[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Senate]
[Pages S7900-S7905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROBERTS (for himself, Mr. Grassley, Mr. Jeffords, and Mr. 
        Thomas):
  S. 2987. A bill to amend title XVIII of the Social Security Act to 
promote access to health care services in rural areas, and for other 
purposes; to the Committee on Finance.


           rural health care in the 21st century act of 2000

  Mr. ROBERTS. Mr. President, I rise today to introduce the Rural 
Health Care in the 21st Century Act of 2000. This legislation will 
improve access to technology necessary to improve rural health care and 
expand access to quality health care in rural areas.
  The future of health care in this country is being challenged by a 
variety of factors. The growing pains associated with managed care, an 
increasing elderly population and the drive to ensure the solvency of 
the federal Medicare Trust Fund are just a few of the factors placing 
pressure on health care facilities and health care providers across the 
country. Small, rural hospitals that provide services to a relatively 
low volume of patients are faced with even greater challenges in this 
environment.
  The bill I am introducing today takes critical steps to improve 
access to high technology in rural areas and establishes a new high 
technology acquisition grant and loan program to improve patient safety 
and outcomes. At the same time hospitals need to update equipment, 
comply with new regulatory requirements and join the effort to reduce 
medical errors, many hospitals are finding it difficult to access the 
financial backing necessary to acquire the telecommunications equipment 
necessary to develop innovative solutions. This bill establishes a 5-
year grant program through the Office of Rural Health Policy that 
allows hospitals, health care centers and related organizations to 
apply for matching grants or loans up to $100,000 to purchase the 
advanced technologies necessary to improve patient safety and keep pace 
with the changing records management requirements of the 21st Century.
  This bill also increases Disproportionate Share Hospitals payments to 
rural hospitals. The Medicare DSH adjustment is based on a complex 
formula and the hospital's percentage of low-income patients. This 
percentage of low-income patients is different for each hospital, 
depending on where the hospital is located and the number of beds in 
the hospital. This bill establishes one formula to distribute payments 
to all hospitals covered by the inpatient PPS. This will give rural 
hospitals an equal opportunity to qualify for the DSH adjustment.
  Twenty-five percent of our nation's senior citizens live in rural 
areas where access to modern health care services is often lacking. 
Telehealth technologies have evolved significantly and can serve to 
connect rural patients to the health care providers that they need. 
This bill includes provisions of S. 2505, a telehealth bill introduced 
by my colleague from Vermont, Senator Jeffords. These provisions 
address eight areas of Medicare reimbursement policy that need 
improvement. It eliminates requirements for fee-sharing between 
providers and provides a standard professional fee to the health care 
provider who delivers the care. The site where the patient is presented 
is made eligible for a standard facility fee. The requirement for a 
telepresenter is

[[Page S7901]]

eliminated and the codes that can be billed for are expanded to reflect 
current practice. All rural counties and urban HPSAs are covered by 
this legislation and demonstration projects are established to access 
reimbursement for store and forward activities. Also, the law 
is clarified to allow for home health agencies to incorporate 
telehomecare into their care plans where appropriate.

  The Health Care Financing Administration is currently administering 
five telemedicine demonstration projects. This provision extends these 
projects an additional two years to give the projects adequate time to 
produce useful data.
  The Medicare Rural Hospital Flexibility Program established by the 
Balanced Budget Act of 1997 allows rural hospitals to be reclassified 
as limited service facilities, known as Critical Access Hospitals. 
Critical Access Hospitals are important components of the rural health 
care infrastructure. They are working to provide quality health care 
services in sparsely populated areas of the country. However, they are 
restricted by burdensome regulations and inadequate Medicare payments. 
In addition to reduced staffing requirements, Congress intended to 
reimburse CAH inpatient and outpatient hospital services on the basis 
of reasonable costs. This legislation exempts Medicare swing beds in 
CAHs for the Skilled Nursing Facility (SNF) Prospective Payment System 
(PPS) and reimburses based on reasonable costs, and provides reasonable 
cost payment for ambulance services and home health services in CAHs.
  In addition, this legislation directs the Secretary of HHS to 
establish a procedure to ensure that a single FI will provide services 
to all CAHs and allows CAHs to choose between two options for payment 
for outpatient services: (1) reasonable costs for facility services, or 
(2) an all-inclusive rate which combines facility and professional 
services.
  This bill permanently guarantees pre-Balanced Budget Act payment 
levels for outpatient services provided by rural hospitals with under 
100 beds, modifies the 50 bed exemption language and for Rural Health 
Clinics allows RHCs to qualify as long as their average daily patient 
census does not exceed 50, allows Physician Assistant-owned RHCs that 
lose their clinic status to maintain Medicare Part B payments, and 
clarifies that when services already excluded from the PPS system are 
delivered to Skilled Nursing Facility patients by practitioners 
employed by the RHCs, those visits are also excluded from the PPS 
payment system. In addition, this bill increases payments under the 
Medicare home health PPS for beneficiaries who reside in rural areas by 
increasing the standardized payment per 60-day episode by 10 percent.
  Current law allows states the option to reimburse hospitals for 
Qualified Medicare Beneficiary (QMB) services attributable to 
deductibles and coinsurance amounts. However, many state Medicaid 
programs have chosen not to pay these costs, leaving rural hospitals 
with a significant portion of unpaid bad debt expenses. This is 
especially burdensome since federal law prohibits hospitals from 
seeking payment for the cost-sharing amounts from QMB patients. This 
legislation provides additional relief to rural hospitals by restoring 
100% Medicare bad debt reimbursement for QMBs.
  Although, as a general rule, scholarships are excluded from income, 
the Internal Revenue Service has taken the position that National 
Health Service Corp scholarships are included in income. Imposing taxes 
on the scholarships could have disastrous effects on a program that for 
over 20 years has helped funnel doctors, nurse-practitioners, physician 
assistants, and other health professionals into medically underserved 
communities. This provision excludes from gross income of certain 
scholarships any amounts received under the National Health Service 
Corps Scholarship Program.
  Finally, this bill includes important technical corrections to the 
Balanced Budget Refinement Act of 1999. This bill extends the option to 
rebase target amounts to all Sole Community Hospitals and allows 
Critical Access Hospitals to receive reimbursement for lab services on 
a reasonable cost basis.
  Exciting changes are taking place in rural America. This legislation 
will enable small rural hospitals to take advantage of the latest 
technology and improve health care for rural residents across the 
country. Mr. President, I invite my colleagues to join me in support of 
this endeavor. I am unanimous consent that a copy of the bill appear in 
the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2987

