131
(c) TECHNICAL AMENDMENT.—Section 403(d)(2) of
BBRA (113 Stat. 1501A–371) is amended by striking
‘‘subsection (a)’’ and inserting ‘‘paragraph (1)’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to services furnished on or after Novem-
ber 29, 1999.
(2) BBRA AND
TECHNICAL
AMENDMENTS.—
The amendments made by subsections (a)(2)(B) and
(c) shall take effect as if included in the enactment
of section 403(d) of BBRA (113 Stat. 1501A–371).
SEC. 402. REVISION OF PAYMENT FOR PROFESSIONAL
SERVICES PROVIDED BY A CRITICAL ACCESS
HOSPITAL.
(a) IN GENERAL.—Section 1834(g)(2)(B) (42 U.S.C.
1395m(g)(2)(B)), as amended by section 403(d) of BBRA
(113 Stat. 1501A–371), is amended by inserting ‘‘120
percent of’’ after ‘‘hospital services,’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of section 403(d) of BBRA (113 Stat. 1501A–371).
132
SEC. 403. PERMITTING CRITICAL ACCESS HOSPITALS TO
OPERATE PPS EXEMPT DISTINCT PART PSY-
CHIATRIC AND REHABILITATION UNITS.
(a) CRITERIA FOR DESIGNATION AS A CRITICAL AC-
CESS HOSPITAL.—Section 1820(c)(2)(B)(iii) (42 U.S.C.
1395i–4(c)(2)(B)(iii)) is amended by inserting ‘‘excluding
any psychiatric or rehabilitation unit of the facility which
is a distinct part of the facility,’’ before ‘‘provides not’’.
(b) DEFINITION OF PPS EXEMPT DISTINCT PART
PSYCHIATRIC
AND
REHABILITATION
UNITS.—Section
1886(d)(1)(B) (42 U.S.C. 1395ww(d)(1)(B)) is amended
by inserting before the last sentence the following new sen-
tence: ‘‘In establishing such definition, the Secretary may
not exclude from such definition a psychiatric or rehabili-
tation unit of a critical access hospital which is a distinct
part of such hospital solely because such hospital is ex-
empt from the prospective payment system under this sec-
tion.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of enactment of
this Act.
133
Subtitle B—Medicare Dependent,
Small Rural Hospital Program
SEC. 411. MAKING THE MEDICARE DEPENDENT, SMALL
RURAL HOSPITAL PROGRAM PERMANENT.
(a) 
PAYMENT
METHODOLOGY.—Section
1886(d)(5)(G) 
(42 
U.S.C. 
1395ww(d)(5)(G)) 
is
amended—
(1) in clause (i), by striking ‘‘and before Octo-
ber 1, 2006,’’; and
(2) in clause (ii)(II), by striking ‘‘and before
October 1, 2006,’’.
(b) CONFORMING AMENDMENTS.—
(1) TARGET AMOUNT.—Section 1886(b)(3)(D)
(42 U.S.C. 1395ww(b)(3)(D)) is amended—
(A) in the matter preceding clause (i), by
striking ‘‘and before October 1, 2006,’’; and
(B) in clause (iv), by striking ‘‘through fis-
cal year 2005,’’ and inserting ‘‘or any subse-
quent fiscal year,’’.
(2) PERMITTING HOSPITALS TO DECLINE RE-
CLASSIFICATION.—Section 13501(e)(2) of the Omni-
bus Budget Reconciliation Act of 1993 (42 U.S.C.
1395ww note), as amended by section 404(b)(2) of
BBRA (113 Stat. 1501A–372), is amended by strik-
ing ‘‘or fiscal year 2000 through fiscal year 2005’’
134
and inserting ‘‘fiscal year 2000, or any subsequent
fiscal year,’’.
SEC. 412. OPTION TO BASE ELIGIBILITY FOR MEDICARE DE-
PENDENT, SMALL RURAL HOSPITAL PRO-
GRAM ON DISCHARGES DURING ANY OF THE
3 MOST RECENT AUDITED COST REPORTING
PERIODS.
