Short title; Amendments to Social Security Act

(a)

Short title

This Act may be cited as the

Rural Community Hospital Assistance Act of 2005

. (b)

Amendments to Social Security Act

Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered a reference to that section or other provision of the Social Security Act.

Establishment of rural community hospital (rch) program

(a)

In general

Section 1861 (42 U.S.C. 1395x) is amended by adding at the end of the following new subsection:

(bbb)

Rural community Hospital; Rural Community Hospital Services

(1)The term rural community hospital means a hospital (as defined in subsection (e)) that— (A)is located in a rural area (as defined in section 1886(d)(2)(D)) or treated as being so located pursuant to section 1886(d)(8)(E); (B)subject to paragraph (2), has less than 51 acute care inpatient beds, as reported in its most recent cost report; (C)makes available 24-hour emergency care services; (D)subject to paragraph (3), has a provider agreement in effect with the Secretary and is open to the public as of January 1, 2005; and (E)applies to the Secretary for such designation. (2)For purposes of paragraph (1)(B), beds in a psychiatric or rehabilitation unit of the hospital which is a distinct part of the hospital shall not be counted. (3)Subparagraph (1)(D) shall not be construed to prohibit any of the following from qualifying as a rural community hospital: (A)A replacement facility (as defined by the Secretary in regulations in effect on January 1, 2005) with the same service area (as defined by the Secretary in regulations in effect on such date). (B)A facility obtaining a new provider number pursuant to a change of ownership. (C)A facility which has a binding written agreement with an outside, unrelated party for the construction, reconstruction, lease, rental, or financing of a building as of January 1, 2005. (4)Nothing in this subsection shall be construed as prohibiting a critical access hospital from qualifying as a rural community hospital if the critical access hospital meets the conditions otherwise applicable to hospitals under subsection (e) and section 1866. (5)Nothing in this subsection shall be construed as prohibiting a rural community hospital participating in the demonstration program under Section 410A of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2313) from qualifying as a rural community hospital if the rural community hospital meets the conditions otherwise applicable to hospitals under subsection (e) and section 1866.

(b)

Payment

(1)

Inpatient hospital services

Section 1814 (42 U.S.C. 1395f) is amended by adding at the end the following new subsection:

(m)

Payment for Inpatient Services Furnished in Rural Community Hospitals

The amount of payment under this part for inpatient hospital services furnished in a rural community hospital, other than such services furnished in a psychiatric or rehabilitation unit of the hospital which is a distinct part, is, at the election of the hospital in the application referred to in section 1861(bbb)(1)(E)— (1)101 percent of the reasonable costs of providing such services, without regard to the amount of the customary or other charge, or (2)the amount of payment provided for under the prospective payment system for inpatient hospital services under section 1886(d).

(2)

Outpatient services

Section 1834 (42 U.S.C. 1395m) is amended by adding at the end the following new subsection:

(n)

Payment for outpatient services furnished in rural community hospitals

The amount of payment under this part for outpatient services furnished in a rural community hospital is, at the election of the hospital in the application referred to in section 1861(bbb)(1)(E)— (1)101 percent of the reasonable costs of providing such services, without regard to the amount of the customary or other charge and any limitation under section 1861(v)(1)(U), or (2)the amount of payment provided for under the prospective payment system for covered OPD services under section 1833(t).

(3)

Home health services

(A)

Exclusion from home health pps

(i)

In general

Section 1895 (42 U.S.C. 1395fff) is amended by adding at the end the following:

(f)

Exclusion

(1)

In general

In determining payments under this title for home health services furnished on or after October 1, 2005, by a qualified RCH-based home health agency (as defined in paragraph (2))— (A)the agency may make a one-time election to waive application of the prospective payment system established under this section to such services furnished by the agency; and (B)in the case of such an election, payment shall be made on the basis of 101 percent of the reasonable costs incurred in furnishing such services as determined under section 1861(v), but without regard to the amount of the customary or other charges with respect to such services or the limitations established under paragraph (1)(L) of such section. (2)

Qualified rch-based home health agency defined

For purposes of paragraph (1), a ‘qualified RCH-based home health agency' is a home health agency that is a provider-based entity (as defined in section 404 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Appendix F, 114 Stat. 2763A–506), as enacted into law by section 1(a)(6) of Public Law 106–554) of a rural community hospital that is located— (A)in a county in which no main or branch office of another home health agency is located; or (B)at least 35 miles from any main or branch office of another home health agency.

