[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1344 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1344

 To promote and improve access to health care services in rural areas.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 25, 1999

Mr. Nussle (for himself, Mr. McIntyre, Mrs. Emerson, Mr. Stenholm, Mr. 
Bereuter, Mr. Kind, Mr. Moran of Kansas, Mr. Oberstar, Mr. Thornberry, 
     Mr. Stupak, Mr. Hill of Montana, Mr. DeFazio, Mr. Peterson of 
   Pennsylvania, Mr. Hilliard, Mr. Berry, Mr. Herger, Mr. Leach, Mr. 
Latham, Mr. McHugh, Mr. Ney, Mr. Norwood, Mr. Mascara, Mr. Walsh,  Mr. 
   Frost, Mr. Boswell, Mr. Skelton, Mr. Baird, Mr. Faleomavaega, Mr. 
     Phelps, Mr. Barrett of Nebraska, Mr. Boucher, and Mr. Rahall) 
 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 promote and improve 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 ``Triple-A Rural 
Health Improvement Act of 1999''.
    (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

            Subtitle A--Hospital-Related Payment Provisions

Sec. 101. Establishing payment floor for medicare hospital outpatient 
                            prospective payment system.
Sec. 102. Repeal of restriction on medicare payment for certain 
                            hospital discharges to post-acute care.
Sec. 103. Sole community hospitals.
Sec. 104. Critical access hospitals.
Sec. 105. Graduate medical education technical amendments.
Sec. 106. Medicare-dependent, small rural hospitals.
Sec. 107. Geographic reclassification for purposes of DSH payments.
Sec. 108. Revision of guidelines for geographic reclassification by 
                            wage index.
Sec. 109. Hospital geographic reclassification for labor costs for all 
                            items and services reimbursed under 
                            prospective payment systems.
                      Subtitle B--Medicare+Choice

Sec. 111. Payments to Medicare+Choice organizations.
Sec. 112. Repeal of phase out of medicare reasonable cost reimbursement 
                            contracts.
Sec. 113. Medicare+Choice rural demonstration project.
                 Subtitle C--General Payment Provisions

Sec. 121. Direct medicare payment for physician assistants, nurse 
                            practitioners, and clinical nurse 
                            specialists practicing in underserved rural 
                            areas.
Sec. 122. Coverage of qualified mental health professional services 
                            under medicare.
Sec. 123. Medicare waivers for providers in rural areas.
Sec. 124. Safe harbor under the anti-kickback statute for hospital 
                            restocking of certain ambulance drugs and 
                            supplies.
TITLE II--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER 
                          THE MEDICAID PROGRAM

Sec. 201. Continuation of pre-BBA medicaid reimbursement rules for 
                            federally qualified health centers and 
                            rural health clinics.
Sec. 202. Medicaid coverage of physicians' assistants.
  TITLE III--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS 
                    UNDER THE INTERNAL REVENUE CODE

Sec. 301. Exclusion of certain amounts received under the National 
                            Health Service Corps Scholarship Program.
Sec. 302. Issuance of tax-exempt bonds by organizations providing 
                            rescue and emergency medical services.
Sec. 303. Bank deductibility of small, tax-exempt debts.
    TITLE IV--ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF HEALTH 
                      PROFESSIONALS IN RURAL AREAS

Sec. 401. Requirement for rural impact Statements for health care 
                            regulations.
Sec. 402. Health professional shortage areas.
Sec. 403. Access to data.
Sec. 404. Designation of underserved areas under health care contracts 
                            administered by the Office of Personnel 
                            Management.
Sec. 405. Revision of methodology for designation of health 
                            professional shortage areas.
Sec. 406. Sense of Congress regarding the reserve corps of the 
                            commissioned corps of the public health 
                            service.
                         TITLE V--TELEMEDICINE

            Subtitle A--Improvements to the Medicare Program

Sec. 501. Improvement of telehealth services.
Sec. 502. Joint working group on telehealth.
             Subtitle B--Development of Telehealth Networks

Sec. 511. Development.
Sec. 512. Administration.
Sec. 513. Guidelines.
Sec. 514. Authorization of appropriations.

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 51,000,000 Americans live in rural areas, making 
        up approximately 20 percent of the population. Further, 
        22,000,000 rural Americans live in a federally designated 
        Health Professional Shortage Area.
            (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 six 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

            Subtitle A--Hospital-Related Payment Provisions

SEC. 101. ESTABLISHING PAYMENT FLOOR FOR MEDICARE HOSPITAL OUTPATIENT 
              PROSPECTIVE PAYMENT SYSTEM.

