I

103D CONGRESS

2D SESSION H. R. 4690

To provide assistance for the establishment of community rural health networks in chronically underserved areas, to provide incentives for providers

of health care services to furnish services in such areas, to assist providers of emergency medical services in such areas, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 30, 1994

Mr. BEREUTER introduced the following bill; which was referred jointly to the

Committees on Energy and Commerce, Ways and Means, Education and

Labor, and the Judiciary

A BILL

To provide assistance for the establishment of community

rural health networks in chronically underserved areas,

to provide incentives for providers of health care services

to furnish services in such areas, to assist providers

of emergency medical services in such areas, and for

other purposes.

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 ‘‘Rural Health Care Improvement Act of 1994’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—GRANTS TO ENCOURAGE ESTABLISHMENT OF

COMMUNITY RURAL HEALTH NETWORKS

Sec. 101. Assistance for implementation of access plans for chronically underserved areas.

Sec. 102. Technical assistance grants for networks.

Sec. 103. Development grants for networks.

Sec. 104. Definitions.

TITLE II—INCENTIVES FOR HEALTH PROFESSIONALS TO

PRACTICE IN RURAL AREAS

Subtitle A—National Health Service Corps Program

Sec. 201. National health service corps loan repayments excluded from gross income.

Sec. 202. Modification in criteria for designation as health professional shortage area.

Sec. 203. Other provisions regarding national health service corps.

Subtitle B—Incentives Under Other Programs

Sec. 211. Extension of additional payment under medicare for physicians’ services furnished in former shortage areas.

Sec. 212. Refinement of geographic adjustment factor for medicare physicians’

services.

Sec. 213. Extension of student loan deferments.

Sec. 214. Development of model State scope of practice law.

TITLE III—ASSISTANCE FOR INSTITUTIONAL PROVIDERS

Subtitle A—Emergency Medical Systems

Sec. 301. Emergency medical services.

Sec. 302. Grants to states regarding aircraft for transporting rural victims of

medical emergencies.

Subtitle B—Assistance to Rural Providers Under Medicare

PART 1—MEDICARE ESSENTIAL ACCESS COMMUNITY HOSPITALS

Sec. 311. Amendments to essential access community hospital (EACH) program under medicare.

PART 2—ESTABLISHMENT OF RURAL EMERGENCY ACCESS CARE HOSPITALS

Sec. 321. Rural emergency access care hospitals described.

Sec. 322. Coverage of and payment for services.

Sec. 323. Effective date.

Subtitle D—Demonstration Projects to Encourage Primary

Care and Rural-Based Graduate Medical Education
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Sec. 331. State and consortium demonstration projects.

Sec. 332. Goals for projects.

Sec. 333. Definitions.

TITLE IV—HOSPITAL ANTITRUST FAIRNESS

Sec. 401. Antitrust exemption.

Sec. 402. Requirements.

Sec. 403. Definition.

1 TITLE I—GRANTS TO ENCOUR2 AGE ESTABLISHMENT OF

3 COMMUNITY RURAL HEALTH

4 NETWORKS

5 SEC. 101. ASSISTANCE FOR DEVELOPMENT OF ACCESS

6 PLANS FOR CHRONICALLY UNDERSERVED

7 AREAS.

8 (a) AVAILABILITY OF FINANCIAL ASSISTANCE TO IM9 PLEMENT ACTION PLANS TO INCREASE ACCESS.—

10 (1) IN GENERAL.—The Secretary shall provide

11 grants (in amounts determined in accordance with

12 paragraph (3)) over a 3-year period to an eligible

13 State for the development of plans to increase access

14 to health care services during such period for resi15 dents of areas in the State that are designated as

16 chronically underserved areas in accordance with

17 subsection (b).

18 (2) ELIGIBILITY REQUIREMENTS.—A State is

19 eligible to receive grants under this section if the

20 State submits to the Secretary (at such time and in

21 such form as the Secretary may require) assurances
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1 that the State has developed (or is in the process of

2 developing) a plan to increase the access of residents

3 of a chronically underserved area to health care serv4 ices that meets the requirements of subsection (c),

5 together with such other information and assurances

6 as the Secretary may require.

7 (3) AMOUNT OF ASSISTANCE.—

8 (A) IN GENERAL.—Subject to subpara9 graph (B), the amount of assistance provided to

10 a State under this subsection with respect to

11 any plan during a 3-year period shall be equal

12 to—

13 (i) for the first year of the period, an

14 amount equal to 100% of the amounts ex15 pended by the State during the year to im16 plement the plan described in paragraph

17 (1) (as reported to the Secretary in accord18 ance with such requirements as the Sec19 retary may impose);

20 (ii) for the second year of the period,

21 an amount equal to 50% of the amounts

22 expended by the State during the year to

23 implement the plan; and

24 (iii) for the third year of the period,

25 an amount equal to 33% of the amounts
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1 expended by the State during the year to

2 implement the plan.

3 (B) AGGREGATE PER PLAN LIMIT.—The

4 amount of assistance provided to a State under

5 this subsection with respect to any plan may

6 not exceed $100,000 during any year of the 3-

7 year period for which the State receives assist8 ance.

9 (b) DESIGNATION OF AREAS.—

10 (1) DESIGNATION BY GOVERNOR.—In accord11 ance with the guidelines developed under paragraph

12 (2), the Governor of a State may designate an area

13 in the State as a chronically underserved area for

14 purposes of this section upon the request of a local

15 official of the area or upon the Governor’s initiative.

16 (2) GUIDELINES FOR DESIGNATION.—

17 (A) DEVELOPMENT BY SECRETARY.—Not

18 later than 1 year after the date of the enact19 ment of this Act, the Secretary shall develop

20 guidelines for the designation of areas as chron21 ically underserved areas under this section.

22 (B) FACTORS CONSIDERED IN DEVELOP23 MENT OF GUIDELINES.—In developing guide24 lines under paragraph (1), the Secretary shall

25 consider the following factors:
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1 (i) Whether the area (or a significant

2 portion of the area)—

3 (I) is designated as a health pro4 fessional shortage area (under section

5 332(a) of the Public Health Service

6 Act), or meets the criteria for des7 ignation as such an area; or

8 (II) was previously designated as

9 such an area or previously met such

10 criteria for an extended period prior

11 to the designation of the area under

12 this section (in accordance with cri13 teria established by the Secretary).

14 (ii) The availability and adequacy of

15 health care providers and facilities for resi16 dents of the area.

17 (iii) The extent to which the availabil18 ity of assistance under other Federal and

19 State programs has failed to alleviate the

20 lack of access to health care services for

21 residents of the area.

22 (iv) The percentage of residents of the

23 area whose income is at or below the pov24 erty level.
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1 (v) The percentage of residents of the

2 area who are age 65 or older.

3 (vi) The existence of cultural or geo4 graphic barriers to access to health care

5 services in the area, including weather con6 ditions.

7 (3) REVIEW BY SECRETARY.—No designation

8 under paragraph (1) shall take effect under this sec9 tion unless the Secretary—

10 (A) has been notified of the proposed des11 ignation; and

12 (B) has not, within 60 days after the date

13 of receipt of the notice, disapproved the des14 ignation.

15 (4) PERIOD OF DESIGNATION.—A designation

16 under this section shall be effective during a period

17 specified by the Governor of not longer than 3 years.

18 The Governor may extend the designation for addi19 tional 3-year periods, except that a State may not

20 receive assistance under subsection (a)(3) for

21 amounts expended during any such additional peri22 ods.

23 (c) REQUIREMENTS FOR STATE ACCESS PLANS.—A

24 State plan to increase the access of residents of chronically

25 underserved areas to health care services meets the re-
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1 quirements of this section if the Secretary finds that the

2 plan was developed with the participation of health care

3 providers and facilities and residents of the area that is

4 the subject of the plan, together with such other require5 ments as the Secretary may impose.

6 (d) AUTHORIZATION OF APPROPRIATIONS.—There

7 are authorized to be appropriated for assistance under this

8 section $10,000,000 for each of the first 3 fiscal years

9 beginning after the date on which the Secretary develops

10 guidelines for the designation of areas as chronically un11 derserved areas under subsection (b)(2).

12 SEC. 102. TECHNICAL ASSISTANCE GRANTS FOR NET13 WORKS.

14 (a) IN GENERAL.—The Secretary shall make funds

15 available under this section to provide technical assistance

16 (including information regarding eligibility for other Fed17 eral programs) and advice for entities described in sub18 section (b) seeking to establish or enhance a community

19 rural health network in an underserved rural area.

20 (b) ENTITIES ELIGIBLE TO RECEIVE FUNDS.—The

21 following entities are eligible to receive funds for technical

22 assistance under this section:

23 (1) An entity receiving a grant under section

24 103.

25 (2) A State or unit of local government.
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1 (3) An entity providing health care services (in2 cluding health professional education services) in the

3 area involved.

4 (c) USE OF FUNDS.—

5 (1) IN GENERAL.—Funds made available under

6 this section may be used—

7 (A) for planning a community health net8 work and the submission of the plan for the

9 network to the Secretary under section 103(c)

10 (subject to the limitation described in para11 graph (2));

12 (B) to provide assistance in conducting

13 community-based needs and prioritization, iden14 tifying existing regional health resources, and

15 developing networks, utilizing existing local pro16 viders and facilities where appropriate;

17 (C) to provide advice on obtaining the

18 proper balance of primary and secondary facili19 ties for the population served by the network;

20 (D) to provide assistance in coordinating

21 arrangements for tertiary care;

22 (E) to provide assistance in recruitment

23 and retention of health care professionals;

24 (F) to provide assistance in coordinating

25 the delivery of emergency services with the pro-
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1 vision of other health care services in the area

2 served by the network;

3 (G) to provide assistance in coordinating

4 arrangements for mental health and substance

5 abuse treatment services; and

6 (H) to provide information regarding the

7 area or proposed network’s eligibility for Fed8 eral and State assistance for health care-related

9 activities, together with information on funds

10 available through private sources.

11 (2) LIMITATION ON AMOUNT AVAILABLE FOR

12 DEVELOPMENT OF NETWORK.—The amount of fi13 nancial assistance available for activities described in

14 paragraph (1) may not exceed $50,000 and may not

15 be available for a period of time exceeding 1 year.

