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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1675 Introduced in House (IH)]

108th CONGRESS
  1st Session
                                H.R. 1675

To amend title XVIII of the Social Security Act to protect and preserve 
 access of Medicare beneficiaries to health care provided by hospitals 
                in rural areas, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 8, 2003

 Mr. Moran of Kansas (for himself, Mr. Pomeroy, Mr. Walden of Oregon, 
 Mr. Stenholm, Mr. Peterson of Pennsylvania, Mr. Berry, Mr. Kind, Mr. 
  McHugh, Mr. Sandlin, Mr. Evans, Mr. Davis of Alabama, and Mr. Case) 
 introduced the following bill; which was referred to the Committee on 
    Ways and Means, and in addition to the Committee on Energy and 
Commerce, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
To amend title XVIII of the Social Security Act to protect and preserve 
 access of Medicare beneficiaries to health care provided by hospitals 
                in rural areas, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

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

    (a) Short Title.--This Act may be cited as the ``Health Care Access 
and Rural Equity 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) References to BIPA.--In this Act, the term ``BIPA'' means the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000, as enacted into law by section 1(a)(6) of Public Law 106-554 
(114 Stat. 2763).
    (d) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
            TITLE I--MEDICARE RURAL HEALTH CARE IMPROVEMENTS

Sec. 101. Equalizing urban and rural standardized payment amounts under 
                            the Medicare inpatient hospital prospective 
                            payment system.
Sec. 102. Fairness in the medicare disproportionate share hospital 
                            (DSH) adjustment for rural hospitals.
Sec. 103. Adjustment to the medicare inpatient hospital PPS wage index 
                            to revise the labor-related share of such 
                            index.
Sec. 104. One-year extension of hold harmless provisions for small 
                            rural hospitals under medicare prospective 
                            payment system for hospital outpatient 
                            department services.
Sec. 105. One-year hold harmless treatment of certain sole community 
                            hospitals to limit decline in payment under 
                            the OPD PPS.
Sec. 106. Critical access hospital (CAH) improvements.
Sec. 107. Permanent treatment of certain physician pathology services 
                            under medicare.
                 TITLE II--OTHER RURAL HOSPITAL REFORMS

Sec. 201. Capital infrastructure revolving loan program.
Sec. 202. Five-year extension of the authorization for appropriations 
                            for certain medicare rural grants.

            TITLE I--MEDICARE RURAL HEALTH CARE IMPROVEMENTS

SEC. 101. EQUALIZING URBAN AND RURAL STANDARDIZED PAYMENT AMOUNTS UNDER 
              THE MEDICARE INPATIENT HOSPITAL PROSPECTIVE PAYMENT 
              SYSTEM.

    (a) In General.--Section 1886(d)(3)(A)(iv) (42 U.S.C. 
1395ww(d)(3)(A)(iv)) is amended--
            (1) by striking ``(iv) For discharges'' and inserting 
        ``(iv)(I) Subject to subclause (II), for discharges''; and
            (2) by adding at the end the following new subclause:
            ``(II) For discharges occurring in a fiscal year beginning 
        with fiscal year 2004, the Secretary shall compute a 
        standardized amount for hospitals located in any area within 
        the United States and within each region equal to the 
        standardized amount computed for the previous fiscal year under 
        this subparagraph for hospitals located in a large urban area 
        (or, beginning with fiscal year 2005, for hospitals located in 
        any area) increased by the applicable percentage increase under 
        subsection (b)(3)(B)(i) for the fiscal year involved.''.
    (b) Conforming Amendments.--
            (1) Computing drg-specific rates.--Section 1886(d)(3)(D) 
        (42 U.S.C. 1395ww(d)(3)(D)) is amended--
                    (A) in the heading, by striking ``in different 
                areas'';
                    (B) in the matter preceding clause (i), by striking 
                ``, each of'';
                    (C) in clause (i)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``for fiscal years before fiscal 
                        year 2004,'' before ``for hospitals''; and
                            (ii) in subclause (II), by striking ``and'' 
                        after the semicolon at the end;
                    (D) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``for fiscal years before fiscal 
                        year 2004,'' before ``for hospitals''; and
                            (ii) in subclause (II), by striking the 
                        period at the end and inserting ``; and''; and
                    (E) by adding at the end the following new clause:
                    ``(iii) for a fiscal year beginning after fiscal 
                year 2003, for hospitals located in all areas, to the 
                product of--
                            ``(I) the applicable standardized amount 
                        (computed under subparagraph (A)), reduced 
                        under subparagraph (B), and adjusted or reduced 
                        under subparagraph (C) for the fiscal year; and
                            ``(II) the weighting factor (determined 
                        under paragraph (4)(B)) for that diagnosis-
                        related group.''.
            (2) Technical conforming sunset.--Section 1886(d)(3) (42 
        U.S.C. 1395ww(d)(3)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, for fiscal years before fiscal year 
                1997,'' before ``a regional adjusted DRG prospective 
                payment rate''; and
                    (B) in subparagraph (D), in the matter preceding 
                clause (i), by inserting ``, for fiscal years before 
                fiscal year 1997,'' before ``a regional DRG prospective 
                payment rate for each region,''.

