I 

108TH CONGRESS 

1ST SESSION H. R. 2175

To amend title XVIII of the Social Security Act to enhance beneficiary 

access in rural areas to quality health care services under the Medicare 

Program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 20, 2003

Mr. SANDLIN (for himself, Mr. BERRY, Mr. MCINTYRE, Mr. ROSS, and Mr. 

TURNER of Texas) 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 enhance 

beneficiary access in rural areas to quality health care 

services under the Medicare Program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rural Healthcare Ac5 cess Improvement Act of 2003’’. 
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1 SEC. 2. EQUALIZING URBAN AND RURAL STANDARDIZED 

2 PAYMENT AMOUNTS UNDER THE MEDICARE 

3 INPATIENT HOSPITAL PROSPECTIVE PAY4 MENT SYSTEM. 

5 (a) IN GENERAL.—Section 1886(d)(3)(A)(iv) of the 

6 Social Security Act (42 U.S.C. 1395ww(d)(3)(A)(iv)) is 

7 amended—

8 (1) by striking ‘‘(iv) For discharges’’ and in9 serting ‘‘(iv)(I) Subject to subclause (II), for dis10 charges’’; and 

11 (2) by adding at the end the following new sub12 clause: 

13 ‘‘(II) For discharges occurring in a fiscal year 

14 beginning with fiscal year 2004, the Secretary shall 

15 compute a standardized amount for hospitals located 

16 in any area within the United States and within 

17 each region equal to the standardized amount com18 puted for the previous fiscal year under this sub19 paragraph for hospitals located in a large urban area 

20 (or, beginning with fiscal year 2005, for hospitals lo21 cated in any area) increased by the applicable per22 centage increase under subsection (b)(3)(B)(i) for 

23 the fiscal year involved.’’. 

24 (b) CONFORMING AMENDMENTS.—
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1 (1) COMPUTING DRG-SPECIFIC RATES.—Section 

2 1886(d)(3)(D) of the Social Security Act (42 U.S.C. 

3 1395ww(d)(3)(D)) is amended—

4 (A) in the heading, by striking ‘‘IN DIF5 FERENT AREAS’’; 

6 (B) in the matter preceding clause (i), by 

7 striking ‘‘, each of’’; 

8 (C) in clause (i)—

9 (i) in the matter preceding subclause 

10 (I), by inserting ‘‘for fiscal years before fis11 cal year 2004,’’ before ‘‘for hospitals’’; and 

12 (ii) in subclause (II), by striking 

13 ‘‘and’’ after the semicolon at the end; 

14 (D) in clause (ii)—

15 (i) in the matter preceding subclause 

16 (I), by inserting ‘‘for fiscal years before fis17 cal year 2004,’’ before ‘‘for hospitals’’; and 

18 (ii) in subclause (II), by striking the 

19 period at the end and inserting ‘‘; and’’; 

20 and 

21 (E) by adding at the end the following new 

22 clause: 

23 ‘‘(iii) for a fiscal year beginning after fiscal 

24 year 2003, for hospitals located in all areas, to 

25 the product of—
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1 ‘‘(I) the applicable standardized 

2 amount (computed under subparagraph 

3 (A)), reduced under subparagraph (B), 

4 and adjusted or reduced under subpara5 graph (C) for the fiscal year; and 

6 ‘‘(II) the weighting factor (determined 

7 under paragraph (4)(B)) for that diag8 nosis-related group.’’. 

9 (2) TECHNICAL CONFORMING SUNSET.—Section 

10 1886(d)(3) of the Social Security Act (42 U.S.C. 

11 1395ww(d)(3)) is amended—

12 (A) in the matter preceding subparagraph 

13 (A), by inserting ‘‘, for fiscal years before fiscal 

14 year 1997,’’ before ‘‘a regional adjusted DRG 

15 prospective payment rate’’; and 

16 (B) in subparagraph (D), in the matter 

17 preceding clause (i), by inserting ‘‘, for fiscal 

18 years before fiscal year 1997,’’ before ‘‘a re19 gional DRG prospective payment rate for each 

20 region,’’. 

