"(2) an individual shall be deemed entitled to monthly insurance benefits under section 202 for the month in which he died if he would have been entitled to such benefits for such month had he died in the next month.

"DEFINITIONS OF PROVIDERS OF SERVICES

"SEC. 1606. For purposes of this section

"Hospital

"(a) The term 'hospital' (except for purposes of section 1604 (c) (2), section 1609 (f), and paragraph (6) of this subsection) means an institution which"(1) is primarily engaged in providing, by or under the supervision of physicians or surgeons, (A) diagnostic services and therapeutic services for surgical or medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation facilities and services for the rehabilitation of injured, disabled, or sick persons,

"(2) maintains adequate medical records,

"(3) has by-laws in effect with respect to its staff of physicians,

"(4) continuously provides twenty-four-hour nursing service rendered or supervised by registered professional nurses,

"(5) has a hospital utilization committee or, in case such a committee is impractical because of the small size of the institution or for such other reason or reasons as may be included in regulations, meets such other requirements as may be prescribed therein to accomplish purposes similar to those for which such committees are established,

"(6) in the case of an institution in any State in which State or applicable local law provides for the licensing of hospitals, is licensed pursuant to such law or (if such law is inapplicable to public institutions) is a public institution, and

"(7) meets such other conditions of participation under this section as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by or in such institution; except that such term shall not include any institution which is primarily for the care and treatment of tuberculosis or mentally ill patients. For purposes of section 1604(c)(2), such term includes any institution which meets the requirements of paragraph (1) of this subsection. For purposes of section 1609(f), such term includes any institution which meets the requirements of paragraphs (1), (2), (4), and (6) of this subsection.

"Skilled Nursing Facility

"(b) The term 'skilled nursing facility' means (except for purposes of section 1604 (c) (2) an institution (or a distinct part of an institution) which

"(1) is primarily engaged in providing (A) skilled nursing care and related services for patients who require planned medical or nursing care or (B) rehabilitation services,

"(2) has medical policies, which are established by a group of professional personnel including one or more physicians, to govern the skilled nursing care and related medical or other services it provides and which include a requirement that every patient must be under the care of a physician, "(3) is under the supervision of a physician, or a registered professional nurse, who is responsible for the execution of such medical policies,

"(4) maintains adequate medical records,

"(5) continuously provides twenty-four-hour nursing service rendered or supervised by registered professional nurses or rendered or supervised by licensed practical nurses,

"(6) operates under a nursing facility utilization plan,

"(7) in the case of an institution in any State in which State or applicable local law provides for the licensing of institutions of this nature, is licensed pursuant to such law or (if such law is inapplicable to public institutions) is a public institution, and

"(8) meets such other conditions of participation under this section as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by or in such institution;

except that such term shall not include any institution which is primarily for the care and treatment of tuberculosis or mentally ill patients. For purposes of section 1604 (c) (2), such term includes any institution which meets the requirements of paragraph (1) of this subsection.

"Home Health Agency

"(c) The term 'home health agency' means an agency which—

"(1) is a public agency, or a private nonprofit organization exempt from Federal income taxation under section 501 of the Internal Revenue Code of 1954,

"(2) is primarily engaged in providing skilled nursing services or other therapeutic services,

"(3) has medical policies, established by a group of professional personnel including one or more physicians, to govern the services (referred to in paragraph (2)) which it provides,

"(4) maintains adequate medical records of services rendered,

"(5) in the case of an agency in any State in which State or local law provides for the licensing of agencies of this nature, is licensed pursuant to such law or (if such law is inapplicable to public agencies) is a public agency, and

"(6) meets such other conditions of participation as the Secretary may find necessary in the interest of the health and safety of individuals who are furnished services by such agency;

except that such term shall not include any agency which is primarily for the care and treatment of tuberculosis or mentally ill patients.

"Physician

"(d) The term 'physician" means an individual (including a physician within the meaning of section 1101(a)(7)) legally authorized to practice surgery or medicine by the State in which he performs the functions referred to in this title.

"Hospital Utilization Committee

"(e) A hospital utilization committee' in the case of any hospital means a committee, composed of physicians, or of one or more physicians and other professional personnel, which reviews (from the standpoint of the necessity therefor) admissions into, the duration of stays in, and the services furnished in such hospital.

"Nursing Facility Utilization Plan

"(f) A 'nursing facility utilization plan' means a plan, developed by or for a skilled nursing facility, which provides for the review (from the standpoint of the necessity therefor) of admissions into, the duration of stays in, and the services provided in such skilled nursing facility and which is approved by the public health authorities of the State in which such facility is located or, in the absence of provision for approval of plans of this nature by such authorities, by the Secretary or such other person or persons as he may designate.

