§1395xx Payment of provider-based physicians and payment under certain percentage arrangements

Summary

Requires the Secretary to write rules that say which doctor services provided in hospitals or skilled nursing facilities (including inpatient and outpatient care) are billed as individual physician services under Part B, and which are treated as facility services paid as part of the hospital’s costs. For cost payments, only the portion of facility costs that comes from those general-benefit physician services counts, and that share is based on the time the physician spends. The Secretary can limit recognized costs to what counts as reasonable pay for the work and must set that reasonable pay rule. If a hospital or facility shows it cannot hire enough doctors because of these payment limits, the Secretary can allow exceptions so it can pay more to recruit or keep physicians. When a hospital or facility that is paid on a cost-related basis hires services by contract, the Secretary will not count contract costs if the provider pays the contractor based on a percentage of the provider’s charges, revenues, or claims. That restriction does not apply to the general-benefit physician services covered by the rules above. The Secretary may also allow percentage-based contracts if the amount is reasonable and the contract is either a common commercial practice or gives incentives for efficient, economical operation.