I 

114TH CONGRESS 

1ST SESSION H. R. 3225 

To amend titles XVIII and XIX of the Social Security Act to provide for 

enhanced payments to rural health care providers under the Medicare 

and Medicaid programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2015 

Mr. GRAVES of Missouri (for himself and Mr. LOEBSACK) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and the 

Budget, 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 titles XVIII and XIX of the Social Security Act 

to provide for enhanced payments to rural health care 

providers under the Medicare and Medicaid programs, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Save Rural Hospitals Act’’. 

6 (b) FINDINGS.—Congress finds the following: 


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1 (1) More than 60,000,000 individuals in rural 

2 areas of the United States rely on rural hospitals 

3 and other providers as critical access points to 

4 health care. 

5 (2) Access to health care is essential to commu6 nities that Americans living in rural areas call home. 

7 (3) Americans living in rural areas are older, 

8 poorer, and sicker than Americans living in urban 

9 areas. 

10 (4) From January 2010 until July 8, 2015, 55 

11 rural hospitals have closed in the United States, ac12 cording to the University of North Carolina’s Cecil 

13 G. Sheps Center for Health Services Research, and 

14 the rate of these closures is increasing. 

15 (5) Two hundred and eighty-three hospitals are 

16 at risk of closing, according to iVantage’s Hospital 

17 Strength INDEX study, and such closings would 

18 mean that 700,000 patients would be left without 

19 local access to care, 50,000 community jobs would 

20 be lost, 36,000 healthcare jobs would be lost, and 

21 $10,600,000,000 would be lost from the gross do22 mestic product. 

23 (6) Rural Medicare beneficiaries already face a 

24 number of challenges when trying to access health 

25 care services close to home, including the weather, 


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1 geography, and cultural, social, and language bar2 riers. 

3 (7) Seventy-seven percent of rural counties in 

4 the United States are designated as primary care 

5 health professional shortage areas while 9 percent 

6 have no physicians at all. 

7 (8) Seniors living in rural areas are forced to 

8 travel significant distances for care. 

9 (9) On average, trauma victims in rural areas 

10 must travel twice as far as victims in urban areas 

11 to the closest hospital, and, as a result, 60 percent 

12 of trauma deaths occur in rural areas, even though 

13 only 20 percent of Americans live in rural areas. 

14 (10) With the 283 hospitals on the brink of clo15 sure, 700,000 Americans living in rural areas are on 

16 the brink of losing access to the closest emergency 

17 room. 

18 (c) TABLE OF CONTENTS.—The table of contents of 

19 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—RURAL PROVIDER PAYMENT STABILIZATION 

Subtitle A—Rural Hospitals 

Sec. 101. Eliminating Medicare sequestration for rural hospitals. 

Sec. 102. Reversing cuts to reimbursement of bad debt for critical access hospitals (CAHs) and rural hospitals. 

Sec. 103. Extending payment levels for low-volume hospitals and Medicare-dependent hospitals (MDHs). 

Sec. 104. Reinstating revised diagnosis-related group payments for MDHs and 

sole community hospitals (SCHs). 


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Sec. 105. Reinstating hold harmless treatment for hospital outpatient services 

for SCHs. 

Sec. 106. Delaying application of penalties for failure to be a meaningful electronic health record user. 

Sec. 107. Eliminating rural Medicare and Medicaid disproportionate share hospital payment reductions. 

Subtitle B—Other Rural Providers 

Sec. 111. Making permanent increased Medicare payments for ground ambulance services in rural areas. 

Sec. 112. Extending Medicaid primary care payments. 

TITLE II—RURAL MEDICARE BENEFICIARY EQUITY 

Sec. 201. Equalizing beneficiary copayments for services furnished by CAHs. 

TITLE III—REGULATORY RELIEF 

Sec. 301. Eliminating 96-hour physician certification requirement with respect 

to inpatient CAH services. 

Sec. 302. Rebasing supervision requirements. 

Sec. 303. Reforming practices of recovery audit contractors under Medicare. 

TITLE IV—FUTURE OF RURAL HEALTH CARE 

Sec. 401. Community outpatient hospital program. 

Sec. 402. Grant funding to assist rural hospitals. 

Sec. 403. CMMI demonstration of shared savings in rural hospitals. 

1 TITLE I—RURAL PROVIDER 

2 PAYMENT STABILIZATION 

3 Subtitle A—Rural Hospitals 

4 SEC. 101. ELIMINATING MEDICARE SEQUESTRATION FOR 

5 RURAL HOSPITALS. 

6 (a) IN GENERAL.—Section 256(d)(7) of the Balanced 

7 Budget and Emergency Deficit Control Act of 1985 (2 

8 U.S.C. 906(d)(7)) is amended by adding at the end the 

9 following: 

10 ‘‘(D) RURAL HOSPITALS.—Payments 

11 under part A or part B of title XVIII of the So12 cial Security Act with respect to items and serv13 ices furnished by a critical access hospital (as 


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1 defined in section 1861(mm)(1) of such Act), a 

2 sole community hospital (as defined in section 

3 1886(d)(5)(D)(iii) of such Act), a medicare-de4 pendent small rural hospital (as defined in sec5 tion 1886(d)(5)(G)(iv) of such Act), or a sub6 section (d) hospital located in a rural area (as 

7 defined in section 1886(d)(2)(D) of such Act).’’. 

8 (b) APPLICABILITY.—The amendment made by this 

9 section applies with respect to orders of sequestration ef10 fective on or after the date that is 60 days after the date 

11 of the enactment of this Act. 

12 SEC. 102. REVERSING CUTS TO REIMBURSEMENT OF BAD 

13 DEBT FOR CRITICAL ACCESS HOSPITALS 

14 (CAHS) AND RURAL HOSPITALS. 

15 (a) RURAL HOSPITALS.—Section 1861(v)(1)(T)(v) of 

16 the Social Security Act (42 U.S.C. 1395x(v)(1)(T)(v)) is 

17 amended by inserting before the period the following: ‘‘or, 

18 in the case of a hospital located in a rural area, by 30 

19 percent of such amount otherwise allowable’’. 

20 (b) CAHS.—Section 1861(v)(1)(W)(ii) of the Social 

21 Security Act (42 U.S.C. 1395x(v)(1)(W)(ii)) is amended 

22 by inserting after ‘‘or (V)’’ the following: ‘‘, a critical ac23 cess hospital’’. 

24 (c) APPLICABILITY.—The amendments made by this 

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1 ning more than 60 days after the date of the enactment 

2 of this Act. 

3 SEC. 103. EXTENDING PAYMENT LEVELS FOR LOW-VOLUME 

4 HOSPITALS AND MEDICARE-DEPENDENT 

5 HOSPITALS (MDHS). 

6 (a) EXTENSION OF INCREASED PAYMENTS FOR

7 MDHS.— 

8 (1) EXTENSION OF PAYMENT METHODOLOGY.— 

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

10 U.S.C. 1395ww(d)(5)(G)), as amended by section 

11 205(a) of the Medicare Access and CHIP Reauthor12 ization Act of 2015, is amended— 

13 (A) in clause (i), by striking ‘‘, and before 

14 October 1, 2017’’; and 

15 (B) in clause (ii)(II), by striking ‘‘, and be16 fore October 1, 2017’’. 

