II 

115TH CONGRESS 

1ST SESSION S. 1130 

To amend title XVIII of the Social Security Act to create a sustainable 

future for rural healthcare. 

IN THE SENATE OF THE UNITED STATES 

MAY 16, 2017 

Mr. GRASSLEY (for himself, Ms. KLOBUCHAR, and Mr. GARDNER) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To amend title XVIII of the Social Security Act to create 

a sustainable future for rural healthcare. 

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 Emergency 

5 Acute Care Hospital Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) According to the University of North Caro9 lina’s Center for Health Services Research, 55 rural 


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1 hospitals have closed in the Unites States since Jan2 uary 2010. 

3 (2) In 2014, iVantage conducted a study for 

4 the National Rural Health Association and found 

5 283 hospitals at risk of closure based upon perform6 ance indicators that matched those facilities already 

7 forced to close in this decade. 

8 (3) Researchers at the University of North 

9 Carolina identified inpatient volume as a substantial 

10 contributing factor to the financial performance of 

11 rural hospitals, with many of the at-risk hospitals 

12 having an average daily bed census of less than two. 

13 (4) Adverse impacts to the local economy and 

14 the loss of timely access to emergency medical care 

15 are 2 major effects of rural hospital closures. 

16 (5) According to the National Center for Rural 

17 Health Works, the typical rural hospital creates over 

18 140 jobs and generates $6,800,000 in compensation 

19 while serving an average population of 14,600. 

20 (6) The 2014 iVantage study estimates that the 

21 283 at-risk hospitals could result in the loss of 

22 36,000 health care jobs, 50,000 community jobs, 

23 and $10,600,000,000 in gross domestic product. 

24 (7) Time is the most critical factor for achiev25 ing successful outcomes in emergency medicine, and 


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1 emergency medical clinicians refer to the time-sen2 sitive period during which successful outcomes may 

3 be best achieved as the ‘‘golden hour’’. 

4 (8) The National Conference of State Legisla5 tures states that 60 percent of trauma deaths in the 

6 United States occur in rural areas, where only 15 

7 percent of the population is represented. 

8 (9) The disproportionate percentage of trauma 

9 deaths in rural areas is likely attributable in large 

10 part to a combination of response time to the scene 

11 and distance to the nearest emergency room to sta12 bilize trauma victims. 

13 (10) The percentage of trauma deaths occur14 ring in rural areas could continue to increase as 

15 more rural hospitals close, further limiting access to 

16 emergency services and requiring patients to travel 

17 longer distances to receive emergency medical care. 

18 (11) The creation of a rural emergency hospital 

19 designation under the Medicare program will allow 

20 facilities in rural areas to provide emergency medical 

21 services without having to maintain inpatient beds. 

22 (12) In addition to providing emergency care, 

23 rural emergency hospitals could convert the space 

24 previously used for inpatient services to provide 

25 other medical services including, but not limited to, 


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1 observation care, skilled nursing facility care, infu2 sion services, hemodialysis, home health, hospice, 

3 nursing home care, population health, and telemedi4 cine services. 

5 SEC. 3. RURAL EMERGENCY HOSPITAL PROGRAM. 

6 (a) IN GENERAL.— 

7 (1) RURAL EMERGENCY HOSPITAL AND SERV8 ICES DEFINED.—Section 1861 of the Social Security 

9 Act (42 U.S.C. 1395x) is amended— 

10 (A) in subsection (e), in the last sentence 

11 of the matter following paragraph (9), by in12 serting ‘‘or a rural emergency hospital (as de13 fined in section 1861(jjj)(1))’’ before the period 

14 at the end; and 

15 (B) by adding at the end the following sub16 section: 

17 ‘‘Rural Emergency Hospital; Rural Emergency Hospital 

18 Outpatient Services 

19 ‘‘(jjj)(1) The term ‘rural emergency hospital’ means 

20 a facility that— 

21 ‘‘(A)(i) as of December 31, 2016— 

22 ‘‘(I) was a critical access hospital; or 

23 ‘‘(II) was a hospital with not more 

24 than 50 beds located in a county (or equiv25 alent unit of local government) in a rural 