       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 ``Rural 
     Health Care in the 21st Century Act of 2000''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                        TITLE I--HIGH TECHNOLOGY

Sec. 101. High technology acquisition grant and loan program.
Sec. 102. Refinement of medicare reimbursement for telehealth services.
Sec. 103. Extension of telemedicine demonstration projects.

  TITLE II--IMPROVEMENTS IN THE DISPROPORTIONATE SHARE HOSPITAL (DSH) 
                                PROGRAM

Sec. 201. Disproportionate share hospital adjustment for rural 
              hospitals.

 TITLE III--IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL (CAH) PROGRAM

Sec. 301. Treatment of swing-bed services furnished by critical access 
              hospitals.
Sec. 302. Treatment of ambulance services furnished by certain critical 
              access hospitals.
Sec. 303. Treatment of home health services furnished by certain 
              critical access hospitals.
Sec. 304. Designation of a single fiscal intermediary for all critical 
              access hospitals.
Sec. 305. Establishment of an all-inclusive payment option for 
              outpatient critical access hospital services.

       TITLE IV--OUTPATIENT SERVICES FURNISHED BY RURAL PROVIDERS

Sec. 401. Permanent guarantee of pre-BBA payment levels for outpatient 
              services furnished by rural hospitals.
Sec. 402. Provider-based rural health clinic cap exemption.
Sec. 403. Payment for certain physician assistant services.
Sec. 404. Exclusion of rural health clinic services from the PPS for 
              skilled nursing facilities.
Sec. 405. Bonus payments for rural home health agencies.

                           TITLE V--BAD DEBT

Sec. 501. Restoration of full payment for bad debts of qualified 
              medicare beneficiaries.

      TITLE VI--NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM

Sec. 601. Exclusion of certain amounts received under the National 
              Health Service Corps scholarship program.

 TITLE VII--TECHNICAL CORRECTIONS TO BALANCED BUDGET REFINEMENT ACT OF 
                                  1999

Sec. 701. Extension of option to use rebased target amounts to all sole 
              community hospitals.
Sec. 702. Payments to critical access hospitals for clinical diagnostic 
              laboratory tests.

                        TITLE I--HIGH TECHNOLOGY

     SEC. 101. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN PROGRAM.

       (a) Establishment of Program.--Title III of the Public 
     Health Service Act (42 U.S.C. 241 et seq.) is amended by 
     inserting after section 330D the following:

     ``SEC. 330E. HIGH TECHNOLOGY ACQUISITION GRANT AND LOAN 
                   PROGRAM.

       ``(a) Establishment of Program.--The Secretary, acting 
     through the Director of the Office of Rural Health Policy (of 
     the Health Resources and Services Administration), shall 
     establish a High Technology Acquisition Grant and Loan 
     Program for the purpose of--
       ``(1) improving the quality of health care in rural areas 
     through the acquisition of advanced medical technology;
       ``(2) fostering the development the networks described in 
     section 330D(c);
       ``(3) promoting resource sharing between urban and rural 
     facilities; and
       ``(4) improving patient safety and outcomes through the 
     acquisition of high technology, including software, 
     information services, and staff training.
       ``(b) Grants and Loans.--Under the program established 
     under subsection (a), the Secretary, acting through the 
     Director of the Office of Rural Health Policy, may award 
     grants and make loans to any eligible entity (as defined in 
     subsection (d)(1)) for any costs incurred by the eligible 
     entity in acquiring eligible equipment and services (as 
     defined in subsection (d)(2)).
       ``(c) Limitations.--
       ``(1) In general.--Subject to paragraph (2), the total 
     amount of grants and loans made

