I 
108TH CONGRESS 
1ST SESSION H. R. 2333
To amend title XVIII of the Social Security Act and the Public Health 
Service Act to improve outpatient health care for Medicare beneficiaries 
who reside in rural areas, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 4, 2003
Mr. MORAN of Kansas (for himself, Mr. POMEROY, Mr. BEREUTER, Mr. 
OSBORNE, Mr. MCINTYRE, Mrs. EMERSON, Mr. PETERSON of Pennsyl-
vania, Mr. WALDEN of Oregon, Mr. TOWNS, Mr. BERRY, Mr. KIND, Mr. 
TURNER of Texas, Mr. LEACH, Mr. ALEXANDER, Mr. MARSHALL, Mr. 
UDALL of New Mexico, Mr. EDWARDS, Mr. KING of Iowa, and Mr. 
NUNES) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act and the 
Public Health Service Act to improve outpatient health 
care for Medicare beneficiaries who reside in rural areas, 
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; AMENDMENTS TO SOCIAL SECU-
RITY ACT; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Rural Provider Equity Act of 2003’’. 
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this 
Act an amendment is expressed in terms of an amendment 
to or repeal of a section or other provision, the reference 
shall be considered to be made to that section or other 
provision of the Social Security Act. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; amendments to Social Security Act; table of contents. 
Sec. 2. Rural physician reimbursement improvements. 
Sec. 3. Physician assistant, nurse practitioner, and clinical nurse specialist im-
provements. 
Sec. 4. Rural health clinic improvements. 
Sec. 5. Permanent increase for home health services furnished in a rural area. 
Sec. 6. Rural community health center improvements. 
Sec. 7. Ensuring appropriate coverage of ambulance services under ambulance 
fee schedule. 
Sec. 8. Rural mental health care accessibility improvements. 
Sec. 9. Rural health services research improvements. 
Sec. 10. Exclusion for loan payments under National Health Service Corps loan 
repayment program.
SEC. 2. RURAL PHYSICIAN REIMBURSEMENT IMPROVE-
MENTS. 
(a) MEDICARE INCENTIVE PAYMENT PROGRAM IM-
PROVEMENTS.—
(1) PROCEDURES FOR SECRETARY, AND NOT 
PHYSICIANS, TO
DETERMINE
WHEN
BONUS
PAY-
MENTS UNDER MEDICARE INCENTIVE PAYMENT PRO-
GRAM
SHOULD
BE
MADE.—Section 1833(m) (42 
U.S.C. 1395l(m)) is amended—
(A) by inserting ‘‘(1)’’ after ‘‘(m)’’; and 
(B) 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).’’. 
(2) EDUCATIONAL PROGRAM REGARDING THE 
MEDICARE
INCENTIVE
PAYMENT
PROGRAM.—The 
Secretary of Health and Human Services shall es-
tablish and implement an ongoing educational pro-
gram to provide education to physicians under the 
medicare program on the medicare incentive pay-
ment program under section 1833(m) of the Social 
Security Act (42 U.S.C. 1395l(m)). 
(3) ONGOING STUDY AND ANNUAL REPORT ON 
THE MEDICARE INCENTIVE PAYMENT PROGRAM.—
(A) ONGOING
STUDY.—The Secretary of 
Health and Human Services shall conduct an 
ongoing study on the medicare incentive pay-
ment program under section 1833(m) of the 
Social Security Act (42 U.S.C. 1395l(m)). Such 
study shall focus on whether such program in-
creases the access of medicare beneficiaries who 
reside in an area that is designated (under sec-
tion 332(a)(1)(A) of the Public Health Service 
Act (42 U.S.C. 254e(a)(1)(A))) as a health pro-
fessional shortage area to physicians’ services 
under the medicare program. 
(B) 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 
subparagraph (A), together with recommenda-
tions for such legislation and administrative ac-
tions as the Secretary considers appropriate. 
(b) PHYSICIAN FEE SCHEDULE WAGE INDEX REVI-
SION.—Section 1848(e)(1) (42 U.S.C. 1395w–4(e)(1)) is 
amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graphs (B) and (C)’’ and inserting ‘‘subparagraphs 
(B), (C), and (E)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(E) FLOOR FOR WORK GEOGRAPHIC INDI-
CES.—Notwithstanding the work geographic 
index otherwise calculated under subparagraph
(A)(iii), in no case may the work geographic 
index applied for payment under this section be 
less than—
‘‘(i) 0.976 for services furnished dur-
ing 2004; 
‘‘(ii) 0.987 for services furnished dur-
ing 2005; 
‘‘(iii) 0.995 for services furnished dur-
ing 2006; and 
‘‘(iv) 1.000 for services furnished dur-
ing 2007 and subsequent years.’’. 
