I

104TH CONGRESS

2D SESSION H. R. 3753

To amend the Social Security Act and the Public Health Service Act with

respect to the health of residents of rural areas, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 1996

Mr. GUNDERSON (for himself, Mr. POSHARD, Mr. ROBERTS, Mr. STENHOLM,

Mr. BEREUTER, Mr. BONILLA, Mr. BUNN of Oregon, Mr. HILLIARD,

Mrs. JOHNSON of Connecticut, Mrs. LINCOLN, Mr. PAYNE of Virginia,

Mr. WILLIAMS, Mr. BAKER of Louisiana, Mr. BARRETT of Nebraska, Mr.

BOEHLERT, Mr. BOUCHER, Mr. BREWSTER, Mr. CLINGER, Mr. COMBEST, Mr. CONDIT, Mr. COOLEY of Oregon, Ms. DANNER, Mr. EHLERS,

Mr. EVANS, Mr. FAZIO of California, Mr. HALL of Texas, Mr. JOHNSON

of South Dakota, Mr. KLUG, Mr. MCHUGH, Mr. NEY, Mr. NUSSLE, Mr.

PETERSON of Minnesota, Mr. RAHALL, Mr. RAMSTAD, Mr. SANDERS, Mr.

SKELTON, Mr. STUPAK, Mr. THORNBERRY, Mr. WALSH, and Mr.

WHITFIELD) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee on Ways and

Means, for a period to be subsequently determined by the Speaker, in

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

A BILL

To amend the Social Security Act and the Public Health

Service Act with respect to the health of residents of

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,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Rural Health Improve3 ment Act of 1996’’.

4 SEC. 2. TABLE OF CONTENTS.

5 The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Sense of Congress on work of Bill Emerson.

TITLE I—EQUALIZATION OF MEDICARE REIMBURSEMENT RATES

TO HEALTH MAINTENANCE ORGANIZATIONS AND COMPETITIVE

MEDICAL PLANS

Sec. 101. Payments to health maintenance organizations and competitive medical plans.

TITLE II—GRANTS TO ENCOURAGE ESTABLISHMENT OF

COMMUNITY RURAL HEALTH NETWORKS

Sec. 201. Assistance for development of access plans for chronically underserved areas.

Sec. 202. Technical assistance grants for networks.

Sec. 203. Development grants for networks.

Sec. 204. Definitions.

Sec. 205. Financing through termination of certain grant programs.

TITLE III—MEDICARE RURAL PRIMARY CARE HOSPITALS AND

RURAL EMERGENCY ACCESS CARE HOSPITALS

Subtitle A—Rural Primary Care Hospital Program

Sec. 301. Designation of rural primary care hospitals.

Sec. 302. Payment on a reasonable cost basis.

Sec. 303. Lengthening maximum period of permitted inpatient stay.

Sec. 304. Payment continued to designated essential access community hospitals.

Sec. 305. Effective date.

Subtitle B—Rural Emergency Access Care Hospitals

Sec. 311. Establishment of hospitals.

TITLE IV—INCENTIVES FOR HEALTH PROFESSIONALS TO

PRACTICE IN RURAL AREAS

Subtitle A—National Health Service Corps

Sec. 401. National Health Service Corps scholarship and loan repayments excluded from gross income.

Sec. 402. Study regarding allocation of Corps members among shortage areas.

Sec. 403. Priority in assignment of Corps members; community rural health

networks.
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Subtitle B—Primary Care Services Furnished in Shortage Areas

Sec. 411. Additional payments under medicare for primary care services furnished in rural shortage areas.

TITLE V—CLASSIFICATION OF RURAL REFERRAL CENTERS

Sec. 501. Classification of centers.

TITLE VI—PROMOTION OF HEALTH CENTERS IN RURAL

REGIONS

Sec. 601. Expansion of health centers in rural regions.

Sec. 602. Collaboration of health centers with community hospitals.

TITLE VII—MEDICARE PAYMENT METHODOLOGIES

Sec. 701. Telemedicine services.

TITLE VIII—ANTITRUST

Sec. 801. Sense of Congress relating to application of guidelines.

TITLE IX—FINANCING

Sec. 901. Extension and expansion of existing medicare secondary payer requirements.

1 SEC. 3. SENSE OF CONGRESS ON WORK OF BILL EMERSON.

2 It is the sense of the Congress that this Act reflects

3 the dedication of the late Representative Bill Emerson,

4 who served on the Steering Committee of the Rural Health

5 Care Coalition of the House of Representatives, to ensur6 ing health care access for all rural Americans.
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1 TITLE I—EQUALIZATION OF

2 MEDICARE REIMBURSEMENT

3 RATES TO HEALTH MAINTE4 NANCE ORGANIZATIONS AND

5 COMPETITIVE MEDICAL

6 PLANS

7 SEC. 101. PAYMENTS TO HEALTH MAINTENANCE ORGANI8 ZATIONS AND COMPETITIVE MEDICAL PLANS.

9 (a) IN GENERAL.—Section 1876(a) of the Social Se10 curity Act (42 U.S.C. 1395mm(a)) is amended to read as

11 follows:

12 ‘‘(a)(1)(A) The Secretary shall annually determine,

13 and shall announce (in a manner intended to provide no14 tice to interested parties) not later than August 1 before

15 the calendar year concerned—

16 ‘‘(i) a per capita rate of payment for individuals

17 who are enrolled under this section with an eligible

18 organization which has entered into a risk-sharing

19 contract and who are entitled to benefits under part

20 A and enrolled under part B, and

21 ‘‘(ii) a per capita rate of payment for individ22 uals who are so enrolled with such an organization

23 and who are enrolled under part B only.

24 For purposes of this section, the term ‘‘risk-sharing con25 tract’’ means a contract entered into under subsection (g)
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1 and the term ‘‘reasonable cost reimbursement contract’’

2 means a contract entered into under subsection (h).

3 ‘‘(B) The annual per capita rate of payment for each

4 medicare payment area (as defined in paragraph (5)) shall

5 be equal to the adjusted capitation rate (as defined in

6 paragraph (4)), adjusted by the Secretary for—

7 ‘‘(i) individuals who are enrolled under this sec8 tion with an eligible organization which has entered

9 into a risk-sharing contract and who are enrolled

10 under part B only; and

11 ‘‘(ii) such risk factors as age, disability status,

12 gender, institutional status, and such other factors

13 as the Secretary determines to be appropriate so as

14 to ensure actuarial equivalence. The Secretary may

15 add to, modify, or substitute for such factors, if such

16 changes will improve the determination of actuarial

17 equivalence.

18 ‘‘(C) In the case of an eligible organization with a

19 risk-sharing contract, the Secretary shall make monthly

20 payments in advance and in accordance with the rate de21 termined under subparagraph (B) and except as provided

22 in subsection (g)(2), to the organization for each individ23 ual enrolled with the organization under this section.

24 ‘‘(D) The Secretary shall establish a separate rate of

25 payment to a eligible organization with respect to any indi-
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1 vidual determined to have end-stage renal disease and en2 rolled with the organization. Such rate of payment shall

3 be actuarially equivalent to rates paid to other enrollees

4 in the payment area (or such other area as specified by

5 the Secretary).

6 ‘‘(E)(i) The amount of payment under this paragraph

7 may be retroactively adjusted to take into account any dif8 ference between the actual number of individuals enrolled

9 in the plan under this section and the number of such

10 individuals estimated to be so enrolled in determining the

11 amount of the advance payment.

12 ‘‘(ii)(I) Subject to subclause (II), the Secretary may

13 make retroactive adjustments under clause (i) to take into

14 account individuals enrolled during the period beginning

15 on the date on which the individual enrolls with an eligible

16 organization (which has a risk-sharing contract under this

17 section) under a health benefit plan operated, sponsored,

18 or contributed to by the individual’s employer or former

19 employer (or the employer or former employer of the indi20 vidual’s spouse) and ending on the date on which the indi21 vidual is enrolled in the plan under this section, except

22 that for purposes of making such retroactive adjustments

23 under this clause, such period may not exceed 90 days.

