I

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

3 SECTION 1. SHORT TITLE; REFERENCES TO BIPA; TABLE

4 OF CONTENTS.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘Rural Health Care Improvement Act of 2001’’.

7 (b) REFERENCES TO BIPA.—In this Act, the term

8 ‘‘BIPA’’ means the Medicare, Medicaid, and SCHIP Ben9 efits Improvement and Protection Act of 2000 (114 Stat.

10 2763A–463 et seq.), as enacted into law by section 1(a)(6)

11 of Public Law 106–554.

12 (c) TABLE OF CONTENTS.—The table of contents of

13 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.
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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.

1 TITLE I—RURAL MEDICARE

2 REFORMS

3 Subtitle A—Rural Hospital

4 Improvements

5 SEC. 101. FAIRNESS IN THE DISPROPORTIONATE SHARE

6 HOSPITAL (DSH) ADJUSTMENT FOR RURAL

7 HOSPITALS.

8 (a) EQUALIZING DSH PAYMENT AMOUNTS.—

9 (1) IN GENERAL.—Section 1886(d)(5)(F)(vii)

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

11 1395ww(d)(5)(F)(vii)) is amended by inserting ‘‘,

12 and, after October 1, 2001, for any other hospital

13 described in clause (iv),’’ after ‘‘clause (iv)(I)’’.

14 (2) CONFORMING AMENDMENTS.—Section

15 1886(d)(5)(F) of such Act (42 U.S.C.

16 1395ww(d)(5)(F)), as amended by section 211 of

17 BIPA (114 Stat. 2763A–483), is amended—

18 (A) in clause (iv)—

19 (i) in subclause (II), by inserting ‘‘or,

20 for discharges occurring on or after Octo-
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1 ber 1, 2001, is equal to the percent deter2 mined in accordance with the applicable

3 formula described in clause (vii)’’ after

4 ‘‘clause (xiii)’’;

5 (ii) in subclause (III), by inserting

6 ‘‘or, for discharges occurring on or after

7 October 1, 2001, is equal to the percent

8 determined in accordance with the applica9 ble formula described in clause (vii)’’ after

10 ‘‘clause (xii)’’;

11 (iii) in subclause (IV), by inserting

12 ‘‘or, for discharges occurring on or after

13 October 1, 2001, is equal to the percent

14 determined in accordance with the applica15 ble formula described in clause (vii)’’ after

16 ‘‘clause (x) or (xi)’’;

17 (iv) in subclause (V), by inserting ‘‘or,

18 for discharges occurring on or after Octo19 ber 1, 2001, is equal to the percent deter20 mined in accordance with the applicable

21 formula described in clause (vii)’’ after

22 ‘‘clause (xi)’’ ; and

23 (v) in subclause (VI), by inserting

24 ‘‘or, for discharges occurring on or after

25 October 1, 2001, is equal to the percent
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1 determined in accordance with the applica2 ble formula described in clause (vii)’’ after

3 ‘‘clause (x)’’;

4 (B) in clause (viii), by striking ‘‘The for5 mula’’ and inserting ‘‘For discharges occurring

6 before October 1, 2001, the formula’’; and

7 (C) in each of clauses (x), (xi), (xii), and

8 (xiii), by striking ‘‘For purposes’’ and inserting

9 ‘‘With respect to discharges occurring before

10 October 1, 2001, for purposes’’.

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

12 this section shall apply with respect to discharges occur13 ring on or after October 1, 2001.

