HR 1344 IH

106th CONGRESS

1st Session

H. R. 1344

To promote and improve access to health care services in rural areas.

IN THE HOUSE OF REPRESENTATIVES

March 25, 1999

Mr. NUSSLE (for himself, Mr. MCINTYRE, Mrs. EMERSON, Mr. STENHOLM, Mr. BEREUTER, Mr. KIND, Mr. MORAN of Kansas, Mr. OBERSTAR, Mr. THORNBERRY, Mr. STUPAK, Mr. HILL of Montana, Mr. DEFAZIO, Mr. PETERSON of Pennsylvania, Mr. HILLIARD, Mr. BERRY, Mr. HERGER, Mr. LEACH, Mr. LATHAM, Mr. MCHUGH, Mr. NEY, Mr. NORWOOD, Mr. MASCARA, Mr. WALSH, Mr. FROST, Mr. BOSWELL, Mr. SKELTON, Mr. BAIRD, Mr. FALEOMAVAEGA, Mr. PHELPS, Mr. BARRETT of Nebraska, Mr. BOUCHER, and Mr. RAHALL) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To promote and improve access to health care services in rural areas.

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 `Triple-A Rural Health Improvement Act of 1999'.

(b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

TITLE I--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE MEDICARE PROGRAM

Subtitle A--Hospital-Related Payment Provisions

Sec. 101. Establishing payment floor for medicare hospital outpatient prospective payment system.

Sec. 102. Repeal of restriction on medicare payment for certain hospital discharges to post-acute care.

Sec. 103. Sole community hospitals.

Sec. 104. Critical access hospitals.

Sec. 105. Graduate medical education technical amendments.

Sec. 106. Medicare-dependent, small rural hospitals.

Sec. 107. Geographic reclassification for purposes of DSH payments.

Sec. 108. Revision of guidelines for geographic reclassification by wage index.

Sec. 109. Hospital geographic reclassification for labor costs for all items and services reimbursed under prospective payment systems.

Subtitle B--Medicare+Choice

Sec. 111. Payments to Medicare+Choice organizations.

Sec. 112. Repeal of phase out of medicare reasonable cost reimbursement contracts.

Sec. 113. Medicare+Choice rural demonstration project.

Subtitle C--General Payment Provisions

Sec. 121. Direct medicare payment for physician assistants, nurse practitioners, and clinical nurse specialists practicing in underserved rural areas.

Sec. 122. Coverage of qualified mental health professional services under medicare.

Sec. 123. Medicare waivers for providers in rural areas.

Sec. 124. Safe harbor under the anti-kickback statute for hospital restocking of certain ambulance drugs and supplies.

TITLE II--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE MEDICAID PROGRAM

Sec. 201. Continuation of pre-BBA medicaid reimbursement rules for federally qualified health centers and rural health clinics.

Sec. 202. Medicaid coverage of physicians' assistants.

TITLE III--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE INTERNAL REVENUE CODE

Sec. 301. Exclusion of certain amounts received under the National Health Service Corps Scholarship Program.

Sec. 302. Issuance of tax-exempt bonds by organizations providing rescue and emergency medical services.

Sec. 303. Bank deductibility of small, tax-exempt debts.

TITLE IV--ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF HEALTH PROFESSIONALS IN RURAL AREAS

Sec. 401. Requirement for rural impact Statements for health care regulations.

Sec. 402. Health professional shortage areas.

Sec. 403. Access to data.

Sec. 404. Designation of underserved areas under health care contracts administered by the Office of Personnel Management.

Sec. 405. Revision of methodology for designation of health professional shortage areas.

Sec. 406. Sense of Congress regarding the reserve corps of the commissioned corps of the public health service.

TITLE V--TELEMEDICINE

Subtitle A--Improvements to the Medicare Program

Sec. 501. Improvement of telehealth services.

Sec. 502. Joint working group on telehealth.

Subtitle B--Development of Telehealth Networks

Sec. 511. Development.

Sec. 512. Administration.

Sec. 513. Guidelines.

Sec. 514. Authorization of appropriations.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Rural communities have long had great difficulty recruiting and retaining health care providers to serve the needs of their residents.

(2) Despite great increases in the production of providers in this country (the number of individuals per physician fell from 724 in 1965 to 375 in 1995), individuals living in rural areas have not shared equitably in the benefits of this expansion.

(3) Over 51,000,000 Americans live in rural areas, making up approximately 20 percent of the population. Further, 22,000,000 rural Americans live in a federally designated Health Professional Shortage Area.

(4) The following conditions are characteristic of rural populations:

(A) The relative lack of health care resources as compared to urban areas.

(B) The uneven pattern of disease burden.

(5) Of the non-metropolitan counties in the United States, 20 percent are considered frontier counties, with six or fewer people per square mile. Seven million Americans live in frontier areas.

TITLE I--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE MEDICARE PROGRAM

Subtitle A--Hospital-Related Payment Provisions

SEC. 101. ESTABLISHING PAYMENT FLOOR FOR MEDICARE HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM.

(a) IN GENERAL- Section 1833(t)(1) of the Social Security Act (42 U.S.C. 1395l(t)(1)) is amended--

(1) in subparagraph (B), by striking `For purposes of this' and inserting `Subject to subparagraph (C), for purposes of this'; and

(2) by adding at the end the following new subparagraph:

`(C) EXCLUSION FOR SERVICES FURNISHED BY SMALL RURAL PROVIDERS- Such term does not include services furnished by any of the following:

`(i) A medicare-dependent, small rural hospital, as defined in section 1886(d)(5)(G)(iv).

`(ii) A critical access hospital, as defined in section 1861(mm)(1).

`(iii) A sole community hospital, as defined in section 1886(d)(5)(D)(iii).'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to payment for covered OPD services furnished on or after January 1, 2000.

SEC. 102. REPEAL OF RESTRICTION ON MEDICARE PAYMENT FOR CERTAIN HOSPITAL DISCHARGES TO POST-ACUTE CARE.

(a) IN GENERAL- Section 1886(d)(5) of the Social Security Act (42 U.S.C. 1395ww(d)(5)) is amended--

(1) in subparagraph (I)(ii), by striking `not taking in account the effect of subparagraph (J),', and

(2) by striking subparagraph (J).

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to discharges occurring on or after January 1, 2000.

SEC. 103. SOLE COMMUNITY HOSPITALS.

(a) IN GENERAL- Section 1886(b)(3)(C) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(C)) is amended--

(1) in clause (i), by redesignating subclauses (I) and (II) as items (aa) and (bb), respectively;

(2) by redesignating clauses (i), (ii), (iii), and (iv) as subclauses (I), (II), (III), and (IV), respectively;

(3) by striking `(C) In' and inserting `(C)(i) Subject to clause (ii), in'; and

(4) by striking the last sentence and inserting the following new clause:

`(ii)(I) There shall be substituted for the base cost reporting period described in clause (i)(I) a hospital's cost reporting period (if any) beginning during fiscal year 1987 if such substitution results in an increase in the target amount for the hospital.