[[Page S7902]]

     under this section to an eligible entity may not exceed 
     $100,000.
       ``(2) Federal sharing.--
       ``(A) Grants.--The amount of any grant awarded under this 
     section may not exceed 70 percent of the costs to the 
     eligible entity in acquiring eligible equipment and services.
       ``(B) Loans.--The amount of any loan made under this 
     section may not exceed 90 percent of the costs to the 
     eligible entity in acquiring eligible equipment and services.
       ``(d) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means a 
     hospital, health center, or any other entity that the 
     Secretary determines is appropriate that is located in a 
     rural area or region.
       ``(2) Eligible equipment and services.--The term `eligible 
     equipment and services' includes--
       ``(A) unit dose distribution systems;
       ``(B) software and information services and staff training;
       ``(C) wireless devices to transmit medical orders;
       ``(D) clinical health care informatics systems, including 
     bar code systems designed to avoid medication errors and 
     patient tracking systems; and
       ``(E) any other technology that improves the quality of 
     health care provided in rural areas.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section there are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 2001 through 2006.''.

     SEC. 102. REFINEMENT OF MEDICARE REIMBURSEMENT FOR TELEHEALTH 
                   SERVICES.

       (a) Revision of Telehealth Payment Methodology and 
     Elimination of Fee-Sharing Requirement.--Section 4206(b) of 
     the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is 
     amended to read as follows:
       ``(b) Methodology for Determining Amount of Payments.--
       ``(1) In general.--The Secretary shall pay to--
       ``(A) the physician or practitioner at a distant site that 
     provides an item or service under subsection (a) an amount 
     equal to the amount that such physician or provider would 
     have been paid had the item or service been provided without 
     the use of a telecommunications system; and
       ``(B) the originating site a facility fee for facility 
     services furnished in connection with such item or service.
       ``(2) Application of part b coinsurance and deductible.--
     Any payment made under this section shall be subject to the 
     coinsurance and deductible requirements under subsections 
     (a)(1) and (b) of section 1833 of the Social Security Act (42 
     U.S.C. 1395l).
       ``(3) Definitions.--In this subsection:
       ``(A) Distant site.--The term `distant site' means the site 
     at which the physician or practitioner is located at the time 
     the item or service is provided via a telecommunications 
     system.
       ``(B) Facility fee.--The term `facility fee' means an 
     amount equal to--
       ``(i) for 2000 and 2001, $20; and
       ``(ii) for a subsequent year, the facility fee under this 
     subsection for the previous year increased by the percentage 
     increase in the MEI (as defined in section 1842(i)(3)) for 
     such subsequent year.
       ``(C) Originating site.--
       ``(i) In general.--The term `originating site' means the 
     site described in clause (ii) at which the eligible 
     telehealth beneficiary under the medicare program is located 
     at the time the item or service is provided via a 
     telecommunications system.
       ``(ii) Sites described.--The sites described in this 
     paragraph are as follows:

       ``(I) On or before January 1, 2002, the office of a 
     physician or a practitioner, a critical access hospital, a 
     rural health clinic, and a Federally qualified health center.
       ``(II) On or before January 1, 2003, the sites described in 
     subclause (I), a hospital, a skilled nursing facility, a 
     comprehensive outpatient rehabilitation facility, a renal 
     dialysis facility, an ambulatory surgical center, an Indian 
     Health Service facility, and a community mental health 
     center.''.

