[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 192 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 192

  To provide for improvements to the health of farm families, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Gunderson introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
  To provide for improvements to the health of farm families, 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.

    This Act may be cited as the ``Farm and Rural Medical Equity Reform 
Act of 1993''.

                           TABLE OF CONTENTS

Sec. 1. Short title.
   TITLE I--DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES FOR THE SELF-
                                EMPLOYED

Sec. 101. Increase in amount of deduction for health insurance costs of 
                            self-employed individuals.
                   TITLE II--MEDICAL SAVINGS ACCOUNTS

Sec. 202. Unused amounts in flexible spending accounts transferable to 
                            medical savings accounts.
Sec. 203. Deduction for amounts paid for qualified catastrophic 
                            coverage health plan.
     TITLE III--UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC BILLS

Sec. 301. Advisory council on health claim processing standardization.
Sec. 302. Specification and use of uniform health claim reimbursement 
                            forms.
           TITLE IV--HEALTH INSURANCE PORTABILITY PROVISIONS

Sec. 401. Limitation on exclusion for pre-existing conditions; 
                            assurance of continuity of coverage.
Sec. 402. Limits on premium increases.
Sec. 403. Definitions.
Sec. 404. Excise tax for violations.
           TITLE V--IMPROVED ACCESS TO RURAL HEALTH SERVICES

        Subtitle A--Rural Emergency Medical Services Amendments

Sec. 501. Establishment of office of emergency medical services.
Sec. 502. State offices of emergency medical services.
Sec. 503. Programs for rural areas.
Sec. 504. Funding.
Sec. 505. Conforming Amendments.
     Subtitle B--Extension of Special Treatment Rules for Medicare 
                    Dependent, Small Rural Hospitals

Sec. 511. Extension of special treatment rules for Medicare dependent, 
                            small rural hospitals.
                   Subtitle C--Outreach Grant Program

Sec. 521. Establishment of program of grants for rural health outreach.

   TITLE I--DEDUCTIBILITY OF HEALTH INSURANCE EXPENSES FOR THE SELF-
                                EMPLOYED

SEC. 101. INCREASE IN AMOUNT OF DEDUCTION FOR HEALTH INSURANCE COSTS OF 
              SELF-EMPLOYED INDIVIDUALS.

    (a) Increase in Deduction.--Paragraph (1) of section 162(l) of the 
Internal Revenue Code of 1986 (relating to special rules for health 
insurance costs of self-employed individuals) is amended by striking 
``25 percent'' and inserting ``100 percent''.
    (b) Deduction Made Permanent.--Subsection (l) of section 162 of 
such Code is amended by striking paragraph (6).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after June 30, 1992.

                   TITLE II--MEDICAL SAVINGS ACCOUNTS

SEC. 201. MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 220 as 
section 221 and by inserting after section 219 the following new 
section:

