Title: Save Rural Hospitals Act
Policy area: Health

Summary:
Save Rural Hospitals Act
This bill amends titles XVIII (Medicare) of the Social Security Act (SSAct) to increase payments to, and modify various requirements regarding, rural health care providers under the Medicare program. Among other provisions, the bill: (1) reverses cuts to reimbursement of bad debt for critical access hospitals (CAHs) and rural hospitals, as well as alters certain requirements with regard to CAHs; (2) extends payment levels for low-volume hospitals and Medicare-dependent hospitals (MDHs); (3) reinstates revised diagnosis-related group payments to MDHs and sole community hospitals (SCHs), as well as reinstates hold harmless treatment for hospital outpatient services for SCHs; (4) delays the application of penalties for a rural hospital's failure to become a meaningful electronic health record user; (5) makes permanent increased Medicare payments for ground ambulance services in rural areas; (6) alters certain supervision requirements for therapeutic hospital outpatient services; (7) modifies requirements related to the use and payment of recovery audit contractors; and (8) establishes a program under which rural hospitals meeting specified requirements may be eligible for enhanced payment for qualified outpatient services.
In addition, the bill amends the Balanced Budget and Emergency Deficit Control Act of 1985 to eliminate Medicare sequestration for rural hospitals.
The bill also amends title XIX (Medicaid) of SSAct to extend Medicaid primary care payments.
With respect to both the Medicare and Medicaid programs, the bill eliminates disproportionate share hospital payment reductions for rural hospitals.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2957 Introduced in House (IH)]

<DOC>






115th CONGRESS
  1st Session
                                H. R. 2957

To amend titles XVIII and XIX of the Social Security Act to provide for 
enhanced payments to rural health care providers under the Medicare and 
               Medicaid programs, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 20, 2017

 Mr. Graves of Missouri (for himself and Mr. Loebsack) introduced the 
   following bill; which was referred to the Committee on Energy and 
Commerce, and in addition to the Committees on Ways and Means, and the 
 Budget, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend titles XVIII and XIX of the Social Security Act to provide for 
enhanced payments to rural health care providers under the Medicare and 
               Medicaid programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Save Rural 
Hospitals Act''.
    (b) Findings.--Congress finds the following:
            (1) More than 60,000,000 individuals in rural areas of the 
        United States rely on rural hospitals and other providers as 
        critical access points to health care.
            (2) Access to health care is essential to communities that 
        Americans living in rural areas call home.
            (3) Americans living in rural areas are older, poorer, and 
        sicker than Americans living in urban areas.
            (4) From January 2010 until January 1, 2017, 80 rural 
        hospitals have closed in the United States, according to the 
        University of North Carolina's Cecil G. Sheps Center for Health 
        Services Research, and the rate of these closures is 
        increasing.
            (5) Six hundred and seventy-three hospitals are at risk of 
        closing, according to iVantage's Hospital Strength INDEX study, 
        and such closings would impact 11,700,000 patient encounters, 
        99,000 community jobs would be lost, 137,000 healthcare jobs 
        would be lost, and 277,000,000,000 would be lost from the gross 
        domestic product (over 10 years).
            (6) Rural Medicare beneficiaries already face a number of 
        challenges when trying to access health care services close to 
        home, including the weather, geography, and cultural, social, 
        and language barriers.
            (7) Seventy-seven percent of rural counties in the United 
        States are designated as primary care health professional 
        shortage areas while 9 percent have no physicians at all.
            (8) Seniors living in rural areas are forced to travel 
        significant distances for care.
            (9) On average, trauma victims in rural areas must travel 
        twice as far as victims in urban areas to the closest hospital, 
        and, as a result, 60 percent of trauma deaths occur in rural 
        areas, even though only 20 percent of Americans live in rural 
        areas.
            (10) With the 673 hospitals on the brink of closure, 
        11,700,000 Americans living in rural areas are on the brink of 
        losing access to the closest emergency room.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
             TITLE I--RURAL PROVIDER PAYMENT STABILIZATION

                      Subtitle A--Rural Hospitals

Sec. 101. Eliminating Medicare sequestration for rural hospitals.
Sec. 102. Reversing cuts to reimbursement of bad debt for critical 
                            access hospitals (CAHs) and rural 
                            hospitals.
Sec. 103. Extending payment levels for low-volume hospitals and 
                            Medicare-dependent hospitals (MDHs).
Sec. 104. Reinstating revised diagnosis-related group payments for MDHs 
                            and sole community hospitals (SCHs).
Sec. 105. Reinstating hold harmless treatment for hospital outpatient 
                            services for SCHs.
Sec. 106. Delaying application of penalties for failure to be a 
                            meaningful electronic health record user.
Sec. 107. Eliminating rural Medicare and Medicaid disproportionate 
                            share hospital payment reductions.
                   Subtitle B--Other Rural Providers

Sec. 111. Making permanent increased Medicare payments for ground 
                            ambulance services in rural areas.
Sec. 112. Extending Medicaid primary care payments.
              TITLE II--RURAL MEDICARE BENEFICIARY EQUITY

Sec. 201. Equalizing beneficiary copayments for services furnished by 
                            CAHs.
                      TITLE III--REGULATORY RELIEF

Sec. 301. Eliminating 96-hour physician certification requirement with 
                            respect to inpatient CAH services.
Sec. 302. Rebasing supervision requirements.
Sec. 303. Reforming practices of recovery audit contractors under 
                            Medicare.
                 TITLE IV--FUTURE OF RURAL HEALTH CARE

Sec. 401. Community outpatient hospital program.
Sec. 402. Grant funding to assist rural hospitals.
Sec. 403. CMMI demonstration of shared savings in rural hospitals.

             TITLE I--RURAL PROVIDER PAYMENT STABILIZATION

                      Subtitle A--Rural Hospitals

SEC. 101. ELIMINATING MEDICARE SEQUESTRATION FOR RURAL HOSPITALS.

    (a) In General.--Section 256(d)(7) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 (2 U.S.C. 906(d)(7)) is amended 
by adding at the end the following:
                    ``(D) Rural hospitals.--Payments under part A or 
                part B of title XVIII of the Social Security Act with 
                respect to items and services furnished by a critical 
                access hospital (as defined in section 1861(mm)(1) of 
                such Act), a sole community hospital (as defined in 
                section 1886(d)(5)(D)(iii) of such Act), a medicare-
                dependent small rural hospital (as defined in section 
                1886(d)(5)(G)(iv) of such Act), or a subsection (d) 
                hospital located in a rural area (as defined in section 
                1886(d)(2)(D) of such Act).''.
    (b) Applicability.--The amendment made by this section applies with 
respect to orders of sequestration effective on or after the date that 
is 60 days after the date of the enactment of this Act.

