II

106TH CONGRESS

2D SESSION S. 2987

To amend title XVIII of the Social Security Act to promote access to health

care services in rural areas, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 27, 2000

Mr. ROBERTS (for himself, Mr. GRASSLEY, Mr. JEFFORDS, Mr. THOMAS, and

Mr. CONRAD) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend title XVIII of the Social Security Act to promote

access to health care services in rural areas, 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 ‘‘Rural Health Care in the 21st Century Act of 2000’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—HIGH TECHNOLOGY

Sec. 101. High technology acquisition grant and loan program.
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Sec. 102. Refinement of medicare reimbursement for telehealth services.

Sec. 103. Extension of telemedicine demonstration projects.

TITLE II—IMPROVEMENTS IN THE DISPROPORTIONATE SHARE

HOSPITAL (DSH) PROGRAM

Sec. 201. Disproportionate share hospital adjustment for rural hospitals.

TITLE III—IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL

(CAH) PROGRAM

Sec. 301. Treatment of swing-bed services furnished by critical access hospitals.

Sec. 302. Treatment of ambulance services furnished by certain critical access

hospitals.

Sec. 303. Treatment of home health services furnished by certain critical access

hospitals.

Sec. 304. Designation of a single fiscal intermediary for all critical access hospitals.

Sec. 305. Establishment of an all-inclusive payment option for outpatient critical access hospital services.

TITLE IV—OUTPATIENT SERVICES FURNISHED BY RURAL

PROVIDERS

Sec. 401. Permanent guarantee of pre-BBA payment levels for outpatient services furnished by rural hospitals.

Sec. 402. Provider-based rural health clinic cap exemption.

Sec. 403. Payment for certain physician assistant services.

Sec. 404. Exclusion of rural health clinic services from the PPS for skilled

nursing facilities.

Sec. 405. Bonus payments for rural home health agencies.

TITLE V—BAD DEBT

Sec. 501. Restoration of full payment for bad debts of qualified medicare beneficiaries.

TITLE VI—NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP

PROGRAM

Sec. 601. Exclusion of certain amounts received under the National Health

Service Corps scholarship program.

TITLE VII—TECHNICAL CORRECTIONS TO BALANCED BUDGET

REFINEMENT ACT OF 1999

Sec. 701. Extension of option to use rebased target amounts to all sole community hospitals.

Sec. 702. Payments to critical access hospitals for clinical diagnostic laboratory

tests.
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1 TITLE I—HIGH TECHNOLOGY

2 SEC. 101. HIGH TECHNOLOGY ACQUISITION GRANT AND

3 LOAN PROGRAM.

4 (a) ESTABLISHMENT OF PROGRAM.—Title III of the

5 Public Health Service Act (42 U.S.C. 241 et seq.) is

6 amended by inserting after section 330D the following:

7 ‘‘SEC. 330E. HIGH TECHNOLOGY ACQUISITION GRANT AND

8 LOAN PROGRAM.

9 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Sec10 retary, acting through the Director of the Office of Rural

11 Health Policy (of the Health Resources and Services Ad12 ministration), shall establish a High Technology Acquisi13 tion Grant and Loan Program for the purpose of—

14 ‘‘(1) improving the quality of health care in

15 rural areas through the acquisition of advanced med16 ical technology;

17 ‘‘(2) fostering the development the networks de18 scribed in section 330D(c);

19 ‘‘(3) promoting resource sharing between urban

20 and rural facilities; and

21 ‘‘(4) improving patient safety and outcomes

22 through the acquisition of high technology, including

23 software, information services, and staff training.

24 ‘‘(b) GRANTS AND LOANS.—Under the program es25 tablished under subsection (a), the Secretary, acting
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1 through the Director of the Office of Rural Health Policy,

2 may award grants and make loans to any eligible entity

3 (as defined in subsection (d)(1)) for any costs incurred

4 by the eligible entity in acquiring eligible equipment and

5 services (as defined in subsection (d)(2)).

6 ‘‘(c) LIMITATIONS.—

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

8 the total amount of grants and loans made under

9 this section to an eligible entity may not exceed

10 $100,000.

11 ‘‘(2) FEDERAL SHARING.—

12 ‘‘(A) GRANTS.—The amount of any grant

13 awarded under this section may not exceed 70

14 percent of the costs to the eligible entity in ac15 quiring eligible equipment and services.

16 ‘‘(B) LOANS.—The amount of any loan

17 made under this section may not exceed 90 per18 cent of the costs to the eligible entity in acquir19 ing eligible equipment and services.

20 ‘‘(d) DEFINITIONS.—In this section:

21 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en22 tity’ means a hospital, health center, or any other

23 entity that the Secretary determines is appropriate

24 that is located in a rural area or region.
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1 ‘‘(2) ELIGIBLE EQUIPMENT AND SERVICES.—

2 The term ‘eligible equipment and services’

3 includes—

4 ‘‘(A) unit dose distribution systems;

5 ‘‘(B) software and information services and

6 staff training;

7 ‘‘(C) wireless devices to transmit medical

8 orders;

9 ‘‘(D) clinical health care informatics sys10 tems, including bar code systems designed to

11 avoid medication errors and patient tracking

12 systems; and

13 ‘‘(E) any other technology that improves

14 the quality of health care provided in rural

15 areas.