17 (2) CONFORMING AMENDMENTS.— 

18 (A) EXTENSION OF TARGET AMOUNT.— 

19 Section 1886(b)(3)(D) of the Social Security 

20 Act (42 U.S.C. 1395ww(b)(3)(D)), as amended 

21 by section 205(b) of the Medicare Access and 

22 CHIP Reauthorization Act of 2015, is amend23 ed— 


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1 (i) in the matter preceding clause (i), 

2 by striking ‘‘, and before October 1, 

3 2017’’; and 

4 (ii) in clause (iv), by striking ‘‘during 

5 fiscal year 1998 through fiscal year 2017’’ 

6 and inserting ‘‘during or after fiscal year 

7 1998’’. 

8 (B) EXTENDING THE PERIOD DURING

9 WHICH HOSPITALS CAN DECLINE RECLASSI10 FICATION AS URBAN.—Section 13501(e)(2) of 

11 the Omnibus Budget Reconciliation Act of 1993 

12 (42 U.S.C. 1395ww note), as amended by sec13 tion 205(b) of the Medicare Access and CHIP 

14 Reauthorization Act of 2015, is amended— 

15 (i) by inserting after ‘‘2017’’ the fol16 lowing: ‘‘or a subsequent fiscal year’’; and 

17 (ii) in subparagraph (C), by inserting 

18 after ‘‘such reclassification’’ the following: 

19 ‘‘during the 1-year period that begins on 

20 the date of the notification of the hospital 

21 under subparagraph (A)’’. 

22 (b) EXTENSION OF INCREASED PAYMENTS FOR LOW23 VOLUME HOSPITALS.—Section 1886(d)(12) of the Social 

24 Security Act (42 U.S.C. 1395ww(d)(12)), as amended by 


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1 section 204 of the Medicare Access and CHIP Reauthor2 ization Act of 2015, is amended— 

3 (1) in subparagraph (B)— 

4 (A) in the heading, by inserting after ‘‘IN5 CREASE’’ the following: ‘‘THROUGH FISCAL

6 YEAR 2010’’; and 

7 (B) by striking ‘‘and for discharges occur8 ring in fiscal year 2018 and subsequent fiscal 

9 years’’; 

10 (2) in subparagraph (C)(i)— 

11 (A) by striking ‘‘25 road miles (or, with re12 spect to fiscal years 2011 through 2017, 15 

13 road miles)’’ and inserting ‘‘15 road miles’’; 

14 and 

15 (B) striking ‘‘(or, with respect to fiscal 

16 years 2011 through 2017, 1,600 discharges of 

17 individuals entitled to, or enrolled for, benefits 

18 under part A)’’ and inserting ‘‘or 1,600 dis19 charges of individuals entitled to, or enrolled 

20 for, benefits under part A’’; and 

21 (3) in subparagraph (D)— 

22 (A) by amending the heading to read as 

23 follows: ‘‘APPLICABLE PERCENTAGE INCREASE

24 AFTER FISCAL YEAR 2010’’; and 


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1 (B) by striking ‘‘in fiscal years 2011 

2 through 2017’’ and inserting ‘‘in fiscal year 

3 2011 and each subsequent fiscal year’’. 

4 SEC. 104. REINSTATING REVISED DIAGNOSIS-RELATED 

5 GROUP PAYMENTS FOR MDHS AND SOLE 

6 COMMUNITY HOSPITALS (SCHS). 

7 (a) PAYMENTS FOR MDHS AND SCHS FOR VALUE8 BASED INCENTIVE PROGRAMS.—Section 

9 1886(o)(7)(D)(ii)(I) of the Social Security Act (42 U.S.C. 

10 1395ww(o)(7)(D)(ii)(I)) is amended by inserting ‘‘or after 

11 fiscal year 2016’’ after ‘‘2013’’. 

12 (b) PAYMENTS FOR MDHS AND SCHS UNDER HOS13 PITAL READMISSIONS REDUCTION PROGRAM.—Section 

14 1886(q)(2)(B)(i) of the Social Security Act (42 U.S.C. 

15 1395ww(q)(2)(B)(i)) is amended by inserting ‘‘or after fis16 cal year 2016’’ after ‘‘2013’’. 

17 SEC. 105. REINSTATING HOLD HARMLESS TREATMENT FOR 

18 HOSPITAL OUTPATIENT SERVICES FOR SCHS. 

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

20 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

21 (1) in the heading, by striking ‘‘TEMPORARY’’ 

22 and inserting ‘‘PERMANENT’’; 

23 (2) in subclause (II)— 


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1 (A) in the first sentence, by inserting ‘‘or 

2 on or after January 1, 2016,’’ after ‘‘January 

3 1, 2013,’’; and 

4 (B) in the second sentence, by inserting ‘‘, 

5 or during or after 2016’’ after ‘‘or 2012’’; and 

6 (3) in subclause (III), in the first sentence, by 

7 inserting ‘‘or on or after January 1, 2016,’’ after 

8 ‘‘January 1, 2013,’’. 

9 SEC. 106. DELAYING APPLICATION OF PENALTIES FOR 

10 FAILURE TO BE A MEANINGFUL ELECTRONIC 

11 HEALTH RECORD USER. 

12 (a) IN GENERAL.—Section 1886(b)(3)(B)(ix)(I) of 

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

14 1395ww(b)(3)(B)(ix)(I)) is amended by adding at the end 

15 the following: ‘‘In the case of a hospital located in a rural 

16 area, each fiscal year referred to in the first sentence of 

17 this subclause shall be applied as if it were a reference 

18 to the year that is 4 fiscal years later.’’. 

19 (b) APPLICABILITY.—The amendment made by this 

20 section applies with respect fiscal years beginning after the 

21 date of the enactment of this Act. 


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1 SEC. 107. ELIMINATING RURAL MEDICARE AND MEDICAID 

2 DISPROPORTIONATE SHARE HOSPITAL PAY3 MENT REDUCTIONS. 

4 (a) MEDICARE.—Section 1886(r)(1) of the Social Se5 curity Act (42 U.S.C. 1395ww(r)(1)) is amended by in6 serting before ‘‘25 percent’’ the following: ‘‘(unless such 

7 hospital is located in a rural area, as defined in subsection 

8 (d)(2)(D))’’. 

9 (b) MEDICAID.—Section 1923(f)(3) of the Social Se10 curity Act (42 U.S.C.1396r–4(f)(3)) is amended— 

11 (1) in subparagraph (A) by striking ‘‘subpara12 graph (E)’’ and inserting ‘‘subparagraphs (E) and 

13 (F)’’; and 

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

15 ‘‘(F) INCREASE IN ALLOTMENTS AND PAY16 MENTS FOR RURAL HOSPITALS.— 

17 ‘‘(i) ALLOTMENTS.—The DSH allot18 ment for a State with respect to a fiscal 

19 year that would be determined under this 

20 paragraph for the State for the fiscal year 

21 without application of this subparagraph, 

22 notwithstanding subparagraphs (B), (C), 

23 and (E), shall be increased by the product 

24 of the reduction to such State under para25 graph (7)(A)(i)(I) for such fiscal year and 

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1 ing in the State that live in a rural area 

2 (as defined in section 1886(d)(2)(D)), sub3 ject to clause (iii). 

