I 
114TH CONGRESS 
1ST SESSION H. R. 3225 
To amend titles XVIII and XIX of the Social Security Act to provide for 
enhanced payments to rural health care providers under the Medicare 
and Medicaid programs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 27, 2015 
Mr. GRAVES of Missouri (for himself and Mr. LOEBSACK) introduced the fol-
lowing bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committees on Ways and Means and the 
Budget, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend titles XVIII and XIX of the Social Security Act 
to provide for enhanced payments to rural health care 
providers under the Medicare and Medicaid programs, 
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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Save Rural Hospitals Act’’. 
(b) FINDINGS.—Congress finds the following: 
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(1) More than 60,000,000 individuals in rural 
areas of the United States rely on rural hospitals 
and other providers as critical access points to 
health care. 
(2) Access to health care is essential to commu-
nities that Americans living in rural areas call home. 
(3) Americans living in rural areas are older, 
poorer, and sicker than Americans living in urban 
areas. 
(4) From January 2010 until July 8, 2015, 55 
rural hospitals have closed in the United States, ac-
cording to the University of North Carolina’s Cecil 
G. Sheps Center for Health Services Research, and 
the rate of these closures is increasing. 
(5) Two hundred and eighty-three hospitals are 
at risk of closing, according to iVantage’s Hospital 
Strength INDEX study, and such closings would 
mean that 700,000 patients would be left without 
local access to care, 50,000 community jobs would 
be lost, 36,000 healthcare jobs would be lost, and 
$10,600,000,000 would be lost from the gross do-
mestic product. 
(6) Rural Medicare beneficiaries already face a 
number of challenges when trying to access health 
care services close to home, including the weather, 
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geography, and cultural, social, and language bar-
riers. 
(7) Seventy-seven percent of rural counties in 
the United States are designated as primary care 
health professional shortage areas while 9 percent 
have no physicians at all. 
(8) Seniors living in rural areas are forced to 
travel significant distances for care. 
(9) On average, trauma victims in rural areas 
must travel twice as far as victims in urban areas 
to the closest hospital, and, as a result, 60 percent 
of trauma deaths occur in rural areas, even though 
only 20 percent of Americans live in rural areas. 
(10) With the 283 hospitals on the brink of clo-
sure, 700,000 Americans living in rural areas are on 
the brink of losing access to the closest emergency 
room. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—RURAL PROVIDER PAYMENT STABILIZATION 
Subtitle A—Rural Hospitals 
Sec. 101. Eliminating Medicare sequestration for rural hospitals. 
Sec. 102. Reversing cuts to reimbursement of bad debt for critical access hos-
pitals (CAHs) and rural hospitals. 
Sec. 103. Extending payment levels for low-volume hospitals and Medicare-de-
pendent hospitals (MDHs). 
Sec. 104. Reinstating revised diagnosis-related group payments for MDHs and 
sole community hospitals (SCHs). 
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Sec. 105. Reinstating hold harmless treatment for hospital outpatient services 
for SCHs. 
Sec. 106. Delaying application of penalties for failure to be a meaningful elec-
tronic health record user. 
Sec. 107. Eliminating rural Medicare and Medicaid disproportionate share hos-
pital payment reductions. 
Subtitle B—Other Rural Providers 
Sec. 111. Making permanent increased Medicare payments for ground ambu-
lance services in rural areas. 
Sec. 112. Extending Medicaid primary care payments. 
TITLE II—RURAL MEDICARE BENEFICIARY EQUITY 
Sec. 201. Equalizing beneficiary copayments for services furnished by CAHs. 
TITLE III—REGULATORY RELIEF 
Sec. 301. Eliminating 96-hour physician certification requirement with respect 
to inpatient CAH services. 
Sec. 302. Rebasing supervision requirements. 
Sec. 303. Reforming practices of recovery audit contractors under Medicare. 
TITLE IV—FUTURE OF RURAL HEALTH CARE 
Sec. 401. Community outpatient hospital program. 
Sec. 402. Grant funding to assist rural hospitals. 
Sec. 403. CMMI demonstration of shared savings in rural hospitals. 
TITLE I—RURAL PROVIDER 
PAYMENT STABILIZATION 
Subtitle A—Rural Hospitals 
SEC. 101. ELIMINATING MEDICARE SEQUESTRATION FOR 
RURAL HOSPITALS. 
(a) IN GENERAL.—Section 256(d)(7) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 
U.S.C. 906(d)(7)) is amended by adding at the end the 
following: 
‘‘(D) 
RURAL
HOSPITALS.—Payments 
under part A or part B of title XVIII of the So-
cial Security Act with respect to items and serv-
ices furnished by a critical access hospital (as 
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defined in section 1861(mm)(1) of such Act), a 
sole community hospital (as defined in section 
1886(d)(5)(D)(iii) of such Act), a medicare-de-
pendent small rural hospital (as defined in sec-
tion 1886(d)(5)(G)(iv) of such Act), or a sub-
section (d) hospital located in a rural area (as 
defined in section 1886(d)(2)(D) of such Act).’’. 
(b) APPLICABILITY.—The amendment made by this 
section applies with respect to orders of sequestration ef-
fective on or after the date that is 60 days after the date 
of the enactment of this Act. 
SEC. 102. REVERSING CUTS TO REIMBURSEMENT OF BAD 
DEBT FOR CRITICAL ACCESS HOSPITALS 
(CAHS) AND RURAL HOSPITALS. 
(a) RURAL HOSPITALS.—Section 1861(v)(1)(T)(v) of 
the Social Security Act (42 U.S.C. 1395x(v)(1)(T)(v)) is 
amended by inserting before the period the following: ‘‘or, 
in the case of a hospital located in a rural area, by 30 
percent of such amount otherwise allowable’’. 
(b) CAHS.—Section 1861(v)(1)(W)(ii) of the Social 
Security Act (42 U.S.C. 1395x(v)(1)(W)(ii)) is amended 
by inserting after ‘‘or (V)’’ the following: ‘‘, a critical ac-
cess hospital’’. 
(c) APPLICABILITY.—The amendments made by this 
section apply with respect to cost reporting periods begin-
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(i) in the matter preceding clause (i), 
by striking ‘‘, and before October 1, 
2017’’; and 
(ii) in clause (iv), by striking ‘‘during 
fiscal year 1998 through fiscal year 2017’’ 
and inserting ‘‘during or after fiscal year 
1998’’. 