SEC. 102. FAIRNESS IN THE MEDICARE DISPROPORTIONATE SHARE HOSPITAL 
              (DSH) ADJUSTMENT FOR RURAL HOSPITALS.

    (a) Equalizing DSH Payment Amounts.--
            (1) In general.--Section 1886(d)(5)(F)(vii) (42 U.S.C. 
        1395ww(d)(5)(F)(vii)) is amended by inserting ``, and, after 
        October 1, 2003, for any other hospital described in clause 
        (iv),'' after ``clause (iv)(I)'' in the matter preceding 
        subclause (I).
            (2) Conforming amendments.--Section 1886(d)(5)(F) (42 
        U.S.C. 1395ww(d)(5)(F)) is amended--
                    (A) in clause (iv)--
                            (i) in subclause (II)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xiii)'';
                            (ii) in subclause (III)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xii)'';
                            (iii) in subclause (IV)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (x) or 
                                (xi)'';
                            (iv) in subclause (V)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xi)''; 
                                and
                            (v) in subclause (VI)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (x)'';
                    (B) in clause (viii), by striking ``The formula'' 
                and inserting ``For discharges occurring before October 
                1, 2003, the formula''; and
                    (C) in each of clauses (x), (xi), (xii), and 
                (xiii), by striking ``For purposes'' and inserting 
                ``With respect to discharges occurring before October 
                1, 2003, for purposes''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to discharges occurring on or after October 1, 2003.

SEC. 103. ADJUSTMENT TO THE MEDICARE INPATIENT HOSPITAL PPS WAGE INDEX 
              TO REVISE THE LABOR-RELATED SHARE OF SUCH INDEX.

    (a) In General.--Section 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) 
is amended--
            (1) by striking ``wage levels.--The Secretary'' and 
        inserting ``wage levels.--
                    ``(i) In general.--Except as provided in clause 
                (ii), the Secretary''; and
            (2) by adding at the end the following new clause:
                    ``(ii) Alternative proportion to be adjusted 
                beginning in fiscal year 2004.--
                            ``(I) In general.--Except as provided in 
                        subclause (II), for discharges occurring on or 
                        after October 1, 2003, the Secretary shall 
                        substitute `62 percent' for the proportion 
                        described in the first sentence of clause (i).
                            ``(II) Hold harmless for certain 
                        hospitals.--If the application of subclause (I) 
                        would result in lower payments to a hospital 
                        than would otherwise be made, then this 
                        subparagraph shall be applied as if this clause 
                        had not been enacted.''.
    (b) Waiving Budget Neutrality.--Section 1886(d)(3)(E) (42 U.S.C. 
1395ww(d)(3)(E)), as amended by subsection (a), is amended by adding at 
the end of clause (i) the following new sentence: ``The Secretary shall 
apply the previous sentence for any period as if the amendments made by 
section 103(a) of the Health Care Access and Rural Equity Act of 2003 
had not been enacted.''.

