II

106TH CONGRESS

1ST SESSION S. 980

To promote access to health care services in rural areas.

IN THE SENATE OF THE UNITED STATES

MAY 6, 1999

Mr. BAUCUS (for himself, Mr. DASCHLE, Mr. THOMAS, Mr. HARKIN, Mr.

GRASSLEY, Mr. CONRAD, Mr. ROBERTS, Mr. FRIST, Mr. JOHNSON, Mr.

ROCKEFELLER, Mr. JEFFORDS, Mr. WELLSTONE, and Mr. MURKOWSKI)

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

Committee on Finance

A BILL

To promote access to health care services in rural areas.

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 ‘‘Promoting Health in Rural Areas Act of 1999’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

TITLE I—PROMOTING ACCESS TO HEALTH CARE SERVICES IN

RURAL AREAS UNDER THE MEDICARE PROGRAM

Subtitle A—Hospital-Related Provisions
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Sec. 101. Sole community hospitals.

Sec. 102. Revision of criteria for designation as a critical access hospital.

Sec. 103. Graduate medical education technical amendments.

Sec. 104. Medicare-dependent small rural hospitals.

Sec. 105. All-inclusive payment option for outpatient critical access hospital

services.

Sec. 106. Exclusion of swing beds in critical access hospitals from PPS for

SNFs.

Sec. 107. Exclusion of small rural providers from PPS for hospital outpatient

department services.

Sec. 108. Modification of DSH.

Sec. 109. Hospital geographic reclassification for labor costs for all items and

services reimbursed under prospective payment systems.

Sec. 110. Requirement that wage levels for hospitals be standardized with respect to occupational mix before adjusting payment rates;

study and report.

Subtitle B—General Provisions

Sec. 121. Payments to Medicare+Choice organizations.

Sec. 122. Direct billing of medicare, medicaid, and other third-party payors by

Indian tribes and Alaska Native and tribal organizations.

Sec. 123. Additional duties for MedPAC and rural representation on MedPAC.

Sec. 124. Coverage of qualified mental health professional services under medicare.

Sec. 125. Study and report regarding barriers that individuals residing in rural

areas face in obtaining quality mental health services.

Sec. 126. Medicare waivers for providers in rural areas.

Sec. 127. Revision of per-visit payment limits for rural health clinic services.

Sec. 128. Expansion of additional payments for services furnished in health

professional shortage areas.

Sec. 129. Authority to establish a prospective payment system for RHC services.

Sec. 130. Separate wage indexes for making adjustments to payments under

the prospective payment systems for skilled nursing facilities

and home health agencies.

Sec. 131. Requirement to consider rural issues in establishing fee schedule for

ambulance services.

TITLE II—ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF

HEALTH PROFESSIONALS IN RURAL AREAS

Sec. 201. Health professional shortage areas.

Sec. 202. Exclusion of certain amounts received under the National Health

Service Corps Scholarship Program.

Sec. 203. Designation of underserved areas under health care contracts administered by the Office of Personnel Management.

Sec. 204. New prospective payment system for Federally-qualified health centers and rural health clinics under the medicaid program.

Sec. 205. Revision and clarification of medicare reimbursement of telehealth

services.

Sec. 206. Study and reports to Congress regarding telehealth licensure.

Sec. 207. Joint working group on telehealth.

TITLE III—DEVELOPMENT OF TELEHEALTH NETWORKS
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Subtitle A—Development of Telehealth Networks

Sec. 301. Financial assistance authorized.

Sec. 302. Financial assistance described.

Sec. 303. Eligible telehealth networks.

Sec. 304. Use of financial assistance.

Sec. 305. Application.

Sec. 306. Approval of application.

Sec. 307. Administration.

Sec. 308. Regulations.

Sec. 309. Authorization of appropriations.

Subtitle B—Rural Health Outreach and Network Development Grant

Program

Sec. 315. Rural health outreach and network development grant program.

TITLE IV—MISCELLANEOUS PROVISIONS

Sec. 401. Bank deductibility of small, tax-exempt debts.

Sec. 402. Access to data.

1 SEC. 2. FINDINGS.

2 Congress finds the following:

3 (1) Rural communities have long had great dif4 ficulty recruiting and retaining health care providers

5 to serve the needs of their residents.

6 (2) Despite great increases in the production of

7 providers in this country (the number of individuals

8 per physician fell from 724 in 1965 to 375 in 1995),

9 individuals living in rural areas have not shared eq10 uitably in the benefits of this expansion.

11 (3) Over 73 percent of Americans live in non12 metropolitan counties, but only 11 percent of patient

13 care physicians practice in those counties, and this

14 proportion has been falling for the last 25 years.

15 (4) The following conditions are characteristic

16 of rural populations:
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1 (A) The relative lack of health care re2 sources as compared to urban areas.

3 (B) The uneven pattern of disease burden.

4 (C) The irregular distribution of programs

5 and resources resulting from policy variations

6 across the Nation.

7 TITLE I—PROMOTING ACCESS

8 TO HEALTH CARE SERVICES

9 IN RURAL AREAS UNDER THE

10 MEDICARE PROGRAM

11 Subtitle A—Hospital-Related

12 Provisions

13 SEC. 101. SOLE COMMUNITY HOSPITALS.

14 (a) IN GENERAL.—Section 1886(b)(3)(C) of the So15 cial Security Act (42 U.S.C. 1395ww(b)(3)(C)) is

16 amended—

17 (1) in clause (i), by redesignating subclauses (I)

18 and (II) as items (aa) and (bb), respectively;

19 (2) by redesignating clauses (i), (ii), (iii), and

20 (iv) as subclauses (I), (II), (III), and (IV), respec21 tively;

22 (3) by striking ‘‘(C) In’’ and inserting ‘‘(C)(i)

23 Subject to clause (ii), in’’;

24 (4) in the last sentence, by striking ‘‘clause (i)’’

25 and inserting ‘‘subclause (I)’’; and
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1 (5) by inserting at the end the following:

2 ‘‘(ii)(I) If 1 or more of the alternative target amounts

3 determined under subclause (II) for discharges occurring

4 in fiscal year 2001 is greater than the target amount de5 termined under clause (i) for such discharges, clause (i)

6 shall be applied for such discharges by using the greatest

7 of such alternative target amounts (and such amount shall

8 be used in applying clause (i)(IV) to subsequent fiscal

9 years).

10 ‘‘(II) The alternative target amounts are the amounts

11 equal to the allowable operating costs of inpatient hospital

12 services (as defined in subsection (a)(4)) recognized under

13 this title for the hospital’s cost reporting period (if any)

14 beginning in each of the alternative base years, increased

15 (in a compounded manner) by the applicable percentage

16 increases applied to the hospital under this paragraph for

17 discharges occurring in fiscal years beginning after the al18 ternative base year and before fiscal year 2001.

19 ‘‘(III) The alternative base years are fiscal years

20 1982, 1987, 1996, and 1997.’’.

21 (b) ELIGIBILITY FOR GEOGRAPHIC RECLASSIFICA22 TION WITHOUT REGARD TO WAGE INDEX THRESHOLD.—

23 (1) IN GENERAL.—Section 1886(d)(10)(D)(iii)

24 of the Social Security Act (42 U.S.C.

25 1395ww(d)(10)(D)(iii)) is amended by inserting ‘‘or
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1 a sole community hospital under paragraph (5)(D)’’

2 after ‘‘a rural referral center under paragraph

3 (5)(C)’’.

4 (2) EFFECTIVE DATE.—The amendment made

5 by paragraph (1) shall take effect on January 1,

6 2000, and apply with respect to applications sub7 mitted for geographic reclassification for cost report8 ing periods beginning on or after such date.

9 SEC. 102. REVISION OF CRITERIA FOR DESIGNATION AS A

10 CRITICAL ACCESS HOSPITAL.

11 (a) CONVERSION OF DOWNSIZED OR RECENTLY

12 CLOSED HOSPITALS TO CRITICAL ACCESS HOSPITALS.—

13 Section 1820(c)(2) of the Social Security Act (42 U.S.C.

14 1395i–4(c)(2)) is amended—

15 (1) in subparagraph (A), by striking ‘‘subpara16 graph (B)’’ and inserting ‘‘subparagraphs (B), (C),

17 and (D)’’; and

18 (2) by adding at the end the following:

19 ‘‘(C) RECENTLY CLOSED FACILITIES.—A

20 State may designate a facility as a critical ac21 cess hospital if the facility—

22 ‘‘(i) was a nonprofit or public hospital

23 that ceased operations within the 3-year

24 period ending on the date of enactment of
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1 the Promoting Health in Rural Areas Act

2 of 1999; and

3 ‘‘(ii) as of the effective date of such

4 designation, meets the criteria for designa5 tion under subparagraph (B).

6 ‘‘(D) DOWNSIZED FACILITIES.—A State

7 may designate a health clinic or a health center

8 (as defined by the State) as a critical access

9 hospital if such clinic or center—

10 ‘‘(i) is licensed by the State as a

11 health clinic or a health center;

12 ‘‘(ii) was a nonprofit or public hos13 pital that was downsized to a health clinic

14 or health center; and

15 ‘‘(iii) as of the effective date of such

16 designation, meets the criteria for designa17 tion under subparagraph (B).’’.

18 (b) CRITERIA FOR DESIGNATION.—Section

19 1820(c)(2)(B)(iii) of the Social Security Act (42 U.S.C.

20 1395i–4(c)(2)(B)(iii)) is amended by striking ‘‘to exceed

21 96 hours’’ and inserting ‘‘to exceed, on average, 96 hours

22 per patient’’.

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

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

25 this Act.
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1 SEC. 103. GRADUATE MEDICAL EDUCATION TECHNICAL

2 AMENDMENTS.

3 (a) INDIRECT GRADUATE MEDICAL EDUCATION AD4 JUSTMENT.—

5 (1) IN GENERAL.—Section 1886(d)(5)(B)(v) of

6 the Social Security Act (42 U.S.C.

7 1395ww(d)(5)(B)(v)) is amended—

8 (A) by striking ‘‘(v) In determining’’ and

9 inserting ‘‘(v)(I) Subject to subclause (II), in

10 determining’’;

11 (B) by striking ‘‘in the hospital with re12 spect to the hospital’s most recent cost report13 ing period ending on or before December 31,

14 1996’’ and inserting ‘‘who were appointed by

15 the hospital’s approved medical residency train16 ing programs for the hospital’s most recent cost

17 reporting period ending on or before December

18 31, 1996’’; and

19 (C) by adding at the end the following:

20 ‘‘(II) Beginning on or after January 1, 1997, in the

21 case of a hospital that sponsors only 1 allopathic or osteo22 pathic residency program, the limit determined for such

23 hospital under subclause (I) may, at the hospital’s discre24 tion, be increased by 1 for each calendar year but shall

25 not exceed a total of 3 more than the limit determined

26 for the hospital under subclause (I).’’.
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1 (2) ADDITIONAL TECHNICAL AMENDMENTS.—

2 Section 1886(d)(5)(B) of the Social Security Act (42

3 U.S.C. 1395ww(d)(5)(B)) is amended by moving

4 clauses (ii), (v), and (vi) 2 ems to the left.

