I

104TH CONGRESS

1ST SESSION H. R. 2411

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, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1995

Mr. ROBERTS (for himself, Mr. STENHOLM, Mr. GUNDERSON, and Mr.

POSHARD) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Ways and

Means and the Judiciary, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To 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, 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 Development Act’’.
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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. Study regarding designation as health professional shortage area; allocation of Corps members among shortage areas.

Sec. 203. Other provisions regarding National Health Service Corps.

Subtitle B—Incentives Under Other Programs

Sec. 211. Additional payments under medicare for physicians’ services furnished in shortage areas.

Sec. 212. Development of model State scope of practice law.

TITLE III—ASSISTANCE FOR INSTITUTIONAL PROVIDERS

Subtitle A—Hospital-Affiliated Primary Care Centers

Sec. 301. Hospital-affiliated primary care centers.

Subtitle B—Assistance to Rural Providers Under Medicare

Sec. 311. Establishment of rural emergency access care hospitals.

Sec. 312. Coverage of and payment for services.

Sec. 313. Effective date.

Subtitle C—Demonstration Projects to Encourage Primary Care and RuralBased Graduate Medical Education

Sec. 321. State and consortium demonstration projects.

Sec. 322. Goals for projects.

Sec. 323. Definitions.

TITLE IV—MEDICARE PAYMENT METHODOLOGIES

Sec. 401. Telemedicine services.

Sec. 402. HMO-risk contract program.

TITLE V—HOSPITAL ANTITRUST FAIRNESS

Sec. 501. Antitrust exemption.
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Sec. 502. Requirements.

Sec. 503. Definition.

TITLE VI—FINANCING

Sec. 601. Increase in medicare part B premium for individuals with high income.

Sec. 602. Termination of certain grant programs.

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

22 that the State has developed (or is in the process of
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1 developing) a plan to increase the access of residents

2 of a chronically underserved area to health care serv3 ices that meets the requirements of subsection (c),

4 together with such other information and assurances

5 as the Secretary may require.

6 (3) AMOUNT OF ASSISTANCE.—

7 (A) IN GENERAL.—Subject to subpara8 graph (B), the amount of assistance provided to

9 a State under this subsection with respect to

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

11 to—

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

13 amount equal to 100 percent of the

14 amounts expended by the State during the

15 year to implement the plan described in

16 paragraph (1) (as reported to the Sec17 retary in accordance with such require18 ments as the Secretary may impose);

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

20 an amount equal to 50 percent of the

21 amounts expended by the State during the

22 year to implement the plan; and

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

24 an amount equal to 33 percent of the
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1 amounts expended by the State during the

2 year to 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

22 periods.

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 rural health

8 network 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 the State of19 fices of rural health or through appropriate entities des20 ignated by such offices.

21 (e) AUTHORIZATION OF APPROPRIATIONS.—There

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

23 of fiscal years 1996 through 2000 to carry out this sec24 tion. Amounts appropriated under this section shall be

25 available until expended.
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1 SEC. 103. DEVELOPMENT GRANTS FOR NETWORKS.

2 (a) IN GENERAL.—The Secretary shall provide finan3 cial assistance to eligible entities for the purpose of provid4 ing for the development and implementation of community

5 rural health networks (as defined in section 104). In pro6 viding such assistance, the Secretary shall give priority to

7 eligible entities that will carry out such purpose in States

8 that have developed a plan under section 101.

9 (b) ELIGIBLE ENTITIES.—

10 (1) IN GENERAL.—An entity is eligible to re11 ceive financial assistance under this section only if

12 the entity meets the requirements of subparagraphs

13 (A) through (C) as follows:

14 (A) The entity—

15 (i) is based in a rural area;

16 (ii) is described in paragraph (2), (3),

17 or (4) of section 102(b); or

18 (iii) is a hospital-affiliated primary

19 care center (as defined in section 104).

20 (B) The entity is undertaking to develop

21 and implement a community rural health net22 work in one or more underserved rural areas

23 (as defined in section 104) with the active par24 ticipation of at least 3 health care providers or

25 facilities in the area.
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1 (C) The entity has consulted with the local

2 governments of the area to be served by the

3 network and with individuals who reside in the

4 area.

5 (2) COORDINATION WITH PROVIDERS OUTSIDE

6 OF AREA PERMITTED.—Nothing in this section shall

7 be construed as preventing an entity that coordi8 nates the delivery of services in an underserved rural

9 area with an entity outside the area from qualifying

10 for financial assistance under this section, or as pre11 venting an entity consisting of a consortia of mem12 bers located in adjoining States from qualifying for

13 such assistance.

14 (3) PERMITTING ENTITIES NOT RECEIVING

15 FUNDING FOR DEVELOPMENT OF PLAN TO RECEIVE

16 FUNDING FOR IMPLEMENTATION.—An entity that is

17 eligible to receive financial assistance under this sec18 tion may receive assistance to carry out activities de19 scribed in subsection (c)(1)(B) notwithstanding that

20 the entity does not receive assistance to carry out

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

22 (c) USE OF FUNDS.—

23 (1) IN GENERAL.—Financial assistance made

24 available to eligible entities under this section may

25 be used only—
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1 (A) for the development of a community

2 health network and the submission of the plan

3 for the network to the Secretary; and

4 (B) after the Secretary approves the plan

5 for the network, for activities to implement the

6 network, including (but not limited to)—

7 (i) establishing information systems,

8 including telecommunications,

9 (ii) recruiting health care providers,

10 (iii) providing services to enable indi11 viduals to have access to health care serv12 ices, including transportation and language

13 interpretation services (including interpre14 tation services for the hearing-impaired),

15 and

16 (iv) establishing and operating a com17 munity health advisor program described

18 in paragraph (2).

19 (2) COMMUNITY HEALTH ADVISOR PROGRAM.—

20 (A) PROGRAM DESCRIBED.—In paragraph

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

22 a program under which community health advi23 sors carry out the following activities:

24 (i) Collaborating efforts with health

25 care providers and related entities to facili-
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1 tate the provision of health services and

2 health-related social services.

