[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3300 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3300

    To amend title XVIII of the Social Security Act to provide for 
   temporary improvements to the Medicare inpatient hospital payment 
 adjustment for low-volume hospitals and to provide for the use of the 
non-wage adjusted PPS rate under the Medicare-dependent hospital (MDH) 
                    program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2008

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

_______________________________________________________________________

                                 A BILL


 
    To amend title XVIII of the Social Security Act to provide for 
   temporary improvements to the Medicare inpatient hospital payment 
 adjustment for low-volume hospitals and to provide for the use of the 
non-wage adjusted PPS rate under the Medicare-dependent hospital (MDH) 
                    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.

    This Act may be cited as the ``Rural Hospital Assistance Act of 
2008''.

SEC. 2. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
              PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    (a) In General.--Section 1886(d)(12) of the Social Security Act (42 
U.S.C. 1395ww(d)(12)) is amended--
            (1) in subparagraph (A), by inserting ``or (D) (for 
        discharges occurring in fiscal year 2009)'' after 
        ``subparagraph (B)'';
            (2) in subparagraph (B), by striking ``The Secretary'' and 
        inserting ``Except as provided in subparagraph (D), the 
        Secretary'';
            (3) in subparagraph (C)(i)--
                    (A) by inserting ``(or, with respect to fiscal year 
                2009, 15 road miles)'' after ``25 road miles''; and
                    (B) by inserting ``(or, with respect to fiscal year 
                2009, 1,500 discharges of individuals entitled to, or 
                enrolled for, benefits under part A)'' after ``800 
                discharges''; and
            (4) by adding at the end the following new subparagraph:
                    ``(D) Temporary applicable percentage increase.--
                For discharges occurring in fiscal year 2009, the 
                Secretary shall determine an applicable percentage 
                increase for purposes of subparagraph (A) using a 
                continuous linear sliding scale ranging from 25 percent 
                for low-volume hospitals with 200 or fewer discharges 
                of individuals entitled to, or enrolled for, benefits 
                under part A in the fiscal year to 0 percent for low-
                volume hospitals with greater than 1,500 discharges of 
                such individuals in the fiscal year.''.
    (b) Implementation.--Notwithstanding any other provision of law, 
the Secretary of Health and Human Services may implement the amendments 
made by subsection (a) by program instruction or otherwise.

SEC. 3. USE OF NON-WAGE ADJUSTED PPS RATE UNDER THE MEDICARE-DEPENDENT 
              HOSPITAL (MDH) PROGRAM.

    (a) In General.--Section 1886(d)(5)(G) of the Social Security Act 
(42 U.S.C. 1395ww(d)(5)(G)) is amended by adding at the end the 
following new clause:
    ``(v) In the case of discharges occurring on or after October 1, 
2008, and before October 1, 2009, in determining the amount under 
paragraph (1)(A)(iii) for purposes of clauses (i) and (ii)(II), such 
amount shall, if it results in greater payments to the hospital, be 
determined without regard to any adjustment for different area wage 
levels under paragraph (3)(E).''.
    (b) Implementation.--Notwithstanding any other provision of law, 
the Secretary of Health and Human Services may implement the amendment 
made by subsection (a) by program instruction or otherwise.

