such services and supplies are furnished to an individual
who resides in an area designated as a health professional
shortage area in accordance with section 332 of the Public
Health Service Act (42 U.S.C. 254e).
‘‘(2) The term ‘mental health professional’ means an
individual who is licensed as a mental health professional
for the diagnosis and treatment of mental illnesses by the
State (or under a State regulatory mechanism provided
by State law) in which the individual furnishes qualified
mental health professional services.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section apply to services furnished on or after Janu-
ary 1, 2000.
SEC. 123. MEDICARE WAIVERS FOR PROVIDERS IN RURAL
AREAS.
Notwithstanding section 1886(d)(2)(D) of the Social
Security Act (42 U.S.C. 1395ww(d)(2)(D)), by not later
than 180 days after the date of the enactment of this Act,
the Secretary of Health and Human Services shall estab-
lish a waiver process under which entities and individuals
under the medicare program that are determined by the
Office of Management and Budget to be located in an
urban or large urban area for purposes of reimbursement
under such program may apply to the Secretary to be con-
sidered to be located in a rural area for such purposes
if such entity or individual is located—
(1) in a rural area, as defined by the Goldsmith
Modification as published in the Federal Register on
February 27, 1992;
(2) outside of an urbanized area, as defined by
the United States Census Bureau; or
(3) an area designated by a State as a rural
area.
SEC. 124. SAFE HARBOR UNDER THE ANTI-KICKBACK STAT-
UTE FOR HOSPITAL RESTOCKING OF CER-
TAIN AMBULANCE DRUGS AND SUPPLIES.
(a) IN GENERAL.—Section 1128B(b)(3) of the Social
Security Act (42 U.S.C. 1320a–7b(b)(3)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (E);
(2) by striking the period at the end of sub-
paragraph (F) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(G) any remuneration from a hospital to an
ambulance provider if—
‘‘(i) the ambulance provider is owned or
operated (I) by a State or local government
agency or (II) by an organization that is de-
scribed in paragraph (3) or (4) of section
501(c) of the Internal Revenue Code of 1986
and that is exempt from taxation under section
501(a) of such Code;
‘‘(ii) the remuneration is in the form of the
replenishment of drugs or supplies, or both,
used by the ambulance provider during the
transport of a patient to the hospital; and
‘‘(iii) the remuneration is not determined
in a manner that takes into account the volume
or value of any referrals or business otherwise
generated between the parties for which pay-
ment may be made in whole or part under a
Federal health care program.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to remuneration provided on or
after the date of the enactment of this Act.
TITLE II—PROMOTING ACCESS
TO HEALTH CARE SERVICES
IN RURAL AREAS UNDER THE
MEDICAID PROGRAM
SEC. 201. CONTINUATION OF PRE-BBA MEDICAID REIM-
BURSEMENT RULES FOR FEDERALLY QUALI-
FIED HEALTH CENTERS AND RURAL HEALTH
CLINICS.
(a) ELIMINATION
OF PHASE-OUT
OF PAYMENT
BASED ON REASONABLE COST.—Section 1902(a)(13)(C)
of the Social Security Act (42 U.S.C. 1396a(a)(13)(C))
is amended by striking ‘‘(or 95 percent’’ and all that fol-
lows through ‘‘70 percent for services furnished during fis-
cal year 2003)’’.
(b) ELIMINATION OF TRANSITIONAL SUPPLEMENTAL
PAYMENT FOR SERVICES FURNISHED UNDER CERTAIN
MANAGED CARE CONTRACTS.—
(1) IN
GENERAL.—Section 1902(a)(13)(C) of
such Act (42 U.S.C. 1396a(a)(13)(C)) is further
amended—
(A) by striking ‘‘(C)(i)’’ and inserting
‘‘(C); and
(B) by striking ‘‘and (ii)’’ and all that fol-
lows up to the semicolon at the end.
(2) CONFORMING
AMENDMENT
TO
MANAGED
CARE CONTRACT REQUIREMENT.—Clause (ix) of sec-
tion 1903(m)(2)(A) of such Act (42 U.S.C.
1396b(m)(2)(A)) is amended to read as follows:
‘‘(ix) such contract provides, in the case of an
entity that has entered into a contract for the provi-
sion of services with a Federally-qualified health cen-
ter or a rural health clinic, that (I) rates of prepay-
ment from the State are adjusted to reflect fully the
rates 
of 
payment 
specified 
in 
section
1902(a)(13)(C), and (II) at the election of such cen-
ter or clinic, payments made by the entity to such
center or clinic for services described in section
1905(a)(2)(C) are made at the rates of payment
specified in section 1902(a)(13)(C);’’.