16 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

17 purpose of carrying out this section there are authorized

18 to be appropriated such sums as may be necessary for

19 each of the fiscal years 2001 through 2006.’’.

20 SEC. 102. REFINEMENT OF MEDICARE REIMBURSEMENT

21 FOR TELEHEALTH SERVICES.

22 (a) REVISION OF TELEHEALTH PAYMENT METHOD23 OLOGY AND ELIMINATION OF FEE-SHARING REQUIRE24 MENT.—Section 4206(b) of the Balanced Budget Act of
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1 1997 (42 U.S.C. 1395l note) is amended to read as fol2 lows:

3 ‘‘(b) METHODOLOGY FOR DETERMINING AMOUNT OF

4 PAYMENTS.—

5 ‘‘(1) IN GENERAL.—The Secretary shall pay

6 to—

7 ‘‘(A) the physician or practitioner at a dis8 tant site that provides an item or service under

9 subsection (a) an amount equal to the amount

10 that such physician or provider would have been

11 paid had the item or service been provided with12 out the use of a telecommunications system;

13 and

14 ‘‘(B) the originating site a facility fee for

15 facility services furnished in connection with

16 such item or service.

17 ‘‘(2) APPLICATION OF PART B COINSURANCE

18 AND DEDUCTIBLE.—Any payment made under this

19 section shall be subject to the coinsurance and de20 ductible requirements under subsections (a)(1) and

21 (b) of section 1833 of the Social Security Act (42

22 U.S.C. 1395l).

23 ‘‘(3) DEFINITIONS.—In this subsection:

24 ‘‘(A) DISTANT SITE.—The term ‘distant

25 site’ means the site at which the physician or
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1 practitioner is located at the time the item or

2 service is provided via a telecommunications

3 system.

4 ‘‘(B) FACILITY FEE.—The term ‘facility

5 fee’ means an amount equal to—

6 ‘‘(i) for 2000 and 2001, $20; and

7 ‘‘(ii) for a subsequent year, the facil8 ity fee under this subsection for the pre9 vious year increased by the percentage in10 crease in the MEI (as defined in section

11 1842(i)(3)) for such subsequent year.

12 ‘‘(C) ORIGINATING SITE.—

13 ‘‘(i) IN GENERAL.—The term ‘origi14 nating site’ means the site described in

15 clause (ii) at which the eligible telehealth

16 beneficiary under the medicare program is

17 located at the time the item or service is

18 provided via a telecommunications system.

19 ‘‘(ii) SITES DESCRIBED.—The sites

20 described in this paragraph are as follows:

21 ‘‘(I) On or before January 1,

22 2002, the office of a physician or a

23 practitioner, a critical access hospital,

24 a rural health clinic, and a Federally

25 qualified health center.
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1 ‘‘(II) On or before January 1,

2 2003, the sites described in subclause

3 (I), a hospital, a skilled nursing facil4 ity, a comprehensive outpatient reha5 bilitation facility, a renal dialysis facil6 ity, an ambulatory surgical center, an

7 Indian Health Service facility, and a

8 community mental health center.’’.

9 (b) ELIMINATION OF REQUIREMENT FOR TELEPRE10 SENTER.—Section 4206 of the Balanced Budget Act of

11 1997 (42 U.S.C. 1395l note) is amended—

12 (1) in subsection (a), by striking ‘‘, notwith13 standing that the individual physician’’ and all that

14 follows before the period at the end; and

15 (2) by adding at the end the following new sub16 section:

17 ‘‘(e) TELEPRESENTER NOT REQUIRED.—Nothing in

18 this section shall be construed as requiring an eligible tele19 health beneficiary to be presented by a physician or practi20 tioner for the provision of an item or service via a tele21 communications system.’’.

22 (c) REIMBURSEMENT FOR MEDICARE BENE23 FICIARIES WHO DO NOT RESIDE IN A HPSA.—Section

24 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C.

25 1395l note), as amended by subsection (b), is amended—
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1 (1) by striking ‘‘IN GENERAL.—Not later than’’

2 and inserting the following: ‘‘TELEHEALTH SERV3 ICES REIMBURSED.—

4 ‘‘(1) IN GENERAL.—Not later than’’;

5 (2) by striking ‘‘furnishing a service for which

6 payment’’ and all that follows before the period and

7 inserting ‘‘to an eligible telehealth beneficiary’’; and

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

9 paragraph:

10 ‘‘(2) ELIGIBLE TELEHEALTH BENEFICIARY DE11 FINED.—In this section, the term ‘eligible telehealth

12 beneficiary’ means a beneficiary under the medicare

13 program under title XVIII of the Social Security Act

14 (42 U.S.C. 1395 et seq.) that resides in—

15 ‘‘(A) an area that is designated as a health

16 professional shortage area under section

17 332(a)(1)(A) of the Public Health Service Act

18 (42 U.S.C. 254e(a)(1)(A));

19 ‘‘(B) a county that is not included in a

20 Metropolitan Statistical Area;

21 ‘‘(C) an inner-city area that is medically

22 underserved (as defined in section 330(b)(3) of

23 the Public Health Service Act (42 U.S.C.

