I
103D CONGRESS
1ST SESSION
H. R. 2529
To amend the Public Health Service Act to provide grants to entities in
rural areas that design and implement innovative approaches to improve
the availability and quality of health care in such rural areas, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 24, 1993
Mr. SMITH of Oregon introduced the following bill; which was referred to the
Committee on Energy and Commerce
A BILL
To amend the Public Health Service Act to provide grants
to entities in rural areas that design and implement
innovative approaches to improve the availability and
quality of health care in such rural areas, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Rural Health Innova-
tion Demonstration Act of 1993’’.
SEC. 2. RURAL HEALTH EXTENSION NETWORKS.
Title XVII of the Public Health Service Act (42
U.S.C. 300u et seq.) is amended by adding at the end
thereof the following new section:
‘‘SEC. 1709. RURAL HEALTH EXTENSION NETWORKS.
‘‘(a) GRANTS.—The Secretary, acting through the
Health Resources and Services Administration, may
award competitive grants to eligible entities to enable such
entities to facilitate the development of networks among
rural and urban health care providers to preserve and
share health care resources and enhance the quality and
availability of health care in rural areas. Such networks
may be statewide or regionalized in focus.
‘‘(b) ELIGIBLE ENTITIES.—To be eligible to receive
a grant under subsection (a) an entity shall—
‘‘(1)(A) be a rural health extension network
that meets the requirements of subsection (c); or
‘‘(B) be an Area Health Education Center
Program;
‘‘(2) prepare and submit to the Secretary an
application at such time, in such form and contain-
ing such information as the Secretary may require;
and
‘‘(3) meets such other requirements as the Sec-
retary determines appropriate.
‘‘(c) NETWORKS.—For purposes of subsection (b)(1),
a rural health extension network shall be an association
or consortium of three or more rural health care providers,
and may include one or more urban health care provider,
for the purposes of applying for a grant under this section
and using amounts received under such grant to provide
the services described in subsection (d).
‘‘(d) SERVICES.—
‘‘(1) IN GENERAL.—An entity that receives a
grant under subsection (a) shall use amounts re-
ceived under such grant to—
‘‘(A) provide education and community de-
cisionmaking support for health care providers
in the rural areas served by the network;
‘‘(B) utilize existing health care provider
education programs, including but not limited
to, the program for area health education cen-
ters under section 781, to provide educational
services to health care providers and trainees
including, but not limited to, physicians, nurses
and nursing students in the areas served by the
network;
‘‘(C) 
make 
appropriately 
trained
facilitators available to health care providers lo-
cated in the areas served by the network to as-
sist such providers in developing cooperative ap-
proaches to health care in such area;
‘‘(D) facilitate linkage building through the
organization of discussion and planning groups
and the dissemination of information concern-
ing the health care resources where available,
within the area served by the network;
‘‘(E) support telecommunications and con-
sultative projects to link rural hospitals and
other health care providers, and urban or ter-
tiary hospitals in the areas served by the net-
work; or
‘‘(F) carry out any other activity deter-
mined appropriate by the Secretary.
‘‘(2) EDUCATION.—In carrying out activities
under paragraph (1)(B), an entity shall support the
development of an information and resource sharing
system, including elements targeted towards high
risk populations and focusing on health promotion,
to facilitate the ability of rural health care providers
to have access to needed health care information.
Such activities may include the provision of training
to enable individuals to serve as coordinators of
health education programs in rural areas.
‘‘(3) COLLECTION
AND
DISSEMINATION
OF
DATA.—The chief executive officer of a State shall
designate a State agency that shall be responsible
for collecting and regularly disseminating informa-
tion concerning the activities of the rural health ex-
tension networks in that State.
‘‘(e) MATCHING REQUIREMENT.—An entity that re-
ceives a grant under subsection (a) shall make available
(directly or through donations from public or private enti-
ties), non-Federal contributions towards the costs of the
operations of the network in an amount equal to the
amount of the grant.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$10,000,000 for each of the fiscal years 1994 through
1997.
‘‘(g) DEFINITION.—As used in this section and sec-
tion 1710, the term ‘rural health care providers’ means
health care professionals and hospitals located in rural
areas. The Secretary shall ensure that for purposes of this
definition, rural areas shall include any area that meets
any applicable Federal or State definition of rural area.
‘‘(h) RELATION TO OTHER LAWS.—
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of the antitrust laws, it shall not be considered
‘‘(E) any State antitrust laws that would
prohibit the activities described in paragraph
(1).’’.
SEC. 3. RURAL MANAGED CARE COOPERATIVES.
