[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3753 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 3753

To amend the Social Security Act and the Public Health Service Act with 
   respect to the health of residents of rural areas, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 27, 1996

Mr. Gunderson (for himself, Mr. Poshard, Mr. Roberts, Mr. Stenholm, Mr. 
 Bereuter, Mr. Bonilla, Mr. Bunn of Oregon, Mr. Hilliard, Mrs. Johnson 
of Connecticut, Mrs. Lincoln, Mr. Payne of Virginia, Mr. Williams, Mr. 
Baker of Louisiana, Mr. Barrett of Nebraska, Mr. Boehlert, Mr. Boucher, 
   Mr. Brewster, Mr. Clinger, Mr. Combest, Mr. Condit, Mr. Cooley of 
Oregon, Ms. Danner, Mr. Ehlers, Mr. Evans, Mr. Fazio of California, Mr. 
 Hall of Texas, Mr. Johnson of South Dakota, Mr. Klug, Mr. McHugh, Mr. 
 Ney, Mr. Nussle, Mr. Peterson of Minnesota, Mr. Rahall, Mr. Ramstad, 
 Mr. Sanders, Mr. Skelton, Mr. Stupak, Mr. Thornberry, Mr. Walsh, and 
Mr. Whitfield) introduced the following bill; which was referred to the 
  Committee on Commerce, and in addition to the Committee on Ways and 
 Means, 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 the Social Security Act and the Public Health Service Act with 
   respect to the health of residents of rural areas, 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 ``Rural Health Improvement Act of 
1996''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Sense of Congress on work of Bill Emerson.
    TITLE I--EQUALIZATION OF MEDICARE REIMBURSEMENT RATES TO HEALTH 
        MAINTENANCE ORGANIZATIONS AND COMPETITIVE MEDICAL PLANS

Sec. 101. Payments to health maintenance organizations and competitive 
                            medical plans.
 TITLE II--GRANTS TO ENCOURAGE ESTABLISHMENT OF COMMUNITY RURAL HEALTH 
                                NETWORKS

Sec. 201. Assistance for development of access plans for chronically 
                            underserved areas.
Sec. 202. Technical assistance grants for networks.
Sec. 203. Development grants for networks.
Sec. 204. Definitions.
Sec. 205. Financing through termination of certain grant programs.
 TITLE III--MEDICARE RURAL PRIMARY CARE HOSPITALS AND RURAL EMERGENCY 
                         ACCESS CARE HOSPITALS

            Subtitle A--Rural Primary Care Hospital Program

Sec. 301. Designation of rural primary care hospitals.
Sec. 302. Payment on a reasonable cost basis.
Sec. 303. Lengthening maximum period of permitted inpatient stay.
Sec. 304. Payment continued to designated essential access community 
                            hospitals.
Sec. 305. Effective date.
           Subtitle B--Rural Emergency Access Care Hospitals

Sec. 311. Establishment of hospitals.
  TITLE IV--INCENTIVES FOR HEALTH PROFESSIONALS TO PRACTICE IN RURAL 
                                 AREAS

               Subtitle A--National Health Service Corps

Sec. 401. National Health Service Corps scholarship and loan repayments 
                            excluded from gross income.
Sec. 402. Study regarding allocation of Corps members among shortage 
                            areas.
Sec. 403. Priority in assignment of Corps members; community rural 
                            health networks.
     Subtitle B--Primary Care Services Furnished in Shortage Areas

Sec. 411. Additional payments under medicare for primary care services 
                            furnished in rural shortage areas.
           TITLE V--CLASSIFICATION OF RURAL REFERRAL CENTERS

Sec. 501. Classification of centers.
         TITLE VI--PROMOTION OF HEALTH CENTERS IN RURAL REGIONS

Sec. 601. Expansion of health centers in rural regions.
Sec. 602. Collaboration of health centers with community hospitals.
               TITLE VII--MEDICARE PAYMENT METHODOLOGIES

Sec. 701. Telemedicine services.
                         TITLE VIII--ANTITRUST

Sec. 801. Sense of Congress relating to application of guidelines.
                          TITLE IX--FINANCING

Sec. 901. Extension and expansion of existing medicare secondary payer 
                            requirements.

SEC. 3. SENSE OF CONGRESS ON WORK OF BILL EMERSON.

    It is the sense of the Congress that this Act reflects the 
dedication of the late Representative Bill Emerson, who served on the 
Steering Committee of the Rural Health Care Coalition of the House of 
Representatives, to ensuring health care access for all rural 
Americans.

    TITLE I--EQUALIZATION OF MEDICARE REIMBURSEMENT RATES TO HEALTH 
        MAINTENANCE ORGANIZATIONS AND COMPETITIVE MEDICAL PLANS

SEC. 101. PAYMENTS TO HEALTH MAINTENANCE ORGANIZATIONS AND COMPETITIVE 
              MEDICAL PLANS.

