300
‘‘(B) a description of the effectiveness of
the air medical transport programs assisted
with grant proceeds; and
‘‘(C) such other information as the Sec-
retary may require.
‘‘(2) TERMINATION OF FUNDINGS.—In review-
ing reports submitted under paragraph (1), if the
Secretary determines that a State is not using
amounts provided under a grant awarded under this
section in accordance with the State plan submitted
by the State under subsection (b), the Secretary may
terminate the payment of amounts under such grant
to the State until such time as the Secretary deter-
mines that the State comes into compliance with
such plan.
‘‘(g) DEFINITION.—As used in this section, the term
‘rural areas’ means geographic areas that are located out-
side of standard metropolitan statistical areas, as identi-
fied by the Secretary.
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to make grants under
this section, $15,000,000 for fiscal year 1995, and such
sums as may be necessary for each for fiscal years 1996
and 1997.’’.
301
SEC. 505. DEMONSTRATION PROJECTS TO ENCOURAGE THE
DEVELOPMENT AND OPERATION OF RURAL
HEALTH NETWORKS.
(a) IN GENERAL.—
(1) ESTABLISHMENT.—
(A) IN
GENERAL.—The Secretary may
conduct a demonstration project under which
public and private entities may apply for waiv-
ers of any of the provisions of title XVIII and
XIX of the Social Security Act in order to oper-
ate rural health networks (as defined in sub-
section (d)(1)) which—
(i) improve the access of medicare
beneficiaries (as defined in subsection
(d)(2)) and medicaid beneficiaries (as de-
fined in subsection (d)(3)) to health care
services;
(ii) improve the quality of health care
services furnished to such beneficiaries;
and
(iii) improve the outcomes of health
care services furnished to such bene-
ficiaries.
(B) NUMBER OF WAIVERS.—The Secretary
may grant waivers to operate rural health net-
works under the demonstration project con-
302
ducted under this section to a number of public
and private entities determined appropriate by
the Secretary.
(2) APPLICATIONS.—
(A) IN GENERAL.—In order to participate
in the demonstration project conducted under
this subsection, a public or private entity desir-
ing to operate a rural health network shall sub-
mit an application to the Secretary which meets
the requirements of subparagraph (B). Such
application shall be submitted in such manner
and at such time as the Secretary shall require.
(B) REQUIREMENTS.—An application sub-
mitted by a public or private entity under this
subsection must provide—
(i) a description of the health care
providers participating in the rural health
network;
(ii) a description of the geographic
area served by the rural health networks;
(iii) information demonstrating that
the public or private entity has consulted
with interested parties with respect to the
operation of the rural health network, in-
303
cluding local government entities and com-
munity groups;
(iv) a description of the operational
structure of the rural health network, in-
cluding whether the network is a managed
care entity or a fee-for-service provider;
(v) a proposal for how payments
should be made to the rural health network
under titles XVIII and XIX of the Social
Security Act, including a statement as to
whether such payments should be made
pursuant to the provisions of such titles or
pursuant to an alternative payment meth-
odology described in the application;
(vi) assurances that medicare bene-
ficiaries served by the rural health network
will receive care and services of the same
quality as the care and services received by
other beneficiaries under title XVIII of the
Social Security Act;
(vii) assurances that medicaid bene-
ficiaries served by the rural health network
will receive care and services of the same
quality as the care and services received by
304
other beneficiaries under title XIX of the
Social Security Act;
(viii) a description of how the rural
health network plans to handle any situa-
tion in which a medicare beneficiary or
medicaid beneficiary served by the network
receives health care services from providers
outside the network;
(ix) assurances that the rural health
network is furnishing health care services
to a significant number of individuals who
are not receiving benefits under titles
XVIII and XIX of the Social Security Act;
(x) assurances that through sharing
of facilities, land, and equipment, the rural
health network will result in a reduction of
total capital costs for the area served by
the network;
(xi) a plan for cooperation in service
delivery by health care providers partici-
pating in the rural health network that
demonstrates the elimination of unneces-
sary duplication and, when appropriate,
the consolidation of specialized services
within the area served by the network;
305
(xii) evidence that the rural health
network furnishes services which address
the special access needs of the medicare
beneficiaries and medicaid beneficiaries
served by the network;
(xiii) evidence of capability and exper-
tise in network planning and management;
and
(xiv) such additional information as
the Secretary determines appropriate.
(C) APPROVAL OF APPLICATION.—
(i) INITIAL REVIEW.—Within 60 days
after an application is submitted by a pub-
lic or private entity under this subsection,
the Secretary shall review and approve
such application or provide the entity with
a list of the modifications that are nec-
essary for such application to be approved.
(ii) ADDITIONAL REVIEW.—Within 60
days after a public or private entity resub-
mits any application under this subsection,
the Secretary shall review and approve
such application or provide the entity with
a summary of which items included on the
list provided to the State under clause (i)
306
remain unsatisfied. An entity may resub-
mit an application under this subpara-
graph as many times as necessary to gain
approval.
(3) COORDINATION WITH OTHER PROGRAMS.—
The Secretary shall coordinate the demonstration
project conducted under this subsection with any
other relevant Federal or State programs in order to
prevent duplication and improve the quality and de-
livery of health care services to medicare bene-
ficiaries and medicaid beneficiaries.
(4) PAYMENTS TO NETWORKS.—
(A) IN GENERAL.—The Secretary shall de-
termine the amount of payments to be made
under titles XVIII and XIX to a rural health
network 
participating 
in 
a 
demonstration
project under this subsection based on historic
costs adjusted based on population and geo-
graphic area as the Secretary determines appro-
priate to take into account the costs of furnish-
ing health care services in the area served by
the network.
(B) BUDGET NEUTRALITY.—The Secretary
shall provide that in carrying out the dem-
onstration project under this section, the aggre-
307
gate payments under titles XVIII and XIX of
the Social Security Act to providers participat-
ing in a rural health network shall be no great-
er or lesser than what such payments would
have been if such providers were not participat-
ing in such network.
(5) DURATION
OF
WAIVERS.—Any waiver
granted under the demonstration project conducted
under this subsection shall be granted for a period
determined appropriate by the Secretary. The Sec-
retary may terminate such a waiver at any time if
the Secretary determines that the rural health net-
work has failed to furnish health care services in ac-
cordance with the terms of the waiver.
(6) REPORTS.—
(A) IN GENERAL.—Each public or private
entity receiving a waiver to operate a rural
health network under the demonstration project
conducted under this subsection shall, through
an independent entity, evaluate the network and
submit interim and final reports to the Sec-
retary at such times and containing such infor-
mation as the Secretary shall require.
(B) REPORT
TO
CONGRESS.—Not later
than 60 days after the receipt of a final report
308
by a rural health network under subparagraph
(A) the Secretary shall submit a report to
Congress.
(b) GRANTS
FOR
THE DEVELOPMENT
OF RURAL
HEALTH NETWORKS.—
(1) IN GENERAL.—The Secretary shall award
grants to public and private entities which have re-
ceived a waiver under the demonstration project con-
ducted under subsection (a) for the purpose of plan-
ning and developing rural health networks.
