II 

109TH CONGRESS 

1ST SESSION S. 933 

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

in access to services in rural hospitals and critical access hospitals. 

IN THE SENATE OF THE UNITED STATES 

APRIL 28, 2005 

Mr. BROWNBACK (for himself and Mr. NELSON of Nebraska) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to provide 

for improvements in access to services in rural hospitals 

and critical access hospitals. 

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; AMENDMENTS TO SOCIAL SECU4 RITY ACT. 

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

6 ‘‘Rural Community Hospital Assistance Act of 2005’’. 

7 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this 

9 Act an amendment is expressed in terms of an amendment 

10 to, or repeal of, a section or other provision, the reference 
2 

•S 933 IS

1 shall be considered a reference to that section or other 

2 provision of the Social Security Act. 

3 SEC. 2. ESTABLISHMENT OF RURAL COMMUNITY HOSPITAL 

4 (RCH) PROGRAM. 

5 (a) IN GENERAL.—Section 1861 (42 U.S.C. 1395x) 

6 is amended by adding at the end of the following new sub7 section: 

8 ‘‘Rural Community Hospital; Rural Community Hospital 

9 Services 

10 ‘‘(bbb)(1) The term ‘rural community hospital’ means 

11 a hospital (as defined in subsection (e)) that— 

12 ‘‘(A) is located in a rural area (as defined in 

13 section 1886(d)(2)(D)) or treated as being so lo14 cated pursuant to section 1886(d)(8)(E); 

15 ‘‘(B) subject to paragraph (2), has less than 51 

16 acute care inpatient beds, as reported in its most re17 cent cost report; 

18 ‘‘(C) makes available 24-hour emergency care 

19 services; 

20 ‘‘(D) subject to paragraph (3), has a provider 

21 agreement in effect with the Secretary and is open 

22 to the public as of January 1, 2005; and 

23 ‘‘(E) applies to the Secretary for such designa24 tion. 
3 

•S 933 IS

1 ‘‘(2) For purposes of paragraph (1)(B), beds in 

2 a psychiatric or rehabilitation unit of the hospital 

3 which is a distinct part of the hospital shall not be 

4 counted. 

5 ‘‘(3) Subparagraph (1)(D) shall not be con6 strued to prohibit any of the following from quali7 fying as a rural community hospital: 

8 ‘‘(A) A replacement facility (as defined by 

9 the Secretary in regulations in effect on Janu10 ary 1, 2005) with the same service area (as de11 fined by the Secretary in regulations in effect 

12 on such date). 

13 ‘‘(B) A facility obtaining a new provider 

14 number pursuant to a change of ownership. 

15 ‘‘(C) A facility which has a binding written 

16 agreement with an outside, unrelated party for 

17 the construction, reconstruction, lease, rental, 

18 or financing of a building as of January 1, 

19 2005. 

20 ‘‘(4) Nothing in this subsection shall be con21 strued as prohibiting a critical access hospital from 

22 qualifying as a rural community hospital if the crit23 ical access hospital meets the conditions otherwise 

24 applicable to hospitals under subsection (e) and sec25 tion 1866. 
4 

•S 933 IS

1 ‘‘(5) Nothing in this subsection shall be con2 strued as prohibiting a rural community hospital 

3 participating in the demonstration program under 

4 Section 410A of the Medicare Prescription Drug, 

5 Improvement, and Modernization Act of 2003 (Pub6 lic Law 108–173; 117 Stat. 2313) from qualifying 

7 as a rural community hospital if the rural commu8 nity hospital meets the conditions otherwise applica9 ble to hospitals under subsection (e) and section 

10 1866.’’. 

11 (b) PAYMENT.— 

12 (1) INPATIENT HOSPITAL SERVICES.—Section 

13 1814 (42 U.S.C. 1395f) is amended by adding at 

14 the end the following new subsection: 

15 ‘‘Payment for Inpatient Services Furnished in Rural 

16 Community Hospitals 

17 ‘‘(m) The amount of payment under this part for in18 patient hospital services furnished in a rural community 

19 hospital, other than such services furnished in a psy20 chiatric or rehabilitation unit of the hospital which is a 

21 distinct part, is, at the election of the hospital in the appli22 cation referred to in section 1861(bbb)(1)(E)— 

23 ‘‘(1) 101 percent of the reasonable costs of pro24 viding such services, without regard to the amount 

25 of the customary or other charge, or 
5 

•S 933 IS

1 ‘‘(2) the amount of payment provided for under 

2 the prospective payment system for inpatient hos3 pital services under section 1886(d).’’. 

