[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3046 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3046

   To amend the Public Health Service Act to limit the referral by a 
 physician to certain services in which the physician has a financial 
                             relationship.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 9, 1993

 Mr. Waxman (for himself and Mr. Stark) introduced the following bill; 
       which was referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
   To amend the Public Health Service Act to limit the referral by a 
 physician to certain services in which the physician has a financial 
                             relationship.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Physician Ownership and Referral Act 
of 1993''.

SEC. 2. PUBLIC HEALTH SERVICE ACT AMENDMENT.

    (a) In General.--The Public Health Service Act is amended by adding 
at the end the following new title:

        ``TITLE XXVII--LIMITATION ON CERTAIN PHYSICIAN REFERRALS

``SEC. 2701. LIMITATION ON CERTAIN PHYSICIAN REFERRALS.

    ``(a) Prohibition of Certain Referrals.--
            ``(1) In general.--Except as provided in subsection (b), if 
        a physician (or an immediate family member of such physician) 
        has a financial relationship with an entity specified in 
        paragraph (2), then--
                    ``(A) the physician may not make a referral to the 
                entity for the furnishing of designated health services 
                for which a charge is imposed, and
                    ``(B) the entity may not present or cause to be 
                presented a claim or bill to any individual, third 
                party payor, or other entity for designated health 
                services furnished pursuant to a referral prohibited 
                under subparagraph (A).
            ``(2) Financial relationship specified.--For purposes of 
        this section, a financial relationship of a physician (or an 
        immediate family member of such physician) with an entity 
        specified in this paragraph is--
                    ``(A) except as provided in subsections (c) and 
                (d), an ownership or investment interest in the entity, 
                or
                    ``(B) except as provided in subsection (e), a 
                compensation arrangement (as defined in subsection 
                (h)(1)) between the physician (or an immediate family 
                member of such physician) and the entity.
        An ownership or investment interest described in subparagraph 
        (A) may be through equity, debt, or other means and includes an 
        interest in an entity that holds an ownership or investment 
        interest in any entity providing the designated health service.
    ``(b) General Exceptions to Both Ownership and Compensation 
Arrangement Prohibitions.--Subsection (a)(1) shall not apply in the 
following cases:
            ``(1) Physicians' services.--In the case of physicians' 
        services (as defined in section 1861(q) of the Social Security 
        Act) provided personally by (or under the personal supervision 
        of) another physician in the same group practice (as defined in 
        subsection (h)(4)) as the referring physician.
            ``(2) In-office ancillary services.--In the case of 
        services (other than durable medical equipment (excluding 
        infusion pumps) and parenteral and enteral nutrients, 
        equipment, and supplies)--
                    ``(A) that are furnished--
                            ``(i) personally by the referring 
                        physician, personally by a physician who is a 
                        member of the same group practice as the 
                        referring physician, or personally by 
                        individuals who are directly supervised by the 
                        physician or by another physician in the group 
                        practice, and
                            ``(ii)(I) in a building in which the 
                        referring physician (or another physician who 
                        is a member of the same group practice) 
                        furnishes physicians' services unrelated to the 
                        furnishing of designated health services, or
                            ``(II) in the case of a referring physician 
                        who is a member of a group practice, in another 
                        building which is used by the group practice--
                                    ``(aa) for the provision of some or 
                                all of the group's clinical laboratory 
                                services, or
                                    ``(bb) for the centralized 
                                provision of the group's designated 
                                health services (other than clinical 
                                laboratory services),
                        unless the Secretary determines other terms and 
                        conditions under which the provision of such 
                        services does not present a risk of program or 
                        patient abuse, and
                    ``(B) that are billed by the physician performing 
                or supervising the services, by a group practice of 
                which such physician is a member under a billing number 
                assigned to the group practice, or by an entity that is 
                wholly owned by such physician or such group practice,
        if the ownership or investment interest in such services meets 
        such other requirements as the Secretary may impose by 
        regulation as needed to protect against program or patient 
        abuse.
