use of such specific equipment" before period at end.

Subsec. (p). Pub. L. 100-647, Sec. 8424(a), inserted at end

"Nothing in this subsection shall be construed as requiring, with

respect to outpatients who are not entitled to benefits under this

subchapter, a physical therapist to provide outpatient physical

therapy services only to outpatients who are under the care of a

physician or pursuant to a plan of care established by a

physician."

Subsec. (s). Pub. L. 100-360, Sec. 411(g)(3)(H), inserted a comma

before "year" in provisions immediately preceding par. (13).

Subsec. (s)(2)(H)(ii). Pub. L. 100-360, Sec. 411(h)(5)(A),

amended Pub. L. 100-203, Sec. 4074(a), see 1987 Amendment note

below.

Subsec. (s)(2)(J). Pub. L. 100-360, Sec. 202(a)(1), amended

subpar. (J) generally, substituting "covered outpatient drugs (as

defined in subsection (t) of this section); and" for former

provision which related to prescription drugs used in

immunosuppressive therapy.

Subsec. (s)(2)(K)(i). Pub. L. 100-360, Sec. 411(h)(6), amended

Pub. L. 100-203, Sec. 4076(a), see 1987 Amendment note below.

Subsec. (s)(2)(K)(i)(I). Pub. L. 100-485, Sec. 608(d)(23)(B),

substituted "nursing facility (as defined in section 1396r(a) of

this title)" for "intermediate care facility (as defined in section

1396d(c) of this title)".

Subsec. (s)(2)(M). Pub. L. 100-360, Sec. 411(h)(7)(A), made

technical amendment to directory language of Pub. L. 100-203, Sec.

4077(b)(1), see 1987 Amendment note below.

Subsec. (s)(10)(A). Pub. L. 100-360, Sec. 411(h)(2), inserted ",

subject to section 4071(b) of the Omnibus Budget Reconciliation Act

of 1987," before "influenza vaccine".

Subsec. (s)(12). Pub. L. 100-360, Sec. 411(h)(3)(A), inserted

"subject to section 4072(e) of the Omnibus Budget Reconciliation

Act of 1987," in introductory provisions.

Subsec. (s)(13). Pub. L. 100-360, Sec. 204(a)(1)(B)-(D), added

par. (13) relating to screening mammography (as defined in

subsection (kk) of this section). Former par. (13) redesignated

(14).

Subsec. (s)(14). Pub. L. 100-360, Sec. 204(a)(1)(A), redesignated

par. (13) as (14). Former par. (14) redesignated (15).

Subsec. (s)(15). Pub. L. 100-360, Sec. 411(i)(4)(C)(iii), amended

directory language of Pub. L. 100-203, Sec. 4085(i)(11), to correct

an error, see 1987 Amendment note below.

Pub. L. 100-360, Sec. 204(a)(1)(A), redesignated par. (14) as

(15).

Subsec. (s)(16). Pub. L. 100-360, Sec. 411(i)(4)(C)(iii), amended

directory language of Pub. L. 100-203, Sec. 4085(i)(11), to correct

an error, see 1987 Amendment note below.

Subsec. (t). Pub. L. 100-360, Sec. 202(a)(2), designated existing

provisions as par. (1), inserted "and paragraph (2)", and added

pars. (2) to (4) defining "covered outpatient drug" and "covered

home IV drug".

Subsec. (u). Pub. L. 100-360, Sec. 203(e)(1), inserted "home

intravenous drug therapy provider," after "hospice program,".

Subsec. (v)(1)(G)(i). Pub. L. 100-360, Sec. 104(d)(4)(D), struck

out "post-hospital" before "extended care services" in four places.

Subsec. (v)(1)(L)(iii). Pub. L. 100-360, Sec. 411(d)(5)(A),

substituted "verified" for "audited" in subcls. (I) and (II) and

inserted at end "In the case of a home health agency that refuses

to provide data, or deliberately provides false data, respecting

wages for purposes of this clause upon the request of the

Secretary, the Secretary may withhold up to 5 percent of the amount

of the payments otherwise payable to the agency under this

subchapter until such date as the Secretary determines that such

data has been satisfactorily provided."

Subsec. (v)(2)(A), (3). Pub. L. 100-360, Sec. 104(d)(4)(D),

struck out "post-hospital" before "extended care services".

Subsec. (y). Pub. L. 100-360, Sec. 104(d)(4)(E)(i), substituted

"Extended care" for "Post-hospital extended care" in heading.

Subsec. (y)(1). Pub. L. 100-360, Sec. 104(d)(4)(E)(ii), struck

out "(except for purposes of subsection (a)(2) of this section)"

after "Massachusetts, but only".

Subsec. (y)(2). Pub. L. 100-360, Sec. 104(d)(4)(E)(i), (iii),

(iv), struck out "post-hospital" before "extended care services" in

two places, substituted "year" for "spell of illness" and "spell"

wherever each appeared, and substituted "45 days" for "30 days".

Subsec. (y)(3). Pub. L. 100-360, Sec. 104(d)(4)(E)(i), (iii),

(v), struck out "post-hospital" before "extended care services" and

substituted "year" for "spell of illness", "the coinsurance amount

established under section 1395e(a)(3)(C) of this title for each day

before the 46th day" for "one-eighth of the inpatient hospital

deductible for each day before the 31st day", and "year" for

"spell".

Subsec. (y)(4). Pub. L. 100-360, Sec. 104(d)(4)(E)(vi), struck

out par. (4) which provided that certain determinations about

services provided by an institution described in par. (1) be made

under regulations.

Subsec. (bb)(2). Pub. L. 100-360, Sec. 411(i)(3), added Pub. L.

100-203, Sec. 4084(c)(1), see 1987 Amendment note below.

Subsec. (ff). Pub. L. 100-360, Sec. 411(h)(1)(B)(i), inserted

heading.

Subsec. (ff)(3). Pub. L. 100-360, Sec. 411(h)(1)(B)(ii),

substituted "furnished by a hospital to its outpatients" for

"hospital-based or hospital-affiliated (as defined by the

Secretary)".

Subsec. (gg). Pub. L. 100-360, Sec. 411(h)(4)(D), amended Pub. L.

100-203, Sec. 4073(c), see 1987 Amendment note below.

Subsec. (hh). Pub. L. 100-360, Sec. 411(h)(5)(B), amended Pub. L.

100-203, Sec. 4074(b), see 1987 Amendment note below.

Subsec. (ii). Pub. L. 100-647, Sec. 8423(a), inserted "on-site"

before "at a community mental health center" and ", and such

services that are necessarily furnished off-site (other than at an

off-site office of such psychologist) as part of a treatment plan

because of the inability of the individual furnished such services

to travel to the center by reason of physical or mental impairment,

because of institutionalization, or because of similar

circumstances of the individual," after "Public Health Service

Act)".

Pub. L. 100-360, Sec. 411(h)(7)(E), (F), redesignated and amended

Pub. L. 100-203, Sec. 4077(b)(4), see 1987 Amendment note below.

Subsec. (jj). Pub. L. 100-485, Sec. 608(d)(6)(A), inserted

heading.

Pub. L. 100-360, Sec. 203(b), added subsec. (jj) relating to home

intravenous drug therapy services.

Subsec. (kk). Pub. L. 100-360, Sec. 204(a)(2), added subsec. (kk)

relating to screening mammography.

Subsec. (ll). Pub. L. 100-360, Sec. 205(b), added subsec. (ll)

relating to in-home care furnished to chronically dependent

individual.

1987 - Subsec. (a)(2). Pub. L. 100-203, Sec. 4201(d)(1), formerly

Sec. 4201(d), as redesignated and amended by Pub. L. 100-360, Sec.

411(l)(1)(B)(i), (ii), substituted "facility described in section

1396i-3(a)(1) of this title or subsection (y)(1) of this section"

for "skilled nursing facility".

Subsec. (b)(3). Pub. L. 100-203, Sec. 4009(e)(1), inserted

"(including clinical psychologist (as defined by the Secretary))"

before "under arrangements".

Subsec. (b)(4). Pub. L. 100-203, Sec. 4085(i)(9), substituted

"and anesthesia" for ", anesthesia" and "certified registered

nurse" for "certified certified registered nurse".