SEC. 104. ONE-YEAR EXTENSION OF HOLD HARMLESS PROVISIONS FOR SMALL 
              RURAL HOSPITALS UNDER MEDICARE PROSPECTIVE PAYMENT SYSTEM 
              FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

    Section 1833(t)(7)(D)(i) (42 U.S.C. 1395l(t)(7)(D)(i)) is amended 
by striking ``2004'' and inserting ``2005''.

SEC. 105. ONE-YEAR HOLD HARMLESS TREATMENT OF CERTAIN SOLE COMMUNITY 
              HOSPITALS TO LIMIT DECLINE IN PAYMENT UNDER THE OPD PPS.

    (a) Hold Harmless Provision.--Section 1833(t)(7)(D)(i) (42 U.S.C. 
1395l(t)(7)(D)(i)), as amended by section 104, is further amended--
            (1) in the heading, by striking ``small'' and inserting 
        ``certain''; and
            (2) by inserting ``or a sole community hospital (as defined 
        in section 1886(d)(5)(D)(iii)) located in a rural area'' after 
        ``100 beds''.
    (b) Effective Date.--The amendment made by subsection (a)(2) shall 
apply with respect to payment for OPD services furnished on and after 
January 1, 2004.

SEC. 106. CRITICAL ACCESS HOSPITAL (CAH) IMPROVEMENTS.

    (a) Elimination of the Isolation Test for Cost-Based CAH Ambulance 
Services.--
            (1) In general.--Section 1834(l)(8) (42 U.S.C. 1395m(l)), 
        as added by section 205(a) of BIPA (114 Stat. 2763A-482), is 
        amended by striking the comma at the end of subparagraph (B) 
        and all that follows and inserting a period.
            (2) Technical correction.--Section 1834(l) (42 U.S.C. 
        1395m(l)) is amended by redesignating paragraph (8), as added 
        by section 221(a) of BIPA (114 Stat. 2763A-486), as paragraph 
        (9).
    (b) Coverage of Costs for Certain Emergency Room On-Call 
Providers.--
            (1) In general.--Section 1834(g)(5) (42 U.S.C. 1395m(g)(5)) 
        is amended--
                    (A) in the heading--
                            (i) by inserting ``certain'' before 
                        ``emergency''; and
                            (ii) by striking ``physicians'' and 
                        inserting ``providers'';
                    (B) by striking ``emergency room physicians who are 
                on-call (as defined by the Secretary)'' and inserting 
                ``physicians, physician assistants, nurse 
                practitioners, and clinical nurse specialists who are 
                on-call (as defined by the Secretary) to provide 
                emergency services''; and
                    (C) by striking ``physicians' services'' and 
                inserting ``services covered under this title''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to costs incurred for services 
        provided on or after January 1, 2004.
    (c) Authorization of Periodic Interim Payment (PIP).--
            (1) In general.--Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) 
        is amended--
                    (A) in subparagraph (C), by striking ``and'' after 
                the semicolon at the end;
                    (B) in subparagraph (D), by adding ``and'' after 
                the semicolon at the end; and
                    (C) by inserting after subparagraph (D) the 
                following new subparagraph:
            ``(E) inpatient critical access hospital services,''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to payments for inpatient critical 
        access hospital services furnished on or after January 1, 2004.
    (d) Exclusion of New CAHs From PPS Hospital Wage Index 
Calculation.--Section 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)), as 
amended by section 103(a), is further amended by inserting after the 
first sentence of clause (i) the following new sentence: ``In 
calculating the hospital wage levels under the preceding sentence 
applicable with respect to cost reporting periods beginning on or after 
January 1, 2004, the Secretary shall exclude the wage levels of any 
hospital that became a critical access hospital prior to the cost 
reporting period for which such hospital wage levels are calculated.''.