24 254b(b)(3))); or
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1 ‘‘(D) an area in which there is a Federal

2 telemedicine demonstration program.’’.

3 (d) TELEHEALTH COVERAGE FOR DIRECT PATIENT

4 CARE.—

5 (1) IN GENERAL.—Section 4206 of the Bal6 anced Budget Act of 1997 (42 U.S.C. 1395l note),

7 as amended by subsection (c), is amended—

8 (A) in subsection (a)(1), by striking ‘‘pro9 fessional consultation via telecommunications

10 systems with a physician’’ and inserting ‘‘items

11 and services for which payment may be made

12 under such part that are furnished via a tele13 communications system by a physician’’; and

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

15 subsection:

16 ‘‘(f) COVERAGE OF ITEMS AND SERVICES.—Payment

17 for items and services provided pursuant to subsection (a)

18 shall include payment for professional consultations, office

19 visits, office psychiatry services, including any service

20 identified as of July 1, 2000, by HCPCS codes 99241–

21 99275, 99201–99215, 90804–90815, and 90862, and any

22 additional item or service specified by the Secretary.’’.

23 (2) STUDY AND REPORT REGARDING ADDI24 TIONAL ITEMS AND SERVICES.—
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1 (A) STUDY.—The Secretary of Health and

2 Human Services shall conduct a study to iden3 tify items and services in addition to those de4 scribed in section 4206(f) of the Balanced

5 Budget Act of 1997 (as added by paragraph

6 (1)) that would be appropriate to provide pay7 ment under title XVIII of the Social Security

8 Act (42 U.S.C. 1395 et seq.).

9 (B) REPORT.—Not later than 2 years after

10 the date of enactment of this Act, the Secretary

11 shall submit a report to Congress on the study

12 conducted under subparagraph (A) together

13 with such recommendations for legislation that

14 the Secretary determines are appropriate.

15 (e) ALL PHYSICIANS AND PRACTITIONERS ELIGIBLE

16 FOR TELEHEALTH REIMBURSEMENT.—Section 4206(a)

17 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l

18 note), as amended by subsection (d), is amended—

19 (1) in paragraph (1), by striking ‘‘(described in

20 section 1842(b)(18)(C) of such Act (42 U.S.C.

21 1395u(b)(18)(C))’’; and

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

23 paragraph:

24 ‘‘(3) PRACTITIONER DEFINED.—For purposes

25 of paragraph (1), the term ‘practitioner’ includes—
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1 ‘‘(A) a practitioner described in section

2 1842(b)(18)(C) of the Social Security Act (42

3 U.S.C. 1395u(b)(18)(C)); and

4 ‘‘(B) a physical, occupational, or speech

5 therapist.’’.

6 (f) TELEHEALTH SERVICES PROVIDED USING

7 STORE-AND-FORWARD TECHNOLOGIES.—Section

8 4206(a)(1) of the Balanced Budget Act of 1997 (42

9 U.S.C. 1395l note), as amended by subsection (e), is

10 amended by adding at the end the following new para11 graph:

12 ‘‘(4) USE OF STORE-AND-FORWARD TECH13 NOLOGIES.—For purposes of paragraph (1), in the

14 case of any Federal telemedicine demonstration pro15 gram in Alaska or Hawaii, the term ‘telecommuni16 cations system’ includes store-and-forward tech17 nologies that provide for the asynchronous trans18 mission of health care information in single or multi19 media formats.’’.

20 (g) CONSTRUCTION RELATING TO HOME HEALTH

21 SERVICES.—Section 4206(a) of the Balanced Budget Act

22 of 1997 (42 U.S.C. 1395l note), as amended by subsection

23 (f), is amended by adding at the end the following new

24 paragraph:
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1 ‘‘(5) CONSTRUCTION RELATING TO HOME

2 HEALTH SERVICES.—

3 ‘‘(A) IN GENERAL.—Nothing in this sec4 tion or in section 1895 of the Social Security

5 Act (42 U.S.C. 1395fff) shall be construed as

6 preventing a home health agency that is receiv7 ing payment under the prospective payment

8 system described in such section from fur9 nishing a home health service via a tele10 communications system.

11 ‘‘(B) LIMITATION.—The Secretary shall

12 not consider a home health service provided in

13 the manner described in subparagraph (A) to

14 be a home health visit for purposes of—

15 ‘‘(i) determining the amount of pay16 ment to be made under the prospective

17 payment system established under section

18 1895 of the Social Security Act (42 U.S.C.