(2) APPLICATION PROCESS.—
(A) SUBMISSION OF APPLICATION.—Each
public or private entity desiring to receive a
grant under this subsection shall submit an ap-
plication to the Secretary at such time and con-
taining such information as the Secretary deter-
mines appropriate.
(B) CONSIDERATION OF APPLICATIONS.—
The Secretary shall develop a system for deter-
mining the priority for distributing grants
under this subsection and such grants shall be
distributed in accordance with such system.
(3) USE OF GRANT FUNDS.—A State that is
awarded grant funds under this subsection may use
such funds for all costs associated with assisting
309
public or private entities in planning and developing
rural health networks.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as may be necessary for the purposes of awarding
grants under this subsection.
(c) GRANTS
FOR
THE
OPERATION
OF
RURAL
HEALTH NETWORKS.—
(1) IN GENERAL.—The Secretary shall award
grants to public and private entities which have re-
ceived a waiver under the demonstration project con-
ducted under subsection (a) for the operation of
rural health networks.
(2) APPLICATION PROCESS.—
(A) SUBMISSION
OF
APPLICATION.—Any
public or private entity which desires to receive
a grant under this subsection shall submit an
application to the Secretary at such time and
containing such information as the Secretary
determines appropriate.
(B) CONSIDERATION OF APPLICATIONS.—
The Secretary shall develop a system for deter-
mining the priority for distributing grants
under this subsection and such grants shall be
distributed in accordance with such priority.
310
(3) USE OF GRANT FUNDS.—A public or pri-
vate entity that is awarded grant funds under this
subsection may use such funds for all costs associ-
ated with operating a rural health network.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as may be necessary for the purposes of awarding
grants under this subsection.
(d) DEFINITIONS.—For purposes of this section:
(1) RURAL
HEALTH
NETWORK.—The term
‘‘rural health network’’ means a formal cooperative
arrangement between participating hospitals, physi-
cians, and other health care providers which—
(A) furnishes health care services to medi-
care beneficiaries and medicaid beneficiaries;
(B) is located in a rural area; and
(C) is governed by a board of directors se-
lected by participating health care providers.
(2) MEDICAID BENEFICIARY.—The term ‘‘med-
icaid beneficiary’’ means an individual receiving ben-
efits under title XIX of the Social Security Act who
resides in a rural area or who receives health care
services from a health care provider located in a
rural area.
311
(3) MEDICARE BENEFICIARY.—The term ‘‘med-
icare beneficiary’’ means an individual receiving ben-
efits under title XVIII of the Social Security Act
who resides in a rural area or who receives health
care services from a health care provider located in
a rural area.
(4) RURAL
AREA.—The term ‘‘rural area’’
means a rural area as described in section
1886(d)(2)(D).
Subtitle B—Primary Care Provider
Education
SEC. 511. GRADUATE MEDICAL EDUCATION DEMONSTRA-
TION PROJECTS.
Part C of title VII of the Public Health Service Act
(42 U.S.C. 293j et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 753. GRADUATE MEDICAL EDUCATION DEMONSTRA-
TION PROJECTS.
‘‘(a) STATE DEMONSTRATION PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary of Health
and Human Services (hereafter referred to in this
section as the ‘Secretary’) acting through the Ad-
ministrator of the Health Resources and Services
Administration shall provide for the establishment of
demonstration projects in no more than 7 States for
312
the purpose of testing and evaluating mechanisms to
increase the number and percentage of medical stu-
dents entering primary care practice relative to those
entering nonprimary care practice through the use
of funds otherwise available for direct graduate med-
ical education costs under section 1886(h) of the So-
cial Security Act.
‘‘(2) APPLICATIONS.—
‘‘(A) IN GENERAL.—Each State desiring to
conduct a demonstration project under this sub-
section shall prepare and submit to the Sec-
retary an application, at such time, in such
manner, and containing such information as the
Secretary may require, including—
‘‘(i) information demonstrating that
the State has consulted with interested
parties with respect to conducting a dem-
onstration project under this subsection,
including State medical associations, State
hospital associations, and medical schools
located in the State;
‘‘(ii) an assurance that in conducting
a demonstration project under this sub-
section no single teaching hospital located
in the State will lose more than 10 percent
313
of such hospital’s approved medical resi-
dency positions in any year; and
‘‘(iii) an explanation of a plan for
evaluating the project.
‘‘(B) APPROVAL
OF
APPLICATIONS.—A
State that submits an application under sub-
paragraph (A) may begin a demonstration
project under this subsection—
‘‘(i) upon approval of such application
by the Secretary; or
‘‘(ii) at the end of the 60-day period
beginning on the date such application is
submitted, unless the Secretary denies the
application during such period.
‘‘(C) NOTICE
AND
COMMENT.—A State
shall issue a public notice on the date it sub-
mits an application under subparagraph (A)
which contains a general description of the pro-
posed demonstration project. Any interested
party may comment on the proposed dem-
onstration project to the State or the Secretary
during the 30-day period beginning on the date
the public notice is issued.
‘‘(3) 
FUNDING
FOR
DEMONSTRATION
PROJECTS.—
314
‘‘(A) ALLOCATION OF GME FUNDS.—
‘‘(i) IN GENERAL.—For each year a
State conducts a demonstration project
under this subsection the Secretary shall
pay to such State an amount equal to the
total amount available to hospitals located
in the State under section 1886(h) of the
Social Security Act. In the case of a State
which establishes any health care training
consortium under clause (ii)(II), the State
shall designate a teaching hospital for each
resident assigned to such a consortium
which the Secretary shall use to calculate
the State’s payment amount under such
section. Such teaching hospital shall be the
hospital where the resident receives the
majority of the resident’s hospital-based,
nonambulatory training experience.
‘‘(ii) USE
OF
FUNDS.—Each State
that receives a payment under clause (i)
shall use such funds to conduct activities
which test and evaluate mechanisms to in-
crease the number and percentage of medi-
cal students entering primary care practice
315
relative to those entering nonprimary care
practice as follows:
‘‘(I) 
The 
State 
may 
apply
weighting factors that are different
than the weighting factors set forth in
section 1886(h)(4)(C) of the Social
Security Act for the purpose of mak-
ing direct graduate medical education
payments. 
In 
applying 
different
weighting factors, the State may re-
quire entities receiving payments to
use a portion of such payments to in-
crease stipends paid to primary care
residents relative to nonprimary care
residents.
‘‘(II) The State may use funds to
provide for the establishment and op-
eration of any health care training
consortium. The State shall make
payments to any such consortium
through an entity identified by the
consortium as appropriate for receiv-
ing payment on behalf of the consor-
tium. The consortium shall have dis-
cretion in determining the purposes
316
for which such payments may be used
and may direct such payments to con-
sortium medical schools for primary
care medical student education pro-
grams.
‘‘(B) GRANTS FOR PLANNING AND EVAL-
UATIONS.—
‘‘(i) IN
GENERAL.—The Secretary
may award grants to States conducting
demonstration projects under this sub-
section for the purpose of developing and
evaluating such projects. A State may con-
duct such an evaluation or contract with a
private entity to conduct the evaluation.