Subsec. (b)(6). Pub. L. 100-203, Sec. 4039(b)(2), substituted

"Council on Podiatric Medical Education of the American Podiatric

Medical Association" for "Council on Podiatry Education of the

American Podiatry Association".

Subsec. (e)(4). Pub. L. 100-203, Sec. 4009(f), inserted "with

respect to whom payment may be made under this subchapter" after

"patient".

Subsec. (g). Pub. L. 100-203, Sec. 4085(i)(10), made technical

amendment to heading.

Subsec. (j). Pub. L. 100-203, Sec. 4201(a)(1), amended subsec.

generally, substituting provision defining "skilled nursing

facility" as having the meaning given such term in section

1395i-3(a) of this title for provision defining "skilled nursing

facility" as, except for purposes of subsec. (a)(2) of this

section, an institution or a distinct part of an institution which

has in effect a transfer agreement, meeting the requirements of

subsec. (l) of this section, with one or more hospitals having

agreements in effect under section 1395cc of this title and which

meet a specified list of criteria.

Subsec. (n). Pub. L. 100-203, Sec. 4201(d)(2), (5), as added by

Pub. L. 100-360, Sec. 411(l)(1)(B)(iii), and Pub. L. 100-360, Sec.

411(l)(1)(C), as added by Pub. L. 100-485, Sec. 608(d)(27)(B), made

similar amendments, resulting in the substitution of "subsection

(e)(1) of this section or section 1395i-3(a)(1) of this title" for

"subsection (e)(1) or (j)(1) of this section" in introductory

provisions.

Subsec. (o)(6). Pub. L. 100-203, Sec. 4021(a), inserted "the

conditions of participation specified in section 1395bbb(a) of this

title and" after "meets".

Subsec. (r)(3). Pub. L. 100-203, Sec. 4039(b)(1), substituted

"subsections (k), (m), (p)(1), and (s) of this section and sections

1395f(a), 1395k(a)(2)(F)(ii), and 1395n of this title" for

"subsection (s) of this section", and struck out "; and for the

purposes of subsections (k), (m), and (p)(1) of this section and

sections 1395f(a), 1395k(a)(2)(F)(ii), and 1395n of this title but

only if his performance of functions under subsections (k), (m),

and (p)(1) of this section and sections 1395f(a),

1395k(a)(2)(F)(ii), and 1395n of this title is consistent with the

policy of the institution or agency with respect to which he

performs them and with the functions which he is legally authorized

to perform".

Subsec. (s). Pub. L. 100-203, Sec. 4085(i)(11), substituted in

closing provisions "which would not be included under subsection

(b) of this section if it were furnished to an inpatient of a

hospital." for "which - " before par. (15) and struck out pars.

(15) and (16).

Pub. L. 100-203, Sec. 4064(e)(1), inserted "a laboratory not

independent of a physician's office that has a volume of clinical

diagnostic laboratory tests exceeding 5,000 per year" in provisions

preceding par. (13).

Subsec. (s)(2)(B). Pub. L. 100-203, Sec. 4070(b)(1), inserted

"and partial hospitalization services incident to such services"

before semicolon.

Subsec. (s)(2)(H)(ii). Pub. L. 100-203, Sec. 4074(a), as amended

by Pub. L. 100-360, Sec. 411(h)(5)(A), inserted "or by a clinical

social worker (as defined in subsection (hh) of this section)"

after "clinical psychologist (as defined by the Secretary)", and

substituted "incident to such clinical psychologist's services or

clinical social worker's services" for "incident to his services".

Subsec. (s)(2)(J). Pub. L. 100-203, Sec. 4075(a), substituted

"prescription drugs used in immunosuppressive therapy" for

"immunosuppressive drugs".

Subsec. (s)(2)(K)(i). Pub. L. 100-203, Sec. 4076(a), as amended

by Pub. L. 100-360, Sec. 411(h)(6), inserted "(I)" and substituted

", (II) as an assistant at surgery, or (III) in a rural area (as

defined in section 1395ww(d)(2)(D) of this title) that is

designated, under section 332(a)(1)(A) of the Public Health Service

Act, as a health manpower shortage area," for "or as an assistant

at surgery".

Subsec. (s)(2)(L). Pub. L. 100-203, Sec. 4073(a), added subpar.

(L).

Subsec. (s)(2)(M). Pub. L. 100-203, Sec. 4077(b)(1), as amended

by Pub. L. 100-360, Sec. 411(h)(7)(A), added subpar. (M).

Subsec. (s)(10)(A). Pub. L. 100-203, Sec. 4071(a), inserted "and

influenza vaccine and its administration" before semicolon.

Subsec. (s)(12). Pub. L. 100-203, Sec. 4072(a), added par. (12).

Former par. (12) redesignated (13).

Subsec. (s)(13), (14). Pub. L. 100-203, Sec. 4072(a)(1),

redesignated pars. (12) and (13) as (13) and (14), respectively.

Former par. (14) redesignated (15).

Subsec. (s)(15). Pub. L. 100-203, Sec. 4085(i)(11), as amended by

Pub. L. 100-360, Sec. 411(i)(4)(C)(iii), struck out par. (15) which

read as follows: "would not be included under subsection (b) of

this section if it were furnished to an inpatient of a hospital;

or".

Pub. L. 100-203, Sec. 4072(a)(1), redesignated par. (14) as (15).

Former par. (15) redesignated (16).

Subsec. (s)(16). Pub. L. 100-203, Sec. 4085(i)(11), as amended by

Pub. L. 100-360, Sec. 411(i)(4)(C)(iii), struck out par. (16) which

read as follows: "is furnished under arrangements referred to in

such paragraph (2)(C) unless furnished in the hospital or in other

facilities operated by or under the supervision of the hospital or

its organized medical staff."

Pub. L. 100-203, Sec. 4072(a)(1), redesignated par. (15) as (16).

Subsec. (v)(1)(E). Pub. L. 100-203, Sec. 4201(b)(1), inserted at

end "Notwithstanding the previous sentence, such regulations with

respect to skilled nursing facilities shall take into account (in a

manner consistent with subparagraph (A) and based on patient-days

of services furnished) the costs of such facilities complying with

the requirements of subsections (b), (c), and (d) of section

1395i-3 of this title (including the costs of conducting nurse aide

training and competency evaluation programs and competency

evaluation programs)."

Subsec. (v)(1)(L)(iii). Pub. L. 100-203, Sec. 4026(a)(1), added

cl. (iii).

Subsec. (v)(1)(S). Pub. L. 100-203, Sec. 4065(a), added subpar.

(S).

Subsec. (v)(5)(A). Pub. L. 100-203, Sec. 4085(i)(12), substituted

"subsection (p)" and "subsection (g)" for "section 1861(p)" and

"section 1861(g)", respectively.

Subsec. (aa)(1)(B). Pub. L. 100-203, Sec. 4077(a)(1), substituted

"physician assistant or a nurse practitioner (as defined in

paragraph (3)), or by a clinical psychologist (as defined by the

Secretary)," for "physician assistant or by a nurse practitioner".

Subsec. (bb). Pub. L. 100-203, Sec. 4085(i)(13), made technical

amendment to heading.

Subsec. (bb)(2). Pub. L. 100-203, Sec. 4084(c)(1), as added by

Pub. L. 100-360, Sec. 411(i)(3), inserted at end "Such term also

includes, as prescribed by the Secretary, an anesthesiologist

assistant."

Subsec. (cc)(1). Pub. L. 100-203, Sec. 4078, inserted provision

at end relating to location requirements in case of physical

therapy, occupational therapy, and speech pathology services.

Subsec. (ee). Pub. L. 100-203, Sec. 4085(i)(14), made technical

amendment to heading.

Subsec. (ff). Pub. L. 100-203, Sec. 4070(b)(2), added subsec.

(ff).

Subsec. (gg). Pub. L. 100-203, Sec. 4073(c), as amended by Pub.

L. 100-360, Sec. 411(h)(4)(D), added subsec. (gg).

Subsec. (hh). Pub. L. 100-203, Sec. 4074(b), as amended by Pub.

L. 100-360, Sec. 411(h)(5)(B), added subsec. (hh).

Subsec. (ii). Pub. L. 100-203, Sec. 4077(b)(4), formerly Sec.

