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recipients of medical assistance under the plan may receive care or services, and " (B) for the establishment or designation of a State - authority or authorities which shall be responsible for establishing and maintaining standards, other than, those relating to health, for such institutions;".. (b) Section 1902(a) of such Act (as amended by section 236(b) of this Act) is further amended— (1) by striking out "and" at the end of paragraph (31); (2) by striking out the period at the end of paragraph (32) and inserting in lieu thereof "; and"; and (3) by inserting after paragraph (32) the following new paragraph: "(33) provide— " (A) that the State health agency, or other appropriate State medical agency, shall be responsible for establishing a plan, consistent with regulations prescribed by the Secretary, for the review by appropriate professional health personnel of the appropriateness and quality of care and services furnished to recipients of medical assistance under the plan in order to provide guidance with respect thereto in the administration of the plan to the State agency established or designated pursuant to paragraph (5) and, where applicable, to the State agency described in the last sentence of this subsection; and " (B) that the State or local agency utilized by the Secretary for the purpose specified in the first sentence of section 1864(a), or, if such agency is not the State agency which is responsible for licensing health institutions, the State agency responsible for such licensing, will perform for the State agency administering or supervising the administration of the plan approved under this title the function of determining whether institutions and agencies meet the requirements for participation in the program under such plan." (c) Section 505(a) of such Act is amended— (1) by striking out "and" at the end of paragraph (13); (2) by striking out the period at the end of paragraph (14) and inserting in lieu thereof "; and"; and (3) by adding after paragraph (14) the following new paragraph: "(15) provides— " (A) that the State health agency, or other appropriate State medical agency, shall be responsible for establishing a plan, consistent with regulations prescribed by the Secretary, for the review by appropriate professional health personnel of the appropriateness and quality of care and services furnished to recipients of services under the plan and, where applicable, for providing guidance with respect thereto to the other State agency referred to in paragraph (2); and " (B) that the State or local agency utilized by the Secretary for the purpose specified in the first sentence of section 1864(a), or, if such agency is not the State agency which is responsible for licensing health institutions, the State agency responsible for such licensing, will perform the function of determining whether institutions and agencies meet the requirements for participation in the program under the plan under this title."

1417

^"'e, p. u i s.

42 USC i395aa.

si Stat. 923. ^^ ^^^ ^°^-

•'

42 USC isgsaa.

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 1418 Effective date.

PUBLIC LAW 92-603-OCT. 30, 1972

[86 STAT.

(J) x h e amendnieiits made by this section shall be effective January 1, 1973 (or earlier if the State plan so provides). RELATIONSHIP BETWEEN MEDICAID AND COMPREHENSIVE HEALTH CARE PROGRAMS

81 Stat. 903. 42 USC 1396a.

SEC. 240. Section 1902(a) (23) of the Social Security Act is amended by adding after the semicolon at the end thereof the following: "and a State plan shall not be deemed to be out of compliance with the requirements of this paragraph or paragraph (1) or (10) solely by reason of the fact that the State (or any political subdivision thereof) has entered into a contract with an organization which has agreed to provide care and services in addition to those offered under the State plan to individuals eligible for medical assistance who reside in the geographic area served by such organization and who elect to obtain such care and services from such organization;". PROGRAM FOR DETERMINING QUALIFICATIONS FOR CERTAIN HEALTH CARE PERSONNEL

SEC. 241. Title X I of the Social Security Act is amended by addAnte, p. 1386. j ^ g after section 1122 (as added by section 221(a) of this Act) the following new section: " P R O G R A M FOR DETERMINING QUALIFICATIONS FOR CERTAIN HEALTH CARE PERSONNEL

42 USC 1395.

42 USC 1396.

"SEC. 1123. (a) The Secretary, in carrying out his functions relating to the qualifications for health care personnel under title X VIII, shall develop (in consultation with appropriate professional health organizations and State health and licensure agencies) and conduct (in conjunction with State health and licensure agencies) until December 31, 1977, a program designed to determine the proficiency of individuals (who do not otherwise meet the formal educational, professional membership, or other specific criteria established for determining the qualifications of practical nurses, therapists, laboratory technicians, and technologists, and cytotechnologists. X-ray technicians, psychiatric technicians, or other health care technicians and technologists) to perform the duties and functions of practical nurses, therapists, laboratory technicians, technologists, and cytotechnologists, X-ray technicians, psychiatric technicians, or other health care technicians and technologists. Such program shall include (but not be limited to) the employment of procedures for the formal testing of the proficiency of individuals. In the conduct of such program, no individual who otherwise meets the proficiency requirements for any health care specialty shall be denied a satisfactory^ proficiency rating solely because of his failure to meet formal educational or professional membership requirements, (b) If any individual has been determined, under the program established pursuant to subsection (a), to be qualified to perform the duties and functions of any health care specialty, no person or provider utilizing the services of such individual to perform such duties and functions shall be denied payment, under title X VIII or under any State plan approved under title X IX, for any health care services provided by such person on the grounds that such individual is not qualified to perform such duties and functions."

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1419

PENALTIES FOR FRAUDULENT ACTS AND FALSE REPORTING UNDER MEDICARE AND MEDICAID

S E C 242. (a) Section 1872 of the Social Security Act is amended by striking out "208,". (b) Title X VIII of the Social Security Act is amended by adding at the end thereof (after the new section added by section 226(a) of this Act) the following new section:

42 USC 1395ii.

Ante, p. 1395.

((PENALTIES " S E C 1877. (a) Whoever— "(1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under this title, " (2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining rights to any such benefit or payment, "(3) having knowledge of the occurrence 01 any event affecting (A) his initial or continued right to any such benefit or payment, or (B) the initial or continued right to any such benefit or payment of any other individual in whose behalf he has applied for or is receiving such benefit or payment, conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized, or "(4) having made application to receive any such benefit or payment for the use and benefit of another and having received it, knowingly and willfully converts such benefit or payment or any part thereof to a use other than for the use and benefit of such other person, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. "(b) Whoever furnishes items or services to an individual for which payment is or may be made under this title and who solicits, offers, or receives any— "(1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or "(2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. "(c) Whoever knowingly and willfully makes or causes to be made, or induces or seeks to induce the making of, any false statement or representation of a material fact with respect to the conditions or operation of any institution or facilitj in order that such institution or facility may qualify (either upon initial certification or upon recertification) as a hospital, skilled nursing facility, or home health agency (as those terms are defined in section 1861), shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $2,000 or imprisoned for not more than 6 months, or both." (c) Title A l X of such Act is amended by adding after section 1908 the following new section;

42 USC lagsx, 42 USC 1396.

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[86 STAT.

((P E N A L T I E S "SEC. 1909. (a) Whoever— "(1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under a State plan approved under this title, "(2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining rights to such benefit or payment, "(3) having knowledge of the occurrence of any event affecting (A) his initial or continued right to any such benefit or payment, or (B) the initial or continued right to any such benefit or payment of any other individual in whose behalf he has applied for or is receiving such benefit or payment, conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized, or "(4) having made application to receive any such benefit or payment for the use and benefit of another and having received it, knowingly and willfully converts such benefit or payment or any part thereof to a use other than for the use and benefit of such other person, shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. "(b) Whoever furnishes items or services to an individual for which, payment is or may be made in whole or in part out of Federal funds under a State plan approved under this title and who solicits, offers, or receives any— "(1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or "(2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both. "(c) Whoever knowingly and willfully makes or causes to be made,, or induces or seeks to induce the making of, any false statement or representation of a material fact with respect to the conditions or operation of any institution or facility in order that such institution or facility may qualify (either upon initial certification or upon recertification) as a hospital, skilled nursing home, intermediate care facility, or home health agency (as those terms are employed in this title) shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $2,000 or imprisoned for not more than 6 months, or both." (d) The provisions of amendments made by this section shall not be applicable to any acts, statements, or representations made or committed prior to the enactment of this Act. PROVIDEK REIMBURSEMENT REVIEW BOARD

'' "

SEC. 243. (a) Title X VIII of the Social Security Act is amended by adding at the end thereof (after the new sections added by section Ante. p. 1419. 226(a) and section 242(b) of this Act) the following new section:

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"PROVIDER REIMBURSEMENT REVIEW BOARD