4 ‘‘(ii) PAYMENTS.—The payments to a 

5 State under section 1903(a) for each cal6 endar quarter shall be increased by the 

7 product of the reduction to such State 

8 under paragraph (7)(A)(i)(II) for such fis9 cal year and the percentage of Medicaid 

10 enrollees residing in the State that live in 

11 a rural area (as defined in section 

12 1886(d)(2)(D)), subject to clause (iii). 

13 ‘‘(iii) ASSURANCES REGARDING APPLI14 CATION OF INCREASED FUNDS TO HOS15 PITALS IN RURAL AREAS.—A State may 

16 only receive an increased allotment or pay17 ment under this paragraph if such State 

18 provides such assurances as the Secretary 

19 may require that any funds received due to 

20 the increase in clauses (i) and (ii) shall be 

21 allotted to hospitals located in rural areas 

22 as an additional amount above what would 

23 be allotted to such hospitals without appli24 cation of such clause.’’. 


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1 (c) APPLICABILITY.—The amendments made by this 

2 section apply with respect to fiscal year 2017. 

3 Subtitle B—Other Rural Providers 

4 SEC. 111. MAKING PERMANENT INCREASED MEDICARE 

5 PAYMENTS FOR GROUND AMBULANCE SERV6 ICES IN RURAL AREAS. 

7 Section 1834(l)(13) of the Social Security Act (42 

8 U.S.C. 1395m(l)(13)) is amended— 

9 (1) by striking ‘‘TEMPORARY INCREASE’’ and 

10 inserting ‘‘INCREASE’’; and 

11 (2) in subparagraph (A)— 

12 (A) in the matter preceding clause (i), by 

13 striking ‘‘, and before January 1, 2018’’; and 

14 (B) in clause (i), by striking ‘‘, and before 

15 January 1, 2018’’. 

16 SEC. 112. EXTENDING MEDICAID PRIMARY CARE PAY17 MENTS. 

18 (a) IN GENERAL.—Section 1902(a)(13)(C) of the So19 cial Security Act (42 U.S.C. 1396a(a)(13)(C)) is amended 

20 by inserting after ‘‘2014’’ the following: ‘‘(or in the case 

21 of a primary care services furnished by a physician located 

22 in a rural area, as defined in section 1886(d)(2)(D), fur23 nished in any year)’’. 

24 (b) APPLICABILITY.— 


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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendment made by this section ap3 plies to services furnished in a year beginning on or 

4 after such date. 

5 (2) EXCEPTION IF STATE LEGISLATION RE6 QUIRED.—In the case of a State plan for medical as7 sistance under title XIX of the Social Security Act 

8 which the Secretary of Health and Human Services 

9 determines requires State legislation (other than leg10 islation appropriating funds) in order for the plan to 

11 meet the additional requirement imposed by the 

12 amendment made by this section, the State plan 

13 shall not be regarded as failing to comply with the 

14 requirements of such title solely on the basis of its 

15 failure to meet this additional requirement before 

16 the first day of the first calendar quarter beginning 

17 after the close of the first regular session of the 

18 State legislature that begins after the date of the en19 actment of this Act. For purposes of the previous 

20 sentence, in the case of a State that has a 2-year 

21 legislative session, each year of such session shall be 

22 deemed to be a separate regular session of the State 

23 legislature. 


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1 TITLE II—RURAL MEDICARE 

2 BENEFICIARY EQUITY 

3 SEC. 201. EQUALIZING BENEFICIARY COPAYMENTS FOR 

4 SERVICES FURNISHED BY CAHS. 

5 (a) IN GENERAL.—Section 1866(a)(2)(A) of the So6 cial Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended 

7 by adding at the end the following: ‘‘In the case of out8 patient critical access hospital services for which payment 

9 is made under section 1834(g), clause (ii) of the first sen10 tence shall be applied by substituting ‘20 percent of the 

11 lesser of the actual charge or the payment basis under 

12 this part for such services if the critical access hospital 

13 were treated as a hospital’ for ‘20 per centum of the rea14 sonable charge for such items and services’.’’ 

15 (b) APPLICABILITY.—The amendment made by this 

16 section applies with respect to services furnished during 

17 a year that begins more than 60 days after the date of 

18 the enactment of this Act. 

19 TITLE III—REGULATORY RELIEF 

20 SEC. 301. ELIMINATING 96-HOUR PHYSICIAN CERTIFI21 CATION REQUIREMENT WITH RESPECT TO 

22 INPATIENT CAH SERVICES. 

23 (a) IN GENERAL.—Section 1814(a) of the Social Se24 curity Act (42 U.S.C. 1395f(a)) is amended— 


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1 (1) in paragraph (6), by adding ‘‘and’’ at the 

2 end; 

3 (2) in paragraph (7)(E), by striking ‘‘; and’’ 

4 and inserting a period; and 

5 (3) by striking paragraph (8). 

6 (b) APPLICABILITY.—The amendments made by this 

7 section apply with respect to services furnished during a 

8 year that begins more than 60 days after the date of the 

9 enactment of this Act. 

10 SEC. 302. REBASING SUPERVISION REQUIREMENTS. 

11 (a) THERAPEUTIC HOSPITAL OUTPATIENT SERV12 ICES.— 

13 (1) SUPERVISION REQUIREMENTS.—Section 

14 1833 of the Social Security Act (42 U.S.C. 1395l) 

15 is amended by adding at the end the following: 

16 ‘‘(aa) PHYSICIAN SUPERVISION REQUIREMENTS FOR

17 THERAPEUTIC HOSPITAL OUTPATIENT SERVICES.— 

18 ‘‘(1) GENERAL SUPERVISION FOR THERAPEUTIC

19 SERVICES.—Except as may be provided under para20 graph (2), insofar as the Secretary requires the su21 pervision by a physician or a non-physician practi22 tioner for payment for therapeutic hospital out23 patient services (as defined in paragraph (5)(A)) 

24 furnished under this part, such requirement shall be 

25 met if such services are furnished under the general 


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1 supervision (as defined in paragraph (5)(B)) of the 

2 physician or non-physician practitioner, as the case 

3 may be. 

4 ‘‘(2) EXCEPTIONS PROCESS FOR HIGH-RISK OR

5 COMPLEX MEDICAL SERVICES REQUIRING A DIRECT

6 LEVEL OF SUPERVISION.— 

7 ‘‘(A) IN GENERAL.—Subject to the suc8 ceeding provisions of this paragraph, the Sec9 retary shall establish a process for the designa10 tion of therapeutic hospital outpatient services 

11 furnished under this part that, by reason of 

12 complexity or high risk, require— 

13 ‘‘(i) direct supervision (as defined in 

14 paragraph (5)(C)) for the entire service; or 

15 ‘‘(ii) direct supervision during the ini16 tiation of the service followed by general 

17 supervision for the remainder of the serv18 ice. 

19 ‘‘(B) CONSULTATION WITH CLINICAL EX20 PERTS.— 

21 ‘‘(i) IN GENERAL.—Under the process 

22 established under subparagraph (A), before 

23 the designation of any therapeutic hospital 

24 outpatient service for which direct super25 vision may be required under this part, the 


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1 Secretary shall consult with a panel of out2 side experts described in clause (ii) to ad3 vise the Secretary with respect to each 

4 such designation. 

