[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2615 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 2615
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 SENATE OF THE UNITED STATES
June 12, 2002
Mr. Murkowski (for himself and Mr. Wellstone) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to provide for
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 2002''.
(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 subparagraph (B), 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 subparagraph (C), has a provider agreement
in effect with the Secretary and is open to the public as of
January 1, 2002; 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)(C) 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, 2002) 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, 2002.
``(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)(D)--
``(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)(D)--
``(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, 2002,
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, 2002, 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, 2002.
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, 2002.
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
determining the number of beds of a facility for
purposes of applying the bed limitations referred to in
subparagraph (B)(iii) and subsection (f), the Secretary
shall not take into account any bed of a distinct part
psychiatric or rehabilitation unit (described in the
matter following clause (v) of section 1886(d)(1)(B))
of the facility, except that the total number of beds
that are not taken into account pursuant to this
subparagraph with respect to a facility shall not
exceed 10.''.
(b) Payments to Home Health Agencies Owned and Operated by a CAH.--
Section 1895(f) (42 U.S.C. 1395fff(f)), as added by section 2(b)(3), is
further amended by inserting ``or by a home health agency that is owned
and operated by a critical access hospital (as defined in section
1861(mm)(1))'' after ``as defined in paragraph (2))''.
(c) Payments to CAH-Owned SNFs.--
(1) In general.--Section 1888(e) (42 U.S.C. 1395yy(e)) is
amended--
(A) in paragraph (1), by striking ``and (12)'' and
inserting ``(12), and (13)''; and
(B) by adding at the end thereof the following:
``(13) Exemption of cah facilities from pps.--In
determining payments under this part for covered skilled
nursing facility services furnished on or after October 1,
2002, by a skilled nursing facility that is a distinct part
unit of a critical access hospital (as defined in section
1861(mm)(1)) or is owned and operated by a critical access
hospital--
``(A) the prospective payment system established
under this subsection shall not apply; and
``(B) 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 subsection (a).''.
(2) Conforming changes.--
(A) In general.--Section 1814(b) (42 U.S.C.
1395f(b)), as amended by subsection (b)(2)(A), is
further amended in the matter preceding paragraph (1)--
(i) by inserting ``other than a skilled
nursing facility providing covered skilled
nursing facility services (as defined in
section 1888(e)(2)) or posthospital extended
care services to which section 1888(e)(13)
applies,'' after ``inpatient critical access
hospital services''; and
(ii) by striking ``1813 1886,'' and
inserting ``1813, 1886, 1888,''.
(B) Consolidated billing.--
(i) Recipient of payment.--Section
1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is
amended by inserting ``services to which
paragraph (7)(C) or (13) of section 1888(e)
applies and'' after ``other than''.
(ii) Exception to exclusion from
coverage.--Section 1862(a)(18) (42 U.S.C.
1395y(a)(18)) is amended by inserting ``(other
than services to which paragraph (7)(C) or (13)
of section 1888(e) applies)'' after ``section
1888(e)(2)(A)(i)''.
(d) Payments to Distinct Part Psychiatric or Rehabilitation Units
of CAHs.--Section 1886(b) (42 U.S.C. 1395ww(b)) is amended--
(1) in paragraph (1), by inserting ``, other than a
distinct part psychiatric or rehabilitation unit to which
paragraph (8) applies,'' after ``subsection (d)(1)(B)''; and
(2) by adding at the end the following:
``(8) Exemption of certain distinct part psychiatric or
rehabilitation units from cost limits.--In determining payments under
this part for inpatient hospital services furnished on or after October
1, 2002, by a distinct part psychiatric or rehabilitation unit
(described in the matter following clause (v) of subsection (d)(1)(B))
of a critical access hospital (as defined in section 1861(mm)(1))--
``(A) the limits imposed under the preceding paragraphs of
this subsection shall not apply; and
``(B) 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.''.
(e) Elimination of Isolation Test for Cost-Based CAH Ambulance
Services.--Paragraph (8) of section 1834(l) (42 U.S.C. 1395m(l)), as
added by section 205(a) of BIPA, is amended by striking the comma at
the end of the last subparagraph and all that follows and inserting a
period.
(f) Return on Equity.--Section 1861(v)(1)(P) (42 U.S.C.
1395x(v)(1)(P)), as amended by section 2(b)(4), is further amended by
adding at the end the following:
``(iii)(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, 2002, 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
critical access hospital services (as defined in section 1861(mm)(2)),
outpatient critical access hospital services (as defined in section
1861(mm)(3)), extended care services provided pursuant to an agreement
under section 1883, posthospital extended care services to which
section 1888(e)(13) applies, home health services to which section
1895(f) applies, ambulance services to which section 1834(l) applies,
and inpatient hospital services to which section 1886(b)(8) applies.
``(III) Payment under this clause shall be made without regard to
whether a provider is a proprietary provider.''.
(g) Technical Corrections.--
(1) Section 403(b) of bbra 1999.--Section 1820(b)(2) (42
U.S.C. 1395i-4(b)(2)) is amended by striking ``nonprofit or
public hospitals'' and inserting ``hospitals''.
(2) Section 203(b) of bipa 2000.--Section 1883(a)(3) (42
U.S.C. 1395tt(a)(3)) is amended--
(A) by inserting ``section 1861(v)(1)(G) or'' after
``Notwithstanding''; and
(B) by striking ``covered skilled nursing
facility''.
(h) Effective Dates.--
(1) Elimination of requirements.--The amendment made by
subsections (a) and (b) shall apply to services furnished on or
after October 1, 2002.
(2) Technical corrections.--
(A) BBRA.--The amendment made by subsection (f)(1)
shall be effective as if included in the enactment of
section 403(b) of the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act of 1999 (Appendix F, 113
Stat. 1501A-321), as enacted into law by section
1000(a)(6) of Public Law 106-113.
(B) BIPA.--The amendment made by subsection (f)(2)
shall be effective as if included in the enactment of
section 203(b) 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.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S5457-5458)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S5458-5460)
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