,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #biad  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,augu/ #a1 #bjac ,ms4 
,spei] 7= h]self1 ,ms4 ,titus1 & ,mr4   
,mc,dermott7 introduc$ ! foll[+ bill2   
:i* 0 ref]r$ to ! ,committee on ,en]gy &
 ,comm]ce1 & 9 addition to ! ,committee 
on ,ways & ,means1 = a p]iod to be      
subsequ5tly det]m9$ by ! ,speak]1 9 ea* 
case = consid]ation ( su* provisions z  
fall )9 ! jurisdiction ( ! committee    
conc]n$  ,a ,,bill  ,to prev5t abusive  
bill+ ( ancill>y s]vices to ! ,m$ic>e   
program1 & = o!r purposes4  #a4 ,%ort   
title ,?is ,act may be cit$ z ! ,promot+
 ,integrity 9 ,m$ic>e ,act ( #bjac4  #b4
 ,f9d+s2 purposes  7a7 ,f9d+s ,congress 
f9ds ! foll[+3  7#a7 ,rec5t /udies by ! 
,gov]nm5t ,acc\ntability ,(fice 7,,gao7 
exam9+ self-ref]ral practices 9 advanc$ 
diagno/ic imag+ & anatomic pa?ology     
det]m9$ t f9ancial inc5tives 7 ! mo/    
likely cause ( increases 9              
self-ref]rals4  7#b7 ,= advanc$         
diagno/ic imag+1 ,,gao /at$ t 8provid]s 

:o self-ref]r$ made #djj1jjj m ref]rals 
= advanc$ imag+ s]vices ?an !y w\ld h if
 !y 7 n self-ref]r+01 at a co/ ( 8m ?an 
#ajj million0 9 #bjaj4  7#c7 ,= anatomic
 pa?ology1 ,,gao f\nd t 8self-ref]r+    
provid]s likely ref]r$ ov] #iah1jjj m   
anatomic pa?ology s]vices0 ?an !y w\ld h
 if !y 7 n self-ref]r+1 co/+ ,m$ic>e    
approximately #fi million m 9 #bjaj ?an 
if self-ref]ral 0 n p]mitt$4  7#d7 ,not+
 ! rapid gr[? ( s]vices cov]$ by !      
9-(fice ancill>y s]vices 7,,ioas7       
exception & evid5ce t ^! s]vices are    
sometimes furni%$ inappropriately by    
ref]r+ physicians1 ! ,m$ic>e ,paym5t    
,advisory ,commission 7,med,p,a,c7 /at$ 
t physician self-ref]ral ( ancill>y     
s]vices creates inc5tives to increase   
volume "u ,m$ic>e's curr5t fee-=-s]vice 
paym5t sy/ems & ! rapid volume gr[?     
contributes to ,m$ic>e's ris+ f9ancial  
burd5 on taxpay]s & b5efici>ies4  7#e7  
,accord+ to ! ,c5t]s = ,m$ic>e  ,m$icaid
 ,s]vices1 a key rationale = ! ,,ioas   
exception 0 to p]mit physicians to      

provide ancill>y s]vices 9 _! (fices to 
bett] in=m diagnosis & treatm5t         
decisions at ! "t ( ! pati5t's initial  
(fice visit4  7#f7 ,x is necess>y1      
!re=e1 to di/+ui% betwe5 s]vices &      
proc$ures t 7 int5d$ to be cov]$ by !   
,,ioas exception1 su* z r\t9e cl9ical   
laboratory s]vices or simple x-rays t   
are provid$ dur+ ! pati5t's initial     
(fice visit1 & o!r heal? c>e s]vices :i*
 7 cle>ly n envision$ to be cov]$ by t  
exception because !y _c be p]=m$ dur+ ! 
pati5t's initial (fice visit4  7#g7     
,accord+ to a #bjaj ,heal? ,affairs     
/udy1 less ?an #aj p]c5t ( ,,ct1 ,,mri1 
& ,nucle> ,m$ic9e scans take place on ! 
same day z ! initial pati5t (fice visit4
  7#h7 ,accord+ to a #bjab ,heal?       
,affairs /udy1 urologi/s' self-ref]rals 
= anatomic pa?ology s]vices ( biopsy    
specim5s is l9k$ to increas$ use &      
volume bill$ along ) a l[] detection (  
pro/ate canc]4  7#i7 ,accord+ to an     
,octob] #bjaa ,laboratory ,economics    
report1 !re has be5 an increase 9 !     

