REDUCTION IN PAYMENTS FOR CERTAIN PROCEDURES.

SEC. 6104. REDUCTION IN PAYMENTS FOR CERTAIN PROCEDURES. (a) In General.—Section 1842(b) of the Social Security Act (42 U.S.C. 1395u(b)) is amended by adding at the end the following new paragraph: “(14)(A) In determining the reasonable charge for a physicians’ service specified in subparagraph (C)(i) and furnished during the 9-month period beginning on April 1, 1990, the prevailing charge for such service shall be the prevailing charge otherwise recognized for such service for 1989 reduced by 15 percent or, if less, ⅓ of the percent (if any) by which the prevailing charge otherwise applied in the locality in 1989 exceeds the locally-adjusted reduced prevailing amount (as determined under subparagraph (B)(i)) for the service. 103 STAT. 2209 “(B) For purposes of this paragraph: “(i) The ‘locally-adjusted reduced prevailing amount’ for a locality for a physicians’ service is equal to the product of— “(I) the reduced national weighted average prevailing charge for the service (specified under clause (ii)), and “(II) the adjustment factor (specified under clause (iii)) for the locality. “(ii) The ‘reduced national weighted average prevailing charge’ for a physicians’ service is equal to the national weighted average prevailing charge for the service (specified in subparagraph (C)(ii)) reduced by the percentage change (specified in subparagraph (C)(iii)) for the service. “(iii) The ‘adjustment factor’, for a physicians’ service for a locality, is the sum of— “(I) the practice expense ratio for the service (specified in Table # 1 in the Joint Explanatory Statement referred to in subparagraph (C)(i)), multiplied by the geographic practice cost index value (specified in subparagraph (C)(iv)) for the locality, and “(II) 1 minus the practice expense ratio. “(C) For purposes of this paragraph: “(i) The physicians’ services specified in this clause are the physicians’ services specified in Table #2 in the Joint Explanatory Statement of the Committee of Conference submitted with the Conference Report to accompany H.R. 3299 (the ‘Omnibus Budget Reconciliation Act of 1989’), 101st Congress, which specification is of physicians’ services that have been identified as overvalued by at least 10 percent based on a comparison of payments for such services under a resource-based relative value scale and of the national average prevailing charges under this part. “(ii) The ‘national weighted average prevailing charge’ specified in this clause, for a physicians’ service specified in clause (i), is the national weighted average prevailing charge for the service in 1989 as determined by the Secretary using the best data available. “(iii) The ‘percent change’ specified in this clause, for a physicians’ service specified in clause (i), is the percent change specified for the service in Table #2 in the Joint Explanatory Statement referred to in clause (i). “(iv) The geographic practice cost index value specified in this clause for a locality is such value specified for the locality in Table #3 in the Joint Explanatory Statement referred to in clause (i). “(D) In the case of a reduction in the prevailing charge for a physicians’ service under subparagraph (A), if a nonparticipating physician furnishes the service to an individual entitled to benefits under this part, after the effective date of such reduction, the physician’s actual charge is subject to a limit under subsection (j)(1)(D)”. (b) Special Limits on Actual Charges.—Section 1842(j)(1)(D) of such Act is amended— (1) in clause (ii)(II), by inserting “or (b)(14)(A)” after “(b)(10)(A)”, and (2) in clause (iii)(II), by striking “or (b)(11)(C)(i)” and inserting “(b)(11)(C)(i), or (b)(14)(A)”.