550
Title III, Subtitle B
Subtitle B—Academic Health
Centers
PART 1—FORMULA PAYMENTS
SEC. 3101. FEDERAL FORMULA PAYMENTS TO ACADEMIC
HEALTH CENTERS.
(a) IN GENERAL.—In the case of a qualified aca-
demic health center or qualified teaching hospital that in
accordance with section 3102 submits to the Secretary a
written request for calendar year 1996 or any subsequent
calendar year, the Secretary shall make payments for such
year to the center or hospital for the purpose specified
in subsection (b). The Secretary shall make the payments
in an amount determined in accordance with section 3103,
and may administer the payments as a contract, grant,
or cooperative agreement.
(b) PAYMENTS FOR COSTS ATTRIBUTABLE TO ACA-
DEMIC NATURE OF INSTITUTIONS.—The purpose of pay-
ments under subsection (a) is to assist eligible institutions
with costs that are not routinely incurred by other entities
in providing health services, but are incurred by such insti-
tutions in providing health services by virtue of the aca-
demic nature of such institutions. Such costs include—
(1) with respect to productivity in the provision
of health services, costs resulting from the reduced
551
Title III, Subtitle B
rate of productivity of faculty due to teaching re-
sponsibilities;
(2) the uncompensated costs of clinical re-
search; and
(3) exceptional costs associated with the treat-
ment of health conditions with respect to which an
eligible institution has specialized expertise (includ-
ing treatment of rare diseases, treatment of unusu-
ally severe conditions, and providing other special-
ized health care).
(c) DEFINITIONS.—
(1) ACADEMIC HEALTH CENTER.—For purposes
of this subtitle, the term ‘‘academic health center’’
means an entity that—
(A) operates a school of medicine or osteo-
pathic medicine, as defined in section 799 of
the Public Health Service Act;
(B) operates, or is affiliated with, one or
more other types of schools or programs de-
scribed in such section, or with one or more
schools of nursing (as defined in section 853 of
such Act); and
(C) operates, or is affiliated with, one or
more teaching hospitals.
552
Title III, Subtitle B
(2) TEACHING HOSPITAL.—For purposes of this
subtitle, the term ‘‘teaching hospital’’ means a hos-
pital that operates an approved physician training
program (as defined in section 3011(b)).
(3) QUALIFIED
CENTER
OR
HOSPITAL.—For
purposes of this subtitle:
(A) The term ‘‘qualified academic health
center’’ means an academic health center that
operates a teaching hospital.
(B) The term ‘‘qualified teaching hospital’’
means any teaching hospital other than a teach-
ing hospital that is operated by an academic
health center.
(4) ELIGIBLE INSTITUTION.—For purposes of
this subtitle, the term ‘‘eligible institution’’, with re-
spect to a calendar year, means a qualified academic
health center, or a qualified teaching hospital, that
submits to the Secretary a written request in accord-
ance with section 3102.
SEC. 3102. REQUEST FOR PAYMENTS.
(a) IN GENERAL.—For purposes of section 3101, a
written request for payments under such section is in ac-
cordance with this section if the qualified academic health
center or qualified teaching hospital involved submits the
request not later than the date specified by the Secretary;
553
Title III, Subtitle B
the request is accompanied by each funding agreement de-
scribed in this part; and the request is in such form, is
made in such manner, and contains such agreements, as-
surances, and information as the Secretary determines to
be necessary to carry out this part.
(b) CONTINUED STATUS
AS ACADEMIC HEALTH
CENTER.—A funding agreement for payments under sec-
tion 3101 is that the qualified academic health center or
qualified teaching hospital involved will maintain status as
such a center or hospital, respectively. For purposes of
this subtitle, the term ‘‘funding agreement’’, with respect
to payments under section 3101 to such a center or hos-
pital, means that the Secretary may make the payments
only if the center or hospital makes the agreement in-
volved.
SEC. 3103. AVAILABILITY OF FUNDS FOR PAYMENTS; AN-
NUAL AMOUNT OF PAYMENTS.
(a) ANNUAL
ACADEMIC
HEALTH
CENTER
AC-
COUNT.—Subject to section 3104, the amount available
for a calendar year for making payments under section
3101 (constituting an account to be known as the annual
academic health center account) is the following, as appli-
cable to the calendar year:
(1) In the case of calendar year 1996,
$3,100,000,000.
554
Title III, Subtitle B
(2) In the case of each of the calendar years
1997 and 1998, $3,200,000,000.
(3) In the case of calendar year 1999,
$3,700,000,000.
(4) In the case of calendar year 2000,
$3,800,000,000.
(5) In the case of each subsequent calendar
year, the amount specified in paragraph (4) in-
creased by the product of such amount and the gen-
eral health care inflation factor (as defined in sub-
section (d)).
(b) AMOUNT OF PAYMENTS FOR INDIVIDUAL ELIGI-
BLE INSTITUTIONS.—The amount of payments required
in section 3101 to be made to an eligible institution for
a calendar year is an amount equal to the product of—
(1) the annual academic health center account
available for the calendar year; and
(2) the percentage constituted by the ratio of—
(A) an amount equal to the product of—
(i) the portion of the gross receipts of
the institution for the preceding calendar
year that was derived from providing serv-
ices to patients (both inpatients and out-
patients); and
555
Title III, Subtitle B
(ii) the indirect teaching adjustment
factor 
determined 
under 
section
1886(d)(5)(B)(ii) of the Social Security
Act (as in effect before January 1, 1998)
and—
(I) applicable to patients dis-
charged from the institution (or hos-
pitals of the institution, as the case
may be) in such preceding year; or
(II) in the case of patients dis-
charged on or after January 1, 1998,
applicable to patients discharged in
calendar year 1997; to
(B) the sum of the respective amounts de-
termined under subparagraph (A) for eligible
institutions.
(c) REPORT REGARDING MODIFICATIONS IN FOR-
MULA.—Not later than July 1, 1996, the Secretary shall
submit to the Congress a report containing any rec-
ommendations of the Secretary regarding policies for allo-
cating amounts under subsection (a) among eligible insti-
tutions. In making such recommendations, the Secretary
shall consider the costs described in section 3101(b) that
are incurred by such institutions.
(d) DEFINITION.—For purposes of this subtitle:
556
Title III, Subtitle B
(1) The term ‘‘annual academic health center
account’’ means the account established pursuant to
subsection (a).
(2) The term ‘‘general health care inflation fac-
tor’’, with respect to a year, has the meaning given
such term in section 6001(a)(3) for such year.
SEC. 3104. ADDITIONAL FUNDING PROVISIONS.
(a) SOURCES OF FUNDS FOR ANNUAL ACADEMIC
HEALTH CENTER ACCOUNT.—The amount specified in
section 3103(a) for the annual academic health center ac-
count for a calendar year shall be derived from the sources
specified in subsection (b).