numb] ( anatomic pa?ology specim5 units 
bill$ to ! ,m$ic>e "p ,b program f #bjjf
 ?r\gh #bjaj1 specifically = ,,cpt ,code
 #hhcje1 & ! rate ( increase bill$ by   
physician (fices = ?is s]vice is        
accel]at+ at a f> great] pace ?an ! re/ 
( ! provid] segm5ts4  7#aj7 ,accord+ to 
a #bjac ,am]ican ,academy ( ,d]matology 
,pa?ology ,bill+ pap]1 arrangem5ts      
involv+ ! split ( ! te*nical &          
pr(essional compon5ts ( anatomic        
pa?ology s]vices among diff]5t provid]s 
may endang] pati5t safety & und]m9e     
quality ( c>e4  7#aa7 ,9 ,novemb] #bjab1
 ,bloomb]g ,news releas$ an inve/igative
 report t scrut9iz$ ordeals fac$ by     
,cali=nia pro/ate canc] pati5ts treat$  
by a urology cl9ic t owns radiation     
!rapy equipm5t4 ,! report f\nd t        
physician self-ref]ral result$ 9 a      
detrim5tal impact on pati5t c>e & drove 
up heal? c>e co/s 9 ! ,m$ic>e program4  
,! ,wall ,/reet ,j\rnal1 ! ,wa%+ton     
,po/1 & ! ,baltimore ,sun h also publi%$
 inve/igations %[+ t urology gr\ps own+ 

radiation !rapy ma*9es h utilization    
rates t rise quickly & are well above   
national norms = radiation !rapy        
treatm5t ( pro/ate canc]4  7#ab7        
,accord+ to a #bjaj ,med,p,a,c report1  
only #c p]c5t ( outpati5t physical !rapy
 s]vices 7 provid$ on ! same day z an   
(fice visit1 only #i p]c5t )9 #g days ( 
an (fice visit1 & only #ad p]c5t )9 #ad 
days ( an (fice visit4 ,^! s]vices are n
 integral to ! physician's initial      
diagnosis & d n improve pati5t conv5i5ce
 because pati5ts mu/ return = physical  
!rapy treatm5ts4  7#ac7 ,^? s]vices     
int5d$ to be cov]$ "u ! ,,ioas exception
 are n affect$ by ?is legislation4      
7#ad7 ,! exception to ! own]%ip or      
inve/m5t prohibition = rural provid]s 9 
! ,/>k rule is n affect$ by ?is         
legislation4  7b7 ,purposes ,! purposes 
( ?is ,act are ! foll[+3  7#a7 ,ma9ta9 !
 9-(fice ancill>y s]vices exception &   
pres]ve its orig9al int5t by remov+     
c]ta9 complex s]vices f !               
exception--specifically1 advanc$ imag+1 

anatomic pa?ology1 radiation !rapy1 &   
physical !rapy4  7#b7 ,protect pati5ts f
 misalign$ provid] f9ancial inc5tives4  
7#c7 ,protect ,m$ic>e res\rces by sav+  
billions ( doll>s4  7#d7 ,accompli% !   
purposes describ$ 9 p>agraphs 7#a71     
7#b71 & 7#c7 9 a mann] t does n alt] !  
exi/+ exception to ! own]%ip or inve/m5t
 prohibition = rural provid]s4  #c4     
,limitation on application ( physicians'
 s]vices & 9-(fice ancill>y s]vices     
exceptions  7a7 ,9 g5]al ,section       
#ahgg7;b7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acienn7b77 is am5d$--   
7#a7 9 p>agraph 7#a71 by ins]t+ 1 o!r   
?an specifi$ non-ancill>y s]vices1 aft] 
section #ahfa7q772 &  7#b7 9 p>agraph   
7#b71 by ins]t+ 1 specifi$ non-ancill>y 
s]vices1 aft] 7exclud+ infusion pumps74 
7b7 ,increase ( civil money p5alties    
,section #ahgg7;g7 ( ! ,social ,security
 ,act 7#db ,u4,s4,c4 #acienn7g77 is     
am5d$--  7#a7 9 p>agraph 7#c71 by ins]t+
 1 unless su* bill or claim includ$ a   
bill or claim = a specifi$ non-ancill>y 

s]vice1 9 :i* case ! civil money p5alty 
%all be n m ?an #be1jjj = ea* su* s]vice
 be=e ! p]iod at ! end ( ! fir/ s5t5ce2 
&  7#b7 9 p>agraph 7#d71 by ins]t+ 7or  
#aej1jjj if su* ref]rals are = specifi$ 
non-ancill>y s]vices7 aft] #ajj1jjj4    
7c7 ,enhanc$ scre5+ ( claims ,section   
#ahgg7;g7 ( ! ,social ,security ,act    
7#db ,u4,s4,c4 #acienn7g77 is fur!r     
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#g7 ,compliance review =    
specifi$ non-ancill>y s]vices  7,a7 ,9  
g5]al ,n lat] ?an #ahj days aft] ! date 
( ! enactm5t ( ?is p>agraph1 !          
,secret>y1 9 consultation ) ! ,inspector
 ,g5]al ( ! ,dep>tm5t ( ,heal? & ,human 
,s]vices1 %all review compliance )      
subsection 7a77#a7 ) respect to ref]rals
 = specifi$ non-ancill>y s]vices 9      
accordance ) proc$ures e/abli%$ by !    
,secret>y4  7,b7 ,factors 9 compliance  
review ,su* proc$ures--  7i7 %all1 =    
purposes ( t>get+ types ( entities t !  
,secret>y det]m9es repres5t a high risk 
( noncompliance ) subsection 7a77#a7 )  

