[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 223 Introduced in Senate (IS)]
103d CONGRESS
1st Session
S. 223
To contain health care costs and increase access to affordable health
care, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 27 (legislative day, January 5), 1993
Mr. Cohen introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To contain health care costs and increase access to affordable health
care, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Access to
Affordable Health Care Act''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 2. Definitions.
TITLE I--MANAGED COMPETITION IN HEALTH CARE PLANS
Sec. 100. Block grant program.
Subtitle A--Health Plan Purchasing Cooperatives
Sec. 101. Establishment and organization; HPPC areas.
Sec. 102. Agreements with accountable health plans (AHPs).
Sec. 103. Agreements with employers.
Sec. 104. Enrolling individuals in accountable health plans through a
HPPC.
Sec. 105. Receipt of premiums.
Sec. 106. Coordination among HPPCs.
Subtitle B--Accountable Health Plans (AHPs)
Part 1--requirements for accountable health plans
Sec. 111. Registration process; qualifications.
Sec. 112. Specified uniform set of effective benefits.
Sec. 113. Collection and provision of standardized information.
Sec. 114. Prohibition of discrimination based on health status for
certain conditions; limitation on pre-
existing condition exclusions.
Sec. 115. Use of standard premiums.
Sec. 116. Financial solvency requirements.
Sec. 117. Grievance mechanisms; enrollee protections; written policies
and procedures respecting advance
directives; agent commissions.
Sec. 118. Additional requirements of open AHPs.
Sec. 119. Additional requirement of certain AHPs.
Part 2--preemption of state laws for accountable health plans
Sec. 120. Preemption from State benefit mandates.
Sec. 121. Preemption of State law restrictions on network plans.
Sec. 122. Preemption of State laws restricting utilization review
programs.
Subtitle C--Federal Health Board
Sec. 131. Establishment of Federal Health Board.
Sec. 132. Specification of uniform set of effective benefits.
Sec. 133. Health benefits and data standards board.
Sec. 134. Health plan standards board.
Sec. 135. Registration of accountable health plans.
Sec. 136. Specification of risk-adjustment factors.
Sec. 137. National health data system.
Sec. 138. Measures of quality of care of specialized centers of care.
Sec. 139. Report on impact of adverse selection; recommendations on
mandated purchase of coverage.
TITLE II--TAX INCENTIVES TO INCREASE HEALTH CARE ACCESS
Sec. 201. Credit for accountable health plan costs.
Sec. 202. No deduction for employer health plan expenses in excess of
accountable health plan costs.
Sec. 203. Increase in deduction for health plan premium expenses of
self-employed individuals.
Sec. 204. Deduction for health plan premium expenses of individuals.
Sec. 205. Exclusion from gross income for employer contributions to
accountable health plans.
TITLE III--OUTCOMES RESEARCH AND PRACTICE GUIDELINE DEVELOPMENT;
APPLICATION OF GUIDELINES AS LEGAL STANDARD
Sec. 301. Authorization for expansion of health services research.
Sec. 302. Treatment practice guidelines as a legal standard.
TITLE IV--COOPERATIVE AGREEMENTS BETWEEN HOSPITALS
Sec. 401. Purpose.
Sec. 402. Hospital technology and services sharing program.
TITLE V--IMPROVED ACCESS TO HEALTH CARE FOR RURAL AND UNDERSERVED AREAS
Subtitle A--Revenue Incentives for Practice in Rural Areas
Sec. 501. Revenue incentives for practice in rural areas.
Subtitle B--Public Health Service Act Provisions
Sec. 511. National health service corps.
Sec. 512. Establishment of grant program.
Sec. 513. Establishment of new program to provide funds to allow
federally qualified health centers and
other entities or organizations to provide
expanded services to medically underserved
individuals.
Sec. 514. Rural mental health outreach grants.
Sec. 515. Health professions training.
Sec. 516. Rural health extension networks.
Sec. 517. Rural managed care cooperatives.
TITLE VI--MALPRACTICE REFORM
Sec. 601. Prelitigation screening panel grants.
TITLE VII--HEALTH PROMOTION AND DISEASE PREVENTION
Sec. 701. Disease prevention and health promotion programs treated as
medical care.
Sec. 702. Worksite wellness grant program.
Sec. 703. Expanding and improving school health education.
TITLE VIII--PRESCRIPTION DRUG COST CONTAINMENT
Sec. 801. Reduction in possessions tax credit for excessive
pharmaceutical inflation.
TITLE IX--FINANCING
Sec. 901. Repeal of dollar limitation on amount of wages subject to
hospital insurance tax.
SEC. 2. DEFINITIONS.
(a) Eligibility.--As used in this Act:
(1) Eligible individual.--The term ``eligible individual''
means, with respect to a HPPC area, an individual who--
(A) is an eligible employee;
(B) is an eligible resident; or
(C) an eligible family member of an eligible
employee or eligible resident.
(2) Eligible employee.--The term ``eligible employee''
means, with respect to a HPPC area, an individual residing in
the area who is the employee of a small employer.
(3) Eligible family member.--The term ``eligible family
member'' means, with respect to an eligible employee or other
principal enrollee, an individual who--
(A)(i) is the spouse of the employee or principal
enrollee; or
(ii) is an unmarried dependent child under 22 years
of age; including--
(I) an adopted child or recognized natural
child; and
(II) a stepchild or foster child but only
if the child lives with the employee or
principal enrollee in a regular parent-child
relationship;
or such an unmarried dependent child regardless of age
who is incapable of self-support because of mental or
physical disability which existed before age 22;
(B) is a citizen or national of the United States,
an alien lawfully admitted to the United States for
permanent residence, or an alien otherwise lawfully
residing permanently in the United States under color
of law; and
(C) with respect to an eligible resident, is not a
medicare-eligible individual.
(4) Eligible resident.--
(A) In general.--The term ``eligible resident''
means, with respect to a HPPC area, an individual who
is not an eligible employee, is residing in the area,
and is a citizen or national of the United States, an
alien lawfully admitted for permanent residence, and an
alien otherwise permanently residing in the United
States under color of law.
(B) Exclusion of certain individuals offered
coverage through a large employer.--The term ``eligible
resident'' does not include an individual who--
(i) is covered under an AHP pursuant to an
offer made under section 105(b)(1)(A); or
(ii) could be covered under an AHP as the
principal enrollee pursuant to such an offer if
such offer had been accepted.
(C) Treatment of medicare beneficiaries.--The term
``eligible resident'' does not include a medicare-
eligible beneficiary.
(5) Enrollee unit.--The term ``enrollee unit'' means one
unit in the case of coverage on an individual basis or in the
case of coverage on a family basis.
(6) Medicare beneficiary.--The term ``medicare
beneficiary'' means an individual who is entitled to benefits
under part A of title XVIII of the Social Security Act,
including an individual who is entitled to such benefits
pursuant to an enrollment under section 1818 or 1818A of such
Act.
(7) Medicare-eligible individual.--The term ``medicare-
eligible individual'' means an individual who--
(A) is a medicare beneficiary; or
(B) is not a medicare beneficiary but is eligible
to enroll under part A or part B of title XVIII of the
Social Security Act.
(b) Abbreviations.--As used in this Act:
(1) AHP; accountable health plan.--The terms ``accountable
health plan'' and ``AHP'' mean a health plan registered with
the Board under section 111(a).
(2) Board.--The term ``Board'' means the Federal Health
Board established under subtitle C of title I.
(3) HPPC; health plan purchasing cooperative.--The terms
``health plan purchasing cooperative'' and ``HPPC'' mean a
health plan purchasing cooperative established under subtitle A
of title I.
(4) Closed and open plans.--
(A) Closed.--A plan is `closed' if the plan is
limited by structure or law to a particular employer or
industry or is organized on behalf of a particular
group. A plan maintained pursuant to one or more
collective bargaining agreements between one or more
employee organizations and one or more employers shall
be considered to be a closed plan.
(B) Open.--A plan is ``open'' if the plan is not
closed (within the meaning of subparagraph (A)).
(c) Other Terms.--As used in this Act:
(1) Health plan.--The term ``health plan'' means a plan
that provides health benefits, whether directly, through
insurance, or otherwise, and includes a policy of health
insurance, a contract of a service benefit organization, or a
membership agreement with a health maintenance organization or
other prepaid health plan, and also includes an employee
welfare benefit plan or a multiple employer welfare plan (as
such terms are defined in section 3 of the Employee Retirement
Income Security Act of 1974).
(2) Small employer.--
(A) In general.--Subject to subparagraph (B), the
term ``small employer'' means an employer that normally
employed fewer than 100 employees during a typical
business day in the previous year.
(B) Special rule for large employers.--Subject to
subparagraph (C), the Board shall provide a procedure
by which, in the case of an employer that is not a
small employer but normally employs fewer than 100
employees in a HPPC area (or other locality identified
by the Board) during a typical business day, the
employer, upon application, would be considered to be a
small employer with respect to such employees in the
HPPC area (or other locality). Such procedure shall be
designed so as to prevent the adverse selection of
employees with respect to which the previous sentence
is applied.
(C) State election.--Subject to section 101(a)(3),
a State may by law, with respect to employers in the
State, substitute for ``100'' in subparagraphs (A) and
(B) any greater number (not to exceed 10,001), so long
as such number is applied uniformly to all employers in
a HPPC area.
(3) HPPC standard premium amount.--The term ``HPPC standard
premium amount'' means, with respect to an AHP offered by a
HPPC, the sum of--
(A) the standard premium amount established by the
AHP under section 115, and
(B) the HPPC overhead amount established under
section 104(a)(3).
(4) Premium class.--The term ``premium class'' means a
class established under section 115(a)(2).
(5) State.--The term ``State'' includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
(6) Type of enrollment.--There are 4 ``types of
enrollment'':
(A) Coverage only of an individual (referred to in
this Act as enrollment ``on an individual basis'').
(B) Coverage of an individual and the individual's
spouse.
(C) Coverage of an individual and one child.
(D) Coverage of an individual and more than one
eligible family member.
The types of coverage described in subparagraphs (B) through
(D) are collectively referred to in this Act as enrollment ``on
a family basis''.
(7) Uniform set of effective benefits.--The term ``uniform
set of effective benefits'' means, for a year, such set of
benefits as specified by the Board under section 132(a).
TITLE I--MANAGED COMPETITION IN HEALTH CARE PLANS
SEC. 100. BLOCK GRANT PROGRAM.
(a) In General.--The Secretary shall award grants to States to
enable such State to defray the costs associated with the
implementation and administration of the requirements of this title in
such States.
(b) Amount of Grants.--The amount of a grant awarded to a State
under this section shall be determined by the Secretary according to a
formula developed by the Secretary to take into consideration the
population, health care availability, and geographic make-up of the
State as compared to other States.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to enable the Secretary to award grants under subsection
(a), such sums as may be necessary for each fiscal year.
Subtitle A--Health Plan Purchasing Cooperatives
SEC. 101. ESTABLISHMENT AND ORGANIZATION; HPPC AREAS.
(a) HPPC Areas.--
(1) In general.--For purposes of carrying out this title,
subject to paragraphs (2) and (3), each State shall be
considered a HPPC area.
(2) Alternative, intrastate areas.--Each State may provide
for the division of the State into HPPC areas so long as--
(A) all portions of each metropolitan statistical
area in a State are within the same HPPC area; and
(B) the number of individuals residing within a
HPPC area is not less than 100,000.
(3) Alternative, interstate areas.--In accordance with
rules established by the Board, one or more contiguous States
may provide for the establishment of a HPPC area that includes
adjoining portions of the States so long as such area, if it
includes any part of a metropolitan statistical area, includes
all of such area. In the case of a HPPC serving a multi-state
area, section 2(c)(2)(C) shall only apply to the area if all
the States encompassed in the area agree to the number to be
substituted.
(b) Establishment of HPPCs.--
(1) In general.--Each State shall provide, by legislation
or otherwise, for the establishment by not later than July 1,
1994, as a not-for-profit corporation, with respect to each
HPPC area (specified under subsection (a)) of a health plan
purchasing cooperative (each in this subtitle referred to as a
``HPPC'').
(2) Single organization serving multiple hppc areas.--
Nothing in this subsection shall be construed as preventing--
(A) a single corporation from being the HPPC for
more than one HPPC area; or
(B) a State from coordinating, through a single
entity, the activities of one or more HPPCs in the
State.
(3) Interstate hppc areas.--HPPCs with respect to
interstate areas specified under subsection (a)(3) shall be
established in accordance with rules of the Board.
(c) Board of Directors.--Each HPPC shall be governed by a Board of
Directors appointed by the Governor or other chief executive officer of
the State (or as otherwise provided under State law or by the Board in
the case of a HPPC described in subsection (b)(3)).
(d) Duties of HPPCs.--Each HPPC shall--
(1) enter into agreements with accountable health plans
under section 102;
(2) enter into agreements with small employers under
section 103;
(3) enroll individuals under accountable health plans, in
accordance with section 104;
(4) receive and forward adjusted premiums, in accordance
with section 105, including the reconciliation of low-income
assistance among accountable health plans;
(5) provide for coordination with other HPPCs, in
accordance with section 106; and
(6) carry out other functions provided for under this
title.
SEC. 102. AGREEMENTS WITH ACCOUNTABLE HEALTH PLANS (AHPS).
(a) Agreements.--
(1) Open ahps.--Each HPPC for a HPPC area shall enter into
an agreement under this section with each open accountable
health plan registered with the Board under subtitle B, that
serves residents of the area. Each such agreement under this
section, between an open AHP and a HPPC shall include (as
specified by the Board) provisions consistent with the
requirements of the succeeding subsections of this section.
Except as provided in paragraph (3)(A), a HPPC may not refuse
to enter into such an agreement with an open AHP which is
registered with the Board under subtitle B.
(2) Closed ahps.--Each HPPC for a HPPC area shall enter
into a special agreement under this paragraph with each closed
AHP that serves residents of the area, in order to carry out
subsection (e). Except as otherwise specifically provided, any
reference in this Act to an agreement under this section shall
not be considered to be a reference to an agreement under this
paragraph.
(3) Termination of agreement.--In accordance with
regulations of the Board--
(A) the HPPC may terminate an agreement under
paragraph (1) if the AHP's registration under subtitle
B is terminated or for other good cause shown; and
(B) the AHP may terminate either such agreement
only upon sufficient notice in order to provide for the
orderly enrollment of enrollees under other AHPs.
The Board shall establish a process for the termination of
agreements under this paragraph.
(b) Offer of Enrollment of Individuals.--
(1) In general.--Under an agreement under this section
between an AHP and a HPPC, the HPPC shall offer, on behalf of
the AHP, enrollment in the AHP to eligible individuals (as
defined in section 2(a)(1)) at the applicable monthly premium
rates (specified under section 105(a)).
(2) Timing of offer.--The offer of enrollment shall be
available--
(A) to eligible individuals who are employees of
small employers, during the 30-day period beginning on
the date of commencement of employment; and
(B) to other eligible individuals, at such time
(including an annual open enrollment period specified
by the Board) as the HPPC shall specify, consistent
with section 104(b).
(c) Receipt of Gross Premiums.--
(1) In general.--Under an agreement under this section
between a HPPC and an AHP, payment of premiums shall be made,
by individuals or employers on their behalf, directly to the
HPPC for the benefit of the AHP.
(2) Timing of payment of premiums.--Premiums shall be
payable on a monthly basis (or, at the option of an eligible
individual described in section 2(a)(2)(B), on a quarterly
basis). The HPPC may provide for penalties and grace periods
for late payment.
(3) AHPs retain risk of nonpayment.--Nothing in this
subsection shall be construed as placing upon a HPPC any risk
associated with failure to make prompt payment of premiums
(other than the portion of the premium representing the HPPC
overhead amount). Each eligible individual who enrolls with an
AHP through the HPPC is liable to the AHP for premiums.
(d) Forwarding of Adjusted Premiums.--
(1) In general.--Under an agreement under this section
between an AHP and a HPPC, subject to section 115(b), the HPPC
shall forward to each AHP in which an eligible individual has
been enrolled an amount equal to the sum of--
(A) the standard premium rate (established under
section 115) received for type of enrollment, and
(B) the product of--
(i) the lowest standard premium rate
offered by an open AHP for the type of
enrollment; and
(ii) a risk-adjustment factor (determined
and adjusted in accordance with section
136(b)).
(2) Payments.--Payments shall be made by the HPPC under
this subsection within a period (specified by the Board and not
to exceed 7 days) after receipt of the premium from the
employer of the eligible individual or the eligible individual,
as the case may be.
(3) Adjustments for differences in nonpayment rates.--In
accordance with rules established by the Board, each agreement
between an AHP and a HPPC under this section shall provide
that, if a HPPC determines that the rates of nonpayment of
premiums during grace periods established under subsection
(c)(2) vary appreciably among AHPs, the HPPC shall provide for
such adjustments in the payments made under this subsection as
will place each AHP in the same position as if the rates of
nonpayment were the same.
SEC. 103. AGREEMENTS WITH EMPLOYERS.
(a) In General.--Each HPPC for a HPPC area shall offer each small
employer that employs individuals in the area the opportunity to enter
into an agreement under this section. Each agreement under this
section, between an employer and a HPPC shall include (as specified by
the Board) provisions consistent with the requirements specified in the
succeeding subsections of this section.
(b) Forwarding Information on Eligible Employees.--
(1) In general.--Under an agreement under this section
between a small employer and a HPPC, the employer must forward
to the appropriate HPPC the name and address (and other
identifying information required by the HPPC) of each employee
(including part-time and seasonal employees).
