[Congressional Record Volume 141, Number 104 (Friday, June 23, 1995)]
[Senate]
[Pages S8998-S9001]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Grassley and Mr. Rockefeller):
  S. 963. A bill to amend the Medicare Program under title XVIII of the 
Social Security Act to improve rural health services, and for other 
purposes; to the Committee on Finance.


             THE RURAL HEALTH CARE IMPROVEMENT ACT OF 1995

  Mr. BAUCUS. Mr. President, I rise to introduce, along with Senator 
Grassley and Senator Rockefeller, the Rural Health Care Improvement Act 
of 1995.
  They say that if you have your health, you have everything. Well, I 
must say that for the small communities all across Montana and America, 
access to health care is in danger. It is very tough to get good health 
care in rural parts of our country. What with cuts in Medicare 
reimbursement, 10 percent of the America's rural hospitals closed in 
the last decade. Ten percent of our rural hospitals have closed. The 
trend, unfortunately, shows no signs of improving.
  And the rural health care crisis goes beyond access. That is because 
insurance policies are going up faster for the people who can least 
afford to pay--that is self-insured people like farmers, ranchers, and 
small business owners all across our country.
  Rural areas also find it harder than cities and suburbs to attract 
doctors, to attract nurses, to attract people to provide health care. 
And health care providers in rural areas have less access to state-of-
the-art medical technology than their colleagues do in the big cities 
and in the suburbs.
  Yet, the Federal Government's usual approach to rural health care 
issues is one of indifference. No top-level official has the task of 
keeping rural health care firmly in line.
  Renewing the tax credit for self-insured people was just a start. We 
need to preserve health care services in small towns. Rural doctors and 
nurses must be able to use the best available technology. And the 
Government must give permanent, top-level attention to rural health 
care issues.
  That is the comprehensive strategy that this bill provides.
  Let me review it in just brief detail.
  First, keeping hospitals and clinics in small rural towns open. It is 
critical that these clinics stay open.
  Our small rural hospitals have suffered for years with rigid and 
expensive Medicare regulations and Medicare reimbursements too low to 
let them stay open. So a few years ago I helped pass a bill giving some 
rural hospitals greater flexibility and Medicare reimbursements high 
enough to stay open.
  This project is called the Medical Assistance Facility, otherwise 
known as MAF. They operate in Culbertson, Jordan, Circle, Terry, and 
Ekalaka, serving over 20,000 people.
  That might not sound like very many people when you add the towns 
together, but let me tell you, when you are a town like Circle or 
Ekalaka, hundreds of miles away from the best of health care service in 
the world, these small clinics make a big, big difference. They are 
very important to them. The MAF maintains access to basic, acute, and 
emergency care services and provides inpatient care for up to 4 days. 
They have received glowing reviews from health experts, and other 
States have called in to ask how they can set up similar facilities.
  But most important, people in these towns believe it is 
irreplaceable. Walter Busch, the administrator of Roosevelt Medical 
Center in Culbertson, had this to say:

       The medical assistance facility has improved access to 
     quality health care services

[[Page S8999]]

     in a cost-effective manner. It has restored health care 
     services to four remote, rural communities and prevented loss 
     of services in two others. It is a very flexible program and 
     yet one that has provided consistently high quality care.

