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Text of H.R.2860
HR 2860 IH
To amend title XVIII of the Social Security Act to protect and preserve access of Medicare beneficiaries in rural areas to health care providers under the Medicare Program, and for other purposes.
June 26, 2007
Mr. POMEROY (for himself, Mr. WALDEN of Oregon, Mr. STUPAK, Mrs. EMERSON, Mr. THOMPSON of California, Mr. MORAN of Kansas, Mr. KIND, Mr. PETERSON of Pennsylvania, Mr. ALLEN, Mr. BERRY, Mr. CAMP of Michigan, Ms. HERSETH SANDLIN, Mr. MCINTYRE, Mr. TANNER, Mr. BISHOP of Georgia, Mr. BOSWELL, Mr. BOYD of Florida, Mr. BOUCHER, Mrs. BOYDA of Kansas, Mr. BRALEY of Iowa, Mr. CARNEY, Mr. DAVIS of Alabama, Mr. EDWARDS, Mr. ETHERIDGE, Mr. GILCHREST, Mr. GRAVES, Mr. HARE, Mr. HASTINGS of Washington, Mr. HINCHEY, Ms. JACKSON-LEE of Texas, Mr. JONES of North Carolina, Mr. KANJORSKI, Mr. LAHOOD, Mr. LUCAS, Mr. MATHESON, Mr. MCHUGH, Mrs. MCMORRIS RODGERS, Mr. MCNULTY, Mr. MELANCON, Mr. OBERSTAR, Mr. PAUL, Mr. PICKERING, Mr. RAHALL, Mr. REHBERG, Mr. RENZI, Mr. SALAZAR, Mr. SIMPSON, Mr. TIAHRT, Mr. WELCH of Vermont, Mr. WILSON of Ohio, Mr. YOUNG of Alaska, Mr. THORNBERRY, and Mr. ROSS) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, 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
To amend title XVIII of the Social Security Act to protect and preserve access of Medicare beneficiaries in rural areas to health care providers under the Medicare Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Health Care Access and Rural Equity (H-CARE) Act of 2007'.
(b) Table of Contents- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE HOSPITAL SERVICES
Sec. 101. Fairness in the Medicare disproportionate share hospital (DSH) adjustment for rural hospitals.
Sec. 102. Treatment of Medicare hospital reclassifications.
Sec. 103. Critical access hospital improvements.
Sec. 104. Rebasing for sole community hospitals.
Sec. 105. Establishment of rural community hospital (RCH) program.
Sec. 106. Hold harmless through 2012 for small rural hospitals and sole community hospitals under the prospective payment system for hospital outpatient department services under the Medicare program.
TITLE II--MEDICARE PRACTITIONER SERVICES
Sec. 201. Coverage of marriage and family therapist services and mental health counselor services under part B of the Medicare program.
Sec. 202. Permanent treatment of certain physician pathology services under Medicare.
Sec. 203. Extension of Medicare incentive payment program for physician scarcity areas.
Sec. 204. Extension of Medicare increase payments for ground ambulance services in rural areas.
Sec. 205. Extension of floor on Medicare work geographic adjustment.
TITLE III--OTHER MEDICARE PROVISIONS
Sec. 301. Ensuring proportional representation of interests of rural areas on MedPAC.
Sec. 302. Rural health clinic improvements.
Sec. 303. Use of medical conditions for coding ambulance services.
Sec. 304. Improvement in payments to retain emergency and other capacity for ambulances in rural areas.
Sec. 305. Medicare remote monitoring pilot projects.
Sec. 306. Minimum payment rate by Medicare Advantage organizations for services furnished by a critical access hospital and a rural health clinic.
Sec. 307. Prompt payment by Medicare prescription drug plans and MA-PD plans under part D.
Sec. 308. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in certain rural areas.
Sec. 309. Extension of temporary Medicare payment increase for home health services furnished in a rural area.
TITLE IV--OTHER PROVISIONS
Sec. 401. Health information technology grants for rural health care providers.
Sec. 402. Rural health quality advisory commission and demonstration projects.
Sec. 403. Rural health care services.
Sec. 404. Community health center collaborative access expansion.
Sec. 405. Facilitating the provision of telehealth services across State lines.
Sec. 406. Expanded application of the 340B program to drugs provided in rural hospitals.
TITLE I--MEDICARE HOSPITAL SERVICES
SEC. 101. FAIRNESS IN THE MEDICARE DISPROPORTIONATE SHARE HOSPITAL (DSH) ADJUSTMENT FOR RURAL HOSPITALS.
Section 1886(d)(5)(F)(xiv)(II) of the Social Security Act (
(1) by striking `or, in the case' and all that follows through `subparagraph (G)(iv)'; and
(2) by inserting at the end the following new sentence: `The preceding sentence shall not apply to any hospital with respect to discharges occurring on or after October 1, 2007.'.
SEC. 102. TREATMENT OF MEDICARE HOSPITAL RECLASSIFICATIONS.
(a) Extending Certain Medicare Hospital Wage Index Reclassifications Through Fiscal Year 2010-
(1) IN GENERAL- Section 106(a) of the Medicare Improvements and Extension Act of 2006 (division B of public Law 109-432) is amended by striking `September 30, 2007' and inserting `September 30, 2010'.
(2) SPECIAL EXCEPTION RECLASSIFICATIONS- The Secretary of Health and Human Services shall extend for discharges occurring through September 30, 2013, the special exception reclassification of a sole community hospital located in a State with less than 10 people per square mile, made under the authority of section 1886(d)(5)(I)(i) of the Social Security Act (
(b) Disregarding Section 508 Hospital Reclassifications for Purposes of Group Reclassifications- Section 508 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173,
`(g) Disregarding Hospital Reclassifications for Purposes of Group Reclassifications- For purposes of the reclassification of a group of hospitals in a geographic area under section 1886(d), a hospital reclassified under this section (including any such reclassification which is extended under section 106(a) of the Medicare Improvements and Extension Act of 2006) shall not be taken into account and shall not prevent the other hospitals in such area from establishing such a group for such purpose.'.
SEC. 103. CRITICAL ACCESS HOSPITAL IMPROVEMENTS.
(a) Clarification of Payment for Clinical Laboratory Tests Furnished by Critical Access Hospitals-
(1) IN GENERAL- Section 1834(g)(4) of the Social Security Act (
(A) in the heading, by striking `NO BENEFICIARY COST-SHARING' and inserting `TREATMENT OF'; and
(B) by adding at the end the following new sentence: `For purposes of the preceding sentence and section 1861(mm)(3), clinical diagnostic laboratory services furnished by a critical access hospital shall be treated as being furnished as part of outpatient critical access services without regard to whether--
`(A) the individual with respect to whom such services are furnished is physically present in the critical access hospital at the time the specimen is collected;
`(B) such individual is registered as an outpatient on the records of, and receives such services directly from, the critical access hospital; or
`(C) payment is (or, but for this subsection, would be) available for such services under the fee schedule established under section 1833(h).'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to cost reporting periods beginning on or after October 1, 2003.
(b) Elimination of Isolation Test for Cost-Based Ambulance Reimbursement-
(1) IN GENERAL- Section 1834(l)(8) of the Social Security Act (
(A) in subparagraph (B)--
(i) by striking `owned and'; and
(ii) by inserting `(including when such services are provided by the entity under an arrangement with the hospital)' after `hospital'; and
(B) by striking the comma at the end of subparagraph (B) and all that follows and inserting a period.
(2) EFFECTIVE DATE- The amendments made by this subsection shall apply to services furnished on or after January 1, 2008.
(c) Provision of a More Flexible Alternative to the CAH Designation 25 Inpatient Bed Limit Requirement-
(1) IN GENERAL- Section 1820(c)(2) of the Social Security Act (
(A) in subparagraph (B)(iii), by striking `provides not more than' and inserting `subject to subparagraph (F), provides not more than'; and
(B) by adding at the end the following new subparagraph:
`(F) ALTERNATIVE TO 25 INPATIENT BED LIMIT REQUIREMENT-
`(i) IN GENERAL- A State may elect to treat a facility, with respect to the designation of the facility for a cost reporting period, as satisfying the requirement of subparagraph (B)(iii) relating to a maximum number of acute care inpatient beds if the facility elects, in accordance with a method specified by the Secretary and before the beginning of the cost reporting period, to meet the requirement under clause (ii).
`(ii) ALTERNATE REQUIREMENT- The requirement under this clause, with respect to a facility and a cost reporting period, is that the total number of inpatient bed days described in subparagraph (B)(iii) during such period will not exceed 7,300. For purposes of this subparagraph, an individual who is an inpatient in a bed in the facility for a single day shall be counted as one inpatient bed day.