(2) Appropriate hppc.--In this subsection, the term
``appropriate HPPC'' means the HPPC for the principal place of
business of the employer or (at the option of an employee) the
HPPC serving the place of residence of the employee.
(c) Payroll Deduction.--
(1) In general.--Under an agreement under this section
between a small employer and a HPPC, if the HPPC indicates to
the employer that an eligible employee is enrolled in an AHP
through the HPPC, the employer shall provide for the deduction,
from the employee's wages or other compensation, of the amount
of the premium due (less any employer contribution). In the
case of an employee who is paid wages or other compensation on
a monthly or more frequent basis, an employer shall not be
required to provide for payment of amounts to a HPPC other than
at the same time at which the amounts are deducted from wages
or other compensation. In the case of an employee who is paid
wages or other compensation less frequently than monthly, an
employer may be required to provide for payment of amounts to a
HPPC on a monthly basis.
(2) Additional premiums.--If the amount withheld under
paragraph (1) is not sufficient to cover the entire cost of the
premiums, the employee shall be responsible for paying directly
to the HPPC the difference between the amount of such premiums
and the amount withheld.
(d) Limited Employer Obligations.--Nothing in this section shall be
construed as--
(1) requiring an employer to provide directly for
enrollment of eligible employees under an accountable health
plan or other health plan;
(2) requiring the employer to make, or preventing the
employer from making, information about such plans available to
such employees; or
(3) requiring the employer to make, or preventing the
employer from making, an employer contribution for coverage of
such individuals under such a plan.
SEC. 104. ENROLLING INDIVIDUALS IN ACCOUNTABLE HEALTH PLANS THROUGH A
HPPC.
(a) In General.--Each HPPC shall offer in accordance with this
section eligible individuals the opportunity to enroll in an AHP for
the HPPC area in which the individual resides.
(b) Enrollment Process.--
(1) In general.--Each HPPC shall establish an enrollment
process in accordance with rules established by the Board
consistent with this subsection.
(2) Initial enrollment period.--Each eligible individual,
at the time the individual first becomes an eligible individual
in a HPPC area of a HPPC, have an initial enrollment period (of
not less than 30 days) in which to enroll in an AHP.
(3) General enrollment period.--Each HPPC shall establish
an annual period, of not less than 30 days, during which
eligible individuals may enroll in an AHP or change in the AHP
in which the individual is enrolled.
(4) Special enrollment periods.--In the case of individuals
who--
(A) through marriage, divorce, birth or adoption of
a child, or similar circumstances, experience a change
in family composition; or
(B) experience a change in employment status
(including a significant change in the terms and
conditions of employment);
each HPPC shall provide for a special enrollment period in
which the individual is permitted to change the individual or
family basis of coverage or the AHP in which the individual is
enrolled. The circumstances under which such special enrollment
periods are required and the duration of such periods shall be
specified by the Board.
(5) Transitional enrollment period.--Each HPPC shall
provide for a special transitional enrollment period (during a
period beginning in the months of October through December of
1994 as specified by the Board) during which eligible
individuals may first enroll.
(c) Distribution of Comparative Information.--Each HPPC shall
distribute, to eligible individuals and employers, information, in
comparative form, on the prices, outcomes, enrollee satisfaction, and
other information pertaining to the quality of the different AHPs for
which it is offering enrollment. Each HPPC also shall make such
information available to other interested persons.
(d) Period of Coverage.--
(1) Initial enrollment period.--In the case of an eligible
individual who enrolls with an AHP through a HPPC during an
initial enrollment period, coverage under the plan shall begin
on such date (not later than the first day of the first month
that begins at least 15 days after the date of enrollment) as
the Board shall specify.
(2) General enrollment periods.--In the case of an eligible
individual who enrolls with an AHP through a HPPC during a
general enrollment period, coverage under the plan shall begin
on the 1st day of the 1st month beginning at least 15 days
after the end of such period.
(3) Special enrollment periods.--
(A) In general.--In the case of an eligible
individual who enrolls with an AHP during a special
enrollment period described in subsection (b)(4),
coverage under the plan shall begin on such date (not
later than the first day of the first month that begins
at least 15 days after the date of enrollment) as the
Board shall specify, except that coverage of family
members shall begin as soon as possible on or after the
date of the event that gives rise to the special
enrollment period.
(B) Transitional special enrollment period.--In the
case of an eligible individual who enrolls with an AHP
during the transitional special enrollment period
described in subsection (b)(5), coverage under the plan
shall begin on January 1, 1995.
(4) Minimum period of enrollment.--In order to avoid
adverse selection, each HPPC may require, consistent with rules
of the National Board, that enrollments with AHPs be for not
less than a specified minimum enrollment period (with
exceptions permitted for such exceptional circumstances as the
Board may recognize).
SEC. 105. RECEIPT OF PREMIUMS.
(a) Enrollment Charge.--The amount charged by a HPPC for coverage
under an AHP in a HPPC area is equal to the sum of--
(1) the standard premium rate established by the AHP under
section 115 for such coverage; and
(2) the HPPC overhead amount established under subsection
(b)(3) for enrollment of individuals in the HPPC area.
(b) HPPC Overhead Amount.--
(1) HPPC budget.--Each HPPC shall establish a budget for
each year for each HPPC area in accordance with regulations
established by the Board.
(2) HPPC overhead percentage.--The HPPC shall compute for
each HPPC area an overhead percentage which, when applied to
the standard premium amount for individual coverage for each
enrollee unit, will provide for revenues equal to the budget
for the HPPC area for the year. Such percentage may in no case
exceed 5 percentage points.
(3) HPPC overhead amount.--The HPPC overhead amount for
enrollment, whether on an individual or family basis, in an AHP
for a HPPC area for a month is equal to the applicable HPPC
overhead percentage (computed under paragraph (2)) multiplied
by the standard premium amount for individual coverage under
the AHP for the month.
SEC. 106. COORDINATION AMONG HPPCS.
(a) In General.--The Board shall establish rules consistent with
this section for coordination among HPPCs in cases where small
employers are located in one HPPC area and their employees reside in a
different HPPC area (and are eligible for enrollment with AHPs located
in the other area).
(b) Coordination Rules.--Under the rules established under
subsection (a)(1)--
(1) HPPC for employer.--The HPPC for the principal place of
business of a small employer shall be responsible--
(A) for providing information to the employer's
employees on AHPs for areas in which employees reside;
(B)(i) for enrolling employees under the AHP
selected (even if the AHP selected is not in the same
HPPC area as the HPPC) and (ii) if the AHP chosen is
not in the same HPPC area as the HPPC, for forwarding
the enrollment information to the HPPC for the area in
which the AHP selected is located; and
(C) in the case of premiums to be paid through
payroll deduction, to receive such premiums and forward
them to the HPPC for the area in which the AHP selected
is located.
(2) HPPC for employee residence.--The HPPC for the HPPC
area in which an employee resides shall be responsible for
providing other HPPCs with information concerning AHPs being
offered in other HPPC areas within the State.
Subtitle B--Accountable Health Plans (AHPs)
Part 1--Requirements for Accountable Health Plans
SEC. 111. REGISTRATION PROCESS; QUALIFICATIONS.
(a) In General.--The Board shall provide a process whereby a health
plan (as defined in section 2(c)(1)) may be registered with the Board
by its sponsor as an accountable health plan.
(b) Qualifications.--In order to be eligible to be registered, a
plan must--
(1) provide, in accordance with section 112, for coverage
of the uniform set of effective benefits specified by the
Board;
(2) provide, in accordance with section 113, for the
collection and reporting to the Board of certain information
regarding its enrollees and provision of services;
(3) not discriminate in enrollment or benefits, as required
under section 114;
(4) establish standard premiums for the uniform set of
effective benefits, in accordance with section 115;
(5) meet financial solvency requirements, in accordance
with section 116;
(6) provide for effective grievance procedures and restrict
certain physician incentive plans, in accordance with section
117; and
(7) in the case of an open plan (as defined in section
2(b)(4)(B)), meet certain additional requirements under section
118 (relating to acceptance of enrollees and participation as a
plan under the medicare program under the Social Security Act
and under the Federal employees health benefits program).
(c) Minimum Size for Closed Plans.--No plan may be registered as a
closed AHP under this section unless the plan covers at least a number
of employees greater than the applicable number of employees specified
in section 2(c)(2).
(d) Medicare Requirement.--No plan may be registered as an AHP
under this section unless the plan--
(1) meets the requirement of section 118(c); or
(2) provides for payment of the medicare adjustment amount
under section 119.
SEC. 112. SPECIFIED UNIFORM SET OF EFFECTIVE BENEFITS.
(a) Benefits.--The Board shall not accept the registration of a
health plan as an accountable health plan unless, subject to subsection
(b), the plan--
(1) offers only the uniform set of effective benefits,
specified by Board under section 132(a);
(2) has entered into arrangements with a sufficient number
and variety of providers to provide for its enrollees the
uniform set of effective benefits without imposing cost-sharing
in excess of the cost-sharing described in paragraph (3);
(3)(A) provides, subject to subsection (c), for imposition
of uniform cost-sharing (such as deductibles and copayments),
specified under such subsection as part of such set of
benefits; and
(B) does not permit providers participating in the plan
under paragraph (2) to charge for covered services amounts in
excess of such cost-sharing; and
(4) provides, in the case of individuals covered under more
than one accountable health plan, for coordination of coverage
under such plans in an equitable manner.
(b) Treatment of Additional Benefits.--
(1) In general.--Subject to paragraph (2), subsection (a)
shall not be construed as preventing an AHP from offering
benefits in addition to the uniform set of effective benefits
or for reducing the cost-sharing below the uniform cost-
sharing, if such additional benefits or reductions in cost-
sharing are offered, and priced, separately from the benefits
described in subsection (a).
(2) No duplicative benefits.--An AHP may not offer under
paragraph (1) any additional benefits that have the effect of
duplicating the benefits required under subsection (a).
SEC. 113. COLLECTION AND PROVISION OF STANDARDIZED INFORMATION.
(a) Provision of Information.--
(1) In general.--Each AHP must provide the Board (at a
time, not less frequently than annually, and in an electronic,
standardized form and manner specified by the Board) such
information as the Board determines to be necessary, consistent
with this subsection and section 137, to evaluate the
performance of the AHP in providing the uniform set of
effective benefits to enrollees.
(2) Information to be included.--Subject to paragraph (3),
information to be reported under this subsection shall include
at least the following:
(A) Information on the characteristics of enrollees
that may affect their need for or use of health
services.
(B) Information on the types of treatments and
outcomes of treatments with respect to the clinical
health, functional status, and well-being of enrollees.
(C) Information on enrollee satisfaction, based on
standard surveys prescribed by the Board.
(D) Information on health care expenditures, volume
and prices of procedures, and use of specialized
centers of care (for which information is submitted
under section 138).
(E) Information on the flexibility permitted by
plans to enrollees in their selection of providers.
(3) Special treatment.--The Board may waive the provision
of such information under paragraph (2), or require such other
information, as the Board finds appropriate in the case of
newly established AHP for which such information is not
available.
(b) Conditioning Certain Provider Payments.--
(1) In general.--In order to assure the collection of all
information required from the direct providers of services for
which benefits are available through an AHP, each AHP may not
provide payment for services (other than emergency services)
furnished by a provider to meet the uniform set of effective
benefits unless the provider has given the AHP (or has given
directly to the National Board) standard information (specified
by the Board) respecting the services.
(2) Forwarding information.--If information under paragraph
(1) is given to the AHP, the AHP is responsible for forwarding
the information to the Board.
SEC. 114. PROHIBITION OF DISCRIMINATION BASED ON HEALTH STATUS FOR
CERTAIN CONDITIONS; LIMITATION ON PRE-EXISTING CONDITION
EXCLUSIONS.
(a) In General.--Except as provided under subsection (b), an AHP
may not deny, limit, or condition the coverage under (or benefits of)
the plan based on the health status, claims experience, receipt of
health care, medical history, or lack of evidence of insurability, of
an individual.
(b) Treatment of Preexisting Condition Exclusions for Services.--
(1) In general.--Subject to the succeeding provisions of
this subsection, an AHP may exclude coverage with respect to
services related to treatment of a preexisting condition, but
the period of such exclusion may not exceed 6 months beginning
on the date of coverage under the plan. The exclusion of
coverage shall not apply to services furnished to newborns and
to pregnant women.
(2) Crediting of previous coverage.--
(A) In general.--An AHP shall provide that if an
enrollee is in a period of continuous coverage (as
defined in subparagraph (B)(i)) as of the date of
initial coverage under such plan, any period of
exclusion of coverage with respect to a preexisting
condition for such services or type of services shall
be reduced by 1 month for each month in the period of
continuous coverage.
(B) Definitions.--As used in this paragraph:
(i) Period of continuous coverage.--The
term ``period of continuous coverage'' means
the period beginning on the date an individual
is enrolled under an AHP (or, before July 1,
1994, under any health plan that provides
benefits with respect to such services) and
ends on the date the individual is not so
enrolled for a continuous period of more than 3
months.
(ii) Preexisting condition.--The term
``preexisting condition'' means, with respect
to coverage under an AHP, a condition which has
been diagnosed or treated during the 3-month
period ending on the day before the first date
of such coverage (without regard to any waiting
period).
(3) Limitation.--This subsection shall not apply to
treatment which is not within the uniform set of effective
benefits.
SEC. 115. USE OF STANDARD PREMIUMS.
(a) Standard Premiums for Open AHPs.--
(1) In general.--Subject to subsection (b), each open AHP
shall establish a standard premium for the uniform set of
effective benefits within each HPPC area in which the plan is
offered. The amount of premium applicable for all individuals
within a premium class (established under paragraph (2)) is the
standard premium amount multiplied by the premium class factor
specified by the Board for that class under paragraph (2)(B).
Within a HPPC area for individuals within a premium class, the
standard premium for all individuals in the class shall be the
same.
(2) Premium classes.--
(A) In general.--The Board shall establish premium
classes--
(i) based on types of enrollment (described
in section 2(c)(6)); and
(ii) within each type of enrollment, based
on age of principal enrollee.
In carrying out clause (ii), the Board shall establish
reasonable age bands within which premium amounts will
not vary for a type of enrollment.
(B) Premium class factors.--
(i) In general.--For each premium class
established under subparagraph (A), the Board
shall establish a premium class factor that
reflects, subject to clause (ii), the relative
actuarial value of benefits for that class
compared to the actuarial value of benefits for
an average class.
(ii) Limit on variation in premium class
factors.--The highest premium class factor may
not exceed twice the lowest premium class
factor and the weighted average of the premium
class factors shall be 1.
(3) Methodology.--Standard premiums are subject to
adjustment in accordance with section 102(d)(1).
(b) Limitation on Premium Increases.--
(1) Board action.--The Board shall establish annual limits
on the permissible percentage rate of increase for premiums
with respect to AHP's providing the uniform set of effective
benefits.
(2) Increases.--Annual increases in premiums for an AHP may
not exceed the percentage limit established by the Board under
paragraph (1).
SEC. 116. FINANCIAL SOLVENCY REQUIREMENTS.
(a) Solvency Protection.--
(1) For insured plans.--In the case of an AHP that is an
insured plan (as defined by the Board) and is issued in a
State, in order for the plan to be registered under this
subtitle the Board must find that the State has established
satisfactory protection of enrollees with respect to potential
insolvency.
(2) For other plans.--In the case of an AHP that is not an
insured plan, the Board may require the plan to provide for
such bond or provide other satisfactory assurances that
enrollees under the plan are protected with respect to
potential insolvency of the plan.
(b) Protection Against Provider Claims.--In the case of a failure
of an AHP to make payments with respect to the uniform set of basic
benefits, under standards established by the Board, an individual who
is enrolled under the plan is not liable to any health care provider or
practitioner with respect to the provision of health services within
such uniform set for payments in excess of the amount for which the
enrollee would have been liable if the plan were to have made payments
in a timely manner.
SEC. 117. GRIEVANCE MECHANISMS; ENROLLEE PROTECTIONS; WRITTEN POLICIES
AND PROCEDURES RESPECTING ADVANCE DIRECTIVES; AGENT
COMMISSIONS.
(a) Effective Grievance Procedures.--Each AHP shall provide for
effective procedures for hearing and resolving grievances between the
plan and individuals enrolled under the plan, which procedures meet
standards specified by the Board.
(b) Restriction on Certain Physician Incentive Plans.--
(1) In general.--A health plan may not be registered as an
AHP if it operates a physician incentive plan (as defined in
paragraph (2)) unless the requirements specified in clauses (i)
through (iii) of section 1876(i)(8)(A) of the Social Security
Act are met (in the same manner as they apply to eligible
organizations under section 1876 of such Act).
(2) Physician incentive plan defined.--In this subsection,
the term ``physician incentive plan'' means any compensation or
other financial arrangement between the AHP and a physician or
physician group that may directly or indirectly have the effect
of reducing or limiting services provided with respect to
individuals enrolled under the plan.
(c) Written Policies and Procedures Respecting Advance
Directives.--A health plan may not be registered as an AHP unless the
plan meets the requirements of section 1866(f) of the Social Security
Act (relating to maintaining written policies and procedures respecting
advance directives), insofar as such requirements would apply to the
plan if the plan were an eligible organization.
(d) Payment of Agent Commissions.--An AHP--
(1) may pay a commission or other remuneration to an agent
or broker in marketing the plan to individuals or groups; but
(2) may not vary such remuneration based, directly or
indirectly, on the anticipated or actual claims experience
associated with the group or individuals to which the plan was
sold.
