II 

114TH CONGRESS 

1ST SESSION S. 1648 

To amend title XVIII of the Social Security Act to create a sustainable 

future for rural healthcare. 

IN THE SENATE OF THE UNITED STATES 

JUNE 23, 2015 

Mr. GRASSLEY (for himself and Mr. GARDNER) 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 create 

a sustainable future for rural healthcare. 

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. 

4 This Act may be cited as the ‘‘Rural Emergency 

5 Acute Care Hospital Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) According to the University of North Caro9 lina’s Center for Health Services Research, 55 rural 


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1 hospitals have closed in the Unites States since Jan2 uary 2010. 

3 (2) In 2014, iVantage conducted a study for 

4 the National Rural Health Association and found 

5 283 hospitals at risk of closure based upon perform6 ance indicators that matched those facilities already 

7 forced to close in this decade. 

8 (3) Researchers at the University of North 

9 Carolina identified inpatient volume as a substantial 

10 contributing factor to the financial performance of 

11 rural hospitals, with many of the at-risk hospitals 

12 having an average daily bed census of less than 2. 

13 (4) Adverse impacts to the local economy and 

14 the loss of timely access to emergency medical care 

15 are 2 major effects of rural hospital closures. 

16 (5) According to the National Center for Rural 

17 Health Works, the typical rural hospital creates over 

18 140 jobs and generates $6,800,000 in compensation 

19 while serving an average population of 14,600. 

20 (6) The 2014 iVantage study estimates that the 

21 283 at-risk hospitals could result in the loss of 

22 36,000 health care jobs, 50,000 community jobs, 

23 and $10,600,000,000 in gross domestic product. 

24 (7) Time is the most critical factor for achiev25 ing successful outcomes in emergency medicine, and 


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1 emergency medical clinicians refer to the time-sen2 sitive period during which successful outcomes may 

3 be best achieved as the ‘‘golden hour’’. 

4 (8) The National Conference of State Legisla5 tures states that 60 percent of trauma deaths in the 

6 United States occur in rural areas, where only 15 

7 percent of the population is represented. 

8 (9) The disproportionate percentage of trauma 

9 deaths in rural areas is likely attributable in large 

10 part to a combination of response time to the scene 

11 and distance to the nearest emergency room to sta12 bilize trauma victims. 

13 (10) The percentage of trauma deaths occur14 ring in rural areas could continue to increase as 

15 more rural hospitals close, further limiting access to 

16 emergency services and requiring patients to travel 

17 longer distances to receive emergency medical care. 

18 (11) The creation of a rural emergency hospital 

19 designation under the Medicare program will allow 

20 facilities in rural areas to provide emergency medical 

21 services without having to maintain inpatient beds. 

22 (12) In addition to providing emergency care, 

23 rural emergency hospitals could convert the space 

24 previously used for inpatient services to provide 

25 other medical services including, but not limited to, 


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1 observation care, skilled nursing facility care, infu2 sion services, hemodialysis, home health, hospice, 

3 nursing home care, population health, and telemedi4 cine services. 

5 SEC. 3. RURAL EMERGENCY HOSPITAL PROGRAM. 

6 (a) IN GENERAL.— 

7 (1) RURAL EMERGENCY HOSPITAL AND SERV8 ICES DEFINED.—Section 1861 of the Social Security 

9 Act (42 U.S.C. 1395x) is amended— 

10 (A) in subsection (e), in the last sentence 

11 of the matter following paragraph (9), by in12 serting ‘‘or a rural emergency hospital (as de13 fined in section 1861(iii)(1))’’ before the period 

14 at the end; and 

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

17 ‘‘Rural Emergency Hospital; Rural Emergency Hospital 

18 Outpatient Services 

19 ‘‘(iii)(1) The term ‘rural emergency hospital’ means 

20 a facility that— 

21 ‘‘(A)(i) as of December 31, 2014— 

22 ‘‘(I) was a critical access hospital; or 

23 ‘‘(II) was a hospital with not more 

24 than 50 beds located in a county (or equiv25 alent unit of local government) in a rural 


