II

103D CONGRESS

1ST SESSION S. 1215

To increase the number of primary care providers in order to improve the

nation’s health care access and contain health care spending by the

establishment of medical education reimbursement programs and other

programs, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 13, 1993

Mrs. KASSEBAUM (for herself and Mr. SIMPSON) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To increase the number of primary care providers in order

to improve the nation’s health care access and contain

health care spending by the establishment of medical

education reimbursement programs and other programs,

and for other purposes.

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; TABLE OF CONTENTS.

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

5 ‘‘Primary Medical Care Act of 1993’’.

6 (b) TABLE OF CONTENTS.—The table of contents is

7 as follows:
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Sec. 1. Short title; table of contents.

TITLE I—INCREASING THE NUMBER OF PRIMARY CARE

PROVIDERS

Sec. 101. Findings.

Sec. 102. Graduate medical education payments.

Sec. 103. Approval of primary care and health care consortium programs for

GME payments.

Sec. 104. Health professions funding for nurse practitioner and physician assistants programs.

Sec. 105. Primary care demonstration grants.

Sec. 106. Health workforce oversight.

TITLE II—COMMUNITY HEALTH SERVICES EXPANSION

Sec. 201. Establishment of grant program.

Sec. 202. Program to provide for expansion of federally qualified health centers.

TITLE III—EXPANDING THE SUPPLY OF HEALTH

PROFESSIONALS IN RURAL AREAS

Sec. 301. Expansion of National Health Service Corps.

Sec. 302. Tax incentives for practice in rural areas.

TITLE IV—MISCELLANEOUS PROVISIONS

Sec. 401. Effective date.

1 TITLE I—INCREASING THE NUM2 BER OF PRIMARY CARE PRO3 VIDERS

4 SEC. 101. FINDINGS.

5 Congress finds that—

6 (1) not less than 50 percent of all medical resi7 dents should complete generalist training programs,

8 and at least 50 percent of all physicians should be9 come primary care providers;

10 (2) all primary care shortage areas should be

11 eliminated, and disparities between the metropolitan

12 and nonmetropolitan distribution of physicians

13 should be reduced;
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1 (3) the aggregate allopathic and osteopathic

2 physician-to-population ratio should be maintained

3 at 1993 levels;

4 (4) the total number of entry medical residency

5 positions should be limited;

6 (5) the number of nurse practitioners and phy7 sician assistants should be increased; and

8 (6) community-based ambulatory training expe9 riences for medical residents should be increased.

10 SEC. 102. GRADUATE MEDICAL EDUCATION PAYMENTS.

11 (a) IN GENERAL.—Subsection (h) of section 1886 of

12 the Social Security Act (42 U.S.C. 1395ww(h)) is amend13 ed to read as follows:

14 ‘‘(h) GRADUATE MEDICAL EDUCATION PAYMENTS.—

15 ‘‘(1) NATIONAL HEALTH WORKFORCE EDU16 CATION FUND.—

17 ‘‘(A) ESTABLISHMENT.—The Secretary

18 shall establish a National Health Workforce

19 Education Fund (hereafter referred to in this

20 subsection as the ‘Fund’) to make payments in

21 accordance with this subsection.

22 ‘‘(B) ALLOCATIONS.—

23 ‘‘(i) IN GENERAL.—In providing for

24 the Fund, the Secretary shall annually pro25 vide for an allocation of monies to the
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1 Fund from the trust funds established

2 under parts A and B as the Secretary de3 termines reasonably reflects the amount of

4 DME payments and IME payments pay5 able under such funds during fiscal year

6 1993.

7 ‘‘(ii) UPDATING TO THE FIRST COST

8 REPORTING PERIOD.—The Secretary shall

9 update the amount of funds allocated to

10 the Fund under clause (i) by the percent11 age increase in the consumer price index

12 during the 12-month cost reporting period

13 described in such clause.

14 ‘‘(iii) AMOUNT FOR SUBSEQUENT

15 COST REPORTING PERIODS.—For each cost

16 reporting period, the amount of funds allo17 cated to the Fund shall be equal to the

18 amount determined under this subpara19 graph for the previous cost reporting pe20 riod updated, through the midpoint of the

21 period, by projecting the estimated per22 centage change in the consumer price

23 index during the 12-month period ending

24 at that midpoint, with appropriate adjust25 ments to reflect previous under- or over-es-
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1 timations under this subparagraph in the

2 projected percentage change in the

3 consumer price index.

4 ‘‘(C) DIVISION OF FUND.—The Secretary

5 shall annually divide the Fund into subfunds.

6 One subfund shall be established for DME pay7 ments (hereafter referred to in this subsection

8 as the ‘DME subfund’) and another subfund

9 for IME payments (hereafter referred to in this

10 subsection as the ‘IME subfund’). In determin11 ing the annual relative distribution of funds be12 tween the DME subfund and the IME subfund,

13 the Secretary shall first consider the amount to

14 be contained in the DME subfund. The IME

15 subfund shall be equal to the amount of the

16 Fund less the amount of the DME subfund.

17 ‘‘(D) DETERMINATION OF AMOUNT OF

18 DME SUBFUND.—The Secretary shall annually

19 determine the amount of the DME subfund.

20 For the first cost reporting period, the DME

21 subfund shall be equal to the amount of DME

22 payments under parts A and B in 1993, up23 dated by the percentage increase in the

24 consumer price index during that 12-month cost
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1 reporting period. For subsequent cost reporting

2 periods, such subfund shall be the greater of—

3 ‘‘(i) the amount of DME payments

4 made from the Fund during the previous

5 cost reporting period updated, through the

6 midpoint of the period, by projecting the

7 estimated percentage change in the

8 consumer price index during the 12-month

9 period ending at that midpoint, with ap10 propriate adjustments to reflect previous

11 under- or over-estimations under this sub12 paragraph in the projected percentage

13 change in the consumer price index; or

14 ‘‘(ii) the projected amount of DME

15 payments for such cost reporting period re16 quired for all primary care residents and

17 health care training consortia residents in

18 programs approved by the Administrator

19 of the Health Resources and Services Ad20 ministration.

21 ‘‘(3) GUIDELINES FOR DISBURSEMENT OF

22 GRADUATE MEDICAL EDUCATION FUNDS.—

23 ‘‘(A) DME PAYMENTS.—

24 ‘‘(i) AMOUNT OF PAYMENT PER FTE

25 RESIDENT.—The Secretary shall develop a
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1 payment amount per FTE resident, with

2 respect to DME payments, that is not his3 torically based, but shall accurately reflect

4 the resident stipends, clinical faculty sti5 pends, administrative expenses, and pro6 gram operation overhead involved. The

7 Secretary shall develop such a formula

8 based upon a national average of such pay9 ments during the cost reporting period

10 that ended in 1993.

11 ‘‘(ii) UPDATING TO THE FIRST COST

12 REPORTING PERIOD.—The Secretary shall

13 update the payment amount per FTE resi14 dent determined under clause (i) by the

15 percentage increase in the consumer price

16 index during the 12-month cost reporting

17 period described in such clause.

18 ‘‘(iii) AMOUNT FOR SUBSEQUENT

19 COST REPORTING PERIODS.—For each cost

20 reporting period, the approved payment

21 amount per FTE resident shall be equal to

22 the amount determined under this sub23 paragraph for the previous cost reporting

24 period updated, through the midpoint of

25 the period, by projecting the estimated per-
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1 centage change in the consumer price

2 index during the 12-month period ending

3 at that midpoint, with appropriate adjust4 ments to reflect previous under- or over-es5 timations under this subparagraph in the

6 projected percentage change in the

7 consumer price index.

8 ‘‘(B) HEALTH CARE TRAINING INSTITU9 TION PAYMENT AMOUNT PER RESIDENT.—

10 ‘‘(i) IN GENERAL.—The payment

11 amount, for a health care training institu12 tion’s cost reporting period shall be equal

13 to the product of—

14 ‘‘(I) the aggregate approved

15 amount (as defined in clause (ii)) for

16 that period; and

17 ‘‘(II) the health care training in18 stitution’s medicare patient load (as

19 defined in clause (iii)) for that period.

20 ‘‘(ii) AGGREGATE APPROVED

21 AMOUNT.—As used in clause (i), the term

22 ‘aggregate approved amount’ means, for a

23 health care training institution cost report24 ing period, the product of—
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1 ‘‘(I) the payment amount per

2 FTE resident amount (as determined

3 under subparagraph (A)) for that pe4 riod; and

5 ‘‘(II) the weighted average num6 ber of FTE (as determined under sub7 paragraph (C)) in the health care

8 training institution’s approved medical

9 residency training programs in that

10 period.

11 ‘‘(iii) MEDICARE PATIENT LOAD.—As

12 used in clause (i), the term ‘medicare pa13 tient load’ means, with respect to a health

14 care training consortium’s or a teaching

15 hospital’s cost reporting period, the frac16 tion of the total number of inpatient-bed17 days (as established by the Secretary) dur18 ing the period which are attributable to pa19 tients with respect to whom payment may

20 be under part A. For the purpose of this

21 clause, for a health care training consor22 tium, the fraction of the total number of

23 inpatient-bed-days shall be calculated using

24 the inpatient-bed-days of the teaching hos-
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1 pitals which are members of the consor2 tium.