(a) IN
GENERAL.—Section 1886(d)(5)(G)(iv)(IV)
(42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by in-
serting ‘‘, or any of the 3 most recent audited cost report-
ing periods,’’ after ‘‘1987’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to cost reporting peri-
ods beginning on or after the date of enactment of this
Act.
Subtitle C—Sole Community
Hospitals
SEC. 421. EXTENSION OF OPTION TO USE REBASED TARGET
AMOUNTS TO ALL SOLE COMMUNITY HOS-
PITALS.
(a) IN
GENERAL.—Section 1886(b)(3)(I)(i) (42
U.S.C. 1395ww(b)(3)(I)(i)) is amended—
(1) in the matter preceding subclause (I)—
(A) by striking ‘‘that for its cost reporting
period beginning during 1999 is paid on the
135
basis of the target amount applicable to the
hospital under subparagraph (C) and that
elects (in a form and manner determined by the
Secretary) this subparagraph to apply to the
hospital’’; and
(B) by striking ‘‘substituted for such tar-
get amount’’ and inserting ‘‘substituted, if such
substitution results in a greater payment under
this section for such hospital, for the amount
otherwise 
determined 
under 
subsection
(d)(5)(D)(i)’’;
(2) in subclause (I), by striking ‘‘target amount
otherwise applicable’’ and all that follows through
‘‘target amount’)’’ and inserting ‘‘the amount other-
wise applicable to the hospital under subsection
(d)(5)(D)(i) (referred to in this clause as the ‘sub-
section (d)(5)(D)(i) amount’)’’; and
(3) in each of subclauses (II) and (III), by
striking ‘‘subparagraph (C) target amount’’ and in-
serting ‘‘subsection (d)(5)(D)(i) amount’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of section 405 of BBRA (113 Stat. 1501A–372).
136
SEC. 422. DEEMING A CERTAIN HOSPITAL AS A SOLE COM-
MUNITY HOSPITAL.
Notwithstanding any other provision of law, for pur-
poses of discharges occurring on or after October 1, 2000,
the Greensville Memorial Hospital located in Emporia,
Virginia shall be deemed to have satisfied the travel and
time criteria under section 1886(d)(5)(D)(iii)(II) of the
Social Security Act (42 U.S.C. 1395ww(d)(5)(D)(iii)(II))
for classification as a sole community hospital.
Subtitle D—Other Rural Hospital
Provisions
SEC. 431. EXEMPTION OF HOSPITAL SWING-BED PROGRAM
FROM THE PPS FOR SKILLED NURSING FA-
CILITIES.
(a) EXEMPTION FOR MEDICARE SWING-BED HOS-
PITALS.—
(1) IN
GENERAL.—Section 1888(e)(7) (42
U.S.C. 1395yy(e)(7)(A)) is amended—
(A) in the heading, by striking ‘‘TRANSI-
TION’’ and inserting ‘‘EXEMPTION’’;
(B) by striking subparagraph (A) and in-
serting the following new subparagraph:
‘‘(A) IN GENERAL.—The prospective pay-
ment system under this subsection shall not
apply to items and services provided by a facil-
ity described in subparagraph (B).’’; and
137
(C) in subparagraph (B), by striking ‘‘, for
which payment’’ and all that follows before the
period.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall take effect as if included in
the enactment of section 4432 of BBA (111 Stat.
414).
(b) CHANGE IN EFFECTIVE DATE OF BBRA AMEND-
MENTS.—
(1) IN
GENERAL.—Section 408(c) of BBRA
(113 Stat. 1501A–375) is amended by striking ‘‘the
date that is’’ and all that follows and inserting
‘‘January 1, 2001.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect as if included in
the enactment of section 408 of BBRA (113 Stat.
1501A–375).
SEC. 432. PERMANENT GUARANTEE OF PRE-BBA PAYMENT
LEVELS FOR OUTPATIENT SERVICES FUR-
NISHED BY RURAL HOSPITALS.