24 ‘‘(II) No adjustment may be made under subclause

25 (I) with respect to any individual who does not certify that
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1 the organization provided the individual with the expla2 nation described in subsection (c)(3)(E) at the time the

3 individual enrolled with the organization.

4 ‘‘(F)(i) At least 45 days before making the announce5 ment under subparagraph (A) for a year, the Secretary

6 shall provide for notice to eligible organizations of pro7 posed changes to be made in the methodology or benefit

8 coverage assumptions from the methodology and assump9 tions used in the previous announcement and shall provide

10 such organizations an opportunity to comment on such

11 proposed changes.

12 ‘‘(ii) In each announcement made under subpara13 graph (A) for a year, the Secretary shall include an expla14 nation of the assumptions (including any benefit coverage

15 assumptions) and changes in methodology used in the an16 nouncement in sufficient detail so that eligible organiza17 tions can compute per capita rates of payment for individ18 uals located in each county (or equivalent medicare pay19 ment area) which is in whole or in part within the service

20 area of such an organization.

21 ‘‘(2) With respect to any eligible organization which

22 has entered into a reasonable cost reimbursement con23 tract, payments shall be made to such plan in accordance

24 with subsection (h)(2) rather than paragraph (1).
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1 ‘‘(3) Subject to subsections (c)(2)(B)(ii) and (c)(7),

2 payments under a contract to an eligible organization

3 under paragraph (1) or (2) shall be instead of the amounts

4 which (in the absence of the contract) would be otherwise

5 payable, pursuant to sections 1814(b) and 1833(a), for

6 services furnished by or through the organization to indi7 viduals enrolled with the organization under this section.

8 ‘‘(4)(A) For purposes of this section, the ‘adjusted

9 capitation rate’ for a medicare payment area (as defined

10 in paragraph (5)) is equal to the greatest of the following:

11 ‘‘(i) The sum of—

12 ‘‘(I) the area-specific percentage for the

13 year (as specified under subparagraph (B) for

14 the year) of the area-specific adjusted capita15 tion rate for the year for the medicare payment

16 area, as determined under subparagraph (C),

17 and

18 ‘‘(II) the national percentage (as specified

19 under subparagraph (B) for the year) of the

20 input-price-adjusted national adjusted capita21 tion rate for the year, as determined under sub22 paragraph (D),

23 multiplied by a budget neutrality adjustment factor

24 determined under subparagraph (E).

25 ‘‘(ii) An amount equal to—
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1 ‘‘(I) in the case of 1997, 80 percent of the

2 input-price-adjusted national adjusted capita3 tion rate for the year, as determined under sub4 paragraph (D); and

5 ‘‘(II) in the case of a succeeding year, the

6 amount specified in this clause for the preced7 ing year increased by the national average per

8 capita growth percentage specified under sub9 paragraph (F) for that succeeding year.

10 ‘‘(iii) An amount equal to—

11 ‘‘(I) in the case of 1997, 102 percent of

12 the annual per capita rate of payment for 1996

13 for the medicare payment area (determined

14 under this subsection, as in effect on the day

15 before the date of enactment of the Rural

16 Health Improvement Act of 1996; and

17 ‘‘(II) in the case of a subsequent year, 102

18 percent of the adjusted capitation rate under

19 this subsection for the area for the previous

20 year.

21 ‘‘(B) For purposes of subparagraph (A)(i)—

22 ‘‘(i) for 1997, the ‘area-specific percentage’ is

23 90 percent and the ‘national percentage’ is 10 per24 cent,
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1 ‘‘(ii) for 1998, the ‘area-specific percentage’ is

2 85 percent and the ‘national percentage’ is 15 per3 cent,

4 ‘‘(iii) for 1999, the ‘area-specific percentage’ is

5 80 percent and the ‘national percentage’ is 20 per6 cent,

7 ‘‘(iv) for 2000, the ‘area-specific percentage’ is

8 75 percent and the ‘national percentage’ is 25 per9 cent, and

10 ‘‘(v) for a year after 2000, the ‘area-specific

11 percentage’ is 70 percent and the ‘national percent12 age’ is 30 percent.

13 ‘‘(C) For purposes of subparagraph (A)(i), the area14 specific adjusted capitation rate for a medicare payment

15 area—

16 ‘‘(i) for 1997, is the average of the annual per

17 capita rates of payment for the area for 1994

18 through 1996, after adjusting the 1994 and 1995

19 rates of payment to 1996 dollars, increased by the

20 national average per capita growth percentage for

21 1997 (as defined in subparagraph (F)); or

22 ‘‘(ii) for a subsequent year, is the area-specific

23 adjusted capitation rate for the previous year deter24 mined under this subparagraph for the area, in-
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1 creased by the national average per capita growth

2 percentage for such subsequent year.

3 ‘‘(D)(i) For purposes of subparagraph (A)(i) and

4 subparagraph (A)(ii), the input-price-adjusted national

5 adjusted capitation rate for a medicare payment area for

6 a year is equal to the sum, for all the types of medicare

7 services (as classified by the Secretary), of the product

8 (for each such type of service) of—

9 ‘‘(I) the national standardized adjusted capita10 tion rate (determined under clause (ii)) for the year,

11 ‘‘(II) the proportion of such rate for the year

12 which is attributable to such type of services, and

13 ‘‘(III) an index that reflects (for that year and

14 that type of services) the relative input price of such

15 services in the area compared to the national aver16 age input price of such services.

17 In applying subclause (III), the Secretary shall, subject

18 to clause (iii), apply those indices under this title that are

19 used in applying (or updating) national payment rates for

20 specific areas and localities.

21 ‘‘(ii) In clause (i)(I), the ‘national standardized ad22 justed capitation rate’ for a year is equal to—

23 ‘‘(I) the sum (for all medicare payment areas)

24 of the product of (aa) the area-specific adjusted

25 capitation rate for that year for the area under sub-
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1 paragraph (C), and (bb) the average number of

2 standardized medicare beneficiaries residing in that

3 area in the year; divided by

4 ‘‘(II) the total average number of standardized

5 medicare beneficiaries residing in all the medicare

6 payment areas for that year.

7 ‘‘(iii) In applying this subparagraph for 1997—

8 ‘‘(I) medicare services shall be divided into 2

9 types of services: part A services and part B serv10 ices;

11 ‘‘(II) the proportions described in clause (i)(II)

12 for such types of services shall be—

13 ‘‘(aa) for part A services, the ratio (ex14 pressed as a percentage) of the national average

15 annual per capita rate of payment for part A

16 for 1996 to the total average annual per capita

17 rate of payment for parts A and B for 1996,

18 and

19 ‘‘(bb) for part B services, 100 percent

20 minus the ratio described in item (aa);

21 ‘‘(III) for part A services, 70 percent of pay22 ments attributable to such services shall be adjusted

23 by the index used under section 1886(d)(3)(E) to

24 adjust payment rates for relative hospital wage levels
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1 for hospitals located in the payment area involved;

2 and

3 ‘‘(IV) for part B services—

4 ‘‘(aa) 66 percent of payments attributable

5 to such services shall be adjusted by the index

6 of the geographic area factors under section

7 1848(e) used to adjust payment rates for physi8 cians’ services furnished in the payment area,

9 and

10 ‘‘(bb) of the remaining 34 percent of the

11 amount of such payments, 70 percent shall be

12 adjusted by the index described in subclause

13 (III).

14 The Secretary may continue to apply the rules described

15 in this clause (or similar rules) for 1998.

16 ‘‘(E) For each year, the Secretary shall compute a

17 budget neutrality adjustment factor so that the aggregate

18 of the payments under this section shall be equal to the

19 aggregate payments that would have been made under this

20 section if the area-specific percentage for the year had

21 been 100 percent and the national percentage had been

22 0 percent.