Each State desiring to receive a grant
under this subparagraph shall prepare and
submit to the Secretary an application, at
such time, in such manner, and containing
such information as the Secretary may
require.
‘‘(ii) AUTHORIZATION OF APPROPRIA-
TIONS.—There are authorized to be appro-
priated such sums as may be necessary to
carry out the purposes of this subpara-
graph for fiscal years 1995 through 2003.
317
‘‘(4) MAINTENANCE
OF
EFFORT.—Any funds
available for the activities covered by a demonstra-
tion project conducted under this subsection shall
supplement, and shall not supplant, funds that are
expended for similar purposes under any State, re-
gional, or local program.
‘‘(b) CONSORTIUM DEMONSTRATION PROGRAM.—
‘‘(1) IN
GENERAL.—The Secretary, acting
through the Administrator of the Health Resources
and Services Administration, shall provide for the
establishment of demonstration projects for no more
than 7 health care training consortia which are lo-
cated in States that are not conducting a demonstra-
tion project under subsection (a) for the purpose of
testing and evaluating mechanisms to increase the
number and percentage of medical students entering
primary care practice relative to those entering
nonprimary care practice through the use of funds
otherwise available for direct graduate medical edu-
cation costs under section 1886(h) of the Social
Security Act.
‘‘(2) APPLICATIONS.—
‘‘(A) IN
GENERAL.—Each health care
training consortium desiring to conduct a dem-
onstration project under this subsection shall
318
prepare and submit to the Secretary an applica-
tion, at such time, in such manner, and con-
taining such information as the Secretary may
require, including an explanation of a plan for
evaluating the project.
‘‘(B) APPROVAL
OF
APPLICATIONS.—A
consortium that submits an application under
subparagraph (A) may begin a demonstration
project under this subsection—
‘‘(i) upon approval of such application
by the Secretary; or
‘‘(ii) at the end of the 60-day period
beginnning on the date such application is
submitted, unless the Secretary denies the
application during such period.
‘‘(3) 
FUNDING
FOR
DEMONSTRATION
PROJECTS.—
‘‘(A) ALLOCATION OF GME FUNDS.—
‘‘(i) IN GENERAL.—For each year a
consortium 
conducts 
a 
demonstration
project under this subsection the Secretary
shall pay to such consortium an amount
equal to the total amount available to hos-
pitals that are members of the consortium
under section 1886(h) of the Social Secu-
319
rity Act. The consortium shall designate a
teaching hospital for each resident as-
signed to the consortium which the Sec-
retary shall use to calculate the consor-
tium’s payment amount under such sec-
tion. Such teaching hospital shall be the
hospital where the resident receives the
majority of the resident’s hospital-based,
nonambulatory training experience.
‘‘(ii) USE OF FUNDS.—
‘‘(I) 
TESTING
AND
EVALUA-
TION.—Each consortium that receives
a payment under clause (i) shall use
such funds to conduct activities which
test and evaluate mechanisms to in-
crease the number and percentage of
medical students entering primary
care practice relative to those entering
nonprimary care practice.
‘‘(II) ESTABLISHMENT AND OP-
ERATION.—Each consortium that re-
ceives a payment under clause (i) may
also use such funds for the establish-
ment and operation of the consortium.
The Secretary shall make payments to
320
the consortium through an entity
identified by the consortium as appro-
priate for receiving payment on behalf
of the consortium. The consortium
shall have discretion in determining
the purposes for which such payments
may be used and may direct such pay-
ments to consortium medical schools
for primary care medical student edu-
cation programs.
‘‘(B) GRANTS FOR PLANNING AND EVAL-
UATIONS.—
‘‘(i) IN
GENERAL.—The Secretary
may award grants to consortia conducting
demonstration projects under this sub-
section for the purpose of developing and
evaluating such projects. Each consortium
desiring to receive a grant under this sub-
paragraph shall prepare and submit to the
Secretary an application, at such time, in
such manner, and containing such infor-
mation as the Secretary may require.
‘‘(ii) AUTHORIZATION OF APPROPRIA-
TIONS.—There are authorized to be appro-
priated such sums as may be necessary to
321
carry out the purposes of this subpara-
graph for fiscal years 1995 through 2003.
‘‘(4) MAINTENANCE
OF
EFFORT.—Any funds
available for the activities covered by a demonstra-
tion project conducted under this subsection shall
supplement, and shall not supplant, funds that are
expended for similar purposes under any State, re-
gional, or local program.
‘‘(c) DURATION.—A demonstration project under this
section shall be conducted for a period not to exceed 8
years. The Secretary may terminate a project if the Sec-
retary determines that the State or consortium conducting
the project is not in substantial compliance with the terms
of the application approved by the Secretary under this
section.
‘‘(d) EVALUATIONS AND REPORTS.—
‘‘(1) EVALUATIONS.—Each State or consortium
that conducts a demonstration project under this
section shall submit to the Secretary a final evalua-
tion of such project within 360 days of the termi-
nation of such project and such interim evaluations
as the Secretary may require.
‘‘(2) REPORTS TO CONGRESS.—Not later than
360 days after the first demonstration project under
this section begins, and annually thereafter for each
322
year in which a project is conducted under this sec-
tion, the Secretary shall submit a report to the ap-
propriate committees of the Congress which evalu-
ates the effectiveness of the demonstration projects
conducted under this section and includes any legis-
lative recommendations determined appropriate by
the Secretary.
‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) AMBULATORY TRAINING SITES.—The term
‘ambulatory training sites’ includes, but is not lim-
ited to, health maintenance organizations, federally
qualified health centers, community health centers,
migrant health centers, rural health clinics, nursing
homes, hospice, and other community-based provid-
ers, including private practices.
‘‘(2) HEALTH CARE TRAINING CONSORTIUM.—
The term ‘health care training consortium’ means a
State, regional, or local entity which—
‘‘(A) includes teaching hospitals, ambula-
tory training sites, and one or more schools of
medicine located in the same geographic region;
and
‘‘(B) is operated in a manner intended to
ensure that by the end of the 8-year demonstra-
tion project at least 50 percent of the graduates
323
of the schools included in the entity will become
primary care providers during the 1-year period
immediately following the date such graduates
complete their residency training.
‘‘(3) PRIMARY CARE.—The term ‘primary care’
means family practice, general internal medicine,
and general pediatrics, and may also include obstet-
rics and gynecology if such care is person-centered,
comprehensive care that is not organ or problem
specific.’’.
SEC. 512. FUNDING UNDER MEDICARE FOR TRAINING IN
NONHOSPITAL-OWNED FACILITIES.
(a) RESIDENCY TRAINING TIME IN NONHOSPITAL-
OWNED FACILITIES COUNTED IN DETERMINING FULL-
TIME-EQUIVALENT RESIDENTS FOR DIRECT GRADUATE
MEDICAL
EDUCATION
PAYMENTS.—Section
1886(h)(4)(E) of the Social Security Act (42 U.S.C.
1395ww(h)(4)(E)) is amended by striking ‘‘, if the hos-
pital incurs all, or substantially all, of the costs for the
training program in that setting’’.