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1 area (as defined in section 1886(d)(2)(D)), 

2 or was a hospital with not more than 50 

3 beds that was treated as being located in 

4 a rural area pursuant to section 

5 1886(d)(8)(E); or 

6 ‘‘(ii) was a critical access hospital de7 scribed in clause (i)(I) or a hospital described 

8 in clause (i)(II) that ceased operations during 

9 the period beginning on the date that is 5 years 

10 prior to the date of the enactment of this sub11 section and ending on December 30, 2016; 

12 ‘‘(B) provides 24-hour emergency medical care 

13 and observation care that does not exceed an annual 

14 per patient average of 24 hours or more than 1 mid15 night; 

16 ‘‘(C) does not provide any acute care inpatient 

17 beds and has protocols in place for the timely trans18 fer of patients who require acute care inpatient serv19 ices or other inpatient services; 

20 ‘‘(D) has elected to be designated as a rural 

21 emergency hospital; 

22 ‘‘(E) has received approval to operate as a rural 

23 emergency hospital from the State under section 

24 1834(v)(3)(A); and 


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1 ‘‘(F) is certified by the Secretary under section 

2 1834(v)(3)(B). 

3 ‘‘(2) The term ‘rural emergency hospital outpatient 

4 services’ means medical and other health services fur5 nished by a rural emergency hospital on an outpatient 

6 basis. 

7 ‘‘(3) Nothing in this subsection or section 1834(v)(3) 

8 shall be construed to prohibit a rural emergency hospital 

9 from providing extended care services.’’. 

10 (2) PAYMENT FOR RURAL EMERGENCY HOS11 PITAL SERVICES.— 

12 (A) IN GENERAL.—Section 1833(a) of the 

13 Social Security Act (42 U.S.C. 1395l(a)) is 

14 amended— 

15 (i) in paragraph (8), by striking 

16 ‘‘and’’ at the end; 

17 (ii) in paragraph (9), by striking the 

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

19 and 

20 (iii) by inserting after paragraph (9) 

21 the following new paragraph: 

22 ‘‘(10) in the case of rural emergency hospital 

23 emergency services and services provided by a rural 

24 emergency hospital or other provider of ambulance 

25 services to transport patients who require acute care 


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1 inpatient services or other inpatient services from 

2 such rural emergency hospital to a hospital or crit3 ical access hospital, the amounts described in section 

4 1834(v).’’. 

5 (B) PAYMENT AMOUNT.—Section 1834 of 

6 the Social Security Act (42 U.S.C. 1395m) is 

7 amended by adding at the end the following 

8 subsection: 

9 ‘‘(v) PAYMENT RULES RELATING TO RURAL EMER10 GENCY HOSPITALS.— 

11 ‘‘(1) PAYMENT FOR RURAL EMERGENCY HOS12 PITAL OUTPATIENT SERVICES.— 

13 ‘‘(A) IN GENERAL.—The amount of pay14 ment for rural emergency hospital outpatient 

15 services of a rural emergency hospital is equal 

16 to 110 percent of the reasonable costs of pro17 viding such services. 

18 ‘‘(B) TELEHEALTH SERVICES.—For pur19 poses of this paragraph, in determining the rea20 sonable costs of providing rural emergency hos21 pital outpatient services, costs associated with 

22 having a backup physician available via a tele23 communications system shall be considered rea24 sonable costs. 


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1 ‘‘(2) PAYMENT FOR TRANSPORTATION SERV2 ICES.—The amount of payment for services provided 

3 by a rural emergency hospital or other provider of 

4 ambulance services to transport patients who require 

5 acute care inpatient services or other inpatient serv6 ices from such rural emergency hospital to a hospital 

7 or critical access hospital is equal to 110 percent of 

8 the reasonable costs of providing such services. 

9 ‘‘(3) REQUIREMENTS FOR RURAL EMERGENCY

10 HOSPITALS.— 

11 ‘‘(A) STATE APPROVAL TO OPERATE AS A

12 RURAL EMERGENCY HOSPITAL.—No payment 

13 shall be made under this subsection to a facil14 ity, or to a provider of ambulance services pro15 viding transportation services from such facil16 ity, unless the State in which the facility is lo17 cated has approved the facility’s designation as 

18 a rural emergency hospital. 

