I
106TH CONGRESS
1ST SESSION
H. R. 1344
To promote and improve access to health care services in rural areas.
IN THE HOUSE OF REPRESENTATIVES
MARCH 25, 1999
Mr. NUSSLE (for himself, Mr. MCINTYRE, Mrs. EMERSON, Mr. STENHOLM,
Mr. BEREUTER, Mr. KIND, Mr. MORAN of Kansas, Mr. OBERSTAR, Mr.
THORNBERRY, Mr. STUPAK, Mr. HILL of Montana, Mr. DEFAZIO, Mr.
PETERSON of Pennsylvania, Mr. HILLIARD, Mr. BERRY, Mr. HERGER,
Mr. LEACH, Mr. LATHAM, Mr. MCHUGH, Mr. NEY, Mr. NORWOOD, Mr.
MASCARA, Mr. WALSH, Mr. FROST, Mr. BOSWELL, Mr. SKELTON, Mr.
BAIRD, Mr. FALEOMAVAEGA, Mr. PHELPS, Mr. BARRETT of Nebraska,
Mr. BOUCHER, and Mr. RAHALL) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Commerce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To promote and improve access to health care services in
rural areas.
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
‘‘Triple-A Rural Health Improvement Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I—PROMOTING ACCESS TO HEALTH CARE SERVICES IN
RURAL AREAS UNDER THE MEDICARE PROGRAM
Subtitle A—Hospital-Related Payment Provisions
Sec. 101. Establishing payment floor for medicare hospital outpatient prospec-
tive payment system.
Sec. 102. Repeal of restriction on medicare payment for certain hospital dis-
charges to post-acute care.
Sec. 103. Sole community hospitals.
Sec. 104. Critical access hospitals.
Sec. 105. Graduate medical education technical amendments.
Sec. 106. Medicare-dependent, small rural hospitals.
Sec. 107. Geographic reclassification for purposes of DSH payments.
Sec. 108. Revision of guidelines for geographic reclassification by wage index.
Sec. 109. Hospital geographic reclassification for labor costs for all items and
services reimbursed under prospective payment systems.
Subtitle B—Medicare+Choice
Sec. 111. Payments to Medicare+Choice organizations.
Sec. 112. Repeal of phase out of medicare reasonable cost reimbursement con-
tracts.
Sec. 113. Medicare+Choice rural demonstration project.
Subtitle C—General Payment Provisions
Sec. 121. Direct medicare payment for physician assistants, nurse practitioners,
and clinical nurse specialists practicing in underserved rural
areas.
Sec. 122. Coverage of qualified mental health professional services under medi-
care.
Sec. 123. Medicare waivers for providers in rural areas.
Sec. 124. Safe harbor under the anti-kickback statute for hospital restocking of
certain ambulance drugs and supplies.
TITLE II—PROMOTING ACCESS TO HEALTH CARE SERVICES IN
RURAL AREAS UNDER THE MEDICAID PROGRAM
Sec. 201. Continuation of pre-BBA medicaid reimbursement rules for federally
qualified health centers and rural health clinics.
Sec. 202. Medicaid coverage of physicians’ assistants.
TITLE III—PROMOTING ACCESS TO HEALTH CARE SERVICES IN
RURAL AREAS UNDER THE INTERNAL REVENUE CODE
Sec. 301. Exclusion of certain amounts received under the National Health
Service Corps Scholarship Program.
Sec. 302. Issuance of tax-exempt bonds by organizations providing rescue and
emergency medical services.
Sec. 303. Bank deductibility of small, tax-exempt debts.
TITLE IV—ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF
HEALTH PROFESSIONALS IN RURAL AREAS
Sec. 401. Requirement for rural impact Statements for health care regulations.
Sec. 402. Health professional shortage areas.
Sec. 403. Access to data.
Sec. 404. Designation of underserved areas under health care contracts admin-
istered by the Office of Personnel Management.
Sec. 405. Revision of methodology for designation of health professional short-
age areas.
Sec. 406. Sense of Congress regarding the reserve corps of the commissioned
corps of the public health service.