SEC. 3. PHYSICIAN ASSISTANT, NURSE PRACTITIONER, AND 
CLINICAL 
NURSE 
SPECIALIST 
IMPROVE-
MENTS. 
(a) BROADENING MEDICARE BENEFICIARIES ACCESS 
TO HOME HEALTH SERVICES AND HOSPICE CARE.—Sec-
tion 1861(r) (42 U.S.C. 1395f(x)) is amended by adding 
at the end the following new sentences: ‘‘For purposes of 
sections 1814(a)(2)(C), 1814(a)(7)(B), 1835(a)(2)(A), 
1861(m), 1861(dd), and 1895(c)(1), the term ‘physician’ 
includes a nurse practitioner, a clinical nurse specialist, 
and a physician assistant (as such terms are defined in 
subsection (aa)(5)) who does not have a direct or indirect 
employment relationship with the home health agency or 
hospice program (as the case may be), and is legally au-
thorized to perform the services of a nurse practitioner, 
a clinical nurse specialist, or a physician assistant (as the 
case may be) in the jurisdiction in which the services are 
performed. For purposes of the preceding sentence, the 
provisions of section 1833(a)(1)(O) shall continue to apply 
with respect to amounts paid for services furnished by 
such a nurse practitioner, a clinical nurse specialist, and 
a physician assistant.’’. 
(b) 
SKILLED
NURSING
FACILITIES.—Section 
1819(b)(6) (42 U.S.C. 1395i–3(b)(6)) is amended—
(1) in the paragraph heading, by inserting ‘‘OR 
NURSE PRACTITIONER’’ after ‘‘PHYSICIAN’’; and 
(2) in subparagraph (A), by inserting ‘‘or nurse 
practitioner, including approving in writing a rec-
ommendation that an individual be admitted to a 
skilled nursing facility, admitting an individual to a 
skilled nursing facility, and performing the initial 
admitting assessment and all visits thereafter’’ be-
fore the semicolon. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2004. 
SEC. 4. RURAL HEALTH CLINIC IMPROVEMENTS. 
(a) IMPROVEMENT IN RURAL HEALTH CLINIC REIM-
BURSEMENT UNDER MEDICARE.—
(1) IN GENERAL.—Section 1833(f) (42 U.S.C. 
1395l(f)) is amended—
(A) in paragraph (1), by striking ‘‘, and’’ 
at the end and inserting a semicolon; 
(B) in paragraph (2)—
(i) by striking ‘‘in a subsequent year’’ 
and inserting ‘‘in 1989 through 2002’’; 
and
(ii) by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following new 
paragraphs: 
‘‘(3) in 2003, at $82 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.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to services furnished on 
or after January 1, 2003. 
(b) EXCLUSION OF CERTAIN RURAL HEALTH CLINIC 
AND FEDERALLY QUALIFIED HEALTH CENTER SERVICES 
FROM THE MEDICARE PROSPECTIVE PAYMENT SYSTEM 
FOR SKILLED NURSING FACILITIES.—
(1) IN GENERAL.—Section 1888(e)(2)(A) (42 
U.S.C. 1395yy(e)(2)(A)) is amended—
(A) in clause (i)(II), by striking ‘‘clauses 
(ii) and (iii)’’ and inserting ‘‘clauses (ii), (iii), 
and (iv)’’; and 
(B) by adding at the end the following new 
clause: 
‘‘(iv) EXCLUSION OF CERTAIN RURAL 
HEALTH CLINIC AND FEDERALLY QUALI-
FIED
HEALTH
CENTER
SERVICES.—Serv-
ices described in this clause are—
‘‘(I) rural health clinic services 
(as defined in paragraph (1) of sec-
tion 1861(aa)); and 
‘‘(II) Federally qualified health 
center services (as defined in para-
graph (3) of such section); 
that would be described in clause (ii) if 
such services were not furnished by an in-
dividual affiliated with a rural health clinic 
or a Federally qualified health center.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to services furnished on 
or after January 1, 2004.
SEC. 5. PERMANENT INCREASE FOR HOME HEALTH SERV-
ICES FURNISHED IN A RURAL AREA. 