    (a) In General.--Section 1833(t)(1) of the Social Security Act (42 
U.S.C. 1395l(t)(1)) is amended--
            (1) in subparagraph (B), by striking ``For purposes of 
        this'' and inserting ``Subject to subparagraph (C), for 
        purposes of this''; and
            (2) by adding at the end the following new subparagraph:
            ``(C) Exclusion for services furnished by small rural 
        providers.--Such term does not include services furnished by 
        any of the following:
                    ``(i) A medicare-dependent, small rural hospital, 
                as defined in section 1886(d)(5)(G)(iv).
                    ``(ii) A critical access hospital, as defined in 
                section 1861(mm)(1).
                    ``(iii) A sole community hospital, as defined in 
                section 1886(d)(5)(D)(iii).''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to payment for covered OPD services furnished on or after January 1, 
2000.

SEC. 102. REPEAL OF RESTRICTION ON MEDICARE PAYMENT FOR CERTAIN 
              HOSPITAL DISCHARGES TO POST-ACUTE CARE.

    (a) In General.--Section 1886(d)(5) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)) is amended--
            (1) in subparagraph (I)(ii), by striking ``not taking in 
        account the effect of subparagraph (J),'', and
            (2) by striking subparagraph (J).
    (b) Effective Date.--The amendments made by subsection (a) apply to 
discharges occurring on or after January 1, 2000.

SEC. 103. SOLE COMMUNITY HOSPITALS.

    (a) In General.--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 new clause:
    ``(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 cost reporting 
periods beginning 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 1997, 1998, and 1999,
if such substitution results in an increase in the target amount for 
the hospital.''.
    (b) Eligibility for Geographic Reclassification Without Regard to 
Wage Index Threshold.--
            (1) In general.--Section 1886(d)(10)(D)(iii) of such Act 
        (42 U.S.C. 1395ww(d)(10)(D)(iii)) is amended by inserting ``or 
        a sole community hospital under paragraph (5)(D)'' after ``a 
        rural referral center under paragraph (5)(C)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on January 1, 2000, and apply with respect to 
        applications submitted for geographic reclassification for cost 
        reporting periods beginning on or after such date.

SEC. 104. CRITICAL ACCESS HOSPITALS.

    (a) Conversion of Recently Closed Hospitals to Critical Access 
Hospitals.--
            (1) 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 new subparagraph:
                    ``(C) Recently closed facilities.--A State may 
                designate a facility as a critical access hospital if 
                the facility--
                            ``(i) within the 3-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).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of enactment of this Act.
    (b) All-Inclusive Payment Option for Outpatient Critical Access 
Hospital Services.--
            (1) 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 the amount determined under one of the two 
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.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the enactment of the 
        Balanced Budget Act of 1997.
    (c) Eligibility for Payments Under the Medicaid Program.--
            (1) In general.--Section 1905(a) of the Social Security Act 
        (42 U.S.C. 1396d(a)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (26);
                    (B) by redesignating paragraph (27) as paragraph 
                (28); and
                    (C) by inserting after paragraph (26) the following 
                new paragraph:
            ``(27) services furnished by a critical access hospital (as 
        defined section 1861(mm)(1); and''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply with respect to items and services furnished on or after 
        January 1, 2000.
    (d) Accreditation.--The last sentence of section 1861(e) of such 
Act (42 U.S.C. 1395x(e)) is amended to read as follows:
``The term `hospital' does not include a critical access hospital (as 
defined in section 1861(mm)(1)), unless the context otherwise requires, 
or unless a critical access hospital applies for accreditation by the 
Joint Commission on Accreditation of Hospitals.''.

SEC. 105. GRADUATE MEDICAL EDUCATION TECHNICAL AMENDMENTS.