(b) RESIDENCY TRAINING TIME IN NONHOSPITAL-
OWNED FACILITIES COUNTED IN DETERMINING FULL-
TIME-EQUIVALENT RESIDENTS FOR INDIRECT MEDICAL
EDUCATION PAYMENTS.—
324
(1) IN GENERAL.—Section 1886(d)(5)(B)(iv) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395ww(d)(5)(B)(iv)) is amended to read as follows:
‘‘(iv) In determining such adjustment,
the Secretary shall count interns and resi-
dents—
‘‘(I) assigned to any patient serv-
ice environment which is part of the
hospital’s approved medical residency
training program (as defined in sec-
tion 1886(h)(5)(A)), or
‘‘(II) providing services at any
entity receiving a grant under section
330 of the Public Health Service Act
that is under the ownership or control
of the hospital (if the hospital incurs
all, or substantially all, of the costs of
the services furnished by such interns
and residents),
as part of the calculation of the full-time-
equivalent number of interns and resi-
dents.’’.
(2) ADJUSTMENT OF INDIRECT TEACHING AD-
JUSTMENT FACTOR TO ACHIEVE BUDGET NEUTRAL-
ITY.—Section 1886(d)(5)(B)(ii) of the Social Secu-
325
rity Act (42 U.S.C. 1395ww(d)(5)(B)(ii)) is amend-
ed to read as follows:
‘‘(ii)(I) For purposes of clause (i)(II),
the indirect teaching adjustment factor is
equal to 1.89 × (((1+r × t) to the nth
power)¥1).
‘‘(II) For purposes of subclause (i)—
‘‘(aa) ‘r’ is the ratio of the hos-
pital’s full-time-equivalent interns and
residents to beds;
‘‘(bb) ‘t’ is the ratio of the num-
ber of full-time-equivalent interns and
residents of all hospitals paid under
this paragraph and used in the cal-
culation of ‘r’ on June 1, 1993, to the
number of full-time-equivalent interns
and residents of all hospitals paid
under this paragraph and used in the
calculation of ‘r’ on June 1, 1994;
and
‘‘(cc) ‘n’ equals .405.’’.
326
SEC. 513. INCREASE IN NATIONAL HEALTH SERVICE CORPS
FUNDING.
(a) GENERAL AUTHORIZATION.—Section 338H(b)(1)
of the Public Health Service Act (42 U.S.C. 254q(b)(1))
is amended—
(1) by striking ‘‘1991, and’’ and inserting
‘‘1991,’’; and
(2) by striking ‘‘through 2000’’ and inserting ‘‘,
1993, and 1994, $120,000,000 for fiscal year 1995,
and such sums as may be necessary for each of the
fiscal years 1996 through 1998’’.
(b) GRANTS FOR STATE LOAN REPAYMENT PRO-
GRAMS.—Section 338I(i)(1) of such Act (42 U.S.C. 254q–
1(i)(1)) is amended to read as follows:
‘‘(1) IN GENERAL.—The Secretary shall ensure
that not less than one-third of the amounts appro-
priated under section 338H(b)(1) for each fiscal
year shall be made available for grants under this
section.’’.
SEC. 514. INCREASE IN HEALTH PROFESSIONS FUNDING
FOR PRIMARY CARE PHYSICIANS.
(a) FAMILY MEDICINE.—Section 747(d)(1) of the
Public Health Service Act (42 U.S.C. 293k(d)(1)) is
amended by striking ‘‘for each of’’ and all that follows
through ‘‘1995’’ and inserting ‘‘for each of the fiscal years
1993 and 1994, $67,500,000 for fiscal year 1995, and
327
such sums as may be necessary for each of the fiscal years
1996 and 1997’’.
(b) GENERAL INTERNAL MEDICINE AND PEDIAT-
RICS.—Section 748(c) of the Public Health Service Act
(42 U.S.C. 293l(c)) is amended by striking ‘‘for each of’’
and all that follows through ‘‘1995’’ and inserting ‘‘for
each of the fiscal years 1993 and 1994, $31,250,000 for
fiscal year 1995, and such sums as may be necessary for
each of the fiscal years 1996 and 1997’’.
SEC. 515. HEALTH PROFESSIONS FUNDING FOR NURSE
PRACTITIONERS AND PHYSICIAN ASSISTANTS
PROGRAMS.
(a) PHYSICIAN ASSISTANTS.—Section 750(d)(1) of
the Public Health Service Act (42 U.S.C. 293n(d)(1)) is
amended by striking ‘‘for each of the fiscal years 1993
through 1995’’ and inserting ‘‘for each of the fiscal years
1993 and 1994, $11,250,000 for fiscal year 1995, and
such sums as may be necessary for each of the fiscal years
1996 and 1997.’’.
(b) NURSE PRACTITIONERS.—Section 822(d) of such
Act (42 U.S.C. 296m(d)) is amended by striking ‘‘1994.’’
and inserting ‘‘1994, $25,000,000 for fiscal year 1995,
and such sums as may be necessary for each of the fiscal
years 1996 and 1997’’.
328
(c) ADVANCED
EDUCATION
OR
PROFESSIONAL
NURSES.—Section 830(f)(1) of the Public Health Service
Act (42 U.S.C. 297(f)(1)) is amended by striking ‘‘for
each of’’ and all that follows through ‘‘1995’’ and insert-
ing ‘‘for each of the fiscal years 1993 and 1994,
$25,000,000 for fiscal year 1995, and such sums as may
be necessary for each of the fiscal years 1996 and 1997’’.
(d) SCHOLARSHIP PROGRAM FOR PHYSICIAN ASSIST-
ANTS.—Part C of title VII of the Public Health Service
Act (42 U.S.C. 293j et seq.), as amended by section 511,
is further amended by adding at the end thereof the fol-
lowing new section:
‘‘SEC. 754. PHYSICIAN ASSISTANT SCHOLARSHIP PROGRAM.
‘‘(a) IN GENERAL.—The Secretary may award grants
to public and nonprofit private entities to enable such enti-
ties to meet the cost of providing traineeships for individ-
uals in baccalaureate and advanced-degree programs in
order to educate such individuals to serve in and prepare
for practice as physician assistants.
‘‘(b) 
SPECIAL
CONSIDERATION
IN
MAKING
GRANTS.—In awarding grants for traineeships under sub-
section (a), the Secretary shall give special consideration
to entities submitting applications for the conduct of
traineeship programs that conform to the guidelines estab-
lished by the Secretary under section 750(b)(2).
329
‘‘(c) PREFERENCES
IN AWARDING GRANTS.—The
Secretary may award a grant under subsection (a) only
if the grant applicant involved agrees that, in providing
traineeships under such grant, the applicant will give pref-
erence to individuals who are residents of health profes-
sional shortage areas designated under section 332.
‘‘(d) USE OF GRANT.—The Secretary may award a
grant under subsection (a) only if the grant applicant in-
volved agrees that traineeships provided with amounts re-
ceived under the grant will pay all or part of the costs
of—
‘‘(1) the tuition, books, and fees of the physi-
cian assistants’ program with respect to which the
traineeship is provided; and
‘‘(2) amounts necessary to pay the reasonable
living expenses of the individual involved during the
period for which the traineeship is provided.
