II

104TH CONGRESS

1ST SESSION S. 308

To increase access to, control the costs associated with, and improve the

quality of health care in States through health insurance reform, State

innovation, public health, medical research, and reduction of fraud and

abuse, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 1 (legislative day, JANUARY 30), 1995

Mr. GRAHAM (for himself and Mr. HATFIELD) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To increase access to, control the costs associated with, and

improve the quality of health care in States through

health insurance reform, State innovation, public health,

medical research, and reduction of fraud and abuse, 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 ‘‘Health Partnership Act of 1995’’.

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

7 this Act is as follows:
2

•S 308 IS

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Definitions.

TITLE I—HEALTH INSURANCE REFORM

Sec. 1001. Establishment of standards.

Sec. 1002. Expansion and revision of medicare select policies.

Sec. 1003. Effective dates.

TITLE II—STATE INNOVATION

Subtitle A—State Waiver Authority

Sec. 2001. State health reform projects.

Subtitle B—State Laws

PART A—EXISTING WAIVERS AND HAWAII PREPAID HEALTH CARE ACT

Sec. 2101. Continuance of existing Federal law waivers.

Sec. 2102. Preemption of Hawaii Prepaid Health Care Act.

PART B—ERISA REVIEW

Sec. 2110. Specific exemption from ERISA preemption.

Sec. 2111. Discretionary exemptions from ERISA preemptions.

Sec. 2112. Procedures for adopting discretionary exemptions.

Sec. 2113. Operation of the Commission.

TITLE III—PUBLIC HEALTH AND RURAL AND UNDERSERVED

ACCESS IMPROVEMENT

Sec. 3001. Short title.

Sec. 3002. Establishment of new title XXVII regarding public health programs.

TITLE IV—MEDICAL AND HEALTH RESEARCH

Sec. 4001. Short title.

Sec. 4002. Findings.

Sec. 4003. National Fund for Health Research.

TITLE V—FRAUD AND ABUSE

Sec. 5001. Short title.

Subtitle A—All-Payer Fraud and Abuse Control Program

Sec. 5101. All-payer fraud and abuse control program.

Sec. 5102. Application of certain Federal health anti-fraud and abuse sanctions

to fraud and abuse against any health plan.

Subtitle B—Revisions to Current Sanctions for Fraud and Abuse

Sec. 5201. Mandatory exclusion from participation in medicare and State

health care programs.

Sec. 5202. Establishment of minimum period of exclusion for certain individuals and entities subject to permissive exclusion from medicare

and State health care programs.
3

•S 308 IS

Sec. 5203. Permissive exclusion of individuals with ownership or control interest in sanctioned entities.

Sec. 5204. Sanctions against practitioners and persons for failure to comply

with statutory obligations.

Sec. 5205. Intermediate sanctions for medicare health maintenance organizations.

Sec. 5206. Effective date.

Subtitle C—Civil Monetary Penalties

Sec. 5301. Civil monetary penalties.

Subtitle D—Payments for State Health Care Fraud Control Units

Sec. 5401. Establishment of State fraud units.

Sec. 5402. Requirements for State fraud units.

Sec. 5403. Scope and purpose.

Sec. 5404. Payments to States.

TITLE VI—REVENUE PROVISIONS

Sec. 6000. Amendment of 1986 Code.

Subtitle A—Financing Provisions

PART I—INCREASE IN TAX ON TOBACCO PRODUCTS

Sec. 6001. Increase in excise taxes on tobacco products.

Sec. 6002. Modifications of certain tobacco tax provisions.

Sec. 6003. Imposition of excise tax on manufacture or importation of roll-yourown tobacco.

Subtitle B—Health Care Reform Trust Fund

Sec. 6101. Establishment of Health Care Reform Trust Fund.

1 SEC. 2. FINDINGS.

2 The Congress finds the following:

3 (1) Americans support universal coverage. The

4 people of this country agree that all Americans

5 should be guaranteed access to affordable, high6 quality health care.

7 (2) Although there is common agreement on the

8 goal of universal coverage, there are many different

9 ways to achieve this goal. The States can play an

10 important role in achieving universal coverage for
4

•S 308 IS

1 our population, demonstrating additional health re2 forms that may be needed on a national level to en3 hance access to affordable, high-quality health care.

4 A number of States have already initiated health

5 care reform that takes into account their special eco6 nomic, demographic, and financial conditions. These

7 State models combine unique reform innovations

8 with the various strengths of their existing State

9 health care systems, including market competition,

10 employer pools and association plans, technology re11 view and public health outreach projects. The States

12 can also serve as testing grounds to identify effective

13 alternatives for making the transition to universal

14 coverage, while maintaining the strengths of the cur15 rent health care system.

16 (3) Maintaining the high quality of health care

17 Americans expect and controlling costs are also im18 portant goals of health care reform. As payers of

19 health care, the States have a strong incentive to en20 sure that such States purchase high-quality, cost-ef21 fective services for the residents of such States. The

22 States can develop and test alternative payment and

23 delivery systems to ensure that these goals are

24 achieved.
5

•S 308 IS

1 (4) In light of the success of various State-initi2 ated reforms and in the absence of comprehensive

3 Federal health reform, there are many health-related

4 issues that should be addressed at the State level.

5 As with social security and child labor protections,

6 States can lead the way in testing ideas for national

7 application or application in other States.

8 (5) The States should have the flexibility to test

9 alternative health reforms with the objectives of in10 creasing access to care, controlling health care costs,

11 and maintaining or improving the quality of health

12 care.

13 SEC. 3. DEFINITIONS.

14 Unless specifically provided otherwise, as used in this

15 Act:

16 (1) NAIC.—The term ‘‘NAIC’’ means the Na17 tional Association of Insurance Commissioners.

18 (2) PERFORMANCE MEASURES.—The term

19 ‘‘performance measures’’ means measurable indica20 tors that are used to assess progress towards achiev21 ing the broad goals of increasing access to care, con22 trolling health care costs, and maintaining or im23 proving the quality of health care.

24 (3) SECRETARY.—The term ‘‘Secretary’’ means

25 the Secretary of Health and Human Services.
6

•S 308 IS

1 (4) STATE.—The term ‘‘State’’ means each of

2 the several States, the District of Columbia, Puerto

3 Rico, the Virgin Islands, the Northern Marina Is4 lands, and America Samoa.

5 TITLE I—HEALTH INSURANCE

6 REFORM

7 SEC. 1001. ESTABLISHMENT OF STANDARDS.

8 (a) IN GENERAL.—The Secretary shall request that

9 the NAIC develop, not later than 6 months after the date

10 of enactment of this Act, standards for health insurance

11 plans with respect to—

12 (1) the renewability of coverage under such

13 plans;

14 (2) the portability of coverage under such plans,

15 including—

16 (A) limitations on the use of pre-existing

17 conditions;

18 (B) the concept of an ‘‘amnesty period’’

19 during which limitations on pre-existing condi20 tions would be suspended; and

21 (C) the advisability of open enrollment pe22 riods;

23 (3) guaranteed issue with respect to all health

24 insurance coverage products;
7

•S 308 IS

1 (4) the establishment of an adjusted community

2 rating system with adjustment factors limited to age

3 (with no more than a 2:1 variation in premiums

4 based on age) and geography;

5 (5) solvency standards for health insurance

6 plans regulations under Federal and State law, in7 cluding the development of risk-based capital stand8 ards for health plans, solvency standards for health

9 plans, self-funded employer-sponsored health plans,

10 and multi-employer welfare arrangements and asso11 ciation plans;

12 (6) stop-loss standards for self-funded health

13 insurance plans and multi-employer welfare arrange14 ments and association plans;

15 (7) the identification of minimum employer size

16 for self-funding and the interrelationship between

17 self-funding and the community-rated pool of enroll18 ees; and

19 (8) any other areas determined appropriate by

20 the Secretary, including enforcement of standards

21 under this section.

22 (b) REVIEW.—Not later than 60 days after receipt

23 of the standards developed by the NAIC under subsection

24 (a), the Secretary shall complete a review of such stand25 ards. If the Secretary, based on such review, approves
8

•S 308 IS

1 such standards, such standards shall apply with respect

2 to all health insurance plans offered or operating in a

3 State on and after the date specified in subsection (d)

4 herein.

5 (c) FAILURE TO DEVELOP STANDARDS OR FAILURE

6 TO APPROVE.—If the NAIC fails to develop standards

7 within the 6-month period referred to in subsection (a),

8 or the Secretary fails to approve any standards developed

9 under such subsection, the Secretary shall develop, not

10 later than 15 months after the date of enactment of this

11 Act, standards applicable to health insurance plans, in12 cluding standards related to the matter described in para13 graphs (1) through (8) of subsection (a) (‘‘Federal stand14 ards’’) and such standards shall apply with respect to all

15 health insurance plans offered or operating in a State on

16 and after the date specified in subsection (d) herein.

17 (d) EFFECTIVE DATE.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), the effective date specified in this sub20 section for a State is the date the State adopts the

21 standards developed under this section or 1 year

22 after the date the NAIC or the Secretary first

23 adopts such standards, whichever is earlier.
9

•S 308 IS

1 (2) EXCEPTION.—In the case of a State which

2 the Secretary, in consultation with the NAIC, identi3 fies as—

4 (A) requiring State legislation (other than

5 legislation appropriating funds) in order for

6 health insurance policies to meet the standards

7 developed under this section, but

8 (B) having a legislature which is not

9 scheduled to meet in 1996 in a legislative ses10 sion in which such legislation may be consid11 ered,

12 the date specified in this subsection is the first day

13 of the first calendar quarter beginning after the

14 close of the first legislative session of the State legis15 lature that begins on or after January 1, 1996. For

16 purposes of the previous sentence, in the case of a

17 State that has a 2-year legislative session, each year

18 of such session shall be deemed to be a separate reg19 ular session of the State legislature.

20 (e) WORKING GROUP.—In promulgating standards

21 under this section, the NAIC or Secretary shall consult

22 with a working group composed of representatives of issu23 ers of health insurance policies, consumer groups, health

24 insurance beneficiaries, and other qualified individuals.

25 Such representatives shall be selected in a manner so as
10

•S 308 IS

1 to assure balanced representation among the interested

2 groups.

3 (f) EFFECT ON STATE LAW.—Nothing in this section

4 shall be construed to preempt any State law to the extent

5 that such State law implements more progressive reforms

6 than those implemented under the standards developed

7 under this section, as determined by the Secretary.

8 SEC. 1002. EXPANSION AND REVISION OF MEDICARE SE9 LECT POLICIES.

10 (a) PERMITTING MEDICARE SELECT POLICIES IN

11 ALL STATES.—

12 (1) IN GENERAL.—Subsection (c) of section

13 4358 of the Omnibus Budget Reconciliation Act of

14 1990 (42 U.S.C. 1320c–3 note) is hereby repealed.

15 (2) CONFORMING AMENDMENT.—Section 4358

16 of such Act (42 U.S.C. 1320c–3 note) is amended

17 by redesignating subsection (d) as subsection (c).

18 (b) REQUIREMENTS OF MEDICARE SELECT POLI19 CIES.—Section 1882(t)(1) of the Social Security Act (42

20 U.S.C. 1395ss(t)(1)) is amended to read as follows:

21 ‘‘(1)(A) If a medicare supplemental policy meets the

22 1991 NAIC Model Regulation or 1991 Federal Regulation

23 and otherwise complies with the requirements of this sec24 tion except that—
11

•S 308 IS

1 ‘‘(i) the benefits under such policy are re2 stricted to items and services furnished by certain

3 entities (or reduced benefits are provided when items

4 or services are furnished by other entities), and

5 ‘‘(ii) in the case of a policy described in sub6 paragraph (C)(i)—

7 ‘‘(I) the benefits under such policy are not

8 one of the groups or packages of benefits de9 scribed in subsection (p)(2)(A),

10 ‘‘(II) except for nominal copayments im11 posed for services covered under part B of this

12 title, such benefits include at least the core

13 group of basic benefits described in subsection

14 (p)(2)(B), and

15 ‘‘(III) an enrollee’s liability under such pol16 icy for physician’s services covered under part

17 B of this title is limited to the nominal

18 copayments described in subclause (II),

19 the policy shall nevertheless be treated as meeting those

20 standards if the policy meets the requirements of subpara21 graph (B).

22 ‘‘(B) A policy meets the requirements of this sub23 paragraph if—

24 ‘‘(i) full benefits are provided for items and

25 services furnished through a network of entities
12

•S 308 IS

1 which have entered into contracts or agreements

2 with the issuer of the policy;

3 ‘‘(ii) full benefits are provided for items and

4 services furnished by other entities if the services are

5 medically necessary and immediately required be6 cause of an unforeseen illness, injury, or condition

7 and it is not reasonable given the circumstances to

8 obtain the services through the network;

9 ‘‘(iii) the network offers sufficient access;

10 ‘‘(iv) the issuer of the policy has arrangements

11 for an ongoing quality assurance program for items

12 and services furnished through the network;

13 ‘‘(v)(I) the issuer of the policy provides to each

14 enrollee at the time of enrollment an explanation of

15 the matters described in subparagraph (D), and

16 ‘‘(II) each enrollee prior to enrollment acknowl17 edges receipt of the explanation provided under

18 subclause (I); and

19 ‘‘(vi) the issuer of the policy makes available to

20 individuals, in addition to the policy described in this

21 subsection, any policy (otherwise offered by the is22 suer to individuals in the State) that meets the 1991

23 Model NAIC Regulation or 1991 Federal Regulation

24 and other requirements of this section without re25 gard to this subsection.
13

•S 308 IS

1 ‘‘(C)(i) A policy described in this subparagraph—

2 ‘‘(I) is offered by an eligible organization (as

3 defined in section 1876(b)),

4 ‘‘(II) is not a policy or plan providing benefits

5 pursuant to a contract under section 1876 or an ap6 proved demonstration project described in section

7 603(c) of the Social Security Amendments of 1983,

8 section 2355 of the Deficit Reduction Act of 1984,

9 or section 9412(b) of the Omnibus Budget Reconcili10 ation Act of 1986, and

11 ‘‘(III) provides benefits which, when combined

12 with benefits which are available under this title, are

13 substantially similar to benefits under policies of14 fered to individuals who are not entitled to benefits

15 under this title.

16 ‘‘(ii) In making a determination under subclause (III)

17 of clause (i) as to whether certain benefits are substan18 tially similar, there shall not be taken into account, except

19 in the case of preventive services, benefits provided under

20 policies offered to individuals who are not entitled to bene21 fits under this title which are in addition to the benefits

22 covered by this title and which are benefits an entity must

23 provide in order to meet the definition of an eligible orga24 nization under section 1876(b)(1).
14

•S 308 IS

1 ‘‘(D) The matters described in this subparagraph,

2 with respect to a policy, are as follows:

3 ‘‘(i) The restrictions on payment under the pol4 icy for services furnished other than by or through

5 the network.

6 ‘‘(ii) Out of area coverage under the policy.

7 ‘‘(iii) The policy’s coverage of emergency serv8 ices and urgently needed care.

9 ‘‘(iv) The availability of a policy through the en10 tity that meets the 1991 Model NAIC Regulation or

11 1991 Federal Regulation without regard to this sub12 section and the premium charged for such policy.’’.

13 (c) RENEWABILITY OF MEDICARE SELECT POLI14 CIES.—Section 1882(q)(1) of the Social Security Act (42

15 U.S.C. 1395ss(q)(1)) is amended—

16 (1) by striking ‘‘(1) Each’’ and inserting

17 ‘‘(1)(A) Except as provided in subparagraph (B),

18 each’’;

19 (2) by redesignating subparagraphs (A) and

20 (B) as clauses (i) and (ii), respectively; and

21 (3) by adding at the end the following new sub22 paragraph:

23 ‘‘(B)(i) Except as provided in clause (ii), in the

24 case of a policy that meets the requirements of sub25 section (t), an issuer may cancel or nonrenew such
15

•S 308 IS

1 policy with respect to an individual who leaves the

2 service area of such policy.

3 ‘‘(ii) If an individual described in clause (i)

4 moves to a geographic area where the issuer de5 scribed in clause (i), or where an affiliate of such is6 suer, is issuing medicare supplemental policies, such

7 individual must be permitted to enroll in any medi8 care supplemental policy offered by such issuer or

9 affiliate that provides benefits comparable to or less

10 than the benefits provided in the policy being can11 celed or nonrenewed. An individual whose coverage

12 is canceled or nonrenewed under this subparagraph

13 shall, as part of the notice of termination or

14 nonrenewal, be notified of the right to enroll in other

15 medicare supplemental policies offered by the issuer

16 or its affiliates.

17 ‘‘(iii) For purposes of this subparagraph, the

18 term ‘affiliate’ shall have the meaning given such

19 term by the 1991 NAIC Model Regulation.’’.

20 (d) CIVIL MONEY PENALTY.—Section 1882(t)(2) of

21 the Social Security Act (42 U.S.C. 1395ss(t)(2)) is

22 amended—

23 (1) by striking ‘‘(2)’’ and inserting ‘‘(2)(A)’’;
16

•S 308 IS

1 (2) by redesignating subparagraphs (A), (B),

2 (C), and (D) as clauses (i), (ii), (iii), and (iv), re3 spectively;

4 (3) in clause (iv), as so redesignated—

5 (A) by striking ‘‘paragraph (1)(E)(i)’’ and

6 inserting ‘‘paragraph (1)(B)(v)(I), and

7 (B) by striking ‘‘paragraph (1)(E)(ii)’’ and

8 inserting ‘‘paragraph (1)(B)(v)(II)’’;

9 (4) by striking ‘‘the previous sentence’’ and in10 serting ‘‘this subparagraph’’; and

11 (5) by adding at the end the following new sub12 paragraph:

13 ‘‘(B) If the Secretary determines that an issuer of

14 a policy approved under paragraph (1) has made a mis15 representation to the Secretary or has provided the Sec16 retary with false information regarding such policy, the

17 issuer is subject to a civil money penalty in an amount

18 not to exceed $100,000 for each such determination. The

19 provisions of section 1128A (other than the first sentence

20 of subsection (a) and other than subsection (b)) shall

21 apply to a civil money penalty under this subparagraph

22 in the same manner as such provisions apply to a penalty

23 or proceeding under section 1128A(a).’’.
17

•S 308 IS

1 SEC. 1003. EFFECTIVE DATES.

2 (a) NAIC STANDARDS.—If, within 6 months after

3 the date of the enactment of this Act, the NAIC makes

4 changes in the 1991 NAIC Model Regulation (as defined

5 in section 1882(p)(1)(A) of the Social Security Act) to in6 corporate the additional requirements imposed by the

7 amendments made by section 1002, section 1882(g)(2)(A)

8 of such Act shall be applied in each State, effective for

9 policies issued to policyholders on and after the date speci10 fied in subsection (c), as if the reference to the Model Reg11 ulation adopted on June 6, 1979, were a reference to the

12 1991 NAIC Model Regulation (as so defined) as changed

13 under this subsection (such changed Regulation referred

14 to in this section as the ‘‘1995 NAIC Model Regulation’’).

15 (b) SECRETARY STANDARDS.—If the NAIC does not

16 make changes in the 1991 NAIC Model Regulation (as

17 so defined) within the 6-month period specified in sub18 section (a), the Secretary of Health and Human Services

19 (in this subsection as the ‘‘Secretary’’) shall promulgate

20 a regulation and section 1882(g)(2)(A) of the Social Secu21 rity Act shall be applied in each State, effective for policies

22 issued to policyholders on and after the date specified in

23 subsection (c), as if the reference to the Model Regulation

24 adopted in June 6, 1979, were a reference to the 1991

25 NAIC Model Regulation (as so defined) as changed by the

26 Secretary under this subsection (such changed Regulation
18

•S 308 IS

1 referred to in this section as the ‘‘1995 Federal Regula2 tion’’).

3 (c) DATE SPECIFIED.—

4 (1) IN GENERAL.—Subject to paragraph (2),

5 the date specified in this subsection for a State is

6 the earlier of—

7 (A) the date the State adopts the 1995

8 NAIC Model Regulation or the 1995 Federal

9 Regulation; or

10 (B) 1 year after the date the NAIC or the

11 Secretary first adopts such regulations.

12 (2) ADDITIONAL LEGISLATIVE ACTION RE13 QUIRED.—In the case of a State which the Secretary

14 identifies, in consultation with the NAIC, as—

15 (A) requiring State legislation (other than

16 legislation appropriating funds) in order for

17 medicare supplemental policies to meet the

18 1995 NAIC Model Regulation or the 1995 Fed19 eral Regulation, but

20 (B) having a legislature which is not

21 scheduled to meet in 1995 in a legislative ses22 sion in which such legislation may be consid23 ered,

24 the date specified in this subsection is the first day

25 of the first calendar quarter beginning after the
19

•S 308 IS

1 close of the first legislative session of the State legis2 lature that begins on or after January 1, 1995. For

3 purposes of the previous sentence, in the case of a

4 State that has a 2-year legislative session, each year

5 of such session shall be deemed to be a separate reg6 ular session of the State legislature.

7 TITLE II—STATE INNOVATION

8 Subtitle A—State Waiver Authority

9 SEC. 2001. STATE HEALTH REFORM PROJECTS.

10 (a) OBJECTIVES.—The objectives of the waiver pro11 grams approved under this section shall include, but not

12 be limited to—

13 (1) achieving the goals of increased health cov14 erage and access;

15 (2) containing the annual rate of growth in

16 public and private health care expenditures;

17 (3) ensuring that patients receive high-quality,

18 appropriate health care; and

19 (4) testing alternative reforms, such as building

20 on the private health insurance system or creating

21 new systems, to achieve the objectives of this Act.

22 (b) STATE HEALTH REFORM APPLICATIONS.—

23 (1) IN GENERAL.—A State, in consultation with

24 local governments involved in the provision of health

25 care, may apply for—
20

•S 308 IS

1 (A) an alternative State health program

2 waiver under paragraph (2); or

3 (B) a limited State health care waiver

4 under paragraph (3).

5 (2) ALTERNATIVE STATE HEALTH PROGRAM

6 WAIVERS.—

7 (A) IN GENERAL.—In accordance with this

8 paragraph, each State desiring to implement an

9 alternative State health program may submit

10 an application for waiver to the Secretary for

11 approval.

12 (B) WAIVER REQUIREMENTS SPECIFIED.—

13 A State that desires to receive a program waiv14 er under this paragraph shall prepare and sub15 mit to the Secretary, as part of the application,

16 a State health care plan that shall—

17 (i) provide and describe the manner in

18 which the State will ensure that individuals

19 residing within the State have expanded

20 access to health care coverage;

21 (ii) describe the number and percent22 age of current uninsured individuals who

23 will achieve coverage under the alternative

24 State health program;
21

•S 308 IS

1 (iii) describe the benefits package that

2 will be provided to all classes of bene3 ficiaries under the alternative State health

4 program;

5 (iv) identify Federal, State, or local

6 programs that currently provide health

7 care services in the State and describe how

8 such programs could be incorporated into

9 or coordinated with the alternative State

10 health program, to the extent practicable;

11 (v) provide that the State will develop

12 and implement health care cost contain13 ment procedures;

14 (vi) describe the public and private

15 sector financing to be provided for the al16 ternative State health program;

17 (vii) estimate the amount of Federal,

18 State, and local expenditures, as well as,

19 the costs to business and individuals under

20 the alternative State health program;

21 (viii) describe how the State plan will

22 ensure the financial solvency of the alter23 native State health program;

24 (ix) describe any changes in eligibility

25 for public subsidies;
22

•S 308 IS

1 (x) provide assurances that Federal

2 expenditures under the alternative State

3 health program shall not exceed the Fed4 eral expenditures, other than expenditures

5 made available under this Act, which would

6 otherwise be made in the aggregate for the

7 entire program period;

8 (xi) provide quality control assur9 ances, agreements, and performance meas10 ures as required by the Secretary;

11 (xii) provide for the development and

12 implementation of a State health care de13 livery system that provides increased ac14 cess to care in areas of the State where

15 there is an inadequate supply of health

16 care providers;

17 (xiii) identify all Federal law waivers

18 required to implement the alternative State

19 health program, including such waivers

20 necessary to achieve the access, cost con21 tainment, and quality goals of this Act and

22 the alternative State health program; and

23 (xiv) provide that the State will pre24 pare and submit the Secretary such re-
23

•S 308 IS

1 ports as the Secretary may require to carry

2 out program evaluations.

3 (C) PROJECT WAIVERS.—

4 (i) CRITERIA FOR SELECTION.—In se5 lecting from among the applications for al6 ternative State health program waivers,

7 the Secretary shall be satisfied that each

8 approved State alternative State health

9 program—

10 (I) will not have a negative effect

11 on quality of care;

12 (II) increase coverage of or ac13 cess for the State’s population; and

14 (III) will—

15 (aa) provide quality of care

16 and premium comparisons di17 rectly to employers and individ18 uals in an easy-to-use format,

19 (bb) contract with an exter20 nal peer review organization to

21 monitor the quality of health care

22 plans, and

23 (cc) establish a mechanism

24 within the State’s grievance proc25 ess that allows members of a
24

•S 308 IS

1 health plan to disenroll at any

2 time if it can be shown that such

3 members were provided erroneous

4 information that biased their

5 health plan selection.

6 (ii) WAIVER APPROVAL.—The Sec7 retary shall approve applications submitted

8 by States that meet the access, cost con9 tainment, and quality goals established in

10 this Act and shall waive to the extent nec11 essary to conduct each alternative State

12 health program any of the requirements of

13 this Act, including, but not limited to, eli14 gibility requirements; alternative data col15 lection systems and sampling designs that

16 focus on measuring health status, patient

17 treatment outcomes, and patient satisfac18 tion with health plans, rather than on the

19 collection of 100 percent of patient encoun20 ters; and benefit designs; and any provi21 sions of Federal law contained in the fol22 lowing:

23 (I) Titles V, XIX, and XX of the

24 Social Security Act.
25

•S 308 IS

1 (II) Title XVIII of the Social Se2 curity Act, to the extent such a waiver

3 is granted only for the operation of an

4 all-payor system or a long-term care

5 system.

