
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-554 Section 1(a)(6)[206]]
[CITE: 42USC1395i-4]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XVIII--HEALTH INSURANCE FOR AGED AND DISABLED
 
        Part A--Hospital Insurance Benefits for Aged and Disabled
 
Sec. 1395i-4. Medicare rural hospital flexibility program


(a) Establishment

    Any State that submits an application in accordance with subsection 
(b) of this section may establish a medicare rural hospital flexibility 
program described in subsection (c) of this section.

(b) Application

    A State may establish a medicare rural hospital flexibility program 
described in subsection (c) of this section if the State submits to the 
Secretary at such time and in such form as the Secretary may require an 
application containing--
        (1) assurances that the State--
            (A) has developed, or is in the process of developing, a 
        State rural health care plan that--
                (i) provides for the creation of 1 or more rural health 
            networks (as defined in subsection (d) of this section) in 
            the State;
                (ii) promotes regionalization of rural health services 
            in the State; and
                (iii) improves access to hospital and other health 
            services for rural residents of the State; and

            (B) has developed the rural health care plan described in 
        subparagraph (A) in consultation with the hospital association 
        of the State, rural hospitals located in the State, and the 
        State Office of Rural Health (or, in the case of a State in the 
        process of developing such plan, that assures the Secretary that 
        the State will consult with its State hospital association, 
        rural hospitals located in the State, and the State Office of 
        Rural Health in developing such plan);

        (2) assurances that the State has designated (consistent with 
    the rural health care plan described in paragraph (1)(A)), or is in 
    the process of so designating, rural nonprofit or public hospitals 
    or facilities located in the State as critical access hospitals; and
        (3) such other information and assurances as the Secretary may 
    require.

(c) Medicare rural hospital flexibility program described

                           (1) In general

        A State that has submitted an application in accordance with 
    subsection (b) of this section, may establish a medicare rural 
    hospital flexibility program that provides that--
            (A) the State shall develop at least 1 rural health network 
        (as defined in subsection (d) of this section) in the State; and
            (B) at least 1 facility in the State shall be designated as 
        a critical access hospital in accordance with paragraph (2).

                 (2) State designation of facilities

        (A) In general

            A State may designate 1 or more facilities as a critical 
        access hospital in accordance with subparagraphs (B), (C), and 
        (D).

        (B) Criteria for designation as critical access hospital

            A State may designate a facility as a critical access 
        hospital if the facility--
                (i) is a hospital that is located in a county (or 
            equivalent unit of local government) in a rural area (as 
            defined in section 1395ww(d)(2)(D) of this title) or is 
            treated as being located in a rural area pursuant to section 
            1395ww(d)(8)(E) of this title, and that--
                    (I) is located more than a 35-mile drive (or, in the 
                case of mountainous terrain or in areas with only 
                secondary roads available, a 15-mile drive) from a 
                hospital, or another facility described in this 
                subsection; or
                    (II) is certified by the State as being a necessary 
                provider of health care services to residents in the 
                area;

                (ii) makes available 24-hour emergency care services 
            that a State determines are necessary for ensuring access to 
            emergency care services in each area served by a critical 
            access hospital;
                (iii) provides not more than 15 (or, in the case of a 
            facility under an agreement described in subsection (f) of 
            this section, 25) acute care inpatient beds (meeting such 
            standards as the Secretary may establish) for providing 
            inpatient care for a period that does not exceed, as 
            determined on an annual, average basis, 96 hours per 
            patient;
                (iv) meets such staffing requirements as would apply 
            under section 1395x(e) of this title to a hospital located 
            in a rural area, except that--
                    (I) the facility need not meet hospital standards 
                relating to the number of hours during a day, or days 
                during a week, in which the facility must be open and 
                fully staffed, except insofar as the facility is 
                required to make available emergency care services as 
                determined under clause (ii) and must have nursing 
                services available on a 24-hour basis, but need not 
                otherwise staff the facility except when an inpatient is 
                present;
                    (II) the facility may provide any services otherwise 
                required to be provided by a full-time, on site 
                dietitian, pharmacist, laboratory technician, medical 
                technologist, and radiological technologist on a part-
                time, off site basis under arrangements as defined in 
                section 1395x(w)(1) of this title; and
                    (III) the inpatient care described in clause (iii) 
                may be provided by a physician assistant, nurse 
                practitioner, or clinical nurse specialist subject to 
                the oversight of a physician who need not be present in 
                the facility; and

                (v) meets the requirements of section 1395x(aa)(2)(I) of 
            this title.

