article: TITLE III--RURAL HEALTH CARE IMPROVEMENTS SEC. 301. REFERENCE TO FULL MARKET BASKET INCREASE FOR SOLE COMMUNITY HOSPITALS. For provision eliminating any reduction from full market basket in the update for inpatient hospital services for sole community hospitals, see section 401. SEC. 302. ENHANCED DISPROPORTIONATE SHARE HOSPITAL (DSH) TREATMENT FOR RURAL HOSPITALS AND URBAN HOSPITALS WITH FEWER THAN 100 BEDS. (a) Blending of Payment Amounts.-- (1) In general.--Section 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is amended by adding at the end the following new clause: ``(xiv)(I) In the case of discharges in a fiscal year beginning on or after October 1, 2002, subject to subclause (II), there shall be substituted for the disproportionate share adjustment percentage otherwise determined under clause (iv) (other than subclause (I)) or under clause (viii), (x), (xi), (xii), or (xiii), the old blend proportion (specified under subclause (III)) of the disproportionate share adjustment percentage otherwise determined under the respective clause and 100 percent minus such old blend proportion of the disproportionate share adjustment percentage determined under clause (vii) (relating to large, urban hospitals). ``(II) Under subclause (I), the disproportionate share adjustment percentage shall not exceed 10 percent for a hospital that is not classified as a rural referral center under subparagraph (C). ``(III) For purposes of subclause (I), the old blend proportion for fiscal year 2003 is 80 percent, for each subsequent year (through 2006) is the old blend proportion under this subclause for the previous year minus 20 percentage points, and for each year beginning with 2007 is 0 percent.''. (2) Conforming amendments.--Section 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is amended-- (A) in each of subclauses (II), (III), (IV), (V), and (VI) of clause (iv), by inserting ``subject to clause (xiv) and'' before ``for discharges occurring''; (B) in clause (viii), by striking ``The formula'' and inserting ``Subject to clause (xiv), the formula''; and (C) in each of clauses (x), (xi), (xii), and (xiii), by striking ``For purposes'' and inserting ``Subject to clause (xiv), for purposes''. (b) Effective Date.--The amendments made by this section shall apply with respect to discharges occurring on or after October 1, 2002. SEC. 303. 2-YEAR PHASED-IN INCREASE IN THE STANDARDIZED AMOUNT IN RURAL AND SMALL URBAN AREAS TO ACHIEVE A SINGLE, UNIFORM STANDARDIZED AMOUNT. Section 1886(d)(3)(A)(iv) (42 U.S.C. 1395ww(d)(3)(A)(iv)) is amended-- (1) by striking ``(iv) For discharges'' and inserting ``(iv)(I) Subject to the succeeding provisions of this clause, for discharges''; and (2) by adding at the end the following new subclauses: ``(II) For discharges occurring during fiscal year 2003, the average standardized amount for hospitals located other than in a large urban area shall be increased by \1/2\ of the difference between the average standardized amount determined under subclause (I) for hospitals located in large urban areas for such fiscal year and such amount determined (without regard to this subclause) for other hospitals for such fiscal year. ``(III) For discharges occurring in a fiscal year beginning with fiscal year 2004, the Secretary shall compute an average standardized amount for hospitals located in any area within the United States and within each region equal to the average standardized amount computed for the previous fiscal year under this subparagraph for hospitals located in a large urban area (or, beginning with fiscal year 2005, for hospitals located in any area) increased by the applicable percentage increase under subsection (b)(3)(B)(i).''. SEC. 304. MORE FREQUENT UPDATE IN WEIGHTS USED IN HOSPITAL MARKET BASKET. (a) More Frequent Updates in Weights.--After revising the weights used in the hospital market basket under section 1886(b)(3)(B)(iii) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(iii)) to reflect the most current data available, the Secretary shall establish a frequency for revising such weights in such market basket to reflect the most current data available more frequently than once every 5 years. (b) Report.--Not later than October 1, 2003, the Secretary shall submit a report to Congress on the frequency established under subsection (a), including an explanation of the reasons for, and options considered, in determining such frequency. SEC. 305. IMPROVEMENTS TO CRITICAL ACCESS HOSPITAL PROGRAM. (a) Reinstatement of Periodic Interim Payment (PIP).--Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) is amended-- (1) by striking ``and'' at the end of subparagraph (C); (2) by adding ``and'' at the end of subparagraph (D); and (3) by inserting after subparagraph (D) the following new subparagraph: ``(E) inpatient critical access hospital services;''. (b) Condition for Application of Special Physician Payment Adjustment.--Section 1834(g)(2) (42 U.S.C. 1395m(g)(2)) is amended by adding after and below subparagraph (B) the following: ``The Secretary may not require, as a condition for applying subparagraph (B) with respect to a critical access hospital, that each physician providing professional services in the hospital must assign billing rights with respect to such services, except that such subparagraph shall not apply to those physicians who have not assigned such billing rights.''