II

103D CONGRESS

2D SESSION S. 2109

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

provide improved and expanded access to comprehensive primary health

care and related services for medically underserved and vulnerable populations through the provision of financial support for the development

of community-based health networks and plans, to permit federally-assisted health centers to expand their capacity and develop and operate

new sites to serve underserved and vulnerable populations, to provide

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

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

entities serving underserved and vulnerable populations in the training

and education of primary care health professionals, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 12 (legislative day, MAY 2), 1994

Mr. HOLLINGS (for himself, Mrs. MURRAY, Mr. BOREN, Mr. COCHRAN, Ms.

MIKULSKI, Mr. INOUYE, Mr. HATCH, and Ms. MOSELEY-BRAUN) introduced the following bill; which was read the first time

A BILL

To amend the Public Health Service Act and the Social

Security Act to provide improved and expanded access

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

through the provision of financial support for the development of community-based health networks and plans,

to permit federally-assisted health centers to expand their

capacity and develop and operate new sites to serve

underserved and vulnerable populations, to provide cer-
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•S 2109 IS

tain financial and other protections for such networks,

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

and vulnerable populations in the training and education

of primary care health professionals, 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; FINDINGS.

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

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

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

7 (1) Efforts to assure universal coverage for

8 comprehensive health care benefits are a vitally im9 portant part of achieving effective national health

10 care reform.

11 (2) The provision of universal insurance cov12 erage, while vitally important, will not alone address

13 the critical needs of the estimated 43,000,000 Amer14 icans who are underserved by the current health

15 care system, and who lack access to the most basic

16 health services.

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

18 is especially difficult for those Americans who live in

19 underserved rural and inner-city communities or who

20 are members of other vulnerable groups, including
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1 migratory and seasonal agricultural workers, persons

2 who are homeless, those with HlV infection, those

3 who suffer from substance addiction, high-risk preg4 nant women, infants and children, immigrants and

5 refugees, and individuals with disabilities.

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

7 lack of coordination of, health care among the un8 derserved is evidenced by elevated infant and child9 hood illness and mortality rates, over-utilization of

10 emergency rooms and other inappropriate providers

11 for primary care services, and hospitalization rates

12 for preventable conditions that are significantly

13 higher than the national average.

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

15 coordinate the delivery of, vital primary health care

16 and related services for underserved and vulnerable

17 Americans will not only contribute to improved

18 health status, but will also reduce unnecessary care

19 and the overall costs of health care.

20 (6) Essential community providers, such as the

21 community and migrant health centers, collectively

22 referred to as health centers, which serve more than

23 7,000,000 needy Americans, provide an effective and

24 proven model for extending access to all underserved

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

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

4 needed to extend access to comprehensive primary

5 health care services for the millions of Americans

6 who remain unserved or underserved.

7 (8) As managed care has achieved recognition

8 as a means of organizing and paying for health care

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

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

12 communities. Of particular importance is the devel13 opment of community-based networks of health cen14 ters and other essential community providers that

15 offer high quality care to individuals and that en16 deavor to both contain costs and reduce unnecessary

17 or inappropriate uses of high-cost services.

18 (9) Essential community providers such as

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

23 are needed because underserved populations typically

24 require more frequent and intensive care, and be25 cause reduced use of higher-cost inpatient, emer-
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1 gency and specialty care will depend on the in2 creased provision of primary care as well as related

3 and enabling services.

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

6 produce savings of grant funds or increased revenues

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

9 afforded protection from anti-kickback laws.

10 (11) Health centers, community-based networks

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

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

15 professionals, and should be centrally involved in

16 such education and training efforts.

17 SEC. 2. GRANTS FOR THE DEVELOPMENT AND OPERATION

18 OF HEALTH CENTERS AND COMMUNITY

19 HEALTH NETWORKS AND HEALTH PLANS.

20 (a) SERVICES AUTHORIZED AT SCHOOLS AND OTHER

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

22 Health Service Act (42 U.S.C. 254c(a)) is amended by in23 serting after ‘‘provides’’ the following: ‘‘at appropriate lo24 cations, that may include schools and other sites’’.
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1 (b) ENABLING AND OUTREACH SERVICES.—Section

2 330(a) of such Act (42 U.S.C. 254c(a)) (as amended by

3 subsection (a)), is further amended—

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

5 end thereof;

6 (2) in paragraph (6)—

7 (A) by inserting ‘‘the services of outreach

8 workers and others to determine, or assist in

9 determining, the eligibility of individuals to re10 ceive services and benefits under Federal, State

11 and local health programs, and to assist such

12 individuals in enrolling in such programs, and

13 other’’ before ‘‘patient case’’; and

14 (B) by adding ‘‘and’’ at the end thereof;

15 and

16 (3) by inserting after paragraph (6) the follow17 ing new paragraph:

18 ‘‘(7) enabling services (defined as those services

19 that are not otherwise described in this subsection)

20 that promote access to necessary health and other

21 human and social services, and that increase the ca22 pacity of individuals to utilize the items and services

23 included as covered benefits under Federal, State,

24 and local health programs;’’.
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1 (c) COMMUNITY HEALTH SERVICE NETWORKS AND

2 PLANS.—Section 330 of such Act (42 U.S.C. 254c) is

3 amended by adding at the end thereof the following sub4 section:

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

6 more community health centers that receive grants under

7 subsection (d)(l)(A), or to one or more federally qualified

8 health centers as defined in Section 1861(aa)(4) of the

9 Social Security Act, to support the development of a com10 munity health service network or plan as defined in para11 graph (3). Assistance received under a grant under this

12 subsection may be used to pay for the—

13 ‘‘(A) cost associated with the development of

14 the network or plan as a corporate entity, including

15 planning and needs assessments, and the cost associ16 ated with the development of appropriate contractual

17 agreements between the participating providers and

18 the network or plan;

19 ‘‘(B) cost associated with the development of

20 the internal management for the network or plan, as

21 well as the cost associated with the development of

22 financial, legal, clinical, information systems (exclu23 sive of systems that the Secretary determines are in24 formation highways), billing and reporting systems

25 for the network or plan;
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1 ‘‘(C) cost associated with the development of

2 additional sites that will assure or enhance the pro3 vision and accessibility of primary health care and

4 enabling services to medically underserved popu5 lations, and residents of health professional shortage

6 areas;

7 ‘‘(D) cost associated with the recruitment,

8 training, and compensation of health professionals

9 and administrative staff;

10 ‘‘(E) acquisition, expansion, modernization of

11 facilities, conversion of unneeded hospital facilities to

12 facilities that will assure or enhance the provision

13 and accessibility of primary health care and enabling

14 services, as well as construction of new facilities and

15 purchase of major equipment (including equipment

16 necessary for support of external and internal infor17 mation systems);

18 ‘‘(F) amount of any reserves that are required

19 for furnishing services on a prepaid basis; and

20 ‘‘(G) such other costs as are necessary to as21 sure that the network or plan will be ready to as22 sume operational status by the end of the planning

23 and development phase.

