Calendar No. 403

103D CONGRESS

2D SESSION S. 1865

A BILL

To amend title XIX of the Social Security Act to

services through community health authorities.methods of more efficiently delivering health carepromote demonstrations by States of alternative

APRIL 11, 1994

Read the second time and placed on the calendar
II

Calendar No. 403

103D CONGRESS

2D SESSION S. 1865

To amend title XIX of the Social Security Act to promote demonstrations

by States of alternative methods of more efficiently delivering health

care services through community health authorities.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 24 (legislative day, FEBRUARY 22), 1994

Mr. MCCAIN introduced the following bill; which was read the first time

APRIL 11, 1994

Read the second time and placed on the calendar

A BILL

To amend title XIX of the Social Security Act to promote

demonstrations by States of alternative methods of more

efficiently delivering health care services through community health authorities.

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.

4 This Act may be cited as the ‘‘Community Health Im5 provement Act of 1994’’.
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1 SEC. 2. COMMUNITY HEALTH AUTHORITIES DEMONSTRA2 TION PROJECTS.

3 (a) IN GENERAL.—Title XIX of the Social Security

4 Act, as amended by section 13631(b) of the Omnibus

5 Budget Reconciliation Act of 1993, is amended—

6 (1) by redesignating section 1931 as section

7 1932; and

8 (2) by inserting after section 1930 the following

9 new section:

10 ‘‘COMMUNITY HEALTH AUTHORITIES DEMONSTRATION

11 PROJECTS

12 ‘‘SEC. 1931. (a) IN GENERAL.—In order to test the

13 effectiveness of various innovative health care delivery ap14 proaches through the operation of community health au15 thorities, the Secretary shall operate a program under

16 which States establish projects to demonstrate the effec17 tiveness of such approaches in providing access to cost18 effective preventive and primary care and related services

19 for various areas and populations, including low-income

20 residents of medically underserved areas or for medically

21 underserved populations. A State may operate more than

22 1 such project.

23 ‘‘(b) SELECTION OF STATE PROJECTS.—

24 ‘‘(1) IN GENERAL.—A State is eligible to par25 ticipate in the program, and establish a demonstra26 tion project, under this section only if—
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1 ‘‘(A) the State submits to the Secretary an

2 application, at such time and in such form as

3 the Secretary may require, for participation in

4 the program; and

5 ‘‘(B) the Secretary finds that—

6 ‘‘(i) the application contains assur7 ances that the State will support the devel8 opment of a community health authority

9 that meets the requirements of this sec10 tion,

11 ‘‘(ii) the community health authority

12 will meet the requirements for such an au13 thority under subsection (c),

14 ‘‘(iii) the State provides sufficient as15 surances that the demonstration project of

16 a community health authority meets (or,

17 when operational, will meet) the require18 ments of subsection (d), and

19 ‘‘(iv) the State will comply with the

20 requirements of subsections (g) and (h).

21 ‘‘(2) CONTENTS OF APPLICATION.—Each appli22 cation submitted under paragraph (1) for a dem23 onstration project shall include at least the follow24 ing:
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1 ‘‘(A) A description of the proposed commu2 nity health authority and of the area or popu3 lation that the authority will serve.

4 ‘‘(B) A demonstration that the CHA will

5 serve at least 1 geographic area or population

6 group that is designated as medically under7 served under section 330 of the Public Health

8 Service Act or as having a shortage of health

9 professionals under section 332 of such Act.

10 ‘‘(C) An assessment of the area’s or popu11 lation’s need for services and an assurance that

12 the services of the CHA will be responsive to

13 those needs.

14 ‘‘(D) A list of the items and services to be

15 furnished by the CHA under the project, bro16 ken down by those items and services that are

17 treated as medical assistance under the State

18 plan under this title and other items and serv19 ices that will be provided by the CHA (either

20 directly or through coordination with other enti21 ties).

22 ‘‘(E) An assurance that the CHA has en23 tered into (or plans to enter into) written par24 ticipation agreements with a sufficient number
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1 of providers to enable the CHA to furnish all of

2 such items and services to enrolled individuals.

3 ‘‘(F) An assurance that the State plan

4 under this title will provide payment to the au5 thority in accordance with subsection (e).

