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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5624 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 5624

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

                              May 8, 2012

Mrs. McMorris Rodgers 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rural Hospital and 
Provider Equity and 340B Improvement Act of 2012''.
    (b) Table of Contents.--The table of contents of 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

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.

              TITLE I--RURAL HOSPITAL AND PROVIDER EQUITY

SEC. 101. SENSE OF THE CONGRESS.

    It is the sense of the Congress that--
            (1) residents of rural and frontier communities should have 
        access to affordable, quality health care;
            (2) rural and frontier communities face unique challenges 
        in health care delivery and financing;
            (3) Federal health policy must reflect the unique needs of 
        residents of rural and frontier communities and such 
        communities in an equitable and sustainable manner; and
            (4) stakeholders should work collectively to identify 
        innovative policies that address the availability, delivery, 
        and affordability of health care services in rural and frontier 
        communities.

SEC. 102. FAIRNESS IN THE MEDICARE DISPROPORTIONATE SHARE HOSPITAL 
              (DSH) ADJUSTMENT FOR RURAL HOSPITALS.

    Section 1886(d)(5)(F)(xiv)(II) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(F)(xiv)(II)) is amended by adding at the end the 
following new sentence: ``The preceding sentence shall not apply to any 
hospital with respect to discharges occurring on or after October 1, 
2011, and before October 1, 2012.''.

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.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ``March 1, 
                2012'' and inserting ``January 1, 2013''; and
                    (B) in the second sentence--
                            (i) by striking ``and 85'' and inserting 
                        ``85''; and
                            (ii) by inserting the following before the 
                        period at the end: ``, and 100 percent with 
                        respect to such services furnished in the last 
                        10 months of 2012''; and
            (2) in subclause (III)--
                    (A) in the first sentence--
                            (i) by striking ``2009, and before March 1, 
                        2012, for which'' and inserting ``2009, and 
                        before January 1, 2013, for which''; and
                            (ii) by striking ``85 percent'' and 
                        inserting ``the applicable percentage (as 
                        determined under the second sentence of 
                        subclause (II) for the year)''; and
                    (B) in the second sentence, by striking ``2010, and 
                before March 1, 2012, the preceding'' and inserting 
                ``2010, and before January 1, 2013, the preceding''.

SEC. 104. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
              PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
            (1) in subparagraph (C)(i), by inserting ``and 2,000 
        discharges, respectively,'' after ``1,600 discharges''; and
            (2) in subparagraph (D)--
                    (A) by striking ``1,600'' and inserting ``the 
                applicable number of''; and
                    (B) by adding at the end the following new 
                sentence: ``For purposes of the preceding sentence, the 
                term `applicable number of discharges' means 1,600 
                discharges with respect to discharges occurring in 
                fiscal year 2011 and 2,000 discharges with respect to 
                discharges occurring in fiscal year 2012''.

SEC. 105. EXTENSION OF MEDICARE WAGE INDEX RECLASSIFICATIONS FOR 
              CERTAIN HOSPITALS.

    (a) Extension of Correction of Mid-Year Reclassification Expiration 
for Certain Hospitals.--
            (1) In general.--In the case of a hospital described in 
        paragraph (2), the Secretary of Health and Human Services shall 
        apply subsection (a) of section 106 of division B of the Tax 
        Relief and Health Care Act of 2006 (42 U.S.C. 1395ww note), as 
        amended by section 117 of the Medicare, Medicaid, and SCHIP 
        Extension Act of 2007 (Public Law 110-173), section 124 of the 
        Medicare Improvements for Patients and Providers Act of 2008 
        (Public Law 110-275), sections 3137(a) and 10317 of the Patient 
        Protection and Affordable Care Act (Public Law 111-148), and 
        section 102 of the Medicare and Medicaid Extenders Act of 2010 
        (Public Law 111-309), by substituting ``September 30, 2012'' 
        for ``November 30, 2011''.
            (2) Hospital described.--A hospital described in this 
        paragraph is--
                    (A) a hospital--
                            (i) that is described in subsection (a) of 
                        such section 106; and
                            (ii)(I) that is located in a rural area; 
                        and
                            (II) for which the Secretary of Health and 
                        Human Services has determined the extension 
                        under this subsection to be appropriate; or
                    (B) a sole community hospital located in a State 
                with less than 10 people per square mile that was 
                provided with a special exception reclassification 
                extension under section 117(a)(2) of the Medicare, 
                Medicaid, and SCHIP Extension Act of 2007 (Public Law 
                110-173).
    (b) Not Budget Neutral.--The provisions of this section shall not 
be effected in a budget-neutral manner.