TITLE V—TELEMEDICINE
Subtitle A—Improvements to the Medicare Program
Sec. 501. Improvement of telehealth services.
Sec. 502. Joint working group on telehealth.
Subtitle B—Development of Telehealth Networks
Sec. 511. Development.
Sec. 512. Administration.
Sec. 513. Guidelines.
Sec. 514. Authorization of appropriations.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Rural communities have long had great dif-
ficulty recruiting and retaining health care providers
to serve the needs of their residents.
(2) Despite great increases in the production of
providers in this country (the number of individuals
per physician fell from 724 in 1965 to 375 in 1995),
individuals living in rural areas have not shared eq-
uitably in the benefits of this expansion.
(3) Over 51,000,000 Americans live in rural
areas, making up approximately 20 percent of the
population. Further, 22,000,000 rural Americans
live in a federally designated Health Professional
Shortage Area.
(4) The following conditions are characteristic
of rural populations:
(A) The relative lack of health care re-
sources as compared to urban areas.
(B) The uneven pattern of disease burden.
(C) The idiosyncratic distribution of pro-
grams and resources resulting from policy vari-
ations across the nation.
(5) Of the non-metropolitan counties in the
United States, 20 percent are considered frontier
counties, with six or fewer people per square mile.
Seven million Americans live in frontier areas.
TITLE 
I—PROMOTING 
ACCESS
TO HEALTH CARE SERVICES
IN RURAL AREAS UNDER THE
MEDICARE PROGRAM
Subtitle A—Hospital-Related
Payment Provisions
SEC. 101. ESTABLISHING PAYMENT FLOOR FOR MEDICARE
HOSPITAL OUTPATIENT PROSPECTIVE PAY-
MENT SYSTEM.
(a) IN GENERAL.—Section 1833(t)(1) of the Social
Security Act (42 U.S.C. 1395l(t)(1)) is amended—
(1) in subparagraph (B), by striking ‘‘For pur-
poses of this’’ and inserting ‘‘Subject to subpara-
graph (C), for purposes of this’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) EXCLUSION FOR SERVICES FURNISHED BY
SMALL RURAL PROVIDERS.—Such term does not in-
clude services furnished by any of the following:
‘‘(i) A medicare-dependent, small rural
hospital, 
as 
defined 
in 
section
1886(d)(5)(G)(iv).
‘‘(ii) A critical access hospital, as defined
in section 1861(mm)(1).
‘‘(iii) A sole community hospital, as de-
fined in section 1886(d)(5)(D)(iii).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to payment for covered OPD serv-
ices furnished on or after January 1, 2000.
SEC. 102. REPEAL OF RESTRICTION ON MEDICARE PAY-
MENT FOR CERTAIN HOSPITAL DISCHARGES
TO POST-ACUTE CARE.
(a) IN GENERAL.—Section 1886(d)(5) of the Social
Security Act (42 U.S.C. 1395ww(d)(5)) is amended—
(1) in subparagraph (I)(ii), by striking ‘‘not
taking in account the effect of subparagraph (J),’’,
and
(2) by striking subparagraph (J).
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to discharges occurring on or after
January 1, 2000.
SEC. 103. SOLE COMMUNITY HOSPITALS.
(a) IN GENERAL.—Section 1886(b)(3)(C) of the So-
cial Security Act (42 U.S.C. 1395ww(b)(3)(C)) is
amended—
(1) in clause (i), by redesignating subclauses (I)
and (II) as items (aa) and (bb), respectively;
(2) by redesignating clauses (i), (ii), (iii), and
(iv) as subclauses (I), (II), (III), and (IV), respec-
tively;
(3) by striking ‘‘(C) In’’ and inserting ‘‘(C)(i)
Subject to clause (ii), in’’; and
(4) by striking the last sentence and inserting
the following new clause:
‘‘(ii)(I) There shall be substituted for the base cost
reporting period described in clause (i)(I) a hospital’s cost
reporting period (if any) beginning during fiscal year 1987
if such substitution results in an increase in the target
amount for the hospital.