19 ‘‘(B) CERTIFICATION OF RURAL EMER20 GENCY HOSPITAL.— 

21 ‘‘(i) IN GENERAL.—No payment shall 

22 be made under this subsection to a facility, 

23 or to a provider of ambulance services pro24 viding transportation services from such 

25 facility, unless the facility has been cerVerDate Sep 11 2014 03:28 May 17, 2017 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1130.IS S1130

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1 tified by the Secretary as a rural emer2 gency hospital. 

3 ‘‘(ii) CERTIFICATION REQUIRE4 MENTS.—The Secretary shall certify a fa5 cility as a rural emergency hospital if the 

6 facility— 

7 ‘‘(I) meets the criteria for rural 

8 emergency hospitals described in sub9 paragraphs (A) through (E) of section 

10 1861(jjj)(1); 

11 ‘‘(II) either— 

12 ‘‘(aa) is verified by the 

13 American College of Surgeons or 

14 a State as having the resources 

15 required of a level IV trauma 

16 center or higher; or 

17 ‘‘(bb) employs healthcare 

18 professionals that successfully 

19 completed within the preceding 4 

20 years— 

21 ‘‘(AA) the Advanced 

22 Trauma Life Support 

23 Course offered by the Amer24 ican College of Surgeons; or 


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1 ‘‘(BB) another trauma 

2 training program for health3 care professionals that is ac4 cepted by a State trauma 

5 system for certification pur6 poses; 

7 ‘‘(III) has in effect a transfer 

8 agreement with a level I or level II 

9 trauma center; and 

10 ‘‘(IV) meets such staff training 

11 and certification requirements as the 

12 Secretary may require. 

13 ‘‘(4) COINSURANCE.— 

14 ‘‘(A) IN GENERAL.—The amount of pay15 ment for rural emergency hospital services or 

16 transportation services made to a rural emer17 gency hospital or other provider of ambulance 

18 services under this subsection shall be reduced 

19 by the coinsurance amount described in sub20 paragraph (B). 

21 ‘‘(B) COINSURANCE AMOUNT.—The coin22 surance amount described in this subparagraph, 

23 with respect to an item or service provided by 

24 a rural emergency hospital or provider of ambu25 lance services, shall be calculated in the same 


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1 manner as the coinsurance amount for an out2 patient critical access hospital service is cal3 culated under section 1866(a)(2).’’. 

4 (b) WAIVER OF DISTANCE REQUIREMENT FOR RE5 PLACEMENT CAHS; SUBSEQUENT REDESIGNATION OF

6 RURAL EMERGENCY HOSPITALS AS CAHS.—Section 

7 1820(c)(2) of the Social Security Act (42 U.S.C. 1395i– 

8 4(c)(2)) is amended— 

9 (1) in subparagraph (B)(i)(I), by inserting 

10 ‘‘subject to subparagraph (F),’’ before ‘‘is located’’; 

11 and 

12 (2) by adding at the end the following new sub13 paragraphs: 

14 ‘‘(F) OPTION TO WAIVE DISTANCE RE15 QUIREMENT.—Beginning on the date of the en16 actment of this subparagraph, for every critical 

17 access hospital located in a State that is cer18 tified as a rural emergency hospital under sec19 tion 1834(v)(3)(B), the State shall have the op20 tion of waiving the distance requirement de21 scribed in subparagraph (B)(i)(I) with respect 

22 to another facility located in the State that is 

23 seeking designation as a critical access hospital 

24 under this paragraph. 


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1 ‘‘(G) REDESIGNATION OF A RURAL EMER2 GENCY HOSPITAL AS A CRITICAL ACCESS HOS3 PITAL.—A rural emergency hospital that was 

4 previously designated as a critical access hos5 pital under this paragraph may elect to be re6 designated as a critical access hospital (in the 

7 same manner that the hospital was originally 

8 designated as a critical access hospital) at any 

9 time, subject to such conditions as the Sec10 retary may establish.’’. 

