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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4378 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4378

To amend the Social Security Act to require the Secretary of Health and 
  Human Services to equalize the labor and non-labor portions of the 
 standardized amounts used to determine the amount of payment made to 
rural and urban hospitals under part A of the medicare program for the 
  operating costs of inpatient hospital services, to amend the Public 
   Health Service Act to improve the capacity of rural hospitals to 
            provide health services, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 1994

  Mr. Clinger (for himself, Mr. McHugh, Mr. Parker and Mr. Oberstar) 
   introduced the following bill; which was referred jointly to the 
 Committees on Ways and Means, Energy and Commerce, the Judiciary, and 
                         Government Operations

_______________________________________________________________________

                                 A BILL

 
To amend the Social Security Act to require the Secretary of Health and 
  Human Services to equalize the labor and non-labor portions of the 
 standardized amounts used to determine the amount of payment made to 
rural and urban hospitals under part A of the medicare program for the 
  operating costs of inpatient hospital services, to amend the Public 
   Health Service Act to improve the capacity of rural hospitals to 
            provide health services, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rural Hospital 
Survival Act of 1994''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
       TITLE I--PROGRAMS OF HEALTH CARE FINANCING ADMINISTRATION

                      Subtitle A--Medicare Program

Sec. 101. Equalization of labor and non-labor portions of standardized 
                            amounts for hospitals in rural and other 
                            urban areas.
Sec. 102. Sense of Congress regarding disproportionate impact of 
                            reductions in medicare reimbursements on 
                            rural providers.
                       Subtitle B--Other Programs

Sec. 111. Extension of authorization of appropriations for rural health 
                            transition grants.
              TITLE II--PROGRAMS OF PUBLIC HEALTH SERVICE

Sec. 201. Demonstration grants for telecommunications to improve health 
                            care in rural areas.
Sec. 202. Rural health outreach grant program.
                    TITLE III--ANTITRUST PROVISIONS

Sec. 301. Antitrust exemption applicable to hospitals.
    TITLE IV--COMMISSION ON REDUCING THE BURDEN OF REGULATIONS AND 
                  PAPERWORK ON SMALL RURAL HOSPITALS.

Sec. 401. Establishment.
Sec. 402. Duties of commission.
Sec. 403. Membership.
Sec. 404. Director and staff of commission; experts and consultants.
Sec. 405. Powers of commission.
Sec. 406. Termination.
Sec. 407. Authorization of appropriations.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) For the 27 percent of Americans living in rural areas, 
        certain geographic, demographic, and epidemiologic 
        characteristics can reduce the availability and quality of 
        medical care.
            (2) Rough terrain, bad weather conditions, deteriorating 
        transportation infrastructure, long distances between medical 
        facilities, and the lack of public transportation systems all 
        serve as geographic barriers to adequate health care.
            (3) Rural populations tend to be older and have lower 
        average per capita incomes, resulting in higher concentrations 
        of medicare, medicaid, and uninsured patients.
            (4) In rural regions, hospitals are the primary sources of 
        medical care and serve as hubs of the local health care 
        delivery systems.
            (5) Rural hospitals generally have fewer beds, fewer 
        admissions, lower occupancy rates, and higher per patient, per 
        day expenses than urban hospitals.
            (6) The medicare program continues to reimburse rural 
        hospitals at lower rates than urban hospitals.
            (7) Because of the high proportion of medicare, medicaid, 
        and uninsured individuals in rural areas, rural hospitals rely 
        heavily on Federal funds in the form of medicare and medicaid 
        reimbursements for their survival.
            (8) When the Congress cuts or freezes medicare 
        reimbursement, it reduces the primary source of revenues for 
        rural hospitals.
            (9) The volume of uncompensated care that rural hospitals 
        provide continues to rise and places serious financial burdens 
        on the hospitals.
            (10) Almost one third of all rural hospitals have negative 
        operating expenses.
            (11) Almost 400 rural hospitals have been closed since 
        1980.
            (12) Besides providing medical care, rural hospitals are 
        integral parts of local economies because they are usually one 
        of the largest employers in the area and play an important role 
        in attracting new businesses and residents to the area.
            (13) Any health care reform package adopted by the Congress 
        must include provisions that improve the financial condition 
        and ensure the survival of our small, rural hospitals.

       TITLE I--PROGRAMS OF HEALTH CARE FINANCING ADMINISTRATION

                      Subtitle A--Medicare Program

SEC. 101. EQUALIZATION OF LABOR AND NON-LABOR PORTIONS OF STANDARDIZED 
              AMOUNTS FOR HOSPITALS IN RURAL AND OTHER URBAN AREAS.