SEC. 4. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBITION ON CERTAIN 
              PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';
            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) the hospital meets the requirements described 
                in subsection (i)(1) not later than 18 months after the 
                date of the enactment of this subparagraph.''; and
            (3) by adding at the end the following new subsection:
    ``(i) Requirements for Hospitals To Qualify for Hospital Exception 
to Ownership or Investment Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph for a 
        hospital are as follows:
                    ``(A) Provider agreement.--The hospital had--
                            ``(i) physician ownership on September 1, 
                        2008; and
                            ``(ii) a provider agreement under section 
                        1866 in effect on such date.
                    ``(B) Limitation on expansion of facility 
                capacity.--Except as provided in paragraph (3), the 
                number of operating rooms, procedure rooms, and beds of 
                the hospital at any time on or after the date of the 
                enactment of this subsection are no greater than the 
                number of operating rooms, procedure rooms, and beds as 
                of such date.
                    ``(C) Preventing conflicts of interest.--
                            ``(i) The hospital submits to the Secretary 
                        an annual report containing a detailed 
                        description of--
                                    ``(I) the identity of each 
                                physician owner and any other owners of 
                                the hospital; and
                                    ``(II) the nature and extent of all 
                                ownership interests in the hospital.
                            ``(ii) The hospital has procedures in place 
                        to require that any referring physician owner 
                        discloses to the patient being referred, by a 
                        time that permits the patient to make a 
                        meaningful decision regarding the receipt of 
                        care, as determined by the Secretary--
                                    ``(I) the ownership interest of 
                                such referring physician in the 
                                hospital; and
                                    ``(II) if applicable, any such 
                                ownership interest of the treating 
                                physician.
                            ``(iii) The hospital does not condition any 
                        physician ownership interests either directly 
                        or indirectly on the physician owner making or 
                        influencing referrals to the hospital or 
                        otherwise generating business for the hospital.
                            ``(iv) The hospital discloses the fact that 
                        the hospital is partially owned by physicians--
                                    ``(I) on any public website for the 
                                hospital; and
                                    ``(II) in any public advertising 
                                for the hospital.
                    ``(D) Ensuring bona fide investment.--
                            ``(i) Physician owners in the aggregate do 
                        not own more than the greater of--
                                    ``(I) 40 percent of the total value 
                                of the investment interests held in the 
                                hospital or in an entity whose assets 
                                include the hospital; or
                                    ``(II) the percentage of such total 
                                value determined on the date of 
                                enactment of this subsection.
                            ``(ii) Any ownership or investment 
                        interests that the hospital offers to a 
                        physician owner are not offered on more 
                        favorable terms than the terms offered to a 
                        person who is not a physician owner.
                            ``(iii) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        provide loans or financing for any physician 
                        owner investments in the hospital.
                            ``(iv) The hospital (or any investors in 
                        the hospital) does not directly or indirectly 
                        guarantee a loan, make a payment toward a loan, 
                        or otherwise subsidize a loan, for any 
                        individual physician owner or group of 
                        physician owners that is related to acquiring 
                        any ownership interest in the hospital.
                            ``(v) Investment returns are distributed to 
                        each investor in the hospital in an amount that 
                        is directly proportional to the ownership 
                        interest of such investor in the hospital.
                            ``(vi) Physician owners do not receive, 
                        directly or indirectly, any guaranteed receipt 
                        of or right to purchase other business 
                        interests related to the hospital, including 
                        the purchase or lease of any property under the 
                        control of other investors in the hospital or 
                        located near the premises of the hospital.
                            ``(vii) The hospital does not offer a 
                        physician owner the opportunity to purchase or 
                        lease any property under the control of the 
                        hospital or any other investor in the hospital 
                        on more favorable terms than the terms offered 
                        to an individual who is not a physician owner.
                    ``(E) Patient safety.--
                            ``(i) Insofar as the hospital admits a 
                        patient and does not have any physician 
                        available on the premises to provide services 
                        during all hours in which the hospital is 
                        providing services to such patient, before 
                        admitting the patient--
                                    ``(I) the hospital discloses such 
                                fact to a patient; and
                                    ``(II) following such disclosure, 
                                the hospital receives from the patient 
                                a signed acknowledgment that the 
                                patient understands such fact.
                            ``(ii) The hospital has the capacity to--
                                    ``(I) provide assessment and 
                                initial treatment for patients; and
                                    ``(II) refer and transfer patients 
                                to hospitals with the capability to 
                                treat the needs of the patient 
                                involved.
                    ``(F) Limitation on application to certain 
                converted facilities.--The hospital was not converted 
                from an ambulatory surgical center to a hospital on or 
                after the date of enactment of this subsection.
            ``(2) Publication of information reported.--The Secretary 
        shall publish, and update on an annual basis, the information 