SEC. 106. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN 
              CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO 
              HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

    Section 416(b) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (42 U.S.C. 1395l-4), as amended by section 
105 of division B of the Tax Relief and Health Care Act of 2006 (42 
U.S.C. 1395l note), section 107 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (42 U.S.C. 1395l note), section 3122 of the 
Patient Protection and Affordable Care Act (Public Law 111-148), and 
section 109 of the Medicare and Medicaid Extenders Act of 2010 (Public 
Law 111-309), is amended by striking ``the 2-year period beginning on 
July 1, 2010'' and inserting ``the 30-month period beginning on July 1, 
2010''.

SEC. 107. ELIMINATION OF ISOLATION TEST FOR COST-BASED AMBULANCE 
              REIMBURSEMENT FOR CRITICAL ACCESS HOSPITALS.

    (a) In General.--Section 1834(l)(8) of the Social Security Act (42 
U.S.C. 1395m(l)(8)) is amended--
            (1) in subparagraph (B)--
                    (A) by striking ``owned and''; and
                    (B) by inserting ``(including when such services 
                are provided by the entity under an arrangement with 
                the hospital)'' after ``hospital''; and
            (2) by striking the comma at the end of subparagraph (B) 
        and all that follows and inserting a period.
    (b) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2012.

SEC. 108. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM FOR PHYSICIAN 
              SCARCITY AREAS.

    Section 1833(u)(1) of the Social Security Act (42 U.S.C. 
1395l(u)(1)) is amended by inserting ``, and such services furnished on 
or after January 1, 2012, and before January 1, 2013'' after ``2008''.

SEC. 109. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT.

    Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)) is amended by striking ``before March 1, 2012'' and 
inserting ``before January 1, 2013''.

SEC. 110. IMPROVING CARE PLANNING FOR MEDICARE HOME HEALTH SERVICES.

