I

103D CONGRESS

1ST SESSION H. R. 192

To provide for improvements to the health of farm families, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. GUNDERSON introduced the following bill; which was referred to the

Committee on Energy and Commerce

A BILL

To provide for improvements to the health of farm families,

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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Farm and Rural Medi5 cal Equity Reform Act of 1993’’.

TABLE OF CONTENTS

Sec. 1. Short title.

TITLE I—DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES

FOR THE SELF-EMPLOYED

Sec. 101. Increase in amount of deduction for health insurance costs of selfemployed individuals.

TITLE II—MEDICAL SAVINGS ACCOUNTS
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Sec. 202. Unused amounts in flexible spending accounts transferable to medical

savings accounts.

Sec. 203. Deduction for amounts paid for qualified catastrophic coverage health

plan.

TITLE III—UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC

BILLS

Sec. 301. Advisory council on health claim processing standardization.

Sec. 302. Specification and use of uniform health claim reimbursement forms.

TITLE IV—HEALTH INSURANCE PORTABILITY PROVISIONS

Sec. 401. Limitation on exclusion for pre-existing conditions; assurance of continuity of coverage.

Sec. 402. Limits on premium increases.

Sec. 403. Definitions.

Sec. 404. Excise tax for violations.

TITLE V—IMPROVED ACCESS TO RURAL HEALTH SERVICES

Subtitle A—Rural Emergency Medical Services Amendments

Sec. 501. Establishment of office of emergency medical services.

Sec. 502. State offices of emergency medical services.

Sec. 503. Programs for rural areas.

Sec. 504. Funding.

Sec. 505. Conforming Amendments.

Subtitle B—Extension of Special Treatment Rules for Medicare Dependent,

Small Rural Hospitals

Sec. 511. Extension of special treatment rules for Medicare dependent, small

rural hospitals.

Subtitle C—Outreach Grant Program

Sec. 521. Establishment of program of grants for rural health outreach.

1 TITLE I—DEDUCTIBILITY OF

2 HEALTH INSURANCE EX3 PENSES FOR THE SELF-EM4 PLOYED

5 SEC. 101. INCREASE IN AMOUNT OF DEDUCTION FOR

6 HEALTH INSURANCE COSTS OF SELF-EM7 PLOYED INDIVIDUALS.

8 (a) INCREASE IN DEDUCTION.—Paragraph (1) of

9 section 162(l) of the Internal Revenue Code of 1986 (re-
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1 lating to special rules for health insurance costs of self2 employed individuals) is amended by striking ‘‘25 percent’’

3 and inserting ‘‘100 percent’’.

4 (b) DEDUCTION MADE PERMANENT.—Subsection (l)

5 of section 162 of such Code is amended by striking para6 graph (6).

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

8 this section shall apply to taxable years beginning after

9 June 30, 1992.

10 TITLE II—MEDICAL SAVINGS

11 ACCOUNTS

12 SEC. 201. MEDICAL SAVINGS ACCOUNTS.

13 (a) IN GENERAL.—Part VII of subchapter B of chap14 ter 1 of the Internal Revenue Code of 1986 (relating to

15 additional itemized deductions for individuals) is amended

16 by redesignating section 220 as section 221 and by insert17 ing after section 219 the following new section:

18 ‘‘SEC. 220. MEDICAL SAVINGS ACCOUNTS.

19 ‘‘(a) DEDUCTION ALLOWED.—In the case of an eligi20 ble individual, there shall be allowed as a deduction

21 amounts paid in cash during the taxable year by or on

22 behalf of such individual to a medical savings account.

23 ‘‘(b) LIMITATION.—

24 ‘‘(1) IN GENERAL.—The amount allowable as a

25 deduction under subsection (a) to an individual for
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1 the taxable year shall not exceed the excess (if any)

2 of—

3 ‘‘(A) the lesser of—

4 ‘‘(i) the applicable limit, or

5 ‘‘(ii) the compensation (as defined in

6 section 219(f)) includible in the individ7 ual’s gross income for the taxable year,

8 over

9 ‘‘(B) the sum of—

10 ‘‘(i) the value of employer-provided

11 coverage for the medical expenses of such

12 individual,

13 ‘‘(ii) the amount paid by the individ14 ual (other than from amounts distributed

15 from a medical savings account) for cov16 erage under qualified catastrophic coverage

17 health plan for coverage for such individ18 ual, the spouse of such individual, and de19 pendents (as defined in section 152) of

20 such individual, plus

21 ‘‘(iii) the aggregate amount contrib22 uted to such account during the taxable

23 year pursuant to section 125(d)(3).

24 ‘‘(2) APPLICABLE LIMIT.—For purposes of

25 paragraph (1), the applicable limit is the sum of—
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1 ‘‘(A) $4,800, plus

2 ‘‘(B) $600 for each individual who is a de3 pendent (as defined in section 152) of the indi4 vidual for whose benefit the account is estab5 lished.

6 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur7 poses of this section—

8 ‘‘(1) MEDICAL SAVINGS ACCOUNT.—The term

9 ‘medical savings account’ means a trust created or

10 organized in the United States exclusively for the

11 purpose of paying the qualified medical expenses of

12 the individual for whose benefit the trust is estab13 lished, but only if the written governing instrument

14 creating the trust meets the following requirements:

15 ‘‘(A) A contribution will be accepted unless

16 it is in cash and contributions will not be ac17 cepted for any taxable year in excess of the ap18 plicable limit )as defined in subsection (b)(2)).

19 ‘‘(B) The trustee is a bank (as defined in

20 section 408(n)) or another person who dem21 onstrates to the satisfaction of the Secretary

22 that the manner in which such person will ad23 minister the trust will be consistent with the re24 quirements of this section.
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1 ‘‘(C) No part of the trust assets will be in2 vested in life insurance contracts.

3 ‘‘(D) The assets of the trust will not be

4 commingled with other property except in a

5 common trust fund or common investment

6 fund.

7 ‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible

8 individual’ means any individual if—

9 ‘‘(A) Such individual is not covered by any

10 employer-provided group health plan, or

11 ‘‘(B) such individual is covered by an em12 ployer-provided group health plan which is a

13 qualified catastrophic coverage health plan and

14 is not covered by any other health plan.

15 ‘‘(3) QUALIFIED MEDICAL EXPENSES.—

16 ‘‘(A) IN GENERAL.—The term ‘qualified

17 medical expenses’ means—

18 ‘‘(i) medical expenses, and

19 ‘‘(ii) amounts paid for qualified long20 term care insurance (as defined in section

21 818(g)).

22 ‘‘(B) MEDICAL EXPENSES.—The term

23 ‘medical expenses’ means amount paid by the

24 individual for whose benefit the account was es25 tablished for medical care (as defined in section
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1 213) of such individual, the spouse of such indi2 vidual, and any dependent (as defined in section

3 152) of such individual, but only to the extent

4 such amounts are not compensated for by in5 surance of otherwise.

6 ‘‘(4) QUALIFIED CATASTROPHIC COVERAGE

7 HEALTH PLAN.—The term ‘qualified catastrophic

8 coverage health plan’ means any health plan which

9 is certified by the Secretary of Health and Human

10 Services as a plan—

11 ‘‘(A) which provides no compensation for

12 medical expenses not exceeding $3,000 during

13 any year,

14 ‘‘(B) which requires the individual to pay

15 15 percent of such individual’s medical expenses

16 to the extent they exceed $3,000 but not

17 $9,000 during any year, and

18 ‘‘(C) which provides full reimbursement for

19 medical expenses exceeding $9,000.

20 ‘‘(5) TIME WHEN CONTRIBUTIONS DEEMED

21 MADE.—A taxpayer shall be deemed to have made a

22 contribution on the last day of the preceding taxable

23 year if the contribution is made on account of such

24 taxable year and is made not later than the time
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1 prescribed by law for filing the return for such tax2 able year (not including extensions thereof).