Title XVII of the Public Health Service Act (42
U.S.C. 300u et seq.) as amended by section 2 is further
amended by adding at the end thereof the following new
section:
‘‘SEC. 1710. RURAL MANAGED CARE COOPERATIVES.
‘‘(a) GRANTS.—The Secretary, acting through the
Health Resources and Services Administration, may
award competitive grants to eligible entities to enable such
entities to develop and administer cooperatives in rural
areas that will establish an effective case management and
reimbursement system designed to support the economic
viability of essential public or private health services, fa-
cilities, health care systems and health care resources in
such rural areas.
‘‘(b) ELIGIBLE ENTITIES.—To be eligible to receive
a grant under subsection (a) an entity shall—
‘‘(1) prepare and submit to the Secretary an
application at such time, in such form and contain-
ing such information as the Secretary may require,
including a description of the cooperative that the
entity intends to develop and operate using grant
funds; and
‘‘(2) meet such other requirements as the Sec-
retary determines appropriate.
‘‘(c) COOPERATIVES.—
‘‘(1) IN GENERAL.—Amounts provided under a
grant awarded under subsection (a) shall be used to
establish and operate a cooperative made up of all
types of health care providers, hospitals, primary ac-
cess hospitals, other alternate rural health care fa-
cilities, physicians, rural health clinics, rural nurse
practitioners and physician assistant practitioners,
public health departments and others located in, but
not restricted to, the rural areas to be served by the
cooperative.
‘‘(2) BOARD OF DIRECTORS.—A cooperative es-
tablished under paragraph (1) shall be administered
by a board of directors elected by the members of
the cooperative, a majority of whom shall represent
rural providers from the local community and in-
clude representatives from the local community.
Such members shall serve at the pleasure of such
members.
‘‘(3) EXECUTIVE DIRECTOR.—The members of
a cooperative established under paragraph (1) shall
elect an executive director who shall serve as the
chief operating officer of the cooperative. The execu-
tive director shall be responsible for conducting the
day the day operation of the cooperative including—
‘‘(A) maintaining an accounting system for
the cooperative;
‘‘(B) maintaining the business records of
the cooperative;
‘‘(C) negotiating contracts with provider
members of the cooperative; and
‘‘(D) coordinating the membership and
programs of the cooperative.
‘‘(4) REIMBURSEMENTS.—
‘‘(A) NEGOTIATIONS.—A cooperative es-
tablished under paragraph (1) shall facilitate
negotiations among member health care provid-
ers and third party payors concerning the rates
at which such providers will be reimbursed for
services provided to individuals for which such
payors may be liable.
‘‘(B) AGREEMENTS.—Agreements reached
under subparagraph (A) shall be binding on the
members of the cooperative.
‘‘(C) EMPLOYERS.—Employer entities may
become members of a cooperative established
under paragraph (a) in order to provide,
through a member third party payor, health in-
surance coverage for its employees. Deductibles
shall only be charged to employees covered
under such insurance if such employees receive
health care services from a provider that is not
a member of the cooperative if similar services
would have been available from a member
provider.
‘‘(D) MALPRACTICE INSURANCE.—A coop-
erative established under subsection (a) shall be
responsible for identifying and implementing an
affordable malpractice insurance program that
shall include a requirement that such coopera-
tive assume responsibility for the payment of a
portion of the malpractice insurance premium
of providers members.
‘‘(5) MANAGED
CARE
AND
PRACTICE
STAND-
ARDS.—A cooperative established under paragraph
(1) shall establish joint case management and pa-
tient care practice standards programs that health
care providers that are members of such cooperative
must meet to be eligible to participate in agreements
entered into under paragraph (4). Such standards
shall be developed by such provider members and
shall be subject to the approval of a majority of the
board of directors. Such programs shall include cost
and quality of care guidelines including a require-
ment 
that 
such 
providers 
make 
available
preadmission screening, selective case management
services, joint patient care practice standards devel-
opment and compliance and joint utilization review.
‘‘(6) CONFIDENTIALITY.—
‘‘(A) 
IN
GENERAL.—Patients 
records,
records of peer review, utilization review, and
quality assurance proceedings conducted by the
cooperative should be considered confidential
and protected from release outside of the coop-
erative. The provider members of the coopera-
tive shall be indemnified by the cooperative for
the good faith participation by such members in
such the required activities.
‘‘(B) QUALITY
DATA.—Notwithstanding
any other provision of law, quality data ob-
tained by a hospital or other member of a coop-
erative in the normal course of the operations
of the hospital or member shall be immune
from discovery regardless of whether such data
is used for purposes other than peer review or
is disclosed to other members of the cooperative
involved.