`(II) Beginning with discharges occurring in cost reporting periods beginning in fiscal year 2000, there shall be substituted for the base cost reporting period described in clause (i)(I) either--

`(aa) the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this title for the hospital's cost reporting period (if any) beginning during fiscal year 1995 increased (in a compounded manner) by the applicable percentage increases applied to the hospital under this paragraph for discharges occurring in fiscal years 1996, 1997, 1998, and 1999, or

`(bb) the allowable operating costs of inpatient hospital services (as defined in subsection (a)(4)) recognized under this title for the hospital's cost reporting period (if any) beginning during fiscal year 1996 increased (in a compounded manner) by the applicable percentage increases applied to the hospital under this paragraph for discharges occurring in fiscal years 1997, 1998, and 1999,

if such substitution results in an increase in the target amount for the hospital.'.

(b) ELIGIBILITY FOR GEOGRAPHIC RECLASSIFICATION WITHOUT REGARD TO WAGE INDEX THRESHOLD-

(1) IN GENERAL- Section 1886(d)(10)(D)(iii) of such Act (42 U.S.C. 1395ww(d)(10)(D)(iii)) is amended by inserting `or a sole community hospital under paragraph (5)(D)' after `a rural referral center under paragraph (5)(C)'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect on January 1, 2000, and apply with respect to applications submitted for geographic reclassification for cost reporting periods beginning on or after such date.

SEC. 104. CRITICAL ACCESS HOSPITALS.

(a) CONVERSION OF RECENTLY CLOSED HOSPITALS TO CRITICAL ACCESS HOSPITALS-

(1) IN GENERAL- Section 1820(c)(2) of the Social Security Act (42 U.S.C. 1395i-4(c)(2)) is amended by adding at the end the following new subparagraph:

`(C) RECENTLY CLOSED FACILITIES- A State may designate a facility as a critical access hospital if the facility--

`(i) within the 3-year period ending on the date of enactment of this subparagraph--

`(I) ceased operations; or

`(II) was a nonprofit or public hospital that was downsized to a clinic; and

`(ii) would, after being designated as a critical access hospital, meet the requirements of subparagraph (B).'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect on the date of enactment of this Act.

(b) ALL-INCLUSIVE PAYMENT OPTION FOR OUTPATIENT CRITICAL ACCESS HOSPITAL SERVICES-

(1) IN GENERAL- Section 1834(g) of the Social Security Act (42 U.S.C. 1395m(g)) is amended to read as follows:

`(g) PAYMENT FOR OUTPATIENT CRITICAL ACCESS HOSPITAL SERVICES- The amount of payment under this part for outpatient critical access hospital services is the amount determined under one of the two following methods, as elected by the critical access hospital:

`(1) REASONABLE COSTS- There shall be paid amounts equal to the reasonable costs of the critical access hospital in providing such services.

`(2) ALL-INCLUSIVE RATE- With respect to both facility services and professional medical services, there shall be paid amounts equal to the costs which are reasonable and related to the cost of furnishing such services or which are based on such other tests of reasonableness as the Secretary may prescribe in regulations, less the amount the hospital may charge as described in clause (i) of section 1866(a)(2)(A), but in no case may the payment for such services (other than for items and services described in section 1861(s)(10)(A)) exceed 80 percent of such costs.

The amount of payment shall be determined under either method without regard to the amount of the customary or other charge.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect as if included in the enactment of the Balanced Budget Act of 1997.

(1) IN GENERAL- Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is amended--

(A) by striking `and' at the end of paragraph (26);

(B) by redesignating paragraph (27) as paragraph (28); and

`(27) services furnished by a critical access hospital (as defined section 1861(mm)(1); and'.

(2) EFFECTIVE DATE- The amendments made by paragraph (1) apply with respect to items and services furnished on or after January 1, 2000.

(d) ACCREDITATION- The last sentence of section 1861(e) of such Act (42 U.S.C. 1395x(e)) is amended to read as follows:

`The term `hospital' does not include a critical access hospital (as defined in section 1861(mm)(1)), unless the context otherwise requires, or unless a critical access hospital applies for accreditation by the Joint Commission on Accreditation of Hospitals.'.

SEC. 105. GRADUATE MEDICAL EDUCATION TECHNICAL AMENDMENTS.

(a) INDIRECT GRADUATE MEDICAL EDUCATION ADJUSTMENT-

(1) IN GENERAL- Section 1886(d)(5)(B)(v) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)) is amended to read as follows:

`(v)(I) In determining the adjustment with respect to a hospital that sponsors more than one allopathic or osteopathic residency training program for discharges occurring on or after October 1, 1997, the total number of full-time equivalent interns and residents in the fields of allopathic and osteopathic medicine in either a hospital or nonhospital setting may not exceed the number of such full-time equivalent interns and residents who participated, or who but for an approved leave would have participated, in the hospital's approved medical residency training programs for the hospital's most recent cost reporting period ending on or before December 31, 1996.

`(II) In determining the adjustment with respect to a hospital that sponsors only one allopathic or osteopathic residency program for discharges occurring on or after October 1, 1997, the total number of full-time equivalent interns and residents in the fields of allopathic and osteopathic medicine who participated, or who but for an approved leave would have participated, in the hospital's medical residency training program may be increased by not more than one for any calendar year, and may not exceed a total of three more than the number appointed in either a hospital or nonhospital setting for the hospital's most recent cost reporting period ending on or before December 31, 1996.'.

(2) TECHNICAL AMENDMENTS- Section 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by moving clauses (ii) and (vi) two ems to the left.

(b) DIRECT GRADUATE MEDICAL EDUCATION ADJUSTMENT-

(1) LIMITATION ON NUMBER OF RESIDENTS- Section 1886(h)(4)(F) of the Social Security Act (42 U.S.C. 1395ww(h)(4)(F)) is amended by inserting `who participated, or who but for an approved leave would have participated, in the hospital's medical residency training programs' after `may not exceed the number of such full-time equivalent residents'.

(2) FUNDING-

(A) NEW PROGRAMS- The first sentence of section 1886(h)(4)(H)(i) of such Act (42 U.S.C. 1935ww(h)(4)(H)(i)) is amended by inserting `and before September 30, 1999' after `January 1, 1995'.

(B) PROGRAMS MEETING RURAL NEEDS- The second sentence of such section is amended by striking the period at the end and inserting `, including facilities that are not located in an underserved rural area but have established separately accredited approved medical residency training programs in such an area.'.

(c) EFFECTIVE DATE- The amendments made by this section shall take effect as if included in the enactment of the Balanced Budget Act of 1997.

SEC. 106. MEDICARE-DEPENDENT SMALL RURAL HOSPITALS.

(a) REDUCTION IN ELIGIBILITY DISCHARGE PERCENTAGE- Section 1886(d)(5)(G)(iv)(IV) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by striking `60' and inserting `50'.

(b) REBASING FOR DISCHARGES DURING THE MOST CURRENT AUDITED FISCAL YEAR- Section 1886(b)(3)(D) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D) is amended--

(1) in the second sentence, by striking `beginning during fiscal year 1987' and inserting `ending during fiscal year 1998'; and

(2) by adding at the end the following new sentence: `An increase in the target amount by reason of the previous sentence shall have no effect on the classification of a hospital as a medicare-dependent, small rural hospital.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to discharges occurring on or after October 1, 1999.

SEC. 107. GEOGRAPHIC RECLASSIFICATION FOR PURPOSES OF DSH PAYMENTS.

