To amend title XVIII of the Social Security Act to increase by 20 percent the payment under the Medicare Program for ambulance services furnished to Medicare beneficiaries in rural areas, to determine rural areas based on population density, and to require the use of recent data in determining payment adjustments.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare Rural 
Ambulance Service Improvement Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Payment increases for rural ambulance services.
Sec. 3. Basing rural areas on population density by postal zip codes.
Sec. 4. Requiring use of recent data for calculation of budget 
                            neutrality adjustment.
Sec. 5. Exemption of ambulance suppliers from certain provider 
                            designation rules.
Sec. 6. Calculation of separate rates for ground and air ambulance 
                            services.

SEC. 2. PAYMENT INCREASES FOR RURAL AMBULANCE SERVICES.

    (a) 20 Percent Increase.--Section 1834(l) of the Social Security 
Act (42 U.S.C. 1395m(l)), as amended by sections 205(a) and 221(a) of 
the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000 (114 Stat. 2763A-482, 486), as enacted into law by section 
1(a)(6) of Public Law 106-554, is amended--
            (1) by redesignating paragraph (8), as added by such 
        section 221(a), as paragraph (9), and
            (2) by inserting after that paragraph the following new 
        paragraph:
            ``(10) Increase for rural ambulance services.--Effective 
        for ambulance services furnished on or after January 1, 2002, 
        for which the transportation originates in a rural area or 
        tract to which paragraph (9) applies, notwithstanding the 
        previous provisions of this subsection, the Secretary shall 
        provide for an additional payment for such services equal to 20 
        percent of the payment amount otherwise made under this section 
        for such services.''.
    (b) Increase in Mileage Rates for First 50 Miles.--Paragraph (9) of 
that section, as so redesignated under subsection (a)(1), is amended--
            (1) in the heading, by striking ``Transitional assistance'' 
        and inserting ``Mileage assistance'';
            (2) by striking ``furnished on or after July 1, 2001, and 
        before January 1, 2004,'';
            (3) by striking ``that,'' and inserting ``that--'';
            (4) by designating the remaining text of paragraph (9) that 
        follows ``that--'' a new subparagraph (B) and indenting such 
        subparagraph 2 ems to the right;
            (5) in such subparagraph (B), by striking ``with respect to 
        the payment rate for mileage for a trip above 17 miles, and up 
        to 50 miles, the rate otherwise established shall be 
        increased'' and inserting ``for ambulance services furnished on 
        or after July 1, 2001, the payment rate otherwise established 
        for mileage for a trip above 17 miles, and up to 50 miles, 
        shall be increased''; and
            (6) by inserting before such subparagraph (B) the following 
        new subparagraph:
                    ``(A) for ambulance services furnished on or after 
                January 1, 2002, the payment rate otherwise established 
                for mileage for the first 17 miles of a trip 
                transporting a patient shall be increased by $7.50 per 
                mile; and''.
    (c) Nonapplication of Initial Budget Neutrality Provisions.--The 
provisions of section 1834(l)(3)(A) of the Social Security Act (42 
U.S.C. 1395m(l)(3)(A)) do not apply with respect to the amendments made 
by this section.

SEC. 3. BASING RURAL AREAS ON POPULATION DENSITY BY POSTAL ZIP CODES.

    (a) In General.--Section 1834(l) of the Social Security Act (42 
U.S.C. 1395m(l)) is amended in paragraph (9), as so redesignated by 
section 2(a)(1), by striking ``(as defined in section 1886(d)(2)(D))'' 
and all that follows through ``(57 Fed. Reg. 6725))'' and inserting 
``(as determined under an area classification system established by the 
Secretary that is based on population density within postal zip code 
areas)''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall establish the classification system described in the amendment 
made by subsection (a) by not later than 1 year after the date of the 
enactment of this Act. Such amendment shall apply to services furnished 
on or after such date, not later than 30 days after the establishment 
of such system, as the Secretary shall provide by regulation.

SEC. 4. REQUIRING USE OF RECENT DATA FOR CALCULATION OF BUDGET 
              NEUTRALITY ADJUSTMENT.

    (a) In General.--Section 1834(l)(3) of the Social Security Act (42 
U.S.C. 1395m(l)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) in making the determination under 
                subparagraph (A), use data from the most recent year 
                for which such data are available, but may not use data 
                from a year that preceded the two-year period ending on 
                the date of the implementation of the fee schedule 
                under this subsection; and''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to ambulance services furnished on or after January 1, 2003.

SEC. 5. EXEMPTION OF AMBULANCE SUPPLIERS FROM CERTAIN PROVIDER 
              DESIGNATION RULES.

    In applying the regulation for requirements for determination that 
a facility or organization has provider-based status under section 
413.65 of title 42 of the Code of Federal Regulations, the Secretary of 
Health and Human Services shall not apply the regulation with respect 
to ambulance services.

SEC. 6. CALCULATION OF SEPARATE RATES FOR GROUND AND AIR AMBULANCE 
              SERVICES.

    (a) In General.--Section 1861(v)(1)(U) of the Social Security Act 
(42 U.S.C. 1395x(v)(1)(U)) is amended by adding at the end the 
following: ``In carrying out the first sentence, upon request of a 
hospital, the Secretary shall determine and apply separately the 
reasonable costs of ground and air ambulance services.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to ambulance services furnished on or after the date of the 
enactment of this Act.

Summary: Medicare Rural Ambulance Service Improvement Act of 2001 - Amends title XVIII (Medicare) of the Social Security Act (SSA), as amended by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, to direct the Secretary of Health and Human Services to increase by 20 percent the payment under Medicare for rural ambulance services. Increases by $7.50 per mile the payment rate for the first 17 miles of an ambulance trip transporting a patient.Provides for determination of rural areas based on population density by postal zip codes.Requires the use of recent data for calculation of budget neutrality adjustments to payments for ambulance services.Exempts ambulance suppliers from certain provider designation rules.Directs the Secretary to determine and apply separately the reasonable costs of ground and air ambulance services.