        (C) Recently closed facilities

            A State may designate a facility as a critical access 
        hospital if the facility--
                (i) was a hospital that ceased operations on or after 
            the date that is 10 years before November 29, 1999; and
                (ii) as of the effective date of such designation, meets 
            the criteria for designation under subparagraph (B).

        (D) Downsized facilities

            A State may designate a health clinic or a health center (as 
        defined by the State) as a critical access hospital if such 
        clinic or center--
                (i) is licensed by the State as a health clinic or a 
            health center;
                (ii) was a hospital that was downsized to a health 
            clinic or health center; and
                (iii) as of the effective date of such designation, 
            meets the criteria for designation under subparagraph (B).

(d) ``Rural health network'' defined

                           (1) In general

        In this section, the term ``rural health network'' means, with 
    respect to a State, an organization consisting of--
            (A) at least 1 facility that the State has designated or 
        plans to designate as a critical access hospital; and
            (B) at least 1 hospital that furnishes acute care services.

                           (2) Agreements

        (A) In general

            Each critical access hospital that is a member of a rural 
        health network shall have an agreement with respect to each item 
        described in subparagraph (B) with at least 1 hospital that is a 
        member of the network.

        (B) Items described

            The items described in this subparagraph are the following:
                (i) Patient referral and transfer.
                (ii) The development and use of communications systems 
            including (where feasible)--
                    (I) telemetry systems; and
                    (II) systems for electronic sharing of patient data.

                (iii) The provision of emergency and non-emergency 
            transportation among the facility and the hospital.

        (C) Credentialing and quality assurance

            Each critical access hospital that is a member of a rural 
        health network shall have an agreement with respect to 
        credentialing and quality assurance with at least--
                (i) 1 hospital that is a member of the network;
                (ii) 1 peer review organization or equivalent entity; or
                (iii) 1 other appropriate and qualified entity 
            identified in the State rural health care plan.

(e) Certification by Secretary

    The Secretary shall certify a facility as a critical access hospital 
if the facility--
        (1) is located in a State that has established a medicare rural 
    hospital flexibility program in accordance with subsection (c) of 
    this section;
        (2) is designated as a critical access hospital by the State in 
    which it is located; and
        (3) meets such other criteria as the Secretary may require.

(f) Permitting maintenance of swing beds

    Nothing in this section shall be construed to prohibit a State from 
designating or the Secretary from certifying a facility as a critical 
access hospital solely because, at the time the facility applies to the 
State for designation as a critical access hospital, there is in effect 
an agreement between the facility and the Secretary under section 1395tt 
of this title under which the facility's inpatient hospital facilities 
are used for the provision of extended care services, so long as the 
total number of beds that may be used at any time for the furnishing of 
either such services or acute care inpatient services does not exceed 25 
beds and the number of beds used at any time for acute care inpatient 
services does not exceed 15 beds. For purposes of the previous sentence, 
any bed of a unit of the facility that is licensed as a distinct-part 
skilled nursing facility at the time the facility applies to the State 
for designation as a critical access hospital shall not be counted.

(g) Grants

           (1) Medicare rural hospital flexibility program

        The Secretary may award grants to States that have submitted 
    applications in accordance with subsection (b) of this section for--
            (A) engaging in activities relating to planning and 
        implementing a rural health care plan;
            (B) engaging in activities relating to planning and 
        implementing rural health networks; and
            (C) designating facilities as critical access hospitals.

                (2) Rural emergency medical services

        (A) In general

            The Secretary may award grants to States that have submitted 
        applications in accordance with subparagraph (B) for the 
        establishment or expansion of a program for the provision of 
        rural emergency medical services.