    (a) In General.--Section 1876(a) of the Social Security Act (42 
U.S.C. 1395mm(a)) is amended to read as follows:
    ``(a)(1)(A) The Secretary shall annually determine, and shall 
announce (in a manner intended to provide notice to interested parties) 
not later than August 1 before the calendar year concerned--
            ``(i) a per capita rate of payment for individuals who are 
        enrolled under this section with an eligible organization which 
        has entered into a risk-sharing contract and who are entitled 
        to benefits under part A and enrolled under part B, and
            ``(ii) a per capita rate of payment for individuals who are 
        so enrolled with such an organization and who are enrolled 
        under part B only.
For purposes of this section, the term ``risk-sharing contract'' means 
a contract entered into under subsection (g) and the term ``reasonable 
cost reimbursement contract'' means a contract entered into under 
subsection (h).
    ``(B) The annual per capita rate of payment for each medicare 
payment area (as defined in paragraph (5)) shall be equal to the 
adjusted capitation rate (as defined in paragraph (4)), adjusted by the 
Secretary for--
            ``(i) individuals who are enrolled under this section with 
        an eligible organization which has entered into a risk-sharing 
        contract and who are enrolled under part B only; and
            ``(ii) such risk factors as age, disability status, gender, 
        institutional status, and such other factors as the Secretary 
        determines to be appropriate so as to ensure actuarial 
        equivalence. The Secretary may add to, modify, or substitute 
        for such factors, if such changes will improve the 
        determination of actuarial equivalence.
    ``(C) In the case of an eligible organization with a risk-sharing 
contract, the Secretary shall make monthly payments in advance and in 
accordance with the rate determined under subparagraph (B) and except 
as provided in subsection (g)(2), to the organization for each 
individual enrolled with the organization under this section.
    ``(D) The Secretary shall establish a separate rate of payment to a 
eligible organization with respect to any individual determined to have 
end-stage renal disease and enrolled with the organization. Such rate 
of payment shall be actuarially equivalent to rates paid to other 
enrollees in the payment area (or such other area as specified by the 
Secretary).
    ``(E)(i) The amount of payment under this paragraph may be 
retroactively adjusted to take into account any difference between the 
actual number of individuals enrolled in the plan under this section 
and the number of such individuals estimated to be so enrolled in 
determining the amount of the advance payment.
    ``(ii)(I) Subject to subclause (II), the Secretary may make 
retroactive adjustments under clause (i) to take into account 
individuals enrolled during the period beginning on the date on which 
the individual enrolls with an eligible organization (which has a risk-
sharing contract under this section) under a health benefit plan 
operated, sponsored, or contributed to by the individual's employer or 
former employer (or the employer or former employer of the individual's 
spouse) and ending on the date on which the individual is enrolled in 
the plan under this section, except that for purposes of making such 
retroactive adjustments under this clause, such period may not exceed 
90 days.
    ``(II) No adjustment may be made under subclause (I) with respect 
to any individual who does not certify that the organization provided 
the individual with the explanation described in subsection (c)(3)(E) 
at the time the individual enrolled with the organization.
    ``(F)(i) At least 45 days before making the announcement under 
subparagraph (A) for a year, the Secretary shall provide for notice to 
eligible organizations of proposed changes to be made in the 
methodology or benefit coverage assumptions from the methodology and 
assumptions used in the previous announcement and shall provide such 
organizations an opportunity to comment on such proposed changes.
    ``(ii) In each announcement made under subparagraph (A) for a year, 
the Secretary shall include an explanation of the assumptions 
(including any benefit coverage assumptions) and changes in methodology 
used in the announcement in sufficient detail so that eligible 
organizations can compute per capita rates of payment for individuals 
located in each county (or equivalent medicare payment area) which is 
in whole or in part within the service area of such an organization.
    ``(2) With respect to any eligible organization which has entered 
into a reasonable cost reimbursement contract, payments shall be made 
to such plan in accordance with subsection (h)(2) rather than paragraph 
(1).
    ``(3) Subject to subsections (c)(2)(B)(ii) and (c)(7), payments 
under a contract to an eligible organization under paragraph (1) or (2) 
shall be instead of the amounts which (in the absence of the contract) 
would be otherwise payable, pursuant to sections 1814(b) and 1833(a), 
for services furnished by or through the organization to individuals 
enrolled with the organization under this section.
    ``(4)(A) For purposes of this section, the `adjusted capitation 
rate' for a medicare payment area (as defined in paragraph (5)) is 
equal to the greatest of the following:
            ``(i) The sum of--
                    ``(I) the area-specific percentage for the year (as 
                specified under subparagraph (B) for the year) of the 
                area-specific adjusted capitation rate for the year for 
                the medicare payment area, as determined under 
                subparagraph (C), and
                    ``(II) the national percentage (as specified under 
                subparagraph (B) for the year) of the input-price-
                adjusted national adjusted capitation rate for the 
                year, as determined under subparagraph (D),
        multiplied by a budget neutrality adjustment factor determined 
        under subparagraph (E).
            ``(ii) An amount equal to--
                    ``(I) in the case of 1997, 80 percent of the input-
                price-adjusted national adjusted capitation rate for 
                the year, as determined under subparagraph (D); and
                    ``(II) in the case of a succeeding year, the amount 
                specified in this clause for the preceding year 
                increased by the national average per capita growth 
                percentage specified under subparagraph (F) for that 
                succeeding year.
            ``(iii) An amount equal to--
                    ``(I) in the case of 1997, 102 percent of the 
                annual per capita rate of payment for 1996 for the 
                medicare payment area (determined under this 
                subsection, as in effect on the day before the date of 
                enactment of the Rural Health Improvement Act of 1996; 
                and
                    ``(II) in the case of a subsequent year, 102 
                percent of the adjusted capitation rate under this 
                subsection for the area for the previous year.
    ``(B) For purposes of subparagraph (A)(i)--
            ``(i) for 1997, the `area-specific percentage' is 90 
        percent and the `national percentage' is 10 percent,
            ``(ii) for 1998, the `area-specific percentage' is 85 
        percent and the `national percentage' is 15 percent,
            ``(iii) for 1999, the `area-specific percentage' is 80 
        percent and the `national percentage' is 20 percent,
            ``(iv) for 2000, the `area-specific percentage' is 75 
        percent and the `national percentage' is 25 percent, and
            ``(v) for a year after 2000, the `area-specific percentage' 
        is 70 percent and the `national percentage' is 30 percent.
    ``(C) For purposes of subparagraph (A)(i), the area-specific 
adjusted capitation rate for a medicare payment area--
            ``(i) for 1997, is the average of the annual per capita 
        rates of payment for the area for 1994 through 1996, after 
        adjusting the 1994 and 1995 rates of payment to 1996 dollars, 
        increased by the national average per capita growth percentage 
        for 1997 (as defined in subparagraph (F)); or
            ``(ii) for a subsequent year, is the area-specific adjusted 
        capitation rate for the previous year determined under this 
        subparagraph for the area, increased by the national average 
        per capita growth percentage for such subsequent year.
    ``(D)(i) For purposes of subparagraph (A)(i) and subparagraph 
(A)(ii), the input-price-adjusted national adjusted capitation rate for 
a medicare payment area for a year is equal to the sum, for all the 
types of medicare services (as classified by the Secretary), of the 
product (for each such type of service) of--
            ``(I) the national standardized adjusted capitation rate 
        (determined under clause (ii)) for the year,
            ``(II) the proportion of such rate for the year which is 
        attributable to such type of services, and
            ``(III) an index that reflects (for that year and that type 
        of services) the relative input price of such services in the 
        area compared to the national average input price of such 
        services.
In applying subclause (III), the Secretary shall, subject to clause 
(iii), apply those indices under this title that are used in applying 
(or updating) national payment rates for specific areas and localities.
    ``(ii) In clause (i)(I), the `national standardized adjusted 
capitation rate' for a year is equal to--
            ``(I) the sum (for all medicare payment areas) of the 
        product of (aa) the area-specific adjusted capitation rate for 
        that year for the area under subparagraph (C), and (bb) the 
        average number of standardized medicare beneficiaries residing 
        in that area in the year; divided by
            ``(II) the total average number of standardized medicare 
        beneficiaries residing in all the medicare payment areas for 
        that year.
    ``(iii) In applying this subparagraph for 1997--
            ``(I) medicare services shall be divided into 2 types of 
        services: part A services and part B services;
            ``(II) the proportions described in clause (i)(II) for such 
        types of services shall be--
                    ``(aa) for part A services, the ratio (expressed as 
                a percentage) of the national average annual per capita 
                rate of payment for part A for 1996 to the total 
                average annual per capita rate of payment for parts A 
                and B for 1996, and
                    ``(bb) for part B services, 100 percent minus the 
                ratio described in item (aa);
            ``(III) for part A services, 70 percent of payments 
        attributable to such services shall be adjusted by the index 
        used under section 1886(d)(3)(E) to adjust payment rates for 
        relative hospital wage levels for hospitals located in the 
payment area involved; and
            ``(IV) for part B services--
                    ``(aa) 66 percent of payments attributable to such 
                services shall be adjusted by the index of the 
                geographic area factors under section 1848(e) used to 
                adjust payment rates for physicians' services furnished 
                in the payment area, and
                    ``(bb) of the remaining 34 percent of the amount of 
                such payments, 70 percent shall be adjusted by the 
                index described in subclause (III).
The Secretary may continue to apply the rules described in this clause 
(or similar rules) for 1998.
    ``(E) For each year, the Secretary shall compute a budget 
neutrality adjustment factor so that the aggregate of the payments 
under this section shall be equal to the aggregate payments that would 
have been made under this section if the area-specific percentage for 
the year had been 100 percent and the national percentage had been 0 
percent.
    ``(F) In this section, the `national average per capita growth 
percentage' is equal to the percentage growth in medicare fee-for-
service per capita expenditures, which the Secretary shall project for 
each year.
    ``(5)(A) In this section, except as provided in subparagraph (C), 
the term `medicare payment area' means a county, or equivalent area 
specified by the Secretary.
    ``(B) In the case of individuals who are determined to have end 
stage renal disease, the medicare payment area shall be specified by 
the Secretary.
    ``(C)(i) Upon written request of the Chief Executive Officer of a 
State for a contract year (beginning after 1997) made at least 7 months 
before the beginning of the year, the Secretary shall adjust the system 
under which medicare payment areas in the State are otherwise 
determined under subparagraph (A) to a system which--
            ``(I) has a single statewide medicare payment area,
            ``(II) is a metropolitan based system described in clause 
        (iii), or
            ``(III) which consolidates into a single medicare payment 
        area noncontiguous counties (or equivalent areas described in 
        subparagraph (A)) within a State.
Such adjustment shall be effective for payments for months beginning 
with January of the year following the year in which the request is 
received.
    ``(ii) In the case of a State requesting an adjustment under this 
subparagraph, the Secretary shall adjust the payment rates otherwise 
established under this section for medicare payment areas in the State 
in a manner so that the aggregate of the payments under this section in 
the State shall be equal to the aggregate payments that would have been 
made under this section for medicare payment areas in the State in the 
absence of the adjustment under this subparagraph.
    ``(iii) The metropolitan based system described in this clause is 
one in which--
            ``(I) all the portions of each metropolitan statistical 
        area in the State or in the case of a consolidated metropolitan 
        statistical area, all of the portions of each primary 
        metropolitan statistical area within the consolidated area 
        within the State, are treated as a single medicare payment 
        area, and
            ``(II) all areas in the State that do not fall within a 
        metropolitan statistical area are treated as a single medicare 
        payment area.
    ``(iv) In clause (iii), the terms `metropolitan statistical area', 
`consolidated metropolitan statistical area', and `primary metropolitan 
statistical area' mean any area designated as such by the Secretary of 
Commerce.
    ``(6) Subject to subsections (c)(2)(B)(ii) and (c)(7), if an 
individual is enrolled under this section with an eligible organization 
having a risk-sharing contract, only the eligible organization shall be 
entitled to receive payments from the Secretary under this title for 
services furnished to the individual.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 1996.