(a) IN GENERAL.—Section 1833(t)(7)(D), as amend-
ed by section 203, is amended to read as follows:
‘‘(D) HOLD
HARMLESS
PROVISIONS
FOR
SMALL
RURAL
AND
CANCER
HOSPITALS.—In
the case of a hospital located in a rural area
138
and that has not more than 100 beds or a hos-
pital described in section 1886(d)(1)(B)(v), for
covered OPD services for which the PPS
amount is less than the pre-BBA amount, the
amount of payment under this subsection shall
be increased by the amount of such dif-
ference.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of section 202 of BBRA (111 Stat. 1501A–342).
SEC. 433. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY
SERVICES.
(a) IN
GENERAL.—Section 1848(i) (42 U.S.C.
1395w–4(i)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) TREATMENT OF CERTAIN PHYSICIAN PA-
THOLOGY SERVICES.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law, when an independent
laboratory furnishes the technical component of
a physician pathology service with respect to a
fee-for-service medicare beneficiary who is a pa-
tient of a grandfathered hospital, such compo-
nent shall be treated as a service for which pay-
139
ment shall be made to the laboratory under this
section and not as—
‘‘(i) an inpatient hospital service for
which payment is made to the hospital
under section 1886(d); or
‘‘(ii) a hospital outpatient service for
which payment is made to the hospital
under the prospective payment system
under section 1834(t).
‘‘(B) DEFINITIONS.—In this paragraph:
‘‘(i) GRANDFATHERED
HOSPITAL.—
The term ‘grandfathered hospital’ means a
hospital that had an arrangement with an
independent laboratory—
‘‘(I) that was in effect as of July
22, 1999; and
‘‘(II) under which the laboratory
furnished the technical component of
physician pathology services with re-
spect to patients of the hospital and
submitted a claim for payment for
such component to a carrier with a
contract under section 1842 (and not
to the hospital).
140
‘‘(ii) 
FEE-FOR-SERVICE
MEDICARE
BENEFICIARY.—The term ‘fee-for-service
medicare beneficiary’ means an individual
who is not enrolled—
‘‘(I) in a Medicare+Choice plan
under part C;
‘‘(II) in a plan offered by an eli-
gible organization under section 1876;
‘‘(III) with a PACE provider
under section 1894;
‘‘(IV) in a medicare managed
care demonstration project; or
‘‘(V) in the case of a service fur-
nished to an individual on an out-
patient basis, in a health care prepay-
ment 
plan 
under 
section
1833(a)(1)(A).’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to services furnished on or after
January 1, 2001.
141
Subtitle E—Other Rural Provisions
SEC. 441. REVISION OF BONUS PAYMENTS FOR SERVICES
FURNISHED 
IN 
HEALTH 
PROFESSIONAL
SHORTAGE AREAS.
(a) EXPANSION OF BONUS PAYMENTS TO INCLUDE
PHYSICIAN ASSISTANT AND NURSE PRACTITIONER SERV-
ICES.—Section 
1833(m) 
(42 
U.S.C. 
1395l(m)) 
is
amended—
(1) by inserting ‘‘(or services furnished by a
physician assistant or nurse practitioner that would
be physicians’ services if furnished by a physician)’’
after ‘‘physicians’ services’’;
(2) by inserting ‘‘, physician assistant (in the
case of a physician assistant described in subpara-
graph (C)(ii) of section 1842(b)(6)), or nurse practi-
tioner’’ after ‘‘physician’’; and
(3) 
by 
striking 
‘‘clause 
(A) 
of 
section
1842(b)(6)’’ and inserting ‘‘subparagraphs (A) and
(C)(i) of such section’’.
(b) ELIMINATION
OF
REQUIREMENT
TO
MAKE
BONUS
PAYMENTS
ON
MONTHLY
OR
QUARTERLY
BASIS.—Section 1833(m) (42 U.S.C. 1395l(m)) is amend-
ed by striking ‘‘(on a monthly or quarterly basis)’’.
(c) EFFECTIVE DATES.—
142
(1) IN GENERAL.—The amendments made by
subsection (a) shall apply to services furnished on or
after July 1, 2001.
(2) MONTHLY OR QUARTERLY PAYMENTS.—The
amendment made by subsection (b) shall apply to
services furnished on or after the first day of the
first calendar quarter beginning at least 240 days
after the date of enactment of this Act.