5 (b) DIRECT GRADUATE MEDICAL EDUCATION AD6 JUSTMENT.—

7 (1) LIMITATION ON NUMBER OF RESIDENTS.—

8 Section 1886(h)(4)(F) of the Social Security Act (42

9 U.S.C. 1395ww(h)(4)(F)) is amended by inserting

10 ‘‘who were appointed by the hospital’s approved

11 medical residency training programs’’ after ‘‘may

12 not exceed the number of such full-time equivalent

13 residents’’.

14 (2) FUNDING FOR NEW PROGRAMS.—The first

15 sentence of section 1886(h)(4)(H)(i) of the Social

16 Security Act (42 U.S.C. 1395ww(h)(4)(H)(i)) is

17 amended by inserting ‘‘and before September 30,

18 1999’’ after ‘‘January 1, 1995’’.

19 (3) FUNDING FOR PROGRAMS MEETING RURAL

20 NEEDS.—The second sentence of section

21 1886(h)(4)(H)(i) of the Social Security Act (42

22 U.S.C. 1395ww(h)(4)(H)(i)) is amended by striking

23 the period at the end and inserting ‘‘, including fa24 cilities that are not located in an underserved rural
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1 area but have established separately accredited rural

2 training tracks.’’.

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

4 this section shall take effect as if included in the enact5 ment of the Balanced Budget Act of 1997.

6 SEC. 104. MEDICARE-DEPENDENT SMALL RURAL HOS7 PITALS.

8 (a) MAKING PAYMENT PROVISION PERMANENT.—

9 Section 1886(d)(5)(G)(i) of the Social Security Act (42

10 U.S.C. 1395ww(d)(5)(G)(i)) is amended by striking ‘‘and

11 before October 1, 2001,’’.

12 (b) OPTION TO BASE ELIGIBILITY ON DISCHARGES

13 DURING ANY OF THE 3 MOST RECENT AUDITED COST

14 REPORTING PERIODS.—Section 1886(d)(5)(G)(iv)(IV) of

15 the Social Security Act (42 U.S.C.

16 1395ww(d)(5)(G)(iv)(IV)) is amended by inserting ‘‘, or

17 any of the 3 most recent audited cost reporting periods,’’

18 after ‘‘1987’’.

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

20 this section shall apply with respect to discharges occur21 ring on or after October 1, 1999.
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1 SEC. 105. ALL-INCLUSIVE PAYMENT OPTION FOR OUT2 PATIENT CRITICAL ACCESS HOSPITAL SERV3 ICES.

4 (a) IN GENERAL.—Section 1834(g) of the Social Se5 curity Act (42 U.S.C. 1395m(g)) is amended to read as

6 follows:

7 ‘‘(g) PAYMENT FOR OUTPATIENT CRITICAL ACCESS

8 HOSPITAL SERVICES.—The amount of payment under

9 this part for outpatient critical access hospital services

10 shall be determined by using 1 of the 2 following methods,

11 as elected by the critical access hospital:

12 ‘‘(1) COST-BASED FACILITY FEE PLUS PROFES13 SIONAL CHARGES.—

14 ‘‘(A) FACILITY FEE.—With respect to fa15 cility services, not including any services for

16 which payment may be made under subpara17 graph (B), there shall be paid amounts equal to

18 the reasonable costs of the critical access hos19 pital in providing such services, less the amount

20 that such hospital may charge as described in

21 section 1866(a)(2)(A).

22 ‘‘(B) REASONABLE CHARGES FOR PROFES23 SIONAL SERVICES.—In electing treatment under

24 this paragraph, payment for professional med25 ical services otherwise included within out26 patient critical access hospital services shall be
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1 made under such other provisions of this part

2 as would apply to payment for such services if

3 they were not included in outpatient critical ac4 cess hospital services.

5 ‘‘(2) ALL-INCLUSIVE RATE.—With respect to

6 both facility services and professional medical serv7 ices, there shall be paid amounts equal to the rea8 sonable costs of the critical access hospital in pro9 viding such services, less the amount that such hos10 pital may charge as described in section

11 1866(a)(2)(A).

12 The amount of payment shall be determined under either

13 method without regard to the amount of the customary

14 or other charge.’’.

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

16 subsection (a) shall take effect as if included in the enact17 ment of the Balanced Budget Act of 1997.

18 SEC. 106. EXCLUSION OF SWING BEDS IN CRITICAL ACCESS

19 HOSPITALS FROM PPS FOR SNFS.

20 (a) IN GENERAL.—Section 1888(e)(7) of the Social

21 Security Act (42 U.S.C. 1395yy(e)(7)) is amended—

22 (1) in the heading, by striking ‘‘TRANSITION’’

23 and inserting ‘‘SPECIAL RULES’’;
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1 (2) in subparagraph (A), by striking ‘‘IN GEN2 ERAL.—The’’ and inserting ‘‘TRANSITION.—Except

3 as provided in subparagraph (C), the’’; and

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

5 ‘‘(C) EXEMPTION OF SWING BEDS IN

6 CRITICAL ACCESS HOSPITALS FROM

7 PPS.—The prospective payment system

8 under this subsection shall not apply (and

9 section 1834(g) shall apply) to services

10 provided by a critical access hospital under

11 an agreement described in subparagraph

12 (B).’’.

13 (b) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to services provided on or after

15 October 1, 1999.

16 SEC. 107. EXCLUSION OF SMALL RURAL PROVIDERS FROM

17 PPS FOR HOSPITAL OUTPATIENT DEPART18 MENT SERVICES.

19 (a) IN GENERAL.—Section 1833(t)(1) of the Social

20 Security Act (42 U.S.C. 1395l(t)(1)) is amended—

21 (1) in subparagraph (B), by striking ‘‘For pur22 poses of this’’ and inserting ‘‘Subject to subpara23 graph (C), for purposes of this’’; and

24 (2) by adding at the end the following:
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1 ‘‘(C) EXCLUSION FOR SERVICES FURNISHED BY

2 SMALL RURAL PROVIDERS.—The term ‘covered OPD

3 services’ does not include services furnished by a—

4 ‘‘(i) medicare-dependent, small rural hos5 pital, as defined in section 1886(d)(5)(G)(iv);

6 ‘‘(ii) a critical access hospital, as defined in

7 section 1861(mm)(1); or

8 ‘‘(iii) sole community hospital, as defined

9 in section 1886(d)(5)(D)(iii);

10 if such hospital, within the 180-day period beginning

11 on the date of enactment of the Promoting Health

12 in Rural Areas Act of 1999, requests the Secretary

13 to exclude services furnished by such hospital from

14 the prospective payment system established under

15 this subsection.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 subsection (a) shall apply to payments for covered OPD

18 services furnished on or after January 1, 2000.

19 SEC. 108. MODIFICATION OF DSH.

20 (a) COLLECTION OF CHARGE DATA.—Section

21 1886(d)(5)(F) of the Social Security Act (42 U.S.C.

22 1395ww(d)(5)(F)) is amended by adding at the end the

23 following:

24 ‘‘(x) The Secretary shall collect from all subsection

25 (d) hospitals annual data on inpatient and outpatient
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1 charges, including all such charges for each of the fol2 lowing categories:

3 ‘‘(I) All patients.

4 ‘‘(II) Patients who are eligible for benefits (ex5 cluding any State supplementation) under the sup6 plemental security income program under title XVI

7 and entitled to benefits under part A.

8 ‘‘(III) Patients who are entitled to (or, if they

9 applied, would be eligible for) medical assistance

10 under title XIX.

11 ‘‘(IV) Patients who are beneficiaries of indigent

12 care programs sponsored by State or local govern13 ments.

14 ‘‘(V) To the extent that payment is not made

15 by patients, such charges.

16 In collecting the data for patients described in subclause

17 (II), the Secretary may estimate the charges for such pa18 tients based on supplemental security income program

19 data from other sources and from the data collected for

20 patients described in subclause (I).’’.

21 (b) REVISION OF FORMULA FOR DISPROPORTIONATE

22 PATIENT PERCENTAGE.—Section 1886(d)(5)(F)(vi) of

23 the Social Security Act (42 U.S.C. 1395ww(d)(5)(F)(vi))

24 is amended to read as follows:
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1 ‘‘(vi) In this subparagraph, the term ‘dispropor2 tionate patient percentage’ means, with respect to a cost

3 reporting period of a hospital—

4 ‘‘(I) the charges described in subclauses (II)

5 through (V) of clause (x) for such period; divided by

6 ‘‘(II) the charges described in clause (x)(I) for

7 such period.’’.

8 (c) ESTABLISHING GENERAL QUALIFYING DIS9 PROPORTIONATE PATIENT PERCENTAGE THRESHOLD TO

10 COVER HALF OF PPS HOSPITALS.—Section

11 1886(d)(5)(F)(v) of the Social Security Act (42 U.S.C.

12 1395ww(d)(5)(F)(v)) is amended by striking ‘‘equals, or

13 exceeds—’’ and all that follows and inserting ‘‘equals or

14 exceeds a threshold percentage, which is established by the

15 Secretary in a manner so that, if the amendments to this

16 subparagraph made by section 108 of the Promoting

17 Health in Rural Areas Act of 1999 had been in effect for

18 cost reporting periods ending in fiscal year 2000, 50 per19 cent of subsection (d) hospitals would have been eligible

20 for an additional payment under this subparagraph for

21 such periods. The Secretary shall establish such threshold

22 percentage based upon data collected by the Secretary

23 under clause (x) for such cost reporting periods.’’.
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1 (d) ESTABLISHING UNIFORM GENERAL PAYMENT

2 FORMULA.—Section 1886(d)(5)(F) of the Social Security

3 Act (42 U.S.C. 1395ww(d)(5)(F)) is amended—

4 (1) in clause (iv), by striking ‘‘that is not de5 scribed in clause (i)(II) and that—’’ and all that fol6 lows and inserting ‘‘described in clause (i) is equal

7 to (P–T)(CF), where—

8 ‘‘(I) ‘P’ is the hospital’s disproportionate pa9 tient percentage (as defined in clause (vi));

10 ‘‘(II) ‘T’ is equal to the threshold percentage

11 established by the Secretary under clause (v); and

12 ‘‘(III) ‘CF’ is equal to such conversion factor as

13 the Secretary may establish so that, applying such

14 conversion factor as if the amendments to this sub15 paragraph made by section 108 of the Promoting

16 Health in Rural Areas Act of 1999 had been in ef17 fect for cost reporting periods ending in fiscal year

18 2000, the total of the additional payments that

19 would have been made under this subparagraph is

20 equal to the total of the payments actually made

21 under this subparagraph (not taking into account

22 such amendments).