16 (d) USE OF RURAL HEALTH OFFICES.—In carrying

17 out this section with respect to entities in rural areas, the

18 Secretary shall make funds available through—

19 (1) not more than 10 regional centers acting as

20 clearinghouses for the distribution of such funds;

21 (2) State Offices of Rural Health,

22 or any combination of such centers and Offices.

23 (e) AUTHORIZATION OF APPROPRIATIONS.—There

24 are authorized to be appropriated $10,000,000 for each

25 of fiscal years 1995 through 1999 to carry out this sec-
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1 tion. Amounts appropriated under this section shall be

2 available until expended.

3 SEC. 103. DEVELOPMENT GRANTS FOR NETWORKS.

4 (a) IN GENERAL.—The Secretary shall provide finan5 cial assistance to eligible entities in order to provide for

6 the development and implementation of community rural

7 health networks.

8 (b) ELIGIBLE ENTITIES.—

9 (1) IN GENERAL.—An entity is eligible to re10 ceive financial assistance under this section only if

11 the entity—

12 (A) is (i) based in a rural area or (ii) is

13 described in paragraph (2), (3), or (4) of sec14 tion 102(b),

15 (B) is undertaking to develop and imple16 ment a community rural health network in an

17 underserved rural area (or underserved rural

18 areas) with the active participation of at least

19 3 health care providers or facilities in the area,

20 and

21 (C) has consulted with the local govern22 ments of the area to be served by the network

23 and with individuals who reside in the area.

24 (2) COORDINATION WITH PROVIDERS OUTSIDE

25 OF AREA PERMITTED.—Nothing in this section shall
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1 be construed as preventing an entity that coordi2 nates the delivery of services in an underserved rural

3 area with an entity outside the area from qualifying

4 for financial assistance under this section, or as pre5 venting an entity consisting of a consortia of mem6 bers located in adjoining States from qualifying for

7 such assistance.

8 (3) PERMITTING ENTITIES NOT RECEIVING

9 FUNDING FOR DEVELOPMENT OF PLAN TO RECEIVE

10 FUNDING FOR IMPLEMENTATION.—An entity that is

11 eligible to receive financial assistance under this sec12 tion may receive assistance to carry out activities de13 scribed in subsection (c)(1)(B) notwithstanding that

14 the entity does not receive assistance to carry out

15 activities described in subsection (c)(1)(A).

16 (c) USE OF FUNDS.—

17 (1) IN GENERAL.—Financial assistance made

18 available to eligible entities under this section may

19 be used only—

20 (A) for the development of a community

21 health network and the submission of the plan

22 for the network to the Secretary; and

23 (B) after the Secretary approves the plan

24 for the network, for activities to implement the

25 network, including (but not limited to)—
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1 (i) establishing information systems,

2 including telecommunications,

3 (ii) recruiting health care providers,

4 (iii) providing services to enable indi5 viduals to have access to health care serv6 ices, including transportation and language

7 interpretation services (including interpre8 tation services for the hearing-impaired),

9 and

10 (iv) establishing and operating a com11 munity health advisor program described

12 in paragraph (2).

13 (2) COMMUNITY HEALTH ADVISOR PROGRAM.—

14 (A) PROGRAM DESCRIBED.—In paragraph

15 (1), a ‘‘community health advisor program’’ is

16 a program under which community health advi17 sors carry out the following activities:

18 (i) Collaborating efforts with health

19 care providers and related entities to facili20 tate the provision of health services and

21 health-related social services.

22 (ii) Providing public education on

23 health promotion and disease prevention

24 and efforts to facilitate the use of available
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1 health services and health-related social

2 services.

3 (iii) Providing health-related counsel4 ing.

5 (iv) Making referrals for available

6 health services and health-related social

7 services.

8 (v) Improving the ability of individ9 uals to use health services and health-relat10 ed social services under Federal, State,

11 and local programs through assisting indi12 viduals in establishing eligibility under the

13 programs.

14 (vi) Providing outreach services to in15 form the community of the availability of

16 the services provided under the program.

17 (B) COMMUNITY HEALTH ADVISOR DE18 FINED.—In subparagraph (A), the term ‘‘com19 munity health advisor’’ means, with respect to

20 a community health advisor program, an indi21 vidual—

22 (i) who has demonstrated the capacity

23 to carry out one or more of the activities

24 carried out under the program; and
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1 (ii) who, for not less than one year,

2 has been a resident of the community in

3 which the program is to be operated.

4 (3) LIMITATIONS ON ACTIVITIES FUNDED.—Fi5 nancial assistance made available under this section

6 may not be used for any of the following:

7 (A) For a telecommunications system un8 less such system is coordinated with, and does

9 not duplicate, a system existing in the area.

10 (B) For construction or remodeling of

11 health care facilities.

12 (4) LIMITATION ON AMOUNT AVAILABLE FOR

13 DEVELOPMENT OF NETWORK.—The amount of fi14 nancial assistance available for activities described in

15 paragraph (1)(A) may not exceed $50,000 and may

16 not be made available for a period of time exceeding

17 1 year.

18 (d) APPLICATION.—

19 (1) IN GENERAL.—No financial assistance shall

20 be provided under this section to an entity unless

21 the entity has submitted to the Secretary, in a time

22 and manner specified by the Secretary, and had ap23 proved by the Secretary an application.

24 (2) INFORMATION TO BE INCLUDED.—Each

25 such application shall include—
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1 (A) a description of the community rural

2 health network, including service area and ca3 pacity, and

4 (B) a description of how the proposed net5 work will utilize existing health care facilities in

6 a manner that avoids unnecessary duplication.

7 (e) AUTHORIZATION OF APPROPRIATIONS.—

8 (1) IN GENERAL.—There are authorized to be

9 appropriated $100,000,000 for each of fiscal years

10 1995 through 1999 to carry out this section.

11 Amounts appropriated under this section shall be

12 available until expended.

13 (2) INTEGRATION OF OTHER AUTHORIZA14 TIONS.—In order to provide for the authorization of

15 appropriations under paragraph (1), notwithstanding

16 any other provision of law, no funds are authorized

17 to be appropriated to carry out the following pro18 grams in fiscal years after fiscal year 1994:

19 (A) The rural health transition grant pro20 gram (under section 4005(e) of the Omnibus

21 Budget Reconciliation Act of 1987).

22 (B) The rural health outreach program

23 (for which appropriations were annually pro24 vided under the Departments of Labor, Health
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1 and Human Services, and Education, and Re2 lated Agencies Appropriation Acts).

3 (3) ANNUAL LIMIT ON ASSISTANCE TO GRANT4 EE.—The amount of financial assistance provided to

5 an entity under this section during a year may not

6 exceed $250,000.

7 SEC. 104. DEFINITIONS.

8 For purposes of this title:

9 (1) COMMUNITY RURAL HEALTH NETWORK.—

10 The term ‘‘community rural health network’’ means

11 a formal cooperative arrangement between partici12 pating hospitals, physicians, and other health care

13 providers which—

14 (A) is located in an underserved rural

15 area;

16 (B) furnishes health care services to indi17 viduals residing in the area; and

18 (C) is governed by a board of directors se19 lected by participating health care providers

20 and residents of the area.

21 (2) RURAL AREA.—The term ‘‘rural area’’ has

22 the meaning given such term in section

23 1886(d)(2)(D) of the Social Security Act.

24 (3) SECRETARY.—The term ‘‘Secretary’’ means

25 the Secretary of Health and Human Services.
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1 (4) STATE.—The term ‘‘State’’ means each of

2 the several States, the District of Columbia, Puerto

3 Rico, the Virgin Islands, Guam, the Northern Mari4 ana Islands, and American Samoa.

5 (5) UNDERSERVED RURAL AREA.—The term

6 ‘‘underserved rural area’’ means a rural area des7 ignated—

8 (A) as a health professional shortage area

9 under section 332(a) of the Public Health Serv10 ice Act; or

11 (B) as a chronically underserved area

12 under section 101.

13 TITLE II—INCENTIVES FOR

14 HEALTH PROFESSIONALS TO

15 PRACTICE IN RURAL AREAS

16 Subtitle A—National Health

17 Service Corps Program

18 SEC. 201. NATIONAL HEALTH SERVICE CORPS LOAN REPAY19 MENTS EXCLUDED FROM GROSS INCOME.

20 (a) IN GENERAL.—Part III of subchapter B of chap21 ter 1 of the Internal Revenue Code of 1986 (relating to

22 items specifically excluded from gross income) is amended

23 by redesignating section 137 as section 138 and by insert24 ing after section 136 the following new section:
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1 ‘‘SEC. 137. NATIONAL HEALTH SERVICE CORPS LOAN RE2 PAYMENTS.

3 ‘‘(a) GENERAL RULE.—Gross income shall not in4 clude any qualified loan repayment.

5 ‘‘(b) QUALIFIED LOAN REPAYMENT.—For purposes

6 of this section, the term ‘qualified loan repayment’ means

7 any payment made on behalf of the taxpayer by the Na8 tional Health Service Corps Loan Repayment Program

9 under section 338B(g) of the Public Health Service Act.’’.

10 (b) CONFORMING AMENDMENT.—Paragraph (3) of

11 section 338B(g) of the Public Health Service Act is

12 amended by striking ‘‘Federal, State, or local’’ and insert13 ing ‘‘State or local’’.

14 (c) CLERICAL AMENDMENT.—The table of sections

15 for part III of subchapter B of chapter 1 of the Internal

16 Revenue Code of 1986 is amended by striking the item

17 relating to section 137 and inserting the following:

‘‘Sec. 137. National Health Service Corps loan repayments.

‘‘Sec. 138. Cross references to other Acts.’’.

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

19 this section shall apply to payments made under section

20 338B(g) of the Public Health Service Act after the date

21 of the enactment of this Act.
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1 SEC. 202. MODIFICATION IN CRITERIA FOR DESIGNATION

2 AS HEALTH PROFESSIONAL SHORTAGE AREA.

3 (a) CONSIDERATIONS REGARDING MEDICARE AND

4 MEDICAID PROGRAMS AS MEANS OF PAYMENT.—Section

5 332(b) of the Public Health Service Act (42 U.S.C.

6 254e(b)) is amended by adding at the end the following

7 paragraph:

8 ‘‘(4) With respect to determining the need for

9 health services through the indicators of need under

10 paragraphs (1) and (2), consideration of the follow11 ing:

12 ‘‘(A) The number of individuals in the pop13 ulation involved whose means of payment for

14 health services is the program under title XVIII

15 of the Social Security Act.