(B) EXTENDING
THE
PERIOD
DURING 
WHICH
HOSPITALS
CAN
DECLINE
RECLASSI-
FICATION AS URBAN.—Section 13501(e)(2) of 
the Omnibus Budget Reconciliation Act of 1993 
(42 U.S.C. 1395ww note), as amended by sec-
tion 205(b) of the Medicare Access and CHIP 
Reauthorization Act of 2015, is amended— 
(i) by inserting after ‘‘2017’’ the fol-
lowing: ‘‘or a subsequent fiscal year’’; and 
(ii) in subparagraph (C), by inserting 
after ‘‘such reclassification’’ the following: 
‘‘during the 1-year period that begins on 
the date of the notification of the hospital 
under subparagraph (A)’’. 
(b) EXTENSION OF INCREASED PAYMENTS FOR LOW- 
VOLUME HOSPITALS.—Section 1886(d)(12) of the Social 
Security Act (42 U.S.C. 1395ww(d)(12)), as amended by 
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section 204 of the Medicare Access and CHIP Reauthor-
ization Act of 2015, is amended— 
(1) in subparagraph (B)— 
(A) in the heading, by inserting after ‘‘IN-
CREASE’’ the following: ‘‘THROUGH
FISCAL 
YEAR 2010’’; and 
(B) by striking ‘‘and for discharges occur-
ring in fiscal year 2018 and subsequent fiscal 
years’’; 
(2) in subparagraph (C)(i)— 
(A) by striking ‘‘25 road miles (or, with re-
spect to fiscal years 2011 through 2017, 15 
road miles)’’ and inserting ‘‘15 road miles’’; 
and 
(B) striking ‘‘(or, with respect to fiscal 
years 2011 through 2017, 1,600 discharges of 
individuals entitled to, or enrolled for, benefits 
under part A)’’ and inserting ‘‘or 1,600 dis-
charges of individuals entitled to, or enrolled 
for, benefits under part A’’; and 
(3) in subparagraph (D)— 
(A) by amending the heading to read as 
follows: ‘‘APPLICABLE PERCENTAGE INCREASE 
AFTER FISCAL YEAR 2010’’; and 
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(B) by striking ‘‘in fiscal years 2011 
through 2017’’ and inserting ‘‘in fiscal year 
2011 and each subsequent fiscal year’’. 
SEC. 104. REINSTATING REVISED DIAGNOSIS-RELATED 
GROUP PAYMENTS FOR MDHS AND SOLE 
COMMUNITY HOSPITALS (SCHS). 
(a) PAYMENTS FOR MDHS AND SCHS FOR VALUE- 
BASED
INCENTIVE
PROGRAMS.—Section 
1886(o)(7)(D)(ii)(I) of the Social Security Act (42 U.S.C. 
1395ww(o)(7)(D)(ii)(I)) is amended by inserting ‘‘or after 
fiscal year 2016’’ after ‘‘2013’’. 
(b) PAYMENTS FOR MDHS AND SCHS UNDER HOS-
PITAL READMISSIONS REDUCTION PROGRAM.—Section 
1886(q)(2)(B)(i) of the Social Security Act (42 U.S.C. 
1395ww(q)(2)(B)(i)) is amended by inserting ‘‘or after fis-
cal year 2016’’ after ‘‘2013’’. 
SEC. 105. REINSTATING HOLD HARMLESS TREATMENT FOR 
HOSPITAL OUTPATIENT SERVICES FOR SCHS. 
Section 1833(t)(7)(D)(i) of the Social Security Act 
(42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 
(1) in the heading, by striking ‘‘TEMPORARY’’ 
and inserting ‘‘PERMANENT’’; 
(2) in subclause (II)— 
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(A) in the first sentence, by inserting ‘‘or 
on or after January 1, 2016,’’ after ‘‘January 
1, 2013,’’; and 
(B) in the second sentence, by inserting ‘‘, 
or during or after 2016’’ after ‘‘or 2012’’; and 
(3) in subclause (III), in the first sentence, by 
inserting ‘‘or on or after January 1, 2016,’’ after 
‘‘January 1, 2013,’’. 
SEC. 106. DELAYING APPLICATION OF PENALTIES FOR 
FAILURE TO BE A MEANINGFUL ELECTRONIC 
HEALTH RECORD USER. 
(a) IN GENERAL.—Section 1886(b)(3)(B)(ix)(I) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(b)(3)(B)(ix)(I)) is amended by adding at the end 
the following: ‘‘In the case of a hospital located in a rural 
area, each fiscal year referred to in the first sentence of 
this subclause shall be applied as if it were a reference 
to the year that is 4 fiscal years later.’’. 
(b) APPLICABILITY.—The amendment made by this 
section applies with respect fiscal years beginning after the 
date of the enactment of this Act. 
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SEC. 107. ELIMINATING RURAL MEDICARE AND MEDICAID 
DISPROPORTIONATE SHARE HOSPITAL PAY-
MENT REDUCTIONS. 
(a) MEDICARE.—Section 1886(r)(1) of the Social Se-
curity Act (42 U.S.C. 1395ww(r)(1)) is amended by in-
serting before ‘‘25 percent’’ the following: ‘‘(unless such 
hospital is located in a rural area, as defined in subsection 
(d)(2)(D))’’. 
(b) MEDICAID.—Section 1923(f)(3) of the Social Se-
curity Act (42 U.S.C.1396r–4(f)(3)) is amended— 
(1) in subparagraph (A) by striking ‘‘subpara-
graph (E)’’ and inserting ‘‘subparagraphs (E) and 
(F)’’; and 
(2) by adding at the end the following: 
‘‘(F) INCREASE IN ALLOTMENTS AND PAY-
MENTS FOR RURAL HOSPITALS.— 
‘‘(i) ALLOTMENTS.—The DSH allot-
ment for a State with respect to a fiscal 
year that would be determined under this 
paragraph for the State for the fiscal year 
without application of this subparagraph, 
notwithstanding subparagraphs (B), (C), 
and (E), shall be increased by the product 
of the reduction to such State under para-
graph (7)(A)(i)(I) for such fiscal year and 
the percentage of Medicaid enrollees resid-
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ing in the State that live in a rural area 
(as defined in section 1886(d)(2)(D)), sub-
ject to clause (iii). 
‘‘(ii) PAYMENTS.—The payments to a 
State under section 1903(a) for each cal-
endar quarter shall be increased by the 
product of the reduction to such State 
under paragraph (7)(A)(i)(II) for such fis-
cal year and the percentage of Medicaid 
enrollees residing in the State that live in 
a rural area (as defined in section 
1886(d)(2)(D)), subject to clause (iii). 