21 SEC. 3. FAIRNESS IN THE MEDICARE DISPROPORTIONATE 

22 SHARE HOSPITAL (DSH) ADJUSTMENT FOR 

23 RURAL HOSPITALS. 

24 (a) EQUALIZING DSH PAYMENT AMOUNTS.—
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1 (1) IN GENERAL.—Section 1886(d)(5)(F)(vii) 

2 of the Social Security Act (42 U.S.C. 

3 1395ww(d)(5)(F)(vii)) is amended by inserting ‘‘, 

4 and, after October 1, 2003, for any other hospital 

5 described in clause (iv),’’ after ‘‘clause (iv)(I)’’ in the 

6 matter preceding subclause (I). 

7 (2) CONFORMING AMENDMENTS.—Section 

8 1886(d)(5)(F) of the Social Security Act (42 U.S.C. 

9 1395ww(d)(5)(F)) is amended—

10 (A) in clause (iv)—

11 (i) in subclause (II)—

12 (I) by inserting ‘‘and before Oc13 tober 1, 2003,’’ after ‘‘April 1, 

14 2001,’’; and 

15 (II) by inserting ‘‘or, for dis16 charges occurring on or after October 

17 1, 2003, is equal to the percent deter18 mined in accordance with the applica19 ble formula described in clause (vii)’’ 

20 after ‘‘clause (xiii)’’; 

21 (ii) in subclause (III)—

22 (I) by inserting ‘‘and before Oc23 tober 1, 2003,’’ after ‘‘April 1, 

24 2001,’’; and
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1 (II) by inserting ‘‘or, for dis2 charges occurring on or after October 

3 1, 2003, is equal to the percent deter4 mined in accordance with the applica5 ble formula described in clause (vii)’’ 

6 after ‘‘clause (xii)’’; 

7 (iii) in subclause (IV)— 

8 (I) by inserting ‘‘and before Oc9 tober 1, 2003,’’ after ‘‘April 1, 

10 2001,’’; and 

11 (II) by inserting ‘‘or, for dis12 charges occurring on or after October 

13 1, 2003, is equal to the percent deter14 mined in accordance with the applica15 ble formula described in clause (vii)’’ 

16 after ‘‘clause (x) or (xi)’’; 

17 (iv) in subclause (V)—

18 (I) by inserting ‘‘and before Oc19 tober 1, 2003,’’ after ‘‘April 1, 

20 2001,’’; and 

21 (II) by inserting ‘‘or, for dis22 charges occurring on or after October 

23 1, 2003, is equal to the percent deter24 mined in accordance with the applica-
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1 ble formula described in clause (vii)’’ 

2 after ‘‘clause (xi)’’; and 

3 (v) in subclause (VI)— 

4 (I) by inserting ‘‘and before Oc5 tober 1, 2003,’’ after ‘‘April 1, 

6 2001,’’; and 

7 (II) by inserting ‘‘or, for dis8 charges occurring on or after October 

9 1, 2003, is equal to the percent deter10 mined in accordance with the applica11 ble formula described in clause (vii)’’ 

12 after ‘‘clause (x)’’; 

13 (B) in clause (viii), by striking ‘‘The for14 mula’’ and inserting ‘‘For discharges occurring 

15 before October 1, 2003, the formula’’; and 

16 (C) in each of clauses (x), (xi), (xii), and 

17 (xiii), by striking ‘‘For purposes’’ and inserting 

18 ‘‘With respect to discharges occurring before 

19 October 1, 2003, for purposes’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply with respect to discharges occur22 ring on or after October 1, 2003. 
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1 SEC. 4. MEDICARE INPATIENT HOSPITAL PAYMENT AD2 JUSTMENT FOR LOW-VOLUME HOSPITALS. 