11 (c) STUDIES AND REPORTS.— 

12 (1) STUDIES.—The Secretary of Health & 

13 Human Services shall conduct 3 studies to evaluate 

14 the impact of rural emergency hospitals on the avail15 ability of health care and health outcomes in rural 

16 areas (as defined in section 1886(d)(2)(D) of the 

17 Social Security Act (42 U.S.C. 1395ww(d)(2)(D))). 

18 The Secretary shall conduct a study— 

19 (A) 2 years after the date of the enactment 

20 of this Act; 

21 (B) 5 years after the date of the enact22 ment of this Act; and 

23 (C) 10 years after the date of the enact24 ment of this Act. 


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1 (2) REPORTS.—Not later than 6 months after 

2 each date that the Secretary of Health & Human 

3 Services is required to conduct a study under para4 graph (1), the Secretary shall submit a report to 

5 Congress containing the results of each such study. 

6 (d) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to items and services furnished on 

8 or after the date that is 1 year after the date of the enact9 ment of this Act. 

10 SEC. 4. INCLUSION OF EMERGENCY MEDICINE AS HEALTH 

11 SERVICES UNDER THE NATIONAL HEALTH 

12 SERVICE CORPS. 

13 Section 331(a)(3)(D) of the Public Health Service 

14 Act (42 U.S.C. 254d(a)(3)(D)) is amended by inserting 

15 ‘‘, and includes emergency medicine provided by physi16 cians in a rural emergency hospital (as defined in section 

17 1861(jjj) of the Social Security Act)’’ before the period. 

18 SEC. 5. PERMITTING HOSPITALS WITH APPROVED RESI19 DENCY PROGRAMS IN EMERGENCY MEDI20 CINE TO INCLUDE TIME SPENT BY INTERNS 

21 AND RESIDENTS IN THE EMERGENCY DE22 PARTMENT OF A RURAL HOSPITAL IN FULL23 TIME EQUIVALENT COUNT. 

24 (a) INDIRECT MEDICAL EDUCATION.—Section 

25 1886(d)(5)(B)(iv) of the Social Security Act (42 U.S.C. 


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1 1395ww(d)(5)(B)(iv)) is amended by adding at the end 

2 the following new subclause: 

3 ‘‘(III) Effective for discharges occurring on or 

4 after October 1, 2017, all of the time spent in pa5 tient care activities in the emergency department of 

6 a rural hospital by interns and residents in emer7 gency medicine from a hospital with an approved 

8 medical residency training program (as defined in 

9 subsection (h)(5)(A)) in such specialty shall be in10 cluded in determining the number of full-time equiv11 alent interns and residents in such program if the 

12 hospital with such program incurs the costs of the 

13 stipends and fringe benefits of the interns or resi14 dents during the time the interns or residents spend 

15 in that rural hospital in accordance with subclause 

16 (II). In this subclause, the term ‘rural hospital’ 

17 means a hospital that is located in a rural area (as 

18 defined for purposes of paragraph (2)(D)).’’. 

19 (b) DIRECT MEDICAL EDUCATION.—Section 

20 1886(h)(4)(E) of the Social Security Act (42 U.S.C. 

21 1395(h)(4)(E)) is amended— 

22 (1) in clause (ii), by striking the period at the 

23 end and inserting ‘‘; and’’; 

24 (2) by inserting after clause (ii) the following 

25 new clause: 


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1 ‘‘(iii) effective for cost reporting peri2 ods beginning on or after July 1, 2017, all 

3 of the time so spent in the emergency de4 partment of a rural hospital by residents in 

5 emergency medicine from a hospital with 

6 an approved medical residency training 

7 program in such specialty shall be counted 

8 towards the determination of full-time 

9 equivalency in such program if the hospital 

10 with such program bears all, or substan11 tially all, of the costs of training such resi12 dents in the rural hospital. In this sub13 paragraph, the term ‘rural hospital’ means 

14 a hospital that is located in a rural area 

15 (as defined for purposes of subsection 

16 (d)(2)(D)).’’; and 

17 (3) by adding at the end the following new sen18 tence: ‘‘For purposes of this subparagraph, the 

19 emergency department of a rural hospital described 

20 in clause (iii) is a nonprovider setting.’’. 

Æ 


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