3 ‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—

4 ‘‘(1) IN GENERAL.—Except as otherwise pro5 vided in this subsection, any amount paid or distrib6 uted out of a medical savings account shall be in7 cluded in the gross income of the individual for

8 whose benefit such account was established unless

9 such amount is used exclusively to pay the qualified

10 medical expenses of such individual.

11 ‘‘(2) EXCESS CONTRIBUTIONS RETURNED BE12 FORE DUE DATE OF RETURN.—Paragraph (1) shall

13 not apply to the distribution of any contribution paid

14 during a taxable year to a medical savings account

15 to the extent that such contribution exceeds the

16 amount allowable as a deduction under subsection

17 (a) if—

18 ‘‘(A) such distribution is received on or be19 fore the day prescribed by law (including exten20 sions of time) for filing such individual’s return

21 for such taxable year,

22 ‘‘(B) no deduction is allowed under sub23 section (a) with respect to such excess contribu24 tion, and
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1 ‘‘(C) such distribution is accompanied by

2 the amount of net income attributable to such

3 excess contribution.

4 Any net income described in subparagraph (C) shall

5 be included in the gross income of the individual for

6 the taxable year in which it is received.

7 ‘‘(e) TAX TREATMENT OF ACCOUNTS.—

8 ‘‘(1) EXEMPTION FROM TAX.—A medical sav9 ings account is exempt from taxation under this sub10 title unless such account has ceased to be an invest11 ment savings account by reason of paragraph (2).

12 Notwithstanding the preceding sentence, any such

13 account is subject to the taxes imposed by section

14 511 (relating to imposition of tax on unrelated busi15 ness income of charitable, etc. organizations).

16 ‘‘(2) LOSS OF EXEMPTION OF ACCOUNT WHERE

17 INDIVIDUAL ENGAGES IN PROHIBITED TRANS18 ACTION.—

19 ‘‘(A) IN GENERAL.—If, during any taxable

20 year of the individual for whose benefit the

21 medical savings account was established, such

22 individual engages in any transaction prohibited

23 by section 4975 with respect to the account, the

24 account ceases to be a medical savings account

25 as of the first day of that taxable year.
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1 ‘‘(B) ACCOUNT TREATED AS DISTRIBUTING

2 ALL ITS ASSETS.—In any case in which any ac3 count ceases to be a medical savings account by

4 reason of subparagraph (A) on the first day of

5 any taxable year, paragraph (1) of subsection

6 (d) applies as if there were a distribution on

7 such first day in an amount equal to the fair

8 market value (on such first day) of all assets in

9 the account (on such first day).

10 ‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU11 RITY.—If, during any taxable year, the individual for

12 whose benefit a medical savings account was estab13 lished uses the account or any portion thereof as se14 curity for a loan, the portion so used is treated as

15 distributed to that individual.

16 ‘‘(f) ADDITIONAL TAX ON CERTAIN AMOUNTS IN17 CLUDED IN GROSS INCOME.—

18 ‘‘(1) DISTRIBUTION NOT USED FOR QUALIFIED

19 MEDICAL EXPENSES.—If a distribution from a medi20 cal savings account is made, and not used to pay the

21 qualified medical expenses of the individual for

22 whose benefit the account was established, the tax li23 ability of such individual for the taxable year in

24 which such distribution is received shall be increased

25 by an amount equal to 10 percent of the amount of
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1 the distribution which is includible in gross income

2 for such taxable year.

3 ‘‘(2) DISQUALIFICATION CASES.—If an amount

4 is includible in the gross income of an individual for

5 a taxable year under subsection (e), his tax under

6 this chapter for such taxable year shall be increased

7 by an amount equal to 10 percent of such amount

8 includible in his gross income.

9 ‘‘(3) DISABILITY OR DEATH CASES.—Para10 graphs (1) and (2) do not apply if the payment or

11 distribution is made after the individual for whose

12 benefit the medical savings account was established

13 becomes disabled within the meaning of section

14 72(m)(7) or dies.

15 ‘‘(g) SPECIAL RULES.—

16 ‘‘(1) COMMUNITY PROPERTY LAWS.—This sec17 tion shall be applied without regard to any commu18 nity property laws.

19 ‘‘(2) CUSTODIAL ACCOUNTS.—For purposes of

20 this section, a custodial account shall be treated as

21 a trust if—

22 ‘‘(A) the assets of such account are held by

23 a bank (as defined in section 408(n)) or an24 other person who demonstrates to the satisfac25 tion of the Secretary that the manner in which
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1 he will administer the account will be consistent

2 with the requirements of this section, and

3 ‘‘(B) the custodial account would, except

4 for the fact that it is not a trust, constitute a

5 medical savings account described in subsection

6 (c).

7 For purposes of this title, in the case of a custodial

8 account treated as a trust by reason of the preceding

9 sentence, the custodian of such account shall be

10 treated as the trustee thereof.

11 ‘‘(3) DENIAL OF DEDUCTIONS.—No amount

12 paid or distributed from a medical savings account

13 shall be taken into account in determining the de14 duction provided by section 213.

15 ‘‘(h) INFLATION ADJUSTMENT.—

16 ‘‘(1) IN GENERAL.—In the case of any taxable

17 year beginning in a calendar year after 1994, each

18 applicable dollar amount shall be increased by an

19 amount equal to—

20 ‘‘(A) such dollar amount, multiplied by

21 ‘‘(B) the cost-of-living adjustment for the

22 calendar year in which the taxable year begins.

23 ‘‘(2) COST-OF-LIVING ADJUSTMENT.—For pur24 poses of paragraph (1), the cost-of-living adjustment
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1 for any calendar year is the percentage (if any) by

2 which—

3 ‘‘(A) the deemed average total wages (as

4 defined in section 209(k) of the Social Security

5 Act) for the preceding calendar year, exceeds

6 ‘‘(B) the deemed average total wages (as

7 so defined) for calendar year 1993.

8 ‘‘(3) APPLICABLE DOLLAR AMOUNT.—For pur9 poses of paragraph (1), the term ‘applicable dollar

10 amount’ means—

11 ‘‘(A) the $4,800 and $600 amounts in sub12 section (b), and

13 ‘‘(B) the $3,000 and $9,000 amounts in

14 subsection (c)(4).

15 ‘‘(4) ROUNDING.—If any amount as adjusted

16 under paragraph (1) is not a multiple of $10, such

17 amount shall be rounded to the nearest multiple of

18 $10 (or, if such amount is a multiple of $5 and not

19 of $10, such amount shall be rounded to the next

20 highest multiple of $10).

21 ‘‘(i) REPORTS.—The trustee of a medical savings ac22 count shall make such reports regarding such account to

23 the Secretary and to the individual for whose benefit the

24 account is maintained with respect to contributions, dis25 tributions, and such other matters as the Secretary may
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1 require under regulations. The reports required by this

2 subsection shall be filed at such time and in such manner

3 and furnished to such individuals at such time and in such

4 manner as may be required by those regulations.’’.

5 (b) DEDUCTION ALLOWED IN ARRIVING AT AD6 JUSTED GROSS INCOME.—Paragraph (7) of section 62(a)

7 of such Code (relating to retirement savings) is amend8 ed—

9 (1) by inserting ‘‘OR MEDICAL EXPENSE’’ after

10 ‘‘RETIREMENT’’ in the heading of such paragraph,

11 and

12 (2) by inserting before the period at the end

13 thereof the following: ‘‘and the deduction allowed by

14 section 220 (relating to deduction of certain pay15 ments to medical savings accounts)’’.