‘‘(II) Beginning with discharges occurring in cost re-
porting periods beginning in fiscal year 2000, there shall
be substituted for the base cost reporting period described
in clause (i)(I) either—
‘‘(aa) the allowable operating costs of inpatient
hospital services (as defined in subsection (a)(4))
recognized under this title for the hospital’s cost re-
porting period (if any) beginning during fiscal year
1995 increased (in a compounded manner) by the
applicable percentage increases applied to the hos-
pital under this paragraph for discharges occurring
in fiscal years 1996, 1997, 1998, and 1999, or
‘‘(bb) the allowable operating costs of inpatient
hospital services (as defined in subsection (a)(4))
recognized under this title for the hospital’s cost re-
porting period (if any) beginning during fiscal year
1996 increased (in a compounded manner) by the
applicable percentage increases applied to the hos-
pital under this paragraph for discharges occurring
in fiscal years 1997, 1998, and 1999,
if such substitution results in an increase in the target
amount for the hospital.’’.
(b) ELIGIBILITY FOR GEOGRAPHIC RECLASSIFICA-
TION WITHOUT REGARD TO WAGE INDEX THRESHOLD.—
(1) IN GENERAL.—Section 1886(d)(10)(D)(iii)
of such Act (42 U.S.C. 1395ww(d)(10)(D)(iii)) is
amended by inserting ‘‘or a sole community hospital
under paragraph (5)(D)’’ after ‘‘a rural referral cen-
ter under paragraph (5)(C)’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on January 1,
2000, and apply with respect to applications sub-
mitted for geographic reclassification for cost report-
ing periods beginning on or after such date.
SEC. 104. CRITICAL ACCESS HOSPITALS.
(a) CONVERSION OF RECENTLY CLOSED HOSPITALS
TO CRITICAL ACCESS HOSPITALS.—
(1) IN
GENERAL.—Section 1820(c)(2) of the
Social Security Act (42 U.S.C. 1395i–4(c)(2)) is
amended by adding at the end the following new
subparagraph:
‘‘(C) RECENTLY
CLOSED
FACILITIES.—A
State may designate a facility as a critical ac-
cess hospital if the facility—
‘‘(i) within the 3-year period ending
on 
the 
date 
of 
enactment 
of 
this
subparagraph—
‘‘(I) ceased operations; or
‘‘(II) was a nonprofit or public
hospital that was downsized to a clin-
ic; and
‘‘(ii) would, after being designated as
a critical access hospital, meet the require-
ments of subparagraph (B).’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of en-
actment of this Act.
(b) ALL-INCLUSIVE PAYMENT OPTION
FOR OUT-
PATIENT CRITICAL ACCESS HOSPITAL SERVICES.—
(1) IN GENERAL.—Section 1834(g) of the So-
cial Security Act (42 U.S.C. 1395m(g)) is amended
to read as follows:
‘‘(g) PAYMENT FOR OUTPATIENT CRITICAL ACCESS
HOSPITAL SERVICES.—The amount of payment under
this part for outpatient critical access hospital services is
the amount determined under one of the two following
methods, as elected by the critical access hospital:
‘‘(1) REASONABLE COSTS.—There shall be paid
amounts equal to the reasonable costs of the critical
access hospital in providing such services.
‘‘(2) ALL-INCLUSIVE
RATE.—With respect to
both facility services and professional medical serv-
ices, there shall be paid amounts equal to the costs
which are reasonable and related to the cost of fur-
nishing such services or which are based on such
other tests of reasonableness as the Secretary may
prescribe in regulations, less the amount the hospital
may charge as described in clause (i) of section
1866(a)(2)(A), but in no case may the payment for
such services (other than for items and services de-
scribed in section 1861(s)(10)(A)) exceed 80 percent
of such costs.
The amount of payment shall be determined under either
method without regard to the amount of the customary
or other charge.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect as if included in
the enactment of the Balanced Budget Act of 1997.