4077(b)(5), as redesignated and amended by Pub. L. 100-360, Sec.

411(h)(7)(E), (F), added subsec. (ii).

1986 - Subsec. (b)(4). Pub. L. 99-509, Sec. 9320(f), inserted

before the semicolon at end ", anesthesia services provided by a

certified registered nurse anesthetist".

Subsec. (e)(6). Pub. L. 99-509, Sec. 9305(c)(1), inserted "(A)"

after "(6)" and cl. (B).

Subsec. (g). Pub. L. 99-509, Sec. 9337(d)(1), added subsec. (g).

Subsec. (n). Pub. L. 99-272, Sec. 9219(b)(1)(B), substituted "as

his home" for "at his home".

Subsec. (r)(4). Pub. L. 99-509, Sec. 9336(a), amended cl. (4)

generally. Prior to amendment, cl. (4) read as follows: "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

services related to the condition of aphakia, or".

Subsec. (s)(2)(D). Pub. L. 99-509, Sec. 9337(d)(2), inserted "and

outpatient occupational therapy services".

Subsec. (s)(2)(J). Pub. L. 99-509, Sec. 9335(c)(1), added subpar.

(J).

Subsec. (s)(2)(K). Pub. L. 99-509, Sec. 9338(a), added subpar.

(K).

Subsec. (s)(11) to (15). Pub. L. 99-509, Sec. 9320(b), added par.

(11) and redesignated former pars. (11) to (14) as (12) to (15),

respectively.

Subsec. (v)(1)(B). Pub. L. 99-272, Sec. 9107(b)(2), substituted

"any cost reporting period shall be equal to" for "any fiscal

period shall not exceed one and one-half times" and "the period"

for "such fiscal period".

Subsec. (v)(1)(G)(i). Pub. L. 99-272, Sec. 9219(b)(3)(A),

inserted "on the basis of" after "(during such period)" in

provisions following subcl. (III).

Subsec. (v)(1)(L). Pub. L. 99-509, Sec. 9315(a), inserted "(i)"

after "(L)", struck out "the 75th percentile of such costs per

visit for free standing home health agencies, or, in the judgment

of the Secretary, such lower percentile or such comparable or lower

limit (based on or related to the mean of the costs of such

agencies or otherwise) as the Secretary may determine.", and

substituted in lieu "for cost reporting periods beginning on or

after -

"(I) July 1, 1985, and before July 1, 1986, 120 percent,

"(II) July 1, 1986, and before July 1, 1987, 115 percent, or

"(III) July 1, 1987, 112 percent,

of the mean of the labor-related and nonlabor per visit costs for

free standing home health agencies.

"(ii) Effective for cost reporting periods beginning on or after

July 1, 1986, such limitations shall be applied on an aggregate

basis for the agency, rather than on a discipline specific basis,

with appropriate adjustment for administrative and general costs of

hospital-based agencies."

Subsec. (v)(1)(O)(i). Pub. L. 99-272, Sec. 9110(a)(1), inserted

", except as provided in clause (iv)," after "such regulations

shall provide".

Subsec. (v)(1)(O)(iv). Pub. L. 99-272, Sec. 9110(a)(2), added cl.

(iv).

Subsec. (v)(1)(P). Pub. L. 99-272, Sec. 9107(b)(1), added subpar.

(P).

Subsec. (v)(1)(Q). Pub. L. 99-272, Sec. 9202(i)(1), added subpar.

(Q).

Subsec. (v)(1)(R). Pub. L. 99-509, Sec. 9313(a)(2), added subpar.

(R).

Subsec. (v)(5)(A). Pub. L. 99-509, Sec. 9337(d)(3), inserted

"(including through the operation of subsection (g) of this

section)" after "subsection (p) of this section".

Subsec. (bb). Pub. L. 99-509, Sec. 9320(c), added subsec. (bb).

Subsec. (ee). Pub. L. 99-509, Sec. 9305(c)(2), added subsec.

(ee).

1984 - Subsec. (d). Pub. L. 98-369, Sec. 2335(b)(1), struck out

subsec. (d) which defined "inpatient tuberculosis hospital

services" as inpatient hospital services furnished to an inpatient

of a tuberculosis hospital.

Subsec. (e). Pub. L. 98-369, Sec. 2335(b)(2), struck out "or

tuberculosis unless it is a tuberculosis hospital (as defined in

subsection (g) of this section) or" before "unless it is a

psychiatric hospital" in provisions following par. (9).

Subsec. (f). Pub. L. 98-369, Sec. 2340(a), struck out par. (5)

which provided that "psychiatric hospital" meant an institution

which was accredited by the Joint Commission on Accreditation of

Hospitals, and struck out "if the institution is accredited by the

Joint Commission on Accreditation of Hospitals or if such distinct

part meets requirements equivalent to such accreditation

requirements as determined by the Secretary" in concluding

provisions.

Subsec. (g). Pub. L. 98-369, Sec. 2335(b)(1), struck out subsec.

(g) which defined "tuberculosis hospital".

Subsec. (j). Pub. L. 98-369, Sec. 2335(b)(3), in provisions

following par. (15), struck out "or tuberculosis" after "treatment

of mental diseases".

Subsec. (j)(2). Pub. L. 98-369, Sec. 2354(b)(18), substituted

"provision for" for "provision of".

Subsec. (j)(13). Pub. L. 98-369, Sec. 2354(b)(19), substituted

"an institution" for "a nursing home".

Subsec. (m)(5). Pub. L. 98-369, Sec. 2321(e)(1), which directed

the substitution of "and durable medical equipment" for ", and the

use of medical applicances" was executed by making the substitution

for ", and the use of medical appliances" as the probable intent of

Congress.

Subsec. (n). Pub. L. 98-369, Sec. 2321(e)(3), added subsec. (n).

Subsec. (p)(1). Pub. L. 98-369, Sec. 2341(a), substituted

"paragraph (1) or (3) of subsection (r) of this section" for

"subsection (r)(1) of this section".

Subsec. (p)(2). Pub. L. 98-369, Sec. 2342(a), substituted "by a

physician as so defined) or by a qualified physical therapist and

is periodically reviewed by a physician (as so defined)" for ", and

is periodically reviewed, by a physician (as so defined)".

Subsec. (r)(3). Pub. L. 98-617, Sec. 3(b)(7), substituted "under

subsections (k), (m), and (p)(1) of this section and sections

1395f(a), 1395k(a)(2)(F)(ii), and 1395n of this title" for "under

subsections (k) and (m) and sections 1395f(a) and 1395n of this

title" before "is consistent with the policy".

Pub. L. 98-369, Sec. 2341(c), substituted "for the purposes of

subsections (k), (m), and (p)(1) of this section" for "for the

purposes of subsections (k) and (m) of this section", and

substituted "sections 1395f(a), 1395k(a)(2)(F)(ii), and 1395n of

this title but only if" for "sections 1395f(a) and 1395n of this

title but only if".

Subsec. (s)(2)(H). Pub. L. 98-369, Sec. 2322(a), designated

existing provisions as cl. (i) and added cl. (ii).

Subsec. (s)(2)(I). Pub. L. 98-369, Sec. 2324(a), added subpar.

(I).

Subsec. (s)(6). Pub. L. 98-369, Sec. 2321(e)(2), struck out

provision which included iron lungs, oxygen tents, etc. with

durable medical equipment. See subsec. (n) of this section.

Subsec. (s)(10). Pub. L. 98-369, Sec. 2323(a), designated

existing provisions as subpar. (A) and added subpar. (B).

Subsec. (u). Pub. L. 98-369, Sec. 2354(b)(20), struck out "or"

before "home health agency".

Subsec. (v)(1)(B). Pub. L. 98-369, Sec. 2354(b)(21)(A), realigned

margin of subpar. (B).

Subsec. (v)(1)(C). Pub. L. 98-369, Sec. 2354(b)(21)(B), realigned

margins of subpar. (C).

Subsec. (v)(1)(C)(i). Pub. L. 98-369, Sec. 2354(b)(22), inserted

a dash after "but only if".

Subsec. (v)(1)(D). Pub. L. 98-369, Sec. 2354(b)(21)(B), realigned

margin of subpar. (D).

