I
107TH CONGRESS
2D SESSION
H. R. 5321
To improve the provision of health care in all areas of the United States.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 4, 2002
Mr. BOSWELL (for himself and Mr. LEACH) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committee on Ways and Means, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To improve the provision of health care in all areas of
the United States.
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
‘‘Improving Our Well-Being Act of 2002’’.
(b) TABLE OF CONTENTS.—The Table of Contents
of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—PHYSICIAN PROVISIONS
Sec. 101. Elimination of geographic physician work adjustment factor from ge-
ographic indices used to adjust payments under the physician
fee schedule.
Sec. 102. GAO study of geographic differences in payments for physicians’
services.
Sec. 103. Medicare incentive payment program improvements.
TITLE II—HOSPITAL PROVISIONS
Subtitle A—Acute Care Hospital Provisions
Sec. 201. Relief for certain non-teaching hospitals.
Sec. 202. Full market basket increase in 2003 for medicare hospitals in rural
and small urban areas.
Sec. 203. Equalizing urban and rural standardized payment amounts under the
medicare inpatient hospital prospective payment system.
Sec. 204. Two-year extension of hold harmless provisions for small rural hos-
pitals under medicare prospective payment system for hospital
outpatient department services.
Sec. 205. Adjustment in determination of pre-BBA amount for small rural hos-
pitals under medicare prospective payment system for hospital
outpatient department services.
Sec. 206. Increase in payments for certain services furnished by small rural
hospitals under medicare prospective payment system for hos-
pital outpatient department services.
Sec. 207. Medicare wage index improvements.
Sec. 208. Medicare inpatient payment adjustment for low-volume hospitals.
Sec. 209. Increase in floor under medicaid for treatment as an extremely low
DSH State to 3 percent in fiscal year 2003.
Subtitle B—Critical Access Hospital Provisions
Sec. 211. Reinstatement of medicare periodic interim payment (PIP) for crit-
ical access hospitals.
Sec. 212. Elimination of 35-mile requirement for cost reimbursement of ambu-
lance services furnished by critical access hospitals under the
medicare program.
Sec. 213. Treatment of home health services furnished by subdivisions of crit-
ical access hospitals under the medicare program.
TITLE III—OTHER HEALTH CARE PROVISIONS
Sec. 301. Improvement in rural health clinic reimbursement under medicare.
Sec. 302. Exclusion of certain rural health clinic and federally qualified health
center services from the medicare prospective payment system
for skilled nursing facilities.
Sec. 303. Two-year extension of increase for medicare home health services fur-
nished in rural areas.
Sec. 304. Five-year extension of availability of medicare cost contracts for
medicare beneficiaries.
TITLE IV—PEDIATRIC DENTAL PROVISIONS
Subtitle A—Medicaid and SCHIP
Sec. 401. Grants to improve the provision of dental services under medicaid
and SCHIP.
Sec. 402. Authority to provide dental coverage under SCHIP as a supplement
to other health coverage.
Subtitle B—Community Health Centers, Public Health Departments, and the
Indian Health Service
Sec. 411. Grants to improve the provision of dental health services.
Sec. 412. Streamline process for designating dental health professional shortage
areas.
Sec. 413. Demonstration projects to increase access to pediatric dental services
in underserved areas.
TITLE I—PHYSICIAN
PROVISIONS
SEC. 101. ELIMINATION OF GEOGRAPHIC PHYSICIAN WORK
ADJUSTMENT FACTOR FROM GEOGRAPHIC
INDICES USED TO ADJUST PAYMENTS UNDER
THE PHYSICIAN FEE SCHEDULE.
Section 1848(e) of the Social Security Act (42 U.S.C.
1395w–4(e)) is amended—
(1) in paragraph (1)(A)(iii), by striking ‘‘an
index’’ and inserting ‘‘for services provided before
January 1, 2003, an index’’; and
(2) in paragraph (2), by inserting ‘‘, for serv-
ices provided before January 1, 2003,’’ after ‘‘para-
graph (4)), and’’.