``SEC. 220. MEDICAL SAVINGS ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an eligible individual, 
there shall be allowed as a deduction amounts paid in cash during the 
taxable year by or on behalf of such individual to a medical savings 
account.
    ``(b) Limitation.--
            ``(1) In general.--The amount allowable as a deduction 
        under subsection (a) to an individual for the taxable year 
        shall not exceed the excess (if any) of--
                    ``(A) the lesser of--
                            ``(i) the applicable limit, or
                            ``(ii) the compensation (as defined in 
                        section 219(f)) includible in the individual's 
                        gross income for the taxable year, over
                    ``(B) the sum of--
                            ``(i) the value of employer-provided 
                        coverage for the medical expenses of such 
                        individual,
                            ``(ii) the amount paid by the individual 
                        (other than from amounts distributed from a 
                        medical savings account) for coverage under 
                        qualified catastrophic coverage health plan for 
                        coverage for such individual, the spouse of 
                        such individual, and dependents (as defined in 
                        section 152) of such individual, plus
                            ``(iii) the aggregate amount contributed to 
                        such account during the taxable year pursuant 
                        to section 125(d)(3).
            ``(2) Applicable limit.--For purposes of paragraph (1), the 
        applicable limit is the sum of--
                    ``(A) $4,800, plus
                    ``(B) $600 for each individual who is a dependent 
                (as defined in section 152) of the individual for whose 
                benefit the account is established.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Medical savings account.--The term `medical savings 
        account' means a trust created or organized in the United 
        States exclusively for the purpose of paying the qualified 
        medical expenses of the individual for whose benefit the trust 
        is established, but only if the written governing instrument 
        creating the trust meets the following requirements:
                    ``(A) A contribution will be accepted unless it is 
                in cash and contributions will not be accepted for any 
                taxable year in excess of the applicable limit )as 
                defined in subsection (b)(2)).
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Eligible individual.--The term `eligible individual' 
        means any individual if--
                    ``(A) Such individual is not covered by any 
                employer-provided group health plan, or
                    ``(B) such individual is covered by an employer-
                provided group health plan which is a qualified 
                catastrophic coverage health plan and is not covered by 
                any other health plan.
            ``(3) Qualified medical expenses.--
                    ``(A) In general.--The term `qualified medical 
                expenses' means--
                            ``(i) medical expenses, and
                            ``(ii) amounts paid for qualified long-term 
                        care insurance (as defined in section 818(g)).
                    ``(B) Medical expenses.--The term `medical 
                expenses' means amount paid by the individual for whose 
                benefit the account was established for medical care 
                (as defined in section 213) of such individual, the 
                spouse of such individual, and any dependent (as 
                defined in section 152) of such individual, but only to 
                the extent such amounts are not compensated for by 
                insurance of otherwise.
            ``(4) Qualified catastrophic coverage health plan.--The 
        term `qualified catastrophic coverage health plan' means any 
        health plan which is certified by the Secretary of Health and 
        Human Services as a plan--
                    ``(A) which provides no compensation for medical 
                expenses not exceeding $3,000 during any year,
                    ``(B) which requires the individual to pay 15 
                percent of such individual's medical expenses to the 
                extent they exceed $3,000 but not $9,000 during any 
                year, and
                    ``(C) which provides full reimbursement for medical 
                expenses exceeding $9,000.
            ``(5) Time when contributions deemed made.--A taxpayer 
        shall be deemed to have made a contribution on the last day of 
        the preceding taxable year if the contribution is made on 
        account of such taxable year and is made not later than the 
        time prescribed by law for filing the return for such taxable 
        year (not including extensions thereof).
    ``(d) Tax Treatment of Distributions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount paid or distributed out of a medical 
        savings account shall be included in the gross income of the 
        individual for whose benefit such account was established 
        unless such amount is used exclusively to pay the qualified 
        medical expenses of such individual.
            ``(2) Excess contributions returned before due date of 
        return.--Paragraph (1) shall not apply to the distribution of 
        any contribution paid during a taxable year to a medical 
        savings account to the extent that such contribution exceeds 
        the amount allowable as a deduction under subsection (a) if--
                    ``(A) such distribution is received on or before 
                the day prescribed by law (including extensions of 
                time) for filing such individual's return for such 
                taxable year,
                    ``(B) no deduction is allowed under subsection (a) 
                with respect to such excess contribution, and
                    ``(C) such distribution is accompanied by the 
                amount of net income attributable to such excess 
                contribution.
        Any net income described in subparagraph (C) shall be included 
        in the gross income of the individual for the taxable year in 
        which it is received.
    ``(e) Tax Treatment of Accounts.--
            ``(1) Exemption from tax.--A medical savings account is 
        exempt from taxation under this subtitle unless such account 
        has ceased to be an investment savings account by reason of 
        paragraph (2). Notwithstanding the preceding sentence, any such 
        account is subject to the taxes imposed by section 511 
        (relating to imposition of tax on unrelated business income of 
        charitable, etc. organizations).
            ``(2) Loss of exemption of account where individual engages 
        in prohibited transaction.--
                    ``(A) In general.--If, during any taxable year of 
                the individual for whose benefit the medical savings 
                account was established, such individual engages in any 
                transaction prohibited by section 4975 with respect to 
                the account, the account ceases to be a medical savings 
                account as of the first day of that taxable year.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                a medical savings account by reason of subparagraph (A) 
                on the first day of any taxable year, paragraph (1) of 
                subsection (d) applies as if there were a distribution 
                on such first day in an amount equal to the fair market 
                value (on such first day) of all assets in the account 
                (on such first day).
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit a medical 
        savings account was established uses the account or any portion 
        thereof as security for a loan, the portion so used is treated 
        as distributed to that individual.
    ``(f) Additional Tax on Certain Amounts Included in Gross Income.--
            ``(1) Distribution not used for qualified medical 
        expenses.--If a distribution from a medical savings account is 
        made, and not used to pay the qualified medical expenses of the 
        individual for whose benefit the account was established, the 
        tax liability of such individual for the taxable year in which 
        such distribution is received shall be increased by an amount 
        equal to 10 percent of the amount of the distribution which is 
        includible in gross income for such taxable year.
            ``(2) Disqualification cases.--If an amount is includible 
        in the gross income of an individual for a taxable year under 
        subsection (e), his tax under this chapter for such taxable 
        year shall be increased by an amount equal to 10 percent of 
        such amount includible in his gross income.
            ``(3) Disability or death cases.--Paragraphs (1) and (2) do 
        not apply if the payment or distribution is made after the 
        individual for whose benefit the medical savings account was 
        established becomes disabled within the meaning of section 
        72(m)(7) or dies.
    ``(g) Special Rules.--
            ``(1) Community property laws.--This section shall be 
        applied without regard to any community property laws.
            ``(2) Custodial accounts.--For purposes of this section, a 
        custodial account shall be treated as a trust if--
                    ``(A) the assets of such account are held by a bank 
                (as defined in section 408(n)) or another person who 
                demonstrates to the satisfaction of the Secretary that 
                the manner in which he will administer the account will 
                be consistent with the requirements of this section, 
                and
                    ``(B) the custodial account would, except for the 
                fact that it is not a trust, constitute a medical 
                savings account described in subsection (c).
        For purposes of this title, in the case of a custodial account 
        treated as a trust by reason of the preceding sentence, the 
        custodian of such account shall be treated as the trustee 
        thereof.
            ``(3) Denial of deductions.--No amount paid or distributed 
        from a medical savings account shall be taken into account in 
        determining the deduction provided by section 213.
    ``(h) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1994, each applicable dollar 
        amount shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment for the 
                calendar year in which the taxable year begins.
            ``(2) Cost-of-living adjustment.--For purposes of paragraph 
        (1), the cost-of-living adjustment for any calendar year is the 
        percentage (if any) by which--
                    ``(A) the deemed average total wages (as defined in 
                section 209(k) of the Social Security Act) for the 
                preceding calendar year, exceeds
                    ``(B) the deemed average total wages (as so 
                defined) for calendar year 1993.
            ``(3) Applicable dollar amount.--For purposes of paragraph 
        (1), the term `applicable dollar amount' means--
                    ``(A) the $4,800 and $600 amounts in subsection 
                (b), and
                    ``(B) the $3,000 and $9,000 amounts in subsection 
                (c)(4).
            ``(4) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $10, such amount shall be rounded to 
        the nearest multiple of $10 (or, if such amount is a multiple 
        of $5 and not of $10, such amount shall be rounded to the next 
        highest multiple of $10).
    ``(i) Reports.--The trustee of a medical savings account shall make 
such reports regarding such account to the Secretary and to the 
individual for whose benefit the account is maintained with respect to 
contributions, distributions, and such other matters as the Secretary 
may require under regulations. The reports required by this subsection 
shall be filed at such time and in such manner and furnished to such 
individuals at such time and in such manner as may be required by those 
regulations.''.
    (b) Deduction Allowed in Arriving at Adjusted Gross Income.--
Paragraph (7) of section 62(a) of such Code (relating to retirement 
savings) is amended--
            (1) by inserting ``or medical expense'' after 
        ``Retirement'' in the heading of such paragraph, and
            (2) by inserting before the period at the end thereof the 
        following: ``and the deduction allowed by section 220 (relating 
        to deduction of certain payments to medical savings 
        accounts)''.
    (c) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to individual retirement 
accounts, certain section 403(b) contracts, and certain individual 
retirement annuities) is amended--
            (1) by inserting ``medical savings accounts,'' after 
        ``accounts,'' in the heading of such section,
            (2) by redesignating paragraph (2) of subsection (a) as 
        paragraph (3) and by inserting after paragraph (1) the 
        following:
            ``(2) a medical savings account (within the meaning of 
        section 220(c)),'',
            (3) by striking ``or'' at the end of paragraph (1) of 
        subsection (a), and
            (4) by adding at the end thereof the following new 
        subsection:
    ``(d) Excess Contributions to Medical Savings Accounts.--For 
purposes of this section, in the case of a medical savings account, the 
term `excess contributions' means the amount by which the amount 
contributed for the taxable year to the account exceeds the amount 
allowable as a deduction under section 220 for such taxable year. For 
purposes of this subsection, any contribution which is distributed out 
of the medical savings account and a distribution to which section 
220(d)(2) applies shall be treated as an amount not contributed.''.
    (d) Tax on Prohibited Transactions.--Section 4975 of such Code 
(relating to prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for medical savings accounts.--An 
        individual for whose benefit a medical savings account is 
        established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a medical 
        savings account by reason of the application of section 
        220(e)(2)(A) to such account.'', and
            (2) by inserting ``or a medical savings account described 
        in section 220(c)'' in subsection (e)(1) after ``described in 
        section 408(a)''.
    (e) Failure To Provide Reports on Medical Savings Accounts.--
Section 6693 of such Code (relating to failure to provide reports on 
individual retirement account or annuities) is amended--
            (1) by inserting ``or on medical savings accounts'' after 
        ``annuities'' in the heading of such section, and
            (2) by adding at the end of subsection (a) the following: 
        ``The person required by section 220(i) to file a report 
        regarding a medical savings account at the time and in the 
        manner required by such section shall pay a penalty of $50 for 
        each failure unless it is shown that such failure is due to 
        reasonable cause.''
    (f) Clerical Amendments.--
            (1) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 220 and inserting the following:

``Sec. 220. Medical savings accounts.
``Sec. 221. Cross reference.''.
            (2) The table of sections for chapter 43 of such Code is 
        amended by striking the item relating to section 4973 and 
        inserting the following:

``Sec. 4973. Tax on excess contributions to individual retirement 
                            accounts, medical savings accounts, certain 
                            403(b) contracts, and certain individual 
                            retirement annuities.''.
            (3) The table of sections for subchapter B of chapter 68 of 
        such Code is amended by inserting ``or on medical savings 
        accounts'' after ``annuities'' in the item relating to section 
        6693.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 202. UNUSED AMOUNTS IN FLEXIBLE SPENDING ACCOUNTS TRANSFERABLE TO 
              MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Subsection (d) of section 125 of the Internal 
Revenue Code of 1986 (relating to cafeteria plans) is amended by adding 
at the end thereof the following new paragraph:
            ``(3) Unused amounts transferable to medical savings 
        accounts.--
                    ``(A) In general.--Subsection (a) shall not fail to 
                apply to a participant in a plan, and a plan shall not 
                fail to be treated as a cafeteria plan, solely because 
                under the plan amounts not paid out as reimbursements 
                under a flexible spending arrangement for health and 
                disability for the benefit of an individual are 
                contributed to a medical savings account (as defined in 
                section 220(c)) for the benefit of such individual.
                    ``(B) Special rules.--
                            ``(i) Timing of contributions.--
                        Contributions made under this paragraph shall 
                        be made on the last day of the plan year of the 
                        cafeteria plan.
                            ``(ii) Availability requirement.--
                        Subparagraph (A) shall apply only if the plan 
                        is available to at least 80 percent of the 
                        employees of the employer. For purposes of the 
                        preceding sentence, there shall be excluded 
                        employees who are excluded under section 
                        414(q)(8) or who would be so excluded if `30' 
                        were substituted for `17\1/2\' in subparagraph 
                        (B) thereof.''.
    (b) Treatment of Amounts Received by Qualified Cash or Deferred 
Arrangement.--
            (1) Paragraph (2) of section 401(k) of such Code is amended 
        by striking ``and'' at the end of subparagraph (C), by striking 
        the period at the end of subparagraph (D) and inserting ``, 
        and'', and by adding at the end thereof the following new 
        subparagraph:
                    ``(E) which provides that, with respect to amounts 
                held by the trust which are attributable to 
                contributions made to the trust pursuant to section 
                125(d)(3)--
                            ``(i) an employee's right to such amounts 
                        is nonforfeitable, and
                            ``(ii) such amounts may be used only to pay 
                        expenses (not compensated for by insurance or 
                        otherwise) for the medical care (as defined in 
                        section 213) of the employee, the spouse of the 
                        employee, or any dependent (as defined in 
                        section 152) of the employee.''.
            (2) Subsection (k) of section 401 of such Code is amended 
        by adding at the end thereof the following new paragraph:
            ``(11) Treatment of amounts received from medical savings 
        arrangements.--Contributions made to a trust by reason of 
        section 125(d)(3) shall not be taken into account under 
        paragraph (3)(A)(ii), and subsection (1) shall not apply to 
        such contributions.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

SEC. 203. DEDUCTION FOR AMOUNTS PAID FOR QUALIFIED CATASTROPHIC 
              COVERAGE HEALTH PLAN.

    (a) In General.--Section 213 of the Internal Revenue Code of 1986 
(relating to medical, dental, etc., expenses) is amended adding at the 
end thereof the following new subsection:
    ``(g) Full Deduction for Amounts Paid for Qualified Catastrophic 
Coverage Health Plans.--In the case of amounts paid for coverage under 
a qualified catastrophic coverage health plan (as defined in section 
220(c))--
            ``(1) subsection (a) shall be applied without regard to the 
        limitation based on adjusted gross income, and
            ``(2) such amounts shall not be taken into account in 
        determining whether any other amounts are allowable as a 
        deduction under this section.''.
    (b) Technical Amendment.--Paragraph (2) of section 162(l) of such 
Code is amended by adding at the end thereof the following new 
subparagraph:
                    ``(C) Qualified catastrophic coverage.--Paragraph 
                (1) shall not apply to any amount allowed as a 
                deduction under section 213 for amounts paid for 
                coverage under a qualified catastrophic coverage health 
                plan (as defined in section 220(c)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

    TITLE III--UNIFORM CLAIMS; ELECTRONIC CARDS; ELECTRONIC BILLING

SEC. 301. ADVISORY COUNCIL ON HEALTH CLAIM PROCESSING STANDARDIZATION.

    (a) Establishment.--The Secretary of Health and Human Services (in 
this title referred to as the ``Secretary'') shall establish an 
Advisory Council on Health Claim Processing Standardization (in this 
title referred to as the ``Council'').
    (b) Composition.--The Council shall consist of 15 members appointed 
by the Secretary and shall include individuals representative of the 
health care community.
    (c) Recommendations.--Not later than 2 years after a majority of 
its members are appointed, the Council shall submit to the Secretary 
recommendations concerning--
            (1) standards for uniform health claim reimbursement forms 
        for hospitals and physicians and the information to be 
        contained on such forms;
            (2) standards for electronic cards that could be used to 
        store a patient's insurance information and medical records; 
        and
            (3) the computerization of health claim billing and the use 
        of electronic means to transmit billing information from 
        hospitals and physicians to insurers and the Secretary.