‘‘(iii) ASSURANCES REGARDING APPLI-
CATION
OF
INCREASED
FUNDS
TO
HOS-
PITALS IN RURAL AREAS.—A State may 
only receive an increased allotment or pay-
ment under this paragraph if such State 
provides such assurances as the Secretary 
may require that any funds received due to 
the increase in clauses (i) and (ii) shall be 
allotted to hospitals located in rural areas 
as an additional amount above what would 
be allotted to such hospitals without appli-
cation of such clause.’’. 
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(c) APPLICABILITY.—The amendments made by this 
section apply with respect to fiscal year 2017. 
Subtitle B—Other Rural Providers 
SEC. 111. MAKING PERMANENT INCREASED MEDICARE 
PAYMENTS FOR GROUND AMBULANCE SERV-
ICES IN RURAL AREAS. 
Section 1834(l)(13) of the Social Security Act (42 
U.S.C. 1395m(l)(13)) is amended— 
(1) by striking ‘‘TEMPORARY INCREASE’’ and 
inserting ‘‘INCREASE’’; and 
(2) in subparagraph (A)— 
(A) in the matter preceding clause (i), by 
striking ‘‘, and before January 1, 2018’’; and 
(B) in clause (i), by striking ‘‘, and before 
January 1, 2018’’. 
SEC. 112. EXTENDING MEDICAID PRIMARY CARE PAY-
MENTS. 
(a) IN GENERAL.—Section 1902(a)(13)(C) of the So-
cial Security Act (42 U.S.C. 1396a(a)(13)(C)) is amended 
by inserting after ‘‘2014’’ the following: ‘‘(or in the case 
of a primary care services furnished by a physician located 
in a rural area, as defined in section 1886(d)(2)(D), fur-
nished in any year)’’. 
(b) APPLICABILITY.— 
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(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section ap-
plies to services furnished in a year beginning on or 
after such date. 
(2) EXCEPTION
IF
STATE
LEGISLATION
RE-
QUIRED.—In the case of a State plan for medical as-
sistance under title XIX of the Social Security Act 
which the Secretary of Health and Human Services 
determines requires State legislation (other than leg-
islation appropriating funds) in order for the plan to 
meet the additional requirement imposed by the 
amendment made by this section, the State plan 
shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its 
failure to meet this additional requirement before 
the first day of the first calendar quarter beginning 
after the close of the first regular session of the 
State legislature that begins after the date of the en-
actment of this Act. For purposes of the previous 
sentence, in the case of a State that has a 2-year 
legislative session, each year of such session shall be 
deemed to be a separate regular session of the State 
legislature. 
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TITLE II—RURAL MEDICARE 
BENEFICIARY EQUITY 
SEC. 201. EQUALIZING BENEFICIARY COPAYMENTS FOR 
SERVICES FURNISHED BY CAHS. 
(a) IN GENERAL.—Section 1866(a)(2)(A) of the So-
cial Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended 
by adding at the end the following: ‘‘In the case of out-
patient critical access hospital services for which payment 
is made under section 1834(g), clause (ii) of the first sen-
tence shall be applied by substituting ‘20 percent of the 
lesser of the actual charge or the payment basis under 
this part for such services if the critical access hospital 
were treated as a hospital’ for ‘20 per centum of the rea-
sonable charge for such items and services’.’’ 
(b) APPLICABILITY.—The amendment made by this 
section applies with respect to services furnished during 
a year that begins more than 60 days after the date of 
the enactment of this Act. 
TITLE III—REGULATORY RELIEF 
SEC. 301. ELIMINATING 96-HOUR PHYSICIAN CERTIFI-
CATION REQUIREMENT WITH RESPECT TO 
INPATIENT CAH SERVICES. 
(a) IN GENERAL.—Section 1814(a) of the Social Se-
curity Act (42 U.S.C. 1395f(a)) is amended— 
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(1) in paragraph (6), by adding ‘‘and’’ at the 
end; 
(2) in paragraph (7)(E), by striking ‘‘; and’’ 
and inserting a period; and 
(3) by striking paragraph (8). 
(b) APPLICABILITY.—The amendments made by this 
section apply with respect to services furnished during a 
year that begins more than 60 days after the date of the 
enactment of this Act. 
SEC. 302. REBASING SUPERVISION REQUIREMENTS. 
(a) THERAPEUTIC HOSPITAL OUTPATIENT SERV-
ICES.— 
(1) 
SUPERVISION
REQUIREMENTS.—Section 
1833 of the Social Security Act (42 U.S.C. 1395l) 
is amended by adding at the end the following: 
‘‘(aa) PHYSICIAN SUPERVISION REQUIREMENTS FOR 
THERAPEUTIC HOSPITAL OUTPATIENT SERVICES.— 
‘‘(1) GENERAL SUPERVISION FOR THERAPEUTIC 
SERVICES.—Except as may be provided under para-
graph (2), insofar as the Secretary requires the su-
pervision by a physician or a non-physician practi-
tioner for payment for therapeutic hospital out-
patient services (as defined in paragraph (5)(A)) 
furnished under this part, such requirement shall be 
met if such services are furnished under the general 
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supervision (as defined in paragraph (5)(B)) of the 
physician or non-physician practitioner, as the case 
may be. 
‘‘(2) EXCEPTIONS PROCESS FOR HIGH-RISK OR 
COMPLEX MEDICAL SERVICES REQUIRING A DIRECT 
LEVEL OF SUPERVISION.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this paragraph, the Sec-
retary shall establish a process for the designa-
tion of therapeutic hospital outpatient services 
furnished under this part that, by reason of 
complexity or high risk, require— 
‘‘(i) direct supervision (as defined in 
paragraph (5)(C)) for the entire service; or 
‘‘(ii) direct supervision during the ini-
tiation of the service followed by general 
supervision for the remainder of the serv-
ice. 
‘‘(B) CONSULTATION WITH CLINICAL EX-
PERTS.— 
‘‘(i) IN GENERAL.—Under the process 
established under subparagraph (A), before 
the designation of any therapeutic hospital 
outpatient service for which direct super-
vision may be required under this part, the 
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Secretary shall consult with a panel of out-
side experts described in clause (ii) to ad-
vise the Secretary with respect to each 
such designation. 