3 (ii) Providing public education on

4 health promotion and disease prevention

5 and efforts to facilitate the use of available

6 health services and health-related social

7 services.

8 (iii) Providing health-related counsel9 ing.

10 (iv) Making referrals for available

11 health services and health-related social

12 services.

13 (v) Improving the ability of individ14 uals to use health services and health-relat15 ed social services under Federal, State,

16 and local programs through assisting indi17 viduals in establishing eligibility under the

18 programs.

19 (vi) Providing outreach services to in20 form the community of the availability of

21 the services provided under the program.

22 (B) COMMUNITY HEALTH ADVISOR DE23 FINED.—In subparagraph (A), the term ‘‘com24 munity health advisor’’ means, with respect to
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1 a community health advisor program, an indi2 vidual—

3 (i) who has demonstrated the capacity

4 to carry out one or more of the activities

5 carried out under the program; and

6 (ii) who, for not less than one year,

7 has been a resident of the community in

8 which the program is to be operated.

9 (3) LIMITATIONS ON ACTIVITIES FUNDED.—Fi10 nancial assistance made available under this section

11 may not be used for any of the following:

12 (A) For a telecommunications system un13 less such system is coordinated with, and does

14 not duplicate, a system existing in the area.

15 (B) For construction or remodeling of

16 health care facilities.

17 (4) LIMITATION ON AMOUNT AVAILABLE FOR

18 DEVELOPMENT OF NETWORK.—The amount of fi19 nancial assistance available for activities described in

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

21 not be made available for a period of time exceeding

22 1 year.

23 (d) APPLICATION.—

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

25 be provided under this section to an entity unless
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1 the entity has submitted to the Secretary, in a time

2 and manner specified by the Secretary, and had ap3 proved by the Secretary an application.

4 (2) INFORMATION TO BE INCLUDED.—Each

5 such application shall include—

6 (A) a description of the community rural

7 health network, including service area and ca8 pacity, and

9 (B) a description of how the proposed net10 work will utilize existing health care facilities in

11 a manner that avoids unnecessary duplication.

12 (e) AUTHORIZATION OF APPROPRIATIONS.—

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

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

15 1996 through 2000 to carry out this section.

16 Amounts appropriated under this section shall be

17 available until expended.

18 (2) ANNUAL LIMIT ON ASSISTANCE TO GRANT19 EE.—The amount of financial assistance provided to

20 an entity under this section during a year may not

21 exceed $250,000.

22 SEC. 104. DEFINITIONS.

23 (a) IN GENERAL.—

24 (1) COMMUNITY RURAL HEALTH NETWORK.—

25 For purposes of this title, the term ‘‘community
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1 rural health network’’ means a formal cooperative

2 arrangement between participating hospitals, physi3 cians, and other health care providers which—

4 (A) is located in an underserved rural

5 area;

6 (B) furnishes health care services to indi7 viduals residing in the area; and

8 (C) is governed by a board of directors se9 lected by participating health care providers

10 and residents of the area.

11 (2) HOSPITAL-AFFILIATED PRIMARY CARE CEN12 TER.—

13 (A) IN GENERAL.—For purposes of this

14 title, the term ‘‘hospital-affiliated primary care

15 center’’ means a distinct administrative unit of

16 a community hospital (as defined in subpara17 graph (B)) meeting the following requirement:

18 (i) The unit is located in, or adjacent

19 to, the hospital.

20 (ii) The unit delivers primary health

21 services, as defined in paragraph (1) of

22 section 330(b) of the Public Health Service

23 Act to a catchment area determined by the

24 hospital and approved by the Secretary.
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1 (iii) The unit provides referrals to

2 providers of supplemental health services,

3 as defined in paragraph (2) of such sec4 tion.

5 (iv) The services of the unit are deliv6 ered through a primary care group practice

7 (as defined in subparagraph (C)).

8 (v) To the extent practicable, primary

9 health services in the community hospital

10 are delivered only through the unit.

11 (vi) Qualified personnel trained in

12 triage are placed in the unit, the emer13 gency room, and the outpatient department

14 to screen and direct patients to the appro15 priate location for care.

16 (vii) Each patient of the unit has an

17 identified member of the group practice re18 sponsible for continuous management of

19 the patient, including emergency services

20 and referrals of the patients for inpatient

21 or outpatient services.

22 (viii) To the extent practicable, excess

23 facilities and equipment in or owned by the

24 community hospital are covered for use in

25 the unit.
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1 (ix) The unit and the hospital avoid

2 unnecessary duplication of facilities and

3 equipment, except that the unit may install

4 appropriate support equipment for routine

5 primary health services.

6 (x) The unit is maintained as a sepa7 rate and distinct cost and revenue center

8 for accounting purposes.

9 (xi) The unit is operated in accord10 ance with all of the requirements specified

11 for community health centers in section

12 330(e)(3) of the Public Health Service Act

13 (other than subparagraph (G)).

14 (xii) The hospital has an advisory

15 committee that—

16 (I) is composed of individuals a

17 majority of whom are health consum18 ers in the catchment area of the hos19 pital; and

20 (II) meets at least 6 times a year

21 to review the operations of the pri22 mary care center and develop rec23 ommendations to the governing board

24 of the hospital about the operation of
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1 the center and the types of services to

2 be provided.

3 (xiii) The unit maintains an informa4 tion program for its patients that fully dis5 closes—

6 (I) the covered professional serv7 ices and referral capabilities offered

8 by the unit; and

9 (II) the method by which pa10 tients of the unit may resolve griev11 ances about billing for covered profes12 sional services and the quality of such

13 services.

14 (B) COMMUNITY HOSPITAL.—For purposes

15 of this title, the term ‘‘community hospital’’

16 means a public general hospital, owned and op17 erated by a State, county or local unit of gov18 ernment, or a private community hospital

19 that—

20 (A) has less than 50 beds; and

21 (B) primarily serves—

22 (i) a medically underserved popu23 lation, as defined in section 330(b)(3) of

24 the Public Health Service Act; or
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1 (ii) a health professional shortage

2 area, as defined in section 332(a)(1) of

3 such Act.

