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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2157 Introduced in House (IH)]

107th CONGRESS
  1st Session
                                H. R. 2157

  To address health care disparities in rural areas by amending title 
 XVIII of the Social Security Act, the Public Health Service Act, and 
       the Internal Revenue Code of 1986, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 13, 2001

   Mr. Moran of Kansas (for himself, Mr. McIntyre, Mr. Bereuter, Mr. 
Stenholm, Mr. Brady of Texas, Mr. Tanner, Mr. Nussle, Mr. Hilliard, Mr. 
   Pomeroy, Mr. Stupak, Mrs. Thurman, Mr. Bass, Mr. Nethercutt, Mr. 
   Wicker, Mrs. Emerson, Mr. Kind, Mr. Peterson of Pennsylvania, Mr. 
Sandlin, Mr. Thune, Mr. Sweeney, Mr. Carson of Oklahoma, Mr. Oberstar, 
   Mr. Rahall, Mr. Skelton, Mr. Watkins of Oklahoma, Mr. Gordon, Mr. 
Cramer, Mr. Ehlers, Mr. Holden, Mr. Lewis of Kentucky, Mr. McHugh, Mr. 
  Foley, Mr. Hilleary, Mr. Jones of North Carolina, Mr. Boswell, Mr. 
Goode, Ms. Hooley of Oregon, Mr. Pickering, Mr. Shimkus, Mr. Baird, Mr. 
Hayes, Mr. Phelps, Mr. Terry, Mr. Kennedy of Minnesota, Mr. Putnam, and 
  Mr. Ross) 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 address health care disparities in rural areas by amending title 
 XVIII of the Social Security Act, the Public Health Service Act, and 
       the Internal Revenue Code of 1986, and for other purposes.

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

SECTION 1. SHORT TITLE; REFERENCES TO BIPA; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rural Health Care 
Improvement Act of 2001''.
    (b) References to BIPA.--In this Act, the term ``BIPA'' means the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000 (114 Stat. 2763A-463 et seq.), as enacted into law by section 
1(a)(6) of Public Law 106-554.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--RURAL MEDICARE REFORMS

                Subtitle A--Rural Hospital Improvements

Sec. 101. Fairness in the disproportionate share hospital (DSH) 
                            adjustment for rural hospitals.
Sec. 102. Establishing a single standardized amount under inpatient 
                            hospital prospective payment system.
Sec. 103. Hospital geographic reclassification for labor costs for all 
                            items and services reimbursed under 
                            prospective payment systems.
Sec. 104. Treatment of certain physician pathology services.
               Subtitle B--Rural Home Health Improvements

Sec. 111. Elimination of 15 percent reduction in payment rates under 
                            the prospective payment system for home 
                            health services.
Sec. 112. Permanent increase for home health services furnished in a 
                            rural area.
              Subtitle C--Rural Health Clinic Improvements

Sec. 121. Improvement in rural health clinic reimbursement.
Sec. 122. Exclusion of certain rural health clinic services and 
                            Federally qualified health center services 
                            from the prospective payment system for 
                            covered skilled nursing facility services.
TITLE II--RURAL GRANT AND LOAN PROGRAMS FOR INFRASTRUCTURE, TECHNOLOGY, 
                             AND TELEHEALTH

Sec. 201. Capital infrastructure revolving loan program.
Sec. 202. High technology acquisition grant and loan program.
Sec. 203. Establishment of telehealth resource centers.
          TITLE III--NATIONAL HEALTH SERVICE CORPS TAX RELIEF

Sec. 301. Exclusion of certain amounts received under the National 
                            Health Service Corps Loan Repayment 
                            Program.

                    TITLE I--RURAL MEDICARE REFORMS

                Subtitle A--Rural Hospital Improvements

SEC. 101. FAIRNESS IN THE DISPROPORTIONATE SHARE HOSPITAL (DSH) 
              ADJUSTMENT FOR RURAL HOSPITALS.