(b) 
CONTRIBUTIONS
FROM
MEDICARE
TRUST
FUNDS, REGIONAL ALLIANCES, AND CORPORATE ALLI-
ANCES.—For purposes of subsection (a), the sources spec-
ified in this subsection for a calendar year are the fol-
lowing:
(1) Transfers made by the Secretary under sec-
tion 4052.
(2) Payments made by regional alliances under
section 1353 and—
(A) in the case of each of the calendar
years 1996 and 1997, transferred in an amount
equal to 50 percent of such payments made for
the calendar year involved; and
557
Title III, Subtitle B
(B) in the case of calendar year 1998 and
each subsequent calendar year, transferred in
an amount equal to the aggregate regional alli-
ance portion determined under subsection
(c)(2)(A).
(3) The transfer made under subsection (d)(1).
(c) CONTRIBUTIONS FROM REGIONAL
AND COR-
PORATE ALLIANCES.—
(1) DETERMINATION OF AGGREGATE REGIONAL
AND CORPORATE ALLIANCE AMOUNT.—For purposes
regarding the provision of funds for the annual aca-
demic health center account for a calendar year
(other than calendar year 1996 or 1997), the Sec-
retary shall determine an aggregate regional and
corporate alliance amount, which amount is to be
paid by such alliances pursuant to paragraphs
(2)(B) and (3) of subsection (b), respectively, and
which amount shall be equal to the difference
between—
(A) the amount specified in section
3103(a) for the annual academic health center
account for such year; and
(B) the amount transferred under section
4052 for the year.
558
Title III, Subtitle B
(2) ALLOCATION OF AMOUNT AMONG REGIONAL
AND CORPORATE ALLIANCES.—With respect to the
aggregate regional and corporate alliance amount
determined under paragraph (1) for a calendar year
(other than calendar year 1996 or 1997)—
(A) the aggregate regional alliance portion
of such amount is the product of such amount
and the percentage constituted by the ratio of
the total plan payments of regional alliances to
the combined total plan payments of regional
alliances and corporate alliances; and
(B) the aggregate corporate alliance por-
tion of such amount is the product of such
amount and the percentage constituted by the
ratio of the total plan payments of corporate al-
liances to such combined total plan payments.
(d) COMPLIANCE REGARDING CORPORATE ALLI-
ANCES.—
(1) IN GENERAL.—Effective January 15 of cal-
endar year 1996 and each subsequent calendar year,
there is hereby transferred to the Secretary, out of
any 
money 
in 
the 
Treasury 
not 
otherwise
appropriated—
559
Title III, Subtitle B
(A) in the case of each of the calendar
years 1996 and 1997, an amount equal to the
difference between—
(i) the amount specified in section
3103(a) for the annual academic health
center account for the calendar year in-
volved; and
(ii) the sum of the amount transferred
under section 4052 for such year and the
amount 
transferred 
under 
subsection
(b)(2)(A) for such year; and
(B) in the case of calendar year 1998 and
each subsequent calendar year, an amount
equal to the aggregate corporate alliance por-
tion determined under subsection (c)(2)(B) for
the calendar year involved.
(2) MANNER OF COMPLIANCE.—The payment
by corporate alliances of the tax imposed under sec-
tion 3461 of the Internal Revenue Code of 1986 (as
added by section 7121 of this Act), together with the
transfer made in paragraph (1)(B) for the calendar
year involved, is deemed to be the payment required
pursuant to subsection (c)(1) for corporate alliances
for such year.
560
Title III, Subtitle B
(3) GRADUATE NURSE EDUCATION.—Effective
January 15 of calendar year 1996 and each subse-
quent calendar year, there is hereby transferred to
the Secretary, out of any money in the Treasury not
otherwise appropriated, 50 percent of the amount
specified in section 3063(b) with respect to the an-
nual graduate nurse training account.
(e) DEFINITIONS.—For purposes of this subtitle, the
term ‘‘plan payments’’ with respect to a regional or cor-
porate alliance, means the amount paid to health plans
by the alliance.
PART 2—ACCESS OF PATIENTS TO ACADEMIC
HEALTH CENTERS
SEC. 3131. CONTRACTS FOR ENSURING ACCESS TO CEN-
TERS.
(a) CONTRACTS WITH HEALTH PLANS.—Regional
and corporate health alliances under this Act shall ensure
that, in accordance with subsection (b), the health plans
of the alliances enter into sufficient contracts with eligible
centers to ensure that enrollees in regional or corporate
alliance health plans, as appropriate, receive the special-
ized treatment expertise of such centers, subject to such
exceptions as the Secretary may provide.
(b) UTILIZATION OF SPECIALIZED TREATMENT EX-
PERTISE OF CENTERS.—Contracts under subsection (a)
561
Title III, Subtitle B
between eligible centers and health plans are in accordance
with this subsection if the contracts provide that, with re-
spect to health conditions within the specialized treatment
expertise of the centers, health plans will refer medical
cases involving such conditions to the centers.
(c) SPECIALIZED
TREATMENT
EXPERTISE.—For
purposes of this subtitle, the term ‘‘specialized treatment
expertise’’, with respect to treatment of a health condition
by an academic health center, means expertise in treating
rare diseases, treating unusually severe conditions, and
providing other specialized health care.
SEC. 3132. DISCRETIONARY GRANTS REGARDING ACCESS
TO CENTERS.
(a) RURAL
INFORMATION
AND
REFERRAL
SYS-
TEMS.—The Secretary may make grants to eligible centers
for the establishment and operation of information and re-
ferral systems to provide the services of such centers to
rural regional and corporate health alliance health plans.
(b) OTHER PURPOSES REGARDING URBAN
AND
RURAL AREAS.—The Secretary may make grants to eligi-
ble centers to carry out activities (other than activities car-
ried out under subsection (a)) for the purpose of providing
the services of eligible centers to residents of rural or
urban communities who otherwise would not have ade-
quate access to such services.
562
Title III, Subtitle C
Subtitle C—Health Research
Initiatives
PART 1—PROGRAMS FOR CERTAIN AGENCIES
SEC. 3201. BIOMEDICAL AND BEHAVIORAL RESEARCH ON
HEALTH PROMOTION AND DISEASE PREVEN-
TION.
Section 402(f) of the Public Health Service Act (42
U.S.C. 282(f)), as amended by section 201 of Public Law
103–43 (107 Stat. 144), is amended—
(1) in paragraph (3), by redesignating subpara-
graphs (A) and (B) as clauses (i) and (ii), respec-
tively;
(2) by redesignating paragraphs (1) through
(3) as subparagraphs (A) through (C);
(3) by inserting ‘‘(1)’’ after ‘‘(f)’’; and
(4) by adding at the end the following para-
graph:
‘‘(2)(A) The Director of NIH, in collaboration with
the Associate Director for Prevention and with the heads
of the agencies of the National Institutes of Health, shall
ensure that such Institutes conduct and support bio-
medical and behavioral research on promoting health and
preventing diseases, disorders, and other health conditions
(including Alzheimer’s disease, breast cancer, heart dis-
ease, and stroke).