. (c) Flexibility in Bed Limitation for Hospitals With Strong Seasonal Census Fluctuations.--Section 1820 (42 U.S.C. 1395i-4) is amended-- (1) in subsection (c)(2)(B)(iii), by inserting ``subject to paragraph (3)'' after ``(iii) provides''; (2) by adding at the end of subsection (c) the following new paragraph: ``(3) Increase in maximum number of beds for hospitals with strong seasonal census fluctuations.-- ``(A) In general.--In the case of a hospital that demonstrates that it meets the standards established under subparagraph (B), the bed limitations otherwise applicable under paragraph (2)(B)(iii) and subsection (f) shall be increased by 5 beds. ``(B) Standards.--The Secretary shall specify standards for determining whether a critical access hospital has sufficiently strong seasonal variations in patient admissions to justify the increase in bed limitation provided under subparagraph (A).''; and (3) in subsection (f), by adding at the end the following new sentence: ``The limitations in numbers of beds under the first sentence are subject to adjustment under subsection (c)(3).''. (d) 5-Year Extension of the Authorization for Appropriations for Grant Program.--Section 1820(j) (42 U.S.C. 1395i-4(j)) is amended by striking ``through 2002'' and inserting ``through 2007''. (e) Effective Dates.-- (1) Reinstatement of pip.--The amendments made by subsection (a) shall apply to payments made on or after January 1, 2003. (2) Physician payment adjustment condition.--The amendment made by subsection (b) shall be effective as if included in the enactment of section 403(d) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A- 371). (3) Flexibility in bed limitation.--The amendments made by subsection (c) shall apply to designations made on or after January 1, 2003, but shall not apply to critical access hospitals that were designated as of such date. SEC. 306. EXTENSION OF TEMPORARY INCREASE FOR HOME HEALTH SERVICES FURNISHED IN A RURAL AREA. (a) In General.--Section 508(a) BIPA (114 Stat. 2763A-533) is amended-- (1) by striking ``24-Month Increase Beginning April 1, 2001'' and inserting ``In General''; and (2) by striking ``April 1, 2003'' and inserting ``January 1, 2005''. (b) Conforming Amendment.--Section 547(c)(2) of BIPA (114 Stat. 2763A-553) is amended by striking ``the period beginning on April 1, 2001, and ending on September 30, 2002,'' and inserting ``a period under such section''. SEC. 307. REFERENCE TO 10 PERCENT INCREASE IN PAYMENT FOR HOSPICE CARE FURNISHED IN A FRONTIER AREA AND RURAL HOSPICE DEMONSTRATION PROJECT. For-- (1) provision of 10 percent increase in payment for hospice care furnished in a frontier area, see section 422; and (2) provision of a rural hospice demonstration project, see section 423. SEC. 308. REFERENCE TO PRIORITY FOR HOSPITALS LOCATED IN RURAL OR SMALL URBAN AREAS IN REDISTRIBUTION OF UNUSED GRADUATE MEDICAL EDUCATION RESIDENCIES. For provision providing priority for hospitals located in rural or small urban areas in redistribution of unused graduate medical education residencies, see section 612. SEC. 309. GAO STUDY OF GEOGRAPHIC DIFFERENCES IN PAYMENTS FOR PHYSICIANS' SERVICES. (a) Study.--The Comptroller General of the United States shall conduct a study of differences in payment amounts under the physician fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w-4) for physicians' services in different geographic areas. Such study shall include-- (1) an assessment of the validity of the geographic adjustment factors used for each component of the fee schedule; (2) an evaluation of the measures used for such adjustment, including the frequency of revisions; and (3) an evaluation of the methods used to determine professional liability insurance costs used in computing the malpractice component, including a review of increases in professional liability insurance premiums and variation in such increases by State and physician specialty and methods used to update the geographic cost of practice index and relative weights for the malpractice component. (b) Report.--Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to Congress a report on the study conducted under subsection (a). The report shall include recommendations regarding the use of more current data in computing geographic cost of practice indices as well as the use of data directly representative of physicians' costs (rather than proxy measures of such costs). SEC. 310. PROVIDING SAFE HARBOR FOR CERTAIN COLLABORATIVE EFFORTS THAT BENEFIT MEDICALLY UNDERSERVED POPULATIONS. (a) In General.--Section 1128B(b)(3) (42 U.S.C. 1320a-7(b)(3)) is amended-- (1) in subparagraph (E), by striking ``and'' after the semicolon at the end; (2) in subparagraph (F), by striking the period at the end and inserting ``; and''; and (3) by adding at the end the following new subparagraph: ``(G) any remuneration between a public or nonprofit private health center entity described under clause (i) or (ii) of section 1905(l)(2)(B) and any individual or entity providing goods, items, services, donations or loans, or a combination thereof, to such health center entity pursuant to a contract, lease, grant, loan, or other agreement, if such agreement contributes to the ability of the health center entity to maintain or increase the availability, or enhance the quality, of services provided to a medically underserved population served by the health center entity.''