Pub. L. 98-369, Sec. 2354(b)(21)(C), inserted a comma after

"section 1395k(a)(2)(B)(i) of this title".

Subsec. (v)(1)(E). Pub. L. 98-369, Sec. 2319(a)(1), struck out

cl. (i) which directed that such regulations provide that any

determination of reasonable cost with respect to services provided

by hospital-based skilled nursing facilities be made on the basis

of a single standard based on the reasonableness of costs incurred

by free standing skilled nursing facilities, subject to such

adjustments as deemed appropriate by the Secretary, and struck out

the designation "(ii)".

Pub. L. 98-369, Sec. 2354(b)(23), as amended by Pub. L. 98-617,

Sec. 3(a)(4), substituted "use" for "uses".

Subsec. (v)(1)(I)(i), (ii). Pub. L. 98-369, Sec. 2354(b)(24),

substituted "by the Secretary, or upon request by the Comptroller

General" for "to the Secretary, or upon request to the Comptroller

General".

Subsec. (v)(1)(K). Pub. L. 98-369, Sec. 2318(a), (b), designated

existing provisions as cl. (i), substituted therein "as defined in

clause (ii)" for "provided in an emergency room", and added cl.

(ii).

Subsec. (v)(1)(O). Pub. L. 98-369, Sec. 2314(a), added subpar.

(O).

Subsec. (v)(3). Pub. L. 98-369, Sec. 2354(b)(25), substituted

"semi-private" for "semiprivate" after "furnished in".

Subsec. (v)(7)(D). Pub. L. 98-369, Sec. 2319(a)(2), added subpar.

(D).

Subsec. (z)(2). Pub. L. 98-369, Sec. 2354(b)(26), substituted

"paragraph (1)" for "subparagraph (1)".

Subsec. (aa)(2)(I). Pub. L. 98-369, Sec. 2354(b)(27), substituted

"utilization" for "ultilization".

Subsec. (cc)(1)(F). Pub. L. 98-369, Sec. 2354(b)(28), substituted

"self-administered" for "self administered".

Subsec. (cc)(1)(G). Pub. L. 98-369, Sec. 2321(e)(4), substituted

"and durable medical equipment" for ", appliances, and equipment,

including the purchase or rental of equipment".

Subsec. (cc)(2)(F). Pub. L. 98-369, Sec. 2354(b)(29), substituted

"standards established" for "standard establishment".

Subsec. (dd)(2)(A)(ii)(I). Pub. L. 98-369, Sec. 2343(a), inserted

"except as otherwise provided in paragraph (5),".

Subsec. (dd)(5). Pub. L. 98-369, Sec. 2343(b), added par. (5).

1983 - Subsec. (v)(1)(G)(i). Pub. L. 98-21, Sec. 602(d)(1),

substituted "the amount otherwise payable under part A with respect

to" for "on the basis of the reasonable cost of" in provisions

following subcl. (III).

Subsec. (v)(2)(A). Pub. L. 98-21, Sec. 602(d)(2), substituted

"the amount that would be taken into account with respect to" for

"an amount equal to the reasonable cost of".

Subsec. (v)(2)(B). Pub. L. 98-21, Sec. 602(d)(3), struck out "the

equivalent of the reasonable cost of" after "only".

Subsec. (v)(3). Pub. L. 98-21, Sec. 602(d)(4), substituted "the

amount otherwise payable under this subchapter for such bed and

board furnished in semiprivate accommodations" for "the reasonable

cost of such bed and board furnished in semiprivate accommodations

(determined pursuant to paragraph (1))".

Subsec. (v)(7)(C). Pub. L. 97-448 amended directory language of

Pub. L. 97-248, Sec. 109(b)(2), to correct typographical error, and

did not involve any change in text. See 1982 Amendment note below.

Subsec. (z)(2). Pub. L. 98-21, Sec. 607(d), designated existing

provisions as subpar. (A) and added subpar. (B).

Pub. L. 98-21, Sec. 607(b)(2), substituted "$600,000 (or such

lesser amount as may be established by the State under section

1320a-1(g)(1) of this title in which the hospital is located)" for

"$100,000".

1982 - Subsec. (e)(C). Pub. L. 97-248, Sec. 128(d)(2),

substituted "(i) may" for "may (i),".

Subsec. (s)(2)(H). Pub. L. 97-248, Sec. 114(b), added subpar.

(H).

Subsec. (u). Pub. L. 97-248, Sec. 122(d)(1), inserted "hospice

program," after "home health agency,".

Subsec. (v)(1)(E). Pub. L. 97-248, Sec. 102(a), struck out

provisions that this subparagraph would not apply to any skilled

nursing facility that either was a distinct part of or directly

operated by a hospital or was in a close, formal satellite

relationship with a participating hospital, and in the case of the

latter, the reasonable cost of any services furnished by such

facility as determined by the Secretary under this subsection would

not exceed 150 percent of the costs determined by the application

of this subparagraph, redesignated the remainder as cl. (ii), and

added cl. (i).

Subsec. (v)(1)(G)(i). Pub. L. 97-248, Sec. 148(b), substituted

"quality control and peer review organization" for "Professional

Standards Review Organization".

Subsec. (v)(1)(H)(iii). Pub. L. 97-248, Sec. 109(b)(1), struck

out "(I)" and ", or (II) which determines the amount payable by the

home health agency on the basis of a percentage of the agency's

reimbursement or claim for reimbursement for services furnished by

the agency".

Subsec. (v)(1)(I). Pub. L. 97-248, Sec. 127(1), amended directory

language of Pub. L. 96-499, Sec. 952, by inserting "(a)" after

"952", and did not involve any change in text. See 1980 Amendment

note below.

Subsec. (v)(1)(J). Pub. L. 97-248, Sec. 103(a), substituted

provisions that cost regulations may not provide for any inpatient

routine salary cost differential as a reimbursable cost for

hospitals and skilled nursing facilities for provisions that such

regulations would provide that an inpatient routine nursing salary

cost differential would be allowable as a reimbursable cost of

hospitals, at a rate not to exceed 5 percent, to be applied under

the same methodology used for the nursing salary cost differential

for the month of April 1981.

Subsec. (v)(1)(L). Pub. L. 97-248, Sec. 101(a)(2), struck out cl.

(i) which provided that the Secretary, in determining the amount of

the payments that could be made under this subchapter with respect

to routine operating costs for the provision of general inpatient

hospital services, could not recognize as reasonable, routine

operating costs for the provision of general inpatient hospital

services by a hospital to the extent these costs exceeded 108

percent of the mean of such routine operating costs per diem for

hospitals, or, in the judgment of the Secretary, such lower

percentage or such comparable or lower limit as the Secretary could

determine, and struck out "(ii)".

Pub. L. 97-248, Sec. 105(a), inserted "free standing" after

"costs per visit for".

Subsec. (v)(1)(M). Pub. L. 97-248, Sec. 106(a), added subpar.

(M).

Subsec. (v)(1)(N). Pub. L. 97-248, Sec. 107(a), added subpar.

(N).

Subsec. (v)(7). Pub. L. 97-248, Sec. 101(d), redesignated

existing provisions as subpar. (A) and added subpar. (B).

Subsec. (v)(7)(C). Pub. L. 97-248, Sec. 108(a)(2), added subpar.

(C).

Pub. L. 97-248, Sec. 109(b)(2), as amended by Pub. L. 97-448,

Sec. 309(a)(4), inserted "and for payments under certain percentage

arrangements".

Subsec. (w)(1). Pub. L. 97-248, Sec. 122(d)(2), substituted "home

health agency, or hospice program" for "or home health agency".

Subsec. (w)(2). Pub. L. 97-248, Sec. 148(b), substituted "quality

control and peer review organization" for "Professional Standards

Review Organization".

Subsec. (cc)(1). Pub. L. 97-248, Sec. 128(a)(1), substituted

"inpatient" for "outpatient" in provisions following subpar. (H).

Subsec. (dd). Pub. L. 97-248, Sec. 122(d)(3), added subsec. (dd).

1981 - Subsec. (u). Pub. L. 97-35, Sec. 2121(c), struck out

"detoxification facility," after "home health agency,".

