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103D CONGRESS
1ST SESSION
H. R. 286
To amend the Public Health Service Act to facilitate the entering into of
cooperative agreements between hospitals for the purpose of enabling
such hospitals to share expensive medical or high technology equipment
or services, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mrs. MORELLA introduced the following bill; which was referred to the
Committee on Energy and Commerce
A BILL
To amend the Public Health Service Act to facilitate the
entering into of cooperative agreements between hospitals
for the purpose of enabling such hospitals to share ex-
pensive medical or high technology equipment or services,
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 ‘‘Hospital Cooperative
Agreement Act’’.
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SEC. 2. PURPOSE.
It is the purpose of this Act to encourage cooperation
between hospitals in order to contain costs and achieve
a more efficient health care delivery system through the
elimination of unnecessary duplication and proliferation of
expensive medical or high technology services or equip-
ment.
SEC. 3. HOSPITAL TECHNOLOGY AND SERVICES SHARING
DEMONSTRATION PROGRAM.
Part D of title VI of the Public Health Service Act
(42 U.S.C. 291k et seq.) is amended by adding at the end
thereof the following new section:
‘‘SEC. 647. HOSPITAL TECHNOLOGY AND SERVICES SHAR-
ING DEMONSTRATION PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary shall estab-
lish a demonstration program under which the Secretary
shall in fiscal year 1994 award ten 5-year grants to eligi-
ble applicants to facilitate collaboration among two or
more hospitals with respect to the provision of expensive,
capital-intensive medical technology or other highly re-
source-intensive services. Such program shall be designed
to demonstrate the extent to which such agreements result
in a reduction in costs, an increase in access to care, and
improvements in the quality of care with respect to the
hospitals involved.
‘‘(b) ELIGIBLE APPLICANTS.—
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‘‘(1) IN GENERAL.—To be eligible to receive a
grant under subsection (a), an entity (or entities)
shall be a licensed hospital (or hospitals) and shall
prepare and submit to the Secretary an application
at such time, in such manner, and containing such
information as the Secretary may require, includ-
ing—
‘‘(A) a statement that such hospital (or
hospitals) desires to negotiate and enter into a
voluntary cooperative agreement under which
such hospital (or hospitals) is operating in one
State or region for the sharing of medical tech-
nology or services;
‘‘(B) a description of the nature and scope
of the activities contemplated under the cooper-
ative agreement;
‘‘(C) a description of the financial arrange-
ment between the hospitals that are parties to
the agreement; and
‘‘(D) any other information determined ap-
propriate by the Secretary.
‘‘(2) DEVELOPMENT
OF
EVALUATION
GUIDE-
LINES.—Not later than 90 days after the date of en-
actment of this section, the Administrator for
Health Care Policy and Research shall develop eval-
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uation guidelines with respect to applications sub-
mitted under paragraph (1).
‘‘(3) EVALUATIONS
OF
APPLICATIONS.—The
Secretary, in consultation with the Administrator for
Health Care Policy and Research, shall evaluate ap-
plications submitted under paragraph (1). In deter-
mining which applications to approve for purposes of
awarding grants under subsection (a), the Secretary
shall consider whether the cooperative agreement de-
scribed in each such application meets guidelines de-
veloped under paragraph (2) and is likely to result
in—
‘‘(A) the enhancement of the quality of
hospital or hospital-related care;
‘‘(B) the preservation of hospital services
in geographical proximity to the communities
traditionally served by the applicant hospital (or
hospitals);
‘‘(C) improvements in the cost-effectiveness
of high-technology services by the hospitals in-
volved;
‘‘(D) improvements in the efficient utiliza-
tion of hospital resources and capital equip-
ment;
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‘‘(E) the provision of services that would
not otherwise be available; or
‘‘(F) the avoidance of duplication of hos-
pital resources.
‘‘(c) ALLOCATION OF GRANT FUNDS.—
‘‘(1) IN GENERAL.—Amounts provided under a
grant awarded under subsection (a) shall be used
only to facilitate collaboration among hospitals and
may not be used to purchase facilities or capital
equipment. Such permissible uses may include reim-
bursements for the expenses associated with special-
ized personnel, administrative services, support serv-
ices, and instructional programs.
‘‘(2) GRANT
AWARD
AMOUNT.—Hospitals ap-
plying for grants under subsection (a) shall specify
the desired grant award amount. The Secretary shall
determine the appropriate amount in granting such
awards.
‘‘(3) CARE IN RURAL AREAS.—
‘‘(A) IN GENERAL.—Not less than three of
the grants awarded under subsection (a) shall
be used to demonstrate the manner in which co-
operative agreements of the type described in
such subsection may be used to increase access
to or quality of care in rural areas.
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‘‘(B) DEFINITION.—As used in subpara-
graph (A), the term ‘rural areas’ means those
areas located outside of metropolitan statistical
areas.
‘‘(d) MEDICAL TECHNOLOGY AND SERVICES.—
‘‘(1) IN GENERAL.—Cooperative agreements fa-
cilitated under this section shall provide for the
sharing of medical technology or eligible services
among the hospitals which are parties to such agree-
ments.
‘‘(2) MEDICAL TECHNOLOGY.—For purposes of
this section, the term ‘medical technology’ includes
the drugs, devices, equipment and medical and sur-
gical procedures utilized in medical care, and the or-
ganizational and support systems within which such
care is provided, that—
‘‘(A) have high capital costs or extremely
high annual operating costs; and
‘‘(B) are technologies with respect to which
there is a reasonable expectation that shared
ownership will avoid a significant degree of the
potential excess capacity of such service in the
community or region to be served under such
agreement.
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‘‘(3) ELIGIBLE
SERVICES.—With respect to
services that may be shared under an agreement en-
tered into under this section, such services shall—
‘‘(A) either have high capital costs or ex-
tremely high annual operating costs; and
‘‘(B) be services with respect to which
there is a reasonable expectation that shared
ownership will avoid a significant degree of the
potential excess capacity of such services in the
community or region to be served under such
agreement.
Such services may include mobile services.
‘‘(e) TERM.—The demonstration program established
under this section shall continue for a term of 5 years.
‘‘(f) REPORTS.—
‘‘(1) IN GENERAL.—Grantees shall submit an-
nual reports to the Secretary containing information
on the demonstration projects funded under this sec-
tion, as required by the Secretary.
‘‘(2) TO CONGRESS.—On the date that occurs 5
years after the establishment of the demonstration
program under this section, the Secretary shall pre-
pare and submit to the appropriate committees of
Congress, a report concerning the potential for coop-
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erative agreements of the type entered into under
this section to—
‘‘(A) contain health care costs;
‘‘(B) increase the access of individuals to medi-
cal services; and
‘‘(C) improve the quality of health care.
Such report shall also contain the recommendations of the
Secretary with respect to future programs to facilitate co-
operative agreements.
‘‘(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 a hospital to
enter into, and carry out activities under, a coopera-
tive agreement 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.);
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‘‘(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); and
‘‘(D) any State antitrust laws that would
prohibit the activities described in paragraph
(1).
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$2,500,000 for each of the fiscal years 1994 through
1998. Any appropriation pursuant to the preceding sen-
tence shall be subject to section 601 of the Congressional
Budget Act of 1974 (relating to discretionary spending
limits).
‘‘(i) EFFECTIVE DATE.—If the Agency for Health
Care Policy and Research fails to establish guidelines pur-
suant to subsection (b)(2), the Secretary shall award
grants under this section based on the criteria contained
in subsection (b)(3).’’.
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