        (B) Application

            An application is in accordance with this subparagraph if 
        the State submits to the Secretary at such time and in such form 
        as the Secretary may require an application containing the 
        assurances described in subparagraphs (A)(ii), (A)(iii), and (B) 
        of subsection (b)(1) of this section and paragraph (3) of that 
        subsection.

                     (3) Upgrading data systems

        (A) Grants to hospitals

            The Secretary may award grants to hospitals that have 
        submitted applications in accordance with subparagraph (C) to 
        assist eligible small rural hospitals in meeting the costs of 
        implementing data systems required to meet requirements 
        established under the medicare program pursuant to amendments 
        made by the Balanced Budget Act of 1997.

        (B) Eligible small rural hospital defined

            For purposes of this paragraph, the term ``eligible small 
        rural hospital'' means a non-Federal, short-term general acute 
        care hospital that--
                (i) is located in a rural area (as defined for purposes 
            of section 1395ww(d) of this title); and
                (ii) has less than 50 beds.

        (C) Application

            A hospital seeking a grant under this paragraph shall submit 
        an application to the Secretary on or before such date and in 
        such form and manner as the Secretary specifies.

        (D) Amount of grant

            A grant to a hospital under this paragraph may not exceed 
        $50,000.

        (E) Use of funds

            A hospital receiving a grant under this paragraph may use 
        the funds for the purchase of computer software and hardware, 
        the education and training of hospital staff on computer 
        information systems, and to offset costs related to the 
        implementation of prospective payment systems.

        (F) Reports

            (i) Information

                A hospital receiving a grant under this section shall 
            furnish the Secretary with such information as the Secretary 
            may require to evaluate the project for which the grant is 
            made and to ensure that the grant is expended for the 
            purposes for which it is made.
            (ii) Timing of submission

                (I) Interim reports

                    The Secretary shall report to the Committee on Ways 
                and Means of the House of Representatives and the 
                Committee on Finance of the Senate at least annually on 
                the grant program established under this section, 
                including in such report information on the number of 
                grants made, the nature of the projects involved, the 
                geographic distribution of grant recipients, and such 
                other matters as the Secretary deems appropriate.
                (II) Final report

                    The Secretary shall submit a final report to such 
                committees not later than 180 days after the completion 
                of all of the projects for which a grant is made under 
                this section.

(h) Grandfathering of certain facilities

                           (1) In general

        Any medical assistance facility operating in Montana and any 
    rural primary care hospital designated by the Secretary under this 
    section prior to August 5, 1997, shall be deemed to have been 
    certified by the Secretary under subsection (e) of this section as a 
    critical access hospital if such facility or hospital is otherwise 
    eligible to be designated by the State as a critical access hospital 
    under subsection (c) of this section.

     (2) Continuation of medical assistance facility and rural 
                         primary care hospital terms

        Notwithstanding any other provision of this subchapter, with 
    respect to any medical assistance facility or rural primary care 
    hospital described in paragraph (1), any reference in this 
    subchapter to a ``critical access hospital'' shall be deemed to be a 
    reference to a ``medical assistance facility'' or ``rural primary 
    care hospital''.

(i) Waiver of conflicting part A provisions

    The Secretary is authorized to waive such provisions of this part 
and part D of this subchapter as are necessary to conduct the program 
established under this section.

(j) Authorization of appropriations

    There are authorized to be appropriated from the Federal Hospital 
Insurance Trust Fund for making grants to all States under subsection 
(g) of this section, $25,000,000 in each of the fiscal years 1998 
through 2002.