4 (C) PRIMARY CARE GROUP PRACTICE.—

5 For purposes of this title, the term ‘‘primary

6 care group practice’’ means any combination of

7 3 or more primary care physicians who are—

8 (i) organized to provide primary

9 health services in a manner that is consist10 ent with the needs of the population

11 served;

12 (ii) located in, or adjacent to, the

13 community hospital;

14 (iii) who have admitting privileges at

15 the community hospital; and

16 (iv)(I) who are salaried by the hos17 pital such that a majority of the members

18 of the group practice is full time in the pri19 mary care center; or

20 (II) who are organized into a legal en21 tity (partnership, corporation, or profes22 sional association) that has a contract ap23 proved by the Secretary with the commu24 nity hospital to provide primary health

25 services.
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1 (b) OTHER DEFINITIONS.—For purposes of this title:

2 (1) The term ‘‘rural area’’ has the meaning

3 given such term in section 1886(d)(2)(D) of the So4 cial Security Act.

5 (2) The term ‘‘Secretary’’ means the Secretary

6 of Health and Human Services.

7 (3) The term ‘‘State’’ means each of the several

8 States, the District of Columbia, Puerto Rico, the

9 Virgin Islands, Guam, the Northern Mariana Is10 lands, and American Samoa.

11 (4) The term ‘‘underserved rural area’’ means

12 a rural area designated—

13 (A) as a health professional shortage area

14 under section 332(a) of the Public Health Serv15 ice Act; or

16 (B) as a chronically underserved area

17 under section 101.
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1 TITLE II—INCENTIVES FOR

2 HEALTH PROFESSIONALS TO

3 PRACTICE IN RURAL AREAS

4 Subtitle A—National Health

5 Service Corps Program

6 SEC. 201. NATIONAL HEALTH SERVICE CORPS LOAN REPAY7 MENTS EXCLUDED FROM GROSS INCOME.

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 (relating to

10 items specifically excluded from gross income) is amended

11 by redesignating section 137 as section 138 and by insert12 ing after section 136 the following new section:

13 ‘‘SEC. 137. NATIONAL HEALTH SERVICE CORPS LOAN RE14 PAYMENTS.

15 ‘‘(a) GENERAL RULE.—Gross income shall not in16 clude any qualified loan repayment.

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

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

19 any payment made on behalf of the taxpayer by the Na20 tional Health Service Corps Loan Repayment Program

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

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

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

24 amended by striking ‘‘Federal, State, or local’’ and insert25 ing ‘‘State or local’’.
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1 (c) CLERICAL AMENDMENT.—The table of sections

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

3 Revenue Code of 1986 is amended by striking the item

4 relating to section 137 and inserting the following:

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

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

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

6 this section shall apply to payments made under section

7 338B(g) of the Public Health Service Act after the date

8 of the enactment of this Act.

9 SEC. 202. STUDY REGARDING DESIGNATION AS HEALTH

10 PROFESSIONAL SHORTAGE AREA; ALLOCA11 TION OF CORPS MEMBERS AMONG SHORT12 AGE AREAS.

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

14 Human Services (in this section referred to as the ‘‘Sec15 retary’’) shall conduct a study for the purpose of determin16 ing the following:

17 (1) With respect to the designation of health

18 professional shortage areas under subpart II of part

19 D of title III of the Public Health Service Act—

20 (A) whether the statutory and administra21 tive criteria for the designation of such areas

22 should be modified to ensure that all areas with

23 significant shortages of health professionals re24 ceive such a designation; and
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1 (B) if so, the recommendations of the Sec2 retary for modifications in the criteria.

3 (2) With respect to the assignment of members

4 of the National Health Service Corps under such

5 subpart—

6 (A) whether the statutory and administra7 tive criteria for the assignment of Corps mem8 bers should be modified in order to ensure that

9 the members are equitably allocated among

10 health professional shortage areas; and

11 (B) if so, the recommendations of the Sec12 retary for modifications in the criteria.

13 (b) REPORT.—Not later than May 1, 1996, the Sec14 retary shall complete the study required in subsection (a)

15 and submit to the Congress a report describing the find16 ings made in the study.

17 SEC. 203. OTHER PROVISIONS REGARDING NATIONAL

18 HEALTH SERVICE CORPS.

19 (a) PRIORITY IN ASSIGNMENT OF CORPS MEMBERS;

20 COMMUNITY RURAL HEALTH NETWORKS.—Section

21 333A(a)(1)(B) of the Public Health Service Act (42

22 U.S.C. 254f–1(a)(1)(B)) is amended—

23 (1) in clause (iii), by striking ‘‘and’’ after the

24 semicolon at the end;
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1 (2) in clause (iv), by adding ‘‘and’’ after the

2 semicolon at the end; and

3 (3) by adding at the end the following clause:

4 ‘‘(v) is a participant in a community

5 rural health network, as defined in section

6 104 of the Rural Health Development

7 Act.’’.

8 (b) ALLOCATION FOR PARTICIPATION OF NURSES IN

9 SCHOLARSHIP PROGRAM.—Section 338H(b)(2) of the

10 Public Health Service Act (42 U.S.C. 254q(b)(2)) is

11 amended by adding at the end the following subparagraph:

12 ‘‘(C) Of the amounts appropriated under

13 paragraph (1) for fiscal year 1996 and subse14 quent fiscal years, the Secretary shall reserve

15 such amounts as may be necessary to ensure

16 that, of the aggregate number of individuals

17 who are participants in the Scholarship Pro18 gram, the total number who are being educated

19 as nurses or are serving as nurses, respectively,

20 is increased to 20 percent.’’.
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1 Subtitle B—Incentives Under Other

2 Programs

3 SEC. 211. ADDITIONAL PAYMENTS UNDER MEDICARE FOR

4 PHYSICIANS’ SERVICES FURNISHED IN

5 SHORTAGE AREAS.

6 (a) INCREASE IN AMOUNT OF ADDITIONAL PAY7 MENT.—Section 1833(m) of the Social Security Act (42

8 U.S.C. 1395l(m)) is amended by striking ‘‘10 percent’’

9 and inserting ‘‘20 percent’’.