SEC. 302. SPECIFICATION AND USE OF UNIFORM HEALTH CLAIM REIMBURSEMENT 
              FORMS.

    (a) Establishment.--Taking into account the recommendations of the 
Council under section 301(c)(1), the Secretary shall specify a uniform 
health claim reimbursement form for use by hospitals and such a form 
for use by physicians.
    (b) Use.--(1) Each insurer or other entity responsible for 
administration of a health benefit plan shall require the use of the 
appropriate form specified under subsection (a) for claims for hospital 
services or physician services in the United States under the plan.
    (2) The requirement of paragraph (1) shall apply with respect to 
claims for reimbursement submitted under a health benefit plan more 
than 6 months after the date of the Secretary specifies the forms under 
subsection (a).
    (c) Health Benefit Plan Defined.--The term ``health benefit plan'' 
means any hospital or medical expense incurred policy or certificate, 
hospital or medical service plan contract, health maintenance 
subscriber contract, multiple employer welfare arrangement, employee 
benefit plan (as defined under the Employee Retirement Income Security 
Act of 1974) that provides benefits with respect to health care 
services, or the medicare or medicaid programs, but does not include--
            (1) coverage only for accident, dental, vision, disability 
        income, or long-term care insurance, or any combination 
        thereof,
            (2) coverage issued as a supplement to liability insurance,
            (3) worker's compensation or similar insurance, or
            (4)  automobile  medical-payment  insurance, or any 
        combination thereof.

           TITLE IV--HEALTH INSURANCE PORTABILITY PROVISIONS

SEC. 401. LIMITATION ON EXCLUSION FOR PRE-EXISTING CONDITIONS; 
              ASSURANCE OF CONTINUITY OF COVERAGE.

    (a) Limitations on Treatment of Pre-Existing Conditions.--Subject 
to subsection (c), a carrier may not impose (or require an employer to 
impose through a waiting period for coverage under a group health plan 
or similar requirement) a limitation or exclusion of benefits under a 
group health plan relating to treatment of a condition based on the 
fact that the condition pre-existed the effectiveness of the coverage 
if--
            (1) the condition relates to a condition that was not 
        diagnosed or treated within 3 months before the date of 
        coverage under the plan;
            (2) the limitation or exclusion extends over more than 6 
        months after the date of coverage under the plan;
            (3) the limitation or exclusion applies to an individual 
        who, as of the date of birth, was covered under the plan or 
        whose mother, as of such date, was covered under the plan; or
            (4) the limitation or exclusion relates to pregnancy.
In the case of an individual who is eligible for coverage under an 
employer health benefit plan but for a waiting period imposed by the 
employer, in applying paragraphs (1) and (2), the individual shall be 
treated as having been covered under the plan as of the earliest date 
of the beginning of the waiting period.
    (b) Assurance of Continuity of Coverage Through Previous 
Satisfaction of Pre-Existing Condition Requirement.--
            (1) In general.--Each carrier shall waive any period 
        applicable to a preexisting condition for similar benefits with 
        respect to an individual to the extent that the individual was 
        covered for the condition under any health benefit plan that 
        was in effect before the date of the enrollment under the 
        carrier's plan.
            (2) Continuous coverage required.--
                    (A) In general.--Paragraph (1) shall no longer 
                apply if there is a continuous period of more than 60 
                days on which the individual was not covered under a 
                health benefit plan.
                    (B) Treatment of waiting periods.--In applying 
                subparagraph (A), any waiting period imposed by an 
                employer before an employee is eligible to be covered 
                under a policy shall be treated as a period in which 
                the employee was covered under a health benefit plan.
            (3) Exclusion of cash-only and dread disease policies.--In 
        this subsection, the term ``health benefit plan'' does not 
        include any insurance which is offered primarily to provide--
                    (A) coverage for a specified disease or illness, or
                    (B) hospital or fixed indemnity policy, unless the 
                Secretary (or in the case of a plan in a State, the 
                State) determines that such a policy provides 
                sufficiently comprehensive coverage of a benefit so 
                that it should be treated as a health benefit plan 
                under this subsection.
    (c) Regulatory Authority.--The Secretary is authorized directly, or 
through the states, to issue such regulations as may be required to 
carry out this section.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to coverage provided under a group health plan on or 
        after the first day of the first month beginning more than 1 
        year after the date of the enactment of this Act.
            (2) Application.--In applying paragraph (1), coverage 
        provided before the effective date shall be taken into account 
        in applying this section.

SEC. 402. LIMITS ON PREMIUM INCREASES.

    (a) In General.--A carrier may not provide for an increase in the 
premium charged a small employer for a small employer health benefit 
plan in a percentage that exceeds the percentage change in the premium 
charged under the plan for a newly covered employer within the same 
class of business plus 15 percentage points.
    (b) A carrier will only be allowed to set the maximum percent 
increase in renewal premiums at 5 percent plus the percent change in 
the base premium rate.
    (c) Effective Date.--Subsection (a) shall apply to premiums for 
plans renewed more than 1 year after the date of the enactment of this 
Act.

SEC. 403. DEFINITIONS.

    In this title:
            (1) The term ``carrier'' means any entity which provides 
        health insurance or health benefits in a State, and includes a 
        licensed insurance company, a prepaid hospital or medical 
        service plan, a health maintenance organization, the plan 
        sponsor of a multiple employer welfare arrangement or an 
        employee benefit plan (as defined under the Employee Retirement 
        Income Security Act of 1974), or any other entity providing a 
        plan of health insurance subject to State insurance regulation.
            (2) The term ``employer health benefit plan'' means a 
        health benefit plan (including an employee welfare benefit 
        plan, as defined in section 3(1) of the Employee Retirement 
        Income Security Act of 1974) which is offered to employees 
        through an employer and for which the employer provides for any 
        contribution to such plan or any premium for such plan are 
        deducted by the employer from compensation to the employee.
            (3) The term ``full-time employee'' means, with respect to 
        an employer, an individual who normally is employed for at 
        least thirty hours per week by the employer.
            (4) The term ``small employer'' means an entity actively 
        engaged in business which, on at least 50 percent of its 
        working days during the preceding year, employed at least two, 
        but no more than one hundred, full-time employees. For purposes 
        of determining if an employer is a small employer, rules 
        similar to the rules of subsection (b) and (c) of section 414 
        of the Internal Revenue Code of 1986 shall apply.
            (5) The term ``small employer carrier'' means a carrier 
        with respect to the issuance of a small employer health benefit 
        plan.
            (6) The term ``small employer health benefit plan'' means 
        an employer health benefit plan which provides coverage to one 
        or more full-time employees of a small employer.
            (7) The term ``base premium rate'' means the lowest premium 
        that the insurer may charge for a group with similar 
        demographic characteristics, excluding factors related to 
        health status, claims history, or duration of coverage.
            (8) The term ``State'' means the 50 States, the District of 
        Columbia, Puerto Rico, the Virgin Islands, Guam, and American 
        Samoa.