563
Title III, Subtitle C
‘‘(B) In carrying out subparagraph (A), the Director
of NIH shall give priority to conducting and supporting
research on child and adolescent health (including birth
defects), chronic and recurrent health conditions, repro-
ductive health, mental health, elderly health, substance
abuse, infectious diseases, health and wellness promotion,
and environmental health, and to resource development re-
lated to such research.’’.
SEC. 3202. HEALTH SERVICES RESEARCH.
Section 902 of the Public Health Service Act (42
U.S.C. 299a), as amended by section 2(b) of Public Law
102–410 (106 Stat. 2094), is amended by adding at the
end the following subsection:
‘‘(f) RESEARCH ON HEALTH CARE REFORM.—
‘‘(1) IN
GENERAL.—In carrying out section
901(b), the Administrator shall conduct and support
research on the reform of the health care system of
the United States, as directed by the National
Board.
‘‘(2) PRIORITIES.—In carrying out paragraph
(1), the Administrator shall give priority to the fol-
lowing:
‘‘(A) Conducting and supporting research
on the appropriateness and effectiveness of al-
ternative clinical strategies; the quality and out-
564
Title III, Subtitle C
comes of care; and administrative simplifica-
tion.
‘‘(B) Conducting and supporting research
on consumer choice and information resources;
the effects of health care reform on health de-
livery systems; workplace injury and illness pre-
vention; methods for risk adjustment; factors
influencing access to health care for under-
served populations; and primary care.
‘‘(C) The development of clinical practice
guidelines consistent with section 913, the dis-
semination of such guidelines consistent with
section 903, and the assessment of the effec-
tiveness of such guidelines.’’.
PART 2—FUNDING FOR PROGRAMS
SEC. 3211. AUTHORIZATIONS OF APPROPRIATIONS.
(a) BIOMEDICAL AND BEHAVIORAL RESEARCH ON
HEALTH PROMOTION AND DISEASE PREVENTION.—For
the purpose of carrying out activities pursuant to the
amendments made by section 3201, there are authorized
to be appropriated $400,000,000 for fiscal year 1995, and
$500,000,000 for each of the fiscal years 1996 through
2000.
(b) HEALTH SERVICES RESEARCH.—For the purpose
of carrying out activities pursuant to the amendments
565
Title III, Subtitle D
made by section 3202, there are authorized to be appro-
priated $150,000,000 for fiscal year 1995, $400,000,000
for fiscal year 1996, $500,000,000 for fiscal year 1997,
and $600,000,000 for each of the fiscal years 1998
through 2000.
(c) RELATION TO OTHER FUNDS.—The authoriza-
tions of appropriations established in subsections (a) and
(b) are in addition to any other authorizations of appro-
priations that are available for the purposes described in
such subsections.
Subtitle D—Core Functions of Pub-
lic Health Programs; National
Initiatives 
Regarding 
Preven-
tive Health
PART 1—FUNDING
SEC. 3301. AUTHORIZATIONS OF APPROPRIATIONS.
(a) CORE FUNCTIONS
OF PUBLIC HEALTH PRO-
GRAMS.—For the purpose of carrying out part 2, there
are authorized to be appropriated $12,000,000 for fiscal
year 
1995, 
$325,000,000 
for 
fiscal 
year 
1996,
$450,000,000 for fiscal year 1997, $550,000,000 for fis-
cal year 1998, $650,000,000 for fiscal year 1999, and
$750,000,000 for fiscal year 2000.
(b) NATIONAL INITIATIVES REGARDING HEALTH
PROMOTION AND DISEASE PREVENTION.—For the pur-
566
Title III, Subtitle D
pose of carrying out part 3, there are authorized to be
appropriated $175,000,000 for fiscal year 1996, and
$200,000,000 for each of the fiscal years 1997 through
2000.
(c) RELATION TO OTHER FUNDS.—The authoriza-
tions of appropriations established in subsections (a) and
(b) are in addition to any other authorizations of appro-
priations that are available for the purposes described in
such subsections.
PART 2—CORE FUNCTIONS OF PUBLIC HEALTH
PROGRAMS
SEC. 3311. PURPOSES.
Subject to the subsequent provisions of this subtitle,
the purposes of this part are to strengthen the capacity
of State and local public health agencies to carry out the
following functions:
(1) To monitor and protect the health of com-
munities against communicable diseases and expo-
sure to toxic environmental pollutants, occupational
hazards, harmful products, and poor quality health
care.
(2) To identify and control outbreaks of infec-
tious disease and patterns of chronic disease and in-
jury.
567
Title III, Subtitle D
(3) To inform and educate health care con-
sumers and providers about their roles in preventing
and controlling disease and the appropriate use of
medical services.
(4) To develop and test new prevention and
public health control interventions.
SEC. 3312. GRANTS TO STATES FOR CORE HEALTH FUNC-
TIONS.
(a) IN GENERAL.—The Secretary may make grants
to States for the purpose of carrying out one or more of
the functions described in subsection (b).
(b) CORE FUNCTIONS
OF PUBLIC HEALTH PRO-
GRAMS.—For purposes of subsection (a), the functions de-
scribed in this subsection are, subject to subsection to sub-
section (c), as follows:
(1) Data collection, activities related to popu-
lation health measurement and outcomes monitoring,
including the regular collection and analysis of pub-
lic health data, vital statistics, and personal health
services data and analysis for planning and needs
assessment purposes of data collected from health
plans through the information system under title V
of this Act.
568
Title III, Subtitle D
(2) Activities to protect the environment and to
assure the safety of housing, workplaces, food and
water, including the following activities:
(A) Monitoring the overall public health
quality and safety of communities.
(B) Assessing exposure to high lead levels
and water contamination.
(C) Monitoring sewage and solid waste dis-
posal, radiation exposure, radon exposure, and
noise levels.
(D) Abatement of lead-related hazards.
(E) Assuring recreation and worker safety.
(F) Enforcing public health safety and
sanitary codes.
(G) Other activities relating to promoting
the public health of communities.
(3) Investigation and control of adverse health
conditions, including improvements in emergency
treatment preparedness, cooperative activities to re-
duce violence levels in communities, activities to con-
trol the outbreak of disease, exposure related condi-
tions and other threats to the health status of indi-
viduals.
(4) Public information and education programs
to reduce risks to health such as use of tobacco, al-
569
Title III, Subtitle D
cohol and other drugs, sexual activities that increase
the risk to HIV transmission and sexually trans-
mitted diseases, poor diet, physical inactivity, and
low childhood immunization levels.
(5) Accountability and quality assurance activi-
ties, including monitoring the quality of personal
health services furnished by health plans and pro-
viders of medical and health services in a manner
consistent with the overall quality of care monitoring
activities undertaken under title V, and monitoring
communities’ overall access to health services.