16 ‘‘(B) The number of individuals in the

17 population whose means of payment for health

18 services is the program under title XIX of such

19 Act.

20 ‘‘(C) The number of individuals in the pop21 ulation who are uninsured with respect to

22 health policies or plans.

23 ‘‘(D) The percentage of the population

24 constituted by the aggregate number of individ25 uals under subparagraphs (A) through (C).
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1 ‘‘(E) In the case of community-based phy2 sicians who provide primary health services and

3 who are accepting additional patients whose

4 means of payment is through the program es5 tablished in title XVIII or XIX of the Social

6 Security Act, the percentage constituted by the

7 ratio of the number of such physicians to the

8 number of individuals in the population.’’.

9 (b) RELEVANCE OF TRAVEL TIMES WITHIN FRON10 TIER AREAS.—Section 332(a) of the Public Health Service

11 Act (42 U.S.C. 245e(a)) is amended by adding at the end

12 the following new paragraph:

13 ‘‘(4) With respect to meeting the criteria under

14 paragraph (1)(A) for an area to be designated as a

15 health professional shortage area, the Secretary

16 shall, in the case of a frontier area, make the deter17 mination of whether the frontier area is a rational

18 area for the delivery of health services without re19 gard to—

20 ‘‘(A) the travel time between population

21 centers in the frontier area; or

22 ‘‘(B) the travel time to contiguous area re23 sources in the frontier area.’’.

24 (c) AGENCY RECOMMENDATIONS FOR IMPROVE25 MENTS.—Not later than February 1, 1995, the Secretary
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1 of Health and Human Services shall submit to the Con2 gress a report specifying the recommendations of the Sec3 retary for improving the manner of determining the extent

4 to which a geographic area has a need for assignments

5 of members of the National Health Service Corps, and for

6 equitably allocating such assignments among the geo7 graphic areas with a need for such assignments.

8 (d) EFFECTIVE DATE.—This section shall take effect

9 on October 1, 1994, or upon the date of the enactment

10 of this Act, whichever occurs later.

11 SEC. 203. OTHER PROVISIONS REGARDING NATIONAL

12 HEALTH SERVICE CORPS.

13 (a) SCHOLARSHIP AND LOAN REPAYMENT PRO14 GRAMS.—

15 (1) AUTHORIZATION OF APPROPRIATIONS.—

16 Section 338H(b)(1) of the Public Health Service Act

17 (42 U.S.C. 254q(b)(1)) is amended—

18 (A) by striking ‘‘and’’ after ‘‘1991,’’; and

19 (B) by striking ‘‘through 2000.’’ and in20 serting ‘‘through 1994, $150,000,000 for fiscal

21 year 1995, $175,000,000 for fiscal year 1996,

22 $200,000,000 for fiscal year 1997,

23 $225,000,000 for fiscal year 1998, and

24 $250,000,000 for fiscal year 1999.’’.
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1 (2) ALLOCATION FOR PARTICIPATION OF

2 NURSES IN SCHOLARSHIP PROGRAM.—Section

3 338H(b)(2) of the Public Health Service Act (42

4 U.S.C. 254q(b)(2)) is amended by adding at the end

5 the following subparagraph:

6 ‘‘(C) Of the amounts appropriated under

7 paragraph (1) for fiscal year 1995 and subse8 quent fiscal years, the Secretary shall reserve

9 such amounts as may be necessary to ensure

10 that, of the aggregate number of individuals

11 who are participants in the Scholarship Pro12 gram, the total number who are being educated

13 as nurses or are serving as nurses, respectively,

14 is increased to 20 percent.’’.

15 (b) INCREASE IN NUMBER OF MENTAL HEALTH

16 PROFESSIONALS IN SHORTAGE AREAS.—

17 (1) IN GENERAL.—Section 338H(b) of the Pub18 lic Health Service Act (42 U.S.C. 254q(b)) is

19 amended by adding at the end the following para20 graph:

21 ‘‘(3) MENTAL HEALTH PROFESSIONALS.—In

22 providing contracts under this subpart for scholar23 ships and loan repayments, the Secretary shall en24 sure that an appropriate number of mental health
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1 professionals is assigned under section 333 for

2 health professional shortage areas.’’.

3 (2) APPLICABILITY.—With respect to contracts

4 for scholarships and loan repayments under subpart

5 III of part D of title III of the Public Health Service

6 Act, the amendment made by subsection (a) applies

7 with respect to contracts entered into on or after Oc8 tober 1, 1994.

9 Subtitle B—Incentives Under Other

10 Programs

11 SEC. 211. EXTENSION OF ADDITIONAL PAYMENT UNDER

12 MEDICARE FOR PHYSICIANS’ SERVICES FUR13 NISHED IN FORMER SHORTAGE AREAS.

14 (a) IN GENERAL.—Section 1833(m) of the Social Se15 curity Act (42 U.S.C. 1395l(m)) is amended by striking

16 ‘‘area,’’ and inserting ‘‘area (or, in the case of an area

17 for which the designation as a health professional shortage

18 area under such section is withdrawn, in the case of physi19 cians’ services furnished to such an individual during the

20 3-year period beginning on the effective date of the with21 drawal of such designation),’’.

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

23 subsection (a) shall apply to physicians’ services furnished

24 in an area for which the designation as a health profes25 sional shortage area under section 332(a)(1)(A) of the
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1 Public Health Service Act is withdrawn on or after Janu2 ary 1, 1995.

3 SEC. 212. REFINEMENT OF GEOGRAPHIC ADJUSTMENT

4 FACTOR FOR MEDICARE PHYSICIANS’ SERV5 ICES.

6 (a) DEADLINE FOR INITIAL REVIEW AND REVI7 SION.—Section 1848(e)(1)(C) of the Social Security Act

8 (42 U.S.C. 1395w–4(e)(1)(C)) is amended by adding at

9 the end the following: ‘‘The first such review and revision

10 shall apply to services furnished on or after January 1,

11 1997.’’.

12 (b) AUTHORITY TO ADJUST INDEX VALUE FOR

13 INPUT COMPONENT UNDER CERTAIN CIRCUMSTANCES.—

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

15 U.S.C. 1395w–4(e)(1)) is amended—

16 (A) in subparagraph (A), by striking ‘‘(B) and

17 (C)’’ and inserting ‘‘(B), (C), and (D)’’;

18 (B) by redesignating subparagraph (C) as sub19 paragraph (D); and

20 (C) by inserting after subparagraph (B) the fol21 lowing:

22 ‘‘(C) SPECIAL ADJUSTMENT TO CORRECT

23 FOR UNIQUE LOCAL CIRCUMSTANCES.—The

24 Secretary may adjust the value assigned to an

25 input component of an index in a fee schedule
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1 area if the Secretary determines that the value

2 that would otherwise apply in such area does

3 not accurately reflect the relative costs of such

4 input for such area because of unique local cir5 cumstances.’’.

6 (2) Section 1848(i)(1)(D) of the Social Security Act

7 (42 U.S.C. 1395w–4(i)(1)(D)) is amended by inserting

8 ‘‘(including any adjustment under subparagraph (C)

9 thereof)’’ after ‘‘subsection (e)’’.

10 (c) REPORT ON REVIEW PROCESS.—Not later than

11 April 1, 1996, the Secretary of Health and Human Serv12 ices (in this section referred to as the ‘‘Secretary’’) shall

13 study and report to the Committee on Finance of the Sen14 ate and the Committees on Ways and Means and Energy

15 and Commerce of the House of Representatives on—

16 (1) the data necessary to review and revise the

17 indices established under section 1848(e)(1)(A) of

18 the Social Security Act, including—

19 (A) the shares allocated to physicians’

20 work effort, practice expenses (other than mal21 practice expenses), and malpractice expenses;

22 (B) the weights assigned to the input com23 ponents of such shares; and

24 (C) the index values assigned to such com25 ponents;
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1 (2) any limitations on the availability of data

2 necessary to review and revise such indices at least

3 every three years;

4 (3) ways of addressing such limitations, with

5 particular attention to the development of alternative

6 data sources for input components for which current

7 index values are based on data collected less fre8 quently than every three years; and

9 (4) the costs of developing more accurate and

10 timely data sources.

11 (d) STUDY ON LOW-VOLUME ADJUSTMENT IN ISO12 LATED AREAS.—(1) Not later than July 1, 1996, the Phy13 sician Payment Review Commission shall study and report

14 to the Committee on Finance of the Senate and the Com15 mittees on Ways and Means and Energy and Commerce

16 of the House of Representatives on the feasibility and de17 sirability of providing for a special adjustment to the index

18 value of the medical equipment and supplies input compo19 nent of the index used under section 1848(e) of the Social

20 Security Act with respect to services described in para21 graph (2).

22 (2) Services described in this paragraph are serv23 ices—

24 (A) furnished by a physician who practices in

25 an isolated area;
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1 (B) requiring the presence of expensive medical

2 equipment and supplies in the physician’s office; and

3 (C) with respect to which the cost per service

4 of operating the equipment is increased because of

5 the low volume of patients of such physician.

6 SEC. 213. EXTENSION OF STUDENT LOAN DEFERMENTS.

7 (a) STAFFORD LOANS.—

8 (1) GSL LOANS.—Section 428(b)(1)(M) of the

9 Higher Education Act of 1965 (20 U.S.C.

10 1078(b)(1)(M)) is amended—

11 (A) by striking ‘‘or’’ at the end of clause

12 (ii);

13 (B) by inserting ‘‘or’’ after the semicolon

14 at the end of clause (iii); and

15 (C) by adding at the end thereof the fol16 lowing new clause:

17 ‘‘(iv) during which the borrower is

18 serving in an internship or residency pro19 gram in preparation for practice in an area

20 of primary care (including internal medi21 cine, pediatrics, obstetrics/gynecology, fam22 ily medicine, and osteopathy);’’.

23 (2) FISL LOANS.—Section 427(a)(2)(C) of

24 such Act (20 U.S.C. 1077(a)(2)(C)) is amended—
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1 (A) by striking ‘‘or’’ at the end of clause

2 (ii);

3 (B) by inserting ‘‘or’’ after the semicolon

4 at the end of clause (iii); and

5 (C) by adding at the end thereof the fol6 lowing new clause:

7 ‘‘(iv) during which the borrower is

8 serving in an internship or residency pro9 gram in preparation for practice in an area

10 of primary care (including internal medi11 cine, pediatrics, obstetrics/gynecology, fam12 ily medicine, and osteopathy);’’.