14 SEC. 102. ESTABLISHING A SINGLE STANDARDIZED

15 AMOUNT UNDER INPATIENT HOSPITAL PRO16 SPECTIVE PAYMENT SYSTEM.

17 (a) IN GENERAL.—Section 1886(d)(3)(A) of the So18 cial Security Act (42 U.S.C. 1395ww(d)(3)(A)) is

19 amended—

20 (1) in clause (iv), by inserting ‘‘and ending on

21 or before September 30, 2001,’’ after ‘‘October 1,

22 1995,’’; and

23 (2) by redesignating clauses (v) and (vi) as

24 clauses (vii) and (viii), respectively, and inserting

25 after clause (iv) the following new clauses:
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1 ‘‘(v) For discharges occurring in the fiscal year

2 beginning on October 1, 2001, the average standard3 ized amount for hospitals located in areas other than

4 a large urban area shall be equal to the average

5 standardized amount for hospitals located in a large

6 urban area.

7 ‘‘(vi) For discharges occurring in a fiscal year

8 beginning on or after October 1, 2002, the Secretary

9 shall compute an average standardized amount for

10 hospitals located in all areas within the United

11 States equal to the average standardized amount

12 computed under clause (v) or this clause for the pre13 vious fiscal year increased by the applicable percent14 age increase under subsection (b)(3)(B)(i) for the

15 fiscal year involved.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) UPDATE FACTOR.—Section

18 1886(b)(3)(B)(i)(XVII) of the Social Security Act

19 (42 U.S.C. 1395ww(b)(3)(B)(i)(XVII)) is amended

20 by striking ‘‘for hospitals in all areas,’’ and inserting

21 ‘‘for hospitals located in a large urban area,’’.

22 (2) COMPUTING DRG-SPECIFIC RATES.—

23 (A) IN GENERAL.—Section 1886(d)(3)(D)

24 of such Act (42 U.S.C. 1395ww(d)(3)(D)) is

25 amended—
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1 (i) in the heading by striking ‘‘IN DIF2 FERENT AREAS’’;

3 (ii) in the matter preceding clause

4 (i)—

5 (I) by inserting ‘‘for fiscal years

6 before fiscal year 1997’’ before ‘‘a re7 gional DRG prospective payment rate

8 for each region,’’; and

9 (II) by striking ‘‘each of which

10 is’’;

11 (iii) in clause (i)—

12 (I) by inserting ‘‘for fiscal years

13 before fiscal year 2002,’’ after ‘‘(i)’’;

14 and

15 (II) by striking ‘‘and’’ at the end;

16 (iv) in clause (ii)—

17 (I) by inserting ‘‘for fiscal years

18 before fiscal year 2002,’’ after ‘‘(ii)’’;

19 and

20 (II) by striking the period at the

21 end and inserting ‘‘; and’’; and

22 (v) by adding at the end the following

23 new clause:
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1 ‘‘(iii) for a fiscal year beginning after fiscal

2 year 2001, for hospitals located in all areas, to

3 the product of—

4 ‘‘(I) the applicable average standard5 ized amount (computed under subpara6 graph (A)), reduced under subparagraph

7 (B), and adjusted or reduced under sub8 paragraph (C) for the fiscal year; and

9 ‘‘(II) the weighting factor (determined

10 under paragraph (4)(B)) for that diag11 nosis-related group.’’.

12 (B) TECHNICAL CONFORMING SUNSET.—

13 Section 1886(d)(3) of such Act (42 U.S.C.

14 1395ww(d)(3)) is amended in the matter pre15 ceding subparagraph (A) by inserting ‘‘for fiscal

16 years before fiscal year 1997’’ before ‘‘a re17 gional DRG prospective payment rate’’.

18 SEC. 103. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR

19 LABOR COSTS FOR ALL ITEMS AND SERVICES

20 REIMBURSED UNDER PROSPECTIVE PAY21 MENT SYSTEMS.

22 Section 1886(d)(10)(D) of the Social Security Act

23 (42 U.S.C. 1395ww(d)(10)(D)), as amended by section

24 304(a) of BIPA (114 Stat. 2763A–494), is amended by

25 adding at the end the following new clause:
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1 ‘‘(vii)(I) Any decision of the Board to reclassify a

2 subsection (d) hospital for purposes of the adjustment fac3 tor described in subparagraph (C)(i)(II) for fiscal year

4 2001 or any fiscal year thereafter shall apply for purposes

5 of adjusting payments for variations in costs that are at6 tributable to wages and wage-related costs for PPS-reim7 bursed items and services.

