I

103D CONGRESS

2D SESSION H. R. 4561

To amend the Public Health Service Act and the Social Security Act to

provide improved and expanded access to comprehensive primary health

care and related services for medically underserved and vulnerable populations through the establishment of financial support for the development of community-based health networks and plans, to allow federallyassisted health centers to expand their capacity and develop and operate

new sites to serve underserved and vulnerable populations, to provide

certain financial and other protections for such networks, plans, and

health centers, and to facilitate the involvement of, and payment to,

entities serving underserved and vulnerable populations in the training

and education of primary care health professionals.

IN THE HOUSE OF REPRESENTATIVES

JUNE 9, 1994

Mr. RANGEL (for himself, Mr. RICHARDSON, Mr. BONIOR, Mr. OWENS, Mr.

SANDERS, Mr. PARKER, Mrs. CLAYTON, Mr. RUSH, Mr. ABERCROMBIE,

Mrs. MEEK, Mr. OLVER, Mr. DELLUMS, Ms. VELA ́ZQUEZ, Mr. BARRETT

of Wisconsin, and Mr. EDWARDS of California) introduced the following

bill; which was referred jointly to the Committees on Energy and Commerce and Ways and Means

A BILL

To amend the Public Health Service Act and the Social

Security Act to provide improved and expanded access

to comprehensive primary health care and related services for medically underserved and vulnerable populations

through the establishment of financial support for the

development of community-based health networks and

plans, to allow federally-assisted health centers to expand
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their capacity and develop and operate new sites to serve

underserved and vulnerable populations, to provide certain financial and other protections for such networks,

plans, and health centers, and to facilitate the involvement of, and payment to, entities serving underserved

and vulnerable populations in the training and education

of primary care health professionals.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; FINDINGS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Access to Community Health Care Act of 1994’’.

6 (b) FINDINGS.—The Congress finds the following:

7 (1) Efforts to assure universal coverage for

8 comprehensive benefits are a vitally important part

9 of achieving effective national health care reform.

10 (2) The provision of universal insurance cov11 erage, while vitally important, will not alone address

12 the critical needs of the estimated 3 million Ameri13 cans who are underserved by the current health care

14 system, and who lack access to the most basic health

15 services.

16 (3) Access to, and coordination of, health care

17 is especially difficult for those Americans who live in

18 underserved rural and inner-city communities or who

19 are members of other vulnerable groups, including

20 migratory and seasonal agricultural workers, persons
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1 who are homeless, those with HIV infection, those

2 who suffer from substance addiction, high-risk preg3 nant women, infants and children, immigrants and

4 refugees, and persons with disabilities.

5 (4) The consequences of poor access to, and

6 lack of coordination of, health care among the un7 derserved is evidenced by elevated infant and child8 hood illness and mortality rates, over-utilization of

9 emergency rooms and other inappropriate providers

10 for primary care services, and hospitalization rates

11 for preventable conditions that are significantly

12 higher than the national average.

13 (5) Efforts to provide increased access to, and

14 coordinate the delivery of, vital primary health care

15 and related services for underserved and vulnerable

16 Americans will not only contribute to improved

17 health status, but will also reduce unnecessary care

18 and the overall costs of health care.

19 (6) Essential community providers, such as the

20 community and migrant health centers, collectively

21 referred to as health centers, which serve more than

22 7 million needy Americans, provide an effective and

23 proven model for extending access to all underserved

24 and vulnerable Americans.
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1 (7) Support for the development and operation

2 of new and expanded sites served by the health cen3 ters and similar primary health care providers, is

4 needed to extend access to comprehensive primary

5 health care services for the millions of Americans

6 who remain unserved or underserved.

7 (8) As managed care has achieved recognition

8 as a means of organizing and paying for health care

9 for many Americans, there is a need to assure that

10 such arrangements develop in a manner that is re11 sponsive to the needs of underserved people and

12 communities. Of particular importance is develop13 ment of community-based networks of health centers

14 and other essential community providers that offer

15 high quality care to individuals and that endeavor to

16 both contain costs and reduce unnecessary or inap17 propriate use of high-cost services.

18 (9) Essential community providers such as

19 health centers and community-based networks serv20 ing such populations must be afforded certain pro21 tections from full financial risk for the cost of serv22 ing such populations and communities. Protections

23 are needed because underserved populations typically

24 require more frequent and intensive care, and be25 cause reduced use of higher-cost inpatient, emer-
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1 gency and specialty care will depend on increased

2 provision of primary care as well as related and ena3 bling services.

4 (10) Health centers and community-based net5 works that participate in arrangements which

6 produce savings of grant funds or increased revenues

7 that will be used to further expand or improve serv8 ices to medically underserved populations should be

9 afforded protection from anti-kickback laws.

10 (11) Health centers, community-based networks

11 and other essential community providers of com12 prehensive primary care services to the underserved

13 provide the most appropriate locations and condi14 tions for educating and training primary health care

15 professionals, and should be centrally involved in

16 such education and training efforts.

17 SEC. 2. GRANTS FOR THE DEVELOPMENT AND OPERATION

18 OF HEALTH CENTERS AND COMMUNITY

19 HEALTH NETWORKS AND HEALTH PLANS.

20 (a) ENABLING AND OUTREACH SERVICES.—Section

21 330(a) of the Public Health Service Act (42 U.S.C.

22 254c(a)) is amended—

23 (1) in paragraph (5), by striking ‘‘and’’ at the

24 end;
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1 (2) in paragraph (6), by inserting before ‘‘pa2 tient case management services’’ the following: ‘‘the

3 services of outreach workers and others to deter4 mine, or assist in determining, the eligibility of indi5 viduals to receive services and benefits under Fed6 eral, State and local health programs, and to assist

7 such individuals in enrolling in such programs, and

8 other’’;

9 (3) in paragraph (6), by adding ‘‘and’’ after the

10 comma at the end; and

11 (4) by inserting after paragraph (6) the follow12 ing new paragraph:

13 ‘‘(7) enabling services, defined as services that

14 are not otherwise described in this subsection, that

15 promote access to necessary health and other human

16 and social services, and that increase the capacity of

17 individuals to utilize the items and services included

18 as covered benefits under Federal, State, and local

19 health programs,’’.