    (a) Equalizing DSH Payment Amounts.--
            (1) In general.--Section 1886(d)(5)(F)(vii) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(F)(vii)) is amended by 
        inserting ``, and, after October 1, 2001, for any other 
        hospital described in clause (iv),'' after ``clause (iv)(I)''.
            (2) Conforming amendments.--Section 1886(d)(5)(F) of such 
        Act (42 U.S.C. 1395ww(d)(5)(F)), as amended by section 211 of 
        BIPA (114 Stat. 2763A-483), is amended--
                    (A) in clause (iv)--
                            (i) in subclause (II), by inserting ``or, 
                        for discharges occurring on or after October 1, 
                        2001, is equal to the percent determined in 
                        accordance with the applicable formula 
                        described in clause (vii)'' after ``clause 
                        (xiii)'';
                            (ii) in subclause (III), by inserting ``or, 
                        for discharges occurring on or after October 1, 
                        2001, is equal to the percent determined in 
                        accordance with the applicable formula 
                        described in clause (vii)'' after ``clause 
                        (xii)'';
                            (iii) in subclause (IV), by inserting ``or, 
                        for discharges occurring on or after October 1, 
                        2001, is equal to the percent determined in 
                        accordance with the applicable formula 
                        described in clause (vii)'' after ``clause (x) 
                        or (xi)'';
                            (iv) in subclause (V), by inserting ``or, 
                        for discharges occurring on or after October 1, 
                        2001, is equal to the percent determined in 
                        accordance with the applicable formula 
                        described in clause (vii)'' after ``clause 
                        (xi)'' ; and
                            (v) in subclause (VI), by inserting ``or, 
                        for discharges occurring on or after October 1, 
                        2001, is equal to the percent determined in 
                        accordance with the applicable formula 
                        described in clause (vii)'' after ``clause 
                        (x)'';
                    (B) in clause (viii), by striking ``The formula'' 
                and inserting ``For discharges occurring before October 
                1, 2001, the formula''; and
                    (C) in each of clauses (x), (xi), (xii), and 
                (xiii), by striking ``For purposes'' and inserting 
                ``With respect to discharges occurring before October 
                1, 2001, for purposes''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to discharges occurring on or after October 1, 2001.

SEC. 102. ESTABLISHING A SINGLE STANDARDIZED AMOUNT UNDER INPATIENT 
              HOSPITAL PROSPECTIVE PAYMENT SYSTEM.

    (a) In General.--Section 1886(d)(3)(A) of the Social Security Act 
(42 U.S.C. 1395ww(d)(3)(A)) is amended--
            (1) in clause (iv), by inserting ``and ending on or before 
        September 30, 2001,'' after ``October 1, 1995,''; and
            (2) by redesignating clauses (v) and (vi) as clauses (vii) 
        and (viii), respectively, and inserting after clause (iv) the 
        following new clauses:
            ``(v) For discharges occurring in the fiscal year beginning 
        on October 1, 2001, the average standardized amount for 
        hospitals located in areas other than a large urban area shall 
        be equal to the average standardized amount for hospitals 
        located in a large urban area.
            ``(vi) For discharges occurring in a fiscal year beginning 
        on or after October 1, 2002, the Secretary shall compute an 
        average standardized amount for hospitals located in all areas 
        within the United States equal to the average standardized 
        amount computed under clause (v) or this clause for the 
        previous fiscal year increased by the applicable percentage 
        increase under subsection (b)(3)(B)(i) for the fiscal year 
        involved.''.
    (b) Conforming Amendments.--
            (1) Update factor.--Section 1886(b)(3)(B)(i)(XVII) of the 
        Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XVII)) is 
        amended by striking ``for hospitals in all areas,'' and 
        inserting ``for hospitals located in a large urban area,''.
            (2) Computing drg-specific rates.--
                    (A) In general.--Section 1886(d)(3)(D) of such Act 
                (42 U.S.C. 1395ww(d)(3)(D)) is amended--
                            (i) in the heading by striking ``in 
                        different areas'';
                            (ii) in the matter preceding clause (i)--
                                    (I) by inserting ``for fiscal years 
                                before fiscal year 1997'' before ``a 
                                regional DRG prospective payment rate 
                                for each region,''; and
                                    (II) by striking ``each of which 
                                is'';
                            (iii) in clause (i)--
                                    (I) by inserting ``for fiscal years 
                                before fiscal year 2002,'' after 
                                ``(i)''; and
                                    (II) by striking ``and'' at the 
                                end;
                            (iv) in clause (ii)--
                                    (I) by inserting ``for fiscal years 
                                before fiscal year 2002,'' after 
                                ``(ii)''; and
                                    (II) by striking the period at the 
                                end and inserting ``; and''; and
                            (v) by adding at the end the following new 
                        clause:
                    ``(iii) for a fiscal year beginning after fiscal 
                year 2001, for hospitals located in all areas, to the 
                product of--
                            ``(I) the applicable average standardized 
                        amount (computed under subparagraph (A)), 
                        reduced under subparagraph (B), and adjusted or 
                        reduced under subparagraph (C) for the fiscal 
                        year; and
                            ``(II) the weighting factor (determined 
                        under paragraph (4)(B)) for that diagnosis-
                        related group.''.
                    (B) Technical conforming sunset.--Section 
                1886(d)(3) of such Act (42 U.S.C. 1395ww(d)(3)) is 
                amended in the matter preceding subparagraph (A) by 
                inserting ``for fiscal years before fiscal year 1997'' 
                before ``a regional DRG prospective payment rate''.