(3) ELIMINATION OF REPEAL.—Section 4712(c)
of the Balanced Budget Act of 1997 is repealed and
the provisions of the Social Security Act shall be im-
plemented as through such section had never been
enacted.
(d) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) apply to services furnished on or
after January 1, 2000.
SEC. 202. MEDICAID COVERAGE OF PHYSICIANS’ ASSIST-
ANTS.
(a) IN GENERAL.—Section 1905(a)(5)(A) of the So-
cial Security Act (42 U.S.C. 1396d(a)(5)(A)) is amended
by inserting ‘‘and services which would be physicians’ serv-
ices if furnished by such a physician and which are per-
formed by a physician assistant or a nurse practitioner
(as defined in section 1861(aa)(5)(A)) under the super-
vision of a physician (as so defined) and which the physi-
cian assistant or the nurse practitioner is legally author-
ized to perform by the State in which the services are per-
formed’’ after ‘‘section 1861(r)(1))’’.
(b) EFFECTIVE DATE.—(1) Except as provided in
paragraph (2), the amendment made by subsection (a)
shall apply to services furnished on or after January 1,
2000, without regard to whether or not final regulations
to carry out such amendment have been promulgated by
such date.
(2) In the case of a State plan for medical assistance
under title XIX of the Social Security Act which the Sec-
retary of Health and Human Services determines requires
State legislation (other than legislation appropriating
funds) in order for the plan to meet the additional require-
ment imposed by the amendment made by subsection (a),
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 State legislature
that begins after the date of the enactment 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 ses-
sion of the State legislature.
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.
(a) IN GENERAL.—Subsection (c) of section 117 of
the Internal Revenue Code of 1986 (relating to the exclu-
sion from gross income amounts received as a qualified
scholarship) is amended—
(1) by striking ‘‘Subsections (a)’’ and inserting
the following:
‘‘(1) IN GENERAL.—Subject to paragraph (2),
subsections (a)’’; and
(2) by adding at the end the following:
‘‘(2) NATIONAL HEALTH CORPS SCHOLARSHIP
PROGRAM.—Paragraph (1) shall not apply to any
amount received by an individual under the National
Health Corps Scholarship Program under section
338A(g)(1)(A) of the Public Health Service Act.’’
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to amounts received in taxable
years beginning after December 31, 1999.
SEC. 302. ISSUANCE OF TAX-EXEMPT BONDS BY ORGANIZA-
TIONS PROVIDING RESCUE AND EMERGENCY
MEDICAL SERVICES.
(a) GENERAL RULE.—Subsection (e) of section 150
of the Internal Revenue Code of 1986 is amended to read
as follows:
‘‘(e) BONDS OF CERTAIN VOLUNTEER FIRE DEPART-
MENTS OR EMERGENCY SERVICE ORGANIZATIONS.—For
purposes of this part and section 103—
‘‘(1) IN GENERAL.—A bond of a volunteer fire
or other emergency services organization shall be
treated as a bond of a political subdivision of a State
if—
‘‘(A) such organization is a qualified volun-
teer fire or other emergency services organiza-
tion with respect to an area within the jurisdic-
tion of such political subdivision, and
‘‘(B) such bond is issued as part of an
issue 95 percent or more of the net proceeds of
which are to be used for the acquisition, con-
struction, reconstruction, or improvement of—
‘‘(i) a firehouse or other building used
or to be used by such organization in pro-
viding qualified services (including land
which is functionally related and subordi-
nate thereto), or
‘‘(ii) a firetruck, ambulance, or other
vehicle used or to be used by such organi-
zation in providing qualified services.
‘‘(2) QUALIFIED VOLUNTEER FIRE OR OTHER
EMERGENCY
SERVICES
ORGANIZATION.—For pur-
poses of this subsection, the term ‘qualified volun-
teer fire or other emergency services organization’
means, with respect to a political subdivision of a
State, any organization—
‘‘(A) which is organized and operated to
provide qualified services for persons in an area
(within the jurisdiction of such political subdivi-
sion) which is not provided with any other
qualified services of the type provided by such
organization, and
‘‘(B) which is required (by written agree-
ment) by the political subdivision to furnish
qualified services in such area.