Subsec. (v)(1)(G)(i). Pub. L. 97-35, Sec. 2102(a)(1), substituted

"there is not an excess of hospital beds in such hospital and

(subject to clause (iv)) there is not an excess of hospital beds in

the area of such hospital" for "the hospital had (during the

immediately preceding calendar year) an average daily occupancy

rate of 80 percent or more" in provision following subcl. (III).

Pub. L. 97-35, Sec. 2114, substituted "the Secretary or such

agent as the Secretary may designate" for "an organization or

agency with review responsibility as is otherwise provided for

under part A of subchapter XI of this chapter" in provision

preceding subcl. (I).

Subsec. (v)(1)(G)(iv). Pub. L. 97-35, Sec. 2102(a)(2),

substituted provisions that the determination under cl. (i) of this

subparagraph, in the case of a public hospital, whether or not

there is an excess of hospital beds in the area of such hospital,

be made on the basis of only the public hospitals which are in the

area of the hospital and which are under common ownership with that

hospital for provisions that public hospitals under common

ownership may elect to be treated as a single hospital, and

beginning two years after the date this subparagraph is first

applied with respect to a hospital, the Secretary, to the extent

feasible, shall not treat as an inpatient an individual with

respect to whom payment was made to the hospital only because of

this subparagraph or section 1396a(h) of this title for such

determination.

Subsec. (v)(1)(J). Pub. L. 97-35, Sec. 2141(a), added subpar.

(J).

Subsec. (v)(1)(K). Pub. L. 97-35, Sec. 2142(a), added subpar.

(K).

Subsec. (v)(1)(L). Pub. L. 97-35, Sec. 2143(a), added subpar.

(L).

Pub. L. 97-35, Sec. 2144(a), designated existing provisions as

cl. (i) and added cl. (ii).

Subsec. (w)(2). Pub. L. 97-35, Sec. 2193(c)(9), substituted

"subchapter XIX of this chapter" for "subchapter V or XIX of this

chapter".

Subsec. (bb). Pub. L. 97-35, Sec. 2121(d), struck out subsec.

(bb) which defined "alcohol detoxification facility services" and

"detoxification facility".

1980 - Subsec. (b)(7). Pub. L. 96-499, Sec. 948(a)(1), provided

that par. (4) was not to apply to services provided in a hospital

by a physician where the hospital had a teaching program approved

as specified in par. (6) if the hospital elected to receive payment

for reasonable costs of such services and all physicians in such

hospital agreed not to bill charges for professional services

rendered in such hospital to individuals covered under the

insurance program established by this subchapter.

Subsec. (e). Pub. L. 96-499, Sec. 930(k), substituted "subsection

(i)" for "subsections (i) and (n)" in text preceding par. (1) and

in text following par. (9).

Pub. L. 96-499, Sec. 949, in text following par. (9), inserted

provision defining "hospital" as a facility of fifty beds or less

located in an area determined by the Secretary to meet definition

relating to a rural area described in subpar. (A) of par. (5) and

prescribing exceptions to such definition.

Subsec. (i). Pub. L. 96-499, Sec. 950, substituted "30 days" for

"14 days" in three places and struck out former cl. (B) which

related to admission to skilled nursing facilities within 28 days

after hospital discharge of an individual unable to be admitted to

such facilities within 14 days because of a shortage of appropriate

bed space, and redesignated former cl. (C) as (B).

Subsec. (j)(13). Pub. L. 96-499, Sec. 915(a), substituted "such

edition (as is specified by the Secretary in regulations) of the

Life Safety Code of the National Fire Protection Association" for

"the Life Safety Code of the National Fire Protection Association

(23rd edition, 1973)".

Subsec. (k)(2)(A). Pub. L. 96-499, Sec. 951(b), inserted "(of

which at least two must be physicians described in subsection

(r)(1) of this section)" after "two or more physicians".

Subsec. (m)(4). Pub. L. 96-499, Sec. 930(l), inserted "who has

successfully completed a training program approved by the

Secretary" after "health aide".

Subsec. (n). Pub. L. 96-499, Sec. 930(m), struck out subsec. (n)

which defined "post-hospital home health services".

Subsec. (o). Pub. L. 96-499, Sec. 930(n)(2), in provisions

following par. (7), struck out provision that "home health agency"

was not to include a private organization which was not a nonprofit

organization exempt from Federal income taxation under section 501

of title 26 unless it were licensed pursuant to State law and met

such additional standards and requirements as prescribed by

regulations.

Subsec. (o)(7). Pub. L. 96-499, Sec. 930(n)(1), added par. (7).

Subsec. (r)(2). Pub. L. 96-499, Sec. 936(a), amended cl. (2)

generally to expand definition of "physician" to include doctors of

dental surgery or dental medicine acting within the scope of their

licenses.

Subsec. (r)(3). Pub. L. 96-499, Sec. 951(a), substituted

provisions relating to doctors of podiatric medicine for provisions

relating to doctors of podiatry and surgical chiropody.

Subsec. (r)(4). Pub. L. 96-499, Sec. 937(a), substituted

"services related to the condition of aphakia" for "establishing

the necessity for prosthetic lenses".

Subsec. (s)(2)(G). Pub. L. 96-499, Sec. 938(a), added subpar.

(G).

Subsec. (s)(10) to (14). Pub. L. 96-611, Sec. 1(a)(1), added par.

(10) and redesignated former pars. (10) to (13) as (11) to (14),

respectively.

Subsec. (u). Pub. L. 96-499, Sec. 933(c), inserted "comprehensive

outpatient rehabilitation facility," after "nursing facility".

Pub. L. 96-499, Sec. 931(c), inserted "detoxification facility,".

Subsec. (v)(1)(G). Pub. L. 96-499, Sec. 902(a)(1), added subpar.

(G).

Subsec. (v)(1)(H). Pub. L. 96-499, Sec. 930(p), added subpar.

(H).

Subsec. (v)(1)(I). Pub. L. 96-499, Sec. 952(a), formerly Sec.

952, as redesignated by Pub. L. 97-248, Sec. 127(1), added subpar.

(I).

Subsec. (z). Pub. L. 96-499, Sec. 933(d), which purported to

substitute "skilled nursing facility, comprehensive outpatient

rehabilitation facility," for "extended care facility," was

executed by inserting "comprehensive outpatient rehabilitation

facility," after "skilled nursing facility," as the probable intent

of Congress, in view of the substitution of "skilled nursing

facility" for "extended care facility" by section 278(b)(6) of Pub.

L. 92-603.

Subsec. (aa)(1)(A). Pub. L. 96-611, Sec. 1(b)(3), inserted

reference to items and services described in subsection (s)(10) of

this section.

Subsec. (bb). Pub. L. 96-499, Sec. 931(d), added subsec. (bb).

Subsec. (cc). Pub. L. 96-499, Sec. 933(e), added subsec. (cc).

1978 - Subsec. (s)(2)(F). Pub. L. 95-292 added subpar. (F).

1977 - Subsec. (j)(11). Pub. L. 95-142, Sec. 3(a)(2), substituted

provisions relating to compliance with requirements of section

1320a-3 of this title, for provisions relating disclosure of

ownership, corporate status, etc., information to the Secretary or

his delegate.

Subsec. (j)(13). Pub. L. 95-142, Sec. 21(a), struck out "; and"

after "nursing facilities".

Subsec. (j)(14). Pub. L. 95-142, Sec. 21(a), added par. (14).

Subsec. (s). Pub. L. 95-210, Sec. 1(g), (h), added subpar. (E) of

par. (2) and in provisions following par. (9) inserted ", a rural

health clinic," after "independent of a physician's office".

Subsec. (s)(6). Pub. L. 95-216 inserted "(which may include a

power-operated vehicle that may be appropriately used as a

wheelchair, but only where the use of such a vehicle is determined

to be necessary on the basis of the individual's medical and

physical condition and the vehicle meets such safety requirements

as the Secretary may prescribe)" after "wheelchairs".

Subsec. (v)(1)(F). Pub. L. 95-142, Sec. 19(b)(1), added subpar.

(F).

Subsec. (w)(2). Pub. L. 95-142, Sec. 5(m), inserted "part B of

this subchapter or under" after "or entitled to have payment made

for such services under".

Subsec. (aa). Pub. L. 95-210, Sec. 1(d), added subsec. (aa).