6 ‘‘(G) Evidence of support and assistance

7 from other State agencies with responsibility for

8 providing or supporting the provision of preven9 tive and primary care services to underserved

10 and at-risk populations.

11 ‘‘(H) A proposed budget for the CHA.

12 ‘‘(3) PRIORITY.—The Secretary shall give prior13 ity to those applications proposing to support a

14 CHA that includes as participating providers all

15 Federally-qualified health centers serving the area or

16 population or (in areas for which there are no Fed17 erally-qualified health centers) all entities that would

18 be Federally-qualified health centers but for the fail19 ure to meet the requirement described in section

20 329(f)(2)(G)(i) of the Public Health Service Act or

21 the requirement described in section 330(e)(3)(G)(i)

22 of such Act (relating to the composition of the enti23 ty’s governing board).

24 ‘‘(4) PERIOD OF APPROVAL.—Each project ap25 proved under this section shall be approved for a pe-
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1 riod of not less than 5 years, subject to renewal for

2 subsequent periods unless such approval is with3 drawn for cause by the Secretary or at the request

4 of the State.

5 ‘‘(c) COMMUNITY HEALTH AUTHORITY (CHA) DE6 FINED.—In this section, the terms ‘community health au7 thority’ and ‘CHA’ mean a nonprofit entity that meets the

8 following requirements:

9 ‘‘(1) The entity serves (or will serve at the time

10 it becomes operational under a project) a geographic

11 area or population group that includes those des12 ignated—

13 ‘‘(A) under section 330 of the Public

14 Health Service Act as medically underserved, or

15 ‘‘(B) under section 332 of such Act as a

16 health professions shortage area.

17 ‘‘(2) The entity enrolls—

18 ‘‘(A) individuals and families who are med19 icaid-eligible;

20 ‘‘(B) within the limits of its available re21 sources and capacity, other individuals who

22 have incomes below 200 percent of the Federal

23 official poverty level; and

24 ‘‘(C) within the limits of its available re25 sources and capacity, other individuals and
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1 families who are able to pay the costs of enroll2 ment.

3 ‘‘(3) Through its participating providers, the

4 entity provides or, through contracts, arranges for

5 the provision of (or, by the time it becomes oper6 ational, will so provide or arrange for the provision

7 of) at least preventive services, primary care serv8 ices, inpatient and outpatient hospital services, and

9 any other service provided by a participating pro10 vider for which payment may be made under the

11 State plan under this title to enrolled individuals.

12 ‘‘(4) The entity must include (to the maximum

13 extent practicable) as participating providers any of

14 the following providers that furnish services provided

15 by (or arranged by) the entity that are located in or

16 serve the area or population to be covered:

17 ‘‘(A) Federally-qualified health centers.

18 ‘‘(B) Rural health clinics.

19 ‘‘(C) Local public health agencies that fur20 nish such services.

21 ‘‘(D) A hospital (or other provider of inpa22 tient or outpatient hospital services) which has

23 a participation agreement in effect with the

24 State under its plan under this title, which is
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1 located in or serving the area or population to

2 be served.

3 ‘‘(5) The entity may include as participating

4 providers other providers (which may include private

5 physicians or group practice offices, other commu6 nity clinics, limited service providers (such as pre7 natal clinics), and health professionals teaching pro8 grams (such as area health educational centers))

9 and take other appropriate steps, to the extent

10 needed to assure that the network is reasonable in

11 size and able to provide (or arrange for the provision

12 of) the services it proposes to furnish to its enroll13 ees.

14 ‘‘(6) The entity must maintain written agree15 ments with each participating provider under which

16 the provider agrees to participate in the CHA and

17 agrees to accept payment from the CHA as payment

18 in full for services furnished to individuals enrolled

19 with the CHA (subject to the requirements of sub20 section (g)(4), in the case of services furnished by a

21 provider that are described in subparagraph (B) or

22 (C) of section 1905(a)(2)).

