I 
110TH CONGRESS 
2D SESSION 
H. R. 6912 
To amend title XVIII of the Social Security Act to provide for temporary 
improvements to the Medicare inpatient hospital payment adjustment 
for low-volume hospitals and to provide for the use of the non-wage 
adjusted PPS rate under the Medicare-dependent hospital (MDH) pro-
gram, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 16, 2008 
Mr. BOSWELL (for himself, Mr. LOEBSACK, Mrs. BOYDA of Kansas, Mr. 
SKELTON, Mrs. EMERSON, and Mr. BERRY) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Energy and Commerce, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for temporary improvements to the Medicare inpatient 
hospital payment adjustment for low-volume hospitals 
and to provide for the use of the non-wage adjusted 
PPS rate under the Medicare-dependent hospital (MDH) 
program, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Rural Hospital Assist-
ance Act of 2008’’. 
SEC. 2. TEMPORARY IMPROVEMENTS TO THE MEDICARE 
INPATIENT 
HOSPITAL 
PAYMENT 
ADJUST-
MENT FOR LOW-VOLUME HOSPITALS. 
(a) IN GENERAL.—Section 1886(d)(12) of the Social 
Security Act (42 U.S.C. 1395ww(d)(12)) is amended— 
(1) in subparagraph (A), by inserting ‘‘or (D) 
(for discharges occurring in fiscal year 2009)’’ after 
‘‘subparagraph (B)’’; 
(2) in subparagraph (B), by striking ‘‘The Sec-
retary’’ and inserting ‘‘Except as provided in sub-
paragraph (D), the Secretary’’; 
(3) in subparagraph (C)(i)— 
(A) by inserting ‘‘(or, with respect to fiscal 
year 2009, 15 road miles)’’ after ‘‘25 road 
miles’’; and 
(B) by inserting ‘‘(or, with respect to fiscal 
year 2009, 1,500 discharges of individuals enti-
tled to, or enrolled for, benefits under part A)’’ 
after ‘‘800 discharges’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(D) TEMPORARY APPLICABLE PERCENT-
AGE
INCREASE.—For discharges occurring in 
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fiscal year 2009, the Secretary shall determine 
an applicable percentage increase for purposes 
of subparagraph (A) using a continuous linear 
sliding scale ranging from 25 percent for low- 
volume hospitals with 200 or fewer discharges 
of individuals entitled to, or enrolled for, bene-
fits under part A in the fiscal year to 0 percent 
for low-volume hospitals with greater than 
1,500 discharges of such individuals in the fis-
cal year.’’. 
(b) IMPLEMENTATION.—Notwithstanding any other 
provision of law, the Secretary of Health and Human 
Services may implement the amendments made by sub-
section (a) by program instruction or otherwise. 
SEC. 3. USE OF NON-WAGE ADJUSTED PPS RATE UNDER 
THE 
MEDICARE-DEPENDENT 
HOSPITAL 
(MDH) PROGRAM. 
(a) IN GENERAL.—Section 1886(d)(5)(G) of the So-
cial Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amend-
ed by adding at the end the following new clause: 
‘‘(v) In the case of discharges occurring on or after 
October 1, 2008, and before October 1, 2009, in deter-
mining the amount under paragraph (1)(A)(iii) for pur-
poses of clauses (i) and (ii)(II), such amount shall, if it 
results in greater payments to the hospital, be determined 
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without regard to any adjustment for different area wage 
levels under paragraph (3)(E).’’. 
(b) IMPLEMENTATION.—Notwithstanding any other 
provision of law, the Secretary of Health and Human 
Services may implement the amendment made by sub-
section (a) by program instruction or otherwise. 
SEC. 4. LIMITATION ON MEDICARE EXCEPTION TO THE 
PROHIBITION ON CERTAIN PHYSICIAN RE-
FERRALS FOR HOSPITALS. 
(a) IN GENERAL.—Section 1877 of the Social Secu-
rity Act (42 U.S.C. 1395nn) is amended— 
(1) in subsection (d)(2)— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) in the case where the entity is a hos-
pital, the hospital meets the requirements of 
paragraph (3)(D).’’; 
(2) in subsection (d)(3)— 
(A) in subparagraph (B), by striking 
‘‘and’’ at the end; 
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(B) in subparagraph (C), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) the hospital meets the requirements 
described in subsection (i)(1) not later than 18 
months after the date of the enactment of this 
subparagraph.’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(i) REQUIREMENTS FOR HOSPITALS TO QUALIFY 
FOR HOSPITAL EXCEPTION TO OWNERSHIP OR INVEST-
MENT PROHIBITION.— 
‘‘(1) REQUIREMENTS
DESCRIBED.—For pur-
poses of subsection (d)(3)(D), the requirements de-
scribed in this paragraph for a hospital are as fol-
lows: 
‘‘(A) PROVIDER
AGREEMENT.—The hos-
pital had— 
‘‘(i) physician ownership on Sep-
tember 1, 2008; and 
‘‘(ii) a provider agreement under sec-
tion 1866 in effect on such date. 