10 (b) RESTRICTION TO PRIMARY CARE SERVICES.—

11 Section 1833(m) of such Act (42 U.S.C. 1395l(m)) is

12 amended by inserting after ‘‘physicians’ services’’ the fol13 lowing: ‘‘consisting of primary care services (as defined in

14 section 1842(i)(4))’’.

15 (c) EXTENSION OF PAYMENT FOR FORMER SHORT16 AGE AREAS.—

17 (1) IN GENERAL.—Section 1833(m) of the So18 cial Security Act (42 U.S.C. 1395l(m)) is amended

19 by striking ‘‘area,’’ and inserting ‘‘area (or, in the

20 case of an area for which the designation as a health

21 professional shortage area under such section is

22 withdrawn, in the case of physicians’ services fur23 nished to such an individual during the 3-year pe24 riod beginning on the effective date of the with25 drawal of such designation),’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) shall apply to physicians’ services

3 furnished in an area for which the designation as a

4 health professional shortage area under section

5 332(a)(1)(A) of the Public Health Service Act is

6 withdrawn on or after January 1, 1996.

7 (d) REQUIRING CARRIERS TO REPORT ON SERVICES

8 PROVIDED.—Section 1842(b)(3) of such Act (42 U.S.C.

9 1395u(b)(3)) is amended—

10 (1) by striking ‘‘and’’ at the end of subpara11 graph (I); and

12 (2) by inserting after subparagraph (I) the fol13 lowing new subparagraph:

14 ‘‘(J) will provide information to the Secretary

15 not later than 30 days after the end of the contract

16 year on the types of providers to whom the carrier

17 made additional payments during the year for cer18 tain physicians’ services pursuant to section

19 1833(m), together with a description of the services

20 furnished by such providers during the year; and’’.

21 (e) STUDY.—

22 (1) IN GENERAL.—The Secretary of Health and

23 Human Services shall conduct a study analyzing the

24 effectiveness of the provision of additional payments

25 under part B of the medicare program for physi-
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1 cians’ services provided in health professional short2 age areas in recruiting and retaining physicians to

3 provide services in such areas.

4 (2) REPORT.—Not later than 1 year after the

5 date of the enactment of this Act, the Secretary

6 shall submit to Congress a report on the study con7 ducted under paragraph (1), and shall include in the

8 report such recommendations as the Secretary con9 siders appropriate.

10 (f) EFFECTIVE DATE.—The amendments made by

11 subsections (a), (b), and (d) shall apply to physicians’

12 services furnished on or after January 1, 1996.

13 SEC. 212. DEVELOPMENT OF MODEL STATE SCOPE OF

14 PRACTICE LAW.

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

16 Human Services shall develop and publish a model law

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

18 individuals residing in underserved rural areas to health

19 care services by expanding the services which non-physi20 cian health care professionals may provide in such areas.

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

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

23 1 year after the date of the enactment of this Act.
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1 TITLE III—ASSISTANCE FOR

2 INSTITUTIONAL PROVIDERS

3 Subtitle A—Hospital-Affiliated

4 Primary Care Centers

5 SEC. 301. HOSPITAL-AFFILIATED PRIMARY CARE CENTERS.

6 Section 330 of the Public Health Service Act (42

7 U.S.C. 254c) is amended by adding at the end the follow8 ing subsection:

9 ‘‘(l) Of the amounts appropriated under subsection

10 (g)(1)(A) for a fiscal year, the Secretary shall reserve not

11 less than 10 percent, and not more than 20 percent, for

12 the establishment and operation of hospital-affiliated pri13 mary care centers, as defined in section 104 of the Rural

14 Health Development Act.’’.

15 Subtitle B—Assistance to Rural

16 Providers Under Medicare

17 SEC. 311. ESTABLISHMENT OF RURAL EMERGENCY ACCESS

18 CARE HOSPITALS.

19 (a) IN GENERAL.—Section 1861 of the Social Secu20 rity Act (42 U.S.C. 1395x) is amended by adding at the

21 end the following new subsection:
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1 ‘‘Rural Emergency Access Care Hospital; Rural

2 Emergency Access Care Hospital Services

3 ‘‘(oo)(1) The term ‘rural emergency access care hos4 pital’ means, for a fiscal year, a facility with respect to

5 which the Secretary finds the following:

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

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

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

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

10 the date of the enactment of this subsection.

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

12 low inpatient utilization rates and negative operating

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

14 access of individuals residing in the facility’s service

15 area to emergency services.

16 ‘‘(D) The facility has entered into (or plans to

17 enter into) an agreement with a hospital with a par18 ticipation agreement in effect under section 1866(a),

19 and under such agreement the hospital shall accept

20 patients transferred to the hospital from the facility

21 and receive data from and transmit data to the facil22 ity.

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

24 provide advanced cardiac life support services (as de-
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1 termined by the State in which the facility is lo2 cated) on-site at the facility on a 24-hour basis.

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

4 emergency medical services on a 24-hour basis.

5 ‘‘(G) The facility is a member of a community

6 rural health network under section 104 of the Rural

7 Health Development Act.

8 ‘‘(H) The facility meets such staffing require9 ments as would apply under section 1861(e) to a

10 hospital located in a rural area, except that—

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

12 standards relating to the number of hours dur13 ing a day, or days during a week, in which the

14 facility must be open, except insofar as the fa15 cility is required to provide emergency care on

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

17 (F); and

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

19 otherwise required to be provided by a full-time,

20 on-site dietician, pharmacist, laboratory techni21 cian, medical technologist, or radiological tech22 nologist on a part-time, off-site basis.

