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by inserting after subparagraph (D) the following new
subparagraph:
‘‘(E) any qualified medical education loan
interest (within the meaning of paragraph (5)),
and’’.
(b) QUALIFIED MEDICAL EDUCATION LOAN INTER-
EST DEFINED.—Paragraph (5) of section 163(h) of such
Code is amended to read as follows:
‘‘(5) QUALIFIED MEDICAL EDUCATION LOAN IN-
TEREST.—
‘‘(A) IN
GENERAL.—The term ‘qualified
medical education loan interest’ means inter-
est—
‘‘(i) which is on a medical education
loan of a physician,
‘‘(ii) which is paid or accrued by such
physician, and
‘‘(iii) which accrues during the pe-
riod—
‘‘(I) such physician is providing
primary care (including internal medi-
cine, pediatrics, obstetrics/gynecology,
family medicine, and osteopathy) to
residents of a medically underserved
rural area, and
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‘‘(II) such physician’s principal
place of abode is in such area.
‘‘(B) MEDICAL
EDUCATION
LOAN.—The
term ‘medical education loan’ means indebted-
ness incurred to pay the individual’s—
‘‘(i) qualified tuition and related ex-
penses (as defined in section 117(b)) in-
curred for the medical education of such
individual, or
‘‘(ii) reasonable living expenses while
away from home in order to attend an edu-
cational institution described in section
170(b)(1)(A)(ii) for the medical education
of such individual.
‘‘(C) PHYSICIAN.—For purposes of sub-
paragraph (A), the term ‘physician’ has the
meaning given such term by section 1861(r)(1)
of the Social Security Act.
‘‘(D) MEDICALLY
UNDERSERVED
RURAL
AREA.—The term ‘medically underserved rural
area’ means any rural area which is a medically
underserved area (as defined in section 330(b)
or 1302(7) of the Public Health Service Act).’’.
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(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of the enactment of this Act.
SEC. 502. REQUIRING DEVELOPMENT OF COMPREHENSIVE
PLANS 
FOR 
MEDICALLY 
UNDERSERVED
RURAL POPULATIONS.
(a) STATE COMPREHENSIVE PLANS FOR MEDICALLY
UNDERSERVED RURAL AREAS.—As a requirement of an
agreement between the Secretary of Health and Human
Services and a State under section 103(d)(2) in the case
of a State that has one or more rural areas that are medi-
cally underserved areas (as defined in section 330(b) or
1302(7) of the Public Health Service Act), the State shall
develop and submit to the Secretary a comprehensive plan
that addresses the health care needs of the populations
in all such areas. The comprehensive plan shall utilize, in
the most efficient manner possible and to the maximum
extent possible, the current resources of Federal, State,
and local governments, including public health clinics.
(b) RESPONSE TO MANAGED COMPETITION.—
(1) IN GENERAL.—If a State is required to es-
tablish a comprehensive plan under subsection (a),
the State may not operate a managed competition
system (described in paragraph (2)) unless, with re-
118
spect to each medically underserved rural area in the
State, either—
(A) the system provides assurances with
respect to the timely and cost-effective delivery
of appropriate health care in that area, or
(B) the application of the system is waived
with respect to residents of such area and there
is established, in accordance with the plan, an
alternative method of assuring the timely and
cost-effective delivery of appropriate health care
in that area.
(2) 
MANAGED
COMPETITION
SYSTEM
DE-
SCRIBED.—A managed competition system described
in this paragraph is a system under which a State
assures access to basic health care services for all
residents through the enrollment of such residents
under a certified health plan offered by a health in-
surance purchasing cooperative or similar entity.
SEC. 503. INCLUSION OF TRANSPORTATION COSTS FOR
PHYSICIANS IN UNDERSERVED RURAL AREAS
IN THE PRACTICE INDEX UNDER THE MEDI-
CARE PHYSICIAN PAYMENT SCHEDULE.
(a) IN GENERAL.—Section 1848(e) of the Social Se-
curity Act (42 U.S.C. 1395w–4(e)) is amended—
119
(1) by adding at the end of paragraph (1) the
following new subparagraph:
‘‘(D) INCLUSION
OF
TRANSPORTATION
COSTS.—In establishing the index under sub-
paragraph (A)(i), the Secretary shall take into
account transportation costs associated with
providing health care services to patients in
rural health professional shortage areas (as des-
ignated under section 332 of the Public Health
Service Act).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
January 1, 1994.
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