‘‘(ii) ADVISORY
PANEL
ON
SUPER-
VISION OF THERAPEUTIC HOSPITAL OUT-
PATIENT
SERVICES.—For 
purposes 
of 
clause (i), a panel of outside experts de-
scribed in this clause is a panel appointed 
by the Secretary, based on nominations 
submitted by hospital, rural health, and 
medical organizations representing physi-
cians, non-physician practitioners, and hos-
pital administrators, as the case may be, 
that meets the following requirements: 
‘‘(I) COMPOSITION.—The panel 
shall be composed of at least 15 phy-
sicians 
and 
non-physician 
practi-
tioners who furnish therapeutic hos-
pital outpatient services for which 
payment is made under this part and 
who collectively represent the medical 
specialties that furnish such services, 
and of 4 hospital administrators of 
hospitals located in rural areas (as de-
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fined in section 1886(d)(2)(D)) or 
critical access hospitals. 
‘‘(II) PRACTICAL
EXPERIENCE 
REQUIRED FOR PHYSICIANS AND NON- 
PHYSICIAN
PRACTITIONERS.—During 
the 12-month period preceding ap-
pointment to the panel by the Sec-
retary, each physician or non-physi-
cian practitioner described in sub-
clause (I) shall have furnished thera-
peutic hospital outpatient services for 
which payment was made under this 
part. 
‘‘(III) MINIMUM
RURAL
REP-
RESENTATION
REQUIREMENT
FOR 
PHYSICIANS
AND
NON-PHYSICIAN 
PRACTITIONERS.—Not less than 50 
percent of the membership of the 
panel that is comprised of physicians 
and non-physician practitioners shall 
be physicians or non-physician practi-
tioners described in subclause (I) who 
practice in rural areas (as defined in 
section 1886(d)(2)(D)) or who furnish 
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such services in critical access hos-
pitals. 
‘‘(iii) APPLICATION
OF
FACA.—The 
Federal Advisory Committee Act (5 U.S.C. 
2 App.), other than section 14 of such Act, 
shall apply to the panel of outside experts 
appointed by the Secretary under clause 
(ii). 
‘‘(C) SPECIAL
RULE
FOR
OUTPATIENT 
CRITICAL
ACCESS
HOSPITAL
SERVICES.—Inso-
far as a therapeutic outpatient hospital service 
that is an outpatient critical access hospital 
service is designated as requiring direct super-
vision under the process established under sub-
paragraph (A), the Secretary shall deem the 
critical access hospital furnishing that service 
as having met the requirement for direct super-
vision for that service if, when furnishing such 
service, the critical access hospital meets the 
standard for personnel required as a condition 
of participation under section 485.618(d) of 
title 42, Code of Federal Regulations (as in ef-
fect on the date of the enactment of this sub-
section). 
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‘‘(D) CONSIDERATION
OF
COMPLIANCE 
BURDENS.—Under 
the 
process 
established 
under subparagraph (A), the Secretary shall 
take into account the impact on hospitals and 
critical access hospitals in complying with re-
quirements for direct supervision in the fur-
nishing of therapeutic hospital outpatient serv-
ices, including hospital resources, availability of 
hospital-privileged physicians, specialty physi-
cians, and non-physician practitioners, and ad-
ministrative burdens. 
‘‘(E) REQUIREMENT
FOR
NOTICE
AND 
COMMENT
RULEMAKING.—Under the process 
established under subparagraph (A), the Sec-
retary shall only designate therapeutic hospital 
outpatient services requiring direct supervision 
under this part through proposed and final 
rulemaking that provides for public notice and 
opportunity for comment. 
‘‘(F) RULE OF CONSTRUCTION.—Nothing 
in this subsection shall be construed as author-
izing the Secretary to apply or require any level 
of supervision other than general or direct su-
pervision with respect to the furnishing of 
therapeutic hospital outpatient services. 
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‘‘(3) INITIAL LIST OF DESIGNATED SERVICES.— 
The Secretary shall include in the proposed and final 
regulation for payment for hospital outpatient serv-
ices for 2017 under this part a list of initial thera-
peutic hospital outpatient services, if any, designated 
under the process established under paragraph 
(2)(A) as requiring direct supervision under this 
part. 
‘‘(4) DIRECT SUPERVISION BY NON-PHYSICIAN 
PRACTITIONERS
FOR
CERTAIN
HOSPITAL
OUT-
PATIENT SERVICES PERMITTED.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, a non-phy-
sician practitioner may directly supervise the 
furnishing of— 
‘‘(i) therapeutic hospital outpatient 
services under this part, including cardiac 
rehabilitation 
services 
(under 
section 
1861(eee)(1)), intensive cardiac rehabilita-
tion services (under section 1861(eee)(4)), 
and 
pulmonary 
rehabilitation 
services 
(under section 1861(fff)(1)); and 
‘‘(ii) those hospital outpatient diag-
nostic 
services 
(described 
in 
section 
1861(s)(2)(C)) that require direct super-
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vision under the fee schedule established 
under section 1848. 
‘‘(B) REQUIREMENTS.—Subparagraph (A) 
shall apply insofar as the non-physician practi-
tioner involved meets the following require-
ments: 
‘‘(i) SCOPE OF PRACTICE.—The non- 
physician practitioner is acting within the 
scope of practice under State law applica-
ble to the practitioner. 
‘‘(ii) ADDITIONAL
REQUIREMENTS.— 
The non-physician practitioner meets such 
requirements as the Secretary may specify. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) 
THERAPEUTIC
HOSPITAL
OUT-
PATIENT
SERVICES.—The term ‘therapeutic 
hospital outpatient services’ means hospital 
services described in section 1861(s)(2)(B) fur-
nished by a hospital or critical access hospital 
and includes— 
‘‘(i) cardiac rehabilitation services and 
intensive cardiac rehabilitation services (as 
defined in paragraphs (1) and (4), respec-
tively, of section 1861(eee)); and 
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‘‘(ii) pulmonary rehabilitation services 
(as defined in section 1861(fff)(1)). 
‘‘(B) GENERAL SUPERVISION.— 
‘‘(i) OVERALL DIRECTION AND CON-
TROL
OF
PHYSICIAN.—Subject to clause 
(ii), with respect to the furnishing of 
therapeutic hospital outpatient services for 
which payment may be made under this 
part, the term ‘general supervision’ means 
such services that are furnished under the 
overall direction and control of a physician 
or non-physician practitioner, as the case 
may be. 
‘‘(ii) PRESENCE NOT REQUIRED.—For 
purposes of clause (i), the presence of a 
physician or non-physician practitioner is 
not required during the performance of the 
procedure involved. 