6 (III) The Public Health Service

7 Act.

8 (IV) Any other Federal law au9 thorizing a Federal health care pro10 gram that the Secretary identifies as

11 providing health care services to quali12 fied recipients.

13 (3) LIMITED STATE HEALTH CARE WAIVERS.—

14 Each State which does not receive or apply for an

15 approved application under paragraph (2) may apply

16 for a limited State health care waiver. The Secretary

17 shall award limited State health care waivers to en18 sure State demonstrations of health reforms that

19 could address, but are not limited to addressing, the

20 following issues that are likely to provide guidance

21 for the development of additional national health re22 forms:

23 (A) Integration of acute and long-term

24 care systems, including delivery and financing

25 systems.
26

•S 308 IS

1 (B) Establishment of methodologies that

2 limit expenditures or establish global budgets,

3 including rate setting and provider reimburse4 ments.

5 (C) Implementation of a quality manage6 ment and improvement system.

7 (D) Strategies to improve the proper spe8 ciality and geographic distribution of the health

9 care work force.

10 (E) Initiatives to improve the population’s

11 health status.

12 (F) Development of uniform health data

13 sets that emphasize the measurement of patient

14 satisfaction, treatment outcomes, and health

15 status.

16 (G) Methods for coordinating or integrat17 ing State-funded programs that provide services

18 for low-income individuals, including programs

19 authorized by this Act.

20 (H) Programs to improve public health.

21 (I) Reforms intended to reduce health care

22 fraud and abuse.

23 (J) Reforms to reduce the incidence of de24 fensive medicine and practitioner liability costs

25 associated with medical malpractice.
27

•S 308 IS

1 (K) Development of a uniform billing sys2 tem.

3 (c) ADDITIONAL RULES REGARDING APPLICA4 TIONS.—

5 (1) TECHNICAL ASSISTANCE.—The Secretary

6 shall, if requested, provide technical assistance to

7 States to assist such States in developing waiver ap8 plications under this section.

9 (2) INITIAL REVIEW.—The Secretary shall com10 plete an initial review of each State application for

11 a waiver under paragraph (2) or (3) of subsection

12 (b) within 40 days of the receipt of such application,

13 analyze the scope of the proposal, and determine

14 whether additional information is needed from the

15 State. The Secretary shall issue a preliminary opin16 ion concerning the likelihood that the application will

17 be approved within such 40-day period and shall ad18 vise the State within such period of the need to sub19 mit additional information.

20 (3) FINAL DECISION.—The Secretary shall,

21 within 90 days of the later of—

22 (A) the receipt of a State application for a

23 waiver under paragraph (2) or (3) of subsection

24 (b), or
28

•S 308 IS

1 (B) the date on which the Secretary re2 ceives additional information requested from a

3 State under paragraph (1),

4 issue a final decision concerning such application.

5 (4) WAIVER PERIOD.—A State waiver may be

6 approved for a period of 5 years and may be ex7 tended for subsequent 5-year periods upon approval

8 by the Secretary, except that a shorter period may

9 be requested by a State and granted by the Sec10 retary.

11 (d) QUALIFICATION FOR FEDERAL FUNDS.—For

12 purposes of this Act, a State with an approved alternative

13 health care system under subsection (b)(2) shall be consid14 ered a participating State and shall maintain such status

15 if such State meets the requirements established by the

16 Secretary in the waiver approval and in this section.

17 (e) EVALUATION, MONITORING, AND COMPLIANCE.—

18 (1) STATE HEALTH REFORM ADVISORY COMMIS19 SION.—

20 (A) IN GENERAL.—Within 90 days after

21 the date of the enactment of this Act, the Sec22 retary shall establish, an appoint the members

23 of, a 17-member State Health Reform Advisory

24 Commission (hereafter in this subsection re25 ferred to as the ‘‘Commission’’) that shall—
29

•S 308 IS

1 (i) be comprised of members rep2 resenting relevant participants in State

3 programs, including representatives of

4 State government, employers, consumers,

5 providers, and insurers;

6 (ii) be responsible for monitoring the

7 status and progress achieved under waivers

8 granted under this section;

9 (iii) report to the public concerning

10 progress made by States with respect to

11 the performance measures and goals estab12 lished under this Act and the State project

13 application procedures, by region and State

14 jurisdiction;

15 (iv) promote information exchange be16 tween States and the Federal Government;

17 and

18 (v) be responsible for making rec19 ommendations to the Secretary and the

20 Congress, using equivalency or minimum

21 standards, for minimizing the negative ef22 fect of State waivers on national employer

23 groups, provider organizations, and insur24 ers because of differing State requirements

25 under the waivers.
30

•S 308 IS

1 (B) PERIOD OF APPOINTMENT; VACAN2 CIES.—Members shall be appointed for the life

3 of the Commission. Any vacancy in the Com4 mission shall not affect its powers, but shall be

5 filled in the same manner as the original ap6 pointment.

7 (C) CHAIRPERSON, MEETINGS.—

8 (i) CHAIRPERSON.—The Commission

9 shall select a Chairperson from among its

10 members.

11 (ii) QUORUM.—A majority of the

12 members of the Commission shall con13 stitute a quorum, but a lesser number of

14 members may hold hearings.

15 (iii) MEETINGS.—Not later than 30

16 days after the date on which all members

17 of the Commission have been appointed,

18 the Commission shall hold its first meet19 ing. The Commission shall meet at the call

20 of the Chairperson.

21 (D) POWERS OF THE COMMISSION.—

22 (i) HEARINGS.—The Commission may

23 hold such hearings, sit and act at such

24 times and places, take such testimony, and

25 receive such evidence as the Commission
31

•S 308 IS

1 considers advisable to carry out the pur2 poses of this subsection.

3 (ii) INFORMATION.—The Commission

4 may secure directly from any Federal de5 partment or agency such information as

6 the Commission considers necessary to

7 carry out the provisions of this subsection.

8 Upon request of the Chairperson of the

9 Commission, the head of such department

10 or agency shall furnish such information to

11 the Commission.

12 (iii) POSTAL SERVICES.—The Com13 mission may use the United States mails

14 in the same manner and under the same

15 conditions as other departments and agen16 cies of the Federal Government.

17 (iv) GIFTS.—The Commission may ac18 cept, use, and dispose of gifts or donations

19 of services or property.

20 (E) PERSONNEL MATTERS.—

21 (i) COMPENSATION.—Each member of

22 the Commission who is not an officer or

23 employee of the Federal Government shall

24 be compensated at a rate equal to the daily

25 equivalent of the annual rate of basic pay
32

•S 308 IS

1 prescribed for level IV of the Executive

2 Schedule under section 5315 of title 5,

3 United States Code, for each day (includ4 ing travel time) during which such member

5 is engaged in the performance of the duties

6 of the Commission. All members of the

7 Commission who are officers or employees

8 of the United States shall serve without

9 compensation in addition to that received

10 for their services as officers or employees

11 of the United States.

12 (ii) TRAVEL EXPENSES.—The mem13 bers of the Commission shall be allowed

14 travel expenses, including per diem in lieu

15 of subsistence, at rates authorized for em16 ployees of agencies under subchapter I of

17 chapter 57 of title 5, United States Code,

18 while away from their homes or regular

19 places of business in the performance of

20 services for the Commission.

21 (iii) STAFF.—The Chairperson of the

22 Commission may, without regard to the

23 civil service laws and regulations, appoint

24 and terminate an executive director and

25 such other additional personnel as may be
33

•S 308 IS

1 necessary to enable the Commission to per2 form its duties. The employment of an ex3 ecutive director shall be subject to con4 firmation by the Commission.

5 (iv) DETAIL OF GOVERNMENT EM6 PLOYEES.—Any Federal Government em7 ployee may be detailed to the Commission

8 without reimbursement, and such detail

9 shall be without interruption or loss of civil

10 service status or privilege.

11 (v) TEMPORARY AND INTERMITTENT

12 SERVICES.—The Chairperson of the Com13 mission may procure temporary and inter14 mittent services under section 3109(b) of

15 title 5, United States Code, at rates for in16 dividuals which do not exceed the daily

17 equivalent of the annual rate of basic pay

18 prescribed for level V of the Executive

19 Schedule under section 5316 of such title.

20 (F) FUNDING.—For the purpose of carry21 ing out this subsection, there are authorized to

22 be appropriated from the Fund established

23 under section 9551 of the Internal Revenue

24 Code of 1986, $1,000,000 for each of the fiscal

25 years 1996 through 2000.
34

•S 308 IS

1 (2) ANNUAL REPORTS BY STATES.—Each State

2 that has received a waiver approval shall submit to

3 the Secretary an annual report based on the period

4 representing the respective State’s fiscal year, detail5 ing compliance with the requirements established by

6 the Secretary in the waiver approval and in this sec7 tion.

8 (3) CORRECTIVE ACTION PLANS.—If a State is

9 not in compliance, the Secretary shall develop, in

10 conjunction with all the approved States, a correc11 tive action plan.

12 (4) TERMINATION.—For good cause, the Sec13 retary may revoke any waiver of Federal law granted

14 under this section, and if necessary, may terminate

15 any alternative State health program. Such decisions

16 shall be subject to a petition for reconsideration and

17 appeal pursuant to regulations established by the

18 Secretary.

19 (5) EVALUATIONS BY SECRETARY.—The Sec20 retary shall prepare and submit to the Committee on

21 Finance and the Committee on Labor and Human

22 Resources of the Senate and the Committee on Com23 merce and the Committee on Ways and Means of

24 the House of Representatives annual reports that

25 shall contain—
35

•S 308 IS

1 (A) a description of the effects of the re2 forms undertaken in States receiving waiver ap3 provals under this section;

4 (B) an evaluation of the effectiveness of

5 such reforms in—

6 (i) expanding health care coverage for

7 State residents;

8 (ii) providing health care to State

9 residents with special needs;

10 (iii) reducing or containing health

11 care costs in the States; and

12 (iv) improving the quality of health

13 care provided in the States; and

14 (C) recommendations regarding the advis15 ability of increasing Federal financial assistance

16 for State alternative State health program ini17 tiatives, including the amount and source of

18 such assistance.

19 (f) STATE COMMISSIONS.—The Secretary shall en20 courage States to establish a State commission to gather,

21 review and report to the public concerning the progress

22 the State is making in meeting the project goals of im23 proved access, cost containment and quality and estab24 lished performance measures.

25 (g) FUNDING.—
36

•S 308 IS

1 (1) IN GENERAL.—The Secretary may provide a

2 grant to a State that has an application for a waiver

3 approved under subsection (b)(2) to enable such

4 State to carry out an alternative State health pro5 gram in the State.

6 (2) AMOUNT OF GRANT.—The amount of a

7 grant provided to a State under paragraph (1) shall

8 be determined pursuant to an allocation formula es9 tablished by the Secretary.

10 (3) PERFORMANCE-BASED FUNDING ALLOCA11 TION AND PRIORITIZATION.—In awarding grants

12 under paragraph (1), the Secretary shall—

13 (A) give priority to those State projects

14 that the Secretary determines have the greatest

15 opportunity to succeed in providing expanded

16 health insurance coverage and access without

17 penalizing those States that have been success18 ful in expanding coverage and access through

19 reform efforts in prior years;

20 (B) give priority to those State projects

21 that the Secretary determines have the greatest

22 opportunity to succeed in providing expanded

23 health insurance coverage and in providing chil24 dren, youth, and vulnerable populations with

25 access to health care items and services; and
37

•S 308 IS

1 (C) attempt to link allocations to the State

2 to the meeting of the goals and performance

3 measures relating to health care coverage and

4 access, health care costs, health care outcomes

5 and vulnerable populations established under

6 this Act through the State project application

7 process.

8 (4) MAINTENANCE OF EFFORT.—A State, in

9 utilizing the proceeds of a grant received under

10 paragraph (1), shall maintain the expenditures of

11 the State for health care coverage purposes at a level

12 equal to not less than the level of such expenditures

13 maintained by the State for the fiscal year preceding

14 the fiscal year for which the grant is received. The

15 requirement of this paragraph shall not apply in the

16 case of a State that desires to alter health care cov17 erage funding levels within the scope of the State’s

18 alternative health program.

19 (5) REPORT.—At the end of the 5-year period

20 beginning on the date on which the Secretary

21 awards the first grant under paragraph (1), the

22 State Health Reform Advisory Board established

23 under subsection (e)(1) shall prepare and submit to

24 the appropriate committees of Congress, a report on

25 the progress made by States receiving grants under
38

•S 308 IS

1 paragraph (1) in meeting the goals of expanded ac2 cess, cost containment and quality through perform3 ance measures established during the 5-year period

4 of the grant. Such report shall contain the rec5 ommendation of the Board concerning any future

6 action that Congress should take concerning health

7 care reform, including whether or not to extend the

8 program established under this subsection.

9 (h) LOCAL GOVERNMENT APPLICATIONS.—

10 (1) IN GENERAL.—Where a State fails to sub11 mit an application under this section, a unit of local

12 government of such State, or a consortium of such

13 units of local governments, may submit an applica14 tion directly to the Secretary for programs or

15 projects under subsection (b). Such an application

16 shall be subject to the requirements of this section.

17 (2) OTHER APPLICATIONS.—Subject to such

18 additional guidelines as the Secretary may prescribe,

19 a unit of local government may submit an applica20 tion under this section, whether or not the State

21 submits such an application, if such unit of local

22 government can demonstrate unique demographic

23 needs or a significant population size that warrants

24 a substate waiver under subsection (b).
39

•S 308 IS

1 (i) AVAILABILITY OF FUNDS.—With respect to each

2 of the calendar years 1996 through 2000,

3 $10,000,000,000 shall be available for a calendar year to

4 carry out this section from the Health Care Reform Trust

5 Fund established under section 9551(a)(2)(A) of the In6 ternal Revenue Code of 1986. Amounts made available in

7 a calendar year under this paragraph and not expended

8 may be used in subsequent calendar years to carry out

9 this section.

10 (h) CRIMINAL PENALTIES FOR ACTS INVOLVING

11 MEDICARE OR STATE HEALTH CARE PROGRAMS.—

12 Section 1128B(b)(3) of the Social Security Act (42

13 U.S.C. 1320a–7b(b)(3)) is amended—

14 (1) by striking ‘‘and’’ at the end of subpara15 graph (D);

16 (2) by striking the period at the end of sub17 paragraph (E) and inserting ‘‘; and’’; and

18 (3) by adding at the end the following new sub19 paragraph:

20 ‘‘(F)(i) any premium payment made to a health

21 insurer or health maintenance organization by a

22 State agency in connection with a demonstration

23 project operated under the State medicaid program

24 pursuant to section 1115 or the Health Partnership
40

•S 308 IS

1 Act of 1995 with respect to individuals participating

2 in such project; or

3 ‘‘(ii) any payment made by a health insurer or

4 a health maintenance organization to a sales rep5 resentative or a licensed insurance agent for the pur6 pose of servicing, marketing, or enrolling individuals

7 participating in such demonstration project in a

8 health plan offered by such an insurer or organiza9 tion.’’.

10 Subtitle B—State Laws

11 PART A—EXISTING WAIVERS AND HAWAII

12 PREPAID HEALTH CARE ACT

13 SEC. 2101. CONTINUANCE OF EXISTING FEDERAL LAW

14 WAIVERS.

15 Nothing in this Act shall preempt any feature of a

16 State health care system operating under a waiver granted

17 before the date of the enactment of this Act under titles

18 XVIII or XIX of the Social Security Act (42 U.S.C. 1395

19 et seq. or 1396 et seq.) or under an exemption from pre20 emption under section 514(b) of the Employee Retirement

21 Income Security Act of 1974 (29 U.S.C. 1144(b)).
41

•S 308 IS

1 SEC. 2102. PREEMPTION OF HAWAII PREPAID HEALTH

2 CARE ACT.

3 Section 514(b)(5) of the Employee Retirement In4 come Security Act of 1974 (29 U.S.C. 1144(b)(5)) is

5 amended to read as follows:

6 ‘‘(5)(A) Except as provided in subparagraphs

7 (B) and (C), subsection (a) shall not apply to the

8 Hawaii Prepaid Health Care Act (Haw. Rev. Stat.

9 Chapter 393, as amended) or any insurance law of

10 the State.

11 ‘‘(B) Nothing in subparagraph (A) shall be con12 strued to exempt from subsection (a) any State tax

13 law relating to employee benefits plans.

14 ‘‘(C) If the Secretary of Labor notifies the Gov15 ernor of the State of Hawaii that as the result of

16 an amendment to the Hawaii Prepaid Health Care

17 Act enacted after the date of the enactment of this

18 paragraph—

19 ‘‘(i) the proportion of the population with

20 health care coverage under such Act is less than

21 such proportion on such date, or

22 ‘‘(ii) the level of benefit coverage provided

23 under such Act is less than the actuarial equiv24 alent of such level of coverage on such date,
42

•S 308 IS

1 subparagraph (A) shall not apply with respect to the

2 application of such amendment to such Act after the

3 date of such notification.’’.

4 PART B—ERISA REVIEW

5 SEC. 2110. SPECIFIC EXEMPTION FROM ERISA PREEMP6 TION.

7 (a) IN GENERAL.—Section 514(b) of the Employee

8 Retirement Income Security Act of 1974 (29 U.S.C.

9 1144(b)) is amended by adding at the end the following

10 new paragraph:

11 ‘‘(9) Upon application by a State, subsection

12 (a) shall not apply to any State program that—

13 ‘‘(A) requires participation in an uncom14 pensated care pool, including a program which

15 imposes a tax on health care providers to fund

16 an uncompensated care pool; or

17 ‘‘(B) provides for the imposition of a tax

18 on health care providers as permitted under

19 section 1903(w) of the Social Security Act.’’

20 (b) EFFECTIVE DATE.—The amendment made by

21 this section shall apply to applications filed on and after

22 the date of the enactment of this Act.
43

•S 308 IS

1 SEC. 2111. DISCRETIONARY EXEMPTIONS FROM ERISA PRE2 EMPTIONS.

3 (a) IN GENERAL.—Section 514(b) of the Employee

4 Retirement Income Security Act of 1974 (29 U.S.C.

5 1144(b)), as amended by section 2110, is amended by

6 adding at the end the following new paragraph:

7 ‘‘(10) Upon application by a State, subsection

8 (a) shall not apply to any State program which the

9 Secretary finds to be a State program implementing

10 an exemption from subsection (a) established under

11 section 2116 of the Health Partnership Act of

12 1995.’’

13 (b) EFFECTIVE DATE.—The amendment made by

14 subsection (a) shall apply to applications filed on and after

15 the date of the enactment of this Act.

16 SEC. 2112. PROCEDURES FOR ADOPTING DISCRETIONARY

17 EXEMPTIONS.

18 (a) COMMISSION RECOMMENDATIONS.—The ERISA

19 Review Commission shall—

20 (1) within 6 months after its establishment,

21 make recommendations to the Secretary of Labor

22 with respect to the issues described in subsection (c),

23 and

24 (2) within 18 months after its establishment,

25 make recommendations to the Secretary of Labor
44

•S 308 IS

1 with respect to the issues described in subsection

2 (d).

3 (b) ACTION BY SECRETARY OF LABOR.—

4 (1) IN GENERAL.—The Secretary of Labor

5 shall, within 6 months of the receipt of any rec6 ommendation under subsection (a), implement the

7 recommendation with or without modification or no8 tify the Commission that the Secretary does not in9 tend to implement the recommendation.

10 (2) NOTIFICATION.—The Secretary of Labor

11 shall notify the appropriate committees of Congress

12 of its decisions under this subsection.

13 (3) IMPLEMENTATION.—If the Secretary of

14 Labor decides to implement any recommendation of

15 the Commission, such recommendation shall take ef16 fect on—

17 (A) the 60th day after notification to the

18 Congress under paragraph (2), or

19 (B) such later date as the Secretary of

20 Labor determines appropriate.

21 (4) FAILURE TO IMPLEMENT.—If the Secretary

22 of Labor under paragraph (1) elects not to imple23 ment the recommendations, the Secretary shall in24 clude in the notification to Congress under para25 graph (2) the recommendations of the Commission.
45

•S 308 IS

1 (c) INITIAL ISSUES TO BE ACTED UPON.—The is2 sues described in this subsection are as follows:

3 (1) UNIFORM DATA COLLECTION.—The estab4 lishment of uniform data collection with respect to

5 use, cost, and quality information and to require

6 common claims processing.

7 (2) MINIMUM BENEFITS.—The authority of the

8 States to establish interim minimum benefits pack9 ages until the implementation of any recommenda10 tion under subsection (d)(4), including an exemption

11 for self-insured plans which provide benefits which

12 are actuarially equivalent to the minimum benefits

13 package.

14 (3) MINIMUM SIZE.—The application of the

15 preemption rules only to self-insured employers

16 which have more than a minimum number of em17 ployees.

18 (4) MANAGED CARE.—The authority of the

19 States to regulate the quality of managed care plans

20 which contract with self-insured plans.

21 (5) STATE HEALTH CARE FINANCING PRO22 GRAMS.—The establishment of State programs

23 which—

24 (i) provide for the imposition of a broad25 based, nondiscriminatory premium tax, or a
46

•S 308 IS

1 broad-based, nondiscriminatory tax on health

2 services, the proceeds of which are used to in3 crease health insurance coverage of State resi4 dents or to pay for the uncompensated care of

5 such residents, or

6 (ii) provide for the imposition of a tax on

7 employers to provide for health care coverage of

8 their employees, but only if the program allows

9 a credit to employers for health care coverage

10 provided by the employers to their employees.

11 (6) RATE SETTING.—A requirement that the

12 State participate in a hospital reimbursement system

13 or other system which sets rates for health care pro14 viders in the State.

15 (d) OTHER ISSUES.—The issues described in this

16 subsection are as follows:

17 (1) MANDATES.—The authority of States to re18 quire employers to pay for or offer health benefits.

19 (2) REMEDIES.—The authority of the Federal

20 Government of the States to provide remedies and

21 consumer protections to beneficiaries of self-insured

22 plans.

23 (3) PURCHASING COOPERATIVES.—The author24 ity of the States to require self-insured plans to par-
47

•S 308 IS

1 ticipate in purchasing cooperatives and risk adjust2 ment systems.

3 (4) UNIFORM BENEFITS.—The development of

4 a national uniform benefits plan applicable to all

5 health plans, including self-insured plans.

6 (5) UNRESOLVED ISSUES.—Those issues unre7 solved under subsection (c).

8 SEC. 2113. OPERATION OF THE COMMISSION.

9 (a) MEMBERSHIP.—

10 (1) IN GENERAL.—The ERISA Review Com11 mission shall be composed of 17 members. Members

12 shall be appointed not later than 90 days after the

13 date of the enactment of this Act.

14 (2) CHAIRPERSON.—The President shall des15 ignate 1 individual described in paragraph (1) who

16 shall serve as Chairperson of the Commission.

17 (b) COMPOSITION.—The membership of the Commis18 sion shall include—

19 (1) 9 individuals appointed by the President, 3

20 of whom shall be Federal officials representing the

21 Departments of Labor, Health and Human Services,

22 and the Treasury, 2 of whom shall represent busi23 ness, 2 of whom shall represent labor, and 2 of

24 whom shall represent State and local governments,
48

•S 308 IS

1 (2) 4 appointed by the Majority Leader of the

2 Senate, in consultation with the Minority Leader, 2

3 of whom shall represent business and 2 of whom

4 shall represent State and local governments, and

5 (3) 4 appointed by the Majority Leader of the

6 House of Representatives, in consultation with the

7 Minority Leader, 2 of whom shall represent business

8 and 2 of whom shall represent State and local gov9 ernments.

10 (c) TERMS.—The terms of members of the Commis11 sion shall be for the life of the Commission.

12 (d) VACANCIES.—

13 (1) IN GENERAL.—A vacancy in the Commis14 sion shall be filled in the same manner as the origi15 nal appointment.

16 (2) NO IMPAIRMENT OF FUNCTION.—A vacancy

17 in the membership of the Commission does not im18 pair the authority of the remaining members to exer19 cise all of the powers of the Commission.

20 (3) ACTING CHAIRPERSON.—The Commission

21 may designate a member to act as Chairperson dur22 ing any period in which there is no Chairperson des23 ignated by the President.

24 (e) MEETINGS; QUORUM.—
49

•S 308 IS

1 (1) MEETINGS.—The Chairperson shall preside

2 at meetings of the Commission, and in the absence

3 of the Chairperson, the Commission shall elect a

4 member to act as Chairperson pro tempore.

5 (2) QUORUM.—Nine members of the Commis6 sion shall constitute a quorum thereof.

7 (f) ADMINISTRATIVE PROVISIONS.—

8 (1) PAY AND TRAVEL EXPENSES.—

9 (A) PAY.—Each member shall be paid at

10 a rate equal to the daily equivalent of the mini11 mum annual rate of basic pay payable for level

12 IV of the Executive Schedule under section

13 5315 of title 5, United States Code, for each

14 day (including travel time) during which the

15 member is engaged in the actual performance of

16 duties vested in the Commission.

17 (B) TRAVEL EXPENSES.—Members shall

18 receive travel expenses, including per diem in

19 lieu of subsistence, in accordance with sections

20 5702 and 5703 of title 5, United States Code.

21 (2) EXECUTIVE DIRECTOR.—

22 (A) IN GENERAL.—The Commission shall,

23 without regard to section 5311(b) of title 5,

24 United States Code, appoint an Executive Di25 rector.
50

•S 308 IS

1 (B) PAY.—The Executive Director shall be

2 paid at a rate equivalent to a rate for the Sen3 ior Executive Service.

4 (3) STAFF.—

5 (A) IN GENERAL.—Subject to subpara6 graphs (B) and (C), the Executive Director,

7 with the approval of the Commission, may ap8 point and fix the pay of additional personnel.

