SEC. 4201. MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.
(a) Medicare Rural Hospital Flexibility Program.--Section 1820 (42 U.S.C. 1395i-4) is amended to read as follows:
Sec. 1820. (a) Establishment.--Any State that submits an application in accordance with subsection (b) may establish a medicare rural hospital flexibility program described in subsection (c).
(b) Application.--A State may establish a medicare rural hospital flexibility program described in subsection (c) 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)) 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), 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)) 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 subparagraph (B).
(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 nonprofit or public hospital and is located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D)) 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), 25) acute care inpatient beds (meeting such standards as the Secretary may establish) for providing inpatient care 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; (iv) meets such staffing requirements as would apply under section 1861(e) 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 1861(w)(1); 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 1861(aa)(2)(I).
(d) Definition of Rural Health Network.-- (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 the 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); (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 1883 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) 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) and paragraph (3) of that subsection.
(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 the date of the enactment of the Balanced Budget Act of 1997 shall be deemed to have been certified by the Secretary under subsection (e) 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).
(2) Continuation of medical assistance facility and rural primary care hospital terms.--Notwithstanding any other provision of this title, with respect to any medical assistance facility or rural primary care hospital described in paragraph (1), any reference in this title 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 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), $25,000,000 in each of the fiscal years 1998 through 2002.".
(b) Report on Alternative to 96-Hour Rule.--Not later than June 1, 1998, the Secretary of Health and Human Services shall submit to Congress a report on the feasibility of, and administrative requirements necessary to establish an alternative for certain medical diagnoses (as determined by the Secretary) to the 96-hour limitation for inpatient care in critical access hospitals required by section 1820(c)(2)(B)(iii) of the Social Security Act (42 U.S.C. 1395i- 4(c)(2)(B)(iii)), as added by subsection (a) of this section.
(c) Conforming Amendments Relating to Rural Primary Care Hospitals and Critical Access Hospitals.-- (1) In general.--Title XI of the Social Security Act (42 U.S.C. 1301 et seq.) and title XVIII of that Act (42 U.S.C. 1395 et seq.) are each amended by striking "rural primary care" each place it appears and inserting "critical access".
(2) Definitions.--Section 1861(mm) of the Social Security Act (42 U.S.C. 1395x(mm)) is amended to read as follows:
(mm)(1) The term 'critical access hospital' means a facility certified by the Secretary as a critical access hospital under section 1820(e).
(2) The term 'inpatient critical access hospital services' means items and services, furnished to an inpatient of a critical access hospital by such facility, that would be inpatient hospital services if furnished to an inpatient of a hospital by a hospital.
(3) The term 'outpatient critical access hospital services' means medical and other health services furnished by a critical access hospital on an outpatient basis.
(3) Part a payment.--Section 1814 of the Social Security Act (42 U.S.C. 1395f) is amended-- (A) in subsection (a)(8), by striking "72" and inserting "96"; and (B) by amending subsection (l) to read as follows:
(l) The amount of payment under this part for inpatient critical access hospital services is the reasonable costs of the critical access hospital in providing such services.".
(4) Payment continued to designated eachs.--Section 1886(d)(5)(D) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(D)) is amended-- (A) in clause (iii)(III), by inserting "as in effect on September 30, 1997" before the period at the end; and (B) in clause (v)-- (i) by inserting "as in effect on September 30, 1997" after "1820(i)(1)"; and (ii) by striking "1820(g)" and inserting "1820(d)".
(5) Part b payment.--Section 1834(g) of the Social Security Act (42 U.S.C. 1395m(g)) is amended to read as follows: (g) Payment for Outpatient Critical Access Hospital Services.-- The amount of payment under this part for outpatient critical access hospital services is the reasonable costs of the critical access hospital in providing such services.".
(6) Transition for MAF.-- (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, operated as a limited service rural hospital under a demonstration described in section 4008(i)(1) of the Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 1395b-1 note) from such demonstration to the program established under subsection (a).
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.
(d) Effective Date.--The amendments made by this section shall apply to services furnished on or after October 1, 1997.