‘‘(B) LIMITATION ON EXPANSION OF FA-
CILITY CAPACITY.—Except as provided in para-
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graph (3), the number of operating rooms, pro-
cedure rooms, and beds of the hospital at any 
time on or after the date of the enactment of 
this subsection are no greater than the number 
of operating rooms, procedure rooms, and beds 
as of such date. 
‘‘(C) PREVENTING CONFLICTS OF INTER-
EST.— 
‘‘(i) The hospital submits to the Sec-
retary an annual report containing a de-
tailed description of— 
‘‘(I) the identity of each physi-
cian owner and any other owners of 
the hospital; and 
‘‘(II) the nature and extent of all 
ownership interests in the hospital. 
‘‘(ii) The hospital has procedures in 
place to require that any referring physi-
cian owner discloses to the patient being 
referred, by a time that permits the pa-
tient to make a meaningful decision re-
garding the receipt of care, as determined 
by the Secretary— 
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‘‘(I) the ownership interest of 
such referring physician in the hos-
pital; and 
‘‘(II) if applicable, any such own-
ership interest of the treating physi-
cian. 
‘‘(iii) The hospital does not condition 
any physician ownership interests either di-
rectly or indirectly on the physician owner 
making or influencing referrals to the hos-
pital or otherwise generating business for 
the hospital. 
‘‘(iv) The hospital discloses the fact 
that the hospital is partially owned by phy-
sicians— 
‘‘(I) on any public website for the 
hospital; and 
‘‘(II) in any public advertising 
for the hospital. 
‘‘(D) ENSURING
BONA
FIDE
INVEST-
MENT.— 
‘‘(i) Physician owners in the aggregate 
do not own more than the greater of— 
‘‘(I) 40 percent of the total value 
of the investment interests held in the 
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hospital or in an entity whose assets 
include the hospital; or 
‘‘(II) the percentage of such total 
value determined on the date of enact-
ment of this subsection. 
‘‘(ii) Any ownership or investment in-
terests that the hospital offers to a physi-
cian owner are not offered on more favor-
able terms than the terms offered to a per-
son who is not a physician owner. 
‘‘(iii) The hospital (or any investors in 
the hospital) does not directly or indirectly 
provide loans or financing for any physi-
cian owner investments in the hospital. 
‘‘(iv) The hospital (or any investors in 
the hospital) does not directly or indirectly 
guarantee a loan, make a payment toward 
a loan, or otherwise subsidize a loan, for 
any individual physician owner or group of 
physician owners that is related to acquir-
ing any ownership interest in the hospital. 
‘‘(v) Investment returns are distrib-
uted to each investor in the hospital in an 
amount that is directly proportional to the 
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ownership interest of such investor in the 
hospital. 
‘‘(vi) Physician owners do not receive, 
directly or indirectly, any guaranteed re-
ceipt of or right to purchase other business 
interests related to the hospital, including 
the purchase or lease of any property 
under the control of other investors in the 
hospital or located near the premises of the 
hospital. 
‘‘(vii) The hospital does not offer a 
physician owner the opportunity to pur-
chase or lease any property under the con-
trol of the hospital or any other investor in 
the hospital on more favorable terms than 
the terms offered to an individual who is 
not a physician owner. 
‘‘(E) PATIENT SAFETY.— 
‘‘(i) Insofar as the hospital admits a 
patient and does not have any physician 
available on the premises to provide serv-
ices during all hours in which the hospital 
is providing services to such patient, before 
admitting the patient— 
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‘‘(I) the hospital discloses such 
fact to a patient; and 
‘‘(II) following such disclosure, 
the hospital receives from the patient 
a signed acknowledgment that the pa-
tient understands such fact. 
‘‘(ii) The hospital has the capacity 
to— 
‘‘(I) provide assessment and ini-
tial treatment for patients; and 
‘‘(II) refer and transfer patients 
to hospitals with the capability to 
treat the needs of the patient in-
volved. 
‘‘(F) LIMITATION
ON
APPLICATION
TO 
CERTAIN
CONVERTED
FACILITIES.—The hos-
pital was not converted from an ambulatory 
surgical center to a hospital on or after the date 
of enactment of this subsection. 
‘‘(2) 
PUBLICATION
OF
INFORMATION
RE-
PORTED.—The Secretary shall publish, and update 
on an annual basis, the information submitted by 
hospitals under paragraph (1)(C)(i) on the public 
Internet website of the Centers for Medicare & Med-
icaid Services. 
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‘‘(3) EXCEPTION TO PROHIBITION ON EXPAN-
SION OF FACILITY CAPACITY.— 
‘‘(A) PROCESS.— 
‘‘(i) ESTABLISHMENT.—The Secretary 
shall establish and implement a process 
under which an applicable hospital (as de-
fined in subparagraph (E)) may apply for 
an exception from the requirement under 
paragraph (1)(B). 