"SEC. 1878. (a) Any provider of services which has filed a required cost report within the time specified in regulations may obtain a hearing with respect to such cost report by a Provider Reimbursement Review Board (hereinafter referred to as the 'Board') which shall be established by the Secretary in accordance with subsection (h), if— "(1) such provider— " (A) is dissatisfied with a final determination of the organization serving as its fiscal intermediary pursuant to section 1816 as to the amount of total program reimbursement due the provider for the items and services furnished to individuals for which payment may be made under this title for the period covered by such report, " (B) has not received such final determination from such intermediary on a timely basis after filing such report, where such report complied with the rules and regulations of the Secretary relating to such report, or " (C) has not received such final determination on a timely basis after filing a supplementary cost report, where such cost report did not so comply and such supplementary cost report did so comply, " (2) the amount in controversy is $10,000 or more, and "(3) such provider files a request for a hearing within 180 days after notice of the intermediary's final determination under paragraph (1)(A) or with respect to appeals pursuant to paragraph (1)(B) or (C), within 180 days after notice of such determination would have been received if such determination had been made on a timely basis. " (b) The provisions of subsection (a) shall apply to any group of providers of services if each provider of services in such group would, upon the filing of an appeal (but without regard to the $10,000 limitation), be entitled to such a hearing, but only if the matters in controversy involve a common question of fact or interpretation of law or regulations and the amount in controversy is, in the aggregate, $50,000 or more. "(c) A t such hearing, the provider of services shall have the right to be represented by counsel, to introduce evidence, and to examine and cross-examine witnesses. Evidence may be received at any such hearing even though inadmissable under rules of evidence applicable to court procedure. " (d) A decision by the Board shall be based upon the. record made at such hearing, which shall include the evidence considered by the intermediary and such other evidence as may be obtained or received by the Board, and shall be supported by substantial evidence when the record is viewed as a whole. The Board shall haverthe power to affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a cost report and to make any other revisions on matters covered by such cost report (including revisions adverse to the provider of services) even though such matters were not considered by the intermediary in making such final determination. "(e) The Board shall have full power and authority to make rules and establish procedures, not inconsistent with the provisions of this title or regulations of the Secretary, which are necessary or appropriate to carry out the provisions of this section. In the course of any hearing the Board may administer oaths and affirmations. The provisions of subsections (d), (e), and (f) of section 205 with respect to subpenas

Establishment.

Conditions.

42 USC 1395h.

Group appeal.

Rules and regulations.

42 USC 405.

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 1422 42 USC 401. Board decision, reviewability.

5 USC 701. 42 USC 405.

42 USC 1395y. Membership. 5 USC ibl et seq.

eompensation.

5 USC 5332 note. Technical and clerical assistance.

42 USC 1395h. Effective date. 42 USC 1395.

PUBLIC LAW 92-603-.OCT. 30, 1972

[86 STAT.

shall apply to the Board to the same extent as they apply to the Secretary with respect to title II. "(f) A decision of the Board shall be final unless the Secretary, on his own motion, and within 60 days after the provider of services is notified of the Board's decision, reverses or modifies (adversely to such provider) the Board's decision. In any case where such a reversal or modification occurs the provider of services may obtain a review of such decision by a civil action commenced within 60 days of the date he is notified of the Secretary's reversal or modification. Such action shall be brought in the district court of the United States for the judicial district in which the provider is located or in the District Court for the District of Columbia and shall be tried pursuant to the applicable provisions under chapter 7 of title 5, United States Code, notwithstanding any other provisions in section 205. " (g) The finding of a fiscal intermediary that no payment may be made under this title for any expenses incurred for items or services furnished to an individual because such items or services are listed in section 1862 shall not be reviewed by the Board, or by any court pursuant to an action brought under subsection (f). " (h) The Board shall be composed of five members appointed by the Secretary without regard to the provisions of title 5, United States Cyode, governing appointments in the competitive services. Two of such members shall be representative of providers of services. All of the members of the Board shall be pereons knowledgeable in the field of cost reimbursement, and at least one of them shall be a certified public accountant. Members of the Board shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding.the late specified (at the time the service involved is rendered by such members) for grade GS-18 in section 5332 of title 5, United States Code. The term of office shall be three years, except that the Secretary shall appoint the initial members of the Board for shorter terms to the extent necessary to permit staggered terms of office. "(i) The Board is authorized to engage such technical assistance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Board such secretarial, clerical, and other assistance as the Board may require to carry out its functions." (b) The first sentence of section 1816(a) of such Act is amended by striking out "subject to" in the parenthetical phrase and inseiting in lieu thereof "subject to the provisions of section 1878 and to". (c) The amendments made by this section shall apply with respect to cost reports of providers of services, as defined in title X VIII of the Social Security Act, for accounting periods ending on or after June 30, 1973. VALIDATIGX OF SURVEYS MADE BY JOINT COMMISSION ON THE ACCREDITATION OF HOSPITALS

79 Stat. 326. 42 USC 1395aa.

42 USC 1395cc.

SEC. 244. (a) Section 1864 of the Social Security Act is amended by inserting at the end thereof the following new subsection: "(c) The Secretary is authorized to enter into an agreement with any State under which the appropriate State or local agency which performs the certification function described in subsection (a) will survey, on a selective sample basis (or where the Secretary finds that a survey is appropriate because of substantial allegations of the existence of a significant deficiency or deficiencies which would, if found to be present, adversely affect health and safety of patients), hospitals which have an agreement with the Secretary under section 1866 and which are accredited by the Joint Commission on the Accreditation of

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1423

Hospitals. The Secretary shall pay for such services in the manner prescribed in subsection (b). " (b)(1) Section 1865 of such Act, as amended by section 234 of this Act, is further amended by striking out "SEC. 1865" and the first two Ante, p. 1413. sentences of such section and inserting in lieu thereof the following: "SEC. 1865. (a) Except as provided in subsection (b) and the second sentence of section 1863, if— 42 USC i395z. " (1) an institution is accredited as a hospital by the Joint Commission on Accreditation of Hospitals, and "(2) such institution (if it is included within a survey described in section 1864(c)) authorizes the Commission to release to the Ante, p. 1422. Secretary (on a confidential basis) upon his request (or such State agency as the Secretary may designate) a copy of the most current accreditation survey of such institution made by such Commission, then, such institution shall be deemed to meet the requirements of the numbered paragraphs of section 1861(e); except— 42 USC ISQSX. "(3) paragraph (6) thereof, and "(4) any standard, promulgated by the Secretary pursuant to paragraph (9) thereof, which is higher than the requirements prescribed for accreditation by such Commission. If such Commission, as a condition for accreditation of a hospital, requires a utilization review plan (or imposes another requirement which serves substantially the same purpose) or imposes a standard which the Secretary determines is at least equivalent to the standard promulgated by the Secretary as described in paragraph (4) of this subsection, the Secretary is authorized to find that all institutions so accredited by such Commission comply also with section 1861(e)(6) or the standard described in such paragraph (4), as the case may be." (2) Such section 1865 (as so amended) is further amended by adding after subsection (a) thereof the following: " (b) Notwithstanding any other provision of this title, if the Secretary finds following a survey made pursuant to section 1864(c) that Ante, p. 1422. an institution has significant deficiencies (as defined in regulations pertaining to health and safety), such institution shall, after the date of notice of such finding to the hospital and for such period as may be prescribed in regulations, be deemed not to meet the requirements of the numbered paragraphs of section 1861(e)." (c) Section 1861(e) of such Act, as amended by sections 211 and 234 of this Act, is further amended by striking out, in subsection (9),,^^^'^' PP- *^^^ everything after the word "institution" and inserting in lieu thereof 1412. a period. (d) Section 1875(b) of such Act, as amended by sections 222 and Ante, 226 of this Act, is further amended by inserting:, after "including" and 1404. p p. 1393, before "the operation", the following: "a validation of the accreditation process of the Joint Commission on the Accreditation of Hospitals,". P A Y M E N T FOR DURABLE MEDICAL EQUIPMENT

UNDER

MEDICARE

SEC. 245. (a) The Secretary is authorized to conduct reimbursement experiments designed to eliminate unreasonable expenses resulting from prolonged rentals of durable medical equipment described in section 1861(s)(6) of the Social Security Act. (b) Such experiment may be conducted in one or more geographic areas, as the Secretary deems appropriate, and may, pursuant to agreements with supf)liers, provide for reimbursement for such equipment on a lump-sum basis whenever it is determined (in accordance

42 USC isgsx.

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[86 STAT.

with guidelines established by the Secretary) that a lump-sum payment would be more ecjonomical than the anticipated period of rental payments. Such experiments may also provide for incentives to beneficiaries (including waiver of the 20 percent coinsurance amount 42 USC 1395Z applicable under section 1833 of the Social Security Act) to purchase than the reasonable charge for new equipment. (c) The Secretary is authorized, at such time as he deems appropriate, to implement on a nationwide basis any such reimbursement procedures which he finds to be workable, desirable and economical and which are consistent with the purposes of this section. 81 Stat. 850. (d) Section 1833(f) of the Social Security Act is amended— (1) by striking out "with respect to purchases of inexpensive equipment (as determined by the Secretary)" and inserting in lieu thereof " (A) ", and (2) by inserting before the period at the end thereof the following: ", and (B) with respect to purchases of used equipment the Secretary is authorized to waive the 20 percent coinsurance amount applicable under subsection (a) whenever the purchase price of such equipment is at least 25 percent less than the reasonable charge for comparable new equipment." (3) by inserting " (1) " after " (f) " and by adding after paragraph (1) the following new paragraph: "(2) I n the case of rental of durable medical equipment, the Secretary may, pursuant to agreements made with suppliers of such equipment, establish any reimbursement procedures (including payment on a lump-sum basis in lieu of prolonged rental payments) which he finds to be equitable, economical, and feasible." UNIFORM STANDARDS FOR S K I L L E D N U R S IX G F A C I L I T I E S TINDER MEDICARE A N D MEDICAID
 * used equipment whenever the purchase price is at least 25 percent less