SEC. 404. EXCISE TAX FOR VIOLATIONS.

    (a) In General.--Chapter 47 of the Internal Revenue Code of 1986 
(relating to taxes on group health plans) is amended by adding at the 
end thereof the following new section:

``SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH 
              INSURANCE.

    ``(a) General Rule.--
            ``(1) Tax for portability violations.--There is hereby 
        imposed a tax on a carrier for violating a requirement of 
        section 401 of the Farm and Rural Equity Reform Act of 1993, 
        and
            ``(2) Tax for excessive premium increase.--There is hereby 
        imposed a tax on a carrier providing for a premium increase in 
        violation of section 402 of the Farm and Rural Medical Equity 
        Reform Act of 1993.
            ``(3) Determination of violations.--The Secretary of Health 
        and Human Services shall determine whether any carrier meets 
        the requirements of such sections.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) by reason of 1 or more violations during a taxable year 
        shall be equal to 25 percent of the gross premiums received 
        during such taxable year with respect to the employer health 
        benefit plan with respect to which the violation occurred.
            ``(2) Gross premiums.--For purposes of paragraph (1), gross 
        premiums shall include any consideration received with respect 
        to any health benefit plan.
            ``(3) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) Controlled group of corporations.--All 
                corporations which are members of the same controlled 
                group of corporations shall be treated as 1 person. For 
                purposes of the preceding sentence, the term 
                `controlled group of corporations' has the meaning 
                given to such term by section 1563(a), except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a)(1), and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and 
                        (e)(3)(C) of section 1563.
                    ``(B) Partnerships, proprietorships, etc., which 
                are under common control.--Under regulations prescribed 
                by the Secretary, all trades or business (whether or 
                not incorporated) which are under common control shall 
                be treated as 1 person. The regulations prescribed 
                under this subparagraph shall be based on principles 
                similar to the principles which apply in the case of 
                subparagraph (A).
    ``(c) Limitation on Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) with respect to any failure for which it is 
        established to the satisfaction of the Secretary that the 
        person on whom the tax is imposed did not know, and exercising 
        reasonable diligence would not have known, that such failure 
        existed.
            ``(2) Tax not to apply where failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) with respect 
        to any failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the 1st date any of the persons on 
                whom the tax is imposed knew, or exercising reasonable 
                diligence would have known, that such failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Carrier; Employer Health Benefit Plan Defined.--For purposes 
of this section, the terms `carrier' and `employer health benefit plan' 
have the meanings given such terms in section 403 of the Farm and Rural 
Medical Equity Reform Act of 1993.''.
    (b) Nondeductibility of Tax.--Paragraph (6) of section 275(a) of 
such Code (relating to nondeductibility of certain taxes) is amended by 
inserting ``47,'' after ``46,''.
    (c) Clerical Amendments.--The table of sections for such chapter 47 
is amended by adding at the end thereof the following new item:

``Sec. 5000A. Failure to satisfy certain standards for health 
                            insurance.''.
    (d) Effective Dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (c) shall take effect on the date of the enactment of this Act.
            (2) Nondeductibility of tax.--The amendment made by section 
        503(b) shall apply to taxable years beginning after December 
        31, 1993.

           TITLE V--IMPROVED ACCESS TO RURAL HEALTH SERVICES

        Subtitle A--Rural Emergency Medical Services Amendments

SEC. 501. ESTABLISHMENT OF OFFICE OF EMERGENCY MEDICAL SERVICES.

    Title XII of the Public Health Service Act (42 U.S.C. 300d et seq.) 
is amended--
            (1) in the heading for the title, by striking ``TRAUMA 
        CARE'' and inserting ``EMERGENCY MEDICAL SERVICES'';
            (2) in the heading for part A, by striking ``General'' and 
        all that follows and inserting ``General Authorities and 
        Duties''; and
            (3) by amending section 1201 to read as follows:

``SEC. 1201. ESTABLISHMENT OF OFFICE OF EMERGENCY MEDICAL SERVICES.

    ``(a) In General.--The Secretary shall establish an office to be 
known as the Office of Emergency Medical Services, which shall be 
headed by a director appointed by the Secretary. The Secretary shall 
carry out this title acting through the Director of such Office.
    ``(b) General Authorities and Duties.--With respect to emergency 
medical services (including trauma care), the Secretary shall--
            ``(1) conduct and support research, training, evaluations, 
        and demonstration projects;
            ``(2) foster the development of appropriate, modern systems 
        of such services through the sharing of information among 
        agencies and individuals involved in the study and provision of 
        such services;
            ``(3) sponsor workshops and conferences;
            ``(4) as appropriate, disseminate to public and private 
        entities information obtained in carrying out paragraphs (1) 
        through (4);
            ``(5) provide technical assistance to State and local 
        agencies;
            ``(6) coordinate activities of the Department of Health and 
        Human Services; and
            ``(7) as appropriate, coordinate activities of such 
        Department with activities of other Federal agencies.
    ``(c) Certain Requirements.--With respect to emergency medical 
services (including trauma care), the Secretary shall ensure that 
activities under subsection (b) are carried out regarding--
            ``(1) maintaining an adequate number of health 
        professionals with expertise in the provision of the services, 
        including hospital-based professional and prehospital-based 
        professionals;
            ``(2) developing, periodically reviewing, and revising as 
        appropriate, in collaboration with appropriate public and 
        private entities, guidelines for the provision of such services 
        (including, for various typical circumstances, guidelines on 
        the number and variety of professionals, on equipment, and on 
        training);
            ``(3) the appropriate use of available technologies, 
        including communications technologies; and
            ``(4) the unique needs of underserved inner-city areas and 
        underserved rural areas.
    ``(d) Grants, Cooperative Agreements, and Contracts.--In carrying 
out subsections (b) and (c), the Secretary may make grants and enter 
into cooperative agreements and contracts.
    ``(e) Definitions.--For purposes of this part:
            ``(1) The term `hospital-based professional' means a health 
        professional (including an allied health professional) who has 
        expertise in providing one or more emergency medical services 
        and who normally provides the services at a medical facility.
            ``(2) The term `prehospital-based professional' means a 
        health professional (including an allied health professional) 
        who has expertise in providing one or more emergency medical 
        services and who normally provides the services at the site of 
        the medical emergency or during transport to a medical 
        facility.''.