‘‘(ii) OPPORTUNITY FOR COMMUNITY 
INPUT.—The process under clause (i) shall 
provide individuals and entities in the com-
munity that the applicable hospital apply-
ing for an exception is located with the op-
portunity to provide input with respect to 
the application. 
‘‘(iii) 
TIMING
FOR
IMPLEMENTA-
TION.—The Secretary shall implement the 
process under clause (i) on November 1, 
2009. 
‘‘(iv) REGULATIONS.—Not later than 
November 1, 2009, the Secretary shall pro-
mulgate regulations to carry out the proc-
ess under clause (i). 
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‘‘(B) FREQUENCY.—The process described 
in subparagraph (A) shall permit an applicable 
hospital to apply for an exception up to once 
every 2 years. 
‘‘(C) PERMITTED INCREASE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii) and subparagraph (D), an applicable 
hospital granted an exception under the 
process described in subparagraph (A) may 
increase the number of operating rooms, 
procedure rooms, and beds of the applica-
ble hospital above the baseline number of 
operating rooms, procedure rooms, and 
beds of the applicable hospital (or, if the 
applicable hospital has been granted a pre-
vious exception under this paragraph, 
above the number of operating rooms, pro-
cedure rooms, and beds of the hospital 
after the application of the most recent in-
crease under such an exception). 
‘‘(ii) LIFETIME
100
PERCENT
IN-
CREASE LIMITATION.—The Secretary shall 
not permit an increase in the number of 
operating rooms, procedure rooms, and 
beds of an applicable hospital under clause 
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(i) to the extent such increase would result 
in the number of operating rooms, proce-
dure rooms, and beds of the applicable 
hospital exceeding 200 percent of the base-
line number of operating rooms, procedure 
rooms, and beds of the applicable hospital. 
‘‘(iii) BASELINE
NUMBER
OF
OPER-
ATING
ROOMS, PROCEDURE
ROOMS, AND 
BEDS.—In this paragraph, the term ‘base-
line number of operating rooms, procedure 
rooms, and beds’ means the number of op-
erating rooms, procedure rooms, and beds 
of the applicable hospital as of the date of 
enactment of this subsection. 
‘‘(D) INCREASE
LIMITED
TO
FACILITIES 
ON THE MAIN CAMPUS OF THE HOSPITAL.— 
Any increase in the number of operating rooms, 
procedure rooms, and beds of an applicable hos-
pital pursuant to this paragraph may only occur 
in facilities on the main campus of the applica-
ble hospital. 
‘‘(E) APPLICABLE
HOSPITAL.—In this 
paragraph, the term ‘applicable hospital’ means 
a hospital— 
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‘‘(v) that has an average bed occu-
pancy rate that is greater than the average 
bed occupancy rate in the State in which 
the hospital is located. 
‘‘(F) PROCEDURE
ROOMS.—In this sub-
section, the term ‘procedure rooms’ includes 
rooms in which catheterizations, angiographies, 
angiograms, and endoscopies are performed, ex-
cept such term shall not include emergency 
rooms or departments (exclusive of rooms in 
which 
catheterizations, 
angiographies, 
angiograms, and endoscopies are performed). 
‘‘(G) 
PUBLICATION
OF
FINAL
DECI-
SIONS.—Not later than 60 days after receiving 
a complete application under this paragraph, 
the Secretary shall publish in the Federal Reg-
ister the final decision with respect to such ap-
plication. 
‘‘(H) LIMITATION
ON
REVIEW.—There 
shall be no administrative or judicial review 
under section 1869, section 1878, or otherwise 
of the process under this paragraph (including 
the establishment of such process). 
‘‘(4) COLLECTION OF OWNERSHIP AND INVEST-
MENT
INFORMATION.—For purposes of subpara-
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graphs (A)(i) and (D)(i) of paragraph (1), the Sec-
retary shall collect physician ownership and invest-
ment information for each hospital. 
‘‘(5) PHYSICIAN OWNER DEFINED.—For pur-
poses of this subsection, the term ‘physician owner’ 
means a physician (or an immediate family member 
of such physician) with a direct or an indirect own-
ership interest in the hospital.’’. 
(b) ENFORCEMENT.— 
(1) ENSURING COMPLIANCE.—The Secretary of 
Health and Human Services shall establish policies 
and procedures to ensure compliance with the re-
quirements described in subsection (i)(1) of section 
1877 of the Social Security Act, as added by sub-
section (a)(3), beginning on the date such require-
ments first apply. Such policies and procedures may 
include unannounced site reviews of hospitals. 
(2) AUDITS.—Beginning not later than January 
1, 2010, the Secretary of Health and Human Serv-
ices shall conduct audits to determine if hospitals 
violate the requirements referred to in paragraph 
(1). 
Æ 
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