SEC. 442. PROVIDER-BASED RURAL HEALTH CLINIC CAP
EXEMPTION.
(a) IN GENERAL.—The matter in section 1833(f) (42
U.S.C. 1395l(f)) preceding paragraph (1) is amended by
striking ‘‘with less than 50 beds’’ and inserting ‘‘with an
average daily patient census that does not exceed 50’’.
(b) EFFECTIVE DATE.—The amendment made by
subparagraph (A) shall apply to services furnished on or
after January 1, 2001.
SEC. 443. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT
SERVICES.
(a) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT
SERVICES.—Section 
1842(b)(6)(C) 
(42 
U.S.C.
1395u(b)(6)(C)) is amended by striking ‘‘for such services
provided before January 1, 2003,’’.
143
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of enactment
of this Act.
SEC. 444. EXCLUSION OF CLINICAL SOCIAL WORKER SERV-
ICES AND SERVICES PERFORMED UNDER A
CONTRACT WITH A RURAL HEALTH CLINIC
OR FEDERALLY QUALIFIED HEALTH CENTER
FROM THE PPS FOR SNFs.
(a) IN GENERAL.—Section 1888(e)(2)(A)(ii) (42
U.S.C. 1395yy(e)(2)(A)(ii)) is amended—
(1) in the first sentence, by inserting ‘‘clinical
social worker services,’’ after ‘‘qualified psychologist
services,’’; and
(2) by inserting after the first sentence the fol-
lowing: ‘‘Services described in this clause also in-
clude services that are provided by a physician, a
physician assistant, a nurse practitioner, a certified
nurse midwife, a qualified psychologist, or a clinical
social worker who is employed, or otherwise under
contract, with a rural health clinic or a Federally
qualified health center.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to services provided on or after
the date which is 60 days after the date of enactment of
this Act.
144
SEC. 445. COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES PROVIDED IN RURAL HEALTH
CLINICS.
(a) COVERAGE OF MARRIAGE AND FAMILY THERA-
PIST SERVICES.—
(1) PROVISION OF SERVICES IN RURAL HEALTH
CLINICS.—Section 
1861(aa)(1)(B) 
(42 
U.S.C.
1395x(aa)(1)(B)) is amended by striking ‘‘Sec-
retary)’’ and inserting ‘‘Secretary), by a marriage
and family therapist (as defined in subsection
(xx)(2)),’’.
(2) MARRIAGE AND FAMILY THERAPIST SERV-
ICES DEFINED.—Section 1861 (42 U.S.C. 1395x),
as amended by section 232, 233(a), 234(b), and
250(b), is further amended by adding at the end the
following new subsection:
‘‘Marriage and Family Therapist Services
‘‘(yy)(1) The term ‘marriage and family therapist
services’ means services performed by a marriage and
family therapist (as defined in paragraph (2)) for the diag-
nosis and treatment of mental illnesses, which the mar-
riage and family therapist is legally authorized to perform
under State law (or the State regulatory mechanism pro-
vided by State law) of the State in which such services
are performed, as would otherwise be covered if furnished
by a physician or as an incident to a physician’s profes-
145
sional service, but only if no facility or other provider
charges or is paid any amounts with respect to the fur-
nishing of such services.
‘‘(2) The term ‘marriage and family therapist’ means
an individual who—
‘‘(A) possesses a master’s or doctoral degree
which qualifies for licensure or certification as a
marriage and family therapist pursuant to State
law;
‘‘(B) after obtaining such degree has performed
at least 2 years of clinical supervised experience in
marriage and family therapy; and
‘‘(C)(i) is licensed or certified as a marriage
and family therapist in the State in which marriage
and family therapist services are performed; or
‘‘(ii) in the case of a State that does not pro-
vide for such licensure or certification, meets such
other criteria as the Secretary establishes.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to services furnished
on or after January 1, 2002.
146
SEC. 446. CAPITAL INFRASTRUCTURE REVOLVING LOAN
PROGRAM.
