I 

111TH CONGRESS 

1ST SESSION H. R. 362 

To amend title XVIII of the Social Security Act to provide for temporary 

improvements to the Medicare inpatient hospital payment adjustment 

for low-volume hospitals and to provide for the use of the non-wage 

adjusted PPS rate under the Medicare-dependent hospital (MDH) program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 9, 2009 

Mr. BOSWELL (for himself, Mr. LOEBSACK, Mr. BERRY, Mr. BRALEY of Iowa, 

and Mrs. EMERSON) introduced the following bill; which was referred to 

the Committee on Ways and Means, and in addition to the Committee 

on Energy and Commerce, for a period to be subsequently determined by 

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for temporary improvements to the Medicare inpatient 

hospital payment adjustment for low-volume hospitals 

and to provide for the use of the non-wage adjusted 

PPS rate under the Medicare-dependent hospital (MDH) 

program, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Rural Hospital Assist3 ance Act of 2009’’. 

4 SEC. 2. TEMPORARY IMPROVEMENTS TO THE MEDICARE 

5 INPATIENT HOSPITAL PAYMENT ADJUST6 MENT FOR LOW-VOLUME HOSPITALS. 

7 (a) IN GENERAL.—Section 1886(d)(12) of the Social 

8 Security Act (42 U.S.C. 1395ww(d)(12)) is amended— 

9 (1) in subparagraph (A), by inserting ‘‘or (D) 

10 (for discharges occurring in fiscal year 2010)’’ after 

11 ‘‘subparagraph (B)’’; 

12 (2) in subparagraph (B), by striking ‘‘The Sec13 retary’’ and inserting ‘‘Except as provided in sub14 paragraph (D), the Secretary’’; 

15 (3) in subparagraph (C)(i)— 

16 (A) by inserting ‘‘(or, with respect to fiscal 

17 year 2010, 15 road miles)’’ after ‘‘25 road 

18 miles’’; and 

19 (B) by inserting ‘‘(or, with respect to fiscal 

20 year 2010, 1,500 discharges of individuals enti21 tled to, or enrolled for, benefits under part A)’’ 

22 after ‘‘800 discharges’’; and 

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

25 ‘‘(D) TEMPORARY APPLICABLE PERCENT26 AGE INCREASE.—For discharges occurring in 


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1 fiscal year 2010, the Secretary shall determine 

2 an applicable percentage increase for purposes 

3 of subparagraph (A) using a continuous linear 

4 sliding scale ranging from 25 percent for low5 volume hospitals with 200 or fewer discharges 

6 of individuals entitled to, or enrolled for, bene7 fits under part A in the fiscal year to 0 percent 

8 for low-volume hospitals with greater than 

9 1,500 discharges of such individuals in the fis10 cal year.’’. 

11 (b) IMPLEMENTATION.—Notwithstanding any other 

12 provision of law, the Secretary of Health and Human 

13 Services may implement the amendments made by sub14 section (a) by program instruction or otherwise. 

15 SEC. 3. USE OF NON-WAGE ADJUSTED PPS RATE UNDER 

16 THE MEDICARE-DEPENDENT HOSPITAL 

17 (MDH) PROGRAM. 

18 (a) IN GENERAL.—Section 1886(d)(5)(G) of the So19 cial Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amend20 ed by adding at the end the following new clause: 

21 ‘‘(v) In the case of discharges occurring on or after 

22 October 1, 2009, and before October 1, 2010, in deter23 mining the amount under paragraph (1)(A)(iii) for pur24 poses of clauses (i) and (ii)(II), such amount shall, if it 

25 results in greater payments to the hospital, be determined 


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1 without regard to any adjustment for different area wage 

2 levels under paragraph (3)(E).’’. 

3 (b) IMPLEMENTATION.—Notwithstanding any other 

4 provision of law, the Secretary of Health and Human 

5 Services may implement the amendment made by sub6 section (a) by program instruction or otherwise. 

7 SEC. 4. LIMITATION ON MEDICARE EXCEPTION TO THE 

8 PROHIBITION ON CERTAIN PHYSICIAN RE9 FERRALS FOR HOSPITALS. 

10 (a) IN GENERAL.—Section 1877 of the Social Secu11 rity Act (42 U.S.C. 1395nn) is amended— 

12 (1) in subsection (d)(2)— 

13 (A) in subparagraph (A), by striking 

14 ‘‘and’’ at the end; 