42 USC 1396a.

yinte, p. 1412.

gj,c. 246. (a) Section 1902(a) (28) of the Social Security Act is amended to read as follows: "(28) provide that any skilled nursing facility receiving payments under such plan must satisfy all of the requirements contained in section 1861(j), except that the exclusion contained therein with respect to institutions which are primarily for the care and treatment of mental diseases and tuberculosis shall not apply for purposes of this title;" (b) Section 1861(j) of such Act, as amended by section 234.(d) of this Act, is further amended— (1) by striking out "and" at the end of paragraph (10); (2) by redesignating paragraph (11) as paragraph (15); (3) by inserting after paragraph (10) the following new paragraphs: "(11) supplies full and complete information to the Secretary or his delegate as to the identity (A) of each person who has any direct or indirect ownership interest of 10 per centum or more in such skilled nursing facility or who is the owner (in whole or in part) of any mortgage, deed of trust, note, or other obligation secured (in whole or in part) by such skilled nursing facility or any of the property or assets of such skilled nursing facility, (B) in case a skilled nursing facility is organized as a corporation, of each officer and director of the corporation, and (C) in case a skilled nursing facility is organized as a partnership, of each partner; and promptly reports any changes which would affect the current accuracy of the information so required to be supplied;

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"(12) cooperates in an effective program which provides for a regular program of independent medical evaluation and audit of the patients in the f acility^ to the extent required by the programs in which the facility paiticipates (including medical evaluation of each patient's need for skilled nursing facility care); "(13) meets such provisions of the Life Safety Code of the National Fire Protection Association (21st edition, 1967) as are applicable to nursing homes; except that the Secretary may waive, for such periods as he deems appropriate, specific provisions of such Code which if rigidly applied would result in unreasonable hardship upon a nursing home, but only if such waiver will not adversely affect the health and safety of the patients; except that the provisions of such Code shall not apply in any State if the Secretary finds that in such State there is in effect a fire and safety code, imposed by State law, which adequately protects patients in nursing facilities; and" and (4) by adding at the end of paragraph (15) (as redesignated by paragraph (2) of this subsection) the following new sentence: "Notwithstanding any other provision of law, all information concerning skilled nursing facilities required by this subsection to be filed with the Secretary shall be made available to Federal or State employees for purposes consistent with the effective administration of programs established under titles X VIII and X IX of this Act." (c) The amendments made by this section shall be effective July 1, 1973. LEVEL OF CARE REQUIREMENTS TOR

SKILLED N U R S IX G HOME

42 USC 1395, 1396. Effective date.

SERVICES

SEC. 247. (a) Section 1814(a)(2)(C) of the Social Security Act is amended by striking out everything which appears before " ( o r services" and inserting in lieu thereof the following: " (C) in the case of post hospital extended care services, such services are or were required to be ariven because the individual needs or needed on a daily basis skilled nursing care (provided directly by or requiring the supervision of skilled nursing personnel) or other skilled rehabilitation sendees, which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis, for any of the conditions with respect to which he was receiving inpatient hospital sendees". (b) Section 1905 of the Social Security Act, as amended by section 212 of this Act, is further amended by adding at the end thereof the following new subsection: "(f) For purposes of this title, the term 'skilled n u m n g facility services' means services which are or were required to be.given an individual who needs or needed on a daily basis skilled nursing care (provided directly by or requiring the supervision of skilled nursing personnel) or other skilled I'ehabilitation services which as a practical matter can only be provided in a skilled nursing facility on an inpatient basis." (c) The amendments made by this section shall be effective with respect to services furnished after December 31, 1972.

42 USC 1395f.

Ante, p. 1384. "Skilled nursing facility services. "

Effective date.

M O D i n C A T I O N OF MEDICARE'S 1 4 - D A Y TRANSFER REQUIREMENT FOR EXTENDED CARE BENEFITS 42 USC 139Sx.

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[86 STAT.

after discharge from such hospital, or (B) within 28 days after such discharge, in the case of an individual who was unable to be admitted to a skilled nursing facility within such 14 days because of a shortage of appropriate bed space m the geographic area in which he resides, or (^C) within such time as it would be medically appropriate to begin an active course of treatment, in the case of an individual whose condition is such that skilled nursing facility care would not be medically appropriate within 14 days after discharge from a hospital;" REIMBURSEMENT RATES FOR SKILLED N U R S I N G A N D INTERMEDIATE CARE FACILITIES

SEC. 249. (a) Section 1902(a) (13) of the Social Security Act, as Ante, p. 1410. amended by section 221(c)(5) of this Act, is further amended— (1) by inserting "and" at the end of subparagraph (D), and (2) by inserting after subparagraph (D) the following new paragraph: " (E) effective July 1, 1976, for payment of the skilled nursing facility and intermediate care facility services provided under the plan on a reasonable cost related basis, as determined in accordance with methods and standards which shall be developed by the State on the basis of cost-finding methods approved and verified by the Secretary;". (b) Section 1861(v)(l) of such Act, as amended by sections 223 Ante, p. 1405. ^nd 227 of this Act, is further amended by inserting after subparagraph (D) the following new subparagraph: " (E) Such regulations may, in the case of skilled nursing facilities in any State, provide for the uses of rates, developed by the State in which such facilities are located, for the payment of the cost of skilled nursing facility services furnished under the State's plan approved 42 USC 1396. under title X IX (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 title 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; except that the foregoing provisions of this subparagraph shall not apply to any skilled nursing facility in such State if— " (i) such facility is a distinct part of or directly operated by a hospital, or "(ii) such facility operates in a close, formal satellite relationship (as defined in regulations of the Secretary) with a participating hospital or hospitals. Xotwithstanding the previous provisions of this paragraph in the case of a facility specified in clause (ii) of this subparagraph, the reasonable cost or any services furnished by such facility as determined by the Secretary under this subsection shall not exceed 150 percent of the costs determined by the application of this subparagraph (without regard to such clause (ii)).". MEDICAID CERTIFICATION A N D APPROVAL OF SKILLED NURSING FACILITIES

SEC. 249A. (a) Title X IX of the Social Security Act is amended by adding at the end thereof (after the new section 1909 added by Ante, p. 1420. ^\^\^ Act) the following new section:

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1427

•CERTIFICATION A N D APPROVAL OF SKILLED N U R S I N G FACILITIES

"SEC. 1910. (a) Whenever the Secretary certifies an institution in a State to be qualified as a skilled nursing facility under title X VIII, such institution shall be deemed to meet the standards for certification as a skilled nursing facility for purposes of section 1902(a) (28). " (b) The Secretary shall notify the State agency administering the medical assistance plan of his approval or disapproval of any institution which has applied for certification by him as a qualified skilled nursing facility." (b) Section 1866(a)(1) of the Social Security Act is amended by adding at the end thereof the following sentence: "An agreement under this paragraph with an extended care facility shall be for a term of not exceeding 12 months, except that the Secretary may extend such term for a period not exceeding 2 months, where the health and safety of patients will not be jeopardized thereby, if he finds that such extension is necessary to prevent irreparable harm to such facility or hardship to the individuals being furnished items or services hj such facility or if he finds it impracticable within such 12-month period to determine whether such facility is complying with the provisions of this title and regulations thereunder." (c) Section 1866(b) of such Act is amended by— (1) striking out, in the material which precedes clause (1), "terminated-" and inserting in lieu thereof "terminated (and in the case of an extended care facility, prior to the end of the term specified in subsection (a)(1)) - "; and (2) by striking out all of clause (3) appearing after the phrase "Any termination shall be applicable—" and inserting in lieu thereof the following: "(3) in the case of inpatient hospital services (including tuberculosis hospital services and inpatient psychiatric hospital services) or post-hospital extended care services, with respect to services furnished after the effective date of such termination, except that payment may be made for up to thirty days with respect to inpatient institutional services furnished to any eligible individual who was admitted to such institution prior to the effective date of such termination,". (d) Section 1866(c) of such Act is amended by inserting " (1) " after " (c) " and by adding at the end thereof the following new paragraph: "(2) I n the case of a skilled nursing facility participating in the programs established by this title and title X IX, the Secretary may enter into an agreement under this section only if such facility has been approved pursuant to section 1910, and the term of any such agreement shall be in accordance with the period of approval of eligibility specified by the Secretary pursuant to such section." (e) The provisions of this section shall be effective with respect to agreements filed with the Secretary under section 1866 of the Social Security Act by skilled nursing facilities (as defined in section 1861(j) of such Act) before, on, or after the date of enactment of this Act, but accepted by him on or after such date. (f) Notwithstanding any other provision of law, any agreement, filed by a skilled nursing facility (as defined in section 1861(j) of the Social Security Act) with the Secretary under section 1866 of such Act and accepted by him prior to the date of enactment of this Act, which was in effect on such date shall be deemed to be for a specified term ending on December 31, 1973.