23 ‘‘(I) The facility meets the requirements appli24 cable to clinics and facilities under subparagraphs

25 (C) through (J) of paragraph (2) of section
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1 1861(aa) and of clauses (ii) and (iv) of the second

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

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

4 such paragraph, would meet the requirements if any

5 reference in such subparagraph to a ‘nurse practi6 tioner’ or to ‘nurse practitioners’ was deemed to be

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

8 ‘nurse practitioners or nurses’); except that in deter9 mining whether a facility meets the requirements of

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

11 that paragraph shall be applied as if any reference

12 to a ‘physician’ is a reference to a physician as de13 fined in section 1861(r)(1).

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

15 services’ means the following services provided by a rural

16 emergency access care hospital:

17 ‘‘(A) An appropriate medical screening exam18 ination (as described in section 1867(a)).

19 ‘‘(B) Necessary stabilizing examination and

20 treatment services for an emergency medical condi21 tion and labor (as described in section 1867(b)).

22 ‘‘(3) The term ‘inpatient rural emergency access care

23 hospital services’ means services described in paragraph

24 (2), furnished to an individual over a continuous period

25 not to exceed 24 hours (except that such services may be
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1 furnished over a longer period in the case of an individual

2 who is unable to leave the hospital because of inclement

3 weather) that would be inpatient hospital services if fur4 nished to an inpatient of a hospital by a hospital.’’.

5 (b) REQUIRING RURAL EMERGENCY ACCESS CARE

6 HOSPITALS TO MEET HOSPITAL ANTI-DUMPING RE7 QUIREMENTS.—Section 1867(e)(5) of such Act (42 U.S.C.

8 1395dd(e)(5)) is amended by striking ‘‘1861(mm)(1))’’

9 and inserting ‘‘1861(mm)(1)) and a rural emergency ac10 cess care hospital (as defined in section 1861(oo)(1))’’.

11 SEC. 312. COVERAGE OF AND PAYMENT FOR SERVICES.

12 (a) UNDER PART A.—

13 (1) COVERAGE.—Section 1812(a)(1) of the So14 cial Security Act (42 U.S.C. 1395d(a)(1)) is amend15 ed by striking ‘‘or inpatient rural primary care hos16 pital services’’ and inserting ‘‘inpatient rural pri17 mary care hospital services, or inpatient rural emer18 gency access care hospital services’’.

19 (2) APPLICATION OF DEDUCTIBLE AND COIN20 SURANCE.—(A) Sections 1813(a) and 1813(b)(3)(A)

21 of such Act (42 U.S.C. 1395e(a), 1395e(b)(3)(A))

22 are each amended by striking ‘‘services or inpatient

23 rural primary care hospital services’’ each place it

24 appears and inserting ‘‘services, inpatient rural pri-
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1 mary care hospital services, or inpatient rural emer2 gency access care hospital services’’.

3 (B) Section 1813(b)(3)(B) of such Act (42

4 U.S.C. 1395e(b)(3)(B)) is amended by inserting ‘‘,

5 inpatient rural emergency access care hospital serv6 ices,’’ after ‘‘inpatient rural primary care hospital

7 services’’.

8 (3) PAYMENT BASED ON REASONABLE COSTS.—

9 Section 1814 of such Act (42 U.S.C. 1395f) is

10 amended by adding at the end the following new

11 subsection:

12 ‘‘Payment for Inpatient Rural Emergency Access Care

13 Hospital Services

14 ‘‘(m) The amount of payment under this part for in15 patient rural primary care hospital services shall be equal

16 to the reasonable cost of such services (as determined

17 under section 1861(v)), less the amount the hospital may

18 charge as described in clause (ii) of section 1866(a)(2)(A),

19 but in no case may the payment for such services exceed

20 80 percent of such reasonable cost.’’.

21 (4) APPLICATION OF SPELL OF ILLNESS.—Sec22 tion 1861(a) of such Act (42 U.S.C. 1395x(a)) is

23 amended—

24 (A) in paragraph (1), by inserting ‘‘, inpa25 tient rural emergency access care hospital serv-
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1 ices,’’ after ‘‘inpatient rural primary care hos2 pital services’’; and

3 (B) in paragraph (2), by striking ‘‘hospital

4 or rural primary care hospital’’ and inserting

5 ‘‘hospital, rural primary care hospital, or rural

6 emergency access care hospital’’.

7 (b) UNDER PART B.—

8 (1) COVERAGE.—Section 1832(a)(2) of the So9 cial Security Act (42 U.S.C. 1395k(a)(2)) is amend10 ed—

11 (A) by striking ‘‘and’’ at the end of sub12 paragraph (I);

13 (B) by striking the period at the end of

14 subparagraph (J) and inserting ‘‘; and’’; and

15 (C) by adding at the end the following new

16 subparagraph:

17 ‘‘(K) rural emergency access care hospital

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

19 (2) PAYMENT BASED ON REASONABLE COSTS.—

20 Section 1833(a)(2) of such Act (42 U.S.C.

21 1395l(a)(2)) is amended—

22 (A) by striking ‘‘and’’ at the end of sub23 paragraph (D);

24 (B) by adding ‘‘and’’ at the end of sub25 paragraph (F); and
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1 (C) by adding at the end the following new

2 subparagraph:

3 ‘‘(G) with respect to rural emergency ac4 cess care hospital services, the reasonable cost

5 of such services (as determined under section

6 1861(v)), less the amount the hospital may

7 charge as described in clause (ii) of section

8 1866(a)(2)(A), but in no case may the payment

9 for such services exceed 80 percent of such rea10 sonable cost;’’.

11 SEC. 313. EFFECTIVE DATE.

12 The amendments made by this subtitle shall apply to

13 fiscal years beginning on or after October 1, 1995.

14 Subtitle C—Demonstration Proj15 ects to Encourage Primary Care

16 and Rural-Based Graduate Med17 ical Education

18 SEC. 321. STATE AND CONSORTIUM DEMONSTRATION

19 PROJECTS.

20 (a) IN GENERAL.—

21 (1) PARTICIPATION OF STATES AND CONSOR22 TIA.—The Secretary shall establish and conduct a

23 demonstration project to increase the number and

24 percentage of medical students entering primary

25 care practice relative to those entering nonprimary
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1 care practice under which the Secretary shall make

2 payments in accordance with subsection (d)—

3 (A) to not more than 10 States for the

4 purpose of testing and evaluating mechanisms

5 to meet the goals described in section 322; and

6 (B) to not more than 10 health care train7 ing consortia for the purpose of testing and

8 evaluating mechanisms to meet such goals.