`(iii) WITHDRAWAL OF ELECTION- The option described in clause (i) shall not apply to a facility for a cost reporting period if the facility (for any two consecutive cost reporting periods during the previous 5 cost reporting periods) was treated under such option and had a total number of inpatient bed days for each of such two cost reporting periods that exceeded the number specified in such clause.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply to cost reporting periods beginning on or after the date of the enactment of this Act.
SEC. 104. REBASING FOR SOLE COMMUNITY HOSPITALS.
(a) Rebasing Permitted- Section 1886(b)(3) of the Social Security Act (
`(K)(i) For cost reporting periods beginning on or after October 1, 2007, in the case of a sole community hospital there shall be substituted for the amount otherwise determined under subsection (d)(5)(D)(i) of this section, if such substitution results in a greater amount of payment under this section for the hospital--
`(I) with respect to discharges occurring in fiscal year 2008, 75 percent of the subsection (d)(5)(D)(i) amount (as described in subparagraph (I)(i)(I)) and 25 percent of the subparagraph (K) rebased target amount (as defined in clause (ii));
`(II) with respect to discharges occurring in fiscal year 2009, 50 percent of the subsection (d)(5)(D)(i) amount and 50 percent of the subparagraph (K) rebased target amount;
`(III) with respect to discharges occurring in fiscal year 2010, 25 percent of the subsection (d)(5)(D)(i) amount and 75 percent of the subparagraph (K) rebased target amount; and
`(IV) with respect to discharges occurring after fiscal year 2010, 100 percent of the subparagraph (K) rebased target amount.
`(ii) For purposes of this subparagraph, the `subparagraph (K) rebased target amount' has the meaning given the term `target amount' in subparagraph (C), except that--
`(I) there shall be substituted for the base cost reporting period the 12-month cost reporting period beginning during fiscal year 2002;
`(II) any reference in subparagraph (C)(i) to the `first cost reporting period' described in such subparagraph is deemed a reference to the first cost reporting period beginning on or after October 1, 2007; and
`(III) the applicable percentage increase shall only be applied under subparagraph (C)(iv) for discharges occurring in fiscal years beginning with fiscal year 2009.'.
(b) Conforming Amendments- Section 1886(b)(3) of such Act (
(1) in subparagraph (C), by inserting `and subparagraph (K)' after `subject to subparagraph (I)' in the matter preceding clause (i); and
(2) in subparagraph (I)(i)--
(A) by striking `For' in the matter preceding subclause (I) and inserting `Subject to subparagraph (K), for'; and
(B) in subclause (I), by inserting `and subparagraph (K)' after `referred to in this clause'.
SEC. 105. ESTABLISHMENT OF RURAL COMMUNITY HOSPITAL (RCH) PROGRAM.
(a) In General- Section 1861 of the Social Security Act (
`Rural Community Hospital; Rural Community Hospital Services
`(ddd)(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, 2008; 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, 2008) 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, 2008.
`(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.
`(5) Nothing in this subsection shall be construed as prohibiting a rural community hospital participating in the demonstration program under Section 410A of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2313) from qualifying as a rural community hospital if the rural community hospital meets the conditions otherwise applicable to hospitals under subsection (e) and section 1866.'.
(b) Payment-
(1) INPATIENT HOSPITAL SERVICES- Section 1814 of the Social Security Act (
`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(ddd)(1)(E)--
`(1) 101 percent of 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 of such Act (
`(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(ddd)(1)(E)--
`(1) 101 percent of 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) EXEMPTION FROM 30-PERCENT REDUCTION IN REIMBURSEMENT FOR BAD DEBT- Section 1861(v)(1)(T) of such Act (
(c) Beneficiary Cost-Sharing for Outpatient Services- Section 1834(n) of such Act (as added by subsection (b)(2)) is amended--
(1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;
(2) by inserting `(1)' after `(n)'; and
(3) by 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) of such Act (
(2) PART B PAYMENT- Section 1833(a) of such Act (
(A) in paragraph (2), in the matter before subparagraph (A), by striking `and (I)' and inserting `(I), and (K)';
(B) by striking `and' at the end of paragraph (8);
(C) by striking the period at the end of paragraph (9) and inserting `; and'; and
(D) 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).'.
(3) TECHNICAL AMENDMENTS-
(A) CONSULTATION WITH STATE AGENCIES- Section 1863 of such Act (
(B) PROVIDER AGREEMENTS- Section 1866(a)(2)(A) of such Act (
(e) Effective Date- The amendments made by this section shall apply to items and services furnished on or after October 1, 2007.
SEC. 106. HOLD HARMLESS THROUGH 2012 FOR SMALL RURAL HOSPITALS AND SOLE COMMUNITY HOSPITALS UNDER THE PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES UNDER THE MEDICARE PROGRAM.
Section 1833(t)(7)(D)(i) of the Social Security Act (
(1) in subclause (II)--
(A) by striking `January 1, 2009' and inserting `January 1, 2008';
(B) by striking `2006, 2007, or 2008' and inserting `2006 or 2007'; and
(C) by striking `95 percent, 90 percent, and 85 percent' and inserting `95 percent and 90 percent'; and
(2) by adding at the end the following new subclause:
`(III) In the case of a hospital located in a rural area and that has not more than 100 beds or a sole community hospital (as defined in section 1886(d)(5)(D)(iii)), for covered OPD services furnished after December 31, 2007, and before January 1, 2013, 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.'.
TITLE II--MEDICARE PRACTITIONER SERVICES
SEC. 201. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES AND MENTAL HEALTH COUNSELOR SERVICES UNDER PART B OF THE MEDICARE PROGRAM.
(a) Coverage of Services-
(1) IN GENERAL- Section 1861(s)(2) of the Social Security Act (
(A) in subparagraph (Z), by striking `and' at the end;
(B) in subparagraph (AA), by inserting `and' at the end; and
(C) by adding at the end the following new subparagraph:
`(BB) marriage and family therapist services (as defined in subsection (ccc)(1)) and mental health counselor services (as defined in subsection (ccc)(3));'.
(2) DEFINITIONS- Section 1861 of such Act (
`Marriage and Family Therapist Services; Marriage and Family Therapist; Mental Health Counselor Services; Mental Health Counselor
`(ccc)(1) The term `marriage and family therapist services' means services performed by a marriage and family therapist (as defined in paragraph (2)) for the diagnosis and treatment of mental illnesses, which the marriage and family therapist is legally authorized to perform under State law (or the State regulatory mechanism provided by State law) of the State in which such services are performed, as would otherwise be covered if furnished by a physician or as an incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services.
`(2) The term `marriage and family therapist' means an individual who--
`(A) possesses a master's or doctoral degree which qualifies for licensure or certification as a marriage and family therapist pursuant to State law;
`(B) after obtaining such degree has performed at least 2 years of clinical supervised experience in marriage and family therapy; and
`(C) in the case of an individual performing services in a State that provides for licensure or certification of marriage and family therapists, is licensed or certified as a marriage and family therapist in such State.
`(3) The term `mental health counselor services' means services performed by a mental health counselor (as defined in paragraph (4)) for the diagnosis and treatment of mental illnesses which the mental health counselor is legally authorized to perform under State law (or the State regulatory mechanism provided by the State law) of the State in which such services are performed, as would otherwise be covered if furnished by a physician or as incident to a physician's professional service, but only if no facility or other provider charges or is paid any amounts with respect to the furnishing of such services.
`(4) The term `mental health counselor' means an individual who--
`(A) possesses a master's or doctor's degree in mental health counseling or a related field;
`(B) after obtaining such a degree has performed at least 2 years of supervised mental health counselor practice; and
`(C) in the case of an individual performing services in a State that provides for licensure or certification of mental health counselors or professional counselors, is licensed or certified as a mental health counselor or professional counselor in such State.'.
(3) PROVISION FOR PAYMENT UNDER PART B- Section 1832(a)(2)(B) of such Act (
`(v) marriage and family therapist services and mental health counselor services;'.
(4) AMOUNT OF PAYMENT- Section 1833(a)(1) of such Act (
(A) by striking `and (V)' and inserting `(V)'; and
(B) by inserting before the semicolon at the end the following: `, and (W) with respect to marriage and family therapist services and mental health counselor services under section 1861(s)(2)(BB), the amounts paid shall be 80 percent of the lesser of the actual charge for the services or 75 percent of the amount determined for payment of a psychologist under subparagraph (L)'.
