I

104TH CONGRESS

1ST SESSION H. R. 2175

To amend the Public Health Service Act and the Social Security Act to

improve the access of rural residents to quality health care by consolidating various categorical programs into a single program of grants to

the States, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 2, 1995

Mr. WILLIAMS introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee on Ways and

Means, for a period to be subsequently determined by the Speaker, in

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

A BILL

To amend the Public Health Service Act and the Social

Security Act to improve the access of rural residents

to quality health care by consolidating various categorical

programs into a single program of grants to the States,

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.

4 This Act may be cited as the ‘‘Rural Health Consoli5 dated Grant Act’’.
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1 TITLE I—CONSOLIDATION OF

2 PROGRAMS REGARDING

3 HEALTH OF RURAL POPU4 LATIONS

5 Subtitle A—Provisions Relating to

6 Public Health Service Act

7 SEC. 101. PROVISIONS RELATING TO PUBLIC HEALTH

8 SERVICE ACT.

9 The Public Health Service Act (42 U.S.C. 201 et

10 seq.) is amended by adding at the end the following title:

11 ‘‘TITLE XXVII—HEALTH OF

12 RURAL POPULATIONS

13 ‘‘Subtitle A—Consolidated Grants

14 Regarding Health of Rural Pop15 ulations

16 ‘‘SEC. 2701. FORMULA GRANTS TO STATES.

17 ‘‘(a) IN GENERAL.—In the case of each State that

18 in accordance with section 2707 submits to the Secretary

19 an application for fiscal year 1996 or any subsequent fis20 cal year, the Secretary shall make a grant for the year

21 to the State for the purposes specified in section 2703(1).

22 The grant shall consist of the allotment determined for

23 the State under section 2708.
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1 ‘‘(b) ADMINISTRATOR OF FEDERAL PROGRAM.—The

2 Secretary shall carry out this subtitle acting through the

3 Director of the Office of Rural Health Policy.

4 ‘‘(c) ADMINISTRATOR OF STATE PROGRAMS.—A

5 funding agreement under subsection (a) for a State for

6 a fiscal year is that the expenditure of the grant to the

7 State under such subsection will be administered

8 through—

9 ‘‘(1) the State office of rural health (operated

10 pursuant to section 338J, as such section was in ef11 fect for fiscal years 1991 through 1995); or

12 ‘‘(2) a public or nonprofit private entity des13 ignated by the State and approved by the Director

14 of the Office of Rural Health Policy.

15 ‘‘SEC. 2702. STATE DISCRETION.

16 ‘‘With respect to the expenditure by a State of a

17 grant under section 2701 for a fiscal year, the State has

18 discretion to select, from among the purposes described

19 in section 2703(1), the purposes for which the grant is

20 expended.

21 ‘‘SEC. 2703. EXPENDITURE OF GRANT; EXPANDED SCOPE

22 REGARDING RELEVANT PROGRAMS AND

23 FUNDS.

24 ‘‘Funding agreements under section 2701 for a State

25 for a fiscal year are as follows:
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1 ‘‘(1) The grant under such section will be ex2 pended exclusively for the following purposes (re3 garding the health of rural populations in the State):

4 ‘‘(A) To develop integrated health net5 works.

6 ‘‘(B) To develop systems for providing

7 emergency medical services.

8 ‘‘(C) To develop telemedicine systems (as

9 defined in section 2741).

10 ‘‘(D) To recruit and retain health care pro11 viders.

12 ‘‘(E) To carry out any activity that was

13 authorized to be carried out with amounts pro14 vided to the States under any of the programs

15 that were repealed (or otherwise terminated) by

16 title II of the Rural Health Consolidated Grant

17 Act.

18 ‘‘(F) To carry out activities that are au19 thorized by the State in collaboration with the

20 Director of the Office.

21 ‘‘(2) In the case of the purposes selected under

22 paragraph (1) by the State, the State will give spe23 cial consideration to the following in expending the

24 grant:
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1 ‘‘(A) To carrying out the purposes through

2 one or more consortia, each of which consists of

3 three or more community organizations. Such

4 consortia may include for-profit entities, subject

5 to section 2706(a)(5).

6 ‘‘(B) To utilizing entities that have admin7 istrative offices within the rural areas to be

8 served by the entity.

