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108th CONGRESS
1st Session
H. R. 937
To amend title XVIII of the Social Security Act to provide for
improvements in access to services in rural hospitals and critical
access hospitals.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 26, 2003
Mr. Moran of Kansas (for himself, Mr. Turner of Texas, Mr. Berry, Mr.
Otter, Ms. Baldwin, Mr. Pickering, Mr. Osborne, Mr. Hastings of
Washington, Mr. Paul, Mr. McIntyre, Mr. Sandlin, Mr. Kind, Mr. Tiahrt,
Mr. Murtha, Mr. Whitfield, Mr. Stenholm, and Mr. Frost) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Energy and Commerce, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide for
improvements in access to services in rural hospitals and critical
access hospitals.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT.
(a) Short Title.--This Act may be cited as the ``Rural Community
Hospital Assistance Act of 2003''.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this Act an amendment is expressed
in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered a reference to that
section or other provision of the Social Security Act.
SEC. 2. ESTABLISHMENT OF RURAL COMMUNITY HOSPITAL (RCH) PROGRAM.
(a) In General.--Section 1861 (42 U.S.C. 1395x) is amended by
adding at the end of the following new subsection:
``Rural Community Hospital; Rural Community Hospital Services
``(ww)(1) The term `rural community hospital' means a hospital (as
defined in subsection (e)) that--
``(A) is located in a rural area (as defined in section
1886(d)(2)(D)) or treated as being so located pursuant to
section 1886(d)(8)(E);
``(B) subject to paragraph (2), has less than 51 acute care
inpatient beds, as reported in its most recent cost report;
``(C) makes available 24-hour emergency care services;
``(D) subject to paragraph (3), has a provider agreement in
effect with the Secretary and is open to the public as of
January 1, 2003; and
``(E) applies to the Secretary for such designation.
``(2) For purposes of paragraph (1)(B), beds in a psychiatric or
rehabilitation unit of the hospital which is a distinct part of the
hospital shall not be counted.
``(3) Subparagraph (1)(D) shall not be construed to prohibit any of
the following from qualifying as a rural community hospital:
``(A) A replacement facility (as defined by the Secretary
in regulations in effect on January 1, 2003) with the same
service area (as defined by the Secretary in regulations in
effect on such date).
``(B) A facility obtaining a new provider number pursuant
to a change of ownership.
``(C) A facility which has a binding written agreement with
an outside, unrelated party for the construction,
reconstruction, lease, rental, or financing of a building as of
January 1, 2003.
``(4) Nothing in this subsection shall be construed as prohibiting
a critical access hospital from qualifying as a rural community
hospital if the critical access hospital meets the conditions otherwise
applicable to hospitals under subsection (e) and section 1866.''.
(b) Payment.--
(1) Inpatient services.--Section 1814 (42 U.S.C. 1395f) is
amended by adding at the end the following new subsection:
``Payment for Inpatient Services Furnished in Rural Community Hospitals
``(m) The amount of payment under this part for inpatient hospital
services furnished in a rural community hospital, other than such
services furnished in a psychiatric or rehabilitation unit of the
hospital which is a distinct part, is, at the election of the hospital
in the application referred to in section 1861(ww)(1)(E)--
``(1) the reasonable costs of providing such services,
without regard to the amount of the customary or other charge,
or
``(2) the amount of payment provided for under the
prospective payment system for inpatient hospital services
under section 1886(d).''.
(2) Outpatient services.--Section 1834 (42 U.S.C. 1395m) is
amended by adding at the end the following new subsection:
``(n) Payment for Outpatient Services Furnished in Rural Community
Hospitals.--The amount of payment under this part for outpatient
services furnished in a rural community hospital is, at the election of
the hospital in the application referred to in section 1861(ww)(1)(E)--
``(1) the reasonable costs of providing such services,
without regard to the amount of the customary or other charge
and any limitation under section 1861(v)(1)(U), or
``(2) the amount of payment provided for under the
prospective payment system for covered OPD services under
section 1833(t).''.
(3) Home health services.--
(A) Exclusion from home health pps.--
(i) In general.--Section 1895 (42 U.S.C.
1395fff) is amended by adding at the end the
following:
``(f) Exclusion.--
``(1) In general.--In determining payments under this title
for home health services furnished on or after October 1, 2003,
by a qualified RCH-based home health agency (as defined in
paragraph (2))--
``(A) the agency may make a one-time election to
waive application of the prospective payment system
established under this section to such services
furnished by the agency shall not apply; and
``(B) in the case of such an election, payment
shall be made on the basis of the reasonable costs
incurred in furnishing such services as determined
under section 1861(v), but without regard to the amount
of the customary or other charges with respect to such
services or the limitations established under paragraph
(1)(L) of such section.
``(2) Qualified rch-based home health agency defined.--For
purposes of paragraph (1), a `qualified RCH-based home health
agency' is a home health agency that is a provider-based entity
(as defined in section 404 of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (Public Law
106-554; Appendix F, 114 Stat. 2763A-506) of a rural community
hospital that is located--
``(A) in a county in which no main or branch office
of another home health agency is located; or
``(B) at least 35 miles from any main or branch
office of another home health agency.''.
(ii) Conforming changes.--
(I) Payments under part a.--Section
1814(b) (42 U.S.C. 1395f(b)) is amended
by inserting ``or with respect to
services to which section 1895(f)
applies'' after ``equipment'' in the
matter preceding paragraph (1).
(II) Payments under part b.--
Section 1833(a)(2)(A) (42 U.S.C.
1395l(a)(2)(A)) is amended by striking
``the prospective payment system
under''.
(III) Per visit limits.--Section
1861(v)(1)(L)(i) (42 U.S.C.