8 ‘‘(II) For purposes of subclause (I), the term ‘PPS9 reimbursed items and services’ means, for the fiscal year

10 for which the Board has made a decision described in such

11 subclause, each item and service for which payment is

12 made under this title on a prospective basis and adjusted

13 for variations in costs that are attributable to wages or

14 wage-related costs that is furnished by the hospital to

15 which such decision applies, or by a provider-based entity

16 or department of that hospital (as determined by the Sec17 retary).’’.

18 SEC. 104. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY

19 SERVICES.

20 (a) IN GENERAL.—Section 1848(i) of the Social Se21 curity Act (42 U.S.C. 1395w–4(i)) is amended by adding

22 at the end the following new paragraph:

23 ‘‘(4) TREATMENT OF CERTAIN PHYSICIAN PA24 THOLOGY SERVICES.—
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1 ‘‘(A) IN GENERAL.—With respect to serv2 ices furnished on or after January 1, 2001, if

3 an independent laboratory furnishes the tech4 nical component of a physician pathology serv5 ice to a fee-for-service medicare beneficiary who

6 is an inpatient or outpatient of a covered hos7 pital, the Secretary shall treat such component

8 as a service for which payment shall be made

9 to the laboratory under this section and not as

10 an inpatient hospital service for which payment

11 is made to the hospital under section 1886(d)

12 or as a hospital outpatient service for which

13 payment is made to the hospital under section

14 1834(t).

15 ‘‘(B) DEFINITIONS.—In this paragraph:

16 ‘‘(i) COVERED HOSPITAL.—

17 ‘‘(I) IN GENERAL.—The term

18 ‘covered hospital’ means, with respect

19 to an inpatient or outpatient, a hos20 pital that had an arrangement with

21 an independent laboratory that was in

22 effect as of July 22, 1999, under

23 which a laboratory furnished the tech24 nical component of physician pathol25 ogy services to fee-for-service medi-
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1 care beneficiaries who were hospital

2 inpatients or outpatients, respectively,

3 and submitted claims for payment for

4 such component to a carrier with a

5 contract under section 1842 and not

6 to the hospital.

7 ‘‘(II) CHANGE IN OWNERSHIP

8 DOES NOT AFFECT DETERMINA9 TION.—A change in ownership with

10 respect to a hospital on or after the

11 date referred to in subclause (I) shall

12 not affect the determination of wheth13 er such hospital is a covered hospital

14 for purposes of such subclause.

15 ‘‘(ii) FEE-FOR-SERVICE MEDICARE

16 BENEFICIARY.—The term ‘fee-for-service

17 medicare beneficiary’ means an individual

18 who is entitled to benefits under part A, or

19 enrolled under this part, or both, but who

20 is not enrolled in any of the following:

21 ‘‘(I) A Medicare+Choice plan

22 under part C.

23 ‘‘(II) A plan offered by an eligi24 ble organization under section 1876.
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1 ‘‘(III) A program of all-inclusive

2 care for the elderly (PACE) under

3 section 1894.

4 ‘‘(IV) A social health mainte5 nance organization (SHMO) dem6 onstration project established under

7 section 4018(b) of the Omnibus

8 Budget Reconciliation Act of 1987

9 (Public Law 100–203).’’.

10 (b) CONFORMING AMENDMENT.—Section 542 of

11 BIPA (114 Stat. 2763A–550) is repealed.

12 (c) EFFECTIVE DATES.—The amendments made by

13 this section shall take effect as if included in the enact14 ment of BIPA.