23 The Secretary shall establish the conversion factor under

24 subclause (III) based upon data collected by the Secretary
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1 under clause (x) for cost reporting periods ending in fiscal

2 year 2000.’’;

3 (2) by amending clause (i) to read as follows:

4 ‘‘(i) The Secretary shall provide, in accordance with

5 this subparagraph, for an additional payment amount for

6 each subsection (d) hospital which serves a significantly

7 disproportionate number of low-income patients (as de8 fined in clause (v)).’’;

9 (3) in clause (ii), by striking ‘‘clause (iii) or

10 (iv)’’ and inserting ‘‘clause (iv)’’; and

11 (4) by striking clauses (iii), (vii), and (viii).

12 (e) EFFECTIVE DATE.—The amendments made by

13 this section apply to payments for discharges occurring on

14 or after January 1, 2001.

15 SEC. 109. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR

16 LABOR COSTS FOR ALL ITEMS AND SERVICES

17 REIMBURSED UNDER PROSPECTIVE PAY18 MENT SYSTEMS.

19 (a) IN GENERAL.—Section 1886 of the Social Secu20 rity Act (42 U.S.C. 1395ww) is amended by adding at the

21 end the following:

22 ‘‘(l) APPLICATION OF HOSPITAL GEOGRAPHIC RE23 CLASSIFICATION FOR INPATIENT SERVICES TO ALL HOS24 PITAL FURNISHED ITEMS AND SERVICES REIMBURSED

25 UNDER PROSPECTIVE PAYMENT SYSTEM.—
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1 ‘‘(1) IN GENERAL.—In the case of a hospital

2 with an application approved by the Medicare Geo3 graphic Classification Review Board under sub4 section (d)(10)(C) to change the hospital’s geo5 graphic classification for a fiscal year for purposes

6 of the factor used to adjust the DRG prospective

7 payment rate for area differences in hospital wage

8 levels that applies to such hospital under subsection

9 (d)(3)(E), the change in the hospital’s geographic

10 classification for such purposes shall apply for pur11 poses of adjustments to payments for variations in

12 costs which are attributable to wages and wage-re13 lated costs for all pps-reimbursed items and services.

14 ‘‘(2) PPS-REIMBURSED ITEMS AND SERVICES

15 DEFINED.—For purposes of paragraph (1), the term

16 ‘pps-reimbursed items and services’ means, for cost

17 reporting periods beginning during the fiscal year

18 for which such change has been approved, items and

19 services furnished by the hospital, or by an entity or

20 department of the hospital which is provider-based

21 (as determined by the Secretary), for which

22 payments—

23 ‘‘(A) are made under the prospective pay24 ment system for hospital outpatient department

25 services under section 1833(t); and
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1 ‘‘(B) are adjusted for variations in costs

2 which are attributable to wages and wage-re3 lated costs.’’.

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

5 subsection (a) shall apply to items and services furnished

6 on or after January 1, 2000.

7 SEC. 110. REQUIREMENT THAT WAGE LEVELS FOR HOS8 PITALS BE STANDARDIZED WITH RESPECT

9 TO OCCUPATIONAL MIX BEFORE ADJUSTING

10 PAYMENT RATES; STUDY AND REPORT.

11 (a) OCCUPATIONAL MIX.—

12 (1) IN GENERAL.—Section 1886(d)(3)(E) of

13 the Social Security Act (42 U.S.C.

14 1395ww(d)(3)(E)) is amended—

15 (A) in the first sentence, by inserting ‘‘,

16 but only after such wage levels have been stand17 ardized with respect to occupational mix’’ be18 fore the period; and

19 (B) in the third sentence, by striking ‘‘To

20 the extent determined feasible by the Secretary,

21 such’’ and inserting ‘‘Such’’.

22 (2) EFFECTIVE DATE.—The amendments made

23 by paragraph (1) shall apply to adjustments made

24 on or after October 1, 2002.

25 (b) STUDY AND REPORT.—
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1 (1) STUDY.—The Secretary of Labor shall con2 duct a study on the feasibility and costs of having

3 the Bureau of Labor Statistics collect data on wages

4 that would assist the Secretary of Health and

5 Human Services in determining (with reasonable ac6 curacy)—

7 (A) average wage levels, at the metropoli8 tan statistical area, statewide, and rural level,

9 by—

10 (i) sector, including hospitals, skilled

11 nursing facilities, home health agencies,

12 and physicians’ offices; and

13 (ii) occupational category within each

14 sector; and

15 (B) the proportion of the workforce in each

16 occupational category within each sector.

17 (2) REPORT.—Not later than June 1, 2000, the

18 Secretary of Labor shall submit a report to Congress

19 on the study conducted under paragraph (1), to20 gether with any recommendations that the Secretary

21 determines to be appropriate.
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1 Subtitle B—General Provisions

2 SEC. 121. PAYMENTS TO MEDICARE+CHOICE ORGANIZA3 TIONS.

4 (a) ADJUSTMENT TO CALCULATION OF ANNUAL

5 CAPITATION RATES.—Section 1853(c) of the Social Secu6 rity Act (42 U.S.C. 1395w–23(c)) is amended—

7 (1) in paragraph (1)—

8 (A) in subparagraph (A), by striking the

9 comma at the end of clause (ii) and all that fol10 lows before the period; and

11 (B) in subparagraph (C)(ii), by inserting

12 ‘‘multiplied by the budget neutrality adjustment

13 factor determined under paragraph (5)’’ before

14 the period at the end; and

15 (2) in paragraph (5), by striking ‘‘paragraph

16 (1)(A)’’ and inserting ‘‘paragraph (1)(C)(ii)’’.

17 (b) EFFECTIVE DATE.—The amendments made by

18 subsection (a) shall apply to rates calculated for years

19 after 2000.
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1 SEC. 122. DIRECT BILLING OF MEDICARE, MEDICAID, AND

2 OTHER THIRD-PARTY PAYORS BY INDIAN

3 TRIBES AND ALASKA NATIVE AND TRIBAL OR4 GANIZATIONS.

5 (a) PERMANENT AUTHORIZATION.—The Indian

6 Health Care Improvement Act (25 U.S.C. 1645) is

7 amended by inserting the following after section 404:

8 ‘‘DIRECT BILLING OF MEDICARE, MEDICAID, AND OTHER

9 THIRD-PARTY PAYORS BY INDIAN TRIBES AND ALAS10 KA NATIVE AND TRIBAL ORGANIZATIONS

11 ‘‘SEC. 405. (a) ESTABLISHMENT OF DIRECT BILLING

12 PROGRAM.—

13 ‘‘(1) IN GENERAL.—The Secretary shall estab14 lish a program under which Indian tribes, tribal or15 ganizations, and Alaska Native health organizations

16 that contract or compact for the operation of a hos17 pital or clinic of the Service under the Indian Self18 Determination and Education Assistance Act may

19 elect to directly bill for, and receive payment for,

20 health care services provided by such hospital or

21 clinic for which payment is made under title XVIII

22 of the Social Security Act (42 U.S.C. 1395 et seq.)

23 (in this section referred to as the ‘medicare pro24 gram’), under a State plan for medical assistance

25 approved under title XIX of the Social Security Act

26 (42 U.S.C. 1396 et seq.) (in this section referred to
24

•S 980 IS

1 as the ‘medicaid program’), or from any other third2 party payor.

3 ‘‘(2) APPLICATION OF 100 PERCENT FMAP.—

4 The third sentence of section 1905(b) of the Social

5 Security Act (42 U.S.C. 1396d(b)) shall apply for

6 purposes of reimbursement under the medicaid pro7 gram for health care services directly billed under

8 the program established under this section.

9 ‘‘(b) DIRECT REIMBURSEMENT.—

10 ‘‘(1) USE OF FUNDS.—Each hospital or clinic

11 participating in the program described in subsection

12 (a) of this section shall be reimbursed directly under

13 the medicare and medicaid programs for services

14 furnished, without regard to the provisions of section

15 1880(c) of the Social Security Act (42 U.S.C.

16 1395qq(c)) and sections 402(a) and 813(b)(2)(A),

17 but all funds so reimbursed shall first be used by

18 the hospital or clinic for the purpose of making any

19 improvements in the hospital or clinic that may be

20 necessary to achieve or maintain compliance with the

21 conditions and requirements applicable generally to

22 facilities of such type under the medicare or med23 icaid programs. Any funds so reimbursed which are

24 in excess of the amount necessary to achieve or

25 maintain such conditions shall be used—
25

•S 980 IS

1 ‘‘(A) solely for improving the health re2 sources deficiency level of the Indian tribe; and

3 ‘‘(B) in accordance with the regulations of

4 the Service applicable to funds provided by the

5 Service under any contract entered into under

6 the Indian Self-Determination Act (25 U.S.C.

7 450f et seq.).

8 ‘‘(2) AUDITS.—The amounts paid to the hos9 pitals and clinics participating in the program estab10 lished under this section shall be subject to all audit11 ing requirements applicable to programs adminis12 tered directly by the Service and to facilities partici13 pating in the medicare and medicaid programs.

14 ‘‘(3) SECRETARIAL OVERSIGHT.—

15 ‘‘(A) QUARTERLY REPORTS.—Subject to

16 subparagraph (B), the Secretary shall monitor

17 the performance of hospitals and clinics partici18 pating in the program established under this

19 section, and shall require such hospitals and

20 clinics to submit reports on the program to the

21 Secretary on a quarterly basis during the first

22 2 years of participation in the program and an23 nually thereafter.

24 ‘‘(B) ANNUAL REPORTS.—Any participant

25 in the demonstration program authorized under
26

•S 980 IS

1 this section as in effect on the day before the

2 date of enactment of the Promoting Health in

3 Rural Areas Act of 1999 shall only be required

4 to submit annual reports under this paragraph.

5 ‘‘(4) NO PAYMENTS FROM SPECIAL FUNDS.—

6 Notwithstanding section 1880(c) of the Social Secu7 rity Act (42 U.S.C. 1395qq(c)) or section 402(a), no

8 payment may be made out of the special funds de9 scribed in such sections for the benefit of any hos10 pital or clinic during the period that the hospital or

11 clinic participates in the program established under

12 this section.