23 ‘‘(7) Under the written agreements described in

24 paragraph (6), if a majority of the board of directors

25 of the entity has determined that a participating
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1 provider is failing to meet any of the requirements

2 of the participation agreement, the board may termi3 nate the provider’s participation agreement in ac4 cordance with the following requirements:

5 ‘‘(A) Subject to subparagraph (B), prior to

6 any termination of a provider’s participation

7 agreement, the provider shall be entitled to 30

8 days prior notice, a reasonable opportunity to

9 correct any deficiencies, and an opportunity for

10 a full and fair hearing conducted by the entity

11 to dispute the reasons for termination. The pro12 vider shall be entitled to appeal the board of di13 rectors’ decision directly to a committee consist14 ing of representatives of all of the entity’s par15 ticipating providers.

16 ‘‘(B) If a majority of the board of directors

17 of the entity determines that the continued par18 ticipation of a provider presents an immediate

19 threat to the health and safety of patients or a

20 substantial risk of improper diversion of funds,

21 the board may suspend the provider’s participa22 tion agreement (including the receipt of funds

23 under the agreement) for a period of up to 60

24 days. During this period, the entity shall take

25 steps to ensure that patients who were assigned
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1 to or cared for by the suspended provider are

2 appropriately assigned or referred to alternative

3 participating providers. The suspended provider

4 shall be entitled to a hearing within the period

5 of the suspension to show cause why the sus6 pension should be lifted and its participation

7 agreement restored. If dissatisfied with the

8 board’s decision, the provider shall be entitled

9 to appeal the decision directly to a committee

10 consisting of representatives of all of the enti11 ty’s participating providers.

12 ‘‘(C) For all other disputes between the en13 tity and its participating providers (including

14 disputes over the amounts due or interim rates

15 to be paid to a provider), the entity shall pro16 vide an opportunity for a full and fair hearing.

17 ‘‘(8) The entity must be governed by a board of

18 directors that includes representatives of the partici19 pating providers and, as appropriate, other health

20 professionals, civic or business leaders, elected offi21 cials, and residents of the area or population served.

22 Not less than 51 percent of such board shall be com23 posed of individuals who are enrolled in the CHA

24 and who are representatives of the community

25 served.
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1 ‘‘(d) DEMONSTRATION PROJECT REQUIREMENTS.—

2 The requirements of this subsection, with respect to a

3 demonstration project of a CHA under this section, are

4 as follows:

5 ‘‘(1)(A) All services furnished by the CHA

6 under the project shall be available and accessible to

7 all enrolled individuals and, except as provided in

8 subparagraph (B), must be available without regard

9 to an individual’s ability to pay for such services.

10 ‘‘(B) A CHA shall prepare a schedule of dis11 counts to be applied to the payment of premiums by

12 individuals who are not medicaid-eligible individuals

13 which shall be adjusted on the basis of the individ14 ual’s ability to pay.

15 ‘‘(2) The CHA shall take appropriate steps to

16 emphasize the provision of preventive and primary

17 care services, and shall ensure that each enrolled in18 dividual is assigned to a primary care physician (to

19 the greatest extent appropriate and feasible), except

20 that the CHA shall establish a process through

21 which an enrolled individual may be assigned to an22 other primary care physician for good cause shown.

23 ‘‘(3) The CHA must make reasonable efforts to

24 reduce the unnecessary or inappropriate use of hos25 pital or other high-cost services through an emphasis
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1 on preventive and primary care services, the imple2 mentation of utilization review or other appropriate

3 methods.

4 ‘‘(4) The State must regularly provide the CHA

5 with information on other medical, health, and relat6 ed benefits that may be available to individuals en7 rolled with the CHA under programs other than the

8 State plan under this title, and the CHA must pro9 vide its enrolled individuals with enrollment informa10 tion and other assistance to assist such individuals

11 in obtaining such benefits.

12 ‘‘(5) The State and the CHA must meet such

13 financial standards and requirements and reporting

14 requirements as the Secretary specifies and must

15 prepare and submit to the Secretary an annual inde16 pendent financial audit conducted in accordance with

17 requirements specified by the Secretary.