       (b) Elimination of Requirement for Telepresenter.--Section 
     4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
     note) is amended--
       (1) in subsection (a), by striking ``, notwithstanding that 
     the individual physician'' and all that follows before the 
     period at the end; and
       (2) by adding at the end the following new subsection:
       ``(e) Telepresenter Not Required.--Nothing in this section 
     shall be construed as requiring an eligible telehealth 
     beneficiary to be presented by a physician or practitioner 
     for the provision of an item or service via a 
     telecommunications system.''.
       (c) Reimbursement for Medicare Beneficiaries Who Do Not 
     Reside in a HPSA.--Section 4206(a) of the Balanced Budget Act 
     of 1997 (42 U.S.C. 1395l note), as amended by subsection (b), 
     is amended--
       (1) by striking ``In General.--Not later than'' and 
     inserting the following: ``Telehealth Services Reimbursed.--
       ``(1) In general.--Not later than'';
       (2) by striking ``furnishing a service for which payment'' 
     and all that follows before the period and inserting ``to an 
     eligible telehealth beneficiary''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Eligible telehealth beneficiary defined.--In this 
     section, the term `eligible telehealth beneficiary' means a 
     beneficiary under the medicare program under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.) that resides 
     in--
       ``(A) an area that is designated as a health professional 
     shortage area under section 332(a)(1)(A) of the Public Health 
     Service Act (42 U.S.C. 254e(a)(1)(A));
       ``(B) a county that is not included in a Metropolitan 
     Statistical Area;
       ``(C) an inner-city area that is medically underserved (as 
     defined in section 330(b)(3) of the Public Health Service Act 
     (42 U.S.C. 254b(b)(3))); or
       ``(D) an area in which there is a Federal telemedicine 
     demonstration program.''.
       (d) Telehealth Coverage for Direct Patient Care.--
       (1) In general.--Section 4206 of the Balanced Budget Act of 
     1997 (42 U.S.C. 1395l note), as amended by subsection (c), is 
     amended--
       (A) in subsection (a)(1), by striking ``professional 
     consultation via telecommunications systems with a 
     physician'' and inserting ``items and services for which 
     payment may be made under such part that are furnished via a 
     telecommunications system by a physician''; and
       (B) by adding at the end the following new subsection:
       ``(f) Coverage of Items and Services.--Payment for items 
     and services provided pursuant to subsection (a) shall 
     include payment for professional consultations, office 
     visits, office psychiatry services, including any service 
     identified as of July 1, 2000, by HCPCS codes 99241-99275, 
     99201-99215, 90804-90815, and 90862, and any additional item 
     or service specified by the Secretary.''.
       (2) Study and report regarding additional items and 
     services.--
       (A) Study.--The Secretary of Health and Human Services 
     shall conduct a study to identify items and services in 
     addition to those described in section 4206(f) of the 
     Balanced Budget Act of 1997 (as added by paragraph (1)) that 
     would be appropriate to provide payment under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.).
       (B) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit a report to 
     Congress on the study conducted under subparagraph (A) 
     together with such recommendations for legislation that the 
     Secretary determines are appropriate.
       (e) All Physicians and Practitioners Eligible for 
     Telehealth Reimbursement.--Section 4206(a) of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395l note), as amended by 
     subsection (d), is amended--
       (1) in paragraph (1), by striking ``(described in section 
     1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C))''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Practitioner defined.--For purposes of paragraph (1), 
     the term `practitioner' includes--
       ``(A) a practitioner described in section 1842(b)(18)(C) of 
     the Social Security Act (42 U.S.C. 1395u(b)(18)(C)); and
       ``(B) a physical, occupational, or speech therapist.''.
       (f) Telehealth Services Provided Using Store-and-Forward 
     Technologies.--Section 4206(a)(1) of the Balanced Budget Act 
     of 1997 (42 U.S.C. 1395l note), as amended by subsection (e), 
     is amended by adding at the end the following new paragraph:
       ``(4) Use of store-and-forward technologies.--For purposes 
     of paragraph (1), in the case of any Federal telemedicine 
     demonstration program in Alaska or Hawaii, the term 
     `telecommunications system' includes store-and-forward 
     technologies that provide for the asynchronous transmission 
     of health care information in single or multimedia 
     formats.''.
       (g) Construction Relating to Home Health Services.--Section 
     4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
     note), as amended by subsection (f), is amended by adding at 
     the end the following new paragraph:
       ``(5) Construction relating to home health services.--
       ``(A) In general.--Nothing in this section or in section 
     1895 of the Social Security Act (42 U.S.C. 1395fff) shall be 
     construed as preventing a home health agency that is 
     receiving payment under the prospective payment system 
     described in such section from furnishing a home health 
     service via a telecommunications system.
       ``(B) Limitation.--The Secretary shall not consider a home 
     health service provided in the manner described in 
     subparagraph (A) to be a home health visit for purposes of--
       ``(i) determining the amount of payment to be made under 
     the prospective payment system established under section 1895 
     of the Social Security Act (42 U.S.C. 1395fff); or
       ``(ii) any requirement relating to the certification of a 
     physician required under section 1814(a)(2)(C) of such Act 
     (42 U.S.C. 1395f(a)(2)(C)).''.
       (h) Effective Date.--The amendments made by this Act shall 
     apply to items and services provided on or after the date of 
     enactment of this Act.

     SEC. 103. EXTENSION OF TELEMEDICINE DEMONSTRATION PROJECTS.

       The Secretary of Health and Human Services shall maintain 
     through September 30, 2003, the grant and operational phases 
     of any telemedicine demonstration project conducted under the 
     medicare program under title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.)--

[[Page S7903]]

       (1) for which funds were expended before the date of 
     enactment of the Balanced Budget Act of 1997 (Public Law 105-
     133; 111 Stat. 251); and
       (2) that is ongoing as of the date of enactment of this 
     Act.

  TITLE II--IMPROVEMENTS IN THE DISPROPORTIONATE SHARE HOSPITAL (DSH) 
                                PROGRAM

     SEC. 201. DISPROPORTIONATE SHARE HOSPITAL ADJUSTMENT FOR 
                   RURAL HOSPITALS.