(a) IN GENERAL- Section 1886(d)(10)(C)(i) of the Social Security Act (42 U.S.C. 1395ww(d)(10)(C)(i)) is amended--

(1) by striking `or' at the end of subclause (I);

(2) by striking the period at the end of subclause (II) and inserting `, or'; and

(3) by adding at the end the following new subclause:

`(III) eligibility for and amount of additional payments under paragraph (5)(F).

In the case of a hospital with an application approved under subclause (I) to change the hospital's geographic classification for a fiscal year, such change in the hospital's geographic classification for that fiscal year shall apply to such hospital for purposes of subclause (III).'.

(b) APPLICABLE GUIDELINES- Section 1886(d)(10)(D) of such Act (42 U.S.C. 1395ww(d)(10)(D)) is amended--

(1) in clause (i), by adding at the end the following new subclause:

`(V) Guidelines for considering applications under subparagraph (C)(i)(III) of determining eligibility for and amount of additional payments under paragraph (5)(F).';

(2) by redesignating clause (iv) as clause (v);

(3) by inserting after clause (iii) the following new clause:

`(iv) Under the guidelines published by the Secretary under clause (i)(V), the Board shall not reject an application to change a hospital's geographic classification under subparagraph (C)(i)(I) because the change in the hospital's geographic classification for that fiscal year does not result in an increase in the average standardized amount for that hospital.'; and

(4) in clause (v), as so redesignated by paragraph (2)--

(A) by inserting `(I)' after `(v)';

(B) by striking `The' and inserting `Except as provided in subclause (II), the'; and

`(II) The Secretary shall publish the guidelines described in subclause (V) of clause (i) by January 1, 2000.'.

(c) EFFECTIVE DATE- The amendments made by subsection (a) take effect on January 1, 2000, and apply with respect to applications for geographic reclassification submitted for cost reporting periods beginning on or after such date.

SEC. 108. REVISION OF GUIDELINES FOR GEOGRAPHIC RECLASSIFICATION BY WAGE INDEX.

(a) AVERAGE HOURLY WAGE WEIGHTED FOR OCCUPATIONAL MIX- Section 1886(d)(10)(D)(i)(I) of the Social Security Act (42 U.S.C. 1395ww(d)(10)(D)(i)(I)) is amended to read as follows:

`(I) Guidelines for comparing a hospital's average hourly wage to the average hourly wage of hospitals in the area in which the hospital is classified, guidelines for comparing a hospital's average hourly wage to the average hourly wage of hospitals in the area in which the hospital is applying to be classified, and guidelines for comparing a hospital's average hourly wage adjusted by the occupational mix of the area in which the hospital is applying to be classified to the average hourly wage of hospitals in such area.'.

(b) DATA COLLECTION REQUIREMENT- Section 1886(d)(10)(D) of such Act (42 U.S.C. 1395ww(d)(10)(D)), as amended by section 107(b), is further amended--

(1) by redesignating clause (v) as clause (vi);

(2) by inserting after clause (iv) the following new clause:

`(v) For purposes of considering an application under subparagraph (C)(i)(II), the Secretary shall collect and update every three years such information as is necessary to compare a hospital's wages weighted by the occupational mix of hospitals in the area in which the hospital is applying to be classified, or the Board shall, in considering such an application, apply the most current available information with respect to such wages collected by the American Hospital Association.'; and

(3) in clause (vi), as so redesignated by paragraph (1), by inserting `subclause (I), as amended by the Triple-A Rural Health Improvement Act of 1999, and' before `subclause (III) of clause (i) by January 1, 2000.'.

(c) EFFECTIVE DATE- The amendments made by subsections (a) and (b) take effect on January 1, 2000, and apply with respect to applications for geographic reclassification for cost reporting periods beginning on or after such date.

(d) REPORT TO CONGRESS- Not later than one year after the date of the enactment of this Act, the Secretary shall submit to Congress a report describing revised methodology to compute hospital wage indices, for purposes of adjustments in payment amounts to hospitals under the medicare program, that reflect legitimate differences in hospital wage rates by area, but that do not rely on average per employee expenditures.

(e) SENSE OF CONGRESS- It is the Sense of the Congress that the adjustment in payment amounts to hospitals under the medicare program to reflect variations in the costs of wages and wage-related costs of hospitals, under section 1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), should only be used with respect to payments made on a prospective basis to such hospitals for inpatient hospital services. Such adjustment should not be applied to payment amounts for any other item or service reimbursed under the medicare program.

SEC. 109. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS FOR ALL ITEMS AND SERVICES REIMBURSED UNDER PROSPECTIVE PAYMENT SYSTEMS.

(a) IN GENERAL- Section 1886 of the Social Security Act (42 U.S.C. 1395ww) is amended by adding at the end the following new subsection:

`(l) APPLICATION OF HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR INPATIENT SERVICES TO ALL HOSPITAL FURNISHED ITEMS AND SERVICES REIMBURSED UNDER PROSPECTIVE PAYMENT SYSTEM-

`(1) IN GENERAL- In the case of a hospital with an application to the Medicare Geographic Classification Review Board under subsection (d)(10)(C) to change the hospital's geographic classification for a fiscal year for purposes of the factor used to adjust the DRG prospective payment rate for area differences in hospital wage levels that applies to such hospital under subsection (d)(3)(E) that has been approved, the change in the hospital's geographic classification for such purposes shall apply for purposes of adjustments to payments for variations in costs which are attributable to wages and wage-related costs for all pps-reimbursed items and services.

`(2) PPS-REIMBURSED ITEMS AND SERVICES DEFINED- For purposes of paragraph (1), the term `pps-reimbursed items and services' means, for cost reporting periods beginning during the fiscal year for which such change has been approved, items and services furnished by the hospital, or by an entity or department of the hospital which is provider-based (as determined by the Secretary), for which payments--

`(A) are made under this title on a prospective basis; and

`(B) are adjusted for variations in costs which are attributable to wages and wage-related costs.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to items and services furnished on or after January 1, 2000.

Subtitle B--Medicare+Choice

SEC. 111. PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS.

(a) ADJUSTMENT TO CALCULATION OF ANNUAL CAPITATION RATES- Section 1853(c) of the Social Security Act (42 U.S.C. 1395w-23(c)) is amended--

(1) in paragraph (1)--

(A) in subparagraph (A), by striking the comma at the end of clause (ii) and all that follows before the period; and

(B) in subparagraph (C)(ii), by inserting `multiplied by the budget neutrality adjustment factor determined under paragraph (5)' before the period at the end; and

(2) in paragraph (5), by striking `paragraph (1)(A)' and inserting `paragraph (1)(C)(ii)'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to rates calculated for years after 1999.

SEC. 112. REPEAL OF PHASE OUT OF CERTAIN MEDICARE REASONABLE COST REIMBURSEMENT CONTRACTS.

Section 1876(h)(5) of the Social Security Act (42 U.S.C. 1395mm(h)(5)) is amended--

(1) by striking `(5)(A)' and inserting `(5)'; and

(2) by striking subparagraph (B).

SEC. 113. MEDICARE+CHOICE RURAL DEMONSTRATION PROJECT.