13 (b) PERKINS LOANS.—Section 464(c)(2)(A) of such

14 Act (20 U.S.C. 1087dd(c)(2)(A)) is amended—

15 (1) by striking ‘‘or’’ at the end of clause (iii);

16 (2) by inserting ‘‘or’’ after the semicolon at the

17 end of clause (iv); and

18 (3) by adding at the end thereof the following

19 new clause:

20 ‘‘(v) during which the borrower is

21 serving in an internship or residency pro22 gram in preparation for practice in an area

23 of primary care (including internal medi24 cine, pediatrics, obstetrics/gynecology, fam25 ily medicine, and osteopathy);’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply on and after the date of the enact3 ment of this Act with respect to loans made under the

4 Higher Education Act of 1965 before, on, or after that

5 date.

6 SEC. 214. DEVELOPMENT OF MODEL STATE SCOPE OF

7 PRACTICE LAW.

8 (a) IN GENERAL.—The Secretary of Health and

9 Human Services shall develop and publish a model law

10 that may be adopted by States to increase the access of

11 individuals residing in underserved rural areas to health

12 care services by expanding the services which non-physi13 cian health care professionals may provide in such areas.

14 (b) DEADLINE.—The Secretary shall publish the

15 model law developed under subsection (a) not later than

16 1 year after the date of the enactment of this Act.

17 TITLE III—ASSISTANCE FOR

18 INSTITUTIONAL PROVIDERS

19 Subtitle A—Emergency Medical

20 Systems

21 SEC. 301. EMERGENCY MEDICAL SERVICES.

22 (a) ESTABLISHMENT OF FEDERAL OFFICE.—Title

23 XII of the Public Health Service Act (42 U.S.C. 300d et

24 seq.) is amended—
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1 (1) in the heading for the title, by striking

2 ‘‘TRAUMA CARE’’ and inserting ‘‘EMERGENCY

3 MEDICAL SERVICES’’;

4 (2) in the heading for part A, by striking

5 ‘‘GENERAL’’ and all that follows and inserting

6 ‘‘GENERAL AUTHORITIES AND DUTIES’’; and

7 (3) by amending section 1201 to read as fol8 lows:

9 ‘‘SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY

10 MEDICAL SERVICES.

11 ‘‘(a) IN GENERAL.—The Secretary shall establish an

12 office to be known as the Office of Emergency Medical

13 Services, which shall be headed by a director appointed

14 by the Secretary. The Secretary shall carry out this title

15 acting through the Director of such Office.

16 ‘‘(b) GENERAL AUTHORITIES AND DUTIES.—With

17 respect to emergency medical services (including trauma

18 care), the Secretary shall—

19 ‘‘(1) conduct and support research, training,

20 evaluations, and demonstration projects;

21 ‘‘(2) foster the development of appropriate,

22 modern systems of such services through the sharing

23 of information among agencies and individuals in24 volved in the study and provision of such services;
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1 ‘‘(3) foster the development of regional systems

2 for the provision of such services;

3 ‘‘(4) sponsor workshops and conferences;

4 ‘‘(5) as appropriate, disseminate to public and

5 private entities information obtained in carrying out

6 paragraphs (1) through (4);

7 ‘‘(6) provide technical assistance to State and

8 local agencies;

9 ‘‘(7) coordinate activities of the Department of

10 Health and Human Services; and

11 ‘‘(8) as appropriate, coordinate activities of

12 such Department with activities of other Federal

13 agencies.

14 ‘‘(c) CERTAIN REQUIREMENTS.—With respect to

15 emergency medical services (including trauma care), the

16 Secretary shall ensure that activities under subsection (b)

17 are carried out regarding—

18 ‘‘(1) maintaining an adequate number of health

19 professionals with expertise in the provision of the

20 services, including hospital-based professionals and

21 prehospital-based professionals;

22 ‘‘(2) developing, periodically reviewing, and re23 vising as appropriate, in collaboration with appro24 priate public and private entities, guidelines for the

25 provision of such services (including, for various typ-
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1 ical circumstances, guidelines on the number and va2 riety of professionals, on equipment, and on train3 ing);

4 ‘‘(3) the appropriate use of available tech5 nologies, including communications technologies; and

6 ‘‘(4) the unique needs of underserved inner-city

7 areas and underserved rural areas.

8 ‘‘(d) GRANTS, COOPERATIVE AGREEMENTS, AND

9 CONTRACTS.—In carrying out subsections (b) and (c), the

10 Secretary may make grants and enter into cooperative

11 agreements and contracts.

12 ‘‘(e) DEFINITIONS.—For purposes of this part:

13 ‘‘(1) The term ‘hospital-based professional’

14 means a health professional (including an allied

15 health professional) who has expertise in providing

16 one or more emergency medical services and who

17 normally provides the services at a medical facility.

18 ‘‘(2) The term ‘prehospital-based professional’

19 means a health professional (including an allied

20 health professional) who has expertise in providing

21 one or more emergency medical services and who

22 normally provides the services at the site of the med23 ical emergency or during transport to a medical fa24 cility.’’.
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1 (b) STATE OFFICES OF EMERGENCY MEDICAL SERV2 ICES; DEMONSTRATION PROGRAM REGARDING TELE3 COMMUNICATIONS.—Part A of title XII of the Public

4 Health Service Act (42 U.S.C. 300d et seq.), as amended

5 by section 601(b) of Public Law 103–183 (107 Stat.

6 2238), is amended—

7 (1) by redesignating sections 1202 and 1203 as

8 sections 1203 and 1204, respectively;

9 (2) by inserting after section 1201 the following

10 section:

11 ‘‘SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL

12 SERVICES.

13 ‘‘(a) PROGRAM OF GRANTS.—The Secretary may

14 make grants to States for the purpose of improving the

15 availability and quality of emergency medical services

16 through the operation of State offices of emergency medi17 cal services.

18 ‘‘(b) REQUIREMENT OF MATCHING FUNDS.—

19 ‘‘(1) IN GENERAL.—The Secretary may not

20 make a grant under subsection (a) unless the State

21 involved agrees, with respect to the costs to be in22 curred by the State in carrying out the purpose de23 scribed in such subsection, to provide non-Federal

24 contributions toward such costs in an amount that—
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1 ‘‘(A) for the first fiscal year of payments

2 under the grant, is not less than $1 for each $3

3 of Federal funds provided in the grant;

4 ‘‘(B) for any second fiscal year of such

5 payments, is not less than $1 for each $1 of

6 Federal funds provided in the grant; and

7 ‘‘(C) for any third fiscal year of such pay8 ments, is not less than $3 for each $1 of Fed9 eral funds provided in the grant.

10 ‘‘(2) DETERMINATION OF AMOUNT OF NON11 FEDERAL CONTRIBUTION.—

12 ‘‘(A) Subject to subparagraph (B), non13 Federal contributions required in paragraph (1)

14 may be in cash or in kind, fairly evaluated, in15 cluding plant, equipment, or services. Amounts

16 provided by the Federal Government, or serv17 ices assisted or subsidized to any significant ex18 tent by the Federal Government, may not be in19 cluded in determining the amount of such non20 Federal contributions.

21 ‘‘(B) The Secretary may not make a grant

22 under subsection (a) unless the State involved

23 agrees that—

24 ‘‘(i) for the first fiscal year of pay25 ments under the grant, 100 percent or less
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1 of the non-Federal contributions required

2 in paragraph (1) will be provided in the

3 form of in-kind contributions;

4 ‘‘(ii) for any second fiscal year of such

5 payments, not more than 50 percent of

6 such non-Federal contributions will be pro7 vided in the form of in-kind contributions;

8 and

9 ‘‘(iii) for any third fiscal year of such

10 payments, such non-Federal contributions

11 will be provided solely in the form of cash.

12 ‘‘(c) CERTAIN REQUIRED ACTIVITIES.—The Sec13 retary may not make a grant under subsection (a) unless

14 the State involved agrees that activities carried out by an

15 office operated pursuant to such subsection will include—

16 ‘‘(1) coordinating the activities carried out in

17 the State that relate to emergency medical services;

18 ‘‘(2) activities regarding the matters described

19 in paragraphs (1) through (4) section 1201(b); and

20 ‘‘(3) identifying Federal and State programs re21 garding emergency medical services and providing

22 technical assistance to public and nonprofit private

23 entities regarding participation in such programs.

24 ‘‘(d) REQUIREMENT REGARDING ANNUAL BUDGET

25 FOR OFFICE.—The Secretary may not make a grant
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1 under subsection (a) unless the State involved agrees that,

2 for any fiscal year for which the State receives such a

3 grant, the office operated pursuant to subsection (a) will

4 be provided with an annual budget of not less than

5 $50,000.

6 ‘‘(e) CERTAIN USES OF FUNDS.—

7 ‘‘(1) RESTRICTIONS.—The Secretary may not

8 make a grant under subsection (a) unless the State

9 involved agrees that—

10 ‘‘(A) if research with respect to emergency

11 medical services is conducted pursuant to the

12 grant, not more than 10 percent of the grant

13 will be expended for such research; and

14 ‘‘(B) the grant will not be expended to pro15 vide emergency medical services (including pro16 viding cash payments regarding such services).

17 ‘‘(2) ESTABLISHMENT OF OFFICE.—Activities

18 for which a State may expend a grant under sub19 section (a) include paying the costs of establishing

20 an office of emergency medical services for purposes

21 of such subsection.

22 ‘‘(f) REPORTS.—The Secretary may not make a

23 grant under subsection (a) unless the State involved

24 agrees to submit to the Secretary reports containing such
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1 information as the Secretary may require regarding activi2 ties carried out under this section by the State.

3 ‘‘(g) REQUIREMENT OF APPLICATION.—The Sec4 retary may not make a grant under subsection (a) unless

5 an application for the grant is submitted to the Secretary

6 and the application is in such form, is made in such man7 ner, and contains such agreements, assurances, and infor8 mation as the Secretary determines to be necessary to

9 carry out this section.’’; and

10 (3) in section 1204 (as redesignated by para11 graph (1) of this subsection)—

12 (A) by redesignating subsection (c) as sub13 section (d); and

14 (B) by inserting after subsection (b) the

15 following new subsection:

16 ‘‘(c) DEMONSTRATION PROGRAM REGARDING TELE17 COMMUNICATIONS.—

18 ‘‘(1) LINKAGES FOR RURAL FACILITIES.—

19 Projects under subsection (a)(1) shall include dem20 onstration projects to establish telecommunications

21 between rural medical facilities and medical facilities

22 that have expertise or equipment that can be utilized

23 by the rural facilities through the telecommuni24 cations.
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1 ‘‘(2) MODES OF COMMUNICATION.—The Sec2 retary shall ensure that the telecommunications

3 technologies demonstrated under paragraph (1) in4 clude interactive video telecommunications, static

5 video imaging transmitted through the telephone

6 system, and facsimiles transmitted through such sys7 tem.’’.