SEC. 502. STATE OFFICES OF EMERGENCY MEDICAL SERVICES.

    (a) Technical Amendments to Facilitate Establishment of Program.--
            (1) In general.--Title XII of the Public Health Service Act 
        (42 U.S.C. 300d et seq.) is amended--
                    (A) by redesignating section 1232 as section 1235;
                    (B) by redesignating sections 1231 and 1233 as 
                sections 1241 and 1242, respectively; and
                    (C) by redesignating sections 1211 through 1222 as 
                sections 1221 through 1232, respectively.
            (2) Modifications in format of title xii.--Title XII of the 
        Public Health Service Act, as amended by paragraph (1) of this 
        subsection, is amended--
                    (A) by striking ``Part B'' and all that follow 
                through ``State Plans'' and inserting the following:

  ``Subpart II--Formula Grants With Respect to Modifications of State 
                                Plans'';

                    (B) by striking ``Part C--General Provisions'' and 
                inserting the following:

                  ``Subpart III--General Provisions'';

                    (C) be redesignating sections 1202 and 1203 as 
                sections 1211 and 1212, respectively; and
                    (D) by inserting before section 1211 (as so 
                redesignated) the following:

                         ``Part B--Trauma Care

            ``Subpart I--Advisory Council; Clearinghouse''.

    (b) State Offices.--Title XII of the Public Health Service Act, as 
amended by subsection (a) of this section, is amended by inserting 
after section 1201 the following new section:

``SEC. 1202. STATE OFFICES OF EMERGENCY MEDICAL SERVICES.

    ``(a) Program of Grants.--The Secretary may make grants to States 
for the purpose of improving the availability and quality of emergency 
medical services through the operation of State offices of emergency 
medical services.
    ``(b) Requirement of Matching Funds.--
            ``(1) In general.--The Secretary may not make a grant under 
        subsection (a) unless the State involved agrees, with respect 
        to the costs to be incurred by the State in carrying out the 
        purpose described in such subsection, to provide non-Federal 
        contributions toward such costs in an amount that--
                    ``(A) for the first fiscal year of payments under 
                the grant, is not less than $1 for each $3 of Federal 
                funds provided in the grant;
                    ``(B) for any second fiscal year of such payments, 
                is not less than $1 for each $1 of Federal funds 
                provided in the grant; and
                    ``(C) for any third fiscal year of such payments, 
                is not less than $3 for each $1 of Federal funds 
                provided in the grant.
            ``(2) Determination of amount of non-federal 
        contribution.--
                    ``(A) Subject to subparagraph (B), non-Federal 
                contributions required in paragraph (1) may be in cash 
                or in kind, fairly evaluated, including plant, 
                equipment, or services. Amounts provided by the Federal 
                Government, or services assisted or subsidized to any 
                significant extent by the Federal Government, may not 
                be included in determining the amount of such non-
                Federal contributions.
                    ``(B) The Secretary may not make a grant under 
                subsection (a) unless the State involved agrees that--
                            ``(i) for the first fiscal year of payments 
                        under the grant, 100 percent or less of the 
                        non-Federal contributions required in paragraph 
                        (1) will be provided in the form of in-kind 
                        contributions;
                            ``(ii) for any second fiscal year of such 
                        payments, not more than 50 percent of such non-
                        Federal contributions will be provided in the 
                        form of in-kind contributions; and
                            ``(iii) for any third fiscal year of such 
                        payments, such non-Federal contributions will 
                        be provided solely in the form of cash.
    ``(c) Certain Required Activities.--The Secretary may not make a 
grant under subsection (a) unless the State involved agrees that 
activities carried out by an office operated pursuant to such 
subsection will include--
            ``(1) coordinating the activities carried out in the State 
        that relate to emergency medical services;
            ``(2) activities regarding the matters described in 
        paragraphs (1) through (4) section 1201(b);
            ``(3) identifying Federal and State programs regarding 
        emergency medical services and providing technical assistance 
        to public and nonprofit private entities regarding 
        participation in such programs.
    ``(d) Requirement Regarding Annual Budget for Office.--The 
Secretary may not make a grant under subsection (a) unless the State 
involved agrees that, for any fiscal year for which the State receives 
such a grant, the office operated pursuant to subsection (a) will be 
provided with an annual budget of not less than $50,000.
    ``(e) Certain Uses of Funds.--
            ``(1) Restrictions.--The Secretary may not make a grant 
        under subsection (a) unless the State involved agrees that--
                    ``(A) if research with respect to emergency medical 
                services is conducted pursuant to the grant, not more 
                than 10 percent of the grant will be expended for such 
                research; and
                    ``(B) the grant will not be expended to provide 
                emergency medical services (including providing cash 
                payments regarding such services).
            ``(2) Establishment of office.--Activities for which a 
        State may expend a grant under subsection (a) include paying 
        the costs of establishing an office of emergency medical 
        services for purposes of such subsection.
    ``(f) Reports.--The Secretary may not make a grant under subsection 
(a) unless the State involved agrees to submit to the Secretary reports 
containing such information as the Secretary may require regarding 
activities carried out under this section by the State.
    ``(g) Requirement of Application.--The Secretary may not make a 
grant under subsection (a) unless an application for the grant is 
submitted to the Secretary and the application is in such form, is made 
in such manner, and contains such agreements, assurances, and 
information as the Secretary determines to be necessary to carry out 
this section.''.

SEC. 503. PROGRAMS FOR RURAL AREAS.