    (a) Part A Provisions.--Section 1814(a) of the Social Security Act 
(42 U.S.C. 1395f(a)) is amended--
            (1) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, a nurse practitioner or clinical nurse 
                specialist who is working in collaboration with a 
                physician in accordance with State law, a certified 
                nurse-midwife (as defined in section 1861(gg)) as 
                authorized by State law, or a physician assistant (as 
                defined in section 1861(aa)(5)) under the supervision 
                of a physician'' after ``1866(j)''; and
                    (B) in subparagraph (C)--
                            (i) by inserting ``, a nurse practitioner, 
                        a clinical nurse specialist, a certified nurse-
                        midwife, or a physician assistant (as the case 
                        may be)'' after ``physician'' the first 2 times 
                        it appears; and
                            (ii) by striking ``, and, in the case of a 
                        certification made by a physician'' and all 
                        that follows through ``face-to-face encounter'' 
                        and inserting ``, and, in the case of a 
                        certification made by a physician after January 
                        1, 2010, or by a nurse practitioner, clinical 
                        nurse specialist, certified nurse-midwife, or 
                        physician assistant (as the case may be) after 
                        January 1, 2012, prior to making such 
                        certification the physician, nurse 
                        practitioner, clinical nurse specialist, 
                        certified nurse-midwife, or physician assistant 
                        must document that the physician, nurse 
                        practitioner, clinical nurse specialist, 
                        certified nurse-midwife, or physician assistant 
                        has had a face-to-face encounter'';
            (2) in the second sentence, by inserting ``certified nurse-
        midwife,'' after ``clinical nurse specialist,'';
            (3) in the third sentence--
                    (A) by striking ``physician certification'' and 
                inserting ``certification'';
                    (B) by inserting ``(or on January 1, 2012, in the 
                case of regulations to implement the amendments made by 
                section 11 of the Rural Hospital and Provider Equity 
                and 340B Improvement Act of 2012)'' after ``1981''; and
                    (C) by striking ``a physician who'' and inserting 
                ``a physician, nurse practitioner, clinical nurse 
                specialist, certified nurse-midwife, or physician 
                assistant who''; and
            (4) in the fourth sentence, by inserting ``, nurse 
        practitioner, clinical nurse specialist, certified nurse-
        midwife, or physician assistant'' after ``physician''.
    (b) Part B Provisions.--Section 1835(a) of the Social Security Act 
(42 U.S.C. 1395n(a)) is amended--
            (1) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, a nurse practitioner or clinical nurse 
                specialist (as those terms are defined in section 
                1861(aa)(5)) who is working in collaboration with a 
                physician in accordance with State law, a certified 
                nurse-midwife (as defined in section 1861(gg)) as 
                authorized by State law, or a physician assistant (as 
                defined in section 1861(aa)(5)) under the supervision 
                of a physician'' after ``1866(j)''; and
                    (B) in subparagraph (A)--
                            (i) in each of clauses (ii) and (iii) of 
                        subparagraph (A) by inserting ``, a nurse 
                        practitioner, a clinical nurse specialist, a 
                        certified nurse-midwife, or a physician 
                        assistant (as the case may be)'' after 
                        ``physician''; and
                            (ii) in clause (iv), by striking ``after 
                        January 1, 2010'' and all that follows through 
                        ``face-to-face encounter'' and inserting ``made 
                        by a physician after January 1, 2010, or by a 
                        nurse practitioner, clinical nurse specialist, 
                        certified nurse-midwife, or physician assistant 
                        (as the case may be) after January 1, 2012, 
                        prior to making such certification the 
                        physician, nurse practitioner, clinical nurse 
                        specialist, certified nurse-midwife, or 
                        physician assistant must document that the 
                        physician, nurse practitioner, clinical nurse 
                        specialist, certified nurse-midwife, or 
                        physician assistant has had a face-to-face 
                        encounter'';
            (2) in the third sentence, by inserting ``, nurse 
        practitioner, clinical nurse specialist, certified nurse-
        midwife, or physician assistant (as the case may be)'' after 
        ``physician'';
            (3) in the fourth sentence--
                    (A) by striking ``physician certification'' and 
                inserting ``certification'';
                    (B) by inserting ``(or on January 1, 2012, in the 
                case of regulations to implement the amendments made by 
                section 11 of the Rural Hospital and Provider Equity 
                and 340B Improvement Act of 2012)'' after ``1981''; and
                    (C) by striking ``a physician who'' and inserting 
                ``a physician, nurse practitioner, clinical nurse 
                specialist, certified nurse-midwife, or physician 
                assistant who''; and
            (4) in the fifth sentence, by inserting ``, nurse 
        practitioner, clinical nurse specialist, certified nurse-
        midwife, or physician assistant'' after ``physician''.
    (c) Definition Provisions.--
            (1) Home health services.--Section 1861(m) of the Social 
        Security Act (42 U.S.C. 1395x(m)) is amended--
                    (A) in the matter preceding paragraph (1)--
                            (i) by inserting ``, a nurse practitioner 
                        or a clinical nurse specialist (as those terms 
                        are defined in subsection (aa)(5)), a certified 
                        nurse-midwife (as defined in section 1861(gg)), 
                        or a physician assistant (as defined in 
                        subsection (aa)(5))'' after ``physician'' the 
                        first place it appears; and
                            (ii) by inserting ``, a nurse practitioner, 
                        a clinical nurse specialist, a certified nurse-
                        midwife, or a physician assistant'' after 
                        ``physician'' the second place it appears; and
                    (B) in paragraph (3), by inserting ``, a nurse 
                practitioner, a clinical nurse specialist, a certified 
                nurse-midwife, or a physician assistant'' after 
                ``physician''.
            (2) Home health agency.--Section 1861(o)(2) of the Social 
        Security Act (42 U.S.C. 1395x(o)(2)) is amended--
                    (A) by inserting ``, nurse practitioners or 
                clinical nurse specialists (as those terms are defined 
                in subsection (aa)(5)), certified nurse-midwives (as 
                defined in section 1861(gg)), or physician assistants 
                (as defined in subsection (aa)(5))'' after 
                ``physicians''; and
                    (B) by inserting ``, nurse practitioner, clinical 
                nurse specialist, certified nurse-midwife, physician 
                assistant,'' after ``physician''.
    (d) Home Health Prospective Payment System Provisions.--Section 
1895 of the Social Security Act (42 U.S.C. 1395fff) is amended--
            (1) in subsection (c)(1), by inserting ``, the nurse 
        practitioner or clinical nurse specialist (as those terms are 
        defined in section 1861(aa)(5)), the certified nurse-midwife 
        (as defined in section 1861(gg)), or the physician assistant 
        (as defined in section 1861(aa)(5)),'' after ``physician''; and
            (2) in subsection (e)--
                    (A) in paragraph (1)(A), by inserting ``, a nurse 
                practitioner or clinical nurse specialist (as those 
                terms are defined in section 1861(aa)(5)), a certified 
                nurse-midwife (as defined in section 1861(gg)), or a 
                physician assistant (as defined in section 
                1861(aa)(5))'' after ``physician''; and
                    (B) in paragraph (2)--
                            (i) in the heading, by striking ``Physician 
                        certification'' and inserting ``Rule of 
                        construction regarding requirement for 
                        certification''; and
                            (ii) by striking ``physician''.
    (e) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2012.