       (a) Application of Uniform 15 Percent Threshold.--Section 
     1886(d)(5)(F)(v) of the Social Security Act (42 U.S.C. 
     1395ww(d)(5)(F)(v)) is amended by striking ``exceeds--'' and 
     all that follows and inserting ``exceeds 15 percent.''.
       (b) Change in Payment Percentage Formulas.--Section 
     1886(d)(5)(F) of the Social Security Act (42 U.S.C. 
     1395ww(d)(5)(F)) is amended--
       (1) in clause (iv), by striking ``and that--'' and all that 
     follows and inserting ``is equal to the percentage determined 
     in accordance with the applicable formula described in clause 
     (vii).'';
       (2) in clause (vii), by striking ``clause (iv)(I)'' and 
     inserting ``clause (iv)''; and
       (3) by striking clause (viii) and inserting the following 
     new clause:
       ``(viii) No hospital described in clause (iv) may receive a 
     payment amount under this section that is less than the 
     payment amount that would have been made under this section 
     if the amendments made by section 201 of the Rural Health 
     Care in the 21st Century Act of 2000 had not been enacted.''.
       (c) Effective Date.--The amendments made by this section 
     apply to discharges occurring on or after October 1, 2000.

 TITLE III--IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL (CAH) PROGRAM

     SEC. 301. TREATMENT OF SWING-BED SERVICES FURNISHED BY 
                   CRITICAL ACCESS HOSPITALS.

       (a) Exemption From SNF PPS.--Section 1888(e)(7) of the 
     Social Security Act (42 U.S.C. 1395yy(e)(7)) is amended--
       (1) in the heading, by striking ``Transition for'' and 
     inserting ``Treatment of'';
       (2) in subparagraph (A), by striking ``In general.--The'' 
     and inserting ``Transition.--Except as provided in 
     subparagraph (C), the'';
       (3) in subparagraph (B), by striking ``, for which'' and 
     all that follows before the period at the end and inserting 
     ``(other than critical access hospitals)''; and
       (4) by adding at the end the following new subparagraph:
       ``(C) Critical access hospitals.--In the case of facilities 
     described in subparagraph (B) that are critical access 
     hospitals--
       ``(i) the prospective payment system established under this 
     subsection shall not apply to services furnished pursuant to 
     an agreement described in section 1883; and
       ``(ii) such services shall be paid on the basis specified 
     in subsection (a)(3) of such section.''.
       (b) Payment Basis for Swing-Bed Services Furnished by 
     Critical Access Hospitals.--Section 1883(a) of the Social 
     Security Act (42 U.S.C. 1395tt(a)) is amended--
       (1) in paragraph (2)(A), by inserting ``(other than a 
     critical access hospital)'' after ``any hospital''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Notwithstanding any other provision of this title, a 
     critical access hospital shall be paid for services furnished 
     under an agreement entered into under this section on the 
     basis of the reasonable costs of such services (as determined 
     under section 1861(v)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to cost reporting periods beginning on or after 
     October 1, 1999.

     SEC. 302. TREATMENT OF AMBULANCE SERVICES FURNISHED BY 
                   CERTAIN CRITICAL ACCESS HOSPITALS.

       (a) Exemption From Ambulance Fee Schedule.--
       (1) 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:
       ``(8) Inapplicability of fee schedule to certain 
     services.--In the case of ambulance services (described in 
     section 1861(s)(7)) that are provided in a locality by a 
     critical access hospital that is the only provider of 
     ambulance services in the locality, or by an entity that is 
     owned and operated by such a critical access hospital--
       ``(A) the fee schedule established under this subsection 
     shall not apply; and
       ``(B) payment under this part shall be paid on the basis of 
     the reasonable costs incurred in providing such services.''.
       (2) Conforming amendments.--Section 1833(a)(1) of the 
     Social Security Act (42 U.S.C. 1395l(a)(1)) is amended--
       (A) in subparagraph (R)--
       (i) by inserting ``except as provided in subparagraph 
     (T),'' before ``with respect''; and
       (ii) by striking ``and'' at the end; and
       (B) in subparagraph (S), by striking the semicolon at the 
     end and inserting ``, and (T) with respect to ambulance 
     services described in section 1834(l)(8), the amount paid 
     shall be 80 percent of the lesser of the actual charge for 
     the services or the amount determined under such section;''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to cost reporting periods beginning on or after 
     October 1, 1999.
       (b) Exemption From Reasonable Cost Reductions.--
       (1) Exemption.--Section 1861(v)(1)(U) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(U)) is amended by 
     inserting after the first sentence the following new 
     sentence: ``The reductions required by the preceding sentence 
     shall not apply in the case of ambulance services that are 
     provided in a locality on or after October 1, 1999, by a 
     critical access hospital that is the only provider of 
     ambulance services in the locality, or by an entity that is 
     owned and operated by such a critical access hospital.''.
       (2) Technical amendment.--Section 1861(v)(1) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)) is amended by realigning 
     subparagraph (U) so as to align the left margin of such 
     subparagraph with the left margin of subparagraph (T).