16 (c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973

17 of such Code (relating to tax on excess contributions to

18 individual retirement accounts, certain section 403(b) con19 tracts, and certain individual retirement annuities) is

20 amended—

21 (1) by inserting ‘‘MEDICAL SAVINGS AC22 COUNTS,’’ after ‘‘ACCOUNTS,’’ in the heading of

23 such section,
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1 (2) by redesignating paragraph (2) of sub2 section (a) as paragraph (3) and by inserting after

3 paragraph (1) the following:

4 ‘‘(2) a medical savings account (within the

5 meaning of section 220(c)),’’,

6 (3) by striking ‘‘or’’ at the end of paragraph

7 (1) of subsection (a), and

8 (4) by adding at the end thereof the following

9 new subsection:

10 ‘‘(d) EXCESS CONTRIBUTIONS TO MEDICAL SAVINGS

11 ACCOUNTS.—For purposes of this section, in the case of

12 a medical savings account, the term ‘excess contributions’

13 means the amount by which the amount contributed for

14 the taxable year to the account exceeds the amount allow15 able as a deduction under section 220 for such taxable

16 year. For purposes of this subsection, any contribution

17 which is distributed out of the medical savings account

18 and a distribution to which section 220(d)(2) applies shall

19 be treated as an amount not contributed.’’.

20 (d) TAX ON PROHIBITED TRANSACTIONS.—Section

21 4975 of such Code (relating to prohibited transactions)

22 is amended—

23 (1) by adding at the end of subsection (c) the

24 following new paragraph:
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1 ‘‘(4) SPECIAL RULE FOR MEDICAL SAVINGS AC2 COUNTS.—An individual for whose benefit a medical

3 savings account is established shall be exempt from

4 the tax imposed by this section with respect to any

5 transaction concerning such account (which would

6 otherwise be taxable under this section) if, with re7 spect to such transaction, the account ceases to be

8 a medical savings account by reason of the applica9 tion of section 220(e)(2)(A) to such account.’’, and

10 (2) by inserting ‘‘or a medical savings account

11 described in section 220(c)’’ in subsection (e)(1)

12 after ‘‘described in section 408(a)’’.

13 (e) FAILURE TO PROVIDE REPORTS ON MEDICAL

14 SAVINGS ACCOUNTS.—Section 6693 of such Code (relat15 ing to failure to provide reports on individual retirement

16 account or annuities) is amended—

17 (1) by inserting ‘‘OR ON MEDICAL SAVINGS

18 ACCOUNTS’’ after ‘‘ANNUITIES’’ in the heading of

19 such section, and

20 (2) by adding at the end of subsection (a) the

21 following: ‘‘The person required by section 220(i) to

22 file a report regarding a medical savings account at

23 the time and in the manner required by such section

24 shall pay a penalty of $50 for each failure unless it
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1 is shown that such failure is due to reasonable

2 cause.’’

3 (f) CLERICAL AMENDMENTS.—

4 (1) The table of sections for part VII of sub5 chapter B of chapter 1 of such Code is amended by

6 striking the item relating to section 220 and insert7 ing the following:

‘‘Sec. 220. Medical savings accounts.

‘‘Sec. 221. Cross reference.’’.

8 (2) The table of sections for chapter 43 of such

9 Code is amended by striking the item relating to sec10 tion 4973 and inserting the following:

‘‘Sec. 4973. Tax on excess contributions to individual retirement accounts, medical savings accounts, certain 403(b) contracts, and certain individual retirement annuities.’’.

11 (3) The table of sections for subchapter B of

12 chapter 68 of such Code is amended by inserting ‘‘or

13 on medical savings accounts’’ after ‘‘annuities’’ in

14 the item relating to section 6693.

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

16 this section shall apply to taxable years beginning after

17 December 31, 1993.

18 SEC. 202. UNUSED AMOUNTS IN FLEXIBLE SPENDING AC19 COUNTS TRANSFERABLE TO MEDICAL SAV20 INGS ACCOUNTS.

21 (a) IN GENERAL.—Subsection (d) of section 125 of

22 the Internal Revenue Code of 1986 (relating to cafeteria
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1 plans) is amended by adding at the end thereof the follow2 ing new paragraph:

3 ‘‘(3) UNUSED AMOUNTS TRANSFERABLE TO

4 MEDICAL SAVINGS ACCOUNTS.—

5 ‘‘(A) IN GENERAL.—Subsection (a) shall

6 not fail to apply to a participant in a plan, and

7 a plan shall not fail to be treated as a cafeteria

8 plan, solely because under the plan amounts not

9 paid out as reimbursements under a flexible

10 spending arrangement for health and disability

11 for the benefit of an individual are contributed

12 to a medical savings account (as defined in sec13 tion 220(c)) for the benefit of such individual.

14 ‘‘(B) SPECIAL RULES.—

15 ‘‘(i) TIMING OF CONTRIBUTIONS.—

16 Contributions made under this paragraph

17 shall be made on the last day of the plan

18 year of the cafeteria plan.

19 ‘‘(ii) AVAILABILITY REQUIREMENT.—

20 Subparagraph (A) shall apply only if the

21 plan is available to at least 80 percent of

22 the employees of the employer. For pur23 poses of the preceding sentence, there shall

24 be excluded employees who are excluded

25 under section 414(q)(8) or who would be
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1 so excluded if ‘30’ were substituted for

‘171 2 ⁄2’ in subparagraph (B) thereof.’’.

3 (b) TREATMENT OF AMOUNTS RECEIVED BY QUALI4 FIED CASH OR DEFERRED ARRANGEMENT.—

5 (1) Paragraph (2) of section 401(k) of such

6 Code is amended by striking ‘‘and’’ at the end of

7 subparagraph (C), by striking the period at the end

8 of subparagraph (D) and inserting ‘‘, and’’, and by

9 adding at the end thereof the following new subpara10 graph:

11 ‘‘(E) which provides that, with respect to

12 amounts held by the trust which are attrib13 utable to contributions made to the trust pursu14 ant to section 125(d)(3)—

15 ‘‘(i) an employee’s right to such

16 amounts is nonforfeitable, and

17 ‘‘(ii) such amounts may be used only

18 to pay expenses (not compensated for by

19 insurance or otherwise) for the medical

20 care (as defined in section 213) of the em21 ployee, the spouse of the employee, or any

22 dependent (as defined in section 152) of

23 the employee.’’.
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1 (2) Subsection (k) of section 401 of such Code

2 is amended by adding at the end thereof the follow3 ing new paragraph:

4 ‘‘(11) TREATMENT OF AMOUNTS RECEIVED

5 FROM MEDICAL SAVINGS ARRANGEMENTS.—Con6 tributions made to a trust by reason of section

7 125(d)(3) shall not be taken into account under

8 paragraph (3)(A)(ii), and subsection (1) shall not

9 apply to such contributions.’’.

10 (c) EFFECTIVE DATE.—The amendment made by

11 this section shall apply to taxable years beginning after

12 December 31, 1993.

13 SEC. 203. DEDUCTION FOR AMOUNTS PAID FOR QUALIFIED

14 CATASTROPHIC COVERAGE HEALTH PLAN.

15 (a) IN GENERAL.—Section 213 of the Internal Reve16 nue Code of 1986 (relating to medical, dental, etc., ex17 penses) is amended adding at the end thereof the following

18 new subsection:

19 ‘‘(g) FULL DEDUCTION FOR AMOUNTS PAID FOR

20 QUALIFIED CATASTROPHIC COVERAGE HEALTH

21 PLANS.—In the case of amounts paid for coverage under

22 a qualified catastrophic coverage health plan (as defined

23 in section 220(c))—
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1 ‘‘(1) subsection (a) shall be applied without re2 gard to the limitation based on adjusted gross in3 come, and

4 ‘‘(2) such amounts shall not be taken into ac5 count in determining whether any other amounts are

6 allowable as a deduction under this section.’’.

7 (b) TECHNICAL AMENDMENT.—Paragraph (2) of

8 section 162(l) of such Code is amended by adding at the

9 end thereof the following new subparagraph:

10 ‘‘(C) QUALIFIED CATASTROPHIC COV11 ERAGE.—Paragraph (1) shall not apply to any

12 amount allowed as a deduction under section

13 213 for amounts paid for coverage under a

14 qualified catastrophic coverage health plan (as

15 defined in section 220(c)).’’.