(Aug. 14, 1935, ch. 531, title XVIII, Sec. 1820, as added Pub. L. 101-
239, title VI, Sec. 6003(g)(1)(A), Dec. 19, 1989, 103 Stat. 2145; 
amended Pub. L. 101-508, title IV, Sec. 4008(d)(1)-(3), (m)(2)(B), Nov. 
5, 1990, 104 Stat. 1388-44, 1388-45, 1388-53; Pub. L. 103-432, title I, 
Sec. 102(a)(1), (2), (b)(1)(A), (2), (c), (f), (h), Oct. 31, 1994, 108 
Stat. 4401-4404; Pub. L. 105-33, title IV, Secs. 4002(f)(1), 4201(a), 
Aug. 5, 1997, 111 Stat. 329, 369; Pub. L. 106-113, div. B, 
Sec. 1000(a)(6) [title III, Sec. 321(a), title IV, Secs. 401(b)(2), 
403(a)(1), (b), (c), 409], Nov. 29, 1999, 113 Stat. 1536, 1501A-365, 
1501A-369, 1501A-370, 1501A-375.)

                       References in Text

    The Balanced Budget Act of 1997, referred to in subsec. (g)(3)(A), 
is Pub. L. 105-33, Aug. 5, 1997, 111 Stat. 251. For complete 
classification of this Act to the Code, see Tables.
    Part D of this subchapter, referred to in subsec. (i), is classified 
to section 1395x et seq. of this title.