    (a) In General.--Section 1886(d)(3)(A)(iii) of the Social Security 
Act (42 U.S.C. 1395ww(d)(3)(A)(iii)) is amended by striking ``average 
standardized amount'' the first place it appears and all that follows 
and inserting the following: ``portion of the average standardized 
amount attributable to wages and wage-related costs and the portion of 
such amount not attributable to wages and wage-related costs for 
hospitals located in a rural area shall be equal to such portions of 
such amount for hospitals located in an other urban area.''.
    (b) Limitation on Scope of Costs Considered Attributable to Wages 
and Wage-Related Costs.--The first sentence of section 1886(d)(3)(E) of 
such Act (42 U.S.C. 1395ww(d)(3)(E)) by striking ``costs,'' and 
inserting ``costs (taking into account only costs attributable to wages 
and salaries, employee benefits, and professional fees),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to discharges occurring on or after October 1, 1994.

SEC. 102. SENSE OF CONGRESS REGARDING DISPROPORTIONATE IMPACT OF 
              REDUCTIONS IN MEDICARE REIMBURSEMENTS ON RURAL PROVIDERS.

    (a) Finding.--Congress finds the following:
            (1) The proportion of the revenues of rural hospitals, 
        physicians, and other providers of health care services 
        providers that is attributable to payments under the medicare 
        program is significantly higher than the proportion of the 
        revenues of urban hospitals, physicians, and other providers 
        that is attributable to such payments, because a higher 
        proportion of the residents of rural areas are age 65 or older.
            (2) As a result, any reductions in the payments made to 
        hospitals, physicians, and other providers under the medicare 
        program disproportionately affects providers in rural areas.
    (b) Sense of Congress.--It is the sense of Congress that any 
reductions in payments made to providers under the medicare program 
should be adjusted so as to reduce the disproportionate impact such 
reductions have on providers in rural areas.

                       Subtitle B--Other Programs

SEC. 111. EXTENSION OF AUTHORIZATION OF APPROPRIATIONS FOR RURAL HEALTH 
              TRANSITION GRANTS.

    Section 4005(e)(9) of the Omnibus Budget Reconciliation Act of 1987 
is amended--
            (1) by striking ``1989 and'' and inserting ``1989,''; and
            (2) by striking ``1992'' and inserting ``1992 and 
        $50,000,000 for each of fiscal years 1993 through 1997''.

              TITLE II--PROGRAMS OF PUBLIC HEALTH SERVICE

SEC. 201. DEMONSTRATION GRANTS FOR TELECOMMUNICATIONS TO IMPROVE HEALTH 
              CARE IN RURAL AREAS.

    Part D of title III of the Public Health Service Act (42 U.S.C. 
254b et seq.) is amended by adding at the end the following section:

 ``use of telecommunications for improving health of rural populations

    ``Sec. 340D. (a) In General.--The Secretary may make grants to 
public and nonprofit private entities to carry out demonstration 
projects for the purpose of improving health services in rural areas 
through using telecommunications to make available to the health 
professionals of such areas medical advice and knowledge, and the use 
of medical technologies, that otherwise are not significantly available 
to the professionals.
    ``(b) Preferences in Making Grants.--In making grants under 
subsection (a), the Secretary shall give preference to an otherwise 
qualified applicant if, in the demonstration project under such 
subsection, the number of health facilities and health professionals 
with respect to which the purpose described in such subsection is to be 
carried out constitutes a significant number of the health facilities 
and health professionals of the rural area involved.
    ``(c) Agreements Among Participating Health Professionals.--The 
Secretary may make a grant under subsection (a) only if the health 
professionals with respect to which the purpose described in such 
subsection is to be carried out have entered into an agreement 
governing the use by the professionals of the telecommunications 
involved.
    ``(d) Application for Grant.--The Secretary may make a grant under 
subsection (a) only if an application for the grant is submitted to the 
Secretary and the application is in such form, is made in such manner, 
and contains such agreements, assurances, and information as the 
Secretary determines to be necessary to carry out this section.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 1995 through 1997.''.

SEC. 202. RURAL HEALTH OUTREACH GRANT PROGRAM.