Section 1895 (42 U.S.C. 1395fff) is amended by add-
ing at the end the following new subsection: 
‘‘(f) INCREASE IN PAYMENT FOR SERVICES FUR-
NISHED IN A RURAL AREA.—
‘‘(1) IN GENERAL.—In the case of home health 
services furnished in a rural area (as defined in sec-
tion 1886(d)(2)(D)) on or after April 1, 2003, the 
Secretary shall increase the payment amount other-
wise made under this section for such services by 10 
percent. 
‘‘(2) WAIVER OF BUDGET NEUTRALITY.—The 
Secretary shall not reduce the standard prospective 
payment amount (or amounts) under this section ap-
plicable to home health services furnished during a 
period to offset the increase in payments resulting 
from the application of paragraph (1).’’. 
SEC. 6. RURAL COMMUNITY HEALTH CENTER IMPROVE-
MENTS. 
(a) DELIVERY
OF MEDICARE-COVERED PRIMARY 
AND PREVENTIVE SERVICES AT FEDERALLY QUALIFIED 
HEALTH CENTERS.—
(1) COVERAGE OF MEDICARE-COVERED AMBU-
LATORY SERVICES BY FQHCS.—Section 1861(aa)(3)
(42 U.S.C. 1395x(aa)(3)) is amended to read as fol-
lows: 
‘‘(3) The term ‘Federally qualified health center serv-
ices’ means—
‘‘(A) services of the type described in subpara-
graphs (A) through (C) of paragraph (1), and such 
other services furnished by a Federally qualified 
health center for which payment may otherwise be 
made under this title if such services were furnished 
by a health care provider or health care professional 
other than a Federally qualified health center; and 
‘‘(B) preventive primary health services that a 
center is required to provide under section 330 of 
the Public Health Service Act, 
when furnished to an individual as a patient of a Federally 
qualified health center and such services when provided 
by a health care provider or health care professional em-
ployed by or under contract with a Federally qualified 
health center shall be treated as billable visits for purposes 
of payment to the Federally qualified health center.’’. 
(2) ENSURING FQHC REIMBURSEMENT UNDER 
HOSPITAL
AND
SKILLED
NURSING
FACILITY
PRO-
SPECTIVE PAYMENT SYSTEMS.—Section 1862(a)(14) 
(42 U.S.C. 1395y(a)) is amended by inserting ‘‘Fed-
erally qualified health center services,’’ after ‘‘quali-
fied psychologist services,’’. 
(3) TECHNICAL CORRECTIONS.—Clauses (i) and 
(ii)(II) of section 1861(aa)(4)(A) (42 U.S.C. 
1395x(aa)(4)(A)) are each amended by striking 
‘‘(other than subsection (h))’’. 
(4) 
EFFECTIVE
DATES.—The 
amendments 
made—
(A) by paragraphs (1) and (2) shall apply 
to services furnished on or after January 1, 
2004; and 
(B) by paragraph (3) shall take effect on 
the date of enactment of this Act. 
(b) PROVIDING SAFE HARBOR FOR CERTAIN COL-
LABORATIVE EFFORTS THAT BENEFIT MEDICALLY UN-
DERSERVED POPULATIONS.—
(1) IN
GENERAL.—Section 1128B(b)(3) (42 
U.S.C. 1320a–7(b)(3)) is amended—
(A) in subparagraph (E), by striking 
‘‘and’’ after the semicolon at the end; 
(B) in subparagraph (F), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph:
‘‘(G) any remuneration between a public or 
nonprofit private health center entity described 
under clause (i) or (ii) of section 1905(l)(2)(B) 
and any individual or entity providing goods, 
items, services, donations or loans, or a com-
bination thereof, to such health center entity 
pursuant to a contract, lease, grant, loan, or 
other agreement, if such agreement contributes 
to the ability of the health center entity to 
maintain or increase the availability, or enhance 
the quality, of services provided to a medically 
underserved population served by the health 
center entity.’’. 
(2) RULEMAKING FOR EXCEPTION FOR HEALTH 
CENTER ENTITY ARRANGEMENTS.—
(A) ESTABLISHMENT.—
(i) IN
GENERAL.—The Secretary of 
Health and Human Services (in this para-
graph referred to as the ‘‘Secretary’’) shall 
establish, on an expedited basis, standards 
relating to the exception described in sec-
tion 1128B(b)(3)(G) of the Social Security 
Act, as added by paragraph (1), for health 
center 
entity 
arrangements 
to 
the 
antikickback penalties.