5 ‘‘(ii) ADVISORY PANEL ON SUPER6 VISION OF THERAPEUTIC HOSPITAL OUT7 PATIENT SERVICES.—For purposes of 

8 clause (i), a panel of outside experts de9 scribed in this clause is a panel appointed 

10 by the Secretary, based on nominations 

11 submitted by hospital, rural health, and 

12 medical organizations representing physi13 cians, non-physician practitioners, and hos14 pital administrators, as the case may be, 

15 that meets the following requirements: 

16 ‘‘(I) COMPOSITION.—The panel 

17 shall be composed of at least 15 phy18 sicians and non-physician practi19 tioners who furnish therapeutic hos20 pital outpatient services for which 

21 payment is made under this part and 

22 who collectively represent the medical 

23 specialties that furnish such services, 

24 and of 4 hospital administrators of 

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1 fined in section 1886(d)(2)(D)) or 

2 critical access hospitals. 

3 ‘‘(II) PRACTICAL EXPERIENCE

4 REQUIRED FOR PHYSICIANS AND NON5 PHYSICIAN PRACTITIONERS.—During 

6 the 12-month period preceding ap7 pointment to the panel by the Sec8 retary, each physician or non-physi9 cian practitioner described in sub10 clause (I) shall have furnished thera11 peutic hospital outpatient services for 

12 which payment was made under this 

13 part. 

14 ‘‘(III) MINIMUM RURAL REP15 RESENTATION REQUIREMENT FOR

16 PHYSICIANS AND NON-PHYSICIAN

17 PRACTITIONERS.—Not less than 50 

18 percent of the membership of the 

19 panel that is comprised of physicians 

20 and non-physician practitioners shall 

21 be physicians or non-physician practi22 tioners described in subclause (I) who 

23 practice in rural areas (as defined in 

24 section 1886(d)(2)(D)) or who furnish 


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1 such services in critical access hos2 pitals. 

3 ‘‘(iii) APPLICATION OF FACA.—The 

4 Federal Advisory Committee Act (5 U.S.C. 

5 2 App.), other than section 14 of such Act, 

6 shall apply to the panel of outside experts 

7 appointed by the Secretary under clause 

8 (ii). 

9 ‘‘(C) SPECIAL RULE FOR OUTPATIENT

10 CRITICAL ACCESS HOSPITAL SERVICES.—Inso11 far as a therapeutic outpatient hospital service 

12 that is an outpatient critical access hospital 

13 service is designated as requiring direct super14 vision under the process established under sub15 paragraph (A), the Secretary shall deem the 

16 critical access hospital furnishing that service 

17 as having met the requirement for direct super18 vision for that service if, when furnishing such 

19 service, the critical access hospital meets the 

20 standard for personnel required as a condition 

21 of participation under section 485.618(d) of 

22 title 42, Code of Federal Regulations (as in ef23 fect on the date of the enactment of this sub24 section). 


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1 ‘‘(D) CONSIDERATION OF COMPLIANCE

2 BURDENS.—Under the process established 

3 under subparagraph (A), the Secretary shall 

4 take into account the impact on hospitals and 

5 critical access hospitals in complying with re6 quirements for direct supervision in the fur7 nishing of therapeutic hospital outpatient serv8 ices, including hospital resources, availability of 

9 hospital-privileged physicians, specialty physi10 cians, and non-physician practitioners, and ad11 ministrative burdens. 

12 ‘‘(E) REQUIREMENT FOR NOTICE AND

13 COMMENT RULEMAKING.—Under the process 

14 established under subparagraph (A), the Sec15 retary shall only designate therapeutic hospital 

16 outpatient services requiring direct supervision 

17 under this part through proposed and final 

18 rulemaking that provides for public notice and 

19 opportunity for comment. 

20 ‘‘(F) RULE OF CONSTRUCTION.—Nothing 

21 in this subsection shall be construed as author22 izing the Secretary to apply or require any level 

23 of supervision other than general or direct su24 pervision with respect to the furnishing of 

25 therapeutic hospital outpatient services. 


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1 ‘‘(3) INITIAL LIST OF DESIGNATED SERVICES.— 

2 The Secretary shall include in the proposed and final 

3 regulation for payment for hospital outpatient serv4 ices for 2017 under this part a list of initial thera5 peutic hospital outpatient services, if any, designated 

6 under the process established under paragraph 

7 (2)(A) as requiring direct supervision under this 

8 part. 

9 ‘‘(4) DIRECT SUPERVISION BY NON-PHYSICIAN

10 PRACTITIONERS FOR CERTAIN HOSPITAL OUT11 PATIENT SERVICES PERMITTED.— 

12 ‘‘(A) IN GENERAL.—Subject to the suc13 ceeding provisions of this subsection, a non-phy14 sician practitioner may directly supervise the 

15 furnishing of— 

16 ‘‘(i) therapeutic hospital outpatient 

17 services under this part, including cardiac 

18 rehabilitation services (under section 

19 1861(eee)(1)), intensive cardiac rehabilita20 tion services (under section 1861(eee)(4)), 

21 and pulmonary rehabilitation services 

22 (under section 1861(fff)(1)); and 

23 ‘‘(ii) those hospital outpatient diag24 nostic services (described in section 

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1 vision under the fee schedule established 

2 under section 1848. 

3 ‘‘(B) REQUIREMENTS.—Subparagraph (A) 

4 shall apply insofar as the non-physician practi5 tioner involved meets the following require6 ments: 

7 ‘‘(i) SCOPE OF PRACTICE.—The non8 physician practitioner is acting within the 

9 scope of practice under State law applica10 ble to the practitioner. 

11 ‘‘(ii) ADDITIONAL REQUIREMENTS.— 

12 The non-physician practitioner meets such 

13 requirements as the Secretary may specify. 

14 ‘‘(5) DEFINITIONS.—In this subsection: 

15 ‘‘(A) THERAPEUTIC HOSPITAL OUT16 PATIENT SERVICES.—The term ‘therapeutic 

17 hospital outpatient services’ means hospital 

18 services described in section 1861(s)(2)(B) fur19 nished by a hospital or critical access hospital 

20 and includes— 

21 ‘‘(i) cardiac rehabilitation services and 

22 intensive cardiac rehabilitation services (as 

23 defined in paragraphs (1) and (4), respec24 tively, of section 1861(eee)); and 


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1 ‘‘(ii) pulmonary rehabilitation services 

2 (as defined in section 1861(fff)(1)). 

3 ‘‘(B) GENERAL SUPERVISION.— 

4 ‘‘(i) OVERALL DIRECTION AND CON5 TROL OF PHYSICIAN.—Subject to clause 

6 (ii), with respect to the furnishing of 

7 therapeutic hospital outpatient services for 

8 which payment may be made under this 

9 part, the term ‘general supervision’ means 

10 such services that are furnished under the 

11 overall direction and control of a physician 

12 or non-physician practitioner, as the case 

13 may be. 

14 ‘‘(ii) PRESENCE NOT REQUIRED.—For 

15 purposes of clause (i), the presence of a 

16 physician or non-physician practitioner is 

17 not required during the performance of the 

18 procedure involved. 