    Part D of title III of the Public Health Service Act, as amended by 
section 201 of this Act, is amended by adding at the end the following 
section:

        ``access of rural populations to primary health services

    ``Sec. 340E. (a) In General.--The Secretary, acting through the 
Director of the Office of Rural Health Policy, may make grants to 
public and nonprofit private health care entities to carry out 
demonstration projects for the purposes of--
            ``(1) increasing the capacity of the residents of rural 
        areas to utilize primary health services (and related health 
        and social services) available under Federal, State, and local 
        programs through--
                    ``(A) informing the residents of the existence of 
                such programs;
                    ``(B) assisting the residents in establishing 
                eligibility under the programs;
                    ``(C) providing transportation services for the 
                residents; and
                    ``(D) such other services as the Secretary 
                determines to be appropriate; and
            ``(2) providing primary health services to such residents, 
        with priority given to the provision of preventive health 
        services.
    ``(b) Preferences in Making Grants.--In making grants under 
subsection (a), the Secretary shall give preference to an otherwise 
qualified applicant if the applicant has, with 2 or more other health 
care entities, entered into an agreement under which--
            ``(1) the participants in the agreement collaborate to 
        carry out the demonstration project involved; and
            ``(2) the participants will make significant efforts to 
        coordinate the delivery of primary health services in the rural 
        area involved, and to coordinate the provision of such services 
        with related health and social services in the area.
    ``(c) Identification of Need for Services.--The Secretary may make 
a grant under subsection (a) only if the applicant for the grant has 
identified the need in the rural area involved for the services to be 
provided under the grant.
    ``(d) Application for Grant.--The Secretary may make a grant under 
subsection (a) only if an application for the grant is submitted to the 
Secretary and the application is in such form, is made in such manner, 
and contains such agreements, assurances, and information as the 
Secretary determines to be necessary to carry out this section.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there is authorized to be appropriated $50,000,000 
for each of the fiscal years 1995 through 1997.''.

                    TITLE III--ANTITRUST PROVISIONS

SEC. 301. ANTITRUST EXEMPTION APPLICABLE TO HOSPITALS.

    (a) Exemption.--The antitrust laws shall not apply with respect 
to--
            (1) the combination of, or the attempt to combine, 2 or 
        more hospitals,
            (2) a contract entered into solely by 2 or more hospitals 
        to allocate hospital services, or
            (3) the attempt by only 2 or more hospitals to enter into a 
        contract to allocate hospital services,
if each of such hospitals satisfies all of the requirements of 
subsection (b) at the time such hospitals engage in the conduct 
described in paragraph (1), (2), or (3), as the case may be.
    (b) Requirements.--The requirements referred to in subsection (a) 
are as follows:
            (1) The hospital is located outside of a city, or in a city 
        that has less than 25,000 inhabitants, as determined in 
        accordance with the most recent data available from the Bureau 
        of the Census.
            (2) In the most recently concluded calendar year, the 
        hospital received more than 40 percent of its gross revenue 
        from payments made under Federal programs.
            (3) There is in effect with respect to the hospital a 
        certificate issued by the Health Care Financing Administration 
        specifying that such Administration has determined that Federal 
        expenditures would be reduced, and consumer costs would not 
        increase, if the 2 or more hospitals that request such 
        certificate merge, or allocate the hospital services specified 
        in such request, as the case may be.
    (c) Definition.--For purposes of this section, the term ``antitrust 
laws'' has the meaning given such term in subsection (a) of the first 
section of the Clayton Act (15 U.S.C. 12), except that such term 
includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) 
to the extent that such section 5 applies with respect to unfair 
methods of competition.

    TITLE IV--COMMISSION ON REDUCING THE BURDEN OF REGULATIONS AND 
                  PAPERWORK ON SMALL RURAL HOSPITALS.

SEC. 401. ESTABLISHMENT.

    There is hereby established the Advisory Commission on Reducing the 
Burden of Regulations and Paperwork on Small Rural Hospitals (hereafter 
referred to as the ``Commission'').

SEC. 402. DUTIES OF COMMISSION.

    (a) Analysis of Impact of Regulations and Paperwork.--The 
Commission shall analyze the impact of Federal, State, and local 
government regulations and paperwork requirements on small rural 
hospitals.
    (b) Reports and Recommendations.--
            (1) Interim reports.--During the first 2 years after the 
        initial appointment of its members, the Commission shall--
                    (A) submit reports to the Secretary of Health and 
                Human Services (hereafter referred to as the 
                ``Secretary'') on its activities under subsection (a) 
                at such times as the Secretary may require; and
                    (B) submit to the Secretary and Congress 
                recommendations for regulatory and legislative 
                proposals to reduce the burden of government 
                regulations and paperwork requirements on small rural 
                hospitals.
            (2) Final report.--Not later than January 1, 1998, the 
        Commission shall submit a final report to the Secretary and 
        Congress on its activities under this title, and shall include 
        in the report its final recommendations for proposals described 
        in paragraph (1)(B).

SEC. 403. MEMBERSHIP.