3 ‘‘(C) DETERMINATION OF FULL-TIME

4 EQUIVALENT RESIDENTS.—

5 ‘‘(i) RULES.—The Secretary shall es6 tablish rules consistent with this subpara7 graph for the computation of the number

8 of FTE residents in an approved medical

9 residency training program.

10 ‘‘(ii) ADJUSTMENT FOR PART-YEAR

11 OR PART-TIME RESIDENTS.—Such rules

12 shall take into account individuals who

13 serve as residents for only a portion of a

14 period with a hospital or simultaneously

15 with more than one hospital.

16 ‘‘(iii) WEIGHTING FACTORS.—Subject

17 to clause (iv), such rules shall provide that,

18 in calculating the number of FTE resi19 dents in an approved residency program

20 for a resident who is in the resident’s ini21 tial residency period—

22 ‘‘(I) with respect to each primary

23 care resident in a primary care train24 ing program approved by the Admin25 istrator of the Health Resources and
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1 Services Administration, the weighting

2 factor is 1.5;

3 ‘‘(II) with respect to each

4 nonprimary care resident in a training

5 program which is part of a health

6 care training consortia, approved by

7 the Administrator of the Health Re8 sources and Services Administration,

9 the weighting factor is 1.0; and

10 ‘‘(III) with respect to each

11 nonprimary care resident in a training

12 program that is not part of a health

13 care training consortia approved by

14 the Administrator of the Health Re15 sources and Services Administration,

16 the weighting factor shall be the ratio

17 of the subspecialty total divided by the

18 product of the payment amount per

19 FTE resident and the total number of

20 residents who do not train in pro21 grams approved under section 753 of

22 the Public Health Service Act as a

23 primary care training program or a

24 health care training consortium.
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1 The subspecialty total for purposes of

2 subclause (III) shall be the sum deter3 mined by subtracting the amount of DME

4 payments that would be needed to provide

5 reimbursements for residents who train in

6 programs approved, under section 753 of

7 the Public Health Service Act as a primary

8 care training program or a health care

9 training consortium from the amount of

10 the DME subfund.

11 ‘‘(iv) FOREIGN MEDICAL GRADUATES

12 REQUIRED TO PASS FMGEMS EXAMINA13 TION.—Such rules shall provide that, in

14 the case of an individual who is a foreign

15 medical graduate, the individual shall not

16 be counted as a resident, unless—

17 ‘‘(I) the individual has passed the

18 FMGEMS examination; or

19 ‘‘(II) the individual has pre20 viously received certification from, or

21 has previously passed the examination

22 of, the Educational Commission for

23 Foreign Medical Graduates.

24 ‘‘(v) COUNTING TIME SPENT IN OUT25 PATIENT SETTINGS.—Such rules shall pro-
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1 vide that only time spent in activities relat2 ing to patient care shall be counted and

3 that all the time so spent by a resident

4 under an approved medical residency train5 ing program shall be counted towards the

6 determination of full-time equivalency,

7 without regard to the setting in which the

8 activities are performed.

9 ‘‘(D) ASSURANCES.—In disbursing DME

10 payments from the Fund, the Secretary, shall

11 ensure that following:

12 ‘‘(i) A teaching hospital receiving

13 DME payments from the Fund for its resi14 dents, other than those residents that are

15 part of a health care training consortium,

16 uses those funds to support the training of

17 medical residents.

18 ‘‘(ii) A health care training consor19 tium receiving DME payments may use

20 such funds, at the sole discretion of such

21 consortium, to support the training of

22 medical students and medical residents to

23 meet the training outcome requirements as

24 described under section 753 of the Public

25 Health Service Act.
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1 ‘‘(iii) Assurances are obtained from

2 the health care training consortia or teach3 ing hospitals receiving such DME pay4 ments that such entities will compensate

5 the appropriate primary care residents at

6 not less than an amount that is 20 percent

7 greater than the compensation paid to

8 other residents.

9 ‘‘(E) COMPENSATION.—As used in sub10 paragraph (D)(iii), the term ‘compensation’

11 means the total of salary, benefits, debt forgive12 ness, and all other presentations provided to

13 residents, both monetary and material. Pay14 ments made to residents by a residency pro15 gram either prior to or following the actual pe16 riod of residency shall also be considered as

17 compensation under this section.

18 ‘‘(4) DETERMINATION AS TO FUNDING OF PRO19 GRAMS.—The Secretary shall, with respect to

20 weighting factors for primary care training pro21 grams and health care training consortia under

22 paragraph (3), use only such weights for programs

23 or consortia approved by the Administrator of the

24 Health Resources and Services Administration under

25 section 753 of the Public Health Service Act.
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1 ‘‘(5) DEFINITIONS.—As used in this subsection:

2 ‘‘(A) APPROVED MEDICAL RESIDENCY

3 TRAINING PROGRAM.—The term ‘approved med4 ical residency training program’ means a resi5 dency or other postgraduate medical training

6 program in which participation may be counted

7 toward certification in a specialty or sub8 specialty and includes formal postgraduate

9 training programs in geriatric medicine ap10 proved by the Secretary.

11 ‘‘(B) CONSUMER PRICE INDEX.—The term

12 ‘consumer price index’ refers to the Consumer

13 Price Index for All Urban Consumers (United

14 States city average), as published by the Sec15 retary of Commerce.

16 ‘‘(C) DIRECT MEDICAL EDUCATION PAY17 MENTS; DME.—The term ‘direct medical edu18 cation payments’ means payments to a health

19 care training institution that sponsors a resi20 dency program, to enable such institution to

21 provide—

22 ‘‘(i) resident and fellow stipends;

23 ‘‘(ii) the salaries of clinical faculty;

24 ‘‘(iii) administrative expenses; and
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1 ‘‘(iv) reimbursement for overhead ex2 penses incurred for residency and fellow3 ship physician training.

4 ‘‘(D) FOREIGN MEDICAL GRADUATE.—The

5 term ‘foreign medical graduate’ means a resi6 dent who is not a graduate of—

7 ‘‘(i) a school of medicine accredited by

8 the Liaison Committee on Medical Edu9 cation of the American Medical Colleges

10 (or approved by such Committee as meet11 ing the standards necessary for such ac12 creditation);

13 ‘‘(ii) a school of osteopathy accredited

14 by the American Osteopathic Association,

15 or approved by such Association as meet16 ing the standards necessary for such ac17 creditation; or

18 ‘‘(iii) a school of dentistry or podiatry

19 that is accredited (or meets the standards

20 for accreditation) by an organization recog21 nized by the Secretary for such purpose.

22 ‘‘(E) FMGEMS EXAMINATION.—The term

23 ‘FMGEMS examination’ means parts I and II

24 of the Foreign Medical Graduate Examination
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1 in the Medical Sciences recognized by the Sec2 retary for this purpose.

3 ‘‘(F) GENERALISTS.—The term ‘general4 ists’ means family physicians, general pediatri5 cians, and general internists.

6 ‘‘(G) HEALTH CARE TRAINING CONSOR7 TIUM.—

8 ‘‘(i) IN GENERAL.—The term ‘health

9 care training consortium’ means a local,

10 State, or regional association approved by

11 the Administrator of the Health Resources

12 and Services Administration under section

13 753 of the Public Health Service Act, that

14 includes at least one school of medicine,

15 teaching hospital, and ambulatory training

16 site, organized in a manner so that at least

17 50 percent of the involved medical school’s

18 or schools’ graduates become primary care

19 providers during the year after such grad20 uates complete their residency training.

21 ‘‘(ii) AMBULATORY TRAINING SITES.—

22 As used in clause (i), the term ‘ambulatory

23 training sites’ includes health maintenance

24 organizations, community health centers

25 and federally qualified health centers, mi-
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1 grant health centers, ambulatory offices or

2 other appropriate educational and teaching

3 sites as determined by the Administrator

4 of the Health Resources and Services Ad5 ministration.

6 ‘‘(H) HEALTH CARE TRAINING INSTITU7 TION.—The term ‘health care training institu8 tion’ means a teaching hospital or a health care

9 training consortium.

10 ‘‘(I) INDIRECT MEDICAL EDUCATION PAY11 MENTS; IME.—The term ‘indirect medical edu12 cation payments’ means payments to teaching

13 hospitals to enable such hospitals to pay the ad14 ditional operating costs associated with the

15 training of medical residents under section

16 1886(d)(5)(B). Such payments shall be referred

17 to as ‘IME payments’.

18 ‘‘(J) INITIAL RESIDENCY PERIOD.—(i) The

19 term ‘initial residency period’ means the period

20 of board eligibility. Except as provided in clause

21 (ii), in no case shall the initial period of resi22 dency exceed an aggregate period of formal

23 training of more than five years for any individ24 ual. The initial residency period shall be deter25 mined, with respect to a resident, as of the time
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1 the resident enters the residency training pro2 gram.

3 ‘‘(ii) Notwithstanding clause (i), a period,

4 of not more than two years, during which an in5 dividual is in a geriatric residency or fellowship

6 program that meets such criteria as the Sec7 retary may establish, shall be treated as part of

8 the initial residency period, but shall not be

9 counted against any limitation on the initial

10 residency period.