13 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

14 ‘‘(1) APPLICATION.—Except as provided in

15 paragraph (2)(B), in order to be eligible for partici16 pation in the program established under this section,

17 an Indian tribe, tribal organization, or Alaska Na18 tive health organization shall submit an application

19 to the Secretary that establishes to the satisfaction

20 of the Secretary that—

21 ‘‘(A) the Indian tribe, tribal organization,

22 or Alaska Native health organization contracts

23 or compacts for the operation of a facility of the

24 Service;
27

•S 980 IS

1 ‘‘(B) the facility is eligible to participate in

2 the medicare or medicaid programs under sec3 tion 1880 or 1911 of the Social Security Act

4 (42 U.S.C. 1395qq; 1396j);

5 ‘‘(C) the facility meets the requirements

6 that apply to programs operated directly by the

7 Service; and

8 ‘‘(D) the facility is accredited by an ac9 crediting body designated by the Secretary or

10 has submitted a plan, which has been approved

11 by the Secretary, for achieving such accredita12 tion.

13 ‘‘(2) APPROVAL.—

14 ‘‘(A) IN GENERAL.—The Secretary shall

15 review and approve a qualified application not

16 later than 90 days after the date the applica17 tion is submitted to the Secretary unless the

18 Secretary determines that any of the criteria set

19 forth in paragraph (1) are not met.

20 ‘‘(B) GRANDFATHER OF DEMONSTRATION

21 PROGRAM PARTICIPANTS.—Any participant in

22 the demonstration program authorized under

23 this section as in effect on the day before the

24 date of enactment of the Promoting Health in

25 Rural Areas Act of 1999 shall be deemed ap-
28

•S 980 IS

1 proved for participation in the program estab2 lished under this section and shall not be re3 quired to submit an application in order to par4 ticipate in the program.

5 ‘‘(C) DURATION.—An approval by the Sec6 retary of a qualified application under subpara7 graph (A), or a deemed approval of a dem8 onstration program under subparagraph (B),

9 shall continue in effect as long as the approved

10 applicant or the deemed approved demonstra11 tion program meets the requirements of this

12 section.

13 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

14 CHANGES.—

15 ‘‘(1) IN GENERAL.—The Secretary, acting

16 through the Service, and with the assistance of the

17 Administrator of the Health Care Financing Admin18 istration, shall examine on an ongoing basis and

19 implement—

20 ‘‘(A) any administrative changes that may

21 be necessary to facilitate direct billing and re22 imbursement under the program established

23 under this section, including any agreements

24 with States that may be necessary to provide
29

•S 980 IS

1 for direct billing under the medicaid program;

2 and

3 ‘‘(B) any changes that may be necessary to

4 enable participants in the program established

5 under this section to provide to the Service

6 medical records information on patients served

7 under the program that is consistent with the

8 medical records information system of the Serv9 ice.

10 ‘‘(2) ACCOUNTING INFORMATION.—The ac11 counting information that a participant in the pro12 gram established under this section shall be required

13 to report shall be the same as the information re14 quired to be reported by participants in the dem15 onstration program authorized under this section as

16 in effect on the day before the date of enactment of

17 the Promoting Health in Rural Areas Act of 1999.

18 The Secretary may from time to time, after con19 sultation with the program participants, change the

20 accounting information submission requirements.

21 ‘‘(e) WITHDRAWAL FROM PROGRAM.—A participant

22 in the program established under this section may with23 draw from participation in the same manner and under

24 the same conditions that a tribe or tribal organization may

25 retrocede a contracted program to the Secretary under au-
30

•S 980 IS

1 thority of the Indian Self-Determination Act (25 U.S.C.

2 450 et seq.). All cost accounting and billing authority

3 under the program established under this section shall be

4 returned to the Secretary upon the Secretary’s acceptance

5 of the withdrawal of participation in this program.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 1880 of the Social Security Act (42

8 U.S.C. 1395qq) is amended by adding at the end the

9 following:

10 ‘‘(e) For provisions relating to the authority of cer11 tain Indian tribes, tribal organizations, and Alaska Native

12 health organizations to elect to directly bill for, and receive

13 payment for, health care services provided by a hospital

14 or clinic of such tribes or organizations and for which pay15 ment may be made under this title, see section 405 of the

16 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.

17 (2) Section 1911 of the Social Security Act (42

18 U.S.C. 1396j) is amended by adding at the end the

19 following:

20 ‘‘(d) For provisions relating to the authority of cer21 tain Indian tribes, tribal organizations, and Alaska Native

22 health organizations to elect to directly bill for, and receive

23 payment for, health care services provided by a hospital

24 or clinic of such tribes or organizations and for which pay-
31

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1 ment may be made under this title, see section 405 of the

2 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.

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

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

5 this Act.

6 SEC. 123. ADDITIONAL DUTIES FOR MEDPAC AND RURAL

7 REPRESENTATION ON MEDPAC.

8 (a) ADDITIONAL DUTIES.—Section 1805(b)(2) of the

9 Social Security Act (42 U.S.C. 1395b–6(b)(2)) is amended

10 by adding at the end the following:

11 ‘‘(D) MEDICARE PAYMENTS IN RURAL

12 AREAS.—Specifically, the Commission shall

13 review—

14 ‘‘(i) the impact that the prospective

15 payment systems for skilled nursing facil16 ity services under section 1888(e), for

17 home health services under section 1895,

18 and for hospital outpatient department

19 services under section 1833(t) have on ac20 cess to services in rural areas; and

21 ‘‘(ii) the operating margins for hos22 pitals located in rural or frontier areas.’’.

23 (b) RURAL REPRESENTATION.—Section

24 1805(c)(2)(A) of the Social Security Act (42 U.S.C.

25 1395b–6(c)(2)(A)) is amended by adding at the end the
32

•S 980 IS

1 following: ‘‘At least 2 of the members of the Commission

2 shall be individuals who can represent the interests of

3 rural health care providers and beneficiaries.’’.

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

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

6 this Act.

7 SEC. 124. COVERAGE OF QUALIFIED MENTAL HEALTH PRO8 FESSIONAL SERVICES UNDER MEDICARE.

9 (a) IN GENERAL.—Section 1861(s)(2) of the Social

10 Security Act (42 U.S.C. 1395x(s)(2)) is amended—

11 (1) in subparagraph (S), by striking ‘‘and’’ at

12 the end;

13 (2) in subparagraph (T), by striking the period

14 at the end and inserting ‘‘; and’’; and

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

16 ‘‘(U) qualified mental health professional serv17 ices (as defined in subsection (uu));’’.

18 (b) PAYMENT RULES.—

19 (1) DETERMINATION OF AMOUNT OF PAY20 MENT.—Section 1833(a)(1) of the Social Security

21 Act (42 U.S.C. 1395l(a)(1)) is amended—

22 (A) by striking ‘‘and’’ before ‘‘(S)’’; and

23 (B) by striking the semicolon at the end

24 and inserting the following: ‘‘, and (T) with re25 spect to qualified mental health professional
33

•S 980 IS

1 services described in section 1861(s)(2)(U), the

2 amounts paid shall be the amount determined

3 by a fee schedule established by the Secretary

4 for purposes of this subparagraph;’’.

5 (2) SEPARATE PAYMENT FOR SERVICES

6 OF INSTITUTIONAL PROVIDERS.—Section

7 1832(a)(2)(B)(iii) of the Social Security Act (42

8 U.S.C. 1395k(a)(2)(B)(iii)) is amended—

9 (A) by striking ‘‘and services’’ and insert10 ing ‘‘services’’; and

11 (B) by striking the semicolon at the end

12 and inserting the following: ‘‘, and qualified

13 mental health professional services described in

14 section 1861(s)(2)(U);’’.

15 (c) SERVICES DESCRIBED.—Section 1861 of the So16 cial Security Act (42 U.S.C. 1395x) is amended by adding

17 at the end the following:

18 ‘‘Qualified Mental Health Professional Services

19 ‘‘(uu)(1) The term ‘qualified mental health profes20 sional services’ means—

21 ‘‘(A) such services furnished (with such fre22 quency limits as the Secretary determines appro23 priate) to an eligible individual by a mental health

24 professional as the mental health professional is le25 gally authorized to perform under State law (or
34

•S 980 IS

1 under a State regulatory mechanism provided by

2 State law) of the State in which such services are

3 performed; and

4 ‘‘(B) such services and supplies (with such lim5 its) furnished as an incident to services described in

6 subparagraph (A),

7 as would otherwise be covered if furnished by a physician

8 (or as an incident to a physician’s professional service).

9 ‘‘(2) In this subsection:

10 ‘‘(A) The term ‘eligible individual’ means an in11 dividual who resides in an area designated by the

12 Secretary as a mental health professional shortage

13 area.

14 ‘‘(B) The term ‘mental health professional’

15 means an individual who—

16 ‘‘(i) holds a master’s or doctor’s degree in

17 the field of mental health;

18 ‘‘(ii) has at least 2 years of post-degree su19 pervised clinical experience; and

20 ‘‘(iii) has been certified or licensed as a

21 mental health professional for the diagnosis and

22 treatment of mental illnesses by the State (or

23 under the State regulatory mechanism provided

24 by State law) in which the individual furnishes

25 qualified mental health professional services.’’.
35

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

2 this section shall apply to services furnished on or after

3 October 1, 1999.

4 SEC. 125. STUDY AND REPORT REGARDING BARRIERS THAT

5 INDIVIDUALS RESIDING IN RURAL AREAS

6 FACE IN OBTAINING QUALITY MENTAL

7 HEALTH SERVICES.

8 (a) STUDY.—The Secretary of Health and Human

9 Services shall conduct a study on—

10 (1) the barriers that beneficiaries under the

11 medicare program under title XVIII of the Social

12 Security Act (42 U.S.C. 1395 et seq.) who reside in

13 rural areas face in obtaining quality mental health

14 services; and

15 (2) ways to reduce or eliminate such barriers.

16 (b) REPORT.—Not later than January 1, 2001, the

17 Secretary of Health and Human Services shall submit a

18 report to Congress on the study conducted under sub19 section (a), together with any recommendations for legisla20 tion that the Secretary determines to be appropriate to

21 reduce or eliminate the barriers described in subsection

22 (a).
36

•S 980 IS

1 SEC. 126. MEDICARE WAIVERS FOR PROVIDERS IN RURAL

2 AREAS.

3 Notwithstanding section 1886(d)(2)(D) of the Social

4 Security Act (42 U.S.C. 1395ww(d)(2)(D)), by not later

5 than 180 days after the date of enactment of this Act,

6 the Secretary of Health and Human Services shall estab7 lish a waiver process in which entities and individuals

8 under the medicare program that are determined by the

9 Office of Management and Budget to be located in an

10 urban or large urban area for purposes of reimbursement

11 under such program may apply to the Secretary to be con12 sidered to be located in a rural area for such purposes

13 if such entity or individual is located—

14 (1) in a rural area within a metropolitan coun15 ty, as defined by the most recent update of the Gold16 smith Modification; or

17 (2) in a rural area as determined by using a

18 census tract definition of a rural area adopted by

19 the Office of Rural Health Policy in awarding

20 grants.