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of carrying out this section, there are authorized
to be appropriated $25,000,000 for fiscal year 1995, and
such sums as may be necessary for each of the fiscal years
1996 and 1997.’’.
330
SEC. 516. STATE GRANTS TO INCREASE THE NUMBER OF
PRIMARY CARE PROVIDERS.
Part B of title III of the Public Health Service Act
(42 U.S.C. 243 et seq.) is amended by adding at the end
thereof the following new section:
‘‘SEC. 320A. PRIMARY CARE DEMONSTRATION GRANTS.
‘‘(a) 
AUTHORIZATION.—The 
Secretary, 
acting
through the Health Resources and Services Administra-
tion, shall award grants to States or nonprofit entities to
fund not less than 10 demonstration projects to enable
such States or entities to evaluate one or more of the
following:
‘‘(1) State mechanisms, including changes in
the scope of practice laws, to enhance the delivery of
primary care by nurse practitioners or physician
assistants.
‘‘(2) The feasibility of, and the most effective
means to train subspecialists to deliver primary care
as primary care providers.
‘‘(3) State mechanisms to increase the supply
or improve the distribution of primary care provid-
ers.
‘‘(b) APPLICATION.—To be eligible to receive a grant
under this section a State or nonprofit entity shall prepare
and submit to the Secretary an application at such time,
in such manner, and containing such information as the
331
Secretary may require. In reviewing such applications, the
Secretary may not consider whether or not a State permits
persons other than licensed physicians to perform legal
abortions, and nothing in this Act or any other Act may
be construed to conflict with any State law or regulation
or program guideline pertaining to the professional quali-
fications required to perform or assist in abortions.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated to carry out this section,
$9,000,000 for fiscal year 1995, and such sums as may
be necessary for each of the fiscal years 1996 through
1998.’’.
Subtitle C—Programs Relating to
Primary and Preventive Care
Services
SEC. 521. MATERNAL AND INFANT CARE COORDINATION.
(a) PURPOSE.—It is the purpose of this section to
assist States in the development and implementation of
coordinated, multidisciplinary, and comprehensive primary
health care and social services, and health and nutrition
education programs, designed to improve maternal and
child health.
(b) GRANTS FOR IMPLEMENTATION OF PROGRAMS.—
(1) AUTHORITY.—The Secretary of Health and
Human Services (hereafter referred to in this section
332
as the ‘‘Secretary’’) is authorized to award grants to
States to enable such States to plan and implement
coordinated, multidisciplinary, and comprehensive
primary health care and social service programs tar-
geted to pregnant women and infants.
(2) ELIGIBILITY.—To be eligible to receive a
grant under this section, a State shall—
(A) prepare and submit to the Secretary
an application at such time, in such manner,
and containing such information as the Sec-
retary may require;
(B) as part of the State application, pro-
vide assurances that under the program estab-
lished with amounts received under a grant, in-
dividuals will have access to a broad range of
primary health care services, social services,
and health and nutrition programs designed to
improve maternal and child health and a de-
scription of how coordination of such services
will improve maternal and child health based
upon the goals of ‘‘Healthy People 2000: Na-
tional Health Promotion and Disease Preven-
tion Objectives’’;
(C) as part of the State application, sub-
mit a plan for the coordination of existing and
333
proposed Federal and State resources, as ap-
propriate, including amounts provided under
the medicaid program under title XIX of the
Social Security Act, the special supplemental
food program under section 17 of the Child Nu-
trition Act of 1966, family planning programs,
substance abuse programs, State maternal and
child health programs funded under title V of
the Social Security Act, community and mi-
grant health center programs under the Public
Health Service Act, and other publicly, or where
practicable, privately supported programs;
(D) demonstrate that the major service
providers to be involved, including private non-
profit entities committed to improving maternal
and infant health, are committed to and in-
volved in the program to be funded with
amounts received under the grant;
(E) with respect to States with high infant
mortality rates among minority populations,
demonstrate the involvement of major health,
multiservice, professional, or civic group rep-
resentatives of such minority groups in the
planning and implementation of the State pro-
gram; and
334
(F) demonstrate that activities under the
State program are targeted to women of child-
bearing age, particularly those at risk for hav-
ing low birth weight babies.
(3) TERM OF GRANT.—A grant awarded under
this subsection shall be for a period of 5 years.
(4) USE OF AMOUNTS.—Amounts received by a
State under a grant awarded under this subsection
shall be used to establish a State program to provide
coordinated, multidisciplinary, and comprehensive
primary health care and social services, and health
and nutrition education program services, that are
designed to improve maternal and child health. Such
amounts shall not be used for the construction of
buildings or the purchase of medical equipment.
(5) MAINTENANCE OF EFFORT.—Any funds re-
ceived by a State under this subsection shall supple-
ment, and shall not supplant, funds that are ex-
pended for similar purposes by the State.
(6) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as may be necessary to carry out the purposes of
this subsection for fiscal years 1995 through 1998.
335
SEC. 522. FRONTIER STATES.
(a) IN GENERAL.—Frontier States (including Alaska,
Wyoming and Montana) may implement proposals to offer
preventive services, including mobile preventive health cen-
ters which may include centers equipped with various pre-
ventive health services, such as mammography, eye care,
X-ray, and other advanced equipment, and which may be
located on aircraft, watercraft, or other forms of transpor-
tation.
(b) DEMONSTRATION PROJECTS.—Frontier States
may participate in demonstration projects under this or
any other Act to improve recruitment, retention, and
training of rural providers, including nurse practitioners
and physician assistants. Such demonstration projects
shall give special consideration to the diverse needs of
Frontier States, and shall involve cooperative agreements
with a range of service delivery systems and teaching
hospitals.
Subtitle D—Limitation on Funding
for Abortions
SEC. 531. LIMITATION ON FUNDING FOR ABORTIONS.
(a) IN GENERAL.—Nothing in this title shall be con-
strued to authorize funding for any abortion, except to
prevent the death of the mother.
(b) NO REQUIREMENT ON STATE AS A CONDITION
OF FUNDING.—The provision of abortion services by a
336
State or any other entity shall not be regarded as a condi-
tion for participation in any grant or benefit authorized
in this title.
TITLE VI—ADMINISTRATIVE
COST SAVINGS
Subtitle A—Standardization of
Claims Processing
SEC. 
601. 
ADOPTION 
OF 
DATA 
ELEMENTS, 
UNIFORM
CLAIMS, AND UNIFORM ELECTRONIC TRANS-
MISSION STANDARDS.
(a) IN GENERAL.—The Secretary shall adopt stand-
ards relating to each of the following:
(1) Data elements for use in paper and elec-
tronic claims processing under health insurance
plans, as well as for use in utilization review and
management of care (including data fields, formats,
and medical nomenclature, and including plan bene-
fit and insurance information).
(2) Uniform claims forms (including uniform
procedure and billing codes for uses with such forms
and including information on other health insurance
plans that may be liable for benefits).