23 ‘‘(F) In this section, the ‘national average per capita

24 growth percentage’ is equal to the percentage growth in
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1 medicare fee-for-service per capita expenditures, which the

2 Secretary shall project for each year.

3 ‘‘(5)(A) In this section, except as provided in sub4 paragraph (C), the term ‘medicare payment area’ means

5 a county, or equivalent area specified by the Secretary.

6 ‘‘(B) In the case of individuals who are determined

7 to have end stage renal disease, the medicare payment

8 area shall be specified by the Secretary.

9 ‘‘(C)(i) Upon written request of the Chief Executive

10 Officer of a State for a contract year (beginning after

11 1997) made at least 7 months before the beginning of the

12 year, the Secretary shall adjust the system under which

13 medicare payment areas in the State are otherwise deter14 mined under subparagraph (A) to a system which—

15 ‘‘(I) has a single statewide medicare payment

16 area,

17 ‘‘(II) is a metropolitan based system described

18 in clause (iii), or

19 ‘‘(III) which consolidates into a single medicare

20 payment area noncontiguous counties (or equivalent

21 areas described in subparagraph (A)) within a State.

22 Such adjustment shall be effective for payments for

23 months beginning with January of the year following the

24 year in which the request is received.
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1 ‘‘(ii) In the case of a State requesting an adjustment

2 under this subparagraph, the Secretary shall adjust the

3 payment rates otherwise established under this section for

4 medicare payment areas in the State in a manner so that

5 the aggregate of the payments under this section in the

6 State shall be equal to the aggregate payments that would

7 have been made under this section for medicare payment

8 areas in the State in the absence of the adjustment under

9 this subparagraph.

10 ‘‘(iii) The metropolitan based system described in this

11 clause is one in which—

12 ‘‘(I) all the portions of each metropolitan statis13 tical area in the State or in the case of a consoli14 dated metropolitan statistical area, all of the por15 tions of each primary metropolitan statistical area

16 within the consolidated area within the State, are

17 treated as a single medicare payment area, and

18 ‘‘(II) all areas in the State that do not fall

19 within a metropolitan statistical area are treated as

20 a single medicare payment area.

21 ‘‘(iv) In clause (iii), the terms ‘metropolitan statis22 tical area’, ‘consolidated metropolitan statistical area’, and

23 ‘primary metropolitan statistical area’ mean any area des24 ignated as such by the Secretary of Commerce.
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1 ‘‘(6) Subject to subsections (c)(2)(B)(ii) and (c)(7),

2 if an individual is enrolled under this section with an eligi3 ble organization having a risk-sharing contract, only the

4 eligible organization shall be entitled to receive payments

5 from the Secretary under this title for services furnished

6 to the individual.’’.

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

8 this section shall take effect on October 1, 1996.

9 TITLE II—GRANTS TO ENCOUR10 AGE ESTABLISHMENT OF

11 COMMUNITY RURAL HEALTH

12 NETWORKS

13 SEC. 201. ASSISTANCE FOR DEVELOPMENT OF ACCESS

14 PLANS FOR CHRONICALLY UNDERSERVED

15 AREAS.

16 (a) AVAILABILITY OF FINANCIAL ASSISTANCE TO IM17 PLEMENT ACTION PLANS TO INCREASE ACCESS.—

18 (1) IN GENERAL.—The Secretary shall provide

19 grants (in amounts determined in accordance with

20 paragraph (3)) over a 3-year period to an eligible

21 State for the development of plans to increase access

22 to health care services during such period for resi23 dents of areas in the State that are designated as

24 chronically underserved areas in accordance with

25 subsection (b).
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1 (2) ELIGIBILITY REQUIREMENTS.—A State is

2 eligible to receive grants under this section if the

3 State submits to the Secretary (at such time and in

4 such form as the Secretary may require) assurances

5 that the State has developed (or is in the process of

6 developing) a plan to increase the access of residents

7 of a chronically underserved area to health care serv8 ices that meets the requirements of subsection (c),

9 together with such other information and assurances

10 as the Secretary may require.

11 (3) AMOUNT OF ASSISTANCE.—

12 (A) IN GENERAL.—Subject to subpara13 graph (B), the amount of assistance provided to

14 a State under this subsection with respect to

15 any plan during a 3-year period shall be equal

16 to—

17 (i) for the first year of the period, an

18 amount equal to 100 percent of the

19 amounts expended by the State during the

20 year to develop the plan described in para21 graph (1) (as reported to the Secretary in

22 accordance with such requirements as the

23 Secretary may impose);

24 (ii) for the second year of the period,

25 an amount equal to 50 percent of the
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1 amounts expended by the State during the

2 year to develop the plan; and

3 (iii) for the third year of the period,

4 an amount equal to 33 percent of the

5 amounts expended by the State during the

6 year to develop the plan.

7 (B) AGGREGATE PER PLAN LIMIT.—The

8 amount of assistance provided to a State under

9 this subsection with respect to any plan may

10 not exceed $100,000 during any year of the 3-

11 year period for which the State receives assist12 ance.

13 (b) DESIGNATION OF AREAS.—

14 (1) DESIGNATION BY GOVERNOR.—In accord15 ance with the guidelines developed under paragraph

16 (2), the Governor of a State may designate an area

17 in the State as a chronically underserved area for

18 purposes of this section upon the request of a local

19 official of the area or upon the Governor’s initiative.

20 (2) GUIDELINES FOR DESIGNATION.—

21 (A) DEVELOPMENT BY SECRETARY.—Not

22 later than 1 year after the date of the enact23 ment of this Act, the Secretary shall develop

24 guidelines for the designation of areas as chron25 ically underserved areas under this section.
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1 (B) FACTORS CONSIDERED IN DEVELOP2 MENT OF GUIDELINES.—In developing guide3 lines under paragraph (1), the Secretary shall

4 consider the following factors:

5 (i) Whether the area (or a significant

6 portion of the area) is a rural area (under

7 section 1886(d)(2)(D) of the Social Secu8 rity Act) and—

9 (I) is designated as a health pro10 fessional shortage area (under section

11 332(a) of the Public Health Service

12 Act), or meets the criteria for des13 ignation as such an area; or

14 (II) was previously designated as

15 such an area or previously met such

16 criteria for an extended period prior

17 to the designation of the area under

18 this section (in accordance with cri19 teria established by the Secretary).

20 (ii) The availability and adequacy of

21 health care providers and facilities for resi22 dents of the area.

23 (iii) The extent to which the availabil24 ity of assistance under other Federal and

25 State programs has failed to alleviate the
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1 lack of access to health care services for

2 residents of the area.

3 (iv) The percentage of residents of the

4 area whose income is at or below the pov5 erty level.

6 (v) The percentage of residents of the

7 area who are age 65 or older.

8 (vi) The existence of cultural or geo9 graphic barriers to access to health care

10 services in the area, including weather con11 ditions.

12 (3) REVIEW BY SECRETARY.—No designation

13 under paragraph (1) shall take effect under this sec14 tion unless the Secretary—

15 (A) has been notified of the proposed des16 ignation; and

17 (B) has not, within 60 days after the date

18 of receipt of the notice, disapproved the des19 ignation.

20 (4) PERIOD OF DESIGNATION.—A designation

21 under this section shall be effective during a period

22 specified by the Governor of not longer than 3 years.

23 The Governor may extend the designation for addi24 tional 3-year periods, except that a State may not

25 receive assistance under subsection (a)(3) for
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1 amounts expended during any such additional

2 periods.

3 (c) REQUIREMENTS FOR STATE ACCESS PLANS.—A

4 State plan to increase the access of residents of chronically

5 underserved areas to health care services meets the re6 quirements of this section if the Secretary finds that the

7 plan was developed with the participation of health care

8 providers and facilities and residents of the area that is

9 the subject of the plan, together with such other require10 ments as the Secretary may impose.