            ``(3) Prepaid plans--In the case of services furnished by 
        an organization--
                    ``(A) with a contract under section 1876 of the 
                Social Security Act to an individual enrolled with the 
                organization,
                    ``(B) described in section 1833(a)(1)(A) of such 
                Act to an individual enrolled with the organization,
                    ``(C) receiving payments on a prepaid basis, under 
                a demonstration project under section 402(a) of the 
                Social Security Amendments of 1967 or under section 
                222(a) of the Social Security Amendments of 1972, to an 
                individual enrolled with the organization, or
                    ``(D) that is a qualified health maintenance 
                organization (within the meaning of section 1310(d)) to 
                an individual enrolled with the organization.
            ``(4) Other permissible exceptions.--In the case of any 
        other financial relationship which the Secretary determines, 
        and specifies in regulations, does not pose a risk of program 
        or patient abuse.
    ``(c) General Exception Related Only to Ownership or Investment 
Prohibition for Ownership in Publicly Traded Securities and Mutual 
Funds.--Ownership of the following shall not be considered to be an 
ownership or investment interest described in subsection (a)(2)(A):
            ``(1) Ownership of investment securities (including shares 
        or bonds, debentures, notes, or other debt instruments) which 
        may be purchased on terms generally available to the public and 
        which are--
                    ``(A)(i) securities listed on the New York Stock 
                Exchange, the American Stock Exchange, or any regional 
                exchange in which quotations are published on a daily 
                basis, or foreign securities listed on a recognized 
                foreign, national, or regional exchange in which 
                quotations are published on a daily basis, or
                    ``(ii) traded under an automated interdealer 
                quotation system operated by the National Association 
                of Securities Dealers, and
                    ``(B) in a corporation that had, at the end of the 
                corporation's most recent fiscal year, or on average 
                during the previous 3 fiscal years, stockholder equity 
                exceeding $75,000,000.
            ``(2) Ownership of shares in a regulated investment company 
        as defined in section 851(a) of the Internal Revenue Code of 
        1986, if such company had, at the end of the company's most 
        recent fiscal year, or on average during the previous 3 fiscal 
        years, total assets exceeding $75,000,000.
    ``(d) Additional Exceptions Related Only to Ownership or Investment 
Prohibition.--The following, if not otherwise excepted under subsection 
(b), shall not be considered to be an ownership or investment interest 
described in subsection (a)(2)(A):
            ``(1) Hospitals in puerto rico.--In the case of designated 
        health services provided by a hospital located in Puerto Rico.
            ``(2) Rural provider.--In the case of designated health 
        services furnished in a rural area (as defined in section 
        1886(d)(2)(D) of the Social Security Act) by an entity, if 
        substantially all of the designated health services furnished 
        by such entity are furnished to individuals residing in such a 
        rural area.
            ``(3) Hospital ownership.--In the case of designated health 
        services provided by a hospital (other than a hospital 
        described in paragraph (1)) if--
                    ``(A) the referring physician is authorized to 
                perform services at the hospital, and
                    ``(B) the ownership or investment interest is in 
                the hospital itself (and not merely in a subdivision of 
                the hospital).
    ``(e) Exceptions Relating to Other Compensation Arrangements.--The 
following shall not be considered to be a compensation arrangement 
described in subsection (a)(2)(B):
            ``(1) Rental of office space; rental of equipment.--
                    ``(A) Office space.--Payments made by a lessee to a 
                lessor for the use of premises if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        premises covered by the lease,
                            ``(ii) the space rented or leased does not 
                        exceed that which is reasonable and necessary 
                        for the legitimate business purposes of the 
                        lease or rental and is used exclusively by the 
                        lessee when being used by the lessee, except 
                        that the lessee may make payments for the use 
                        of space consisting of common areas if such 
                        payments do not exceed the lessee's pro rata 
                        share of expenses for such space based upon the 
                        ratio of the space used exclusively by the 
                        lessee to the total amount of space (other than 
                        common areas) occupied by all persons using 
                        such common areas,
                            ``(iii) the lease provides for a term of 
                        rental or lease for at least 1 year,
                            ``(iv) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties, and
                            ``(vi) the lease meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.