SEC. 103. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS FOR ALL 
              ITEMS AND SERVICES REIMBURSED UNDER PROSPECTIVE PAYMENT 
              SYSTEMS.

    Section 1886(d)(10)(D) of the Social Security Act (42 U.S.C. 
1395ww(d)(10)(D)), as amended by section 304(a) of BIPA (114 Stat. 
2763A-494), is amended by adding at the end the following new clause:
    ``(vii)(I) Any decision of the Board to reclassify a subsection (d) 
hospital for purposes of the adjustment factor described in 
subparagraph (C)(i)(II) for fiscal year 2001 or any fiscal year 
thereafter shall apply for purposes of adjusting payments for 
variations in costs that are attributable to wages and wage-related 
costs for PPS-reimbursed items and services.
    ``(II) For purposes of subclause (I), the term `PPS-reimbursed 
items and services' means, for the fiscal year for which the Board has 
made a decision described in such subclause, each item and service for 
which payment is made under this title on a prospective basis and 
adjusted for variations in costs that are attributable to wages or 
wage-related costs that is furnished by the hospital to which such 
decision applies, or by a provider-based entity or department of that 
hospital (as determined by the Secretary).''.

SEC. 104. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.

    (a) In General.--Section 1848(i) of the Social Security Act (42 
U.S.C. 1395w-4(i)) is amended by adding at the end the following new 
paragraph:
            ``(4) Treatment of certain physician pathology services.--
                    ``(A) In general.--With respect to services 
                furnished on or after January 1, 2001, if an 
                independent laboratory furnishes the technical 
                component of a physician pathology service to a fee-
                for-service medicare beneficiary who is an inpatient or 
                outpatient of a covered hospital, the Secretary shall 
                treat such component as a service for which payment 
                shall be made to the laboratory under this section and 
                not as an inpatient hospital service for which payment 
                is made to the hospital under section 1886(d) or as a 
                hospital outpatient service for which payment is made 
                to the hospital under section 1834(t).
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Covered hospital.--
                                    ``(I) In general.--The term 
                                `covered hospital' means, with respect 
                                to an inpatient or outpatient, a 
                                hospital that had an arrangement with 
                                an independent laboratory that was in 
                                effect as of July 22, 1999, under which 
                                a laboratory furnished the technical 
                                component of physician pathology 
                                services to fee-for-service medicare 
                                beneficiaries who were hospital 
                                inpatients or outpatients, 
                                respectively, and submitted claims for 
                                payment for such component to a carrier 
                                with a contract under section 1842 and 
                                not to the hospital.
                                    ``(II) Change in ownership does not 
                                affect determination.--A change in 
                                ownership with respect to a hospital on 
                                or after the date referred to in 
                                subclause (I) shall not affect the 
                                determination of whether such hospital 
                                is a covered hospital for purposes of 
                                such subclause.
                            ``(ii) Fee-for-service medicare 
                        beneficiary.--The term `fee-for-service 
                        medicare beneficiary' means an individual who 
                        is entitled to benefits under part A, or 
                        enrolled under this part, or both, but who is 
                        not enrolled in any of the following:
                                    ``(I) A Medicare+Choice plan under 
                                part C.
                                    ``(II) A plan offered by an 
                                eligible organization under section 
                                1876.
                                    ``(III) A program of all-inclusive 
                                care for the elderly (PACE) under 
                                section 1894.
                                    ``(IV) A social health maintenance 
                                organization (SHMO) demonstration 
                                project established under section 
                                4018(b) of the Omnibus Budget 
                                Reconciliation Act of 1987 (Public Law 
                                100-203).''.
    (b) Conforming Amendment.--Section 542 of BIPA (114 Stat. 2763A-
550) is repealed.
    (c) Effective Dates.--The amendments made by this section shall 
take effect as if included in the enactment of BIPA.