8 (c) FUNDING.—Section 1232 of the Public Health

9 Service Act (42 U.S.C. 300d–32) is amended by striking

10 subsections (a) and (b) and inserting the following:

11 ‘‘(a) EMERGENCY MEDICAL SERVICES GEN12 ERALLY.—

13 ‘‘(1) IN GENERAL.—For the purpose of carry14 ing out section 1201 other than with respect to trau15 ma care, and for the purpose of carrying out section

16 1204(c), there are authorized to be appropriated

17 $2,000,000 for fiscal year 1995, and such sums as

18 may be necessary for each of the fiscal years 1996

19 and 1997.

20 ‘‘(2) STATE OFFICES.—For the purpose of car21 rying out section 1202, there are authorized to be

22 appropriated $3,000,000 for fiscal year 1995, and

23 such sums as may be necessary for each of the fiscal

24 years 1996 and 1997.
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1 ‘‘(b) TRAUMA CARE AND CERTAIN OTHER ACTIVI2 TIES.—

3 ‘‘(1) IN GENERAL.—For the purpose of carry4 ing out part A with respect to trauma care, and for

5 the purpose of carrying out part B, there are au6 thorized to be appropriated $60,000,000 for fiscal

7 year 1995, and such sums as may be necessary for

8 each of the fiscal years 1996 and 1997.

9 ‘‘(2) ALLOCATION OF FUNDS BY SECRETARY.—

10 ‘‘(A) For the purpose of carrying out part

11 A with respect to trauma care, the Secretary

12 shall make available 10 percent of the amounts

13 appropriated for a fiscal year under paragraph

14 (1).

15 ‘‘(B) For the purpose of carrying out sec16 tion 1204 (other than subsection (c) of such

17 section), the Secretary shall make available 10

18 percent of the amounts appropriated for a fiscal

19 year under paragraph (1).

20 ‘‘(C)(i) For the purpose of making allot21 ments under section 1211(a), the Secretary

22 shall, subject to subsection (c), make available

23 80 percent of the amounts appropriated for a

24 fiscal year under paragraph (1).
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1 ‘‘(ii) Amounts paid to a State under sec2 tion 1211(a) for a fiscal year shall, for the pur3 poses for which the amounts were paid, remain

4 available for obligation until the end of the fis5 cal year immediately following the fiscal year

6 for which the amounts were paid.’’.

7 SEC. 302. GRANTS TO STATES REGARDING AIRCRAFT FOR

8 TRANSPORTING RURAL VICTIMS OF MEDICAL

9 EMERGENCIES.

10 Part E of title XII of the Public Health Service Act

11 (42 U.S.C. 300d–51 et seq.) is amended by adding at the

12 end the following new section:

13 ‘‘SEC. 1252. GRANTS FOR SYSTEMS TO TRANSPORT RURAL

14 VICTIMS OF MEDICAL EMERGENCIES.

15 ‘‘(a) IN GENERAL.—The Secretary shall make grants

16 to States to assist such States in the creation or enhance17 ment of air medical transport systems that provide victims

18 of medical emergencies in rural areas with access to treat19 ments for the injuries or other conditions resulting from

20 such emergencies.

21 ‘‘(b) APPLICATION AND PLAN.—

22 ‘‘(1) APPLICATION.—To be eligible to receive a

23 grant under subsection (a), a State shall prepare

24 and submit to the Secretary an application in such

25 form, made in such manner, and containing such
42

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1 agreements, assurances, and information, including

2 a State plan as required in paragraph (2), as the

3 Secretary determines to be necessary to carry out

4 this section.

5 ‘‘(2) STATE PLAN.—An application submitted

6 under paragraph (1) shall contain a State plan that

7 shall—

8 ‘‘(A) describe the intended uses of the

9 grant proceeds and the geographic areas to be

10 served;

11 ‘‘(B) demonstrate that the geographic

12 areas to be served, as described under subpara13 graph (A), are rural in nature;

14 ‘‘(C) demonstrate that there is a lack of

15 facilities available and equipped to deliver ad16 vanced levels of medical care in the geographic

17 areas to be served;

18 ‘‘(D) demonstrate that in utilizing the

19 grant proceeds for the establishment or en20 hancement of air medical services the State

21 would be making a cost-effective improvement

22 to existing ground-based or air emergency medi23 cal service systems;

24 ‘‘(E) demonstrate that the State will not

25 utilize the grant proceeds to duplicate the capa-
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1 bilities of existing air medical systems that are

2 effectively meeting the emergency medical needs

3 of the populations they serve;

4 ‘‘(F) demonstrate that in utilizing the

5 grant proceeds the State is likely to achieve a

6 reduction in the morbidity and mortality rates

7 of the areas to be served, as determined by the

8 Secretary;

9 ‘‘(G) demonstrate that the State, in utiliz10 ing the grant proceeds, will—

11 ‘‘(i) maintain the expenditures of the

12 State for air and ground medical transport

13 systems at a level equal to not less than

14 the level of such expenditures maintained

15 by the State for the fiscal year preceding

16 the fiscal year for which the grant is re17 ceived; and

18 ‘‘(ii) ensure that recipients of direct

19 financial assistance from the State under

20 such grant will maintain expenditures of

21 such recipients for such systems at a level

22 at least equal to the level of such expendi23 tures maintained by such recipients for the

24 fiscal year preceding the fiscal year for

25 which the financial assistance is received;
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1 ‘‘(H) demonstrate that persons experienced

2 in the field of air medical service delivery were

3 consulted in the preparation of the State plan;

4 and

5 ‘‘(I) contain such other information as the

6 Secretary may determine appropriate.

7 ‘‘(c) CONSIDERATIONS IN AWARDING GRANTS.—In

8 determining whether to award a grant to a State under

9 this section, the Secretary shall—

10 ‘‘(1) consider the rural nature of the areas to

11 be served with the grant proceeds and the services

12 to be provided with such proceeds, as identified in

13 the State plan submitted under subsection (b); and

14 ‘‘(2) give preference to States with State plans

15 that demonstrate an effective integration of the pro16 posed air medical transport systems into a com17 prehensive network or plan for regional or statewide

18 emergency medical service delivery.

19 ‘‘(d) STATE ADMINISTRATION AND USE OF

20 GRANT.—

21 ‘‘(1) IN GENERAL.—The Secretary may not

22 make a grant to a State under subsection (a) unless

23 the State agrees that such grant will be adminis24 tered by the State agency with principal responsibil25 ity for carrying out programs regarding the provi-
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1 sion of medical services to victims of medical emer2 gencies or trauma.

3 ‘‘(2) PERMITTED USES.—A State may use

4 amounts received under a grant awarded under this

5 section to award subgrants to public and private en6 tities operating within the State.

7 ‘‘(3) OPPORTUNITY FOR PUBLIC COMMENT.—

8 The Secretary may not make a grant to a State

9 under subsection (a) unless that State agrees that,

10 in developing and carrying out the State plan under

11 subsection (b)(2), the State will provide public notice

12 with respect to the plan (including any revisions

13 thereto) and facilitate comments from interested

14 persons.

15 ‘‘(e) NUMBER OF GRANTS.—The Secretary shall

16 award grants under this section to not less than 7 States.

17 ‘‘(f) REPORTS.—

18 ‘‘(1) REQUIREMENT.—A State that receives a

19 grant under this section shall annually (during each

20 year in which the grant proceeds are used) prepare

21 and submit to the Secretary a report that shall con22 tain—

23 ‘‘(A) a description of the manner in which

24 the grant proceeds were utilized;
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1 ‘‘(B) a description of the effectiveness of

2 the air medical transport programs assisted

3 with grant proceeds; and

4 ‘‘(C) such other information as the Sec5 retary may require.

6 ‘‘(2) TERMINATION OF FUNDING.—In reviewing

7 reports submitted under paragraph (1), if the Sec8 retary determines that a State is not using amounts

9 provided under a grant awarded under this section

10 in accordance with the State plan submitted by the

11 State under subsection (b), the Secretary may termi12 nate the payment of amounts under such grant to

13 the State until such time as the Secretary deter14 mines that the State comes into compliance with

15 such plan.

16 ‘‘(g) DEFINITION.—As used in this section, the term

17 ‘rural areas’ means geographic areas that are located out18 side of standard metropolitan statistical areas, as identi19 fied by the Secretary.

20 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

21 are authorized to be appropriated to make grants under

22 this section, $15,000,000 for fiscal year 1995, and such

23 sums as may be necessary for each of the fiscal years 1996

24 and 1997.’’.
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1 Subtitle B—Assistance to Rural

2 Providers Under Medicare

3 PART 1—MEDICARE ESSENTIAL ACCESS

4 COMMUNITY HOSPITALS

5 SEC. 311. AMENDMENTS TO ESSENTIAL ACCESS COMMU6 NITY HOSPITAL (EACH) PROGRAM UNDER

7 MEDICARE.

8 (a) INCREASING NUMBER OF PARTICIPATING

9 STATES.—Section 1820(a)(1) of the Social Security Act

10 (42 U.S.C. 1395i–4(a)(1)) is amended by striking ‘‘7’’ and

11 inserting ‘‘9’’.

12 (b) TREATMENT OF INPATIENT HOSPITAL SERVICES

13 PROVIDED IN RURAL PRIMARY CARE HOSPITALS.—

14 (1) IN GENERAL.—Section 1820(f)(1)(F) of

15 such Act (42 U.S.C. 1395i–4(f)(1)(F)) is amended

16 to read as follows:

17 ‘‘(F) subject to paragraph (4), provides not

18 more than 6 inpatient beds (meeting such con19 ditions as the Secretary may establish) for pro20 viding inpatient care to patients requiring sta21 bilization before discharge or transfer to a hos22 pital, except that the facility may not provide

23 any inpatient hospital services—

24 ‘‘(i) to any patient whose attending

25 physician does not certify that the patient
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1 may reasonably be expected to be dis2 charged or transferred to a hospital within

3 72 hours of admission to the facility; or

4 ‘‘(ii) consisting of surgery or any

5 other service requiring the use of general

6 anesthesia (other than surgical procedures

7 specified by the Secretary under section

8 1833(i)(1)(A)), unless the attending physi9 cian certifies that the risk associated with

10 transferring the patient to a hospital for

11 such services outweighs the benefits of

12 transferring the patient to a hospital for

13 such services.’’.