11 ‘‘(K) PERIOD OF BOARD ELIGIBILITY.—

12 ‘‘(i) GENERAL RULE.—Subject to

13 clauses (ii) and (iii), the term ‘period of

14 board eligibility’ means, for a resident, the

15 minimum number of years of formal train16 ing necessary to satisfy the requirements

17 for initial board eligibility in the particular

18 specialty for which the resident is training.

19 ‘‘(ii) APPLICATION OF DIRECTORY.—

20 Except as provided in clause (iii), the pe21 riod of board eligibility shall be such period

22 specified in the Directory of Residency

23 Training Programs published by the Ac24 creditation Council on Graduate Medical

25 Education.
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1 ‘‘(iii) CHANGES IN PERIOD OF BOARD

2 ELIGIBILITY.—If the Accreditation Council

3 on Graduate Medical Education, in its Di4 rectory of Residency Training Programs—

5 ‘‘(I) increases the minimum num6 ber of years of formal training nec7 essary to satisfy the requirements for

8 a specialty, above the period specified

9 in its 1993–1994 Directory, the Sec10 retary may increase the period of

11 board eligibility for that specialty, but

12 not to exceed the period of board eligi13 bility specified in that later Directory;

14 or

15 ‘‘(II) decreases the minimum

16 number of years of formal training

17 necessary to satisfy the requirements

18 for a specialty, below the period speci19 fied in its 1993–1994 Directory, the

20 Secretary may decrease the period of

21 board eligibility for that specialty, but

22 not below the period of board eligi23 bility specified in that later Directory.
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1 ‘‘(L) PRIMARY CARE.—The term ‘primary

2 care’ means medical care that is characterized

3 by the following elements:

4 ‘‘(i) First contact care for persons

5 with undifferentiated health care concerns.

6 ‘‘(ii) Person-centered, comprehensive

7 care that is not organ or problem specific.

8 ‘‘(iii) An orientation toward the longi9 tudinal care of the patient.

10 ‘‘(iv) Responsibility for coordination of

11 other health services as they relate to the

12 patient’s care.

13 ‘‘(M) PRIMARY CARE COMPETENCIES.—

14 The term ‘primary care competencies’ means—

15 ‘‘(i) health promotion and disease pre16 vention;

17 ‘‘(ii) the assessment or evaluation of

18 common symptoms and physical signs;

19 ‘‘(iii) the management of common

20 acute and chronic medical conditions, in21 cluding behavioral conditions; or

22 ‘‘(iv) the identification and appro23 priate referral for other needed health care

24 services.
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1 ‘‘(N) PRIMARY CARE PROVIDERS.—The

2 term ‘primary care providers’ means generalists

3 and obstetrician/gynecologists, nurse practition4 ers, and physician assistants who utilize the pri5 mary care competencies to deliver primary care.

6 ‘‘(O) PRIMARY CARE RESIDENTS.—The

7 term ‘primary care residents’ means medical

8 residents in primary care training programs.

9 ‘‘(P) PRIMARY CARE TRAINING PRO10 GRAMS.—The term ‘primary care training pro11 grams’ means—

12 ‘‘(i) all family practice residency pro13 grams; and

14 ‘‘(ii) residency programs for primary

15 care providers that are approved by the

16 Administrator of the Health Resources and

17 Services Administration in accordance with

18 section 753 of the Public Health Service

19 Act.’’.

20 (b) IME PAYMENTS.—Subparagraph (B) of section

21 1886(d)(5) of the Social Security Act (42 U.S.C.

22 1395ww(d)(5)(B)) is amended—

23 (1) in the matter preceding clause (i), by insert24 ing ‘‘(IME payments under subsection (h)), from the
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1 IME subfund established in subsection (h),’’ after

2 ‘‘medical education,’’; and

3 (2) by adding at the end thereof the following

4 new clause:

5 ‘‘(v) In determining the additional payment

6 amount, the Secretary shall reduce the amount of

7 IME payments to teaching hospitals for a hospital

8 cost reporting period by an appropriate across-the9 board percentage, in order to maintain IME subfund

10 budget neutrality if—

11 ‘‘(I) such payments for resident provided

12 services are projected to increase during the

13 hospital cost reporting period; or

14 ‘‘(II) the amount of such subfund is re15 duced in accordance with subsection

16 (h)(1)(C).’’.

17 SEC. 103. APPROVAL OF PRIMARY CARE AND HEALTH CARE

18 CONSORTIUM PROGRAMS FOR GME PAY19 MENTS.

20 Part C of title VII of the Public Health Service Act

21 (42 U.S.C. 293j et seq.) is amended by adding at the end

22 thereof the following new section:
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1 ‘‘SEC. 753. APPROVAL OF PRIMARY CARE AND HEALTH

2 CARE CONSORTIUM PROGRAMS FOR GME

3 PAYMENTS.

4 ‘‘(a) IN GENERAL.—

5 ‘‘(1) REQUIREMENTS.—The Secretary, acting

6 through the Administrator of the Health Resources

7 and Services Administration, shall, for purposes of

8 section 1886(h) of the Social Security Act—

9 ‘‘(A) establish criteria, based upon pro10 gram curricula, that shall be utilized to deter11 mine which residencies in pediatrics, internal

12 medicine, and obstetrics and gynecology shall be

13 approved as primary care training programs;

14 ‘‘(B) approve primary care training pro15 grams, using the criteria established in para16 graph (2); and

17 ‘‘(C) approve health care training consor18 tium in accordance with paragraph (2).

19 ‘‘(2) TRANSITION.—

20 ‘‘(A) IN GENERAL.—During the period

21 ending on June 30, 1997, a health care training

22 consortium shall be approved if the consortium

23 demonstrates that not less than 50 percent of

24 the filled residency program positions of such

25 consortium are in primary care training pro26 grams.
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1 ‘‘(B) 1997–2001.—During the period be2 ginning July 1, 1997, through June 30, 2001,

3 a health care training consortium shall be ap4 proved if the consortium demonstrates that not

5 less than 50 percent of the filled residency pro6 gram positions of such consortium are in pri7 mary care training programs and not less than

8 50 percent of the medical school graduates from

9 such health care training consortium with re10 spect to the year involved enter primary care

11 training programs.

12 ‘‘(C) POST 2001.—For each annual period

13 beginning on July 1, 2001, health care training

14 consortium shall be approved if such consortium

15 demonstrates that not less than 50 percent of

16 the 1997 graduates, and each subsequent class

17 of graduates, from the consortium medical

18 school or medical schools have become primary

19 care providers.

20 ‘‘(b) DEFINITIONS.—As used in this section:

21 ‘‘(1) GENERALISTS.—The term ‘generalists’

22 means family physicians, general pediatricians, and

23 general internists.

24 ‘‘(2) HEALTH CARE TRAINING CONSORTIUM.—
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1 ‘‘(A) IN GENERAL.—The term ‘health care

2 training consortium’ means a local, State, or re3 gional association approved by the Adminis4 trator of the Health Resources and Services Ad5 ministration that includes at least one school of

6 medicine, teaching hospital, and ambulatory

7 training site, organized in a manner so that at

8 least 50 percent of the involved medical school’s

9 or schools’ graduates become primary care pro10 viders during the year after such graduates

11 complete their residency training.

12 ‘‘(B) AMBULATORY TRAINING SITES.—As

13 used in subparagraph (A), the term ‘ambula14 tory training sites’ includes health maintenance

15 organizations, community health centers and

16 federally qualified health centers, migrant

17 health centers, ambulatory offices or other ap18 propriate educational and teaching sites as de19 termined by the Administrator of the Health

20 Resources and Services Administration.

21 ‘‘(3) PRIMARY CARE.—The term ‘primary care’

22 means medical care that is characterized by the fol23 lowing elements:

24 ‘‘(A) First contact care for persons with

25 undifferentiated health care concerns.
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1 ‘‘(B) Person-centered, comprehensive care

2 that is not organ or problem specific.

3 ‘‘(C) An orientation toward the longitu4 dinal care of the patient.

5 ‘‘(D) Responsibility for coordination of

6 other health services as they relate to the pa7 tient’s care.

8 ‘‘(4) PRIMARY CARE COMPETENCIES.—The

9 term ‘primary care competencies’ means—

10 ‘‘(A) health promotion and disease preven11 tion;

12 ‘‘(B) the assessment or evaluation of com13 mon symptoms and physical signs;

14 ‘‘(C) the management of common acute

15 and chronic medical conditions, including be16 havioral conditions; or

17 ‘‘(D) the identification and appropriate re18 ferral for other needed health care services.

19 ‘‘(5) PRIMARY CARE PROVIDERS.—The term

20 ‘primary care providers’ means generalists and ob21 stetrician/gynecologists, nurse practitioners, and

22 physician assistants who utilize the primary care

23 competencies to deliver primary care.
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1 ‘‘(6) PRIMARY CARE RESIDENTS.—The term

2 ‘primary care residents’ means medical residents in

3 primary care training programs.

4 ‘‘(7) PRIMARY CARE TRAINING PROGRAMS.—

5 The term ‘primary care training programs’ means—

6 ‘‘(A) all family practice residency pro7 grams; and

8 ‘‘(B) residency programs for primary care

9 providers that are approved by the Adminis10 trator of the Health Resources and Service Ad11 ministrator in accordance with this section.’’.