 TITLE II--GRANTS TO ENCOURAGE ESTABLISHMENT OF COMMUNITY RURAL HEALTH 
                                NETWORKS

SEC. 201. ASSISTANCE FOR DEVELOPMENT OF ACCESS PLANS FOR CHRONICALLY 
              UNDERSERVED AREAS.

    (a) Availability of Financial Assistance To Implement Action Plans 
To Increase Access.--
            (1) In general.--The Secretary shall provide grants (in 
        amounts determined in accordance with paragraph (3)) over a 3-
        year period to an eligible State for the development of plans 
        to increase access to health care services during such period 
        for residents of areas in the State that are designated as 
        chronically underserved areas in accordance with subsection 
        (b).
            (2) Eligibility requirements.--A State is eligible to 
        receive grants under this section if the State submits to the 
        Secretary (at such time and in such form as the Secretary may 
        require) assurances that the State has developed (or is in the 
        process of developing) a plan to increase the access of 
        residents of a chronically underserved area to health care 
        services that meets the requirements of subsection (c), 
        together with such other information and assurances as the 
        Secretary may require.
            (3) Amount of assistance.--
                    (A) In general.--Subject to subparagraph (B), the 
                amount of assistance provided to a State under this 
                subsection with respect to any plan during a 3-year 
                period shall be equal to--
                            (i) for the first year of the period, an 
                        amount equal to 100 percent of the amounts 
                        expended by the State during the year to 
                        develop the plan described in paragraph (1) (as 
                        reported to the Secretary in accordance with 
                        such requirements as the Secretary may impose);
                            (ii) for the second year of the period, an 
                        amount equal to 50 percent of the amounts 
                        expended by the State during the year to 
                        develop the plan; and
                            (iii) for the third year of the period, an 
                        amount equal to 33 percent of the amounts 
                        expended by the State during the year to 
                        develop the plan.
                    (B) Aggregate per plan limit.--The amount of 
                assistance provided to a State under this subsection 
                with respect to any plan may not exceed $100,000 during 
                any year of the 3-year period for which the State 
                receives assistance.
    (b) Designation of Areas.--
            (1) Designation by governor.--In accordance with the 
        guidelines developed under paragraph (2), the Governor of a 
        State may designate an area in the State as a chronically 
        underserved area for purposes of this section upon the request 
        of a local official of the area or upon the Governor's 
        initiative.
            (2) Guidelines for designation.--
                    (A) Development by secretary.--Not later than 1 
                year after the date of the enactment of this Act, the 
                Secretary shall develop guidelines for the designation 
                of areas as chronically underserved areas under this 
                section.
                    (B) Factors considered in development of 
                guidelines.--In developing guidelines under paragraph 
                (1), the Secretary shall consider the following 
                factors:
                            (i) Whether the area (or a significant 
                        portion of the area) is a rural area (under 
                        section 1886(d)(2)(D) of the Social Security 
                        Act) and--
                                    (I) is designated as a health 
                                professional shortage area (under 
                                section 332(a) of the Public Health 
                                Service Act), or meets the criteria for 
                                designation as such an area; or
                                    (II) was previously designated as 
                                such an area or previously met such 
                                criteria for an extended period prior 
                                to the designation of the area under 
                                this section (in accordance with 
                                criteria established by the Secretary).
                            (ii) The availability and adequacy of 
                        health care providers and facilities for 
                        residents of the area.
                            (iii) The extent to which the availability 
                        of assistance under other Federal and State 
                        programs has failed to alleviate the lack of 
                        access to health care services for residents of 
                        the area.
                            (iv) The percentage of residents of the 
                        area whose income is at or below the poverty 
                        level.
                            (v) The percentage of residents of the area 
                        who are age 65 or older.
                            (vi) The existence of cultural or 
                        geographic barriers to access to health care 
                        services in the area, including weather 
                        conditions.
            (3) Review by secretary.--No designation under paragraph 
        (1) shall take effect under this section unless the Secretary--
                    (A) has been notified of the proposed designation; 
                and
                    (B) has not, within 60 days after the date of 
                receipt of the notice, disapproved the designation.
            (4) Period of designation.--A designation under this 
        section shall be effective during a period specified by the 
        Governor of not longer than 3 years. The Governor may extend 
        the designation for additional 3-year periods, except that a 
        State may not receive assistance under subsection (a)(3) 
for amounts expended during any such additional periods.
    (c) Requirements for State Access Plans.--A State plan to increase 
the access of residents of chronically underserved areas to health care 
services meets the requirements of this section if the Secretary finds 
that the plan was developed with the participation of health care 
providers and facilities and residents of the area that is the subject 
of the plan, together with such other requirements as the Secretary may 
impose.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated for assistance under this section $10,000,000 for each of 
the first 3 fiscal years beginning after the date on which the 
Secretary develops guidelines for the designation of areas as 
chronically underserved areas under subsection (b)(2).

