[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 770 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 770

  To provide reimbursement under the medicare program for telehealth 
                   services, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 13, 1999

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

_______________________________________________________________________

                                 A BILL


 
  To provide reimbursement under the medicare program for telehealth 
                   services, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Comprehensive 
Telehealth 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 and purposes.
Sec. 3. Definitions.
   TITLE I--REVISION AND CLARIFICATION OF MEDICARE REIMBURSEMENT OF 
                          TELEHEALTH SERVICES

Sec. 101. Revision and clarification of medicare reimbursement of 
                            telehealth services.
                     TITLE II--TELEHEALTH LICENSURE

Sec. 201. Study and reports to Congress.
 TITLE III--JOINT WORKING GROUP ON TELEHEALTH AND PERIODIC REPORTS TO 
                                CONGRESS

Sec. 301. Joint Working Group on Telehealth.
              TITLE IV--DEVELOPMENT OF TELEHEALTH NETWORKS

             Subtitle A--Development of Telehealth Networks

Sec. 401. Financial assistance authorized.
Sec. 402. Financial assistance described.
Sec. 403. Eligible telehealth networks.
Sec. 404. Use of financial assistance.
Sec. 405. Application.
Sec. 406. Approval of application.
Sec. 407. Administration.
Sec. 408. Regulations.
Sec. 409. Authorization of appropriations.
Subtitle B--Rural Health Outreach and Network Development Grant Program

Sec. 415. Rural Health Outreach and Network Development Grant Program.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Hospitals, clinics, and individual health care 
        providers are critically important to the continuing health of 
        rural populations and the economic stability of rural 
        communities.
            (2) Rural communities are underserved by specialty health 
        care providers.
            (3) Telecommunications technology has made possible the 
        interstate transmission of information regarding a wide range 
        of health care services, education, and administrative services 
        between health care providers, patients, and administrators.
            (4) The delivery of health services by licensed health care 
        providers is a privilege and the licensure of health care 
        providers, along with the ability to discipline such providers, 
        is in the public interest and necessary to protect the health, 
        welfare, and safety of the public.
            (5) The licensing of health care providers that provide 
        telehealth services has a significant impact on interstate 
        commerce and any unnecessary barriers to the provision of 
        telehealth services across State lines should be eliminated.
            (6) Rapid advances in the field of telehealth create a need 
        for current information and updates on recent developments in 
        telehealth research, policy, technology, and the use of this 
        technology to supply telehealth services to rural and 
        underserved areas.
            (7) Telehealth networks can--
                    (A) provide hospitals, clinics, health care 
                providers, and patients in rural and underserved 
                communities with access to specialty care and 
                continuing education; and
                    (B) reduce the isolation from other professionals 
                that these individuals and entities sometimes 
                experience.
            (8) In order for telehealth systems to fully benefit rural 
        and underserved communities, the program established by section 
        4206 of the Balanced Budget Act of 1997 that reimburses 
        providers of telehealth services under the medicare program 
        must reimburse providers of services in all rural areas for all 
        items and services provided to beneficiaries under the medicare 
        program.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To ensure that the program established by section 4206 
        of the Balanced Budget Act of 1997 that provides for 
        reimbursement of telehealth services under the medicare program 
        reimburses beneficiaries in all rural areas--
                    (A) for all items and services provided under the 
                medicare program; and
                    (B) for telehealth services.
            (2) To determine whether States are making progress in 
        facilitating the provision of interstate telehealth services.
            (3) To create a coordinating entity for Federal telehealth 
        research, policy, and program initiatives that annually reports 
        to Congress.
            (4) To encourage the development of rural telehealth 
        networks that supply appropriate, cost-effective care, and that 
        contribute to the economic health and development of rural 
        communities.
            (5) To encourage research into the clinical efficacy and 
        cost-effectiveness of telehealth diagnosis, treatment, or 
        education on individuals, health care providers, and health 
        care networks.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Health care provider.--The term ``health care 
        provider'' means any individual or entity licensed or certified 
        under State law to provide health care services that is 
        operating within the scope of such license.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

   TITLE I--REVISION AND CLARIFICATION OF MEDICARE REIMBURSEMENT OF 
                          TELEHEALTH SERVICES

SEC. 101. REVISION AND CLARIFICATION OF MEDICARE REIMBURSEMENT OF 
              TELEHEALTH SERVICES.

    (a) In General.--Section 4206(a) of the Balanced Budget Act of 1997 
(42 U.S.C. 1395l note) is amended to read as follows:
    ``(a) Reimbursement of Telehealth Services Authorized.--
            ``(1) In general.--Beginning on the date of enactment of 
        the Comprehensive Telehealth Act of 1999 and subject to 
        paragraph (3), the Secretary of Health and Human Services shall 
        make payments from the Federal Supplementary Medical Insurance 
        Trust Fund under part B of title XVIII of the Social Security 
        Act (42 U.S.C. 1395j et seq.) in accordance with the 
        methodology described in subsection (b) for items and services 
        for which payment may be made under such part that are provided 
        via telecommunications systems including store-and-forward 
        technologies (as defined in paragraph (2)) by a physician (as 
        defined in section 1861(r) of such Act (42 U.S.C. 1395x(r))) or 
        a practitioner (as defined in paragraph (2)) to a beneficiary 
        under the medicare program residing in a county in a rural area 
        (as defined in section 1886(d)(2)(D) of such Act (42 U.S.C. 
        1395ww(d)(2)(D))) notwithstanding that the physician or 
        practitioner providing the item or service via 
        telecommunication systems is not at the same location as the 
        medicare beneficiary.
            ``(2) Definitions.--
                    ``(A) Practitioner.--For purposes of paragraph (1), 
                the term `practitioner' includes--
                            ``(i) a practitioner described in section 
                        1842(b)(18)(C) of the Social Security Act (42 
                        U.S.C. 1395u(b)(18)(C)) (including a clinical 
                        psychologist); and
                            ``(ii) a physical, occupational, or speech 
                        therapist.
                    ``(B) Store-and-forward technologies.--For purposes 
                of paragraph (1), the term `store-and-forward 
                technologies' has the meaning given that term by the 
                Secretary, except that the term shall include 
                technologies through which information (including any 
                audio recording or visual image) is transferred and 
                stored for purposes of review by a health care provider 
                if the patient, the referring physician, or the health 
                care provider is not present at the time the 
                asynchronous review occurs at the remote site.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed as requiring payment for services provided 
        to a patient solely on the basis of information conveyed via 
        facsimile machine or via traditional telephone conversation.''.
    (b) Any Health Care Practitioner May Present Beneficiary to 
Consulting Physician.--Section 4206(b) of the Balanced Budget Act of 
1997 (42 U.S.C. 1395l note) is amended 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 the beneficiary to the consulting 
        physician or practitioner for the provision of items and 
        services. The referring physician and the practitioner shall 
        not receive any reimbursement for such presentation other than 
        the payment that the referring physician receives pursuant to 
        paragraph (1).''.
    (c) All CPT Billing Codes Covered Under Telehealth Program.--
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 payment for all 
current procedural terminology billing codes that are covered under the 
medicare program under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.).''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

                     TITLE II--TELEHEALTH LICENSURE

SEC. 201. STUDY AND REPORTS TO CONGRESS.

    (a) Study.--The Secretary shall conduct a study regarding--
            (1) 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;
            (2) the status of any reciprocal, mutual recognition, fast-
        track, or other licensure agreements between or among various 
        States;
            (3) 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;
            (4) a projection of future utilization of telehealth 
        consultations across State lines;
            (5) State efforts to increase or reduce licensure as a 
        burden to interstate telehealth practice; and
            (6) any State licensure requirements that appear to 
        constitute unnecessary barriers to the provision of telehealth 
        services across State lines.
    (b) Reports to Congress.--
            (1) Initial report.--Not later than January 1, 2000, the 
        Secretary shall submit to the appropriate committees of 
        Congress a detailed report on the study conducted under 
        subsection (a).
            (2) Annual reports.--
                    (A) In general.--Not later than January 1, 2001, 
                and each January 1 thereafter, the Secretary shall 
                submit to the appropriate committees of Congress a 
                report on relevant developments regarding the matters 
                studied by the Secretary pursuant to subsection (a).
                    (B) Recommendations.--If, with respect to a report 
                submitted under subparagraph (A), the Secretary 
                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.

 TITLE III--JOINT WORKING GROUP ON TELEHEALTH AND PERIODIC REPORTS TO 
                                CONGRESS

SEC. 301. JOINT WORKING GROUP ON TELEHEALTH.

    (a) In General.--
            (1) Redesignation.--The Joint Working Group on 
        Telemedicine, established by the Secretary, shall hereafter be 
        known as the ``Joint Working Group on Telehealth'' with the 
        chairperson being designated by the Director of the Office for 
        the Advancement of Telehealth.
            (2) Mission.--The mission of the Joint Working Group on 
        Telehealth is to--
                    (A) identify, monitor, and coordinate Federal 
                telehealth projects, data sets, and programs;
                    (B) 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) make further recommendations for coordinating 
                Federal and State efforts to increase access to health 
                care services, education, and information in rural and 
                underserved areas.
            (3) Annual reports.--Not later than January 1, 2000, and 
        annually 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 include--
            (1) an analysis of--
                    (A) the matters described in subsection (a)(2)(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) Termination.--The Joint Working Group on Telehealth shall 
terminate on the date that the Group submits the annual report that is 
due to be submitted on January 1, 2004, under subsection (a)(3).
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for the Joint Working Group on 
Telehealth to carry out the purposes of this section.

              TITLE IV--DEVELOPMENT OF TELEHEALTH NETWORKS

             Subtitle A--Development of Telehealth Networks

SEC. 401. FINANCIAL ASSISTANCE AUTHORIZED.

    (a) In General.--The Secretary, acting through the Director of the 
Office for Advancement of Telehealth, shall provide financial 
assistance (as described in section 402) to eligible telehealth 
networks (as described in section 403) for the purpose of expanding 
access to health care services for individuals in rural and frontier 
areas through the use of telehealth networks.
    (b) Maximum Amount of Financial Assistance.--The Secretary may 
establish the maximum amount of financial assistance made available to 
a recipient for each fiscal year under this title by publishing notice 
of such amount in the Federal Register or the Health Resources and 
Services Administration Preview.

SEC. 402. FINANCIAL ASSISTANCE DESCRIBED.

    (a) In General.--Financial assistance shall consist of loans (as 
described under subsection (b)), grants (as described under subsection 
(c)), or both as apportioned under subsection (d).
    (b) Loans.--
            (1) In general.--The Secretary is authorized to provide 
        loans to eligible telehealth networks under this title.
            (2) Maximum term of loans.--
                    (A) In general.--Subject to subparagraph (B), the 
                Secretary may establish the maximum term of any loan 
                provided under this title by publishing notice of such 
                term in the Federal Register or the Health Resources 
                and Services Administration Preview.
                    (B) Limitation.--The maximum term of any loan 
                provided under this title shall be for a period of not 
                more than 10 years.
            (3) Loan security and feasibility.--The Secretary shall 
        make a loan under this title only if the Secretary determines 
        that--
                    (A) the security for the loan is reasonably 
                adequate; and
                    (B) the loan will be repaid within the term of such 
                loan.
            (4) Loan forgiveness program.--
                    (A) Establishment.--With respect to loans provided 
                under this title, 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) Application.--
                            (i) In general.--Any recipient of a loan 
                        under this title that desires to have such loan 
                        forgiven under the program established under 
                        subparagraph (A) shall submit an application to 
                        the Secretary within 180 days of the end of the 
                        term of such loan, in such manner, and 
                        accompanied by such information as the 
                        Secretary may reasonably require.
                            (ii) Contents.--Each application submitted 
                        pursuant to clause (i) shall--
                                    (I) demonstrate that the recipient 
                                has a financial need for such 
                                forgiveness; and
                                    (II) demonstrate that the recipient 
                                has satisfied the quality and cost-
                                effectiveness criteria developed under 
                                subparagraph (C).
                    (C) Quality and cost-effectiveness criteria.--As 
                part of the program established under subparagraph (A), 
                the Secretary shall develop criteria for determining 
                the quality and cost-effectiveness of programs operated 
                with loans provided under this title.
    (c) Grants.--The Secretary is authorized to award grants to 
eligible telehealth networks under this title.
    (d) Apportionment.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall determine what portion of the financial assistance 
        provided to an eligible telehealth network is a grant and what 
        portion of such financial assistance is a loan.
            (2) Requirements.--In determining the apportionment under 
        paragraph (1), the Secretary shall--
                    (A) ensure that the Federal Government receives the 
                maximum feasible repayment of the financial assistance 
                by basing such apportionment on the ability of the 
                recipient to repay a loan provided under this title; 
                and
                    (B) fully use the funds made available to carry out 
                this title.

SEC. 403. ELIGIBLE TELEHEALTH NETWORKS.

    (a) In General.--An entity that is a health care provider and a 
member of an existing or proposed telehealth network, or an entity that 
is a consortium of health care providers that are members of an 
existing or proposed telehealth network shall be eligible for financial 
assistance under this title.
    (b) Requirements.--
            (1) In general.--A telehealth network referred to in 
        subsection (a) shall, at a minimum, be composed of a 
        multispecialty entity (as defined in paragraph (2)(A)), a 
        network of community-based health care providers (as defined in 
        paragraph (2)(B)), and a public entity (as defined in paragraph 
        (2)(C)).
            (2) Definitions.--
                    (A) Multispecialty entity.--For purposes of 
                paragraph (1), the term ``multispecialty entity'' means 
                an entity which--
                            (i) provides 24-hour access to a range of 
                        diagnostic and therapeutic services; and
                            (ii) may be located in an urban area.
                    (B) Network of community-based health care 
                providers.--For purposes of paragraph (1), the term 
                ``network of community-based health care providers'' 
                means a network located in a rural area (as defined by 
                the Secretary) that includes at least 2 of the 
                following:
                            (i) A community or migrant health center.
                            (ii) A local health department.
                            (iii) A nonprofit or public hospital.
                            (iv) A health professional in private 
                        practice.
                            (v) A rural health clinic.
                            (vi) A skilled nursing facility.
                            (vii) A county mental health facility or 
                        other publicly funded mental health facility.
                            (viii) A provider of home health services.
                            (ix) Any other publicly funded health or 
                        social services agency.
                    (C) Public entity.--For purposes of paragraph (1), 
                the term ``public entity'' means an entity that 
                demonstrates its use of the telehealth network for 
                purposes of education and economic development (as 
                required by the Secretary), and includes--
                            (i) a public school;
                            (ii) a public library;
                            (iii) a college or university;
                            (iv) a local government entity; or
                            (v) a local business entity that is not 
                        related to the provision of health care 
                        services.
    (c) For-Profit Entity.--A telehealth network may include for-profit 
entities so long as the recipient of financial assistance under this 
title is a nonprofit entity.

SEC. 404. USE OF FINANCIAL ASSISTANCE.

    (a) Permitted Uses.--Any recipient of financial assistance under 
this title may use such financial assistance for the acquisition of 
telehealth equipment and modifications or improvements of telehealth 
services including--
            (1) 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, or other equipment that would further 
        the purposes of this title;
            (2) the provision of technical assistance and instruction 
        for the development and use of such equipment;
            (3) the development and acquisition of instructional 
        programming;
            (4) demonstration projects for teaching or training medical 
        students, residents, and other students in health professions 
        in rural training sites regarding the application of 
        telehealth;
            (5) transmission costs, maintenance of equipment, 
        compensation of specialists, and referring health care 
        providers;
            (6) development of projects to use telehealth to facilitate 
        collaboration among health care providers;
            (7) electronic archival of patient records;
            (8) collection and analysis of usage statistics and data 
        that can be used to document the cost-effectiveness of the 
        telehealth services; or
            (9) such other uses that are consistent with achieving the 
        purposes of this title as approved by the Secretary.
    (b) Prohibited Uses.--Any recipient of financial assistance under 
this title may not use such financial assistance for the following 
purposes:
            (1) To build structures on or acquire real property, except 
        that such funds may be expended for minor renovations relating 
        to the installation of equipment.
            (2) To purchase or lease equipment to the extent the 
        expenditures would exceed more than 40 percent of the financial 
        assistance provided in the form of grants pursuant to section 
        402(c).
            (3) To purchase or install transmission equipment (such as 
        laying cable or telephone lines, microwave towers, amplifiers, 
        and digital switching equipment).
            (4) For indirect costs (as determined by the Secretary) to 
        the extent the expenditures would exceed more than 20 percent 
        of the financial assistance.

SEC. 405. APPLICATION.

    (a) In General.--Each eligible telehealth network that desires to 
receive financial assistance under this title, in consultation with the 
State office of rural health or other appropriate State agency, shall 
submit an application to the Secretary at such time, in such manner, 
and accompanied by such additional information as the Secretary may 
reasonably require.
    (b) Contents.--Each application submitted pursuant to subsection 
(a) shall include at least the following information:
            (1) A description of the anticipated need for financial 
        assistance.
            (2) A description of the activities which the entity 
        intends to carry out using the financial assistance provided 
        under this title.
            (3) A plan for continuing the project after financial 
        assistance provided under this title has ended.
            (4) A description of the manner in which the activities 
        funded by the financial assistance provided under this title 
        will meet health care needs of underserved rural populations 
        within the State.
            (5) A description of how the local community or region to 
        be served by the proposed telehealth network will be involved 
        in the development and ongoing operations of the telehealth 
        network.
            (6) A description of the source and amount of non-Federal 
        funds the entity would pledge for the project.
            (7) A description of the long-term viability of the project 
        and evidence of health care provider commitment to the 
        telehealth network.

SEC. 406. APPROVAL OF APPLICATION.

    (a) In General.--The Secretary shall approve applications in 
accordance with the criteria established in subsection (b) and the 
preferences described in subsection (c).
    (b) Criteria.--The Secretary shall not approve an application under 
this section unless the Secretary finds the following:
            (1) Expenditures in rural areas.--At least 50 percent of 
        the financial assistance is expended--
                    (A) in a rural area; or
                    (B) to provide services to residents of rural 
                areas.
            (2) Promotion of integration.--The application demonstrates 
        that the project will--
                    (A) promote the integration of telehealth in the 
                community;
                    (B) avoid redundancy of technology;
                    (C) achieve economies of scale; and
                    (D) coordinate telehealth services across different 
                networks within a geographic region.
    (c) Preferences.--In providing financial assistance under this 
title, the Secretary shall give preference to any applicant telehealth 
network that--
            (1) is a health care provider in a telehealth network or a 
        health care provider that proposes to form such a network, in 
        which the majority of the health care providers in such network 
        are located in an area that is designated by the Federal 
        Government or the State as--
                    (A) a medically underserved area; or
                    (B) a health, dental health, or mental health 
                professional shortage area;
            (2) proposes to use financial assistance provided under 
        this title to plan and establish telehealth networks that will 
        link rural hospitals and rural health care providers to other 
        hospitals, health care providers, and patients;
            (3) proposes to use financial assistance provided under 
        this title--
                    (A) to offer a range of health care applications; 
                and
                    (B) to promote greater efficiency in the use of 
                health care resources;
            (4) demonstrates financial, institutional, and community 
        support for the long-term viability of the telehealth network 
        through cost participation and other indicators determined by 
        the Secretary; and
            (5) demonstrates a detailed plan for coordinating 
        telehealth network use by eligible telehealth networks so that 
        health care services are given priority over services that are 
        not related to the provision of health care services.

SEC. 407. ADMINISTRATION.

    (a) Nonduplication.--The Secretary shall ensure that services and 
programs developed with financial assistance provided under this title 
do not duplicate established telehealth networks that adequately serve 
rural populations.
    (b) Coordination With Other Agencies.--The Secretary shall 
coordinate, to the extent practicable, with other Federal and State 
agencies with similar grant, loan, or other financial assistance 
programs to pool resources for funding meritorious proposals for the 
development of telehealth networks in rural areas.
    (c) Informational Efforts.--The Secretary shall establish and 
implement procedures to carry out informational efforts that notify 
potential applicants located in the rural areas of each State of the 
financial assistance available under this title.

SEC. 408. REGULATIONS.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary shall by regulation prescribe such rules and regulations 
as the Secretary deems necessary to carry out the provisions of this 
title.

SEC. 409. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title, 
$40,000,000 for fiscal year 2000, and such sums as may be necessary for 
each of fiscal years 2001 through 2006.

Subtitle B--Rural Health Outreach and Network Development Grant Program

SEC. 415. RURAL HEALTH OUTREACH AND NETWORK DEVELOPMENT GRANT PROGRAM.

    (a) In General.--Section 330A of subpart I of part D of title III 
of the Public Health Service Act (42 U.S.C. 254c) is amended--
            (1) in the heading, by striking ``outreach, network, 
        development, and telemedicine'' and inserting ``outreach and 
        network development'';
            (2) in subsection (c)--
                    (A) in paragraph (1)(A)--
                            (i) by striking ``nonprofit private 
                        entity'' and inserting ``private nonprofit 
                        entity''; and
                            (ii) by striking ``three'' and inserting 
                        ``3'';
                    (B) in paragraph (2), by striking ``so long as'' 
                and inserting ``as long as''; and
                    (C) by striking paragraph (3); and
            (3) in subsection (e)--
                    (A) in paragraph (1), by striking ``Amounts'' and 
                inserting ``Subject to paragraphs (2) and (3), 
                amounts'';
                    (B) in paragraph (2)--
                            (i) by striking ``rural areas.--'' and all 
                        that follows through ``In awarding'' and 
                        inserting ``rural areas.--In awarding''; and
                            (ii) by striking subparagraph (B); and
                    (C) by striking paragraph (3) and inserting the 
                following:
            ``(3) Limitations.--An eligible network described in 
        subsection (c) may not use--
                    ``(A) more than 40 percent of the amounts provided 
                under a grant under this section to purchase equipment; 
                or
                    ``(B) any of the amounts provided under a grant 
                under this section--
                            ``(i) to build structures on or acquire 
                        real property; or
                            ``(ii) for construction.''.
    (b) Transition.--The Secretary of Health and Human Services shall 
ensure the continued funding of grants made, or contracts or 
cooperative agreements entered into, under subpart I of part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) (as such 
subpart existed on the day prior to the date of enactment of this Act), 
until the expiration of the grant period or the term of the contract or 
cooperative agreement. Such funding shall be continued under the same 
terms and conditions as were in effect on the date on which the grant, 
contract or cooperative agreement was awarded, subject to the 
availability of appropriations.
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