20 (b) SERVICES AUTHORIZED AT SCHOOLS AND OTHER

21 APPROPRIATE LOCATIONS.—Section 330(a) of the Public

22 Health Service Act (42 U.S.C. 254c(a)) is amended in

23 the matter preceding paragraph (1) by striking ‘‘pro24 vides—’’ and inserting the following: ‘‘provides, at appro-
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1 priate locations, which may include schools and other

2 sites—’’.

3 (c) COMMUNITY HEALTH SERVICE NETWORKS AND

4 PLANS.—Section 330 of the Public Health Service Act (42

5 U.S.C. 254c) is amended by adding at the end the follow6 ing subsection:

7 ‘‘(l)(1) The Secretary may make a grant to one or

8 more community health centers that receive grants under

9 subsection (d)(l)(A), or to one or more Federally qualified

10 health centers as defined in section 1861(aa)(4) of the So11 cial Security Act, to support the development of a commu12 nity health service network or plan as defined in para13 graph (3). The costs for which a grant may be made under

14 this paragraph include, but are not limited to—

15 ‘‘(A) costs of developing the network or plan as

16 a corporate entity, including planning and needs as17 sessment, and costs of developing appropriate con18 tractual agreements between the participating pro19 viders and the network or plan;

20 ‘‘(B) costs of development of internal manage21 ment for the network or plan, as well as costs of de22 velopment of financial, legal, clinical, information

23 systems (exclusive of systems that the Secretary de24 termines are information highways), billing and re25 porting systems for the network or plan;
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1 ‘‘(C) costs of development of additional sites

2 that will assure or enhance the provision and acces3 sibility of primary health care and enabling services

4 to medically underserved populations, and residents

5 of health professional shortage areas;

6 ‘‘(D) costs of recruitment, training, compensa7 tion of health professionals and administrative staff;

8 ‘‘(E) costs of acquisition, expansion, moderniza9 tion of facilities, conversion of unneeded hospital fa10 cilities to facilities that will assure or enhance the

11 provision and accessibility of primary health care

12 and enabling services, as well as construction of new

13 facilities and purchase of major equipment (includ14 ing equipment necessary for support of external and

15 internal information systems);

16 ‘‘(F) reserves required for furnishing services

17 on a prepaid basis; and

18 ‘‘(G) such other costs as are necessary to as19 sure that the network or plan will be ready to as20 sume operational status by the end of the planning

21 and development phase.

22 ‘‘(2) The Secretary may make grants to support the

23 operation of community health service networks or plans

24 which received support under paragraph (1) for planning

25 and development and which meet the requirements of sub-
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1 paragraphs (A) and (B) of paragraph (3). The costs for

2 which a grant may be made include, but are not limited

3 to, the costs described in paragraph (1), and the otherwise

4 unreimbursed costs of furnishing services described in sub5 section (a) (except for the costs of inpatient hospital serv6 ices, extended care facility services and long-term physical

7 medicine) to medically underserved populations and resi8 dents of health professional shortage areas and other

9 hard-to-reach populations.

10 ‘‘(3)(A)(i) For purposes of this section, the term

11 ‘community health service network’ means a consortium

12 of health care providers that meets the following require13 ments:

14 ‘‘(I) The consortium is a public or nonprofit

15 private entity whose principal purpose is, with re16 spect to the items and services that are described in

17 subsection (a), to provide all or a portion of such

18 items and services to a significant number of indi19 viduals who are members of a medically underserved

20 population or populations, residents of health profes21 sional shortage areas and other hard-to-reach popu22 lations in the network service area.

23 ‘‘(II) The participation of health care providers

24 in the consortium is governed by a written agree-
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1 ment to which each of the participating providers is

2 a party.

3 ‘‘(ii) For purposes of this section, the term ‘commu4 nity health service plan’ means a health plan that meets

5 the following conditions:

6 ‘‘(I) The health plan is a public or nonprofit

7 private entity, as defined in section 1903(m)(2)(A)

8 of the Social Security Act, whose principal purpose

9 is, with respect to the items and services that are

10 described in subsection (a) to provide all or a por11 tion of the items and services to a significant num12 ber of individuals who are members of a medically

13 underserved population or populations, residents of

14 health professional shortage areas in the plan’s serv15 ice area, and other hard-to-reach populations in the

16 plan’s service area.

17 ‘‘(II) The participation of health care providers

18 in the health plan is governed by a written agree19 ment to which each of the participating providers is

20 a party.

21 ‘‘(B) A community health service network or plan

22 must—

23 ‘‘(i) be governed by individuals a majority of

24 whom are registered patients of the network or plan
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1 or are representatives of the entities described in

2 clause (iv)(I), or a combination of such individuals;

3 ‘‘(ii) assure the provision of services through

4 participating providers (who may provide services di5 rectly or through contract) in accordance with all re6 quirements of subsection (e)(3) except subparagraph

7 (G);

8 ‘‘(iii) be reasonable in size to accomplish the ob9 jectives of this section;

10 ‘‘(iv) include as participating providers (unless

11 such provider(s) decline to participate): (I) at a min12 imum, all entities providing health services under

13 grants under this section or section 329 or 340, and

14 other Federally qualified health centers certified in

15 accordance with section 1861(aa)(4) of the Social

16 Security Act in the service area of the plan or net17 work; (II) a reasonable number and combination (to

18 assure that services will be comprehensive and acces19 sible) of public or nonprofit private entities that are

20 entities providing health services under grants under

21 section 340A, 1001, or title XXIII, under title V of

22 the Social Security Act, under title V of the Indian

23 Health Care Improvement Act, and under the Indian

24 Self-Determination Act; that are rural health clinics

25 certified in accordance with section 1861(aa)(2) of
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1 the Social Security Act; that are local and State

2 public health agencies; and that collectively provide

3 primary health and enabling services to residents of

4 the network or plan service area; and (III) at the op5 tion of the network or plan, any other public or pri6 vate entity that provides primary health, enabling

7 services and/or supplemental health services to the

8 population served by the network or plan; and

9 ‘‘(v) assure that each participating provider

10 agrees to provide services regardless of an individ11 ual’s ability to pay.