3 Section 1886(d) of the Social Security Act (42 U.S.C. 

4 1395ww(d)) is amended by adding at the end the following 

5 new paragraph: 

6 ‘‘(12) PAYMENT ADJUSTMENT FOR LOW-VOL7 UME HOSPITALS.—

8 ‘‘(A) PAYMENT ADJUSTMENT.—

9 ‘‘(i) IN GENERAL.—Notwithstanding 

10 any other provision of this section, for each 

11 cost reporting period (beginning with the 

12 cost reporting period that begins in fiscal 

13 year 2005), the Secretary shall provide for 

14 an additional payment amount to each low15 volume hospital (as defined in clause (iii)) 

16 for discharges occurring during that cost 

17 reporting period to increase the amount 

18 paid to such hospital under this section for 

19 such discharges by the applicable percent20 age increase determined under clause (ii). 

21 ‘‘(ii) APPLICABLE PERCENTAGE IN22 CREASE.—The Secretary shall determine a 

23 percentage increase applicable under this 

24 paragraph that ensures that—

25 ‘‘(I) no percentage increase in 

26 payments under this paragraph ex-
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1 ceeds 25 percent of the amount of 

2 payment that would otherwise be 

3 made to a low-volume hospital under 

4 this section for each discharge (but 

5 for this paragraph);

6 ‘‘(II) low-volume hospitals that 

7 have the lowest number of discharges 

8 during a cost reporting period receive 

9 the highest percentage increase in 

10 payments due to the application of 

11 this paragraph; and 

12 ‘‘(III) the percentage increase in 

13 payments due to the application of 

14 this paragraph is reduced as the num15 ber of discharges per cost reporting 

16 period increases. 

17 ‘‘(iii) LOW-VOLUME HOSPITAL DE18 FINED.—For purposes of this paragraph, 

19 the term ‘low-volume hospital’ means, for a 

20 cost reporting period, a subsection (d) hos21 pital (as defined in paragraph (1)(B)) 

22 other than a critical access hospital (as de23 fined in section 1861(mm)(1)) that— 

24 ‘‘(I) the Secretary determines 

25 had an average of less than 2,000 dis-
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1 charges (determined with respect to 

2 all patients and not just individuals 

3 receiving benefits under this title) 

4 during the 3 most recent cost report5 ing periods for which data are avail6 able that precede the cost reporting 

7 period to which this paragraph ap8 plies; and 

9 ‘‘(II) is located at least 15 miles 

10 from a similar hospital (or is deemed 

11 by the Secretary to be so located by 

12 reason of such factors as the Sec13 retary determines appropriate, includ14 ing the time required for an individual 

15 to travel to the nearest alternative 

16 source of appropriate inpatient care 

17 (taking into account the location of 

18 such alternative source of inpatient 

19 care and any weather or travel condi20 tions that may affect such travel 

21 time)). 

22 ‘‘(B) PROHIBITING CERTAIN REDUC23 TIONS.—Notwithstanding subsection (e), the 

24 Secretary shall not reduce the payment 

25 amounts under this section to offset the in-
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1 crease in payments resulting from the applica2 tion of subparagraph (A).’’. 

3 SEC. 5. ADJUSTMENT TO THE MEDICARE INPATIENT HOS4 PITAL PPS WAGE INDEX TO REVISE THE 

5 LABOR-RELATED SHARE OF SUCH INDEX. 

6 (a) IN GENERAL.—Section 1886(d)(3)(E) of the So7 cial Security Act (42 U.S.C. 1395ww(d)(3)(E)) is amend8 ed—

9 (1) by striking ‘‘WAGE LEVELS.—The Sec10 retary’’ and inserting ‘‘WAGE LEVELS.—

11 ‘‘(i) IN GENERAL.—Except as provided in 

12 clause (ii), the Secretary’’; and 

13 (2) by adding at the end the following new 

14 clause: 

15 ‘‘(ii) ALTERNATIVE PROPORTION TO BE

16 ADJUSTED BEGINNING IN FISCAL YEAR 2004.—

17 ‘‘(I) IN GENERAL.—Except as pro18 vided in subclause (II), for discharges oc19 curring on or after October 1, 2003, the 

20 Secretary shall substitute ‘62 percent’ for 

21 the proportion described in the first sen22 tence of clause (i). 

