,i  #aaf? ,,congress  #a/ ,session  ,h4 
,r4 #badc  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,april #i1 #bjai,ms4  
,spei] 7= h]self & ,ms4 ,titus7         
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 wa/eful & 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$ic>e ,act ( #bjai or   
,,pima ( #bjai4  #b4 ,f9d+s2 purposes   
7a7 ,f9d+s ,congress f9ds ! foll[+3     
7#a7 ,rec5t /udies by ! ,gov]nm5t       
,acc\ntability ,(fice 7,,gao7 exam9+    
self-ref]ral practices 9 advanc$        
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 provid]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+1 at a co/ ( m ?an   
#ajj million 9 #bjaj4  7#c7 ,= anatomic 
pa?ology1 ,,gao f\nd t self-ref]r+      
provid]s likely ref]r$ ov] #iah1jjj m   
anatomic pa?ology s]vices ?an !y w\ld h 
if !y 7 n self-ref]r+1 co/+ ,m$ic>e     
approximately #fi1jjj1jjj m 9 #bjaj ?an 
if self-ref]ral 0 n p]mitt$4  7#d7 ,=   
radiation oncology1 ,,gao f\nd t        
int5sity modulat$ radiation !rapy       
7,,imrt7 utilization among self-ref]r+  
gr\ps increas$ by #cef p]c5t1 ) ov]all  
increases 9 ,,imrt utilization rates &  
sp5d+ due entirely to s]vices p]=m$ by  
limit$-specialty gr\ps4 ,! ,,gao        
conclud$ t ! high] use ( ,,imrt by      
self-ref]r+ provid]s results 9 high]    
co/s = ,m$ic>e & b5efici>ies4 ,to !     
ext5t t treatm5t decisions are driv5 by 
provid]s' f9ancial int]e/ & n by pati5t 
pref]5ce1 ^! increas$ co/s are difficult
 to ju/ify4  7#e7 ,= physical !rapy1    

,,gao f\nd t 9 ! ye> a provid] began to 
self-ref]1 physical !rapy s]vice        
ref]rals increas$ at a high] rate       
relative to non-self-ref]r+ provid]s ( !
 same specialty4  7#f7 ,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#g7  
,! ,presid5t's ,fiscal ,ye> #bjag       
,budget includes ! *ange to remove ! f\r
 s]vices3 advanc$ diagno/ic imag+1      
anatomic pa?ology1 radiation oncology1 &
 physical !rapy f ! ,,ioas exception to 
! ,/>k ,law & cit$ ! *ange z g5]at+ a   
sav+s score ( #d1ihj1jjj1jjj ov] #aj    
ye>s4 ,! nonp>tisan ,congressional      

,budget ,(fice's analysis ( !           
,presid5t's ,fiscal ,ye> #bjag ,budget  
li/$ ! *ange z g5]at+ a sav+s (         
#c1cjj1jjj1jjj ov] #aj ye>s4  7#h7      
,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#i7 ,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$ or     
complet$ dur+ ! pati5t's initial (fice  
visit4  7#aj7 ,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#aa7 ,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#ab7   
,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#ac7 ,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#ad7 ,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#ae7        
,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#af7 ,9 an ,april    
#bjah1 ,european ,urology article au?or$
 by lead+ urologi/s ab\t ,m$ic>e        
b5efici>ies ) pro/ate canc] diagnoses1  

rese>*]s f\nd1 ,urologi/s practic+ 9    
s+le-specialty gr\ps ) an own]%ip int]e/
 9 radiation !rapy are m likely to treat
 m5 ) pro/ate canc]1 includ+ ^? ) a high
 risk ( noncanc] mortality44 ,?is       
sugge/s t urologi/s practic+ 9          
s+le-specialty gr\ps ) an own]%ip int]e/
 9 radiation !rapy are m likely to      
treat1 & ev5 pot5tially ov]treat1       
pati5ts ) ,,imrt ?an ^? affiliat$ ) a   
multispecialty practice or a gr\p )\t an
 own]%ip /ake4  7#ag7 ,9 a ,janu>y      
#bjai1 ,,jama ,oncology article1 au?ors 
sy/ematically review$ #ah /udies to     
assess physicians' response to          
reimbursem5t inc5tives on canc] c>e     
deliv]y across v>i\s cl9ical sett+s4    
,across ! /udies1 ! au?ors consi/5tly   
f\nd t ! ability to self-ref] =         
radiation oncology s]vices 0 associat$ )
 increas$ use ( radiation !rapy4  7#ah7 
,^? s]vices int5d$ to be cov]$ "u !     
,,ioas exception are n affect$ by ?is   
legislation4  7#ai7 ,! 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>agraphs3  7#h7 ,specifi$   
non-ancill>y s]vices  7,a7 ,subject to  
subp>agraph 7,b71 ! t]m specifi$        
non-ancill>y s]vice means ! foll[+3 7i7 
,anatomic pa?ology s]vices1 z def9$ by !
 ,secret>y & includ+ ! te*nical or      
pr(essional compon5t ( ! foll[+3  7,i7  