. (b) Rulemaking for Exception for Health Center Entity Arrangements.-- (1) Establishment.-- (A) In general.--The Secretary of Health and Human Services (in this subsection referred to as the ``Secretary'') shall establish, on an expedited basis, standards relating to the exception described in section 1128B(b)(3)(G) of the Social Security Act, as added by subsection (a), for health center entity arrangements to the antikickback penalties. (B) Factors to consider.--The Secretary shall consider the following factors, among others, in establishing standards relating to the exception for health center entity arrangements under subparagraph (A): (i) Whether the arrangement between the health center entity and the other party results in savings of Federal grant funds or increased revenues to the health center entity. (ii) Whether the arrangement between the health center entity and the other party expands or enhances a patient's freedom of choice. (iii) Whether the arrangement between the health center entity and the other party protects a health care professional's independent medical judgment regarding medically appropriate treatment. The Secretary may also include other standards and criteria that are consistent with the intent of Congress in enacting the exception established under this section. (2) Interim final effect.--No later than 180 days after the date of enactment of this Act, the Secretary shall publish a rule in the Federal Register consistent with the factors under paragraph (1)(B). Such rule shall be effective and final immediately on an interim basis, subject to such change and revision, after public notice and opportunity (for a period of not more than 60 days) for public comment, as is consistent with this subsection.
summary: Title III: Rural Health Care Improvements (sic) - Amends title XVIII (Medicare) of the Social Security Act to provide that, starting for discharges on or after October 1, 2002, hospitals (other than urban hospitals with 100 or more beds or certain public hospitals) will receive payments based on a blend of their current disproportionate share (DSH) adjustment and the current DSH adjustment for large urban hospitals. Limits such new DSH adjustment to ten percent for any hospital that is not classified as a rural referral center.(Sec. 303) Provides that for discharges occurring: (1) during FY 2003, the average standardized amount for hospitals located other than in a large urban area shall be increased by half the difference between the average standardized amount for hospitals located in large urban areas for such fiscal year, and such amount determined for other hospitals for such fiscal year; and (2) during FY 2004 and afterwards, the Secretary shall compute one standardized amount for all hospitals increased by the applicable percentage increase, and use this amount to pay all hospitals.(Sec. 304) Directs the Secretary of Health and Human Services, after revising the market basket cost weights to reflect the most current data available, to establish a frequency for revising such weights to reflect the most current data available more frequently than once every five years.(Sec. 305) Revises the critical access hospital (CAH) program to: (1) reinstate payments made on a periodic interim payment basis for inpatient services starting with payments made on or after January 1, 2003; (2) prohibit the Secretary from requiring as a condition for applying the special physician payment adjustment with respect to a CAH, that each physician providing professional services in the hospital must assign billing rights with respect to such services; (3) direct the Secretary to specify standards for determining whether a CAH has sufficiently strong seasonal variations in patient admissions to justify a five bed increase in the number of inpatient acute beds it can maintain and still retain its classification as a CAH; and (4) extend the authorization of appropriations for the Medicare rural hospital flexibility program through FY 2007.Prohibits the Secretary from recouping (or otherwise seeking to recover) overpayments made for outpatient critical access hospital services under Medicare part B for services furnished in cost reporting periods that began before October 1, 2002, insofar as such overpayments are attributable to payment being based on 80 percent of reasonable costs (instead of 100 percent of reasonable costs minus 20 percent of charges).(Sec. 306) Amends the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) to extend through December 31, 2004, the ten percent additional payment for home health care furnished to beneficiaries residing in rural areas.(Sec. 309) Directs the Comptroller General to study and report to Congress on differences in payment amounts under the physician fee schedule for physicians' services in different geographic areas.(Sec. 310) Amends SSA title XI to provide that any remuneration in the form of a contract, lease, grant, loan, or other agreement between a public or non-profit private health center and any individual or entity providing goods or services to the health center is not a violation of the anti-kickback statute if such agreement contributes to the ability of the health center to maintain or increase the availability or quality of services provided to a medically underserved population served by the health center.