[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2603 Introduced in Senate (IS)]

  2d Session
                                S. 2603

       To promote access to health care services in rural areas.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

              October 9 (legislative day, October 2), 1998

  Mr. Baucus (for himself, Mr. Daschle, Mr. Inouye, Mr. Bingaman, Mr. 
Johnson, and Mr. Conrad) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
       To promote access to health care services in rural areas.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Promoting Health 
in Rural Areas Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER 
                          THE MEDICARE PROGRAM

Sec. 101. Payments to Medicare+Choice organizations.
Sec. 102. Direct billing of medicare, medicaid, and other third-party 
                            payors by Indian tribes and Alaska Native 
                            and tribal organizations.
Sec. 103. Sole community hospitals.
Sec. 104. Conversion of recently closed hospitals to critical access 
                            hospitals.
Sec. 105. Graduate medical education technical amendments.
Sec. 106. Medicare-dependent small rural hospitals.
Sec. 107. Rural representation on MedPAC.
Sec. 108. Coverage of qualified mental health professional services 
                            under medicare.
Sec. 109. Medicare waivers for providers in rural areas.
Sec. 110. All-inclusive payment option for outpatient critical access 
                            hospital services.
    TITLE II--ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF HEALTH 
                      PROFESSIONALS IN RURAL AREAS

Sec. 201. Health professional shortage areas.
Sec. 202. Exclusion of certain amounts received under the National 
                            Health Service Corps Scholarship Program.
Sec. 203. Designation of underserved areas under health care contracts 
                            administered by the Office of Personnel 
                            Management.
Sec. 204. Improvement of telehealth services.
Sec. 205. Sense of Congress regarding the practice of medicine across 
                            State lines.
Sec. 206. Joint Working Group on Telehealth.
             TITLE III--DEVELOPMENT OF TELEHEALTH NETWORKS

Sec. 301. Development.
Sec. 302. Administration.
Sec. 303. Guidelines.
Sec. 304. Authorization of appropriations.
                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Bank deductibility of small, tax-exempt debts.
Sec. 402. Access to data.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Rural communities have long had great difficulty 
        recruiting and retaining health care providers to serve the 
        needs of their residents.
            (2) Despite great increases in the production of providers 
        in this country (the number of individuals per physician fell 
        from 724 in 1965 to 375 in 1995), individuals living in rural 
        areas have not shared equitably in the benefits of this 
        expansion.
            (3) Over 73 percent of Americans live in non-metropolitan 
        counties, but only 11 percent of patient care physicians 
        practice in those counties, and this proportion has been 
        falling for the last 25 years.
            (4) The following conditions are characteristic of rural 
        populations:
                    (A) The relative lack of health care resources as 
                compared to urban areas.
                    (B) The uneven pattern of disease burden.
                    (C) The idiosyncratic distribution of programs and 
                resources resulting from policy variations across the 
                nation.
            (5) Of the non-metropolitan counties in the United States, 
        20 percent are considered frontier counties, with 6 or fewer 
        people per square mile. Seven million Americans live in 
        frontier areas.

TITLE I--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER 
                          THE MEDICARE PROGRAM

SEC. 101. PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS.

    (a) Adjustment to Calculation of Annual Capitation Rates.--Section 
1853(c) of the Social Security Act (42 U.S.C. 1395w-23(c)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A), by striking the comma at 
                the end of clause (ii) and all that follows before the 
                period; and
                    (B) in subparagraph (C)(ii), by inserting 
                ``multiplied by the budget neutrality adjustment factor 
                determined under paragraph (5)'' before the period at 
                the end; and
            (2) in paragraph (5), by striking ``paragraph (1)(A)'' and 
        inserting ``paragraph (1)(C)(ii)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to rates calculated for years after 1999.

SEC. 102. DIRECT BILLING OF MEDICARE, MEDICAID, AND OTHER THIRD-PARTY 
              PAYORS BY INDIAN TRIBES AND ALASKA NATIVE AND TRIBAL 
              ORGANIZATIONS.