(ii) FACTORS
TO
CONSIDER.—The 
Secretary shall consider the following fac-
tors, among others, in establishing stand-
ards relating to the exception for health 
center entity arrangements under clause 
(i): 
(I) Whether the arrangement be-
tween the health center entity and the 
other party results in savings of Fed-
eral grant funds or increased revenues 
to the health center entity. 
(II) Whether the arrangement 
between the health center entity and 
the other party restricts or limits a 
patient’s freedom of choice. 
(III) Whether the arrangement 
between the health center entity and 
the other party protects a health care 
professional’s 
independent 
medical 
judgment regarding medically appro-
priate treatment. 
The Secretary may also include other 
standards and criteria that are consistent 
with the intent of Congress in enacting the 
exception established under this section.
(B) INTERIM
FINAL
EFFECT.—No later 
than 180 days after the date of enactment of 
this Act, the Secretary shall publish a rule in 
the Federal Register consistent with the factors 
under subparagraph (A)(ii). Such rule shall be 
effective and final immediately on an interim 
basis, subject to such change and revision, after 
public notice and opportunity (for a period of 
not more than 60 days) for public comment, as 
is consistent with this paragraph. 
SEC. 7. ENSURING APPROPRIATE COVERAGE OF AMBU-
LANCE SERVICES UNDER AMBULANCE FEE 
SCHEDULE. 
(a) AIR AMBULANCE SERVICE.—
(1) COVERAGE.—Section 1834(l) (42 U.S.C. 
1395m(l)) is amended—
(A) by redesignating paragraph (8), as 
added by section 221(a) of Medicare, Medicaid, 
and SCHIP Benefits Improvement and Protec-
tion Act of 2000 (114 Stat. 2763A–486), as en-
acted into law by section 1(a)(6) of Public Law 
106–554, as paragraph (9); and 
(B) by adding at the end the following new 
paragraph:
‘‘(10) ENSURING APPROPRIATE COVERAGE OF 
AIR AMBULANCE SERVICES.—
‘‘(A) IN
GENERAL.—The regulations de-
scribed in section 1861(s)(7) shall ensure that 
air ambulance services (as defined in subpara-
graph (C)) are reimbursed under this sub-
section at the air ambulance rate if the air am-
bulance service— 
‘‘(i) is medically necessary based on 
the health condition of the individual being 
transported at or immediately prior to the 
time of the transport; and 
‘‘(ii) complies with equipment and 
crew requirements established by the Sec-
retary. 
‘‘(B) MEDICALLY
NECESSARY.—An air 
ambulance service shall be considered to be 
medically necessary for purposes of subpara-
graph (A)(i) if such service is requested—
‘‘(i) by a physician or a hospital in ac-
cordance with the physician’s or hospital’s 
responsibilities under section 1867 (com-
monly known as the ‘Emergency Medical 
Treatment and Active Labor Act’);
‘‘(ii) as a result of a protocol estab-
lished by a State or regional emergency 
medical service (EMS) agency; 
‘‘(iii) by a physician, nurse practi-
tioner, 
physician 
assistant, 
registered 
nurse, or emergency medical responder 
who reasonably determines or certifies that 
the patient’s condition is such that the 
time needed to transport the individual by 
land or the lack of an appropriate ground 
ambulance, significantly increases the med-
ical risks for the individual; or 
‘‘(iv) by a Federal or State agency to 
relocate patients following a natural dis-
aster, an act of war, or a terrorist attack. 
‘‘(C) AIR
AMBULANCE
SERVICES
DE-
FINED.—For purposes of this paragraph, the 
term ‘air ambulance service’ means fixed wing 
and rotary wing air ambulance services.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1861(s)(7) (42 U.S.C. 1395x(s)(7)) is amended by 
inserting ‘‘, subject to section 1834(l)(10),’’ after 
‘‘but’’. 