SEC. 102. GAO STUDY OF GEOGRAPHIC DIFFERENCES IN
PAYMENTS FOR PHYSICIANS’ SERVICES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study of differences in payment
amounts under the physician fee schedule under section
1848 of the Social Security Act (42 U.S.C. 1395w–4) for
physicians’ services in different geographic areas. Such
study shall include—
(1) an assessment of the validity of the geo-
graphic adjustment factors used for each component
of the fee schedule;
(2) an evaluation of the measures used for such
adjustment, including the frequency of revisions; and
(3) an evaluation of the methods used to deter-
mine professional liability insurance costs used in
computing the malpractice component, including a
review of increases in professional liability insurance
premiums and variation in such increases by State
and physician specialty and methods used to update
the geographic cost of practice index and relative
weights for the malpractice component.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Comptroller General shall
submit to Congress a report on the study conducted under
subsection (a). The report shall include recommendations
regarding the use of more current data in computing geo-
graphic cost of practice indices as well as the use of data
directly representative of physicians’ costs (rather than
proxy measures of such costs).
SEC. 103. MEDICARE INCENTIVE PAYMENT PROGRAM IM-
PROVEMENTS.
(a) PROCEDURES FOR SECRETARY, AND NOT PHYSI-
CIANS, TO DETERMINE WHEN BONUS PAYMENTS UNDER
MEDICARE INCENTIVE PAYMENT PROGRAM SHOULD BE
MADE.—Section 1833(m) of the Social Security Act (42
U.S.C. 1395l(m)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(m)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) The Secretary shall establish procedures under
which the Secretary, and not the physician furnishing the
service, is responsible for determining when a payment is
required to be made under paragraph (1).’’.
(b) EDUCATIONAL PROGRAM REGARDING THE MEDI-
CARE INCENTIVE PAYMENT PROGRAM.—The Secretary of
Health and Human Services shall establish and implement
an ongoing educational program to provide education to
physicians under the medicare program on the medicare
incentive payment program under section 1833(m) of the
Social Security Act (42 U.S.C. 1395l(m)).
(c) ONGOING STUDY AND ANNUAL REPORT ON THE
MEDICARE INCENTIVE PAYMENT PROGRAM.—
(1) ONGOING STUDY.—The Secretary of Health
and Human Services shall conduct an ongoing study
on the medicare incentive payment program under
section 1833(m) of the Social Security Act (42
U.S.C. 1395l(m)). Such study shall focus on wheth-
er such program increases the access of medicare
beneficiaries who reside in an area that is designated
(under section 332(a)(1)(A) of the Public Health
Service Act (42 U.S.C. 254e(a)(1)(A))) as a health
professional shortage area to physicians’ services
under the medicare program.
(2) ANNUAL REPORTS.—Not later than 1 year
after the date of enactment of this Act, and annually
thereafter, the Secretary of Health and Human
Services shall submit to Congress a report on the
study conducted under subsection (a), together with
recommendations for such legislation and adminis-
trative actions as the Secretary considers appro-
priate.
TITLE II—HOSPITAL
PROVISIONS
Subtitle A—Acute Care Hospital
Provisions
SEC. 201. RELIEF FOR CERTAIN NON-TEACHING HOS-
PITALS.
(a) IN GENERAL.—
(1) APPLICATION
TO
INPATIENT
HOSPITAL
SERVICES.—In the case of a non-teaching hospital
that meets the condition of subsection (b), in each
of fiscal years 2003, 2004, and 2005 the amount of
payment made to the hospital under section 1886(d)
of the Social Security Act for discharges occurring
during such fiscal year only shall be increased as
though the applicable percentage increase (otherwise
applicable to discharges occurring during such fiscal
year under section 1886(b)(3)(B)(i) of such Act (42
U.S.C. 1395ww(b)(3)(B)(i)) had been increased by 5
percentage points. The previous sentence shall be
applied for each such fiscal year separately without
regard to its application in a previous fiscal year and
shall not affect payment for discharges for any hos-
pital occurring during a fiscal year after fiscal year
2005.
(2) APPLICATION
TO
OUTPATIENT
HOSPITAL
SERVICES.—In the case of a non-teaching hospital
that meets the condition of subsection (b), in each
of 2003, 2004, and 2005 the amount of payment
made to the hospital under section 1833(t) of the
Social Security Act for covered OPD services fur-
nished during such year only shall be increased as
though the OPD fee schedule increase factor (other-
wise applicable to such services during such year
under section 1833(t)(3)(C)(iv) of such Act (42
U.S.C. 1395l(t)(3)(C)(iv)) had been increased by 5
percentage points. The previous sentence shall be
applied for each such year separately without regard
to its application in a previous year and shall not af-
fect payment for covered OPD services furnished on
or after January 1, 2006.