(c) ELIGIBILITY FOR PAYMENTS UNDER THE MED-
ICAID PROGRAM.—
(1) IN GENERAL.—Section 1905(a) of the So-
cial 
Security 
Act 
(42 
U.S.C. 
1396d(a)) 
is
amended—
(A) by striking ‘‘and’’ at the end of para-
graph (26);
(B) by redesignating paragraph (27) as
paragraph (28); and
(C) by inserting after paragraph (26) the
following new paragraph:
‘‘(27) services furnished by a critical access
hospital (as defined section 1861(mm)(1); and’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) apply with respect to items and
services furnished on or after January 1, 2000.
(d) ACCREDITATION.—The last sentence of section
1861(e) of such Act (42 U.S.C. 1395x(e)) is amended to
read as follows:
‘‘The term ‘hospital’ does not include a critical access hos-
pital (as defined in section 1861(mm)(1)), unless the con-
text otherwise requires, or unless a critical access hospital
applies for accreditation by the Joint Commission on Ac-
creditation of Hospitals.’’.
SEC. 105. GRADUATE MEDICAL EDUCATION TECHNICAL
AMENDMENTS.
(a) INDIRECT GRADUATE MEDICAL EDUCATION AD-
JUSTMENT.—
(1) IN GENERAL.—Section 1886(d)(5)(B)(v) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(5)(B)(v)) is amended to read as follows:
‘‘(v)(I) In determining the adjustment with re-
spect to a hospital that sponsors more than one
allopathic or osteopathic residency training program
for discharges occurring on or after October 1,
1997, the total number of full-time equivalent in-
terns and residents in the fields of allopathic and os-
teopathic medicine in either a hospital or nonhos-
pital setting may not exceed the number of such full-
time equivalent interns and residents who partici-
pated, or who but for an approved leave would have
participated, in the hospital’s approved medical resi-
dency training programs for the hospital’s most re-
cent cost reporting period ending on or before De-
cember 31, 1996.
‘‘(II) In determining the adjustment with re-
spect to a hospital that sponsors only one allopathic
or osteopathic residency program for discharges oc-
curring on or after October 1, 1997, the total num-
ber of full-time equivalent interns and residents in
the fields of allopathic and osteopathic medicine who
participated, or who but for an approved leave would
have participated, in the hospital’s medical residency
training program may be increased by not more
than one for any calendar year, and may not exceed
a total of three more than the number appointed in
either a hospital or nonhospital setting for the hos-
pital’s most recent cost reporting period ending on
or before December 31, 1996.’’.
(2) 
TECHNICAL
AMENDMENTS.—Section
1886(d)(5)(B) 
of 
such 
Act 
(42 
U.S.C.
1395ww(d)(5)(B)) is amended by moving clauses (ii)
and (vi) two ems to the left.
(b) DIRECT GRADUATE MEDICAL EDUCATION AD-
JUSTMENT.—
(1) LIMITATION ON NUMBER OF RESIDENTS.—
Section 1886(h)(4)(F) of the Social Security Act (42
U.S.C. 1395ww(h)(4)(F)) is amended by inserting
‘‘who participated, or who but for an approved leave
would have participated, in the hospital’s medical
residency training programs’’ after ‘‘may not exceed
the number of such full-time equivalent residents’’.
(2) FUNDING.—
(A) NEW PROGRAMS.—The first sentence
of section 1886(h)(4)(H)(i) of such Act (42
U.S.C. 1935ww(h)(4)(H)(i)) is amended by in-
serting ‘‘and before September 30, 1999’’ after
‘‘January 1, 1995’’.
(B) PROGRAMS MEETING RURAL NEEDS.—
The second sentence of such section is amended
by striking the period at the end and inserting
‘‘, including facilities that are not located in an
underserved rural area but have established
separately accredited approved medical resi-
dency training programs in such an area.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of the Balanced Budget Act of 1997.
SEC. 106. MEDICARE-DEPENDENT SMALL RURAL HOS-
PITALS.
(a) REDUCTION IN ELIGIBILITY DISCHARGE PER-
CENTAGE.—Section 1886(d)(5)(G)(iv)(IV) of the Social
Security Act (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is
amended by striking ‘‘60’’ and inserting ‘‘50’’.