SEC. 102. REVERSING CUTS TO REIMBURSEMENT OF BAD DEBT FOR CRITICAL 
              ACCESS HOSPITALS (CAHS) AND RURAL HOSPITALS.

    (a) Rural Hospitals.--Section 1861(v)(1)(T)(v) of the Social 
Security Act (42 U.S.C. 1395x(v)(1)(T)(v)) is amended by inserting 
before the period the following: ``or, in the case of a hospital 
located in a rural area, by 30 percent of such amount otherwise 
allowable''.
    (b) CAHs.--Section 1861(v)(1)(W)(ii) of the Social Security Act (42 
U.S.C. 1395x(v)(1)(W)(ii)) is amended by inserting after ``or (V)'' the 
following: ``, a critical access hospital''.
    (c) Applicability.--The amendments made by this section apply with 
respect to cost reporting periods beginning more than 60 days after the 
date of the enactment of this Act.

SEC. 103. EXTENDING PAYMENT LEVELS FOR LOW-VOLUME HOSPITALS AND 
              MEDICARE-DEPENDENT HOSPITALS (MDHS).

    (a) Extension of Increased Payments for MDHs.--
            (1) Extension of payment methodology.--Section 
        1886(d)(5)(G) of the Social Security Act (42 U.S.C. 
        1395ww(d)(5)(G)), as amended by section 205(a) of the Medicare 
        Access and CHIP Reauthorization Act of 2015, is amended--
                    (A) in clause (i), by striking ``, and before 
                October 1, 2017''; and
                    (B) in clause (ii)(II), by striking ``, and before 
                October 1, 2017''.
            (2) Conforming amendments.--
                    (A) Extension of target amount.--Section 
                1886(b)(3)(D) of the Social Security Act (42 U.S.C. 
                1395ww(b)(3)(D)), as amended by section 205(b) of the 
                Medicare Access and CHIP Reauthorization Act of 2015, 
                is amended--
                            (i) in the matter preceding clause (i), by 
                        striking ``, and before October 1, 2017''; and
                            (ii) in clause (iv), by striking ``during 
                        fiscal year 1998 through fiscal year 2017'' and 
                        inserting ``during or after fiscal year 1998''.
                    (B) Extending the period during which hospitals can 
                decline reclassification as urban.--Section 13501(e)(2) 
                of the Omnibus Budget Reconciliation Act of 1993 (42 
                U.S.C. 1395ww note), as amended by section 205(b) of 
                the Medicare Access and CHIP Reauthorization Act of 
                2015, is amended--
                            (i) by inserting after ``2017'' the 
                        following: ``or a subsequent fiscal year''; and
                            (ii) in subparagraph (C), by inserting 
                        after ``such reclassification'' the following: 
                        ``during the 1-year period that begins on the 
                        date of the notification of the hospital under 
                        subparagraph (A)''.
    (b) Extension of Increased Payments for Low-Volume Hospitals.--
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)), as amended by section 204 of the Medicare Access and 
CHIP Reauthorization Act of 2015, is amended--
            (1) in subparagraph (B)--
                    (A) in the heading, by inserting after ``increase'' 
                the following: ``through fiscal year 2010''; and
                    (B) by striking ``and for discharges occurring in 
                fiscal year 2018 and subsequent fiscal years'';
            (2) in subparagraph (C)(i)--
                    (A) by striking ``25 road miles (or, with respect 
                to fiscal years 2011 through 2017, 15 road miles)'' and 
                inserting ``15 road miles''; and
                    (B) by striking ``(or, with respect to fiscal years 
                2011 through 2017, 1,600 discharges of individuals 
                entitled to, or enrolled for, benefits under part A)'' 
                and inserting ``or 1,600 discharges of individuals 
                entitled to, or enrolled for, benefits under part A''; 
                and
            (3) in subparagraph (D)--
                    (A) by amending the heading to read as follows: 
                ``Applicable percentage increase after fiscal year 
                2010''; and
                    (B) by striking ``in fiscal years 2011 through 
                2017'' and inserting ``in fiscal year 2011 and each 
                subsequent fiscal year''.

SEC. 104. REINSTATING REVISED DIAGNOSIS-RELATED GROUP PAYMENTS FOR MDHS 
              AND SOLE COMMUNITY HOSPITALS (SCHS).

    (a) Payments for MDHs and SCHs for Value-Based Incentive 
Programs.--Section 1886(o)(7)(D)(ii)(I) of the Social Security Act (42 
U.S.C. 1395ww(o)(7)(D)(ii)(I)) is amended by inserting ``or after 
fiscal year 2018'' after ``2013''.
    (b) Payments for MDHs and SCHs Under Hospital Readmissions 
Reduction Program.--Section 1886(q)(2)(B)(i) of the Social Security Act 
(42 U.S.C. 1395ww(q)(2)(B)(i)) is amended by inserting ``or after 
fiscal year 2018'' after ``2013''.

SEC. 105. REINSTATING HOLD HARMLESS TREATMENT FOR HOSPITAL OUTPATIENT 
              SERVICES FOR SCHS.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in the heading, by striking ``temporary'' and inserting 
        ``permanent'';
            (2) in subclause (II)--
                    (A) in the first sentence, by inserting ``or on or 
                after January 1, 2018,'' after ``January 1, 2013,''; 
                and
                    (B) in the second sentence, by inserting ``, or 
                during or after 2018'' after ``or 2012''; and
            (3) in subclause (III), in the first sentence, by inserting 
        ``or on or after January 1, 2018,'' after ``January 1, 2013,''.

SEC. 106. DELAYING APPLICATION OF PENALTIES FOR FAILURE TO BE A 
              MEANINGFUL ELECTRONIC HEALTH RECORD USER.

    (a) In General.--Section 1886(b)(3)(B)(ix)(I) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)(ix)(I)) is amended by adding at 
the end the following: ``In the case of a hospital located in a rural 
area, each fiscal year referred to in the first sentence of this 
subclause shall be applied as if it were a reference to the year that 
is 4 fiscal years later.''.
    (b) Applicability.--The amendment made by this section applies with 
respect fiscal years beginning after the date of the enactment of this 
Act.