12 ‘‘(4)(A) No grant may be made under paragraph (1)

13 or (2) unless an application therefor is submitted to, and

14 approved by, the Secretary. Such an application shall be

15 submitted in such form and manner and shall contain such

16 information as the Secretary shall prescribe, including (i)

17 with respect to applications for planning and development

18 the information required by subsection (c)(4) and a dem19 onstration of how the applicant will meet all requirements

20 of paragraph (3) of this subsection by the end of the pe21 riod of support under paragraph (1); and (ii) with respect

22 to applications for operations, the information required by

23 subsection (e).

24 ‘‘(B) In evaluating applications submitted under

25 paragraph (1), the Secretary shall consider—
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1 ‘‘(i) the extent to which the applicant proposes

2 to provide or expand the provision of services de3 scribed in subsection (a) in a manner which is co4 ordinated and assures accessibility of service to

5 medically underserved populations and health profes6 sional shortage areas and which will otherwise meet

7 the requirements of paragraph (3) when the network

8 or plan assumes operational status;

9 ‘‘(ii) the relative need of the populations and

10 areas proposed to be served for the services proposed

11 to be provided;

12 ‘‘(iii) whether the proposed network or plan de13 scribed in the application is reasonable in size and

14 capacity;

15 ‘‘(iv) whether the proposed network or plan will

16 address such other needs of the medically under17 served population or populations and health profes18 sional shortage areas to be served as the applicant

19 or the Secretary may identify;

20 ‘‘(v) evidence of State and local support for the

21 network or plan; and

22 ‘‘(vi) whether the proposed budget to support

23 the network or plan, is reasonable and justified, tak24 ing into account other sources of support for the

25 proposed network or plan and considering whether
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1 levels of support previously received from other

2 sources have been maintained.

3 ‘‘(5) No more than two grants may be made for plan4 ning and developing the same network or plan.’’.

5 (d) FLEXIBLE AUTHORITY.—Section 330 of the Pub6 lic Health Service Act, as amended by subsection (c) of

7 this subsection, is amended by adding at the end the fol8 lowing subsection:

9 ‘‘(m)(1) The Secretary may make grants to public

10 and nonprofit private entities that meet all of the require11 ments of subsection (l), except for paragraph (3)(B)(i)

12 and such other requirements of that subsection as the Sec13 retary may decide for good cause to waive, for the purpose

14 of planning, development and operation of health networks

15 and health plans as the Secretary determines will provide

16 or enhance the provision and accessibility of the services

17 that are described in subsection (a) to medically under18 served populations and health professional shortage areas

19 in the service area of the network or plan.

20 ‘‘(2) An application for a planning and development

21 grant must meet the requirements of clause (i) of sub22 section (l)(4)(A) and an application for an operations

23 grant must meet the requirements of clause (ii) of such

24 subsection.
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1 ‘‘(3)(A) In evaluating applications submitted under

2 paragraph (2), the Secretary will consider the factors de3 scribed in subsection (l)(4)(B).

4 ‘‘(B) The Secretary may not approve an application

5 for a grant under this subsection unless the Secretary de6 termines that the network or plan will at a minimum as7 sure significant community involvement. For purposes of

8 this subsection, ‘significant community involvement’ is

9 demonstrated if the health network, or health plan (i) is

10 governed by a board of directors, at least one-third of the

11 members of which are registered patients or representa12 tives of entities described in subsection (l)(3)(B)(iv)(I), or

13 a combination of such individuals; or (ii) has established

14 a patient advisory council, composed of representative reg15 istered patients of the network or plan, through which reg16 istered patients are able to directly participate in decisions

17 that influence the character and implementation of pro18 grams of the network or plan. The Secretary shall give

19 priority to applicants that meet the requirements of clause

20 (i) over applicants that meet the requirements of clause

21 (ii).

22 ‘‘(4) No more than two grants may be made for plan23 ning and developing the same health network or health

24 plan.
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1 ‘‘(5) The costs for which a grant may be made under

2 this subsection for planning and development of a health

3 network or health plan may include the costs described

4 in paragraph (1) of subsection (l), and the costs for which

5 a grant may be made for operation of such a health net6 work or health plan may include the costs described in

7 paragraph (2) of such subsection.’’.

8 (e) AUTHORIZATION OF APPROPRIATIONS.—(1) Sec9 tion 330(g)(1)(A) of the Public Health Service Act (42

10 U.S.C. 254c(g)(1)(A)) is amended by striking ‘‘there are

11 authorized’’ and all that follows and inserting the follow12 ing: ‘‘there are authorized to be appropriated

13 $925,000,000 for fiscal year 1995, $1,425,000,000 for fis14 cal year 1996, $1,625,000,000 for fiscal year 1997,

15 $1,725,000,000 for fiscal year 1998, $1,725,000,000 for

16 fiscal year 1999, $1,725,000,000 for fiscal year 2000, and

17 such sums equal to or greater than $1,725,000,000 as

18 may be necessary for each of the fiscal years 2001 through

19 2005. The preceding sentence constitutes budget authority

20 in advance of appropriations acts and represents the obli21 gation of the Federal government to provide funding for

22 payments in the amounts, and for the fiscal years specified

23 under this section. Such levels shall not be subject to offset

24 or reprogramming for any reason.’’.
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1 (2) Section 330(g)(1) of the Public Health Service

2 Act (42 U.S.C. 254c(g)(1)) is amended by adding at the

3 end the following new subparagraph:

4 ‘‘(C)(i) For the purpose of making grants for activi5 ties authorized under subsection (m), the Secretary is au6 thorized to expend up to 15 percent of the amounts appro7 priated under subparagraph (A) for a fiscal year that are

8 in excess of $625,000,000. The authority of the Secretary

9 to make grants for such activities is effective for any fiscal

10 year only to such extent or in such amounts exceeding

11 $625,000,000 as are provided in appropriation Acts; and

12 (ii) for the purpose of making grants under subsections

13 (c) and (d), the Secretary shall spend not less than

14 $625,000,000 each year.’’.

15 (f) FUNDING PREFERENCES.—Section 330(k) of the

16 Public Health Service Act (42 U.S.C. 254c(k)) is amend17 ed—

18 (1) by inserting ‘‘(1)’’ after ‘‘(k)’’; and

19 (2) by adding at the end the following new

20 paragraph:

21 ‘‘(2) In making grants under this section, the Sec22 retary shall give preference as follows:

23 ‘‘(A) As between an application for a grant

24 under subsection (l) to plan, develop or operate a

25 community health service network or plan and an
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1 application for a grant under subsection (m) to plan,

2 develop or operate a health network or plan serving

3 the same medically underserved population, the Sec4 retary shall give preference to the applicant that is

5 or will be a community health service plan or net6 work in accordance with subsection (l).