    (a) Permanent Authorization.--Section 405 of the Indian Health Care 
Improvement Act (25 U.S.C. 1645) is amended to read as follows:
    ``(a) Establishment of Direct Billing Program.--
            ``(1) In general.--The Secretary shall establish a program 
        under which Indian tribes, tribal organizations, and Alaska 
        Native health organizations that contract or compact for the 
        operation of a hospital or clinic of the Service under the 
        Indian Self-Determination and Education Assistance Act may 
        elect to directly bill for, and receive payment for, health 
        care services provided by such hospital or clinic for which 
        payment is made under title XVIII of the Social Security Act 
        (42 U.S.C. 1395 et seq.) (in this section referred to as the 
        `medicare program'), under a State plan for medical assistance 
        approved under title XIX of the Social Security Act (42 U.S.C. 
        1396 et seq.) (in this section referred to as the `medicaid 
        program'), or from any other third-party payor.
            ``(2) Application of 100 percent fmap.--The third sentence 
        of section 1905(b) of the Social Security Act (42 U.S.C. 
        1396d(b)) shall apply for purposes of reimbursement under the 
        medicaid program for health care services directly billed under 
        the program established under this section.
    ``(b) Direct Reimbursement.--
            ``(1) Use of funds.--Each hospital or clinic participating 
        in the program described in subsection (a) of this section 
        shall be reimbursed directly under the medicare and medicaid 
        programs for services furnished, without regard to the 
        provisions of section 1880(c) of the Social Security Act (42 
        U.S.C. 1395qq(c)) and sections 402(a) and 813(b)(2)(A), but all 
        funds so reimbursed shall first be used by the hospital or 
        clinic for the purpose of making any improvements in the 
        hospital or clinic that may be necessary to achieve or maintain 
        compliance with the conditions and requirements applicable 
        generally to facilities of such type under the medicare or 
        medicaid programs. Any funds so reimbursed which are in excess 
        of the amount necessary to achieve or maintain such conditions 
        shall be used--
                    ``(A) solely for improving the health resources 
                deficiency level of the Indian tribe; and
                    ``(B) in accordance with the regulations of the 
                Service applicable to funds provided by the Service 
                under any contract entered into under the Indian Self-
                Determination Act (25 U.S.C. 450f et seq.).
            ``(2) Audits.--The amounts paid to the hospitals and 
        clinics participating in the program established under this 
        section shall be subject to all auditing requirements 
        applicable to programs administered directly by the Service and 
        to facilities participating in the medicare and medicaid 
        programs.
            ``(3) Secretarial oversight.--
                    ``(A) Quarterly reports.--Subject to subparagraph 
                (B), the Secretary shall monitor the performance of 
                hospitals and clinics participating in the program 
                established under this section, and shall require such 
                hospitals and clinics to submit reports on the program 
                to the Secretary on a quarterly basis during the first 
                2 years of participation in the program and annually 
                thereafter.
                    ``(B) Annual reports.--Any participant in the 
                demonstration program authorized under this section as 
                in effect on the day before the date of enactment of 
                the Promoting Health in Rural Areas Act of 1998 shall 
                only be required to submit annual reports under this 
                paragraph.
            ``(4) No payments from special funds.--Notwithstanding 
        section 1880(c) of the Social Security Act (42 U.S.C. 
        1395qq(c)) or section 402(a), no payment may be made out of the 
        special funds described in such sections for the benefit of any 
        hospital or clinic during the period that the hospital or 
        clinic participates in the program established under this 
        section.
    ``(c) Requirements for Participation.--
            ``(1) Application.--Except as provided in paragraph (2)(B), 
        in order to be eligible for participation in the program 
        established under this section, an Indian tribe, tribal 
        organization, or Alaska Native health organization shall submit 
        an application to the Secretary that establishes to the 
        satisfaction of the Secretary that--
                    ``(A) the Indian tribe, tribal organization, or 
                Alaska Native health organization contracts or compacts 
                for the operation of a facility of the Service;
                    ``(B) the facility is eligible to participate in 
                the medicare or medicaid programs under section 1880 or 
                1911 of the Social Security Act (42 U.S.C. 1395qq; 
                1396j);
                    ``(C) the facility meets the requirements that 
                apply to programs operated directly by the Service; and
                    ``(D) the facility is accredited by an accrediting 
                body designated by the Secretary or has submitted a 
                plan, which has been approved by the Secretary, for 
                achieving such accreditation.
            ``(2) Approval.--
                    ``(A) In general.--The Secretary shall review and 
                approve a qualified application not later than 90 days 
                after the date the application is submitted to the 
                Secretary unless the Secretary determines that any of 
                the criteria set forth in paragraph (1) are not met.
                    ``(B) Grandfather of demonstration program 
                participants.--Any participant in the demonstration 
                program authorized under this section as in effect on 
                the day before the date of enactment of the Promoting 
                Health in Rural Areas Act of 1998 shall be deemed 
                approved for participation in the program established 
                under this section and shall not be required to submit 
                an application in order to participate in the program.
                    ``(C) Duration.--An approval by the Secretary of a 
                qualified application under subparagraph (A), or a 
                deemed approval of a demonstration program under 
                subparagraph (B), shall continue in effect as long as 
                the approved applicant or the deemed approved 
                demonstration program meets the requirements of this 
                section.
    ``(d) Examination and Implementation of Changes.--
            ``(1) In general.--The Secretary, acting through the 
        Service, and with the assistance of the Administrator of the 
        Health Care Financing Administration, shall examine on an 
        ongoing basis and implement--
                    ``(A) any administrative changes that may be 
                necessary to facilitate direct billing and 
                reimbursement under the program established under this 
                section, including any agreements with States that may 
                be necessary to provide for direct billing under the 
                medicaid program; and
                    ``(B) any changes that may be necessary to enable 
                participants in the program established under this 
                section to provide to the Service medical records 
                information on patients served under the program that 
                is consistent with the medical records information 
                system of the Service.
            ``(2) Accounting information.--The accounting information 
        that a participant in the program established under this 
        section shall be required to report shall be the same as the 
        information required to be reported by participants in the 
        demonstration program authorized under this section as in 
        effect on the day before the date of enactment of the Promoting 
        Health in Rural Areas Act of 1998. The Secretary may from time 
        to time, after consultation with the program participants, 
        change the accounting information submission requirements.
    ``(e) Withdrawal From Program.--A participant in the program 
established under this section may withdraw from participation in the 
same manner and under the same conditions that a tribe or tribal 
organization may retrocede a contracted program to the Secretary under 
authority of the Indian Self-Determination Act (25 U.S.C. 450 et seq.). 
All cost accounting and billing authority under the program established 
under this section shall be returned to the Secretary upon the 
Secretary's acceptance of the withdrawal of participation in this 
program.''.
    (b) Conforming Amendments.--
            (1) Section 1880 of the Social Security Act (42 U.S.C. 
        1395qq) is amended by adding at the end the following:
    ``(e) For provisions relating to the authority of certain Indian 
tribes, tribal organizations, and Alaska Native health organizations to 
elect to directly bill for, and receive payment for, health care 
services provided by a hospital or clinic of such tribes or 
organizations and for which payment may be made under this title, see 
section 405 of the Indian Health Care Improvement Act (25 U.S.C. 
1645).''.
            (2) Section 1911 of the Social Security Act (42 U.S.C. 
        1396j) is amended by adding at the end the following:
    ``(d) For provisions relating to the authority of certain Indian 
tribes, tribal organizations, and Alaska Native health organizations to 
elect to directly bill for, and receive payment for, health care 
services provided by a hospital or clinic of such tribes or 
organizations and for which payment may be made under this title, see 
section 405 of the Indian Health Care Improvement Act (25 U.S.C. 
1645).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