18 ‘‘(6) In collaboration with the State, the CHA

19 must adopt and use community-oriented, patient-re20 sponsive quality assurance and control systems in

21 accordance with requirements specified by the Sec22 retary. Such systems must include at least an ongo23 ing quality assurance program that measures

24 consumer satisfaction with the care provided under

25 the network, stresses improved health outcomes, and
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1 operates a community health status improvement

2 process that identifies and investigates community

3 health problems and implements measures designed

4 to remedy such problems.

5 ‘‘(e) CAPITATION PAYMENTS.—

6 ‘‘(1) IN GENERAL.—Under a demonstration

7 project under this section, the State shall enter into

8 an annual contract with the CHA under which the

9 State shall make monthly payments to the CHA for

10 covered services furnished through the CHA to indi11 viduals entitled to medical assistance under this title

12 in the amount specified in paragraph (2). Payment

13 shall be made at the beginning of each month on the

14 basis of estimates of the amounts payable and

15 amounts subsequently paid are subject to adjust16 ment to reflect the amounts by which previous pay17 ments were greater or less than the amount of pay18 ments that should have been made.

19 ‘‘(2) AMOUNT OF CAPITATION PAYMENT.—The

20 amount of a monthly payment under paragraph (1)

during a contract year, shall be equal to 1 21 ⁄12 of the

22 product of—

23 ‘‘(A)(i) the average per capita amounts ex24 pended under this title under the State plan for

25 covered services to be furnished under the dem-
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1 onstration project for similar medicaid-eligible

2 individuals for the most recent 12-month period

3 ending before the date of the enactment of this

4 section, increased by (ii) the percentage change

5 in the consumer price index for all urban con6 sumers (all items; U.S. city average) during the

7 period that begins upon the expiration of such

8 12-month period and ends upon the expiration

9 of the most recent 12-month period ending be10 fore the first month of the contract year for

11 which complete financial data on such index is

12 available, and

13 ‘‘(B) the number of medicaid-eligible indi14 viduals enrolled under the project as of the

15 15th day of the month prior to the first month

16 of the contract year (or, in the case of the first

17 year for which a contract is in effect under this

18 subsection, the CHA’s reasonable estimate of

19 the number of such individuals who will be en20 rolled in the project as of the 15th day of such

21 month).

22 ‘‘(f) ADDITIONAL STATE ASSISTANCE FOR PLAN23 NING, DEVELOPMENT, AND OPERATIONS.—

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

25 in addition to the payments under subsection (e),
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1 demonstration projects approved under this section

2 are eligible to have approved expenditures described

3 in paragraph (3) treated, for purposes of section

4 1903(a)(7), as expenditures found necessary by the

5 Secretary for the proper and efficient administration

6 of the State plan under this title.

7 ‘‘(2) SPECIAL RULES.—

8 ‘‘(A) LIMITATION WITH RESPECT TO ANY

9 COMMUNITY HEALTH AUTHORITY.—The total

10 amount of expenditures with respect to any

11 CHA that may be treated as expenditures for

12 administration under paragraph (1) for any 12-

13 month period shall not exceed $250,000.

14 ‘‘(B) LIMITATION ON NUMBER OF

15 YEARS.—The number of 12-month periods for

16 which expenditures are treated as expenditures

17 for administration under paragraph (1) for a

18 CHA shall not exceed—

19 ‘‘(i) 2 for expenditures for planning

20 and development assistance, described in

21 paragraph (3)(A), and

22 ‘‘(ii) 2 for expenditures for oper23 ational assistance, described in paragraph

24 (3)(B).
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1 ‘‘(C) NO RESULTING REDUCTION IN

2 AMOUNTS PROVIDED UNDER PHSA GRANTS.—

3 No grant to a CHA or 1 of its participating

4 providers under the Public Health Service Act

5 or this Act may be reduced on the ground that

6 activities of the CHA that are considered ap7 proved expenditures under paragraph (3) are

8 activities for which the CHA or the participat9 ing providers received funds under such Act.

