I 

112TH CONGRESS 

2D SESSION H. R. 5194 

To amend title XVIII of the Social Security Act to protect and preserve 

access of Medicare beneficiaries in rural areas to health care providers 

under the Medicare program, to amend title III of the Public Health 

Service Act to extend discounts under the 340B program, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2012 

Mrs. MCMORRIS RODGERS (for herself and Mr. THOMPSON of California) introduced the following bill; which was referred to the Committee on Energy and 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 title XVIII of the Social Security Act to protect 

and preserve access of Medicare beneficiaries in rural 

areas to health care providers under the Medicare program, to amend title III of the Public Health Service 

Act to extend discounts under the 340B program, 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Rural Hospital and Provider Equity and 340B Improve4 ment Act of 2012’’. 

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

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—RURAL HOSPITAL AND PROVIDER EQUITY 

Sec. 101. Sense of the Congress. 

Sec. 102. Fairness in the Medicare disproportionate share hospital (DSH) adjustment for rural hospitals. 

Sec. 103. Extension and expansion of the Medicare hold harmless provision 

under the prospective payment system for hospital outpatient 

department (HOPD) services for certain hospitals. 

Sec. 104. Temporary improvements to the Medicare inpatient hospital payment 

adjustment for low-volume hospitals. 

Sec. 105. Extension of Medicare wage index reclassifications for certain hospitals. 

Sec. 106. Extension of Medicare reasonable costs payments for certain clinical 

diagnostic laboratory tests furnished to hospital patients in certain rural areas. 

Sec. 107. Elimination of isolation test for cost-based ambulance reimbursement 

for critical access hospitals. 

Sec. 108. Extension of Medicare incentive payment program for physician scarcity areas. 

Sec. 109. Extension of floor on Medicare work geographic adjustment. 

Sec. 110. Improving care planning for Medicare home health services. 

Sec. 111. Rural health clinic improvements. 

Sec. 112. Temporary Medicare payment increase for home health services furnished in a rural area. 

Sec. 113. Extension of increased Medicare payments for rural ground ambulance services. 

Sec. 114. Extension of payment for technical component of certain physician 

pathology services. 

Sec. 115. Facilitating the provision of telehealth services across State lines. 

Sec. 116. Medicare Part A payment for anesthesiologist services in certain 

rural hospitals based on CRNA pass-through rules. 

Sec. 117. Temporary floor on the practice expense geographic index for services 

furnished in rural areas outside of frontier States under the 

Medicare physician fee schedule. 

Sec. 118. Revisions to standard for designation of sole community hospitals. 

Sec. 119. State offices of rural health. 

Sec. 120. Ensuring proportional representation of interests of rural areas on 

MEDPAC. 

TITLE II—340B PROGRAM IMPROVEMENT 


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Sec. 201. Extension of discounts to inpatient drugs. 

Sec. 202. Prohibition against duplicate discounts for physician administered 

drugs. 

Sec. 203. Continued inclusion of orphan drugs in definition of covered outpatient drugs; technical amendment. 

Sec. 204. Application of rules for determining provider-based status for certain 

entities. 

1 TITLE I—RURAL HOSPITAL AND 

2 PROVIDER EQUITY 

3 SEC. 101. SENSE OF THE CONGRESS. 

4 It is the sense of the Congress that— 

5 (1) residents of rural and frontier communities 

6 should have access to affordable, quality health care; 

7 (2) rural and frontier communities face unique 

8 challenges in health care delivery and financing; 

9 (3) Federal health policy must reflect the 

10 unique needs of residents of rural and frontier com11 munities and such communities in an equitable and 

12 sustainable manner; and 

13 (4) stakeholders should work collectively to 

14 identify innovative policies that address the avail15 ability, delivery, and affordability of health care 

16 services in rural and frontier communities. 

17 SEC. 102. FAIRNESS IN THE MEDICARE DISPROPOR18 TIONATE SHARE HOSPITAL (DSH) ADJUST19 MENT FOR RURAL HOSPITALS. 

20 Section 1886(d)(5)(F)(xiv)(II) of the Social Security 

21 Act (42 U.S.C. 1395ww(d)(5)(F)(xiv)(II)) is amended by 

22 adding at the end the following new sentence: ‘‘The preVerDate Mar 15 2010 03:24 May 03, 2012 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5194.IH H5194

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1 ceding sentence shall not apply to any hospital with re2 spect to discharges occurring on or after October 1, 2011, 

3 and before October 1, 2012.’’. 

4 SEC. 103. EXTENSION AND EXPANSION OF THE MEDICARE 

5 HOLD HARMLESS PROVISION UNDER THE 

6 PROSPECTIVE PAYMENT SYSTEM FOR HOS7 PITAL OUTPATIENT DEPARTMENT (HOPD) 

8 SERVICES FOR CERTAIN HOSPITALS. 

9 Section 1833(t)(7)(D)(i) of the Social Security Act 

10 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

11 (1) in subclause (II)— 

12 (A) in the first sentence, by striking 

13 ‘‘March 1, 2012’’ and inserting ‘‘January 1, 

14 2013’’; and 

15 (B) in the second sentence— 

16 (i) by striking ‘‘and 85’’ and inserting 

17 ‘‘85’’; and 

18 (ii) by inserting the following before 

19 the period at the end: ‘‘, and 100 percent 

20 with respect to such services furnished in 

21 the last 10 months of 2012’’; and 

22 (2) in subclause (III)— 

23 (A) in the first sentence— 

24 (i) by striking ‘‘2009, and before 

25 March 1, 2012, for which’’ and inserting 


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1 ‘‘2009, and before January 1, 2013, for 

2 which’’; and 

3 (ii) by striking ‘‘85 percent’’ and in4 serting ‘‘the applicable percentage (as de5 termined under the second sentence of sub6 clause (II) for the year)’’; and 

7 (B) in the second sentence, by striking 

8 ‘‘2010, and before March 1, 2012, the pre9 ceding’’ and inserting ‘‘2010, and before Janu10 ary 1, 2013, the preceding’’. 