9 ‘‘(C) To expending a substantial majority

10 of the grant within the rural areas that are to

11 be served or at the direction of one or more en12 tities located within those same areas.

13 ‘‘(D) To utilizing entities and facilities

14 that were serving rural areas of the State as of

15 the date of submission of an application for a

16 grant by the State.

17 ‘‘(E) To utilizing entities that will have the

18 financial capacity to continue serving rural

19 areas after assistance under the grant for the

20 entities is terminated.

21 ‘‘(3) The State will in expending the grant give

22 special consideration to developing integrated health

23 networks for the provision of primary health care,

24 including preventive health services.
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1 ‘‘SEC. 2704. TECHNICAL ASSISTANCE; MATCHING FUNDS.

2 ‘‘(a) REQUIREMENT OF TECHNICAL ASSISTANCE FOR

3 RURAL AREAS.—A funding agreement under section 2701

4 for a State for a fiscal year is that, in the case of the

5 entities to which the State provides amounts from the

6 grant to carry out activities for rural areas, the State will

7 make available to the entities technical assistance in carry8 ing out the activities.

9 ‘‘(b) MATCHING FUNDS.—With respect to the costs

10 of the programs to be carried out by a State with a grant

11 under section 2701, a funding agreement under such sec12 tion for the State for a fiscal year is that the State will

13 make available (directly or through donations from public

14 or private entities) non-Federal contributions toward such

15 costs in an amount that is not less than $1 for each $4

16 of Federal funds provided in the grant.

17 ‘‘SEC. 2705. EXERCISE OF STATE DISCRETION; GOALS AND

18 OBJECTIVES; ANNUAL REPORT.

19 ‘‘(a) EXERCISE OF STATE DISCRETION; PARTICIPA20 TION OF STATE RESIDENTS.—With respect to the pur21 poses that a State has selected pursuant to section 2703

22 regarding the expenditure of a grant under section 2701

23 for a fiscal year, conditions for the receipt of the grant

24 are as follows:

25 ‘‘(1) The application submitted under section

26 2707 specifies the purposes the State has selected.
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1 ‘‘(2) The application demonstrates that, in pre2 paring the application (including provisions included

3 pursuant to subsection (b)), the State consulted with

4 members of the public throughout rural areas in the

5 State, with a reasonable number and variety of

6 health care providers who provide services in such

7 areas, and with local governments in such areas.

8 ‘‘(b) GOALS AND OBJECTIVES REGARDING HEALTH

9 OF RURAL POPULATIONS.—Conditions for the receipt of

10 a grant under section 2701 for a fiscal year are that the

11 application submitted by the State under section 2707

12 demonstrates that the State has complied with the follow13 ing:

14 ‘‘(1) The State has identified the needs of rural

15 populations in the State regarding the purposes de16 scribed in section 2703(1), including an identifica17 tion of any deficiencies in the health status of such

18 populations.

19 ‘‘(2) The State has determined goals and objec20 tives regarding such purposes; the means to be uti21 lized to meet such goals and objectives; and the

22 dates by which the State expects to meet the various

23 goals and objectives.

24 ‘‘(3) The State has determined a methodology

25 for measuring the progress of the State toward
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1 meeting the goals and objectives, and to the extent

2 practicable, the methodology conforms to any appli3 cable guidelines that the Director of the Office has

4 established for uniformity in the collection and re5 porting of data in order to provide for the com6 parability of the data.

7 ‘‘(c) IMPLEMENTATION OF DECISIONS BY STATE.—

8 Funding agreements under section 2701 for a State for

9 a fiscal year are as follows:

10 ‘‘(1) The grant under such section will be ex11 pended in accordance with the purposes that, pursu12 ant to subsection (a), are specified in the application

13 submitted under section 2707.

14 ‘‘(2) If during the fiscal year the State elects to

15 make modifications in the application regarding such

16 purposes, the State will make the modifications in

17 accordance with subsection (a)(2) and will submit to

18 the Director of the Office a description of the modi19 fications (including a description of the effect of the

20 modifications on the provisions included in the appli21 cation pursuant to subsection (b)).

22 ‘‘(d) ANNUAL REPORT.—A funding agreement under

23 section 2701 for a State for a fiscal year is that, after

24 the end of the fiscal year, the State will submit to the

25 Director of the Office (not later than the date specified
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1 by the Director) a report describing, in terms of the mat2 ters specified in subsection (b), the activities carried out

3 under the grant.

