[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6030 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6030
To amend title XVIII of the Social Security Act to protect and preserve
access of Medicare beneficiaries in rural areas to health care
providers under the Medicare Program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 6, 2006
Mr. Walden of Oregon (for himself, Mr. Pomeroy, Mrs. Emerson, Mr.
McIntyre, Mr. Marshall, Mr. Paul, Mr. McNulty, Mr. Goode, Mr. Graves,
Ms. Herseth, Mr. Peterson of Minnesota, Mr. Davis of Tennessee, Mrs. Jo
Ann Davis of Virginia, Mr. McHugh, Mr. Jones of North Carolina, Mr.
Ross, Mr. Tanner, Mr. Peterson of Pennsylvania, Mr. Berry, Mr. Nussle,
Mr. Matheson, Mr. Boyd, Mr. Moran of Kansas, Mr. Kind, Mr. Sweeney, Mr.
DeFazio, Mr. Leach, Mr. Etheridge, Mr. Sherwood, Mr. Boucher, Mr.
Bishop of Georgia, Mr. Oberstar, Mr. Salazar, Mr. Rogers of Alabama,
Mr. Ney, Mr. Stupak, Mr. Thompson of California, Mr. Hinojosa, Mr.
Bass, Mr. Lucas, Mr. Hastings of Washington, Mr. Otter, Mr. Edwards,
Mrs. Cubin, Mr. Latham, Mr. Kennedy of Minnesota, Mr. Rahall, Mr.
Hinchey, Mrs. Capito, Mr. Michaud, Mr. Strickland, Mr. Simpson, Mr.
Hoekstra, Mr. Allen, Mr. Udall of New Mexico, Mr. Pickering, Mr.
Kildee, Mr. Melancon, and Mr. Renzi) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committee on Ways and Means, 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 protect and preserve
access of Medicare beneficiaries in rural areas to health care
providers under the Medicare Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Health Care Access
and Rural Equity (H-CARE) Act of 2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE HOSPITAL SERVICES
Sec. 101. Fairness in the Medicare disproportionate share hospital
(DSH) adjustment for rural hospitals.
Sec. 102. Treatment of Medicare hospital reclassifications.
Sec. 103. Critical access hospital improvements.
Sec. 104. Rebasing for sole community hospitals.
Sec. 105. Establishment of rural community hospital (RCH) program.
Sec. 106. Extension of medicare rural hospital hold harmless provision
under the prospective payment system for
hospital outpatient department (HOPD)
services.
TITLE II--MEDICARE PRACTITIONER SERVICES
Sec. 201. Coverage of marriage and family therapist services and mental
health counselor services under part B of
the Medicare program.
Sec. 202. Permanent treatment of certain physician pathology services
under Medicare.
Sec. 203. Extension of medicare incentive payment program for physician
scarcity areas.
Sec. 204. Extension of medicare increase payments for ground ambulance
services in rural areas.
Sec. 205. Extension of floor on medicare work geographic adjustment.
TITLE III--OTHER MEDICARE PROVISIONS
Sec. 301. Ensuring proportional representation of interests of rural
areas on MedPAC.
Sec. 302. Rural health clinic improvements.
Sec. 303. Use of medical conditions for coding ambulance services.
Sec. 304. Improvement in payments to retain emergency and other
capacity for ambulances in rural areas.
Sec. 305. Medicare remote monitoring pilot projects.
Sec. 306. Minimum payment rate by Medicare Advantage organizations for
critical access hospital services and rural
health clinic services.
Sec. 307. Prompt payment by Medicare prescription drug plans and MA-PD
plans under part D.
Sec. 308. Extension of medicare reasonable costs payments for certain
clinical diagnostic laboratory tests
furnished to hospital patients in certain
rural areas.
Sec. 309. Extension of temporary Medicare payment increase for home
health services furnished in a rural area.
TITLE IV--OTHER PROVISIONS
Sec. 401. Health information technology grants for rural health care
providers.
Sec. 402. Capital infrastructure revolving loan program.
Sec. 403. Rural health quality advisory commission and demonstration
projects.
Sec. 404. Rural health care services.
Sec. 405. Community health center collaborative access expansion.
Sec. 406. Facilitating the provision of telehealth services across
State lines.
TITLE I--MEDICARE HOSPITAL SERVICES
SEC. 101. FAIRNESS IN THE MEDICARE DISPROPORTIONATE SHARE HOSPITAL
(DSH) ADJUSTMENT FOR RURAL HOSPITALS.
Section 1886(d)(5)(F)(xiv)(II) of the Social Security Act (42
U.S.C. 1395ww(d)(5)(F)(xiv)(II)) is amended--
(1) by striking ``or, in the case'' and all that follows
through ``subparagraph (G)(iv)''; and
(2) by inserting at the end the following new sentence:
``The preceding sentence shall not apply to any hospital with
respect to discharges occurring on or after October 1, 2006.''.
SEC. 102. TREATMENT OF MEDICARE HOSPITAL RECLASSIFICATIONS.
(a) Extending Certain Medicare Hospital Wage Index
Reclassifications Through Fiscal Year 2010.--
(1) Reclassifications under section 508 of mma.--Section
508 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Pub. Law 108-173, 42 U.S.C. 1395ww
note) is amended--
(A) in subsection (a)(3), by striking ``3-year
period beginning with April 1, 2004'' and inserting
``period beginning on April 1, 2004, and ending on
September 30, 2010'';
(B) in subsection (b), by striking ``3-year-
period'' and inserting ``period''; and
(C) in subsection (e), by striking ``$900,000,000''
and inserting ``$1,950,000,000''.
(2) Special exception reclassifications.--The Secretary of
Health and Human Services shall extend for discharges occurring
through September 30, 2010, the special exception
reclassification of a sole community hospital located in a
State with less than 10 people per square mile, made under the
authority of section 1886(d)(5)(I)(i) of the Social Security
Act (42 U.S.C. 1395ww(d)(5)(I)(i)) and contained in the final
rule promulgated by the Secretary in the Federal Register on
August 11, 2004 (69 Fed. Reg. 49107).
(b) Disregarding Section 508 Hospital Reclassifications for
Purposes of Group Reclassifications.--Section 508 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. Law
108-173, 42 U.S.C. 1395ww note) is further amended by adding at the end
the following new subsection:
``(g) Disregarding Hospital Reclassifications for Purposes of Group
Reclassifications.--For purposes of the reclassification of a group of
hospitals in a geographic area under section 1886(d), a hospital
reclassified under this section shall not be taken into account and
shall not prevent the other hospitals in such area from establishing
such a group for such purpose.''.
SEC. 103. CRITICAL ACCESS HOSPITAL IMPROVEMENTS.
(a) Clarification of Payment for Clinical Laboratory Tests
Furnished by Critical Access Hospitals.--
(1) In general.--Section 1834(g)(4) of the Social Security
Act (42 U.S.C. 1395m(g)(4)) is amended--
(A) in the heading, by striking ``no beneficiary
cost-sharing'' and inserting ``treatment of''; and
(B) by adding at the end the following new
sentence: ``For purposes of the preceding sentence and
section 1861(mm)(3), clinical diagnostic laboratory
services furnished by a critical access hospital shall
be treated as being furnished as part of outpatient
critical access services without regard to whether--
``(A) the individual with respect to whom such
services are furnished is physically present in the
critical access hospital at the time the specimen is
collected;
``(B) such individual is registered as an
outpatient on the records of, and receives such
services directly from, the critical access hospital;
or
``(C) payment is (or, but for this subsection,
would be) available for such services under the fee
schedule established under section 1833(h).''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to cost reporting periods beginning on or after
October 1, 2003.
(b) Elimination of Isolation Test for Cost-Based Ambulance
Reimbursement.--
(1) In general.--Section 1834(l)(8) of the Social Security
Act (42 U.S.C. 1395m(l)(8)) is amended--
(A) in subparagraph (B)--
(i) by striking ``owned and''; and
(ii) by inserting ``(including when such
services are provided by the entity under an
arrangement with the hospital)'' after
``hospital''; and
(B) by striking the comma at the end of
subparagraph (B) and all that follows and inserting a
period.