11 SEC. 104. TEMPORARY IMPROVEMENTS TO THE MEDICARE 

12 INPATIENT HOSPITAL PAYMENT ADJUST13 MENT FOR LOW-VOLUME HOSPITALS. 

14 Section 1886(d)(12) of the Social Security Act (42 

15 U.S.C. 1395ww(d)(12)) is amended— 

16 (1) in subparagraph (C)(i), by inserting ‘‘and 

17 2,000 discharges, respectively,’’ after ‘‘1,600 dis18 charges’’; and 

19 (2) in subparagraph (D)— 

20 (A) by striking ‘‘1,600’’ and inserting ‘‘the 

21 applicable number of’’; and 

22 (B) by adding at the end the following new 

23 sentence: ‘‘For purposes of the preceding sen24 tence, the term ‘applicable number of dis25 charges’ means 1,600 discharges with respect to 


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1 discharges occurring in fiscal year 2011 and 

2 2,000 discharges with respect to discharges oc3 curring in fiscal year 2012’’. 

4 SEC. 105. EXTENSION OF MEDICARE WAGE INDEX RECLAS5 SIFICATIONS FOR CERTAIN HOSPITALS. 

6 (a) EXTENSION OF CORRECTION OF MID-YEAR RE7 CLASSIFICATION EXPIRATION FOR CERTAIN HOS8 PITALS.— 

9 (1) IN GENERAL.—In the case of a hospital de10 scribed in paragraph (2), the Secretary of Health 

11 and Human Services shall apply subsection (a) of 

12 section 106 of division B of the Tax Relief and 

13 Health Care Act of 2006 (42 U.S.C. 1395ww note), 

14 as amended by section 117 of the Medicare, Med15 icaid, and SCHIP Extension Act of 2007 (Public 

16 Law 110–173), section 124 of the Medicare Im17 provements for Patients and Providers Act of 2008 

18 (Public Law 110–275), sections 3137(a) and 10317 

19 of the Patient Protection and Affordable Care Act 

20 (Public Law 111–148), and section 102 of the Medi21 care and Medicaid Extenders Act of 2010 (Public 

22 Law 111–309), by substituting ‘‘September 30, 

23 2012’’ for ‘‘November 30, 2011’’. 

24 (2) HOSPITAL DESCRIBED.—A hospital de25 scribed in this paragraph is— 


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1 (A) a hospital— 

2 (i) that is described in subsection (a) 

3 of such section 106; and 

4 (ii)(I) that is located in a rural area; 

5 and 

6 (II) for which the Secretary of Health 

7 and Human Services has determined the 

8 extension under this subsection to be ap9 propriate; or 

10 (B) a sole community hospital located in a 

11 State with less than 10 people per square mile 

12 that was provided with a special exception re13 classification extension under section 117(a)(2) 

14 of the Medicare, Medicaid, and SCHIP Exten15 sion Act of 2007 (Public Law 110–173). 

16 (b) NOT BUDGET NEUTRAL.—The provisions of this 

17 section shall not be effected in a budget-neutral manner. 

18 SEC. 106. EXTENSION OF MEDICARE REASONABLE COSTS 

19 PAYMENTS FOR CERTAIN CLINICAL DIAG20 NOSTIC LABORATORY TESTS FURNISHED TO 

21 HOSPITAL PATIENTS IN CERTAIN RURAL 

22 AREAS. 

23 Section 416(b) of the Medicare Prescription Drug, 

24 Improvement, and Modernization Act of 2003 (42 U.S.C. 

25 1395l–4), as amended by section 105 of division B of the 


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1 Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395l 

2 note), section 107 of the Medicare, Medicaid, and SCHIP 

3 Extension Act of 2007 (42 U.S.C. 1395l note), section 

4 3122 of the Patient Protection and Affordable Care Act 

5 (Public Law 111–148), and section 109 of the Medicare 

6 and Medicaid Extenders Act of 2010 (Public Law 111– 

7 309), is amended by striking ‘‘the 2-year period beginning 

8 on July 1, 2010’’ and inserting ‘‘the 30-month period be9 ginning on July 1, 2010’’. 

10 SEC. 107. ELIMINATION OF ISOLATION TEST FOR COST11 BASED AMBULANCE REIMBURSEMENT FOR 

12 CRITICAL ACCESS HOSPITALS. 

13 (a) IN GENERAL.—Section 1834(l)(8) of the Social 

14 Security Act (42 U.S.C. 1395m(l)(8)) is amended— 

15 (1) in subparagraph (B)— 

16 (A) by striking ‘‘owned and’’; and 

17 (B) by inserting ‘‘(including when such 

18 services are provided by the entity under an ar19 rangement with the hospital)’’ after ‘‘hospital’’; 

20 and 

21 (2) by striking the comma at the end of sub22 paragraph (B) and all that follows and inserting a 

23 period. 


