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son for administration to the patient by or under the

supervision of another physician;".

(b) Subsection (a) shall apply to items furnished after

4 the month of enactment of this Act.

5 PAYMENT UNDER MEDICARE OF CERTAIN PHYSICIANS'

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FEES ON ACCOUNT OF SERVICES FURNISHED TO A

DECEASED INDIVIDUAL

SEC. 14. (a) Section 1870 (f) of the Social Security 9 Act is amended, in the matter following clause (2) thereof,

10 by

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(1) inserting "(A)" immediately after", and only if", and

(2) by inserting immediately before the period the following: ", or (B) the spouse or other legally designated representative of such individual requests (in such form and manner as the Secretary shall by regula

tions prescribe) that payment for such services without regard to clause (A)".

(b) Subsection (a) shall apply to payments made after

20 the month of enactment.

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USE OF APPROVED RELATIVE VALUE SCHEDULE

SEC. 15. (a) To provide common language describing

23 the various kinds and levels of medical services which may 24 be reimbursed under titles V, XVIII, and XIX, of the Social 25 Security Act, the Secretary of Health, Education, and Wel

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1 fare shall establish a system of procedural terminology, in2 cluding definitions of the terms. The system shall be de3 veloped by the Health Care Financing Administration with 4 the advice of other large health care purchasers, representa5 tives of professional groups and other interested parties. 6 In developing the system, the Health Care Financing 7 Administration shall consider among other things, the 8 experience of third parties in using existing terminology 9 systems in terms of: implications for administrative and 10 program costs; simplicity and lack of ambiguity; and the 11 degree of acceptance and use.

12 (b) Upon development of a proposed system of proce13 dural terminology and its approval by the Secretary of 14 Health, Education, and Welfare, it shall be published in 15 the Federal Register. Interested parties shall have not less 16 than six months in which to comment on the proposed sys17 tem and to recommend relative values to the Secretary for 18 the procedures and services designated by the terms. Com19 ments and proposals shall be supported by information and 20 documentation specified by the Secretary.

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(c) The good faith preparation of a relative value sched22 ule or its submission to the Secretary by an association of 23 health practitioners solely in response to a request of the 24 Secretary as authorized under this section shall not in itself 25 be considered a violation of any consent decree by which

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an association has waived its right to make recommendations 2 concerning fees: Provided, That the proposed relative value 3 schedule shall not be disclosed to anyone other than those 4 persons actually preparing it or their counsel until it is made 5 public by the Secretary.

6 (d) The Health Care Financing Administration shall 7 review materials submitted under this section and shall 8 recommend that the Secretary adopt a specific terminology 9 system and its relative values for use by carriers in calculat10 ing reasonable charges under title XVIII of the Social 11 Security Act, but only after:

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(1) Interested parties have been given an opportunity to comment and any comments have been considered;

(2) Statistical analyses have been conducted assessing the economic impact of the relative values on the physicians in various specialties, geographic areas and types of practice, and on the potential liability of the program established by part B of title XVIII of the Social Security Act;

(3) It has been determined that the proposed ter

minology and related definitions are unambiguous, prac

tical, and easy to evaluate in actual clinical situations

24 and that the unit values assigned generally reflect the

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relative time and effort required to perform various procedures and services.

(4) That the use of the proposed system will enhance the administration of the Federal health care

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financing programs.

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(e) A system of terminology, definitions, and their 7 relative values, as approved by the Secretary, shall be pe8 riodically reviewed by him and may be modified. An ap9 proved system (as amended by any modification of the 10 Secretary) may subsequently be used by any organization or person for purposes other than those of this Act. Nothing 12 in this section shall be considered to bar the Secretary from 13 adopting a uniform system of procedural terminology in 14 situations where a relative value schedule has not been 15 approved.

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HOSPITAL PROVIDERS OF LONG-TERM CARE SERVICES

SEC. 20. (a) Section 1861 of the Social Security Act 18 is amended by adding after subsection (aa) (as added by

19 section 10 (b) of this Act) the following:

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"Hospital Providers of Extended Care Services

“(bb) (1) (A) Any hospital (other than a hospital 22 which has in effect a waiver of the requirement imposed by 23 subsection (e) (5)) which has an agreement under section 24 1866 may (subject to paragraph (2)) enter into an agree25 ment with the Secretary under which its inpatient hospital

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1 facilities may be used for the furnishing of services of the

2 type which, if furnished by a skilled nursing facility, would

3 constitute post-hospital extended care services.

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"(B) (i) Notwithstanding any other provision of this 5 title, payment to any hospital for services furnished under 6 an agreement entered into under this subsection shall be 7 based upon the reasonable cost of the services as determined 8 under this subparagraph.

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"(ii) The reasonable cost of the services will consist of 10 the reasonable cost of routine services and ancillary services. 11 The reasonable cost of routine services furnished during any 12 calendar year by a hospital under an agreement under this 13 subsection shall equal the product of the number of patient14 days during the year for which the services were furnished 15 and the average reasonable cost per patient-day. The aver16 age reasonable cost per patient-day shall be established as 17 the average rate per patient-day paid for routine services 18 during the previous calendar year under title XIX to skilled 19 nursing facilities located in the State in which the hospital is 20 located and which have agreements entered into under sec21 tion 1902a (28). The reasonable cost of ancillary services 22 shall be determined in the same manner as the reasonable 23 cost of ancillary services provided for inpatient hospital 24 services.

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