9 (2) EXCLUSION OF CONSORTIA IN PARTICIPAT10 ING STATES.—A consortia may not receive payments

11 under the demonstration project under paragraph

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

13 receiving payments under the project under para14 graph (1)(A).

15 (b) APPLICATIONS.—

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

17 desiring to conduct a demonstration project under

18 this section shall prepare and submit to the Sec19 retary an application, at such time, in such manner,

20 and containing such information as the Secretary

21 may require to assure that the State or consortium

22 will meet the goals described in section 322. In the

23 case of an application of a State, the application

24 shall include—
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1 (A) information demonstrating that the

2 State has consulted with interested parties with

3 respect to the project, including State medical

4 associations, State hospital associations, and

5 medical schools located in the State;

6 (B) an assurance that no hospital conduct7 ing an approved medical residency training pro8 gram in the State will lose more than 10 per9 cent of such hospital’s approved medical resi10 dency positions in any year as a result of the

11 project; and

12 (C) an explanation of a plan for evaluating

13 the impact of the project in the State.

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

15 consortium that submits an application under para16 graph (1) may begin a demonstration project under

17 this subsection—

18 (A) upon approval of such application by

19 the Secretary; or

20 (B) at the end of the 60-day period begin21 ning on the date such application is submitted,

22 unless the Secretary denies the application dur23 ing such period.

24 (3) NOTICE AND COMMENT.—A State or con25 sortium shall issue a public notice on the date it
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1 submits an application under paragraph (1) which

2 contains a general description of the proposed dem3 onstration project. Any interested party may com4 ment on the proposed demonstration project to the

5 State or consortium or the Secretary during the 30-

6 day period beginning on the date the public notice

7 is issued.

8 (c) SPECIFIC REQUIREMENTS FOR PARTICIPANTS.—

9 (1) REQUIREMENTS FOR STATES.—Each State

10 participating in the demonstration project under this

11 subtitle shall use the payments provided under sub12 section (d) to test and evaluate either of the follow13 ing mechanisms to increase the number and percent14 age of medical students entering primary care prac15 tice relative to those entering nonprimary care prac16 tice:

17 (A) USE OF ALTERNATIVE WEIGHTING

18 FACTORS.—

19 (i) IN GENERAL.—The State may

20 make payments to hospitals in the State

21 for direct graduate medical education costs

22 in amounts determined under the meth23 odology provided under section 1886(h) of

24 the Social Security Act, except that the

25 State shall apply weighting factors that are
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1 different than the weighting factors other2 wise set forth in section 1886(h)(4)(C) of

3 the Social Security Act.

4 (ii) USE OF PAYMENTS FOR PRIMARY

5 CARE RESIDENTS.—In applying different

6 weighting factors under clause (i), the

7 State shall ensure that the amount of pay8 ment made to hospitals for costs attrib9 utable to primary care residents shall be

10 greater than the amount that would have

11 been paid to hospitals for costs attributable

12 to such residents if the State had applied

13 the weighting factors otherwise set forth in

14 section 1886(h)(4)(C) of the Social Secu15 rity Act.

16 (B) PAYMENTS FOR MEDICAL EDUCATION

17 THROUGH CONSORTIUM.—The State may make

18 payments for graduate medical education costs

19 through payments to a health care training con20 sortium (or through any entity identified by

21 such a consortium as appropriate for receiving

22 payments on behalf of the consortium) that is

23 established in the State but that is not other24 wise participating in the demonstration project.

25 (2) REQUIREMENTS FOR CONSORTIUM.—
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1 (A) IN GENERAL.—In the case of a consor2 tium participating in the demonstration project

3 under this subtitle, the Secretary shall make

4 payments for graduate medical education costs

5 through a health care training consortium

6 whose members provide medical residency train7 ing (or through any entity identified by such a

8 consortium as appropriate for receiving pay9 ments on behalf of the consortium).

10 (B) USE OF PAYMENTS.—

11 (i) IN GENERAL.—Each consortium

12 receiving payments under subparagraph

13 (A) shall use such funds to conduct activi14 ties which test and evaluate mechanisms to

15 increase the number and percentage of

16 medical students entering primary care

17 practice relative to those entering

18 nonprimary care practice, and may use

19 such funds for the operation of the consor20 tium.

21 (ii) PAYMENTS TO PARTICIPATING

22 PROGRAMS.—The consortium shall ensure

23 that the majority of the payments received

24 under subparagraph (A) are directed to

25 consortium members for primary care resi-
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1 dency programs, and shall designate for

2 each resident assigned to the consortium a

3 hospital operating an approved medical

4 residency training program for purposes of

5 enabling the Secretary to calculate the con6 sortium’s payment amount under the

7 project. Such hospital shall be the hospital

8 where the resident receives the majority of

9 the resident’s hospital-based, non10 ambulatory training experience.

11 (d) ALLOCATION OF PORTION OF MEDICARE GME

12 PAYMENTS FOR ACTIVITIES UNDER PROJECT.—Notwith13 standing any provision of title XVIII of the Social Security

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

15 and each health care training consortium participating in

16 the demonstration project established under this section

17 during a year:

18 (1) In the case of a State—

19 (A) the Secretary shall reduce the amount

20 of each payment made to hospitals in the State

21 during the year for direct graduate medical

22 education costs under section 1886(h) of the

23 Social Security Act by 3 percent; and

24 (B) the Secretary shall pay the State an

25 amount equal to the Secretary’s estimate of the
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1 sum of the reductions made during the year

2 under subparagraph (A) (as adjusted by the

3 Secretary in subsequent years for over- or

4 under-estimations in the amount estimated

5 under this subparagraph in previous years).