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

17 this section shall apply to taxable years beginning after

18 December 31, 1993.

19 TITLE III—UNIFORM CLAIMS;

20 ELECTRONIC CARDS; ELEC21 TRONIC BILLING

22 SEC. 301. ADVISORY COUNCIL ON HEALTH CLAIM PROCESS23 ING STANDARDIZATION.

24 (a) ESTABLISHMENT.—The Secretary of Health and

25 Human Services (in this title referred to as the ‘‘Sec-
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1 retary’’) shall establish an Advisory Council on Health

2 Claim Processing Standardization (in this title referred to

3 as the ‘‘Council’’).

4 (b) COMPOSITION.—The Council shall consist of 15

5 members appointed by the Secretary and shall include in6 dividuals representative of the health care community.

7 (c) RECOMMENDATIONS.—Not later than 2 years

8 after a majority of its members are appointed, the Council

9 shall submit to the Secretary recommendations concern10 ing—

11 (1) standards for uniform health claim reim12 bursement forms for hospitals and physicians and

13 the information to be contained on such forms;

14 (2) standards for electronic cards that could be

15 used to store a patient’s insurance information and

16 medical records; and

17 (3) the computerization of health claim billing

18 and the use of electronic means to transmit billing

19 information from hospitals and physicians to insur20 ers and the Secretary.

21 SEC. 302. SPECIFICATION AND USE OF UNIFORM HEALTH

22 CLAIM REIMBURSEMENT FORMS.

23 (a) ESTABLISHMENT.—Taking into account the rec24 ommendations of the Council under section 301(c)(1), the

25 Secretary shall specify a uniform health claim reimburse-
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1 ment form for use by hospitals and such a form for use

2 by physicians.

3 (b) USE.—(1) Each insurer or other entity respon4 sible for administration of a health benefit plan shall re5 quire the use of the appropriate form specified under sub6 section (a) for claims for hospital services or physician

7 services in the United States under the plan.

8 (2) The requirement of paragraph (1) shall apply

9 with respect to claims for reimbursement submitted under

10 a health benefit plan more than 6 months after the date

11 of the Secretary specifies the forms under subsection (a).

12 (c) HEALTH BENEFIT PLAN DEFINED.—The term

13 ‘‘health benefit plan’’ means any hospital or medical ex14 pense incurred policy or certificate, hospital or medical

15 service plan contract, health maintenance subscriber con16 tract, multiple employer welfare arrangement, employee

17 benefit plan (as defined under the Employee Retirement

18 Income Security Act of 1974) that provides benefits with

19 respect to health care services, or the medicare or medic20 aid programs, but does not include—

21 (1) coverage only for accident, dental, vision,

22 disability income, or long-term care insurance, or

23 any combination thereof,

24 (2) coverage issued as a supplement to liability

25 insurance,
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1 (3) worker’s compensation or similar insurance,

2 or

3 (4) automobile medical-payment insurance,

4 or any combination thereof.

5 TITLE IV—HEALTH INSURANCE

6 PORTABILITY PROVISIONS

7 SEC. 401. LIMITATION ON EXCLUSION FOR PRE-EXISTING

8 CONDITIONS; ASSURANCE OF CONTINUITY OF

9 COVERAGE.

10 (a) LIMITATIONS ON TREATMENT OF PRE-EXISTING

11 CONDITIONS.—Subject to subsection (c), a carrier may

12 not impose (or require an employer to impose through a

13 waiting period for coverage under a group health plan or

14 similar requirement) a limitation or exclusion of benefits

15 under a group health plan relating to treatment of a condi16 tion based on the fact that the condition pre-existed the

17 effectiveness of the coverage if—

18 (1) the condition relates to a condition that was

19 not diagnosed or treated within 3 months before the

20 date of coverage under the plan;

21 (2) the limitation or exclusion extends over

22 more than 6 months after the date of coverage

23 under the plan;

24 (3) the limitation or exclusion applies to an in25 dividual who, as of the date of birth, was covered
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1 under the plan or whose mother, as of such date,

2 was covered under the plan; or

3 (4) the limitation or exclusion relates to preg4 nancy.

5 In the case of an individual who is eligible for coverage

6 under an employer health benefit plan but for a waiting

7 period imposed by the employer, in applying paragraphs

8 (1) and (2), the individual shall be treated as having been

9 covered under the plan as of the earliest date of the begin10 ning of the waiting period.

11 (b) ASSURANCE OF CONTINUITY OF COVERAGE

12 THROUGH PREVIOUS SATISFACTION OF PRE-EXISTING

13 CONDITION REQUIREMENT.—

14 (1) IN GENERAL.—Each carrier shall waive any

15 period applicable to a preexisting condition for simi16 lar benefits with respect to an individual to the ex17 tent that the individual was covered for the condi18 tion under any health benefit plan that was in effect

19 before the date of the enrollment under the carrier’s

20 plan.

21 (2) CONTINUOUS COVERAGE REQUIRED.—

22 (A) IN GENERAL.—Paragraph (1) shall no

23 longer apply if there is a continuous period of

24 more than 60 days on which the individual was

25 not covered under a health benefit plan.
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1 (B) TREATMENT OF WAITING PERIODS.—

2 In applying subparagraph (A), any waiting pe3 riod imposed by an employer before an em4 ployee is eligible to be covered under a policy

5 shall be treated as a period in which the em6 ployee was covered under a health benefit plan.

7 (3) EXCLUSION OF CASH-ONLY AND DREAD

8 DISEASE POLICIES.—In this subsection, the term

9 ‘‘health benefit plan’’ does not include any insurance

10 which is offered primarily to provide—

11 (A) coverage for a specified disease or ill12 ness, or

13 (B) hospital or fixed indemnity policy, un14 less the Secretary (or in the case of a plan in

15 a State, the State) determines that such a pol16 icy provides sufficiently comprehensive coverage

17 of a benefit so that it should be treated as a

18 health benefit plan under this subsection.

19 (c) REGULATORY AUTHORITY.—The Secretary is au20 thorized directly, or through the states, to issue such regu21 lations as may be required to carry out this section.

22 (d) EFFECTIVE DATE.—

23 (1) IN GENERAL.—The amendments made by

24 this section shall apply to coverage provided under

25 a group health plan on or after the first day of the
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1 first month beginning more than 1 year after the

2 date of the enactment of this Act.

3 (2) APPLICATION.—In applying paragraph (1),

4 coverage provided before the effective date shall be

5 taken into account in applying this section.

6 SEC. 402. LIMITS ON PREMIUM INCREASES.

7 (a) IN GENERAL.—A carrier may not provide for an

8 increase in the premium charged a small employer for a

9 small employer health benefit plan in a percentage that

10 exceeds the percentage change in the premium charged

11 under the plan for a newly covered employer within the

12 same class of business plus 15 percentage points.

13 (b) A carrier will only be allowed to set the maximum

14 percent increase in renewal premiums at 5 percent plus

15 the percent change in the base premium rate.

16 (c) EFFECTIVE DATE.—Subsection (a) shall apply to

17 premiums for plans renewed more than 1 year after the

18 date of the enactment of this Act.

19 SEC. 403. DEFINITIONS.

20 In this title:

21 (1) The term ‘‘carrier’’ means any entity which

22 provides health insurance or health benefits in a

23 State, and includes a licensed insurance company, a

24 prepaid hospital or medical service plan, a health

25 maintenance organization, the plan sponsor of a
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1 multiple employer welfare arrangement or an em2 ployee benefit plan (as defined under the Employee

3 Retirement Income Security Act of 1974), or any

4 other entity providing a plan of health insurance

5 subject to State insurance regulation.

6 (2) The term ‘‘employer health benefit plan’’

7 means a health benefit plan (including an employee

8 welfare benefit plan, as defined in section 3(1) of the

9 Employee Retirement Income Security Act of 1974)

10 which is offered to employees through an employer

11 and for which the employer provides for any con12 tribution to such plan or any premium for such plan

13 are deducted by the employer from compensation to

14 the employee.

15 (3) The term ‘‘full-time employee’’ means, with

16 respect to an employer, an individual who normally

17 is employed for at least thirty hours per week by the

18 employer.