21 SEC. 127. REVISION OF PER-VISIT PAYMENT LIMITS FOR

22 RURAL HEALTH CLINIC SERVICES.

23 (a) IN GENERAL.—Section 1833(f) of the Social Se24 curity Act (42 U.S.C. 1395l(f)) is amended—

25 (1) in paragraph (1), by striking ‘‘and’’ at the

26 end;
37

•S 980 IS

1 (2) in paragraph (2)—

2 (A) by striking ‘‘in a subsequent year’’ and

3 inserting ‘‘in each of the years 1989 through

4 1999’’; and

5 (B) by striking the period at the end and

6 inserting a comma; and

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

8 ‘‘(3) in 2000, at an amount per visit that the

9 Secretary determines (by regulation) is reasonable

10 and related to the costs of furnishing rural health

11 clinic services, but in no case shall such amount be

12 less than the limit applicable under this subsection

13 in 1999, and

14 ‘‘(4) in a subsequent year, at the limit estab15 lished under this subsection for the previous year—

16 ‘‘(A) increased by the percentage increase

17 in the MEI (as defined in section 1842(i)(3))

18 applicable to primary care services (as defined

19 in section 1842(i)(4)) furnished as of the first

20 day of that year; and

21 ‘‘(B) adjusted, as determined appropriate

22 by the Secretary, for changes in the scope of

23 services that rural health clinics are authorized

24 to provide.
38

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1 In determining the amount under paragraph (3), the Sec2 retary shall use the fee schedule established under section

3 1848(b).’’.

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

5 subsection (a) shall apply to services furnished on or after

6 January 1, 2000.

7 SEC. 128. EXPANSION OF ADDITIONAL PAYMENTS FOR

8 SERVICES FURNISHED IN HEALTH PROFES9 SIONAL SHORTAGE AREAS.

10 (a) IN GENERAL.—Section 1833(m) of the Social Se11 curity Act (42 U.S.C. 1395l(m)) is amended—

12 (1) by inserting ‘‘(or services furnished by a

13 physician assistant or nurse practitioner that would

14 be physicians’ services if furnished by a physician)’’

15 after ‘‘physicians’ services’’;

16 (2) by inserting ‘‘or nurse practitioner’’ after

17 ‘‘physician’’; and

18 (3) by striking ‘‘clause (A)’’ and inserting ‘‘sub19 paragraphs (A) and (C)’’.

20 (b) EFFECTIVE DATE.—The amendments made by

21 subsection (a) shall apply to payments for services pro22 vided on or after January 1, 2000.
39

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1 SEC. 129. AUTHORITY TO ESTABLISH A PROSPECTIVE PAY2 MENT SYSTEM FOR RHC SERVICES.

3 (a) ESTABLISHMENT OF SYSTEM.—Section 1833 of

4 the Social Security Act (42 U.S.C. 1395l) is amended by

5 adding at the end the following:

6 ‘‘(u) AUTHORITY TO ESTABLISH PROSPECTIVE PAY7 MENT SYSTEM FOR RURAL HEALTH CLINIC SERVICES.—

8 ‘‘(1) IN GENERAL.—Notwithstanding sub9 sections (a)(3) and (f), the Secretary may establish

10 by regulation a prospective payment system for rural

11 health clinic services (except for such services pro12 vided by a rural health clinic located in a rural hos13 pital with less than 50 beds).

14 ‘‘(2) BUDGET NEUTRAL PAYMENTS.—If the

15 Secretary establishes a prospective payment system

16 pursuant to paragraph (1), the Secretary shall es17 tablish the initial payment levels under such system

18 in a manner that results in aggregate payments (in19 cluding payments by individuals to whom services

20 are provided) for the first year, as estimated by the

21 Secretary, approximately equal to the aggregate pay22 ments that would have otherwise been made under

23 this part.’’.

24 (b) CONFORMING AMENDMENTS.—

25 (1) PAYMENT.—Section 1833(a)(3) of the So26 cial Security Act (42 U.S.C. 1395l(a)(3)) is amend-
40

•S 980 IS

1 ed by inserting ‘‘subject to subsection (u),’’ before

2 ‘‘in the case’’.

3 (2) LIMITS.—Section 1833(f) of the Social Se4 curity Act (42 U.S.C. 1395l(f)) is amended by strik5 ing ‘‘In establishing’’ and inserting ‘‘Subject to sub6 section (u), in establishing’’.

7 (3) REQUIREMENT FOR RURAL HEALTH CLIN8 ICS.—Clause (ii) of the second sentence of section

9 1861(aa)(2) of the Social Security Act (42 U.S.C.

10 1395x(aa)(2)) is amended by inserting ‘‘(and section

11 1833(u) if the Secretary implements a prospective

12 payment system under that section)’’ after ‘‘section

13 1833’’.

14 SEC. 130. SEPARATE WAGE INDEXES FOR MAKING ADJUST15 MENTS TO PAYMENTS UNDER THE PROSPEC16 TIVE PAYMENT SYSTEMS FOR SKILLED NURS17 ING FACILITIES AND HOME HEALTH AGEN18 CIES.

19 (a) SKILLED NURSING FACILITY PROSPECTIVE PAY20 MENT SYSTEM.—Section 1888(e)(4)(G)(ii) of the Social

21 Security Act (42 U.S.C. 1395yy(e)(4)(G)(ii)) is amended

22 by adding at the end the following: ‘‘Beginning in 2001,

23 the area wage adjustment under this clause shall be based

24 on the wages of individuals employed at skilled nursing

25 facilities.’’.
41

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1 (b) HOME HEALTH PROSPECTIVE PAYMENT SYS2 TEM.—

3 (1) IN GENERAL.—Section 1895(b)(4)(C) of the

4 Social Security Act (42 U.S.C. 1395fff(b)(4)(C)) is

5 amended by striking the second sentence and insert6 ing the following: ‘‘Such factors shall be based on

7 the wages of individuals employed at home health

8 agencies.’’.

9 (2) EFFECTIVE DATE.—The amendment made

10 by paragraph (1) shall take effect as if included in

11 the enactment of the Balanced Budget Act of 1997.

12 SEC. 131. REQUIREMENT TO CONSIDER RURAL ISSUES IN

13 ESTABLISHING FEE SCHEDULE FOR AMBU14 LANCE SERVICES.

15 (a) IN GENERAL.—Section 1834(l)(2)(C) of the So16 cial Security Act (42 U.S.C. 1395m(l)(2)(C)) is amended

17 by inserting ‘‘, including differences in rural and non-rural

18 areas’’ after ‘‘differences’’.

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

20 subsection (a) shall take effect as if included in the enact21 ment of the Balanced Budget Act of 1997.
42

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1 TITLE II—ADDITIONAL PROVI2 SIONS TO ADDRESS SHORT3 AGES OF HEALTH PROFES4 SIONALS IN RURAL AREAS

5 SEC. 201. HEALTH PROFESSIONAL SHORTAGE AREAS.

6 (a) IN GENERAL.—Section 332 of the Public Health

7 Service Act (42 U.S.C. 254e) is amended—

8 (1) in subsection (a)(1)(A), by inserting after

9 ‘‘services)’’ the following: ‘‘, or a frontier area (as

10 defined by the Secretary),’’; and

11 (2) by adding at the end of subsection (c), the

12 following:

13 ‘‘(3) Any pending retirements or resignations of

14 physicians available within the area involved. In im15 plementing this paragraph, the Secretary shall waive

16 the requirements of this section with respect to the

17 number of physicians serving the area for the 12-

18 month period ending on the date on which the re19 tirement or resignation takes effect.’’.

20 (b) DEVELOPMENT OF DEFINITION OF FRONTIER.—

21 For purposes of section 332 of the Public Health Service

22 Act (42 U.S.C. 254e) and for purposes of payment under

23 title XVIII of the Social Security Act (42 U.S.C. 1395

24 et seq.), the Secretary of Health and Human Services

25 shall, by regulation, define the term ‘‘frontier’’. Such defi-
43

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1 nition shall take into account population density and dis2 tance in miles, and time in minutes, to the nearest medical

3 facility.

4 (c) REQUIREMENTS FOR FUTURE REGULATIONS RE5 GARDING THE DESIGNATION OF A HPSA.—The Secretary

6 of Health and Human Services shall not implement any

7 regulation that establishes a new methodology for desig8 nating an area as a health professional shortage area

9 under section 332 of the Public Health Service Act (42

10 U.S.C. 254e) unless such methodology—

11 (1) is not detrimental to underserved rural or

12 frontier communities, including that the method13 ology does not result in the provision of fewer serv14 ices in such communities; and

15 (2) includes consideration of the percentage of

16 the population over the age of 65 years residing in

17 an area.

18 (d) REPORT TO CONGRESS.—Not later than January

19 1, 2001, the Secretary of Health and Human Services

20 shall submit a report to Congress which contains a de21 tailed description of—

22 (1) the development of a definition of the term

23 ‘‘frontier’’ pursuant to subsection (b);

24 (2) the impact that the use of such definition

25 has on Federal heath care programs; and
44

•S 980 IS

1 (3) any recommendations that the Secretary de2 termines to be appropriate.

3 (e) EFFECTIVE DATE.—The amendments made by

4 subsection (a) shall take effect on the date of enactment

5 of this Act.

6 SEC. 202. EXCLUSION OF CERTAIN AMOUNTS RECEIVED

7 UNDER THE NATIONAL HEALTH SERVICE

8 CORPS SCHOLARSHIP PROGRAM.

9 (a) IN GENERAL.—Subsection (c) of section 117 of

10 the Internal Revenue Code of 1986 (relating to the exclu11 sion from gross income amounts received as a qualified

12 scholarship) is amended—

13 (1) by striking ‘‘Subsections (a)’’ and inserting

14 the following:

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

16 subsections (a)’’; and

17 (2) by adding at the end the following:

18 ‘‘(2) NATIONAL HEALTH CORPS SCHOLARSHIP

19 PROGRAM.—Paragraph (1) shall not apply to any

20 amount received by an individual under the National

21 Health Corps Scholarship Program under section

22 338A(g)(1)(A) of the Public Health Service Act.’’.