  Let me underline that point, Mr. President. Without MAF's, medical 
assistance facilities, or similar clinics, many small towns would have 
virtually no health care service. The MAF preserves health services and 
it saves money. A new GAO report will show that the MAF saved over 
$60,000 per 172 patients. So especially when the leadership's proposed 
Medicare and Medicaid cuts will so drastically increase the pressure on 
rural hospitals, we must keep them open. Our legislation makes the MAF 
permanent and allows similar facilities to open up all over rural 
America.
  The second section offers grants for what is called telemedicine. 
These grants will let rural doctors and nurses upgrade their 
telecommunications and use modern computer networks to confer with 
specialists in other parts of our country. So a family practitioner, 
for example, with a tough case in Fergus County or on the Hi-line can 
have access to diagnostic files and also access to techniques at the 
National Institutes of Health or the Centers for Disease Control.
  Just think of it. With the computer, a doctor or a nurse in a very 
small town in a small clinic can have access to files and techniques of 
the very best all around the Nation. They might not be able to use all 
the techniques, but at least he or she knows what is available and has 
a lot better access, a lot better information and can give better 
treatment for that patient.
  We also include another program of grants to encourage networking 
among rural health care providers. This would let them share 
information on equipment and also, again, share techniques specifically 
designed for rural areas and also help allow much more cooperation and 
also more effective cooperation than exists today.
  Third and last is a new permanent position of Assistant Secretary for 
Rural Health at the Department of Health and Human Services in 
Washington, DC. My State of Montana and a lot of States need more 
advocates within the Federal Government. People living in very rural, 
isolated areas need better advocates and more advocates in the Federal 
Government, more people who understand our unique problems and will 
push for solutions because, after all, there are a lot more people in 
the cities who push for city solutions. We need some way to kind of 
counterbalance, Mr. President, the advantage that the city folks have 
so that people in rural areas at least have someone to stand up for 
them and argue their case so that problems are not further exacerbated 
because they do not have someone.
  So when this bill passes, the Department of Health and Human 
Services, with its hundreds of thousands of employees, will have a top-
level official whose job it is to remember small towns like Culbertson, 
MT.
  This will put a higher priority on rural health care and make sure 
that we have someone in the room when final decisions are made, for 
example, on Medicare or Medicaid and other health care programs.
  Mr. President, rural America deserves fairness just like urban, big 
city America needs fairness. We in rural America deserve the same 
access to top-quality doctors and nurses, to new medical technologies 
and to basic health care just as everybody else does in America. And 
through this bill, without much expense, rural America can get 
fairness. It is just that simple.
  I ask unanimous consent, Mr. President, to include a copy of the bill 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 963

       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 Health Improvement Act 
     of 1995''.

     SEC. 2. MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.

       (a) Findings and Purpose.--
       (1) Findings.--The Congress finds the following:
       (A) One-quarter of the United States population, or about 
     65 million persons, reside in rural areas. Rural areas have a 
     larger proportion of elderly residents. Rural populations 
     have a higher infant mortality rate, and a 40 percent higher 
     rate of death from accidents.
       (B) Rural hospitals are forced to comply with burdensome 
     and inflexible medicare requirements that do not fit the 
     realities of the rural environment.
       (C) Rural hospitals are inadequately reimbursed by the 
     medicare program.
       (D) Inadequate medicare reimbursement and burdensome and 
     inflexible requirements contribute to the high closure rate 
     among rural hospitals, resulting in reduced access to primary 
     care and emergency services for millions of rural residents.
       (E) Medical assistance facilities have been operating in 
     Montana since 1990 and rural primary care hospitals have been 
     operating since 1993. Both programs help rural hospitals 
     adapt to the changing health care needs of the local 
     community.
       (F) The Inspector General of the Department of Health and 
     Human Services has found that medical assistance facilities--
       (i) provide access to health care in remote rural areas; 
     and
       (ii) are cost efficient.
       (G) The Inspector General of the Department of Health and 
     Human Services found that flexible medicare requirements are 
     key to the success of medical assistance facilities.
       (H) Twenty-one states applied to the Essential Access 
     Hospital (EACH) program authorized in the Omnibus Budget 
     Reconciliation Act of 1989. Seven states, West Virginia, 
     California, Colorado, Kansas, New York, North Carolina, and 
     South Dakota were awarded grants. Eleven hospitals have been 
     designated rural primary care hospitals since final Federal 
     regulations became effective in 1993.
       (I) Medical assistance facilities and rural primary care 
     hospitals promote the development of rural health care 
     networks and result in increased access for rural residents 
     to a variety of health care services.
       (2) Purpose.--The purpose of this section is to establish 
     the medicare rural hospital flexibility program and to allow 
     all States to develop critical access hospitals.
       (b) Medicare Rural Hospital Flexibility Program.--Section 
     1820 of the Social Security Act (42 U.S.C. 1395i-4) is 
     amended to read as follows:


             ``medicare rural hospital flexibility program

       ``Sec. 1820. (a) Purpose.--The purpose of this section is 
     to--
       ``(1) ensure access to health care services for rural 
     communities by allowing hospitals to be designated as 
     critical access hospitals if such hospitals limit the scope 
     of available inpatient acute care services;
       ``(2) provide more appropriate and flexible staffing and 
     licensure standards;
       ``(3) enhance the financial security of critical access 
     hospitals by requiring that medicare reimburse such 
     facilities on a reasonable cost basis; and
       ``(4) promote linkages between critical access hospitals 
     designated by the State under this section and broader 
     programs supporting the development of and transition to 
     integrated provider networks.
       ``(b) Establishment.--Any State that submits an application 
     in accordance with subsection (c) may establish a medicare 
     rural hospital flexibility program described in subsection 
     (d).
       ``(c) Application.--A State may establish a medicare rural 
     hospital flexibility program described in subsection (d) if 
     the State submits to the Secretary at such time and in such 
     form as the Secretary may require an application containing--
       ``(1) assurances that the State--
       ``(A) has developed, or is in the process of developing, a 
     State rural health care plan that--
       ``(i) provides for the creation of one or more rural health 
     networks (as defined in subsection (e)) in the State,
       ``(ii) promotes regionalization of rural health services in 
     the State, and
       ``(iii) improves access to hospital and other health 
     services for rural residents of the State;
       ``(B) has developed the rural health care plan described in 
     subparagraph (A) in consultation with the hospital 
     association of the State, rural hospitals located in the 
     State, and the State Office of Rural Health (or, in the case 
     of a State in the process of developing such plan, that 
     assures the Secretary that the State will consult with its 
     State hospital association, rural hospitals located in the 
     State, and the State Office of Rural Health in developing 
     such plan);
       ``(2) assurances that the State has designated (consistent 
     with the rural health care plan described in paragraph 
     (1)(A)), or is in the process of so designating, rural 
     nonprofit or public hospitals or facilities located in the 
     State as critical access hospitals; and
       ``(3) such other information and assurances as the 
     Secretary may require.
       ``(d) Medicare Rural Hospital Flexibility Program 
     Described.--
       ``(1) In general.--A State that has submitted an 
     application in accordance with subsection (c), may establish 
     a medicare rural hospital flexibility program that provides 
     that--
       ``(A) the State shall develop at least one rural health 
     network (as defined in subsection (e)) in the State; and
       ``(B) at least one facility in the State shall be 
     designated as a critical access hospital in accordance with 
     paragraph (2).

[[Page S9000]]

       ``(2) State designation of facilities.--
       ``(A) In general.--A State may designate one or more 
     facilities as a critical access hospital in accordance with 
     subparagraph (B).
       ``(B) Criteria for designation as critical access 
     hospital.--A State may designate a facility as a critical 
     access hospital if the facility--
       ``(i) is located in a county (or equivalent unit of local 
     government) in a rural area (as defined in section 
     1886(d)(2)(D)) that--

       ``(I) is located more than a 35-mile drive from a hospital, 
     or another facility described in this subsection, or
       ``(II) is certified by the State as being a necessary 
     provider of health care services to residents in the area; 
     and

       ``(ii) makes available 24-hour emergency care services that 
     a State determines are necessary for ensuring access to 
     emergency care services in each area served by a critical 
     access hospital;
       ``(iii) provides not more than 15 acute care inpatient beds 
     (meeting such standards as the Secretary may establish) for 
     providing inpatient care for a period not to exceed 96 hours 
     (unless a longer period is required because transfer to a 
     hospital is precluded because of inclement weather or other 
     emergency conditions), except that a peer review organization 
     or equivalent entity may, on request, waive the 96-hour 
     restriction on a case-by-case basis;
       ``(iv) meets such staffing requirements as would apply 
     under section 1861(e) to a hospital located in a rural area, 
     except that--

       ``(I) the facility need not meet hospital standards 
     relating to the number of hours during a day, or days during 
     a week, in which the facility must be open and fully staffed, 
     except insofar as the facility is required to make available 
     emergency care services as determined under clause (ii) and 
     must have nursing services available on a 24-hour basis, but 
     need not otherwise staff the facility except when an 
     inpatient is present,
       ``(II) the facility may provide any services otherwise 
     required to be provided by a full-time, on site dietician, 
     pharmacist, laboratory technician, medical technologist, and 
     radiological technologist on a part-time, off site basis 
     under arrangements as defined in section 1861(w)(1), and
       ``(III) the inpatient care described in clause (iii) may be 
     provided by a physician's assistant, nurse practitioner, or 
     clinical nurse specialist subject to the oversight of a 
     physician who need not be present in the facility; and