4 (2) OUTPATIENT SERVICES.—Section 1834 (42 

5 U.S.C. 1395m) is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(n) PAYMENT FOR OUTPATIENT SERVICES FUR8 NISHED IN RURAL COMMUNITY HOSPITALS.—The 

9 amount of payment under this part for outpatient services 

10 furnished in a rural community hospital is, at the election 

11 of the hospital in the application referred to in section 

12 1861(bbb)(1)(E)— 

13 ‘‘(1) 101 percent of the reasonable costs of pro14 viding such services, without regard to the amount 

15 of the customary or other charge and any limitation 

16 under section 1861(v)(1)(U), or 

17 ‘‘(2) the amount of payment provided for under 

18 the prospective payment system for covered OPD 

19 services under section 1833(t).’’. 

20 (3) HOME HEALTH SERVICES.— 

21 (A) EXCLUSION FROM HOME HEALTH

22 PPS.— 

23 (i) IN GENERAL.—Section 1895 (42 

24 U.S.C. 1395fff) is amended by adding at 

25 the end the following: 
6 

•S 933 IS

1 ‘‘(f) EXCLUSION.— 

2 ‘‘(1) IN GENERAL.—In determining payments 

3 under this title for home health services furnished on 

4 or after October 1, 2005, by a qualified RCH-based 

5 home health agency (as defined in paragraph (2))— 

6 ‘‘(A) the agency may make a one-time elec7 tion to waive application of the prospective pay8 ment system established under this section to 

9 such services furnished by the agency; and 

10 ‘‘(B) in the case of such an election, pay11 ment shall be made on the basis of 101 percent 

12 of the reasonable costs incurred in furnishing 

13 such services as determined under section 

14 1861(v), but without regard to the amount of 

15 the customary or other charges with respect to 

16 such services or the limitations established 

17 under paragraph (1)(L) of such section. 

18 ‘‘(2) QUALIFIED RCH-BASED HOME HEALTH

19 AGENCY DEFINED.—For purposes of paragraph (1), 

20 a ‘qualified RCH-based home health agency’ is a 

21 home health agency that is a provider-based entity 

22 (as defined in section 404 of the Medicare, Medicaid, 

23 and SCHIP Benefits Improvement and Protection 

24 Act of 2000 (Appendix F, 114 Stat. 2763A–506), as 

25 enacted into law by section 1(a)(6) of Public Law 
7 

•S 933 IS

1 106–554) of a rural community hospital that is lo2 cated— 

3 ‘‘(A) in a county in which no main or 

4 branch office of another home health agency is 

5 located; or 

6 ‘‘(B) at least 35 miles from any main or 

7 branch office of another home health agency.’’. 

8 (ii) CONFORMING CHANGES.— 

9 (I) PAYMENT UNDER PART A.— 

10 Section 1814(b) (42 U.S.C. 1395f(b)) 

11 is amended by inserting ‘‘or with re12 spect to services to which section 

13 1895(f) applies’’ after ‘‘equipment’’ in 

14 the matter preceding paragraph (1). 

15 (II) PAYMENTS UNDER PART

16 B.—Section 1833(a)(2)(A) (42 U.S.C. 

17 1395l(a)(2)(A)) is amended by strik18 ing ‘‘the prospective payment system 

19 under’’. 

20 (III) PER VISIT LIMITS.—Section 

21 1861(v)(1)(L)(i) (42 U.S.C. 

22 1395x(v)(1)(L)(i)) is amended by in23 serting ‘‘(other than by a qualified 

24 RCH-based home health agency (as 

25 defined in section 1895(f)(2))’’ after 
8 

•S 933 IS

1 ‘‘with respect to services furnished by 

2 home health agencies’’. 

3 (iii) CONSOLIDATED BILLING.— 

4 (I) RECIPIENT OF PAYMENT.— 

5 Section 1842(b)(6)(F) (42 U.S.C. 

6 1395u(b)(6)(F)) is amended by in7 serting ‘‘and excluding home health 

8 services to which section 1895(f) ap9 plies’’ after ‘‘provided for in such sec10 tion’’. 