    (a) Number and Appointment.--
            (1) In general.--The Commission shall be composed of 8 
        members appointed by the Secretary from individuals who possess 
        extensive leadership experience in and knowledge of State and 
        local government, intergovernmental relations, and the 
        administration and operation of small rural hospitals.
            (2) Limitation.--An individual who is a Member or employee 
        of the Congress may not be appointed or serve as a member of 
        the Commission.
    (b) Waiver of Limitation on Executive Schedule Positions.--
Appointments may be made under this section without regard to section 
5311(b) of title 5, United States Code.
    (c) Political Affiliation.--Not more than 4 members of the 
Commission may be of the same political party.
    (d) Terms.--
            (1) In general.--Each member of the Commission shall be 
        appointed for the life of the Commission.
            (2) Vacancies.--A vacancy in the Commission shall be filled 
        in the manner in which the original appointment was made.
    (e) Basic Pay.--
            (1) Rates of pay.--Members of the Commission shall serve 
        without pay.
            (2) Prohibition of compensation of federal employees.--
        Members of the Commission who are full-time officers or 
        employees of the United States may not receive additional pay, 
        allowances, or benefits by reason of their service on the 
        Commission.
    (f) Travel Expenses.--Each member of the Commission shall receive 
travel expenses, including per diem in lieu of subsistence, in 
accordance with sections 5702 and 5703 of title 5, United States Code.
    (g) Chairperson.--The President shall designate a member of the 
Commission as Chairperson at the time of the appointment of that 
member.
    (h) Meetings.--
            (1) In general.--Subject to paragraph (2), the Commission 
        shall meet at the call of the Chairperson or a majority of its 
        members.
            (2) First meeting.--The Commission shall convene its first 
        meeting by not later than 45 days after the date of the 
        completion of appointment of the member of the Commission.
            (3) Quorum.--A majority of members of the Commission shall 
        constitute a quorum but a lesser number may hold hearings.

SEC. 404. DIRECTOR AND STAFF OF COMMISSION; EXPERTS AND CONSULTANTS.

    (a) Director.--The Commission shall, without regard to section 
5311(b) of title 5, United States Code, have a Director who shall be 
appointed by the Commission. The Director shall be paid at the rate of 
basic pay payable for level IV of the Executive Schedule.
    (b) Staff.--With the approval of the Commission, and without regard 
to section 5311(b) of title 5, United States Code, the Director may 
appoint and fix the pay of such staff as is sufficient to enable the 
Commission to carry out its duties.
    (c) Applicability of Certain Civil Service Laws.--The Director and 
staff of the Commission may be appointed without regard to the 
provisions of title 5, United States Code, governing appointments in 
the competitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of that title 
relating to classification and General Schedule pay rates, except that 
an individual so appointed may not receive pay in excess of the annual 
rate of basic pay payable for GS-18 of the General Schedule.
    (d) Experts and Consultants.--The Commission may procure temporary 
and intermittent services of experts or consultants under section 
3109(b) of title 5, United States Code.
    (e) Staff of Federal Agencies.--Upon request of the Director, the 
head of any Federal department or agency may detail, on a reimbursable 
basis, any of the personnel of that department or agency to the 
Commission to assist it in carrying out its duties under this title.

SEC. 405. POWERS OF COMMISSION.

    (a) Hearings and Sessions.--The Commission may, for the purpose of 
carrying out this title, hold hearings, sit and act at times and 
places, take testimony, and receive evidence as the Commission 
considers appropriate.
    (b) Powers of Members and Agents.--Any member or agent of the 
Commission may, if authorized by the Commission, take any action which 
the Commission is authorized to take by this section.
    (c) Obtaining Official Data.--The Commission may secure directly 
from any department or agency of the United States information 
necessary to enable it to carry out this title. Upon request of the 
Chairperson of the Commission, the head of that department or agency 
shall furnish that information to the Commission.
    (d) Mails.--The Commission may use the United States mails in the 
same manner and under the same conditions as other departments and 
agencies of the United States.
    (e) Administrative Support Services.--Upon the request of the 
Commission, the Administrator of General Services shall provide to the 
Commission, on a reimbursable basis, the administrative support 
services necessary for the Commission to carry out its duties under 
this title.
    (f) Contract Authority.--The Commission may, subject to 
appropriations, contract with and compensate government and private 
agencies or persons for property and services used to carry out its 
duties under this title.

SEC. 406. TERMINATION.

    The Commission shall terminate 90 days after submitting its final 
report pursuant to section 402(b)(2).

SEC. 407. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Commission such sums 
as may be necessary for the Commission to carry out its duties under 
this title.

                                 <all>

HR 4378 IH----2
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