(2) Effective date.--The amendments made by this subsection
shall apply to services furnished on or after January 1, 2007.
SEC. 104. REBASING FOR SOLE COMMUNITY HOSPITALS.
(a) Rebasing Permitted.--Section 1886(b)(3) of the Social Security
Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the
following new subparagraph:
``(K)(i) For cost reporting periods beginning on or after October
1, 2006, in the case of a sole community hospital there shall be
substituted for the amount otherwise determined under subsection
(d)(5)(D)(i) of this section, if such substitution results in a greater
amount of payment under this section for the hospital--
``(I) with respect to discharges occurring in fiscal year
2007, 75 percent of the subsection (d)(5)(D)(i) amount (as
described in subparagraph (I)(i)(I)) and 25 percent of the
subparagraph (K) rebased target amount (as defined in clause
(ii));
``(II) with respect to discharges occurring in fiscal year
2008, 50 percent of the subsection (d)(5)(D)(i) amount and 50
percent of the subparagraph (K) rebased target amount;
``(III) with respect to discharges occurring in fiscal year
2009, 25 percent of the subsection (d)(5)(D)(i) amount and 75
percent of the subparagraph (K) rebased target amount; and
``(IV) with respect to discharges occurring after fiscal
year 2009, 100 percent of the subparagraph (K) rebased target
amount.
``(ii) For purposes of this subparagraph, the `subparagraph (K)
rebased target amount' has the meaning given the term `target amount'
in subparagraph (C), except that--
``(I) there shall be substituted for the base cost
reporting period the 12-month cost reporting period beginning
during fiscal year 2000 or 2001, whichever results in the
greater amount of payment under this section for the hospital;
``(II) any reference in subparagraph (C)(i) to the `first
cost reporting period' described in such subparagraph is deemed
a reference to the first cost reporting period beginning on or
after October 1, 2006; and
``(III) the applicable percentage increase shall only be
applied under subparagraph (C)(iv) for discharges occurring in
fiscal years beginning with fiscal year 2008.''.
(b) Conforming Amendments.--Section 1886(b)(3) of such Act (42
U.S.C. 1395ww(b)(3)) is amended--
(1) in subparagraph (C), by inserting ``and subparagraph
(K)'' after ``subject to subparagraph (I)'' in the matter
preceding clause (i); and
(2) in subparagraph (I)(i)--
(A) by striking ``For'' in the matter preceding
subclause (I) and inserting ``Subject to subparagraph
(K), for''; and
(B) in subclause (I), by inserting ``and
subparagraph (K)'' after ``referred to in this
clause''.
SEC. 105. ESTABLISHMENT OF RURAL COMMUNITY HOSPITAL (RCH) PROGRAM.
(a) In General.--Section 1861 of the Social Security Act (42 U.S.C.
1395x), as amended by section 201, is amended by adding at the end of
the following new subsection:
``Rural Community Hospital; Rural Community Hospital Services
``(ddd)(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, 2006; 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, 2006) 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, 2006.
``(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 of the
Social Security Act (42 U.S.C. 1395f) is amended by adding at
the end the following new subsection:
``Payment for Inpatient Services Furnished in Rural Community Hospitals
``(m) 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(ddd)(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 of such Act (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(ddd)(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) Exemption from 30-percent reduction in reimbursement
for bad debt.--Section 1861(v)(1)(T) of such Act (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) of such Act (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) of such Act (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.--Section 1833(a) of such Act (42 U.S.C.
1395l(a)) is amended--
(A) in paragraph (2), in the matter before
subparagraph (A), by striking ``and (I)'' and inserting
``(I), and (K)'';
(B) by striking ``and'' at the end of paragraph
(8);
(C) by striking the period at the end of paragraph
(9) and inserting ``; and''; and
(D) 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).''.
(3) Technical amendments.--
(A) Consultation with state agencies.--Section 1863
of such Act (42 U.S.C. 1395z) is amended by striking
``and (dd)(2)'' and inserting ``(dd)(2), (mm)(1), and
(ddd)(1)''.
(B) Provider agreements.--Section 1866(a)(2)(A) of
such Act (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, 2006.
SEC. 106. EXTENSION OF MEDICARE RURAL HOSPITAL HOLD HARMLESS PROVISION
UNDER THE PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL
OUTPATIENT DEPARTMENT (HOPD) SERVICES.
(a) In General.--Section 1833(t)(7)(D)(i) of the Social Security
Act (42 U.S.C. 1395l(t)(7)(D)(i)), as amended by section 5105 of the
Deficit Reduction Act of 2005, is amended--
(1) in subclause (I)--
(A) by striking ``(I)''; and
(B) by striking ``2006'' and inserting ``2010'';
and
(2) by striking subclause (II).
(b) Effective Date.--The amendments made by subsection (a) shall
apply to covered OPD services furnished on or after January 1, 2006.
TITLE II--MEDICARE PRACTITIONER SERVICES
SEC. 201. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND MENTAL
HEALTH COUNSELOR SERVICES UNDER PART B OF THE MEDICARE
PROGRAM.
(a) Coverage of Services.--
(1) In general.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)), as amended by section 5112 of the
Deficit Reduction Act of 2005 (Public Law 109-171), is
amended--
(A) in subparagraph (Z), by striking ``and'' at the
end;
(B) in subparagraph (AA), by inserting ``and'' at
the end; and
(C) by adding at the end the following new
subparagraph:
``(BB) marriage and family therapist services (as defined
in subsection (ccc)(1)) and mental health counselor services
(as defined in subsection (ccc)(3));''.
(2) Definitions.--Section 1861 of such Act (42 U.S.C.
1395x), as amended by section 5112 of the Deficit Reduction Act
of 2005 (Public Law 109-171), is amended by adding at the end
the following new subsection:
``Marriage and Family Therapist Services; Marriage and Family
Therapist; Mental Health Counselor Services; Mental Health Counselor
``(ccc)(1) The term `marriage and family therapist services' means
services performed by a marriage and family therapist (as defined in
paragraph (2)) for the diagnosis and treatment of mental illnesses,
which the marriage and family therapist is legally authorized to
perform under State law (or the State regulatory mechanism provided by
State law) of the State in which such services are performed, as would
otherwise be covered if furnished by a physician or as an incident to a
physician's professional service, but only if no facility or other
provider charges or is paid any amounts with respect to the furnishing
of such services.
``(2) The term `marriage and family therapist' means an individual
who--
``(A) possesses a master's or doctoral degree which
qualifies for licensure or certification as a marriage and
family therapist pursuant to State law;
``(B) after obtaining such degree has performed at least 2
years of clinical supervised experience in marriage and family
therapy; and
``(C) in the case of an individual performing services in a
State that provides for licensure or certification of marriage
and family therapists, is licensed or certified as a marriage
and family therapist in such State.
``(3) The term `mental health counselor services' means services
performed by a mental health counselor (as defined in paragraph (4))
for the diagnosis and treatment of mental illnesses which the mental
health counselor is legally authorized to perform under State law (or
the State regulatory mechanism provided by the State law) of the State
in which such services are performed, as would otherwise be covered if
furnished by a physician or as incident to a physician's professional
service, but only if no facility or other provider charges or is paid
any amounts with respect to the furnishing of such services.
``(4) The term `mental health counselor' means an individual who--
``(A) possesses a master's or doctor's degree in mental
health counseling or a related field;
``(B) after obtaining such a degree has performed at least
2 years of supervised mental health counselor practice; and
``(C) in the case of an individual performing services in a
State that provides for licensure or certification of mental
health counselors or professional counselors, is licensed or
certified as a mental health counselor or professional
counselor in such State.''.
(3) Provision for payment under part b.--Section
1832(a)(2)(B) of such Act (42 U.S.C. 1395k(a)(2)(B)) is amended
by adding at the end the following new clause:
``(v) marriage and family therapist
services and mental health counselor
services;''.
(4) Amount of payment.--Section 1833(a)(1) of such Act (42
U.S.C. 1395l(a)(1)) is amended--
(A) by striking ``and (V)'' and inserting ``(V)'';
and
(B) by inserting before the semicolon at the end
the following: ``, and (W) with respect to marriage and
family therapist services and mental health counselor
services under section 1861(s)(2)(BB), the amounts paid
shall be 80 percent of the lesser of the actual charge
for the services or 75 percent of the amount determined
for payment of a psychologist under subparagraph (L)''.