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

2 this section shall apply to services furnished on or after 

3 January 1, 2012. 

4 SEC. 108. EXTENSION OF MEDICARE INCENTIVE PAYMENT 

5 PROGRAM FOR PHYSICIAN SCARCITY AREAS. 

6 Section 1833(u)(1) of the Social Security Act (42 

7 U.S.C. 1395l(u)(1)) is amended by inserting ‘‘, and such 

8 services furnished on or after January 1, 2012, and before 

9 January 1, 2013’’ after ‘‘2008’’. 

10 SEC. 109. EXTENSION OF FLOOR ON MEDICARE WORK GEO11 GRAPHIC ADJUSTMENT. 

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

13 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before 

14 March 1, 2012’’ and inserting ‘‘before January 1, 2013’’. 

15 SEC. 110. IMPROVING CARE PLANNING FOR MEDICARE 

16 HOME HEALTH SERVICES. 

17 (a) PART A PROVISIONS.—Section 1814(a) of the So18 cial Security Act (42 U.S.C. 1395f(a)) is amended— 

19 (1) in paragraph (2)— 

20 (A) in the matter preceding subparagraph 

21 (A), by inserting ‘‘, a nurse practitioner or clin22 ical nurse specialist who is working in collabo23 ration with a physician in accordance with 

24 State law, a certified nurse-midwife (as defined 

25 in section 1861(gg)) as authorized by State law, 


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1 or a physician assistant (as defined in section 

2 1861(aa)(5)) under the supervision of a physi3 cian’’ after ‘‘1866(j)’’; and 

4 (B) in subparagraph (C)— 

5 (i) by inserting ‘‘, a nurse practi6 tioner, a clinical nurse specialist, a cer7 tified nurse-midwife, or a physician assist8 ant (as the case may be)’’ after ‘‘physi9 cian’’ the first 2 times it appears; and 

10 (ii) by striking ‘‘, and, in the case of 

11 a certification made by a physician’’ and 

12 all that follows through ‘‘face-to-face en13 counter’’ and inserting ‘‘, and, in the case 

14 of a certification made by a physician after 

15 January 1, 2010, or by a nurse practi16 tioner, clinical nurse specialist, certified 

17 nurse-midwife, or physician assistant (as 

18 the case may be) after January 1, 2012, 

19 prior to making such certification the phy20 sician, nurse practitioner, clinical nurse 

21 specialist, certified nurse-midwife, or physi22 cian assistant must document that the 

23 physician, nurse practitioner, clinical nurse 

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1 cian assistant has had a face-to-face en2 counter’’; 

3 (2) in the second sentence, by inserting ‘‘cer4 tified nurse-midwife,’’ after ‘‘clinical nurse spe5 cialist,’’; 

6 (3) in the third sentence— 

7 (A) by striking ‘‘physician certification’’ 

8 and inserting ‘‘certification’’; 

9 (B) by inserting ‘‘(or on January 1, 2012, 

10 in the case of regulations to implement the 

11 amendments made by section 11 of the Rural 

12 Hospital and Provider Equity and 340B Im13 provement Act of 2012)’’ after ‘‘1981’’; and 

14 (C) by striking ‘‘a physician who’’ and in15 serting ‘‘a physician, nurse practitioner, clinical 

16 nurse specialist, certified nurse-midwife, or phy17 sician assistant who’’; and 

18 (4) in the fourth sentence, by inserting ‘‘, nurse 

19 practitioner, clinical nurse specialist, certified nurse20 midwife, or physician assistant’’ after ‘‘physician’’. 

21 (b) PART B PROVISIONS.—Section 1835(a) of the So22 cial Security Act (42 U.S.C. 1395n(a)) is amended— 

23 (1) in paragraph (2)— 

24 (A) in the matter preceding subparagraph 

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1 ical nurse specialist (as those terms are defined 

2 in section 1861(aa)(5)) who is working in col3 laboration with a physician in accordance with 

4 State law, a certified nurse-midwife (as defined 

5 in section 1861(gg)) as authorized by State law, 

6 or a physician assistant (as defined in section 

7 1861(aa)(5)) under the supervision of a physi8 cian’’ after ‘‘1866(j)’’; and 

9 (B) in subparagraph (A)— 

10 (i) in each of clauses (ii) and (iii) of 

11 subparagraph (A) by inserting ‘‘, a nurse 

12 practitioner, a clinical nurse specialist, a 

13 certified nurse-midwife, or a physician as14 sistant (as the case may be)’’ after ‘‘physi15 cian’’; and 

16 (ii) in clause (iv), by striking ‘‘after 

17 January 1, 2010’’ and all that follows 

18 through ‘‘face-to-face encounter’’ and in19 serting ‘‘made by a physician after Janu20 ary 1, 2010, or by a nurse practitioner, 

21 clinical nurse specialist, certified nurse22 midwife, or physician assistant (as the case 

23 may be) after January 1, 2012, prior to 

24 making such certification the physician, 

25 nurse practitioner, clinical nurse specialist, 


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1 certified nurse-midwife, or physician assist2 ant must document that the physician, 

3 nurse practitioner, clinical nurse specialist, 

4 certified nurse-midwife, or physician assist5 ant has had a face-to-face encounter’’; 

6 (2) in the third sentence, by inserting ‘‘, nurse 

7 practitioner, clinical nurse specialist, certified nurse8 midwife, or physician assistant (as the case may 

9 be)’’ after ‘‘physician’’; 

10 (3) in the fourth sentence— 

11 (A) by striking ‘‘physician certification’’ 

12 and inserting ‘‘certification’’; 

13 (B) by inserting ‘‘(or on January 1, 2012, 

14 in the case of regulations to implement the 

15 amendments made by section 11 of the Rural 

16 Hospital and Provider Equity and 340B Im17 provement Act of 2012)’’ after ‘‘1981’’; and 

18 (C) by striking ‘‘a physician who’’ and in19 serting ‘‘a physician, nurse practitioner, clinical 

20 nurse specialist, certified nurse-midwife, or phy21 sician assistant who’’; and 

22 (4) in the fifth sentence, by inserting ‘‘, nurse 

23 practitioner, clinical nurse specialist, certified nurse24 midwife, or physician assistant’’ after ‘‘physician’’. 