15 Subtitle B—Rural Home Health

16 Improvements

17 SEC. 111. ELIMINATION OF 15 PERCENT REDUCTION IN

18 PAYMENT RATES UNDER THE PROSPECTIVE

19 PAYMENT SYSTEM FOR HOME HEALTH SERV20 ICES.

21 (a) IN GENERAL.—Section 1895(b)(3)(A) of the So22 cial Security Act (42 U.S.C. 1395fff(b)(3)(A)), as amend23 ed by section 501(a) of BIPA (114 Stat. 2763A–529) is

24 amended to read as follows:
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1 ‘‘(A) INITIAL BASIS.—Under such system

2 the Secretary shall provide for computation of

3 a standard prospective payment amount (or

4 amounts) as follows:

5 ‘‘(i) Such amount (or amounts) shall

6 initially be based on the most current au7 dited cost report data available to the Sec8 retary and shall be computed in a manner

9 so that the total amounts payable under

10 the system for fiscal year 2001 shall be

11 equal to the total amount that would have

12 been made if the system had not been in

13 effect and if section 1861(v)(1)(L)(ix) had

14 not been enacted.

15 ‘‘(ii) For fiscal year 2002 and for

16 each subsequent fiscal year, such amount

17 (or amounts) shall be equal to the amount

18 (or amounts) determined under this para19 graph for the previous fiscal year, updated

20 under subparagraph (B).

21 Each such amount shall be standardized in a

22 manner that eliminates the effect of variations

23 in relative case mix and area wage adjustments

24 among different home health agencies in a

25 budget neutral manner consistent with the case
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1 mix and wage level adjustments provided under

2 paragraph (4)(A). Under the system, the Sec3 retary may recognize regional differences or dif4 ferences based upon whether or not the services

5 or agency are in an urbanized area.’’.

6 (b) ELIMINATION OF REPORT.—Section 302(c) of the

7 Medicare, Medicaid, and SCHIP Balanced Budget Refine8 ment Act of 1999 (Appendix F, 113 Stat. 1501A–360),

9 as enacted into law by section 1000(a)(6) of Public Law

10 106–113, and as amended by section 501(b) of BIPA (114

11 Stat. 2763A–529), is repealed.

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

13 this section shall take effect as if included in the amend14 ments made by section 501 of BIPA (114 Stat. 2763A–

15 529) .

16 SEC. 112. PERMANENT INCREASE FOR HOME HEALTH

17 SERVICES FURNISHED IN A RURAL AREA.

18 (a) IN GENERAL.—Section 1895 of the Social Secu19 rity Act (42 U.S.C. 1395fff), as amended by section 504

20 of BIPA (114 Stat. 2763A–531), is amended by adding

21 at the end the following new subsection:

22 ‘‘(f) INCREASE FOR SERVICES FURNISHED IN A

23 RURAL AREA.—

24 ‘‘(1) IN GENERAL.—In the case of home health

25 services furnished in a rural area (as defined in sec-
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1 tion 1886(d)(2)(D)) on or after April 1, 2001, the

2 Secretary shall increase the payment amount other3 wise made under this section for such services by 10

4 percent.

5 ‘‘(2) WAIVER OF BUDGET NEUTRALITY.—The

6 Secretary shall not reduce the standard prospective

7 payment amount (or amounts) under this section ap8 plicable to home health services furnished during a

9 period to offset the increase in payments resulting

10 from the application of paragraph (1).’’.

11 (b) CONFORMING AMENDMENT.—Section 508 of

12 BIPA (114 Stat. 2763A–533) is repealed.

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

14 this section shall take effect as if included in the enact15 ment of BIPA.