42 USC 1395. Ante, p. 1424. Notification.

42 USC 1395CC.

42 USC 1395, 1396.

Effective date.

42 USC 139Sx. Termination date.

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Page:United States Statutes at Large Volume 86.djvu/1470

 1428

PUBLIC LAW 92-^03_OCT. 30, 1972

[86 STAT.

P A Y M E N T S TO STATES U N D E R MEDICAID FOR C O M P E N S A T I O N OF INSPECTORS RESPONSIBLE FOR M A I N T A I N I N G C O M P L I A N C E W I T H FEDERAL STANDARDS

SEC. 249B. Section 1903(a) of the Social Security Act, as amended An<e, pp. 1380, by sections 207(a)(2) and 235(a) of this Act, is further amended, Effective pe- effective for the period beginning October 1, 1972, and ending June "od30, 1974, by redesignating paragraph (4) as paragraph (5), and by inserting after paragraph (3) the following new paragraph: "(4) an amount equal to 100 per centum of the sums expended during such quarter (as found necessary by the Secretary for the proper and efficient administration of the State plan) which are attributable to compensation or training of personnel (of the State agency or any other public agency) responsible for inspecting public or private institutions (or portions thereof) providing long-term care to recipients of medical assistance to determine whether such institutions comply with health or safety standards applicable to such institutions under this Act; plus". DISCLOSURE OF INFORMATION C O N C E R N I N G THE P E R FOR M A N C E OF CARRIERS, I N T E R M E D I A R I E S, STATE A G E N C I E S, A N D PROVIDERS OF SERVICES U N D E R MEDICARE A N D MEDICAID

42 USC 1306.

SEC. 249C. (a) Section 1106 of the Social Security Act is amended by adding at the end thereof the following new subsections: " (d) Notwithstanding any other provision of this section the Secretary shall make available to each State agency operating a program 42 USC 1396. under title X IX and shall, subject to the limitations contained in subsection (e), make available for public inspection in readily accessible form and fashion, the following official reports (not including, however, references to any internal tolerance rules and practices that may be contained therein, internal working papere or other informal memoranda) dealing with the operation of the health programs established 42 USC 1395, by titles X VIII and X IX — 1396 "(1) individual contractor performance reviews and other formal evaluations of the performance of carriers, intermediaries, and State agencies, including the reports of follow-up reviews; "(2) comparative evaluations of the performance of such contractors, including comparisons of either overall performance or of any particular aspect of contractor operation; and "(3) program validation survey reporte and other formal evaluations of the performance of providers of services, including the reports of follow-up reviews, except that such reports shall not identify individual patients, individual health care practitioners, or other individuals, contractor, re"(g) jy[Q report described in subsection (d) shall be made public )rt review. -^^ ^^^ Secretary or the State title X IX agency until the contractor or provider of services whose performance is being evaluated has had a reasonable opportunity (not exceeding 60 days) to review such report and to offer comments pertinent parts of which may be incorporated in the public report; nor shall the Secretary be required to include in any such report information with respect to any deficiency (or improper practice or procedures) which is known by the Secretary to have been fully corrected, within 60 days of the date such deficiency was first brought to the attention of such contractor or provider of services, as the case may be." Effective date. (b) ^ h e provisions of subsection (a) shall apply with respect to reports which are completed by the Secretary after the third calendar month following the enactment of this Act.

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PUBLIC LAW 92-603-OCT. 30, 1972

1429

LIMITATION ON INSTITUTIONAL CARE

SEC. 249D. Section 121(b) of the Social Security Amendments of 1965 is amended by adding at the end thereof the following new ^j use U96b sentence: "After the date of enactment of the Social Security Amend- note. ments of 1972, Federal matching shall not be available for any portion of any payment by any State under title I, X, X IV, or X VI, 42 or part A of title IV, of the Social Security Act. for or on account 1201,use 301, 1351, 1381, of any medical or any other type of remedial care provided by an 601. institution to any individual as an inpatient thereof, in the case of any State which has a plan approved under title X IX of such Act, 42 USC 1396. if such care is (or could be) provided under a State plan approved under title X IX of such Act by an institution certified under such title X IX. ". DETERMINING ELIGIBILITY FOR ASSISTANCE UNDER TITLE XIX FOR CERTAIN INDIVIDUALS

SEC. 249E. For purposes of section 1902(a) (10) of the Social Security Act any individual who, for the month of August 1972, was eligible for or receiving aid or assistance under a State plan approved under title I, X, X IV, or X VI, or part A of title IV of such Act and who for such month was entitled to monthly insurance benefits under title II of such Act shall be deemed to be eligible for such aid or assistance for any month thereafter prior to October 1974 if such individual would have been eligible for such aid or assistance for such month had the increase in monthly insurance benefits under title II of such Act resulting from enactment of Public Law 92-336 not been applicable to such individual.

42 USC 1396a.

42 USC 4 0 1.

Ante, p. 4 0 6.

PROFESSIONAL STANDARDS REVIEW

SEC. 249F. (a) The heading to title X I of the Social Security Act is amended by striking out

42 USC isoi,

"TITLE XI—GENERAL PROVISIONS" and inserting in lieu thereof "TITLE XI—GENERAL PROVISIONS AND PROFESSIONAL STANDARDS R E VI E W " P A R T A—GENERAL PROVISIONS"

(b) Title X I of such Act is further amended by adding the following: "PART

B—PROFESSIONAL STANDARDS REVIEW it

DECLARATION OF PURPOSE

"SEC. 1151. I n order to promote the effective, efficient, and economical delivery of health care services of proper quality for which payment may be made (in whole or in part) under this Act and in recognition of the interests of patients, the public, practitioners, and providers in improved health care services, it is the purpose of this part to assure, through the application of suitable procedures of professional standards review, that the services for which payment may be made under the Social Security Act will conform to appropriate professional standards for the provision of health care and that payment for such services will be made—

^"'*' P- ^'•S.

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Page:United States Statutes at Large Volume 86.djvu/1472

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PUBLIC LAW 92-603-OCT. 30, 1972

[86 STAT.

"(1) only when, and to the extent, medically necessary, as determined in the exercise of reasonable limits of professional discretion; and "(2) in the case of services provided by a hospital or other health care facility on an inpatient basis, only when and for such period as such services cannot, consistent with professionally recognized health care standards, effectively be provided on an outpatient basis or more economically in an inpatient health care facility of a different type, as determined in the exercise of reasonable limits of professional discretion. "DESIGNATION OF PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS

,,

"Qualified organization.

"SEC. 1152. (a) The Secretary shall (1) not later than January 1, 1974, establish throughout the United States appropriate areas with respect to which Professional Standards Review Organizations may be designated, and (2) at the earliest practicable date after designation of an area enter into an agreement with a qualified organization whereby such an organization shall be conditionally designated as the Professional Standards Review Organization for such area. If, on the basis of its performance during such period of conditional designation, the Secretary determines that such organization is capable of fulfilling, in a satisfactory manner, the obligations and requirements for a Professional Standards Review Organization under this part, he shall enter into an agreement with such organization designating it as the Professional Standards Review Organization for such area. "'(h) For purposes of subsection (a), the term 'qualified organization ' mCaUS

,

"(1) when used in connection with any area—" (A) an organization (i) which is a nonprofit professional association (or a component organization thereof), (ii) which is composed of licensed doctors of medicine or osteopathy engaged in the practice of medicine or surgery in such area, (iii) the membership of which includes a substantial proportion of all such physicians in such area, (iv) which is organized in a manner which makes available professional competence to review health care services of the types and kinds with respect to which Professional Standards Review Organizations have review responsibilities under this part, (v) the membership of which is voluntary and open to all doctors of medicine or osteopathy licensed to engage in the practice of medicine or surgery in such area without requirement of membership in or payment of dues to any organized medical society or association, and (vi) which does not restrict the eligibility of any member for service as an officer of the Professional Standards Review Organization or eligibility for and assignment to duties of such Professional Standards Review Organization, or, subject to subsection (c)(i), " (B) such other public, nonprofit private, or other agency or organization, which the Secretary determines, in accordance with criteria prescribed by him in regulations, to be of professional competence and otherwise suitable; and "(2) an organization which the Secretary, on the basis of his examination and evaluation of a formal plan submitted to him by the association, agency, or organization (as well as on the basis of other relevant data and information), finds to be willing to perform and capable of performing, in an effective, timely, and objective manner and at reasonable cost, the duties, functions, and

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Page:United States Statutes at Large Volume 86.djvu/1473

 \ 86

STAT.]