12 SEC. 104. HEALTH PROFESSIONS FUNDING FOR NURSE

13 PRACTITIONER AND PHYSICIAN ASSISTANTS

14 PROGRAMS.

15 (a) PHYSICIAN ASSISTANTS.—Section 750(d)(1) of

16 the Public Health Service Act (42 U.S.C. 293n(d)(1)) is

17 amended by striking ‘‘for each of the fiscal years 1993

18 through 1995’’ and inserting ‘‘for fiscal year 1993,

19 $11,250,000 for fiscal year 1994, and such sums as may

20 be necessary for each of the fiscal years 1995 and 1996’’.

21 (b) NURSE PRACTITIONERS.—Section 822(d) of such

22 Act (42 U.S.C. 296m(d)) is amended by striking ‘‘for each

23 of the fiscal years 1993 and 1994’’ and inserting ‘‘for fis24 cal year 1993, $25,000,000 for fiscal year 1994, and such
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1 sums as may be necessary for each of the fiscal years 1995

2 and 1996’’.

3 SEC. 105. PRIMARY CARE DEMONSTRATION GRANTS.

4 Part B of title III of the Public Health Service Act

5 (42 U.S.C. 243 et seq.) is amended by adding at the end

6 thereof the following new section:

7 ‘‘SEC. 320A. PRIMARY CARE DEMONSTRATION GRANTS.

8 ‘‘(a) AUTHORIZATION.—The Secretary, acting

9 through the Health Resources and Services Administra10 tion, shall award grants to States or nonprofit entities to

11 fund not less than 10 demonstration projects to enable

12 such States or entities to evaluate one or more of the

13 following:

14 ‘‘(1) State mechanisms, including changes in

15 the scope of practice laws, to enhance the delivery of

16 primary care by nurse practitioners or physician as17 sistants.

18 ‘‘(2) The feasibility of, and the most effective

19 means to train subspecialists to deliver primary care

20 as primary care providers.

21 ‘‘(3) State mechanisms to increase the supply

22 or improve the distribution of primary care provid23 ers.

24 ‘‘(b) APPLICATION.—To be eligible to receive a grant

25 under this section a State or nonprofit entity shall prepare
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1 and submit to the Secretary an application at such time,

2 in such manner and containing such information as the

3 Secretary may require.

4 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There

5 are authorized to be appropriated to carry out this section,

6 $9,000,000 for fiscal year 1994, and such sums as may

7 be necessary for each of the fiscal years 1995 through

8 1997.’’.

9 SEC. 106. HEALTH WORKFORCE OVERSIGHT.

10 (a) IN GENERAL.—Section 301(a) of the Health Pro11 fessions Education Extension Amendments of 1992 (42

12 U.S.C. 295k note) is amended—

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

14 end thereof;

15 (2) in paragraph (2), by striking the period and

16 inserting ‘‘; and’’; and

17 (3) by adding at the end thereof the following

18 new paragraph:

19 ‘‘(3) maintain data bases concerning the supply

20 and distribution of, and postgraduate training pro21 grams for, physicians and other primary care provid22 ers in the United States in order to make periodic

23 recommendations with respect to subparagraphs (D)

24 and (E) of paragraph (1).’’.
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1 (b) FINAL REPORT.—Section 301(j) of such Act is

2 amended—

3 (1) by striking ‘‘FINAL’’ in the subsection head4 ing; and

5 (2) by striking ‘‘final’’.

6 (c) AUTHORIZATION OF APPROPRIATIONS.—Section

7 301(k) of such Act is amended to read as follows:

8 ‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There

9 are authorized to be appropriated to maintain the data

10 bases required under subsection (a)(3), and for other pur11 poses authorized by this section, $8,000,000 for fiscal year

12 1994, and such sums as may be necessary for each of the

13 fiscal years 1995 through 1997.’’.

14 TITLE II—COMMUNITY HEALTH

15 SERVICES EXPANSION

16 SEC. 201. ESTABLISHMENT OF GRANT PROGRAM.

17 Subpart I of part D of title III of the Public Health

18 Service Act (42 U.S.C. 254b et seq.) is amended by adding

19 at the end thereof the following new section:

20 ‘‘SEC. 330A. COMMUNITY-BASED PRIMARY HEALTH CARE

21 GRANT PROGRAM.

22 ‘‘(a) ESTABLISHMENT.—The Secretary shall estab23 lish and administer a program to provide allotments to

24 States to enable such States to provide grants for the cre25 ation or enhancement of community-based primary health
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1 care entities that provide services to low-income or medi2 cally underserved populations.

3 ‘‘(b) ALLOTMENTS TO STATES.—

4 ‘‘(1) IN GENERAL.—From the amount available

5 for allotment under subsection (h) for a fiscal year,

6 the Secretary shall allot to each State an amount

7 equal to the product of the grant share of the State

8 (as determined under paragraph (2)) multiplied by

9 such amount available.

10 ‘‘(2) GRANT SHARE.—

11 ‘‘(A) IN GENERAL.—For purposes of para12 graph (1), the grant share of a State shall be

13 the product of the need-adjusted population of

14 the State (as determined under subparagraph

15 (B)) multiplied by the Federal matching per16 centage of the State (as determined under sub17 paragraph (C)), expressed as a percentage of

18 the sum of the products of such factors for all

19 States.

20 ‘‘(B) NEED-ADJUSTED POPULATION.—

21 ‘‘(i) IN GENERAL.—For purposes of

22 subparagraph (A), the need-adjusted popu23 lation of a State shall be the product of

24 the total population of the State (as esti25 mated by the Secretary of Commerce) mul-
33

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1 tiplied by the need index of the State (as

2 determined under clause (ii)).

3 ‘‘(ii) NEED INDEX.—For purposes of

4 clause (i), the need index of a State shall

5 be the ratio of—

6 ‘‘(I) the weighted sum of the geo7 graphic percentage of the State (as

8 determined under clause (iii)), the

9 poverty percentage of the State (as

10 determined under clause (iv)), and the

11 multiple grant percentage of the State

12 (as determined under clause (v)); to

13 ‘‘(II) the general population per14 centage of the State (as determined

15 under clause (vi)).

16 ‘‘(iii) GEOGRAPHIC PERCENTAGE.—

17 ‘‘(I) IN GENERAL.—For purposes

18 of clause (ii)(I), the geographic per19 centage of the State shall be the esti20 mated population of the State that is

21 residing in nonurbanized areas (as de22 termined under subclause (II)) ex23 pressed as a percentage of the total

24 nonurbanized population of all States.
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1 ‘‘(II) NONURBANIZED POPU2 LATION.—For purposes of subclause

3 (I), the estimated population of the

4 State that is residing in nonurbanized

5 areas shall be one minus the urban6 ized population of the State (as deter7 mined using the most recent decennial

8 census), expressed as a percentage of

9 the total population of the State (as

10 determined using the most recent de11 cennial census), multiplied by the cur12 rent estimated population of the

13 State.

14 ‘‘(iv) POVERTY PERCENTAGE.—For

15 purposes of clause (ii)(I), the poverty per16 centage of the State shall be the estimated

17 number of people residing in the State

18 with incomes below 200 percent of the in19 come official poverty line (as determined

20 by the Office of Management and Budget)

21 expressed as a percentage of the total

22 number of such people residing in all

23 States.

24 ‘‘(v) MULTIPLE GRANT PERCENT25 AGE.—For purposes of clause (ii)(I), the
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1 multiple grant percentage of the State

2 shall be the amount of Federal funding re3 ceived by the State under grants awarded

4 under sections 329, 330, and 340, ex5 pressed as a percentage of the total

6 amounts received under such grants by all

7 States. With respect to a State, such per8 centage shall not exceed twice the general

9 population percentage of the State under

10 clause (vi) or be less than one-half of the

11 States general population percentage.

12 ‘‘(vi) GENERAL POPULATION PER13 CENTAGE.—For purposes of clause (ii)(II),

14 the general population percentage of the

15 State shall be the total population of the

16 State (as determined by the Secretary of

17 Commerce) expressed as a percentage of

18 the total population of all States.

19 ‘‘(C) FEDERAL MATCHING PERCENTAGE.—

20 ‘‘(i) IN GENERAL.—For purposes of

21 subparagraph (A), the Federal matching

22 percentage of the State shall be equal to

23 one, less the State matching percentage (as

24 determined under clause (ii)).
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1 ‘‘(ii) STATE MATCHING PERCENT2 AGE.—For purposes of clause (i), the State

3 matching percentage of the State shall be

4 0.25 multiplied by the ratio of the total

5 taxable resource percentage (as determined

6 under clause (iii)) to the need-adjusted

7 population of the State (as determined

8 under subparagraph (B)).

9 ‘‘(iii) TOTAL TAXABLE RESOURCE

10 PERCENTAGE.—For purposes of clause (ii),

11 the total taxable resources percentage of

12 the State shall be the total taxable re13 sources of a State (as determined by the

14 Secretary of the Treasury) expressed as a

15 percentage of the sum of the total taxable

16 resources of all States.

17 ‘‘(3) ANNUAL ESTIMATES.—

18 ‘‘(A) IN GENERAL.—If the Secretary of

19 Commerce does not produce the annual esti20 mates required under paragraph (2)(B)(iv),

21 such estimates shall be determined by multiply22 ing the percentage of the population of the

23 State that is below 200 percent of the income

24 official poverty line as determined using the

25 most recent decennial census by the most recent
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1 estimate of the total population of the State.