SEC. 111. RURAL HEALTH CLINIC IMPROVEMENTS.

    Section 1833(f) of the Social Security Act (42 U.S.C. 1395l(f)) is 
amended--
            (1) in paragraph (1), by striking ``, and'' at the end and 
        inserting a semicolon;
            (2) in paragraph (2)--
                    (A) by inserting ``(before 2012)'' after ``in a 
                subsequent year''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(3) in 2012, at $101 per visit; and
            ``(4) in a subsequent year, at the limit established under 
        this subsection for the previous year increased by the 
        percentage increase in the MEI (as so defined) applicable to 
        primary care services (as so defined) furnished as of the first 
        day of that year.''.

SEC. 112. TEMPORARY MEDICARE PAYMENT INCREASE FOR HOME HEALTH SERVICES 
              FURNISHED IN A RURAL AREA.

    Section 421(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283), as 
amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public 
Law 109-171; 120 Stat. 46) and section 3131(c) of the Patient 
Protection and Affordable Care Act (Public Law 111-148; 124 Stat. 428), 
is amended by striking ``2016, 3 percent'' and inserting ``2011, and 
episodes and visits ending on or after January 1, 2013, and before 
January 1, 2016, 3 percent''.

SEC. 113. EXTENSION OF INCREASED MEDICARE PAYMENTS FOR RURAL GROUND 
              AMBULANCE SERVICES.

    (a) In General.--Section 1834(l)(13)(A) of the Social Security Act 
(42 U.S.C. 1395m(l)(13)(A)) is amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``2007, and for'' and inserting 
                ``2007, for''; and
                    (B) by inserting ``, and for such services 
                described in clause (i) furnished on or after March 1, 
                2012, and before January 1, 2013'' after ``2012''; and
            (2) in clause (i), by inserting ``, or 5 percent if such 
        service is furnished on or after March 1, 2012, and before 
        January 1, 2013'' after ``2012''.
    (b) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking ``March 
1, 2012'' and inserting ``January 1, 2013''.

SEC. 114. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
              PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), section 136 of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275), section 3104 of the Patient 
Protection and Affordable Care Act (Public Law 111-148), section 105 of 
the Medicare and Medicaid Extenders Act of 2010 (Public Law 111-309), 
and section 305 of the Temporary Payroll Tax Cut Continuation Act of 
2011 (Public Law 112-78) is amended by striking ``the first two months 
of''.