23 ‘‘(II) HOLD HARMLESS FOR CERTAIN

24 HOSPITALS.—If the application of sub25 clause (I) would result in lower payments 
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1 to a hospital than would otherwise be 

2 made, then this subparagraph shall be ap3 plied as if this clause had not been en4 acted.’’. 

5 (b) WAIVING BUDGET NEUTRALITY.—Section 

6 1886(d)(3)(E) of the Social Security Act (42 U.S.C. 

7 1395ww(d)(3)(E)), as amended by subsection (a), is 

8 amended by adding at the end of clause (i) the following 

9 new sentence: ‘‘The Secretary shall apply the previous sen10 tence for any period as if the amendments made by section 

11 5(a) of the Rural Healthcare Access Improvement Act of 

12 2003 had not been enacted.’’. 

13 SEC. 6. ONE-YEAR EXTENSION OF HOLD HARMLESS PROVI14 SIONS FOR SMALL RURAL HOSPITALS AND 

15 TEMPORARY TREATMENT OF CERTAIN SOLE 

16 COMMUNITY HOSPITALS TO LIMIT DECLINE 

17 IN PAYMENT UNDER THE OPD PPS. 

18 (a) HOLD HARMLESS PROVISIONS.—Section 

19 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 

20 1395l(t)(7)(D)(i)) is amended—

21 (1) in the heading, by striking ‘‘SMALL’’ and in22 serting ‘‘CERTAIN’’; 

23 (2) by inserting ‘‘or a sole community hospital 

24 (as defined in section 1886(d)(5)(D)(iii)) located in 

25 a rural area’’ after ‘‘100 beds’’; and 
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1 (3) by striking ‘‘2004’’ and inserting ‘‘2005’’. 

2 (b) EFFECTIVE DATE.—The amendment made by 

3 subsection (a)(2) shall apply with respect to payment for 

4 OPD services furnished on and after January 1, 2004. 

5 SEC. 7. CRITICAL ACCESS HOSPITAL (CAH) IMPROVE6 MENTS. 

7 (a) PERMITTING HOSPITALS TO ALLOCATE SWING

8 BEDS AND ACUTE CARE INPATIENT BEDS SUBJECT TO

9 A TOTAL LIMIT OF 25 BEDS.—

10 (1) IN GENERAL.—Section 1820(c)(2)(B)(iii) of 

11 the Social Security Act (42 U.S.C. 1395i–

12 4(c)(2)(B)(iii)) is amended to read as follows: 

13 ‘‘(iii) provides not more than a total 

14 of 25 extended care service beds (pursuant 

15 to an agreement under subsection (f)) or 

16 acute care inpatient beds (meeting such 

17 standards as the Secretary may establish) 

18 for providing inpatient care for a period 

19 that does not exceed, as determined on an 

20 annual, average basis, 96 hours per pa21 tient;’’. 

22 (2) CONFORMING AMENDMENT.—Section 

23 1820(f) of the Social Security Act (42 U.S.C. 

24 1395i–4(f)) is amended by striking ‘‘and the number 
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1 of beds used at any time for acute care inpatient 

2 services does not exceed 15 beds’’. 

3 (b) ELIMINATION OF THE ISOLATION TEST FOR

4 COST-BASED CAH AMBULANCE SERVICES.—

5 (1) IN GENERAL.—Section 1834(l)(8) of the 

6 Social Security Act (42 U.S.C. 1395m(l)(8)), as 

7 added by section 205(a) of the Medicare, Medicaid, 

8 and SCHIP Benefits Improvement and Protection 

9 Act of 2000 (114 Stat. 2763A–482), as enacted into 

10 law by section 1(a)(6) of Public Law 106–554 (114 

11 Stat. 2763), is amended by striking the comma at 

12 the end of subparagraph (B) and all that follows 

13 and inserting a period. 