(5) EXCLUSION OF MARRIAGE AND FAMILY THERAPIST SERVICES AND MENTAL HEALTH COUNSELOR SERVICES FROM SKILLED NURSING FACILITY PROSPECTIVE PAYMENT SYSTEM- Section 1888(e)(2)(A)(ii) of such Act (
(6) INCLUSION OF MARRIAGE AND FAMILY THERAPISTS AND MENTAL HEALTH COUNSELORS AS PRACTITIONERS FOR ASSIGNMENT OF CLAIMS- Section 1842(b)(18)(C) of such Act (
`(vii) A marriage and family therapist (as defined in section 1861(ccc)(2)).
`(viii) A mental health counselor (as defined in section 1861(ccc)(4)).'.
(b) Coverage of Certain Mental Health Services Provided in Certain Settings-
(1) RURAL HEALTH CLINICS AND FEDERALLY QUALIFIED HEALTH CENTERS- Section 1861(aa)(1)(B) of the Social Security Act (
(2) HOSPICE PROGRAMS- Section 1861(dd)(2)(B)(i)(III) of such Act (
(c) Authorization of Marriage and Family Therapists To Develop Discharge Plans for Post-Hospital Services- Section 1861(ee)(2)(G) of the Social Security Act (
(d) Effective Date- The amendments made by this section shall apply with respect to services furnished on or after January 1, 2008.
SEC. 202. PERMANENT TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES UNDER MEDICARE.
Section 1848(i) of the Social Security Act (
`(4) TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES-
`(A) IN GENERAL- With respect to services furnished on or after January 1, 2008, if an independent laboratory furnishes the technical component of a physician pathology service to a fee-for-service Medicare beneficiary who is an inpatient or outpatient of a covered hospital, the Secretary shall treat such component as a service for which payment shall be made to the laboratory under this section and not as an inpatient hospital service for which payment is made to the hospital under section 1886(d) or as a hospital outpatient service for which payment is made to the hospital under section 1833(t).
`(B) DEFINITIONS- In this paragraph:
`(i) COVERED HOSPITAL-
`(I) IN GENERAL- The term `covered hospital' means, with respect to an inpatient or outpatient, a hospital that had an arrangement with an independent laboratory that was in effect as of July 22, 1999, under which a laboratory furnished the technical component of physician pathology services to fee-for-service Medicare beneficiaries who were hospital inpatients or outpatients, respectively, and submitted claims for payment for such component to a carrier with a contract under section 1842 and not to the hospital.
`(II) CHANGE IN OWNERSHIP DOES NOT AFFECT DETERMINATION- A change in ownership with respect to a hospital on or after the date referred to in subclause (I) shall not affect the determination of whether such hospital is a covered hospital for purposes of such subclause.
`(ii) FEE-FOR-SERVICE MEDICARE BENEFICIARY- The term `fee-for-service Medicare beneficiary' means an individual who is entitled to (or enrolled for) benefits under part A, or enrolled under this part, or both, but who is not enrolled in any of the following:
`(I) A Medicare Advantage plan under part C.
`(II) A plan offered by an eligible organization under section 1876.
`(III) A program of all-inclusive care for the elderly (PACE) under section 1894.
`(IV) A social health maintenance organization (SHMO) demonstration project established under section 4018(b) of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203).
`(C) REFERENCE- For the provision related to the treatment of certain services furnished prior to January 1, 2008, see section 542 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, as amended by section 732 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and section 104 of the Medicare Improvements and Extension Act of 2006 (division B of Public Law 109-432).'.
SEC. 203. EXTENSION OF MEDICARE INCENTIVE PAYMENT PROGRAM FOR PHYSICIAN SCARCITY AREAS.
Section 1833(u)(1) of the Social Security Act (
SEC. 204. EXTENSION OF MEDICARE INCREASE PAYMENTS FOR GROUND AMBULANCE SERVICES IN RURAL AREAS.
Section 1834(l)(13) of the Social Security Act (
(1) in subparagraph (A)--
(A) in the matter before clause (i), by striking `furnished on or after July 1, 2004, and before January 1, 2007,';
(B) in clause (i), by inserting `for services furnished on or after July 1, 2004, and before January 1, 2012,' after `in such paragraph,'; and
(C) in clause (ii), by inserting `for services furnished on or after July 1, 2004, and before January 1, 2007,' after `in clause (i),'; and
(2) in subparagraph (B)--
(A) in the heading, by striking `AFTER 2006' and inserting `FOR SUBSEQUENT PERIODS';
(B) by inserting `clauses (i) and (ii) of' before `subparagraph (A)'; and
(C) by striking `in such subparagraph' and inserting `in the respective clause'.
SEC. 205. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT.
Section 1848(e)(1)(E) of the Social Security Act (
TITLE III--OTHER MEDICARE PROVISIONS
SEC. 301. ENSURING PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL AREAS ON MEDPAC.
(a) In General- Section 1805(c)(2) of the Social Security Act (
(1) in subparagraph (A), by inserting `consistent with subparagraph (E)' after `rural representatives'; and
(2) by adding at the end the following new subparagraph:
`(E) PROPORTIONAL REPRESENTATION OF INTERESTS OF RURAL AREAS- In order to provide a balance between urban and rural representatives under subparagraph (A), the proportion of members who represent the interests of health care providers and Medicare beneficiaries located in rural areas shall be no less than the proportion, of the total number of Medicare beneficiaries, who reside in rural areas.'.
(b) Effective Date- The amendments made by subsection (a) shall apply with respect to appointments made to the Medicare Payment Advisory Commission after the date of the enactment of this Act.
SEC. 302. RURAL HEALTH CLINIC IMPROVEMENTS.
Section 1833(f) of the Social Security Act (
(1) in paragraph (1), by striking `, and' at the end and inserting a semicolon;
(2) in paragraph (2)--
(A) by inserting `(before 2008)' after `in a subsequent year'; and
(B) by striking the period at the end and inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
`(3) in 2008, at $92 per visit; and
`(4) in a subsequent year, at the limit established under this subsection for the previous year increased by the percentage increase in the MEI (as so defined) applicable to primary care services (as so defined) furnished as of the first day of that year.'.
SEC. 303. USE OF MEDICAL CONDITIONS FOR CODING AMBULANCE SERVICES.
Section 1834(l)(7) of the Social Security Act (
`(7) CODING SYSTEM-
`(A) IN GENERAL- The Secretary shall, in accordance with section 1173(c)(1)(B) and not later than January 1, 2008, establish a mandatory system or systems for the coding of claims for ambulance services for which payment is made under this subsection, including a code set specifying the medical condition of the individual who is transported and the level of service that is appropriate for the transportation of an individual with that medical condition.
`(B) MEDICAL CONDITIONS- The code set established under subparagraph (A) shall take into account the list of medical conditions developed in the course of the negotiated rulemaking process conducted under paragraph (1).'.
SEC. 304. IMPROVEMENT IN PAYMENTS TO RETAIN EMERGENCY AND OTHER CAPACITY FOR AMBULANCES IN RURAL AREAS.
(a) In General- Section 1834(l) of the Social Security Act (
`(15) ADDITIONAL PAYMENTS FOR PROVIDERS FURNISHING AMBULANCE SERVICES IN RURAL AREAS-
`(A) IN GENERAL- In the case of ground ambulance services furnished on or after January 1, 2008, for which the transportation originates in a rural area (as determined under subparagraph (B)), the Secretary shall provide for a percent increase in the base rate of the fee schedule for a trip identified under this subsection.
`(B) IDENTIFICATION OF RURAL AREAS- The Secretary, in consultation with the Office of Rural Health Policy, shall use the Rural-Urban Commuting Areas (RUCA) coding system, adopted by that Office, to designate rural areas for the purposes of this paragraph. A rural area is any area in RUCA levels 2 through 10 and any unclassified area.
`(C) TIERING OF RURAL AREAS- The Secretary shall designate 4 tiers of rural areas, using a ZIP Code population-based methodology generated by the RUCA coding system, as follows:
`(i) TIER 1- A rural area that is a high metropolitan commuting area, in which 30 percent or more of the commuting flow is to an urban area, as designated by the Bureau of the Census (RUCA level 2).
`(ii) TIER 2- A rural area that is a low metropolitan commuting area, in which less than 30 percent of the commuting flow is to an urban area or to a large town, as designated by the Bureau of the Census (RUCA levels 3-6).
`(iii) TIER 3- A rural area that is a small town core, as designated by the Bureau of the Census, in which no significant portion of the commuting flow is to an area of population greater than 10,000 people (RUCA levels 7-9).
`(iv) TIER 4- A rural area in which there is no dominant commuting flow (RUCA level 10) and any unclassified area.