SEC. 115. FACILITATING THE PROVISION OF TELEHEALTH SERVICES ACROSS 
              STATE LINES.

    (a) In General.--For purposes of expediting the provision of 
telehealth services, for which payment is made under the Medicare 
program, across State lines, the Secretary of Health and Human Services 
shall, in consultation with representatives of States, physicians, 
health care practitioners, and patient advocates, encourage and 
facilitate the adoption of provisions allowing for multistate 
practitioner practice across State lines.
    (b) Definitions.--In subsection (a):
            (1) Telehealth service.--The term ``telehealth service'' 
        has the meaning given that term in subparagraph (F) of section 
        1834(m)(4) of the Social Security Act (42 U.S.C. 1395m(m)(4)).
            (2) Physician, practitioner.--The terms ``physician'' and 
        ``practitioner'' have the meaning given those terms in 
        subparagraphs (D) and (E), respectively, of such section.
            (3) Medicare program.--The term ``Medicare program'' means 
        the program of health insurance administered by the Secretary 
        of Health and Human Services under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).

SEC. 116. MEDICARE PART A PAYMENT FOR ANESTHESIOLOGIST SERVICES IN 
              CERTAIN RURAL HOSPITALS BASED ON CRNA PASS-THROUGH RULES.

    (a) In General.--Section 1814 of the Social Security Act (42 U.S.C. 
1395f) is amended by adding at the end the following new subsection:

    ``Anesthesiologist Services Provided in Certain Rural Hospitals

    ``(m)(1) Notwithstanding any other provision of this title, 
coverage and payment shall be provided under this part for physicians' 
services that are anesthesia services furnished by a physician who is 
an anesthesiologist in a rural hospital described in paragraph (3) in 
the same manner as payment is made under the exception provided in 
section 9320(k) of the Omnibus Budget Reconciliation Act of 1986, as 
added by section 608(c)(2) of the Family Support Act of 1988 and 
amended by section 6132 of the Omnibus Budget Reconciliation Act of 
1989, (relating to payment on a reasonable cost, pass-through basis) 
for certified registered nurse anesthetist services furnished by a 
certified registered nurse anesthetist in a hospital described in such 
section 9320(k).
    ``(2) No payment shall be made under any other provision of this 
title for physicians' services for which payment is made under this 
subsection.
    ``(3) A rural hospital described in this paragraph is a hospital 
described in section 9320(k) of the Omnibus Budget Reconciliation Act 
of 1986, as so added and amended, except that--
            ``(A) any reference in such section to a `certified 
        registered nurse anesthetist' or an `anesthetist' is deemed a 
        reference to a `physician who is an anesthesiologist' or an 
        `anesthesiologist', respectively; and
            ``(B) any reference to `January 1, 1988' or `1987' is 
        deemed a reference to such date and year as the Secretary shall 
        specify.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished during cost reporting periods beginning on 
or after the date of the enactment of this Act.

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.

    Section 1848(e)(1) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``and (I)'' and 
        inserting ``(I), and (J)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(J) Floor at 1.0 on practice expense geographic 
                index for services furnished in rural areas outside of 
                frontier states.--For purposes of payment for services 
                furnished in a rural area (other than a rural area 
                located in a State to which subparagraph (I) applies) 
                on or after January 1, 2012, and before January 1, 
                2013, after calculating the practice expense index 
                under subparagraph (A)(i), the Secretary shall increase 
                any such index to 1.0 if such index would otherwise be 
                less than 1.0. The preceding sentence shall not be 
                applied in a budget neutral manner.''.

SEC. 118. REVISIONS TO STANDARD FOR DESIGNATION OF SOLE COMMUNITY 
              HOSPITALS.

    Section 1886(d)(5)(D)(iv) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(D)(iv)) is amended by adding at the end the following new 
sentence: ``Under such standard, the time required for an individual to 
travel to the nearest alternative source of care shall be measured over 
improved roads maintained by a local, State, or Federal Government 
entity for use by the general public which is the most expeditious and 
accessible route as designated by law enforcement for emergency vehicle 
travel.''.