SEC. 202. TECHNICAL ASSISTANCE GRANTS FOR NETWORKS.

    (a) In General.--The Secretary shall make funds available under 
this section to provide technical assistance (including information 
regarding eligibility for other Federal programs) and advice for 
entities described in subsection (b) seeking to establish or enhance a 
community rural health network (as defined in section 204) in an 
underserved rural area.
    (b) Entities Eligible To Receive Funds.--The following entities are 
eligible to receive funds for technical assistance under this section:
            (1) An entity receiving a grant under section 203.
            (2) A State or unit of local government.
            (3) An entity providing health care services (including 
        health professional education services) in the area involved.
    (c) Use of Funds.--
            (1) In general.--Funds made available under this section 
        may be used--
                    (A) for planning a community rural health network 
                and the submission of the plan for the network to the 
                Secretary under section 203(c) (subject to the 
                limitation described in paragraph (2));
                    (B) to provide assistance in conducting community-
                based needs and prioritization, identifying existing 
                regional health resources, and developing networks, 
                utilizing existing local providers and facilities where 
                appropriate;
                    (C) to provide advice on obtaining the proper 
                balance of primary and secondary facilities for the 
                population served by the network;
                    (D) to provide assistance in coordinating 
                arrangements for tertiary care;
                    (E) to provide assistance in recruitment and 
                retention of health care professionals;
                    (F) to provide assistance in coordinating the 
                delivery of emergency services with the provision of 
                other health care services in the area served by the 
                network;
                    (G) to provide assistance in coordinating 
                arrangements for mental health and substance abuse 
                treatment services; and
                    (H) to provide information regarding the area or 
                proposed network's eligibility for Federal and State 
                assistance for health care-related activities, together 
                with information on funds available through private 
                sources.
            (2) Limitation on amount available for development of 
        network.--The amount of financial assistance available to an 
        entity for activities described in paragraph (1) may not exceed 
        $50,000 and may not be available for a period of time exceeding 
        1 year.
    (d) Use of Rural Health Offices.--In carrying out this section with 
respect to entities in rural areas, the Secretary shall make funds 
available to the entities through the State offices of rural health or 
through appropriate entities designated by such offices.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated $10,000,000 for each of fiscal years 1997 through 2001 to 
carry out this section. Amounts appropriated under this section shall 
be available until expended.

SEC. 203. DEVELOPMENT GRANTS FOR NETWORKS.

    (a) In General.--The Secretary shall provide financial assistance 
to eligible entities for the purpose of providing for the development 
and implementation of community rural health networks (as defined in 
section 204). In providing such assistance, the Secretary shall give 
priority to eligible entities that will carry out such purpose in 
States that have developed a plan under section 201.
    (b) Eligible Entities.--
            (1) In general.--An entity is eligible to receive financial 
        assistance under this section only if the entity meets the 
        requirements of subparagraphs (A) through (C) as follows:
                    (A) The entity--
                            (i) is based in a rural area; OR
                            (ii) is described in paragraph (2) or (3) 
                        of section 202(b).
                    (B) The entity is undertaking to develop and 
                implement a community rural health network in one or 
                more underserved rural areas (as defined in section 
                204) with the active participation of at least 3 health 
                care providers or facilities in the area.
                    (C) The entity has consulted with the local 
                governments of the area to be served by the network and 
                with individuals who reside in the area.
            (2) Coordination with providers outside of area 
        permitted.--Nothing in this section shall be construed as 
        preventing an entity that coordinates the delivery of services 
        in an underserved rural area with an entity outside the area 
        from qualifying for financial assistance under this section, or 
        as preventing an entity consisting of a consortia of members 
        located in adjoining States from qualifying for such 
        assistance.
            (3) Permitting entities not receiving funding for 
        development of plan to receive funding for implementation.--An 
        entity that is eligible to receive financial assistance under 
        this section may receive assistance to carry out activities 
        described in subsection (c)(1)(B) notwithstanding that the 
        entity does not receive assistance to carry out activities 
        described in subsection (c)(1)(A).
    (c) Use of Funds.--
            (1) In general.--Financial assistance made available to 
        eligible entities under this section may be used only--
                    (A) for the development of a community health 
                network and the submission of the plan for the network 
                to the Secretary; and
                    (B) after the Secretary approves the plan for the 
                network, for activities to implement the network, 
                including (but not limited to)--
                            (i) establishing information systems, 
                        including telecommunications,
                            (ii) recruiting health care providers,
                            (iii) providing services to enable 
                        individuals to have access to health care 
                        services, including transportation and language 
                        interpretation services (including 
                        interpretation services for the hearing-
                        impaired), and
                            (iv) establishing and operating a community 
                        health advisor program described in paragraph 
                        (2).
            (2) Community health advisor program.--
                    (A) Program described.--In paragraph (1), a 
                ``community health advisor program'' is a program under 
                which community health advisors carry out the following 
                activities:
                            (i) Collaborating efforts with health care 
                        providers and related entities to facilitate 
                        the provision of health services and health-
                        related social services.
                            (ii) Providing public education on health 
                        promotion and disease prevention and efforts to 
                        facilitate the use of available health services 
                        and health-related social services.
                            (iii) Providing health-related counseling.
                            (iv) Making referrals for available health 
                        services and health-related social services.
                            (v) Improving the ability of individuals to 
                        use health services and health-related social 
                        services under Federal, State, and local 
                        programs through assisting individuals in 
                        establishing eligibility under the programs.
                            (vi) Providing outreach services to inform 
                        the community of the availability of the 
                        services provided under the program.
                    (B) Community health advisor defined.--In 
                subparagraph (A), the term ``community health advisor'' 
                means, with respect to a community health advisor 
                program, an individual--
                            (i) who has demonstrated the capacity to 
                        carry out one or more of the activities carried 
                        out under the program; and
                            (ii) who, for not less than one year, has 
                        been a resident of the community in which the 
                        program is to be operated.
            (3) Limitations on activities funded.--Financial assistance 
        made available under this section may not be used for any of 
        the following:
                    (A) For construction or renovation of a 
                telecommunications system.
                    (B) For construction or remodeling of health care 
                facilities.
            (4) Limitation on amount available for development of 
        network.--The amount of financial assistance available to an 
        entity for activities described in paragraph (1)(A) may not 
        exceed $50,000 and may not be made available for a period of 
        time exceeding 1 year.
    (d) Application.--
            (1) In general.--No financial assistance shall be provided 
        under this section to an entity unless the entity has submitted 
        to the Secretary, in a time and manner specified by the 
        Secretary, and had approved by the Secretary an application.
            (2) Information to be included.--Each such application 
        shall include--
                    (A) a description of the community rural health 
                network, including service area and capacity, and
                    (B) a description of how the proposed network will 
                utilize existing health care facilities in a manner 
                that avoids unnecessary duplication.
    (e) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated 
        $50,000,000 for each of fiscal years 1997 through 2001 to carry 
        out this section. Amounts appropriated under this section shall 
        be available until expended.
            (2) Annual limit on assistance to grantee.--The amount of 
        financial assistance provided to an entity under this section 
        during a year may not exceed $250,000.