(b) CONDITION.—A non-teaching hospital meets the
condition of this subsection if—
(1) it is located in a rural area and the amount
of the aggregate payments under subsection (d) of
section 1886 of the Social Security Act for hospitals
located in rural areas in the State for their cost re-
porting periods beginning during fiscal year 1999 is
less than the aggregate allowable operating costs of
inpatient hospital services (as defined in subsection
(a)(4) of such section) for all subsection (d) hos-
pitals in such areas in such State with respect to
such cost reporting periods; or
(2) it is located in an urban area and the
amount of the aggregate payments under subsection
(d) of such section for hospitals located in urban
areas in the State for their cost reporting periods
beginning during fiscal year 1999 is less than 103
percent of the aggregate allowable operating costs of
inpatient hospital services (as defined in subsection
(a)(4) of such section) for all subsection (d) hos-
pitals in such areas in such State with respect to
such cost reporting periods.
The amounts under paragraphs (1) and (2) shall be deter-
mined by the Secretary of Health and Human Services
based on data of the Medicare Payment Advisory Commis-
sion.
(c) DEFINITIONS.—For purposes of this section:
(1) 
NON-TEACHING
HOSPITAL.—The 
term
‘‘non-teaching hospital’’ means, for a cost reporting
period, a subsection (d) hospital (as defined in sub-
section (d)(1)(B) of section 1886 of the Social Secu-
rity Act, 42 U.S.C. 1395ww)) that is not receiving
any additional payment under subsection (d)(5)(B)
of such section or a payment under subsection (h)
of such section for discharges occurring during the
period. A subsection (d) hospital that receives addi-
tional payments under subsection (d)(5)(B) or (h) of
such section shall, for purposes of this section, also
be treated as a non-teaching hospital unless a chair-
man of a department in the medical school with
which the hospital is affiliated is serving or has been
appointed as a clinical chief of service in the hos-
pital.
(2) RURAL; URBAN.—The terms ‘‘rural’’ and
‘‘urban’’ have the meanings given such terms for
purposes of section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)).
SEC. 202. FULL MARKET BASKET INCREASE IN 2003 FOR
MEDICARE HOSPITALS IN RURAL AND SMALL
URBAN AREAS.
Section 1886(b)(3)(B)(i)(XVIII) of the Social Secu-
rity Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XVIII)) is
amended to read as follows:
‘‘(XVIII) for fiscal year 2003, the market bas-
ket percentage increase minus 0.55 percentage
points for hospitals located in a large urban area
and the market basket percentage increase for hos-
pitals located in an area other than a large urban
area, and’’.
SEC. 203. EQUALIZING URBAN AND RURAL STANDARDIZED
PAYMENT AMOUNTS UNDER THE MEDICARE
INPATIENT 
HOSPITAL 
PROSPECTIVE 
PAY-
MENT SYSTEM.
(a) IN GENERAL.—Section 1886(d)(3)(A) of the So-
cial Security Act (42 U.S.C. 1395ww(d)(3)(A)) is
amended—
(1) in clause (iv)—
(A) by inserting ‘‘and ending on or before
September 30, 2003,’’ after ‘‘October 1,
1995,’’; and
(B) by striking ‘‘and for hospitals’’ and in-
serting ‘‘and, subject to clause (v), for hos-
pitals’’; and
(2) by redesignating clauses (v) and (vi) as
clauses (vii) and (viii), respectively, and inserting
after clause (iv) the following new clauses:
‘‘(v) For discharges occurring in the fiscal year
beginning on October 1, 2002, the operating stand-
ardized amount for hospitals located in areas other
than a large urban area shall be equal to the oper-
ating standardized amount, as determined under
clause (iv), applicable to such discharges for hos-
pitals located in a large urban area.
‘‘(vi) For discharges occurring in a fiscal year
beginning on or after October 1, 2003, the Secretary
shall compute an operating standardized amount for
hospitals located in all areas within the United
States equal to the operating standardized amount
computed under clause (v) or this clause for the pre-
vious fiscal year increased by the applicable percent-
age increase under subsection (b)(3)(B)(i) for the
fiscal year involved.’’.