(a) ESTABLISHMENT OF PROJECT- For purposes of expanding and improving the quality of items and services furnished under the medicare program to medicare beneficiaries residing in rural and frontier areas, the Secretary of Health and Human Services (in this section referred to as the `Secretary') shall conduct demonstration projects under which the Secretary shall establish, and provide for payment for such items and services to, provider-sponsored organizations and other managed care entities that are based in rural and frontier areas.

(b) REQUIREMENT OF RURAL AND FRONTIER AREAS- The Secretary shall designate areas in which projects under this section shall be conducted. Such projects may only be conducted in rural or frontier areas, as defined under title XVIII of the Social Security Act and under regulations promulgated thereunder.

(1) IN GENERAL- The Secretary shall establish a benefit design, and establish payment amounts for items and services furnished by such provider-sponsored organizations and managed care entities to medicare beneficiaries.

(2) DATA COLLECTION- The Secretary shall provide for the collection of information (including information concerning quality and access to care), for purposes of evaluating the results of the project.

(d) REPORT TO CONGRESS-

(1) IN GENERAL- Not later than two years after the Secretary implements the demonstration projects under this section, and annually thereafter, the Secretary shall submit to Congress a report regarding such demonstration projects.

(2) CONTENTS OF REPORT- The report in paragraph (1) shall include the following:

(A) A description of the demonstration projects conducted under this section.

(B) An evaluation of--

(i) the viability of such provider-sponsored organizations and managed care entities operating in rural and frontier areas;

(ii) the quality of the health care services provided to medicare beneficiaries residing in such areas under the demonstration projects; and

(iii) beneficiary and health care provider satisfaction under the demonstration project.

(C) Any other information regarding the demonstration projects conducted under this section that the Secretary determines to be appropriate.

(e) WAIVER AUTHORITY- The Secretary of Health and Human Services may waive such requirements of title XVIII of the Social Security Act (as amended by this Act) as may be necessary for the purposes of carrying out the project.

Subtitle C--General Payment Provisions

SEC. 121. DIRECT MEDICARE PAYMENT FOR PHYSICIAN ASSISTANTS, NURSE PRACTITIONERS, AND CLINICAL NURSE SPECIALISTS PRACTICING IN UNDERSERVED RURAL AREAS.

(a) IN GENERAL- Section 1833(a)(1)(O) of the Social Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended--

(1) by inserting `(or 100 percent in the case of services furnished in an underserved rural area)' after `85 percent' the first place it appears.

(b) DIRECT REIMBURSEMENT- Section 1842(b)(6)(C) of such Act (42 U.S.C. 1395u(b)(6)(C)) is amended--

(1) by striking `clause (i) of';

(2) by inserting `, nurse practitioner, or clinical nurse specialist' after `physician assistant' the first place it appears; and

(3) by amending clause (ii) to read as follows: `(ii) with respect to a physician assistant, nurse practitioner, or clinical nurse specialist who is providing services in an underserved rural area, payment may be made directly to the assistant, practitioner, or specialist;'.

SEC. 122. COVERAGE OF QUALIFIED MENTAL HEALTH PROFESSIONAL SERVICES UNDER MEDICARE.

(a) IN GENERAL- Section 1861(s)(2) of the Social Security Act (42 U.S.C. 1395x(s)(2)) is amended--

(1) in subparagraph (S), by striking `and' at the end;

(2) in subparagraph (T), by striking the period at the end and inserting `; and'; and

(3) by adding at the end the following new subparagraph:

`(U) qualified mental health professional services (as defined in subsection (uu));'.

(b) PAYMENT RULES-

(1) DETERMINATION OF AMOUNT OF PAYMENT- Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended--

(A) by striking `and' before `(S)'; and

(B) by striking the semicolon at the end and inserting the following: `, and (T) with respect to qualified mental health professional services described in section 1861(s)(2)(U), the amounts paid shall be the amount determined by a fee schedule established by the Secretary for purposes of this subparagraph;'.

(2) SEPARATE PAYMENT FOR SERVICES OF INSTITUTIONAL PROVIDERS- Section 1832(a)(2)(B)(iii) of the Social Security Act (42 U.S.C. 1395k(a)(2)(B)(iii)) is amended--

(A) by striking `and services' and inserting `services'; and

(B) by striking the semicolon at the end and inserting the following: `, and qualified mental health professional services described in section 1861(s)(2)(U);'.

(c) SERVICES DESCRIBED- Section 1861 of the Social Security Act (42 U.S.C. 1395x) is amended by adding at the end the following new subsection:

`Qualified Mental Health Professional Services

`(uu)(1) The term `qualified mental health professional services' means such services (with such frequency limits as the Secretary determines appropriate) furnished by a mental health professional (as defined in paragraph (2)) and such services and supplies (with such limits) furnished as an incident to services furnished by the mental health professional that the mental health professional is legally authorized to perform under State law (or under a State regulatory mechanism provided by State law), if such services and supplies are furnished to an individual who resides in an area designated as a health professional shortage area in accordance with section 332 of the Public Health Service Act (42 U.S.C. 254e).

`(2) The term `mental health professional' means an individual who is licensed as a mental health professional for the diagnosis and treatment of mental illnesses by the State (or under a State regulatory mechanism provided by State law) in which the individual furnishes qualified mental health professional services.'.

(d) EFFECTIVE DATE- The amendments made by this section apply to services furnished on or after January 1, 2000.

SEC. 123. MEDICARE WAIVERS FOR PROVIDERS IN RURAL AREAS.

Notwithstanding section 1886(d)(2)(D) of the Social Security Act (42 U.S.C. 1395ww(d)(2)(D)), by not later than 180 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall establish a waiver process under which entities and individuals under the medicare program that are determined by the Office of Management and Budget to be located in an urban or large urban area for purposes of reimbursement under such program may apply to the Secretary to be considered to be located in a rural area for such purposes if such entity or individual is located--

(1) in a rural area, as defined by the Goldsmith Modification as published in the Federal Register on February 27, 1992;

(2) outside of an urbanized area, as defined by the United States Census Bureau; or

(3) an area designated by a State as a rural area.

SEC. 124. SAFE HARBOR UNDER THE ANTI-KICKBACK STATUTE FOR HOSPITAL RESTOCKING OF CERTAIN AMBULANCE DRUGS AND SUPPLIES.

(a) IN GENERAL- Section 1128B(b)(3) of the Social Security Act (42 U.S.C. 1320a-7b(b)(3)) is amended--

(1) by striking `and' at the end of subparagraph (E);

(2) by striking the period at the end of subparagraph (F) and inserting `; and'; and

(3) by adding at the end the following new subparagraph:

`(G) any remuneration from a hospital to an ambulance provider if--

`(i) the ambulance provider is owned or operated (I) by a State or local government agency or (II) by an organization that is described in paragraph (3) or (4) of section 501(c) of the Internal Revenue Code of 1986 and that is exempt from taxation under section 501(a) of such Code;

`(ii) the remuneration is in the form of the replenishment of drugs or supplies, or both, used by the ambulance provider during the transport of a patient to the hospital; and

`(iii) the remuneration is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or part under a Federal health care program.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to remuneration provided on or after the date of the enactment of this Act.