7 ‘‘(B) As between two or more applications

8 under subsection (m) to serve the same medically

9 underserved population, preference shall be given to

10 applicants that include as participating providers the

11 greatest number of entities providing health services

12 under grants under section 329, this section, and

13 section 340.’’

14 (g) MISCELLANEOUS AND CONFORMING AMEND15 MENTS.—

16 (1) Section 330(c)(1)(A) of the Public Health

17 Service Act (42 U.S.C. 254c(c)(1)(A)) is amended

18 by inserting ‘‘enabling services,’’ before ‘‘primary

19 health services,’’.

20 (2) Section 330(c) of the Public Health Service

21 Act (42 U.S.C. 254c(c)) is amended—

22 (A) in paragraph (1), in the matter preced23 ing subparagraph (A), by striking ‘‘loans) and

24 shall include—’’ and inserting ‘‘loans).’’; and
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1 (B)(i) by transferring subparagraphs (A)

2 through (D) of paragraph (1) from the current

3 placement of the subparagraphs;

4 (ii) by inserting before such subparagraph

5 (A) the following:

6 ‘‘(4) No grant may be made under paragraph (1) un7 less an application therefor is submitted to and approved

8 by, the Secretary. Such an application shall be submitted

9 in such form and manner and contain such information

10 as the Secretary may prescribe, and shall include:’’; and

11 (iii) by adding paragraph (4) (as so des12 ignated) at the end.

13 (3) Section 330(e)(2) of the Public Health

14 Service Act (42 U.S.C. 254c(e)(2)) is amended—

15 (A) by striking ‘‘a grant under’’ in the

16 matter preceding subparagraph (A) and all that

17 follows through ‘‘also include a demonstration’’

18 and inserting the following: ‘‘a grant under sub19 section (d)(1) shall include a demonstration’’;

20 and

21 (B) by adding at the end the following sen22 tence: ‘‘An application for a grant under sub23 paragraph (B) of subsection (d)(1) must dem24 onstrate how the entity will meet all of the re-
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1 quirements of subsection (e)(3) by the end of

2 the period of support under that subsection.’’.

3 (4) Section 330(e)(3) of the Public Health

4 Service Act (42 U.S.C. 254c(e)(3)) is amended in

5 the matter after and below subparagraph (K) by

6 adding at the end the following sentence: ‘‘The Sec7 retary may not approve an application under sub8 section (d)(l)(B) unless the Secretary determines

9 that the entity will meet all of the requirements of

10 this paragraph by the end of the period of support

11 under that subsection.’’

12 (5) Section 330(e)(6) of the Public Health

13 Service Act (42 U.S.C. 254c(e)(6)) is amended—

14 (A) by striking ‘‘(c) or (d)’’ and inserting

15 ‘‘(c), (d), or (l)’’; and

16 (B) by inserting ‘‘, network, or plan’’ after

17 ‘‘community health center’’.

18 (6) Section 330(f)(1) of the Public Health Serv19 ice Act (42 U.S.C. 254c(f)(1)) is amended by strik20 ing ‘‘(e)(2)’’ and inserting ‘‘(e)(3)’’.

21 (7) Section 330(i) of the Public Health Service

22 Act (42 U.S.C. 254c(i)) is amended in each of para23 graphs (1) and (2) by striking ‘‘under subsection

24 (d)’’ and inserting ‘‘under this section’’.
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1 SEC. 3. ESTABLISHING A PROGRAM OF LOANS AND LOAN

2 GUARANTEES.

3 (a) LOANS AND LOAN GUARANTEES.—Subpart I of

4 part D of title III of the Public Health Service Act (42

5 U.S.C. 254b et seq.) is amended by adding at the end the

6 following new section:

7 ‘‘FEDERAL LOAN AND LOAN GUARANTEE PROGRAM

8 ‘‘SEC. 330A. (a) LOANS AND LOAN GUARANTEES.—

9 ‘‘(1) From the fund established pursuant to

10 subsection (b), the Secretary may make loans and

11 guarantee the payment of principal and interest to

12 Federal and non-Federal lenders for loans to any

13 public or nonprofit private entity that receives a

14 grant under sections 329, 330, or 340 for projects

15 for—

16 ‘‘(A) the acquisition, modernization, expan17 sion or construction of facilities, or the conver18 sion of unneeded hospital facilities to facilities

19 that will assure or enhance the provision and

20 accessibility of primary health care and ena21 bling services to medically underserved popu22 lations;

23 ‘‘(B) the purchase of major equipment, in24 cluding equipment necessary for the support of

25 external and internal information systems;
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1 ‘‘(C) the establishment of reserves required

2 for furnishing services on a prepaid basis; and

3 ‘‘(D) such other capital costs as the Sec4 retary may determine are necessary to enable

5 the grant recipient to achieve the objectives of

6 sections 329, 330 or 340, as applicable.

7 ‘‘(2)(A) In making loans and loan guarantees

8 authorized under this section, the Secretary shall

9 give preference to applications of community health

10 centers that have received grants under section

11 330(d)(1)(A) and community health service net12 works or plans that have received grants under sec13 tion 330(l).

14 ‘‘(B) Priority shall be given to applications for

15 projects for the renovation and modernization of

16 medical facilities necessary to prevent or eliminate

17 safety hazards, avoid noncompliance with licensure

18 or accreditation standards, or projects to replace ob19 solete facilities.

20 ‘‘(C) The Secretary may make loans or loan

21 guarantees for the construction of new buildings

22 only if the Secretary determines that appropriate fa23 cilities are not available through acquiring, mod24 ernizing, expanding or converting existing buildings,

25 or that construction of new buildings will cost less.
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1 ‘‘(3) The Secretary may pay, to the holder of

2 a loan under paragraph (1), for and on behalf of the

3 project for which the loan was made, amounts suffi4 cient to reduce, up to seventy five percent the net

5 effective interest rate otherwise payable on such

6 loan, if the Secretary finds that without such assist7 ance the project could not be undertaken.