    (a) In General.--Title XII of the Public Health Service Act, as 
amended by section 502 of this Act, is amended--
            (1) by transferring section 1204 to part A;
            (2) by redesignating such section as section 1203;
            (3) by inserting such section after section 1202; and
            (4) in section 1203 (as so redesignated)--
                    (A) by redesignating subsection (c) as subsection 
                (d); and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Demonstration Program Regarding Telecommunications.--
            ``(1) Linkages for rural facilities.--Projects under 
        subsection (a)(1) shall include demonstration projects to 
        establish telecommunications between rural medical facilities 
        and medical facilities that have expertise or equipment that 
        can be utilized by the rural facilities through the 
        telecommunications.
            ``(2) Modes of communication.--The Secretary shall ensure 
        that the telecommunications technologies demonstrated under 
        paragraph (1) include (interactive) video telecommunications 
        (static video imaging transmitted through the telephone 
        system), and facsimiles transmitted through such system.''.
    (b) Conforming Amendment.--Section 1203 of the Public Health 
Service Act, as redesignated by subsection (a)(2) of this section, is 
amended in the heading for the section by striking ``establishment'' 
and all that follows and inserting ``programs for rural areas.''.

SEC. 504. FUNDING.

    Title XII of the Public Health Service Act, as amended by the 
preceding provisions of this subtitle, is amended--
            (1) by inserting after subpart III of part B the following:

                          ``Part C--Funding'';

            (2) by transferring section 1235 to part C (as so added); 
        and
            (3) in such section, by striking subsections (a) and (b) 
        and inserting the following:
    ``(a) Emergency Medical Services Generally.--
            ``(1) In general.--For the purpose of carrying out section 
        1201 other than with respect to trauma care, there are 
        authorized to be appropriated $2,000,000 for fiscal year 1994, 
        and such sums as may be necessary for each of the fiscal years 
        1995 and 1996.
            ``(2) State offices.--For the purpose of carrying out 
        section 1202, there are authorized to be appropriated 
        $3,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 and 1996.
            ``(3) Certain telecommunications demonstrations.--For the 
        purpose of carrying out section 1203(c), there are authorized 
        to be appropriated $10,000,000 for fiscal year 1994, and such 
        sums as may be necessary for each of the fiscal years 1995 and 
        1996.
    ``(b) Trauma Care and Certain Other Activities.--
            ``(1) In general.--For the purpose of carrying out part B, 
        section 1201 with respect to trauma care, and section 1203 
        (other than subsection (c) of such section), there are 
        authorized to be appropriated $60,000,000 for fiscal year 1994, 
        and such sums as may be necessary for each of the fiscal years 
        1995 and 1996.
            ``(2) Allocation of funds by secretary.--
                    ``(A) For the purpose of carrying out subpart I of 
                part B, section 1201 with respect to trauma care, and 
                section 1203 (other than subsection (c) of such 
                section), the Secretary shall make available 10 percent 
                of the amounts appropriated for a fiscal year under 
                paragraph (1).
                    ``(B) For the purpose of carrying out section 1203 
                (other than subsection (c) of such section), the 
                Secretary shall make available 10 percent of the 
                amounts appropriated for a fiscal year under paragraph 
                (1).
                    ``(C)(i) For the purpose of making allotments under 
                section 1221(a), the Secretary shall, subject to 
                subsection (c), make available 80 percent of the 
                amounts appropriated for a fiscal year under paragraph 
                (1).
                    ``(ii) Amounts paid to a State under section 
                1221(a) for a fiscal year shall, for the purposes for 
                which the amounts were paid, remain available for 
                obligation until the end of the fiscal year immediately 
                following the fiscal year for which the amounts were 
                paid.''.

SEC. 505. CONFORMING AMENDMENTS.

    Title XII of the Public Health Service Act, as amended by the 
preceding provisions of this subtitle, is amended--
            (1) in section 1203(b), by striking ``1214(c)(1)'' and 
        inserting ``1224(c)(1)'';
            (2) in section 1211(b)(3), by striking ``1213(c)'' and 
        inserting ``1223(c)'';
            (3) in section 1221--
                    (A) in subsection (a)--
                            (i) by striking ``1218'' and inserting 
                        ``1228''; and
                            (ii) by striking ``1217'' and inserting 
                        ``1227''; and
                    (B) in subsection (b)--
                            (i) by striking ``1233'' and inserting 
                        ``1242''; and
                            (ii) by striking ``1213'' and inserting 
                        ``1223'';
            (4) in section 1222--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by striking 
                        ``1211(a)'' and inserting ``1221(a)''; and
                            (ii) in paragraph (2)(A), by striking 
                        ``1211(c)'' and inserting ``1221(c)''; and
                    (B) in subsection (b), by striking ``1211(a)'' and 
                inserting ``1221(a)'';
            (5) in section 1223--
                    (A) in subsection (a), by striking ``1211(b)'' and 
                inserting ``1221(b)'';
                    (B) in subsection (b)--
                            (i) in paragraph (1), by striking 
                        ``1211(a)'' and inserting ``1221(a)''; and
                            (ii) in paragraph (3), by striking 
                        ``1211(a)'' and inserting ``1221(a)''; and
                    (C) in subsection (d), by striking ``1211(a)'' and 
                inserting ``1221(a)'';
            (6) in section 1224--
                    (A) in each of subsections (a) through (c), by 
                striking ``1211(a)'' and inserting ``1221(a)''; and
                    (B) in subsection (b), by striking ``1213(a)(7)'' 
                and inserting ``1223(a)(7)'';
            (7) in section 1225--
                    (A) in subsection (a)--
                            (i) by striking ``1211(a)'' and inserting 
                        ``1221(a)''; and
                            (ii) by striking ``1233'' and inserting 
                        ``1242''; and
                    (B) in subsection (b), by striking ``1211(b)'' and 
                inserting ``1221(b)'';
            (8) in section 1226, in each of subsections (a) through 
        (c), by striking ``1211(a)'' and inserting ``1221(a)'';
            (9) in section 1227--
                    (A) by striking ``1211(a)'' and inserting 
                ``1221(a)''; and
                    (B) by striking ``1214'' and inserting ``1224'';
            (10) in section 1228--
                    (A) in each of subsections (a) through (c), by 
                striking ``1211(a)'' each place such term appears and 
                inserting ``1221(a)'';
                    (B) in subsection (b), in each of paragraphs (2)(A) 
                and (3)(A), by striking ``1232(a)'' and inserting 
                ``1235(a)''; and
                    (C) in subsection (c)(2)--
                            (i) by striking ``1232(b)(3)'' and 
                        inserting ``1235(b)(3)''; and
                            (ii) by striking ``1217'' and inserting 
                        ``1227'';
            (11) in section 1229(a), by striking ``1211(a)'' each place 
        such term appears and inserting ``1221(a)'';
            (12) in section 1230(a), by striking ``1211(a)'' each place 
        such term appears and inserting ``1221(a)'';
            (13) in section 1231--
                    (A) in each of subsections (a) and (b), by striking 
                ``1211(a)'' each place such term appears and inserting 
                ``1221(a)''; and
                    (B) in each of subsections (a) and (b), by striking 
                ``1211(b)'' and inserting ``1221(b)'';
            (14) in section 1232, by striking ``1211'' and inserting 
        ``1221'';
            (15) in section 1241--
                    (A) in the matter preceding paragraph (1), by 
                striking ``this title'' and inserting ``this part''; 
                and
                    (B) in paragraph (1), by striking ``1213'' and 
                inserting ``1223'';
            (16) in section 1242--
                    (A) in each of subsections (a) and (b), by striking 
                ``1211'' each place such term appears and inserting 
                ``1221'';
                    (B) in subsection (b)--
                            (i) by striking ``part B'' and inserting 
                        ``subpart II''; and
                            (ii) by striking ``1214(c)(1)'' and 
                        inserting ``1224(c)(1)''; and
                    (C) in subsection (c), by striking ``1213'' and 
                inserting ``1223''; and
            (17) in section 1251(c)(1)--
                    (A) by striking ``1211(a)'' and inserting 
                ``1221(a)'';
                    (B) by striking ``1218(a)(2)'' and inserting 
                ``1228(a)(2)''; and
                    (C) by striking ``part B'' and inserting ``subpart 
                II''.