SEC. 107. PERMANENT TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES 
              UNDER MEDICARE.

    (a) In General.--Section 1848(i) (42 U.S.C. 1395w-4(i)) is amended 
by adding at the end the following new paragraph:
            ``(4) Treatment of certain physician pathology services.--
                    ``(A) In general.--With respect to services 
                furnished on or after January 1, 2001, if an 
                independent laboratory furnishes the technical 
                component of a physician pathology service to a fee-
                for-service medicare beneficiary who is an inpatient or 
                outpatient of a covered hospital, the Secretary shall 
                treat such component as a service for which payment 
                shall be made to the laboratory under this section and 
                not as an inpatient hospital service for which payment 
                is made to the hospital under section 1886(d) or as a 
                hospital outpatient service for which payment is made 
                to the hospital under section 1833(t).
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Covered hospital.--
                                    ``(I) In general.--The term 
                                `covered hospital' means, with respect 
                                to an inpatient or outpatient, a 
                                hospital that had an arrangement with 
                                an independent laboratory that was in 
                                effect as of July 22, 1999, under which 
                                a laboratory furnished the technical 
                                component of physician pathology 
                                services to fee-for-service medicare 
                                beneficiaries who were hospital 
                                inpatients or outpatients, 
                                respectively, and submitted claims for 
                                payment for such component to a carrier 
                                with a contract under section 1842 and 
                                not to the hospital.
                                    ``(II) Change in ownership does not 
                                affect determination.--A change in 
                                ownership with respect to a hospital on 
                                or after the date referred to in 
                                subclause (I) shall not affect the 
                                determination of whether such hospital 
                                is a covered hospital for purposes of 
                                such subclause.
                            ``(ii) Fee-for-service medicare 
                        beneficiary.--The term `fee-for-service 
                        medicare beneficiary' means an individual who 
                        is entitled to (or enrolled for) benefits under 
                        part A, or enrolled under this part, or both, 
                        but who is not enrolled in any of the 
                        following:
                                    ``(I) A Medicare+Choice plan under 
                                part C.
                                    ``(II) A plan offered by an 
                                eligible organization under section 
                                1876.
                                    ``(III) A program of all-inclusive 
                                care for the elderly (PACE) under 
                                section 1894.
                                    ``(IV) A social health maintenance 
                                organization (SHMO) demonstration 
                                project established under section 
                                4018(b) of the Omnibus Budget 
                                Reconciliation Act of 1987 (Public Law 
                                100-203).''.
    (b) Conforming Amendment.--Section 542 of BIPA (114 Stat. 2763A-
550) is repealed.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 (114 Stat. 2763A-
463 et seq.), as enacted into law by section 1(a)(6) of Public Law 106-
554.

                 TITLE II--OTHER RURAL HOSPITAL REFORMS

SEC. 201. CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM.

    (a) In General.--Part A of title XVI of the Public Health Service 
Act (42 U.S.C. 300q et seq.) is amended by adding at the end the 
following new section:

            ``capital infrastructure revolving loan program

    ``Sec. 1603. (a) Authority To Make and Guarantee Loans.--
            ``(1) Authority to make loans.--The Secretary may make 
        loans from the fund established under section 1602(d) to any 
        rural entity for projects for capital improvements, including--
                    ``(A) the acquisition of land necessary for the 
                capital improvements;
                    ``(B) the renovation or modernization of any 
                building;
                    ``(C) the acquisition or repair of fixed or major 
                movable equipment; and
                    ``(D) such other project expenses as the Secretary 
                determines appropriate.
            ``(2) Authority to guarantee loans.--
                    ``(A) In general.--The Secretary may guarantee the 
                payment of principal and interest for loans made to 
                rural entities for projects for any capital improvement 
                described in paragraph (1) to any non-Federal lender.
                    ``(B) Interest subsidies.--In the case of a 
                guarantee of any loan made to a rural entity under 
                subparagraph (A), the Secretary may pay to the holder 
                of such loan, for and on behalf of the project for 
                which the loan was made, amounts sufficient to reduce 
                (by not more than 3 percent) the net effective interest 
                rate otherwise payable on such loan.
    ``(b) Amount of Loan.--The principal amount of a loan directly made 
or guaranteed under subsection (a) for a project for capital 
improvement may not exceed $5,000,000.
    ``(c) Funding Limitations.--
            ``(1) Government credit subsidy exposure.--The total of the 
        Government credit subsidy exposure under the Credit Reform Act 
        of 1990 scoring protocol with respect to the loans outstanding 
        at any time with respect to which guarantees have been issued, 
        or which have been directly made, under subsection (a) may not 
        exceed $50,000,000 per year.
            ``(2) Total amounts.--Subject to paragraph (1), the total 
        of the principal amount of all loans directly made or 
        guaranteed under subsection (a) may not exceed $250,000,000 per 
        year.
    ``(d) Capital Assessment and Planning Grants.--
            ``(1) Nonrepayable grants.--Subject to paragraph (2), the 
        Secretary may make a grant to a rural entity, in an amount not 
        to exceed $50,000, for purposes of capital assessment and 
        business planning.
            ``(2) Limitation.--The cumulative total of grants awarded 
        under this subsection may not exceed $2,500,000 per year.
    ``(e) Termination of Authority.--The Secretary may not directly 
make or guarantee any loan under subsection (a) or make a grant under 
subsection (d) after September 30, 2008.''.
    (b) Rural Entity Defined.--Section 1624 of the Public Health 
Service Act (42 U.S.C. 300s-3) is amended by adding at the end the 
following new paragraph:
            ``(14)(A) The term `rural entity' includes--
                    ``(i) a rural health clinic, as defined in section 
                1861(aa)(2) of the Social Security Act;
                    ``(ii) any medical facility with at least 1 bed, 
                but with less than 50 beds, that is located in--
                            ``(I) a county that is not part of a 
                        metropolitan statistical area; or
                            ``(II) a rural census tract of a 
                        metropolitan statistical area (as determined 
                        under the most recent modification of the 
                        Goldsmith Modification, originally published in 
                        the Federal Register on February 27, 1992 (57 
                        Fed. Reg. 6725));
                    ``(iii) a hospital that is classified as a rural, 
                regional, or national referral center under section 
                1886(d)(5)(C) of the Social Security Act; and
                    ``(iv) a hospital that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
            ``(B) For purposes of subparagraph (A), the fact that a 
        clinic, facility, or hospital has been geographically 
        reclassified under the medicare program under title XVIII of 
        the Social Security Act shall not preclude a hospital from 
        being considered a rural entity under clause (i) or (ii) of 
        subparagraph (A).''.
    (c) Conforming Amendments.--Section 1602 of the Public Health 
Service Act (42 U.S.C. 300q-2) is amended--
            (1) in subsection (b)(2)(D), by inserting ``or 
        1603(a)(2)(B)'' after ``1601(a)(2)(B)''; and
            (2) in subsection (d)--
                    (A) in paragraph (1)(C), by striking ``section 
                1601(a)(2)(B)'' and inserting ``sections 1601(a)(2)(B) 
                and 1603(a)(2)(B)''; and
                    (B) in paragraph (2)(A), by inserting ``or 
                1603(a)(2)(B)'' after ``1601(a)(2)(B)''.

SEC. 202. FIVE-YEAR EXTENSION OF THE AUTHORIZATION FOR APPROPRIATIONS 
              FOR CERTAIN MEDICARE RURAL GRANTS.

    Section 1820(j) (42 U.S.C. 1395i-4(j)) is amended by striking 
``subsection (g)'' and all that follows and inserting ``subsection 
(g)--
            ``(1) $25,000,000 in each of the fiscal years 1998 through 
        2003; and
            ``(2) $40,000,000 in each of the fiscal years 2004 through 
        2008.''.
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