SEC. 107. ELIMINATING RURAL MEDICARE AND MEDICAID DISPROPORTIONATE 
              SHARE HOSPITAL PAYMENT REDUCTIONS.

    (a) Medicare.--Section 1886(r)(1) of the Social Security Act (42 
U.S.C. 1395ww(r)(1)) is amended by inserting before ``25 percent'' the 
following: ``(unless such hospital is located in a rural area, as 
defined in subsection (d)(2)(D))''.
    (b) Medicaid.--Section 1923(f)(3) of the Social Security Act (42 
U.S.C.1396r-4(f)(3)) is amended--
            (1) in subparagraph (A) by striking ``subparagraph (E)'' 
        and inserting ``subparagraphs (E) and (F)''; and
            (2) by adding at the end the following:
                    ``(F) Increase in allotments and payments for rural 
                hospitals.--
                            ``(i) Allotments.--Subject to clause (iii) 
                        and notwithstanding subparagraphs (B), (C), and 
                        (E), the DSH allotment for a State with respect 
                        to a fiscal year that would be determined under 
                        this paragraph for the State for the fiscal 
                        year if this subparagraph did not apply, shall 
                        be increased by the product of--
                                    ``(I) the reduction of such State's 
                                DSH allotment under paragraph 
                                (7)(A)(i)(I) for such fiscal year; and
                                    ``(II) the percentage of 
                                individuals in the State who receive 
                                medical assistance under a State plan 
                                under this title and who live in a 
                                rural area (as defined in section 
                                1886(d)(2)(D)) of the State.
                            ``(ii) Payments.--Subject to clause (iii), 
                        the payments made to a State under section 
                        1903(a) for each calendar quarter shall be 
                        increased by the product of--
                                    ``(I) the reduction such State's 
                                DSH allotment under paragraph 
                                (7)(A)(i)(II) for such fiscal year; and
                                    ``(II) the percentage of 
                                individuals in the State who receive 
                                medical assistance under a State plan 
                                under this title and who live in a 
                                rural area (as defined in section 
                                1886(d)(2)(D)) of the State.
                            ``(iii) Supplement, not supplant.--A State 
                        may only receive an increased allotment under 
                        clause (i) or an increased payment under clause 
                        (ii) if such State provides such assurances as 
                        the Secretary may require that any funds made 
                        available to such State pursuant to such 
                        clauses shall be used to supplement, and not 
                        supplant, amounts paid under this section to 
                        hospitals in the State that are located in 
                        rural areas (as defined in section 
                        1886(d)(2)(D)).''.
    (c) Applicability.--The amendments made by this section apply with 
respect to fiscal year 2018 and each subsequent fiscal year.

                   Subtitle B--Other Rural Providers

SEC. 111. MAKING PERMANENT INCREASED MEDICARE PAYMENTS FOR GROUND 
              AMBULANCE SERVICES IN RURAL AREAS.

    Section 1834(l)(13) of the Social Security Act (42 U.S.C. 
1395m(l)(13)) is amended--
            (1) by striking ``temporary increase'' and inserting 
        ``increase''; and
            (2) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by striking 
                ``, and before January 1, 2018''; and
                    (B) in clause (i), by striking ``, and before 
                January 1, 2018''.

SEC. 112. EXTENDING MEDICAID PRIMARY CARE PAYMENTS.

    (a) In General.--Section 1902(a)(13)(C) of the Social Security Act 
(42 U.S.C. 1396a(a)(13)(C)) is amended by inserting after ``2014'' the 
following: ``(or in the case of a primary care services furnished by a 
physician located in a rural area, as defined in section 1886(d)(2)(D), 
furnished in any year)''.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by this section applies to services furnished in 
        a year beginning on or after the date of the enactment of this 
        Act.
            (2) Exception if state legislation required.--In the case 
        of a State plan for medical assistance under title XIX of the 
        Social Security Act which the Secretary of Health and Human 
        Services determines requires State legislation (other than 
        legislation appropriating funds) in order for the plan to meet 
        the additional requirement imposed by the amendment made by 
        this section, the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet this additional requirement before 
        the first day of the first calendar quarter beginning after the 
        close of the first regular session of the State legislature 
        that begins after the date of the enactment of this Act. For 
        purposes of the previous sentence, in the case of a State that 
        has a 2-year legislative session, each year of such session 
        shall be deemed to be a separate regular session of the State 
        legislature.

              TITLE II--RURAL MEDICARE BENEFICIARY EQUITY

SEC. 201. EQUALIZING BENEFICIARY COPAYMENTS FOR SERVICES FURNISHED BY 
              CAHS.

    (a) In General.--Section 1866(a)(2)(A) of the Social Security Act 
(42 U.S.C. 1395cc(a)(2)(A)) is amended by adding at the end the 
following: ``In the case of outpatient critical access hospital 
services for which payment is made under section 1834(g), clause (ii) 
of the first sentence shall be applied by substituting `20 percent of 
the lesser of the actual charge or the payment basis under this part 
for such services if the critical access hospital were treated as a 
hospital' for `20 per centum of the reasonable charge for such items 
and services'.''.
    (b) Applicability.--The amendment made by this section applies with 
respect to services furnished during a year that begins more than 60 
days after the date of the enactment of this Act.

                      TITLE III--REGULATORY RELIEF

SEC. 301. ELIMINATING 96-HOUR PHYSICIAN CERTIFICATION REQUIREMENT WITH 
              RESPECT TO INPATIENT CAH SERVICES.

    (a) In General.--Section 1814(a) of the Social Security Act (42 
U.S.C. 1395f(a)) is amended--
            (1) in paragraph (6), by adding ``and'' at the end;
            (2) in paragraph (7)(E), by striking ``; and'' and 
        inserting a period; and
            (3) by striking paragraph (8).
    (b) Applicability.--The amendments made by this section apply with 
respect to services furnished during a year that begins more than 60 
days after the date of the enactment of this Act.

SEC. 302. REBASING SUPERVISION REQUIREMENTS.

