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1 the prevailing charge recognized by the carrier and found 2 acceptable by the Secretary for similar services in the same 3 locality in administering this part on December 31, 1970, or 4 (II) the prevailing charge level that, on the basis of statis5 tical data and methodology acceptable to the Secretary, 6 would cover 75 per centum of the customary charges made 7 for similar services in the same locality during the last pre8 ceding calendar year elapsing prior to the start of the fiscal 9 year in which the bill is submitted or the request for pay10 ment is made.


"(ii) In the case of physician services the prevailing 12 charge level determined for purposes of clause (i) (II) for 13 any fiscal year beginning after June 30, 1973, may not 14 (except as otherwise provided in clause (iii)) exceed (in 15 the aggregate) the level determined under such clause for 16 the fiscal year ending June 30, 1973, except to the extent 17 that the Secretary finds, on the basis of appropriate econom18 ics index data, that such higher level is justified by economic 19 changes. Moreover, for any fiscal year beginning after June 20 30, 1978, no prevailing charge level for physicians' services 21 shall be increased to the extent that it would exceed by more than one-third the statewide prevailing charge level 23 (as determined under subparagraph (E)) for that service. "(iii) Notwithstanding the provisions of clauses (i) and



25 (ii) of this subparagraph, the prevailing charge level in the


1 case of a physician service in a particular locality determined 2 pursuant to such clauses for the fiscal year beginning July 1, 3 1975, shall, if lower than the prevailing charge level for the 4 fiscal year ending June 30, 1975, in the case of a similar 5 physician service in the same locality by reason of the appli6 cation of economic index data, be raised to such prevailing 7 charge level for the fiscal year ending June 30, 1975. "(C) In the case of medical services, supplies, and


9 equipment (including equipment servicing) that, in the judg10 ment of the Secretary, do not generally vary significantly in 11 quality from one supplier to another, the charges incurred 12 after December 31, 1972, determined to be reasonable may 13 not exceed the lowest charge levels at which such services, 14 supplies, and equipment are widely and consistently available 15 in a locality except to the extent and under circumstances. 16 specified by the Secretary.


"(D) The requirement in paragraph (3) (B) that a bill 18 be submitted or request for payment be made by the close of 19 the following calendar year shall not apply if (i) failure to 20 submit the bill or request the payment by the close of such 21 year is due to the error or misrepresentation or an officer, 22 employee, fiscal intermediary, carrier, or agent of the De23 partment of Health, Education, and Welfare performing 24 functions under this title and acting within the scope of his

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or its authority, and (ii) the bill is submitted or the payment


1 is requested promptly after such error or misrepresentation 2 is eliminated or corrected.

3 "(E) The Secretary shall determine separate statewide 4 prevailing charge levels for each State that, on the basis of 5 statistical data and methodology acceptable to the Secretary, 6 would cover 50 percent of the customary charges made for 7 similar services in the State during the last preceding calen8 dar year elapsing prior to the start of the fiscal year in 9 which the bill is submitted or the request for payment is 10 made.


"(F) Notwithstanding any other provision of this para12 graph, any charge for any particular service or procedure 13 performed by a doctor of medicine or osteopathy shall be 14 regarded as a reasonable charge if

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(i) the service or procedure is performed in an

area which the Secretary has designated as a physician

shortage area,

"the physician has a regular practice in the physi

cian shortage area,

"(iii) the charge does not exceed the prevailing charge level as determined under subparagraph (B), and

"(iv) the charge does not exceed the physician's customary charge.",



2 effect



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

upon enactment.


SEC. 12. (a) (1) Section 1861 (q) of the Social Se5 curity Act is amended by adding "(1)" inmediately 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:


"(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:

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"(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









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 im

mediate 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 11 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.


"(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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