(b) CONFORMING AMENDMENTS.—
(1) COMPUTING DRG-SPECIFIC RATES.—Section
1886(d)(3)(D) of the Social Security Act (42 U.S.C.
1395ww(d)(3)(D)) is amended—
(A) in the heading, by striking ‘‘IN DIF-
FERENT AREAS’’;
(B) in the matter preceding clause (i), by
striking ‘‘each of which is’’;
(C) in clause (i)—
(i) in the matter preceding subclause
(I), by inserting ‘‘for fiscal years before fis-
cal year 2003,’’ before ‘‘for hospitals’’; and
(ii) in subclause (II), by striking
‘‘and’’ after the semicolon at the end;
(D) in clause (ii)—
(i) in the matter preceding subclause
(I), by inserting ‘‘for fiscal years before fis-
cal year 2003,’’ before ‘‘for hospitals’’; and
(ii) in subclause (II), by striking the
period at the end and inserting ‘‘; and’’;
and
(E) by adding at the end the following new
clause:
‘‘(iii) for a fiscal year beginning after fiscal
year 2002, for hospitals located in all areas, to
the product of—
‘‘(I) the applicable operating stand-
ardized amount (computed under subpara-
graph (A)), reduced under subparagraph
(B), and adjusted or reduced under sub-
paragraph (C) for the fiscal year; and
‘‘(II) the weighting factor (determined
under paragraph (4)(B)) for that diag-
nosis-related group.’’.
(2) TECHNICAL CONFORMING SUNSET.—Section
1886(d)(3) of the Social Security Act (42 U.S.C.
1395ww(d)(3)) is amended—
(A) in the matter preceding subparagraph
(A), by inserting ‘‘, for fiscal years before fiscal
year 1997,’’ before ‘‘a regional adjusted DRG
prospective payment rate’’; and
(B) in subparagraph (D), in the matter
preceding clause (i), by inserting ‘‘, for fiscal
years before fiscal year 1997,’’ before ‘‘a re-
gional DRG prospective payment rate for each
region,’’.
SEC. 204. TWO-YEAR EXTENSION OF HOLD HARMLESS PRO-
VISIONS 
FOR 
SMALL 
RURAL 
HOSPITALS
UNDER MEDICARE PROSPECTIVE PAYMENT
SYSTEM FOR HOSPITAL OUTPATIENT DE-
PARTMENT SERVICES.
Section 1833(t)(7)(D)(i) of the Social Security Act
(42 U.S.C. 1395l(t)(7)(D)(i)) is amended by striking
‘‘2004’’ and inserting ‘‘2006’’.
SEC. 205. ADJUSTMENT IN DETERMINATION OF PRE-BBA
AMOUNT 
FOR 
SMALL 
RURAL 
HOSPITALS
UNDER MEDICARE PROSPECTIVE PAYMENT
SYSTEM FOR HOSPITAL OUTPATIENT DE-
PARTMENT SERVICES.
Section 1833(t)(7)(F)(ii) of the Social Security Act
(42 U.S.C. 1395l(t)(7)(F)(ii)) is amended by adding at
the end the following new sentence: ‘‘The preceding sen-
tence shall not apply with respect to the determination of
the amount of payment under this subsection for covered
OPD services furnished on or after January 1, 2003, and
before January 1, 2006, by a hospital described in sub-
paragraph (D)(i).’’.
SEC. 206. INCREASE IN PAYMENTS FOR CERTAIN SERVICES
FURNISHED BY SMALL RURAL HOSPITALS
UNDER MEDICARE PROSPECTIVE PAYMENT
SYSTEM FOR HOSPITAL OUTPATIENT DE-
PARTMENT SERVICES.
(a) INCREASE.—
(1) IN GENERAL.—In the case of an applicable
covered OPD service (as defined in paragraph (2))
that is furnished by a hospital described in para-
graph (7)(D)(i) of section 1833(t) of the Social Se-
curity Act (42 U.S.C. 1395l(t)) on or after January
1, 2003, and before January 1, 2006, the Secretary
of Health and Human Services shall increase the
medicare OPD fee schedule amount (as determined
under paragraph (4)(A) of such section) that is ap-
plicable for such service by 10 percent.