25 (c) DEFINITION PROVISIONS.— 


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1 (1) HOME HEALTH SERVICES.—Section 

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

3 1395x(m)) is amended— 

4 (A) in the matter preceding paragraph 

5 (1)— 

6 (i) by inserting ‘‘, a nurse practitioner 

7 or a clinical nurse specialist (as those 

8 terms are defined in subsection (aa)(5)), a 

9 certified nurse-midwife (as defined in sec10 tion 1861(gg)), or a physician assistant (as 

11 defined in subsection (aa)(5))’’ after ‘‘phy12 sician’’ the first place it appears; and 

13 (ii) by inserting ‘‘, a nurse practi14 tioner, a clinical nurse specialist, a cer15 tified nurse-midwife, or a physician assist16 ant’’ after ‘‘physician’’ the second place it 

17 appears; and 

18 (B) in paragraph (3), by inserting ‘‘, a 

19 nurse practitioner, a clinical nurse specialist, a 

20 certified nurse-midwife, or a physician assist21 ant’’ after ‘‘physician’’. 

22 (2) HOME HEALTH AGENCY.—Section 

23 1861(o)(2) of the Social Security Act (42 U.S.C. 

24 1395x(o)(2)) is amended— 


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1 (A) by inserting ‘‘, nurse practitioners or 

2 clinical nurse specialists (as those terms are de3 fined in subsection (aa)(5)), certified nurse-mid4 wives (as defined in section 1861(gg)), or physi5 cian assistants (as defined in subsection 

6 (aa)(5))’’ after ‘‘physicians’’; and 

7 (B) by inserting ‘‘, nurse practitioner, clin8 ical nurse specialist, certified nurse-midwife, 

9 physician assistant,’’ after ‘‘physician’’. 

10 (d) HOME HEALTH PROSPECTIVE PAYMENT SYSTEM

11 PROVISIONS.—Section 1895 of the Social Security Act (42 

12 U.S.C. 1395fff) is amended— 

13 (1) in subsection (c)(1), by inserting ‘‘, the 

14 nurse practitioner or clinical nurse specialist (as 

15 those terms are defined in section 1861(aa)(5)), the 

16 certified nurse-midwife (as defined in section 

17 1861(gg)), or the physician assistant (as defined in 

18 section 1861(aa)(5)),’’ after ‘‘physician’’; and 

19 (2) in subsection (e)— 

20 (A) in paragraph (1)(A), by inserting ‘‘, a 

21 nurse practitioner or clinical nurse specialist (as 

22 those terms are defined in section 1861(aa)(5)), 

23 a certified nurse-midwife (as defined in section 

24 1861(gg)), or a physician assistant (as defined 

25 in section 1861(aa)(5))’’ after ‘‘physician’’; and 


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1 (B) in paragraph (2)— 

2 (i) in the heading, by striking ‘‘PHY3 SICIAN CERTIFICATION’’ and inserting 

4 ‘‘RULE OF CONSTRUCTION REGARDING RE5 QUIREMENT FOR CERTIFICATION’’; and 

6 (ii) by striking ‘‘physician’’. 

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

8 this section shall apply to items and services furnished on 

9 or after January 1, 2012. 

10 SEC. 111. RURAL HEALTH CLINIC IMPROVEMENTS. 

11 Section 1833(f) of the Social Security Act (42 U.S.C. 

12 1395l(f)) is amended— 

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

14 end and inserting a semicolon; 

15 (2) in paragraph (2)— 

16 (A) by inserting ‘‘(before 2012)’’ after ‘‘in 

17 a subsequent year’’; and 

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

19 inserting a semicolon; and 

20 (3) by adding at the end the following new 

21 paragraphs: 

22 ‘‘(3) in 2012, at $101 per visit; and 

23 ‘‘(4) in a subsequent year, at the limit estab24 lished under this subsection for the previous year in25 creased by the percentage increase in the MEI (as 


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1 so defined) applicable to primary care services (as so 

2 defined) furnished as of the first day of that year.’’. 

3 SEC. 112. TEMPORARY MEDICARE PAYMENT INCREASE FOR 

4 HOME HEALTH SERVICES FURNISHED IN A 

5 RURAL AREA. 

6 Section 421(a) of the Medicare Prescription Drug, 

7 Improvement, and Modernization Act of 2003 (Public Law 

8 108–173; 117 Stat. 2283), as amended by section 5201(b) 

9 of the Deficit Reduction Act of 2005 (Public Law 109– 

10 171; 120 Stat. 46) and section 3131(c) of the Patient Pro11 tection and Affordable Care Act (Public Law 111–148; 

12 124 Stat. 428), is amended by striking ‘‘2016, 3 percent’’ 

13 and inserting ‘‘2011, and episodes and visits ending on 

14 or after January 1, 2013, and before January 1, 2016, 

15 3 percent’’. 