(ii)

Conforming changes

(I)

Payment under part a

Section 1814(b) (42 U.S.C. 1395f(b)) is amended by inserting or with respect to services to which section 1895(f) applies after equipment in the matter preceding paragraph (1). (II)

Payments under part b

Section 1833(a)(2)(A) (42 U.S.C. 1395l(a)(2)(A)) is amended by striking the prospective payment system under. (III)

Per visit limits

Section 1861(v)(1)(L)(i) (42 U.S.C. 1395x(v)(1)(L)(i)) is amended by inserting (other than by a qualified RCH-based home health agency (as defined in section 1895(f)(2)) after with respect to services furnished by home health agencies. (iii)

Consolidated billing

(I)

Recipient of payment

Section 1842(b)(6)(F) (42 U.S.C. 1395u(b)(6)(F)) is amended by inserting and excluding home health services to which section 1895(f) applies after provided for in such section. (II)

Exception to exclusion from coverage

Section 1862(a) (42 U.S.C. 1395y(a)) is amended by inserting before the period at the end of the second sentence the following: “and paragraph (21) shall not apply to home health services to which section 1895(f) applies”. (4)

Exemption from 30-percent reduction in reimbursement for bad debt

Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amended by inserting (other than for a rural community hospital) after In determining such reasonable costs for hospitals. (c)

Beneficiary Cost-Sharing for outpatient services

Section 1834(n) (as added by subsection (b)(2)) is amended— (1)by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; (2)by inserting (1) after (n); and (3)by adding at the end the following:

(2)The amounts of beneficiary cost-sharing for outpatient services furnished in a rural community hospital under this part shall be as follows: (A)For items and services that would have been paid under section 1833(t) if provided by a hospital, the amount of cost-sharing determined under paragraph (8) of such section. (B)For items and services that would have been paid under section 1833(h) if furnished by a provider or supplier, no cost-sharing shall apply. (C)For all other items and services, the amount of cost-sharing that would apply to the item or service under the methodology that would be used to determine payment for such item or service if provided by a physician, provider, or supplier, as the case may be.

(d)

Conforming amendments

(1)

Part a payment

Section 1814(b) (42 U.S.C. 1395f(b)) is amended in the matter preceding paragraph (1) by inserting other than inpatient hospital services furnished by a rural community hospital, after critical access hospital services,. (2)

Part b payment

(A)

In general

Section 1833(a) (42 U.S.C. 1395l(a)) is amended— (i)in paragraph (2), in the matter before subparagraph (A), by striking and (I) and inserting (I), and (K); (ii)by striking and at the end of paragraph (8); (iii)by striking the period at the end of paragraph (9) and inserting ; and; and (iv)by adding at the end the following:

(10)in the case of outpatient services furnished by a rural community hospital, the amounts described in section 1834(n).

(B)

Ambulance services

Section 1834(l)(8) (42 U.S.C. 1395m(l)(8)) is amended— (i)in the heading, by striking

critical access hospitals

and inserting

certain facilities

; (ii)in the matter preceding subparagraph (A), by striking the reasonable costs and inserting 101 percent of the reasonable costs; (iii)by striking or at the end of subparagraph (A); (iv)by redesignating subparagraph (B) as subparagraph (C); (v)by inserting after subparagraph (A) the following new subparagraph:

(B)by a rural community hospital (as defined in section 1861(bbb)(1)), or

; and

(vi)in subparagraph (C), as so redesignated, by inserting or a rural community hospital after critical access hospital. (3)

Technical amendments

(A)

Consultation with state agencies

Section 1863 (42 U.S.C. 1395z) is amended by striking and (dd)(2) and inserting (dd)(2), (mm)(1), and (bbb)(1). (B)

Provider agreements

Section 1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)) is amended by inserting section 1834(n)(2), after section 1833(b),. (e)

Effective date

The amendments made by this section shall apply to items and services furnished on or after October 1, 2005.

Removing barriers to establishment of distinct part units by rch and cah facilities

(a)

In general

Section 1886(d)(1)(B) (42 U.S.C. 1395(d)(1)(B)) is amended by striking a distinct part of the hospital (as defined by the Secretary) in the matter following clause (v) and inserting a distinct part (as defined by the Secretary) of the hospital or of a critical access hospital or a rural community hospital. (b)

Revision of limits on authority for CAHs To establish psychiatric and rehabilitation distinct part units

Section 1820(c)(2)(E)(iv) (42 U.S.C. 1395i–4(c)(2)(E)(iv)) is amended— (1)by striking If and inserting If the Secretary finds that; (2)by striking with respect to a cost reporting period; and (3)by striking during such period and inserting after such finding is made. (c)

Effective date

The amendments made by this section shall apply to determinations with respect to distinct part unit status that are made on or after October 1, 2005.