14 (2) LIMITATION ON AVERAGE LENGTH OF

15 STAY.—Section 1820(f) of such Act (42 U.S.C.

16 1395i–4(f)) is amended by adding at the end the fol17 lowing new paragraph:

18 ‘‘(4) LIMITATION ON AVERAGE LENGTH OF IN19 PATIENT STAYS.—The Secretary may terminate a

20 designation of a rural primary care hospital under

21 paragraph (1) if the Secretary finds that the average

22 length of stay for inpatients at the facility during

23 the previous year in which the designation was in ef24 fect exceeded 72 hours. In determining the compli25 ance of a facility with the requirement of the pre-
49

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1 vious sentence, there shall not be taken into account

2 periods of stay of inpatients in excess of 72 hours

3 to the extent such periods exceed 72 hours because

4 transfer to a hospital is precluded because of inclem5 ent weather or other emergency conditions.’’.

6 (3) CONFORMING AMENDMENT.—Section

7 1814(a)(8) of such Act (42 U.S.C. 1395f(a)(8)) is

8 amended by striking ‘‘such services’’ and all that fol9 lows and inserting ‘‘the individual may reasonably be

10 expected to be discharged or transferred to a hos11 pital within 72 hours after admission to the rural

12 primary care hospital.’’.

13 (4) GAO REPORTS.—Not later than 2 years

14 after the date of the enactment of this Act, the

15 Comptroller General shall submit reports to Con16 gress on—

17 (A) the application of the requirements

18 under section 1820(f) of the Social Security Act

19 (as amended by this subsection) that rural pri20 mary care hospitals provide inpatient care only

21 to those individuals whose attending physicians

22 certify may reasonably be expected to be dis23 charged within 72 hours after admission and

24 maintain an average length of inpatient stay
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1 during a year that does not exceed 72 hours;

2 and

3 (B) the extent to which such requirements

4 have resulted in such hospitals providing inpa5 tient care beyond their capabilities or have lim6 ited the ability of such hospitals to provide

7 needed services.

8 (c) DESIGNATION OF HOSPITALS.—

9 (1) PERMITTING DESIGNATION OF HOSPITALS

10 LOCATED IN URBAN AREAS.—

11 (A) IN GENERAL.—Section 1820 of such

12 Act (42 U.S.C. 1395i–4) is amended—

13 (i) by striking paragraph (1) of sub14 section (e) and redesignating paragraphs

15 (2) through (6) as paragraphs (1) through

16 (5);

17 (ii) in subsection (e)(1)(A) (as redes18 ignated by subparagraph (A))—

19 (I) by striking ‘‘is located’’ and

20 inserting ‘‘except in the case of a hos21 pital located in an urban area, is lo22 cated’’,

23 (II) by striking ‘‘, (ii)’’ and in24 serting ‘‘or (ii)’’, and
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1 (III) by striking ‘‘or (iii)’’ and all

2 that follows through ‘‘section,’’; and

3 (iii) in subsection (i)(1)(B), by strik4 ing ‘‘paragraph (3)’’ and inserting ‘‘para5 graph (2)’’.

6 (B) NO CHANGE IN MEDICARE PROSPEC7 TIVE PAYMENT.—Section 1886(d)(5)(D) of

8 such Act (42 U.S.C. 1395ww(d)(5)(D)) is

9 amended—

10 (i) in clause (iii)(III), by inserting ‘‘lo11 cated in a rural area and’’ after ‘‘that is’’,

12 and

13 (ii) in clause (v), by inserting ‘‘located

14 in a rural area and’’ after ‘‘in the case of

15 a hospital’’.

16 (2) PERMITTING HOSPITALS LOCATED IN AD17 JOINING STATES TO PARTICIPATE IN STATE PRO18 GRAM.—

19 (A) IN GENERAL.—Section 1820 of such

20 Act (42 U.S.C. 1395i–4) is amended—

21 (i) by redesignating subsection (k) as

22 subsection (l); and

23 (ii) by inserting after subsection (j)

24 the following new subsection:
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1 ‘‘(k) ELIGIBILITY OF HOSPITALS NOT LOCATED IN

2 PARTICIPATING STATES.—Notwithstanding any other

3 provision of this section—

4 ‘‘(1) for purposes of including a hospital or fa5 cility as a member institution of a rural health net6 work, a State may designate a hospital or facility

7 that is not located in the State as an essential access

8 community hospital or a rural primary care hospital

9 if the hospital or facility is located in an adjoining

10 State and is otherwise eligible for designation as

11 such a hospital;

12 ‘‘(2) the Secretary may designate a hospital or

13 facility that is not located in a State receiving a

14 grant under subsection (a)(1) as an essential access

15 community hospital or a rural primary care hospital

16 if the hospital or facility is a member institution of

17 a rural health network of a State receiving a grant

18 under such subsection; and

19 ‘‘(3) a hospital or facility designated pursuant

20 to this subsection shall be eligible to receive a grant

21 under subsection (a)(2).’’.

22 (B) CONFORMING AMENDMENTS.—(i) Sec23 tion 1820(c)(1) of such Act (42 U.S.C. 1395i–

24 4(c)(1)) is amended by striking ‘‘paragraph
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1 (3)’’ and inserting ‘‘paragraph (3) or subsection

2 (k)’’.

3 (ii) Paragraphs (1)(A) and (2)(A) of sec4 tion 1820(i) of such Act (42 U.S.C. 1395i–4(i))

5 are each amended—

6 (I) in clause (i), by striking ‘‘(a)(1)’’

7 and inserting ‘‘(a)(1) (except as provided

8 in subsection (k))’’, and

9 (II) in clause (ii), by striking ‘‘sub10 paragraph (B)’’ and inserting ‘‘subpara11 graph (B) or subsection (k)’’.

12 (d) SKILLED NURSING SERVICES IN RURAL PRIMARY

13 CARE HOSPITALS.—Section 1820(f)(3) of such Act (42

14 U.S.C. 1395i–4(f)(3)) is amended by striking ‘‘because

15 the facility’’ and all that follows and inserting the follow16 ing: ‘‘because, at the time the facility applies to the State

17 for designation as a rural primary care hospital, there is

18 in effect an agreement between the facility and the Sec19 retary under section 1883 under which the facility’s inpa20 tient hospital facilities are used for the furnishing of ex21 tended care services, except that the number of beds used

22 for the furnishing of such services may not exceed the total

23 number of licensed inpatient beds at the time the facility

24 applies to the State for such designation (minus the num25 ber of inpatient beds used for providing inpatient care pur-
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1 suant to paragraph (1)(F)). For purposes of the previous

2 sentence, the number of beds of the facility used for the

3 furnishing of extended care services shall not include any

4 beds of a unit of the facility that is licensed as a distinct5 part skilled nursing facility at the time the facility applies

6 to the State for designation as a rural primary care hos7 pital.’’.

8 (e) DEADLINE FOR DEVELOPMENT OF PROSPECTIVE

9 PAYMENT SYSTEM FOR INPATIENT RURAL PRIMARY

10 CARE HOSPITAL SERVICES.—Section 1814(l)(2) of such

11 Act (42 U.S.C. 1395f(l)(2)) is amended by striking ‘‘Jan12 uary 1, 1993’’ and inserting ‘‘January 1, 1996’’.

13 (f) PAYMENT FOR OUTPATIENT RURAL PRIMARY

14 CARE HOSPITAL SERVICES.—

15 (1) IMPLEMENTATION OF PROSPECTIVE PAY16 MENT SYSTEM.—Section 1834(g) of such Act (42

17 U.S.C. 1395m(g)) is amended—

18 (A) in paragraph (1), by striking ‘‘during

19 a year before 1993’’ and inserting ‘‘during a

20 year before the prospective payment system de21 scribed in paragraph (2) is in effect’’; and

22 (B) in paragraph (2), by striking ‘‘January

23 1, 1993,’’ and inserting ‘‘January 1, 1996,’’.

24 (2) NO USE OF CUSTOMARY CHARGE IN DETER25 MINING PAYMENT.—Section 1834(g)(1) of such Act
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1 (42 U.S.C. 1395m(g)(1)) is amended by adding at

2 the end the following new flush sentence:

3 ‘‘The amount of payment shall be determined under

4 either method without regard to the amount of the

5 customary or other charge.’’.

6 (g) CLARIFICATION OF PHYSICIAN STAFFING RE7 QUIREMENT FOR RURAL PRIMARY CARE HOSPITALS.—

8 Section 1820(f)(1)(H) of such Act (42 U.S.C. 1395i–

9 4(f)(1)(H)) is amended by striking the period and insert10 ing the following: ‘‘, except that in determining whether

11 a facility meets the requirements of this subparagraph,

12 subparagraphs (E) and (F) of that paragraph shall be ap13 plied as if any reference to a ‘physician’ is a reference

14 to a physician as defined in section 1861(r)(1).’’.

15 (h) TECHNICAL AMENDMENTS RELATING TO PART

16 A DEDUCTIBLE, COINSURANCE, AND SPELL OF ILL17 NESS.—(1) Section 1812(a)(1) of such Act (42 U.S.C.

18 1395d(a)(1)) is amended—

19 (A) by striking ‘‘inpatient hospital services’’ the

20 first place it appears and inserting ‘‘inpatient hos21 pital services or inpatient rural primary care hos22 pital services’’;

23 (B) by striking ‘‘inpatient hospital services’’ the

24 second place it appears and inserting ‘‘such serv25 ices’’; and
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1 (C) by striking ‘‘and inpatient rural primary

2 care hospital services’’.

3 (2) Sections 1813(a) and 1813(b)(3)(A) of such Act

4 (42 U.S.C. 1395e(a), 1395e(b)(3)(A)) are each amended

5 by striking ‘‘inpatient hospital services’’ each place it ap6 pears and inserting ‘‘inpatient hospital services or inpa7 tient rural primary care hospital services’’.

8 (3) Section 1813(b)(3)(B) of such Act (42 U.S.C.