The Secretary shall consult with the Office of Rural Health Policy not less often than every 2 years to update the designation of rural areas in accordance with any changes that are made to the RUCA system.
`(D) PAYMENT ADJUSTMENTS FOR TRIPS IN RURAL AREAS- The Secretary shall adjust the payment rate under this section for ambulance trips that originate in each of the tiers established in subparagraph (C) according to the national average cost of full-cost providers for providing ambulance services in each such tier.'.
(b) Review of Payments for Rural Ambulance Services and Report to Congress-
(1) REVIEW- Not later than July 1, 2009, the Secretary of Health and Human Services shall review the system for adjusting payments for rural ambulance services under section 1834(l)(15) of the Social Security Act, as added by subsection (a), to determine the adequacy and appropriateness of such adjustments. In conducting such review, the Secretary shall consult with providers and suppliers affected by such adjustments and with representatives of the ambulance industry generally to determine--
(A) whether such adjustments adequately cover the additional costs incurred in serving areas of low population density; and
(B) whether the tiered structure for making such adjustments appropriately reflects the difference in costs of providing services in different types of rural areas.
(2) REPORT- Not later than January 1, 2011, the Secretary shall submit to Congress a report on the review conducted under paragraph (1) together with any recommendations for revision to the systems for adjusting payments for ambulance services in rural areas that the Secretary of Health and Human Services determines appropriate.
(c) Conforming Amendments- (1) Section 1834(l) of the Social Security Act (
`(16) DESIGNATION OF RURAL AREAS FOR MILEAGE PAYMENT PURPOSES- In establishing any differential in the amount of payment for mileage between rural and urban areas in the fee schedule established under paragraph (1), the Secretary shall, in the case of ambulance services furnished on or after January 1, 2008, identify rural areas in the same manner as provided in paragraph (15)(B).'.
(2) Section 1834(l)(12)(A) of such Act (
(3) Section 1834(l)(13)(A)(i) of such Act (
(A) by inserting `(or in the case of such services furnished in 2008, in a rural area identified by the Secretary under paragraph (15)(B))' after `such paragraph'; and
(B) by striking `paragraphs (11) and (12)' and inserting `paragraphs (11), (12), and (15)'.
SEC. 305. MEDICARE REMOTE MONITORING PILOT PROJECTS.
(a) Pilot Projects-
(1) IN GENERAL- Not later than 9 months after the date of enactment of this Act, the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall conduct pilot projects under title XVIII of the Social Security Act for the purpose of providing incentives to home health agencies to utilize home monitoring and communications technologies that--
(A) enhance health outcomes for Medicare beneficiaries; and
(B) reduce expenditures under such title.
(2) SITE REQUIREMENTS-
(A) URBAN AND RURAL- The Secretary shall conduct the pilot projects under this section in both urban and rural areas.
(B) SITE IN A SMALL STATE- The Secretary shall conduct at least 3 of the pilot projects in a State with a population of less than 1,000,000.
(3) DEFINITION OF HOME HEALTH AGENCY- In this section, the term `home health agency' has the meaning given that term in section 1861(o) of the Social Security Act (
(b) Medicare Beneficiaries Within the Scope of Projects- The Secretary shall specify the criteria for identifying those Medicare beneficiaries who shall be considered within the scope of the pilot projects under this section for purposes of the application of subsection (c) and for the assessment of the effectiveness of the home health agency in achieving the objectives of this section. Such criteria may provide for the inclusion in the projects of Medicare beneficiaries who begin receiving home health services under title XVIII of the Social Security Act after the date of the implementation of the projects.
(c) Incentives-
(1) PERFORMANCE TARGETS- The Secretary shall establish for each home health agency participating in a pilot project under this section a performance target using one of the following methodologies, as determined appropriate by the Secretary:
(A) ADJUSTED HISTORICAL PERFORMANCE TARGET- The Secretary shall establish for the agency--
(i) a base expenditure amount equal to the average total payments made to the agency under parts A and B of title XVIII of the Social Security Act for Medicare beneficiaries determined to be within the scope of the pilot project in a base period determined by the Secretary; and
(ii) an annual per capita expenditure target for such beneficiaries, reflecting the base expenditure amount adjusted for risk and adjusted growth rates.
(B) COMPARATIVE PERFORMANCE TARGET- The Secretary shall establish for the agency a comparative performance target equal to the average total payments under such parts A and B during the pilot project for comparable individuals in the same geographic area that are not determined to be within the scope of the pilot project.
(2) INCENTIVE- Subject to paragraph (3), the Secretary shall pay to each participating home care agency an incentive payment for each year under the pilot project equal to a portion of the Medicare savings realized for such year relative to the performance target under paragraph (1).
(3) LIMITATION ON EXPENDITURES- The Secretary shall limit incentive payments under this section in order to ensure that the aggregate expenditures under title XVIII of the Social Security Act (including incentive payments under this subsection) do not exceed the amount that the Secretary estimates would have been expended if the pilot projects under this section had not been implemented.
(d) Waiver Authority- The Secretary may waive such provisions of titles XI and XVIII of the Social Security Act as the Secretary determines to be appropriate for the conduct of the pilot projects under this section.
(e) Report to Congress- Not later than 5 years after the date that the first pilot project under this section is implemented, the Secretary shall submit to Congress a report on the pilot projects. Such report shall contain a detailed description of issues related to the expansion of the projects under subsection (f) and recommendations for such legislation and administrative actions as the Secretary considers appropriate.
(f) Expansion- If the Secretary determines that any of the pilot projects under this section enhance health outcomes for Medicare beneficiaries and reduce expenditures under title XVIII of the Social Security Act, the Secretary may initiate comparable projects in additional areas.
(g) Incentive Payments Have No Effect on Other Medicare Payments to Agencies- An incentive payment under this section--
(1) shall be in addition to the payments that a home health agency would otherwise receive under title XVIII of the Social Security Act for the provision of home health services; and
(2) shall have no effect on the amount of such payments.
SEC. 306. MINIMUM PAYMENT RATE BY MEDICARE ADVANTAGE ORGANIZATIONS FOR SERVICES FURNISHED BY A CRITICAL ACCESS HOSPITAL AND A RURAL HEALTH CLINIC.
(a) In General- Section 1857(e) of the Social Security Act (
`(4) MINIMUM PAYMENT RATE FOR SERVICES FURNISHED BY A CRITICAL ACCESS HOSPITAL AND A RURAL HEALTH CLINIC- A contract under this section between an MA organization and the Secretary for the offering of an MA plan shall require the organization to provide for a payment rate under the plan for inpatient and outpatient critical access hospital services and rural health clinic services furnished to enrollees of the plan and for extended care services furnished by a critical access hospital under an agreement entered into under section 1883 to such enrollees (whether or not the services are furnished pursuant to an agreement between such organization and a critical access hospital or a rural health clinic) that is not less than--
`(A) the applicable payment rate established under part A or part B (which includes the payment of an interim rate and a subsequent cost reconciliation) with respect to the critical access hospital for such inpatient, outpatient, and extended care services or the rural health clinic for such rural health clinic services; or
`(B) if the critical access hospital or the rural health clinic determines appropriate, 103 percent of the applicable interim payment rate established under part A or part B with respect to the critical access hospital for such inpatient, outpatient, and extended care services or the rural health clinic for such rural health clinic services.'.
(b) Effective Date- The amendments made by this section shall apply to Medicare Advantage contract years beginning on or after January 1, 2008.
SEC. 307. PROMPT PAYMENT BY MEDICARE PRESCRIPTION DRUG PLANS AND MA-PD PLANS UNDER PART D.
(a) Application to Prescription Drug Plans- Section 1860D-12(b) of the Social Security Act (
`(4) PROMPT PAYMENT OF CLEAN CLAIMS-
`(A) PROMPT PAYMENT- Each contract entered into with a PDP sponsor under this subsection with respect to a prescription drug plan offered by such sponsor shall provide that payment shall be issued, mailed, or otherwise transmitted with respect to all clean claims submitted under this part within the applicable number of calendar days after the date on which the claim is received.
`(B) DEFINITIONS- In this paragraph:
`(i) CLEAN CLAIM- The term `clean claim' means a claim, with respect to a covered part D drug, that has no apparent defect or impropriety (including any lack of any required substantiating documentation) or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this part.
`(ii) APPLICABLE NUMBER OF CALENDAR DAYS- The term `applicable number of calendar days' means--
`(I) with respect to claims submitted electronically, 14 calendar days; and
`(II) with respect to claims submitted otherwise, 30 calendar days.