19 ‘‘(C) DIRECT SUPERVISION.— 

20 ‘‘(i) PROVISION OF ASSISTANCE AND

21 DIRECTION.—Subject to clause (ii), with 

22 respect to the furnishing of therapeutic 

23 hospital outpatient services for which pay24 ment may be made under this part, the 

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1 sician or non-physician practitioner, as the 

2 case may be, is immediately available (in3 cluding by telephone or other means) to 

4 furnish assistance and direction through5 out the furnishing of such services. Such 

6 term includes, with respect to the fur7 nishing of a therapeutic hospital outpatient 

8 service for which payment may be made 

9 under this part, direct supervision during 

10 the initiation of the service followed by 

11 general supervision for the remainder of 

12 the service (as described in paragraph 

13 (2)(A)(ii)). 

14 ‘‘(ii) PRESENCE IN ROOM NOT RE15 QUIRED.—For purposes of clause (i), a 

16 physician or non-physician practitioner, as 

17 the case may be, is not required to be 

18 present in the room during the perform19 ance of the procedure involved or within 

20 any other physical boundary as long as the 

21 physician or non-physician practitioner, as 

22 the case may be, is immediately available. 

23 ‘‘(D) NON-PHYSICIAN PRACTITIONER DE24 FINED.—The term ‘non-physician practitioner’ 

25 means an individual who— 


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1 ‘‘(i) is a physician assistant, a nurse 

2 practitioner, a clinical nurse specialist, a 

3 clinical social worker, a clinical psycholo4 gist, a certified nurse midwife, or a cer5 tified registered nurse anesthetist, and in6 cludes such other practitioners as the Sec7 retary may specify; and 

8 ‘‘(ii) with respect to the furnishing of 

9 therapeutic outpatient hospital services, 

10 meets the requirements of paragraph 

11 (4)(B).’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 1861(eee)(2)(B) of the Social Security Act (42 

14 U.S.C. 1395x(eee)(2)(B)) is amended by inserting ‘‘, 

15 and a non-physician practitioner (as defined in sec16 tion 1833(aa)(5)(D)) may supervise the furnishing 

17 of such items and services in the hospital’’ after ‘‘in 

18 the case of items and services furnished under such 

19 a program in a hospital, such availability shall be 

20 presumed’’. 

21 (b) PROHIBITION ON RETROACTIVE ENFORCEMENT

22 OF REVISED INTERPRETATION.— 

23 (1) REPEAL OF REGULATORY CLARIFICA24 TION.—The restatement and clarification under the 

25 final rulemaking changes to the Medicare hospital 


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1 outpatient prospective payment system and calendar 

2 year 2009 payment rates (published in the Federal 

3 Register on November 18, 2008, 73 Fed. Reg. 

4 68702 through 68704) with respect to requirements 

5 for direct supervision by physicians for therapeutic 

6 hospital outpatient services (as defined in paragraph 

7 (3)) for purposes of payment for such services under 

8 the Medicare program shall have no force or effect 

9 in law. 

10 (2) HOLD HARMLESS.—A hospital or critical 

11 access hospital that furnishes therapeutic hospital 

12 outpatient services during the period beginning on 

13 January 1, 2001, and ending on the later of Decem14 ber 31, 2016, or the date on which the final regula15 tion promulgated by the Secretary of Health and 

16 Human Services to carry out this section takes ef17 fect, for which a claim for payment is made under 

18 part B of title XVIII of the Social Security Act shall 

19 not be subject to any civil or criminal action or pen20 alty under Federal law for failure to meet super21 vision requirements under the regulation described 

22 in paragraph (1), under program manuals, or other23 wise. 

24 (3) THERAPEUTIC HOSPITAL OUTPATIENT

25 SERVICES DEFINED.—In this subsection, the term 


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1 ‘‘therapeutic hospital outpatient services’’ means 

2 medical and other health services furnished by a 

3 hospital or critical access hospital that are— 

4 (A) hospital services described in sub5 section (s)(2)(B) of section 1861 of the Social 

6 Security Act (42 U.S.C. 1395x); 

7 (B) cardiac rehabilitation services or inten8 sive cardiac rehabilitation services (as defined 

9 in paragraphs (1) and (4), respectively, of sub10 section (eee) of such section); or 

11 (C) pulmonary rehabilitation services (as 

12 defined in subsection (fff)(1) of such section). 

13 SEC. 303. REFORMING PRACTICES OF RECOVERY AUDIT 

14 CONTRACTORS UNDER MEDICARE. 

15 (a) ELIMINATION OF CONTINGENCY FEE PAYMENT

16 SYSTEM.—Section 1893(h) of the Social Security Act (42 

17 U.S.C. 1395ddd(h)), as amended by section 505(b) of the 

18 Medicare Access and CHIP Reauthorization Act of 2015, 

19 is amended— 

20 (1) in paragraph (1), by inserting ‘‘, for recov21 ery activities conducted during a fiscal year before 

22 fiscal year 2016’’ after ‘‘Under the contracts’’; and 

23 (2) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(11) PAYMENT FOR RECOVERY ACTIVITIES

2 PERFORMED AFTER FISCAL YEAR 2015.— 

3 ‘‘(A) IN GENERAL.—Under the contracts, 

4 subject to paragraphs (B) and (C), payment 

5 shall be made to recovery audit contractors for 

6 recovery activities conducted during fiscal year 

7 2016 and each fiscal year thereafter in the 

8 same manner, and from the same amounts, as 

9 payment is made to eligible entities under con10 tracts entered into for recovery activities con11 ducted during fiscal year 2015 under subsection 

12 (a). 

13 ‘‘(B) PROHIBITION ON INCENTIVE PAY14 MENTS.—Under the contracts, payment made 

15 to a recovery audit contractor for recovery ac16 tivities conducted during fiscal year 2016 or 

17 any fiscal year thereafter may not include any 

18 incentive payments. 

19 ‘‘(C) PERFORMANCE ACCOUNTABILITY.— 

20 ‘‘(i) IN GENERAL.—Under the con21 tracts, payment made to a recovery audit 

22 contractor for recovery activities conducted 

23 during fiscal year 2016 or any fiscal year 

24 thereafter shall, in the case that the con25 tractor has a complex audit denial overturn 


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1 rate at the end of such fiscal year (as cal2 culated under the methodology described in 

3 clause (iv)) that is .1 or greater, be re4 duced in an amount determined in accord5 ance with clause (ii). 

6 ‘‘(ii) PAYMENT REDUCTIONS.— 

7 ‘‘(I) SLIDING SCALE OF AMOUNT

8 OF REDUCTIONS.—The Secretary 

9 shall establish, for purposes of deter10 mining the amount of a reduction in 

11 payment to a recovery audit con12 tractor under clause (i) for recovery 

13 activities conducted during fiscal year, 

14 a linear sliding scale of payment re15 ductions for recovery audit contrac16 tors for such fiscal year. Under such 

17 linear sliding scale, the amount of 

18 such a reduction in payment to a re19 covery audit contractor for a fiscal 

20 year shall be calculated in a manner 

21 that provides for such reduction to be 

22 greater than the reduction for such 

23 fiscal year for recovery audit contrac24 tors that have complex audit denial 

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1 cal year (as calculated under the 

2 methodology described in clause (iv)) 

3 that are lower than the complex audit 

4 denial overturn rate of the contractor 

5 at the end of such fiscal year (as so 

6 calculated). 