For purposes of subparagraph (A), other qualified
services provided in an area shall be disregarded in
determining whether an organization is a qualified
volunteer fire or other emergency services organiza-
tion if such other qualified services are provided by
a qualified volunteer fire or other emergency services
organization (determined with the application of this
sentence) and such organization and the provider of
such other services have been continuously providing
qualified services to such area since January 1,
1997.
‘‘(3) TREATMENT AS PRIVATE ACTIVITY BONDS
ONLY FOR CERTAIN PURPOSES.—Bonds which are
part of an issue which meets the requirements of
paragraph (1) shall not be treated as private activity
bonds except for purposes of sections 147(f) and
149(d).
‘‘(4) QUALIFIED
SERVICES.—For purposes of
this subsection, the term ‘qualified services’ means
any firefighting, rescue, or emergency medical serv-
ices.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to obligations issued on or after
January 1, 2000.
SEC. 303. BANK DEDUCTIBILITY OF SMALL, TAX-EXEMPT
DEBTS.
(a) IN GENERAL.—Section 265(b)(3) of the Internal
Revenue Code of 1986 (relating to exception for certain
tax-exempt obligations) is amended by adding at the end
the following:
‘‘(G) ELECTION TO APPLY LIMITATION ON
AMOUNT
OF
OBLIGATIONS
AT
BORROWER
LEVEL.—
‘‘(i) IN
GENERAL.—An issuer, the
proceeds of the obligations of which are to
be used to make or finance eligible loans,
may elect to apply subparagraphs (C) and
(D) by treating each borrower as the issuer
of a separate issue.
‘‘(ii) ELIGIBLE LOAN.—For purposes
of this subparagraph—
‘‘(I) IN GENERAL.—The term ‘el-
igible loan’ means one or more loans
to a qualified borrower the proceeds of
which are used by the borrower for
health care or educational purposes
and the outstanding balance of which
in the aggregate does not exceed
$5,000,000.
‘‘(II) QUALIFIED
BORROWER.—
The term ‘qualified borrower’ means a
borrower which is an organization de-
scribed in section 501(c)(3) and ex-
empt from taxation under section
501(a).
‘‘(iii) MANNER
OF
ELECTION.—The
election described in clause (i) may be
made by an issuer for any calendar year at
any time prior to its first issuance during
such year of obligations the proceeds of
which will be used to make or finance one
or more eligible loans.
‘‘(iv) MODIFICATION
OF
RULE
FOR
COMPOSITE ISSUES.—In the case of an ob-
ligation which is issued by any issuer
which has made the election described in
clause (i), subparagraph (F) shall be ap-
plied without regard to clause (i) of such
subparagraph.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1999.
TITLE IV—ADDITIONAL PROVI-
SIONS TO ADDRESS SHORT-
AGES OF HEALTH PROFES-
SIONALS IN RURAL AREAS
SEC. 401. REQUIREMENT FOR RURAL IMPACT STATEMENTS
FOR HEALTH CARE REGULATIONS.
(a) IN GENERAL.—Whenever the Secretary of Health
and Human Services promulgates a regulation (or pro-
posed regulation) relating to a health care program, in-
cluding the medicare or medicaid programs, the Secretary
shall include with the promulgation of the regulation an
analysis of the likely impact of the implementation of the
regulation on rural areas, including its impact on—
(1) rural safety net providers;
(2) rural primary care providers;
(3) rural hospitals;
(4) Federally qualified health centers and rural
health clinics;
(5) the economies in rural areas; and
(6) rural residents.
(b) EFFECTIVE DATE.—Subsection (a) shall apply to
regulations promulgated on or after the date of the enact-
ment of this Act.
SEC. 402. HEALTH PROFESSIONAL SHORTAGE AREAS.
(a) EFFECTIVE DATE.—Section 332 of the Public
Health Service Act (42 U.S.C. 254e) is amended—
(1) in subsection (a)(1)(A), by inserting after
‘‘services)’’ the following: ‘‘, or a frontier area (an
area that has six or fewer residents per square
mile),’’; and
(2) by adding at the end of subsection (c), the
following new paragraph:
‘‘(3) Any pending retirements or resignations of
physicians available within the area involved. In im-
plementing this paragraph, the Secretary shall waive
the requirements of this section with respect to the
number of physicians serving the area for the 12-
month period beginning on the date on which the
area was designated as a health professional short-
age area.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on the date of enactment
of this Act.