SEC. 119. STATE OFFICES OF RURAL HEALTH.

    Section 338J(j)(1) of the Public Health Service Act (42 U.S.C. 
254r(j)(1)) is amended by inserting ``and 2012 through 2013'' before 
the period.

SEC. 120. ENSURING PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL 
              AREAS ON MEDPAC.

    (a) In General.--Section 1805(c)(2) of the Social Security Act (42 
U.S.C. 1395b-6(c)(2)) is amended--
            (1) in subparagraph (A), by inserting ``(consistent with 
        the requirements of subparagraph (E))'' after ``rural 
        representatives''; and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Proportional representation of interests of 
                rural areas.--In order to provide a balance between 
                urban and rural representatives under subparagraph (A), 
                the proportion of members who represent the interests 
                of health care providers and Medicare beneficiaries 
                located in rural areas shall be no less than the 
                proportion of the total number of Medicare 
                beneficiaries who reside in rural areas.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to appointments made to the Medicare Payment Advisory Commission 
after the date of the enactment of this Act.

                   TITLE II--340B PROGRAM IMPROVEMENT

SEC. 201. EXTENSION OF DISCOUNTS TO INPATIENT DRUGS.

    (a) In General.--Section 340B of the Public Health Service Act (42 
U.S.C. 256b) is amended--
            (1) in subsection (a)--
                    (A) in paragraphs (1), (2), and (5), by striking 
                ``covered outpatient drug'' each place such term 
                appears and inserting ``covered drug''; and
                    (B) in paragraphs (1), (7), and (9), by striking 
                ``covered outpatient drugs'' each place such term 
                appears and inserting ``covered drugs'';
            (2) in subsection (b)(2)(B) by striking ``paragraph 
        (3)(A)'' and inserting ``paragraph (3)''; and
            (3) in subsection (d), by striking ``covered outpatient 
        drugs'' each place such term appears and inserting ``covered 
        drugs''.
    (b) Medicaid Credits on Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended by inserting 
after subsection (b) the following new subsection:
    ``(c) Medicaid Credits on Inpatient Drugs.--
            ``(1) In general.--For each cost reporting period, based on 
        the most recently filed Medicare cost report under title XVIII 
        of the Social Security Act and subject to paragraph (5), a 
        hospital described in subparagraph (L), (M), (N), or (O) of 
        subsection (a)(4) and enrolled to participate in the drug 
        discount program under this section shall provide to each State 
        that has a plan for medical assistance under title XIX of such 
        Act and that makes payment to such hospital for covered drugs 
        provided to Medicaid recipients for inpatient use, a credit on 
        the estimated annual purchases by such hospital of such covered 
        drugs provided to such Medicaid recipients.
            ``(2) Amount of credit.--
                    ``(A) In general.--The credit described in 
                paragraph (1), with respect to a hospital and cost 
                reporting period described in such paragraph shall be 
                equal to--
                            ``(i) the product of--
                                    ``(I) the sum of the annual credit 
                                amounts (described in subparagraph (B)) 
                                calculated under subparagraph (B)(i) 
                                for each dosage form and strength of 
                                each covered drug purchased by the 
                                hospital during the cost reporting 
                                period; and
                                    ``(II) the estimated percentage of 
                                the purchases of covered drugs by the 
                                hospital during such period 
                                attributable to Medicaid recipients for 
                                inpatient use, as determined in 
                                accordance with subparagraph (D); and
                            ``(ii) subject to paragraph (3)(D), reduced 
                        by the amount by which the Medicaid inpatient 
                        reimbursement (as defined in subparagraph 
                        (E)(ii)) of the hospital for such period was 
                        reduced as a result of participation in the 
                        drug discount program under this section during 
                        such period by the hospital, as determined in 
                        accordance with subparagraph (E).
                    ``(B) Annual credit amounts.--For purposes of 
                subparagraph (A)(i)(I), an annual credit amount, with 
                respect to a covered drug purchased by a hospital 
                described in paragraph (1) during a cost reporting 
                period of the hospital--
                            ``(i) is equal to the sum of the quarterly 
                        credit amounts calculated under subparagraph 
                        (C)(i), for each of the 4 quarters of the cost 
                        reporting period for such covered drug; and
                            ``(ii) shall be calculated for each dosage 
                        form and strength of such covered drug.
                    ``(C) Quarterly credit amounts.--For purposes of 
                subparagraph (B)(ii), a quarterly credit amount, with 
                respect to a covered drug purchased by a hospital 
                described in paragraph (1) during a quarter of the cost 
                reporting period of the hospital--
                            ``(i) is equal to the product of--
                                    ``(I) the total number of units of 
                                each dosage form and strength of such 
                                covered drug purchased by the hospital 
                                during such quarter;
                                    ``(II) the average manufacturer 
                                price of the covered drug (for the unit 
                                of the dosage form and strength 
                                involved) during such quarter; and
                                    ``(III) half of the rebate 
                                percentage for the covered drug, as 
                                defined in subsection (a)(2); and
                            ``(ii) shall be calculated for--
                                    ``(I) each dosage form and strength 
                                of the covered drug purchased by the 
                                hospital; and
                                    ``(II) each of the 4 quarters of 
                                such cost reporting period.
                    ``(D) Percentage of drug purchases attributable to 
