SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF 
              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Rural 
Health Care Preservation Act of 2003''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
                            contents.
Sec. 2. Five-year continuation of medicare managed care cost contracts.
Sec. 3. Temporary protection for sole community hospitals under 
                            outpatient prospective payment schedule.
Sec. 4. Improvements to the critical access hospital program.
Sec. 5. Extension of temporary increase for home health services 
                            furnished in a rural area.
Sec. 6. Increase in payments for hospice care furnished in frontier 
                            areas.
Sec. 7. Treatment of eligibility for hospice care.

SEC. 2. FIVE-YEAR CONTINUATION OF MEDICARE MANAGED CARE COST CONTRACTS.

    Section 1876(h)(5)(C) (42 U.S.C. 1395mm(h)(5)(C)) is amended by 
striking ``2004'' and inserting ``2009''.

SEC. 3. TEMPORARY PROTECTION FOR SOLE COMMUNITY HOSPITALS UNDER 
              OUTPATIENT PROSPECTIVE PAYMENT SCHEDULE.

    Section 1833(t)(7)(D) (42 U.S.C. 1395l(t)(7)(D)) is amended by 
adding at the end the following new clause:
                            ``(iii) Temporary treatment for sole 
                        community hospitals.--In the case of a hospital 
                        described in section 1886(d)(5)(C)(iii) that 
                        furnishes covered OPD services for which the 
                        PPS amount is less than the pre-BBA amount--
                                    ``(I) in the case of such services 
                                furnished during 2004 or 2005, the 
                                amount of payment under this subsection 
                                shall be increased by the amount of 
                                such difference;
                                    ``(II) in the case of such services 
                                furnished during 2006 or 2007, the 
                                amount of payment under this subsection 
                                shall be increased by 95 percent of the 
                                amount of such difference; and
                                    ``(III) in the case of such 
                                services furnished during 2008 or 2009, 
                                the amount of payment under this 
                                subsection shall be increased by 90 
                                percent of the amount of such 
                                difference.''.

SEC. 4. IMPROVEMENTS TO CRITICAL ACCESS HOSPITAL PROGRAM.

    (a) Reinstatement of Periodic Interim Payment (PIP).--Section 
1815(e)(2) (42 U.S.C. 1395g(e)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by adding ``and'' at the end of subparagraph (D); and
            (3) by inserting after subparagraph (D) the following new 
        subparagraph:
            ``(E) inpatient critical access hospital services;''.
    (b) Condition for Application of Special Physician Payment 
Adjustment.--Section 1834(g)(2) (42 U.S.C. 1395m(g)(2)) is amended by 
adding after and below subparagraph (B) the following:
        ``The Secretary may not require, as a condition for applying 
        subparagraph (B) with respect to a critical access hospital, 
        that each physician providing professional services in the 
        hospital must assign billing rights with respect to such 
        services, except that such subparagraph shall not apply to 
        those physicians who have not assigned such billing rights.''.
    (c) Flexibility in Bed Limitation for Hospitals.--Section 1820 (42 
U.S.C. 1395i-4) is amended--
            (1) in subsection (c)(2)(B)(iii), by inserting ``subject to 
        paragraph (3)'' after ``(iii) provides'';
            (2) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(3) Increase in maximum number of beds for hospitals with 
        strong seasonal census fluctuations.--
                    ``(A) In general.--Subject to subparagraph (C), in 
                the case of a hospital that demonstrates that it meets 
                the standards established under subparagraph (B) and 
                has not made the election described in subsection 
                (f)(2)(A), the bed limitations otherwise applicable 
                under paragraph (2)(B)(iii) and subsection (f) shall be 
                increased by 5 beds.
                    ``(B) Standards.--The Secretary shall specify 
                standards for determining whether a critical access 
                hospital has sufficiently strong seasonal variations in 
                patient admissions to justify the increase in bed 
                limitation provided under subparagraph (A).''; and
            (3) in subsection (f)--
                    (A) by inserting ``(1)'' after ``(f)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2)(A) A hospital may elect to treat the reference in paragraph 
(1) to `15 beds' as a reference to `25 beds', but only if no more than 
10 beds in the hospital are at any time used for non-acute care 
services. A hospital that makes such an election is not eligible for 
the increase provided under subsection (c)(3)(A).
    ``(B) The limitations in numbers of beds under the first sentence 
of paragraph (1) are subject to adjustment under subsection (c)(3).''.
    (d) 5-Year Extension of the Authorization for Appropriations for 
Grant Program.--Section 1820(j) (42 U.S.C. 1395i-4(j)) is amended by 
striking ``through 2002'' and inserting ``through 2007''.
    (e) Prohibition of Retroactive Recoupment.--The Secretary shall not 
recoup (or otherwise seek to recover) overpayments made for outpatient 
critical access hospital services under part B of title XVIII of the 
Social Security Act, for services furnished in cost reporting periods 
that began before October 1, 2002, insofar as such overpayments are 
attributable to payment being based on 80 percent of reasonable costs 
(instead of 100 percent of reasonable costs minus 20 percent of 
charges).
    (f) Effective Dates.--
            (1) Reinstatement of pip.--The amendments made by 
        subsection (a) shall apply to payments made on or after January 
        1, 2004.
            (2) Physician payment adjustment condition.--The amendment 
        made by subsection (b) shall be effective as if included in the 
        enactment of section 403(d) of the Medicare, Medicaid, and 
        SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-
        371).