16 SEC. 113. EXTENSION OF INCREASED MEDICARE PAYMENTS 

17 FOR RURAL GROUND AMBULANCE SERVICES. 

18 (a) IN GENERAL.—Section 1834(l)(13)(A) of the So19 cial Security Act (42 U.S.C. 1395m(l)(13)(A)) is amend20 ed— 

21 (1) in the matter preceding clause (i)— 

22 (A) by striking ‘‘2007, and for’’ and in23 serting ‘‘2007, for’’; and 

24 (B) by inserting ‘‘, and for such services 

25 described in clause (i) furnished on or after 


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1 March 1, 2012, and before January 1, 2013’’ 

2 after ‘‘2012’’; and 

3 (2) in clause (i), by inserting ‘‘, or 5 percent if 

4 such service is furnished on or after March 1, 2012, 

5 and before January 1, 2013’’ after ‘‘2012’’. 

6 (b) SUPER RURAL AMBULANCE.—Section 

7 1834(l)(12)(A) of the Social Security Act (42 U.S.C. 

8 1395m(l)(12)(A)) is amended by striking ‘‘March 1, 

9 2012’’ and inserting ‘‘January 1, 2013’’. 

10 SEC. 114. EXTENSION OF PAYMENT FOR TECHNICAL COM11 PONENT OF CERTAIN PHYSICIAN PATHOL12 OGY SERVICES. 

13 Section 542(c) of the Medicare, Medicaid, and 

14 SCHIP Benefits Improvement and Protection Act of 2000 

15 (as enacted into law by section 1(a)(6) of Public Law 106– 

16 554), as amended by section 732 of the Medicare Prescrip17 tion Drug, Improvement, and Modernization Act of 2003 

18 (42 U.S.C. 1395w–4 note), section 104 of division B of 

19 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 

20 1395w–4 note), section 104 of the Medicare, Medicaid, 

21 and SCHIP Extension Act of 2007 (Public Law 110– 

22 173), section 136 of the Medicare Improvements for Pa23 tients and Providers Act of 2008 (Public Law 110–275), 

24 section 3104 of the Patient Protection and Affordable 

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1 care and Medicaid Extenders Act of 2010 (Public Law 

2 111–309), and section 305 of the Temporary Payroll Tax 

3 Cut Continuation Act of 2011 (Public Law 112–78) is 

4 amended by striking ‘‘the first two months of’’. 

5 SEC. 115. FACILITATING THE PROVISION OF TELEHEALTH 

6 SERVICES ACROSS STATE LINES. 

7 (a) IN GENERAL.—For purposes of expediting the 

8 provision of telehealth services, for which payment is made 

9 under the Medicare program, across State lines, the Sec10 retary of Health and Human Services shall, in consulta11 tion with representatives of States, physicians, health care 

12 practitioners, and patient advocates, encourage and facili13 tate the adoption of provisions allowing for multistate 

14 practitioner practice across State lines. 

15 (b) DEFINITIONS.—In subsection (a): 

16 (1) TELEHEALTH SERVICE.—The term ‘‘tele17 health service’’ has the meaning given that term in 

18 subparagraph (F) of section 1834(m)(4) of the So19 cial Security Act (42 U.S.C. 1395m(m)(4)). 

20 (2) PHYSICIAN, PRACTITIONER.—The terms 

21 ‘‘physician’’ and ‘‘practitioner’’ have the meaning 

22 given those terms in subparagraphs (D) and (E), re23 spectively, of such section. 

24 (3) MEDICARE PROGRAM.—The term ‘‘Medicare 

25 program’’ means the program of health insurance 


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1 administered by the Secretary of Health and Human 

2 Services under title XVIII of the Social Security Act 

3 (42 U.S.C. 1395 et seq.). 

4 SEC. 116. MEDICARE PART A PAYMENT FOR ANESTHESIOL5 OGIST SERVICES IN CERTAIN RURAL HOS6 PITALS BASED ON CRNA PASS-THROUGH 

7 RULES. 

8 (a) IN GENERAL.—Section 1814 of the Social Secu9 rity Act (42 U.S.C. 1395f) is amended by adding at the 

10 end the following new subsection: 

11 ‘‘Anesthesiologist Services Provided in Certain Rural 

12 Hospitals 

13 ‘‘(m)(1) Notwithstanding any other provision of this 

14 title, coverage and payment shall be provided under this 

15 part for physicians’ services that are anesthesia services 

16 furnished by a physician who is an anesthesiologist in a 

17 rural hospital described in paragraph (3) in the same 

18 manner as payment is made under the exception provided 

19 in section 9320(k) of the Omnibus Budget Reconciliation 

20 Act of 1986, as added by section 608(c)(2) of the Family 

21 Support Act of 1988 and amended by section 6132 of the 

22 Omnibus Budget Reconciliation Act of 1989, (relating to 

23 payment on a reasonable cost, pass-through basis) for cer24 tified registered nurse anesthetist services furnished by a 


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1 certified registered nurse anesthetist in a hospital de2 scribed in such section 9320(k). 

3 ‘‘(2) No payment shall be made under any other pro4 vision of this title for physicians’ services for which pay5 ment is made under this subsection. 

6 ‘‘(3) A rural hospital described in this paragraph is 

7 a hospital described in section 9320(k) of the Omnibus 

8 Budget Reconciliation Act of 1986, as so added and 

9 amended, except that— 

10 ‘‘(A) any reference in such section to a ‘cer11 tified registered nurse anesthetist’ or an ‘anesthetist’ 

12 is deemed a reference to a ‘physician who is an anes13 thesiologist’ or an ‘anesthesiologist’, respectively; 

14 and 

15 ‘‘(B) any reference to ‘January 1, 1988’ or 

16 ‘1987’ is deemed a reference to such date and year 

17 as the Secretary shall specify.’’. 