(3) Uniform electronic transmission of the data
elements (for purposes of billing and utilization
review).
337
Standards under paragraph (3) relating to electronic
transmission of data elements for claims for services shall
supersede (to the extent specified in such standards) the
standards adopted under paragraph (2) relating to the
submission of paper claims for such services. Standards
under paragraph (3) shall include protections to assure
the confidentiality of patient-specific information and to
protect against the unauthorized use and disclosure of in-
formation.
(b) USE OF TASK FORCES.—In adopting standards
under this section—
(1) the Secretary shall take into account the
recommendations of current task forces, including at
least the Workgroup on Electronic Data Inter-
change, National Uniform Billing Committee, the
Uniform Claim Task Force, and the Computer-based
Patient Record Institute;
(2) the Secretary shall consult with the Na-
tional Association of Insurance Commissioners (and,
with respect to standards under subsection (a)(3),
the American National Standards Institute); and
(3) the Secretary shall, to the maximum extent
practicable, seek to make the standards consistent
with any uniform clinical data sets which have been
adopted and are widely recognized.
338
(c) DEADLINES
FOR PROMULGATION.—The Sec-
retary shall promulgate the standards under—
(1) subsection (a)(1) relating to claims process-
ing data, by not later than 12 months after the date
of the enactment of this Act;
(2) subsection (a)(2) (relating to uniform
claims forms) by not later than 12 months after the
date of the enactment of this Act; and
(3)(A) subsection (a)(3) relating to trans-
mission of information concerning hospital and phy-
sicians services, by not later than 24 months after
the date of the enactment of this Act, and
(B) subsection (a)(3) relating to transmission
of information on other services, by such later date
as the Secretary may determine it to be feasible.
(d) REPORT TO CONGRESS.—Not later than 3 years
after the date of the enactment of this Act, the Secretary
shall report to Congress recommendations regarding re-
structuring the medicare peer review quality assurance
program given the availability of hospital data in elec-
tronic form.
SEC. 602. APPLICATION OF STANDARDS.
(a) IN GENERAL.—If the Secretary determines, at
the end of the 2-year period beginning on the date that
standards are adopted under section 601 with respect to
339
classes of services, that a significant number of claims for
benefits for such services under health insurance plans are
not being submitted in accordance with such standards,
the Secretary may require, after notice in the Federal
Register of not less than 6 months, that all providers of
such services must submit claims to health insurance plans
in accordance with such standards. The Secretary may
waive the application of such a requirement in such cases
as the Secretary finds that the imposition of the require-
ment would not be economically practicable.
(b) SIGNIFICANT NUMBER.—The Secretary shall
make an affirmative determination described in subsection
(a) for a class of services only if the Secretary finds that
there would be a significant, measurable additional gain
in efficiencies in the health care system that would be ob-
tained by imposing the requirement described in such
paragraph with respect to such services.
(c) APPLICATION OF REQUIREMENT.—
(1) IN GENERAL.—If the Secretary imposes the
requirement under subsection (a)—
(A) in the case of a requirement that im-
poses the standards relating to electronic trans-
mission of claims for a class of services, each
health care provider that furnishes such services
for which benefits are payable under a health
340
insurance plan shall transmit electronically and
directly to the plan on behalf of the beneficiary
involved a claim for such services in accordance
with such standards;
(B) any health insurance plan may reject
any claim subject to the standards adopted
under section 601 but which is not submitted in
accordance with such standards;
(C) it is unlawful for a health insurance
plan (i) to reject any such claim on the basis
of the form in which it is submitted if it is sub-
mitted in accordance with such standards or (ii)
to require, for the purpose of utilization review
or as a condition of providing benefits under
the plan, a provider to transmit medical data
elements that are inconsistent with the stand-
ards established under section 601(a)(1); and
(D) the Secretary may impose a civil
money penalty on any provider that knowingly
and repeatedly submits claims in violation of
such standards or on any health insurance plan
(other than a health insurance plan described in
paragraph (2)) that knowingly and repeatedly
rejects claims in violation of subparagraph (B),
341
in an amount not to exceed $100 for each such
claim.
The provisions of section 1128A of the Social Secu-
rity Act (other than the first sentence of subsection
(a) and other than subsection (b)) shall apply to a
civil money penalty under subparagraph (D) in the
same manner as such provisions apply to a penalty
or proceeding under section 1128A(a) of such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health insurance plan—
(A) that is subject to regulation by a
State, and
(B) with respect to which the Secretary
finds that—
(i) the State provides for application
of the standards established under section
601, and
(ii) the State regulatory program pro-
vides for the appropriate and effective en-
forcement of such standards.
(d) TREATMENT OF REJECTIONS.—If a plan rejects
a claim pursuant to subsection (c)(1), the plan shall per-
mit the person submitting the claim a reasonable oppor-
tunity to resubmit the claim on a form or in an electronic
342
manner that meets the requirements for acceptance of the
claim under such subsection.
SEC. 603. PERIODIC REVIEW AND REVISION OF STAND-
ARDS.
(a) IN GENERAL.—The Secretary shall—
(1) provide for the ongoing receipt and review
of comments and suggestions for changes in the
standards adopted and promulgated under section
601;
(2) establish a schedule for the periodic review
of such standards; and
(3) based upon such comments, suggestions,
and review, revise such standards and promulgate
such revisions.
(b) APPLICATION OF REVISED STANDARDS.—If the
Secretary under subsection (a) revises the standards de-
scribed in 601, then, in the case of any claim for benefits
submitted under a health insurance plan more than the
minimum period (of not less than 6 months specified by
the Secretary) after the date the revision is promulgated
under subsection (a)(3), such standards shall apply under
section 602 instead of the standards previously promul-
gated.
343
SEC. 604. HEALTH INSURANCE PLAN DEFINED.
In this title, the term ‘‘health insurance plan’’ has
the meaning given such term in section 101(b)(1) and in-
cludes—
(1) the medicare program (under title XVIII of
the Social Security Act) and medicare supplemental
health insurance, and
(2) a State medicaid plan (approved under title
XIX of such Act).
Subtitle B—Electronic Medical
Data Standards
SEC. 611. MEDICAL DATA STANDARDS FOR HOSPITALS AND
OTHER PROVIDERS.
(a) PROMULGATION
OF HOSPITAL DATA STAND-
ARDS.—
(1) IN GENERAL.—Between July 1, 1995, and
January 1, 1996, the Secretary shall promulgate
standards described in subsection (b) for hospitals
concerning electronic medical data.
(2) REVISION.—The Secretary may from time
to time revise the standards promulgated under this
subsection.
(b) CONTENTS OF DATA STANDARDS.—The stand-
ards promulgated under subsection (a) shall include at
least the following:
344
(1) A definition of a standard set of data ele-
ments for use by utilization and quality control peer
review organizations.
(2) A definition of the set of comprehensive
data elements, which set shall include for hospitals
the standard set of data elements defined under
paragraph (1).
(3) Standards for an electronic patient care in-
formation system with data obtained at the point of
care, including standards to protect against the un-
authorized use and disclosure of information.