23 (b) EFFECTIVE DATE.—The amendments made by

24 subsection (a) shall apply to amounts received in taxable

25 years beginning after December 31, 1995.
45

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1 SEC. 203. DESIGNATION OF UNDERSERVED AREAS UNDER

2 HEALTH CARE CONTRACTS ADMINISTERED

3 BY THE OFFICE OF PERSONNEL MANAGE4 MENT.

5 Section 8902(m)(2)(A) of title 5, United States Code,

6 is amended by striking ‘‘a State where 25 percent’’ and

7 all that follows through the period and inserting ‘‘an area

8 designated as a health professional shortage area by the

9 Department of Health and Human Services in accordance

10 with section 332 of the Public Health Service Act (42

11 U.S.C. 254e).’’.

12 SEC. 204. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED13 ERALLY-QUALIFIED HEALTH CENTERS AND

14 RURAL HEALTH CLINICS UNDER THE MED15 ICAID PROGRAM.

16 (a) IN GENERAL.—Section 1902(a)(13) of the Social

17 Security Act (42 U.S.C. 1396a(a)(13)) is amended—

18 (1) in subparagraph (A), by adding ‘‘and’’ at

19 the end;

20 (2) in subparagraph (B), by striking ‘‘and’’ at

21 the end; and

22 (3) by striking subparagraph (C).

23 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

24 1902 of the Social Security Act (42 U.S.C. 1396a) is

25 amended by adding at the end the following:
46

•S 980 IS

1 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED2 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

3 HEALTH CLINICS.—

4 ‘‘(1) IN GENERAL.—Beginning with fiscal year

5 2000 and each succeeding fiscal year, the State plan

6 shall provide for payment for services described in

7 section 1905(a)(2)(C) furnished by a Federally8 qualified health center and services described in sec9 tion 1905(a)(2)(B) furnished by a rural health clinic

10 in accordance with the provisions of this subsection.

11 ‘‘(2) FISCAL YEAR 2000.—For fiscal year 2000,

12 the State plan shall provide for payment for such

13 services in an amount (calculated on a per visit

14 basis) that is equal to 100 percent of the costs of

15 the center or clinic of furnishing such services dur16 ing fiscal year 1999 which are reasonable and re17 lated to the cost of furnishing such services, or

18 based on such other tests of reasonableness as the

19 Secretary prescribes in regulations under section

20 1833(a)(3), or in the case of services to which such

21 regulations do not apply, the same methodology used

22 under section 1833(a)(3), adjusted to take into ac23 count any increase in the scope of such services fur24 nished by the center or clinic during fiscal year

25 2000.
47

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1 ‘‘(3) FISCAL YEAR 2001 AND SUCCEEDING

2 YEARS.—For fiscal year 2001 and each succeeding

3 fiscal year, the State plan shall provide for payment

4 for such services in an amount (calculated on a per

5 visit basis) that is equal to the amount calculated for

6 such services under this subsection for the preceding

7 fiscal year—

8 ‘‘(A) increased by the percentage increase

9 in the MEI (medicare economic index) (as de10 fined in section 1842(i)(3)) applicable to pri11 mary care services (as defined in section

12 1842(i)(4)) for that fiscal year; and

13 ‘‘(B) adjusted to take into account any in14 crease in the scope of such services furnished by

15 the center or clinic during that fiscal year.

16 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY17 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

18 any case in which an entity first qualifies as a Fed19 erally-qualified health center or rural health clinic

20 after October 1, 2000, the State plan shall provide

21 for payment for services described in section

22 1905(a)(2)(C) furnished by the center or services

23 described in section 1905(a)(2)(B) furnished by the

24 clinic in the first fiscal year in which the center or

25 clinic qualifies in an amount (calculated on a per
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1 visit basis) that is equal to 100 percent of the costs

2 of furnishing such services during such fiscal year

3 in accordance with the regulations and methodology

4 referred to in paragraph (2). For each fiscal year

5 following the fiscal year in which the entity first

6 qualifies as a Federally-qualified health center or

7 rural health clinic, the State plan shall provide for

8 the payment amount to be calculated in accordance

9 with paragraph (3) of this subsection.

10 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN11 AGED CARE.—In the case of services furnished by a

12 Federally-qualified health center or rural health clin13 ic pursuant to a contract between the center or clinic

14 and a managed care entity (as defined in section

15 1932(a)(1)(B)), the State plan shall provide for pay16 ment to the center or clinic (at least quarterly) by

17 the State of a supplemental payment equal to the

18 amount (if any) by which the amount determined

19 under paragraphs (2), (3), and (4) of this subsection

20 exceeds the amount of the payments provided under

21 the contract.

22 ‘‘(6) ALTERNATIVE PAYMENT SYSTEM.—Not23 withstanding any other provision of this section, the

24 State plan may provide for payment in any fiscal

25 year to a Federally-qualified health center for serv-
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1 ices described in section 1905(a)(2)(C) or to a rural

2 health clinic for services described in section

3 1905(a)(2)(B) in an amount that is in excess of the

4 amount otherwise required to be paid to the center

5 or clinic under this subsection.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 4712 of the Balanced Budget Act

8 of 1997 (Public Law 105–33; 111 Stat. 508) is

9 amended by striking subsection (c).

10 (2) Section 1915(b) of the Social Security Act

11 (42 U.S.C. 1396n(b)) is amended by striking

12 ‘‘1902(a)(13)(E)’’ and inserting ‘‘1902(aa)’’.

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

14 this section take effect on October 1, 1999.

15 SEC. 205. REVISION AND CLARIFICATION OF MEDICARE RE16 IMBURSEMENT OF TELEHEALTH SERVICES.

17 (a) IN GENERAL.—Section 4206(a) of the Balanced

18 Budget Act of 1997 (42 U.S.C. 1395l note) is amended

19 to read as follows:

20 ‘‘(a) REIMBURSEMENT OF TELEHEALTH SERVICES

21 AUTHORIZED.—

22 ‘‘(1) IN GENERAL.—Beginning on the date of

23 enactment of the Comprehensive Telehealth Act of

24 1999 and subject to paragraph (3), the Secretary of

25 Health and Human Services shall make payments
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1 from the Federal Supplementary Medical Insurance

2 Trust Fund under part B of title XVIII of the So3 cial Security Act (42 U.S.C. 1395j et seq.) in ac4 cordance with the methodology described in sub5 section (b) for items and services for which payment

6 may be made under such part that are provided via

7 telecommunications systems including store-and-for8 ward technologies (as defined in paragraph (2)) by

9 a physician (as defined in section 1861(r) of such

10 Act (42 U.S.C. 1395x(r))) or a practitioner (as de11 fined in paragraph (2)) to a beneficiary under the

12 medicare program residing in a county in a rural

13 area (as defined in section 1886(d)(2)(D) of such

14 Act (42 U.S.C. 1395ww(d)(2)(D))) notwithstanding

15 that the physician or practitioner providing the item

16 or service via telecommunication systems is not at

17 the same location as the medicare beneficiary.

18 ‘‘(2) DEFINITIONS.—

19 ‘‘(A) PRACTITIONER.—For purposes of

20 paragraph (1), the term ‘practitioner’

21 includes—

22 ‘‘(i) a practitioner described in section

23 1842(b)(18)(C) of the Social Security Act

24 (42 U.S.C. 1395u(b)(18)(C)) (including a

25 clinical psychologist); and
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1 ‘‘(ii) a physical, occupational, or

2 speech therapist.

3 ‘‘(B) STORE-AND-FORWARD TECH4 NOLOGIES.—For purposes of paragraph (1), the

5 term ‘store-and-forward technologies’ has the

6 meaning given that term by the Secretary, ex7 cept that the term shall include technologies

8 through which information (including any audio

9 recording or visual image) is transferred and

10 stored for purposes of review by a health care

11 provider if the patient, the referring physician,

12 or the health care provider is not present at the

13 time the asynchronous review occurs at the re14 mote site.

15 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in

16 this subsection shall be construed as requiring pay17 ment for services provided to a patient solely on the

18 basis of information conveyed via facsimile machine

19 or via traditional telephone conversation.’’.

20 (b) ANY HEALTH CARE PRACTITIONER MAY

21 PRESENT BENEFICIARY TO CONSULTING PHYSICIAN.—

22 Section 4206(b) of the Balanced Budget Act of 1997 (42

23 U.S.C. 1395l note) is amended by adding at the end the

24 following:
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1 ‘‘(5) Any health care practitioner (whether or

2 not such practitioner is certified under the medicare

3 program) that is acting on instructions from the re4 ferring physician or practitioner may present the

5 beneficiary to the consulting physician or practi6 tioner for the provision of items and services. The

7 referring physician and the practitioner shall not re8 ceive any reimbursement for such presentation other

9 than the payment that the referring physician re10 ceives pursuant to paragraph (1).’’.

11 (c) ALL CPT BILLING CODES COVERED UNDER

12 TELEHEALTH PROGRAM.—Section 4206 of the Balanced

13 Budget Act of 1997 (42 U.S.C. 1395l note) is amended

14 by adding at the end the following:

15 ‘‘(e) COVERAGE OF SERVICES.—Payment for items

16 and services provided pursuant to subsection (a) shall in17 clude payment for all current procedural terminology bill18 ing codes that are covered under the medicare program

19 under title XVIII of the Social Security Act (42 U.S.C.

20 1395 et seq.).’’.

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

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

23 this Act.
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1 SEC. 206. STUDY AND REPORTS TO CONGRESS REGARDING

2 TELEHEALTH LICENSURE.

3 (a) STUDY.—The Secretary shall conduct a study

4 regarding—

5 (1) the number, percentage, and types of health

6 care providers licensed to provide telehealth services

7 across State lines, including the number and types

8 of health care providers licensed to provide such

9 services in more than 3 States;

10 (2) the status of any reciprocal, mutual recogni11 tion, fast-track, or other licensure agreements be12 tween or among various States;

13 (3) the status of any efforts to develop uniform

14 national sets of standards for the licensure of health

15 care providers to provide telehealth services across

16 State lines;

17 (4) a projection of future utilization of tele18 health consultations across State lines;

19 (5) State efforts to increase or reduce licensure

20 as a burden to interstate telehealth practice; and

21 (6) any State licensure requirements that ap22 pear to constitute unnecessary barriers to the provi23 sion of telehealth services across State lines.

24 (b) REPORTS TO CONGRESS.—

25 (1) INITIAL REPORT.—Not later than January

26 1, 2000, the Secretary shall submit to the appro-
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1 priate committees of Congress a detailed report on

2 the study conducted under subsection (a).

3 (2) ANNUAL REPORTS.—

4 (A) IN GENERAL.—Not later than January

5 1, 2001, and each January 1 thereafter, the

6 Secretary shall submit to the appropriate com7 mittees of Congress a report on relevant devel8 opments regarding the matters studied by the

9 Secretary pursuant to subsection (a).

10 (B) RECOMMENDATIONS.—If, with respect

11 to a report submitted under subparagraph (A),

12 the Secretary determines that States are not

13 making progress in facilitating the provision of

14 telehealth services across State lines by elimi15 nating unnecessary requirements, adopting re16 ciprocal licensing arrangements for telehealth

17 services, implementing uniform requirements

18 for telehealth licensure, or other means, the

19 Secretary shall include in the report rec20 ommendations concerning the scope and nature

21 of Federal actions required to reduce licensure

22 as a barrier to the interstate provision of tele23 health services.