activities of a Professional Standards Review Organization required by or pursuant to this part. " (c)(1) The Secretary shall not enter into any agreement under this part under which there is designated as the Professional Standards Review Organization for any area any organization other than an organization referred to in subsection (b)(1)(A) prior to January 1, 1976, nor after such date, unless, in such area, there is no organization referred to in subsection (b)(1)(A) which meets the conditions specified in subsection (b)(2). "(2) Whenever the Secretary shall have entered into an agreement under this part under which there is designated as the Professional Standards Review Organization for any area any organization other than an organization referred to in subsection (b)(1)(A), he shall not renew such agreements with such organization if he determines that— " (A) there is in such area an organization referred to in subsection (b)(1)(A) which (i) has not been previously designated as a Professional Standards Review Organization, and (ii) is willing to enter into an agreement under this part under which such organization would be designated as the Professional Standards Review Organization for such area; " (B) such organization meets the conditions specified in subsection (b)(2); and " (C) the designation of such organization as the Professional Standards Review Organization for such area is anticipated to result in substantial improvement in the performance in such area of the duties and functions required of such organizations under this part. " (d) Any such agreement under this part with an organization (other than an agreement established pursuant to section 1154) shall be for a term of 12 months; except that, prior to the expiration of such term such agreement may be terminated— " (1) by the organization at such time and upon such notice to the Secretary as may be prescribed in regulations (except that notice of more than 3 months may not be required); or "(2) by the Secretary at such time and upon such reasonable notice to the organization as may be prescribed in regulations, but only after the Secretary has determined (after providing such organization with an opportunity for a formal hearing on the matter) that such organization is not substantially complying with or effectively carrying out the provisions of such agreement. "(e) In order to avoid duplication of functions and unnecessary review and control activities, the Secretary is authorized to waive any or all of the revicAv, certification, or similar activities otherwise required under or pursuant to any provision of this Act (other than this part) where he finds, on the basis of substantial evidence of the effective performance of review and control activities by Professional Standards Review Organizations, that the review, certification, and similar activities otherwise so required are not needed for the provision of adequate review and control. "(f)(1) In the case of agreements entered into prior to January 1, 1976, under this part under which any organization is designated as the Professional Standards Review Organization for any area, the Secretary shall, prior to entering into any such agreement with any organization for any area, inform (under regulations of the Secretary) the doctors of medicine or osteopathy who are in active practice in such area of the Secretary's intention to enter into such an agreement with such organization. ' -081 O - 73 - !

1431

PUBLIC LAW 92-603-OCT. 30, 1972

Agreement expiration; prior termination. Post, p. 1432.

.»•!-• J u Q

Waiver.

Agreement

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[86 STAT.

" (2) If, within a reasonable period of time following the serving of such notice, more than 10 per centum of such doctorS object to the Secretary's entering into such an agreement with such organization on the ground that such organization is not representative of doctors in such area, the Secretary shall conduct a poll of such doctors to determine whether or not such organization is representative of such doctors in such area. If more than 50 per centum of the doctors responding to sucih poll indicate that such organization is not representative of such doctors in such area the Secretary shall not enter into such an agreement with such organization. "REVIEW PENDING DESIGNATION OF PROFESSIONAL STANDARDS REVIEW ORGANIZATION

"SEC. 1153. Pending the assumption by a Professional Standards Keview Organization for any area, of full review responsibility, and pending a demonstration of capacity for improved review effort with respect to matters invdlving the provision of health care semces in such area for which payment (in whole or in part) may be made, under this Act, any review with respect to such services which has not been designated by the Secretary as the full responsibility of such organization, shall be reviewed in the manner otherwise provided for under law. " T R I A L PERIOD FOR PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS

Plan, approval.

Duties.

Termination, notice.

"SEC. 1154. (a) The Secretary shall initially designate an organization as a Professional Standards Review Organization for any area on a conditional basis with a view to determining the capacity of such organization to perform the duties and functions imposed under this part on Professional Standards Review Organizations. Such designation may not be made prior to receipt from such organization and approval by the Secretary of a formal plan for the orderly assumption and implementation of the responsibilities of the Professional Standards Review Organization under this part. " (b) During any such trial period (which may not exceed 24 months), the Secretary may require a Professional Standards Review Organization to perform only such of the duties and functions required under this part of Professional Standards Review Organization as he determines such organization to be capable of performing. The number and type of such duties shall, during the trial period, be progressively increased as the organization becomes capable of added responsibility so that, by the end of such period, such organization shall be considered a qualified organization only if the Secretary finds that it is substantially carrying out in a satisfactory manner, the activities and functions required of Professional Standards Review Organizations under this part with respect to the review of health care services provided or ordered by physicians and other practitioners and institutional and other health care facilities, agencies, and organizations. Any of such duties and functions not performed by such organization during such period shall be performed in the manner and to the extent otherwise provided for under law. "(c) Any agreement under which any organization is conditionally designated as the Professional Standards Review Organization for any area may be terminated by such organization upon 90 days notice to the Secretary or by the Secretary upon 90 days notice to such organization.

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PUBLIC LAW 92-603-OCT. 30, 1972

1433

" D U T I E S AXD F U N C T I O N S O F PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS

"SEC. 1155. (a)(1) Notwithstanding any other provision of law, but consistent with the provisions of this part, it shall (subject to the provisions of subsection (g)) be the duty and function of each Professional Standards Review Organization for any area to assume, at the earliest date practicable, responsibility for the review of the professional activities in such area of physicians and other health care practitioners and institutional and noninstitutional providers of health care services in the provision of health care services and items for which payment may be made (in whole or in part) under this Act for the purpose of determining whether— " (A) such services and items are or were medically necessary; " (B) the quality of such services meets professionally recognized standards of health care; and " (C) in case such services and items are proposed to be provided in a hospital or other health care facility on an inpatient basis, such services and items could, consistent with the provision of appropriate medical care, be effectively provided on an outpatient basis or more economically in an inpatient health care facility of a different type. "(2) Each Professional Standards Review Organization shall have the authority to determine, in advance, in the case of— " (A) any elective admission to a hospital, or other health care facility, or " (B) any other health care service which will consist of extended or costly courses of treatment, whether such service, if provided, or if provided by a particular health care practitioner or by a particular hospital or other health care facility, organization, or agency, would meet the criteria specified in clauses (A) and (C) of paragraph (1). "(3) Each Professional Standards Review Organization shall, in accordance with regulations of the Secretary, determine and publish, from time to time, the types and kinds of cases (whether by type of health care or diagnosis involved, or whether in terms of other relevant criteria relating to the provision of health care services) with respect to which such organization will, in order most effectively to carry out the purposes of this part, exercise the authority conferred upon it under paragraph (2). "(4) Each Professional Standards Review Organization shall be responsible for the arranging for the maintenance of and the regular review of profiles of care and services received and provided with respect to patients, utilizing to the greatest extent practicable in such patient profiles, methods of coding which will provide maximum confidentiality as to patient identity and assure objective evaluation consistent with the purposes of this part. Profiles shall also be regularly reviewed on an ongoing basis with respect to each health care practitioner and provider to determine whether the care and services ordered or rendered are consistent with the criteria specified in clauses (A), (B), and (C) of paragraph (1). "(5) Physicians assigned responsibility for the review of hospital care may be only those having active hospital staff privileges in at least one of the participating hospitals in the area served by the Professional Standards Review Organization and (except as may be otherwise provided under subsection (e)(1) of this section) such physicians ordinarily should not be responsible for, but may participate in the review of care and services provided in any hospital in which such physicians have active staff privileges.

Case criteria, publication.

Patient prof i l e s, maintenance and review.

Hospital care, physician review.

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Page:United States Statutes at Large Volume 86.djvu/1476

 1434

Physician's family.

PUBLIC LAW 92-603-OCT. 30, 1972

[86 STAT.

"(6) No physician shall be permitted to review— " (A) health care services provided to a patient if he was directly or indirectly involved in providing such services, or " (B) health care services provided in or by an institution, organization, or agency, if he or any member of his family has, directly or indirectly, any financial interest in such institution, organization, or agency. For purposes of this paragraph, a physician's family includes only his spouse (othcr than a spouse who is legally separated from him under a decree of divorce or separate maintenance), children (including legally adopted children), grandchildren, parents, and grandparents. " (b) To the extent necessary or appropriate for the proper performance of its duties and functions, the Professional Standards Review Organization serving any area is authorized in accordance with regulations prescribed by the Secretary to— "(1) make arrangements to utilize the services of persons who are practitioners of or specialists in the various areas of medicine (including dentistry), or other types of health care, which persons shall, to the maximum extent practicable, be individuals engaged in the practice of their profession within the area served by such organization; "(2) undertake such professional inquiry either before or after, or both before and after, the provision of services with respect to which such organization has a responsibility for review under subsection (a)(1); "(3) examine the pertinent records of any practitioner or provider of health care services providing services with respect to which such organization has a responsibility for review undei subsection (a)(1); and "(4) inspect the facilities in which care is rendered or services provided (which are located in such area) of any practitioner oi provider. "(c) No Professional Standards Review Organization shall utilize the services of any individual who is not a duly licensed doctor of medicine or osteopathy to make final determinations in accordance with its duties and functions under this part with respect to the professional conduct of any other duly licensed doctor of medicine or osteopathy, or any act performed by any duly licensed doctor of medicine or osteopathy in the exercise of his profession. " (d) In order to familiarize physicians with the review functions and activities of Professional Standards Review Organizations and to promote acceptance of such functions and activities by physicians, patients, and other persons, each Professional Standards Review Organization, in carrying out its review responsibilities, shall (to the maximum extent consistent with the effective and timely performance of its duties and functions)— "(1) encourage all physicians practicing their profession in the area served by such Organization to participate as reviewers in the review activities of such Organizations; "(2) provide rotating physician membership of review committees on an extensive and continuing basis; "(3) assure that membership on review committees have the broadest representation feasible in terms of the various types of practice in which physicians engage in the area served by such Organization; and ''(4) utilize, whenever aj^propriate, medical periodicals and similar publications to publicize the functions and activities of Professional Standards Review Organizations.

