CARE Act of 2016

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Critical Access and Rural Equity Act 
of 2016'' or the ``CARE Act of 2016''.

SEC. 2. CLARIFYING REASONABLE COSTS FOR CRITICAL ACCESS HOSPITAL 
              MEDICARE PAYMENTS.

    (a) Inclusion of Certain Costs as Reasonable Costs.--
            (1) Inpatient critical access hospital services.--Section 
        1814(l) of the Social Security Act (42 U.S.C. 1395f(l)) is 
        amended by adding at the end the following new paragraph:
            ``(6) In determining payment and reasonable costs under 
        paragraph (1) for inpatient critical access services, the 
        Secretary shall recognize as allowable costs of the critical 
        access hospital at least the following:
                    ``(A) Costs of services that would be considered 
                bona fide emergency services (as defined in section 
                1861(v)(1)(K)(ii)) if provided in a hospital emergency 
                room, including professional services and any 
                associated surgical on-call and standby costs.
                    ``(B) Costs of a test or procedure performed at a 
                critical access hospital or an entity owned by the 
                critical access hospital, including a clinical 
                diagnostic laboratory test, mammogram (as defined in 
                section 354(a)(5) of the Public Health Service Act), 
                colonoscopy, cardiac stress test, pulmonary function 
                test, echocardiogram, and bone density study.
                    ``(C) Standby and on-call costs for certified 
                registered nurse anesthetist services, regardless of 
                the number of surgical procedures requiring anesthesia 
                services and regardless of the number of full-time 
                equivalent physicians.
                    ``(D) Costs of services provided by the critical 
                access hospital or satellite facility of the critical 
                access hospital that improve the total health of 
                communities, including immunization programs, health 
                clinics, and medical homes.
                    ``(E) Costs of services provided by an off-campus 
                provider-based clinic described in section 
                1820(c)(2)(F) of the critical access hospital, 
                regardless of distance of such clinic from a hospital 
                or another critical access hospital.''.
            (2) Outpatient critical access hospital services.--Section 
        1834(g) of the Social Security Act (42 U.S.C. 1395m(g)) is 
        amended by adding at the end the following new paragraph:
            ``(6) Coverage of certain additional costs as reasonable 
        costs.--In determining the reasonable costs of outpatient 
        critical access hospital services under paragraphs (1) and 
        (2)(A), the Secretary shall recognize as allowable the costs 
        described in paragraph (6) of section 1814(l).''.
            (3) Conforming amendment.--Section 1861(v)(7) of the Social 
        Security Act (42 U.S.C. 1395x(v)(7)) is amended by adding at 
        the end the following new subparagraph:
            ``(E) For provisions further describing costs recognized as 
        reasonable costs for inpatient and outpatient critical access 
        hospital services, see sections 1814(l)(6) and 1834(g)(6).''.
    (b) Treatment of Provider-Based Clinics of Critical Access 
Hospitals.--Section 1820(c)(2) of the Social Security Act (42 U.S.C. 
1395i-4(c)(2)) is amended--
            (1) in subparagraph (B)(i)(I), by striking ``is located'' 
        and inserting ``subject to subparagraph (E), is located''; and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Treatment of off-campus provider-based 
                clinics.--Subparagraph (B)(i)(I) shall not apply to an 
                off-campus provider-based clinic (as described in 
                section 485.610 of title 45 of the Code of Federal 
                Regulations) of a facility designated as a critical 
                access hospital.''.
    (c) Allowing Coordination for Provision of Emergency Services.--
Section 1820(c)(2) of the Social Security Act (42 U.S.C. 1395i-
4(c)(2)), as amended by subsection (b), is further amended--
            (1) in subparagraph (B)(ii), by striking ``makes'' and 
        inserting ``subject to subparagraph (G), makes''; and
            (2) by adding at the end the following new subparagraph:
                    ``(G) Allowing coordination for provision of 
                emergency services.--The Secretary may waive the 
                requirements under subparagraph (B)(ii), with respect 
                to a facility, if such facility--
                            ``(i) is located not more than 15 miles of 
                        another facility or hospital that has an 
                        emergency department that satisfies the 
                        requirement of subparagraph (B)(ii); and
                            ``(ii) coordinates with such other facility 
                        or hospital with respect to furnishing 24-hour 
