[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1189 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1189

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

                             March 20, 1997

 Mr. Nussle (for himself, Mr. Poshard, Mrs. Emerson, Mr. Bonilla, Mr. 
   Bereuter, Mr. DeFazio, Mr. Hilliard, Mr. Kind of Wisconsin, Mrs. 
 Johnson of Connecticut, Mr. Minge, Mr. Pomeroy, Mr. Moran of Kansas, 
 Mr. Stenholm, Mr. Peterson of Pennsylvania, Mr. Barrett of Nebraska, 
  Mr. Boucher, Mr. Clyburn, Mr. Costello, Mr. Crapo, Mr. Ganske, Mr. 
 Hill, Mr. Latham, Mr. Leach, Mr. Oberstar, Mr. Rahall, Mr. Petri, Mr. 
   Thornberry, Mr. Walsh, Mr. Watts of Oklahoma, and Mr. Peterson of 
  Minnesota) introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
Commerce, 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 
1997''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Sense of Congress on the 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.
Sec. 102. Sense of Congress relating to payments to health maintenance 
                            organizations and competitive medical plans 
                            in rural areas.
TITLE II--EXPANSION OF GRANT AUTHORITY TO INCLUDE TECHNICAL ASSISTANCE 
                       FOR RURAL HEALTH NETWORKS

Sec. 201. Technical assistance grants for rural health networks.
        TITLE III--MEDICARE 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 and designated rural primary care 
                            hospitals.
Sec. 305. Effective date.
  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. Submission of report on study.
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 AS RURAL REFERRAL CENTERS; GEOGRAPHIC 
    RECLASSIFICATION FOR DISPROPORTIONATE SHARE PAYMENT ADJUSTMENT.

Sec. 501. Classification of centers.
Sec. 502. Medicare hospital geographic reclassification permitted for 
                            purposes of disproportionate share payment 
                            adjustments.
                TITLE VI--MEDICARE PAYMENT METHODOLOGIES

Sec. 601. Telemedicine services.
                          TITLE VII--ANTITRUST

Sec. 701. Sense of Congress relating to application of guidelines.
                         TITLE VIII--FINANCING

Sec. 801. Extension of certain existing medicare secondary payer 
                            requirements with respect to end stage 
                            renal disease.

SEC. 3. SENSE OF CONGRESS ON THE 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 
an 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 1998, 85 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 1998, 100 percent of the 
                annual per capita rate of payment for 1997 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 1997); 
                and
                    ``(II) in the case of a subsequent year, 100 
                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 1998, the `area-specific percentage' is 85 
        percent and the `national percentage' is 15 percent,
            ``(ii) for 1999, the `area-specific percentage' is 75 
        percent and the `national percentage' is 25 percent,
            ``(iii) for 2000, the `area-specific percentage' is 65 
        percent and the `national percentage' is 35 percent,
            ``(iv) for 2001, the `area-specific percentage' is 55 
        percent and the `national percentage' is 45 percent, and
            ``(v) for a year after 2001, the `area-specific percentage' 
        is 50 percent and the `national percentage' is 50 percent.
    ``(C) For purposes of subparagraph (A)(i), the area-specific 
adjusted capitation rate for a medicare payment area--
            ``(i) for 1998, is the average of the annual per capita 
        rates of payment for the area for 1995 through 1997, after 
        adjusting the 1995 and 1996 rates of payment to 1997 dollars, 
        increased by the national average per capita growth percentage 
        for 1998 (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 1998--
            ``(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 1997 to the total 
                average annual per capita rate of payment for parts A 
                and B for 1997, 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 1999.
    ``(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 1998) 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) The payment to an eligible organization under this section 
for individuals enrolled under this section with the organization and 
entitled to benefits under part A and enrolled under part B shall be 
made from the Federal Hospital Insurance Trust Fund and the Federal 
Supplementary Medical Insurance Trust Fund. The portion of that payment 
to the organization for a month to be paid by each trust fund shall be 
determined as follows:
            ``(A) In regard to expenditures by eligible organizations 
        having risk-sharing contracts, the allocation shall be 
        determined each year by the Secretary based on the relative 
        weight that benefits from each fund contribute to the adjusted 
        average per capita cost.
            ``(B) In regard to expenditures by eligible organizations 
        operating under a reasonable cost reimbursement contract, the 
        initial allocation shall be based on the plan's most recent 
        budget, such allocation to be adjusted, as needed, after cost 
        settlement to reflect the distribution of actual expenditures. 
        The remainder of that payment shall be paid by the former trust 
        fund.
    ``(7) 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, 1997.

SEC. 102. SENSE OF CONGRESS RELATING TO PAYMENTS TO HEALTH MAINTENANCE 
              ORGANIZATIONS AND COMPETITIVE MEDICAL PLANS IN RURAL 
              AREAS.

    It is the sense of the Congress that health maintenance 
organizations or competitive medical plans in rural areas receiving 
additional payments as a result of the amendment to the Social Security 
Act made under section 101 of this Act should allocate those payments 
to provide increased health care services to medicare beneficiaries or 
to pay for health care service infrastructure needs.

TITLE II--EXPANSION OF GRANT AUTHORITY TO INCLUDE TECHNICAL ASSISTANCE 
                       FOR RURAL HEALTH NETWORKS

SEC. 201. TECHNICAL ASSISTANCE GRANTS FOR RURAL HEALTH NETWORKS.