    (a) Therapeutic Hospital Outpatient Services.--
            (1) Supervision requirements.--Section 1833 of the Social 
        Security Act (42 U.S.C. 1395l) is amended by adding at the end 
        the following:
    ``(aa) Physician Supervision Requirements for Therapeutic Hospital 
Outpatient Services.--
            ``(1) General supervision for therapeutic services.--Except 
        as may be provided under paragraph (2), insofar as the 
        Secretary requires the supervision by a physician or a non-
        physician practitioner for payment for therapeutic hospital 
        outpatient services (as defined in paragraph (5)(A)) furnished 
        under this part, such requirement shall be met if such services 
        are furnished under the general supervision (as defined in 
        paragraph (5)(B)) of the physician or non-physician 
        practitioner, as the case may be.
            ``(2) Exceptions process for high-risk or complex medical 
        services requiring a direct level of supervision.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph, the Secretary shall 
                establish a process for the designation of therapeutic 
                hospital outpatient services furnished under this part 
                that, by reason of complexity or high risk, require--
                            ``(i) direct supervision (as defined in 
                        paragraph (5)(C)) for the entire service; or
                            ``(ii) direct supervision during the 
                        initiation of the service followed by general 
                        supervision for the remainder of the service.
                    ``(B) Consultation with clinical experts.--
                            ``(i) In general.--Under the process 
                        established under subparagraph (A), before the 
                        designation of any therapeutic hospital 
                        outpatient service for which direct supervision 
                        may be required under this part, the Secretary 
                        shall consult with a panel of outside experts 
                        described in clause (ii) to advise the 
                        Secretary with respect to each such 
                        designation.
                            ``(ii) Advisory panel on supervision of 
                        therapeutic hospital outpatient services.--For 
                        purposes of clause (i), a panel of outside 
                        experts described in this clause is a panel 
                        appointed by the Secretary, based on 
                        nominations submitted by hospital, rural 
                        health, and medical organizations representing 
                        physicians, non-physician practitioners, and 
                        hospital administrators, as the case may be, 
                        that meets the following requirements:
                                    ``(I) Composition.--The panel shall 
                                be composed of at least 15 physicians 
                                and non-physician practitioners who 
                                furnish therapeutic hospital outpatient 
                                services for which payment is made 
                                under this part and who collectively 
                                represent the medical specialties that 
                                furnish such services, and of 4 
                                hospital administrators of hospitals 
                                located in rural areas (as defined in 
                                section 1886(d)(2)(D)) or critical 
                                access hospitals.
                                    ``(II) Practical experience 
                                required for physicians and non-
                                physician practitioners.--During the 
                                12-month period preceding appointment 
                                to the panel by the Secretary, each 
                                physician or non-physician practitioner 
                                described in subclause (I) shall have 
                                furnished therapeutic hospital 
                                outpatient services for which payment 
                                was made under this part.
                                    ``(III) Minimum rural 
                                representation requirement for 
                                physicians and non-physician 
                                practitioners.--Not less than 50 
                                percent of the membership of the panel 
                                that is comprised of physicians and 
                                non-physician practitioners shall be 
                                physicians or non-physician 
                                practitioners described in subclause 
                                (I) who practice in rural areas (as 
                                defined in section 1886(d)(2)(D)) or 
                                who furnish such services in critical 
                                access hospitals.
                            ``(iii) Application of faca.--The Federal 
                        Advisory Committee Act (5 U.S.C. 2 App.), other 
                        than section 14 of such Act, shall apply to the 
                        panel of outside experts appointed by the 
                        Secretary under clause (ii).
                    ``(C) Special rule for outpatient critical access 
                hospital services.--Insofar as a therapeutic outpatient 
                hospital service that is an outpatient critical access 
                hospital service is designated as requiring direct 
                supervision under the process established under 
                subparagraph (A), the Secretary shall deem the critical 
                access hospital furnishing that service as having met 
                the requirement for direct supervision for that service 
                if, when furnishing such service, the critical access 
                hospital meets the standard for personnel required as a 
                condition of participation under section 485.618(d) of 
                title 42, Code of Federal Regulations (as in effect on 
                the date of the enactment of this subsection).
                    ``(D) Consideration of compliance burdens.--Under 
                the process established under subparagraph (A), the 
                Secretary shall take into account the impact on 
                hospitals and critical access hospitals in complying 
                with requirements for direct supervision in the 
                furnishing of therapeutic hospital outpatient services, 
                including hospital resources, availability of hospital-
                privileged physicians, specialty physicians, and non-
                physician practitioners, and administrative burdens.
                    ``(E) Requirement for notice and comment 
                rulemaking.--Under the process established under 
                subparagraph (A), the Secretary shall only designate 
                therapeutic hospital outpatient services requiring 
                direct supervision under this part through proposed and 
                final rulemaking that provides for public notice and 
                opportunity for comment.
                    ``(F) Rule of construction.--Nothing in this 
                subsection shall be construed as authorizing the 
                Secretary to apply or require any level of supervision 
                other than general or direct supervision with respect 
                to the furnishing of therapeutic hospital outpatient 
                services.
            ``(3) Initial list of designated services.--The Secretary 
        shall include in the proposed and final regulation for payment 
        for hospital outpatient services for 2018 under this part a 
        list of initial therapeutic hospital outpatient services, if 
        any, designated under the process established under paragraph 
        (2)(A) as requiring direct supervision under this part.
            ``(4) Direct supervision by non-physician practitioners for 