(a) In General.--Section 1886(d)(10)(D) (42 U.S.C. 1395ww(d)(10)(D)) is amended-- (1) by redesignating clause (iii) as clause (iv); and (2) by inserting after clause (ii) the following new clause: (iii) Under the guidelines published by the Secretary under clause (i), in the case of a hospital which has ever been classified by the Secretary as a rural referral center under paragraph (5)(C), the Board may not reject the application of the hospital under this paragraph on the basis of any comparison between the average hourly wage of the hospital and the average hourly wage of hospitals in the area in which it is located.".
(b) Continuing Treatment of Previously Designated Centers.-- (1) In general.--Any hospital classified as a rural referral center by the Secretary of Health and Human Services under section 1886(d)(5)(C) of the Social Security Act for fiscal year 1991 shall be classified as such a rural referral center for fiscal year 1998 and each subsequent fiscal year.
(2) Budget neutrality.--The provisions of section 1886(d)(8)(D) of the Social Security Act shall apply to reclassifications made pursuant to paragraph (1) in the same manner as such provisions apply to a reclassification under section 1886(d)(10) of such Act.
(a) In General.--For the period described in subsection (c), the Medicare Geographic Classification Review Board shall consider the application under section 1886(d)(10)(C)(i) of the Social Security Act (42 U.S.C. 1395ww(d)(10)(C)(i)) of a hospital described in 1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B)) to change the hospital's geographic classification for purposes of determining for a fiscal year eligibility for and amount of additional payment amounts under section 1886(d)(5)(F) of such Act (42 U.S.C. 1395ww(d)(5)(F)).
(b) Applicable Guidelines.--The Medicare Geographic Classification Review Board shall apply the guidelines established for reclassification under subclause (I) of section 1886(d)(10)(C)(i) of such Act to reclassification by reason of subsection (a) until the Secretary of Health and Human Services promulgates separate guidelines for such reclassification.
(c) Period Described.--The period described in this subsection is the period beginning on the date of the enactment of this Act and ending 30 months after such date.
(a) Special Treatment Extended.-- (1) Payment methodology.--Section 1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)) is amended-- (A) in clause (i), by striking "October 1, 1994," and inserting "October 1, 1994, or beginning on or after October 1, 1997, and before October 1, 2001,"; and (B) in clause (ii)(II), by striking "October 1, 1994," and inserting "October 1, 1994, or beginning on or after October 1, 1997, and before October 1, 2001,".
(2) Extension of target amount.--Section 1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)) is amended-- (A) in the matter preceding clause (i), by striking "September 30, 1994," and inserting "September 30, 1994, and for cost reporting periods beginning on or after October 1, 1997, and before October 1, 2001,"; (B) in clause (ii), by striking "and" at the end; (C) in clause (iii), by striking the period at the end and inserting ", and"; and (D) by adding after clause (iii) the following new clause: (iv) with respect to discharges occurring during fiscal year 1998 through fiscal year 2000, the target amount for the preceding year increased by the applicable percentage increase under subparagraph (B)(iv).".
(3) Permitting hospitals to decline reclassification.--Section 13501(e)(2) of OBRA-93 (42 U.S.C. 1395ww note) is amended by striking "or fiscal year 1994" and inserting ", fiscal year 1994, fiscal year 1998, fiscal year 1999, or fiscal year 2000".
(b) Effective Date.--The amendments made by subsection (a) shall apply with respect to discharges occurring on or after October 1, 1997.
(a) Per-Visit Payment Limits for Provider-Based Clinics.-- (1) Extension of limit.-- (A) In general.--The matter in section 1833(f) (42 U.S.C. 1395l(f)) preceding paragraph (1) is amended by striking "independent rural health clinics" and inserting "rural health clinics (other than such clinics in rural hospitals with less than 50 beds)".
(B) Effective date.--The amendment made by subparagraph (A) applies to services furnished on or after January 1, 1998.
(2) Technical clarification.--Section 1833(f)(1) (42 U.S.C.1395l(f)(1)) is amended by inserting "per visit" after "$46".