‘‘(C) DIRECT SUPERVISION.— 
‘‘(i) PROVISION OF ASSISTANCE AND 
DIRECTION.—Subject to clause (ii), with 
respect to the furnishing of therapeutic 
hospital outpatient services for which pay-
ment may be made under this part, the 
term ‘direct supervision’ means that a phy-
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sician or non-physician practitioner, as the 
case may be, is immediately available (in-
cluding by telephone or other means) to 
furnish assistance and direction through-
out the furnishing of such services. Such 
term includes, with respect to the fur-
nishing of a therapeutic hospital outpatient 
service for which payment may be made 
under this part, direct supervision during 
the initiation of the service followed by 
general supervision for the remainder of 
the service (as described in paragraph 
(2)(A)(ii)). 
‘‘(ii) PRESENCE
IN
ROOM
NOT
RE-
QUIRED.—For purposes of clause (i), a 
physician or non-physician practitioner, as 
the case may be, is not required to be 
present in the room during the perform-
ance of the procedure involved or within 
any other physical boundary as long as the 
physician or non-physician practitioner, as 
the case may be, is immediately available. 
‘‘(D) NON-PHYSICIAN
PRACTITIONER
DE-
FINED.—The term ‘non-physician practitioner’ 
means an individual who— 
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‘‘(i) is a physician assistant, a nurse 
practitioner, a clinical nurse specialist, a 
clinical social worker, a clinical psycholo-
gist, a certified nurse midwife, or a cer-
tified registered nurse anesthetist, and in-
cludes such other practitioners as the Sec-
retary may specify; and 
‘‘(ii) with respect to the furnishing of 
therapeutic outpatient hospital services, 
meets the requirements of paragraph 
(4)(B).’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1861(eee)(2)(B) of the Social Security Act (42 
U.S.C. 1395x(eee)(2)(B)) is amended by inserting ‘‘, 
and a non-physician practitioner (as defined in sec-
tion 1833(aa)(5)(D)) may supervise the furnishing 
of such items and services in the hospital’’ after ‘‘in 
the case of items and services furnished under such 
a program in a hospital, such availability shall be 
presumed’’. 
(b) PROHIBITION ON RETROACTIVE ENFORCEMENT 
OF REVISED INTERPRETATION.— 
(1) REPEAL
OF
REGULATORY
CLARIFICA-
TION.—The restatement and clarification under the 
final rulemaking changes to the Medicare hospital 
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outpatient prospective payment system and calendar 
year 2009 payment rates (published in the Federal 
Register on November 18, 2008, 73 Fed. Reg. 
68702 through 68704) with respect to requirements 
for direct supervision by physicians for therapeutic 
hospital outpatient services (as defined in paragraph 
(3)) for purposes of payment for such services under 
the Medicare program shall have no force or effect 
in law. 
(2) HOLD
HARMLESS.—A hospital or critical 
access hospital that furnishes therapeutic hospital 
outpatient services during the period beginning on 
January 1, 2001, and ending on the later of Decem-
ber 31, 2016, or the date on which the final regula-
tion promulgated by the Secretary of Health and 
Human Services to carry out this section takes ef-
fect, for which a claim for payment is made under 
part B of title XVIII of the Social Security Act shall 
not be subject to any civil or criminal action or pen-
alty under Federal law for failure to meet super-
vision requirements under the regulation described 
in paragraph (1), under program manuals, or other-
wise. 
(3) 
THERAPEUTIC
HOSPITAL
OUTPATIENT 
SERVICES DEFINED.—In this subsection, the term 
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‘‘therapeutic hospital outpatient services’’ means 
medical and other health services furnished by a 
hospital or critical access hospital that are— 
(A) hospital services described in sub-
section (s)(2)(B) of section 1861 of the Social 
Security Act (42 U.S.C. 1395x); 
(B) cardiac rehabilitation services or inten-
sive cardiac rehabilitation services (as defined 
in paragraphs (1) and (4), respectively, of sub-
section (eee) of such section); or 
(C) pulmonary rehabilitation services (as 
defined in subsection (fff)(1) of such section). 
SEC. 303. REFORMING PRACTICES OF RECOVERY AUDIT 
CONTRACTORS UNDER MEDICARE. 
(a) ELIMINATION OF CONTINGENCY FEE PAYMENT 
SYSTEM.—Section 1893(h) of the Social Security Act (42 
U.S.C. 1395ddd(h)), as amended by section 505(b) of the 
Medicare Access and CHIP Reauthorization Act of 2015, 
is amended— 
(1) in paragraph (1), by inserting ‘‘, for recov-
ery activities conducted during a fiscal year before 
fiscal year 2016’’ after ‘‘Under the contracts’’; and 
(2) by adding at the end the following new 
paragraph: 
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‘‘(11) PAYMENT
FOR
RECOVERY
ACTIVITIES 
PERFORMED AFTER FISCAL YEAR 2015.— 
‘‘(A) IN GENERAL.—Under the contracts, 
subject to paragraphs (B) and (C), payment 
shall be made to recovery audit contractors for 
recovery activities conducted during fiscal year 
2016 and each fiscal year thereafter in the 
same manner, and from the same amounts, as 
payment is made to eligible entities under con-
tracts entered into for recovery activities con-
ducted during fiscal year 2015 under subsection 
(a). 
‘‘(B) PROHIBITION
ON
INCENTIVE
PAY-
MENTS.—Under the contracts, payment made 
to a recovery audit contractor for recovery ac-
tivities conducted during fiscal year 2016 or 
any fiscal year thereafter may not include any 
incentive payments. 
‘‘(C) PERFORMANCE ACCOUNTABILITY.— 
‘‘(i) IN
GENERAL.—Under the con-
tracts, payment made to a recovery audit 
contractor for recovery activities conducted 
during fiscal year 2016 or any fiscal year 
thereafter shall, in the case that the con-
tractor has a complex audit denial overturn 
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rate at the end of such fiscal year (as cal-
culated under the methodology described in 
clause (iv)) that is .1 or greater, be re-
duced in an amount determined in accord-
ance with clause (ii). 
‘‘(ii) PAYMENT REDUCTIONS.— 
‘‘(I) SLIDING SCALE OF AMOUNT 
OF
REDUCTIONS.—The 
Secretary 
shall establish, for purposes of deter-
mining the amount of a reduction in 
payment to a recovery audit con-
tractor under clause (i) for recovery 
activities conducted during fiscal year, 
a linear sliding scale of payment re-
ductions for recovery audit contrac-
tors for such fiscal year. Under such 
linear sliding scale, the amount of 
such a reduction in payment to a re-
covery audit contractor for a fiscal 
year shall be calculated in a manner 
that provides for such reduction to be 
greater than the reduction for such 
fiscal year for recovery audit contrac-
tors that have complex audit denial 
overturn rates at the end of such fis-
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cal year (as calculated under the 
methodology described in clause (iv)) 
that are lower than the complex audit 
denial overturn rate of the contractor 
at the end of such fiscal year (as so 
calculated). 