        certain hospital outpatient services permitted.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, a non-physician 
                practitioner may directly supervise the furnishing of--
                            ``(i) therapeutic hospital outpatient 
                        services under this part, including cardiac 
                        rehabilitation services (under section 
                        1861(eee)(1)), intensive cardiac rehabilitation 
                        services (under section 1861(eee)(4)), and 
                        pulmonary rehabilitation services (under 
                        section 1861(fff)(1)); and
                            ``(ii) those hospital outpatient diagnostic 
                        services (described in section 1861(s)(2)(C)) 
                        that require direct supervision under the fee 
                        schedule established under section 1848.
                    ``(B) Requirements.--Subparagraph (A) shall apply 
                insofar as the non-physician practitioner involved 
                meets the following requirements:
                            ``(i) Scope of practice.--The non-physician 
                        practitioner is acting within the scope of 
                        practice under State law applicable to the 
                        practitioner.
                            ``(ii) Additional requirements.--The non-
                        physician practitioner meets such requirements 
                        as the Secretary may specify.
            ``(5) Definitions.--In this subsection:
                    ``(A) Therapeutic hospital outpatient services.--
                The term `therapeutic hospital outpatient services' 
                means hospital services described in section 
                1861(s)(2)(B) furnished by a hospital or critical 
                access hospital and includes--
                            ``(i) cardiac rehabilitation services and 
                        intensive cardiac rehabilitation services (as 
                        defined in paragraphs (1) and (4), 
                        respectively, of section 1861(eee)); and
                            ``(ii) pulmonary rehabilitation services 
                        (as defined in section 1861(fff)(1)).
                    ``(B) General supervision.--
                            ``(i) Overall direction and control of 
                        physician.--Subject to clause (ii), with 
                        respect to the furnishing of therapeutic 
                        hospital outpatient services for which payment 
                        may be made under this part, the term `general 
                        supervision' means such services that are 
                        furnished under the overall direction and 
                        control of a physician or non-physician 
                        practitioner, as the case may be.
                            ``(ii) Presence not required.--For purposes 
                        of clause (i), the presence of a physician or 
                        non-physician practitioner is not required 
                        during the performance of the procedure 
                        involved.
                    ``(C) Direct supervision.--
                            ``(i) Provision of assistance and 
                        direction.--Subject to clause (ii), with 
                        respect to the furnishing of therapeutic 
                        hospital outpatient services for which payment 
                        may be made under this part, the term `direct 
                        supervision' means that a physician or non-
                        physician practitioner, as the case may be, is 
                        immediately available (including by telephone 
                        or other means) to furnish assistance and 
                        direction throughout the furnishing of such 
                        services. Such term includes, with respect to 
                        the furnishing of a therapeutic hospital 
                        outpatient service for which payment may be 
                        made under this part, direct supervision during 
                        the initiation of the service followed by 
                        general supervision for the remainder of the 
                        service (as described in paragraph (2)(A)(ii)).
                            ``(ii) Presence in room not required.--For 
                        purposes of clause (i), a physician or non-
                        physician practitioner, as the case may be, is 
                        not required to be present in the room during 
                        the performance of the procedure involved or 
                        within any other physical boundary as long as 
                        the physician or non-physician practitioner, as 
                        the case may be, is immediately available.
                    ``(D) Non-physician practitioner defined.--The term 
                `non-physician practitioner' means an individual who--
                            ``(i) is a physician assistant, a nurse 
                        practitioner, a clinical nurse specialist, a 
                        clinical social worker, a clinical 
                        psychologist, a certified nurse midwife, or a 
                        certified registered nurse anesthetist, and 
                        includes such other practitioners as the 
                        Secretary may specify; and
                            ``(ii) with respect to the furnishing of 
                        therapeutic outpatient hospital services, meets 
                        the requirements of paragraph (4)(B).''.
            (2) Conforming amendment.--Section 1861(eee)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395x(eee)(2)(B)) is amended by 
        inserting ``, and a non-physician practitioner (as defined in 
        section 1833(aa)(5)(D)) may supervise the furnishing of such 
        items and services in the hospital'' after ``in the case of 
        items and services furnished under such a program in a 
        hospital, such availability shall be presumed''.
    (b) Prohibition on Retroactive Enforcement of Revised 
Interpretation.--
            (1) Repeal of regulatory clarification.--The restatement 
        and clarification under the final rulemaking changes to the 
        Medicare hospital outpatient prospective payment system and 
        calendar year 2009 payment rates (published in the Federal 
        Register on November 18, 2008, 73 Fed. Reg. 68702 through 
        68704) with respect to requirements for direct supervision by 
        physicians for therapeutic hospital outpatient services (as 
        defined in paragraph (3)) for purposes of payment for such 
        services under the Medicare program shall have no force or 
        effect in law.
            (2) Hold harmless.--A hospital or critical access hospital 
        that furnishes therapeutic hospital outpatient services during 
        the period beginning on January 1, 2001, and ending on the 
        later of December 31, 2017, or the date on which the final 
        regulation promulgated by the Secretary of Health and Human 
        Services to carry out this section takes effect, for which a 
        claim for payment is made under part B of title XVIII of the 
        Social Security Act shall not be subject to any civil or 
        criminal action or penalty under Federal law for failure to 
        meet supervision requirements under the regulation described in 
        paragraph (1), under program manuals, or otherwise.
            (3) Therapeutic hospital outpatient services defined.--In 
        this subsection, the term ``therapeutic hospital outpatient 
        services'' means medical and other health services furnished by 
        a hospital or critical access hospital that are--
                    (A) hospital services described in subsection 
                (s)(2)(B) of section 1861 of the Social Security Act 
                (42 U.S.C. 1395x);
                    (B) cardiac rehabilitation services or intensive 
                cardiac rehabilitation services (as defined in 
                paragraphs (1) and (4), respectively, of subsection 
                (eee) of such section); or
                    (C) pulmonary rehabilitation services (as defined 
                in subsection (fff)(1) of such section).