                        emergency care services described in such 
                        subparagraph to the area served by such 
                        facility.''.
    (d) Treatment of Medicaid Provider Taxes for Critical Access 
Hospital Reasonable Costs.--
            (1) Inpatient critical access hospital services.--Section 
        1814(l) of the Social Security Act (42 U.S.C. 1395f(l)), as 
        amended by subsection (a)(1), is further amended by adding at 
        the end the following new paragraph:
            ``(7)(A) In determining payment and reasonable costs under 
        paragraph (1) for inpatient critical access services--
                    ``(i) with respect to a current permissible health 
                care related tax imposed and paid by the critical 
                access hospital for a cost reporting period beginning 
                before the date of enactment of this paragraph, the 
                Secretary shall not, through recoupment or otherwise, 
                disallow payment to the critical access hospital under 
                this subsection on the basis that payments to the 
                critical access hospital under this subsection offset 
                some or all of the costs of such tax; and
                    ``(ii) with respect to a current permissible health 
                care related tax imposed and paid by the critical 
                access hospital for a cost reporting period beginning 
                on or after the date of enactment of this paragraph, 
                the Secretary shall--
                            ``(I) assess the percentage of individuals 
                        entitled to benefits under this part who are 
                        furnished inpatient critical access hospital 
                        services at such critical access hospital 
                        during such cost reporting period and who are 
                        also receiving medical assistance under the 
                        Medicaid program under title XIX during such 
                        period; and
                            ``(II) adjust payments under this 
                        subsection with respect to such services 
                        furnished during such period in a manner 
                        specified by the Secretary based on such 
                        percentage to take into account such tax.
            ``(B) For purposes of this paragraph and section 
        1834(g)(7), the term `current permissible health care related 
        tax' means a broad-based health care related tax (as defined in 
        paragraph (3)(B) of such section) that is in effect prior to 
        enactment of this paragraph and for which there is not in 
        effect a hold harmless provision described in paragraph (4) of 
        such section.''.
            (2) Outpatient critical access hospital services.--Section 
        1834(g) of the Social Security Act (42 U.S.C. 1395m(g)), as 
        amended by subsection (a)(2), is further amended by adding at 
        the end the following new paragraph:
            ``(7) Treatment of medicaid provider taxes.--In determining 
        payment for outpatient critical access hospital services under 
        paragraphs (1) and (2), the provisions of paragraph (7) of 
        section 1814(l) shall apply to payment for such services under 
        this subsection in the same manner as such provisions apply to 
        payment for inpatient critical access hospital services under 
        section 1814(l), except that in applying subparagraph (B) of 
        such paragraph (7), the reference to `individuals entitled to 
        benefits under this part' shall be deemed a reference to 
        `individuals enrolled under part B'.''.

Summary: Critical Access and Rural Equity Act of 2016 or the CARE Act of 2016 This bill amends title XVIII (Medicare) of the Social Security Act to specify that, for purposes of determining Medicare payment and reasonable costs for both inpatient and outpatient critical access hospital (CAH) services, the Centers for Medicare &amp; Medicaid Services (CMS) shall recognize as allowable costs those&nbsp;related to specified emergency, diagnostic, anesthetist, community health, and off-campus clinical services. Furthermore, in&nbsp;determining payment and reasonable costs for both inpatient and outpatient CAH services, CMS shall not disallow payment to&nbsp;a CAH on the basis that such payment offsets the cost of a current permissible health care-related tax imposed on and paid by the CAH.&nbsp;CMS&nbsp;must make specified payment adjustments to account for such a tax.&nbsp; Generally, under current law,&nbsp;a facility&nbsp;must be located beyond a specified driving distance from another hospital or facility in order to be designated as a CAH. The bill specifies that this requirement does not apply with respect to a CAH's off-campus provider-based clinic. Current law further requires a facility to provide&nbsp;certain 24-hour emergency care services as a condition of designation as a CAH. The bill allows CMS to waive this requirement with respect to a facility that coordinates with a nearby&nbsp;facility or hospital that provides such services.