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SEC. 216. ADDITIONAL EXCEPTION TO ANTI-KICKBACK PENALTIES FOR RISK-SHARING ARRANGEMENTS.

                                                                                                                                                                                                                                                                                                                        

 Title[ Title II\Subtitle B                                                           Contents

                                                                                                                                                                                                                                                                                                                       

    (a) In General.--Section 1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)) is

amended--

            (1) by striking ``and'' at the end of subparagraph (D);

            (2) by striking the period at the end of subparagraph (E)

        and inserting ``; and''; and

            (3) by adding at the end the following new subparagraph:

            ``(F) any remuneration between an organization and an

        individual or entity providing items or services, or a

        combination thereof, pursuant to a written agreement between the

        organization and the individual or entity if the organization is

        an eligible organization under section 1876 or if the written

        agreement, through a risk-sharing arrangement, places the

        individual or entity at substantial financial risk for the cost

        or utilization of the items or services, or a combination

        thereof, which the individual or entity is obligated to

        provide.''.

    (b) Negotiated <<NOTE: 42 USC 1320a-7b note.>>  Rulemaking for Risk-

Sharing Exception.--

            (1) Establishment.--

                    (A) In general.--The Secretary of Health and Human

                Services (in this subsection referred to as the

                ``Secretary'') shall establish, on an expedited basis

                and using a negotiated rulemaking process under

                subchapter 3 of chapter 5 of title 5, United States

                Code, standards relating to the exception for risk-

                sharing arrangements to the anti-kickback penalties

                described in section 1128B(b)(3)(F) of the Social

                Security Act, as added by subsection (a).

                    (B) Factors to consider.--In establishing standards

                relating to the exception for risk-sharing arrangements

                to the anti-kickback penalties under subparagraph (A),

                the Secretary--

                          (i) shall consult with the Attorney General

                      and representatives of the hospital, physician,

                      other health practitioner, and health plan

                      communities, and other interested parties; and

                          (ii) shall take into account--

                                    (I) the level of risk appropriate to

                                the size and type of arrangement;

                                    (II) the frequency of assessment and

                                distribution of incentives;

                                    (III) the level of capital

                                contribution; and

                                    (IV) the extent to which the risk-

                                sharing arrangement provides incentives

                                to control the cost and quality of

                                health care services.

            (2) Publication of notice.--In carrying out the rulemaking

        process under this subsection, the Secretary shall publish the

        notice provided for under section 564(a) of title 5, United

        States Code, by not later than 45 days after the date of the

        enactment of this Act.

            (3) Target date for publication of rule.--As part of the

        notice under paragraph (2), and for purposes of this subsection,

        the ``target date for publication'' (referred to in section

        564(a)(5) of such title) shall be January 1, 1997.

            (4) Abbreviated period for submission of comments.--In

        applying section 564(c) of such title under this subsection,

        ``15 days'' shall be substituted for ``30 days''.

            (5) Appointment of negotiated rulemaking committee and

        facilitator.--The Secretary shall provide for--

                    (A) the appointment of a negotiated rulemaking

                committee under section 565(a) of such title by not

                later than 30 days after the end of the comment period

                provided for under section 564(c) of such title (as

                shortened under paragraph (4)), and

                    (B) the nomination of a facilitator under section

                566(c) of such title by not later than 10 days after the

                date of appointment of the committee.

            (6) Preliminary committee report.--The negotiated rulemaking

        committee appointed under paragraph (5) shall report to the

        Secretary, by not later than October 1, 1996, regarding the

        committee's progress on achieving a consensus with regard to the

        rulemaking proceeding and whether such consensus is likely to

        occur before one month before the target date for publication of

        the rule. If the committee reports that the committee has failed

        to make significant progress toward such consensus or is

        unlikely to reach such consensus by the target date, the

        Secretary may terminate such process and provide for the

        publication of a rule under this subsection through such other

        methods as the Secretary may provide.

            (7) Final committee report.--If the committee is not

        terminated under paragraph (6), the rulemaking committee shall

        submit a report containing a proposed rule by not later than one

        month before the target publication date.

            (8) Interim, final <<NOTE: Federal Register, publication.>>  

        effect.--The Secretary shall publish a rule under this

        subsection in the Federal Register by not later than the target

        publication date. Such rule shall be effective and final

        immediately on an interim basis, but is subject to change and

        revision after public notice and opportunity for a period (of

        not less than 60 days) for public comment. In connection with

        such rule, the Secretary shall specify the process for the

        timely review and approval of applications of entities to be

        certified as provider-sponsored organizations pursuant to such

        rules and consistent with this subsection.

            (9) Publication of rule after public comment.--The Secretary

        shall provide for consideration of such comments and

        republication of such rule by not later than 1 year after the

        target publication date.

    (c) Effective <<NOTE: 42 USC 1320a-7b note.>>  Date.--The amendments

made by subsection (a) shall apply to written agreements entered into on

or after January 1, 1997, without regard to whether regulations have

been issued to implement such amendments.

 

                                                                                                                                                                                                                                                                                                                                                                        

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