       ``(v) meets the requirements of subparagraph (I) of 
     paragraph (2) of section 1861(aa).
       ``(e) Rural Health Network Defined.--
       ``(1) In general.--For purposes of this section, the term 
     `rural health network' means, with respect to a State, an 
     organization consisting of--
       ``(A) at least 1 facility that the State has designated or 
     plans to designate as a critical access hospital, and
       ``(B) at least 1 hospital that furnishes acute care 
     services.
       ``(2) Agreements.--
       ``(A) In general.--Each critical access hospital that is a 
     member of a rural health network shall have an agreement with 
     respect to each item described in subparagraph (B) with at 
     least 1 hospital that is a member of the network.
       ``(B) Items described.--The items described in this 
     subparagraph are the following:
       ``(i) Patient referral and transfer.
       ``(ii) The development and use of communications systems 
     including (where feasible)--

       ``(I) telemetry systems, and
       ``(II) systems for electronic sharing of patient data.

       ``(iii) The provision of emergency and non-emergency 
     transportation among the facility and the hospital.
       ``(C) Credentialing and quality assurance.--Each critical 
     access hospital that is a member of a rural health network 
     shall have an agreement with respect to credentialing and 
     quality assurance with at least 1--
       ``(i) hospital that is a member of the network;
       ``(ii) peer review organization or equivalent entity; or
       ``(iii) other appropriate and qualified entity identified 
     in the State rural health care plan.
       ``(f) Certification by the Secretary.--The Secretary shall 
     certify a facility as a critical access hospital if the 
     facility--
       ``(1) is located in a State that has established a medicare 
     rural hospital flexibility program in accordance with 
     subsection (d);
       ``(2) is designated as a critical access hospital by the 
     State in which it is located; and
       ``(3) meets such other criteria as the Secretary may 
     require.
       ``(g) Permitting Maintenance of Swing Beds.--Nothing in 
     this section shall be construed to prohibit a State from 
     designating or the Secretary from certifying a facility as a 
     critical access hospital solely because, at the time the 
     facility applies to the State for designation as a critical 
     access hospital, there is in effect an agreement between the 
     facility and the Secretary under section 1883 under which the 
     facility's inpatient hospital facilities are used for the 
     furnishing of extended care services, except that the number 
     of beds used for the furnishing of such services may not 
     exceed the total number of licensed inpatient beds at the 
     time the facility applies to the State for such designation 
     (minus the number of inpatient beds used for providing 
     inpatient care in the facility pursuant to subsection 
     (d)(2)(A)(iii)). For purposes of the previous sentence, the 
     number of beds of the facility used for the furnishing of 
     extended care services shall not include any beds of a unit 
     of the facility that is licensed as a distinct-part skilled 
     nursing facility at the time the facility applies to the 
     State for designation as a critical access hospital.
       ``(h) Grants.--
       ``(1) Medicare rural hospital flexibility program.--The 
     Secretary may award grants to States that have submitted 
     applications in accordance with subsection (c) for--
       ``(A) engaging in activities relating to planning and 
     implementing a rural health care plan;
       ``(B) engaging in activities relating to planning and 
     implementing rural health networks; and
       ``(C) designating facilities as critical access hospitals.
       ``(2) Rural emergency medical services.--
       ``(A) In general.--The Secretary may award grants to States 
     that have submitted applications in accordance with 
     subparagraph (B) for the establishment or expansion of a 
     program for the provision of rural emergency medical 
     services.
       ``(B) Application.--An application is in accordance with 
     this subparagraph if the State submits to the Secretary at 
     such time and in such form as the Secretary may require an 
     application containing the assurances described in 
     subparagraphs (A)(ii), (A)(iii), and (B) of subsection (c)(1) 
     and paragraph (3) of such subsection.
       ``(i) Grandfathering of Certain Facilities.--
       ``(1) In general.--Any medical assistance facility 
     operating in Montana and any rural primary care hospital 
     designated by the Secretary under this section prior to the 
     date of the enactment of the Rural Health Improvement Act of 
     1995 shall be deemed to have been certified by the Secretary 
     under subsection (f) as a critical access hospital if such 
     facility or hospital is otherwise eligible to be designated 
     by the State as a critical access hospital under subsection 
     (d).
       ``(2) Continuation of medical assistance facility and rural 
     primary care hospital terms.--Notwithstanding any other 
     provision of this title, with respect to any medical 
     assistance facility or rural primary care hospital described 
     in paragraph (1), any reference in this title to a `critical 
     access hospital' shall be deemed to be a reference to a 
     `medical assistance facility' or `rural primary care 
     hospital'.
       ``(j) Waiver of Conflicting Part A Provisions.--The 
     Secretary is authorized to waive such provisions of this part 
     and part C as are necessary to conduct the program 
     established under this section.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated from the Federal Hospital 
     Insurance Trust Fund for making grants to all States under 
     subsection (h), $25,000,000 in each of the fiscal years 1996 
     through 2000.''.
       (c) Report on Alternative to 96-Hour Rule.--Not later than 
     January 1, 1996, the Administrator of the Health Care 
     Financing Administration shall submit to the Congress a 
     report on the feasibility of, and administrative requirements 
     necessary to establish an alternative for certain medical 
     diagnoses (as determined by the Administrator) to the 96-hour 
     limitation for inpatient care in critical access hospitals 
     required by section 1820(d)(2)(B)(iii).
       (d) Part A Amendments Relating to Rural Primary Care 
     Hospitals and Critical Access Hospitals.--
       (1) Definitions.--Section 1861(mm) of the Social Security 
     Act (42 U.S.C. 1395x(mm)) is amended to read as follows:


     ``critical access hospital; critical access hospital services

       ``(mm)(1) The term `critical access hospital' means a 
     facility certified by the Secretary as a critical access 
     hospital under section 1820(f).
       ``(2) The term `inpatient critical access hospital 
     services' means items and services, furnished to an inpatient 
     of a critical access hospital by such facility, that would be 
     inpatient hospital services if furnished to an inpatient of a 
     hospital by a hospital.''.
       (2) Coverage and payment.--(A) Section 1812(a)(1) of such 
     Act (42 U.S.C. 1395d(a)(1)) is amended by striking ``or 
     inpatient rural primary care hospital services'' and 
     inserting ``or inpatient critical access hospital services''.
       (B) Section 1814 of such Act (42 U.S.C. 1395f) is amended--
       (i) on subsection (a)(8)--
       (I) by striking ``rural primary care hospital'' each place 
     it appears and inserting ``critical access hospital''; and
       (II) by striking ``72'' and inserting ``96'';
       (ii) in subsection (b), by striking ``other than a rural 
     primary care hospital providing inpatient rural primary care 
     hospital services,'' and inserting ``other than a critical 
     access hospital providing inpatient critical access hospital 
     services,''; and
       (iii) by amending subsection (l) to read as follows:
       ``(l) Payment for Inpatient Critical Access Hospital 
     Services.--The amount of payment under this part for 
     inpatient critical access hospital services is the reasonable 
     costs of the critical access hospital in providing such 
     services.''.
       (3) Treatment of critical access hospitals as providers of 
     services.--(A) Section 1861(u) of such Act (42 U.S.C. 
     1395x(u)) is amended by striking ``rural primary care 
     hospital'' and inserting ``critical access hospital''.

[[Page S9001]]