SEC. 118. ADDITIONAL REQUIREMENTS OF OPEN AHPS.
(a) Requirement of Agreement With HPPC.--In the case of a health
plan which is an open plan (as defined in section 191(b)(4)(B)), in
order to be registered as an AHP the plan must have in effect an
agreement (described in section 102) with each HPPC for each HPPC area
in which it is offered.
(b) Requirement of Open Enrollment.--
(1) In general.--In the case of a health plan which is an
open health plan, in order to be registered as an AHP the plan
must, subject to paragraph (3), not reject the enrollment of
any eligible individual whom a HPPC is authorized to enroll
under an agreement referred to in subsection (a) if the
individual applies for enrollment during an enrollment period.
(2) Limitation on termination.--Subject to paragraph (3),
coverage of eligible individuals under an open AHP may not be
refused nor terminated except for--
(A) nonpayment of premiums;
(B) fraud or misrepresentation; or
(C) termination of the plan at the end of a year
(after notice and in accordance with standards
established by the Board).
(3) Treatment of network plans.--
(A) Geographic limitations.--
(i) In general.--An AHP which is a network
plan (as defined in subparagraph (D)) may deny
coverage under the plan to an eligible
individual who is located outside a service
area of the plan, but only if such denial is
applied uniformly, without regard to health
status or insurability of individuals.
(ii) Service areas.--The Board shall
establish standards for the designation by
network plans of service areas in order to
prevent discrimination based on health status
of individuals or their need for health
services.
(B) Size limits.--Subject to subparagraph (C), an
AHP which is a network plan may apply to the Board to
cease enrolling eligible individuals under the AHP (or
in a service area of the plan) if--
(i) it ceases to enroll any new eligible
individuals; and
(ii) it can demonstrate that its financial
or administrative capacity to serve previously
covered groups or individuals (and additional
individuals who will be expected to enroll
because of affiliation with such previously
covered groups or individuals) will be impaired
if it is required to enroll other eligible
individuals.
(C) First-come-first-served.--A network plan is
only eligible to exercise the limitations provided for
in subparagraphs (A) and (B) if it provides for
enrollment of eligible individuals on a first-come-
first-served basis.
(D) Network plan.--In this paragraph, the term
``network plan'' means an eligible organization (as
defined in section 1876(b) of the Social Security Act)
and includes a similar organization, specified in
regulations of the Board, as requiring a limitation on
enrollment of employer groups or individuals due to the
manner in which the organization provides health care
services.
(c) Requirement of Participation in Medicare Risk-Based
Contracting.--
(1) In general.--In the case of a health plan which is an
open health plan and which is an eligible organization (as
defined in section 1876(b) of the Social Security Act), in
order to be registered as an AHP the plan must enter into a
risk-sharing contract under section 1876 of the Social Security
Act for the offering of benefits to medicare beneficiaries in
accordance with such section.
(2) Expansion of medicare select program.--Subsection (c)
of section 4358 of the Omnibus Budget Reconciliation Act of
1990 (104 Stat. 1388-137) is amended by striking ``only apply
in 15 States'' and all that follows through the end and
inserting ``on and after January 1, 1992.''.
(d) Participation in FEHBP.--
(1) In general.--In the case of a health plan which
is an open health plan, in order to be registered as an
AHP the plan must have entered into an agreement with
the Office of Personnel Management to offer a health
plan to Federal employees and annuitants, and family
members, under the Federal Employees Health Benefits
Program under chapter 89 of title 5, United States
Code, under the same terms and conditions offered by
the AHP for enrollment of individuals and small
employers through HPPCs.
(2) Change in contribution and other fehbp rules.--
Notwithstanding any other provision of law, effective January
1, 1994--
(A) enrollment shall not be permitted under a
health benefits plan under chapter 89 of title 5,
United States Code, unless the plan is an AHP, and
(B) the amount of the Federal Government
contribution under such chapter--
(i) for any premium class shall be the same
for all AHPs in a HPPC area,
(ii) for any premium class shall not exceed
the base individual premium (as defined in
section 209(c)(3)), and
(iii) in the aggregate for any fiscal year
shall be equal to the aggregate amount of
Government contributions that would have been
made but for this section.
SEC. 119. ADDITIONAL REQUIREMENT OF CERTAIN AHPS.
(a) Medicare Adjustment Payment Required.--Each AHP which does not
meet the requirement of section 148(c) shall provide for payment to the
Board of such amounts as may be required as to put the plan in the same
financial position as the AHP would be in if it met such requirement.
(b) Redistribution of Payments to Plans.--The Board shall provide
for the distribution among AHPs meeting the requirement of section
148(c) of amounts paid under subsection (a) in such manner as reflects
the relative financial impact of such requirement among such plans.
Part 2--Preemption of State Laws for Accountable Health Plans
SEC. 120. PREEMPTION FROM STATE BENEFIT MANDATES.
Effective as of January 1, 1994, no State shall establish or
enforce any law or regulation that--
(1) requires the offering, as part of an AHP, of any
services, category of care, or services of any class or type of
provider that is different from the uniform set of effective
benefits;
(2) specifies the individuals to be covered under an AHP or
the duration of such coverage; or
(3) requires a right of conversion from a group health plan
that is an AHP to an individual health plan.
SEC. 121. PREEMPTION OF STATE LAW RESTRICTIONS ON NETWORK PLANS.
(a) Limitation on Restrictions on Network Plans.--Effective as of
January 1, 1994--
(1) A State may not by law or regulation prohibit or
unreasonably limit a network plan from including incentives for
enrollees to use the services of participating providers.
(2) A State may not prohibit or unreasonably limit a
network plan from limiting coverage of services to those
provided by a participating provider.
(3)(A) Subject to subparagraph (B), a State may not
prohibit or unreasonably limit the negotiation of rates and
forms of payments for providers under a network plan.
(B) Subparagraph (A) shall not apply where the amount of
payments with respect to a category of services or providers is
established under a Statewide system applicable to all non-
Federal payors with respect to such services or providers.
(4) A State may not prohibit or unreasonably limit a
network plan from limiting the number of participating
providers.
(5) A State may not prohibit or unreasonably limit a
network plan from requiring that services be provided (or
authorized) by a practitioner selected by the enrollee from a
list of available participating providers.
(b) Definitions.--As used in this section:
(1) Network plan.--The term ``network plan'' means an AHP--
(A) which--
(i) limits coverage of the uniform set of
basic benefits to those provided by
participating providers; or
(ii) provides, with respect to such
services provided by persons who are not
participating providers, for deductibles or
other cost-sharing which are in excess of those
permitted under the uniform set of basic
benefits for participating providers;
(B) which has a sufficient number and distribution
of participating providers to assure that the uniform
set of basic benefits is--
(i) available and accessible to each
enrollee, within the area served by the plan,
with reasonable promptness and in a manner
which assures continuity; and
(ii) when medically necessary, available
and accessible 24 hours a day and seven days a
week; and
(C) which provides benefits for the uniform set of
basic benefits not furnished by participating providers
if the services are medically necessary and immediately
required because of an unforeseen illness, injury, or
condition.
(2) Participating provider.--The term ``participating
provider'' means an entity or individual which provides, sells,
or leases health care services under a contract with a network
plan, which contract does not permit--
(A) cost-sharing in excess of the cost-sharing
permitted under the uniform set of basic benefits with
respect to basic benefits; and
(B) any enrollee charges (for such services covered
under such set) in excess of such cost-sharing.
SEC. 122. PREEMPTION OF STATE LAWS RESTRICTING UTILIZATION REVIEW
PROGRAMS.
(a) In General.--Effective January 1, 1994, no State law or
regulation shall prohibit or regulate activities under a utilization
review program (as defined in subsection (b)).
(b) Utilization Review Program Defined.--In this section, the term
``utilization review program'' means a system of reviewing the medical
necessity and appropriateness of patient services (which may include
inpatient and outpatient services) using specified guidelines. Such a
system may include preadmission certification, the application of
practice guidelines, continued stay review, discharge planning,
preauthorization of ambulatory procedures, and retrospective review.
Subtitle C--Federal Health Board
SEC. 131. ESTABLISHMENT OF FEDERAL HEALTH BOARD.
(a) In General.--There is hereby established a Federal Health
Board.
(b) Composition and Terms.--
(1) Appointment.--The Board shall be composed of 5 members
appointed by the President by and with the advice and consent
of the Senate. In appointing members to the Board, the
President shall provide that all members shall demonstrate
experience with and knowledge of the health care system.
(2) Chairperson.--The President shall designate one of the
members to be Chairperson of the Board.
(3) Terms.--Each member of the Board shall be appointed for
a term of 7 years, except that, of the members first appointed,
1 shall each be appointed for terms of 3, 4, 5, 6, and 7 years,
as designated by the President at the time of appointment.
Members appointed to fill vacancies shall serve for the
remainder of the terms of the vacating members.
(4) Party affiliation.--Not more than 3 members of the
Board shall be of the same political party.
(5) Other employment prohibited.--A member of the Board may
not, during the term as a member, engage in any other business,
vocation, profession, or employment.
(6) Quorum.--Three members of the Board shall constitute a
quorum, except that 2 members may hold hearings.
(7) Meetings.--The Board shall meet at the call of the
Chairman or 3 members of the Board.
(8) Compensation.--Each member of the Board shall be
entitled to compensation at the rate provided for level II of
the Executive Schedule, subject to such amounts as are provided
in advance in appropriation Acts.
(c) Personnel.--
(1) In general.--The Board shall appoint an Executive
Director and such additional officers and employees as it
considers necessary to carry out its functions under this Act.
Except as otherwise provided in any other provision of law,
such officers and employees shall be appointed, and their
compensation shall be fixed, in accordance with title 5, United
States Code.
(2) Experts and consultants.--The Board may procure the
services of experts and consultants in accordance with the
provisions of section 3109 of title 5, United States Code.
(d) Miscellaneous Provisions.--
(1) Gifts, bequests, and devises.--The Board may accept,
use, and dispose of gifts, bequests, or devises of services or
property for the purpose of aiding or facilitating its work.
(2) Mails.--The Board may use the United States mails in
the same manner and under the same conditions as other
departments and agencies of the United States.
SEC. 132. SPECIFICATION OF UNIFORM SET OF EFFECTIVE BENEFITS.
(a) Specification of Uniform Set of Effective Benefits.--
(1) In general.--The Board shall specify, by not later than
October 1 of each year (beginning with 1993), the uniform set
of effective benefits to apply under this title for the
following year.
(2) Specification of health care conditions.--
(A) In general.--Such benefits shall include the
full range of legally authorized treatment for any
health condition for which the Board determines a
treatment has been shown to reasonably improve or
significantly ameliorate the condition. The Board may
exclude health conditions the treatment of which do not
impact on clinical health or functional status of
individuals.
(B) Coverage of clinical preventive services.--Such
benefits shall include the full range of effective
clinical preventive services (including appropriate
screening, counseling, and immunization and
chemoprophylaxis), specified by the Board, appropriate
to age and other risk factors.
(C) Coverage for persons with severe mental
illness.--The Board shall establish guidelines
concerning nondiscrimination towards individuals with
severe mental illnesses and coverage for the treatment
of severe mental illnesses. Such guidelines shall
ensure that coverage of such individuals is equitable
and commensurate with the coverage provided to other
individuals.
(D) Exclusion for ineffective treatments.--The
Board may exclude from the benefits such treatments as
the Board determines, based on clinical information,
have not been reasonably shown to improve a health
condition or significantly ameliorate a health
condition. Except as specifically excluded, the actual
specific treatments, procedures, and care (such as the
use of particular providers or services) which may be
used under a plan or be used with respect to health
conditions shall be left up to the plan.
(E) Nondiscrimination.--In determining the uniform
set of effective benefits, the Board shall not
discriminate against individuals with serious mental
illnesses.
(3) Deductibles and cost-sharing.--
(A) In general.--Subject to subparagraph (B), such
set shall include uniform deductibles and cost-sharing
associated with such benefits.
(B) Treatment of network plans.--In the case of a
network plan (as defined in section 121(b)), the plan
may provide for charging deductibles and cost-sharing
in excess of the uniform deductibles and cost-sharing
under subparagraph (A) in the case of services provided
by providers that are not participating providers (as
defined in such section).
(b) Basis for Benefits.--In establishing such set, the Board shall
judge medical treatments, procedures, and related health services based
on--
(1) their effectiveness in improving the health status of
individuals; and
(2) their long-term impact on maintaining and improving
health and productivity and on reducing the consumption of
health care services.
(c) Basis for Cost-Sharing.--In establishing cost-sharing that is
part of the uniform set of effective benefits, the Board shall--
(1) include only such cost-sharing as will restrain
consumers from seeking unnecessary services;
(2) not impose cost-sharing for covered clinical preventive
services;
(3) balance the effect of the cost-sharing in reducing
premiums and in affecting utilization of appropriate services;
and
(4) limit the total cost-sharing that may be incurred by an
individual (or enrollee unit) in a year.
SEC. 133. HEALTH BENEFITS AND DATA STANDARDS BOARD.
(a) Establishment.--The Board shall provide for the initial
organization, as a nonprofit corporation in the District of Columbia,
of the Health Benefits and Data Standards Board (in this section
referred to as the ``Benefits and Data Board''), under the direction of
a board of directors consisting of 5 directors.
(b) Appointment of Directors.--
(1) Solicitation.--The Board shall solicit nominations for
the initial board of directors of the Benefits and Data Board
from organizations that represent the various groups with an
interest in the health care system and the functions of the
Board.
(2) Continuation.--The by-laws of the Benefits and Data
Board shall provide for the board of directors subsequently to
be appointed by the board in a manner that ensures a broad
range of representation of through groups with an interest in
providing and purchasing health care.
(3) Terms of directors.--The term of each member of the
board of directors shall be for 7 years, except that in order
to provide for staggered terms, the terms of the members
initially appointed shall be for 3, 4, 5, 6, and 7 years. In
the case of a vacancy by death or resignation, the replacement
shall be appointed for the remainder of the term. No individual
may serve as a director of the board for more than 14 years.
(c) Functions.--
(1) In general.--The Benefits and Data Board shall make
recommendations to the Board concerning each of the following:
(A) The uniform set of effective benefits.
(B) The standards for information collection from
AHPs.
(C) Auditing standards to ensure the accuracy of
such information.
Before making recommendations concerning the standards
described in subparagraph (B), the Benefits and Data Board
shall consult with the Agency for Health Care Policy and
Research regarding the Agency's need for information in
performing its activities.
(2) Assessments.--The Benefits and Data Board shall provide
the Board with its assessment of--
(A) medical technology;
(B) practice variations;
(C) the effectiveness of medical practices and drug
therapies based on research performed by the Agency for
Health Care Policy and Research;
(D) information from clinical and epidemiologic
studies; and
(E) information provided by AHPs, including AHP-
specific information on clinical health, functional
status, well-being, and plan satisfaction of enrolled
individuals.
(3) National health data system.--The Benefits and Data
Board shall provide the Board with its assistance in the
development of the standards for the national data reporting
system under section 137.
(d) Funding.--
(1) In general.--In order to provide funding for the
Benefits and Data Board, the National Health Board shall
establish an annual registration fee for AHPs which is imposed
on a per-covered-individual-basis and is sufficient, in the
aggregate, to provide each year for not more than the amount
specified in paragraph (2) for the operation of the Benefits
and Data Board.
(2) Amount of funds.--The amount specified in this
paragraph for each of fiscal years 1994 and 1995, is
$50,000,000, and, for each succeeding fiscal year, is
$25,000,000.
SEC. 134. HEALTH PLAN STANDARDS BOARD.
(a) Establishment.--The Board shall provide for the initial
organization, as a nonprofit corporation in the District of Columbia,
of the Health Plan Standards Board (in this section referred to as the
``Plan Standards Board''), under the direction of a board of directors
consisting of 5 directors.
(b) Appointment of Directors.--
(1) Solicitation.--The Board shall solicit nominations for
the initial board of directors of the Plan Standards Board from
organizations that represent the various groups with an
interest in the health care system and the functions of the
Board.
(2) Continuation.--The by-laws of the Plan Standards Board
shall provide for the board of directors subsequently to be
appointed by the board in a manner that ensures a broad range
of representation of through groups with an interest in
providing and purchasing health care.
(3) Terms of directors.--The term of each member of the
board of directors shall be for 7 years, except that in order
to provide for staggered terms, the terms of the members
initially appointed shall be for 3, 4, 5, 6, and 7 years. In
the case of a vacancy by death or resignation, the replacement
shall be appointed for the remainder of the term. No individual
may serve as a director of the board for more than 12 years.
(c) Functions.--
(1) In general.--The Plan Standards Board shall make
recommendations to the Board concerning the standards for AHPs
(other than standards relating to the uniform set of effective
benefits and the national health data system) and for HPPCs.
(2) Assessment of risk-adjustment factors.--The Plan
Standards Board shall provide the Board with its assessment of
the risk-adjustment factors under section 136.
(d) Funding.--In order to provide funding for the Plan Standards
Board, the National Health Board shall establish an annual registration
fee for AHPs which is imposed on a per-covered-individual-basis and is
sufficient, in the aggregate, to provide each year for not more than 60
percent of the amount specified in section 133(d)(2) for the operation
of the Plan Standards Board.
SEC. 135. REGISTRATION OF ACCOUNTABLE HEALTH PLANS.
(a) In General.--The Board shall register those health plans that
meet the standards under subtitle B.