11 (d) AUTHORIZATION OF APPROPRIATIONS.—There

12 are authorized to be appropriated for assistance under this

13 section $10,000,000 for each of the first 3 fiscal years

14 beginning after the date on which the Secretary develops

15 guidelines for the designation of areas as chronically un16 derserved areas under subsection (b)(2).

17 SEC. 202. TECHNICAL ASSISTANCE GRANTS FOR NET18 WORKS.

19 (a) IN GENERAL.—The Secretary shall make funds

20 available under this section to provide technical assistance

21 (including information regarding eligibility for other Fed22 eral programs) and advice for entities described in sub23 section (b) seeking to establish or enhance a community

24 rural health network (as defined in section 204) in an un25 derserved rural area.
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1 (b) ENTITIES ELIGIBLE TO RECEIVE FUNDS.—The

2 following entities are eligible to receive funds for technical

3 assistance under this section:

4 (1) An entity receiving a grant under section

5 203.

6 (2) A State or unit of local government.

7 (3) An entity providing health care services (in8 cluding health professional education services) in the

9 area involved.

10 (c) USE OF FUNDS.—

11 (1) IN GENERAL.—Funds made available under

12 this section may be used—

13 (A) for planning a community rural health

14 network and the submission of the plan for the

15 network to the Secretary under section 203(c)

16 (subject to the limitation described in para17 graph (2));

18 (B) to provide assistance in conducting

19 community-based needs and prioritization, iden20 tifying existing regional health resources, and

21 developing networks, utilizing existing local pro22 viders and facilities where appropriate;

23 (C) to provide advice on obtaining the

24 proper balance of primary and secondary facili25 ties for the population served by the network;
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1 (D) to provide assistance in coordinating

2 arrangements for tertiary care;

3 (E) to provide assistance in recruitment

4 and retention of health care professionals;

5 (F) to provide assistance in coordinating

6 the delivery of emergency services with the pro7 vision of other health care services in the area

8 served by the network;

9 (G) to provide assistance in coordinating

10 arrangements for mental health and substance

11 abuse treatment services; and

12 (H) to provide information regarding the

13 area or proposed network’s eligibility for Fed14 eral and State assistance for health care-related

15 activities, together with information on funds

16 available through private sources.

17 (2) LIMITATION ON AMOUNT AVAILABLE FOR

18 DEVELOPMENT OF NETWORK.—The amount of fi19 nancial assistance available to an entity for activities

20 described in paragraph (1) may not exceed $50,000

21 and may not be available for a period of time ex22 ceeding 1 year.

23 (d) USE OF RURAL HEALTH OFFICES.—In carrying

24 out this section with respect to entities in rural areas, the

25 Secretary shall make funds available to the entities
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1 through the State offices of rural health or through appro2 priate entities designated by such offices.

3 (e) AUTHORIZATION OF APPROPRIATIONS.—There

4 are authorized to be appropriated $10,000,000 for each

5 of fiscal years 1997 through 2001 to carry out this sec6 tion. Amounts appropriated under this section shall be

7 available until expended.

8 SEC. 203. DEVELOPMENT GRANTS FOR NETWORKS.

9 (a) IN GENERAL.—The Secretary shall provide finan10 cial assistance to eligible entities for the purpose of provid11 ing for the development and implementation of community

12 rural health networks (as defined in section 204). In pro13 viding such assistance, the Secretary shall give priority to

14 eligible entities that will carry out such purpose in States

15 that have developed a plan under section 201.

16 (b) ELIGIBLE ENTITIES.—

17 (1) IN GENERAL.—An entity is eligible to re18 ceive financial assistance under this section only if

19 the entity meets the requirements of subparagraphs

20 (A) through (C) as follows:

21 (A) The entity—

22 (i) is based in a rural area; OR

23 (ii) is described in paragraph (2) or

24 (3) of section 202(b).
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1 (B) The entity is undertaking to develop

2 and implement a community rural health net3 work in one or more underserved rural areas

4 (as defined in section 204) with the active par5 ticipation of at least 3 health care providers or

6 facilities in the area.

7 (C) The entity has consulted with the local

8 governments of the area to be served by the

9 network and with individuals who reside in the

10 area.

11 (2) COORDINATION WITH PROVIDERS OUTSIDE

12 OF AREA PERMITTED.—Nothing in this section shall

13 be construed as preventing an entity that coordi14 nates the delivery of services in an underserved rural

15 area with an entity outside the area from qualifying

16 for financial assistance under this section, or as pre17 venting an entity consisting of a consortia of mem18 bers located in adjoining States from qualifying for

19 such assistance.

20 (3) PERMITTING ENTITIES NOT RECEIVING

21 FUNDING FOR DEVELOPMENT OF PLAN TO RECEIVE

22 FUNDING FOR IMPLEMENTATION.—An entity that is

23 eligible to receive financial assistance under this sec24 tion may receive assistance to carry out activities de25 scribed in subsection (c)(1)(B) notwithstanding that
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1 the entity does not receive assistance to carry out

2 activities described in subsection (c)(1)(A).

3 (c) USE OF FUNDS.—

4 (1) IN GENERAL.—Financial assistance made

5 available to eligible entities under this section may

6 be used only—

7 (A) for the development of a community

8 health network and the submission of the plan

9 for the network to the Secretary; and

10 (B) after the Secretary approves the plan

11 for the network, for activities to implement the

12 network, including (but not limited to)—

13 (i) establishing information systems,

14 including telecommunications,

15 (ii) recruiting health care providers,

16 (iii) providing services to enable indi17 viduals to have access to health care serv18 ices, including transportation and language

19 interpretation services (including interpre20 tation services for the hearing-impaired),

21 and

22 (iv) establishing and operating a com23 munity health advisor program described

24 in paragraph (2).

25 (2) COMMUNITY HEALTH ADVISOR PROGRAM.—
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1 (A) PROGRAM DESCRIBED.—In paragraph

2 (1), a ‘‘community health advisor program’’ is

3 a program under which community health advi4 sors carry out the following activities:

5 (i) Collaborating efforts with health

6 care providers and related entities to facili7 tate the provision of health services and

8 health-related social services.

9 (ii) Providing public education on

10 health promotion and disease prevention

11 and efforts to facilitate the use of available

12 health services and health-related social

13 services.

14 (iii) Providing health-related counsel15 ing.

16 (iv) Making referrals for available

17 health services and health-related social

18 services.

19 (v) Improving the ability of individ20 uals to use health services and health-relat21 ed social services under Federal, State,

22 and local programs through assisting indi23 viduals in establishing eligibility under the

24 programs.
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1 (vi) Providing outreach services to in2 form the community of the availability of

3 the services provided under the program.

4 (B) COMMUNITY HEALTH ADVISOR DE5 FINED.—In subparagraph (A), the term ‘‘com6 munity health advisor’’ means, with respect to

7 a community health advisor program, an indi8 vidual—

9 (i) who has demonstrated the capacity

10 to carry out one or more of the activities

11 carried out under the program; and

12 (ii) who, for not less than one year,

13 has been a resident of the community in

14 which the program is to be operated.

15 (3) LIMITATIONS ON ACTIVITIES FUNDED.—Fi16 nancial assistance made available under this section

17 may not be used for any of the following:

18 (A) For construction or renovation of a

19 telecommunications system.

20 (B) For construction or remodeling of

21 health care facilities.

22 (4) LIMITATION ON AMOUNT AVAILABLE FOR

23 DEVELOPMENT OF NETWORK.—The amount of fi24 nancial assistance available to an entity for activities

25 described in paragraph (1)(A) may not exceed
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•HR 3753 IH

1 $50,000 and may not be made available for a period

2 of time exceeding 1 year.

3 (d) APPLICATION.—

4 (1) IN GENERAL.—No financial assistance shall

5 be provided under this section to an entity unless

6 the entity has submitted to the Secretary, in a time

7 and manner specified by the Secretary, and had ap8 proved by the Secretary an application.