19 1395fff); or

20 ‘‘(ii) any requirement relating to the

21 certification of a physician required under

22 section 1814(a)(2)(C) of such Act (42

23 U.S.C. 1395f(a)(2)(C)).’’.
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1 (h) EFFECTIVE DATE.—The amendments made by

2 this Act shall apply to items and services provided on or

3 after the date of enactment of this Act.

4 SEC. 103. EXTENSION OF TELEMEDICINE DEMONSTRATION

5 PROJECTS.

6 The Secretary of Health and Human Services shall

7 maintain through September 30, 2003, the grant and

8 operational phases of any telemedicine demonstration

9 project conducted under the medicare program under title

10 XVIII of the Social Security Act (42 U.S.C. 1395 et

11 seq.)—

12 (1) for which funds were expended before the

13 date of enactment of the Balanced Budget Act of

14 1997 (Public Law 105–133; 111 Stat. 251); and

15 (2) that is ongoing as of the date of enactment

16 of this Act.

17 TITLE II—IMPROVEMENTS IN

18 THE DISPROPORTIONATE

19 SHARE HOSPITAL (DSH) PRO20 GRAM

21 SEC. 201. DISPROPORTIONATE SHARE HOSPITAL ADJUST22 MENT FOR RURAL HOSPITALS.

23 (a) APPLICATION OF UNIFORM 15 PERCENT

24 THRESHOLD.—Section 1886(d)(5)(F)(v) of the Social Se25 curity Act (42 U.S.C. 1395ww(d)(5)(F)(v)) is amended by
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1 striking ‘‘exceeds—’’ and all that follows and inserting

2 ‘‘exceeds 15 percent.’’.

3 (b) CHANGE IN PAYMENT PERCENTAGE FOR4 MULAS.—Section 1886(d)(5)(F) of the Social Security Act

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

6 (1) in clause (iv), by striking ‘‘and that—’’ and

7 all that follows and inserting ‘‘is equal to the per8 centage determined in accordance with the applica9 ble formula described in clause (vii).’’;

10 (2) in clause (vii), by striking ‘‘clause (iv)(I)’’

11 and inserting ‘‘clause (iv)’’; and

12 (3) by striking clause (viii) and inserting the

13 following new clause:

14 ‘‘(viii) No hospital described in clause (iv) may re15 ceive a payment amount under this section that is less

16 than the payment amount that would have been made

17 under this section if the amendments made by section 201

18 of the Rural Health Care in the 21st Century Act of 2000

19 had not been enacted.’’.

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

21 this section apply to discharges occurring on or after Octo22 ber 1, 2000.
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1 TITLE III—IMPROVEMENTS IN

2 THE CRITICAL ACCESS HOS3 PITAL (CAH) PROGRAM

4 SEC. 301. TREATMENT OF SWING-BED SERVICES FUR5 NISHED BY CRITICAL ACCESS HOSPITALS.

6 (a) EXEMPTION FROM SNF PPS.—Section

7 1888(e)(7) of the Social Security Act (42 U.S.C.

8 1395yy(e)(7)) is amended—

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

10 FOR’’ and inserting ‘‘TREATMENT OF’’;

11 (2) in subparagraph (A), by striking ‘‘IN GEN12 ERAL.—The’’ and inserting ‘‘TRANSITION.—Except

13 as provided in subparagraph (C), the’’;

14 (3) in subparagraph (B), by striking ‘‘, for

15 which’’ and all that follows before the period at the

16 end and inserting ‘‘(other than critical access hos17 pitals)’’; and

18 (4) by adding at the end the following new sub19 paragraph:

20 ‘‘(C) CRITICAL ACCESS HOSPITALS.—In

21 the case of facilities described in subparagraph

22 (B) that are critical access hospitals—

23 ‘‘(i) the prospective payment system

24 established under this subsection shall not
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1 apply to services furnished pursuant to an

2 agreement described in section 1883; and

3 ‘‘(ii) such services shall be paid on the

4 basis specified in subsection (a)(3) of such

5 section.’’.

6 (b) PAYMENT BASIS FOR SWING-BED SERVICES

7 FURNISHED BY CRITICAL ACCESS HOSPITALS.—Section

8 1883(a) of the Social Security Act (42 U.S.C. 1395tt(a))

9 is amended—

10 (1) in paragraph (2)(A), by inserting ‘‘(other

11 than a critical access hospital)’’ after ‘‘any hospital’’;

12 and

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

14 paragraph:

15 ‘‘(3) Notwithstanding any other provision of

16 this title, a critical access hospital shall be paid for

17 services furnished under an agreement entered into

18 under this section on the basis of the reasonable

19 costs of such services (as determined under section

20 1861(v)).’’.

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

22 this section shall apply to cost reporting periods beginning

23 on or after October 1, 1999.
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1 SEC. 302. TREATMENT OF AMBULANCE SERVICES FUR2 NISHED BY CERTAIN CRITICAL ACCESS HOS3 PITALS.