15 (B) in subparagraph (B), by striking the 

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

17 (C) by adding at the end the following new 

18 subparagraph: 

19 ‘‘(C) in the case where the entity is a hos20 pital, the hospital meets the requirements of 

21 paragraph (3)(D).’’; 

22 (2) in subsection (d)(3)— 

23 (A) in subparagraph (B), by striking 

24 ‘‘and’’ at the end; 


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1 (B) in subparagraph (C), by striking the 

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

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

4 subparagraph: 

5 ‘‘(D) the hospital meets the requirements 

6 described in subsection (i)(1) not later than 18 

7 months after the date of the enactment of this 

8 subparagraph.’’; and 

9 (3) by adding at the end the following new sub10 section: 

11 ‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY

12 FOR HOSPITAL EXCEPTION TO OWNERSHIP OR INVEST13 MENT PROHIBITION.— 

14 ‘‘(1) REQUIREMENTS DESCRIBED.—For pur15 poses of subsection (d)(3)(D), the requirements de16 scribed in this paragraph for a hospital are as fol17 lows: 

18 ‘‘(A) PROVIDER AGREEMENT.—The hos19 pital had— 

20 ‘‘(i) physician ownership on Sep21 tember 1, 2008; and 

22 ‘‘(ii) a provider agreement under sec23 tion 1866 in effect on such date. 

24 ‘‘(B) LIMITATION ON EXPANSION OF FA25 CILITY CAPACITY.—Except as provided in paraVerDate Nov 24 2008 00:53 Jan 12, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H362.IH H362

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1 graph (3), the number of operating rooms, pro2 cedure rooms, and beds of the hospital at any 

3 time on or after the date of the enactment of 

4 this subsection are no greater than the number 

5 of operating rooms, procedure rooms, and beds 

6 as of such date. 

7 ‘‘(C) PREVENTING CONFLICTS OF INTER8 EST.— 

9 ‘‘(i) The hospital submits to the Sec10 retary an annual report containing a de11 tailed description of— 

12 ‘‘(I) the identity of each physi13 cian owner and any other owners of 

14 the hospital; and 

15 ‘‘(II) the nature and extent of all 

16 ownership interests in the hospital. 

17 ‘‘(ii) The hospital has procedures in 

18 place to require that any referring physi19 cian owner discloses to the patient being 

20 referred, by a time that permits the pa21 tient to make a meaningful decision re22 garding the receipt of care, as determined 

23 by the Secretary— 


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1 ‘‘(I) the ownership interest of 

2 such referring physician in the hos3 pital; and 

4 ‘‘(II) if applicable, any such own5 ership interest of the treating physi6 cian. 

7 ‘‘(iii) The hospital does not condition 

8 any physician ownership interests either di9 rectly or indirectly on the physician owner 

10 making or influencing referrals to the hos11 pital or otherwise generating business for 

12 the hospital. 

13 ‘‘(iv) The hospital discloses the fact 

14 that the hospital is partially owned by phy15 sicians— 

16 ‘‘(I) on any public website for the 

17 hospital; and 

18 ‘‘(II) in any public advertising 

19 for the hospital. 

20 ‘‘(D) ENSURING BONA FIDE INVEST21 MENT.— 

22 ‘‘(i) Physician owners in the aggregate 

23 do not own more than the greater of— 

24 ‘‘(I) 40 percent of the total value 

25 of the investment interests held in the 


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1 hospital or in an entity whose assets 

2 include the hospital; or 

3 ‘‘(II) the percentage of such total 

4 value determined on the date of enact5 ment of this subsection. 

6 ‘‘(ii) Any ownership or investment in7 terests that the hospital offers to a physi8 cian owner are not offered on more favor9 able terms than the terms offered to a per10 son who is not a physician owner. 

11 ‘‘(iii) The hospital (or any investors in 

12 the hospital) does not directly or indirectly 

13 provide loans or financing for any physi14 cian owner investments in the hospital. 

15 ‘‘(iv) The hospital (or any investors in 

16 the hospital) does not directly or indirectly 

17 guarantee a loan, make a payment toward 

18 a loan, or otherwise subsidize a loan, for 

19 any individual physician owner or group of 

20 physician owners that is related to acquir21 ing any ownership interest in the hospital. 

22 ‘‘(v) Investment returns are distrib23 uted to each investor in the hospital in an 

24 amount that is directly proportional to the 


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1 ownership interest of such investor in the 

2 hospital. 