1975 - Subsec. (e)(5). Pub. L. 94-182, Sec. 102, substituted

"January 1, 1979" for "January 1, 1976".

Subsec. (j)(13). Pub. L. 94-182, Sec. 106(a), substituted "23d

edition, 1973" for "21st edition, 1967".

Subsec. (w). Pub. L. 94-182, Sec. 112(a)(1), designated existing

provisions as par. (1) and added par. (2).

1972 - Subsec. (a)(2). Pub. L. 92-603, Sec. 278(a)(4),

substituted "skilled nursing facility" for "extended care facility"

and "a" for "an".

Subsec. (b)(6). Pub. L. 92-603, Secs. 227(a), 276(a),

redesignated existing second sentence of subsec. (b) as par. (6)

and in subsec. (b)(6) as so designated inserted reference to

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.

Subsec. (b)(7). Pub. L. 92-603, Sec. 227(a), added par. (7).

Subsec. (e). Pub. L. 92-603, Sec. 211(b), inserted reference to

section 1395f(f) of this title in the provisions preceding par.

(1), inserted reference to sections 1395f(f)(2) of this title after

"For purposes of sections 1395f(d) and 1395n(b) of this title

(including determination of whether an individual received

inpatient hospital services or diagnostic services for purposes of

such sections),", and inserted provisions for accreditation by the

Joint Commission on Accreditation of Hospitals.

Subsec. (e)(8). Pub. L. 92-603, Sec. 234(a), added par. (8).

Former par. (8) redesignated (9).

Subsec. (e)(9). Pub. L. 92-603, Secs. 234(a), 244(c),

redesignated former par. (8) as (9) and struck out provisions

requiring that other requirements not be higher than the comparable

requirements prescribed for the accreditation of hospitals by the

Joint Commission on Accreditation of Hospitals.

Subsecs. (f)(2), (g)(2). Pub. L. 92-603, Sec. 234(b), (c),

inserted reference to par. (9) of subsec. (e) of this section.

Subsec. (h). Pub. L. 92-603, Sec. 278(a)(5), substituted "skilled

nursing facility" for "extended care facility", "skilled nursing

facilities" for "extended care facilities" and "a" for "an".

Subsec. (i). Pub. L. 92-603, Secs. 248, 278(a)(6), (b)(10),

extended the class of persons qualifying to be deemed as having

been an inpatient in a hospital immediately before transfer

therefrom by designating as clause (A) the existing requirement

that the person have been admitted to the skilled nursing facility

within 14 days after discharge from such hospital and adding cls.

(B) and (C) and substituted "skilled nursing facility" for

"extended care facility".

Subsec. (j). Pub. L. 92-603, Sec. 278(a)(7), substituted "skilled

nursing facility" for "extended care facility" in provisions

preceding par. (1).

Subsec. (j)(10). Pub. L. 92-603, Sec. 234(d), added par. (10).

Former par. (10) redesignated par. (11) by section 234(d)(2) of

Pub. L. 92-603 and again redesignated par. (15) by section

246(b)(2) of Pub. L. 92-603.

Subsec. (j)(11) to (13). Pub. L. 92-603, Sec. 246(b)(3), added

pars. (11) to (13).

Subsec. (j)(15). Pub. L. 92-603, Secs. 234(d), 246(b)(2), (4),

265, 267, 278(b)(13), redesignated former par. (10) as (11),

amended par. (11) as thus redesignated by inserting provisions that

the Secretary shall not require as a condition of participation

that medical social services be furnished in any such institution,

redesignated such par. (11) as thus amended as par. (15), and

inserted provision that all information concerning skilled nursing

facilities required to be filed with the Secretary be made

available to Federal and state employees for purposes consistent

with the effective administration of programs established under

subchapters XVIII and XIX and inserted provision for the waiver of

the registered nurse requirement in skilled nursing facilities in

rural areas.

Subsec. (k). Pub. L. 92-603, Secs. 237(c), 278(a)(8), inserted

provisions authorizing the Secretary to utilize the procedures

established under subchapter XIX of this chapter if such procedures

were determined to be superior in their effectiveness and

substituted "skilled nursing facility" for "extended care

facility", "skilled nursing facilities" for "extended care

facilities", and "a" for "an".

Subsec. (l). Pub. L. 92-603, Sec. 278(a)(9), substituted "skilled

nursing facility" for "extended care facility" and "a" for "an".

Subsec. (m)(7). Pub. L. 92-603, Sec. 278(a)(10), substituted

"skilled nursing facility" for "extended care facility".

Subsec. (n). Pub. L. 92-603, Sec. 278(a)(11), substituted

"skilled nursing facility" for "extended care facility" and "a" for

"an".

Subsec. (o)(5), (6). Pub. L. 92-603, Sec. 234(e), added par. (5)

and redesignated former par. (5) as (6).

Subsec. (p). Pub. L. 92-603, Secs. 251(a)(1), (b)(1), 283(a),

inserted provisions covering physical therapy services of a

licensed physical therapist other than under an arrangement with

and under the supervision of a provider of services, clinic,

rehabilitation agency, or public health agency, inserted "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 individual as an inpatient of a

hospital or extended care facility", and extended definition of

"outpatient physical therapy services" to include outpatient speech

pathology services.

Subsec. (q). Pub. L. 92-603, Sec. 227(f), substituted "subsection

(b)(6) of this section" for "the last sentence of subsection (b) of

this section" in parenthetical phrase.

Subsec. (r). Pub. L. 92-603, Secs. 211(c)(2), 256(b), 264(a),

273(a), inserted "or (C) the certification required by section

1395x(a)(2)(E) of this title," inserted provision so as to include

doctors in one of the specified arts legally authorized to practice

such art in the country in which inpatient hospital services

referred to in section 1395y(a)(4) are furnished, added cl. (4)

covering doctors of optometry who are legally authorized to

practice optometry by the State in which they perform such

functions, but only with respect to establishing the necessity for

prosthetic lenses, and added cl. (5) providing for the inclusion of

chiropractor services.

Subsec. (s)(8). Pub. L. 92-603, Sec. 252(a), inserted "(including

colostomy bags and supplies directly related to colostomy care)"

after "organ".

Subsec. (u). Pub. L. 92-603, Secs. 227(d)(1), 278(a)(12),

substituted "skilled nursing facility, or home health agency, or,

for purposes of sections 1395(g) and 1395n(e) of this title, a

fund." for "extended care facility, or home health agency.".

Subsec. (v)(1). Pub. L. 92-603, Secs. 223(a), (b), (c), (d),

227(c)(1), (2), (3), (4), 249(b), 278(b)(11), inserted definition

of the costs of services, inserted provision that the regulation

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 reasonably based on

estimates of the costs necessary in the efficient delivery of

needed health services to individuals covered by the insurance

programs established under this subchapter, inserted parenthetical

provisions covering exclusion of costs, substituted "the necessary

costs of efficiently delivering covered services covered by the

insurance programs" for "the costs with respect to individuals

covered by the insurance programs", designated existing provisions

as subpars. (A) and (B), and added subpars. (C), (D), and (E), and

substituted "skilled nursing facilities" for "extended care

facilities".

Subsec. (v)(3). Pub. L. 92-603, Sec. 278(a)(13), substituted

"skilled nursing facility" for "extended care facility".

Subsec. (v)(4). Pub. L. 92-603, Sec. 223(f), added par. (4).

Former par. (4) redesignated (6).

Subsec. (v)(5). Pub. L. 92-603, Sec. 251(c), added par. (5).

Subsec. (v)(6). Pub. L. 92-603, Secs. 223(f), 251(c),

redesignated former par. (4) as (6).

Subsec. (v)(7). Pub. L. 92-603, Secs. 221(c)(4), 223(b), 251(c),

added par. (7).

Subsecs. (w), (y). Pub. L. 92-603, Sec. 278(a)(14), (15),

substituted "skilled nursing facility" for "extended care facility"

and "a" for "an".

Subsec. (z). Pub. L. 92-603, Secs. 234(b), 278(b)(6), added

subsec. (z) and substituted "skilled nursing facility" for

"extended care facility".

1971 - Subsec. (e)(5). Pub. L. 91-690 authorized the Secretary,

until January 1, 1976, to waive the requirement relating to the

provision of 24 hour nursing service rendered or supervised by a

registered professional nurse.

