2 effect

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(2) The amendment made by paragraph (1) shall take

upon enactment.

HOSPITAL-ASSOCIATED PHYSICIANS

SEC. 12. (a) (1) Section 1861 (q) of the Social Se5 curity Act is amended by adding "(1)" immediately after 6"(q)" and by adding, immediately before the period at the 7 end thereof, the following: "; except that the term does not 8 include any service that a physician may perform as an 9 educator, an executive, or a researcher; or any professional 10 patient care service unless the service (A) is personally 11 performed by or personally directed by a physician for the 12 benefit of the patient and (B) is of such nature that its 13 performance by a physician is customary and appropriate”. 14 (2) Section 1861 (q) is amended by adding the fol15 lowing paragraphs at the end:

16

"(2) In the case of anesthesiology services, a procedure 17 would be considered to be 'personally performed' in its en18 tirety by a physician where the physician performs the 19 following activities:

"(A) preanesthetic evaluation of the patient;

"(B) prescription of the anesthesia plan;

"(C) personal participation in the most demanding procedures in this plan, including those of induction and emergence and assuring that a qualified individual,

who need not be his employee, performs any of the

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less demanding procedures which the physician does

not personally perform;

"(D) following the course of anesthesia administration at frequent intervals;

"(E) remaining physically available for the immediate diagnosis and treatment of emergencies; and "(F) providing indicated postanesthesia care:

8 Provided, however, That during the performance of the activ9 ities described in subparagraphs (C), (D), and (E), the 10 physician is not responsible for the care of more than one other patient. Where a physician performs the activities 12 described in subparagraphs (A), (B), (D), and (E) and 13 another individual performs the activities described in sub14 paragraph (C), the physician will be deemed to have 15 personally directed the services if he was responsible for no 16 more than four patients while performing the activities de17 scribed in subparagraphs (D) and (E) and the reasonable 18 charge for his personal direction shall not exceed one-half 19 the amount that would have been payable if he had person20 ally performed the procedure in its entirety.

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"(3) Pathology services shall be considered 'physicians' 22 services' to patients only where the physician personally 23 performs acts or makes decisions with respect to a patient's 24 diagnosis or treatment which require the exercise of medical 25 judgment. These include operating room and clinical con

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1 sultations, the required interpretation of the significance of 2 any material or data derived from a human being, the aspira3 tion or removal of marrow or other materials, and the ad4 ministration of test materials or isotopes. Such professional 5 services shall not include professional services such as: the 6 performance of autopsies; and services performed in carrying 7 out responsibilities for supervision, quality control, and for 8 various other aspects of a clinical laboratory's operations 9 that are customarily performed by nonphysician personnel. (3) Section 1861 (b) of such Act is amended

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(A) by striking out "or" at the end of paragraph (6),

(B) by striking out the period at the end of paragraph (7) and inserting "; or", and

(C) by adding at the end the following paragraph:

"(8) a physician, if the services provided are not physicians' services (within the meaning of subsection (q)).".

(b) (1) Section 1861 (s) of the Social Security Act 20 is amended by adding at the end: "The term ‘medical and 21 other health services' shall not include services described in 22 paragraphs (2) (A) and (3) if furnished to inpatients of a 23 provider of services unless the Secretary finds that, because 24 of the size of the hospital and the part-time nature of the 25 services or for some other reason acceptable to him, it would

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be less efficient to have the services furnished by the hospital

(or by others under arrangement with them made by the

3 hospital) than to have them furnished by another party.".

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(2) Section 1842 (b) (3A) of such Act, as added by section 20 of this Act, is amended by adding:

"(G) The charge for a physician's or other per

son's services and items which are related to the income

or receipts of a hospital or hospital subdivision shall not be considered in determining his customary charge to the extent that the charge exceeds an amount equal to

the salary which would reasonably have been paid for the service (together with any additional costs that

13 would have been incurred by the hospital) to the physi

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cian performing it if it had been performed in an employment relationship with the hospital plus the cost of other expenses (including a reasonable allowance for traveltime and other reasonable types of expense related to any differences in acceptable methods of organization

for the provision of services) incurred by the physician,

as the Secretary may determine to be appropriate.".

(c) Section 1861 (v) of the Social Security Act is 22 amended by adding:

"(8) (A) Where physicians' services are furnished

24 under an arrangement (including an arrangement under

25 which the physician performing the services is compensated

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1 sultations, the required interpretation of the significance of 2 any material or data derived from a human being, the aspira3 tion or removal of marrow or other materials, and the ad4 ministration of test materials or isotopes. Such professional 5 services shall not include professional services such as: the 6 performance of autopsies; and services performed in carrying 7 out responsibilities for supervision, quality control, and for 8 various other aspects of a clinical laboratory's operations 9 that are customarily performed by nonphysician personnel. (3) Section 1861 (b) of such Act is amended— (A) by striking out "or" at the end of paragraph (6),

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(B) by striking out the period at the end of paragraph (7) and inserting "; or", and

(C) by adding at the end the following paragraph:

"(8) a physician, if the services provided are not physicians' services (within the meaning of subsection (q)).".

(b) (1) Section 1861 (s) of the Social Security Act 20 is amended by adding at the end: "The term 'medical and 21 other health services' shall not include services described in 22 paragraphs (2) (A) and (3) if furnished to inpatients of a 23 provider of services unless the Secretary finds that, because 24 of the size of the hospital and the part-time nature of the 25 services or for some other reason acceptable to him, it would