`(C) INTEREST PAYMENT- If payment is not issued, mailed, or otherwise transmitted within the applicable number of calendar days (as defined in subparagraph (B)) after a clean claim is received, interest shall be paid at a rate used for purposes of section 3902(a) of title 31, United States Code (relating to interest penalties for failure to make prompt payments), for the period beginning on the day after the required payment date and ending on the date on which payment is made.
`(D) PROCEDURES INVOLVING CLAIMS-
`(i) CLAIMS DEEMED TO BE CLEAN CLAIMS-
`(I) IN GENERAL- A claim for a covered part D drug shall be deemed to be a clean claim for purposes of this paragraph if the PDP sponsor involved does not provide a notification of deficiency to the claimant by the 10th day that begins after the date on which the claim is submitted.
`(II) NOTIFICATION OF DEFICIENCY- For purposes of subclause (II), the term `notification of deficiency' means a notification that specifies all defects or improprieties in the claim involved and that lists all additional information or documents necessary for the proper processing and payment of the claim.
`(ii) PAYMENT OF CLEAN PORTIONS OF CLAIMS- A PDP sponsor shall, as appropriate, pay any portion of a claim for a covered part D drug that would be a clean claim but for a defect or impropriety in a separate portion of the claim in accordance with subparagraph (A).
`(iii) OBLIGATION TO PAY- A claim for a covered part D drug submitted to a PDP sponsor that is not paid or contested by the provider within the applicable number of calendar days (as defined in subparagraph (B)) shall be deemed to be a clean claim and shall be paid by the PDP sponsor in accordance with subparagraph (A).
`(iv) DATE OF PAYMENT OF CLAIM- Payment of a clean claim under subparagraph (A) is considered to have been made on the date on which full payment is received by the provider.
`(E) ELECTRONIC TRANSFER OF FUNDS- A PDP sponsor shall pay all clean claims submitted electronically by an electronic funds transfer mechanism.'.
(b) Application to MA-PD Plans- Section 1857(f) of such Act (
`(3) INCORPORATION OF CERTAIN PRESCRIPTION DRUG PLAN CONTRACT REQUIREMENTS- The provisions of section 1860D-12(b)(4) shall apply to contracts with a Medicare Advantage organization in the same manner as they apply to contracts with a PDP sponsor offering a prescription drug plan under part D.'.
(c) Effective Date- The amendments made by this section shall apply to contracts entered into or renewed on or after the date of the enactment of this Act.
SEC. 308. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS FOR CERTAIN CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.
Section 416(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2282;
SEC. 309. EXTENSION OF TEMPORARY MEDICARE PAYMENT INCREASE FOR HOME HEALTH SERVICES FURNISHED IN A RURAL AREA.
(a) In General- Section 421 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2283;
(1) in the heading, by striking `one-year' and inserting `temporary'; and
(2) in subsection (a) by striking `before April 1, 2005, and episodes and visits beginning on or after January 1, 2006, and before January 1, 2007' and inserting `before December 31, 2012'.
(b) Application to Certain Home Health Services Furnished Prior to Date of Enactment- For episodes and visits for home health services furnished on or after January 1, 2007, and before the date of the enactment of this Act, the Secretary of Health and Human Services shall provide for a lump sum payment, not later than 60 days after such enactment, of amounts due under the amendment made by subsection (a)(2).
(c) Effective Date- The amendments made by subsection (a) shall apply to episodes and visits on or after April 1, 2005.
TITLE IV--OTHER PROVISIONS
SEC. 401. HEALTH INFORMATION TECHNOLOGY GRANTS FOR RURAL HEALTH CARE PROVIDERS.
Title II of the Public Health Service Act is amended by adding at the end the following new part:
`PART D--HEALTH INFORMATION TECHNOLOGY GRANTS
`SEC. 271. GRANTS TO FACILITATE THE WIDESPREAD ADOPTION OF INTEROPERABLE HEALTH INFORMATION TECHNOLOGY IN RURAL AREAS.
`(a) Competitive Grants to Eligible Entities in Rural Areas-
`(1) IN GENERAL- The Secretary may award competitive grants to eligible entities in rural areas to facilitate the purchase and enhance the utilization of qualified health information technology systems to improve the quality and efficiency of health care.
`(2) ELIGIBILITY- To be eligible to receive a grant under paragraph (1) an entity shall--
`(A) submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require;
`(B) submit to the Secretary a strategic plan for the implementation of data sharing and interoperability measures;
`(C) be a rural health care provider;
`(D) adopt any applicable core interoperability guidelines (endorsed under other provisions of law);
`(E) agree to notify patients if their individually identifiable health information is wrongfully disclosed;
`(F) demonstrate significant financial need; and
`(G) provide matching funds in accordance with paragraph (4).
`(3) USE OF FUNDS- Amounts received under a grant under this subsection shall be used to facilitate the purchase and enhance the utilization of qualified health information technology systems and training personnel in the use of such technology.
`(4) MATCHING REQUIREMENT- To be eligible for a grant under this subsection an entity shall contribute non-Federal contributions to the costs of carrying out the activities for which the grant is awarded in an amount equal to $1 for each $3 of Federal funds provided under the grant.
`(5) LIMIT ON GRANT AMOUNT- In no case shall the payment amount under this subsection with respect to the purchase or enhanced utilization of qualified health information technology for a rural health care provider, in addition to the amount of any loan made to the provider from a grant to a State under subsection (b) for such purpose, exceed 100 percent of the provider's costs for such purchase or enhanced utilization (taking into account costs for training, implementation, and maintenance).
`(6) PREFERENCE IN AWARDING GRANTS- In awarding grants to eligible entities under this subsection, the Secretary shall give preference to each of the following types of applicants:
`(A) An entity that is located in a frontier or other rural underserved area as determined by the Secretary.
`(B) An entity that will link, to the extent practicable, the qualified health information system to a local or regional health information plan or plans.
`(C) A rural health care provider that is a nonprofit hospital or a Federally qualified health center.
`(D) A rural health care provider that is an individual practice or group practice.
`(b) Authorization of Appropriations-
`(1) IN GENERAL- For the purpose of carrying out this section, there is authorized to be appropriated $20,000,000 for fiscal year 2008, $30,000,000 for fiscal year 2009, and such sums as may be necessary, but not to exceed $30,000,000 for each of fiscal years 2010 through 2012.
`(2) AVAILABILITY- Amounts appropriated under paragraph (1) shall remain available through fiscal year 2011.
`(c) Definitions- In this section:
`(1) FEDERALLY QUALIFIED HEALTH CENTER- The term `Federally qualified health center' has the meaning given that term in section 1861(aa)(4) of the Social Security Act (
`(2) GROUP PRACTICE- The term `group practice' has the meaning given that term in section 1877(h)(4) of the Social Security Act (
`(3) HEALTH CARE PROVIDER- The term `health care provider' means a hospital, skilled nursing facility, home health agency (as defined in subsection (o) of section 1861 of the Social Security Act,
`(4) HEALTH INFORMATION; INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION- The terms `health information' and `individually identifiable health information' have the meanings given those terms in paragraphs (4) and (6), respectively, of section 1171 of the Social Security Act (
`(5) LABORATORY- The term `laboratory' has the meaning given that term in section 353.
`(6) PHARMACIST- The term `pharmacist' has the meaning given that term in section 804(a)(2) of the Federal Food, Drug, and Cosmetic Act (
`(7) QUALIFIED HEALTH INFORMATION TECHNOLOGY- The term `qualified health information technology' means a system or components of health information technology that meet any applicable core interoperability guidelines (endorsed under applicable provisions of law) when in use or that use interface software that allows for interoperability in accordance with such guidelines.
`(8) RURAL AREA- The term `rural area' has the meaning given such term for purposes of section 1886(d)(2)(D) of the Social Security Act (
`(9) RURAL HEALTH CARE PROVIDER- The term `rural health care provider' means a health care provider that is located in a rural area.
`(10) STATE- The term `State' means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.'.
SEC. 402. RURAL HEALTH QUALITY ADVISORY COMMISSION AND DEMONSTRATION PROJECTS.
(a) Rural Health Quality Advisory Commission-
(1) ESTABLISHMENT- Not later than 6 months after the date of the enactment of this section, the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall establish a commission to be known as the Rural Health Quality Advisory Commission (in this section referred to as the `Commission').
(2) DUTIES OF COMMISSION-
(A) NATIONAL PLAN- The Commission shall develop, coordinate, and facilitate implementation of a national plan for rural health quality improvement. The national plan shall--
(i) identify objectives for rural health quality improvement;
(ii) identify strategies to eliminate known gaps in rural health system capacity and improve rural health quality; and
(iii) provide for Federal programs to identify opportunities for strengthening and aligning policies and programs to improve rural health quality.