4 ‘‘SEC. 2706. LIMITATIONS ON EXPENDITURES OF GRANT.

5 ‘‘(a) LIMITATIONS.—A funding agreement under sec6 tion 2701 for a State for a fiscal year is that the grant

7 under such section will not be expended—

8 ‘‘(1) to provide inpatient health services;

9 ‘‘(2) to conduct research projects;

10 ‘‘(3) to purchase or improve land, or to pur11 chase, construct, or permanently improve (other

12 than minor remodeling) any building or other facil13 ity;

14 ‘‘(4) to satisfy any requirement under other

15 Federal programs that non-Federal funds be pro16 vided as a condition of the receipt of Federal funds;

17 or

18 ‘‘(5) to provide financial assistance to any en19 tity other than a public or nonprofit private entity.

20 ‘‘(b) ADMINISTRATIVE EXPENSES.—A funding agree21 ment under section 2701 for a State for a fiscal year is

22 that not more than $75,000 of the grant under such sec23 tion will be expended for administrative expenses regard24 ing the grant.
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1 ‘‘SEC. 2707. APPLICATION FOR GRANT.

2 ‘‘The Director of the Office may make a grant under

3 section 2701 only if an application for the grant is submit4 ted to the Director by the date specified by the Director;

5 the application meets the requirements established in this

6 subtitle for the application; and the application is in such

7 form, is made in such manner, and contains such agree8 ments, assurances, and information as may be necessary

9 for the Director to carry out this title.

10 ‘‘SEC. 2708. AMOUNT OF ALLOTMENT.

11 ‘‘(a) IN GENERAL.—For purposes of section 2701(a),

12 the allotment determined under this section for a State

13 for a fiscal year is an amount determined by the Director

14 of the Office through a formula established by the Direc15 tor on the basis of the following four factors:

16 ‘‘(1) The number of individuals living in rural

17 areas in the State.

18 ‘‘(2) The extent of poverty in rural areas in the

19 State.

20 ‘‘(3) The extent to which primary health care is

21 available in rural areas in the State.

22 ‘‘(4) The extent to which individuals living in

23 rural areas in the State are a significant distance

24 from sites at which health services are available.

25 ‘‘(b) SUBMISSION TO CONGRESS OF FORMULA.—In

26 establishing a formula under subsection (a), the Director
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1 of the Office shall submit to the Congress a report that

2 specifies the formula the Director intends to apply under

3 such subsection and that provides a description of the ef4 fect of the formula on the States. The formula may not

5 take effect any earlier than 60 days after the date on

6 which the report is submitted to the Congress.

7 ‘‘(c) DISPOSITION OF CERTAIN FUNDS.—

8 ‘‘(1) IN GENERAL.—Of the amounts available

9 for a fiscal year for grants under section 2701,

10 amounts described in paragraph (2), if any, shall be

11 allotted by the Director of the Office as grants to

12 States that submit applications in accordance with

13 section 2707 for the fiscal year. The amount of such

14 a grant for a State shall be determined in a manner

15 equivalent to the manner in which the amount of a

16 grant was otherwise determined under this section

17 for the State for the fiscal year, and the grant shall

18 be subject to the same conditions as grants under

19 section 2701.

20 ‘‘(2) SPECIFICATION OF AMOUNTS.—The

21 amounts referred to in paragraph (1) for a fiscal

22 year are any amounts that are not paid under sec23 tion 2701 to the States for the fiscal year as a result

24 of—
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1 ‘‘(A) the failure of one or more States to

2 submit an application in accordance with sec3 tion 2707 for the fiscal year; or

4 ‘‘(B) one or more States informing the Di5 rector of the Office that the State does not in6 tend to expend the full amount of the grant

7 made to the State under section 2701 for the

8 fiscal year.

9 ‘‘Subtitle B—Administrator of

10 Program; Other Duties

11 ‘‘SEC. 2731. ADMINISTRATOR.

12 ‘‘(a) IN GENERAL.—There is established within the

13 Office of the Secretary an office to be known as the Office

14 of Rural Health Policy, which shall be headed by a Direc15 tor. The provisions of this section are subject to subsection

16 (c).