"USE OF STATE AGENCIES AND OTHER ORGANIZATIONS TO DEVELOP CONDITIONS OF

PARTICIPATION FOR PROVIDERS OF SERVICES

"SEC. 1607. In carrying out his functions, relating to determination of conditions of participation by providers of services, under section 1606(a)(7), section 1606(b) (8), or section 1606(c)(6), the Secretary shall consult with the Health Insurance Benefits Advisory Council established by section 1612, appropriate State agencies, and recognized national listing or accrediting bodies. Such conditions prescribed under any of such sections may be varied for different areas or different classes of institutions or agencies and may, at the request of a State, provide higher requirements for such State than for other States. “USE OF STATE AGENCIES AND OTHER ORGANIZATIONS TO DETERMINE COMPLIANCE BY PROVIDERS OF SERVICE WITH CONDITIONS OF PARTICIPATION

"SEC. 1608. (a) The Secretary may, pursuant to agreement, utilize the services of State health agencies or other appropriate State agencies for the purposes of (1) determining whether an institution is a hospital or skilled nursing facility, or whether an agency is a home healthy agency, (2) determining whether a plan developed by or for a skilled nursing facility is a nursing facility utilization plan, or (3) providing consultative services to institutions or agencies to assist them (A) to qualify as hospitals, skilled nursing facilities, or home health agencies, (B) to establish and maintain fiscal records necessary for

purposes of this section, and (C) to provide information which may be necessary to permit determination under this title as to whether payments are due and the amounts thereof. To the extent that the Secretary finds it appropriate, an institution or agency which such a State agency certifies is a hospital, skilled nursing facility, or home health agency, or a plan which such a State agency certifies is a nursing facility utilization plan, may be treated as such by the Secretary. The Secretary shall pay any such State agency, in advance or by way of reimbursement, as may be provided in the agreement with it, for the reasonable cost of providing services under the agreement.

"(b) If the Secretary finds that accreditation of an institution by a national accreditation body, approved by him for such purpose, provides reasonable assurance that any or all of the conditions of section 1606 (a), (b), or (c), as the case may be, are met, he may, to the extent he deems it appropriate, treat such institution as meeting the condition or conditions with respect to which he made such finding.

"CONDITIONS OF AND LIMITATIONS ON PAYMENT FOR SERVICES

"Requirement of Requests and Certifications

"SEC. 1609. (a) Except as provided in subsection (f), payment for services furnished an individual may be made only to eligible providers of services and only if

"(1) written request, signed by such individual except in cases in which the Secretary finds it impractical for the individual to do so, is filed for such payment in such form, in such manner, within such time, and by such person or persons as the Secretary may by regulation prescribe;

"(2) a physician certifies in writing (and recertifies, where such services are furnished over a period of time, in such cases and with such frequency, appropriate to the case involved, as may be provided in regulations) that

"(A) in the case of inpatient hospital services, such services are or were required for such individual's medical treatment, or such services are or were required for diagnostic study;

"(B) in the case of outpatient hospital diagnostic services, such services are or were required for diagnostic study;

"(C) in the case of skilled nursing home services, such services are or were required because the individual needed skilled nursing care on a continuing basis for any of the conditions with respect to which he was receiving inpatient hospital services prior to transfer to the skilled nursing facility or for a condition requiring such care which arose after such transfer and while he was still in the facility for treatment of the condition or conditions for which he was receiving such inpatient hospital services;

"(D) in the case of home health services, such services are or were required because the individual needed skilled nursing care on an intermittent basis or because he needed physical or speech therapy; a plan for furnishing such services to such individual has been established and is periodically reviewed by a physician; and such services are or were furnished while the individual was under the care of a physician;

"(3) with respect to inpatient hospital services or skilled nursing home services furnished such individual for a continuous period in excess of thirty days, a determination has been made (in such cases and at such intervals, appropriate to the case involved, as may be provided by regulations) by a hospital utilization committee or under a nursing facility utilization plan, as the case may be, that there is or was a need for utilization of the hospital or skilled nursing facility by such individual after such thirty-day period for the reason described in subparagraph (A) or (C) of paragraph (2) and that the service or services which were furnished to him after such thirty-day period (and which are included within the definition of inpatient hosiptal services or skilled nursing services, as the case may be) are or were required by the individual for the reason described in such subparagraph.

"Determination of Costs of Services

"(b) The amount paid to any provider of services with respect to services for which payment may be made under this title shall be the reasonable cost of such services, as determined in accordance with regulations establishing the method or methods to be used in determining such costs for various types or classes of institutions, services, and agencies. Such regulations shall provide the method or methods of determining costs under this subsection and may provide for payment on a per diem, per unit, per capita, or other basis, may provide for using different methods in different circumstances, and may provide for the use of estimates of costs of particular items or services.

"Amount of Payment for More Expensive Services

"(c) (1) In case the bed and board furnished as part of inpatient hospital services or skilled nursing home services is in accommodations more expensive than the two-, three-, or four-bed accommodations and the use of such more expensive accommodations rather than such two-, three-, or four-bed accommodations was not at the request of the patient, payment with respect to such services may not exceed an amount equal to the reasonable cost of such services if furnished in such two-, three-, or four-bed accommodations unless the more expensive accommodations were required for medical reasons.

