and the needs of medically underserved popu-
lations. 
(K) Provision of a fraud and abuse preven-
tion and control unit that the Inspector General 
determines meets the requirements of section 
412(a). 
(L) Prohibit payment in cases of prohib-
ited physician referrals under section 304. 
(2) CONSEQUENCES OF FAILURE TO COMPLY.— 
If the Board finds that a State plan submitted 
under paragraph (1) does not meet the requirements 
for approval under this section or that a State 
health security program or specific portion of such 
program, the plan for which was previously ap-
proved, no longer meets such requirements, the 
Board shall provide notice to the State of such fail-
ure and that unless corrective action is taken within 
a period specified by the Board, the Board shall 
place the State health security program (or specific 
portions of such program) in receivership under the 
jurisdiction of the Board. 
(c) STATE HEALTH SECURITY ADVISORY COUN-
CILS.— 
(1) IN GENERAL.—For each State, the Gov-
ernor shall provide for appointment of a State 
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Health Security Advisory Council to advise and 
make recommendations to the Governor and State 
with respect to the implementation of the State 
health security program in the State. 
(2) MEMBERSHIP.—Each State Health Security 
Advisory Council shall be composed of at least 11 in-
dividuals. The appointed members shall include indi-
viduals who are representative of the State health 
security program, public health professionals, pro-
viders of health services, and of individuals (who 
shall constitute a majority) who are representative of 
consumers of such services, including a balanced 
representation of employers, unions and consumer 
organizations. To the greatest extent feasible, the 
membership of each State Health Security Advisory 
Council shall represent the various geographic re-
gions of the State and shall reflect the racial, ethnic, 
and gender composition of the population of the 
State. 
(3) DUTIES.— 
(A) IN GENERAL.—Each State Health Se-
curity Advisory Council shall review, and sub-
mit comments to the Governor concerning the 
implementation of the State health security pro-
gram in the State. 
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(B) ASSISTANCE.—Each State Health Se-
curity Advisory Council shall provide assistance 
and technical support to community organiza-
tions and public and private non-profit agencies 
submitting applications for funding under ap-
propriate State and Federal public health pro-
grams, with particular emphasis placed on as-
sisting those applicants with broad consumer 
representation. 
(d) STATE USE OF FISCAL AGENTS.— 
(1) IN GENERAL.—Each State health security 
program, using competitive bidding procedures, may 
enter into such contracts with qualified entities, such 
as voluntary associations, as the State determines to 
be appropriate to process claims and to perform 
other related functions of fiscal agents under the 
State health security program. 
(2) RESTRICTION.—Except as the Board may 
provide for good cause shown, in no case may more 
than 1 contract described in paragraph (1) be en-
tered into under a State health security program. 
SEC. 
405. 
COMPLEMENTARY 
CONDUCT 
OF 
RELATED 
HEALTH PROGRAMS. 
In performing functions with respect to health per-
sonnel education and training, health research, environ-
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