SEC. 303. REFORMING PRACTICES OF RECOVERY AUDIT CONTRACTORS UNDER 
              MEDICARE.

    (a) Elimination of Contingency Fee Payment System.--Section 1893(h) 
of the Social Security Act (42 U.S.C. 1395ddd(h)), as amended by 
section 505(b) of the Medicare Access and CHIP Reauthorization Act of 
2015, is amended--
            (1) in paragraph (1), by inserting ``, for recovery 
        activities conducted during a fiscal year before fiscal year 
        2016'' after ``Under the contracts''; and
            (2) by adding at the end the following new paragraph:
            ``(11) Payment for recovery activities performed after 
        fiscal year 2017.--
                    ``(A) In general.--Under the contracts, subject to 
                subparagraphs (B) and (C), payment shall be made to 
                recovery audit contractors for recovery activities 
                conducted during fiscal year 2018 and each fiscal year 
                thereafter in the same manner, and from the same 
                amounts, as payment is made to eligible entities under 
                contracts entered into for recovery activities 
                conducted during fiscal year 2015 under subsection (a).
                    ``(B) Prohibition on incentive payments.--Under the 
                contracts, payment made to a recovery audit contractor 
                for recovery activities conducted during fiscal year 
                2018 or any fiscal year thereafter may not include any 
                incentive payments.
                    ``(C) Performance accountability.--
                            ``(i) In general.--Under the contracts, 
                        payment made to a recovery audit contractor for 
                        recovery activities conducted during fiscal 
                        year 2018 or any fiscal year thereafter shall, 
                        in the case that the contractor has a complex 
                        audit denial overturn rate at the end of such 
                        fiscal year (as calculated under the 
                        methodology described in clause (iv)) that is 
                        .1 or greater, be reduced in an amount 
                        determined in accordance with clause (ii).
                            ``(ii) Payment reductions.--
                                    ``(I) Sliding scale of amount of 
                                reductions.--The Secretary shall 
                                establish, for purposes of determining 
                                the amount of a reduction in payment to 
                                a recovery audit contractor under 
                                clause (i) for recovery activities 
                                conducted during fiscal year, a linear 
                                sliding scale of payment reductions for 
                                recovery audit contractors for such 
                                fiscal year. Under such linear sliding 
                                scale, the amount of such a reduction 
                                in payment to a recovery audit 
                                contractor for a fiscal year shall be 
                                calculated in a manner that provides 
                                for such reduction to be greater than 
                                the reduction for such fiscal year for 
                                recovery audit contractors that have 
                                complex audit denial overturn rates at 
                                the end of such fiscal year (as 
                                calculated under the methodology 
                                described in clause (iv)) that are 
                                lower than the complex audit denial 
                                overturn rate of the contractor at the 
                                end of such fiscal year (as so 
                                calculated).
                                    ``(II) Manner of collecting 
                                reduction.--The Secretary may assess 
                                and collect the reductions in payment 
                                to recovery audit contractors under 
                                clause (i) in such manner as the 
                                Secretary may specify (such as by 
                                reducing the amount paid to the 
                                contractor for recovery activities 
                                conducted during a fiscal year or by 
                                assessing the reduction as a separate 
                                penalty payment to be paid to the 
                                Secretary by the contractor with 
                                respect to each complex audit denial 
                                issued by the contractor that is 
                                overturned on appeal).
                            ``(iii) Timing of determinations of payment 
                        reductions.--The Secretary shall, with respect 
                        to a recovery audit contractor, determine not 
                        later than six months after the end of a fiscal 
                        year--
                                    ``(I) whether to reduce payment to 
                                the recovery audit contractor under 
                                clause (i) for recovery activities 
                                conducted during such fiscal year; and
                                    ``(II) in the case that the 
                                Secretary determines to so reduce 
                                payment to the contractor, the amount 
                                of such payment reduction.
                            ``(iv) Methodology for calculation of 
                        overturned complex audit denial overturn 
                        rate.--
                                    ``(I) Calculation of overturn 
                                rate.--The Secretary shall calculate a 
                                complex audit denial overturn rate for 
                                a recovery audit contractor for a 
                                fiscal year by--
                                            ``(aa) determining, with 
                                        respect to the contract entered 
                                        into under paragraph (1) by the 
                                        contractor, the number of 
                                        complex audit denials issued by 
                                        the contractor under the 
                                        contract (including denials 
                                        issued before such fiscal year 
                                        and during such fiscal year) 
                                        that are overturned on appeal; 
                                        and
                                            ``(bb) dividing the number 
                                        determined under item (aa) by 
                                        the number of complex audit 
                                        denials issued by the 
                                        contractor under such contract 
                                        (including denials issued 
                                        before such fiscal year and 
                                        during such fiscal year).
                                    ``(II) Fairness and transparency.--
                                The Secretary shall calculate the 
                                percentage described in subclause (I) 
                                in a fair and transparent manner.
                                    ``(III) Accounting for subsequently 
                                overturned appeals.--The Secretary 
                                shall calculate the percentage 
                                described in subclause (I) in a manner 
                                that accounts for the likelihood that 
                                complex audit denials issued by the 
                                contractor for such fiscal year will be 
                                overturned on appeal in a subsequent 
                                fiscal year.
                                    ``(IV) Complex audit denial 
                                defined.--In this subparagraph, the 
                                term `complex audit denial' means a 
                                denial by a recovery audit contractor 
                                of a claim for payment under this title 
                                submitted by a hospital, psychiatric 
                                hospital, or critical access hospital 
                                that is so denied by the contractor 
                                after the contractor has--
                                            ``(aa) requested that the 
                                        hospital, psychiatric hospital, 
                                        or critical access hospital, in 
                                        order to support such claim for 
                                        payment, provide supporting 
                                        medical records to the 
                                        contractor; and
                                            ``(bb) reviewed such 
                                        medical records in order to 
                                        determine whether an improper 
                                        payment has been made to the 
                                        hospital, psychiatric hospital, 
                                        or critical access hospital for 
                                        such claim.
                                    ``(V) Overturned on appeal 
                                defined.--In this subparagraph, the 
                                term `overturned on appeal' means, with 
                                respect to a complex audit denial, a 
                                denial that is overturned on appeal at 
                                the reconsideration level, the 
                                redetermination level, or the 
                                administrative law judge hearing level.
                    ``(D) Application to existing contracts.--Not later 
                than 60 days after the date of the enactment of this 
                paragraph, the Secretary shall modify, as necessary, 
                each contract under paragraph (1) that the Secretary 
                entered into prior to such date of enactment in order 
                to ensure that payment with respect to recovery 
                activities conducted under such contract is made in 
                accordance with the requirements described in this 
                paragraph.''.
    (b) Elimination of One-Year Timely Filing Limit To Rebill Part B 
Claims.--
            (1) In general.--Section 1842(b) of the Social Security Act 
        (42 U.S.C. 1395u(b)) is amended by adding at the end the 
        following new paragraph:
            ``(20) Exception to the one-year timely filing limit for 
        certain rebilled claims.--
                    ``(A) In general.--In the case of a claim submitted 
                under this part by a hospital (as defined in 
                subparagraph (B)(i)) for hospital services with respect 
                to which there was a previous claim submitted under 
                part A as inpatient hospital services or inpatient 
                critical access hospital services that was denied by a 
                medicare contractor (as defined in subparagraph 
                (B)(ii)) because of a determination that the inpatient 
                admission was not medically reasonable and necessary 
                under section 1862(a)(1)(A), the deadline described in 
                this paragraph is 180 days after the date of the final 
                denial of such claim under part A.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Hospital.--The term `hospital' has 
                        the meaning given such term in section 1861(e) 
                        and includes a psychiatric hospital (as defined 
                        in section 1861(f)) and a critical access 
                        hospital (as defined in section 1861(mm)(1)).
                            ``(ii) Medicare contractor.--The term 
                        `medicare contractor' has the meaning given 
                        such term under section 1889(g), and includes a 
                        recovery audit contractor with a contract under 
                        section 1893(h).
                            ``(iii) Final denial.--The term `final 
                        denial' means--
                                    ``(I) in the case that a hospital 
                                elects not to appeal a denial described 
                                in subparagraph (A) by a medicare 
                                contractor, the date of such denial; or
                                    ``(II) in the case that a hospital 
                                elects to appeal a such a denial, the 
                                date on which such appeal is 
                                exhausted.''.
            (2) Conforming amendments.--
                    (A) Section 1835(a)(1) of the Social Security Act 
                (42 U.S.C. 1395n(a)(1)) is amended by inserting ``or, 
                in the case of a claim described in section 
                1842(b)(20), not later than the deadline described in 
                such paragraph'' after ``the date of service''.
                    (B) Section 1842(b)(3)(B) of the Social Security 
                Act (42 U.S.C. 1395u(b)(3)(B)) is amended in the flush 
                language following clause (ii) by inserting ``or, in 
                the case of a claim described in section 1842(b)(20), 
                not later than the deadline described in such 
                paragraph'' after ``the date of service''.
            (3) Applicability.--The amendments made by this subsection 
        apply to claims submitted under part B of title XVIII of the 
        Social Security Act for hospital services for which there was a 
        previous claim submitted under part A as inpatient hospital 
        services or inpatient critical access hospital services that 
        was subject to a final denial (as defined in paragraph 
        (20)(B)(iii) of section 1842(b) of such Act (42 U.S.C. 
        1395u(b))) on or after the date of the enactment of this Act.
    (c) Medical Documentation Considered for Medical Necessity Reviews 
of Claims for Inpatient Hospital Services.--Section 1862(a) of the 
Social Security Act (42 U.S.C. 1395y(a)) is amended by adding at the 
end the following new sentence: ``A determination under paragraph (1) 
of whether inpatient hospital services or inpatient critical access 
hospital services furnished to an individual on or after the date of 
the enactment of this sentence are reasonable and necessary shall be 
based solely upon information available to the admitting physician at 
the time of the inpatient admission of the individual for such 
inpatient services, as documented in the medical record.''.