(b) REBASING FOR DISCHARGES DURING THE MOST
CURRENT
AUDITED
FISCAL
YEAR.—Section
1886(b)(3)(D) of the Social Security Act (42 U.S.C.
1395ww(b)(3)(D) is amended—
(1) in the second sentence, by striking ‘‘begin-
ning during fiscal year 1987’’ and inserting ‘‘ending
during fiscal year 1998’’; and
(2) by adding at the end the following new sen-
tence: ‘‘An increase in the target amount by reason
of the previous sentence shall have no effect on the
classification of a hospital as a medicare-dependent,
small rural hospital.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to discharges occur-
ring on or after October 1, 1999.
SEC. 107. GEOGRAPHIC RECLASSIFICATION FOR PURPOSES
OF DSH PAYMENTS.
(a) IN GENERAL.—Section 1886(d)(10)(C)(i) of the
Social Security Act (42 U.S.C. 1395ww(d)(10)(C)(i)) is
amended—
(1) by striking ‘‘or’’ at the end of subclause (I);
(2) by striking the period at the end of sub-
clause (II) and inserting ‘‘, or’’; and
(3) by adding at the end the following new sub-
clause:
‘‘(III) eligibility for and amount of additional
payments under paragraph (5)(F).
In the case of a hospital with an application approved
under subclause (I) to change the hospital’s geographic
classification for a fiscal year, such change in the hos-
pital’s geographic classification for that fiscal year shall
apply to such hospital for purposes of subclause (III).’’.
(b) 
APPLICABLE
GUIDELINES.—Section
1886(d)(10)(D) 
of 
such 
Act 
(42 
U.S.C.
1395ww(d)(10)(D)) is amended—
(1) in clause (i), by adding at the end the fol-
lowing new subclause:
‘‘(V) Guidelines for considering applications
under subparagraph (C)(i)(III) of determining eligi-
bility for and amount of additional payments under
paragraph (5)(F).’’;
(2) by redesignating clause (iv) as clause (v);
(3) by inserting after clause (iii) the following
new clause:
‘‘(iv) Under the guidelines published by the Secretary
under clause (i)(V), the Board shall not reject an applica-
tion to change a hospital’s geographic classification under
subparagraph (C)(i)(I) because the change in the hos-
pital’s geographic classification for that fiscal year does
not result in an increase in the average standardized
amount for that hospital.’’; and
(4) in clause (v), as so redesignated by para-
graph (2)—
(A) by inserting ‘‘(I)’’ after ‘‘(v)’’;
(B) by striking ‘‘The’’ and inserting ‘‘Ex-
cept as provided in subclause (II), the’’; and
(C) by adding at the end the following new
subclause:
‘‘(II) The Secretary shall publish the guidelines de-
scribed in subclause (V) of clause (i) by January 1,
2000.’’.
(c) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on January 1, 2000, and apply
with respect to applications for geographic reclassification
submitted for cost reporting periods beginning on or after
such date.
SEC. 108. REVISION OF GUIDELINES FOR GEOGRAPHIC RE-
CLASSIFICATION BY WAGE INDEX.
(a) AVERAGE HOURLY WAGE WEIGHTED FOR OCCU-
PATIONAL MIX.—Section 1886(d)(10)(D)(i)(I) of the So-
cial Security Act (42 U.S.C. 1395ww(d)(10)(D)(i)(I)) is
amended to read as follows:
‘‘(I) Guidelines for comparing a hospital’s aver-
age hourly wage to the average hourly wage of hos-
pitals in the area in which the hospital is classified,
guidelines for comparing a hospital’s average hourly
wage to the average hourly wage of hospitals in the
area in which the hospital is applying to be classi-
fied, and guidelines for comparing a hospital’s aver-
age hourly wage adjusted by the occupational mix of
the area in which the hospital is applying to be clas-
sified to the average hourly wage of hospitals in such
area.’’.