24 SEC. 207. JOINT WORKING GROUP ON TELEHEALTH.

25 (a) IN GENERAL.—
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1 (1) REDESIGNATION.—The Joint Working

2 Group on Telemedicine, established by the Secretary,

3 shall hereafter be known as the ‘‘Joint Working

4 Group on Telehealth’’ with the chairperson being

5 designated by the Director of the Office for the Ad6 vancement of Telehealth.

7 (2) MISSION.—The mission of the Joint Work8 ing Group on Telehealth is to—

9 (A) identify, monitor, and coordinate Fed10 eral telehealth projects, data sets, and pro11 grams;

12 (B) analyze—

13 (i) how telehealth systems are expand14 ing access to health care services, edu15 cation, and information;

16 (ii) the clinical, educational, or admin17 istrative efficacy and cost-effectiveness of

18 telehealth applications; and

19 (iii) the quality of the telehealth serv20 ices delivered; and

21 (C) make further recommendations for co22 ordinating Federal and State efforts to increase

23 access to health care services, education, and

24 information in rural and underserved areas.
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1 (3) ANNUAL REPORTS.—Not later than Janu2 ary 1, 2000, and annually thereafter, the Joint

3 Working Group on Telehealth shall report to Con4 gress on the status of the Group’s mission and the

5 state of the telehealth field generally.

6 (b) REPORT SPECIFICS.—The annual report required

7 under subsection (a)(3) shall include—

8 (1) an analysis of—

9 (A) the matters described in subsection

10 (a)(2)(B);

11 (B) the Federal activities with respect to

12 telehealth; and

13 (C) the progress of the Joint Working

14 Group on Telehealth’s efforts to coordinate

15 Federal telehealth programs; and

16 (2) recommendations for a coordinated Federal

17 strategy to increase health care access through tele18 health.

19 (c) TERMINATION.—The Joint Working Group on

20 Telehealth shall terminate on the date that the Group sub21 mits the annual report that is due to be submitted on Jan22 uary 1, 2004, under subsection (a)(3).

23 (d) AUTHORIZATION OF APPROPRIATIONS.—There

24 are authorized to be appropriated such sums as are nec-
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1 essary for the Joint Working Group on Telehealth to carry

2 out the purposes of this section.

3 TITLE III—DEVELOPMENT OF

4 TELEHEALTH NETWORKS

5 Subtitle A—Development of

6 Telehealth Networks

7 SEC. 301. FINANCIAL ASSISTANCE AUTHORIZED.

8 (a) IN GENERAL.—The Secretary, acting through the

9 Director of the Office for Advancement of Telehealth, shall

10 provide financial assistance (as described in section 302)

11 to eligible telehealth networks (as described in section

12 303) for the purpose of expanding access to health care

13 services for individuals in rural and frontier areas through

14 the use of telehealth networks.

15 (b) MAXIMUM AMOUNT OF FINANCIAL ASSIST16 ANCE.—The Secretary may establish the maximum

17 amount of financial assistance made available to a recipi18 ent for each fiscal year under this title by publishing no19 tice of such amount in the Federal Register or the Health

20 Resources and Services Administration Preview.

21 SEC. 302. FINANCIAL ASSISTANCE DESCRIBED.

22 (a) IN GENERAL.—Financial assistance shall consist

23 of loans (as described under subsection (b)), grants (as

24 described under subsection (c)), or both as apportioned

25 under subsection (d).
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1 (b) LOANS.—

2 (1) IN GENERAL.—The Secretary is authorized

3 to provide loans to eligible telehealth networks under

4 this title.

5 (2) MAXIMUM TERM OF LOANS.—

6 (A) IN GENERAL.—Subject to subpara7 graph (B), the Secretary may establish the

8 maximum term of any loan provided under this

9 title by publishing notice of such term in the

10 Federal Register or the Health Resources and

11 Services Administration Preview.

12 (B) LIMITATION.—The maximum term of

13 any loan provided under this title shall be for

14 a period of not more than 10 years.

15 (3) LOAN SECURITY AND FEASIBILITY.—The

16 Secretary shall make a loan under this title only if

17 the Secretary determines that—

18 (A) the security for the loan is reasonably

19 adequate; and

20 (B) the loan will be repaid within the term

21 of such loan.

22 (4) LOAN FORGIVENESS PROGRAM.—

23 (A) ESTABLISHMENT.—With respect to

24 loans provided under this title, the Secretary

25 shall establish a loan forgiveness program under
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1 which recipients of such loans may apply to

2 have all or a portion of such loans forgiven.

3 (B) APPLICATION.—

4 (i) IN GENERAL.—Any recipient of a

5 loan under this title that desires to have

6 such loan forgiven under the program es7 tablished under subparagraph (A) shall

8 submit an application to the Secretary

9 within 180 days of the end of the term of

10 such loan, in such manner, and accom11 panied by such information as the Sec12 retary may reasonably require.

13 (ii) CONTENTS.—Each application

14 submitted pursuant to clause (i) shall—

15 (I) demonstrate that the recipient

16 has a financial need for such forgive17 ness; and

18 (II) demonstrate that the recipi19 ent has satisfied the quality and cost20 effectiveness criteria developed under

21 subparagraph (C).

22 (C) QUALITY AND COST-EFFECTIVENESS

23 CRITERIA.—As part of the program established

24 under subparagraph (A), the Secretary shall de25 velop criteria for determining the quality and
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1 cost-effectiveness of programs operated with

2 loans provided under this title.

3 (c) GRANTS.—The Secretary is authorized to award

4 grants to eligible telehealth networks under this title.

5 (d) APPORTIONMENT.—

6 (1) IN GENERAL.—Subject to paragraph (2),

7 the Secretary shall determine what portion of the fi8 nancial assistance provided to an eligible telehealth

9 network is a grant and what portion of such finan10 cial assistance is a loan.

11 (2) REQUIREMENTS.—In determining the ap12 portionment under paragraph (1), the Secretary

13 shall—

14 (A) ensure that the Federal Government

15 receives the maximum feasible repayment of the

16 financial assistance by basing such apportion17 ment on the ability of the recipient to repay a

18 loan provided under this title; and

19 (B) fully use the funds made available to

20 carry out this title.

21 SEC. 303. ELIGIBLE TELEHEALTH NETWORKS.

22 (a) IN GENERAL.—An entity that is a health care

23 provider and a member of an existing or proposed tele24 health network, or an entity that is a consortium of health

25 care providers that are members of an existing or proposed
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1 telehealth network shall be eligible for financial assistance

2 under this title.

3 (b) REQUIREMENTS.—

4 (1) IN GENERAL.—A telehealth network re5 ferred to in subsection (a) shall, at a minimum, be

6 composed of a multispecialty entity (as defined in

7 paragraph (2)(A)), a network of community-based

8 health care providers (as defined in paragraph

9 (2)(B)), and a public entity (as defined in paragraph

10 (2)(C)).

11 (2) DEFINITIONS.—

12 (A) MULTISPECIALTY ENTITY.—For pur13 poses of paragraph (1), the term ‘‘multispe14 cialty entity’’ means an entity which—

15 (i) provides 24-hour access to a range

16 of diagnostic and therapeutic services; and

17 (ii) may be located in an urban area.

18 (B) NETWORK OF COMMUNITY-BASED

19 HEALTH CARE PROVIDERS.—For purposes of

20 paragraph (1), the term ‘‘network of commu21 nity-based health care providers’’ means a net22 work located in a rural area (as defined by the

23 Secretary) that includes at least 2 of the fol24 lowing:
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1 (i) A community or migrant health

2 center.

3 (ii) A local health department.

4 (iii) A nonprofit or public hospital.

5 (iv) A health professional in private

6 practice.

7 (v) A rural health clinic.

8 (vi) A skilled nursing facility.

9 (vii) A county mental health facility or

10 other publicly funded mental health facil11 ity.

12 (viii) A provider of home health serv13 ices.

14 (ix) Any other publicly funded health

15 or social services agency.

16 (C) PUBLIC ENTITY.—For purposes of

17 paragraph (1), the term ‘‘public entity’’ means

18 an entity that demonstrates its use of the tele19 health network for purposes of education and

20 economic development (as required by the Sec21 retary), and includes—

22 (i) a public school;

23 (ii) a public library;

24 (iii) a college or university;

25 (iv) a local government entity; or
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1 (v) a local business entity that is not

2 related to the provision of health care serv3 ices.

4 (c) FOR-PROFIT ENTITY.—A telehealth network may

5 include for-profit entities so long as the recipient of finan6 cial assistance under this title is a nonprofit entity.

7 SEC. 304. USE OF FINANCIAL ASSISTANCE.

8 (a) PERMITTED USES.—Any recipient of financial as9 sistance under this title may use such financial assistance

10 for the acquisition of telehealth equipment and modifica11 tions or improvements of telehealth services including—

12 (1) the development and acquisition through

13 lease or purchase of computer hardware and soft14 ware, audio and video equipment, computer network

15 equipment, interactive equipment, data terminal

16 equipment, or other equipment that would further

17 the purposes of this title;

18 (2) the provision of technical assistance and in19 struction for the development and use of such equip20 ment;

21 (3) the development and acquisition of instruc22 tional programming;

23 (4) demonstration projects for teaching or

24 training medical students, residents, and other stu-
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1 dents in health professions in rural training sites re2 garding the application of telehealth;

3 (5) transmission costs, maintenance of equip4 ment, compensation of specialists, and referring

5 health care providers;

6 (6) development of projects to use telehealth to

7 facilitate collaboration among health care providers;

8 (7) electronic archival of patient records;

9 (8) collection and analysis of usage statistics

10 and data that can be used to document the cost-ef11 fectiveness of the telehealth services; or

12 (9) such other uses that are consistent with

13 achieving the purposes of this title as approved by

14 the Secretary.

15 (b) PROHIBITED USES.—Any recipient of financial

16 assistance under this title may not use such financial as17 sistance for the following purposes:

18 (1) To build structures on or acquire real prop19 erty, except that such funds may be expended for

20 minor renovations relating to the installation of

21 equipment.

22 (2) To purchase or lease equipment to the ex23 tent the expenditures would exceed more than 40

24 percent of the financial assistance provided in the

25 form of grants pursuant to section 302(c).
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1 (3) To purchase or install transmission equip2 ment (such as laying cable or telephone lines, micro3 wave towers, amplifiers, and digital switching equip4 ment).