(a) IN GENERAL.—Part A of title XVI of the Public
Health Service Act (42 U.S.C. 300q et seq.) is amended
by adding at the end the following new section:
‘‘CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM
‘‘SEC. 1603. (a) AUTHORITY TO MAKE AND GUAR-
ANTEE LOANS.—
‘‘(1) AUTHORITY TO MAKE LOANS.—The Sec-
retary may make loans from the fund established
under section 1602(d) to any rural entity for
projects for capital improvements, including—
‘‘(A) the acquisition of land necessary for
the capital improvements;
‘‘(B) the renovation or modernization of
any building;
‘‘(C) the acquisition or repair of fixed or
major movable equipment; and
‘‘(D) such other project expenses as the
Secretary determines appropriate.
‘‘(2) AUTHORITY TO GUARANTEE LOANS.—
‘‘(A) IN
GENERAL.—The Secretary may
guarantee the payment of principal and interest
for loans to rural entities for projects for cap-
ital improvements described in paragraph (1) to
non-Federal lenders.
147
‘‘(B) INTEREST SUBSIDIES.—In the case
of a guarantee of any loan to a rural entity
under subparagraph (A)(i), the Secretary may
pay to the holder of such loan and for and on
behalf of the project for which the loan was
made, amounts sufficient to reduce by not more
than 3 percentage points of the net effective in-
terest rate otherwise payable on such loan.
‘‘(b) AMOUNT OF LOAN.—The principal amount of
a loan directly made or guaranteed under subsection (a)
for a project for capital improvement may not exceed
$5,000,000.
‘‘(c) FUNDING LIMITATIONS.—
‘‘(1) GOVERNMENT
CREDIT
SUBSIDY
EXPO-
SURE.—The total of the Government credit subsidy
exposure under the Credit Reform Act of 1990 scor-
ing protocol with respect to the loans outstanding at
any time with respect to which guarantees have been
issued, or which have been directly made, under sub-
section (a) may not exceed $50,000,000 per year.
‘‘(2) TOTAL AMOUNTS.—Subject to paragraph
(1), the total of the principal amount of all loans di-
rectly made or guaranteed under subsection (a) may
not exceed $250,000,000 per year.
‘‘(d) ADDITIONAL ASSISTANCE.—
148
‘‘(1) NONREPAYABLE
GRANTS.—Subject to
paragraph (2), the Secretary may make a grant to
a rural entity, in an amount not to exceed $50,000,
for purposes of capital assessment and business
planning.
‘‘(2) LIMITATION.—The cumulative total of
grants awarded under this subsection may not ex-
ceed $2,500,000 per year.
‘‘(e) TERMINATION OF AUTHORITY.—The Secretary
may not directly make or guarantee any loan under sub-
section (a) or make a grant under subsection (d) after
September 30, 2005.’’.
(b) RURAL ENTITY DEFINED.—Section 1624 of the
Public Health Service Act (42 U.S.C. 300s–3) is amended
by adding at the end the following new paragraph:
‘‘(15)(A) The term ‘rural entity’ includes—
‘‘(i) a rural health clinic, as defined in sec-
tion 1861(aa)(2) of the Social Security Act;
‘‘(ii) any medical facility with at least 1,
but less than 50, beds that is located in—
‘‘(I) a county that is not part of a
metropolitan statistical area; or
‘‘(II) a rural census tract of a metro-
politan statistical area (as determined
under the most recent modification of the
149
Goldsmith Modification, originally pub-
lished in the Federal Register on February
27, 1992 (57 Fed. Reg. 6725));
‘‘(iii) a hospital that is classified as a
rural, regional, or national referral center under
section 1886(d)(5)(C) of the Social Security
Act; and
‘‘(iv) a hospital that is a sole community
hospital 
(as 
defined 
in 
section
1886(d)(5)(D)(iii) of the Social Security Act).
‘‘(B) For purposes of subparagraph (A), the
fact that a clinic, facility, or hospital has been geo-
graphically reclassified under the medicare program
under title XVIII of the Social Security Act shall not
preclude a hospital from being considered a rural en-
tity under clause (i) or (ii) of subparagraph (A).’’.