3 ‘‘(vi) Physician owners do not receive, 

4 directly or indirectly, any guaranteed re5 ceipt of or right to purchase other business 

6 interests related to the hospital, including 

7 the purchase or lease of any property 

8 under the control of other investors in the 

9 hospital or located near the premises of the 

10 hospital. 

11 ‘‘(vii) The hospital does not offer a 

12 physician owner the opportunity to pur13 chase or lease any property under the con14 trol of the hospital or any other investor in 

15 the hospital on more favorable terms than 

16 the terms offered to an individual who is 

17 not a physician owner. 

18 ‘‘(E) PATIENT SAFETY.— 

19 ‘‘(i) Insofar as the hospital admits a 

20 patient and does not have any physician 

21 available on the premises to provide serv22 ices during all hours in which the hospital 

23 is providing services to such patient, before 

24 admitting the patient— 


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1 ‘‘(I) the hospital discloses such 

2 fact to a patient; and 

3 ‘‘(II) following such disclosure, 

4 the hospital receives from the patient 

5 a signed acknowledgment that the pa6 tient understands such fact. 

7 ‘‘(ii) The hospital has the capacity 

8 to— 

9 ‘‘(I) provide assessment and ini10 tial treatment for patients; and 

11 ‘‘(II) refer and transfer patients 

12 to hospitals with the capability to 

13 treat the needs of the patient in14 volved. 

15 ‘‘(F) LIMITATION ON APPLICATION TO

16 CERTAIN CONVERTED FACILITIES.—The hos17 pital was not converted from an ambulatory 

18 surgical center to a hospital on or after the date 

19 of enactment of this subsection. 

20 ‘‘(2) PUBLICATION OF INFORMATION RE21 PORTED.—The Secretary shall publish, and update 

22 on an annual basis, the information submitted by 

23 hospitals under paragraph (1)(C)(i) on the public 

24 Internet website of the Centers for Medicare & Med25 icaid Services. 


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1 ‘‘(3) EXCEPTION TO PROHIBITION ON EXPAN2 SION OF FACILITY CAPACITY.— 

3 ‘‘(A) PROCESS.— 

4 ‘‘(i) ESTABLISHMENT.—The Secretary 

5 shall establish and implement a process 

6 under which an applicable hospital (as de7 fined in subparagraph (E)) may apply for 

8 an exception from the requirement under 

9 paragraph (1)(B). 

10 ‘‘(ii) OPPORTUNITY FOR COMMUNITY

11 INPUT.—The process under clause (i) shall 

12 provide individuals and entities in the com13 munity that the applicable hospital apply14 ing for an exception is located with the op15 portunity to provide input with respect to 

16 the application. 

17 ‘‘(iii) TIMING FOR IMPLEMENTA18 TION.—The Secretary shall implement the 

19 process under clause (i) on November 1, 

20 2009. 

21 ‘‘(iv) REGULATIONS.—Not later than 

22 November 1, 2009, the Secretary shall pro23 mulgate regulations to carry out the proc24 ess under clause (i). 


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1 ‘‘(B) FREQUENCY.—The process described 

2 in subparagraph (A) shall permit an applicable 

3 hospital to apply for an exception up to once 

4 every 2 years. 

5 ‘‘(C) PERMITTED INCREASE.— 

6 ‘‘(i) IN GENERAL.—Subject to clause 

7 (ii) and subparagraph (D), an applicable 

8 hospital granted an exception under the 

9 process described in subparagraph (A) may 

10 increase the number of operating rooms, 

11 procedure rooms, and beds of the applica12 ble hospital above the baseline number of 

13 operating rooms, procedure rooms, and 

14 beds of the applicable hospital (or, if the 

15 applicable hospital has been granted a pre16 vious exception under this paragraph, 

17 above the number of operating rooms, pro18 cedure rooms, and beds of the hospital 

19 after the application of the most recent in20 crease under such an exception). 

21 ‘‘(ii) LIFETIME 100 PERCENT IN22 CREASE LIMITATION.—The Secretary shall 

23 not permit an increase in the number of 

24 operating rooms, procedure rooms, and 

25 beds of an applicable hospital under clause 


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1 (i) to the extent such increase would result 

2 in the number of operating rooms, proce3 dure rooms, and beds of the applicable 

4 hospital exceeding 200 percent of the base5 line number of operating rooms, procedure 

6 rooms, and beds of the applicable hospital. 