               Subtitle B--Rural Home Health Improvements

SEC. 111. ELIMINATION OF 15 PERCENT REDUCTION IN PAYMENT RATES UNDER 
              THE PROSPECTIVE PAYMENT SYSTEM FOR HOME HEALTH SERVICES.

    (a) In General.--Section 1895(b)(3)(A) of the Social Security Act 
(42 U.S.C. 1395fff(b)(3)(A)), as amended by section 501(a) of BIPA (114 
Stat. 2763A-529) is amended to read as follows:
                    ``(A) Initial basis.--Under such system the 
                Secretary shall provide for computation of a standard 
                prospective payment amount (or amounts) as follows:
                            ``(i) Such amount (or amounts) shall 
                        initially be based on the most current audited 
                        cost report data available to the Secretary and 
                        shall be computed in a manner so that the total 
                        amounts payable under the system for fiscal 
                        year 2001 shall be equal to the total amount 
                        that would have been made if the system had not 
                        been in effect and if section 1861(v)(1)(L)(ix) 
                        had not been enacted.
                            ``(ii) For fiscal year 2002 and for each 
                        subsequent fiscal year, such amount (or 
                        amounts) shall be equal to the amount (or 
                        amounts) determined under this paragraph for 
                        the previous fiscal year, updated under 
                        subparagraph (B).
                Each such amount shall be standardized in a manner that 
                eliminates the effect of variations in relative case 
                mix and area wage adjustments among different home 
                health agencies in a budget neutral manner consistent 
                with the case mix and wage level adjustments provided 
                under paragraph (4)(A). Under the system, the Secretary 
                may recognize regional differences or differences based 
                upon whether or not the services or agency are in an 
                urbanized area.''.
    (b) Elimination of Report.--Section 302(c) of the Medicare, 
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (Appendix F, 
113 Stat. 1501A-360), as enacted into law by section 1000(a)(6) of 
Public Law 106-113, and as amended by section 501(b) of BIPA (114 Stat. 
2763A-529), is repealed.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 501 of BIPA 
(114 Stat. 2763A-529) .

SEC. 112. PERMANENT INCREASE FOR HOME HEALTH SERVICES FURNISHED IN A 
              RURAL AREA.

    (a) In General.--Section 1895 of the Social Security Act (42 U.S.C. 
1395fff), as amended by section 504 of BIPA (114 Stat. 2763A-531), is 
amended by adding at the end the following new subsection:
    ``(f) Increase for Services Furnished in a Rural Area.--
            ``(1) In general.--In the case of home health services 
        furnished in a rural area (as defined in section 1886(d)(2)(D)) 
        on or after April 1, 2001, the Secretary shall increase the 
        payment amount otherwise made under this section for such 
        services by 10 percent.
            ``(2) Waiver of budget neutrality.--The Secretary shall not 
        reduce the standard prospective payment amount (or amounts) 
        under this section applicable to home health services furnished 
        during a period to offset the increase in payments resulting 
        from the application of paragraph (1).''.
    (b) Conforming Amendment.--Section 508 of BIPA (114 Stat. 2763A-
533) is repealed.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of BIPA.

              Subtitle C--Rural Health Clinic Improvements

SEC. 121. IMPROVEMENT IN RURAL HEALTH CLINIC REIMBURSEMENT.

    Section 1833(f) of the Social Security Act (42 U.S.C. 1395l(f)) is 
amended--
            (1) in paragraph (1), by striking ``, and'' at the end and 
        inserting a semicolon;
            (2) in paragraph (2)--
                    (A) by striking ``in a subsequent year'' and 
                inserting ``in 1989 through 2001''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(3) in 2002, at $79 per visit; and
            ``(4) in a subsequent year, at the limit established under 
        this subsection for the previous year increased by the 
        percentage increase in the MEI (as so defined) applicable to 
        primary care services (as so defined) furnished as of the first 
        day of that year.''.