SEC. 204. DEFINITIONS.

    (a) Community Rural Health Network.--For purposes of this title, 
the term ``community rural health network'' means a formal cooperative 
arrangement between participating hospitals, rural health clinics, 
physicians, and other health care providers which--
            (1) is located in an underserved rural area;
            (2) furnishes health care services to individuals residing 
        in the area; and
            (3) is governed by a board of directors selected by 
        participating health care providers and residents of the area.
    (b) Other Definitions.--For purposes of this title:
            (1) The term ``rural area'' has the meaning given such term 
        in section 1886(d)(2)(D) of the Social Security Act.
            (2) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (3) The term ``State'' means each of the several States, 
        the District of Columbia, Puerto Rico, the Virgin Islands, 
        Guam, the Northern Mariana Islands, and American Samoa.
            (4) The term ``underserved rural area'' means a rural area 
        designated--
                    (A) as a health professional shortage area under 
                section 332(a) of the Public Health Service Act; or
                    (B) as a chronically underserved area under section 
                201.

SEC. 205. FINANCING THROUGH TERMINATION OF CERTAIN GRANT PROGRAMS.

    Notwithstanding any other provision of law, no funds are authorized 
to be appropriated to carry out the following programs for fiscal year 
1997 or any subsequent fiscal year:
                    (A) The grant program for rural health transition 
                under section 4005(e) of the Omnibus Budget 
                Reconciliation Act of 1987.
                    (B) The program for rural outreach grants (which 
                program was, for fiscal year 1995, carried out by the 
                Health Resources and Services Administration with funds 
                made available under Public Law 103-333 for such 
                grants).

 TITLE III--MEDICARE RURAL PRIMARY CARE HOSPITALS AND RURAL EMERGENCY 
                         ACCESS CARE HOSPITALS

            Subtitle A--Rural Primary Care Hospital Program

SEC. 301. DESIGNATION OF RURAL PRIMARY CARE HOSPITALS.

    Section 1820 of the Social Security Act (42 U.S.C. 1395i-4) is 
amended to read as follows:

             ``medicare rural primary care hospital program

    ``Sec. 1820. (a) State Designation of Facilities.--
            ``(1) In general.--A State may designate one or more 
        facilities as a rural primary care hospital in accordance with 
        paragraph (2).
            ``(2) Criteria for designation as rural primary care 
        hospital.--A State may designate a facility as a rural primary 
        care hospital if the facility--
                    ``(A) is located in a county (or equivalent unit of 
                local government) in a rural area (as defined in 
                section 1886(d)(2)(D)) that--
                            ``(i) is located more than a 20-mile drive 
                        from a hospital, or another facility described 
                        in this subsection, or
                            ``(ii) is certified by the State as being a 
                        necessary provider of health care services to 
                        residents in the area because of local 
                        geography or service patterns;
                    ``(B) makes available 24-hour emergency care 
                services;
                    ``(C) provides not more than 15 acute care 
                inpatient beds (meeting such standards as the Secretary 
                may establish) for providing inpatient care for a 
                period not to exceed 96 hours (unless a longer period 
                is required because transfer to a hospital is precluded 
                because of inclement weather or other emergency 
                conditions), except that a peer review organization or 
                equivalent entity may, on request, waive the 96-hour 
                restriction on a case-by-case basis;
                    ``(D) meets such staffing requirements as would 
                apply under section 1861(e) to a hospital located in a 
                rural area, except that--
                            ``(i) the facility need not meet hospital 
                        standards relating to the number of hours 
                        during a day, or days during a week, in which 
                        the facility must be open and fully staffed, 
                        except insofar as the facility is required to 
                        make available emergency care services as 
                        determined under subparagraph (B) and must have 
                        nursing services available on a 24-hour basis, 
                        but need not otherwise staff the facility 
                        except when an inpatient is present,
                            ``(ii) the facility may provide any 
                        services otherwise required to be provided by a 
                        full-time, on-site dietitian, pharmacist, 
                        laboratory technician, medical technologist, 
                        and radiological technologist on a part-time, 
                        off-site basis under arrangements as defined in 
                        section 1861(w)(1), and
                            ``(iii) the inpatient care described in 
                        subparagraph (C) may be provided by a 
                        physician's assistant, nurse practitioner, or 
                        clinical nurse specialist subject to the 
                        oversight of a physician who need not be 
                        present in the facility;
                    ``(E) meets the requirements of subparagraph (I) of 
                paragraph (2) of section 1861(aa); and
                    ``(F) has executed and in effect an agreement 
                described in subsection (b)(1).
    ``(b) Agreements.--
            ``(1) In general.--Each rural primary care hospital shall 
        have an agreement with respect to each item described in 
        paragraph (2) with at least 1 hospital (as defined in section 
        1861(e)).
            ``(2) Items described.--The items described in this 
        paragraph are the following:
                    ``(A) Patient referral and transfer.
                    ``(B) The development and use of communications 
                systems including (where feasible)--
                            ``(i) telemetry systems, and
                            ``(ii) systems for electronic sharing of 
                        patient data.
                    ``(C) The provision of emergency and non-emergency 
                transportation among the facility and the hospital.
            ``(3) Credentialing and quality assurance.--Each rural 
        primary care hospital shall have an agreement with respect to 
        credentialing and quality assurance with at least 1--
                    ``(A) hospital,
                    ``(B) peer review organization or equivalent 
                entity, or
                    ``(C) other appropriate and qualified entity 
                identified by the State.
    ``(c) Certification by the Secretary.--The Secretary shall certify 
a facility as a rural primary care hospital if the facility--
            ``(1) is designated as a rural primary care hospital by the 
        State in which it is located; and
            ``(2) meets such other criteria as the Secretary may 
        require.
    ``(d) Permitting Maintenance of Swing Beds.--Nothing in this 
section shall be construed to prohibit a State from designating or the 
Secretary from certifying a facility as a rural primary care hospital 
solely because, at the time the facility applies to the State for 
designation as a rural primary care hospital, there is in effect an 
agreement between the facility and the Secretary under section 1883 
under which the facility's inpatient hospital facilities are used for 
the furnishing of extended care services, except that the number of 
beds used for the furnishing of such services may not exceed 25 beds 
(minus the number of inpatient beds used for providing inpatient care 
in the facility pursuant to subsection (a)). For purposes of the 
previous sentence, the number of beds of the facility used for the 
furnishing of extended care services shall not include any beds of a 
unit of the facility that is licensed as a distinct-part skilled 
nursing facility at the time the facility applies to the State for 
designation as a rural primary care hospital.
    ``(e) Waiver of Conflicting Part A Provisions.--The Secretary is 
authorized to waive such provisions of this part and part C as are 
necessary to conduct the program established under this section.''.