                medicaid recipients for impatient use.--For purposes of 
                subparagraph (A)(i)(II), the estimated percentage of 
                the drug purchases of the hospital attributable to 
                Medicaid recipients for inpatient use shall be equal to 
                the Medicaid inpatient drug charges as reported on the 
                most recently filed Medicare cost report of the 
                hospital, divided by the total drug charges reported on 
                the cost report.
                    ``(E) Credit offset.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(ii), the amount by which the 
                        Medicaid inpatient reimbursement of a hospital, 
                        with respect to a cost reporting period, is 
                        reduced as a result of the participation in the 
                        drug discount program under this section by the 
                        hospital shall be computed as the difference 
                        between--
                                    ``(I) the Medicaid inpatient 
                                reimbursement that would have otherwise 
                                been payable to the hospital for the 
                                cost reporting period if the hospital 
                                did not participate in such drug 
                                discount program; and
                                    ``(II) the actual Medicaid 
                                inpatient reimbursement payable to the 
                                hospital for the cost reporting period.
                            ``(ii) Medicaid inpatient reimbursement 
                        defined.--For purposes of this subsection, the 
                        term `Medicaid inpatient reimbursement' means 
                        the total payments received by the hospital 
                        under the State plan under title XIX of the 
                        Social Security Act for providing inpatient 
                        services to Medicaid recipients.
            ``(3) Requirements.--
                    ``(A) In general.--A hospital shall not be required 
                to provide a credit under paragraph (1) to a State 
                unless, not later than 30 days after receiving the 
                information described in subparagraph (B), the State 
                calculates in accordance with paragraph (2) the amount 
                of the credit owed by the hospital under paragraph (1) 
                and provides the hospital with both the amount of such 
                credit so owed and an explanation of how the State 
                calculated such credit.
                    ``(B) Hospital provision of information.--Not later 
                than 30 days after the date of the filing of the most 
                recently filed Medicare cost report of a hospital 
                described in paragraph (1), the hospital shall provide 
                the State involved with the information described in 
                subparagraphs (C)(i)(I) and (D) of paragraph (2). With 
                respect to each covered drug purchased during the cost 
                reporting period, the hospital shall provide the 
                National Drug Code, date of purchase, and the number of 
                units purchased. Submission of such information shall 
                not be required if a covered drug has not been assigned 
                a National Drug Code at the time of purchase.
                    ``(C) Access to amp and rebate data.--The Secretary 
                shall establish a system for giving States access to 
                the information necessary for them to calculate credits 
                under paragraph (2), with respect to covered drugs, 
                including the average manufacturer price and rebate 
                percentage for such covered drugs.
                    ``(D) Credit offset.--Paragraph (2)(A)(ii) shall be 
                applied, with respect to a credit owed by a hospital 
                under paragraph (1), only if, not later than 30 days 
                after filing the most recent Medicare cost report, the 
                hospital submits to the State involved--
                            ``(i) a request for the State to apply such 
                        paragraph and to calculate the amount described 
                        in such paragraph in accordance with paragraph 
                        (2)(E); and
                            ``(ii) the data needed by the State to 
                        determine the amount of the Medicaid inpatient 
                        reimbursement described in paragraph 
                        (2)(E)(i)(I) for such hospital.
                    ``(E) Disputes.--A State and hospital described in 
                paragraph (1) shall have access to the same State 
                dispute resolution procedures and system applicable to 
                Medicaid reimbursement matters under title XIX of the 
                Social Security Act.
            ``(4) Payment deadline.--A hospital shall provide to a 
        State the credits owed by such hospital under paragraph (1) not 
        later than 60 days after the hospital receives the information 
        described in paragraph (3)(A).
            ``(5) Opt out.--A hospital shall not be required to provide 
        a credit under paragraph (1) to a State if the hospital and 
        State agree to an alternative arrangement.
            ``(6) Offset against medical assistance.--Amounts received 
        by a State under this subsection shall be considered to be a 
        reduction in the amount expended under the State plan for 
        medical assistance for purposes of section 1903(a)(1) of the 
        Social Security Act.
            ``(7) Medicaid recipient defined.--For purposes of this 
        subsection, the term `Medicaid recipient' means, with respect 
        to a State, an individual who receives benefits under the State 
        plan under title XIX of the Social Security Act.''.
    (c) Conforming Amendments.--Section 1927 of the Social Security Act 
(42 U.S.C. 1396r-8) is amended--
            (1) in subsection (a)(5)--
                    (A) in subparagraph (A), by striking ``covered 
                outpatient drugs'' and inserting ``covered drugs (as 
                defined in section 340B(b)(2) of the Public Health 
                Service Act)''; and
                    (B) by striking subparagraphs (D) and (E); and
            (2) in subsection (c)(1)(C)(i)--
                    (A) by redesignating subclauses (II) through (VI) 
                as subclauses (III) through (VII), respectively; and
                    (B) by inserting after subclause (I) the following:
                                    ``(II) any prices charged for a 
                                covered drug, as defined in section 
                                340B(b)(2) of the Public Health Service 
                                Act;''.