(b) Treatment of State Certification.--If the Board determines that
a State superintendent of insurance, State insurance commissioner, or
other State official provides for the imposition of standards that the
Board finds are equivalent to the standards established under subtitle
B for registration of a health benefit plan as an AHP, the Board may
provide for registration as AHPs of health plans that such official
certifies as meeting the standards for registration. Nothing in this
subsection shall require a health plan to be certified by such an
official in order to be registered by the Board.
(c) Medicaid Waiver.--The Board shall develop criteria and
procedures under which the Secretary may grant a waiver to a State to
permit that State to enroll individuals, otherwise eligible for
enrollment under title XIX of the Social Security Act, under ACP's
through a HPPC. The waiver shall permit the State to use funds made
available under such title XIX for the enrollment of medicaid eligible
individuals through a HPPC. The State shall ensure that individuals
enrolled in a AHP under such a waiver are guaranteed at least those
minimum benefits that such individual would have been entitled to under
such title XIX.
SEC. 136. SPECIFICATION OF RISK-ADJUSTMENT FACTORS.
(a) In General.--The Board shall establish rules for the process of
risk-adjustment of premiums among AHPs by HPPCs under section 102(d).
(b) Process.--
(1) Identification of relative risk.--The Board shall
determine risk-adjustment factors that are correlated with
increased or diminished risk for consumption of the type of
health services included in the uniform set of effective
benefits. To the maximum extent practicable, such factors shall
be determined without regard to the methodology used by
individual AHPs in the provision of such benefits. In
determining such factors, with respect to an individual who is
identified as having--
(A) a lower-than-average risk for consumption of
the services, the factor shall be a number, less than
zero, reflecting the degree of such lower risk;
(B) an average risk for consumption of the
services, the factor shall be zero; or
(C) a higher-than-average risk for consumption of
the services, the factor shall be a number, greater
than zero, reflecting the degree of such higher risk.
(2) Adjustment of factors.--In applying under section
102(d)(1)(B) the risk-adjustment factors determined under
paragraph (1), each HPPC shall adjust such factors, in
accordance with a methodology established by the Board, so that
the sum of such factors is zero for all enrollee units in each
HPPC area for which a premium payment is forwarded under
section 102(d) for each premium payment period.
SEC. 137. NATIONAL HEALTH DATA SYSTEM.
(a) Standardization of Information.--
(1) In general.--The Board shall establish standards for
the periodic reporting by AHPs of information under section
113(a).
(2) Patient confidentiality.--The standards shall be
established in a manner that protects the confidentiality of
individual enrollees, but may provide for the disclosure of
information which discloses particular providers within an AHP.
(b) Analysis of Information.--The Board shall analyze the
information reported in order to distribute it in a form, consistent
with subsection (a)(2), that--
(1) reports, on a national, State, and community basis, the
levels and trends of health care expenditures, the rates and
trends in the provision of individual procedures, and the price
levels and rates of price change for such procedures; and
(2) permits the direct comparison of different AHPs on the
basis of the ability of the AHPs to maintain and improve
clinical health, functional status, and well-being and to
satisfy enrolled individuals.
The reports under paragraph (1) shall include both aggregate and per
capita measures for areas and shall include comparative data of
different areas. The comparison under paragraph (2) may also be made to
show changes in the performance of AHPs over time.
(c) Distribution of Information.--
(1) In general.--The Board shall provide, through the HPPCs
and directly to AHPs, for the distribution of its analysis on
individual AHPs. Such distribution shall occur at least
annually before each general enrollment period.
(2) Annual report on expenditures.--The Board shall publish
annually (beginning with 1996) a report on expenditures on, and
volumes and prices of, procedures. Such report shall be
distributed to each AHP, each HPPC, each Governor, and each
State legislature.
(3) Annual reports.--The Board shall also publish an annual
report, based on analyses under this section, that identifies--
(A) procedures for which, as reflected in
variations in use or rates of increase, there appear to
be the greatest need to develop valid clinical
protocols for clinical decision-making and review;
(B) procedures for which, as reflected in price
variations and price inflation, there appear to be the
greatest need for strengthening competitive purchasing;
and
(C) States and localities for which, as reflected
in expenditure levels and rates of increase, there
appear to be the greatest need for additional cost
control measures.
(4) Special distributions.--The Board may, whenever it
deems appropriate, provide for the distribution--
(A) to an AHP of such information relating to the
plan as may be appropriate in order to encourage the
plan to improve its delivery of care; and
(B) to business, consumer, and other groups and
individuals of such information as may improve their
ability to effect improvements in the outcomes,
quality, and efficiency of health services.
(5) Access by agency for health care policy and research.--
The Board shall make available to the Agency for Health Care
Policy and Research information obtained under section 113(a)
in a manner consistent with subsection (a)(2).
(d) Standardized Forms.--Not later than October 1, 1994, the Board,
in consultation with representatives of local governments, insurers,
health care providers, and consumers shall develop a plan to accelerate
electronic billing and computerization of medical records and shall
develop standardized claim forms and billing procedures for use by all
AHP's under this title.
SEC. 138. MEASURES OF QUALITY OF CARE OF SPECIALIZED CENTERS OF CARE.
(a) Collection of Information.--The Board shall provide a process
whereby a specialized center of care (as defined in subsection (c)) may
submit to the Board such clinical and other information bearing on the
quality of care provided with respect to the uniform set of effective
benefits at the center as the Board may specify. Such information shall
include sufficient information to take into account outcomes and the
risk factors associated with individuals receiving care through the
center. Such information shall be provided at such frequency (not less
often than annually) as the Board specifies.
(b) Measures of Quality.--Using information submitted under
subsection (a) and information reported under section 137, the Board
shall--
(1) analyze the performance of such centers with respect to
the quality of care provided;
(2) rate the performance of such a center with respect to a
class of services relative to the performance of other
specialized centers of care and relative to the performance of
AHPs generally; and
(3) publish such ratings.
(c) Use of Service Mark for Specialized Centers of Care.--The Board
may establish a service mark for specialized centers of care the
performance of which has been rated under subsection (b). Such service
mark shall be registrable under the Trademark Act of 1946, and the
Board shall apply for the registration of such service mark under such
Act. For purposes of such Act, such service mark shall be deemed to be
used in commerce. For purposes of this subsection, the ``Trademark Act
of 1946'' refers to the Act entitled ``An Act to provide for the
registration and protection of trademarks used in commerce, to carry
out the provisions of international conventions, and for other
purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.).
(d) Specialized Center of Care Defined.--In this section, the term
``specialized center of care'' means an institution or other organized
system for the provision of specific services, which need not be multi-
disciplinary, and does not include (except as the Board may provide)
individual practitioners.
SEC. 139. REPORT ON IMPACT OF ADVERSE SELECTION; RECOMMENDATIONS ON
MANDATED PURCHASE OF COVERAGE.
(a) Study.--The Board shall study--
(1) the extent to which those eligible individuals (as
defined in subsection (c)) who enroll with AHPs have
significantly greater needs for health care services than the
population of eligible individuals as a whole; and
(2) methods for reducing adverse impacts that may result
from such adverse selection.
(b) Report.--By not later than January 1, 1996, the Board shall
submit to Congress a report on the study under subsection (a) and on
appropriate methods for reducing adverse impacts that may result from
adverse selection in enrollment. The report shall specifically
include--
(1) an examination of the impact of establishing a
requirement that all eligible individuals obtain health
coverage through enrollment with an AHP; and
(2) a recommendation as to whether (and, if so, how) to
impose such a requirement.
(c) Eligible Individual Defined.--In this section, the term
``eligible individual''--
(1) includes individuals who would be eligible individuals
but for section 2(a)(4)(B), but
(2) does not include individuals eligible to enroll for
benefits under part B of title XVIII of the Social Security
Act.
TITLE II--TAX INCENTIVES TO INCREASE HEALTH CARE ACCESS
SEC. 201. CREDIT FOR ACCOUNTABLE HEALTH PLAN COSTS.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable personal
credits) is amended by inserting after section 34 the following new
section:
``SEC. 34A. ACCOUNTABLE HEALTH PLAN COSTS.
``(a) Allowance of Credit.--
``(1) In general.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the
applicable percentage of the accountable health plan costs paid
by such individual during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the term `applicable percentage' means 60 percent reduced
(but not below zero) by 10 percentage points for each $1,000
(or fraction thereof) by which the taxpayer's adjusted gross
income for the taxable year exceeds the applicable dollar
amount.
``(3) Applicable dollar amount.--For purposes of this
subsection, the term `applicable dollar amount' means--
``(A) in the case of a taxpayer filing a joint
return, $28,000,
``(B) in the case of any other taxpayer (other than
a married individual filing a separate return),
$18,000, and
``(C) in the case of a married individual filing a
separate return, zero.
For purposes of this subsection, the rule of section 219(g)(4)
shall apply.
``(b) Accountable Health Plan Costs.--For purposes of this
section--
``(1) In general.--The term `accountable health plan costs'
means amounts paid during the taxable year for insurance which
constitutes medical care (within the meaning of section 213(g).
For purposes of the preceding sentence, the rules of section
213(d)(6) shall apply.
``(2) Dollar limit on accountable health plan costs.--The
amount of the accountable health care costs paid during any
taxable year which may be taken into account under subsection
(a)(1) shall not exceed the reference premium amount for the
taxable year.
``(3) Election not to take credit.--A taxpayer may elect
for any taxable year to have amounts described in paragraph (1)
not treated as accountable health plan costs.
``(4) Definition.--As used in paragraph (2), the term
`reference premium rate amount' means, with respect to an
individual in a HPPC area, the lowest premium established by an
open accountable health plan and offered in the area for the
premium class applicable to such individual (including, if
appropriate, the HPPC overhead amount established under section
105(b)(3) of the Access to Affordable Health Care Act) applied
for the taxable year period involved.
``(c) Eligible Individual.--For purposes of this section, the term
`eligible individual' means, with respect to any period, an individual
who is not covered during such period by a health plan maintained by an
employer of such individual or such individual's spouse.
``(d) Special Rules.--For purposes of this section--
``(1) Coordination with advance payment and minimum tax.--
Rules similar to the rules of subsections (g) and (h) of
section 32 shall apply to any credit to which this section
applies.
``(2) Medicare-eligible individuals.--No expense shall be
treated as an accountable health plan cost if it is an amount
paid for insurance for an individual for any period with
respect to which such individual is entitled (or, on
application without the payment of an additional premium, would
be entitled to) benefits under part A of title XVIII of the
Social Security Act.
``(3) Subsidized expenses.--No expense shall be treated as
an accountable health plan cost to the extent--
``(A) such expense is paid, reimbursed, or
subsidized (whether by being disregarded for purposes
of another program or otherwise) by the Federal
Government, a State or local government, or any agency
or instrumentality thereof, and
``(B) the payment, reimbursement, or subsidy of
such expense is not includible in the gross income of
the recipient.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(b) Advance Payment of Credit.--
(1) In general.--Chapter 25 of the Internal Revenue Code of
1986 is amended by inserting after section 3507 the following
new section:
``SEC. 3507A. ADVANCE PAYMENT OF ACCOUNTABLE HEALTH PLAN COSTS.
``(a) General Rule.--Except as otherwise provided in this section,
every employer making payment of wages with respect to whom an
accountable health plan costs eligibility certificate is in effect
shall, at the time of paying such wages, make an additional payment
equal to such employee's accountable health plan costs advance amount.
``(b) Accountable Health Plan Costs Eligibility Certificate.--For
purposes of this title, an accountable health plan costs eligibility
certificate is a statement furnished by an employee to the employer
which--
``(1) certifies that the employee will be eligible to
receive the credit provided by section 34A for the taxable
year,
``(2) certifies that the employee does not have an
accountable health plan costs eligibility certificate in effect
for the calendar year with respect to the payment of wages by
another employer,
``(3) states whether or not the employee's spouse has an
accountable health plan costs eligibility certificate in
effect, and
``(4) estimates the amount of accountable health plan costs
(as defined in section 34A(b)) for the calendar year.
For purposes of this section, a certificate shall be treated as being
in effect with respect to a spouse if such a certificate will be in
effect on the first status determination date following the date on
which the employee furnishes the statement in question.
``(c) Accountable Health Plan Costs Advance Amount.--
``(1) In general.--For purposes of this title, the term
`accountable health plan costs advance amount' means, with
respect to any payroll period, the amount determined--
``(A) on the basis of the employee's wages from the
employer for such period,
``(B) on the basis of the employee's estimated
accountable health plan costs included in the
accountable health plan costs eligibility certificate,
and
``(C) in accordance with tables provided by the
Secretary.
``(2) Advance amount tables.--The tables referred to in
paragraph (1)(D) shall be similar in form to the tables
prescribed under section 3402 and, to the maximum extent
feasible, shall be coordinated with such tables and the tables
prescribed under section 3507(c).
``(d) Other Rules.--For purposes of this section, rules similar to
the rules of subsections (d) and (e) of section 3507 shall apply.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(2) Conforming amendment.--The table of sections for
chapter 25 of such Code is amended by adding after the item
relating to section 3507 the following new item:
``Sec. 3507A. Advance payment of
accountable health plan costs
credit.''.
(c) Coordination With Deductions for Health Insurance Expenses.--
(1) Self-employed individuals.--Section 162(l) of the
Internal Revenue Code of 1986, as amended by section 203, is
further amended by adding after paragraph (5) the following new
paragraph:
``(6) Coordination with health insurance premium credit.--
Paragraph (1) shall not apply to any amount taken into account
in computing the amount of the credit allowed under section
34A.''.
(2) Medical, dental, etc., expenses.--Subsection (e) of
section 213 of such Code is amended by inserting ``or section
34A'' after ``section 21''.
(d) Termination of Health Insurance Credit.--Section 32 of the
Internal Revenue Code of 1986 (relating to earned income credit) is
amended by adding at the end thereof the following new subsection:
``(d) Termination of Health Insurance Credit.--In the case of
taxable years beginning after December 31, 1991, the health insurance
credit percentage shall be equal to 0 percent.''
(e) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 34 the
following new item:
``Sec. 34A. Accountable health plan
costs.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 202. NO DEDUCTION FOR EMPLOYER HEALTH PLAN EXPENSES IN EXCESS OF
ACCOUNTABLE HEALTH PLAN COSTS.
(a) In General.--Section 162 of the Internal Revenue Code of 1986
(relating to trade or business expenses) is amended by redesignating
subsection (m) as subsection (n) and by inserting after subsection (l)
the following new subsection:
``(m) General Rule.--
``(1) Limitation on deduction.--No deduction shall be
allowed under this section for the excess health plan expenses
of any employer.
``(2) Excess health plan expenses.--For purposes of this
subsection--
``(A) In general.--The term `excess health plan
expenses' means health plan expenses paid or incurred
by the employer for any month with respect to any
covered individual to the extent such expenses do not
meet the requirements of subparagraphs (B), (C), and
(D).
``(B) Limit to accountable health plans.--Health
plan expenses meet the requirements of this
subparagraph only if the expenses are attributable to--
``(i) coverage of the covered individual
under an accountable health plan, or
``(ii) in the case of a small employer,
payment to a health plan purchasing cooperative
for coverage under an accountable health plan.
``(C) Limit on per employee contribution.--
``(i) In general.--Health plan expenses
with respect to any employee meet the
requirements of this subparagraph for any month
only to the extent that the amount of such
expenses does not exceed the reference premium
rate amount for the month.
``(ii) Treatment of health plans outside
the united states.--For purposes of clause (i),
in the case of an employee residing outside the
United States, there shall be substituted for
the reference premium rate such reasonable
amounts as the Federal Health Board determines
to be comparable to the limit imposed under
clause (i).
``(iii) Definition.--As used in clause (i),
the term `reference premium rate amount' means,
with respect to an individual in a HPPC area,
the lowest premium established by an open
accountable health plan and offered in the area
for the premium class applicable to such
individual (including, if appropriate, the HPPC
overhead amount established under section
105(b)(3) of the Access to Affordable Health
Care Act).
``(D) Requirement of level contribution.--Health
plan expenses meet the requirements of this
subparagraph for any month only if the amount of the
employer contribution (for a premium class) does not
vary based on the accountable health plan selected.
``(3) Exception for medicare-eligible retirees.--Paragraphs
(1) and (2) shall not apply to health plan expenses with
respect to an individual who is eligible for benefits under
part A of title XVIII of the Social Security Act if such
expenses are for a health plan that is not a primary payor
under section 1862(b) of such Act.
``(4) Special rules.--
``(A) Treatment of self-insured plans.--In the case
of a self-insured health plan, the amount of
contributions per employee shall be determined for
purposes of paragraph (2)(C) in accordance with rules
established by the Federal Health Board which are based
on the principles of section 4980B(f)(4)(B) (as in
effect before the date of the enactment of this
subsection).
``(B) Contributions to cafeteria plans.--
Contributions under a cafeteria plan on behalf of an
employee that may be used for a group health plan
coverage shall be treated for purposes of this section
as health plan expenses paid or incurred by the
employer.
``(5) Employees held harmless.--Nothing in this section
shall be construed as affecting the exclusion from gross income
of an employee under section 106.
``(6) Other definitions.--For purposes of this subsection--
``(A) Covered individual.--The term `covered
individual' means any beneficiary of a group health
plan.
``(B) Group health plan.--The term `group health
plan' has the meaning given such term by section
5000(b)(1).
``(C) Health plan expenses.--
``(i) In general.--The term `health plan
expenses' means employer expenses for any group
health plan, including expenses for premiums as
well as payment of deductibles and coinsurance
that would otherwise be applicable.
``(ii) Exclusion of certain direct
expenses.--Such term does not include expenses
for direct services which are determined by the
Federal Health Board to be primarily aimed at
workplace health care and health promotion or
related population-based preventive health
activities.