SEC. 103. SOLE COMMUNITY HOSPITALS.

    Section 1886(b)(3)(C) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)(C)) is amended--
            (1) in clause (i), by redesignating subclauses (I) and (II) 
        as items (aa) and (bb), respectively;
            (2) by redesignating clauses (i), (ii), (iii), and (iv) as 
        subclauses (I), (II), (III), and (IV), respectively;
            (3) by striking ``(C) In'' and inserting ``(C)(i) Subject 
        to clause (ii), in''; and
            (4) by striking the last sentence and inserting the 
        following:
    ``(ii)(I) There shall be substituted for the base cost reporting 
period described in clause (i)(I) a hospital's cost reporting period 
(if any) beginning during fiscal year 1987 if such substitution results 
in an increase in the target amount for the hospital.
    ``(II) Beginning with discharges occurring in fiscal year 2000, 
there shall be substituted for the base cost reporting period described 
in clause (i)(I) either--
            ``(aa) the allowable operating costs of inpatient hospital 
        services (as defined in subsection (a)(4)) recognized under 
        this title for the hospital's cost reporting period (if any) 
        beginning during fiscal year 1995 increased (in a compounded 
        manner) by the applicable percentage increases applied to the 
        hospital under this paragraph for discharges occurring in 
        fiscal years 1996, 1997, 1998, and 1999, or
            ``(bb) the allowable operating costs of inpatient hospital 
        services (as defined in subsection (a)(4)) recognized under 
        this title for the hospital's cost reporting period (if any) 
        beginning during fiscal year 1996 increased (in a compounded 
        manner) by the applicable percentage increases applied to the 
        hospital under this paragraph for discharges occurring in 
        fiscal years 1996, 1997, 1998, and 1999,
if such substitution results in an increase in the target amount for 
the hospital.''.

SEC. 104. CONVERSION OF RECENTLY CLOSED HOSPITALS TO CRITICAL ACCESS 
              HOSPITALS.

    (a) In General.--Section 1820(c)(2) of the Social Security Act (42 
U.S.C. 1395i-4(c)(2)) is amended by adding at the end the following:
                    ``(C) Recently closed facilities.--A State may 
                designate a facility as a critical access hospital if 
                the facility--
                            ``(i) within the 5-year period ending on 
                        the date of enactment of this subparagraph--
                                    ``(I) ceased operations; or
                                    ``(II) was a nonprofit or public 
                                hospital that was downsized to a 
                                clinic; and
                            ``(ii) would, after being designated as a 
                        critical access hospital, meet the requirements 
                        of subparagraph (B).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 105. GRADUATE MEDICAL EDUCATION TECHNICAL AMENDMENTS.

    (a) Indirect Graduate Medical Education Adjustment.--Section 
1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)(v)) (as added by section 4621(b) of the Balanced Budget 
Act of 1997) is amended by striking ``in the hospital with respect to 
the hospital's most recent cost reporting period ending on or before 
December 31, 1996'' and inserting ``who were appointed by the 
hospital's approved medical residency training programs for the 
hospital's most recent cost reporting period ending on or before 
December 31, 1996. The preceding sentence shall not apply to a hospital 
that sponsors only 1 allopathic or osteopathic residency program.''.
    (b) Direct Graduate Medical Education Adjustment.--
            (1) Limitation on number of residents.--Section 
        1886(h)(4)(F) of the Social Security Act (42 U.S.C. 
        1395ww(h)(4)(F)) (as added by section 4623 of the Balanced 
        Budget Act of 1997) is amended by inserting ``who were 
        appointed by the hospital's approved medical residency training 
        programs'' after ``may not exceed the number of such full-time 
        equivalent residents''.
            (2) Funding for new programs.--The first sentence of 
        section 1886(h)(4)(H)(i) of the Social Security Act (42 U.S.C. 
        1395ww(h)(4)(H)(i)) (as added by section 4623 of the Balanced 
        Budget Act of 1997) is amended by inserting ``and before 
        September 30, 1999'' after ``January 1, 1995''.
            (3) Funding for programs meeting rural needs.--The second 
        sentence of section 1886(h)(4)(H)(i) of the Social Security Act 
        (42 U.S.C. 1395ww(h)(4)(H)(i)) (as added by section 4623 of the 
        Balanced Budget Act of 1997) is amended by striking the period 
        at the end and inserting ``, including facilities that are not 
        located in an underserved rural area but have established 
        separately accredited rural training tracks.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of the Balanced Budget Act of 
1997.

