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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).”

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(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 shall22

“(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. 25 ing principles, be considered income and expense items

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(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 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;

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“(3) provide for annual review and updating; and

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" (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

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institution or agency.

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AGREEMENT BY PHYSICIANS TO ACCEPT ASSIGNMENTS

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SEC. 10. (a) (1) Title XVIII of the Social Security

25 Act is amended by adding the following section:

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AGREEMENTS OF PHYSICIANS TO ACCEPT ASSIGNMENT

2 “SEC. 1868. (a) For purposes of this section the term 3 ‘participating physician' means a doctor of medicine or oste

4 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) per

8 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 which

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“(1) each physician will submit his claims on one of alternative simplified approved bases, including multiple listing of patients, and the Secretary shall act to

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assure that these claims are processed expeditiously, and

“ (2) The physician shall obtain from each patient

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enrolled under this part (except in cases where the Secretary finds it impractical for the patient to furnish it),

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

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

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nished by the physician; and (ii) authorizes the release

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of any medical information needed to review claims

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submitted by the physician.

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"(c) (1) Participating physicians shall be paid ad5 ministrative cost-savings allowances (as specified below in

6 this subsection) in addition to the reasonable charges that

7 are payable. 8 “ (2) The administrative cost-savings allowance shall 9 equal $1 and shall be paid to the participating physician for 10 each claim he submits in accordance with the simplified bill11 ing procedure referred to in subparagraph (b) and these

12 payments shall be treated as an administrative expense to the

13 medical insurance program: Provided, however, That:

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“(A) not more than $1 shall be payable to a phy

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sician for claims for services furnished to any par

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ticular patient within any seven-day period; and

“(B) no administrative cost-savings allowance shall be payable for services performed for a hospital inpatient or outpatient unless :

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“(i) the services are surgical services, anesthesia services, or services performed by a physician

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who, as an attending or consulting physician who, has personally examined the patient and whose office or regular place of practice is located outside a hospital, and

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“ (ü) the physician ordinarily bills directly (and 2

not through such hospital) for his services;

" (C) no administrative cost-savings allowance 4 shall be payable for services which consist solely of 5 laboratory or X-ray services which are for hospital

inpatients or outpatients or are performed outside the 7 office of the participating physician.”. 8 (b) The amendments made by paragraph (1) shall 9 become effective July 1, 1978.

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CRITERIA FOR DETERMINING REASONABLE CHARGE FOR

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PHYSICIANS' SERVICES

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SEC. 11. (a) (1) So much of section 1842 (b) (3) of 13 the Social Security Act as follows the first sentence is

14 amended to read:

15 “(3A) (A) In determining the reasonable charge for 16 services for purposes of paragraph (3) (including any 17 hospital-associated physicians), there shall be taken into 18 consideration the customary charges for similar services

19 generally made by the physician or other person furnishing 20 such services, as well as the prevailing charges in the locality

21 for similar services.

22 “ (B) (i) Except as otherwise provided in clause (iii), 23 no charge may be determined to be reasonable in the case of 24 bills submitted or requests for payment made under this part 25 after December 31, 1970, if it exceeds the higher of (I)

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