(5) Exclusion of marriage and family therapist services and
mental health counselor services from skilled nursing facility
prospective payment system.--Section 1888(e)(2)(A)(ii) of such
Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting
``marriage and family therapist services (as defined in section
1861(ccc)(1)), mental health counselor services (as defined in
section 1861(ccc)(3)),'' after ``qualified psychologist
services,''.
(6) Inclusion of marriage and family therapists and mental
health counselors as practitioners for assignment of claims.--
Section 1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C))
is amended by adding at the end the following new clauses:
``(vii) A marriage and family therapist (as defined in
section 1861(ccc)(2)).
``(viii) A mental health counselor (as defined in section
1861(ccc)(4)).''.
(b) Coverage of Certain Mental Health Services Provided in Certain
Settings.--
(1) Rural health clinics and federally qualified health
centers.--Section 1861(aa)(1)(B) of the Social Security Act (42
U.S.C. 1395x(aa)(1)(B)) is amended by striking ``or by a
clinical social worker (as defined in subsection (hh)(1)),''
and inserting ``, by a clinical social worker (as defined in
subsection (hh)(1)), by a marriage and family therapist (as
defined in subsection (ccc)(2)), or by a mental health
counselor (as defined in subsection (ccc)(4)),''.
(2) Hospice programs.--Section 1861(dd)(2)(B)(i)(III) of
such Act (42 U.S.C. 1395x(dd)(2)(B)(i)(III)) is amended by
inserting ``or one marriage and family therapist (as defined in
subsection (ccc)(2))'' after ``social worker''.
(c) Authorization of Marriage and Family Therapists to Develop
Discharge Plans for Post-Hospital Services.--Section 1861(ee)(2)(G) of
the Social Security Act (42 U.S.C. 1395x(ee)(2)(G)) is amended by
inserting ``marriage and family therapist (as defined in subsection
(ccc)(2)),'' after ``social worker,''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to services furnished on or after January 1, 2007.
SEC. 202. PERMANENT TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES
UNDER MEDICARE.
Section 1848(i) of the Social Security Act (42 U.S.C. 1395w-4(i))
is amended by adding at the end the following new paragraph:
``(4) Treatment of certain physician pathology services.--
``(A) In general.--With respect to services
furnished on or after January 1, 2007, if an
independent laboratory furnishes the technical
component of a physician pathology service to a fee-
for-service medicare beneficiary who is an inpatient or
outpatient of a covered hospital, the Secretary shall
treat such component as a service for which payment
shall be made to the laboratory under this section and
not as an inpatient hospital service for which payment
is made to the hospital under section 1886(d) or as a
hospital outpatient service for which payment is made
to the hospital under section 1833(t).
``(B) Definitions.--In this paragraph:
``(i) Covered hospital.--
``(I) In general.--The term
`covered hospital' means, with respect
to an inpatient or outpatient, a
hospital that had an arrangement with
an independent laboratory that was in
effect as of July 22, 1999, under which
a laboratory furnished the technical
component of physician pathology
services to fee-for-service medicare
beneficiaries who were hospital
inpatients or outpatients,
respectively, and submitted claims for
payment for such component to a carrier
with a contract under section 1842 and
not to the hospital.
``(II) Change in ownership does not
affect determination.--A change in
ownership with respect to a hospital on
or after the date referred to in
subclause (I) shall not affect the
determination of whether such hospital
is a covered hospital for purposes of
such subclause.
``(ii) Fee-for-service medicare
beneficiary.--The term `fee-for-service
medicare beneficiary' means an individual who
is entitled to (or enrolled for) benefits under
part A, or enrolled under this part, or both,
but who is not enrolled in any of the
following:
``(I) A Medicare Advantage plan
under part C.
``(II) A plan offered by an
eligible organization under section
1876.
``(III) A program of all-inclusive
care for the elderly (PACE) under
section 1894.
``(IV) A social health maintenance
organization (SHMO) demonstration
project established under section
4018(b) of the Omnibus Budget
Reconciliation Act of 1987 (Public Law
100-203).
``(C) Reference.--For the provision related to the
treatment of certain services furnished prior to
January 1, 2007, see section 542 of the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000, as amended by section 732 of the Medicare
Prescription Drug, Improvement, and Modernization Act
of 2003.''.
SEC. 203. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM FOR PHYSICIAN
SCARCITY AREAS.
Section 1833(u)(1) of the Social Security Act (42 U.S.C.
1395l(u)(1)) is amended by striking ``2008'' and inserting ``2011''.
SEC. 204. EXTENSION OF MEDICARE INCREASE PAYMENTS FOR GROUND AMBULANCE
SERVICES IN RURAL AREAS.
Section 1834(l)(13) of the Social Security Act (42 U.S.C.
1395m(l)(13)) is amended--
(1) in subparagraph (A)--
(A) in the matter before clause (i), by striking
``furnished on or after July 1, 2004, and before
January 1, 2007,'';
(B) in clause (i), by inserting ``for services
furnished on or after July 1, 2004, and before January
1, 2011,'' after ``in such paragraph,''; and
(C) in clause (ii), by inserting ``for services
furnished on or after July 1, 2004, and before January
1, 2007,'' after ``in clause (i),''; and
(2) in subparagraph (B)--
(A) in the heading, by striking ``after 2006'' and
inserting ``for subsequent periods'';
(B) by inserting ``clauses (i) and (ii) of'' before
``subparagraph (A)''; and
(C) by striking ``in such subparagraph'' and
inserting ``in the respective clause''.
SEC. 205. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT.
Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(E)) is amended by striking ``2007'' and inserting ``2011''.
TITLE III--OTHER MEDICARE PROVISIONS
SEC. 301. ENSURING PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL
AREAS ON MEDPAC.
(a) In General.--Section 1805(c)(2) of the Social Security Act (42
U.S.C. 1395b-6(c)(2)) is amended--
(1) in subparagraph (A), by inserting ``consistent with
subparagraph (E)'' after ``rural representatives''; and
(2) by adding at the end the following new subparagraph:
``(E) Proportional representation of interests of
rural areas.--In order to provide a balance between
urban and rural representatives under subparagraph (A),
the proportion of members who represent the interests
of health care providers and Medicare beneficiaries
located in rural areas shall be no less than the
proportion, of the total number of Medicare
beneficiaries, who reside in rural areas.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to appointments made to the Medicare Payment
Advisory Commission after the date of the enactment of this Act.
SEC. 302. RURAL HEALTH CLINIC IMPROVEMENTS.
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 inserting ``(before 2007)'' after ``in a
subsequent year''; 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 2007, at $82 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. 303. USE OF MEDICAL CONDITIONS FOR CODING AMBULANCE SERVICES.
Section 1834(l)(7) of the Social Security Act (42 U.S.C.
1395m(l)(7)) is amended to read as follows:
``(7) Coding system.--
``(A) In general.--The Secretary shall, in
accordance with section 1173(c)(1)(B) and not later
than January 1, 2007, establish a mandatory system or
systems for the coding of claims for ambulance services
for which payment is made under this subsection,
including a code set specifying the medical condition
of the individual who is transported and the level of
service that is appropriate for the transportation of
an individual with that medical condition.
``(B) Medical conditions.--The code set established
under subparagraph (A) shall take into account the list
of medical conditions developed in the course of the
negotiated rulemaking process conducted under paragraph
(1).''.
SEC. 304. IMPROVEMENT IN PAYMENTS TO RETAIN EMERGENCY AND OTHER
CAPACITY FOR AMBULANCES IN RURAL AREAS.
(a) In General.--Section 1834(l) of the Social Security Act (42
U.S.C. 1395m(l)) is amended by adding at the end the following new
paragraph:
``(15) Additional payments for providers furnishing
ambulance services in rural areas.--
``(A) In general.--In the case of ground ambulance
services furnished on or after January 1, 2007, for
which the transportation originates in a rural area (as
determined under subparagraph (B)), the Secretary shall
provide for a percent increase in the base rate of the
fee schedule for a trip identified under this
subsection.
