[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2502 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2502

  To improve the provision of health care in all areas of the United 
                                States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 9, 2002

 Mr. Grassley introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To improve the provision of health care in all areas of the United 
                                States.

    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 ``Improving Our 
Well-Being Act of 2002''.
    (b) Table of Contents.--The Table of Contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                      TITLE I--HOSPITAL PROVISIONS

               Subtitle A--Acute Care Hospital Provisions

Sec. 101. Full market basket increase in 2003 for medicare hospitals in 
                            rural and small urban areas.
Sec. 102. Equalizing urban and rural standardized payment amounts under 
                            the medicare inpatient hospital prospective 
                            payment system.
Sec. 103. Two-year extension of hold harmless provisions for small 
                            rural hospitals under medicare prospective 
                            payment system for hospital outpatient 
                            department services.
Sec. 104. Adjustment in determination of pre-BBA amount for small rural 
                            hospitals under medicare prospective 
                            payment system for hospital outpatient 
                            department services.
Sec. 105. Increase in payments for certain services furnished by small 
                            rural hospitals under medicare prospective 
                            payment system for hospital outpatient 
                            department services.
Sec. 106. Medicare wage index improvements.
Sec. 107. Medicare inpatient payment adjustment for low-volume 
                            hospitals.
Sec. 108. Increase in floor under medicaid for treatment as an 
                            extremely low DSH State to 3 percent in 
                            fiscal year 2003.
            Subtitle B--Critical Access Hospital Provisions

Sec. 111. Reinstatement of medicare periodic interim payment (PIP) for 
                            critical access hospitals.
Sec. 112. Elimination of 35-mile requirement for cost reimbursement of 
                            ambulance services furnished by critical 
                            access hospitals under the medicare 
                            program.
Sec. 113. Treatment of home health services furnished by subdivisions 
                            of critical access hospitals under the 
                            medicare program.
                 TITLE II--OTHER HEALTH CARE PROVISIONS

Sec. 201. Improvement in rural health clinic reimbursement under 
                            medicare.
Sec. 202. Exclusion of certain rural health clinic and Federally 
                            qualified health center services from the 
                            medicare prospective payment system for 
                            skilled nursing facilities.
Sec. 203. Two-year extension of increase for medicare home health 
                            services furnished in rural areas.
Sec. 204. Five-year extension of availability of medicare cost 
                            contracts for medicare beneficiaries.
                 TITLE III--PEDIATRIC DENTAL PROVISIONS

                     Subtitle A--Medicaid and SCHIP

Sec. 301. Grants to improve the provision of dental services under 
                            medicaid and SCHIP.
Sec. 302. Authority to provide dental coverage under SCHIP as a 
                            supplement to other health coverage.
 Subtitle B--Community Health Centers, Public Health Departments, and 
                       the Indian Health Service

Sec. 311. Grants to improve the provision of dental health services.
Sec. 312. Streamline process for designating dental health professional 
                            shortage areas.
Sec. 313. Demonstration projects to increase access to pediatric dental 
                            services in underserved areas.

                      TITLE I--HOSPITAL PROVISIONS

               Subtitle A--Acute Care Hospital Provisions

SEC. 101. FULL MARKET BASKET INCREASE IN 2003 FOR MEDICARE HOSPITALS IN 
              RURAL AND SMALL URBAN AREAS.

    Section 1886(b)(3)(B)(i)(XVIII) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)(B)(i)(XVIII)) is amended to read as follows:
            ``(XVIII) for fiscal year 2003, the market basket 
        percentage increase minus 0.55 percentage points for hospitals 
        located in a large urban area and the market basket percentage 
        increase for hospitals located in an area other than a large 
        urban area, and''.

SEC. 102. EQUALIZING URBAN AND RURAL STANDARDIZED PAYMENT AMOUNTS UNDER 
              THE MEDICARE INPATIENT HOSPITAL PROSPECTIVE PAYMENT 
              SYSTEM.

    (a) In General.--Section 1886(d)(3)(A) of the Social Security Act 
(42 U.S.C. 1395ww(d)(3)(A)) is amended--
            (1) in clause (iv)--
                    (A) by inserting ``and ending on or before 
                September 30, 2003,'' after ``October 1, 1995,''; and
                    (B) by striking ``and for hospitals'' and inserting 
                ``and, subject to clause (v), for hospitals''; and
            (2) by redesignating clauses (v) and (vi) as clauses (vii) 
        and (viii), respectively, and inserting after clause (iv) the 
        following new clauses:
            ``(v) For discharges occurring in the fiscal year beginning 
        on October 1, 2002, the operating standardized amount for 
        hospitals located in areas other than a large urban area shall 
        be equal to the operating standardized amount, as determined 
        under clause (iv), applicable to such discharges for hospitals 
        located in a large urban area.
            ``(vi) For discharges occurring in a fiscal year beginning 
        on or after October 1, 2003, the Secretary shall compute an 
        operating standardized amount for hospitals located in all 
        areas within the United States equal to the operating 
        standardized amount computed under clause (v) or this clause 
        for the previous fiscal year increased by the applicable 
        percentage increase under subsection (b)(3)(B)(i) for the 
        fiscal year involved.''.
    (b) Conforming Amendments.--
            (1) Computing drg-specific rates.--Section 1886(d)(3)(D) of 
        the Social Security Act (42 U.S.C. 1395ww(d)(3)(D)) is 
        amended--
                    (A) in the heading, by striking ``in different 
                areas'';
                    (B) in the matter preceding clause (i), by striking 
                ``each of which is'';
                    (C) in clause (i)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``for fiscal years before fiscal 
                        year 2003,'' before ``for hospitals''; and
                            (ii) in subclause (II), by striking ``and'' 
                        after the semicolon at the end;
                    (D) in clause (ii)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``for fiscal years before fiscal 
                        year 2003,'' before ``for hospitals''; and
                            (ii) in subclause (II), by striking the 
                        period at the end and inserting ``; and''; and
                    (E) by adding at the end the following new clause:
                    ``(iii) for a fiscal year beginning after fiscal 
                year 2002, for hospitals located in all areas, to the 
                product of--
                            ``(I) the applicable operating standardized 
                        amount (computed under subparagraph (A)), 
                        reduced under subparagraph (B), and adjusted or 
                        reduced under subparagraph (C) for the fiscal 
                        year; and
                            ``(II) the weighting factor (determined 
                        under paragraph (4)(B)) for that diagnosis-
                        related group.''.
            (2) Technical conforming sunset.--Section 1886(d)(3) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(3)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, for fiscal years before fiscal year 
                1997,'' before ``a regional adjusted DRG prospective 
                payment rate''; and
                    (B) in subparagraph (D), in the matter preceding 
                clause (i), by inserting ``, for fiscal years before 
                fiscal year 1997,'' before ``a regional DRG prospective 
                payment rate for each region,''.

SEC. 103. TWO-YEAR EXTENSION OF HOLD HARMLESS PROVISIONS FOR SMALL 
              RURAL HOSPITALS UNDER MEDICARE PROSPECTIVE PAYMENT SYSTEM 
              FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended by striking ``2004'' and inserting 
``2006''.

SEC. 104. ADJUSTMENT IN DETERMINATION OF PRE-BBA AMOUNT FOR SMALL RURAL 
              HOSPITALS UNDER MEDICARE PROSPECTIVE PAYMENT SYSTEM FOR 
              HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

    Section 1833(t)(7)(F)(ii) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(F)(ii)) is amended by adding at the end the following new 
sentence: ``The preceding sentence shall not apply with respect to the 
determination of the amount of payment under this subsection for 
covered OPD services furnished on or after January 1, 2003, and before 
January 1, 2006, by a hospital described in subparagraph (D)(i).''.

SEC. 105. INCREASE IN PAYMENTS FOR CERTAIN SERVICES FURNISHED BY SMALL 
              RURAL HOSPITALS UNDER MEDICARE PROSPECTIVE PAYMENT SYSTEM 
              FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

    (a) Increase.--
            (1) In general.--In the case of an applicable covered OPD 
        service (as defined in paragraph (2)) that is furnished by a 
        hospital described in paragraph (7)(D)(i) of section 1833(t) of 
        the Social Security Act (42 U.S.C. 1395l(t)) on or after 
        January 1, 2003, and before January 1, 2006, the Secretary of 
        Health and Human Services shall increase the medicare OPD fee 
        schedule amount (as determined under paragraph (4)(A) of such 
        section) that is applicable for such service by 10 percent.
            (2) Applicable covered opd services defined.--For purposes 
        of this section, the term ``applicable covered OPD service'' 
        means a covered clinic or emergency room visit that is 
        classified within the groups of covered OPD services (as 
        defined in paragraph (1)(B) of section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l(t))) established under paragraph 
        (2)(B) of such section.
    (b) No Effect on Copayment Amount.--The Secretary of Health and 
Human Services shall compute the copayment amount for applicable 
covered OPD services under section 1833(t)(8)(A) of the Social Security 
Act (42 U.S.C. 1395l(t)(8)(A)) as if this section had not been enacted.
    (c) No Effect on Increase Under Hold Harmless Provisions.--The 
Secretary of Health and Human Services shall apply the temporary hold 
harmless provision under section 1833(t)(7)(D)(i) of the Social 
Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) as if this section had not 
been enacted.
    (d) Waiving Budget Neutrality and No Revision or Adjustments.--The 
Secretary of Health and Human Services shall not make any revision or 
adjustment under subparagraph (A), (B), or (C) of section 1833(t)(9) of 
the Social Security Act (42 U.S.C. 1395l(t)(9)) because of the 
application of subsection (a)(1).
    (e) No Effect on Payments After Increase Period Ends.--The 
Secretary of Health and Human Services shall not take into account any 
payment increase provided under subsection (a)(1) in determining 
payments for covered OPD services (as defined in paragraph (1)(B) of 
section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t))) under 
such section that are furnished after January 1, 2006.
    (f) Technical Amendment.--Section 1833(t)(2)(B) of the Social 
Security Act (42 U.S.C. 1395l(t)(2)(B)) is amended by inserting ``(and 
periodically revise such groups pursuant to paragraph (9)(A))'' after 
``establish groups''.

SEC. 106. MEDICARE WAGE INDEX IMPROVEMENTS.

    (a) Acceleration of Phase-Out of Certain Costs in Computing Area 
Wage Index.--For purposes of computing the area wage index under 
section 1886(d)(3)(E) of the Social Security Act (42 U.S.C. 
1395ww(d)(3)(E)) for services provided in fiscal year 2003 and any 
subsequent year, the Secretary shall exclude from such calculation 
employee compensation and paid hours of employment attributable to 
teaching physicians, residents in approved medical residency training 
programs (as defined in section 1886(h)(5)(A) of such Act (42 U.S.C. 
1395ww(h)(5)(A))), and certified registered nurse anesthetists (as 
defined in section 1861(bb)(2) of the Social Security Act (42 U.S.C. 
1395x(bb)(2))).
    (b) MedPAC Review and Report.--
            (1) Review.--The Medicare Payment Advisory Commission shall 
        conduct a review of the methodology used by the Secretary of 
        Health and Human Services to determine the proportion of 
        hospitals' costs attributable to wages and wage-related costs 
        which are adjusted under section 1886(d)(3)(E) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(3)(E)).
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall submit to Congress 
        a report on the review conducted under paragraph (1) together 
        with recommendations on how to alter the methodology described 
        in such paragraph in order to improve the accuracy of the 
        determination of the proportion described in such paragraph.

SEC. 107. MEDICARE INPATIENT PAYMENT ADJUSTMENT FOR LOW-VOLUME 
              HOSPITALS.

    (a) In General.--Section 1886(d) of the Social Security Act (42 
U.S.C. 1395ww(d)) is amended by adding at the end the following new 
paragraph:
    ``(12) Payment adjustment for low-volume hospitals.--
            ``(A) Payment adjustment.--
                    ``(i) In general.--Notwithstanding any other 
                provision of this section, for each cost reporting 
                period (beginning with the cost reporting period that 
                begins in fiscal year 2003), the Secretary shall 
                provide for an additional payment amount to each low-
                volume hospital (as defined in clause (iii)) for 
                discharges occurring during that cost reporting period 
                to increase the amount paid to such hospital under this 
                section for such discharges by the applicable 
                percentage increase determined under clause (ii).
                    ``(ii) Applicable percentage increase.--The 
                Secretary shall determine a percentage increase 
                applicable under this paragraph that ensures that--
                            ``(I) no percentage increase in payments 
                        under this paragraph exceeds 25 percent of the 
                        amount of payment that would otherwise be made 
                        to a low-volume hospital under this section for 
                        each discharge (but for this paragraph);
                            ``(II) low-volume hospitals that have the 
                        lowest number of discharges during a cost 
                        reporting period receive the highest percentage 
                        increase in payments due to the application of 
                        this paragraph; and
                            ``(III) the percentage increase in payments 
                        due to the application of this paragraph is 
                        reduced as the number of discharges per cost 
                        reporting period increases.
                    ``(iii) Low-volume hospital defined.--For purposes 
                of this paragraph, the term `low-volume hospital' 
                means, for a cost reporting period, a subsection (d) 
                hospital (as defined in paragraph (1)(B)) other than a 
                critical access hospital (as defined in section 
                1861(mm)(1)) that--
                            ``(I) the Secretary determines had an 
                        average of less than 800 discharges (determined 
                        with respect to all patients and not just 
                        individuals receiving benefits under this 
                        title) during the 3 most recent cost reporting 
                        periods for which data are available that 
                        precede the cost reporting period to which this 
                        paragraph applies; and
                            ``(II) is located at least 15 miles from a 
                        similar hospital (or is deemed by the Secretary 
                        to be so located by reason of such factors as 
                        the Secretary determines appropriate, including 
                        the time required for an individual to travel 
                        to the nearest alternative source of 
                        appropriate inpatient care (taking into account 
                        the location of such alternative source of 
                        inpatient care and any weather or travel 
                        conditions that may affect such travel time)).
            ``(B) Prohibiting certain reductions.--Notwithstanding 
        subsection (e), the Secretary shall not reduce the payment 
        amounts under this section to offset the increase in payments 
        resulting from the application of subparagraph (A).''.
    (b) Technical Amendment.--Section 1886(d) of the Social Security 
Act (42 U.S.C. 1395ww(d)) is amended by moving the indentation of 
paragraph (11), and subparagraphs (A) through (D) of such paragraph, 2 
ems to the left.

SEC. 108. INCREASE IN FLOOR UNDER MEDICAID FOR TREATMENT AS AN 
              EXTREMELY LOW DSH STATE TO 3 PERCENT IN FISCAL YEAR 2003.

    (a) Increase in DSH Floor.--Section 1923(f)(5) of the Social 
Security Act (42 U.S.C. 1396r-4(f)(5)) is amended--
            (1) by striking ``fiscal year 1999'' and inserting ``fiscal 
        year 2001'';
            (2) by striking ``August 31, 2000'' and inserting ``August 
        31, 2002'';
            (3) by striking ``1 percent'' each place it appears and 
        inserting ``3 percent''; and
            (4) by striking ``fiscal year 2001'' and inserting ``fiscal 
        year 2003''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2002, and apply to DSH allotments under title XIX 
of the Social Security Act for fiscal year 2003 and each fiscal year 
thereafter.

            Subtitle B--Critical Access Hospital Provisions

SEC. 111. REINSTATEMENT OF MEDICARE PERIODIC INTERIM PAYMENT (PIP) FOR 
              CRITICAL ACCESS HOSPITALS.

    (a) In General.--Section 1815(e)(2) of the Social Security Act (42 
U.S.C. 1395g(e)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by adding ``and'' at the end of subparagraph (D); and
            (3) by inserting after subparagraph (D) the following new 
        subparagraph:
            ``(E) inpatient critical access hospital services (as 
        defined in section 1861(mm)(2));''.
    (b) Effective Dates.--The amendments made by subsection (a) shall 
apply to payments made on or after January 1, 2003.

SEC. 112. ELIMINATION OF 35-MILE REQUIREMENT FOR COST REIMBURSEMENT OF 
              AMBULANCE SERVICES FURNISHED BY CRITICAL ACCESS HOSPITALS 
              UNDER THE MEDICARE PROGRAM.

    (a) Elimination.--
            (1) In general.--Paragraph (8) of section 1834(l) of the 
        Social Security Act (42 U.S.C. 1395m(l)), as added by section 
        205(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (114 Stat. 2763A-482), 
        as enacted into law by section 1(a)(6) of Public Law 106-554, 
        is amended--
                    (A) in subparagraph (B), by striking the comma at 
                the end and inserting a period; and
                    (B) by striking ``but only if'' and all that 
                follows.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to services furnished on or after January 1, 2003.
    (b) Technical Amendment.--
            (1) In general.--Paragraph (8) of section 1834(l) of the 
        Social Security Act (42 U.S.C. 1395m(l)), as added by section 
        221(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (114 Stat. 2763A-486), 
        as enacted into law by section 1(a)(6) of Public Law 106-554, 
        is redesignated as paragraph (9).
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the enactment of such 
        section 221(a).

SEC. 113. TREATMENT OF HOME HEALTH SERVICES FURNISHED BY SUBDIVISIONS 
              OF CRITICAL ACCESS HOSPITALS UNDER THE MEDICARE PROGRAM.

    (a) Home Health Services.--
            (1) In general.--Section 1895 of the Social Security Act 
        (42 U.S.C. 1395fff) is amended by adding at the end the 
        following new subsection:
    ``(f) Services Furnished by Critical Access Hospitals.--
Notwithstanding any other provision of this section, the Secretary 
shall pay the reasonable costs incurred in furnishing home health 
services if such services are furnished by a home health agency that is 
a subdivision of a critical access hospital (as defined in section 
1861(mm)(1)).''.
            (2) Conforming amendment.--Section 1833(a)(2)(A) of the 
        Social Security Act (42 U.S.C. 1395l(a)(2)(A)) is amended--
                    (A) by striking ``1861(kk)),'' and inserting 
                ``1861(kk)), (i)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (ii) with respect to home health 
                services described in subsection (f) of such section, 
                the amounts paid shall be the amounts described in such 
                subsection''.
            (3) Technical amendment.--Section 1833(a)(2)(A) of the 
        Social Security Act (42 U.S.C. 1395l(a)(2)(A)) is amended by 
        striking ``drug) (as defined in section 1861(kk))'' and 
        inserting ``drug (as defined in section 1861(kk)))''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to services furnished on or after January 1, 2004.

                 TITLE II--OTHER HEALTH CARE PROVISIONS

SEC. 201. IMPROVEMENT IN RURAL HEALTH CLINIC REIMBURSEMENT UNDER 
              MEDICARE.

    Section 1833(f) of the Social Security Act (42 U.S.C. 1395l(f)) is 
amended--
            (1) in paragraph (1), by striking ``, and'' at the end and 
        inserting a semicolon;
            (2) in paragraph (2)--
                    (A) by striking ``in a subsequent year'' and 
                inserting ``in 1989 through 2002''; and
                    (B) by striking the period at the end and inserting 
                a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(3) in 2003, at $80 per visit; and
            ``(4) in a subsequent year, at the limit established under 
        this subsection for the previous year increased by the 
        percentage increase in the MEI (as so defined) applicable to 
        primary care services (as so defined) furnished as of the first 
        day of that year.''.

SEC. 202. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC AND FEDERALLY 
              QUALIFIED HEALTH CENTER SERVICES FROM THE MEDICARE 
              PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING 
              FACILITIES.

    (a) In General.--Section 1888(e) of the Social Security Act (42 
U.S.C. 1395yy(e)) is amended--
            (1) in paragraph (2)(A)(i)(II), by striking ``clauses (ii) 
        and (iii)'' and inserting ``clauses (ii), (iii), and (iv)''; 
        and
            (2) by adding at the end of paragraph (2)(A) the following 
        new clause:
                            ``(iv) Exclusion of certain rural health 
                        clinic and federally qualified health center 
                        services.--Services described in this clause 
                        are--
                                    ``(I) rural health clinic services 
                                (as defined in paragraph (1) of section 
                                1861(aa)); and
                                    ``(II) Federally qualified health 
                                center services (as defined in 
                                paragraph (3) of such section);
                        that would be described in clause (ii) if such 
                        services were not furnished by an individual 
                        affiliated with a rural health clinic or a 
                        Federally qualified health center.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after January 1, 2003.

SEC. 203. TWO-YEAR EXTENSION OF INCREASE FOR MEDICARE HOME HEALTH 
              SERVICES FURNISHED IN RURAL AREAS.

    (a) In General.--Section 508(a) of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000 (114 Stat. 2763A-
533), as enacted into law by section 1(a)(6) of Public Law 106-554, is 
amended by striking ``April 1, 2003'' and inserting ``April 1, 2005''.
    (b) Technical Amendment.--Section 547(c)(2) of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(114 Stat. 2763A-553), as enacted into law by section 1(a)(6) of Public 
Law 106-554, is amended by striking ``September 30, 2002'' and 
inserting ``April 1, 2005''.

SEC. 204. FIVE-YEAR EXTENSION OF AVAILABILITY OF MEDICARE COST 
              CONTRACTS FOR MEDICARE BENEFICIARIES.

    Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)) is amended by striking ``2004'' and inserting 
``2009''.

                 TITLE III--PEDIATRIC DENTAL PROVISIONS

                     Subtitle A--Medicaid and SCHIP

SEC. 301. GRANTS TO IMPROVE THE PROVISION OF DENTAL SERVICES UNDER 
              MEDICAID AND SCHIP.

    Title V of the Social Security Act (42 U.S.C. 701 et seq.) is 
amended by adding at the end the following new section:

``SEC. 511. GRANTS TO IMPROVE THE PROVISION OF DENTAL SERVICES UNDER 
              MEDICAID AND SCHIP.

    ``(a) Authority To Make Grants.--In addition to any other payments 
made under this title to a State, the Secretary shall award grants to 
States that satisfy the requirements of subsection (b) to improve the 
provision of dental services to children who are enrolled in a State 
plan under title XIX or a State child health plan under title XXI (in 
this section, collectively referred to as the `State plans').
    ``(b) Requirements.--In order to be eligible for a grant under this 
section, a State shall provide the Secretary with the following 
assurances:
            ``(1) Improved service delivery.--The State shall have a 
        plan to improve the delivery of dental services to children who 
        are enrolled in the State plans, including providing outreach 
        and administrative case management, improving collection and 
        reporting of claims data, and providing incentives, in addition 
        to raising reimbursement rates, to increase provider 
        participation.
            ``(2) Adequate payment rates.--The State has provided for 
        payment under the State plans for dental services for children 
        at levels consistent with the market-based rates and sufficient 
        enough to enlist providers to treat children in need of dental 
        services.
            ``(3) Ensured access.--The State shall ensure it will make 
        dental services available to children enrolled in the State 
        plans to the same extent as such services are available to the 
        general population of the State.
    ``(c) Application.--A State shall submit an application to the 
Secretary for a grant under this section in such form and manner and 
containing such information as the Secretary may require.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to make grants under this section $50,000,000 for fiscal 
year 2003 and each fiscal year thereafter.
    ``(e) Application of Other Provisions of Title.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        other provisions of this title shall not apply to a grant made 
        under this section.
            ``(2) Exceptions.--The following provisions of this title 
        shall apply to a grant made under subsection (a) to the same 
        extent and in the same manner as such provisions apply to 
        allotments made under section 502(c):
                    ``(A) Section 504(b)(6) (relating to prohibition on 
                payments to excluded individuals and entities).
                    ``(B) Section 504(c) (relating to the use of funds 
                for the purchase of technical assistance).
                    ``(C) Section 504(d) (relating to a limitation on 
                administrative expenditures).
                    ``(D) Section 506 (relating to reports and audits), 
                but only to the extent determined by the Secretary to 
                be appropriate for grants made under this section.
                    ``(E) Section 507 (relating to penalties for false 
                statements).
                    ``(F) Section 508 (relating to nondiscrimination).
                    ``(G) Section 509 (relating to the administration 
                of the grant program).''.

SEC. 302. AUTHORITY TO PROVIDE DENTAL COVERAGE UNDER SCHIP AS A 
              SUPPLEMENT TO OTHER HEALTH COVERAGE.

    (a) Authority To Provide Coverage.--
            (1) SCHIP.--
                    (A) In general.--Section 2105(a)(1)(C) of the 
                Social Security Act (42 U.S.C. 1397ee(a)(1)(C)) is 
                amended--
                            (i) by inserting ``(i)'' after ``(C)''; and
                            (ii) by adding at the end the following new 
                        clause:
                    ``(ii) notwithstanding clause (i), in the case of a 
                State that satisfies the conditions described in 
                subsection (c)(8), for child health assistance that 
                consists only of coverage of dental services for a 
                child who would be considered a targeted low-income 
                child if that portion of subparagraph (C) of section 
                2110(b)(1) relating to coverage of the child under a 
                group health plan or under health insurance coverage 
                did not apply, and such child has such coverage that 
                does not include dental services; and''.
                    (B) Conditions described.--Section 2105(c) of the 
                Social Security Act (42 U.S.C. 1397ee(c)) is amended by 
                adding at the end the following new paragraph:
            ``(8) Conditions for provision of dental services only 
        coverage.--For purposes of subsection (a)(1)(C)(ii), the 
        conditions described in this paragraph are the following:
                    ``(A) Income eligibility.--The State child health 
                plan (whether implemented under title XIX or this 
                title)--
                            ``(i) has the highest income eligibility 
                        standard permitted under this title as of 
                        January 1, 2002;
                            ``(ii) subject to subparagraph (B), does 
                        not limit the acceptance of applications for 
                        children; and
                            ``(iii) provides benefits to all children 
                        in the State who apply for and meet eligibility 
                        standards.
                    ``(B) No waiting list imposed.--With respect to 
                children whose family income is at or below 200 percent 
                of the poverty line, the State does not impose any 
                numerical limitation, waiting list, or similar 
                limitation on the eligibility of such children for 
                child health assistance under such State plan.''.
                    (C) State option to waive waiting period.--Section 
                2102(b)(1)(B) of the Social Security Act (42 U.S.C. 
                1397bb(b)(1)(B)) is amended--
                            (i) in clause (i), by striking ``and'' at 
                        the end;
                            (ii) in clause (ii), by striking the period 
                        and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(iii) at State option, may not apply a 
                        waiting period in the case of a child described 
                        in section 2105(a)(1)(C)(ii), if the State 
                        satisfies the requirements of section 
                        2105(c)(8) and provides such child with child 
                        health assistance that consists only of 
                        coverage of dental services.''.
            (2) Application of enhanced match under medicaid.--Section 
        1905 of the Social Security Act (42 U.S.C. 1396d) is amended--
                    (A) in subsection (b), in the fourth sentence, by 
                striking ``or subsection (u)(3)'' and inserting 
                ``(u)(3), or (u)(4)''; and
                    (B) in subsection (u)--
                            (i) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (ii) by inserting after paragraph (3) the 
                        following new paragraph:
    ``(4) For purposes of subsection (b), the expenditures described in 
this paragraph are expenditures for dental services for children 
described in section 2105(a)(1)(C)(ii), but only in the case of a State 
that satisfies the requirements of section 2105(c)(8).''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2002, and apply to child health assistance and 
medical assistance provided on or after that date.

 Subtitle B--Community Health Centers, Public Health Departments, and 
                       the Indian Health Service

SEC. 311. GRANTS TO IMPROVE THE PROVISION OF DENTAL HEALTH SERVICES.

    Part D of title III of the Public Health Service Act (42 U.S.C. 
254b et seq.) is amended by inserting before section 330, the 
following:

``SEC. 329. GRANT PROGRAM TO EXPAND THE AVAILABILITY OF SERVICES.

    ``(a) In General.--The Secretary, acting through the Health 
Resources and Services Administration, shall establish a program under 
which the Secretary may award grants to eligible entities and eligible 
individuals to expand the availability of primary dental care services 
in dental health professional shortage areas or medically underserved 
areas.
    ``(b) Eligibility.--
            ``(1) Entities.--To be eligible to receive a grant under 
        this section an entity--
                    ``(A) shall be--
                            ``(i) a health center receiving funds under 
                        section 330 or designated as a Federally 
                        qualified health center;
                            ``(ii) a county or local public health 
                        department, if located in a federally-
                        designated dental health professional shortage 
                        area;
                            ``(iii) an Indian tribe or tribal 
                        organization (as defined in section 4 of the 
                        Indian Self-Determination and Education 
                        Assistance Act (25 U.S.C. 450b)); or
                            ``(iv) a dental education program 
                        accredited by the Commission on Dental 
                        Accreditation; and
                    ``(B) shall prepare and submit to the Secretary an 
                application at such time, in such manner, and 
                containing such information as the Secretary may 
                require.
            ``(2) Individuals.--To be eligible to receive a grant under 
        this section an individual shall--
                    ``(A) be a dental health professional licensed or 
                certified in accordance with the laws of the State in 
                which such individual provides dental services;
                    ``(B) prepare and submit to the Secretary an 
                application at such time, in such manner, and 
                containing such information as the Secretary may 
                require; and
                    ``(C) provide assurances that--
                            ``(i) the individual will practice in a 
                        federally-designated dental health professional 
                        shortage area; and
                            ``(ii) not less than 33 percent of the 
                        patients of such individual are--
                                    ``(I) receiving assistance under a 
                                State plan under title XIX of the 
                                Social Security Act (42 U.S.C. 1396 et 
                                seq.);
                                    ``(II) receiving assistance under a 
                                State plan under title XXI of the 
                                Social Security Act (42 U.S.C. 1397aa 
                                et seq.); or
                                    ``(III) uninsured.
    ``(c) Use of Funds.--
            ``(1) Entities.--An entity shall use amounts received under 
        a grant under this section to provide for the increased 
        availability of primary dental services in the areas described 
        in subsection (a). Such amounts may be used to supplement the 
        salaries offered for individuals accepting employment as 
        dentists in such areas.
            ``(2) Individuals.--A grant to an individual under 
        subsection (a) shall be in the form of a $1,000 bonus payment 
        for each month in which such individual is in compliance with 
        the eligibility requirements of subsection (b)(2)(C).
    ``(d) Authorization of Appropriations.--
            ``(1) In general.--Notwithstanding any other amounts 
        appropriated under section 330 for health centers, there is 
        authorized to be appropriated $40,000,000 for each of fiscal 
        years 2003 through 2007 to hire and retain dental health care 
        providers under this section.
            ``(2) Use of funds.--Of the amount appropriated for a 
        fiscal year under paragraph (1), the Secretary shall use--
                    ``(A) not less than 75 percent of such amount to 
                make grants to eligible entities; and
                    ``(B) not more than 25 percent of such amount to 
                make grants to eligible individuals.''.

SEC. 312. STREAMLINE PROCESS FOR DESIGNATING DENTAL HEALTH PROFESSIONAL 
              SHORTAGE AREAS.

    Section 332(a) of the Public Health Service Act (42 U.S.C. 254e(a)) 
is amended by adding at the end the following:
    ``(4) In designating health professional shortage areas under this 
section, the Secretary may designate certain areas as dental health 
professional shortage areas if the Secretary determines that such areas 
have a severe shortage of dental health professionals. The Secretary 
shall, in consultation with State and local dental societies and tribal 
health organizations, streamline the process to develop, publish, and 
periodically update criteria to be used in designating dental health 
professional shortage areas.''.

SEC. 313. DEMONSTRATION PROJECTS TO INCREASE ACCESS TO PEDIATRIC DENTAL 
              SERVICES IN UNDERSERVED AREAS.

    (a) Authority To Conduct Projects.--The Secretary of Health and 
Human Services, through the Administrator of the Health Resources and 
Services Administration and the Director of the Indian Health Service, 
shall establish demonstration projects that are designed to increase 
access to dental services for children in underserved areas, as 
determined by the Secretary.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.
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