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

25 operation of community health service networks or plans
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1 that received assistance under paragraph (1) for planning

2 and development and that meet the requirements of sub3 paragraphs (A) and (B) of paragraph (3). The costs for

4 which a grant may be made include, the costs described

5 in paragraph (1), and the otherwise unreimbursed costs

6 of furnishing services described in subsection (a) (except

7 for the costs of inpatient hospital services, extended care

8 facility services and long-term physical medicine) to medi9 cally underserved populations and residents of health pro10 fessional shortage areas and other hard-to-reach popu11 lations.

12 ‘‘(3)(A) For purposes of this section:

13 ‘‘(i) The term ‘community health service net14 work’ means a consortium of health care providers

15 that meets the following requirements:

16 ‘‘(I) The consortium is a public or non17 profit private entity whose principal purpose is,

18 with respect to the items and services that are

19 described in subsection (a), to provide all or a

20 portion of such items and services to a signifi21 cant number of individuals who are members of

22 a medically underserved population or popu23 lations, residents of health professional shortage

24 areas and other hard-to-reach populations in

25 the network service area.
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1 ‘‘(II) The participation of health care pro2 viders in the consortium is governed by a writ3 ten agreement to which each of the participat4 ing providers is a party.

5 ‘‘(ii) The term ‘community health service plan’

6 means a health plan that meets the following condi7 tions:

8 ‘‘(I) The health plan is a public or non9 profit private entity, as defined in section

10 1903(m)(2)(A) of the Social Security Act,

11 whose principal purpose is, with respect to the

12 items and services that are described in sub13 section (a), to provide all or a portion of the

14 items and services to a significant number of

15 individuals who are members of a medically un16 derserved population or populations, residents

17 of health professional shortage areas in the

18 plan’s service area, and other hard-to-reach

19 populations in the plan’s service area.

20 ‘‘(II) The participation of health care pro21 viders in the health plan is governed by a writ22 ten agreement to which each of the participat23 ing providers is a party.

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

25 shall—
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1 ‘‘(i) be governed by individuals a majority of

2 whom are registered patients of the network or plan

3 or are representatives of the entities described in

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

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

6 participating providers (who may provide services di7 rectly or through contract) in accordance with all of

8 the requirements of subsection (e)(3) except sub9 paragraph (G);

10 ‘‘(iii) be reasonable in size to accomplish the ob11 jectives of this subsection;

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

13 such provider(s) decline to participate)—

14 ‘‘(I) at a minimum, all entities providing

15 health services under grants under this section

16 or sections 329 or 340, and other federally

17 qualified health centers certified in accordance

18 with section 1861(aa)(4) of the Social Security

19 Act in the service area of the plan or network;

20 ‘‘(II) a reasonable number and combina21 tion (to ensure that services will be comprehen22 sive and accessible) of—

23 ‘‘(aa) public or nonprofit private enti24 ties that are entities providing health serv25 ices under grants under sections 340A,
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1 1001 or title XXIII, title V of the Social

2 Security Act, title V of the Indian Health

3 Care Improvement Act, and the Indian

4 Self-Determination Act;

5 ‘‘(bb) rural health clinics certified in

6 accordance with Section 1861 (aa)(2) of

7 the Social Security Act; and

8 ‘‘(cc) local and State public health

9 agencies;

10 that collectively provide primary health and en11 abling services to residents of the network or

12 plan service area; and

13 ‘‘(III) at the option of the network or plan,

14 any other public or private entity that provides

15 primary health, enabling services or supple16 mental health services to the population served

17 by the network or plan; and

18 ‘‘(v) ensure that each participating provider

19 agrees to provide services regardless of an individ20 ual’s ability to pay.

21 ‘‘(4)(A) No grant may be made under paragraphs (1)

22 or (2) unless an application therefore is submitted to, and

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

24 submitted in such form and manner and shall contain such

25 information as the Secretary shall prescribe, including—
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1 ‘‘(i) with respect to applications for planning

2 and development, the information required by sub3 section (c)(4) and a demonstration of how the appli4 cant will meet all requirements of paragraph (3) by

5 the end of the period of support under paragraph

6 (1); and

7 ‘‘(ii) with respect to applications for operations,

8 the information required by subsection (e).

9 ‘‘(B) In evaluating applications submitted under sub10 paragraph (A), the Secretary shall consider—

11 ‘‘(i) the extent to which the applicant proposes

12 to provide or expand the provision of services de13 scribed in subsection (a) in a manner that is coordi14 nated and assures accessibility of service to medi15 cally underserved populations and health profes16 sional shortage areas and which will otherwise meet

17 the requirements of paragraph (3) when the network

18 or plan assumes operational status;

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

20 areas proposed to be served for the services proposed

21 to be provided;

22 ‘‘(iii) whether the proposed network or plan de23 scribed in the application is reasonable in size and

24 capacity;
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1 ‘‘(iv) whether the proposed network or plan will

2 address such other needs of the medically under3 served population or populations and health profes4 sional shortage areas to be served as the applicant

5 or the Secretary may identify;

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

7 network or plan; and

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

9 the network or plan, is reasonable and justified, tak10 ing into account other sources of support for the

11 proposed network or plan and considering whether

12 levels of support previously received from other

13 sources have been maintained.

14 ‘‘(5) Not more than two grants may be made under

15 this subsection for planning and developing the same net16 work or plan.’’.