9 (B) PAY.—The Executive Director may

10 make such appointments without regard to the

11 provisions of title 5, United States Code, gov12 erning appointments in the competitive service,

13 and any personnel so appointed may be paid

14 without regard to the provisions of chapter 51

15 and subchapter III of chapter 53 of such title,

16 relating to classification and General Schedule

17 pay rates, except that an individual so ap18 pointed may not receive pay in excess of 120

19 percent of the annual rate of basic pay payable

20 for level GS–15 of the General Schedule.

21 (C) DETAILED PERSONNEL.—Upon re22 quest of the Executive Director, the head of any

23 Federal department or agency may detail any

24 of the personnel of that department or agency
51

•S 308 IS

1 to the Commission to assist the Commission in

2 carrying out its duties under this Act.

3 (4) OTHER AUTHORITY.—

4 (A) CONTRACT SERVICES.—The Commis5 sion may procure by contract, to the extent

6 funds are available, the temporary or intermit7 tent services of experts or consultants pursuant

8 to section 3109 of title 5, United States Code.

9 (B) LEASES AND PROPERTY.—The Com10 mission may lease space and acquire personal

11 property to the extent funds are available.

12 (g) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated from the Fund estab14 lished under section 9551 of the Internal Revenue Code

15 of 1986, $1,000,000 for the operation of the Commission.

16 (h) EXPIRATION.—The Commission shall terminate

17 2 years after the date on which all of its members are

18 appointed.

19 TITLE III—PUBLIC HEALTH AND

20 RURAL AND UNDERSERVED

21 ACCESS IMPROVEMENT

22 SEC. 3001. SHORT TITLE.

23 This title may be cited as the ‘‘Public Health and

24 Rural and Underserved Access Improvement Act of

25 1995’’.
52

•S 308 IS

1 SEC. 3002. ESTABLISHMENT OF NEW TITLE XXVII REGARD2 ING PUBLIC HEALTH PROGRAMS.

3 The Public Health Service Act (42 U.S.C. 201 et

4 seq.) is amended by adding at the end the following title:

5 ‘‘TITLE XXVII—PUBLIC HEALTH

6 PROGRAMS IMPROVEMENT

7 ‘‘Subtitle A—Core Functions of

8 Public Health Programs

9 ‘‘PART 1—FORMULA GRANTS TO STATES

10 ‘‘SEC. 2711. AUTHORIZATIONS OF APPROPRIATIONS FROM

11 FUND.

12 ‘‘For the purpose of carrying out this subtitle, there

13 are authorized to be appropriated from the Health Care

14 Reform Trust Fund established under section

15 9551(a)(2)(A) of the Internal Revenue Code of 1986

16 (hereafter referred to in this title as the ‘‘Fund’’),

17 $200,000,000 for fiscal year 1996, $350,000,000 for fis18 cal year 1997, $500,000,000 for fiscal year 1998,

19 $650,000,000 for fiscal year 1999, and $700,000,000 for

20 fiscal year 2000.

21 ‘‘SEC. 2712. FORMULA GRANTS TO STATES FOR CORE

22 HEALTH FUNCTIONS.

23 ‘‘(a) IN GENERAL.—In the case of each State that

24 submits to the Secretary an application in accordance with

25 section 2715 for a fiscal year, the Secretary of Health and

26 Human Services, acting through the Director of the Cen-
53

•S 308 IS

1 ters for Disease Control and Prevention, shall make a

2 grant to the State for carrying out the activities described

3 in subsection (c). The award shall consist of the allotment

4 determined under section 2716 for the State.

5 ‘‘(b) GENERAL PURPOSE.—The purpose of this sub6 title is to provide for improvements in the health status

7 of the public through carrying out the activities described

8 in subsection (b) toward attaining the Healthy People

9 2000 Objectives (as defined in section 2799). A funding

10 agreement for a grant under subsection (a) is that—

11 ‘‘(1) the grant will be expended for such activi12 ties; and

13 ‘‘(2) the activities will be carried out by the

14 State in collaboration with local public health de15 partments, health education and training centers,

16 neighborhood health centers, and other community

17 health providers.

18 ‘‘(c) CORE FUNCTIONS OF PUBLIC HEALTH PRO19 GRAMS.—Subject to the purpose described in subsection

20 (b), the activities referred to in subsection (a) are the fol21 lowing:

22 ‘‘(1) Data collection, and analytical activities,

23 related to population-based status and outcomes

24 monitoring, including the following:
54

•S 308 IS

1 ‘‘(A) The regular collection and analysis of

2 public health data (including the 10 leading

3 causes of death and their costs to society).

4 ‘‘(B) Vital statistics.

5 ‘‘(C) Personal health services data.

6 ‘‘(D) The supply and distribution of health

7 professionals.

8 ‘‘(2) Activities to reduce environmental risk and

9 to assure the safety of housing, schools, workplaces,

10 day-care centers, food and water, including the fol11 lowing activities:

12 ‘‘(A) Monitoring the overall public health

13 status and safety of communities.

14 ‘‘(B) Assessing exposure to high lead levels

15 and other environmental contaminants; and ac16 tivities for abatement of toxicant hazards, in17 cluding lead-related hazards.

18 ‘‘(C) Monitoring the quality of community

19 water supplies used for consumption or for rec20 reational purposes.

21 ‘‘(D) Monitoring sewage and solid waste

22 disposal, radiation exposure, radon exposure,

23 and noise levels.
55

•S 308 IS

1 ‘‘(E) Monitoring indoor and ambient air

2 quality and related risks to vulnerable popu3 lations.

4 ‘‘(F) Assuring recreation, worker, and

5 school safety.

6 ‘‘(G) Enforcing public health safety and

7 sanitary codes.

8 ‘‘(H) Monitoring community access to ap9 propriate health services.

10 ‘‘(I) Other activities relating to promoting

11 and protecting the public health of commu12 nities.

13 ‘‘(3) Investigation, control, and public-aware14 ness activities regarding adverse health conditions

15 (such as emergency treatment preparedness, commu16 nity efforts to reduce violence, outbreaks of commu17 nicable diseases within communities, chronic disease

18 and dysfunction exposure-related conditions, toxic

19 environmental pollutants, occupational and rec20 reational hazards, motor vehicle accidents, and other

21 threats to the health status of individuals).

22 ‘‘(4) Public information and education pro23 grams to reduce risks to health (such as use of to24 bacco; alcohol and other drugs; unintentional injury

25 from accidents, including motor vehicle accidents;
56

•S 308 IS

1 sexual activities that increase the risk to HIV trans2 mission and sexually transmitted diseases; poor diet;

3 physical inactivity; stress-related illness; mental

4 health problems; genetic disorders; and low child5 hood immunization levels).

6 ‘‘(5) Provision of public health laboratory serv7 ices to complement private clinical laboratory serv8 ices and that screen for diseases and conditions

9 (such as metabolic diseases in newborns, provide as10 sessments of blood lead levels and other environ11 mental toxicants, diagnose and contact tracing of

12 sexually transmitted diseases, tuberculosis and other

13 diseases requiring partner notification, test for infec14 tious and food-borne diseases, and monitor the safe15 ty of water and food supplies).

16 ‘‘(6) Training and education of new and exist17 ing health professionals in the field of public health,

18 with special emphasis on epidemiology, biostatistics,

19 health education, public health administration, pub20 lic health nursing and dentistry, environmental and

21 occupational health sciences, public health nutrition,

22 social and behavioral health sciences, operations re23 search, and laboratory technology.

24 ‘‘(7) Leadership, policy development and admin25 istration activities, including assessing needs and the
57

•S 308 IS

1 supply and distribution of health professionals; the

2 setting of public health standards; the development

3 of community public health policies; and the develop4 ment of community public health coalitions.

5 ‘‘(d) RESTRICTIONS ON USE OF GRANT.—

6 ‘‘(1) IN GENERAL.—A funding agreement for a

7 grant under subsection (a) for a State is that the

8 grant will not be expended—

9 ‘‘(A) to provide inpatient services;

10 ‘‘(B) to make cash payments to intended

11 recipients of health services;

12 ‘‘(C) to purchase or improve land, pur13 chase, construct, or permanently improve (other

14 than minor remodeling) any building or other

15 facility, or purchase major medical equipment;

16 ‘‘(D) to satisfy any requirement for the ex17 penditure of non-Federal funds as a condition

18 for the receipt of Federal funds; or

19 ‘‘(E) to provide financial assistance to any

20 entity other than a public or nonprofit private

21 entity.

22 ‘‘(2) LIMITATION ON ADMINISTRATIVE EX23 PENSES.—A funding agreement for a grant under

24 subsection (a) is that the State involved will not ex-
58

•S 308 IS

1 pend more than 20 percent of the grant for adminis2 trative expenses with respect to the grant.

3 ‘‘(e) MAINTENANCE OF EFFORT.—A funding agree4 ment for a grant under subsection (a) is that the State

5 involved will maintain expenditures of non-Federal

6 amounts for core health functions at a level that is not

7 less than the level of such expenditures maintained by the

8 State for the fiscal year preceding the first fiscal year for

9 which the State receives such a grant.

10 ‘‘SEC. 2713. NUMBER OF FUNCTIONS; PLANNING.

11 ‘‘(a) NUMBER OF FUNCTIONS.—Subject to sub12 section (b), a funding agreement for a grant under section

13 2712 is that the State involved will carry out each of the

14 activities described in subsection (c) of such section.

15 ‘‘(b) PLANNING.—In making grants under section

16 2712, the Secretary shall for each State designate a period

17 during which the State is to engage in planning to meet

18 the responsibilities of the State under subsection (a). The

19 period so designated may not exceed 18 months. With re20 spect to such period for a State, a funding agreement for

21 a grant under section 2712 for any fiscal year containing

22 any portion of the period is that, during the period, the

23 State will expend the grant only for such planning.
59

•S 308 IS

1 ‘‘SEC. 2714. SUBMISSION OF INFORMATION; REPORTS.

2 ‘‘(a) SUBMISSION OF INFORMATION.—The Secretary

3 may make a grant under section 2712 only if the State

4 involved submits to the Secretary the following informa5 tion:

6 ‘‘(1) A description of the relationship between

7 community health providers, public and private

8 health plans, and the public health system of the

9 State.

10 ‘‘(2) A description of existing deficiencies in the

11 public health system at the State level and the local

12 level, using standards under the Healthy People

13 2000 Objectives.

14 ‘‘(3) A description of public health priorities

15 identified at the State level and local levels, includ16 ing the 10 leading causes of death and their respec17 tive direct and indirect costs to the State and the

18 Federal Government.

19 ‘‘(4) Measurable outcomes and process objec20 tives (using criteria under the Healthy People 2000

21 Objectives) which indicate improvements in health

22 status as a result of the activities carried out under

23 section 2712(c).

24 ‘‘(5) Information regarding each such activity,

25 which—
60

•S 308 IS

1 ‘‘(A) identifies the amount of State and

2 local funding expended on each such activity for

3 the fiscal year preceding the fiscal year for

4 which the grant is sought; and

5 ‘‘(B) provides a detailed description of how

6 additional Federal funding will improve each

7 such activity by both the State and local public

8 health agencies.

9 ‘‘(6) A description of activities under section

10 2712(c) to be carried out at the local level, and a

11 specification for each such activity of—

12 ‘‘(A) the communities in which the activity

13 will be carried out and any collaborating agen14 cies; and

15 ‘‘(B) the amount of the grant to be ex16 pended for the activity in each community so

17 specified.

18 ‘‘(7) A description of how such activities have

19 been coordinated with activities supported under

20 title V of the Social Security Act (relating to mater21 nal and child health).

22 ‘‘(b) REPORTS.—A funding agreement for a grant

23 under section 2712 is that the States involved will, not

24 later than the date specified by the Secretary, submit to

25 the Secretary a report describing—
61

•S 308 IS

1 ‘‘(1) the purposes for which the grant was ex2 pended;

3 ‘‘(2) the health status of the population of the

4 State, as measured by criteria under the Healthy

5 People 2000 Objectives; and

6 ‘‘(3) the progress achieved and obstacles en7 countered in using uniform data sets under such Ob8 jectives.

9 ‘‘SEC. 2715. APPLICATION FOR GRANT.

10 ‘‘The Secretary may make a grant under section

11 2712 only if an application for the grant is submitted to

12 the Secretary, the application contains each agreement de13 scribed in this part, the application contains the informa14 tion required in section 2712(c), and the application is in

15 such form, is made in such manner, and contains such

16 agreements, assurances, and information as the Secretary

17 determines to be necessary to carry out this part.

18 ‘‘SEC. 2716. DETERMINATION OF AMOUNT OF ALLOTMENT.

19 ‘‘For purposes of section 2712, the allotment under

20 this section for a State for a fiscal year shall be deter21 mined through a formula established by the Secretary on

22 the basis of the population, economic indicators, and

23 health status of each State. Such allotment shall be the

24 product of—
62

•S 308 IS

1 ‘‘(1) a percentage determined under the for2 mula; and

3 ‘‘(2) the amount appropriated under section

4 2711 for the fiscal year, less any amounts reserved

5 under section 2717.

6 ‘‘SEC. 2717. ALLOCATIONS FOR CERTAIN ACTIVITIES.

7 ‘‘Of the amounts made available under section 2711

8 for a fiscal year for carrying out this part, the Secretary

9 may reserve not more than 15 percent for carrying out

10 the following activities:

11 ‘‘(1) Technical assistance with respect to plan12 ning, development, and operation of activities under

13 section 2712(b), including provision of biostatistical

14 and epidemiological expertise, provision of laboratory

15 expertise, and the development of uniform data sets

16 under the Health People 2000 Objectives.

17 ‘‘(2) Development and operation of a national

18 information network among State and local health

19 agencies for utilizing such uniform data sets.

20 ‘‘(3) Program monitoring and evaluation of ac21 tivities carried out under section 2712(b).

22 ‘‘(4) Development of a unified electronic report23 ing mechanism to improve the efficiency of adminis24 trative management requirements regarding the pro-
63

•S 308 IS

1 vision of Federal grants to State public health agen2 cies.

3 ‘‘PART 2—COMPREHENSIVE EVALUATION OF DIS4 EASE PREVENTION AND HEALTH PRO5 MOTION PROGRAMS

6 ‘‘SEC. 2718. AUTHORIZATIONS OF APPROPRIATIONS FROM

7 FUND.

8 ‘‘For the purpose of carrying out this part, there are

9 authorized to be appropriated from the Fund,

10 $100,000,000 for fiscal year 1996, and $150,000,000 for

11 each of the fiscal years 1997 through 2000.

12 ‘‘SEC. 2719. EVALUATION OF PROGRAMS.

13 ‘‘(a) GRANTS.—The Secretary may make grants to,

14 or enter into cooperative agreements or contracts with, eli15 gible entities for the purpose of enabling such entities to

16 carry out evaluations of the type described in subsection

17 (c). The Secretary shall carry out this section acting

18 through the Director of the Centers for Disease Control

19 and Prevention, subject to subsection (g).

20 ‘‘(b) REQUIREMENTS.—

21 ‘‘(1) ELIGIBLE ENTITIES.—To be eligible to re22 ceive an award of a grant, cooperative agreement, or

23 contract under subsection (a), an entity must—

24 ‘‘(A) be a public, nonprofit, or private en25 tity or a university;
64

•S 308 IS

1 ‘‘(B) prepare and submit to the Secretary

2 an application at such time, in such form, and

3 containing such information as the Secretary

4 may require, including a plan for the conduct of

5 the evaluation under the grant;

6 ‘‘(C) provide assurances that any informa7 tion collected while conducting evaluations

8 under this section will be maintained in a con9 fidential manner with respect to the identities

10 of the individuals from which such information

11 is obtained; and

12 ‘‘(D) meet any other requirements that the

13 Secretary determines to be appropriate.

14 ‘‘(2) TYPES OF ENTITIES.—In making awards

15 under subsection (a), the Secretary shall consider

16 applications from entities proposing to conduct eval17 uations using community programs, managed care

18 programs, State and county health departments,

19 public education campaigns, school programs, and

20 other appropriate programs. The Secretary shall en21 sure that not less than 25 percent of the amounts

22 appropriated under section 2718 for a fiscal year are

23 used for making such awards to entities that will use

24 the amounts to conduct evaluations in the work25 place.
65

•S 308 IS

1 ‘‘(c) USE OF FUNDS.—

2 ‘‘(1) EVALUATIONS.—An award under sub3 section (a) shall be used to—

4 ‘‘(A) conduct evaluations to determine the

5 extent to which clinical preventive services,

6 health promotion and unintentional injury pre7 vention activities, and interpersonal and com8 munity violence prevention activities, achieve

9 short-term and long-term health care cost re10 ductions and health status improvement with

11 respect to the Healthy People 2000 Objectives;

12 and

13 ‘‘(B) evaluate other areas determined ap14 propriate by the Secretary.

15 ‘‘(2) INCLUSION OF CERTAIN POPULATION

16 GROUPS.—In carrying out this section, the Secretary

17 shall ensure that data concerning women, children,

18 minorities, older individuals with different income

19 levels, retirees, and individuals from diverse geo20 graphical backgrounds, are obtained.

21 ‘‘(3) MINIMUM SERVICES.—The evaluations

22 that the Secretary may provide for under this sec23 tion include (but are not limited to) evaluations of

24 programs that provide one or more of the following

25 services:
66

•S 308 IS

1 ‘‘(A) Blood pressure screening and control

2 (to detect and control hypertension and coro3 nary health disease).

4 ‘‘(B) Early cancer screening.

5 ‘‘(C) Blood cholesterol screening and con6 trol.

7 ‘‘(D) Smoking cessation programs.

8 ‘‘(E) Substance abuse programs.

9 ‘‘(F) Dietary and nutrition counseling, in10 cluding nutrition.

11 ‘‘(G) Physical fitness counseling.

12 ‘‘(H) Stress management.

13 ‘‘(I) Diabetes education and screening.

14 ‘‘(J) Intraocular pressure screening.

15 ‘‘(K) Monitoring of prescription drug use.

16 ‘‘(L) Violence and injury prevention pro17 grams.

18 ‘‘(M) Health education.

19 ‘‘(N) Immunization rates.

20 ‘‘(4) ENVIRONMENTAL DATA.—Evaluations con21 ducted under this section may consider the health ef22 fects and cost-effectiveness of certain environmental

23 programs, including fluoridation programs, traffic

24 safety programs, pollution control programs, acci-
67

•S 308 IS

1 dent prevention programs, and antismoking pro2 grams.

3 ‘‘(5) PUBLIC POLICIES.—Evaluations conducted

4 under this section may consider the effects of pre5 vention-oriented social and economic policies on im6 provement of health status and their long-term cost

7 effectiveness.

8 ‘‘(6) USE OF EXISTING DATA.—In conducting

9 evaluations under this section, entities shall use ex10 isting data and health promotion and screening pro11 grams where practicable.

12 ‘‘(7) COOPERATION.—In providing for an eval13 uation under this section, the Secretary shall encour14 age the recipient of the award and public and pri15 vate entities with relevant expertise (including State

16 and local agencies) to collaborate for purposes of

17 conducting the evaluation.

18 ‘‘(d) SITES.—Recipients of awards under subsection

19 (a) shall select evaluation sites under the award that

20 present the greatest potential for new and relevant knowl21 edge. Such recipients, in selecting such sites, shall ensure

22 that—

23 ‘‘(1) the sites provide evidence of pilot testing,

24 process evaluation, formative evaluation, availability

25 assessment strategies and results;
68

•S 308 IS

1 ‘‘(2) the sites provide evidence of a clear defini2 tion of the program and protocols for the implemen3 tation of the evaluation; and

4 ‘‘(3) the sites provide evidence of valid, appro5 priate and feasible assessment methods and tools

6 and a willingness to use common data items and in7 struments across such sites.

8 ‘‘(e) REPORTING REQUIREMENTS.—Not later than 1

9 year after an entity first receives an award under sub10 section (a), and not less than once during each 1-year pe11 riod thereafter for which such an award is made to the

12 entity, the entity shall prepare and submit to the Sec13 retary a report containing a description of the activities

14 under this section conducted during the period for which

15 the report is prepared, and the findings derived as a result

16 of such activities.

17 ‘‘(f) TERM OF EVALUATIONS.—Evaluations con18 ducted under this section shall be for a period of not less

19 than 3 years and may continue as necessary to permit the

20 grantee to adequately measure the full benefit of the eval21 uations.

22 ‘‘(g) DISSEMINATION AND GUIDELINES.—

23 ‘‘(1) CONSULTATION.—The Secretary shall

24 carry out this subsection acting through the Director

25 of the Centers for Disease Control and Prevention
69

•S 308 IS

1 and the Administrator for Health Care Policy and

2 Research.

3 ‘‘(2) GUIDELINES.—The Secretary shall, where

4 feasible and practical, develop and issue practice

5 guidelines that are based on the results of evalua6 tions conducted under this section. The practice

7 guidelines shall be developed by the Secretary utiliz8 ing expert practitioners to assist in the development

9 and implementation of these guidelines.

10 ‘‘(3) DATA.—

11 ‘‘(A) IN GENERAL.—The Secretary shall

12 collect, store, analyze, and make available data

13 related to the formulation of the guidelines that

14 is provided to the Centers for Disease Control

15 and Prevention by entities conducting evalua16 tions under this section.

17 ‘‘(B) USE OF DATA.—The Secretary

18 shall—

19 ‘‘(i) identify activities that prevent

20 disease, illness, injury and disability, and

21 promote good health practices; ascertain

22 their cost-effectiveness; and identify their

23 potential to overall health status with re24 spect to Healthy People 2000 Objectives;
70

•S 308 IS

1 ‘‘(ii) disseminate practice guidelines to

2 State and county health departments,

3 State insurance departments, insurance

4 companies, employers, professional medical

5 organizations, and others determined ap6 propriate by the Secretary; and

7 ‘‘(iii) provide information with respect

8 to recidivism rates of participation in the

9 evaluations.

10 ‘‘(4) DISSEMINATION.—The Secretary may dis11 seminate information collected from evaluations

12 under this section.

13 ‘‘(h) LIMITATION.—Amounts appropriated for carry14 ing out this section shall not be utilized to provide services.

15 ‘‘Subtitle B—Opportunities for

16 Education and Training in Pub17 lic Health

18 ‘‘PART 1—SCHOLARSHIP AND LOAN REPAYMENT

19 PROGRAMS REGARDING SERVICE IN PUBLIC

20 HEALTH POSITIONS

21 ‘‘SEC. 2721. AUTHORIZATIONS OF APPROPRIATIONS FROM

22 FUND.

23 ‘‘For the purpose of carrying out this part, there are

24 authorized to be appropriated from the Fund,
71

•S 308 IS

1 $50,000,000 for each of the fiscal years 1996 through

2 2000.

3 ‘‘SEC. 2722. SCHOLARSHIP PROGRAM.

4 ‘‘(a) IN GENERAL.—The Secretary, acting through

5 the Administrator of the Health Resources and Services

6 Administration and in consultation with the Director of

7 the Centers for Disease Control and Prevention, shall

8 carry out a program under which the Secretary awards

9 scholarships to individuals described in subsection (b) for

10 the purpose of assisting the individuals with the costs of

11 attending public and nonprofit private schools of public

12 health (or other public or nonprofit private institutions

13 providing graduate or specialized training in public

14 health).

15 ‘‘(b) ELIGIBLE INDIVIDUALS.—An individual re16 ferred to in subsection (a) is any individual meeting the

17 following conditions:

18 ‘‘(1) The individual is enrolled (or accepted for

19 enrollment) at a school or other institution referred

20 to in subsection (a) as a full-time or part-time stu21 dent in a program providing training in a health

22 profession in a field of public health (including the

23 fields of epidemiology, biostatistics, environmental

24 health, health administration and planning, behav25 ioral sciences, maternal and child health, occupa-
72

•S 308 IS

1 tional safety, public health nursing, nutrition, and

2 toxicology).

3 ‘‘(2) The individual enters into the contract re4 quired pursuant to subsection (d) as a condition of

5 receiving the scholarship (relating to an agreement

6 to provide services in approved public health posi7 tions, as defined in section 2724).

8 ‘‘(c) ELIGIBLE SCHOOLS.—For fiscal year 1996 and

9 subsequent fiscal years, the Secretary may make an award

10 of a scholarship under subsection (a) only if the Secretary

11 determines that—

12 ‘‘(1) the school or other institution with respect

13 to which the award is to be provided has coordinated

14 the activities of the school or institution with rel15 evant activities of the Health Resources and Services

16 Administration and the Centers for Disease Control

17 and Prevention; and

18 ‘‘(2) not fewer than 60 percent of the graduates

19 of the school or institution are in public health posi20 tions determined by the Secretary to be consistent

21 with the needs of the United States regarding such

22 professionals.

23 ‘‘(d) APPLICABILITY OF CERTAIN PROVISIONS.—Ex24 cept as inconsistent with this section or section 2724, the

25 provisions of subpart III of part D of title III (relating
73

•S 308 IS

1 to the Scholarship and Loan Repayment Programs of the

2 National Health Service Corps) apply to an award of a

3 scholarship under subsection (a) to the same extent and

4 in the same manner as such provisions apply to an award

5 of a scholarship under section 338A.

6 ‘‘SEC. 2723. LOAN REPAYMENT PROGRAM.

7 ‘‘(a) IN GENERAL.—The Secretary, acting through

8 the Administrator of the Health Resources and Services

9 Administration and in consultation with the Director of

10 the Centers for Disease Control and Prevention, shall

11 carry out a program under which the Federal Government

12 enters into agreements to repay all or part of the edu13 cational loans of individuals meeting the following condi14 tions:

15 ‘‘(1) The individual involved is a graduate of a

16 school or other institution described in section

17 2722(a).

18 ‘‘(2) The individual meets the applicable legal

19 requirements to provide services as a public health

20 professional (including a professional in any of the

21 fields specified in section 2722(b)(1)).

