42 U.S.C. § 1395xx : US Code - Section 1395XX: Payment of provider-based physicians and payment under certain percentage arrangements

Search 42 U.S.C. § 1395xx : US Code - Section 1395XX: Payment of provider-based physicians and payment under certain percentage arrangements

(a) Criteria; amount of payments
(1) The Secretary shall by regulation determine criteria for
distinguishing those services (including inpatient and outpatient
services) rendered in hospitals or skilled nursing facilities -
(A) which constitute professional medical services, which are
personally rendered for an individual patient by a physician and
which contribute to the diagnosis or treatment of an individual
patient, and which may be reimbursed as physicians' services
under part B, and
(B) which constitute professional services which are rendered
for the general benefit to patients in a hospital or skilled
nursing facility and which may be reimbursed only on a reasonable
cost basis or on the bases described in section 1395ww of this
title.
(2)(A) For purposes of cost reimbursement, the Secretary shall
recognize as a reasonable cost of a hospital or skilled nursing
facility only that portion of the costs attributable to services
rendered by a physician in such hospital or facility which are
services described in paragraph (1)(B), apportioned on the basis of
the amount of time actually spent by such physician rendering such
services.
(B) In determining the amount of the payments which may be made
with respect to services described in paragraph (1)(B), after
apportioning costs as required by subparagraph (A), the Secretary
may not recognize as reasonable (in the efficient delivery of
health services) such portion of the provider's costs for such
services to the extent that such costs exceed the reasonable
compensation equivalent for such services. The reasonable
compensation equivalent for any service shall be established by the
Secretary in regulations.
(C) The Secretary may, upon a showing by a hospital or facility
that it is unable to recruit or maintain an adequate number of
physicians for the hospital or facility on account of the
reimbursement limits established under this subsection, grant
exceptions to such reimbursement limits as may be necessary to
allow such provider to provide a compensation level sufficient to
provide adequate physician services in such hospital or facility.
(b) Prohibition of recognition of payments under certain percentage
agreements
(1) Except as provided in paragraph (2), in the case of a
provider of services which is paid under this subchapter on a
reasonable cost basis, or other basis related to costs that are
reasonable, and which has entered into a contract for the purpose
of having services furnished for or on behalf of it, the Secretary
may not include any cost incurred by the provider under the
contract if the amount payable under the contract by the provider
for that cost is determined on the basis of a percentage (or other
proportion) of the provider's charges, revenues, or claim for
reimbursement.
(2) Paragraph (1) shall not apply -
(A) to services furnished by a physician and described in
subsection (a)(1)(B) of this section and covered by regulations
in effect under subsection (a) of this section, and
(B) under regulations established by the Secretary, where the
amount involved under the percentage contract is reasonable and
the contract -
(i) is a customary commercial business practice, or
(ii) provides incentives for the efficient and economical
operation of the provider of services.