17 ‘‘(b) DUTIES.—With respect to the health of rural

18 populations, the Director of the Office shall provide advice

19 to the Secretary regarding the effects of Federal policies;

20 coordinate activities within the Department of Health and

21 Human Services; provide information to the Secretary on

22 the activities of other Federal agencies; provide for the col23 lection and dissemination of information; provide for re24 search centers; provide for activities regarding the recruit25 ment and retention of health care providers; and provide
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1 technical assistance. An advisory committee may be estab2 lished in order to advise the Secretary and the Director

3 of the Office regarding the health of residents of rural

4 areas and the provision and financing of health care serv5 ices in those same areas. The Director of the Office may

6 periodically submit to the Congress reports regarding the

7 health of such residents.

8 ‘‘(c) RELATIONSHIP TO MEDICARE AND MEDICAID

9 PROGRAMS.—The duties established in this section for the

10 Director of the Office do not apply with respect to the

11 programs established in titles XVIII and XIX of the Social

12 Security Act.

13 ‘‘Subtitle C—General Provisions

14 ‘‘SEC. 2741. DEFINITIONS.

15 ‘‘For purposes of this title:

16 ‘‘(1) The term ‘funding agreement’, with re17 spect to a grant under section 2701 to a State,

18 means an agreement that is required as a condition

19 of receiving the grant. The Director of the Office

20 may make such a grant only if the State involved

21 makes each funding agreement described in subtitle

22 A.

23 ‘‘(2) The term ‘Office’ means the Office of

24 Rural Health Policy, unless the context of usage in25 dicates otherwise.
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1 ‘‘(3) The term ‘rural area’ means areas that are

2 outside any standard metropolitan statistical area.

3 ‘‘(4) The term ‘telemedicine system’ means a

4 system that uses telecommunications to transmit im5 ages for medical diagnosis and patient care between

6 two sites that are distant from each other. Such sys7 tems include patient counseling and clinical training

8 of residents and health professions students when

9 such training enables the provision of health care.

10 ‘‘SEC. 2742. FUNDING.

11 ‘‘(a) AUTHORIZATION OF APPROPRIATIONS.—For the

12 purpose of carrying out this title, there are authorized to

13 be appropriated $85,000,000 for fiscal year 1996, and

14 such sums as may be necessary for each of the fiscal years

15 1997 through 2000.

16 ‘‘(b) LIMITATION REGARDING OFFICE OF RURAL

17 HEALTH POLICY.—Of the amounts appropriated under

18 subsection (a) for a fiscal year, the Director of the Office

19 may reserve not more than $10,000,000 for carrying out

20 section 2731.’’.
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1 Subtitle B—Provisions Relating to

2 Social Security Act

3 SEC. 111. CONFORMING AMENDMENT REGARDING RELA4 TIONSHIP TO MEDICARE AND MEDICAID PRO5 GRAMS.

6 Section 711 of the Social Security Act (42 U.S.C.

7 912) is amended to read as follows:

8 ‘‘RURAL HEALTH POLICY

9 ‘‘SEC. 711. (a) With respect to the programs estab10 lished under titles XVIII and XIX, the Director of the

11 Office of Rural Health Policy (in this section referred to

12 as the ‘Office’) shall provide advice to the Secretary re13 garding the effects that such programs have on the health

14 of rural populations. Such advice shall include advice on

15 the effects of current policies and proposed statutory, reg16 ulatory, administrative, and budgetary changes in such

17 programs on the financial viability of small rural hospitals,

18 the ability of rural areas (and rural hospitals in particular)

19 to attract and retain physicians and other health profes20 sionals, and access to (and the quality of) health care in

21 rural areas.

22 ‘‘(b) The Director of the Office shall oversee compli23 ance with the requirements of section 1102(b) of this Act

24 and section 4403 of the Omnibus Budget Reconciliation
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1 Act of 1987 (as such section pertains to rural health is2 sues).

3 ‘‘(c) With respect to the effects that the programs

4 established under titles XVIII and XIX have on the health

5 of rural populations, the Director of the Office shall—

6 ‘‘(1) provide for the collection and dissemina7 tion of information;

8 ‘‘(2) coordinate activities within the Depart9 ment of Health and Human Services; and

10 ‘‘(3) provide information to the Secretary and

11 others in such Department with respect to the activi12 ties of other Federal departments and agencies.