‘‘(II) MANNER
OF
COLLECTING 
REDUCTION.—The Secretary may as-
sess and collect the reductions in pay-
ment to recovery audit contractors 
under clause (i) in such manner as 
the Secretary may specify (such as by 
reducing the amount paid to the con-
tractor for recovery activities con-
ducted during a fiscal year or by as-
sessing the reduction as a separate 
penalty payment to be paid to the 
Secretary by the contractor with re-
spect to each complex audit denial 
issued by the contractor that is over-
turned on appeal). 
‘‘(iii) TIMING OF DETERMINATIONS OF 
PAYMENT
REDUCTIONS.—The Secretary 
shall, with respect to a recovery audit con-
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tractor, determine not later than six 
months after the end of a fiscal year— 
‘‘(I) whether to reduce payment 
to the recovery audit contractor under 
clause (i) for recovery activities con-
ducted during such fiscal year; and 
‘‘(II) in the case that the Sec-
retary determines to so reduce pay-
ment to the contractor, the amount of 
such payment reduction. 
‘‘(iv) METHODOLOGY
FOR
CALCULA-
TION
OF
OVERTURNED
COMPLEX
AUDIT 
DENIAL OVERTURN RATE.— 
‘‘(I) CALCULATION OF OVERTURN 
RATE.—The Secretary shall calculate 
a complex audit denial overturn rate 
for a recovery audit contractor for a 
fiscal year by— 
‘‘(aa) determining, with re-
spect to the contract entered into 
under paragraph (1) by the con-
tractor, the number of complex 
audit denials issued by the con-
tractor under the contract (in-
cluding denials issued before such 
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fiscal year and during such fiscal 
year) that are overturned on ap-
peal; and 
‘‘(bb) dividing the number 
determined under item (aa) by 
the number of complex audit de-
nials issued by the contractor 
under such contract (including 
denials issued before such fiscal 
year and during such fiscal year). 
‘‘(II) FAIRNESS
AND
TRANS-
PARENCY.—The Secretary shall cal-
culate the percentage described in 
subclause (I) in a fair and trans-
parent manner. 
‘‘(III) ACCOUNTING FOR SUBSE-
QUENTLY
OVERTURNED
APPEALS.— 
The Secretary shall calculate the per-
centage described in subclause (I) in a 
manner that accounts for the likeli-
hood that complex audit denials 
issued by the contractor for such fis-
cal year will be overturned on appeal 
in a subsequent fiscal year. 
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‘‘(IV) COMPLEX
AUDIT
DENIAL 
DEFINED.—In this subparagraph, the 
term ‘complex audit denial’ means a 
denial by a recovery audit contractor 
of a claim for payment under this title 
submitted by a hospital, psychiatric 
hospital, or critical access hospital 
that is so denied by the contractor 
after the contractor has— 
‘‘(aa) requested that the 
hospital, psychiatric hospital, or 
critical access hospital, in order 
to support such claim for pay-
ment, provide supporting medical 
records to the contractor; and 
‘‘(bb) reviewed such medical 
records in order to determine 
whether an improper payment 
has been made to the hospital, 
psychiatric hospital, or critical 
access hospital for such claim. 
‘‘(V) OVERTURNED
ON
APPEAL 
DEFINED.—In this subparagraph, the 
term ‘overturned on appeal’ means, 
with respect to a complex audit de-
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nial, a denial that is overturned on 
appeal at the reconsideration level, the 
redetermination level, or the adminis-
trative law judge hearing level. 
‘‘(D) APPLICATION
TO
EXISTING
CON-
TRACTS.—Not later than 60 days after the date 
of the enactment of this paragraph, the Sec-
retary shall modify, as necessary, each contract 
under paragraph (1) that the Secretary entered 
into prior to such date of enactment in order to 
ensure that payment with respect to recovery 
activities conducted under such contract is 
made in accordance with the requirements de-
scribed in this paragraph.’’. 
(b) ELIMINATION
OF ONE-YEAR TIMELY FILING 
LIMIT TO REBILL PART B CLAIMS.— 
(1) IN GENERAL.—Section 1842(b) of the So-
cial Security Act (42 U.S.C. 1395u(b)) is amended 
by adding at the end the following new paragraph: 
‘‘(20) EXCEPTION TO THE ONE-YEAR TIMELY 
FILING LIMIT FOR CERTAIN REBILLED CLAIMS.— 
‘‘(A) IN GENERAL.—In the case of a claim 
submitted under this part by a hospital (as de-
fined in subparagraph (B)(i)) for hospital serv-
ices with respect to which there was a previous 
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claim submitted under part A as inpatient hos-
pital services or inpatient critical access hos-
pital services that was denied by a medicare 
contractor (as defined in subparagraph (B)(ii)) 
because of a determination that the inpatient 
admission was not medically reasonable and 
necessary under section 1862(a)(1)(A), the 
deadline described in this paragraph is 180 
days after the date of the final denial of such 
claim under part A. 
‘‘(B) DEFINITIONS.—In this paragraph: 
‘‘(i) HOSPITAL.—The term ‘hospital’ 
has the meaning given such term in section 
1861(e) and includes a psychiatric hospital 
(as defined in section 1861(f)) and a crit-
ical access hospital (as defined in section 
1861(mm)(1)). 
‘‘(ii) MEDICARE
CONTRACTOR.—The 
term ‘medicare contractor’ has the mean-
ing given such term under section 1889(g), 
and includes a recovery audit contractor 
with a contract under section 1893(h). 
‘‘(iii) FINAL DENIAL.—The term ‘final 
denial’ means— 
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‘‘(I) in the case that a hospital 
elects not to appeal a denial described 
in subparagraph (A) by a medicare 
contractor, the date of such denial; or 
‘‘(II) in the case that a hospital 
elects to appeal a such a denial, the 
date on which such appeal is ex-
hausted.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1835(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395n(a)(1)) is amended by 
inserting ‘‘or, in the case of a claim described 
in section 1842(b)(20), not later than the dead-
line described in such paragraph’’ after ‘‘the 
date of service’’. 
(B) Section 1842(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395u(b)(3)(B)) is 
amended in the flush language following clause 
(ii) by inserting ‘‘or, in the case of a claim de-
scribed in section 1842(b)(20), not later than 
the deadline described in such paragraph’’ after 
‘‘the date of service’’. 