8 ‘‘(4) The principal amount of a loan directly

9 made or guaranteed under this section may, when

10 added to any other assistance under sections 329,

11 330, or 340, cover up to one hundred percent of

12 such costs.

13 ‘‘(5) The cumulative total of the principal of

14 the loans outstanding at any time with respect to

15 which guarantees have been issued, or which have

16 been directly made, may not exceed limitations as

17 may be specified in appropriation Acts.

18 ‘‘(6)(A) The Secretary may not approve a loan

19 guarantee for a project under this section unless he

20 determines that the terms, conditions, security (if

21 any), and schedule and amount of repayments with

22 respect to the loan are sufficient to protect the fi23 nancial interests of the United States and are other24 wise reasonable.
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1 ‘‘(B) Guarantees of loans under this section

2 shall be subject to such further terms and conditions

3 as the Secretary determines to be necessary to as4 sure that the purposes of this section will be

5 achieved.

6 ‘‘(7)(A) The Secretary may approve a loan

7 under this section only if—

8 ‘‘(i) the Secretary is reasonably satisfied

9 that the applicant for the project for which the

10 loan would be made will be able to make pay11 ments of principal and interest thereon when

12 due, and—

13 ‘‘(ii) the applicant provides the Secretary

14 with reasonable assurances that there will be

15 available to it such additional funds as may be

16 necessary to complete the project or undertak17 ing with respect to which such loan is re18 quested.

19 ‘‘(B) Any loan made under this section shall (i)

20 have such security, (ii) have such maturity date, (iii)

21 be repayable in such installments, (iv) bear interest

22 at a rate comparable to the rate of interest prevail23 ing on the date the loan is made, with respect to

24 loans guaranteed under this section, minus any in25 terest subsidy made in accordance with paragraph
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1 (3), and (v) be subject to such other terms and con2 ditions (including provisions for recovery in case of

3 default), as the Secretary determines to be necessary

4 to carry out the purposes of this section and sections

5 329, 330 and 340, as applicable, while adequately

6 protecting the financial interests of the United

7 States.

8 ‘‘(C) The Secretary may, for good cause but

9 with due regard to the financial interests of the

10 United States, waive any right of recovery which he

11 has by reasons of the failure of a borrower to make

12 payments of principal of and interest on a loan made

13 under this subsection, except that if such loan is

14 sold and guaranteed, any such waiver shall have no

15 effect upon the Secretary’s guarantee of timely pay16 ment of principal and interest.

17 ‘‘(b) LOAN AND LOAN GUARANTEE FUND.—

18 ‘‘(1) There is established in the Treasury a loan

19 and loan guarantee fund (hereinafter in this sub20 section referred to as the ‘fund’) which shall be

21 available as may be specified from time to time in

22 appropriations Acts to enable the Secretary to make

23 loans, loan guarantees, payment of interest subsidies

24 and such other actions as authorized under sub25 section (a). There shall also be deposited in the fund
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1 amounts received by the Secretary in connection

2 with loans and loan guarantees under this section

3 and other property or assets derived by the Sec4 retary from operations respecting such loans and

5 loan guarantees, including any money derived from

6 the sale of assets.

7 ‘‘(2) There are authorized to be appropriated

8 $100,000,000 for each fiscal year through fiscal year

9 2005 and such additional amounts as may be nec10 essary to provide the sums required for the fund.

11 The preceding sentence constitutes budget authority

12 in advance of appropriations acts and represents the

13 obligation of the federal government to provide fund14 ing for payments in the amounts and for the fiscal

15 years authorized under this section.

16 ‘‘(c) DEFAULT.—

17 ‘‘(1) The Secretary may take such action as

18 may be necessary to prevent a default on a loan

19 made or guaranteed under subsection (a), including

20 the waiver of regulatory conditions, deferral of loan

21 payments, renegotiation of loans, and the expendi22 ture of funds for technical and consultative assist23 ance, for the temporary payment of the interest and

24 principal on such a loan, and for other purposes.
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1 ‘‘(2) The Secretary may take such action, con2 sistent with State law respecting foreclosure proce3 dures, as the Secretary deems appropriate to protect

4 the interest of the United States in the event of a

5 default on a loan made or guaranteed under sub6 section (a), including selling real property pledged as

7 security for such a loan or loan guarantee and for

8 a reasonable period of time taking possession of,

9 holding, and using real property pledged as security

10 for such a loan or loan guarantee.

11 ‘‘(d) APPLICATIONS.—No loan or loan guarantee may

12 be made under this section unless an application is sub13 mitted to and approved by the Secretary. The application

14 shall be in the form and manner and contain such infor15 mation as the Secretary may prescribe, and if the project

16 is for construction, conversion, expansion or moderniza17 tion of a facility, the application shall at a minimum meet

18 the requirements of Section 330(e)(l) of this Act.

19 ‘‘(e) RIGHT OF RECOVERY.—

20 ‘‘(1) If any facility with respect to which a loan

21 or loan guarantee was made under this section, or

22 with respect to which a grant was made under sec23 tions 329, 330, or 340, for construction, acquisition,

24 expansion or modernization, shall at any time within

25 twenty years after completion—
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1 ‘‘(A) be sold or transferred to any entity

2 which is not eligible for assistance under sec3 tions 329, 330 or 340 or which is not approved

4 by the Secretary as a transferee, or

5 ‘‘(B) cease to be a public or nonprofit en6 tity that is eligible for assistance under sections

7 329, 330 or 340,

8 the United States shall be entitled to recover from

9 the recipient of the grant, loan or loan guarantee,

10 the purchaser or transferee, the amount of the

11 grant, loan or loan guarantee plus interest. This

12 right of recovery shall not constitute a lien on any

13 facility with respect to which funds have been paid

14 under this section.

15 ‘‘(2) Notwithstanding paragraph (1), the Sec16 retary shall subordinate or waive the right of recov17 ery and any other Federal interest that may be de18 rived by virtue of a loan or loan guarantee under

19 this section, or a grant under sections 329, 330, or

20 340, to support the construction, acquisition, mod21 ernization, expansion, conversion of a facility or

22 other capital project authorized under this section,

23 where the facility is being used as security for a new

24 loan which will support improvements to the facility,

25 construction of new primary health care facilities or
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1 improvements of health services described in section

2 330(a) to medically underserved populations, or

3 where the facility is being sold in order to finance

4 the acquisition or construction of another facility

5 which will be used for the purposes authorized by

6 sections 329, 330 or 340, provided that the Sec7 retary shall obtain an equivalent right of recovery or

8 interest in the new facility.’’.