                 TITLE IV--FUTURE OF RURAL HEALTH CARE

SEC. 401. COMMUNITY OUTPATIENT HOSPITAL PROGRAM.

    (a) In General.--
            (1) Community outpatient hospital and qualified outpatient 
        services defined.--Section 1861 of the Social Security Act (42 
        U.S.C. 1395x) is amended--
                    (A) in the last sentence of subsection (e), by 
                inserting before the period at the end ``or a community 
                outpatient hospital (as defined in subsection 
                (iii)(1))''; and
                    (B) by adding at the end the following:

                    ``Community Outpatient Hospital

    ``(iii)(1) The term `community outpatient hospital' means a 
facility that--
            ``(A) at any time during the period beginning on the date 
        that is 5 years before the date of the enactment of this 
        subsection and ending on December 31, 2016, was a critical 
        access hospital, or is a hospital with not more than 50 beds 
        that is--
                    ``(i) located in a rural area (as defined in 
                section 1886(d)(2)(D)); or
                    ``(ii) treated as being located in a rural area 
                under section 1886(d)(8)(E);
            ``(B) provides emergency medical care and observation care 
        available on a 24-hour basis;
            ``(C) with respect to continuous care for an individual, 
        does not provide care over two or more consecutive midnights;
            ``(D) does not provide any acute care inpatient beds and 
        has protocols in place for the timely transfer of patients who 
        require other inpatient services;
            ``(E) has the resources required of a level IV or higher 
        trauma center (as verified by the American College of Surgeons 
        or other means specified by the Secretary), or has available 
        for consultation on a 24-hour basis a health care professional 
        who successfully completed the Advanced Trauma Life Support 
        Course offered by the American College of Surgeons (or an 
        equivalent course as determined by the Secretary) within the 
        preceding 4 years;
            ``(F) has in effect a transfer agreement with a level I or 
        level II trauma center designated under section 1231(1) of the 
        Public Health Service Act;
            ``(G) meets the requirements of subsection (aa)(2)(I);
            ``(H) has been approved by the State in which the facility 
        is located for treatment as a community outpatient hospital;
            ``(I) notifies the Secretary at such time and in such 
        manner as the Secretary may require of the intent of such 
        facility to be designated as a community outpatient facility; 
        and
            ``(J) meets such staff training and certification 
        requirements as the Secretary may require.
    ``(2) Nothing in this subsection or section 1834(r) shall be 
construed to prohibit a community outpatient hospital from having an 
agreement under section 1883 for the provision of extended care 
services.
    ``(3) Unless the context otherwise requires, a reference to a 
community outpatient hospital in this title shall be deemed to also be 
a reference to a critical access hospital.