``(D) Accountable health plan.--The term
`accountable health plan' has the meaning given such
term by section 2(b)(1) of the Access to Affordable
Health Care Act.
``(E) Small employer.--The term `small employer'
means, for a taxable year, an employer that is a small
employer (within the meaning of section 2(c)(2) of the
Access to Affordable Health Care Act) for the most
recent calendar year ending before the end of the
taxable year.''.
(b) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
expenses incurred for the provision of health services for
periods after December 31, 1993.
(2) Transition for collective bargaining agreements.--The
amendments made by this section shall not apply to employers
with respect to their employees, insofar as such employees are
covered under a collective bargaining agreement ratified before
the date of the enactment of this Act, earlier than the date of
termination of such agreement (determined without regard to any
extension thereof agreed to after the date of the enactment of
this Act), or January 1, 1996, whichever is earlier.
SEC. 203. INCREASE IN DEDUCTION FOR HEALTH PLAN PREMIUM EXPENSES OF
SELF-EMPLOYED INDIVIDUALS.
(a) Increasing Deduction to 100 Percent.--Paragraph (1) of section
162(l) of the Internal Revenue Code of 1986 (relating to special rules
for health insurance costs of self-employed individuals) is amended by
striking ``25 percent of''.
(b) Making Provision Permanent.--Section 162(l) of such Code is
amended by striking paragraph (6).
(c) Limitation to Accountable Health Plans.--Paragraph (2) of
section 162(l) of such Code is amended by adding at the end thereof the
following new subparagraph:
``(C) Deduction limited to accountable health plan
costs.--No deduction shall be allowed under this
section for any amount which would be excess health
plan expenses (as defined in subsection (m)(2),
determined without regard to subparagraph (D) thereof)
if the taxpayer were an employer.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
taxable years beginning after December 31, 1993.
(2) Exception.--The amendment made by subsection (c) shall
apply to expenses for periods of coverage beginning on or after
January 1, 1994.
SEC. 204. DEDUCTION FOR HEALTH PLAN PREMIUM EXPENSES OF INDIVIDUALS.
(a) In General.--Section 213 of the Internal Revenue Code of 1986
(relating to medical, dental, etc., expenses) amended by adding at the
end the following new subsection:
``(g) Special Rules for Health Plan Premium Expenses.--
``(1) In general.--The deduction under subsection (a) shall
be determined without regard to the limitation based on
adjusted gross income with respect to amounts paid for premiums
for coverage under an accountable health plan.
``(2) Limit.--The amount allowed as a deduction under
paragraph (1) with respect to the cost of providing coverage
for any individual shall not exceed the applicable limit
specified in section 162(m)(2)(C) reduced by the aggregate
amount paid by all other entities (including any employer or
any level of government) for coverage of such individual under
any health plan.
``(3) Deduction allowed against gross income.--The
deduction under this subsection shall be taken into account in
determining adjusted gross income under section 62(a).
``(4) Treatment of medicare program.--Coverage under part A
or part B of title XVIII of the Social Security Act shall not
be considered for purposes of this subsection to be coverage
under an accountable health plan.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1993.
SEC. 205. EXCLUSION FROM GROSS INCOME FOR EMPLOYER CONTRIBUTIONS TO
ACCOUNTABLE HEALTH PLANS.
(a) In General.--Section 106 of the Internal Revenue Code of 1986
(relating to contributions by employers to accident and health plans)
is amended to read as follows:
``Gross income of an employee does not include employer-provided
basic coverage under an accountable health plan (as defined in section
162(m)(2)(B)).''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
TITLE III--OUTCOMES RESEARCH AND PRACTICE GUIDELINE DEVELOPMENT;
APPLICATION OF GUIDELINES AS LEGAL STANDARD
SEC. 301. AUTHORIZATION FOR EXPANSION OF HEALTH SERVICES RESEARCH.
Section 926(a) of the Public Health Service Act (42 U.S.C. 299c-5)
is amended to read as follows:
(a) General Authorization of Appropriations.--For the purpose of
carrying out this title, there are authorized to be appropriated
$120,000,000 for fiscal year 1993, $155,000,000 for fiscal year 1994,
and $185,000,000 for fiscal year 1995.''.
SEC. 302. TREATMENT PRACTICE GUIDELINES AS A LEGAL STANDARD.
Section 912 of the Public Health Service Act (42 U.S.C. 299b-1) is
amended by adding at the end thereof the following new subsection:
``(g) Treatment Practice Guidelines as a Legal Standard.--
``(1) In General.--Except as provided in paragraph (2) and
notwithstanding any other provision of law, guidelines
established under this section may not be introduced in
evidence or used in any action brought in a Federal or State
court arising from the provision of a health care service to an
individual.
``(2) Provision of health care under guidelines.--
Notwithstanding any other provision of law, in any action
brought in a Federal or State court arising from the provision
of a health care service to an individual, if the service was
provided to the individual in accordance with guidelines
established under this section, the guidelines--
``(A) may be introduced by a provider who is a
party to the action; and
``(B) if introduced, shall establish a rebuttable
presumption that the service prescribed by the
guidelines is the appropriate standard of medical
care.''.
TITLE IV--COOPERATIVE AGREEMENTS BETWEEN HOSPITALS
SEC. 401. PURPOSE.
It is the purpose of this title to encourage cooperation between
hospitals in order to contain costs and achieve a more efficient health
care delivery system through the elimination of unnecessary duplication
and proliferation of expensive medical or high technology services or
equipment.
SEC. 402. HOSPITAL TECHNOLOGY AND SERVICES SHARING PROGRAM.
Part D of title VI of the Public Health Service Act (42 U.S.C. 291k
et seq.) is amended by adding at the end thereof the following new
section:
``SEC. 647. HOSPITAL TECHNOLOGY AND SERVICES SHARING DEMONSTRATION
PROGRAM.
``(a) Waiver.--The Attorney General, acting through the Secretary,
may grant a waiver of the anti-trust laws, to permit two or more
hospitals to enter into a voluntary cooperative agreement under which
such hospitals provide for the sharing of medical technology and
services.
``(b) Eligible Applicants.--
``(1) In general.--To be eligible to receive a waiver under
subsection (a), an entity shall be a hospital and shall prepare
and submit to the Secretary an application at such time, in
such manner, and containing such information as the Secretary
may require, including--
``(A) a statement that such hospital desires to
negotiate and enter into a voluntary cooperative
agreement with at least one other hospital operating in
the State or region of the applicant hospital for the
sharing of medical technology or services;
``(B) a description of the nature and scope of the
activities contemplated under the cooperative agreement
and any consideration that may pass under such
agreement to any other hospital that may elect to
become a party to the agreement; and
``(C) any other information determined appropriate
by the Secretary.
``(2) Development of evaluation guidelines.--Not later than
90 days after the date of enactment of this section, the
Administrator of the Agency for Health Care Policy and Research
shall develop evaluation guidelines with respect to
applications submitted under paragraph (1).
``(3) Evaluations of applications.--The Secretary, in
consultation with the Administrator of the Agency for Health
Care Policy and Research, shall evaluate applications submitted
under paragraph (1). In determining which applications to
approve for purposes of granting waivers under subsection (a),
the Secretary shall consider whether the cooperative agreement
described in each such application is likely to result in--
``(A) a reduction of costs and an increase in
access to care;
``(B) the enhancement of the quality of hospital or
hospital-related care;
``(C) the preservation of hospital facilities in
geographical proximity to the communities traditionally
served by such facilities;
``(D) improvements in the cost-effectiveness of
high-technology services by the hospitals involved;
``(E) improvements in the efficient utilization of
hospital resources and capital equipment; or
``(F) the avoidance of duplication of hospital
resources.
``(c) Medical Technology and Services.--
``(1) In general.--Cooperative agreements facilitated under
this section shall provide for the sharing of medical or high
technology equipment or services among the hospitals which are
parties to such agreements.
``(2) Medical technology.--For purposes of this section,
the term `medical technology' shall include the drugs, devices,
and medical and surgical procedures utilized in medical care,
and the organizational and support systems within which such
care is provided.
``(3) Eligible services.--With respect to services that may
be shared under an agreement entered into under this section,
such services shall--
``(A) either have high capital costs or extremely
high annual operating costs; and
``(B) be services with respect to which there is a
reasonable expectation that shared ownership will avoid
a significant degree of the potential excess capacity
of such services in the community or region to be
served under such agreement.
Such services may include mobile clinic services.
``(d) Report.--Not later than 5 years after the date of enactment
of this section, the Secretary shall prepare and submit to the
appropriate committees of Congress, a report concerning the potential
for cooperative agreements of the type entered into under this section
to--
``(1) contain health care costs;
``(2) increase the access of individuals to medical
services; and
``(3) improve the quality of health care.
Such report shall also contain the recommendations of the Secretary
with respect to future programs to facilitate cooperative agreements.
``(e) Definition.--For purposes of this section, the term
`antitrust laws' means--
``(1) the Act entitled `An Act to protect trade and
commerce against unlawful restraints and monopolies', approved
July 2, 1890, commonly known as the `Sherman Act' (26 Stat.
209; chapter 647; 15 U.S.C. 1 et seq.);
``(2) the Federal Trade Commission Act, approved September
26, 1914 (38 Stat. 717; chapter 311; 15 U.S.C. 41 et seq.);
``(3) the Act entitled `An Act to supplement existing laws
against unlawful restraints and monopolies, and for other
purposes', approved October 15, 1914, commonly known as the
`Clayton Act' (38 Stat. 730; chapter 323; 15 U.S.C. 12 et seq.;
18 U.S.C. 402, 660, 3285, 3691; 29 U.S.C. 52, 53); and
``(4) any State antitrust laws that would prohibit the
activities described in subsection (a).''.
TITLE V--IMPROVED ACCESS TO HEALTH CARE FOR RURAL AND UNDERSERVED AREAS
Subtitle A--Revenue Incentives for Practice in Rural Areas
SEC. 501. REVENUE INCENTIVES FOR PRACTICE IN RURAL AREAS.
(a) Nonrefundable Credit for Certain Primary Health Services
Providers.--
(1) In general.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 25 the following new section:
``SEC. 25A. PRIMARY HEALTH SERVICES PROVIDERS.
``(a) Allowance of Credit.--In the case of a qualified primary
health services provider, there is allowed as a credit against the tax
imposed by this chapter for any taxable year in a mandatory service
period an amount equal to the product of--
``(1) the lesser of--
``(A) the number of months of such period occurring
in such taxable year, or
``(B) 36 months, reduced by the number of months
taken into account under this paragraph with respect to
such provider for all preceding taxable years (whether
or not in the same mandatory service period),
multiplied by
``(2) $1,000 ($500 in the case of a qualified health
services provider who is a physician assistant or a nurse
practitioner).
``(b) Qualified Primary Health Services Provider.--For purposes of
this section, the term `qualified primary health services provider'
means any physician, physician assistant, or nurse practitioner who for
any month during a mandatory service period is certified by the Bureau
to be a primary health services provider who--
``(1) is providing primary health services--
``(A) full time, and
``(B) to individuals at least 80 percent of whom
reside in a rural health professional shortage area,
``(2) is not receiving during such year a scholarship under
the National Health Service Corps Scholarship Program or a loan
repayment under the National Health Service Corps Loan
Repayment Program,
``(3) is not fulfilling service obligations under such
Programs, and
``(4) has not defaulted on such obligations.
``(c) Mandatory Service Period.--For purposes of this section, the
term `mandatory service period' means the period of 60 consecutive
calendar months beginning with the first month the taxpayer is a
qualified primary health services provider.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Bureau.--The term `Bureau' means the Bureau of Health
Care Delivery and Assistance, Health Resources and Services
Administration of the United States Public Health Service.
``(2) Physician.--The term `physician' has the meaning
given to such term by section 1861(r) of the Social Security
Act.
``(3) Physician assistant; nurse practitioner.--The terms
`physician assistant' and `nurse practitioner' have the
meanings given to such terms by section 1861(aa)(3) of the
Social Security Act.
``(4) Primary health services provider.--The term `primary
health services provider' means a provider of primary health
services (as defined in section 330(b)(1) of the Public Health
Service Act).
``(5) Rural health professional shortage area.--The term
`rural health professional shortage area' means--
``(A) a class 1 or class 2 health professional
shortage area (as defined in section 332(a)(1)(A) of
the Public Health Service Act) in a rural area (as
determined under section 1886(d)(2)(D) of the Social
Security Act), or
``(B) an area which is determined by the Secretary
of Health and Human Services as equivalent to an area
described in subparagraph (A) and which is designated
by the Bureau of the Census as not urbanized.
``(e) Recapture of Credit.--
``(1) In general.--If, during any taxable year, there is a
recapture event, then the tax of the taxpayer under this
chapter for such taxable year shall be increased by an amount
equal to the product of--
``(A) the applicable percentage, and
``(B) the aggregate unrecaptured credits allowed to
such taxpayer under this section for all prior taxable
years.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection,
the applicable recapture percentage shall be determined
from the following table:
``If the recapture
The applicable recap-
event occurs during:
ture percentage is:
Months 1-24.............. 100
Months 25-36............. 75
Months 37-48............. 50
Months 49-60............. 25
Months 61 and thereafter. 0.
``(B) Timing.--For purposes of subparagraph (A),
month 1 shall begin on the first day of the mandatory
service period.
``(3) Recapture event defined.--
``(A) In general.--For purposes of this subsection,
the term `recapture event' means the failure of the
taxpayer to be a qualified primary health services
provider for any month during any mandatory service
period.
``(B) Cessation of designation.--The cessation of
the designation of any area as a rural health
professional shortage area after the beginning of the
mandatory service period for any taxpayer shall not
constitute a recapture event.
``(C) Secretarial waiver.--The Secretary may waive
any recapture event caused by extraordinary
circumstances.
``(4) No credits against tax.--Any increase in tax under
this subsection shall not be treated as a tax imposed by this
chapter for purposes of determining the amount of any credit
under subpart A, B, or D of this part.''.
(2) Clerical amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 25 the
following new item:
``Sec. 25A. Primary health services
providers.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 1993.
(b) National Health Service Corps Loan Repayments Excluded from
Gross Income.--
(1) In general.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to items
specifically excluded from gross income) is amended by
redesignating section 136 as section 137 and by inserting after
section 135 the following new section:
``SEC. 136. NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENTS.
``(a) General Rule.--Gross income shall not include any qualified
loan repayment.
``(b) Qualified Loan Repayment.--For purposes of this section, the
term `qualified loan repayment' means any payment made on behalf of the
taxpayer by the National Health Service Corps Loan Repayment Program
under section 338B(g) of the Public Health Service Act.''.
(2) Conforming amendment.--Paragraph (3) of section 338B(g)
of the Public Health Service Act is amended by striking
``Federal, State, or local'' and inserting ``State or local''.
(3) Clerical amendment.--The table of sections for part III
of subchapter B of chapter 1 of the Internal Revenue Code of
1986 is amended by striking the item relating to section 136
and inserting the following:
``Sec. 136. National Health Service Corps
loan repayments.
``Sec. 137. Cross references to other
Acts.''.
(4) Effective date.--The amendments made by this subsection
shall apply to payments made under section 338B(g) of the
Public Health Service Act after the date of the enactment of
this Act.
(c) Expensing of Medical Equipment.--
(1) In general.--Section 179 of the Internal Revenue Code
of 1986 (relating to election to expense certain depreciable
business assets) is amended--
(A) by striking paragraph (1) of subsection (b) and
inserting the following:
``(1) Dollar limitation.--
``(A) General rule.--The aggregate cost which may
be taken into account under subsection (a) for any
taxable year shall not exceed $10,000.
``(B) Rural health care property.--In the case of
rural health care property, the aggregate cost which
may be taken into account under subsection (a) for any
taxable year shall not exceed $25,000, reduced by the
amount otherwise taken into account under subsection
(a) for such year.''; and
(B) by adding at the end of subsection (d) the
following new paragraph:
``(11) Rural health care property.--For purposes of this
section, the term `rural health care property' means section
179 property used by a physician (as defined in section 1861(r)
of the Social Security Act) in the active conduct of such
physician's full-time trade or business of providing primary
health services (as defined in section 330(b)(1) of the Public
Health Service Act) in a rural health professional shortage
area (as defined in section 25A(d)(5)).''.
(2) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
1993, in taxable years ending after such date.
(d) Deduction for Student Loan Payments by Medical Professionals
Practicing in Rural Areas.--
(1) Interest on student loans not treated as personal
interest.--Section 163(h)(2) of the Internal Revenue Code of
1986 (defining personal interest) is amended by striking
``and'' at the end of subparagraph (D), by striking the period
at the end of subparagraph (E) and inserting ``, and'', and by
adding at the end thereof the following new subparagraph:
``(F) any qualified medical education interest (within the
meaning of subsection (k)).''.
(2) Qualified medical education interest defined.--Section
163 of such Code (relating to interest expenses) is amended by
redesignating subsection (k) as subsection (l) and by inserting
after subsection (j) the following new subsection:
``(k) Qualified Medical Education Interest of Medical Professionals
Practicing in Rural Areas.--
``(1) In general.--For purposes of subsection (h)(2)(F),
the term `qualified medical education interest' means an amount
which bears the same ratio to the interest paid on qualified
educational loans during the taxable year by an individual
performing services under a qualified rural medical practice
agreement as--
``(A) the number of months during the taxable year
during which such services were performed, bears to
``(B) the number of months in the taxable year.