(4) A specification of, and manner of presen-
tation of, the individual data elements of the sets
and system under this subsection.
(5) Standards concerning the transmission of
electronic medical data.
(6) Standards relating to confidentiality of pa-
tient-specific information.
The standards under this section shall be consistent with
standards for data elements established under section 601.
(c) OPTIONAL DATA STANDARDS FOR OTHER PRO-
VIDERS.—
(1) IN GENERAL.—The Secretary may promul-
gate standards described in paragraph (2) concern-
ing electronic medical data for providers that are not
345
hospitals. The Secretary may from time to time re-
vise the standards promulgated under this sub-
section.
(2) CONTENTS
OF
DATA
STANDARDS.—The
standards promulgated under paragraph (1) for non-
hospital providers may include standards comparable
to the standards described in paragraphs (2), (4),
and (5) of subsection (b) for hospitals.
(d) CONSULTATION.—In promulgating and revising
standards under this section, the Secretary shall—
(1) consult with the American National Stand-
ards Institute, hospitals, with the advisory commis-
sion established under section 615, and with other
affected providers, health insurance plans, and other
interested parties, and
(2) take into consideration, in developing stand-
ards under subsection (b)(1), the data set used by
the utilization and quality control peer review pro-
gram under part B of title XI of the Social Security
Act.
SEC. 612. APPLICATION OF ELECTRONIC DATA STANDARDS
TO CERTAIN HOSPITALS.
(a) MEDICARE REQUIREMENT
FOR SHARING
OF
HOSPITAL INFORMATION.—As of January 1, 1996, sub-
ject to paragraph (2), each hospital, as a requirement of
346
each participation agreement under section 1866 of the
Social Security Act, shall—
(1) maintain clinical data included in the set of
comprehensive 
data 
elements 
under 
section
611(b)(2) in electronic form on all inpatients,
(2) upon request of the Secretary or of a utili-
zation and quality control peer review organization
(with which the Secretary has entered into a con-
tract under part B of title XI of such Act), transmit
electronically the data set, and
(3) upon request of the Secretary, or of a fiscal
intermediary or carrier, transmit electronically any
data (with respect to a claim) from such data set,
in accordance with the standards promulgated under sec-
tion 611(a).
(b) WAIVER AUTHORITY.—Until January 1, 2000:
(1) The Secretary may waive the application of
the requirements of subsection (a) for a hospital
that is a small rural hospital, for such period as the
hospital demonstrates compliance with such require-
ments would constitute an undue financial hardship.
(2) The Secretary may waive the application of
the requirements of subsection (a) for a hospital
that is in the process of developing a system to pro-
vide the required data set and executes agreements
347
with its fiscal intermediary and its utilization and
quality control peer review organization that the hos-
pital will meet the requirements of subsection (a) by
a specified date (not later than January 1, 2000).
(3) The Secretary may waive the application of
the requirement of subsection (a)(1) for a hospital
that agrees to obtain from its records the data ele-
ments that are needed to meet the requirements of
paragraphs (2) and (3) of subsection (a) and agrees
to subject its data transfer process to a quality as-
surance program specified by the Secretary.
(c) APPLICATION TO HOSPITALS OF THE DEPART-
MENT OF VETERANS AFFAIRS.—
(1) IN GENERAL.—The Secretary of Veterans
Affairs shall provide that each hospital of the De-
partment of Veterans Affairs shall comply with the
requirements of subsection (a) in the same manner
as such requirements would apply to the hospital if
it were participating in the Medicare program.
(2) WAIVER.—The Secretary of Veterans Af-
fairs may waive the application of such requirements
to a hospital in the same manner as the Secretary
of Health and Human Services may waive under
subsection (b) the application of the requirements of
subsection (a).
348
SEC. 613. ELECTRONIC TRANSMISSION TO FEDERAL AGEN-
CIES.
(a) IN GENERAL.—Effective January 1, 2000, if a
provider is required under a Federal program to transmit
a data element that is subject to a presentation or trans-
mission standard (as defined in subsection (b)), the head
of the Federal agency responsible for such program (if not
otherwise authorized) is authorized to require the provider
to present and transmit the data element electronically in
accordance with such a standard.
(b) PRESENTATION
OR TRANSMISSION STANDARD
DEFINED.—In subsection (a), the term ‘‘presentation or
transmission standard’’ means a standard, promulgated
under subsection (b) or (c) of section 611, described in
paragraph (4) or (5) of section 611(b).
SEC. 614. LIMITATION ON DATA REQUIREMENTS WHERE
STANDARDS IN EFFECT.
(a) IN GENERAL.—If standards with respect to data
elements are promulgated under section 611 with respect
to a class of provider, a health insurance plan may not
require, for the purpose of utilization review or as a condi-
tion of providing benefits under the plan, that a provider
in the class—
(1) provide any data element not in the set of
comprehensive data elements specified under such
standards, or
349
(2) transmit or present any such data element
in a manner inconsistent with the applicable stand-
ards for such transmission or presentation.
(b) COMPLIANCE.—
(1) IN GENERAL.—The Secretary may impose a
civil money penalty on any health insurance plan
(other than a health insurance plan described in
paragraph (2)) that fails to comply with subsection
(a) in an amount not to exceed $100 for each such
failure. The provisions of section 1128A of the So-
cial Security Act (other than the first sentence of
subsection (a) and other than subsection (b)) shall
apply to a civil money penalty under this paragraph
in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a) of
such Act.
(2) PLANS SUBJECT TO EFFECTIVE STATE REG-
ULATION.—A plan described in this paragraph is a
health insurance plan that is subject to regulation by
a State, if the Secretary finds that—
(A) the State provides for application of
the requirement of subsection (a), and
(B) the State regulatory program provides
for the appropriate and effective enforcement of
such requirement with respect to such plans.
350
SEC. 615. ADVISORY COMMISSION.
(a) IN GENERAL.—The Secretary shall establish an
advisory commission including hospital executives, hospital
data base managers, physicians, health services research-
ers, and technical experts in collection and use of data
and operation of data systems. Such commission shall in-
clude, as ex officio members, a representative of the Direc-
tor of the National Institutes of Health, the Administrator
for Health Care Policy and Research, the Secretary of
Veterans Affairs, and the Director of the Centers for Dis-
ease Control.
(b) FUNCTIONS.—The advisory commission shall
monitor and advise the Secretary concerning—
(1) the standards established under this sub-
title, and
(2) operational concerns about the implementa-
tion of such standards under this subtitle.
(c) STAFF.—From the amounts appropriated under
subsection (d), the Secretary shall provide sufficient staff
to assist the advisory commission in its activities under
this section.
(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated $2,000,000 for each of
fiscal years 1995 through 2000 to carry out this section.
351
Subtitle C—Development and Dis-
tribution of Comparative Value
Information
SEC. 621. STATE COMPARATIVE VALUE INFORMATION PRO-
GRAMS FOR HEALTH CARE PURCHASING.
(a) PURPOSE.—In order to assure the availability of
comparative value information to purchasers of health
care in each State, the Secretary shall determine whether
each State is developing and implementing a health care
value information program that meets the criteria and
schedule set forth in subsection (b).