(6) Provision of public health laboratory serv-
ices to complement private clinical laboratory serv-
ices and that screen for diseases and conditions such
as metabolic diseases in newborns, provide toxicology
assessments of blood lead levels and other environ-
mental toxins, diagnose sexually transmitted dis-
eases, tuberculosis and other diseases requiring part-
ner notification, test for infectious and food-borne
diseases, and monitor the safety of water and food
supplies.
(7) Training and education to assure provision
of care by all health professionals, with special em-
phasis placed on the training of public health profes-
sions 
including 
epidemiologists, 
biostatisticians,
570
Title III, Subtitle D
health educators, public health administrators,
sanitarians and laboratory technicians.
(8) Leadership, policy development and admin-
istration activities, including needs assessment, the
setting of public health standards, the development
of community public health policies, and the develop-
ment of community public health coalitions.
(c) RESTRICTIONS ON USE OF GRANT.—
(1) IN GENERAL.—A funding agreement for a
grant under subsection (a) for a State is that the
grant will not be expended—
(A) to provide inpatient services;
(B) to make cash payments to intended re-
cipients of health services;
(C) to purchase or improve land, purchase,
construct, or permanently improve (other than
minor remodeling) any building or other facil-
ity, or purchase major medical equipment;
(D) to satisfy any requirement for the ex-
penditure of non-Federal funds as a condition
for the receipt of Federal funds; or
(E) to provide financial assistance to any
entity other than a public or nonprofit private
entity.
571
Title III, Subtitle D
(2) LIMITATION
ON
ADMINISTRATIVE
EX-
PENSES.—A funding agreement for a grant under
subsection (a) is that the State involved will not ex-
pend more than 10 percent of the grant for adminis-
trative expenses with respect to the grant.
(d) MAINTENANCE OF EFFORT.—A funding agree-
ment for a grant under subsection (a) is that the State
involved will maintain expenditures of non-Federal
amounts for core health functions at a level that is not
less than the level of such expenditures maintained by the
State for the fiscal year preceding the first fiscal year for
which the State receives such a grant.
SEC. 3313. SUBMISSION OF INFORMATION.
The Secretary may make a grant under section 3312
only if the State involved submits to the Secretary the fol-
lowing information:
(1) A description of existing deficiencies in the
State’s public health system (at the State level and
the local level), using standards of sufficiency devel-
oped by the Secretary.
(2) A description of health status measures to
be improved within the State (at the State level and
the local level) through expanded public health func-
tions.
572
Title III, Subtitle D
(3) Measurable outcomes and process objectives
for improving health status and core health func-
tions for which the grant is to be expended.
(4) Information regarding each such function,
which—
(A) identifies the amount of State and
local funding expended on each such function
for the fiscal year preceding the fiscal year for
which the grant is sought; and
(B) provides a detailed description of how
additional Federal funding will improve each
such function by both the State and local public
health agencies.
(5) A description of the core health functions to
be carried out at the local level, and a specification
for each such function of—
(A) the communities in which the function
will be carried out; and
(B) the amount of the grant to be ex-
pended for the function in each community so
specified.
SEC. 3314. REPORTS.
A funding agreement for a grant under section 3312
is that the States involved will, not later than the date
573
Title III, Subtitle D
specified by the Secretary, submit to the Secretary a re-
port describing—
(1) the purposes for which the grant was ex-
pended; and
(2) describing the extent of progress made by
the State in achieving measurable outcomes and
process objectives described in section 3313(3).
SEC. 3315. APPLICATION FOR GRANT.
The Secretary may make a grant under section 3312
only if an application for the grant is submitted to the
Secretary, the application contains each agreement de-
scribed in this part, the application contains the informa-
tion required in section 3314, and the application is in
such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary
determines to be necessary to carry out this part.
SEC. 3316. GENERAL PROVISIONS.
(a) UNIFORM DATA SETS.—The Secretary, in con-
sultation with the States, shall develop uniform sets of
data for the purpose of monitoring the core health func-
tions carried out with grants under section 3312.
(b) DURATION OF GRANT.—The period during which
payments are made to a State from a grant under section
3312 may not exceed 5 years. The provision of such pay-
ments shall be subject to annual approval by the Secretary
574
Title III, Subtitle D
of the payments. This subsection may not be construed
as establishing a limitation on the number of grants under
such section that may be made to the State.
SEC. 3317. ALLOCATIONS FOR CERTAIN ACTIVITIES.
Of the amounts made available under section 3301
for a fiscal year for carrying out this part, the Secretary
may reserve not more than 5 percent for carrying out the
following activities:
(1) Technical assistance with respect to plan-
ning, development, and operation of core health
functions carried out under section 3312, including
provision of biostatistical and epidemiological exper-
tise and provision of laboratory expertise.
(2) Development and operation of a national in-
formation network among State and local health
agencies.
(3) Program monitoring and evaluation of core
health functions carried out under section 3312.
(4) Development of a unified electronic report-
ing mechanism to improve the efficiency of adminis-
trative management requirements regarding the pro-
vision of Federal grants to State public health agen-
cies.
SEC. 3318. DEFINITIONS.
For purposes of this part:
575
Title III, Subtitle D
(1) The term ‘‘funding agreement’’, with re-
spect to a grant under section 3312 to a State,
means that the Secretary may make the grant only
if the State makes the agreement involved.
(2) The term ‘‘core health functions’’, with re-
spect to a State, means the functions described in
section 3312(b).
PART 3—NATIONAL INITIATIVES REGARDING
HEALTH PROMOTION AND DISEASE PREVENTION
SEC. 3331. GRANTS FOR NATIONAL PREVENTION INITIA-
TIVES.
(a) IN GENERAL.—The Secretary may make grants
to entities described in subsection (b) for the purpose of
carrying out projects to develop and implement innovative
community-based strategies to provide for health pro-
motion and disease prevention activities for which there
is a significant need, as identified under section 1701 of
the Public Health Service Act.
(b) ELIGIBLE ENTITIES.—The entities referred to in
subsection (a) are agencies of State or local government,
private nonprofit organizations (including research institu-
tions), and coalitions that link two or more of these
groups.
(c) CERTAIN ACTIVITIES.—The Secretary shall en-
sure that projects carried out under subsection (a)—
576
Title III, Subtitle D
(1) reflect approaches that take into account
the special needs and concerns of the affected popu-
lations;
(2) are targeted to the most needy and vulner-
able population groups and geographic areas of the
Nation;
(3) examine links between various high priority
preventable health problems and the potential com-
munity-based remedial actions; and
(4) establish or strengthen the links between
the activities of agencies engaged in public health
activities with those of health alliances, health care
providers, and other entities involved in the personal
health care delivery system described in title I.
SEC. 3332. PRIORITIES.
(a) ESTABLISHMENT.—
(1) ANNUAL STATEMENT.—The Secretary shall
for each fiscal year develop a statement of proposed
priorities for grants under section 3331 for the fiscal
year.
