TITLE VI--TRANSPARENCY AND PROGRAM INTEGRITY
Subtitle A--Physician Ownership and Other Transparency
SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS. (a) In General- Section 1877 of the Social Security Act (42 U.S.C. 1395nn) is amended-- (1) in subsection (d)(2)-- (A) in subparagraph (A), by striking `and' at the end; (B) in subparagraph (B), by striking the period at the end and inserting `; and'; and (C) by adding at the end the following new subparagraph: (C) in the case where the entity is a hospital, the hospital meets the requirements of paragraph (3)(D).'; (2) in subsection (d)(3)-- (A) in subparagraph (B), by striking `and' at the end; (B) in subparagraph (C), by striking the period at the end and inserting `; and'; and (C) by adding at the end the following new subparagraph: (D) the hospital meets the requirements described in subsection (i)(1) not later than 18 months after the date of the enactment of this subparagraph.'; and (3) by adding at the end the following new subsection: (i) Requirements for Hospitals To Qualify for Rural Provider and Hospital Exception to Ownership or Investment Prohibition- (1) REQUIREMENTS DESCRIBED- For purposes of subsection (d)(3)(D), the requirements described in this paragraph for a hospital are as follows: (A) PROVIDER AGREEMENT- The hospital had-- (i) physician ownership or investment on February 1, 2010; and (ii) a provider agreement under section 1866 in effect on such date. (B) LIMITATION ON EXPANSION OF FACILITY CAPACITY- Except as provided in paragraph (3), the number of operating rooms, procedure rooms, and beds for which the hospital is licensed at any time on or after the date of the enactment of this subsection is no greater than the number of operating rooms, procedure rooms, and beds for which the hospital is licensed as of such date. (C) PREVENTING CONFLICTS OF INTEREST- (i) The hospital submits to the Secretary an annual report containing a detailed description of-- (I) the identity of each physician owner or investor and any other owners or investors of the hospital; and (II) the nature and extent of all ownership and investment interests in the hospital. (ii) The hospital has procedures in place to require that any referring physician owner or investor discloses to the patient being referred, by a time that permits the patient to make a meaningful decision regarding the receipt of care, as determined by the Secretary-- (I) the ownership or investment interest, as applicable, of such referring physician in the hospital; and (II) if applicable, any such ownership or investment interest of the treating physician. (iii) The hospital does not condition any physician ownership or investment interests either directly or indirectly on the physician owner or investor making or influencing referrals to the hospital or otherwise generating business for the hospital. (iv) The hospital discloses the fact that the hospital is partially owned or invested in by physicians-- (I) on any public website for the hospital; and (II) in any public advertising for the hospital. (D) ENSURING BONA FIDE INVESTMENT- (i) The percentage of the total value of the ownership or investment interests held in the hospital, or in an entity whose assets include the hospital, by physician owners or investors in the aggregate does not exceed such percentage as of the date of enactment of this subsection. (ii) Any ownership or investment interests that the hospital offers to a physician owner or investor are not offered on more favorable terms than the terms offered to a person who is not a physician owner or investor. (iii) The hospital (or any owner or investor in the hospital) does not directly or indirectly provide loans or financing for any investment in the hospital by a physician owner or investor. (iv) The hospital (or any owner or investor in the hospital) does not directly or indirectly guarantee a loan, make a payment toward a loan, or otherwise subsidize a loan, for any individual physician owner or investor or group of physician owners or investors that is related to acquiring any ownership or investment interest in the hospital. (v) Ownership or investment returns are distributed to each owner or investor in the hospital in an amount that is directly proportional to the ownership or investment interest of such owner or investor in the hospital. (vi) Physician owners and investors do not receive, directly or indirectly, any guaranteed receipt of or right to purchase other business interests related to the hospital, including the purchase or lease of any property under the control of other owners or investors in the hospital or located near the premises of the hospital.