       (B) The first sentence of section 1864(a) of such Act (42 
     U.S.C. 1395aa(a)) is amended by striking ``a rural primary 
     care hospital'' and inserting ``a critical access hospital''.
       (4) Conforming amendments.--(A) Section 1128A(b)(1) of such 
     Act (42 U.S.C. 1320a-7a(b)(1)) is amended by striking ``rural 
     primary care hospital'' each place it appears and inserting 
     ``critical access hospital''.
       (B) Section 1128B(c) of such Act (42 U.S.C. 1320a-7b(c)) is 
     amended by striking ``rural primary care hospital'' and 
     inserting ``critical access hospital''.
       (C) Section 1134 of such Act (42 U.S.C. 1320b-4) is amended 
     by striking ``rural primary care hospitals'' each place it 
     appears and inserting ``critical access hospitals''.
       (D) Section 1138(a)(1) of such Act (42 U.S.C. 1320b-
     8(a)(1)) is amended--
       (i) in the matter preceding subparagraph (A), by striking 
     ``rural primary care hospital'' and inserting ``critical 
     access hospital''; and
       (ii) in the matter preceding clause (i) of subparagraph 
     (A), by striking ``rural primary care hospital'' and 
     inserting ``critical access hospital''.
       (E) Section 1816(c)(2)(C) of such Act (42 U.S.C. 
     1395h(c)(2)(C)) is amended by striking ``rural primary care 
     hospital'' and inserting ``critical access hospital''.
       (F) Section 1833 of such Act (42 U.S.C. 1395l) is amended--
       (i) in subsection (h)(5)(A)(iii), by striking ``rural 
     primary care hospital'' and inserting ``critical access 
     hospital'';
       (ii) in subsection (i)(1)(A), by striking ``rural primary 
     care hospital'' and inserting ``critical access hospital'';
       (iii) in subsection (i)(3)(A), by striking ``rural primary 
     care hospital services'' and inserting ``critical access 
     hospital services'';
       (iv) in subsection (l)(5)(A), by striking ``rural primary 
     care hospital'' each place it appears and inserting 
     ``critical access hospital''; and
       (v) in subsection (l)(5)(B), by striking ``rural primary 
     care hospital'' each place it appears and inserting 
     ``critical access hospital''.
       (G) Section 1835(c) of such Act (42 U.S.C. 1395n(c)) is 
     amended by striking ``rural primary care hospital'' each 
     place it appears and inserting ``critical access hospital''.
       (H) Section 1842(b)(6)(A)(ii) of such Act (42 U.S.C. 
     1395u(b)(6)(A)(ii)) is amended by striking ``rural primary 
     care hospital'' and inserting ``critical access hospital''..
       (I) Section 1861 of such Act (42 U.S.C. 1395x) is amended--
       (i) in the last sentence of subsection (e), by striking 
     ``rural primary care hospital'' and inserting ``critical 
     access hospital'';
       (ii) in subsection (v)(1)(S)(ii)(III), by striking ``rural 
     primary care hospital'' and inserting ``critical access 
     hospital'';
       (iii) in subsection (w)(1), by striking ``rural primary 
     care hospital'' and inserting ``critical access hospital''; 
     and
       (iv) in subsection (w)(2), by striking ``rural primary care 
     hospital'' each place it appears and inserting ``critical 
     access hospital''.
       (J) Section 1862(a)(14) of such Act (42 U.S.C. 
     1395y(a)(14)) is amended by striking ``rural primary care 
     hospital'' each place it appears and inserting ``critical 
     access hospital''.
       (K) Section 1866(a)(1) of such Act (42 U.S.C 1395cc(a)(1)) 
     is amended--
       (i) in subparagraph (F)(ii), by striking ``rural primary 
     care hospitals'' and inserting ``critical access hospitals'';
       (ii) in subparagraph (H), in the matter preceding clause 
     (i), by striking ``rural primary care hospitals'' and ``rural 
     primary care hospital services'' and inserting ``critical 
     access hospitals'' and ``critical access hospital services'', 
     respectively;
       (iii) in subparagraph (I), in the matter preceding clause 
     (i), by striking ``rural primary care hospital'' and 
     inserting ``critical access hospital''; and
       (iv) in subparagraph (N)--
       (I) in the matter preceding clause (i), by striking ``rural 
     primary hospitals'' and inserting ``critical access 
     hospitals'', and
       (II) in clause (i), by striking ``rural primary care 
     hospital'' and inserting ``critical access hospital''.
       (L) Section 1866(a)(3) of such Act (42 U.S.C 1395cc(a)(3)) 
     is amended--
       (i) by striking ``rural primary care hospital'' each place 
     it appears in subparagraphs (A) and (B) and inserting 
     ``critical access hospital''; and
       (ii) in subparagraph (C)(ii)(II), by striking ``rural 
     primary care hospitals'' each place it appears and inserting 
     ``critical access hospitals''.
       (M) Section 1867(e)(5) of such Act (42 U.S.C. 1395dd(e)(5)) 
     is amended by striking ``rural primary care hospital'' and 
     inserting ``critical access hospital''.
       (e) Payment Continued to Designated EACHs.--Section 
     1886(d)(5)(D) of such Act (42 U.S.C. 1395ww(d)(5)(D)) is 
     amended--
       (1) in clause (iii)(III), by inserting ``as in effect on 
     September 30, 1995'' before the period at the end; and
       (2) in clause (v)--
       (A) by inserting ``as in effect on September 30, 1995'' 
     after ``1820(i)(1)''; and
       (B) by striking ``1820(g)'' and inserting ``1820(e)''.
       (f) Part B Amendments Relating to Critical Access 
     Hospitals.--
       (1) Coverage.--(A) Section 1861(mm) of the Social Security 
     Act (42 U.S.C. 1395x(mm)) as amended by subsection (d)(1), is 
     amended by adding at the end the following new paragraph:
       ``(3) The term `outpatient critical access hospital 
     services' means medical and other health services furnished 
     by a critical access hospital on an outpatient basis.''.
       (B) Section 1832(a)(2)(H) of such Act (42 U.S.C. 
     1395k(a)(2)(H)) is amended by striking ``rural primary care 
     hospital services'' and inserting ``critical access hospital 
     services''.
       (2) Payment.--(A) Section 1833(a) of such Act (42 U.S.C. 
     1395l(a)) is amended in paragraph (6), by striking 
     ``outpatient rural primary care hospital services'' and 
     inserting ``outpatient critical access services''.
       (B) Section 1834(g) of such Act (42 U.S.C. 1395m(g)) is 
     amended to read as follows--
       ``(g) Payment for Outpatient Critical Access Hospital 
     Services.--The amount of payment under this part for 
     outpatient critical access hospital services is the 
     reasonable costs of the critical access hospital in providing 
     such services.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after October 1, 
     1995.