10 ‘‘(3) APPROVED EXPENDITURES.—The ap11 proved expenditures described in this paragraph are

12 as follows:

13 ‘‘(A) PLANNING AND DEVELOPMENT.—Ex14 penditures for planning and development with

15 respect to a CHA, including—

16 ‘‘(i) developing internal management,

17 legal and financial and clinical, informa18 tion, and reporting systems for the CHA,

19 and carrying out other operating activities

20 of the CHA;

21 ‘‘(ii) recruiting, training and com22 pensating management staff of the CHA

23 and, as appropriate and necessary, man24 agement and clinical staff of any partici25 pating provider;
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1 ‘‘(iii) purchasing essential equipment

2 and acquiring, modernizing, expanding, or

3 (if cost-effective) constructing facilities for

4 the CHA and for participating providers

5 (including amortization costs and payment

6 of interest on loans); and

7 ‘‘(iv) entering into arrangements to

8 obtain or participate in emerging medical

9 technologies, including telemedicine.

10 ‘‘(B) OPERATIONS.—Expenditures in sup11 port of the operations of a CHA, including—

12 ‘‘(i) the ongoing management of the

13 CHA, including daily program administra14 tion, recordkeeping and reporting, assur15 ance of proper financial management (in16 cluding billings and collections) and over17 sight of program quality;

18 ‘‘(ii) developing and operating systems

19 to enroll eligible individuals in the CHA;

20 ‘‘(iii) data collection, in collaboration

21 with the State medicaid agency and the

22 State health department, designed to

23 measure changes in patient access to care,

24 the quality of care furnished, and patient

25 health status, and health care outcomes;
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1 ‘‘(iv) ongoing community outreach

2 and community education to all residents

3 of the area or population served, to pro4 mote the enrollment of eligible individuals

5 and the appropriate utilization of health

6 services by such individuals;

7 ‘‘(v) the establishment of necessary

8 reserves or purchase of stop-loss coverage;

9 and

10 ‘‘(vi) activities relating to health pro11 fessions training, including residency train12 ing at participating provider sites.

13 ‘‘(g) ADDITIONAL REQUIREMENTS.—

14 ‘‘(1) MANDATORY ENROLLMENT OF MEDICAID15 ELIGIBLE INDIVIDUALS.—Notwithstanding any pro16 vision of section 1903(m), a State participating in a

17 demonstration project under this section may require

18 that each medicaid-eligible resident in the service

19 area of a CHA operating under the project is not eli20 gible to receive any medical assistance under the

21 State plan that may be obtained through enrollment

22 with the CHA unless the individual receives such as23 sistance through enrollment with the CHA.

24 ‘‘(2) CONTINUED ENTITLEMENT TO ADDI25 TIONAL BENEFITS.—In the case of a medicaid-eligi-
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1 ble individual enrolled with a CHA under a dem2 onstration project under this section, the individual

3 shall remain entitled to medical assistance for serv4 ices which are not covered services under the project.

5 ‘‘(3) HMO-RELATED REQUIREMENTS.—A CHA

6 under this section shall be deemed to meet the re7 quirements of section 1903(m) (subject to paragraph

8 (1)) in the same manner as an entity listed under

9 section 1903(m)(2)(G).

10 ‘‘(4) TREATMENT OF FEDERALLY-QUALIFIED

11 HEALTH CENTERS AND RURAL HEALTH CLINICS.—

12 Payments under a demonstration project under this

13 section to a Federally qualified health center or

14 rural health clinic which is a participating provider

15 shall be made consistent with section

16 1902(a)(13)(E) for all services offered by the CHA

17 which are provided by such a center or clinic.

18 ‘‘(5) OUTSTATIONING ELIGIBILITY WORKERS.—

19 Under the project, the State may (in addition to

20 meeting the requirements of section 1902(a)(55))

21 provide for, or pay the reasonable costs of, station22 ing eligibility workers at appropriate service sites

23 under the project, and may permit medicaid-eligible

24 individuals to be enrolled under the State plan at

25 such a CHA or at such a site.
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1 ‘‘(6) PURCHASE OF STOP-LOSS COVERAGE.—

2 The State shall ensure that the CHA has purchased

3 stop-loss coverage to protect against default on its

4 obligations under the project. If an entity otherwise

5 qualified to serve as a CHA is prohibited under

6 State law from purchasing such coverage, the State

7 shall waive the application of such law to the extent

8 necessary to permit the entity to purchase such cov9 erage.