(2) APPLICABLE COVERED OPD SERVICES DE-
FINED.—For purposes of this section, the term ‘‘ap-
plicable covered OPD service’’ means a covered clinic
or emergency room visit that is classified within the
groups of covered OPD services (as defined in para-
graph (1)(B) of section 1833(t) of the Social Secu-
rity Act (42 U.S.C. 1395l(t))) established under
paragraph (2)(B) of such section.
(b) NO EFFECT ON COPAYMENT AMOUNT.—The Sec-
retary of Health and Human Services shall compute the
copayment amount for applicable covered OPD services
under section 1833(t)(8)(A) of the Social Security Act (42
U.S.C. 1395l(t)(8)(A)) as if this section had not been en-
acted.
(c) NO EFFECT ON INCREASE UNDER HOLD HARM-
LESS PROVISIONS.—The Secretary of Health and Human
Services shall apply the temporary hold harmless provision
under section 1833(t)(7)(D)(i) of the Social Security Act
(42 U.S.C. 1395l(t)(7)(D)(i)) as if this section had not
been enacted.
(d) WAIVING BUDGET NEUTRALITY AND NO REVI-
SION OR ADJUSTMENTS.—The Secretary of Health and
Human Services shall not make any revision or adjust-
ment under subparagraph (A), (B), or (C) of section
1833(t)(9) of the Social Security Act (42 U.S.C.
1395l(t)(9)) because of the application of subsection
(a)(1).
(e) NO EFFECT ON PAYMENTS AFTER INCREASE PE-
RIOD ENDS.—The Secretary of Health and Human Serv-
ices shall not take into account any payment increase pro-
vided under subsection (a)(1) in determining payments for
covered OPD services (as defined in paragraph (1)(B) of
section 1833(t) of the Social Security Act (42 U.S.C.
1395l(t))) under such section that are furnished after
January 1, 2006.
(f) 
TECHNICAL
AMENDMENT.—Section
1833(t)(2)(B) of the Social Security Act (42 U.S.C.
1395l(t)(2)(B)) is amended by inserting ‘‘(and periodically
revise such groups pursuant to paragraph (9)(A))’’ after
‘‘establish groups’’.
SEC. 207. MEDICARE WAGE INDEX IMPROVEMENTS.
(a) ACCELERATION
OF PHASE-OUT
OF CERTAIN
COSTS IN COMPUTING AREA WAGE INDEX.—For pur-
poses of computing the area wage index under section
1886(d)(3)(E) of the Social Security Act (42 U.S.C.
1395ww(d)(3)(E)) for services provided in fiscal year
2003 and any subsequent year, the Secretary shall exclude
from such calculation employee compensation and paid
hours of employment attributable to teaching physicians,
residents in approved medical residency training programs
(as defined in section 1886(h)(5)(A) of such Act (42
U.S.C. 1395ww(h)(5)(A))), and certified registered nurse
anesthetists (as defined in section 1861(bb)(2) of the So-
cial Security Act (42 U.S.C. 1395x(bb)(2))).
(b) MEDPAC REVIEW AND REPORT.—
(1) REVIEW.—The Medicare Payment Advisory
Commission shall conduct a review of the method-
ology used by the Secretary of Health and Human
Services to determine the proportion of hospitals’
costs attributable to wages and wage-related costs
which are adjusted under section 1886(d)(3)(E) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(3)(E)).
(2) REPORT.—Not later than 1 year after the
date of enactment of this Act, the Commission shall
submit to Congress a report on the review conducted
under paragraph (1) together with recommendations
on how to alter the methodology described in such
paragraph in order to improve the accuracy of the
determination of the proportion described in such
paragraph.
SEC. 208. MEDICARE INPATIENT PAYMENT ADJUSTMENT
FOR LOW-VOLUME HOSPITALS.
(a) IN GENERAL.—Section 1886(d) of the Social Se-
curity Act (42 U.S.C. 1395ww(d)) is amended by adding
at the end the following new paragraph:
‘‘(12) PAYMENT
ADJUSTMENT
FOR
LOW-VOLUME
HOSPITALS.—
‘‘(A) PAYMENT ADJUSTMENT.—
‘‘(i) IN
GENERAL.—Notwithstanding any
other provision of this section, for each cost re-
porting period (beginning with the cost report-
ing period that begins in fiscal year 2003), the
Secretary shall provide for an additional pay-
ment amount to each low-volume hospital (as
defined in clause (iii)) for discharges occurring
during that cost reporting period to increase
the amount paid to such hospital under this
section for such discharges by the applicable
percentage increase determined under clause
(ii).