5 (4) For indirect costs (as determined by the

6 Secretary) to the extent the expenditures would ex7 ceed more than 20 percent of the financial assist8 ance.

9 SEC. 305. APPLICATION.

10 (a) IN GENERAL.—Each eligible telehealth network

11 that desires to receive financial assistance under this title,

12 in consultation with the State office of rural health or

13 other appropriate State agency, shall submit an applica14 tion to the Secretary at such time, in such manner, and

15 accompanied by such additional information as the Sec16 retary may reasonably require.

17 (b) CONTENTS.—Each application submitted pursu18 ant to subsection (a) shall include at least the following

19 information:

20 (1) A description of the anticipated need for fi21 nancial assistance.

22 (2) A description of the activities which the en23 tity intends to carry out using the financial assist24 ance provided under this title.
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1 (3) A plan for continuing the project after fi2 nancial assistance provided under this title has

3 ended.

4 (4) A description of the manner in which the

5 activities funded by the financial assistance provided

6 under this title will meet health care needs of under7 served rural populations within the State.

8 (5) A description of how the local community or

9 region to be served by the proposed telehealth net10 work will be involved in the development and ongo11 ing operations of the telehealth network.

12 (6) A description of the source and amount of

13 non-Federal funds the entity would pledge for the

14 project.

15 (7) A description of the long-term viability of

16 the project and evidence of health care provider com17 mitment to the telehealth network.

18 SEC. 306. APPROVAL OF APPLICATION.

19 (a) IN GENERAL.—The Secretary shall approve appli20 cations in accordance with the criteria established in sub21 section (b) and the preferences described in subsection (c).

22 (b) CRITERIA.—The Secretary shall not approve an

23 application under this section unless the Secretary finds

24 the following:
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1 (1) EXPENDITURES IN RURAL AREAS.—At least

2 50 percent of the financial assistance is expended—

3 (A) in a rural area; or

4 (B) to provide services to residents of rural

5 areas.

6 (2) PROMOTION OF INTEGRATION.—The appli7 cation demonstrates that the project will—

8 (A) promote the integration of telehealth

9 in the community;

10 (B) avoid redundancy of technology;

11 (C) achieve economies of scale; and

12 (D) coordinate telehealth services across

13 different networks within a geographic region.

14 (c) PREFERENCES.—In providing financial assistance

15 under this title, the Secretary shall give preference to any

16 applicant telehealth network that—

17 (1) is a health care provider in a telehealth net18 work or a health care provider that proposes to form

19 such a network, in which the majority of the health

20 care providers in such network are located in an

21 area that is designated by the Federal Government

22 or the State as—

23 (A) a medically underserved area; or

24 (B) a health, dental health, or mental

25 health professional shortage area;
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1 (2) proposes to use financial assistance pro2 vided under this title to plan and establish telehealth

3 networks that will link rural hospitals and rural

4 health care providers to other hospitals, health care

5 providers, and patients;

6 (3) proposes to use financial assistance pro7 vided under this title—

8 (A) to offer a range of health care applica9 tions; and

10 (B) to promote greater efficiency in the

11 use of health care resources;

12 (4) demonstrates financial, institutional, and

13 community support for the long-term viability of the

14 telehealth network through cost participation and

15 other indicators determined by the Secretary; and

16 (5) demonstrates a detailed plan for coordi17 nating telehealth network use by eligible telehealth

18 networks so that health care services are given pri19 ority over services that are not related to the provi20 sion of health care services.

21 SEC. 307. ADMINISTRATION.

22 (a) NONDUPLICATION.—The Secretary shall ensure

23 that services and programs developed with financial assist24 ance provided under this title do not duplicate established
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1 telehealth networks that adequately serve rural popu2 lations.

3 (b) COORDINATION WITH OTHER AGENCIES.—The

4 Secretary shall coordinate, to the extent practicable, with

5 other Federal and State agencies with similar grant, loan,

6 or other financial assistance programs to pool resources

7 for funding meritorious proposals for the development of

8 telehealth networks in rural areas.

9 (c) INFORMATIONAL EFFORTS.—The Secretary shall

10 establish and implement procedures to carry out informa11 tional efforts that notify potential applicants located in the

12 rural areas of each State of the financial assistance avail13 able under this title.

14 SEC. 308. REGULATIONS.

15 Not later than 180 days after the date of enactment

16 of this Act, the Secretary shall by regulation prescribe

17 such rules and regulations as the Secretary deems nec18 essary to carry out the provisions of this title.

19 SEC. 309. AUTHORIZATION OF APPROPRIATIONS.

20 There are authorized to be appropriated to carry out

21 this title, $40,000,000 for fiscal year 2000, and such sums

22 as may be necessary for each of fiscal years 2001 through

23 2006.
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1 Subtitle B—Rural Health Outreach

2 and Network Development

3 Grant Program

4 SEC. 315. RURAL HEALTH OUTREACH AND NETWORK DE5 VELOPMENT GRANT PROGRAM.

6 (a) IN GENERAL.—Section 330A of subpart I of part

7 D of title III of the Public Health Service Act (42 U.S.C.

8 254c) is amended—

9 (1) in the heading, by striking ‘‘OUTREACH,

10 NETWORK, DEVELOPMENT, AND TELEMEDI11 CINE’’ and inserting ‘‘OUTREACH AND NETWORK

12 DEVELOPMENT’’;

13 (2) in subsection (c)—

14 (A) in paragraph (1)(A)—

15 (i) by striking ‘‘nonprofit private enti16 ty’’ and inserting ‘‘private nonprofit enti17 ty’’; and

18 (ii) by striking ‘‘three’’ and inserting

19 ‘‘3’’;

20 (B) in paragraph (2), by striking ‘‘so long

21 as’’ and inserting ‘‘as long as’’; and

22 (C) by striking paragraph (3); and

23 (3) in subsection (e)—
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1 (A) in paragraph (1), by striking

2 ‘‘Amounts’’ and inserting ‘‘Subject to para3 graphs (2) and (3), amounts’’;

4 (B) in paragraph (2)—

5 (i) by striking ‘‘RURAL AREAS.—’’ and

6 all that follows through ‘‘In awarding’’ and

7 inserting ‘‘RURAL AREAS.—In awarding’’;

8 and

9 (ii) by striking subparagraph (B); and

10 (C) by striking paragraph (3) and insert11 ing the following:

12 ‘‘(3) LIMITATIONS.—An eligible network de13 scribed in subsection (c) may not use—

14 ‘‘(A) more than 40 percent of the amounts

15 provided under a grant under this section to

16 purchase equipment; or

17 ‘‘(B) any of the amounts provided under a

18 grant under this section—

19 ‘‘(i) to build structures on or acquire

20 real property; or

21 ‘‘(ii) for construction.’’.

22 (b) TRANSITION.—The Secretary of Health and

23 Human Services shall ensure the continued funding of

24 grants made, or contracts or cooperative agreements en25 tered into, under subpart I of part D of title III of the
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1 Public Health Service Act (42 U.S.C. 254b et seq.) (as

2 such subpart existed on the day prior to the date of enact3 ment of this Act), until the expiration of the grant period

4 or the term of the contract or cooperative agreement. Such

5 funding shall be continued under the same terms and con6 ditions as were in effect on the date on which the grant,

7 contract, or cooperative agreement was awarded, subject

8 to the availability of appropriations.

9 TITLE IV—MISCELLANEOUS

10 PROVISIONS

11 SEC. 401. BANK DEDUCTIBILITY OF SMALL, TAX-EXEMPT

12 DEBTS.

13 (a) IN GENERAL.—Section 265(b)(3) of the Internal

14 Revenue Code of 1986 (relating to exception for certain

15 tax-exempt obligations) is amended by adding at the end

16 the following:

17 ‘‘(G) ELECTION TO APPLY LIMITATION ON

18 AMOUNT OF OBLIGATIONS AT BORROWER

19 LEVEL.—

20 ‘‘(i) IN GENERAL.—An issuer, the

21 proceeds of the obligations of which are to

22 be used to make or finance eligible loans,

23 may elect to apply subparagraphs (C) and

24 (D) by treating each borrower as the issuer

25 of a separate issue.
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1 ‘‘(ii) ELIGIBLE LOAN.—For purposes

2 of this subparagraph—

3 ‘‘(I) IN GENERAL.—The term ‘el4 igible loan’ means 1 or more loans to

5 a qualified borrower the proceeds of

6 which are used by the borrower for

7 health care or educational purposes

8 and the outstanding balance of which

9 issued during a calendar year does not

10 exceed $5,000,000.

11 ‘‘(II) QUALIFIED BORROWER.—

12 The term ‘qualified borrower’ means a

13 borrower which is an organization de14 scribed in section 501(c)(3) and ex15 empt from taxation under section

16 501(a).

17 ‘‘(iii) MANNER OF ELECTION.—The

18 election described in clause (i) may be

19 made by an issuer for any calendar year at

20 any time prior to its first issuance during

21 such year of obligations the proceeds of

22 which will be used to make or finance 1 or

23 more eligible loans.

24 ‘‘(iv) MODIFICATION OF RULE FOR

25 COMPOSITE ISSUES.—In the case of an ob-
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1 ligation which is issued by any issuer

2 which has made the election described in

3 clause (i), subparagraph (F) shall be ap4 plied without regard to clause (i) of such

5 subparagraph.’’

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

7 subsection (a) shall apply to taxable years beginning after

8 December 31, 1999.

9 SEC. 402. ACCESS TO DATA.

10 (a) REQUIREMENT.—The heads of the agencies de11 scribed in subsection (b) shall negotiate and enter into

12 interagency agreements with agencies and offices of the

13 Department of Health and Human Services under which

14 such agencies and offices will be provided access to data

15 sets for intramural and extramural research conducted or

16 supported by such agencies or offices.

17 (b) AGENCY HEADS.—The agencies described in this

18 section are the following:

19 (1) The National Center for Health Statistics.

20 (2) The Centers for Disease Control and Pre21 vention.

22 (3) The Agency for Health Care Policy and Re23 search.

24 (4) The Bureau of the Census.
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1 (c) INFORMATION.—The information that is to be

2 made available under interagency agreements under this

3 section shall include all information that is necessary for

4 scholarly and policy research. Such information shall be

5 made available in a manner that includes a description of

6 the geographic area or location of the individuals who are

7 the subject of such information.

8 (d) AVAILABILITY.—Information that is subject to an

9 interagency agreement under this section shall be made

10 available to bona fide researchers as determined appro11 priate by the Secretary of Health and Human Services.

12 (e) CONFIDENTIALITY.—Each interagency agreement

13 entered into under this section shall contain provisions

14 that protect the confidentiality of the individuals who are

15 the subjects of such information.

Æ