4 (a) EXEMPTION FROM AMBULANCE FEE SCHED5 ULE.—

6 (1) IN GENERAL.—Section 1834(l) of the Social

7 Security Act (42 U.S.C. 1395m(l)) is amended by

8 adding at the end the following new paragraph:

9 ‘‘(8) INAPPLICABILITY OF FEE SCHEDULE TO

10 CERTAIN SERVICES.—In the case of ambulance serv11 ices (described in section 1861(s)(7)) that are pro12 vided in a locality by a critical access hospital that

13 is the only provider of ambulance services in the lo14 cality, or by an entity that is owned and operated by

15 such a critical access hospital—

16 ‘‘(A) the fee schedule established under

17 this subsection shall not apply; and

18 ‘‘(B) payment under this part shall be paid

19 on the basis of the reasonable costs incurred in

20 providing such services.’’.

21 (2) CONFORMING AMENDMENTS.—Section

22 1833(a)(1) of the Social Security Act (42 U.S.C.

23 1395l(a)(1)) is amended—

24 (A) in subparagraph (R)—
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1 (i) by inserting ‘‘except as provided in

2 subparagraph (T),’’ before ‘‘with respect’’;

3 and

4 (ii) by striking ‘‘and’’ at the end; and

5 (B) in subparagraph (S), by striking the

6 semicolon at the end and inserting ‘‘, and (T)

7 with respect to ambulance services described in

8 section 1834(l)(8), the amount paid shall be 80

9 percent of the lesser of the actual charge for

10 the services or the amount determined under

11 such section;’’.

12 (3) EFFECTIVE DATE.—The amendments made

13 by this subsection shall apply to cost reporting peri14 ods beginning on or after October 1, 1999.

15 (b) EXEMPTION FROM REASONABLE COST REDUC16 TIONS.—

17 (1) EXEMPTION.—Section 1861(v)(1)(U) of the

18 Social Security Act (42 U.S.C. 1395x(v)(1)(U)) is

19 amended by inserting after the first sentence the fol20 lowing new sentence: ‘‘The reductions required by

21 the preceding sentence shall not apply in the case of

22 ambulance services that are provided in a locality on

23 or after October 1, 1999, by a critical access hos24 pital that is the only provider of ambulance services
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1 in the locality, or by an entity that is owned and op2 erated by such a critical access hospital.’’.

3 (2) TECHNICAL AMENDMENT.—Section

4 1861(v)(1) of the Social Security Act (42 U.S.C.

5 1395x(v)(1)) is amended by realigning subparagraph

6 (U) so as to align the left margin of such subpara7 graph with the left margin of subparagraph (T).

8 SEC. 303. TREATMENT OF HOME HEALTH SERVICES FUR9 NISHED BY CERTAIN CRITICAL ACCESS HOS10 PITALS.

11 (a) EXEMPTION FROM HOME HEALTH INTERIM

12 PAYMENT SYSTEM.—Section 1861(v)(1)(L) of the Social

13 Security Act (42 U.S.C. 1395x(v)(1)(L)) is amended by

14 adding at the end the following new clause:

15 ‘‘(xi) The preceding provisions of this

16 subparagraph shall not apply to home

17 health services that are furnished on or

18 after October 1, 2000, by a home health

19 agency that is—

20 ‘‘(I) the only home health agency

21 serving a locality; and

22 ‘‘(II) owned and operated by a

23 critical access hospital.’’.

24 (b) EXEMPTION FROM PPS.—
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1 (1) IN GENERAL.—Section 1895 of the Social

2 Security Act (42 U.S.C. 1395fff) is amended by

3 adding at the end the following new subsection:

4 ‘‘(e) EXEMPTION.—The prospective payment system

5 established under this section shall not apply in deter6 mining payments for home health services furnished by

7 a home health agency that is—

8 ‘‘(1) the only home health agency serving a lo9 cality; and

10 ‘‘(2) owned and operated by a critical access

11 hospital.’’.

12 (2) CONFORMING AMENDMENT.—Section

13 1833(a)(2)(A) of the Social Security Act (42 U.S.C.

14 1395(a)(2)(A)) is amended by inserting ‘‘home

15 health services described in section 1895(e) and

16 other than’’ after ‘‘other than’’.

17 (3) TECHNICAL AMENDMENT.—Section

18 1833(a)(2)(A) of the Social Security Act (42 U.S.C.

19 1395(a)(2)(A)) is amended by striking ‘‘drug) (as

20 defined in section 1861(kk))’’ and inserting ‘‘drug

21 (as defined in section 1861(kk)))’’.

22 (4) EFFECTIVE DATE.—The amendments made

23 by this subsection shall apply to cost reporting peri24 ods beginning on or after October 1, 2000.
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1 SEC. 304. DESIGNATION OF A SINGLE FISCAL INTER2 MEDIARY FOR ALL CRITICAL ACCESS HOS3 PITALS.

4 Section 1816 of the Social Security Act (42 U.S.C.

5 1395h) is amended by adding at the end the following:

6 ‘‘(m) Not later than October 1, 2000, the Secretary

7 shall designate a national agency or organization with an

8 agreement under this section to perform functions under

9 the agreement with respect to each critical access hospital

10 electing to have such functions performed by such agency

11 or organization.’’.