SEC. 302. PAYMENT ON A REASONABLE COST BASIS.

    (a) Medicare Part A.--Section 1814(l) of the Social Security Act 
(42 U.S.C. 1395f(l)) is amended to read as follows:
    ``(l) Payment for Inpatient Rural Primary Care Hospital Services.--
The amount of payment under this part for inpatient rural primary care 
hospital services is the reasonable costs of the rural primary care 
hospital in providing such services.''.
    (b) Medicare Part B.--Section 1834(g) of such Act (42 U.S.C. 
1395m(g)) is amended to read as follows:
    ``(g) Payment for Outpatient Rural Primary Care Hospital 
Services.--The amount of payment under this part for outpatient rural 
primary care hospital services is the reasonable costs of the rural 
primary care hospital in providing such services.''.

SEC. 303. LENGTHENING MAXIMUM PERIOD OF PERMITTED INPATIENT STAY.

    Section 1814(a)(8) of the Social Security Act (42 U.S.C. 
1395f(a)(8)) is amended by striking ``72 hours'' and inserting ``96 
hours''.

SEC. 304. PAYMENT CONTINUED TO DESIGNATED ESSENTIAL ACCESS COMMUNITY 
              HOSPITALS.

    Section 1886(d)(5)(D) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(D)) is amended--
            (1) in clause (iii)(III), by inserting ``as in effect on 
        September 30, 1996'' before the period at the end; and
            (2) in clause (v), by inserting ``as in effect on September 
        30, 1996'' after ``1820(i)(1)'' and after ``1820(g)''.

SEC. 305. EFFECTIVE DATE.

    The amendments made by this subtitle shall apply to services 
furnished on or after October 1, 1996.

           Subtitle B--Rural Emergency Access Care Hospitals

SEC. 311. ESTABLISHMENT OF HOSPITALS.

    (a) In General.--Section 1861 of the Social Security Act (42 U.S.C. 
1395x) is amended by adding at the end the following new subsection:

  ``Rural Emergency Access Care Hospital; Rural Emergency Access Care 
                           Hospital Services

    ``(oo)(1) The term `rural emergency access care hospital' means, 
for a fiscal year, a facility with respect to which the Secretary finds 
the following:
            ``(A) The facility is located in a rural area (as defined 
        in section 1886(d)(2)(D)).
            ``(B) The facility was a hospital under this title at any 
        time during the 5-year period that ends on the date of the 
        enactment of this subsection.
            ``(C) The facility is in danger of closing due to low 
        inpatient utilization rates and operating losses, and the 
        closure of the facility would limit the access to emergency 
        services of individuals residing in the facility's service 
        area.
            ``(D) The facility has entered into (or plans to enter 
        into) an agreement with a hospital with a participation 
        agreement in effect under section 1866(a), and under such 
        agreement the hospital shall accept patients transferred to the 
        hospital from the facility and receive data from and transmit 
        data to the facility.
            ``(E) There is a practitioner who is qualified to provide 
        advanced cardiac life support services (as determined by the 
        State in which the facility is located) on-site at the facility 
        on a 24-hour basis.
            ``(F) A physician is available on-call to provide emergency 
        medical services on a 24-hour basis.
            ``(G) The facility meets such staffing requirements as 
        would apply under section 1861(e) to a hospital located in a 
        rural area, except that--
                    ``(i) the facility need not meet hospital standards 
                relating to the number of hours during a day, or days 
                during a week, in which the facility must be open, 
                except insofar as the facility is required to provide 
                emergency care on a 24-hour basis under subparagraphs 
                (E) and (F); and
                    ``(ii) the facility may provide any services 
                otherwise required to be provided by a full-time, on-
                site dietitian, pharmacist, laboratory technician, 
                medical technologist, or radiological technologist on a 
                part-time, off-site basis.
            ``(H) The facility meets the requirements applicable to 
        clinics and facilities under subparagraphs (C) through (J) of 
        paragraph (2) of section 1861(aa) and of clauses (ii) and (iv) 
        of the second sentence of such paragraph (or, in the case of 
        the requirements of subparagraph (E), (F), or (J) of such 
        paragraph, would meet the requirements if any reference in such 
        subparagraph to a `nurse practitioner' or to `nurse 
        practitioners' were deemed to be a reference to a `nurse 
        practitioner or nurse' or to `nurse practitioners or nurses'); 
        except that in determining whether a facility meets the 
        requirements of this subparagraph, subparagraphs (E) and (F) of 
        that paragraph shall be applied as if any reference to a 
        `physician' is a reference to a physician as defined in section 
        1861(r)(1).
    ``(2) The term `rural emergency access care hospital services' 
means the following services provided by a rural emergency access care 
hospital and furnished to an individual over a continuous period not to 
exceed 24 hours (except that such services may be furnished over a 
longer period in the case of an individual who is unable to leave the 
hospital because of inclement weather):
            ``(A) An appropriate medical screening examination (as 
        described in section 1867(a)).
            ``(B) Necessary stabilizing examination and treatment 
        services for an emergency medical condition and labor (as 
        described in section 1867(b)).''.
    (b) Requiring Rural Emergency Access Care Hospitals To Meet 
Hospital Anti-Dumping Requirements.--Section 1867(e)(5) of the Social 
Security Act (42 U.S.C. 1395dd(e)(5)) is amended by striking 
``1861(mm)(1))'' and inserting ``1861(mm)(1)) and a rural emergency 
access care hospital (as defined in section 1861(oo)(1))''.
    (c) Coverage and Payment for Services.--
            (1) Coverage.--Section 1832(a)(2) of the Social Security 
        Act (42 U.S.C. 1395k(a)(2)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (I);
                    (B) by striking the period at the end of 
                subparagraph (J) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(K) rural emergency access care hospital services 
                (as defined in section 1861(oo)(2)).''.
            (2) Payment based on payment for outpatient critical access 
        hospital services.--
                    (A) In general.--Section 1833(a)(6) of the Social 
                Security Act (42 U.S.C. 1395l(a)(6)), as amended by 
                section 331(2)(A), is amended by striking ``services,'' 
                and inserting ``services and rural emergency access 
                care hospital services,''.
                    (B) Payment methodology described.--Section 1834(g) 
                of the Social Security Act (42 U.S.C. 1395m(g)), as 
                amended by section 331(2)(B), is amended--
                            (i) in the heading, by striking 
                        ``Services'' and inserting ``Services and Rural 
                        Emergency Access Care Hospital Services''; and
                            (ii) by adding at the end the following new 
                        sentence: ``The amount of payment for rural 
                        emergency access care hospital services 
                        provided during a year shall be determined 
                        using the applicable method provided under this 
                        subsection for determining payment for 
                        outpatient rural primary care hospital services 
                        during the year.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fiscal years beginning on or after October 1, 1996.