(2) ALLOCATIONS
AMONG
PRIORITIES.—With
respect to the amounts available under section
3301(b) for the fiscal year for carrying out this part,
each statement under paragraph (1) for a fiscal year
shall include a specification of the percentage of the
577
Title III, Subtitle D
amount to be devoted to projects addressing each of
the proposed priorities established in the statement.
(3) PROCESS FOR ESTABLISHING PRIORITIES.—
Not later than January 1 of each fiscal year, the
Secretary shall publish a statement under paragraph
(1) in the Federal Register. A period of 60 days
shall be allowed for the submission of public com-
ments and suggestions concerning the proposed pri-
orities. After analyzing and considering comments
on the proposed priorities, the Secretary shall pub-
lish in the Federal Register final priorities (and as-
sociated reservations of funds) for approval of
projects for the following fiscal year.
(b) APPLICABILITY TO MAKING OF GRANTS.—
(1) IN
GENERAL.—The Secretary may make
grants under section 3331 for projects that the Sec-
retary determines—
(A) are consistent with the applicable final
statement of priorities and otherwise meets the
objectives described in subsection (a); and
(B) will assist in meeting a health need or
concern of a population served by a health plan
or health alliance established under title I.
(2) SPECIAL
CONSIDERATION
FOR
CERTAIN
PROJECTS.—In making grants under section 3331,
578
Title III, Subtitle D
the Secretary shall give special consideration to ap-
plicants that will carry out projects that, in addition
to being consistent with the applicable published pri-
orities under subsection (a) and otherwise meeting
the requirements of this part, have the potential for
replication in other communities.
SEC. 3333. SUBMISSION OF INFORMATION.
The Secretary may make a grant under section 3331
only if the applicant involved submits to the Secretary the
following information:
(1) A description of the activities to be con-
ducted, and the manner in which the activities are
expected to contribute to meeting one or more of the
priority health needs specified under section 3332
for the fiscal year for which the grant is initially
sought.
(2) A description of the total amount of Federal
funding requested, the geographic area and popu-
lations to be served, and the evaluation procedures
to be followed.
(3) Such other information as the Secretary de-
termines to be appropriate.
SEC. 3334. APPLICATION FOR GRANT.
The Secretary may make a grant under section 3331
only if an application for the grant is submitted to the
579
Title III, Subtitle E
Secretary, the application contains each agreement de-
scribed in this part, the application contains the informa-
tion required in section 3333, and the application is in
such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary
determines to be necessary to carry out this part.
Subtitle 
E—Health 
Services 
for
Medically 
Underserved 
Popu-
lations
PART 1—COMMUNITY AND MIGRANT HEALTH
CENTERS
SEC. 3401. AUTHORIZATIONS OF APPROPRIATIONS.
(a) GRANTS TO COMMUNITY AND MIGRANT HEALTH
CENTERS.—The Secretary shall make grants in accord-
ance with this part to migrant health centers and commu-
nity health centers.
(b) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of carrying out subsection (a), there are author-
ized to be appropriated $100,000,000 for each of the fiscal
years 1995 through 2000.
(c) RELATION TO OTHER FUNDS.—The authoriza-
tions of appropriations established in subsection (b) for
the purpose described in such subsection are in addition
to any other authorizations of appropriations that are
available for such purpose.
580
Title III, Subtitle E
(d) DEFINITIONS.—For purposes of this subtitle, the
terms ‘‘migrant health center’’ and ‘‘community health
center’’ have the meanings given such terms in sections
329(a)(1) and 330(a) of the Public Health Service Act,
respectively.
SEC. 3402. USE OF FUNDS.
(a) DEVELOPMENT, OPERATION, AND OTHER PUR-
POSES REGARDING CENTERS.—Subject to subsection (b),
grants under section 3401 to migrant health centers and
community health centers may be made only in accordance
with the conditions upon which grants are made under
sections 329 and 330 of the Public Health Service Act,
respectively.
(b) REQUIRED FINANCIAL RESERVES.—The Sec-
retary may authorize migrant health centers and commu-
nity health centers to expend a grant under section 3401
to establish and maintain the financial reserves required
under title I for providers of health services.
PART 2—INITIATIVES FOR ACCESS TO HEALTH
CARE
Subpart A—Purposes; Funding
SEC. 3411. PURPOSES.
Subject to the provisions of subparts B through D,
the purposes of this part are as follows:
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Title III, Subtitle E
(1) To improve access to health services for
urban and rural medically-underserved populations
through a program of flexible grants, contracts, and
loans.
(2) To facilitate transition to a system in which
medically-underserved populations have an adequate
choice of community-oriented providers and health
plans.
(3) To promote the development of community
practice networks and community health plans that
integrate health professionals and health care orga-
nizations supported through public funding with
other providers in medically underserved areas.
(4) To support linkages between providers of
health care for medically-underserved populations
and regional and corporate alliance health plans.
(5) To expand the capacity of community prac-
tice networks and community health plans in under-
served areas by increasing the number of practice
sites and by renovating and converting substandard
inpatient and outpatient facilities.
(6) To link providers in underserved areas with
each other and with regional health care institutions
and academic health centers through information
systems and telecommunications.
582
Title III, Subtitle E
(7) To support activities that enable medically
underserved populations to gain access to the health
care system and use it effectively.
SEC. 3412. AUTHORIZATIONS OF APPROPRIATIONS.
(a) DEVELOPMENT
OF
QUALIFIED
COMMUNITY
HEALTH PLANS AND PRACTICE GROUPS.—For the pur-
pose of carrying out subparts B and C, there are author-
ized to be appropriated $200,000,000 for fiscal year 1995,
$500,000,000 for fiscal year 1996, $600,000,000 for fis-
cal year 1997, $700,000,000 for fiscal year 1998,
$500,000,000 for fiscal year 1999, and $200,000,000 for
fiscal year 2000.
(b) RELATION TO OTHER FUNDS.—The authoriza-
tions of appropriations established in subsection (a) are
in addition to any other authorizations of appropriations
that are available for the purpose described in such sub-
section.
(c) 
RELATIONSHIP
TO
PROGRAM
REGARDING
SCHOOL-RELATED HEALTH SERVICES.—This section is
subject to section 3692.
583
Title III, Subtitle E
Subpart B—Development of Qualified Community
Health Plans and Practice Networks
SEC. 3421. GRANTS AND CONTRACTS FOR DEVELOPMENT
OF PLANS AND NETWORKS.
(a) IN GENERAL.—The Secretary may make grants
to and enter into contracts with consortia of public or pri-
vate health care providers for the development of qualified
community health plans and qualified community practice
networks. For purposes of this subtitle, the term ‘‘quali-
fied community health group’’ means such a health plan
or such a practice network.
(b) QUALIFIED COMMUNITY HEALTH PLANS.—For
purposes of this subtitle, the term ‘‘qualified community
health plan’’ means a health plan that meets the following
conditions:
(1) The health plan is a public or nonprofit pri-
vate entity whose principal purpose is, with respect
to the items and services included in the comprehen-
sive benefit package under title I, to provide each of
such items and services in one or more health pro-
fessional shortage areas or to provide such items and
services to a significant number of individuals who
are members of a medically underserved population.