‘‘(ii) 
APPLICABLE
PERCENTAGE
IN-
CREASE.—The Secretary shall determine a per-
centage increase applicable under this para-
graph that ensures that—
‘‘(I) no percentage increase in pay-
ments under this paragraph exceeds 25
percent of the amount of payment that
would otherwise be made to a low-volume
hospital under this section for each dis-
charge (but for this paragraph);
‘‘(II) low-volume hospitals that have
the lowest number of discharges during a
cost reporting period receive the highest
percentage increase in payments due to the
application of this paragraph; and
‘‘(III) the percentage increase in pay-
ments due to the application of this para-
graph is reduced as the number of dis-
charges per cost reporting period increases.
‘‘(iii) LOW-VOLUME HOSPITAL DEFINED.—
For purposes of this paragraph, the term ‘low-
volume hospital’ means, for a cost reporting pe-
riod, a subsection (d) hospital (as defined in
paragraph (1)(B)) other than a critical access
hospital (as defined in section 1861(mm)(1))
that—
‘‘(I) the Secretary determines had an
average of less than 800 discharges (deter-
mined with respect to all patients and not
just individuals receiving benefits under
this title) during the 3 most recent cost re-
porting periods for which data are avail-
able that precede the cost reporting period
to which this paragraph applies; and
‘‘(II) is located at least 15 miles from
a similar hospital (or is deemed by the
Secretary to be so located by reason of
such factors as the Secretary determines
appropriate, including the time required
for an individual to travel to the nearest
alternative source of appropriate inpatient
care (taking into account the location of
such alternative source of inpatient care
and any weather or travel conditions that
may affect such travel time)).
‘‘(B) PROHIBITING
CERTAIN
REDUCTIONS.—
Notwithstanding subsection (e), the Secretary shall
not reduce the payment amounts under this section
to offset the increase in payments resulting from the
application of subparagraph (A).’’.
(b) TECHNICAL AMENDMENT.—Section 1886(d) of
the Social Security Act (42 U.S.C. 1395ww(d)) is amend-
ed by moving the indentation of paragraph (11), and sub-
paragraphs (A) through (D) of such paragraph, 2 ems to
the left.
SEC. 209. INCREASE IN FLOOR UNDER MEDICAID FOR
TREATMENT AS AN EXTREMELY LOW DSH
STATE TO 3 PERCENT IN FISCAL YEAR 2003.
(a) INCREASE IN DSH FLOOR.—Section 1923(f)(5)
of the Social Security Act (42 U.S.C. 1396r–4(f)(5)) is
amended—
(1) by striking ‘‘fiscal year 1999’’ and inserting
‘‘fiscal year 2001’’;
(2) by striking ‘‘August 31, 2000’’ and insert-
ing ‘‘August 31, 2002’’;
(3) by striking ‘‘1 percent’’ each place it ap-
pears and inserting ‘‘3 percent’’; and
(4) by striking ‘‘fiscal year 2001’’ and inserting
‘‘fiscal year 2003’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on October 1, 2002, and apply
to DSH allotments under title XIX of the Social Security
Act for fiscal year 2003 and each fiscal year thereafter.
Subtitle B—Critical Access
Hospital Provisions
SEC. 211. REINSTATEMENT OF MEDICARE PERIODIC IN-
TERIM PAYMENT (PIP) FOR CRITICAL ACCESS
HOSPITALS.
(a) IN GENERAL.—Section 1815(e)(2) of the Social
Security Act (42 U.S.C. 1395g(e)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (C);
(2) by adding ‘‘and’’ at the end of subpara-
graph (D); and
(3) by inserting after subparagraph (D) the fol-
lowing new subparagraph:
‘‘(E) inpatient critical access hospital services
(as defined in section 1861(mm)(2));’’.
(b) EFFECTIVE DATES.—The amendments made by
subsection (a) shall apply to payments made on or after
January 1, 2003.
SEC. 212. ELIMINATION OF 35-MILE REQUIREMENT FOR
COST 
REIMBURSEMENT 
OF 
AMBULANCE
SERVICES FURNISHED BY CRITICAL ACCESS
HOSPITALS UNDER THE MEDICARE PRO-
GRAM.