SEC. 5. EXTENSION OF TEMPORARY INCREASE FOR HOME HEALTH SERVICES 
              FURNISHED IN A RURAL AREA.

    (a) In General.--Section 508(a) of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 (114 Stat. 2763A-
533), as enacted into law by section 1(a)(6) of Public Law 106-554, is 
amended--
            (1) by striking ``24-Month Increase Beginning April 1, 
        2001'' and inserting ``In General''; and
            (2) by striking ``April 1, 2003'' and inserting ``January 
        1, 2006''.
    (b) Conforming Amendment.--Section 547(c)(2) of such Act (114 Stat. 
2763A-553) is amended by striking ``the period beginning on April 1, 
2001, and ending on September 30, 2002,'' and inserting ``a period 
under such section''.

SEC. 6. INCREASE IN PAYMENTS FOR HOSPICE CARE FURNISHED IN FRONTIER 
              AREAS.

    (a) 10 Percent Increase in Payment for Hospice Care Furnished in a 
Frontier Area.--Section 1814(i)(1) (42 U.S.C. 1395f(i)(1)) is amended 
by adding at the end the following new subparagraph:
    ``(D) With respect to hospice care furnished in a frontier area on 
or after January 1, 2004, and before January 1, 2009, the payment rates 
otherwise established for such care shall be increased by 10 percent. 
For purposes of this subparagraph, the term `frontier area' means a 
county in which the population density is less than 7 persons per 
square mile.''.
    (b) Report on Costs.--Not later than January 1, 2008, the 
Comptroller General of the United States shall submit to Congress a 
report on the costs of furnishing hospice care in frontier areas. Such 
report shall include recommendations regarding the appropriateness of 
extending, and modifying, the payment increase provided under the 
amendment made by subsection (a).

SEC. 7. TREATMENT OF ELIGIBILITY FOR HOSPICE CARE.

    (a) Deemed Eligibility Based on Death in Fact.--
            (1) In general.--Section 1814(i) of the Social Security Act 
        is amended by adding at the end the following new paragraph:
    ``(4) For purposes of section 1814(a)(7)(A), the Secretary and a 
fiscal intermediary shall not take any action to deny payment for 
hospice care for an individual on the basis that the individual is not 
terminally ill if the individual dies within 6 months of the date the 
individual is initially admitted into the hospice program for the 
receipt of hospice care.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on January 1, 2004.
    (b) CMS Report.--
            (1) In general.--The Administrator of the Centers for 
        Medicare & Medicaid Services shall evaluate the standards used 
        by fiscal intermediaries in denying physician certifications 
        under section 1814(a)(7) of the Social Security Act (42 U.S.C. 
        1395f(a)(7)) that an individual is terminally ill (and thereby 
        making such individuals ineligible to elect the hospice care 
        alternative) and the impact of such decisions on length of 
        stay. Such evaluation shall review the impact of the amendments 
        made by section 322(a) of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (114 Stat. 
        2763A-501), as enacted into law by section 1(a)(6) of Public 
        Law 106-554 and the results of the study conducted under 
        section 322(b) of such Act of 2000.
            (2) Report.--Not later than 6 months after the date of the 
        enactment of this Act, the Administrator shall submit to 
        Congress a report on the evaluation under paragraph (1).
Medicare Rural Health Care Preservation Act of 2003 - Amends title XVIII (Medicare) of the Social Security Act to provide for: (1) a five-year continuation of Medicare managed care cost contracts; (2) temporary payment increases for sole community hospitals under the prospective payment system for hospital outpatient department services; (3) the reinstatement of periodic interim payment (PIP) with respect to the critical access hospital program, among other changes with respect to such program; (4) an extension of the temporary increase for home health services furnished in a rural area; (5) an increase in payments for hospice care furnished in frontier areas; and (6) deemed eligibility based on death in fact with respect to treatment of eligibility for hospice care.
To amend title XVIII of the Social Security Act to protect and preserve access of Medicare beneficiaries to health care in rural areas.