(b) Assurance of Quality Services.-- (1) In general.--Subparagraph (I) of the first sentence of section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended to read as follows: (I) has a quality assessment and performance improvement program, and appropriate procedures for review of utilization of clinic services, as the Secretary may specify,".
(2) Effective date.--The amendment made by paragraph (1) shall take effect on January 1, 1998.
(c) Waiver of Certain Staffing Requirements Limited to Clinics in Program.-- (1) In general.--Section 1861(aa)(7)(B) (42 U.S.C. 1395x(aa)(7)(B)) is amended by inserting before the period ", or if the facility has not yet been determined to meet the requirements (including subparagraph (J) of the first sentence of paragraph (2)) of a rural health clinic".
(2) Effective date.--The amendment made by paragraph (1) applies to waiver requests made on or after January 1, 1998.
(d) Refinement of Shortage Area Requirements.-- (1) Designation reviewed triennially.--Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended in the second sentence, in the matter in clause (i) preceding subclause (I)-- (A) by striking "and that is designated" and inserting "and that, within the previous 3-year period, has been designated"; and (B) by striking "or that is designated" and inserting "or designated".
(2) Area must have shortage of health care practitioners.-- Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)), as amended by paragraph (1), is further amended in the second sentence, in the matter in clause (i) preceding subclause (I)-- (A) by striking the comma after "personal health services"; and (B) by inserting "and in which there are insufficient numbers of needed health care practitioners (as determined by the Secretary)," after "Bureau of the Census)".
(3) Previously qualifying clinics grandfathered only to prevent shortage.-- (A) In General.--Section 1861(aa)(2) of the Social Security Act (42 U.S.C. 1395x(aa)(2)) is amended in the third sentence by inserting before the period "if it is determined, in accordance with criteria established by the Secretary in regulations, to be essential to the delivery of primary care services that would otherwise be unavailable in the geographic area served by the clinic".
(B) Payment for certain physician assistant services.-- Section 1842(b)(6)(C) (42 U.S.C. 1395u(b)(6)(C)) is amended to read as follows: (C) in the case of services described in clause (i) of section 1861(s)(2)(K), payment shall be made to either (i) the employer of the physician assistant involved, or (ii) with respect to a physician assistant who was the owner of a rural health clinic (as described in section 1861(aa)(2)) for a continuous period beginning prior to the date of the enactment of the Balanced Budget Act of 1997 and ending on the date that the Secretary determines such rural health clinic no longer meets the requirements of section 1861(aa)(2), for such services provided before January 1, 2003, payment may be made directly to the physician assistant; and".
(4) Effective dates; implementing regulations.-- (A) In general.--Except as otherwise provided, the amendments made by the preceding paragraphs take effect on the date of the enactment of this Act.
(B) Current rural health clinics.--The amendments made by the preceding paragraphs take effect, with respect to entities that are rural health clinics under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) on the date of enactment of this Act, on the date of the enactment of this Act.
(C) Grandfathered clinics.-- (i) In general.--The amendment made by paragraph (3)(A) shall take effect on the effective date of regulations issued by the Secretary under clause (ii).
(ii) Regulations.--The Secretary shall issue final regulations implementing paragraph (3)(A) that shall take effect no later than January 1, 1999.
(a) In General.--Not later than January 1, 1999, the Secretary of Health and Human Services shall make payments from the Federal Supplementary Medical Insurance Trust Fund under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) in accordance with the methodology described in subsection (b) for professional consultation via telecommunications systems with a physician (as defined in section 1861(r) of such Act (42 U.S.C. 1395x(r)) or a practitioner (described in section 1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C)) furnishing a service for which payment may be made under such part to a beneficiary under the medicare program residing in a county in a rural area (as defined in section 1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D))) that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C.254e(a)(1)(A)), notwithstanding that the individual physician or practitioner providing the professional consultation is not at the same location as the physician or practitioner furnishing the service to that beneficiary.