``(B) Identification of rural areas.--The
Secretary, in consultation with the Office of Rural
Health Policy, shall use the Rural-Urban Commuting
Areas (RUCA) coding system, adopted by that Office, to
designate rural areas for the purposes of this
paragraph. A rural area is any area in RUCA levels 2
through 10 and any unclassified area.
``(C) Tiering of rural areas.--The Secretary shall
designate 4 tiers of rural areas, using a ZIP Code
population-based methodology generated by the RUCA
coding system, as follows:
``(i) Tier 1.--A rural area that is a high
metropolitan commuting area, in which 30
percent or more of the commuting flow is to an
urban area, as designated by the Bureau of the
Census (RUCA level 2).
``(ii) Tier 2.--A rural area that is a low
metropolitan commuting area, in which less than
30 percent of the commuting flow is to an urban
area or to a large town, as designated by the
Bureau of the Census (RUCA levels 3-6).
``(iii) Tier 3.--A rural area that is a
small town core, as designated by the Bureau of
the Census, in which no significant portion of
the commuting flow is to an area of population
greater than 10,000 people (RUCA levels 7-9).
``(iv) Tier 4.--A rural area in which there
is no dominant commuting flow (RUCA level 10)
and any unclassified area.
The Secretary shall consult with the Office of Rural
Health Policy not less often than every 2 years to
update the designation of rural areas in accordance
with any changes that are made to the RUCA system.
``(D) Payment adjustments for trips in rural
areas.--The Secretary shall adjust the payment rate
under this section for ambulance trips that originate
in each of the tiers established in subparagraph (C)
according to the national average cost of full-cost
providers for providing ambulance services in each such
tier.''.
(b) Review of Payments for Rural Ambulance Services and Report to
Congress.--
(1) Review.--Not later than July 1, 2009, the Secretary of
Health and Human Services shall review the system for adjusting
payments for rural ambulance services under section 1834(l)(15)
of the Social Security Act, as added by subsection (a), to
determine the adequacy and appropriateness of such adjustments.
In conducting such review, the Secretary shall consult with
providers and suppliers affected by such adjustments and with
representatives of the ambulance industry generally to
determine--
(A) whether such adjustments adequately cover the
additional costs incurred in serving areas of low
population density; and
(B) whether the tiered structure for making such
adjustments appropriately reflects the difference in
costs of providing services in different types of rural
areas.
(2) Report.--Not later than January 1, 2010, the Secretary
shall submit to Congress a report on the review conducted under
paragraph (1) together with any recommendations for revision to
the systems for adjusting payments for ambulance services in
rural areas that the Secretary of Health and Human Services
determines appropriate.
(c) Conforming Amendments.--(1) Section 1834(l) of the Social
Security Act (42 U.S.C. 1395m(l)), as amended by subsection (a), is
amended by adding at the end the following new paragraph:
``(16) Designation of rural areas for mileage payment
purposes.--In establishing any differential in the amount of
payment for mileage between rural and urban areas in the fee
schedule established under paragraph (1), the Secretary shall,
in the case of ambulance services furnished on or after January
1, 2007, identify rural areas in the same manner as provided in
paragraph (15)(B).''.
(2) Section 1834(l)(12)(A) of such Act (42 U.S.C. 1395m(l)(12)(A))
is amended by striking ``January 1, 2010'' and inserting ``January 1,
2007''.
(3) Section 1834(l)(13)(A)(i) of such Act (42 U.S.C.
1395m(l)(13)(A)(i)) is amended--
(A) by inserting ``(or in the case of such services
furnished in 2007, in a rural area identified by the Secretary
under paragraph (15)(B))'' after ``such paragraph''; and
(B) by striking ``paragraphs (11) and (12)'' and inserting
``paragraphs (11), (12), and (15)''.
SEC. 305. MEDICARE REMOTE MONITORING PILOT PROJECTS.
(a) Pilot Projects.--
(1) In general.--Not later than 9 months after the date of
enactment of this Act, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall conduct pilot projects under title XVIII of the Social
Security Act for the purpose of providing incentives to home
health agencies to utilize home monitoring and communications
technologies that--
(A) enhance health outcomes for Medicare
beneficiaries; and
(B) reduce expenditures under such title.
(2) Site requirements.--
(A) Urban and rural.--The Secretary shall conduct
the pilot projects under this section in both urban and
rural areas.
(B) Site in a small state.--The Secretary shall
conduct at least 3 of the pilot projects in a State
with a population of less than 1,000,000.
(3) Definition of home health agency.--In this section, the
term ``home health agency'' has the meaning given that term in
section 1861(o) of the Social Security Act (42 U.S.C.
1395x(o)).
(b) Medicare Beneficiaries Within the Scope of Projects.--The
Secretary shall specify the criteria for identifying those Medicare
beneficiaries who shall be considered within the scope of the pilot
projects under this section for purposes of the application of
subsection (c) and for the assessment of the effectiveness of the home
health agency in achieving the objectives of this section. Such
criteria may provide for the inclusion in the projects of Medicare
beneficiaries who begin receiving home health services under title
XVIII of the Social Security Act after the date of the implementation
of the projects.
(c) Incentives.--
(1) Performance targets.--The Secretary shall establish for
each home health agency participating in a pilot project under
this section a performance target using one of the following
methodologies, as determined appropriate by the Secretary:
(A) Adjusted historical performance target.--The
Secretary shall establish for the agency--
(i) a base expenditure amount equal to the
average total payments made to the agency under
parts A and B of title XVIII of the Social
Security Act for Medicare beneficiaries
determined to be within the scope of the pilot
project in a base period determined by the
Secretary; and
(ii) an annual per capita expenditure
target for such beneficiaries, reflecting the
base expenditure amount adjusted for risk and
adjusted growth rates.
(B) Comparative performance target.--The Secretary
shall establish for the agency a comparative
performance target equal to the average total payments
under such parts A and B during the pilot project for
comparable individuals in the same geographic area that
are not determined to be within the scope of the pilot
project.
(2) Incentive.--Subject to paragraph (3), the Secretary
shall pay to each participating home care agency an incentive
payment for each year under the pilot project equal to a
portion of the Medicare savings realized for such year relative
to the performance target under paragraph (1).
(3) Limitation on expenditures.--The Secretary shall limit
incentive payments under this section in order to ensure that
the aggregate expenditures under title XVIII of the Social
Security Act (including incentive payments under this
subsection) do not exceed the amount that the Secretary
estimates would have been expended if the pilot projects under
this section had not been implemented.
(d) Waiver Authority.--The Secretary may waive such provisions of
titles XI and XVIII of the Social Security Act as the Secretary
determines to be appropriate for the conduct of the pilot projects
under this section.
(e) Report to Congress.--Not later than 5 years after the date that
the first pilot project under this section is implemented, the
Secretary shall submit to Congress a report on the pilot projects. Such
report shall contain a detailed description of issues related to the
expansion of the projects under subsection (f) and recommendations for
such legislation and administrative actions as the Secretary considers
appropriate.
(f) Expansion.--If the Secretary determines that any of the pilot
projects under this section enhance health outcomes for Medicare
beneficiaries and reduce expenditures under title XVIII of the Social
Security Act, the Secretary may initiate comparable projects in
additional areas.
(g) Incentive Payments Have No Effect on Other Medicare Payments to
Agencies.--An incentive payment under this section--
(1) shall be in addition to the payments that a home health
agency would otherwise receive under title XVIII of the Social
Security Act for the provision of home health services; and
(2) shall have no effect on the amount of such payments.
SEC. 306. MINIMUM PAYMENT RATE BY MEDICARE ADVANTAGE ORGANIZATIONS FOR
CRITICAL ACCESS HOSPITAL SERVICES AND RURAL HEALTH CLINIC
SERVICES.
(a) In General.--Section 1857(e) of the Social Security Act (42
U.S.C. 1395w-27(e)) is amended by adding at the end the following:
``(4) Payments for inpatient and outpatient critical access
hospital services and rural health clinic services.--A contract
under this section with an MA organization for the offering of
an MA plan shall require the organization to provide for a
payment rate under the plan for inpatient and outpatient
critical access hospital services and for rural health clinic
services furnished to enrollees of the plan (whether or not the
services are furnished pursuant to an agreement between such
organization and a critical access hospital or a rural health
clinic) that is not less than 101 percent of the applicable
payment rate established for such services under part A or part
B.''.