     SEC. 303. TREATMENT OF HOME HEALTH SERVICES FURNISHED BY 
                   CERTAIN CRITICAL ACCESS HOSPITALS.

       (a) Exemption From Home Health Interim Payment System.--
     Section 1861(v)(1)(L) of the Social Security Act (42 U.S.C. 
     1395x(v)(1)(L)) is amended by adding at the end the following 
     new clause:
       ``(xi) The preceding provisions of this subparagraph shall 
     not apply to home health services that are furnished on or 
     after October 1, 2000, by a home health agency that is--

       ``(I) the only home health agency serving a locality; and
       ``(II) owned and operated by a critical access hospital.''.

       (b) Exemption From PPS.--
       (1) In general.--Section 1895 of the Social Security Act 
     (42 U.S.C. 1395fff) is amended by adding at the end the 
     following new subsection:
       ``(e) Exemption.--The prospective payment system 
     established under this section shall not apply in determining 
     payments for home health services furnished by a home health 
     agency that is--
       ``(1) the only home health agency serving a locality; and
       ``(2) owned and operated by a critical access hospital.''.
       (2) Conforming amendment.--Section 1833(a)(2)(A) of the 
     Social Security Act (42 U.S.C. 1395(a)(2)(A)) is amended by 
     inserting ``home health services described in section 1895(e) 
     and other than'' after ``other than''.
       (3) Technical amendment.--Section 1833(a)(2)(A) of the 
     Social Security Act (42 U.S.C. 1395(a)(2)(A)) is amended by 
     striking ``drug) (as defined in section 1861(kk))'' and 
     inserting ``drug (as defined in section 1861(kk)))''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to cost reporting periods beginning on or after 
     October 1, 2000.

     SEC. 304. DESIGNATION OF A SINGLE FISCAL INTERMEDIARY FOR ALL 
                   CRITICAL ACCESS HOSPITALS.

       Section 1816 of the Social Security Act (42 U.S.C. 1395h) 
     is amended by adding at the end the following:
       ``(m) Not later than October 1, 2000, the Secretary shall 
     designate a national agency or organization with an agreement 
     under this section to perform functions under the agreement 
     with respect to each critical access hospital electing to 
     have such functions performed by such agency or 
     organization.''.

     SEC. 305. ESTABLISHMENT OF AN ALL-INCLUSIVE PAYMENT OPTION 
                   FOR OUTPATIENT CRITICAL ACCESS HOSPITAL 
                   SERVICES.

       (a) All-Inclusive Payment Option for Outpatient Critical 
     Access Hospital Services.--Section 1834(g) of the Social 
     Security Act (42 U.S.C. 1395m(g)) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Election of cah.--At the election of a critical 
     access hospital, the amount of payment for outpatient 
     critical access hospital services under this part shall be 
     determined under paragraph (2) or (3), such amount determined 
     under either paragraph without regard to the amount of the 
     customary or other charge.''; and
       (2) by striking paragraph (3) and inserting the following 
     new paragraph:
       ``(3) All-inclusive rate.--If a critical access hospital 
     elects this paragraph to apply, with respect to both facility 
     services and professional services, there shall be paid 
     amounts equal to the reasonable costs of the critical access 
     hospital in providing such services (except that in the case 
     of clinical diagnostic laboratory services furnished by a 
     critical access hospital the amount of payment shall be equal 
     to 100 percent of the reasonable costs of the critical access 
     hospital in providing such services), less the amount that 
     such hospital may charge as described in section 
     1866(a)(2)(A).''.
       (b) Effective Date.--The amendments made by subparagraph 
     (a) shall take effect as if included in the enactment of 
     section 403(d) of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999 (113 Stat. 1501A-371), as 
     enacted into law by section 1000(a)(6) of Public Law 106-113.

       TITLE IV--OUTPATIENT SERVICES FURNISHED BY RURAL PROVIDERS

     SEC. 401. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR 
                   OUTPATIENT SERVICES FURNISHED BY RURAL 
                   HOSPITALS.

       (a) In General.--Section 1833(t)(7)(D) of the Social 
     Security Act (42 U.S.C. 1395l(t)(7)(D)), as added by section 
     202 of the Medicare, Medicaid, and SCHIP Balanced Budget 
     Refinement Act of 1999 (113 Stat. 1501A-342), as enacted into 
     law by section 1000(a)(6) of Public Law 106-113, is amended 
     to read as follows:

[[Page S7904]]

       ``(D) Hold harmless provisions for small rural hospitals 
     and cancer hospitals.--In the case of a hospital located in a 
     rural area and that has not more than 100 beds or a hospital 
     described in section 1886(d)(1)(B)(v), for covered OPD 
     services for which the PPS amount is less than the pre-BBA 
     amount, the amount of payment under this subsection shall be 
     increased by the amount of such difference.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     202 of the Medicare, Medicaid, and SCHIP Balanced Budget 
     Refinement Act of 1999 (113 Stat. 1501A-342), as enacted into 
     law by section 1000(a)(6) of Public Law 106-113.

