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“(d) (1) Except as provided in paragraph (2), if the

2 Secretary determines that



“(A) neither the Health Systems Agency nor the 4 designated planning agency had been notified of any

proposed capital expenditure at least sixty days prior to 6 obligation for the expenditure; or 7

“(B) (i) the designated planning agency had not S approved the proposed expenditure; and

“(i) the designated planning agency had granted 10 to the person proposing the capital expenditure an op11 portunity for a fair hearing with respect to the findings 12 then, in determining Federal payments under titles V, 13 XVIII, and XIX for services furnished in the health care


14 facility for which the capital expenditure is made, the Secre15 tary shall not include any amount attributable to deprecia

16 tion, interest on borrowed funds, a return on equity capital

17 (in the case of proprietary facilities), other expenses

related 18 to the capital expenditure, or for direct operating costs, to 19 the extent that they can be directly associated with the 20 capital expenditure. In the case of a proposed capital ex21 penditure in a standard metropolitan statistical area which 22

encompasses more than one jurisdiction, that expenditure 23 shall require approval of the designated planning agency of 24 each jurisdiction who shall jointly review the proposal.


1 Where the designated planning agencies do not unanimously 2 agree, the proposed expenditure shall be deemed disapproved; 3 where the designated planning agencies do not act to approve 4 or disapprove the proposed expenditure within one hundred 5 and eighty days of submission of request for approval the 6 proposed expenditure shall be deemed approved; any deemed 7 approval or disapproval shall be subject to review and 8 reversal by the Secretary following a request submitted to

9 him within sixty days of the deemed approval or disapproval,

10 for a review and reconsideration based upon the record. With

11 respect to any organization which is reimbursed on a per 12 capita, fixed fee, or negotiated rate basis, in determining the 13 Federal payments to be made under titles V, XVIII, and

14 XIX; the Secretary shall exclude an amount reasonably

15 equivalent to the amount which would otherwise be excluded

16 under this subsection if payment were made on other than a 17 per capita, fixed fee, or negotiated rate basis. 18 “(2) If the Secretary, after submitting the matters in19 volved to the advisory council, determines that an exclusion 20 of expenses related to any capital expenditure would dis21 courage the operation or expansion of any health care facility 22

or health maintenance organization which has demonstrated

23 to his satisfaction proof of its capability to provide compre24 hensive headth care services (including institutional services) 25 effectively and economically, or would be inconsistent with


1 effective organization and delivery of health services or ef2 fective administration of title V, XVIII, or XIX, he shall

3 not exclude the expenses pursuant to paragraph (1).”


(d) Section 1122 (g) of the Social Security Act is

5 amended to read:

6 “(g) For purposes of this section, a 'capital expenditure' 7 is one which, under generally accepted accounting principles, 8 is not properly chargeable as an expense of operation and

9 maintenance and which (1) exceeds $100,000, (2) changes

10 the bed capacity of the facility, or (3) substantially changes 11 the services of the facility, including conversion of existing 12 beds to higher cost usage. The cost of studies, surveys, de13 signs, plans, working drawings, specifications, and other ac14 tivities essential to the acquisition, improvement, expansion, 15 or replacement of the plant and equipment shall be included 16 in determining whether the expenditure exceed $100,000. 17 (e) Section 1861 (z) of the Social Security Act is

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“(z) An overall plan and budget of a hospital, skilled 21 nursing facility, or home health agency shall 22

“(1) provide for an annual operating budget which 23

includes all anticipated income and expenses related to 24

items which would, under generally accepted account. ing principles, be considered income and expense items


92-202 0-77. 3




(except that nothing in this paragraph shall require that there be prepared, in connection with any budget an item-by-item identification of the components of each




type of anticipated expenditure or income);

(2) provide for a capital expenditures plan for at least a five-year period (including the year to which the operating budget applies) which identifies in detail




the sources of financing and the objectives of each

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anticipated expenditure in excess of $100,000 related to the acquisition of land, improvement of land, buildings, and equipment, and the replacement, modernization, and expansion of the buildings and equipment, and which would, under generally accepted accounting principles, be considered capital items. The capital expenditures plan shall be a matter of public record and available in readily accessible form and fashion;








(3) provide for annual review and updating; and

“ (4) be prepared, under the direction of the governing body of the institution or agency, by a committee consisting of representatives of the governing body, administrative staff, and medical staff (if any) of the




institution or agency."



24 Sec. 10. (a) (1) Title XVIII of the Social Security 25 Act is amended by adding the following section:




2 "SEC. 1868. (a) For purposes of this section the term 3 ‘participating physician' means a doctor of medicine or oste4 opathy who has in effect an agreement by which he agrees 5 to accept an assignment of claim (as provided for in section 6 1842 (b) (3) (B) (ii)) for each physicians' service (other 7 than those excluded from coverage by section 1862) per8 formed by him in the United States for an individual enrolled 9 under this part. The assignment shall be in a form prescribed 10 by the Secretary. The agreement may be terminated by 11 either party upon thirty days' notice to the other, filed in a 12 manner prescribed by the Secretary. 13 “(b) To expedite processing of claims from participat14 ing physicians, the Secretary shall establish procedures and 15 develop appropriate forms under which16

"(1) each physician will submit his claims on one 17. of alternative simplified approved bases, including mul

tiple listing of patients, and the Secretary shall act to 19 assure that these claims are processed expeditiously, and 20

" (2) The physician shall obtain from each patient 21 enrolled under this part (except in cases where the Sec22 retary finds it impractical for the patient to furnish it),



and shall make available at the Secretary's request, a


signed statement by which the patient: (i) agrees to make an assignment with respect to all services fur


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