                    ``(B) Equipment.--Payments made by a lessee of 
                equipment to the lessor of the equipment for the use of 
                the equipment if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        equipment covered by the lease,
                            ``(ii) the equipment rented or leased does 
                        not exceed that which is reasonable and 
                        necessary for the legitimate business purposes 
                        of the lease or rental and is used exclusively 
                        by the lessee when being used by the lessee,
                            ``(iii) the lease provides for a term of 
                        rental or lease of at least 1 year,
                            ``(iv) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties, and
                            ``(vi) the lease meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.
            ``(2) Bona fide employment relationships.--Any amount paid 
        by an employer to a physician (or an immediate family member of 
        such physician) who has a bona fide employment relationship 
        with the employer for the provision of services if--
                    ``(A) the employment is for identifiable services,
                    ``(B) the amount of the remuneration under the 
                employment--
                            ``(i) is consistent with the fair market 
                        value of the services, and
                            ``(ii) is not determined in a manner that 
                        takes into account (directly or indirectly) the 
                        volume or value of any referrals by the 
                        referring physician,
                    ``(C) the remuneration is provided pursuant to an 
                agreement which would be commercially reasonable even 
                if no referrals were made to the employer, and
                    ``(D) the employment meets such other requirements 
                as the Secretary may impose by regulation as needed to 
                protect against program or patient abuse.
        Subparagraph (B)(ii) shall not prohibit the payment of 
        remuneration in the form of a productivity bonus based on 
        services performed personally by the physician (or an immediate 
        family member of such physician).
            ``(3) Personal service arrangements.--
                    ``(A) In general.--Remuneration from an entity 
                under an arrangement (including remuneration for 
                specific physicians' services furnished to a nonprofit 
                blood center) if--
                            ``(i) the arrangement is set out in 
                        writing, signed by the parties, and specifies 
                        the services covered by the arrangement,
                            ``(ii) the arrangement covers all of the 
                        services to be provided by the physician (or an 
                        immediate family member of such physician) to 
                        the entity,
                            ``(iii) the aggregate services contracted 
                        for do not exceed those that are reasonable and 
                        necessary for the legitimate business purposes 
                        of the arrangement,
                            ``(iv) the term of the arrangement is for 
                        at least 1 year,
                            ``(v) the compensation to be paid over the 
                        term of the arrangement is set in advance, does 
                        not exceed fair market value, and except in the 
                        case of a physician incentive plan described in 
                        subparagraph (B), is not determined in a manner 
                        that takes into account the volume or value of 
                        any referrals or other business generated 
                        between the parties,
                            ``(vi) the services to be performed under 
                        the arrangement do not involve the counseling 
                        or promotion or a business arrangement or other 
                        activity that violates any State or Federal 
                        law, and
                            ``(vii) the arrangement meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.
                    ``(B) Physician incentive plan exception.--
                            ``(i) In general.--In the case of a 
                        physician incentive plan (as defined in clause 
                        (ii)) between a physician and an entity, the 
                        compensation may be determined in a manner 
                        (through a withhold, capitation, bonus, or 
                        otherwise) that takes into account directly or 
                        indirectly the volume or value of any referrals 
                        or other business generated between the 
                        parties, if the plan meets the following 
                        requirements:
                                    ``(I) No specific payment is made 
                                directly or indirectly under the plan 
                                to a physician or a physician group as 
                                an inducement to reduce or limit 
                                medically necessary services provided 
                                with respect to a specific individual 
                                enrolled with the entity.
                                    ``(II) In the case of a plan that 
                                places a physician or a physician group 
                                at substantial financial risk as 
                                determined by the Secretary pursuant to 
                                section 1876(i)(8)(A)(ii) of the Social 
                                Security Act, the plan complies with 
                                any requirements the Secretary may 
                                impose pursuant to such section.
                                    ``(III) Upon request by the 
                                Secretary, the entity provides the 
                                Secretary with access to descriptive 
                                information regarding the plan, in 
                                order to permit the Secretary to 
                                determine whether the plan is in 
                                compliance with the requirements of 
                                this clause.
                            ``(ii) Physician incentive plan defined.--
                        For purposes of this subparagraph, the term 
                        `physician incentive plan' means any 
                        compensation arrangement between an entity and 
                        a physician or physician group that may 
                        directly or indirectly have the effect of 
                        reducing or limiting services provided with 
                        respect to individuals enrolled with the 
                        entity.