17 (d) FLEXIBLE AUTHORITY.—Section 330 of such Act

18 (42 U.S.C. 254c) (as amended by subsection (c)) is fur19 ther amended by adding at the end thereof the following

20 new subsection:

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

22 and nonprofit private entities that meet all of the require23 ments of subsection (l), except for paragraph (3)(B)(i)

24 and such other requirements of that subsection as the Sec25 retary may decide for good cause to waive, for the purpose
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1 of planning, developing and operating health networks and

2 health plans as the Secretary determines will provide or

3 enhance the provision and accessibility of the services that

4 are described in subsection (a) to medically underserved

5 populations and health professional shortage areas in the

6 service area of the network or plan.

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

8 grant under paragraph (1) must meet the requirements

9 of subsection (l)(4)(A)(i) and an application for an oper10 ations grant under paragraph (1) must meet the require11 ments of subsection (l)(4)(A)(ii).

12 ‘‘(3)(A) In evaluating applications submitted under

13 paragraph (2), the Secretary will consider the factors de14 scribed in subsection (l)(4)(B).

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

16 for a grant under this subsection unless the Secretary de17 termines that the network or plan involved will at a mini18 mum assure significant community involvement. For pur19 poses of this subsection, the term ‘significant community

20 involvement’ is demonstrated if the health network, or

21 health plan—

22 ‘‘(i) is governed by a board of directors, at least

23 one-third of the members of which are registered pa24 tients or representatives of entities described in sub-
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1 section (l)(3)(B)(iv)(I), or a combination of such in2 dividuals; or

3 ‘‘(ii) has established a patient advisory council,

4 composed of representative registered patients of the

5 network or plan, through which registered patients

6 are able to directly participate in decisions that in7 fluence the character and implementation of pro8 grams of the network or plan.

9 The Secretary shall give priority to applicants that meet

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

11 the requirements of clause (ii).

12 ‘‘(4) Not more than two grants may be made under

13 this subsection for planning and developing the same

14 health network or health plan.

15 ‘‘(5) Assistance received under a grant under para16 graph (1) for the planning and development of a health

17 network or health plan may be used to pay the costs de18 scribed in subsection (l)(1). Assistance received under a

19 grant under paragraph (1) for the operation of such a

20 health network or health plan may be used to pay the costs

21 described in subsection (l)(2).’’.

22 (e) AUTHORIZATION OF APPROPRIATIONS.—

23 (1) IN GENERAL.—Section 330(g)(1)(A) of

24 such Act (42 U.S.C. 254c(g)(1)(A)) is amended by

25 striking ‘‘$440,000,000’’ and all that follows
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1 through the end thereof and inserting the following:

2 ‘‘$925,000,000 for fiscal year 1995, $1,425,000,000

3 for fiscal year 1996, $1,625,000,000 for fiscal year

4 1997, $1,725,000,000 for fiscal year 1998,

5 $1,725,000,000 for fiscal year 1999,

6 $1,725,000,000 for fiscal year 2000, and not less

7 than $1,725,000,000 for each of the fiscal years

8 2001 through 2005. The preceding sentence con9 stitutes budget authority in advance of appropria10 tions acts and represents the obligation of the Fed11 eral government to provide funding for payments in

12 the amounts, and for the fiscal years specified under

13 this section. Such levels shall not be subject to offset

14 or reprogramming for any reason.’’.

15 (2) PLANNING AND OPERATING HEALTH NET16 WORKS AND PLANS.—Section 330(g)(1) of such Act

17 (42 U.S.C. 254c(g)(1)) is amended by adding at the

18 end thereof the following new subparagraph:

19 ‘‘(C)(i) For the purpose of making grants for activi20 ties authorized under subsection (m), the Secretary may

21 expend an amount not to exceed 15 percent of the amount

22 appropriated under subparagraph (A) for any fiscal year

23 that is in excess of $625,000,000. The authority of the

24 Secretary to make grants for such activities is effective

25 for any fiscal year only to such extent or in such amounts
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1 exceeding $625,000,000 as are provided for in appropria2 tion Acts.

3 ‘‘(ii) For the purpose of making grants under sub4 sections (c) and (d) the Secretary shall expend not less

5 than $625,000,000 for each fiscal year.

6 ‘‘(iii) In determining the level of funding to set aside

7 for grants under subsections (c) and (d) in excess of

8 $625,000,000, the Secretary shall increase such amount

9 by such sums as are necessary to ensure that individual

10 recipients of grants under such subsections have funding

11 each fiscal year in amounts adequate to—

12 ‘‘(I) repay loans that have been made to such

13 recipients under Farmers Home Administration pro14 grams, under section 330A of this Act, or under any

15 other Federal program, or any other loans with re16 spect to which the Secretary has authorized the use

17 of funds budgeted in accordance with this section for

18 repayment; and

19 ‘‘(II) to cover the full cost of providing all pri20 mary health care, enabling services, and appropriate

21 supplemental health services.’’.

22 (f) FUNDING PREFERENCES.—Section 330(k) of

23 such Act (42 U.S.C. 254c(k)) is amended—

24 (1) by inserting ‘‘(1)’’ after the subsection des25 ignation; and
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1 (2) by adding at the end thereof the following

2 new paragraph:

3 ‘‘(2) In making grants under this section, the Sec4 retary shall give preference as follows:

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

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

7 community health service network or plan and an

8 application for a grant under subsection (m) to plan,

9 develop, or operate a health network or plan serving

10 the same medically underserved population, the Sec11 retary shall give preference to the applicant that is

12 or will be a community health service plan or net13 work in accordance with subsection (l).

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

15 under subsection (m) to serve the same medically

16 underserved population, preference shall be given to

17 applicants that include as participating providers the

18 greatest number of entities providing health services

19 under grants under section 329, this section and

20 section 340.’’.

21 (g) MISCELLANEOUS AND CONFORMING AMEND22 MENTS.—

23 (1) APPLICATION.—Section 330(c) of such Act

24 (42 U.S.C. 254c(c)) is amended—

25 (A) in paragraph (1)—
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1 (i) in the matter preceding subpara2 graph (A), by striking ‘‘loans) and shall in3 clude—’’ and inserting a period; and

4 (ii) by striking subparagraphs (A)

5 through (D); and

6 (B) by adding at the end thereof the fol7 lowing new paragraph:

8 ‘‘(4) No grant may be made under paragraph (1) un9 less an application therefor is submitted to and approved

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

11 in such form and manner and contain such information

12 as the Secretary may prescribe, and shall include—

13 ‘‘(A) an assessment of the need that the popu14 lation proposed to be served by the community

15 health center for which the project is undertaken has

16 for enabling services, primary health services, sup17 plemental health services, and environmental health

18 services;

19 ‘‘(B) the design of a community health center

20 program for such population based on such assess21 ment;

22 ‘‘(C) efforts to secure, within the proposed

23 catchment area of such center, financial and profes24 sional assistance and support for the project; and
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1 ‘‘(D) initiation and encouragement of continu2 ing community involvement in the development and

3 operation of the project.’’.