TITLE II--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE MEDICAID PROGRAM

SEC. 201. CONTINUATION OF PRE-BBA MEDICAID REIMBURSEMENT RULES FOR FEDERALLY QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.

(a) ELIMINATION OF PHASE-OUT OF PAYMENT BASED ON REASONABLE COST- Section 1902(a)(13)(C) of the Social Security Act (42 U.S.C. 1396a(a)(13)(C)) is amended by striking `(or 95 percent' and all that follows through `70 percent for services furnished during fiscal year 2003)'.

(b) ELIMINATION OF TRANSITIONAL SUPPLEMENTAL PAYMENT FOR SERVICES FURNISHED UNDER CERTAIN MANAGED CARE CONTRACTS-

(1) IN GENERAL- Section 1902(a)(13)(C) of such Act (42 U.S.C. 1396a(a)(13)(C)) is further amended--

(A) by striking `(C)(i)' and inserting `(C); and

(B) by striking `and (ii)' and all that follows up to the semicolon at the end.

(2) CONFORMING AMENDMENT TO MANAGED CARE CONTRACT REQUIREMENT- Clause (ix) of section 1903(m)(2)(A) of such Act (42 U.S.C. 1396b(m)(2)(A)) is amended to read as follows:

`(ix) such contract provides, in the case of an entity that has entered into a contract for the provision of services with a Federally-qualified health center or a rural health clinic, that (I) rates of prepayment from the State are adjusted to reflect fully the rates of payment specified in section 1902(a)(13)(C), and (II) at the election of such center or clinic, payments made by the entity to such center or clinic for services described in section 1905(a)(2)(C) are made at the rates of payment specified in section 1902(a)(13)(C);'.

(3) ELIMINATION OF REPEAL- Section 4712(c) of the Balanced Budget Act of 1997 is repealed and the provisions of the Social Security Act shall be implemented as through such section had never been enacted.

(d) EFFECTIVE DATE- The amendments made by subsections (a) and (b) apply to services furnished on or after January 1, 2000.

SEC. 202. MEDICAID COVERAGE OF PHYSICIANS' ASSISTANTS.

(a) IN GENERAL- Section 1905(a)(5)(A) of the Social Security Act (42 U.S.C. 1396d(a)(5)(A)) is amended by inserting `and services which would be physicians' services if furnished by such a physician and which are performed by a physician assistant or a nurse practitioner (as defined in section 1861(aa)(5)(A)) under the supervision of a physician (as so defined) and which the physician assistant or the nurse practitioner is legally authorized to perform by the State in which the services are performed' after `section 1861(r)(1))'.

(b) EFFECTIVE DATE- (1) Except as provided in paragraph (2), the amendment made by subsection (a) shall apply to services furnished on or after January 1, 2000, without regard to whether or not final regulations to carry out such amendment have been promulgated by such date.

(2) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendment made by subsection (a), the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

TITLE III--PROMOTING ACCESS TO HEALTH CARE SERVICES IN RURAL AREAS UNDER THE INTERNAL REVENUE CODE

SEC. 301. EXCLUSION OF CERTAIN AMOUNTS RECEIVED UNDER THE NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP PROGRAM.

(a) IN GENERAL- Subsection (c) of section 117 of the Internal Revenue Code of 1986 (relating to the exclusion from gross income amounts received as a qualified scholarship) is amended--

(1) by striking `Subsections (a)' and inserting the following:

`(1) IN GENERAL- Subject to paragraph (2), subsections (a)'; and

(2) by adding at the end the following:

`(2) NATIONAL HEALTH CORPS SCHOLARSHIP PROGRAM- Paragraph (1) shall not apply to any amount received by an individual under the National Health Corps Scholarship Program under section 338A(g)(1)(A) of the Public Health Service Act.'

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to amounts received in taxable years beginning after December 31, 1999.

SEC. 302. ISSUANCE OF TAX-EXEMPT BONDS BY ORGANIZATIONS PROVIDING RESCUE AND EMERGENCY MEDICAL SERVICES.

(a) GENERAL RULE- Subsection (e) of section 150 of the Internal Revenue Code of 1986 is amended to read as follows:

`(e) BONDS OF CERTAIN VOLUNTEER FIRE DEPARTMENTS OR EMERGENCY SERVICE ORGANIZATIONS- For purposes of this part and section 103--

`(1) IN GENERAL- A bond of a volunteer fire or other emergency services organization shall be treated as a bond of a political subdivision of a State if--

`(A) such organization is a qualified volunteer fire or other emergency services organization with respect to an area within the jurisdiction of such political subdivision, and

`(B) such bond is issued as part of an issue 95 percent or more of the net proceeds of which are to be used for the acquisition, construction, reconstruction, or improvement of--

`(i) a firehouse or other building used or to be used by such organization in providing qualified services (including land which is functionally related and subordinate thereto), or

`(ii) a firetruck, ambulance, or other vehicle used or to be used by such organization in providing qualified services.

`(2) QUALIFIED VOLUNTEER FIRE OR OTHER EMERGENCY SERVICES ORGANIZATION- For purposes of this subsection, the term `qualified volunteer fire or other emergency services organization' means, with respect to a political subdivision of a State, any organization--

`(A) which is organized and operated to provide qualified services for persons in an area (within the jurisdiction of such political subdivision) which is not provided with any other qualified services of the type provided by such organization, and

`(B) which is required (by written agreement) by the political subdivision to furnish qualified services in such area.

For purposes of subparagraph (A), other qualified services provided in an area shall be disregarded in determining whether an organization is a qualified volunteer fire or other emergency services organization if such other qualified services are provided by a qualified volunteer fire or other emergency services organization (determined with the application of this sentence) and such organization and the provider of such other services have been continuously providing qualified services to such area since January 1, 1997.

`(3) TREATMENT AS PRIVATE ACTIVITY BONDS ONLY FOR CERTAIN PURPOSES- Bonds which are part of an issue which meets the requirements of paragraph (1) shall not be treated as private activity bonds except for purposes of sections 147(f) and 149(d).

`(4) QUALIFIED SERVICES- For purposes of this subsection, the term `qualified services' means any firefighting, rescue, or emergency medical services.'

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to obligations issued on or after January 1, 2000.

SEC. 303. BANK DEDUCTIBILITY OF SMALL, TAX-EXEMPT DEBTS.

(a) IN GENERAL- Section 265(b)(3) of the Internal Revenue Code of 1986 (relating to exception for certain tax-exempt obligations) is amended by adding at the end the following:

`(G) ELECTION TO APPLY LIMITATION ON AMOUNT OF OBLIGATIONS AT BORROWER LEVEL-

`(i) IN GENERAL- An issuer, the proceeds of the obligations of which are to be used to make or finance eligible loans, may elect to apply subparagraphs (C) and (D) by treating each borrower as the issuer of a separate issue.

`(ii) ELIGIBLE LOAN- For purposes of this subparagraph--

`(I) IN GENERAL- The term `eligible loan' means one or more loans to a qualified borrower the proceeds of which are used by the borrower for health care or educational purposes and the outstanding balance of which in the aggregate does not exceed $5,000,000.

`(II) QUALIFIED BORROWER- The term `qualified borrower' means a borrower which is an organization described in section 501(c)(3) and exempt from taxation under section 501(a).