(b) Effective Date.--The amendments made by this section shall
apply to Medicare Advantage contract years beginning on or after
January 1, 2007.
SEC. 307. PROMPT PAYMENT BY MEDICARE PRESCRIPTION DRUG PLANS AND MA-PD
PLANS UNDER PART D.
(a) Application to Prescription Drug Plans.--Section 1860D-12(b) of
the Social Security Act (42 U.S.C. 1395w-112 (b)) is amended by adding
at the end the following new paragraph:
``(4) Prompt payment of clean claims.--
``(A) Prompt payment.--Each contract entered into
with a PDP sponsor under this subsection with respect
to a prescription drug plan offered by such sponsor
shall provide that payment shall be issued, mailed, or
otherwise transmitted with respect to all clean claims
submitted under this part within the applicable number
of calendar days after the date on which the claim is
received.
``(B) Definitions.--In this paragraph:
``(i) Clean claim.--The term `clean claim'
means a claim, with respect to a covered part D
drug, that has no apparent defect or
impropriety (including any lack of any required
substantiating documentation) or particular
circumstance requiring special treatment that
prevents timely payment from being made on the
claim under this part.
``(ii) Applicable number of calendar
days.--The term `applicable number of calendar
days' means--
``(I) with respect to claims
submitted electronically, 14 calendar
days; and
``(II) with respect to claims
submitted otherwise, 30 calendar days.
``(C) Interest payment.--If payment is not issued,
mailed, or otherwise transmitted within the applicable
number of calendar days (as defined in subparagraph
(B)) after a clean claim is received, interest shall be
paid at a rate used for purposes of section 3902(a) of
title 31, United States Code (relating to interest
penalties for failure to make prompt payments), for the
period beginning on the day after the required payment
date and ending on the date on which payment is made.
``(D) Procedures involving claims.--
``(i) Claims deemed to be clean claims.--
``(I) In general.--A claim for a
covered part D drug shall be deemed to
be a clean claim for purposes of this
paragraph if the PDP sponsor involved
does not provide a notification of
deficiency to the claimant by the 10th
day that begins after the date on which
the claim is submitted.
``(II) Notification of
deficiency.--For purposes of subclause
(II), the term `notification of
deficiency' means a notification that
specifies all defects or improprieties
in the claim involved and that lists
all additional information or documents
necessary for the proper processing and
payment of the claim.
``(ii) Payment of clean portions of
claims.--A PDP sponsor shall, as appropriate,
pay any portion of a claim for a covered part D
drug that would be a clean claim but for a
defect or impropriety in a separate portion of
the claim in accordance with subparagraph (A).
``(iii) Obligation to pay.--A claim for a
covered part D drug submitted to a PDP sponsor
that is not paid or contested by the provider
within the applicable number of calendar days
(as defined in subparagraph (B)) shall be
deemed to be a clean claim and shall be paid by
the PDP sponsor in accordance with subparagraph
(A).
``(iv) Date of payment of claim.--Payment
of a clean claim under subparagraph (A) is
considered to have been made on the date on
which full payment is received by the provider.
``(E) Electronic transfer of funds.--A PDP sponsor
shall pay all clean claims submitted electronically by
an electronic funds transfer mechanism.''.
(b) Application to MA-PD Plans.--Section 1857(f) of such Act (42
U.S.C. 1395w-27) is amended by adding at the end the following new
paragraph:
``(3) Incorporation of certain prescription drug plan
contract requirements.--The provisions of section 1860D-
12(b)(4) shall apply to contracts with a Medicare Advantage
organization in the same manner as they apply to contracts with
a PDP sponsor offering a prescription drug plan under part
D.''.
(c) Effective Date.--The amendments made by this section shall
apply to contracts entered into or renewed on or after the date of the
enactment of this Act.
SEC. 308. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN
CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO
HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.
Section 416(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2282; 42
U.S.C. 1395l-4(b)) is amended by striking ``2-year'' and inserting ``7-
year''.
SEC. 309. EXTENSION OF TEMPORARY MEDICARE PAYMENT INCREASE FOR HOME
HEALTH SERVICES FURNISHED IN A RURAL AREA.
(a) In General.--Section 421 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Public Law 108-173; 117
Stat. 2283; 42 U.S.C. 1395fff note), as amended by section 5201(b) of
the Deficit Reduction Act of 2005, is amended--
(1) in the heading, by striking ``one-year'' and inserting
``temporary''; and
(2) in subsection (a) by striking ``before April 1, 2005,
and episodes and visits beginning on or after January 1, 2006,
and before January 1, 2007'' and inserting ``before December
31, 2011''.
(b) Application to Certain Home Health Services Furnished Prior to
Date of Enactment.--For episodes and visits for home health services
furnished on or after April 1, 2005, and before the date of the
enactment of this Act, the Secretary of Health and Human Services shall
provide for a lump sum payment, not later than 60 days after such
enactment, of amounts due under the amendment made by subsection
(a)(2).
(c) Effective Date.--The amendments made by subsection (a) shall
apply to episodes and visits on or after April 1, 2005.
TITLE IV--OTHER PROVISIONS
SEC. 401. HEALTH INFORMATION TECHNOLOGY GRANTS FOR RURAL HEALTH CARE
PROVIDERS.
Title II of the Public Health Service Act is amended by adding at
the end the following new part:
``PART D--HEALTH INFORMATION TECHNOLOGY GRANTS
``SEC. 271. GRANTS TO FACILITATE THE WIDESPREAD ADOPTION OF
INTEROPERABLE HEALTH INFORMATION TECHNOLOGY IN RURAL
AREAS.
``(a) Competitive Grants to Eligible Entities in Rural Areas.--
``(1) In general.--The Secretary may award competitive
grants to eligible entities in rural areas to facilitate the
purchase and enhance the utilization of qualified health
information technology systems to improve the quality and
efficiency of health care.
``(2) Eligibility.--To be eligible to receive a grant under
paragraph (1) an entity shall--
``(A) submit to the Secretary an application at
such time, in such manner, and containing such
information as the Secretary may require;
``(B) submit to the Secretary a strategic plan for
the implementation of data sharing and interoperability
measures;
``(C) be a rural health care provider;
``(D) adopt any applicable core interoperability
guidelines (endorsed under other provisions of law);
``(E) agree to notify patients if their
individually identifiable health information is
wrongfully disclosed;
``(F) demonstrate significant financial need; and
``(G) provide matching funds in accordance with
paragraph (4).
``(3) Use of funds.--Amounts received under a grant under
this subsection shall be used to facilitate the purchase and
enhance the utilization of qualified health information
technology systems and training personnel in the use of such
technology.
``(4) Matching requirement.--To be eligible for a grant
under this subsection an entity shall contribute non-Federal
contributions to the costs of carrying out the activities for
which the grant is awarded in an amount equal to $1 for each $3
of Federal funds provided under the grant.
``(5) Limit on grant amount.--In no case shall the payment
amount under this subsection with respect to the purchase or
enhanced utilization of qualified health information technology
for a rural health care provider, in addition to the amount of
any loan made to the provider from a grant to a State under
subsection (b) for such purpose, exceed 100 percent of the
provider's costs for such purchase or enhanced utilization
(taking into account costs for training, implementation, and
maintenance).
``(6) Preference in awarding grants.--In awarding grants to
eligible entities under this subsection, the Secretary shall
give preference to each of the following types of applicants:
``(A) An entity that is located in a frontier or
other rural underserved area as determined by the
Secretary.
``(B) An entity that will link, to the extent
practicable, the qualified health information system to
a local or regional health information plan or plans.
``(C) A rural health care provider that is a
nonprofit hospital or a Federally qualified health
center.
``(D) A rural health care provider that is an
individual practice or group practice.
``(b) Authorization of Appropriations.--
``(1) In general.--For the purpose of carrying out this
section, there is authorized to be appropriated $20,000,000 for
fiscal year 2007, $30,000,000 for fiscal year 2008, and such
sums as may be necessary, but not to exceed $30,000,000 for
each of fiscal years 2009 through 2011.