                               Amendments

    1999--Subsec. (c)(2)(A). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(c)(1)], substituted ``subparagraphs (B), (C), and (D)'' for 
``subparagraph (B)''.
    Subsec. (c)(2)(B)(i). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(b)], substituted ``hospital'' for ``nonprofit or public 
hospital''.
    Pub. L. 106-113, Sec. 1000(a)(6) [title IV, Sec. 401(b)(2)], 
inserted ``or is treated as being located in a rural area pursuant to 
section 1395ww(d)(8)(E) of this title'' after ``section 1395ww(d)(2)(D) 
of this title)''.
    Pub. L. 106-113, Sec. 1000(a)(6) [title III, Sec. 321(a)], 
substituted ``that is located in a county (or equivalent unit of local 
government) in a rural area (as defined in section 1395ww(d)(2)(D) of 
this title), and that'' for ``and is located in a county (or equivalent 
unit of local government) in a rural area (as defined in section 
1395ww(d)(2)(D) of this title) that''.
    Subsec. (c)(2)(B)(iii). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(a)(1)], substituted ``for a period that does not exceed, as 
determined on an annual, average basis, 96 hours per patient;'' for 
``for a period not to exceed 96 hours (unless a longer period is 
required because transfer to a hospital is precluded because of 
inclement weather or other emergency conditions), except that a peer 
review organization or equivalent entity may, on request, waive the 96-
hour restriction on a case-by-case basis;''.
    Subsec. (c)(2)(C), (D). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 403(c)(2)], added subpars. (C) and (D).
    Subsec. (g)(3). Pub. L. 106-113, Sec. 1000(a)(6) [title IV, 
Sec. 409], added par. (3).
    1997--Pub. L. 105-33, Sec. 4201(a), amended section catchline and 
text generally, substituting provisions relating to medicare rural 
hospital flexibility program for provisions relating to essential access 
community hospital program.
    Subsec. (j). Pub. L. 105-33, Sec. 4002(f)(1), substituted ``part D'' 
for ``part C''.
    1994--Subsec. (c)(1). Pub. L. 103-432, Sec. 102(b)(2)(B)(i), 
substituted ``paragraph (3) or subsection (k) of this section'' for 
``paragraph (3)''.
    Subsec. (e)(1). Pub. L. 103-432, Sec. 102(b)(1)(A)(i), redesignated 
par. (2) as (1) and struck out former par. (1) which read as follows: 
``is located in a rural area (as defined in section 1395ww(d)(2)(D) of 
this title);''.
    Subsec. (e)(1)(A). Pub. L. 103-432, Sec. 102(b)(1)(A)(ii), 
substituted ``except in the case of a hospital located in an urban area, 
is located'' for ``is located'' in introductory provisions, substituted 
``or (ii)'' for ``, (ii)'', and struck out ``or (iii) is located in an 
urban area that meets the criteria for classification as a regional 
referral center under such section,'' after ``section 1395ww(d)(5)(C) of 
this title,''.
    Subsec. (e)(2) to (6). Pub. L. 103-432, Sec. 102(b)(1)(A)(i), 
redesignated pars. (2) to (6) as (1) to (5), respectively.
    Subsec. (f)(1)(F). Pub. L. 103-432, Sec. 102(a)(1), amended subpar. 
(F) generally. Prior to amendment, subpar. (F) read as follows: 
``provides not more than 6 inpatient beds (meeting such conditions as 
the Secretary may establish) for providing inpatient care for a period 
not to exceed 72 hours (unless a longer period is required because 
transfer to a hospital is precluded because of inclement weather or 
other emergency conditions) to patients requiring stabilization before 
discharge or transfer to a hospital;''.
    Subsec. (f)(1)(H). Pub. L. 103-432, Sec. 102(f), inserted before 
period at end ``, except that in determining whether a facility meets 
the requirements of this subparagraph, subparagraphs (E) and (F) of that 
paragraph shall be applied as if any reference to a `physician' is a 
reference to a physician as defined in section 1395x(r)(1) of this 
title''.
    Subsec. (f)(3). Pub. L. 103-432, Sec. 102(c), substituted ``because, 
at the time the facility applies to the State for designation as a rural 
primary care hospital, there is in effect an agreement between the 
facility and the Secretary under section 1395tt of this title under 
which the facility's inpatient hospital facilities are used for the 
furnishing of extended care services, except that the number of beds 
used for the furnishing of such services may not exceed the total number 
of licensed inpatient beds at the time the facility applies to the State 
for such designation (minus the number of inpatient beds used for 
providing inpatient care pursuant to paragraph (1)(F)). For purposes of 
the previous sentence, the number of beds of the facility used for the 
furnishing of extended care services shall not include any beds of a 
unit of the facility that is licensed as a distinct-part skilled nursing 
facility at the time the facility applies to the State for designation 
as a rural primary care hospital.'' for ``because the facility has 
entered into an agreement with the Secretary under section 1395tt of 
this title under which the facility's inpatient hospital facilities may 
be used for the furnishing of extended care services.''
    Subsec. (f)(4). Pub. L. 103-432, Sec. 102(a)(2), added par. (4).
    Subsec. (i)(1)(A). Pub. L. 103-432, Sec. 102(b)(2)(B)(ii), in cl. 
(i) inserted ``(except as provided in subsection (k) of this section)'' 
and in cl. (ii) inserted ``or subsection (k) of this section''.
    Subsec. (i)(1)(B). Pub. L. 103-432, Sec. 102(b)(1)(A)(iii), 
substituted ``paragraph (2)'' for ``paragraph (3)''.
    Subsec. (i)(2)(A). Pub. L. 103-432, Sec. 102(b)(2)(B)(ii), in cl. 
(i) inserted ``(except as provided in subsection (k) of this section)'' 
and in cl. (ii) inserted ``or subsection (k) of this section''.
    Subsec. (k). Pub. L. 103-432, Sec. 102(b)(2)(A)(ii), added subsec. 
(k). Former subsec. (k) redesignated (l).
    Subsec. (l). Pub. L. 103-432, Sec. 102(h), substituted ``1990 
through 1997'' for ``1990, 1991, and 1992'' in introductory provisions.
    Pub. L. 103-432, Sec. 102(b)(2)(A)(i), redesignated subsec. (k) as 
(l).
    1990--Subsec. (d)(1). Pub. L. 101-508, Sec. 4008(m)(2)(B)(i), struck 
out ``demonstration'' before ``program''.
    Subsec. (f)(1)(A). Pub. L. 101-508, Sec. 4008(d)(3), inserted before 
semicolon at end ``, or is located in a county whose geographic area is 
substantially larger than the average geographic area for urban counties 
in the United States and whose hospital service area is characteristic 
of service areas of hospitals located in rural areas''.
    Subsec. (f)(1)(B). Pub. L. 101-508, Sec. 4008(d)(2), which directed 
the substitution of ``is a hospital (or, in the case of a facility that 
closed during the 12-month period that ends on the date the facility 
applies for such designation, at the time the facility closed),'' for 
``is a hospital,'' was executed by making the substitution for ``is a 
hospital'' to reflect the probable intent of Congress.
    Subsec. (g)(1)(A)(ii). Pub. L. 101-508, Sec. 4008(m)(2)(B)(ii), 
substituted ``regional referral center'' for ``rural referral center''.
    Subsec. (i)(2)(C). Pub. L. 101-508, Sec. 4008(d)(1), inserted at end 
``In designating facilities as rural primary care hospitals under this 
subparagraph, the Secretary shall give preference to facilities not 
meeting the requirements of clause (i) of subparagraph (A) that have 
entered into an agreement described in subsection (g)(2) of this section 
with a rural health network located in a State receiving a grant under 
subsection (a)(1) of this section.''
    Subsec. (j). Pub. L. 101-508, Sec. 4008(m)(2)(B)(iii), inserted 
``and part C of this subchapter'' after ``this part''.