4 (2) DEMONSTRATION OF SUPPORT.—

5 (A) Section 330(e)(2) of such Act (42

6 U.S.C. 254c(e)(2)) is amended—

7 (i) in the first sentence, by striking

8 ‘‘subparagraph (A) or (B) of’’;

9 (ii) in the first sentence, by striking

10 ‘‘for a community health center’’ and all

11 that follows through ‘‘Such an application

12 shall also’’ in the second sentence and in13 serting ‘‘shall’’; and

14 (iii) by adding at the end thereof the

15 following new sentence: ‘‘An application for

16 a grant under subparagraph (B) of sub17 section (d)(1) must demonstrate how the

18 entity will meet all of the requirements of

19 subsection (e)(3) by the end of the period

20 of support under such subsection.’’.

21 (B) Section 330(e)(3) of such Act (42

22 U.S.C. 254c(e)(3)) is amended by adding at the

23 end thereof the following new sentence: ‘‘The

24 Secretary may not approve an application under

25 subsection (d)(1)(B) unless the Secretary deter-
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1 mines that the entity will meet all of the re2 quirements of this paragraph by the end of the

3 period of support under such subsection.’’.

4 (3) FACILITIES.—Section 330(e)(6) of such Act

5 (42 U.S.C. 254c(e)(6)) is amended—

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

7 ‘‘(c), (d) or (l)’’; and

8 (B) by inserting ‘‘network or plan’’ after

9 ‘‘community health center’’.

10 (4) CONFORMING AMENDMENTS.—Section 330

11 of such Act (42 U.S.C. 254c) is amended—

12 (A) in subsection (f)—

13 (i) in paragraph (1), by striking

14 ‘‘(e)(2)’’ and inserting ‘‘(e)(3)’’; and

15 (ii) by adding at the end thereof the

16 following new paragraph:

17 ‘‘(3) The Secretary may award (by grant or contract)

18 funds to nonprofit private entities to support the costs of

19 developing and implementing, on a national basis, joint

20 purchasing arrangements and other projects designed to

21 reduce the operational costs of recipients of grants under

22 this section.’’; and

23 (B) in paragraphs (1) and (2) of sub24 section (i), by striking ‘‘subsection (d)’’ and in25 serting ‘‘under this section’’.
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1 SEC. 3. ESTABLISHING A PROGRAM OF LOANS AND LOAN

2 GUARANTEES.

3 (a) PROGRAM OF LOANS AND LOAN GUARANTEES.—

4 Subpart I of part D of title III of the Public Health Serv5 ice Act (42 U.S.C. 254b et seq.) is amended by adding

6 at the end thereof the following new section:

7 ‘‘SEC. 330A. FEDERAL LOAN AND LOAN GUARANTEE PRO8 GRAM.

9 ‘‘(a) LOANS AND LOAN GUARANTEES.—

10 ‘‘(1) IN GENERAL.—From the fund established

11 under subsection (b), the Secretary may make loans,

12 and guarantee the payment of principal and interest

13 to Federal and non-Federal lenders for loans, to any

14 public or nonprofit private entity that receives a

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

16 for—

17 ‘‘(A) the acquisition, modernization, expan18 sion or construction of facilities, or the conver19 sion of unneeded hospital facilities to facilities

20 that will assure or enhance the provision and

21 accessibility of primary health care and ena22 bling services to medically underserved popu23 lations;

24 ‘‘(B) the purchase of major equipment, in25 cluding equipment necessary for the support of

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

2 for furnishing services on a prepaid basis; and

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

5 the grant recipient to achieve the objectives of

6 section 329, 330 or 340, as applicable.

7 ‘‘(2) PREFERENCES AND PRIORITIES.—

8 ‘‘(A) PREFERENCE.—In making loans and

9 loan guarantees under this section, the Sec10 retary shall give preference to applications sub11 mitted by community health centers that have

12 received grants under section 330(d)(1)(A) and

13 community health service networks or plans

14 that have received grants under section 330(l).

15 ‘‘(B) PRIORITY.—In making loans and

16 loan guarantees under this section, the Sec17 retary shall give priority to applications for

18 projects for the renovation and modernization

19 of medical facilities necessary to prevent or

20 eliminate safety hazards, avoid noncompliance

21 with licensure or accreditation standards, or

22 projects to replace obsolete facilities.

23 ‘‘(C) CONSTRUCTION OF NEW BUILD24 INGS.—The Secretary may make loans or loan

25 guarantees for the construction of new build-
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1 ings only if the Secretary determines that ap2 propriate facilities are not available through ac3 quiring, modernizing, expanding, or converting

4 existing buildings, or that construction of new

5 buildings will cost less.

6 ‘‘(3) INTEREST SUBSIDIES.—The Secretary

7 may pay, to the holder of a loan made to any recipi8 ent of a grant under sections 329, 330, or 340, for

9 and on behalf of the project for which the loan was

10 made, amounts sufficient to reduce, up to 75 percent

11 the net effective interest rate otherwise payable on

12 such loan, if the Secretary finds that without such

13 assistance the project could not be undertaken.

14 ‘‘(4) TOTAL COVERAGE OF COSTS.—The prin15 cipal amount of a loan directly made or guaranteed

16 under this section may, when added to any other as17 sistance provided under section 329, 330, or 340,

18 cover up to 100 percent of the costs of the project

19 for which any such assistance is provided.