``(2) Availability.--Amounts appropriated under paragraph
(1) shall remain available through fiscal year 2011.
``(c) Definitions.--In this section:
``(1) Federally qualified health center.--The term
`Federally qualified health center' has the meaning given that
term in section 1861(aa)(4) of the Social Security Act (42
U.S.C. 1395x(aa)(4)).
``(2) Group practice.--The term `group practice' has the
meaning given that term in section 1877(h)(4) of the Social
Security Act (42 U.S.C. 1395nn(h)(4)).
``(3) Health care provider.--The term `health care
provider' means a hospital, skilled nursing facility, home
health agency (as defined in subsection (o) of section 1861 of
the Social Security Act, 42 U.S.C. 1395x), health care clinic,
rural health clinic, Federally qualified health center, group
practice, a pharmacist, a pharmacy, a laboratory, a physician
(as defined in subsection (r) of such section), a practitioner
(as defined in section 1842(b)(18)(CC) of such Act, 42 U.S.C.
1395u(b)(18)(CC)), a health facility operated by or pursuant to
a contract with the Indian Health Service, and any other
category of facility or clinician determined appropriate by the
Secretary.
``(4) Health information; individually identifiable health
information.--The terms `health information' and `individually
identifiable health information' have the meanings given those
terms in paragraphs (4) and (6), respectively, of section 1171
of the Social Security Act (42 U.S.C. 1320d).
``(5) Laboratory.--The term `laboratory' has the meaning
given that term in section 353.
``(6) Pharmacist.--The term `pharmacist' has the meaning
given that term in section 804(a)(2) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 384(a)(2)).
``(7) Qualified health information technology.--The term
`qualified health information technology' means a system or
components of health information technology that meet any
applicable core interoperability guidelines (endorsed under
applicable provisions of law) when in use or that use interface
software that allows for interoperability in accordance with
such guidelines.
``(8) Rural area.--The term `rural area' has the meaning
given such term for purposes of section 1886(d)(2)(D) of the
Social Security Act (42 U.S.C. 1395ww(d)(2)(D)).
``(9) Rural health care provider.--The term `rural health
care provider' means a health care provider that is located in
a rural area.
``(10) State.--The term `State' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.''.
SEC. 402. CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM.
(a) In General.--Part A of title XVI of the Public Health Service
Act (42 U.S.C. 300q et seq.) is amended by adding at the end the
following new section:
``capital infrastructure revolving loan program
``Sec. 1603. (a) Authority To Make and Guarantee Loans.--
``(1) Authority to make loans.--The Secretary may make
loans from the fund established under section 1602(d) to any
rural entity for projects for capital improvements, including--
``(A) the acquisition of land necessary for the
capital improvements;
``(B) the renovation or modernization of any
building;
``(C) the acquisition or repair of fixed or major
movable equipment; and
``(D) such other project expenses as the Secretary
determines appropriate.
``(2) Authority to guarantee loans.--
``(A) In general.--The Secretary may guarantee the
payment of principal and interest for loans made to
rural entities for projects for any capital improvement
described in paragraph (1) to any non-Federal lender.
``(B) Interest subsidies.--In the case of a
guarantee of any loan made to a rural entity under
subparagraph (A), the Secretary may pay to the holder
of such loan, for and on behalf of the project for
which the loan was made, amounts sufficient to reduce
(by not more than 3 percent) the net effective interest
rate otherwise payable on such loan.
``(b) Amount of Loan.--The principal amount of a loan directly made
or guaranteed under subsection (a) for a project for capital
improvement may not exceed $5,000,000.
``(c) Funding Limitations.--
``(1) Government credit subsidy exposure.--The total of the
Government credit subsidy exposure under the Credit Reform Act
of 1990 scoring protocol with respect to the loans outstanding
at any time with respect to which guarantees have been issued,
or which have been directly made, under subsection (a) may not
exceed $50,000,000 per year.
``(2) Total amounts.--Subject to paragraph (1), the total
of the principal amount of all loans directly made or
guaranteed under subsection (a) may not exceed $250,000,000 per
year.
``(d) Capital Assessment and Planning Grants.--
``(1) Nonrepayable grants.--Subject to paragraph (2), the
Secretary may make a grant to a rural entity, in an amount not
to exceed $50,000, for purposes of capital assessment and
business planning.
``(2) Limitation.--The cumulative total of grants awarded
under this subsection may not exceed $2,500,000 per year.
``(e) Termination of Authority.--The Secretary may not directly
make or guarantee any loan under subsection (a) or make a grant under
subsection (d) after September 30, 2010.''.
(b) Rural Entity Defined.--Section 1624 of the Public Health
Service Act (42 U.S.C. 300s-3) is amended by adding at the end the
following new paragraph:
``(15)(A) The term `rural entity' includes--
``(i) a rural health clinic, as defined in section
1861(aa)(2) of the Social Security Act;
``(ii) any medical facility with at least 1 bed,
but with less than 50 beds, that is located in--
``(I) a county that is not part of a
metropolitan statistical area; or
``(II) a rural census tract of a
metropolitan statistical area (as determined
under the most recent modification of the
Goldsmith Modification, originally published in
the Federal Register on February 27, 1992 (57
Fed. Reg. 6725));
``(iii) a hospital that is classified as a rural,
regional, or national referral center under section
1886(d)(5)(C) of the Social Security Act; and
``(iv) a hospital that is a sole community hospital
(as defined in section 1886(d)(5)(D)(iii) of the Social
Security Act).
``(B) For purposes of subparagraph (A), the fact that a
clinic, facility, or hospital has been geographically
reclassified under the Medicare program under title XVIII of
the Social Security Act shall not preclude a hospital from
being considered a rural entity under clause (i) or (ii) of
subparagraph (A).''.
(c) Conforming Amendments.--Section 1602 of the Public Health
Service Act (42 U.S.C. 300q-2) is amended--
(1) in subsection (b)(2)(D), by inserting ``or
1603(a)(2)(B)'' after ``1601(a)(2)(B)''; and
(2) in subsection (d)--
(A) in paragraph (1)(C), by striking ``section
1601(a)(2)(B)'' and inserting ``sections 1601(a)(2)(B)
and 1603(a)(2)(B)''; and
(B) in paragraph (2)(A), by inserting ``or
1603(a)(2)(B)'' after ``1601(a)(2)(B)''.
SEC. 403. RURAL HEALTH QUALITY ADVISORY COMMISSION AND DEMONSTRATION
PROJECTS.
(a) Rural Health Quality Advisory Commission.--
(1) Establishment.--Not later than 6 months after the date
of the enactment of this Act, the Secretary of Health and Human
Services (in this section referred to as the ``Secretary'')
shall establish a commission to be known as the Rural Health
Quality Advisory Commission (in this section referred to as the
``Commission'').
(2) Duties of commission.--
(A) National plan.--The Commission shall develop,
coordinate, and facilitate implementation of a national
plan for rural health quality improvement. The national
plan shall--
(i) identify objectives for rural health
quality improvement;
(ii) identify strategies to eliminate known
gaps in rural health system capacity and
improve rural health quality; and
(iii) provide for Federal programs to
identify opportunities for strengthening and
aligning policies and programs to improve rural
health quality.
(B) Demonstration projects.--The Commission shall
design demonstration projects to test alternative
models for rural health quality improvement, including
with respect to both personal and population health.
(C) Monitoring.--The Commission shall monitor
progress toward the objectives identified pursuant to
paragraph (1)(A).
(3) Membership.--
(A) Number.--The Commission shall be composed of 11
members appointed by the Secretary.
(B) Selection.--The Secretary shall select the
members of the Commission from among individuals with
significant rural health care and health care quality
expertise, including expertise in clinical health care,
health care quality research, population or public
health, or purchaser organizations.
(4) Contracting authority.--Subject to the availability of
funds, the Commission may enter into contracts and make other
arrangements, as may be necessary to carry out the duties
described in paragraph (2).
(5) Staff.--Upon the request of the Commission, the
Secretary may detail, on a reimbursable basis, any of the
personnel of the Office of Rural Health Policy of the Health
Resources and Services Administration, the Agency for Health
Care Quality and Research, or the Centers for Medicare &
Medicaid Services to the Commission to assist in carrying out
this subsection.