11 (II) EXCEPTION TO EXCLUSION

12 FROM COVERAGE.—Section 1862(a) 

13 (42 U.S.C. 1395y(a)) is amended by 

14 inserting before the period at the end 

15 of the second sentence the following: 

16 ‘‘and paragraph (21) shall not apply 

17 to home health services to which sec18 tion 1895(f) applies’’. 

19 (4) EXEMPTION FROM 30-PERCENT REDUCTION

20 IN REIMBURSEMENT FOR BAD DEBT.—Section 

21 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amend22 ed by inserting ‘‘(other than for a rural community 

23 hospital)’’ after ‘‘In determining such reasonable 

24 costs for hospitals’’. 
9 

•S 933 IS

1 (c) BENEFICIARY COST-SHARING FOR OUTPATIENT

2 SERVICES.—Section 1834(n) (as added by subsection 

3 (b)(2)) is amended— 

4 (1) by redesignating paragraphs (1) and (2) as 

5 subparagraphs (A) and (B), respectively; 

6 (2) by inserting ‘‘(1)’’ after ‘‘(n)’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(2) The amounts of beneficiary cost-sharing for out9 patient services furnished in a rural community hospital 

10 under this part shall be as follows: 

11 ‘‘(A) For items and services that would have 

12 been paid under section 1833(t) if provided by a 

13 hospital, the amount of cost-sharing determined 

14 under paragraph (8) of such section. 

15 ‘‘(B) For items and services that would have 

16 been paid under section 1833(h) if furnished by a 

17 provider or supplier, no cost-sharing shall apply. 

18 ‘‘(C) For all other items and services, the 

19 amount of cost-sharing that would apply to the item 

20 or service under the methodology that would be used 

21 to determine payment for such item or service if pro22 vided by a physician, provider, or supplier, as the 

23 case may be.’’. 

24 (d) CONFORMING AMENDMENTS.— 
10 

•S 933 IS

1 (1) PART A PAYMENT.—Section 1814(b) (42 

2 U.S.C. 1395f(b)) is amended in the matter pre3 ceding paragraph (1) by inserting ‘‘other than inpa4 tient hospital services furnished by a rural commu5 nity hospital,’’ after ‘‘critical access hospital serv6 ices,’’. 

7 (2) PART B PAYMENT.— 

8 (A) IN GENERAL.—Section 1833(a) (42 

9 U.S.C. 1395l(a)) is amended— 

10 (i) in paragraph (2), in the matter be11 fore subparagraph (A), by striking ‘‘and 

12 (I)’’ and inserting ‘‘(I), and (K)’’; 

13 (ii) by striking ‘‘and’’ at the end of 

14 paragraph (8); 

15 (iii) by striking the period at the end 

16 of paragraph (9) and inserting ‘‘; and’’; 

17 and 

18 (iv) by adding at the end the fol19 lowing: 

20 ‘‘(10) in the case of outpatient services fur21 nished by a rural community hospital, the amounts 

22 described in section 1834(n).’’. 

23 (B) AMBULANCE SERVICES.—Section 

24 1834(l)(8) (42 U.S.C. 1395m(l)(8)) is amend25 ed— 
11 

•S 933 IS

1 (i) in the heading, by striking ‘‘CRIT2 ICAL ACCESS HOSPITALS’’ and inserting 

3 ‘‘CERTAIN FACILITIES’’; 

4 (ii) in the matter preceding subpara5 graph (A), by striking ‘‘the reasonable 

6 costs’’ and inserting ‘‘101 percent of the 

7 reasonable costs’’; 

8 (iii) by striking ‘‘or’’ at the end of 

9 subparagraph (A); 

10 (iv) by redesignating subparagraph 

11 (B) as subparagraph (C); 

12 (v) by inserting after subparagraph 

13 (A) the following new subparagraph: 

14 ‘‘(B) by a rural community hospital (as de15 fined in section 1861(bbb)(1)), or’’; and 

16 (vi) in subparagraph (C), as so redes17 ignated, by inserting ‘‘or a rural commu18 nity hospital’’ after ‘‘critical access hos19 pital’’. 

20 (3) TECHNICAL AMENDMENTS.— 

21 (A) CONSULTATION WITH STATE AGEN22 CIES.—Section 1863 (42 U.S.C. 1395z) is 

23 amended by striking ‘‘and (dd)(2)’’ and insert24 ing ‘‘(dd)(2), (mm)(1), and (bbb)(1)’’. 
12 

•S 933 IS

1 (B) PROVIDER AGREEMENTS.—Section 

2 1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)) is 

3 amended by inserting ‘‘section 1834(n)(2),’’ 

4 after ‘‘section 1833(b),’’. 