16 Subtitle C—Rural Health Clinic

17 Improvements

18 SEC. 121. IMPROVEMENT IN RURAL HEALTH CLINIC REIM19 BURSEMENT.

20 Section 1833(f) of the Social Security Act (42 U.S.C.

21 1395l(f)) is amended—

22 (1) in paragraph (1), by striking ‘‘, and’’ at the

23 end and inserting a semicolon;

24 (2) in paragraph (2)—
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1 (A) by striking ‘‘in a subsequent year’’ and

2 inserting ‘‘in 1989 through 2001’’; and

3 (B) by striking the period at the end and

4 inserting a semicolon; and

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

6 paragraphs:

7 ‘‘(3) in 2002, at $79 per visit; and

8 ‘‘(4) in a subsequent year, at the limit estab9 lished under this subsection for the previous year in10 creased by the percentage increase in the MEI (as

11 so defined) applicable to primary care services (as so

12 defined) furnished as of the first day of that year.’’.

13 SEC. 122. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC

14 SERVICES AND FEDERALLY QUALIFIED

15 HEALTH CENTER SERVICES FROM THE PRO16 SPECTIVE PAYMENT SYSTEM FOR COVERED

17 SKILLED NURSING FACILITY SERVICES.

18 (a) IN GENERAL.—Section 1888(e) of the Social Se19 curity Act (42 U.S.C. 1395yy(e)) is amended—

20 (1) in paragraph (2)(A)(i)(II), by striking

21 ‘‘clauses (ii) and (iii)’’ and inserting ‘‘clauses (ii),

22 (iii), and (iv)’’; and

23 (2) by adding at the end of paragraph (2)(A)

24 the following new clause:
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1 ‘‘(iv) EXCLUSION OF CERTAIN RURAL

2 HEALTH CLINIC SERVICES AND FEDER3 ALLY QUALIFIED HEALTH CENTER SERV4 ICES.—Services described in this clause

5 are—

6 ‘‘(I) rural health clinic services

7 (as defined in section 1861(aa)(1))

8 that would be described in clause (ii)

9 if such services were not furnished by

10 an individual affiliated with a rural

11 health clinic; and

12 ‘‘(II) Federally qualified health

13 center services (as defined in section

14 1861(aa)(3)) that would be described

15 in clause (ii) if such services were not

16 furnished by an individual affiliated

17 with a Federally qualified health cen18 ter.’’.

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

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

21 January 1, 2002.
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1 TITLE II—RURAL GRANT AND

2 LOAN PROGRAMS FOR INFRA3 STRUCTURE, TECHNOLOGY,

4 AND TELEHEALTH

5 SEC. 201. CAPITAL INFRASTRUCTURE REVOLVING LOAN

6 PROGRAM.

7 (a) IN GENERAL.—Part A of title XVI of the Public

8 Health Service Act (42 U.S.C. 300q et seq.) is amended

9 by adding at the end the following new section:

10 ‘‘CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM

11 ‘‘SEC. 1603. (a) AUTHORITY TO MAKE AND GUAR12 ANTEE LOANS.—

13 ‘‘(1) AUTHORITY TO MAKE LOANS.—The Sec14 retary may make loans from the fund established

15 under section 1602(d) to any rural entity for

16 projects for capital improvements, including—

17 ‘‘(A) the acquisition of land necessary for

18 the capital improvements;

19 ‘‘(B) the renovation or modernization of

20 any building;

21 ‘‘(C) the acquisition or repair of fixed or

22 major movable equipment; and

23 ‘‘(D) such other project expenses as the

24 Secretary determines appropriate.

25 ‘‘(2) AUTHORITY TO GUARANTEE LOANS.—
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1 ‘‘(A) IN GENERAL.—The Secretary may

2 guarantee the payment of principal and interest

3 for loans made to rural entities for projects for

4 any capital improvement described in paragraph

5 (1) to any non-Federal lender.

6 ‘‘(B) INTEREST SUBSIDIES.—In the case

7 of a guarantee of any loan made to a rural enti8 ty under subparagraph (A), the Secretary may

9 pay to the holder of such loan and for and on

10 behalf of the project for which the loan was

11 made, amounts sufficient to reduce by not more

12 than 3 percent of the net effective interest rate

13 otherwise payable on such loan.