    (a) Indirect Graduate Medical Education Adjustment.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)) is amended to read 
        as follows:
            ``(v)(I) In determining the adjustment with respect to a 
        hospital that sponsors more than one allopathic or osteopathic 
        residency training program for discharges occurring on or after 
        October 1, 1997, the total number of full-time equivalent 
        interns and residents in the fields of allopathic and 
        osteopathic medicine in either a hospital or nonhospital 
        setting may not exceed the number of such full-time equivalent 
        interns and residents who participated, or who but for an 
        approved leave would have participated, in the hospital's 
        approved medical residency training programs for the hospital's 
        most recent cost reporting period ending on or before December 
        31, 1996.
            ``(II) In determining the adjustment with respect to a 
        hospital that sponsors only one allopathic or osteopathic 
        residency program for discharges occurring on or after October 
        1, 1997, the total number of full-time equivalent interns and 
        residents in the fields of allopathic and osteopathic medicine 
        who participated, or who but for an approved leave would have 
        participated, in the hospital's medical residency training 
        program may be increased by not more than one for any calendar 
        year, and may not exceed a total of three more than the number 
        appointed in either a hospital or nonhospital setting for the 
        hospital's most recent cost reporting period ending on or 
        before December 31, 1996.''.
            (2) Technical amendments.--Section 1886(d)(5)(B) of such 
        Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by moving clauses 
        (ii) and (vi) two ems to the left.
    (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)) is amended by inserting ``who participated, or 
        who but for an approved leave would have participated, in the 
        hospital's medical residency training programs'' after ``may 
        not exceed the number of such full-time equivalent residents''.
            (2) Funding.--
                    (A) New programs.--The first sentence of section 
                1886(h)(4)(H)(i) of such Act (42 U.S.C. 
                1935ww(h)(4)(H)(i)) is amended by inserting ``and 
                before September 30, 1999'' after ``January 1, 1995''.
                    (B) Programs meeting rural needs.--The second 
                sentence of such section 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 
                approved medical residency training programs in such an 
                area.''.
    (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) Rebasing for Discharges During the Most Current Audited Fiscal 
Year.--Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)(D) is amended--
            (1) in the second sentence, by striking ``beginning during 
        fiscal year 1987'' and inserting ``ending during fiscal year 
        1998''; and
            (2) by adding at the end the following new sentence: ``An 
        increase in the target amount by reason of the previous 
        sentence shall have no effect on the classification of a 
        hospital as a medicare-dependent, small rural hospital.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to discharges occurring on or after October 1, 1999.

SEC. 107. GEOGRAPHIC RECLASSIFICATION FOR PURPOSES OF DSH PAYMENTS.

    (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''; and
            (3) by adding at the end the following new subclause:
            ``(III) eligibility for and amount of additional payments 
        under paragraph (5)(F).
In the case of a hospital with an application approved under subclause 
(I) to change the hospital's geographic classification for a fiscal 
year, such change in the hospital's geographic classification for that 
fiscal year shall apply to such hospital for purposes of subclause 
(III).''.
    (b) Applicable Guidelines.--Section 1886(d)(10)(D) of such Act (42 
U.S.C. 1395ww(d)(10)(D)) is amended--
            (1) in clause (i), by adding at the end the following new 
        subclause:
            ``(V) Guidelines for considering applications under 
        subparagraph (C)(i)(III) of determining eligibility for and 
        amount of additional payments under paragraph (5)(F).'';
            (2) by redesignating clause (iv) as clause (v);
            (3) by inserting after clause (iii) the following new 
        clause:
    ``(iv) Under the guidelines published by the Secretary under clause 
(i)(V), the Board shall not reject an application to change a 
hospital's geographic classification under subparagraph (C)(i)(I) 
because the change in the hospital's geographic classification for that 
fiscal year does not result in an increase in the average standardized 
amount for that hospital.''; and
            (4) in clause (v), as so redesignated by paragraph (2)--
                    (A) by inserting ``(I)'' after ``(v)'';
                    (B) by striking ``The'' and inserting ``Except as 
                provided in subclause (II), the''; and
                    (C) by adding at the end the following new 
                subclause:
    ``(II) The Secretary shall publish the guidelines described in 
subclause (V) of clause (i) by January 1, 2000.''.
    (c) Effective Date.--The amendments made by subsection (a) take 
effect on January 1, 2000, and apply with respect to applications for 
geographic reclassification submitted for cost reporting periods 
beginning on or after such date.

SEC. 108. REVISION OF GUIDELINES FOR GEOGRAPHIC RECLASSIFICATION BY 
              WAGE INDEX.

