I 

113TH CONGRESS 

1ST SESSION H. R. 2027 

To amend section 1877 of the Social Security Act to modify the requirements 

for hospitals to qualify for the rural provider and hospital exception 

to physician ownership or investment prohibition in order to take into 

account hospitals that were under construction or development at the 

time of imposing such requirements, hospital expansions, and hospitals 

in financial distress, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 16, 2013 

Mr. SAM JOHNSON of Texas (for himself, Mr. HINOJOSA, Mr. CARSON of Indiana, Ms. JACKSON LEE, Ms. JENKINS, Mr. MARCHANT, Mr. YOUNG of 

Indiana, Mr. BURGESS, and Mr. YODER) introduced the following bill; 

which was referred to the Committee on Energy and Commerce, and in 

addition to the Committee on Ways and Means, 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 section 1877 of the Social Security Act to modify 

the requirements for hospitals to qualify for the rural 

provider and hospital exception to physician ownership 

or investment prohibition in order to take into account 

hospitals that were under construction or development 

at the time of imposing such requirements, hospital expansions, and hospitals in financial distress, and for 

other purposes. 


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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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Expanding Patients’ Access to Quality Care Act of 

6 2013’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Modification of Stark requirements for certain hospitals that were under 

construction or development as of December 30, 2010. 

Sec. 3. Modifying Stark requirements for applicable hospitals to qualify for expansion of facility capacity. 

Sec. 4. Additional exception for physician ownership and investment for hospitals in financial distress. 

9 SEC. 2. MODIFICATION OF STARK REQUIREMENTS FOR 

10 CERTAIN HOSPITALS THAT WERE UNDER 

11 CONSTRUCTION OR DEVELOPMENT AS OF 

12 DECEMBER 30, 2010. 

13 Section 1877(i) of the Social Security Act (42 U.S.C. 

14 1395nn(i)) is amended— 

15 (1) in paragraph (1)(A)— 

16 (A) in the matter preceding clause (i), by 

17 striking ‘‘had’’; 

18 (B) in clause (i), by striking ‘‘; and’’ and 

19 inserting the following: ‘‘, and had a provider 

20 agreement under section 1866 in effect on such 

21 date or was under construction or was under 


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1 development (as defined in paragraph (7)(A)) 

2 on such date; or’’; and 

3 (C) by striking clause (ii); 

4 (2) in paragraph (1)(B), by inserting before the 

5 period at the end the following: ‘‘or if the hospital 

6 was under construction or under development on De7 cember 31, 2010, no greater than the number of op8 erating rooms, procedure rooms, and beds for which 

9 the hospital is licensed as of the date the hospital 

10 had a provider agreement in effect under section 

11 1866’’; 

12 (3) in paragraph (1)(D)(i), by inserting before 

13 the period at the end the following: ‘‘or if the hos14 pital was under construction or under development 

15 on December 31, 2010, as of the date the hospital 

16 had a provider agreement in effect under section 

17 1866’’; 

18 (4) in paragraph (3)(C)(iii), by inserting after 

19 ‘‘December 31, 2010,’’ the following: ‘‘or in the case 

20 of a hospital that did not have a provider agreement 

21 in effect as of such date but was under construction 

22 or under development on such date,’’; and 

23 (5) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(7) DEFINITIONS.—For purposes of this sub2 section: 

3 ‘‘(A) UNDER DEVELOPMENT.—A hospital 

4 shall be treated as being ‘under development’ 

5 on December 31, 2010, if on or before such 

6 date the hospital— 

7 ‘‘(i) submitted its enrollment applica8 tion for a Medicare provider agreement; 

9 ‘‘(ii) had a binding written agreement 

10 with an outside, unrelated party for the ac11 tual design, construction, renovation, lease, 

12 or demolition for a hospital, and has ex13 pended at least 10 percent of the estimated 

14 cost of the project (or, if less, $1,000,000); 

15 or 

16 ‘‘(iii) obtained a certificate of need in 

17 a State where one is required.’’. 

18 SEC. 3. MODIFYING STARK REQUIREMENTS FOR APPLICA19 BLE HOSPITALS TO QUALIFY FOR EXPANSION 

20 OF FACILITY CAPACITY. 

21 Section 1877(i)(3) of the Social Security Act (42 

22 U.S.C. 1395nn(i)(3)) is amended— 

23 (1) by striking subparagraphs (A), (E), (F), 

24 (H), and (I); 


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1 (2) by amending subparagraph (B) to read as 

2 follows: 

3 ‘‘(B) LIMITATION ON FREQUENCY OF IN4 CREASES.—A hospital may not effect an in5 crease described in subparagraph (C) more 

6 often than once every 2 years.’’; 

7 (3) in subparagraphs (C) and (D), by striking 

8 ‘‘an applicable hospital’’ and ‘‘the applicable hos9 pital’’ and inserting ‘‘a hospital’’ and ‘‘the hospital’’, 

10 respectively, each place it appears; 

11 (4) in subparagraph (C)(i)— 

12 (A) by striking ‘‘granted an exception 

13 under the process described in subparagraph 

14 (A)’’; 

15 (B) by striking ‘‘has been granted a pre16 vious exception under this paragraph’’ and in17 serting ‘‘has had a previous increase under this 

18 subsection’’; and 

19 (C) by striking ‘‘such an exception’’ and 

20 inserting ‘‘this paragraph’’; and 

21 (5) in subparagraph (C)(ii), by striking ‘‘The 

22 Secretary shall not permit an increase in’’ and in23 serting ‘‘A hospital may not increase’’. 


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1 SEC. 4. ADDITIONAL EXCEPTION FOR PHYSICIAN OWNER2 SHIP AND INVESTMENT FOR HOSPITALS IN 

3 FINANCIAL DISTRESS. 

4 Section 1877(i) of the Social Security Act (42 U.S.C. 

5 1395nn(i)) is amended— 

6 (1) in paragraph (1)(A), as amended by section 

7 2(1), by inserting after clause (i) the following new 

8 clause: 

9 ‘‘(ii) had a provider agreement under 

10 section 1866 in effect December 31, 2010, 

11 as of such date did not have physician 

12 ownership or investment, but after such 

13 date is determined to be in financial dis14 tress (as defined in paragraph (7)(B)).’’; 

15 (2) in paragraph (1)(D)(i), by inserting before 

16 the period at the end the following: ‘‘, except that 

17 such percentage limitation shall not apply to a hos18 pital determined to be in financial distress (as de19 fined in paragraph (7)(B))’’; and 

20 (3) in paragraph (7), as added by section 2(5), 

21 by adding at the end the following new paragraph: 

22 ‘‘(B) FINANCIAL DISTRESS.—A hospital 

23 shall be treated as being ‘in financial distress’ 

24 for a cost reporting period if the Secretary de25 termines that the hospital has had an overall 

26 negative combined Medicare inpatient prospecVerDate Mar 15 2010 06:30 May 24, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2027.IH H2027

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1 tive payment system and outpatient prospective 

2 payment system operating margin for the most 

3 recent 3 consecutive cost reporting periods for 

4 which data are available. Once the Secretary 

5 makes a determination that a hospital has such 

6 a negative operating margin for a cost reporting 

7 period, the Secretary may not reverse such de8 termination for such period. A hospital that is 

9 treated as being in financial distress under this 

10 subparagraph for a cost reporting period shall 

11 continue to be so treated for all subsequent cost 

12 reporting periods as being in financial distress 

13 without regard to changes in the hospital’s op14 erating margin.’’. 

Æ 


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