SEC. 106. MEDICARE-DEPENDENT SMALL RURAL HOSPITALS.

    (a) Reduction in Eligibility Discharge Percentage.--Section 
1886(d)(5)(G)(iv)(IV) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(G)(iv)(IV)) is amended by striking ``60'' and inserting 
``50''.
    (b) Option To Base Eligibility on Discharges During the Most 
Current Audited Fiscal Year.--Section 1886(d)(5)(G)(iv)(IV) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by 
inserting ``or the most recent audited cost reporting period'' after 
``1987''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to discharges occurring on or after October 1, 1998.

SEC. 107. RURAL REPRESENTATION ON MEDPAC.

    (a) MedPAC.--Section 1805(c)(2)(A) of the Social Security Act (42 
U.S.C. 1395b-6(c)(2)(A)) is amended by adding at the end the following: 
``At least 2 of the members of the Commission shall be individuals who 
can represent the interests of rural physicians, hospitals, and 
patients.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 108. COVERAGE OF QUALIFIED MENTAL HEALTH PROFESSIONAL SERVICES 
              UNDER MEDICARE.

    (a) In General.--Section 1861(s)(2) of the Social Security Act (42 
U.S.C. 1395x(s)(2)) (as amended by section 4557 of the Balanced Budget 
Act of 1997) is amended--
            (1) in subparagraph (S), by striking ``and'' at the end;
            (2) in subparagraph (T), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(U) qualified mental health professional services (as 
        defined in subsection (uu));''.
    (b) Payment Rules.--
            (1) Determination of amount of payment.--Section 1833(a)(1) 
        of the Social Security Act (42 U.S.C. 1395l(a)(1)) (as amended 
        by section 4556(b) of the Balanced Budget Act of 1997) is 
        amended--
                    (A) by striking ``and'' before ``(S)''; and
                    (B) by striking the semicolon at the end and 
                inserting the following: ``, and (T) with respect to 
                qualified mental health professional services described 
                in section 1861(s)(2)(U), the amounts paid shall be the 
                amount determined by a fee schedule established by the 
                Secretary for purposes of this subparagraph;''.
            (2) Separate payment for services of institutional 
        providers.--Section 1832(a)(2)(B)(iii) of the Social Security 
        Act (42 U.S.C. 1395k(a)(2)(B)(iii)) is amended--
                    (A) by striking ``and services'' and inserting 
                ``services''; and
                    (B) by striking the semicolon at the end and 
                inserting the following: ``, and qualified mental 
                health professional services described in section 
                1861(s)(2)(U);''.
    (c) Services Described.--Section 1861 of the Social Security Act 
(42 U.S.C. 1395x) (as amended by section 4611(b) of the Balanced Budget 
Act of 1997) is amended by adding at the end the following:

            ``Qualified Mental Health Professional Services

    ``(uu)(1) The term `qualified mental health professional services' 
means such services (with such frequency limits as the Secretary 
determines appropriate) furnished by a mental health professional (as 
defined in paragraph (2)) and such services and supplies (with such 
limits) furnished as an incident to services furnished by the mental 
health professional that the mental health professional is legally 
authorized to perform under State law (or under a State regulatory 
mechanism provided by State law), if such services and supplies are 
furnished to an individual who resides in an area designated as a 
health professional shortage area in accordance with section 332 of the 
Public Health Service Act (42 U.S.C. 254e).
    ``(2) The term `mental health professional' means an individual who 
has been certified, licensed, or registered as a mental health 
professional by a State (or under a State regulatory mechanism provided 
by State law).''.
    (d) Effective Date.--The amendments made by this section apply to 
services furnished on or after October 1, 1998.

SEC. 109. MEDICARE WAIVERS FOR PROVIDERS IN RURAL AREAS.

    Notwithstanding section 1886(d)(2)(D) of the Social Security Act 
(42 U.S.C. 1395ww(d)(2)(D)), by not later than 180 after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
establish a waiver process in which entities and individuals under the 
medicare program that are determined by the Office of Management and 
Budget to be located in an urban or large urban area for purposes of 
reimbursement under such program may apply to the Secretary to be 
considered to be located in a rural area for such purposes if such 
entity or individual is located--
            (1) in a rural area, as defined by the Goldsmith 
        Modification as published in the Federal Register on February 
        27, 1992; or
            (2) outside of an urbanized area, as defined by the United 
        States Census Bureau.

SEC. 110. ALL-INCLUSIVE PAYMENT OPTION FOR OUTPATIENT CRITICAL ACCESS 
              HOSPITAL SERVICES.

    (a) In General.--Section 1834(g) of the Social Security Act (42 
U.S.C. 1395m(g)) is amended to read as follows:
    ``(g) Payment for Outpatient Critical Access Hospital Services.--
The amount of payment under this part for outpatient critical access 
hospital services is 1 of the 2 following methods, as elected by the 
critical access hospital:
            ``(1) Reasonable costs.--There shall be paid amounts equal 
        to the reasonable costs of the critical access hospital in 
        providing such services.
            ``(2) All-inclusive rate.--With respect to both facility 
        services and professional medical services, there shall be paid 
        amounts equal to the costs which are reasonable and related to 
        the cost of furnishing such services or which are based on such 
        other tests of reasonableness as the Secretary may prescribe in 
        regulations, less the amount the hospital may charge as 
        described in clause (i) of section 1866(a)(2)(A), but in no 
        case may the payment for such services (other than for items 
        and services described in section 1861(s)(10)(A)) exceed 80 
        percent of such costs.
The amount of payment shall be determined under either method without 
regard to the amount of the customary or other charge.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of the Balanced Budget Act 
of 1997.

