H. R. 6331—18 
(Public Law 110–173) for the sole purpose of providing outreach 
to individuals regarding the benefits available under the Medicare 
prescription drug benefit under part D of title XVIII of the Social 
Security Act. The Secretary shall republish the request for proposals 
issued on April 17, 2008, in order to comply with the preceding 
sentence. 
(f) MEDICARE SAVINGS PROGRAM DEFINED.—For purposes of 
this section, the term ‘‘Medicare Savings Program’’ means the pro-
gram of medical assistance for payment of the cost of medicare 
cost-sharing under the Medicaid program pursuant to sections 
1902(a)(10)(E) and 1933 of the Social Security Act (42 U.S.C. 
1396a(a)(10)(E), 1396u–3). 
Subtitle B—Provisions Relating to Part A 
SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE RURAL HOS-
PITAL FLEXIBILITY PROGRAM. 
(a) IN GENERAL.—Section 1820(g) of the Social Security Act 
(42 U.S.C. 1395i–4(g)) is amended by adding at the end the following 
new paragraph: 
‘‘(6) PROVIDING
MENTAL
HEALTH
SERVICES
AND
OTHER 
HEALTH SERVICES TO VETERANS AND OTHER RESIDENTS OF RURAL 
AREAS.— 
‘‘(A) GRANTS TO STATES.—The Secretary may award 
grants to States that have submitted applications in accord-
ance with subparagraph (B) for increasing the delivery 
of mental health services or other health care services 
deemed necessary to meet the needs of veterans of Oper-
ation Iraqi Freedom and Operation Enduring Freedom 
living in rural areas (as defined for purposes of section 
1886(d) and including areas that are rural census tracks, 
as defined by the Administrator of the Health Resources 
and Services Administration), including for the provision 
of crisis intervention services and the detection of post- 
traumatic stress disorder, traumatic brain injury, and other 
signature injuries of veterans of Operation Iraqi Freedom 
and Operation Enduring Freedom, and for referral of such 
veterans to medical facilities operated by the Department 
of Veterans Affairs, and for the delivery of such services 
to other residents of such rural areas. 
‘‘(B) APPLICATION.— 
‘‘(i) IN GENERAL.—An application is in accordance 
with this subparagraph if the State submits to the 
Secretary at such time and in such form as the Sec-
retary may require an application containing the assur-
ances described in subparagraphs (A)(ii) and (A)(iii) 
of subsection (b)(1). 
‘‘(ii) CONSIDERATION
OF
REGIONAL
APPROACHES, 
NETWORKS, OR TECHNOLOGY.—The Secretary may, as 
appropriate in awarding grants to States under 
subparagraph (A), consider whether the application 
submitted by a State under this subparagraph includes 
1 or more proposals that utilize regional approaches, 
networks, health information technology, telehealth, 
or telemedicine to deliver services described in 
subparagraph (A) to individuals described in that
H. R. 6331—19 
subparagraph. For purposes of this clause, a network 
may, as the Secretary determines appropriate, include 
Federally qualified health centers (as defined in section 
1861(aa)(4)), rural health clinics (as defined in section 
1861(aa)(2)), home health agencies (as defined in sec-
tion 1861(o)), community mental health centers (as 
defined in section 1861(ff)(3)(B)) and other providers 
of mental health services, pharmacists, local govern-
ment, and other providers deemed necessary to meet 
the needs of veterans. 
‘‘(iii) COORDINATION
AT
LOCAL
LEVEL.—The Sec-
retary shall require, as appropriate, a State to dem-
onstrate consultation with the hospital association of 
such State, rural hospitals located in such State, pro-
viders of mental health services, or other appropriate 
stakeholders for the provision of services under a grant 
awarded under this paragraph. 
