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the date on which regulations are issued under section
1833(p) of the Social Security Act (42 U.S.C. 1395l(p)).
TITLE IV—MEDICARE RURAL
HEALTH CLINICS
SEC. 401. PER-VISIT PAYMENT LIMITS FOR PROVIDER-
BASED CLINICS.
(a) EXTENSION OF LIMIT.—
(1) AMENDMENT.—The matter in section
1833(f) (42 U.S.C. 1395l(f)) preceding paragraph
(1) is amended by striking ‘‘independent rural
health clinics’’ and inserting ‘‘rural health clinics
(other than such clinics in rural hospitals with less
than 50 beds)’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to services furnished after
1997.
(b) TECHNICAL CLARIFICATION.—Section 1833(f)(1)
(42 U.S.C. 1395l(f)(1)) is amended by inserting ‘‘per
visit’’ after ‘‘$46’’.
SEC. 402. ASSURANCE OF QUALITY SERVICES.
(a) IN GENERAL.—Subparagraph (I) of the first sen-
tence of section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is
amended to read as follows:
‘‘(I) has a quality assessment and performance
improvement program, and appropriate procedures
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for review of utilization of clinic services, as the Sec-
retary may specify,’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1998.
SEC. 403. WAIVER OF CERTAIN STAFFING REQUIREMENTS
LIMITED TO CLINICS IN PROGRAM.
(a) IN
GENERAL.—Section 1861(aa)(7)(B) (42
U.S.C. 1395x(aa)(7)(B)) is amended by inserting ‘‘, or if
the facility has not yet been determined to meet the re-
quirements (including subparagraph (J) of the first sen-
tence of paragraph (2)) of a rural health clinic.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to waiver requests made after 1997.
SEC. 404. REFINEMENT OF SHORTAGE AREA REQUIRE-
MENTS.
(a) DESIGNATION REVIEWED TRIENNIALLY.—Sec-
tion 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended in
the second sentence, in the matter in clause (i) preceding
subclause (I)—
(1) by striking ‘‘and that is designated’’ and in-
serting ‘‘and that, within the previous three-year pe-
riod, has been designated’’; and
(2) by striking ‘‘or that is designated’’ and in-
serting ‘‘or designated’’.
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(b) AREA MUST HAVE SHORTAGE OF HEALTH CARE
PRACTITIONERS.—Section 
1861(aa)(2) 
(42 
U.S.C.
1395x(aa)(2)), as amended by subsection (a), is further
amended in the second sentence, in the matter in clause
(i) preceding subclause (I)—
(1) by striking the comma after ‘‘personal
health services’’; and
(2) by inserting ‘‘and in which there are insuffi-
cient numbers of needed health care practitioners
(as determined by the Secretary),’’ after ‘‘Bureau of
the Census)’’.
(c) PREVIOUSLY
QUALIFYING
CLINICS
GRAND-
FATHERED
ONLY
TO
PREVENT
SHORTAGE.—Section
1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended in the
third sentence by inserting before the period ‘‘if it is deter-
mined, in accordance with criteria established by the Sec-
retary in regulations, to be essential to the delivery of pri-
mary care services that would otherwise be unavailable in
the geographic area served by the clinic’’.
(d) EFFECTIVE DATES; IMPLEMENTING REGULA-
TIONS.—
(1) IN
GENERAL.—Except as otherwise pro-
vided, the amendments made by the preceding sub-
sections take effect on January 1 of the first cal-
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endar year beginning at least one month after enact-
ment of this Act.
(2) CURRENT
RURAL
HEALTH
CLINICS.—The
amendments made by the preceding subsections take
effect, with respect to entities that are rural health
clinics under title XVIII of the Social Security Act
on the date of enactment of this Act, on January 1
of the second calendar year following the calendar
year specified in paragraph (1).
(3) GRANDFATHERED CLINCS.—
(A) IN GENERAL.—The amendment made
by subsection (c) shall take effect on the effec-
tive date of regulations issued by the Secretary
under subparagraph (B).
(B) REGULATIONS.—The Secretary shall
issue final regulations implementing subsection
(c) that shall take effect no later than January
1 of the third calendar year beginning at least
one month after enactment of this Act.
SEC. 405. DECREASED BENEFICIARY COST SHARING FOR
RHC SERVICES.
(a) IN GENERAL.—Clause (ii) of the second sentence
of section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is
amended by striking ‘‘pursuant to subsections (a) and (b)
of section 1833’’ and inserting ‘‘described in section
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1833(b) or clause (ii) of the first sentence of section
1866(a)(2)(A) (but any coinsurance amount shall not ex-
ceed 20 percent of the limit described in section 1833(f),
and no coinsurance amount shall be imposed for items and
services described in section 1861(s)(10)(A))’’.
(b) CONFORMING AND TECHNICAL AMENDMENT.—
Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is amended
to read as follows:
‘‘(3)(A) in the case of rural health clinic serv-
ices, the costs which—
‘‘(i) are (I) reasonable and related to the
cost of furnishing such services or (II) based on
such other tests of reasonableness as the Sec-
retary may prescribe in regulations, including
those authorized under section 1861(v)(1)(A);
‘‘(ii) do not exceed the limit under sub-
section (f);
‘‘(iii) are reduced by any deductible or co-
insurance amount a clinic or center may charge
as described in clause (ii) of the second sen-
tence of section 1861(aa)(2); and
‘‘(iv) do not exceed 80 percent of such
costs determined under the preceding clauses
(other than for items and services described in
section 1861(s)(10)(A)); and
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‘‘(B) in the case of Federally qualified health
center services and services described in subpara-
graph (E) of section 1832(a)(2), the costs which—
‘‘(i) are (I) reasonable and related to the
cost of furnishing such services or (II) based on
such other tests of reasonableness as the Sec-
retary may prescribe in regulations, including
those authorized under section 1861(v)(1)(A);
‘‘(ii) are reduced by the amount a provider
may charge as described in clause (ii) of section
1866(a)(2)(A); and
‘‘(iii) do not exceed 80 percent of such
costs determined under the preceding clauses
(other than for items and services described in
section 1861(s)(10)(A));’’.
(c) EFFECTIVE DATE.—The amendments made by
the preceding subsections apply to services furnished after
1997.
SEC. 406. PROSPECTIVE PAYMENT SYSTEM FOR RHC SERV-
ICES.
(a) ESTABLISHMENT OF SYSTEM.—Section 1833 (42
U.S.C. 1395l) is amended by adding at the end the follow-
ing new subsection:
‘‘(t) RURAL HEALTH CLINIC SERVICES.—