  TITLE IV--INCENTIVES FOR HEALTH PROFESSIONALS TO PRACTICE IN RURAL 
                                 AREAS

               Subtitle A--National Health Service Corps

SEC. 401. NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP AND LOAN REPAYMENTS 
              EXCLUDED FROM GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 137 as section 
138 and by inserting after section 136 the following new section:

``SEC. 137. NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP AND LOAN 
              PAYMENTS.

    ``(a) General Rule.--Gross income shall not include any qualified 
scholarship payment or any qualified loan repayment.
    ``(b) Qualified Payments.--For purposes of this section, the term 
`qualified scholarship payment' means any payment made on behalf of the 
taxpayer by the National Health Service Corps Scholarship Program under 
section 338A(g) of the Public Health Service Act, and the term 
`qualified loan repayment' means any payment made on behalf of the 
taxpayer by the National Health Service Corps Loan Repayment Program 
under section 338B(g) of such Act.''.
    (b) Conforming Amendment.--Paragraph (3) of section 338B(g) of the 
Public Health Service Act is amended by striking ``Federal, State, or 
local'' and inserting ``State or local''.
    (c) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 137 and inserting the 
following:

                              ``Sec. 137. National Health Service Corps 
                                        scholarship and loan payments.
                              ``Sec. 138. Cross references to other 
                                        Acts.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to payments made under sections 338A(g) and 338B(g) of the Public 
Health Service Act after the date of the enactment of this Act.

SEC. 402. STUDY REGARDING ALLOCATION OF CORPS MEMBERS AMONG SHORTAGE 
              AREAS.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct a study for the purpose of determining, with respect to the 
assignment of members of the National Health Service Corps under 
subpart II of part D of title III of the Public Health Service Act--
            (1) whether the statutory and administrative criteria for 
        the assignment of Corps members should be modified in order to 
        ensure that the members are equitably allocated among health 
        professional shortage areas; and
            (2) if so, the recommendations of the Secretary for 
        modifications in the criteria.
    (b) Report.--Not later than May 1, 1997, the Secretary shall 
complete the study required in subsection (a) and submit to the 
Congress a report describing the findings made in the study.

SEC. 403. PRIORITY IN ASSIGNMENT OF CORPS MEMBERS; COMMUNITY RURAL 
              HEALTH NETWORKS.

    Section 333A(a)(1)(B) of the Public Health Service Act (42 U.S.C. 
254f-1(a)(1)(B)) is amended--
            (1) in clause (iii), by striking ``and'' after the 
        semicolon at the end;
            (2) in clause (iv), by adding ``and'' after the semicolon 
        at the end; and
            (3) by adding at the end the following clause:
                            ``(v) is a participant in a community rural 
                        health network, as defined in section 204 of 
                        the Rural Health Improvement Act of 1996.''.

     Subtitle B--Primary Care Services Furnished in Shortage Areas

SEC. 411. ADDITIONAL PAYMENTS UNDER MEDICARE FOR PRIMARY CARE SERVICES 
              FURNISHED IN RURAL SHORTAGE AREAS.

    (a) Increase in Amount of Additional Payment.--Section 1833(m) of 
the Social Security Act (42 U.S.C. 1395l(m)) is amended by striking 
``10 percent'' and inserting ``20 percent''.
    (b) Restriction to Primary Care Services.--Section 1833(m) of the 
Social Security Act (42 U.S.C. 1395l(m)) is amended--
            (1) by striking ``physicians' services'' and inserting 
        ``primary care services (as defined in section 1842(i)(4) and 
        including services described in such section that are furnished 
        by a physician assistant, nurse practitioner, or nurse midwife 
        and that would be physicians' services if furnished by a 
        physician)'',
            (2) by striking ``in an area'' and inserting ``in a rural 
        area'', and
            (3) by inserting ``or physician assistant, nurse 
        practitioner, or nurse midwife furnishing the service'' after 
        ``physician''.
    (c) Extension of Payment for Former Shortage Areas.--
            (1) In general.--Section 1833(m) of the Social Security Act 
        (42 U.S.C. 1395l(m)) is amended by striking ``area,'' and 
        inserting ``area (or, in the case of an area for which the 
        designation as a health professional shortage area under such 
        section is withdrawn, in the case of such services furnished to 
        such an individual during the 3-year period beginning on the 
        effective date of the withdrawal of such designation),''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished in an area for which the 
        designation as a health professional shortage area under 
        section 332(a)(1)(A) of the Public Health Service Act is 
        withdrawn on or after October 1, 1996.
    (d) Requiring Carriers to Report on Services Provided.--Section 
1842(b)(3) of the Social Security Act (42 U.S.C. 1395u(b)(3)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (I); and
            (2) by inserting after subparagraph (I) the following new 
        subparagraph:
            ``(J) will provide information to the Secretary not later 
        than 30 days after the end of the contract year on the types of 
        providers to whom the carrier made additional payments during 
        the year for certain services pursuant to section 1833(m), 
        together with a description of the services furnished by such 
        providers during the year; and''.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (d) shall apply to services furnished on or after October 1, 1996.
    (f) Submission of Report on Study.--The Secretary of Health and 
Human Services shall transmit to Congress, by not later than May 1, 
1997, a report on the study being conducted on the criteria for 
designation of health professional shortage areas under subpart II of 
part D of title III of the Public Health Service Act and for 
designation of medically underserved areas under section 330(b) of such 
Act.

           TITLE V--CLASSIFICATION OF RURAL REFERRAL CENTERS

SEC. 501. CLASSIFICATION OF CENTERS.