9 (2) INFORMATION TO BE INCLUDED.—Each

10 such application shall include—

11 (A) a description of the community rural

12 health network, including service area and ca13 pacity, and

14 (B) a description of how the proposed net15 work will utilize existing health care facilities in

16 a manner that avoids unnecessary duplication.

17 (e) AUTHORIZATION OF APPROPRIATIONS.—

18 (1) IN GENERAL.—There are authorized to be

19 appropriated $50,000,000 for each of fiscal years

20 1997 through 2001 to carry out this section.

21 Amounts appropriated under this section shall be

22 available until expended.

23 (2) ANNUAL LIMIT ON ASSISTANCE TO GRANT24 EE.—The amount of financial assistance provided to
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1 an entity under this section during a year may not

2 exceed $250,000.

3 SEC. 204. DEFINITIONS.

4 (a) COMMUNITY RURAL HEALTH NETWORK.—For

5 purposes of this title, the term ‘‘community rural health

6 network’’ means a formal cooperative arrangement be7 tween participating hospitals, rural health clinics, physi8 cians, and other health care providers which—

9 (1) is located in an underserved rural area;

10 (2) furnishes health care services to individuals

11 residing in the area; and

12 (3) is governed by a board of directors selected

13 by participating health care providers and residents

14 of the area.

15 (b) OTHER DEFINITIONS.—For purposes of this title:

16 (1) The term ‘‘rural area’’ has the meaning

17 given such term in section 1886(d)(2)(D) of the So18 cial Security Act.

19 (2) The term ‘‘Secretary’’ means the Secretary

20 of Health and Human Services.

21 (3) The term ‘‘State’’ means each of the several

22 States, the District of Columbia, Puerto Rico, the

23 Virgin Islands, Guam, the Northern Mariana Is24 lands, and American Samoa.
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1 (4) The term ‘‘underserved rural area’’ means

2 a rural area designated—

3 (A) as a health professional shortage area

4 under section 332(a) of the Public Health Serv5 ice Act; or

6 (B) as a chronically underserved area

7 under section 201.

8 SEC. 205. FINANCING THROUGH TERMINATION OF CERTAIN

9 GRANT PROGRAMS.

10 Notwithstanding any other provision of law, no funds

11 are authorized to be appropriated to carry out the follow12 ing programs for fiscal year 1997 or any subsequent fiscal

13 year:

14 (A) The grant program for rural health

15 transition under section 4005(e) of the Omni16 bus Budget Reconciliation Act of 1987.

17 (B) The program for rural outreach grants

18 (which program was, for fiscal year 1995, car19 ried out by the Health Resources and Services

20 Administration with funds made available under

21 Public Law 103–333 for such grants).
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1 TITLE III—MEDICARE RURAL

2 PRIMARY CARE HOSPITALS

3 AND RURAL EMERGENCY AC4 CESS CARE HOSPITALS

5 Subtitle A—Rural Primary Care

6 Hospital Program

7 SEC. 301. DESIGNATION OF RURAL PRIMARY CARE HOS8 PITALS.

9 Section 1820 of the Social Security Act (42 U.S.C.

10 1395i–4) is amended to read as follows:

11 ‘‘MEDICARE RURAL PRIMARY CARE HOSPITAL PROGRAM

12 ‘‘SEC. 1820. (a) STATE DESIGNATION OF FACILI13 TIES.—

14 ‘‘(1) IN GENERAL.—A State may designate one

15 or more facilities as a rural primary care hospital in

16 accordance with paragraph (2).

17 ‘‘(2) CRITERIA FOR DESIGNATION AS RURAL

18 PRIMARY CARE HOSPITAL.—A State may designate a

19 facility as a rural primary care hospital if the facil20 ity—

21 ‘‘(A) is located in a county (or equivalent

22 unit of local government) in a rural area (as de23 fined in section 1886(d)(2)(D)) that—
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•HR 3753 IH

1 ‘‘(i) is located more than a 20-mile

2 drive from a hospital, or another facility

3 described in this subsection, or

4 ‘‘(ii) is certified by the State as being

5 a necessary provider of health care services

6 to residents in the area because of local ge7 ography or service patterns;

8 ‘‘(B) makes available 24-hour emergency

9 care services;

10 ‘‘(C) provides not more than 15 acute care

11 inpatient beds (meeting such standards as the

12 Secretary may establish) for providing inpatient

13 care for a period not to exceed 96 hours (unless

14 a longer period is required because transfer to

15 a hospital is precluded because of inclement

16 weather or other emergency conditions), except

17 that a peer review organization or equivalent

18 entity may, on request, waive the 96-hour re19 striction on a case-by-case basis;

20 ‘‘(D) meets such staffing requirements as

21 would apply under section 1861(e) to a hospital

22 located in a rural area, except that—

23 ‘‘(i) the facility need not meet hospital

24 standards relating to the number of hours

25 during a day, or days during a week, in
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1 which the facility must be open and fully

2 staffed, except insofar as the facility is re3 quired to make available emergency care

4 services as determined under subparagraph

5 (B) and must have nursing services avail6 able on a 24-hour basis, but need not oth7 erwise staff the facility except when an in8 patient is present,

9 ‘‘(ii) the facility may provide any serv10 ices otherwise required to be provided by a

11 full-time, on-site dietitian, pharmacist, lab12 oratory technician, medical technologist,

13 and radiological technologist on a part14 time, off-site basis under arrangements as

15 defined in section 1861(w)(1), and

16 ‘‘(iii) the inpatient care described in

17 subparagraph (C) may be provided by a

18 physician’s assistant, nurse practitioner, or

19 clinical nurse specialist subject to the over20 sight of a physician who need not be

21 present in the facility;

22 ‘‘(E) meets the requirements of subpara23 graph (I) of paragraph (2) of section 1861(aa);

24 and
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•HR 3753 IH

1 ‘‘(F) has executed and in effect an agree2 ment described in subsection (b)(1).

3 ‘‘(b) AGREEMENTS.—

4 ‘‘(1) IN GENERAL.—Each rural primary care

5 hospital shall have an agreement with respect to

6 each item described in paragraph (2) with at least

7 1 hospital (as defined in section 1861(e)).

8 ‘‘(2) ITEMS DESCRIBED.—The items described

9 in this paragraph are the following:

10 ‘‘(A) Patient referral and transfer.

11 ‘‘(B) The development and use of commu12 nications systems including (where feasible)—

13 ‘‘(i) telemetry systems, and

14 ‘‘(ii) systems for electronic sharing of

15 patient data.

16 ‘‘(C) The provision of emergency and non17 emergency transportation among the facility

18 and the hospital.

19 ‘‘(3) CREDENTIALING AND QUALITY ASSUR20 ANCE.—Each rural primary care hospital shall have

21 an agreement with respect to credentialing and qual22 ity assurance with at least 1—

23 ‘‘(A) hospital,

24 ‘‘(B) peer review organization or equivalent

25 entity, or
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•HR 3753 IH

1 ‘‘(C) other appropriate and qualified entity

2 identified by the State.

3 ‘‘(c) CERTIFICATION BY THE SECRETARY.—The Sec4 retary shall certify a facility as a rural primary care hos5 pital if the facility—

6 ‘‘(1) is designated as a rural primary care hos7 pital by the State in which it is located; and

8 ‘‘(2) meets such other criteria as the Secretary

9 may require.

10 ‘‘(d) PERMITTING MAINTENANCE OF SWING BEDS.—

11 Nothing in this section shall be construed to prohibit a

12 State from designating or the Secretary from certifying

13 a facility as a rural primary care hospital solely because,

14 at the time the facility applies to the State for designation

15 as a rural primary care hospital, there is in effect an

16 agreement between the facility and the Secretary under

17 section 1883 under which the facility’s inpatient hospital

18 facilities are used for the furnishing of extended care serv19 ices, except that the number of beds used for the furnish20 ing of such services may not exceed 25 beds (minus the

21 number of inpatient beds used for providing inpatient care

22 in the facility pursuant to subsection (a)). For purposes

23 of the previous sentence, the number of beds of the facility

24 used for the furnishing of extended care services shall not

25 include any beds of a unit of the facility that is licensed
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1 as a distinct-part skilled nursing facility at the time the

2 facility applies to the State for designation as a rural pri3 mary care hospital.