14 (2) TECHNICAL CORRECTION.—Section 1834(l) 

15 of the Social Security Act (42 U.S.C. 1395m(l)) is 

16 amended by redesignating paragraph (8), as added 

17 by section 221(a) of the Medicare, Medicaid, and 

18 SCHIP Benefits Improvement and Protection Act of 

19 2000 (114 Stat. 2763A–486), as enacted into law by 

20 section 1(a)(6) of Public Law 106–554 (114 Stat. 

21 2763), as paragraph (9). 

22 (c) COVERAGE OF COSTS FOR CERTAIN EMERGENCY

23 ROOM ON-CALL PROVIDERS.—
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1 (1) IN GENERAL.—Section 1834(g)(5) of the 

2 Social Security Act (42 U.S.C. 1395m(g)(5)) is 

3 amended—

4 (A) in the heading—

5 (i) by inserting ‘‘CERTAIN’’ before 

6 ‘‘EMERGENCY’’; and 

7 (ii) by striking ‘‘PHYSICIANS’’ and in8 serting ‘‘PROVIDERS’’; 

9 (B) by striking ‘‘emergency room physi10 cians who are on-call (as defined by the Sec11 retary)’’ and inserting ‘‘physicians, physician 

12 assistants, nurse practitioners, and clinical 

13 nurse specialists who are on-call (as defined by 

14 the Secretary) to provide emergency services’’; 

15 and 

16 (C) by striking ‘‘physicians’ services’’ and 

17 inserting ‘‘services covered under this title’’. 

18 (2) EFFECTIVE DATE.—The amendments made 

19 by paragraph (1) shall apply with respect to costs 

20 incurred for services provided on or after January 1, 

21 2004. 

22 (d) AUTHORIZATION OF PERIODIC INTERIM PAY23 MENT (PIP).—
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1 (1) IN GENERAL.—Section 1815(e)(2) of the 

2 Social Security Act (42 U.S.C. 1395g(e)(2)) is 

3 amended—

4 (A) in subparagraph (C), by striking 

5 ‘‘and’’ after the semicolon at the end; 

6 (B) in subparagraph (D), by adding ‘‘and’’ 

7 after the semicolon at the end; and 

8 (C) by inserting after subparagraph (D) 

9 the following new subparagraph: 

10 ‘‘(E) inpatient critical access hospital services,’’. 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall apply with respect to pay13 ments for inpatient critical access hospital services 

14 furnished on or after January 1, 2004. 

15 (e) EXCLUSION OF NEW CAHS FROM PPS HOS16 PITAL WAGE INDEX CALCULATION.—Section 

17 1886(d)(3)(E)(i) of the Social Security Act (42 U.S.C. 

18 1395ww(d)(3)(E)(i)), as amended by section 5, is amend19 ed by inserting after the first sentence the following new 

20 sentence: ‘‘In calculating the hospital wage levels under 

21 the preceding sentence applicable with respect to cost re22 porting periods beginning on or after January 1, 2004, 

23 the Secretary shall exclude the wage levels of any hospital 

24 that became a critical access hospital prior to the cost re-
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1 porting period for which such hospital wage levels are cal2 culated.’’. 

3 SEC. 8. TEMPORARY INCREASE FOR HOME HEALTH SERV4 ICES FURNISHED IN A RURAL AREA. 

5 (a) IN GENERAL.—In the case of home health serv6 ices furnished in a rural area (as defined in section 

7 1886(d)(2)(D) of the Social Security Act (42 U.S.C. 

8 1395ww(d)(2)(D))) on or after October 1, 2003, and be9 fore October 1, 2005, the Secretary of Health and Human 

10 Services shall increase the payment amount otherwise 

11 made under section 1895 of such Act (42 U.S.C. 1395fff ) 

12 for such services by 10 percent. 

13 (b) WAIVING BUDGET NEUTRALITY.—The Secretary 

14 of Health and Human Services shall not reduce the stand15 ard prospective payment amount (or amounts) under sec16 tion 1895 of the Social Security Act (42 U.S.C. 1395fff ) 

17 applicable to home health services furnished during a pe18 riod to offset the increase in payments resulting from the 

19 application of subsection (a). 