SEC. 403. ACCESS TO DATA.
(a) REQUIREMENT.—The heads of the agencies de-
scribed in subsection (b) shall negotiate and enter into
interagency agreements with agencies and offices of the
Department of Health and Human Services under which
such agencies and offices will be provided access to data
sets for intramural and extramural research conducted or
supported by such agencies or offices.
(b) AGENCY HEADS.—The agencies described in this
section are the following:
(1) The National Health Service Corps.
(2) The Centers for Disease Control and Pre-
vention.
(3) The Agency for Health Care Policy and Re-
search.
(4) The Bureau of the Census.
(c) INFORMATION.—The information that is to be
made available under interagency agreements under this
section shall include all information that is necessary for
scholarly and policy research. Such information shall be
made available in a manner that includes a description of
the geographic area or location of the individuals who are
the subject of such information.
(d) AVAILABILITY.—Information that is subject to an
interagency agreement under this section shall be made
available to bona fide researchers as determined appro-
priate by the Secretary of Health and Human Services.
(e) CONFIDENTIALITY.—Each interagency agreement
entered into under this section shall contain provisions
that protect the confidentiality of the individuals who are
the subjects of such information.
SEC. 404. DESIGNATION OF UNDERSERVED AREAS UNDER
HEALTH CARE CONTRACTS ADMINISTERED
BY THE OFFICE OF PERSONNEL MANAGE-
MENT.
Section 8902(m)(2)(A) of title 5, United States Code,
is amended by striking ‘‘a State where 25 percent’’ and
all that follows through the period and inserting ‘‘an area
designated as a health professional shortage area by the
Department of Health and Human Services in accordance
with section 332 of the Public Health Service Act (42
U.S.C. 254e).’’.
SEC. 405. REVISION OF METHODOLOGY FOR DESIGNATION
OF 
HEALTH 
PROFESSIONAL 
SHORTAGE
AREAS.
(a) REVISION OF METHODOLOGY.—
(1) IN GENERAL.—The Secretary of Health and
Human Services shall establish, on an expedited
basis and using a negotiated rulemaking process
under subchapter III of chapter 5 of title 5, United
States Code, revised standards for the designation of
a health professional shortage area under section
332(a)(1) of the Public Health Service Act (42
U.S.C. 254e(a)(1)).
(2) CONSIDERATIONS.—In developing standards
under subsection (a), the Secretary shall—
(A) promote the needs of medically under-
served populations (as defined in section
330(b)(3) of the Public Health Service Act (42
U.S.C. 254c(b)(3))) and the needs of individ-
uals residing in health professional shortage
areas located in rural, frontier, and urban
areas; and
(B) consider the percentage of population
over the age of 65 years residing in such health
professional shortage areas.
(b) DEVELOPMENT OF DEFINITION OF FRONTIER.—
For purposes of subsection (a) and for purposes of pay-
ment under title XVIII of the Social Security Act, the Sec-
retary of Health and Human Services shall, by regulation,
define the term ‘‘frontier’’. Such definition shall take into
account population density and distance in miles, and time
in minutes, to the nearest medical facility.
the management of the Reserve Corps and take such steps
as are necessary, including using inactive members to fill
temporary vacancies in staffing of health care providers
under the Public Health Service Act, to efficiently utilize
the Reserve Corps to increase and improve health care
services furnished in rural areas.
TITLE V—TELEMEDICINE
Subtitle A—Improvements to the
Medicare Program
SEC. 501. IMPROVEMENT OF TELEHEALTH SERVICES.
(a) MEDICARE COVERAGE OF TELEHEALTH SERV-
ICES.—
(1) ALL SERVICES FURNISHED UNDER MEDI-
CARE.—Section 4206(a) of the Balanced Budget Act
of 1997 (42 U.S.C. 1395l note) is amended by strik-
ing ‘‘furnishing a service for which payment may be
made under such part’’ and inserting ‘‘furnishing a
service for which payment may be made under such
title’’.
(2) PHYSICAL, OCCUPATIONAL, AND
SPEECH
THERAPY.—Subsections (a) and (d)(1) of section
4206 of the Balanced Budget Act of 1997 (42
U.S.C. 1395l note) are each amended by adding at
the end the following new sentence: ‘‘For purposes
of the preceding sentence, the term ‘practitioner’
shall include physical, occupational, and speech
therapists.’’.