9 1395e(b)(3)(B)) is amended by striking ‘‘inpatient hos10 pital services’’ and inserting ‘‘inpatient hospital services,

11 inpatient rural primary care hospital services’’.

12 (4) Section 1861(a) of such Act (42 U.S.C. 1395x(a))

13 is amended—

14 (A) in paragraph (1), by striking ‘‘inpatient

15 hospital services’’ and inserting ‘‘inpatient hospital

16 services, inpatient rural primary care hospital serv17 ices’’; and

18 (B) in paragraph (2), by striking ‘‘hospital’’

19 and inserting ‘‘hospital or rural primary care hos20 pital’’.

21 (i) AUTHORIZATION OF APPROPRIATIONS.—Section

22 1820(l) of such Act (42 U.S.C. 1395i–4(l)), as redesig23 nated by subsection (c)(2)(A), is amended by striking

24 ‘‘1990, 1991, and 1992’’ and inserting ‘‘1990 through

25 1995’’.
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1 (j) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on the date of the enactment

3 of this Act.

4 PART 2—ESTABLISHMENT OF RURAL

5 EMERGENCY ACCESS CARE HOSPITALS

6 SEC. 321. RURAL EMERGENCY ACCESS CARE HOSPITALS

7 DESCRIBED.

8 (a) IN GENERAL.—Section 1861 of the Social Secu9 rity Act (42 U.S.C. 1395x) is amended by adding at the

10 end the following new subsection:

11 ‘‘Rural Emergency Access Care Hospital; Rural

12 Emergency Access Care Hospital Services

13 ‘‘(oo)(1) The term ‘rural emergency access care hos14 pital’ means, for a fiscal year, a facility with respect to

15 which the Secretary finds the following:

16 ‘‘(A) The facility is located in a rural area (as

17 defined in section 1886(d)(2)(D)).

18 ‘‘(B) The facility was a hospital under this title

19 at any time during the 5-year period that ends on

20 the date of the enactment of this subsection.

21 ‘‘(C) The facility is in danger of closing due to

22 low inpatient utilization rates and negative operating

23 losses, and the closure of the facility would limit the

24 access of individuals residing in the facility’s service

25 area to emergency services.
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1 ‘‘(D) The facility has entered into (or plans to

2 enter into) an agreement with a hospital with a par3 ticipation agreement in effect under section 1866(a),

4 and under such agreement the hospital shall accept

5 patients transferred to the hospital from the facility

6 and receive data from and transmit data to the facil7 ity.

8 ‘‘(E) There is a practitioner who is qualified to

9 provide advanced cardiac life support services (as de10 termined by the State in which the facility is lo11 cated) on-site at the facility on a 24-hour basis.

12 ‘‘(F) A physician is available on-call to provide

13 emergency medical services on a 24-hour basis.

14 ‘‘(G) The facility meets such staffing require15 ments as would apply under section 1861(e) to a

16 hospital located in a rural area, except that—

17 ‘‘(i) the facility need not meet hospital

18 standards relating to the number of hours dur19 ing a day, or days during a week, in which the

20 facility must be open, except insofar as the fa21 cility is required to provide emergency care on

22 a 24-hour basis under subparagraphs (E) and

23 (F); and

24 ‘‘(ii) the facility may provide any services

25 otherwise required to be provided by a full-time,
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1 on-site dietician, pharmacist, laboratory techni2 cian, medical technologist, or radiological tech3 nologist on a part-time, off-site basis.

4 ‘‘(H) The facility meets the requirements appli5 cable to clinics and facilities under subparagraphs

6 (C) through (J) of paragraph (2) of section

7 1861(aa) and of clauses (ii) and (iv) of the second

8 sentence of such paragraph (or, in the case of the

9 requirements of subparagraph (E), (F), or (J) of

10 such paragraph, would meet the requirements if any

11 reference in such subparagraph to a ‘nurse practi12 tioner’ or to ‘nurse practitioners’ was deemed to be

13 a reference to a ‘nurse practitioner or nurse’ or to

14 ‘nurse practitioners or nurses’); except that in deter15 mining whether a facility meets the requirements of

16 this subparagraph, subparagraphs (E) and (F) of

17 that paragraph shall be applied as if any reference

18 to a ‘physician’ is a reference to a physician as de19 fined in section 1861(r)(1).

20 ‘‘(2) The term ‘rural emergency access care hospital

21 services’ means the following services provided by a rural

22 emergency access care hospital:

23 ‘‘(A) An appropriate medical screening exam24 ination (as described in section 1867(a)).
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1 ‘‘(B) Necessary stabilizing examination and

2 treatment services for an emergency medical condi3 tion and labor (as described in section 1867(b)).’’.

4 (b) REQUIRING RURAL EMERGENCY ACCESS CARE

5 HOSPITALS TO MEET HOSPITAL ANTI-DUMPING RE6 QUIREMENTS.—Section 1867(e)(5) of such Act (42 U.S.C.

7 1395dd(e)(5)) is amended by striking ‘‘1861(mm)(1))’’

8 and inserting ‘‘1861(mm)(1)) and a rural emergency ac9 cess care hospital (as defined in section 1861(oo)(1))’’.

10 SEC. 322. COVERAGE OF AND PAYMENT FOR SERVICES.

11 (a) COVERAGE UNDER PART B.—Section 1832(a)(2)

12 of the Social Security Act (42 U.S.C. 1395k(a)(2)) is

13 amended—

14 (1) by striking ‘‘and’’ at the end of subpara15 graph (I);

16 (2) by striking the period at the end of sub17 paragraph (J) and inserting ‘‘; and’’; and

18 (3) by adding at the end the following new sub19 paragraph:

20 ‘‘(K) rural emergency access care hospital

21 services (as defined in section 1861(oo)(2)).’’.

22 (b) PAYMENT BASED ON PAYMENT FOR OUTPATIENT

23 RURAL PRIMARY CARE HOSPITAL SERVICES.—

24 (1) IN GENERAL.—Section 1833(a)(6) of the

25 Social Security Act (42 U.S.C. 1395l(a)(6)) is
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1 amended by striking ‘‘services,’’ and inserting ‘‘serv2 ices and rural emergency access care hospital serv3 ices,’’.

4 (2) PAYMENT METHODOLOGY DESCRIBED.—

5 Section 1834(g) of such Act (42 U.S.C. 1395m(g))

6 is amended—

7 (A) in the heading, by striking ‘‘SERV8 ICES’’ and inserting ‘‘SERVICES AND RURAL

9 EMERGENCY ACCESS CARE HOSPITAL SERV10 ICES’’;

11 (B) in paragraph (1), by striking ‘‘during

12 a year before 1993’’ and inserting ‘‘during a

13 year before the prospective payment system de14 scribed in paragraph (2) is in effect’’;

15 (C) in paragraph (1), by adding at the end

16 the following:

17 ‘‘The amount of payment shall be determined under

18 either method without regard to the amount of the

19 customary or other charge.’’;

20 (D) in paragraph (2), by striking ‘‘Janu21 ary 1, 1993,’’ and inserting ‘‘January 1,

22 1996,’’; and

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

24 paragraph:
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1 ‘‘(3) APPLICATION OF METHODS TO PAYMENT

2 FOR RURAL EMERGENCY ACCESS CARE HOSPITAL

3 SERVICES.—The amount of payment for rural emer4 gency access care hospital services provided during

5 a year shall be determined using the applicable

6 method provided under this subsection for determin7 ing payment for outpatient rural primary care hos8 pital services during the year.’’.

9 SEC. 323. EFFECTIVE DATE.

10 The amendments made by this part shall apply to fis11 cal years beginning on or after October 1, 1994.

12 Subtitle D—Demonstration Proj13 ects to Encourage Primary Care

14 and Rural-Based Graduate Med15 ical Education

16 SEC. 331. STATE AND CONSORTIUM DEMONSTRATION

17 PROJECTS.

18 (a) IN GENERAL.—

19 (1) PARTICIPATION OF STATES AND CONSOR20 TIA.—The Secretary shall establish and conduct a

21 demonstration project to increase the number and

22 percentage of medical students entering primary

23 care practice relative to those entering nonprimary

24 care practice under which the Secretary shall make

25 payments in accordance with subsection (d)—
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1 (A) to not more than 10 States for the

2 purpose of testing and evaluating mechanisms

3 to meet the goals described in section 342; and

4 (B) to not more than 10 health care train5 ing consortia for the purpose of testing and

6 evaluating mechanisms to meet such goals.

7 (2) EXCLUSION OF CONSORTIA IN PARTICIPAT8 ING STATES.—A consortia may not receive payments

9 under the demonstration project under paragraph

10 (1)(B) if any of its members is located in a State

11 receiving payments under the project under para12 graph (1)(A).

13 (b) APPLICATIONS.—

14 (1) IN GENERAL.—Each State and consortium

15 desiring to conduct a demonstration project under

16 this section shall prepare and submit to the Sec17 retary an application, at such time, in such manner,

18 and containing such information as the Secretary

19 may require to assure that the State or consortium

20 will meet the goals described in section 342. In the

21 case of an application of a State, the application

22 shall include—

23 (A) information demonstrating that the

24 State has consulted with interested parties with

25 respect to the project, including State medical
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1 associations, State hospital associations, and

2 medical schools located in the State;

3 (B) an assurance that no hospital conduct4 ing an approved medical residency training pro5 gram in the State will lose more than 10 per6 cent of such hospital’s approved medical resi7 dency positions in any year as a result of the

8 project; and

9 (C) an explanation of a plan for evaluating

10 the impact of the project in the State.

11 (2) APPROVAL OF APPLICATIONS.—A State or

12 consortium that submits an application under para13 graph (1) may begin a demonstration project under

14 this subsection—

15 (A) upon approval of such application by

16 the Secretary; or

17 (B) at the end of the 60-day period begin18 ning on the date such application is submitted,

19 unless the Secretary denies the application dur20 ing such period.

21 (3) NOTICE AND COMMENT.—A State or con22 sortium shall issue a public notice on the date it

23 submits an application under paragraph (1) which

24 contains a general description of the proposed dem25 onstration project. Any interested party may com-
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1 ment on the proposed demonstration project to the

2 State or consortium or the Secretary during the 30-

3 day period beginning on the date the public notice

4 is issued.

