I 
115TH CONGRESS 
1ST SESSION H. R. 2957 
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 
JUNE 20, 2017 
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: 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
(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 January 1, 2017, 
80 rural hospitals have closed in the United States, 
according to the University of North Carolina’s Cecil 
G. Sheps Center for Health Services Research, and 
the rate of these closures is increasing. 
(5) Six hundred and seventy-three hospitals are 
at risk of closing, according to iVantage’s Hospital 
Strength INDEX study, and such closings would im-
pact 11,700,000 patient encounters, 99,000 commu-
nity jobs would be lost, 137,000 healthcare jobs 
would be lost, and 277,000,000,000 would be lost 
from the gross domestic product (over 10 years). 
(6) Rural Medicare beneficiaries already face a 
number of challenges when trying to access health 
care services close to home, including the weather, 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 673 hospitals on the brink of clo-
sure, 11,700,000 Americans living in rural areas are 
on the brink of losing access to the closest emer-
gency 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). 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
ning more than 60 days after the date of the enactment 
of this Act. 
SEC. 103. EXTENDING PAYMENT LEVELS FOR LOW-VOLUME 
HOSPITALS 
AND 
MEDICARE-DEPENDENT 
HOSPITALS (MDHS). 
(a) EXTENSION
OF INCREASED PAYMENTS
FOR 
MDHS.— 
(1) EXTENSION OF PAYMENT METHODOLOGY.— 
Section 1886(d)(5)(G) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(G)), as amended by section 
205(a) of the Medicare Access and CHIP Reauthor-
ization Act of 2015, is amended— 
(A) in clause (i), by striking ‘‘, and before 
October 1, 2017’’; and 
(B) in clause (ii)(II), by striking ‘‘, and be-
fore October 1, 2017’’. 
(2) CONFORMING AMENDMENTS.— 
(A) EXTENSION
OF
TARGET
AMOUNT.— 
Section 1886(b)(3)(D) of the Social Security 
Act (42 U.S.C. 1395ww(b)(3)(D)), as amended 
by section 205(b) of the Medicare Access and 
CHIP Reauthorization Act of 2015, is amend-
ed— 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
(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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
(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 2018’’ 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 2018’’ 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)— 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
(A) in the first sentence, by inserting ‘‘or 
on or after January 1, 2018,’’ after ‘‘January 
1, 2013,’’; and 
(B) in the second sentence, by inserting ‘‘, 
or during or after 2018’’ after ‘‘or 2012’’; and 
(3) in subclause (III), in the first sentence, by 
inserting ‘‘or on or after January 1, 2018,’’ 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. 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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.—Subject to clause 
(iii) and notwithstanding subparagraphs 
(B), (C), and (E), the DSH allotment for 
a State with respect to a fiscal year that 
would be determined under this paragraph 
for the State for the fiscal year if this sub-
paragraph did not apply, shall be increased 
by the product of— 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
‘‘(I) the reduction of such State’s 
DSH 
allotment 
under 
paragraph 
(7)(A)(i)(I) for such fiscal year; and 
‘‘(II) the percentage of individ-
uals in the State who receive medical 
assistance under a State plan under 
this title and who live in a rural area 
(as defined in section 1886(d)(2)(D)) 
of the State. 
‘‘(ii) PAYMENTS.—Subject to clause 
(iii), the payments made to a State under 
section 1903(a) for each calendar quarter 
shall be increased by the product of— 
‘‘(I) the reduction such State’s 
DSH 
allotment 
under 
paragraph 
(7)(A)(i)(II) for such fiscal year; and 
‘‘(II) the percentage of individ-
uals in the State who receive medical 
assistance under a State plan under 
this title and who live in a rural area 
(as defined in section 1886(d)(2)(D)) 
of the State. 
‘‘(iii) 
SUPPLEMENT, 
NOT
SUP-
PLANT.—A State may only receive an in-
creased allotment under clause (i) or an in-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
creased payment under clause (ii) if such 
State provides such assurances as the Sec-
retary may require that any funds made 
available to such State pursuant to such 
clauses shall be used to supplement, and 
not supplant, amounts paid under this sec-
tion to hospitals in the State that are lo-
cated in rural areas (as defined in section 
1886(d)(2)(D)).’’. 
(c) APPLICABILITY.—The amendments made by this 
section apply with respect to fiscal year 2018 and each 
subsequent fiscal year. 
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’’. 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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.— 
(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 the date of the enactment of this Act. 
(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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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. 
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. 
VerDate Sep 11 2014 
22:48 Jun 26, 2017
Jkt 069200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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— 
(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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
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. 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
‘‘(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 
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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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-
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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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). 
‘‘(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. 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
‘‘(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. 
‘‘(3) INITIAL LIST OF DESIGNATED SERVICES.— 
The Secretary shall include in the proposed and final 
regulation for payment for hospital outpatient serv-
ices for 2018 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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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-
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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
‘‘(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.— 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
‘‘(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-
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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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— 
‘‘(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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
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, 2017, 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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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 
‘‘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 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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: 
‘‘(11) PAYMENT
FOR
RECOVERY
ACTIVITIES 
PERFORMED AFTER FISCAL YEAR 2017.— 
‘‘(A) IN GENERAL.—Under the contracts, 
subject to subparagraphs (B) and (C), payment 
shall be made to recovery audit contractors for 
recovery activities conducted during fiscal year 
2018 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 2018 or 
any fiscal year thereafter may not include any 
incentive payments. 
VerDate Sep 11 2014 
22:48 Jun 26, 2017
Jkt 069200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
‘‘(C) PERFORMANCE ACCOUNTABILITY.— 
‘‘(i) IN
GENERAL.—Under the con-
tracts, payment made to a recovery audit 
contractor for recovery activities conducted 
during fiscal year 2018 or any fiscal year 
thereafter shall, in the case that the con-
tractor has a complex audit denial overturn 
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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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-
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-
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS
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-
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— 
VerDate Sep 11 2014 
21:50 Jun 24, 2017
Jkt 069200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H2957.IH
H2957
srobinson on DSKBC5CHB2PROD with BILLS