20 ‘‘(5) LIMITATION.—The cumulative total of the

21 principal of the loans outstanding at any time with

22 respect to which guarantees have been issued, or

23 which have been directly made, under this section

24 may not exceed limitations as may be specified in

25 appropriation Acts.
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1 ‘‘(6) APPROVAL AND TERMS AND CONDI2 TIONS.—

3 ‘‘(A) APPROVAL OF GUARANTEES.—The

4 Secretary may not approve a loan guarantee for

5 a project under this section unless the Sec6 retary determines that the terms, conditions,

7 security (if any), and schedule and amount of

8 repayments with respect to the loan are suffi9 cient to protect the financial interests of the

10 United States and are otherwise reasonable.

11 ‘‘(B) TERMS AND CONDITIONS.—Guaran12 tees of loans under this section shall be subject

13 to such further terms and conditions as the

14 Secretary determines to be necessary to assure

15 that the purposes of this section will be

16 achieved.

17 ‘‘(7) LOAN REQUIREMENTS.—

18 ‘‘(A) IN GENERAL.—The Secretary may

19 approve a loan under this section only if—

20 ‘‘(i) the Secretary is reasonably satis21 fied that the applicant for the project for

22 which the loan would be made will be able

23 to make payments of principal and interest

24 thereon when due; and
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1 ‘‘(ii) the applicant provides the Sec2 retary with reasonable assurances that

3 there will be available to the applicant such

4 additional funds as may be necessary to

5 complete the project or undertaking with

6 respect to which such loan is requested.

7 ‘‘(B) OTHER REQUIREMENTS.—Any loan

8 made under this section shall—

9 ‘‘(i) have such security;

10 ‘‘(ii) have such maturity date;

11 ‘‘(iii) be repayable in such install12 ments;

13 ‘‘(iv) bear interest at a rate com14 parable to the rate of interest prevailing on

15 the date the loan is made, minus any inter16 est subsidy made in accordance with para17 graph (3); and

18 ‘‘(v) be subject to such other terms

19 and conditions (including provisions for re20 covery in case of default), as the Secretary

21 determines to be necessary to carry out the

22 purposes of this section and sections 329,

23 330 and 340, as applicable, while ade24 quately protecting the financial interests of

25 the United States.
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1 ‘‘(C) WAIVER OF RIGHT OF RECOVERY.—

2 The Secretary may, for good cause but with due

3 regard to the financial interests of the United

4 States, waive any right of recovery which the

5 Secretary has by reason of the failure of a bor6 rower to make payments of principal of and in7 terest on a loan made under this subsection, ex8 cept that if such loan is sold and guaranteed,

9 any such waiver shall have no effect upon the

10 Secretary’s guarantee of timely payment of

11 principal and interest.

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

13 ‘‘(1) ESTABLISHMENT.—There is established in

14 the Treasury a loan and loan guarantee fund (here15 after in this subsection referred to as the ‘‘fund’’)

16 which shall be available as may be specified from

17 time to time in appropriations Acts to enable the

18 Secretary to make loans, loan guarantees, payment

19 of interest subsidies and such other actions as au20 thorized under subsection (a). There shall also be

21 deposited in the fund amounts received by the Sec22 retary in connection with loans and loan guarantees

23 under this section and other property or assets de24 rived by the Secretary from operations respecting
29

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1 such loans and loan guarantees, including any

2 money derived from the sale of assets.

3 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.—

4 There are authorized to be appropriated

5 $100,000,000 for each of the fiscal years 1995

6 through 2005, and such additional amounts as may

7 be necessary to provide the sums required for the

8 fund. The preceding sentence constitutes budget au9 thority in advance of appropriations Acts and rep10 resents the obligation of the Federal Government to

11 provide funding for payments in the amounts and

12 for the fiscal years authorized under this section.

13 ‘‘(c) DEFAULT.—

14 ‘‘(1) IN GENERAL.—The Secretary may take

15 such action as may be necessary to prevent a default

16 on a loan made or guaranteed under subsection (a),

17 including the waiver of regulatory conditions, defer18 ral of loan payments, renegotiation of loans, and the

19 expenditure of funds for technical and consultative

20 assistance, for the temporary payment of the inter21 est and principal on such a loan, and for other pur22 poses.

23 ‘‘(2) FORECLOSURE.—The Secretary may take

24 such action, consistent with State law respecting

25 foreclosure procedures, as the Secretary deems ap-
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1 propriate to protect the interest of the United States

2 in the event of a default on a loan made or guaran3 teed under subsection (a), including selling real

4 property pledged as security for such a loan or loan

5 guarantee and for a reasonable period of time taking

6 possession of, holding, and using real property

7 pledged as security for such a loan or loan guaran8 tee.

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

10 be made under this section unless an application is sub11 mitted to and approved by the Secretary. The application

12 shall be in the form and manner and contain such infor13 mation as the Secretary may prescribe, and if the project

14 is for the construction, conversion, expansion, or mod15 ernization of a facility, the application shall at a minimum

16 meet the requirements of section 330(e)(1).

17 ‘‘(e) RIGHT OF RECOVERY.—

18 ‘‘(1) IN GENERAL.—If any facility with respect

19 to which a loan or loan guarantee was made under

20 this section, or with respect to which a grant was

21 made under section 329, 330, or 340, for the con22 struction, acquisition, expansion, or modernization,

23 shall at any time within 20 years after completion—

24 ‘‘(A) be sold or transferred to any entity

25 which is not eligible for assistance under section
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1 329, 330 or 340 or which is not approved by

2 the Secretary as a transferee; or

3 ‘‘(B) cease to be a public or nonprofit en4 tity that is eligible for assistance under section

5 329, 330 or 340;

6 the United States shall be entitled to recover from

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

8 the purchaser or transferee, the amount of the

9 grant, loan, or loan guarantee plus interest. This

10 right of recovery shall not constitute a lien on any

11 facility with respect to which a grant was made

12 under sections 329, 330, 340, or with respect to

13 which funds have been paid under this section.

14 ‘‘(2) WAIVER.—Notwithstanding paragraph (1),

15 the Secretary shall subordinate or waive the right of

16 recovery and any other Federal interest that may be

17 derived by virtue of a loan or loan guarantee under

18 this section, or a grant under section 329, 330, or

19 340, to support the construction, acquisition, mod20 ernization, expansion, or conversion of a facility or

21 other capital project authorized under this section,

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

23 loan that will support improvements to the facility,

24 construction of new primary health care facilities or

25 improvements of health services described in section
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1 330(a) to medically underserved populations, or

2 where the facility is being sold in order to finance

3 the acquisition or construction of another facility

4 which will be used for the purposes authorized by

5 section 329, 330 or 340, if the Secretary obtains an

6 equivalent right of recovery or interest in the new

7 facility.’’.