(b) DATA
COLLECTION
REQUIREMENT.—Section
1886(d)(10)(D) 
of 
such 
Act 
(42 
U.S.C.
1395ww(d)(10)(D)), as amended by section 107(b), is fur-
ther amended—
(1) by redesignating clause (v) as clause (vi);
(2) by inserting after clause (iv) the following
new clause:
‘‘(v) For purposes of considering an application under
subparagraph (C)(i)(II), the Secretary shall collect and
update every three years such information as is necessary
to compare a hospital’s wages weighted by the occupa-
tional mix of hospitals in the area in which the hospital
is applying to be classified, or the Board shall, in consid-
ering such an application, apply the most current available
information with respect to such wages collected by the
American Hospital Association.’’; and
(3) in clause (vi), as so redesignated by para-
graph (1), by inserting ‘‘subclause (I), as amended
by the Triple-A Rural Health Improvement Act of
1999, and’’ before ‘‘subclause (III) of clause (i) by
January 1, 2000.’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) take effect on January 1, 2000,
and apply with respect to applications for geographic re-
classification for cost reporting periods beginning on or
after such date.
(d) REPORT TO CONGRESS.—Not later than one year
after the date of the enactment of this Act, the Secretary
shall submit to Congress a report describing revised meth-
odology to compute hospital wage indices, for purposes of
adjustments in payment amounts to hospitals under the
medicare program, that reflect legitimate differences in
hospital wage rates by area, but that do not rely on aver-
age per employee expenditures.
(e) SENSE OF CONGRESS.—It is the Sense of the
Congress that the adjustment in payment amounts to hos-
pitals under the medicare program to reflect variations in
the costs of wages and wage-related costs of hospitals,
under section 1886(d)(3)(E) of the Social Security Act
(42 U.S.C. 1395ww(d)(3)(E)), should only be used with
respect to payments made on a prospective basis to such
hospitals for inpatient hospital services. Such adjustment
should not be applied to payment amounts for any other
item or service reimbursed under the medicare program.
SEC. 109. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR
LABOR COSTS FOR ALL ITEMS AND SERVICES
REIMBURSED 
UNDER 
PROSPECTIVE 
PAY-
MENT SYSTEMS.
(a) IN GENERAL.—Section 1886 of the Social Secu-
rity Act (42 U.S.C. 1395ww) is amended by adding at the
end the following new subsection:
‘‘(l) APPLICATION OF HOSPITAL GEOGRAPHIC RE-
CLASSIFICATION FOR INPATIENT SERVICES TO ALL HOS-
PITAL FURNISHED ITEMS AND SERVICES REIMBURSED
UNDER PROSPECTIVE PAYMENT SYSTEM.—
‘‘(1) IN GENERAL.—In the case of a hospital
with an application to the Medicare Geographic
Classification 
Review 
Board 
under 
subsection
(d)(10)(C) to change the hospital’s geographic clas-
sification for a fiscal year for purposes of the factor
used to adjust the DRG prospective payment rate
for area differences in hospital wage levels that ap-
plies to such hospital under subsection (d)(3)(E)
that has been approved, the change in the hospital’s
geographic classification for such purposes shall
apply for purposes of adjustments to payments for
variations in costs which are attributable to wages
and wage-related costs for all pps-reimbursed items
and services.
‘‘(2) PPS-REIMBURSED
ITEMS
AND
SERVICES
DEFINED.—For purposes of paragraph (1), the term
‘pps-reimbursed items and services’ means, for cost
reporting periods beginning during the fiscal year
for which such change has been approved, items and
services furnished by the hospital, or by an entity or
department of the hospital which is provider-based
(as determined by the Secretary), for which
payments—
‘‘(A) are made under this title on a pro-
spective basis; and
‘‘(B) are adjusted for variations in costs
which are attributable to wages and wage-re-
lated costs.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items and services furnished
on or after January 1, 2000.
Subtitle B—Medicare+Choice
SEC. 111. PAYMENTS TO MEDICARE+CHOICE ORGANIZA-
TIONS.