                    ``Qualified Outpatient Services

    ``(jjj) The term `qualified outpatient services' means medical and 
other health services furnished on an outpatient basis by a community 
outpatient hospital, rural health clinic (as defined in section 
1861(aa)(2)), federally qualified health center (as defined in section 
1861(aa)(4)), or an entity certified by the Health Resources and 
Services Administration as a federally qualified health center look-
alike, including, for individuals who require services from a hospital 
or critical access hospital, transportation services from such 
community outpatient hospital to a hospital or critical access 
hospital.''.
            (2) Payment for qualified outpatient services.--Section 
        1834 of the Social Security Act (42 U.S.C. 1395m) is amended by 
        adding at the end the following:
    ``(r) Payment for Qualified Outpatient Services.--
            ``(1) In general.--The amount of payment for qualified 
        outpatient services is equal to 105 percent of the reasonable 
        costs of providing such services.
            ``(2) Telehealth services as reasonable costs.--For 
        purposes of this subsection, with respect to qualified 
        outpatient services, costs reasonably associated with having a 
        backup physician available via a telecommunications system 
        shall be considered reasonable costs.''.
    (b) Waiver of Distance Requirement for Replacement CAHs; Subsequent 
Redesignation of Community Outpatient Hospitals as CAHs.--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 inserting ``, subject to 
        subparagraph (F),'' before ``is located''; and
            (2) by adding at the end the following:
                    ``(F) Option to waive distance requirement.--The 
                State may waive the distance requirement described in 
                subparagraph (B)(i)(I) with respect to a facility 
                located in the State that is seeking designation as a 
                critical access hospital under this paragraph if the 
                total number of waivers for such facilities does not 
                exceed the number of facilities that are critical 
                access hospitals without such a waiver.
                    ``(G) Redesignation of a critical access hospital 
                as a community outpatient hospital.--A community 
                outpatient hospital may elect to be redesignated as a 
                community outpatient hospital by notifying the 
                Secretary at the same time and in the same manner as 
                notifications under section 1861(iii)(1)(I) if such 
                community outpatient hospital--
                            ``(i) meets the requirements in paragraphs 
                        (1) and (3) of section 1820(e); and
                            ``(ii) was designated as a critical access 
                        hospital under this paragraph on the date that 
                        the Secretary first considered such community 
                        outpatient hospital to be a community 
                        outpatient hospital.''.
    (c) Conforming Amendments.--
            (1) Reasonable cost for cohs.--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:
            ``(E) For additional items included in reasonable cost for 
        community outpatient hospitals and for determination of payment 
        amounts for qualified outpatient services, see section 
        1834(r).''.
            (2) COHs as covered services.--Section 1832(a)(2)(H) of the 
        Social Security Act (42 U.S.C. 1395k(a)(2)(H)) is amended by 
        inserting ``and qualified outpatient services (as defined in 
        section 1861(iii)(2))'' before the semicolon.
            (3) COH payments.--Section 1833(a) of the Social Security 
        Act (42 U.S.C. 1395l(a)) is amended--
                    (A) in paragraph (8), by striking ``; and'';
                    (B) in paragraph (9), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting after paragraph (9) the following:
            ``(10) in the case of qualified outpatient services, the 
        amounts described in section 1834(r).''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to items and services furnished on or after the 
        first day of the first calendar year beginning more than 1 year 
        after the date of the enactment of this Act.
    (d) Reports.--The Secretary of Health and Human Services shall 
submit to Congress three reports on the impact of community outpatient 
hospitals on the availability of health care and health outcomes in 
rural areas (as defined in section 1886(d)(2)(D) of the Social Security 
Act (42 U.S.C. 1395ww(d)(2)(D))) as follows:
            (1) Initial report.--An initial report approximately 2 
        years after the date of the enactment of this Act.
            (2) Interim report.--An interim report approximately 5 
        years after the date of the enactment of this Act.
            (3) Final report.--A final report approximately 10 years 
        after the date of the enactment of this Act.

SEC. 402. GRANT FUNDING TO ASSIST RURAL HOSPITALS.

    Section 330A of the Public Health Service Act (42 U.S.C. 254c) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``Director 
                specified in subsection (d)'' and inserting ``Director 
                of the Office of Rural Health Policy of the Health 
                Resources and Services Administration''; and
                    (B) by adding at the end the following:
            ``(6) Eligible rural hospital.--The term `eligible rural 
        hospital' means--
                    ``(A) a hospital (as defined in section 1861(e) of 
                the Social Security Act) that--
                            ``(i) has fewer than 50 beds; and
                            ``(ii) is located in a rural area (as 
                        defined in section 1886(d)(2)(D) of such Act) 
                        or treated as being located in a rural area 
                        pursuant to section 1886(d)(8)(E) of such Act;
                    ``(B) a community outpatient hospital (as defined 
                in section 1861(iii) of such Act); or
                    ``(C) a critical access hospital (as defined in 
                section 1861(mm) of such Act).''; and
            (2) by adding at the end the following:
    ``(i) Quality Improvement and Compliance Grants for Eligible Rural 
Hospitals.--
            ``(1) Grants.--The Director may award grants to eligible 
        rural hospitals to assist such hospitals with reporting on 
        quality and to prepare such hospitals to transition to value-
        based reimbursement.
            ``(2) Applications.--To be eligible to receive a grant 
        under this subsection, an eligible rural hospital shall prepare 
        and submit to the Secretary an application, at such time, in 
        such manner, and containing such information as the Secretary 
        may require, including a description of--
                    ``(A) how the eligible rural hospital will use the 
                funds provided under the grant; and
                    ``(B) how the project will be evaluated.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated for each fiscal year (beginning with fiscal 
        year 2019) $12,000,000 to carry out this subsection.
    ``(j) Outreach Grants for Rural Hospital Population Health.--
            ``(1) Grants.--To help eligible rural hospitals meet a 
        specific community need identified in a community needs 
        assessment, the Director may award grants to eligible rural 
        hospitals.
            ``(2) Limitation on size of grants to cohs.--The Secretary 
        may not award more than $650,000 each fiscal year to a 
        community outpatient hospital that is described in subsection 
        (b)(6)(B).
            ``(3) Applications.--To be eligible to receive a grant 
        under this subsection, an eligible rural hospital shall prepare 
        and submit to the Secretary an application, at such time, in 
        such manner, and containing such information as the Secretary 
        may require, including--
                    ``(A) a description of how the eligible rural 
                hospital will use the funds provided under the grant;
                    ``(B) the results of community needs assessment 
                that identified the specific community need described 
                in paragraph (1); and
                    ``(C) a description of how the project will be 
                evaluated.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated for each fiscal year (beginning with fiscal 
        year 2019)--
                    ``(A) $15,000,000 for grants to eligible rural 
                hospitals described in subparagraphs (A) and (C) of 
                subsection (b)(6); and
                    ``(B) $50,000,000 for grants to eligible rural 
                hospitals described in subparagraph (B) of such 
                subsection.
    ``(k) EMS Grant Funding.--
            ``(1) Grants.--The Director may award grants to eligible 
        rural hospitals to develop and implement strategies to develop 
        successful emergency medical services programs that meet 
        community needs, provide quality care, and address workforce 
        and funding problems.
            ``(2) Applications.--To be eligible to receive a grant 
        under this subsection, an eligible rural hospital shall prepare 
        and submit to the Secretary an application, at such time, in 
        such manner, and containing such information as the Secretary 
        may require, including a description of--
                    ``(A) how the eligible rural hospital will use the 
                funds provided under the grant;
                    ``(B) any multistate collaborations involved in 
                using such funds; and
                    ``(C) how the use of funds will be evaluated.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated for each fiscal year (beginning with fiscal 
        year 2019) $2,000,000 to carry out this subsection.''.

SEC. 403. CMMI DEMONSTRATION OF SHARED SAVINGS IN RURAL HOSPITALS.

    Section 1115A(b)(2)(B) of the Social Security Act (42 U.S.C. 
1315a(b)(2)(B)) is amended by adding at the end the following:
                            ``(xxv) Promoting greater shared savings 
                        with hospitals located in rural areas, with 
                        critical access hospitals (as defined in 
                        section 1861(mm)(1)), and with community 
                        outpatient hospitals (as defined in section 
                        1861(iii)(1)).''.
                                 <all>