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

19 subsection (a) shall apply to services furnished during cost 

20 reporting periods beginning on or after the date of the 

21 enactment of this Act. 


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1 SEC. 117. TEMPORARY FLOOR ON THE PRACTICE EXPENSE 

2 GEOGRAPHIC INDEX FOR SERVICES FUR3 NISHED IN RURAL AREAS OUTSIDE OF FRON4 TIER STATES UNDER THE MEDICARE PHYSI5 CIAN FEE SCHEDULE. 

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

7 U.S.C. 1395w–4(e)(1)) is amended— 

8 (1) in subparagraph (A), by striking ‘‘and (I)’’ 

9 and inserting ‘‘(I), and (J)’’; and 

10 (2) by adding at the end the following new sub11 paragraph: 

12 ‘‘(J) FLOOR AT 1.0 ON PRACTICE EXPENSE

13 GEOGRAPHIC INDEX FOR SERVICES FURNISHED

14 IN RURAL AREAS OUTSIDE OF FRONTIER

15 STATES.—For purposes of payment for services 

16 furnished in a rural area (other than a rural 

17 area located in a State to which subparagraph 

18 (I) applies) on or after January 1, 2012, and 

19 before January 1, 2013, after calculating the 

20 practice expense index under subparagraph 

21 (A)(i), the Secretary shall increase any such 

22 index to 1.0 if such index would otherwise be 

23 less than 1.0. The preceding sentence shall not 

24 be applied in a budget neutral manner.’’. 


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1 SEC. 118. REVISIONS TO STANDARD FOR DESIGNATION OF 

2 SOLE COMMUNITY HOSPITALS. 

3 Section 1886(d)(5)(D)(iv) of the Social Security Act 

4 (42 U.S.C. 1395ww(d)(5)(D)(iv)) is amended by adding 

5 at the end the following new sentence: ‘‘Under such stand6 ard, the time required for an individual to travel to the 

7 nearest alternative source of care shall be measured over 

8 improved roads maintained by a local, State, or Federal 

9 Government entity for use by the general public which is 

10 the most expeditious and accessible route as designated 

11 by law enforcement for emergency vehicle travel.’’. 

12 SEC. 119. STATE OFFICES OF RURAL HEALTH. 

13 Section 338J(j)(1) of the Public Health Service Act 

14 (42 U.S.C. 254r(j)(1)) is amended by inserting ‘‘and 2012 

15 through 2013’’ before the period. 

16 SEC. 120. ENSURING PROPORTIONAL REPRESENTATION OF 

17 INTERESTS OF RURAL AREAS ON MEDPAC. 

18 (a) IN GENERAL.—Section 1805(c)(2) of the Social 

19 Security Act (42 U.S.C. 1395b–6(c)(2)) is amended— 

20 (1) in subparagraph (A), by inserting ‘‘ (con21 sistent with the requirements of subparagraph (E))’’ 

22 after ‘‘rural representatives’’; and 

23 (2) by adding at the end the following new sub24 paragraph: 

25 ‘‘(E) PROPORTIONAL REPRESENTATION OF

26 INTERESTS OF RURAL AREAS.—In order to proVerDate Mar 15 2010 03:24 May 03, 2012 Jkt 019200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H5194.IH H5194

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1 vide a balance between urban and rural rep2 resentatives under subparagraph (A), the pro3 portion of members who represent the interests 

4 of health care providers and Medicare bene5 ficiaries located in rural areas shall be no less 

6 than the proportion of the total number of 

7 Medicare beneficiaries who reside in rural 

8 areas.’’. 

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

10 subsection (a) shall apply to appointments made to the 

11 Medicare Payment Advisory Commission after the date of 

12 the enactment of this Act. 

13 TITLE II—340B PROGRAM 

14 IMPROVEMENT 

15 SEC. 201. EXTENSION OF DISCOUNTS TO INPATIENT 

16 DRUGS. 

17 (a) IN GENERAL.—Section 340B of the Public 

18 Health Service Act (42 U.S.C. 256b) is amended— 

19 (1) in subsection (a)— 

20 (A) in paragraphs (1), (2), and (5), by 

21 striking ‘‘covered outpatient drug’’ each place 

22 such term appears and inserting ‘‘covered 

23 drug’’; and 

24 (B) in paragraphs (1), (7), and (9), by 

25 striking ‘‘covered outpatient drugs’’ each place 


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1 such term appears and inserting ‘‘covered 

2 drugs’’; 

3 (2) in subsection (b)(2)(B) by striking ‘‘para4 graph (3)(A)’’ and inserting ‘‘paragraph (3)’’; and 

5 (3) in subsection (d), by striking ‘‘covered out6 patient drugs’’ each place such term appears and in7 serting ‘‘covered drugs’’. 

8 (b) MEDICAID CREDITS ON INPATIENT DRUGS.— 

9 Section 340B of the Public Health Service Act (42 U.S.C. 

10 256b) is amended by inserting after subsection (b) the fol11 lowing new subsection: 

12 ‘‘(c) MEDICAID CREDITS ON INPATIENT DRUGS.— 

13 ‘‘(1) IN GENERAL.—For each cost reporting pe14 riod, based on the most recently filed Medicare cost 

15 report under title XVIII of the Social Security Act 

16 and subject to paragraph (5), a hospital described in 

17 subparagraph (L), (M), (N), or (O) of subsection 

18 (a)(4) and enrolled to participate in the drug dis19 count program under this section shall provide to 

20 each State that has a plan for medical assistance 

21 under title XIX of such Act and that makes pay22 ment to such hospital for covered drugs provided to 

23 Medicaid recipients for inpatient use, a credit on the 

24 estimated annual purchases by such hospital of such 

25 covered drugs provided to such Medicaid recipients. 