SEC. 122. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC SERVICES AND 
              FEDERALLY QUALIFIED HEALTH CENTER SERVICES FROM THE 
              PROSPECTIVE PAYMENT SYSTEM FOR COVERED SKILLED NURSING 
              FACILITY SERVICES.

    (a) In General.--Section 1888(e) of the Social Security Act (42 
U.S.C. 1395yy(e)) is amended--
            (1) in paragraph (2)(A)(i)(II), by striking ``clauses (ii) 
        and (iii)'' and inserting ``clauses (ii), (iii), and (iv)''; 
        and
            (2) by adding at the end of paragraph (2)(A) the following 
        new clause:
                            ``(iv) Exclusion of certain rural health 
                        clinic services and federally qualified health 
                        center services.--Services described in this 
                        clause are--
                                    ``(I) rural health clinic services 
                                (as defined in section 1861(aa)(1)) 
                                that would be described in clause (ii) 
                                if such services were not furnished by 
                                an individual affiliated with a rural 
                                health clinic; and
                                    ``(II) Federally qualified health 
                                center services (as defined in section 
                                1861(aa)(3)) that would be described in 
                                clause (ii) if such services were not 
                                furnished by an individual affiliated 
                                with a Federally qualified health 
                                center.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after January 1, 2002.

TITLE II--RURAL GRANT AND LOAN PROGRAMS FOR INFRASTRUCTURE, TECHNOLOGY, 
                             AND TELEHEALTH

SEC. 201. CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM.

    (a) In General.--Part A of title XVI of the Public Health Service 
Act (42 U.S.C. 300q et seq.) is amended by adding at the end the 
following new section:

            ``capital infrastructure revolving loan program

    ``Sec. 1603. (a) Authority To Make and Guarantee Loans.--
            ``(1) Authority to make loans.--The Secretary may make 
        loans from the fund established under section 1602(d) to any 
        rural entity for projects for capital improvements, including--
                    ``(A) the acquisition of land necessary for the 
                capital improvements;
                    ``(B) the renovation or modernization of any 
                building;
                    ``(C) the acquisition or repair of fixed or major 
                movable equipment; and
                    ``(D) such other project expenses as the Secretary 
                determines appropriate.
            ``(2) Authority to guarantee loans.--
                    ``(A) In general.--The Secretary may guarantee the 
                payment of principal and interest for loans made to 
                rural entities for projects for any capital improvement 
                described in paragraph (1) to any non-Federal lender.
                    ``(B) Interest subsidies.--In the case of a 
                guarantee of any loan made to a rural entity under 
                subparagraph (A), the Secretary may pay to the holder 
                of such loan and for and on behalf of the project for 
                which the loan was made, amounts sufficient to reduce 
                by not more than 3 percent of the net effective 
                interest rate otherwise payable on such loan.
    ``(b) Amount of Loan.--The principal amount of a loan directly made 
or guaranteed under subsection (a) for a project for capital 
improvement may not exceed $5,000,000.
    ``(c) Funding Limitations.--
            ``(1) Government credit subsidy exposure.--The total of the 
        Government credit subsidy exposure under the Credit Reform Act 
        of 1990 scoring protocol with respect to the loans outstanding 
        at any time with respect to which guarantees have been issued, 
        or which have been directly made, under subsection (a) may not 
        exceed $50,000,000 per year.
            ``(2) Total amounts.--Subject to paragraph (1), the total 
        of the principal amount of all loans directly made or 
        guaranteed under subsection (a) may not exceed $250,000,000 per 
        year.
    ``(d) Capital Assessment and Planning Grants.--
            ``(1) Nonrepayable grants.--Subject to paragraph (2), the 
        Secretary may make a grant to a rural entity, in an amount not 
        to exceed $50,000, for purposes of capital assessment and 
        business planning.
            ``(2) Limitation.--The cumulative total of grants awarded 
        under this subsection may not exceed $2,500,000 per year.
    ``(e) Termination of Authority.--The Secretary may not directly 
make or guarantee any loan under subsection (a) or make a grant under 
subsection (d) after September 30, 2006.''.
    (b) Rural Entity Defined.--Section 1624 of the Public Health 
Service Act (42 U.S.C. 300s-3) is amended by adding at the end the 
following new paragraph:
            ``(15)(A) The term `rural entity' includes--
                    ``(i) a rural health clinic, as defined in section 
                1861(aa)(2) of the Social Security Act;
                    ``(ii) any medical facility with at least 1, but 
                less than 50 beds that is located in--
                            ``(I) a county that is not part of a 
                        metropolitan statistical area; or
                            ``(II) a rural census tract of a 
                        metropolitan statistical area (as determined 
                        under the most recent modification of the 
                        Goldsmith Modification, originally published in 
                        the Federal Register on February 27, 1992 (57 
                        Fed. Reg. 6725));
                    ``(iii) a hospital that is classified as a rural, 
                regional, or national referral center under section 
                1886(d)(5)(C) of the Social Security Act; and
                    ``(iv) a hospital that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
            ``(B) For purposes of subparagraph (A), the fact that a 
        clinic, facility, or hospital has been geographically 
        reclassified under the medicare program under title XVIII of 
        the Social Security Act shall not preclude a hospital from 
        being considered a rural entity under clause (i) or (ii) of 
        subparagraph (A).''.
    (c) Conforming Amendments.--Section 1602 of the Public Health 
Service Act (42 U.S.C. 300q-2) is amended--
            (1) in subsection (b)(2)(D), by inserting ``or 
        1603(a)(2)(B)'' after ``1601(a)(2)(B)''; and
            (2) in subsection (d)--
                    (A) in paragraph (1)(C), by striking ``section 
                1601(a)(2)(B)'' and inserting ``sections 1601(a)(2)(B) 
                and 1603(a)(2)(B)''; and
                    (B) in paragraph (2)(A), by inserting ``or 
                1603(a)(2)(B)'' after ``1601(a)(2)(B)''.