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1 area (as defined in section 1886(d)(2)(D)), 

2 or was a hospital with not more than 50 

3 beds that was treated as being located in 

4 a rural area pursuant to section 

5 1886(d)(8)(E); or 

6 ‘‘(ii) was a critical access hospital de7 scribed in clause (i)(I) or a hospital described 

8 in clause (i)(II) that ceased operations during 

9 the period beginning on the date that is 5 years 

10 prior to the date of the enactment of this sub11 section and ending on December 30, 2014; 

12 ‘‘(B) provides 24-hour emergency medical care 

13 and observation care that does not exceed an annual 

14 per patient average of 24 hours or more than 1 mid15 night; 

16 ‘‘(C) does not provide any acute care inpatient 

17 beds and has protocols in place for the timely trans18 fer of patients who require acute care inpatient serv19 ices or other inpatient services; 

20 ‘‘(D) has elected to be designated as a rural 

21 emergency hospital; 

22 ‘‘(E) has received approval to operate as a rural 

23 emergency hospital from the State under section 

24 1834(r)(3)(A); and 


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1 ‘‘(F) is certified by the Secretary under section 

2 1834(r)(3)(B). 

3 ‘‘(2) The term ‘rural emergency hospital outpatient 

4 services’ means medical and other health services fur5 nished by a rural emergency hospital on an outpatient 

6 basis. 

7 ‘‘(3) Nothing in this subsection or section 1834(r)(3) 

8 shall be construed to prohibit a rural emergency hospital 

9 from providing extended care services.’’. 

10 (2) PAYMENT FOR RURAL EMERGENCY HOS11 PITAL SERVICES.— 

12 (A) IN GENERAL.—Section 1833(a) of the 

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

14 amended— 

15 (i) in paragraph (8), by striking 

16 ‘‘and’’ at the end; 

17 (ii) in paragraph (9), by striking the 

18 period at the end and inserting ‘‘; and’’; 

19 and 

20 (iii) by inserting after paragraph (9) 

21 the following new paragraph: 

22 ‘‘(10) in the case of rural emergency hospital 

23 emergency services and services provided by a rural 

24 emergency hospital or other provider of ambulance 

25 services to transport patients who require acute care 


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1 inpatient services or other inpatient services from 

2 such rural emergency hospital to a hospital or crit3 ical access hospital, the amounts described in section 

4 1834(r).’’. 

5 (B) PAYMENT AMOUNT.—Section 1834 of 

6 the Social Security Act (42 U.S.C. 1395m) is 

7 amended by adding at the end the following 

8 subsection: 

9 ‘‘(r) PAYMENT RULES RELATING TO RURAL EMER10 GENCY HOSPITALS.— 

11 ‘‘(1) PAYMENT FOR RURAL EMERGENCY HOS12 PITAL OUTPATIENT SERVICES.— 

13 ‘‘(A) IN GENERAL.—The amount of pay14 ment for rural emergency hospital outpatient 

15 services of a rural emergency hospital is equal 

16 to 110 percent of the reasonable costs of pro17 viding such services. 

18 ‘‘(B) TELEHEALTH SERVICES.—For pur19 poses of this paragraph, in determining the rea20 sonable costs of providing rural emergency hos21 pital outpatient services, costs associated with 

22 having a backup physician available via a tele23 communications system shall be considered rea24 sonable costs. 


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1 ‘‘(2) PAYMENT FOR TRANSPORTATION SERV2 ICES.—The amount of payment for services provided 

3 by a rural emergency hospital or other provider of 

4 ambulance services to transport patients who require 

5 acute care inpatient services or other inpatient serv6 ices from such rural emergency hospital to a hospital 

7 or critical access hospital is equal to 110 percent of 

8 the reasonable costs of providing such services. 

9 ‘‘(3) REQUIREMENTS FOR RURAL EMERGENCY

10 HOSPITALS.— 

11 ‘‘(A) STATE APPROVAL TO OPERATE AS A

12 RURAL EMERGENCY HOSPITAL.—No payment 

13 shall be made under this subsection to a facil14 ity, or to a provider of ambulance services pro15 viding transportation services from such facil16 ity, unless the State in which the facility is lo17 cated has approved the facility’s designation as 

18 a rural emergency hospital. 