14 ‘‘(b) AMOUNT OF LOAN.—The principal amount of

15 a loan directly made or guaranteed under subsection (a)

16 for a project for capital improvement may not exceed

17 $5,000,000.

18 ‘‘(c) FUNDING LIMITATIONS.—

19 ‘‘(1) GOVERNMENT CREDIT SUBSIDY EXPO20 SURE.—The total of the Government credit subsidy

21 exposure under the Credit Reform Act of 1990 scor22 ing protocol with respect to the loans outstanding at

23 any time with respect to which guarantees have been

24 issued, or which have been directly made, under sub25 section (a) may not exceed $50,000,000 per year.
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1 ‘‘(2) TOTAL AMOUNTS.—Subject to paragraph

2 (1), the total of the principal amount of all loans di3 rectly made or guaranteed under subsection (a) may

4 not exceed $250,000,000 per year.

5 ‘‘(d) CAPITAL ASSESSMENT AND PLANNING

6 GRANTS.—

7 ‘‘(1) NONREPAYABLE GRANTS.—Subject to

8 paragraph (2), the Secretary may make a grant to

9 a rural entity, in an amount not to exceed $50,000,

10 for purposes of capital assessment and business

11 planning.

12 ‘‘(2) LIMITATION.—The cumulative total of

13 grants awarded under this subsection may not ex14 ceed $2,500,000 per year.

15 ‘‘(e) TERMINATION OF AUTHORITY.—The Secretary

16 may not directly make or guarantee any loan under sub17 section (a) or make a grant under subsection (d) after

18 September 30, 2006.’’.

19 (b) RURAL ENTITY DEFINED.—Section 1624 of the

20 Public Health Service Act (42 U.S.C. 300s–3) is amended

21 by adding at the end the following new paragraph:

22 ‘‘(15)(A) The term ‘rural entity’ includes—

23 ‘‘(i) a rural health clinic, as defined in sec24 tion 1861(aa)(2) of the Social Security Act;
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1 ‘‘(ii) any medical facility with at least 1,

2 but less than 50 beds that is located in—

3 ‘‘(I) a county that is not part of a

4 metropolitan statistical area; or

5 ‘‘(II) a rural census tract of a metro6 politan statistical area (as determined

7 under the most recent modification of the

8 Goldsmith Modification, originally pub9 lished in the Federal Register on February

10 27, 1992 (57 Fed. Reg. 6725));

11 ‘‘(iii) a hospital that is classified as a

12 rural, regional, or national referral center under

13 section 1886(d)(5)(C) of the Social Security

14 Act; and

15 ‘‘(iv) a hospital that is a sole community

16 hospital (as defined in section

17 1886(d)(5)(D)(iii) of the Social Security Act).

18 ‘‘(B) For purposes of subparagraph (A), the

19 fact that a clinic, facility, or hospital has been geo20 graphically reclassified under the medicare program

21 under title XVIII of the Social Security Act shall not

22 preclude a hospital from being considered a rural en23 tity under clause (i) or (ii) of subparagraph (A).’’.
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1 (c) CONFORMING AMENDMENTS.—Section 1602 of

2 the Public Health Service Act (42 U.S.C. 300q–2) is

3 amended—

4 (1) in subsection (b)(2)(D), by inserting ‘‘or

5 1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’; and

6 (2) in subsection (d)—

7 (A) in paragraph (1)(C), by striking ‘‘sec8 tion 1601(a)(2)(B)’’ and inserting ‘‘sections

9 1601(a)(2)(B) and 1603(a)(2)(B)’’; and

10 (B) in paragraph (2)(A), by inserting ‘‘or

11 1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’.