(B) DEMONSTRATION PROJECTS- The Commission shall design demonstration projects to test alternative models for rural health quality improvement, including with respect to both personal and population health.
(C) MONITORING- The Commission shall monitor progress toward the objectives identified pursuant to paragraph (1)(A).
(3) MEMBERSHIP-
(A) NUMBER- The Commission shall be composed of 11 members appointed by the Secretary.
(B) SELECTION- The Secretary shall select the members of the Commission from among individuals with significant rural health care and health care quality expertise, including expertise in clinical health care, health care quality research, population or public health, or purchaser organizations.
(4) CONTRACTING AUTHORITY- Subject to the availability of funds, the Commission may enter into contracts and make other arrangements, as may be necessary to carry out the duties described in paragraph (2).
(5) STAFF- Upon the request of the Commission, the Secretary may detail, on a reimbursable basis, any of the personnel of the Office of Rural Health Policy of the Health Resources and Services Administration, the Agency for Health Care Quality and Research, or the Centers for Medicare & Medicaid Services to the Commission to assist in carrying out this subsection.
(6) REPORTS TO CONGRESS- Not later than 1 year after the establishment of the Commission, and annually thereafter, the Commission shall submit a report to the Congress on rural health quality. Each such report shall include the following:
(A) An inventory of relevant programs and recommendations for improved coordination and integration of policy and programs.
(B) An assessment of achievement of the objectives identified in the national plan developed under paragraph (2) and recommendations for realizing such objectives.
(C) Recommendations on Federal legislation, regulations, or administrative policies to enhance rural health quality and outcomes.
(b) Rural Health Quality Demonstration Projects-
(1) IN GENERAL- Not later than 270 days after the date of the enactment of this section, the Secretary, in consultation with the Rural Health Quality Advisory Commission, the Office of Rural Health Policy of the Health Resources and Services Administration, the Agency for Healthcare Research and Quality, and the Centers for Medicare & Medicaid Services, shall make grants to eligible entities for 5 demonstration projects to implement and evaluate methods for improving the quality of health care in rural communities. Each such demonstration project shall include--
(A) alternative community models that--
(i) will achieve greater integration of personal and population health services; and
(ii) address safety, effectiveness, patient- or community-centeredness, timeliness, efficiency, and equity (the six aims identified by the Institute of Medicine of the National Academies in its report entitled `Crossing the Quality Chasm: A New Health System for the 21st Century' released on March 1, 2001);
(B) innovative approaches to the financing and delivery of health services to achieve rural health quality goals; and
(C) development of quality improvement support structures to assist rural health systems and professionals (such as workforce support structures, quality monitoring and reporting, clinical care protocols, and information technology applications).
(2) ELIGIBLE ENTITIES- In this subsection, the term `eligible entity' means a consortium that--
(A) shall include--
(i) at least one health care provider or health care delivery system located in a rural area; and
(ii) at least one organization representing multiple community stakeholders; and
(B) may include other partners such as rural research centers.
(3) CONSULTATION- In developing the program for awarding grants under this subsection, the Secretary shall consult with the Administrator of the Agency for Healthcare Research and Quality, rural health care providers, rural health care researchers, and private and non-profit groups (including national associations) which are undertaking similar efforts.
(4) EXPEDITED WAIVERS- The Secretary shall expedite the processing of any waiver that--
(A) is authorized under title XVIII or XIX of the Social Security Act (
(B) is necessary to carry out a demonstration project under this subsection.
(5) DEMONSTRATION PROJECT SITES- The Secretary shall ensure that the 5 demonstration projects funded under this subsection are conducted at a variety of sites representing the diversity of rural communities in the Nation.
(6) DURATION- Each demonstration project under this subsection shall be for a period of 4 years.
(7) INDEPENDENT EVALUATION- The Secretary shall enter into an arrangement with an entity that has experience working directly with rural health systems for the conduct of an independent evaluation of the program carried out under this subsection.
(8) REPORT- Not later than one year after the conclusion of all of the demonstration projects funded under this subsection, the Secretary shall submit a report to the Congress on the results of such projects. The report shall include--
(A) an evaluation of patient access to care, patient outcomes, and an analysis of the cost effectiveness of each such project; and
(B) recommendations on Federal legislation, regulations, or administrative policies to enhance rural health quality and outcomes.
(c) Appropriation-
(1) IN GENERAL- Out of funds in the Treasury not otherwise appropriated, there are appropriated to the Secretary to carry out this section $30,000,000 for the period of fiscal years 2008 through 2012.
(2) AVAILABILITY-
(A) IN GENERAL- Funds appropriated under paragraph (1) shall remain available for expenditure through fiscal year 2012.
(B) REPORT- For purposes of carrying out subsection (b)(8), funds appropriated under paragraph (1) shall remain available for expenditure through fiscal year 2013.
(3) RESERVATION- Of the amount appropriated under paragraph (1), the Secretary shall reserve--
(A) $5,000,000 to carry out subsection (a); and
(B) $25,000,000 to carry out subsection (b), of which--
(i) 2 percent shall be for the provision of technical assistance to grant recipients; and
(ii) 5 percent shall be for independent evaluation under subsection (b)(7).
SEC. 403. RURAL HEALTH CARE SERVICES.
Section 330A of the Public Health Service Act (
`SEC. 330A. RURAL HEALTH CARE SERVICES OUTREACH, RURAL HEALTH NETWORK DEVELOPMENT, DELTA RURAL DISPARITIES AND HEALTH SYSTEMS DEVELOPMENT, AND SMALL RURAL HEALTH CARE PROVIDER QUALITY IMPROVEMENT GRANT PROGRAMS.
`(a) Purpose- The purpose of this section is to provide for grants--
`(1) under subsection (b), to promote rural health care services outreach;
`(2) under subsection (c), to provide for the planning and implementation of integrated health care networks in rural areas;
`(3) under subsection (d), to assist rural communities in the Delta Region to reduce health disparities and to promote and enhance health system development; and
`(4) under subsection (e), to provide for the planning and implementation of small rural health care provider quality improvement activities.
`(b) Rural Health Care Services Outreach Grants-
`(1) GRANTS- The Director of the Office of Rural Health Policy of the Health Resources and Services Administration may award grants to eligible entities to promote rural health care services outreach by expanding the delivery of health care services to include new and enhanced services in rural areas. The Director may award the grants for periods of not more than 3 years.
`(2) ELIGIBILITY- To be eligible to receive a grant under this subsection for a project, an entity--
`(A) shall be a rural public or rural nonprofit private entity, a facility that qualifies as a rural health clinic under title XVIII of the Social Security Act, a public or nonprofit entity existing exclusively to provide services to migrant and seasonal farm workers in rural areas, or a tribal government whose grant-funded activities will be conducted within federally recognized tribal areas;
`(B) shall represent a consortium composed of members--
`(i) that include 3 or more independently-owned health care entities; and
`(ii) that may be nonprofit or for-profit entities; and
`(C) shall not previously have received a grant under this subsection for the same or a similar project, unless the entity is proposing to expand the scope of the project or the area that will be served through the project.
`(3) APPLICATIONS- To be eligible to receive a grant under this subsection, an eligible entity shall prepare and submit to the Director an application at such time, in such manner, and containing such information as the Director may require, including--
`(A) a description of the project that the eligible entity will carry out using the funds provided under the grant;
`(B) a description of the manner in which the project funded under the grant will meet the health care needs of rural populations in the local community or region to be served;
`(C) a plan for quantifying how health care needs will be met through identification of the target population and benchmarks of service delivery or health status, such as--
`(i) quantifiable measurements of health status improvement for projects focusing on health promotion; or
`(ii) benchmarks of increased access to primary care, including tracking factors such as the number and type of primary care visits, identification of a medical home, or other general measures of such access;
`(D) a description of how the local community or region to be served will be involved in the development and ongoing operations of the project;
`(E) a plan for sustaining the project after Federal support for the project has ended;
`(F) a description of how the project will be evaluated;
`(G) the administrative capacity to submit annual performance data electronically as specified by the Director; and
`(H) other such information as the Director determines to be appropriate.