4 ‘‘(e) WAIVER OF CONFLICTING PART A PROVI5 SIONS.—The Secretary is authorized to waive such provi6 sions of this part and part C as are necessary to conduct

7 the program established under this section.’’.

8 SEC. 302. PAYMENT ON A REASONABLE COST BASIS.

9 (a) MEDICARE PART A.—Section 1814(l) of the So10 cial Security Act (42 U.S.C. 1395f(l)) is amended to read

11 as follows:

12 ‘‘(l) PAYMENT FOR INPATIENT RURAL PRIMARY

13 CARE HOSPITAL SERVICES.—The amount of payment

14 under this part for inpatient rural primary care hospital

15 services is the reasonable costs of the rural primary care

16 hospital in providing such services.’’.

17 (b) MEDICARE PART B.—Section 1834(g) of such

18 Act (42 U.S.C. 1395m(g)) is amended to read as follows:

19 ‘‘(g) PAYMENT FOR OUTPATIENT RURAL PRIMARY

20 CARE HOSPITAL SERVICES.—The amount of payment

21 under this part for outpatient rural primary care hospital

22 services is the reasonable costs of the rural primary care

23 hospital in providing such services.’’.
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1 SEC. 303. LENGTHENING MAXIMUM PERIOD OF PERMITTED

2 INPATIENT STAY.

3 Section 1814(a)(8) of the Social Security Act (42

4 U.S.C. 1395f(a)(8)) is amended by striking ‘‘72 hours’’

5 and inserting ‘‘96 hours’’.

6 SEC. 304. PAYMENT CONTINUED TO DESIGNATED ESSEN7 TIAL ACCESS COMMUNITY HOSPITALS.

8 Section 1886(d)(5)(D) of the Social Security Act (42

9 U.S.C. 1395ww(d)(5)(D)) is amended—

10 (1) in clause (iii)(III), by inserting ‘‘as in effect

11 on September 30, 1996’’ before the period at the

12 end; and

13 (2) in clause (v), by inserting ‘‘as in effect on

14 September 30, 1996’’ after ‘‘1820(i)(1)’’ and after

15 ‘‘1820(g)’’.

16 SEC. 305. EFFECTIVE DATE.

17 The amendments made by this subtitle shall apply to

18 services furnished on or after October 1, 1996.

19 Subtitle B—Rural Emergency

20 Access Care Hospitals

21 SEC. 311. ESTABLISHMENT OF HOSPITALS.

22 (a) IN GENERAL.—Section 1861 of the Social Secu23 rity Act (42 U.S.C. 1395x) is amended by adding at the

24 end the following new subsection:
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•HR 3753 IH

1 ‘‘Rural Emergency Access Care Hospital; Rural

2 Emergency Access Care Hospital Services

3 ‘‘(oo)(1) The term ‘rural emergency access care hos4 pital’ means, for a fiscal year, a facility with respect to

5 which the Secretary finds the following:

6 ‘‘(A) The facility is located in a rural area (as

7 defined in section 1886(d)(2)(D)).

8 ‘‘(B) The facility was a hospital under this title

9 at any time during the 5-year period that ends on

10 the date of the enactment of this subsection.

11 ‘‘(C) The facility is in danger of closing due to

12 low inpatient utilization rates and operating losses,

13 and the closure of the facility would limit the access

14 to emergency services of individuals residing in the

15 facility’s service area.

16 ‘‘(D) The facility has entered into (or plans to

17 enter into) an agreement with a hospital with a par18 ticipation agreement in effect under section 1866(a),

19 and under such agreement the hospital shall accept

20 patients transferred to the hospital from the facility

21 and receive data from and transmit data to the facil22 ity.

23 ‘‘(E) There is a practitioner who is qualified to

24 provide advanced cardiac life support services (as de-
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•HR 3753 IH

1 termined by the State in which the facility is lo2 cated) on-site at the facility on a 24-hour basis.

3 ‘‘(F) A physician is available on-call to provide

4 emergency medical services on a 24-hour basis.

5 ‘‘(G) The facility meets such staffing require6 ments as would apply under section 1861(e) to a

7 hospital located in a rural area, except that—

8 ‘‘(i) the facility need not meet hospital

9 standards relating to the number of hours dur10 ing a day, or days during a week, in which the

11 facility must be open, except insofar as the fa12 cility is required to provide emergency care on

13 a 24-hour basis under subparagraphs (E) and

14 (F); and

15 ‘‘(ii) the facility may provide any services

16 otherwise required to be provided by a full-time,

17 on-site dietitian, pharmacist, laboratory techni18 cian, medical technologist, or radiological tech19 nologist on a part-time, off-site basis.

20 ‘‘(H) The facility meets the requirements appli21 cable to clinics and facilities under subparagraphs

22 (C) through (J) of paragraph (2) of section

23 1861(aa) and of clauses (ii) and (iv) of the second

24 sentence of such paragraph (or, in the case of the

25 requirements of subparagraph (E), (F), or (J) of
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1 such paragraph, would meet the requirements if any

2 reference in such subparagraph to a ‘nurse practi3 tioner’ or to ‘nurse practitioners’ were deemed to be

4 a reference to a ‘nurse practitioner or nurse’ or to

5 ‘nurse practitioners or nurses’); except that in deter6 mining whether a facility meets the requirements of

7 this subparagraph, subparagraphs (E) and (F) of

8 that paragraph shall be applied as if any reference

9 to a ‘physician’ is a reference to a physician as de10 fined in section 1861(r)(1).

11 ‘‘(2) The term ‘rural emergency access care hospital

12 services’ means the following services provided by a rural

13 emergency access care hospital and furnished to an indi14 vidual over a continuous period not to exceed 24 hours

15 (except that such services may be furnished over a longer

16 period in the case of an individual who is unable to leave

17 the hospital because of inclement weather):

18 ‘‘(A) An appropriate medical screening exam19 ination (as described in section 1867(a)).

20 ‘‘(B) Necessary stabilizing examination and

21 treatment services for an emergency medical condi22 tion and labor (as described in section 1867(b)).’’.

23 (b) REQUIRING RURAL EMERGENCY ACCESS CARE

24 HOSPITALS TO MEET HOSPITAL ANTI-DUMPING RE25 QUIREMENTS.—Section 1867(e)(5) of the Social Security
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1 Act (42 U.S.C. 1395dd(e)(5)) is amended by striking

2 ‘‘1861(mm)(1))’’ and inserting ‘‘1861(mm)(1)) and a

3 rural emergency access care hospital (as defined in section

4 1861(oo)(1))’’.

5 (c) COVERAGE AND PAYMENT FOR SERVICES.—

6 (1) COVERAGE.—Section 1832(a)(2) of the So7 cial Security Act (42 U.S.C. 1395k(a)(2)) is amend8 ed—

9 (A) by striking ‘‘and’’ at the end of sub10 paragraph (I);

11 (B) by striking the period at the end of

12 subparagraph (J) and inserting ‘‘; and’’; and

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

14 subparagraph:

15 ‘‘(K) rural emergency access care hospital

16 services (as defined in section 1861(oo)(2)).’’.