22 ‘‘(3) The individual enters into the contract re23 quired pursuant to subsection (b) as a condition of

24 the Federal Government repaying such loans (relat-
74

•S 308 IS

1 ing to an agreement to provide services in approved

2 public health positions, as defined in section 2724).

3 ‘‘(b) APPLICABILITY OF CERTAIN PROVISIONS.—Ex4 cept as inconsistent with this section or section 2724, the

5 provisions of subpart III of part D of title III (relating

6 to the Scholarship and Loan Repayment Programs of the

7 National Health Service Corps) apply to an agreement re8 garding repayment under subsection (a) to the same ex9 tent and in the same manner as such provisions apply to

10 an agreement regarding repayment under section 338B.

11 ‘‘(c) AMOUNT OF REPAYMENTS.—For each year for

12 which an individual contracts to serve in an approved pub13 lic health position pursuant to subsection (b), the Sec14 retary may repay not more than $20,000 of the principal

15 and interest of the educational loans of the individual.

16 ‘‘SEC. 2724. APPROVED PUBLIC HEALTH POSITIONS.

17 ‘‘(a) POSITION REGARDING POPULATIONS WITH SIG18 NIFICANT NEED FOR SERVICES.—

19 ‘‘(1) IN GENERAL.—With respect to the pro20 grams under this part, the obligated service of a

21 program participant pursuant to sections 2722(d)

22 and 2723(b) shall be provided through an assign23 ment, to an entity described in subsection (b), for a

24 position in which the participant provides services as

25 a public health professional to a population deter-
75

•S 308 IS

1 mined by the Secretary to have a significant unmet

2 need for the services of such a professional.

3 ‘‘(2) PERIOD OF SERVICE.—For purposes of

4 sections 2722(d) and 2723(d), the period of obli5 gated service is the following, as applicable to the

6 program participant involved:

7 ‘‘(A) In the case of scholarships under sec8 tion 2722 for full-time students, the greater

9 of—

10 ‘‘(i) 1 year for each year for which

11 such a scholarship is provided; or

12 ‘‘(ii) 2 years.

13 ‘‘(B) In the case of scholarships under sec14 tion 2722 for part-time students, a period de15 termined by the Secretary on the basis of the

16 number of hours of education or training re17 ceived under the scholarship, considering the

18 percentage constituted by the ratio of such

19 number to the number of hours for a full-time

20 student in the program involved.

21 ‘‘(C) In the case of the loan repayments

22 under section 2723, such period as the Sec23 retary and the participant may agree, except

24 that the period may not be less than 2 years.
76

•S 308 IS

1 ‘‘(b) APPROVAL OF ENTITIES FOR ASSIGNMENT OF

2 PROGRAM PARTICIPANTS.—The entities referred to in

3 subsection (a) are public and nonprofit private entities ap4 proved by the Secretary as meeting such requirements for

5 the assignment of a program participant as the Secretary

6 may establish. The entities that the Secretary may so ap7 prove include State and local departments of health, public

8 hospitals, community and neighborhood health clinics, mi9 grant health clinics, community-based health-related orga10 nizations, certified regional poison control centers, pur11 chasing cooperatives regarding health insurance, and any

12 other public or nonprofit private entity.

13 ‘‘(c) DEFINITIONS.—For purposes of this part:

14 ‘‘(1) The term ‘approved public health position’,

15 with respect to a program participant, means a posi16 tion to which the participant is assigned pursuant to

17 subsection (a).

18 ‘‘(2) The term ‘program participant’ means an

19 individual who enters into a contract pursuant to

20 section 2722(b)(2) or 2723(a)(3).

21 ‘‘SEC. 2725. ALLOCATION OF FUNDS; SPECIAL CONSIDER22 ATIONS.

23 ‘‘(a) ALLOCATIONS REGARDING NEW PARTICIPANTS

24 IN SCHOLARSHIP PROGRAM.—Of the amounts appro25 priated under section 2721 for a fiscal year, the Secretary
77

•S 308 IS

1 shall obligate not less than 30 percent for the purpose of

2 providing awards for scholarships under section 2722 to

3 individuals who have not previously received such scholar4 ships.

5 ‘‘(b) SPECIAL CONSIDERATION FOR CERTAIN INDI6 VIDUALS.—In making awards of scholarships under sec7 tion 2722 and making repayments under section 2723, the

8 Secretary shall give special consideration to individuals

9 who are in the armed forces of the United States or who

10 are veterans of the armed forces.

11 ‘‘PART 2—EDUCATIONAL INSTITUTIONS

12 REGARDING PUBLIC HEALTH

13 ‘‘SEC. 2731. AUTHORIZATIONS OF APPROPRIATIONS FROM

14 FUND.

15 ‘‘For the purpose of carrying out this part from the

16 Fund, there are authorized to be appropriated from the

17 Fund, $100,000,000 for each of the fiscal years 1996

18 through 2000.

19 ‘‘SEC. 2732. GRANTS FOR EXPANDING CAPACITY OF INSTI20 TUTIONS.

21 ‘‘(a) IN GENERAL.—The Secretary may make grants

22 to institutions described in subsection (b) for the purpose

23 of expanding the educational capacities of the institutions

24 through recruiting and retaining faculty, curriculum devel-
78

•S 308 IS

1 opment, and coordinating the activities of the institutions

2 regarding education, training, and field placements.

3 ‘‘(b) RELEVANT INSTITUTIONS.—The institutions re4 ferred to in subsection (a) are public and nonprofit pri5 vate—

6 ‘‘(1) schools of public health;

7 ‘‘(2) departments of community and preventive

8 medicine that—

9 ‘‘(A) are within schools of medicine and

10 schools of osteopathic medicine; and

11 ‘‘(B) have established formal arrangements

12 with schools of public health in order to award

13 joint degrees in public health and another

14 health profession; and

15 ‘‘(3) schools of nursing or dentistry that have

16 established formal arrangements with schools of

17 public health in order to carry out educational pro18 grams in public health at the schools of nursing or

19 dentistry, respectively.

20 ‘‘(c) REQUIREMENTS REGARDING CURRICULUM DE21 VELOPMENT.—A funding agreement for a grant under

22 subsection (a) for an institution is that, to the extent de23 termined to be appropriate by the Secretary, the curricu24 lum of institution will include the following:
79

•S 308 IS

1 ‘‘(1) Subject to subsection (d)(1), part-time

2 nondegree programs for public health professionals

3 who need further training in fields of public health.

4 ‘‘(2) With respect to the program of community

5 health advisors established in part 5 of subtitle E,

6 a program to train individuals to serve as super7 visors under such part (including training and evalu8 ating the community health advisors), which pro9 gram is carried out in collaboration with local public

10 health departments and health education and train11 ing centers.

12 ‘‘(d) ADDITIONAL REQUIREMENTS.—Funding agree13 ments for a grant under subsection (a) for an institution

14 are as follows:

15 ‘‘(1) In developing the curriculum under the

16 grant, the institution will consult with the health de17 partments in the State involved, and will follow the

18 relevant priorities of such departments.

19 ‘‘(2) The institution will, as appropriate in the

20 determination of the Secretary, coordinate the activi21 ties of the institution under the grant with relevant

22 activities of the Health Resources and Services Ad23 ministration and the Centers for Disease Control

24 and Prevention.
80

•S 308 IS

1 ‘‘SEC. 2733. COORDINATION OF GRANT ACTIVITIES WITH

2 NATIONAL PRIORITIES.

3 ‘‘The Secretary shall—

4 ‘‘(1) determine the needs of the United States

5 regarding the education and geographic distribution

6 of public health professionals;

7 ‘‘(2) determine priorities among such needs;

8 and

9 ‘‘(3) in making grants under section 2732, en10 sure that the curricula developed under such section,

11 and the expertise of the faculty recruited and re12 tained under such section, are consistent with such

13 priorities.

14 ‘‘SEC. 2734. CERTAIN REQUIREMENTS FOR GRANTS.

15 ‘‘For fiscal year 1997 and subsequent fiscal years,

16 the Secretary may make a grant under section 2732 only

17 if the institution involved is in compliance with the follow18 ing:

19 ‘‘(1) The institution has coordinated the activi20 ties of the school or institution with relevant activi21 ties of the Health Resources and Services Adminis22 tration and the Centers for Disease Control and

23 Prevention.

24 ‘‘(2) A significant number of the faculty of the

25 institution has served as practitioners in public

26 health.
81

•S 308 IS

1 ‘‘(3) The institution has consulted with public

2 health departments and public hospital systems in

3 the State involved in order to develop a curriculum

4 that reflects the needs and priorities of the State re5 garding the public health.

6 ‘‘(4) The institution has coordinated the activi7 ties of the institution with the activities of the health

8 departments and of community groups.

9 ‘‘(5) The institution carries out a program for

10 part-time students to receive training in fields of

11 public health.

12 ‘‘(6) Not less than 60 percent of the graduates

13 of the school or institution are in public health posi14 tions determined by the Secretary to be consistent

15 with the needs of the United States regarding such

16 professionals.

17 ‘‘PART 3—EXPANSION OF COMPETENCY IN

18 PUBLIC HEALTH

19 ‘‘SEC. 2736. AUTHORIZATIONS OF APPROPRIATIONS FROM

20 FUND.

21 ‘‘For the purpose of carrying out this section, there

22 is authorized to be appropriated from the Fund,

23 $60,000,000 for each of the fiscal years 1996 through

24 2000.
82

•S 308 IS

1 ‘‘SEC. 2737. GRANTS TO STATES.

2 ‘‘(a) STATES LACKING ADEQUATE TRAINING PRO3 GRAMS.—

4 ‘‘(1) IN GENERAL.—The Secretary may make

5 grants to States in which there is one or no program

6 of training in a field of public health but in which

7 there are 1 or more schools of medicine, osteopathic

8 medicine, nursing, dentistry, social work, pharmacy,

9 or health administration. A funding agreement for

10 such a grant is that the purpose of the grant is for

11 the State involved to assist 1 or more of such

12 schools in developing and integrating public health

13 curricula for the schools.

14 ‘‘(2) SPECIAL CONSIDERATIONS IN MAKING

15 GRANTS.—In making grants under paragraph (1),

16 the Secretary shall give special consideration to

17 States that agree to consult with 1 or more schools

18 of public health in carrying out the purpose de19 scribed in such subsection.

20 ‘‘(b) STATES WITH NONACCREDITED SCHOOLS.—

21 The Secretary may make grants to States in which there

22 are 1 or more nonaccredited schools of public health. A

23 funding agreement for such a grant is that the purpose

24 of the grant is for the State involved to assist 1 or more

25 of such schools in improving the schools.
83

•S 308 IS

1 ‘‘(c) AMOUNT OF GRANT; LIMITATION REGARDING

2 INDIVIDUAL EDUCATIONAL ENTITIES.—

3 ‘‘(1) AMOUNT.—The amount of a grant under

4 this section to a State may not exceed $6,000,000.

5 ‘‘(2) LIMITATION.—A funding agreement for a

6 grant under this section for a State is that, with re7 spect to the school involved, the State will not pro8 vide more than 2 years of assistance to the school

9 from grants under this section.

10 ‘‘PART 4—AREA HEALTH EDUCATION CENTERS

11 ‘‘SEC. 2738. AUTHORIZATIONS OF APPROPRIATIONS FROM

12 FUND.

13 ‘‘(a) ADDITIONAL FUNDING.—For the purpose of

14 carrying out programs under section 746, there are au15 thorized to be appropriated from the Fund, $35,000,000

16 for each of the fiscal years 1996 through 2000.

17 ‘‘(b) RELATION TO OTHER FUNDS.—The authoriza18 tions of appropriations established in subsection (a) are

19 in addition to any other authorizations of appropriations

20 that are available for the purpose described in such sub21 section.
84

•S 308 IS

1 ‘‘PART 5—HEALTH EDUCATION TRAINING

2 CENTER

3 ‘‘SEC. 2739. AUTHORIZATIONS OF APPROPRIATIONS FROM

4 FUND.

5 ‘‘(a) ADDITIONAL FUNDING.—For the purpose of

6 carrying out Health Education Training Center programs,

7 there are authorized to be appropriated from the Fund,

8 $20,000,000 for each of the fiscal years 1996 through

9 2000.

10 ‘‘(b) RELATION TO OTHER FUNDS.—The authoriza11 tions of appropriations established in subsection (a) are

12 in addition to any other authorizations of appropriations

13 that are available for the purpose described in such sub14 section.

15 ‘‘Subtitle C—Regional Poison

16 Control Centers

17 ‘‘SEC. 2741. AUTHORIZATIONS OF APPROPRIATIONS FROM

18 FUND.

19 ‘‘For the purpose of carrying out this subtitle, there

20 is authorized to be appropriated from the Fund,

21 $50,000,000 for each of the fiscal years 1996 through

22 2000.

23 ‘‘SEC. 2742. GRANTS FOR REGIONAL CENTERS.

24 ‘‘(a) IN GENERAL.—The Secretary may make grants

25 to public and nonprofit private entities for centers to carry

26 out activities regarding—
85

•S 308 IS

1 ‘‘(1) the prevention and treatment of poisoning;

2 and

3 ‘‘(2) such other activities regarding the control

4 of poisons as the Secretary determines to be appro5 priate.

6 ‘‘(b) REGIONAL CONSIDERATIONS.—In making

7 grants under subsection (a), the Secretary shall determine

8 the need in each of the principal geographic regions of

9 the United States for a center under such subsection, and

10 shall make the grants according to priorities established

11 by the Secretary on the basis of the extent of such need

12 in each of the regions. In carrying out the preceding sen13 tence, the Secretary shall ensure that no two centers re14 ceive grants for the same geographic service area.

15 ‘‘(c) MATCHING FUNDS.—

16 ‘‘(1) IN GENERAL.—With respect to the costs of

17 an entity in providing for centers under subsection

18 (a), the Secretary may make a grant under such

19 subsection only if the State in which the center is to

20 operate, or other public entities in the State, agree

21 to make available (directly or through donations

22 from public or private entities) non-Federal con23 tributions toward such costs in an amount deter24 mined by the Secretary.
86

•S 308 IS

1 ‘‘(2) DETERMINATION OF AMOUNT CONTRIB2 UTED.—Non-Federal contributions required under

3 paragraph (1) may be in cash or in kind, fairly eval4 uated, including plant, equipment, or services.

5 Amounts provided by the Federal Government, or

6 services assisted or subsidized to any significant ex7 tent by the Federal Government, may not be in8 cluded in determining the amount of such non-Fed9 eral contributions.

10 ‘‘SEC. 2743. REQUIREMENTS REGARDING CERTIFICATION.

11 ‘‘(a) IN GENERAL.—Subject to subsection (b), the

12 Secretary may make a grant under section 2742 only if

13 the center involved has been certified by a professional or14 ganization in the field of poison control, and the Secretary

15 has approved the organization as having in effect stand16 ards for certification that reasonably provide for the pro17 tection of the public health with respect to poisoning. In

18 carrying out the preceding sentence, the Secretary shall

19 consider the standards established by the American Asso20 ciation of Poison Control Centers.

21 ‘‘(b) TEMPORARY WAIVER.—The Secretary may

22 waive the requirement of subsection (a) for a center for

23 a period not exceeding 1 year.
87

•S 308 IS

1 ‘‘SEC. 2744. GENERAL PROVISIONS.

2 ‘‘(a) DURATION OF GRANT.—The period during

3 which payments are made under a grant under section

4 2742 may not exceed 3 years. The provision of such pay5 ments is subject to annual approval by the Secretary of

6 the payments and subject to the availability of appropria7 tions for the fiscal year involved to make the payments.

8 The preceding sentence may not be construed as establish9 ing a limitation on the number of such grants that may

10 be made to an entity.

11 ‘‘(b) STUDY REGARDING NEED FOR CENTERS.—

12 ‘‘(1) IN GENERAL.—The Secretary shall con13 duct a study of each of the centers for which a grant

14 under section 2742 has been provided. The purpose

15 of the study shall be to determine the effectiveness

16 of the centers in carrying out the activities described

17 in such section and the extent to which the activities

18 have been carried out in a cost-effective manner.

19 ‘‘(2) ALTERNATIVES TO CENTERS.—In carrying

20 out the study under paragraph (1), the Secretary

21 shall determine the extent to which the activities de22 scribed in section 2742 can be effectively carried out

23 through means other than centers under such sec24 tion. The alternative means considered by the Sec25 retary under the preceding sentence shall include the
88

•S 308 IS

1 alternative of requiring public and private health

2 plans to carry out such activities.

3 ‘‘(3) DATE CERTAIN FOR COMPLETION.—Not

4 later than November 1, 1996, the Secretary shall

5 submit to the Congress a report describing the find6 ings made in the study under paragraph (1).

7 ‘‘(4) NOTICE TO CENTERS.—Not later than

8 February 1, 1997, the Secretary shall notify each

9 grantee under section 2742 whether the Secretary

10 considers the continued operation of the center in11 volved to be necessary in meeting the needs of the

12 geographic region involved for the activities de13 scribed in such section.

14 ‘‘Subtitle D—School-Related Health

15 Services

16 ‘‘SEC. 2746. AUTHORIZATION OF APPROPRIATIONS FROM

17 FUND.

18 ‘‘(a) FUNDING FOR SCHOOL-RELATED HEALTH

19 SERVICES.—For the purpose of carrying out this subtitle,

20 there are authorized to be appropriated from the Fund,

21 $100,000,000 for fiscal year 1996, $200,000,000 for fis22 cal year 1997, $300,000,000 for fiscal year 1998,

23 $400,000,000 for fiscal year 1999, and $500,000,000 for

24 fiscal year 2000.
89

•S 308 IS

1 ‘‘(b) FUNDING FOR PLANNING AND DEVELOPMENT

2 GRANTS.—Of amounts made available under this section,

3 not to exceed $10,000,000 for each of fiscal years 1996

4 and 1997 may be utilized to carry out section 2749.

5 ‘‘SEC. 2747. ELIGIBILITY FOR GRANTS.

6 ‘‘(a) IN GENERAL.—

7 ‘‘(1) PLANNING AND DEVELOPMENT GRANTS.—

8 Entities eligible to apply for and receive grants

9 under section 2749 are—

10 ‘‘(A) State health agencies that apply on

11 behalf of local community partnerships; or

12 ‘‘(B) local community partnerships in

13 States in which health agencies have not suc14 cessfully applied.

15 ‘‘(2) OPERATIONAL GRANTS.—Entities eligible

16 to apply for and receive grants under section 2750

17 are—

18 ‘‘(A) a qualified State as designated under

19 subsection (c) that apply on behalf of local com20 munity partnerships; or

21 ‘‘(B) local community partnerships in

22 States that are not designated under subpara23 graph (A).

24 ‘‘(b) LOCAL COMMUNITY PARTNERSHIPS.—
90

•S 308 IS

1 ‘‘(1) IN GENERAL.—A local community partner2 ship under subsection (a)(1)(B) and (a)(2)(B) is an

3 entity that, at a minimum includes—

4 ‘‘(A) a local health care provider, which

5 may be a local public health department, with

6 experience in delivering services to children and

7 youth or medically underserved populations;

8 ‘‘(B) local educational agency on behalf of

9 one or more public schools; and

10 ‘‘(C) one community based organization lo11 cated in the community to be served that has

12 a history of providing services to at-risk chil13 dren and youth.

14 ‘‘(2) RURAL COMMUNITIES.—In rural commu15 nities, local partnerships should seek to include, to

16 the fullest extent practicable, providers and commu17 nity based organizations with experience in serving

18 the target population.

19 ‘‘(3) PARENT AND COMMUNITY PARTICIPA20 TION.—An applicant described in subsection (a)

21 shall, to the maximum extent feasible, involve broad22 based community participation (including parents of

23 the youth to be served).

24 ‘‘(c) QUALIFIED STATE.—A qualified State under

25 subsection (a)(2)(A) is a State that, at a minimum—
91

•S 308 IS

1 ‘‘(1) demonstrates an organizational commit2 ment (including a strategic plan) to providing a

3 broad range of health, health education and support

4 services to at-risk youth; and

5 ‘‘(2) has a memorandum of understanding or

6 cooperative agreement jointly entered into by the

7 State agencies responsible for health and education

8 regarding the planned delivery of health and support

9 services in school-based or school-linked centers.

10 ‘‘SEC. 2748. PREFERENCES.

11 ‘‘In making grants under sections 2749 and 2750,

12 the Secretary shall give priority to applicants whose-com13 munities to be served show the most substantial level of

14 need for health services among children and youth.

15 ‘‘SEC. 2749. PLANNING AND DEVELOPMENT GRANTS.

16 ‘‘(a) IN GENERAL.—The Secretary may make grants

17 during fiscal years 1996 and 1997 to entities eligible

18 under section 2747 to develop school-based or school19 linked health service sites.

20 ‘‘(b) USE OF FUNDS.—Amounts provided under a

21 grant under this section may be used for the following:

22 ‘‘(1) Planning for the provision of school health

23 services, including—
92

•S 308 IS

1 ‘‘(A) an assessment of the need for health

2 services among youth in the communities to be

3 served;

4 ‘‘(B) the health services to be provided and

5 how new services will be integrated with exist6 ing services;

7 ‘‘(C) assessing and planning for the mod8 ernization and expansion of existing facilities

9 and equipment to accommodate such services;

10 and

11 ‘‘(D) an affiliation with relevant health

12 plans.

13 ‘‘(2) Recruitment and training of staff for the

14 administration and delivery of school health services.

15 ‘‘(3) The establishment of local community

16 partnerships as described in section 2747(b).

17 ‘‘(4) In the case of States, the development of

18 memorandums of understanding or cooperative

19 agreements for the coordinated delivery of health

20 and support services through school health service

21 sites.

22 ‘‘(5) Other activities necessary to assume oper23 ational status.

24 ‘‘(c) APPLICATION FOR GRANTS.—To be eligible to

25 receive a grant under this section an entity described in
93

•S 308 IS

1 section 2747(a) shall submit an application in a form and

2 manner prescribed by the Secretary.

3 ‘‘(d) NUMBER OF GRANTS.—Not more than one plan4 ning grant may be made to a single applicant. A planning

5 grant may not exceed 2 years in duration.

6 ‘‘(e) AMOUNT AVAILABLE FOR DEVELOPMENT

7 GRANT.—The Secretary may award not to exceed—

8 ‘‘(1) $150,000 to entities under section

9 2747(a)(1)(A) and to localities planning for a city10 wide or countywide school health services delivery

11 system; and

12 ‘‘(2) $50,000 to entities under section

13 2747(a)(1)(B).

14 ‘‘SEC. 2759. GRANTS FOR OPERATION OF SCHOOL HEALTH

15 SERVICES.

16 ‘‘(a) IN GENERAL.—The Secretary may make grants

17 to eligible entities described in section 2747(a)(2) that

18 submit applications consistent with the requirements of

19 this section, to pay the cost of operating school-based or

20 school-linked health service sites.

21 ‘‘(b) USE OF GRANT.—Amounts provided under a

22 grant under this section may be used for the following—

23 ‘‘(1) health services, including diagnosis and

24 treatment of simple illnesses and minor injuries;
94

•S 308 IS

1 ‘‘(2) preventive health services, including health

2 screenings follow-up health care, mental health, and

3 preventive health education;

4 ‘‘(3) enabling services and other necessary sup5 port services;

6 ‘‘(4) training, recruitment, and compensation of

7 health professionals and other staff necessary for the

8 administration and delivery of school health services;

9 and

10 ‘‘(5) referral services, including the linkage of

11 individuals to health plans, and community-based

12 health and social service providers.

13 ‘‘(c) APPLICATION FOR GRANT.—To be eligible to re14 ceive a grant under this section an entity described in sec15 tion 2747(a)(2) shall submit an application in a form and

16 manner prescribed by the Secretary. In order to receive

17 a grant under this section, an applicant must include in

18 the application the following information—

19 ‘‘(1) a description of the services to be fur20 nished by the applicant;

21 ‘‘(2) the amounts and sources of funding that

22 the applicant will expend, including estimates of the

23 amount of payments the applicant will receive from

24 health plans and other sources;
95

•S 308 IS

1 ‘‘(3) a description of local community partner2 ships, including parent and community participation;

3 ‘‘(4) a description of the linkages with other

4 health and social service providers; and

5 ‘‘(5) such other information as the Secretary

6 determines to be appropriate.

7 ‘‘(d) ASSURANCES.—In order to receive a grant

8 under this section, an applicant must meet the following

9 conditions—

10 ‘‘(1) school health service sites will, directly or

11 indirectly, provide a broad range of health services,

12 in accordance with the determinations of the local

13 community partnership, that may include—

14 ‘‘(A) diagnosis and treatment of simple ill15 nesses and minor injuries;

16 ‘‘(B) preventive health services, including

17 health screenings and follow-up health care,

18 mental health and preventive health education;

19 ‘‘(C) enabling services; and

20 ‘‘(D) referrals (including referrals regard21 ing mental health and substance abuse) with

22 follow-up to ensure that needed services are re23 ceived;

24 ‘‘(2) the applicant provides services rec25 ommended by the health provider, in consultation
96

•S 308 IS

1 with the local community partnership, and with the

2 approval of the local education agency;

3 ‘‘(3) the applicant provides the services under

4 this subsection to adolescents, and other school age

5 children and their families as deemed appropriate by

6 the local partnership;

7 ‘‘(4) the applicant maintains agreements with

8 community-based health care providers with a his9 tory of providing services to such populations for the

10 provision of health care services not otherwise pro11 vided directly or during the hours when school

12 health services are unavailable;

13 ‘‘(5) the applicant establishes an affiliation with

14 relevant health plans and will establish reimburse15 ment procedures and will make every reasonable ef16 fort to collect appropriate reimbursement for serv17 ices provided;

18 ‘‘(6) the applicant agrees to supplement and

19 not supplant the level of State or local funds under

20 the direct control of the applying State or participat21 ing local education or health authority expended for

22 school health services as defined by this Act;

23 ‘‘(7) services funded under this Act will be co24 ordinated with existing school health services pro25 vided at a participating school; and
97

•S 308 IS

1 ‘‘(8) for applicants in rural areas, the assur2 ances required under paragraph (4) shall be fulfilled

3 to the maximum extent possible.