    TITLE II--ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF HEALTH 
                      PROFESSIONALS IN RURAL AREAS

SEC. 201. HEALTH PROFESSIONAL SHORTAGE AREAS.

    (a) Effective Date.--Section 332 of the Public Health Service Act 
(42 U.S.C. 254e) is amended--
            (1) in subsection (a)(1)(A), by inserting after 
        ``services)'' the following: ``, or a frontier area (an area 
        that has 6 or fewer residents per square mile),''; and
            (2) by adding at the end of subsection (c), the following:
            ``(3) Any pending retirements or resignations of physicians 
        available within the area involved. In implementing this 
        paragraph, the Secretary shall waive the requirements of this 
        section with respect to the number of physicians serving the 
        area for the 12-month period beginning on the date on which the 
        area was designated as a health professional shortage area.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 202. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE NATIONAL 
              HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM.

    (a) In General.--Subsection (c) of section 117 of the Internal 
Revenue Code of 1986 (relating to the exclusion from gross income 
amounts received as a qualified scholarship) is amended--
            (1) by striking ``Subsections (a)'' and inserting the 
        following:
            ``(1) In general.--Subject to paragraph (2), subsections 
        (a)''; and
            (2) by adding at the end the following:
            ``(2) National health corps scholarship program.--Paragraph 
        (1) shall not apply to any amount received by an individual 
        under the National Health Corps Scholarship Program under 
        section 338A(g)(1)(A) of the Public Health Service Act.''
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to amounts received in taxable years beginning after December 31, 
1998.

SEC. 203. DESIGNATION OF UNDERSERVED AREAS UNDER HEALTH CARE CONTRACTS 
              ADMINISTERED BY THE OFFICE OF PERSONNEL MANAGEMENT.

    Section 8902(m)(2)(A) of title 5, United States Code, is amended by 
striking ``a State where 25 percent'' and all that follows through the 
period and inserting ``an area designated as a health professional 
shortage area by the Department of Health and Human Services in 
accordance with section 332 of the Public Health Service Act (42 U.S.C. 
254e).''.

SEC. 204. IMPROVEMENT OF TELEHEALTH SERVICES.

    (a) Medicare Coverage of Telehealth Services.--
            (1) In general.--Section 4206 of the Balanced Budget Act of 
        1997 (42 U.S.C. 1395l note) is amended by adding at the end the 
        following:
    ``(e) Coverage of Services.--Payment for items and services 
provided pursuant to subsection (a) shall include all items and 
services provided to beneficiaries under the medicare program under 
title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).''.
            (2) Physical, occupational, and speech therapy.--
        Subsections (a) and (d)(1) of section 4206 of the Balanced 
        Budget Act of 1997 (42 U.S.C. 1395l note) are each amended by 
        adding at the end the following: ``For purposes of the 
        preceding sentence, the term `practitioner' shall include 
        physical, occupational, and speech therapists.''.
    (b) Medicare Reimbursement for Telehealth Services in All Rural 
Areas.--Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 
1395l note) is amended by striking ``that is designated as a health 
professional shortage area under section 332(a)(1)(A) of the Public 
Health Service Act (42 U.S.C. 254e(a)(1)(A))'' and inserting ``or a 
county that is not otherwise included in a Metropolitan Statistical 
Area''.
    (c) Reimbursement Under Medicare.--Section 4206(b) of the Balanced 
Budget Act of 1997 (42 U.S.C. 1395l note) is amended--
            (1) by adding at the end the following:
            ``(5) Any health care practitioner (whether or not such 
        practitioner is certified under the medicare program) that is 
        acting on instructions from the referring physician or 
        practitioner may present (without any reimbursement under the 
        medicare program) the beneficiary to the consulting physician 
        or practitioner for the professional consultation.''; and
            (2) by amending paragraph (1) to read as follows:
            ``(1) The entire payment shall be paid to the consulting 
        physician or practitioner. If the referring physician or 
        practitioner determines it appropriate, such referring 
        physician or practitioner may be present during the 
        professional consultation. Such presence is not required and no 
        payment shall be made to the referring physician or 
        practitioner whether or not there is such presence (other than 
        for the original office visit). The amount of the payment to 
        the consulting physician or practitioner shall not be greater 
        than the current fee schedule of such consulting physician or 
        practitioner for the health care services provided.''.
    (d) Reports to Congress.--Section 4206 of the Balanced Budget Act 
of 1997 (42 U.S.C. 1395l note) (as amended by subsection (a)) is 
amended by adding at the end the following:
    ``(f) Additional Reports to Congress.--
            ``(1) Initial report.--Not later than August 1, 2003, the 
        Secretary of Health and Human Services shall prepare and submit 
        to the appropriate committees of Congress a report concerning--
                    ``(A) the number, percentage, and types of health 
                care providers licensed to provide telehealth services 
                across State lines, including the number and types of 
                health care providers licensed to provide such services 
                in more than 3 States;
                    ``(B) the status of any reciprocal, mutual 
                recognition, fast-track, or other licensure agreements 
                between or among various States;
                    ``(C) the status of any efforts to develop uniform 
                national sets of standards for the licensure of health 
                care providers to provide telehealth services across 
                State lines;
                    ``(D) a projection of future utilization of 
                telehealth consultations across State lines;
                    ``(E) State efforts to increase or reduce licensure 
                as a burden to interstate telehealth practice; and
                    ``(F) any State licensure requirements that appear 
                to constitute unnecessary barriers to the provision of 
                telehealth services across State lines.
            ``(2) Annual report.--
                    ``(A) In general.--Not later than August 1, 2004, 
                and each July 1 thereafter, the Secretary of Health and 
                Human Services shall prepare and submit to the 
                appropriate committees of Congress, an annual report on 
                relevant developments concerning the matters referred 
                to in subparagraphs (A) through (F) of paragraph (1).
                    ``(B) Recommendations.--If, with respect to a 
                report submitted under subparagraph (A), the Secretary 
                of Health and Human Services determines that States are 
                not making progress in facilitating the provision of 
                telehealth services across State lines by eliminating 
                unnecessary requirements, adopting reciprocal licensing 
                arrangements for telehealth services, implementing 
                uniform requirements for telehealth licensure, or other 
                means, the Secretary shall include in the report 
                recommendations concerning the scope and nature of 
                Federal actions required to reduce licensure as a 
                barrier to the interstate provision of telehealth 
                services.
            ``(3) Definition of health care provider.--In this 
        subsection, the term ``health care provider'' means any 
        individual who is licensed or certified under State law to 
        provide health care services and is operating within the scope 
        of such license.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