``(2) Dollar limitation.--The aggregate amount which may be
treated as qualified medical education interest for any taxable
year with respect to any individual shall not exceed $5,000.
``(3) Qualified rural medical practice agreement.--For
purposes of this subsection--
``(A) In general.--The term `qualified rural
medical practice agreement' means a written agreement
between an individual and an applicable rural community
under which the individual agrees--
``(i) in the case of a medical doctor, upon
completion of the individual's residency (or
internship if no residency is required), or
``(ii) in the case of a registered nurse,
nurse practitioner, or physician's assistant,
upon completion of the education to which the
qualified education loan relates,
to perform full-time services as such a medical
professional in the applicable rural community for a
period of 24 consecutive months. An individual and an
applicable rural community may elect to have the
agreement apply for 36 consecutive months rather than
24 months.
``(B) Special rule for computing periods.--An
individual shall be treated as meeting the 24 or 36
consecutive month requirement under subparagraph (A)
if, during each 12-consecutive month period within
either such period, the individual performs full-time
services as a medical doctor, registered nurse, nurse
practitioner, or physician's assistant, whichever
applies, in the applicable rural community during 9 of
the months in such 12-consecutive month period. For
purposes of this subsection, an individual meeting the
requirements of the preceding sentence shall be treated
as performing services during the entire 12-month
period.
``(C) Applicable rural community.--The term
`applicable rural community' means--
``(i) any political subdivision of a State
which--
``(I) has a population of 5,000 or
less, and
``(II) has a per capita income of
$15,000 or less, or
``(ii) an Indian reservation which has a
per capita income of $15,000 or less.
``(4) Qualified educational loan.--The term `qualified
educational loan' means any indebtedness to pay qualified
tuition and related expenses (within the meaning of section
117(b)) and reasonable living expenses--
``(A) which are paid or incurred--
``(i) as a candidate for a degree as a
medical doctor at an educational institution
described in section 170(b)(1)(A)(ii), or
``(ii) in connection with courses of
instruction at such an institution necessary
for certification as a registered nurse, nurse
practitioner, or physician's assistant, and
``(B) which are paid or incurred within a
reasonable time before or after such indebtedness is
incurred.
``(5) Recapture.--If an individual fails to carry out a
qualified rural medical practice agreement during any taxable
year, then--
``(A) no deduction with respect to such agreement
shall be allowable by reason of subsection (h)(2)(F)
for such taxable year and any subsequent taxable year,
and
``(B) there shall be included in gross income for
such taxable year the aggregate amount of the
deductions allowable under this section (by reason of
subsection (h)(2)(F)) for all preceding taxable years.
``(6) Definitions.--For purposes of this subsection, the
terms `registered nurse', `nurse practitioner', and
`physician's assistant' have the meaning given such terms by
section 1861 of the Social Security Act.''.
(3) Deduction allowed in computing adjusted gross income.--
Section 62(a) of such Code is amended by inserting after
paragraph (13) the following new paragraph:
``(14) Interest on student loans of rural health
professionals.--The deduction allowable by reason of section
163(h)(2)(F) (relating to student loan payments of medical
professionals practicing in rural areas).''.
(4) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 1993.
Subtitle B--Public Health Service Act Provisions
SEC. 511. NATIONAL HEALTH SERVICE CORPS.
Section 338H(b) of the Public Health Service Act (42 U.S.C.
254q(b)) is amended--
(1) in paragraph (1), by striking ``and such sums'' and all
that follows through the end thereof and inserting
``$118,900,000 for each of the fiscal years 1993 through
1996.''; and
(2) in paragraph (2)--
(A) by redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C), respectively; and
(B) by inserting before subparagraph (B) (as so
redesignated) the following new subparagraph:
``(A) In general.--Of the amount appropriated under
paragraph (1) for each fiscal year, the Secretary shall
utilize 25 percent of such amount to carry out section
338A and 75 percent of such amount to carry out section
338B.''.
SEC. 512. ESTABLISHMENT OF GRANT PROGRAM.
Subpart I of part D of title III of the Public Health Service Act
(42 U.S.C. 254b et seq.) is amended by adding at the end thereof the
following new section:
``SEC. 330A. COMMUNITY BASED PRIMARY HEALTH CARE GRANT PROGRAM.
``(a) Establishment.--The Secretary shall establish and administer
a program to provide allotments to States to enable such States to
provide grants for the creation or enhancement of community based
primary health care entities that provide services to pregnant women
and children up to age three.
``(b) Allotments to States.--
``(1) In general.--From the amounts available for allotment
under subsection (h) for a fiscal year, the Secretary shall
allot to each State an amount equal to the product of the grant
share of the State (as determined under paragraph (2))
multiplied by the amount available for allotment for such
fiscal year.
``(2) Grant share.--
``(A) In general.--For purposes of paragraph (1),
the grant share of a State shall be the product of the
need-adjusted population of the State (as determined
under subparagraph (B)) multiplied by the Federal
matching percentage of the State (as determined under
subparagraph (C)), expressed as a percentage of the sum
of the products of such factors for all States.
``(B) Need-adjusted population.--
``(i) In general.--For purposes of
subparagraph (A), the need-adjusted population
of a State shall be the product of the total
population of the State (as estimated by the
Secretary of Commerce) multiplied by the need
index of the State (as determined under clause
(ii)).
``(ii) Need index.--For purposes of clause
(i), the need index of a State shall be the
ratio of--
``(I) the weighted sum of the
geographic percentage of the State (as
determined under clause (iii)), the
poverty percentage of the State (as
determined under clause (iv)), and the
multiple grant percentage of the State
(as determined under clause (v)); to
``(II) the general population
percentage of the State (as determined
under clause (vi)).
``(iii) Geographic percentage.--
``(I) In general.--For purposes of
clause (ii)(I), the geographic
percentage of the State shall be the
estimated population of the State that
is residing in nonurbanized areas (as
determined under subclause (II))
expressed as a percentage of the total
nonurbanized population of all States.
``(II) Nonurbanized population.--
For purposes of subclause (I), the
estimated population of the State that
is residing in non-urbanized areas
shall be one minus the urbanized
population of the State (as determined
using the most recent decennial
census), expressed as a percentage of
the total population of the State (as
determined using the most recent
decennial census), multiplied by the
current estimated population of the
State.
``(iv) Poverty percentage.--For purposes of
clause (ii)(I), the poverty percentage of the
State shall be the estimated number of people
residing in the State with incomes below 200
percent of the income official poverty line (as
determined by the Office of Management and
Budget) expressed as a percentage of the total
number of such people residing in all States
``(v) Multiple grant percentage.--For
purposes of clause (ii)(I), the multiple grant
percentage of the State shall be the amount of
Federal funding received by the State under
grants awarded under sections 329, 330 and 340,
expressed as a percentage of the total amounts
received under such grants by all States. With
respect to a State, such amount shall not
exceed twice the general population percentage
of the State under clause (vi) or be less than
one half of the States general population
percentage.
``(vi) General population percentage.--For
purposes of clause (ii)(II), the general
population percentage of the State shall be the
total population of the State (as determined by
the Secretary of Commerce) expressed as a
percentage of the total population of all
States.
``(C) Federal matching percentage.--
``(i) In general.--For purposes of
subparagraph (A), the Federal matching
percentage of the State shall be equal to one
less the State matching percentage (as
determined under clause (ii)).
``(ii) State matching percentage.--For
purposes of clause (ii), the State matching
percentage of the State shall be 0.25
multiplied by the ratio of the total taxable
resource percentage (as determined under clause
(iii)) to the need-adjusted population of the
State (as determined under subparagraph (B)).
``(iii) Total taxable resource
percentage.--For purposes of clause (ii), the
total taxable resources percentage of the State
shall be the total taxable resources of a State
(as determined by the Secretary of the
Treasury) expressed as a percentage of the sum
of the total taxable resources of all States.
``(3) Annual estimates.--
``(A) In general.--If the Secretary of Commerce
does not produce the annual estimates required under
paragraph (2)(B)(iv), such estimates shall be
determined by multiplying the percentage of the
population of the State that is below 200 percent of
the income official poverty line as determined using
the most recent decennial census by the most recent
estimate of the total population of the State. Except
as provided in subparagraph (B), the calculations
required under this subparagraph shall be made based on
the most recent 3 year average of the total taxable
resources of individuals within the State.
``(B) District of columbia.--Notwithstanding
subparagraph (A), the calculations required under such
subparagraph with respect to the District of Columbia
shall be based on the most recent 3 year average of the
personal income of individuals residing within the
District as a percentage of the personal income for all
individuals residing within the District, as determined
by the Secretary of Commerce.
``(4) Matching requirement.--A State that receives an
allotment under this section shall make available State
resources (either directly or indirectly) to carry out this
section in an amount that shall equal the State matching
percentage for the State (as determined under paragraph
(2)(C)(II)) divided by the Federal matching percentage (as
determined under paragraph (2)(C)).
``(c) Application.--
``(1) In general.--To be eligible to receive an allotment
under this section, a State shall prepare and submit an
application to the Secretary at such time, in such manner, and
containing such information as the Secretary may by regulation
require.
``(2) Assurances.--A State application submitted under
paragraph (1) shall contain an assurance that--
``(A) the State will use amounts received under
it's allotment consistent with the requirements of this
section; and
``(B) the State will provide, from non-Federal
sources, the amounts required under subsection (b)(4).
``(d) Use of Funds.--
``(1) In general.--The State shall use amounts received
under this section to award grants to eligible public and
nonprofit private entities, or consortia of such entities,
within the State to enable such entities or consortia to
provide services of the type described in paragraph (2) of
section 329(h) to pregnant women and children up to age three.
``(2) Eligibility.--To be eligible to receive a grant under
paragraph (1), an entity or consortium shall--
``(A) prepare and submit to the administering
entity of the State, an application at such time, in
such manner and containing such information as such
administering entity may require, including a plan for
the provision of services;
``(B) provide assurances that services will be
provided under the grant at fee rates established or
determined in accordance with section 330(e)(3)(F); and
``(C) provide assurances that in the case of
services provided to individuals with health insurance,
such insurance shall be used as the primary source of
payment for such services.
``(3) Target populations.--Entities or consortia receiving
grants under paragraph (1) shall, in providing the services
described in paragraph (3), substantially target populations of
pregnant women and children within the State who--
``(A) lack the health care coverage, or ability to
pay, for primary or supplemental health care services;
or
``(B) reside in medically underserved or health
professional shortage areas, areas certified as
underserved under the rural health clinic program, or
other areas determined appropriate by the State, within
the State.
``(4) Priority.--In awarding grants under paragraph (1),
the State shall--
``(A) give priority to entities or consortia that
can demonstrate through the plan submitted under
paragraph (2) that--
``(i) the services provided under the grant
will expand the availability of primary care
services to the maximum number of pregnant
women and children who have no access to such
care on the date of the grant award; and
``(ii) the delivery of services under the
grant will be cost-effective; and
``(B) ensure that an equitable distribution of
funds is achieved among urban and rural entities or
consortia.
``(e) Reports and Audits.--Each State shall prepare and submit to
the Secretary annual reports concerning the State's activities under
this section which shall be in such form and contain such information
as the Secretary determines appropriate. Each such State shall
establish fiscal control and fund accounting procedures as may be
necessary to assure that amounts received under this section are being
disbursed properly and are accounted for, and include the results of
audits conducted under such procedures in the reports submitted under
this subsection.
``(f) Payments.--
``(1) Entitlement.--Each State for which an application has
been approved by the Secretary under this section shall be
entitled to payments under this section for each fiscal year in
an amount not to exceed the State's allotment under subsection
(b) to be expended by the State in accordance with the terms of
the application for the fiscal year for which the allotment is
to be made.
``(2) Method of payments.--The Secretary may make payments
to a State in installments, and in advance or, by way of
reimbursement, with necessary adjustments on account of
overpayments or underpayments, as the Secretary may determine.
``(3) State spending of payments.--Payments to a State from
the allotment under subsection (b) for any fiscal year must be
expended by the State in that fiscal year or in the succeeding
fiscal year.
``(g) Definition.--As used in this section, the term `administering
entity of the State' means the agency or official designated by the
chief executive officer of the State to administer the amounts provided
to the State under this section.
``(h) Funding.--Notwithstanding any other provision of law, the
Secretary shall use 50 percent of the amounts that the Secretary is
required to utilize under section 330B(h) in each fiscal year to carry
out this section.''.
SEC. 513. ESTABLISHMENT OF NEW PROGRAM TO PROVIDE FUNDS TO ALLOW
FEDERALLY QUALIFIED HEALTH CENTERS AND OTHER ENTITIES OR
ORGANIZATIONS TO PROVIDE EXPANDED SERVICES TO MEDICALLY
UNDERSERVED INDIVIDUALS.
(a) In General.--Subpart I of part D of title III of the Public
Health Service Act (42 U.S.C. 254b et seq.) (as amended by section 512)
is further amended by adding at the end thereof the following new
section:
``SEC. 330B. ESTABLISHMENT OF NEW PROGRAM TO PROVIDE FUNDS TO ALLOW
FEDERALLY QUALIFIED HEALTH CENTERS AND OTHER ENTITIES OR
ORGANIZATIONS TO PROVIDE EXPANDED SERVICES TO MEDICALLY
UNDERSERVED INDIVIDUALS.
``(a) Establishment of Health Services Access Program.--From
amounts appropriated under this section, the Secretary shall, acting
through the Bureau of Health Care Delivery Assistance, award grants
under this section to federally qualified health centers (hereinafter
referred to in this section as `FQHC's') and other entities and
organizations submitting applications under this section (as described
in subsection (c)) for the purpose of providing access to services for
medically underserved populations (as defined in section 330(b)(3)) or
in high impact areas (as defined in section 329(a)(5)) not currently
being served by a FQHC.
``(b) Eligibility for Grants.--
``(1) In general.--The Secretary shall award grants under
this section to entities or organizations described in this
paragraph and paragraph (2) which have submitted a proposal to
the Secretary to expand such entities or organizations
operations (including expansions to new sites (as determined
necessary by the Secretary)) to serve medically underserved
populations or high impact areas not currently served by a FQHC
and which--
``(A) have as of January 1, 1992, been certified by
the Secretary as a FQHC under section 1905(l)(2)(B) of
the Social Security Act; or
``(B) have submitted applications to the Secretary
to qualify as FQHC's under such section 1905(l)(2)(B);
or
``(C) have submitted a plan to the Secretary which
provides that the entity will meet the requirements to
qualify as a FQHC when operational.
``(2) Non fqhc entities.--
``(A) Eligibility.--The Secretary shall also make
grants under this section to public or private
nonprofit agencies, health care entities or
organizations which meet the requirements necessary to
qualify as a FQHC except, the requirement that such
entity have a consumer majority governing board and
which have submitted a proposal to the Secretary to
provide those services provided by a FQHC as defined in
section 1905(l)(2)(B) of the Social Security Act and
which are designed to promote access to primary care
services or to reduce reliance on hospital emergency
rooms or other high cost providers of primary health
care services, provided such proposal is developed by
the entity or organizations (or such entities or
organizations acting in a consortium in a community)
with the review and approval of the Governor of the
State in which such entity or organization is located.
``(B) Limitation.--The Secretary shall provide in
making grants to entities or organizations described in
this paragraph that no more than 10 percent of the
funds provided for grants under this section shall be
made available for grants to such entities or
organizations.
``(c) Application Requirements.--
``(1) In general.--In order to be eligible to receive a
grant under this section, a FQHC or other entity or
organization must submit an application in such form and at
such time as the Secretary shall prescribe and which meets the
requirements of this subsection.
``(2) Requirements.--An application submitted under this
section must provide--
``(A)(i) for a schedule of fees or payments for the
provision of the services provided by the entity
designed to cover its reasonable costs of operations;
and
``(ii) for a corresponding schedule of discounts to
be applied to such fees or payments, based upon the
patient's ability to pay (determined by using a sliding
scale formula based on the income of the patient);
``(B) assurances that the entity or organization
provides services to persons who are eligible for
benefits under title XVIII of the Social Security Act,
for medical assistance under title XIX of such Act or
for assistance for medical expenses under any other
public assistance program or private health insurance
program; and
``(C) assurances that the entity or organization
has made and will continue to make every reasonable
effort to collect reimbursement for services--
``(i) from persons eligible for assistance
under any of the programs described in
subparagraph (B); and
``(ii) from patients not entitled to
benefits under any such programs.
``(d) Limitations on Use of Funds.--
``(1) In general.--From the amounts awarded to an entity or
organization under this section, funds may be used for purposes
of planning but may only be expended for the costs of--
``(A) assessing the needs of the populations or
proposed areas to be served;
``(B) preparing a description of how the needs
identified will be met;
``(C) development of an implementation plan that
addresses--
``(i) recruitment and training of
personnel; and
``(ii) activities necessary to achieve
operational status in order to meet FQHC
requirements under section 1905(l)(2)(B) of the
Social Security Act.
``(2) Recruiting, training and compensation of staff.--From
the amounts awarded to an entity or organization under this
section, funds may be used for the purposes of paying for the
costs of recruiting, training and compensating staff (clinical
and associated administrative personnel (to the extent such
costs are not already reimbursed under title XIX of the Social
Security Act or any other State or Federal program)) to the
extent necessary to allow the entity to operate at new or
expanded existing sites.
``(3) Facilities and equipment.--From the amounts awarded
to an entity or organization under this section, funds may be
expended for the purposes of acquiring facilities and equipment
but only for the costs of--
``(A) construction of new buildings (to the extent
that new construction is found to be the most cost-
efficient approach by the Secretary);
``(B) acquiring, expanding, or modernizing of
existing facilities;
``(C) purchasing essential (as determined by the
Secretary) equipment; and
``(D) amortization of principal and payment of
interest on loans obtained for purposes of site
construction, acquisition, modernization, or expansion,
as well as necessary equipment.