8 (b) TAX EXEMPTION FOR STATE AND LOCAL BONDS

9 NOT AFFECTED BY LOAN GUARANTEES.—Section

10 149(b)(3)(A) of the Internal Revenue Code of 1986 is

11 amended—

12 (1) in clause (ii), by striking ‘‘or’’ at the end

13 thereof;

14 (2) in clause (iii), by striking the period and in15 serting ‘‘, or’’; and

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

17 new clause:

18 ‘‘(iv) any guarantee by the Loan and

19 Loan Guarantee Fund pursuant to section

20 330A of the Public Health Service Act.’’.

21 SEC. 4. AMENDMENTS TO THE MIGRANT HEALTH CENTERS

22 AND HEALTH CARE FOR THE HOMELESS PRO23 GRAM AUTHORITIES.

24 (a) ENABLING AND OUTREACH SERVICES.—
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1 (1) MIGRANT HEALTH CENTERS.—Section

2 329(a)(1) of the Public Health Service Act (42

3 U.S.C. 254b(a)(1)) is amended—

4 (A) in the matter preceding subparagraph

5 (A), by inserting after ‘‘entities provides’’ the

6 following: ‘‘at appropriate locations, which may

7 include schools and other sites’’;

8 (B) in subparagraph (G), by striking

9 ‘‘and’’ at the end thereof;

10 (C) in subparagraph (H)—

11 (i) by inserting after the subpara12 graph designation the following: ‘‘the serv13 ices of outreach workers and others to de14 termine, or assist in determining, the eligi15 bility of individuals to receive services and

16 benefits under Federal, State, and local

17 health programs, and to assist such indi18 viduals in enrolling in such programs, and

19 other’’; and

20 (ii) by adding ‘‘and’’ at the end there21 of; and

22 (D) by inserting after subparagraph (H),

23 the following new subparagraph:

24 ‘‘(I) enabling services (defined as services

25 that are not otherwise described in this sub-
34

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1 section) that promote access to necessary health

2 and other human and social services, and that

3 increase the capacity of individuals to utilize the

4 items and services that are included as covered

5 benefits under Federal, State, or local health

6 programs,’’.

7 (2) HOMELESS HEALTH SERVICES.—Section

8 340(i) of such Act (42 U.S.C. 256(i)) is amended—

9 (A) in paragraph (1)—

10 (i) in subparagraph (B), by adding

11 ‘‘and’’ at the end thereof;

12 (ii) in subparagraph (C), by striking

13 ‘‘; or’’ and inserting a period; and

14 (iii) by striking subparagraph (D);

15 and

16 (B) in paragraph (2), to read as follows:

17 ‘‘(2) A grant may include the acquisition, expansion,

18 or modernization of existing buildings, and the construc19 tion of new buildings (if the Secretary determines that ap20 propriate facilities are not available through the acquisi21 tion, expansion or modernization of existing buildings, or

22 that construction of a new building will cost less).’’.

23 (3) DEFINITIONS.—Section 340(r) of such Act

24 (42 U.S.C. 256(r)) is amended—
35

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1 (A) in paragraph (1), by adding ‘‘, supple2 mental health services and enabling services’’

3 before ‘‘substance abuse services’’; and

4 (B) in paragraph (6), to read as follows:

5 ‘‘(6) The terms ‘primary health services’, ‘sup6 plemental health services’ and ‘enabling services’

7 shall have the same meanings given such terms in

8 section 330(a).’’.

9 (b) AUTHORIZATION OF APPROPRIATIONS.—

10 (1) MIGRANT HEALTH CENTERS.—Section

11 329(h)(1)(A) of such Act (42 U.S.C. 254b(h)(1)(A))

12 is amended by striking ‘‘$48,500,000’’ and all that

13 follows through the end thereof and inserting the

14 following: ‘‘$100,000,000 for fiscal year 1995,

15 $110,000,000 for fiscal year 1996, $120,000,000 for

16 fiscal year 1997, $130,000,000 for fiscal year 1998,

17 $140,000,000 for fiscal year 1999, $150,000,000 for

18 fiscal year 2000, and not less than $150,000,000 for

19 each of the fiscal years 2001 through 2005. The

20 preceding sentence constitutes budget authority in

21 advance of appropriations Acts and represents the

22 obligation of the Federal Government to provide

23 funding for payments in the amounts, and for the

24 fiscal years specified under this section. Such levels
36

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1 shall not be subject to offset or reprogramming for

2 any reason.’’.

3 (2) HOMELESS HEALTH SERVICES.—Section

4 340(q)(1) of such Act (42 U.S.C. 256(q)(1)) is

5 amended by striking ‘‘$70,000,000’’ and all that fol6 lows through the end thereof and inserting the fol7 lowing: ‘‘$100,000,000 for fiscal year 1995,

8 $110,000,000 for fiscal year 1996, $120,000,000 for

9 fiscal year 1997, $130,000,000 for fiscal year 1998,

10 $140,000,000 for fiscal year 1999, $150,000,000 for

11 fiscal year 2000, and not less than $150,000,000 for

12 each of the fiscal years 2001 through 2005. The

13 preceding sentence constitutes budget authority in

14 advance of appropriations Acts and represents the

15 obligation of the Federal Government to provide

16 funding for payments in the amounts, and for the

17 fiscal years specified under this section. Such levels

18 shall not be subject to offset or reprogramming for

19 any reason.’’.

20 SEC. 5. EXPANDING THE NATIONAL HEALTH SERVICE

21 CORPS.

22 (a) ADDITIONAL FUNDING FOR CORPS PROGRAMS.—

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

24 U.S.C. 254k(a)) is amended—
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1 (1) by redesignating paragraph (2) as para2 graph (3); and

3 (2) by inserting after paragraph (1), the follow4 ing new paragraph:

5 ‘‘(2)(A) For the purpose of carrying out this para6 graph, there are authorized to be appropriated

7 $50,000,000 for fiscal year 1995, $100,000,000 for fiscal

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

9 1997 through 2000. The preceding sentence constitutes

10 budget authority in advance of appropriations Acts and

11 represents the obligation of the Federal Government to

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

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

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

15 ‘‘(B) The authorizations of appropriations established

16 in subparagraph (A) are in addition to the authorizations

17 of appropriations in paragraph (1).