17 (2) PAYMENT BASED ON PAYMENT FOR OUT18 PATIENT CRITICAL ACCESS HOSPITAL SERVICES.—

19 (A) IN GENERAL.—Section 1833(a)(6) of

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

21 1395l(a)(6)), as amended by section 331(2)(A),

22 is amended by striking ‘‘services,’’ and inserting

23 ‘‘services and rural emergency access care hos24 pital services,’’.
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1 (B) PAYMENT METHODOLOGY DE2 SCRIBED.—Section 1834(g) of the Social Secu3 rity Act (42 U.S.C. 1395m(g)), as amended by

4 section 331(2)(B), is amended—

5 (i) in the heading, by striking ‘‘SERV6 ICES’’ and inserting ‘‘SERVICES AND

7 RURAL EMERGENCY ACCESS CARE HOS8 PITAL SERVICES’’; and

9 (ii) by adding at the end the following

10 new sentence: ‘‘The amount of payment for

11 rural emergency access care hospital serv12 ices provided during a year shall be deter13 mined using the applicable method pro14 vided under this subsection for determining

15 payment for outpatient rural primary care

16 hospital services during the year.’’.

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

18 this section shall apply to fiscal years beginning on or

19 after October 1, 1996.
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1 TITLE IV—INCENTIVES FOR

2 HEALTH PROFESSIONALS TO

3 PRACTICE IN RURAL AREAS

4 Subtitle A—National Health

5 Service Corps

6 SEC. 401. NATIONAL HEALTH SERVICE CORPS SCHOLAR7 SHIP AND LOAN REPAYMENTS EXCLUDED

8 FROM GROSS INCOME.

9 (a) IN GENERAL.—Part III of subchapter B of chap10 ter 1 of the Internal Revenue Code of 1986 (relating to

11 items specifically excluded from gross income) is amended

12 by redesignating section 137 as section 138 and by insert13 ing after section 136 the following new section:

14 ‘‘SEC. 137. NATIONAL HEALTH SERVICE CORPS SCHOLAR15 SHIP AND LOAN PAYMENTS.

16 ‘‘(a) GENERAL RULE.—Gross income shall not in17 clude any qualified scholarship payment or any qualified

18 loan repayment.

19 ‘‘(b) QUALIFIED PAYMENTS.—For purposes of this

20 section, the term ‘qualified scholarship payment’ means

21 any payment made on behalf of the taxpayer by the Na22 tional Health Service Corps Scholarship Program under

23 section 338A(g) of the Public Health Service Act, and the

24 term ‘qualified loan repayment’ means any payment made

25 on behalf of the taxpayer by the National Health Service
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1 Corps Loan Repayment Program under section 338B(g)

2 of such Act.’’.

3 (b) CONFORMING AMENDMENT.—Paragraph (3) of

4 section 338B(g) of the Public Health Service Act is

5 amended by striking ‘‘Federal, State, or local’’ and insert6 ing ‘‘State or local’’.

7 (c) CLERICAL AMENDMENT.—The table of sections

8 for part III of subchapter B of chapter 1 of the Internal

9 Revenue Code of 1986 is amended by striking the item

10 relating to section 137 and inserting the following:

‘‘Sec. 137. National Health Service Corps scholarship and loan

payments.

‘‘Sec. 138. Cross references to other Acts.’’.

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

12 this section shall apply to payments made under sections

13 338A(g) and 338B(g) of the Public Health Service Act

14 after the date of the enactment of this Act.

15 SEC. 402. STUDY REGARDING ALLOCATION OF CORPS MEM16 BERS AMONG SHORTAGE AREAS.

17 (a) IN GENERAL.—The Secretary of Health and

18 Human Services shall conduct a study for the purpose of

19 determining, with respect to the assignment of members

20 of the National Health Service Corps under subpart II of

21 part D of title III of the Public Health Service Act—

22 (1) whether the statutory and administrative

23 criteria for the assignment of Corps members should

24 be modified in order to ensure that the members are
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1 equitably allocated among health professional short2 age areas; and

3 (2) if so, the recommendations of the Secretary

4 for modifications in the criteria.

5 (b) REPORT.—Not later than May 1, 1997, the Sec6 retary shall complete the study required in subsection (a)

7 and submit to the Congress a report describing the find8 ings made in the study.

9 SEC. 403. PRIORITY IN ASSIGNMENT OF CORPS MEMBERS;

10 COMMUNITY RURAL HEALTH NETWORKS.

11 Section 333A(a)(1)(B) of the Public Health Service

12 Act (42 U.S.C. 254f–1(a)(1)(B)) is amended—

13 (1) in clause (iii), by striking ‘‘and’’ after the

14 semicolon at the end;

15 (2) in clause (iv), by adding ‘‘and’’ after the

16 semicolon at the end; and

17 (3) by adding at the end the following clause:

18 ‘‘(v) is a participant in a community

19 rural health network, as defined in section

20 204 of the Rural Health Improvement Act

21 of 1996.’’.
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1 Subtitle B—Primary Care Services

2 Furnished in Shortage Areas

3 SEC. 411. ADDITIONAL PAYMENTS UNDER MEDICARE FOR

4 PRIMARY CARE SERVICES FURNISHED IN

5 RURAL SHORTAGE AREAS.

6 (a) INCREASE IN AMOUNT OF ADDITIONAL PAY7 MENT.—Section 1833(m) of the Social Security Act (42

8 U.S.C. 1395l(m)) is amended by striking ‘‘10 percent’’

9 and inserting ‘‘20 percent’’.

10 (b) RESTRICTION TO PRIMARY CARE SERVICES.—

11 Section 1833(m) of the Social Security Act (42 U.S.C.

12 1395l(m)) is amended—

13 (1) by striking ‘‘physicians’ services’’ and in14 serting ‘‘primary care services (as defined in section

15 1842(i)(4) and including services described in such

16 section that are furnished by a physician assistant,

17 nurse practitioner, or nurse midwife and that would

18 be physicians’ services if furnished by a physician)’’,

19 (2) by striking ‘‘in an area’’ and inserting ‘‘in

20 a rural area’’, and

21 (3) by inserting ‘‘or physician assistant, nurse

22 practitioner, or nurse midwife furnishing the serv23 ice’’ after ‘‘physician’’.

24 (c) EXTENSION OF PAYMENT FOR FORMER SHORT25 AGE AREAS.—
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1 (1) IN GENERAL.—Section 1833(m) of the So2 cial Security Act (42 U.S.C. 1395l(m)) is amended

3 by striking ‘‘area,’’ and inserting ‘‘area (or, in the

4 case of an area for which the designation as a health

5 professional shortage area under such section is

6 withdrawn, in the case of such services furnished to

7 such an individual during the 3-year period begin8 ning on the effective date of the withdrawal of such

9 designation),’’.

10 (2) EFFECTIVE DATE.—The amendment made

11 by paragraph (1) shall apply to services furnished in

12 an area for which the designation as a health profes13 sional shortage area under section 332(a)(1)(A) of

14 the Public Health Service Act is withdrawn on or

15 after October 1, 1996.

16 (d) REQUIRING CARRIERS TO REPORT ON SERVICES

17 PROVIDED.—Section 1842(b)(3) of the Social Security

18 Act (42 U.S.C. 1395u(b)(3)) is amended—

19 (1) by striking ‘‘and’’ at the end of subpara20 graph (I); and

21 (2) by inserting after subparagraph (I) the fol22 lowing new subparagraph:

23 ‘‘(J) will provide information to the Secretary

24 not later than 30 days after the end of the contract

25 year on the types of providers to whom the carrier
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1 made additional payments during the year for cer2 tain services pursuant to section 1833(m), together

3 with a description of the services furnished by such

4 providers during the year; and’’.

5 (e) EFFECTIVE DATE.—The amendments made by

6 subsections (a), (b), and (d) shall apply to services fur7 nished on or after October 1, 1996.

8 (f) SUBMISSION OF REPORT ON STUDY.—The Sec9 retary of Health and Human Services shall transmit to

10 Congress, by not later than May 1, 1997, a report on the

11 study being conducted on the criteria for designation of

12 health professional shortage areas under subpart II of

13 part D of title III of the Public Health Service Act and

14 for designation of medically underserved areas under sec15 tion 330(b) of such Act.

