(a) This Code section shall be known and may be cited as the "Rural Hospital Authorities Assistance Act."

(b) The General Assembly finds that hospital authorities are created under Code Section 31-7-72 in and for each county and municipal corporation of the state in order to promote public health goals of the state. The General Assembly further finds that many hospitals owned or operated by hospital authorities in rural counties are in desperate financial straits. In order to preserve the availability of primary health care services provided by such hospitals to residents of rural counties, the General Assembly has determined that a program of state grants is necessary and recommends funds be made available to such hospitals. These grants will be conditioned upon those hospitals continuing to furnish essential health care services to residents in their areas of operation as well as engaging in the long-range planning and any restructuring which may be required for those hospitals to survive by devising cost-effective and efficient health care systems for meeting local health care needs.

(c) As used in this Code section, the term:

(1) "Department of Community Health" means the Department of Community Health created under Chapter 5A of this title.

(2) "Hospital" means an institution which has a permit as a hospital issued under this chapter.

(3) "Rural county" means a county having a population of less than 35,000 according to the United States decennial census of 1990 or any future such census.

(4) "Rural hospital" means a hospital owned or operated by a hospital authority, which hospital has been certified by the Department of Community Health as:

(A) Being located in a rural county;

(B) Participating in both Medicaid and medicare and accepting both Medicaid and medicare patients;

(C) Providing health care services to indigent patients; and

(D) Maintaining a 24 hour emergency room.

(d) A rural hospital may apply for a grant available under subsection (e) of this Code section if it has been certified by the Department of Community Health as:

(1) A rural hospital;

(2) Having submitted a grant application which includes:

(A) A problem statement indicating the problem the rural hospital proposes to solve with the grant funds;

(B) The goals of the proposed solution; (C) The organizational structure, financial system, and facilities that are essential to the proposed solution;

(D) The projected longevity of the proposed solution after the grant funds are expended;

(E) Evidence of collaboration with other community health care providers in achieving the proposed solution;

(F) Evidence that funds for the proposed solution are not available from another source;

(G) Evidence that the grant funds would assist in returning the hospital to an economically stable condition or that any plan for closure or realignment of services involves development of innovative alternatives for the discontinued services;

(H) Evidence of a satisfactory record-keeping system to account for grant fund expenditures within the rural county;

(I) A community health survival plan describing how the plan was developed, the goals of the plan, the links with existing health care providers under the plan, the implementation process including quantification of indicators of the hospital's financial well-being, measurable outcome targets, and the current condition of such hospital; and

(J) Such additional evidence as the Department of Community Health may require to demonstrate the feasibility of the proposed solution for which grant funds are sought.

(e) Notwithstanding the provisions of Code Section 31-7-94, the department is authorized to make grants to rural hospitals certified as meeting the requirements of subsection (d) of this Code section. Such grants may be for any of the following purposes:

(1) Infrastructure development, including, without being limited to, facility renovation or equipment acquisition; provided, however, that the amount granted to any qualified hospital may not exceed the expenditure thresholds that would constitute a new institutional health service requiring a certificate of need under Chapter 6 of this title and the grant award may be conditioned upon obtaining local matching funds;

(2) Strategic planning, including, without being limited to, strategies for personnel retention or recruitment, development of an emergency medical network, or the development of a collaborative and integrated health care delivery system with other health care providers, and the grant award may be conditioned upon obtaining local matching funds for items such as telemedicine, billing systems, and medical records. For the purposes of this paragraph, the maximum grant to any grantee shall be $200,000.00; or

(3) Nontraditional health care delivery systems, excluding operational funds and purposes for which grants may be made under paragraph (1) or (2) of this subsection. For the purposes of this paragraph, the maximum grant to any grantee shall be $1.5 million.

(f) In awarding grants under this Code section, the department may give priority to any otherwise eligible rural hospital which meets the definition of a "necessary provider" as specified in the state's "Rural Healthcare Plan" of May, 1998.

(g) The department shall adopt regulations to implement its powers and duties under this Code section. The Department of Community Health shall be authorized to certify rural hospitals as provided in subsection (d) of this Code section and shall adopt regulations to implement its powers and duties under this Code section.