7 ‘‘(II) MANNER OF COLLECTING

8 REDUCTION.—The Secretary may as9 sess and collect the reductions in pay10 ment to recovery audit contractors 

11 under clause (i) in such manner as 

12 the Secretary may specify (such as by 

13 reducing the amount paid to the con14 tractor for recovery activities con15 ducted during a fiscal year or by as16 sessing the reduction as a separate 

17 penalty payment to be paid to the 

18 Secretary by the contractor with re19 spect to each complex audit denial 

20 issued by the contractor that is over21 turned on appeal). 

22 ‘‘(iii) TIMING OF DETERMINATIONS OF

23 PAYMENT REDUCTIONS.—The Secretary 

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1 tractor, determine not later than six 

2 months after the end of a fiscal year— 

3 ‘‘(I) whether to reduce payment 

4 to the recovery audit contractor under 

5 clause (i) for recovery activities con6 ducted during such fiscal year; and 

7 ‘‘(II) in the case that the Sec8 retary determines to so reduce pay9 ment to the contractor, the amount of 

10 such payment reduction. 

11 ‘‘(iv) METHODOLOGY FOR CALCULA12 TION OF OVERTURNED COMPLEX AUDIT

13 DENIAL OVERTURN RATE.— 

14 ‘‘(I) CALCULATION OF OVERTURN

15 RATE.—The Secretary shall calculate 

16 a complex audit denial overturn rate 

17 for a recovery audit contractor for a 

18 fiscal year by— 

19 ‘‘(aa) determining, with re20 spect to the contract entered into 

21 under paragraph (1) by the con22 tractor, the number of complex 

23 audit denials issued by the con24 tractor under the contract (in25 cluding denials issued before such 


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1 fiscal year and during such fiscal 

2 year) that are overturned on ap3 peal; and 

4 ‘‘(bb) dividing the number 

5 determined under item (aa) by 

6 the number of complex audit de7 nials issued by the contractor 

8 under such contract (including 

9 denials issued before such fiscal 

10 year and during such fiscal year). 

11 ‘‘(II) FAIRNESS AND TRANS12 PARENCY.—The Secretary shall cal13 culate the percentage described in 

14 subclause (I) in a fair and trans15 parent manner. 

16 ‘‘(III) ACCOUNTING FOR SUBSE17 QUENTLY OVERTURNED APPEALS.— 

18 The Secretary shall calculate the per19 centage described in subclause (I) in a 

20 manner that accounts for the likeli21 hood that complex audit denials 

22 issued by the contractor for such fis23 cal year will be overturned on appeal 

24 in a subsequent fiscal year. 


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1 ‘‘(IV) COMPLEX AUDIT DENIAL

2 DEFINED.—In this subparagraph, the 

3 term ‘complex audit denial’ means a 

4 denial by a recovery audit contractor 

5 of a claim for payment under this title 

6 submitted by a hospital, psychiatric 

7 hospital, or critical access hospital 

8 that is so denied by the contractor 

9 after the contractor has— 

10 ‘‘(aa) requested that the 

11 hospital, psychiatric hospital, or 

12 critical access hospital, in order 

13 to support such claim for pay14 ment, provide supporting medical 

15 records to the contractor; and 

16 ‘‘(bb) reviewed such medical 

17 records in order to determine 

18 whether an improper payment 

19 has been made to the hospital, 

20 psychiatric hospital, or critical 

21 access hospital for such claim. 

22 ‘‘(V) OVERTURNED ON APPEAL

23 DEFINED.—In this subparagraph, the 

24 term ‘overturned on appeal’ means, 

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1 nial, a denial that is overturned on 

2 appeal at the reconsideration level, the 

3 redetermination level, or the adminis4 trative law judge hearing level. 

5 ‘‘(D) APPLICATION TO EXISTING CON6 TRACTS.—Not later than 60 days after the date 

7 of the enactment of this paragraph, the Sec8 retary shall modify, as necessary, each contract 

9 under paragraph (1) that the Secretary entered 

10 into prior to such date of enactment in order to 

11 ensure that payment with respect to recovery 

12 activities conducted under such contract is 

13 made in accordance with the requirements de14 scribed in this paragraph.’’. 

15 (b) ELIMINATION OF ONE-YEAR TIMELY FILING

16 LIMIT TO REBILL PART B CLAIMS.— 

17 (1) IN GENERAL.—Section 1842(b) of the So18 cial Security Act (42 U.S.C. 1395u(b)) is amended 

19 by adding at the end the following new paragraph: 

20 ‘‘(20) EXCEPTION TO THE ONE-YEAR TIMELY

21 FILING LIMIT FOR CERTAIN REBILLED CLAIMS.— 

22 ‘‘(A) IN GENERAL.—In the case of a claim 

23 submitted under this part by a hospital (as de24 fined in subparagraph (B)(i)) for hospital serv25 ices with respect to which there was a previous 


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1 claim submitted under part A as inpatient hos2 pital services or inpatient critical access hos3 pital services that was denied by a medicare 

4 contractor (as defined in subparagraph (B)(ii)) 

5 because of a determination that the inpatient 

6 admission was not medically reasonable and 

7 necessary under section 1862(a)(1)(A), the 

8 deadline described in this paragraph is 180 

9 days after the date of the final denial of such 

10 claim under part A. 

11 ‘‘(B) DEFINITIONS.—In this paragraph: 

12 ‘‘(i) HOSPITAL.—The term ‘hospital’ 

13 has the meaning given such term in section 

14 1861(e) and includes a psychiatric hospital 

15 (as defined in section 1861(f)) and a crit16 ical access hospital (as defined in section 

17 1861(mm)(1)). 

18 ‘‘(ii) MEDICARE CONTRACTOR.—The 

19 term ‘medicare contractor’ has the mean20 ing given such term under section 1889(g), 

21 and includes a recovery audit contractor 

22 with a contract under section 1893(h). 

23 ‘‘(iii) FINAL DENIAL.—The term ‘final 

24 denial’ means— 


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1 ‘‘(I) in the case that a hospital 

2 elects not to appeal a denial described 

3 in subparagraph (A) by a medicare 

4 contractor, the date of such denial; or 

5 ‘‘(II) in the case that a hospital 

6 elects to appeal a such a denial, the 

7 date on which such appeal is ex8 hausted.’’. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Section 1835(a)(1) of the Social Secu11 rity Act (42 U.S.C. 1395n(a)(1)) is amended by 

12 inserting ‘‘or, in the case of a claim described 

13 in section 1842(b)(20), not later than the dead14 line described in such paragraph’’ after ‘‘the 

15 date of service’’. 

16 (B) Section 1842(b)(3)(B) of the Social 

17 Security Act (42 U.S.C. 1395u(b)(3)(B)) is 

18 amended in the flush language following clause 

19 (ii) by inserting ‘‘or, in the case of a claim de20 scribed in section 1842(b)(20), not later than 

21 the deadline described in such paragraph’’ after 

22 ‘‘the date of service’’. 

23 (3) APPLICABILITY.—The amendments made 

24 by this subsection apply to claims submitted under 

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


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1 hospital services for which there was a previous 

2 claim submitted under part A as inpatient hospital 

3 services or inpatient critical access hospital services 

4 that was subject to a final denial (as defined in 

5 paragraph (20)(B)(iii) of section 1842(b) of such 

6 Act (42 U.S.C. 1395u(b)) on or after the date of the 

7 enactment of this Act. 