5 (c) SPECIFIC REQUIREMENTS FOR PARTICIPANTS.—

6 (1) REQUIREMENTS FOR STATES.—Each State

7 participating in the demonstration project under this

8 subtitle shall use the payments provided under sub9 section (d) to test and evaluate either of the follow10 ing mechanisms to increase the number and percent11 age of medical students entering primary care prac12 tice relative to those entering nonprimary care prac13 tice:

14 (A) USE OF ALTERNATIVE WEIGHTING

15 FACTORS.—

16 (i) IN GENERAL.—The State may

17 make payments to hospitals in the State

18 for direct graduate medical education costs

19 in amounts determined under the meth20 odology provided under section 1886(h) of

21 the Social Security Act, except that the

22 State shall apply weighting factors that are

23 different than the weighting factors other24 wise set forth in section 1886(h)(4)(C) of

25 the Social Security Act.
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1 (ii) USE OF PAYMENTS FOR PRIMARY

2 CARE RESIDENTS.—In applying different

3 weighting factors under clause (i), the

4 State shall ensure that the amount of pay5 ment made to hospitals for costs attrib6 utable to primary care residents shall be

7 greater than the amount that would have

8 been paid to hospitals for costs attributable

9 to such residents if the State had applied

10 the weighting factors otherwise set forth in

11 section 1886(h)(4)(C) of the Social Secu12 rity Act.

13 (B) PAYMENTS FOR MEDICAL EDUCATION

14 THROUGH CONSORTIUM.—The State may make

15 payments for graduate medical education costs

16 through payments to a health care training con17 sortium (or through any entity identified by

18 such a consortium as appropriate for receiving

19 payments on behalf of the consortium) that is

20 established in the State but that is not other21 wise participating in the demonstration project.

22 (2) REQUIREMENTS FOR CONSORTIUM.—

23 (A) IN GENERAL.—In the case of a consor24 tium participating in the demonstration project

25 under this subtitle, the Secretary shall make
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1 payments for graduate medical education costs

2 through a health care training consortium

3 whose members provide medical residency train4 ing (or through any entity identified by such a

5 consortium as appropriate for receiving pay6 ments on behalf of the consortium).

7 (B) USE OF PAYMENTS.—

8 (i) IN GENERAL.—Each consortium

9 receiving payments under subparagraph

10 (A) shall use such funds to conduct activi11 ties which test and evaluate mechanisms to

12 increase the number and percentage of

13 medical students entering primary care

14 practice relative to those entering

15 nonprimary care practice, and may use

16 such funds for the operation of the consor17 tium.

18 (ii) PAYMENTS TO PARTICIPATING

19 PROGRAMS.—The consortium shall ensure

20 that the majority of the payments received

21 under subparagraph (A) are directed to

22 consortium members for primary care resi23 dency programs, and shall designate for

24 each resident assigned to the consortium a

25 hospital operating an approved medical
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1 residency training program for purposes of

2 enabling the Secretary to calculate the con3 sortium’s payment amount under the

4 project. Such hospital shall be the hospital

5 where the resident receives the majority of

6 the resident’s hospital-based, non7 ambulatory training experience.

8 (d) ALLOCATION OF PORTION OF MEDICARE GME

9 PAYMENTS FOR ACTIVITIES UNDER PROJECT.—Notwith10 standing any provision of title XVIII of the Social Security

11 Act, the following rules apply with respect to each State

12 and each health care training consortium participating in

13 the demonstration project established under this section

14 during a year:

15 (1) In the case of a State—

16 (A) the Secretary shall reduce the amount

17 of each payment made to hospitals in the State

18 during the year for direct graduate medical

19 education costs under section 1886(h) of the

20 Social Security Act by 3 percent; and

21 (B) the Secretary shall pay the State an

22 amount equal to the Secretary’s estimate of the

23 sum of the reductions made during the year

24 under subparagraph (A) (as adjusted by the

25 Secretary in subsequent years for over- or
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1 under-estimations in the amount estimated

2 under this subparagraph in previous years).

3 (2) In the case of a consortium—

4 (A) the Secretary shall reduce the amount

5 of each payment made to hospitals who are

6 members of the consortium during the year for

7 direct graduate medical education costs under

8 section 1886(h) of the Social Security Act by 3

9 percent; and

10 (B) the Secretary shall pay the consortium

11 an amount equal to the Secretary’s estimate of

12 the sum of the reductions made during the year

13 under subparagraph (A) (as adjusted by the

14 Secretary in subsequent years for over- or

15 under-estimations in the amount estimated

16 under this subparagraph in previous years).

17 (e) ADDITIONAL GRANT FOR PLANNING AND EVAL18 UATION.—

19 (1) IN GENERAL.—The Secretary may award

20 grants to States and consortia participating in the

21 demonstration project under this section for the pur22 pose of developing and evaluating such projects. A

23 State or consortia may conduct such an evaluation

24 or contract with a private entity to conduct the eval25 uation. Each State and consortia desiring to receive
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1 a grant under this paragraph shall prepare and sub2 mit to the Secretary an application, at such time, in

3 such manner, and containing such information as

4 the Secretary may require.

5 (2) AUTHORIZATION OF APPROPRIATIONS.—

6 There are authorized to be appropriated such sums

7 as may be necessary for grants under this paragraph

8 for fiscal years 1995 through 2000.

9 (f) DURATION.—A demonstration project under this

10 section shall be conducted for a period not to exceed 5

11 years. The Secretary may terminate a project if the Sec12 retary determines that the State or consortium conducting

13 the project is not in substantial compliance with the terms

14 of the application approved by the Secretary.

15 (g) EVALUATIONS AND REPORTS.—

16 (1) EVALUATIONS.—Each State or consortium

17 participating in the demonstration project shall sub18 mit to the Secretary a final evaluation within 360

19 days of the termination of the State or consortium’s

20 participation and such interim evaluations as the

21 Secretary may require.

22 (2) REPORTS TO CONGRESS.—Not later than

23 360 days after the first demonstration project under

24 this subtitle begins, and annually thereafter for each

25 year in which such a project is conducted, the Sec-
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1 retary shall submit a report to Congress which eval2 uates the effectiveness of the State and consortium

3 activities conducted under such projects and includes

4 any legislative recommendations determined appro5 priate by the Secretary.

6 (h) MAINTENANCE OF EFFORT.—Any funds available

7 for the activities covered by a demonstration project under

8 this subtitle shall supplement, and shall not supplant,

9 funds that are expended for similar purposes under any

10 State, regional, or local program.

11 SEC. 332. GOALS FOR PROJECTS.

12 The goals referred to in this section for a State or

13 consortium participating in the demonstration project

14 under this subtitle are as follows:

15 (1) The training of an equal number of physi16 cian and non-physician primary care providers.

17 (2) The recruiting of residents for graduate

18 medical education training programs who received a

19 portion of undergraduate training in a rural area.

20 (3) The allocation of not less than 50 percent

21 of the training spent in a graduate medical residency

22 training program at sites at which acute care inpa23 tient hospital services are not furnished.
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1 (4) The rotation of residents in approved medi2 cal residency training programs among practices

3 that serve residents of rural areas.

4 (5) The development of a plan under which,

5 after a 5-year transition period, not less than 50

6 percent of the residents who begin an initial resi7 dency period in an approved medical residency train8 ing program shall be primary care residents.

9 SEC. 333. DEFINITIONS.

10 In this subtitle:

11 (1) APPROVED MEDICAL RESIDENCY TRAINING

12 PROGRAM.—The term ‘‘approved medical residency

13 training program’’ has the meaning given such term

14 in section 1886(h)(5)(A) of the Social Security Act.

15 (2) HEALTH CARE TRAINING CONSORTIUM.—

16 The term ‘‘health care training consortium’’ means

17 a State, regional, or local entity consisting of at

18 least one of each of the following:

19 (A) A hospital operating an approved med20 ical residency training program at which resi21 dents receive training at ambulatory training

22 sites located in rural areas.

23 (B) A school of medicine or osteopathic

24 medicine.
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1 (C) A school of allied health or a program

2 for the training of physician assistants (as such

3 terms are defined in section 799 of the Public

4 Health Service Act).

5 (D) A school of nursing (as defined in sec6 tion 853 of the Public Health Service Act).

7 (3) PRIMARY CARE.—The term ‘‘primary care’’

8 means family practice, general internal medicine,

9 general pediatrics, and obstetrics and gynecology.

10 (4) RESIDENT.—The term ‘‘resident’’ has the

11 meaning given such term in section 1886(h)(5)(H)

12 of the Social Security Act.

13 (5) RURAL AREA.—The term ‘‘rural area’’ has

14 the meaning given such term in section

15 1886(d)(2)(D) of the Social Security Act.

16 TITLE IV—HOSPITAL ANTITRUST

17 FAIRNESS

18 SEC. 401. ANTITRUST EXEMPTION.

19 The antitrust laws shall not apply with respect to—

20 (1) the merger of, or the attempt to merge, 2

21 or more hospitals,

22 (2) a contract entered into solely by 2 or more

23 hospitals to allocate hospital services, or

24 (3) the attempt by only 2 or more hospitals to

25 enter into a contract to allocate hospital services,
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1 if each of such hospitals satisfies all of the requirements

2 of section 503 at the time such hospitals engage in the

3 conduct described in paragraph (1), (2), or (3), as the case

4 may be.

5 SEC. 402. REQUIREMENTS.

6 The requirements referred to in section 501 are as

7 follows:

8 (1) The hospital is located outside of a city, or

9 in a city that has less than 150,000 inhabitants, as

10 determined in accordance with the most recent data

11 available from the Bureau of the Census.

12 (2) In the most recently concluded calendar

13 year, the hospital received more than 40 percent of

14 its gross revenue from payments made under Fed15 eral programs.

16 (3) There is in effect with respect to the hos17 pital a certificate issued by the Health Care Financ18 ing Administration specifying that such Administra19 tion has determined that Federal expenditures would

20 be reduced, consumer costs would not increase, and

21 access to health care services would not be reduced,

22 if the hospital and the other hospitals that requested

23 such certificate merge, or allocate the hospital serv24 ices specified in such request, as the case may be.
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1 SEC. 403. DEFINITION.

2 For purposes of this title, the term ‘‘antitrust laws’’

3 has the meaning given such term in subsection (a) of the

4 first section of the Clayton Act (15 U.S.C. 12), except that

5 such term includes section 5 of the Federal Trade Com6 mission Act (15 U.S.C. 45) to the extent that such section

7 5 applies with respect to unfair methods of competition.

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