Improvements to medicare critical access hospital (cah) program

(a)

Payments to home health agencies owned and operated by a CAH

Section 1895(f) (42 U.S.C. 1395fff(f)), as added by section 2(b)(3), is further amended by inserting or by a home health agency that is owned and operated by a critical access hospital (as defined in section 1861(mm)(1)) after as defined in paragraph (2)). (b)

Payments to CAH-owned SNFs

(1)

In general

Section 1888(e) (42 U.S.C. 1395yy(e)) is amended— (A)in paragraph (1), by striking and (12) and inserting (12), and (13); and (B)by adding at the end thereof the following:

(13)

Exemption of cah facilities from pps

In determining payments under this part for covered skilled nursing facility services furnished on or after October 1, 2005, by a skilled nursing facility that is a distinct part unit of a critical access hospital (as defined in section 1861(mm)(1)) or is owned and operated by a critical access hospital— (A)the prospective payment system established under this subsection shall not apply; and (B)payment shall be made on the basis of 101 percent of the reasonable costs incurred in furnishing such services as determined under section 1861(v), but without regard to the amount of the customary or other charges with respect to such services or the limitations established under subsection (a)

(2)

Conforming changes

(A)

In general

Section 1814(b) (42 U.S.C. 1395f(b)), as amended by section 2(d)(1), is amended in the matter preceding paragraph (1)— (i)by inserting other than a skilled nursing facility providing covered skilled nursing facility services (as defined in section 1888(e)(2)) or posthospital extended care services to which section 1888(e)(13) applies, after inpatient hospital services furnished by a rural community hospital,; and (ii)by striking 1813, 1886, and inserting 1813, 1886, 1888,. (B)

Consolidated billing

(i)

Recipient of payment

Section 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is amended by inserting services to which paragraph (7)(C) or (13) of section 1888(e) applies and after other than. (ii)

Exception to exclusion from coverage

Section 1862(a)(18) (42 U.S.C. 1395y(a)(18)) is amended by inserting (other than services to which paragraph (7)(C) or (13) of section 1888(e) applies) after section 1888(e)(2)(A)(i). (c)

Payments to distinct part psychiatric or rehabilitation units of CAHs

(1)

In general

Section 1886(b) (42 U.S.C. 1395(b)) is amended— (A)in paragraph (1), by inserting , other than a distinct part psychiatric or rehabilitation unit to which paragraph (8) applies, after subsection (d)(1)(B); and (B)by adding at the end the following:

(8)

Exemption of certain distinct part psychiatric or rehabilitation units from cost limits

In determining payments under this part for inpatient hospital services furnished on or after October 1, 2005, by a distinct part psychiatric or rehabilitation unit (described in the matter following clause (v) of subsection (d)(1)(B)) of a critical access hospital (as defined in section 1861(mm)(1))— (A)the limits imposed under the preceding paragraphs of this subsection shall not apply; and (B)payment shall be made on the basis of 101 percent of the reasonable costs incurred in furnishing such services as determined under section 1861(v), but without regard to the amount of the customary or other charges with respect to such services.

(2)

Conforming amendment

Section 1814(l) (42 U.S.C. 1395f(l)) is amended by inserting furnished during fiscal year 2005 after such unit. (d)

Elimination of isolation test for cost-Based CAH ambulance services

Paragraph (8) of section 1834(l) (42 U.S.C. 1395m(l)) is amended by striking the comma at the end of subparagraph (B) and all that follows and inserting a period. (e)

Technical corrections

(1)

Section 403(b) of BBRA 1999

Section 1820(b)(2) (42 U.S.C. 1395i-4(b)(2)) is amended by striking nonprofit or public hospitals and inserting hospitals. (2)

Section 203(b) of BIPA 2000

Section 1883(a)(3) (42 U.S.C. 1395tt(a)(3)) is amended— (A)by inserting section 1861(v)(1)(G) or after Notwithstanding; and (B)by striking covered skilled nursing facility. (f)

Effective dates

(1)

Elimination of requirements

The amendments made by subsections (a) and (c) shall apply to services furnished on or after October 1, 2005. (2)

Technical corrections

(A)

BBRA

The amendment made by subsection (e)(1) shall be effective as if included in the enactment of section 403(b) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (Appendix F, 113 Stat. 1501A–321), as enacted into law by section 1000(a)(6) of Public Law 106–113. (B)

BIPA

The amendments made by subsection (e)(2) shall be effective as if included in the enactment of section 203(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Appendix F, 114 Stat. 2763A–463), as enacted into law by section 1(a)(6) of Public Law 106–554.