18 ‘‘(C) Of the amounts appropriated under subpara19 graph (A), the Secretary shall reserve such amounts as

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

21 of individuals who are participants in the Scholarship Pro22 gram under section 338A, or in the Loan Repayment Pro23 gram under section 338B, the total number who are being

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

25 is increased to 20 percent.
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1 ‘‘(D) Notwithstanding section 333(a)(3) and the pri2 orities stated in section 333A for approval of applications

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

4 additional funds appropriated pursuant to subparagraph

5 (A) increases the number of individuals participating in

6 the Scholarship Program under section 338A and in the

7 Loan Repayment Program under section 338B over the

8 number of individuals participating in such programs in

9 fiscal year 1994, the Secretary shall give preference in as10 signing those individuals to applicants that serve a health

11 professional shortage area and receive grants to provide

12 health services and enabling services under section 329,

13 330 or 340 (including, but not limited to, networks and

14 plans awarded funds under section 330) and other feder15 ally qualified health centers as defined in section

16 1861(aa)(4) of the Social Security Act.’’.

17 SEC. 6. FACILITATING THE PARTICIPATION OF COMMUNITY

18 PROVIDERS IN HEALTH PROFESSIONS TRAIN19 ING.

20 (a) PREFERENCE FOR CERTAIN HEALTH PROFES21 SIONS PROGRAM APPLICANTS.—Section 791(a)(1) of the

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

23 amended—
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1 (1) by inserting after ‘‘or 767,’’ the following:

2 ‘‘or under sections 777 and 778, in addition to pref3 erences stated in such sections,’’; and

4 (2) by striking subparagraphs (A) and (B) and

5 inserting the following new subparagraphs:

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

7 that receives support under section 329, 330, or

8 340, or that is certified as a federally qualified

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

10 Social Security Act; and

11 ‘‘(B) either—

12 ‘‘(i) has a high rate for placing grad13 uates in practice settings having the prin14 ciple focus of serving residents of medically

15 underserved communities; or

16 ‘‘(ii) during the 2-year period preced17 ing the fiscal year for which such an award

18 is sought, has achieved a significant in19 crease in the rate of placing graduates in

20 such settings.’’.

21 (b) PREFERENCE FOR CERTAIN NURSE TRAINING

22 PROGRAM APPLICANTS.—Section 860(e)(1)(A) of such

23 Act (42 U.S.C. 298b–7(e)(1)(A)) is amended—
40

•S 2109 IS

1 (1) by striking ‘‘821, 822, 830, and 831’’ and

2 inserting ‘‘820(b), 820(c), 821, 822, 827, 830, and

3 831’’;

4 (2) by striking clauses (i) and (ii) and inserting

5 the following new clauses:

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

7 entity that receives support under section

8 329, 330, or 340, or that is certified as a

9 federally qualified health center under sec10 tion 1861(aa)(4) of the Social Security

11 Act; and

12 ‘‘(ii) either—

13 ‘‘(I) has a high rate for placing

14 graduates in practice settings having

15 the principle focus of serving residents

16 of medically underserved communities;

17 or

18 ‘‘(II) during the 2-year period

19 preceding the fiscal year for which

20 such an award is sought, has achieved

21 a significant increase in the rate of

22 placing graduates in such settings.’’.

23 (c) PAYMENT FOR DIRECT COSTS OF GRADUATE

24 MEDICAL EDUCATION.—Section 1886(h)(4)(E) of the So25 cial Security Act (42 U.S.C. 1395ww(h)(4)(E)) is amend-
41

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1 ed by striking ‘‘that setting.’’ and inserting the following:

2 ‘‘that setting (or, in the case of activities performed at

3 a federally qualified health center described in section

4 1861(aa)(4), if the hospital incurs any of the costs for the

5 training program at such center and reimburses the center

6 for any of the costs of the program that the center in7 curs).’’.

8 (d) PAYMENT FOR INDIRECT COSTS OF GRADUATE

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

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

11 amended by section 13506 of the Omnibus Budget Rec12 onciliation Act of 1993, is amended—

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

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

15 inserting ‘‘federally qualified health center described

16 in section 1861(aa)(4)’’;

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

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

19 (3) by striking ‘‘residents)’’ and inserting ‘‘resi20 dents and reimburses the center for any of the costs

21 of the program that the center incurs)’’.

22 (e) CLARIFYING ALLOWABILITY OF COSTS.—Section

23 1833(a)(3) of the Social Security Act (42 U.S.C.

24 1395l(a)(3)) is amended by inserting after words ‘‘fur25 nishing such services’’ the following: ‘‘(including, without
42

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1 limitation, all costs associated with participation in an ap2 proved medical residency training program)’’.

3 (f) EFFECTIVE DATE.—The amendments made by

4 subsections (c), (d), and (e) shall apply to services fur5 nished during cost reporting periods beginning on or after

6 October 1, 1994.

7 SEC. 7. PROVIDING SAFEGUARDS FOR RURAL HEALTH

8 CLINICS AND FEDERALLY QUALIFIED

9 HEALTH CENTERS IN MEDICAID DEMONSTRA10 TIONS.

11 (a) FREEDOM OF CHOICE.—Section 1115(a)(1) of

12 the Social Security Act (42 U.S.C. 1315(a)(1)) is amend13 ed by inserting after ‘‘or 1902’’ the following: ‘‘(other than

14 sections 1902(a)(13)(E), 1902(a)(10)(A), and

15 1902(a)(23) insofar as they require the provision of, pay16 ment for, and allow freedom of choice to select the pro17 vider of, the care and services described in section

18 1905(a)(2)(B) and (C))’’.

19 (b) NO AUTHORITY TO WAIVE COMPLIANCE.—Sec20 tion 1115(a)(2) of such Act (42 U.S.C. 1315(a)(2)) is

21 amended by inserting before the period the following: ‘‘,

22 except that this paragraph shall not provide authority for

23 the Secretary to waive compliance by a State with the re24 quirements of section 1903(m)(2)(A)(ix) or 1903(m)(3)’’.
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1 (c) WAIVERS.—Section 1915(b) of such Act (42

2 U.S.C. 1396n(b)) is amended—

3 (1) in the first sentence, by striking

4 ‘‘1905(a)(2)(C)’’ and inserting ‘‘1905(a)(2)(B) and

5 (C)’’; and

6 (2) in the last sentence, by inserting before the

7 period the following: ‘‘or under section

8 1905(a)(2)(B) and (C)’’.