7 ‘‘(iii) BASELINE NUMBER OF OPER8 ATING ROOMS, PROCEDURE ROOMS, AND

9 BEDS.—In this paragraph, the term ‘base10 line number of operating rooms, procedure 

11 rooms, and beds’ means the number of op12 erating rooms, procedure rooms, and beds 

13 of the applicable hospital as of the date of 

14 enactment of this subsection. 

15 ‘‘(D) INCREASE LIMITED TO FACILITIES

16 ON THE MAIN CAMPUS OF THE HOSPITAL.— 

17 Any increase in the number of operating rooms, 

18 procedure rooms, and beds of an applicable hos19 pital pursuant to this paragraph may only occur 

20 in facilities on the main campus of the applica21 ble hospital. 

22 ‘‘(E) APPLICABLE HOSPITAL.—In this 

23 paragraph, the term ‘applicable hospital’ means 

24 a hospital— 


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1 ‘‘(i) that is located in a county in 

2 which the percentage increase in the popu3 lation during the most recent 5-year period 

4 (as of the date of the application under 

5 subparagraph (A)) is at least 150 percent 

6 of the percentage increase in the popu7 lation growth of the State in which the 

8 hospital is located during that period, as 

9 estimated by Bureau of the Census; 

10 ‘‘(ii) whose annual percent of total in11 patient admissions that represent inpatient 

12 admissions under the program under title 

13 XIX is equal to or greater than the aver14 age percent with respect to such admis15 sions for all hospitals located in the county 

16 in which the hospital is located; 

17 ‘‘(iii) that does not discriminate 

18 against beneficiaries of Federal health care 

19 programs and does not permit physicians 

20 practicing at the hospital to discriminate 

21 against such beneficiaries; 

22 ‘‘(iv) that is located in a State in 

23 which the average bed capacity in the 

24 State is less than the national average bed 

25 capacity; and 


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1 ‘‘(v) that has an average bed occu2 pancy rate that is greater than the average 

3 bed occupancy rate in the State in which 

4 the hospital is located. 

5 ‘‘(F) PROCEDURE ROOMS.—In this sub6 section, the term ‘procedure rooms’ includes 

7 rooms in which catheterizations, angiographies, 

8 angiograms, and endoscopies are performed, ex9 cept such term shall not include emergency 

10 rooms or departments (exclusive of rooms in 

11 which catheterizations, angiographies, 

12 angiograms, and endoscopies are performed). 

13 ‘‘(G) PUBLICATION OF FINAL DECI14 SIONS.—Not later than 60 days after receiving 

15 a complete application under this paragraph, 

16 the Secretary shall publish in the Federal Reg17 ister the final decision with respect to such ap18 plication. 

19 ‘‘(H) LIMITATION ON REVIEW.—There 

20 shall be no administrative or judicial review 

21 under section 1869, section 1878, or otherwise 

22 of the process under this paragraph (including 

23 the establishment of such process). 

24 ‘‘(4) COLLECTION OF OWNERSHIP AND INVEST25 MENT INFORMATION.—For purposes of subparaVerDate Nov 24 2008 00:53 Jan 12, 2009 Jkt 079200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H362.IH H362

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1 graphs (A)(i) and (D)(i) of paragraph (1), the Sec2 retary shall collect physician ownership and invest3 ment information for each hospital. 

4 ‘‘(5) PHYSICIAN OWNER DEFINED.—For pur5 poses of this subsection, the term ‘physician owner’ 

6 means a physician (or an immediate family member 

7 of such physician) with a direct or an indirect own8 ership interest in the hospital.’’. 

9 (b) ENFORCEMENT.— 

10 (1) ENSURING COMPLIANCE.—The Secretary of 

11 Health and Human Services shall establish policies 

12 and procedures to ensure compliance with the re13 quirements described in subsection (i)(1) of section 

14 1877 of the Social Security Act, as added by sub15 section (a)(3), beginning on the date such require16 ments first apply. Such policies and procedures may 

17 include unannounced site reviews of hospitals. 

18 (2) AUDITS.—Beginning not later than January 

19 1, 2010, the Secretary of Health and Human Serv20 ices shall conduct audits to determine if hospitals 

21 violate the requirements referred to in paragraph 

22 (1). 

Æ 


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