9 SEC. 4. AMENDMENTS TO THE MIGRANT HEALTH CENTERS

10 AND HEALTH CARE FOR THE HOMELESS PRO11 GRAM AUTHORITIES.

12 (a) ENABLING AND OUTREACH SERVICES.—(1) Sec13 tion 329(a)(1) of the Public Health Service Act (42 U.S.C.

14 254b(a)(1)) is amended—

15 (A) in the matter preceding subparagraph (A),

16 by striking ‘‘provides—’’ and inserting the following:

17 ‘‘provides, at appropriate locations, which may in18 clude schools and other sites—’’;

19 (B) in subparagraph (H), by inserting before

20 ‘‘patient case management services’’ the following:

21 ‘‘the services of outreach workers and others to de22 termine, or assist in determining, the eligibility of

23 individuals to receive services and benefits under

24 Federal, State and local health programs, and to as-
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1 sist such individuals in enrolling in such programs,

2 and other’’;

3 (C) in subparagraph (G), by striking ‘‘and’’ at

4 the end;

5 (D) in subparagraph (H), by adding ‘‘and’’

6 after the comma at the end; and

7 (E) by inserting after subparagraph (H) the

8 following new subparagraph:

9 ‘‘(I) enabling services, defined as services that

10 are not otherwise described in this subsection, that

11 promote access to necessary health and other human

12 and social services, and that increase the capacity of

13 individuals to utilize the items and services that are

14 included as covered benefits under Federal, State, or

15 local health programs,’’.

16 (2) Section 340(i) of the Public Health Service Act

17 (42 U.S.C. 256(i)) is amended—

18 (A) in paragraph (1)—

19 (i) in subparagraph (B), by adding ‘‘and’’

20 after the semicolon at the end;

21 (ii) in subparagraph (C), by striking ‘‘; or’’

22 and inserting a period; and

23 (iii) by striking subparagraph (D); and

24 (B) in paragraph (2), by amending the para25 graph to read as follows:
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1 ‘‘(2) Any grant may include the acquisition, expan2 sion, or modernization of existing buildings, and the con3 struction of new buildings (if the Secretary determines

4 that appropriate facilities are not available through the ac5 quisition, expansion or modernization of existing build6 ings, or that construction of a new building will cost

7 less).’’

8 (3) Section 340(r)(1) of the Public Health Service

9 Act (42 U.S.C. 256(r)(1)) is amended by inserting before

10 ‘‘and substance abuse services’’ the following: ‘‘, supple11 mental health services, enabling services,’’.

12 (4) Section 340(r)(6) of the Public Health Service

13 Act (42 U.S.C. 256(r)(6)) is amended to read as follows:

14 ‘‘(6) The terms ‘primary health services’, ‘sup15 plemental health services’ and ‘enabling services’,

16 have the meanings given such terms in section

17 330.’’.

18 (b) AUTHORIZATION OF APPROPRIATIONS.—(1) Sec19 tion 329(h)(1)(A) of the Public Health Service Act (42

20 U.S.C. 254b(h)(1)(A)) is amended by striking ‘‘there are

21 authorized’’ and all that follows and inserting the follow22 ing: ‘‘there are authorized to be appropriated

23 $100,000,000 for fiscal year 1995, $110,000,000 for fis24 cal year 1996, $120,000,000 for fiscal year 1997,

25 $130,000,000 for fiscal year 1998, $140,000,000 for fis-
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1 cal year 1999, $150,000,000 for fiscal year 2000, and

2 such sums equal to or greater than $150,000,000 as may

3 be necessary for each of the five fiscal years thereafter.

4 The preceding sentence constitutes budget authority in ad5 vance of appropriations acts and represents the obligation

6 of the Federal government to provide funding for pay7 ments in the amounts, and for the fiscal years specified

8 under this section. Such levels shall not be subject to offset

9 or reprogramming for any reason.’’.

10 (2) Section 340(q)(1) of the Public Health Service

11 Act is amended by striking ‘‘There are authorized’’ and

12 all that follows and inserting the following: ‘‘There are au13 thorized to be appropriated to carry out this section

14 $100,000,000 for fiscal year 1995, $110,000,000 for fis15 cal year 1996, $120,000,000 for fiscal year 1997,

16 $130,000,000 for fiscal year 1998, $140,000,000 for fis17 cal year 1999, $150,000,000 for fiscal year 2000, and

18 such sums equal to or greater than $150,000,000 as may

19 be necessary for each of the five fiscal years thereafter.

20 The preceding sentence constitutes budget authority in ad21 vance of appropriations acts and represents the obligation

22 of the Federal government to provide funding for pay23 ments in the amounts, and for the fiscal years specified

24 under this section. Such levels shall not be subject to offset

25 or reprogramming for any reason.’’.
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1 SEC. 5. EXPANDING THE NATIONAL HEALTH SERVICE

2 CORPS.

3 (a) ADDITIONAL FUNDING FOR CORPS PROGRAMS.—

4 Section 338(a) of the Public Health Service Act (42

5 U.S.C. 254k) is amended—

6 (1) by redesignating paragraph (2) as para7 graph (3); and

8 (2) by inserting after paragraph (1) the follow9 ing new paragraph:

10 ‘‘(2)(A) For the purpose of carrying out this para11 graph, there are authorized to be appropriated

12 $50,000,000 for fiscal year 1995, $100,000,000 for fiscal

13 year 1996, and $200,000,000 for each of the fiscal years

14 1997 through 2000. The preceding sentence constitutes

15 budget authority in advance of appropriations acts and

16 represents the obligation of the Federal government to

17 provide funding for payments in the amounts, and for the

18 fiscal years, specified under this section. Such levels shall

19 not be subject to offset or reprogramming for any reason.

20 ‘‘(B) The authorizations of appropriations established

21 in subparagraph (A) are in addition to the authorization

22 of appropriations in paragraph (1).