        submitted by hospitals under paragraph (1)(C)(i) on the public 
        Internet website of the Centers for Medicare & Medicaid 
        Services.
            ``(3) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                            ``(i) Establishment.--The Secretary shall 
                        establish and implement a process under which 
                        an applicable hospital (as defined in 
                        subparagraph (E)) may apply for an exception 
                        from the requirement under paragraph (1)(B).
                            ``(ii) Opportunity for community input.--
                        The process under clause (i) shall provide 
                        individuals and entities in the community that 
                        the applicable hospital applying for an 
                        exception is located with the opportunity to 
                        provide input with respect to the application.
                            ``(iii) Timing for implementation.--The 
                        Secretary shall implement the process under 
                        clause (i) on November 1, 2009.
                            ``(iv) Regulations.--Not later than 
                        November 1, 2009, the Secretary shall 
                        promulgate regulations to carry out the process 
                        under clause (i).
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit an applicable hospital to 
                apply for an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                            ``(i) In general.--Subject to clause (ii) 
                        and subparagraph (D), an applicable hospital 
                        granted an exception under the process 
                        described in subparagraph (A) may increase the 
                        number of operating rooms, procedure rooms, and 
                        beds of the applicable hospital above the 
                        baseline number of operating rooms, procedure 
                        rooms, and beds of the applicable hospital (or, 
                        if the applicable hospital has been granted a 
                        previous exception under this paragraph, above 
                        the number of operating rooms, procedure rooms, 
                        and beds of the hospital after the application 
                        of the most recent increase under such an 
                        exception).
                            ``(ii) Lifetime 100 percent increase 
                        limitation.--The Secretary shall not permit an 
                        increase in the number of operating rooms, 
                        procedure rooms, and beds of an applicable 
                        hospital under clause (i) to the extent such 
                        increase would result in the number of 
                        operating rooms, procedure rooms, and beds of 
                        the applicable hospital exceeding 200 percent 
                        of the baseline number of operating rooms, 
                        procedure rooms, and beds of the applicable 
                        hospital.
                            ``(iii) Baseline number of operating rooms, 
                        procedure rooms, and beds.--In this paragraph, 
                        the term `baseline number of operating rooms, 
                        procedure rooms, and beds' means the number of 
                        operating rooms, procedure rooms, and beds of 
                        the applicable hospital as of the date of 
                        enactment of this subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, and beds of an 
                applicable hospital pursuant to this paragraph may only 
                occur in facilities on the main campus of the 
                applicable hospital.
                    ``(E) Applicable hospital.--In this paragraph, the 
                term `applicable hospital' means a hospital--
                            ``(i) that is located in a county in which 
                        the percentage increase in the population 
                        during the most recent 5-year period (as of the 
                        date of the application under subparagraph (A)) 
                        is at least 150 percent of the percentage 
                        increase in the population growth of the State 
                        in which the hospital is located during that 
                        period, as estimated by Bureau of the Census;
                            ``(ii) whose annual percent of total 
                        inpatient admissions that represent inpatient 
                        admissions under the program under title XIX is 
                        equal to or greater than the average percent 
                        with respect to such admissions for all 
                        hospitals located in the county in which the 
                        hospital is located;
                            ``(iii) that does not discriminate against 
                        beneficiaries of Federal health care programs 
                        and does not permit physicians practicing at 
                        the hospital to discriminate against such 
                        beneficiaries;
                            ``(iv) that is located in a State in which 
                        the average bed capacity in the State is less 
                        than the national average bed capacity; and
                            ``(v) that has an average bed occupancy 
                        rate that is greater than the average bed 
                        occupancy rate in the State in which the 
                        hospital is located.
                    ``(F) Procedure rooms.--In this subsection, the 
                term `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are performed, except such term shall not 
                include emergency rooms or departments (exclusive of 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are performed).
                    ``(G) Publication of final decisions.--Not later 
                than 60 days after receiving a complete application 
                under this paragraph, the Secretary shall publish in 
                the Federal Register the final decision with respect to 
                such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the process under this 
                paragraph (including the establishment of such 
                process).
            ``(4) Collection of ownership and investment information.--
        For purposes of subparagraphs (A)(i) and (D)(i) of paragraph 
        (1), the Secretary shall collect physician ownership and 
        investment information for each hospital.
            ``(5) Physician owner defined.--For purposes of this 
        subsection, the term `physician owner' means a physician (or an 
        immediate family member of such physician) with a direct or an 
        indirect ownership interest in the hospital.''.
    (b) Enforcement.--
            (1) Ensuring compliance.--The Secretary of Health and Human 
        Services shall establish policies and procedures to ensure 
        compliance with the requirements described in subsection (i)(1) 
        of section 1877 of the Social Security Act, as added by 
        subsection (a)(3), beginning on the date such requirements 
        first apply. Such policies and procedures may include 
        unannounced site reviews of hospitals.
            (2) Audits.--Beginning not later than January 1, 2010, the 
        Secretary of Health and Human Services shall conduct audits to 
        determine if hospitals violate the requirements referred to in 
        paragraph (1).
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