20 (c) NO EFFECT ON SUBSEQUENT PERIODS.—The 

21 payment increase provided under subsection (a) for a pe22 riod under such subsection, shall not apply to episodes and 

23 visits ending after such period, and shall not be taken into 

24 account in calculating the payment amounts applicable for 

25 episodes and visits occurring after such period. 
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1 SEC. 9. TEMPORARY INCREASE IN PAYMENTS FOR CERTAIN 

2 SERVICES FURNISHED BY SMALL RURAL 

3 HOSPITALS UNDER MEDICARE PROSPECTIVE 

4 PAYMENT SYSTEM FOR HOSPITAL OUT5 PATIENT DEPARTMENT SERVICES. 

6 (a) INCREASE.—

7 (1) IN GENERAL.—In the case of an applicable 

8 covered OPD service (as defined in paragraph (2)) 

9 that is furnished by a hospital described in para10 graph (7)(D)(i) of section 1833(t) of the Social Se11 curity Act (42 U.S.C. 1395l(t)) on or after January 

12 1, 2004, and before January 1, 2007, the Secretary 

13 of Health and Human Services (in this section re14 ferred to as the ‘‘Secretary’’) shall increase the 

15 medicare OPD fee schedule amount (as determined 

16 under paragraph (4)(A) of such section) that is ap17 plicable for such service in that year (determined 

18 without regard to any increase under this section in 

19 a previous year) by 5 percent. 

20 (2) APPLICABLE COVERED OPD SERVICES DE21 FINED.—For purposes of this section, the term ‘‘ap22 plicable covered OPD service’’ means a covered clinic 

23 or emergency room visit that is classified within the 

24 groups of covered OPD services (as defined in para25 graph (1)(B) of section 1833(t) of the Social Secu-
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1 rity Act (42 U.S.C. 1395l(t))) established under 

2 paragraph (2)(B) of such section. 

3 (b) NO EFFECT ON COPAYMENT AMOUNT.—The Sec4 retary shall compute the copayment amount for applicable 

5 covered OPD services under section 1833(t)(8)(A) of the 

6 Social Security Act (42 U.S.C. 1395l(t)(8)(A)) as if this 

7 section had not been enacted. 

8 (c) NO EFFECT ON INCREASE UNDER HOLD HARM9 LESS OR OUTLIER PROVISIONS.—The Secretary shall 

10 apply the temporary hold harmless provision under para11 graph (7)(D)(i) of section 1833(t) of the Social Security 

12 Act (42 U.S.C. 1395l(t)) and the outlier provision under 

13 paragraph (5) of such section as if this section had not 

14 been enacted. 

15 (d) WAIVING BUDGET NEUTRALITY AND NO REVI16 SION OR ADJUSTMENTS.—The Secretary shall not make 

17 any revision or adjustment under subparagraph (A), (B), 

18 or (C) of section 1833(t)(9) of the Social Security Act (42 

19 U.S.C. 1395l(t)(9)) because of the application of sub20 section (a)(1). 

21 (e) NO EFFECT ON PAYMENTS AFTER INCREASE PE22 RIOD ENDS.—The Secretary shall not take into account 

23 any payment increase provided under subsection (a)(1) in 

24 determining payments for covered OPD services (as de25 fined in paragraph (1)(B) of section 1833(t) of the Social
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1 Security Act (42 U.S.C. 1395l(t))) under such section that 

2 are furnished after January 1, 2007. 

3 (f) FINDINGS.—The Congress finds the following: 

4 (1) The medicare program has a responsibility 

5 to pay enough for beneficial new technologies in 

6 order to ensure that medicare beneficiaries have ac7 cess to care; however, such program must also be a 

8 prudent purchaser of health care items and services. 

9 (2) The 2003 Medicare Hospital Outpatient 

10 Prospective Payment System Regulation may have 

11 resulted in limiting beneficiary access to care. 