(c) CONFORMING AMENDMENTS.—Section 1602 of
the Public Health Service Act (42 U.S.C. 300q–2) is
amended—
(1) in subsection (b)(2)(D), by inserting ‘‘or
1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’; and
(2) in subsection (d)—
(A) in paragraph (1)(C), by striking ‘‘sec-
tion 1601(a)(2)(B)’’ and inserting ‘‘sections
1601(a)(2)(B) and 1603(a)(2)(B)’’; and
150
(B) in paragraph (2)(A), by inserting ‘‘or
1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’.
SEC. 447. GRANTS FOR UPGRADING DATA SYSTEMS.
(a) IN GENERAL.—Part B of title XVI of the Public
Health Service Act (42 U.S.C. 300r et seq.) is amended
by adding at the end the following new section:
‘‘GRANTS FOR UPGRADING DATA SYSTEMS
‘‘SEC. 1611. (a) GRANTS TO HOSPITALS.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a program to make grants to hospitals that have
submitted applications in accordance with subsection
(c) to assist eligible small rural hospitals in offset-
ting the costs of establishing data systems—
‘‘(A) required to—
‘‘(i) implement prospective payment
systems under title XVIII of the Social Se-
curity Act; and
‘‘(ii) comply with the administrative
simplification requirements under part C
of title XI of such Act; or
‘‘(B) to reduce medication errors.
‘‘(2) COSTS.—For purposes of paragraph (1),
the term ‘costs’ shall include costs associated with—
‘‘(A) purchasing computer software and
hardware; and
151
‘‘(B) providing education and training to
hospital staff on computer information systems.
‘‘(3) LIMITATION.—A hospital that has received
a grant under section 142 of the Medicare, Med-
icaid, and SCHIP Balanced Budget Refinement Act
of 2000 is not eligible to receive a grant under this
section.
‘‘(b) ELIGIBLE
SMALL
RURAL
HOSPITAL
DE-
FINED.—For purposes of this section, the term ‘eligible
small rural hospital’ means a non-Federal, short-term gen-
eral acute care hospital that—
‘‘(1) is located in a rural area, as defined for
purposes of section 1886(d) of the Social Security
Act; and
‘‘(2) has less than 50 beds.
‘‘(c) APPLICATION.—A hospital seeking a grant
under this section shall submit an application to the Sec-
retary at such time and in such form and manner as the
Secretary specifies.
‘‘(d) AMOUNT OF GRANT.—A grant to a hospital
under this section may not exceed $100,000.
‘‘(e) REPORTS.—
‘‘(1) INFORMATION.—A hospital receiving a
grant under this section shall furnish the Secretary
152
with such information as the Secretary may require
to—
‘‘(A) evaluate the project for which the
grant is made; and
‘‘(B) ensure that the grant is expended for
the purposes for which it is made.
‘‘(2) TIMING OF SUBMISSION.—
‘‘(A) INTERIM
REPORTS.—The Secretary
shall report to the Committee on Commerce of
the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pen-
sions of the Senate at least annually on the
grant program established under this section,
including in such report information on the
number of grants made, the nature of the
projects involved, the geographic distribution of
grant recipients, and such other matters as the
Secretary deems appropriate.
‘‘(B) FINAL REPORT.—The Secretary shall
submit a final report to such committees not
later than 180 days after the completion of all
of the projects for which a grant is made under
this section.
153
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as may be
necessary for grants under this section.’’.
(b) CONFORMING AMENDMENT.—Section 1820(g)(3)
(42 U.S.C. 1395i–4(g)(3)) is repealed.
SEC. 448. RELIEF FOR FINANCIALLY DISTRESSED RURAL
HOSPITALS.
Title III of the Public Health Service Act (42 U.S.C.
241 et seq.) is amended by inserting after section 330D
the following new section:
‘‘SEC. 330E. RELIEF FOR FINANCIALLY DISTRESSED RURAL
HOSPITALS.
‘‘(a) GRANTS TO SMALL RURAL HOSPITALS.—The
Secretary, acting through the Health Resources and Serv-
ices Administration, may award grants to eligible small
rural hospitals that have submitted applications in accord-
ance with subsection (c) to provide relief for financial dis-
tress that has a negative impact on access to care for
beneficiaries under the medicare program under title
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)
that reside in a rural area.