19 (4) The term ‘‘small employer’’ means an entity

20 actively engaged in business which, on at least 50

21 percent of its working days during the preceding

22 year, employed at least two, but no more than one

23 hundred, full-time employees. For purposes of deter24 mining if an employer is a small employer, rules

25 similar to the rules of subsection (b) and (c) of sec-
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1 tion 414 of the Internal Revenue Code of 1986 shall

2 apply.

3 (5) The term ‘‘small employer carrier’’ means a

4 carrier with respect to the issuance of a small em5 ployer health benefit plan.

6 (6) The term ‘‘small employer health benefit

7 plan’’ means an employer health benefit plan which

8 provides coverage to one or more full-time employees

9 of a small employer.

10 (7) The term ‘‘base premium rate’’ means the

11 lowest premium that the insurer may charge for a

12 group with similar demographic characteristics, ex13 cluding factors related to health status, claims his14 tory, or duration of coverage.

15 (8) The term ‘‘State’’ means the 50 States, the

16 District of Columbia, Puerto Rico, the Virgin Is17 lands, Guam, and American Samoa.

18 SEC. 404. EXCISE TAX FOR VIOLATIONS.

19 (a) IN GENERAL.—Chapter 47 of the Internal Reve20 nue Code of 1986 (relating to taxes on group health plans)

21 is amended by adding at the end thereof the following new

22 section:

23 ‘‘SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS

24 FOR HEALTH INSURANCE.

25 ‘‘(a) GENERAL RULE.—
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1 ‘‘(1) TAX FOR PORTABILITY VIOLATIONS.—

2 There is hereby imposed a tax on a carrier for vio3 lating a requirement of section 401 of the Farm and

4 Rural Equity Reform Act of 1993, and

5 ‘‘(2) TAX FOR EXCESSIVE PREMIUM IN6 CREASE.—There is hereby imposed a tax on a car7 rier providing for a premium increase in violation of

8 section 402 of the Farm and Rural Medical Equity

9 Reform Act of 1993.

10 ‘‘(3) DETERMINATION OF VIOLATIONS.—The

11 Secretary of Health and Human Services shall de12 termine whether any carrier meets the requirements

13 of such sections.

14 ‘‘(b) AMOUNT OF TAX.—

15 ‘‘(1) IN GENERAL.—The amount of tax imposed

16 by subsection (a) by reason of 1 or more violations

17 during a taxable year shall be equal to 25 percent

18 of the gross premiums received during such taxable

19 year with respect to the employer health benefit plan

20 with respect to which the violation occurred.

21 ‘‘(2) GROSS PREMIUMS.—For purposes of para22 graph (1), gross premiums shall include any consid23 eration received with respect to any health benefit

24 plan.
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1 ‘‘(3) CONTROLLED GROUPS.—For purposes of

2 paragraph (1)—

3 ‘‘(A) CONTROLLED GROUP OF CORPORA4 TIONS.—All corporations which are members of

5 the same controlled group of corporations shall

6 be treated as 1 person. For purposes of the pre7 ceding sentence, the term ‘controlled group of

8 corporations’ has the meaning given to such

9 term by section 1563(a), except that—

10 ‘‘(i) ‘more than 50 percent’ shall be

11 substituted for ‘at least 80 percent’ each

12 place it appears in section 1563(a)(1), and

13 ‘‘(ii) the determination shall be made

14 without regard to subsections (a)(4) and

15 (e)(3)(C) of section 1563.

16 ‘‘(B) PARTNERSHIPS, PROPRIETORSHIPS,

17 ETC., WHICH ARE UNDER COMMON CONTROL.—

18 Under regulations prescribed by the Secretary,

19 all trades or business (whether or not incor20 porated) which are under common control shall

21 be treated as 1 person. The regulations pre22 scribed under this subparagraph shall be based

23 on principles similar to the principles which

24 apply in the case of subparagraph (A).

25 ‘‘(c) LIMITATION ON TAX.—
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1 ‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT

2 DISCOVERED EXERCISING REASONABLE DILI3 GENCE.—No tax shall be imposed by subsection (a)

4 with respect to any failure for which it is established

5 to the satisfaction of the Secretary that the person

6 on whom the tax is imposed did not know, and exer7 cising reasonable diligence would not have known,

8 that such failure existed.

9 ‘‘(2) TAX NOT TO APPLY WHERE FAILURES

10 CORRECTED WITHIN 30 DAYS.—No tax shall be im11 posed by subsection (a) with respect to any failure

12 if—

13 ‘‘(A) such failure was due to reasonable

14 cause and not to willful neglect, and

15 ‘‘(B) such failure is corrected during the

16 30-day period beginning on the 1st date any of

17 the persons on whom the tax is imposed knew,

18 or exercising reasonable diligence would have

19 known, that such failure existed.

20 ‘‘(3) WAIVER BY SECRETARY.—In the case of a

21 failure which is due to reasonable cause and not to

22 willful neglect, the Secretary may waive part or all

23 of the tax imposed by subsection (a) to the extent

24 that the payment of such tax would be excessive rel25 ative to the failure involved.
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1 ‘‘(d) CARRIER; EMPLOYER HEALTH BENEFIT PLAN

2 DEFINED.—For purposes of this section, the terms ‘car3 rier’ and ‘employer health benefit plan’ have the meanings

4 given such terms in section 403 of the Farm and Rural

5 Medical Equity Reform Act of 1993.’’.

6 (b) NONDEDUCTIBILITY OF TAX.—Paragraph (6) of

7 section 275(a) of such Code (relating to nondeductibility

8 of certain taxes) is amended by inserting ‘‘47,’’ after

9 ‘‘46,’’.

10 (c) CLERICAL AMENDMENTS.—The table of sections

11 for such chapter 47 is amended by adding at the end

12 thereof the following new item:

‘‘Sec. 5000A. Failure to satisfy certain standards for health insurance.’’.

13 (d) EFFECTIVE DATES.—

14 (1) IN GENERAL.—The amendments made by

15 subsections (a) and (c) shall take effect on the date

16 of the enactment of this Act.

17 (2) NONDEDUCTIBILITY OF TAX.—The amend18 ment made by section 503(b) shall apply to taxable

19 years beginning after December 31, 1993.
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1 TITLE V—IMPROVED ACCESS TO

2 RURAL HEALTH SERVICES

3 Subtitle A—Rural Emergency

4 Medical Services Amendments

5 SEC. 501. ESTABLISHMENT OF OFFICE OF EMERGENCY

6 MEDICAL SERVICES.

7 Title XII of the Public Health Service Act (42 U.S.C.

8 300d et seq.) is amended—

9 (1) in the heading for the title, by striking

10 ‘‘TRAUMA CARE’’ and inserting ‘‘EMERGENCY

11 MEDICAL SERVICES’’;

12 (2) in the heading for part A, by striking

13 ‘‘GENERAL’’ and all that follows and inserting

14 ‘‘GENERAL AUTHORITIES AND DUTIES’’; and

15 (3) by amending section 1201 to read as fol16 lows:

17 ‘‘SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY

18 MEDICAL SERVICES.

19 ‘‘(a) IN GENERAL.—The Secretary shall establish an

20 office to be known as the Office of Emergency Medical

21 Services, which shall be headed by a director appointed

22 by the Secretary. The Secretary shall carry out this title

23 acting through the Director of such Office.
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1 ‘‘(b) GENERAL AUTHORITIES AND DUTIES.—With

2 respect to emergency medical services (including trauma

3 care), the Secretary shall—

4 ‘‘(1) conduct and support research, training,

5 evaluations, and demonstration projects;

6 ‘‘(2) foster the development of appropriate,

7 modern systems of such services through the sharing

8 of information among agencies and individuals in9 volved in the study and provision of such services;

10 ‘‘(3) sponsor workshops and conferences;

11 ‘‘(4) as appropriate, disseminate to public and

12 private entities information obtained in carrying out

13 paragraphs (1) through (4);

14 ‘‘(5) provide technical assistance to State and

15 local agencies;

16 ‘‘(6) coordinate activities of the Department of

17 Health and Human Services; and

18 ‘‘(7) as appropriate, coordinate activities of

19 such Department with activities of other Federal

20 agencies.