    (a) Average Hourly Wage Weighted for Occupational Mix.--Section 
1886(d)(10)(D)(i)(I) of the Social Security Act (42 U.S.C. 
1395ww(d)(10)(D)(i)(I)) is amended to read as follows:
            ``(I) Guidelines for comparing a hospital's average hourly 
        wage to the average hourly wage of hospitals in the area in 
        which the hospital is classified, guidelines for comparing a 
        hospital's average hourly wage to the average hourly wage of 
        hospitals in the area in which the hospital is applying to be 
        classified, and guidelines for comparing a hospital's average 
        hourly wage adjusted by the occupational mix of the area in 
        which the hospital is applying to be classified to the average 
        hourly wage of hospitals in such area.''.
    (b) Data Collection Requirement.--Section 1886(d)(10)(D) of such 
Act (42 U.S.C. 1395ww(d)(10)(D)), as amended by section 107(b), is 
further amended--
            (1) by redesignating clause (v) as clause (vi);
            (2) by inserting after clause (iv) the following new 
        clause:
    ``(v) For purposes of considering an application under subparagraph 
(C)(i)(II), the Secretary shall collect and update every three years 
such information as is necessary to compare a hospital's wages weighted 
by the occupational mix of hospitals in the area in which the hospital 
is applying to be classified, or the Board shall, in considering such 
an application, apply the most current available information with 
respect to such wages collected by the American Hospital 
Association.''; and
            (3) in clause (vi), as so redesignated by paragraph (1), by 
        inserting ``subclause (I), as amended by the Triple-A Rural 
        Health Improvement Act of 1999, and'' before ``subclause (III) 
        of clause (i) by January 1, 2000.''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
take effect on January 1, 2000, and apply with respect to applications 
for geographic reclassification for cost reporting periods beginning on 
or after such date.
    (d) Report to Congress.--Not later than one year after the date of 
the enactment of this Act, the Secretary shall submit to Congress a 
report describing revised methodology to compute hospital wage indices, 
for purposes of adjustments in payment amounts to hospitals under the 
medicare program, that reflect legitimate differences in hospital wage 
rates by area, but that do not rely on average per employee 
expenditures.
    (e) Sense of Congress.--It is the Sense of the Congress that the 
adjustment in payment amounts to hospitals under the medicare program 
to reflect variations in the costs of wages and wage-related costs of 
hospitals, under section 1886(d)(3)(E) of the Social Security Act (42 
U.S.C. 1395ww(d)(3)(E)), should only be used with respect to payments 
made on a prospective basis to such hospitals for inpatient hospital 
services. Such adjustment should not be applied to payment amounts for 
any other item or service reimbursed under the medicare program.

SEC. 109. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS FOR ALL 
              ITEMS AND SERVICES REIMBURSED UNDER PROSPECTIVE PAYMENT 
              SYSTEMS.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww) is amended by adding at the end the following new subsection:
    ``(l) Application of Hospital Geographic Reclassification for 
Inpatient Services to All Hospital Furnished Items and Services 
Reimbursed Under Prospective Payment System.--
            ``(1) In general.--In the case of a hospital with an 
        application to the Medicare Geographic Classification Review 
        Board under subsection (d)(10)(C) to change the hospital's 
        geographic classification for a fiscal year for purposes of the 
        factor used to adjust the DRG prospective payment rate for area 
        differences in hospital wage levels that applies to such 
        hospital under subsection (d)(3)(E) that has been approved, the 
        change in the hospital's geographic classification for such 
        purposes shall apply for purposes of adjustments to payments 
        for variations in costs which are attributable to wages and 
        wage-related costs for all pps-reimbursed items and services.
            ``(2) PPS-reimbursed items and services defined.--For 
        purposes of paragraph (1), the term `pps-reimbursed items and 
        services' means, for cost reporting periods beginning during 
        the fiscal year for which such change has been approved, items 
        and services furnished by the hospital, or by an entity or 
        department of the hospital which is provider-based (as 
        determined by the Secretary), for which payments--
                    ``(A) are made under this title on a prospective 
                basis; and
                    ``(B) are adjusted for variations in costs which 
                are attributable to wages and wage-related costs.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to items and services furnished on or after January 1, 2000.

                      Subtitle B--Medicare+Choice

SEC. 111. 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. 112. REPEAL OF PHASE OUT OF CERTAIN MEDICARE REASONABLE COST 
              REIMBURSEMENT CONTRACTS.

    Section 1876(h)(5) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)) is amended--
            (1) by striking ``(5)(A)'' and inserting ``(5)''; and
            (2) by striking subparagraph (B).

SEC. 113. MEDICARE+CHOICE RURAL DEMONSTRATION PROJECT.

    (a) Establishment of Project.--For purposes of expanding and 
improving the quality of items and services furnished under the 
medicare program to medicare beneficiaries residing in rural and 
frontier areas, the Secretary of Health and Human Services (in this 
section referred to as the ``Secretary'') shall conduct demonstration 
projects under which the Secretary shall establish, and provide for 
payment for such items and services to, provider-sponsored 
organizations and other managed care entities that are based in rural 
and frontier areas.
    (b) Requirement of Rural and Frontier Areas.--The Secretary shall 
designate areas in which projects under this section shall be 
conducted. Such projects may only be conducted in rural or frontier 
areas, as defined under title XVIII of the Social Security Act and 
under regulations promulgated thereunder.
    (c) Project Implementation.--
            (1) In general.--The Secretary shall establish a benefit 
        design, and establish payment amounts for items and services 
        furnished by such provider-sponsored organizations and managed 
        care entities to medicare beneficiaries.
            (2) Data collection.--The Secretary shall provide for the 
        collection of information (including information concerning 
        quality and access to care), for purposes of evaluating the 
        results of the project.
    (d) Report to Congress.--
            (1) In general.--Not later than two years after the 
        Secretary implements the demonstration projects under this 
        section, and annually thereafter, the Secretary shall submit to 
        Congress a report regarding such demonstration projects.
            (2) Contents of report.--The report in paragraph (1) shall 
        include the following:
                    (A) A description of the demonstration projects 
                conducted under this section.
                    (B) An evaluation of--
                            (i) the viability of such provider-
                        sponsored organizations and managed care 
                        entities operating in rural and frontier areas;
                            (ii) the quality of the health care 
                        services provided to medicare beneficiaries 
                        residing in such areas under the demonstration 
                        projects; and
                            (iii) beneficiary and health care provider 
                        satisfaction under the demonstration project.
                    (C) Any other information regarding the 
                demonstration projects conducted under this section 
                that the Secretary determines to be appropriate.
    (e) Waiver Authority.--The Secretary of Health and Human Services 
may waive such requirements of title XVIII of the Social Security Act 
(as amended by this Act) as may be necessary for the purposes of 
carrying out the project.

                 Subtitle C--General Payment Provisions

SEC. 121. DIRECT MEDICARE PAYMENT FOR PHYSICIAN ASSISTANTS, NURSE 
              PRACTITIONERS, AND CLINICAL NURSE SPECIALISTS PRACTICING 
              IN UNDERSERVED RURAL AREAS.

(a) In General.--Section 1833(a)(1)(O) of the Social Security Act (42 
U.S.C. 1395l(a)(1)(O)) is amended--
            (1) by inserting ``(or 100 percent in the case of services 
        furnished in an underserved rural area)'' after ``85 percent'' 
        the first place it appears.
    (b) Direct Reimbursement.--Section 1842(b)(6)(C) of such Act (42 
U.S.C. 1395u(b)(6)(C)) is amended--
            (1) by striking ``clause (i) of'';
            (2) by inserting ``, nurse practitioner, or clinical nurse 
        specialist'' after ``physician assistant'' the first place it 
        appears; and
            (3) by amending clause (ii) to read as follows: ``(ii) with 
        respect to a physician assistant, nurse practitioner, or 
        clinical nurse specialist who is providing services in an 
        underserved rural area, payment may be made directly to the 
        assistant, practitioner, or specialist;''.
    (c) Effective Date.--The amendments made by this section apply to 
services furnished on or after January 1, 2000.

SEC. 122. 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)) 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 new subparagraph:
            ``(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)) 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) is amended by adding at the end the following new 
subsection:

            ``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 
is licensed as a mental health professional for the diagnosis and 
treatment of mental illnesses by the State (or under a State regulatory 
mechanism provided by State law) in which the individual furnishes 
qualified mental health professional services.''.
    (d) Effective Date.--The amendments made by this section apply to 
services furnished on or after January 1, 2000.

SEC. 123. 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 days after the date 
of the enactment of this Act, the Secretary of Health and Human 
Services shall establish a waiver process under 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;
            (2) outside of an urbanized area, as defined by the United 
        States Census Bureau; or
            (3) an area designated by a State as a rural area.

SEC. 124. SAFE HARBOR UNDER THE ANTI-KICKBACK STATUTE FOR HOSPITAL 
              RESTOCKING OF CERTAIN AMBULANCE DRUGS AND SUPPLIES.

    (a) In General.--Section 1128B(b)(3) of the Social Security Act (42 
U.S.C. 1320a-7b(b)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(G) any remuneration from a hospital to an ambulance 
        provider if--
                    ``(i) the ambulance provider is owned or operated 
                (I) by a State or local government agency or (II) by an 
                organization that is described in paragraph (3) or (4) 
                of section 501(c) of the Internal Revenue Code of 1986 
                and that is exempt from taxation under section 501(a) 
                of such Code;
                    ``(ii) the remuneration is in the form of the 
                replenishment of drugs or supplies, or both, used by 
                the ambulance provider during the transport of a 
                patient to the hospital; and
                    ``(iii) the remuneration is not determined in a 
                manner that takes into account the volume or value of 
                any referrals or business otherwise generated between 
                the parties for which payment may be made in whole or 
                part under a Federal health care program.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to remuneration provided on or after the date of the enactment of 
this Act.

TITLE II--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER 
                          THE MEDICAID PROGRAM

SEC. 201. CONTINUATION OF PRE-BBA MEDICAID REIMBURSEMENT RULES FOR 
              FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH 
              CLINICS.

    (a) Elimination of Phase-Out of Payment Based on Reasonable Cost.--
Section 1902(a)(13)(C) of the Social Security Act (42 U.S.C. 
1396a(a)(13)(C)) is amended by striking ``(or 95 percent'' and all that 
follows through ``70 percent for services furnished during fiscal year 
2003)''.
    (b) Elimination of Transitional Supplemental Payment for Services 
Furnished Under Certain Managed Care Contracts.--
            (1) In general.--Section 1902(a)(13)(C) of such Act (42 
        U.S.C. 1396a(a)(13)(C)) is further amended--
                    (A) by striking ``(C)(i)'' and inserting ``(C); and
                    (B) by striking ``and (ii)'' and all that follows 
                up to the semicolon at the end.
            (2) Conforming amendment to managed care contract 
        requirement.--Clause (ix) of section 1903(m)(2)(A) of such Act 
        (42 U.S.C. 1396b(m)(2)(A)) is amended to read as follows:
            ``(ix) such contract provides, in the case of an entity 
        that has entered into a contract for the provision of services 
        with a Federally-qualified health center or a rural health 
        clinic, that (I) rates of prepayment from the State are 
        adjusted to reflect fully the rates of payment specified in 
        section 1902(a)(13)(C), and (II) at the election of such center 
        or clinic, payments made by the entity to such center or clinic 
        for services described in section 1905(a)(2)(C) are made at the 
        rates of payment specified in section 1902(a)(13)(C);''.
            (3) Elimination of repeal.--Section 4712(c) of the Balanced 
        Budget Act of 1997 is repealed and the provisions of the Social 
        Security Act shall be implemented as through such section had 
        never been enacted.
    (d) Effective Date.--The amendments made by subsections (a) and (b) 
apply to services furnished on or after January 1, 2000.

SEC. 202. MEDICAID COVERAGE OF PHYSICIANS' ASSISTANTS.

    (a) In General.--Section 1905(a)(5)(A) of the Social Security Act 
(42 U.S.C. 1396d(a)(5)(A)) is amended by inserting ``and services which 
would be physicians' services if furnished by such a physician and 
which are performed by a physician assistant or a nurse practitioner 
(as defined in section 1861(aa)(5)(A)) under the supervision of a 
physician (as so defined) and which the physician assistant or the 
nurse practitioner is legally authorized to perform by the State in 
which the services are performed'' after ``section 1861(r)(1))''.
    (b) Effective Date.--(1) Except as provided in paragraph (2), the 
amendment made by subsection (a) shall apply to services furnished on 
or after January 1, 2000, without regard to whether or not final 
regulations to carry out such amendment have been promulgated by such 
date.
    (2) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirement imposed by the amendment made by subsection (a), the State 
plan shall not be regarded as failing to comply with the requirements 
of such title solely on the basis of its failure to meet this 
additional requirement before the first day of the first calendar 
quarter beginning after the close of the first regular session of the 
State legislature that begins after the date of the enactment of this 
Act. For purposes of the previous sentence, in the case of a State that 
has a 2-year legislative session, each year of such session shall be 
deemed to be a separate regular session of the State legislature.

  TITLE III--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS 
                    UNDER THE INTERNAL REVENUE CODE

SEC. 301. 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, 
1999.

SEC. 302. ISSUANCE OF TAX-EXEMPT BONDS BY ORGANIZATIONS PROVIDING 
              RESCUE AND EMERGENCY MEDICAL SERVICES.

    (a) General Rule.--Subsection (e) of section 150 of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(e) Bonds of Certain Volunteer Fire Departments or Emergency 
Service Organizations.--For purposes of this part and section 103--
            ``(1) In general.--A bond of a volunteer fire or other 
        emergency services organization shall be treated as a bond of a 
        political subdivision of a State if--
                    ``(A) such organization is a qualified volunteer 
                fire or other emergency services organization with 
                respect to an area within the jurisdiction of such 
                political subdivision, and
                    ``(B) such bond is issued as part of an issue 95 
                percent or more of the net proceeds of which are to be 
                used for the acquisition, construction, reconstruction, 
                or improvement of--
                            ``(i) a firehouse or other building used or 
                        to be used by such organization in providing 
                        qualified services (including land which is 
                        functionally related and subordinate thereto), 
                        or
                            ``(ii) a firetruck, ambulance, or other 
                        vehicle used or to be used by such organization 
                        in providing qualified services.
            ``(2) Qualified volunteer fire or other emergency services 
        organization.--For purposes of this subsection, the term 
        `qualified volunteer fire or other emergency services 
        organization' means, with respect to a political subdivision of 
        a State, any organization--
                    ``(A) which is organized and operated to provide 
                qualified services for persons in an area (within the 
                jurisdiction of such political subdivision) which is 
                not provided with any other qualified services of the 
                type provided by such organization, and
                    ``(B) which is required (by written agreement) by 
                the political subdivision to furnish qualified services 
                in such area.
        For purposes of subparagraph (A), other qualified services 
        provided in an area shall be disregarded in determining whether 
        an organization is a qualified volunteer fire or other 
        emergency services organization if such other qualified 
        services are provided by a qualified volunteer fire or other 
        emergency services organization (determined with the 
        application of this sentence) and such organization and the 
        provider of such other services have been continuously 
        providing qualified services to such area since January 1, 
        1997.
            ``(3) Treatment as private activity bonds only for certain 
        purposes.--Bonds which are part of an issue which meets the 
        requirements of paragraph (1) shall not be treated as private 
        activity bonds except for purposes of sections 147(f) and 
        149(d).
            ``(4) Qualified services.--For purposes of this subsection, 
        the term `qualified services' means any firefighting, rescue, 
        or emergency medical services.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to obligations issued on or after January 1, 2000.

SEC. 303. 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 one 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 one 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, 1999.

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

SEC. 401. REQUIREMENT FOR RURAL IMPACT STATEMENTS FOR HEALTH CARE 
              REGULATIONS.

    (a) In General.--Whenever the Secretary of Health and Human 
Services promulgates a regulation (or proposed regulation) relating to 
a health care program, including the medicare or medicaid programs, the 
Secretary shall include with the promulgation of the regulation an 
analysis of the likely impact of the implementation of the regulation 
on rural areas, including its impact on--
            (1) rural safety net providers;
            (2) rural primary care providers;
            (3) rural hospitals;
            (4) Federally qualified health centers and rural health 
        clinics;
            (5) the economies in rural areas; and
            (6) rural residents.
    (b) Effective Date.--Subsection (a) shall apply to regulations 
promulgated on or after the date of the enactment of this Act.

SEC. 402. 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 six or fewer residents per square mile),''; and
            (2) by adding at the end of subsection (c), the following 
        new paragraph:
            ``(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. 403. 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.

SEC. 404. 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. 405. REVISION OF METHODOLOGY FOR DESIGNATION OF HEALTH 
              PROFESSIONAL SHORTAGE AREAS.

    (a) Revision of Methodology.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish, on an expedited basis and using a negotiated 
        rulemaking process under subchapter III of chapter 5 of title 
        5, United States Code, revised standards for the designation of 
        a health professional shortage area under section 332(a)(1) of 
        the Public Health Service Act (42 U.S.C. 254e(a)(1)).
            (2) Considerations.--In developing standards under 
        subsection (a), the Secretary shall--
                    (A) promote the needs of medically underserved 
                populations (as defined in section 330(b)(3) of the 
                Public Health Service Act (42 U.S.C. 254c(b)(3))) and 
                the needs of individuals residing in health 
                professional shortage areas located in rural, frontier, 
                and urban areas; and
                    (B) consider the percentage of population over the 
                age of 65 years residing in such health professional 
                shortage areas.
    (b) Development of Definition of Frontier.--For purposes of 
subsection (a) and for purposes of payment under title XVIII of the 
Social Security Act, the Secretary of Health and Human Services shall, 
by regulation, define the term ``frontier''. Such definition shall take 
into account population density and distance in miles, and time in 
minutes, to the nearest medical facility.

SEC. 406. SENSE OF CONGRESS REGARDING THE RESERVE CORPS OF THE 
              COMMISSIONED CORPS OF THE PUBLIC HEALTH SERVICE.

    (a) Findings.--Congress makes the following findings:
            (1) Improving the Reserve Corps of the Commissioned Corps 
        of the Public Health Service would significantly enhance access 
        to quality health care in rural areas.
            (2) Use of inactive members of the Reserve Corps to fill 
        vacancies in staffing of health care providers under the Public 
        Health Service Act is an effective and cost efficient manner of 
        providing increased and improved health care services in rural 
        areas and to Public Health Service agencies.
            (3) The use of inactive members of the Reserve Corps to 
        fill such vacancies is impeded because of an inability to 
        identify such members.
            (4) Better overall management of the Reserve Corps may save 
        several million dollars annually.
    (b) Sense of Congress.--It is the sense on Congress that the 
Secretary of Health and Human Services should establish within the 
Public Health Service of the Department of Health and Human Services an 
Office of Reserve Corps Coordination for the Commissioned Corps of the 
Public Health Service. Such Office should oversee the management of the 
Reserve Corps and take such steps as are necessary, including using 
inactive members to fill temporary vacancies in staffing of health care 
providers under the Public Health Service Act, to efficiently utilize 
the Reserve Corps to increase and improve health care services 
furnished in rural areas.

                         TITLE V--TELEMEDICINE

            Subtitle A--Improvements to the Medicare Program

SEC. 501. IMPROVEMENT OF TELEHEALTH SERVICES.