‘‘(b) ELIGIBLE
SMALL
RURAL
HOSPITAL
DE-
FINED.—For purposes of this paragraph, the term ‘eligi-
ble small rural hospital’ means a non-Federal, short-term
general acute care hospital that—
154
‘‘(1) is located in a rural area (as defined for
purposes of section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d))); and
‘‘(2) has less than 50 beds.
‘‘(c) APPLICATION AND APPROVAL.—
‘‘(1) APPLICATION.—Each eligible small rural
hospital that desires to receive a grant under this
paragraph shall submit an application to the Sec-
retary, at such time, in such form and manner, and
accompanied by such additional information as the
Secretary may reasonably require.
‘‘(2) APPROVAL.—The Secretary shall approve
applications submitted under paragraph (1) based
on a methodology developed by the Secretary in con-
sultation with the Office of Rural Health Policy.
‘‘(d) AMOUNT OF GRANT.—A grant to an eligible
small rural hospital under this paragraph may not exceed
$250,000.
‘‘(e) USE OF FUNDS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an eligible small rural hospital may use
amounts received under a grant under this section to
temporarily offset financial operating losses, with
emphasis on those losses attributable to reimburse-
ment formula changes that resulted from the Bal-
155
anced Budget Act of 1997, in order to ensure con-
tinued operation and short-term sustainability or to
address emergency physical capital needs that might
otherwise result in closure.
‘‘(2) PROHIBITED USES.—A hospital may not
use funds received under a grant under this section
for new construction, the purchase of medical equip-
ment, or for computer software or hardware.
‘‘(f) REPORT.—
‘‘(1) INFORMATION.—A hospital receiving a
grant under this section shall furnish the Secretary
with such information as the Secretary may require
to evaluate the project for which the grant is made
and to ensure that the grant is expended for the
purposes for which it is made.
‘‘(2) REPORTING.—
‘‘(A) ANNUAL REPORTS.—
‘‘(i) IN
GENERAL.—Not later than
December 31 of each year (beginning with
2001), the Secretary shall submit a report
to the committees of jurisdiction of the
House of Representatives and the Senate
on the grant program established under
this section.
156
‘‘(ii) INFORMATION
INCLUDED.—The
report submitted under clause (i) shall in-
clude information on the number of grants
made, the nature of the projects involved,
the geographic distribution of grant recipi-
ents, and such other information as the
Secretary determines is appropriate.
‘‘(B) FINAL REPORT.—Not later than 180
days after the completion of all of the projects
for which a grant is made under this section,
the Secretary shall submit a final report on the
grant program established under this section to
the committees described in subparagraph (A).
‘‘(g) APPROPRIATIONS.—There are appropriated, out
of any money in the Treasury not otherwise appropriated,
for making grants under this section $25,000,000 for each
of the fiscal years 2001 through 2005.’’.
SEC. 449. REFINEMENT OF MEDICARE REIMBURSEMENT
FOR TELEHEALTH SERVICES.
(a) REVISION OF TELEHEALTH PAYMENT METHOD-
OLOGY AND ELIMINATION OF FEE-SHARING REQUIRE-
MENT.—Section 4206(b) of the Balanced Budget Act of
1997 (42 U.S.C. 1395l note) is amended to read as fol-
lows:
157
‘‘(b) METHODOLOGY FOR DETERMINING AMOUNT OF
PAYMENTS.—
‘‘(1) IN
GENERAL.—The Secretary shall pay
to—
‘‘(A) the physician or practitioner at a dis-
tant site that provides an item or service under
subsection (a) an amount equal to the amount
that such physician or provider would have been
paid had the item or service been provided with-
out the use of a telecommunications system;
and
‘‘(B) the originating site a facility fee for
facility services furnished in connection with
such item or service.
‘‘(2) APPLICATION
OF
PART
B
COINSURANCE
AND DEDUCTIBLE.—Any payment made under this
section shall be subject to the coinsurance and de-
ductible requirements under subsections (a)(1) and
(b) of section 1833 of the Social Security Act (42
U.S.C. 1395l).