6 (2) In the case of a consortium—

7 (A) the Secretary shall reduce the amount

8 of each payment made to hospitals who are

9 members of the consortium during the year for

10 direct graduate medical education costs under

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

12 percent; and

13 (B) the Secretary shall pay the consortium

14 an amount equal to the Secretary’s estimate of

15 the sum of the reductions made during the year

16 under subparagraph (A) (as adjusted by the

17 Secretary in subsequent years for over- or

18 under-estimations in the amount estimated

19 under this subparagraph in previous years).

20 (e) ADDITIONAL GRANT FOR PLANNING AND EVAL21 UATION.—

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

23 grants to States and consortia participating in the

24 demonstration project under this section for the pur25 pose of planning and evaluating such projects. A
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1 State or consortia may conduct such planning and

2 evaluation activities or contract with a private entity

3 to conduct such activities. Each State and consortia

4 desiring to receive a grant under this paragraph

5 shall prepare and submit to the Secretary an appli6 cation, at such time, in such manner, and containing

7 such information as the Secretary may require.

8 (2) AUTHORIZATION OF APPROPRIATIONS.—

9 There are authorized to be appropriated for grants

10 under this paragraph $250,000 for fiscal year 1996,

11 and $100,000 for each of the fiscal years 1997

12 through 2001.

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

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

15 years. The Secretary may terminate a project if the Sec16 retary determines that the State or consortium conducting

17 the project is not in substantial compliance with the terms

18 of the application approved by the Secretary.

19 (g) EVALUATIONS AND REPORTS.—

20 (1) EVALUATIONS.—Each State or consortium

21 participating in the demonstration project shall sub22 mit to the Secretary a final evaluation within 360

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

24 participation and such interim evaluations as the

25 Secretary may require.
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1 (2) REPORTS TO CONGRESS.—Not later than

2 360 days after the first demonstration project under

3 this subtitle begins, and annually thereafter for each

4 year in which such a project is conducted, the Sec5 retary shall submit a report to Congress which eval6 uates the effectiveness of the State and consortium

7 activities conducted under such projects and includes

8 any legislative recommendations determined appro9 priate by the Secretary.

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

11 for the activities covered by a demonstration project under

12 this subtitle shall supplement, and shall not supplant,

13 funds that are expended for similar purposes under any

14 State, regional, or local program.

15 SEC. 322. GOALS FOR PROJECTS.

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

17 consortium participating in the demonstration project

18 under this subtitle are as follows:

19 (1) The training of an equal number of physi20 cian and non-physician primary care providers.

21 (2) The recruiting of residents for graduate

22 medical education training programs who received a

23 portion of undergraduate training in a rural area.

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

25 of the training spent in a graduate medical residency
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1 training program at sites at which acute care inpa2 tient hospital services are not furnished.

3 (4) The rotation of residents in approved medi4 cal residency training programs among practices

5 that serve residents of rural areas.

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

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

8 percent of the residents who begin an initial resi9 dency period in an approved medical residency train10 ing program shall be primary care residents.

11 SEC. 323. DEFINITIONS.

12 In this subtitle:

13 (1) APPROVED MEDICAL RESIDENCY TRAINING

14 PROGRAM.—The term ‘‘approved medical residency

15 training program’’ has the meaning given such term

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

17 (2) HEALTH CARE TRAINING CONSORTIUM.—

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

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

20 least one of each of the following:

21 (A) A hospital operating an approved med22 ical residency training program at which resi23 dents receive training at ambulatory training

24 sites located in rural areas.
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1 (B) A school of medicine or osteopathic

2 medicine.

3 (C) A school of allied health or a program

4 for the training of physician assistants (as such

5 terms are defined in section 799 of the Public

6 Health Service Act).

7 (D) A school of nursing (as defined in sec8 tion 853 of the Public Health Service Act).

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

10 means family practice, general internal medicine,

11 general pediatrics, and obstetrics and gynecology.

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

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

14 of the Social Security Act.

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

16 the meaning given such term in section

17 1886(d)(2)(D) of the Social Security Act.

18 TITLE IV—MEDICARE PAYMENT

19 METHODOLOGIES

20 SEC. 401. TELEMEDICINE SERVICES.

21 The Secretary of Health and Human Services shall

22 establish a methodology for making payments under part

23 B of the medicare program for telemedicine services fur24 nished on an emergency basis to individuals residing in
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1 an area designated as a health professional shortage area

2 (under section 332(a) of the Public Health Service Act).

3 SEC. 402. HMO-RISK CONTRACT PROGRAM.

4 (a) USE OF SINGLE NATIONAL AVERAGE PER CAP5 ITA COSTS FOR ORGANIZATIONS IN ALL GEOGRAPHIC

6 AREAS.—

7 (1) IN GENERAL.—Section 1876(a)(4) of the

8 Social Security Act (42 U.S.C. 1395mm(a)(4)) is

9 amended by striking ‘‘in a geographic area served by

10 an eligible organization or in a similar area,’’ and in11 serting ‘‘for all areas in the United States served by

12 eligible organizations with contracts under this sec13 tion’’.

14 (2) EFFECTIVE DATE.—The amendment made

15 by subsection (a) shall apply with respect to contract

16 years beginning with 1996.

17 (b) BUDGET NEUTRALITY.—The Secretary shall ad18 just the amount of payment made to eligible organizations

19 with a risk-sharing contract under section 1876 of the So20 cial Security Act for 1997 and subsequent years to ensure

21 that total payments to such organizations under such sec22 tion for the year do not exceed the amount which would

23 have been paid to such organizations during the year if

24 the amendment made by subsection (a) had not been en25 acted into law.
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1 TITLE V—HOSPITAL ANTITRUST

2 FAIRNESS

3 SEC. 501. ANTITRUST EXEMPTION.

4 The antitrust laws shall not apply with respect to—

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

6 or more hospitals,

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

8 hospitals to allocate hospital services, or

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

10 enter into a contract to allocate hospital services,

11 if each of such hospitals satisfies all of the requirements

12 of section 502 at the time such hospitals engage in the

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

14 may be.