12 (3) A methodology should be developed under 

13 the medicare outpatient prospective payment system 

14 under section 1833(t) of the Social Security Act (42 

15 U.S.C. 1395l(t)) with appropriate resources and 

16 such methodology should be implemented January 1, 

17 2004. This will ensure that all hospitals are appro18 priately reimbursed for the drugs and biologics that 

19 are used in the outpatient setting which in turn will 

20 ensure patient access to new technologies.

21 (g) TECHNICAL AMENDMENT.—Section 

22 1833(t)(2)(B) (42 U.S.C. 1395l(t)(2)(B)) is amended by 

23 inserting ‘‘(and periodically revise such groups pursuant 

24 to paragraph (9)(A))’’ after ‘‘establish groups’’. 
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1 SEC. 10. TEMPORARY INCREASE FOR GROUND AMBULANCE 

2 SERVICES FURNISHED IN A RURAL AREA. 

3 Section 1834(l) of the Social Security Act (42 U.S.C. 

4 1395m(l)), as amended by section 7(b)(2), is amended by 

5 adding at the end the following new paragraph: 

6 ‘‘(10) TEMPORARY INCREASE FOR GROUND AM7 BULANCE SERVICES FURNISHED IN A RURAL

8 AREA.—

9 ‘‘(A) IN GENERAL.—Notwithstanding any 

10 other provision of this subsection, in the case of 

11 ground ambulance services furnished on or 

12 after January 1, 2004, and before January 1, 

13 2007, for which the transportation originates in 

14 a rural area described in paragraph (9) or in a 

15 rural census tract described in such paragraph, 

16 the fee schedule established under this section 

17 shall provide that the rate for the service other18 wise established, after application of any in19 crease under such paragraph, shall be increased 

20 by 5 percent. 

21 ‘‘(B) APPLICATION OF INCREASED PAY22 MENTS AFTER 2006.—The increased payments 

23 under subparagraph (A) shall not be taken into 

24 account in calculating payments for services 

25 furnished on or after the period specified in 

26 such subparagraph.’’. 
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1 SEC. 11. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC 

2 AND FEDERALLY QUALIFIED HEALTH CEN3 TER SERVICES FROM THE MEDICARE PPS 

4 FOR SKILLED NURSING FACILITIES. 

5 (a) IN GENERAL.—Section 1888(e) of the Social Se6 curity Act (42 U.S.C. 1395yy(e)) is amended—

7 (1) in paragraph (2)(A)(i)(II), by striking 

8 ‘‘clauses (ii) and (iii)’’ and inserting ‘‘clauses (ii), 

9 (iii), and (iv)’’; and 

10 (2) by adding at the end of paragraph (2)(A) 

11 the following new clause: 

12 ‘‘(iv) EXCLUSION OF CERTAIN RURAL

13 HEALTH CLINIC AND FEDERALLY QUALI14 FIED HEALTH CENTER SERVICES.—Serv15 ices described in this clause are—

16 ‘‘(I) rural health clinic services 

17 (as defined in paragraph (1) of sec18 tion 1861(aa)); and 

19 ‘‘(II) Federally qualified health 

20 center services (as defined in para21 graph (3) of such section); 

22 that would be described in clause (ii) if 

23 such services were furnished by a physician 

24 or practitioner not affiliated with a rural 

25 health clinic or a Federally qualified health 

26 center.’’. 
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1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to services furnished on or after 

3 January 1, 2004. 

4 SEC. 12. MEDICARE INCENTIVE PAYMENT PROGRAM IM5 PROVEMENTS. 

6 (a) PROCEDURES FOR SECRETARY, AND NOT PHYSI7 CIANS, TO DETERMINE WHEN BONUS PAYMENTS UNDER

8 MEDICARE INCENTIVE PAYMENT PROGRAM SHOULD BE

9 MADE.—Section 1833(m) of the Social Security Act (42 

10 U.S.C. 1395l(m)) is amended—

11 (1) by inserting ‘‘(1)’’ after ‘‘(m)’’; and 

12 (2) by adding at the end the following new 

13 paragraph: 

14 ‘‘(2) The Secretary shall establish procedures under 

15 which the Secretary, and not the physician furnishing the 

16 service, is responsible for determining when a payment is 

17 required to be made under paragraph (1).’’. 