SEC. 205. SENSE OF CONGRESS REGARDING THE PRACTICE OF MEDICINE ACROSS 
              STATE LINES.

    (a) In General.--It is the sense of Congress that States should 
establish a system that facilitates the provision of telehealth 
services across State lines.
    (b) Model.--It is the sense of Congress that the system described 
in subsection (a) should--
            (1) be based on the model developed by the Federation of 
        State Medical Board of the United States, Inc. or the National 
Counsel of State Boards of Nursing; and
            (2) include provisions for--
                    (A) maintaining the confidentiality of medical 
                information, including the prohibition on the 
                disclosure of individually identified information 
                unless prior authorization is provided by the patient; 
                and
                    (B) assuring safeguards are in place to protect the 
                integrity of medical records.

SEC. 206. JOINT WORKING GROUP ON TELEHEALTH.

    (a) In General.--
            (1) Redesignation.--The Joint Working Group on 
        Telemedicine, established by the Secretary of Health and Human 
        Services, shall hereafter be known as the ``Joint Working Group 
        on Telehealth'' with the chairperson being designated by the 
        Office for the Advancement on Telehealth.
            (2) Representation of rural areas.--The Joint Working Group 
        on Telehealth shall ensure that individuals that represent the 
        interests of rural areas are members of the Group.
            (3) Mission.--The mission of the Joint Working Group on 
        Telehealth is--
                    (A) to identify, monitor, and coordinate Federal 
                telehealth projects, data sets, and programs;
                    (B) to analyze--
                            (i) how telehealth systems are expanding 
                        access to health care services, education, and 
                        information;
                            (ii) the clinical, educational, or 
                        administrative efficacy and cost-effectiveness 
                        of telehealth applications; and
                            (iii) the quality of the telehealth 
                        services delivered; and
                    (C) to make further recommendations for 
                coordinating Federal and State efforts to increase 
                access to health services, education, and information 
                in rural and underserved areas.
            (4) Annual reports.--Not later than 2 years after the date 
        of enactment of this Act and each January 1 thereafter the 
        Joint Working Group on Telehealth shall report to Congress on 
        the status of the Group's mission and the state of the 
        telehealth field generally.
    (b) Report Specifics.--The annual report required under subsection 
(a)(3) shall provide--
            (1) an analysis of--
                    (A) the matters described in subsection (a)(3)(B);
                    (B) the Federal activities with respect to 
                telehealth; and
                    (C) the progress of the Joint Working Group on 
                Telehealth's efforts to coordinate Federal telehealth 
                programs; and
            (2) recommendations for a coordinated Federal strategy to 
        increase health care access through telehealth.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for the Joint Working Group on 
Telehealth to carry out this section.

             TITLE III--DEVELOPMENT OF TELEHEALTH NETWORKS

SEC. 301. DEVELOPMENT.