(a) ADJUSTMENT
TO CALCULATION
OF ANNUAL
CAPITATION RATES.—Section 1853(c) of the Social Secu-
rity Act (42 U.S.C. 1395w–23(c)) is amended—
(1) in paragraph (1)—
(A) in subparagraph (A), by striking the
comma at the end of clause (ii) and all that fol-
lows before the period; and
(B) in subparagraph (C)(ii), by inserting
‘‘multiplied by the budget neutrality adjustment
factor determined under paragraph (5)’’ before
the period at the end; and
(2) in paragraph (5), by striking ‘‘paragraph
(1)(A)’’ and inserting ‘‘paragraph (1)(C)(ii)’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to rates calculated for years
after 1999.
SEC. 112. REPEAL OF PHASE OUT OF CERTAIN MEDICARE
REASONABLE COST REIMBURSEMENT CON-
TRACTS.
Section 1876(h)(5) of the Social Security Act (42
U.S.C. 1395mm(h)(5)) is amended—
(1) by striking ‘‘(5)(A)’’ and inserting ‘‘(5)’’;
and
(2) by striking subparagraph (B).
SEC. 113. MEDICARE+CHOICE RURAL DEMONSTRATION
PROJECT.
(a) ESTABLISHMENT OF PROJECT.—For purposes of
expanding and improving the quality of items and services
furnished under the medicare program to medicare bene-
ficiaries residing in rural and frontier areas, the Secretary
of Health and Human Services (in this section referred
to as the ‘‘Secretary’’) shall conduct demonstration
projects under which the Secretary shall establish, and
provide for payment for such items and services to, pro-
vider-sponsored organizations and other managed care en-
tities that are based in rural and frontier areas.
(b) REQUIREMENT
OF
RURAL
AND
FRONTIER
AREAS.—The Secretary shall designate areas in which
projects under this section shall be conducted. Such
projects may only be conducted in rural or frontier areas,
as defined under title XVIII of the Social Security Act
and under regulations promulgated thereunder.
(c) PROJECT IMPLEMENTATION.—
(1) IN GENERAL.—The Secretary shall establish
a benefit design, and establish payment amounts for
items and services furnished by such provider-spon-
sored organizations and managed care entities to
medicare beneficiaries.
(2) DATA
COLLECTION.—The Secretary shall
provide for the collection of information (including
information concerning quality and access to care),
for purposes of evaluating the results of the project.
(d) REPORT TO CONGRESS.—
(1) IN
GENERAL.—Not later than two years
after the Secretary implements the demonstration
projects under this section, and annually thereafter,
the Secretary shall submit to Congress a report re-
garding such demonstration projects.
(2) CONTENTS
OF
REPORT.—The report in
paragraph (1) shall include the following:
(A) A description of the demonstration
projects conducted under this section.
(B) An evaluation of—
(i) the viability of such provider-spon-
sored organizations and managed care en-
tities operating in rural and frontier areas;
(ii) the quality of the health care serv-
ices provided to medicare beneficiaries re-
siding in such areas under the demonstra-
tion projects; and
(iii) beneficiary and health care pro-
vider satisfaction under the demonstration
project.
(C) Any other information regarding the
demonstration projects conducted under this
section that the Secretary determines to be ap-
propriate.
(e) WAIVER AUTHORITY.—The Secretary of Health
and Human Services may waive such requirements of title
XVIII of the Social Security Act (as amended by this Act)
as may be necessary for the purposes of carrying out the
project.
Subtitle C—General Payment
Provisions
SEC. 121. DIRECT MEDICARE PAYMENT FOR PHYSICIAN AS-
SISTANTS, 
NURSE 
PRACTITIONERS, 
AND
CLINICAL NURSE SPECIALISTS PRACTICING
IN UNDERSERVED RURAL AREAS.
(a) IN GENERAL.—Section 1833(a)(1)(O) of the Social
Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended—
(1) by inserting ‘‘(or 100 percent in the case of
services furnished in an underserved rural area)’’
after ‘‘85 percent’’ the first place it appears.