2 Except as provided in subparagraph (B), the

3 calculations required under this subparagraph

4 shall be made based on the most recent 3-year

5 average of the total taxable resources of individ6 uals within the State.

7 ‘‘(B) DISTRICT OF COLUMBIA.—Notwith8 standing subparagraph (A), the calculations re9 quired under such subparagraph with respect to

10 the District of Columbia shall be based on the

11 most recent 3-year average of the personal in12 come of individuals residing within the District

13 as a percentage of the personal income for all

14 individuals residing within the District, as de15 termined by the Secretary of Commerce.

16 ‘‘(4) MATCHING REQUIREMENT.—A State that

17 receives an allotment under this section shall make

18 available State resources (either directly or indi19 rectly) to carry out this section in an amount that

20 shall equal the State matching percentage for the

21 State (as determined under paragraph (2)(C)(ii)) di22 vided by the Federal matching percentage (as deter23 mined under paragraph (2)(C)).

24 ‘‘(c) APPLICATION.—
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1 ‘‘(1) IN GENERAL.—To be eligible to receive an

2 allotment under this section, a State shall prepare

3 and submit an application to the Secretary at such

4 time, in such manner, and containing such informa5 tion as the Secretary may by regulation require.

6 ‘‘(2) ASSURANCES.—A State application sub7 mitted under paragraph (1) shall contain an assur8 ance that—

9 ‘‘(A) the State will use amounts received

10 under its allotment consistent with the require11 ments of this section; and

12 ‘‘(B) the State will provide, from non-Fed13 eral sources, the amounts required under sub14 section (b)(4).

15 ‘‘(d) USE OF FUNDS.—

16 ‘‘(1) IN GENERAL.—The State shall use

17 amounts received under this section to award grants

18 to eligible public and nonprofit private entities, or

19 consortia of such entities, within the State to enable

20 such entities or consortia to provide services of the

21 type described in paragraph (2) of section 329(h) to

22 low-income or medically underserved populations.

23 ‘‘(2) ELIGIBILITY.—To be eligible to receive a

24 grant under paragraph (1), an entity or consortium

25 shall—
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1 ‘‘(A) prepare and submit to the admin2 istering entity of the State, an application at

3 such time, in such manner, and containing such

4 information as such administering entity may

5 require, including a plan for the provision of

6 services of the type described in paragraph (3);

7 ‘‘(B) provide assurances that services will

8 be provided under the grant at fee rates estab9 lished or determined in accordance with section

10 330(e)(3)(F); and

11 ‘‘(C) provide assurances that in the case of

12 services provided to individuals with health in13 surance, such insurance shall be used as the

14 primary source of payment for such services.

15 ‘‘(3) SERVICES.—The services to be provided

16 under a grant awarded under paragraph (1) shall in17 clude—

18 ‘‘(A) one or more of the types of primary

19 health services described in section 330(b)(1);

20 ‘‘(B) one or more of the types of supple21 mental health services described in section

22 330(b)(2); and

23 ‘‘(C) any other services determined appro24 priate by the administering entity of the State.
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1 ‘‘(4) TARGET POPULATIONS.—Entities or con2 sortia receiving grants under paragraph (1) shall, in

3 providing the services described in paragraph (3),

4 substantially target populations of low-income or

5 medically underserved populations within the State

6 who reside in medically underserved or health pro7 fessional shortage areas, areas certified as under8 served under the rural health clinic program, or

9 other areas determined appropriate by the admin10 istering entity of the State, within the State.

11 ‘‘(5) PRIORITY.—In awarding grants under

12 paragraph (1), the State shall—

13 ‘‘(A) give priority to entities or consortia

14 that can demonstrate through the plan submit15 ted under paragraph (2) that—

16 ‘‘(i) the services provided under the

17 grant will expand the availability of pri18 mary care services to the maximum num19 ber of low-income or medically underserved

20 populations who have no access to such

21 care on the date of the grant award; and

22 ‘‘(ii) the delivery of services under the

23 grant will be cost-effective; and
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1 ‘‘(B) ensure that an equitable distribution

2 of funds is achieved among urban and rural en3 tities or consortia.

4 ‘‘(e) REPORTS AND AUDITS.—Each State shall pre5 pare and submit to the Secretary annual reports concern6 ing the State’s activities under this section which shall be

7 in such form and contain such information as the Sec8 retary determines appropriate. Each such State shall es9 tablish fiscal control and fund accounting procedures as

10 may be necessary to assure that amounts received under

11 this section are being disbursed properly and are ac12 counted for, and include the results of audits conducted

13 under such procedures in the reports submitted under this

14 subsection.

15 ‘‘(f) PAYMENTS.—

16 ‘‘(1) ENTITLEMENT.—Each State for which an

17 application has been approved by the Secretary

18 under this section shall be entitled to payments

19 under this section for each fiscal year in an amount

20 not to exceed the State’s allotment under subsection

21 (b) to be expended by the State in accordance with

22 the terms of the application for the fiscal year for

23 which the allotment is to be made.

24 ‘‘(2) METHOD OF PAYMENTS.—The Secretary

25 may make payments to a State in installments, and
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1 in advance or by way of reimbursement, with nec2 essary adjustments on account of overpayments or

3 underpayments, as the Secretary may determine.

4 ‘‘(3) STATE SPENDING OF PAYMENTS.—Pay5 ments to a State from the allotment under sub6 section (b) for any fiscal year must be expended by

7 the State in that fiscal year or in the succeeding fis8 cal year.

9 ‘‘(g) DEFINITION.—As used in this section, the term

10 ‘administering entity of the State’ means the agency or

11 official designated by the chief executive officer of the

12 State to administer the amounts provided to the State

13 under this section.

14 ‘‘(h) FUNDING.—Notwithstanding any other provi15 sion of law, the Secretary shall use 50 percent of the

16 amounts that the Secretary is required to utilize under

17 section 330B(h) in each fiscal year to carry out this

18 section.’’.

19 SEC. 202. PROGRAM TO PROVIDE FOR EXPANSION OF FED20 ERALLY QUALIFIED HEALTH CENTERS.

21 (a) IN GENERAL.—Subpart I of part D of title III

22 of the Public Health Service Act (42 U.S.C. 254b et seq.)

23 (as amended by section 201) is further amended by adding

24 at the end thereof the following new section:
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1 ‘‘SEC. 330B. PROGRAM TO PROVIDE FOR EXPANSION OF

2 FEDERALLY QUALIFIED HEALTH CENTERS.

3 ‘‘(a) ESTABLISHMENT OF HEALTH SERVICES AC4 CESS PROGRAM.—From amounts appropriated under this

5 section, the Secretary shall, acting through the Bureau of

6 Health Care Delivery Assistance, award grants under this

7 section to federally qualified health centers (hereafter re8 ferred to in this section as ‘FQHCs’) and other entities

9 and organizations submitting applications under this sec10 tion (as described in subsection (c)) for the purpose of

11 providing access to services for medically underserved pop12 ulations (as defined in section 330(b)(3)) or in high im13 pact areas (as defined in section 329(a)(5)) not currently

14 being served by a FQHC.

15 ‘‘(b) ELIGIBILITY FOR GRANTS.—

16 ‘‘(1) IN GENERAL.—The Secretary shall award

17 grants under this section to entities or organizations

18 described in this paragraph and paragraph (2) which

19 have submitted a proposal to the Secretary to ex20 pand such entities or organizations operations (in21 cluding expansions to new sites (as determined nec22 essary by the Secretary)) to serve medically under23 served populations or high impact areas not cur24 rently served by a FQHC and which—

25 ‘‘(A) have as of the date of enactment of

26 this section, been certified by the Secretary as
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1 a FQHC under section 1905(l)(2)(B) of the So2 cial Security Act;

3 ‘‘(B) have submitted applications to the

4 Secretary to qualify as FQHCs under section

5 1905(l)(2)(B) of the Social Security Act; or

6 ‘‘(C) have submitted a plan to the Sec7 retary which provides that the entity or organi8 zation will meet the requirements to qualify as

9 a FQHC when operational.

10 ‘‘(2) NON-FQHC ENTITIES.—

11 ‘‘(A) ELIGIBILITY.—The Secretary shall

12 also make grants under this section to any pub13 lic or private nonprofit agency, or any health

14 care entity or organization which—

15 ‘‘(i) meets the requirements necessary

16 to qualify as a FQHC, except the require17 ment that such agency, entity, or organiza18 tion has a consumer majority governing

19 board,

20 ‘‘(ii) has submitted a proposal to the

21 Secretary to provide those services pro22 vided by a FQHC as defined in section

23 1905(l)(2)(B) of the Social Security Act,

24 and
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1 ‘‘(iii) is designed to promote access to

2 primary care services or to reduce reliance

3 on hospital emergency rooms or other high

4 cost providers of primary health care serv5 ices,

6 Provided, That the proposal described in clause

7 (ii) is developed by the agency, entity, or orga8 nization (or such agencies, entities, or organiza9 tions acting in a consortium in a community)

10 with the review and approval of the Governor of

11 the State in which such agency, entity, or orga12 nization is located.

13 ‘‘(B) LIMITATION.—The Secretary shall

14 provide in making grants to entities or organi15 zations described in this paragraph that not

16 more than 10 percent of the funds provided for

17 grants under this section shall be made avail18 able for grants to such entities or organizations.