``(4) Services.--From the amounts awarded to an entity or
organization under this section, funds may be expended for the
payment of services but only for the costs of--
``(A) providing or arranging for the provision of
all services through the entity necessary to qualify
such entity as a FQHC under section 1905(l)(2)(B) of
the Social Security Act;
``(B) providing or arranging for any other service
that a FQHC may provide and be reimbursed for under
title XIX of such Act; and
``(C) providing any unreimbursed costs of providing
services as described in section 330(a) to patients.
``(e) Priorities in the Awarding of Grants.--
``(1) Certified fqhc's.--The Secretary shall give priority
in awarding grants under this section to entities which have,
as of January 1, 1992, been certified as a FQHC under section
1905(l)(2)(B) of the Social Security Act and which have
submitted a proposal to the Secretary to expand their
operations (including expansion to new sites) to serve
medically underserved populations for high impact areas not
currently served by a FQHC. The Secretary shall give first
priority in awarding grants under this section to those FQHCs
or other entities which propose to serve populations with the
highest degree of unmet need, and which can demonstrate the
ability to expand their operations in the most efficient
manner.
``(2) Qualified fqhc's.--The Secretary shall give second
priority in awarding grants to entities which have submitted
applications to the Secretary which demonstrate that the entity
will qualify as a FQHC under section 1905(l)(2)(B) of the
Social Security Act before it provides or arranges for the
provision of services supported by funds awarded under this
section, and which are serving or proposing to serve medically
underserved populations or high impact areas which are not
currently served (or proposed to be served) by a FQHC.
``(3) Expanded services and projects.--The Secretary shall
give third priority in awarding grants in subsequent years to
those FQHCs or other entities which have provided for expanded
services and project and are able to demonstrate that such
entity will incur significant unreimbursed costs in providing
such expanded services.
``(f) Return of Funds to Secretary for Costs Reimbursed From Other
Sources.--To the extent that an entity or organization receiving funds
under this section is reimbursed from another source for the provision
of services to an individual, and does not use such increased
reimbursement to expand services furnished, areas served, to compensate
for costs of unreimbursed services provided to patients, or to promote
recruitment, training, or retention of personnel, such excess revenues
shall be returned to the Secretary.
``(g) Termination of Grants.--
``(1) Failure to meet fqhc requirements.--
``(A) In general.--With respect to any entity that
is receiving funds awarded under this section and which
subsequently fails to meet the requirements to qualify
as a FQHC under section 1905(l)(2)(B) or is an entity
that is not required to meet the requirements to
qualify as a FQHC under section 1905(l)(2)(B) of the
Social Security Act but fails to meet the requirements
of this section, the Secretary shall terminate the
award of funds under this section to such entity.
``(B) Notice.--Prior to any termination of funds
under this section to an entity, the entities shall be
entitled to 60 days prior notice of termination and, as
provided by the Secretary in regulations, an
opportunity to correct any deficiencies in order to
allow the entity to continue to receive funds under
this section.
``(2) Requirements.--Upon any termination of funding under
this section, the Secretary may (to the extent practicable)--
``(A) sell any property (including equipment)
acquired or constructed by the entity using funds made
available under this section or transfer such property
to another FQHC, provided, that the Secretary shall
reimburse any costs which were incurred by the entity
in acquiring or constructing such property (including
equipment) which were not supported by grants under
this section; and
``(B) recoup any funds provided to an entity
terminated under this section.
``(h) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $400,000,000 for fiscal year
1993, $800,000,000 for fiscal year 1994, $1,200,000,000 for fiscal year
1995, $1,600,000,000 for fiscal year 1996, and $1,600,000,000 for
fiscal year 1997.''.
(b) Effective Date.--The amendments made by subsection (a) shall
become effective with respect to services furnished by a federally
qualified health center or other qualifying entity described in this
section beginning on or after October 1, 1993.
(c) Study and Report on Services Provided by Community Health
Centers and Hospitals.--
(1) In general.--The Secretary of Health and Human Services
(hereinafter referred to in this subsection as the
``Secretary'') shall provide for a study to examine the
relationship and interaction between community health centers
and hospitals in providing services to individuals residing in
medically underserved areas. The Secretary shall ensure that
the National Rural Research Centers participate in such study.
(2) Report.--The Secretary shall provide to the appropriate
committees of Congress a report summarizing the findings of the
study within 90 days of the end of each project year and shall
include in such report recommendations on methods to improve
the coordination of and provision of services in medically
underserved areas by community health centers and hospitals.
(3) Authorization.--There are authorized to be appropriated
to carry out the study provided for in this subsection $150,000
for each of fiscal years 1993 and 1994.
SEC. 514. RURAL MENTAL HEALTH OUTREACH GRANTS.
Part D of title V of the Public Health Service Act (42 U.S.C. 290dd
et seq.) is amended by adding at the end thereof the following new
section:
``SEC. 544. RURAL MENTAL HEALTH OUTREACH GRANTS.
``(a) In General.--The Secretary may award competitive grants to
eligible entities to enable such entities to develop and implement a
plan for mental health outreach programs in rural areas.
``(b) Eligible Entities.--To be eligible to receive a grant under
subsection (a) an entity shall--
``(1) prepare and submit to the Secretary an application at
such time, in such form and containing such information as the
Secretary may require, including a description of the
activities that the entity intends to undertake using grant
funds; and
``(2) meet such other requirements as the Secretary
determines appropriate.
``(c) Priority.--In awarding grants under subsection (a), the
Secretary shall give priority to applications that place emphasis on
mental health services for the elderly or children. Priority shall also
be given to applications that involve relationships between the
applicant and rural managed care cooperatives.
``(d) Matching Requirement.--An entity that receives a grant under
subsection (a) shall make available (directly or through donations from
public or private entities), non-Federal contributions toward the costs
of the operations of the network in an amount equal to the amount of
the grant.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $5,000,000 for each of the
fiscal years 1993 through 1997.''.
SEC. 515. HEALTH PROFESSIONS TRAINING.
(a) Medically Underserved Area Training Incentives.--Subsection (a)
of section 791 of the Public Health Service Act (42 U.S.C. 292 et seq.)
is amended to read as follows:
``(a) Priorities in Awarding of Grants.--
``(1) Allocation of competitive grant funds.--In awarding
competitive grants under this title or title VIII, the Secretary shall,
among applicants that meet the eligibility requirements under such
titles, give priority to entities submitting applications that--
``(A) can demonstrate that such entities--
``(i) have a high permanent rate for
placing graduates in practice settings which
serve residents of medically underserved
communities; and
``(ii) have a curriculum that includes--
``(I) the rotation of medical
students and residents to clinical
settings the focus of which is to serve
medically underserved communities;
``(II) the appointment of health
professionals whose practices serve
medically underserved communities to
act as preceptors to supervise training
in such settings;
``(III) classroom instruction on
practice opportunities involving
medically underserved communities;
``(IV) service contingent
scholarship or loan repayment programs
for students and residents to encourage
practice in or service to underserved
communities;
``(V) the recruitment of students
who are most likely to elect to
practice in or provide service to
medically underserved communities;
``(VI) other training methodologies
that demonstrate a significant
commitment to the expansion of the
proportion of graduates that elect to
practice in or serve the needs of
medically underserved communities; or
``(B) contain an organized plan for the expeditious
development of the placement rate and curriculum
described in subparagraph (A).
``(2) Service in medically underserved communities.--Not
less than 50 percent of the amounts appropriated for fiscal
year 1996, and for each subsequent fiscal year, for competitive
grants under this title or title VIII, shall be used to award
grants to institutions that are otherwise eligible for grants
under such titles, and that can demonstrate that--
``(A) not less than 15 percent of the graduates of
such institutions during the preceding 2-year period
are engaged in full-time practice serving the needs of
medically underserved communities; or
``(B) the number of the graduates of such
institutions that are practicing in a medically
underserved community has increased by not less than 50
percent over that proportion of such graduates for the
previous 2-year period.
``(3) Waivers.--A health professions school may petition
the Secretary for a temporary waiver of the priorities of this
subsection. Such waiver shall be approved if the health
professions school demonstrates that the State in which such
school is located is not suffering from a shortage of primary
care providers, as determined by the Secretary. Such waiver
shall not be for a period in excess of 2 years.
``(4) Definitions.--As used in this subsection:
``(A) Graduate.--The term `graduate' means, unless
otherwise specified, an individual who has successfully
completed all training and residency requirements
necessary for full certification in the health
professions discipline that such individual has
selected.
``(B) Medically underserved community.--The term
`medically underserved community' means--
``(i) an area designated under section 332
as a health professional shortage area;
``(ii) an area designated as a medically
underserved area under this Act;
``(iii) populations served by migrant
health centers under section 329, community
health centers under section 330, or Federally
qualified health centers under section
1905(l)(2)(B) of the Social Security Act;
``(iv) a community that is certified as
underserved by the Secretary for purposes of
participation in the rural health clinic
program under title XVIII of the Social
Security Act; or
``(v) a community that meets the criteria
for the designation described in subparagraph
(A) or (B) but that has not been so
designated.''.
(b) Medically Underserved Area Training Grants.--Part E of title
VII of such Act is amended by adding at the end thereof the following
new section:
``SEC. 779. MEDICALLY UNDERSERVED AREA TRAINING GRANT PROGRAM.
``(a) Grants.--The Secretary shall award grants to health
professions institutions to expand training programs that are targeted
at those individuals desiring to practice in or serve the needs of
medically underserved communities.
``(b) Plan.--As part of an application submitted for a grant under
this section, the applicant shall prepare and submit a plan that
describes the proposed use of funds that may be provided to the
applicant under the grant.
``(c) Priority.--In awarding grants under this section, the
Secretary shall give priority to applicants that demonstrate the
greatest likelihood of expanding the proportion of graduates who choose
to practice in or serve the needs of medically underserved areas.
``(d) Use of Funds.--An institution that receives a grant under
this section shall use amounts received under such grant to establish
or enhance procedures or efforts to--
``(1) rotate health professions students from such
institution to clinical settings the focus of which is to serve
the residents of medically underserved communities;
``(2) appoint health professionals whose practices serve
medically underserved areas to serve as preceptors to supervise
training in such settings;
``(3) provide classroom instruction on practice
opportunities involving medically underserved communities;
``(4) provide service contingent scholarship or loan
repayment programs for students and residents to encourage
practice in or service to underserved communities;
``(5) recruit students who are most likely to elect to
practice in or provide service to medically underserved
communities; or
``(6) provide other training methodologies that demonstrate
a significant commitment to the expansion of the proportion of
graduates that elect to practice in or serve the needs of
medically underserved communities.
``(e) Administration.--
``(1) Required contribution.--An institution that receives
a grant under this section shall contribute, from non-Federal
sources, either in cash or in-kind, an amount equal to the
amount of the grant to the activities to be undertaken with the
grant funds.
``(2) Limitation.--An institution that receives a grant
under this section, shall use amounts received under such grant
to supplement, not supplant, amounts made available by such
institution for activities of the type described in subsection
(d) in the fiscal year preceding the year for which the grant
is received.
``(f) Definitions.--As used in this section:
``(1) Graduate.--The term `graduate' means, unless
otherwise specified, an individual who has successfully
completed all training and residency requirements necessary for
full certification in the health professions discipline that
such individual has selected.
``(2) Medically underserved community.--The term `medically
underserved community' means--
``(A) an area designated under section 332 as a
health professional shortage area;
``(B) an area designated as a medically underserved
area under this Act;
``(C) populations served by migrant health centers
under section 329, community health centers under
section 330, or Federally qualified health centers
under section 1905(l)(2)(B) of the Social Security Act;
``(D) a community that is certified as underserved
by the Secretary for purposes of participation in the
rural health clinic program under title XVIII of the
Social Security Act; or
``(E) a community that meets the criteria for the
designation described in subparagraph (A) or (B) but
that has not been so designated.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $15,000,000 for each of the
fiscal years 1993 and 1994, and such sums as may be necessary for each
of the fiscal years 1995 through 1997.''.
(c) Health Professions Training Grants.--Part E of title VII of
such Act (as amended by subsection (b)) is further amended by adding at
the end thereof the following new section:
``SEC. 780. HEALTH PROFESSIONS INTEGRATION GRANT PROGRAM.
``(a) Grants.--The Secretary shall award grants to eligible
regional consortia to enhance and expand coordination among various
health professions programs, particularly in medically underserved
rural areas.
``(b) Eligible Regional Consortium.--
``(1) In general.--To be eligible to receive a grant under
subsection (a), an entity must--
``(A) be a regional consortium consisting of at
least one medical school and at least one other health
professions school that is not a medical school; and
``(B) prepare and submit an application containing
a plan of the type described in paragraph (2).
``(2) Plan.--As part of the application submitted by a
consortium under paragraph (1)(B), the consortium shall prepare
and submit a plan that describes the proposed use of funds that
may be provided to the consortium under the grant.
``(c) Use of Funds.--A consortium that receives a grant under this
section shall use amounts received under such grant to establish or
enhance--
``(1) strategies for better clinical cooperation among
different types of health professionals;
``(2) classroom instruction on integrated practice
opportunities, particularly targeted toward rural areas;
``(3) integrated clinical clerkship programs that make use
of students in differing health professions schools; or
``(4) other training methodologies that demonstrate a
significant commitment to the expansion of clinical cooperation
among different types of health professionals, particularly in
underserved rural areas.
``(d) Limitation.--A consortium that receives a grant under this
section, shall use amounts received under such grant to supplement, not
supplant, amounts made available by such institution for activities of
the type described in subsection (c) in the fiscal year preceding the
year for which the grant is received.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $7,000,000 for each of the
fiscal years 1993 and 1994, and such sums as may be necessary for each
of the fiscal years 1995 through 1997.''.
SEC. 516. RURAL HEALTH EXTENSION NETWORKS.
Title XVII of the Public Health Service Act (42 U.S.C. 300u et
seq.) is amended by adding at the end thereof the following new
section:
``SEC. 1709. RURAL HEALTH EXTENSION NETWORKS.
``(a) Grants.--The Secretary, acting through the Health Resources
and Services Administration, may award competitive grants to eligible
entities to enable such entities to facilitate the development of
networks among rural and urban health care providers to preserve and
share health care resources and enhance the quality and availability of
health care in rural areas. Such networks may be statewide or
regionalized in focus.
``(b) Eligible Entities.--To be eligible to receive a grant under
subsection (a) an entity shall--
``(1) be a rural health extension network that meets the
requirements of subsection (c);
``(2) prepare and submit to the Secretary an application at
such time, in such form and containing such information as the
Secretary may require; and
``(3) meets such other requirements as the Secretary
determines appropriate.
``(c) Networks.--For purposes of subsection (b)(1), a rural health
extension network shall be an association or consortium of three or
more rural health care providers, and may include one or more urban
health care provider, for the purposes of applying for a grant under
this section and using amounts received under such grant to provide the
services described in subsection (d).
``(d) Services.--
``(1) In general.--An entity that receives a grant under
subsection (a) shall use amounts received under such grant to--
``(A) provide education and community decision-
making support for health care providers in the rural
areas served by the network;
``(B) utilize existing health care provider
education programs, including but not limited to, the
program for area health education centers under section
746, to provide educational services to health care
providers in the areas served by the network;
``(C) make appropriately trained facilitators
available to health care providers located in the areas
served by the network to assist such providers in
developing cooperative approaches to health care in
such area;
``(D) facilitate linkage building through the
organization of discussion and planning groups and the
dissemination of information concerning the health care
resources where available, within the area served by
the network;
``(E) support telecommunications and consultative
projects to link rural hospitals and other health care
providers, and urban or tertiary hospitals in the areas
served by the network; or
``(F) carry out any other activity determined
appropriate by the Secretary.
``(2) Education.--In carrying out activities under
paragraph (1)(B), an entity shall support the development of an
information and resource sharing system, including elements
targeted towards high risk populations and focusing on health
promotion, to facilitate the ability of rural health care
providers to have access to needed health care information.
Such activities may include the provision of training to enable
individuals to serve as coordinators of health education
programs in rural areas.
``(3) Collection and dissemination of data.--The chief
executive officer of a State shall designate a State agency
that shall be responsible for collecting and regularly
disseminating information concerning the activities of the
rural health extension networks in that State.
``(e) Matching Requirement.--An entity that receives a grant under
subsection (a) shall make available (directly or through donations from
public or private entities), non-Federal contributions towards the
costs of the operations of the network in an amount equal to the amount
of the grant.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $10,000,000 for each of the
fiscal years 1993 through 1997.
``(g) Definition.--As used in this section and section 1710, the
term `rural health care providers' means health care professionals and
hospitals located in rural areas. The Secretary shall ensure that for
purposes of this definition, rural areas shall include any area that
meets any applicable Federal or State definition of rural area.''.
SEC. 517. RURAL MANAGED CARE COOPERATIVES.
Title XVII of the Public Health Service Act (42 U.S.C. 300u et
seq.) as amended by section 516 is further amended by adding at the end
thereof the following new section:
``SEC. 1710. RURAL MANAGED CARE COOPERATIVES.
``(a) Grants.--The Secretary, acting through the Health Resources
and Services Administration, may award competitive grants to eligible
entities to enable such entities to develop and administer cooperatives
in rural areas that will establish an effective case management and
reimbursement system designed to support the economic viability of
essential public or private health services, facilities, health care
systems and health care resources in such rural areas.
