Sec. 410A. RURAL COMMUNITY HOSPITAL DEMONSTRATION PROGRAM

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## SEC. 410A RURAL COMMUNITY HOSPITAL DEMONSTRATION PROGRAM **[**[42 U.S.C. 1395ww note](/us/usc/t42/s1395ww)**]** ###

(a)Establishment of Rural Community Hospital

(RCH)Demonstration Program ####

(1)In general The Secretary of Health and Human Services 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 (in this section referred to as the “initial 5-year period”) and, as provided in subsection (g), for the 15-year extension 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 cost 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 cost 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 August 1, 2018, the Secretary shall submit to Congress a report on the demonstration program under this section, 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 subparagraph (B), 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 of the Social Security Act (42 U.S.C. 1395i–4). #####

(B)Treatment of psychiatric and rehabilitation units For purposes of subparagraph (A)(ii), 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). ###

(g)Fifteen-Year Extension of Demonstration Program ####

(1)In general Subject to the succeeding provisions of this subsection, the Secretary shall conduct the demonstration program under this section for an additional 15-year period (in this section referred to as the “15-year extension period”) that begins on the date immediately following the last day of the initial 5-year period under subsection (a)(5). ####

(2)Expansion of demonstration states Notwithstanding subsection (a)(2), during the 15-year extension period, the Secretary shall expand the number of States with low population densities determined by the Secretary under such subsection to 20. In determining which States to include in such expansion, the Secretary shall use the same criteria and data that the Secretary used to determine the States under such subsection for purposes of the initial 5-year period. ####

(3)Increase in maximum number of hospitals participating in the demonstration program Notwithstanding subsection (a)(4), during the 15-year extension period, not more than 30 rural community hospitals may participate in the demonstration program under this section. ####

(4)Hospitals participating in the demonstration program during the initial 5-year period In the case of a rural community hospital that is participating in the demonstration program under this section as of the last day of the initial 5-year period, the Secretary— #####

(A)shall provide for the continued participation of such rural community hospital in the demonstration program during the 15-year extension period unless the rural community hospital makes an election, in such form and manner as the Secretary may specify, to discontinue such participation; and #####

(B)in calculating the amount of payment under subsection

(b)to the rural community hospital for covered inpatient hospital services furnished by the hospital during each 5-year period in such 15-year extension period, shall substitute, under paragraph (1)(A) of such subsection— ######

(i)the reasonable costs of providing such services for discharges occurring in the first cost reporting period beginning on or after the first day of each applicable 5-year period in the 15-year extension period, for ######

(ii)the reasonable costs of providing such services for discharges occurring in the first cost reporting period beginning on or after the implementation of the demonstration program. ####

(5)Other hospitals in demonstration program #####

(A)CURES act extension During the second 5 years of the 15-year extension period, the Secretary shall apply the provisions of paragraph

(4)to rural community hospitals that are not described in paragraph

(4)but are participating in the demonstration program under this section as of December 30, 2014, in a similar manner as such provisions apply to rural community hospitals described in paragraph (4). #####

(B)Additional extension During the third 5 years of the 15-year extension period, the Secretary shall apply the provisions of paragraph

(4)to rural community hospitals that are not described in paragraph

(4)but are participating in the demonstration program under this section as of December 30, 2019, in a similar manner as such provisions apply to rural community hospitals described in paragraph (4). ####

(6)Expansion of demonstration program to rural areas in any state #####

(A)In general The Secretary shall, notwithstanding subsection (a)(2) or paragraph

(2)of this subsection, not later than April 12, 2017, issue a solicitation for applications to select up to the maximum number of additional rural community hospitals located in any State to participate in the demonstration program under this section for the second 5 years of the 15-year extension period without exceeding the limitation under paragraph

(3)of this subsection. #####

(B)Priority In determining which rural community hospitals that submitted an application pursuant to the solicitation under subparagraph

(A)to select for participation in the demonstration program, the Secretary— ######

(i)shall give priority to rural community hospitals located in one of the 20 States with the lowest population densities (as determined by the Secretary using the 2015 Statistical Abstract of the United States); and ######

(ii)may consider— ######

(I)closures of hospitals located in rural areas in the State in which the rural community hospital is located during the 5-year period immediately preceding the date of the enactment of this paragraph; and ######

(II)the population density of the State in which the rural community hospital is located. * * * * * * * # TITLE XI ACCESS TO AFFORDABLE PHARMACEUTICALS * * * * * * * ## Subtitle B Federal Trade Commission Review1 1Subtitle B of title XI of Public Law 108–173 (117 Stat. 2461; 21 U.S.C. 355 note).

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