            ``(4) Remuneration unrelated to the provision of designated 
        health services.--In the case of remuneration which is provided 
        by a hospital to a physician if such remuneration does not 
        relate to the provision of designated health services.
            ``(5) Physician recruitment.--In the case of remuneration 
        which is provided by a hospital to a physician to induce the 
        physician to relocate to the geographic area served by the 
        hospital in order to be a member of the medical staff of the 
        hospital, if--
                    ``(A) the physician is not required to refer 
                patients to the hospital,
                    ``(B) the amount of the remuneration under the 
                arrangement is not determined in a manner that takes 
                into account (directly or indirectly) the volume or 
                value of any referrals by the referring physician, and
                    ``(C) the arrangement meets such other requirements 
                as the Secretary may impose by regulation as needed to 
                protect against program or patient abuse.
            ``(6) Isolated transactions.--In the case of an isolated 
        financial transaction, such as a one-time sale of property or 
        practice, if--
                    ``(A) the requirements described in subparagraphs 
                (B) and (C) of paragraph (2) are met with respect to 
                the entity in the same manner as they apply to an 
                employer, and
                    ``(B) the transaction meets such other requirements 
                as the Secretary may impose by regulation as needed to 
                protect against program or patient abuse.
            ``(7) Certain group practice arrangements with a 
        hospital.--
                    ``(A) In general.--An arrangement between a 
                hospital and a group under which designated health 
                services are provided by the group but are billed by 
                the hospital if--
                            ``(i) with respect to services provided to 
                        an inpatient of the hospital, the arrangement 
                        is pursuant to the provision of inpatient 
                        hospital services under section 1861(b)(3) of 
                        the Social Security Act,
                            ``(ii) the arrangement began before 
                        December 19, 1989, and has continued in effect 
                        without interruption since such date,
                            ``(iii) with respect to the designated 
                        health services covered under the arrangement, 
                        substantially all of such services furnished to 
                        patients of the hospital are furnished by the 
                        group under the arrangement,
                            ``(iv) the arrangement is pursuant to an 
                        agreement that is set out in writing and that 
                        specifies the services to be provided by the 
                        parties and the compensation for services 
                        provided under the agreement,
                            ``(v) the compensation paid over the term 
                        of the agreement is consistent with fair market 
                        value and the compensation per unit of services 
                        is fixed in advance and is not determined in a 
                        manner that takes into account the volume or 
                        value of any referrals or other business 
                        generated between the parties,
                            ``(vi) the compensation is provided 
                        pursuant to an agreement which would be 
                        commercially reasonable even if no referrals 
                        were made to the entity, and
                            ``(vii) the arrangement between the parties 
                        meets such other requirements as the Secretary 
                        may impose by regulation as needed to protect 
                        against program or patient abuse.
            ``(8) Payments by a physician for items and services.--
        Payments made by a physician--
                    ``(A) to a laboratory in exchange for the provision 
                of clinical laboratory services, or
                    ``(B) to an entity as compensation for other items 
                or services if the items or services are furnished at a 
                price that is consistent with fair market value.
    ``(f) Reporting Requirements.--Each entity providing covered items 
or services for which a charge is imposed shall provide the Secretary 
with the information concerning the entity's ownership arrangements, 
including--
            ``(1) the covered items and services provided by the 
        entity, and
            ``(2) the names and unique physician identification numbers 
        (used under title XVIII of the Social Security Act) of all 
        physicians with an ownership or investment interest (as 
        described in subsection (a)(2)(A)) in the entity, or whose 
        immediate relatives have such an ownership or investment.
Such information shall be provided in such form, manner, and at such 
times as the Secretary shall specify, Such information shall first be 
provided not later than December 31, 1994. The requirement of this 
subsection shall not apply to covered items and services furnished 
outside the United States or to entities which the Secretary determines 
furnishes services for which a charge is imposed very infrequently.
    ``(g) Sanctions.--
            ``(1) No liability for payment.--No individual, third party 
        payer, or other entity is liable for payment for designated 
        health services for which a claim is presented in violation of 
        subsection (a)(1)(B).