‘‘(3) DEFINITIONS.—In this subsection:
‘‘(A) DISTANT
SITE.—The term ‘distant
site’ means the site at which the physician or
practitioner is located at the time the item or
158
service is provided via a telecommunications
system.
‘‘(B) FACILITY
FEE.—The term ‘facility
fee’ means an amount equal to—
‘‘(i) for 2000 and 2001, $20; and
‘‘(ii) for a subsequent year, the facil-
ity fee under this subsection for the pre-
vious year increased by the percentage in-
crease in the MEI (as defined in section
1842(i)(3)) for such subsequent year.
‘‘(C) ORIGINATING SITE.—
‘‘(i) IN GENERAL.—The term ‘origi-
nating site’ means the site described in
clause (ii) at which the eligible telehealth
beneficiary under the medicare program is
located at the time the item or service is
provided via a telecommunications system.
‘‘(ii) SITES
DESCRIBED.—The sites
described in this paragraph are as follows:
‘‘(I) On or before January 1,
2002, the office of a physician or a
practitioner, a critical access hospital,
a rural health clinic, and a Federally
qualified health center.
159
‘‘(II) On or before January 1,
2003, a hospital, a skilled nursing fa-
cility, a comprehensive outpatient re-
habilitation facility, a renal dialysis
facility, an ambulatory surgical center,
an Indian Health Service facility, and
a community mental health center.’’.
(b) ELIMINATION OF REQUIREMENT FOR TELEPRE-
SENTER.—Section 4206 of the Balanced Budget Act of
1997 (42 U.S.C. 1395l note) is amended—
(1) in subsection (a), by striking ‘‘, notwith-
standing that the individual physician’’ and all that
follows before the period at the end; and
(2) by adding at the end the following new sub-
section:
‘‘(e) TELEPRESENTER NOT REQUIRED.—Nothing in
this section shall be construed as requiring an eligible tele-
health beneficiary to be presented by a physician or practi-
tioner for the provision of an item or service via a tele-
communications system.’’.
(c) 
REIMBURSEMENT
FOR
MEDICARE
BENE-
FICIARIES WHO DO NOT RESIDE IN A HPSA.—Section
4206(a) of the Balanced Budget Act of 1997 (42 U.S.C.
1395l note), as amended by subsection (b), is amended—
160
(1) by striking ‘‘IN GENERAL.—Not later than’’
and inserting the following: ‘‘TELEHEALTH SERV-
ICES REIMBURSED.—
‘‘(1) IN GENERAL.—Not later than’’;
(2) by striking ‘‘furnishing a service for which
payment’’ and all that follows before the period and
inserting ‘‘to an eligible telehealth beneficiary’’; and
(3) by adding at the end the following new
paragraph:
‘‘(2) ELIGIBLE TELEHEALTH BENEFICIARY DE-
FINED.—In this section, the term ‘eligible telehealth
beneficiary’ means a beneficiary under the medicare
program under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) that resides in—
‘‘(A) an area that is designated as a health
professional 
shortage 
area 
under 
section
332(a)(1)(A) of the Public Health Service Act
(42 U.S.C. 254e(a)(1)(A));
‘‘(B) a county that is not included in a
Metropolitan Statistical Area; or
‘‘(C) an inner-city area that is medically
underserved (as defined in section 330(b)(3) of
the Public Health Service Act (42 U.S.C.
254b(b)(3))).’’.
177
‘‘(C) GREATER UNIFORMITY IN CLINICAL
FEATURES AMONG SITES.—Each project shall
implement for each site—
‘‘(i) protocols for periodic telephonic
contact with enrollees based on—
‘‘(I) the results of such standard-
ized written health assessment; and
‘‘(II) the application of appro-
priate care planning approaches;
‘‘(ii) disease management programs
for targeted diseases (such as congestive
heart failure, arthritis, diabetes, and hy-
pertension) that are highly prevalent in the
enrolled populations;
‘‘(iii) systems and protocols to track
enrollees through hospitalizations, includ-
ing pre-admission planning, concurrent
management 
during 
inpatient 
hospital
stays, and post-discharge assessment, plan-
ning, and follow-up; and
‘‘(iv) standardized patient educational
materials for specified diseases and health
conditions.