     SEC. 402. PROVIDER-BASED RURAL HEALTH CLINIC CAP EXEMPTION.

       (a) In General.--The matter in section 1833(f) of the 
     Social Security Act (42 U.S.C. 1395l(f)) preceding paragraph 
     (1) is amended by striking ``with less than 50 beds'' and 
     inserting ``with an average daily patient census that does 
     not exceed 50''.
       (b) Effective Date.--The amendment made by subparagraph (A) 
     applies to services furnished on or after January 1, 2001.

     SEC. 403. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT SERVICES.

       (a) Payment for Certain Physician Assistant Services.--
     Section 1842(b)(6)(C) of the Social Security Act (42 U.S.C. 
     1395u(b)(6)(C)) is amended by striking ``for such services 
     provided before January 1, 2003,''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of enactment of this Act.

     SEC. 404. EXCLUSION OF RURAL HEALTH CLINIC SERVICES FROM THE 
                   PPS FOR SKILLED NURSING FACILITIES.

       (a) In General.--Section 1888(e)(2)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by 
     inserting after the first sentence the following: ``Services 
     described in this clause also include services that are 
     provided by a physician, a physician assistant, a nurse 
     practitioner, a certified nurse midwife, or a qualified 
     psychologist who is employed, or otherwise under contract, 
     with a rural health clinic.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to services furnished on or after January 1, 
     2001.

     SEC. 405. BONUS PAYMENTS FOR RURAL HOME HEALTH AGENCIES.

       (a) Increase in Payment Rates for Rural Agencies.--
       (1) In general.--Section 1895(b) of the Social Security Act 
     (42 U.S.C. 1395fff(b)) is amended by adding at the end the 
     following new paragraph:
       ``(7) Additional payment amount for services furnished in 
     rural areas.--In the case of home health services furnished 
     in a rural area (as defined in section 1886(d)(2)(D)), the 
     Secretary shall provide for an addition or adjustment to the 
     payment amount otherwise made under this section for services 
     furnished in a rural area in an amount equal to 10 percent of 
     the amount otherwise determined under this subsection.''.
       (2) Waiving budget neutrality.--Section 1895(b)(3) of such 
     Act (42 U.S.C. 1395fff(b)(3)) is amended by adding at the end 
     the following new subparagraph:
       ``(D) No adjustment for additional payments for rural 
     services.--The Secretary shall not reduce the standard 
     prospective payment amount (or amounts) under this paragraph 
     applicable to home health services furnished during a period 
     to offset the increase in payments resulting from the 
     application of paragraph (7) (relating to services furnished 
     in rural areas).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to episodes of care beginning on or after April 
     1, 2001.

                           TITLE V--BAD DEBT

     SEC. 501. RESTORATION OF FULL PAYMENT FOR BAD DEBTS OF 
                   QUALIFIED MEDICARE BENEFICIARIES.

       (a) Medicare Cost-Sharing Uncollectible and Not Covered by 
     Medicaid State Plans.--Section 1902(n)(3)(B) of the Social 
     Security Act (42 U.S.C. 1396a(n)(3)(B)) is amended--
       (1) by inserting ``(i)'' after ``(B)''; and
       (2) by adding at the end the following new clause:
       ``(ii) the amount of medicare cost-sharing that is 
     uncollectible from the beneficiary because of clause (i) and 
     that is not paid by any other individual or entity shall be 
     deemed to be bad debt for purposes of title XVIII; and''.
       (b) Recognition of 100 Percent of Bad Debt.--
       (1) Nonapplication of reduction.--Section 1861(v)(1)(T) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended 
     by inserting ``(other than any amount deemed to be bad debt 
     under section 1902(n)(3)(B)(ii))'' after ``amounts under this 
     title''.
       (2) Recognition with respect to certified nurse 
     anesthetists, nurse practitioners, and clinical nurse 
     specialists.--Section 1833 of the Social Security Act (42 
     U.S.C. 1395l) is amended--
       (A) in subsection (l)(5)(B), by striking ``No hospital'' 
     and inserting ``Except as provided in section 
     1902(n)(3)(B)(ii), no hospital''; and
       (B) in subsection (r)(2), by striking ``No hospital'' and 
     inserting ``Except as provided in section 1902(n)(3)(B)(ii), 
     no hospital''.
       (c) Technical Amendment.--Section 1861(v)(1)(T) of the 
     Social Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended by 
     striking ``1833(t)(5)(B)'' and inserting ``1833(t)(8)(B)'' in 
     the matter preceding clause (i).
       (d) Effective Date.--The amendments made by this section 
     shall apply to bad debt incurred on or after the date of 
     enactment of this Act.