12 SEC. 202. HIGH TECHNOLOGY ACQUISITION GRANT AND

13 LOAN PROGRAM.

14 Subpart I of part D of title III of the Public Health

15 Service Act (42 U.S.C. 241 et seq.), as amended by section

16 1501 of the Children’s Health Act of 2000 (Public Law

17 106–310; 114 Stat. 1146), is amended by adding at the

18 end the following section:

19 ‘‘SEC. 330I. HIGH TECHNOLOGY ACQUISITION GRANT AND

20 LOAN PROGRAM.

21 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Sec22 retary, acting through the Director of the Office of Rural

23 Health Policy of the Health Resources and Services Ad24 ministration, shall establish a high technology acquisition

25 grant and loan program for the purpose of—
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1 ‘‘(1) improving the quality of health care in

2 rural areas through the acquisition of advanced med3 ical technology;

4 ‘‘(2) fostering the development of the networks

5 described in section 330A;

6 ‘‘(3) promoting resource sharing between urban

7 and rural facilities; and

8 ‘‘(4) improving patient safety and outcomes

9 through the acquisition of high technology, including

10 software, information services, and staff training.

11 ‘‘(b) GRANTS AND LOANS.—Under the program es12 tablished under subsection (a), the Secretary, acting

13 through the Director of the Office of Rural Health Policy,

14 may award grants and make loans to any eligible entity

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

16 by the eligible entity in acquiring eligible equipment and

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

18 ‘‘(c) LIMITATIONS.—

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

20 the total amount of grants and loans made under

21 this section to an eligible entity may not exceed

22 $100,000.

23 ‘‘(2) FEDERAL SHARING.—

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

25 awarded under this section may not exceed 70
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1 percent of the costs to the eligible entity in ac2 quiring eligible equipment and services.

3 ‘‘(B) LOANS.—The amount of any loan

4 made under this section may not exceed 90 per5 cent of the costs to the eligible entity in acquir6 ing eligible equipment and services.

7 ‘‘(d) DEFINITIONS.—In this section:

8 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en9 tity’ means a hospital, health center, or any other

10 entity that the Secretary determines is appropriate

11 that is located in a rural area or region.

12 ‘‘(2) ELIGIBLE EQUIPMENT AND SERVICES.—

13 The term ‘eligible equipment and services’

14 includes—

15 ‘‘(A) unit dose distribution systems;

16 ‘‘(B) software, information services, and

17 staff training;

18 ‘‘(C) wireless devices to transmit medical

19 orders;

20 ‘‘(D) clinical health care informatics sys21 tems, including bar code systems designed to

22 avoid medication errors and patient tracking

23 systems;

24 ‘‘(E) telemedicine technology; and
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1 ‘‘(F) any other technology that improves

2 the quality of health care provided in rural

3 areas including systems to improve privacy and

4 address administrative simplification needs.

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

6 purpose of carrying out this section there are authorized

7 to be appropriated such sums as may be necessary for

8 each of the fiscal years 2002 through 2007.’’.

9 SEC. 203. ESTABLISHMENT OF TELEHEALTH RESOURCE

10 CENTERS.

11 Subpart I of part D of title III of the Public Health

12 Service Act (42 U.S.C. 254b et seq.), as amended by sec13 tion 202, is amended by adding at the end the following:

14 ‘‘SEC. 330J. TELEHEALTH RESOURCE CENTERS.

15 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary, acting

16 through the Director of the Office for the Advancement

17 of Telehealth of the Health Resources and Services Ad18 ministration, shall award grants to eligible entities to es19 tablish telehealth resource centers in accordance with this

20 section.

21 ‘‘(b) DEFINITIONS.—In this section:

22 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en23 tity’ means a public or nonprofit private entity.

24 ‘‘(2) TELEHEALTH.—The term ‘telehealth’

25 means the use of electronic information and tele-
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1 communications technologies to support long-dis2 tance clinical health care, patient and professional

3 health-related education, public health, and health

4 administration.

5 ‘‘(c) AMOUNT.—Each entity that receives a grant

6 under subsection (a) shall receive an amount not to exceed

7 $1,500,000.