    (a) In General.--The Secretary of Health and Human Services (in 
this title referred to as the ``Secretary''), acting through the 
Director of the Office for the Advancement of Telehealth (of the Health 
Resources and Services Administration), shall provide financial 
assistance (as described in subsection (b)(1)) to recipients (as 
described in subsection (c)(1)) for the purpose of expanding access to 
health care services for individuals in rural and frontier areas 
through the use of telehealth.
    (b) Financial Assistance.--
            (1) In general.--Financial assistance shall consist of 
        grants or cost of money loans, or both.
            (2) Form.--The Secretary shall determine the portion of the 
        financial assistance provided to a recipient that consists of 
        grants and the portion that consists of cost of money loans so 
        as to result in the maximum feasible repayment to the Federal 
        Government of the financial assistance, based on the ability of 
        the recipient to repay and full utilization of funds made 
        available to carry out this title.
            (3) Loan forgiveness program.--
                    (A) Establishment.--With respect to cost of money 
                loans provided under this section, the Secretary shall 
                establish a loan forgiveness program under which 
                recipients of such loans may apply to have all or a 
                portion of such loans forgiven.
                    (B) Requirements.--A recipient described in 
                subparagraph (A) that desires to have a loan forgiven 
                under the program established under such paragraph 
                shall--
                            (i) within 180 days of the end of the loan 
                        cycle, submit an application to the Secretary 
                        requesting forgiveness of the loan involved;
                            (ii) demonstrate that the recipient has a 
                        financial need for such forgiveness;
                            (iii) demonstrate that the recipient has 
                        met the quality and cost-appropriateness 
                        criteria developed under subparagraph (C); and
                            (iv) provide any other information 
                        determined appropriate by the Secretary.
                    (C) Criteria.--As part of the program established 
                under subparagraph (A), the Secretary shall establish 
                criteria for determining the cost-effectiveness and 
quality of programs operated with loans provided under this section.
    (c) Recipients.--
            (1) Application.--To be eligible to receive a grant or loan 
        under this section an entity described in paragraph (2) shall, 
        in consultation with the State office of rural health or other 
        appropriate State entity, prepare and submit to the Secretary 
        an application, at such time, in such manner, and containing 
        such information as the Secretary may require, including--
                    (A) a description of the anticipated need for the 
                grant or loan;
                    (B) a description of the activities which the 
                entity intends to carry out using amounts provided 
                under the grant or loan;
                    (C) a plan for continuing the project after Federal 
                support under this section is ended;
                    (D) a description of the manner in which the 
                activities funded under the grant or loan will meet 
                health care needs of underserved rural populations 
                within the State;
                    (E) a description of how the local community or 
                region to be served by the network or proposed network 
                will be involved in the development and ongoing 
                operations of the network;
                    (F) the source and amount of non-Federal funds the 
                entity would pledge for the project; and
                    (G) a showing of the long-term viability of the 
                project and evidence of health care provider commitment 
                to the network.
        The application should demonstrate the manner in which the 
        project will promote the integration of telehealth in the 
        community so as to avoid redundancy of technology and achieve 
        economies of scale.
            (2) Eligible entities.--An entity described in this 
        paragraph is a hospital or other health care provider in a 
        health care network of community-based health care providers 
        that includes at least--
                    (A) two of the following:
                            (i) community or migrant health centers;
                            (ii) local health departments;
                            (iii) nonprofit hospitals;
                            (iv) private practice health professionals, 
                        including rural health clinics;
                            (v) other publicly funded health or social 
                        services agencies;
                            (vi) skilled nursing facilities;
                            (vii) county mental health and other 
                        publicly funded mental health facilities; and
                            (viii) providers of home health services; 
                        and
                    (B) one of the following, which must demonstrate 
                use of the network for purposes of education and 
                economic development (as required by the Secretary):
                            (i) a public school;
                            (ii) a public library;
                            (iii) a university or college;
                            (iv) a local government entity; or
                            (v) a local nonhealth-related business 
                        entity.
        An eligible entity may include for-profit entities so long as 
        the network grantee is a nonprofit entity.
    (d) Priority.--The Secretary shall establish procedures to 
prioritize financial assistance under this title considering whether or 
not the applicant--
            (1) is a health care provider in a rural health care 
        network or a health care provider that proposes to form such a 
        network, and the majority of the health care providers in such 
        a network are located in a medically underserved, health 
professional shortage area, or mental health professional shortage 
areas;
            (2) can demonstrate broad geographic coverage in the rural 
        areas of the State, or States in which the applicant is 
        located;
            (3) proposes to use Federal funds to develop plans for, or 
        to establish, telehealth systems that will link rural hospitals 
        and rural health care providers to other hospitals, health care 
        providers, and patients;
            (4) will use the amounts provided for a range of health 
        care applications and to promote greater efficiency in the use 
        of health care resources;
            (5) can demonstrate the long-term viability of projects 
        through cost participation (cash or in-kind);
            (6) can demonstrate financial, institutional, and community 
        support for the long-term viability of the network; and
            (7) can demonstrate a detailed plan for coordinating system 
        use by eligible entities so that health care services are given 
        a priority over non-clinical uses.
    (e) Maximum Amount of Assistance to Individual Recipients.--The 
Secretary may establish the maximum amount of financial assistance to 
be made available to an individual recipient for each fiscal year under 
this title, and establish the term of the loan or grant, by publishing 
notice of the maximum amount in the Federal Register.
    (f) Use of Amounts.--
            (1) In general.--Financial assistance provided under this 
        title shall be used--
                    (A) with respect to cost of money loans, to 
                encourage the initial development of rural telehealth 
                networks, expand existing networks, or link existing 
                networks together; and
                    (B) with respect to grants, as described in 
                paragraph (2).
            (2) Grants and loans.--The recipient of a grant or loan 
        under this title may use financial assistance received under 
        such grant or loan for the acquisition of telehealth equipment 
and modifications or improvements of telecommunications facilities 
including--
                    (A) the development and acquisition through lease 
                or purchase of computer hardware and software, audio 
                and video equipment, computer network equipment, 
                interactive equipment, data terminal equipment, and 
                other facilities and equipment that would further the 
                purposes of this section;
                    (B) the provision of technical assistance and 
                instruction for the development and use of such 
                programming equipment or facilities;
                    (C) the development and acquisition of 
                instructional programming;
                    (D) demonstration projects for teaching or training 
                medical students, residents, and other health 
                profession students in rural training sites about the 
                application of telehealth;
                    (E) transmission costs, maintenance of equipment, 
                and compensation of specialists and referring health 
                care providers;
                    (F) development of projects to use telehealth to 
                facilitate collaboration between health care providers;
                    (G) electronic archival of patient records;
                    (H) collection and analysis of usage statistics and 
                data that can be used to document the cost-
                effectiveness of the telehealth services; or
                    (I) such other uses that are consistent with 
                achieving the purposes of this section as approved by 
                the Secretary.
            (3) Expenditures in rural areas.--In awarding a grant or 
        cost of money loan under this section, the Secretary shall 
        ensure that not less than 50 percent of the grant or loan award 
        is expended in a rural area or to provide services to residents 
        of rural areas.
    (g) Prohibited Uses.--Financial assistance received under this 
section may not be used for any of the following:
            (1) To build or acquire real property.
            (2) In the case of the grant program, expenditures to 
        purchase or lease equipment to the extent the expenditures 
        would exceed more than 40 percent of the total grant funds.
            (3) To purchase or install transmission equipment (such as 
        laying cable or telephone lines, microwave towers, satellite 
        dishes, amplifiers, and digital switching equipment).
            (4) For construction, except that such funds may be 
        expended for minor renovations relating to the installation of 
        equipment.
            (5) Expenditures for indirect costs (as determined by the 
        Secretary) to the extent the expenditures would exceed more 
        than 20 percent of the total grant or loan.