`(iii) MANNER OF ELECTION- The election described in clause (i) may be made by an issuer for any calendar year at any time prior to its first issuance during such year of obligations the proceeds of which will be used to make or finance one or more eligible loans.

`(iv) MODIFICATION OF RULE FOR COMPOSITE ISSUES- In the case of an obligation which is issued by any issuer which has made the election described in clause (i), subparagraph (F) shall be applied without regard to clause (i) of such subparagraph.'

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1999.

TITLE IV--ADDITIONAL PROVISIONS TO ADDRESS SHORTAGES OF HEALTH PROFESSIONALS IN RURAL AREAS

SEC. 401. REQUIREMENT FOR RURAL IMPACT STATEMENTS FOR HEALTH CARE REGULATIONS.

(a) IN GENERAL- Whenever the Secretary of Health and Human Services promulgates a regulation (or proposed regulation) relating to a health care program, including the medicare or medicaid programs, the Secretary shall include with the promulgation of the regulation an analysis of the likely impact of the implementation of the regulation on rural areas, including its impact on--

(1) rural safety net providers;

(2) rural primary care providers;

(3) rural hospitals;

(4) Federally qualified health centers and rural health clinics;

(5) the economies in rural areas; and

(6) rural residents.

(b) EFFECTIVE DATE- Subsection (a) shall apply to regulations promulgated on or after the date of the enactment of this Act.

SEC. 402. HEALTH PROFESSIONAL SHORTAGE AREAS.

(a) EFFECTIVE DATE- Section 332 of the Public Health Service Act (42 U.S.C. 254e) is amended--

(1) in subsection (a)(1)(A), by inserting after `services)' the following: `, or a frontier area (an area that has six or fewer residents per square mile),'; and

(2) by adding at the end of subsection (c), the following new paragraph:

`(3) Any pending retirements or resignations of physicians available within the area involved. In implementing this paragraph, the Secretary shall waive the requirements of this section with respect to the number of physicians serving the area for the 12-month period beginning on the date on which the area was designated as a health professional shortage area.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect on the date of enactment of this Act.

SEC. 403. ACCESS TO DATA.

(a) REQUIREMENT- The heads of the agencies described in subsection (b) shall negotiate and enter into interagency agreements with agencies and offices of the Department of Health and Human Services under which such agencies and offices will be provided access to data sets for intramural and extramural research conducted or supported by such agencies or offices.

(b) AGENCY HEADS- The agencies described in this section are the following:

(1) The National Health Service Corps.

(2) The Centers for Disease Control and Prevention.

(3) The Agency for Health Care Policy and Research.

(4) The Bureau of the Census.

(c) INFORMATION- The information that is to be made available under interagency agreements under this section shall include all information that is necessary for scholarly and policy research. Such information shall be made available in a manner that includes a description of the geographic area or location of the individuals who are the subject of such information.

(d) AVAILABILITY- Information that is subject to an interagency agreement under this section shall be made available to bona fide researchers as determined appropriate by the Secretary of Health and Human Services.

(e) CONFIDENTIALITY- Each interagency agreement entered into under this section shall contain provisions that protect the confidentiality of the individuals who are the subjects of such information.

SEC. 404. DESIGNATION OF UNDERSERVED AREAS UNDER HEALTH CARE CONTRACTS ADMINISTERED BY THE OFFICE OF PERSONNEL MANAGEMENT.

Section 8902(m)(2)(A) of title 5, United States Code, is amended by striking `a State where 25 percent' and all that follows through the period and inserting `an area designated as a health professional shortage area by the Department of Health and Human Services in accordance with section 332 of the Public Health Service Act (42 U.S.C. 254e).'.

SEC. 405. REVISION OF METHODOLOGY FOR DESIGNATION OF HEALTH PROFESSIONAL SHORTAGE AREAS.

(a) REVISION OF METHODOLOGY-

(1) IN GENERAL- The Secretary of Health and Human Services shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter III of chapter 5 of title 5, United States Code, revised standards for the designation of a health professional shortage area under section 332(a)(1) of the Public Health Service Act (42 U.S.C. 254e(a)(1)).

(2) CONSIDERATIONS- In developing standards under subsection (a), the Secretary shall--

(A) promote the needs of medically underserved populations (as defined in section 330(b)(3) of the Public Health Service Act (42 U.S.C. 254c(b)(3))) and the needs of individuals residing in health professional shortage areas located in rural, frontier, and urban areas; and

(B) consider the percentage of population over the age of 65 years residing in such health professional shortage areas.

(b) DEVELOPMENT OF DEFINITION OF FRONTIER- For purposes of subsection (a) and for purposes of payment under title XVIII of the Social Security Act, the Secretary of Health and Human Services shall, by regulation, define the term `frontier'. Such definition shall take into account population density and distance in miles, and time in minutes, to the nearest medical facility.

SEC. 406. SENSE OF CONGRESS REGARDING THE RESERVE CORPS OF THE COMMISSIONED CORPS OF THE PUBLIC HEALTH SERVICE.

(a) FINDINGS- Congress makes the following findings:

(1) Improving the Reserve Corps of the Commissioned Corps of the Public Health Service would significantly enhance access to quality health care in rural areas.

(2) Use of inactive members of the Reserve Corps to fill vacancies in staffing of health care providers under the Public Health Service Act is an effective and cost efficient manner of providing increased and improved health care services in rural areas and to Public Health Service agencies.

(3) The use of inactive members of the Reserve Corps to fill such vacancies is impeded because of an inability to identify such members.

(4) Better overall management of the Reserve Corps may save several million dollars annually.

(b) SENSE OF CONGRESS- It is the sense on Congress that the Secretary of Health and Human Services should establish within the Public Health Service of the Department of Health and Human Services an Office of Reserve Corps Coordination for the Commissioned Corps of the Public Health Service. Such Office should oversee the management of the Reserve Corps and take such steps as are necessary, including using inactive members to fill temporary vacancies in staffing of health care providers under the Public Health Service Act, to efficiently utilize the Reserve Corps to increase and improve health care services furnished in rural areas.

TITLE V--TELEMEDICINE

Subtitle A--Improvements to the Medicare Program

SEC. 501. IMPROVEMENT OF TELEHEALTH SERVICES.

(a) MEDICARE COVERAGE OF TELEHEALTH SERVICES-

(1) ALL SERVICES FURNISHED UNDER MEDICARE- Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended by striking `furnishing a service for which payment may be made under such part' and inserting `furnishing a service for which payment may be made under such title'.

(2) PHYSICAL, OCCUPATIONAL, AND SPEECH THERAPY- Subsections (a) and (d)(1) of section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) are each amended by adding at the end the following new sentence: `For purposes of the preceding sentence, the term `practitioner' shall include physical, occupational, and speech therapists.'.

(3) TELEHEALTH CONSULTATION USING STORE AND FORWARD TECHNOLOGY- Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note), as amended by paragraph (2), is further amended by adding at the end the following new sentence: `Payment shall also be made under this section for professional consultations utilizing technology that provides for the asynchronous transmission of health care information, in single or multimedia formats, for the objective of any or all of the following:

(1) Medical diagnosis.

(2) Medical treatment.

(3) Medical education.'.