                    Effective Date of 1999 Amendment

    Amendment by section 1000(a)(6) [title III, Sec. 321(a)] of Pub. L. 
106-113 effective as if included in the enactment of the Balanced Budget 
Act of 1997, Pub. L. 105-33, except as otherwise provided, see section 
1000(a)(6) [title III, Sec. 321(m)] of Pub. L. 106-113, set out as a 
note under section 1395d of this title.
    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 401(c)], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-369, provided that: ``The 
amendments made by this section [amending this section and sections 
1395l and 1395ww of this title] shall become effective on January 1, 
2000.''
    Pub. L. 106-113, div. B, Sec. 1000(a)(6) [title IV, Sec. 403(a)(2)], 
Nov. 29, 1999, 113 Stat. 1536, 1501A-370, provided that: ``The amendment 
made by paragraph (1) [amending this section] takes effect on the date 
of the enactment of this Act [Nov. 29, 1999].''


                    Effective Date of 1997 Amendment

    Amendment by section 4201(a) of Pub. L. 105-33 applicable to 
services furnished on or after Oct. 1, 1997, see section 4201(d) of Pub. 
L. 105-33, set out as a note under section 1395f of this title.


                    Effective Date of 1990 Amendment

    Section 4008(d)(4) of Pub. L. 101-508 provided that: ``The 
amendments made by paragraphs (1), (2), and (3) [amending this section] 
shall take effect on the date of the enactment of this Act [Nov. 5, 
1990].''


                           Transition for MAF

    Section 4201(c)(6) of Pub. L. 105-33 provided that:
    ``(A) In general.--The Secretary of Health and Human Services shall 
provide for an appropriate transition for a facility that, as of the 
date of the enactment of this Act [Aug. 5, 1997], operated as a limited 
service rural hospital under a demonstration described in section 
4008(i)(1) of the Omnibus Budget Reconciliation Act of 1990 [Pub. L. 
101-508] (42 U.S.C. 1395b-1 note) from such demonstration to the program 
established under subsection (a) [amending this section]. At the 
conclusion of the transition period described in subparagraph (B), the 
Secretary shall end such demonstration.
    ``(B) Transition period described.--
        ``(i) Initial period.--Subject to clause (ii), the transition 
    period described in this subparagraph is the period beginning on the 
    date of the enactment of this Act and ending on October 1, 1998.
        ``(ii) Extension.--If the Secretary determines that the 
    transition is not complete as of October 1, 1998, the Secretary 
    shall provide for an appropriate extension of the transition 
    period.''


                               GAO Reports

    Section 102(a)(4) of Pub. L. 103-432 directed Comptroller General to 
submit to Congress, not later than 2 years after Oct. 31, 1994, reports 
on application of requirements under subsec. (f) of this section that 
rural primary care hospitals provide inpatient care only to those 
individuals whose attending physicians certify may reasonably be 
expected to be discharged within 72 hours after admission and maintain 
average length of inpatient stay during a year that does not exceed 72 
hours, and extent to which such requirements have resulted in such 
hospitals providing inpatient care beyond their capabilities or have 
limited ability of such hospitals to provide needed services.

                  Section Referred to in Other Sections

    This section is referred to in sections 1395x, 1395ww of this title.