(b) CRITERIA
AND SCHEDULE
FOR STATE PRO-
GRAMS.—The criteria and schedule for a State health care
value information program in this subsection shall be spec-
ified by the Secretary as follows:
(1) The State begins promptly after enactment
of this Act to develop (directly or through contrac-
tual or other arrangements with 1 or more States,
coalitions of health insurance purchasers, other enti-
ties, or any combination of such arrangements)
information systems regarding comparative health
values.
(2) The information contained in such systems
covers at least the average prices of common health
care services (as defined in subsection (d)) and
352
health insurance plans, and, where available, meas-
ures of the variability of these prices within a State
or other market areas.
(3) The information described in paragraph (2)
is made available within the State beginning not
later than 1 year after the date of the enactment of
this Act, and is revised as frequently as reasonably
necessary, but at intervals of no greater than 1 year.
(4) Not later than 6 years after the date of the
enactment of this Act the State has developed infor-
mation systems that provide comparative costs, qual-
ity, and outcomes data with respect to health insur-
ance plans and hospitals and made the information
broadly available within the relevant market areas.
Nothing in this section shall preclude a State from provid-
ing additional information, such as information on prices
and benefits of different health insurance plans, available.
(c) GRANTS TO STATES FOR THE DEVELOPMENT OF
STATE PROGRAMS.—
(1) GRANT
AUTHORITY.—The Secretary may
make grants to each State to enable such State to
plan the development of its health care value infor-
mation program and, if necessary, to initiate the im-
plementation of such program. Each State seeking
such a grant shall submit an application therefor,
353
containing such information as the Secretary finds
necessary to assure that the State is likely to de-
velop and implement a program in accordance with
the criteria and schedule in subsection (b).
(2) OFFSET AUTHORITY.—If, at any time with-
in the 3-year period following the receipt by a State
of a grant under this subsection, the Secretary is re-
quired by section 622 to implement a health care in-
formation program in the State, the Secretary may
recover the amount of the grant under this sub-
section by offset against any other amount payable
to the State under the Social Security Act. The
amount of the offset shall be made available (from
the appropriation account with respect to which the
offset was taken) to the Secretary to carry out such
section.
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated such sums
as are necessary to make grants under this sub-
section, to remain available until expended.
(d) COMMON HEALTH CARE SERVICES DEFINED.—
In this section, the term ‘‘common health care services’’
includes such procedures as the Secretary may specify and
any additional health care services which a State may wish
to include in its comparative value information program.
354
(e) STATE DEFINED.—In this title, the term ‘‘State’’
includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, and American Samoa.
SEC. 622. FEDERAL IMPLEMENTATION.
(a) IN GENERAL.—If the Secretary finds, at any
time, that a State has failed to develop or to continue to
implement a health care value information program in ac-
cordance with the criteria and schedule in section 621(b),
the Secretary shall take the actions necessary, directly or
through grants or contract, to implement a comparable
program in the State.
(b) FEES.—Fees may be charged by the Secretary
for the information materials provided pursuant to a pro-
gram under this section. Any amounts so collected shall
be deposited in the appropriation account from which the
Secretary’s costs of providing such materials were met,
and shall remain available for such purposes until
expended.
SEC. 623. COMPARATIVE VALUE INFORMATION CONCERN-
ING FEDERAL PROGRAMS.
(a) DEVELOPMENT.—The head of each Federal agen-
cy with responsibility for the provision of health insurance
or of health care services to individuals shall promptly de-
velop health care value information relating to each pro-
gram that such head administers and covering the same
355
types of data that a State program meeting the criteria
of section 621(b) would provide.
(b) DISSEMINATION OF INFORMATION.—Such infor-
mation shall be made generally available to States and to
providers and consumers of health care services.
Subtitle D—Preemption of State
Quill Pen Laws
SEC. 631. PREEMPTION OF STATE QUILL PEN LAWS.
(a) IN GENERAL.—Effective January 1, 1996, no ef-
fect shall be given to any provision of State law that re-
quires medical or health insurance records (including bill-
ing information) to be maintained in written, rather than
electronic form.
(b) SECRETARIAL AUTHORITY.—The Secretary may
issue regulations to carry out subsection (a). Such regula-
tions may provide for such exceptions to subsection (a)
as the Secretary determines to be necessary to prevent
fraud and abuse, with respect to controlled substances,
and in such other cases as the Secretary deems appro-
priate.
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TITLE VIII—ANTI-FRAUD AND
ANTI-RATIONING
Subtitle A—Criminal Prosecution
of Health Care Fraud
SEC. 701. PENALTIES FOR HEALTH CARE FRAUD.
(a) IN GENERAL.—Chapter 63 of title 18, United
States Code, is amended by adding at the end the
following:
‘‘§ 1347. Health care fraud
‘‘(a) OFFENSE.—Whoever, being a health care pro-
vider, knowingly engages in any scheme or artifice to de-
fraud any person in connection with the provision of
health care shall be fined under this title or imprisoned
not more than 5 years, or both.
‘‘(b) DEFINITION.—In this section, the term ‘health
care provider’ means—
‘‘(1) a physician, nurse, dentist, therapist, phar-
macist, or other professional provider of health care;
and
‘‘(2) a hospital, health maintenance organiza-
tion, pharmacy, laboratory, clinic, or other health
care facility or a provider of medical services, medi-
cal devices, medical equipment, or other medical
supplies.
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(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of chapter 63 of title 18, United States
Code, is amended by adding at the end the following new
item:
‘‘1347. Health care fraud.’’.
SEC. 702. REWARDS FOR INFORMATION LEADING TO PROS-
ECUTION AND CONVICTION.
Section 3059 of title 18, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(c)(1) In special circumstances and in the Attorney
General’s sole discretion, the Attorney General may make
a payment of up to $10,000 to a person who furnishes
information unknown to the Government relating to a pos-
sible prosecution under section 1101.
‘‘(2) A person is not eligible for a payment under
paragraph (1) if—
‘‘(A) the person is a current or former officer
or employee of a Federal or State government agen-
cy or instrumentality who furnishes information dis-
covered or gathered in the course of government em-
ployment;
‘‘(B) the person knowingly participated in the
offense;
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‘‘(C) the information furnished by the person
consists of allegations or transactions that have been
disclosed to the public—
‘‘(i) in a criminal, civil, or administrative
proceeding;
‘‘(ii) in a congressional, administrative or
General Accounting Office report, hearing,
audit, or investigation; or
‘‘(iii) by the news media, unless the person
is the original source of the information; or
‘‘(D) when, in the judgment of the Attorney
General, it appears that a person whose illegal ac-
tivities are being prosecuted or investigated could
benefit from the award.
‘‘(3) For the purposes of paragraph (2)(C)(iii), the
term ‘original source’ means a person who has direct and
independent knowledge of the information that is fur-
nished and has voluntarily provided the information to the
Government prior to disclosure by the news media.
‘‘(4) Neither the failure of the Attorney General to
authorize a payment under paragraph (1) nor the amount
authorized shall be subject to judicial review.’’.