`(c) Rural Health Network Development Grants-
`(1) GRANTS-
`(A) IN GENERAL- The Director may award rural health network development grants to eligible entities to promote, through planning and implementation, the development of integrated health care networks that have combined the functions of the entities participating in the networks in order to--
`(i) achieve efficiencies and economies of scale;
`(ii) expand access to, coordinate, and improve the quality of the health care delivery system through development of organizational efficiencies;
`(iii) implement health information technology to achieve efficiencies, reduce medical errors, and improve quality;
`(iv) coordinate care and manage chronic illness; and
`(v) strengthen the rural health care system as a whole in such a manner as to show a quantifiable return on investment to the participants in the network.
`(B) GRANT PERIODS- The Director may award such a rural health network development grant--
`(i) for a period of 3 years for implementation activities; or
`(ii) for a period of 1 year for planning activities to assist in the initial development of an integrated health care network, if the proposed participants in the network do not have a history of collaborative efforts and a 3-year grant would be inappropriate.
`(2) ELIGIBILITY- To be eligible to receive a grant under this subsection, an entity--
`(A) shall be a rural public or rural nonprofit private entity, a facility that qualifies as a rural health clinic under title XVIII of the Social Security Act, a public or nonprofit entity existing exclusively to provide services to migrant and seasonal farm workers in rural areas, or a tribal government whose grant-funded activities will be conducted within federally recognized tribal areas;
`(B) shall represent a network composed of participants--
`(i) that include 3 or more independently-owned health care entities; and
`(ii) that may be nonprofit or for-profit entities; and
`(C) shall not previously have received a grant under this subsection (other than a 1-year grant for planning activities) for the same or a similar project.
`(3) APPLICATIONS- To be eligible to receive a grant under this subsection, an eligible entity, in consultation with the appropriate State office of rural health or another appropriate State entity, shall prepare and submit to the Director an application at such time, in such manner, and containing such information as the Director may require, including--
`(A) a description of the project that the eligible entity will carry out using the funds provided under the grant;
`(B) an explanation of the reasons why Federal assistance is required to carry out the project;
`(C) a description of--
`(i) the history of collaborative activities carried out by the participants in the network;
`(ii) the degree to which the participants are ready to integrate their functions; and
`(iii) how the local community or region to be served will benefit from and be involved in the activities carried out by the network;
`(D) a description of how the local community or region to be served will experience increased access to quality health care services across the continuum of care as a result of the integration activities carried out by the network, including a description of--
`(i) return on investment for the community and the network members; and
`(ii) other quantifiable performance measures that show the benefit of the network activities;
`(E) a plan for sustaining the project after Federal support for the project has ended;
`(F) a description of how the project will be evaluated;
`(G) the administrative capacity to submit annual performance data electronically as specified by the Director; and
`(H) other such information as the Director determines to be appropriate.
`(d) Delta Rural Disparities and Health Systems Development Grants-
`(1) GRANTS- The Director may award grants to eligible entities to support reduction of health disparities, improve access to health care, and enhance rural health system development in the Delta Region.
`(2) ELIGIBILITY- To be eligible to receive a grant under this subsection, an entity shall be a rural public or rural nonprofit private entity, a facility that qualifies as a rural health clinic under title XVIII of the Social Security Act, a public or nonprofit entity existing exclusively to provide services to migrant and seasonal farm workers in rural areas, or a tribal government whose grant-funded activities will be conducted within federally recognized tribal areas.
`(3) APPLICATIONS- To be eligible to receive a grant under this subsection, an eligible entity shall prepare and submit to the Director an application at such time, in such manner, and containing such information as the Director may require, including--
`(A) a description of the project that the eligible entity will carry out using the funds provided under the grant;
`(B) an explanation of the reasons why Federal assistance is required to carry out the project;
`(C) a description of the manner in which the project funded under the grant will meet the health care needs of the Delta Region;
`(D) a description of how the local community or region to be served will experience increased access to quality health care services as a result of the activities carried out by the entity;
`(E) a description of how health disparities will be reduced or the health system will be improved;
`(F) a plan for sustaining the project after Federal support for the project has ended;
`(G) a description of how the project will be evaluated including process and outcome measures related to the quality of care provided or how the health care system improves its performance;
`(H) a description of how the grantee will develop an advisory group made up of representatives of the communities to be served to provide guidance to the grantee to best meet community need; and
`(I) other such information as the Director determines to be appropriate.
`(e) Small Rural Health Care Provider Quality Improvement Grants-
`(1) GRANTS- The Director may award grants to provide for the planning and implementation of small rural health care provider quality improvement activities. The Director may award the grants for periods of 1 to 3 years.
`(2) ELIGIBILITY- To be eligible for a grant under this subsection, an entity--
`(A) shall be--
`(i) a rural public or rural nonprofit private health care provider or provider of health care services, such as a rural health clinic; or
`(ii) another rural provider or network of small rural providers identified by the Director as a key source of local care; and
`(B) shall not previously have received a grant under this subsection for the same or a similar project.
`(3) PREFERENCE- In awarding grants under this subsection, the Director shall give preference to facilities that qualify as rural health clinics under title XVIII of the Social Security Act.
`(4) APPLICATIONS- To be eligible to receive a grant under this subsection, an eligible entity shall prepare and submit to the Director an application at such time, in such manner, and containing such information as the Director may require, including--
`(A) a description of the project that the eligible entity will carry out using the funds provided under the grant;
`(B) an explanation of the reasons why Federal assistance is required to carry out the project;
`(C) a description of the manner in which the project funded under the grant will assure continuous quality improvement in the provision of services by the entity;
`(D) a description of how the local community or region to be served will experience increased access to quality health care services as a result of the activities carried out by the entity;
`(E) a plan for sustaining the project after Federal support for the project has ended;
`(F) a description of how the project will be evaluated including process and outcome measures related to the quality of care provided; and
`(G) other such information as the Director determines to be appropriate.
`(f) General Requirements-
`(1) PROHIBITED USES OF FUNDS- An entity that receives a grant under this section may not use funds provided through the grant--
`(A) to build or acquire real property; or
`(B) for construction.
`(2) COORDINATION WITH OTHER AGENCIES- The Director shall coordinate activities carried out under grant programs described in this section, to the extent practicable, with Federal and State agencies and nonprofit organizations that are operating similar grant programs, to maximize the effect of public dollars in funding meritorious proposals.
`(g) Report- Not later than September 30, 2010, the Secretary shall prepare and submit to the appropriate committees of Congress a report on the progress and accomplishments of the grant programs described in subsections (b), (c), (d), and (e).
`(h) Definitions- In this section:
`(1) The term `Delta Region' has the meaning given to the term `region' in section 382A of the Consolidated Farm and Rural Development Act (
`(2) The term `Director' means the Director of the Office of Rural Health Policy of the Health Resources and Services Administration.
`(i) Authorization of Appropriations- There are authorized to be appropriated to carry out this section $40,000,000 for fiscal year 2008, and such sums as may be necessary for each of fiscal years 2009 through 2012.'.
SEC. 404. COMMUNITY HEALTH CENTER COLLABORATIVE ACCESS EXPANSION.
Section 330 of the Public Health Service Act (
`(s) Miscellaneous Provisions-
`(1) RULE OF CONSTRUCTION WITH RESPECT TO RURAL HEALTH CLINICS-
`(A) IN GENERAL- Nothing in this section shall be construed to prevent a community health center from contracting with a federally certified rural health clinic (as defined by section 1861(aa)(2) of the Social Security Act) for the delivery of primary health care services that are available at the rural health clinic to individuals who would otherwise be eligible for free or reduced cost care if that individual were able to obtain that care at the community health center. Such services may be limited in scope to those primary health care services available in that rural health clinic.
`(B) ASSURANCES- In order for a rural health clinic to receive funds under this section through a contract with a community health center under paragraph (1), such rural health clinic shall establish policies to ensure--
`(i) nondiscrimination based upon the ability of a patient to pay; and
`(ii) the establishment of a sliding fee scale for low-income patients.'.
SEC. 405. FACILITATING THE PROVISION OF TELEHEALTH SERVICES ACROSS STATE LINES.
(a) In General- For purposes of expediting the provision of telehealth services, for which payment is made under the Medicare program, across State lines, the Secretary of Health and Human Services shall, in consultation with representatives of States, physicians, health care practitioners, and patient advocates, encourage and facilitate the adoption of provisions allowing for multistate practitioner practice across State lines.
(b) Definitions- In subsection (a):
(1) TELEHEALTH SERVICE- The term `telehealth service' has the meaning given that term in subparagraph (F) of section 1834(m)(4) of the Social Security Act (
(2) PHYSICIAN, PRACTITIONER- The terms `physician' and `practitioner' have the meaning given those terms in subparagraphs (D) and (E), respectively, of such section.