      TITLE VI--NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM

     SEC. 601. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE 
                   NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP 
                   PROGRAM.

       (a) In General.--Section 117(c) of the Internal Revenue 
     Code of 1986 (relating to the exclusion from gross income 
     amounts received as a qualified scholarship) is amended--
       (1) by striking ``Subsections (a)'' and inserting the 
     following:
       ``(1) In general.--Except as provided in paragraph (2), 
     subsections (a)''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Exception.--Paragraph (1) shall not apply to any 
     amount received by an individual under the National Health 
     Service Corps Scholarship Program under section 338A(g)(1)(A) 
     of the Public Health Service Act.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to amounts received in taxable years beginning 
     after December 31, 1994.

 TITLE VII--TECHNICAL CORRECTIONS TO BALANCED BUDGET REFINEMENT ACT OF 
                                  1999

     SEC. 701. EXTENSION OF OPTION TO USE REBASED TARGET AMOUNTS 
                   TO ALL SOLE COMMUNITY HOSPITALS.

       (a) In General.--Section 1886(b)(3)(I)(i) of the Social 
     Security Act (42 U.S.C. 1395ww(b)(3)(I)(i)) (as added by 
     section 405 of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999 (113 Stat. 1501A-372), as 
     enacted into law by section 1000(a)(6) of Public Law 106-113) 
     is amended--
       (1) in the matter preceding subclause (I)--
       (A) by striking ``for its cost reporting period beginning 
     during 1999 is paid on the basis of the target amount 
     applicable to the hospital under subparagraph (C) and that''; 
     and
       (B) by striking ``such target amount'' and inserting ``the 
     amount otherwise determined under subsection (d)(5)(D)(i)'';
       (2) in subclause (I), by striking ``target amount otherwise 
     applicable'' and all that follows through ``target amount')'' 
     and inserting ``the amount otherwise applicable to the 
     hospital under subsection (d)(5)(D)(i) (referred to in this 
     clause as the `subsection (d)(5)(D)(i) amount')''; and
       (3) in each of subclauses (II) and (III), by striking 
     ``subparagraph (C) target amount'' and inserting ``subsection 
     (d)(5)(D)(i) amount''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
     of 1999, as enacted into law by section 1000(a)(6) of Public 
     Law 106-113.

     SEC. 702. PAYMENTS TO CRITICAL ACCESS HOSPITALS FOR CLINICAL 
                   DIAGNOSTIC LABORATORY TESTS.

       (a) Payment on Cost Basis Without Beneficiary Cost-
     Sharing.--
       (1) In general.--Section 1833(a)(6) of the Social Security 
     Act (42 U.S.C. 1395l(a)(6)) is amended by inserting 
     ``(including clinical diagnostic laboratory services 
     furnished by a critical access hospital)'' after ``outpatient 
     critical access hospital services''.
       (2) No beneficiary cost-sharing.--
       (A) In general.--Section 1834(g) of the Social Security Act 
     (42 U.S.C. 1395m(g)) is amended by inserting ``(except that 
     in the case of clinical diagnostic laboratory services 
     furnished by a critical access hospital the amount of payment 
     shall be equal to 100 percent of the reasonable costs of the 
     critical access hospital in providing such services)'' before 
     the period at the end.
       (B) BBRA amendment.--Section 1834(g) of the Social Security 
     Act (42 U.S.C. 1395m(g)) is amended--
       (i) in paragraph (1), by inserting ``(except that in the 
     case of clinical diagnostic laboratory services furnished by 
     a critical access hospital the amount of payment shall be 
     equal to 100 percent of the reasonable costs of the critical 
     access hospital in providing such services)'' after ``such 
     services,''; and
       (ii) in paragraph (2)(A), by inserting ``(except that in 
     the case of clinical diagnostic laboratory services furnished 
     by a critical access hospital the amount of payment shall be 
     equal to 100 percent of the reasonable costs of the critical 
     access hospital in providing such services)'' before the 
     period at the end.
       (b) Conforming Amendments.--Paragraphs (1)(D)(i) and 
     (2)(D)(i) of section 1833(a) of the Social Security Act (42 
     U.S.C. 1395l(a)(1)(D)(i); 1395l(a)(2)(D)(i)) are each amended 
     by striking ``or which are furnished on an outpatient basis 
     by a critical access hospital''.
       (c) Technical Amendment.--Section 403(d)(2) of the 
     Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
     of 1999 (113 Stat. 1501A-371), as enacted into law by section 
     1000(a)(6) of Public Law 106-113, is amended by striking 
     ``subsection (a)'' and inserting ``paragraph (1)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to services 
     furnished on or after November 29, 1999.
       (2) BBRA and technical amendments.--The amendments made by 
     subsections

[[Page S7905]]

     (a)(2)(B) and (c) shall take effect as if included in the 
     enactment of section 403(d) of the Medicare, Medicaid, and 
     SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 
     1501A-371), as enacted into law by section 1000(a)(6) of 
     Public Law 106-113.

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