SEC. 302. ADMINISTRATION.

    (a) Nonduplication.--The Secretary shall ensure that facilities 
constructed using financial assistance provided under this title do not 
duplicate adequately established telehealth networks.
    (b) Loan Maturity.--The maturities of cost of money loans shall be 
determined by the Secretary, based on the useful life of the facility 
being financed, except that the loan shall not be for a period of more 
than 10 years.
    (c) Loan Security and Feasibility.--The Secretary shall make a cost 
of money loan only if the Secretary determines that the security for 
the loan is reasonably adequate and that the loan will be repaid within 
the period of the loan.
    (d) Coordination With Other Agencies.--The Secretary shall 
coordinate, to the extent practicable, with other Federal and State 
agencies with similar grant or loan programs to pool resources for 
funding meritorious proposals in rural areas.
    (e) Informational Efforts.--The Secretary shall establish and 
implement procedures to carry out informational efforts to advise 
potential end users located in rural areas of each State about the 
program authorized by this title.

SEC. 303. GUIDELINES.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary shall issue guidelines to carry out this title.

SEC. 304. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title, 
$25,000,000 for fiscal year 1999, and such sums as may be necessary for 
each of the fiscal years 2000 through 2005.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. BANK DEDUCTIBILITY OF SMALL, TAX-EXEMPT DEBTS.

    (a) In General.--Section 265(b)(3) of the Internal Revenue Code of 
1986 (relating to exception for certain tax-exempt obligations) is 
amended by adding at the end the following:
                    ``(G) Election to apply limitation on amount of 
                obligations at borrower level.--
                            ``(i) In general.--An issuer, the proceeds 
                        of the obligations of which are to be used to 
                        make or finance eligible loans, may elect to 
                        apply subparagraphs (C) and (D) by treating 
                        each borrower as the issuer of a separate 
                        issue.
                            ``(ii) Eligible loan.--For purposes of this 
                        subparagraph--
                                    ``(I) In general.--The term 
                                `eligible loan' means 1 or more loans 
                                to a qualified borrower the proceeds of 
                                which are used by the borrower for 
                                health care or educational purposes and 
                                the outstanding balance of which in the 
                                aggregate does not exceed $5,000,000.
                                    ``(II) Qualified borrower.--The 
                                term `qualified borrower' means a 
                                borrower which is an organization 
                                described in section 501(c)(3) and 
                                exempt from taxation under section 
                                501(a).
                            ``(iii) Manner of election.--The election 
                        described in clause (i) may be made by an 
                        issuer for any calendar year at any time prior 
                        to its first issuance during such year of 
                        obligations the proceeds of which will be used 
                        to make or finance 1 or more eligible loans.
                            ``(iv) Modification of rule for composite 
                        issues.--In the case of an obligation which is 
                        issued by any issuer which has made the 
                        election described in clause (i), subparagraph 
                        (F) shall be applied without regard to clause 
                        (i) of such subparagraph.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1998.

SEC. 402. ACCESS TO DATA.

    (a) Requirement.--The heads of the agencies described in subsection 
(b) shall negotiate and enter into interagency agreements with agencies 
and offices of the Department of Health and Human Services under which 
such agencies and offices will be provided access to data sets for 
intramural and extramural research conducted or supported by such 
agencies or offices.
    (b) Agency Heads.--The agencies described in this section are the 
following:
            (1) The National Health Service Corps.
            (2) The Centers for Disease Control and Prevention.
            (3) The Agency for Health Care Policy and Research.
            (4) The Bureau of the Census.
    (c) Information.--The information that is to be made available 
under interagency agreements under this section shall include all 
information that is necessary for scholarly and policy research. Such 
information shall be made available in a manner that includes a 
description of the geographic area or location of the individuals who 
are the subject of such information.
    (d) Availability.--Information that is subject to an interagency 
agreement under this section shall be made available to bona fide 
researchers as determined appropriate by the Secretary of Health and 
Human Services.
    (e) Confidentiality.--Each interagency agreement entered into under 
this section shall contain provisions that protect the confidentiality 
of the individuals who are the subjects of such information.
                                 <all>