[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 493 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 493

To amend the Public Health Service Act to facilitate the entering into 
of cooperative agreements between hospitals for the purpose of enabling 
such hospitals to share expensive medical or high technology equipment 
                  or services, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 1993

Mr. Cohen (for himself, Mr. Bond, Mr. Chafee, Mr. Simpson, Mr. Cochran, 
    Mr. Bingaman, Mr. Craig, Mr. Mack, Mr. McCain, Mr. Gorton, Mr. 
   Kempthorne, Mr. Burns, Mr. Domenici, Mr. Warner, Mr. Stevens, Mr. 
 Brown, Mr. Gregg, and Mr. Coats) introduced the following bill; which 
    was read twice and referred to the Committee on Labor and Human 
                               Resources

_______________________________________________________________________

                                 A BILL


 
To amend the Public Health Service Act to facilitate the entering into 
of cooperative agreements between hospitals for the purpose of enabling 
such hospitals to share expensive medical or high technology equipment 
                  or services, 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 ``Hospital Cooperative Agreement 
Act''.

SEC. 2. PURPOSE.

    It is the purpose of this Act to encourage cooperation between 
hospitals in order to contain costs and achieve a more efficient health 
care delivery system through the elimination of unnecessary duplication 
and proliferation of expensive medical or high technology services or 
equipment.

SEC. 3. HOSPITAL TECHNOLOGY AND SERVICES SHARING DEMONSTRATION PROGRAM.

    Part D of title VI of the Public Health Service Act (42 U.S.C. 291k 
et seq.) is amended by adding at the end thereof the following new 
section:

``SEC. 647. HOSPITAL TECHNOLOGY AND SERVICES SHARING DEMONSTRATION 
              PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a demonstration 
program under which the Secretary shall award not to exceed 10 grants 
to eligible applicants to facilitate collaboration among two or more 
hospitals with respect to the provision of expensive, capital-embodied 
medical technology or other highly resource-intensive services. Such 
program shall be designed to demonstrate the extent to which such 
agreements result in a reduction in costs, an increase in access to 
care, and improvements in the quality of care with respect to the 
hospitals involved.
    ``(b) Eligible Applicants.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (a), an entity shall be a hospital and 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 statement that such hospital desires to 
                negotiate and enter into a voluntary cooperative 
                agreement with at least one other hospital operating in 
                the State or region of the applicant hospital for the 
                sharing of medical technology or services;
                    ``(B) a description of the nature and scope of the 
                activities contemplated under the cooperative agreement 
                and any consideration that may pass under such 
                agreement to any other hospital that may elect to 
                become a party to the agreement; and
                    ``(C) any other information determined appropriate 
                by the Secretary.
            ``(2) Development of evaluation guidelines.--The 
        Administrator of the Agency for Health Care Policy and Research 
        shall develop evaluation guidelines with respect to 
        applications submitted under paragraph (1).
            ``(3) Evaluations of applications.--The Secretary, in 
        consultation with the Administrator of the Agency for Health 
        Care Policy and Research, shall evaluate applications submitted 
        under paragraph (1). In determining which applications to 
        approve for purposes of awarding grants under subsection (a), 
        the Secretary shall consider whether the cooperative agreement 
        described in each such application meets guidelines developed 
        under paragraph (2) and is likely to result in--
                    ``(A) the enhancement of the quality of hospital or 
                hospital-related care;
                    ``(B) the preservation of hospital facilities in 
                geographical proximity to the communities traditionally 
                served by such facilities;
                    ``(C) improvements in the cost-effectiveness of 
                high-technology services by the hospitals involved;
                    ``(D) improvements in the efficient utilization of 
                hospital resources and capital equipment; or
                    ``(E) the avoidance of duplication of hospital 
                resources.
    ``(c) Use of Amounts.--
            ``(1) In general.--Amounts provided under a grant awarded 
        under this section shall be used only to facilitate 
        collaboration among hospitals and may not be used to purchase 
        facilities or capital equipment. Such permissible uses may 
        include reimbursements for the expenses associated with 
        specialized personnel, administrative services, support 
        services, and instructional programs.
            ``(2) Care in rural areas.--
                    ``(A) In general.--Not less than three of the 
                grants awarded under subsection (a), shall be used to 
                demonstrate the manner in which cooperative agreements 
                of the type described in such subsection may be used to 
                increase access to or quality of care in rural areas.
                    ``(B) Definition.--As used in subparagraph (A), the 
                term `rural areas' means those areas located outside of 
                metropolitan statistical areas.
    ``(d) Medical Technology and Services.--
            ``(1) In general.--Cooperative agreements facilitated under 
        this section shall provide for the sharing of medical or high 
        technology equipment or services among the hospitals which are 
        parties to such agreements.
            ``(2) Medical technology.--For purposes of this section, 
        the term `medical technology' shall include the drugs, devices, 
        and medical and surgical procedures utilized in medical care, 
        and the organizational and support systems within which such 
        care is provided.
            ``(3) Eligible services.--With respect to services that may 
        be shared under an agreement entered into under this section, 
        such services shall--
                    ``(A) either have high capital costs or extremely 
                high annual operating costs; and
                    ``(B) be services with respect to which there is a 
                reasonable expectation that shared ownership will avoid 
                a significant degree of the potential excess capacity 
                of such services in the community or region to be 
                served under such agreement.
        Such services may include mobile clinic services.
    ``(e) Term.--The demonstration program established under this 
section shall continue for a term of 5 years.
    ``(f) Report.--On the date that occurs 5 years after the 
establishment of the demonstration program under this section, the 
Secretary shall prepare and submit to the appropriate committees of 
Congress, a report concerning the potential for cooperative agreements 
of the type entered into under this section to--
            ``(1) contain health care costs;
            ``(2) increase the access of individuals to medical 
        services; and
            ``(3) improve the quality of health care.
Such report shall also contain the recommendations of the Secretary 
with respect to future programs to facilitate cooperative agreements.
    ``(g) Relation to Other Laws.--
            ``(1) In general.--Notwithstanding any provision of the 
        antitrust laws, it shall not be considered a violation of the 
        antitrust laws for a hospital to enter into, and carry out 
        activities under, a cooperative agreement in accordance with 
        this section.
            ``(2) Definition.--For purposes of this subsection, the 
        term `antitrust laws' means--
                    ``(A) the Act entitled ``An Act to protect trade 
                and commerce against unlawful restraints and 
                monopolies'', approved July 2, 1890, commonly known as 
                the ``Sherman Act'' (26 Stat. 209; chapter 647; 15 
                U.S.C. 1 et seq.);
                    ``(B) the Federal Trade Commission Act, approved 
                September 26, 1914 (38 Stat. 717; chapter 311; 15 
                U.S.C. 41 et seq.);
                    ``(C) the Act entitled ``An Act to supplement 
                existing laws against unlawful restraints and 
                monopolies, and for other purposes'', approved October 
                15, 1914, commonly known as the ``Clayton Act'' (38 
                Stat. 730; chapter 323; 15 U.S.C. 12 et seq.; 18 U.S.C. 
                402, 660, 3285, 3691; 29 U.S.C. 52, 53); and
                    ``(D) any State antitrust laws that would prohibit 
                the activities described in paragraph (1).
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of the fiscal years 1994 through 1998.''.

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