‘‘(iv) SPECIAL CONSIDERATION OF CERTAIN APPLICA-
TIONS.—In awarding grants to States under subpara-
graph (A), the Secretary shall give special consideration 
to applications submitted by States in which veterans 
make up a high percentage (as determined by the 
Secretary) of the total population of the State. Such 
consideration shall be given without regard to the 
number of veterans of Operation Iraqi Freedom and 
Operation Enduring Freedom living in the areas in 
which mental health services and other health care 
services would be delivered under the application. 
‘‘(C) COORDINATION WITH VA.—The Secretary shall, as 
appropriate, consult with the Director of the Office of Rural 
Health of the Department of Veterans Affairs in awarding 
and administering grants to States under subparagraph 
(A). 
‘‘(D) USE OF FUNDS.—A State awarded a grant under 
this paragraph may, as appropriate, use the funds to 
reimburse providers of services described in subparagraph 
(A) to individuals described in that subparagraph. 
‘‘(E) LIMITATION ON USE OF GRANT FUNDS FOR ADMINIS-
TRATIVE EXPENSES.—A State awarded a grant under this 
paragraph may not expend more than 15 percent of the 
amount of the grant for administrative expenses. 
‘‘(F) INDEPENDENT EVALUATION AND FINAL REPORT.— 
The Secretary shall provide for an independent evaluation 
of the grants awarded under subparagraph (A). Not later 
than 1 year after the date on which the last grant is 
awarded to a State under such subparagraph, the Secretary 
shall submit a report to Congress on such evaluation. Such 
report shall include an assessment of the impact of such 
grants on increasing the delivery of mental health services 
and other health services to veterans of the United States 
Armed Forces living in rural areas (as so defined and 
including such areas that are rural census tracks), with 
particular emphasis on the impact of such grants on the 
delivery of such services to veterans of Operation Enduring 
Freedom and Operation Iraqi Freedom, and to other 
individuals living in such rural areas.’’.
H. R. 6331—20 
(b) USE OF FUNDS FOR FEDERAL ADMINISTRATIVE EXPENSES.— 
Section 1820(g)(5) of the Social Security Act (42 U.S.C. 1395i– 
4(g)(5)) is amended— 
(1) by striking ‘‘beginning with fiscal year 2005’’ and 
inserting ‘‘for each of fiscal years 2005 through 2008’’; and 
(2) by inserting ‘‘and, of the total amount appropriated 
for grants under paragraphs (1), (2), and (6) for a fiscal year 
(beginning with fiscal year 2009)’’ after ‘‘2005)’’. 
(c) EXTENSION OF AUTHORIZATION FOR FLEX GRANTS.—Section 
1820(j) of the Social Security Act (42 U.S.C. 1395i–4(j)) is 
amended— 
(1) by striking ‘‘and for’’ and inserting ‘‘for’’; and 
(2) by inserting ‘‘, for making grants to all States under 
paragraphs (1) and (2) of subsection (g), $55,000,000 in each 
of fiscal years 2009 and 2010, and for making grants to all 
States under paragraph (6) of subsection (g), $50,000,000 in 
each of fiscal years 2009 and 2010, to remain available until 
expended’’ before the period at the end. 
(d) MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.—Section 
1820(g)(1) of the Social Security Act (42 U.S.C. 1395i–4(g)(1)) is 
amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at the end; 
(2) in subparagraph (C), by striking the period at the 
end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new subparagraph: 
‘‘(D) providing support for critical access hospitals for 
quality 
improvement, 
quality 
reporting, 
performance 
improvements, and benchmarking.’’. 
(e) ASSISTANCE
TO
SMALL
CRITICAL
ACCESS
HOSPITALS 
TRANSITIONING
TO SKILLED NURSING FACILITIES
AND ASSISTED 
LIVING FACILITIES.—Section 1820(g) of the Social Security Act (42 
U.S.C. 1395i–4(g)), as amended by subsection (a), is amended by 
adding at the end the following new paragraph: 
‘‘(7) CRITICAL ACCESS HOSPITALS TRANSITIONING TO SKILLED 
NURSING FACILITIES AND ASSISTED LIVING FACILITIES.— 
‘‘(A) GRANTS.—The Secretary may award grants to 
eligible critical access hospitals that have submitted 
applications in accordance with subparagraph (B) for 
assisting such hospitals in the transition to skilled nursing 
facilities and assisted living facilities. 