21 ‘‘(c) CERTAIN REQUIREMENTS.—With respect to

22 emergency medical services (including trauma care), the

23 Secretary shall ensure that activities under subsection (b)

24 are carried out regarding—
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1 ‘‘(1) maintaining an adequate number of health

2 professionals with expertise in the provision of the

3 services, including hospital-based professional and

4 prehospital-based professionals;

5 ‘‘(2) developing, periodically reviewing, and re6 vising as appropriate, in collaboration with appro7 priate public and private entities, guidelines for the

8 provision of such services (including, for various typ9 ical circumstances, guidelines on the number and va10 riety of professionals, on equipment, and on train11 ing);

12 ‘‘(3) the appropriate use of available tech13 nologies, including communications technologies; and

14 ‘‘(4) the unique needs of underserved inner-city

15 areas and underserved rural areas.

16 ‘‘(d) GRANTS, COOPERATIVE AGREEMENTS, AND

17 CONTRACTS.—In carrying out subsections (b) and (c), the

18 Secretary may make grants and enter into cooperative

19 agreements and contracts.

20 ‘‘(e) DEFINITIONS.—For purposes of this part:

21 ‘‘(1) The term ‘hospital-based professional’

22 means a health professional (including an allied

23 health professional) who has expertise in providing

24 one or more emergency medical services and who

25 normally provides the services at a medical facility.
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1 ‘‘(2) The term ‘prehospital-based professional’

2 means a health professional (including an allied

3 health professional) who has expertise in providing

4 one or more emergency medical services and who

5 normally provides the services at the site of the med6 ical emergency or during transport to a medical fa7 cility.’’.

8 SEC. 502. STATE OFFICES OF EMERGENCY MEDICAL SERV9 ICES.

10 (a) TECHNICAL AMENDMENTS TO FACILITATE ES11 TABLISHMENT OF PROGRAM.—

12 (1) IN GENERAL.—Title XII of the Public

13 Health Service Act (42 U.S.C. 300d et seq.) is

14 amended—

15 (A) by redesignating section 1232 as sec16 tion 1235;

17 (B) by redesignating sections 1231 and

18 1233 as sections 1241 and 1242, respectively;

19 and

20 (C) by redesignating sections 1211 through

21 1222 as sections 1221 through 1232, respec22 tively.

23 (2) MODIFICATIONS IN FORMAT OF TITLE

24 XII.—Title XII of the Public Health Service Act, as
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1 amended by paragraph (1) of this subsection, is

2 amended—

3 (A) by striking ‘‘PART B’’ and all that fol4 low through ‘‘STATE PLANS’’ and inserting the

5 following:

6 ‘‘Subpart II—Formula Grants With Respect to

7 Modifications of State Plans’’;

8 (B) by striking ‘‘PART C—GENERAL PRO9 VISIONS’’ and inserting the following:

10 ‘‘Subpart III—General Provisions’’;

11 (C) be redesignating sections 1202 and

12 1203 as sections 1211 and 1212, respectively;

13 and

14 (D) by inserting before section 1211 (as so

15 redesignated) the following:

16 ‘‘PART B—TRAUMA CARE

17 ‘‘Subpart I—Advisory Council; Clearinghouse’’.

18 (b) STATE OFFICES.—Title XII of the Public Health

19 Service Act, as amended by subsection (a) of this section,

20 is amended by inserting after section 1201 the following

21 new section:

22 ‘‘SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL

23 SERVICES.

24 ‘‘(a) PROGRAM OF GRANTS.—The Secretary may

25 make grants to States for the purpose of improving the
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1 availability and quality of emergency medical services

2 through the operation of State offices of emergency medi3 cal services.

4 ‘‘(b) REQUIREMENT OF MATCHING FUNDS.—

5 ‘‘(1) IN GENERAL.—The Secretary may not

6 make a grant under subsection (a) unless the State

7 involved agrees, with respect to the costs to be in8 curred by the State in carrying out the purpose de9 scribed in such subsection, to provide non-Federal

10 contributions toward such costs in an amount that—

11 ‘‘(A) for the first fiscal year of payments

12 under the grant, is not less than $1 for each $3

13 of Federal funds provided in the grant;

14 ‘‘(B) for any second fiscal year of such

15 payments, is not less than $1 for each $1 of

16 Federal funds provided in the grant; and

17 ‘‘(C) for any third fiscal year of such pay18 ments, is not less than $3 for each $1 of Fed19 eral funds provided in the grant.

20 ‘‘(2) DETERMINATION OF AMOUNT OF NON21 FEDERAL CONTRIBUTION.—

22 ‘‘(A) Subject to subparagraph (B), non23 Federal contributions required in paragraph (1)

24 may be in cash or in kind, fairly evaluated, in25 cluding plant, equipment, or services. Amounts
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1 provided by the Federal Government, or serv2 ices assisted or subsidized to any significant ex3 tent by the Federal Government, may not be in4 cluded in determining the amount of such non5 Federal contributions.

6 ‘‘(B) The Secretary may not make a grant

7 under subsection (a) unless the State involved

8 agrees that—

9 ‘‘(i) for the first fiscal year of pay10 ments under the grant, 100 percent or less

11 of the non-Federal contributions required

12 in paragraph (1) will be provided in the

13 form of in-kind contributions;

14 ‘‘(ii) for any second fiscal year of such

15 payments, not more than 50 percent of

16 such non-Federal contributions will be pro17 vided in the form of in-kind contributions;

18 and

19 ‘‘(iii) for any third fiscal year of such

20 payments, such non-Federal contributions

21 will be provided solely in the form of cash.

22 ‘‘(c) CERTAIN REQUIRED ACTIVITIES.—The Sec23 retary may not make a grant under subsection (a) unless

24 the State involved agrees that activities carried out by an

25 office operated pursuant to such subsection will include—
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1 ‘‘(1) coordinating the activities carried out in

2 the State that relate to emergency medical services;

3 ‘‘(2) activities regarding the matters described

4 in paragraphs (1) through (4) section 1201(b);

5 ‘‘(3) identifying Federal and State programs re6 garding emergency medical services and providing

7 technical assistance to public and nonprofit private

8 entities regarding participation in such programs.

9 ‘‘(d) REQUIREMENT REGARDING ANNUAL BUDGET

10 FOR OFFICE.—The Secretary may not make a grant

11 under subsection (a) unless the State involved agrees that,

12 for any fiscal year for which the State receives such a

13 grant, the office operated pursuant to subsection (a) will

14 be provided with an annual budget of not less than

15 $50,000.

16 ‘‘(e) CERTAIN USES OF FUNDS.—

17 ‘‘(1) RESTRICTIONS.—The Secretary may not

18 make a grant under subsection (a) unless the State

19 involved agrees that—

20 ‘‘(A) if research with respect to emergency

21 medical services is conducted pursuant to the

22 grant, not more than 10 percent of the grant

23 will be expended for such research; and
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1 ‘‘(B) the grant will not be expended to pro2 vide emergency medical services (including pro3 viding cash payments regarding such services).

4 ‘‘(2) ESTABLISHMENT OF OFFICE.—Activities

5 for which a State may expend a grant under sub6 section (a) include paying the costs of establishing

7 an office of emergency medical services for purposes

8 of such subsection.

9 ‘‘(f) REPORTS.—The Secretary may not make a

10 grant under subsection (a) unless the State involved

11 agrees to submit to the Secretary reports containing such

12 information as the Secretary may require regarding activi13 ties carried out under this section by the State.

14 ‘‘(g) REQUIREMENT OF APPLICATION.—The Sec15 retary may not make a grant under subsection (a) unless

16 an application for the grant is submitted to the Secretary

17 and the application is in such form, is made in such man18 ner, and contains such agreements, assurances, and infor19 mation as the Secretary determines to be necessary to

20 carry out this section.’’.