"(2) Where a provider of services with which an agreement under this title is in effect furnishes to an individual, at his request, items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this title, the Secretary shall pay to such provider of services only the equivalent of the reasonable cost of the items or services with respect to which payment under this title may be made and the provider of services may charge such individual not more than the difference between the amount generally charged by it for the items or services furnished at such request and the amount generally charged by it for the items or services with respect to which payment under this title may be made.

"Amount of Payment Where Less Expensive Services Furnished

"(d) In case the bed and board furnished as part of inpatient hospital services or skilled nursing home services in accommodations other than, but not more expensive than, two-, three-, or four-bed accommodations and the use of such other accommodations rather than the two-, three-, or four-bed accommodations was neither at the request of the patient nor for a reason which the Secretary determines is consistent with the purposes of this title, the amount of the payment with respect to such services under this title shall be the reasonable cost of such services minus the difference between the charge customarily made by the hospital or skilled nursing facility for such services in the two-, three-, or four-bed accommodations and the charge customarily made by it for such services in the accommodations furnished.

"No Payments to Federal Hospitals

"(e) No payment may be made under this title (except under subsection (f) of this section) to any Federal hospital which the Secretary determines, in accordance with regulations, is providing services to the public generally as a community hospital; and no such payment may be made to any provider of services for any item or service which such provider is obligated by a law of, or a contract with, the United States to render at public expense.

"Payment for Emergency Inpatient Hospital Services

"(f) The Secretary is authorized to make payments to any hospital for inpatient hospital services furnished by or under arrangements with it to an individual entitled to health insurance benefits even though such hospital does not have an agreement in effect under this title if (A) such services were emergency services and (B) the Secretary would be required to make such payment if the hospital had such an agreement in effect and otherwise met the conditions of payment hereunder. Such payment shall be made only in accordance with the provisions of subsection (b) and then only if such hospital agrees to comply, with respect to the emergency services provided, with the provisions of section 1610 (a).

"AGREEMENTS WITH PROVIDERS OF SERVICES

"SEC. 1610. (a) Any institution or agency which the Secretary determines is a hospital, skilled nursing facility, or home health agency (hereinafter and in section 1602 and section 1609(a) referred to as a 'provider of services') shall be eligible for payments under this title if it files with the Secretary an agreement not to charge any individual or any other person for services for which such individual is entitled to have payment made under this title (or for which he would be so entitled if such provider had complied with the procedural and other requirements under or pursuant to this title), and will make adequate provision for return (or other disposition, in accordance with regulations) of any moneys incorrectly collected from such individual or other person, except that such provider of services may charge such individual or other person the amount of any deduction imposed pursuant to section 1604 (a) with respect to such services and may also charge such individual or other person to the extent provided in section 1609 (c) (2).

“(b) An agreement with the Secretary under this section may be terminated— "(1) by the provider of services at such time and upon such notice to the Secretary and the public as may be provided in regulations, or

"(2) by the Secretary at such time and upon such notice to the provider of services as may be specified in regulations, but only after the Secretary has determined, and has given such provider notification thereof, (A) that such provider of services is not complying substantially with the provisions of such agreement, or with the provisions of this title and regulations thereunder, or (B) that such provider no longer substantially meets the applicable provisions of section 1606, or (C) that such provider of services has failed to provide such information as the Secretary finds necessary to determine whether payments are due under this title and the amounts thereof, or has refused to permit such examination of its fiscal and other records by or on behalf of the Secretary as may be necessary to verify such information. “(c) Nothing in this title shall preclude any provider of services or any group or groups of such providers from being represented by an individual, association, or organization authorized by such provider or providers of services to act on their behalf in negotiating with respect to their participation under this title and the terms, methods, and amounts of payments for services to be provided thereunder.

"(d) Where an agreement filed under this title by a provider of services has been terminated by the Secretary, such provider may not file another agreement under this title unless the Secretary finds that the reason for the termination has been removed and there is reasonable assurance that it will not recur.

"PAYMENT TO PROVIDERS OF SERVICES

"SEC. 1611. The Secretary shall periodically determine the amount which should be paid to each provider of services under this title with respect to the services furnished by it, and shall pay to the provider, at such time or times as he believes appropriate and prior to audit or settlement by the General Accounting Office, from the Federal Social Insurance Trust Fund (established by section 706) the amounts so determined, reduced, or increasde, as the case may be, by any sum by which the Secretary finds that the amount paid to such provider of services for any prior period was greater or less than the amount which should have been paid to it for such period.

"HEALTH INSURANCE BENEFITS ADVISORY COUNCIL

"SEC. 1612. For the purpose of advising the Secretary on matters of general policy in the administration of this title and in the formulation of regulations under this title, there is hereby created a Health Insurance Benefits Advisory Council which shall consist of fourteen persons, not otherwise in the employ of the United States, appointed by the Secretary without regard to the civil service laws. The Secretary shall from time to time appoint one of the members to serve as chairman. Not less than four of the appointed members shall be persons who are outstanding in the fields pertaining to hospitals and health activities. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and except that the terms of office of the members