(b) MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES IN ALL RURAL AREAS- Section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended--

(1) in subsection (a), by striking `that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A))' and inserting `or a county that is not otherwise included in a Metropolitan Statistical Area'; and

(2) in subsection (d), by striking `who does not reside in a rural area (as so defined) that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A))' and inserting `who resides in a county in a rural area (as so defined) or a county that is not otherwise included in a Metropolitan Statistical Area'.

(c) PERMITTING PRESENTATION OF PATIENT BY HEALTH CARE PROVIDERS- Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note), as amended by subsection (a), is further amended--

(1) by inserting `(1)' after `(a) IN GENERAL- '; and

(2) by adding at the end the following new paragraph:

`(2)(A) In the case of telehomecare (as described in subparagraph (D)) a registered nurse, acting under the directions of a physician or practitioner, may present the beneficiary for the professional consultation. In the case of such a presentation the presence of a referring or consulting physician or practitioner is not required.

`(B) Telehomecare may be furnished in areas other than in rural areas.

`(C) In this section, the term `registered nurse' means a registered nurse who is licensed to practice nursing in the State in which the professional consultation is performed and is operating within the scope of such license.

`(D) For purposes of subparagraph (A), telehomecare consists of certain home health services furnished using a electronic device capable of two-way audio and video transmissions, and capable of monitoring and transmitting vital statistics of a patient, including measuring blood pressure and temperature of a patient.'.

(d) REVISION OF PAYMENT METHODOLOGY- Section 4206(b) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended--

(1) by redesignating paragraphs (1), (2), (3), and (4) as subparagraphs (A), (B), (C), and (D), respectively;

(2) by inserting `(1)' before `Taking into account';

(3) in subparagraph (A), as so redesignated, to read as follows:

`(A) The payment shall be made under a fee schedule established by the Secretary that provides for payment for the referring physician or practitioner and for the consulting physician or practitioner. If the referring physician or practitioner determines it appropriate, such referring physician or practitioner may be present during the professional consultation. The amount of the payment to the physicians or practitioners shall not be greater than the current fee schedule of such consulting physician or practitioner for the health care services provided.';

(2) in subparagraph (B), to read as follows:

`(B) The payment shall include payment to a provider of services for the costs associated with professional consultation via telecommunications systems. Such costs shall include facility fees, costs of maintenance of telehealth equipment and of telecommunications facilities, and costs of staff incurred in furnishing such professional consultations. In no case may a beneficiary be billed for any such charges or fees.'; and

(3) by adding at the end the following new paragraphs:

`(2) The Secretary shall permit the imposition of beneficiary cost sharing in the form of a copayment, not to exceed $15 per visit. In the case of any copayment imposed under the preceding sentence, the Secretary shall require the provision of notice to the individual requesting such services prior to the furnishing of such services.

`(3) The Secretary shall establish a separate code (or codes) for purposes of claims for payment for items and services furnished under this section.'.

(e) REPORTS TO CONGRESS- Section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended by adding at the end the following new subsection:

`(e) ADDITIONAL REPORTS TO CONGRESS-

`(1) INITIAL REPORT- Not later than August 1, 2003, the Secretary of Health and Human Services shall prepare and submit to the appropriate committees of Congress a report concerning--

`(A) the number, percentage, and types of health care providers licensed to provide telehealth services across State lines, including the number and types of health care providers licensed to provide such services in more than three States;

`(B) the status of any reciprocal, mutual recognition, fast-track, or other licensure agreements between or among various States;

`(C) the status of any efforts to develop uniform national sets of standards for the licensure of health care providers to provide telehealth services across State lines;

`(D) a projection of future utilization of telehealth consultations across State lines;

`(E) State efforts to increase or reduce licensure as a burden to interstate telehealth practice; and

`(F) any State licensure requirements that appear to constitute unnecessary barriers to the provision of telehealth services across State lines.

`(2) ANNUAL REPORT-

`(A) IN GENERAL- Not later than August 1, 2004, and each July 1 thereafter, the Secretary of Health and Human Services shall prepare and submit to the appropriate committees of Congress, an annual report on relevant developments concerning the matters referred to in subparagraphs (A) through (F) of paragraph (1).

`(B) RECOMMENDATIONS- If, with respect to a report submitted under subparagraph (A), the Secretary of Health and Human Services determines that States are not making progress in facilitating the provision of telehealth services across State lines by eliminating unnecessary requirements, adopting reciprocal licensing arrangements for telehealth services, implementing uniform requirements for telehealth licensure, or other means, the Secretary shall include in the report recommendations concerning the scope and nature of Federal actions required to reduce licensure as a barrier to the interstate provision of telehealth services.

(f) EFFECTIVE DATE- The amendments made by this section shall take effect on the date of enactment of this Act.

SEC. 502. JOINT WORKING GROUP ON TELEHEALTH.

(a) IN GENERAL-

(1) REDESIGNATION- The Joint Working Group on Telemedicine, established by the Secretary of Health and Human Services, shall hereafter be known as the `Joint Working Group on Telehealth' with the chairperson being designated by the Office for the Advancement on Telehealth.

(2) REPRESENTATION OF RURAL AREAS- The Joint Working Group on Telehealth shall ensure

that individuals that represent the interests of rural areas are members of the Group.

(3) MISSION- The mission of the Joint Working Group on Telehealth is--

(A) to identify, monitor, and coordinate Federal telehealth projects, data sets, and programs;

(B) to analyze--

(i) how telehealth systems are expanding access to health care services, education, and information;

(ii) the clinical, educational, or administrative efficacy and cost-effectiveness of telehealth applications; and

(iii) the quality of the telehealth services delivered; and

(C) to make further recommendations for coordinating Federal and State efforts to increase access to health services, education, and information in rural and underserved areas.

(4) ANNUAL REPORTS- Not later than two years after the date of enactment of this Act and each January 1 thereafter the Joint Working Group on Telehealth shall report to Congress on the status of the Group's mission and the state of the telehealth field generally.

(b) REPORT SPECIFICS- The annual report required under subsection (a)(3) shall provide--

(1) an analysis of--

(A) the matters described in subsection (a)(3)(B);

(B) the Federal activities with respect to telehealth; and

(2) recommendations for a coordinated Federal strategy to increase health care access through telehealth.

(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as are necessary for the Joint Working Group on Telehealth to carry out this section.

Subtitle B--Development of Telehealth Networks

SEC. 511. DEVELOPMENT.

(a) IN GENERAL- The Secretary of Health and Human Services (in this subtitle referred to as the `Secretary'), acting through the Director of the Office for the Advancement of Telehealth (of the Health Resources and Services Administration), shall provide financial assistance (as described in subsection (b)(1)) to recipients (as described in subsection (c)(1)) for the purpose of expanding access to health care services for individuals in rural and frontier areas through the use of telehealth.

(b) FINANCIAL ASSISTANCE-

(1) IN GENERAL- Financial assistance shall consist of grants or cost of money loans, or both.

(2) FORM- The Secretary shall determine the portion of the financial assistance provided to a recipient that consists of grants and the portion that consists of cost of money loans so as to result in the maximum feasible repayment to the Federal Government of the financial assistance, based on the ability of the recipient to repay and full utilization of funds made available to carry out this subtitle.