    (a) Prohibiting Denial of Request for Reclassification on Basis of 
Comparability of Wages.--
            (1) In general.--Section 1886(d)(10)(D) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(10)(D)) is amended--
                    (A) by redesignating clause (iii) as clause (iv); 
                and
                    (B) by inserting after clause (ii) the following 
                new clause:
    ``(iii) Under the guidelines published by the Secretary under 
clause (i), in the case of a hospital which is classified by the 
Secretary as a rural referral center under paragraph (5)(C), the Board 
may not reject the application of the hospital under this paragraph on 
the basis of any comparison between the average hourly wage of the 
hospital and the average hourly wage of hospitals in the area in which 
it is located.''.
            (2) Effective date.--Notwithstanding section 
        1886(d)(10)(C)(ii) of the Social Security Act, a hospital may 
        submit an application to the Medicare Geographic Classification 
        Review Board during the 30-day period beginning on the date of 
        the enactment of this Act requesting a change in its 
        classification for purposes of determining the area wage index 
        applicable to the hospital under section 1886(d)(3)(D) of such 
        Act for fiscal year 1997, if the hospital would be eligible for 
        such a change in its classification under the standards 
        described in section 1886(d)(10)(D) (as amended by paragraph 
        (1)) but for its failure to meet the deadline for applications 
        under section 1886(d)(10)(C)(ii).
    (b) Continuing Treatment of Previously Designated Centers.--Any 
hospital classified as a rural referral center by the Secretary of 
Health and Human Services under section 1886(d)(5)(C) of the Social 
Security Act for fiscal year 1991 shall be classified as such a rural 
referral center for fiscal year 1997 and each subsequent fiscal year.

         TITLE VI--PROMOTION OF HEALTH CENTERS IN RURAL REGIONS

SEC. 601. EXPANSION OF HEALTH CENTERS IN RURAL REGIONS.

    Section 330 of the Public Health Service Act (42 U.S.C. 254c) is 
amended by adding at the end the following new subsection:
    ``(l) In making grants in rural areas for new or expanded services 
for each fiscal year under this section, the Secretary shall give 
priority to projects that would be located in a State, or county or 
region of a State, that is not already serviced by an existing 
community health center.''.

SEC. 602. COLLABORATION OF HEALTH CENTERS WITH COMMUNITY HOSPITALS.

    Section 330 of the Public Health Service Act (42 U.S.C. 254c), as 
amended by section 601, is further amended by adding at the end the 
following new subsection:
    ``(m)(1) In making grants under this section for new or expanded 
services in rural areas for each fiscal year, the Secretary shall give 
special consideration to projects which have entered into a 
collaborative agreement with a community hospital that meets the 
following requirements:
            ``(A) The community health center is located in, or 
        adjacent to, the community hospital.
            ``(B) To the extent practicable, excess facilities and 
        equipment in or owned by the community hospital are available 
        for use by the community health center.
            ``(C) The community health center and the hospital avoid 
        unnecessary duplication of facilities and equipment, except 
        that the center may install appropriate support equipment for 
        routine primary health services.
            ``(D) The community health center provides primary health 
        services.
            ``(E) To the extent practicable, the community health 
        center provides referrals to providers of supplemental health 
        services.
            ``(F) The physicians of the community health center have 
        admitting privileges at the community hospital.
            ``(G) To ensure quality, efficiency, and cost-
        effectiveness, the community health center and the community 
        hospital will work in collaboration to direct patients to the 
        appropriate location for care.
    ``(2) For purposes of this subsection, the term `community 
hospital' means a public general hospital that--
            ``(A) is owned and operated by a State, county, or unit of 
        local government or is a private nonprofit community hospital,
            ``(B) has less than 75 beds, and
            ``(C) primarily serves a rural area designated under 
        subsection (b)(3) as a medically underserved area.
    ``(3) For purposes of this subsection, the term `rural area' has 
the meaning given such term in section 1886(d)(2)(D) of the Social 
Security Act.''.

               TITLE VII--MEDICARE PAYMENT METHODOLOGIES

SEC. 701. TELEMEDICINE SERVICES.

    The Secretary of Health and Human Services shall establish a 
methodology for making payments under part B of the medicare program 
for telemedicine services furnished on an emergency basis to 
individuals residing in a rural area (as defined in section 
1886(d)(2)(D)).

                         TITLE VIII--ANTITRUST

SEC. 801. SENSE OF CONGRESS RELATING TO APPLICATION OF GUIDELINES.

    It is the sense of Congress that--
            (1) the Federal Trade Commission, in conjunction with the 
        Justice Department, give special consideration to antitrust 
        guidelines affecting physician and hospital networks located in 
        rural areas during its ongoing review of such guidelines; and
            (2) the completion of the Commission's review be expedited 
        to provide relief and clarification to physicians and hospitals 
        working to develop alternative means of providing accessible, 
        affordable, and quality health care services to all Americans, 
        especially those living and working in rural areas.

                          TITLE IX--FINANCING

SEC. 901. EXTENSION AND EXPANSION OF EXISTING MEDICARE SECONDARY PAYER 
              REQUIREMENTS.

    (a) Data Match.--
            (1) Section 1862(b)(5)(C) of the Social Security Act (42 
        U.S.C. 1395y(b)(5)(C)) is amended by striking clause (iii).
            (2) Section 6103(l)(12) of the Internal Revenue Code of 
        1986 is amended by striking subparagraph (F).
    (b) Application to Disabled Individuals in Large Group Health 
Plans.--
            (1) In general.--Section 1862(b)(1)(B) of the Social 
        Security Act (42 U.S.C. 1395y(b)(1)(B)) is amended--
                    (A) in clause (i), by striking ``clause (iv)'' and 
                inserting ``clause (iii)'',
                    (B) by striking clause (iii), and
                    (C) by redesignating clause (iv) as clause (iii).
            (2) Conforming amendments.--Paragraphs (1) through (3) of 
        section 1837(i) of such Act (42 U.S.C. 1395p(i)) and the second 
        sentence of section 1839(b) (42 U.S.C. 1395r(b)) are each 
        amended by striking ``1862(b)(1)(B)(iv)'' each place it appears 
        and inserting ``1862(b)(1)(B)(iii)''.
    (c) Individuals With End Stage Renal Disease.--Section 
1862(b)(1)(C) of such Act (42 U.S.C. 1395y(b)(1)(C)) is amended--
            (1) in the last sentence by striking ``October 1, 1998'' 
        and inserting ``the date of the enactment of the Rural Health 
        Improvement Act of 1996''; and
            (2) by adding at the end the following new sentence: 
        ``Effective for items and services furnished on or after the 
        date of the enactment of the Rural Health Improvement Act of 
        1996, (with respect to periods beginning on or after the date 
        that is 18 months prior to such date), clauses (i) and (ii) 
        shall be applied by substituting `30-month' for `12-month' each 
        place it appears.''.
                                 <all>