12 SEC. 305. ESTABLISHMENT OF AN ALL-INCLUSIVE PAYMENT

13 OPTION FOR OUTPATIENT CRITICAL ACCESS

14 HOSPITAL SERVICES.

15 (a) ALL-INCLUSIVE PAYMENT OPTION FOR OUT16 PATIENT CRITICAL ACCESS HOSPITAL SERVICES.—Sec17 tion 1834(g) of the Social Security Act (42 U.S.C.

18 1395m(g)) is amended—

19 (1) by striking paragraph (1) and inserting the

20 following new paragraph:

21 ‘‘(1) ELECTION OF CAH.—At the election of a

22 critical access hospital, the amount of payment for

23 outpatient critical access hospital services under this

24 part shall be determined under paragraph (2) or (3),

25 such amount determined under either paragraph
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1 without regard to the amount of the customary or

2 other charge.’’; and

3 (2) by striking paragraph (3) and inserting the

4 following new paragraph:

5 ‘‘(3) ALL-INCLUSIVE RATE.—If a critical access

6 hospital elects this paragraph to apply, with respect

7 to both facility services and professional services,

8 there shall be paid amounts equal to the reasonable

9 costs of the critical access hospital in providing such

10 services (except that in the case of clinical diagnostic

11 laboratory services furnished by a critical access hos12 pital the amount of payment shall be equal to 100

13 percent of the reasonable costs of the critical access

14 hospital in providing such services), less the amount

15 that such hospital may charge as described in sec16 tion 1866(a)(2)(A).’’.

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

18 subparagraph (a) shall take effect as if included in the

19 enactment of section 403(d) of the Medicare, Medicaid,

20 and SCHIP Balanced Budget Refinement Act of 1999

21 (113 Stat. 1501A–371), as enacted into law by section

22 1000(a)(6) of Public Law 106–113.
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1 TITLE IV—OUTPATIENT SERV2 ICES FURNISHED BY RURAL

3 PROVIDERS

4 SEC. 401. PERMANENT GUARANTEE OF PRE-BBA PAYMENT

5 LEVELS FOR OUTPATIENT SERVICES FUR6 NISHED BY RURAL HOSPITALS.

7 (a) IN GENERAL.—Section 1833(t)(7)(D) of the So8 cial Security Act (42 U.S.C. 1395l(t)(7)(D)), as added by

9 section 202 of the Medicare, Medicaid, and SCHIP Bal10 anced Budget Refinement Act of 1999 (113 Stat. 1501A–

11 342), as enacted into law by section 1000(a)(6) of Public

12 Law 106–113, is amended to read as follows:

13 ‘‘(D) HOLD HARMLESS PROVISIONS FOR

14 SMALL RURAL HOSPITALS AND CANCER HOS15 PITALS.—In the case of a hospital located in a

16 rural area and that has not more than 100 beds

17 or a hospital described in section

18 1886(d)(1)(B)(v), for covered OPD services for

19 which the PPS amount is less than the pre20 BBA amount, the amount of payment under

21 this subsection shall be increased by the

22 amount of such difference.’’.

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

24 subsection (a) shall take effect as if included in the enact25 ment of section 202 of the Medicare, Medicaid, and
25

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1 SCHIP Balanced Budget Refinement Act of 1999 (113

2 Stat. 1501A–342), as enacted into law by section

3 1000(a)(6) of Public Law 106–113.

4 SEC. 402. PROVIDER-BASED RURAL HEALTH CLINIC CAP

5 EXEMPTION.

6 (a) IN GENERAL.—The matter in section 1833(f) of

7 the Social Security Act (42 U.S.C. 1395l(f)) preceding

8 paragraph (1) is amended by striking ‘‘with less than 50

9 beds’’ and inserting ‘‘with an average daily patient census

10 that does not exceed 50’’.

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

12 subparagraph (A) applies to services furnished on or after

13 January 1, 2001.

14 SEC. 403. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

15 SERVICES.

16 (a) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

17 SERVICES.—Section 1842(b)(6)(C) of the Social Security

18 Act (42 U.S.C. 1395u(b)(6)(C)) is amended by striking

19 ‘‘for such services provided before January 1, 2003,’’.

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

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

22 of this Act.
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1 SEC. 404. EXCLUSION OF RURAL HEALTH CLINIC SERVICES

2 FROM THE PPS FOR SKILLED NURSING FA3 CILITIES.

4 (a) IN GENERAL.—Section 1888(e)(2)(A)(ii) of the

5 Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is

6 amended by inserting after the first sentence the fol7 lowing: ‘‘Services described in this clause also include serv8 ices that are provided by a physician, a physician assist9 ant, a nurse practitioner, a certified nurse midwife, or a

10 qualified psychologist who is employed, or otherwise under

11 contract, with a rural health clinic.’’.