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1 ‘‘(2) AMOUNT OF CREDIT.— 

2 ‘‘(A) IN GENERAL.—The credit described 

3 in paragraph (1), with respect to a hospital and 

4 cost reporting period described in such para5 graph shall be equal to— 

6 ‘‘(i) the product of— 

7 ‘‘(I) the sum of the annual credit 

8 amounts (described in subparagraph 

9 (B)) calculated under subparagraph 

10 (B)(i) for each dosage form and 

11 strength of each covered drug pur12 chased by the hospital during the cost 

13 reporting period; and 

14 ‘‘(II) the estimated percentage of 

15 the purchases of covered drugs by the 

16 hospital during such period attrib17 utable to Medicaid recipients for inpa18 tient use, as determined in accordance 

19 with subparagraph (D); and 

20 ‘‘(ii) subject to paragraph (3)(D), re21 duced by the amount by which the Med22 icaid inpatient reimbursement (as defined 

23 in subparagraph (E)(ii)) of the hospital for 

24 such period was reduced as a result of par25 ticipation in the drug discount program 


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1 under this section during such period by 

2 the hospital, as determined in accordance 

3 with subparagraph (E). 

4 ‘‘(B) ANNUAL CREDIT AMOUNTS.—For 

5 purposes of subparagraph (A)(i)(I), an annual 

6 credit amount, with respect to a covered drug 

7 purchased by a hospital described in paragraph 

8 (1) during a cost reporting period of the hos9 pital— 

10 ‘‘(i) is equal to the sum of the quar11 terly credit amounts calculated under sub12 paragraph (C)(i), for each of the 4 quar13 ters of the cost reporting period for such 

14 covered drug; and 

15 ‘‘(ii) shall be calculated for each dos16 age form and strength of such covered 

17 drug. 

18 ‘‘(C) QUARTERLY CREDIT AMOUNTS.—For 

19 purposes of subparagraph (B)(ii), a quarterly 

20 credit amount, with respect to a covered drug 

21 purchased by a hospital described in paragraph 

22 (1) during a quarter of the cost reporting pe23 riod of the hospital— 

24 ‘‘(i) is equal to the product of— 


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1 ‘‘(I) the total number of units of 

2 each dosage form and strength of 

3 such covered drug purchased by the 

4 hospital during such quarter; 

5 ‘‘(II) the average manufacturer 

6 price of the covered drug (for the unit 

7 of the dosage form and strength in8 volved) during such quarter; and 

9 ‘‘(III) half of the rebate percent10 age for the covered drug, as defined in 

11 subsection (a)(2); and 

12 ‘‘(ii) shall be calculated for— 

13 ‘‘(I) each dosage form and 

14 strength of the covered drug pur15 chased by the hospital; and 

16 ‘‘(II) each of the 4 quarters of 

17 such cost reporting period. 

18 ‘‘(D) PERCENTAGE OF DRUG PURCHASES

19 ATTRIBUTABLE TO MEDICAID RECIPIENTS FOR

20 IMPATIENT USE.—For purposes of subpara21 graph (A)(i)(II), the estimated percentage of 

22 the drug purchases of the hospital attributable 

23 to Medicaid recipients for inpatient use shall be 

24 equal to the Medicaid inpatient drug charges as 

25 reported on the most recently filed Medicare 


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1 cost report of the hospital, divided by the total 

2 drug charges reported on the cost report. 

3 ‘‘(E) CREDIT OFFSET.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 subparagraph (A)(ii), the amount by which 

6 the Medicaid inpatient reimbursement of a 

7 hospital, with respect to a cost reporting 

8 period, is reduced as a result of the partici9 pation in the drug discount program under 

10 this section by the hospital shall be com11 puted as the difference between— 

12 ‘‘(I) the Medicaid inpatient reim13 bursement that would have otherwise 

14 been payable to the hospital for the 

15 cost reporting period if the hospital 

16 did not participate in such drug dis17 count program; and 

18 ‘‘(II) the actual Medicaid inpa19 tient reimbursement payable to the 

20 hospital for the cost reporting period. 

21 ‘‘(ii) MEDICAID INPATIENT REIM22 BURSEMENT DEFINED.—For purposes of 

23 this subsection, the term ‘Medicaid inpa24 tient reimbursement’ means the total pay25 ments received by the hospital under the 


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1 State plan under title XIX of the Social 

2 Security Act for providing inpatient serv3 ices to Medicaid recipients. 

4 ‘‘(3) REQUIREMENTS.— 

5 ‘‘(A) IN GENERAL.—A hospital shall not be 

6 required to provide a credit under paragraph 

7 (1) to a State unless, not later than 30 days 

8 after receiving the information described in sub9 paragraph (B), the State calculates in accord10 ance with paragraph (2) the amount of the 

11 credit owed by the hospital under paragraph (1) 

12 and provides the hospital with both the amount 

13 of such credit so owed and an explanation of 

14 how the State calculated such credit. 

15 ‘‘(B) HOSPITAL PROVISION OF INFORMA16 TION.—Not later than 30 days after the date of 

17 the filing of the most recently filed Medicare 

18 cost report of a hospital described in paragraph 

19 (1), the hospital shall provide the State involved 

20 with the information described in subpara21 graphs (C)(i)(I) and (D) of paragraph (2). 