13 ‘‘(d) For the purpose of carrying out this section,

14 there are authorized to be appropriated such sums as may

15 be necessary for each of the fiscal years 1996 through

16 2000.’’.

17 TITLE II—REPEAL OF CATEGOR18 ICAL PROGRAMS REGARDING

19 HEALTH OF RURAL POPU20 LATIONS

21 Subtitle A—Programs Relating to

22 Public Health Service Act

23 SEC. 201. PUBLIC HEALTH SERVICE ACT; REPEAL OF CAT24 EGORICAL PROGRAMS.

25 (a) STATUTORY PROVISIONS.—
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1 (1) DEMONSTRATIONS REGARDING DELIVERY

2 SYSTEMS.—With respect to activities under section

3 902(b)(1) of the Public Health Service Act, the Ad4 ministrator for Health Care Policy and Research

5 shall, effective October 1, 1995, terminate all dem6 onstration projects that were in operation as of the

7 day before such date. On or after January 1, 1996,

8 such Administrator may establish additional dem9 onstration projects under such section, subject to the

10 extent of amounts made available in appropriations

11 Acts.

12 (2) TRAUMA CARE.—Effective October 1, 1995,

13 title XII of the Public Health Service Act (42 U.S.C.

14 300d et seq.) is amended by striking parts A

15 through C.

16 (3) SPECIAL PROJECTS REGARDING HEALTH

17 PROFESSIONS TRAINING.—Effective October 1,

18 1995, section 778 of the Public Health Service Act

19 (42 U.S.C. 294p) is repealed.

20 (4) STATE OFFICES OF RURAL HEALTH.—Ef21 fective October 1, 1995, section 338J of the Public

22 Health Service Act (42 U.S.C. 254r) is repealed.

23 (b) ADMINISTRATIVE INITIATIVES.—

24 (1) OUTREACH GRANTS.—
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1 (A) Effective October 1, 1995, the pro2 gram specified in subparagraph (B) is termi3 nated.

4 (B) The program referred to in subpara5 graph (A)—

6 (i) is referred to as the program for

7 rural outreach grants;

8 (ii) is carried out by the Adminis9 trator of the Health Resources and Serv10 ices Administration; and

11 (iii) is carried out for fiscal year 1995

12 with amounts that, under Public Law 103–

13 333, are made available for rural outreach

14 grants.

15 (2) TELECOMMUNICATIONS GRANTS.—

16 (A) Effective October 1, 1995, the pro17 gram specified in subparagraph (B) is termi18 nated.

19 (B) The program referred to in subpara20 graph (A)—

21 (i) is referred to as the telecommuni22 cations grant program;

23 (ii) is carried out by the Adminis24 trator of the Health Resources and Serv25 ices Administration; and
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1 (iii) is carried out for fiscal year 1995

2 with amounts that, under Public Law 103–

3 333, are made available for rural health re4 search.

5 Subtitle B—Programs Relating to

6 Social Security Act

7 SEC. 211. SOCIAL SECURITY ACT AND RELATED PROVI8 SIONS; REPEAL OF CATEGORICAL PRO9 GRAMS.

10 (a) STATUTORY PROVISION; GRANT PROGRAM FOR

11 RURAL HEALTH CARE TRANSITION.—Effective October

12 1, 1995, section 4005 of the Omnibus Budget Reconcili13 ation Act of 1987 (101 Stat. 1330–47; Public Law 100–

14 203) is amended by striking subsection (e) (42 U.S.C.

15 1395ww note).

16 (b) ADMINISTRATIVE INITIATIVE; RURAL HEALTH

17 SYSTEM DELIVERY MODELS.—

18 (1) IN GENERAL.—Effective October 1, 1995,

19 the program specified in paragraph (2) is termi20 nated.

21 (2) SPECIFICATION OF PROGRAM.—The pro22 gram referred to in paragraph (1)—

23 (A) is referred to as the program to assist

24 States in developing innovative rural health sys25 tem delivery models;
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1 (B) is carried out by the Administrator of

2 the Health Care Financing Administration; and

3 (C) is carried out for fiscal year 1995 with

4 amounts that, under Public Law 103–333, are

5 made available for new rural health grants.

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