(3) TELEHEALTH CONSULTATION USING STORE
AND FORWARD TECHNOLOGY.—Section 4206(a) of
the Balanced Budget Act of 1997 (42 U.S.C. 1395l
note), as amended by paragraph (2), is further
amended by adding at the end the following new
sentence: ‘‘Payment shall also be made under this
section for professional consultations utilizing tech-
nology that provides for the asynchronous trans-
mission of health care information, in single or
multimedia formats, for the objective of any or all
of the following:
(1) Medical diagnosis.
(2) Medical treatment.
(3) Medical education.’’.
(b) MEDICARE REIMBURSEMENT FOR TELEHEALTH
SERVICES IN ALL RURAL AREAS.—Section 4206 of the
Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is
amended—
(1) in subsection (a), by striking ‘‘that is des-
ignated as a health professional shortage area under
section 332(a)(1)(A) of the Public Health Service
Act (42 U.S.C. 254e(a)(1)(A))’’ and inserting ‘‘or a
county that is not otherwise included in a Metropoli-
tan Statistical Area’’; and
(2) in subsection (d), by striking ‘‘who does not
reside in a rural area (as so defined) that is des-
ignated as a health professional shortage area under
section 332(a)(1)(A) of the Public Health Service
Act (42 U.S.C. 254e(a)(1)(A))’’ and inserting ‘‘who
resides in a county in a rural area (as so defined)
or a county that is not otherwise included in a Met-
ropolitan Statistical Area’’.
(c) PERMITTING PRESENTATION
OF PATIENT
BY
HEALTH CARE PROVIDERS.—Section 4206(a) of the
Balanced Budget Act of 1997 (42 U.S.C. 1395l note), as
amended by subsection (a), is further amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a) IN GEN-
ERAL.—’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2)(A) In the case of telehomecare (as described in
subparagraph (D)) a registered nurse, acting under the
directions of a physician or practitioner, may present the
beneficiary for the professional consultation. In the case
of such a presentation the presence of a referring or con-
sulting physician or practitioner is not required.
‘‘(B) Telehomecare may be furnished in areas other
than in rural areas.
‘‘(C) In this section, the term ‘‘registered nurse’’
means a registered nurse who is licensed to practice nurs-
ing in the State in which the professional consultation is
performed and is operating within the scope of such li-
cense.
‘‘(D) 
For 
purposes 
of 
subparagraph 
(A),
telehomecare consists of certain home health services fur-
nished using a electronic device capable of two-way audio
and video transmissions, and capable of monitoring and
transmitting vital statistics of a patient, including meas-
uring blood pressure and temperature of a patient.’’.
(d) REVISION OF PAYMENT METHODOLOGY.—Sec-
tion 4206(b) of the Balanced Budget Act of 1997 (42
U.S.C. 1395l note) is amended—
(1) by redesignating paragraphs (1), (2), (3),
and (4) as subparagraphs (A), (B), (C), and (D), re-
spectively;
(2) by inserting ‘‘(1)’’ before ‘‘Taking into ac-
count’’;
(3) in subparagraph (A), as so redesignated, to
read as follows:
‘‘(A) The payment shall be made under a fee
schedule established by the Secretary that provides
for payment for the referring physician or practi-
tioner and for the consulting physician or practi-
tioner. If the referring physician or practitioner de-
termines it appropriate, such referring physician or
practitioner may be present during the professional
consultation. The amount of the payment to the
physicians or practitioners shall not be greater than
the current fee schedule of such consulting physician
or practitioner for the health care services pro-
vided.’’;
(2) in subparagraph (B), to read as follows:
‘‘(B) The payment shall include payment to a
provider of services for the costs associated with pro-
fessional consultation via telecommunications sys-
tems. Such costs shall include facility fees, costs of
maintenance of telehealth equipment and of tele-
communications facilities, and costs of staff incurred
in furnishing such professional consultations. In no
case may a beneficiary be billed for any such charges
or fees.’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(2) The Secretary shall permit the imposition of
beneficiary cost sharing in the form of a copayment, not
to exceed $15 per visit. In the case of any copayment im-
posed under the preceding sentence, the Secretary shall
require the provision of notice to the individual requesting
such services prior to the furnishing of such services.
‘‘(3) The Secretary shall establish a separate code (or
codes) for purposes of claims for payment for items and
services furnished under this section.’’.