4 ‘‘(e) STATE LAWS.—Notwithstanding any other pro5 vision in this subtitle, no school based health clinic may

6 provide services, to any minor, when to do so is a violation

7 of State laws or regulations pertaining to informed con8 sent for medical services to minors.

9 ‘‘(f) LIMITATION ON ADMINISTRATIVE FUNDS.—In

10 the case of a State applying on behalf of local educational

11 partnerships, the applicant may retain not more than 5

12 percent of grants awarded under this subpart for adminis13 trative costs.

14 ‘‘(g) DURATION OF GRANT.—A grant under this sec15 tion shall be for a period determined appropriate by the

16 Secretary.

17 ‘‘(h) AMOUNT OF GRANT.—The annual amount of a

18 grant awarded under this section shall not be more than

19 $200,000 per school-based or school-linked health service

20 site.

21 ‘‘(i) FEDERAL SHARE.—

22 ‘‘(1) IN GENERAL.—Subject to paragraph (3), a

23 grant for services awarded under this section may

24 not exceed—
98

•S 308 IS

1 ‘‘(A) 90 percent of the non-reimbursed cost

2 of the activities to be funded under the program

3 for the first 2 fiscal years for which the pro4 gram receives assistance under this section; and

5 ‘‘(B) 75 percent of the non-reimbursed

6 cost of such activities for subsequent years for

7 which the program receives assistance under

8 this section.

9 The remainder of such costs shall be made available

10 as provided in paragraph (2).

11 ‘‘(2) FORM OF NON-FEDERAL SHARE.—The

12 non-Federal share required by paragraph (1) may be

13 in cash or in-kind, fairly evaluated, including facili14 ties, equipment, personnel, or services, but may not

15 include amounts provided by the Federal Govern16 ment. In-kind contributions may include space with17 in school facilities, school personnel, program use of

18 school transportation systems, outposted health per19 sonnel, and extension of health provider medical li20 ability insurance.

21 ‘‘(3) WAIVER.—The Secretary may waive the

22 requirements of paragraph (1) for any year in ac23 cordance with criteria established by regulation.

24 Such criteria shall include a documented need for

25 the services provided under this section and an in-
99

•S 308 IS

1 ability of the grantee to meet the requirements of

2 paragraph (1) despite a good faith effort.

3 ‘‘(j) TRAINING AND TECHNICAL ASSISTANCE.—Enti4 ties that receive assistance under this section may use not

5 to exceed 10 percent of the amount of such assistance to

6 provide staff training and to secure necessary technical as7 sistance. To the maximum extent feasible, technical assist8 ance should be sought through local community-based en9 tities. The limitation contained in this subsection shall

10 apply to individuals employed to assist in obtaining funds

11 under this subtitle. Staff training should include the train12 ing of teachers and other school personnel necessary to

13 ensure appropriate referral and utilization of services, and

14 appropriate linkages between class-room activities and

15 services offered.

16 ‘‘(k) REPORT AND MONITORING.—The Secretary will

17 submit to the Committee on Labor and Human Resources

18 in the Senate and the Committee on Commerce in the

19 House of Representatives a biennial report on the activi20 ties funded under this Act, consistent with the ongoing

21 monitoring activities of the Department. Such reports are

22 intended to advise the relevant Committees of the avail23 ability and utilization of services, and other relevant infor24 mation about program activities.
100

•S 308 IS

1 ‘‘Subtitle E—Expansion of Rural

2 and Underserved Areas Access

3 to Health Services

4 ‘‘PART 1—COMMUNITY AND MIGRANT HEALTH

5 CENTERS

6 ‘‘SEC. 2756. AUTHORIZATIONS OF APPROPRIATIONS FROM

7 FUND.

8 ‘‘(a) IN GENERAL.—For the purpose of carrying out

9 this part, there is authorized to be appropriated from the

10 Fund, $100,000,000 for each of the fiscal years 1996

11 through 2000.

12 ‘‘(b) RELATION TO OTHER FUNDS.—The authoriza13 tions of appropriations established in subsection (a) for

14 the purpose described in such subsection are in addition

15 to any other authorizations of appropriations that are

16 available for such purpose.

17 ‘‘SEC. 2757. GRANTS TO COMMUNITY AND MIGRANT

18 HEALTH CENTERS.

19 ‘‘(a) IN GENERAL.—The Secretary shall make grants

20 in accordance with this section to migrant health centers

21 and community health centers.

22 ‘‘(b) USE OF FUNDS.—

23 ‘‘(1) DEVELOPMENT, OPERATION, AND OTHER

24 PURPOSES REGARDING CENTERS.—Subject to para25 graph (2), grants under subsection (a) to migrant
101

•S 308 IS

1 health centers and community health centers may be

2 made only in accordance with the conditions upon

3 which grants are made under sections 329 and 330,

4 respectively.

5 ‘‘(2) REQUIRED FINANCIAL RESERVES.—The

6 Secretary may authorize migrant health centers and

7 community health centers to expend a grant under

8 subsection (a) to establish and maintain financial re9 serves required for purposes of health plans.

10 ‘‘(c) DEFINITIONS.—For purposes of this subtitle,

11 the terms ‘migrant health center’ and ‘community health

12 center’ have the meanings given such terms in sections

13 329(a)(1) and 330(a), respectively.

14 ‘‘PART 2—NATIONAL HEALTH SERVICE CORPS

15 ‘‘SEC. 2781. AUTHORIZATIONS OF APPROPRIATIONS FROM

16 FUND.

17 ‘‘(a) ADDITIONAL FUNDING; GENERAL CORPS PRO18 GRAM; ALLOCATIONS REGARDING NURSES.—For the pur19 pose of carrying out subpart II of part D of title III, and

20 for the purpose of carrying out subsection (c), there are

21 authorized to be appropriated from the Fund,

22 $100,000,000 for each of the fiscal years 1996 through

23 2000.

24 ‘‘(b) RELATION TO OTHER FUNDS.—The authoriza25 tions of appropriations established in subsection (a) are
102

•S 308 IS

1 in addition to any other authorizations of appropriations

2 that are available for the purpose described in such sub3 section.

4 ‘‘(c) ALLOCATION FOR PARTICIPATION OF NURSES

5 IN SCHOLARSHIP AND LOAN REPAYMENT PROGRAMS.—

6 Of the amounts appropriated under subsection (a), the

7 Secretary shall reserve such amounts as may be necessary

8 to ensure that, of the aggregate number of individuals who

9 are participants in the Scholarship Program under section

10 338A, or in the Loan Repayment Program under section

11 338B, the total number who are being educated as nurses

12 or are serving as nurses, respectively, is increased to 30

13 percent.

14 ‘‘(d) AVAILABILITY OF FUNDS.—An appropriation

15 under this section for any fiscal year may be made at any

16 time before that fiscal year and may be included in an

17 Act making an appropriation under an authorization

18 under subsection (a) for another fiscal year; but no funds

19 may be made available from any appropriation under this

20 section for obligation under sections 331 through 335, sec21 tion 336A, and section 337 before the fiscal year involved.
103

•S 308 IS

1 ‘‘PART 3—SATELLITE CLINICS REGARDING

2 PRIMARY HEALTH CARE

3 ‘‘SEC. 2783. AUTHORIZATION OF APPROPRIATIONS FROM

4 FUND.

5 ‘‘For the purpose of carrying out this part, there is

6 authorized to be appropriated from the Fund,

7 $50,000,000 for each of the fiscal years 1996 through

8 2000.

9 ‘‘SEC. 2783A. GRANTS TO STATES FOR DEVELOPMENT AND

10 OPERATION OF SATELLITE CLINICS.

11 ‘‘(a) IN GENERAL.—With respect to outpatient

12 health centers that are providers of comprehensive health

13 services, the Secretary may make grants to States for the

14 purpose of assisting such centers in developing or operat15 ing facilities that—

16 ‘‘(1) provide clinical preventive services, treat17 ment of minor illnesses and injuries, family planning

18 services, and referrals for health services, mental

19 health services, and health-related social services;

20 and

21 ‘‘(2) are located at a distance from the center

22 sufficient to increase the extent to which individuals

23 in the geographic area involved have access to the

24 services specified in paragraph (1).

25 ‘‘(b) CERTAIN REQUIREMENTS.—The Secretary may

26 make a grant under subsection (a) only if the State agrees
104

•S 308 IS

1 that the health facility for which the grant is made, once

2 in operation, will meet the following conditions:

3 ‘‘(1) The clinical preventive services provided by

4 the facility will include routine preventive services,

5 including family planning services, for pregnant and

6 postpartum women and for children, including

7 health screenings and immunizations.

8 ‘‘(2) The principal providers of health services

9 at the facility, and the principal managers of the fa10 cility, will be nurse practitioners, physician assist11 ants, or nurse clinicians, subject to applicable law.

12 ‘‘(3) The outpatient health center operating the

13 facility will serve as a referral center for physician

14 services and will provide for the ongoing monitoring

15 of the activities of the facility.

16 ‘‘(c) MATCHING FUNDS.—The Secretary may make

17 a grant under subsection (a) only if the State involved

18 agrees to make non-Federal contributions toward the costs

19 of developing and operating the health facilities involved.

20 ‘‘(d) APPLICATION FOR GRANT.—The Secretary may

21 make a grant under subsection (a) only if an application

22 for the grant is submitted to the Secretary and the appli23 cation is in such form, is made in such manner, and con24 tains such agreements, assurances, and information as the
105

•S 308 IS

1 Secretary determines to be necessary to carry out this

2 part.

3 ‘‘(e) LIMITATION ON AMOUNT OF ASSISTANCE PER

4 FACILITY.—With respect to a health facility for which one

5 or more grants under subsection (a) are made, the Sec6 retary may not provide more than an aggregate $250,000

7 for the development and operation of the facility.

8 ‘‘PART 4—COMMUNITY HEALTH ADVISORS

9 ‘‘SEC. 2784. AUTHORIZATION OF APPROPRIATIONS FROM

10 FUND.

11 ‘‘For the purpose of carrying out this part, there is

12 authorized to be appropriated from the Fund,

13 $100,000,000 for each of the fiscal years 1996 through

14 2000.

15 ‘‘SEC. 2785. FORMULA GRANTS REGARDING COMMUNITY

16 HEALTH ADVISOR PROGRAMS.

17 ‘‘(a) FORMULA GRANTS.—

18 ‘‘(1) IN GENERAL.—In the case of each State

19 (or entity designated by a State under subsection

20 (b)) that submits to the Secretary an application in

21 accordance with section 2788 for a fiscal year, the

22 Secretary of Health and Human Services, acting

23 through the Director of the Centers for Disease

24 Control and Prevention and in coordination with the

25 heads of the agencies specified in paragraph (2),
106

•S 308 IS

1 shall make an award of financial assistance to the

2 State or entity for the development and operation of

3 community health advisor programs under section

4 2786(b). The award shall consist of the allotment

5 determined under section 2789 with respect to the

6 State, subject to section 2794.

7 ‘‘(2) COORDINATION WITH OTHER AGENCIES.—

8 The agencies referred to in paragraph (1) regarding

9 coordination are the Health Resources and Services

10 Administration, the National Institutes of Health,

11 the Substance Abuse and Mental Health Services

12 Administration, and the Health Education and

13 Training Center.

14 ‘‘(b) DESIGNATED ENTITIES.—With respect to the

15 State involved, an entity other than the State may receive

16 an award under subsection (a) only if the entity—

17 ‘‘(1) is a public or nonprofit private academic

18 organization (or other public or nonprofit private en19 tity); and

20 ‘‘(2) has been designated by the State to carry

21 out the purpose described in such subsection in the

22 State and to receive amounts under such subsection

23 in lieu of the State.
107

•S 308 IS

1 ‘‘(c) ROLE OF STATE AGENCY FOR PUBLIC

2 HEALTH.—A funding agreement for an award under sub3 section (a) is that—

4 ‘‘(1) if the applicant is a State, the award will

5 be administered by the State agency with the prin6 cipal responsibility for carrying out public health

7 programs; and

8 ‘‘(2) if the applicant is an entity designated

9 under subsection (b), the award will be administered

10 in consultation with such State agency.

11 ‘‘(d) STATEWIDE RESPONSIBILITIES; LIMITATION ON

12 EXPENDITURES.—

13 ‘‘(1) STATEWIDE RESPONSIBILITIES.—A fund14 ing agreement for an award under subsection (a) is

15 that the applicant involved will—

16 ‘‘(A) operate a clearinghouse to maintain

17 and disseminate information on community

18 health advisor programs (and similar programs)

19 in the State, including information on develop20 ing and operating such programs, on training

21 individuals to participate in the programs, and

22 on evaluation of the programs;

23 ‘‘(B) collaborate with schools of public

24 health to provide to community health advisor

25 programs in the State technical assistance in
108

•S 308 IS

1 training and supervising community health ad2 visors under section 2787(g)(1); and

3 ‘‘(C) coordinate the activities carried out in

4 the State under the award, including coordina5 tion between the various community health ad6 visor programs and coordination between such

7 programs and related activities of the State and

8 of other public or private entities.

9 ‘‘(2) LIMITATION.—A funding agreement for an

10 award under subsection (a) is that the applicant in11 volved will not expend more than 15 percent of the

12 award in the aggregate for carrying out paragraph

13 (1) and for the expenses of administering the award

14 with respect to the State involved, including the

15 process of receiving payments from the Secretary

16 under the award, allocating the payments among the

17 entities that are to develop and operate the commu18 nity health advisor programs involved, and monitor19 ing compliance with the funding agreements made

20 under this subtitle by the applicant.

21 ‘‘SEC. 2786. REQUIREMENTS REGARDING COMMUNITY

22 HEALTH ADVISOR PROGRAMS.

23 ‘‘(a) PURPOSE OF AWARD; HEALTHY PEOPLE 2000

24 OBJECTIVES.—
109

•S 308 IS

1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a

2 funding agreement for an award under section 2785

3 for an applicant is that the purpose of the award is,

4 through community health advisor programs under

5 subsection (b), to assist the State involved in attain6 ing the Healthy People 2000 Objectives.

7 ‘‘(2) AUTHORITY REGARDING SELECTION OF

8 PRIORITY OBJECTIVES.—With respect to compliance

9 with the agreement made under paragraph (1), an

10 applicant receiving an award under section 2785

11 may, from among the various Healthy People 2000

12 Objectives, select one or more Objectives to be given

13 priority in the operation of a community health advi14 sor program of the applicant, subject to the appli15 cant selecting such priorities in consultation with the

16 entity that is to carry out the program and the local

17 health department involved.

18 ‘‘(b) REQUIREMENTS FOR PROGRAMS.—

19 ‘‘(1) IN GENERAL.—A funding agreement for

20 an award under section 2785 for an applicant is

21 that, in expending the award, the purpose described

22 in subsection (a)(1) will be carried out in accordance

23 with the following:

24 ‘‘(A) For each community for which the

25 purpose is to be carried out, the applicant will
110

•S 308 IS

1 establish a program in accordance with this

2 subsection.

3 ‘‘(B) The program will be carried out in a

4 community only if the applicant has, under sec5 tion 2787(a), identified the community as hav6 ing a significant need for the program.

7 ‘‘(C) The program will be operated by a

8 public or nonprofit private entity with experi9 ence in providing health or health-related social

10 services to individuals who are underserved with

11 respect to such services.

12 ‘‘(D) The services of the program, as spec13 ified in paragraph (2), will be provided prin14 cipally by community health advisors (as de15 fined in subsection (d)).

16 ‘‘(2) AUTHORIZED PROGRAM SERVICES.—For

17 purposes of paragraph (1)(D), the services specified

18 in this paragraph for a program are as follows:

19 ‘‘(A) The program will collaborate with

20 health care providers and related entities in

21 order to facilitate the provision of health serv22 ices and health-related social services (including

23 collaborating with local health departments,

24 community health centers, public hospital sys25 tems, migrant health centers, rural health clin-
111

•S 308 IS

1 ics, hospitals, physicians and nurses, providers

2 of health education, pre-school facilities for chil3 dren, elementary and secondary schools, and

4 providers of social services).

5 ‘‘(B) The program will provide public edu6 cation on health promotion and on the preven7 tion of diseases, illnesses, injuries, and disabil8 ities, and will facilitate the appropriate use of

9 available health services and health-related so10 cial services.

11 ‘‘(C) The program will provide health-re12 lated counseling.

13 ‘‘(D) The program will provide referrals

14 for available health services and health-related

15 social services.

16 ‘‘(E) For the purpose of increasing the ca17 pacity of individuals to utilize health services

18 and health-related social services under Federal,

19 State, and local programs, the following condi20 tions will be met:

21 ‘‘(i) The program will assist individ22 uals in establishing eligibility under the

23 programs and in receiving the services or

24 other benefits of the programs.
112

•S 308 IS

1 ‘‘(ii) The program will provide such

2 other services as the Secretary determines

3 to be appropriate, which services may in4 clude (but are not limited to) transpor5 tation and translation services.

6 ‘‘(F) The program will provide outreach

7 services to inform the community of the avail8 ability of the services of the program.

9 ‘‘(c) PRIORITY FOR MEDICALLY UNDERSERVED COM10 MUNITIES.—A funding agreement for an award under sec11 tion 2785 is that the applicant involved will give priority

12 to developing and operating community health advisor

13 programs for medically underserved communities.

14 ‘‘(d) DEFINITION OF COMMUNITY HEALTH ADVI15 SOR.—For purposes of this part, the term ‘community

16 health advisor’ means an individual—

17 ‘‘(1) who has demonstrated the capacity to

18 carry out one or more of the authorized program

19 services;

20 ‘‘(2) who, for not less than 1 year, has been a

21 resident of the community in which the community

22 health advisor program involved is to be operated;

23 and

24 ‘‘(3) is a member of a socioeconomic group to

25 be served by the program.
113

•S 308 IS

1 ‘‘SEC. 2787. ADDITIONAL AGREEMENTS.

2 ‘‘(a) IDENTIFICATION OF COMMUNITY NEEDS.—A

3 funding agreement for an award under section 2785 is

4 that the applicant involved will—

5 ‘‘(1) identify the needs of the community in6 volved for the authorized program services, including

7 the identifying the resources of the community that

8 are available for carrying out the program;

9 ‘‘(2) in identifying such needs, consult with

10 members of the community, with individuals and

11 programs that provide health services in the commu12 nity, and with individuals and programs that provide

13 health-related social services in the community; and

14 ‘‘(3) consider such needs in carrying out a com15 munity health advisor program for the community.

16 ‘‘(b) MATCHING FUNDS.—

17 ‘‘(1) IN GENERAL.—With respect to the cost of

18 carrying out a community health advisor program, a

19 funding agreement for an award under section 2785

20 is that the applicant involved will make available (di21 rectly or through donations from public or private

22 entities) non-Federal contributions toward such cost

23 in an amount that is not less than 25 percent of

24 such cost.

25 ‘‘(2) DETERMINATION OF AMOUNT CONTRIB26 UTED.—
114

•S 308 IS

1 ‘‘(A) Non-Federal contributions required in

2 paragraph (1) may be in cash or in kind, fairly

3 evaluated, including plant, equipment, or serv4 ices. Amounts provided by the Federal Govern5 ment, or services assisted or subsidized to any

6 significant extent by the Federal Government,

7 may not be included in determining the amount

8 of such non-Federal contributions.

9 ‘‘(B) With respect to the State in which

10 the community health advisor program involved

11 is to be carried out, amounts provided by the

12 State in compliance with subsection (c) shall be

13 included in determining the amount of non-Fed14 eral contributions under paragraph (1).

15 ‘‘(c) MAINTENANCE OF EFFORT.—With respect to

16 the purposes for which an award under section 2785 is

17 authorized in this subtitle to be expended, the Secretary

18 may make such an award only if the State involved agrees

19 to maintain expenditures of non-Federal amounts for such

20 purposes at a level that is not less than the level of such

21 expenditures maintained by the State for the fiscal year

22 preceding the first fiscal year for which such an award

23 is made with respect to the State.

24 ‘‘(d) CULTURAL CONTEXT OF SERVICES.—A funding

25 agreement for an award under section 2785 for an appli-
115

•S 308 IS

1 cant is that the services of the community health advisor

2 program involved will be provided in the language and cul3 tural context most appropriate for the individuals served

4 by the program, and that for such purpose the community

5 health advisors of the program will include an appropriate

6 number of advisors who are fluent in both English and

7 not less than one of the other relevant languages.

8 ‘‘(e) NUMBER OF PROGRAMS PER AWARD; PRO9 GRAMS FOR URBAN AND RURAL AREAS.—A funding

10 agreement for an award under section 2785 for an appli11 cant is that the number of community health advisor pro12 grams operated in the State with the award will be deter13 mined by the Secretary, except that (subject to section

14 2786(b)(1)(B)) such a program will be carried out in not

15 less than one urban area of the State, and in not less than

16 one rural area of the State.

17 ‘‘(f) ONGOING SUPERVISION OF ADVISORS.—A fund18 ing agreement for an award under section 2785 is that

19 the applicant involved will ensure that each community

20 health advisor program operated with the award provides

21 for the ongoing supervision of the community health advi22 sors of the program, and that the individuals serving as

23 supervisors in the program will include 1 or more public

24 health nurses with field experience and managerial experi25 ence.
116

•S 308 IS

1 ‘‘(g) CERTAIN EXPENDITURES.—

2 ‘‘(1) TRAINING; CONTINUING EDUCATION.—

3 Funding agreements for an award under section

4 2785 include the following:

5 ‘‘(A) The applicant involved will ensure

6 that, for each community health advisor pro7 gram operated with the award, a program is

8 carried out to train community health advisors

9 to provide the authorized program services, in10 cluding practical experiences in providing serv11 ices for health promotion and disease preven12 tion.

13 ‘‘(B) The program of training will provide

14 for the continuing education of the community

15 health advisors.

16 ‘‘(C) Not more than 15 percent of the

17 award will be expended for the program of

18 training.

19 ‘‘(2) COMPENSATION.—With respect to compli20 ance with the agreements made under this subtitle,

21 the purposes for which an award under section 2785

22 may be expended include providing compensation for

23 the services of community health advisors.
117

•S 308 IS

1 ‘‘(h) REPORTS TO SECRETARY; ASSESSMENT OF EF2 FECTIVENESS.—Funding agreements for an award under

3 section 2785 for an applicant include the following:

4 ‘‘(1) The applicant will ensure that, for each

5 fiscal year for which a community health advisor

6 program receives amounts from the award, the pro7 gram will prepare a report describing the activities

8 of the program for such year, including—

9 ‘‘(A) a specification of the number of indi10 viduals served by the program;

11 ‘‘(B) a specification of the entities with

12 which the program has collaborated in carrying

13 out the purpose described in section 2786(a)(1);

14 and

15 ‘‘(C) an assessment of the extent of the ef16 fectiveness of the program in carrying out such

17 purpose.

18 ‘‘(2) Such reports will include such additional

19 information regarding the applicant and the pro20 grams as the Secretary may require.

21 ‘‘(3) The applicant will prepare the reports as

22 a single document and will submit the document to

23 the Secretary not later than February 1 of the fiscal

24 year following the fiscal year for which the reports

25 were prepared.
118

•S 308 IS

1 ‘‘SEC. 2788. APPLICATION FOR ASSISTANCE; STATE PLAN.

2 ‘‘For purposes of section 2785, an application is in

3 accordance with this section if—

4 ‘‘(1) the application is submitted not later than

5 the date specified by the Secretary;

6 ‘‘(2) the application contains each funding

7 agreement described in this subtitle;

8 ‘‘(3) the application contains a State plan de9 scribing the purposes for which the award is to be

10 expended in the State, including a description of the

11 manner in which the applicant will comply with each

12 such funding agreement; and

13 ‘‘(4) the application is in such form, is made in

14 such manner, and contains such agreements, assur15 ances, and information as the Secretary determines

16 to be necessary to carry out this subtitle.

17 ‘‘SEC. 2789. DETERMINATION OF AMOUNT OF ALLOTMENT.

18 ‘‘(a) IN GENERAL.—For purposes of section 2785,

19 the allotment under this section with respect to a State

20 for a fiscal year is the sum of the respective amounts de21 termined for the State under subsection (b) and sub22 section (c).

23 ‘‘(b) AMOUNT RELATING TO POPULATION.—For pur24 poses of subsection (a), the amount determined under this

25 subsection is the product of—
119

•S 308 IS

1 ‘‘(1) an amount equal to 50 percent of the

2 amount appropriated under section 2784 for the fis3 cal year and available for awards under section

4 2785; and

5 ‘‘(2) the percentage constituted by the ratio

6 of—

7 ‘‘(A) the number of individuals residing in

8 the State involved; to

9 ‘‘(B) the sum of the respective amounts

10 determined for each State under subparagraph

11 (A).

12 ‘‘(c) AMOUNT RELATING TO POVERTY LEVEL.—For

13 purposes of subsection (a), the amount determined under

14 this subsection is the product of—

15 ‘‘(1) the amount determined under subsection

16 (b)(1); and

17 ‘‘(2) the percentage constituted by the ratio

18 of—

19 ‘‘(A) the number of individuals residing in

20 the State whose income is at or below an

21 amount equal to 200 percent of the official pov22 erty line; to

23 ‘‘(B) the sum of the respective amounts

24 determined for each State under subparagraph

25 (A).
120

•S 308 IS

1 ‘‘SEC. 2790. QUALITY ASSURANCE; COST-EFFECTIVENESS.

2 ‘‘The Secretary shall establish guidelines for assuring

3 the quality of community health advisor programs (includ4 ing quality in the training of community health advisors)

5 and for assuring the cost-effectiveness of the programs.

6 A funding agreement for an award under section 2785 is

7 that the applicant involved will carry out such programs

8 in accordance with the guidelines.

9 ‘‘SEC. 2791. EVALUATIONS; TECHNICAL ASSISTANCE.