19 ‘‘(B) CERTIFICATION OF RURAL EMER20 GENCY HOSPITAL.— 

21 ‘‘(i) IN GENERAL.—No payment shall 

22 be made under this subsection to a facility, 

23 or to a provider of ambulance services pro24 viding transportation services from such 

25 facility, unless the facility has been cerVerDate Sep 11 2014 00:49 Jun 26, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1648.IS S1648

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1 tified by the Secretary as a rural emer2 gency hospital. 

3 ‘‘(ii) CERTIFICATION REQUIRE4 MENTS.—The Secretary shall certify a fa5 cility as a rural emergency hospital if the 

6 facility— 

7 ‘‘(I) meets the criteria for rural 

8 emergency hospitals described in sub9 paragraphs (A) through (E) of section 

10 1861(iii)(1); 

11 ‘‘(II) either— 

12 ‘‘(aa) is verified by the 

13 American College of Surgeons as 

14 having the resources required of 

15 a level IV trauma center or high16 er; or 

17 ‘‘(bb) employs healthcare 

18 professionals that successfully 

19 completed the Advanced Trauma 

20 Life Support Course offered by 

21 the American College of Sur22 geons within the preceding 4 

23 years; 


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1 ‘‘(III) has in effect a transfer 

2 agreement with a level I or level II 

3 trauma center; and 

4 ‘‘(IV) meets such staff training 

5 and certification requirements as the 

6 Secretary may require. 

7 ‘‘(4) COINSURANCE.— 

8 ‘‘(A) IN GENERAL.—The amount of pay9 ment for rural emergency hospital services or 

10 transportation services made to a rural emer11 gency hospital or other provider of ambulance 

12 services under this subsection shall be reduced 

13 by the coinsurance amount described in sub14 paragraph (B). 

15 ‘‘(B) COINSURANCE AMOUNT.—The coin16 surance amount described in this subparagraph, 

17 with respect to an item or service provided by 

18 a rural emergency hospital or provider of ambu19 lance services, shall be calculated in the same 

20 manner as the coinsurance amount for an out21 patient critical access hospital service is cal22 culated under section 1866(a)(2).’’. 

23 (b) WAIVER OF DISTANCE REQUIREMENT FOR RE24 PLACEMENT CAHS; SUBSEQUENT REDESIGNATION OF

25 RURAL EMERGENCY HOSPITALS AS CAHS.—Section 


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1 1820(c)(2) of the Social Security Act (42 U.S.C. 1395i– 

2 4(c)(2)) is amended— 

3 (1) in subparagraph (B)(i)(I), by inserting 

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

5 and 

6 (2) by adding at the end the following new sub7 paragraphs: 

8 ‘‘(F) OPTION TO WAIVE DISTANCE RE9 QUIREMENT.—Beginning on the date of the en10 actment of this subparagraph, for every critical 

11 access hospital located in a State that is cer12 tified as a rural emergency hospital under sec13 tion 1834(r)(3)(B), the State shall have the op14 tion of waiving the distance requirement de15 scribed in subparagraph (B)(i)(I) with respect 

16 to another facility located in the State that is 

17 seeking designation as a critical access hospital 

18 under this paragraph. 

19 ‘‘(G) REDESIGNATION OF A RURAL EMER20 GENCY HOSPITAL AS A CRITICAL ACCESS HOS21 PITAL.—A rural emergency hospital that was 

22 previously designated as a critical access hos23 pital under this paragraph may elect to be re24 designated as a critical access hospital (in the 

25 same manner that the hospital was originally 


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1 designated as a critical access hospital) at any 

2 time, subject to such conditions as the Sec3 retary may establish.’’. 