(2) The health plan is a participant in one or
more health alliances.
584
Title III, Subtitle E
(3) Two or more of the categories specified in
subsection (d) are represented among the entities
providing health services through the health plan.
(c) 
QUALIFIED
COMMUNITY
PRACTICE
NET-
WORKS.—For purposes of this subtitle, the term ‘‘quali-
fied community practice network’’ means a consortium of
health care providers meeting the following conditions:
(1) The consortium is a public or nonprofit pri-
vate entity whose principal purpose is the purpose
described in subsection (b)(1).
(2) The consortium has an agreement with one
or more health plans that are participating in one or
more health alliances.
(3) The participation of health care providers in
the consortium is governed by a written agreement
to which each of the participating providers is a
party.
(4) Two or more of the categories described in
subsection (d) are represented among the entities
participating in the consortium.
(d) RELEVANT CATEGORIES OF ENTITIES.—For pur-
poses of subsections (b)(3) and (c)(4), the categories de-
scribed in this subsection are the following categories of
entities:
585
Title III, Subtitle E
(1) Physicians, other health professionals, or
health care institutions that provide health services
in one or more health professional shortage areas or
provide such services to a significant number of indi-
viduals who are members of a medically underserved
population, and that do not provide health services
under any of the programs specified in paragraphs
(2) through (7) or as employees of public entities.
(2) Entities providing health services under
grants under sections 329 and 330 of the Public
Health Service Act.
(3) Entities providing health services under
grants under sections 340 and 340A of such Act.
(4) Entities providing health services under
grants under section 1001 or title XXVI of such
Act.
(5) Entities providing health services under title
V of the Social Security Act.
(6) Entities providing health services through
rural health clinics and other federally qualified
health centers.
(7) Entities providing health services in urban
areas through programs under title V of the Indian
Health Care Improvement Act, and entities pro-
586
Title III, Subtitle E
viding outpatient health services through programs
under the Indian Self-Determination Act.
(8) Programs providing personal health services
and operating through State or local public health
agencies.
(e) RULE
OF CONSTRUCTION.—The consortia to
which the Secretary may make an award of financial as-
sistance under subsection (a) for the development of quali-
fied community practice networks include any health plan
that participates in one or more health alliances, without
regard to whether the health plan is a qualified community
health plan.
(f) SERVICE AREA.—In making an award of financial
assistance under subsection (a), the Secretary shall des-
ignate the geographic area with respect to which the quali-
fied community health group involved is to provide health
services. A funding agreement for such an award is that
the qualified community health group involved will provide
such services in the area so designated.
(g) DEFINITIONS.—For purposes of this subtitle:
(1) The term ‘‘health professional shortage
areas’’ means health professional shortage areas des-
ignated under section 332 of the Public Health Serv-
ice Act.
587
Title III, Subtitle E
(2) The term ‘‘medically underserved popu-
lation’’ means a medically underserved population
designated under section 330 of the Public Health
Service Act.
(3) The term ‘‘rural health clinic’’ has the
meaning given such term in section 1861(aa)(2) of
the Social Security Act.
(4) The term ‘‘federally qualified health cen-
ters’’ has the meaning given such term in section
1861(aa)(4) of the Social Security Act.
(5) The term ‘‘service area’’, with respect to a
qualified community health group, means the geo-
graphic area designated under subsection (f).
(6) The term ‘‘funding agreement’’, with re-
spect to an award of financial assistance under this
section, means that the Secretary may make the
award only if the applicant for the award makes the
agreement involved.
(7) The term ‘‘financial assistance’’, with re-
spect to awards under subsection (a), means a grant
or contract.
588
Title III, Subtitle E
SEC. 3422. PREFERENCES IN MAKING AWARDS OF ASSIST-
ANCE.
In making awards of financial assistance under sec-
tion 3421, the Secretary shall give preference to applicants
in accordance with the following:
(1) The Secretary shall give preference if 3 or
more of the categories described in subsection (d) of
such section will be represented in the qualified com-
munity health group involved (pursuant to sub-
section (b)(3) or (c)(4) of such section, as the case
may be).
(2) Of applicants receiving preference under
paragraph (1), the Secretary shall give a greater de-
gree of preference according to the extent to which
a greater number of categories are represented.
(3) Of applicants receiving preference under
paragraph (1), the Secretary shall give a greater de-
gree of preference if one of the categories rep-
resented is the category described in subsection
(d)(1) of such section.
SEC. 3423. CERTAIN USES OF AWARDS.
(a) IN GENERAL.—Subject to subsection (b), the pur-
poses for which an award of financial assistance under sec-
tion 3421 may be expended in developing a qualified com-
munity health group include the following:
589
Title III, Subtitle E
(1) Planning such group, including entering
into contracts between the recipient of the award
and health care providers who are to participate in
the group.
(2) Recruitment, compensation, and training of
health professionals and administrative staff.
(3) Acquisition, expansion, modernization, and
conversion of facilities, including for purposes of
providing for sites at which health services are to be
provided through such group.
(4) Acquisition and development of information
systems (exclusive of systems that the Secretary de-
termines are information highways).
(5) Such other expenditures as the Secretary
determines to be appropriate.
(b) TWENTY-YEAR OBLIGATION REGARDING SIGNIFI-
CANT CAPITAL EXPENDITURES; RIGHT OF RECOVERY.—
(1) IN GENERAL.—With respect to a facility for
which substantial capital costs are to paid from an
award of financial assistance under section 3421,
the Secretary may make the award only if the appli-
cant involved agrees that the applicant will be liable
to the United States for the amount of the award
expended for such costs, together with an amount
representing interest, if at any time during the 20-
590
Title III, Subtitle E
year period beginning on the date of completion of
the activities involved, the facility—
(A) ceases to be a facility utilized by a
qualified community health group, or by an-
other public or nonprofit private entity that
provides health services in one or more health
professional shortage areas or that provides
such services to a significant number of individ-
uals who are members of a medically under-
served population; or
(B) is sold or transferred to any entity
other than an entity that is—
(i) a qualified community health
group or other entity described in subpara-
graph (A); and
(ii) approved by the Secretary as a
purchaser or transferee regarding the facil-
ity.
(2) SUBORDINATION; WAIVERS.—The Secretary
may subordinate or waive the right of recovery
under paragraph (1), and any other Federal interest
that may be derived by virtue of an award of finan-
cial assistance under section 3421 from which sub-
stantial capital costs are to paid, if the Secretary de-
591
Title III, Subtitle E
termines that subordination or waiver will further
the objectives of this part.
SEC. 3424. ACCESSIBILITY OF SERVICES.
(a) SERVICES FOR CERTAIN INDIVIDUALS.—A fund-
ing agreement for an award of financial assistance under
section 3421 is that the qualified community health group
involved will ensure that the services of the group will be
accessible directly or through formal contractual arrange-
ments with its participating providers regardless of wheth-
er individuals who seek care from the applicant are eligible
persons under title I.