8 ‘‘(d) EQUITABLE DISTRIBUTION.—In awarding

9 grants under subsection (a), the Secretary shall ensure,

10 to the greatest extent possible, that such grants are equi11 tably distributed among the geographical regions of the

12 United States.

13 ‘‘(e) PREFERENCE.—In awarding grants under sub14 section (a), the Secretary shall give preference to eligible

15 entities that have a demonstrated record of providing or

16 supporting the provision of health care services for popu17 lations in rural areas.

18 ‘‘(f) USE OF FUNDS.—An entity that receives a grant

19 under subsection (a) shall use funds from such grant to

20 establish a telehealth resource center that shall—

21 ‘‘(1) provide technical assistance, training, and

22 support to health care providers and a range of

23 health care entities that provide or will provide tele24 health services for a medically underserved commu25 nity, including hospitals, ambulatory care entities,
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1 long-term care facilities, public health clinics, and

2 schools;

3 ‘‘(2) provide for the dissemination of informa4 tion and research findings related to the use of tele5 health technologies;

6 ‘‘(3) provide for the dissemination of informa7 tion regarding the latest developments in health

8 care;

9 ‘‘(4) conduct evaluations to determine the best

10 application of telehealth technologies to meet the

11 health care needs of the medically underserved com12 munity;

13 ‘‘(5) promote the integration of clinical infor14 mation systems with other telehealth technologies;

15 ‘‘(6) foster the use of telehealth technologies to

16 provide health care information and education for

17 health care professionals and consumers in a more

18 effective manner; and

19 ‘‘(7) provide timely and appropriate evaluations

20 to the Office for the Advancement of Telehealth on

21 lessons learned and best telehealth practices in any

22 areas served.

23 ‘‘(g) COLLABORATION.—In providing the services de24 scribed in subsection (f)(5), such entity shall collaborate,

25 if feasible, with private and public organizations and cen-
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1 ters or programs that receive Federal assistance and pro2 vide telehealth services.

3 ‘‘(h) APPLICATION.—An entity that desires a grant

4 under subsection (a) shall submit an application to the

5 Secretary at such time, in such manner, and containing

6 such information as the Secretary may require,

7 including—

8 ‘‘(1) a description of the manner in which the

9 entity shall establish and administer a telehealth re10 source center to meet the requirements of this sub11 section; and

12 ‘‘(2) a description of the manner in which the

13 activities carried out by such center will meet the

14 health care needs of individuals in rural commu15 nities.

16 ‘‘(i) REPORT.—Not later than 5 years after the date

17 of enactment of this section, the Secretary shall submit

18 to the appropriate committees of Congress a report on

19 each activity funded with a grant under this section.

20 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There

21 are authorized to be appropriated to carry out this

22 section—

23 ‘‘(1) for fiscal year 2002, $30,000,000; and

24 ‘‘(2) for fiscal years 2003 through 2008, such

25 sums as may be necessary.’’.
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1 TITLE III—NATIONAL HEALTH

2 SERVICE CORPS TAX RELIEF

3 SEC. 301. EXCLUSION OF CERTAIN AMOUNTS RECEIVED

4 UNDER THE NATIONAL HEALTH SERVICE

5 CORPS LOAN REPAYMENT PROGRAM.

6 (a) IN GENERAL.—Paragraph (2) of section 117(c)

7 of the Internal Revenue Code of 1986 (relating to the ex8 ceptions) is amended by striking ‘‘or’’ at the end of sub9 paragraph (A), by redesignating subparagraph (B) as sub10 paragraph (C), and by inserting after subparagraph (A)

11 the following new subparagraph:

12 ‘‘(B) the National Health Service Corps

13 Loan Repayment Program under section

14 338B(g)(1)(A) of such Act, or’’.

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

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

17 years beginning after December 31, 2001.

Æ