SEC. 410A. RURAL COMMUNITY HOSPITAL DEMONSTRATION PROGRAM.
(a) ESTABLISHMENT OF RURAL COMMUNITY HOSPITAL
(RCH) DEMONSTRATION PROGRAM-
(1) IN GENERAL- The Secretary shall
establish a demonstration program to test the feasibility and advisability
of the establishment of rural community hospitals (as defined in subsection
(f)(1)) to furnish covered inpatient hospital services (as defined in subsection
(f)(2)) to medicare beneficiaries.
(2) DEMONSTRATION AREAS- The program
shall be conducted in rural areas selected by the Secretary in States with
low population densities, as determined by the Secretary.
(3) APPLICATION- Each rural community
hospital that is located in a demonstration area selected under paragraph
(2) that desires to participate in the demonstration program under this section
shall submit an application to the Secretary at such time, in such manner,
and containing such information as the Secretary may require.
(4) SELECTION OF HOSPITALS- The Secretary
shall select from among rural community hospitals submitting applications
under paragraph (3) not more than 15 of such hospitals to participate in the
demonstration program under this section.
(5) DURATION- The Secretary shall
conduct the demonstration program under this section for a 5-year period.
(6) IMPLEMENTATION- The Secretary
shall implement the demonstration program not later than January 1, 2005,
but may not implement the program before October 1, 2004.
(b) PAYMENT-
(1) IN GENERAL- The amount of payment
under the demonstration program for covered inpatient hospital services furnished
in a rural community hospital, other than such services furnished in a psychiatric
or rehabilitation unit of the hospital which is a distinct part, is--
(A) for discharges occurring
in the first cost reporting period beginning on or after the implementation
of the demonstration program, the reasonable costs of providing such services;
and
(B) for discharges occurring
in a subsequent cost reporting period under the demonstration program, the
lesser of--
(i) the reasonable
costs of providing such services in the cost reporting period involved;
or
(ii) the target
amount (as defined in paragraph (2), applicable to the cost reporting
period involved.
(2) TARGET AMOUNT- For purposes of
paragraph (1)(B)(ii), the term `target amount' means, with respect to a rural
community hospital for a particular 12-month cost reporting period--
(A) in the case of the second
such reporting period for which this subsection is in effect, the reasonable
costs of providing such covered inpatient hospital services as determined
under paragraph (1)(A), and
(B) in the case of a later
reporting period, the target amount for the preceding 12-month cost reporting
period,
increased by the applicable percentage increase (under clause (i) of
section 1886(b)(3)(B) of the Social Security Act (42 U.S.C.
1395ww(b)(3)(B))) in the market basket percentage increase (as defined in
clause (iii) of such section) for that particular cost reporting
period.
(c) FUNDING-
(1) IN GENERAL- The Secretary shall
provide for the transfer from the Federal Hospital Insurance Trust Fund under
section 1817 of the Social Security Act (42 U.S.C. 1395i) of such funds as
are necessary for the costs of carrying out the demonstration program under
this section.
(2) BUDGET NEUTRALITY- In conducting
the demonstration program under this section, the Secretary shall ensure that
the aggregate payments made by the Secretary do not exceed the amount which
the Secretary would have paid if the demonstration program under this section
was not implemented.
(d) WAIVER AUTHORITY- The Secretary may waive
such requirements of title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) as may be necessary for the purpose of carrying out the demonstration
program under this section.
(e) REPORT- Not later than 6 months after
the completion of the demonstration program under this section, the Secretary
shall submit to Congress a report on such program, together with recommendations
for such legislation and administrative action as the Secretary determines to
be appropriate.
(f) DEFINITIONS- In this section:
(1) RURAL COMMUNITY HOSPITAL DEFINED-
(A) IN GENERAL- The term
`rural community hospital' means a hospital (as defined in section 1861(e)
of the Social Security Act (42 U.S.C. 1395x(e))) that--
(i) is located in
a rural area (as defined in section 1886(d)(2)(D) of such Act (42 U.S.C.
1395ww(d)(2)(D))) or treated as being so located pursuant to section 1886(d)(8)(E)
of such Act (42 U.S.C. 1395ww(d)(8)(E));
(ii) subject to paragraph
(2), has fewer than 51 acute care inpatient beds, as reported in its most
recent cost report;
(iii) makes available
24-hour emergency care services; and
(iv) is not eligible
for designation, or has not been designated, as a critical access hospital
under section 1820.
(B) TREATMENT OF PSYCHIATRIC
AND REHABILITATION UNITS- For purposes of paragraph (1)(B), beds in a psychiatric
or rehabilitation unit of the hospital which is a distinct part of the hospital
shall not be counted.
(2) COVERED INPATIENT HOSPITAL SERVICES-
The term `covered inpatient hospital services' means inpatient hospital services,
and includes extended care services furnished under an agreement under section
1883 of the Social Security Act (42 U.S.C. 1395tt).