15 SEC. 502. REQUIREMENTS.

16 The requirements referred to in section 501 are as

17 follows:

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

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

20 determined in accordance with the most recent data

21 available from the Bureau of the Census.

22 (2) In the most recently concluded calendar

23 year, the hospital received more than 40 percent of

24 its gross revenue from payments made under Fed25 eral programs.
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1 (3) There is in effect with respect to the hos2 pital a certificate issued by the Health Care Financ3 ing Administration specifying that such Administra4 tion has determined that Federal expenditures would

5 be reduced, consumer costs would not increase, and

6 access to health care services would not be reduced,

7 if the hospital and the other hospitals that requested

8 such certificate merge, or allocate the hospital serv9 ices specified in such request, as the case may be.

10 SEC. 503. DEFINITION.

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

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

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

14 such term includes section 5 of the Federal Trade Com15 mission Act (15 U.S.C. 45) to the extent that such section

16 5 applies with respect to unfair methods of competition.

17 TITLE VI—FINANCING

18 SEC. 601. INCREASE IN MEDICARE PART B PREMIUM FOR

19 INDIVIDUALS WITH HIGH INCOME.

20 (a) IN GENERAL.—Subchapter A of chapter 1 of the

21 Internal Revenue Code of 1986 is amended by adding at

22 the end thereof the following new part:

23 ‘‘PART VIII—MEDICARE PART B PREMIUMS FOR

24 HIGH-INCOME INDIVIDUALS

‘‘Sec. 59B. Medicare part B premium tax.
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1 ‘‘SEC. 59B. MEDICARE PART B PREMIUM TAX.

2 ‘‘(a) IMPOSITION OF TAX.—In the case of an individ3 ual to whom this section applies for the taxable year, there

4 is hereby imposed (in addition to any other tax imposed

5 by this subtitle) a tax for such taxable year equal to the

6 aggregate of the Medicare part B premium taxes for each

7 of the months during such year that such individual is

8 covered by Medicare part B.

9 ‘‘(b) INDIVIDUALS TO WHOM SECTION APPLIES.—

10 This section shall apply to any individual for any taxable

11 year if—

12 ‘‘(1) such individual is covered under Medicare

13 part B for any month during such year, and

14 ‘‘(2) the modified adjusted gross income of the

15 taxpayer for such taxable year exceeds the threshold

16 amount.

17 ‘‘(c) MEDICARE PART B PREMIUM TAX FOR

18 MONTH.—

19 ‘‘(1) IN GENERAL.—The Medicare part B premium tax for any month is 2 20 ⁄3 the amount equal to

21 the excess of—

22 ‘‘(A) 200 percent of the monthly actuarial

23 rate for enrollees age 65 and over determined

24 for that calendar year under section 1839(b) of

25 the Social Security Act, over
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1 ‘‘(B) the total monthly premium under sec2 tion 1839 of the Social Security Act (deter3 mined without regard to subsections (b) and (f)

4 of section 1839 of such Act).

5 ‘‘(2) PHASEIN OF TAX.—If the modified ad6 justed gross income of the taxpayer for any taxable

7 years exceeds the threshold amount by less than

8 $25,000, the Medicare part B premium tax for any

9 month during such taxable year shall be an amount

10 which bears the same ratio to the amount deter11 mined under paragraph (1) (without regard to this

12 paragraph) as such excess bears to $25,000. The

13 preceding sentence shall not apply to any individual

14 whose threshold amount is zero.

15 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—

16 For purposes of this section—

17 ‘‘(1) THRESHOLD AMOUNT.—The term ‘thresh18 old amount’ means—

19 ‘‘(A) except as otherwise provided in this

20 paragraph, $100,000,

21 ‘‘(B) $125,000 in the case of a joint re22 turn, and

23 ‘‘(C) zero in the case of a taxpayer who—
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1 ‘‘(i) is married at the close of the tax2 able year but does not file a joint return

3 for such year, and

4 ‘‘(ii) does not live apart from his

5 spouse at all times during the taxable year.

6 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—

7 The term ‘modified adjusted gross income’ means

8 adjusted gross income—

9 ‘‘(A) determined without regard to sections

10 135, 911, 931, and 933, and

11 ‘‘(B) increased by the amount of interest

12 received or accrued by the taxpayer during the

13 taxable year which is exempt from tax.

14 ‘‘(3) MEDICARE PART B COVERAGE.—An indi15 vidual shall be treated as covered under Medicare

16 part B for any month if a premium is paid under

17 part B of title XVIII of the Social Security Act for

18 the coverage of the individual under such part for

19 the month.

20 ‘‘(4) MARRIED INDIVIDUAL.—The determina21 tion of whether an individual is married shall be

22 made in accordance with section 7703.’’
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1 (b) CLERICAL AMENDMENT.—The table of parts for

2 subchapter A of chapter 1 of such Code is amended by

3 adding at the end thereof the following new item:

‘‘Part VIII. Medicare Part B Premiums For High-Income Individuals.’’

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to months after December 1995

6 in taxable years ending after December 31, 1995.

7 SEC. 602. TERMINATION OF CERTAIN GRANT PROGRAMS.

8 Notwithstanding any other provision of law, no funds

9 are authorized to be appropriated to carry out the follow10 ing programs for fiscal year 1996 or any subsequent fiscal

11 year:

12 (A) The grant program for rural health

13 transition under section 4005(e) of the Omni14 bus Budget Reconciliation Act of 1987.

15 (B) The program for rural outreach grants

16 (which program was, for fiscal year 1995, car17 ried out by the Health Resources and Services

18 Administration with funds made available under

19 Public Law 103–333 for such grants).

20 (C) The telemedicine grant program

21 (which program was, for fiscal year 1995, car22 ried out by the Health Resources and Services

23 Administration with funds made available under

24 Public Law 103–333 for rural health research).
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1 (D) The program under section 338J of

2 the Public Health Service Act (relating to State

3 offices of rural health).

4 (E) The programs under parts A through

5 C of title XII of the Public Health Service Act

6 (relating to trauma care).

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