8 (c) MEDICAL DOCUMENTATION CONSIDERED FOR

9 MEDICAL NECESSITY REVIEWS OF CLAIMS FOR INPA10 TIENT HOSPITAL SERVICES.—Section 1862(a) of the So11 cial Security Act (42 U.S.C. 1395y(a)) is amended by add12 ing at the end the following new sentence: ‘‘A determina13 tion under paragraph (1) of whether inpatient hospital 

14 services or inpatient critical access hospital services fur15 nished to an individual on or after the date of the enact16 ment of this sentence are reasonable and necessary shall 

17 be based solely upon information available to the admit18 ting physician at the time of the inpatient admission of 

19 the individual for such inpatient services, as documented 

20 in the medical record.’’ 

21 TITLE IV—FUTURE OF RURAL 

22 HEALTH CARE 

23 SEC. 401. COMMUNITY OUTPATIENT HOSPITAL PROGRAM. 

24 (a) IN GENERAL.— 


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1 (1) COMMUNITY OUTPATIENT HOSPITAL AND

2 QUALIFIED OUTPATIENT SERVICES DEFINED.—Sec3 tion 1861 of the Social Security Act (42 U.S.C. 

4 1395x) is amended— 

5 (A) in the last sentence of subsection (e), 

6 by inserting before the period at the end ‘‘or a 

7 community outpatient hospital (as defined in 

8 subsection (iii)(1))’’; and 

9 (B) by adding at the end the following: 

10 ‘‘Community Outpatient Hospital 

11 ‘‘(iii)(1) The term ‘community outpatient hospital’ 

12 means a facility that— 

13 ‘‘(A) at any time during the period beginning 

14 on the date that is 5 years before the date of the 

15 enactment of this subsection and ending on Decem16 ber 31, 2014, was a critical access hospital, or is a 

17 hospital with not more than 50 beds that is— 

18 ‘‘(i) located in a rural area (as defined in 

19 section 1886(d)(2)(D)); or 

20 ‘‘(ii) treated as being located in a rural 

21 area under section 1886(d)(8)(E); 

22 ‘‘(B) provides emergency medical care and ob23 servation care available on a 24-hour basis; 


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1 ‘‘(C) with respect to continuous care for an in2 dividual, does not provide care over 2 or more con3 secutive midnights; 

4 ‘‘(D) does not provide any acute care inpatient 

5 beds and has protocols in place for the timely trans6 fer of patients who require other inpatient services; 

7 ‘‘(E) has the resources required of a level IV or 

8 higher trauma center (as verified by the American 

9 College of Surgeons or other means specified by the 

10 Secretary), or has available for consultation on a 24- 

11 hour basis a health care professional who success12 fully completed the Advanced Trauma Life Support 

13 Course offered by the American College of Surgeons 

14 (or an equivalent course as determined by the Sec15 retary) within the preceding 4 years; 

16 ‘‘(F) has in effect a transfer agreement with a 

17 level I or level II trauma center designated under 

18 section 1231(1) of the Public Health Service Act; 

19 ‘‘(G) meets the requirements of subsection 

20 (aa)(2)(I); 

21 ‘‘(H) has been approved by the State in which 

22 the facility is located for treatment as a community 

23 outpatient hospital; 

24 ‘‘(I) notifies the Secretary at such time and in 

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1 tent of such facility to be designated as a community 

2 outpatient facility; and 

3 ‘‘(J) meets such staff training and certification 

4 requirements as the Secretary may require. 

5 ‘‘(2) Nothing in this subsection or section 1834(r) 

6 shall be construed to prohibit a community outpatient hos7 pital from having an agreement under section 1883 for 

8 the provision of extended care services. 

9 ‘‘(3) Unless the context otherwise requires, a ref10 erence to a community outpatient hospital in this title 

11 shall be deemed to also be a reference to a critical access 

12 hospital. 

13 ‘‘Qualified Outpatient Services 

14 ‘‘(jjj) The term ‘qualified outpatient services’ means 

15 medical and other health services furnished on an out16 patient basis by a community outpatient hospital, rural 

17 health clinic (as defined in section 1861(aa)(2)), federally 

18 qualified health center (as defined in section 1861(aa)(4)), 

19 or an entity certified by the Health Resources and Services 

20 Administration as a federally qualified health center look21 alike, including, for individuals who require services from 

22 a hospital or critical access hospital, transportation serv23 ices from such community outpatient hospital to a hospital 

24 or critical access hospital.’’. 


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1 (2) PAYMENT FOR QUALIFIED OUTPATIENT

2 SERVICES.—Section 1834 of the Social Security Act 

3 (42 U.S.C. 1395m) is amended by adding at the end 

4 the following: 

5 ‘‘(r) PAYMENT FOR QUALIFIED OUTPATIENT SERV6 ICES.— 

7 ‘‘(1) IN GENERAL.—The amount of payment 

8 for qualified outpatient services is equal to 105 per9 cent of the reasonable costs of providing such serv10 ices. 

11 ‘‘(2) TELEHEALTH SERVICES AS REASONABLE

12 COSTS.—For purposes of this subsection, with re13 spect to qualified outpatient services, costs reason14 ably associated with having a backup physician 

15 available via a telecommunications system shall be 

16 considered reasonable costs.’’. 

17 (b) WAIVER OF DISTANCE REQUIREMENT FOR RE18 PLACEMENT CAHS; SUBSEQUENT REDESIGNATION OF

19 COMMUNITY OUTPATIENT HOSPITALS AS CAHS.—Sec20 tion 1820(c)(2) of the Social Security Act (42 U.S.C. 

21 1395i–4(c)(2)) is amended— 

22 (1) in subparagraph (B)(i)(I), by inserting ‘‘, 

23 subject to subparagraph (F),’’ before ‘‘is located’’; 

24 and 

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


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1 ‘‘(F) OPTION TO WAIVE DISTANCE RE2 QUIREMENT.—The State may waive the dis3 tance requirement described in subparagraph 

4 (B)(i)(I) with respect to a facility located in the 

5 State that is seeking designation as a critical 

6 access hospital under this paragraph if the total 

7 number of waivers for such facilities does not 

8 exceed the number of facilities that are critical 

9 access hospitals without such a waiver. 

10 ‘‘(G) REDESIGNATION OF A CRITICAL AC11 CESS HOSPITAL AS A COMMUNITY OUTPATIENT

12 HOSPITAL.—A community outpatient hospital 

13 may elect to be redesignated as a community 

14 outpatient hospital by notifying the Secretary at 

15 the same time and in the same manner as noti16 fications under section 1861(iii)(1)(I) if such 

17 community outpatient hospital— 

18 ‘‘(i) meets the requirements in para19 graphs (1) and (3) of section 1820(e); and 

20 ‘‘(ii) was designated as a critical ac21 cess hospital under this paragraph on the 

22 date that the Secretary first considered 

23 such community outpatient hospital to be a 

24 community outpatient hospital.’’. 

25 (c) CONFORMING AMENDMENTS.— 


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1 (1) REASONABLE COST FOR COHS.—Section 

2 1861(v)(7) of the Social Security Act (42 U.S.C. 

3 1395x(v)(7)) is amended by adding at the end the 

4 following: 

5 ‘‘(E) For additional items included in reason6 able cost for community outpatient hospitals and for 

7 determination of payment amounts for qualified out8 patient services, see section 1834(r).’’. 

