text: 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.
target: 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.
feat_title: To amend title XVIII of the Social Security Act to make rural health care improvements under the Medicare Program.