10 ‘‘(a) EVALUATIONS.—The Secretary shall conduct

11 evaluations of community health advisor programs and

12 disseminate information developed as result of the evalua13 tions to the States. In conducting such evaluations, the

14 Secretary shall determine whether the programs are in

15 compliance with the guidelines established under section

16 2790.

17 ‘‘(b) TECHNICAL ASSISTANCE.—The Secretary may

18 provide technical assistance to recipients of awards under

19 section 2785 with respect to the planning, development,

20 and operation of community health advisor programs.

21 ‘‘(c) GRANTS AND CONTRACTS.—The Secretary may

22 carry out this section directly or through grants, coopera23 tive agreements, or contracts.

24 ‘‘(d) LIMITATION ON EXPENDITURES.—Of the

25 amounts appropriated under section 2784 for a fiscal year,
121

•S 308 IS

1 the Secretary may reserve not more than 10 percent for

2 carrying out this section.

3 ‘‘SEC. 2792. RULE OF CONSTRUCTION REGARDING PRO4 GRAMS OF INDIAN HEALTH SERVICE.

5 ‘‘This subtitle may not be construed as requiring the

6 Secretary to modify or terminate the program carried out

7 by the Director of the Indian Health Service and des8 ignated by such Director as the Community Health Rep9 resentative Program. The Secretary shall ensure that sup10 port for such Program is not supplanted by awards under

11 section 2785. In communities in which both such Program

12 and a community health advisor program are being carried

13 out, the Secretary shall ensure that the community health

14 advisor program works in cooperation with, and as a com15 plement to, the Community Health Representative Pro16 gram.

17 ‘‘SEC. 2793. DEFINITIONS.

18 ‘‘For purposes of this subtitle:

19 ‘‘(1) The term ‘authorized program services’,

20 with respect to a community health advisor program,

21 means the services specified in section 2786(b)(2).

22 ‘‘(2) The term ‘community health advisor’ has

23 the meaning given such term in section 2786(d).
122

•S 308 IS

1 ‘‘(3) The term ‘community health advisor pro2 gram’ means a program carried out under section

3 2786(b).

4 ‘‘(4) The term ‘financial assistance’, with re5 spect to an award under section 2785, means a

6 grant, cooperative agreement, or a contract.

7 ‘‘(5) The term ‘funding agreement’ means an

8 agreement required as a condition of receiving an

9 award under section 2785.

10 ‘‘(6) The term ‘official poverty line’ means the

11 official poverty line established by the Director of

12 the Office of Management and Budget and revised

13 by the Secretary in accordance with section 673(2)

14 of the Omnibus Budget Reconciliation Act of 1981,

15 which poverty line is applicable the size of the family

16 involved.

17 ‘‘(7) The term ‘State involved’, with respect to

18 an applicant for an award under section 2785,

19 means the State in which the applicant is to carry

20 out a community health advisor program.

21 ‘‘SEC. 2794. EFFECT OF INSUFFICIENT APPROPRIATIONS

22 FOR MINIMUM ALLOTMENTS.

23 ‘‘(a) IN GENERAL.—If the amounts made available

24 under section 2784 for a fiscal year are insufficient for

25 providing each State (or entity designated by the State
123

•S 308 IS

1 pursuant to section 2785, as the case may be) with an

2 award under section 2785 in an amount equal to or great3 er than the amount specified in section 2789(a)(2), the

4 Secretary shall, from such amounts as are made available

5 under subsection (a), make such awards on a discretionary

6 basis.

7 ‘‘(b) RULE OF CONSTRUCTION.—For purposes of

8 subsection (a), awards under section 2785 are made on

9 a discretionary basis if the Secretary determines which

10 States (or entities designated by States pursuant to such

11 section, as the case may be) are to receive such awards,

12 subject to meeting the requirements of this subtitle for

13 such an award, and the Secretary determines the amount

14 of such awards.

15 ‘‘Subtitle F—General Provisions

16 ‘‘SEC. 2798. REQUIREMENT REGARDING ACCREDITATION

17 OF SCHOOLS, DEPARTMENTS, AND PRO18 GRAMS.

19 ‘‘Except as indicated otherwise in this title:

20 ‘‘(1) A reference in this title to a school of pub21 lic health, a school of nursing, or any other entity

22 providing education or training in a health profes23 sion (whether a school, department, program, or

24 other entity) is a reference to the entity as defined

25 under section 799 or 853.
124

•S 308 IS

1 ‘‘(2) If an entity is not defined in either of such

2 sections, the reference in this title to the entity has

3 the meaning provided by the Secretary, except that

4 the Secretary shall require for purposes of this title

5 that the entity be accredited for the provision of the

6 education or training involved.

7 ‘‘SEC. 2799. RELATION TO OTHER FUNDS.

8 ‘‘Notwithstanding any other provision of law, the au9 thorizations of appropriations established in this title are

10 in addition to any other authorizations of appropriations

11 that are available for the purposes described with respect

12 to such appropriations in this title.

13 ‘‘SEC. 2799A. DEFINITIONS.

14 ‘‘(a) IN GENERAL.—For purposes of this title:

15 ‘‘(1) The term ‘Healthy People 2000 Objectives’

16 means the objectives established by the Secretary to17 ward the goals of increasing the span of healthy life,

18 reducing health disparities among various popu19 lations, and providing access to preventive services,

20 which objectives apply to the health status of the

21 population of the United States for the year 2000.

22 ‘‘(2) The term ‘medically underserved commu23 nity’ means—

24 ‘‘(A) a community that has a substantial

25 number of individuals who are members of a
125

•S 308 IS

1 medically underserved population, as defined in

2 section 330; or

3 ‘‘(B) a community a significant portion of

4 which is a health professional shortage area

5 designated under section 332.’’.

6 TITLE IV—MEDICAL AND

7 HEALTH RESEARCH

8 SEC. 4001. SHORT TITLE.

9 This title may be cited as the ‘‘Medical and Health

10 Research Act of 1995’’.

11 SEC. 4002. FINDINGS.

12 The Congress finds the following:

13 (1) Nearly 4 of 5 peer reviewed research

14 projects deemed worthy of funding by the National

15 Institutes of Health are not funded.

16 (2) Less than 2 percent of the nearly one tril17 lion dollars our Nation spends on health care is de18 voted to health research, while the defense industry

19 spends 15 percent of its budget on research.

20 (3) Public opinion surveys have shown that

21 Americans want more Federal resources put into

22 health research and support by having a portion of

23 their health insurance premiums set aside for this

24 purpose.
126

•S 308 IS

1 (4) Ample evidence exists to demonstrate that

2 health research has improved the quality of health

3 care in the United States. Advances such as the de4 velopment of vaccines, the cure of many childhood

5 cancers, drugs that effectively treat a host of dis6 eases and disorders, a process to protect our Na7 tion’s blood supply from the HIV virus, progress

8 against cardiovasculor disease including heart attack

9 and stroke, and new strategies for the early detec10 tion and treatment of diseases such as colon, breast,

11 and prostate cancer clearly demonstrates the bene12 fits of health research.

13 (5) Among the most effective methods to con14 trol health care costs are prevention and cure of dis15 ease and disability, thus, health research which holds

16 the promise of cure and prevention of disease and

17 disability is a critical component of any comprehen18 sive health care reform plan.

19 (6) The state of our Nation’s research facilities

20 at the National Institutes of Health and at univer21 sities is deteriorating significantly. Renovation and

22 repair of these facilities are badly needed to main23 tain and improve the quality of research.

24 (7) Because the Omnibus Budget Reconciliation

25 Act of 1993 freezes discretionary spending for the
127

•S 308 IS

1 next 5 years, the Nation’s investment in health re2 search through the National Institutes of Health is

3 likely to decline in real terms unless corrective legis4 lative action is taken.

5 (8) A health research fund is needed to main6 tain our Nation’s commitment to health research

7 and to increase the percentage of approved projects

8 which receive funding at the National Institutes of

9 Health to at least 33 percent.

10 SEC. 4003. NATIONAL FUND FOR HEALTH RESEARCH.

11 (a) ESTABLISHMENT.—There is established in the

12 Treasury of the United States an account, to be known

13 as the ‘‘National Fund for Health Research’’ (hereafter

14 referred to in this section as the ‘‘Fund’’), consisting of

15 such amounts as are transferred to the Fund under sub16 section (b) and any interest earned on investment of

17 amounts in the Fund.

18 (b) TRANSFERS TO FUND.—

19 (1) IN GENERAL.—With respect to each of the

20 5 full calendar years beginning after the date of en21 actment of this Act, the Secretary of the Treasury

22 shall transfer to the Fund an amount equal to the

23 applicable amount under paragraph (2).

24 (2) APPLICABLE AMOUNT.—The applicable

25 amount under this paragraph is—
128

•S 308 IS

1 (A) with respect to amounts in the Health

2 Care Reform Trust Fund established under sec3 tion 9551(a)(2)(A) of the Internal Revenue

4 Code of 1986, $1,200,000,000 for each cal5 endar year described in paragraph (1); and

6 (B) with respect to amounts received in

7 the Treasury under section 6097 of the Internal

8 Revenue Code of 1986, 100 percent of the

9 amounts received under such section in each

10 calendar year described in paragraph (1).

11 (3) DESIGNATION OF OVERPAYMENTS AND CON12 TRIBUTIONS.—

13 (A) IN GENERAL.—Subchapter A of chap14 ter 61 of the Internal Revenue Code of 1986

15 (relating to returns and records) is amended by

16 adding at the end the following new part:

17 ‘‘PART IX—DESIGNATION OF OVERPAYMENTS

18 AND CONTRIBUTIONS FOR THE NATIONAL

19 FUND FOR HEALTH RESEARCH

‘‘Sec. 6097. Amounts for the National Fund for Health Research.

20 ‘‘SEC. 6097. AMOUNTS FOR THE NATIONAL FUND FOR

21 HEALTH RESEARCH.

22 ‘‘(a) IN GENERAL.—Every individual (other than a

23 nonresident alien) may designate that—
129

•S 308 IS

1 ‘‘(1) a portion (not less than $1) of any over2 payment of the tax imposed by chapter 1 for the

3 taxable year, and

4 ‘‘(2) a cash contribution (not less than $1),

5 be paid over to the National Fund for Health Research

6 established under section 4003 of the Health Partnership

7 Act of 1995. In the case of a joint return of a husband

8 and wife, each spouse may designate one-half of any such

9 overpayment of tax (not less than $2).

10 ‘‘(b) MANNER AND TIME OF DESIGNATION.—Any

11 designation under subsection (a) may be made with re12 spect to any taxable year only at the time of filing the

13 original return of the tax imposed by chapter 1 for such

14 taxable year. Such designation shall be made either on the

15 1st page of the return or on the page bearing the tax16 payer’s signature.

17 ‘‘(c) OVERPAYMENTS TREATED AS REFUNDED.—For

18 purposes of this section, any overpayment of tax des19 ignated under subsection (a) shall be treated as being re20 funded to the taxpayer as of the last day prescribed for

21 filing the return of tax imposed by chapter 1 (determined

22 with regard to extensions) or, if later, the date the return

23 is filed.

24 ‘‘(d) DESIGNATED AMOUNTS NOT DEDUCTIBLE.—

25 No amount designated pursuant to subsection (a) shall be
130

•S 308 IS

1 allowed as a deduction under section 170 or any other sec2 tion for any taxable year.

3 ‘‘(e) TERMINATION.—This section shall not apply to

4 taxable years beginning in a calendar year after a deter5 mination by the Secretary that the sum of all designations

6 under subsection (a) for taxable years beginning in the

7 second and third calendar years preceding the calendar

8 year is less than $5,000,000.’’.

9 (B) CLERICAL AMENDMENT.—The table of

10 parts for subchapter A of chapter 61 of such

11 Code is amended by adding at the end the fol12 lowing new item:

‘‘Part IX. Designation of overpayments and contributions for the

National Fund for Health Research.’’.

13 (C) EFFECTIVE DATE.—The amendments

14 made by this paragraph shall apply to taxable

15 years beginning after December 31, 1995.

16 (c) EXPENDITURES FROM FUND.—

17 (1) IN GENERAL.—The Secretary of the Treas18 ury shall pay annually, within 30 days after the

19 President signs an appropriations Act for the De20 partments of Labor, Health and Human Services,

21 and Education and related agencies, or by the end

22 of the first quarter of the fiscal year, to the Sec23 retary of Health and Human Services on behalf of

24 the National Institutes of Health, an amount equal
131

•S 308 IS

1 to the amount in the National Fund for Health Re2 search at the time of such payment, to enable the

3 Secretary to carry out the purpose of section 404F

4 of the Public Health Service Act, less any adminis5 trative expenses which may be paid under paragraph

6 (3).

7 (2) PURPOSES FOR EXPENDITURES FROM

8 FUND.—Part A of title IV of the Public Health

9 Service Act (42 U.S.C. 281 et seq.) is amended by

10 adding at the end the following new section:

11 ‘‘SEC. 404F. EXPENDITURES FROM THE NATIONAL FUND

12 FOR HEALTH RESEARCH.

13 ‘‘(a) IN GENERAL.—From amounts received for any

14 fiscal year from the National Fund for Health Research,

15 the Secretary of Health and Human Services shall distrib16 ute—

17 ‘‘(1) 2 percent of such amounts during any fis18 cal year to the Office of the Director of the National

19 Institutes of Health to be allocated at the Director’s

20 discretion for the following activities:

21 ‘‘(A) for carrying out the responsibilities of

22 the Office of the Director, National Institutes

23 of Health, including the Office of Research on

24 Women’s Health and the Office of Research on

25 Minority Health, the Office of the Alternative
132

•S 308 IS

1 Medicine and the Office of Rare Diseases Re2 search; and

3 ‘‘(B) for construction and acquisition of

4 equipment for or facilities of or used by the Na5 tional Institutes of Health;

6 ‘‘(2) 2 percent of such amounts for transfer to

7 the National Center for Research Resources to carry

8 out section 1502 of the National Institutes of

9 Health Revitalization Act of 1993 concerning Bio10 medical and Behavioral Research Facilities;

11 ‘‘(3) 1 percent of such amounts during any fis12 cal year for carrying out section 301 and part D of

13 title IV with respect to health information commu14 nications; and

15 ‘‘(4) the remainder of such amounts during any

16 fiscal year to member institutes of the National In17 stitutes of Health and centers in the same propor18 tion to the total amount received under this section,

19 as the amount of annual appropriations under ap20 propriations Acts for each member institute and cen21 ter for the fiscal year bears to the total amount of

22 appropriations under appropriations Acts for all

23 member institutes and centers of the National Insti24 tutes of Health for the fiscal year.
133

•S 308 IS

1 ‘‘(b) PLANS OF ALLOCATION.—The amounts trans2 ferred under subsection (a) shall be allocated by the Direc3 tor of NIH or the various directors of the institutes and

4 centers, as the case may be, pursuant to allocation plans

5 developed by the various advisory councils to such direc6 tors, after consultation with such directors.’’.

7 (3) ADMINISTRATIVE EXPENSES.—Amounts in

8 the National Fund for Health Research shall be

9 available to pay the administrative expenses of the

10 Department of the Treasury directly allocable to—

11 (A) modifying the individual income tax re12 turn forms to carry out section 6097 of the In13 ternal Revenue Code of 1986;

14 (B) carrying out this section with respect

15 to such Fund; and

16 (C) processing amounts received under this

17 section and transferring such amounts to such

18 Fund.

19 (4) TRIGGER AND RELEASE OF FUND MON20 IES.—No expenditures shall be made pursuant to

21 section 4003(c) during any fiscal year in which the

22 annual amount appropriated for the National Insti23 tutes of Health is less than the amount so appro24 priated for the prior fiscal year.
134

•S 308 IS

1 (d) BUDGET ENFORCEMENT.—Amounts contained in

2 the National Fund for Health Research shall be excluded

3 from, and shall not be taken into account for purposes

4 of, any budget enforcement procedures under the Congres5 sional Budget Act of 1974 or the Balanced Budget Emer6 gency Deficit Control Act of 1985.

7 TITLE V—FRAUD AND ABUSE

8 SEC. 5001. SHORT TITLE.

9 This Act may be cited as the ‘‘Health Fraud and

10 Abuse Reduction Act of 1995’’.

11 Subtitle A—All-Payer Fraud and

12 Abuse Control Program

13 SEC. 5101. ALL-PAYER FRAUD AND ABUSE CONTROL PRO14 GRAM.

15 (a) ESTABLISHMENT OF PROGRAM.—

16 (1) IN GENERAL.—Not later than January 1,

17 1996, the Secretary of Health and Human Services

18 (in this subtitle referred to as the ‘‘Secretary’’), act19 ing through the Office of the Inspector General of

20 the Department of Health and Human Services, and

21 the Attorney General shall establish a program—

22 (A) to coordinate Federal, State, and local

23 law enforcement programs to control fraud and

24 abuse with respect to the delivery of and pay25 ment for health care in the United States,
135

•S 308 IS

1 (B) to conduct investigations, audits, eval2 uations, and inspections relating to the delivery

3 of and payment for health care in the United

4 States, and

5 (C) to facilitate the enforcement of the

6 provisions of sections 1128, 1128A, and 1128B

7 of the Social Security Act and other statutes

8 applicable to health care fraud and abuse.

9 (2) COORDINATION WITH HEALTH PLANS.—In

10 carrying out the program established under para11 graph (1), the Secretary and the Attorney General

12 shall consult with, and arrange for the sharing of

13 data with representatives of health plans.

14 (3) REGULATIONS.—

15 (A) IN GENERAL.—The Secretary and the

16 Attorney General shall by regulation establish

17 standards to carry out the program under para18 graph (1).

19 (B) INFORMATION STANDARDS.—

20 (i) IN GENERAL.—Such standards

21 shall include standards relating to the fur22 nishing of information by health plans,

23 providers, and others to enable the Sec24 retary and the Attorney General to carry
136

•S 308 IS

1 out the program (including coordination

2 with health plans under paragraph (2)).

3 (ii) CONFIDENTIALITY.—Such stand4 ards shall include procedures to assure

5 that such information is provided and uti6 lized in a manner that appropriately pro7 tects the confidentiality of the information

8 and the privacy of individuals receiving

9 health care services and items.

10 (iii) QUALIFIED IMMUNITY FOR PRO11 VIDING INFORMATION.—The provisions of

12 section 1157(a) of the Social Security Act

13 (relating to limitation on liability) shall

14 apply to a person providing information to

15 the Secretary or the Attorney General in

16 conjunction with their performance of du17 ties under this section.

18 (C) DISCLOSURE OF OWNERSHIP INFOR19 MATION.—

20 (i) IN GENERAL.—Such standards

21 shall include standards relating to the dis22 closure of ownership information described

23 in clause (ii) by any entity providing health

24 care services and items.
137

•S 308 IS

1 (ii) OWNERSHIP INFORMATION DE2 SCRIBED.—The ownership information de3 scribed in this clause includes—

4 (I) a description of such items

5 and services provided by such entity;

6 (II) the names and unique physi7 cian identification numbers of all phy8 sicians with a financial relationship

9 (as defined in section 1877(a)(2) of

10 the Social Security Act) with such en11 tity;

12 (III) the names of all other indi13 viduals with such an ownership or in14 vestment interest in such entity; and

15 (IV) any other ownership and re16 lated information required to be dis17 closed by such entity under section

18 1124 or section 1124A of the Social

19 Security Act, except that the Sec20 retary shall establish procedures

21 under which the information required

22 to be submitted under this subclause

23 will be reduced with respect to health

24 care provider entities that the Sec25 retary determines will be unduly bur-
138

•S 308 IS

1 dened if such entities are required to

2 comply fully with this subclause.

3 (4) AUTHORIZATION OF APPROPRIATIONS FOR

4 INVESTIGATORS AND OTHER PERSONNEL.—In addi5 tion to any other amounts authorized to be appro6 priated to the Secretary, the Attorney General, the

7 Director of the Federal Bureau of Investigation, and

8 the Inspectors General of the Departments of De9 fense, Labor, and Veterans Affairs and of the Office

10 of Personnel Management, for health care anti-fraud

11 and abuse activities for a fiscal year, there are au12 thorized to be appropriated additional amounts,

13 from the Health Care Fraud and Abuse Account de14 scribed in subsection (b) of this section, as may be

15 necessary to enable the Secretary, the Attorney Gen16 eral, and such Inspectors General to conduct inves17 tigations and audits of allegations of health care

18 fraud and abuse and otherwise carry out the pro19 gram established under paragraph (1) in a fiscal

20 year.

21 (5) ENSURING ACCESS TO DOCUMENTATION.—

22 The Inspector General of the Department of Health

23 and Human Services is authorized to exercise the

24 authority described in paragraphs (4) and (5) of sec25 tion 6 of the Inspector General Act of 1978 (relating
139

•S 308 IS

1 to subpoenas and administration of oaths) with re2 spect to the activities under the all-payer fraud and

3 abuse control program established under this sub4 section to the same extent as such Inspector General

5 may exercise such authorities to perform the func6 tions assigned by such Act.

7 (6) AUTHORITY OF INSPECTOR GENERAL.—

8 Nothing in this title shall be construed to diminish

9 the authority of any Inspector General, including

10 such authority as provided in the Inspector General

11 Act of 1978.

12 (7) HEALTH PLAN DEFINED.—For the purposes

13 of this subsection, the term ‘‘health plan’’ shall have

14 the meaning given such term in section 1128(i) of

15 the Social Security Act.

16 (b) HEALTH CARE FRAUD AND ABUSE CONTROL AC17 COUNT.—

18 (1) ESTABLISHMENT.—

19 (A) IN GENERAL.—There is hereby estab20 lished an account to be known as the ‘‘Health

21 Care Fraud and Abuse Control Account’’ (in

22 this section referred to as the ‘‘Anti-Fraud Ac23 count’’). The Anti-Fraud Account shall consist

24 of—
140

•S 308 IS

1 (i) such gifts and bequests as may be

2 made as provided in subparagraph (B);

3 (ii) such amounts as may be deposited

4 in the Anti-Fraud Account as provided in

5 subsection (a)(4), sections 5441(b) and

6 5442(b), and title XI of the Social Security

7 Act; and

8 (iii) such amounts as are transferred

9 to the Anti-Fraud Account under subpara10 graph (C).

11 (B) AUTHORIZATION TO ACCEPT GIFTS.—

12 The Anti-Fraud Account is authorized to accept

13 on behalf of the United States money gifts and

14 bequests made unconditionally to the Anti15 Fraud Account, for the benefit of the Anti16 Fraud Account or any activity financed through

17 the Anti-Fraud Account.

18 (C) TRANSFER OF AMOUNTS.—

19 (i) IN GENERAL.—The Secretary of

20 the Treasury shall transfer to the Anti21 Fraud Account an amount equal to the

22 sum of the following:

23 (I) Criminal fines imposed in

24 cases involving a Federal health care

25 offense (as defined in section
141

•S 308 IS

1 982(a)(6)(B) of title 18, United

2 States Code).

3 (ii) Administrative penalties and as4 sessments imposed under titles XI, XVIII,

5 and XIX of the Social Security Act (except

6 as otherwise provided by law).

7 (iii) Amounts resulting from the for8 feiture of property by reason of a Federal

9 health care offense.

10 (iv) Penalties and damages imposed

11 under the False Claims Act (31 U.S.C.

12 3729 et seq.), in cases involving claims re13 lated to the provision of health care items

14 and services (other than funds awarded to

15 a relator or for restitution).

16 (2) USE OF FUNDS.—

17 (A) IN GENERAL.—Amounts in the Anti18 Fraud Account shall be available to carry out

19 the health care fraud and abuse control pro20 gram established under subsection (a) (includ21 ing the administration of the program), and

22 may be used to cover costs incurred in operat23 ing the program, including costs (including

24 equipment, salaries and benefits, and travel and

25 training) of—
142

•S 308 IS

1 (i) prosecuting health care matters

2 (through criminal, civil, and administrative

3 proceedings);

4 (ii) investigations;

5 (iii) financial and performance audits

6 of health care programs and operations;

7 (iv) inspections and other evaluations;

8 and

9 (v) provider and consumer education

10 regarding compliance with the provisions of

11 this subtitle.

12 (B) FUNDS USED TO SUPPLEMENT AGEN13 CY APPROPRIATIONS.—It is intended that dis14 bursements made from the Anti-Fraud Account

15 to any Federal agency be used to increase and

16 not supplant the recipient agency’s appro17 priated operating budget.

18 (3) ANNUAL REPORT.—The Secretary and the

19 Attorney General shall submit jointly an annual re20 port to Congress on the amount of revenue which is

21 generated and disbursed by the Anti-Fraud Account

22 in each fiscal year.

23 (4) USE OF FUNDS BY INSPECTOR GENERAL.—

24 (A) REIMBURSEMENTS FOR INVESTIGA25 TIONS.—The Inspector General is authorized to
143

•S 308 IS

1 receive and retain for current use reimburse2 ment for the costs of conducting investigations,

3 when such restitution is ordered by a court, vol4 untarily agreed to by the payer, or otherwise.

5 (B) CREDITING.—Funds received by the

6 Inspector General or the Inspectors General of

7 the Departments of Defense, Labor, and Veter8 ans Affairs and of the Office of Personnel Man9 agement, as reimbursement for costs of con10 ducting investigations shall be deposited to the

11 credit of the appropriation from which initially

12 paid, or to appropriations for similar purposes

13 currently available at the time of deposit, and

14 shall remain available for obligation for 1 year

15 from the date of their deposit.

16 SEC. 5102. APPLICATION OF CERTAIN FEDERAL HEALTH

17 ANTI-FRAUD AND ABUSE SANCTIONS TO

18 FRAUD AND ABUSE AGAINST ANY HEALTH

19 PLAN.

20 (a) CRIMES.—

21 (1) SOCIAL SECURITY ACT.—Section 1128B of

22 the Social Security Act (42 U.S.C. 1320a–7b) is

23 amended as follows:

24 (A) In the heading, by adding at the end

25 the following: ‘‘OR HEALTH PLANS’’.
144

•S 308 IS

1 (B) In subsection (a)(1)—

2 (i) by striking ‘‘title XVIII or’’ and

3 inserting ‘‘title XVIII,’’, and

4 (ii) by adding at the end the follow5 ing: ‘‘or a health plan (as defined in sec6 tion 1128(i)),’’.