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

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

14 January 1, 2001.

15 SEC. 405. BONUS PAYMENTS FOR RURAL HOME HEALTH

16 AGENCIES.

17 (a) INCREASE IN PAYMENT RATES FOR RURAL

18 AGENCIES.—

19 (1) IN GENERAL.—Section 1895(b) of the So20 cial Security Act (42 U.S.C. 1395fff(b)) is amended

21 by adding at the end the following new paragraph:

22 ‘‘(7) ADDITIONAL PAYMENT AMOUNT FOR

23 SERVICES FURNISHED IN RURAL AREAS.—In the

24 case of home health services furnished in a rural

25 area (as defined in section 1886(d)(2)(D)), the Sec26 retary shall provide for an addition or adjustment to
27

•S 2987 IS

1 the payment amount otherwise made under this sec2 tion for services furnished in a rural area in an

3 amount equal to 10 percent of the amount otherwise

4 determined under this subsection.’’.

5 (2) WAIVING BUDGET NEUTRALITY.—Section

6 1895(b)(3) of such Act (42 U.S.C. 1395fff(b)(3)) is

7 amended by adding at the end the following new

8 subparagraph:

9 ‘‘(D) NO ADJUSTMENT FOR ADDITIONAL

10 PAYMENTS FOR RURAL SERVICES.—The Sec11 retary shall not reduce the standard prospective

12 payment amount (or amounts) under this para13 graph applicable to home health services fur14 nished during a period to offset the increase in

15 payments resulting from the application of

16 paragraph (7) (relating to services furnished in

17 rural areas).’’.

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

19 subsection (a) shall apply to episodes of care beginning

20 on or after April 1, 2001.
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1 TITLE V—BAD DEBT

2 SEC. 501. RESTORATION OF FULL PAYMENT FOR BAD

3 DEBTS OF QUALIFIED MEDICARE BENE4 FICIARIES.

5 (a) MEDICARE COST-SHARING UNCOLLECTIBLE AND

6 NOT COVERED BY MEDICAID STATE PLANS.—Section

7 1902(n)(3)(B) of the Social Security Act (42 U.S.C.

8 1396a(n)(3)(B)) is amended—

9 (1) by inserting ‘‘(i)’’ after ‘‘(B)’’; and

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

11 clause:

12 ‘‘(ii) the amount of medicare cost-sharing that

13 is uncollectible from the beneficiary because of

14 clause (i) and that is not paid by any other indi15 vidual or entity shall be deemed to be bad debt for

16 purposes of title XVIII; and’’.

17 (b) RECOGNITION OF 100 PERCENT OF BAD

18 DEBT.—

19 (1) NONAPPLICATION OF REDUCTION.—Section

20 1861(v)(1)(T) of the Social Security Act (42 U.S.C.

21 1395x(v)(1)(T)) is amended by inserting ‘‘(other

22 than any amount deemed to be bad debt under sec23 tion 1902(n)(3)(B)(ii))’’ after ‘‘amounts under this

24 title’’.
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1 (2) RECOGNITION WITH RESPECT TO CER2 TIFIED NURSE ANESTHETISTS, NURSE PRACTI3 TIONERS, AND CLINICAL NURSE SPECIALISTS.—Sec4 tion 1833 of the Social Security Act (42 U.S.C.

5 1395l) is amended—

6 (A) in subsection (l)(5)(B), by striking

7 ‘‘No hospital’’ and inserting ‘‘Except as pro8 vided in section 1902(n)(3)(B)(ii), no hospital’’;

9 and

10 (B) in subsection (r)(2), by striking ‘‘No

11 hospital’’ and inserting ‘‘Except as provided in

12 section 1902(n)(3)(B)(ii), no hospital’’.

13 (c) TECHNICAL AMENDMENT.—Section

14 1861(v)(1)(T) of the Social Security Act (42 U.S.C.

15 1395x(v)(1)(T)) is amended by striking ‘‘1833(t)(5)(B)’’

16 and inserting ‘‘1833(t)(8)(B)’’ in the matter preceding

17 clause (i).

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

19 this section shall apply to bad debt incurred on or after

20 the date of enactment of this Act.
30

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1 TITLE VI—NATIONAL HEALTH

2 SERVICE CORPS SCHOLAR3 SHIP PROGRAM

4 SEC. 601. EXCLUSION OF CERTAIN AMOUNTS RECEIVED

5 UNDER THE NATIONAL HEALTH SERVICE

6 CORPS SCHOLARSHIP PROGRAM.

7 (a) IN GENERAL.—Section 117(c) of the Internal

8 Revenue Code of 1986 (relating to the exclusion from

9 gross income amounts received as a qualified scholarship)

10 is amended—

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

12 the following:

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), subsections (a)’’; and

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

16 paragraph:

17 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

18 apply to any amount received by an individual under

19 the National Health Service Corps Scholarship Pro20 gram under section 338A(g)(1)(A) of the Public