19 ‘‘(c) APPLICATION REQUIREMENTS.—

20 ‘‘(1) IN GENERAL.—In order to be eligible to

21 receive a grant under this section, a FQHC or other

22 entity or organization must submit an application in

23 such form and at such time as the Secretary shall

24 prescribe and which meets the requirements of this

25 subsection.
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1 ‘‘(2) REQUIREMENTS.—An application submit2 ted under this section must provide—

3 ‘‘(A)(i) for a schedule of fees or payments

4 for the provision of the services provided by the

5 entity or organization designed to cover its rea6 sonable costs of operations; and

7 ‘‘(ii) for a corresponding schedule of dis8 counts to be applied to such fees or payments,

9 based upon the patient’s ability to pay (deter10 mined by using a sliding scale formula based on

11 the income of the patient);

12 ‘‘(B) assurances that the entity or organi13 zation provides services to persons who are eli14 gible for benefits under title XVIII of the Social

15 Security Act, for medical assistance under title

16 XIX of such Act, or for assistance for medical

17 expenses under any other public assistance pro18 gram or private health insurance program; and

19 ‘‘(C) assurances that the entity or organi20 zation has made and will continue to make

21 every reasonable effort to collect reimbursement

22 for services—

23 ‘‘(i) from persons eligible for assist24 ance under any of the programs described

25 in subparagraph (B); and
47

•S 1215 IS

1 ‘‘(ii) from patients not entitled to ben2 efits under any such programs.

3 ‘‘(d) LIMITATIONS ON USE OF FUNDS.—

4 ‘‘(1) IN GENERAL.—From the amounts award5 ed to a FQHC or other entity or organization under

6 this section, funds may be used for purposes of plan7 ning but may only be expended for the costs of—

8 ‘‘(A) assessing the needs of the populations

9 or proposed areas to be served;

10 ‘‘(B) preparing a description of how the

11 needs identified will be met; and

12 ‘‘(C) development of an implementation

13 plan that addresses—

14 ‘‘(i) recruitment and training of per15 sonnel; and

16 ‘‘(ii) activities necessary to achieve

17 operational status in order to meet FQHC

18 requirements under 1905(l)(2)(B) of the

19 Social Security Act.

20 ‘‘(2) RECRUITING, TRAINING, AND COMPENSA21 TION OF STAFF.—From the amounts awarded to an

22 entity or organization under this section, funds may

23 be used for the purposes of paying for the costs of

24 recruiting, training, and compensating staff (clinical

25 and associated administrative personnel (to the ex-
48

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1 tent such costs are not already reimbursed under

2 title XIX of the Social Security Act or any other

3 State or Federal program)) to the extent necessary

4 to allow the entity or organization to operate at new

5 or expanded existing sites.

6 ‘‘(3) FACILITIES AND EQUIPMENT.—From the

7 amounts awarded to an entity or organization under

8 this section, funds may be expended for the purposes

9 of acquiring facilities and equipment but only for the

10 costs of—

11 ‘‘(A) construction of new buildings (to the

12 extent that new construction is found to be the

13 most cost-efficient approach by the Secretary);

14 ‘‘(B) acquiring, expanding, or modernizing

15 existing facilities;

16 ‘‘(C) purchasing essential (as determined

17 by the Secretary) equipment; and

18 ‘‘(D) amortization of principal and pay19 ment of interest on loans obtained for purposes

20 of site construction, acquisition, modernization,

21 or expansion, as well as necessary equipment.

22 ‘‘(4) SERVICES.—From the amounts awarded

23 to an entity or organization under this section, funds

24 may be expended for the payment of services but

25 only for the costs of—
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1 ‘‘(A) providing or arranging for the provi2 sion of all services through the entity or organi3 zation necessary to qualify such entity or orga4 nization as a FQHC under section

5 1905(l)(2)(B) of the Social Security Act;

6 ‘‘(B) providing or arranging for any other

7 service that a FQHC may provide and be reim8 bursed for under title XIX of the Social Secu9 rity Act; and

10 ‘‘(C) providing any unreimbursed costs of

11 providing services as described in section 330(a)

12 to patients.

13 ‘‘(e) PRIORITIES IN THE AWARDING OF GRANTS.—

14 ‘‘(1) CERTIFIED FQHCs.—The Secretary shall

15 give priority in awarding grants under this section

16 to entities and organizations which have, as of the

17 date of enactment of this section, been certified as

18 a FQHC under section 1905(l)(2)(B) of the Social

19 Security Act and which have submitted a proposal to

20 the Secretary to expand their operations (including

21 expansion to new sites) to serve medically

22 underserved populations for high impact areas not

23 currently served by a FQHC. The Secretary shall

24 give first priority in awarding grants under this sec25 tion to those FQHCs or other entities or organiza-
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1 tions which propose to serve populations with the

2 highest degree of unmet need, and which can dem3 onstrate the ability to expand their operations in the

4 most efficient manner.

5 ‘‘(2) QUALIFIED FQHCs.—The Secretary shall

6 give second priority in awarding grants to entities

7 and organizations which have submitted applications

8 to the Secretary which demonstrate that the entities

9 or organizations will qualify as FQHCs under sec10 tion 1905(l)(2)(B) of the Social Security Act before

11 they provide or arrange for the provision of services

12 supported by funds awarded under this section, and

13 which are serving or proposing to serve medically

14 underserved populations or high impact areas which

15 are not currently served (or proposed to be served)

16 by a FQHC.

17 ‘‘(3) EXPANDED SERVICES AND PROJECTS.—

18 The Secretary shall give third priority in awarding

19 grants in subsequent years to those FQHCs or other

20 entities or organizations which have provided for ex21 panded services and projects and are able to dem22 onstrate that such entities or organizations will

23 incur significant unreimbursed costs in providing

24 such expanded services.
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1 ‘‘(f) RETURN OF FUNDS TO SECRETARY FOR COSTS

2 REIMBURSED FROM OTHER SOURCES.—To the extent

3 that a FQHC or other entity or organization receiving

4 funds under this section is reimbursed from another

5 source for the provision of services to an individual, and

6 does not use such increased reimbursement to expand

7 services furnished, to expand areas served, to compensate

8 for costs of unreimbursed services provided to patients, or

9 to promote recruitment, training, or retention of person10 nel, such excess revenues shall be returned to the Sec11 retary.

12 ‘‘(g) TERMINATION OF GRANTS.—

13 ‘‘(1) FAILURE TO MEET FQHC REQUIRE14 MENTS.—

15 ‘‘(A) IN GENERAL.—With respect to any

16 entity or organization that is receiving funds

17 awarded under this section and which subse18 quently fails to meet the requirements to qual19 ify as a FQHC under section 1905(l)(2)(B) of

20 the Social Security Act or is an entity or orga21 nization that is not required to meet the re22 quirements to qualify as a FQHC under section

23 1905(l)(2)(B) of the Social Security Act but

24 fails to meet the requirements of this section,

25 the Secretary shall terminate the award of
52

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1 funds under this section to such entity or orga2 nization.

3 ‘‘(B) NOTICE.—Prior to any termination

4 of funds under this section to an entity or orga5 nization, the entity or organization shall be en6 titled to 60 days’ prior notice of termination

7 and, as provided by the Secretary in regula8 tions, an opportunity to correct any deficiencies

9 in order to allow the entity or organization to

10 continue to receive funds under this section.

11 ‘‘(2) REQUIREMENTS.—Upon any termination

12 of funding under this section, the Secretary may (to

13 the extent practicable)—

14 ‘‘(A) sell any property (including equip15 ment) acquired or constructed by the entity or

16 organization using funds made available under

17 this section or transfer such property to an18 other FQHC, except that the Secretary shall re19 imburse any costs which were incurred by the

20 entity or organization in acquiring or construct21 ing such property (including equipment) which

22 were not supported by grants under this sec23 tion; and
53

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1 ‘‘(B) recoup any funds provided to an en2 tity or organization terminated under this sec3 tion.

4 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There

5 are authorized to be appropriated to carry out this section

6 $600,000,000 for each of the fiscal years 1994 through

7 1998.’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 subsection (a) shall become effective with respect to serv10 ices furnished by a federally qualified health center or

11 other qualifying entity or organization described in this

12 section beginning on or after the date of enactment of this

13 Act.

14 TITLE III—EXPANDING THE SUP15 PLY OF HEALTH PROFES16 SIONALS IN RURAL AREAS

17 SEC. 301. EXPANSION OF NATIONAL HEALTH SERVICE

18 CORPS.

19 Section 338H(b) of the Public Health Service Act (42

20 U.S.C. 254q(b)) is amended—

21 (1) in paragraph (1), by striking ‘‘and such

22 sums’’ and all that follows through the end thereof

23 and inserting ‘‘$120,000,000 for each of the fiscal

24 years 1993 through 2000.’’; and

25 (2) in paragraph (2)—
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1 (A) by redesignating subparagraphs (A)

2 and (B) as subparagraphs (B) and (C), respec3 tively; and

4 (B) by inserting before subparagraph (B)

5 (as so redesignated) the following new subpara6 graph:

7 ‘‘(A) IN GENERAL.—Of the amount appro8 priated under paragraph (1) for each fiscal

9 year, the Secretary shall utilize 25 percent of

10 such amount to carry out section 338A and 75

11 percent of such amount to carry out section

12 338B.’’.