10 ‘‘(h) EVALUATION AND REPORTING.—

11 ‘‘(1) CHA.—Each CHA in a State with a dem12 onstration project approved under this section shall

13 prepare and submit to the State an annual report on

14 its activities during the previous year.

15 ‘‘(2) STATE.—Taking into account the reports

16 submitted pursuant to paragraph (1), each State

17 with a demonstration project approved under this

18 section shall prepare and submit to the Secretary an

19 annual evaluation of its activities and services under

20 this section. Such evaluation shall include an analy21 sis of the effectiveness of the project in providing

22 cost-effective health care to enrolled individuals.

23 ‘‘(3) REPORT TO CONGRESS.—Not later than 3

24 years after the date of the enactment of this section,

25 the Secretary shall submit to Congress a report on
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1 the demonstration projects conducted under this sec2 tion. Such report shall include an analysis of the ef3 fectiveness of such projects in providing cost-effec4 tive health care for the areas or populations served.

5 ‘‘(i) COLLABORATION IN ADMINISTRATION.—In car6 rying out this section, the Secretary shall assure the high7 est possible level of collaboration between the Health Care

8 Financing Administration and the Public Health Service.

9 Such collaboration may include (if appropriate and fea10 sible) any of the following:

11 ‘‘(1) The provision by the Public Health Service

12 of new or increased grant support to eligible entities

13 participating in a CHA, in order to expand the avail14 ability of services (particularly preventive and pri15 mary care services).

16 ‘‘(2) The placement of health professionals at

17 eligible locations and collaboration with Federally-as18 sisted health professions training programs located

19 in or near the areas served by community health au20 thorities.

21 ‘‘(3) The provision of technical and other non22 financial assistance.

23 ‘‘(j) DEFINITIONS.—In this section:

24 ‘‘(1) MEDICAID-ELIGIBLE INDIVIDUAL.—The

25 term ‘medicaid-eligible individual’ means an individ-
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1 ual described in section 1902(a)(10)(A) and entitled

2 to medical assistance under the State plan.

3 ‘‘(2) PARTICIPATING PROVIDER.—The term

4 ‘participating provider’ means, with respect to a

5 CHA, a provider that has entered into an agreement

6 with the CHA for the provision of covered services

7 under a project under this section.

8 ‘‘(3) PREVENTIVE AND PRIMARY CARE SERV9 ICES.—‘Preventive’ and ‘primary’ services include

10 those services described in section 1905(l)(2)(A) and

11 included as Federally-qualified health center serv12 ices.’’.

13 (b) CONTINUED MEDICAID ELIGIBILITY FOR UP TO

14 1 YEAR.—Section 1902(e)(2) of such Act (42 U.S.C.

15 1396a(e)(2)) is amended—

16 (1) in subparagraph (A)—

17 (A) by inserting ‘‘or with a community

18 health authority under a demonstration project

19 under section 1931’’ after ‘‘section 1876’’, and

20 (B) by striking ‘‘such organization or en21 tity’’ and inserting ‘‘such organization, entity,

22 or authority’’; and

23 (2) in subparagraph (B), by striking ‘‘effec24 tive.’’ and inserting the following: ‘‘effective (or, in

25 the case of an individual enrolled with a community
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1 health authority under a demonstration project

2 under section 1931, of not more than 1 year begin3 ning on the date the individual’s enrollment with the

4 authority becomes effective).’’.

5 (c) EXCEPTION TO ANTI-KICKBACK LAW.—Section

6 1128B(b)(3) of such Act (42 U.S.C. 1320a–7b(b)(3)) is

7 amended—

8 (1) by striking ‘‘and’’ at the end of subpara9 graph (D),

10 (2) by striking the period at the end of sub11 paragraph (E) and inserting ‘‘; and’’, and

12 (3) by adding at the end the following new sub13 paragraph:

14 ‘‘(F) any remuneration paid, or received, by a

15 Federally qualified health center, rural health clinic,

16 or other entity which is a participating provider

17 under a demonstration project under section 1931 as

18 part of an arrangement for the procurement of

19 goods or services or the referral of patients or the

20 lease or purchase of space or equipment.’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to calendar quarters beginning on

23 or after October 1, 1994.
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1 SEC. 3. HEALTH CENTER PROGRAM AMENDMENTS.

