−REFTEXT− 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,

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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. −MISC1− 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

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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

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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

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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

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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."

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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

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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)".

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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

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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

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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

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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

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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."

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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,".

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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

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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),

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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),

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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

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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

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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),

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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)

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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

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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

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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

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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

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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

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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

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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)

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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 −

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"(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

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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

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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:

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"(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

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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

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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

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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

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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

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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))),

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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

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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.

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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

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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

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(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.

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(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

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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

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(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

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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

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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

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(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.

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(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

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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

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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

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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.

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(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

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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

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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

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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 −

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(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

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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 −

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(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

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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

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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

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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

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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

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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

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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

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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,

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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,

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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.

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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

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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

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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

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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

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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."

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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:

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"(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

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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

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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

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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

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−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

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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.

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(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

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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

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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

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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:

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(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.

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(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

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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

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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

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(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

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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

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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

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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

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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

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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

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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

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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.

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(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

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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

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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

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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;

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(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,

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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

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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

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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.

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(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 −

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(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

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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.

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(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

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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

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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

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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.

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(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.

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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).

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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

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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,

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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

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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

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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

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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

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(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.

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(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.

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(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

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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

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(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

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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):

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(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

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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

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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.

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(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.

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(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

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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)

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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

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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

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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

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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

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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

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(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

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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

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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

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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

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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

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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

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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−

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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".

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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.

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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)

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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.

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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

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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

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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

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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

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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

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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.

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"(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

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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."

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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

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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

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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

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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

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(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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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(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

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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

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(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

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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

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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

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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

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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,

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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

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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.

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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)],

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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

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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

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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.

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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

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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.

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(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

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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

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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,

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(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

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(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

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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.

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−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.

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(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

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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

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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.

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(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:

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(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,

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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

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−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

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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

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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

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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

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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

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(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

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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

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(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

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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

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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 −

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(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

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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

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(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

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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

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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−

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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

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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

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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

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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

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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

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(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

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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

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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

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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.

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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

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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

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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 −

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(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

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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

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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)

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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

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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

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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

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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

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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

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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

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(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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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;

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(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

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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

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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

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(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

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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

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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

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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

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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)

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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

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(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

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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

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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

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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

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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

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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))

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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

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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

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(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

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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

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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

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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

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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

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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

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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

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(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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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(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

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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;

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(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

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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

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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

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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

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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

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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

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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

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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

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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.

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(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

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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

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(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;

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(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

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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

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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

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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).

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(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

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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

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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.

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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

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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

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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

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(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

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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

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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

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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

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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

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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;

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(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

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(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

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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,

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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

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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

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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

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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.

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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),

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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.

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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,

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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.

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(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.

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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

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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

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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.

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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)],

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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

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"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

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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),

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(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)

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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

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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.

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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

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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"

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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".

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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

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(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

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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).

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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

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"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

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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).

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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

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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).

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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)".

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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.

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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)

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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

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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

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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

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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

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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

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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),

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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).

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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).

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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

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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

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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

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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".

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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

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"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.

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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

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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".

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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

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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."

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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

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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

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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 −

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"(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.

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(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".

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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).

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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

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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".

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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

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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".

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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".

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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

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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).

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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

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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)

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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

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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

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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

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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

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"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

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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

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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

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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

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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)

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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.

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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,

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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,

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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.

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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.

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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.

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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

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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."

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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

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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

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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

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(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.

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