1968 - Subsec. (e). Pub. L. 90-248, Sec. 129(c)(9)(C), inserted

reference to section 1395n(b) in first and third sentences and

inserted "or diagnostic services" after "hospital services" in

third sentence.

Pub. L. 90-248, Sec. 143(a), in second sentence after par. (8),

changed definition of hospitals for purposes of making payments for

emergency hospital services by deleting provision that hospital

meet requirements of pars. (1) to (4), by requiring that such

hospitals have full-time nursing services, be licensed as a

hospital, and be primarily engaged in providing not nursing care

and related services but medical or rehabilitative care by or under

the supervision of a doctor of medicine or osteopathy.

Subsec. (p). Pub. L. 90-248, Secs. 129(c)(10), 133(b), struck out

definition of "outpatient hospital diagnostic services" and

inserted definition of "outpatient physical therapy services",

respectively.

Subsec. (r)(3). Pub. L. 90-248, Sec. 127(a), added cl. (3).

Subsec. (s). Pub. L. 90-248, Sec. 144(a)-(c), struck out "(unless

they would otherwise constitute inpatient hospital services,

extended care services, or home health services)" after "items or

services" in text preceding par. (1), inserted after "hospital" in

sentence following par. (9) "which, for purposes of this sentence,

means an institution considered a hospital for purposes of section

1395f(d) of this title)", and inserted sentence following par. (13)

providing that medical and other health services (other than

physicians' services and services incident to physicians' services)

furnished a patient of a facility which meets the definition of a

hospital for emergency services will be covered under the medical

insurance program only if such facility satisfies such health and

safety requirements as are appropriate for the item or service

furnished as the Secretary may determine are necessary.

Subsec. (s)(2)(A) to (C). Pub. L. 90-248, Sec. 129(a), designated

existing provisions as subpars. (A) and (B) and added subpar. (C).

Subsec. (s)(2)(D). Pub. L. 90-248, Sec. 133(a), added subpar.

(D).

Subsec. (s)(3). Pub. L. 90-248, Sec. 134(a), included in medical

and other health services diagnostic X-ray tests furnished in the

patient's home under the supervision of a physician if the tests

meet such health and safety conditions as the Secretary finds

necessary.

Subsec. (s)(6). Pub. L. 90-248, Sec. 132(a), provided that

payments may be made with respect to expenses incurred in the

purchase as well as in the rental of durable medical equipment.

Pub. L. 90-248, Sec. 144(d), inserted "other than in institution

that meets the requirements of subsection (e)(1) or (j)(1) of this

section".

Subsec. (s)(12), (13). Pub. L. 90-248, Sec. 129(b), added pars.

(12) and (13) which excluded from the diagnostic services referred

to in par. (2)(C) (other than physician's services) certain items

or service.

Subsec. (y)(3). Pub. L. 90-248, Sec. 129(c)(11), substituted

"1395e(a)(3)" for "1395e(a)(4)".

1966 - Subsec. (v)(1). Pub. L. 89-713 inserted provisions which

required that, in the case of extended care services furnished by

proprietary facilities, the regulations include provision for

specific recognition of a reasonable return on equity capital and

which placed a limitation on the rate of return of one and one-half

times the average of the rates of interest on obligations issued

for purchase by the Federal Hospital Insurance Trust Fund.

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec. 101(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-468, provided that: "The amendments

made by subsection (a) [amending this section] shall apply to items

and services furnished on or after July 1, 2001."

Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec. 102(d)], Dec. 21,

2000, 114 Stat. 2763, 2763A-468, provided that: "The amendments

made by this section [amending this section and section 1395y of

this title] shall apply to services furnished on or after January

1, 2002."

Amendment by section 1(a)(6) [title I, Sec. 103(a)] of Pub. L.

106-554 applicable to colorectal cancer screening services provided

on or after July 1, 2001, see section 1(a)(6) [title I, Sec.

103(c)] of Pub. L. 106-554, set out as a note under section 1395m

of this title.

Amendment by section 1(a)(6) [title I, Sec. 105(a), (b)] of Pub.

L. 106-554 applicable to services furnished on or after Jan. 1,

2002, see section 1(a)(6) [title I, Sec. 105(e)] of Pub. L.

106-554, set out as a note under section 1395l of this title.

Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec. 112(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-473, provided that: "The amendment made

by subsection (a) [amending this section] shall apply to drugs and

biologicals administered on or after the date of the enactment of

this Act [Dec. 21, 2000]."

Pub. L. 106-554, Sec. 1(a)(6) [title I, Sec. 113(c)], Dec. 21,

2000, 114 Stat. 2763, 2763A-473, provided that: "The amendment made

by subsection (a) [amending this section] shall apply to drugs

furnished on or after the date of the enactment of this Act [Dec.

21, 2000]."

Amendment by section 1(a)(6) [title IV, Sec. 430(b)] of Pub. L.

106-554 applicable to items and services furnished on or after July

1, 2001, see section 1(a)(6) [title IV, Sec. 430(c)] of Pub. L.

106-554, set out as a note under section 1395l of this title.

Pub. L. 106-554, Sec. 1(a)(6) [title IV, Sec. 431(b)], Dec. 21,

2000, 114 Stat. 2763, 2763A-525, provided that: "The amendment made

by subsection (a) [amending this section] shall apply with respect

to community mental health centers with respect to services

furnished on or after the first day of the third month beginning

after the date of the enactment of this Act [Dec. 21, 2000]."

EFFECTIVE DATE OF 1999 AMENDMENT

Amendment by section 1000(a)(6) [title II, Sec. 201(k)] of Pub.

L. 106-113 effective as if included in enactment of the Balanced

Budget Act of 1997, Pub. L. 105-33, except as otherwise provided,

see Sec. 1000(a)(6) [title II, Sec. 201(m)] of Pub. L. 106-113, set

out as a note under section 1395l of this title.

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title II, Sec.

221(b)(2)], Nov. 29, 1999, 113 Stat. 1536, 1501A-351, provided

that: "The amendments made by paragraph (1) [amending this section]

apply to services furnished on or after January 1, 2000."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

303(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A-361, provided that:

"The amendments made by this section [amending this section and

section 1395fff of this title] shall apply to services furnished by

home health agencies for cost reporting periods beginning on or

after October 1, 1999."

Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title III, Sec.

304(c)], Nov. 29, 1999, 113 Stat. 1536, 1501A-361, provided that:

"The amendments made by this section [amending this section and

enacting section 1320b-7f of this title] take effect on the date of

the enactment of this Act [Nov. 29, 1999], and in applying section

1861(o)(7) of the Social Security Act (42 U.S.C. 1395x(o)(7)), as

amended by subsection (a), the Secretary of Health and Human

Services may take into account the previous period for which a home

health agency had a surety bond in effect under such section before

such date."

Amendment by section 1000(a)(6) [title III, Sec. 321(k)(7)-(9)]

of Pub. L. 106-113 effective as if included in the enactment of the

Balanced Budget Act of 1997, Pub. L. 105-33, except as otherwise

provided, see section 1000(a)(6) [title III, Sec. 321(m)] of Pub.

L. 106-113, set out as a note under section 1395d of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 4102(a), (c) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 1998, see section

4102(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4103(a) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 2000, see section

4103(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4104(a)(1) of Pub. L. 105-33 applicable to

items and services furnished on or after Jan. 1, 1998, see section

4104(e) of Pub. L. 105-33, set out as a note under section 1395l of

this title.

Amendment by section 4105(a)(1), (b)(1) of Pub. L. 105-33

applicable to items and services furnished on or after July 1,

1998, see section 4105(d)(1) of Pub. L. 105-33, set out as a note

under section 1395m of this title.

Section 4106(d) of Pub. L. 105-33 provided that: "The amendments

made by this section [amending this section and sections 1395w-4,

1395aa, 1396a, and 1396n of this title] shall apply to bone mass

measurements performed on or after July 1, 1998."

Amendment by section 4201(c)(1), (2) of Pub. L. 105-33 applicable

to services furnished on or after Oct. 1, 1997, see section 4201(d)

of Pub. L. 105-33, set out as a note under section 1395f of this

title.