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Page:United States Statutes at Large Volume 86.djvu/1477

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STAT.]

PUBLIC LAW 92-603-OCT. 30, 1972

" (e)(1) Each Professional Standards Review Organization shall utilize the services of, and accept the findings of, the review committees of a hospital or other operating health care facility or organization located in the area served by such organization, but only when and only to the extent and only for such time that such committees in such hospital or other operating health care facility or organization have demonstrated to the satisfaction of such organization their capacity effectively and in timely fashion to review activities in such hospital or other operating health care facility or organization (including the medical necessity of admissions, types and extent of services ordered, and lengths ef stay) so as to aid in accomplishing the purposes and responsibilities described in subsection (a)(1), except Avhere the Secretary disapproves, for good cause, such acceptance. " (2) The Secretary may prescribe regulations to carry out the provisions of this subsection. " (f)(1) An agreement entered into under this part between the Secretary and any organization under which such organization is designated as the Professional Standards Review Organization for any area shall provide that such organization will— " (A) perform such duties and functions and assume such responsibilities and comply with such other requirements as may be required by this part or under regulations of the Secretary promulgated to carry out the provisions of this part; and " (B) collect such data relevant to its functions and such information and keep and maintain such records in such form as the Secretary may require to carry out the purposes of this pait and to permit access to and use of any such records as the Secretary may require for such purposes. "(2) Any such agreement with an organization under this part shall provide that the Secretary make payments to such organization equal to the amount of expenses reasonably and necessarily incurred, as determined by the Secretary, by such organization in carrying out or preparing to carry out the duties and functions required by such agreement. " (g) Notwithstanding any other provision of this part, the responsibility for review of health care services of any Professional Standards Review Organization shall be the review of health care services provided by or in institutions, unless such Organization shall have made a request to the Secretary that it be charged with the duty and function of reviewing other health care services and the Secretary shall have approved such request. "XORMS OF H E A L T H CARE SERVICES FOR VARIOrS HJ.XESSES OR H E A L T H CONDITIONS

"SEC. 1156. (a) Each Professional Standards Review Organization shall apply professionally developed norms of care, diagnosis, and treatment based upon typical patterns of practice in its regions (including typical lengths-of-stay for institutional care by age and diagnosis) as principal points of evaluation and review. The National Professional Standards Review Council and the Secretary shall provide such technical assistance to the organization as will be helpful in utilizing and applying such norms of care, diagnosis, and treatment. Where the actual norms of care, diagnosis, and treatment in a Professional Standards Review Organization area are significantly different from professionally developed regional norms of care, diagnosis, and

1435 Review committees.

Regulations. Agreement requirements.

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Page:United States Statutes at Large Volume 86.djvu/1478

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PUBLIC LAW 92-603-OCT. 30, 1972

[86 STAT.

treatment approved for comparable conditions, the Professional Standards Review Organization concerned shall be so informed, and in the event that appropriate consultation and discussion indicate reasonable basis for usage of other norms in the area concerned, the Professional Standards Review Organization may apply such norms in such area as are approved by the National Professional Standards Review Council. " (b) Such norms with respect to treatment for particular illnesses or health conditions shall include (in accordance with regulations of the Secretary)— "(1) the types and extent of the health care services which, taking into account differing, but acceptable, modes of treatment and methods of organizing and delivering care are considered within the range of appropriate diagnosis and treatment of such illness or health condition, consistent with professionally recognized and accepted patterns of care; "(2) the type of health care facility which is considered, consistent with such standards, to be the type in which health care services which are medically appropriate for such illness or condition can most economically be provided, dirtrlbuuon""*^"'* "(9) (-^) ^^^ National Professional Standards Review Council shall data.^ " provide for the preparation and distribution, to each Professional Standards Review Organization and to each other agency or person performing review functions with respect to the provision of health care services under this Act, of appropriate materials indicating the regional norms to be utilized pursuant to this part. Such data concerning norms shall be reviewed and revised from time to time. The approval of the National Professional Standards Review Council of norms of care, diagnosis, and treatment shall be based on its analysis of appropriate and adequate data. "(2) Each review organization, agency, or person referred to in paragraph (1) shall utilize the norms developed under this section as a principal point of evaluation and review for determining, with respect to any health care services which have been or are proposed to be provided, whether such care and services are consistent with the criteria Ante, p. 1433. Specified in section 1155(a)(1). " (d)(1) Each Professional Standards Review Organization shall— " (A) in accordance with regulations of the Secretary, specify the appropriate points in time after the admission of a patient for inpatient care in a health care institution, at which the physician attending such patient shall execute a certification stating that further inpatient care in such institution will be medically necessary effectively to meet the health care needs of such patient; and " (B) require that there be included in any such certification with respect to any patient such information as may be necessary to enable such organization properly to evaluate the medical necessity of the further institutional health care recommended by the physician executing such certification. "(2) The points in time at which any such certification will be required (usually, not later than the 50th percentile of lengths-of-stay for patients in similar age groups with similar diagnoses) shall be consistent with and based on professionally developed norms of care and treatment and data developed with respect to length of stay in health care institutions of patients having various illnesses, injuries, or health conditions, and requiring various types of health care services or procedures.

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Page:United States Statutes at Large Volume 86.djvu/1479

 86 STAT. ]

PUBLIC LAW 92-603~OCT. 30, 1972

1437

"SUBMISSION OF REPORTS BY PROFESIONAL STANDARDS REVIEW ORGANIZATIONS

"SEC. 1157. If, in discharging its duties and functions under this part, any Professional Standards Review Organization determines that any health care practitioner or any hospital, or other health care facility, agency, or organization has violated any of the obligations imposed by section 1160, such organization shall report the ^°*'' P- ^'•^S. matter to the Statewide Professional Standards Review Council for the State in which such organization is located together with the recommendations of such Organization as to the action which should be taken with respect to the matter. Any Statewide Professional Standards Review Council receiving any such report and recommendation shall review the same and promptly transmit such report and recommendation to the Secretary together with any additional comments or recommendations thereon as it deems appropriate. The Secretary may utilize a Professional Standards Review Organization, in lieu of a program review team as specified in sections 1862 and 1866, 79 Stat. 325; for purposes of subparagraph (C) of section 1862(d)(1) and sub- * 4rusclagsy, paragraph (F) of section 1866(b)(2). i395cc. Ante, p. 1408. Ante, p. 1409. REQUIREMENTo r R E VI E W A P P R O V A L AS CONDITION OF PAYMENT OF CLAIMS

"SEC. 1158. (a) Except as provided for in section 1159, no Federal funds appropriated under any title of this Act (other than title V) for the provision of health care services or items shall be used (directly or indirectly) for the payment, under such title or any program established pursuant thereto, of any claim for the provision of such services or items, unless the Secretary, pursuant to regulation determines that the claimant is without fault if— "(1) the provision of such services or items is subject to review under this part by any Professional Standards Review Organization, or other agency; and " (2) such organization or other agency has, in the proper exercise of its duties and functions under or consistent with the purposes of this part, disapproved of the services or items giving rise to such claim, and has notified the practitioner or provider who provided or proposed to provide such services or items and the individual who would receive or was proposed to receive such services or items of its disapproval of the provision of such services or items. " (b) Whenever any Professional Standards Review Organization, in the discharge of its duties and functions as specified by or pursuant to this part, disapproves of any health care services or items furnished or to be furnished by any practitioner or provider, such organization shall, after notifying the practitioner, provider, or other organization or agency of its disapproval in accordance with subsection (a), promptly notify the agency or organization having responsibility for acting upon claims for payment for or on account of such services or items.