SEC. 202. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN PROGRAM.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 241 et seq.), as amended by section 1501 of the Children's 
Health Act of 2000 (Public Law 106-310; 114 Stat. 1146), is amended by 
adding at the end the following section:

``SEC. 330I. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN PROGRAM.

    ``(a) Establishment of Program.--The Secretary, acting through the 
Director of the Office of Rural Health Policy of the Health Resources 
and Services Administration, shall establish a high technology 
acquisition grant and loan program for the purpose of--
            ``(1) improving the quality of health care in rural areas 
        through the acquisition of advanced medical technology;
            ``(2) fostering the development of the networks described 
        in section 330A;
            ``(3) promoting resource sharing between urban and rural 
        facilities; and
            ``(4) improving patient safety and outcomes through the 
        acquisition of high technology, including software, information 
        services, and staff training.
    ``(b) Grants and Loans.--Under the program established under 
subsection (a), the Secretary, acting through the Director of the 
Office of Rural Health Policy, may award grants and make loans to any 
eligible entity (as defined in subsection (d)(1)) for any costs 
incurred by the eligible entity in acquiring eligible equipment and 
services (as defined in subsection (d)(2)).
    ``(c) Limitations.--
            ``(1) In general.--Subject to paragraph (2), the total 
        amount of grants and loans made under this section to an 
        eligible entity may not exceed $100,000.
            ``(2) Federal sharing.--
                    ``(A) Grants.--The amount of any grant awarded 
                under this section may not exceed 70 percent of the 
                costs to the eligible entity in acquiring eligible 
                equipment and services.
                    ``(B) Loans.--The amount of any loan made under 
                this section may not exceed 90 percent of the costs to 
                the eligible entity in acquiring eligible equipment and 
                services.
    ``(d) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        hospital, health center, or any other entity that the Secretary 
        determines is appropriate that is located in a rural area or 
        region.
            ``(2) Eligible equipment and services.--The term `eligible 
        equipment and services' includes--
                    ``(A) unit dose distribution systems;
                    ``(B) software, information services, and staff 
                training;
                    ``(C) wireless devices to transmit medical orders;
                    ``(D) clinical health care informatics systems, 
                including bar code systems designed to avoid medication 
                errors and patient tracking systems;
                    ``(E) telemedicine technology; and
                    ``(F) any other technology that improves the 
                quality of health care provided in rural areas 
                including systems to improve privacy and address 
                administrative simplification needs.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2002 through 2007.''.