(a) ELIMINATION.—
(1) IN
GENERAL.—Paragraph (8) of section
1834(l) of the Social Security Act (42 U.S.C.
1395m(l)), as added by section 205(a) of the Medi-
care, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (114 Stat. 2763A–482),
as enacted into law by section 1(a)(6) of Public Law
106–554, is amended—
(A) in subparagraph (B), by striking the
comma at the end and inserting a period; and
(B) by striking ‘‘but only if’’ and all that
follows.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to services furnished on
or after January 1, 2003.
(b) TECHNICAL AMENDMENT.—
(1) IN
GENERAL.—Paragraph (8) of section
1834(l) of the Social Security Act (42 U.S.C.
1395m(l)), as added by section 221(a) of the Medi-
care, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (114 Stat. 2763A–486),
as enacted into law by section 1(a)(6) of Public Law
106–554, is redesignated as paragraph (9).
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect as if included in
the enactment of such section 221(a).
SEC. 213. TREATMENT OF HOME HEALTH SERVICES FUR-
NISHED BY SUBDIVISIONS OF CRITICAL AC-
CESS HOSPITALS UNDER THE MEDICARE
PROGRAM.
(a) HOME HEALTH SERVICES.—
(1) IN GENERAL.—Section 1895 of the Social
Security Act (42 U.S.C. 1395fff) is amended by
adding at the end the following new subsection:
‘‘(f) SERVICES FURNISHED
BY CRITICAL ACCESS
HOSPITALS.—Notwithstanding any other provision of this
section, the Secretary shall pay the reasonable costs in-
curred in furnishing home health services if such services
are furnished by a home health agency that is a subdivi-
sion of a critical access hospital (as defined in section
1861(mm)(1)).’’.
(2) 
CONFORMING
AMENDMENT.—Section
1833(a)(2)(A) of the Social Security Act (42 U.S.C.
1395l(a)(2)(A)) is amended—
(A) by striking ‘‘1861(kk)),’’ and inserting
‘‘1861(kk)), (i)’’; and
(B) by inserting before the semicolon at
the end the following: ‘‘, and (ii) with respect
to home health services described in subsection
(f) of such section, the amounts paid shall be
the amounts described in such subsection’’.
(3) 
TECHNICAL
AMENDMENT.—Section
1833(a)(2)(A) of the Social Security Act (42 U.S.C.
1395l(a)(2)(A)) is amended by striking ‘‘drug) (as
defined in section 1861(kk))’’ and inserting ‘‘drug
(as defined in section 1861(kk)))’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to services furnished
on or after January 1, 2004.
TITLE III—OTHER HEALTH CARE
PROVISIONS
SEC. 301. IMPROVEMENT IN RURAL HEALTH CLINIC REIM-
BURSEMENT UNDER MEDICARE.
Section 1833(f) of the Social Security Act (42 U.S.C.
1395l(f)) is amended—
(1) in paragraph (1), by striking ‘‘, and’’ at the
end and inserting a semicolon;
(2) in paragraph (2)—
(A) by striking ‘‘in a subsequent year’’ and
inserting ‘‘in 1989 through 2002’’; and
(B) by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new
paragraphs:
‘‘(3) in 2003, at $80 per visit; and
‘‘(4) in a subsequent year, at the limit estab-
lished under this subsection for the previous year in-
creased by the percentage increase in the MEI (as
so defined) applicable to primary care services (as so
defined) furnished as of the first day of that year.’’.
SEC. 302. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC
AND FEDERALLY QUALIFIED HEALTH CEN-
TER SERVICES FROM THE MEDICARE PRO-
SPECTIVE PAYMENT SYSTEM FOR SKILLED
NURSING FACILITIES.
(a) IN GENERAL.—Section 1888(e) of the Social Se-
curity Act (42 U.S.C. 1395yy(e)) is amended—
(1) in paragraph (2)(A)(i)(II), by striking
‘‘clauses (ii) and (iii)’’ and inserting ‘‘clauses (ii),
(iii), and (iv)’’; and
(2) by adding at the end of paragraph (2)(A)
the following new clause:
‘‘(iv) EXCLUSION OF CERTAIN RURAL
HEALTH CLINIC AND FEDERALLY QUALI-