(b) USE
OF THIRD-PARTY PAYORS.—A funding
agreement for an award of financial assistance under sec-
tion 3421 is that the qualified community health group
involved will ensure that the health care providers of the
group are all approved by the Secretary as providers under
title XVIII of the Social Security Act and by the appro-
priate State agency as providers under title XIX of the
Social Security Act, and the applicant has made or will
make every reasonable effort to collect appropriate reim-
bursement for its costs in providing health services to indi-
viduals who are entitled to health benefits under title I
of this Act, insurance benefits under title XVIII of the
Social Security Act, medical assistance under a State plan
approved under title XIX of the Social Security Act, or
592
Title III, Subtitle E
to assistance for medical expenses under any other public
assistance program or private health insurance program.
(c) SCHEDULE OF FEES.—A funding agreement for
an award of financial assistance under section 3421 is that
the qualified community health group involved will—
(1) prepare a schedule of fees or payments for
the provision of health services not covered by title
I that is consistent with locally prevailing rates or
charges and designed to cover its reasonable costs of
operation and has prepared a corresponding sched-
ule of discounts to be applied to the payment of such
fees or payments (or payments of cost sharing
amounts owed in the case of covered benefits) which
discounts are applied on the basis of the patient’s
ability to pay; and
(2) make every reasonable effort to secure from
patients payment in accordance with such schedules,
and to collect reimbursement for services to persons
entitled to public or private insurance benefits or
other medical assistance on the basis of full fees
without application of discounts, except that the ap-
plicant will ensure that no person is denied service
based on the person’s inability to pay therefor.
(d) BARRIERS WITHIN SERVICE AREA.—A funding
agreement for an award of financial assistance under sec-
593
Title III, Subtitle E
tion 3421 is that the qualified community health group
involved will ensure that the following conditions are met:
(1) In the service area of the group, the group
will ensure that—
(A) the services of the group are accessible
to all residents; and
(B) to the maximum extent possible, bar-
riers to access to the services of the group are
eliminated, including barriers resulting from the
area’s physical characteristics, its residential
patterns, its economic, social and cultural
groupings, and available transportation.
(2) The group will periodically conduct reviews
within the service area of the group to determine
whether the conditions described in paragraph (1)
are being met.
(e) LIMITED ABILITY
TO SPEAK ENGLISH LAN-
GUAGE.—A funding agreement for an award of financial
assistance under section 3421 is that, if the service area
of the qualified community health group involved includes
a substantial number of individuals who have a limited
ability to speak the English language, the applicant will—
(1) maintain arrangements responsive to the
needs of such individuals for providing services to
594
Title III, Subtitle E
the extent practicable in the language and cultural
context most appropriate to such individuals; and
(2) maintain a sufficient number of staff mem-
bers who are fluent in both English and the lan-
guages spoken by such individuals, and will ensure
that the responsibilities of the employees include
providing guidance and assistance to such individ-
uals and to other staff members of the group.
SEC. 3425. ADDITIONAL AGREEMENTS.
(a) REQUIRED SERVICES.—A funding agreement for
an award of financial assistance under section 3421 is that
the qualified community health group involved will provide
enabling services (as defined in section 3461(g)) and all
of the items and services identified by the Secretary in
rules regarding qualified community health plans and
practice networks.
(b) QUALITY CONTROL SYSTEM.—A funding agree-
ment for an award of financial assistance under section
3421 is that the qualified community health group in-
volved will maintain a community-oriented, patient respon-
sive, quality control system under which the group, in ac-
cordance with regulations prescribed by the Secretary—
(1) conducts an ongoing quality assurance pro-
gram for the health services delivered by partici-
pating provider entities;
595
Title III, Subtitle E
(2) maintains a continuous community health
status improvement process; and
(3) maintains a system for development, com-
pilation, evaluation and reporting of information to
the public regarding the costs of operation, service
utilization patterns, availability, accessibility and ac-
ceptability of services, developments in the health
status of the populations served, uniform health and
clinical performance measures and financial per-
formance of the network or plan.
(c) USE
OF EXISTING RESOURCES.—A funding
agreement for an award of financial assistance under sec-
tion 3421 is that the applicant will, in developing the
qualified community health group involved, utilize existing
resources to the maximum extent practicable.
SEC. 3426. SUBMISSION OF CERTAIN INFORMATION.
(a) ASSESSMENT
OF NEED.—The Secretary may
make an award of financial assistance under section 3421
only if the applicant involved submits to the Secretary an
assessment of the need that the medically underserved
population or populations proposed to be served by the ap-
plicant have for health services and for enabling services
(as defined in section 3461(g)).
(b) DESCRIPTION
OF INTENDED EXPENDITURES;
RELATED INFORMATION.—The Secretary may make an
596
Title III, Subtitle E
award of financial assistance under section 3421 only if
the applicant involved submits to the Secretary the fol-
lowing information:
(1) A description of how the applicant will de-
sign the proposed quality community health plan or
practice network (including the service sites in-
volved) for such populations based on the assess-
ment of need.
(2) A description of efforts to secure, within the
proposed service area of such health plan or practice
network (including the service sites involved), finan-
cial and professional assistance and support for the
project.
(3) Evidence of significant community involve-
ment in the initiation, development and ongoing op-
eration of the project.
SEC. 3427. REPORTS; AUDITS.
A funding agreement for an award of financial assist-
ance under section 3421 is that the applicant involved
will—
(1) provide such reports and information on ac-
tivities carried out under this section in a manner
and form required by the Secretary; and
(2) provide an annual organization-wide audit
that meets applicable standards of the Secretary.
597
Title III, Subtitle E
SEC. 3428. APPLICATION FOR ASSISTANCE.
The Secretary may make an award of financial assist-
ance under section 3421 only if an application for the
award is submitted to the Secretary, the application con-
tains each funding agreement described in this subpart,
the application contains the information required in sec-
tion 3426, and the application is in such form, is made
in such manner, and contains such agreements, assur-
ances, and information as the Secretary determines to be
necessary to carry out this subpart.
SEC. 3429. GENERAL PROVISIONS.
(a) LIMITATION ON NUMBER OF AWARDS.—The Sec-
retary may not make more than two awards of financial
assistance under section 3421 for the same project.
(b) AMOUNT.—The amount of any award of financial
assistance under section 3421 for any project shall be de-
termined by the Secretary.
Subpart C—Capital Cost of Development of Qualified
Community Health Plans and Practice Networks
SEC. 3441. LOANS AND LOAN GUARANTEES REGARDING
PLANS AND NETWORKS.
(a) IN GENERAL.—The Secretary may make loans to,
and guarantee the payment of principal and interest to
Federal and non-Federal lenders on behalf of, public and
private entities for the capital costs of developing qualified
community health groups (as defined in section 3421(a)).