(b) 
DIRECT
REIMBURSEMENT.—Section
1842(b)(6)(C) of such Act (42 U.S.C. 1395u(b)(6)(C)) is
amended—
(1) by striking ‘‘clause (i) of’’;
(2) by inserting ‘‘, nurse practitioner, or clinical
nurse specialist’’ after ‘‘physician assistant’’ the first
place it appears; and
(3) by amending clause (ii) to read as follows:
‘‘(ii) with respect to a physician assistant, nurse
practitioner, or clinical nurse specialist who is pro-
viding services in an underserved rural area, pay-
ment may be made directly to the assistant, practi-
tioner, or specialist;’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply to services furnished on or after Janu-
ary 1, 2000.
SEC. 122. COVERAGE OF QUALIFIED MENTAL HEALTH PRO-
FESSIONAL SERVICES UNDER MEDICARE.
(a) IN GENERAL.—Section 1861(s)(2) of the Social
Security Act (42 U.S.C. 1395x(s)(2)) is amended—
(1) in subparagraph (S), by striking ‘‘and’’ at
the end;
(2) in subparagraph (T), by striking the period
at the end and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(U) qualified mental health professional serv-
ices (as defined in subsection (uu));’’.
(b) PAYMENT RULES.—
(1) DETERMINATION
OF
AMOUNT
OF
PAY-
MENT.—Section 1833(a)(1) of the Social Security
Act (42 U.S.C. 1395l(a)(1)) is amended—
(A) by striking ‘‘and’’ before ‘‘(S)’’; and
(B) by striking the semicolon at the end
and inserting the following: ‘‘, and (T) with re-
spect to qualified mental health professional
services described in section 1861(s)(2)(U), the
amounts paid shall be the amount determined
by a fee schedule established by the Secretary
for purposes of this subparagraph;’’.
(2) 
SEPARATE
PAYMENT
FOR
SERVICES OF INSTITUTIONAL PROVIDERS.—Section
1832(a)(2)(B)(iii) of the Social Security Act (42
U.S.C. 1395k(a)(2)(B)(iii)) is amended—
(A) by striking ‘‘and services’’ and insert-
ing ‘‘services’’; and
(B) by striking the semicolon at the end
and inserting the following: ‘‘, and qualified
mental health professional services described in
section 1861(s)(2)(U);’’.
(c) SERVICES DESCRIBED.—Section 1861 of the So-
cial Security Act (42 U.S.C. 1395x) is amended by adding
at the end the following new subsection:
‘‘Qualified Mental Health Professional Services
‘‘(uu)(1) The term ‘qualified mental health profes-
sional services’ means such services (with such frequency
limits as the Secretary determines appropriate) furnished
by a mental health professional (as defined in paragraph
(2)) and such services and supplies (with such limits) fur-
nished as an incident to services furnished by the mental
health professional that the mental health professional is
legally authorized to perform under State law (or under
a State regulatory mechanism provided by State law), if
SEC. 406. SENSE OF CONGRESS REGARDING THE RESERVE
CORPS OF THE COMMISSIONED CORPS OF
THE PUBLIC HEALTH SERVICE.
(a) FINDINGS.—Congress makes the following find-
ings:
(1) Improving the Reserve Corps of the Com-
missioned Corps of the Public Health Service would
significantly enhance access to quality health care in
rural areas.
(2) Use of inactive members of the Reserve
Corps to fill vacancies in staffing of health care pro-
viders under the Public Health Service Act is an ef-
fective and cost efficient manner of providing in-
creased and improved health care services in rural
areas and to Public Health Service agencies.
(3) The use of inactive members of the Reserve
Corps to fill such vacancies is impeded because of an
inability to identify such members.
(4) Better overall management of the Reserve
Corps may save several million dollars annually.
(b) SENSE OF CONGRESS.—It is the sense on Con-
gress that the Secretary of Health and Human Services
should establish within the Public Health Service of the
Department of Health and Human Services an Office of
Reserve Corps Coordination for the Commissioned Corps
of the Public Health Service. Such Office should oversee