81 Stat. 921. 42 USC 701.

"HEARINGS AND REVIEW BY SECRETARY

"SEC. 1159. (a) Any beneficiary or recipient who is entitled to benefits under this Act (other than title V) or a provider or practitioner who is dissatisfied with a determination with respect to a claim made by a Professional Standards Review Organization in carrying out its responsibilities for the review of professional activities in accordance with paragraphs (1) and (2) of section 1155(a) shall, after being

Ante, p. 1433.

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Page:United States Statutes at Large Volume 86.djvu/1480

 14a8

42 u*sc 405*"

PUBLIC LAW 92-603-OCT. 30, 1972

[86 STAT.

notified of such determination, be entitled to a reconsideration thereof by the Professional Standards Review Organization and, where the Professional Standards Review Organization reaffirms such determination in a State which has established a Statewide Professional Standards Review Council, and where the matter in controversy is $100 or more, such determination shall be reviewed by professional members of such Council and, if the Council so determined, revised. " (b) Where the determination of the Statewide Professional Standards Review Council is adverse to the beneficiary or recipient (or, in the absence of such Council in a State and where the matter in controversy is $100 or more), such beneficiary or recipient shall be entitled to a hearing thereon by the Secretary to the same extent as is provided "^ section 205(b), and, where the amount in controversy is $1,000 or more, to judicial review of the Secretary's final decision after such hearing as is provided in section 205(g). The Secretary will render a decision only after appropriate professional consultation on the matter. "(c) Any review or appeals provided under this section shall be in lieu of any review, hearing, or appeal under this Act with respect to the same issue. "OBLIGATIONS OF TTEALTTI CARE PRACTITIONERS AND PROVIDERS OF H E A L T H CARE SERVICES; SANCTIONS A N D P E N A L T I E S; HEARINGS AND REVIEW

"SEC. 1160. (a)(1) I t shall be the obligation of any health care practitioner and any other person (including a hospital or other health care facility, organization, or agency) who provides health care services for which payment may be made (in whole or in part) under this Act, to assure that services or items ordered or provided by such practitioner or person to beneficiaries and recipients under this Act— " (A) will be provided only when, and to the extent, medically necessary; and " (B) will be of a quality which meets professionally recognized standards of health care; and " (C) will be supported by evidence of such medical necessity and quality in such form and fashion and at such time as may reasonably be required by the Professional Standards Review Organization in the exercise of its duties and responsibilities; and it shall b^. the obligation of any health care practitioner in ordering, authorizing, directing, or arranging for the provision by any other person (including a hospital or other health care facility, organization, or agency), of health care services for any patient of such practitioner, to exercise his professional responsibility with a view to assuring (to the extent of his influence or control over such patient, such person, or the provision of such services) that such services or items will be provided— " (D) onlv when, and to the extent, medically necessary; and " (E) will be of a quality which meets professionally recognized standards of health care. "(2) Each health care practitioner, and each hospital or other provider of health care services, shall have an obligation, within reasonable limits of professional discretion, not to take any action, in the exercise of his profession (in the case of any health care practitioner), or in the conduct of its business (in the case of any hospital or other such provider), which would authorize any individual to be admitted as an inpatient in or to continue as an inpatient in any hospital or other health care facility unless—

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" (A) inpatient care is determined by such practitioner and by such hospital or other provider, consistent with professionally recognized health care standards, to be medically necessary for the proper care of such individual; and " (B)(i) the inpatient care required by such individual cannot, consistent with such standards, be provided more economically in a health care facility of a different type; or "(ii) (in the case of a patient who requires care which can, consistent with such standards, be provided more economically in a health care facility of a different type) there is, in the area in which such individual is located, no such facility or no such facility which is available to provide care to such individual at the time when care is needed by him. "(b)(1) If after reasonable notice and opportunity for discussion Report and with the practitioner or provider concerned, any Professional Stand- '•^^°"»'"«n'*^*i°"s ards Review Organization submits a report and recommendations to the Secretary pursuant to section 1157 (which report and recom- Ante, p. 1437. mendations shall be submitted through the Statewide Professional Standards Review Council, if such Council has been established, which shall promptly transmit such report and recommendations together with any additional comments and recommendations thereon as it deems appropriate) and if the Secretary determines that such practitioner or provider, in providing health care services over which such organization has review responsibility and for which payment (in whole or in part) may be made under this Act has— " (A) by failing, in a substantial number of cases, substantially to comply with any obligation imposed on him under subsection (a),or " (B) by grossly and flagranti}^ violating any such obligation in one or more instances, demonstrated an unwillingness or a lack of ability substantially to comply with such obligations, he (in addition to any other sanction provided under law) may exclude (permanently for such period as the Secretary may prescribe) such practitioner or provider from eligibility to provide such services on a reimbursable basis. "('2) A determination made by the Secretary under this subsection shall be effective at such time and upon such reasonable notice to the public and to the person furnishing the services involved as may be specified in regulations. Such determination shall be effective with respect to services furnished to an individual on or after the effective date of such determination (except that in the case of institutional •* health care servicer such determination shall be effective in the manner provided in title X VIII with respect to terminations of provider 42 USC 1395. agreements), and shall remain in effect until the Secretary finds and gives reasonable notice to the public that the basis for such determination has been removed and that there is reasonable assurance that it will not recur. " (3) In lieu of the sanction authorized by paragraph (1), the Secretary may require that (as a condition to the continued eligibility of such practitioner or provider to provide such health care services on a reimbursable basis) such practitioner or provider pay to the United States, in case such acts or conduct involved the provision or ordering by such practitioner or provider of health care services which were 5»i3i.a medically improper or unnecessary, an amount not in excess of the actual o;' estimated cost of the medically improper or unnecessary services so provided, or (if less) $5,000. Such amount may be deducted from any sums owing by the United States (or any instnimentality thereof) to the person from whom such amount is claimed.

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"(4) Any person furnishing services described in paragraph (1) who is dissatisfied with a determination made by the Secretary under this subsection shall be entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided in section 205(b), and to judicial review of the Secretary's final decision after such hearing as is provided in section 205(g). "(c) I t shall be the duty of each Professional Standards Review Organization and each Statewide Professional Standards Review Council to use such authority or influence it may possess as a professional organization, and to enlist the support of any other professional or governmental organization having influence or authority over health care practitioners and any other person (including a hospital or other health care facility, organization, or agency) providing health care services in the area served by such review organization, in assuring that each practitioner or provider (referred to in subsection (a)) providing health care services in such area shall comply with all obligations imposed on him under subsection (a). "NOTICE TO PRACTITIONER

OR PROVIDER

"SEC. 1161. Whenever any Professional Standards Review Organization takes any action or makes any determination— " (a) which denies any request, by a health care practitioner or other provider of health care services, for approval of a health care service or item proposed to be ordered or provided by such practitioner or provider; or " (b) that any such practitioner or provider has violated any obligation imposed on such practitioner or provider under section 1160, such organization shall, immediately after taking such action or making such determination, give notice to such practitioner or provider of such determination and the basis therefor, and shall provide him with appropriate opportunity for discussion and review of the matter. " S T A T E W I D E P R OF E S S I O N A L STANDARDS REVIEW COUNCILS; ADVISORY GROUPS TO SUCH COUNCILS Establishment.

Membership.

Duties.

"SEC. 1162. (a) In any State in which there are located three or more Professional Standards Review Organizations, the Secretary shall establish a Statewide Professional Standards Review Council. "(b) The membership of any such Council for any State shall be appointed by the Secretary and shall consist of— "(1) one representative from and designated by each Professional Standards Review Organization in the State; "(2) four physicians, two of whom may be designated by the State medical society and two of whom may be designated by the State hospital association of such State to serve as members on such Council; and " (3) four persons knowledgeable in health care from such State whom the Secretary shall have selected as representatives of the public in such State (at least two of whom shall have been recommended for membership on the Council by the Governor of such State). "(c) I t shall be the duty and function of the Statewide Professional Standards Review Council for any State, in accordance with regulations of the Secretary, (1) to coordinate the activities of, and disseminate information and data among the various Professional Standards Review Organizations within such State including assisting the Secre-

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tary in development of uniform data gathering procedures and operating procedures applicable to the several areas in a State (including, where appropriate, common data processing operations serving several or all areas) to assure efficient operation ana objective evaluation of comparative performance of the several areas and, (2) to assist the Secretary in evaluating the performance of each Professional Standards Review Organization, and (3) where the Secretary finds it necessary to replace a Professional Standards Review Organization, to assist him in developing and arranging for a qualified replacement Professional Standards Review Organization. " (d) The Secretary is authorized to enter into an agreement with any such Council under which the Secretary shall make payments to such Council equal to the amount of expenses reasonably and necessarily incurred, as determined by the Secretary, by such Council in carrying out the duties and functions provided m this section. "(e)(1) The Statewide Professional Standards Review Council for any State (or in a State which does not have such Council, the Professional Standards Review Organizations in such State which have agreements with the Secretary) shall be advised and assisted in carrying out its functions by an advisory group (of not less than seven nor more than eleven members) which shall be made up of representatives of health care practitioners (other than physicians) and hospitals and other health care facilities which provide within the State health care services for which payment (in whole or in part) may be made under any program established by or pursuant to this Act. "(2) The Secretary shall by regulations provide the manner in which members of such advisory group shall be selected by the Statewide Professional Standards Review Council (or Professional Standards Review Organizations in States without such Councils). "(3) The expenses reasonably and necessarily incurred, as determined by the Secretary, by such group in carrying out it duties and functions under this subsection shall be considered to be expenses necessarily incurred by the Statewide Professional Standards Review Council served by such group.