            ``(2) Requiring refunds for certain claims.--If a person 
        collects any amounts that were billed in violation of 
        subsection (a)(1), the person shall be liable to the individual 
        for, and shall refund on a timely basis to the individual, any 
        amounts so collected.
            ``(3) Civil money penalty and exclusion for improper 
        claims.--Any person that presents or causes to be presented a 
        bill or a claim for a service that such person knows or should 
        know is for a service for which payment may not be made under 
        paragraph (1) or for which a refund has not been made under 
        paragraph (2) shall be subject to a civil money penalty of not 
        more than $15,000 for each such service.
            ``(4) Civil money penalty and exclusion for circumvention 
        schemes.--Any physician or other entity that enters into an 
        arrangement or scheme (such as a cross-referral arrangement) 
        which the physician or entity knows or should know has as a 
        principal purpose of assuring referrals by the physician to a 
        particular entity which, if the physician directly made 
        referrals to such entity, would be in violation of this 
        section, shall be subject to a civil money penalty of not more 
        than $100,000 for each such arrangement or scheme.
            ``(5) Failure to report information.--Any person who is 
        required, but fails, to meet a reporting requirement of 
        subsection (f) if subject to a civil money penalty of not more 
        than $10,000 for each day for which reporting is required to 
        have been made.
            ``(6) Civil money penalty procedures.--The provisions of 
        section 1128A of the Social Security Act (other than the first 
        sentence of subsection (a) and other than subsection (b)) shall 
        apply to a civil money penalty under this subsection in the 
        same manner as such provisions apply to a penalty or proceeding 
        under section 1128A(a) of such Act.
    ``(h) Definitions and Special Rules.--For purposes of this section:
            ``(1) Compensation arrangement; remuneration.--(A) The term 
        `compensation arrangement' means any arrangement involving any 
        remuneration between a physician (or an immediate family member 
        of such physician) and an entity other than an arrangement 
        involving only remuneration described in subparagraph (C).
            ``(B) The term `remuneration' includes any remuneration, 
        directly or indirectly, overtly or covertly, in cash or in 
        kind.
            ``(C) Remuneration described in this subparagraph is any 
        remuneration consisting of any of the following:
                    ``(i) The forgiveness of amounts owed for 
                inaccurate tests or procedures, mistakenly performed 
                tests or procedures, or the correction of minor billing 
                errors.
                    ``(ii) The provision of items, devices, or supplies 
                that are used solely to--
                            ``(I) collect, transport, process, or store 
                        specimens for the entity providing the item, 
                        device, or supply, or
                            ``(II) order or communicate the results of 
                        tests or procedures for such entity.
                    ``(iii) A payment made by an insurer or a self-
                insured plan to a physician to satisfy a claim, 
                submitted on a fee for service basis, for the 
                furnishing of health services by that physician to an 
                individual who is covered by a policy with the insurer 
                or by the self-insured plan, if--
                            ``(I) the health services are not 
                        furnished, and the payment is not made, 
                        pursuant to a contract or other arrangement 
                        between the insurer or the plan and the 
                        physician,
                            ``(II) the payment is made to the physician 
                        on behalf of the covered individual and would 
                        otherwise be made directly to such individual,
                            ``(III) the amount of the payment is set in 
                        advance, does not exceed fair market value, and 
                        is not determined in a manner that takes into 
                        account directly or indirectly the volume or 
                        value of any referrals, and
                            ``(IV) the payment meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.
            ``(2) Employee.--An individual is considered to be 
        `employed by' or an `employee' of an entity if the individual 
        would be considered to be an employee of the entity under the 
        usual common law rules applicable in determining the employer-
        employee relationship (as applied for purposes of section 
        3121(d)(2) of the Internal Revenue Code of 1986).
            ``(3) Fair market value.--The term `fair market value' 
        means the value in arms length transactions, consistent with 
        the general market value, and, with respect to rentals or 
        leases, the value of rental property for general commercial 
        purposes (not taking into account its intended use) and, in the 
        case of a lease of space, not adjusted to reflect the 
        additional value the prospective lessee or lessor would 
        attribute to the proximity or convenience to the lessor where 
        the lessor is a potential source of patient referrals to the 
        lessee.