(3) LOAN FORGIVENESS PROGRAM-

(A) ESTABLISHMENT- With respect to cost of money loans provided under this section, the Secretary shall establish a loan forgiveness program under which recipients of such loans may apply to have all or a portion of such loans forgiven.

(B) REQUIREMENTS- A recipient described in subparagraph (A) that desires to have a loan forgiven under the program established under such paragraph shall--

(i) within 180 days of the end of the loan cycle, submit an application to the Secretary requesting forgiveness of the loan involved;

(ii) demonstrate that the recipient has a financial need for such forgiveness;

(iii) demonstrate that the recipient has met the quality and cost-appropriateness criteria developed under subparagraph (C); and

(iv) provide any other information determined appropriate by the Secretary.

(C) CRITERIA- As part of the program established under subparagraph (A), the Secretary shall establish criteria for determining

the cost-effectiveness and quality of programs operated with loans provided under this section.

(1) APPLICATION- To be eligible to receive a grant or loan under this section an entity described in paragraph (2) shall, in consultation with the State office of rural health or other appropriate State entity, prepare and submit to the Secretary an application, at such time, in such manner, and containing such information as the Secretary may require, including--

(A) a description of the anticipated need for the grant or loan;

(B) a description of the activities which the entity intends to carry out using amounts provided under the grant or loan;

(D) a description of the manner in which the activities funded under the grant or loan will meet health care needs of underserved rural populations within the State;

(E) a description of how the local community or region to be served by the network or proposed network will be involved in the development and ongoing operations of the network;

(F) the source and amount of non-Federal funds the entity would pledge for the project; and

(G) a showing of the long-term viability of the project and evidence of health care provider commitment to the network.

The application should demonstrate the manner in which the project will promote the integration of telehealth in the community so as to avoid redundancy of technology and achieve economies of scale.

(2) ELIGIBLE ENTITIES- An entity described in this paragraph is a hospital or other health care provider in a health care network of community-based health care providers that includes at least--

(A) two of the following:

(i) community or migrant health centers;

(ii) local health departments;

(iii) nonprofit hospitals;

(iv) private practice health professionals, including rural health clinics;

(v) other publicly funded health or social services agencies;

(vi) skilled nursing facilities;

(vii) county mental health and other publicly funded mental health facilities; and

(viii) providers of home health services; and

(B) one of the following, which must demonstrate use of the network for purposes of education and economic development (as required by the Secretary):

(i) a public school;

(ii) a public library;

(iii) a university or college;

(iv) a local government entity; or

(v) a local nonhealth-related business entity.

An eligible entity may include for-profit entities so long as the network grantee is a nonprofit entity.

(d) PRIORITY- The Secretary shall establish procedures to prioritize financial assistance under this subtitle considering whether or not the applicant--

(1) is a health care provider in a rural health care network or a health care provider that proposes to form such a network, and the majority of the health care providers in such a network are located

in a medically underserved, health professional shortage area, or mental health professional shortage areas;

(2) can demonstrate broad geographic coverage in the rural areas of the State, or States in which the applicant is located;

(3) proposes to use Federal funds to develop plans for, or to establish, telehealth systems that will link rural hospitals and rural health care providers to other hospitals, health care providers, and patients;

(4) will use the amounts provided for a range of health care applications and to promote greater efficiency in the use of health care resources;

(5) can demonstrate the long-term viability of projects through cost participation (cash or in-kind);

(6) can demonstrate financial, institutional, and community support for the long-term viability of the network; and

(7) can demonstrate a detailed plan for coordinating system use by eligible entities so that health care services are given a priority over non-clinical uses.

(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVIDUAL RECIPIENTS- The Secretary may establish the maximum amount of financial assistance to be made available to an individual recipient for each fiscal year under this subtitle, and establish the term of the loan or grant, by publishing notice of the maximum amount in the Federal Register.

(f) USE OF AMOUNTS-

(1) IN GENERAL- Financial assistance provided under this subtitle shall be used--

(A) with respect to cost of money loans, to encourage the initial development of rural telehealth networks, expand existing networks, or link existing networks together; and

(B) with respect to grants, as described in paragraph (2).

(2) GRANTS AND LOANS- The recipient of a grant or loan under this subtitle may use financial assistance received under such grant or loan for the acquisition of telehealth equipment and modifications or improvements of telecommunications facilities including--

(A) the development and acquisition through lease or purchase of computer hardware and software, audio and video equipment, computer network equipment, interactive equipment, data terminal equipment, and other facilities and equipment that would further the purposes of this section;

(B) the provision of technical assistance and instruction for the development and use of such programming equipment or facilities;

(D) demonstration projects for teaching or training medical students, residents, and other health profession students in rural training sites about the application of telehealth;

(E) transmission costs, maintenance of equipment, and compensation of specialists and referring health care providers;

(F) development of projects to use telehealth to facilitate collaboration between health care providers;

(G) electronic archival of patient records;

(H) collection and analysis of usage statistics and data that can be used to document the cost-effectiveness of the telehealth services; or

(I) such other uses that are consistent with achieving the purposes of this section as approved by the Secretary.

(3) EXPENDITURES IN RURAL AREAS- In awarding a grant or cost of money loan under this section, the Secretary shall ensure that not less than 50 percent of the grant or loan award is expended in a rural area or to provide services to residents of rural areas.

(g) PROHIBITED USES- Financial assistance received under this section may not be used for any of the following:

(1) To build or acquire real property.

(2) In the case of the grant program, expenditures to purchase or lease equipment to the extent the expenditures would exceed more than 40 percent of the total grant funds.

(3) To purchase or install transmission equipment (such as laying cable or telephone lines, microwave towers, satellite dishes, amplifiers, and digital switching equipment).

(4) For construction, except that such funds may be expended for minor renovations relating to the installation of equipment.

(5) Expenditures for indirect costs (as determined by the Secretary) to the extent the expenditures would exceed more than 20 percent of the total grant or loan.

SEC. 512. ADMINISTRATION.

(a) NONDUPLICATION- The Secretary shall ensure that facilities constructed using financial assistance provided under this subtitle do not duplicate adequately established telehealth networks.

(b) LOAN MATURITY- The maturities of cost of money loans shall be determined by the Secretary, based on the useful life of the facility being financed, except that the loan shall not be for a period of more than 10 years.

(c) LOAN SECURITY AND FEASIBILITY- The Secretary shall make a cost of money loan only if the Secretary determines that the security for the loan is reasonably adequate and that the loan will be repaid within the period of the loan.

(d) COORDINATION WITH OTHER AGENCIES- The Secretary shall coordinate, to the extent practicable, with other Federal and State agencies with similar grant or loan programs to pool resources for funding meritorious proposals in rural areas.

(e) INFORMATIONAL EFFORTS- The Secretary shall establish and implement procedures to carry out informational efforts to advise potential end users located in rural areas of each State about the program authorized by this subtitle.

SEC. 513. GUIDELINES.

Not later than 180 days after the date of enactment of this Act, the Secretary shall issue guidelines to carry out this subtitle.

SEC. 514. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to carry out this subtitle, $25,000,000 for fiscal year 2000, and such sums as may be necessary for each of the fiscal years 2001 through 2006.

END