(3) APPLICABILITY.—The amendments made 
by this subsection apply to claims submitted under 
part B of title XVIII of the Social Security Act for 
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hospital services for which there was a previous 
claim submitted under part A as inpatient hospital 
services or inpatient critical access hospital services 
that was subject to a final denial (as defined in 
paragraph (20)(B)(iii) of section 1842(b) of such 
Act (42 U.S.C. 1395u(b)) on or after the date of the 
enactment of this Act. 
(c) MEDICAL DOCUMENTATION CONSIDERED
FOR 
MEDICAL NECESSITY REVIEWS OF CLAIMS FOR INPA-
TIENT HOSPITAL SERVICES.—Section 1862(a) of the So-
cial Security Act (42 U.S.C. 1395y(a)) is amended by add-
ing at the end the following new sentence: ‘‘A determina-
tion under paragraph (1) of whether inpatient hospital 
services or inpatient critical access hospital services fur-
nished to an individual on or after the date of the enact-
ment of this sentence are reasonable and necessary shall 
be based solely upon information available to the admit-
ting physician at the time of the inpatient admission of 
the individual for such inpatient services, as documented 
in the medical record.’’ 
TITLE IV—FUTURE OF RURAL 
HEALTH CARE 
SEC. 401. COMMUNITY OUTPATIENT HOSPITAL PROGRAM. 
(a) IN GENERAL.— 
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(1) COMMUNITY
OUTPATIENT
HOSPITAL
AND 
QUALIFIED OUTPATIENT SERVICES DEFINED.—Sec-
tion 1861 of the Social Security Act (42 U.S.C. 
1395x) is amended— 
(A) in the last sentence of subsection (e), 
by inserting before the period at the end ‘‘or a 
community outpatient hospital (as defined in 
subsection (iii)(1))’’; and 
(B) by adding at the end the following: 
‘‘Community Outpatient Hospital 
‘‘(iii)(1) The term ‘community outpatient hospital’ 
means a facility that— 
‘‘(A) at any time during the period beginning 
on the date that is 5 years before the date of the 
enactment of this subsection and ending on Decem-
ber 31, 2014, was a critical access hospital, or is a 
hospital with not more than 50 beds that is— 
‘‘(i) located in a rural area (as defined in 
section 1886(d)(2)(D)); or 
‘‘(ii) treated as being located in a rural 
area under section 1886(d)(8)(E); 
‘‘(B) provides emergency medical care and ob-
servation care available on a 24-hour basis; 
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‘‘(C) with respect to continuous care for an in-
dividual, does not provide care over 2 or more con-
secutive midnights; 
‘‘(D) does not provide any acute care inpatient 
beds and has protocols in place for the timely trans-
fer of patients who require other inpatient services; 
‘‘(E) has the resources required of a level IV or 
higher trauma center (as verified by the American 
College of Surgeons or other means specified by the 
Secretary), or has available for consultation on a 24- 
hour basis a health care professional who success-
fully completed the Advanced Trauma Life Support 
Course offered by the American College of Surgeons 
(or an equivalent course as determined by the Sec-
retary) within the preceding 4 years; 
‘‘(F) has in effect a transfer agreement with a 
level I or level II trauma center designated under 
section 1231(1) of the Public Health Service Act; 
‘‘(G) meets the requirements of subsection 
(aa)(2)(I); 
‘‘(H) has been approved by the State in which 
the facility is located for treatment as a community 
outpatient hospital; 
‘‘(I) notifies the Secretary at such time and in 
such manner as the Secretary may require of the in-
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tent of such facility to be designated as a community 
outpatient facility; and 
‘‘(J) meets such staff training and certification 
requirements as the Secretary may require. 
‘‘(2) Nothing in this subsection or section 1834(r) 
shall be construed to prohibit a community outpatient hos-
pital from having an agreement under section 1883 for 
the provision of extended care services. 
‘‘(3) Unless the context otherwise requires, a ref-
erence to a community outpatient hospital in this title 
shall be deemed to also be a reference to a critical access 
hospital. 
‘‘Qualified Outpatient Services 
‘‘(jjj) The term ‘qualified outpatient services’ means 
medical and other health services furnished on an out-
patient basis by a community outpatient hospital, rural 
health clinic (as defined in section 1861(aa)(2)), federally 
qualified health center (as defined in section 1861(aa)(4)), 
or an entity certified by the Health Resources and Services 
Administration as a federally qualified health center look- 
alike, including, for individuals who require services from 
a hospital or critical access hospital, transportation serv-
ices from such community outpatient hospital to a hospital 
or critical access hospital.’’. 
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(2) PAYMENT
FOR
QUALIFIED
OUTPATIENT 
SERVICES.—Section 1834 of the Social Security Act 
(42 U.S.C. 1395m) is amended by adding at the end 
the following: 
‘‘(r) PAYMENT FOR QUALIFIED OUTPATIENT SERV-
ICES.— 
‘‘(1) IN
GENERAL.—The amount of payment 
for qualified outpatient services is equal to 105 per-
cent of the reasonable costs of providing such serv-
ices. 
‘‘(2) TELEHEALTH SERVICES AS REASONABLE 
COSTS.—For purposes of this subsection, with re-
spect to qualified outpatient services, costs reason-
ably associated with having a backup physician 
available via a telecommunications system shall be 
considered reasonable costs.’’. 
(b) WAIVER OF DISTANCE REQUIREMENT FOR RE-
PLACEMENT CAHS; SUBSEQUENT REDESIGNATION
OF 
COMMUNITY OUTPATIENT HOSPITALS AS CAHS.—Sec-
tion 1820(c)(2) of the Social Security Act (42 U.S.C. 
1395i–4(c)(2)) is amended— 
(1) in subparagraph (B)(i)(I), by inserting ‘‘, 
subject to subparagraph (F),’’ before ‘‘is located’’; 
and 
(2) by adding at the end the following: 
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‘‘(F) OPTION
TO
WAIVE
DISTANCE
RE-
QUIREMENT.—The State may waive the dis-
tance requirement described in subparagraph 
(B)(i)(I) with respect to a facility located in the 
State that is seeking designation as a critical 
access hospital under this paragraph if the total 
number of waivers for such facilities does not 
exceed the number of facilities that are critical 
access hospitals without such a waiver. 
‘‘(G) REDESIGNATION OF A CRITICAL AC-
CESS HOSPITAL AS A COMMUNITY OUTPATIENT 
HOSPITAL.—A community outpatient hospital 
may elect to be redesignated as a community 
outpatient hospital by notifying the Secretary at 
the same time and in the same manner as noti-
fications under section 1861(iii)(1)(I) if such 
community outpatient hospital— 
‘‘(i) meets the requirements in para-
graphs (1) and (3) of section 1820(e); and 
‘‘(ii) was designated as a critical ac-
cess hospital under this paragraph on the 
date that the Secretary first considered 
such community outpatient hospital to be a 
community outpatient hospital.’’. 