(e) REPORTS TO CONGRESS.—Section 4206 of the
Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is
amended by adding at the end the following new sub-
section:
‘‘(e) ADDITIONAL REPORTS TO CONGRESS.—
‘‘(1) INITIAL REPORT.—Not later than August
1, 2003, the Secretary of Health and Human Serv-
ices shall prepare and submit to the appropriate
committees of Congress a report concerning—
‘‘(A) the number, percentage, and types of
health care providers licensed to provide tele-
health services across State lines, including the
number and types of health care providers li-
censed to provide such services in more than
three States;
‘‘(B) the status of any reciprocal, mutual
recognition, fast-track, or other licensure agree-
ments between or among various States;
‘‘(C) the status of any efforts to develop
uniform national sets of standards for the licen-
sure of health care providers to provide tele-
health services across State lines;
‘‘(D) a projection of future utilization of
telehealth consultations across State lines;
‘‘(E) State efforts to increase or reduce li-
censure as a burden to interstate telehealth
practice; and
‘‘(F) any State licensure requirements that
appear to constitute unnecessary barriers to the
provision of telehealth services across State
lines.
‘‘(2) ANNUAL REPORT.—
‘‘(A) IN GENERAL.—Not later than August
1, 2004, and each July 1 thereafter, the Sec-
retary of Health and Human Services shall pre-
pare and submit to the appropriate committees
of Congress, an annual report on relevant devel-
opments concerning the matters referred to in
subparagraphs (A) through (F) of paragraph
(1).
‘‘(B) RECOMMENDATIONS.—If, with re-
spect to a report submitted under subparagraph
(A), the Secretary of Health and Human Serv-
ices determines that States are not making
progress in facilitating the provision of tele-
health services across State lines by eliminating
unnecessary requirements, adopting reciprocal
licensing arrangements for telehealth services,
implementing uniform requirements for tele-
health licensure, or other means, the Secretary
shall include in the report recommendations
concerning the scope and nature of Federal ac-
tions required to reduce licensure as a barrier
to the interstate provision of telehealth services.
(f) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of enactment of
this Act.
SEC. 502. JOINT WORKING GROUP ON TELEHEALTH.
(a) IN GENERAL.—
(1) 
REDESIGNATION.—The 
Joint 
Working
Group on Telemedicine, established by the Secretary
of Health and Human Services, shall hereafter be
known as the ‘‘Joint Working Group on Telehealth’’
with the chairperson being designated by the Office
for the Advancement on Telehealth.
(2) REPRESENTATION OF RURAL AREAS.—The
Joint Working Group on Telehealth shall ensure
that individuals that represent the interests of rural
areas are members of the Group.
(3) MISSION.—The mission of the Joint Work-
ing Group on Telehealth is—
(A) to identify, monitor, and coordinate
Federal telehealth projects, data sets, and pro-
grams;
(B) to analyze—
(i) how telehealth systems are expand-
ing access to health care services, edu-
cation, and information;
(ii) the clinical, educational, or admin-
istrative efficacy and cost-effectiveness of
telehealth applications; and
(iii) the quality of the telehealth serv-
ices delivered; and
(C) to make further recommendations for
coordinating Federal and State efforts to in-
crease access to health services, education, and
information in rural and underserved areas.
(4) ANNUAL
REPORTS.—Not later than two
years after the date of enactment of this Act and
each January 1 thereafter the Joint Working Group
on Telehealth shall report to Congress on the status
of the Group’s mission and the state of the tele-
health field generally.
(b) REPORT SPECIFICS.—The annual report required
under subsection (a)(3) shall provide—
(1) an analysis of—
(A) the matters described in subsection
(a)(3)(B);
(B) the Federal activities with respect to
telehealth; and
(C) the progress of the Joint Working
Group on Telehealth’s efforts to coordinate
Federal telehealth programs; and
(2) recommendations for a coordinated Federal
strategy to increase health care access through tele-
health.
(c) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as are nec-
essary for the Joint Working Group on Telehealth to carry
out this section.
Subtitle B—Development of
Telehealth Networks
SEC. 511. DEVELOPMENT.
(a) IN GENERAL.—The Secretary of Health and
Human Services (in this subtitle referred to as the ‘‘Sec-
retary’’), acting through the Director of the Office for the
Advancement of Telehealth (of the Health Resources and
Services Administration), shall provide financial assistance
(as described in subsection (b)(1)) to recipients (as de-
scribed in subsection (c)(1)) for the purpose of expanding
access to health care services for individuals in rural and
frontier areas through the use of telehealth.