(3) MEDICARE PROGRAM- The term `Medicare program' means the program of health insurance administered by the Secretary of Health and Human Services under title XVIII of the Social Security Act (
SEC. 406. EXPANDED APPLICATION OF THE 340B PROGRAM TO DRUGS PROVIDED IN RURAL HOSPITALS.
(a) Expanded Participation in 340B Program to Certain Rural Hospitals- Section 340B(a)(4) of the Public Health Service Act (
`(M) An entity that is a critical access hospital (as determined under section 1820(c)(2) of the Social Security Act (
`(N) An entity that is a Medicare-dependent, small rural hospital (as defined in section 1886(d)(5)(G)(iv) of the Social Security Act).
`(O) An entity that is a sole community hospital (as defined in section 1886(d)(5)(D)(iii) of the Social Security Act).
`(P) An entity that is classified as a rural referral center under section 1886(d)(5)(C) of the Social Security Act.'.
(b) Extension of Discounts to Inpatient Drugs-
(1) IN GENERAL- Section 340B of the Public Health Service Act (
(A) in subsection (b)--
(i) by designating the matter beginning `In this section' as a paragraph (1) with the heading `IN GENERAL' ; and
(ii) by adding at the end the following new paragraph:
`(2) COVERED DRUG- In this section, the term `covered drug'--
`(A) means a covered outpatient drug (as defined in section 1927(k)(2) of the Social Security Act); and
`(B) includes, notwithstanding the section 1927(k)(3)(A) of such Act, a drug used in connection with an inpatient or outpatient service provided by a hospital described in subparagraph (M), (N), (O), or (P) of subsection (a)(4) that is enrolled to participate in the drug discount program under this section.'; and
(B) in paragraphs (5), (7), and (9), by striking `outpatient' each place it appears.
(2) MEDICAID CREDITS ON INPATIENT DRUGS- Subsection (c) of section 340B of the Public Health Service Act (
`(c) Medicaid Credits on Inpatient Drugs-
`(1) IN GENERAL- For the cost reporting period covered by the most recently filed Medicare cost report under title XVIII of the Social Security Act, a hospital described in subparagraph (M), (N), (O), or (P) of subsection (a)(4) and enrolled to participate in the drug discount program under this section shall provide to each State under its plan under title XIX of such Act --
`(A) a credit on the estimated annual costs to such hospital of single source and innovator multiple source drugs provided to Medicaid recipients for inpatient use; and
`(B) a credit on the estimated annual costs to such hospital of noninnovator multiple source drugs provided to Medicaid recipients for inpatient use.
`(2) CALCULATION OF CREDITS-
`(A) SINGLE SOURCE AND INNOVATOR MULTIPLE SOURCE DRUGS- For purposes of paragraph (1)(A)--
`(i) the credit under such paragraph shall be equal to the product of--
`(I) the estimated annual costs of single source and innovator multiple source drugs provided by the hospital to Medicaid recipients for inpatient use;
`(II) the average manufacturer price adjustment; and
`(III) the minimum rebate percentage described in section 1927(c)(1)(B) of the Social Security Act;
`(ii) the estimated annual costs of single source drugs and innovator multiple source drugs provided by the hospital to Medicaid recipients for inpatient use under clause (i)(I) shall be equal to the product of--
`(I) the hospital's actual acquisition costs of all drugs purchased during the cost reporting period for inpatient use;
`(II) the Medicaid inpatient drug charges as reported on the hospital's most recently filed Medicare cost report divided by total inpatient drug charges reported on the cost report; and
`(III) the percent of the hospital's annual inpatient drug costs described in subclause (I) arising out of the purchase of single source and innovator multiple source drugs;
`(iii) the average manufacturer price adjustment referenced in clause (i)(II) shall be determined annually by the Secretary for single source and innovator multiple source drugs by dividing on an aggregate basis the average manufacturer price as defined in section 1927(k)(1)(D) of the Social Security Act, averaged across all covered drugs reported to the Secretary pursuant to section 1927(b)(3) of such Act by the average 340B ceiling price for covered drugs calculated pursuant to subsection (a)(1); and
`(iv) the terms `single source drug' and `innovator multiple source drug' have the meanings given such terms in section 1927(k)(7) of the Social Security Act.
`(B) NONINNOVATOR MULTIPLE SOURCE DRUGS- For purposes of subparagraph (1)(B)--
`(i) the credit under such paragraph shall be calculated by multiplying--
`(I) the estimated annual costs to the hospital of noninnovator multiple source drugs provided to Medicaid recipients for inpatient use,
`(II) the average manufacturer price adjustment, and
`(III) the applicable percentage as defined in section 1927(c)(3)(B) of the Social Security Act;
`(ii) the estimated annual costs to a hospital of noninnovator multiple source drugs provided to Medicaid recipients for inpatient use under clause (i)(I) shall be equal to the product of--
`(I) the hospital's actual acquisition cost of all drugs purchased during the cost reporting period for inpatient use;
`(II) the Medicaid inpatient drug charges as reported on the hospital's most recently filed Medicare cost report divided by total inpatient drug charges reported on the cost report;
`(III) the percent of the hospital's annual inpatient drug costs described in subclause (I) arising out of the purchase of noninnovator multiple source drugs;
`(iii) the average manufacturer price adjustment referenced in clause (i)(II) shall be determined annually by the Secretary for noninnovator multiple source drugs by dividing on an aggregate basis the average manufacturer price as defined in Section 1927(k)(1)(D) of the Social Security Act, averaged across all covered drugs reported to the Secretary pursuant to Section 1927(b)(3) of such Act by the average 340B ceiling price for covered drugs calculated pursuant to section 340B(a)(1) of the Public Health Service Act; and
`(iv) the term `noninnovator multiple source drug' has the meaning given such term in section 1927(k)(7) of the Social Security Act.
`(3) PAYMENT DEADLINE- The credits provided by a hospital under paragraph (1) shall be paid within 90 days of the filing of the hospital's most recently filed Medicare cost report.
`(4) OPT OUT- A hospital shall not be required to provide the Medicaid credit required under paragraph (1) if--
`(A) it can demonstrate to the State that the amount of the credit would not exceed the loss of reimbursement under the State plan resulting from the extension of discounts to inpatient drugs under subsection (b)(2); or
`(B) the hospital and State agree to an alternative arrangement.
Any dispute between the hospital and the State under this paragraph shall be adjudicated through the administrative dispute resolution process under this section.
`(5) OFFSET AGAINST MEDICAL ASSISTANCE- Amounts received by a State under this subsection in any quarter shall be considered to be a reduction in the amount expended under the State plan in the quarter for medical assistance for purposes of section 1903(a)(1) of the Social Security Act.
`(6) REFERENCES TO SOCIAL SECURITY ACT PROVISIONS- Notwithstanding any other provision of law, all references to provisions of the Social Security Act in this section shall be deemed to be references to the Social Security Act as in effect on the effective date specified in section 406(c)(1) of the Health Care Access and Rural Equity (H-CARE) Act of 2007.'.
(3) CONFORMING AMENDMENTS- Section 1927 of the Social Security Act (
(A) in subsection (a)(5)(A), by striking `covered outpatient drugs' and inserting `covered drugs (as defined in section 340B(b)(2) of the Public Health Service Act)';
(B) in subsection (a)(5)(D), by striking `title VI of the Veterans Health Care Act of 1992' and inserting the `Health Care Access and Rural Equity (H-CARE) Act of 2007';
(C) in subsection (c)(1)(C)(i), by redesignating subclauses (II) through (IV) as subclauses (III) through (V), respectively and by inserting after subclause (I) the following new subclause:
`(II) any prices charged for a covered drug as defined in section 340B(b)(2) of the Public Health Service Act;'; and
(D) in subsection (k)(1)--
(i) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraph (B) and (D)'; and
(ii) by adding at the end the following new subparagraph:
`(D) CALCULATION FOR COVERED DRUGS- With respect to a covered drug (as defined in section 340B(b)(2) of the Public Health Service Act), the average manufacturer price is the average price paid to the manufacturer for the drug in the United States by wholesalers for drugs distributed to both the retail pharmacy and acute care classes of trade, after deducting customary prompt pay discounts.'.
(c) Effective Dates-
(1) IN GENERAL- The amendments made by this section shall take effect on January 1, 2008, and shall apply to drugs purchased on or after January 1, 2008.
(2) GENERAL CONFORMING REFERENCE- Section 340B(d) of the Public Health Service Act (
(3) EFFECTIVENESS- The amendments made by this section shall be effective, and shall be taken into account in determining whether a manufacturer is deemed to meet the requirements of section 340B(a) of the Public Health Service Act (