respect to su* bill+ = su* specifi$     
non-ancill>y s]vices1 apply diff]5t     
levels ( review bas$ on su* type2 &     
7ii7 may include prepaym5t reviews1     
claims audits1 focus$ m$ical review1    
comput] algori?ms design$ to id5tify    
paym5t or bill+ anomalies4  4  7d7      
,def9ition ( specifi$ non-,ancill>y     
s]vices ,section #ahgg7;h7 ( ! ,social  
,security ,act 7#db ,u4,s4,c4           
#acienn7h77 is am5d$ by add+ at ! end ! 
foll[+ new p>agraph3  7#h7 ,specifi$    
non-ancill>y s]vices ,! t]m specifi$    
non-ancill>y s]vice means a s]vice t !  
,secret>y has det]m9$ is n usually      
provid$ & complet$ dur+ an (fice visit  
to a physician's (fice 9 :i* ! s]vice is
 det]m9$ to be necess>y1 & includes !   
foll[+3  7,a7 ,anatomic pa?ology        
s]vices1 z def9$ by ! ,secret>y &       
includ+ ! te*nical or pr(essional       
compon5t ( ! foll[+3  7i7 ,surgical     
pa?ology4  7ii7 ,cytopa?ology4  7iii7   
,hematology4  7iv7 ,blood bank+4  7v7   
,pa?ology consultation & cl9ical        

laboratory int]pretation s]vices4  7,b7 
,radiation !rapy s]vices & supplies1 z  
def9$ by ! ,secret>y4  7,c7 ,advanc$    
diagno/ic imag+ /udies 7z def9$ 9       
section #ahcd7;e77#a77;,b774  7,d7      
,physical !rapy s]vices 7z describ$ 9   
p>agraph 7#f77;,b774  4  7e7            
,con/ruction ,no?+ 9 ?is section 7or !  
am5dm5ts made by ?is section7 %all be   
con/ru$ to affect ! au?ority ( !        
,secret>y ( ,heal? & ,human ,s]vices to 
waive ! requirem5ts impos$ "u !         
provisions ( ?is section 7or su*        
am5dm5ts7 "u section #ahii ( ! ,social  
,security ,act 7#db ,u4,s4,c4           
#acie;jjj74  7f7 ,effective date ,!     
am5dm5ts made by subsections 7a7 & 7b7  
%all apply to items & s]vices furni%$ on
 or aft] ! fir/ day ( ! fir/ mon? beg9n+
 m ?an #ab mon?s aft] ! date ( !        
enactm5t ( ?is ,act4  #d4 ,cl>ification 
( c]ta9 entities subject to ,/>k rule & 
anti-m>kup rule ,section #ahgg7;h7 ( !  
,social ,security ,act 7#db ,u4,s4,c4   
#acienn7h77 is fur!r am5d$ by add+ at ! 

end ! foll[+ new p>agraph3  7#i7        
,cl>ification ( c]ta9 entities subject  
to anti-m>kup rule ,9 apply+ ?is        
section1 ! t]m entity %all include a    
physician's practice :5 x bills "u ?is  
title = ! te*nical compon5t or !        
pr(essional compon5t ( a specifi$       
non-ancill>y s]vice1 includ+ :5 su*     
s]vice is bill$ 9 compliance ) section  
#ahdb7n77#a74  4  #e4 ,cl>ification (   
sup]vision ( te*nical compon5t (        
anatomic pa?ology s]vices ,section      
#ahfa7s77#ag7 ( ! ,social ,security ,act
 7#db ,u4,s4,c4 #aciex7s77#ag77 is      
am5d$--  7#a7 by /rik+ & at ! end (     
subp>agraph 7,a72  7#b7 by r$esignat+   
subp>agraph 7,b7 z subp>agraph 7,c72 &  
7#c7 by ins]t+ aft] subp>agraph 7,a7 !  
foll[+ new subp>agraph3  7,b7 ) reg>d to
 ! provision ( ! te*nical compon5t (    
anatomic pa?ology s]vices1 meets !      
applicable sup]vision requirem5ts =     
laboratories c]tifi$ 9 ! subspecialty ( 
hi/opa?ology1 pursuant to section #cec (
 ! ,public ,heal? ,s]vices ,act2 &  4   

#f4 ,exemption f budget neutrality "u   
physician fee s*$ule ,section           
#ahdh7;c77#b77;,b77v7 ( ! ,social       
,security ,act 7#db ,u4,s4,c4           
#aciew-#d7;c77#b77;,b77v77 is am5d$ by  
add+ at ! end ! foll[+ new subclause3   
7,,viii7 ,*anges to limitations on c]ta9
 physician ref]rals ,effective = fee    
s*$ules e/abli%$ beg9n+ ) #bjad1 r$uc$  
exp5ditures attributable to ! ,promot+  
,integrity 9 ,m$ic>e ,act ( #bjac4  4