16 TITLE V—CLASSIFICATION OF

17 RURAL REFERRAL CENTERS

18 SEC. 501. CLASSIFICATION OF CENTERS.

19 (a) PROHIBITING DENIAL OF REQUEST FOR RECLAS20 SIFICATION ON BASIS OF COMPARABILITY OF WAGES.—

21 (1) IN GENERAL.—Section 1886(d)(10)(D) of

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

23 1395ww(d)(10)(D)) is amended—

24 (A) by redesignating clause (iii) as clause

25 (iv); and
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1 (B) by inserting after clause (ii) the follow2 ing new clause:

3 ‘‘(iii) Under the guidelines published by the Secretary

4 under clause (i), in the case of a hospital which is classi5 fied by the Secretary as a rural referral center under para6 graph (5)(C), the Board may not reject the application

7 of the hospital under this paragraph on the basis of any

8 comparison between the average hourly wage of the hos9 pital and the average hourly wage of hospitals in the area

10 in which it is located.’’.

11 (2) EFFECTIVE DATE.—Notwithstanding sec12 tion 1886(d)(10)(C)(ii) of the Social Security Act, a

13 hospital may submit an application to the Medicare

14 Geographic Classification Review Board during the

15 30-day period beginning on the date of the enact16 ment of this Act requesting a change in its classi17 fication for purposes of determining the area wage

18 index applicable to the hospital under section

19 1886(d)(3)(D) of such Act for fiscal year 1997, if

20 the hospital would be eligible for such a change in

21 its classification under the standards described in

22 section 1886(d)(10)(D) (as amended by paragraph

23 (1)) but for its failure to meet the deadline for appli24 cations under section 1886(d)(10)(C)(ii).
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1 (b) CONTINUING TREATMENT OF PREVIOUSLY DES2 IGNATED CENTERS.—Any hospital classified as a rural re3 ferral center by the Secretary of Health and Human Serv4 ices under section 1886(d)(5)(C) of the Social Security

5 Act for fiscal year 1991 shall be classified as such a rural

6 referral center for fiscal year 1997 and each subsequent

7 fiscal year.

8 TITLE VI—PROMOTION OF

9 HEALTH CENTERS IN RURAL

10 REGIONS

11 SEC. 601. EXPANSION OF HEALTH CENTERS IN RURAL RE12 GIONS.

13 Section 330 of the Public Health Service Act (42

14 U.S.C. 254c) is amended by adding at the end the follow15 ing new subsection:

16 ‘‘(l) In making grants in rural areas for new or ex17 panded services for each fiscal year under this section, the

18 Secretary shall give priority to projects that would be lo19 cated in a State, or county or region of a State, that is

20 not already serviced by an existing community health cen21 ter.’’.

22 SEC. 602. COLLABORATION OF HEALTH CENTERS WITH

23 COMMUNITY HOSPITALS.

24 Section 330 of the Public Health Service Act (42

25 U.S.C. 254c), as amended by section 601, is further
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1 amended by adding at the end the following new sub2 section:

3 ‘‘(m)(1) In making grants under this section for new

4 or expanded services in rural areas for each fiscal year,

5 the Secretary shall give special consideration to projects

6 which have entered into a collaborative agreement with a

7 community hospital that meets the following requirements:

8 ‘‘(A) The community health center is located in,

9 or adjacent to, the community hospital.

10 ‘‘(B) To the extent practicable, excess facilities

11 and equipment in or owned by the community hos12 pital are available for use by the community health

13 center.

14 ‘‘(C) The community health center and the hos15 pital avoid unnecessary duplication of facilities and

16 equipment, except that the center may install appro17 priate support equipment for routine primary health

18 services.

19 ‘‘(D) The community health center provides pri20 mary health services.

21 ‘‘(E) To the extent practicable, the community

22 health center provides referrals to providers of sup23 plemental health services.
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1 ‘‘(F) The physicians of the community health

2 center have admitting privileges at the community

3 hospital.

4 ‘‘(G) To ensure quality, efficiency, and cost-ef5 fectiveness, the community health center and the

6 community hospital will work in collaboration to di7 rect patients to the appropriate location for care.

8 ‘‘(2) For purposes of this subsection, the term ‘com9 munity hospital’ means a public general hospital that—

10 ‘‘(A) is owned and operated by a State, county,

11 or unit of local government or is a private nonprofit

12 community hospital,

13 ‘‘(B) has less than 75 beds, and

14 ‘‘(C) primarily serves a rural area designated

15 under subsection (b)(3) as a medically underserved

16 area.

17 ‘‘(3) For purposes of this subsection, the term ‘rural

18 area’ has the meaning given such term in section

19 1886(d)(2)(D) of the Social Security Act.’’.

20 TITLE VII—MEDICARE PAYMENT

21 METHODOLOGIES

22 SEC. 701. TELEMEDICINE SERVICES.

23 The Secretary of Health and Human Services shall

24 establish a methodology for making payments under part

25 B of the medicare program for telemedicine services fur-
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1 nished on an emergency basis to individuals residing in

2 a rural area (as defined in section 1886(d)(2)(D)).

3 TITLE VIII—ANTITRUST

4 SEC. 801. SENSE OF CONGRESS RELATING TO APPLICATION

5 OF GUIDELINES.

6 It is the sense of Congress that—

7 (1) the Federal Trade Commission, in conjunc8 tion with the Justice Department, give special con9 sideration to antitrust guidelines affecting physician

10 and hospital networks located in rural areas during

11 its ongoing review of such guidelines; and

12 (2) the completion of the Commission’s review

13 be expedited to provide relief and clarification to

14 physicians and hospitals working to develop alter15 native means of providing accessible, affordable, and

16 quality health care services to all Americans, espe17 cially those living and working in rural areas.

18 TITLE IX—FINANCING

19 SEC. 901. EXTENSION AND EXPANSION OF EXISTING MEDI20 CARE SECONDARY PAYER REQUIREMENTS.

21 (a) DATA MATCH.—

22 (1) Section 1862(b)(5)(C) of the Social Security

23 Act (42 U.S.C. 1395y(b)(5)(C)) is amended by strik24 ing clause (iii).
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1 (2) Section 6103(l)(12) of the Internal Revenue

2 Code of 1986 is amended by striking subparagraph

3 (F).

4 (b) APPLICATION TO DISABLED INDIVIDUALS IN

5 LARGE GROUP HEALTH PLANS.—

6 (1) IN GENERAL.—Section 1862(b)(1)(B) of

7 the Social Security Act (42 U.S.C. 1395y(b)(1)(B))

8 is amended—

9 (A) in clause (i), by striking ‘‘clause (iv)’’

10 and inserting ‘‘clause (iii)’’,

11 (B) by striking clause (iii), and

12 (C) by redesignating clause (iv) as clause

13 (iii).

14 (2) CONFORMING AMENDMENTS.—Paragraphs

15 (1) through (3) of section 1837(i) of such Act (42

16 U.S.C. 1395p(i)) and the second sentence of section

17 1839(b) (42 U.S.C. 1395r(b)) are each amended by

18 striking ‘‘1862(b)(1)(B)(iv)’’ each place it appears

19 and inserting ‘‘1862(b)(1)(B)(iii)’’.

20 (c) INDIVIDUALS WITH END STAGE RENAL DIS21 EASE.—Section 1862(b)(1)(C) of such Act (42 U.S.C.

22 1395y(b)(1)(C)) is amended—

23 (1) in the last sentence by striking ‘‘October 1,

24 1998’’ and inserting ‘‘the date of the enactment of

25 the Rural Health Improvement Act of 1996’’; and
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1 (2) by adding at the end the following new sen2 tence: ‘‘Effective for items and services furnished on

3 or after the date of the enactment of the Rural

4 Health Improvement Act of 1996, (with respect to

5 periods beginning on or after the date that is 18

6 months prior to such date), clauses (i) and (ii) shall

7 be applied by substituting ‘30-month’ for ‘12-month’

8 each place it appears.’’.

Æ