13 SEC. 302. TAX INCENTIVES FOR PRACTICE IN RURAL

14 AREAS.

15 (a) NONREFUNDABLE CREDIT FOR CERTAIN PRI16 MARY HEALTH SERVICES PROVIDERS.—

17 (1) IN GENERAL.—Subpart A of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code

19 of 1986 (relating to nonrefundable personal credits)

20 is amended by inserting after section 25 the follow21 ing new section:

22 ‘‘SEC. 25A. PRIMARY HEALTH SERVICES PROVIDERS.

23 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a

24 qualified primary health services provider, there is allowed

25 as a credit against the tax imposed by this chapter for
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1 any taxable year in a mandatory service period an amount

2 equal to the product of—

3 ‘‘(1) the lesser of—

4 ‘‘(A) the number of months of such period

5 occurring in such taxable year, or

6 ‘‘(B) 36 months, reduced by the number of

7 months taken into account under this para8 graph with respect to such provider for all pre9 ceding taxable years (whether or not in the

10 same mandatory service period), multiplied by

11 ‘‘(2) $1,000 ($500 in the case of a qualified

12 primary health services provider who is a physician

13 assistant or a nurse practitioner).

14 ‘‘(b) QUALIFIED PRIMARY HEALTH SERVICES PRO15 VIDER.—For purposes of this section, the term ‘qualified

16 primary health services provider’ means any physician,

17 physician assistant, or nurse practitioner who for any

18 month during a mandatory service period is certified by

19 the Bureau to be a primary health services provider who—

20 ‘‘(1) is providing primary health services—

21 ‘‘(A) full time, and

22 ‘‘(B) to individuals at least 80 percent of

23 whom reside in a rural health professional

24 shortage area,
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1 ‘‘(2) is not receiving during such year a scholar2 ship under the National Health Service Corps Schol3 arship Program or a loan repayment under the Na4 tional Health Service Corps Loan Repayment Pro5 gram,

6 ‘‘(3) is not fulfilling service obligations under

7 such Programs, and

8 ‘‘(4) has not defaulted on such obligations.

9 ‘‘(c) MANDATORY SERVICE PERIOD.—For purposes

10 of this section, the term ‘mandatory service period’ means

11 the period of 60 consecutive calendar months beginning

12 with the first month the taxpayer is a qualified primary

13 health services provider.

14 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur15 poses of this section—

16 ‘‘(1) BUREAU.—The term ‘Bureau’ means the

17 Bureau of Health Care Delivery and Assistance,

18 Health Resources and Services Administration of the

19 United States Public Health Service.

20 ‘‘(2) PHYSICIAN.—The term ‘physician’ has the

21 meaning given to such term by section 1861(r) of

22 the Social Security Act.

23 ‘‘(3) PHYSICIAN ASSISTANT; NURSE PRACTI24 TIONER.—The terms ‘physician assistant’ and ‘nurse
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1 practitioner’ have the meanings given to such terms

2 by section 1861(aa)(3) of the Social Security Act.

3 ‘‘(4) PRIMARY HEALTH SERVICES PROVIDER.—

4 The term ‘primary health services provider’ means a

5 provider of primary health services (as defined in

6 section 330(b)(1) of the Public Health Service Act).

7 ‘‘(5) RURAL HEALTH PROFESSIONAL SHORTAGE

8 AREA.—The term ‘rural health professional shortage

9 area’ means—

10 ‘‘(A) a rural health professional shortage

11 area (as defined in section 332(a)(1)(A) of the

12 Public Health Service Act) in a rural area (as

13 determined under section 1886(d)(2)(D) of the

14 Social Security Act), or

15 ‘‘(B) an area which is determined by the

16 Secretary of Health and Human Services as

17 equivalent to an area described in subparagraph

18 (A) and which is designated by the Bureau of

19 the Census as not urbanized.

20 ‘‘(C) a community that is certified as un21 derserved by the Secretary for purposes of par22 ticipation in the rural health clinic program

23 under title XVIII of the Social Security Act.

24 ‘‘(e) RECAPTURE OF CREDIT.—
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1 ‘‘(1) IN GENERAL.—If, during any taxable year,

2 there is a recapture event, then the tax of the tax3 payer under this chapter for such taxable year shall

4 be increased by an amount equal to the product of—

5 ‘‘(A) the applicable percentage, and

6 ‘‘(B) the aggregate unrecaptured credits

7 allowed to such taxpayer under this section for

8 all prior taxable years.

9 ‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.—

10 ‘‘(A) IN GENERAL.—For purposes of this

11 subsection, the applicable recapture percentage

12 shall be determined from the following table:

‘‘If the recapture The applicable recapevent 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.

13 ‘‘(B) TIMING.—For purposes of subpara14 graph (A), month 1 shall begin on the first day

15 of the mandatory service period.

16 ‘‘(3) RECAPTURE EVENT DEFINED.—

17 ‘‘(A) IN GENERAL.—For purposes of this

18 subsection, the term ‘recapture event’ means

19 the failure of the taxpayer to be a qualified pri20 mary health services provider for any month

21 during any mandatory service period.
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1 ‘‘(B) CESSATION OF DESIGNATION.—The

2 cessation of the designation of any area as a

3 rural health professional shortage area after the

4 beginning of the mandatory service period for

5 any taxpayer shall not constitute a recapture

6 event.

7 ‘‘(C) SECRETARIAL WAIVER.—The Sec8 retary may waive any recapture event caused by

9 extraordinary circumstances.

10 ‘‘(4) NO CREDITS AGAINST TAX.—Any increase

11 in tax under this subsection shall not be treated as

12 a tax imposed by this chapter for purposes of deter13 mining the amount of any credit under subpart A,

14 B, or D of this part.’’.

15 (2) CLERICAL AMENDMENT.—The table of sec16 tions for subpart A of part IV of subchapter A of

17 chapter 1 of such Code is amended by inserting

18 after the item relating to section 25 the following

19 new item:

‘‘Sec. 25A. Primary health services providers.’’.

20 (3) EFFECTIVE DATE.—The amendments made

21 by this subsection shall apply to taxable years begin22 ning after the date of the enactment of this Act.

23 (b) NATIONAL HEALTH SERVICE CORPS LOAN RE24 PAYMENTS EXCLUDED FROM GROSS INCOME.—
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1 (1) IN GENERAL.—Part III of subchapter B of

2 chapter 1 of the Internal Revenue Code of 1986 (re3 lating to items specifically excluded from gross in4 come) is amended by redesignating section 136 as

5 section 137 and by inserting after section 135 the

6 following new section:

7 ‘‘SEC. 136. NATIONAL HEALTH SERVICE CORPS LOAN RE8 PAYMENTS.

9 ‘‘(a) GENERAL RULE.—Gross income shall not in10 clude any qualified loan repayment.

11 ‘‘(b) QUALIFIED LOAN REPAYMENT.—For purposes

12 of this section, the term ‘qualified loan repayment’ means

13 any payment made on behalf of the taxpayer by the Na14 tional Health Service Corps Loan Repayment Program

15 under section 338B(g) of the Public Health Service Act.’’.

16 (2) CONFORMING AMENDMENT.—Paragraph (3)

17 of section 338B(g) of the Public Health Service Act

18 is amended by striking ‘‘Federal, State, or local’’

19 and inserting ‘‘State or local’’.

20 (3) CLERICAL AMENDMENT.—The table of sec21 tions for part III of subchapter B of chapter 1 of

22 the Internal Revenue Code of 1986 is amended by

23 striking the item relating to section 136 and insert24 ing the following:

‘‘Sec. 136. National Health Service Corps loan repayments.

‘‘Sec. 137. Cross references to other Acts.’’.
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1 (4) EFFECTIVE DATE.—The amendments made

2 by this subsection shall apply to payments made

3 under section 338B(g) of the Public Health Service

4 Act after the date of the enactment of this Act.

5 (c) EXPENSING OF MEDICAL EQUIPMENT.—

6 (1) IN GENERAL.—Section 179 of the Internal

7 Revenue Code of 1986 (relating to election to ex8 pense certain depreciable business assets) is amend9 ed—

10 (A) by striking paragraph (1) of subsection

11 (b) and inserting the following:

12 ‘‘(1) DOLLAR LIMITATION.—

13 ‘‘(A) GENERAL RULE.—The aggregate cost

14 which may be taken into account under sub15 section (a) for any taxable year shall not exceed

16 $10,000.

17 ‘‘(B) RURAL HEALTH CARE PROPERTY.—

18 In the case of rural health care property, the

19 aggregate cost which may be taken into account

20 under subsection (a) for any taxable year shall

21 not exceed $25,000, reduced by the amount

22 otherwise taken into account under subsection

23 (a) for such year.’’; and

24 (B) by adding at the end of subsection (d)

25 the following new paragraph:
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1 ‘‘(11) RURAL HEALTH CARE PROPERTY.—For

2 purposes of this section, the term ‘rural health care

3 property’ means section 179 property used by a phy4 sician (as defined in section 1861(r) of the Social

5 Security Act) in the active conduct of such physi6 cian’s full-time trade or business of providing pri7 mary health services (as defined in section 330(b)(1)

8 of the Public Health Service Act) in a rural health

9 professional shortage area (as defined in section

10 25A(d)(5)).’’.