Section 4205(b)(2) of Pub. L. 105-33 provided that: "The

amendment made by paragraph (1) [amending this section] shall take

effect on January 1, 1998."

Section 4205(c)(2) of Pub. L. 105-33 provided that: "The

amendment made by paragraph (1) [amending this section] applies to

waiver requests made on or after January 1, 1998."

Section 4205(d)(4) of Pub. L. 105-33 provided that:

"(A) In general. - Except as otherwise provided, the amendments

made by the preceding paragraphs [amending this section and section

1395u of this title] take effect on the date of the enactment of

this Act [Aug. 5, 1997].

"(B) Current rural health clinics. - The amendments made by the

preceding paragraphs take effect, with respect to entities that are

rural health clinics under title XVIII of the Social Security Act

(42 U.S.C. 1395 et seq.) on the date of enactment of this Act, on

the date of the enactment of this Act [sic].

"(C) Grandfathered clinics. -

"(i) In general. - The amendment made by paragraph (3)(A)

[amending this section] shall take effect on the effective date

of regulations issued by the Secretary under clause (ii).

"(ii) Regulations. - The Secretary shall issue final

regulations implementing paragraph (3)(A) that shall take effect

no later than January 1, 1999."

Amendment by section 4312(d), (e) of Pub. L. 105-33 effective

Aug. 5, 1997, and may be applied with respect to items and services

furnished on or after Jan. 1, 1998, see section 4312(f)(3) of Pub.

L. 105-33, set out as a note under section 1395m of this title.

Section 4312(f)(2) of Pub. L. 105-33 provided that: "The

amendments made by subsection (b) [amending this section] shall

apply to home health agencies with respect to services furnished on

or after January 1, 1998. The Secretary of Health and Human

Services shall modify participation agreements under section

1866(a)(1) of the Social Security Act (42 U.S.C. 1395cc(a)(1)) with

respect to home health agencies to provide for implementation of

such amendments on a timely basis."

Section 4321(d)(1) of Pub. L. 105-33 provided that: "The

amendments made by subsection (a) [amending this section] shall

apply to discharges occurring on or after the date which is 90 days

after the date of the enactment of this Act [Aug. 5, 1997]."

Section 4404(b) of Pub. L. 105-33 provided that: "The amendments

made by subsection (a) [amending this section] apply to changes of

ownership that occur after the third month beginning after the date

of enactment of this section [Aug. 5, 1997]."

Amendment by section 4432(b)(5)(D), (E) of Pub. L. 105-33

applicable to items and services furnished on or after July 1,

1998, see section 4432(d) of Pub. L. 105-33, set out as a note

under section 1395i-3 of this title.

Section 4444(b) of Pub. L. 105-33 provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to items or services furnished on or after April 1, 1998."

Amendment by sections 4445 and 4446 of Pub. L. 105-33 applicable

to benefits provided on or after Aug. 5, 1997, except as otherwise

provided, see section 4449 of Pub. L. 105-33, set out as a note

under section 1395d of this title.

Amendment by section 4454(a)(1) of Pub. L. 105-33 effective Aug.

5, 1997, and applicable to items and services furnished on or after

such date, with provision that Secretary of Health and Human

Services issue regulations to carry out such amendment by not later

than July 1, 1998, see section 4454(d) of Pub. L. 105-33, set out

as an Effective Date note under section 1395i-5 of this title.

Amendment by section 4511(a)(1)-(2)(B), (d) of Pub. L. 105-33

applicable to services furnished and supplies provided on and after

Jan. 1, 1998, see section 4511(e) of Pub. L. 105-33, set out as a

note under section 1395k of this title.

Amendment by section 4512(a) of Pub. L. 105-33 applicable to

services furnished and supplies provided on and after Jan. 1, 1998,

see section 4512(d) of Pub. L. 105-33, set out as a note under

section 1395l of this title.

Section 4513(b) of Pub. L. 105-33 provided that: "The amendment

made by subsection (a) [amending this section] applies to services

furnished on or after January 1, 2000."

Section 4557(b) of Pub. L. 105-33 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to items

and services furnished on or after January 1, 1998."

Section 4604(c) of Pub. L. 105-33 provided that: "The amendments

made by this section [amending this section and section 1395bbb of

this title] apply to cost reporting periods beginning on or after

October 1, 1997."

Amendment by section 4611(b) of Pub. L. 105-33 applicable to

services furnished on or after Jan. 1, 1998, and for purposes of

applying such amendment, any home health spell of illness that

began, but did not end, before such date, to be considered to have

begun as of such date, see section 4611(f) of Pub. L. 105-33, set

out as a note under section 1395d of this title.

Section 4612(b) of Pub. L. 105-33 provided that: "The amendment

made by subsection (a) [amending this section] applies to services

furnished on or after October 1, 1997."

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-299 effective Oct. 1, 1996, see section

5 of Pub. L. 104-299, as amended, set out as a note under section

233 of this title.

EFFECTIVE DATE OF 1994 AMENDMENT

Section 107(b) of Pub. L. 103-432 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

services furnished on or after the first day of the first month

beginning more than one year after the date of the enactment of

this Act [Oct. 31, 1994]."

Amendment by section 145(b) of Pub. L. 103-432 applicable to

mammography furnished by the facility on and after the first date

that the certificate requirements of section 263b(b) of this title

apply to such mammography conducted by such facility, see section

145(d) of Pub. L. 103-432, set out as a note under section 1395m of

this title.

Section 146(c) of Pub. L. 103-432 provided that: "The amendments

made by this section [amending this section] shall take effect on

January 1, 1995."

Amendment by section 147(e)(1), (4), (5), (f)(3), (4)(A), (6)(A),

(B), (E) of Pub. L. 103-432 effective as if included in the

enactment of Pub. L. 101-508, see section 147(g) of Pub. L.

103-432, set out as a note under section 1320a-3a of this title.

Section 158(a)(2) of Pub. L. 103-432 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

with respect to cost reporting periods beginning on or after July

1, 1996."

EFFECTIVE DATE OF 1993 AMENDMENT

Section 13503(c)(2) of Pub. L. 103-66 provided that: "The

amendments made by paragraph (1) [amending this section and section

1395oo of this title] shall take effect October 1, 1993."

Section 13553(c) of Pub. L. 103-66 provided that: "The amendments

made by subsections (a) and (b) [amending this section] shall apply

to items furnished on or after January 1, 1994."

Section 13554(b) of Pub. L. 103-66 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

services furnished on or after January 1, 1994."

Section 13556(b) of Pub. L. 103-66 provided that: "The amendments

made by subsection (a) [amending this section] shall take effect as

if included in the enactment of section 4161(a)(2)(C) of OBRA-1990

[Pub. L. 101-508]."

Section 13564(b)(2) of Pub. L. 103-66 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to cost reporting periods beginning on or after October 1, 1993."

Section 13566(c) of Pub. L. 103-66 provided that: "The amendments

made by this section [amending this section and section 1395rr of

this title] shall apply to erythropoietin furnished on or after

January 1, 1994."

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 7 - SOCIAL SECURITY

SUBCHAPTER XVIII - HEALTH INSURANCE FOR AGED AND DISABLED

Part D - Miscellaneous Provisions

-HEAD-

Sec. 1395nn. Limitation on certain physician referrals

-STATUTE-

(a) Prohibition of certain referrals

(1) In general

Except as provided in subsection (b) of this section, if a

physician (or an immediate family member of such physician) has a

financial relationship with an entity specified in paragraph (2),

then -

(A) the physician may not make a referral to the entity for

the furnishing of designated health services for which payment

otherwise may be made under this subchapter, and

(B) the entity may not present or cause to be presented a

claim under this subchapter or bill to any individual, third

party payor, or other entity for designated health services

furnished pursuant to a referral prohibited under subparagraph

(A).

(2) Financial relationship specified

For purposes of this section, a financial relationship of a

physician (or an immediate family member of such physician) with

an entity specified in this paragraph is -

(A) except as provided in subsections (c) and (d) of this

section, an ownership or investment interest in the entity, or

(B) except as provided in subsection (e) of this section, a

compensation arrangement (as defined in subsection (h)(1) of

this section) between the physician (or an immediate family

member of such physician) and the entity.