(b) FINANCIAL ASSISTANCE.—
(1) IN
GENERAL.—Financial assistance shall
consist of grants or cost of money loans, or both.
(2) FORM.—The Secretary shall determine the
portion of the financial assistance provided to a re-
cipient that consists of grants and the portion that
consists of cost of money loans so as to result in the
maximum feasible repayment to the Federal Govern-
ment of the financial assistance, based on the ability
of the recipient to repay and full utilization of funds
made available to carry out this subtitle.
(3) LOAN FORGIVENESS PROGRAM.—
(A) ESTABLISHMENT.—With respect to
cost of money loans provided under this section,
the Secretary shall establish a loan forgiveness
program under which recipients of such loans
may apply to have all or a portion of such loans
forgiven.
(B) 
REQUIREMENTS.—A 
recipient 
de-
scribed in subparagraph (A) that desires to
have a loan forgiven under the program estab-
lished under such paragraph shall—
(i) within 180 days of the end of the
loan cycle, submit an application to the
Secretary requesting forgiveness of the
loan involved;
(ii) demonstrate that the recipient has
a financial need for such forgiveness;
(iii) demonstrate that the recipient
has met the quality and cost-appropriate-
ness criteria developed under subparagraph
(C); and
(iv) provide any other information de-
termined appropriate by the Secretary.
(C) CRITERIA.—As part of the program
established under subparagraph (A), the Sec-
retary shall establish criteria for determining
the cost-effectiveness and quality of programs
operated with loans provided under this section.
(c) RECIPIENTS.—
(1) APPLICATION.—To be eligible to receive a
grant or loan under this section an entity described
in paragraph (2) shall, in consultation with the
State office of rural health or other appropriate
State entity, prepare and submit to the Secretary an
application, at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including—
(A) a description of the anticipated need
for the grant or loan;
(B) a description of the activities which the
entity intends to carry out using amounts pro-
vided under the grant or loan;
(C) a plan for continuing the project after
Federal support under this section is ended;
(D) a description of the manner in which
the activities funded under the grant or loan
will meet health care needs of underserved rural
populations within the State;
(E) a description of how the local commu-
nity or region to be served by the network or
proposed network will be involved in the devel-
opment and ongoing operations of the network;
(F) the source and amount of non-Federal
funds the entity would pledge for the project;
and
(G) a showing of the long-term viability of
the project and evidence of health care provider
commitment to the network.
The application should demonstrate the manner in
which the project will promote the integration of
telehealth in the community so as to avoid redun-
dancy of technology and achieve economies of scale.
(2) ELIGIBLE ENTITIES.—An entity described
in this paragraph is a hospital or other health care
provider in a health care network of community-
based health care providers that includes at least—
(A) two of the following:
(i) community or migrant health cen-
ters;
(ii) local health departments;
(iii) nonprofit hospitals;
(iv) private practice health profes-
sionals, including rural health clinics;
(v) other publicly funded health or so-
cial services agencies;
(vi) skilled nursing facilities;
(vii) county mental health and other
publicly funded mental health facilities;
and
(viii) providers of home health serv-
ices; and
(B) one of the following, which must dem-
onstrate use of the network for purposes of
education and economic development (as re-
quired by the Secretary):
(i) a public school;
(ii) a public library;
(iii) a university or college;
(iv) a local government entity; or
(v) a local nonhealth-related business
entity.
An eligible entity may include for-profit entities so
long as the network grantee is a nonprofit entity.
(d) PRIORITY.—The Secretary shall establish proce-
dures to prioritize financial assistance under this subtitle
considering whether or not the applicant—
(1) is a health care provider in a rural health
care network or a health care provider that proposes
to form such a network, and the majority of the
health care providers in such a network are located
in a medically underserved, health professional
shortage area, or mental health professional short-
age areas;
(2) can demonstrate broad geographic coverage
in the rural areas of the State, or States in which
the applicant is located;
(3) proposes to use Federal funds to develop
plans for, or to establish, telehealth systems that will
link rural hospitals and rural health care providers
to other hospitals, health care providers, and pa-
tients;
(4) will use the amounts provided for a range
of health care applications and to promote greater
efficiency in the use of health care resources;
(5) can demonstrate the long-term viability of
projects through cost participation (cash or in-kind);
(6) can demonstrate financial, institutional, and
community support for the long-term viability of the
network; and
(7) can demonstrate a detailed plan for coordi-
nating system use by eligible entities so that health
care services are given a priority over non-clinical
uses.