(b) Methodology for Determining Amount of Payments.--Taking into account the findings of the report required under section 192 of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191; 110 Stat. 1988), the findings of the report required under paragraph (c), and any other findings related to the clinical efficacy and cost-effectiveness of telehealth applications, the Secretary shall establish a methodology for determining the amount of payments made under subsection (a) within the following parameters: (1) The payment shall shared between the referring physician or practitioner and the consulting physician or practitioner. The amount of such payment shall not be greater than the current fee schedule of the consulting physician or practitioner for the health care services provided.
(2) The payment shall not include any reimbursement for any telephone line charges or any facility fees, and a beneficiary may not be billed for any such charges or fees.
(3) The payment shall be made subject to the coinsurance and deductible requirements under subsections (a)(1) and (b) of section 1833 of the Social Security Act (42 U.S.C. 1395l).
(4) The payment differential of section 1848(a)(3) of such Act (42 U.S.C. 1395w-4(a)(3)) shall apply to services furnished by non- participating physicians. The provisions of section 1848(g) of such Act (42 U.S.C. 1395w-4(g)) and section 1842(b)(18) of such Act (42 U.S.C. 1395u(b)(18)) shall apply. Payment for such service shall be increased annually by the update factor for physicians' services determined under section 1848(d) of such Act (42 U.S.C. 1395w- 4(d)).
(c) Supplemental Report.--Not later than January 1, 1999, the Secretary shall submit a report to Congress which shall contain a detailed analysis of-- (1) how telemedicine and telehealth systems are expanding access to health care services; (2) the clinical efficacy and cost-effectiveness of telemedicine and telehealth applications; (3) the quality of telemedicine and telehealth services delivered; and (4) the reasonable cost of telecommunications charges incurred in practicing telemedicine and telehealth in rural, frontier, and underserved areas.
(d) Expansion of Telehealth Services for Certain Medicare Beneficiaries.-- (1) In general.--Not later than January 1, 1999, the Secretary shall submit a report to Congress that examines the possibility of making payments from the Federal Supplementary Medical Insurance Trust Fund under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) for professional consultation via telecommunications systems with such a physician or practitioner furnishing a service for which payment may be made under such part to a beneficiary described in paragraph (2), notwithstanding that the individual physician or practitioner providing the professional consultation is not at the same location as the physician or practitioner furnishing the service to that beneficiary.
(2) Beneficiary described.--A beneficiary described in this paragraph is a beneficiary under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) who does not reside in a rural area (as so defined) that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)), who is homebound or nursing homebound, and for whom being transferred for health care services imposes a serious hardship.
(3) Report.--The report described in paragraph (1) shall contain a detailed statement of the potential costs and savings to the medicare program of making the payments described in that paragraph using various reimbursement schemes.
(a) Purpose and Authorization.-- (1) In general.--Not later than 9 months after the date of enactment of this section, the Secretary of Health and Human Services shall provide for a demonstration project described in paragraph (2).
(2) Description of project.-- (A) In general.--The demonstration project described in this paragraph is a single demonstration project to use eligible health care provider telemedicine networks to apply high-capacity computing and advanced networks to improve primary care (and prevent health care complications) to medicare beneficiaries with diabetes mellitus who are residents of medically underserved rural areas or residents of medically underserved inner-city areas.
(B) Medically underserved defined.--As used in this paragraph, the term medically underserved" has the meaning given such term in section 330(b)(3) of the Public Health Service Act (42 U.S.C. 254b(b)(3)).
(3) Waiver.--The Secretary shall waive such provisions of title XVIII of the Social Security Act as may be necessary to provide for payment for services under the project in accordance with subsection (d).
(4) Duration of project.--The project shall be conducted over a 4-year period.
(b) Objectives of Project.--The objectives of the project include the following: (1) Improving patient access to and compliance with appropriate care guidelines for individuals with diabetes mellitus through direct telecommunications link with information networks in order to improve patient quality-of-life and reduce overall health care costs.
(2) Developing a curriculum to train health professionals (particularly primary care health professionals) in the use of medical informatics and telecommunications.