9 (2) COHS AS COVERED SERVICES.—Section 

10 1832(a)(2)(H) of the Social Security Act (42 U.S.C. 

11 1395k(a)(2)(H)) is amended by inserting ‘‘and 

12 qualified outpatient services (as defined in section 

13 1861(iii)(2))’’ before the semicolon. 

14 (3) COH PAYMENTS.—Section 1833(a) of the 

15 Social Security Act (42 U.S.C. 1395l(a)) is amend16 ed— 

17 (A) in paragraph (8), by striking ‘‘; and’’; 

18 (B) in paragraph (9), by striking the pe19 riod at the end and inserting ‘‘; and’’; and 

20 (C) by inserting after paragraph (9) the 

21 following: 

22 ‘‘(10) in the case of qualified outpatient serv23 ices, the amounts described in section 1834(r).’’. 

24 (4) EFFECTIVE DATE.—The amendments made 

25 by this subsection shall apply to items and services 


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1 furnished on or after the first day of the first cal2 endar year beginning more than 1 year after the 

3 date of the enactment of this Act. 

4 (d) REPORTS.—The Secretary of Health and Human 

5 Services shall submit to Congress three reports on the im6 pact of community outpatient hospitals on the availability 

7 of health care and health outcomes in rural areas (as de8 fined in section 1886(d)(2)(D) of the Social Security Act 

9 (42 U.S.C. 1395ww(d)(2)(D)) as follows: 

10 (1) INITIAL REPORT.—An initial report ap11 proximately 2 years after the date of the enactment 

12 of this Act. 

13 (2) INTERIM REPORT.—An interim report ap14 proximately 5 years after the date of the enactment 

15 of this Act. 

16 (3) FINAL REPORT.—A final report approxi17 mately 10 years after the date of the enactment of 

18 this Act. 

19 SEC. 402. GRANT FUNDING TO ASSIST RURAL HOSPITALS. 

20 Section 330A of the Public Health Service Act (42 

21 U.S.C 254c) is amended— 

22 (1) in subsection (b)— 

23 (A) in paragraph (1), by striking ‘‘Director 

24 specified in subsection (d)’’ and inserting ‘‘Di25 rector of the Office of Rural Health Policy of 


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1 the Health Resources and Services Administra2 tion’’; 

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

4 ‘‘(6) ELIGIBLE RURAL HOSPITAL.—The term 

5 ‘eligible rural hospital’ means— 

6 ‘‘(A) a hospital (as defined in section 

7 1861(e) of the Social Security Act) that— 

8 ‘‘(i) has fewer than 50 beds; and 

9 ‘‘(ii) is located in a rural area (as de10 fined in section 1886(d)(2)(D) of such 

11 Act) or treated as being located in a rural 

12 area pursuant to section 1886(d)(8)(E) of 

13 such Act; 

14 ‘‘(B) a community outpatient hospital (as 

15 defined in section 1861(iii) of such Act); or 

16 ‘‘(C) a critical access hospital (as defined 

17 in 1861(mm) of such Act).’’; and 

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

19 ‘‘(i) QUALITY IMPROVEMENT AND COMPLIANCE

20 GRANTS FOR ELIGIBLE RURAL HOSPITALS.— 

21 ‘‘(1) GRANTS.—The Director may award grants 

22 to eligible rural hospitals to assist such hospitals 

23 with reporting on quality and to prepare such hos24 pitals to transition to value-based reimbursement. 


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•HR 3225 IH

1 ‘‘(2) APPLICATIONS.—To be eligible to receive a 

2 grant under this subsection, an eligible rural hos3 pital shall prepare and submit to the Secretary an 

4 application, at such time, in such manner, and con5 taining such information as the Secretary may re6 quire, including a description of— 

7 ‘‘(A) how the eligible rural hospital will use 

8 the funds provided under the grant; and 

9 ‘‘(B) how the project will be evaluated. 

10 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

11 There is authorized to be appropriated for each fis12 cal year (beginning with fiscal year 2017) 

13 $12,000,000 to carry out this subsection. 

14 ‘‘(j) OUTREACH GRANTS FOR RURAL HOSPITAL POP15 ULATION HEALTH.— 

16 ‘‘(1) GRANTS.—To help eligible rural hospitals 

17 meet a specific community need identified in a com18 munity needs assessment, the Director may award 

19 grants to eligible rural hospitals. 

20 ‘‘(2) LIMITATION ON SIZE OF GRANTS TO

21 COHS.—The Secretary may not award more than 

22 $650,000 each fiscal year to a community outpatient 

23 hospital that is described in subsection (b)(6)(B). 

24 ‘‘(3) APPLICATIONS.—To be eligible to receive a 

25 grant under this subsection, an eligible rural hosVerDate Sep 11 2014 03:55 Jul 29, 2015 Jkt 049200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\H3225.IH H3225

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•HR 3225 IH

1 pital shall prepare and submit to the Secretary an 

2 application, at such time, in such manner, and con3 taining such information as the Secretary may re4 quire, including— 

5 ‘‘(A) a description of how the eligible rural 

6 hospital will use the funds provided under the 

7 grant; 

8 ‘‘(B) the results of community needs as9 sessment that identified the specific community 

10 need described in paragraph (1); and 

11 ‘‘(C) a description of how the project will 

12 be evaluated. 

13 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.— 

14 There is authorized to be appropriated for each fis15 cal year (beginning with fiscal year 2017)— 

16 ‘‘(A) $15,000,000 for grants to eligible 

17 rural hospitals described in paragraphs (A) and 

18 (C) of subsection (b)(6); and 

19 ‘‘(B) $50,000,000 for grants to eligible 

20 rural hospitals described in paragraph (B) of 

21 such subsection. 

22 ‘‘(k) EMS GRANT FUNDING.— 

23 ‘‘(1) GRANTS.—The Director may award grants 

24 to eligible rural hospitals to develop and implement 

25 strategies to develop successful emergency medical 


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49 

•HR 3225 IH

1 services programs that meet community needs, pro2 vide quality care, and address workforce and funding 

3 problems. 

4 ‘‘(2) APPLICATIONS.—To be eligible to receive a 

5 grant under this subsection, an eligible rural hos6 pital shall prepare and submit to the Secretary an 

7 application, at such time, in such manner, and con8 taining such information as the Secretary may re9 quire, including a description of— 

10 ‘‘(A) how the eligible rural hospital will use 

11 the funds provided under the grant; 

12 ‘‘(B) any multistate collaborations involved 

13 in using such funds; and 

14 ‘‘(C) how the use of funds will be evalu15 ated. 

16 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— 

17 There is authorized to be appropriated for each fis18 cal year (beginning with fiscal year 2017) 

19 $2,000,000 to carry out this subsection.’’. 

20 SEC. 403. CMMI DEMONSTRATION OF SHARED SAVINGS IN 

21 RURAL HOSPITALS. 

22 Section 1115A(b)(2)(B) of the Social Security Act 

23 (42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the 

24 end the following: 


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•HR 3225 IH

1 ‘‘(xxv) Promoting greater shared sav2 ings with hospitals located in rural areas, 

3 with critical access hospitals (as defined in 

4 section 1861(mm)(1)), and with commu5 nity outpatient hospitals (as defined in sec6 tion 1861(iii)(1)).’’. 

Æ 


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