payment under medicare for services of physicians rendered at a teaching hospital

payment under medicare for services of physicians rendered at a teaching hospital Sec. 227. (a) Section 1861(b) of the Social Security Act is amended by striking out the second sentence and inserting in lieu thereof the following: “Paragraph (4) shall not apply to services provided in a hospital by— “(6) an intern or a resident-in-training under a teaching program approved by the Council on Medical Education of the American Medical Association or, in the case of an osteopathic hospital, approved by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, or. in the case of services in a hospital or osteopathic hospital by an intern or resident-in-training in the field of dentistry, approved by the Council on Dental Education of the American Dental Association; or “(7) a physician where the hospital has a teaching program approved as specified in paragraph (6), unless (A) such inpatient is a private patient (as defined in regulations), or (B) the hospital establishes that during the two-year period ending December 31, 1967, and each year thereafter all inpatients have been 86 Stat. 1405regularly billed by the hospital for services rendered by physicians and reasonable efforts have been made to collect in full from all patients and payment of reasonable charges (including applicable deductibles and coinsurance) has been regularly collected in full or in substantial part from at least 50 percent of all inpatients.” (b) (1) So much of section 1814(a) of such Act as precedes paragraph (1) (as amended by section 226(c) (1) of this Act) is further amended by striking out “subsection (d)” and inserting in lieu thereof “subsections (d) and (g)”. (2) Section 1814 is further amended by adding at the end thereof the following new subsection: “Payment for Services of a Physician Rendered in a Teaching Hospital “(g) Pot purposes of services for which the reasonable cost thereof is determined under section 1861 (v) (1) (D), payment under this part shall be made to such fund as may be designated by the organized medical staff of the hospital in which such services were furnished or, if such services were furnished in such hospital by the faculty of a medical school, to such fund as may be designated by such faculty, but only if— “(1) such hospital has an agreement with the Secretary under section 1866, and “(2) the Secretary has received written assurances that (A) such payment will be used by such fund solely for the improvement of care of hospital patients or for educational or charitable purposes and (B) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged, provision will be made for return of any moneys incorrectly collected).” (c) Section 1861(v) (1) of such Act (as amended by section 223 of this Act) is amended— (1) by inserting “(A)” after “(1)”; (2) by striking out “(A) take” and “(B) provide” in the fourth sentence and inserting in lieu thereof “(i) take” and “(ii) provide”, respectively; (3) by inserting “(B)” immediately preceding “Such regulations in the case of extended care services”; and (4) by adding at the end thereof the following new subparagraphs: “(C) Where a hospital has an arrangement with a medical school under which the faculty of such school provides services at such hospital, an amount not in excess of the reasonable cost of such services to the medical school shall be included in determining the reasonable cost to the hospital of furnishing services— “(i) for which payment may be made under part A, but only if “(I) payment for such services as furnished under such arrangement would be made under part A to the hospital had such services been furnished by the hospital, and “(II) such hospital pays to the medical school at least the reasonable cost of such services to the medical school, or 86 Stat. 1406 “(ii) for which payment may be made under part B, but only if such hospital pays to the medical school at least the reasonable cost of such services to the medical school. “(D) Where (i) physicians furnish services which are either inpatient hospital services (including services in conjunction with the teaching programs of such hospital) by reason of paragraph (7) of subsection (b) or for which entitlement exists by reason of clause (II) of section 1832 (a)(2)(B) (i) and (ii) such hospital (or medical school under arrangement with such hospital) incurs no actual cost in the furnishing of such services, the reasonable cost of such services shall (under regulations of the Secretary) be deemed to be the cost such hospital or medical school would have incurred had it paid a salary to such physicians rendering such services approximately equivalent to the average salary paid to all physicians employed by such hospital (or if such employment does not exist, or is minimal in such hospital, by similar hospitals in a geographic area of sufficient size to assure reasonable inclusion of sufficient physicians in development of such average salary).” (d) (1) Section 1861 (u) of such Act is amended by inserting before the period at the end thereof the following: “, or, for purposes of section 1814(g) and section 1835 (e), a fund”. (2) So much of section 1866(a) (1) of such Act as precedes subparagraph (A) is amended by inserting “(except a fund designated for purposes of section 1814(g) and section 1835(e))” after “provider of services”. (e) (1) Section 1832(a) (2) (B) of such Act is amended to read as follows: “(B) medical and other health services furnished by a provider of services or by others under arrangement with them made by a provider of services, excluding— “(i) physician services except where furnished by— “(I) a resident or intern of a hospital, or “(II) a physician to a patient in a hospital which has a teaching program approved as specified in paragraph (6) of section 1861(b) (including services in conjunction with the teaching programs of such hospital whether or not such patient is an inpatient of such hospital), unless either clause (A) or (B) of paragraph (7) of such section is met, and “(ii) services for which payment may be made pursuant to section 1835(b) (2); and”. (2) (A) So much of section 1835(a) of such Act as precedes paragraph (1) is amended by striking out “subsections (b) and (c),” and inserting in lieu thereof “subsections (b), (c), and (e),”. (B) Section 1835 of such Act is further amended by adding at the end thereof the following new subsection: “(e) For purposes of services (1) which are inpatient hospital services by reason of paragraph (7) of section 1861(b) or for which entitlement exists by reason of clause (II) of section 1832(a) (2)(B) (i), and (2) for which the reasonable cost thereof is determined under section 1861 (v) (1) (D), payment under this part shall be made to such fund as may be designated by the organized medical staff of the hospital in which such services were furnished or, if such services were furnished in such hospital by the faculty of a medical school, to such fund as may be designated by such faculty, but only if— 86 Stat. 1407 “(1) such hospital has an agreement with the Secretary under section 1866, and “(2) the Secretary has received written assurances that such payment will be used by such fund solely for the improvement of care to patients in such hospital or for educational or charitable purposes and (B) the individuals who were furnished such services or any other persons will not be charged for such services (or if charged provision will be made for return for any moneys incorrectly collected).” (3) Section 1842(a) of such Act is amended by inserting after “which involve payments for physicians’ services” the following: “on a reasonable charge basis”. (f) Section 1861 (q) of such Act is amended by striking out the parenthetical phrase “(but not including services described in the last sentence of subsection (b))” and inserting in lieu thereof “(but not including services described in subsection (b)(6))”. (g) The amendments made by this section shall apply with respect to accounting periods beginning after June 30, 1973.