9 (d) PAYMENTS TO STATES.—Section 1903(m) of

10 such Act (42 U.S.C. 1396b(m)) is amended:

11 (1) in paragraph (2)(G), by inserting ‘‘or is an

12 entity primarily owned and controlled by such grant13 ee or grantees,’’ after ‘‘Public Health Service Act’’;

14 and

15 (2) by inserting after paragraph (2) the follow16 ing new paragraph:

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

18 the event that a State agency contracts with an entity de19 scribed in paragraph (2)(A) or an entity similar to such

20 entity, such State agency, upon receiving an offer to pro21 vide health care services from a rural health clinic or a

22 federally qualified health center operating in the same geo23 graphic area as such entity, shall enter into a contract

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

25 care services referred to in such offer and, unless the clinic
44

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

2 to such clinic or center for services described in section

3 1905(a)(2) (B) and (C) to the individuals proposed to be

4 served in the clinic’s or center’s offer shall be made at

5 the rates of payment specified in section

6 1902(a)(13)(E).’’.

7 (e) CONFORMING AMENDMENTS.—

8 (1) STATE PLANS.—Section 1902(e)(2)(A) of

9 such Act (42 U.S.C. 1396a(e)(2)(A)) is amended by

10 inserting ‘‘(or an entity primarily owned and con11 trolled by a grantee or grantees described in para12 graph (2)(G))’’ after ‘‘(2)(G)’’.

13 (2) STATE PAYMENTS.—Section

14 1903(m)(2)(F)(i) of such Act (42 U.S.C.

15 1396b(m)(2)(F)(i)) is amended by inserting ‘‘(or an

16 entity primarily owned and controlled by a grantee

17 or grantees described in subparagraph (G))’’ after

18 ‘‘(G)’’.

19 SEC. 8. PROVIDING SAFE HARBOR FOR CERTAIN COLLABO20 RATIVE EFFORTS THAT BENEFIT MEDICALLY

21 UNDERSERVED PERSONS.

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

23 U.S.C. 1320a–7b(b)(3)) is amended—

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

25 the end thereof;
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1 (2) in subparagraph (E), by striking the period

2 and inserting ‘‘; and’’; and

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

4 new subparagraph:

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

6 or subrecipient of Federal grant funds under or in

7 connection with an arrangement for the procurement

8 of goods or services by the recipient or subrecipient,

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

10 space or equipment, if—

11 ‘‘(i) the arrangement is in writing and

12 signed by the parties;

13 ‘‘(ii) the arrangement will result in the

14 savings of Federal grant funds or increased rev15 enues to the recipient or subrecipient that will

16 be used to increase the availability or accessibil17 ity of services to a medically underserved popu18 lation served by the recipient or subrecipient or

19 an improvement in the quality of services to

20 such population: Provided, that the recipient or

21 subrecipient may seek a prior determination

22 from the Public Health Service that the re23 quirement of this clause is met and, if the re24 cipient or subrecipient does so, Public Health
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•S 2109 IS

1 Service approval shall be conclusive and binding

2 on the Federal Government;

3 ‘‘(iii) the arrangement will not result in

4 private inurement to any current employees or

5 members of the Board of Directors of the recip6 ient or subrecipient, or to agents of the recipi7 ent or subrecipient who were involved in rec8 ommending or negotiating the arrangement;

9 ‘‘(iv) with respect to an arrangement under

10 which a recipient or subrecipient is procuring

11 goods or services, the provider of the goods or

12 services is the only provider able to supply such

13 goods or services, or the recipient or sub14 recipient has engaged in a competitive process

15 to procure the goods or services that meets the

16 requirements for competition under Federal

17 grant awards;

18 ‘‘(v) with respect to an arrangement for a

19 referral of patients, the arrangement will assure

20 that all patients covered or affected by the ar21 rangement are advised that they may request a

22 referral to any person or entity of their choos23 ing, subject to appropriate contractual limita24 tions under which the recipient or subrecipient

25 may operate as a health plan or as a contract
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1 health plan provider and such limitations as the

2 patient may be under as an enrollee of a health

3 plan; and

4 ‘‘(vi) with respect to an arrangement for a

5 referral of patients, the arrangement will not

6 interfere with the discretion of health profes7 sionals to refer patients in a manner they be8 lieve will most appropriately deal with a pa9 tient’s particular circumstances, subject to ap10 propriate contractual limitations under which

11 the recipient or subrecipient may operate as a

12 health plan or as a contract health plan pro13 vider and such limitations as the patient may

14 be under as an enrollee of a health plan.

15 With respect to any arrangement that does not meet the

16 requirements of subparagraph (F), paragraphs (1) and (2)

17 shall not apply when the recipient or subrecipient of Fed18 eral grant funds has applied to the Secretary for approval

19 of the arrangement and the Secretary, after consultation

20 with the Department of Health and Human Services Of21 fice of Inspector General, has approved the arrangement

22 based upon a finding that the arrangement will produce

23 a substantial benefit to a medically underserved popu24 lation that outweighs the arrangement’s failure to fully

25 satisfy all of the requirements of such subparagraph. For
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1 any arrangement existing on the date of enactment of the

2 Access to Community Health Care Act of 1994, that in3 volves a recipient or subrecipient of Federal grant funds

4 that does not meet the requirements of subparagraph (F)

5 and would subject the recipient or subrecipient to criminal

6 penalties under paragraphs (1) or (2), the recipient or

7 subrecipient shall be immune from criminal prosecution

8 under paragraph (1) or (2), except that such immunity

9 shall only apply if, not later than 6 months after such date

10 of enactment, the arrangement is terminated or amended

11 to conform to the requirements of subparagraph (F). For

12 purposes of this paragraph, a ‘recipient’ shall mean a pub13 lic or nonprofit private entity that receives a grant or co14 operative agreement under the Public Health Service Act

15 or under title V of this Act. For purposes of this section,

16 a ‘subrecipient’ shall mean a public or nonprofit private

17 entity that performs substantive work under a grant or

18 cooperative agreement under the Public Health Service

19 Act or under title V of this Act to a recipient.’’.

Æ

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