SEC. 202. PROHIBITION AGAINST DUPLICATE DISCOUNTS FOR PHYSICIAN 
              ADMINISTERED DRUGS.

    Section 340B(a)(5)(A) of the Public Health Service Act (42 U.S.C. 
256b) is amended by adding at the end the following:
                            ``(iii) Physician administered drugs.--A 
                        hospital described in subparagraph (L), (M), 
                        (N), or (O) of paragraph (4) shall not be 
                        required under section 1927(a)(7) of the Social 
                        Security Act to report National Drug Code 
                        numbers for drugs administered by a physician 
                        (or under a physician's supervision) if the 
                        State is precluded from seeking a rebate on 
                        such drugs because such drugs were purchased at 
                        a discount under this section. Nothing in this 
                        clause shall relieve a hospital of its 
                        obligation to submit National Drug Codes in 
                        accordance with subsection (c)(3)(B).''.

SEC. 203. CONTINUED INCLUSION OF ORPHAN DRUGS IN DEFINITION OF COVERED 
              OUTPATIENT DRUGS; TECHNICAL AMENDMENT.

    (a) In General.--Section 340B of the Public Health Service Act (42 
U.S.C. 256b) is amended by striking subsection (e).
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs purchased on or after March 30, 2010.

SEC. 204. APPLICATION OF RULES FOR DETERMINING PROVIDER-BASED STATUS 
              FOR CERTAIN ENTITIES.

    Notwithstanding any other provision of law, in making 
determinations of provider-based status under title XVIII of the Social 
Security Act, the facility or organization shall be treated as 
satisfying any requirements and standards for geographic location in 
relation to a hospital or a critical access hospital if the facility or 
organization is described in subparagraph (L), (M), (N), or (O) of 
section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 
256b(a)(4)).
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