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

6 this section shall apply to items and services furnished on 

7 or after October 1, 2005. 

8 SEC. 3. REMOVING BARRIERS TO ESTABLISHMENT OF DIS9 TINCT PART UNITS BY RCH AND CAH FACILI10 TIES. 

11 (a) IN GENERAL.—Section 1886(d)(1)(B) (42 U.S.C. 

12 1395(d)(1)(B)) is amended by striking ‘‘a distinct part of 

13 the hospital (as defined by the Secretary)’’ in the matter 

14 following clause (v) and inserting ‘‘a distinct part (as de15 fined by the Secretary) of the hospital or of a critical ac16 cess hospital or a rural community hospital’’. 

17 (b) REVISION OF LIMITS ON AUTHORITY FOR CAHS

18 TO ESTABLISH PSYCHIATRIC AND REHABILITATION DIS19 TINCT PART UNITS.—Section 1820(c)(2)(E)(iv) (42 

20 U.S.C. 1395i–4(c)(2)(E)(iv)) is amended— 

21 (1) by striking ‘‘If’’ and inserting ‘‘If the Sec22 retary finds that’’; 

23 (2) by striking ‘‘with respect to a cost reporting 

24 period’’; and 
13 

•S 933 IS

1 (3) by striking ‘‘during such period’’ and insert2 ing ‘‘after such finding is made’’. 

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

4 this section shall apply to determinations with respect to 

5 distinct part unit status that are made on or after October 

6 1, 2005. 

7 SEC. 4. IMPROVEMENTS TO MEDICARE CRITICAL ACCESS 

8 HOSPITAL (CAH) PROGRAM. 

9 (a) PAYMENTS TO HOME HEALTH AGENCIES OWNED

10 AND OPERATED BY A CAH.—Section 1895(f) (42 U.S.C. 

11 1395fff(f)), as added by section 2(b)(3), is further amend12 ed by inserting ‘‘or by a home health agency that is owned 

13 and operated by a critical access hospital (as defined in 

14 section 1861(mm)(1))’’ after ‘‘as defined in paragraph 

15 (2))’’. 

16 (b) PAYMENTS TO CAH-OWNED SNFS.— 

17 (1) IN GENERAL.—Section 1888(e) (42 U.S.C. 

18 1395yy(e)) is amended— 

19 (A) in paragraph (1), by striking ‘‘and 

20 (12)’’ and inserting ‘‘(12), and (13)’’; and 

21 (B) by adding at the end thereof the fol22 lowing: 

23 ‘‘(13) EXEMPTION OF CAH FACILITIES FROM

24 PPS.—In determining payments under this part for 

25 covered skilled nursing facility services furnished on 
14 

•S 933 IS

1 or after October 1, 2005, by a skilled nursing facil2 ity that is a distinct part unit of a critical access 

3 hospital (as defined in section 1861(mm)(1)) or is 

4 owned and operated by a critical access hospital— 

5 ‘‘(A) the prospective payment system es6 tablished under this subsection shall not apply; 

7 and 

8 ‘‘(B) payment shall be made on the basis 

9 of 101 percent of the reasonable costs incurred 

10 in furnishing such services as determined under 

11 section 1861(v), but without regard to the 

12 amount of the customary or other charges with 

13 respect to such services or the limitations estab14 lished under subsection (a)’’. 

15 (2) CONFORMING CHANGES.— 

16 (A) IN GENERAL.—Section 1814(b) (42 

17 U.S.C. 1395f(b)), as amended by section 

18 2(d)(1), is amended in the matter preceding 

19 paragraph (1)— 

20 (i) by inserting ‘‘other than a skilled 

21 nursing facility providing covered skilled 

22 nursing facility services (as defined in sec23 tion 1888(e)(2)) or posthospital extended 

24 care services to which section 1888(e)(13) 

25 applies,’’ after ‘‘inpatient hospital services 
15 

•S 933 IS

1 furnished by a rural community hospital,’’; 

2 and 

3 (ii) by striking ‘‘1813, 1886,’’ and in4 serting ‘‘1813, 1886, 1888,’’. 

5 (B) CONSOLIDATED BILLING.— 

6 (i) RECIPIENT OF PAYMENT.—Section 

7 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) 

8 is amended by inserting ‘‘services to which 

9 paragraph (7)(C) or (13) of section 

10 1888(e) applies and’’ after ‘‘other than’’. 