23 ‘‘(C) Of the amounts appropriated under subpara24 graph (A), the Secretary shall reserve such amounts as

25 may be necessary to ensure that, of the aggregate number

26 of individuals who are participants in the Scholarship pro-
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1 gram under section 338A, or in the Loan Repayment Pro2 gram under section 338B, the total number who are being

3 educated as nurses or are serving as nurses, respectively,

4 is increased to 20 percent.

5 ‘‘(D) Notwithstanding section 333(a)(3) and the pri6 orities stated in section 333A for approval of applications

7 for the assignment of Corps members, to the extent that

8 additional funds appropriated pursuant to subparagraph

9 (A) increases the number of individuals participating in

10 the Scholarship Program under Section 338A of the Pub11 lic Health Service Act and in the Loan Repayment Pro12 gram under section 338B of such Act over the number

13 of individuals participating in such programs in fiscal year

14 1994, the Secretary shall give preference in assigning

15 those individuals to applicants that serve a health profes16 sional shortage area and receive grants to provide health

17 services and enabling services under sections 329, 330 or

18 340 (including, but not limited to, networks and plans

19 awarded funds under section 330) and other Federally

20 qualified health centers as defined in section 1861(aa)(4)

21 of the Social Security Act.’’.
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1 SEC. 6. FACILITATING THE PARTICIPATION OF COMMUNITY

2 PROVIDERS IN HEALTH PROFESSIONS TRAIN3 ING.

4 (a) PREFERENCE FOR CERTAIN HEALTH PROFES5 SIONS PROGRAM APPLICANTS.—Section 791(a)(1) of the

6 Public Health Service Act (42 U.S.C. 295j(a)(1)) is

7 amended—

8 (1) by striking ‘‘or under section 766 or 767,’’

9 and inserting the following: ‘‘, under section 766 or

10 767, or under section 777 or 778, in addition to

11 preferences stated in such sections,’’;

12 (2)(A) by striking ‘‘(B) during’’ and inserting

13 ‘‘(ii) during’’; and

14 (B) by striking ‘‘(A) has’’ and inserting ‘‘(B)(i)

15 has’’; and

16 (3) by inserting before subparagraph (B) (as

17 redesignated by paragraph (2) of this subsection)

18 the following new subparagraph:

19 ‘‘(A) is (or is a co-applicant with) an entity

20 that receives support under section 329, 330, or

21 340, or that is certified as a Federally qualified

22 health center under section 1861(aa)(4) of the

23 Social Security Act; and’’.

24 (b) PREFERENCE FOR CERTAIN NURSE TRAINING

25 PROGRAM APPLICANTS.—Section 860(e)(1)(A) of the
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1 Public Health Service Act (42 U.S.C. 298b–7(e)(1)(A)) is

2 amended—

3 (1) by inserting ‘‘820(b), 820(c),’’ before

4 ‘‘821,’’;

5 (2) by inserting ‘‘827,’’ before ‘‘830,’’;

6 (3)(A) by striking ‘‘(ii) during’’ and inserting

7 ‘‘(II) during’’; and

8 (B) by striking ‘‘(i) has’’ and inserting ‘‘(ii)(I)

9 has’’; and

10 (4) by inserting before clause (ii) (as redesig11 nated by paragraph (3) of this subsection) the fol12 lowing new clause:

13 ‘‘(i) is (or is a co-applicant with) an

14 entity that receives support under section

15 329, 330, or 340, or that is certified as a

16 Federally qualified health center under sec17 tion 1861(aa)(4) of the Social Security

18 Act; and’’.

19 (c) PAYMENT FOR DIRECT COSTS OF GRADUATE

20 MEDICAL EDUCATION.—Section 1886(h)(4)(E) of the So21 cial Security Act (42 U.S.C. 1395ww(h)(4)(E)) is amend22 ed by inserting before the period at the end the following:

23 ‘‘(or, in the case of activities performed at a Federally

24 qualified health center described in section 1861(aa)(4),

25 if the hospital incurs any of the costs for the training pro-
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1 gram at such center and reimburses the center for any

2 of the costs of the program that the center incurs)’’.

3 (d) PAYMENT FOR INDIRECT COSTS OF GRADUATE

4 MEDICAL EDUCATION.—Section 1886(d)(5)(B)(iv) of the

5 Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(iv)), as

6 amended by section 13506 of the Omnibus Budget Rec7 onciliation Act of 1993 (Public Law 103–66; 107 Stat.

8 579), is amended—

9 (1) by striking ‘‘entity receiving a grant’’ and

10 all that follows through ‘‘control of the hospital’’ and

11 inserting ‘‘Federally qualified health center de12 scribed in section 1861(aa)(4)’’;

13 (2) by striking ‘‘all, or substantially all, of the

14 costs’’ and inserting ‘‘any of the costs’’; and

15 (3) by striking ‘‘residents)’’ and inserting the

16 following: ‘‘residents and reimburses the center for

17 any of the costs of the program that the center in18 curs)’’.

19 (e) CLARIFYING ALLOWABILITY OF COSTS.—Section

20 1833(a)(3) of the Social Security Act (42 U.S.C.

21 1395l(a)(3)) is amended by inserting after ‘‘furnishing

22 such services’’ the following: ‘‘(including, without limita23 tion, all costs associated with participation in an approved

24 medical residency training program)’’.
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1 (f) EFFECTIVE DATE.—The amendments made by

2 subsections (c), (d), and (e) shall apply to services fur3 nished during cost reporting periods beginning on or after

4 October 1, 1994.

5 SEC. 7. PROVIDING SAFEGUARDS FOR RURAL HEALTH

6 CLINICS AND FEDERALLY QUALIFIED

7 HEALTH CENTERS IN MEDICAID DEMONSTRA8 TIONS.

9 (a) Section 1115(a)(1) of the Social Security Act (42

10 U.S.C. 1315(a)(1)) is amended by striking ‘‘or 1902,’’ and

11 inserting the following: ‘‘or 1902 (other than paragraphs

12 (13)(E), (10)(A), and (23) of section 1902(a) insofar as

13 such paragraphs require provision of, payment for, and

14 allow freedom of choice to select the provider of, the care

15 and services described in subparagraphs (B) and (C) of

16 section 1905(a)(2)),’’.

