limitations on coverage of costs under medicare

limitations on coverage of costs under medicare Sec. 223. (a) The first sentence of section 1861 (v) (1) of the Social Security Act is amended by inserting immediately before “determined” where it first appears the following: “the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services, and shall be”. (b) The third sentence of section 1861 (v) (1) of such Act is amended by striking out the comma after “services,” where it last appeal’s and inserting in lieu thereof the following: “may provide for the establishment of limits on the direct or indirect overall incurred costs or incurred costs of specific items or services or groups of items or services to be recognized as reasonable based on estimates of the costs necessary in the efficient delivery of needed health services to individuals covered by the insurance programs established under this title,”. (c) The fourth sentence of section 1861 (v) (1) of such Act is amended by inserting after “services” when it first appears the following: “(excluding therefrom any such costs, including standby costs, which are determined in accordance with regulations to be unnecessary in the efficient delivery of services covered by the insurance programs established under this title)”. 86 Stat. 1394 (d) The fourth sentence of section 1861(v) (1) of such Act is further amended by striking out “costs with respect” where it first appears and inserting in lieu thereof the following: “necessary costs of efficiently delivering covered services”. (e) Section 1866(a) (2) (B) of such Act is amended (1) by inserting “(i)” after “(B)”, and (2) by adding at the end thereof the following new clause: “(ii) Where a provider of services customarily furnishes an individual items or services which are more expensive than the items or services determined to be necessary in the efficient delivery of needed health services under this title and which have not been requested by such individual, such provider may (except with respect to emergency services) also charge such individual or other person for such more expensive items or services to the extent that the costs of (or, if less, the customary charges for) such more expensive items or services experienced by such provider in the second fiscal period immediately preceding the fiscal period in which such charges are imposed exceed the cost of such items or services determined to be necessary in the efficient delivery of needed health services, but only if— “(I) the Secretary has provided notice to the public of any charges being imposed on individuals entitled to benefits under this title on account of costs in excess of the costs determined to be necessary in the efficient delivery of needed health services under this title by particular providers of services in the area in which such items or services are furnished, and “(II) the provider of services has identified such charges to such individual or other person, in such manner as the Secretary may prescribe, as charges to meet costs in excess of the cost determined to be necessary in the efficient delivery of needed health services under this title.” (f) Section 1861 (v) of such Act (as amended by section 221(c) (4) of this Act) is further amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph: “(4) If a provider of services furnishes items or services to an individual which are in excess of or more expensive than the items or services determined to be necessary in the efficient delivery of needed health services and charges are imposed for such more expensive items or services under the authority granted in section 1866(a) (2) (B) (ii), the amount of payment with respect to such items or services otherwise due such provider in any fiscal period shall be reduced to the extent that such payment plus such charges exceed the cost actually incurred for such items or services in the fiscal period in which such charges are imposed.” (g) (1) Section 1866(a)(2) of such Act is amended by inserting after subparagraph (C) the following new subparagraph: “(D) Where a provider of services customarily furnishes 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, such provider, notwithstanding the preceding provisions of this paragraph, may not, under the authority of section 1866(a) (2) (B) (ii), charge any individual or other person any amount for such items or services in excess of the amount of the payment which may otherwise be made for such items or services under this title if the admitting physician has a direct or indirect financial interest in such provider.” (2) The last paragraph of section 1866(a) (2) is amended by striking out “clause (iii) of the preceding sentence” and inserting in lieu thereof “subparagraph (C)”. (h) The amendments made by this section shall be effective with respect to accounting periods beginning after December 31, 1972.