SEC. 203. ESTABLISHMENT OF TELEHEALTH RESOURCE CENTERS.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.), as amended by section 202, is amended by 
adding at the end the following:

``SEC. 330J. TELEHEALTH RESOURCE CENTERS.

    ``(a) Program Authorized.--The Secretary, acting through the 
Director of the Office for the Advancement of Telehealth of the Health 
Resources and Services Administration, shall award grants to eligible 
entities to establish telehealth resource centers in accordance with 
this section.
    ``(b) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        public or nonprofit private entity.
            ``(2) Telehealth.--The term `telehealth' means the use of 
        electronic information and telecommunications technologies to 
        support long-distance clinical health care, patient and 
        professional health-related education, public health, and 
        health administration.
    ``(c) Amount.--Each entity that receives a grant under subsection 
(a) shall receive an amount not to exceed $1,500,000.
    ``(d) Equitable Distribution.--In awarding grants under subsection 
(a), the Secretary shall ensure, to the greatest extent possible, that 
such grants are equitably distributed among the geographical regions of 
the United States.
    ``(e) Preference.--In awarding grants under subsection (a), the 
Secretary shall give preference to eligible entities that have a 
demonstrated record of providing or supporting the provision of health 
care services for populations in rural areas.
    ``(f) Use of Funds.--An entity that receives a grant under 
subsection (a) shall use funds from such grant to establish a 
telehealth resource center that shall--
            ``(1) provide technical assistance, training, and support 
        to health care providers and a range of health care entities 
        that provide or will provide telehealth services for a 
        medically underserved community, including hospitals, 
        ambulatory care entities, long-term care facilities, public 
health clinics, and schools;
            ``(2) provide for the dissemination of information and 
        research findings related to the use of telehealth 
        technologies;
            ``(3) provide for the dissemination of information 
        regarding the latest developments in health care;
            ``(4) conduct evaluations to determine the best application 
        of telehealth technologies to meet the health care needs of the 
        medically underserved community;
            ``(5) promote the integration of clinical information 
        systems with other telehealth technologies;
            ``(6) foster the use of telehealth technologies to provide 
        health care information and education for health care 
        professionals and consumers in a more effective manner; and
            ``(7) provide timely and appropriate evaluations to the 
        Office for the Advancement of Telehealth on lessons learned and 
        best telehealth practices in any areas served.
    ``(g) Collaboration.--In providing the services described in 
subsection (f)(5), such entity shall collaborate, if feasible, with 
private and public organizations and centers or programs that receive 
Federal assistance and provide telehealth services.
    ``(h) Application.--An entity that desires a grant under subsection 
(a) shall submit an application to the Secretary at such time, in such 
manner, and containing such information as the Secretary may require, 
including--
            ``(1) a description of the manner in which the entity shall 
        establish and administer a telehealth resource center to meet 
        the requirements of this subsection; and
            ``(2) a description of the manner in which the activities 
        carried out by such center will meet the health care needs of 
        individuals in rural communities.
    ``(i) Report.--Not later than 5 years after the date of enactment 
of this section, the Secretary shall submit to the appropriate 
committees of Congress a report on each activity funded with a grant 
under this section.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) for fiscal year 2002, $30,000,000; and
            ``(2) for fiscal years 2003 through 2008, such sums as may 
        be necessary.''.

          TITLE III--NATIONAL HEALTH SERVICE CORPS TAX RELIEF

SEC. 301. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE NATIONAL 
              HEALTH SERVICE CORPS LOAN REPAYMENT PROGRAM.

    (a) In General.--Paragraph (2) of section 117(c) of the Internal 
Revenue Code of 1986 (relating to the exceptions) is amended by 
striking ``or'' at the end of subparagraph (A), by redesignating 
subparagraph (B) as subparagraph (C), and by inserting after 
subparagraph (A) the following new subparagraph:
                    ``(B) the National Health Service Corps Loan 
                Repayment Program under section 338B(g)(1)(A) of such 
                Act, or''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts received in taxable years beginning after December 31, 
2001.
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