‘‘(B) APPLICATION.—An applicable critical access hos-
pital seeking a grant under this paragraph shall submit 
an application to the Secretary on or before such date 
and in such form and manner as the Secretary specifies. 
‘‘(C) ADDITIONAL REQUIREMENTS.—The Secretary may 
not award a grant under this paragraph to an eligible 
critical access hospital unless— 
‘‘(i) local organizations or the State in which the 
hospital is located provides matching funds; and 
‘‘(ii) the hospital provides assurances that it will 
surrender critical access hospital status under this title 
within 180 days of receiving the grant. 
‘‘(D) AMOUNT OF GRANT.—A grant to an eligible critical 
access hospital under this paragraph may not exceed 
$1,000,000. 
‘‘(E) FUNDING.—There are appropriated from the Fed-
eral Hospital Insurance Trust Fund under section 1817
H. R. 6331—21 
for making grants under this paragraph, $5,000,000 for 
fiscal year 2008. 
‘‘(F) ELIGIBLE CRITICAL ACCESS HOSPITAL DEFINED.— 
For purposes of this paragraph, the term ‘eligible critical 
access hospital’ means a critical access hospital that has 
an average daily acute census of less than 0.5 and an 
average daily swing bed census of greater than 10.0.’’. 
SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS. 
(a) REBASING PERMITTED.—Section 1886(b)(3) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at 
the end the following new subparagraph: 
‘‘(L)(i) For cost reporting periods beginning on or after January 
1, 2009, in the case of a sole community hospital there shall be 
substituted for the amount otherwise determined under subsection 
(d)(5)(D)(i) of this section, if such substitution results in a greater 
amount of payment under this section for the hospital, the subpara-
graph (L) rebased target amount. 
‘‘(ii) For purposes of this subparagraph, the term ‘subparagraph 
(L) rebased target amount’ has the meaning given the term ‘target 
amount’ in subparagraph (C), except that— 
‘‘(I) there shall be substituted for the base cost reporting 
period the 12-month cost reporting period beginning during 
fiscal year 2006; 
‘‘(II) any reference in subparagraph (C)(i) to the ‘first cost 
reporting period’ described in such subparagraph is deemed 
a reference to the first cost reporting period beginning on 
or after January 1, 2009; and 
‘‘(III) the applicable percentage increase shall only be 
applied under subparagraph (C)(iv) for discharges occurring 
on or after January 1, 2009.’’. 
(b) CONFORMING AMENDMENTS.—Section 1886(b)(3) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)) is amended— 
(1) in subparagraph (C), in the matter preceding clause 
(i), by striking ‘‘subparagraph (I)’’ and inserting ‘‘subparagraphs 
(I) and (L)’’; and 
(2) in subparagraph (I)(i), in the matter preceding subclause 
(I), by striking ‘‘For’’ and inserting ‘‘Subject to subparagraph 
(L), for’’. 
SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY HEALTH 
INTEGRATION MODELS IN CERTAIN RURAL COUNTIES. 
(a) IN GENERAL.—The Secretary shall establish a demonstration 
project to allow eligible entities to develop and test new models 
for the delivery of health care services in eligible counties for 
the purpose of improving access to, and better integrating the 
delivery of, acute care, extended care, and other essential health 
care services to Medicare beneficiaries. 
(b) PURPOSE.—The purpose of the demonstration project under 
this section is to— 
(1) explore ways to increase access to, and improve the 
adequacy of, payments for acute care, extended care, and other 
essential health care services provided under the Medicare 
and Medicaid programs in eligible counties; and 
(2) evaluate regulatory challenges facing such providers 
and the communities they serve. 
(c) REQUIREMENTS.—The following requirements shall apply 
under the demonstration project: