[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2175 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 2175

To amend title XVIII of the Social Security Act to enhance beneficiary 
    access in rural areas to quality health care services under the 
                           Medicare Program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 20, 2003

 Mr. Sandlin (for himself, Mr. Berry, Mr. McIntyre, Mr. Ross, and Mr. 
 Turner of Texas) introduced the following bill; which was referred to 
 the Committee on Ways and Means, and in addition to the Committee on 
Energy and Commerce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to enhance beneficiary 
    access in rural areas to quality health care services under the 
                           Medicare Program.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Healthcare Access Improvement 
Act of 2003''.

SEC. 2. EQUALIZING URBAN AND RURAL STANDARDIZED PAYMENT AMOUNTS UNDER 
              THE MEDICARE INPATIENT HOSPITAL PROSPECTIVE PAYMENT 
              SYSTEM.

    (a) In General.--Section 1886(d)(3)(A)(iv) of the Social Security 
Act (42 U.S.C. 1395ww(d)(3)(A)(iv)) is amended--
            (1) by striking ``(iv) For discharges'' and inserting 
        ``(iv)(I) Subject to subclause (II), for discharges''; and
            (2) by adding at the end the following new subclause:
            ``(II) For discharges occurring in a fiscal year beginning 
        with fiscal year 2004, the Secretary shall compute a 
        standardized amount for hospitals located in any area within 
        the United States and within each region equal to the 
        standardized amount computed for the previous fiscal year under 
        this subparagraph for hospitals located in a large urban area 
        (or, beginning with fiscal year 2005, for hospitals located in 
        any area) 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'';
                    (C) in clause (i)--
                            (i) in the matter preceding subclause (I), 
                        by inserting ``for fiscal years before fiscal 
                        year 2004,'' 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 2004,'' 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 2003, for hospitals located in all areas, to the 
                product of--
                            ``(I) the applicable 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. 3. FAIRNESS IN THE MEDICARE DISPROPORTIONATE SHARE HOSPITAL (DSH) 
              ADJUSTMENT FOR RURAL HOSPITALS.

    (a) Equalizing DSH Payment Amounts.--
            (1) In general.--Section 1886(d)(5)(F)(vii) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(F)(vii)) is amended by 
        inserting ``, and, after October 1, 2003, for any other 
        hospital described in clause (iv),'' after ``clause (iv)(I)'' 
        in the matter preceding subclause (I).
            (2) Conforming amendments.--Section 1886(d)(5)(F) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(F)) is amended--
                    (A) in clause (iv)--
                            (i) in subclause (II)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xiii)'';
                            (ii) in subclause (III)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xii)'';
                            (iii) in subclause (IV)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (x) or 
                                (xi)'';
                            (iv) in subclause (V)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (xi)''; 
                                and
                            (v) in subclause (VI)--
                                    (I) by inserting ``and before 
                                October 1, 2003,'' after ``April 1, 
                                2001,''; and
                                    (II) by inserting ``or, for 
                                discharges occurring on or after 
                                October 1, 2003, is equal to the 
                                percent determined in accordance with 
                                the applicable formula described in 
                                clause (vii)'' after ``clause (x)'';
                    (B) in clause (viii), by striking ``The formula'' 
                and inserting ``For discharges occurring before October 
                1, 2003, the formula''; and
                    (C) in each of clauses (x), (xi), (xii), and 
                (xiii), by striking ``For purposes'' and inserting 
                ``With respect to discharges occurring before October 
                1, 2003, for purposes''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to discharges occurring on or after October 1, 2003.

SEC. 4. MEDICARE INPATIENT HOSPITAL PAYMENT ADJUSTMENT FOR LOW-VOLUME 
              HOSPITALS.

    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 
                        2005), 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 2,000 dis- 
charges (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).''.

SEC. 5. ADJUSTMENT TO THE MEDICARE INPATIENT HOSPITAL PPS WAGE INDEX TO 
              REVISE THE LABOR-RELATED SHARE OF SUCH INDEX.

    (a) In General.--Section 1886(d)(3)(E) of the Social Security Act 
(42 U.S.C. 1395ww(d)(3)(E)) is amended--
            (1) by striking ``wage levels.--The Secretary'' and 
        inserting ``wage levels.--
                    ``(i) In general.--Except as provided in clause 
                (ii), the Secretary''; and
            (2) by adding at the end the following new clause:
                    ``(ii) Alternative proportion to be adjusted 
                beginning in fiscal year 2004.--
                            ``(I) In general.--Except as provided in 
                        subclause (II), for discharges occurring on or 
                        after October 1, 2003, the Secretary shall 
                        substitute `62 percent' for the proportion 
                        described in the first sentence of clause (i).
                            ``(II) Hold harmless for certain 
                        hospitals.--If the application of subclause (I) 
                        would result in lower payments to a hospital 
                        than would otherwise be made, then this 
                        subparagraph shall be applied as if this clause 
                        had not been enacted.''.
    (b) Waiving Budget Neutrality.--Section 1886(d)(3)(E) of the Social 
Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by subsection (a), 
is amended by adding at the end of clause (i) the following new 
sentence: ``The Secretary shall apply the previous sentence for any 
period as if the amendments made by section 5(a) of the Rural 
Healthcare Access Improvement Act of 2003 had not been enacted.''.

SEC. 6. ONE-YEAR EXTENSION OF HOLD HARMLESS PROVISIONS FOR SMALL RURAL 
              HOSPITALS AND TEMPORARY TREATMENT OF CERTAIN SOLE 
              COMMUNITY HOSPITALS TO LIMIT DECLINE IN PAYMENT UNDER THE 
              OPD PPS.

    (a) Hold Harmless Provisions.--Section 1833(t)(7)(D)(i) of the 
Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended--
            (1) in the heading, by striking ``small'' and inserting 
        ``certain'';
            (2) by inserting ``or a sole community hospital (as defined 
        in section 1886(d)(5)(D)(iii)) located in a rural area'' after 
        ``100 beds''; and
            (3) by striking ``2004'' and inserting ``2005''.
    (b) Effective Date.--The amendment made by subsection (a)(2) shall 
apply with respect to payment for OPD services furnished on and after 
January 1, 2004.

SEC. 7. CRITICAL ACCESS HOSPITAL (CAH) IMPROVEMENTS.

    (a) Permitting Hospitals To Allocate Swing Beds and Acute Care 
Inpatient Beds Subject to a Total Limit of 25 Beds.--
            (1) In general.--Section 1820(c)(2)(B)(iii) of the Social 
        Security Act (42 U.S.C. 1395i-4(c)(2)(B)(iii)) is amended to 
        read as follows:
                            ``(iii) provides not more than a total of 
                        25 extended care service beds (pursuant to an 
                        agreement under subsection (f)) or acute care 
                        inpatient beds (meeting such standards as the 
                        Secretary may establish) for providing 
                        inpatient care for a period that does not 
                        exceed, as determined on an annual, average 
                        basis, 96 hours per patient;''.
            (2) Conforming amendment.--Section 1820(f) of the Social 
        Security Act (42 U.S.C. 1395i-4(f)) is amended by striking 
        ``and the number of beds used at any time for acute care 
        inpatient services does not exceed 15 beds''.
    (b) Elimination of the Isolation Test for Cost-Based CAH Ambulance 
Services.--
            (1) In general.--Section 1834(l)(8) of the Social Security 
        Act (42 U.S.C. 1395m(l)(8)), 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 (114 Stat. 2763), 
        is amended by striking the comma at the end of subparagraph (B) 
        and all that follows and inserting a period.
            (2) Technical correction.--Section 1834(l) of the Social 
        Security Act (42 U.S.C. 1395m(l)) is amended by redesignating 
        paragraph (8), 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 (114 Stat. 2763), as paragraph 
        (9).
    (c) Coverage of Costs for Certain Emergency Room On-Call 
Providers.--
            (1) In general.--Section 1834(g)(5) of the Social Security 
        Act (42 U.S.C. 1395m(g)(5)) is amended--
                    (A) in the heading--
                            (i) by inserting ``certain'' before 
                        ``emergency''; and
                            (ii) by striking ``physicians'' and 
                        inserting ``providers'';
                    (B) by striking ``emergency room physicians who are 
                on-call (as defined by the Secretary)'' and inserting 
                ``physicians, physician assistants, nurse 
                practitioners, and clinical nurse specialists who are 
                on-call (as defined by the Secretary) to provide 
                emergency services''; and
                    (C) by striking ``physicians' services'' and 
                inserting ``services covered under this title''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to costs incurred for services 
        provided on or after January 1, 2004.
    (d) Authorization of Periodic Interim Payment (PIP).--
            (1) In general.--Section 1815(e)(2) of the Social Security 
        Act (42 U.S.C. 1395g(e)(2)) is amended--
                    (A) in subparagraph (C), by striking ``and'' after 
                the semicolon at the end;
                    (B) in subparagraph (D), by adding ``and'' after 
                the semicolon at the end; and
                    (C) by inserting after subparagraph (D) the 
                following new subparagraph:
            ``(E) inpatient critical access hospital services,''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply with respect to payments for inpatient critical 
        access hospital services furnished on or after January 1, 2004.
    (e) Exclusion of New CAHs From PPS Hospital Wage Index 
Calculation.--Section 1886(d)(3)(E)(i) of the Social Security Act (42 
U.S.C. 1395ww(d)(3)(E)(i)), as amended by section 5, is amended by 
inserting after the first sentence the following new sentence: ``In 
calculating the hospital wage levels under the preceding sentence 
applicable with respect to cost reporting periods beginning on or after 
January 1, 2004, the Secretary shall exclude the wage levels of any 
hospital that became a critical access hospital prior to the cost 
reporting period for which such hospital wage levels are calculated.''.

SEC. 8. TEMPORARY INCREASE FOR HOME HEALTH SERVICES FURNISHED IN A 
              RURAL AREA.

    (a) In General.--In the case of home health services furnished in a 
rural area (as defined in section 1886(d)(2)(D) of the Social Security 
Act (42 U.S.C. 1395ww(d)(2)(D))) on or after October 1, 2003, and 
before October 1, 2005, the Secretary of Health and Human Services 
shall increase the payment amount otherwise made under section 1895 of 
such Act (42 U.S.C. 1395fff) for such services by 10 percent.
    (b) Waiving Budget Neutrality.--The Secretary of Health and Human 
Services shall not reduce the standard prospective payment amount (or 
amounts) under section 1895 of the Social Security Act (42 U.S.C. 
1395fff) applicable to home health services furnished during a period 
to offset the increase in payments resulting from the application of 
subsection (a).
    (c) No Effect on Subsequent Periods.--The payment increase provided 
under subsection (a) for a period under such subsection, shall not 
apply to episodes and visits ending after such period, and shall not be 
taken into account in calculating the payment amounts applicable for 
episodes and visits occurring after such period.

SEC. 9. TEMPORARY 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, 2004, and before January 1, 2007, the Secretary of 
        Health and Human Services (in this section referred to as the 
        ``Secretary'') shall increase the medicare OPD fee schedule 
        amount (as determined under paragraph (4)(A) of such section) 
        that is applicable for such service in that year (determined 
        without regard to any increase under this section in a previous 
        year) by 5 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 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 or Outlier 
Provisions.--The Secretary shall apply the temporary hold harmless 
provision under paragraph (7)(D)(i) of section 1833(t) of the Social 
Security Act (42 U.S.C. 1395l(t)) and the outlier provision under 
paragraph (5) of such section as if this section had not been enacted.
    (d) Waiving Budget Neutrality and No Revision or Adjustments.--The 
Secretary 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 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, 2007.
    (f) Findings.--The Congress finds the following:
            (1) The medicare program has a responsibility to pay enough 
        for beneficial new technologies in order to ensure that 
        medicare beneficiaries have access to care; however, such 
        program must also be a prudent purchaser of health care items 
        and services.
            (2) The 2003 Medicare Hospital Outpatient Prospective 
        Payment System Regulation may have resulted in limiting 
        beneficiary access to care.
            (3) A methodology should be developed under the medicare 
        outpatient prospective payment system under section 1833(t) of 
        the Social Security Act (42 U.S.C. 1395l(t)) with appropriate 
        resources and such methodology should be implemented January 1, 
        2004. This will ensure that all hospitals are appropriately 
        reimbursed for the drugs and biologics that are used in the 
        outpatient setting which in turn will ensure patient access to 
        new technologies.
    (g) Technical Amendment.--Section 1833(t)(2)(B) (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. 10. TEMPORARY INCREASE FOR GROUND AMBULANCE SERVICES FURNISHED IN 
              A RURAL AREA.