11 (2) EFFECTIVE DATE.—The amendments made

12 by this subsection shall apply to property placed in

13 service in taxable years beginning after the date of

14 enactment of this Act.

15 (d) DEDUCTION FOR STUDENT LOAN PAYMENTS BY

16 MEDICAL PROFESSIONALS PRACTICING IN RURAL

17 AREAS.—

18 (1) INTEREST ON STUDENT LOANS NOT TREAT19 ED AS PERSONAL INTEREST.—Section 163(h)(2) of

20 the Internal Revenue Code of 1986 (defining per21 sonal interest) is amended by striking ‘‘and’’ at the

22 end of subparagraph (D), by striking the period at

23 the end of subparagraph (E) and inserting ‘‘, and’’,

24 and by adding at the end thereof the following new

25 subparagraph:
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1 ‘‘(F) any qualified medical education interest

2 (within the meaning of subsection (k)).’’.

3 (2) QUALIFIED MEDICAL EDUCATION INTEREST

4 DEFINED.—Section 163 of such Code (relating to in5 terest expenses) is amended by redesignating sub6 section (k) as subsection (l) and by inserting after

7 subsection (j) the following new subsection:

8 ‘‘(k) QUALIFIED MEDICAL EDUCATION INTEREST OF

9 MEDICAL PROFESSIONALS PRACTICING IN RURAL

10 AREAS.—

11 ‘‘(1) IN GENERAL.—For purposes of subsection

12 (h)(2)(F), the term ‘qualified medical education in13 terest’ means an amount which bears the same ratio

14 to the interest paid on qualified educational loans

15 during the taxable year by an individual performing

16 services under a qualified rural medical practice

17 agreement as—

18 ‘‘(A) the number of months during the tax19 able year during which such services were per20 formed, bears to

21 ‘‘(B) the number of months in the taxable

22 year.

23 ‘‘(2) DOLLAR LIMITATION.—The aggregate

24 amount which may be treated as qualified medical
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1 education interest for any taxable year with respect

2 to any individual shall not exceed $5,000.

3 ‘‘(3) QUALIFIED RURAL MEDICAL PRACTICE

4 AGREEMENT.—For purposes of this subsection—

5 ‘‘(A) IN GENERAL.—The term ‘qualified

6 rural medical practice agreement’ means a writ7 ten agreement between an individual and an ap8 plicable rural community under which the indi9 vidual agrees—

10 ‘‘(i) in the case of a medical doctor,

11 upon completion of the individual’s resi12 dency (or internship if no residency is re13 quired), or

14 ‘‘(ii) in the case of a registered nurse,

15 nurse practitioner, or physician’s assistant,

16 upon completion of the education to which

17 the qualified education loan relates,

18 to perform full-time services as such a medical

19 professional in the applicable rural community

20 for a period of 24 consecutive months. An indi21 vidual and an applicable rural community may

22 elect to have the agreement apply for 36 con23 secutive months rather than 24 months.

24 ‘‘(B) SPECIAL RULE FOR COMPUTING PE25 RIODS.—An individual shall be treated as meet-
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1 ing the 24 or 36 consecutive month requirement

2 under subparagraph (A) if, during each 12-con3 secutive month period within either such period,

4 the individual performs full-time services as a

5 medical doctor, registered nurse, nurse practi6 tioner, or physician’s assistant, whichever ap7 plies, in the applicable rural community during

8 9 of the months in such 12-consecutive month

9 period. For purposes of this subsection, an indi10 vidual meeting the requirements of the preced11 ing sentence shall be treated as performing

12 services during the entire 12-month period.

13 ‘‘(C) APPLICABLE RURAL COMMUNITY.—

14 The term ‘applicable rural community’ means—

15 ‘‘(i) any political subdivision of a

16 State which—

17 ‘‘(I) has a population of 5,000 or

18 less, and

19 ‘‘(II) has a per capita income of

20 $15,000 or less, or

21 ‘‘(ii) an Indian reservation which has

22 a per capita income of $15,000 or less.

23 ‘‘(4) QUALIFIED EDUCATIONAL LOAN.—The

24 term ‘qualified educational loan’ means any indebt25 edness to pay qualified tuition and related expenses
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1 (within the meaning of section 117(b)) and reason2 able living expenses—

3 ‘‘(A) which are paid or incurred—

4 ‘‘(i) as a candidate for a degree as a

5 medical doctor at an educational institu6 tion described in section 170(b)(1)(A)(ii),

7 or

8 ‘‘(ii) in connection with courses of in9 struction at such an institution necessary

10 for certification as a registered nurse,

11 nurse practitioner, or physician’s assistant,

12 and

13 ‘‘(B) which are paid or incurred within a

14 reasonable time before or after such indebted15 ness is incurred.

16 ‘‘(5) RECAPTURE.—If an individual fails to

17 carry out a qualified rural medical practice agree18 ment during any taxable year, then—

19 ‘‘(A) no deduction with respect to such

20 agreement shall be allowable by reason of sub21 section (h)(2)(F) for such taxable year and any

22 subsequent taxable year, and

23 ‘‘(B) there shall be included in gross in24 come for such taxable year the aggregate

25 amount of the deductions allowable under this
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1 section (by reason of subsection (h)(2)(F)) for

2 all preceding taxable years.

3 ‘‘(6) DEFINITIONS.—For purposes of this sub4 section, the terms ‘registered nurse’, ‘nurse practi5 tioner’, and ‘physician’s assistant’ have the meaning

6 given such terms by section 1861 of the Social Secu7 rity Act.’’.

8 (3) DEDUCTION ALLOWED IN COMPUTING AD9 JUSTED GROSS INCOME.—Section 62(a) of such

10 Code is amended by inserting after paragraph (13)

11 the following new paragraph:

12 ‘‘(14) INTEREST ON STUDENT LOANS OF RURAL

13 HEALTH PROFESSIONALS.—The deduction allowable

14 by reason of section 163(h)(2)(F) (relating to stu15 dent loan payments of medical professionals practic16 ing in rural areas).’’.

17 (4) EFFECTIVE DATE.—The amendments made

18 by this subsection shall apply to taxable years begin19 ning after the date of the enactment of this

20 Act.applies, in the applicable rural community dur21 ing 9 of the months in such 12-consecutive month

22 period. For purposes of this subsection, an individ23 ual meeting the requirements of the preceding sen24 tence shall be treated as performing services during

25 the entire 12-month period.
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1 ‘‘(C) APPLICABLE RURAL COMMUNITY.—

2 The term ‘applicable rural community’ means—

3 ‘‘(i) any political subdivision of a

4 State which—

5 ‘‘(I) has a population of 5,000 or

6 less, and

7 ‘‘(II) has a per capita income of

8 $15,000 or less, or

9 ‘‘(ii) an Indian reservation which has

10 a per capita income of $15,000 or less.

11 ‘‘(4) QUALIFIED EDUCATIONAL LOAN.—The

12 term ‘qualified educational loan’ means any indebt13 edness to pay qualified tuition and related expenses

14 (within the meaning of section 117(b)) and reason15 able living expenses—

16 ‘‘(A) which are paid or incurred—

17 ‘‘(i) as a candidate for a degree as a

18 medical doctor at an educational institu19 tion described in section 170(b)(1)(A)(ii),

20 or

21 ‘‘(ii) in connection with courses of in22 struction at such an institution necessary

23 for certification as a registered nurse,

24 nurse practitioner, or physician’s assistant,

25 and
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1 ‘‘(B) which are paid or incurred within a

2 reasonable time before or after such indebted3 ness is incurred.

4 ‘‘(5) RECAPTURE.—If an individual fails to

5 carry out a qualified rural medical practice agree6 ment during any taxable year, then—

7 ‘‘(A) no deduction with respect to such

8 agreement shall be allowable by reason of sub9 section (h)(2)(F) for such taxable year and any

10 subsequent taxable year, and

11 ‘‘(B) there shall be included in gross in12 come for such taxable year the aggregate

13 amount of the deductions allowable under this

14 section (by reason of subsection (h)(2)(F)) for

15 all preceding taxable years.

16 ‘‘(6) DEFINITIONS.—For purposes of this sub17 section, the terms ‘registered nurse’, ‘nurse practi18 tioner’, and ‘physician’s assistant’ have the meaning

19 given such terms by section 1861 of the Social Secu20 rity Act.’’.

21 (3) DEDUCTION ALLOWED IN COMPUTING AD22 JUSTED GROSS INCOME.—Section 62(a) of such

23 Code is amended by inserting after paragraph (13)

24 the following new paragraph:
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1 ‘‘(14) INTEREST ON STUDENT LOANS OF RURAL

2 HEALTH PROFESSIONALS.—The deduction allowable

3 by reason of section 163(h)(2)(F) (relating to stu4 dent loan payments of medical professionals practic5 ing in rural areas).’’.

6 (4) EFFECTIVE DATE.—The amendments made

7 by this subsection shall apply to taxable years begin8 ning after the date of the enactment of this Act.

9 TITLE IV—MISCELLANEOUS

10 PROVISIONS

11 SEC. 401. EFFECTIVE DATE.

12 Unless specifically provided otherwise, this Act and

13 the amendments made by this Act shall become effective

14 on the date of enactment of this Act.

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