2 (a) AUTHORIZATION OF GRANTS FOR NETWORK DE3 VELOPMENT.—

4 (1) MIGRANT HEALTH CENTERS.—Section 329

5 of the Public Health Service Act (42 U.S.C. 254b)

6 is amended by adding at the end the following:

7 ‘‘(j)(1) The Secretary may make a grant, to an entity

8 receiving a grant under this section or to a group of such

9 entities, to support the planning and development of

10 health service networks (as defined in paragraph (3))

11 which will serve high impact areas, medically underserved

12 areas, or medically underserved populations within the

13 area they serve (or propose to serve).

14 ‘‘(2) A grant under this subsection for the planning

15 and development of a health service network may be used

16 for the following costs:

17 ‘‘(A) The costs of developing the network cor18 porate entity, including planning and needs assess19 ment.

20 ‘‘(B) The costs of developing internal manage21 ment for the network, as well as costs of developing

22 legal, financial, clinical, information, billing, and re23 porting systems, and other costs necessary to

24 achieve operational status.

25 ‘‘(C) The costs of recruitment, training, and

26 compensation of management staff of the network
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1 and, as appropriate and necessary, the management

2 and clinical staff of any participating provider.

3 ‘‘(D) The costs of developing additional primary

4 health and related service sites, including costs relat5 ed to purchase of essential equipment, acquisition,

6 modernization, expansion, or, if cost-effective, con7 struction of facilities.

8 ‘‘(3) In this subsection, the term ‘health service net9 work’ means a nonprofit private entity that—

10 ‘‘(A) through its participating providers (which

11 may provide services directly or through contract)

12 assures the provision of primary health and related

13 services and, as appropriate, supplemental health

14 services to residents of the high impact area or

15 medically underserved area or members of the medi16 cally underserved population covered by the network,

17 ‘‘(B) includes, as participating providers, at

18 least all recipients of grants under this section or

19 section 330, 340, or 340A that provide primary

20 health and related services to the residents of the

21 area it serves (or proposes to serve), and that may

22 include, at the entity’s option, any other providers of

23 primary health or supplemental health services to

24 residents of the high impact area or medically un25 derserved area or members of the medically under-
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1 served population covered by the network, but only

2 if such participating providers agree to provide serv3 ices without regard to an individual’s ability to pay,

4 and

5 ‘‘(C) is governed by individuals a majority of

6 whom are patients, employees, or board members of

7 its participating providers that receive grants under

8 this section or section 330, 340, or 340A.’’.

9 (2) COMMUNITY HEALTH CENTERS.—Section

10 330 of such Act (42 U.S.C. 254c) is amended by

11 adding at the end the following:

12 ‘‘(l)(1) The Secretary may make a grant, to an entity

13 receiving a grant under this section or to a group of such

14 entities, to support the planning and development of

15 health service networks (as defined in section 329(j)(3))

16 which will serve high impact areas, medically underserved

17 areas, or medically underserved populations within the

18 area they serve (or propose to serve).

19 ‘‘(2) A grant under this subsection for the planning

20 and development of a health service network may be used

21 for the costs described in section 329(j)(2).’’.

22 (3) EFFECTIVE DATE.—The amendments made

23 by this subsection shall take effect on the date of the

24 enactment of this Act.
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•S 1865 PCS

1 (b) EXTENSION OF AUTHORIZATION OF APPROPRIA2 TIONS.—

3 (1) MIGRANT HEALTH CENTERS.—Section

4 329(h)(1)(A) of such Act (42 U.S.C. 254b(h)(1)(A))

5 is amended—

6 (A) by inserting ‘‘and subsection (j)’’ after

7 ‘‘through (e)’’, and

8 (B) by striking ‘‘1994’’ and inserting

9 ‘‘1999’’.

10 (2) COMMUNITY HEALTH CENTERS.—Section

11 330(g)(1)(A) of such Act (42 U.S.C. 254c(g)(1)(A))

12 is amended by striking ‘‘1994’’ and inserting

13 ‘‘1999’’.

S 1865 PCS——2

S 1865 PCS——3