18 (b) EDUCATIONAL PROGRAM REGARDING THE MEDI19 CARE INCENTIVE PAYMENT PROGRAM.—The Secretary 

20 shall establish and implement an ongoing educational pro21 gram to provide education to physicians under the medi22 care program on the medicare incentive payment program 

23 under section 1833(m) of the Social Security Act (42 

24 U.S.C. 1395l(m)).
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1 (c) ONGOING STUDY AND ANNUAL REPORT ON THE

2 MEDICARE INCENTIVE PAYMENT PROGRAM.—

3 (1) ONGOING STUDY.—The Secretary shall con4 duct an ongoing study on the medicare incentive 

5 payment program under section 1833(m) of the So6 cial Security Act (42 U.S.C. 1395l(m)). Such study 

7 shall focus on whether such program increases the 

8 access of medicare beneficiaries who reside in an 

9 area that is designated (under section 332(a)(1)(A) 

10 of the Public Health Service Act (42 U.S.C. 

11 254e(a)(1)(A))) as a health professional shortage 

12 area to physicians’ services under the medicare pro13 gram. 

14 (2) ANNUAL REPORTS.—Not later than 1 year 

15 after the date of enactment of this Act, and annually 

16 thereafter, the Secretary shall submit to Congress a 

17 report on the study conducted under paragraph (1), 

18 together with recommendations for such legislation 

19 and administrative action as the Secretary considers 

20 appropriate. 

21 SEC. 13. TWO-YEAR TREATMENT OF CERTAIN CLINICAL DI22 AGNOSTIC LABORATORY TESTS FURNISHED 

23 BY A SOLE COMMUNITY HOSPITAL. 

24 Notwithstanding subsections (a)(1)(D) and (h) of 

25 section 1833 of the Social Security Act (42 U.S.C. 1395l) 
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1 and section 1834(d)(1) of such Act (42 U.S.C. 

2 1395m(d)(1)), in the case of a clinical diagnostic labora3 tory test covered under part B of title XVIII of such Act 

4 that is furnished in 2004 or 2005 by a sole community 

5 hospital (as defined in section 1886(d)(5)(D)(iii) of such 

6 Act (42 U.S.C. 1395ww(d)(5)(D)(iii))) as part of services 

7 provided to patients of the hospital, the following rules 

8 shall apply: 

9 (1) PAYMENT BASED ON REASONABLE COSTS.—

10 The amount of payment for such test shall be 100 

11 percent of the reasonable costs of the hospital in fur12 nishing such test. 

13 (2) NO BENEFICIARY COST-SHARING.—No coin14 surance, deductible, copayment, or other cost-shar15 ing otherwise applicable under such part B shall 

16 apply with respect to such test. 

17 SEC. 14. ESTABLISHMENT OF FLOOR ON GEOGRAPHIC AD18 JUSTMENTS OF PAYMENTS FOR PHYSICIANS’ 

19 SERVICES. 

20 Section 1848(e)(1) of the Social Security Act (42 

21 U.S.C. 1395w–4(e)(1)) is amended—

22 (1) in subparagraph (A), by striking ‘‘subpara23 graphs (B) and (C)’’ and inserting ‘‘subparagraphs 

24 (B), (C), and (E)’’; and 
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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(E) FLOOR FOR PRACTICE EXPENSE, 

4 MALPRACTICE, AND WORK GEOGRAPHIC INDI5 CES.—For purposes of payment for services 

6 furnished on or after January 1, 2004, after 

7 calculating the practice expense, malpractice, 

8 and work geographic indices in clauses (i), (ii), 

9 and (iii) of subparagraph (A) and in subpara10 graph (B), the Secretary shall increase any 

11 such index to 1.00 for any locality for which 

12 such index is less than 1.00.’’.

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