21 SEC. 503. PROGRAMS FOR RURAL AREAS.

22 (a) IN GENERAL.—Title XII of the Public Health

23 Service Act, as amended by section 502 of this Act, is

24 amended—

25 (1) by transferring section 1204 to part A;
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1 (2) by redesignating such section as section

2 1203;

3 (3) by inserting such section after section 1202;

4 and

5 (4) in section 1203 (as so redesignated)—

6 (A) by redesignating subsection (c) as sub7 section (d); and

8 (B) by inserting after subsection (b) the

9 following new subsection:

10 ‘‘(c) DEMONSTRATION PROGRAM REGARDING TELE11 COMMUNICATIONS.—

12 ‘‘(1) LINKAGES FOR RURAL FACILITIES.—

13 Projects under subsection (a)(1) shall include dem14 onstration projects to establish telecommunications

15 between rural medical facilities and medical facilities

16 that have expertise or equipment that can be utilized

17 by the rural facilities through the telecommuni18 cations.

19 ‘‘(2) MODES OF COMMUNICATION.—The Sec20 retary shall ensure that the telecommunications

21 technologies demonstrated under paragraph (1) in22 clude (interactive) video telecommunications (static

23 video imaging transmitted through the telephone

24 system), and facsimiles transmitted through such

25 system.’’.
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1 (b) CONFORMING AMENDMENT.—Section 1203 of the

2 Public Health Service Act, as redesignated by subsection

3 (a)(2) of this section, is amended in the heading for the

4 section by striking ‘‘ESTABLISHMENT’’ and all that fol5 lows and inserting ‘‘PROGRAMS FOR RURAL AREAS.’’.

6 SEC. 504. FUNDING.

7 Title XII of the Public Health Service Act, as amend8 ed by the preceding provisions of this subtitle, is amend9 ed—

10 (1) by inserting after subpart III of part B the

11 following:

12 ‘‘PART C—FUNDING’’;

13 (2) by transferring section 1235 to part C (as

14 so added); and

15 (3) in such section, by striking subsections (a)

16 and (b) and inserting the following:

17 ‘‘(a) EMERGENCY MEDICAL SERVICES GEN18 ERALLY.—

19 ‘‘(1) IN GENERAL.—For the purpose of carry20 ing out section 1201 other than with respect to trau21 ma care, there are authorized to be appropriated

22 $2,000,000 for fiscal year 1994, and such sums as

23 may be necessary for each of the fiscal years 1995

24 and 1996.
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1 ‘‘(2) STATE OFFICES.—For the purpose of car2 rying out section 1202, there are authorized to be

3 appropriated $3,000,000 for fiscal year 1994, and

4 such sums as may be necessary for each of the fiscal

5 years 1995 and 1996.

6 ‘‘(3) CERTAIN TELECOMMUNICATIONS DEM7 ONSTRATIONS.—For the purpose of carrying out sec8 tion 1203(c), there are authorized to be appro9 priated $10,000,000 for fiscal year 1994, and such

10 sums as may be necessary for each of the fiscal

11 years 1995 and 1996.

12 ‘‘(b) TRAUMA CARE AND CERTAIN OTHER ACTIVI13 TIES.—

14 ‘‘(1) IN GENERAL.—For the purpose of carry15 ing out part B, section 1201 with respect to trauma

16 care, and section 1203 (other than subsection (c) of

17 such section), there are authorized to be appro18 priated $60,000,000 for fiscal year 1994, and such

19 sums as may be necessary for each of the fiscal

20 years 1995 and 1996.

21 ‘‘(2) ALLOCATION OF FUNDS BY SECRETARY.—

22 ‘‘(A) For the purpose of carrying out sub23 part I of part B, section 1201 with respect to

24 trauma care, and section 1203 (other than sub25 section (c) of such section), the Secretary shall
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1 make available 10 percent of the amounts ap2 propriated for a fiscal year under paragraph

3 (1).

4 ‘‘(B) For the purpose of carrying out sec5 tion 1203 (other than subsection (c) of such

6 section), the Secretary shall make available 10

7 percent of the amounts appropriated for a fiscal

8 year under paragraph (1).

9 ‘‘(C)(i) For the purpose of making allot10 ments under section 1221(a), the Secretary

11 shall, subject to subsection (c), make available

12 80 percent of the amounts appropriated for a

13 fiscal year under paragraph (1).

14 ‘‘(ii) Amounts paid to a State under sec15 tion 1221(a) for a fiscal year shall, for the pur16 poses for which the amounts were paid, remain

17 available for obligation until the end of the fis18 cal year immediately following the fiscal year

19 for which the amounts were paid.’’.

20 SEC. 505. CONFORMING AMENDMENTS.

21 Title XII of the Public Health Service Act, as amend22 ed by the preceding provisions of this subtitle, is amend23 ed—

24 (1) in section 1203(b), by striking ‘‘1214(c)(1)’’

25 and inserting ‘‘1224(c)(1)’’;
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1 (2) in section 1211(b)(3), by striking ‘‘1213(c)’’

2 and inserting ‘‘1223(c)’’;

3 (3) in section 1221—

4 (A) in subsection (a)—

5 (i) by striking ‘‘1218’’ and inserting

6 ‘‘1228’’; and

7 (ii) by striking ‘‘1217’’ and inserting

8 ‘‘1227’’; and

9 (B) in subsection (b)—

10 (i) by striking ‘‘1233’’ and inserting

11 ‘‘1242’’; and

12 (ii) by striking ‘‘1213’’ and inserting

13 ‘‘1223’’;

14 (4) in section 1222—

15 (A) in subsection (a)—

16 (i) in paragraph (1), by striking

17 ‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and

18 (ii) in paragraph (2)(A), by striking

19 ‘‘1211(c)’’ and inserting ‘‘1221(c)’’; and

20 (B) in subsection (b), by striking

21 ‘‘1211(a)’’ and inserting ‘‘1221(a)’’;

22 (5) in section 1223—

23 (A) in subsection (a), by striking

24 ‘‘1211(b)’’ and inserting ‘‘1221(b)’’;

25 (B) in subsection (b)—
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1 (i) in paragraph (1), by striking

2 ‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and

3 (ii) in paragraph (3), by striking

4 ‘‘1211(a)’’ and inserting ‘‘1221(a)’’; and

5 (C) in subsection (d), by striking

6 ‘‘1211(a)’’ and inserting ‘‘1221(a)’’;

7 (6) in section 1224—

8 (A) in each of subsections (a) through (c),

9 by striking ‘‘1211(a)’’ and inserting ‘‘1221(a)’’;

10 and

11 (B) in subsection (b), by striking

12 ‘‘1213(a)(7)’’ and inserting ‘‘1223(a)(7)’’;

13 (7) in section 1225—

14 (A) in subsection (a)—

15 (i) by striking ‘‘1211(a)’’ and insert16 ing ‘‘1221(a)’’; and

17 (ii) by striking ‘‘1233’’ and inserting

18 ‘‘1242’’; and

19 (B) in subsection (b), by striking

20 ‘‘1211(b)’’ and inserting ‘‘1221(b)’’;

21 (8) in section 1226, in each of subsections (a)

22 through (c), by striking ‘‘1211(a)’’ and inserting

23 ‘‘1221(a)’’;

24 (9) in section 1227—
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1 (A) by striking ‘‘1211(a)’’ and inserting

2 ‘‘1221(a)’’; and

3 (B) by striking ‘‘1214’’ and inserting

4 ‘‘1224’’;

5 (10) in section 1228—

6 (A) in each of subsections (a) through (c),

7 by striking ‘‘1211(a)’’ each place such term ap8 pears and inserting ‘‘1221(a)’’;

9 (B) in subsection (b), in each of para10 graphs (2)(A) and (3)(A), by striking

11 ‘‘1232(a)’’ and inserting ‘‘1235(a)’’; and

12 (C) in subsection (c)(2)—

13 (i) by striking ‘‘1232(b)(3)’’ and in14 serting ‘‘1235(b)(3)’’; and

15 (ii) by striking ‘‘1217’’ and inserting

16 ‘‘1227’’;

17 (11) in section 1229(a), by striking ‘‘1211(a)’’

18 each place such term appears and inserting

19 ‘‘1221(a)’’;