     SEC. 3. OFFICE OF RURAL HEALTH POLICY.

       (a) Appointment of Assistant Secretary.--
       (1) In general.--Section 711(a) of the Social Security Act 
     (42 U.S.C. 912(a)) is amended--
       (A) by striking ``by a Director, who shall advise the 
     Secretary'' and inserting ``by an Assistant Secretary for 
     Rural Health (in this section referred to as the `Assistant 
     Secretary'), who shall report directly to the Secretary''; 
     and
       (B) by adding at the end the following new sentence: ``The 
     Office shall not be a component of any other office, service, 
     or component of the Department.''.
       (2) Conforming amendments.--(A) Section 711(b) of the 
     Social Security Act (42 U.S.C. 912(b)) is amended by striking 
     ``the Director'' and inserting ``the Assistant Secretary''.
       (B) Section 338J(a) of the Public Health Service Act (42 
     U.S.C. 254r(a)) is amended by striking ``Director of the 
     Office of Rural Health Policy'' and inserting ``Assistant 
     Secretary for Rural Health''.
       (C) Section 464T(b) of the Public Health Service Act (42 
     U.S.C. 285p-2(b)) is amended in the matter preceding 
     paragraph (1) by striking ``Director of the Office of Rural 
     Health Policy'' and inserting ``Assistant Secretary for Rural 
     Health''.
       (D) Section 6213 of the Omnibus Budget Reconciliation Act 
     of 1989 (42 U.S.C. 1395x note) is amended in subsection 
     (e)(1) by striking ``Director of the Office of Rural Health 
     Policy'' and inserting ``Assistant Secretary for Rural 
     Health''.
       (E) Section 403 of the Ryan White Comprehensive AIDS 
     Resources Emergency Act of 1990 (42 U.S.C. 300ff-11 note) is 
     amended in the matter preceding paragraph (1) of subsection 
     (a) by striking ``Director of the Office of Rural Health 
     Policy'' and inserting ``Assistant Secretary for Rural 
     Health''.
       (3) Amendment to the executive schedule.--Section 5315 of 
     title 5, United States Code, is amended by striking 
     ``Assistant Secretaries of Health and Human Services (6)'' 
     and inserting ``Assistant Secretaries of Health and Human 
     Services (7)''.
       (b) Expansion of Duties.--Section 711(a) of the Social 
     Security Act (42 U.S.C. 912(a)) is amended by striking ``and 
     access to (and the quality of) health care in rural areas'' 
     and inserting ``access to, and quality of, health care in 
     rural areas, and reforms to the health care system and the 
     implications of such reforms for rural areas''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 1996.

     SEC. 4. MEDICARE REIMBURSEMENT FOR TELEMEDICINE SERVICES.

       (a) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) the use of telemedicine services can increase access to 
     specialized health care for rural residents; and
       (2) although telemedicine services are currently being 
     furnished to medicare beneficiaries across the country, 
     providers of telemedicine services do not receive 
     reimbursement for such services under the medicare program.
       (b) Purpose.--It is the purpose of this section to improve 
     access to specialized health services for rural medicare 
     beneficiaries by requiring the medicare program to reimburse 
     providers for furnishing telemedicine services.
       (c) Methodology for Determining Payment.--Not later than 
     January 1, 1996, the Secretary of Health and Human Services 
     shall develop and submit to the Congress a recommendation on 
     a methodology for determining payments under title XVIII of 
     the Social Security Act for telemedicine services (as defined 
     by the Secretary).
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