``(b) Eligible Entities.--To be eligible to receive a grant under
subsection (a) an entity shall--
``(1) prepare and submit to the Secretary an application at
such time, in such form and containing such information as the
Secretary may require, including a description of the
cooperative that the entity intends to develop and operate
using grant funds; and
``(2) meet such other requirements as the Secretary
determines appropriate.
``(c) Cooperatives.--
``(1) In general.--Amounts provided under a grant awarded
under subsection (a) shall be used to establish and operate a
cooperative made up of all types of health care providers,
hospitals, primary access hospitals, other alternate rural
health care facilities, physicians, rural health clinics, rural
nurse practitioners and physician assistant practitioners,
public health departments and others located in, but not
restricted to, the rural areas to be served by the cooperative.
``(2) Board of directors.--A cooperative established under
paragraph (1) shall be administered by a board of directors
elected by the members of the cooperative, a majority of whom
shall represent rural providers from the local community and
include representatives from the local community. Such
directors shall serve at the pleasure of such members.
``(3) Executive director.--The members of a cooperative
established under paragraph (1) shall elect an executive
director who shall serve as the chief operating officer of the
cooperative. The executive director shall be responsible for
conducting the day to day operation of the cooperative
including--
``(A) maintaining an accounting system for the
cooperative;
``(B) maintaining the business records of the
cooperative;
``(C) negotiating contracts with provider members
of the cooperative; and
``(D) coordinating the membership and programs of
the cooperative.
``(4) Reimbursements.--
``(A) Negotiations.--A cooperative established
under paragraph (1) shall facilitate negotiations among
member health care providers and third party payers
concerning the rates at which such providers will be
reimbursed for services provided to individuals for
which such payers may be liable.
``(B) Agreements.--Agreements reached under
subparagraph (A) shall be binding on the members of the
cooperative.
``(C) Employers.--Employer entities may become
members of a cooperative established under paragraph
(a) in order to provide, through a member third party
payer, health insurance coverage for employees of such
entities. Deductibles shall only be charged to
employees covered under such insurance if such
employees receive health care services from a provider
that is not a member of the cooperative if similar
services would have been available from a member
provider.
``(D) Malpractice insurance.--A cooperative
established under subsection (a) shall be responsible
for identifying and implementing a malpractice
insurance program that shall include a requirement that
such cooperative assume responsibility for the payment
of a portion of the malpractice insurance premium of
providers members.
``(5) Managed care and practice standards.--A cooperative
established under paragraph (1) shall establish joint case
management and patient care practice standards programs that
health care providers that are members of such cooperative must
meet to be eligible to participate in agreements entered into
under paragraph (4). Such standards shall be developed by such
provider members and shall be subject to the approval of a
majority of the board of directors. Such programs shall include
cost and quality of care guidelines including a requirement
that such providers make available preadmission screening,
selective case management services, joint patient care practice
standards development and compliance and joint utilization
review.
``(6) Confidentiality.--Patients records, records of peer
review, utilization review, and quality assurance proceedings
conducted by the cooperative should be considered confidential
and protected from release outside of the cooperative. The
provider members of the cooperative shall be indemnified by the
cooperative for the good faith participation by such members in
such the required activities.
``(d) Linkages.--A cooperative shall create linkages among member
health care providers, employers, and payers for the joint consultation
and formulation of the types, rates, costs, and quality of health care
provided in rural areas served by the cooperative.
``(e) Matching Requirement.--An entity that receives a grant under
subsection (a) shall make available (directly or through donations from
public or private entities), non-Federal contributions towards the
costs of the operations of the network in an amount equal to the amount
of the grant.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $15,000,000 for each of the
fiscal years 1993 through 1997.''.
TITLE VI--MALPRACTICE REFORM
SEC. 601. PRELITIGATION SCREENING PANEL GRANTS.
Part B of title IX of the Public Health Service Act (42 U.S.C. 299b
et seq.) is amended by adding at the end the following new section:
``SEC. 915. PRELITIGATION SCREENING PANEL GRANTS.
``(a) Establishment.--The Assistant Secretary, acting through the
Administrator, shall establish a program of grants to assist States in
establishing prelitigation panels.
``(b) Use of Funds.--A State may use a grant awarded under
subsection (a) to establish prelitigation panels that--
``(1) identify claims of professional negligence that merit
compensation;
``(2) encourage early resolution of meritorious claims
prior to commencement of a lawsuit; and
``(3) encourage early withdrawal or dismissal of
nonmeritorious claims.
``(c) Award of Grants.--The Secretary shall allocate grants under
this section in accordance with criteria issued by the Secretary.
``(d) Application.--To be eligible to receive a grant under this
section, a State, acting through the appropriate State health
authority, shall submit an application at such time, in such manner,
and containing such agreements, assurances, and information as the
Assistant Secretary determines to be necessary to carry out this
section.
``(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary
for each of the 1994 through 1997 fiscal years.''.
TITLE VII--HEALTH PROMOTION AND DISEASE PREVENTION
SEC. 701. DISEASE PREVENTION AND HEALTH PROMOTION PROGRAMS TREATED AS
MEDICAL CARE.
(a) In General.--For purposes of section 213(d)(1) of the Internal
Revenue Code of 1986 (defining medical care), qualified expenditures
(as defined by the Secretary of Health and Human Services) for disease
prevention and health promotion programs shall be considered amounts
paid for medical care.
(b) Effective Date.--Subsection (a) shall apply to amounts paid in
taxable years beginning after December 31, 1992.
SEC. 702. WORKSITE WELLNESS GRANT PROGRAM.
(a) Grants.--The Secretary of Health and Human Services (hereafter
referred to as the ``Secretary'') shall award grants to States (through
State health departments or other State agencies working in
consultation with the State health agency) to enable such States to
provide assistance to businesses with not to exceed 100 employees for
the establishment and operation of worksite wellness programs for their
employees.
(b) Application.--To be eligible for a grant under subsection (a),
a State shall prepare and submit to the Secretary an application at
such time, in such manner, and containing such information as the
Secretary may require, including--
(1) a description of the manner in which the State intends
to use amounts received under the grant; and
(2) assurances that the State will only use amounts
provided under such grant to provide assistance to businesses
that can demonstrate that they are in compliance with minimum
program characteristics (relative to scope and regularity of
services offered) that are developed by the Secretary in
consultation with experts in public health and representatives
of small business.
Grants shall be distributed to States based on the population of
individuals employed by small businesses.
(c) Program Characteristics.--In developing minimum program
characteristics under subsection (b)(2), the Secretary shall ensure
that all activities established or enhanced under a grant under this
section have clearly defined goals and objectives and demonstrate how
receipt of such assistance will help to achieve established State or
local health objectives based on the National Health Promotion and
Disease Prevention Objectives.
(d) Use of Funds.--Amounts received under a grant awarded under
subsection (a) shall be used by a State to provide grants to businesses
(as described in subsection (a)), nonprofit organizations, or public
authorities, or to operate State-run worksite wellness programs.
(e) Special Emphasis.--In funding business worksite wellness
projects under this section, a State shall give special emphasis to--
(1) the development of joint wellness programs between
employers;
(2) the development of employee assistance programs dealing
with substance abuse;
(3) maximizing the use and coordination with existing
community resources such as nonprofit health organizations; and
(4) encourage participation of dependents of employees and
retirees in wellness programs.
(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, such sums as may be necessary
in each of the fiscal years 1994 through 1998.
SEC. 703. EXPANDING AND IMPROVING SCHOOL HEALTH EDUCATION.
(a) Authorization of Appropriations.--There are authorized to be
appropriated to carry out subsection (b), such sums as may be necessary
for each of the fiscal years 1994 through 1998.
(b) General Use of Funds.--The Secretary of Health and Human
Services shall use amounts appropriated under subsection (a) to expand
comprehensive school health education programs administered by the
Centers for Disease Control and Prevention under sections 301 and 311
of the Public Health Service Act (42 U.S.C. 241 and 243).
(c) Specific Use of Funds.--In meeting the requirement of
subsection (b), the Secretary of Health and Human Services shall expand
the number of children receiving planned, sequential kindergarten
through 12th grade comprehensive school education as a component of
comprehensive programs of school health, including
(1) physical education programs that promote lifelong
physical activity;
(2) healthy school food service selections;
(3) programs that promote a healthy and safe school
environment;
(4) schoolsite health promotion for faculty and staff;
(5) integrated school and community health promotion
efforts; and
(6) school nursing disease prevention and health promotion
services.
(d) Coordination of Existing Programs.--The Secretary of Health and
Human Services, the Secretary of Education and the Secretary of
Agriculture shall work cooperatively to coordinate existing school
health education programs within their Departments in a manner that
maximized the efficiency and effectiveness of Federal expenditures in
this area.
TITLE VIII--PRESCRIPTION DRUG COST CONTAINMENT
SEC. 801. REDUCTION IN POSSESSIONS TAX CREDIT FOR EXCESSIVE
PHARMACEUTICAL INFLATION.
(a) In General.--Section 936 of the Internal Revenue Code of 1986
(relating to Puerto Rico and possession tax credit) is amended by
adding at the end the following new subsection:
``(i) Reduction for Excessive Pharmaceutical Inflation.--
``(1) In general.--In the case of any manufacturer of
single source drugs or innovator multiple source drugs, the
amount by which the credit under this section for the taxable
year (determined without regard to this subsection) exceeds the
manufacturer's wage base for such taxable year shall be reduced
by the product of--
``(A) the amount of such excess, multiplied by
``(B) the sum of the reduction percentages for each
single source drug or innovator multiple source drug of
the manufacturer for such taxable year.
``(2) Manufacturer's wage base.--For purposes of this
subsection--
``(A) In general.--The manufacturer's wage base for
any taxable year is equal to the total amount of wages
paid during such taxable year by the manufacturer to
eligible employees in Puerto Rico with respect to the
manufacture of single source drugs and innovator
multiple source drugs.
``(B) Eligible employees.--The term `eligible
employee' means any employee of the manufacturer (as
defined in section 3121(d)) who is a bona fide resident
of Puerto Rico and subject to tax by Puerto Rico on
income from sources within and without Puerto Rico
during the entire taxable year.
``(C) Wages.--The term `wages' has the meaning
given such term by section 3121(a).
``(3) Reduction percentage.--For purposes of this
subsection--
``(A) In general.--The reduction percentage for any
drug for any taxable year is the percentage determined
by multiplying--
``(i) the sales percentage for such drug
for such taxable year, by
``(ii) the price increase percentage for
such drug for such taxable year.
``(B) Sales percentage.--The sales percentage for
any drug for any taxable year is the percentage
determined by dividing--
``(i) the total sales of such drug by the
manufacturer for such taxable year, by
``(ii) the total sales of all single source
drugs and innovator multiple source drugs by
the manufacturer for such taxable year.
``(C) Price increase percentage.--The price
increase percentage for any drug for any taxable year
is the percentage determined by multiplying--
``(i) 20, times
``(ii) the excess (if any) of--
``(I) the percentage increase in
the average manufacturer's price for
such drug for the taxable year over
such average price for the base taxable
year, over
``(II) the percentage increase in
the Consumer Price Index (as defined in
section 1(g)(5)) for the taxable year
over the base taxable year.
``(D) Total sales.--
``(i) Domestic sales only.--Total sales
shall only include sales for use or consumption
in the United States.
``(ii) Sales to related parties not
included.--Total sales shall not include sales
to any related party (as defined in section
267(b)).
``(E) Average manufacturer's price.--The term
`average manufacturer's price' for any taxable year
means the average price paid to the manufacturer by
wholesalers or direct buyers and purchasers for each
single source drug or innovator multiple source drug
sold to the various classes of purchasers.
``(F) Base taxable year.--The base taxable year for
any single source drug or innovator multiple source
drug is the later of--
``(i) the last taxable year ending in 1991,
or
``(ii) the first taxable year beginning
after the date on which the marketing of such
drug begins.
``(4) Other definitions.--For purposes of this subsection--
``(A) Manufacturer.--
``(i) In general.--The term `manufacturer'
means any person which is engaged in--
``(I) the production, preparation,
propagation, compounding, conversion,
or processing of prescription drug
products, either directly or indirectly
by extraction from substances of
natural origin, or independently by
means of chemical synthesis, or by a
combination of extraction and chemical
synthesis, or
``(II) in the packaging,
repackaging, labeling, relabeling, or
distribution of prescription drug
products.
Such term does not include a wholesale
distributor of drugs or a retail pharmacy
licensed under State law.
``(ii) Controlled groups.--For purposes of
clause (i)--
``(I) Controlled group of
corporations.--All corporations which
are members of the same controlled
group of corporations shall be treated
as 1 person. For purposes of the
preceding sentence, the term
`controlled group of corporations' has
the meaning given to such term by
section 1563(a), except that `more than
50 percent' shall be substituted for
`at least 80 percent' each place it
appears in section 1563(a)(1), and the
determination shall be made without
regard to subsections (a)(4) and
(e)(3)(C) of section 1563.
``(II) Partnerships,
proprietorships, etc., which are under
common control.--Under regulations
prescribed by the Secretary, all trades
or business (whether or not
incorporated) which are under common
control shall be treated as 1 person.
The regulations prescribed under this
subclause shall be based on principles
similar to the principles which apply
in the case of subclause (I).
``(B) Single source drug.--The term `single source
drug' means a drug or biological which is produced or
distributed under an original new drug application or
product licensing application, including a drug product
or biological marketed by any cross-licensed producers
or distributors operating under the new drug
application or product licensing application.
``(C) Innovator multiple source drug.--The term
`innovator multiple source drug' means a multiple
source drug (within the meaning of section
1927(k)(7)(A)(i) of the Social Security Act) that was
originally marketed under an original new drug
application or a product licensing application approved
by the Food and Drug Administration.
``(5) Special rules.--For purposes of this subsection--
``(A) Dosage treatment.--Except as provided by the
Secretary, each dosage form and strength of a single
source drug or innovator multiple source drug shall be
treated as a separate drug.
``(B) Rounding of percentages.--Any percentage
shall be rounded to the nearest hundredth of a
percent.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
TITLE IX--FINANCING
SEC. 901. REPEAL OF DOLLAR LIMITATION ON AMOUNT OF WAGES SUBJECT TO
HOSPITAL INSURANCE TAX.
(a) Hospital Insurance Tax.--
(1) Paragraph (1) of section 3121(a) of the Internal
Revenue Code of 1986 (defining wages) is amended--
(A) by inserting ``in the case of the taxes imposed
by sections 3101(a) and 3111(a)'' after ``(1)'',
(B) by striking ``applicable contribution base (as
determined under subsection (x))'' each place it
appears and inserting ``contribution and benefit base
(as determined under section 230 of the Social Security
Act)'', and
(C) by striking ``such applicable contribution
base'' and inserting ``such contribution and benefit
base''.
(2) Section 3121 of such Code is amended by striking
subsection (x).
(b) Self-Employment Tax.--
(1) Subsection (b) of section 1402 of such Code is
amended--
(A) by striking ``(1) that part of net'' and
inserting ``(1) in the case of the tax imposed by
section 1401(a), that part of net'',
(B) by striking ``applicable contribution base (as
determined under subsection (k))'' and inserting
``contribution and benefit base (as determined under
section 230 of the Social Security Act)'',
(C) by inserting ``and'' after ``section
3121(b),'', and
(D) by striking ``and (C) includes'' and all that
follows through ``3111(b)''.
(2) Section 1402 of such Code is amended by striking
subsection (k).
(c) Railroad Retirement Tax.--
(1) Subparagraph (A) of section 3231(e)(2) of such Code is
amended by adding at the end thereof the following new clause:
``(iii) Hospital insurance taxes.--Clause
(i) shall not apply to--
``(I) so much of the rate
applicable under section 3201(a) or
3221(a) as does not exceed the rate of
tax in effect under section 3101(b),
and
``(II) so much of the rate
applicable under section 3211(a)(1) as
does not exceed the rate of tax in
effect under section 1402(b).''
(2) Clause (i) of section 3231(e)(2)(B) of such Code is
amended to read as follows:
``(i) Tier 1 taxes.--Except as provided in
clause (ii), the term `applicable base' means
for any calendar year the contribution and
benefit base determined under section 230 of
the Social Security Act for such calendar
year.''
(d) Increased Revenues Not Deposited in Hospital Insurance Trust
Fund.--Section 1817(a) of the Social Security Act (42 U.S.C. 1395i(a))
is amended by adding at the end the following new sentence: ``For
purposes of this subsection, the amount of taxes imposed by sections
1401(b), 3101(b), 3111(b) of the Internal Revenue Code of 1986 shall be
determined without regard to the amendments made by section 221 of the
Managed Competition Act of 1992.''.
(e) Technical Amendments.--
(1) Paragraph (1) of section 6413(c) of the Internal
Revenue Code of 1986 is amended by striking ``section 3101 or
section 3201'' and inserting ``section 3101(a) or section
3201(a) (to the extent the rate applicable under section
3201(a) as does not exceed the rate of tax in effect under
section 3101(a))''.
(2) Subparagraphs (B) and (C) of section 6413(c)(2) of such
Code are each amended by striking ``section 3101'' each place
it appears and inserting ``section 3101(a)''.
(3) Subsection (c) of section 6413 of such Code is amended
by striking paragraph (3).
(4) Sections 3122 and 3125 of such Code are each amended by
striking ``applicable contribution base limitation'' and
inserting ``contribution and benefit base limitation''.
(f) Effective Date.--The amendments made by this section shall
apply to 1994 and later calendar years.
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