,surgical pa?ology4  7,,ii7             
,cytopa?ology4  7,,iii7 ,hematology4    
7,,iv7 ,blood bank+4  7,v7 ,pa?ology    
consultation & cl9ical laboratory       
int]pretation s]vices4  7ii7 ,radiation 
!rapy s]vices & supplies1 z def9$ by !  
,secret>y4  7iii7 ,advanc$ diagno/ic    
imag+ /udies 7z def9$ 9 section         
#ahcd7;e77#a77;,b774  7iv7 ,physical    
!rapy s]vices 7z describ$ 9 p>agraph    
7#f77;,b774  7v7 ,any o!r s]vice t !    
,secret>y has det]m9$ is n usually      
provid$ & complet$ z "p ( ! (fice visit 
to a physician's (fice 9 :i* ! s]vice is
 det]m9$ to be necess>y4  7,b7 ,! t]m   
specifi$ non-ancill>y s]vice does n     
include ! foll[+3 7i7 ,any s]vice t is  
furni%$--  7,i7 9 an urban area 7z def9$
 9 section #ahhf7;d77#b77;,d77 to an    
individual :o resides 9 a rural area 7z 
def9$ 9 su* section72 &  7,,ii7 to su*  
individual 9 its entirety on ! same day 
z ! day on :i*1 ) respect to ! condition
 = :i* ! s]vice is furni%$1 ! initial   
(fice visit ( ! individual = su*        

condition occurs4  7ii7 ,any s]vice t is
 furni%$-- 7,i7 by a provid] ( s]vices  
or suppli] p>ticipat+ 9 an acc\ntable   
c>e organization t p>ticipates 9 ! %>$  
sav+s program e/abli%$ "u section #ahii2
 &  7,,ii7 to a ,m$ic>e fee-=-s]vice    
b5efici>y 7z def9$ 9 section            
#ahii7;h77#c77 assign$ to su* acc\ntable
 c>e organization4  7iii7 ,any s]vice t 
is furni%$ by a provid] or suppli]      
pursuant to ! p>ticipation ( ! provid]  
or suppli] 9 a paym5t & s]vice deliv]y  
model select$ "u section #aaae;,a7a74   
7iv7 ,any s]vice t is provid$ by an     
integrat$ multi-specialty gr\p practice4
  7#i7 ,integrat$ multi-specialty gr\p  
practice ,! t]m integrat$               
multi-specialty gr\p practice means a   
gr\p practice1 z def9$ by ! ,secret>y1  
t--  7,a7 consi/s ( at lea/-- 7i7 prim>y
 c>e physicians :o provide prim>y c>e   
s]vices 7z def9$ 9 section              
#ahdb7;i77#d772 &  7ii7 sev5 or m       
diff]5t & di/9ct physician specialties  
7n includ+ subspecialties7 :i* are      

practic$ by physicians :o are bo>d      
c]tifi$ 9 ! physician specialty         
associat$ ) ! s]vices t !y provide2     
7,b7 is gov]n$ by a gov]n+ body t has   
made a det]m9ation 7& has docum5t$ su*  
det]m9ation7 t ! sy/em is focus$ on--   
7i7 promot+ acc\ntability = ! quality1  
co/1 & ov]all c>e = individuals entitl$ 
to b5efits "u "p ,a or enroll$ 9 "p ,b1 
includ+ by manag+ & coord9at+ c>e = su* 
individuals2 &  7ii7 enc\rag+ inve/m5t 9
 infra/ructure & r$esign$ c>e processes 
= high quality & effici5t s]vice deliv]y
 = pati5ts1 includ+ individuals describ$
 9 clause 7i72  7,c7 engages 9 risk-bas$
 paym5t arrangem5ts ) gov]nm5t &        
comm]cial pay]s1 includ+ %>$ sav+s1     
bundl$ paym5t arrangem5ts1 )holds1 &    
capitat$ paym5t arrangem5ts2 &  7,d7    
meets1 ) respect to ! program "u ?is    
title1 su* co/ r$uction & quality goals 
z ! ,secret>y det]m9es appropriate4  4  
7e7 ,con/ruction ,no?+ 9 ?is section 7or
 ! am5dm5ts made by ?is section7 %all be
 con/ru$ to affect ! au?ority ( !       

,secret>y ( ,heal? & ,human ,s]vices to 
waive "u section #ahii ( ! ,social      
,security ,act 7#db ,u4,s4,c4 #acie;jjj7
 ! requirem5ts impos$ "u ! provisions ( 
?is section 7or su* am5dm5ts7 or to     
affect ! au?ority ( ! ,secret>y to      
implem5t ! provisions "u section        
#ahdh7q7 ( su* ,act 7#db ,u4,s4,c4      
#aciew-#d7q77 7relat+ to ! eligible     
pr(essionals ,m]it-,bas$ ,inc5tive      
,paym5t ,sy/em "u ! ,m$ic>e program7 or 
section #ahcc7z7 ( su* ,act 7#db        
,u4,s4,c4 #aciel7z77 7relat+ to inc5tive
 paym5ts = p>ticipation 9 eligible      
alt]native paym5t models "u su*         
program74  7f7 ,effective date ,!       
am5dm5ts made by ?is section %all apply 
to items & s]vices furni%$ 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#aj7       
,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]vice ,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,,xii7 ,*anges to limitations on c]ta9 
physician ref]rals ,effective = fee     
s*$ules e/abli%$ beg9n+ ) #bjai1 r$uc$  
exp5ditures attributable to ! ,promot+  
,integrity 9 ,m$ic>e ,act ( #bjai4  4