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Payments.

Member selection, regulations.

Expenses.

"NATIONAL PROFESSIONAL STANDARDS REVIEW COUNCIL

"SEC. 1163. (a)(1) There shall be established a National Professional Standards Review Council (hereinafter in this section referred to as the 'Council') which shall consist of eleven physicians, not otherwise in the employ of the United States, appointed by the Secretary without regard to the provisions of title 5, United States Code, governing appointments in the competitive service. "(2) Members of the Council shall be appointed for a term of three years and shall be eligible for reappointment. "(3) The Secretary shall from time to time designate one of the members of the Council to serve as Chairman thereof. "(b) Members of the Council shall consist of physicians of recognized standing and distinction in the appraisal of medical practice. A majority of such members shall be physicians who have been recommended by the Secretary to serve on the Council by national organizations recognized by the Secretary as representing practicing physicians. The rtiembership of the Council shall include physicians who have been recommended for membership on the Council by consumer groups and other health care interests. "(c) The Council is authorized to utilize, and the Secretary shall make available, or arrange for, such technical and professional consultative assistance as may be required to carry out its functions, and the

Establishment; membership.

5 USC 101 et seq. Term of membership.

Qualifications.

Consultants.

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Secretary shall, in addition, make available to the Council such secretarial, clerical and other assistance and such pertinent data prepared by, for, or otherwise available to, the Department of Health, Education, and Welfare as the Council may require to carry out its functions. Compensation. «((j) Membcrs of the Council, while serving on business of the Council, shall be entitled to receive compensation at a rate fixed by the Secretary (but not in excess of the daily rate paid under GS-18 of the General Schedule under section 5332 of title 5, United States 5 USC 5332 Code), including traveltime; and while so serving away from their note. homes or regular places of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for persons in Government service employed intermittently. Duties. "(e) It shall be the duty of the Council to— " (1) advise the Secretary in the administration of this part; "(2) provide for the development and distribution, among Statewide Professional Standards Review Councils and Professional Standards Review Organizations of information and data which will assist such review councils and organizations in carrying out their duties and functions; "(3) review the operations of Statewide Professional Standards Review Councils and Professional Standards Review Organizations with a view to determining the effectiveness and comparative performance of such review councils and organizations in carrying out the purposes of this part; and "(4) make or arrange for the making of studies and investigations with a view to developing and recommending to the Secretary and to the Congress measures designed more effectively to accomplish the purposes and objectives of this nart. tafy^and Congress. "(*) ^ h e National Professional Standards Review Council shall from time to time, but not less often than annually, submit to the Secretary and to the Congress a report on its activities and shall include in such report the findings of its studies and investigations together with any recommendations it may have with respect to the more effective accomplishment of the purposes and objectives of this part. Such report shall also contain comparative data indicating the results of review activities, conducted pursuant to this part, in each State and in each of the various areas thereof. "APPLICATION or

THIS PART TO CERTAIN STATE PROGRAMS RECEIVING FEDERAL FINANCIAL ASSISTANCE

"SEC. 1164. (a) I n addition to the requirements imposed by law as a condition of approval of a State plan approved under any title of this Act under which health care services are paid for in whole or part, with Federal funds, there is hereby imposed the requirement that provisions of this part shall apply to the operation of such plan or program. " (b) The requirement imposed by subsection (a) with respect to such State plans approved under this Act shall apply— "(1) in the case of any such plan where legislative action by the State legislature is not necessary to meet such requirement, on and after January 1, 1974; and "(2) in the case of any such plan where legislative action by the State legislature is necessary to meet such requirement, whichever of the following is earlier— " (A) on and after July 1, 1974, or

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" (B) on and after the first day of the calendar month which first commences more than ninety days after the close of the first regular session of the legislature of such State which begins after December 31, 1973. '"CORRELATIOX OP FUNCTIOXS BETWEEN PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS AND ADMINISTRATIVE INSTRUMENTALITIES

"SEC. 1165. The Secretary shall by regulations provide for such correlation of activities, such interchange of data and information, and such other cooperation consistent with economical, efficient, coordinated, and comprehensive implementation of this part (including, but not limited to^ usage of existing mechanical and other data-gathering capacity) between and among— " (a)(1) agencies and organizations which are parties to agreements entered into pursuant to section 1816, (2) carriers which are parties to contracts entered into pursuant to section 1842, and (3) any other public or private agency (other than a Professional Standards Review Organization) having review or control functions, or proved relevant data-gathering procedures and experience, and " (b) Professional Standards Review Organizations, as may be necessary or appropriate for the effective administration of title X VIII, or State plans approved under this Act. li

J^ ^tat^ 29j^^ 42 USC i395u!

42 USC 1395.

PROHIBITION AGAINST DISCLOSURE OF INFORMATION

"SEC. 1166. (a) Any data or information acquired by any Professional Standards Review Organization, in the exercise of its duties and functions, shall be held in confidence and shall not be disclosed to any person except (1) to the extent that may be necessary to carry out the purposes ot this part or (2) in such cases and under such circumstances as the Secretary shall by regulations provide to assure adequate protection of the rights and interests of patients, health care practitioners, or providers of health care. " (b) I t shall be unlawful for any person to disclose any such information other than for such purposes, and any person violating the provisions of this section shall, upon conviction, be fined not more than $1,000, and imprisoned for not more than six months, or both, together with the costs of prosecution. " L I M I T A T I O N O N LIABILITY FOR PERSONS PROVIDING INFORMATION, AND FOR M E M B E R S AND EMPLOYEES OF PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS, AND FOR HEALTH CARE PRACTITIONERS AND PROVIDERS

"SEC. 1167. (a) Notwithstanding any other provision of law, no person providing information to any Professional Standards Review Organization shall be held, by reason of having provided such information, to have violated any criminal law, or to be civilly liable under any law, of the United States or of any State (or political subdivision thereof^ unless— "(1) such information is unrelated to the performance of the duties and functions of such Organization, or "(2) such information is false and the person providing such information knew, or had reason to believe, that such information was false. " (b)(1) No individual who, as a member or employee of any Professional Standards Review Organization or who furnishes profes-

Penalty.

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sional counsel or services to such organization, shall be held by reason of the performance by him of any duty, function, or activity authorized or required of Professional Standards Review Organizations under this part, to have violated any criminal law, or to be civilly liable under any law, of the United States or of any State (or political subdivision thereof) provided he has exercised due care. "(2) The provisions of paragraph (1) shall not apply with respect to any action taken by any individual if such individual, in taking such action, was motivated by malice toward any person affected by such action. "(c) No doctor of medicine or osteopathy and no provider (including directors, trustees, employees, or officials thereof) of health care services shall be civilly liable to any person under any law of the United States or of any State (or political subdivision thereof) on account of any action taken by him in compliance with or reliance upon professionally developed norms of care and treatment applied by a Professional Standards Review Organization (which has been Ante, p. 1430. designated in accordance with section 1152(b)(1)(A)) operating in the area where such doctor of medicine or osteopathy or provider took such action but only if— "(1) he takes such action (in the case of a health care practitioner) in the exercise of his profession as a doctor of medicine or osteopathy (or in the case of a provider of health care services) in the exercise of his functions as a provider of health care services, and "(2) he exercised due care in all professional conduct taken or directed by him and reasonably related to, and resulting from, the actions taken in compliance with or reliance upon such professionally accepted norms of care and treatment. "AUTHORIZATION FOR USE or CERTAIN FUNDS TO ADMINISTER THE PROVISIONS OF T H I S PART

"SEC. 1168. Expenses incurred in the administration of this part shall be payable from— " (a) funds in the Federal Hospital Insurance Trust Furid; " (b) funds in the Federal Supplementary Medical Insurance Trust F u n d; and "(c) funds appropriated to carry out the health care provisions of the several titles of this Act; in such amounts from each of the sources of funds (referred to in subsections (a), (b), and (c)) as the Secretary shall deem to be fair and equitable after taking into consideration the costs attributable to the administration of this part with respect to each of such plans and programs. "TECHNICAL ASSISTANCE TO ORGANIZATIONS DESIRING TO BE DESIGNATED AS PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS

"SEC. 1169. The Secretary is authorized to provide all necessary technical and other assistance (including the preparation of prototype plans of organization and operation) to organizations described in section 1152(b)(1) which— " (a) express a desire to be designated as a Professional Standards Review Organization; and "(b) the Secretary determines have a potential for meeting the requirements of a Professional Standards Review Organization;

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