(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDI-
VIDUAL RECIPIENTS.—The Secretary may establish the
maximum amount of financial assistance to be made avail-
able to an individual recipient for each fiscal year under
this subtitle, and establish the term of the loan or grant,
by publishing notice of the maximum amount in the Fed-
eral Register.
(f) USE OF AMOUNTS.—
(1) IN
GENERAL.—Financial assistance pro-
vided under this subtitle shall be used—
(A) with respect to cost of money loans, to
encourage the initial development of rural tele-
health networks, expand existing networks, or
link existing networks together; and
(B) with respect to grants, as described in
paragraph (2).
(2) GRANTS AND LOANS.—The recipient of a
grant or loan under this subtitle may use financial
assistance received under such grant or loan for the
acquisition of telehealth equipment and modifica-
tions or improvements of telecommunications facili-
ties including—
(A) 
the 
development 
and 
acquisition
through lease or purchase of computer hard-
ware and software, audio and video equipment,
computer network equipment, interactive equip-
ment, data terminal equipment, and other fa-
cilities and equipment that would further the
purposes of this section;
(B) the provision of technical assistance
and instruction for the development and use of
such programming equipment or facilities;
(C) the development and acquisition of in-
structional programming;
(D) demonstration projects for teaching or
training medical students, residents, and other
health profession students in rural training
sites about the application of telehealth;
(E) transmission costs, maintenance of
equipment, and compensation of specialists and
referring health care providers;
(F) development of projects to use tele-
health to facilitate collaboration between health
care providers;
(G) electronic archival of patient records;
(H) collection and analysis of usage statis-
tics and data that can be used to document the
cost-effectiveness of the telehealth services; or
(I) such other uses that are consistent with
achieving the purposes of this section as ap-
proved by the Secretary.
(3) EXPENDITURES
IN
RURAL
AREAS.—In
awarding a grant or cost of money loan under this
section, the Secretary shall ensure that not less than
50 percent of the grant or loan award is expended
in a rural area or to provide services to residents of
rural areas.
(g) PROHIBITED USES.—Financial assistance re-
ceived under this section may not be used for any of the
following:
(1) To build or acquire real property.
(2) In the case of the grant program, expendi-
tures to purchase or lease equipment to the extent
the expenditures would exceed more than 40 percent
of the total grant funds.
(3) To purchase or install transmission equip-
ment (such as laying cable or telephone lines, micro-
wave towers, satellite dishes, amplifiers, and digital
switching equipment).
(4) For construction, except that such funds
may be expended for minor renovations relating to
the installation of equipment.
(5) Expenditures for indirect costs (as deter-
mined by the Secretary) to the extent the expendi-
tures would exceed more than 20 percent of the total
grant or loan.
SEC. 512. ADMINISTRATION.
(a) NONDUPLICATION.—The Secretary shall ensure
that facilities constructed using financial assistance pro-
vided under this subtitle do not duplicate adequately es-
tablished telehealth networks.
(b) LOAN MATURITY.—The maturities of cost of
money loans shall be determined by the Secretary, based
on the useful life of the facility being financed, except that
the loan shall not be for a period of more than 10 years.
(c) LOAN SECURITY AND FEASIBILITY.—The Sec-
retary shall make a cost of money loan only if the Sec-
retary determines that the security for the loan is reason-
ably adequate and that the loan will be repaid within the
period of the loan.
(d) COORDINATION WITH OTHER AGENCIES.—The
Secretary shall coordinate, to the extent practicable, with
other Federal and State agencies with similar grant or
loan programs to pool resources for funding meritorious
proposals in rural areas.
(e) INFORMATIONAL EFFORTS.—The Secretary shall
establish and implement procedures to carry out informa-
tional efforts to advise potential end users located in rural
areas of each State about the program authorized by this
subtitle.
SEC. 513. GUIDELINES.
Not later than 180 days after the date of enactment
of this Act, the Secretary shall issue guidelines to carry
out this subtitle.
SEC. 514. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out
this subtitle, $25,000,000 for fiscal year 2000, and such
sums as may be necessary for each of the fiscal years 2001
through 2006.
Æ