22 With respect to each covered drug purchased 

23 during the cost reporting period, the hospital 

24 shall provide the National Drug Code, date of 

25 purchase, and the number of units purchased. 


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1 Submission of such information shall not be re2 quired if a covered drug has not been assigned 

3 a National Drug Code at the time of purchase. 

4 ‘‘(C) ACCESS TO AMP AND REBATE

5 DATA.—The Secretary shall establish a system 

6 for giving States access to the information nec7 essary for them to calculate credits under para8 graph (2), with respect to covered drugs, in9 cluding the average manufacturer price and re10 bate percentage for such covered drugs. 

11 ‘‘(D) CREDIT OFFSET.—Paragraph 

12 (2)(A)(ii) shall be applied, with respect to a 

13 credit owed by a hospital under paragraph (1), 

14 only if, not later than 30 days after filing the 

15 most recent Medicare cost report, the hospital 

16 submits to the State involved— 

17 ‘‘(i) a request for the State to apply 

18 such paragraph and to calculate the 

19 amount described in such paragraph in ac20 cordance with paragraph (2)(E); and 

21 ‘‘(ii) the data needed by the State to 

22 determine the amount of the Medicaid in23 patient reimbursement described in para24 graph (2)(E)(i)(I) for such hospital. 


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1 ‘‘(E) DISPUTES.—A State and hospital de2 scribed in paragraph (1) shall have access to 

3 the same State dispute resolution procedures 

4 and system applicable to Medicaid reimburse5 ment matters under title XIX of the Social Se6 curity Act. 

7 ‘‘(4) PAYMENT DEADLINE.—A hospital shall 

8 provide to a State the credits owed by such hospital 

9 under paragraph (1) not later than 60 days after 

10 the hospital receives the information described in 

11 paragraph (3)(A). 

12 ‘‘(5) OPT OUT.—A hospital shall not be re13 quired to provide a credit under paragraph (1) to a 

14 State if the hospital and State agree to an alter15 native arrangement. 

16 ‘‘(6) OFFSET AGAINST MEDICAL ASSISTANCE.— 

17 Amounts received by a State under this subsection 

18 shall be considered to be a reduction in the amount 

19 expended under the State plan for medical assist20 ance for purposes of section 1903(a)(1) of the Social 

21 Security Act. 

22 ‘‘(7) MEDICAID RECIPIENT DEFINED.—For 

23 purposes of this subsection, the term ‘Medicaid re24 cipient’ means, with respect to a State, an individual 


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1 who receives benefits under the State plan under 

2 title XIX of the Social Security Act.’’. 

3 (c) CONFORMING AMENDMENTS.—Section 1927 of 

4 the Social Security Act (42 U.S.C. 1396r–8) is amended— 

5 (1) in subsection (a)(5)— 

6 (A) in subparagraph (A), by striking ‘‘cov7 ered outpatient drugs’’ and inserting ‘‘covered 

8 drugs (as defined in section 340B(b)(2) of the 

9 Public Health Service Act)’’; and 

10 (B) by striking subparagraphs (D) and 

11 (E); and 

12 (2) in subsection (c)(1)(C)(i)— 

13 (A) by redesignating subclauses (II) 

14 through (VI) as subclauses (III) through (VII), 

15 respectively; and 

16 (B) by inserting after subclause (I) the fol17 lowing: 

18 ‘‘(II) any prices charged for a 

19 covered drug, as defined in section 

20 340B(b)(2) of the Public Health Serv21 ice Act;’’. 


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1 SEC. 202. PROHIBITION AGAINST DUPLICATE DISCOUNTS 

2 FOR PHYSICIAN ADMINISTERED DRUGS. 

3 Section 340B(a)(5)(A) of the Public Health Service 

4 Act (42 U.S.C. 256b) is amended by adding at the end 

5 the following: 

6 ‘‘(iii) PHYSICIAN ADMINISTERED

7 DRUGS.—A hospital described in subpara8 graph (L), (M), (N), or (O) of paragraph 

9 (4) shall not be required under section 

10 1927(a)(7) of the Social Security Act to 

11 report National Drug Code numbers for 

12 drugs administered by a physician (or 

13 under a physician’s supervision) if the 

14 State is precluded from seeking a rebate 

15 on such drugs because such drugs were 

16 purchased at a discount under this section. 

17 Nothing in this clause shall relieve a hos18 pital of its obligation to submit National 

19 Drug Codes in accordance with subsection 

20 (c)(3)(B).’’. 

21 SEC. 203. CONTINUED INCLUSION OF ORPHAN DRUGS IN 

22 DEFINITION OF COVERED OUTPATIENT 

23 DRUGS; TECHNICAL AMENDMENT. 

24 (a) IN GENERAL.—Section 340B of the Public 

25 Health Service Act (42 U.S.C. 256b) is amended by strik26 ing subsection (e). 


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

2 subsection (a) shall apply to drugs purchased on or after 

3 March 30, 2010. 

4 SEC. 204. APPLICATION OF RULES FOR DETERMINING PRO5 VIDER-BASED STATUS FOR CERTAIN ENTI6 TIES. 

7 Notwithstanding any other provision of law, in mak8 ing determinations of provider-based status under title 

9 XVIII of the Social Security Act, the facility or organiza10 tion shall be treated as satisfying any requirements and 

11 standards for geographic location in relation to a hospital 

12 or a critical access hospital if the facility or organization 

13 is described in subparagraph (L), (M), (N), or (O) of sec14 tion 340B(a)(4) of the Public Health Service Act (42 

15 U.S.C. 256b(a)(4)). 

Æ 


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