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U.S. Code as of:
01/19/04
Section 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 before January 1, 2006, 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 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).
(E) Authority to establish psychiatric and rehabilitation
distinct part units
(i) In general
Subject to the succeeding provisions of this subparagraph,
a critical access hospital may establish -
(I) a psychiatric unit of the hospital that is a distinct
part of the hospital; and
(II) a rehabilitation unit of the hospital that is a
distinct part of the hospital,
if the distinct part meets the requirements (including
conditions of participation) that would otherwise apply to
the distinct part if the distinct part were established by a
subsection (d) hospital in accordance with the matter
following clause (v) of section 1395ww(d)(1)(B) of this
title, including any regulations adopted by the Secretary
under such section.
(ii) Limitation on number of beds
The total number of beds that may be established under
clause (i) for a distinct part unit may not exceed 10.
(iii) Exclusion of beds from bed count
In determining the number of beds of a critical access
hospital for purposes of applying the bed limitations
referred to in subparagraph (B)(iii) and subsection (f) of
this section, the Secretary shall not take into account any
bed established under clause (i).
(iv) Effect of failure to meet requirements
If a psychiatric or rehabilitation unit established under
clause (i) does not meet the requirements described in such
clause with respect to a cost reporting period, no payment
may be made under this subchapter to the hospital for
services furnished in such unit during such period. Payment
to the hospital for services furnished in the unit may resume
only after the hospital has demonstrated to the Secretary
that the unit meets such requirements.
(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. 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.
(4) Additional requirements with respect to FLEX grants
With respect to grants awarded under paragraph (1) or (2) from
funds appropriated for fiscal year 2005 and subsequent fiscal
years -
(A) Consultation with the state hospital association and rural
hospitals on the most appropriate ways to use grants
A State shall consult with the hospital association of such
State and rural hospitals located in such State on the most
appropriate ways to use the funds under such grant.
(B) Limitation on use of grant funds for administrative
expenses
A State may not expend more than the lesser of -
(i) 15 percent of the amount of the grant for
administrative expenses; or
(ii) the State's federally negotiated indirect rate for
administering the grant.
(5) Use of funds for Federal administrative expenses
Of the total amount appropriated for grants under paragraphs
(1) and (2) for a fiscal year (beginning with fiscal year 2005),
up to 5 percent of such amount shall be available to the Health
Resources and Services Administration for purposes of
administering such grants.
(h) Grandfathering provisions
(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".
(3) State authority to waive 35-mile rule
In the case of a facility that was designated as a critical
access hospital before January 1, 2006, and was certified by the
State as being a necessary provider of health care services to
residents in the area under subsection (c)(2)(B)(i)(II) of this
section, as in effect before such date, the authority under such
subsection with respect to any redesignation of such facility
shall continue to apply notwithstanding the amendment made by
section 405(h)(1) of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003.
(i) Waiver of conflicting part A provisions
The Secretary is authorized to waive such provisions of this part
and part E 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, and for making grants to all States under
paragraphs (1) and (2) of subsection (g) of this section,
$35,000,000 in each of fiscal years 2005 through 2008.
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