1395x(v)(1)(L)(i)) is amended by
inserting ``(other than by a qualified
RCH-based home health agency (as
defined in section 1895(f)(2))'' after
``with respect to services furnished by
home health agencies''.
(iii) Consolidated billing.--
(I) Recipient of payment.--Section
1842(b)(6)(F) (42 U.S.C.
1395u(b)(6)(F)) is amended by inserting
``and excluding home health services to
which section to which section 1895(f)
applies'' after ``provided for in such
section''.
(II) Exception to exclusion from
coverage.--Section 1862(a) (42 U.S.C.
1395y(a)) is amended by inserting
before the period at the end of the
second sentence the following: ``and
paragraph (21) shall not apply to home
health services to which section
1895(f) applies''.
(4) Return on equity.--Section 1861(v)(1)(P) (42 U.S.C.
1395x(v)(1)(P)) is amended--
(A) by inserting ``(i)'' after ``(P)''; and
(B) by adding at the end the following:
``(ii)(I) Notwithstanding clause (i), subparagraph (S)(i), and
section 1886(g)(2), such regulations shall provide, in determining the
reasonable costs of the services described in subclause (II) furnished
by a rural community hospital on or after October 1, 2003, for payment
of a return on equity capital at a rate of return equal to 150 percent
of the average specified in clause (i):
``(II) The services referred to in subclause (I) are inpatient
hospital services, outpatient hospital services, home health services
furnished by an RCH-based home health agency (as defined in section
1895(f)(2)), and ambulance services.
``(III) Payment under this clause shall be made without regard to
whether a provider is a proprietary provider.''.
(5) Exemption from 30 percent reduction in reimbursement
for bad debt.--Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T))
is amended by inserting ``(other than a rural community
hospital)'' after ``In determining such reasonable costs for
hospitals''.
(c) Beneficiary Cost-Sharing for Outpatient Services.--Section
1834(n) (as added by subsection (b)(2)) is amended--
(1) by inserting ``(1)'' after ``(n)''; and
(2) adding at the end the following:
``(2) The amounts of beneficiary cost sharing for outpatient
services furnished in a rural community hospital under this part shall
be as follows:
``(A) For items and services that would have been paid
under section 1833(t) if provided by a hospital, the amount of
cost sharing determined under paragraph (8) of such section.
``(B) For items and services that would have been paid
under section 1833(h) if furnished by a provider or supplier,
no cost sharing shall apply.
``(C) For all other items and services, the amount of cost
sharing that would apply to the item or service under the
methodology that would be used to determine payment for such
item or service if provided by a physician, provider, or
supplier, as the case may be.''.
(d) Conforming Amendments.--
(1) Part a payment.--Section 1814(b) (42 U.S.C. 1395f(b))
is amended by inserting ``other than inpatient hospital
services furnished by a rural community hospital,'' after
``critical access hospital services,''.
(2) Part b payment.--
(A) In general.--Section 1833(a) (42 U.S.C.
1395l(a)) is amended--
(i) in paragraph (2), in the matter before
subparagraph (A), by striking ``and (I)'' and
inserting ``(I), and (K)'';
(ii) by striking ``and'' at the end of
paragraph (8);
(iii) by striking the period at the end of
paragraph (9) and inserting ``; and''; and
(iv) by adding at the end the following:
``(10) in the case of outpatient services furnished by a
rural community hospital, the amounts described in section
1834(n).''.
(B) Ambulance services.--Section 1834(l)(8) (42
U.S.C. 1395m(l)(8)), as added by section 205(a) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (Appendix F, 114 Stat. 2763A-
463), as enacted into law by section 1(a)(6) of Public
Law 106-554, is amended--
(i) in the heading, by striking ``critical
access hospitals'' and inserting ``certain
facilities'';
(ii) by striking ``or'' at the end of
subparagraph (A);
(iii) by redesignating subparagraph (B) as
subparagraph (C);
(iv) by inserting after subparagraph (A)
the following new subparagraph:
``(B) by a rural community hospital (as defined in
section 1861(ww)(1)), or''; and
(v) in subparagraph (C), as so
redesignated, by inserting ``or a rural
community hospital'' after ``critical access
hospital''.
(3) Technical amendments.--
(A) Consultation with state agencies.--Section 1863
(42 U.S.C. 1395z) is amended by striking ``and
(dd)(2)'' and inserting ``(dd)(2), (mm)(1), and
(ww)(1)''.
(B) Provider agreements.--Section 1866(a)(2)(A) (42
U.S.C. 1395cc(a)(2)(A)) is amended by inserting
``section 1834(n)(2),'' after ``section 1833(b),''.
(e) Effective Date.--The amendments made by this section shall
apply to items and services furnished on or after October 1, 2003.
SEC. 3. REMOVING BARRIERS TO ESTABLISHMENT OF DISTINCT PART UNITS BY
RCH AND CAH FACILITIES.
(a) In General.--Section 1886(d)(1)(B) (42 U.S.C. 1395ww(d)(1)(B))
is amended by striking ``a distinct part of the hospital (as defined by
the Secretary)'' in the matter following cause (v) and inserting ``a
distinct part (as defined by the Secretary) of the hospital or of a
critical access hospital or a rural community hospital''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to determinations with respect to distinct part unit status that
are made on or after October 1, 2003.
SEC. 4. IMPROVEMENTS TO MEDICARE CRITICAL ACCESS HOSPITAL (CAH)
PROGRAM.
(a) Exclusion of Certain Beds From Bed Count.--Section 1820(c)(2)
(42 U.S.C. 1395i-4(c)(2)) is amended by adding at the end the
following:
``(E) Exclusion of certain beds from bed count.--In
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