     Subtitle B--Extension of Special Treatment Rules for Medicare-
                    Dependent, Small Rural Hospitals

SEC. 511. EXTENSION OF SPECIAL TREATMENT RULES FOR MEDICARE-DEPENDENT, 
              SMALL RURAL HOSPITALS.

    (a) In General.--
            (1) Determination of payment amount.--Section 1886(b)(3)(D) 
        of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is 
        amended by striking ``March 31, 1993,'' and inserting ``March 
        31, 1994,''.
            (2) Eligibility for designation.--Section 1886(d)(5)(G)(i) 
        of such Act (42 U.S.C. 1395ww(d)(5)(G)(i)) is amended by 
        striking ``March 31, 1993,'' and inserting ``March 31, 1994,''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 6003(f) of the 
Omnibus Budget Reconciliation Act of 1989.

                  Subtitle C--Outreach Grants Program

SEC. 521. ESTABLISHMENT OF PROGRAM OF GRANTS FOR RURAL HEALTH OUTREACH.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) 
is amended by adding at the end the following part:

                ``Part O--Rural Health Outreach Program.

``SEC. 399J. RURAL HEALTH OUTREACH GRANT PROGRAM.

    ``(a) In General.--The Secretary may make grants to demonstrate new 
and innovative models of outreach and health care services delivery in 
rural areas that lack basic health services. Grants will be awarded for 
one of the following: direct provision of health services to rural 
populations (especially for those who are not currently receiving those 
services), or to enhance access to and utilization of existing 
available services.
    ``(b) Missions of the Outreach Projects.--Projects under subsection 
(a) should be designed to address the needs of a wide range of 
populations living in rural communities including, but not limited to, 
the poor, farmers, farm workers, senior citizens, individuals with 
disabilities, pregnant women, infants, adolescents, and rural 
populations with special health care needs. The program could include 
projects to:
            ``(1) Provide, enhance, or revitalize emergency medical 
        services in rural communities.
            ``(2) Provide ambulatory health and/or mental health 
        services in health professional shortage areas and in frontier 
        areas.
            ``(3) Enhance the health and safety of farmers through 
        direct health services for farm families, and migrant and 
        seasonal farm workers.
            ``(4) Provide direct health services to enhance health care 
        services to senior citizens.
            ``(5) Provide direct health services that will reduce 
        infant mortality in rural communities.
    ``(c) Composition of Program.--
            ``(1) Consortium arrangements.--Participation in the 
        program established in subsection (a) requires the formation of 
        consortium arrangements among three or more separate and 
        distinct entities to carry out an outreach project.
            ``(2) Certain requirements.--
                    ``(A) A consortium under paragraph (1) must be 
                composed of three or more existing health care 
                providers or a combination of three or more health care 
                and social service providers. Consortium members may 
                include such entities as hospitals, public health 
                agencies, home health providers, mental health centers, 
                rural health clinics, social service agencies, health 
                professional schools, educational institutions, 
                emergency medical centers/providers, and community and 
                migrant health centers.
                    ``(B) All public and private entities, both 
                nonprofit and for-profit may participate as members of 
                a consortium arrangement under paragraph (1).
                    ``(C) A grant under subsection (a) will be made to 
                only one entity in a consortium under paragraph (1). 
                The grant recipient must be a nonprofit or public 
                entity which meets one of the following requirements:
                            ``(i) The applicant must be located outside 
                        of a Metropolitan Statistical Area as defined 
                        by the Federal Government.
                            ``(ii) The applicant must be located in a 
                        rural census tract.
    ``(d) Review Criteria.--An outreach application under this section 
shall be evaluated based on the following criteria:
            ``(1) The extent to which the applicant has proposed a new 
        and innovative approach to health care in the rural area. 
        Services shall be directed to population groups that are 
        unserved or underserved.
            ``(2) The extent to which the applicant has justified and 
        documented the needs for the project and developed measurable 
        goals for meeting the needs.
            ``(3) The extent to which the applicant has clearly defined 
        the roles and responsibilities for each member of the 
        consortium and developed a workable plan for managing the 
        consortium's activities.
            ``(4) The level of local commitment and involvement with 
        the project, including the extent of cost participation by the 
        applicant and/or other organizations.
            ``(5) The feasibility of the project to continue after 
        Federal grant support is completed.
            ``(6) The extent of the evaluation component.
    ``(e) How Project Funds Are to be Expended.--
            ``(1) Grantees under subsection (a) will be required to use 
        at least 85 percent of the total amount awarded for outreach 
        and care services.
            ``(2) 60 percent of funds must be spent in rural areas.
            ``(3) Grant funds may not be used for purchase, 
        construction, or renovation of real property or to support the 
        delivery of inpatient services.
            ``(4) Grant funds may be used for equipment and vehicles 
        when such equipment is essential to carrying out the outreach 
        project.
            ``(5) Individual grant awards will be limited to a total 
        amount of $300,000 per year for not to exceed 3 years.
            ``(6) Applicants must demonstrate that existing levels of 
        institutional and other support are not reduced or supplanted 
        by the availability of these grant funds.
    ``(f) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated $25,000,000 
for fiscal year 1994, and such sums as may be necessary for each fiscal 
year thereafter.''.

                                 <all>

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