(b) GROUND AMBULANCE SERVICE.—
(1) PAYMENT RATES.—
(A) IN GENERAL.—Section 1834(l)(3) (42 
U.S.C. 1395m(l)(3)) is amended to read as fol-
lows: 
‘‘(3) PAYMENT RATES.—
‘‘(A) IN GENERAL.—Subject to any adjust-
ment under subparagraph (B) and paragraph 
(9) and the full payment of a national mileage 
rate pursuant to paragraph (2)(E), in estab-
lishing such fee schedule, the following rules 
shall apply: 
‘‘(i) PAYMENT RATES IN 2003.—
‘‘(I) GROUND AMBULANCE SERV-
ICES.—In the case of ground ambu-
lance services furnished under this 
part in 2003, the Secretary shall set 
the payment rates under the fee 
schedule for such services at a rate 
based on the average costs (as deter-
mined by the Secretary on the basis of 
the most recent and reliable informa-
tion available) incurred by full cost 
ambulance suppliers in providing non-
emergency basic life support ambu-
lance services covered under this title, 
with adjustments to the rates for
other ground ambulance service levels 
to be determined based on the rule es-
tablished under paragraph (1). For 
the purposes of the preceding sen-
tence, the term ‘full cost ambulance 
supplier’ means a supplier for which 
volunteers or other unpaid staff com-
prise less than 20 percent of the sup-
plier’s total staff and which receives 
less than 20 percent of space and 
other capital assets free of charge. 
‘‘(II) OTHER AMBULANCE SERV-
ICES.—In the case of ambulance serv-
ices not described in subclause (I) 
that are furnished under this part in 
2003, the Secretary shall set the pay-
ment rates under the fee schedule for 
such services based on the rule estab-
lished under paragraph (1). 
‘‘(ii) PAYMENT
RATES
IN
SUBSE-
QUENT YEARS FOR ALL AMBULANCE SERV-
ICES.—In the case of any ambulance serv-
ice furnished under this part in 2004 or 
any subsequent year, the Secretary shall 
set the payment rates under the fee sched-
ule for such service at amounts equal to 
the payment rate under the fee schedule 
for that service furnished during the pre-
vious year, increased by the percentage in-
crease in the Consumer Price Index for all 
urban consumers (United States city aver-
age) for the 12-month period ending with 
June of the previous year. 
‘‘(B) ADJUSTMENT IN RURAL RATES.—For 
years beginning with 2004, the Secretary, after 
taking into consideration the recommendations 
contained in the report submitted under section 
221(b)(3) the Medicare, Medicaid, and SCHIP 
Benefits Improvements and Protection Act of 
2000, shall adjust the fee schedule payment 
rates that would otherwise apply under this 
subsection for ambulance services provided in 
low density rural areas based on the increased 
cost (if any) of providing such services in such 
areas.’’. 
(B) CONFORMING
AMENDMENT.—Section 
221(c) of the Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 
2000 (114 Stat. 2763A–487), as enacted into
law by section 1(a)(6) of Public Law 106–554, 
is repealed. 
(2) USE OF MEDICAL CONDITIONS FOR CODING 
AMBULANCE
SERVICES.—Section 1834(l)(7) (42 
U.S.C. 1395m(l)(7)) is amended to read as follows: 
‘‘(7) CODING SYSTEM.—
‘‘(A) IN GENERAL.—The Secretary shall, 
in accordance with section 1173(c)(1)(B), es-
tablish a system or systems for the coding of 
claims for ambulance services for which pay-
ment is made under this subsection, including a 
code set specifying the medical condition of the 
individual who is transported and the level of 
service that is appropriate for the transpor-
tation of an individual with that medical condi-
tion. 
‘‘(B) MEDICAL CONDITIONS.—The code set 
established under subparagraph (A) shall—
‘‘(i) take into account the list of med-
ical conditions developed in the course of 
the negotiated rulemaking process con-
ducted under paragraph (1); and 
‘‘(ii) notwithstanding any other provi-
sion of law, be adopted as a standard code 
set under section 1173(c).’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
the date of the enactment of this Act. 
SEC. 8. RURAL MENTAL HEALTH CARE ACCESSIBILITY IM-
PROVEMENTS. 
(a) INTERDISCIPLINARY GRANT PROGRAM.—Subpart 
I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended by adding at the end 
the following new section: 
‘‘SEC. 330L. INTERDISCIPLINARY GRANT PROGRAM. 
‘‘(a) PROGRAM AUTHORIZED.—The Director of the 
Office of Rural Health Policy (of the Health Resources 
and Services Administration) shall award grants to eligible 
entities to establish interdisciplinary training programs 
that include significant mental health training in rural 
areas for certain health care providers. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means a public university or other educational 
institution that provides training for mental health 
care providers or primary health care providers. 
‘‘(2) MENTAL HEALTH CARE PROVIDER.—The 
term ‘mental health care provider’ means—
‘‘(A) a physician with postgraduate train-
ing in a residency program of psychiatry;