7 (C) In subsection (a)(5), by striking ‘‘title

8 XVIII or a State health care program’’ and in9 serting ‘‘title XVIII, a State health care pro10 gram, or a health plan’’.

11 (D) In the second sentence of subsection

12 (a)—

13 (i) by inserting after ‘‘title XIX’’ the

14 following: ‘‘or a health plan’’, and

15 (ii) by inserting after ‘‘the State’’ the

16 following: ‘‘or the plan’’.

17 (2) IDENTIFICATION OF COMMUNITY SERVICE

18 OPPORTUNITIES.—Section 1128B of such Act (42

19 U.S.C. 1320a–7b) is further amended by adding at

20 the end the following new subsection:

21 ‘‘(f) The Secretary may—

22 ‘‘(1) in consultation with State and local health

23 care officials, identify opportunities for the satisfac24 tion of community service obligations that a court
145

•S 308 IS

1 may impose upon the conviction of an offense under

2 this section, and

3 ‘‘(2) make information concerning such oppor4 tunities available to Federal and State law enforce5 ment officers and State and local health care

6 officials.’’.

7 (b) HEALTH PLAN DEFINED.—Section 1128 of the

8 Social Security Act (42 U.S.C. 1320a–7) is amended by

9 redesignating subsection (i) as subsection (j) and by in10 serting after subsection (h) the following new subsection:

11 ‘‘(i) HEALTH PLAN DEFINED.—For purposes of sec12 tions 1128A and 1128B, the term ‘health plan’ means a

13 plan that provides health benefits, whether through di14 rectly, through insurance, or otherwise, and includes a pol15 icy of health insurance, a contract of a service benefit or16 ganization, or a membership agreement with a health

17 maintenance organization or other prepaid health plan,

18 and also includes an employee welfare benefit plan or a

19 multiple employer welfare plan (as such terms are defined

20 in section 3 of the Employee Retirement Income Security

21 Act of 1974).’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall take effect on January 1, 1996.
146

•S 308 IS

1 Subtitle B—Revisions to Current

2 Sanctions for Fraud and Abuse

3 SEC. 5201. MANDATORY EXCLUSION FROM PARTICIPATION

4 IN MEDICARE AND STATE HEALTH CARE PRO5 GRAMS.

6 (a) INDIVIDUAL CONVICTED OF FELONY RELATING

7 TO FRAUD.—

8 (1) IN GENERAL.—Section 1128(a) of the So9 cial Security Act (42 U.S.C. 1320a–7(a)) is amend10 ed by adding at the end the following new para11 graph:

12 ‘‘(3) FELONY CONVICTION RELATING TO

13 FRAUD.—Any individual or entity that has been con14 victed after the date of the enactment of the Health

15 Care Fraud Prevention Act of 1995, under Federal

16 or State law, in connection with the delivery of a

17 health care item or service or with respect to any act

18 or omission in a program (other than those specifi19 cally described in paragraph (1)) operated by or fi20 nanced in whole or in part by any Federal, State, or

21 local government agency, of a criminal offense con22 sisting of a felony relating to fraud, theft, embezzle23 ment, breach of fiduciary responsibility, or other fi24 nancial misconduct.’’.
147

•S 308 IS

1 (2) CONFORMING AMENDMENT.—Section

2 1128(b)(1) of such Act (42 U.S.C. 1320a–7(b)(1))

3 is amended—

4 (A) in the heading, by striking ‘‘CONVIC5 TION’’ and inserting ‘‘MISDEMEANOR CONVIC6 TION’’; and

7 (B) by striking ‘‘criminal offense’’ and in8 serting ‘‘criminal offense consisting of a mis9 demeanor’’.

10 (b) INDIVIDUAL CONVICTED OF FELONY RELATING

11 TO CONTROLLED SUBSTANCE.—

12 (1) IN GENERAL.—Section 1128(a) of the So13 cial Security Act (42 U.S.C. 1320a–7(a)), as amend14 ed by subsection (a), is amended by adding at the

15 end the following new paragraph:

16 ‘‘(4) FELONY CONVICTION RELATING TO CON17 TROLLED SUBSTANCE.—Any individual or entity

18 that has been convicted after the date of the enact19 ment of the Health Care Fraud Prevention Act of

20 1995, under Federal or State law, of a criminal of21 fense consisting of a felony relating to the unlawful

22 manufacture, distribution, prescription, or dispens23 ing of a controlled substance.’’.
148

•S 308 IS

1 (2) CONFORMING AMENDMENT.—Section

2 1128(b)(3) of such Act (42 U.S.C. 1320a–7(b)(3))

3 is amended—

4 (A) in the heading, by striking ‘‘CONVIC5 TION’’ and inserting ‘‘MISDEMEANOR CONVIC6 TION’’; and

7 (B) by striking ‘‘criminal offense’’ and in8 serting ‘‘criminal offense consisting of a mis9 demeanor’’.

10 SEC. 5202. ESTABLISHMENT OF MINIMUM PERIOD OF EX11 CLUSION FOR CERTAIN INDIVIDUALS AND

12 ENTITIES SUBJECT TO PERMISSIVE EXCLU13 SION FROM MEDICARE AND STATE HEALTH

14 CARE PROGRAMS.

15 Section 1128(c)(3) of the Social Security Act (42

16 U.S.C. 1320a–7(c)(3)) is amended by adding at the end

17 the following new subparagraphs:

18 ‘‘(D) In the case of an exclusion of an individual or

19 entity under paragraph (1), (2), or (3) of subsection (b),

20 the period of the exclusion shall be 3 years, unless the

21 Secretary determines in accordance with published regula22 tions that a shorter period is appropriate because of miti23 gating circumstances or that a longer period is appro24 priate because of aggravating circumstances.
149

•S 308 IS

1 ‘‘(E) In the case of an exclusion of an individual or

2 entity under subsection (b)(4) or (b)(5), the period of the

3 exclusion shall not be less than the period during which

4 the individual’s or entity’s license to provide health care

5 is revoked, suspended, or surrendered, or the individual

6 or the entity is excluded or suspended from a Federal or

7 State health care program.

8 ‘‘(F) In the case of an exclusion of an individual or

9 entity under subsection (b)(6)(B), the period of the exclu10 sion shall be not less than 1 year.’’.

11 SEC. 5203. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH

12 OWNERSHIP OR CONTROL INTEREST IN

13 SANCTIONED ENTITIES.

14 Section 1128(b) of the Social Security Act (42 U.S.C.

15 1320a–7(b)) is amended by adding at the end the follow16 ing new paragraph:

17 ‘‘(15) INDIVIDUALS CONTROLLING A SANC18 TIONED ENTITY.—Any individual who has a direct

19 or indirect ownership or control interest of 5 percent

20 or more, or an ownership or control interest (as de21 fined in section 1124(a)(3)) in, or who is an officer,

22 director, agent, or managing employee (as defined in

23 section 1126(b)) of, an entity—
150

•S 308 IS

1 ‘‘(A) that has been convicted of any of2 fense described in subsection (a) or in para3 graph (1), (2), or (3) of this subsection;

4 ‘‘(B) against which a civil monetary pen5 alty has been assessed under section 1128A; or

6 ‘‘(C) that has been excluded from partici7 pation under a program under title XVIII or

8 under a State health care program.’’.

9 SEC. 5204. SANCTIONS AGAINST PRACTITIONERS AND PER10 SONS FOR FAILURE TO COMPLY WITH STATU11 TORY OBLIGATIONS.

12 (a) MINIMUM PERIOD OF EXCLUSION FOR PRACTI13 TIONERS AND PERSONS FAILING TO MEET STATUTORY

14 OBLIGATIONS.—

15 (1) IN GENERAL.—The second sentence of sec16 tion 1156(b)(1) of the Social Security Act (42

17 U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘may

18 prescribe)’’ and inserting ‘‘may prescribe, except

19 that such period may not be less than 1 year)’’.

20 (2) CONFORMING AMENDMENT.—Section

21 1156(b)(2) of such Act (42 U.S.C. 1320c–5(b)(2)) is

22 amended by striking ‘‘shall remain’’ and inserting

23 ‘‘shall (subject to the minimum period specified in

24 the second sentence of paragraph (1)) remain’’.
151

•S 308 IS

1 (b) REPEAL OF ‘‘UNWILLING OR UNABLE’’ CONDI2 TION FOR IMPOSITION OF SANCTION.—Section 1156(b)(1)

3 of the Social Security Act (42 U.S.C. 1320c–5(b)(1)) is

4 amended—

5 (1) in the second sentence, by striking ‘‘and de6 termines’’ and all that follows through ‘‘such obliga7 tions,’’; and

8 (2) by striking the third sentence.

9 SEC. 5205. INTERMEDIATE SANCTIONS FOR MEDICARE

10 HEALTH MAINTENANCE ORGANIZATIONS.

11 (a) APPLICATION OF INTERMEDIATE SANCTIONS FOR

12 ANY PROGRAM VIOLATIONS.—

13 (1) IN GENERAL.—Section 1876(i)(1) of the

14 Social Security Act (42 U.S.C. 1395mm(i)(1)) is

15 amended by striking ‘‘the Secretary may terminate’’

16 and all that follows and inserting the following: ‘‘in

17 accordance with procedures established under para18 graph (9), the Secretary may at any time terminate

19 any such contract or may impose the intermediate

20 sanctions described in paragraph (6)(B) or (6)(C)

21 (whichever is applicable) on the eligible organization

22 if the Secretary determines that the organization—

23 ‘‘(A) has failed substantially to carry out

24 the contract;
152

•S 308 IS

1 ‘‘(B) is carrying out the contract in a man2 ner inconsistent with the efficient and effective

3 administration of this section; or

4 ‘‘(C) no longer substantially meets the ap5 plicable conditions of subsections (b), (c), (e),

6 and (f).’’.

7 (2) OTHER INTERMEDIATE SANCTIONS FOR

8 MISCELLANEOUS PROGRAM VIOLATIONS.—Section

9 1876(i)(6) of such Act (42 U.S.C. 1395mm(i)(6)) is

10 amended by adding at the end the following new

11 subparagraph:

12 ‘‘(C) In the case of an eligible organization for which

13 the Secretary makes a determination under paragraph (1)

14 the basis of which is not described in subparagraph (A),

15 the Secretary may apply the following intermediate sanc16 tions:

17 ‘‘(i) Civil money penalties of not more than

18 $25,000 for each determination under paragraph (1)

19 if the deficiency that is the basis of the determina20 tion has directly adversely affected (or has the sub21 stantial likelihood of adversely affecting) an individ22 ual covered under the organization’s contract.

23 ‘‘(ii) Civil money penalties of not more than

24 $10,000 for each week beginning after the initiation

25 of procedures by the Secretary under paragraph (9)
153

•S 308 IS

1 during which the deficiency that is the basis of a

2 determination under paragraph (1) exists.

3 ‘‘(iii) Suspension of enrollment of individuals

4 under this section after the date the Secretary noti5 fies the organization of a determination under para6 graph (1) and until the Secretary is satisfied that

7 the deficiency that is the basis for the determination

8 has been corrected and is not likely to recur.’’.

9 (3) PROCEDURES FOR IMPOSING SANCTIONS.—

10 Section 1876(i) of such Act (42 U.S.C. 1395mm(i))

11 is amended by adding at the end the following new

12 paragraph:

13 ‘‘(9) The Secretary may terminate a contract with an

14 eligible organization under this section or may impose the

15 intermediate sanctions described in paragraph (6) on the

16 organization in accordance with formal investigation and

17 compliance procedures established by the Secretary under

18 which—

19 ‘‘(A) the Secretary provides the organization

20 with the opportunity to develop and implement a

21 corrective action plan to correct the deficiencies that

22 were the basis of the Secretary’s determination

23 under paragraph (1);

24 ‘‘(B) in deciding whether to impose sanctions,

25 the Secretary considers aggravating factors such as
154

•S 308 IS

1 whether an entity has a history of deficiencies or has

2 not taken action to correct deficiencies the Secretary

3 has brought to their attention;

4 ‘‘(C) there are no unreasonable or unnecessary

5 delays between the finding of a deficiency and the

6 imposition of sanctions; and

7 ‘‘(D) the Secretary provides the organization

8 with reasonable notice and opportunity for hearing

9 (including the right to appeal an initial decision) be10 fore imposing any sanction or terminating the con11 tract.’’.

12 (4) CONFORMING AMENDMENTS.—Section

13 1876(i)(6)(B) of such Act (42 U.S.C.

14 1395mm(i)(6)(B)) is amended by striking the sec15 ond sentence.

16 (b) AGREEMENTS WITH PEER REVIEW ORGANIZA17 TIONS.—

18 (1) REQUIREMENT FOR WRITTEN AGREE19 MENT.—Section 1876(i)(7)(A) of the Social Security

20 Act (42 U.S.C. 1395mm(i)(7)(A)) is amended by

21 striking ‘‘an agreement’’ and inserting ‘‘a written

22 agreement’’.

23 (2) DEVELOPMENT OF MODEL AGREEMENT.—

24 Not later than July 1, 1996, the Secretary shall de25 velop a model of the agreement that an eligible orga-
155

•S 308 IS

1 nization with a risk-sharing contract under section

2 1876 of the Social Security Act must enter into with

3 an entity providing peer review services with respect

4 to services provided by the organization under sec5 tion 1876(i)(7)(A) of such Act.

6 (3) REPORT BY GAO.—

7 (A) STUDY.—The Comptroller General of

8 the United States shall conduct a study of the

9 costs incurred by eligible organizations with

10 risk-sharing contracts under section 1876(b) of

11 such Act of complying with the requirement of

12 entering into a written agreement with an en13 tity providing peer review services with respect

14 to services provided by the organization, to15 gether with an analysis of how information gen16 erated by such entities is used by the Secretary

17 to assess the quality of services provided by

18 such eligible organizations.

19 (B) REPORT TO CONGRESS.—Not later

20 than July 1, 1998, the Comptroller General

21 shall submit a report to the Committee on

22 Ways and Means and the Committee on Energy

23 and Commerce of the House of Representatives

24 and the Committee on Finance and the Special
156

•S 308 IS

1 Committee on Aging of the Senate on the study

2 conducted under subparagraph (A).

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall apply with respect to contract years be5 ginning on or after January 1, 1996.

6 SEC. 5206. EFFECTIVE DATE.

7 The amendments made by this subtitle shall take ef8 fect January 1, 1996.

9 Subtitle C—Civil Monetary

10 Penalties

11 SEC. 5301. CIVIL MONETARY PENALTIES.

12 (a) GENERAL CIVIL MONETARY PENALTIES.—Sec13 tion 1128A of the Social Security Act (42 U.S.C. 1320a–

14 7a) is amended as follows:

15 (1) In subsection (a)(1), by inserting ‘‘or of any

16 health plan (as defined in section 1128(i)),’’ after

17 ‘‘subsection (i)(1)),’’.

18 (2) In subsection (f)—

19 (A) by redesignating paragraph (3) as

20 paragraph (4); and

21 (B) by inserting after paragraph (2) the

22 following new paragraphs:

23 ‘‘(3) With respect to amounts recovered arising

24 out of a claim under a health plan, the portion of

25 such amounts as is determined to have been paid by
157

•S 308 IS

1 the plan shall be repaid to the plan, and the portion

2 of such amounts attributable to the amounts recov3 ered under this section by reason of the amendments

4 made by the Health Care Fraud Prevention Act of

5 1995 (as estimated by the Secretary) shall be depos6 ited into the Health Care Fraud and Abuse Control

7 Account established under section 101(b) of such

8 Act.’’.

9 (3) In subsection (i)—

10 (A) in paragraph (2), by inserting ‘‘or

11 under a health plan’’ before the period at the

12 end, and

13 (B) in paragraph (5), by inserting ‘‘or

14 under a health plan’’ after ‘‘or XX’’.

15 (b) EXCLUDED INDIVIDUAL RETAINING OWNERSHIP

16 OR CONTROL INTEREST IN PARTICIPATING ENTITY.—

17 Section 1128A(a) of the Social Security Act (42 U.S.C.

18 1320a–7a(a)) is amended—

19 (1) by striking ‘‘or’’ at the end of paragraph

20 (1)(D);

21 (2) by striking ‘‘, or’’ at the end of paragraph

22 (2) and inserting a semicolon;

23 (3) by striking the semicolon at the end of

24 paragraph (3) and inserting ‘‘; or’’; and
158

•S 308 IS

1 (4) by inserting after paragraph (3) the follow2 ing new paragraph:

3 ‘‘(4) in the case of a person who is not an orga4 nization, agency, or other entity, is excluded from

5 participating in a program under title XVIII or a

6 State health care program in accordance with this

7 subsection or under section 1128 and who, at the

8 time of a violation of this subsection, retains a direct

9 or indirect ownership or control interest of 5 percent

10 or more, or an ownership or control interest (as de11 fined in section 1124(a)(3)) in, or who is an officer,

12 director, agent, or managing employee (as defined in

13 section 1126(b)) of, an entity that is participating in

14 a program under title XVIII or a State health care

15 program;’’.

16 (c) MODIFICATIONS OF AMOUNTS OF PENALTIES

17 AND ASSESSMENTS.—Section 1128A(a) of the Social Se18 curity Act (42 U.S.C. 1320a–7a(a)), as amended by sub19 section (b), is amended in the matter following paragraph

20 (4)—

21 (1) by striking ‘‘$2,000’’ and inserting

22 ‘‘$10,000’’;

23 (2) by inserting ‘‘; in cases under paragraph

24 (4), $10,000 for each day the prohibited relationship
159

•S 308 IS

1 occurs’’ after ‘‘false or misleading information was

2 given’’; and

3 (3) by striking ‘‘twice the amount’’ and insert4 ing ‘‘3 times the amount’’.

5 (d) CLAIM FOR ITEM OR SERVICE BASED ON INCOR6 RECT CODING OR MEDICALLY UNNECESSARY SERV7 ICES.—Section 1128A(a)(1) of the Social Security Act (42

8 U.S.C. 1320a–7a(a)(1)) is amended—

9 (1) in subparagraph (A) by striking ‘‘claimed,’’

10 and inserting the following: ‘‘claimed, including any

11 person who repeatedly presents or causes to be pre12 sented a claim for an item or service that is based

13 on a code that the person knows or should know will

14 result in a greater payment to the person than the

15 code the person knows or should know is applicable

16 to the item or service actually provided,’’;

17 (2) in subparagraph (C), by striking ‘‘or’’ at

18 the end;

19 (3) in subparagraph (D), by striking ‘‘; or’’ and

20 inserting ‘‘, or’’; and

21 (4) by inserting after subparagraph (D) the fol22 lowing new subparagraph:

23 ‘‘(E) is for a medical or other item or serv24 ice that a person repeatedly knows or should

25 know is not medically necessary; or’’.
160

•S 308 IS

1 (e) PERMITTING SECRETARY TO IMPOSE CIVIL MON2 ETARY PENALTY.—Section 1128A(b) of the Social Secu3 rity Act (42 U.S.C. 1320a–7a(a)) is amended by adding

4 the following new paragraph:

5 ‘‘(3) Any person (including any organization,

6 agency, or other entity, but excluding a beneficiary

7 as defined in subsection (i)(5)) who the Secretary

8 determines has violated section 1128B(b) of this

9 title shall be subject to a civil monetary penalty of

10 not more than $10,000 for each such violation. In

11 addition, such person shall be subject to an assess12 ment of not more than twice the total amount of the

13 remuneration offered, paid, solicited, or received in

14 violation of section 1128B(b). The total amount of

15 remuneration subject to an assessment shall be cal16 culated without regard to whether some portion

17 thereof also may have been intended to serve a pur18 pose other than one proscribed by section

19 1128B(b).’’.

20 (f) SANCTIONS AGAINST PRACTITIONERS AND PER21 SONS FOR FAILURE TO COMPLY WITH STATUTORY OBLI22 GATIONS.—Section 1156(b)(3) of the Social Security Act

23 (42 U.S.C. 1320c–5(b)(3)) is amended by striking ‘‘the

24 actual or estimated cost’’ and inserting the following: ‘‘up

25 to $10,000 for each instance’’.
161

•S 308 IS

1 (g) PROCEDURAL PROVISIONS.—Section 1876(i)(6)

2 of such Act (42 U.S.C. 1395mm(i)(6)) is further amended

3 by adding at the end the following new subparagraph:

4 ‘‘(D) The provisions of section 1128A (other than

5 subsections (a) and (b)) shall apply to a civil money pen6 alty under subparagraph (A) or (B) in the same manner

7 as they apply to a civil money penalty or proceeding under

8 section 1128A(a).’’.

9 (h) EFFECTIVE DATE.—The amendments made by

10 this section shall take effect January 1, 1996.

11 (i) PROHIBITION AGAINST OFFERING INDUCEMENTS

12 TO INDIVIDUALS ENROLLED UNDER PROGRAMS OR

13 PLANS.—

14 (1) OFFER OF REMUNERATION.—Section

15 1128A(a) of the Social Security Act (42 U.S.C.

16 1320a–7a(a)) is amended—

17 (A) by striking ‘‘or’’ at the end of para18 graph (1)(D);

19 (B) by striking ‘‘, or’’ at the end of para20 graph (2) and inserting a semicolon;

21 (C) by striking the semicolon at the end of

22 paragraph (3) and inserting ‘‘; or’’; and

23 (D) by inserting after paragraph (3) the

24 following new paragraph:
162

•S 308 IS

1 ‘‘(4) offers to or transfers remuneration to any

2 individual eligible for benefits under title XVIII of

3 this Act, or under a State health care program (as

4 defined in section 1128(h)) that such person knows

5 or should know is likely to influence such individual

6 to order or receive from a particular provider, practi7 tioner, or supplier any item or service for which pay8 ment may be made, in whole or in part, under title

9 XVIII, or a State health care program;’’.

10 (2) REMUNERATION DEFINED.—Section

11 1128A(i) of such Act (42 U.S.C. 1320a–7a(i)) is

12 amended by adding the following new paragraph:

13 ‘‘(6) The term ‘remuneration’ includes the waiv14 er of coinsurance and deductible amounts (or any

15 part thereof), and transfers of items or services for

16 free or for other than fair market value. The term

17 ‘remuneration’ does not include—

18 ‘‘(A) the waiver of coinsurance and deduct19 ible amounts by a person, if—

20 ‘‘(i) the waiver is not offered as part

21 of any advertisement or solicitation;

22 ‘‘(ii) the person does not routinely

23 waive coinsurance or deductible amounts;

24 and

25 ‘‘(iii) the person—
163

•S 308 IS

1 ‘‘(I) waives the coinsurance and

2 deductible amounts after determining

3 in good faith that the individual is in

4 financial need;

5 ‘‘(II) fails to collect coinsurance

6 or deductible amounts after making

7 reasonable collection efforts; or

8 ‘‘(III) provides for any permis9 sible waiver as specified in section

10 1128B(b)(3) or in regulations issued

11 by the Secretary;

12 ‘‘(B) differentials in coinsurance and de13 ductible amounts as part of a benefit plan de14 sign as long as the differentials have been dis15 closed in writing to all third party payors to

16 whom claims are presented and as long as the

17 differentials meet the standards as defined in

18 regulations promulgated by the Secretary; or

19 ‘‘(C) incentives given to individuals to pro20 mote the delivery of preventive care as deter21 mined by the Secretary in regulations.’’.
164

•S 308 IS

1 Subtitle D—Payments for State

2 Health Care Fraud Control Units

3 SEC. 5401. ESTABLISHMENT OF STATE FRAUD UNITS.

4 (a) ESTABLISHMENT OF HEALTH CARE FRAUD AND

5 ABUSE CONTROL UNIT.—The Governor of each State

6 shall, consistent with State law, establish and maintain in

7 accordance with subsection (b) a State agency to act as

8 a Health Care Fraud and Abuse Control Unit for purposes

9 of this subtitle.

10 (b) DEFINITION.—In this section, a ‘‘State Fraud

11 Unit’’ means a Health Care Fraud and Abuse Control

12 Unit designated under subsection (a) that the Secretary

13 certifies meets the requirements of this subtitle.

14 SEC. 5402. REQUIREMENTS FOR STATE FRAUD UNITS.

15 (a) IN GENERAL.—The State Fraud Unit must—

16 (1) be a single identifiable entity of the State

17 government;

18 (2) be separate and distinct from any State

19 agency with principal responsibility for the adminis20 tration of any federally-funded or mandated health

21 care program;

22 (3) meet the other requirements of this section.

23 (b) SPECIFIC REQUIREMENTS DESCRIBED.—The

24 State Fraud Unit shall—
165

•S 308 IS

1 (1) be a Unit of the office of the State Attorney

2 General or of another department of State govern3 ment which possesses statewide authority to pros4 ecute individuals for criminal violations;

5 (2) if it is in a State the constitution of which

6 does not provide for the criminal prosecution of indi7 viduals by a statewide authority and has formal pro8 cedures, (A) assure its referral of suspected criminal

9 violations to the appropriate authority or authorities

10 in the State for prosecution, and (B) assure its as11 sistance of, and coordination with, such authority or

12 authorities in such prosecutions; or

13 (3) have a formal working relationship with the

14 office of the State Attorney General or the appro15 priate authority or authorities for prosecution and

16 have formal procedures (including procedures for its

17 referral of suspected criminal violations to such of18 fice) which provide effective coordination of activities

19 between the Fraud Unit and such office with respect

20 to the detection, investigation, and prosecution of

21 suspected criminal violations relating to any feder22 ally-funded or mandated health care programs.