4 (c) STUDIES AND REPORTS.— 

5 (1) STUDIES.—The Secretary of Health & 

6 Human Services shall conduct 3 studies to evaluate 

7 the impact of rural emergency hospitals on the avail8 ability of health care and health outcomes in rural 

9 areas (as defined in section 1886(d)(2)(D) of the 

10 Social Security Act (42 U.S.C. 1395ww)). The Sec11 retary shall conduct a study— 

12 (A) 2 years after the date of the enactment 

13 of this Act; 

14 (B) 5 years after the date of the enact15 ment of this Act; and 

16 (C) 10 years after the date of the enact17 ment of this Act. 

18 (2) REPORTS.—Not later than 6 months after 

19 each date that the Secretary of Health & Human 

20 Services is required to conduct a study under para21 graph (1), the Secretary shall submit a report to 

22 Congress containing the results of each such study. 

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

24 this section shall apply to items and services furnished on 


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1 or after the date that is 1 year after the date of the enact2 ment of this Act. 

3 SEC. 4. INCLUSION OF EMERGENCY MEDICINE AS HEALTH 

4 SERVICES UNDER THE NATIONAL HEALTH 

5 SERVICE CORPS. 

6 Section 331(a)(3)(D) of the Public Health Service 

7 Act (42 U.S.C. 254d(a)(3)(D)) is amended by inserting 

8 ‘‘, and includes emergency medicine provided by physi9 cians in a rural emergency hospital (as defined in section 

10 1861(iii) of the Social Security Act)’’ before the period. 

11 SEC. 5. PERMITTING HOSPITALS WITH APPROVED RESI12 DENCY PROGRAMS IN EMERGENCY MEDI13 CINE TO INCLUDE TIME SPENT BY INTERNS 

14 AND RESIDENTS IN THE EMERGENCY DE15 PARTMENT OF A RURAL HOSPITAL IN FULL16 TIME EQUIVALENT COUNT. 

17 (a) INDIRECT MEDICAL EDUCATION.—Section 

18 1886(d)(5)(B)(iv) of the Social Security Act (42 U.S.C. 

19 1395ww(d)(5)(B)(iv)) is amended by adding at the end 

20 the following new subclause: 

21 ‘‘(III) Effective for discharges occurring on or 

22 after October 1, 2015, all of the time spent in pa23 tient care activities in the emergency department of 

24 a rural hospital by interns and residents in emer25 gency medicine from a hospital with an approved 


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1 medical residency training program (as defined in 

2 subsection (h)(5)(A)) in such specialty shall be in3 cluded in determining the number of full-time equiv4 alent interns and residents in such program if the 

5 hospital with such program incurs the costs of the 

6 stipends and fringe benefits of the interns or resi7 dents during the time the interns or residents spend 

8 in that rural hospital in accordance with subclause 

9 (II). In this subclause, the term ‘rural hospital’ 

10 means a hospital that is located in a rural area (as 

11 defined for purposes of paragraph (2)(D)).’’. 

12 (b) DIRECT MEDICAL EDUCATION.—Section 

13 1886(h)(4)(E) of the Social Security Act (42 U.S.C. 

14 1395(h)(4)) is amended— 

15 (1) in clause (ii), by striking the period at the 

16 end and inserting ‘‘; and’’; 

17 (2) by inserting after clause (ii) the following 

18 new clause: 

19 ‘‘(iii) effective for cost reporting peri20 ods beginning on or after July 1, 2015, all 

21 of the time so spent in the emergency de22 partment of a rural hospital by residents in 

23 emergency medicine from a hospital with 

24 an approved medical residency training 

25 program in such specialty shall be counted 


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1 towards the determination of full-time 

2 equivalency in such program if the hospital 

3 with such program bears all, or substan4 tially all, of the costs of training such resi5 dents in the rural hospital. In this sub6 paragraph, the term ‘rural hospital’ means 

7 a hospital that is located in a rural area 

8 (as defined for purposes of subsection 

9 (d)(2)(D)).’’; and 

10 (3) by adding at the end the following new sen11 tence: ‘‘For purposes of this subparagraph, the 

12 emergency department of a rural hospital described 

13 in clause (iii) is a nonprovider setting.’’. 

Æ 


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