(3) Demonstrating the application of advanced technologies, such as video-conferencing from a patient's home, remote monitoring of a patient's medical condition, interventional informatics, and applying individualized, automated care guidelines, to assist primary care providers in assisting patients with diabetes in a home setting.
(4) Application of medical informatics to residents with limited English language skills.
(5) Developing standards in the application of telemedicine and medical informatics.
(6) Developing a model for the cost-effective delivery of primary and related care both in a managed care environment and in a fee-for-service environment.
(c) Eligible Health Care Provider Telemedicine Network Defined.-- For purposes of this section, the term eligible health care provider telemedicine network" means a consortium that includes at least one tertiary care hospital (but no more than 2 such hospitals), at least one medical school, no more than 4 facilities in rural or urban areas, and at least one regional telecommunications provider and that meets the following requirements: (1) The consortium is located in an area with a high concentration of medical schools and tertiary care facilities in the United States and has appropriate arrangements (within or outside the consortium) with such schools and facilities, universities, and telecommunications providers, in order to conduct the project.
(2) The consortium submits to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a description of the use to which the consortium would apply any amounts received under the project and the source and amount of non-Federal funds used in the project.
(3) The consortium guarantees that it will be responsible for payment for all costs of the project that are not paid under this section and that the maximum amount of payment that may be made to the consortium under this section shall not exceed the amount specified in subsection (d)(3).
(d) Coverage as Medicare Part B Services.-- (1) In general.--Subject to the succeeding provisions of this subsection, services related to the treatment or management of (including prevention of complications from) diabetes for medicare beneficiaries furnished under the project shall be considered to be services covered under part B of title XVIII of the Social Security Act.
(2) Payments.-- (A) In general.--Subject to paragraph (3), payment for such services shall be made at a rate of 50 percent of the costs that are reasonable and related to the provision of such services. In computing such costs, the Secretary shall include costs described in subparagraph (B), but may not include costs described in subparagraph (C).
(B) Costs that may be included.--The costs described in this subparagraph are the permissible costs (as recognized by the Secretary) for the following: (i) The acquisition of telemedicine equipment for use in patients' homes (but only in the case of patients located in medically underserved areas).
(ii) Curriculum development and training of health professionals in medical informatics and telemedicine.
(iii) Payment of telecommunications costs (including salaries and maintenance of equipment), including costs of telecommunications between patients' homes and the eligible network and between the network and other entities under the arrangements described in subsection (c)(1).
(iv) Payments to practitioners and providers under the medicare programs.
(C) Costs not included.--The costs described in this subparagraph are costs for any of the following: (i) The purchase or installation of transmission equipment (other than such equipment used by health professionals to deliver medical informatics services under the project).
(ii) The establishment or operation of a telecommunications common carrier network.
(iii) Construction (except for minor renovations related to the installation of reimbursable equipment) or the acquisition or building of real property.
(3) Limitation.--The total amount of the payments that may be made under this section shall not exceed $30,000,000 for the period of the project (described in subsection (a)(4)).
(4) Limitation on cost-sharing.--The project may not impose cost sharing on a medicare beneficiary for the receipt of services under the project in excess of 20 percent of the costs that are reasonable and related to the provision of such services.
(e) Reports.--The Secretary shall submit to the Committee on Ways and Means and the Committee Commerce of the House of Representatives and the Committee on Finance of the Senate interim reports on the project and a final report on the project within 6 months after the conclusion of the project. The final report shall include an evaluation of the impact of the use of telemedicine and medical informatics on improving access of medicare beneficiaries to health care services, on reducing the costs of such services, and on improving the quality of life of such beneficiaries.
(f) Definitions.--For purposes of this section: (1) Interventional informatics.--The term interventional informatics" means using information technology and virtual reality technology to intervene in patient care.
(2) Medical informatics.--The term medical informatics" means the storage, retrieval, and use of biomedical and related information for problem solving and decision-making through computing and communications technologies.
(3) Project.--The term project" means the demonstration project under this section.