    Section 330A of the Public Health Service Act (42 U.S.C. 254c) is 
amended--
            (1) by redesignating subsection(g) as subsection (h); and
            (2) by inserting after subsection (f) the following new 
        subsection:
    ``(g) The Secretary may provide technical assistance with respect 
to the planning, development, and operation of any program or service 
carried out pursuant to this section. The Secretary may provide such 
technical assistance directly or through grants to, or contracts with, 
public and private entities.''.

        TITLE III--MEDICARE 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 an average, for all patients 
                treated in the facility in a 12-month period, of 96 
                hours (unless a longer period than the average 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 
                average 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 AND DESIGNATED RURAL PRIMARY CARE HOSPITALS.

    (a) 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, 1997'' before the period at the end; and
            (2) in clause (v), by inserting ``as in effect on September 
        30, 1997'' after ``1820(i)(1)'' and after ``1820(g)''.
    (b) Rural Primary Care Hospitals.--Section 1861(mm)(1) of the 
Social Security Act (42 U.S.C. 1395x(mm)(1)) is amended by striking 
``1820(i)(2).'' and inserting ``1820(c), and includes a facility 
designated by the Secretary under section 1820(i)(2) as in effect on 
September 30, 1997.''.
    (c) Medical Assistance Facility.--Any facility that, as of March 1, 
1997, operated as a limited service rural hospital under a 
demonstration program described in section 4008(i)(1) of the Omnibus 
Budget Reconciliation Act of 1990 (42 U.S.C. 1395b-1 note) shall be 
treated as a rural primary care hospital for the purposes of title 
XVIII of the Social Security Act.

SEC. 305. EFFECTIVE DATE.

    The amendments made by this title shall apply to services furnished 
on or after October 1, 1997.

  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 138 as section 
139 and by inserting after section 137 the following new section:

``SEC. 138. 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 138 and inserting the 
following:

                              ``Sec. 138. National Health Service Corps 
                                        scholarship and loan payments.
                              ``Sec. 139. 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. SUBMISSION OF REPORT ON STUDY.

    The Secretary of Health and Human Services shall transmit to the 
Congress, by not later than 180 days after the date of the enactment of 
this section, 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.

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 an eligible 
                        network described in section 330A(c).''.

     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, 1997.
    (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, 1997.

     TITLE V--CLASSIFICATION AS RURAL REFERRAL CENTERS; GEOGRAPHIC 
    RECLASSIFICATION FOR DISPROPORTIONATE SHARE PAYMENT ADJUSTMENT.

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 60-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 1998, 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 1998 and each subsequent fiscal year.

SEC. 502. MEDICARE HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED FOR 
              PURPOSES OF DISPROPORTIONATE SHARE PAYMENT ADJUSTMENTS.

    (a) In General.--Section 1886(d)(10)(C)(i) of the Social Security 
Act (42 U.S.C. 1395ww(d)(10)(C)(i)) is amended--
            (1) by striking ``or'' at the end of subclause (I);
            (2) by striking the period at the end of subclause (II) and 
        inserting ``, or'';
            (3) by inserting after subclause (II) the following:
            ``(III) eligibility for and amount of additional payment 
        amounts under paragraph (5)(F).''; and
            (4) by adding at the end the following:
``Any application approved for purposes of subclause (I) for a fiscal 
year is deemed to be approved for purposes of subclause (III) for that 
fiscal year.''.
    (b) 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 60-day 
period beginning on the date of the enactment of this Act requesting a 
change in its classification for purposes of determining the 
disproportionate share hospital payment applicable to the hospital 
under section 1886(d)(5)(F) of such Act for fiscal year 1998 if the 
hospital would be eligible for such a change in its classification 
under the guidelines described in subsection (c) of this section but 
for its failure to meet the deadline for applications under section 
1886(d)(10(C)(ii).
    (c) Applicable Guidelines.--Such Board shall apply the guidelines 
established for reclassification under subclause (I) of section 
1886(d)(10)(C)(i) of such Act to reclassification under subclause (III) 
of such section until the Secretary of Health and Human Services 
promulgates separate guidelines for reclassification under such 
subclause (III).

                TITLE VI--MEDICARE PAYMENT METHODOLOGIES

SEC. 601. TELEMEDICINE SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
implement a methodology for making payments under part B of the 
medicare program for telemedicine services. Such methodology shall be 
based upon the proposal submitted by the Secretary to the Congress 
under section 192 of the Health Insurance Portability and 
Accountability Act of 1996.
    (b) Effective Date.--The Secretary shall implement the methodology 
described in subsection (a) not later than 365 days after the date of 
the enactment of this Act.

                          TITLE VII--ANTITRUST

SEC. 701. SENSE OF CONGRESS RELATING TO APPLICATION OF GUIDELINES.

    It is the sense of the Congress that--
            (1) physician and hospital networks in rural areas are 
        working to develop alternative means of providing accessible, 
        affordable, and quality health care services to Americans 
        living and working in rural areas; and
            (2) the Federal Trade Commission, in conjunction with the 
        Justice Department, should, when implementing antitrust 
        guidelines with respect to physician and hospital networks in 
        rural areas, give special consideration to and provide 
        appropriate relief for such networks.

                         TITLE VIII--FINANCING

SEC. 801. EXTENSION OF CERTAIN EXISTING MEDICARE SECONDARY PAYER 
              REQUIREMENTS WITH RESPECT TO END STAGE RENAL DISEASE.

    Section 1862(b)(1)(C) of the Social Security 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 1997''; 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 
        1997, (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>