‘‘(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 
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-
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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. 
‘‘(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, 
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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-
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: 
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‘‘(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 
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-
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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— 
‘‘(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 
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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 
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.’’. 
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TITLE IV—FUTURE OF RURAL 
HEALTH CARE 
SEC. 401. COMMUNITY OUTPATIENT HOSPITAL PROGRAM. 
(a) IN GENERAL.— 
(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, 2016, 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); 
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‘‘(B) provides emergency medical care and ob-
servation care available on a 24-hour basis; 
‘‘(C) with respect to continuous care for an in-
dividual, does not provide care over two 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; 
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‘‘(I) notifies the Secretary at such time and in 
such manner as the Secretary may require of the in-
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-
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ices from such community outpatient hospital to a hospital 
or critical access hospital.’’. 
(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— 
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(1) in subparagraph (B)(i)(I), by inserting ‘‘, 
subject to subparagraph (F),’’ before ‘‘is located’’; 
and 
(2) by adding at the end the following: 
‘‘(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 
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date that the Secretary first considered 
such community outpatient hospital to be a 
community outpatient hospital.’’. 
(c) CONFORMING AMENDMENTS.— 
(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: 
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‘‘(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 
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— 
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(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 
the Health Resources and Services Administra-
tion’’; and 
(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 section 1861(mm) of such Act).’’; and 
(2) by adding at the end the following: 
‘‘(i) QUALITY
IMPROVEMENT
AND
COMPLIANCE 
GRANTS FOR ELIGIBLE RURAL HOSPITALS.— 
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‘‘(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. 
‘‘(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 
2019) 
$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 
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$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-
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 2019)— 
‘‘(A) $15,000,000 for grants to eligible 
rural hospitals described in subparagraphs (A) 
and (C) of subsection (b)(6); and 
‘‘(B) $50,000,000 for grants to eligible 
rural hospitals described in subparagraph (B) 
of such subsection. 
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‘‘(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 
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 
2019) 
$2,000,000 to carry out this subsection.’’. 
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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: 
‘‘(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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