23 (c) STAFFING REQUIREMENTS.—The State Fraud

24 Unit shall—
166

•S 308 IS

1 (1) employ attorneys, auditors, investigators

2 and other necessary personnel; and

3 (2) be organized in such a manner and provide

4 sufficient resources as is necessary to promote the

5 effective and efficient conduct of State Fraud Unit

6 activities.

7 (d) COOPERATIVE AGREEMENTS; MEMORANDA OF

8 UNDERSTANDING.—The State Fraud Unit shall have co9 operative agreements with—

10 (1) federally-funded or mandated health care

11 programs;

12 (2) similar Fraud Units in other States, as ex13 emplified through membership and participation in

14 the National Association of Medicaid Fraud Control

15 Units or its successor; and

16 (3) the Secretary.

17 (e) REPORTS.—The State Fraud Unit shall submit

18 to the Secretary an application and an annual report con19 taining such information as the Secretary determines to

20 be necessary to determine whether the State Fraud Unit

21 meets the requirements of this section.

22 (f) FUNDING SOURCE; PARTICIPATION IN ALL23 PAYER PROGRAM.—In addition to those sums expended

24 by a State under section 5404(a) for purposes of deter25 mining the amount of the Secretary’s payments, a State
167

•S 308 IS

1 Fraud Unit may receive funding for its activities from

2 other sources, the identity of which shall be reported to

3 the Secretary in its application or annual report. The

4 State Fraud Unit shall participate in the all-payer fraud

5 and abuse control program established under section

6 5101.

7 SEC. 5403. SCOPE AND PURPOSE.

8 The State Fraud Unit shall carry out the following

9 activities:

10 (1) The State Fraud Unit shall conduct a state11 wide program for the investigation and prosecution

12 (or referring for prosecution) of violations of all ap13 plicable State laws regarding any and all aspects of

14 fraud in connection with any aspect of the adminis15 tration and provision of health care services and ac16 tivities of providers of such services under any feder17 ally-funded or mandated health care programs;

18 (2) The State Fraud Unit shall have procedures

19 for reviewing complaints of the abuse or neglect of

20 patients of facilities (including patients in residential

21 facilities and home health care programs) that re22 ceive payments under any federally-funded or man23 dated health care programs, and, where appropriate,

24 to investigate and prosecute such complaints under
168

•S 308 IS

1 the criminal laws of the State or for referring the

2 complaints to other State agencies for action.

3 (3) The State Fraud Unit shall provide for the

4 collection, or referral for collection to the appro5 priate agency, of overpayments that are made under

6 any federally-funded or mandated health care pro7 gram and that are discovered by the State Fraud

8 Unit in carrying out its activities.

9 SEC. 5404. PAYMENTS TO STATES.

10 (a) MATCHING PAYMENTS TO STATES.—Subject to

11 subsection (c), for each year for which a State has a State

12 Fraud Unit approved under section 5402(b) in operation

13 the Secretary shall provide for a payment to the State for

14 each quarter in a fiscal year in an amount equal to the

15 applicable percentage of the sums expended during the

16 quarter by the State Fraud Unit.

17 (b) APPLICABLE PERCENTAGE DEFINED.—

18 (1) IN GENERAL.—In subsection (a), the ‘‘ap19 plicable percentage’’ with respect to a State for a

20 fiscal year is—

21 (A) 90 percent, for quarters occurring dur22 ing the first 3 years for which the State Fraud

23 Unit is in operation; or

24 (B) 75 percent, for any other quarters.
169

•S 308 IS

1 (2) TREATMENT OF STATES WITH MEDICAID

2 FRAUD CONTROL UNITS.—In the case of a State

3 with a State medicaid fraud control in operation

4 prior to or as of the date of the enactment of this

5 Act, in determining the number of years for which

6 the State Fraud Unit under this subtitle has been

7 in operation, there shall be included the number of

8 years for which such State medicaid fraud control

9 unit was in operation.

10 (c) LIMIT ON PAYMENT.—Notwithstanding sub11 section (a), the total amount of payments made to a State

12 under this section for a fiscal year may not exceed the

13 amounts as authorized pursuant to section 1903(b)(3) of

14 the Social Security Act.

15 TITLE VI—REVENUE

16 PROVISIONS

17 SEC. 6000. AMENDMENT OF 1986 CODE.

18 Except as otherwise expressly provided, whenever in

19 this title an amendment or repeal is expressed in terms

20 of an amendment to, or repeal of, a section or other provi21 sion, the reference shall be considered to be made to a

22 section or other provision of the Internal Revenue Code

23 of 1986.
170

•S 308 IS

1 Subtitle A—Financing Provisions

2 PART I—INCREASE IN TAX ON TOBACCO

3 PRODUCTS

4 SEC. 6001. INCREASE IN EXCISE TAXES ON TOBACCO

5 PRODUCTS.

6 (a) CIGARETTES.—Subsection (b) of section 5701 is

7 amended—

8 (1) by striking ‘‘$12 per thousand ($10 per

9 thousand on cigarettes removed during 1991 or

10 1992)’’ in paragraph (1) and inserting ‘‘$62 per

11 thousand’’, and

12 (2) by striking ‘‘$25.20 per thousand ($21 per

13 thousand on cigarettes removed during 1991 or

14 1992)’’ in paragraph (2) and inserting ‘‘$130.20 per

15 thousand’’.

16 (b) CIGARS.—Subsection (a) of section 5701 is

17 amended—

18 (1) by striking ‘‘$1.125 cents per thousand

19 (93.75 cents per thousand on cigars removed during

20 1991 or 1992)’’ in paragraph (1) and inserting

21 ‘‘$51.13 per thousand’’, and

22 (2) by striking ‘‘equal to’’ and all that follows

23 in paragraph (2) and inserting ‘‘equal to 66 percent

24 of the price for which sold but not more than $155

25 per thousand.’’
171

•S 308 IS

1 (c) CIGARETTE PAPERS.—Subsection (c) of section

2 5701 is amended by striking ‘‘0.75 cent (0.625 cent on

3 cigarette papers removed during 1991 or 1992)’’ and in4 serting ‘‘3.88 cents’’.

5 (d) CIGARETTE TUBES.—Subsection (d) of section

6 5701 is amended by striking ‘‘1.5 cents (1.25 cents on

7 cigarette tubes removed during 1991 or 1992)’’ and in8 serting ‘‘7.76 cents’’.

9 (e) SMOKELESS TOBACCO.—Subsection (e) of section

10 5701 is amended—

11 (1) by striking ‘‘36 cents (30 cents on snuff re12 moved during 1991 or 1992)’’ in paragraph (1) and

13 inserting ‘‘$13.69’’, and

14 (2) by striking ‘‘12 cents (10 cents on chewing

15 tobacco removed during 1991 or 1992)’’ in para16 graph (2) and inserting ‘‘$5.45’’.

17 (f) PIPE TOBACCO.—Subsection (f) of section 5701

18 is amended by striking ‘‘67.5 cents (56.25 cents on pipe

19 tobacco removed during 1991 or 1992)’’ and inserting

20 ‘‘$17.35’’.

21 (g) APPLICATION OF TAX INCREASE TO PUERTO

22 RICO.—Section 5701 is amended by adding at the end the

23 following new subsection:
172

•S 308 IS

1 ‘‘(h) APPLICATION TO TAXES TO PUERTO RICO.—

2 Notwithstanding subsections (b) and (c) of section 7653

3 and any other provision of law—

4 ‘‘(1) IN GENERAL.—On tobacco products and

5 cigarette papers and tubes, manufactured or im6 ported into the Commonwealth of Puerto Rico, there

7 is hereby imposed a tax at the rate equal to the ex8 cess of—

9 ‘‘(A) the rate of tax applicable under this

10 section to like articles manufactured in the

11 United States, over

12 ‘‘(B) the rate referred to in subparagraph

13 (A) as in effect on the day before the date of

14 the enactment of the Health Partnership Act of

15 1995.

16 ‘‘(2) SHIPMENTS TO PUERTO RICO FROM THE

17 UNITED STATES.—Only the rates of tax in effect on

18 the day before the date of the enactment of this sub19 section shall be taken into account in determining

20 the amount of any exemption from, or credit or

21 drawback of, any tax imposed by this section on any

22 article shipped to the Commonwealth of Puerto Rico

23 from the United States.

24 ‘‘(3) SHIPMENTS FROM PUERTO RICO TO THE

25 UNITED STATES.—The rates of tax taken into ac-
173

•S 308 IS

1 count under section 7652(a) with respect to tobacco

2 products and cigarette papers and tubes coming into

3 the United States from the Commonwealth of Puer4 to Rico shall be the rates of tax in effect on the day

5 before the date of the enactment of the Health Part6 nership Act of 1995.

7 ‘‘(4) DISPOSITION OF REVENUES.—The provi8 sions of section 7652(a)(3) shall not apply to any

9 tax imposed by reason of this subsection.’’

10 (h) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to articles removed (as defined in

12 section 5702(k) of the Internal Revenue Code of 1986,

13 as amended by this Act) after December 31, 1995.

14 (i) FLOOR STOCKS TAXES.—

15 (1) IMPOSITION OF TAX.—On tobacco products

16 and cigarette papers and tubes manufactured in or

17 imported into the United States or the Common18 wealth of Puerto Rico which are removed before any

19 tax-increase date, and held on such date for sale by

20 any person, there is hereby imposed a tax in an

21 amount equal to the excess of—

22 (A) the tax which would be imposed under

23 section 5701 of the Internal Revenue Code of

24 1986 on the article if the article had been re25 moved on such date, over
174

•S 308 IS

1 (B) the prior tax (if any) imposed under

2 section 5701 or 7652 of such Code on such ar3 ticle.

4 (2) AUTHORITY TO EXEMPT CIGARETTES HELD

5 IN VENDING MACHINES.—To the extent provided in

6 regulations prescribed by the Secretary, no tax shall

7 be imposed by paragraph (1) on cigarettes held for

8 retail sale on any tax-increase date, by any person

9 in any vending machine. If the Secretary provides

10 such a benefit with respect to any person, the Sec11 retary may reduce the $500 amount in paragraph

12 (3) with respect to such person.

13 (3) CREDIT AGAINST TAX.—Each person shall

14 be allowed as a credit against the taxes imposed by

15 paragraph (1) an amount equal to $500. Such credit

16 shall not exceed the amount of taxes imposed by

17 paragraph (1) on each tax-increase date for which

18 such person is liable.

19 (4) LIABILITY FOR TAX AND METHOD OF PAY20 MENT.—

21 (A) LIABILITY FOR TAX.—A person hold22 ing cigarettes on any tax-increase date, to

23 which any tax imposed by paragraph (1) applies

24 shall be liable for such tax.
175

•S 308 IS

1 (B) METHOD OF PAYMENT.—The tax im2 posed by paragraph (1) shall be paid in such

3 manner as the Secretary shall prescribe by reg4 ulations.

5 (C) TIME FOR PAYMENT.—The tax im6 posed by paragraph (1) shall be paid on or be7 fore the date which is 3 months after the tax8 increase date.

9 (5) ARTICLES IN FOREIGN TRADE ZONES.—

10 Notwithstanding the Act of June 18, 1934 (48 Stat.

11 998, 19 U.S.C. 81a) and any other provision of law,

12 any article which is located in a foreign trade zone

13 on any tax-increase date shall be subject to the tax

14 imposed by paragraph (1) if—

15 (A) internal revenue taxes have been deter16 mined, or customs duties liquidated, with re17 spect to such article before such date pursuant

18 to a request made under the 1st proviso of sec19 tion 3(a) of such Act, or

20 (B) such article is held on such date under

21 the supervision of a customs officer pursuant to

22 the 2d proviso of such section 3(a).

23 (6) DEFINITIONS.—For purposes of this sub24 section—
176

•S 308 IS

1 (A) IN GENERAL.—Terms used in this sub2 section which are also used in section 5702 of

3 the Internal Revenue Code of 1986 shall have

4 the respective meanings such terms have in

5 such section, as amended by this Act.

6 (B) SECRETARY.—The term ‘‘Secretary’’

7 means the Secretary of the Treasury or his del8 egate.

9 (C) TAX-INCREASE DATE.—The term ‘‘tax10 increase date’’ means January 1, 1996, and

11 July 1, 1997.

12 (7) CONTROLLED GROUPS.—Rules similar to

13 the rules of section 5061(e)(3) of such Code shall

14 apply for purposes of this subsection.

15 (8) OTHER LAWS APPLICABLE.—All provisions

16 of law, including penalties, applicable with respect to

17 the taxes imposed by section 5701 of such Code

18 shall, insofar as applicable and not inconsistent with

19 the provisions of this subsection, apply to the floor

20 stocks taxes imposed by paragraph (1), to the same

21 extent as if such taxes were imposed by such section

22 5701. The Secretary may treat any person who bore

23 the ultimate burden of the tax imposed by para24 graph (1) as the person to whom a credit or refund

25 under such provisions may be allowed or made.
177

•S 308 IS

1 SEC. 6002. MODIFICATIONS OF CERTAIN TOBACCO TAX

2 PROVISIONS.

3 (a) EXEMPTION FOR EXPORTED TOBACCO PROD4 UCTS AND CIGARETTE PAPERS AND TUBES TO APPLY

5 ONLY TO ARTICLES MARKED FOR EXPORT.—

6 (1) Subsection (b) of section 5704 is amended

7 by adding at the end the following new sentence:

8 ‘‘Tobacco products and cigarette papers and tubes

9 may not be transferred or removed under this sub10 section unless such products or papers and tubes

11 bear such marks, labels, or notices as the Secretary

12 shall by regulations prescribe.’’

13 (2) Section 5761 is amended by redesignating

14 subsections (c) and (d) as subsections (d) and (e),

15 respectively, and by inserting after subsection (b)

16 the following new subsection:

17 ‘‘(c) SALE OF TOBACCO PRODUCTS AND CIGARETTE

18 PAPERS AND TUBES FOR EXPORT.—Except as provided

19 in subsections (b) and (d) of section 5704—

20 ‘‘(1) every person who sells, relands, or receives

21 within the jurisdiction of the United States any to22 bacco products or cigarette papers or tubes which

23 have been labeled or shipped for exportation under

24 this chapter,
178

•S 308 IS

1 ‘‘(2) every person who sells or receives such

2 relanded tobacco products or cigarette papers or

3 tubes, and

4 ‘‘(3) every person who aids or abets in such

5 selling, relanding, or receiving,

6 shall, in addition to the tax and any other penalty provided

7 in this title, be liable for a penalty equal to the greater

8 of $1,000 or 5 times the amount of the tax imposed by

9 this chapter. All tobacco products and cigarette papers

10 and tubes relanded within the jurisdiction of the United

11 States, and all vessels, vehicles, and aircraft used in such

12 relanding or in removing such products, papers, and tubes

13 from the place where relanded, shall be forfeited to the

14 United States.’’.

15 (3) Subsection (a) of section 5761 is amended

16 by striking ‘‘subsection (b)’’ and inserting ‘‘sub17 section (b) or (c)’’.

18 (4) Subsection (d) of section 5761, as redesig19 nated by paragraph (2), is amended by striking

20 ‘‘The penalty imposed by subsection (b)’’ and insert21 ing ‘‘The penalties imposed by subsections (b) and

22 (c)’’.

23 (5)(A) Subpart F of chapter 52 is amended by

24 adding at the end the following new section:
179

•S 308 IS

1 ‘‘SEC. 5754. RESTRICTION ON IMPORTATION OF PRE2 VIOUSLY EXPORTED TOBACCO PRODUCTS.

3 ‘‘(a) IN GENERAL.—Tobacco products and cigarette

4 papers and tubes previously exported from the United

5 States may be imported or brought into the United States

6 only as provided in section 5704(d). For purposes of this

7 section, section 5704(d), section 5761, and such other pro8 visions as the Secretary may specify by regulations, ref9 erences to exportation shall be treated as including a ref10 erence to shipment to the Commonwealth of Puerto Rico.

11 ‘‘(b) CROSS REFERENCE.—

‘‘For penalty for the sale of tobacco products and

cigarette papers and tubes in the United States

which are labeled for export, see section 5761(c).’’.

12 (B) The table of sections for subpart F of chap13 ter 52 is amended by adding at the end the following

14 new item:

‘‘Sec. 5754. Restriction on importation of previously exported tobacco products.’’.

15 (b) IMPORTERS REQUIRED TO BE QUALIFIED.—

16 (1) Sections 5712, 5713(a), 5721, 5722,

17 5762(a)(1), and 5763 (b) and (c) are each amended

18 by inserting ‘‘or importer’’ after ‘‘manufacturer’’.

19 (2) The heading of subsection (b) of section

20 5763 is amended by inserting ‘‘QUALIFIED IMPORT21 ERS,’’ after ‘‘MANUFACTURERS,’’.
180

•S 308 IS

1 (3) The heading for subchapter B of chapter 52

2 is amended by inserting ‘‘and Importers’’ after

3 ‘‘Manufacturers’’.

4 (4) The item relating to subchapter B in the

5 table of subchapters for chapter 52 is amended by

6 inserting ‘‘and importers’’ after ‘‘manufacturers’’.

7 (c) REPEAL OF TAX-EXEMPT SALES TO EMPLOYEES

8 OF CIGARETTE MANUFACTURERS.—

9 (1) Subsection (a) of section 5704 is amend10 ed—

11 (A) by striking ‘‘EMPLOYEE USE OR’’ in

12 the heading, and

13 (B) by striking ‘‘for use or consumption by

14 employees or’’ in the text.

15 (2) Subsection (e) of section 5723 is amended

16 by striking ‘‘for use or consumption by their employ17 ees, or for experimental purposes’’ and inserting

18 ‘‘for experimental purposes’’.

19 (d) REPEAL OF TAX-EXEMPT SALES TO UNITED

20 STATES.—Subsection (b) of section 5704 is amended by

21 striking ‘‘and manufacturers may similarly remove such

22 articles for use of the United States;’’.

23 (e) BOOKS OF 25 OR FEWER CIGARETTE PAPERS

24 SUBJECT TO TAX.—Subsection (c) of section 5701 is

25 amended by striking ‘‘On each book or set of cigarette
181

•S 308 IS

1 papers containing more than 25 papers,’’ and inserting

2 ‘‘On cigarette papers,’’.

3 (f) STORAGE OF TOBACCO PRODUCTS.—Subsection

4 (k) of section 5702 is amended by inserting ‘‘under section

5 5704’’ after ‘‘internal revenue bond’’.

6 (g) AUTHORITY TO PRESCRIBE MINIMUM MANUFAC7 TURING ACTIVITY REQUIREMENTS.—Section 5712 is

8 amended by striking ‘‘or’’ at the end of paragraph (1),

9 by redesignating paragraph (2) as paragraph (3), and by

10 inserting after paragraph (1) the following new paragraph:

11 ‘‘(2) the activity proposed to be carried out at

12 such premises does not meet such minimum capacity

13 or activity requirements as the Secretary may pre14 scribe, or’’.

15 (h) SPECIAL RULES RELATING TO PUERTO RICO

16 AND THE VIRGIN ISLANDS.—Section 7652 is amended by

17 adding at the end the following new subsection:

18 ‘‘(h) LIMITATION ON COVER OVER OF TAX ON TO19 BACCO PRODUCTS.—For purposes of this section, with re20 spect to taxes imposed under section 5701 or this section

21 on any tobacco product or cigarette paper or tube, the

22 amount covered into the treasuries of Puerto Rico and the

23 Virgin Islands shall not exceed the rate of tax under sec24 tion 5701 in effect on the article on the day before the
182

•S 308 IS

1 date of the enactment of the Health Partnership Act of

2 1995.’’.

3 (i) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to articles removed (as defined in

5 section 5702(k) of the Internal Revenue Code of 1986,

6 as amended by this Act) after December 31, 1995.

7 SEC. 6003. IMPOSITION OF EXCISE TAX ON MANUFACTURE

8 OR IMPORTATION OF ROLL-YOUR-OWN TO9 BACCO.

10 (a) IN GENERAL.—Section 5701 (relating to rate of

11 tax), as amended by section 701, is amended by redesig12 nating subsections (g) and (h) as subsections (h) and (i)

13 and by inserting after subsection (f) the following new

14 subsection:

15 ‘‘(g) ROLL-YOUR-OWN TOBACCO.—On roll-your-own

16 tobacco, manufactured in or imported into the United

17 States, there shall be imposed a tax of $17.35 per pound

18 (and a proportionate tax at the like rate on all fractional

19 parts of a pound).’’.

20 (b) ROLL-YOUR-OWN TOBACCO.—Section 5702 (re21 lating to definitions) is amended by adding at the end the

22 following new subsection:

23 ‘‘(p) ROLL-YOUR-OWN TOBACCO.—The term ‘roll24 your-own tobacco’ means any tobacco which, because of

25 its appearance, type, packaging, or labeling, is suitable for
183

•S 308 IS

1 use and likely to be offered to, or purchased by, consumers

2 as tobacco for making cigarettes.’’.

3 (c) TECHNICAL AMENDMENTS.—

4 (1) Subsection (c) of section 5702 is amended

5 by striking ‘‘and pipe tobacco’’ and inserting ‘‘pipe

6 tobacco, and roll-your-own tobacco’’.

7 (2) Subsection (d) of section 5702 is amend8 ed—

9 (A) in the material preceding paragraph

10 (1), by striking ‘‘or pipe tobacco’’ and inserting

11 ‘‘pipe tobacco, or roll-your-own tobacco’’, and

12 (B) by striking paragraph (1) and insert13 ing the following new paragraph:

14 ‘‘(1) a person who produces cigars, cigarettes,

15 smokeless tobacco, pipe tobacco, or roll-your-own to16 bacco solely for the person’s own personal consump17 tion or use, and’’.

18 (3) The chapter heading for chapter 52 is

19 amended to read as follows:

20 ‘‘CHAPTER 52—TOBACCO PRODUCTS AND

21 CIGARETTE PAPERS AND TUBES’’.

22 (4) The table of chapters for subtitle E is

23 amended by striking the item relating to chapter 52

24 and inserting the following new item:

‘‘CHAPTER 52. Tobacco products and cigarette papers and

tubes.’’.
184

•S 308 IS

1 (d) EFFECTIVE DATE.—

2 (1) IN GENERAL.—The amendments made by

3 this section shall apply to roll-your-own tobacco re4 moved (as defined in section 5702(k) of the Internal

5 Revenue Code of 1986, as amended by this Act)

6 after December 31, 1995.

7 (2) TRANSITIONAL RULE.—Any person who—

8 (A) on the date of the enactment of this

9 Act is engaged in business as a manufacturer of

10 roll-your-own tobacco or as an importer of to11 bacco products or cigarette papers and tubes,

12 and

13 (B) before January 1, 1995, submits an

14 application under subchapter B of chapter 52

15 of such Code to engage in such business,

16 may, notwithstanding such subchapter B, continue

17 to engage in such business pending final action on

18 such application. Pending such final action, all pro19 visions of such chapter 52 shall apply to such appli20 cant in the same manner and to the same extent as

21 if such applicant were a holder of a permit under

22 such chapter 52 to engage in such business.
185

•S 308 IS

1 Subtitle B—Health Care Reform

2 Trust Fund

3 SEC. 6101. ESTABLISHMENT OF HEALTH CARE REFORM

4 TRUST FUND.

5 (a) IN GENERAL.—Subchapter A of chapter 98 (re6 lating to establishment of trust funds) is amended by add7 ing at the end the following new part:

8 ‘‘PART II—HEALTH CARE TRUST FUNDS

‘‘Sec. 9551. Health Care Reform Trust Fund

9 ‘‘SEC. 9551. HEALTH CARE REFORM TRUST FUND.

10 ‘‘(a) CREATION OF TRUST FUND.—There is estab11 lished in the Treasury of the United States a trust fund

12 to be known as the ‘Health Care Reform Trust Fund’,

13 consisting of such amounts as may be appropriated or

14 credited to the Health Care Reform Trust Fund as pro15 vided in this section.

16 ‘‘(b) TRANSFERS TO THE TRUST FUND.—There are

17 hereby appropriated to the Health Care Reform Trust

18 Fund amounts received in the Treasury under section

19 5701 (relating to taxes on tobacco products) to the extent

20 attributable to the increases in such taxes as the result

21 of the enactment of subtitle A of title VI of the Health

22 Partnership Act of 1995.

23 ‘‘(c) EXPENDITURES.—Amounts in the Health Care

24 Reform Trust Fund are appropriated as provided for in
186

•S 308 IS

1 sections 2001 and 4003 of the Health Partnership Act of

2 1995, and title XXVII of the Public Health Service Act,

3 and to the extent any such amount is not expended during

4 any fiscal year, such amount shall be available for such

5 purpose for subsequent fiscal years.

6 ‘‘(d) OTHER RULES.—

7 ‘‘(1) INSUFFICIENT FUNDS.—If, for any fiscal

8 year, the sum of the amounts required to be allo9 cated under subsection (c) exceeds the amounts re10 ceived in the Health Care Reform Trust Fund, then

11 each of such amounts required to be so allocated

12 shall be reduced to an amount which bears the same

13 ratio to such amount as the amounts received in the

14 trust fund bear to the amounts required to be so al15 located (without regard to this paragraph).

16 ‘‘(2) ALLOCATION OF EXCESS FUNDS AND IN17 TEREST.—Amounts received in the Health Care Re18 form Trust Fund in excess of the amounts required

19 to be allocated under subsection (c), for any fiscal

20 year shall be allocated ratably on the basis of the

21 amounts allocated for the fiscal year (without regard

22 to this paragraph).’’.

23 (b) CONFORMING AMENDMENT.—Subchapter A of

24 chapter 98 is amended by inserting after the subchapter

25 heading the following new items:

‘‘Part I. General trust funds.
187

•S 308 IS

‘‘Part II. Health care trust fund.

1 ‘‘PART I—GENERAL TRUST FUNDS’’.

Æ

S 308 IS——2

S 308 IS——3

S 308 IS——4

S 308 IS——5

S 308 IS——6

S 308 IS——7

S 308 IS——8

S 308 IS——9

S 308 IS——10

S 308 IS——11

S 308 IS——12

S 308 IS——13