11 (ii) EXCEPTION TO EXCLUSION FROM

12 COVERAGE.—Section 1862(a)(18) (42 

13 U.S.C. 1395y(a)(18)) is amended by in14 serting ‘‘(other than services to which 

15 paragraph (7)(C) or (13) of section 

16 1888(e) applies)’’ after ‘‘section 

17 1888(e)(2)(A)(i)’’. 

18 (c) PAYMENTS TO DISTINCT PART PSYCHIATRIC OR

19 REHABILITATION UNITS OF CAHS.— 

20 (1) IN GENERAL.—Section 1886(b) (42 U.S.C. 

21 1395(b)) is amended— 

22 (A) in paragraph (1), by inserting ‘‘, other 

23 than a distinct part psychiatric or rehabilitation 

24 unit to which paragraph (8) applies,’’ after 

25 ‘‘subsection (d)(1)(B)’’; and 
16 

•S 933 IS

1 (B) by adding at the end the following: 

2 ‘‘(8) EXEMPTION OF CERTAIN DISTINCT PART

3 PSYCHIATRIC OR REHABILITATION UNITS FROM

4 COST LIMITS.—In determining payments under this 

5 part for inpatient hospital services furnished on or 

6 after October 1, 2005, by a distinct part psychiatric 

7 or rehabilitation unit (described in the matter fol8 lowing clause (v) of subsection (d)(1)(B)) of a crit9 ical access hospital (as defined in section 

10 1861(mm)(1))— 

11 ‘‘(A) the limits imposed under the pre12 ceding paragraphs of this subsection shall not 

13 apply; and 

14 ‘‘(B) payment shall be made on the basis 

15 of 101 percent of the reasonable costs incurred 

16 in furnishing such services as determined under 

17 section 1861(v), but without regard to the 

18 amount of the customary or other charges with 

19 respect to such services.’’. 

20 (2) CONFORMING AMENDMENT.—Section 

21 1814(l) (42 U.S.C. 1395f(l)) is amended by insert22 ing ‘‘furnished during fiscal year 2005’’ after ‘‘such 

23 unit’’. 

24 (d) ELIMINATION OF ISOLATION TEST FOR COST25 BASED CAH AMBULANCE SERVICES.—Paragraph (8) of 
17 

•S 933 IS

1 section 1834(l) (42 U.S.C. 1395m(l)) is amended by strik2 ing the comma at the end of subparagraph (B) and all 

3 that follows and inserting a period. 

4 (e) TECHNICAL CORRECTIONS.— 

5 (1) SECTION 403(b) OF BBRA 1999.—Section 

6 1820(b)(2) (42 U.S.C. 1395i-4(b)(2)) is amended by 

7 striking ‘‘nonprofit or public hospitals’’ and insert8 ing ‘‘hospitals’’. 

9 (2) SECTION 203(b) OF BIPA 2000.—Section 

10 1883(a)(3) (42 U.S.C. 1395tt(a)(3)) is amended— 

11 (A) by inserting ‘‘section 1861(v)(1)(G) 

12 or’’ after ‘‘Notwithstanding’’; and 

13 (B) by striking ‘‘covered skilled nursing fa14 cility’’. 

15 (f) EFFECTIVE DATES.— 

16 (1) ELIMINATION OF REQUIREMENTS.—The 

17 amendments made by subsections (a) and (c) shall 

18 apply to services furnished on or after October 1, 

19 2005. 

20 (2) TECHNICAL CORRECTIONS.— 

21 (A) BBRA.—The amendment made by sub22 section (e)(1) shall be effective as if included in 

23 the enactment of section 403(b) of the Medi24 care, Medicaid, and SCHIP Balanced Budget 

25 Refinement Act of 1999 (Appendix F, 113 Stat. 
18 

•S 933 IS

1 1501A–321), as enacted into law by section 

2 1000(a)(6) of Public Law 106–113. 

3 (B) BIPA.—The amendments made by sub4 section (e)(2) shall be effective as if included in 

5 the enactment of section 203(b) of the Medi6 care, Medicaid, and SCHIP Benefits Improve7 ment and Protection Act of 2000 (Appendix F, 

8 114 Stat. 2763A–463), as enacted into law by 

9 section 1(a)(6) of Public Law 106–554. 

Æ