20 (12) in section 1230(a), by striking ‘‘1211(a)’’

21 each place such term appears and inserting

22 ‘‘1221(a)’’;

23 (13) in section 1231—
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1 (A) in each of subsections (a) and (b), by

2 striking ‘‘1211(a)’’ each place such term ap3 pears and inserting ‘‘1221(a)’’; and

4 (B) in each of subsections (a) and (b), by

5 striking ‘‘1211(b)’’ and inserting ‘‘1221(b)’’;

6 (14) in section 1232, by striking ‘‘1211’’ and

7 inserting ‘‘1221’’;

8 (15) in section 1241—

9 (A) in the matter preceding paragraph (1),

10 by striking ‘‘this title’’ and inserting ‘‘this

11 part’’; and

12 (B) in paragraph (1), by striking ‘‘1213’’

13 and inserting ‘‘1223’’;

14 (16) in section 1242—

15 (A) in each of subsections (a) and (b), by

16 striking ‘‘1211’’ each place such term appears

17 and inserting ‘‘1221’’;

18 (B) in subsection (b)—

19 (i) by striking ‘‘part B’’ and inserting

20 ‘‘subpart II’’; and

21 (ii) by striking ‘‘1214(c)(1)’’ and in22 serting ‘‘1224(c)(1)’’; and

23 (C) in subsection (c), by striking ‘‘1213’’

24 and inserting ‘‘1223’’; and

25 (17) in section 1251(c)(1)—
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1 (A) by striking ‘‘1211(a)’’ and inserting

2 ‘‘1221(a)’’;

3 (B) by striking ‘‘1218(a)(2)’’ and inserting

4 ‘‘1228(a)(2)’’; and

5 (C) by striking ‘‘part B’’ and inserting

6 ‘‘subpart II’’.

7 Subtitle B—Extension of Special

8 Treatment Rules for Medicare9 Dependent, Small Rural Hos10 pitals

11 SEC. 511. EXTENSION OF SPECIAL TREATMENT RULES FOR

12 MEDICARE-DEPENDENT, SMALL RURAL HOS13 PITALS.

14 (a) IN GENERAL.—

15 (1) DETERMINATION OF PAYMENT AMOUNT.—

16 Section 1886(b)(3)(D) of the Social Security Act (42

17 U.S.C. 1395ww(b)(3)(D)) is amended by striking

18 ‘‘March 31, 1993,’’ and inserting ‘‘March 31,

19 1994,’’.

20 (2) ELIGIBILITY FOR DESIGNATION.—Section

21 1886(d)(5)(G)(i) of such Act (42 U.S.C.

22 1395ww(d)(5)(G)(i)) is amended by striking ‘‘March

23 31, 1993,’’ and inserting ‘‘March 31, 1994,’’.

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

25 subsection (a) shall take effect as if included in the enact-
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1 ment of section 6003(f) of the Omnibus Budget Reconcili2 ation Act of 1989.

3 Subtitle C—Outreach Grants

4 Program

5 SEC. 521. ESTABLISHMENT OF PROGRAM OF GRANTS FOR

6 RURAL HEALTH OUTREACH.

7 Title III of the Public Health Service Act (42 U.S.C.

8 241 et seq.) is amended by adding at the end the following

9 part:

10 ‘‘PART O—RURAL HEALTH OUTREACH PROGRAM.

11 ‘‘SEC. 399J. RURAL HEALTH OUTREACH GRANT PROGRAM.

12 ‘‘(a) IN GENERAL.—The Secretary may make grants

13 to demonstrate new and innovative models of outreach and

14 health care services delivery in rural areas that lack basic

15 health services. Grants will be awarded for one of the fol16 lowing: direct provision of health services to rural popu17 lations (especially for those who are not currently receiving

18 those services), or to enhance access to and utilization of

19 existing available services.

20 ‘‘(b) MISSIONS OF THE OUTREACH PROJECTS.—

21 Projects under subsection (a) should be designed to ad22 dress the needs of a wide range of populations living in

23 rural communities including, but not limited to, the poor,

24 farmers, farm workers, senior citizens, individuals with

25 disabilities, pregnant women, infants, adolescents, and
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1 rural populations with special health care needs. The pro2 gram could include projects to:

3 ‘‘(1) Provide, enhance, or revitalize emergency

4 medical services in rural communities.

5 ‘‘(2) Provide ambulatory health and/or mental

6 health services in health professional shortage areas

7 and in frontier areas.

8 ‘‘(3) Enhance the health and safety of farmers

9 through direct health services for farm families, and

10 migrant and seasonal farm workers.

11 ‘‘(4) Provide direct health services to enhance

12 health care services to senior citizens.

13 ‘‘(5) Provide direct health services that will re14 duce infant mortality in rural communities.

15 ‘‘(c) COMPOSITION OF PROGRAM.—

16 ‘‘(1) CONSORTIUM ARRANGEMENTS.—Participa17 tion in the program established in subsection (a) re18 quires the formation of consortium arrangements

19 among three or more separate and distinct entities

20 to carry out an outreach project.

21 ‘‘(2) CERTAIN REQUIREMENTS.—

22 ‘‘(A) A consortium under paragraph (1)

23 must be composed of three or more existing

24 health care providers or a combination of three

25 or more health care and social service providers.
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1 Consortium members may include such entities

2 as hospitals, public health agencies, home

3 health providers, mental health centers, rural

4 health clinics, social service agencies, health

5 professional schools, educational institutions,

6 emergency medical centers/providers, and com7 munity and migrant health centers.

8 ‘‘(B) All public and private entities, both

9 nonprofit and for-profit may participate as

10 members of a consortium arrangement under

11 paragraph (1).

12 ‘‘(C) A grant under subsection (a) will be

13 made to only one entity in a consortium under

14 paragraph (1). The grant recipient must be a

15 nonprofit or public entity which meets one of

16 the following requirements:

17 ‘‘(i) The applicant must be located

18 outside of a Metropolitan Statistical Area

19 as defined by the Federal Government.

20 ‘‘(ii) The applicant must be located in

21 a rural census tract.

22 ‘‘(d) REVIEW CRITERIA.—An outreach application

23 under this section shall be evaluated based on the follow24 ing criteria:
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1 ‘‘(1) The extent to which the applicant has pro2 posed a new and innovative approach to health care

3 in the rural area. Services shall be directed to popu4 lation groups that are unserved or underserved.

5 ‘‘(2) The extent to which the applicant has jus6 tified and documented the needs for the project and

7 developed measurable goals for meeting the needs.

8 ‘‘(3) The extent to which the applicant has

9 clearly defined the roles and responsibilities for each

10 member of the consortium and developed a workable

11 plan for managing the consortium’s activities.

12 ‘‘(4) The level of local commitment and involve13 ment with the project, including the extent of cost

14 participation by the applicant and/or other organiza15 tions.

16 ‘‘(5) The feasibility of the project to continue

17 after Federal grant support is completed.

18 ‘‘(6) The extent of the evaluation component.

19 ‘‘(e) HOW PROJECT FUNDS ARE TO BE EX20 PENDED.—

21 ‘‘(1) Grantees under subsection (a) will be re22 quired to use at least 85 percent of the total amount

23 awarded for outreach and care services.

24 ‘‘(2) 60 percent of funds must be spent in rural

25 areas.
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1 ‘‘(3) Grant funds may not be used for purchase,

2 construction, or renovation of real property or to

3 support the delivery of inpatient services.

4 ‘‘(4) Grant funds may be used for equipment

5 and vehicles when such equipment is essential to

6 carrying out the outreach project.

7 ‘‘(5) Individual grant awards will be limited to

8 a total amount of $300,000 per year for not to ex9 ceed 3 years.

10 ‘‘(6) Applicants must demonstrate that existing

11 levels of institutional and other support are not re12 duced or supplanted by the availability of these

13 grant funds.

14 ‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—For the

15 purpose of carrying out this section, there are authorized

16 to be appropriated $25,000,000 for fiscal year 1994, and

17 such sums as may be necessary for each fiscal year there18 after.’’.

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