21 Health Service Act.’’.

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

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

24 years beginning after December 31, 1994.
31

•S 2987 IS

1 TITLE VII—TECHNICAL CORREC2 TIONS TO BALANCED BUDGET

3 REFINEMENT ACT OF 1999

4 SEC. 701. EXTENSION OF OPTION TO USE REBASED TARGET

5 AMOUNTS TO ALL SOLE COMMUNITY HOS6 PITALS.

7 (a) IN GENERAL.—Section 1886(b)(3)(I)(i) of the

8 Social Security Act (42 U.S.C. 1395ww(b)(3)(I)(i)) (as

9 added by section 405 of the Medicare, Medicaid, and

10 SCHIP Balanced Budget Refinement Act of 1999 (113

11 Stat. 1501A–372), as enacted into law by section

12 1000(a)(6) of Public Law 106–113) is amended—

13 (1) in the matter preceding subclause (I)—

14 (A) by striking ‘‘for its cost reporting pe15 riod beginning during 1999 is paid on the basis

16 of the target amount applicable to the hospital

17 under subparagraph (C) and that’’; and

18 (B) by striking ‘‘such target amount’’ and

19 inserting ‘‘the amount otherwise determined

20 under subsection (d)(5)(D)(i)’’;

21 (2) in subclause (I), by striking ‘‘target amount

22 otherwise applicable’’ and all that follows through

23 ‘‘target amount’)’’ and inserting ‘‘the amount other24 wise applicable to the hospital under subsection
32

•S 2987 IS

1 (d)(5)(D)(i) (referred to in this clause as the ‘sub2 section (d)(5)(D)(i) amount’)’’; and

3 (3) in each of subclauses (II) and (III), by

4 striking ‘‘subparagraph (C) target amount’’ and in5 serting ‘‘subsection (d)(5)(D)(i) amount’’.

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

7 this section shall take effect as if included in the enact8 ment of the Medicare, Medicaid, and SCHIP Balanced

9 Budget Refinement Act of 1999, as enacted into law by

10 section 1000(a)(6) of Public Law 106–113.

11 SEC. 702. PAYMENTS TO CRITICAL ACCESS HOSPITALS FOR

12 CLINICAL DIAGNOSTIC LABORATORY TESTS.

13 (a) PAYMENT ON COST BASIS WITHOUT BENE14 FICIARY COST-SHARING.—

15 (1) IN GENERAL.—Section 1833(a)(6) of the

16 Social Security Act (42 U.S.C. 1395l(a)(6)) is

17 amended by inserting ‘‘(including clinical diagnostic

18 laboratory services furnished by a critical access hos19 pital)’’ after ‘‘outpatient critical access hospital serv20 ices’’.

21 (2) NO BENEFICIARY COST-SHARING.—

22 (A) IN GENERAL.—Section 1834(g) of the

23 Social Security Act (42 U.S.C. 1395m(g)) is

24 amended by inserting ‘‘(except that in the case

25 of clinical diagnostic laboratory services fur-
33

•S 2987 IS

1 nished by a critical access hospital the amount

2 of payment shall be equal to 100 percent of the

3 reasonable costs of the critical access hospital

4 in providing such services)’’ before the period at

5 the end.

6 (B) BBRA AMENDMENT.—Section 1834(g)

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

8 1395m(g)) is amended—

9 (i) in paragraph (1), by inserting

10 ‘‘(except that in the case of clinical diag11 nostic laboratory services furnished by a

12 critical access hospital the amount of pay13 ment shall be equal to 100 percent of the

14 reasonable costs of the critical access hos15 pital in providing such services)’’ after

16 ‘‘such services,’’; and

17 (ii) in paragraph (2)(A), by inserting

18 ‘‘(except that in the case of clinical diag19 nostic laboratory services furnished by a

20 critical access hospital the amount of pay21 ment shall be equal to 100 percent of the

22 reasonable costs of the critical access hos23 pital in providing such services)’’ before

24 the period at the end.
34

•S 2987 IS

1 (b) CONFORMING AMENDMENTS.—Paragraphs

2 (1)(D)(i) and (2)(D)(i) of section 1833(a) of the Social

3 Security Act (42 U.S.C. 1395l(a)(1)(D)(i);

4 1395l(a)(2)(D)(i)) are each amended by striking ‘‘or

5 which are furnished on an outpatient basis by a critical

6 access hospital’’.

7 (c) TECHNICAL AMENDMENT.—Section 403(d)(2) of

8 the Medicare, Medicaid, and SCHIP Balanced Budget Re9 finement Act of 1999 (113 Stat. 1501A–371), as enacted

10 into law by section 1000(a)(6) of Public Law 106–113,

11 is amended by striking ‘‘subsection (a)’’ and inserting

12 ‘‘paragraph (1)’’.

13 (d) EFFECTIVE DATES.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), the amendments made by this section

16 shall apply to services furnished on or after Novem17 ber 29, 1999.

18 (2) BBRA AND TECHNICAL AMENDMENTS.—

19 The amendments made by subsections (a)(2)(B) and

20 (c) shall take effect as if included in the enactment

21 of section 403(d) of the Medicare, Medicaid, and

22 SCHIP Balanced Budget Refinement Act of 1999

23 (113 Stat. 1501A–371), as enacted into law by sec24 tion 1000(a)(6) of Public Law 106–113.

Æ