    (a) Medicare Coverage of Telehealth Services.--
            (1) All services furnished under medicare.--Section 4206(a) 
        of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is 
        amended by striking ``furnishing a service for which payment 
        may be made under such part'' and inserting ``furnishing a 
        service for which payment may be made under such title''.
            (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 new sentence: ``For purposes of 
        the preceding sentence, the term `practitioner' shall include 
        physical, occupational, and speech therapists.''.
            (3) Telehealth consultation using store and forward 
        technology.--Section 4206(a) of the Balanced Budget Act of 1997 
        (42 U.S.C. 1395l note), as amended by paragraph (2), is further 
        amended by adding at the end the following new sentence: 
        ``Payment shall also be made under this section for 
        professional consultations utilizing technology that provides 
        for the asynchronous transmission of health care information, 
        in single or multimedia formats, for the objective of any or 
        all of the following:
            (1) Medical diagnosis.
            (2) Medical treatment.
            (3) Medical education.''.
    (b) Medicare Reimbursement for Telehealth Services in All Rural 
Areas.--Section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 
1395l note) is amended--
            (1) in subsection (a), 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''; and
            (2) in subsection (d), by striking ``who does not reside in 
        a rural area (as so defined) 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 ``who resides in a county in a rural area (as so 
        defined) or a county that is not otherwise included in a 
        Metropolitan Statistical Area''.
    (c) Permitting Presentation of Patient by Health Care Providers.--
Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
note), as amended by subsection (a), is further amended--
            (1) by inserting ``(1)'' after ``(a) In General.--''; and
            (2) by adding at the end the following new paragraph:
    ``(2)(A) In the case of telehomecare (as described in subparagraph 
(D)) a registered nurse, acting under the directions of a physician or 
practitioner, may present the beneficiary for the professional 
consultation. In the case of such a presentation the presence of a 
referring or consulting physician or practitioner is not required.
    ``(B) Telehomecare may be furnished in areas other than in rural 
areas.
    ``(C) In this section, the term ``registered nurse'' means a 
registered nurse who is licensed to practice nursing in the State in 
which the professional consultation is performed and is operating 
within the scope of such license.
    ``(D) For purposes of subparagraph (A), telehomecare consists of 
certain home health services furnished using a electronic device 
capable of two-way audio and video transmissions, and capable of 
monitoring and transmitting vital statistics of a patient, including 
measuring blood pressure and temperature of a patient.''.
    (d) Revision of Payment Methodology.--Section 4206(b) of the 
Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended--
            (1) by redesignating paragraphs (1), (2), (3), and (4) as 
        subparagraphs (A), (B), (C), and (D), respectively;
            (2) by inserting ``(1)'' before ``Taking into account'';
            (3) in subparagraph (A), as so redesignated, to read as 
        follows:
            ``(A) The payment shall be made under a fee schedule 
        established by the Secretary that provides for payment for the 
        referring physician or practitioner and for 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. The amount of the payment to the 
        physicians or practitioners shall not be greater than the 
        current fee schedule of such consulting physician or 
        practitioner for the health care services provided.'';
            (2) in subparagraph (B), to read as follows:
            ``(B) The payment shall include payment to a provider of 
        services for the costs associated with professional 
        consultation via telecommunications systems. Such costs shall 
        include facility fees, costs of maintenance of telehealth 
        equipment and of telecommunications facilities, and costs of 
        staff incurred in furnishing such professional consultations. 
        In no case may a beneficiary be billed for any such charges or 
        fees.''; and
            (3) by adding at the end the following new paragraphs:
    ``(2) The Secretary shall permit the imposition of beneficiary cost 
sharing in the form of a copayment, not to exceed $15 per visit. In the 
case of any copayment imposed under the preceding sentence, the 
Secretary shall require the provision of notice to the individual 
requesting such services prior to the furnishing of such services.
    ``(3) The Secretary shall establish a separate code (or codes) for 
purposes of claims for payment for items and services furnished under 
this section.''.
    (e) Reports to Congress.--Section 4206 of the Balanced Budget Act 
of 1997 (42 U.S.C. 1395l note) is amended by adding at the end the 
following new subsection:
    ``(e) 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 three 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.
    (f) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

SEC. 502. 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 two 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.

             Subtitle B--Development of Telehealth Networks

SEC. 511. DEVELOPMENT.

    (a) In General.--The Secretary of Health and Human Services (in 
this subtitle 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 subtitle.
            (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 subtitle 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 subtitle, 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 
        subtitle 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 subtitle 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. 512. ADMINISTRATION.

    (a) Nonduplication.--The Secretary shall ensure that facilities 
constructed using financial assistance provided under this subtitle 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 subtitle.

SEC. 513. GUIDELINES.

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

SEC. 514. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this subtitle, 
$25,000,000 for fiscal year 2000, and such sums as may be necessary for 
each of the fiscal years 2001 through 2006.
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