            ``(4) Group practice.--
                    ``(A) Definition of group practice.--The term 
                `group practice' means a group of 2 or more physicians 
                legally organized as a partnership, professional 
                corporation, foundation, not-for-profit corporation, 
                faculty practice plan, or similar association--
                            ``(i) in which each physician who is a 
                        member of the group provides substantially the 
                        full range of services which the physician 
                        routinely provides, including medical care, 
                        consultation, diagnosis, or treatment, through 
                        the joint use of shared office space, 
                        facilities, equipment and personnel,
                            ``(ii) for which substantially all of the 
                        services of the physicians who are members of 
                        the group are provided through the group and 
                        are billed under a billing number assigned to 
                        the group and amounts so received are treated 
                        as receipts of the group,
                            ``(iii) in which the overhead expenses of 
                        and the income from the practice are 
                        distributed in accordance with methods 
                        previously determined,
                            ``(iv) except as provided in subparagraph 
                        (B)(i), in which no physician who is a member 
                        of the group directly or indirectly receives 
                        compensation based on the volume or value of 
                        referrals by the physician,
                            ``(v) in which members of the group 
                        personally conduct no less than 75 percent of 
                        the physician-patient encounters of the group 
                        practice, and
                            ``(vi) which meets such other standards as 
                        the Secretary may impose by regulation.
                    ``(B) Special rules.--
                            ``(i) Profits and productivity bonuses.--A 
                        physician in a group practice may be paid a 
                        share of overall profits of the group, or a 
                        productivity bonus based on services personally 
                        performed or services incident to such 
                        personally performed services, so long as the 
                        share or bonus is not determined in any manner 
                        which is directly related to the volume or 
                        value of referrals by such physician.
                            ``(ii) Faculty practice plans.--In the case 
                        of a faculty practice plan associated with a 
                        hospital, institution of higher education, or 
                        medical school with an approved medical 
                        residency training program in which physician 
                        members may provide a variety of different 
                        specialty services and provide professional 
                        services both within and outside the group, as 
                        well as perform other tasks such as research, 
                        subparagraph (A) shall be applied only with 
                        respect to the services provided within the 
                        faculty practice plan.
            ``(5) Referral; referring physician.--
                    ``(A) Physicians' services.--Except as provided in 
                subparagraph (C), in the case of an item or service for 
                which payment may be made under part B, the request by 
                a physician for the item or service, including the 
                request by a physician for a consultation with another 
                physician (and any test or procedure ordered by, or to 
                be performed by (or under the supervision of) that 
                other physician), constitutes a `referral' by a 
                `referring physician'.
                    ``(B) Other items.--Except as provided in 
                subparagraph (C), the request or establishment of a 
                plan of care by a physician which includes the 
                provision of the designated health service constitutes 
                a `referral' by a `referring physician'.
                    ``(C) Clarification respecting certain services 
                integral to a consultation by certain specialists.--A 
                request by a pathologist for clinical diagnostic 
                laboratory tests and pathological examination services, 
                a request by a radiologist for diagnostic radiology 
                services, and a request by a radiation oncologist for 
                radiation therapy, if such services are furnished by 
                (or under the supervision of) such pathologist, 
                radiologist, or radiation oncologist pursuant to a 
                consultation requested by another physician does not 
                constitute a `referral' by a `referring physician'.
            ``(6) Designated health services.--The term `designated 
        health services' means any of the following items or services:
                    ``(A) Clinical laboratory services.
                    ``(B) Physical therapy services.
                    ``(C) Occupational therapy services.
                    ``(D) Radiology or other diagnostic services.
                    ``(E) Radiation therapy services.
                    ``(F) Durable medical equipment.
                    ``(G) Parenteral and enteral nutrients, equipment, 
                and supplies.
                    ``(H) Prosthetics, orthotics, and prosthetic 
                devices.
                    ``(I) Home health services.
                    ``(J) Outpatient prescription drugs.
                    ``(K) Inpatient and outpatient hospital 
                services.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to referrals made on or after January 1, 1995.

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