17 (b) Section 1115(a)(2) of the Social Security Act (42

18 U.S.C. 1315(a)(2)) is amended by inserting before the pe19 riod at the end the following: ‘‘, except that this paragraph

20 shall not provide authority for the Secretary to waive com21 pliance by a State with the requirements of paragraph

22 (2)(A)(ix) or (3) of section 1903(m)’’.

23 (c) Section 1915(b) of the Social Security Act (42

24 U.S.C. 1396n(b)) is amended—
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1 (1) in the matter preceding paragraph (1), by

2 striking ‘‘section 1905(a)(2)(C))’’ and inserting

3 ‘‘subparagraphs (B) and (C) of section

4 1905(a)(2))’’; and

5 (2) in the matter after and below paragraph

6 (4), by striking ‘‘section 1905(a)(4)(C)’’ and insert7 ing ‘‘paragraphs (2)(B), (2)(C), and (4)(C) of sec8 tion 1905(a)’’.

9 (d) Section 1903(m) of the Social Security Act (42

10 U.S.C. 1396b) is amended by inserting after paragraph

11 (2) the following new paragraph:

12 ‘‘(3) Notwithstanding sections 1115 and 1915(b), in

13 the event that a State agency contracts with an entity de14 scribed in paragraph (2)(A) or an entity similar to such

15 entity, such State agency, upon receiving an offer to pro16 vide health care services from a rural health clinic or a

17 Federally qualified health center operating in the same ge18 ographic area as such entity, shall enter into a contract

19 with such clinic or center for the provision of all health

20 care services referred to in such offer and, unless the clinic

21 or center elects otherwise, the payment made by the State

22 to such clinic or center for services described in subpara23 graphs (B) and (C) of section 1905(a)(2) to the individ24 uals proposed to be served in the clinic’s or center’s offer
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1 shall be made at the rates of payment specified in section

2 1902(a)(13)(E).’’.

3 SEC. 8. PROVIDING SAFE HARBOR FOR CERTAIN COLLABO4 RATIVE EFFORTS THAT BENEFIT MEDICALLY

5 UNDERSERVED PERSONS.

6 (a) Section 1128B(b)(3) of the Social Security Act

7 (42 U.S.C. 1320a–7b(b)(3)) is amended—

8 (1) in subparagraph (D), by striking ‘‘and’’

9 after the semicolon at the end;

10 (2) in subparagraph (E), by striking the period

11 at the end and inserting ‘‘; and’’; and

12 (3) by adding at the end the following:

13 ‘‘(F) any remuneration paid by or to a recipient

14 or subrecipient of Federal grant funds under or in

15 connection with an arrangement for the procurement

16 of goods or services by the recipient or subrecipient,

17 the referral of patients, or the lease or purchase of

18 space or equipment, provided that the following re19 quirements are met:

20 ‘‘(i) The arrangement is in writing and

21 signed by the parties.

22 ‘‘(ii) The arrangement will result in the

23 savings of Federal grant funds or increased rev24 enues to the recipient or subrecipient that will

25 be used to increase the availability or accessibil-
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1 ity of services to a medically underserved popu2 lation served by the recipient or subrecipient or

3 an improvement in the quality of services to

4 such population; provided that the recipient or

5 subrecipient may seek a prior determination

6 from the Public Health Service that this re7 quirement is met and, if the recipient or sub8 recipient does so, Public Health Service ap9 proval shall be conclusive and binding on the

10 Federal Government.

11 ‘‘(iii) The arrangement will not result in

12 private inurement to any current employees or

13 members of the Board of Directors of the recip14 ient or subrecipient, or to agents of the recipi15 ent or subrecipient who were involved in rec16 ommending or negotiating the arrangement.

17 ‘‘(iv) With respect to an arrangement

18 under which a recipient or subrecipient is pro19 curing goods or services, the provider of the

20 goods or services is the only provider able to

21 supply such goods or services, or the recipient

22 or subrecipient has engaged in a competitive

23 process to procure the goods or services that

24 meets the requirements for competition under

25 Federal grant awards.
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1 ‘‘(v) With respect to an arrangement for a

2 referral of patients, the arrangement will assure

3 that all patients covered or affected by the ar4 rangement are advised that they may request a

5 referral to any person or entity of their choos6 ing, subject to appropriate contractual limita7 tions under which the recipient or subrecipient

8 may operate as a health plan or as a contract

9 health plan provider and such limitations as the

10 patient may be under as an enrollee of a health

11 plan.

12 ‘‘(vi) With respect to an arrangement for

13 a referral of patients, the arrangement will not

14 interfere with the discretion of health profes15 sionals to refer patients in a manner they be16 lieve will most appropriately deal with a pa17 tient’s particular circumstances, subject to ap18 propriate contractual limitations under which

19 the recipient or subrecipient may operate as a

20 health plan or as a contract health plan pro21 vider and such limitations as the patient may

22 be under as an enrollee of a health plan.

23 For any arrangement that does not meet the above

24 requirements, paragraphs (1) and (2) shall not apply

25 when the recipient or subrecipient of Federal grant
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1 funds has applied to the Secretary for approval of

2 the arrangement and the Secretary, after consulta3 tion with the Department of Health and Human

4 Services Office of Inspector General, has approved

5 the arrangement based upon a finding that the ar6 rangement will produce a substantial benefit to a

7 medically underserved population that outweighs the

8 arrangement’s failure to fully satisfy all of the above

9 requirements. For any arrangement existing on the

10 date of enactment of this subparagraph (F) involv11 ing a recipient or subrecipient of Federal grant

12 funds that does not meet the foregoing requirements

13 and would subject the recipient or subrecipient to

14 criminal penalties under paragraphs (1) or (2), the

15 recipient or subrecipient shall be immune from

16 criminal prosecution under paragraphs (1) or (2),

17 provided that within six months after enactment of

18 this subparagraph (F) the arrangement is termi19 nated or amended to conform to the requirements of

20 this subparagraph (F).

21 For purposes of this section, a ‘recipient’ shall mean

22 a public or nonprofit private entity that receives a grant

23 or cooperative agreement under the Public Health Service

24 Act or title V of this Social Security Act. For purposes

25 of this section, a ‘subrecipient’ shall mean a public or non-
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1 profit private entity that performs substantive work under

2 a grant or cooperative agreement under the Public Health

3 Service Act or title V of this Act to a recipient.’’.

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