(c) CONFORMING AMENDMENTS.— 
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(1) REASONABLE
COST
FOR
COHS.—Section 
1861(v)(7) of the Social Security Act (42 U.S.C. 
1395x(v)(7)) is amended by adding at the end the 
following: 
‘‘(E) For additional items included in reason-
able cost for community outpatient hospitals and for 
determination of payment amounts for qualified out-
patient services, see section 1834(r).’’. 
(2) COHS
AS
COVERED
SERVICES.—Section 
1832(a)(2)(H) of the Social Security Act (42 U.S.C. 
1395k(a)(2)(H)) is amended by inserting ‘‘and 
qualified outpatient services (as defined in section 
1861(iii)(2))’’ before the semicolon. 
(3) COH PAYMENTS.—Section 1833(a) of the 
Social Security Act (42 U.S.C. 1395l(a)) is amend-
ed— 
(A) in paragraph (8), by striking ‘‘; and’’; 
(B) in paragraph (9), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (9) the 
following: 
‘‘(10) in the case of qualified outpatient serv-
ices, the amounts described in section 1834(r).’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to items and services 
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furnished on or after the first day of the first cal-
endar year beginning more than 1 year after the 
date of the enactment of this Act. 
(d) REPORTS.—The Secretary of Health and Human 
Services shall submit to Congress three reports on the im-
pact of community outpatient hospitals on the availability 
of health care and health outcomes in rural areas (as de-
fined in section 1886(d)(2)(D) of the Social Security Act 
(42 U.S.C. 1395ww(d)(2)(D)) as follows: 
(1) INITIAL
REPORT.—An initial report ap-
proximately 2 years after the date of the enactment 
of this Act. 
(2) INTERIM REPORT.—An interim report ap-
proximately 5 years after the date of the enactment 
of this Act. 
(3) FINAL
REPORT.—A final report approxi-
mately 10 years after the date of the enactment of 
this Act. 
SEC. 402. GRANT FUNDING TO ASSIST RURAL HOSPITALS. 
Section 330A of the Public Health Service Act (42 
U.S.C 254c) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘Director 
specified in subsection (d)’’ and inserting ‘‘Di-
rector of the Office of Rural Health Policy of 
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the Health Resources and Services Administra-
tion’’; 
(B) by adding at the end the following: 
‘‘(6) ELIGIBLE
RURAL
HOSPITAL.—The term 
‘eligible rural hospital’ means— 
‘‘(A) a hospital (as defined in section 
1861(e) of the Social Security Act) that— 
‘‘(i) has fewer than 50 beds; and 
‘‘(ii) is located in a rural area (as de-
fined in section 1886(d)(2)(D) of such 
Act) or treated as being located in a rural 
area pursuant to section 1886(d)(8)(E) of 
such Act; 
‘‘(B) a community outpatient hospital (as 
defined in section 1861(iii) of such Act); or 
‘‘(C) a critical access hospital (as defined 
in 1861(mm) of such Act).’’; and 
(2) by adding at the end the following: 
‘‘(i) QUALITY
IMPROVEMENT
AND
COMPLIANCE 
GRANTS FOR ELIGIBLE RURAL HOSPITALS.— 
‘‘(1) GRANTS.—The Director may award grants 
to eligible rural hospitals to assist such hospitals 
with reporting on quality and to prepare such hos-
pitals to transition to value-based reimbursement. 
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‘‘(2) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible rural hos-
pital shall prepare and submit to the Secretary an 
application, at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including a description of— 
‘‘(A) how the eligible rural hospital will use 
the funds provided under the grant; and 
‘‘(B) how the project will be evaluated. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated for each fis-
cal 
year 
(beginning 
with 
fiscal 
year 
2017) 
$12,000,000 to carry out this subsection. 
‘‘(j) OUTREACH GRANTS FOR RURAL HOSPITAL POP-
ULATION HEALTH.— 
‘‘(1) GRANTS.—To help eligible rural hospitals 
meet a specific community need identified in a com-
munity needs assessment, the Director may award 
grants to eligible rural hospitals. 
‘‘(2) LIMITATION
ON
SIZE
OF
GRANTS
TO 
COHS.—The Secretary may not award more than 
$650,000 each fiscal year to a community outpatient 
hospital that is described in subsection (b)(6)(B). 
‘‘(3) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible rural hos-
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pital shall prepare and submit to the Secretary an 
application, at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including— 
‘‘(A) a description of how the eligible rural 
hospital will use the funds provided under the 
grant; 
‘‘(B) the results of community needs as-
sessment that identified the specific community 
need described in paragraph (1); and 
‘‘(C) a description of how the project will 
be evaluated. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated for each fis-
cal year (beginning with fiscal year 2017)— 
‘‘(A) $15,000,000 for grants to eligible 
rural hospitals described in paragraphs (A) and 
(C) of subsection (b)(6); and 
‘‘(B) $50,000,000 for grants to eligible 
rural hospitals described in paragraph (B) of 
such subsection. 
‘‘(k) EMS GRANT FUNDING.— 
‘‘(1) GRANTS.—The Director may award grants 
to eligible rural hospitals to develop and implement 
strategies to develop successful emergency medical 
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services programs that meet community needs, pro-
vide quality care, and address workforce and funding 
problems. 
‘‘(2) APPLICATIONS.—To be eligible to receive a 
grant under this subsection, an eligible rural hos-
pital shall prepare and submit to the Secretary an 
application, at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including a description of— 
‘‘(A) how the eligible rural hospital will use 
the funds provided under the grant; 
‘‘(B) any multistate collaborations involved 
in using such funds; and 
‘‘(C) how the use of funds will be evalu-
ated. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated for each fis-
cal 
year 
(beginning 
with 
fiscal 
year 
2017) 
$2,000,000 to carry out this subsection.’’. 
SEC. 403. CMMI DEMONSTRATION OF SHARED SAVINGS IN 
RURAL HOSPITALS. 
Section 1115A(b)(2)(B) of the Social Security Act 
(42 U.S.C. 1315a(b)(2)(B)) is amended by adding at the 
end the following: 
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‘‘(xxv) Promoting greater shared sav-
ings with hospitals located in rural areas, 
with critical access hospitals (as defined in 
section 1861(mm)(1)), and with commu-
nity outpatient hospitals (as defined in sec-
tion 1861(iii)(1)).’’. 
Æ 
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