‘‘(d) LINKAGES.—A cooperative shall create linkages
among member health care providers, employers, and
payors for the joint consultation and formulation of the
types, rates, costs, and quality of health care provided in
rural areas served by the cooperative.
‘‘(e) MATCHING REQUIREMENT.—An entity that re-
ceives a grant under subsection (a) shall make available
(directly or through donations from public or private enti-
ties), non-Federal contributions towards the costs of the
operations of the network in an amount equal to the
amount of the grant.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$15,000,000 for each of the fiscal years 1994 through
1997.
‘‘(g) RELATION TO OTHER LAWS.—
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of the antitrust laws, it shall not be considered
a violation of the antitrust laws for entities to de-
velop and operate cooperatives in accordance with
this section.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘antitrust laws’ means—
‘‘(A) the Act entitled ‘An Act to protect
trade and commerce against unlawful restraints
and monopolies’, approved July 2, 1890, com-
monly known as the ‘Sherman Act’ (26 Stat.
209; chapter 647; 15 U.S.C. 1 et seq.);
‘‘(B) the Federal Trade Commission Act,
approved September 26, 1914 (38 Stat. 717;
chapter 311; 15 U.S.C. 41 et seq.);
‘‘(C) the Act entitled ‘An Act to supple-
ment existing laws against unlawful restraints
and monopolies, and for other purposes’, ap-
proved October 15, 1914, commonly known as
the ‘Clayton Act’ (38 Stat. 730; chapter 323;
15 U.S.C. 12 et seq.; 18 U.S.C. 402, 660,
3285, 3691; 29 U.S.C. 52, 53);
‘‘(D) the Act of June 19, 1936, commonly
known as the Robinson-Patman Antidiscrimina-
tion Act (15 U.S.C. 13 et seq.); and
‘‘(E) any State antitrust laws that would
prohibit the activities described in paragraph
(1).’’.
SEC. 4. RURAL MENTAL HEALTH OUTREACH GRANTS.
Subpart 3 of part B of title V of the Public Health
Service Act (42 U.S.C. 290cc–11 et seq.) is amended by
adding at the end thereof the following new section:
‘‘SEC. 520C. RURAL MENTAL HEALTH OUTREACH GRANTS.
‘‘(a) IN GENERAL.—The Secretary may award com-
petitive grants to eligible entities to enable such entities
to develop and implement a plan for mental health out-
reach programs in rural areas.
‘‘(b) ELIGIBLE ENTITIES.—To be eligible to receive
a grant under subsection (a) an entity shall—
‘‘(1) prepare and submit to the Secretary an
application at such time, in such form and contain-
ing such information as the Secretary may require,
including a description of the activities that the en-
tity intends to undertake using grant funds; and
‘‘(2) meet such other requirements as the Sec-
retary determines appropriate.
‘‘(c) PRIORITY.—In awarding grants under sub-
section (a), the Secretary shall give priority to applications
that place emphasis on mental health services for the el-
derly or children. Priority shall also be given to applica-
tions that involve relationships between the applicant and
rural managed care cooperatives.
‘‘(d) MATCHING REQUIREMENT.—An entity that re-
ceives a grant under subsection (a) shall make available
(directly or through donations from public or private enti-
ties), non-Federal contributions toward the costs of the
operations of the network in an amount equal to the
amount of the grant.
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$5,000,000 for each of the fiscal years 1994 through
1997.’’.
SEC. 5. AREA HEALTH EDUCATION CENTERS.
(a) Section 746(a) of the Public Health Service Act
(42 U.S.C. 293j(a)) is amended by adding at the end
thereof the following new paragraph:
‘‘(4) STIPENDS.—
‘‘(A) The Secretary make award grants
under this section to rural communities to en-
able such communities to provide stipends to
physicians, nurses, nurse practitioners, physi-
cian assistants, and other health professional
trainees to encourage such individuals to pro-
vide health care services in such rural commu-
nities. In addition, the Secretary may award
grants under this section to rural communities
to enable such communities to provide stipends
to physicians, nurses, nurse practitioners, physi-
cian assistants, and other health professionals
that are practicing in rural areas to retain such
individuals in such areas.
‘‘(B) A community that receives a grant
under subparagraph (A) shall make available
(directly or through donations from public or
private entities), non-Federal contributions to-
ward the costs of the operations of the network
in an amount equal to the amount of the
grant.’’.
(b) REAUTHORIZATION.—Section 746(i)(1)(A) of
such Act (42 U.S.C. 293j(i)(1)(A)) is amended by striking
out ‘‘$25,000,000’’ and all that follows through ‘‘1995’’
and inserting in lieu thereof ‘‘$25,000,000 for fiscal year
1993, and $42,000,000 for each of the fiscal years 1994
through 1997’’.
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