(6) Reports to congress.--Not later than 1 year after the
establishment of the Commission, and annually thereafter, the
Commission shall submit a report to the Congress on rural
health quality. Each such report shall include the following:
(A) An inventory of relevant programs and
recommendations for improved coordination and
integration of policy and programs.
(B) An assessment of achievement of the objectives
identified in the national plan developed under
paragraph (2) and recommendations for realizing such
objectives.
(C) Recommendations on Federal legislation,
regulations, or administrative policies to enhance
rural health quality and outcomes.
(b) Rural Health Quality Demonstration Projects.--
(1) In general.--Not later than 270 days after the date of
the enactment of this Act, the Secretary, in consultation with
the Rural Health Quality Advisory Commission, the Office of
Rural Health Policy of the Health Resources and Services
Administration, the Agency for Healthcare Research and Quality,
and the Centers for Medicare & Medicaid Services, shall make
grants to eligible entities for 5 demonstration projects to
implement and evaluate methods for improving the quality of
health care in rural communities. Each such demonstration
project shall include--
(A) alternative community models that--
(i) will achieve greater integration of
personal and population health services; and
(ii) address safety, effectiveness,
patient- or community-centeredness, timeliness,
efficiency, and equity (the six aims identified
by the Institute of Medicine of the National
Academies in its report entitled ``Crossing the
Quality Chasm: A New Health System for the 21st
Century'' released on March 1, 2001);
(B) innovative approaches to the financing and
delivery of health services to achieve rural health
quality goals; and
(C) development of quality improvement support
structures to assist rural health systems and
professionals (such as workforce support structures,
quality monitoring and reporting, clinical care
protocols, and information technology applications).
(2) Eligible entities.--In this subsection, the term
``eligible entity'' means a consortium that--
(A) shall include--
(i) at least one health care provider or
health care delivery system located in a rural
area; and
(ii) at least one organization representing
multiple community stakeholders; and
(B) may include other partners such as rural
research centers.
(3) Consultation.--In developing the program for awarding
grants under this subsection, the Secretary shall consult with
the Administrator of the Agency for Healthcare Research and
Quality, rural health care providers, rural health care
researchers, and private and non-profit groups (including
national associations) which are undertaking similar efforts.
(4) Expedited waivers.--The Secretary shall expedite the
processing of any waiver that--
(A) is authorized under title XVIII or XIX of the
Social Security Act (42 U.S.C. 1395 et seq.); and
(B) is necessary to carry out a demonstration
project under this subsection.
(5) Demonstration project sites.--The Secretary shall
ensure that the 5 demonstration projects funded under this
subsection are conducted at a variety of sites representing the
diversity of rural communities in the Nation.
(6) Duration.--Each demonstration project under this
subsection shall be for a period of 4 years.
(7) Independent evaluation.--The Secretary shall enter into
an arrangement with an entity that has experience working
directly with rural health systems for the conduct of an
independent evaluation of the program carried out under this
subsection.
(8) Report.--Not later than one year after the conclusion
of all of the demonstration projects funded under this
subsection, the Secretary shall submit a report to the Congress
on the results of such projects. The report shall include--
(A) an evaluation of patient access to care,
patient outcomes, and an analysis of the cost
effectiveness of each such project; and
(B) recommendations on Federal legislation,
regulations, or administrative policies to enhance
rural health quality and outcomes.
(c) Appropriation.--
(1) In general.--Out of funds in the Treasury not otherwise
appropriated, there are appropriated to the Secretary to carry
out this Act $30,000,000 for the period of fiscal years 2007
through 2011.
(2) Availability.--
(A) In general.--Funds appropriated under paragraph
(1) shall remain available for expenditure through
fiscal year 2011.
(B) Report.--For purposes of carrying out
subsection (b)(8), funds appropriated under paragraph
(1) shall remain available for expenditure through
fiscal year 2012.
(3) Reservation.--Of the amount appropriated under
paragraph (1), the Secretary shall reserve--
(A) $5,000,000 to carry out subsection (a); and
(B) $25,000,000 to carry out subsection (b), of
which--
(i) 2 percent shall be for the provision of
technical assistance to grant recipients; and
(ii) 5 percent shall be for independent
evaluation under subsection (b)(7).
SEC. 404. RURAL HEALTH CARE SERVICES.
Section 330A of the Public Health Service Act (42 U.S.C. 254c) is
amended to read as follows:
``SEC. 330A. RURAL HEALTH CARE SERVICES OUTREACH, RURAL HEALTH NETWORK
DEVELOPMENT, DELTA RURAL DISPARITIES AND HEALTH SYSTEMS
DEVELOPMENT, AND SMALL RURAL HEALTH CARE PROVIDER QUALITY
IMPROVEMENT GRANT PROGRAMS.
``(a) Purpose.--The purpose of this section is to provide for
grants--
``(1) under subsection (b), to promote rural health care
services outreach;
``(2) under subsection (c), to provide for the planning and
implementation of integrated health care networks in rural
areas;
``(3) under subsection (d), to assist rural communities in
the Delta Region to reduce health disparities and to promote
and enhance health system development; and
``(4) under subsection (e), to provide for the planning and
implementation of small rural health care provider quality
improvement activities.
``(b) Rural Health Care Services Outreach Grants.--
``(1) Grants.--The Director of the Office of Rural Health
Policy of the Health Resources and Services Administration may
award grants to eligible entities to promote rural health care
services outreach by expanding the delivery of health care
services to include new and enhanced services in rural areas.
The Director may award the grants for periods of not more than
3 years.
``(2) Eligibility.--To be eligible to receive a grant under
this subsection for a project, an entity--
``(A) shall be a rural public or rural nonprofit
private entity, a facility that qualifies as a rural
health clinic under title XVIII of the Social Security
Act, a public or nonprofit entity existing exclusively
to provide services to migrant and seasonal farm
workers in rural areas, or a tribal government whose
grant-funded activities will be conducted within
federally recognized tribal areas;
``(B) shall represent a consortium composed of
members--
``(i) that include 3 or more independently-
owned health care entities; and
``(ii) that may be nonprofit or for-profit
entities; and
``(C) shall not previously have received a grant
under this subsection for the same or a similar
project, unless the entity is proposing to expand the
scope of the project or the area that will be served
through the project.
``(3) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall prepare and
submit to the Director an application at such time, in such
manner, and containing such information as the Director may
require, including--
``(A) a description of the project that the
eligible entity will carry out using the funds provided
under the grant;
``(B) a description of the manner in which the
project funded under the grant will meet the health
care needs of rural populations in the local community
or region to be served;
``(C) a plan for quantifying how health care needs
will be met through identification of the target
population and benchmarks of service delivery or health
status, such as--
``(i) quantifiable measurements of health
status improvement for projects focusing on
health promotion; or
``(ii) benchmarks of increased access to
primary care, including tracking factors such
as the number and type of primary care visits,
identification of a medical home, or other
general measures of such access;
``(D) a description of how the local community or
region to be served will be involved in the development
and ongoing operations of the project;
``(E) a plan for sustaining the project after
Federal support for the project has ended;
``(F) a description of how the project will be
evaluated;
``(G) the administrative capacity to submit annual
performance data electronically as specified by the
Director; and
``(H) other such information as the Director
determines to be appropriate.
``(c) Rural Health Network Development Grants.--
``(1) Grants.--
``(A) In general.--The Director may award rural
health network development grants to eligible entities
to promote, through planning and implementation, the
development of integrated health care networks that
have combined the functions of the entities
participating in the networks in order to--
``(i) achieve efficiencies and economies of
scale;
``(ii) expand access to, coordinate, and
improve the quality of the health care delivery
system through development of organizational
efficiencies;
``(iii) implement health information
technology to achieve efficiencies, reduce
medical errors, and improve quality;
``(iv) coordinate care and manage chronic
illness; and
``(v) strengthen the rural health care
system as a whole in such a manner as to show a
quantifiable return on investment to the
participants in the network.
``(B) Grant periods.--The Director may award such a
rural health network development grant--
``(i) for a period of 3 years for
implementation activities; or
``(ii) for a period of 1 year for planning
activities to assist in the initial development
of an integrated health care network, if the
proposed participants in the network do not
have a history of collaborative efforts and a
3-year grant would be inappropriate.