598
Title III, Subtitle E
(b) PREFERENCES; ACCESSIBILITY
OF SERVICES;
CERTAIN OTHER PROVISIONS.—The provisions of subpart
B apply to loans and loan guarantees under subsection
(a) to the same extent and in the same manner as such
provisions apply to awards of grants and contracts under
section 3421.
(c) USE OF ASSISTANCE.—
(1) IN GENERAL.—With respect to the develop-
ment of qualified community health groups, the cap-
ital costs for which loans made pursuant to sub-
section (a) may be expended are, subject to para-
graphs (2) and (3), the following:
(A) The acquisition, modernization, expan-
sion or construction of facilities, or the conver-
sion of unneeded hospital facilities to facilities
that will assure or enhance the provision and
accessibility of health care and enabling services
to medically underserved populations.
(B) The purchase of major equipment, in-
cluding equipment necessary for the support of
external and internal information systems.
(C) The establishment of reserves required
for furnishing services on a prepaid basis.
599
Title III, Subtitle E
(D) Such other capital costs as the Sec-
retary may determine are necessary to achieve
the objectives of this section.
(2) PRIORITIES REGARDING USE OF FUNDS.—
In providing loans or loan guarantees under sub-
section (a) for an entity, the Secretary shall give pri-
ority to authorizing the use of amounts for projects
for the renovation and modernization of medical fa-
cilities necessary to prevent or eliminate safety haz-
ards, avoid noncompliance with licensure or accredi-
tation standards, or projects to replace obsolete fa-
cilities.
(3) LIMITATION.—The Secretary may authorize
the use of amounts under subsection (a) for the con-
struction of new buildings only if the Secretary de-
termines that appropriate facilities are not available
through acquiring, modernizing, expanding or con-
verting existing buildings, or that construction new
buildings will cost less.
(d) AMOUNT OF ASSISTANCE.—The principal amount
of loans or loan guarantees under subsection (a) may,
when added to any other assistance under this section,
cover up to 100 percent of the costs involved.
SEC. 3442. CERTAIN REQUIREMENTS.
(a) LOANS.—
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Title III, Subtitle E
(1) IN GENERAL.—The Secretary may approve
a loan under section 3441 only if—
(A) the Secretary is reasonably satisfied
that the applicant for the project for which the
loan would be made will be able to make pay-
ments of principal and interest thereon when
due; and
(B) the applicant provides the Secretary
with reasonable assurances that there will be
available to it such additional funds as may be
necessary to complete the project or under-
taking with respect to which such loan is re-
quested.
(2) TERMS AND CONDITIONS.—Any loan made
under section 3441 shall, subject to the Federal
Credit Reform Act of 1990, meet such terms and
conditions (including provisions for recovery in case
of default) as the Secretary, in consultation with the
Secretary of the Treasury, determines to be nec-
essary to carry out the purposes of such section
while adequately protecting the financial interests of
the United States. Terms and conditions for such
loans shall include provisions regarding the fol-
lowing:
(A) Security.
618
Title III, Subtitle F
SEC. 3502. SUPPLEMENTAL FORMULA GRANTS FOR STATES
REGARDING ACTIVITIES UNDER PART B OF
TITLE XIX OF PUBLIC HEALTH SERVICE ACT.
(a) MENTAL HEALTH.—
(1) IN GENERAL.—In the case of any State that
submits to the Secretary an application in accord-
ance with subsection (e) for a fiscal year with re-
spect to mental health, the Secretary shall make a
grant to the State for the purposes authorized in
subsection (c) with respect to mental health. The
grant shall consist of the allotment determined
under paragraph (2) for the State for such year.
(2) DETERMINATION
OF
ALLOTMENT.—For
purposes of paragraph (1), the allotment under this
paragraph for a State for a fiscal year shall be de-
termined as follows: With respect to the amount re-
served under section 3501(b)(2) for carrying out
this subsection, section 1918 of the Public Health
Service Act shall be applied to such amount to the
same extent and in the same manner as such section
1918 is applied to the amount determined under sec-
tion 1918(a)(2) of such Act.
(b) SUBSTANCE ABUSE.—
(1) IN GENERAL.—In the case of any State that
submits to the Secretary an application in accord-
ance with subsection (e) for a fiscal year with re-
619
Title III, Subtitle F
spect to substance abuse, the Secretary shall make
a grant to the State for the purposes authorized in
subsection (c) with respect to substance abuse. The
grant shall consist of the allotment determined
under paragraph (2) for the State for such year.
(2) DETERMINATION
OF
ALLOTMENT.—For
purposes of paragraph (1), the allotment under this
paragraph for a State for a fiscal year shall be de-
termined as follows: With respect to the amount re-
served under section 3501(b)(2) for carrying out
this subsection, section 1933 of the Public Health
Service Act shall be applied to such amount to the
same extent and in the same manner as such section
1933 is applied to the amount determined pursuant
to sections 1933(a)(1)(B)(i) and 1918(a)(2)(A) of
such Act.
(c) USE OF GRANTS.—
(1) IN GENERAL.—With respect to the expendi-
ture of a grant to a State under subsection (a) or
(b), the Secretary—
(A) shall designate as authorized expendi-
tures such of the activities described in para-
graph (2) with respect to mental health and
substance abuse, respectively, as the Secretary
determines to be appropriate; and
620
Title III, Subtitle F
(B) may make the grant only if the State
agrees to expend the grant in accordance with
the activities so designated.
(2) DESCRIPTION OF ACTIVITIES.—The activi-
ties referred to in paragraph (1) are (as applicable
to the grant involved) the following:
(A) For the purpose of increasing the ac-
cess of individuals to services relating to mental
health and substance abuse, the following serv-
ices: Transportation, community and patient
outreach, patient education, translation serv-
ices, and such other services as the Secretary
determines to be appropriate regarding such
purpose.
(B) Improving the capacity of State and
local service systems to coordinate and monitor
mental health and substance abuse services, in-
cluding improvement of management informa-
tion systems, and establishment of linkages be-
tween providers of mental health and substance
abuse services and primary care providers and
health plans.
(C) Providing incentives to integrate public
and private systems for the treatment of mental
health and substance abuse disorders.
699
Title IV, Subtitle A
this title) provided to beneficiaries under case man-
agement, and the costs of incentives for physicians,
other providers, and beneficiaries; and
‘‘(10) apply such other criteria as the Secretary
considers appropriate.
‘‘(c) BONUS PAYMENTS PERMITTED.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this title, the Secretary may increase the
amount of payment otherwise provided under this
title for items and services furnished by individuals
who are members of a point-of-service network
under this section by a bonus payment (in such
amount as the Secretary may determine).
‘‘(2) CRITERIA FOR RECEIVING PAYMENT.—The
Secretary may make a bonus payment under this
subsection to members of a point-of-service network
if the Secretary determines that the members of the
network have reduced the costs to the medicare pro-
gram of the items and services furnished by the net-
work without adversely affecting the quality of care
provided to beneficiaries.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1812(a) (42 U.S.C. 1395d(a)) is
amended—