    Section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)), as 
amended by section 7(b)(2), is amended by adding at the end the 
following new paragraph:
            ``(10) Temporary increase for ground ambulance services 
        furnished in a rural area.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, in the case of ground 
                ambulance services furnished on or after January 1, 
                2004, and before January 1, 2007, for which the 
                transportation originates in a rural area described in 
                paragraph (9) or in a rural census tract described in 
                such paragraph, the fee schedule established under this 
                section shall provide that the rate for the service 
                otherwise established, after application of any 
                increase under such paragraph, shall be increased by 5 
                percent.
                    ``(B) Application of increased payments after 
                2006.--The increased payments under subparagraph (A) 
                shall not be taken into account in calculating payments 
                for services furnished on or after the period specified 
                in such subparagraph.''.

SEC. 11. EXCLUSION OF CERTAIN RURAL HEALTH CLINIC AND FEDERALLY 
              QUALIFIED HEALTH CENTER SERVICES FROM THE MEDICARE PPS 
              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 furnished by a physician or 
                        practitioner not 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, 2004.

SEC. 12. MEDICARE INCENTIVE PAYMENT PROGRAM IMPROVEMENTS.

    (a) Procedures for Secretary, and Not Physicians, To Determine When 
Bonus Payments Under Medicare Incentive Payment Program Should Be 
Made.--Section 1833(m) of the Social Security Act (42 U.S.C. 1395l(m)) 
is amended--
            (1) by inserting ``(1)'' after ``(m)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Secretary shall establish procedures under which the 
Secretary, and not the physician furnishing the service, is responsible 
for determining when a payment is required to be made under paragraph 
(1).''.
    (b) Educational Program Regarding the Medicare Incentive Payment 
Program.--The Secretary shall establish and implement an ongoing 
educational program to provide education to physicians under the 
medicare program on the medicare incentive payment program under 
section 1833(m) of the Social Security Act (42 U.S.C. 1395l(m)).
    (c) Ongoing Study and Annual Report on the Medicare Incentive 
Payment Program.--
            (1) Ongoing study.--The Secretary shall conduct an ongoing 
        study on the medicare incentive payment program under section 
        1833(m) of the Social Security Act (42 U.S.C. 1395l(m)). Such 
        study shall focus on whether such program increases the access 
        of medicare beneficiaries who reside in an area that is 
        designated (under section 332(a)(1)(A) of the Public Health 
        Service Act (42 U.S.C. 254e(a)(1)(A))) as a health professional 
        shortage area to physicians' services under the medicare 
        program.
            (2) Annual reports.--Not later than 1 year after the date 
        of enactment of this Act, and annually thereafter, the 
        Secretary shall submit to Congress a report on the study 
        conducted under paragraph (1), together with recommendations 
        for such legislation and administrative action as the Secretary 
        considers appropriate.

SEC. 13. TWO-YEAR TREATMENT OF CERTAIN CLINICAL DIAGNOSTIC LABORATORY 
              TESTS FURNISHED BY A SOLE COMMUNITY HOSPITAL.

    Notwithstanding subsections (a)(1)(D) and (h) of section 1833 of 
the Social Security Act (42 U.S.C. 1395l) and section 1834(d)(1) of 
such Act (42 U.S.C. 1395m(d)(1)), in the case of a clinical diagnostic 
laboratory test covered under part B of title XVIII of such Act that is 
furnished in 2004 or 2005 by a sole community hospital (as defined in 
section 1886(d)(5)(D)(iii) of such Act (42 U.S.C. 
1395ww(d)(5)(D)(iii))) as part of services provided to patients of the 
hospital, the following rules shall apply:
            (1) Payment based on reasonable costs.--The amount of 
        payment for such test shall be 100 percent of the reasonable 
        costs of the hospital in furnishing such test.
            (2) No beneficiary cost-sharing.--No coinsurance, 
        deductible, copayment, or other cost-sharing otherwise 
        applicable under such part B shall apply with respect to such 
        test.

SEC. 14. ESTABLISHMENT OF FLOOR ON GEOGRAPHIC ADJUSTMENTS OF PAYMENTS 
              FOR PHYSICIANS' SERVICES.

    Section 1848(e)(1) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``subparagraphs (B) 
        and (C)'' and inserting ``subparagraphs (B), (C), and (E)''; 
        and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Floor for practice expense, malpractice, and 
                work geographic indices.--For purposes of payment for 
                services furnished on or after January 1, 2004, after 
                calculating the practice expense, malpractice, and work 
                geographic indices in clauses (i), (ii), and (iii) of 
                subparagraph (A) and in subparagraph (B), the Secretary 
                shall increase any such index to 1.00 for any locality 
                for which such index is less than 1.00.''.
                                 <all>