``(2) Eligibility.--To be eligible to receive a grant under
this subsection, an entity--
``(A) shall be a rural public or rural nonprofit
private entity, a facility that qualifies as a rural
health clinic under title XVIII of the Social Security
Act, a public or nonprofit entity existing exclusively
to provide services to migrant and seasonal farm
workers in rural areas, or a tribal government whose
grant-funded activities will be conducted within
federally recognized tribal areas
``(B) shall represent a network composed of
participants--
``(i) that include 3 or more independently-
owned health care entities; and
``(ii) that may be nonprofit or for-profit
entities; and
``(C) shall not previously have received a grant
under this subsection (other than a 1-year grant for
planning activities) for the same or a similar project.
``(3) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity, in consultation with
the appropriate State office of rural health or another
appropriate State entity, shall prepare and submit to the
Director an application at such time, in such manner, and
containing such information as the Director may require,
including--
``(A) a description of the project that the
eligible entity will carry out using the funds provided
under the grant;
``(B) an explanation of the reasons why Federal
assistance is required to carry out the project;
``(C) a description of--
``(i) the history of collaborative
activities carried out by the participants in
the network;
``(ii) the degree to which the participants
are ready to integrate their functions; and
``(iii) how the local community or region
to be served will benefit from and be involved
in the activities carried out by the network;
``(D) a description of how the local community or
region to be served will experience increased access to
quality health care services across the continuum of
care as a result of the integration activities carried
out by the network, including a description of--
``(i) return on investment for the
community and the network members; and
``(ii) other quantifiable performance
measures that show the benefit of the network
activities;
``(E) a plan for sustaining the project after
Federal support for the project has ended;
``(F) a description of how the project will be
evaluated;
``(G) the administrative capacity to submit annual
performance data electronically as specified by the
Director; and
``(H) other such information as the Director
determines to be appropriate.
``(d) Delta Rural Disparities and Health Systems Development
Grants.--
``(1) Grants.--The Director may award grants to eligible
entities to support reduction of health disparities, improve
access to health care, and enhance rural health system
development in the Delta Region.
``(2) Eligibility.--To be eligible to receive a grant under
this subsection, an entity shall be a rural public or rural
nonprofit private entity, a facility that qualifies as a rural
health clinic under title XVIII of the Social Security Act, a
public or nonprofit entity existing exclusively to provide
services to migrant and seasonal farm workers in rural areas,
or a tribal government whose grant-funded activities will be
conducted within federally recognized tribal areas.
``(3) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall prepare and
submit to the Director an application at such time, in such
manner, and containing such information as the Director may
require, including--
``(A) a description of the project that the
eligible entity will carry out using the funds provided
under the grant;
``(B) an explanation of the reasons why Federal
assistance is required to carry out the project;
``(C) a description of the manner in which the
project funded under the grant will meet the health
care needs of the Delta Region;
``(D) a description of how the local community or
region to be served will experience increased access to
quality health care services as a result of the
activities carried out by the entity;
``(E) a description of how health disparities will
be reduced or the health system will be improved;
``(F) a plan for sustaining the project after
Federal support for the project has ended;
``(G) a description of how the project will be
evaluated including process and outcome measures
related to the quality of care provided or how the
health care system improves its performance;
``(H) a description of how the grantee will develop
an advisory group made up of representatives of the
communities to be served to provide guidance to the
grantee to best meet community need; and
``(I) other such information as the Director
determines to be appropriate.
``(e) Small Rural Health Care Provider Quality Improvement
Grants.--
``(1) Grants.--The Director may award grants to provide for
the planning and implementation of small rural health care
provider quality improvement activities. The Director may award
the grants for periods of 1 to 3 years.
``(2) Eligibility.--To be eligible for a grant under this
subsection, an entity--
``(A) shall be--
``(i) a rural public or rural nonprofit
private health care provider or provider of
health care services, such as a rural health
clinic; or
``(ii) another rural provider or network of
small rural providers identified by the
Director as a key source of local care; and
``(B) shall not previously have received a grant
under this subsection for the same or a similar
project.
``(3) Preference.--In awarding grants under this
subsection, the Director shall give preference to facilities
that qualify as rural health clinics under title XVIII of the
Social Security Act.
``(4) Applications.--To be eligible to receive a grant
under this subsection, an eligible entity shall prepare and
submit to the Director an application at such time, in such
manner, and containing such information as the Director may
require, including--
``(A) a description of the project that the
eligible entity will carry out using the funds provided
under the grant;
``(B) an explanation of the reasons why Federal
assistance is required to carry out the project;
``(C) a description of the manner in which the
project funded under the grant will assure continuous
quality improvement in the provision of services by the
entity;
``(D) a description of how the local community or
region to be served will experience increased access to
quality health care services as a result of the
activities carried out by the entity;
``(E) a plan for sustaining the project after
Federal support for the project has ended;
``(F) a description of how the project will be
evaluated including process and outcome measures
related to the quality of care provided; and
``(G) other such information as the Director
determines to be appropriate.
``(f) General Requirements.--
``(1) Prohibited uses of funds.--An entity that receives a
grant under this section may not use funds provided through the
grant--
``(A) to build or acquire real property; or
``(B) for construction.
``(2) Coordination with other agencies.--The Director shall
coordinate activities carried out under grant programs
described in this section, to the extent practicable, with
Federal and State agencies and nonprofit organizations that are
operating similar grant programs, to maximize the effect of
public dollars in funding meritorious proposals.
``(g) Report.--Not later than September 30, 2009, the Secretary
shall prepare and submit to the appropriate committees of Congress a
report on the progress and accomplishments of the grant programs
described in subsections (b), (c), (d), and (e).
``(h) Definitions.--In this section:
``(1) The term `Delta Region' has the meaning given to the
term `region' in section 382A of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2009aa).
``(2) The term `Director' means the Director of the Office
of Rural Health Policy of the Health Resources and Services
Administration.
``(i) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $40,000,000 for fiscal year
2007, and such sums as may be necessary for each of fiscal years 2008
through 2011.''.
SEC. 405. COMMUNITY HEALTH CENTER COLLABORATIVE ACCESS EXPANSION.
Section 330 of the Public Health Service Act (42 U.S.C. 254b) is
amended by adding at the end the following:
``(s) Miscellaneous Provisions.--
``(1) Rule of construction with respect to rural health
clinics.--
``(A) In general.--Nothing in this section shall be
construed to prevent a community health center from
contracting with a federally certified rural health
clinic (as defined by section 1861(aa)(2) of the Social
Security Act) for the delivery of primary health care
services that are available at the rural health clinic
to individuals who would otherwise be eligible for free
or reduced cost care if that individual were able to
obtain that care at the community health center. Such
services may be limited in scope to those primary
health care services available in that rural health
clinic.
``(B) Assurances.--In order for a rural health
clinic to receive funds under this section through a
contract with a community health center under paragraph
(1), such rural health clinic shall establish policies
to ensure--
``(i) nondiscrimination based upon the
ability of a patient to pay; and
``(ii) the establishment of a sliding fee
scale for low-income patients.''.
SEC. 406. FACILITATING THE PROVISION OF TELEHEALTH SERVICES ACROSS
STATE LINES.
(a) In General.--For purposes of expediting the provision of
telehealth services, for which payment is made under the Medicare
program, across State lines, the Secretary of Health and Human Services
shall, in consultation with representatives of States, physicians,
health care practitioners, and patient advocates, encourage and
facilitate the adoption of provisions allowing for multistate
practitioner practice across State lines.
(b) Definitions.--In subsection (a):
(1) Telehealth service.--The term ``telehealth service''
has the meaning given that term in subparagraph (F) of section
1834(m)(4) of the Social Security Act (42 U.S.C. 1395m(m)(4)).
(2) Physician, practitioner.--The terms ``physician'' and
``practitioner'' have the meaning given those terms in
subparagraphs (D) and (E), respectively, of such section.
(3) Medicare program.--The term ``Medicare program'' means
the program of health insurance administered by the Secretary
of Health and Human Services under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.).
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